It will now have to pull off another marketing miracle for, yet again, it lags in the non-truck tyres segment. But first, it must protect its turf in the truck tyre segment. Premium pitfalls Being a relatively young company, Apollo chose to focus on the replacement market. Plus, the relationships needed to acquire OE business take time. In the replacement market, Apollo smartly offered dealers better margins through higher-priced tyres and got them to push the brand.
Dealers play a critical role, in peddling truck tyres.
Apollo's exclusive dealers availed 60-days credit as opposed to the industry norm of 35 days,'' says an analyst. Add the fact that the price-sensitivity of buyers shoots up during a downturn, and the first chinks in Apollo's premium strategy become apparent. Further, its lack of presence in the OE market meant Apollo had no volume stabilizer. It is being sold via multibrand outlets. The idea was to bring low-end customers into Apollo's fold while simultaneously improving the cash flows.