ICP-Hasled Report

In-company project report 2013/14

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DE MONTFORT UNIVERSITY

LEICESTER BUSINESS SCHOOL

In-company Project (Report)

‘Internationalisation of Hasled (particularly in India) as the target market’

John A. Fernandes [Masters in law]

A project submitted in part requirement for the award of

MBA (FINANCE) 2013/14

Submitted to Dr. Hulya Oztel (Supervisor)

Module Code: LBPG5002

Date of Submission: 19th September, 2014

Word Count: 10,790 words


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Executive Summary

This in-company project report is founded on the two and half months long internship

program that I had undertaken at the Registered/Head office of HASLED Limited, the

period commencing from 1st July to 13th September, 2014, as a requirement of my

MBA program, majoring in Finance from the De Montfort University, Leicester, UK.

Hasled is an SME (Small and Medium Enterprise) occupied in the business of

distribution of quality LED (Light Emitting Diodes) products, produced in Asia. The

company is registered in UK and presently markets LED products locally in UK. This

in-company project report is based on secondary data and information received from

the company. Apart from the information received from the company the data collected

were mostly journal articles, published materials, news reports, annual reports etc.,

from the databases mostly made available by the university library. I have also made

analysis of LED products globally, the pressing need for efficient artificial lighting

around the globe and the main competitors of LED products in the Global and Indian

LED market. I have discussed the potential of the Indian market through the data

collected and have and have carried out intense analysis in the form of PESTLE and

SWOT. I have marketing mix as marketing/business tool to provide cost effective

marketing solutions for LED products globally, most particularly India. Taking into

consideration the small size and limited resources of Hasled, I have tried to seek

opportunities and have made recommendations for promotion, distribution, and

manufacturing and given methods to raise finance through debt or equity, keeping in

mind, in not losing control of the management for its future growth and development.


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Acknowledgement

I, in all earnestness thank the Almighty for providing me with the opportunity to learn.

I sincerely thank Dr. Hulya Oztel my supervisor, who gave me the necessary guidance

and support to bring out the best in me during the span of my internship. I also give

sincere thanks to my module leader Ashley Carreras and all my tutors of De Montfort

University who supported me right through my course. I am extremely grateful and feel

august that this opportunity has enriched my area of knowledge.

I am highly grateful to Pritesh Madlani (Director) of Hasled to give me this opportunity

and though managing the company single handedly could spare his precious time and

impart necessary information and timely support whenever requested during the span of

this project.


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BRIEF TABLE OF CONTENTS

Topic Page

The Organisation 7

Introduction of Hasled 7 to 8

India as a market 8 to 11

Hasled’s products to be marketed globally 11 to 13

Market analysis of LED products globally and the need for

efficient artificial lighting

13 to 16

Competitors in India 16 to 18

New entrants in India 18 to 20

Global competitors 20 to 23

Analysis of India as a target market 23 to 25

PESTLE analysis of India as a business location 25 to 29

The impact of PESTLE analysis on Hasled’s marketing decisions

29 to 30

SWOT Analysis of India as a business location 31

Observations on the PESTLE and SWOT analysis 32 to 33

Recommendations for cost effective marketing strategy in India 33 to 41

Conclusion 41 to 42

Personal reflection 43

References 44 to 51

Appendices 52 to 64

Figures & Diagrams


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DETAILED TABLE OF CONTENTS

Topic

‘Internationalisation of Hasled (particularly in India) as the target market’ Page

The Organisation

-Hasled Limited

7

Introduction of Hasled

-Hasled’s particulars in brief

-Hasled’s financial particulars

-Hasled’s human resources

7 to 8

India as a market

-Comparison of the Indian rural and urban market

8 to 11

Hasled’s products to be marketed globally

-Some of Hasled’s main products and comparison made with similar

products in the market

11 to 13

Market analysis of LED products globally and the need for efficient

artificial lighting

13 to 16

Competitors in India

- MIC Electronics Ltd

- NTL Lemnis India Pvt. Ltd

- Avni Energy Solutions Pvt. Ltd

- VIN Semiconductors Pvt. Ltd

- Instapower Ltd

- Goldwyn Ltd

16 to 18

New entrants in India

- Eveready Industries

- Power Palazzo

- Panasonic Corporation

18 to 20

Global competitors

-Lemnis Lighting

- Philips

- General Electrical/Cree Inc.

- Redwood Systems

- Illumitex

20 to 23

Analysis of India as a target market

23 to 25


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PESTLE analysis of India as a business location

-Political factors

- Economical factors

- Social factors

- Technological factors

- Legal Factors

- Environmental factors

25 to 29


29 to 30

SWOT Analysis of India as a business location

- Strengths

-Weaknesses

- Opportunities

- Threats

31

Observations on the PESTLE and SWOT analysis

32 to 33

Recommendations for cost effective marketing and raising finance

- Marketing mix as a business/marketing tool - Limitations of marketing mix as a marketing tool

-Corporate aims -Corporate finance

33 to 41

Conclusion 41 to 42

Personal reflection 43

References 44 to 51

Appendices

- Appendix-I: Some top LED lighting manufacturers of India are discussed - Appendix-II: Some of the global LED competitors are discussed - Appendix-III- SWOT analysis of India as a business location discussed

- Appendix-A- List of high income, middle income and low income states of India

52 to 62

Figures & Diagrams

Fig.1- Changing urbanization map of India

Fig.2- List of high income, middle income and low income states of India Fig-3-Comparison chart between urban and rural consumers Fig.4-Hallmarks of an effective marketing mix

Fig.5-Buy, ally or DIY (Do it yourself) Matrix (advantages & disadvantages) Fig.6-Compares the industry life cycle of LED lighting to Incandescent and

Fluorescent lighting. Fig.7-From management to leadership


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The Organisation:

HASLED LIMITED

The meaning HASLED literally means it has LED lighting. However the

meaning behind HASLED is HA-represents- Home Automation, S-represents-

Solar and LED- Lighting Emitting Diodes.

Introduction of Hasled:

Hasled’s particulars in brief:

Registered Name HASLED LIMITED

Slogan -

Date of Incorporation 20th November, 2012

Registered Office Office 12 Beaumont Enterprise Ce

72 Boston Road, LE4 1HB

Chairman/Director Pritesh Madlani

E-mail [email protected]

Website www.hasled/com

Source: (Key Note, 2014)

Hasled’s financial particulars:

Hasleds Balance Sheet and Profit and Loss accounts have not been

analysed. Its Share capital structure, consist of ordinary 100 shares. The

Nominal value of each share is £ 0.10 and the aggregate nominal of all the

shares sums up to £ 10.00 (Key Note, 2014). As per details provided by the

director, Hasled has an inventory of about £ 10,000 and debtors/receivables

of about £3,500. It can arrange a sum of £10,000 - £15,000 at call on short

notice. They do not have creditors and/or interest on loans and borrowings.


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Hasled’s human resources:

The director of Hasled is solely responsible for searching and sourcing new

products, negotiating prices with suppliers, ensuring products are up to a

high standard, searching for new customers (Sales), dealing with existing

customers, marketing of the products, website administrations, dealing with

e-mail and phone enquiries. However he is assisted by some of his family

members, a lot of the financial activities (such as invoicing customers) are

done in-house. Marketing activities are also primarily done in-house.

India as a market:

Indian market growth is about 6 percent, possesses significant strength in

low cost labour and technical and managerial skills and also has the

potential for mass manufacturing (Jobber & Ellis-Chadwick, 2013;

Sithemsetti & Borstorff, 2012; Gaur & Shome, 2012). It is an emerging

power in software, design, services and precision industry. The aforesaid

skills have the eyes of electronics multinationals to have their products built

in China and India. The Indian consumer market is growing rapidly and over

a decade would equate to that of China’s market growth of about 9.5%, thus

showing healthy prospects (Jobber & Ellis-Chadwick, 2013; Sain, et. al.

2012; Suresh, 2013; Bhaskaran, 2012). The Indian economy is booming not

only in the physically but expanding online and in mobile markets (Jobber &

Ellis-Chadwick, 2013). The 2014 general elections giving it a stable

government and more being concerned with economic growth and

development, the prospects to expand in India is much brighter than ever

before.

The Indian urban population is set to touch 85 million, next to China and the

urban families desire to spend 2.5 times more of its disposable income than

its rural counterparts (Maqbool & Atiq, 2014), however 41% of the middle

class having 58% of the disposable income is dispersed across numerous

villages and towns (Shanthakumari & Kannan, 2013). Its consumer demand

is on the rise which is 3 to 5 times faster than its economy. Seventy percent

of its population are less than 36 years old and holds 20% of the world’s

population under the age of 24. Approximately 150 million now comprise of


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the middle class market in India apart from the higher middle and lower

middle (Maqbool & Atiq, 2014).

The Indian rural market has about 833 million potential consumers with

majority of the middle class and accounts for the countries fifty percent of

the disposable income. Almost seventy percent of its population is scattered

in villages. The Indian rural market has been targeted by the corporations

and the marketers, as development is rising, coupled with the increase in

purchasing power, literacy levels, social mobility and improved means of

communication through infrastructure development schemes. Thus creating

opportunities to be exploited and taken advantage of (Kumar, 2013). The

growing demand of Indian consumers is on the rise, be it urban or rural.

Table at Fig.2 at Appendix- A gives the list of High Income State (HIS),

Middle Income State (MIS) and Low Income State (LIS) of the India and

how it progressed until the year 2011-12 (Mukherjee, et. al. 2014, p.11-12).

Fig:1- Changing urbanization map of India

Source: Population Projections 2001-2016, Census Commissioner (cited in

Ravikanthi, 2012, p. 95)


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Fig.3-Comparisons between the urban and rural consumers

Source: (Ravikanthi, 2012, p.96)

Though the choices of the urban and rural consumers differ, the rural

consumer is understood to be brand loyal and understands symbols better

(Ravikanthi, 2012; Gupta, 2013). Also due to the expected change in

urbanisation by 2016, the Indian middle income group is expected to grow

between 20-25%, the middle and high income group is expected to grow

between 35-50%, the high income group is expected to grow by 50% and

the low income group would lowered between 0-20%. Thus even with the

contrast between the urban and rural markets, MNCs are vying to have a

major share of the Indian Market for most of their products (Ravikanthi,

2012).


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Thus as the LED products have multiple usages, the most significant being

reducing energy cost by 70%, environmental friendly and give a cheerful

ambience (Choudhary, 2013) it wi ll stimulate India’s need for LED lighting

to significantly enhance its energy efficiency across the spectrum of the

economy. This would enable it to eradicate poverty and improve living

standards by sustaining an economic growth of 8-9% until the next decade

as it is essential, as primary energy production would increase four-fold

(Jessup, 2011). Thus the potential need of LED products is for the urban as

well as the rural market.

Hasled’s products to be marketed globally:

Hasled focuses on supplying high quality multifunctional LED products and

has 28 products in all. The main focus is currently on App (WiFi) controlled

LED bulbs and innovative LED desk / table lamps. It aims to sell

multifunctional products, thus providing retailers with a range of products,

some of its products can also be found on Amazon (virtual merchants) who

are disinter-mediators by going direct to the end consumers (Jobber & Ellis-

Chadwick, 2013). Hasled’s short term plan to market its product in India is

through a risk free approach by partnering with e-commerce websites such

as flipkart.com, jungle.com, eBay.in (eBay India) etc. Its long term plans is

to partner with construction companies that are building residential homes,

thus promoting Hasled’s products while constructing sample flats for the

prospective buyers, as envisaged by Hasled.

Some of Hasled’s main products and comparison made with similar

products in the market:

1. The HASLED 2-in-1 SpeakerBulb. This combines an LED bulb with a

built-in Bluetooth speaker and can be operated via the mobile or smart

phone (Hasled, 2014a).

2. The HASLED WiFi controllable colour changing LED bulb kit. This

allows the user to control their lighting using their mobile or smart-phone or

tablet PC (Hasled, 2014b).


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3. The HASLED dimmable LED lamp with colour changing base. This

stylish lamp acts as a normal LED desk lamp, but also features a mood light

on the base of it (Hasled, 2014c).

4. The HASLED dimmable, portable and rechargeable LED lamp. Being

portable, it features a transparent LCD display (showing the time, date, day

and temperature) with alarm and 4-port USB hub (Hasled, 2014d).

5. The HASLED dimmable, portable and rechargeable LED lamp. This

lamp has more or less the same features as the above, but does not include

the 4 port USB hub (Hasled, 2014e).

6. The HASLED folding dimmable LED lamp, with display screen and the

ability to change the colour temperature. This lamp is also dimmable and

the display screen shows the time, date, day and temperature. This also

boasts an alarm (Hasled, 2014f).

7. The HASLED slim folding LED lamp. This lamp has the same

features as the above, but the design and look is completely different

(Hasled, 2014g).

On the details provided by Hasled and comparing with similar products

available in the market, its prime competitors are Tao Tronics (has a

registered trade mark), Daffodil, who deal with LED lamps ranging from £5

to £20, bulbs costing £8, LED string lights for decoration, potted flower LED

lights battery operated etc., and Lighting EVER (has a registered trade

mark) who mostly deal with LED bulbs ranging from £8 to £50 used for

residential, office, parking, malls and warehouses. Though Philips and

Lloytron are its competitors they are completely on the different level as

their product cost is very high due to the quality of their products.

Thus Hasled at present does not have to deal with much competition as

there are very few competitors in the market, as the LED lighting industry is

at a nascent stage. However on the information received from Hasled, it

aims to target the middle/upper middle class segment of the Indian market


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and their products are designed and priced accordingly. Thus with a

growing middle class (Ravikanthi, 2012; Mukherjee, et. al. 2014) Hasled

need not worry much about competing at the moment but more about

establishing themselves.

Market analysis of LED products globally and the need for efficient

artificial lighting:

Firms are vying for the light-emitting diode (LED) market for manufacturing

and distributing LED products to sustain growth in the emerging economies

for the rapidly growing lighting market. According to Eric Rondolat (CEO) of

Philips Lighting, LEDs are now being used not only for commercial (office,

malls, ware houses, street lights) purposes but also for residential purposes

and the most significant use of the LED products is that they can be

integrated with the internet. This will lead the way for the LED lighting

market towards smart internet solutions. This will enable firms to expand

businesses in LED products globally. For example, Philips and Alibaba

Group Holding Ltd, the Chinese e-commerce giants have signed a contract

for providing smart lighting products to Chinese customers, including cloud

computing services. Users can adjust lighting systems according to their

needs and preferences, via smart phone apps and other internet connected

devices, as it will help reduce costs by providing targeted illumination with

the right light at the right place and time (Huan, 2014; Lovig, 2014).

The LED market worldwide had a growth rate of 9.8% from $11.3 bi llion in

2010 to $12.5 billion in 2011. According to Strategies Unlimited, a leading

market research firm in LEDs, states that the demand for LED products in

the lighting market has surged from $1.2 billion to $1.8 billion, an increase

by 44% (Singer, 2012). This is due its compact nature, low cost and being

environment friendly, as it replaces hazardous technologies like mercury, it

is expected to grow from $45 million in 2012 to $270 million in 2017.

Comparing the compound annual growth rate (CAGR) of traditional UV

Lamps of 10% the UV LED is expected to grow by a massive 43% during

the same period. In 2012 several UV LED products came to be launched

which included cell phone disinfected systems, nail gel curing systems and


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miniaturized counterfeit money detectors with the supply chain battle to

intensify (Proquest, 2013a).

LEDs are vehicles and engines for the next generation innovations and

future growth. Philips the leaders and innovators in LED products, state that

30% of what they sell are LEDs and it is expected that by 2015 it will grow

by 45% to 50%. The reason being that buyers are drawn due to its durability

as they last decades instead of years and are extra ordinarily energy

efficient as they consumed 15% of the electricity of an incandescent bulb

and also environment friendly compared to fluorescent bulbs that contain

mercury. The U.S. Department of Energy (DOE) estimated that LED

technology has the potential to save the country $250 billion over the next

20 years and reduce carbon dioxide emissions considerably. There is a

sharp descent in the pricing, in 2010 an LED bulb of 12 watts costs $39.97,

by 2013 it was costing $8 and through innovation an 11 watts bulb gives the

same output of light compared to a 12 watts bulb (Gartner, 2014).

LED lighting have features for multiple uses. As they are customizable in

nature they can provide better light for safety in helping and aiding

pedestrians and drivers in navigating sidewalks or twisting roads. Due its

durability and efficiency they are expected to have life of 20 to 22 years and

uses only fraction of energy compared to incandescent lighting lowering

carbon dioxide emissions dramatically. LEDs can be set at wavelengths that

can improve education environment and the lights emitted through them can

boost concentration and even aid in relaxation. LEDs are used for health

and wellness, studies have shown that specific light recipes have enabled to

speed up patient’s recovery in hospitals and the blue light LEDs are used to

ease back pain. LEDs can be commanded and controlled from anywhere

through the internet, via smart-phone applications. LEDs are used in urban

farming as plants respond favourably to different wavelengths and have

shown increase in crop yields. LEDs have sensory intelligence and can

automatically illuminate themselves for the needed illumination depending

on a crowded party or to a dark parking garage. Due to its turnability

feature, it can help employees create lighting environments that suits their


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personality, as they vary in colour and intensity that could boost job

satisfaction and even productivity. Further they are energy efficient, have

long life and low maintenance, non-toxic, reduces carbon impact, resistant

to shock, vibration and corrosion and are cold start capable. Studies boast

that LED lighting can reduce the worldwide amount of electricity consumed

through by 50% and the total amount of electricity consumed worldwide

would drop by 10% (Gartner, 2014; Corrie, 2013; Knuffke, 2013).

In accordance with the research carried out by IEA (International Energy

Agency) and OECD (Organisation for Economic Co-operation and

Development) lighting is responsible for 19% of electricity consumption and

carbon emission of ̴ 6%. The world spends 0.72% of its GDP (Gross

Domestic Product) on light alone. In 2010, World GDP of $63.12 billion was

used for artificial lighting, in today’s current value of $455 billion. Thus the

need for energy saving lighting is essentially needed as too much artificial

light is consumed which costs a lot of energy and can be reduced and

controlled through efficient artificial lighting. Efficient artificial lighting such

as LEDs could save billions of dollars in principle it can reduce energy

consumption by 50%. It can substantially reducing greenhouse gases, more

particularly carbon emission by hundreds of millions of tons per year, while

improving consumers vision as the lighting provided through LEDs is photo -

metrically of high quality (Tan, et.al., 2012). LED lighting along with

renewable energy will help in a long way to stabilise global carbon

emissions and will require contributions from all major countries as 80% of

carbon emissions are related to energy supplies. Also to avoid the global

average temperature from increasing by 2 ْC the need to stabilise global

carbon emissions at 450 parts per million (ppm) is paramount (OECD,

2013).

Thus with LED products providing multiple usages and more significant it

being energy efficient by reducing energy consumption by 50%,

environmental friendly as it can reduce carbon emission by hundred of

millions of tons per year and also avoid rise in global temperatures, the LED


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market is here to stay for a long time to come (Tan, et.al., 2012) with firms

vying to get a share of the LED market (Huan, 2014).

Competitors in India:

The LED Lighting industry is expected to grow and reach $ 1.3 billion by the

year 2018 at a CAGR of 47.3 % between 2011 and 2018. The indigenous

manufacturers ranked below have not being benefited from this growth as

the demands are fulfilled either by imports or the Multinational Companies

(MNCs) who have manufacturing activities outside India. Though there is a

demand for LED products 90 per cent of the manufacturers are making

losses. This is due to low business volumes which ultimately earn low

profits. Also the consumers have faith in leading brands like Wipro, Philips,

Havells, Osram and Halonix as they have global presence but local

relevance, the best example being Philips growth in India (De Jong, 2013).

The leading LED brands available in India who are multi-product MNCs and

could not be ranked as their revenues are consolidated figures including

sales other than LED products namely 1) Wipro India Ltd 2) Crompton

Greaves Ltd 3) Philips Electronics India Ltd 4) Havells India Ltd 5) Bajaj

Electricals Ltd 6) Surya Roshni Ltd 7) Moser Baer India Ltd 8) Toshiba India

Pvt. Ltd 9) MIRC Electronics Ltd 10) Osram India Pvt. Ltd 11) Halonix Ltd

12) Continental Device India Ltd (Chakravarthy, 2011; Chakravarthy & Sen,

2013).

The top LED lighting manufacturers in India for the financial year

2012/2013 as per ranking are:

1) MIC Electronics Ltd (Hyderabad, India) with a turnover of Rs. 930

million, being a global leader in designing, development and manufacturing

of LED products. It has a nationwide network of marketing, sales and

service and operate in Australia, Korea and USA. It has drawn alliance with

Leyard Optoelectronics Co. Ltd, a Chinese firm and jointly plans to invest

US$ 50 million in manufacturing LED chips packing in India. It has also

bagged an order for replacing 69, 541 street lights with LED lighting from


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the Nasik Municipal Corporation (Chakravarthy, 2011; Chakravarthy & Sen,

2013).

2) NTL Lemnis India Pvt. Ltd (headquarters Netherlands, manufacturing

facility Noida, India) with a turnover of Rs. 687.36 million, is a joint venture

of NTL Electronics India Ltd and Lemnis Lighting BV of the Netherlands to

provide LED Lighting solutions to its end consumers in Europe, India and

Africa (Chakravarthy, 2011; Chakravarthy&Sen, 2013).

3) Avni Energy Solutions Pvt Ltd (Bengaluru, India) with a turnover of Rs.

231.42 million, have concentrated on R&D and have excelled in

manufacturing LED lights, fixtures and drivers. It has been certified by

various NABL (National Accreditation Board for Testing and Calibration

Laboratories) accredited labs. It has to its credit 60,000 DC street light

installations, 20,000 AC street light installations and 10,000 down light

installations (Chakravarthy, 2011; Chakravarthy & Sen, 2013).

4) VIN Semiconductors Pvt Ltd (Mumbai, India) with a turnover of Rs.

188.07 million is a major provider of high precision LED components. They

are pioneers in combining the most sophisticated digital control, thermal

management and lighting fixture designs to offer products of international

quality standards and performance. It has an in-house R&D which provides

solutions from design to packaging (Chakravarthy, 2011; Chakravarthy &

Sen, 2013).

5) Instapower Ltd (Gurgaon, India) with a turnover of Rs. 147.16 million is

the largest manufacturer of aviation obstruction lights in India and has to its

credit of installing 100,000 aviation lights in India and other countries. It has

been recognised by NABL as an R&D house. It is equipped with the state of

the art manufacturing and testing equipment and manufactures over 100

products. It has filed 10 patents and about 30 design patents in the area of

LED lighting (Chakravarthy, 2011; Chakravarthy & Sen, 2013).


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1) Goldwyn Ltd (Noida, India) with a turnover of Rs. 137.32 million is an

exporter, supplier and manufacturer of energy efficient LED lights used for

internal and external applications. It has the state of the art photometric

laboratory that enables it to monitor light output for its LED lights. It

maintains a high quality and reliability LED products by manufacturing

critical components and assemblies in-house (Chakravarthy, 2011;

Chakravarthy & Sen, 2013). However due to restrictive word count some of

the top LED lighting manufacturers are discussed in Appendix-I.

Thus most of the manufacturers in India are SMEs who have developed

organically (in-house) or through joint ventures. The SMEs who have

developed through joint ventures have a high turn-over compared to the

SMEs that have developed organically. Thus there is scope for small

manufacturers to establish themselves as the LED industry is at a nascent

stage globally and more particularly in India. The best example is of the new

entrant Power Palazzo which commenced its operation with Rs. 80,000/-

and has grown to a Rs. 120 crore company, is discussed below.

New entrants in India:

The LED industry in India has also seen new entrants like Intel India Pvt.

Ltd, Power Plazzo, Eveready Industries (India) Ltd, Panasonic Corporation

etc., Intel India’s contribution to global research and development (R&D)

efforts and focuses on promoting science, technology, engineering,

mathematics (STEM) education by mentoring PhD students is its major

strength. Intel India has 6,000 employees and about 70% of them are in

R&D work. Intel has spent about US$ 10.1 billion on R&D in 2013 globally

of that $ 2 billion was invested in India alone. They are in collaboration with

National Council of Science (NCSM) have set up “Galileo Corners” in 45

NCSM innovation centres to strengthen students research culture in a bid to

promote creativity, innovation and a Do-it-Yourself “Maker” culture to create

LED displays that respond to social media or for tackling more complex

projects such as automated home appliances which can be controlled

through a smart-phone (Srinivasan, 2014).


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Eveready Industries, who are the largest manufacturers of dry cell

batteries and flash lights in India have recorded a Rs.60 crore turnover from

its Madhya Pradesh operations this financial year and intend to grow further

by 15-20% with innovative rechargeable products with LED and strong

battery backup (Proquest, 2013b).

Power Palazzo which commenced its operations from a meagre Rs. 80,000

has grown to a Rs.120 crore LED lighting company. Due to the growing

demand for protecting environment they developed circuit components that

saved 60 to 70% of energy. They entered with strategic partnership with

Taiwan and Chinese companies and through technical collaboration brought

those products to India. They further designed component suited for Indian

conditions and manufactured those components mainly in Wuxi, Hunan,

Chanzhou, Yanzhou and Shenzhen located in China. They mainly deal with

LED street lights, domestic downlighters and bulbs (Dutta, 2014).

Panasonic Corporation a Japanese enterprise by partnering with interior

designers, will be providing lighting consultants in Asia, particularly India,

Vietnam, Taiwan, Hong Kong and Indonesia. The interior designers will play

the role of lighting consultants locally and Panasonic will provide the

consultants with their unique light plans that would help in creating soothing

and ecological living experience with the company’s lighting products,

based on the housing conditions in each market. They plan to introduce

products such as large and small ceiling lights, down-lights, brackets, line

lights and chandeliers used as decorative ceiling lights, thus providing a

wide variety of residential LED lighting products for the entire house hold.

This will not only help in saving cost, energy and cutting down on carbon

emissions but also will add and increase the value of the house. The

company aims to double its overseas sale of LED interior lighting products

from 3 billion yen, which they achieved in the financial year of 2012/13

mostly by selling their products in the Chinese market to 6 billion yen in

2016. Panasonic plans to build and develop showrooms for distribution of its

products. Panasonic Corporation is a world leader in the field of electronic

technologies and solutions providing customers products in residential, non-


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residential, mobility and personal applications. It operates through its 500

consolidated companies worldwide and recorded net sales of 7.3 trillion yen

for the fiscal year ending 31st March, 2013 (JCN Newswire, 2013).

Global competitors:

The International Lightfair convention that kicked off in the last five decades

at Las Vegas, had about 500 of the world’s largest to small start-ups who

unveiled their world dominion lighting plans, some of the top companies that

outshone the rest are as follows (Fehrenbacher, 2010 ; Edison, 2014;

Gertner, 2014; Cangeloso, 2013).

1) Lemnis Lighting is a Netherlands based enterprise run by Warren

Philips, the great grandson of the founder of lighting giant Philips. The LED

power house in 2010 had launched six new LED bulbs including the Pharox

500, a 500 lumen replacing the incandescent bulbs and was dimmable. The

company was valued at $ 170 million (Fehrenbacher, 2010). The company

is now offering LED bulbs equivalent to 25 watt at $4.95. Since 2006tthey

have shipped more than 5 million Pharox bulb (350-lumen) and are in the

process of shipping millions more thus making them the world’s leading

supplier of LED bulbs. Lemnis claims that a Pharox bulb (350-lumen) cost $

0.85 in energy use per year compared to a 40 watt incandescent bulb

costing approximately $5.69 per year to use at $0.13 per ki lowatt-hour,

three hours a day (Wesoff, 2012). Lemnis Lighting Asia is the world’s most

innovative lighting company and aims to reduce its customers lighting

energy cost, reduce global carbon emissions and through breakthrough

technology create light that matches sensitivity of the human eye for the

evening and night-time vision (LLA, 2014).

2) Philips the Dutch lighting giants had launched several products and

boast that they can deliver 80% of energy saving products which can last

upto 25,000 hours or 25 times more in duration than the common

incandescent bulbs. They are into radical innovation wherein LED lights turn

cerulean blue or sunset pink and/or dim or brighten wirelessly and can pulse

along with speech by command given via a smart-phone. They boast that


21

50% of the total electricity consumed globally would be reduced by 10%,

through LED lighting (Fehrenbacher, 2010; Gertner, 2014).

3) General Electrical/Cree Inc. had announced a 9 watt LED bulb that

could replace a 40- watt incandescent bulb that could last 17 years. The

company also plans to have innovative ideas for organic LED (OLED)

lighting applications. They have invented the bytelight technology, wherein

LED lighting fixtures can communicate with the customers through smart-

phones while shopping, by playing the role of satellites through indoor GPS

(Global Positioning System). As 80% of our time is spend indoors, GE have

come out with wide range of possibilities through radical innovation, many of

them are yet to be conceived. For example the lights could enable your

phone to beep if the manager held you at a particular booth too long. The

light could tell the manufacturer how much time a guest spent at his or his

competitor’s booth (Fehrenbacher, 2010; Edison, 2014).

4) Redwood Systems is a company based in Redwood city, California; it

officially launched its networked lighting management technology in 2010.

The main advantage of its LED products have is that they use sensors,

lighting and can digitally measure light levels, motion, occupancy and

temperatures, thus saving energy of lighting in commercial buildings. They

are able to power with low voltage network upto 64 LED light fixtures. They

are raising money through venture partners (Fehrenbacher, 2010). It has

released its next generation Gen-3 platform for commercial properties,

which includes a new Engine-3, new environmental sensors and centrally

stores available building data. Apart from energy savings it provides

customers with intelligent data on space utilisation and temperatures across

commercial areas, data centres and schools, which help in taking cost

effective decisions for lighting, heating and cooling by drawing strategic real

estate portfolio plans. They are also in the process of upgrading its software

to cloud based-data. Thus ushering the next generation of intelligent

buildings through lighting (Fremont & Calif, 2013).


22

5) Illumitex is a Texas based company, and have through innovation

redesigned an LED package that can give light two times brighter than its

competitors. They sell its LED technology to manufacturers those who are

targeting mobile displays, televisions and general lighting. One of its main

customers are Singapore’s LED Works (Fehrenbacher, 2010). As LED

lights have become energy efficient more farmers can replace traditional

grow lights to save money and energy. As light from LED can be precisely

controlled it can boost productivity and adjust its light to encourage different

traits in food. For example a vertical farm increased its plant productivity by

200 times (LaMonica, 2014). The company was chosen by PlantLaba Dutch

Company as the exclusive supplier of advanced LED technology for its

66,000 square foot R&D centre. The Aurora LED grow light is used in both

greenhouse and enclosed contained environments it is designed to

maximise energy efficiency and offers five times the output of standard

products. The Quantum LED grow light can adjust 0% to 100% output. They

are leaders in controlling the wavelength through its granularity and

precision (Gray, 2014; Illumitex, 2014). However due to restrictive word

count some of the global competitors are discussed in Appendix-II.

LED lighting industry is on the path to grab 80% of the market share from

the global lighting industry, due to competition, cost reduction and

continuous innovation from the some of the aforesaid leading LED lighting

companies. The LED lighting industries market share has jumped to 25% in

2014 from 12% in 2012. The lighting industry was relatively stable for the

last century. But with companies like Philips and Osram, who depended

heavily on traditional lighting, are now forced to invest in LEDs. As revenues

are being flattened due to high volume LED production, manufacturers will

be giving more importance to technologies. Cree a new entrant and

subsidiary of GE recently launched a LED bulb for less than $10 beating

Philip on the shelf space. The cost of LED is plummeting by 25% a year due

to higher volume of increasing consumer demand and the drive to cost

effective rather than just adding value. China is soaring in the manufacturing

of LED products as its consumers are cost sensitive and as it controls vast

rare-earth materials for producing LED, it wi ll use its position for trade


23

advantage against the west as it conserves scarce resources (Lacy, 2013;

Tenningas, 2013a; Tenningas, 2013b; Daniel, 2012).

Presently as the competition in the LED lighting market is not fierce there is

scope for new entrant to establish themselves in the LED lighting industry.

Following the example of Power Palazzo above, Hasled can initially built its

distribution network through retailers, construction companies and through

digital marketing. Small producers/distributers can use multi channel

intermediaries as they combine large number of small purchases into bulk

for transportation as it is cost effective to meet transportation cost for

individual customers (Jobber & Ellis-Chadwick, 2013). For promotion they

can use interior decorators, architects and even event managers to promote

its products as carried out by Panasonic using the services of interior

decorators as agents to promote its products. It can later take up

manufacturing activities through joint ventures as they intend to create their

own range of products in the future and distribute them.

Analysis of India as a target market:

There are several reasons for targeting India as a potential market for the

LED lighting industry and ancillary products;

The most important basis for targeting a market is to observe the country’s

political will in boosting manufacturing in any particular industry. This can be

noticed by the policies the Indian government has developed to kindle

manufacturer’s interest for adopting the LED lighting in the country. In the

case of India the government has funded a number of pilot projects for LED

street lighting. According to industry reports the lighting market in India is

valued at $ 1.4 billion and is mounting at a robust rate of 18% annually. The

National Manufacturing Competitive Council (NMCC) having a cabinet

ranking and chaired by the Ministry of Power, submitted its report through

its core committee Bureau of Energy Efficiency (BEE) in 2010, that the need

to stimulate LED lighting in India was to significantly enhance the energy

efficiency across the spectrum of the economy. As to eradicate poverty and

improve living standards by sustaining an economic growth of 8 -9% until the


24

next decade is essential as primary energy production would increase four -

fold (Jessup, 2011).

On the basis of research replacing incandescent bulbs with LEDs could

reduce household electricity by 30% not neglecting street lighting

applications and the commercial sector. The aim of the government is to

attract leading LED manufacturer’s to rapidly reduce product cost (as

majority of the Indian population falls between the lower middle class and

middle class range) and eliminate other barriers of limited products,

absence of national standards for LEDs, lack of testing protocols and

laboratories and lack of incentives thus giving boost to attract major LED

firms in India. Firms like Philips, Crompton and Greaves, Bajaj Electricals

are working closely with the various municipalities, BEE and The Climate

Group in enabling India to follow Japan, China, Taiwan and Korea towards

high-brightness LED revolution in Asia. Also the Budget of 2014 boasts of

reduction of custom duty on LED products from 10% to nil. Thus with a

reform oriented budget the Indian markets have rallied with the Bombay

Stock Exchange (BSE) Sensex and National Stock Exchange (NSE) Nifty

rose by 313 and 102 points respectively (Jessup, 2011; Budget, 2014;

Economic Times, 2014).

According to Phi lips (Philips Electronics) India is Royal being its sixth

largest market where it operates. Doing business in India for more than 80

years they are less concerned even if the growth is fast or slow at times,

they are focused. To them the business consumers are spending be it

kitchen appliances, personal care or garments, as they consider it vital for

their life-style and are not dependent on the state of economy or inflation.

As lighting contributes to about 50% of the India’s revenue and 95% of the

energy consumed dissipates into heat, the LED products reduce energy

cost, reduce fuel emissions and also create a cheerful ambience, being the

drivers. 35% of India has no power coverage, the growth in India and China

will be very healthy. Indians think we are local and we are proud of it

(Choudhary, 2013). However proper research and care should be taken

before entering the Indian market as there are doubts in treating the Indian


25

market as one market, due to varied inflation and growth results widely

among the states. For example table at Appendix-I, depicts, states in the

year 2011-12 having the most significant growth, wherein states like Andhra

Pradesh, Arunachal Pradesh, Goa, Gujarat, Harayana, Himachal Pradesh,

Karnataka, Kerala, Maharashtra, Nagaland, Punjab, Sikkim Tamil Nadu and

Uttarakhand , fall in the High Income State (HIS) list (Mukherjee, et. al.

2014, p.11-12). This is mainly due to their topography, remoteness, or they

being rural, urban or industrial states (Mint, 2014).

PESTLE Analysis of India as a business location:

Companies are stepping up the gas to present themselves in the

international markets either to increase sales and profit or to gain resources

and features for its business, which cannot be availed locally. Due to

globalization and the advancement in technology particularly in the field of

communication and transportation, companies are moving to potential

locations/markets for its business operations globally. However a company

must scrutinize the economic, political, legal, financial, social, cultural and

demographics of that targeted market. Today companies are eyeing the

BRICS nations (Brazil, Russian Federation, India, China and South Africa)

(Sithemsetti & Borstorff, 2012) our target is restricted to India.

Political factors: Though India has a coalition government the NDA with its

present Prime-minister Mr. Narendra Modi in the fore front has won by a

majority in the 2014 general elections and hence the earlier disadvantages

of conflict amongst its allies, wherein the regional parties for its regional

political benefits cause hindrances when strategies are drawn for national

benefit wi ll be well managed (Gaur & Shome, 2012). Mr. Modi who is

believed to be economically driven for his forward thinking and proactive

with the economic reforms as carried out in the state of Gujarat is expected

to do it on a national level (Taylor, 2014). The reduction in the basic

customs duty for LED products from 10% to nil is another step taken by the

government in causing reforms to attract manufacturers and investors to

invest in the LED lighting industry (Budget, 2014)


26

The present scenario will not only benefit Indian investors who restrained

themselves from investing in India but will also boost foreign investor’s

confidence in India (Taylor, 2014). The current account surplus (CAS) of

$22 billion was reported first time since 1978 compared to the current

account deficit (CAD) of $ 89 billion in 2012/13 during the UPA regime. Also

the NDA which once opposed foreign technology is on the path of opening

100 percent Foreign Direct Investment (FDI) in defence and real estate,

thus further opening up the economy. India having a strong domestic

industry can compete with foreign competition and thrive (Punj, 2014;

Mishra, 2014; Sithemsetti & Borstorff, 2012).

Economic factors: India’s economic slowdown is more due to its domestic

reasons than global slowdown reports International Monetary Fund (IMF)

largely due to the increasing bottlenecks in infrastructure. In 2009/10 and

2010/11 India’s GDP growth stood at an impressive 8.6% and 8.9%

respectively. However it brusquely decelerated to 6.7% in 2011/12 and

finally slumped to 4.5% in 2012/13. However with a stronger global scenario

including BRICS, improving exports competitiveness, a favourable monsoon

and the recent general elections bringing in a stable government projects a

growth of about 6% (ET Bureau, 2014; Mishra, 2014).

Slow growth and recovery of the developed markets makes India less

attractive to foreign investors. Also the Indian currency dip against the US

dollar made imports more expensive and have contributed to high inflation

not neglecting the down fall in manufacturing activities at 2%. With 13

million workers adding to the work force each year and about 50% of the

population reeling under the age of 25, India should strive to achieve a

double digit growth rate (Chanco, 2013; Limaye, 2014).

India has a robust, transparent and stable credit market and boasted a

growth of 17.1% in bank credit to private sectors in 2010 and has an

average daily turnover of $ 36 billion. The Indian Rupee is fully convertible

and freely purchased for trading, needing RBI (Reserve Bank of India)

approval in certain cases. Through its capital market Indian operations can


27

be financed by means of equity, debt and borrowing. Foreign debt is treated

as FDI and equity capital can also be raised through FCCBs (Foreign

Currency Convertible Debentures), GDRs (Global Depository Receipts) and

ADRs (American Depositary Receipts) (Sithemsetti & Borstorff, 2012).

Social factors: The major financial scams in 2011 relating to the 2G

Spectrum and the Commonwealth Games, ranking it at 95th position

amongst 183 countries on the Corruption Perception Index (CPI) in 2011.

According to the World Economic Forum’s Global Report 2011 to 2012, the

second most pervasive factor is corruption, headed by inadequate

infrastructure. The Anna Hazare movement on anti-corruption displaying

significant setbacks for reducing corruption, brought significant attention to

global media, that made FII (Foreign Institutional Investors) lose confidence

in 2011 to 2012 (Gaur &Shome, 2012; Nuruzzaman, 2012). According to

TATA a multinational company (MNC) corruption influences license

approvals, contract awards and to the extent terms of contractual

obligations. Truckers pay over $1 trillion in bribes for cross border driving.

Terrorism as a factor is a concern as it is mostly instigated from overseas

and can interfere with MNCs operation (Sithemsetti & Borstorff, 2012).

In India roughly 420 million of the population reside in the urban areas,

while 850 million live in the rural areas. The rural India market is vast and

has to offer opportunities in abundance with middle and high income

households expected to grow about 60 million, five times more than its

urban counterpart, taking in its stride the economic disparities among its

states and territories. This is due to the saturation of the urban markets and

increase in agricultural productivity generating disposable income and

substantially increasing the purchasing power of the rural communities

(Kumar, 2013; Kotni & Prasad, 2012; Nuruzzaman, 2012). The opening of

100% FDI in the real estate sector through automatic route is another

positive feature. Risk by foreign real estate investors could be mitigated by

hiring local employees, borrowing locally to reduce exchange rate

fluctuations (Kumar, 2013; Sithemsetti & Borstorff, 2012).


28

Technological factors: There has been decent advancement in technology

and science in the recent years in the field of communication systems,

automobiles, electronic devises, building and architecture, or the computers.

However compared to the developed countries India is far behind (Gaur &

Shome, 2012).The Indian Information Technology has been the greatest

success stories in the world. The demand for electronic hardware from the

estimated $45 billion in 2009 is likely to increase to $400 billion by 2020,

which encompasses exports of $80 billion (Sithemsetti & Borstorff, 2012).

Foreign companies must invest in LED lighting industry to make yet another

success story. For example, Intel India through R&D efforts is focusing on

promoting STEM education by mentoring PhD students is its major strength.

It has invested $ 2 billion in India alone. They in collaboration with NCSM

are promoting a Do-it-Yourself “Maker” culture to create LED displays,

which can be controlled through a smart-phone (Srinivasan, 2014).

Legal Factors: India has been signing various bilateral and regional

trading agreements, offering preferential tariff rates and economic co -

operation. The regional free trade agreements have the prospects for MNCs

to setup new businesses in India (Sithemsetti & Borstorff, 2012). India is

ranked behind China, Pakistan and Nigeria on the ease of doing Business

Index (2010). It has a written constitution providing protection to child

labour, slavery, equality of opportunities, forced labour etc., in the form of

fundamental rights, though its implementation is of some concern. There is

a need for new labour regulations that can attract more labour intensive

investment as India needs job oriented projects for the estimated 13 million

workers it adds each year to its workforce (Nuruzzaman, 2012).

India must adopt new policies for LED lighting to save energy and also as it

will enable to reduce carbon emission. As the construction market is

booming, it has been estimated to reach $154 billion in 2015 and swell to

$500 billion in 2025. As investment in green buildings are forecasted at $30

billion in 2015, the current policies on energy efficiency may become

redundant considering the growth rate of the construction sector

(Mukherjee, 2012).


29

Environmental factors: The most simplest and effective method for

reducing greenhouse gas emissions due to lighting energy use is by

replacing kerosene lamps with white LED lighting in India and the other

developing nations (Mills, 2002). The carbon dioxide emissions emitted

using kerosene lamps, diesel, candles, bio-fuels etc., is said to be

equivalent to the emissions spilled out by 30 million cars (Mills & Jacobson,

2011). As energy is closely linked with historical prosperity, the dependence

on conventional energy possess great risk to global warming pollution and

also risk to real income from higher energy prices (Gunatilake, et. al., 2014).

Thus replacing kerosene lamps, diesel, candles, bio-fuels etc., with LED

lighting can contribute to sustainability, aiming at higher eco-efficiency and

causing negligible risk to real income from higher energy prices (Figge, et .

al., 2014). Also energy efficient products like air-conditioners/refrigerators

are growing by about 65% and about 30% in other consumer products.

LEDs will in all probabilities replace the conventional lighting services as it

cuts down power consumption, emits negligible heat, with no ultra-violate or

infra-red radiation and are eco-friendly (Economic Times, 2012).


On the political and legal front, the favourable government policies, a stable

government headed by a leader driven by forward thinking and proactive

economic reforms, reduction on customs duty for LED products from 10% to

nil, the proposed opening of FDI in sector like real estate, regional free trade

agreements encourage setting up new businesses, with its written

constitution and labour laws though pro-labour, will be a boost for Hasled as

the demand for LED products will rapidly increase.

On the economic front though the western nations were hit by recession,

India’s economic slowdown was due to the increasing bottlenecks in its

infrastructure as reported by IMF and also it has a huge domestic

consumption, wherein Hasled’s marketing decisions will not be hampered.


30

On the social front Hasled will have to deal with corruption as most MNCs

have learnt to deal and are successful, JCB’s success in India is exemplary

even during recession in 2009 it became the largest manufacturer in the

Indian construction market and sells 52% of its manufactured equipment

within the country. It was positioned as the largest single market by volume

and accounts for 25% of global sale, though they have issues in China

relating to technology theft (Wilson, 2014). On the technological front very

few companies have invested in R&D towards LED products and thus

bringing new LED products and technology is encouraged by bringing down

the customs duty which HASLED will benefit to sell its products. On the

environmental front reducing greenhouse gas is a global issue and India will

benefit, if Hasled introduces its products in replacing kerosene lamps in

India.


31

SWOT Analysis of India as a business location:

Strengths

1) Young urban and large rural population with growing

disposable income. 2) Increasing levels of literacy. 3) Availability of products, raw

materials and human resources through emergence of a working

class. 4) Huge demand for diverse

products and changing lifestyle.

5) Steady growth rate.

Weaknesses

1) Lacking in infrastructure and distribution facilities

particularly in the rural areas. 2) Lack of Research and

Development (R&D) in

technologies. 3) Neglecting development

activities in rural market leading to low consumption levels.

4) Neglecting the manufacturing sector and greater

dependence on service sector. 5) Labour laws and tax system

are not business friendly.

Opportunities

1) Change in socio-economic lifestyles

2) Favourable government policies

giving rise in development of infrastructure facilities and

technologies. 3) The untapped rural customers

with rising income and rapidly

changing habits and taste. 4) Rising organised retail sector.

5) Investment opportunities 6) Development of technologies

through joint ventures

7) Lack of access to electricity. 8) A mixed market of low income

and highest income households.

Threats

1) Rising grey market activities. 2) Lack of knowledge to identify

products (brand awareness).

3) Prevalent customs and traditions particularly in rural

areas. 4) Lower literacy level in rural

areas.

5) Delay in implementation of policies.

Source: (Kotni & Prasad, 2012; Sithemsetti & Borstorff, 2012; Bansal, 2014;

Dash & Sabat, 2013; Saxena, & Shrivastava, 2013).

At Appendix-III, the SWOT analysis of India as a business location has

been discussed in detail.


32

Observations on the PESTLE and SWOT analysis

The role of marketing mix as a marketing/business tool can be used by

Hasled to determine its products or brands offer which are associated with

the 4P’s in case of production and 7P’s in the case of services provided

(Mittal, 2014). Hasled aims to market its products in India through e-

commerce websites such as Flipkart.com, junlee.com, eBay.in etc., which

are similar to Amazon.com, as they intend a risk free approach to tap the

Indian market. Their second option would be to woo construction firms who

are in the business of building residential complexes, wherein Hasled’s

products are promoted at an early stage of development wherein

prospective buyers, before booking, come to examine sample flats which

are completed in all respects and most of Hasled’s products are used in the

sample flat. Such a strategy will have a twofold effect, firstly it wi ll enable

Hasled to promote its products in the market and secondly it will add value

to the flats/apartments, as they would be providing LED products, which are

energy efficient as they reduce energy consumption by 50% to 70%,

environmental friendly as it can reduce carbon emission by hundreds of

millions of tons per year and also avoid rise in global temperatures (Tan,

et.al., 2012; LLA, 2014).

However before Hasled commences its promotion campaign and

distribution of its products in India it has to work on the following areas;

Logo:

Though Hasled has a logo it has not been registered as a trade mark and

needs to be registered at the earliest from preventing its logo from being

copied or imitated. The meaning literally means it has LED lighting.

However the main reason the business was set up and the meaning behind

HASLED is HA-represents- Home Automation, S-represents-Solar and

LED- Lighting Emitting Diodes.


33

Slogan: Hasled does not have a Slogan and it is recommended that they

should have a slogan to connect to its customers like “Illuminating life and

minds” or “lighting up your life” as LED lighting has features of multiple

usages (Gartner, 2014; Corrie, 2013; Knuffke, 2013). Slogans stand as a

battle cry for the organization and aids in competing with competitors. They

have to be a minimum of three to a maximum of five words, catchy, easy to

recall and should connect with the company and its product, as it keeps

both the slogan and the product alive and fresh in the minds of the

consumers thus influencing product patronage (Esuh, 2014).

Contractual terms:

Hasled should bargain for exclusive distribution rights for distributing its

products in the states they intend to distribute their products in India. This

will enable them to capitulate on the market share and also keep the

manufacturers from distributing its products through itself or others (Lexis

Library, 2014).

Recommendation for cost effective marketing and raising finance

Marketing mix as a business/marketing tool:

Hasled at present is a company that is operated on one man show with very

limited cash flow and human resources. It was incorporated in the year

2012 and its main objective is in carrying out business in wholesale of

furniture and ancillary products (Key Note, 2014). Hasled’s strategy for

marketing its products should be in line with a promotional mix of

advertising, personal selling, sales promotion, direct marketing, e-marketing

and on line promotion, thus drawing an effective and sensible marketing mix

decisions (Jobber, 2013). As the LED industry is at a nascent stage and so

is Hasled which has been recently incorporated, it should formulate an

effective marketing mix strategy to target its customers in short term as well

as long term perspective. Fig.4, presents the Hallmarks of an effective

marketing mix, as given below.


34

Fig.4: Hallmarks of an effective marketing mix

Source: Adapted from (Jobber, 2013, p21)

Promotion

Advertising:

In the words of (Jobber, 2013, p574) is “any paid form of non-personal

communication of ideas or products in the prime media, i.e. television, the

press, posters, cinema and radio, the internet and direct marketing”.

Through advertising a product can reach a wide audience rapidly, but

expensive (Jobber, 2013). However in the case of Hasled, presently

advertising through the internet would match its corporate resources and

should simultaneously work on its brand domain to reach out to its target

market, as it has yet to achieve a status of a brand.

Personal selling:

In the words of Jobber, 2013, p863) is “oral communication with prospective

purchasers with the intention of making a sale”. In the case of Hasled

having very limited resources, they should concentrate on personal selling.

For example, they should as a priority approach under construction

residential as well as commercial bui lding societies with its products having

Effective marketing mix

Matches customer needs

Well blended elements of

4 Ps

Matches corporate resources

Creates a competitive advantage


35

multiple usages as that would in all certainty add value to residential

apartment, business premises and the societies as a whole.

Sales promotion:

In the words of (Jobber, 2013, p864) is “incentives to customers or the trade

that are designed to stimulate purchase”. It also means sales are affected

through discounts, trade shows, games, giveaways, sale displays, special

offers and other related activities (Chowdhury, 2014). In other words it could

promote its products through trade shows, agents, interior decorators, event

managers, suppliers, lighting contractors etc. For example Light India is a

trade show held in respect of International Lighting Exhibition, every two

years is scheduled from 18.09.2014 to 21.09.2014 and India’s first

exhibition on LED products and technology is being held on 05.12.2014 to

07.12.2014 at Pragati-Maidan, New Delhi. Also AD: Tech New Delhi, the

leaders in Digital-marketing & Advertising is holding its conference and

exhibition in March 2015at the Leela Ambience Hotel and Residencies

(NMDC, 2014).

Direct marketing:

In the words of (Jobber, 2013, p859) is “the distribution of products,

information and promotional benefits to target customers through interactive

communication in a way that allows response to be measured”. The

increasing use of digital channels has given direct marketers abundant

opportunities by using a combination of media (Jobber, 2013). Hasled with

its very limited resources but by stretching itself a little can use direct

marketing materials like, brochures and/or word documents product

specific, SMS service, flyers (Chowdhury, 2014) and demo to be provided to

the target customers in schools, universities, residential societies,

construction sites, hotels, restaurants, business houses, hospitals etc.

E-marketing and e-commerce (virtual merchants):

In the words of (Jobber, 2013, p859) is “is a term used to refer the use of

technology (telecommunication and internet-based) to achieve marketing


36

objectives and bring the customers and supplier closer together”. Today

consumers use social media and internet to explore new products and

prices for making purchases. It enables the organization to reach target

market, communicate and interact with customers, it is the most

inexpensive method to promote and advertise product and services. For

example facebook has become popular in advertising products. It can also

provide customer service and support efficiently and speedily (Chowdhury,

2014). Hasled has its own website and should stretch itself to reach more

targeted customers as the number of competitors and new entrants are

rapidly rising in the nascent LED lighting industry.

Place/location for effective distribution channels

Hasled being a wholesaler it must have effective distribution channels

through which the products are passed easily to the customers. It has to

also ensure that products and services that they provide are available at the

right time, place and quantities with cost effective access in order to create

a competitive advantage (Jobber, 2013). As Hasled’s products are

manufactured in Asia, they should find ways and means to distribute their

products directly to the Indian retailers, suppliers and/or its customers, to

gain competitive advantage towards not only product cost but making the

products available at the right time and in the right quantities.

Pricing

Price is the most important element of an effective marketing mix as it

represents profit received for the product marketed by the company, all

other elements of the effective marketing mix represents cost (Jobber,

2013). The India market being the second most emerging market after

China, with its strength and opportunities is the ideal market for the LED

lighting business after China. As the Indian market is a mix of low income

and high income group and as estimated that the low income group would

shrivel by 60% and the high income group would double by 2015/16

(Kumar, 2013; Kotni, 2012), products offered to the low income and the high

income could be priced accordingly, keeping in mind the multiple usages of


37

LED and the diverse needs of the low income and the high income group,

there are opportunities galore.

Product

In the words of (Jobber, 2013, p863) is “a good or service offered o r

performed by an organization or individual, which is capable of satisfying

customer needs”. It is the decision to be taken by the organization to target

the group of customers before offering the product. Taking into

consideration the multiple usages of LED products, Hasled should target

low income group with low cost products, while the high income group with

disposable income they generate can be offered high end products. Thus

Hasled should not only concentrate on the urban market but keep in mind

the growing rural market which the leading corporate are on the prowl to

exploit.

Brand building:

As Hasled has yet to achieve the status of a brand they should embrace

new brand identity building blocks for building its brand which includes

elements such as brand vision that represents existence and manifests its

core values, mission an important element of the brands philosophy, values

capable of building brand stakeholder relationships, personality in

associating a set of human traits that presents the basis for brand consumer

relationship, core competencies derived from the brands vision, values that

are sturdy, favourable and unique compared to other brands. It is

experienced that brands are socially fashioned with consumer’s involvement

and relationship that is unique between the brand and its stakeholders.

Today market communications contribute towards brands equity as apart

from the traditional advertising mediums like television, radio, magazines

and newspapers the electronic word-of-mouth allows marketers to interact

with consumers in understanding their needs, requirements and purchase

behavior(Petek & Maja, 2013). Hasled to secure its market share must also

concentrate on brand building.


38

Limitations of marketing mix as a marketing tool

Marketing mix as tool used by any firm could vary according to its

resources, marketing settings and the changing needs of its customers or

clients. Even the importance of some elements may vary from time to time

and decisions have to be taken considering all the factors. Thus a number

of strategies could be derived by using the marketing mix as a tool (Mittal,

2014) Thus in the case of Hasled taking into consideration its scarce

resources it has to derive cost effective strategies, but at the same time the

other elements of brand building, promotion etc cannot be ignored.

Corporate aims:

Hasled could be compared to a niche company, which serves a limited

segment of the market locally, offering good quality products that award

healthy profits (Pike, et. al., 2012). However as firms are vying for the LED

market due to its multiple usages for commercial and home purposes

(Huan, 2014) i t would be the appropriate time for Hasled to plan and shift

from a niche to a global company that could compete in the worlds market

with global players, initially by distributing products and later within a period

of five years manufacture its own products for the targeted consumers thus

combining product and cost advantage to gain competitive advantage (Pike,

et. al., 2012).

Hasled’s prime objective may not only be profit but it could be the creative

urge of most entrepreneurs desires to create a thriving company not

neglecting the survival of the business. However in most cases to realize

their full potential they have to part with a degree of control by offering a

share of action to external participants or stakeholders (Pike, et. al., 2012).

Fig.5, represents advantages and disadvantages of Acquisition, Alliances

and Organic development.


39

Fig.5: Buy, Ally or DIY (Do it Yourself) Matrix (advantages and

disadvantages).

Source: (Johnson, et. al., 2011, p347)

Hasled having scarce resources acquisition is ruled out. The best option

would be forming an alliance, with retailers, interior designers, architects,

building contractors having a sound network for marketing and distribution

of its products.

As Hasled also aims in the long term to design and create their own range

of products and also distribute them, they should look for potential partners

Buy

Ally

DIY

High Urgency

Fast

Fast

Slow

High Uncertainty

Failures potentially

saleable

Share

losses &

retain

buy

options

Failures

likely un-

saleable

Soft Capabilities

Important

Culture & valuation

problems

Culture &

Control

problems

Cultural

Consistency

Highly Modular

Capabilities

Problem of buying

whole company

Ally just

with

relevant

partner

unit

Develop in

new venture

unit


40

who would provide them with a global network for distribution of their

products, having the necessary infrastructure and human resources for

manufacturing its products on a large scale for meeting the demands of the

market, thus combining product and cost advantage for a competitive

advantage and also willing to jointly develop new products through R&D.

Power Palazzo a new entrant as discussed above, had commenced their

business with a meager Rs.80,000/- and today through alliances has a

business of worth Rs.120 crores, which is exemplary (Dutta, 2014).

The last option of organic development is not ruled out though it is slow.

Hasled could develop a separate and new venture unit or division without

involving the entire organization as at present it has the status of a holding

company (Johnson, et. al., 2011; Chandra, 2011; Pike, et. al., 2012).

Corporate finance:

As Hasled has scarce resources and at present are reluctant to forge any

alliances as they intend to keep their strategies and plans abreast.

However as they intend to organically develop forge ahead they need

finance. With lot of growth potential in the LED lighting industry, they should

not hesitate to borrow and go ahead with their plans. As already stated

earlier any firm to realize their full potential have to part with a degree of

control by offering a share of action to external participants or stakeholders

(Pike, et. al., 2012), thus the following options can be considered to raise

finance without parting control of its management.

As its borrowing seems to be low, they have a greater opportunity to raise

debt compared to a firm with high borrowing. Capacity to raise debt finance

depends on the industry and the security the firm can offer. As the LED

industry is in the nascent stage with high growth potential in coming years,

not only in the emerging markets of the BRICS nations but globally, banks

and financial institutions would be willing to finance as they gain to benefit

on tax reliefs (Pike, et. al., 2012).


41

Hasled could also raise finance through government backed schemes like

EIS (Enterprise Investment Scheme) offering attractive tax reliefs and

freedom from capital gain tax for investors, if investments are locked for

minimum of three years (Pike, et. al., 2012).

The UK government also provides fiscal incentives under CVS (Corporate

Venturing Scheme) by granting relief on corporation tax if investments are

locked upto three years and breather to the assisted company as the

investing company cannot hold more than 30 percent of the issuing

company’s ordinary share capital, thus minimizing control. However the

assisted company’s gross assets should not exceed £ 15 million or as limits

provided by the government from time to time (Pike, et. al., 2012).

Hasled can also raise equity finance through VC (Venture Capital) of fered

by specialist merchant banks wanting to buy stakes in firms with high

growth potential, even though involving a high risk of loss, with investment

locked in for five to ten years or more with funds over £ 250,000 split into

debt and equity to offer a degree of security, but anticipate an annualized

returns of 30 percent or more (Pike, et. al., 2012).

Conclusion:

I am immensely delighted to conclude this report as part of my in-company

project. The report manifests that the research carried out by me in the

interest of Hasled has detailed information with co-ordination between me

and Hasled. As Hasled has been recently incorporated garnering

information was difficult, as firms tend to keep their information abreast.

However I consider myself fortunate to get this opportunity to work with

Hasled in providing me scope in discussing my ideas based on the modules

covered in my learning.

The LED lighting industry is at its nascent stage and there is presently

tremendous potential for growth to firms who have already moved or are

planning to move into this industry, as they could gain and increase its

market share even though there are some big players in the global market.

Fig. 6 represents the industry life cycles of the various lighting industries.


42

Fig.6: Compares the industry life cycle of LED lighting to Incandescent

and Fluorescent lighting.

The Industry Life Cycle

C

Introduction

Time

Growth DeclineMaturity

Incandescent lighting Fluorescent lighting LED lighting

Source: Adapted from (Obembe, 2014).

Thus with an emerging market like India with all its strengths and opportunities

but not neglecting its weakness and threats, lighting contributes to about 50%

of India’s revenue, also 95% of energy consumed dissipates into heat. LED

products apart from its multiple usages can also reduce energy cost, reduce

fuel emissions and create cheerful ambience, being the drivers for a potential

business growth in the LED lighting industry. Hasled should in all probabilities

consider entering the Indian market by forming an alliance, with retailers,

interior designers, architects, building contractors having a sound network for

marketing and distribution of its products at the earliest. For promotion they can

choose to display their products in trade fairs held in India on yearly basis or

through social media which is cost effective. The LED lighting industry is about

to grab 80% of the global lighting industry (Lacy, 2013; Tenningas, 2013a;

Tenningas, 2013b; Daniel, 2012).


43

Personal reflection

As part of my internship I got a firsthand experience to observe the initial

startup of an SME with very limited resources but with the potential to establish

itself in the LED lighting industry in the years to come. During this span of my

internship I could understand the difficulties faced by the company and

garnering information was difficult as firms tend to keep their information

abreast. I have on the basis of the modules covered in my learning program

attempted to give recommendations through frame works, for cost effective

marketing in India, through alliances or organically and also means of raising

finance for future development and growth. I am also of the belief that the

director of Hasled has to add to his managerial position and in addition also

take the position of leader, as though leadership cannot replace management it

should be in addition to management, as management and leadership cannot

be mutually exclusive but over lap

Fig.7- From management to leadership

Source: Vershinina, 2014, p9)


44

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Appendices

Appendix-I

7) Sujana Energy Ltd (Hyderabad, India) with a turnover of Rs. 93.7 million

is in the business of renewable power generation, advanced LED lighting

and solar photovoltaic applications catering to consumers and commercial

markets worldwide. They manufacture indoor, outdoor and portable LED

lights. In 2010 it has drawn a strategic alliance with Nichia Corporation of

Japan to explore new opportunities in LED lighting and display

(Chakravarthy, 2011; Chakravarthy & Sen, 2013).

8) Optics & Allied Engineering Pvt Ltd (Bengaluru, India) with a turnover

of Rs. 80.51 million and has focussed on polymer and glass optics, optical

instruments, precision plastic moulds, moulded components and product

assemblies. It manufactures LED backlights optic lenses and plastics and is

equipped with a start of art injection moulding machines from Arbug -

Germany (Chakravarthy, 2011; Chakravarthy & Sen, 2013).

9) Abby Lighting &Switchgear Ltd (Mumbai, India) with a turnover of Rs.

79.74 million are manufacturers and suppliers of lighting systems to major

brand owners in the lighting industry. It has created its own brand named

Studio Abby. It has CNC (Computer numerical control) machines for

manufacturing its LED recess lighting, downlights, industrial and commercial

light products (Chakravarthy, 2011; Chakravarthy & Sen, 2013).

10) Reiz Electronics Pvt Ltd (New Delhi, India) with a turnover of Rs.

71.35 million has been designing and manufacturing in-house to deliver

high efficiency and reliability of its LED, mechanical, thermal, optical and

electrical components. It manufactures products for leading international

companies like IKEA and Osram. It has recently been approved for


53

supplying LED down lights to Bajaj Electricals Ltd (Chakravarthy, 2011;

Chakravarthy & Sen, 2013).

11) BinayOpto Electronics Pvt Ltd with a turnover of Rs. 61.3 million in

2009-10, has been a pioneer in LED illumination in India as well as the

world market for past three decades and has many patents to its credits.

Due to its indigenous manufacturing of filament lamps, qualifies it to develop

a solid state LED replacement (Chakravarthy, 2011; Chakravarthy & Sen,

2013).

12) REI Electronics Pvt Ltd with a turnover of Rs. 56 million in 2010-11 is

into electronic manufacturing services. It also manufactures energy saving

LED lighting products such as street lights, parking-lot-lights; industrial lights

office lights, billboard lights and garden lights and helps in conserving 75%

of the energy consumed using traditional lighting (Chakravarthy, 2011;

Chakravarthy & Sen, 2013).

Appendix-II

6) Sharp the Japanese electronics giant has been in the business of LED

technology for the past 40 years. It launched its first set of LED products for

the US market in 2010, which included seven types of LED lamps for

industrial and commercial use (Fehrenbacher, 2010). It has entered the

European LED lighting market with five product families and 46 lighting

products for retail outlets, show rooms, supermarkets and industrial

purposes with 5 year warranty and financing options. Its Yuji and Hayu are

cost effective LED lighting solutions that just use only one LED in a fixture to

save space but retain brightness of multiple emitters and displays colours at

CRI ˃ 80 which is excellent. They are designed to fit standard European 3 -

phase track systems and is versatile to fit any lighting design, and select

different colour temperatures with dimmable options. Hayu offers all the

features of Yuji but its light design can also highlight different areas and

products within the retail space and create different moods (Helderman,

2013).


54

7) Bridgelux is a US based company in Livermore, California. They are

leaders in manufacturing and innovation of LED lighting and provide high

quality LED arrays and chips which are high powered, cost-effective, energy

efficient and environmentally friendly and distributes its products globally in

38 markets. Its latest invention is the Vero line a smart product, which has

displaced metal core printed circuit board with a plastic body and does away

with soldering without faulty joints. The LEDs can be tracked and managed

as they have a 2D barcode and serial number (Cangeloso, 2013, Farnell,

2014). They won the most innovative product of the year in 2010 by

introducing the Helieon LED light system with Molex. They are used in

industrial and commercial buildings which has a life span of more than 10

years and cost $20 per unit (Fehrenbacher, 2010). They invented the chip

on board architecture which was evolution in improving light quality and

colour control and at the same time reducing cost and time in marketing

wide range of lighting applications. They have partnered with Toshiba to

commercialise the GaN on Silicon based LED chips and devices. They are

also working to make their products cost effective to attract customers,

Their view is not just a lighting industry but a technology industry (Detwiler,

2014).

8) Toshiba likes its peer sharp is also one of leading Japanese electronics

giant. In 2010 they launched the E-Core LED product line with 85%

reduction in power compared to incandescent bulb (Fehrenbacher, 2010).

Its LED NEOACCENT series are designed for shop displays with lighting

that gives clarity and brilliance, thus evidences its aims as an innovator to

produce adaptable and easy to use solutions for retail occasions and

locations being cost effective and efficient lighting (Toshiba, 2014a). It has

further developed on its E-Core LED products by launching its E-Core

weatherproof-II, new energy efficient lighting solutions, thus overcoming the

challenges of rain, dust and wind, mostly used for industrial and street

lighting (Tsoshiba, 2014b). In a span of four years it has emerged as one of

the key players towards advancements in LED lighting by using its dual

expertise in electronics and lighting and a global player in LED lighting

market in Europe, through Toshiba Lighting Systems (Europe). It intends to


55

cover the needs of all four key market segments, being home, office, retail

and outdoor for providing comfortable residential lighting, efficient office

lighting, attractive shop lighting and intelligent outdoor lighting. Its Lyon

smart community project, Transparent OLED (Organic LED), LED street

lighting and LED flood light series speaks of its comprehensive line up of

solutions (Toshiba, 2014c). Its lighting renovation of the Mona Lisa and the

Red Room in France shows tremendous improvement in portraying the

colours of the painting and while reducing the UV and IR radiation it has

reduced energy consumption. Its approach to create a new akari (lighting)

culture to bring harmony with the people and environment makes it one of

the most leading eco-conscious companies, contributing to reduce

environmental burdens and create a global culture (Toshiba, 2014d).

Appendix-III: SWOT analysis of India as a business location discussed

Strengths:

1) Young urban and large rural population with growing disposable

income: The urban and rural population constitutes a large domestic

consumption market and as urbanisation spreads to the rural areas the

growth in consumption patterns is certain for decades to come (Sithemsetti

& Borstorff, 2012). The median age of the Indian population is 26.2 years,

compared to Germany 44 years. It boasts of having a population which

consist 50% below the age of 25 and 65% below the age of 35. Majority of

the urban Indian consumers are educated well employed with a decent

salary and enjoy the freedom, prosperity and liberty of the western world

and the trend is catching up with the rural Indian consumers also (Sain, et .

al., 2012).

2) Increasing levels of literacy: The overall literacy level of the Indian

population stands at 52%. However compared to the literacy level of the

urban areas the rural literacy level stands at 36% but its growing, as by

culture Indians give education more importance and the trend is also

followed suit in the rural areas and many educational institutions are being

setup for the rural population (Kotni, 2012).


56

3) Availability of products, raw materials and human resources

through emergence of a working class: MNCs have chosen India as it

makes excellent business sense, having the combination of solid economic

growth and unlimited strength of human resources, which very few markets

in the world provide. It is blessed with a large labour force which is skilled

and can be evidenced through its Information Technology greatest success

story in the world (Sithemsetti & Borstorff, 2012) and not neglecting the

Indian automotive sector which is expected to top the world in car volumes

with about 611 million vehicles to ply the Indian roads by 2050. It has a

turnover of US$ 35 billion and employs about 13 million workforce (Sain, et .

al., 2012).

4) Huge demand for diverse products and changing lifestyle: The

Indian market has potential in offering opportunities not only for the

domestic but also for the global players as the demand for diverse products

are rapidly on the rise. Also the changing lifestyle for a life of comfort and

the attraction for global brands is rampantly on the rise. Companies like

Wal- Mart and Carrefour, have already entered India and Tesco is waiting to

obtain the green signal from the government and general public. The Indian

customers are getting educated towards quality pertaining to the products

and services which would benefit them (Bansal, 2014; Bhaskaran, 2012).

5) Steady growth rate: from the post liberalisation period after 1991,

India’s growth rate has been steady at 8% to 9%, except in the recent

period of 2012-13 and 2013-14 when a number of scams of the than

prevailing government had been unearthed. The reforms had a tremendous

positive effect on various industries leading to growth, prosperity and

employment (Sain, et. al., 2012).

Weaknesses:

1) Lacking in infrastructure and distribution facilities particularly in

the rural areas: The lack of adequate infrastructure and investments has

curtailed the growth from spreading to the rural areas and have restricted


57

the growth only to the urban areas, which is now at a saturation point

(Bansal, 2014; Babu, 2012). Wal-Mart was responsible for leveraging the

infrastructure in US for constructing its supply chains for its success and

India should capitulate on such positives (Bhaskaran, 2012).

2) Lack of Research and Development (R&D) in technologies: Though

there is advancement in science and technology in areas of communication

systems, automobiles, architecture, computers etc., they are lagging behind

the developed countries who are far ahead in R&D as they are cash rich

(Gaur & Shome, 2012; Sisodia & Telrandhe, 2010). Thus there is scope for

the foreign institutions and investors to invest in India, to capitulate on the

favourable policies pertaining to FDI, while giving R&D a boost.

3) Neglecting development activities in rural market leading to low

consumption levels: Due to the delays in development of the infrastructure

facilities most particularly the roadways and railways, has restricted

businesses and corporations to reach and serve the large rural market

(Kotni & Prasad, 2012) . There is a huge responsibility on the shoulders of

the government to ease the emerging issues and challenges that are being

faced by the rural markets in areas of transportation, communication, roads,

credit institutions, crop insurance etc., as India’s future lies in the rural

market ( Kumar, 2013, Sithemsetti & Borstorff, 2012).

4) Neglecting the manufacturing sector and greater dependence on

service sector: The Industrial production is not very impressive though

there has been a steady rise, this can been seen from its standing as the

world’s eleventh largest importer compared to being the seventeenth largest

exporter (Sithemsetti & Borstorff, 2012). However foreign brands like Nike,

Reebok, Adidas, etc. have wholly own subsidiaries that sell their products to

the Indian consumers by franchising internal distributers and the

government should encourage such activities, wherein with investment

employment is also generated (Babu, 2012). Also reforms in industrial

sector wi ll divert the surplus labour from farm to non farm sector in

particularly the rural areas thus generating employment (Gaur & Shome,


58

2012). Compared to China which has excelled in mass manufacturing, India

has excelled as the worlds back office due to growth in its service sector

(Aizenman & Sengupta, 2013).

5) Labour laws and tax systemsare not business friendly: There is a

lack of uniformity in the tax systems in India, it has a complex indirect

taxation structure, with varying tax rates, with multiple taxes imposed by

centre as well as the states at times leading to double taxation (Baskaran,

2012). Indian labour laws still revolves around the British period and need

reforms to raise the demand of labour and simultaneously to be business

friendly to attract investments (Biswas, 2014).

Opportunities:

1) Change in socio-economic lifestyles: The income of the rural

population of US$ 5 per day is estimated to increase three-fold. The middle

class is expected to grow by 208 million in 2025 from 32 million as

estimated in 2005. India is no longer an agrarian economy as farming has

declined from 63% to 50% in 2010 and an increase in supplementary

occupation apart from farming to enhance income(Kumar, 2013). The rural

market is surging at the rate of 25% annually compared to the urban

market. They seek for diversified products and presently avail branded

products though not easily. Also the rural market is sti ll at its nascent stage

compared to the matured urban market (Kotni, 2012).

2) Favourable government policies giving rise in development of

infrastructure facilities and technologies: The present government which

once opposed foreign technology is on the path of opening 100 percent

Foreign Direct Investment (FDI) in defence, housing, and various other

sectors thus giving a boost to the crippling economy. India with a strong

domestic industry is quite capable to compete with foreign competition and

flourish. It has already liberalised its retail sector which is expected to grow

to US$ 800 billion in 2015. Currently India has opened 51% FDI for multi

brand retail and 100% FDI for single brand retail. Ten states have accepted

FDI for multi brand retailing (Punj, 2014; Mishra, 2014; Sithemsetti &


59

Borstorff, 2012; Dash & Sabat, 2013). The reduction in the basic customs

duty for LED products from 10% to nil is also a boost to the LED lighting and

other industries, wherein MNCs and investors would now consider to invest

in manufacturing and R&D towards technologies (Kumar, 2013, Budget,

2014).

3) The untapped rural customers with rising income and rapidly

changing habits and taste: The Indian growth story is now spreading to its

rural areas and is experiencing not only a rise in income but also in

consumption and production, especially with the rapid growth in

communication due to the internet and mobile revolution. 61% of the total

41.8 million enterprises are located in the rural areas. The FMCG (Fast

Moving Consumer Goods) sales have hiked to a growth of 6-7%

contributing between 40-50% to the countries revenue. Most of the rural

households own a mobile phone and active internet users have increased at

3.7 percent in 2012 from 2.13 percent in 2010. It is estimated that the lowest

income group will shrivel by 60% and the higher income group would double

in 2015-16 (Kumar, 2013; Kotni, 2012).

4) Rising organised retail sector: The Indian retail sector has grown in

size of more than $ 350 billion and is estimated to further grow by 10 -15%

annually and is the largest contributor to the GDP (Gross Domestic

Product). It has organised and unorganised retail sector, the organised retail

sector emerged in the economic reforms after 1990 and consist of only 10%

of the total retail market. The remaining significant share of 90% consisting

of the unorganised retail sector and waiting to be exploited (Bansal, 2014;

Kotni, 2012; Babu, 2012).

5) Investment opportunities: India has unlimited human resources with a

rock-solid economic growth, which represent short and long term growth

and profit opportunities. MNCs and investors who are in the fray of investing

in potential markets are eyeing the BRICS nations. Even during the

recession its growth was unaffected, except for a period of six months

largely due to the strong domestic consumption. The liberalised trade and


60

foreign investment policies, adding to a consumer market with rising

disposable income of the middle class and a young population, has created

a readymade demand for goods and services, which need to be exploited

(Sithemsetti, & Borstorff, 2012). Post liberalisation has given numerous

MNCs the opportunity to invest in India’s various industries, thus enabling it

to increase its foreign reserves (Sain, et. al., 2012).

6) Development of technologies through joint ventures: For example,

the dependency on oil import is very high in all the developing nations

including India, as it spends huge amounts of hard currency which incurs

high cost. Households in developing nations spend 100 times more for

electricity compared to their developed counterparts as they depend on fuel

based lighting. Thus development of technologies through joint ventures will

not only reduce cost but also greenhouse emissions by replacing fuel based

lighting with LED lighting (Mills, 2002). Intel has spent about US$ 10.1

billion on R&D in 2013 worldwide of that $ 2 billion was invested in India

alone. It has encouraged students to create LED displays that respond to

social media or for tackling more complex projects, which can be controlled

through a smart-phone (Srinivasan, 2014).

7) Lack of access to electricity: The use of biomass fuels for cooking and

heating covers 90% of the rural population and 10% of the urban

population. These households are chained in an energy poverty cycle,

which not only hampers sustainable development but their prospects to

move up the poverty line. The energy services required by these

households are mainly for cooking, lighting and heating. It is estimated by

International Energy Agency (IEA) that out of the 50% demand for increase

in global primary energy between 2015 to 2030, 45% of this hike will be in

India and China (Pachuari & Jiang, 2008).The government has invested

INR 480 billion in the year 2010-11, to drastically improve 100% road

connectivity, electrified villages, literacy, communication systems, 80% brick

houses with 50% mobile penetration (Kumar, 2013).


61

8) A mixed market of low income and highest income households:

India is basically considered a market of lower middle income economy with

a GDP/capita of $ 3703 PPP (Purchasing Power Parity). The number of low

income households in the rural areas, are twice as compared to the urban

areas. However the urban areas have 2.3 billion of high income households,

in comparison to 1.6 million to the rural areas (Kotni, 2012; Sithemsetti, &

Borstorff, 2012). Thus having a diverse market for various income groups

that the businesses and corporations can target.

Threats:

1) Rising grey market activities: As the distribution of wealth is uneven

between the urban areas and the rural areas, the gap between the urban

and the rural population pertaining to knowledge of international brands is

diminishing though there is lack of knowledge on brand awareness with the

illiterate rural and urban consumers. Also the changing habits and the

diverse taste has motivated the rural as well as the low income population in

the urban areas towards purchasing grey market copied branded products

(Kumar, 2013; Kotni, 2012; Sithemsetti, & Borstorff, 2012).

2) Lack of knowledge to identify products (brand awareness): The

rural population of India consists of almost 2/3rdof its total population and

has a literacy rate of 36%only. Thus it is bound to understand that they

could easily be bullied in buying brands due to lack of knowledge on brands

and also because of ignorance of law in purchasing grey market products

infringing copyrights and other related acts (Kumar, 2013; Kotni, 2012;

Sithemsetti, & Borstorff, 2012).

3) Prevalent customs and traditions particularly in rural areas: The

rural areas life revolves around customs and traditions and the people

immediately adapting to foreign practices is rare. Also the rural customers

are very choosy in purchasing products. They buy products or brands that

associate with them, especially in celebrations, rituals, festivals, fairs, etc.

(Kumar, 2013; Kotni, 2012; Sithemsetti, & Borstorff, 2012).


62

4) Lower literacy level in rural areas: Though the literacy level is low in

the last 10 years literacy has increased from 36% to 59%. However the

literacy level of the rural areas compared to the urban areas is less. The

total average of literacy in India is 52% comparing with the rural literacy

level at 36% (Kotni, 2012). Nevertheless it is a good sign for branded

products.

5) Delay in implementation of policies: As India has a bicameral system

in politics wherein the centre and state, can legislate laws on the same

subject. For example, there are no uniform tax laws which lead to double

taxation and giving rise to litigation and the delay in raising the limit of FDI

due to wide national protest by small traders. Thus ultimately delaying and

creating hurdles in the implementation of policies against growth

(Bhaskaran, 2012; Bansal, 2014).

ICP-Hasled Report

Documents

company project report201314

company single

diodes products

hasleds products

indian led market

quality led light

limited resources of

necessary information