Collapsible Immersion Rod Click to edit Master subtitle

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Tapan Mehta Amit Parmar Hardik Patoriya 4/17/12

Problem faced by Customer

Water do not heat uniformly. Takes 15-30 minutes to heat a water bucket (13 Liter, 16 Liter, 18 Liter, 20 Liter, 25 Liter).

Need more space to carry a heating rod.

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Existing solution

Immersion rod

Electrode heater
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Existing Solution Providers

Bajaj, Prestige

Good brand name

Chinese manufacturers

Higher profit margin to retailers

local manufacturers

Higher market share

Source: www.bajajelectricals.com , Diversified product www.grotal.com/Noida/Immersion-Rod-Manufacturers-C52 4/17/12

range

Product Features

A collapsible heating rod with innovative design Uniform heating Quality Affordable Price

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Product Attributes

Application:

Water heating Hospital appliances

Pros:

Uniform heating of water Fast heating Compact in size Attractive design

Cons: 4/17/12

User Review:

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Consumer Profile

Hostel students

Studying away from their home. Reside in either hostels or on rent. Do not have or limited accessibility to gas connection, heater.

Pilgrims

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Market Segment

Age group

Students (15- 25 years)

9 million student 1

Pilgrims (30- 60 years)

46 million 2

Source :

1 http://www.teindia.nic.in/Files/Articles/Indian_Education_Sysytem_By_Karthik_Murlidhar 2 http://populationcommission.nic.in/facts1.htm 4/17/12

Population in million

Total Market Size

4.5 million students * 200 Rs = 900 million Rs 22 million pilgrims * 350 Rs = 7700 million Rs

Total market size = 8600 million Rs

Assumption : Half of the student population uses Immersion rod 940:1000 (female: male) population ratio 4/17/12 0.48 * 46 million = 22 million

Target Market (India):

Total production capacity :1,00,000 units/year Total production of immersion rod :45000 units/year Target Market size : 5000 units in 1 year

1st phase : 1000 units * 275 Rs = 275000 Rs/quarter

Student Population in Delhi : 35500 *

2nd phase : 1500 units * 275 Rs = 412500 Rs/quarter 3rd phase : 2500 units * 275 Rs = 687500 Rs/quarter

Total *Source : target market = 1375000 Rs 4/17/12 http://www.city-data.com/city/Delhi-Louisiana.html

Production of Immersion Rod

4/17/12: BV Deemed university, IMED Journal of Management and Social Source Research 2010

Price

Demand based price strategy

Pricing will be kept affordable so that it can be afforded by

Students Pilgrims

Price range

200-250 rupees (1000-1500 watt) 350 rupees (2000-3000 watt)

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Promotion

As complimentary gift with electrical goods like heat blowers, electric iron, etc

Showcase at consumer fairs. Web based marketing

Yellow pages

Under free gift schemes

Local news papers Mall

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Place

Direct Channel

Distributor Stationary shops Mall Stores at transport junctions Web portal

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Business System

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Process line

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Implementation Schedule
Phase
Phase 1
(4 months Nov-feb)

Region
Delhi

Target selling
1000 units*

Phase 2
(4 months March-June)

North-Eastern region Gujarat

2500 units* 1500 units*

Phase 3
(4 months July-Oct)
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* Production= target sales + 20% of target sales

Diffusion Strategy

Phase 1: Delhi

Phase 3: Gujarat

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Phase 2: North Eastern Region Phase 1 : Nov-Feb Phase 2 : March-June Phase 3 : July-Oct

Opportunity

Designer concept Gap between production capacity and actual production

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Risk

Chinese manufactures give higher profit margins

Longer credit period

Good brand name of competitor

Good quality product with low price

Diversified product range

Customized products, targeting different segment

Risk of Duplication

Design Patent

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Financial Scenario
SALES SP in Rs No of Unit Variety 1 Variety 2 200 3500 300 1500 450000 20 2.8 90 50 0.05 162.85 9803.988 6337.029 BEP Variety 1 Varity 2 Fixed Cost Building on rent Machinery(10% of 600000) Electricity Marketing Factory Setup Salary Transportation Patent Total 192000 60000 120000 116600 12005 735000 5000 1000 1241605

Total Sales in Rs 700000 Wire (1.2 meter) Packaging labour charges Heating element Bakellite COGS in 4/17/12 Rs 20 2.8 38.5 50 0.05 111.35

Variable Cost (per unit)

Income Statement Sales Less COGS Gross profit SGA Dep expense Interest enxpense Net income before tax Income tax Net income after tax 4/17/12

Year 0 1150000 634000 516000 988605 60000 210000 -742605 115000 -857605

Year 1 2300000 1268000 1032000 988605 60000 210000 -226605 230000 -456605

Year 2 2875000 1585000 1290000 988605 60000 210000 31395 287500 -256105

Reference

Different types of immersion rod ( http://www.immersionheaters.com/) Electricity consumption ratings

( http://forums.moneysavingexpert.com/showthread.php? ) Bharti vidhyapeeth Deemed university, IMED Journal of Management and Social Research 2010

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Thank You!

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