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Marketing Strategy of the Company
By Satish Singh
This project has been taken with a view to make an in depth analysis of latest & unique marketing strategies employed by Blue Star Ltd. with special reference to Air conditioners & thus uncover the reasons that have propelled the company to retain its position as leading company in AC Industry despite of stiff competition from other competitors. The present study creates awareness about the product quality & unique features put forth by Blue Star Ltd. It also provides knowledge to the readers about customer preferences & competitive analysis between various competitive firms. The present is an effort to formulate strategy to boost up the market share for AC’s for Blue Star Ltd.
Few years ago liberalization was not there in the Indian market. But slowly and gradually scene changes and liberalization paves its way in the Indian market. Advent of liberalization policy has changed the whole scenario.
Leads to entry of MNC’s
Leads to technological Advancement
Leads to Fierce Competition
Which inturn Makes the Customer a King
Therefore, today's winning companies are those who succeed best in satisfying target customers. In other words winning companies are those who provide value for money. They are market focused and customer driven, rather than solely product focused or customer driven. The most wrenching change that the business scenario is experiencing involves acquiring a strategy to cope with liberalization.
Rising temperature and unexpected climate has lead to the invention of Airconditioner system. Thus this leads to birth of new industry known as AC Industry. I have decided to conduct a Market research on Blue Star Ltd with special emphasis on Air Conditioners. And I have selected exploratory design to conduct the market research because it is the most sound research design that is likely to achieve my research objectives. My goal is to explore rather than conclude on the level of awareness that people have about Blue Star Air Conditioners. I was interested in knowing the expectations and apprehensions people have from the company. The Exploratory studies are used to seek small-scale information rather than definite results. I also analyzed that this research design is relatively inexpensive as compared to other research designs.
The main focus of this report is to study the customer satisfaction level with the product performance in Delhi.
OBJECTIVES OF THE STUDY
The main purpose of this study is to determine different strategies that are adopted by the company to achieve its targets. Moreover the strategies will be evaluated to see which is best amongst them.
The secondary objective of the research is to find the image of the company among the customers.
In brief Objectives include• • Analyzing the Market strength of Blue Star Ltd. Identifying potential market for launching new product and increasing sales of existing ones • • Explicit feed back on product performance Determine relative quality perception of Blue Star brand.
At times I also asked questions as to why the respondent has chosen AC of a particular company or what made him feel about that choice. All this information has been collected from the site “www. Primary Data I have used personal interviewing where primary data can be directly collected from respondents. etc. consumer perception about Blue Star and their satisfaction level. the consumer personal survey was undertaken which was based on non-disguised structure questionnaire. This ensured collection of unbiased and accurate data. Advertising & Marketing. 6 .yahoo.com”. their marketing strategies & information about the competitors.com”. and have collected following information about various range the company has. “www. the technology being used by company. search engine of Google. To know the brand awareness. The desired information was secured using Questionnaire.RESEARCH METHODOLOGY Secondary Data I have used the secondary data relating to Blue Star Ltd.bluestarindia. magazines such as Business India. I was keen to ensure that the respondent was taking interest while filling the questionnaire. Annual report of Blue Star Ltd.
Some customers were not able to respond due to lack of awareness. contacted person was not able to present a fair view. 3) Respondent’s lack of time to give information and their casual attitude was a big hindrance in the study. 2) Some of the shop owners were not available so. 7 .LIMITATIONS Some of the dealers as well as the customers were not forthcoming with information as they thought it to be a waste of time. 4) The dealers were biased by some recent experiences which they had with a particular distributor regarding the service or distribution. 1) A number of dealers were biased towards a particular brand which was giving them better returns.
A Condenser Coil 3. A compressor pumps the vapour to condenser. which heats. In other words. Three important working cycles of an AC are: 1. Room side close cycle Outdoor open cycle The Refrigerant cycle 8 . which discharges the heat and turns the vapors back to liquid. A Fan Motor Working of an Air-conditioner A Window air conditioner cools room air by means of refrigerant. Components of an Air Conditioner The Air-conditioner consists of the following components 1. A Compressor and 4. cleans and circulates air and its moisture content. Dehumidification within a confined space. 3. A Cooling Coil (evaporator coil) 2.DEFINITION OF AN AC Air conditioning is simultaneous control of air for: • • • Temperature control Air freshness Filtration. cools. AC is defined as a process. 2. The refrigerant absorbs heat from air and becomes vapour as it flows through the evaporator.
It is the most versatile and cheapest air-conditioning system where window AC’s cannot be provided. from cooling sides to lower temperature of condensing side. Split A. 9 . which is absorbed. It has the advantage of cooling any place irrespective of its location and just need a passage three inch in diameter so as to connect both sides of split AC. It has the advantage of using single motor for both compressor and cooling side.The room side close cycle AC sucks the hot air from the room.C. The air is cooled. dehumidified and redelivered back to the room. It also takes motor for both compressor and cooling side. versatile and cheapest airconditioning system. In split AC area covered is higher than the window AC. Type of Air-Conditioners: Window AC Window AC is the most compact. Outdoor open cycle The fan on the condenser side sucks the air from outside atmosphere and delivers it back to the atmosphere after taking the heat from the condenser coil. The refrigerant cycle The closed cycle in which compressor compresses the refrigerant gas and delivers it to the condenser coil and then to the evaporator coil and back. It also takes into advantage of the usage of humidity. during the process the room gradually becomes cold.
0 tonne-15 tonnes).Package A. It is used for cooling the area where the tonnage required is more than 50 tons. Central A. It consumes less power. Though the capital cost is higher but the running cost is very economical. In central air conditioning a final air-conditioning is done through cold/hot water running through tubes.C. 3.C. 10 . It is used for larger areas where the tonnage is higher (approx.
Advani in 1943. With six decades of experience in providing expert cooling solutions. Today. The Company was initially engaged in reconditioning of refrigerators and air-conditioners. Blue Star is India's largest central air-conditioning company with an annual turnover of Rs. Blue Star is India's largest and most preferred air-conditioning and commercial refrigeration company. Blue Star became a public limited company in 1969 with its corporate headquarters at Kasturi Buildings in Mumbai. Blue Star has been associated with the most prestigious corporate and commercial installations in the country.COMPANY PROFILE Blue Star Limited (originally known as Blue Star Engineering (Bombay) Pvt Ltd) was founded by Mohan T. 600 crores. a network of offices in 29 cities and three modern manufacturing facilities. 11 .
laboratories. rotary screw chillers. hotels. That's Blue Star air-conditioning. centrifugal. reciprocating scroll. split and window air conditioners. The lines of business include Central Air-conditioning. Blue Star Infotech Limited (BSIL) in April 2000. ice-cube machines. Sweden and many others.S. The International Software Services business was spun-off into a separate company. The Company has business alliances with world-renowned technology leaders such as York International. airports. air handling units. It offers the widest range of air-conditioning products . 12 . Client Server applications and Embedded Systems to clients in USA. yet quietly at work in homes. Medical and Analytical Instruments and Special Control Valves. Room Air conditioners. Data Communication products. LARGEST SINGLE SOURCE OF AIRCONDITIONING EQUIPMENT Blue Star is the largest single source for air-conditioning equipment in India. This software export business was started in 1983 and is headquartered in Mumbai.BLUESTAR BUSINESS Blue Star manufactures and markets a wide range of air-conditioning and refrigeration systems and products. air-cooled / water-cooled packaged air conditioners. never heard. Vestfrost. so as to offer superior products to the customers. showrooms. Japan. offices. at the Santa Cruz Electronics Export Promotion Zone (SEEPZ) with offices in the U. USA. BSIL provides Internet/E-commerce.K. Commercial Equipment and Professional Electronics and Industrial Products. hospitals all over India and abroad. satellite launch stations. packaged air-conditioning systems.window and split air conditioners. etc. Commercial Refrigeration. variable air volume systems. deep freezers and walk-in cold rooms. Europe and Japan. absorption. Kolpak. and U. Denmark. Never seen. bottled water dispensers. fan coil units. BaaN ERP services. Electrolux. USA. factories. Hitachi. commercial refrigeration equipment such as water coolers. These include large central air-conditioning plants. HP 3000/ MPE. Blue Star's other businesses include marketing and maintenance of hi-tech electronic and industrial products such as Testing Machines.
Blue Star has set up a joint venture in Malaysia with Arab Malaysian Development Berhad (AMDB). for variable air volume systems. reciprocating chillers. Negeri 13 . The Company actively promotes wider use of large refrigeration systems using ammonia as the refrigerant. Sarawak. And collaboration with York Tempmaster. screw chillers. from Indonesia in the East to Libya in the West. CROSSING INDIA'S BOUNDARIES Blue Star's air-conditioning expertise extends beyond Indian horizons. Arab-Malaysian SGB factory. The joint venture company has executed large turnkey Central Airconditioning Contracts . Blue Star is one of the few companies selected in India for funding by "The Multilateral Fund for the implementation of the “MONTREAL PROTOCOL”. 269-room Ritz Carlton Hotel. the safe refrigerant replacing CFC-11. ECO FRIENDLY Blue Star has made significant progress towards minimizing and even eliminating the environmental hazards resulting from CFCs in certain refrigerants used for cooling. Blue Star is a member of the International Institute of Ammonia Refrigeration. USA and Climatrol. USA. Blue Star has competed with other European companies on International terrain and satisfied demanding foreign consultants. 35-storey Menara Dion. As a matter of fact. 364-room Vistana Hotel. which is more friendly to the environment than the older R-12. air handling units. In fact. Kuala Lumpur. Rheem Manufacturing Co.. USA. Blue Star also markets absorption chillers. 18-storey Tower A and Tower B AMCORP Trade Centre. Kuala Lumpur. Blue Star has already introduced 'ozone friendly' centrifugal chillers using HCFC-123. Kuala Lumpur. Petaling Jaya Selangor Darul Ehsan. Kuala Lumpur. 48-storey Plaza MBF.International Partnerships In its quest to offer the most advanced air-conditioning technologies. Kuching.21-storey Bangunan AMDB. Kuala Lumpur. 22-storey Menara Pelita. which use water as refrigerant. Blue Star has entered into several technical collaborations with York International. Italy for the manufacture of air-conditioning equipment . Nilai. All Blue Star reciprocating chillers already use HCFC-22 refrigerant.centrifugal chillers.
Raymonds. 14 . A majority of software companies. Humphreys & Glasgow and Davy Powergas. Geological Survey.Sembilan. Blue Star has made engineering excellence a way of life and has been acclaimed by renowned consultants like Chemtex. the Kewalram Indonesia P. cost-effective on-time airconditioning systems have made Blue Star a preferred company. Nageri Semibilan Darul Khusus. Railway and Radio and TV Establishments at Baghdad. Kuala Lumpur. Three fourths of all man-made fiber plants in India are air-conditioned by Blue Star: Reliance. the State Bank of Mauritius. its capability in engineering design and project management. Johor Darul Takzim. Tata Consultants. Selangor Darul Ehsan and Summit Centre Shopping Complex.THE BLUE STAR STRENGTH When critical parameters are of paramount importance. Orkay. Blue Star's expertise in industrial and comfort air-conditioning is clearly ahead. Shriram. The Company's dedication to quality and detail. 420-room Hotel. cinema halls and hospitals all over India have been air-conditioned by us. Johor Baru. Du Pont. Bandung. Henrick Hotel. INDUSTRIAL AND COMFORT COOLING . Petaling Jaya. And the list of projects completed abroad is too long to be enumerated. DCL. Seremban. Engineers India. AMCORP Trade Centre. Mecon. Russia. Sanghi. and resources to provide efficient.T. hotels. Several of these have called in Blue Star for repeat jobs. the University. Selangor Darul Ehsan. Ceat. U.S. UDHE. airports. Some of the most notable are: Syria's Presidential Palaces Complex at Damascus. 275-room Castle Inn Hotel cum Office. Saudi Arabia and Hotel Krom. 340room Hilton Hotel. when innovative solutions are sought. when sophisticated technology is required.
15 . For this it has been constantly working for the customers & modifying its strategies in their favor.CORPORATE VISION The company has been working on its strong & broad vision based guidelines. which aim at delivering world-class customer experience.
showrooms. Whereas non-ducted products (split air conditioners and window air conditioners) are mainly used for air-conditioning smaller spaces like individual rooms in an office or residence. By keeping the relatively noisy components. split air conditioners are split into two basic components the indoor unit (IDU) and the outdoor unit (ODU). barely 10 cms in diameter. As the name implies. the airconditioned space tends to be quiet. Air conditioners are divided into Ducted Systems and Non-Ducted products (unitary products).Types of Air-conditioning The diagram below gives a broad idea of the different kinds of air-conditioning systems available in the market for various applications. Split air conditioners are relatively more expensive than window air conditioners but are preferred for spaces where there is no window or which require a quiet environment. These two units are connected by refrigeration tubing and electrical wires that pass through an opening in the wall. 16 . restaurants. Ducted systems are normally chosen for air-conditioning large spaces like office floors. departmental stores. such as the compressor and condenser fan in the outdoor unit. etc.
refrigerant gas is sucked into the cylinder. scroll or rotary types.These compressors typically have one or two pistons mounted on the crank shaft extension of the motor. which slide to form a continuous seal for the refrigerant gas. They are highly reliable and save up to 15% on power bills. They are gaining fast acceptance over other compressors. At the beginning of the cycle a volume of refrigerant gas enters the chamber and as the cycle progress the nature of eccentricity squeezes the gas thereby compressing it. 17 . Rotary compressors . When the piston moves up the gas is pushed against the discharge valve which opens to let the compressed gas out. Scroll compressors . and Packaged Air conditioners. These include reciprocating. c. These compressors are available from a small fraction of a ton upto 10 ton capacities.This type of compressor has a rotor eccentric to the cylinder housing and blades. Scroll compressors use two interlocked spiral-shaped members. Rotary compressors are considered unsuitable for areas with high ambient temperatures and are limited to use in window and mini split air conditioners. They have only three moving parts compared to fifteen in reciprocating compressors and are eight times less noisy. a. All these compressors are hermetically sealed which means that the compressor consists of a gas-tight steel shell within which is housed an electrical motor and a compressor unit. Split.These compressors are a recent innovation and are extremely energy efficient. which enclose the refrigerant gas in pockets between them. These compressors are not repairable and have to be replaced in case of a breakdown. One of the spiral shaped members is fixed while the other orbits causing the refrigerant to be squeezed into ever decreasing pockets until it reaches the centre of the spiral from where it is discharged. The motor moves the piston through the crank shaft and each time the piston moves down.Types of compressors As mentioned earlier the compressor is the heart of an air conditioner. Different types of compressors are used in Window. b. Reciprocating compressors .
7. Through its agreement with Rheem.5 TR. which are significantly more reliable because of only three moving parts within the compressor. 18 . The scroll compressors are also eight times quieter. Blue Star has access to world class manufacturing processes.3.5. 10 & 15 ton capacities can individually cool 75 to 250 meters of floor space. The sophisticated facilities installed include: a range of imported fabrication equipment. This product has already begun to revolutionize this market. which streamlines and integrates the entire process. In multiples they can handle entire floors and buildings. these versatile units in 5.5. and has captured a significant market share in the few months after launch. We have re-engineered the complete system to ensure a saving of up to 25% on energy cost to the customer. 11 and 16. an advanced powder coating paint line. 8. Packaged ACs Air-cooled or Water-cooled. compared to 15 moving parts in reciprocating compressors.Product Range Blue Star manufactures a range of Ducted Splits and Packaged ACs (both aircooled and water-cooled). These come with imported compressors. Optionally they offer packaged air conditioners fitted with scroll compressors. All of which ensure that our customers get the best air-conditioning technology. conveyor belt system and an on-line computerized manufacturing resources planning system. The range is 5.
banks. hotels. Advantages of Comfort Cooling The cooling unit is safely tucked away and all that is visible are the sleek lines of the ducting that blend so beautifully into your decor. restaurants and showrooms a new concept of comfort cooling. hospitals. the unit fits into false ceilings and gives an ambience with low noise levels.5 and 8.DUCTED SPLIT AC Ducted Split Air conditioners from India's No. 1 central air-conditioning company bring to offices. The range is 5. Also available with imported energy efficient scroll compressors for higher reliability. 19 . as all internal surfaces are acoustically insulated. slim and just 425 mm in height. software development centers. low noise and power saving. Sleek.3 TR.
it includes reliable components. Each and every air conditioner is loaded with a host of thoughtful and exciting features.Blue Star. CORDED HI . fuzzy logic control that adjusts performance automatically and an energy-efficient compressor amongst others. Manufactured at Blue Star's state-of-the-art factory. On offer is a wide range of capacities. It has an electronic thermostat that's accurate and reliable. A problem that we have cleverly taken care of in our air conditioners.SPLIT AC’S Blue Star.Wall Split The problem with normal air conditioners is that while they start off cooling you well. who are also the most preferred . nothing less is expected from the leaders in air-conditioning. The lowest being 1 ton. Deluxe Hi . India's leading central air-conditioning company. comes to you from the acknowledged experts in air-conditioning technology. It's just what you'd expect from the leaders in air-conditioning.WALL SPLIT AIRCONDITIONERS The Corded Hi-Wall Split Air conditioner. 20 . and the highest. presents a state-ofthe-art range of Split Air conditioners. pretty soon they begin freezing you. 4 tons. excellent after-sales service and friendly looks. After all.
who are also the most preferred .CONCEALED SPLIT AC You and your interior designer have taken enormous care to create great looking interiors. and the highest. 4 tons. it can only be felt and not seen. insist on the Concealed Split. Apart from impeccable cooling.Blue Star. nothing less is expected from the leaders in air-conditioning.Wall Split Air conditioners The Deluxe Hi-Wall Split Air conditioner comes to you from the acknowledged experts in air-conditioning technology. So. Enter the Blue Star Concealed Split. On offer is a wide range of capacities. It’s the sleekest indoor unit in the market and stands less than 11" tall (conveniently allowing higher head room under a false ceiling). Each and every air conditioner is loaded with a host of thoughtful and exciting features. A powerful machine that believes in efficiently working behind the scenes. a Concealed Split is a big bonus when wall and floor space is not available. if you're looking for the compliment to your dream office. 21 . The lowest being 1 ton. Deluxe Hi . Like everything with pedigree. You want to conceal the air conditioner so that a neat central airconditioning look is maintained. After all.
higher power consumption. but are also extremely quiet and installation friendly.25T. Their compactness and ability without necessary ducting makes them an ideal choice where ducting is not practical (due to structural constraints such as low cross beams). All in all the best AC deal you're likely to get. They not only look contemporary.CASSETTE AIRCONDITIONING SYSTEMS Blue Star. corrosion resistant blue fins and full function remote (optional). fit & finish. Both these models are fitted with Mitsubishi compressors for virtually silent operation and come with anti-bacterial filters. and consequently. WINDOW ACS . Which means that you don't have to compromise and settle for an AC of higher tonnage. brings you the Cassette Airconditioning Systems. in its continuing effort to provide innovative cooling solutions for your business. They blend beautifully with stylish interiors by virtue of their excellent looks. Like 1. 22 .TURBO ROTARY DELUXE MODEL Blue Star Turbo Rotary ACs come in innovative capacities.
higher power consumption. Which means that you don't have to compromise and settle for an AC of higher tonnage. Both these models are fitted with Mitsubishi compressors for virtually silent operation and come with anti-bacterial filters. your window ACs includes dependable components. 23 . As well as brand new exciting features. Like Parliament House. Like 1. You'll find this very expertise in cooling. Little surprise then when we were chosen to air-condition India's most prestigious establishments. Made at Blue Star's state-of-the-art factory. an electronic thermostat that's accurate and reliable. fuzzy logic control that adjusts performance automatically and a low energy-consuming compressor. All in all the best AC deal you're likely to get. For example. excellent after-sales service and stunning looks.25T. corrosion resistant blue fins and full function remote (optional). and consequently. Bombay Stock Exchange and the Reserve Bank of India.DELUXE MODEL Blue Star cooling standards are so high that even the experts recommend us. WINDOW ACS . in our new window air conditioners.TURBO ROTARY SUPER DELUXE REMOTE MODEL Blue Star Turbo Rotary ACs come in innovative capacities.WINDOW ACS . besides others.
Bombay Stock Exchange and the Reserve Bank of India. 24 .SUPER DELUXE REMOTE MODEL Blue Star cooling standards are so high that even the experts recommend us. You'll find this very expertise in cooling. an electronic thermostat that's accurate and reliable. For example. excellent after-sales service and stunning looks. Made at Blue Star's state-of-the-art factory. besides others. As well as brand new exciting features. in our new window air conditioners.WINDOW ACS . Little surprise then when we were chosen to aircondition India's most prestigious establishments. your window ACs includes dependable components. Like Parliament House. fuzzy logic control that adjusts performance automatically and a low energy consuming compressor.
It is about to begin with TV Advertisements Consumers come across advertisements for their brands everywhere . Yemen. Blue Star has ambitious plans to expand its commercial refrigeration business as well. With the changing face and speed of communication today. The company gives their advertisements through Road side hoardings. the company is focussed on using media specific to audiences. banners & signboards Newspapers like ‘Times of India’. Above all Advertising is a good business. MARKETING STRATEGIES Product Awareness Advertising is the main tool in the hands of the company so as to make the consumers aware regarding the different products available in the market.STRATEGIES FOR GROWTH Blue Star has identified mega air-conditioning projects within the country and abroad as an opportunity area for growth. etc. print. ‘Business Outlook’. with a specific focus on corporate and commercial customers. Hindustan Times’. room airconditioners and packaged airconditioners.television. Encouraged by the recent break-through orders from Sri Lanka. Internet and through sponsorships and goodwill campaigns. the Company wants to strengthen its exports operations as well. ‘Navbharat Times’ Magazines like ‘India Today’. the Company has aggressive plans to enhance its share in the growing market for window and split air conditioners. 25 . At the other end of the spectrum. posters. Advertising is the marketing force. which helps in mass selling and distribution. Maldives and Armenia for water coolers.
For Example. retailers. Credit Facilities & Discounts to dealers Dealers. Overall the company operates as many as half-a-dozen schemes at any given time. The service mission of BLUE STAR is to become the most customer-oriented company in the country. It was found that dealers mainly want that the company should give them credit facilities and discounts. And according to them the dealers are also the controller of the sales to some extent. retailers. Moreover the company ensures that dealer’s accounts are reconciled every quarter. BLUE STAR comes out with new schemes for dealers every month for special promotions. One of the important information is that most of the dealers ask the customers to wait and assure him the delivery if the particular brand is not available. by internalising the best practices of customer relationships management. The company provides quick & efficient after sales services. 26 .Strong Dealer Network The Company has got a strong dealer network all over India and the products are available in each town and area. sub-dealers are also vital to be due to be given due importance. It is also necessary to understand the dealers. Special margins are made available to dealers from time to time. and sub-dealers because they are one of the important people who can push the sales of the company. by building a proactive service organisation that continuously strives to create customer satisfaction. Customer Care It was found that the company more or less analyses what customers are looking for and then incorporate those features in their products. BLUE STAR is the overall winner in its category.
They are also installation friendly. Blue Star. The Cassette AC Systems are available in capacities of 2. These systems blend beautifully with stylish interiors. programmable timer. The new range comes in two versions . 3 and 4 tons and are attractively priced at Rs 86. has launched a new range of hi-wall split air conditioners across the country. which ensures that the system is energy efficient and maintenance free. The systems come with newly designed aesthetically superior low noise outdoor units. the compressor.700 onwards. auto restart and non-volatile memory. making it an ideal choice for coastal areas. starting from Rs 26. Cassette air-conditioning systems is the ideal choice where ducting is not practical. oscillating louvers. Available in capacities ranging from 1 ton to 4 tons. due to structural constraints such as low cross beams and low ceilings. these aesthetically appealing air conditioners come with a host of features like fuzzy logic. is capable of withstanding a 1000-hour salt spray test. The outdoor unit. They incorporate a scroll compressor. The Blue Star Cassette ACs distribute cool air in four directions without ducting and come with a host of powerful features apart from remote control for ease of operation. 27 . these systems are also extremely silent.720 onwards. These air conditioners are also attractively priced. which houses the all important heart of the air conditioner. Apart from its looks. has launched a new range of contemporary and aesthetically appealing Cassette Air-conditioning Systems. Blue Star.Wonderful Innovations in the Products Blue Star launches stylish split air conditioners Air-conditioning and Commercial Refrigeration major.one with an electronic controlled cordless remote and the other with an electronic controlled corded remote. Blue Star launches aesthetically appealing Cassette ACs Central air-conditioning and Commercial Refrigeration major. sleep mode.
These air conditioners.25 and 1. have nearly six decades of experience in providing expert cooling solutions not only in India but also overseas. incorporate a Mitsubishi Rotary compressor. 28 .75 Tons. This latest offering from the stable of the Air conditioning expert includes advanced user friendly features such as Sleep Mode. These unique capacities fill the gap in the room air conditioner segment where customers till now had the option of only 1. 1. The 1. stylish and contemporary turbo rotary room air conditioners. installation and after sales service has resulted in it being associated with the most prestigious projects and companies.5 or 2 Ton capacities.75 Ton is positioned for bigger halls. Its commitment to add value to customers in terms of design. anti bacterial filters and corrosion resistant condensers to ensure silent operation and substantial savings in electricity bills. Programmable Timer and Fuzzy Logic apart from Remote Control.25 Ton capacity is designed for cabins and bedrooms while the 1. Blue Star. which are available in unique capacities of 1. who are currently leaders in the Air-conditioning segment.Blue Star launches new Turbo Rotary Remote Air conditioners Blue Star has launched a new range of sleek.
• To be a good corporate who contributes positively to its community by protecting the environment and working for public welfare • To respect the laws. rules and customers of the land and to ensure that the conduct of all company activities will always be to the highest ethical standards • To identify and determine suitable marketing strategic for boosting up the market share of AC. in terms of its existing market size and future market potential. • To continually enhance Company’s worth to its shareholders and investors through sound investment and profitable operation. 29 .OBJECTIVES OF THE COMPANY • To ensure customer’s confidence through product quality & efficient & effective service. • To demonstrate a real concern for its employees and to constantly improve the quality and value of their job and career advancement. particularly for Blue Star Ltd • To make a detailed study of the Ac’s.
First to manufacture semi hermetic reciprocating compressors in India to international standards First air-conditioning company to introduce the concept of a Comfort Shop.SWOT ANALYSIS OF THE BLUE STAR COMPANY Strengths: Only Blue Star manufactures open-type centrifugal chillers with ozone friendly refrigerant HCFC 123 Only Blue Star manufactures variable air volume systems for economic localized cooling control Only Blue Star manufactures air handling units with dependable ratings to factory precision and the widest choice with single skin. horizontal. 30 . Willis Carrier Engineering Center. ceiling suspended and unitary.RBI Note Mudran Private Limited: Rs. double skin.000 Tons and 36 customers Largest Industrial air-conditioning contracts in India . It has a strong setup. It has successfully introduced finance schemes that have taken air-conditioners out of the luxury category and made it affordable for the homebuyer. to provide technological support to develop new products and upgrade existing ones. Air-conditioning of the largest number of synthetic fiber plants in India exceeding 25. vertical.40 crores.
Opportunity to influence Growing Indian middle class in influencing their decisions with regard to the products offered by Blue Star through comparatively lower prices. The increasing presence of multinationals in India for manufacturing be it Samsung. Hitachi. 31 . Carrier. Opportunities Confederation of Indian Industry (CII) has urged the government to reduce special excise duty (SED) on air-conditioners from 16% to 8% in the forthcoming budget. Advent of Internet provides an excellent opportunity to reach to a large base of customers and cut costs. LG. Low qualities resulting in exports prices being non competitive. Market penetration is still very low. thus providing an opportunity for upgrading the quality of manufacture in the country. Although BLUE STAR protects its Position in Domestic AC market but is regularly losing market share.Weaknesses Considered as premium brand so middle class people think it is unaffordable.
Carrier. especially from China MNC’s like Samsung. 32 . LG and Voltas are continuously raising their share while Blue Star despite of increasing sales is losing its market share. an extensive distribution network and better insights about the local market conditions.Threats: Likely to face fierce competition from domestic companies as they have wellacknowledged brands. Increased threat from cheaper imports.
in the organized sector against Rs. a 1. Air-Conditioner in India Product Segment Window and Split Central and Chiller Size (Rs. now costs below Rs. It can be classified into windows.000/. in crores) 900 (Approx.both commercially as well as household. The split is divided into ducted and non-ducted.000/.000/.5 ton airconditioner which costs Rs. packaged and Chiller Air-conditioners. Rs. The market for air-conditioners was earlier dominated by the unorganized sector as a result of high excise duty. 900 crores and the central including Chillers command a market of Rs.in the unorganized sector. Then lowering of excise duties from 110% to 40% favoured the organized sector by narrowing the price gap e. The window and split AC have a current market of Rs.45. at least for the next 5 to 10 years.in 91-92. This sector accounted for around 55 to 60% of the market shares only 2-3 years ago. 24. Indian market is Window AC oriented . 30. 33 . Against most developing countries. Profits in this segment are driven by volume growth. the segment is likely to grow.) The domestic Window Air-conditioner has been growing at the fastest rate but this has been accompanied by increasing competition leading to low profit margins.. 1500 crores. The proportion used to be 30:70 during 91-92.) 600 (Approx.g. Considering the low penetration of AC’s. split.INDUSTRY AND MARKET OVERVIEW The air-conditioning industry has a total market size of approx. 600 crores.
But the wear and tear is quite high necessitating frequent repairs. Important Factors The important factors that govern profitability in the Air-conditioning Industry are Product Technology. Most critical in the Product Technology is the Compressor. Till 1994. Even then. In the Exim policy. Profitability Margins in the industry vary depending upon the segment. This is well suited for the Indian conditions where dust and ambient temperatures are relatively high. for players who have their own Compressor Manufacturing facilities. gave considerable relief to the Air-conditioning sector. After Sales Service and Aesthetics. its cooling efficiency decreases.000 for 1. The rotary compressor is suitable for conditions where temperature does not exceed 55 degree Celsius. Volumes.The Government Policy Regarding AC’s The attitude of the government to the industry in general has been influenced by the perception of white good as a luxury item. Margins are highest in Central and Packaged Air-conditioning segments ranging between 20-24%.5 tonne models. However margins in the window segment are the least. the govt. Distribution Network.000/. which are common in India and once spoiled it cannot be repaired. The most common type is reciprocating compressor. The excise duty was reduced from 80% to 60% in 1994-95 and from 60% to 30% in the following years. which contributes about 40% of the total cost. But the advantage is that it is much more efficient 34 . between a broad range of 10 to 20%. Also it cannot withstand voltage fluctuations. Only after 1993 did the government liberalize its attitude towards white goods. 9.for 0. Beyond this. But these are reasonable in the case of Split AC’s. AC’s continued to be in the negative list. Hence it is suitable for coastal areas like Mumbai where temperatures are low as compared to central and northern India. excise duty on AC’s varied from Rs. In the 1994-95 to 1996-97 budgets. margins are higher. which means they cannot be imported without license or as baggage.5 tonne AC’s to Rs.7. model and sizes.
washing machines and refrigerators. consuming less power with negligible wear and tear problems. With all the major players investing money towards higher capacities and new entrants setting up their plants. Carrier Aircon and SIEL respectively. which can cause wear and tear. Outlook During 2000-01 a total of about 7 lakh air conditioning units were sold and this is expected to rise to a phenomenal 10 lakh units by the end of 2004. The latest compressor technology is the scroll compressors. Being a consumer durable industry the activities aspect too is important.than the reciprocating one at moderate temperatures. The industry has been growing at a healthy compound rate of 30% for the past three years and this pace is expected to continue in the near future. other segments are also expected to register healthy growth rates of around 28%. It has no part. Increasing income levels and change in life-styles have led to heavy demand for consumer durables. While the growth rate in the domestic window segment is expected to be highest at around 50%. Bristol and Tacumbch already have a presence in India through their collaboration with Kirloskar. The cost of servicing and maintaining big 35 . there is no such seasonality in other segments. Since last two three years they have penetrated most urban households. Air conditioners. esp. supply is expected to keep pace with demand. The three world leaders in compressor technology Copeland. distribution network and after sales services are the deciding factors in these two segments respectively. so companies have to manage inventory with minimum cost. is very efficient under variety of conditions and can be repaired instead of being replaced. Since this is a volume driven business in the window segment and technology driven in the package segment. While 40 to 45% of the sales in the window segment come from first three months of April to June and the rest from the other months. Today. white goods is one of the most brand driven product segments where companies success depends upon marketing power in terms of building brand equity and being able to maintain and support nation-wide sales and distribution network is a prime requirement for effective market penetration.
Market Share In Central Air-conditioning (30 tons and above) This market has remained stagnant since past three years. as more electronic gadgets are used at the work place. which makes it less attractive compared to others. Companies Blue Star Voltas Carrier Aircon ETA Suvidha KPC/MCO Trane ABB-Flakt Thermax Others Market Share (%) 38 17 9 13 3 1 1 1 9 8 Source: FY02 Balance sheet of Blue Star Ltd 36 . Leading players in this segment are shifting their focus towards the faster growing segment-Room ACs. In future demand composition is expected to tilt towards corporates. The focus will shift from comfort cooling. Margins from this segment are as low as 7-8%. to process cooling where precise ambient conditions have to be maintained which naturally means that technology will play an important role.distribution network is phenomenal and this is one of the factors that resulted in regional restriction of some brands.
the unit is placed in a separate room and the cold air is carried through ducting to the required areas. It is suited for those establishments that are not large enough to go in for a central system. which are more reliable because it has only three moving parts within the compressor. And more importantly it ensures saving of energy cost to the consumer. They are available in the capacity range of 0. Split ACs are so named because the unit is 'split' into two parts. who are leaders in central ACs are now vouching on about 50% future revenues from packaged air conditioners. These are packaged air conditioners (PAC). This segment is growing at 25%. These ACs are ideal for rooms with low heat loads. offices and small establishments. Companies such as Blue star. compared to 15 moving parts otherwise. fitted with scroll compressors. The room AC sector caters to residential premises. Companies Blue star Carrier Voltas Amtex Others Market share (%) 33 29 21 7 10 Source: FY02 Balance sheet of Blue Star Ltd In Mini Split Air-conditioners (1-3 tons) The unitary products would include the window ACs and the mini-splits (without ducts).5 TR to 3 TR. Overall growth rate in this segment is about 15%. which lies in-between central and room ACs. The compressor and the condenser forming an outdoor unit and the cooling coil remaining as an indoor unit. 37 .In Ducted System (5-20 tons) This is a segment. Split units can be with or without ducts. With many more show rooms and commercial establishments companies the future looks bright for this segment. In PAC’s.
Companies Carrier Voltas Amtrex Blue Star Videocon Godrej Others Market share (%) 42 22 14 9 3 1 9 Source: FY02 Balance sheet of Blue Star Ltd 38 .
Recent Developments Blue Star at the Threshold of VRF technology. Blue Star recently executed four major projects to set up perishable cargo handling refrigerated facilities at Ban galore. plans to manufacture its own VRF ACs this year. leaders in airconditioning. Blue Star Ltd vice-president (marketing) N Sivasankaran told FE. it will also provide an SMS option for cell phone numbers. 39 . Hyderabad and Chennai airports. The value proposition for the new campaign is ‘Cooling solutions to help your business do better’ ’’. Blue Star. Pune. Blue Star is planning to widen its reach for its recently launched ‘Help line Campaign’ to many markets in India which will promote its toll. Bombay Stock Exchange and Reserve Bank of India. have airconditioned many prestigious establishments such as Parliament House. the company has set up a centralised call centre at Thane in Mumbai. invented by Daikin of Japan. The technology (called variable refrigerant flow or VRF). It is this very same expertise that goes into their new window airconditioners. and will position its products competitively against imported ones. The main objective behind the move is to showcase Blue Star’s strengths in providing cooling solutions. Besides. He added: “This is part of our new brand-building exercise for promoting our entire range of Blue Star ACs. Blue Star. Voltas and Blue Star.The Rs 601-crore Blue Star Ltd— central airconditioning and commercial refrigeration major—has earmarked a total investment of Rs 8 crore on a new campaign for this summer.free number 1600-2222-00 to address common customer queries. For the purpose. whether to buy a window or a split AC among other things. is now being developed in India by large and established players including LG. which currently imports and sells Sanyo VRF units in India. Blue Star sets aside Rs 8 crore campaign. It includes queries such as what capacity of AC to buy.
40 . The company has strong potential to grow & that through greater innovations. • The brand’s vision is to deliver excitement to the consumers. In short it can be said that the company is still growing by making constant efforts. In addition to corporate sector the company has the option to step into the local households by understanding their psychology. • • • Complete control over core components & technology.CONCLUSION • • Blue Star is the largest single source for air-conditioning equipment in India. • • Blue Star is India's largest central air-conditioning company. • Through its strategic long-term tie-ups with key and critical auxiliary manufacturers. by providing comfort at its best. Blue Star provides its customers many benefits. Blue Star is India's largest and most preferred air-conditioning and commercial refrigeration company.
QUESTIONNAIRE Name: ____________________________________ Address: __________________________________ Occupation: _______________________________ Age: ______________ Gender: __________ 1)Are you aware of Blue Star AC’s? (a) Yes (b) No 2) How did you come to know about the Blue Star AC’s? Television Ads Magazines Newspaper Internet Any Other 3) Do you have a Blue Star AC? (a) Yes (b) No 4) Are you satisfied with your AC & the after sales service provided by the company? Yes No 41 .
LG.5) What do you like the most about the Blue Star AC’s? Looks Price Durability None 6) How will you rate the pricing policy of Blue Star in comparison to other brands like Samsung. High Low Or Somewhere in between 7) If you have to buy one more AC then AC of which brand would you prefer most? Blue Star LG Samsung Voltas Carrier Hitachi Any Other 42 . Videocon. Carrier.Voltas etc.
8) What is your opinion regarding Blue Star AC’s? Reliable Long Lasting Technologically strong Innovative None 9) Any changes which you would like to bring among Blue Star AC’s. Improve Quality Increase variety Reduce Prices Introduce more schemes No Change 43 .
FINDINGS OF THE SURVEY Are you aware of Blue Star Ac’s? (a) Yes Yes-61 people No-39 people In a random sample of 100 people 61 people were found to be aware of Blue Star Ac’s. (b) No Awareness Against Blue Star AC's 80 60 40 20 0 1 People aware of Blue Star Ac's People not aware of Blue Star Ac's 44 .
of People 9 31 11 8 2 Awareness through different means 3% 13% 15% 18% 51% Television Ads Magazines Newspaper Internet Any other means 45 .How did you come to know about the Blue Star Ac’s? a) Television Ads b) Magazines c) Newspaper d) Internet e) Any Other Means Television Ads Magazines Newspaper Internet Any other means No.
(b) No Proportion of ownership People having an AC of other brand People having a Blue Star AC 49 51 48 48.Do you have a Blue Star Ac? (a) Yes Yes-51 people No-49 people In a random sample of 100 people 51 people had Blue Star Ac.5 Total no. of people 51 51.5 50 50.5 46 .5 49 49.
Are you satisfied with your AC & the after sales service provided by the company? (a) Yes Yes-45 No-6 (b) No Satisfaction level of people having Blue Star AC's 12% People Satisfied People not satisfied 88% 47 .
of 20 people 10 0 Looks Price Durability None No. of People 48 .What do you like most about Blue Star Ac’s? a) Looks b) Price c) Durability d) Any other e) None Quality Looks Price Durability None No. of People 11 9 28 6 What people like most about Blue Star Ac's 30 Total no.
Videocon. of people 19 3 29 Pricing Policy of Blue Star being rated by different people 37% 57% 6% High Low Somewhere in between 49 . Carrier.Voltas etc.How will you rate the pricing policy of Blue Star in comparison to other brands like Samsung. a) High b) Low c) Or Somewhere in between Prices High Low Somewhere in between No. LG.
If you have to buy one more AC then AC of which brand would you prefer most? a) Blue Star b) LG c) Samsung d) Voltas e) Carrier f) Hitachi g) Any Other Company Blue Star LG Samsung Voltas Carrier Any Other No. of People 10 0 Blue Star Samsung Carrier No. of people ine favour 50 . of people in favour 28 13 6 2 2 - People's Choice 30 20 No.
What is your opinion regarding Blue Star AC’s? a) Reliable b) Long Lasting c) Technologically strong d) Innovative e) None Quality Reliable Long Lasting Technologically Strong Innovative None No. of people in favour 13 15 21 2 0 Opinion of people regarding Blue Star AC's Innovative None Technologicall y Strong Reliable Long Lasting Reliable Technologically Strong None Long Lasting Innovative 51 .
a) Improve Quality b) Increase variety c) Reduce Prices d) Introduce more schemes e) No Change Recommendations Improve Quality Increase Variety Reduce Prices Introduce More Schemes No Change No.Any changes which you would like to bring among Blue Star AC’s. of people 1 3 19 26 2 Recommendations by people 4% 2% 6% Improve Quality Increase Variety Reduce Prices Introduce More Schemes No Change 51% 37% 52 .
The product must be available at most of the places keeping in mind that the distribution cost should remain minimum. Company should improve there after sales service & should go for warranties for long durations. Crucial role facilitates price control. So Blue Star should stress on electronic media to beef up its sales. company can also consider exchange offer scheme to beef up its sales. Due to this scheme more and more prospects will enter into the customer base of Blue Star. It was found that most customers owning AC’s were interested in an exchange offer. Company should also come up with the new schemes for the customers. so companies will have to fight hard to woo the customers.Recommendations: In the coming years competition will intensify more. Electronic media has a very effective reach in each and every potential household. but Blue Star is not using this media. In other words. This will help in attracting more and more prospects. Last but not the least the company should introduce their consumer electronics products. lower down its cost of production. Such as Television and washing machines. 53 . Company should come out with 0% Finance Scheme. So. The Advertisement should be such that customer develops an emotional attachment with the product.
www. 54 .BIBLIOGRAPHY MAGAZINES: Advertising and Marketing. Marketing Management. India Today. INTERNET SEARCH: www. New Millennium Edition.com. 2000.bluestarindia.encyclopedia.com. BOOKS REFERRED: Kotler. Philips.
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