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PRESENTATION

ON
MARKET POTENTIAL OF
“LOW VOLTAGE SWITCH
GEARS”
IN
RAJASTHAN
[APRIL 2004-JULY 2004]

Facilitated By
Mr.. S. Sanyal Presented By.
Japneet Singh
Mr.M.P.Jindal
Lokesh Doraya
Mr.Vishal Nerurkar
Manish Patidar
1
Mr. Vikas Malhi
WHAT ARE LVSWGRS??

DISTRIBUTION PROTECTION SWITCHING

*ACB *MCCB
*SFU *LOAD BREAK SWITCHES

*CONTACTORS *THERMALOVER LOAD RELAYS


*CONTROL RELAYS *SOFT STARTERS
*MINI COTACTORS *STARTERS

*MCB *RCCB
*DISTRIBUTION BOARDS *ISOLATOR 2
COMPANY PROFILE

•24th Dec 1949- Hindustan Electric Company Limited Was Incorporated

•1965- Name Changed To Hindustan Brown Boveri Limited

•1989- Name Changed To Asea Brown Boveri Limited Due To


Amalgamation of Asea Limited With HBB

•2003- Name Changed To ABB Limited

•1994- ABB Started LVSWGRS Manufacturing in INDIA at Bangalore

•Core Business Area ---


•Power Technologies

•Automation Technologies

•Building Systems 3
4
PROJECT OBJECTIVE

• To forecast the sales revenue of ABB in Rajasthan for “Low


voltage switch gears” for next 3 years.

• To suggest a marketing strategy to ABB for increasing revenue


of LVSWGRS from 34 Lakhs to 3 Crores within next 3 years.

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SUPPLY CHAIN- LVSWGR

PANEL
BUILDER
C
O
D N
E S
SUPPLIER A OEM INDUSTRY
U
L L
E T
R A
N
T

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SURVEY METHODOLGY

•Designing a tool for conducting the survey:


•Data Collection:
Phase I: Jaipur, Jodhpur, Udaipur, Kota.
Phase II: Chittorgarh, Bhilwara and Alwar
•Questionnaire for consumer
•Questionnaire for dealers
•Final analysis:
•Suggestions:

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RAJASTHAN MARKET SCENARIO

•Total LVSWGR Market 27.82 Cr.

•No. of Delaers covered 34

•No. Of customers visited 100

•Average market growth 18%

8
RAJASTHAN MARKET AREA-WISE BREAKUP

Crores PRESENTMARKET GROWTH

14 28%

25%
12 11.82 24%

20%
10 20%
19%

8 16%
15%
12%
10%
6 12%
4.75
10%

4 8%
3.25
3 3

2 4%
1 1

0 0%
JAIPUR UDAIPUR KOTA BHILWARA JODHPUR CHITTORR ALWAR

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PRODUCT SEGMENTWISE BREAKUP

BREAKERS
LPD
20%
17%

Whole Rajasthan SWITCHES


CONTROL 24%
GEARS
39%

BREAKERS
LPD
39%
28%
ABB
CONTROL
GEARS
SWITCHES
25%
8%

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L&T Schneider

LPD
BREAKERS 9%
LPD BREAKERS
17% 21%
31%

CONTROL
CONTROL GEARS
GEARS 46% SWITCHES
SWITCHES
32% 14%
30%

Siemens BCH

LPD
BREAKERS
10%
20%

SWITCHES
CONTROL
20% CONTROL
GEARS
GEARS
50%
100%
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MARKET SHARE OF MAJOR PLAYERS

1200
Lakhs
1058.25
1100
1000
900
800
630.5
700
600
500
340
400
221.25
300
133.75
200 110.5 99.7 95
34 59
100
0
L&T SCHNEIDER BCH SEIMENS MDS GE HAVELLS JYOTI ABB OTHERS

12
RANKING GIVEN BY CUSTOMERS TO ATTRIBUTES:

4.5
4.45
4.45
4.4
4.4
4.35 4.31
4.3 4.27
4.25
4.2
4.15
P R OD U C T S E R V IC E P A C K A GIN G B RA ND

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4
5

3.6
3.8
4.2
4.4
4.6
4.8
RELIABILITY 4.91

SAFETY
4.77

FEATURES
4.54

TECHNICAL
DOCUMENTATION
4.2
PRODUCT ATTRIBUTES

PRICE
4.17

COMPLETE
RANGE
14
4.13
SERVICE ATTRIBUTES

4.8 4 .6 5
4 .5 5 4 .5
4.6
4.4
4.2
4 3 .9
3.8
3.6
3.4
R E S P ON S E TIM E R E P L A C E M E N TSS TOC K A V A IL B IL ITY IN S TA L L A TION

GU ID A N C E
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BRAND ATTRIBUTES

4 .6 4 .4 8
4 .5
4 .4
4 .3
4 .2
4 .0 6
4 .1
4
3 .9
3 .8
B R AN D N AM E D E AL E R R E P U T AT IO N
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PACKAGING ATTRIBUTES

4 .3 8 4 .3 6
4 .3 6
4 .3 4
4 .3 2
4 .3
4 .2 8 4 .2 6
4 .2 6
4 .2 4
4 .2 2
4 .2
INS TA L L A TIO N L EA FL ETS EA L S & CERTIFICA TIO NS
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CUSTOMERS PERCEPTION ABOUT ABB’s ATTRIBUTES

ABB AVG.

4.5 4.5
4 4
3.5 3.5
3 3
2.5 2.5
2 2
1.5 1.5
1 1
0.5 0.5
0 0

PRICE
QUALITY

TRAINING
FINISHING

INSTRUCTION
TECHNOLOGY
MAINTENANCE

AVALIABILITY
DOWN TIME

LEAFLET

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SUPPLIERS POLICIES
S U P P L IE R S C H N E ID ES E IM E N BCH L&T ABB
R S

REVENUE 630.5 221.25 340 1058 34LAKH


LAKH LAKH LAKH LAKH
DEALERS 15 7 11 7 10
SALES 6 2 4 5 1
PERSON
SERVICE 2 0 0 2 0
CENTER
CREDIT 60 30 70 45 45
PERIOD IN
DAYS
D ISC O U N T 20% to 38% 15 to `2 0% to 15 to 20% to
OFFERED 25% 30% 45% 30%
PROFIT 3% 2.5% 3% 3% to 4% to
M ARGIN 4% 5%
DELIVRY 10 to 20 2 0 to 25 10 3 to 4 20 to 30
PERIOD IN
DAYS
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INCENTIVES & PROMOTION

S U P P L I E R S C H N E I D E RS E I M E N S B C H L & T A BB
IN C EN T IV E C ash C ash C ash Q uantity C ash
D i s c o u n t , D i s c o u n t , D i s c o u n t D, i s c o u n Dt i s c o u
T urnover T urnover T urnover nt,
D i s c o u n t ( 2 % D) i s c o u n t , D i s c o u n t T urnov
P r o d u c t F o c u (s 3 % ) er
D iscount D iscou
nt
P R O M O T IO Sem inar, S e m i n a r , S e m i n a r ,I n p l a n t
N A dvT s, G ifts D irect G i f t s S e m i n a r s- ,- - - - - - -
M ailing, Sem inars, --
G ifts, G ifts
Product D irect
D em onstratio M ailers
n **
C O N T R I B U TA d v t . a n d O nly in G ifts Lunch
IO N G ifts 50% new spaper 100% and --------
A dvt. 50% G ifts50% ---

** L&T provide 1% of turnover, for advertising expenses


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ANALYSIS

•DRIVERS INDEX GRAPH

•STRENGTH WEAKNESS OF DIFFRENT PLAYERS

•SERVICE QUALITY GAP ANALYSIS

•ACTION PLAN

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DRIVERS INDEX GRAPH

L & TS IE M EA NB SBB C HS C H N E ID E R

6
5
4
3
2
1
0
Q U A L IT Y P R IC E A W A R E N AE SV SA IL A B IL ITC RY M
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STRENGTH WEAKNESS
SCHNEIDER

STRENGTHS

•AGGRESSIVE PROMOTION
•BRAND PUSH
•EXCELLENT AFTER SALES SERVICE
•AVAILABILITY
•STRONG MARKETING TEAM
•TECHNOLOGICALLY SOUND
•PRICING STRATEGY
• STRATEGIC ALIANCES.

WEAKNESS

•DEALERS DILEMMA 23
STRENGTH WEAKNESS
L&T

STRENGTHS

•AGGRESSIVE PROMOTION.
•BRAND PUSH.
•EXCELLENT AFTER SALES SERVICE.
•AVAILABILITY.
•PRICING STRATEGY.
•QUALITY.
•AWARENESS.

WEAKNESS

•DUPLICACY

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STRENGTH WEAKNESS
ABB

STRENGTHS

•QUALITY.
•TECHNOLOGY.
•COMLETE RANGE

WEAKNESS

• LOW AWARENESS
• PRICING
• DOUBTFUL BRAND POSITIONING
• DELIVERY
• WEAK MARKETING TEAM
• POOR AFTER SALES SERVICE
• NO BRAND PROMOTION SCHEMES 25
STRENGTH WEAKNESS
SEIMENS

STRENGTHS

•GOOD BRAND EQUITY


•GOOD BRAND AWARENESS
•GOOD COMMUNICATION WITH CUSTOMERS
THROUGH DIRECT MAILERS AND SEMINARS
•STRATIGIC ALLIANCES

WEAKNESS

•POOR DEALER NETWORK


•POOR AFTER SALES SERVICE

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STRENGTH WEAKNESS
BCH

STRENGTHS

• GOOD DEALER NETWORK


• FAST DELIVERY.
• GOOD AFTER SALES SERVICE
• SPECIFED INDUSTRY DEMNAD.
• COMPETITIVE PRODUCTS

WEAKNESS

• LIMITED PRODUCT RANGE.


• REACH IN LIMITED INDUSTRIES
• POOR QUALITY PRODUCTS

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Service Quality Gap Model
GAP1: Between what customer expects from the service and what the
management perceives of customers' expectation.

GAP 2: Between, management perceptions of consumer expectations


and translation of perception into service- quality specification

GAP 3: Between, translation of perceptions into service-quality


specifications and service delivered to consumer.

GAP 4: Between service delivered and the external communication to


the consumer.

GAP 5: Between perceived service and the expected service.


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Word of Mouth
Personal Needs Past Experience
Communication

Expected Service

GAP 5
GAP 1 No Gap due to
continuous
Availability competition
Quick response
After sales service
Quick delivery Perceived service
Competitive pricing
Consumer

Marketer

Service Delivery External


Communications
to consumers

GAP 3 GAP 4
Generation of customized Prompt delivery to the
products consumer.

Translation of
Perceptions into
service-quality
specifications
GAP 2
Technical and Financial
feasibility

Management
Perception Of 29
Consumer
Expectations
AIM 3 CRORES

PLAC E C U R R EN T M AR KE T AB B A B B A B B
SH A R E SH A R E 2004 2005 2006

JA IPU R 3.70 43% 3 0 .1 0 62.35 129

U D A IP U R 12 17% 11.9 24.65 51

K O TA 8.30 11% 7.7 15.95 33

B H ILW A R A 8 12% 8.4 1 7 .4 36

JO D H PU R 2 10% 7 1 4 .5 30

C H IT T O R R ** 3.5% 2.45 5.075 1 0 .5

A LW AR * 3.5% 2.45 5.075 1 0 .5

TO TA L 34 100% 70 145 300

All figures in Lakhs. 30


** Chittor is procuring from Udaipur. * Alwar is procuring from Delhi.
AIM 5 CRORES

PLACE CURRENT MARKET ABB 2004 ABB ABB


SHARE SHARE 2005 2006

JAIPUR 3.70 43% 35.80 87.70 215


UDAIPUR 12 17% 14.10 34.70 85
KOTA 8.30 11% 9.15 22.40 55
BHILWARA 8 12% 10 24.50 60
JODHPUR 2 10% 8.35 20.5 50
CHITTORR ** 3.5% 2.95 7.10 17.5
ALWAR * 3.5% 2.95 7.10 17.5
TOTAL 34 100% 83.30 204.08 500

All figures in Lakhs. ** Chittor is procuring from Udaipur. * Alwar is procuring from Delhi.
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SUGGESTIONS:

• APPOINT SALES PERSONS


• ORGANISE SEMINARS
• SEND DIRECT MAILERS
• OPEN A SERVICE CENTRE
• PRODUCT AVAILABILITY AND PROMPT
PRODUCT DELIVERY
• SUPPORT THE DEALER
• DEALER SELECTION PARAMETERS
• SUPPLY CHAIN COMMUNICATION
• ADVERTISEMENT
• CUSTOMISATION
• EMBOSSED SPECIFICATION SEAL
• TARGETTING ALLIANCES
• SPARES’ STOCK
• CRM FEEDBACK FORM
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EXPENSE DETAILS

REGION/ Jaipur Jodhpur Udaipur Chittor Bhilwara Kota Alwar Rajasthan


HEADS garh

SALARY 180,000 180,000 3,60,000

SEMINARS 70,000 70,000 70,000 70,000 70,000 70,000 4,20,000

a) Common 20,000 20,000 10,000 50,000 30,000 1,30,000

b) In-House 5,50,000

DIRECT 10,000
MAILERS

ADV.-- 20,000
*JOURNLS

Total 90,000 270,000 80,000 50,000 280,000 70,000 70,000 9,40,000

* Journals—Industrial Product Finder, Electrical India


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SUSTAINABILITY PRESCRIPTION

• Sync with Market Growth

• Regular Market Promotion

•Confidence building measures (C BM) with dealers


•Common payroll employee

• Stalling Threat From New Entrants.

•Financial backing of the entrant.


•Technology.
•Marketing efforts deployed.
•Brand image.

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AREAWISE INFORMATION

ALWAR

•Total Market As Per Dealers Is 75 Lakh

•While Total Market Perceived by Dealers 1 Crore.

•The Region Is Expected to Grow With 10% Growth Rate

•Customers Covered Are Using 145.85 Lakh LVSWGR Products

•No. Of Customers Covered--17

•No. Of Dealers Covered--2


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SUPPLIERS POLICIES
SUPPLIER SCHNEIDER SIEMENS MDS L&T

REVENUE 12.5 LAKH 2.5 LAKH 3.75 LAKH 50 LAKH


DEALERS 1 1 1
SALES - - - -
PERSON
SERVICE - - - -
CENTER
CREDIT 30 30 15 60
PERIOD IN
DAYS
DISCOUNT Not Disclosed Not Disclosed Not Disclosed 20%
OFFERED
PROFIT Not Disclosed Not Disclosed Not Disclosed 5%
MARGIN
DELIVERY 7 7 7 3
PERIOD IN
DAYS
FREQUENCY YEARLY YEARLY 15 DAYS
OF VISIT
RESPONSE OK OK OK SOON
TIME TO
COMPLAINTS 36
SUGGESTIONS

• Company should appoint a Dealer in this region. And do their business along wi
the dealers.
• Product availability should be good.
• ABB shouldorganise technical seminars and after seminar, company Engineer
should be in touch with these potential customers.
• More emphasis must be given to the new projects. As replacement is one to one.
• Reach toInfluencers' must be increased by regular visit by company Engineer
and dealers.
• Visits must be there even when there is no requirement to brief up the indust
engineers.
• Awareness about the products must be increased.

37
CHITTORGARH

•Total market as per dealers is 80 LAKH.

•While total market perceived by dealers 1 crore.

•The region is expected to grow with 15% growth rate.

•Customers Covered Are Using 84.2 Lakh LVSWGR Products

•No. Of Customers Covered--7

•No. Of Dealers Covered--1

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SUPPLIERS POLICIES

SUPPLIER L&T HAVELLS

REVENUE 64 LAKH 16 LAKH


DEALERS 1 1
SALES PERSON --- ----
SERVICE CENTER --- ---
CREDIT PERIOD IN DAYS CASH CASH
DISCOUNT OFFERED UP TO 35% UP TO 30%
PROFIT MARGIN 5% 5%
DELIVERY PERIOD IN 7 TO 10 AS PER
DAYS REQUIREMENT
FREQUENCY OF VISIT 15 DAYS MONTHLY
RESPONSE TIME TO IMMEDIATE OK
COMPLAINTS
39
SUGGESTIONS

• R e g u la r c o n ta c t w ith c u sto m er is m u st. It c a n b e d o n e th ro u g h -


o S e m in a rs.
o D ire c t m a ile rs.
o P la n t v isit.
• C o m p a n y S h oourg lda n ise se m in a r to
o B rie f a b o u t p ro d u c t ra n g e .
o P ro d u c t’s te c h n ic a l d e ta ils.
o T o h ig h lig h t sp e c ia l fe a tu re s o f A B B p ro d u c t a s c o m p a re d
p la ye rs.
• C o m p a n y sh o u ld a p p o in t a se rv ice e n g in e e r in th is re a so n to p r
c u sto m e r n e e d s.
• A fte r sa le s s e rv ic e sh o u ld b e v e ry g o o d .
• C o . sh o u ld a p p o in t a d eCa le
h itto
r aG
tr a rh.
40
BHILWARA

•Total market as per dealers is 299 LAKH.

•While total market perceived by dealers 333 LAKH

•The region is expected to grow with 25% growth rate.

•Customers Covered Are Using 84.2 Lakh LVSWGR Products

•No. Of Customers Covered--17

•No. Of Dealers Covered--5

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SUPPLIERS POLICIES
SUPPLIER SCHNEIDER SIEMENS MDS L&T G.E ABB

REVENUE 26 LAKH 40LAKH 70 LAKH 100 15 8


LAKH LAKH LAKH
DEALERS 1 1 1 1 1 1
SALES -- --- --- --- --- ---
PERSON
SERVICE -- -- -- --- --- ---
CENTER
CREDIT CASH CASH CASH CASH CASH 45
PERIOD IN
DAYS
DISCOUNT 32% 32% 37% 45% * 25%
OFFERED
PROFIT * * * 5% * 5%
MARGIN
DELIVERY 10 TO 20 20 TO 30 15 3 TO 4 20 45
PERIOD IN
DAYS
FREQUENCY MONTHLY MONTHL MONTHL 15 DAYS MONTH MONT
OF VISIT Y Y LY HLY
RESPONSE IMMEDIATE IMMEDIA IMMEDI IMMEDIA OK OK
TIME TO TE ATE TE
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COMPLAINTS
SUGGESTIONS

• Company should provide full support to dealer in terms of discount, delivery


sales service. The disputes with dealers must be sorted out and commitments
company persons should be fulfilled.
• Product availability should be good.
• Company shouldorganise technical seminars and after seminar, company En
should be in touch with these potential customers.
• Follow up should be good.
• Problem inContactors and Relays, technical staff must look after this.
• Reach toinfluencers must be increased by regular visit by company Engine
dealers.
• After sales service and replacement should be prompt
.

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