5

A

PROJECT REPORT

ON

ANALYSIS OF SALES FORCE

PERFORMANCE

FOR MOTWANE MANUFACTURING

COMPANY PVT. LTD.

SUBMITTED TO UNIVERSITY OF PUNE IN PARTIAL

FULFILLMENT OF 2 YEARS FULL TIME COURSE

MASTER IN BUSINESS ADMINISTRATION (M.B.A.)

SUBMITTED BY

NAVIN S. SHUKLA

(BATCH 2005-2006)

Vishwakarma I nstitue of Management

Kondwa, Pune -48.

6

ACKNOWLEDGEMENT

It gives me please to thanks my guide Mr. Tushar Bhavsar (Manager Marketing) and Mr. Ajit

Parundekar (Executive Director) of Motwane Manufacturing Company Pvt. Ltd. for providing support

on my project. I also thank them for involving me on some top managerial activities like sales

forecasting, advertising planning and channel management. I got a real experience of sales in these two

months because of constant interaction of sales force with me. Hence these 60 days are really

memorable from my marketing career point of view.

I also thank my Director Dr. Sharad Joshi for helping me in deciding the company and

subsequently the project title. I also thank to my Guide Prof. Mrs. Smita Sovani for providing support

at all point of time.

I thank Prof. Yuraj Lahoti, Prof. Rajesh Vatkar and Prof. Mahesh Halale for providing

valuable support at every point of time. I specially thank Prof. Vishal Soni since his IT lectures were of

immense help in the project work.

Finally I would like to thank my parents who are supporting me at every point of life. I would

also thank to all my friends and members of VIM family who are helping me at every point of need and

guidance.

NAVIN SHUKLA

MBA-II, MB0536

7

INDEX

Sr. No. TOPIC Page No.

1 EXECUTIVE SUMMARY 1-2

2 OBJECTIVE & SCOPE OF THE PROJECT 3-4

2.1 Objective of the Project 3

2.2 Object of the Study 3

2.3 Scope of the Project 4

3 COMPANY PROFILE 5-25

3.1 About Company 5

3.2 Quality policy 6

3.3 Company Logo 7

3.4 Company Slogan 7

3.5 Company Photo 7

3.6 Organization Chart 8

3.7 Brief History 9

3.8 Partnerships 9

3.9 Network 9

3.10 Products and its detailed list 10

3.11 Customers 12

3.12 Product Profile 13

4 THEORETICAL BACKGROUND 26-32

4.1 PLC Concept 26

4.2 BCG Growth - Matrix Model 27

4.3 Market Segmentation 30

5 RESEARCH METHODOLGY 33-34

6 DATA ANALYSIS 35-46

6.1 Part A: Format for sales Force 35

6.2 Part B: Sales Forecasting and Analysis 38

6.3 Part C: Market Segmentation 46

6.4 Part D: Advertizing Planning 46

7 FINDINGS 47-49

8 LIMITATIONS 50

8

INDEX

9 CONCLUSION 51

10 RECOMMENDATION 52-53

11 BIBLIOGRAPHY 54

12 ABBREVIATIONS 55

13 ANNEXURE

Annexure A: Daily Sales Report 56

Annexure B: DSR monitoring report 57

Annexure C: Montly Tour Plan 58

Annexure D: Monthly visit monitoring report 59

Annexure E: Daily Call monitoring Report 60

Annexure F: Offer Tracking sheet 61

Annexure G: Sales Turnover last financial year 62-63

Annexure H: Production planning Sheet 64

Annexure I: Dealer Target Sheet 2006-2007 65

Annexure J: Sales Forecast 2006-2007 66-67

Annexure K: Broad Segmentation 68

Annexure L: Database of cement companies 69-70

Annexure M: Comparison sheet for Advertizement 71-72

Annexure N: Dearler application form 73-74

Annexure O: List of cities mapped in Various Territories 75-76

9

1. EXECUTIVE SUMMARY

1.1 INTRODUCTION

The project is about the effect of new sales force on the performance of the company. This is

generally being done by efficiently monitoring the sales team, Channel Management, Market

Segmentation, Advertising planning and through various national and international alliances.

Hence the title of the project is chosen as Analysis of sales force performance for Motwane

Manufacturing Company Private Ltd.

1.2 SELECTION OF THE TOPIC

The company established in 1960 is pioneer in Multimeters but is hardly able

to get even 10% of the market and the share is going down year by year.

Rishab and Meco came way after Motwane in the market but still are the leaders in

the market.

Hence to increase the sales turnover and to increase the market share company

has decided to go for increasing the sales team at 16 major locations in India with a

further increase of 50 engineers by 2007. To start with one Engineer was appointed

followed by 5 Engineers.

Hence a system is to be developed to monitor the sales team across various

territories/locations in the country.

The project involves various aspects of marketing like sales force

automation, market segmentation, channel management, advertising, sales forecasting

and also a unique opportunity to work with Executive Director of the company and

other top management personnel.

This project is done at Nasik Road factory which being the registered factory

and office of the company since from last 40 years. I have decided about this project

in the month of January reason being the first recruitment was supposed to be in the

10

month of February and I worked for the project in the month of June and July since by

then the other sales engineer s have joined the team.

The project was carried by consulting the Production Manager, Marketing

Manager, Human Resource Manager, EDP department and the Executive Director

being the main guide for me. I have experienced a real sales experience since I was

continuously interacting with the sales team for the entire two months.

11

2. OBJECTIVE & SCOPE OF THE PROJECT

2.1 OBJECTIVE OF THE PROJECT

To analyze the increase in sales turnover of the company during the current financial

year by

o Sales force Automation.

o Segmenting the companies to find the target market.

o Advertisement planning and participating in various national and international

trade shows.

o Sales forecasting for the Sales Engineer and the Channel partners.

o To increase the product basket by means of JV s and OEM brandings.

2.2 OBJECTIVE OF THE STUDY

Primary: -

1. To analyze the performance of new sales team on the turnover of the

company.

2. To design various formats required for monitoring the sales team.

3. To forecast sales for the Engineers and the channel partners.

4. To segment the companies by using last five years data so as to find

the target market.

Secondary: -

1. To plan for advertising for the financial year so as to help the sales

team.

2. To plan for exhibitions, trade shows so as to increase the sales.

3. To identify the unique customers.

4. To get top ten channel partners.

2.3 SCOPE OF THE PROJECT: -

12

The scope of the project is mainly focused towards the

1. Sales team, its design and development towards achieving the target set for the

financial year.

2. The project is restricted to 16 locations, which are mapped into North, South,

East and West.

Table 1

3. Out of 16 locations identified only five have been considered for the study. The

locations are as under

o Mumbai

o Delhi

o Vadodara

o Bhopal

o Raipur

TERRITORY COVERED NORTH SOUTH EAST WEST Dehradun (DHD) Chennai (CHN) Guwahati (GAU) Mumbai (BOM) Delhi (DEL) Coimbtore (CTR) Kolkata (KOL) Nagpur (NGP) Chandigarh (CHD) Bangalore (BNG) Bhopal (BPL) Lucknow (LCK) Hyderabad (HYD) Raipur (RPR) Jaipur (JAI) Vadodara (BRD)

13

3. COMPANY PROFILE

3.1 ABOUT COMPANY

The Motwane Manufacturing Company Private Limited (MMCPL or Motwane ) is a

leading Manufacturer and Distributor of high performance Electrical/Electronic Testing, Measuring

and Recording Instruments/Systems in India. Established in 1967, the Company Pioneered the Sale

and Indigenous Manufacture of Analog Multi meters in India through technical Collaboration with

AVO Limited of the United Kingdom. Since then, the Company has initiated several developmental

efforts to cover a range of Test and Measurement (T&M) products.

In recent years, The Company has deliberately transitioned to become a focused Transmission and

Distribution (T&D) solution provider to the electric power industry. By leveraging its competency

in designing high precision measuring instruments, MMCPL has successfully designed and delivered

automated smart metering solutions to power utilities. Today, Motwane is in a leadership

position to deliver the changes that Government of India (GoI), SEBs, and private players need to solve

the distribution crisis and power shortages that India is facing: namely by bringing intelligence

into the revenue cycle -- by segregating, measuring and identifying energy losses (technical and

commercial) from the network backbone to the customer premise on a daily basis; providing for real-

time consumption data and load profiles to assess peak demand and network capacity; performing

automated energy audits; increasing accuracy in billing and cash management; improving customer

service and overall network reliability.

As recognition of its innovative efforts in the field of automated metering, Motwane has recently been

awarded the first commercial tender for a production-ready Automated Meter Reading (AMR)

system by a leading industrial group company, giving the company the largest installed base in the

country. Motwane has also been selected by a premier multi-national power solutions company as the

preferred supplier of AMR systems in India, thereby increasing its sales leverage to access a large

market. In addition, Motwane was an integral contributor to the IT task force report on Power,

organized by the Ministry of Power.

In conjunction with the shift to provide distribution solutions to the power sector, Motwane has

acquired, Krohm Solutions ( Krohm ), a US and India based venture-funded company. Krohm s

expertise lies in software services and application software for power distribution companies in North

America, Australia and New Zealand. The two companies have been collaborating closely on AMR

software development and in joint sales activities for the Indian market.

The Company manufactures all of its products in a 4-acre Factory complex at Nashik (a rapidly

growing industrial town about 100 miles from Mumbai). This facility also houses an integrated R&D

department, which is recognized by Dept. of Scientific and Industrial Research Govt. of India. The

14

quest for quality in all of the products is reflected in the Company s compliance to ISO 9001: 2000

Standards.

3.2 QUALITY POLICY

The Motwane Manufacturing Company Pvt. Ltd. Hereafter called MMCPL designs, manufactures and supplies test, measurement, monitoring and recording instruments.

MMCPL aims at serving institutional markets like Electricity Utilities, Defense,

Public Sector Undertakings, Major Government Organizations and Export Houses apart from its

regular small buyers.

It is the policy of MMCPL to maintain competitive standards of Quality in Design &

Manufacturing of these products by providing identified and adequate resources, establishing,

maintaining and continually improving systems, processes, raw materials and training with the aim of

improving the quality of measurement, suitability, reliability and long life of its products. This is in

addition to meeting the customer requirements and applicable statutory and regulatory norms thereby

ensuring satisfaction and loyalty of our customers.

It is MMCPL s commitment to fulfill the ongoing needs of our customers by providing them

products with latest technologies by in house designing, through technical collaborations or marketing

alliances with reputed Indian or Overseas organizations having ISO 9001 Quality Certification.

MMCPL shall maintain and continually improve its Quality Management System.

This Quality Policy will be periodically reviewed for its continual suitability.

Ajit Parundekar

(Executive Director)

3.3 COMPANY LOGO

3.4 COMPANY SLOGAN

15

3.5 COMPANY PHOTO

3.6 ORGANIZATION CHART:

Organization chart appearing here illustrates functions & their interrelations within

the organization. The primary and supporting responsibilities for implementing

sections 4 to 8 of ISO 9001

2000 are presented in department interface. In case of

non-availability of concerned functions authority & responsibility is considered as

decided by respective person or guided by ED.

The Hallmark of Quality , Innovation and Reliability

ED

MR

HOD-MKT HOD:R&D

16

ED Executive Director

EDP Electronic Data Processing

HOD Head of the Department

HRD Human Resource Development

I/C In charge

QA Quality Assurance

MKT Marketing

MAT Materials

MR Management Representative

MNT Maintenance

3.7 BRIEF HISTORY

Motwane is a privately held firm whose origins are traced back to 1909 when the

founding Directors established an Electronics Trading Company that pioneered the

I/C PRODUC

TION

I/C QA

I/C REPAIR

17

market for public speaking communication system. The Motwane brand rapidly

gained recognition nationwide as its systems were used by freedom fighters during

India s struggle for independence from the British. Today, the Company is India s

leading producer of Electronic Test and Measuring Instruments and power

distribution solutions.

3.8 PARTERNERSHIPS

The Company has successfully developed long term relations with reputed local and

overseas Companies such as:

Siemens Information Systems Limited. As systems integrator/reseller for

power utilities

CMC Ltd. As systems integrator/reseller for power utilities

SPL WorldGroup (US): Product development and reseller relationship

Kinectrics (US and Canada): technology and OEM relationship

METEX CORPORATION KOREA: Reseller for Indian market

WUHAN FANKE TRASFORMER MANUFACTURE CO.PTD PRC.

Reseller for Indian market

KYROTSU ELECTICAL WORKS LTD., JAPAN

3.9 NETWORK

The Company has direct sales Offices in each of the metro cities in India supported by

Sales representatives and Dealers all over the country. The Company has also

exported its highly successful Microprocessor based Digital Low Resistance Meters

and Multimeters to the US (mainly to OEM manufacturers such as Ballantine

Laboratories Inc.) and to a smaller extent, the Middle East, Netherlands and Germany.

MUMBAI BANGALORE

434 A, Gyan Ghar, 14th Road, Khar (W).

Mumbai - 400 052.

Flat No. 2, Bathija Court No. 35/13,

Langford Road Cross, Bangalore -560 025

18

Tel. : +91-22-260-58895 /96 / 97

Fax : +91-22-260-58898

Tel. : +91-80-227-2592.

Fax : +91-80-227-8355

KOLKATA DELHI Audyogik Seva., 4A,Rafi Ahmed Kidwai

Road, Kolkata - 700 016.

Tel. No. : +91-33-222-95545, 222-94832

Fax : +91-33-222-95550

Pocket K-11,

Chitranjan Park, New Delhi- 110 019

Tel. : +91-11-264-72463

Telefax : +91-11-264-85179

The company has identified 16 locations to appoint the sales team. The locations along with the

territories are listed in Table 1 and the detailed list is as per annexure O.

3.10 PRODUCTS

1. Test & Measurement Systems.

2. Transmission & Distribution Test Systems.

3. Energy Meters and Smart metering (Automatic Meter Reading)

The details of the product segment have been highlighted in detail below.

Evolution to Transmission and Distribution (T&D) Solution Provider

DSIR, Govt. of India accredited Research and Development delivering system

solutions in Energy Metering and Automatic Meter Reading Systems (AMRS)

Sold in excess of 100,000 electronic energy meters in 2002 and 2003

Solution Providers to the needs of Transmission and Distribution Testing

involving Extra High Voltage up to 800KV.

Participated in Nasscom s IT task Force report for Power sector.

Performing India s first production-level system for AMRS with a Reliance

company to become the largest production-ready reference site in India.

Selected by Siemens India as preferred AMRS supplier for India.

DETAILED PRODUCT LIST

1. Test & Measurement Systems

a) Digital Multimeters:

b) Digital Clamp-On-Meters.

c) Insulation Resistance Testers

19

d) Digital Micro ohm Meters.

e) Multifunctional Handy Scope.

f) Functional Generator.

g) Universal Frequency Counter.

h) Universal Multifunctional Systems.

i) High Voltage Probe.

2. Transmission & Distribution Testing

a) Series Resonance Systems.

b) High Voltage Transformers.

c) Transformer Testing.

d) Circuit Breaker Testing.

e) Automatic Tangent Delta Kits.

f) Oil Breakdown Tester.

g) Lightening Surge Arrester Testing

h) Live Line Testing.

3. Smart Metering and Power Distribution Solutions

a) Single Phase Static Energy Meters.

b) Three Phase Static Energy Meters.

c) Automatic Meter Reading Systems.

d) Energy Meter Calibration Systems.

e) Automated Energy accounting and auditing

f) Meter Data Aggregation and Analysis Software

g) Trouble Call Management Software

h) High Tension and Low Tension Billing software

20

3.11 CUSTOMERS

The Company has very strong relationships with Government agencies and private organizations connected with Defense, Railways, Aviation, Post and Telegraphs, Radio and TV Networks, Communications and Computers, Power Generation Research Laboratories and Educational Institutes. In particular, notable customers with long-standing relationships include All India Radio (AIR), Oil and Natural Gas Corporation (ONGC), the 26 State Electricity Boards (SEB s), Doordarshan TV, the Indian Railways, Air force, army and Navy.

Company has its main customers as Government Agencies and Private Organizations connected with Defense, Railways, Aviation, Post and Telegraphs, Radio and TV Networks, Communications and Computers, Power Generation, Research Laboratories and Educational Institutes. In particular, notable customers with long-standing relationships include : All India Radio , Oil and Natural Gas Corporation, State Electricity Boards, Doordarshan , Indian Railways, Air force, Army, Navy and DOT.

21

General Purpose Test and Measurement Products:

Digital Multimeters covering over 10 models.

Clamp on meters measuring up to 2000A AC/DC.

Insulation Tester for various applications from 100V 5KV.

Hand Held Digital Storage Oscilloscopes, RF Mill voltmeters.

Function Generators, Frequency Counters and Universal Test Systems.

3.12 PRODUCT PROFILE

22

3.12.1 DIGITAL MULTIMETER

DM 3570

DM 3760

DM 4540

DM 4570P

DM 3540

DM 352

23

3.12.2 COMPARISON OF DIGITAL MULTIMETERS

hFE

Auto-Ranging

Diode & Continuity

Multi Display, dBm, Power, Logic, Memory, RS232.

Multi Display, dBm, Signal Output, Temperature, Memory, RS232.

Multi Display, dBm, Signal out, Logic, Memory, High Speed, RS232.

Very High Reliability and well protected.

Memory, Auto Power OFF, Dual Display.

Auto AC/DC sensing.

Specialty

200mH.

40mH 400mH

Inductance

20KHz 20MHz.

20KHz 20MHz

4 KHz 4MHz

4 KHz 4MHz

Frequency

20nF 200uF

20nF 200uF

4nF 400uF

4nF - 400µF

0.32 32uF

Capacitance

200

20M

200

20M

400

40M

200

20M

400

40M

0.32K 32M

Resistance

2mA 20A

2mA 20A

40mA 20A

0.2mA 10A

0.4mA 20A

0.32mA 10A

Current AC/DC

200mV

750V/1000V

200mV

750V1000V

0.4V

750V/1000V

0.2V 1000V 0.4/4V

750/1000V

0.32/3.2V

750/1000V

Volts AC/DC

DM4570P

4 ½ dgt

(TRMS)

DM4540

4 ½ dgt.

DM3760

3 ¾ dgt.

DM352

3 ½ dgt.

DM3750

3 ¾ dgt.

DM3540A

3 ¾ dgt.

Models

24

3.12.3 SELECTION GUIDE FOR DIGITAL MULTIMETERS

DM3540A, 1600

DM352, 4950

DM3760, 7800

DM4540, 8800

DM4570P, 10500

DM3750B, 2950

Features

Use

r R

elia

bilit

y

Signal Output, Power, Conductance.

Logic, Temperature, dBm, Memory, Offset & Comparison.

Auto-ranging, hFe, Frequency, Capacitance, Bar Graph, Data Hold.

Voltage, Current, Resistance, Continuity, Diode Check.

Rarely Used

Less Frequently

Used Enhancement

Essential

25

3.12.4 CLAMP METERS

<30 Ohm CONTINUITY

------ DIODE TEST

2KHz 20MHz FREQUENCY

20K, 2M RESISTANCE

20A, 200A, 1000A AC CURRENT

200V, 700V AC VOLTAGE

200V, 1000V DC VOLTAGE

Range

Parameter

<30 Ohm CONTINUITY

------ DIODE TEST

50Hz 100KHz FREQUENCY

240E, 24MOhm RESISTANCE

240uA 2000A AC/DC CURRENT

2.4V, 1000V AC VOLTAGE(Trms)

240mV - 1000V DC VOLTAGE

Range

Parameter

DCM-30A

DCM-39A

26

3.12.5 LOW RESISTANCE METERS

2m

20m

200m

2

20

200

2K

20K

10mA

1A

10A

100A

LR201

LR2045

LR2065

KDC

Fuse Testing, Detonator Testing.

High Grade Weld Joints, Bond Testing, Switch Gear Test, Contactor Testing.

High Capacity Transformers, Medium grade weld joints, MV Bus-bars, Cables.

Lab Testing, Electronic Components, Low Capacity Transformers & Motors, PC Boards, Relays.

Typical Applications

LR201

KDC

LR2065

LR 2045

Models

27

Insulation Testing of Appliances, Cables, Transformers, Switchgears, Motors, Generators, Relays, Contactors and Power Tools of various ratings.

Applications

Power

Analog (Log) Digital Digital Digital Read-Out

5% - 10% 5% - 10% 5% 1% Accuracy

50M

5G

20G

2000M

200M / 2000M

Range

2500V / 5000V 500/1000/ 2000/2500V

100/250/ 500/1000V

500V/ 1000V

Test Voltage

B50K D20K D266 D2K Models

3.12.6 INSULATION TESTOR

28

Energy and Power Measurement Products:

Single Phase Static Energy Meters LCD / Stepper Motor Type.

Three Phase Static Energy Meters LCD / Stepper Motor Type.

Various Ratings from 5A to 80A, Whole Current and CT operated.

Various parameters like KWh, KVArh, V, I, Cos phi, MD etc.

Standalone or with Optical Port and Power Line Communication Enabled.

Well suited for Automatic Meter Reading System.

3.12.7 ENERGY METERS

29

3.12.8 TRANSFORMER TESTING EQUIPMENTS

SERIES RESONANCE SYSTEM

110MVA Transformer Test System

Dynamic Contact Test for Switchgears

Tan Delta Auto Test System

30

3.12.9 LT AMR (Reliance implementation)

Data acquisition and control based

on Power line carrier for last mile

(between DTR and consumer

meters).

Proven reliability over last mile

distances of 3-4 Km.

Ability to handle very high density

of meters on DTR (> 800:1).

Intelligent concentrator can set

separate interval schedules for

each meter.

DCU can store upto 90 days data

on 15 min intervals.

Outage log on DCU.

31

Customer Care and Trouble Call Management System

Designed to handle commercial and technical complaints

Integration-ready with

IVR For registering a complaint through a phone

GIS For locating the fault

GPS For Easy tracking of the Mobile Crew

Mobile Workforce Management Systems For optimum use of the

available workforce

Online Status of complaints

Auto Forwarding of complaint details to the relevant staff

SMS, Pager

Email

Analysis and Reporting

Minimizing Human Intervention

Flexible and Open architecture, developed using Industry Standard

technologies

Scalable to handle large number of calls

Some of the salient features of TCMS are:

3.12.10 CUSTOMER CARE: TROUBLE CALL MANAGEMENT SYSTEM

32

3.12.11 QUALITY PROCESS

After Sales Service

Sales &

Marketing.

Calibration

Traceability

Quality Assurance

Manufacturing

Design and

Development

Product

Approvals

PRODUCT REALIZATION

BIS, ERTL, NPL DGQA, BSF, MHA

DSIR, ISO9001

ISO9001, BIS, DGQA

ISO9001,BIS, DGQA

ISO9001

ISO9001,BIS, DGQA, ERTL, NPL

ISO9001

33

0.1%

H. Tinsley Standard Inductors 7.

0.1% Hewlett Packard

(Agilent Technologies) R.F. Synthesized Signal Generator.

6.

0.2%

Taisei (Japan)

Insulation Resistors up to 500G

4.

0.05%

M.T.E. Switzerland

Energy and Power Standard Up to 75KW

5.

0.006%

H. Tinsley

Standard Resistors 100

-

10000

3.

0.006%

Leeds & Northrop

(Northrop Grumman Ltd.) Standard Resistors 0.0001

-

10

2.

0.005%

DATRON WAVETEK, USA

FLUKE AC/DC Voltage, Current, Resistance, Capacitance.

1.

Basic Accuracy Make

Standard

Sl.

3.12.12 CALIBERATION STANDARDS

35

4. THEORETICAL BACKROUND

The company started in 1960 was pioneer in Analog Multimeters in India through technical collaboration with AVO Limited of United Kingdom. The company was having monopoly till 1985 and has captured almost 95% of the market.

Then came the era of digital technology and company didn t realized that the Product life of their product was moving towards the decline stage.

4.1 PLC CONCEPT

Decline Stage

As sales decline, the firm has several options:

o Maintain the product, possibly rejuvenating it by adding new features and finding

new uses.

o Harvest the product - reduce costs and continue to offer it, possibly to a

loyal niche segment.

o Discontinue the product, liquidating remaining inventory or selling it to another firm

that is willing to continue the product.

The marketing mix decisions in the decline phase will depend on the selected

strategy. For example, the product may be changed if it is being rejuvenated, or left unchanged

if it is being harvested or liquidated. The price may be maintained if the product is harvested,

or reduced drastically if liquidated.

Based on the above the theory the firm liquated remaining inventory thereby selling to its

channel partners. The company was not ready to face the upcoming competition in the market and

hence was on the stage of lockout.

36

But with the help of OEM branding and good brand name the company was somehow able to

survive; but couldn t achieve the growth rate with which the other company were growing.

Hence the company s decision to increase the sales force and invest for expansion is best

explained by using BCG model.

4.2 The BCG GROWTH-SHARE MATRIX

The BCG Growth-Share Matrix is a portfolio-planning model developed by Bruce Henderson

of the Boston Consulting Group in the early 1970's. It is based on the observation that a company's

business units can be classified into four categories based on combinations of market growth and

market share relative to the largest competitor, hence the name "growth-share". Market growth serves

as a proxy for industry attractiveness, and relative market share serves as a proxy for competitive

advantage. The growth-share matrix thus maps the business unit positions within these two important

determinants of profitability.

The BCG Growth-Share Matrix

This framework assumes that an increase in relative market share will result in

an increase in the generation of cash. This assumption often is true because of the experience curve;

increased relative market share implies that the firm is moving forward on the experience curve relative

to its competitors, thus developing a cost advantage. A second assumption is that a growing market

requires investment in assets to increase capacity and therefore results in the consumption of cash. Thus

the position of a business on the growth-share matrix provides an indication of its cash generation and

its cash consumption. Henderson reasoned that the cash required by rapidly growing business units

could be obtained from the firm's other business units that were at a more mature stage and generating

significant cash. By investing to become the market share leader in a rapidly growing market, the

business unit could move along the experience curve and develop a cost advantage. From this

reasoning, the BCG Growth-Share Matrix was born.

37

The four categories are:

Dogs - Dogs have low market share and a low growth rate and thus neither generate nor consume a

large amount of cash. However, dogs are cash traps because of the money tied up in a business that

has little potential. Such businesses are candidates for divestiture.

Question marks - Question marks are growing rapidly and thus consume large amounts of cash, but

because they have low market shares they do not generate much cash. The result is large net cash

consumption. A question mark (also known as a "problem child") has the potential to gain market

share and become a star, and eventually a cash cow when the market growth slows. If the question

mark does not succeed in becoming the market leader, then after perhaps years of cash consumption it

will degenerate into a dog when the market growth declines. Question marks must be analyzed

carefully in order to determine whether they are worth the investment required to grow market share.

Stars - Stars generate large amounts of cash because of their strong relative market share, but also

consume large amounts of cash because of their high growth rate; therefore the cash in each direction

approximately nets out. If a star can maintain its large market share, it will become a cash cow when

the market growth rate declines. The portfolio of a diversified company always should have stars that

will become the next cash cows and ensure future cash generation.

Cash cows - As leaders in a mature market, cash cows exhibit a return on assets that is greater than

the market growth rate, and thus generate more cash than they consume. Such business units should

be "milked", extracting the profits and investing as little cash as possible. Cash cows provide the cash

required to turn question marks into market leaders, to cover the administrative costs of the company,

to fund research and development, to service the corporate debt, and to pay dividends to shareholders.

Because the cash cow generates a relatively stable cash flow, its value can be determined with

reasonable accuracy by calculating the present value of its cash stream using a discounted cash flow

analysis.

Under the growth-share matrix model, as an industry matures and its growth rate declines, a business

unit will become either a cash cow or a dog, determined solely by whether it had become the market

leader during the period of high growth.

While originally developed as a model for resource allocation among the various business units in a

corporation, the growth-share matrix also can be used for resource allocation among products within a

single business unit. Its simplicity is its strength - the relative positions of the firm's entire business

portfolio can be displayed in a single diagram.

The company is in the Question Mark segment with high growth rate and low market share.

38

4.3 MARKET SEGMENTATION

Market segmentation is the identification of portions of the market that are different from one another.

Segmentation allows the firm to better satisfy the needs of its potential customers.

4.3.1 THE NEED FOR MARKET SEGMENTATION

The marketing concept calls for understanding customers and satisfying their needs better than the

competition. But different customers have different needs, and it rarely is possible to satisfy all

customers by treating them alike.

Mass marketing refers to treatment of the market as a homogenous group and offering the same

marketing mix to all customers. Mass marketing allows economies of scale to be realized through mass

production, mass distribution, and mass communication. The drawback of mass marketing is that

customer needs and preferences differ and the same offering is unlikely to be viewed as optimal by all

customers. If firms ignored the differing customer needs, another firm likely would enter the market

with a product that serves a specific group, and the incumbant firms would lose those customers.

Target marketing on the other hand recognizes the diversity of customers and does not try to please all

of them with the same offering. The first step in target marketing is to identify different market

segments and their needs.

4.3.2 REQUIREMENTS OF MARKET SEGMENTS

In addition to having different needs, for segments to be practical they should be evaluated against the

following criteria:

Identifiable: the differentiating attributes of the segments must be measurable so that they can be

identified.

Accessible: the segments must be reachable through communication and distribution channels.

Substantial: the segments should be sufficiently large to justify the resources required to target them.

Unique needs: to justify separate offerings, the segments must respond differently to the different

marketing mixes.

Durable: the segments should be relatively stable to minimize the cost of frequent changes.

39

A good market segmentation will result in segment members that are internally homogenous and

externally heterogeneous; that is, as similar as possible within the segment, and as different as possible

between segments.

4.3.3 BASES FOR SEGMENTATION IN INDUSTRIAL MARKETS

In contrast to consumers, industrial customers tend to be fewer in number and purchase larger

quantities. They evaluate offerings in more detail, and the decision process usually involves more than

one person. These characteristics apply to organizations such as manufacturers and service providers,

as well as resellers, governments, and institutions.

Many of the consumer market segmentation variables can be applied to industrial markets. Industrial

markets might be segmented on characteristics such as:

o Location

o Company type

o Behavioral characteristics

Location

In industrial markets, customer location may be important in some cases. Shipping costs may be a

purchase factor for vendor selection for products having a high bulk to value ratio, so distance from the

vendor may be critical. In some industries firms tend to cluster together geographically and therefore

may have similar needs within a region.

Company Type

Business customers can be classified according to type as follows:

o Company size

o Industry

o Decision making unit

o Purchase Criteria

Behavioral Characteristics

In industrial markets, patterns of purchase behavior can be a basis for segmentation. Such behavioral

characteristics may include:

o Usage rate

o Buying status: potential, first time, regular, etc.

o Purchase procedure: sealed bids, negotiations, etc.

40

6. PROJECT ANALYSIS: -

6.1 PART A: FORMAT FOR SALES FORCE

6.1.1 DAILY SALES REPORT (DSR): (AS PER

ANNEXURE A)

o The report consists of all the necessary input to trace the customer requirements.

o It helps the account department to compare the expenditure details with the DSR.

o It helps the HR department to manage the attendance details of the Sales Engineer.

o It also helps to know the marketing team what is the potential business with the

customer and promotional expenses required to get the order.

o It also helps to know the competitive scenario and ways to overcome them.

o Along with the total customer summary it helps us to know the next

steps to be taken to acquire the order.

6.1.2 DSR MONITORING REPORT: (AS PER ANNEXURE B)

o This report is the summary of Daily Sales Report and contains all the necessary

columns to trace a sales call.

o It acts as the MIS for top management as every sales engineer can be evaluated case

by case.

o This report helps to monitor the sales engineer at individual level throughout the

month.

6.1.3 MONTHLY TOUR PLAN: (AS PER ANNEXURE C)

o This report helps in advance to know the marketing team about the customer visits.

o It also reminds the Sales Engineer about the sales call to be given to the end

customer.

41

o It helps to plan the budgetary expenses for the tour.

6.1.4 MONTHLY VISIT PER CUSTOMER MONITORING

REPORT: (AS PER ANNEXURE D)

o This report acts as a MIS for the middle level management.

o This report gives the number of visits given to a particular customer in a month.

o It also gives the traceability of a customer till the order is received or lost.

o Depending upon the potential business value the sales engineer can concentrate over

the customer and accordingly plan his visit.

o This report also helps to identify unique customer.

6.1.5 DAILY CALL MONITORING REPORT: (AS PER

ANNEXURE E)

o This report gives the total number of calls given by an individual on a

daily basis for a particular month.

o It gives the variance between the planned calls and the actual.

o It also helps the HR department to manage the daily attendance.

6.1.6 OFFER TRACKING SHEET: (AS PER ANNEXURE F)

o This helps the sales force to monitoring each and every case till the final order is

received or lost.

o This also helps the head office to monitor each and every case.

o It also helps to monitor the channel partners if any enquiry is forwarded to them.

42

6.2 PART B: SALES FORECASTING AND ANALYSIS

6.2.1 SALES TURNOVER LAST FINANCIAL YEAR: (AS PER

ANNEXURE G)

o This table helps to project future sales for the Channel partners and the Sales

Engineer.

o It also gives percentage wise sales contribution of direct customers and channel

partners on the company turnover.

6.2.2 PRODUCTION PLANNING SHEET: (AS PER

ANNEXURE H)

o This sheet helps to plan the production as per the budgeted figures.

o This also helps to plan the expected delivery schedule for the customer.

o This helps the materials department to effectively monitor the inventory.

6.2.3 TARGET SHEET FOR CHANNEL PARTNERS :( AS PER

ANNEXURE I)

o This table gives the projection of total sales for channel partners for the current

financial year.

o This table also gives last year sales by individual channel partners. This forecast

helps to plan and monitor the Channel sales and its effective follow-ups by the sales

team.

6.2.4 SALES FORECAST FOR CURRENT FINANCIAL YEAR: (AS PER

ANNEXURE J)

o This gives the total sales forecasting product wise by taking into consideration the

total quantity to be sold along with the total amount.

o The forecast includes the Co-branded products of a Japanese company.

o This is the target which a sales engineer of a particular territory should achieve in

current financial year

43

.

6.2.5 CUMULATIVE SALES OF ALL TERRITORIES BUDGETED VERSUS ACTUAL FOR 2006-07(Budgeted figure as per annexure J)

CUMULATIVE SALES FOR FOUR MONTHS 2006-07

TERRITORY BUDGETED ACTUAL

BUDGETED IN LACS

ACTUAL IN LACS

BNG 1370256 772645 13.70 7.73 BOM 3205896 3672316 32.06 36.72 BPL 207976 482211 2.08 4.82 BRD 844576 1395407 8.45 13.95 CHD 844576 253326 8.45 2.53 CHN 844576 207790 8.45 2.08 CTR 422360 71340 4.22 0.71 DEL 2817760 1601710 28.18 16.02 DHD 422360 25500 4.22 0.26 GAU 207976 12160 2.08 0.12 HYD 954080 258697 9.54 2.59 JAI 207976 15980 2.08 0.16 KOL 1882512 587123 18.83 5.87 LCK 422360 232993 4.22 2.33 NGP 422360 113402 4.22 1.13 RPR 207976 465849 2.08 4.66

TABLE 2

o The figures in bold are the places where sales force is actively working.

o The actual sales had exceeded the budgeted figures at four places where sales force is

employed except Delhi.

o The budgeted sales at these five places was 72.85 lacs where as the actual sales is

76.17 Lacs.

o Since Delhi had not been able to reach the budgeted figure. There has been increase

in sales by 4.56%.

o If Delhi is not considered then the budgeted figure was 44.667 Lacs and actual is

60.15 Lacs.

o So the increase in sales is 34.65% for four territories.

o Whereas all the other territories the actual figure is less then the budgeted figure.

44

45

6.2.6 GRAPHICAL REPRESENTATION OF BUDGETED VERSUS ACTUAL SALES

Territorywise Budget Vs Actual

2.08

8.45 8.45

4.22

28.18

4.222.08

9.54

2.08

18.83

4.22 4.22

36.72

4.82

13.95

2.08

8.45

32.06

13.70

0.16

4.66

1.132.33

5.87

2.59

0.120.26

16.02

0.712.082.53

7.73

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

BNG BOM BPL BRD CHD CHN CTR DEL DHD GAU HYD JAI KOL LCK NGP RPR

Territory

Rs.

in

Lac

s

BudgetActual

27

6.2.7 LAST YEAR SALES FOR FOUR MONTHS (AS PER ANNEXURE F)

T

A

B

L

E

3

6.2.8 COMPARISON FOR FOUR MONTHS SALES 2005-06 & 2006-07(Data as per Table 2

& Table 3)

TA

BLE 4

o Last year sales of four months for five selected territories were 44.25 Lacs whereas

the sales for the year 2006-07 are 76.08 Lacs.

o So there is 71.93 % increase in sales from last year.

o So all the territories have exceeded the sales from last year due to involvement of

sales force.

o The graph below shows that all territories have exceeded the sales from last year

except Delhi where it is same for both the years.

o Where as the total sales for four months for all the territories was 101.46 Lacs

compared to the last year sales of 71.4 Lacs (Refer Table 5).

SALES FOR 2005-2006

MUMBAI VODADORA BHOPAL DELHI RAIPUR TOTAL

APRIL 285824 92385 15438 770257 73320 1237224 MAY 437723 17251 84878 174635 0 714487 JUNE 821403 97693 3772 245651 56894 1225413 JULY 522521 257837 13620 409667 41299 1244944 TOTAL 2067471 465166 117708 1600210 171513 4422068

COMPARISON FOR 2005-06 & 2006-07

2005-06 2006-07 RS.IN LACS RS. IN LACS MUMBAI 2067471 3672316 20.7 36.7 VODADORA 465166 1395407 4.65 13.9 BHOPAL 117708 482211 1.18 4.82 DELHI 1600210 1601710 1.6 16 RAIPUR 171513 465849 1.72 4.66

28

6.2.9 GRAPHICAL REPRESENTATION OF SALES FOR YEAR

2005-06 & 2006-07

SALES COMPARISON 2005-06 & 2006-07

20.7

4.651.18

16

1.72

36.7

13.9

4.82

16

4.66

05

10152025303540

MUMBAI

VODADORA

BHOPAL

DELHI

RAIPUR

TERRITORIES

RS

. IN

LA

CS

2005-062006-07

29

6.2.10 COMPARISON OF SALES FOR ALL THE TERRITORIES(Data as per annexure J &

Table 2)

SALES FOR ALL TERRITORIES TERRITORY 2005-06 2006-07 BNG 413321 772645 BOM 2067471 3672316 BPL 117708 482211 BRD 465166 1395407 CHD 406564 253326 CHN 206614 207790 CTR 50479 71340 DEL 1600210 1601710 DHD 27385 25500 GAU 190966 12160 HYD 425043 258697 JAI 50739 15980 KOL 575602 587123 LCK 292840 232993 NGP 78508 113402 RPR 171513 465849 TOTAL 7140129 10168449

TABLE 5

o Hence there is 42% increase in overall sales compared to last year total sales for four

months.

o The graph below shows the individual contribution of different territories towards

total sales.

o The five territories selected are contributing 75% of the total sales.

30

6.2.11 GRAPHICAL REPRESENTATION OF INDIVIDUAL CONTRIBUTION OF

DIFFERENT TERRITORIES TOWARDS TOTAL SALES 2006-07

Territory wise Actual SalesBNG8%

BOM35%

BPL5%

BRD14%

CHN2%

DEL16%

DHD0%

JAI0%

KOL6%

NGP1%

RPR5%

HYD3%

GAU0%

LCK2%

CHD2%

CTR1%

31

6.3 PART C: MARKET SEGIMENTATION

6.3.1 BROAD SEGMENTS IDENTIFIED: (AS PER ANNEXURE K)

o 35 segments were identified by considering last five years database. This is done to

help the sales force to get the target market.

6.3.2 SEGMENTED COMPANIES FOR CEMENT: (AS PER ANNEXURE L)

o The database for cement companies is collected by using last five year s database as

well by using various trade magazines and internet.

o The database is prepared as per the territories identified, so as to help the sales force

to get the target market.

6.4 PART D: ADVERTIZING PLANNING

6.4.1 COMPARISON SHEET OF ADVERTIZING: (AS PER ANNEXURE M)

o The sheet is prepared so as to allocate budget for advertising during the current

financial year.

o This will also help the company to allocate budget for various Trade shows organized

across the country.

6.4.2 DEALER APPLICATION FORM: (AS PER ANNEXURE N)

o The form contains all the information from marketing as well as financial perspective

of the Channel partner.

o The competitive information can also be known.

o The financial status of the company can be assessed.

6.4.3 Co BRANDING AGREEMENT

o Co - branding agreement between Motwane and kyoritsu so as to increase the

product basket.

32

7. FINDINGS

7.1 PART A: FORMAT FOR SALES FORCE

o These formats have resulted into efficient monitoring of sales team across various

territories.

o This has resulted into better traceability of customer requirements.

o Proper monthly planning can be done.

o Visit per customer can be monitored.

o Attendance and other HR records can be maintained.

o Performance of the sales engineer can be monitored.

o Expenses on the sales can be estimated.

o Each and every offer can be traced till it is either received or lost.

33

7.2 PART B: SALES FORECASTING AND ANALYSIS

o Last year sales figure help to plan the future budgeting Product wise.

o Also it helps to plan the production schedule and inventory management.

o Target sheet for the channel partners can be prepared based on the last year s

turnover.

o It helps to plan the forecasting for current financial year.

o The sales have increased compared to the budgeted figure by 4.56% by

compensating the Delhi performance, which has not achieved the target.

o If Delhi is not considered then the increase in sales as compared to budgeted

figure for four territories is 34.65%.

o Where there is no sales engineer the actual sales is less then the budgeted.

o Also the sales compared to the last year turnover have increased by 71.93% for

the four months.

o Due to better planning and involvement of sales force the overall sales have

increased by 42% during the current financial year.

o The sales force at five selected territories has contributed to 74% of the total

sales of the current financial year.

34

7.3 PART C: MARKET SEGMENTATION

o The segmentation is helping the sales force to save time in finding the target

market.

o Also the focus is concentrated on the selected segments in the initial stage of

sales call.

7.4 PART D: ADVERTIZING PLANNING

o The advertising planning is helping to find the economical and most preferred

magazine for various types of products.

o Like insulation testor is mostly used by Electrical Contractors hence the

advertisement should be placed in the Indian Electrical contractor and Trader

magazine.

o Hence helps to budget the expenses properly.

35

8. LIMITATIONS: -

1. The study is limited to only 16 territories.

2. Five sales Engineers have been selected to analyze the data.

3. The segmentation is done based on the previous data available.

4. The buying behavior of the consumer has not been taken into the consideration.

5. The cost head has not been considered while analyzing the report.

6. Previous years advertising and promotional expenses have not been considered.

7. The training programme of Sales Engineer has not been considered.

8. While segmenting data was collected for only two major segments as against 35

segments identified.

9. The effect of after sales service on the sales turnover has not been taken into account.

36

9. CONCLUSIONS: -

o The sales turnover of the company has increased by 71.93% just by employing

five sales engineers at different territories as compared to 16 territories

identified.

o The segmentation is helping to boost the overall sales by 4.56% as compared to

the budgeted figure (Only Five territories considered).

o The overall sales have increased (including territories where Engineers are not

placed) by 42% compared to last year s sales for four months.

o The company is also successful to tie up with a Japanese company to Co-brand his

product.

o Hence the overall sales monitoring has resulted into the increase of sales and better

monitoring of Channel partners.

37

10. RECOMMENDATIONS

o The company should conduct a market survey so as to know the market share of the

company and the competitors.

o The company has products like AMR which is a niche segment and not many

competitors are available in the market. Hence company should focus to increase the

sales.

o The company is facing various problems on the service front like delayed service,

delayed response to the customer on the service issues. Hence there is need to

employ service engineers across the 16 territories identified.

o The DSR monitoring process takes lot of time for the sales engineer and also for the

head office to manually enter the details. Hence web portals should be developed so

that the DSR, purchase orders from the channel partners are directly received in to

the Database.

o Also the training aspect is not taken into the report. The sales engineers are facing

problems due to lack of training on the various products. Hence proper training

should be provided to the engineers.

o The forecasting is based on just judgment and therefore company should use

scientific methods of forecasting.

o The channel partners should be increased so as to make easy availability of product

to remote customers.

o The company should also use scientific methods of purchasing like ABC analysis so

as to reduce cost associated with it.

o The supply chain management should be improved so as to make quick delivery to

the customer.

o Technical colleges are yet another segments where the product requirement is there

and various scholarships and technical seminars should be organized so as to build

future sales.

o The company should also help some organization or schools with free equipments as

a part of Corporate Social Responsibility.

38

o The sales promotion in the form of free gifts or in the form extended warranty should

be given to the customer so as to increase the sales.

39

11. BIBLIOGRAPHY

1. C.K. kothari, Research methodology , Methods and Techniques; New Age International Publishers; Second Edition; Page 1-2.

2. Rajan Saxena; Marketing management ; TATA McGRAW HILL; Second Edition; Page 85-113, 165-181, 228,337-388.

3. Philip Kotler & Kevin Lane Keller; Marketing Management ; Pearson Prentice Hall; 12e; Page 96-98, 436-438.

4. Motwane manufacturing Company Pvt. Ltd., Quality System Manual ; Page 14-15.

5. http://www.netmba.com/strategy/matrix/bcg/

6. http://www.valuebasedmanagement.net/methods_bcgmatrix.html

7. http://road.uww.edu/road/zhaoy/Marketing%20774/Other%20tools%20for%20planning.ppt

40

12. ABBREVIATIONS

AMR Automatic Meter Reading

AC Alternating Current

BIS Bureau of Indian Standards

DC Direct Current

DCU Data Concentrator Unit

DGQA Directorate General Of Quality Assurance

DSIR Department of Scientific & Industrial Research

ERTL Electronics Regional Test laboratory

GSM Global System for Mobile

ISO International Organization for Standardization

LCD Liquid Crystal Display

LED Light Emitting Diode

MHA Ministry of Home Affairs

NPL National Physical Laboratory

PSTN Public Switched Telephone Network

OEM Original Equipment Manufacturer

R.F. Radio Frequency

SEB s State Electricity Boards

TRMS True Root Mean Square

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