A PROJECT REPORT ON :EXPLORING CORPORATE GIFTING POTENTIALOF BAJAJ HOME APPLIANCES IN OKHLA INDUSTRIAL AREA a report submitted towards the partial fulfillment of the requirement of the two years full-time Post Graduation Diploma in Management. Submitted by Yadram Sharma (2008-10) Post Graduate Diploma in Management Roll.No.:2k81/m/38 ASIA PACIFIC INSTITUTE OF MANAGEMENT 3,4-Institutional Area Jasola, New Delhi 1
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A PROJECT REPORT ON
:E X PL OR I N G C OR POR A T E GI FT IN G POT E N T IA L OF B A JA J
HOME A PPL IA N C ES I N OKHL A I ND U S T RI A L AR E A
a rep or t su b mi t t ed tow ard s th e par t ia l fu l f i l lmen t o f th e
req u iremen t o f th e tw o years fu l l - t ime Pos t Grad u at ion D ip loma
in Man agemen t .
S u b mi t t ed b y
Yad ram S h arma
(2008 -10 )
Pos t Grad u ate D ip loma in Man agemen t
R o l l .N o . :2k 81 /m/38
A SI A PA CI FI C I NS T I TU T E OF MA NA GE ME N T
3,4 - In s t i tu t ion a l A rea Jas o la , New D e lh i
1
A C KN OWL E D GE ME N T
"Success is any endeavor, calls for cooperation and guidance from seniors &
colleagues". This was aptly bought to me while undergoing my research work for the
project. It is impossible to thank the people who have helped me prepare my project, but I
would like to take the opportunity to express my profound gratitude and indebtedness to
the following.
Last but not the least the cooperation and my deep gratitude to Mr. Puneeet Saxena
(AREA MANAGER) & all of my friends for providing me all implicit and explicit
support during the project.
However, the describable contents source of inspiration and supervision at every stage of
the study was my project guide, Ms. Pratima Sharma. It was an honour to have worked
under her.
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PREFACE
Someone has rightly said that practical knowledge is far better than classroom
teaching. During this project, I fully realized this and I came to know about how
does a person of concern Dept.of Company choose among a varied range of
products available to him.
The subject of my study is Marketing Research on Bajaj home appliances in Okhla
industrial area.
The report contains first of all brief introduction about Bajaj electrical limited, then
comes to introduction regarding "Exploring corporate gifting potential" & market
position of Bajaj home appliances. Finally there comes the data presentation and
analysis in the end of my report.
I also put forward some suggestions hoping that they will help in Bajaj electricals
limited to move a step forward to being the very best.
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INDEX
1. Chapter 1
Executive summary of the project
2. Chapter 2
Profile of the company
Introduction
History
Product profile
Market share
Organizational chart
3. Chapter 3
Research Methodology
Objectives of the study
Scope of the study
Type of data
Data collection
Statistical tools used
Limitations of the study
4. Chapter 4
Finding & Analysis
SWOT Analysis
5. Chapter 5
Conclusion & Suggestions
6. Annexure
Bibliography
Questionnaire
4
CHAPTER 1
EXECUTIVE SUMMARY
OF
THE PROJECT
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EXECUTIVE SUMMARY
Companies offering product or services will need to understand this new face of the
company/institute. The changing demographic profile of the population in terms of
education, income, size of the family and so on, are important but what will be more
substantive in days to come will be the psychographics of the organizations how they
feel , think or behave. Marketers will have to constantly monitor and understand the
underlying psycho graphics to map their respective industries are moving and decide
what needs to be done, by way of adding value that motivates organizations to
buy the company's products and influence the future industry structure.
Keeping in view such stiff competition, it’s a miniscule effort from my
side under which I have tried to fulfill the following objectives:
1) To find out what does the purchaser of the home think about Bajaj electrical limited.
2) To study their preference for the bajaj home appliances.
3) To study the market opportunities of Bajaj electrical limited to help in the
formulation of marketing strategy.
4) To suggest some measures to make Bajaj electrical limited more competitive.
5) To study the purchasers satisfaction level in regards to the strength of the Bajaj
electrical limited.
6) To study the market prospects of Bajaj electrical limited.
The findings of the research lead to following conclusion
• Some of the companies mainly prefer to purchase Bajaj electrical items than to
others
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• Dealers are at the View, that the company needs to have some incentive schemes to
promote more sales because philips and Usha are giving tough competition to
Bajaj Electrical Limited.
• Most of the companies were the opinion that the company should adopt better
methods for promoting their brand due to the entrance of the company's
brand.
MAJOR FACTORS INFLUENCING
PURCHASING BEHAVIOUR:
The major factors that influence the purchasing behavior are:
Product, Price
Place
Promotion mix
PRICING AND MARKET SHARE:
Pricing is undoubtedly one of the most important decision areas of marketing. Price and
sales volume together decide the revenue of any business. As the sales volume in
itself is dependent on price, pricing really becomes the key to the revenue of the
business. Pricing becomes the vital decision area on account of certain other factors
besides its crucial role in bringing revenues and profits to the business.
PRICING METHOD/PRICING STRATEGIES:
There are several methods of pricing: Cost based pricing
Demand based pricing
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Competition based pricing
Product line oriented pricing
Differentiated pricing
MARKET SHARE:
Market share constitutes the total market captured by Bajaj electrical limited in the whole
consumer durable industry. During my survey I found out that the market share in
different areas are different because of different geographical regions, climate and
number of different companies.
The market share is determined by the help of total consumption of the particular
area and the consumption of particular company's product in that area. The market
share of Bajaj electrical limited is growing with every financial year.
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CHAPTER –2
PROFILE OF THE COMPANY
9
INTRODUCTION
The bajaj group of India owes immense gratitude to their founding father whose
vision and dedication over the years has greatly helped to build a business house that
can set standard in Indian industry.
Jamnalal Bajaj was the founding father of the Bajaj Group. The adopted 'fifth' son of
Mahatma Gandhi, and the 'merchant prince' who held the wealth he created in trust
for the people of his country, Trust - a simple word that contains a whole
philosophy handed down by Jamnalal Bajaj to his successors. He valued
honesty over profit.
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kamalnayan Bajaj, elder son of Jamnalal Bajaj, followed footsteps of his illustrious
father and consolidated the Bajaj foundation. With characteristic foresight and
pragmatic; vision, he launched a steady diversification programme which gave the
current name "Bajaj" both its shape and size. His unique management style created a work
culture that matched well with the national spirit he had inherited.
Ramkrishna Bajaj took over the reins of the "Bajaj group" in 1972 after Kamalnayan Bajaj
and steered the Group from strength to strength for over 22 years. He had also actively
participated in the freedom struggle of the country. In post independent India, he had led
the youth movement.
Shekhar Bajaj, Chairman & Managing Director of Bajaj Electricals Ltd., started his career
with Bajaj Sevashrarn after which he worked at Bajaj International, the groups export
company. Mr. Shekhar Bajaj joined Bajaj Electricals in 1980, became the Managing
Director in 1987 and took over as the Chairman and Managing Director in 1994. .
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HISTORY
People don't just bring their brains to work: they also bring their hearts and soul. They
want to feel passionate about what they are doing and be a part of whatever is great. We
at Bajaj Electricals Limited, recognize this truism and seek out and strike a dialogue
straight with the hearts and souls) of our employees. Here is a quote from Mr. Shekhar
Bajaj, our Chairman and Managing Director -
"Every individual has the potential to perform if he or she gets proper motivation, the
right opportunity and the freedom to work. In the long run success is achieved
when ordinary people perform extraordinarily. It is important to keep an open mind
rather than drawing preconceived impressions about people. More often that not,
such impressions will be proven wrong."
Faster, Higher, Stronger - is our maxim, our way of individual and organizational
performance. This is how we managed a successful business turnaround in Bajaj
Electricals Ltd - with and through each one of our employees. And not only our excellent
brand of products, our people provide an excellent competitive advantage to us.
We are looking at a collaboration for our luminaire business through a licensing agreement
as there is a need for technologically superior products which are state-of-the art. We are
in advanced discussions. I cannot disclose anything further at this stage," Bajaj
Electricals chief operating officer and president R Ramakrishnan said.
12
The luminaire business is one of the five special business units (SBUs) of the
company. The others are appliances, pans, lighting and the engineering business. Bajaj
Electrical luminaires find applications in the engineering, power, steel, cement, fertilizer,
chemical and petrochemical sectors.
Earlier, Bajaj Electricals had entered into a licensing agreement with Morphy Richards of
the UK for its irons. This tie-up also entails a technology transfer.
The company is targeting revenues of Rs 1,500 crore by the year 2009-10.
"The biggest contributor to this will be the engineering business. Till recently,
we were only into the manufacture of power transmission towers. Now, we will be
installing them too," Mr Ramakrishnan added. The engineering and projects business is
also the fastest growing business.
This business has an order book of over Rs 150 crore and has grown by over 85%,
senior company executives said. The company clocked net sales of Rs 505.26 crore in the
last fiscal and is expected to add around 25% to its topline this fiscal, he said. The
company which had been facing tough times a few years back has bounced back after the
implementation of a restructuring exercise.
This entailed the reorganisation in to five SBUs, brand building, and a growth of
revenues.
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Last year, the company also came out with a rights issue at premium of Rs 15 per share.
Further, the company also of out of the die-casting business by giving a VRS at the plant,
selling the development rights of the land and entering into a non-compete clause with a
competitor.
Revamp helps Bajaj Electricals Turn Around
Hindu Business line
January 31, 2005
K. Giriprakash
V. K. Varadarajan
Bangalore Jan 30, 2005: BAJAJ Electricals has restructured its entire operations,
including shutting down some of its loss-making ventures, as part of its plans to
turnaround the company.
Bajaj Electricals' President and Chief Operating Officer, Mr R. Ramakrishnan, told
Business Line that the restructuring has helped the company to turnaround and now it
expects to double its revenues to about Rs 1,000 crore within three years. The company
hopes to end the current fiscal with a revenue of around Rs 730 crore, an increase of 20
per cent over fiscal 2008-09.
Mr Ramakrishnan said it had roped in Accenture Consulting to chart out a
turnaround for the company. As per the new plan, Bajaj Electricals dropped its matrix
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structure for its organisation in favour of separate business units for each of its
businesses.
It now has five separate business units - engineering and projects, luminaire, appliances,
fans and lighting. "Each of these units compete as separate businesses with its,
competitors," Mr Ramakrishnan said. The company also got rid of unviable businesses.
For example, it shut down its diecast operations and offered VRS to 180 people. It also
sold surplus land of the unit.
He said the company also went in for financial restructuring by swapping high cost
funds with low cost long-term debt. The banks too have lowered interest cost and
increased the moratorium for another two years.
The company plans to invest about Rs 20 crore, spread over the next fiscal, to double
the existing capacity in its engineering unit to execute its Rs 160 crore worth of fresh
order from Powergrid Corporation for erection and commissioning of power transmission
tower.
Mr Ramakrishnan said the engineering unit, which registered a growth of 88 per cent over
the last fiscal, is expected to outpace other business units. The company expects about 25
per cent of its revenues to come from its engineering business, he said.
15
Mr Ramakrishnan said with the Power Grid according thrill the status of approved EPC
contractors, it expects bigger orders from the power company. He pointed out that with an
estimated investment proposal of Rs 75,000 crore by Powergrid Corporation, there
was a huge opportunity for the company.
Mr.Ramakrishnan said the company had entered into a licensing arrangement with
Trilux, a leading European luminaries brand and a market leader in lighting
in Germany. The tie-up, though is aimed to market the products to premium
segments in the country, could lead to manufacturing Trilux products in the long term.
Bajaj's own products to provide full spectrum of lighting products, he said. Similarly,
Bajaj's tie-up with UK's leading small appliances brand Morphy Richards had helped it
to position itself in the premium end of the market.
Mr Ramakrishnan said Bajaj Electricals has a market share of between 15 per cent and 20
per cent in the appliances segment, 20 per cent in luminaries and 10 per cent in
lighting. The company has also been able to take on the unorganized sector by
offering competitive pricing of its products in the lower end. "Our China sourcing
strategy has helped us to buy from the world's best without compromising on the quality
of the products,"
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Bajaj Electricals Keeps on Shining More...
Bajaj Electricals Limited (BEL) is a part of the "Bajaj Group" of India who are in
the business of s teel , sugar , two wheelers & three wheelers. Bajaj
Electricals is well established in their range of products such as lamps & tube
lights, luminaires, small household appliances, ceiling fans & table fans and turnkey
engineering services. The company has been in existence for the last 60 years and
has steadily grown and expanded its business both in domestic and international
markets.
Bajaj Electricals has 20 branch offices and 4 regional offices spread in different
parts of the country besides being supported by a chain of about 600
distributors, 2500 authorised dealers, over 60,000 retail outlets and over 200
service franchisees
BEL today has five major business units comprising of lighting, luminaires,
electric fans, home appliances, turnkey engineering projects. BEL's export
activities are well supported through its International division. The Company has
recently forayed into electric power generation through wind energy in its quest to
reduce the depletion of fossil fuels and preserved the environment.
Total Quality Management (TQM) has taken roots in some important business
processes of the Company. Few business units of the company have already received
ISO Certifications while the other BUs are on the anvil to obtain the same.
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PRESS NEWS
Times of India January 22, 2008
Bajaj Electricals has reported a 93.8 percent rise in its net profit for the third
quarter ended December 31, 2007 at Rs 4.75 crore as against Rs 2.45 crore in the
corresponding period of last fiscal. Revenues from operations during the quarter
were higher at Rs 170 crore as against Rs 126 crore i n the same period of 2007-08.
A leader sets an example for others to emulate, and hence must be a high-level
performer. He's also respected by subordinates and colleagues, alike. He must
embody honesty, integrity and trustworthiness.
A leader is knowledgeable and well read and must guide and empower his subordinates
to perform their best.
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. PRODUCT PROFILE
• Bajaj Storage Water Heater
Energy Efficient Horizontal
• 10 year guarantee on copper tank • 30% energy savings over ISI norms • 2 year comprehensive guarantee including heating element
• Available in 10 litre capacity
GX 10
• Powerful motor : 550 watts, 18000 rpm • 5 year guarantee on motor • 3 stainless steel jars • Unbreakable polycarbonate jar handles • Cord winder • Overload protector
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DX 5
• Multiple, adjustable temperature levels • Thermal fuse for additional safety • Pilot light for thermostat operation • Swivel cord outlet • Large Sole Plate
• Non stick coated sole plate
Cordless Kettle 1 Litre
• 1 Litre capacity • Cordless operation for easy serving and safety • Auto shut off • External water level indicator on both sides
• Self illuminating transparent switch
Aqua Naturale
Makes drinking water healthy and safe through seven stages of purification. It's a completely natural process. In fact, it's the only purifier that works without any resins. And without any electricity. What's more, it doesn't require a continuous flow of water supply.
The water that you drink is not only cleaned and sterilized but also made healthier through the addition of valuable minerals. Result: Healthy, refreshing water. Just as nature gives you.
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Coolest RC 2004 – Rotochill
Made up of an attractive, corrosion-free engineered, thermoplastic material for durable performance
• Latest state-of-the-art design • Sleek and all new ultra modern looks • Extra tough motor • Uniform water distribution
• Water level indicator
AX 4
• 4 brass burners with Stainless Steel body • High efficiency burners • Extra wide top accommodating large vessels • Available for LPG and PNG
40% companies said Philips home appliances are best, 30% prefer Bajaj ,20% prefer inalsa
whereas l0% said maharaja is best.
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4) What are the strengths of Bajaj home appliances?
TABLE-4
Strengths No. of Respondents Quality 45Look 30Price 15
GRAPHICAL REPRESENTATION:
45
30
15
01020304050
Quality Look Price No. of Respondents
Strengths
Strengths of Bajaj Home Appliances
Series1
INTERPRETATION:
45 companies said quality is the Bajaj strength, 30 companies said look is its strength whereas
15 said price as its strength.
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5) What is the marketing prospect of Bajaj home appliances?
Table –5
Marketing prospect of Bajaj Home
appliances
Percentage
Good 60%Average 30%Bad 10%
GRAPHICAL REPRESENTATION
Good60%
Average 30%
Bad 10%
Marketing prospect of Bajaj Home appliances
Good
Average
Bad
INTERPRETATION
60% of companies said good about marketing prospect of Bajaj home appliances, 30%
said it as average whereas 10% said it as bad.
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6) Are you satisfied with the margin you got by purchasing Bajaj home
appliances?
TABLE-6
Yes 70%No 30%
GRAPHICAL REPRESENTATION
Satisfaction Level
No30%
Yes70%
Yes
No
INTERPRETATION
70% of the companies are satisfied by the margin whereas 30% companies are not
satisfied by the margin. They want more margin on Bajaj home appliances.
45
7) How much percentage of companies prefer following a gifting brands?
TABLE – 8
Brands Percentage of customer Philips 30%Bajaj 25%Usha 25%Inalsa 10%Maharaja 10%
GRAPHICAL REPRESENTATION
Philips30%
Bajaj25%
Usha25%
inalsa10%
maharaja10%
Demand
Philips
Bajaj
Usha
inalsa
maharaja
INTERPRETATION
The above table shows that 30% of companies want to purchase Philips .25% of
companies want to purchase bajaj, 25% of companies want to purchase Usha &
10% of customers want to purchase maharaja&inalsa
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8) What are the reasons for switching companies from Bajaj electricals to other
electrical companies?
TABLE
Reasons No. of respondentsLarge delay in servicing 55Lack of marketing strategies 25
GRAPHICAL REPRESENTATION
55
25
0102030405060
Large delay in servicing
Lack of marketing strategies
No. of respondents
Reasons
Reasons for switching
Series1
INTERPRETATION
From the above table we conclude that major reasons for switching buyers to other brand
are large delay in servicing & lack of market strategies.
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9) How would you rank Bajaj electrical on a scale of 10?
TABLE
Rank 1 20Rank 2 45Rank 3 25
GRAPHICAL REPRESENTATION
20
45
25
01020304050
Rank 1 Rank 2 Rank 3 No. of respondents
Rank
Rank of Bajaj Electricals
Series1
INTERPRETATION
The above table shows that 45 respondents ranked Bajaj as second, 20 respondents
ranked Bajaj as first whereas 25 respondents ranked Bajaj as third.
10. Does Free gift (or coupon redeemable for a gift, including a discount coupon) enclosed in the package along with a product, influence you when you purchase your gifting items.
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Yes 80No 10Total 90
Ho: There is no significant difference b/t the preference when they offer free gift or not.
H1: Free gift have significantly more impact on preference of product then without gift
p=0.88
standard error =0.048
Z=(p-µ)/standard error =7.92
tested at 10% significance levelZ= 1.29
As value of Z fall in the rejection region, so we will accept H1this shows that the impact of free gift is more on the preference of product
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11.You prefer home appliances products in __________ packaging.
Favournon favour total
Small 58 32 90Large 32 58 90Total 90 90 180
Ho: There is no significant impact of packaging on preference of gifting product.
H1: Small packaging has significantly more impact on preference of gifting product then large.
Eij=(row*col)/N
x2=(fo-fe)2/fe=7.9055
tabulated value of X21..10=2.70
So, this falls in rejection region and therefore we accept H1therefore small packaging has significantly more impact on preferences of gifting product
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12. How much preference do you give to that co. who offers eco-friendly packaging’s (like paper packs instead of poly packs)?
Definitely will buy Will buy 58Undecided 32Will not buy Definitely will not buy Total 90
Ho: there is no significant difference in preference given to co. which offer Eco-Friendly packaging (µ=3)H1:there is significant difference in preference given to co. which offer Eco-Friendly packagings (µ<3)
X=2.0222
µ=3
standard error=0.0721
Z=(x-µ)/standard error =8.32
tested at 10% significance level
Z= 1.29
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As value of Z fall in the rejection region, so we will accept H1 hence we conclude that organization prefer to buy products from co. which offer Eco-Friendly packaging. 13.How satisfied are you with the packaging offered by the Bajaj electrical ltd.?
Very satisfied 16Somewhat satisfied 58Somewhat dissatisfied 16Dissatisfied Total 90
People do not give high importance to packaging only and there are other parameter also which have impact on the buying behavior of the purchasing department of any
organization.
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SWOT ANALYSIS
Strengths:
• Brand image
• Product quality
• Product awareness in the market.
• Dealers distributed widely across the country.
• Good will in the market.
• Older player in the market.
Weakness:
• Lack of market strategies.
• Lack of advertisement.
• Delay in servicing facility.
• Lesser promotion effort.
Opportunities:
• Take advantage of brand image of Bajaj electrical limited"
• Ability to convince the companies through market representation.
• Joint venture would increase database& product range.
• Increase their presence at dealer point.
• To use market leader strategies.
Threats:
• Presence of other competitors with good capture of market eg
Philips, Usha, inalsa.
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• Loyalty of consumers to other brands.
CHAPTER – 5
CONCLUSION & SUGGESTION
54
CONCLUSION
From the analysis following inferences can be drawn:
• Some of the companies mainly prefer to purchase Bajaj electrical items than to
others because they have been users of Bajaj company for the last 5-6 years.
Secondly because of background reputation of the company.
• Dealers are at the View, that the company needs to have some incentive schemes to
promote more sales because philips and Usha are giving tough competition to
Bajaj Electrical Limited.
• Most of the companies were the opinion that the company should adopt better
methods for promoting their brand due to the entrance of the company's
brand.
• More promotional efforts are needed on the part of the company in media
advertising so that each and every person comes to know about the
Bajaj electrical items.
• Most of the buyers give their preference to quality and service of home
appliances. Therefore company should take proper steps for improving the
service facility for Bajaj home appliances.
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• The purchase decision of the companies is mostly influenced by dealers
due to their hold on the product and experience in dealing with that product. So
it is very necessary to have very good relationship with dealers & to give them
benefits as far as possible.
buyers of Bajaj electrical products prefer the overall look as compare to
other electricals. So the company should try to maintain it always.
56
RECOMMENDATIONS
I would like to recommend some points to the company. This is on the basis of the survey
and analysis of the study conducted in okhla industrial area, New Delhi.
1) The company should keep up its good work and should provide good sere-ice for
its product at proper time, so that that the major dissatisfaction among the dealers
and buyers is not created.
2) The company should give much emphasis on incentive schemes and more margin of
profit so that dealers are able to make more sales and have more profit for the company.
3) Since the purchase decision of the buyers is mostly influenced by the dealers
therefore the dealer should be fully equipped with the best of information and some
gifts at certain purchases.
4) The company should work on positioning i.e. act of designing the company's
offering and image to occupy a distinctive place in the mind of the target market.
5) Company should use differentiation tools:
In product differentiation it should focus on-
• Form
• Features
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• Performance
• Durability
• Reliability
• Repairability
• Design
In service differentiation it should focus on-
• Ordering ease
• Delivery
• Installation
• Customer consulting
• Maintenance & repair
• Miscellaneous
In personnel differentiation it should focus on-
• Competence
• Competence
• Courtesy
• Credibility
• Reliability
• Responsiveness
• Communication
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In channel differentiation it should focus on-
• Coverage
• Expertise
• Performance
In image differentiation it should focus on-
• Symbols
• Symbols
• Colors
• Slogans
• Special attributes
6) Company should also focus on events and sponsorships.
7) As Philips and Usha are market leaders whereas Bajaj is market challenger in home
appliances it should use market challenger strategies which are given below
• Frontal attack:
In pure frontal attack, the attacker matches its opponent's product, advertising. price
& distribution. The principal of force says that the side with greater manpower will
win.
• Flank attack:
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The major principal of offensive warfare is concentration of strength against
weakness.
• Encirclement attack:
The encirclement maneuver is an attempt to capture a wide area of the enemy's
territory.
• Bypass attack:
The most indirect assault strategy is bypass. It means bypassing the enemy and
attacking easier markets to broaden one's resource base.
• Guerrilla warfare:
It consists of waging small intermittent attacks to harass and demoralize the
opponent and eventually secure permanent footholds.
8) Wall paintings, pamphlets_ distribution procedure in the public can also help in the