A MARKETING RESEARCH REPORT TO FIND THE CUSTOMER SATISFACTION INDEX AMONG THE CUSTOMERS OF ELECTROMECH MATERIAL HANDLING SYSTEMS

PVT LYD.
SUBMITTED TO

MIT PUNEs MIT SCHOOL OF TELECOM MANAGEMENT BY

Tejas Rajpathak
PRN: 11039 Batch: 2011-2013 IN PARTIAL FULFILLMENT OF POST GRADUATE DIPLOMA IN MANAGEMENT

(PGDM) TELECOM SPECIALIZATION: MARKETING

EXECUTIVE SUMMARY-

A marketing research was done in Poona in the company named ElectroMech Material Handling Systems from 2nd may to 2nd july and crux of research was to find out the Customer Satisfaction Index (CSI) about the products of company from existing customers, identifying any problems faced by them, identifying new customers and briefing them about the products of ElectroMech. ElectroMech is in manufacturing of cranes and hoisting solutions located in Pirangut, Poona. One of the objective was to remain with the changing demands of customer due to heavy competitors in the market. For doing the research, a questionnaire was developed taking into consideration various factors like about the awareness of company product, preference of companies according to cost, after sales service, reliability, choices of customer according to client base. A descriptive type of research was conducted by taking into consideration a sample size of 70 companies, the sample size was taken a little bit small due to time constraints and cost constraints. Various observations were found during the research. The perception of clients was found out, and their opinion about the product was found out from the questionnaire. As many companies were found to enter in Poona, a lot of potential for cranes was seen. Major findingsa) ElectroMech cranes are found in almost 60% of these industries and are the pioneers in material handling with highest market share. Some clients of ElectroMech consists of Sandvik Asia, Bharat Forge, Atlas Copco, Alfa Laval, B.G Shirke etc. b) . Talking about customer satisfaction almost 98% customers are found to be satisfied with cranes. Less percentage of customer dissatisfaction was found out. c) Even if cost of cranes are much higher than their competitors, companies were eager to enquire about cranes. d) Top companies like Ford, Foton and many more are in pipe line to enter markets here, which is a healthy sign for company. Total market size in India for cranes is around 1500 crores. e) Competitors for ElectroMech are WMI, Indef, Demag, Kone, etc which are organized.

f) Huge areas are available in Poona as it is blessed with Maharashtra Industrial Development Corporation(MIDC). Excellent roads, railways etc are making Poona investment friendly. g) Companies coming from USA, Germany, Switzerland etc are finding electromech as a reliable name in field of material handling. h) Many imported car manufacturers like Nissan, Renault, Bharat Benz, Daimler coming up with huge plants in coming months which is a healthy sign. i) Companies are giving preference to quality first than price The price of ElectroMe ch cranes are much higher than other competitor due to advanced technology, using components of high precision which require less maintenance.

Aim and Objectivesa) To identify and define marketing opportunities and problems. b) To study awareness of company and its products in particular region. c) To determine how well customer needs are being met and investigate new target market, and understand the factors in deciding when it comes to buy a crane in a particular region. d) To identify primary competitors and pinpoint their strengths and weaknesses (SWOT). e) To study the customers perception about the products. Research problem statementTo identify and define marketing opportunities, and to find the Customer Satisfaction Index among the existing customers of ElectroMech with respect to overall quality of product, timely response of company to enquiries, approach of sales and technical team to provide solutions to the customers. The research was so done that competitors analysis was to be chalked out, what are customers expecting from products with change in market trend, why a particular company is

going always for a particular brand of EOT cranes. The attitude of customer towards the customer, the customers perceived value was a part of research problem statement. Scope of study The scope of study extends to almost in and around of Poona covering major respondents which were from various industries. About 65% of big as well as medium companies were found to use Electromech cranes. Field work included of taking appointment of customer, reaching there on time taking feedback of products, writing any additional suggestions comments etc and while leaving exchanging of visiting cards. The exhaustive field work covered almost all areas of Poona and other nearby areas. During this time many companies got to know about ElectroMech and its capabilities by word of mouth and reputation in market and rest of work was done by product catalogue. More than 200 companies were visited in this period and more than 60% companies were using ElectroMech products was one of the observations. A lot of data was collected regarding new upcoming plants, new companies, various types of application which can be required for this plants.

PROFILE OF COMPANY AND INDUSTRY OVERVIEW. .

Company overviewEstablished in 1979, today ElectroMech is the largest crane manufacturer in India commanding highest market share and recording 50% average annual growth. They offer precise solutions for wide-ranging applications in manufacturing plants and infrastructure projects through a complete range of Hoists and Cranes. They are an exclusive India partner of ABUS Crane Systems, Germany one of the world's leading crane manufacturers. The manufacturing plant in Pune is the largest crane manufacturing facility in India practicing international standards of manufacturing and quality assurance. ElectroMech is known for ensuring service excellence
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through a wide-spread network of own offices across India. With a significant presence in more than 17 countries and a subsidiary company in Dubai, they are steadily marching towards becoming a global brand of repute. ElectroMech firmly believe in offering the latest and the best product and service to its clients. the tie-ups with renowned companies allow them to explore advanced technology solutions from world leaders. These solutions together with the domain knowledge, understanding of the local market and infrastructure help the customers to get worldclass solutions from a trusted partner like ElectroMech. ElectroMech has an exclusive tie-up for India with ABUS Crane Systems, Germany. ABUS is one of the world's leading manufacturers of standard overhead cranes with an annual revenue of over 200 million, manufacturing over 17,000 complete cranes & crane kits per annum. The ABUS scope of supply offers everything to keep your production flow moving. From overhead travelling cranes up to 200MT SWL, right down to compact chain hoists to lift 80kg SWL, and a wide range of crane accessories and hitech crane components.

Market shareMarket Share is the breakup of market size in percentage terms, to help identify the top players, the middle and the "minnows" of the marketplace, based on the volume of business conducted; ElectroMech is the largest crane manufacturer in India commanding highest market share and recording 50% average annual growth. In Poona share of company is 65% in market supplying cranes to small scale as well as large scale industries. Not only in Poona but also areas near to Poona like Baramati, Indapur, Shirwal ,Electromech cranes are working efficiently thanks to quality offered and market reach of the cranes. About 1000 customers are there in India and Electromech is the largest crane manufacturer in India. Due to high quality product, good quality service, identifying competitors strategy led Electromech becoming the market leader in field of material handling. Excellent quality service, logistics, delivering hoisting solutions on time were also some of the factors that lead to success of the company.

Research DesignA research design is the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure. Decisions regarding what, where, how much, by what means concerning an inquiry or a research study constitute a research design. In fact research design is conceptual structure within which research is conducted , that is it constitutes a blue print for collection, measurement and analysis of data. It specifies the source and types of information relevant to the research problem. It is a strategy specifying which approach which approach will be used for gathering and analyzing the data. It also includes time and cost budgets since most studies are done under these constraints. It must have a population or a sample to study and methods to analyze the data. Research design is needed because it facilitates the smooth sailing of various research operations thereby making marketing research as efficiently possible yielding maximal information with minimal expenditure of effort, time and money. Various considerations were taken before approaching the problem like means of obtaining information, the availability of skills of researcher and his staff, the objective of problem to be studied , the nature of problem to be studied, and availability of time and money for research work. The research design used in research was descriptive type were a small sample was studied. In descriptive analysis the first step is to specify objectives with sufficient precision to ensure that data collected are relevant. While designing data collection procedure care was taken that adequate safeguards against bias and unreliability must be ensured. Whichever method is selected questions were well examined and were unambiguous, interviews were such that genuine opinion can be extracted. To obtain data free from errors introduced by those responsible for collecting them, it is necessary to supervise closely the staff or field people as they collect and record information. Descriptive research can be either quantitative or qualitative. It can involve collections of quantitative information that can be tabulated along a continuum in numerical form, such as scores on a test or the number of times a person chooses to use a-certain crane, or it can describe categories of information such as gender or patterns of interaction when using technology in a group situation. Descriptive research involves gathering data that describe events and then organizes, tabulates, depicts, and describes the data collection (Glass & Hopkins, 1984). It often uses visual aids such as graphs and charts to aid the reader in understanding the data distribution. Because the human mind cannot extract the full import of a large mass of raw data, descriptive statistics are very important in reducing the
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data to manageable form. When in-depth, narrative descriptions of small numbers of cases are involved, the research uses description as a tool to organize data into patterns that emerge during analysis. Those patterns aid the mind in comprehending a qualitative study and its implications. Descriptive studies can yield rich data that lead to important recommendations.

Research methodThe research method used to collect the data and make observation was a questionnaire was developed and the survey type method was used. The survey type method consisted of open ended questions which were asked to customers and exact opinion was extracted from them. In survey method research, participants answer questions administered through interviews or questionnaires. After participants answer the questions, researchers describe the responses given. In order for the survey to be both reliable and valid it is important that the questions are constructed properly. Questions should be written so they are clear and easy to comprehend. Open-ended questions allow for a greater variety of responses from participants but are difficult to analyze statistically because the data must be coded or reduced in some manner. the advantage of this type of survey was direct contact with customer which allowed in depth knowledge sharing, and also good for networking .Questionnaire are an effective way of quantifying data from a sample group, and testing emotions or preferences. This method is very cheap and easy, where budget is a problem, and gives an element of scale to opinion and emotion. Questionnaire was so developed that each customer had a different view about the product, different opinions. This method is quite popular, particularly in case of big enquiries. It is being adopted by private individuals, research workers, private and public organizations and even by governments. A questionnaire consists of number of questions printed in a definite form on a form or set of form. As the questionnaire was filled by going to each and every customer a lot of time and money is required, but it is free from bias of interviewer, answers are in respondents own words.they have adequate time to fill the questions. Before using this method it was advisable to do a pilot study before going to actual customer. Pilot survey is infact the replica and rehearsal of main survey. Such surveys being conducted by experts, brings to the light of weakness of questionnaire and
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also of survey techniques. The main aspect of questionnaire was that it was carefully constructed, the question sequence, the wordings were carefully designed. structured questions were there in it with required a definite answer. This questions were simple to administer and relatively inexpensive to analyse. In order to make the survey successful the questionnaire was developed in sequence to ensure quality to replies. A proper sequence reduces the considerably chances of individual questions being misunderstood. The question sequence was from general to more specific as it progressed. The questionnaire was such that each question was clear for any sort of misunderstanding can do irreparable harm to a survey. A logical sequence was there in it. Technical and vague expressions capable of different interpretations was avoided in it .

Survey procedure1) Sampling- All items in any field of inquiry constitute a Universe or Population. A complete enumeration of all items in the population is known as census enquiry. It can be presumed that in such a enquiry, when all items are covered, no element of chance is left and highest accuracy is obtained. Even the slightest element of bias in such a inquiry will get larger and larger as the number of observation goes in increasing., and when field of enquiry is large a great deal of time, money and energy is required. When field studies are undertaken in practical life, considerations of time and cost almost invariably lead to a selection of respondents ,that is selection of only a few items. The respondents selected should be representative of total population as possible in order to produce a miniature cross-section. The selected respondents constitute which is technically called sample and selection procedure is called Sampling technique. The survey so conducted known as sample survey. Algebraically , let the population size be N and if a part of size n (which is less than N) of this population is selected according to same rule for studying some characteristics of population, the group consisting of these n units is known as sample. A researcher must plan how a sample should be selected and of what size such a sample would be. a sample design is a definite plan for obtaining a sample from a given population. Sample design may as well lay down the number of items to be included in the sample that is the size of sample. Sample design is determined before data is
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collected. There are many design a researcher can choose. A sample of size of 70 was selected by me, the data about companies which have an ElectroMech product already was taken into consideration for field work in Poona.

Sampling technique- Basically sampling procedure is divided into two parts namely probability sampling and non probability sampling. As the area where ElectroMech cranes were working seemed to be all over India, so as the total area of interest happened to be a big one, a convenient way in which a sample can be taken was to divide the area into a number of smaller non-overlapping areas and then to randomly select a number of these smaller areas called as cluster, with the ultimate sample consisting of all existing customers in the small clusters. This technique used was called as Cluster Sampling. Thus in cluster sampling the total population is divided into number of relatively small subdivisions which are themselves clusters of still smaller units and then some of these clusters are randomly selected for inclusions in overall sample. Cluster sampling no doubt reduces cost by concentrating surveys in selected clusters. But certainly it is price less than random sampling. There is also not much information in n observations within a cluster as there happens to be in n randomly drawn observations. Elements within a cluster should ideally be as heterogeneous as possible, but there should be homogeneity between cluster name. Each cluster should be a small scale representation of the total population. The clusters should be mutually exclusive and collectively exhaustive. A random sampling technique is then used on any relevant clusters to choose which clusters to include in the study. In single-stage cluster sampling, all the elements from each of the selected clusters are used. In two-stage cluster sampling, a random sampling technique is applied to the elements from each of the selected clusters. One version of cluster sampling is area sampling or geographical sampling. Clusters consist of geographical areas. Because a geographically dispersed population can be expensive to survey, greater economy than simple random sampling can be achieved by treating several respondents within a local area as a cluster. It is usually necessary to increase the total sample size to achieve equivalent precision in the estimators, but cost savings may make that feasible.In some situations, cluster analysis is only appropriate when the clusters are approximately the same size. This can
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be achieved by combining clusters. If this is not possible, probability proportionate to size sampling is used. In this method, the probability of selecting any cluster varies with the size of the cluster, giving larger clusters a greater probability of selection and smaller clusters a lower probability. However, if clusters are selected with probability proportionate to size, the same number of interviews should be carried out in each sampled cluster so that each unit sampled has the same probability of selection.

Selection steps in sampling technique and Samping elements1) Type of universe- Before taking out the sample the data in universe was studied with respect to spread of companies in different locations. As the universe was too large it was decided to divide the divisions according to convenience. 2) Sampling unit- A decision was to be taken concerning a sample unit before selecting sample. Sampling unit was according to region that is Poona. 3) Source list- It is also known as sampling frame from which sample is to be drawn. it contains the names of all items of a universe . Such a list should be comprehensive, correct , reliable and appropriate. It is extremely important for source list to be as representative of population as possible. 4) Size of sample- This refers to number of items to be selected from universe to constitute a sampe. The size of sample was decided as neither too large nor too small and was optimum. The size of sample was decided to 70 consisting of areas in Poona like Chakan, Bhosari, Dapodi, Hadapsar, Ranjangaon. 5) Budgetary constraints- Cost considerations , from practical point of view, have a major impact upon decisions relating to not only size of sample but also to type of sample. 6) Sampling procedure- finally the type of sample was decided and technique was decided to conduct the research.

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DATA ANALYSIS Characteristics of SampleThe sample that was selected was of 70 in size out of 500 customers that were located all around India. The sample contained industries from general engineering , automobile industry, heavy engineering industry, iron and steel industry, and other industries. The companies selected in sample were located in different parts of Poona, and were selected according to turnovers. Companies that preferred Electromech cranes were divided according to turnover. Market share of Electromech in companies having 1000 crore plus turnover, in between 500 to 1000 crores , between 100-500 core, and below 100 crores. The sample was selected according to convenience of areas. Satisfaction analysis was done in these 70 companies. Some of them were Sandvik, Atlas Copco, Alfa Laval, Gudel, Johnson Control, Prima Lasers, Bharat Forge, BG Shirke etc. a small feed back form was made to fill by the companies which had questions related to sales team, technical team, any commercial issues, recommendation of Electromech cranes to other companies, any additional suggestions was noted.

Market share analysis1) Existence of Electromech cranes according to turnover-

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10% 30% 60% 1000 crore pus 500 to 1000crore 100-500 crore below 100 crore

60%

Fig 5.1 The above pie chart shows that 60 % of companies having turnover above 1000 crore are using Electromech cranes in Poona. Companies having turnover between 500 to 1000 crore are also found to have 60% coverage of cranes. Companies in 100 to 500 crore are found to have about 30 percent of cranes and companies below 100 crore is found to have least 10 % cranes use to high cost of cranes. It is found that companies above 1000 core and companies between 5001000 crore generally prefer ElectroMech cranes as these cranes cost a little more than other local manufacturers due to high quality service .

AREA WISE CRANES PREFERRED-( MARKET PENETRATION)

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CHAKAN MIDC5% ELECTROMECH 20 DEMAG PVSS OTHERS

25%

50%

Fig 5.2 As found out in Chakan midc more companies are found to use Electromech cranes about 50 %.One finding as PVSS cranes company is situated there many companies are going for PVSS to reduce transportation cost. Companies like Ahmednagar forgings, AMTEK, Ansuya forgings, Rajkumar forgings are going for PVSS even if they have potential to buy electromech cranes. Companies like JBM, Minda, Kores, Bharat Forge, TSI etc are going for only electomech and Demag. 1000crore+ and 500-1000 cr companies are going for Electromech and Demag like TSI, JBM, GE Stamp automotive. PVSS is found to capture almost all companies below 100 crores. As answered by a customer using PVSS it has good quality along with great service and they are not targeting all areas in Poona. The companies which are close to chakan are customers of PVSS. Some companies which are too small are making inhouse cranes.

BHOSARI MIDC-

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15%

ELECTROMECH 15% DEMAG TECHNOFAB OTHERS 5% 65%

Fig 5.3 In bhosari midc almost all companies are using old products of electromech like cranes manufactured in 1997, 2001 and are satisfied with product as the company was earlier located there. Less companies are there in bhosari that are above 500 crores turnover. One observation was found in bhosari that companies like Autoline, Rakoh, L&T Swithgear, mirco boilers are going for Technofab cranes. Companies are finding Technofab products cheap but AMC are asking from Electromech company as poor service is seen to be given by Technofab. Many companies are fabricating cranes from local manufacturers like sayali lifters, Gulmohar cranes, Electrofab, and Hi tech cranes. Sayali lifters and Technofab are found in large numbers in this area. Here in bhosari many cranes are manufactured in house as many companies here are fabricators themselves

DAPODI AREA14

ELECTROMECH

DEMAG

KONE

10%

25% 65%

Fig 5.4
Companies in Dapodi included of Sandvik Asia, Atlas copco, Alfa Laval and Forbes Marshall. Kone was found to be the global partner of Alfa Laval. All 4 companies were found to be above 1000 crores plus turnovers. Demag cranes were found in Atlas Copco, which is also coming in chakan along with sandvik in next 6 months. All are found to be potential customers but according to me Alfa laval will not go for electromech as they found some technical problems in cranes. Electromech cranes have a market share of 65% in this areas.

PIRANGUT AREA15

electromech

santek

safex

others

5%

5%

15%

75%

Fig 5.5 As company is situated in pirangut itself almost each and every company from 50 crores till 1000 crores turnover like Kaeser compressor are using electromech cranes. As company is closeby, this customers are finding to take cranes. This mentality is found in each and every customer about closeness of company near their plant due to fear of service and spares parts. Almost each and every company is knowing about elecromech products. Brands from Germany are going for Demag as found out as most of companies from Germany use only products of those companies that originate in Germany. As santek cranes is also situated in pirangut some customers were found to go for their cranes. From the above analysis it is found that electromech is the market leader in India with almost more than 50% market share in each and every area, thanks to intense marketing and promotion activities.

FINDINGS AND INTERPRETATION

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According to customer if the crane installed in their factory works well and doesnt gets breakdown often then the customer is satisfied. Here in research many companies gave a positive feed back and were satisfied with the cranes.

Almost 98% customers were satisfied as found from the customer satisfaction form. As the manufacturing sector in India is growing at a noticeable pace many companies are keen to enter into Indian markets.

Market reach of Electromech cranes is very high and is seen in every type of industries which deal with heavy components. Many MNCs are finding Electromech cranes a reliable brand in field of material handling. With various crane manufacturers increasing in Poona the market share is found to decrease day by day, as these crane manufacturers provide hoisting solutions to customers at a low rate.

Brand loyalty is seen in existing customers and various enquiries were given due to reliability of brand. Almost each and every company in Poona knows about Electromech cranes. Pioneers in field of material handling companies like Demag and Kone are having a strong prescence in Indian markets and are threats to the company. Companies are turning to high quality products and are ready to pay more for Electromech cranes. The sample which was selected gave conclusions about the whole population, in terms of satisfaction level, and other points. Many companies were interested to know about the after sales service provided by company and the solutions that will be provided in case of breakdown. The technical part of crane that is the pendant was found to have problems and many customers complained about the pendant. The company did not provided any sort of crane spare parts which has to reviewed .

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Many crane manufacturing companies are entering into joint ventures for example Indef and WMI to tap Indian markets with their strong marketing and promotion techniques which can possess threat to the company.

Electromech cranes were not seen in very small companies as the price was high, so tap these small companies a cost efficient products needs to be built. All markets today are dynamic, change is in the air everywhere and change affects strategy, a winning strategy today may not prevail tomorrow or it may not be relevant tomorrow so to cope up with market change costant innovation should be done in bringing cranes according to the turnovers of company.

Competitors quickly copy products and service improvements that are valued by customers. A lot of growth is expected in area of Ranjangaon as many companies like 3M, Fiat India, Jotun, Zamil Steel etc are setting up their base and also many companies are there in pipeline to enter into markets.

When customer have relatively more power than seller they can force price downs or demand more services, thereby affecting profitability. The price of cranes are increasing day by day due to increased cost of per ton of steel, and also due to crises happening in the world and rising fuel prices the cost per kg of steel is increasing.

CONCLUSIONS. Some of conclusions that were found during the research are1) The total size of Indian material handling sector is 1500crore which is divided among all crane manufactureres. Many companies are in pipe line to invest in India, which is a positive sign . 2) Many new technologies are brought from outside to implement in cranes like variable frequency drives manufactured by Schneider Electric, making cranes reliable and easy to operate.

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3) Poona has a huge scope of industrial development still as many millions of acres land is still untapped in parts of MIDC. 4) Customer loyalty and brand satisfaction was seen among the existing customers of Electromech . many small scale industries which used to manufacture or fabricate cranes in house are going for branded cranes. 5) The sample size selected explained about customer satisfaction to a level of 98% in Poona region, with minimum number of complaints of dissatisfaction. 6) The automobile sector found a negative growth in Poona due to some crisis running in foreign countries while heavy industries like forging, steel were found to be in boom. 7) Due to development of new markets, manufacturing demand for a large number of components and final product assemblies are increased and various cranes are used for application and a lot of maintenance is required for operating the electrically operated cranes so there is lot of scope in services of cranes. 8) Due to constant complaints because in failure of services, components , low speed in transportation various logistics techniques are coming to deliver the crane efficiently and on time. 9) Companies going for cranes were interested in getting good quality after sales service like annual maintenance contract and availability of spares. 10) Finding channel partners in providing quick and reliable services was found to be beneficial. 11) Customers definition of satisfaction an loyalty is changing day by day due to increase in competitors.

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