AMITY BUSINESS SCHOOL AMITY UNIVERSITY NOIDA, UTTAR PRADESH

A PROJECT REPORT ON
"A COMPARATIVE STUDY OF CONSUMER PREFERENCE FOR BAJAJ BRAND OF HOME APPLIANCES VIS-A-VIS OTHER BRANDS IN EAST DELHI"

SUBMITTED TO MR. PUNEET SAXENA Manager-Instt. North India Appliances BU

SUBMITTED BY ROHIT GARG MBA (Retail Management) Enrol. ID: A0116210004

Amity business school noida

ACKNOWLEDGMENT

Apart from the efforts done by me, the success of this project depends largely on the encouragement and guidelines of many others. I take this opportunity to express my gratitude to the people who have been instrumental in the successful completion of this project.

I would like to show my greatest appreciation to Mr. Puneet Saxena. I would also like to thanks to Mr. Manesh & Mr. Rakesh (BABA DISTRIBUTOR, east Delhi) for their sincere help. I cant say thanks, enough for their tremendous support and help. I feel motivated and encouraged every time I attend meeting with them. Without his encouragement and guidance this project would not have materialized.

The guidance and support received from all the staff member of Mega Electronics was vital for the success of the project. I am grateful for their constant support and help.

PROFILE OF THE COMPANY

INTRODUCTION

The Bajaj Group of India owes immense gratitude to their founding father whose vision and dedication over the years has greatly helped to build a business house that can set standard in Indian industry.

Jamnalal Bajaj was the founding father of the Bajaj Group. The adopted 'fifth' son of Mahatma Gandhi, and the 'merchant prince' who held the wealth he created in trust for the people of his country, Trust - a simple word t hat co nta ins a whole philosophy handed down by Jamnalal Bajaj to his successors. He valued honesty over profit.

kamalnayan Bajaj, elder son of

Jamnalal Bajaj, followed footsteps of his foundation. With characteristic

illustrious father and consolidated the Bajaj

foresight and pragmatic; vision, he launched a steady diversification programme which gave the current name "Bajaj" both its shape and size. His unique management style created a work culture that matched well with the national spirit he had inherited.

Ramkrishna Bajaj took over the reins of the "Bajaj group" in 1972 after Kamalnayan Bajaj and steered the Group from strength to strength for over 22 years. He had also actively participated in the freedom struggle of the country. In post independent India, he had led the youth movement.

Shekhar Bajaj, Chairman & Managing Director of Bajaj Electricals Ltd., started his career with Bajaj Sevashrarn after which he worked at Bajaj International, the groups export company. Mr. Shekhar Bajaj joined Bajaj Electricals in 1980, became the Managing Director in 1987 and took over as the Chairman and Managing Director in 1994. .

HISTORY

People don't just bring their brains to work: they also bring their hearts and soul. They want to feel passionate about what they are doing and be a part of whatever is great. We at Bajaj Electricals Limited, recognize this truism and seek out and strike a dialogue straight with the hearts and souls) of our employees. Here is a quote from Mr. Shekhar Bajaj, our Chairman and Managing Director -

"Every individual has the potential to perform if he or she gets proper motivation, the right opportunity and the freedom to work. In the long run success is achieved when ordinary people perform extraordinarily. It is important to keep an open mind rather than drawing preconceived impressions about people. More often that not , such impressions will be proven wrong."

Faster, Higher, Stronger - is our maxim, our way of individual and organizational performance. This is how we managed a successful business turnaround in Bajaj Electricals Ltd - with and through each one of our employees. And not only our excellent brand of products, our people advantage to us. provide an excellent competitive

We are looking at collaboration for our luminarie business through a licensing agreement as there is a need for technologically superior products which are stateof-the art. We are in advanced discussions. I cannot disclose anything further at this stage," Bajaj Electricals chief operating officer and president R Ramakrishna said.

The luminaire business is one of the five special business units (SBUs) of the company. The others are appliances, pans, lighting and the engineering business. Bajaj Electrical luminaries find applications in the engineering, power, steel, cement, fertilizer, chemical and petrochemical sectors.

Earlier, Bajaj Electricals had entered into a licensing agreement with Murphy Richards of the UK for its irons. This tie-up also entails a technology transfer.

The company is targeting revenues of Rs 1,500 core by the year 2009-10. "The biggest contributor to this will be the engineering business. Till recently, we were only into the manufacture of power transmission towers. Now, we will be installing them too," Mr. Ramakrishna added. The engineering and projects business is also the fastest growing business.

This business has an order book of over Rs 150 core and has grown by over 85%, senior company executives said. The company clocked net sales of Rs 505.26 crore in the last fiscal and is expected to add around 25% to its top line this fiscal, he said. The company which had been facing tough times a few years back has bounced back after the implementation of a restructuring exercise.

This entailed the reorganization in to five SBUs, brand building, and a growth of revenues. Last year, the company also came out with a rights issue at premium of Rs 15 per share. Further, the company also of out of the die-casting business by giving a VRS at the plant, selling the development rights of the land and entering into a non-compete clause with a competitor.

Bajaj Electricals' President and Chief Operating Officer, Mr. R Ramakrishna told Business Line that the restructuring has helped the company to turnaround and now it expects to double its revenues to about Rs 1,000 core within three years. The company hopes to end the current fiscal with revenue of around Rs 730 core, an increase of 20 per cent over fiscal 2008-09.

Mr. Ramakrishna said it had roped in Accenture Consulting to chart out a turnaround for the company. As per the new plan, Bajaj Electricals dropped its
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matrix structure for its organization in favor of separate business units for each of its businesses.

It now has five separate business units - engineering and projects, luminaire, appliances, fans and lighting. "Each of these units compete as separate businesses with its, competitors," Mr. Ramakrishna said. The company also got rid of unviable businesses.

For example, it shut down its die cast operations and offered VRS to 180 people. It also sold surplus land of the unit.

He said the company also went in for financial restructuring by swapping high cost funds with low cost long-term debt. The banks too have lowered interest cost and increased the moratorium for another two years.

The company plans to invest about Rs 20 core, spread over the next fiscal, to double the existing capacity in its engineering unit to execute its Rs 160 core worth of fresh order from Power grid Corporation for erection and commissioning of power transmission tower.

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Mr. Ramakrishna said the engineering unit, which registered a growth of 88 per cent over the last fiscal, is expected to outpace other business units. The company expects about 25 per cent of its revenues to come from its engineering business, he said.

Mr. Ramakrishna said with the Power Grid according thrill the status of approved EPC contractors, it expects bigger orders from the power company. He pointed out that with an estimated investment proposal of Rs 75,000 core by Power grid Corporation; there was a huge opportunity for the company.

Mr. Ramakrishna said the company had entered into a licensing arrangement with Trilux, a leading European luminaries brand and a market leader in lighting in Germany. The tie-up, though is aimed to market the products to premium segments in the country, could lead to manufacturing Trilux products in the long term.

Bajaj's own products to provide full spectrum of lighting products, he said. Similarly, Bajaj's tie-up with UK's leading small appliances brand Murphy Richards had helped it to position itself in the premium end of the market.

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Mr. Ramakrishna said Bajaj Electricals has a market share of between 15 per cent and 20 per cent in the appliances segment, 20 per cent in luminaries and 10 per cent in lighting. The company has also been able to take on the unorganized sector by offering competitive pricing of its products in the lower end. "Our China sourcing strategy has helped us to buy from the world's best without compromising on the quality of the products,"

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BAJAJ ELECTRICALS KEEPS ON SHINING

Bajaj Electricals Limited (BEL) is a part of the "Bajaj Group" o f Ind ia w ho are in t he b us iness o f stee l, s ugar, two wheelers & three wheelers. Bajaj Electricals is well established in their range of products such as lamps & tube lights, luminaries, small household appliances, ceiling fans & table fans and turnkey engineering services. The company has been in existence for the last 60 years and has steadily grown and expanded its business both in domestic and international markets.

Bajaj Electricals has 20 branch offices and 4 regional offices spread in different parts of the country besides being supported by a chain of about 600 distributors, 2500 authorized dealers, over 60,000 retail outlets and over 200 service franchisees

BEL today has five major business units comprising of lighting, luminaries, electric fans, home appliances, turnkey engineering projects. BEL's export activities are well supported through its International division. The Company has recently forayed into electric power generation through wind

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energy in its quest to reduce the depletion of fossil fuels and preserved the environment. Total Quality Management (TQM) has taken roots in some important business processes of the Company. Few business units of the company have already received ISO Certifications while the other BUs are on the anvil to obtain the same.

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Research methodology

1) Direct interface with customers. 2) Questionnaire to be filled by customers containing open ended and close ended questions 3) Consolidation and analysis of data using different analysis test like (SPSS, factor analysis etc) 4) Consolidation and summarization of study, conclusions & recommendations based on findings 5) Direct sales of Bajaj appliances to walk-in customers at retail outlets in East Delhi

Research Methods and Procedures

objectives of the Study:

1) To suggest measures to make Bajaj Electrical Limited compete better with other home appliance brands being sold in East Delhi markets. 2) To study the awareness, perception and strength of the Bajaj brand in home 3) To study the purchase satisfaction level in regards to the strength of the Bajaj Electrical Limited 4) To study the reason behind best home appliances 5) To study their preference for the Bajaj home appliances

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Research Questions

The research questions were short, simple, non-disguised and self explanatory. Almost all the questions were structured in a way so, no confusion creates any discrepancies in the mind of the respondents and also to get honest and straight answers from them. It took a maximum of 05-10 minutes to get this questionnaires filled by respondents. So therefore the questions were framed in an approachable manner and every question complemented the next question.

Participants / Sample size

Data was collected from 50 customers in East Delhi.

Sampling Area & Technique

The study was conducted on field; the questionnaire was filled by customers. The survey mainly covered East Delhi region. The sampling technique used was CONVIENIENCE SAMPLING as it was easier to collect the data and also there was less chances of any favourism.

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Procedure / Instruments Used

Mode of Survey

The consumers had to fill up our questionnaire, which was our instrument of survey. While pursuing the research, structured questionnaire with closed-ended and some open ended questions were used. Structured Questions: they improve the reliability of the study, by ensuring that every respondent is asked the same questions. Structured answers: structuring or standardizing answers which the respondent can choose from in a questionnaire also achieves consistency of form. Additionally, it makes the interpretation of answers, analysis and tabulation, easier than in the case of unstructured answers. Closed-ended questions: questions which structure the possible answers beforehand are known as closed-ended questions. Preparing the questionnaire  The questionnaire was prepared keeping in mind the objectives that we had laid down for the project. Each objective had had a set of questions lined up.  The questionnaire followed the funnel approach i.e. the questionnaire follows a sequence starting with the general questions first and with more specific and personal questions later on to avoid specific questions biasing the general questions.  A close end questionnaire was prepared by us for the same purpose, to be filled by the consumer.
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 We have used the following types of questions in our questionnaire, y Multiple choice questions y Ranking questions

Data Analysis

After collection of data another work necessary for any data collector is to correctly analyze that data. Statistical tools helped us to correctly analyze the data. The statistical tool that we have used in our project is SPSS software. SPSS(originally, statistical package for social sciences) was released in its first version in 1968 after being developed by Norman H. Nie and C. Hadlai Hull.  Statistics included in the basic software: y Descriptive Statistics: Cross Tabulation, Frequencies, Descriptive, Explore, Descriptive Ratio Statistics y Bivariate Statistics: Mean, T-Test, Anova, Correlation( Bivariate, Partial, Distances), Non Parametric Tests y Prediction for numerical outcomes: Linear Regression. Prediction for identifying groups: Factor Analysis; Cluster Analysis (TwoStep, K-Means, Hierarchical) Discriminant.  The statistical tools used in the project are: y Regression Analysis y Cross Tabs y Descriptive analysis

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Summary
Research methodology and procedures are the most important part of a project report. The finding and the result of the research depends upon the methods used, the data collection, the research questions, the data analysis tools used. The final objective of a research is to achieve what it was meant to achieve. The conversion of the objectives into the questionnaire and ultimately the findings from the research is the core of the research project.

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DATA ANALYSIS AND FINDINGS REVIEW OF METHODOLOGY Table 1 Aware Of Bajaj Electricals Cumulative Frequency Percent Valid Percent Percent Valid Yes 50 100.0 100.0 100.0

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Inference : as I take the sample size for 50 respondents in this all the respondents are well aware about the brand

Table 2 Purchased Bajaj appliances Cumulative Frequency Percent Valid Percent Percent Valid yes no Total 31 19 50 62.0 38.0 100.0 62.0 38.0 100.0 62.0 100.0

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Inference : net 62% has purchased the product of Bajaj Electrical

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Table 3 Bajaj appliances at home Cumulative Frequency Percent Valid Percent Percent Valid coolers juicers choppers iron non any other Total 4 9 7 11 17 2 50 8.0 18.0 14.0 22.0 34.0 4.0 100.0 8.0 18.0 14.0 22.0 34.0 4.0 100.0 8.0 26.0 40.0 62.0 96.0 100.0

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Inference: Most preferable product of Bajaj Electrical is iron

Table 4 Other home appliance would prefer Cumulative Frequency Percent Valid Percent Percent Valid Philips maharaja Inalsa others Total 25 10 14 1 50 50.0 20.0 28.0 2.0 100.0 50.0 20.0 28.0 2.0 100.0 50.0 70.0 98.0 100.0

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Inference: the other company brand 50% customer mostly prefer Philips

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Table 5 Cooler you use Cumulative Frequency Percent Valid Percent Percent Valid symphony Bajaj Usha Kenstar any other Total 12 7 7 12 12 50 24.0 14.0 14.0 24.0 24.0 100.0 24.0 14.0 14.0 24.0 24.0 100.0 24.0 38.0 52.0 76.0 100.0

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Inference: Symphony and Kenstar are the most preferable brand of coolers among the customers

Table 6 Satisfied with after sales service Cumulative Frequency Percent Valid Percent Percent Valid yes no Total 20 30 50 40.0 60.0 100.0 40.0 60.0 100.0 40.0 100.0

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Inference : There are around 60% respondents replied that they are not satisfied with the after sales services which they are getting from the company.

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Table 7 Service rank Bajaj Electrical Cumulative Frequency Percent Valid Percent Percent Valid excellent good neutral average poor Total 1 19 15 12 3 50 2.0 38.0 30.0 24.0 6.0 100.0 2.0 38.0 30.0 24.0 6.0 100.0 2.0 40.0 70.0 94.0 100.0

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Table 8 Price service Bajaj Electrical Cumulative Frequency Percent Valid Percent Percent Valid excellent good neutral average poor Total 3 9 26 11 1 50 6.0 18.0 52.0 22.0 2.0 100.0 6.0 18.0 52.0 22.0 2.0 100.0 6.0 24.0 76.0 98.0 100.0

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Table 9 Quality rank Bajaj Electrical Cumulative Frequency Percent Valid Percent Percent Valid excellent good neutral average poor Total 4 18 17 9 2 50 8.0 36.0 34.0 18.0 4.0 100.0 8.0 36.0 34.0 18.0 4.0 100.0 8.0 44.0 78.0 96.0 100.0

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Table 10 After sales service Bajaj Electrical Cumulative Frequency Percent Valid Percent Percent Valid excellent good neutral average poor Total 2 13 17 10 8 50 4.0 26.0 34.0 20.0 16.0 100.0 4.0 26.0 34.0 20.0 16.0 100.0 4.0 30.0 64.0 84.0 100.0

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INFERENCE: from table 7 to 10 : rank Bajaj electrical Quality>service>price>after sale service

Table 11 Switch over from Bajaj Electrical to other brand Cumulative Frequency Percent Valid Percent Percent Valid Price Quality brand image after sales service Accesibility Total 17 9 8 13 3 50 34.0 18.0 16.0 26.0 6.0 100.0 34.0 18.0 16.0 26.0 6.0 100.0 34.0 52.0 68.0 94.0 100.0

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Inference: 34% of respondents replied if they switch over to other brand the main reason is due to its price

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Regression Analysis Variables Entered/ Removed Model 1 Variables Entered Satisfied with after sales service Variables Removed Method . Enter

a. All requested variables entered. b. Dependent Variable: purchased Bajaj appliances

Table 12 Model Summary Model 1 R .639a R Square .409 Adjusted R Square .396 Std. Error of the Estimate .381

a. Predictors: (Constant), satisfied with after sales service

Table 14 ANOVA Model 1 Regression Residual Total Sum of Squares 4.813 6.967 11.780 DF 1 48 49 Mean Square 4.813 .145 F 33.164 Sig. .000a

a. Predictors: (Constant), satisfied with after sales service b. Dependent Variable: purchased Bajaj appliances

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Table 15 Coefficients Unstandardized Coefficients Model 1 (Constant) Satisfied with after sales service B .367 .633 Std. Error .184 .110 .639 Standardized Coefficients Beta t 1.992 5.759 Sig. .052 .000

a. Dependent Variable: purchased Bajaj appliances Inference: from table 13 to 15 it shows that satisfied with the after sales service does not affect the sales of the Bajaj appliances

Factor Analysis

Table 16 Communalities Initial Service rank Bajaj Electrical Price service Bajaj Electrical Quality rank Bajaj Electrical After sales service Bajaj Electrical 1.000 1.000 1.000 1.000 Extraction .971 .763 .686 .971

Extraction Method: Principal Component Analysis. a. Only cases for which Bajaj appliances at home = iron are used in the analysis phase. 36

Table 17 Total Variance Explained Initial Eigenvalues Comp onent 1 2 3 4 Total 2.129 1.262 .564 .044 % of Variance 53.233 31.562 14.109 1.096 Cumulative % 53.233 84.795 98.904 100.000 Extraction Sums of Squared Loadings Total 2.129 1.262 % of Variance 53.233 31.562 Cumulative % 53.233 84.795

Extraction Method: Principal Component Analysis. a. Only cases for which Bajaj appliances at home = iron are used in the analysis phase.

Table 18

Component Matrix Component 1 Service rank Bajaj Electrical Price service Bajaj Electrical Quality rank Bajaj Electrical After sales service Bajaj Electrical .965 .405 .629 .799 2 -.198 .774 .539 -.577

Extraction Method: Principal Component Analysis. 37

a. 2 components extracted. b. Only cases for which Bajaj appliances at home = iron are used in the analysis phase. Inference: it shows that 2 factors affecting Bajaj are price and quality

SWOT ANALYSIS
Strengths: y Brand image y Product quality

y Product awareness in the market. y Dealers distributed widely across the country. y Good will in the market. y Older player in the market. Weakness:

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y y

Lack of market strategies. Lack of advertisement.

y Delay in servicing facility. y Lesser promotion effort. Opportunities: y Take advantage of brand image of Bajaj electrical limited" y y y Ability to convince the companies through market representation. Joint venture would increase database& product range. Increase their presence at dealer point.

y To use market leader strategies.

Threats: y Presence of other competitors with good capture of market e.g. Philips, Usha, Inalsa. y Loyalty of consumers to other brands.

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RECOMMENDATIONS

I would like to recommend some points to the company. This is on the basis of the survey and analysis of the study conducted in East Delhi. 1) The company should keep up its good work and should provide good sere-ice for its product at proper time, so that that the major dissatisfaction among the dealers and buyers is not created.

2) The company should give much emphasis on incentive schemes and more margin of profit so that dealers are able to make more sales and have more profit for the company.

3) Since the purchase decision of the buyers is mostly influenced by the dealers therefore the dealer should be fully equipped with the best of information and some gifts at certain purchases.

4) The company should work on positioning i.e. act of designing the company's offering and image to occupy a distinctive place in the mind of the target market.

5) Company should use differentiation tools: In product differentiation it should focus on-

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y y y y y y y

Form Features Performance Durability Reliability Repairability Design

In service differentiation it should focus ony y y y Ordering ease Delivery Installation Customer consulting

y Maintenance & repair y Miscellaneous

In personnel differentiation it should focus ony y Competence Competence

y Courtesy y y y Credibility Reliability Responsiveness 41

Communication

In channel differentiation it should focus ony y y Coverage Expertise Performance

In image differentiation it should focus ony y y y Symbols Colors Slogans Special attributes

6) Company should also focus on events and sponsorships.

7) As Philips and Inalsa are market leaders whereas Bajaj is market challenger in home appliances it should use market challenger strategies which are given below y Frontal attack:

In pure frontal attack, the attacker matches its opponent's product, advertising. price & distribution. The principal of force says that the side with greater manpower will win. y Flank attack:

The major principal of offensive warfare is concentration of strength against weakness. y Encirclement attack: 42

The encirclement maneuver is an attempt to capture a wide area of the enemy's territory. y Bypass attack:

The most indirect assault strategy is bypass. It means bypassing the enemy and attacking easier markets to broaden one's resource base. y Guerrilla warfare:

It consists of waging small intermittent attacks to harass and demoralize the opponent and eventually secure permanent footholds.

8) Wall paintings, pamphlets_ distribution procedure in the public can also help in the promotion of Bajaj home appliances.

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QUESTIONNAIRE

1) Are you aware of Bajaj Electricals? a) Yes b) No

2) Have you ever purchased a Bajaj appliance? a) Yes b) No

3) Which all Bajaj appliance you have at home?

a) Coolers b) Juicers c) Choppers d) Iron e) Non f) Any other. (plz. specify)

4) Which other home appliance brand would you prefer? a) Philips b) Maharaja c) Inalsa d) Others please specify 5) Which Brand of Cooler do you use?

a)Symphony

b)

Bajaj

c)

Usha

d)

Kenstar

e)

Any

other(specify)
6) Are you satisfied with the after sales service you get by buying Bajaj Home Appliances? [ ] Yes [ ] No

7) How would you rank Bajaj electrical

Excellent Services Price Quality After Sales Service

Good

Neutral

Average

Poor

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8) If ever you need a switch from Bajaj Electrical to other brands, why would it be? a)Price b)Quality c)Brand image d)After-sales service e) Accessibility
f) Any other (specify)

9) Any specific problem faced by BAJAJ? ............................................................................ .. 10) Suggestions for improvement ..

NAME OF CUSTOMER: Age: Occupation: Name of Store: ----------------------------------------------------------------------------------------------------------------

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