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Dissertation on contemporary issues

From Mohit Kumar Gupta

PGDM-11031

Purpose of study:

Channel management is concerned with the entire process of setting up and operating the channel for meeting the company objectives. It refers to the way that a business or supplier of products uses various marketing techniques and sales strategies to reach the widest possible customer base. Under channel management, the company deals with the external organisation. The company uses these external organisations to achieve its objectives of

profitability and customer satisfaction and in turn ensure that the channel member’s

objectives are satisfied.

The purpose of the study is related to the Channel management and sales & distribution system in the automobile industry where we analyse the way the channel are operating in the two wheeler segment of Automobile industry. We also analyse the importance of channel in the two wheeler segment of automobile industry.

Objective of study:

The objective of the report is

Background of the industry

Marketing channel

Importance of Marketing channel

Function of marketing channel

Channel management decision

Evaluation of alternatives

Types of channel

Factors affecting the channel decision

Channel level

Channel conflict

Summary and conclusion

Methodology

The methodology adopted will be data collection from secondary sources. This includes articles published in journals, publications, annual reports. Books and websites relating to the subject under study will be used extensively. Models and conceptual frameworks relevant to topic of discussion will also be considered.

Introduction of Automobile sector:

Automobile industry in India has huge potentials thanks to the growth of the middle class along with their overall economic growth. This is the reason of attraction for international brands who are trying hard to find new market for their products due to stagnated growth of auto sector in Europe, US, and Japan.

Potential of Indian automobile industry can be best understood by following features: India is the second largest two wheeler market, fourth largest commercial vehicle market, eleventh largest passenger-car market, and fifth largest bus and truck market. With these facts in mind, let's talk about auto-component sector in particular.

This segment is further divided into five sub segments --engine parts, drive transmission and steering parts, suspension and brake parts, electric parts, and body and chassis. According to the Automotive Manufacturers Association of India (AMAI), this sector is projected to grow at a CAGR of 10% till 2015-16; India is projected to be among top five automotive economies by 2025.

In view of such huge potential, the Government of India has launched a 10-year plan - Automotive Mission Plan (AMP), 2006-16 which aims to make automobile industries' contribution to GDP more than 10% while providing employment to 250 lakh people.

Introduction of Two wheeler segment of automobile:

Although the Year on year volume growth of the industry remained in double digits, the pace of growth during the last quarter was at its lowest gear in the last three years. In an environment where the increase in inflation, fuel prices and interest rates has been the archenemy of growth in the Indian automobile industry at large, the two wheeler industry has been tough and was reflected in its vigorous volume growth.

A look on the volumes of major 2-wheeler OEMs -

.
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Demand drivers of two wheeler industry:

Rising per capita income

Rise of India’s Rural Economy and Growth in Middle Income Households

Favourable demographic distribution with rising working population and middle class

Urbanisation Increasing disposable incomes in rural agri-sector

Availability of a variety of vehicle models meeting diverse needs and preferences

Greater affordability of vehicles

Rapid Product Introduction and Shorter Product Life Cycle

Easy finance schemes

Favourable government policies

Inadequate Public Transport Systems in most Urban Areas

Challenges faced by the industry:

Rising Customer Expectations

Environmental and Safety Concerns

Creation of Distribution Infrastructure

References:

http://management-punditz.blogspot.in/2012/04/indian-two-wheeler-industry-2011-2012.html

http://www.ciol.com/ciol/news/71731/automobile-industry-challenges-expectations-2012

http://www.indiainbusiness.nic.in/industry-infrastructure/industrial-sectors/automobile.htm

http://articles.yellowpages.co.in/indian-two-wheeler-industry-steady-growth-continues-part-i/