Kitchen Appliances

Presented by:Group 6, S5

Aprajita Aparna Sahay (12DM-034)Inderjeet Singh(12DM-059)

Retika Bhat (12DM-120)Vineeth R Tengse(12DM-169)

Bivojit Samanta(12FN-037)Mayank Malhotra(12FN-073)

Shreya Trivedi(12HR-030)

Mornings best enjoyed fresh with

Agenda

• Kitchen appliances industry in India• Havells: Brief History• Market Scenario• Havells Kitchen appliances• Product portfolio• Physical flow• Channels• Channel management decisions• Competitor Analysis• Perceptual Map

Kitchen appliances industry in India

Purchasing Power

• Value options• Price Plus

Effective cooking modes

• Most emergent market

Purpose driven

• Handy• Time saving

Havells: Brief HistoryHavells India Ltd was incorporated as Havell's Pvt Ltd in August 1983 and converted into a public limited company in March 1992.It started its operations by producing miniature circuit-breakers and distribution boards

They entered into a technical collaboration with Christian Geyer, Germany, to manufacture miniature circuit-breakers in India. In order to manufacture ELCBs, the company entered into technical collaboration with Schiele Industriwerke, Germany

They continued their expansion by acquisitions and ventured into switchgear, cables, CFLs, lighting fixtures, consumer durables, Electric water heater, etc

In August 2011, Havells launched its range of kitchen appliances. The business is synergetic to consumer durables and will get benefit of Havells brand which has huge acceptance in fans and geyser market.

Market Scenario

Rs.4000 Crore market. Rs 2700 crore is branded

market

FYI 2012 saw a 16% increase in revenue.

Volume growth was 10.6%

Dominated by unorganised segment

which has a share of 40%

Premium category makes up about 10% of the

kitchen appliances market

Fastest growing segment was the Premium

segment which grew by ~ 40% 2008 2009 2010 2011

0

5

10

15

20

25

30

35

40

45

50

Bajaj PhilipsBraunLexusInalsaNovaMaharajaMorphy RichardsOthers

15.4

8.6

6.9

65.3

4.8

3.22.3

47.6

SalesBajajPhilipsBraunLexusInalsaNovaMaharajaMorphy RichardsOthers

Havells Kitchen appliances

Launch

Availability

Market Share

• August 2011• Premium Segment with

competitors like Bajaj , Philips, Morphy Richards, Black and Decker

• Products were initially sold in top 40 cities through 4,000 electrical goods outlets and through Havells exclusive Galaxy stores

• Targeted a market share of 5% by 2014.

• Has achieved a market share of 4% in Delhi and 2% in India.

Havells

Electrical Consumer

Goods

Fans, Dry Iron, Geyser

Kitchen appliances

Cooking Brewing Food preparation

Cables Switchgears Lighting and fixtures

Product Portfolio

Pop-up ToasterSandwich Maker

Oven Toaster GrillerElectric Cooker

Induction Cooker

KettleCoffee Maker

JuicerMixer Grinder

Juicer Mixer GrinderBlenderChopper

Mornings best enjoyed fresh with

Physical flow

Manufacturing Unit

Mother Warehouse Warehouse Godown Outlets

ChannelsH

avel

ls

Modern Trade

Exclusive stores (Galaxy)

Multi-brand (Croma,reliance digital)

Traditional trade Direct servicing

E-tailing flipkart,etc

Number of intermediaries

Galaxy Exclusive Stores

Manufacturer

Dealer

Consumer

Traditional trade

Manufacturer

Distributor

Retailer

Consumer

Galaxy stores•Land and store construction/rental• Interior design and decoration•Maintenance•Manpower•No monthly franchise fee

Investment

•The colour scheme followed is red and white. •The ceilings are “Armstrong” in colour•The tiles used for flooring are “Kajaria” tiles. •The outlay of product placement is given to the dealers.•The lighting is also done uniformly across all the Galaxy stores in India.

•The in-store advertisements are provided by Havells

Assistance by Havells

•15 verticals. Margins vary from 3% to 30%. Avg of 5%-6%•Goods are sent directly from its warehouse•Two channels to place orders: Sales rep and Online portal•Kitchen appliances are sold at MRP.•They give a margin of around 20%

Operations

Galaxy Interiors Distributor List Price and Max Retail Price

Traditional trade

No wholesalers

• Distributor-cum-Retailer in less densely populated areas

2 distributors in West Delhi and 1 in East due to varying population density• Products sold at prices lower than MRP

The margins that earned are around 20%

CHANNEL MANAGEMENT DECISION

Selecting Channel Partners

Distributor

Financially strong so that he can make an initial investment of 35-40 lakhs

Strong network of retailers in his territory

Growth and Profit record

Dealer

Location

Footfalls

Future Growth Potential

Terms and responsibilities of Channel Partners

• Price list, schedule of discount • Distributor List Price which is generally 25-30% lower than

the MRPPrice policy

Conditions of sales

• Distributors: Mostly in the terms of setting of monthly targets and its achievement

• Dealers: Assistance in store setup. Min ROI of 5%. Achievement of Sales targets

Mutual services and

responsibilities

Credit Period Cash Discount10 days 3%30 days 1%45 days No discount

Promotional schemes

Quantity

Purchase

Scheme

• To promote ordering of more volumes of a particular product• Order of 12 pieces of Juicer-Mixer-Grinder fetches a dealer/distributor 2 additional pieces

Free of Cost

• To promote selling two products• Order of 8 pieces of Juicer-Mixer-Grinder receive 4 pieces of Dry Iron free of cost

Bundle

• To promote two products together.• If the discount available on an order of 12 Juicer-Mixer-Grinder is 8% and that on an order of 10 sandwich maker is

12%, then an order of a bundle of 12 Juicer-Mixer-Grinder and 10 sandwich maker will fetch a discount of 15%.

Loyalty scheme

• Promote loyalty towards Havells• “Shehensha Scheme” – on meeting a minimum level of target, some loyalty points are rewarded and a definite

number of loyalty points are equivalent to 1% FDR (Fixed discount rate). Can be redeemed either through cash on travelling or through additional discounts

Channel Conflict:

No instance of channel conflict. Tracking mechanism in place in which the Master Carton has a code mentioned which defines the territory within which the goods in the carton is meant to be sold.

Key Performance Indicators for sales

No qualitative component in assessment of sales teamAchievement of Targets has a 100% weightage in assessment.

Post sales service

Lodge a complaint at a toll free numberWithin 48 hours the concerned service person visits the consumer and solves the problemConsumer constantly updated about the status of his complaint via smses

Competitor Analysis

Philips, Black and Decker,

Morphy Richards

Usha, Bajaj

Maharaja Whiteline, Kenstar

Havells Philips

Price At least 10% higher than Philips

Premium

Warehouse Sahibabad Noida

Margin to distributor

20% 11%

Demand Low High

Perceptual Map Steps Followed :

1. Analytics started by collecting consumer rating for Havells and the competitive products in competitive set (Phillips , Black & Decker, Morphy Richards, Bajaj , Usha)

2. Through a Survey , response were taken on Likert Scale with options (Strongly Agree, Agree, Neither Agree nor Disagree , Disagree and Strongly Disagree) for the possible attributes that consumer might consider.

Survey Link : https://docs.google.com/spreadsheet/viewform?formkey=dHYwdkxsYW53bGREWGlVYTJXTFpmMnc6MQ

Market Survey

Regression analysis

3. Regression analysis was conducted .4. X-Y perceptual map was plotted based upon two parameters which were highest in value

Detailed Analysis (excel sheet): Grp6(S5)_Havells Kitchen appliances_Regression.xsl

Havells Phillips Black & Decker

Morphy Richards Bajaj Usha

Awareness 2.36 1.53 2.93 1.89 1.6 1.92

Safe/Trustworthy 2.1 1.89 2.57 2.03 2.1 2.23

Way Ahead .. !!

• Good brand recall of Havell , But need to communicate about entry in new category.

• Customer Target- Premium• Convey Value• Make POD