c Case Study - PVC Insulation Tapes - Porter's Five Forces Analysis


Product Market -  PVC Insulation Tapes -  A Comprehensive Analysis


Report Prepared by -


PVC Insulation TapesPrithviraj S. Eshore

Amit Tandon

Payal Yadav

  Rahul Singh

Rajiv Vidyarthy

Harsh Shah

Siddharth Dahiya

Siddhartha Butalia



PVC Insulation TapesPVC Electrical Insulation Tapes

Product specs (general)

        Lengths : 8 - 25 meters

        Widths : 1.25 cm, 1.90cm & 2.50 cm

        Colours : Black, Yellow, Red, Blue and Green

(Used for distinction in phase wiring)

Category players

Parameter Mapping Matrix

Magic, Miracle, Steelgrip, Wonder, Deer, Anchor, Kona, local players, unbranded products.



        High (Above Rs.7, till roughly Rs.10)

        Medium (Rs.5 – Rs.7 per tape)

        Low (Below Rs.5 per tape)

          Quality parameters

        Stickiness of tape

        Good ‘stitching’

        Adhesive should not spread due to heat

        Long lasting adhesion

        Water, weather and temperature resistant.

        Also resistant to acids, alkalis, oils, greases etc.

porter’s Five Forces Analysis

Threat of intense segment rivalry

The adhesive tape industry consists of the major players Pidilite (acquired Bhor Industries), Morgan, Sanghi, Paramount, Chetana Polypack, Fourpillar Corporation, Asia Chemicals and Tesa. The product types are used for packaging, insulation, mounting, protection, medical, stationery or cellotapes). All-India market size is Rs. 600 Crores and is growing at 10% p.a.

Insulation tapes have a market size of Rs. 40 Crores (approx.). These are made of PVC, Polyester, Teflon, Kapton etc. The major brands in the PVC insulation tapes segment are Magic, Miracle, Steelgrip, Anchor, Wonder and Deer.

Including the unorganized sector, there are around 200 players in the market (even though most are regional). The industry is experiencing decreased margins on production and faces the threat of cheap imports (especially from China). Price warring occurs in the segment among the organized sector, though fluctuations are infrequent as most large players stick to their respective price bands to maintain premium imagery. Advertising battles are not a current phenomenon, though are liable to play a major part in the future. As of now, only Miracle and Steelgrip brands have launched advertisements, both within the last to years.

Threat of New Entrants

Entry and exit barriers do exist, but essentially curtail the larger players . Among the smaller players, firms frequently enter and leave the market and thus returns are stable and low. A multi-brand market exists, with distinct rungs differentiable by price and quality. On the whole, the market exhibits the qualities of an oligopoly. There are a large number of buyers and sellers with distinct market leaders. Most retailers stock select multiple brands but tend to push specific preferred brands (based usually on their margins on different brands). 

Future entry barriers could be patents and licensing requirements. However, the lack of legal implementation (given the large number of unorganised players) negates this. Mobility barriers exist only in terms of distribution chain setup and building relationships with the retailers.

Threat of Substitute product 

There is no distinct brand preference. The brand is rarely demanded at time of purchase, as the consumer typically asks for ‘PVC tape’ or ‘electric tape’. The threat of substitutability exists in the generic category from packaging and cellotapes for household use. However, as final household consumption is minimal and most use is by electricians and auto-mechanics, this may be ignored. Within the specific segment, industrial buying takes place on established quality parameters and supplier relationships, thus substitutability by lower rung players is not a threat, the corporates being brand and quality conscious. With non-industrial buyers, prices need to be monitored closely, as due to largely undifferentiated brands and non-existence of brand loyalty, ‘quality’ tapes may be substituted by local tapes. The threats are of advanced technology which may sway the market, given that prices do not increase significantly, as the consumer is price-sensitive to an extent.

threat of buyer’s growing bargaining

The main differentiator in the PVC electrical insulation tapes market is the buyers and their consumption patterns. Thus, it is imperative that a comprehensive analysis be done of the consumer. Buyer’s may be divided into the various segments based on their use. PVC insulation tape is essentially used in the following -   

Industrial purchase follows the B to B model, is taken on a case-by-case basis, and is restricted to the few organised players in the market. The product is used as a part of the manufacturing process of industrial buyers. However, as it does not form a large portion of input cost, buying usually follows a ‘straight rebuy’ pattern and is based on salesperson-customer relationships as it is a routine product (standardised, with low value and cost and little risk). The end user is rarely the decider or even the influencer in this case, and the purchase department acts as the key-point of contact which is wooed by the salespeople.

With respect to non-industrial buyers, which are the prime focus of competition, the product may be sold to the retailers and then onward through seller-push or to the end consumer (the electricians, auto mechanics etc.) in an attempt to generate demand pull. Due to their significance in their market, these are further analysed in the appendices as follows –


threat of supplier’s growing bargaining power

The raw materials require in the manufacturing process are PVC Films, Synthetic Rubber, Antioxidants, Plastic Resins, Paper Core, Primers, Master Batches etc. Supplier’s bargaining power does not form a significant threat as suppliers are not in a position to leverage their status and raise prices or reduce quantity supplied. Supply of the inputs is essentially in the open market and specific parameters for supply to this industry are negligible, thus reducing supplier differentiation and negotiating power. Moreover, the suppliers are not of a colluding nature, and the cost of switching suppliers is not significantly high.

The players in the industry retain the option of multiple supply sources and thus organisation and concentration on the part of certain suppliers does not affect the market price. Long-term relationships also ensure that frequent variations do not take place and affect the input costs.

Appendix A

Retailer Push – Significant due to low consumer  involvement


         Distribution setup –

        Open Market (Region centric wholesalers)

        Salesmen from company distributors

         Large company distributors supply the product along with other products of the company

         Wide difference in price and margins across retailers though relative hierarchy of the same is maintained

         Retail brands stocked vary across areas depending on

        Company distribution width and depth 

        Retailer choice of stocked items

Retailer Incentives

         The existence of a retailer push market necessitates stock inventory incentives

        Margin price varies across brands

        Company distributors with multiple products can leverage their position

        Credit on sales (known to be given up to 45 days)

Retailer Awareness

        High among top rung (Steelgrip, Anchor, Magic)

        Prompted among others (Wonder, Kona, Deer etc.)

        Within second rung, awareness restricted to stocked brands

Appendix B

Demand Pull – Possible differentiation opportunity for marketers


         Quality perceptions vary and are not primary parameters in the purchase decision

         Low involvement product.

         No distinct brand leader.

         Huge scope for  positioning in consumers mind.

         Consumers tend to stick within price bands depending on price sensitivity as higher priced brands have perceived higher quality

Consumer Awareness

        Restricted to most frequently used brands

        Usually coincides with top rung brands

Target Audience


Ø      Age: 20-45 years

Ø      Region: India

Ø      Occupation: Electricians, Auto Mechanics

Ø      Sex: Male

Ø      Religion: Insignificant

Ø      SEC: D, C

Ø      Family life cycle: Young, single/married.



         Raju hails from a village near Bareilly where his family still resides.

         Works everyday and has a hectic and physically exhausting job.

         Recognizes that he fulfils a need requiring skill  and expertise

         He is glad to do so and make a living out of it.

         Has invested many years perfecting his skills

         His ‘chacha’ took him in when he came to Lucknow after which he set up his own shop.

         Operates primarily in a specific area

         Known by his regular customers who also generate business through word-of-mouth.

         He has recently been thinking of purchasing a mobile phone to make himself more accessible


Product related behavioural patterns

         Occasions: Regular user

         User status: Repeat user

         Loyalty status: None

         Readiness Stage: Informed

         Attitude toward product: High use, low involvement