Professional Documents
Culture Documents
1
ACKNOWLEDGEMENT
The project “Gauging the sales potential of 15-40 HP Diesel Engine sets in Rajasthan”,
has been undertaken, in partial fulfillment of the requirements of Post Graduate
Diploma in Management (PGDM) offered by Institute of Management Education,
Ghaziabad. The project has been done at Eicher Tractors, a unit of Eicher Limited,
Faridabad. I take this opportunity to thank Prof. H.P. Gupta, Director, IME for
providing me an opportunity to take this project work. I would also like to thank Mr.
Srikant Kapoor, Faculty, IME, for providing guidance during the project. And, above
all I would like to thank Mr. Ramesh Kini, Deputy Marketing Manager, Eicher
Tractors, who was my project guide and was closely associated with the project right
from the beginning and under whose supervision and guidance whole of the project has
been completed. My sincere thanks also goes to those dealers who participated in the
survey work, and people of Rajasthan, who selflessly revealed several information,
without which I would not have been able to unravel several mysteries of the engine
world, which is now part of this report.
2
SYNOPSIS
The aim of the project is to gauge the sales potential of 15-40 HP engines in
Rajasthan.
Research work is based upon the response of questionnaire containing open and
closed ended questions, alongwith statements to be rated on Likert scale.
Business cycle of 10 years has been detected which can predict phases of growth
in number of dealers in Rajasthan.
Market estimate with per annum sales figure in 12 districts of Rajasthan found
out.
3
INTRODUCTION
4
COMPANY PROFILE OF
EICHER
5
AN OVERVIEW
Eicher began its business operations in 1959 with the roll out of India's first
tractor. Today the Eicher Group is a significant player in the Indian automobile
industry with a gross sales turnover of over Rs. 13,700 million in the year 2002-
03.
The Eicher Group has diversified business interests in manufacturing & marketing of Tractors,
Commercial Vehicles, Automotive Gears, Motorcycles, and exports of vehicles, aggregates and
components. Eicher has also invested in the potential growth areas of Management Consultancy
Services. The activities of the Group are divided into the following business units covering all the
business interests.
EICHER LIMITED
- EICHER TRACTORS - Tractors
- ROYAL ENFIELD - Motorcycles
- EICHER DEMM - Gears
EICHER MOTORS LIMITED - Commercial Vehicles
EICHER INTERNATIONAL LTD - Exports
ECS LTD. - Management Consultancy
Eicher has over 5000 employees located in 10 manufacturing facilities and 24 marketing offices all
around the country. The Group has around 950 vendors supplying components and sub-assemblies
which testifies to the strength of the vendor base. The Group's products are brought to the customer
through its network of around 800 dealers distributed across the length and breadth of the country.
6
EICHER TRACTORS
The Eicher Group started in 1948 when the Goodearth Company was set up to sell
and service imported tractors in India. Perceiving an urgent need to mechanise
Indian agriculture, the Company set up a tractor manufacturing facility, Eicher
Tractors Limited in 1959 in collaboration with Gebr. Eicher, Germany in India. The
first Indian tractor rolled out of Eicher's factory at Faridabad in India, in 1960.
Today, there are over 4,00,000 Eicher tractors that contribute to the nation's
agricultural development. Eicher's manufacturing and marketing facilities located
at Faridabad have been awarded ISO 9001 certification.
Eicher Tractors has a technology transfer tieup with Valtra, Inc of Finland. It has an
extensive network of over 400 tractor dealers and around 56 engine dealers across
India with 15 regional offices and 12 depots.
7
EICHER MOTORS
Eicher Motors Limited (EML) was incorporated in 1982 and introduced its first
product, the Canter, a 6 ton GVW truck manufactured at its state of the art plant at
Pithampur, Indore in collaboration with Mitsubishi Motors Corporation, Japan, in
1986. The maiden offering soon created a strong customer base for itself.
From a single 6 Ton GVW truck in 1986, our range today extends from 5T to 16T
GVW trucks and the Skyline and Voila range of Buses. All our products can be
offered in BS II compatible options. We also have arguably the best CNG technology
in the world in our CNG Buses. Pioneering the concept of Built Up vehicles in the
country, we make products that consistently deliver high value to our customers and
are increasingly becoming the preferred option for all CV users, not only in India but
overseas too. Eicher CVs today have significant presence in more than 20 countries
across the world.
Eicher Motors is now poised to further consolidate its position in the CV industry by
entering into the Medium & Heavy Commercial Vehicle segments. Strategic plans
are in place to ensure necessary investments in technology and training to constantly
sharpen our development and manufacturing edge. EML is totally committed to
fulfilling the vision of being one of the top 3 CV manufacturers in the country by
giving customers what they want: vehicles that are safe, fuel efficient, easy to
maintain, enhance driver comfort and in turn productivity. Vehicles that deliver value
by providing low cost of ownership and increased profitability to our customers.
Technological Expertise
Extensive Network
Customized Applications
Efficient cost of ownership
Exports
Vehicle Financing
8
9
EICHER DEMM
Eicher Demm (formerly Ramon & Demm) was set up in 1964, in technical collaboration
with Fratelli Daldi and Mattueucci of Italy - the makers of the famed Demm gears. In
1992, the Eicher Gear Business expanded with the takeover of the Ramon & Demm plant
at Thane, Mumbai.
At present the Gear Business has two plants - at Thane, and Parwanoo in Himachal
Pradesh - which collectively manufacture a spectrum of gear solutions which include:
10
Royal Enfield
Classic Bikes with power for leisure riding is what a Royal Enfield bike stands for, and Royal
Enfield leads this segment of the market in India by leaps and bounds. Its exquisite range of
motorcycles combines distinctive styles with power, riding comfort and ruggedness to deliver a
unique motorcycling experience.
The Beginning
Royal Enfield India was set up in 1955 when it started receiving 350cc bikes in kits from the UK
and assembling them in Chennai, India. But, eventually the entire bike was manufactured in India
and a couple of years later the Company started manufacturing the 500cc Bullet. By its sheer
power, unmatched stability, superior riding comfort and rugged good looks, the Bullet dominated
and continues to dominate the Indian roads. It is the dream choice of every motorcyclist in India
with even the Indian Army and Police endorsing the Bike.
The Eicher Chapter
In 1990, Royal Enfield entered into a strategic alliance with the Eicher Group, and later
merged with Eicher Group in 1994. The Eicher Group, is one of India's leading automotive
group with diversified interests in the manufacture of Tractors, Commercial Vehicles,
Automotive Gears, Exports, Garments, Management Consultancy and Motorcycles.
Since then, the Company has made considerable investments in modernizing its
manufacturing technology and systems and in 1996, when the Government decided to impose
stringent norms for emission Royal Enfield was the first motorcycle manufacturer to comply.
Royal Enfield is amongst the first few Indian companies to obtain the WVTA (Whole Vehicle
Type Approval) for meeting the European Community norms.
With the finest and brightest of teams in the country, comprising of management professionals
and a skillful, committed workforce, the Company has a unique and open culture, making Royal
Enfield a vibrant and responsive company. To its customers in India and elsewhere in the world,
Royal Enfield means more than just motorcycles… it is a sense of belonging to an exclusive
community with unfading passion, emotion and interest. The Company, is all set to augment its
leadership position, be it in the power and leisure bike segment in India or the classic bike
segment elsewhere in the world, by introducing distinctively styled and higher-powered
motorcycles, strengthening existing communities around its products, expanding its network, and
delivering a unique motorcycling experience.
11
Good Earth Publications specializes in the publication of world-class travel guides and
maps. These publications reflect excellence in editorial content and high production
value, and are benchmarked against the best available publications in the world. A highly
professional team of editors, cartographers, designers and production personnel have got
together to bring out these world class travel guides and maps.
Good Earth Publications is the only Indian publishing house which publishes highly
visual guidebooks based on research both on historical and architectural details as well as
hands-on collection of all data relating to travellers' needs.
12
GIS SERVICES & SOLUTIONS
GIS division was formalised in Dec 2000, with the Ministry of Defence, Government of
India , according approval to Eicher for licencing our digital maps of Delhi and satellite
towns.
Eicher now offer GIS products and services that cater to a wide spectrum of applications
in the corporate, and in the infrastructure development segments.
Its services in Digital Cartography include turnkey projects involving the entire gambit of
activities from surveying and mapping to creation of a GIS, and setting up a enterprise
GIS facility for applications in Transportation, Municipal, Electric, Water and Gas
utilities.
Eicher has been delivering engineering solutions to our clients for over 5 years. The
focus of our operations is to enable our customers to bring their quality products to
market in the shortest possible time. We achieve this through a pool of highly qualified
professionals who have honed their skills with live implementation experience in Concept
to Prototype Delivery with Product Design and Development, Engineering Analysis and
Software Services.
Eicher is uniquely poised with experience in the automotive area to ideate, design and
deliver virtual and physical prototypes and products. Highly driven by customer
requirements it deliver turnkey projects on design and development, providing high
quality, rapid time-to-market solutions.
Its Delivery Process is built to translate the customer requirements into delivery
specifications with quality checks. Project teams handle the customer orders with strong
adherence to schedules in a professional manner ensuring complete confidentiality. Its
networked locations ensure optimum use of specialised systems and resources.
13
RESEARCH METHODOLOGY
Size of Sample = 51
To know about the financing of engines survey work in banks has also been done. The
banks visited are:
14
QUESTIONNAIRE
Name:
Address:
Telephone No.:
E-mail:
Fax:
------------------
2.Please indicate the range of engines you are dealing in
3.Rank in order , the range of engines contributing to your sale during last three years.
Please answer the following questions with specific reference to the range of 15-40hp engines
only
5.Please indicate the price range in which 15-40 hp engines are available.
15
6.Is there any other dealer in your territory?
Yes / no
1______________________
2______________________
3____________________
1……………………………………
2…………………………………..
3…………………………………..
4…………………………………..
5…………………………………..
7.2 Why people prefer the brand you are dealing in against other brands available in the market
8.Please explain the kind of strategy adopted by you to sell i.e., competitive pricing
,infringement,borrowed from the company's policy.
e.g.:-credited / market support by the company / field activities
16
9.Please explain how do you manage infringement.
11.What are the warranty / after sales service contract available with you ?
12 . What are the terms for financing available with you ? ( banks / financial instn./ private )
17
QUESTIONNAIRE
ON
SURVEY OF ENGINE SALES
NAME
ADDRESS
CONTACT PERSON
Please react to the following statements on the given scale , about the brand you are dealing
in.Here,
1=strongly disagree
2=moderately disagree
3=neither agree nor disagree
4=moderately agree
5=strongly agree
1)People buy water cooled models because they are ignorant about merits of air cooled models.
18
6)You get sufficient dealership margin in sale.
7)You get adequate incentives and non monetary benefits, like travelling opportunities, to promote the
brand you are dealing in.
8)You are brand loyal and will stick to the brand you are dealing in.
9)You will change the brand , for higher margin , with similar sales potential.
THANK YOU VERY MUCH FOR ANSWERING ALL THE QUESTIONS WITH
PATIENCE.
19
PHASES IN GROWTH OF NO. OF DEALERS
Watch the product life cycle, but more important, watch the market life cycle –
Kotler
Based on how many years old the dealers are in this business a frequency
distribution table has been made.
Table No. 1
20
PLOT OF NO. OF DEALERS AGAINST YEARS OLD THEY ARE
NO. OF DLRS.
10
8
6
NO. OF DLRS.
4
2
0
5
5
0-
-3
-1
-2
-4
10
20
30
40
Fig. 1
NO. OF DLRS.
10
8
6
NO. OF DLRS.
4
2
0
0 5 10
Fig. 2
21
PLOT OF CUMULATIVE NUMBER OF DEALERS AGAINST YEARS OLD
THEY ARE
no. of dealers
60
50
40
30 no. of dealers
20
10
0
40- 35- 30- 25- 20- 15- 10- 5- 0-5
45 40 35 30 25 20 15 10
Fig. 3
no. of dealers
60
50
40
30 no. of dealers
20
10
0
0 5 10
Fig. 4
22
Drawing the Curve for no. of dealers against years old they are, one can see there are
two phases of growth alternating each other.
One can easily see from the no. of dealers curve that the phase of fast growth has
already been round the corner for previous 2-3 years and will continue for 7-8 more
years to come when the curve will go down and a period of slow growth will take
effect.
23
MARKET SHARE & RELATIVE COMPETITION IN
THREE SEGMENTS OF ENGINE SALE
Poor firms ignore their competitor; average firms copy their competitors; winning firms
lead their competitors.
Table No. 2
No. of Dealers
50
40
30
No. of Dealers
20
10
0
0-14 15-40 >40
Fig. 5
24
Table No. 3
15-40
15%
0-14
75%
Fig. 6
Hence rank order of sale of engines of each segment is
1. 0-14HP.
2. 15-40HP
3. >40HP
Now putting the just arrived figures. Under the light of percentages of dealers
dealing in each segment.
Table No. 4
25
0-14 HP 15-40 HP >40 HP
% of Dealers 90% 61% 20%
Market Share 75% 15% 10%
Assuming,
The total no. of Dealers in Rajasthan = P
The volume of sales in Rajasthan = Q
Table No. 5
26
Since,
Therefore,
Competition = K X No of Dealers
No. of Customers
Table No. 6
P/Q:4 P/Q:2P/Q
=1:4:2
Therefore 15-40 HP engine Market is four times more competitive than 0-14
HP Market and it is two times more competitive than >40 HP engine Market
27
Table No. 7
No. of
Dealers
dealing only
air cooled
4%
Both No. of
33% Dealers
Dealing
only water
cooled
63%
Fig. 7
Since, 96.08% of Dealers keep water cooled sets, its immense popularity is
evident against those of the aircooled sets kept by 37.25%.
It was also found out during the survey that air cooled models are popular in
industries, and urban sector while water cooled models are popular in rural &
agricultural sector.
28
AVAILABILITY OF DEALERS IN DIFFERENT PRICE
SITUATION (DEALERS PRICE PREFERENCE)
The best way to get and keep customers is to constantly figure out how to given them
more for less –
Kotler
Table No. 8
29
140000-145000 5
145000-150000 5
150000-155000 3
155000-160000 3
160000-165000 3
165000-170000 3
170000-175000 3
175000-180000 3
180000-185000 3
185000-190000 2
190000-195000 1
195000-200000 1
No. of Dealers
10
8
6
4 No. of Dealers
2
0
105000-
155000-
180000-
130000-
30000-
55000-
80000-
500-
Fig. 8
30
No. of Dealers
10
8
6
No. of Dealers
4
2
0
0 20 40 60
Fig. 9
A hypothetical chart has been prepared to take note of every change in the of no. of
Dealers against rise in price.
Table No. 9
31
PRICE (Rs.) AVAILABLE NO. OF
DEALERS
32
8000-12000 1
33
13000-14000 2
15000 2
16000 2
17000 4
18000 5
19000 6
20000 5
21000 7
22000 7
23000 8
24000 7
25000 10
26000-30000 9
31000 12
32000 10
34500 9
35000 9
36000-39000 9
40000 11
41000-42000 10
43000-45000 10
46000-50000 8
51000-58000 7
59000-60000 7
61000-62000 7
63000-80000 6
81000-93000 5
94000-105000 5
106000-109000 5
101000-150000 5
151000-185000 2
185000-200000 1
34
AVAILABLE NO. OF DEALERS (15-40HP)
14
12
10
8
6
4
2
0
Fig. 10
15
10
0
0 10 20 30 40
35
Fig. 11
JAIPUR
1. Jackson Traders 7
3. Arjun Metals 4
6. Esen Engineers 3
7. Laxmi Agencies 3
8. Capital Engineers 2
9. Atlantic 2
36
16. Vikash Agro engineers 1
8
7
7
6
6
5
4 4
4
3 3 3
3
2 2
2
1 1 1 1 1 1 1
1
Fig. 12
37
SIKAR
1. Arjun Metals
4. Chaudhary Machinery
7. Chaudhary Trading
DAUSA
1. Vijayvargia Sales Co.
2. Rajesh Agencies
3. Rajesh Automobiles
38
KOTA
1. Fatehpuria Bros.
2. Bombay Machinery
3. Govind Agencies
5. Jainsons Enterprises
6. M. M. Sales
9. Delhi Machinery
39
BARAN
1. Ganesh Machinery
2. Garg Traders
4. Jain Traders
5. Delhi Machinery
6. Nagar Machinery
7. Soni Enterprises
8. Nakoda Industries
9. Manoj Traders
BUNDI
1. Rashmi Traders
2. Shanti Traders
4. Jhanwar Traders
6. Usha Co.
7. Sharma Agencies
8. Vijay Agencies
9. Pradeep Electronics
40
JODHPUR
2. Bhagwanti Machinery
4. Kisan Bros.
5. Azad Enterprises
8. Generators International.
9. Kushal Traders
PALI
1. Om Machinery Stores
2. Kisan Bros.
3. Mohan Machinery
SANCHORE
1. G. M. Agencies
2. Gehlot Machinery
3. Jambheshwar Machinery
5. Gayatri Machinery
41
DHORIMANNA
1. Ashapuri Traders
4. Gehlot Machinery
6. Malaxmi Machinery
9. Ganpati Traders
BARMER
1. Barmer Enterprises
2. Marudhar Enterprises
ALWAR
2. Agriculture Associates
4. Subham Agency
5. Indrajit
42
COMPETITION OF BRANDS & BRAND EQUITY
No of Respondents = 51
According to the responses from these dealers of different brands, rank in order of
competitors of different brands has been worked out, based on the following
formula.
43
RANK IN ORDER OF COMPETITORS OF KIRLOSKAR
Table No. 10
POINTS
Crown Ajit
Usha Mercury
3%Atul 3% Field Marshal
Topland 3% 3%
3% 33%
4%
Prakash
6%
Vishal Bharat
7%
Eicher
Cummins 16%
Ashok leyland
9%
10%
Fig. 13
44
3 Satyajit 22
4 Anil 15
5 Indrajit 8
6 Mercury 7
7 Sonnet 6
7 Progressive 6
9 Bharat 5
Sonnet
3% Progressive Kirloskar
3% Bharat
Mercury 39%
2%
Indrajit
3%
4%
Anil
7%
Satyajit
10%
Topland
29%
Fig. 14
Table No. 12
45
3 Prakash 3
Prakash
Mercury 15%
15% Kirloskar
40%
Field Marshal
30%
Fig. 15
Table No. 13
46
Perception of extent of competition given by other brands to Eicher
Satyajit
Sonnet Kirloskar
5%
8% 27%
Anil
11%
Topland
22%
Field Marshal
27%
Fig. 16
47
Topland Prakash
Sonnet
8% 6%
4%
Bharat
10% Kirloskar
48%
Field Marshal
24%
Fig. 17
Cummins
17%
Tata Kirloskar
33% 50%
48
Fig. 18
Table No. 16
Ashok Kirloskar
Leyland 50%
33%
Fig. 19
49
Perception of extent of competition given by other brands to remaining brands
Table No. 17
50
Fig. 20
Fig. 21
700 Brand order in Rajasthan
600
156 Marshal 3.Topland 4.Eicher 5.Usha 6.Ashok Leyland 7. Cummins.
500 2.Field
1. Kirloskar
400 165
PERCEPTIONS,
300 SELLING PROPOSITIONS AND BRAND 186
200 430 11
279 57 108 232
100 54 USPs
78 32 36
9 34
9
0
d
l
a
s
r
n
d
in
a
rs
er
a
la
n
h
k
rs
e
h
la
y
s
os
From these two questions several selling propositions and perceptions about the
th
a
ic
le
U
m
op
M
E
irl
O
u
k
T
K
different brands has been charted. They appear in the order of frequency they are
C
ho
ld
ie
s
F
KIRLOSKAR
Faith in name (Brand Power)
Powerful
51
Availability of service
Genuine parts
Engine is o.k.
Quality
Cheap
Requires overhauling after three years
FIELD MARSHAL
Good quality
Oldest name in the market
Good service
Free service camp in two years
Fuel economy
Availability of spares
Availability on credit
Reasonable price
TOPLAND
Heavy wheel
Less complaints
0% accident rate in 12 HP (Safe)
Good strengths
Availability of service
Fuel economy
52
Cheap
EICHER
Aircooled
Fuel economy
Maintenance free
Good quality
Engine gets derated at high temperature
Based on the information about different brands in question numbers 7.1 & 7.2
unique selling propositions (U.S.P.) of different brands has been worked out.
Table No. 19
53
Topland Accident free
Eicher Fuel economy
Kisan Synonym of Topland
President Synonym of Topland
Satyajit Better piston position
Annapurna Availability of spares
Ashok leyland Heavy duty
Cummins Quality
54
SELLING STRATEGIES
Table No. 20
60
50
40 26
30 35 40 43 45
47
20
10 25 16 11 8 4 6
0
.
rt
t
t..
.
un
..
. ..
fo
t. .
al
ac
co
ef
er
it
rs
d
dv
no
is
re
f te
el
D
A
C
Fi
Fig. 22
Hence selling strategies in the order of popularity among dealers are as follows.
55
1. Advertisement 2.Discount and credit 3.Field activities 4.No effort
5. After sales service.
56
TERRITORIAL INFRINGEMENT
Established channels for different markets and aim for efficiency control and
adaptability.
Successful “go to market” strategies require integrating retailers, wholesalers
and logistical organizations –
Kotler
Based on the response from 51 Dealers it was learnt that infringement is
happening at a sizeable level. Few dealers claimed that 30 to 40 percent of sale is
through infringement. It was also known that few brands are prone to
infringement for example, infringement is rampant among Kirloskar dealers. Few
dealers of Topland and Field Marshal also confided that infringement is
happening in every brand including theirs but not at a noticeable level. Few
dealers also confided that company instigates infringement. Infact Kirloskar has
made “infringement” its defacto policy. A total of 13 dealers out of 51 said that
there is no check to infringement and they counterinfringed in others territory.
However there was a general feeling that infringement acts as disincentive for
field work and brand building exercises.
infringement
57%
no
infringement
43%
57
Fig. 23
• Shrinkage in the sale of big brands, like Kirloskars, because of drought on the one
hand ,and tough competition on the other hand
MANAGING INFRINGEMENT
KIRLOSKAR'S STRATEGY:
(De facto policy)
Kirloskar uses infringement to its advantage by compelling dealers to cut down their
margin & being able to clear inventory at the cost of dealers
(De Jure policy).
• The commission of the infringing party goes to the dealer of the territory
TOPLAND'S STRATEGY
• Make as many dealers in the same territory but give brand name to only one and
change the brand name like Kisan Topland or President Topland etc.
58
WHICH ARE EATING A CHUNK OF THEIR PIE BELIEING THEIR PROJECTED
SALES FIGURE.
FUTURE PERCEPTIONS
Table No. 21
Good 19
Bleak 12
Uncertain 18
Good
Uncertain
39%
37%
Bleak
24%
Fig. 24
Market Buzz about engines’ future
• Demand for high speed engines will increase
• Good rainfall will boost engine sale
• Future of water pumps is bleak
59
• Future of Gensets is bright
The company gives Rs.25/- per set for service to the dealers.
• Eicher Policy
Eicher gives warranty for 1Year or 1000 running hours whichever is earlier.
• Topland Policy
Top land gives 6 months warranty an each set.
60
Ashok Leyland & Cummins offers 1Year warranty
(Dealers of Kota region have curtailed the warranty period to 6 months only,
for all the brands, irrespective of what is promised by the company.)
Every dealer has their own trained mechanic, and barring few exceptions all
of them bear the cost of servicing within warranty period.
Some minor brands like Swaraj, offers guarantee (Which in engine market
means replacement of whole set in case of any fault) of 1year.
61
FINANCING OF ENGINES
From the response of dealers following things has been learnt about financing
of engine. Financing of engine is available through banks. These banks
are:-
• Thar Anchalik Bank.
• Gramin Bank.
• Co-operative Bank
• Land Mortgage Bank.
To get loan from any of these banks, membership is required, which is available
on producing evidence of being native of the region where the Bank is located,
and payment of membership fees. Banks don’t give loan for engines if the
resident is in dark zone (notified by NABARD as regions where water level is
below 50 feets). For non dark Zone, loan is granted for upto 10HP engines, which
should necessarily be ISI marked. There is no list of preferred brand. Whereas Co-
operative Bank requires margin money on quoted amount, Land Mortgage Bank
does not require any margin money. Rate of interest is 11.5%.
In addition to all these Banks several other Banks grant loan as personal loan.
62
ANALYSIS OF
RESPONSE TO STATEMENTS ON
LIKERT SCALE
63
S.1 People buy water cooled models because they are ignorant about merits of air
cooled models.
No. of Respondents = 50
Table No. 22
Strongly Strongly
disagree (1) agree (5)
36% 26%
Moderately
agree (4)
Moderately Neither
14%
disagree (2) agree nor
12% disagree (3)
12%
Fig. 25
Mean likert rating =2.78
64
Inference:
Likert rating of 2.73 and option wise break up of the Response, both shows
general disagreement to the proposed statement.
According to dealers perception about the customer buying water cooled sets,
amidst availability of good air-cooled sets, ignorance, is not the reason behind it
rather, it was learnt there are many barriers behind it. The most prominent are:-
Psychological Barrier and Perceived technological deficiency. People feel
aircooled sets create problems in the long run, like oil spillage, over-heating,
diminishing performance etc. Further water- cooled sets do have some inherent
problems with it but people are accustomed to it and consider it as safe bet
against air-cooled ones.
But it was also found out that air-cooled sets are fairly popular among industries
and corporate for they require little care from the operators.
65
S.2. People ask for most advertised/publicized /visible models.
No. of Respondents = 50
Table No. 23
Strongly
Moderately
disagree (1)
disagree (2)
14%
2%
Strongly
Neither agree (5)
agree nor 56%
disagree (3)
Moderately
8%
agree (4)
20%
Fig. 26
Mean likert rating =4.02
Inference:
66
Likert rating of 4.2 and only 16% of moderate and strong disagreement against
the statement suggests overwhelming acceptance of the proposed statement.
However during the survey it was learnt that visibility creates the most powerful
impact in the engine market, rather than advertising and publicity. People have
herd mentality and prefer to buy brand and model visible in the vicinity. Rural
folks have conservative mindset and they want a ‘secure’ buy rather than
venturing with an unknown brand in the market.
67
No. of Respondents = 50
Table No. 24
Fig. 27
Mean likert rating = 2.3 Strongly
agree (5) Moderately
Inference:
6%to the agree (4)
Likert rating of 2.3 and only 32% people agreeing statement shows,
26%
majority of people don’t buy because of price. However, there is a niche of
Neither
people in every Strongly
region who buy purely for price. There are around 6-7%
agree nor
customers in adisagree (1) purely for price while 25-26% people keep price
region buying disagree (3)
high on the priority50%
of factors influencing their buying decision. 10%
Moderately
S.4. Customers come with predetermined model and brand disagree
to buy.(2)
8%
No. of Respondents = 50
Table No. 25
10% Strongly
Inference: agree (5)
Moderately 52%
agree (4) 68
22%
Likert rating of 4 and 74% of people moderately and strongly agreeing to it,
shows that people come with predetermined brands and models to buy.
S.5. You most of the times change the decision of the customer.
No. of Respondents = 50
Table No. 26
Moderately Strongly
disagree (2) disagree (1)
Strongly
4% 8%
agree (5)
Neither 28%
agree nor
disagree (3)
8%
Moderately
agree (4)
52%
Fig. 29
69
Inference:
Likert rating of 3.88 and moderate agreement of 52% of dealers shows that they
are in partial agreement of the statement. Hence , it may be inferred that dealers
does not change the buyers’ decision most of the times but many times they do so.
70
S.6. you get sufficient margin in sale.
No. of Respondents = 50
Table No. 27
Fig. 30
Strongly Strongly
Mean likert rating = disagree (1)
2.6 agree (5)
36% 18%
Moderately
agree (4)
16%
Inference Moderately Neither
disagree
Likert rating of 2.6 of people clearly not agreeingagree
with 56%(2) to the nor
statement,
20% amongst dealers, regarding thedisagree
shows widespread resentment (3)get in
margin they
10% get 4-5%
sales. It was also revealed during the survey that Kirloskar dealers
margin, Field Marshal dealers get 3-4% margin, Topland dealers get 8-9%
margin, Eicher dealers get 6-7% margin, Kisan & president dealers get 5%
margin. General expectation of dealers is that they should get 10-12 % margin in
sale, so that they could bear the cost of field activities and servicing.
71
S.7. you get adequate incentives and non monetary benefits, like 72raveling
opportunities, to promote the brand you are dealing in.
No. of Respondents = 50
Table No. 28
72
Fig. 31
Strongly
Strongly
agree (5)
disagree (1)
14%
50%
Moderately
agree (4)
28%
Neither
Moderately agree nor
disagree (2) disagree (3)
6% 2%
Inference:
Likert rating of 2.48 with 50% dealers strongly disagreeing and 56% moderately
& strongly disagreeing, while 42% strongly and moderately agreeing to the
statements, denotes, different expectation of dealers from concerned brand
owners. Whereas Kirloskar dealers get target incentive, Topland dealers get target
discount and Field Marshal distributor get gifts like, T.V., V.C.P., Refrigerators
etc, on target fulfillment.
Many dealers get travelling opportunities, once or twice a year. However this is
not the point of contention and many felt they would be happy if such tours are
organized once in two years, so that they too may save their precious time.
73
74
S.8. You are brand loyal and will stick to the brand you are dealing in.
No. of Respondents = 50
Table No. 29
Strongly Strongly
disagree (1) agree (5)
Moderately
18% 44%
disagree (2)
6%
Neither
agree nor Moderately
disagree (3) agree (4)
18% 14%
Inference
Likert rating of 3.5 suggest reservations of dealers in admitting their brand
loyalty. Thus, dealers are not sure if they would stick to the brand they are
dealing in. this shows the extent of uncertainties in this segment of sale.
75
S.9. you will change the brand, for higher margin, with similar sales potential.
No. of Respondents = 50
Table No. 30
Strongly
disagree (1) Strongly
Moderately
22% agree (5)
disagree (2)
34%
6%
Neither
agree nor Moderately
disagree (3) agree (4)
8% 30%
Fig. 32
Mean likert rating = 3.68
Inference
76
Likert rating of 3.68, with 64% of dealers moderately & strongly agreeing to it
shows impact of margin on brand loyalty among dealers. Thus, agreement to
this extent suggests that margin plays a major role in shaping brand loyalty
among dealers. dealers who moderately agree prefer to add the incumbent brand
to the list without loosing the previously existing brand.
77
Table No. 31
78
GAUGING THE SALES POTENTIAL OF 15-40HP
ENGINES IN RAJASTHAN
79
Table No. 32
NAME OF REGION ESTIMATED SALES (15-40HP)
Jaipur 487
Sikar 200
Dausa 115
Kota 372
Barmer 86
Sanchore 172
Dhorimanna 344
Pali 86
Jodhpur 258
Bundi 286
Baran 258
Alwar 143
Alwar Jaipur
Baran
5% 18% Sikar
9%
Bundi 7%
10%
Dausa
Jodhpur 4%
9%
Kota
Pali
Barmer 14%
3% Dhorimanna Sanchore
3%
12% 6%
Fig. 33
Jaipur > Kota> Dhorimanna> Bundi> Jodhpur, Baran> Sikar> Sanchore> Alwar>
Dausa> Barmer, Pali
CUSTOMER BEHAVIOUR
The most important think is to forecast where customers are moving, and to be in front of
them –
80
Kotler
A separate customer’ survey was done to gauge the customers’ buying behaviour. In this
survey it was found out that there is an order in which people choose a brand and model
to buy. This order can be shown as :-
Choice of dealer.
Availability of services & spares.
Quality of the set.
Price of the set.
Dealers have their area of influence and they get their customers from that area only.
Customers choose the dealer based on the performance of sets in his neighborhood or
one previously owned by him. Hence, dealers play the most important role in selling
an engine set. Some of the dealers are even known for assisting the customers in
getting loan, e.g., one Field Marshal dealers, who earlier dealt in ‘Rocket’ brand
engine, was successful in selling bulk of them because of this policy only. Several
people in Hemaguda village of Sanchore Tehsil has bought ‘Rocket’ brand because
of this only. However, customer behaviour has changed by then and few people talk
of buying on credit, even dealers don’t want to sell on credit nowadays (Kota is an
exception, where credit sale in maximum). Nonetheless, dealers still come on top of
their mind while buying an engine.
After having chosen the dealer they know, customers look for whether services and
spares are readily available or not. People are ready to buy a mediocre set which can
be repaired easily by themselves or any readily available mechanic, rather than going
for sophisticated ones with complex engineering and which requires expert handling
in case of fault. An anecdote from an incident may prove useful in this case. While in
Pali, I encountered a villager who told me that he consider Massey Fergusson tractors
better than Ford or Eicher, because Ford or Eicher will not work in case of even miner
81
fault but Massey will work even if there is a fault in its engine. Same principle
applies in the case of diesel engine sets too.
After having ascertained dealer and availability of services and spares, the customers
looks for the quality of the set. Quality of the set is Judged on following parameters.
82
WHY DEALERS ARE SO IMPORTANT
Many businesses are wisely turning their suppliers and distributors into valued partners–
Kotler
Information Barrier
On the left side of the above drawn diagram are the types of customers available in the
market and boxes on the right hand side shows the strategies adopted by dealers to lure
these customers. The broken vertical line shows a semi permeable barrier which can be
passed through the acquaintance with the dealer offering these customers their desired
bargain. Because, credit and discount are offered in the engine market in hidden way,
therefore, customers choose the one based on information floating in his surrounding.
That is why we find dealers commanding influence in pockets. Further, servicing of
engine is also promised by few dealers beyond warranty period. Since, much of the
pricing and servicing contract is being done in confidential manner between customer and
dealer, choice of dealer becomes of paramount importance to the customers.
83
Returning back to the diagram, if the customer is not able to pass through the semi
permeable barrier, he falls into the next lower category just below him and so on. Since,
customers try their best to remain in higher order, therefore, they cling on to the dealer
known to him rather than venturing and scanning the market.
84
EXPLOITING CUSTOMERS’ BEHAVIOUR TO BOOST
SALES POTENTIAL
Since the order of preference in buying a diesel engine set in known which reads
as
And the factor which makes 15-40HP segment most competitive (Relative
competition ratio of 3 segments is 1:4:2) is the overabundance of dealers over
customer. Both the facts suggests, brands should spread themselves all across the
dealers in the targeted territory. The brand like Kirloskar has wide presence
among dealers and hence it is better propositioned in the market. Field Marshals
strategy of distributors driven network will not work in this segment. In fact Field
Marshal is a new entrant in this segment and shall have to learn the hard fact that
it is a segment of very high competition, where competition among dealers can be
combated only by spreading the brand across the dealers.
Eicher is very vulnerable to this competition among dealers because there are very
few number of dealers of Eicher in this segment. In fact brands will find that sales
is directly proportional to the number of dealers in this segment.
A good service policy may be the next target to boost the sales. Ready availability
of spares and service centers across the targeted territory may boost sales. Infact,
anamoly is that dealers play more on advertising and credit and discount, and
services comes last in their preferred tool for sales promotion techniques. Here,
Field Marshal scores over everyone by arranging annual free services camp. Little
to wonder is has acquired an envious aura in the engine market and customers
mindset.
85
Quality of the set is of importance only when the set has passed through two
previous stages in selling process. If the sale is decided on the previous two
parameters then even an O.K. quality will do. Infact, this behaviour is due to the
fact that people buy an engine sets to get return. They want it to work in required
time period. Hence services and spares are above quality in consumers preference.
Among majority of customers price is the last thing they look for in an engine set.
These days pricing is no more a barrier for good quality infact there are few
customers who buy purely an price basis.
Now looking at all the parameters that customers keep in mind while purchasing
an engine set. Kirloskar is the overall winner which plays an all the four fronts
while other brands are playing upon few of them only. Hence, Kirloskars’
Marketing strategy with enormous brand power (shown earlier) is suitably poised
in 15-40HP diesel engine market.
86
MARKET SEGMENT IN 15-40HP, ENGINE SALES
(a) About 12 hours of electric supply:- people buy to supplement the electric
supply from electric lines and use less of engines infact market size is meager
in this segment Sanchore, Jalore & Pali are such type of regions.
(b) About 6hours of electric supply:- people depends fully on diesel engine sets
for irrigation and other applications. Dhorimanna & Barmer are such region.
In fact these are the real market for 15-40HP engines.
(1) High credit sale:- People here prefer credit, which has given rise to a
distinet marketing environment. Kota, Baran & Bundi are such regions.
(2) Moderate credit sale:- Jaipur, Sikar and Dausa.
(3) Low credit sale Jodhpur, Alwar, Dhorimaama, Pali
Sanchore
87
(ii) Seeking heavy duty high utility sets:- rural people, who use sets for
irrigation and related agricultural purposes, seeks water cooled and are not
bothered about weight, portability and noise level.
EICHER PERSPECTIVE
Eicher tractors manufacture engines starting from 22HP to upto 45HP, that means it is
placed in the most difficult segment of engine industry i. e, 15-40HP. Further, engine
sales in this segment is proportion to the number of dealers. with very low number of
dealers in this segment, Eicher can’t expect to boost its sale. The first most important
thing is to increase the number of dealers. Good news is that growth in number of
dealers is passing through the stage of high rate of growth which is expected to be
maintained for coming 7-8 years. The company should try to make maximum number of
dealers within this period. Further, all dealers are not alike. Average sale per dealer
calculated during survey is 29 sets per annum. The company should set a realistic target
and reward the dealers who sell above this level. The realistic target, keeping in view the
brand power of Eicher (rated as No. 4 in industry) is 25 sets. Any dealer who sells above
25 sets in an year should be given target incentive on target discount. Looking at the
rated competitors of Kirloskar (the market leader in this segment), Eicher figures at
number 2 after Field Marshal. But, Field Marshal is new in this segment and unknown in
more than 20HP segment. This elevates Eicher from, ‘Trailer’ to ‘Runner’ status, thus
allowing it to make concentrated frontal attack on Kirloskar. Weak points of Kirloskar
enumerated during survey are:-
88
Eicher may attack on Kirloskar based on following points.
1. Treat dealers as business partners by giving them adequate incentive, realistic target
and other fringe benefits like travelling opportunities, gifts etc.
2. Maintain high level of conformance standard in its set and frame some policy to
remove consumer dissatisfaction in case some of its sets are not meeting the
required standards.
3. Frame a good servicing policy. And annual on biannual service camp, as organized
by Field Marshal, may be ideal for this purpose. Infact a time frame should be
given within which a fault must get corrected.
4. Burst the Myth of aircooled sets being problematic. It should spread awareness
among masses by ‘showing’ the effectiveness and ease of operation of aircooled
engines in mass gathering, exhibition etc, because visibility creates great impact
among masses.
5. Aircooled sets combined with fuel economy as USP and good servicing policy, it
can make a frontal attack on Kirloskar by means of comparative advertisement in
media or wall paintings or public gatherings.
89
ANNEXURE
90
CALCULATION OF MARKET ESTIMATES
10
99 1 + = 109
100
Market estimate of
17
Jaipur = × 3120 = 486.6
109
7
Sikar = × 3120 = 200.367
109
4
Dausa = × 3120 = 114.5
109
13
Kota = × 3120 = 372.11
109
3
Barmer = × 3120 = 85.87
109
6
Sanchore = × 3120 = 171.74
109
12
Dhorimanna = × 3120 = 343.5
109
91
3
Pali = × 3120 = 85.87
109
9
Jodhpur = × 3120 = 257.61
109
10
Bundi = × 3120 = 286.239
109
9
Baran = × 3120 = 257.615
109
5
Alwar = × 3120 = 143.12
109
92
LIST OF DEALERS
JAIPUR
Name of Address Phone & Fax Contact Person
Dealership
Auto Diesel Spare M.I. Road 2378137 (o) Vijay Kumar Uppal
& Services
Esen Engineers 13, Motilal Atal 368661 (o) 378911, Ravi Malhotra
Road 408833
378911 (Fax)
Pratap Diesels Pvt. 453, Sanjay Nagar, 2344351, 2346361 P.S. Sekhawar &
Ltd. ‘D’ Kalwar Road, 0141-23441551 D.S. Sekhawar
Ajmer Sikar Bypass, (Fax)
Jhotwara
Jackson Traders 141 ‘B’ Ganpati 2365120, 2365159 Manju Sharma &
Plaza, M.I. Road 0141-5108538 Mahendra Sharma
(Fax)
Arjun Metals Pvt. 102, City Centre, 2369213, 2375499 Arjun Choudhary
Ltd. S.C.Road 0141-2375498
(Fax)
93
Capital Engineers 165-166, Ganpati 5102333 Rajendra Sharma
Plaza 2388658 (Fax)
Industrial Sales & Katewa Bhawan, 2375371, 5108059 Shashank Bhargava
Manufacture Co. M.I. Road 0141-2366329
(Fax)
Atlantic Agencies M.I. Road, Purohit 2367465 G.R. Nahar
Ji Ka Bagh 0141-2366879
(Fax)
Bhaskar Power Anukampa Tower, 0141-375165 Manish Pareek
Projects (Pvt.) Ltd. Church Road 9829058011
(Mobile)
94
SIKAR
Name of Address Phone & Fax Contact Person
Dealership
Laxmi Agro Kalyani Circle, 01572-251207 (o) Mahavir Prasad
Agencies Silver Jublee Road 255037 (R) Sharma
Arjun Metals Kalyani Circle 255548 Mukanda Ram
New Choudhary Kalyani circle, 51475 (O) 43100 Bhanwar Choudhary
Enterprises Silver Jublee Road (G) 58991 ®
DAUSA
Name of Address Phone & Fax Contact Person
Dealership
Rajesh Agencies Lalsot Road 231754 Ramesh Kumar
Gupta
Rajech Automobile Lalsot Road 230854 Brijmohan Gupta
Khandelwal Engine Lalsot road 230290 D.P. Gupta
Co.
Vijaya Vargia Sales Man Ganj 230139 (O) Nawal vijay
Corp. 230406 ®
PALI
Name of Address Phone & Fax Contact Person
Dealership
Om Machinery Mandia Road 230006 Om Prakash Solanki
& Yogesh Solanki
95
KOTA
Name of Address Phone & Fax Contact Person
Dealership
Gobind Agencies Opp. Allahabad 2450181 Gulab chand
Bank, Shopping 2450181 (Fax)
Centre
Nimish Enterprises Near Payal Hotel, 2333808 (S) Rajendr Tyagi
Nayapura 2430468 (R)
Jainsons Enterprises Nayapura, Near 2340941 S.K. Jain & Hemant
Thana 2451041 (O) Jain
2380598 ®
94141-89091
(Mobile)
Sanjay Agro Nayapura, Near 2322823 Bhanwar Singh
Agencies & Delhi Petrol Pump 2323824
Machinery
Hindustan Nayapura 2322756 Jitendra Kumar
Machinery Mart Dhal
BARAN
Name of Address Phone & Fax Contact Person
Dealership
Manoj Traders Deendayal Park, 230957 Manoj Garg
Sahabad Road
Soni Enterprises Mangrol Road 234488 (O) Jagdish Soni
230232 ®
Bansal Machinery Deendayal Park 230302 Hemant Bansal &
Store 230267 Pramod Bansal
Ganesh Machinery Deendayal Park 230293 (O) Ganesh Lal
Store 231049 ®
232001 ®
Garg Traders Hospital road 231000 Anand Garg &
230372 Bharat Garg
BUNDI
Name of Address Phone & Fax Contact Person
Dealership
Rashmi Traders Lankagate Road 2442125 Bhagwan Totla
96
Sharma Agency Lankagate Road 2447716 Sohanlal Sharma
Sharma & Co. Lankagate Road 2443461 R.C. sharma
Jhanwar Traders Lankagate Tehsil Parmeshwar
Road Jhanwar
Mahajan Mill Store Lankagate road 2443145 Murli Manohar
Lakhotia &
Shelandra Lakhotia
JODHPUR
Name of Address Phone & Fax Contact Person
Dealership
Generators 170, Clock Tower 540085 (O) Lokesh Bhandari &
International 511291 ® Kamal Bhandari
Azad Engine Spares Inside Sojati Gate 2615327 (O) Purushottam
Centre 2622091 (O) Lalwani
2430291 ®
2626542 ®
Bhagwanti Inside Sojati Gate 2639217 (O) Yashwant
Machinery Store 2611807 (O) Bhagchandani
2513559 ®
2513559 ®
Mahesh Engineering Jalori Gate 2435755 Kamal Bhawnani
Centre 2643755
Shree Kishan Bros. Opp. Kankariya 640244, 245 L.N. Bhati
Bldg. Jalori Gate, 640244 (Fax)
Choupasani Road
BARMER
Name of Address Phone & Fax Contact Person
Dealership
Barmer Enterprises Subhash Chowk 222826, 221744 Inder Paliwal
Barmer Machinery Chohtan Road 20050 (P.P) Misrimal Jain &
Parts 224922 (R) Pawan Jain
DHORIMANNA
97
Name of Address Phone & Fax Contact Person
Dealership
B.R Chaudhary N.H-15 Sanchore 02986-221318 Bhiyaram
Machinery Store Road Chaudhary
Gopal Diesel Sanchore Road 221293,221603,221 Ramshwar Lal
Engines 046 Swami
Gehlot Machinery Sanchore Road 02986-221734 Ruparamji Gehlot
Ashapuri Traders Sanchore Road 221532 Khuman Singh
SANCHORE
ALWAR
98
Kendra Road 2345752 (R) & Neeraj
Khandelwal
99
BIBLIOGRAPHY
Marketing Management
- Philip Kotler
Marketing Research
- G.C. Beri
Statistics
- S.C. Gupta
100
“GAUGING THE SALES POTENTIAL OF DIESEL
ENGINE SETS IN RAJASTHAN WITH SPECIFIC
REFERENCE TO 15-40HP ENGINES”
PROJECT REPORT
2003
Submitted by:
RAMESH KUMAR
101
CONTENTS
1. Certificate 1
2. Acknowledgement 2
3. Synopsis 3
4. Introduction 4
6. Research Methodology 16
102
19. Financing of Engines 63
Rajasthan 81-82
potential 87-88
103
INDEX OF TABLES
Range of Engines 28
104
20. Selling Strategies 56
105
INDEX OF FIGURES
9. Smoothened version of
106
18. Competition given to Ashok Leyland 49
Response of Statement-8 77
Engine Sales 82
107