Farm Electronics Case

B2B Marketing Dilemma

Submitted by- Group 10

150102 Abhinav Kumar

150103 Vishal Raj
150104 Rakesh Kumar
150105 Anjani Kumar
150107 Shreyank Jaiswal
150109 Himanshu Kumar Priyadarshi
150111 Antara Mukherjee
150112 Krishna Kant
Agenda

Decision Problem

Context Building & Current Scenario

Evaluating the Available Alternatives

Recommendations

Analysis for Reckitt Benckiser’ Lysol

 Decision Problem
• Whether Farm Electronics should work on acquiring more customers or
diversify its product portfolio to sell these products to existing customers

Framework Used: Ansoff Matrix

Alternative 1: Explore new market with existing product
(Market Development)

Alternative 2: Explore new market with existing as well

as new product. (Diversification)

Alternative 3: Sell new as well as existing products to

existing customers (Product Development)
 Case Facts

Farm Electronics- Company Background

• Incorporated in 1977 by Dinesh Ratanlal, Farm Electronics is a sole proprietorship firm that manufactures
electrical and electronic industrial equipment and operates in the small-scale industry.

• Initially targeting farmers, the company now manufactures Transformers, Power Supplies, & multiple other
electrical & electronic component parts.

• Positioned as a sub-vendor to identify firms with ongoing need for specific electrical components- for own
manufacturing process or intermediate goods for larger equipment. The idea was to generate repeat sales
by leveraging customer relations.

• Core Products- Isolation Transformers, Railway-Signalling Relay Coils, BLDC Motors, Power Supply, DC Motors

• Value Propositions- Quality, On-time delivery, After-sales services, Customized Product Ranges, Lenient
Credit Policy, Attractive repair & replacement offers.

• The company invested in a manufacturing unit with premium machines to meet the growing demand & built
a separate in-house design facility and quality inspection unit.

• Pricing of the company’s products was mostly dependent on the raw material costs- governed by
International Markets.
Timeline

2018
1984 1989 2000s 2006 Customer
1977
Acquired 7000 Developed BRT, Got multiple Dinesh’s son expansion to
Inception of sq ft land in with no Indian accolades for Anuj, joined the more
Farm Electronics Indore substitute entrepreneurship business international
markets
 Transformers

Relay Switch
Product
Portfolio Uninterruptible
Power Supply

DC Motor
 Case Facts

Buyer Persona- 1/2

Type A Type B Type C Type D PSUs

Industry Large-Scale Medium-Scale Small-Scale

Unorganized Large-Scale
Industry Industry Industry

• Very tedious
• Formal Process • Completely
process
• Prototype • Formal process unorganized
involving
submission initiated with • Purchase process
floating of
• Quality RFPs manager • Owners
tenders.
Assessment- • Meetings held contacts contacts
• Sometimes the
high with vendors to locally known multiple
Buying Process specifications communicate vendors vendors
departments
also buy
• Price quotes, specifications selecting the
directly from
scheduling & one offering
existing list of
deadlines. lowest prices
vendors
 Case Facts

Buyer Persona- 2/2

Type A Type B Type C Type D PSUs

• Standard • Standard
• Customer • Regular business
product product
retention was • Standard • Chance to
Opportunities good product
requirement requirement,
upgrade to a
• Relation with hence easy to
• Business was requirement vendor from
purchase meet the
regular sub-vendor
manager very customer
useful expectations
• Winning a new • Account • Very tedious
account is amounts were • Transaction buying process
difficult low amounts are • Tradeoff
• Lengthy • Issues with the • Huge very low & between
Challenges process- high terms of credit competition- customer returns and
response & offered. mainly loyalty also competition
conversion established not depending on
time vendors in this guaranteed. the scale of
space contract
 Analysis

Alternatives Available- Ansoff Matrix

se ?
h o o 2
to c

New
o ne Market Development
i ch Expanding the customer Diversification
Wh base - new clients under
different segments
Markets

We have first compared

1 3 Options 1 and 2; and then
delved deeper into various
Existing

Market Penetration Product Development other alternatives given in

Maintaining the Status Extending the product the case
Quo- Sub vendor with two portfolio- upsell/cross-sell
main customers to existing clientele

Existing New
p hy
4 gra Services
eo
G
 Analysis
Analysis- 1/2
Option 1- Maintaining the
Status Quo
• Less effort in bidding
and tender process- easy
Pros repeat and regular sales
• Less investments
• 87% dependency on just
two accounts- very high
Cons risk
• Stagnant growth- low
scope for upsell
• Low profit margins- sub
vendor
Aligning with the Growth objective of the company, we suggest Increasing the Customer Base
Option 2- Increasing
Customer Base
• Access to new markets-
more market share
• More growth opportunities-
chance to become a vendor
• More revenue
• Higher investment
requirement
• Limited resources
• Establishing new client
relationships

Analysis- 2/2
Targeting Type A & B
Need to start cust. Manuf.
Facility; frequent
Investment upgrading; employee
Requirement hiring; quality control labs
Company has outstanding
Resource experience in this
Availability & category.
Increased need for
Internal Capability customization
Direct reaching out via
trade shows, cold calling,
Marketing Strategy etc- establishing trust
(quality prototypes) is key.
Once relationship
Level of established, retention is
easier- hence, low to
Competition moderate competition
Very formal and lengthy
Buying Process buying process- many
influencers & gatekeepers
Analysis
Targeting Type C & D
High marketing expenses-
approx. 15% of revenue for 1st
three years
Existing relations of utmost
importance & easy credit
terms are demanded-
company offers lenient credit
policy
Heavy marketing activities to
tap these segments-
established connections are
more significant
High competition with
several vendors available as
alternatives
Unorganized process- with
cases of straight rebuy mostly
from existing vendors
Targeting PSUs Overseas Expansion
Process design; investing
in maf. Equipment; Substantial investments
workforce recruitment; in infrastructure
quality certifications
Company already sub- Companies providing
vendors to vendors of better after-sale services
Indian Railway, hence high and competitive pricing
chances of becoming in more demand- in line
direct vendors with FE’s USPs
Participation in tenders &
expanding online presence Attractive credit policies
for transparent bidding & competitive pricing
process
All the vendors
Low to moderate- mainly
participating the tender
Chinese firms are strong
become competitors-
moderate to high
competitors
Tedious process with red
-
tape

Recommendations
Recommendations Explanation
• Given the standard product
requirement and inclination
for lower prices, online
portals can become as easy
source of reaching to this
Leveraging online portals segment
Creating profiles on sites
to tap type C & D •
customers like- IndiaMART etc also help
in brand building- more
awareness, more sales
• Better sources of continuous
sales
• Once relation is established,
it is easier to retain this
Channelize revenue from segment.
• The transaction amount
new sources to
involved is also- high
developing infra for
revenue potential
tapping Type A customers • The new facilities can also
be used for other customer
groups.
Recommendations
Feasibility Priority
Yes
• Already the company has an 1
online presence
• Company is in a good • To be implemented in the
position to extend lenient short run
credit terms & discounts-
positive working capital of
110166.9 (projected)
Yes
• The company already has
outstanding experience in 2
this segment
• To be implemented in the
• The company has
medium to long run
capabilities to offer high
levels of customization
• Positive incremental
revenue
 Recommendations

Cost-Benefit Analysis
Estimating the Cost & Revenue of
targeting an additional Type A Incremental Cost/Per Customer
customer
Cost in Prospecting Type A customers 1000
Cost of Custom Manf. Facility 50000
Additional Operator's Cost 4000
Quality Control Lab 20000
Depreciation of QCl 4000
Capacity Enhancement Cost 75000
154000

Incremental Revenue/Per Customer

Incremental Manf. 191520
Revenue/Unit 3.359577778
Incremental Revenue (Type A) 159647.136

Incremental Revenue (Type B,C, & D) 20754.12768

180401.3
Revenue less Cost 26401.26 Profitable
Lysol
B2B Marketing Dilemma
 Analysis for RB (Lysol)

Lysol- Portfolio

Lysol

Disinfectant Cleaners Hand Soap

• Lysol Disinfectant Spray
• Lysol Disinfecting Wipes • Lysol Power & Free • Lysol No Touch Hand
• Lysol Concentrate • Lysol All-Purpose Cleaner Soap System
Disinfectant • Lysol Multi-Surface Cleaner • Lysol Touch of Foam
Pourable Hand Wash
• Lysol Power Kitchen Cleaner
• Lysol Bathroom Cleaner
• Lysol Toilet Bowl Cleaner
• Lysol Mold & Mildew Remover
 Analysis for RB (Lysol)

BUYER PERSONA
Supermarkets/ Educational
Transport industry like
Retail chains Institutions like Hospitals/ Medical clinics
Railway Stations/Airports
like Big Bazaar schools/hostels
• Formal process with established procurement • Supplies department • Formal Process for govt hospitals
• Cleaning Department initiate
policies initiate the process • Estimating and calculating
Buying Process • Competitive bidding process • May or may not call
the process
requirements
• May or may not call for RFPs
• Tenders documents uploaded online for RFPs • Supplier selection
• Bulk purchase from the
• Vendor approval and assessment • Bulk purchase from • Placing the order using order form or
manufacturers in case of
• Levy of liquidated damages for delay in the manufacturers requisition form
stand-alone or small schools
supply • Receiving the supplies

• Increased awareness and need

Opportunities • Indian railways purchase their goods &
supplies majorly from large private industry
• Easy customer
retention process
of sanitization in the • Increased need of disinfectant and
educational institutes cleaning products
(60%)
• low involvement purchase

• Winning a new account is difficult

• Strict procurement policies
• Established relationship towards only
Challenges • Levy of liquidated damages for delay in
supply
• Long-term established
relationship with other
• High brand switching cost,
retention required for long-
health & wellness companies
• Poor penetration into the rural markets
• Joint inspection in case of rejections & brands term customer base
for govt hospitals
recoveries.

Recommendations
Retaining the existing niche customer base
is important as the firm understands them
thoroughly, hence can become an
undisputable leader. It helps in making their
marketing efforts easier by defining exactly
what they do & distinguishing them from the
competition
Improve online presence and visibility by
collaborating with relevant influencers.
Robust educational content and carefully
targeted offers can drive leads to closer and
closer engagements, eventually bringing
qualified leads straight to them.
Analysis for RB (Lysol)
Increasing the customer base: By using
content marketing, RB can build a brand
with a widespread reputation for specialty in
their area even among audiences that
haven’t worked with them directly (Referral
marketing). This brand recognition can lead
to referrals and new business.
Co-market or cross-market with
complementing brands: By co-marketing
initiatives in conjunction with a like-minded
brand, they can help drive more attention,
leads, traffic, and sales for both companies.
For example, advertising through rural
newspapers to increase rural penetration
THANK YOU!