Professional Documents
Culture Documents
Escorts
Escorts
ESCORTS
ESCORTS
COMPANY PROFILE
The Escorts group, with Escorts Ltd as its flagship company in among
Indias leading corporations operating in diverse fields of AgricultureMachinery, Healthcare, Construction & material handling equipment,
Automotive and Railway ancillaries information technology and Financial
services. The group has 15 modern manufacturing facilities and an extensive
marketing network spread across the country.
The single word completely describes the character philosophy and
success of the company which grow from a small beginning to one of the every
changing dimensions.
From its inception Escorts has firmly believed that success inspiring on
being close to the customer thus every corporate Endeavour address itself to end
user adjusting to ever changing market.
At every step of the way Escorts had inducted the latest technology by
forming alliances with worlds most advanced engineering. And electronic
companies, constantly adapting technology according to Indias need and
situation.
At Escorts, there are many dimensions to a corporations role in society.
Escorts is fully aware that the total well being of the society in which it operates
is of critical importance to the prosperity and growth of business. As a
responsible corporate citizen, Escorts has not only endeavored to encourage
civic improvements, better health and education but also protect environment
and natural resources.
Social conscience of Escorts is mirrored in the establishment of
community outreach and rural development programme. The company hs been
running facilities such as charitable employees medical assistance and pension
scheme, etc. the rural development programme, initiated by the company in
1977, has resulted in a tangible improvement in the quality of lives of thousands
of people residing in 62 villages that encompass this programme. The objective
ESCORTS
HISTORICAL BACKGROUND:The genesis of Escorts goes back to 1944 when two brothers, Mr. H. P.
Nanda and Mr. Yudi Nanda, launched a small agency house, Escorts Agents Ltd.
in Lahore. Over the years, Escorts has surged ahead and evolved into one of
India's largest conglomerates. In this journey of six decades, Escorts has had the
privilege of being associated with some of the world leaders in the engineering
manufacturing space like Minneapolis Moline, Massey Ferguson, Goetze,
Mahle, URSUS, CEKOP, Ford Motor Company, J C Bamford Excavators,
Yamaha, Claas, Carraro, Lucky Goldstar, First Pacific Company, Hughes
Communications, Jeumont Schneider, Dynapac . These valued relationships be
it technological or marketing, are our highly cherished experiences treasures,
which have helped us inculcate best in class manufacturing practices and to
emerge as a technologically independent world class engineering organization.
1944- Launch of Escorts (Agents) Ltd.
1948- Pioneered farm mechanization in the country by launching Escorts
Agricultural Machines Limited, with a franchise from the U.S. based
Minneapolis Moline, for marketing tractors, implements, engines & other farm
equipment.
1948- Launch of Escorts (Agriculture and Machines) Ltd.
1949 - Franchise of Massey Ferguson tractors for northern India
1951 - Escorts established Indias first private Institute of Farm Mechanisation
at Delhi.
1953 -Escorts (Agents) Ltd. and Escorts (Agriculture and Machines) Ltd.
merged to form Escorts Agents Pvt. Ltd.
1954 - 1st industrial venture of Escorts to manufacture piston rings in
5
The Escorts symbol means more than a seen by the eye. It has been
prepared with certain objectives in mind and is symbolic in more than one way.
The philosophy behind Escorts and E in the Escorts is Enterprise. The
Hexagon is a symbol of productivity, precision when interposed as a nut. It
symbolizes a craftsmanship, and mending productivity. The sprains
superimposed of the Hexagon represent the workers and the people of the
Escorts. This forms the letter E the first of Escorts a company even on the
more changing unveiling the future.
ORGANIZATIONAL STRUCTURE
9
Escorts Limited
AGRI-MACHINERY
ESCORTS Ltd.
CARRARO INDIA Ltd.
LONG AGRIBUSINESS LLC
POL MOL ESCORTS SPOIKA ZOO
HEALTH CARE
ESCORTS HEART INSTITUTE & RESEARCH CENTRE Ltd.
ESCORTS HOSPITAL & RESEARCH CENTRE Ltd.
FINANCIAL SERVICES
ESCORTS FINANCE Ltd.
12
AUTO COMPONENTS
Tractors
Escorts manufactures a wide range of tractors, automotive components,
railway equipment and construction & material handling equipment. The group
have several business units that manufacture a wide range of tractors under the
brand names Escort, Farmtrac and Powertrac. The current range involves over
45 models ranging from 25HP to 80HP. The tractor division was started in 1960
with the first Escort tractors produced in 1965. In 1969, a partnership with Ford
was set up to produce licensed Ford tractors for India. Ford became New
Holland, which is currently part of CNH Global, which in turn is owned by the
Fiat Group.
Escorts has production locations in Mrgowo, Poland that was purchased
from Pol-Mot in 2000, and in India. There was an assembly plant in Tarboro,
North Carolina which was purchased from Long Agri, but the North American
subsidiary went into receivership in 2008. Customers, dealers and creditors are
still trying to work through the North American troubles.
A new assembly plant was set up in 2008 in Ghana to assemble 2500
tractors a year.
Escorts tractors are exported around the world to about 41 countries. In
the USA, tractors built by Escorts were imported from India and Poland, and
from LS Tractors in South Korea, all sold under the Farmtrac brand name.
Motorcycles
The motorcycle division of Escorts group started manufacturing Polish
SHL M11 175cc motorcycles under the brand name Rajdoot from 1962. Various
derivatives were produced with slight changes in cycle parts, suspension and
transmission. Production continued for over four decades until it was phased out
in 2005 due to emissions.
In the early 80s, Escorts started making Yamaha motorcycles in India. Rajdoot
350 and Yamaha RX 100 were known for their performance and established
Yamaha as a performance brand in India.135cc RXG, RX135 and RXZ
followed along with small 4-stroke Yamaha motorcycles which were made to
cater to the commuter market. The motorcycle manufacturing unit in Faridabad
was sold to Yamaha India in the late 1990s when Escorts decided to quit the
motorcycle business to concentrate on tractors and auto components.
13
CONSTRUCTION EQUIPMENT
Escorts Construction Equipment Limited (ECEL) was established in
1970 as the Yellow Line. With partners such as Doosan, Altec, Fassi Group,
Hamm, Huata and IHI, ECEL builds forklifts, cranes, backhoes, and excavators,
to name a few.
RAILWAY EQUIPMENT
Railway Equipment Division is a leading railway equipment
manufacturer of the country for over three decades. Certified for ISD9002, the
division has a large pool of engineering manpower. It has facilities for advanced
product development, design, testing and validation. The division offers a range
of products including air and electro pneumatic braking system, couplers, shock
absorbers, composite brake blocks, rail fastening systems and vulcanized rubber
components. The products incorporate technologies from world renowed
companies like Schaku of Germany for couplers, Knorr Bremse of Germany
four air brakes, General & railway. Escorts builds couplers, shock absorbers,
brake systems and brake blocks for Indian Railways.
Suppliers Pty Ltd. of Australia for rail fastening system, ICER of spain
for composite brake blocks and Vulcanite of Australia for Vulcanized rubber
parts. More technical collaboration options are being pursued to address the
opportunities arising from modernization of Indian Railway Metro Projects.
INFORMATION TECHNOLOGIES
The Escort Groups foray into IT and Internet service is channeled
through Escosoft Technologies (software) and Esconet Services (e-enabled
services). The lather has developed 4-5 products automatrix.com, a B2B
exchange for auto components, cell next, which provide internet access and
evince to users of mobile telephony, Iserve an ISP in HARYANA, UP WEST
and KERALA, a health portal and Escolife, a portal for insurance agents.
BUSINESS PROFILE
Escorts Finance Limited in 1987 and is non-banking financial
company. It is primarily engaged in the business of hire purchase, lease
financing, money market operations and merchant banking. It is a
member of the Escorts Group of companies, which owes its origin to
engineering/ manufacturing business, commenced over 50 years ago.
Today the group is a leading and trusted name with diversified interests in
a number of high growth industries including from machinery, two
wheelers, construction and material handling equipment and auto
ancillary products and financial sevices.
FUTURE PLAN
The companys future strategy is to largely focus on financing of
group products and ensure a healthy growth rate and at the same time
maintain a high capital adequacy ratio. The company also plans to
increase the share of construction equipment business in its lending
portfolio. The company has recently started plant hire of construction and
other equipment as an additional facility for its client.
16
ESCORTS LIMITED
Agri Machinery Group
The year was 1960 Escort setup a strategic Agri Machinery group to
venture into tractors. By 1965, this group rolled out on the field our first batch
of tractor under the brand name of Escorts.
Having pioneered from mechanization in the country, Escorts has played
a pivotal role in the agriculture growth in India for over five decades. One of the
leading tractor manufacturers of the country, Escorts produces tractors in the 2775 HP range and has already sold over 6lac tractors. Its tractors are marked
under three brand name viz. Escort, Powertrac, Farmtrac. Escort brand of
tractors are symbolic of reliability & trust and enjoy the confidence of farming
community for the last 45 years. Powertrac brand of tractors are the most fuelefficient tractors in their respective categories that offer excellent value for
money and have helped the farmers improve their quality of life. Farmtrac
brand are the most powerful premium range of tractors that give maximum
productivity to the farmers. Spanning these three brands the company has full
range of tractors to cater to the domestic as well as overseas markets.
The co0mpany is developing state-of-the-art highly fuel efficient
engines with the assistance of AVL of Australia and have also entered into a
joint venture with Carraro SPA of Italy for the manufacturing of transmission
and axles.
To sustain the present momentum and to realize the future goals, Escorts
has invested Rs. 60 Crore towards strengthening new product development
17
South Africa etc, through its dealers network in other potential countries. An
escort has very ambitious plans to expand the dealers network in other potential
countries in the coming year. By the end of the next year, the company hopes to
be the largest exporter of tractors in the Indian Tractor Industry, besides tractors,
the RR6 riding type paddy transplanter in association.
19
In the new millennium, we presented a contemporary range of equipmentArticulated Boom Crane, Tower Crane, Crawler Crane & Power & Telecom
utility material from the world leaders.
We defined customer support by setting up the first pan India dealership
network which has now strengthened to 80 plus strategic locations covering
length & breadth of the country. It also has 17 business centers located at all the
strategic points. In keeping with its commitment to total customer satisfaction &
providing technologically superior products ECEL has tie up with a number of
reputed Internationally company- FRANNA CRANES Pvt. Ltd., Australia and
FASSI GRU INDRAULICHE, Italy for cranes, DAEWOO HEAVY
INDUSTRIES, Korea for Forklifts, JLG INDUSTRIES INC., USA for Aerial
Work Platforms.
PRODUCTS OF ECEL
20
Crawler Cranes
Truck Cranes
Articulated Boom Cranes
Tower Cranes
Forklift Cranes
Arial work Platforms
Telehandlers
Front End Loaders
COMPACTION EQUIPMENTS:
Tandem Vibratory Roller
Vibratory Soil Compactor
UTILITY EQUIPMENTS
Electric/Telecommunications
21
MISSION
To achieve leadership in construction and material handling
equipment business and attain benchmark in cost, quality and customer service
in a manner that all our stake holders i.e Our employees, customers, vendors,
dealers and shareholders will have a sense of pride in ESCORTS
CONSTRUCTION EQUIPMENT LIMITED.
POLICY
We, at ECEL shall attempt to delight our customers by giving them
produces for newer applications and with superior quality.
OBJECTIVE
Towards achieving our quality, we will finalize and issue company
objectives on an annual basis. Based on these annual company objectives, all
department head will develop the objectives for the department.
22
56%
Spare Parts
21%
Unorganised Sector
15%
Services
6%
Exports
2%
23
The imports market is estimated around US$ 375 million. Of these, the
earthmoving, excavation and hauling equipment categories command around 25
per cent. Imported used equipments, which include high end hydraulic mobile
cranes, excavators, motor graders, vibratory compactors comprise a negligible
0.4 per cent of the total construction equipment market.
Company
Market share
JCB India
329
13.2%
BEML
307
12.3%
TELCON
283
11.3%
L&T Case/Komatsu
156
6.3%
Caterpillar India
143
5.7%
Ingersoll Rand
105
4.2%
Volvo
99
3.9%
ECEL
61
2.4%
Greaves Cotton
37
1.5%
ACE Ltd.
36
1.5%
Others
944
37.7%
Total
2500
100.0%
Industry Structure
India produces the entire range of construction equipment for different
applications. The industry can be broadly classified under the following
categories:
Earthmoving equipment
Road construction equipment
Material handling equipment
Tunneling and Drilling equipment
Construction vehicles
The following is the industry structure and the categories involved in the
construction equipment industry:
In terms of size, earthmoving equipment constitutes the biggest segment,
accounting for nearly 57 per cent of the overall equipment market.
Material Handling equipment and tunneling and drilling equipment
follow with 13 per cent and 12 per cent respectively.
25
The
performance of each segment is discussed separately under various heads.
Conve
Earthmoving Equipments
Spraying &
Plastering
Machines
Cranes
Excavators
Excavators are extensively used in many roles such as digging of
trenches and foundations, demolition, general grading/landscaping, heavy lifting
(e.g. lifting and placing of large concrete pipes), river dredging, mining and
brush cutting with hydraulic attachments. Excavators come in a range of
capacities and are usually classified on the basis of tonnage. The lower end
excavators, referred to as mini excavators, find greater usage in urban
infrastructure development and road development. The heavier duty excavators
are used in mining and heavy construction. In India, the level of technology of
the equipment manufactured is at par with international standards with some
exceptions being the limited usage of electronic controls and hydraulic systems
and engines adhering to the latest emission norms.
The excavator market in India was around US$ 733 million in FY06
with a total of about 4455 units being sold. There is a sizeable market for used
equipment as well. Excavators have registered a 30 per cent CAGR
(Compounded Annual Growth Rate) for the past four years. Given the long term
27
Backhoe
The backhoe loader, consisting of a tractor, front shovel/bucket and
small backhoe in the rear is a versatile piece of equipment and is therefore often
the only piece of heavy equipment brought onto small to medium landscaping
projects. A backhoe can duplicate the work of a bulldozer, front end loader and
excavator. The backhoe loader also has the advantage of being driven directly to
28
the different job areas as opposed to other specialised machines which need to
be towed into the site and require external power sources.
India is the second largest market for backhoe loaders in the world with a
market size of approximately US$ 358 million. The market has been growing at
a rate of close to 37 per cent CAGR over last four years. Going ahead growth is
likely to be at least 11 per cent CAGR over the next few years. Most industry
players however expect much faster growth (around 30-40 per cent) in the near
term. JCB India is the leader in this segment with a share of over 70 per cent.
Other players include Telcon, L&T, Caterpillar and Terex. While technology
plays a key role especially for lowering operating costs by making the machine
more fuel efficient, it is not perceived to be as important for backhoes as it is for
excavators. With more players and increased competition, price competition
may increase. The drivers for this market have been the housing and urban
construction. Backhoes are used for all construction applications and hence
have a very high utilisation for renters. Backhoes are perhaps the only market in
India amongst construction equipment that have reached a stage of maturity and
scale where exports could be considered.
Loaders
Loaders are used mainly for uploading materials into trucks, laying
pipes, clearing rubble, and digging. The flexibility of usage is low as compared
to a backhoe and loaders are largely used as complimentary products for
material re-handling in construction and mining applications.
The total market for wheeled loaders was approximately US$ 64 million
in FY06 with a total of about 1321 units being sold and has been growing at a
CAGR of about 41 per cent over the last 4 years. The growth is expected to
continue at 10 per cent CAGR over the next few years. As in the case of
backhoes, faster growth of about 20-30 per cent is expected in the near term.
Unlike excavators, the growth in loaders is greater in the lower capacity
categories (<10T). Key players in the Loaders market are Caterpillar (~50 per
cent share), JCB and Telcon with L&T Komatsu and Volvo being players
with a relatively smaller presence. In the high capacity loaders market (>15T),
Volvo is a significant player.
Most of the customers for loaders are first time buyers and this is the
reason for huge sales of lower end loaders. Just as it is for excavators, a
complete range of products and comprehensive maintenance and service
support are becoming the critical success factors for players in the industry. The
demand of loaders is from increased global demand for iron ore mining
activities in the country.
29
The chart below explains the different material handling equipment and
their market share. Pick and carry cranes is the largest segment with 27 per cent
share of the US$ 325 million material handling equipment market. Slew cranes,
crawler cranes and tower cranes together account for another 24 per cent.
Forklifts have 12 per cent share.
Material Handling Equipment Market Share
Total Market Size ~ US$ 325 Million
Pick-n-Carry Cranes
27%
Forklift
12%
Slew Cranes
11%
Crawler Cranes
8%
Tower Cranes
5%
Others
37%
2.5 per cent of the market within one year of commencing production. The
barriers of entry in this segment are low. The first movers have the added
advantage of established sales, service and distribution network along with an
existing component supplier.
Other Cranes
Other cranes prevalent in India primarily consist of slew cranes, crawler
cranes and tower cranes. These are higher value, more sophisticated cranes than
pick-n-carry cranes and are typically used for heavier duty work.
The market for slew cranes is about US$ 35 million (300 numbers) with
about US$ 13 million (180 numbers) of this being accounted for by imported
used equipment. Within slew cranes, yard cranes are the most prominent,
comprising 65 per cent of all new slew cranes. The crawler cranes market is
about US$ 25 million (210 numbers) with imported used cranes comprising
about US$ 9.5 million (110 numbers). Tower cranes are about US$ 15.6 million
(175 numbers).
In volume terms other cranes comprise about 16 percent of the overall
cranes market in India, but in value terms these cranes account for almost 47 per
cent of the market. While slew cranes have witnessed a CAGR of 34 per cent
over the last 2 years, tower cranes have grown at 71 percent CAGR in the same
period. Industry sources indicate a growth rate of between 15-20 per cent over
the next few years.
Demand for other cranes is driven primarily by the construction and
industrial sectors. Within industrial applications, the key demand drivers going
forward are likely to be the power, refinery and mining sectors. With increasing
average scale of infrastructure and construction projects, the growth rate of slew
(specifically yard/rough terrain) and tower cranes is likely to surpass the
average growth rate of the overall cranes segment. With improved road
networks by 2008-09, demand for truck mounted cranes may also witness a
spike. In the slew cranes segment, used imports dominate the market, with
Tractors India Limited (TIL) being the market largest domestic player. TIL and
ECEL have a market share of around 32 per cent and 6 per cent in terms of
volumes. Telcon is the sole player in the crawler cranes segment with a share of
approximately 50 per cent by volume (balance is accounted for by used
imports). Shirke Potain is the market leader in the Tower crane category with 50
per cent market share followed by ACE at 25 per cent market share. ACE plans
to widen its product portfolio in the cranes segment through manufacture of
Truck Mounted and Tower cranes. This segment has healthy growth prospects.
32
Forklifts
Fork lifts are low tonnage vehicles used to transport materials stored in
pallets, within limited spaces. Most forklifts are in the 1 tonne5 tonnes range,
though equipment up to 20 tonne are available. The flexibility and speed these
equipment offer make them ideal for repetitive material handling tasks
especially in restricted areas like warehouses and yards.
There are 3 types of forklifts based on fuel input - Diesel, Liquefied
Petroleum Gas (LPG) and Battery. Each variant finds application in different
industries based on the load factor determined by the power inputs, pollution
etc. The current market is approximately of 2150 units per annum for forklifts
with a market size of approximately US$ 38 million. The segment has been on a
20 per cent growth trajectory year-on-year and is estimated to grow at a CAGR
between 10-20 per cent. Diesel powered forklifts comprise a bulk of the market
size at 83 per cent and are likely to drive growth going forward. Demand for
forklifts will be driven primarily by new capacity creation and increased
automation in the manufacturing and logistics (warehousing) sectors.
Forklifts contribute to making the end user industry organised and less
labour intensive (in material handling). It has also increased the levels of
palletisation and containerisation. Godrej and Voltas are the two major players
having around 80 per cent market share, with Godrej having 48 per cent share.
The forklifts market is highly price sensitive.
Technology is presently not seen as a differentiator, but with the end user
industries becoming more organised and competitive, it would become
increasingly important.
BASIC FRAMEWORK
33
RESEARCH METHODOLOGY
A research process consists of stages or steps that guide the project
from its conception through the final analysis, recommendations and ultimate
action. The research process provides a systematic, planned approach to the
research project and ensures all aspects of the research project are consistent
with each other.
Research studies evolve through a series of steps, each representing the
answer to a key question.
Research Design:
A research design is the overall framework of the plan used for the
collection and analysis of the data in the financial statement. In corporate, any
research, any report should be problem defined a plan for gathering and analysis
of data. A time framework and budget estimate the research design and present
in organised and systematic form.
In fact a suitable research design guards against collection of the
irrelevant data therefore results in more economy.
I propose to conduct a intensive secondary research to understand the
full impact and implication of the industry, to review and critique the industry
norms and reports, on which certain issues shall be selected, which I feel remain
unanswered or liable to change, this shall be further taken up in the next stage of
exploratory research. This stage shall help me to restrict and select only the
important question and issue, which inhabit the growth in the industry.
The various tasks that I have undertaken in the research design process are:
Defining the information need.
34
Research Objective:
The first step is while conducting definition of research problem. The
project undertaken is value addition that marketer make. The objective of the
study is to find out the current market share of ECEL and suggesting the ways
to increase the market share.
Sub objectives of study are:
To study the consumer behaviour regarding ECEL products.
To make market strategy for ECEL products.
To make SWOT analysis of ECEL.
Data Sources:
Primary as well as secondary source of data were used for the analysis.
Primary data was collected through interview of customers.
Secondary data comes through were:
Company profile
Company website
Magazines, product catalogue, journal & newspaper etc.
Search engine site
Research approach:
A personal interaction with customers has been the main approach to
collect the information required.
The research process has four distinct yet interrelated steps for research
analysis.
It has logical and hierarchical ordering.
35
Each step is viewed as separate process that includes a set of task, step and
specific procedure. The steps undertaken are logical, objective, systematic,
reliable, valid, impersonal and ongoing.
EXPLORATORY RESEARCH
The method I used for exploratory research was
o Primary Data
o Secondary Data
Primary Data
New data gathered to help solve the problem at hand. As compared to
secondary data which is previously gathered data. An example is information
gathered by questionnaire. Qualitative or quantitative data that are newly
collected in the course of research, consists of original information that comes
from people and includes information gathered from surveys, focus groups,
independent observations and test results. Data gathered by the researcher in the
act of conducting research.
This is contrasted to secondary data, which entails the data gathered by
someone other than the researcher information that is obtained directly from
first- hand sources by means of surveys, observation or experimentation.
SECONDARY DATA
Information that already exists somewhere, having been collected for
another purpose. Sources include census reports, trade publications, and
subscription services. There are two types of secondary data: internal and
external secondary data. Information compiled inside or outside the
organization for some purpose other than the current investigation. Researching
information, which has already been published? Market information compiled
for purposes other than the current research effort; it can be internal data, such
as existing sales-tracking information, or it can be research conducted by
someone else, such as a market research company or the U.S. government.
36
DESCRIPTIVE RESEARCH
STEPS in descriptive research:
Statement of the problem
Identification of information needed to solve the problem.
Selection or development of instruments for gathering the information.
Identification of target population and determination of sampling plan.
Design of procedure for information collection.
Collection of information.
Analysis of information.
Generalizations and / or predictions.
Research Instrument:
To carry out research, we used questionnaire research instrument.
Questionnaire have completely open ended question to know respondent inter
37
feeling, and Dichotomous, multiple choice and rating scale ended question. This
also includes service related issues.
Sampling Plan:
After deciding on the research approach and instrument, marketing
researcher must design a sampling plan: This call for three decisions.
1. Sampling unit: Who to be observed?
In our research target population include those customer who do business
in small scale.
2. Sampling size: How many people should be surveyed?
Due to time and money constraint we covered only 50 respondents.
3. Sampling Procedure: How should the respondent to be chosen?
In our study, we covered only those customer who are using ECEL
products.
CONCEPTUAL FRAMEWORK
ESCORT CONSTRUCTION EQUIPMENT
LIMITED
38
Problem Recognition
Information Search
Evaluation of Alternatives
Purchase Decision
40
Purchase Decision:In the evaluation stage, customers form preferences among the brands in
the choice set. The company may also from an intention to buy the most
preferred brand.
In regarding Cranes & Backhoe Loader, when customer takes a decision
to buy these machines, he has to take no. of sub-decisions, those are following:
Brand
Dealer
Timing
After sale service
Payment method
Insurance
If financed from which bank
Spare parts availability
Capacity
Solution
Help in getting work etc.
There are many different types at risks that consumer may perceive in
buying crane.
In case of cranes, Escorts price is high among its competitors but in case of
Backhoe Loader its price is according to the market or may be it is less than its
competitor.
41
42
WEAKNESSES
ECEL had not entered into whole construction equipment industry. Their
main focus is in Cranes, Compactors, Loaders & Forklifts.
According to the customer survey, ECEL customers are not happy with
after sales service. From their point of view, servicing doesnt happen on
time.
OPPORTUNITIES
Scope of increase in market share due to emergence of new markets
43
THREATS
In 1991 Indian adopted globalisation from them the bigger MNCs are
coming and setting up their manufacturing base in India. It is a major
threat for existing players. They have strong financial backups and it
became a difficult for domestic firms to compete with them.
The industry is quite fragmented, in which small player play a very
important role. The built customized products with cheaper quality
techniques. They are eating up the market share of bigger players.
44
BCG MATRIX
To use the chart, analysts plot a scatter graph to rank the business units (or
products) on the basis of their relative market shares and growth rates.
Cash cows are units with high market share in a slow-growing industry.
These units typically generate cash in excess of the amount of cash
needed to maintain the business. They are regarded as staid and boring, in
a "mature" market, and every corporation would be thrilled to own as
many as possible. They are to be "milked" continuously with as little
investment as possible, since such investment would be wasted in an
industry with low growth.
Dogs, or more charitably called pets, are units with low market share in a
mature, slow-growing industry. These units typically "break even",
generating barely enough cash to maintain the business's market share.
Though owning a break-even unit provides the social benefit of providing
jobs and possible synergies that assist other business units, from an
accounting point of view such a unit is worthless, not generating cash for
the company. They depress a profitable company's return on assets ratio,
used by many investors to judge how well a company is being managed.
Dogs, it is thought, should be sold off.
Question marks (also known as problem child) are growing rapidly and
thus consume large amounts of cash, but because they have low market
shares they do not generate much cash. The result is a large net cash
consumption. A question mark has the potential to gain market share and
become a star, and eventually a cash cow when the market growth slows.
45
If the question mark does not succeed in becoming the market leader,
then after perhaps years of cash consumption it will degenerate into a dog
when the market growth declines. Question marks must be analyzed
carefully in order to determine whether they are worth the investment
required to grow market share.
Stars are units with a high market share in a fast-growing industry. The
hope is that stars become the next cash cows. Sustaining the business
unit's market leadership may require extra cash, but this is worthwhile if
that's what it takes for the unit to remain a leader. When growth slows,
stars become cash cows if they have been able to maintain their category
leadership, or they move from brief stardom to dogdom.
As a particular industry matures and its growth slows, all business units
become either cash cows or dogs. The natural cycle for most business units is
that they start as question marks, then turn into stars. Eventually the market
stops growing thus the business unit becomes a cash cow. At the end of the
cycle the cash cow turns into a dog.
The overall goal of this ranking was to help corporate analysts decide which of
their business units to fund, and how much; and which units to sell. Managers
were supposed to gain perspective from this analysis that allowed them to plan
with confidence to use money generated by the cash cows to fund the stars and,
possibly, the question marks. As the BCG stated in 1970:
Only a diversified company with a balanced portfolio can use its
strengths to truly capitalize on its growth opportunities. The balanced portfolio
has:
stars whose high share and high growth assure the future
cash cows that supply funds for that future growth
question marks to be converted into stars with the added funds.
46
MARKETING MIX
47
Four Ps
Four Cs
Product
Customer solution
Price
Customer cost
Promotion
Communication
Place
Convince
48
PRODUCT:
A product is anything that can be offered to a market to satisfy a want or
need. Products that are marketed include physical goods, Service, Experience,
Events, Persons, Places, Properties organizations in foundations and ideas.
This P of marketing mix include various variables related with product
like quality of Product, Features, Brand name etc.
According to my survey, each respondent said Escort Quality is
Superb. Whether he is using Backhoe loader or Crane, but many of the
respondents are not satisfied with after sales service. The main reason behind
this is the Escort has been increasing in market share but Escort has not
increased its Service engineer.
Company should adopted competitive repositioning, because buyers
mistakenly believe a competitors brand has more quality than it actually has.
PRICE:
Price denote the value of the product or services express in terms of
money. It is a powerful instrument to both the buyer and the seller. In the market
place pricing is dangerous and explosive marketers force. It must be used with
great care. Pricing of crane have been set by considering the following
parameters:
49
quality. Some of the respondents are buying competitors crane just because it
has low price than Escorts.
They should be convinced that price is not the only criteria to select a
particular company machines, you have to see many things like usage cost,
maintenance cost, disposal cost, customer benefits etc. if you buy a machine,
just because it has a low prices, but requires frequent maintenance work. You
will not have to pay maintenance cost but also opportunities cost.
In case of Backhoe loader, Escort price is lesser than competitors price
but in case of Cranes, Escorts price is higher than competitors price.
PLACE:
This is the third P of marketing mix. It includes channels of distribution,
marketing coverage, their location and media of transportation etc.
ECEL has a widest network in industry. ECEL has a strong network of
45 dealers all over India. It also has 12 business centers at all the strategic sites.
ECEL has over 10 dealers abroad.
Road & Rail transportation is used by company for transporting their
cranes in India and water transportation for abroad.
DISTRIBUTION CHANNEL:
There are two types of distribution channel followed by company to sell
its products.
These are:
1. Company--------------------->Dealers----------------------->Customers
2. Company------------------------------------------------------->Customers
Even than Escort is known for late delivery. Gone are the days when
customers have to wait for the product after making a deal. This is due to so
much competition in market, if customer found any default weather in
50
delivering the product then he might switch his purchase decision to any other
competitor product.
The reason for the late delivery is that demand is more than the
production capacity. I think company should do major in working capital and
increase its production capacity. It will lead to economic of scale, decrease the
cost of the product and you are in the position to face competition strongly.
PROMOTION:
To promote the sale of the organization activities are considered
essential. Promotion by definition is a persuasive communication, the message
is arranged to facilitate the customer decision making. Promotion is one of the
source of information at disposal by buyers. Firm may have the best product
package, it may also have fair price but the people will not buy the product if
they have never heard of it. Sales does not takes place automatically without
communication.
ECEL should adopt effective advertising strategy, they need to put
banners & posters besides highways and near any construction sites. They
should also adopt the sales approach strategy in which sales representative go
and communicate to the new customers about the ECEL products.
They can also inculcate these things for the promotion of their product:
Personal selling
Giving attractive warranties schemes
Time to time company should organize parties and invite potential
customers and ask their feedbacks about the products used by them.
Escorts group advertisement.
Escorts should distribute some utility with its brand name to the
customers.
Escorts must keep a separate uniform for the service people with its logo
on it and keep mandatory to wear for them.
51
53
CONCLUSION
The Indian construction equipment industry is a key segment of the
manufacturing sector and is poised for excellent growth in the coming years,
based on Indias overall manufacturing sector and infrastructure growth.
Earthmoving equipment, material handling equipment and road construction
equipment are key segments expected to contribute to the bulk of the growth,
driven by construction activity in the parent sectors.
To leverage this opportunity, Indian construction equipment
manufacturers need to focus on developing individual and pooled capabilities to
develop global competitiveness across the sector. Collaborative endeavours to
provide integrated services, industry bodies to promote the industrys interests
and working with the Government to promote technology development are
some of the key measures to be taken.
In order to enhance their market share, ECEL need to improve its
product quality, manufacturing capacity and serviceability followed by
reduction in cost, increase in the product range and finally adopt more
aggressive marketing strategies. The competitive edge lies in satisfying
customers by delivering higher quality products at lower prices.
54
ESCORTS CONSTRUCTION
EQUIPMENT Ltd.
SURVEY OF CUSTOMERS
NAME:LOCATION:BUSINESS PROFILE:-
1. When you have requirement of construction equipment then how you generally search for
product which will fulfil your requirement?
a) Company websites
c) Print & visual media
3.
a) Quality
d) Price
c) Brand image
Please tick the product you have purchased from Escorts in last 5 years?
a) Backhoe loader
c) Vibratory rollers
c) 4-6 years
d) 6 or more
6.
b) 2-4 years
b) No
b) No
55
a) 1-2 days
8.
d) 1 month
If you want some changes in the product then those changes will be in:a) Quality
9.
c) 15 days
c) Appearance
d) Other
b) Once in 15 days
c) Once in a month
b) No
11. Please tick marks the products of Escorts which you are not aware off?
a) Backhoe loader (Digmax)
c) Vibratory rollers
d) Forklift trucks
e) Motor grader
g) Slew crane
f) Wheel loader
i) Tower crane
b) No
13. Please tick mark which you feel can be an effective media for promotion of Escorts products:a) Printed
c) Radio
d) Visual
e) Sales approach
14. Please rate the different construction equipment manufacturing equipment companies on
various parameters:-
COMPANIES
NAME
QUALITY
PARAMETERS
PRICE
APPLICATION
BRAND IMAGE
ESCORTS
JCB
GREAVES
ACE
LIUGONG
STANDARD
OMEGA
56
GENERAL ISSUES:
TECHNICAL ISSUES:
57