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This is to certify that RAMESH KUMAR, PGDM (Second Year) of Institute of Management Education, Sahibabad, Ghaziabad has done his Summer Project – GAUGING THE SALES POTENTIAL OF DIESEL ENGINE SETS IN RAJASTAHN WITH SPECIFIC REFERENCE TO 15-40HP ENGINES – in EICHER TRACTORS, FARIDABAD under my guidance. The duration of the project work was two months i.e. from 1st May 2003 to 30th June 2003.
(RAMESH KINI) Dy. Marketing Manager Eicher Tractors 59, NIT, Faridabad
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.
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. Market segments in engine sale were identified. Customer behaviour in purchase of engine gauged. Warranty / service policy of different companies are examined. Relative competition ratio among 3 segments of engine sales 0-14 : 15-40 : >40 is found to be 1 : 4 : 2. Brand equity in Rajasthan has been found out Kirloskar > Field Marshal > Topland > Eicher ……….. Extent of territorial infringement and several policies to combat infringement viz. Kirloskar’s, Topland’s etc. In sufficient availability of finance for purchase of engines from various banks. viz.
“Gauging the sales potential of 15-40HP diesel engine sets in Rajasthan”, is a
comprehensive analysis of the engine world, compiling most of information, about growth in number of dealers over year, completion of brands, incentives to dealers, buying and selling strategies, brand USPs, sales potential of different regions, business market of dealership and relative completion and sales potential of different segments of engine sales. The project report is based upon a comprehensive survey work done in Rajasthan during a period of about 45 days’ stay in Rajasthan. Areas visited were, Jaipur, Sikar, Dausa, Kota, Baran, Bundi, Jodhpur, Pali, Jalore, Dhorimanna, Sanchore and Alwar. A separate survey of customers has been done to reveal the consumers’ buying behavour. Analysis is based on a questionnaires response. Accordingly the brand order, extent of infringement, sales potential of regions has been gauged. All the figures are arrived at using scientifically approved statistical tools, on which inference of each question is also based. Limitations and errors if any, are inherent to these statistical tools. All the conclusions arrived at are honestly based on this methodology and does not include any bias with respect to brand and region.
COMPANY PROFILE OF EICHER
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 200203. 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.
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. Committed to providing high quality products, Eicher invests significantly in technology resources and infrastructure. Our manufacturing facilities are spread across three states : Location Faridabad Address Area mtrs) Faridabad 121 00112500 (sq.Annual Capacity Production
59 NIT Haryana India Itarana Road, Alwar Rajasthan - 301 00111400 India Plot No. 1, Sector D, Industrial Area, Mandideep - 462 046 63640 District: Raisen (MP) India
• • • • •
Wide range of tractors, from 61 HP to 24 HP offering the best value for money. Product range includes air cooled and water cooled engines. Highly fuel efficient machines, with low maintenance costs. Conforming to international emission norms. Product range also includes engines in the 22 HP to 32 HP and gensets in the 15 KVA to 30 KVA categories.
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. In India, Eicher Motors has consistently outperformed the industry in terms of growth and currently holds over 30% market share in the 6T-11T GVW segments. In the 9T GVW segment, Eicher Motors continues to be the leader with more than 50% market share. Our well-equipped workshops result in faster turnaround of service. A network of more than 4500 Eicher trained private mechanics, over 133 authorized sales and service centres, and easy availability of genuine parts across more than 300 authorized spares outlets means less downtime and increased opportunities for our customers to earn. 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. THE EML ADVANTAGE Technological Expertise Extensive Network Customized Applications Efficient cost of ownership Exports Vehicle Financing
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:
• • • • • •
Spiral and Hypoid Gears (Crown Wheel and Pinion) Straight Bevel Gears Spur and Helical Gears Cam Shafts Precision Machined Components Machined Housings
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. Royal Enfield - revving up 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.
Maps & Travel Guides
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.
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 ENGINEERING SOLUTIONS 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.
This project work is based on response of a questionnaire which included a variety of questions both open ended and closed. A separate questionnaire on likert scale had also been made. The response was taken during one to one interview with dealers of Rajasthan. The response has been statistically analysed, to make out the conclusions of the findings. Consumer behaviour has been gauged by surveying the real users of the diesel engine sets in villages and quarrying about their preferences and constraints while purchasing a diesel engine set.
Size of Sample = 51 To know about the financing of engines survey work in banks has also been done. The banks visited are: Jodhpur Central Cooperative Bank Rural Bank (Gramin Bank) Thar Aanchalik Bank UCO Bank
Name: Address: Telephone No.: E-mail: Fax: 1.For how many years you are in this business -----------------2.Please indicate the range of engines you are dealing in a)0-14HP b)15-40HP c)>40HP
3.Rank in order , the range of engines contributing to your sale during last three years. a)0-14HP Vol . b)15-40HP vol . c)>40HP vol .
Please answer the following questions with specific reference to the range of 15-40hp engines only 4.Which type of engines are available with you in this range. a)air cooled b)water cooled c)both 5.Please indicate the price range in which 15-40 hp engines are available. Rs--------------RS--------------Rs---------------
6.Is there any other dealer in your territory? Yes / no If yes, then please name them, 1______________________ 2______________________ 3____________________ 7.1Please rank in order the name of competitors in your territory. 1…………………………………… 2………………………………….. 3………………………………….. 4………………………………….. 5………………………………….. 7.2 Why people prefer the brand you are dealing in against other brands available in the market
7.3 why do people buy the No. 1 brand
8.Please explain the kind of strategy adopted by you to sell i.e., competitive ,infringement,borrowed from the company's policy. e.g.:-credited / market support by the company / field activities
9.Please explain how do you manage infringement.
10.Please , explain how do you perceive future of your product in market.
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 )
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. (_) (_) (_) (_) (_) 1 2 3 4 5 2) People ask for most advertised/publicized / visible models (_) (_) (_) (_) (_) 1 2 3 4 5 3)People buy because of price rather than anything else. (_) (_) (_) (_) (_) 1 2 3 4 5 4)Customers come with predetermined model and brand to buy. (_) (_) (_) (_) (_) 1 2 3 4 5 5)You most of the times change the decision of the customers. (_) (_) (_) (_) (_) 1 2 3 4 5
6)You get sufficient dealership margin in sale. (_) (_) (_) (_) (_) 1 2 3 4 5 7)You get adequate incentives and non monetary benefits, like travelling opportunities, to promote the brand you are dealing in. (_) (_) (_) (_) (_) 1 2 3 4 5 8)You are brand loyal and will stick to the brand you are dealing in. (_) (_) (_) (_) (_) 1 2 3 4 5 9)You will change the brand , for higher margin , with similar sales potential. (_) (_) (_) (_) (_) 1 2 3 4 5
THANK YOU VERY MUCH FOR ANSWERING ALL THE QUESTIONS WITH PATIENCE.
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 Years old 0-5 5-10 10-15 15-20 20-25 25-30 30-35 35-40 40-45 No. of Dealers 8 4 8 9 5 5 6 4 2 Cumulative No. of Dealers starting from the oldest 51 43 39 31 22 17 12 6 2
PLOT OF NO. OF DEALERS AGAINST YEARS OLD THEY ARE
NO. OF DLRS. 10 8 6 4 2 0
5 5 5 5 0-3 -1 -2 10 20 30 40 -4 5
NO. OF DLRS.
Fig. 1 Smoothened version of the above drawn curve.
NO. OF DLRS. 10 8 6 4 2 0 0 5 10 NO. OF DLRS.
PLOT OF CUMULATIVE NUMBER OF DEALERS AGAINST YEARS OLD THEY ARE
no. of dealers 60 50 40 30 20 10 0 40- 35- 30- 25- 20- 15- 10- 5- 0-5 45 40 35 30 25 20 15 10
Fig. 3 Smoothened version of the above drawn curve.
no. of dealers
no. of dealers 60 50 40 30 20 10 0 0 5
no. of dealers
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 is the phase of fast growth. And another is the phase of slow growth. Each phase continues for 10 Years 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.
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 Range of engines in HP 0-14 15-40 >40 No. of Dealers 46 31 10 %of Dealers 90.19 61.78 19.6
No. of Dealers 50 40 30 20 10 0 0-14 15-40
No. of Dealers
Table No. 3 Range of engines in HP 0-14 15-40 >40 Total Volume of sales 5572 1088 780 =7440 % Share 74.89 14.62 10.48
Total Volume of sales >40 10% 15-40 15%
Fig. 6 Hence rank order of sale of engines of each segment is 1. 2. 3. 0-14HP. 15-40HP >40HP
Now putting the just arrived figures. Under the light of percentages of dealers dealing in each segment.
Table No. 4
% of Dealers Market Share Assuming,
0-14 HP 90% 75%
15-40 HP 61% 15%
>40 HP 20% 10%
The total no. of Dealers in Rajasthan The volume of sales in Rajasthan =
The above scenario can be depicted like this. Table No. 5 0-14 HP (90/100)P (75/100)Q 15-40 HP (61/100)P (15/100)Q >40 HP (20/100)P (10/100)Q
No. of Dealers No. of Customers
Since, Competition is directly proportional to no. of dealers, and inversely proportional to no. of Customers. Therefore, Competition = K X No of Dealers No. of Customers (K= Proportionality constant) Hence Dealer Customer ratio in each case is Table No. 6 0-14 HP (90/75) P/Q =1.2 P/Q =P/Q Approx. 15-40HP (61/15) P/Q =4.07 P/Q =4 P/Q Approx. >40 HP (20/10) P/Q =2 P/Q =2 P/Q Approx.
Hence relative competition in the three segments is 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
Hence the rule for line extension can be shown as. 0-14 HP 15-40 HP >40 HP
While it is advisable to extend in >40 HP engines area. It is twice so in 0-14 HP engines area.
AIR COOLED vs WATER COOLED
Table No. 7 No. of Dealers dealing only air cooled 2 3.92% No. of Dealers Dealing only water cooled 32 62.75% Both Air cooled Water cooled 49 96.08%
No. of Dealers dealing only air cooled 4%
No. of 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.
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 Based on responses following table has been prepared Table No. 8 Price Range (15-40HP) (Rs.) 5000-10000 10000-15000 15000-20000 20000-25000 25000-30000 30000-35000 35000-40000 40000-45000 45000-50000 50000-55000 55000-60000 60000-65000 65000-70000 70000-75000 75000-80000 80000-85000 85000-90000 90000-95000 95000-100000 100000-105000 105000-110000 110000-115000 115000-120000 120000-125000 125000-130000 130000-135000 135000-140000
No. of Dealers 1 1 5 9 9 8 7 7 8 7 5 6 7 7 6 6 6 5 5 5 4 5 5 5 5 5 5
140000-145000 145000-150000 150000-155000 155000-160000 160000-165000 165000-170000 170000-175000 175000-180000 180000-185000 185000-190000 190000-195000 195000-200000
5 5 3 3 3 3 3 3 3 2 1 1
No. of Dealers 10 8 6 4 2 0 500-
No. of Dealers 10500015500018000013000030
Fig. 8 SMOOTHENED VERSION OF THE PREVIOUS GRAPH
No. of Dealers 10 8 6 4 2 0 0 20 40
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
No. of Dealers
AVAILABLE NO. OF DEALERS
13000-14000 15000 16000 17000 18000 19000 20000 21000 22000 23000 24000 25000 26000-30000 31000 32000 34500 35000 36000-39000 40000 41000-42000 43000-45000 46000-50000 51000-58000 59000-60000 61000-62000 63000-80000 81000-93000 94000-105000 106000-109000 101000-150000 151000-185000 185000-200000
2 2 2 4 5 6 5 7 7 8 7 10 9 12 10 9 9 9 11 10 10 8 7 7 7 6 5 5 5 5 2 1
AVAILABLE NO. OF DEALERS (15-40HP)
14 12 10 8 6 4 2 0
Fig. 10 Smoothened version of the previous curve
AVAILABLE NO. OF DEALERS (15-40HP) 15 10 5 0 0 10 20
TOP DEALERS OF RAJASTHAN
From the response of different dealers of different territories in Rajasthan the dealers of different regions has been ranked in order according to the dealers’ perception JAIPUR 1. 2. 3. 4. 5. 6. 7. 8. 9. Jackson Traders Industrial Sales and manufacturing Arjun Metals Bhaskar Power Projects Sudhir Gen Sets Esen Engineers Laxmi Agencies Capital Engineers Atlantic 4 3 3 3 2 2 1 1 1 1 1 1 7 6 4
10. Pratap Diesels Private Ltd. 11. Auto Diesel Spare and Services 12. Supreme Engineers 13. Laxmi Aircon 14. Eicher Agencies 15. Allied Agencies
16. Vikash Agro engineers
8 7 7 6 6 5 4 4 3 3 2 2 1 1 0 1 1 1 1 1 1 2 3 3 4
SIKAR 1. 2. 3. 4. 5. 6. 7. Arjun Metals Laxmi Agro Agencies New Chaudhary Enterprises Chaudhary Machinery Chaudhary Auto Centre Chaudhary Auto Enterprise Chaudhary Trading DAUSA 1. 2. 3. 4. Vijayvargia Sales Co. Rajesh Agencies Rajesh Automobiles Khandelwal Engine Co.
KOTA 1. 2. 3. 4. 5. 6. 7. 8. 9. Fatehpuria Bros. Bombay Machinery Govind Agencies Maharashtra Engg. & Machinery Jainsons Enterprises M. M. Sales Maheswari Mill Store Hindustan Machinery Mart Delhi Machinery
10. Sanjay Agro Agencies 11. Nimish Enterprises 12. Dasmesh Enterprises 13. Ambika Krishi Kendra
BARAN 1. 2. 3. 4. 5. 6. 7. 8. 9. Ganesh Machinery Garg Traders Banshal Machinery Stores Jain Traders Delhi Machinery Nagar Machinery Soni Enterprises Nakoda Industries Manoj Traders BUNDI 1. 2. 3. 4. 5. 6. 7. 8. 9. Rashmi Traders Shanti Traders Mahajan Mill Store Jhanwar Traders Sharma & Co. Usha Co. Sharma Agencies Vijay Agencies Pradeep Electronics
10. Ashoka Traders
JODHPUR 1. 2. 3. 4. 5. 6. 7. 8. 9. Mahesh Engg. Centre Bhagwanti Machinery Jain Machinery Shop Kisan Bros. Azad Enterprises Harsh Trading Co. Shree Kisan Bros. Generators International. Kushal Traders PALI 1. 2. 3. Om Machinery Stores Kisan Bros. Mohan Machinery
SANCHORE 1. 2. 3. 4. 5. 6. G. M. Agencies Gehlot Machinery Jambheshwar Machinery Barmer Machinery Stores Gayatri Machinery Choudhary Sales Co.
DHORIMANNA 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Ashapuri Traders B. R. Chaudhary Machinery Stores Jangid Krishi Kendra Gehlot Machinery Kishan Machinery Store Malaxmi Machinery Godara Machinery Stores Gopal Diesel Engines Ganpati Traders Vishwakarma Machinery Jagdish Selection Machine Stores Sarvodaya Electricals BARMER 1. Barmer Enterprises 2. Marudhar Enterprises 3. Barmer Machinery Parts ALWAR 1. 2. 3. 4. 5. Khandelwal Krishi Kendra Agriculture Associates Laxminarain Narendra Kumar Subham Agency Indrajit
COMPETITION OF BRANDS & BRAND EQUITY
No of Respondents
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. No of Points = (No. of Brands ranked+1) (No. of respondents of the concerned brand) – sumtotal of ranks assigned Based on the points gathered the different brands has been ranked in descending order
RANK IN ORDER OF COMPETITORS OF KIRLOSKAR Table No. 10 RANK 1 2 3 4 5 6 7 8 9 9 9 12 BRAND Field Marshal Eicher Ashok leyland Cummins Vishal Bharat Prakash Topland Crown Atul Ajit Usha Mercury POINTS 117 57 34 33 24 22 16 12 11 11 11 9
Perception of extent of competition given by other brands to Kirloskar. POINTS
Crown Ajit Usha 3%Atul 3% 3% Topland 3% 4% Prakash 6% Vishal Bharat 7% Cummins 9% Ashok leyland 10% Mercury 3% Field Marshal 33%
Perception of extent of competition given by other brands to Field Marshal Table No. 11 RANK 1 2 BRANDS Kirloskar Topland
POINTS 82 61
3 4 5 6 7 7 9
Satyajit Anil Indrajit Mercury Sonnet Progressive Bharat
22 15 8 7 6 6 5
Perception of extent of competition given by other brands to Field Marshal.
Sonnet 3% Indrajit 4% Anil 7% Mercury 3%
Satyajit 10% Topland 29%
Fig. 14 Perception of extent of competition given by other brands to Topland Table No. 12 RANK 1 2 3
BRANDS Kirloskar Field Marshal Mercury
POINTS 8 6 3
Perception of extent of competition given by other brands to Topland.
Field Marshal 30%
Perception of extent of competition given by other brands to Eicher Table No. 13 RANK 1 1 3 4 5 6 BRANDS Kirloskar Field Marshal Topland Anil Sonnet Satyajit POINTS 10 10 8 4 3 2
Perception of extent of competition given by other brands to Eicher
Sonnet 8% Anil 11%
Topland 22% Field Marshal 27%
Perception of extent of competition given by other brands to Usha Table No. 14 RANK 1 2 3 4 5 6 BRANDS Kirloskar Field Marshal Bharat Topland Prakash Sonnet POINTS 24 12 5 4 3 2
Perception of extent of competition given by other brands to Usha
Field Marshal 24%
Perception of extent of competition given by other brands to Ashok Leyland Table No. 15 RANK 1 2 3 BRANDS Kirloskar Tata Cummins POINTS 3 2 1
Perception of extent of competition given by other brands to Cummins Table No. 16 RANK 1 2 BRANDS Kirloskar Ashok Leyland Tata POINTS 3 2 1
Ashok Leyland 33%
Perception of extent of competition given by other brands to remaining brands Table No. 17 RANK 1 2 3 4 4 4 7 7 9 9 BRANDS Kirloskar Field Marshal Topland Prakash Satyajit S.A Tiger Harvest Progressive Sonnet Varun POINTS 26 20 19 10 10 10 9 9 8 8
Sonnet Progressive 6% 7% Harvest 7% S.A Tiger 8% Satyajit 8%
Kirloskar 19% Field Marshal 16%
Measure of Brand power of each brand Assuming each dealer rates his brand as number one in the territory the brand power of individual brands has been calculated based on the same previous formula. Table No. 18 Brands Points gained by own dealers Kirloskar Field Marshal Eicher Usha Topland Ashok leyland Cummins Others (A) 430 279 54 78 32 9 9 232 Fig. 21 Points given by other dealers (B) 156 165 57 11 108 36 34 186 Brand power (A+B) 586 444 111 89 140 45 43 418
la n d
h a l
700 Brand order in Rajasthan 600 156 500 1. Kirloskar 2.Field Marshal 3.Topland 4.Eicher 5.Usha 6.Ashok Leyland 7. Cummins. 400 165 186 PERCEPTIONS, SELLING PROPOSITIONS AND BRAND 300 430 200 11 57 279 232 34 100 54 78 32 9 9 USPs 108 36 0
h a in s u m m a r d op la n irl os M E U
From these two questions several selling propositions and perceptions about the
different brands has been charted. They appear in the order of frequency they are
heard in the market.
KIRLOSKAR Faith in name (Brand Power) Powerful
th e rs
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
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 NAME OF BRANDS Kirloskar Field Marshal U.S.P. Brand power Ready availability of service & spares.
Topland Eicher Kisan President Satyajit Annapurna Ashok leyland Cummins
Accident free Fuel economy Synonym of Topland Synonym of Topland Better piston position Availability of spares Heavy duty Quality
Based on the response from 51 dealers a frequency distribution table of different strategies for selling has been made. Table No. 20 SELLING STRATEGIES NO. OF DEALERS Advertisement 25 (50%) Field activities 16 (32%) Credit sale 11 (22%) Discount 8 (16%) After sales service 4 (8%) no effort 6 (12%) Series 1 denotes the strategies adopted by the dealers while.
60 50 40 30 20 10 0
. er t. .
rt no ef fo
Series 2 shows dealers not adopting the corresponding strategies. Fig. 22
Hence selling strategies in the order of popularity among dealers are as follows.
1. Advertisement 2.Discount and credit 3.Field activities 4.No effort 5. After sales service.
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.
no infringement 43%
Fig. 23 Infringement is rampant in engine market because of following reasons: • • Overall shrinkage in the sale of engine
Shrinkage in the sale of big brands, like Kirloskars, because of drought on the one hand ,and tough competition on the other hand
Infringement is the indicator of shrinkage in sale, and degree of infringement is directly proportional it. 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. FIELD MARSHAL'S STRATEGY • Outright cancellation of dealership of the infringing party.
INFRINGEMENT IS FACED BY THE BIG BRANDS AT THE NOTICEABLE LEVEL BECAUSE OF LARGE NO. OF DEALERS VYING FOR CONSISTENT MARKET SHARE IN THE PERIOD OF DECLINING OVERALL SALES VOLUME.FURTHER IT IS ACCENTUATED BY INCREASING COMPETITION BY OTHER BRANDS
WHICH ARE EATING A CHUNK OF THEIR PIE BELIEING THEIR PROJECTED SALES FIGURE.
The response of dealers has been divided into three categories (i) (ii) (iii) Good – number of dealers perceiving future of engine industry as good. Bleak – number of dealers perceiving future of engine industry as bleak or dark. Uncertain – number of dealers perceiving future of engine industry as Uncertain or based on factors like rain supply of electricity etc. Table No. 21 Good Bleak Uncertain 19 12 18
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
Future of Gensets is bright
WARRANTY & SERVICE CONTRACTS
Based on response from dealers following information has been gathered regarding warranty and service policy of the companies. • Field Marshal Policy Field Marshal has warranty policy of 1Year, which covers:1. Body 2.Block 3.Head 4.Crank & 5. Wheel However, it does not give warranty on 1. Nozzle 2. Plenzer & 3.Silencer The company gives Rs.25/- per set for service to the dealers. The company also arranges free service camp annually or biannually • Kirloskar Policy Kirloskar gives 1Year warranty and has service engineerevery 14000 sets. (Rajasthan has only one service engineer). • 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. • Ashok Leyland & Cummins Policy
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 Kirloskar dealers told that replacement is problematic and sometimes it takes even a whole year. Some minor brands like Swaraj, offers guarantee (Which in engine market means replacement of whole set in case of any fault) of 1year.
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 Cooperative 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.
ANALYSIS OF RESPONSE TO STATEMENTS ON LIKERT SCALE
People buy water cooled models because they are ignorant about merits of air cooled models. No. of Respondents = 50 Table No. 22 Strongly agree (5) Moderately agree (4) Neither agree nor disagree (3) Moderately disagree (2) Strongly disagree (1) 13 7 6 6 18
Strongly disagree (1) 36%
Strongly agree (5) 26%
Moderately disagree (2) 12%
Neither agree nor disagree (3) 12%
Moderately agree (4) 14%
Fig. 25 Mean likert rating =2.78
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.
People ask for most advertised/publicized /visible models.
No. of Respondents
50 Table No. 23
Strongly agree (5) Moderately agree (4) Neither agree nor disagree (3) Moderately disagree (2) Strongly disagree (1)
28 10 4 1 7
Moderately disagree (2) 2% Neither agree nor disagree (3) 8%
Strongly disagree (1) 14% Strongly agree (5) 56% Moderately agree (4) 20%
Fig. 26 Mean likert rating =4.02
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.
People buy because of price rather than anything else.
No. of Respondents
50 Table No. 24
Strongly agree (5) Moderately agree (4) Neither agree nor disagree (3) Moderately disagree (2) Strongly disagree (1) Fig. 27 Mean likert rating Inference: = 2.3
3 13 5 4 25
Moderately agree (4) Likert rating of 2.3 and only 32% people statement shows, 26% majority of people don’t buy because of price. However, there is a niche of Neither people in every region who buy purely for price. There are around 6-7% Strongly agree nor customers in a region buying purely for price while 25-26% people keep price disagree (1) disagree (3) high on the priority of factors influencing their buying decision. 50% 10% Moderately Customers come with predetermined model and brand to buy. disagree (2) 8%
No. of Respondents = 50 Table No. 25 Strongly agree (5) Moderately agree (4) Neither agree nor disagree (3) Moderately disagree (2) Moderately 26 11 5 3 5
Strongly agree (5) 6% agreeing to the
Neither agree nor Meandisagree (3) = likert rating 10%
disagree (2) 6%Fig. 28
Strongly disagree (1) 10%
Moderately agree (4) 68 22%
Strongly agree (5) 52%
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 Strongly agree (5) Moderately agree (4) Neither agree nor disagree (3) Moderately disagree (2) Strongly disagree (1) 14 26 4 2 4
Moderately disagree (2) 4% Neither agree nor disagree (3) 8%
Strongly disagree (1) 8%
Strongly agree (5) 28%
Moderately agree (4) 52%
Fig. 29 Mean likert rating = 3.88
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.
S.6. you get sufficient margin in sale. No. of Respondents = 50 Table No. 27 Strongly agree (5) Moderately agree (4) Neither agree nor disagree (3) Moderately disagree (2) Strongly disagree (1) Fig. 30 Mean likert rating = 9 8 5 10 18
Strongly 2.6 disagree (1) 36%
Strongly agree (5) 18% Moderately agree (4) 16%
Neither Moderately Likert rating of 2.6 with 56% of people clearly not agreeing to the nor agree statement, disagree (2) disagree (3) shows widespread resentment amongst dealers, regarding the margin they get in 20% 10% sales. It was also revealed during the survey that Kirloskar dealers get 4-5%
Inference 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.
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 Strongly agree (5) Moderately agree (4) Neither agree nor disagree (3) Moderately disagree (2) Strongly disagree (1) 7 14 1 3 25
Strongly disagree (1) 50%
Strongly agree (5) 14% Moderately agree (4) 28% Neither agree nor disagree (3) 2%
Moderately disagree (2) 6%
Mean likert rating = 2.48
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.
You are brand loyal and will stick to the brand you are dealing in. No. of Respondents = 50 Table No. 29 Strongly agree (5) Moderately agree (4) Neither agree nor disagree (3) Moderately disagree (2) Strongly disagree (1) 22 7 9 3 9
Moderately disagree (2) 6%
Strongly disagree (1) 18%
Strongly agree (5) 44%
Neither agree nor disagree (3) 18%
Moderately agree (4) 14%
Mean likert rating 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.
you will change the brand, for higher margin, with similar sales potential. No. of Respondents = 50 Table No. 30 Strongly agree (5) Moderately agree (4) Neither agree nor disagree (3) Moderately disagree (2) Strongly disagree (1) 17 15 4 3 11
Moderately disagree (2) 6%
Strongly disagree (1) 22%
Strongly agree (5) 34%
Neither agree nor disagree (3) 8%
Moderately agree (4) 30%
Mean likert rating
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.
Table No. 31 S. NO. 1 People buy water- cooled Models because they are ignorant about merits of air cooled models. 2. People ask for most advertised/publicized /visible models. 3. 4. 5. 6. 7. People buy because of price rather than anything else. Customers come with predetermined model and brand to buy. Customers come with predetermined model and brand to buy. You get sufficient margin in sale. You get adequate incentives and non monetary benefits, to promote the brand you 8. 9. are dealing in. You are brand loyal and will stick to the brand you are dealing in. You will change the brand, for higher margin, with similar sales potential. 3.5 3.68 Agree Agree 2.3 4 3.88 2.6 2.48 Disagree Agree Agree Disagree Disagree 4.02 Agree STATEMENTS LIKERT RATING 2.78 Disagree INFERENCE
GAUGING THE SALES POTENTIAL OF 15-40HP ENGINES IN RAJASTHAN
Calculated total sales of 38 dealers = 1088 sets Since 99 dealers are listed and assuming 10% dealers remained Unscanned. Estimated No. of dealers = 99X(1+10%)=109 Therefore, total estimated sales = 109X1088 = 3120 sets 38 Likewise, projecting the sales figure all over the surveyed area we get the market estimate of each region.
Table No. 32 NAME OF REGION Jaipur Sikar Dausa Kota Barmer Sanchore Dhorimanna Pali Jodhpur Bundi Baran Alwar Rank in order of market sales of regions. ESTIMATED SALES (15-40HP) 487 200 115 372 86 172 344 86 258 286 258 143
Bundi 10% Jodhpur 9% Pali 3%
Sikar 7% Dausa 4%
Kota Barmer 14% 3%
Fig. 33 Jaipur > Kota> Dhorimanna> Bundi> Jodhpur, Baran> Sikar> Sanchore> Alwar> Dausa> Barmer, Pali
The most important think is to forecast where customers are moving, and to be in front of them –
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
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. Expected life of the set Time period after which servicing is required Fuel efficiency. Nowadays people considers buying an engine as a long time investment. Hence people don’t’ care, if they spend extra for better quality. Quality comes above price in customers’ mind.
WHY DEALERS ARE SO IMPORTANT
Many businesses are wisely turning their suppliers and distributors into valued partners– Kotler
Types of Customers
Extra Service & Spares
Advertisement / Visibility
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.
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.
EXPLOITING CUSTOMERS’ BEHAVIOUR TO BOOST SALES POTENTIAL
Since the order of preference in buying a diesel engine set in known which reads as Dealer> Services & Spares> Quality> Price. 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.
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. Nevertheless, there is a section of quality conscious consumer who skips the previous two stages and go for a better quality. These are the customers from industries and corporates. They are the people who prefer aircooled over water cooled, less bothered about complexity of engineering and services and spares. 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.
MARKET SEGMENT IN 15-40HP, ENGINE SALES
15-40 HP engine market may be segmented on following basis1. Based on electric supply in the region:(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. 2. Based on credit sale:(1) (2) (3) High credit sale:- People here prefer credit, which has given rise to a distinet marketing environment. Kota, Baran & Bundi are such regions. Moderate credit sale:- Jaipur, Sikar and Dausa. Low credit sale Jodhpur, Alwar, Dhorimaama, Pali Sanchore 3. Based on ease of maintenance & convenience of use:(i) Seeking convenient and easy to handle sets:Urban people who prefer aircooled over water cooled, light weight over heavy weight, portable against non portable sets and low-noise against high noise making sets.
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 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:1. 2. 3. 4. Frustrated Dealers become of high level of territorial infringement and unrealistic target. Poor conformance quality Short expected life of set. Delayed availability of services
Eicher may attack on Kirloskar based on following points. 1. 2. Treat dealers as business partners by giving them adequate incentive, realistic target and other fringe benefits like travelling opportunities, gifts etc. 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 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 media or wall paintings or public gatherings. comparative advertisement in a time frame should be
CALCULATION OF MARKET ESTIMATES
Gauging the sales potential of 15-40 HP engines in Rajasthan. Calculated total sales of 38 dealers = 1088 sets Since 99 dealers are listed and assuming 10% dealers remained unscanned.
10 99 1 + = 109 100 Total estimated sale = 3120 sets Market estimate of 17 Jaipur = × 3120 = 486.6 109 Sikar = 7 × 3120 = 200.367 109 4 × 3120 = 114.5 109
13 × 3120 = 372.11 109 3 × 3120 = 85.87 109 6 × 3120 = 171.74 109 12 × 3120 = 343.5 109
3 × 3120 = 85.87 109 9 × 3120 = 257.61 109
10 × 3120 = 286.239 109 9 × 3120 = 257.615 109 5 × 3120 = 143.12 109
LIST OF DEALERS
JAIPUR Name of Dealership Auto Diesel Spare & Services Esen Engineers Address M.I. Road 13, Motilal Atal Road Pratap Diesels Pvt. Ltd. 453, Sanjay Nagar, ‘D’ Kalwar Road, Jhotwara 141 ‘B’ Ganpati Plaza, M.I. Road Arjun Metals Pvt. Ltd. 102, City Centre, S.C.Road Phone & Fax 2378137 (o) 368661 (o) 378911, 408833 378911 (Fax) 2344351, 2346361 0141-23441551 P.S. Sekhawar & D.S. Sekhawar Contact Person Vijay Kumar Uppal Ravi Malhotra
Ajmer Sikar Bypass, (Fax) Jackson Traders 2365120, 2365159 0141-5108538 (Fax) 2369213, 2375499 0141-2375498 (Fax) Manju Sharma & Mahendra Sharma Arjun Choudhary
Radhika Complex, Loha Mandi, S.C. Road 403, shalimar Complex, Church Road 7, Transport Nagar, Agra Road Shiv Bhawan, Station Road Vanasthali Marg
2365811, 9829053265 (Mobile) 2371045, 5104045 0141-2371045 (Fax) 2340661 432759 2365691 2366990 (Fax) 2361936
Ramniwas Choudhary P.K. Kochhar
Sudhir Gensets Ltd.
Eicher Agencies Laxmi agencies Vikash Agro Engineers
Mahendra Choudhary Dinesh Bhati Santosh Kumar Sharma
Capital Engineers Industrial Sales & Manufacture Co. Atlantic Agencies
165-166, Ganpati Plaza Katewa Bhawan, M.I. Road M.I. Road, Purohit Ji Ka Bagh
5102333 2388658 (Fax) 2375371, 5108059 0141-2366329 (Fax) 2367465 0141-2366879 (Fax) 0141-375165 9829058011 (Mobile)
Rajendra Sharma Shashank Bhargava
Bhaskar Power Projects (Pvt.) Ltd.
Anukampa Tower, Church Road
SIKAR Name of Dealership Laxmi Agro Agencies Arjun Metals New Choudhary Enterprises DAUSA Name of Dealership Rajesh Agencies Rajech Automobile Khandelwal Engine Co. Vijaya Vargia Sales Corp. Address Lalsot Road Lalsot Road Lalsot road Man Ganj Phone & Fax 231754 230854 230290 230139 (O) 230406 ® Contact Person Ramesh Kumar Gupta Brijmohan Gupta D.P. Gupta Nawal vijay Address Kalyani Circle, Silver Jublee Road Kalyani Circle Kalyani circle, Silver Jublee Road Phone & Fax 01572-251207 (o) 255037 (R) 255548 51475 (O) 43100 (G) 58991 ® Contact Person Mahavir Prasad Sharma Mukanda Ram Bhanwar Choudhary
PALI Name of Dealership Om Machinery Address Mandia Road Phone & Fax 230006 Contact Person Om Prakash Solanki & Yogesh Solanki
KOTA Name of Dealership Gobind Agencies Address Opp. Allahabad Bank, Shopping Nimish Enterprises Jainsons Enterprises Centre Near Payal Hotel, Nayapura Nayapura, Near Thana Phone & Fax 2450181 2450181 (Fax) 2333808 (S) 2430468 (R) 2340941 2451041 (O) 2380598 ® 94141-89091 Sanjay Machinery Hindustan Machinery Mart BARAN Name of Dealership Manoj Traders Soni Enterprises Bansal Machinery Store Ganesh Machinery Store Garg Traders BUNDI Name of Dealership Rashmi Traders Address Lankagate Road Phone & Fax 2442125 Contact Person Bhagwan Totla Hospital road Address Deendayal Park, Sahabad Road Mangrol Road Deendayal Park Deendayal Park Phone & Fax 230957 234488 (O) 230232 ® 230302 230267 230293 (O) 231049 ® 232001 ® 231000 230372 Anand Garg & Bharat Garg Agro Nayapura, Near (Mobile) 2322823 2323824 2322756 Jitendra Kumar Dhal Contact Person Manoj Garg Jagdish Soni Hemant Bansal & Pramod Bansal Ganesh Lal Bhanwar Singh Rajendr Tyagi S.K. Jain & Hemant Jain Contact Person Gulab chand
Agencies & Delhi Petrol Pump Nayapura
Sharma Agency Sharma & Co. Jhanwar Traders Mahajan Mill Store
Lankagate Road Lankagate Road Lankagate Tehsil Road Lankagate road
Sohanlal Sharma R.C. sharma Parmeshwar Jhanwar Murli Manohar Lakhotia & Shelandra Lakhotia
JODHPUR Name of Dealership Generators International Azad Engine Spares Centre Address 170, Clock Tower Inside Sojati Gate Phone & Fax 540085 (O) 511291 ® 2615327 (O) 2622091 (O) 2430291 ® Bhagwanti Machinery Store Inside Sojati Gate 2626542 ® 2639217 (O) 2611807 (O) 2513559 ® Mahesh Engineering Jalori Gate Centre Shree Kishan Bros. Opp. Kankariya Bldg. Jalori Gate, Choupasani Road BARMER Name of Dealership Barmer Enterprises Barmer Machinery Parts DHORIMANNA
Contact Person Lokesh Bhandari & Kamal Bhandari Purushottam Lalwani
2513559 ® 2435755 2643755 640244, 245 640244 (Fax)
Kamal Bhawnani L.N. Bhati
Address Subhash Chowk Chohtan Road
Phone & Fax 222826, 221744 20050 (P.P) 224922 (R)
Contact Person Inder Paliwal Misrimal Jain & Pawan Jain
Name of Dealership B.R Chaudhary Machinery Store Gopal Diesel Engines Gehlot Machinery Ashapuri Traders
Address N.H-15 Sanchore Road Sanchore Road Sanchore Road Sanchore Road
Phone & Fax 02986-221318 221293,221603,221 046 02986-221734 221532
Contact Person Bhiyaram Chaudhary Ramshwar Lal Swami Ruparamji Gehlot Khuman Singh
SANCHORE Name of Dealership Barmer Machinery Store G.M. Agencies Gehlot Machinery Store Address Raniwara Road, Sanchore Raniwara Road Raniwara Road Phone & Fax 222090 222039, 222102 222106 (O), 223048 (R) Contact Person N.M. Jain & Narendra Gupta M.L Parmar Ruparam Gehlot & Mafatlal Parmar
ALWAR Name of Dealership Laxmi Narain Narandra Kumar Agriculture Associates Khandelwal Krishi 1,Tej Mandi Station Road 2,Tej Mandi Station
Address Station Road
Phone & Fax 2336186 0144-2337399 (Fax) 2337340, 5100882, 2700882 2344581(O),
Contact Person K.K. Gupta
Subhash Joshi & Rajnish Joshi Deepak Khandelwal
& Neeraj Khandelwal
Marketing Management - Philip Kotler Marketing Research - G.C. Beri Statistics - S.C. Gupta
“GAUGING THE SALES POTENTIAL OF DIESEL ENGINE SETS IN RAJASTHAN WITH SPECIFIC REFERENCE TO 15-40HP ENGINES” PROJECT REPORT 2003
Submitted in partial fulfillment of the requirement of
POST GRADUATE DIPLOMA IN MANAGEMENT (2002-2004)
UNDER THE GUIDANCE OF:
INTERNAL GUIDE : Mr. SRIKANT KAPOOR EXTERNAL GUIDE: Mr. RAMESH KINI
INSTITUTE OF MANAGEMENT EDUCATION SAHIBABAD
S.No. 1. 2. 3. 4. 5. 6. 7. 8. 9. Certificate Acknowledgement Synopsis Introduction Company Profile Research Methodology Sample Questionnaire Phases in Growth of No. of Dealers Market Share & Relative Competition in three segments of Engine sale 10. 11. 12. 13. 14. 15. 16. 17. 18. Air Cooled Vs. Water Cooled Availability of Dealers in different price situations Top Dealers of Rajasthan Competition of Brands & Brand Equity Perceptions, Selling propositions & Brand USPs Selling Strategies Territorial Infringement Future Perceptions Warranty & Service Contracts 26-29 30 31-35 36-42 43-52 53-55 56-57 58-59 60 61-62 Particulars Page No. 1 2 3 4 5-15 16 17-21 22-25
19. 20. 21.
Financing of Engines Analysis of Statements on Likert Scale Gauging the Sales potential of 15-40HP engines in Rajasthan
81-82 83-84 85-86
22. 23. 24.
Customer Behaviour Why Dealers are so important Exploiting Customer’s behaviour to Boost sales potential
87-88 89 90-91 92-101 93-94 95-101 102
25. 26. 27.
Market Segment in 15-40HP Engines sales Eicher Perspectives Annexure Calculation of Market Estimate List of Dealers visited
INDEX OF TABLES
Table No. 1. 2. 3. 4. 5. Description Page No. 22 26 27 28
Years old – Number of Dealers Range – Number of Dealers Range, Volume, % Share Range, Market Share Number of Dealers, Number of Customers, Range of Engines
28 29 30 31 34 44 45 46 47 48 49 50 51 52 55
6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19.
Competition in three segments Air Cooled, Water Cooled Price – Number of Dealers Price – Available Number of Dealers Competitors of Kirloskar Competitors of Field Marshal Competitors of Topland Competitors of Eicher Competitors of Usha Competitors of Ashok Leyland Competitors of Cummins Competitors of Remaining Brands Brand Power of Different Brands Brand USPs
20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32.
Selling Strategies Future Perceptions Response of Statement 1 Response of Statement 2 Response of Statement 3 Response of Statement 4 Response of Statement 5 Response of Statement 6 Response of Statement 7 Response of Statement 8 Response of Statement 9 Inference of Likert Rating Estimated Sales (15-40 HP)
56 60 65 67 69 70 71 73 75 77 78 80 82
INDEX OF FIGURES
Figure No. 1. 2. Description Dealers – Years old they are Smoothened version of dealers – years old they are 3. Cumulative Number of Dealers against years old they are 4. 5. 6. 7. 8. 9. Smoothened version of previous curve Range of Engines – Number of Dealers Range of Engines – Sales % Air Cooled, Water Cooled Price – Availability of Dealers Smoothened version of Price – Availability of Dealers 10. 11. 12. 13. 14. 15. 16. 17. Price – Available Number of Dealers Smoothened version of previous curve Top Dealers of Jaipur Competition given to Kirloskar Competition given to Field Marshal Competition given to Topland Competition given to Eicher Competition given to Usha
Page No. 23
24 24 26 27 30 33
33 35 35 37 44 45 46 47 48
18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31.
Competition given to Ashok Leyland Competition given to Cummins Competition given to Other Brands Brand Power of different brands Selling Strategies Extent of Infringement Future Perceptions Response of Statement-1 Response of Statement-2 Response of Statement-3 Response of Statement-4 Response of Statement-5 Response of Statement-6 Response of Statement-7 Response of Statement-8
49 50 51 52 56 58 60 65 67 69 70 71 73 75 77 78
Response of Statement-9 Market Share of different Regions in 15-40HP Engine Sales
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