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DEVELOPING A MARKETING STRATEGY TO LAUNCH STORAGE POWER BACK UP PRODUCTS IN WESTERN UTTAR PRADESH
FOR
ACADEMY GUIDE
INDUSTRY GUIDE
By Satish Varma Dandu PGDM 09DM034 Birla Institute of Management Technology, Greater Noida
Date: ___________
BIMTECH SEAL
Acknowledgement:
As this report stands at completion, the time is apt to look back at various stages of its development and acknowledge the fact that it is a result of inputs from various individuals I would like to thank my mentor Prof R. J. Masilamani without whose relentless guidance and support I would not have done justice to the project. His words of wisdom have given me the opportunity to grow as a student of business. I extend special gratitude to Mr Kumar Devendra who is my industry mentor for helping me understand the product operations and guiding me during my field study. I would like to thank my team mates Amit Kumar Jha and Manish Karn for their support and encouragement during the Project. A special thanks to my friend Rohan for all his support during my project report. I would also thank my parents who have been my inspiration throughout my life.
CONTENTS
S.no
1 2 3 4 5 5.1 6 7 7.1 8 9 9.1 9.2 9.3 10
Particulars
Executive Summary Introduction Industry profile Company profile Project Objective Course of action and methodology adopted Product and its operation Observations Field study in selected districts of Utter Pradesh Competitive Environment Distribution Channel Current Distribution Channel Proposed Distribution Channel Things to be considered while selecting the Distributers Evaluation of candidates worthy of Distribution of the company products Limitations Recommendations Product Price Distribution Promotions Annexure Check List Bibliography
Page No
1 3 4 7 8 9 10 20 21 32 36 36 38 39
41 45 46 46 46 47 48 49 49 50
Fig 1 : Fig 2 : P :
Lead acid battery Chemical reaction Chemical reaction to produce Voltage Pictorial View of the Battery Manufacturing
10
10
12
B1 :
5
21
22
District
24
R2 : Rough Sketch of potential battery markets with comparative assessment in Muzaffarnagar Block
25
B3 :
9
27
R3 : Rough Sketch of potential battery markets with comparative assessment in Bijnor Block
28
10
B4 :
11
29
R4 : Rough Sketch of potential battery markets with comparative assessment in Moradabad Block
30
12
: Comparison of Single District Players price List and warranty service: : Comparison of Multi District Players price List and warranty service:
S1
32
13
S2
34
14 15
D1
37 :
16
1. Executive Summary:
Nabco Batteries Division of Balaji Storage Batteries Ltd has recently planned to Launch Sealed Batteries in the Range of 20 and 40 amps with Tubular plates first of its kind in western Utter Pradesh, under the Brand name Nabco TV tube.
The company aims to launch this product first in selected districts of western Utter Pradesh after exploring and understanding the realistic demand for this product, identifying the local competitors, designing a proper distribution channel and selecting appropriate distributors who can be developed into long term partners.
Nabco is known for the Quality of its plates both in standard and tubular versions which it has been supplying to major battery manufacturers under the brand name Nabco for over a decade. Realizing the huge potential for assembled batteries, the firm has been marketing its own assembled batteries since the last 5 years.
Present situation of the company: It has been selling batteries 1. Without warranty and Bill (if distributors insist bills are made available) 2. without any permanent distributors/ Dealers, 3. No permanent sales force 4. No documented proof of battery performance and battery life. Attempts have not been Made to test and evaluate its products against competitor products.
I have travelled extensively through districts assigned to me investigating the market for storage batteries, meeting and discussing relevant issues with existing and potential distributors and observed customer interaction with dealers. A key focus was in identifying and exploring popular Battery Market locations in selected blocks of Meerut, Muzaffarnagar, Bijnor, Moradabad based on Customer Preferences, Dealers support for small batteries and Transportation facility to user locations in small towns and villages.
After analysing the Prices, After Sales Service, Incentives offered by Competitors through inputs given by dealers/Distributers in these districts, initiatives and responses to the opportunities and challenges that have emerged have been made.
The most important factors which influence the Distributor or dealer are the Margins from the product, and the convenience we provide during after sales service. It has been observed that the customer in this segment is not at all aware about the product he buys, but it is the trust he puts in the dealer which influences him the most while selecting a particular Brand.
We have to understand that although the customer and dealer gain confidence from the promotional efforts of various companies, when it comes to the actual sale it is the dealers motivation and ability to influence that is critical. The dealer is primarily motivated by the margin he is given by the company and by his own scope for maximizing the earning he makes on sale of the product.
In this regard, the facilities offered by a company for after sales service and transportation of material to the distributor and therefore to the point of sale are also key factors in the competitive race to increase sales and market share for players in the battery market
I have sold some batteries to the Distributers/ dealers for Quality testing and to understand Market Demand. Later I have identified 10 dealer/ distributers from these districts based on their Interest for Nabco products, sales record, their sales network and commitment to customers.
2. Introduction:
Balaji storage batteries ltd is an unorganised power & energy storage battery company which has been established 1969 but it has been taken over by a Family owned business in 1988 and started its full fledged battery operations from 2005 covering both Standard and tubular battery product range. Before this Nabco brand has been leading battery plates supplier in most parts of the Utter Pradesh which is famous for its Quality in products.
After three decades of experience in plates business, they have entered in to battery business understanding its potential market and to spread its quality fame even in Battery Business. Though this company is known for its operations excellence does not have any proper marketing department to make it a branded product. Even after 5 years they are still in unorganised market selling the Batteries without warranty to their temporary distributers by just giving them huge margin as an incentive. Recently after understanding huge potential market for Rural batteries which is in a range of 15 to 50 amp, launched a product by name TV tube battery with two variants 20amp- 3 plates and 40 amp- 5 plates almost being the first company in this tubular segment, still lags the market share because of lack of proper marketing strategy.
Now our aim to launch this product first in western Utter Pradesh by understanding the potential market places for this Tv Tube , identifying the local competitors, Designing Proper distribution channel by selecting the distributers who can work for long term relations of the Company.
The domestic battery industry is poised to more than double within four years given the current rate of growth of over 20 per cent per annum, according to Mr S.B. Ganguly, Chairman, Exide Industries Ltd. He said that the organised sector accounts for total current turnover of Rs 5,000 crore, and the unorganised sector about three times that of the organised business.
India, now, accounts for about 14 major automotive manufacturers, and all of them are growing rapidly in India, and also looking at making India their home for exports. This would further enhance the overall market base. But what is significant is that the industrial batteries consumption is going up with the economy booming.
The Indian Starting, Lighting & Ignition (SLI) Lead Acid Battery Industry has seen tremendous changes in the last 2 to 3 years in the passenger cars, utility vehicles, light and heavy commercial vehicle segment with some commendable and bold steps being taken by some of the leading manufacturers trying to alter the perception of the battery as a commodity to the battery as a brand. Factors driving this change could be because of the pace with which the Indian auto industry over as been growing over the last 1 to 2 years, the entry of new battery manufacturers into the market and the increased knowledge base among the users.
This revolution is led by Amara Raja Batteries Ltd., which has entered in to the automotive battery segment which has a Joint Venture (JV) with the leader in the automotive battery industry, i.e., Johnson Controls Inc. USA. Interestingly, the lead taken by this relatively unknown company of the industry has been lapped by all so as to capture a sizable share of the lucrative replacement market due to the margins and the visibility of the brand.
Historically, the Indian automotive battery market was original equipment (OE) driven by one dominant player, i.e., Exide Industries Ltd., in the organized segment followed by many manufacturers from the unorganized segment especially in the light and heavy commercial vehicle segment. Exide at a point of time controlled nearly 100 percent of the Indian auto OE market and was the biggest name in the Indian automotive battery industry.
All this was changed in the late 1990s with the entry of battery manufacturers like Amara Raja Batteries Ltd. (ARBL) (JV with Johnson Controls Inc. USA) and Tudor India Ltd. (the Indian arm of Exide Technologies). Both entered the market with technologically advanced products and ARBL became the first company to launch the Zero Maintenance Free Batteries for the automotive segment.
ARBL completely repositioned the product with innovative marketing and distribution strategies that have taken the industry by storm and are credited with creating a separate category for the product. This initiative of educating the consumer was quickly grasped by the other manufacturers and a very aggressive marketing program was unleashed. This move saw the otherwise dull industry flush with a lot of action and enthusiasm that generated a lot of interest among the consumers and the dealer distributor network which is an important link in the chain. Today, the battery is being spoken of in the industry in the same breath as the passenger car which exhibits the visibility and awareness that the strategy has created.
The total Indian storage battery market is approximately estimated to be more than US$ 500 Million with the automotive battery segment contributing 60 to 65 percent of the overall market value. In terms of volumes, the overall consumption of automotive batteries could be around 6.3 million units with the OE segment comprising around 1.2 to 1.3 million units per annum, according to an interview with the Executive Vice President of ARBL that was published on the website chennaibest.com.
This being the case, the aftermarket is definitely attractive with its sheer size and is lucrative due to better price and credit realization. The late 1990s also saw a surge in the sales of the passenger car segment for around 2 years due to certain factors like the software boom, lowering of interest rates, etc. - which increased the overall sales of batteries. The automotive
sector did not see any significant growth during the early part of the new millennium and is slowly showing signs of growth during this financial year. This factor also adds to the demand in the aftermarket as more number of cars were sold around 2 to 3 years back which is generally the life of a lead acid battery. The replacement automotive battery market is expected to grow at a healthy rate in the coming years.
The SLI market in the Indian subcontinent is a highly fragmented industry with a few manufacturers in the organized segment and a lot many belonging to the tier 2 / tier 3 categories which have a regional presence and thrive especially among the semi urban and rural areas. These companies mainly cater to the replacement market of tractors / farm equipment and heavy commercial vehicle segments which are a price sensitive market.
The market share occupied by the companies belonging to tier 2 and tier 3 categories could be as high as 50 to 55 percent of the replacement market which is a significant share in volume terms. Also, this is a high growth market as the batteries and the vehicles generally will be abused and the rate of replacement in this category is generally high compared to passenger car segments.
Recently we have seen new players challenging the Domestic batteries market with the entrance of organised players like Luminous, Okaya, Microtek, and Su-Kam playing a significant role in increasing the organised players market share.
4. Company Profile:
Nabco Batteries Division of Balaji Storage Batteries Ltd founded in 1969 taken over by business Family in 1988 and started fully fledged tubular batteries from 2005. Nabco has established along successful history of manufacturing and exporting Automotive, Tubular, Tractor Batteries and Plates. Nabco has been successful executing bulk order for State road Transport, D.G.S and State electricity Board, M.N.E.S and many more organizations. Nabco is based on 5 pillars of business ethos: Honesty Best quality Competitive Prices Prompt Delivery Hassle Free Services Today Nabco has an installed capacity to produce more than 2 million Tubular Plates monthly to meet the ever growing rate of Tubular batteries and Plates. There are few manufacturers in the small Scale battery Sector who manufacture battery and battery plates systematically. In Nabco it has been constant endeavour to provide quality products at the most competitive prices to the customer. They are among the first to get ISO 9001:2000 certification for quality control. They always take care of all manufacturing process personally and manufacture the best quality product by using superior quality raw material and implementing T.Q.M at every stage of manufacturing process.
5. Project Objective:
Nabco Batteries Division of Balaji Storage Batteries Ltd has recently planned to Launch Sealed Batteries which are in the Range of 20 and 40 amps with Tubular plates first of its kind for Domestic Purpose in western Utter Pradesh.
DEVELOPING A MARKETING STRATEGY TO LAUNCH STORAGE POWER BACK UP PRODUCTS IN WESTERN UTTAR PRADESH
Secondary Objectives:
1. Understanding about the product and its operations 2. Understanding about the districts and potential market for TV-Tube Battery in these districts 3. Identifying and assessing the competition. 4. Locating potential distributers for long term partnerships. Establishing appropriate distribution channels to support the Marketing Strategy.
Lead-Acid Battery: Batteries use a chemical reaction to do work on charge and produce a voltage between their output terminals.
The reaction of lead and lead oxide with the sulphuric acid electrolyte produces a voltage. The supplying of energy to and external resistance discharges the battery.
1. Plates (Positive and Negative) 2. Separators 3. The Outer case or Housing 4. Terminals (Positive and Negative) 5. Electrolyte (Sulphuric Acid) 6. Inter cell connectors 7. Tubular Bags for only (Tubular plates) A battery performance is mainly dependent on the quality of the lead used for manufacturing the plates. Generally Batteries have 6 cells though there could be 2 cells in some batteries. Each cell has odd number of plates for example 3, 7, 11, 13..21, 23, 25 Every cell has one Ve plate more than +Ve plates. Ex: If a cell has 7 plates then there are 4 Ve plates and 3 +Ve plates. Total numbers of plates in this battery are o 7 * 6 =42 plates o 24 Ve plates and 18 +Ve plates. The skeleton of the plates is called Grid which is manufacture by lead alloy. To get Ve plates you do a process called Pasting (Grey oxide + Red oxide ) To get +Ve plates you do process called filling were with the help of mixer which is a combination of Grey and Red oxide, you fill in to the tubes and insert into the Grid. The charging capacity of a battery depends on the Mixer proportion. I came to know that when you increase Red oxide in the mixer the battery gets fast charging.
P 3)
P 4)
P 5)
1) Solid Lead from which we generate Lead oxide and lead alloy 2) The melted lead is poured into this equipment which has the required structure of Grid 3) The lead alloy is therefore cast into this shape. 4) These are then coated with mixer of Red oxide and Gray Oxide which are used for Pasting on Negative paltes
5) The plates which have been pasted with the above mixer are then pressed and later dipped in to liquid( water + acid)
P 6)
6) In this picture we can find Acid+ water mixer, drying of paltes, charging of plates and charged plates which have changed their color to Black.
P 7)
P 8)
7) Sample Grids and Plastic Bags for Tubular batteries 8) Finished Tubular plates which have been filled with red oxide and Greay oxide Mixer powder
P 9)
9) Welding of the Negative plates, Separators which are going to be used between Positive and Negative plates are being Tested, inserting separators between positive and Negative plates.
For 20 amps TV tube we have 6 cells, 3 plates (2 -ve and 1+ve) in each cell. This finished set will be kept in Outer case along with required amount of acid.
P 10)
TV Tube
Battery types:
Batteries are divided in two ways, by application (what they are used for) and construction (how they are built). The major applications are automotive, marine, and deep-cycle. Deepcycle includes solar electric (PV), backup power, and boat "house" batteries. The major construction types are flooded (wet), gelled, and AGM (Absorbed Glass Mat). AGM batteries are also sometimes called "starved electrolyte" or "dry", because the fibreglass mat is only 95% saturated with Sulphuric acid and there is no excess liquid.
The most common type of battery in renewable energy installations is the lead acid battery. Batteries based on a different chemical process are available and will probably play a role in the future. For now they remain too expensive. Nickel-Cadmium, Nickel-Metal-Hydride, Lithium-ion etc. based batteries are already common place in portable electronics and even used in hybrid cars. In this outline we will discuss only the lead-acid type. A perfect battery should be cheap and indestructible, it should be able to store much energy per Kg. weight and very efficient in accepting and releasing this current and able to keep this charge safely stored for many months. Plate technology, lead composition and the presentation of the acid are important determinants of these qualities. Plate technology The more robust, the heavier the plates, the longer a battery will live. The strongest batteries use tubular plates, while cheaper ones have thin, flat plates. Batteries which are being used for House hold are of Two types based the Plates which are being used inside the Battery. You can either have,
Standard plates Or Tubular plates based on the demand. I have explained the advantages of Tubular plates in the end.
Lead composition Plates made of pure lead have very good cycle qualities and a low self-discharge rate. But pure lead is soft and easily deformed. To make the plates of a pure lead battery sufficiently strong they have to be thick, resulting in a very heavy battery. By using lead-alloys one can avoid this disadvantage. Lead containing a small amount of Antimony results in a much stronger metal. Batteries constructed with this material are lighter due to their thinner plates. A negative quality is that the material degrades more easily during deep discharges and stimulates gas formation during the charging phase. Calcium-lead is also stronger than pure lead, but it gasses much less than antimony-lead during the charging cycle. Compared to Antimony-lead it resists less well deep discharges. The presentation of the electrolyte In vented-flooded-lead acid batteries the electrolyte is a straight forward, watery solution of sulphuric acid. It is liquid as water. These batteries have to stand upright as spilling of the electrolyte can cause serious problems. Particularly during the charging phase, gassing occurs in all types of batteries. In the vented ones, this mixture of hydrogen, oxygen and water damp will escape, and cause a slow, but steady loss of water. These batteries need periodical topping up with distilled water (Never use battery acid). Certain brands provide caps with a build in catalyst which recombines the hydrogen and oxygen into water, which will drips back into the battery. The net loss of liquid is therefore less and the topping up frequency is reduced. But it is a good habit, whatever type of battery you have, to look at them once in a while. The least one should do is keep them clean and free of dust. In applications where periodical inspection is truly a problem (as in remote unmanned stations), there is a choice of maintenance free batteries. In general they are far more expensive than the equivalent vented battery. The VRLA battery (Valve-Regulated-Lead-Acid): The cells of these batteries are closed with a cap containing a catalyst which recombines a large part of the hydrogen and oxygen
back into water which drips back into the cell. There is still a security valve to release excess of pressure if that might occur. In Gel batteries the electrolyte is changed into a jelly by mixing in a silica gel. Gel batteries have generally a slightly longer life expectancy than vented batteries and are completely closed. They can be installed in any position. In AGM (Absorbed Glass Matt) batteries the electrolyte is absorbed by special glass mats used as separators between the plates. Some of these batteries can be stacked in any desired position, which can be useful. As said before, all batteries produce gas, also maintenance free batteries. Gassing occurs particularly during the charging phase and, as these batteries are sealed, overcharging can cause explosion due to excess gas formation. (Vented batteries, on the contrary, will benefit from periodical overcharging, called equalizing)
Battery efficiency Do not expect that all the energy you put in a battery, will also come out. No process in
nature is 100% reversible. Energy is lost as heat and in the generation of hydrogen gas. In calculating the size of your system, it is safe to assume a 10% loss in the charge and discharge process. Battery Capacity The capacity of a battery, the total amount of electrical energy you can store in it, is usually expressed in Ah (=amp/hour). For a given battery this capacity is not a constant. It depends on the rate (=the speed) of discharge (the quantity of amps one drains per hour). During a fast discharge much less energy will be recovered than during a slow discharge. The capacity (= C) of the battery is often given in combination with the C value, C5, C10, C20 or C100, The C stand for the amount of hours in which the battery was discharged: 100Ah at C5. This battery has a capacity of 100Ah battery when discharged completely in 5 hours. Notice that the same battery could be sold as perhaps even as 200Ah in C100. One therefor should always compare capacities with corresponding C values.
A cold battery gives less easy its charge away as a warm one. A warm battery therefor can deliver considerably more energy in a measured amount of time than a cold one (as some of us have experienced when starting their car on a freezing morning). How to measure the State of Charge Depending on the type and brand of battery, the specific weight of the electrolyte of each cell of a fully charged battery could be 1,28gr/l. (in some batteries it is 1.26). After discharging this battery for 20% (thus 80% charge left) you will measure 1,25 gr./l., and if discharged for 40% (60% charge left ) it is 1,22 gr/l. If no charge is left the specific weight is about 1.140. Measuring this specific weight is an accurate but unpractical way to estimate the state of charge of your battery. It is also a way to check on the condition of the battery. If 5 cells indeed are 1.28 but one cell is 1.24 than that cells is corrupt (affecting the performance of whole the battery.) One need a good Hydrometer and it is a messy procedure and the system has to be rested for at least one, preferably 2 hours. (Otherwise there is not yet a steady equilibrium). Be very careful, sulphuric acid is aggressive and particularly dangerous for your eyes (it will eat holes in your cloth as well). Therefore use gloves and wear protective goggles. Always have a solution of baking soda at hand (to neutralize spilled acid).
The tubular plate batteries are designed extremely strong and can withstand 1400 cycles of deep discharge at 80% discharge level in the life time. All the plate grids in flat plates and the spins in the Tubular plates are cast in automated highpressure machine with maximum 2.55 antimony alloy. Every plate and every cell element is carefully weighed to achieve uniformity within a close tolerance level. Very low internal resistance is achieved by using large inter cell connection which are tested 100% in the assembly line and also by high porosity PE (poly-Ethylene) separators. Tough and high tensile poly-ethylene pocket separators are used in place of cheap PVC separators that are used by many others. This adds to reliability under abusive conditions and stops failure from short circuits.
Key Advantages; Up to 2 year service life Very-very low water loss Very-very low self discharge loss. Due to this, the battery can be stored I charged condition, for very long time without getting discharged. All batteries of same type will have very uniform internal resistance. Large numbers can be connected in series or parallel without any danger of misbalance within the battery bank. Very low internal resistance gives you high voltage on discharge and extra back up on load. You get longer back up in a Tv tube compared to Local made standard plates Batteries. Our TV tube can be used in PCO, Solar, UPS, Thela, Black & White TV, and CFL or even in CD player which can run on Direct Current. If we go for large batteries like Inverter batteries, they can be used for almost all the house hold application. They can also be used in UPS systems where power demand is for longer period, Solar PV systems, Telecom applications - both Base stations and at Repeater stations, Backup systems in Power stations and Sub stations and Switch yards, Railways signalling use, etc
7. Observations:
Uttar Pradesh is a state located in the northern part of India. With a population of more than 200 million people, it is India's most populous state.
There are also huge power cuts in the state, because of which people are looking for alternatives which can provide solutions for their problems. One of the solutions has been the Backup power supply equipments like Generators and Rechargeable batteries.
People who can afford are going for generators but most people are going for Inverters. But there is a huge market for small batteries in semi urban and rural places which can provide some relief during the power cut.
Since our product TV tube comes under sealed storage batteries in the range of 20 and 40 amps power which can be one of the options people are looking for. It offers them quality at an affordable price.
So to understand this demand clearly our field work in these districts has given some information. For this we have divided Uttar Pradesh in to 2 parts, Eastern and Western.
I have done field work in 5 districts Meerut, Muzaffarnagar, Bijnor, Moradabad and Rampur for launching our TV tube.
7.1 Field
Meerut District:
There Are 12 blocks in the district namely
DAURALA HASTINAPUR JANIKHURD KHARKHODA MACHRA MAWANA KALAN MEERUT PARIKSHITGARH RAJPURA ROHTA SARDHANA SARURPUR KHURD Total
Meerut Block was chosen for my initial Investigation. Batteries are primarily sold from the following 4 locations. 1. Baghpat Road 2. Begum Pul Bridge 3. Hapur Road 4. Garh Road R1: Rough Sketch of potential battery markets with comparative assessment in Meerut Block No scale:
In this City Baghpat road is known for Battery market compared to the other places because, here we can see more Dealers who not only sell local batteries but also manufacture batteries at a very reasonable price according to the demand from the local village people.
Though there is a lot of competition from the local dealers who themselves manufacture the small batteries and sell at low prices, still they were impressed after knowing the technology and price at which TV Tube is offered .
But they are not happy regarding our policy of Non warranty which makes it a risky proposition for them.
Selecting Distributer near to Baghpat Road not only helps in Penetration of the product, but it is also convenient for our consumers who prefer this place for Low priced Products. This place is also having good Transportation Facility which helps us for Better Distribution.
In Begum Pool Bridge we can find big distributers of Branded Companies. But these distributers also sell their own brands with their own dealer network.
Hapur and Garh Roads also have some Battery shops but customers who visit there prefer only Inverter Batteries. This could Be potential place for our Inverter batteries once we enter in to Channel marketing.
Muzaffarnagar District:
There Are 14 blocks in the district namely
Block BAGHARA BUDHANA CHARTHAWAL JANSATH KAIRANA KANDHLA KHATAULI MORNA MUZAFFARNAGAR PURKAJI SHAHPUR SHAMLI THANA BHAWAN UN Total
This district is fully dominated by branded and unbranded players. But there is lot of scope in Muzaffarnagar city because all the villages to its East side prefer this place for its Transportation facilities. Shamli block which is towards South- West is big market for Plates and Batteries. The nearby district and villages depend on this for Plates.
R2: Rough Sketch of potential battery markets with comparative assessment in Muzaffarnagar Block No scale:
The best market places in this city are 1. Ansari road 2. Aggarwal Market 3. Civil Lines both north and south 4. Bhopa Road
Ansari Road has more potential for our brand compared to other places because, all the nearby village people approach first to this place for any low priced Batteries. This could be our targeted area for launching the product because the players over here are ready to take our Battery; they were impressed by the product look and the margin it is offering.
The other big market in this district is Shamli Block known for its Battery Manufacturing market, which not only manufacture batteries but also sells Battery Plates to the nearby villages and Districts. This place is like Hub for all nearby District Manufactures to Get battery plates.
The other most important observation was, Most of the Thela people do not prefer to buy any small batteries; instead they take battery for rent by paying 10 Rs for two hours. For example if he wants back up for 2 hours from 7 pm to 9pm he takes battery which is fully charged or may even pay extra 10Rs for more time and return it to the owner . This process provides him tension free and maintenance free.
Bijnor District:
There Are 13 blocks in the district namely
Sr. No.
Block Panchayat
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.
AFZALGARH BUDHANPUR SEOHARA DHAMPUR HALDAUR(KHARI JHALU) JALILPUR KIRATPUR KOTWALI MOHAMMEDPUR DEOMAL NAJIBABAD NEHTAUR NOORPUR Total
R3: Rough Sketch of potential battery markets with comparative assessment in Bijnor Block No scale:
Bijnor city has small battery market compared to Najibabad and Chandpur in the same district. During my field work I found that the Multi district players are low compared to Single District players. Even you find Branded Batteries enjoying their own share of Potential Customers.
When you consider multi district players I found Kaycee from jalandhar- Punjab was able to penetrate in many blocks of this district. I have visited another place called Dhampur which is 40 Km from Bijnor city, here I found only two branded batteries Exide and Emaron and few local players. I feel there is a chance for our plates business over here compared to battery business.
Moradabad District:
There Are 13 blocks in the district namely
Sr.No.
Block
R4: Rough Sketch of potential battery markets with comparative assessment in Moradabad Block No scale:
1. Ganj Bazar- Manpur street 2. Prince Road 3. Budh bazaar 4. Sambhal Chowraha 5. Rampur Road
Moradabad District has a huge potential for Battery Business. This city has potential for both Plates and battery selling.
Manpur Street in Ganj Bazar is known for its assembling of batteries which Creates Huge Potential for Plates Business.
The other place where you find battery Dealers is Prince Road which is crowded with battery shops. You can find both Branded and Unbranded Batteries dominated by Small Dealers are selling local manufactured Batteries providing 12 months Warranty.
Here we have Sethi market Near Chaddu Cinema Road- Prince Road where most of the nearby village people come for batteries. So this place can be targeted first for TV tube which requires more demand from the Local Villages.
8. Competitive environment:
For anyone trying to grow a business, one of the first tasks is to map the competitive landscape. With a good understanding of the competition facing your company, you'll be able to spot and exploit opportunities as they develop.
Battery industry which is mainly dominated by unorganised players it is very difficult to attract the customers only through the Promotions. We have to understand the most important factors which are influencing the customer. During the field I came to know that, the most important factors are Price, warranty and Trust provided by the dealer. So we have noted down the Single district players price and service to understand our competitors better.
S1: Comparison of Single District Players price List and warranty service:
Brand Name
Capacity- Amp-Plates
Price(Rs)
Warranty (Months)
Local Brands
ELAXE-Big Power
35
1600
12
40
1900
12
Supreme
20
900
12
40
1450
12
15 Ashok 25
1000
1200
35
1500
12
Kaycee
40
2400
12
VPL
40
2000
12+6
Shan
60- 9 plates
2600
12+6
Avon Battery
25- 7 plates
1200
12
Excel Battery
7 plates
1250
12
V.S.F Battery
9 plates
680
12
13 plates
800
12
15 plates
925
12
We can understand about our competitors by their price, customer service offered, Dealer perception about the quality and even the margin they are getting especially for battery industry. Because here customer is not worried about the brand they just consider value for money.
Even if we think as customer of a battery, we give less importance to brand compared to its after sales service and price we Pay. If we take two players from above list, supreme and Ashok batteries have prices very near to our product prices. Though we find the prices to be similar, the next big thing were we have to differentiate is the Quality of the products and after sales service we Provide.
S2: Comparison of Multi District Players price List and warranty service:
Players who are having good Distribution channel and who can compete in western Utter Pradesh:
NABCO
20
1150
40
1550
Belco
40
18+6
2200
Leader
35
18+6
1806
2050
65
18+6
2764
3137
Base Terminal
35
12+3
1628
1848
40
12+3
1890
2145
Mission Battery
40Z
12+6
1794
65
12+6
2930
12
1241
1409
12
1452
1648
50Z- 9 plates
12
2388
2710
Globatt ACE
35
24+24
2924
Okaya Tubular
80
18+6
4400
4994
These are the players who have been successful in channel marketing and were even able to sustain the competition from the National players.
They not only provide margin above 10% but also provide Incentive schemes like for every 10 batteries giving one battery free or for every 5o batteries giving colour TV or Fridge which has been really motivating the distributers.
They are not only competing on price but also providing the after sales service in better way. The most important factor is the Trust they develop with the Distributer with their Constant support of infrastructure Sales People Support.
9. Distribution channel:
To reach a target market, the marketers uses three kinds of marketing channels. Distribution channel is used to display, sell, or deliver the physical products or services to the buyer or user. They include Distributers, Wholesalers, retailers and agents. Communication channel deliver and receive messages from target buyers and include newspapers, Radio, television, billboards, posters, fliers, CDs, audiotapes and many more
Since our company has been focusing more on operations, it is not having proper distribution channel to deliver the product and get the feedback. So we taught to study the present distribution process, its cost and propose any other alternative which brings the company into channel marketing.
Let us take an example of 50 batteries which are delivered from Factory to Meerut. First the batteries are loaded in to the factory vehicle from Libashpur to Gokule market in Delhi which cost 500 Rs. There they have to keep in there store for some days till they get order. Whenever they get order from Meerut, they provide transportation till the outskirts of the Delhi from there the dealer has to make his own arrangement. Though company is under a perception that they are saving money, but it forces the dealer to go for the competitor products because of inconvenience from our side.
Factory(Delhi)
Customer
Customer
If we observe the present distribution process of the company, you find no distributer in the channel. All though we have a dealer who has been handling the Bulk break, there has been no support for the promotion of the Product from him.
We are not even getting benefitted in tax reduction, which could have been possible through C & F Agent. Since company at present is selling without warranty and even without even bill, it is not facing the problem of Tax. But since company is planning to be an organised player, it cannot sustain in the market with this structure for long time.
Factory (Delhi)
C&F ( Ghaziabad)
Distributer (Meerut)
Distributer (Bijnor)
Distributer (Muzaffarnagar)
Distributer (Moradabad )
Dealers
dealers Dealers
dealers
Customers
customers
customers
customers
As a pilot project we can have Retail shop in Meerut which is owned by both Distributer and Company for Promoting the Product and even can be centre for after sales service.
I have even found that Tata Green batteries is having a shop where there sales people who are having technical about the battery are taking care of the customer Problems. For this we have to select good location which can be accessible for our customers and sales people who are working have to be paid with good amount to serve the customer better.
9.3 Things to be considered while selecting the distributer for long term relation:
Key features of a good distributor Knowledge of the market. Has adequate sales force in terms of size and experience Financially stable Can hold adequate stock Long term view and commitment to be partner Can handle complimentary products Can contribute in designing the marketing plan and help us during promotions
Size of Sales Force How many field personnel does the distributor have? What are their short and long term expansion plans, if any? Would they need to expand to accommodate your account properly? If so, would they be willing to do so? Sales Record Has their sales growth been consistent? If not, why not? Try to determine sales growth for the past five years. What are their sales objectives for the next year? How were they determined? Territorial Analysis What territory do they cover? Do they have branch offices in the territory to be covered? If so, are they located where your sales prospects are greatest? Do they have plans to open additional offices?
Product Mix How many product lines do they represent? Are these product lines compatible with yours? Would there be any conflict of interest? Do they represent any other firms? If so, which ones? If necessary, would they be willing to alter their product mix to accommodate yours? What would be the minimum sales volume needed to justify handling your line? Are their sales projections realistic? Facilities and Equipment Do they have adequate warehouse facilities? What communications equipment do they have? Fax, modem, etc.
Marketing Policies How are the sales staff compensated? Do they run motivation and incentive programs? Do they use product managers to co-ordinate sales efforts for specific product lines? How do they monitor sales performance? How do they train sales staff?
Customer Profile (especially for industrial products) What type of customers are they currently contacting? Are their customers' interests compatible with your product line? Who are their key accounts? What percentage of total receipts do these key accounts represent?
Promotional Trust Can they assist in compiling market research information to be used in making forecasts? What media, if any, do they use to promote sales? How much of their budget is allocated to advertising? Will you be expected to contribute funds for promotional purposes? If so, how will the amount be determined? What type of material do they use to promote their company?
of
1. Sanjeev Prakash who owns New Punchsheel motors shop is a Distributer of Amco battery, who is also dealer for Amaron, Orchid, and Exide. He manufactures his own batteries. He has 26 dealers under him, who basically deals with big batteries which are in range from 135 to 180 amps. He is ready to deal with us for TV tube to cover the villages where there are some of his dealers are selling. He as order 10 batteries of 20 amps for testing , which he feels safe because of Price (1100 Rs) as well as demand. He can be potential Distributer because of his good will in the District with customers and dealers, having work shop to serve the customers and who is also capable of doing 5 Crores business yearly.
2. Sumit Kumar Bansal Battery & Inverters He sells his own brand by name Express Gold, He is dealer of Exide and Luminous. He is having knowledge about Nabco Plates and also interested to Take Plates. He has the Capability of selling 100-150 batteries in a month. He says he wants to deal with Tubular inverter batteries and Tv tube but he wants to take sample of 5 each.
our offer
5135
Inverter Tubular:
150
5700
6200
If we negotiate with him properly, he can be good asset in Baghpat Road near Nawal Vihar. We have market for this Range of Batteries.
3. Roopak Agarwal- Inverter House He is one of the biggest distributer of Luminous also deals with Su-Kam, Microtek and Prestolite near Abu lane of Meerut City. He is able to sell 400-500 inverter batteries of different ranges from 80 180 amps He also deals with Plates for his own manufacturing batteries, which gives us some advantage for long term relations.
He says that before ordering sample batteries, wants to have a meeting for long term relation. He also likes to visit the manufacturing setup. Some dealers say that though he is financially good we have to be careful while dealing with him. If he is not happy with us there is also chance for creating negative Publicity about our batteries.
4. S.K Mittal - Sri Balaji Electricals He is one of the biggest distributer Okaya and Luminious near Sastri Nagar in Meerut city. He also as his own brands called Lonex and Donex.
Though he stays in Sastri Nagar which is dominated by branded Batteries, he has network of dealers in various Villages who can provide sales for TV tube.
He is able to sell 300-400 batteries of different ranges monthly. He is happy with cost of our TV tube and says that he wants to distribute to entire Meerut city. He is in position to take around 300 batteries which could be mix of out TV tube, Inverter tubular and standard. He is ready to have meeting before taking sample batteries.
Muzaffarnagar:
5. Kumar- Kumar Battery and inverters He is a distributer of Luminous, Lx Big power, dealer for Exide and even owns Mega power brand which he locally sells. He can be one of the best distributer for our products. This I am saying based on his past records in sales, his network of dealers and even good will from the customers. He is able to sell 500 batteries per month. He has shown more interest in TV tube and he is even ready to take distribution ship of other batteries. I came to know that he is able to market his own brand in the district and has even plans to expand to the nearby districts with attractive schemes. He even said that, he should be the only distributer in that district for TV tube and wants to visit the plant before starting the Relation.
Bijnor:
6. Syed Khurram Nadem- Indo Tech Trading Company
He is a distributer of Arise, Base Terminal, Paramount and dealer for Exide. Though he has been new entrant to this business, was able to make more sales then nearby competitors. Since I was spending at least 3 to 4 hours with every potential candidate, he treatment with the customer is little bit different. He is more focusing on present sales then long term relations. He even had 45 lakhs sales of Base Terminal in this Year with the help of his dealer network.
7. Asif Khan- S.K Battery He is a distributer of Microtek, M-tech power, Digi-power, and even he is a dealer for Exide. He is also manufacturing batteries for local sales, he was impressed by our TV tube Battery and even interested to take plates. He even sold 600 batteries of Okaya in this Year. He has 40 years of experience in this business and now he is lacking proper support to do the business. He has all the necessary equipment to support the customer problems. He is more focused on customers then just sales. He even has big dealer network in various blocks of the Bijnor District.
Moradabad:
8. Shakir Husain- Famous Electronics service He is a small dealer of Digi-power, ADDO, and Luminous. He is interested to take TV tube batteries and wants to start with 10 batteries which are mix of 20 and 40 amp. He even has sales of 500 batteries yearly. He used to take plates from us but now he taking Rotex plates from Delhi, which we have to consider. 9. Ashraf Arshad Batteries
He is a distributer of Amaron, Tata green, Belco batteries. He is aware of the Nabco plates and was a customer in the past. Now he wants to start the relation with TV tube may be by becoming Distributer. He says that he is a old friend of our chairman and wants to meet him to start the relation.
10. Anil Sethi- Anil Brothers He is one of the big dealers for Exide and even owns a local brand by name Light House. He is a big distributer of Plates, at present he dealing with Jyothi and VPL plates from Delhi. He has the capacity to sell 3000 batteries yearly. But when I have enquired about him with other dealer they say he is danger if you deal with him on credit basis.
He liked our TV tube but asked to arrange a meeting with company and to visit the manufacturing set up.
11. Limitations
Though the study was conducted extensively, it has some limitations. Visited only district head quarters and met only 50 dealers/ distributers from these 5 Districts. Though the Dealers/Distributers were interviewed at length in accordance with guidelines and checklists, their opinions and feedbacks might not be representative of the entire population. The proposed distribution system does not provide a quantitative measure of the sales uplift if implemented. However the institutive idea suggest that the uplift will be significant due to the standardization of the distribution process. The ROI() has not been calculated as a part of the study and would be calculated after the project.
12. Recommendations:
12.1 Product: The most important thing is to test competitor products with Nabco products to make credible claims on Battery performance and battery life. The following brands can be considered for testing comparisons 1. Bindal and Kyacee- Multi District Players 2. Luminous , Microtek and Okaya Multi state Players Provision of a charger which is designed specially to cope with voltage and frequency fluctuations in rural areas. This would increases life time of the battery and earn Good will from the customers.
Nabco currently provides handles to their batteries. Breakage of these handles has been observed. Therefore there is a need to 1. To increase the dimensions of the handle to strengthen it. 2. Change handle specs to a stronger material without altering dimensions
12.2 Price: Maximum Retail Price (MRP) needs to be fixed. This is an absolute necessity for any branded offering. While ensuring competitive distributor margin, adequate monitoring should be set in place to ensure that actual price to the end customers should not vary depending on the whims and opportunistic initiatives of individual distributors. There is greater demand for 20 amps (distributer cost 1100 Rs) compared to 40 amps (1500 Rs). So it is better to focus more on 20 amps batteries. The end price of the product may be increased while retaining the distributor margin to compensate for Warranty costs.
12.3 Distribution: Warranty has to be provided for at least 12 months. The Company should provide transportation for the convenience of the Distributor It is necessary for the company to put a competent and adequate sales force in place to address the huge opportunities and challenges that the rural market for storage batteries represent. The sales force should be trained in technical and commercial skills Consideration should be given for performance incentives to distributor/dealer. For instance a colour TV set can be given to each distributor for sale of 150 batteries. In addition to the financial value of these incentives the recognition that the associate gets would be a major motivator for the associate and would result in mutual advantage for both the company and its partners in the market. Review and feedback from customers of Nabco plates will result in opportunity for improving quality of plates but would also help in enlarging the customer base for assembled batteries
12.4 Promotions:
We can take the help of Haats, Mandis and Melas to create awareness about our Product. Hoardings and Using popular Local radio stations can create Brand Image and Confidence to the customers.
We can find number of Rickshaw in these districts which can be used to promote our products Sports events and Puppetry shows can also help to increase the awareness Gifts in the form of T shirts, Pens, Key chain, to customers can increase loyalty.
13. Annexure:
13.1 The Checklist:
The exploratory qualitative research was conducted by interviewing in depth various stakeholders of the Battery market, namely, the retailers, and the distributors. In order to streamline the interview process two checklists and guidelines were employed. These guidelines were aimed at extracting relevant information from the Dealers as well as the distribution partners. These guidelines were instrumental in developing and shaping own assessment of the Battery market.
Name of the Dealer Name of the town/village: Status of the Person- Dealer / Distributer Whether having work Shop Number of Plates Sold/ Consumed Monthly Where is he Purchasing from Name of the Batteries Sold Does he aware of the Nabco Plates and Batteries Number of batteries Sold Monthly Best markets for TV tube in that Town/Village Whether he is ready to work without Warranty Minimum Margin he is getting from Competitors Dealer price of various Battery companies Factors which are influencing the customer What does he feel about our Products Did he hear any complaints about our Quality Minimum Number of batteries which can sold in TV Tube range Number of dealers he is having
Basic Problems faced By the customer Power cuts in that City Present promotional Schemes from Other Players Minimum time for after sales service by other players Which Range of Batteries has More Demand?
13.2 Bibliography:
Books: Sales and Distribution by TAPAN K.PANDA and SUNIL SAHADEV Marketing Research by NARESH K.MALHOTRA