Ingersoll Rand Group1

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Presented By Group 1


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BACKGROUND

Deals in Stationary Air Compressors

Market share 30%

Manufactures 3 main products y Reciprocating compressors

y Rotary compressors

y Centrifugal compressors

Introduction of a new 200Hp Centrifugal model CENTAC 200

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STATIONARY AIR COMPRESSOR MARKET

Classification of Products by sizey Small - less than 25 Hpy Medium 25 300 Hpy Large greater than 300 Hp

Market size in 1985 - $660 million Ingersoll Rand leading supplier in the US

capturing 30% of the market Major players

y Joy (Centrifugal Compressors)y Sullair (Rotary Compressors)y Atlas Copco ( Stationary Compressors)

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STATIONARY AIR COMPRESSOR

DIVISION

Ingersoll Rand Sales in 1985- $2.64billion

Manufacturing operations 16 countries Sales office- 40 countries

Distribution Arrangement 80 countries

Very good network of distribution

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DISTRIBUTION SYSTEM

Four types ofDistribution Channels-y Direct Sales Forcey Independent Distributorsy Air Centres

y Merchandising Teams Direct Sales 26 Territories

y Sales of >250 Hp Recips & 450 Hp Rotaries and allCentrifugals

Distributors & Air Centresy Sales of


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BUYING BEHAVIOUR

Direct Sales -y Large Compressors (>300Hp) purchased by Contractors like

Bechtel, General Motors. Used in custom designed products.y Quotations contained detailed specificationsy High degree of technical expertisey Service requirements are complexy Eqpt being costly buying decision taken by the group.y Lead time of 6 8 weeks acceptable to user.

Distributors & Air Centresy Selling of medium & Small compressors

y Off-the-shelf availabilityy Lead time of 1 weeks

Merchandising Teamsy Selling of less than 5 hp compressors.y A different set of customers, plumbers, Small contractors etc.

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PROBLEM - INTRODUCTION OF

NEW PRODUCT IN MKT

Product - Centrifugal compressor (200 Hp)

Model - CANTAC 200

Spare parts reqmt - Less 2 3% of initial

cost per annum.

Operates @ very - 50000rpm

high speeds

Repairs - Regularly required 7


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PROPOSE A CHANNEL

OF DISTRIBUTION

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OPTION 1 - DIRECTSALES

Advantages

y Availability of trained manpower

y It has well established Service Capabilities

y Availability of Spare parts as and when required Disadvantages

y Not a lucrative offer as the Sales reps are Elephant hunters,they go for Large orders

y The product would be a lower category product which wouldnot interest the Sales rep

y Existing set of customers Do not fall in 200 Hp category

y Difficult to get new customers considering Network

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OPTION 2 - DISTRIBUTORS

& AIR CENTRE

Advantages

y Willingness to upgrade their product range from Small &Medium to LARGE.

y Well established Networky The product is consistent with existing Hp assignment

y Good reward for the Distributor IR would bemotivating them to sell the new product.

y Increase in Loyalty quotient with IRy The product requires less spare parts, while distributors

face a problem of supplying spare parts.

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OPTION 2 - DISTRIBUTORS

& AIR CENTRE

Disadvantages

y Deviate attention to Large compressor

y Intense Technical Training required to provide requiredservices

y Risk of being dependent on a particular channel

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GROUP RECOMMENDED OPTION

Option 2 - Distributors recommended

Provide necessary trainings

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ROTARYSCREW

Oil Flooded- Single Stage

Advantages

y

Low 1st cost; Low maintenance $y Simple packaged design

y Adaptable to variable speed drive

Disadvantages

y Somewhat lower efficiency

y Moderate durability - 10 15 years onaverage

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CENTRIFUGAL COMPRESSORS

Advantagesy Only real option over 600+ Hp

y High air quality- 0 PPM oil carryover

y Moderate to high efficiencyy Longer design life than Rotaries

Disadvantagesy Higher initial cost

y Fluid cooled only

y Power reduction down to 70% flow

y Constant speed operation

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QUESTIONS IF ANY ???...

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THANK YOU

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Ingersoll Rand Group1

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