Marketing Management – I

Project Report on Havells India Ltd.

Submitted by:

Deepak Yadav – 15DM050

Dhyanendra Mohan – 15DM052

Ekta Kansal – 15DM054

Harshad Mahajan – 15DM060

Harshvardhan Jain – 15DM062

Pankul Mittal – 15DM099

Submitted in partial fulfilment of the requirement for the award of PGDM (2015-17)

To,

Prof. Dhruva Chak

 ACKNOWLEDGEMENT

The mediocre teacher tells. The good teacher explains. The superior teacher demonstrates.
The great teacher like you inspires.

It is not possible to prepare a project report without the assistance & encouragement of other
people. This one is certainly no exception.”

On the very outset of this report, we would like to extend our sincere & heartfelt obligation
towards all the personages who have helped us in this endeavour. Without their active
guidance, help, cooperation & encouragement, we would not have made headway in the
project.

We are extremely thankful and pay our gratitude to our faculty Mr. Dhruva Chak for his
valuable guidance and support on completion of this project. We extend our gratitude to
Birla Institute of Management Technology for giving us this opportunity.

We also acknowledge with a deep sense of reverence, our gratitude towards our parents and
member of our family, who have always supported us morally as well as economically.
We are also grateful to the Consumers, and Distributors, who all participated in the
research and made this project successful.

At last but not least gratitude goes to all of our friends who directly or indirectly helped us to
complete this project report.

Any omission in this brief acknowledgement does not mean lack of gratitude.

Thanking You
 ABOUT HAVELLS

Havells India Limited is a $1.4 Billion leading Fast Moving Electrical Goods (FMEG) Company with a strong global
footprint. Havells enjoys enviable market dominance across a wide spectrum of products, including Industrial &
Domestic Circuit Protection Devices, Cables & Wires, Motors, Pumps, Fans, CFL Lamps & LED Lamps for
Domestic and industrial Applications.

The LED (Light Emitting Diode) division of Havells deals in LED lamps, which are manufactured for both domestic
and industrial use. Like other LED brands, Havells also manufactures its LED lamps to be energy efficient; however it
also designs them to be of a far superior quality than that of its competitors.

LED Market Size and Havells’ Market Share

India’s LED market is forecast to reach $1,457.8 million by 2019, at a CAGR of 35.9%, during 2014-19. Increasing
demand for energy efficient light sources and various Government initiatives to replace the CFL’s and incandescent
bulbs with LED bulbs is driving the growth of LED lighting in India.

 The government has decided to change all street lights and lights in public spaces to LED lights, and initiated
making all LED specifications mandatory; notifications to commercial buildings to change existing down
lights exclusively to LED are in progress.
 All existing government schemes to distribute CFL are being modified with LED lamp distribution.

Market Size and Share

LED MARK ET GROWTH OVER THE YEARS

LED Market Size (in Crores) Growth Rate
6000 5500

5000
4110
4000
2989
3000
1925
2000
1250
850
1000 500
300
60% 70% 47% 35% 36% 27% 34%
0
2009 2010 2011 2012 2013 2014 2015 2016

As we can see from the above chart, LED market is one of the fastest growing markets. Though LED lights are
brighter and more energy efficient than its predecessors, the major spurt in the growth of LED market came after
the initiatives of the government. The market size of Indian LED industry may touch Rs 21,600 crore by 2020 on
the back of government's decision to switch to LED for all street lamps and public space lighting. The following
graph will show the growth trend for the LED industry.
 Chart Title
12000
10460
10000

8000 7560

6000 5500
4662
4110
4000
2989
1925
2000
1250

0
2012 2013 2014 2015 2016

Origonal Estimates in Crores Revised Estimates in Crores

In such a large and growing market, Havells has managed to emerge as one of the major players. Over the years,
Havells established itself in the market using quality and price range as its USP. In March 2007, Havells acquired
SLI Sylvania of Netherlands for $300 million, making it the fourth largest lighting business in the world, worth
over a billion USD.
Currently, the market share of Havells in the LED market is 12% as per 2014 figures. LED lighting contributed to
45% of the total revenue of Havells from its Lighting Sector.

SEGMENTATION

The LED market can be broadly divided into three end-use segments:

1) Commercial 2) Industrial/Outdoor and 3) Residential

Commercial Segmentation -:
LED lights offer a lifetime of up to 50,000 hours of illumination and work efficiently by utilizing only a fraction
of energy. The most important feature that commercial organization looks for while buying an LED is its energy
saving capability and Havells targets this sector by offering LED’s which save up to 80% of energy. With life and
better brightness, Havells LED presents itself as the perfect choice for futuristic world when it comes to energy
consumption. 

Industrial/Outdoor Segmentation-:
 Infrastructure applications which include street lights, tunnel lights, external wall sconces, pathway lights, garage
structures, parking lot etc are included in this segment. High power factor is the key driving factor in this type of
segment. Havells is one of the few companies in lighting category which also provides LED’s especially for this
purpose. Havells provides LED’s whose power ranges from as low as 28W to as high as 150W giving its
consumers a wide variety to select from.
 Residential Segmentation -:
This segment includes lighting used in homes. Cost is the key driver with the traditional style form factors
dominating this market. Havells provides LEDs which have just the right brightness levels and lower
consumption levels making it the ideal choice for residential consumers. Its extraordinary long life of LED’s and
its environment friendly factor makes it one of the leading players in its industry.

TARGETING

It is very important for any organization to select potential customers to whom the organization wants the sell the
products. The segments which Havells has been primarily targeting are residential consumers with its low cost
and energy efficient products like Delite and Lumeno LEDs which reduces the electricity bill by 50%. With the
products having different power ranges it is a popular choice for any company to light up its office. With its low
cost LEDs and products for Home Decor and Speciality lamps it is also able to target rural as well luxury
households. And with its recent launch of Lumeno LED which can save up to 90% of power it will be a favourite
choice for the entire environment concerning people.

POSITIONING

Havells has always stumped its competitors by its positioning strategy. Aggressive branding especially on
television has helped Havells create a brand recall like no other. Iconic catchphrases like “Shock Laga Kya” and
advertisements like “Rimpoche” and “Happy LEDiwali”. Apart from that it also has sponsored famous TV
shows like “BIG BOSS”, which has just increased its brand value. Havells has invested in a network that rivals
its peers. It has one lakh retailers along with over 200 Havells Galaxy Stores and 2500 dealers across the country.
Havells is also famously very dealer friendly. It offers higher credit, larger trade discounts especially on early
payments and entertains dealers on overseas trips. All that incentives make Havells a popular brand among the
retailers. Havells LED, like all the other divisions of the company, focuses more on quality based competition.
Rather than price competition. The products are standardised and are of a premium quality.

SWOT ANALYSIS

STRENGTHS -:
 Huge demand forecasted for all types of lighting products.
 Large distribution network, with a huge number of retail outlets.
 Strong Brand Image.
 Large range of products in terms of cost, power etc.

WEAKNESS -:
 Low capability for domestic production of electronics.
 Increase in short term debts.
 Heavily Indebted.
OPPORTUNITIES -:

 Fast growing Indian infrastructure.

 Potential to create greater demand for LEDs via ban of inefficient Halogen Lamps.
 Scope for more environment friendly products and their disposal.
 Growing Demand for Energy Efficient products.

THREATS -:

 Low quality, cheap imports (e.g. from China) flooding the market and competing with locally
manufactured product.
 Highly Competitive Markets
 Forex volatility, leading to volatility in cost of raw materials for LEDs, most of which are imported today.

PORTER’s FIVE FORCES ANALYSIS

It is a framework to analyze the level of competition within an industry and business strategy development. It

draws upon industrial organization to derive five forces that determine the competitive intensity and therefore
attractiveness of an Industry. Attractiveness in this context refers to the overall industry profitability. An
"unattractive" industry is one in which the combination of these five forces acts to drive down overall
profitability. Following are the five forces -:

Bargaining Power of the Suppliers

Havells being a MNC has a very large need of raw materials. For this need it does not depends upon a single
supplier. As it’s a very huge and old company its need cannot be fulfilled by a single supplier and also it
understand that if it has only one supplier then the price can be dominated by them. Havells understand this fact
and therefore has many suppliers. Therefore the bargaining power of supplier is very less.

Bargaining Power of the Customers

Today is the world of digitization and because of this the entire information is available to the customers. Gone is
that time when manufacturers can sell anything to customers .Now is the time when customers are very smart and
have various options to buy. Same is in the case of havells Therefore we can say that buying power of customer is
very high.

Threat of New Entry

In today’s era technology is changing very fast. Normal tube lights were taken by more efficient one then comes
the CFL and now LED which is even better. But companies invest a lot in the manufacturing plants of these .But
if a new technology comes which is much better and much cheaper then all of their investment will be wasted.
But also the fact that these types of plant need a very large investment which not all can afford. Therefore there is
a very high threat of new entrant.
 Threat of Substitution:

There are some products that can be defined as the substitute for LED for example tube lights, CFL, bulbs etc.
Therefore there is a threat for substitute in this case

Rivalry among existing competitors

In the field of LED Havells has lot of competitors. Among many the biggest competitors for Havells are
Philips,Bajaj ,Syska and many Chinese LED. Therefore there is very close competition.

Comparative Analysis

Parameters Weightage Havells Phillips Syska Eveready

Price Range 0.25 100 25 80 20 80 20 20 5

Efficiency 0.25 100 25 100 25 80 20 100 25

(Measured in
Lumens/Watt)
Warranty 0.20 50 10 50 10 100 20 50 10

Life in Hours 0.15 80 12 50 7.5 60 9 60 9

Brightness 0.15 80 12 60 9 100 15 60 9

(Measured in
Lumens)
Total 1.00 410/500 84/100 340/50 71.5/100 420/500 84/100 290/500 58/100
0
Source: ledlightsindia.com

The LED market has emerged as one of the fastest growing industries in India where Havells has an ever growing
market with a yearly growth rate of 20 percent. Presently, the outdoor LED lighting segment is the largest
revenue generator on account of growing demand for LED installations in parks, streets, railways, metro stations,
parking lots and other public places. However, the indoor segment is anticipated to witness strong growth in
future owing to rising awareness about LED technology and various government initiatives to subsidize the cost
of LEDs.

According to researchandmarkets.com, Philips dominates the country's LED market with the highest market
share, followed by Havells, Syska, Innovlite and GE.
As per the information from the website ledlightsindia.com, Havells India is the second best with respect to
quality of product with Syska at the first and Philips at the third place in the LED market.

RESEARCH METHODOLOGY

 Surveys were conducted in Jagat Farm, Ansal Plaza, Commercial Belt, Alpha 2 Market, Greater Kailash
II, Rampur, Ghaziabad, Kanpur, and Gurdaspur.
 Secondary data from newspapers, magazines, havells.com, surveymonkey.com, ledlightsindia.com,
phillips.com.

Results from distributor survey:

Apart from major competitors like Syska, Phillips, Bajaj etc. Havells also faces tough competition from local
brands too. Considering the fact that majority of the residential consumers belong to average income group ,
they prefer low cost LEDs.

Which among the following is your favourite brand?

Are you satisfied with Havells’ after sales services?

How does your Havells LED perform?

Based on your experience how likely are you to recommend Havells LED to someone?
 UNIQUE SELLING POINT

Havells is known for certain factors that have become its USPs and have helped boost its sales.

 Quality- Havells is known for its quality. It is the best available in the market. That is at par with Philips
 Variety- Havells is trying to attract the maximum customers by offering them a wide variety of choices and
thereby capturing a large share of the market.
 Price Range- It has the most diverse price range in the market from –to-. By offering such a diverse range of
prices, they are trying to reach every sector in India.
After sales services- Havells is known for its best in class services. They have a 24*7 online support available and
any complaint is resolved within 24 hours only.

RECOMMENDATIONS

Havells, though a major player in the LED market, has a few weaknesses. To expand itself, it needs to
overcome those weaknesses. Our suggestions to Havells, based on the data we collected are:
 Reduce costs, so as to increase the margin for both the company and the suppliers.
 Focus more on e-commerce and online marketing. Provide attractive offers to e shoppers.
 To cope up with competition, the company should hire a Bollywood celebrity as their brand
ambassador.