PRESENTATION ON MARKET POTENTIAL OF LOW VOLTAGE SWITCH GEARS IN RAJASTHAN [APRIL 2004-JULY 2004]

Facilitated By Mr.. S. Sanyal Mr.M.P.Jindal Mr.Vishal Nerurkar Mr. Vikas Malhi

Presented By. Japneet Singh Lokesh Doraya Manish Patidar1

WHAT ARE LVSWGRS??

DISTRIBUTION *ACB *SFU *CONTACTORS *CONTROL RELAYS *MINI COTACTORS

PROTECTION

SWITCHING

*MCCB *LOAD BREAK SWITCHES *THERMALOVER LOAD RELAYS *SOFT STARTERS *STARTERS *RCCB *ISOLATOR

*MCB *DISTRIBUTION BOARDS

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COMPANY PROFILE24th Dec 1949- Hindustan Electric Company Limited Was Incorporated 1965- Name Changed To Hindustan Brown Boveri Limited 1989- Name Changed To Asea Brown Boveri Limited Due To Amalgamation of Asea Limited With HBB 2003- Name Changed To ABB Limited 1994- ABB Started LVSWGRS Manufacturing in INDIA at Bangalore Core Business Area --Power Technologies Automation Technologies Building Systems3

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PROJECT OBJECTIVE

To forecast the sales revenue of ABB in Rajasthan for Low voltage switch gears for next 3 years. To suggest a marketing strategy to ABB for increasing revenue of LVSWGRS from 34 Lakhs to 3 Crores within next 3 years.

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SUPPLY CHAIN- LVSWGR

PANEL BUILDER C O N S U L T A N T

SUPPLIER

D E A L E R

OEM

INDUSTRY

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SURVEY METHODOLGY Designing a tool for conducting the survey: Data Collection: Phase I: Jaipur, Jodhpur, Udaipur, Kota. Phase II: Chittorgarh, Bhilwara and Alwar Questionnaire for consumer Questionnaire for dealers Final analysis: Suggestions:7

RAJASTHAN MARKET SCENARIO

Total LVSWGR Market No. of Delaers covered No. Of customers visited Average market growth

27.82 Cr. 34 100 18%

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RAJASTHAN MARKET AREA-WISE BREAKUP Crores1 4 2% 5 2% 4 2% 0 1 0 1% 9 8 1% 5 1% 2 6 4 5 .7 4 1% 0 3 5 .2 8 % 3 3 1% 0 1% 2 1% 6 2% 0 1 2 1 .8 1 2 P E E TM R E RS N A K T GO T R WH 2% 8

2 1 0J IP R A U UA U D IP R KT OA B IL A A H WR J DP R OH U C IT O R H TR AW R L A

4 % 1 0 %

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PRODUCT SEGMENTWISE BREAKUPBREAKERS 20%

LPD 17%

Whole RajasthanCONTROL GEARS 39%

SWITCHES 24%

ABB

LPD 28%

BREAKERS 39%

CONTROL GEARS 25%

SWITCHES 8%

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L&TBREAKERS 21%

SchneiderLPD 9% BREAKERS 31% CONTROL GEARS 46%

LPD 17%

CONTROL GEARS 32%

SWITCHES 30%

SWITCHES 14%

SiemensLPD 10% BREAKERS 20%

BCH

CONTROL GEARS 50%

SWITCHES 20%

CONTROL GEARS 100%

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MARKET SHARE OF MAJOR PLAYERS1200 1100 1000 900 800 700 600 500 400 300 200 100 0L&T SCHNEIDER BCH SEIMENS MDS GE HAVELLS JYOTI ABB OTHERS

Lakhs1058.25

630.5

340 221.25 133.75 110.5 99.7 95 34 59

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RANKING GIVEN BY CUSTOMERS TO ATTRIBUTES:

4.5 4.45 4.4 4.35 4.3 4.25 4.2 4.15

4.45 4.4 4.31 4.27

P R OD U C T

S E R V IC E

P A C K A GIN G

B RA ND13

5 4.8 4.6 4.4 4.2 4 3.8 3.6 4.91RELIABILITY

4.77

SAFETY

4.54

FEATURES

TECHNICAL DOCUMENTATION

PRODUCT ATTRIBUTES

4.2

4.17

PRICE

COMPLETE RANGE14

4.13

SERVICE ATTRIBUTES

4.8 4.6 4.4 4.2 4 3.8 3.6 3.4

4 .6 5

4 .5 5

4 .5

3 .9

R E S P ON S E TIM E R E P L A C E M E N TSS TOC K A V A IL B IL ITY IN S TA L L A TION GU ID A N C E15

BRAND ATTRIBUTES

4 .6 4 .5 4 .4 4 .3 4 .2 4 .1 4 3 .9 3 .8

4 .4 8

4 .0 6

B R AN D N AM E

D E AL E R R E P U T AT IO N16

PACKAGING ATTRIBUTES

4 .3 8 4 .3 6 4 .3 4 4 .3 2 4 .3 4 .2 8 4 .2 6 4 .2 4 4 .2 2 4 .2

4 .3 6

4 .2 6

INS TA L L A TIO N L EA FL ET EA L S & CERTIFICA TIO NS S17

CUSTOMERS PERCEPTION ABOUT ABBs ATTRIBUTESABB 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0QUALITY PRICE FINISHING MAINTENANCE DOWN TIME TECHNOLOGY INSTRUCTION LEAFLET AVALIABILITY TRAINING

AVG. 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0

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SUPPLIERS POLICIESS U P P L IE R S C H N E ID ES E IM E N R S REVENUE 630.5 LAKH 15 6 221.25 LAKH 7 2 0 30 15 to 25% 2.5% BCH 340 LAKH 11 4 0 70 L&T ABB

DEALERS SALES PERSON 2 SERVICE CENTER 60 CREDIT PERIOD IN DAYS D ISC O U N T 20% to 38% OFFERED 3% PROFIT M ARGIN 10 to 20 2 DELIVRY PERIOD IN DAYS

1058 34LAKH LAKH 7 10 5 1 2 45 0 45

`2 0% to 15 to 20% to 30% 45% 30% 3% 3% to 4% to 4% 5% 0 to 25 10 3 to 4 20 to 30

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INCENTIVES & PROMOTIONS U P P L I E R S C H N E I D E RS E I M E N S B C H L & T A BB C ash C ash Q uantity C ash IN C EN T IV E C ash D i s c o u n t , D i s c o u n t , D i s c o u n tD i s c o u n D i s c o u , t T urnover T urnover T urnover nt, D is c o u n t ( 2 %D is c o u n t, D is c o u n t ) T urnov P r o d u c t F o c u (s 3 % ) er D iscount D iscou nt S e m i n a r , S e m i n a r ,I n p l a n t P R O M O T IO Sem inar, A dvT s, G ifts D irect G i f t s S e m i n a r s- ,- - - - - - N M ailing, Sem inars, -G ifts, G ifts Product D irect D em onstratio M ailers n ** O nly in G ifts Lunch C O N T R I B U TA d v t . a n d G ifts 50% new spaper 100% and -------IO N A dvt. 50% G ifts50% ---

** L&T provide 1% of turnover, for advertising expenses20

ANALYSIS

DRIVERS INDEX GRAPH STRENGTH WEAKNESS OF DIFFRENT PLAYERS SERVICE QUALITY GAP ANALYSIS ACTION PLAN

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DRIVERS INDEX GRAPH

L & TS IE M EA NB SBB C H C H N E ID E R S 6 5 4 3 2 1 0Q U A L IT Y P R IC E A W A R E N AE S SA IL A B IL IT R M V CY22

STRENGTH WEAKNESS SCHNEIDER STRENGTHS AGGRESSIVE PROMOTION BRAND PUSH EXCELLENT AFTER SALES SERVICE AVAILABILITY STRONG MARKETING TEAM TECHNOLOGICALLY SOUND PRICING STRATEGY STRATEGIC ALIANCES. WEAKNESS DEALERS DILEMMA23

STRENGTH WEAKNESS L&T STRENGTHS AGGRESSIVE PROMOTION. BRAND PUSH. EXCELLENT AFTER SALES SERVICE. AVAILABILITY. PRICING STRATEGY. QUALITY. AWARENESS. WEAKNESS DUPLICACY24

STRENGTH WEAKNESS ABB STRENGTHS QUALITY. TECHNOLOGY. COMLETE RANGE WEAKNESS LOW AWARENESS PRICING DOUBTFUL BRAND POSITIONING DELIVERY WEAK MARKETING TEAM POOR AFTER SALES SERVICE NO BRAND PROMOTION SCHEMES

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STRENGTH WEAKNESS SEIMENS STRENGTHS GOOD BRAND EQUITY GOOD BRAND AWARENESS GOOD COMMUNICATION WITH CUSTOMERS THROUGH DIRECT MAILERS AND SEMINARS STRATIGIC ALLIANCES WEAKNESS POOR DEALER NETWORK POOR AFTER SALES SERVICE

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STRENGTH WEAKNESS BCH STRENGTHS GOOD DEALER NETWORK FAST DELIVERY. GOOD AFTER SALES SERVICE SPECIFED INDUSTRY DEMNAD. COMPETITIVE PRODUCTS WEAKNESS LIMITED PRODUCT RANGE. REACH IN LIMITED INDUSTRIES POOR QUALITY PRODUCTS27

Service Quality Gap ModelGAP1: Between what customer expects from the service and what the management perceives of customers' expectation. GAP 2: Between, management perceptions of consumer expectations and translation of perception into service- quality specification GAP 3: Between, translation of perceptions into service-quality specifications and service delivered to consumer. GAP 4: Between service delivered and the external communication to the consumer. GAP 5: Between perceived service and the expected service.28

Word of Mouth Communication

Personal Needs Expected Service

Past Experience

GAP 1 Availability Quick response After sales service Quick delivery Competitive pricing

GAP 5 No Gap due to continuous competition Perceived service Consumer Marketer Service Delivery External Communications to consumers GAP 4 Prompt delivery to the consumer.

GAP 3 Generation of customized products

Translation of Perceptions into service-quality specifications GAP 2 Technical and Financial feasibility

Management Perception Of Consumer Expectations

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AIM 3 CRORESPLAC E C U R R EN T SH A R E JA IPU R U D A IP U R K O TA B H ILW A R A JO D H PU R C H IT T O R R A LW AR TO TA L 3.70 12 8.30 8 2 ** * 34 M AR KE T SH A R E 43% 17% 11% 12% 10% 3.5% 3.5% 100% AB B 2004 3 0 .1 0 11.9 7.7 8.4 7 2.45 2.45 70 A B B 2005 62.35 24.65 15.95 1 7 .4 1 4 .5 5.075 5.075 145 A B B 2006 129 51 33 36 30 1 0 .5 1 0 .5 300

All figures in Lakhs. ** Chittor is procuring from Udaipur. * Alwar is procuring from Delhi.

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AIM 5 CRORESPLACE JAIPUR UDAIPUR KOTA BHILWARA JODHPUR CHITTORR ALWAR TOTAL CURRENT SHARE 3.70 12 8.30 8 2 ** * 34 MARKET SHARE 43% 17% 11% 12% 10% 3.5% 3.5% 100% ABB 2004 35.80 14.10 9.15 10 8.35 2.95 2.95 83.30 ABB 2005 87.70 34.70 22.40 24.50 20.5 7.10 7.10 204.08 ABB 2006 215 85 55 60 50 17.5 17.5 500

All figures in Lakhs. ** Chittor is procuring from Udaipur.

* Alwar is procuring from Delhi. 31

SUGGESTIONS: APPOINT SALES PERSONS ORGANISE SEMINARS SEND DIRECT MAILERS OPEN A SERVICE CENTRE PRODUCT AVAILABILITY AND PROMPT PRODUCT DELIVERY SUPPORT THE DEALER DEALER SELECTION PARAMETERS SUPPLY CHAIN COMMUNICATION ADVERTISEMENT CUSTOMISATION EMBOSSED SPECIFICATION SEAL TARGETTING ALLIANCES SPARES STOCK CRM FEEDBACK FORM32

EXPENSE DETAILSREGION/ HEADS SALARY Jaipur Jodhpur Udaipur Chittor garh Bhilwara Kota Alwar Rajasthan

180,000

180,000

3,60,000

SEMINARS a) Common b) In-House DIRECT MAILERS ADV.-*JOURNLS Total

70,000 20,000

70,000 20,000

70,000 10,000 50,000

70,000 30,000

70,000

70,000

4,20,000 1,30,000 5,50,000 10,000

20,000

90,000

270,000

80,000

50,000

280,000

70,000

70,000

9,40,000

* JournalsIndustrial Product Finder, Electrical India 33

SUSTAINABILITY PRESCRIPTION Sync with Market Growth Regular Market Promotion Confidence building measures (C BM) with dealers Common payroll employee Stalling Threat From New Entrants. Financial backing of the entrant. Technology. Marketing efforts deployed. Brand image.34

AREAWISE INFORMATION ALWAR Total Market As Per Dealers Is 75 Lakh While Total Market Perceived by Dealers 1 Crore. The Region Is Expected to Grow With 10% Growth Rate Customers Covered Are Using 145.85 Lakh LVSWGR Products No. Of Customers Covered--17 No. Of Dealers Covered--235

SUPPLIERS POLICIESSUPPLIER REVENUE DEALERS SALES PERSON SERVICE CENTER CREDIT PERIOD IN DAYS DISCOUNT OFFERED PROFIT MARGIN DELIVERY PERIOD IN DAYS FREQUENCY OF VISIT RESPONSE TIME TO COMPLAINTS SCHNEIDER 12.5 LAKH 1 30 Not Disclosed Not Disclosed 7 YEARLY OK OK SIEMENS 2.5 LAKH 30 Not Disclosed Not Disclosed 7 MDS 3.75 LAKH 1 15 Not Disclosed Not Disclosed 7 YEARLY OK L&T 50 LAKH 1 60 20% 5% 3 15 DAYS SOON36

SUGGESTIONS

Company should appoint a Dealer in this region. And do their business along wi the dealers. Product availability should be good. ABB shouldorganise technical seminars and after seminar, company Engineer should be in touch with these potential customers. More emphasis must be given to the new projects. As replacement is one to one. Reach toInfluencers' must be increased by regular visit by company Engineer and dealers. Visits must be there even when there is no requirement to brief up the indust engineers. Awareness about the products must be increased.

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CHITTORGARH

Total market as per dealers is 80 LAKH. While total market perceived by dealers 1 crore. The region is expected to grow with 15% growth rate. Customers Covered Are Using 84.2 Lakh LVSWGR Products No. Of Customers Covered--7 No. Of Dealers Covered--138

SUPPLIERS POLICIESSUPPLIER L&T HAVELLS 16 LAKH 1 -----CASH UP TO 30% 5% AS PER REQUIREMENT MONTHLY OK39

REVENUE 64 LAKH DEALERS 1 SALES PERSON --SERVICE CENTER --CREDIT PERIOD IN DAYS CASH DISCOUNT OFFERED UP TO 35% PROFIT MARGIN 5% DELIVERY PERIOD IN 7 TO 10 DAYS FREQUENCY OF VISIT 15 DAYS RESPONSE TIME TO IMMEDIATE COMPLAINTS

SUGGESTIONS

R e g u la r c o n ta c t w ith c u sto m er is m u st. It c a n b e d o n e th ro u g h o S e m in a rs. o D ire c t m a ile rs. o P la n t v isit. ld C o m p a n y S h oourg a n ise se m in a r to o B rie f a b o u t p ro d u c t ra n g e . o P ro d u c ts te c h n ic a l d e ta ils. o T o h ig h lig h t sp e c ia l fe a tu re s o f A B B p ro d u c t a s c o m p a re d p la ye rs. C o m p a n y sh o u ld a p p o in t a se rv ice e n g in e e r in th is re a so n to p r c u sto m e r n e e d s. A fte r sa le s s e rv ic e sh o u ld b e v e ry g o o d . a h r a tr C o . sh o u ld a p p o in t a d eC leittoG a rh.40

BHILWARA Total market as per dealers is 299 LAKH. While total market perceived by dealers 333 LAKH The region is expected to grow with 25% growth rate. Customers Covered Are Using 84.2 Lakh LVSWGR Products No. Of Customers Covered--17 No. Of Dealers Covered--5

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SUPPLIERS POLICIESSUPPLIER REVENUE DEALERS SALES PERSON SERVICE CENTER CREDIT PERIOD IN DAYS DISCOUNT OFFERED PROFIT MARGIN DELIVERY PERIOD IN DAYS FREQUENCY OF VISIT RESPONSE TIME TO COMPLAINTS SCHNEIDER SIEMENS 26 LAKH 1 --CASH 32% * 10 TO 20 MONTHLY IMMEDIATE 40LAKH 1 ---CASH 32% * 20 TO 30 MDS 70 LAKH 1 ---CASH 37% * 15 L&T 100 LAKH 1 ----CASH 45% 5% 3 TO 4 G.E 15 LAKH 1 ----CASH * * 20 ABB 8 LAKH 1 ----45 25% 5% 45 MONT HLY OK42

MONTHL MONTHL 15 DAYS MONTH Y Y LY IMMEDIA IMMEDI IMMEDIA OK TE ATE TE

SUGGESTIONS

Company should provide full support to dealer in terms of discount, delivery sales service. The disputes with dealers must be sorted out and commitments company persons should be fulfilled. Product availability should be good. organise technical seminars and after seminar, company En Company should should be in touch with these potential customers. Follow up should be good. Contactors and Relays, technical staff must look after this. Problem in Reach toinfluencers must be increased by regular visit by company Engine dealers. . After sales service and replacement should be prompt

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