MAPPING RETAIL REACH AND PENETRATION OF HINDWARE –ATLANTIC WATER HEATER IN DELHI & NCR MARKET.
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Transcript of MAPPING RETAIL REACH AND PENETRATION OF HINDWARE –ATLANTIC WATER HEATER IN DELHI & NCR MARKET.
A REPORT
ON
MAPPING RETAIL REACH AND PENETRATION OF HINDWARE –ATLANTIC
WATER HEATER IN DELHI & NCR MARKET.
By
SHASHI BHUSHAN
Enrolment No: 15BSP1161
Hindustan Sanitaryware & Industries Limited
A REPORT1
ON
MAPPING RETAIL REACH AND PENETRATION OF HINDWARE –ATLANTIC WATER HEATER IN DELHI &
NCR MARKET.
By
Shashi Bhushan
Enrolment No: 15BSP1161
Hindustan Sanitaryware & Industries Limited
A report submitted in partial fulfilment of
The requirements of
PGPM Program of
IBS GURGAON
Distribution list:
COMPANY GUIDE: Mr. Shashank Shrivastva (Marketing Head, HSIL limited)
FACULTY GUIDE: Prof. Nidhi Tak (Faculty Member, IBS Gurgaon)
Date of Submission:
AUTHORIZATION
2
The project report titled as ― “Mapping retail reach and penetration of hindware – atlantic
water heater in Delhi & NCR market” has been authorized by Mr. Shashank Shrivastva
(Marketing Head, HSIL limited), and Prof. Nidhi Tak, faculty guide, IBS Gurgaon. The
report is submitted as a part of the evaluation for Summer Internship Program and is as a
partial requirement of PGPM Program of IBS Business School, Gurgaon.
SHASHI BHUSHAN
Enrolment No: 15BSP1161
IBS Gurgaon
Prof. Nidhi Tak Mr. Shashank Shrivastva
Faculty Guide Marketing Head
IBS Gurgaon HSIL limited
ACKNOWLEDGEMENTS
3
I wish to express my deepest gratitude to Mr Shashank Shrivastva (Marketing Head, HSIL
ltd.), for his guidance, as without the direction given by him; I would not have been able to
capitalize on the experiences & knowledge gained during the internship. I am thankful for
sensitizing me to reflect on the experiences and view them from a different perspective in
order to make the entire journey more enriching and worthwhile.
Also I would like to sincerely thank my faculty guide Prof. Nidhi Tak IBS, Gurgaon for his
genuine support, valuable advice and sincere comments which helped me a lot to accomplish
this project.
Shashi Bhushan
EXECUTIVE SUMMARY
4
The report “Mapping Retail reach and Penetration of hindware-atlantic water heater in Delhi
& NCR Market” contains present scenario in water heater selling via dealer’s chain and
market study of competitor in this segment.
Hindustan Sanitaryware & Industries Ltd. is one of the top most companies in India and even
being in the elite position it was noticed that it is only able to cover retail outlets which is not
even close to half of the total number of retail outlets present in the market.
Water heater industry in India is facing stiff competition after liberalization and
modernizationt.
A water heater segment has expanded and various companies are getting into Indian markets
to ear n a share of the new profits. With increased purchasing power and decreased waiting
time, people are now getting more & more attracted towards this segment, they want new
technologies with best quality and features. However, there are various factors that a
consumer considers during this process of purchase. Dealers are also attracted towards this
segment, with a view to good margin and service of the company. A report contains
information which collected by field survey in Delhi & NCR region. By visiting various
dealers I came to know about the product and their policy of selling and views about the
hindware as well as knowledge of water heater market. There were many reasons found by
me towards hindware-atlantic water heater which are not selling much better in the market
compare to other brands. I analysed challenges and parameters of success which mainly
concern with water heater market. I found more than 15 companies who selling water heater
other than hindware-atlantic water heater in Delhi & NCR zone among them 8 companies
who have good market position because of their brand awareness, good margin and credit
5
policy given to dealers. I visited more than 80 dealers but 60 dealers replied positively and
help me in research process.
The objective of this study is to identify un-tap potential market and measure the amount of
sales or adoption of a hindware – atanctic water heater as compared to the total theoretical
market for water heater product or service. Also study the market of certain areas and find out
the shortcomings and problems faced by our product.
The methodology comprises of primary data i.e. observations and interviews & secondary
data i.e. information acquired from internet and magazines.
6
TABLE OF CONTENTS
Authorization 3
Acknowledgements 4
Executive Summary 5
Chapter 1: Introduction
1.1 Industry Profile1.2 List of top water heater companies in India1.3 Industry Overview1.4 Growth and development1.5 Challenges1.6 Porter's Five Forces Model
8
810111212
Chapter 2: Hindustan Sanitaryware & Industries Ltd.
2.1 Company Background2.3 Evolution of HSIL2.4 Vision, Mission & other strategies2.5 Quality Policy & Objectives2.6 Business Profile2.7 SWOT Analysis
1416181924
Chapter 3: Project, Process & Learning
3.1 Objective3.2 Methodology3.3 Finding3.4 Suggestion and Conclusion3.5 key leaning
2829302841
References 44
7
1. OVERVIEW OF CONSUMER DURABLES MARKET
1.1 Overview
India is expected to become the fifth largest consumer durables market in the world
by 2025. The consumer electronics market is expected to increase to USD 400 billion
by 2020. The production is expected to reach USD 104 billion by 2016.The sector is
expected to double at 14.7 per cent compound annual growth rate (CAGR) to USD
12.5 billion in FY15 from USD 6.3 billion in FY10.
Urban markets account for the major share (65 per cent) of total revenues
in the consumer durables sector in the country. Demand in urban markets is
expected to increase for non-essential products such as LED TVs, laptops, split
ACs and, beauty and wellness products. In rural markets, durables like refrigerators
as well as consumer electronic goods are likely to witness growing demand in the
coming years as the government plans to invest significantly in rural electrification.
The Government of India has increased liberalisation which has favoured foreign
direct investments (FDI). Also, policies such as National Electronics Mission and
8
digitisation of television and setting up of Electronic Hardware Technology Parks
(EHTPs) is expected to boost the growth of this sector.
The consumer durables market is anticipated to expand at a CAGR of 14.8 per
cent to USD 12.5 billion in FY15. Also, the demand from rural and semi-urban
areas is projected to expand at a CAGR of 25 per cent to USD 6.4 billion in FY15,
with rural and semi-urban markets likely contributing majorly to consumer durables
sales.
Before the liberalization of the Indian economy, only a few companies like Kelvinator,
Godrej, Allwyn, and Voltas were the major players in the consumer durables market,
accounting for no less than 90% of the market. Then, after the liberalization, foreign
players like LG, Sony, Samsung, Whirlpool, Daewoo, and Aiwa came into the picture.
Today, these players control the major share of the consumer durables market.
Consumer durables market is expected to grow at 10-15% in 2007-2008. It is growing
very fast because of rise in living standards, easy access to consumer finance, and wide
range of choice, as many foreign players are entering in the market
With the increase in income levels, easy availability of finance, increase in consumer
awareness, and introduction of new models, the demand for consumer durables has
9
increased significantly. Products like washing machines, air conditioners, microwave
ovens, color televisions (CTVs) are no longer considered luxury items. However, there
are still very few players in categories like vacuum cleaners, and dishwashers
Consumer durables sector is characterized by the emergence of MNCs, exchange offers,
discounts, and intense competition. The market share of MNCs in consumer durables
sector is 65%. MNC's major target is the growing middle class of India. MNCs offer
superior technology to the
Consumers whereas the Indian companies compete on the basis of firm grasp of the local
market, their well-acknowledged brands, and hold over wide distribution network.
However, the penetration level of the consumer durables is still low in India.
Classification of consumer durables sector
1. Consumer electronic include Vcd/Dvd, home theatre, music player, color television
(CTVs), cameras, camcorders, portable audio, Hi-Fi, etc
2. White goods include dishwashers, air conditioners, heaters, washing machines,
refrigerators, vacuum cleaners, kitchen appliances, non-kitchen appliances, microwaves,
built-in appliances, Tumble dryer, personal care product etc.
3. Moulded luggage include plastics
4. Clocks and watches
5. Mobile phones
Scope:-
1. In term of purchasing power parity (ppp), India is the 4th largest economy in the world and overtake Japan in the near future become the 3rd largest.
2. Indian consumer durable market is expected to reach $400 billion by on 2010
10
3. India has the youngest population amongst the major countries. There are lot of people in the different income categories nearly the two third population is below the age of 35 and nearly 50% is below 25.
4. There are 56 million people in middle class, who are earning us$4,400-US$21,800 a year. And there are 6 million rich household in India.
5. The upper-middle and high-income household in urban areas are expected to grew to
38.2 million in 2007 as against 14.6 million in 2000.
Opportunity:-
1. In India the penetration level of white goods is lower as compared to other developing
countries.
2. Unexploited rural market.
3. Rapid urbanization.
4. Increase in income level, i.e. increase in purchasing power of consumers.
5. Easy availability of finance.
Threats:-
Higher import duties on row materials.
Cheap imports from Singapore, China and from other Asian countries.
11
Water Heaters Industry
“India Water Heaters Market ”, water heaters market in India is expected to cross
USD330 million in 2015. Major factors driving water heater sales in India include
increase in disposable income, improved standard of living and rising awareness among
consumers regarding benefits of branded water heaters. Residential sector is currently the
largest revenue contributor in India water heater market. The high contribution of
residential sector can be accredited to the increase in housing projects in the country.
However,water heater use in India is not limited to residential sector as they are
increasingly being adopted in industrial and commercial sector as well.
Water heaters in India are emerging as technologically upgraded and innovative products.
Electric water heaters are currently the most popular among consumers. Although electric
water heater market is moving towards maturity, continuous innovations on the part of
manufacturers are driving growth in the market. In addition, solar water heaters are
anticipated to gain prominence in India water heater market over the next five years.
Growth in solar water heater market is being propelled by government efforts and demand
among consumers for energy efficient and eco-friendly products. Gas water heater market
in the country is still at a nascent stage, but is expected to pick pace on the back of
government plans to extend piped gas network.
Major players in India water heaters market are Racold, Bajaj, Venus, V-Guard and AO
Smith , hindware among others. The market is currently dominated by Racold followed
by Bajaj and Venus. Moreover, foreign companies like Ferroli are entering the market
with innovative products. Ferroli started its operations in India in 2013 by bringing in a
premium range of first of their kind Wi-Fienabled water heaters in the country. Other
12
small and medium sized companies also hold a significant share of around 25% in the
market.
“Water heater manufacturers in the country are facing stiff competition from unorganized
sector and Chinese imports, which provide cheaper products. Indian consumers have
limited awareness of technology and consider water heater an ordinary electrical
appliance, giving not much importance to its specifications. However, this trend is
changing with increasing awareness regarding safety risks that these cheap alternatives
pose. Over the next five years, changing consumer preference, along with energy
efficiency and quality standards, is expected to increase opportunities for market players
in the organized sector.” said Mr. Karan Chechi, Research Director with TechSci
Research, a research based global management consulting firm.
13
LIST OF TOP 10 WATER HEATERS COMPANIES IN INDIA
Table 1.
Top water heaters Companies
SerialNo.
Companies
1 Midea
2 Morphy Richards
3 Ao Smith
4 Ferroli
5 Usha
6 Havells
7 Venus
8
9
10
Crompton
V-Guard
Bajaj
14
INDUSTRY OVERVIEW
Appliances that utilize different energy sources to heat water above its initial temperature in
order to provide water in the different range of temperatures are called water heaters. Water
heaters are widely used in many domestic applications such as cooking, bathing, cleaning,
and space heating. Water heaters also find wide applications in the manufacturing industries
such as chemicals, food and beverages processing, and thermal power plants. Water heaters
utilize various energy sources, such as gas, electric, solar, and geothermal, to heat and supply
hot water.
The global water heater market is driven by factors such as a development of hybrid solutions
in order to cater to the demand for energy-efficient, high-performance, and easy to install
water heaters, rising popularity of renewable technologies, and replacement of old tanks,
among others. Strategic alliances by players across the value chain of the market are playing
a key role in catering to the demand for water heaters across the domestic markets.
The global water heater market report begins with an overview of different types of water
heaters and fuel types used in water heaters.
The water heater market is segmented by:o Product Type
o Storage Type
o End-use
Growth and development
15
1. Benefit of Rise in share of income.
2. Availability of new varieties of products.
3. Product pricing.
4. Availability of financial schemes.
5. Rise in share of organized retail.
6. Innovative advertising and brand promotion.
Challenges
1. Threat from new entrants, especially global companies.
2. Challenges and competition.
3. Threat from substitute products/services.
4. Customer power with respect to availability of choices.
Success in industry would depend on addressing key factor
1. Market positioning and branding
By addressing customer requirements that act as demand drivers by proactive
marketing and establishing strong brand association.
2. Product technology
By providing technological benefit to the customer through low power consumption,
low service requirement, low cost of operation with reasonable price range with
multiple range of the product.
3. Distribution and service networks
16
By addressing proper distribution and service network of the product is key factor in
this industry. Distribution networks and brand recognition will continue to play
significant roles.
4. Attractive locations
By addressing proper location of distribution channels and outlets, and
operational department is play important part in this industry.
17
MICHAEL PORTER'S FIVE FORCES MODEL:
Competitors rivalry:
Number of well-established player, with new players entering
Good technological capability
Many untapped potential markets
Threat of New Entrants:
Most current players are global players.
New entrants will need to invest in brand, technology and distribution.
Threat of Substitutes:
Technological Enhancement.
Bargaining power of customers:
Multitude of brands across price points- wide variety of choice for customers.
Bargaining power of Suppliers:
Indigenous supply base limited- most raw materials are imported
18
Hindustan Sanitaryware & Industries Limited
COMPANY’S OVERVIEW
The Company was incorporated as Hindustan Twyfords Ltd. in 1960 by the Somany family
(promoter group) in collaboration with Twyfords Ltd., UK, to introduce vitreous china
ceramic sanitaryware in India.s
The Company changed its name to Hindustan Sanitaryware & Industries Limited in 1969 and
has since been popularly known as ‘HSIL’. In March 2009, the company name changed to
HSIL Limited".
Product portfolio
The Company is the most respected sanitaryware manufacturer in India today.
It diversified into the manufacture of glass containers through the acquisition of Associated
Glass Industries Limitedin 1981.
It widened its product basket with a range of bathroom and kitchen appliances products,
leveraging the power of the Hindware brand.
It expanded in the retail business of Speciality Home Interior Solutions in 2007 through a
wholly owned subsidiary, called Hindware Home Retail Pvt. Ltd. (HHRL). Its first store
commenced operations in May 2008 under the ‘EVOK’ brand.
Prestige
The Company’s Hindware brand has been recognised as a Superbrand for the last four years
in a row.
It holds a significant market share in all the business verticals of its presence.
19
Its institutional customers in the Building Products Division comprise reputed builders like
DLF, Unitech L&T, Raheja’s and Puravankara.
Its institutional customers in the Container Glass Division (AGI) comprises brand-enhancing
names like Coca Cola, Pepsi, GlaxoSmithkline, Pfizer, AstraZenca, Ranbaxy, Dr Reddy’s
Laboratories, Hindustan Unilever, Priya, Global Green, Continental Coffee, Reckitt
Benckiser, Seagram, Sab Miller, McDowell, Shaw Wallace and United Breweries to name a
few.
It possesses the largest distribution network in India’s building products industry, supported
by 1086, 4109, and 6000 dealers, sub-dealers and retail outlets respectively.
Public holding
The Company’s shares are listed on the Bombay Stock Exchange and the National Stock
Exchange.
Presence
The Company is headquartered in New Delhi, supported by four regional offices and four
area offices.
It derived nearly 89.87% of revenues from within India and 10.13% from exports to 54
countries in 2007-08
SeqBusiness segment Location Annual capacity
1 Building Products Division Bahadurgarh (Haryana) 14,000 MT
2 Building Products DivisionSomanypuram, (Andhra
Pradesh)18,000 MT
3Container Glass Division
(AGI)Sanathnagar (Hyderabad) 953.10 million pieces
.
20
HISTORY
&
EVOLUTION OF HSIL LIMITED
Since its foundation, HSIL has seen its fair share of challenges and over the years has had a
steady growth and success. Some of the milestones in Hindware’s journey are listed below
year wise.
Year Achievements
1960 Hindustan Twyfords Ltd. was incorporated to introduce vitreous china sanitaryware for the first time in India
1962 A factory was set up and production commenced in Bahadurgarh, Haryana (earlier part of Punjab)
1967 Company renamed to Hindustan Sanitaryware & Industries Limited
1981 Expanded business into container glass manufacturing through the acquisition of Associated Glass Industries Ltd.
1982 Mr. Sandip Somany joined HSIL with focus on business growth;AGI Furnace upgraded to increase the capacity
1986 AGI upgraded I.S. machines; introduced Electronic control & Lehr Temperature control systems
1989 Acquired Krishna Ceramics Ltd. (Bibinagar); expanded ceramics manufacturing capacity
1990 Commissioned world’s largest open flame kiln in the Bahadurgarh factory
1991 Introduced the Hindware Brand
1992 Accessed natural gas in the Bahadurgarh plant
1994 AGI initiated in-house mould designing through CAD and high precision CNC machines
1996 HSIL crossed the Rs.100 core revenue milestone
1997 Launched water conservation product, with 3.5 litre flushing - Super Constellation water closet
1998 Established the Secunderabad office for Building Product DivisionProduct category expanded to introduce PVC cisterns as part of the Hindware portfolio
1999 Raasi ceramics acquired to further expand sanitaryware manufacturing capacity
21
Bibinagar capacity expansion completedISO accredition received by Bahadurgarh PlantFirst Indian Plant in the sanitaryware industry to receive this prestigious accredition
2000 Hindware established online presence with their websiteBuilding Products Division expanded to Bathroom Wellness category (Bathtubs / Showers / MFMT’s etc.)
2001 ISO 9001:2000 Certification received by Building Product Division
2003 Strategic Partnership Agreement with Sanitec for introducing high-end Keramag Brand in the Indian market
2004 Building Products Division expanded to chrome plated bathroom fittings (faucets)Rebranded the Hindware logo for a youthful presentationLaunched light-weight flat flint bottlesAGI upgraded production technology to make it one of the most flexible production facilities in the country
2005 HPC (Mauritius) Ltd. invested USD 12.2 million and acquired 14.99% stake in the company
2006 Expanded export business
2007 HSIL crossed the Rs. 500 core revenue milestone
2008 HSIL entered the home interior fashion design retail industry through its subsidiary HHRPLEstablished two retail megastores in NCREstablished corporate office presence in GurgaonBPD achieved the highest production levels of 31,000 MT
2009 The company was renamed to HSILLaunched Hindware Lacasa display showroomsBhongir greenfield project commenced production, significantly expanding capacity of container glass business
2010 Awarded the Golden Peacock National Quality Award 2010Honoured with the prestigious THE BIZZ 2010 award for being an inspirational organization with admirable business management systemsAwarded the 2010 IMM Award for Excellence by the Institute of Marketing and Management, DelhiAcquires the bath fittings business and operations of Havel’s India LimitedAcquires UK based Bar wood Products Limited.
22
Hindware wins 4 P's Award for India's 100 Most Valuable Brand 2010Hindware forays into the tiles segmentHindware chosen as a leading Power brand 2010HSIL again awarded Business Super brand Award
2011 HSIL Launches Premium Bath Fittings Brand BENELAVE
2011 HSIL Launches Luxury Brand QUEO
2012 Became the first Indian company to be felicitated with the UPC star rating by the International Association of Plumbing and Mechanical officials (IAPMO)
2013 Awarded with the prestigious GRIHA (Green Rating for Integrated Habitat Assessment) certification
2013 Honoured with the ‘Best Bathroom Fixtures’ Good Homes Award by ZEE channel
VISION
Passionately strive to enrich customer’s quality of life thereby enhancing stakeholder value.
MISSION
The mission of HSIL limited is to continuously maximizing company’s wealth by
manufacturing and marketing best quality engineering products that go into daily life.
SHORT TERM OBJECTIVE:
To improve image to shareholders.
To improve internal processes and controls.
LONG TERM OBJECTIVE:
To be the lowest-cost producer in the market.
To become largest volume player in the customer durable industry
BASIC STRATEGIES:
23
New product development
New market development
Outdoor promotion
Rural thrust
Cost management
QUALITY POKICIES:
Customer Satisfaction
Total quality management
Continuous up gradation of technology
Improvement in processes
Focus to meet emerging needs of the customers
Mutually dependent lasting relationship with co-packers, associates and suppliers.
Environment responsibility
Development of human resources
Improving skills and knowledge
QUALITY OBJECTIVES:
Reduction in customer complaints
To start documentation of market returns dealer wise
To empower the workmen on individual work area to ensure that only quality product
are passed on the next page of production.
Continuous training for the development of human resources.
To minimize the accident level.
24
hindware Atlantic
HSIL Ltd has forged an alliance with Groupe Atlantic to launch cobranded water heaters in
Indian subcontinent. A collaboration that brings in technologically advanced products to the
Indian consumer.
With the latest in technological advancement, superior consumer and safety features,
products made in a state-of-the-art manufacturing plant in Thailand, this association is going
to be tremendously beneficial for the consumers and trade partners
‘Hindware’, has strategically signed a long-term sourcing agreement with French thermal
comfort solutions major Groupe Atlantic to sell water heaters and geysers under the co-
branded identity — hindware-atlantic.
Under the agreement, the company will sell water heaters in the Indian market this month,
beginning with 10–25-litre capacity models which occupy over 75 per cent of the market,
priced between Rs 9,990 and Rs 11,490.
“They are venturing into the water heater/geyser business for the first time, with the former
pegged at Rs 1,500 crore, and growing at a CAGR of 15-30 per cent. Over the next three
years, however, the same market in India is poised to hit the Rs 2,000-crore mark,” HSIL
President and Chief (Consumer Business) Rakesh Kaul told Deccan Herald.
HSIL’s consumer products arm is currently involved in the production and sale of kitchen
25
appliances and extractor fans. With the launch of hindware-atlantic, the company is aiming at
a 10 per cent water heater market share in three years, garnering a business of Rs 250 crore.
“Over 40 per cent of the water heater market comprise of the unbranded segment, with few
very large players. With their new co-branded range, they are offering a set of tech smart
water heaters, which are also energy efficient”.
The SKUs for water heaters from hindware-atlantic will be sourced from Groupe Atlantic’s
plants in Thailand and Egypt, and over the next 24 months will be sold across India through
online platforms, and electrical, electronic, and sanitary outlets (around 2,500 retail outlets).
Groupe Atlantic’s push
The initiative will allow the €1.3-billion Groupe Atlantic to enter the Indian market. The
company is a reputed name in Europe for its sustainable water heating solutions, which are
likely to come to India in the near future.
“Solar energy is one of the areas that may be explored. But there is a large price difference
between solar and electric energy for heating purposes. In many markets, there are subsidies
for the former. Hence, we need to study the Indian market thoroughly, but are confident that
it is a promising one,” Atlantic International Sales Manager (Middle East and French
Overseas) Serge Raveyre said.
HSIL will launch its 1–6-litre heater line, and will also get into the larger capacity 50–100-
litre water heaters. “HSIL’s total turnover as of March 2015 was Rs 1,965 crore. In the next
three years, we believe consumer products will take up 15 per cent of the overall business,”
26
About GROUPE ATLANTIC
Founded in 1968 in la Roche-sur-Yon on the west coast of France, the Atlantic
Group is a leading French company in climate control engineering.
Constantly attentive to our markets, our various brands offer customers a range of
products that meet all types of needs: water heaters and electric heaters, domestic and
collective boilers, air conditioning, ventilation, and renewable energy sources.
The company's experience with multiple energies (electrical, gas, domestic heating
oil, solar, etc.) enables it to operate across the entire climate control engineering
market (collective, domestic and service sector applications).
Reliable, varied and high-quality products
The Atlantic Group uses cutting edge technology and the expertise of its highly
qualified and motivated teams to design and develop products that reflect modern
demands for comfort.
4% of turnover is invested in research and development to provide a constant impetus
for innovation. Patent applications are regularly submitted and the Group enjoys great
commercial success.
27
International expansion
The constant attentions focused on market growth, innovation and product
development gives the Atlantic Group unique, internationally acknowledged
expertise.
The brands and products are now distributed in more than 100 countries worldwide
and the Group's international activity is growing steadily.
After its roll-out in Western Europe, our Group was rolled out in Eastern Europe, the
Near East, and the Middle East.
More than 1000 employees currently work on our new manufacturing sites or in our
international subsidiaries.
Steady growth
With 40 years of industrial and commercial activity behind it, the Atlantic Group
continues to grow steadily year on year. Our turnover and employee numbers have
thus regularly increased, both in France and internationally with 4400 employees and
950M euros in 2012.
HSIL and Groupe Atlantic together revolutionizing the market
HSIL in collaboration with Groupe Atlantic brings in the latest and technologically superior
products for advanced thermal comfort.
28
Advantages:
o Products with latest technological advancement from Europe’s leading brand in thermal
comfort.
o Superior consumer benefits and safety features:
1. Advanced heating system gives 25% faster heating* and 5 star rated energy efficiency.
2. Patented O’Pro Technology & Titanium coated tank enhances the life of heating element &
tank respectively.
3. Heating element made of superior grade copper – longer life.
4. Diffused entry of cold water gives hot water at consistent temperature and provides superior
bathing experience
5. IP24 superior safety through concealed high quality electrical wiring that ensures protection
against water splash
6. Technologically advanced, superior product ensures longer product life and a longer warranty
o CFC free high density liquid PU foam provides superior insulation, heat retention & compact,
aesthetically appealing design.
o Manufactured in the state-of-the-art plant in Thailand
o Dedicated pan India service network
BUSINESS PROFILE
Current Scenario:
29
HSIL Limited the flagship Company of the Somany Group is the largest Indian manufacturer
of Sanitaryware products with a dominant market share of 40% in this industry.
HSIL Limited products are available across the length and breadth of the country and are
supported by over 1000 direct dealers and 12000 sub dealers & retail outlets.
HSIL Limited pioneered the concept of Vitreous China Sanitaryware in India.
Business Classification: HSIL has 2 divisions
Glass Division: under the brand name AGI GLaspac, the 2nd largest glass containers
manufacturing division with manufacturing facility in Hyderabad and Bhongir (50
kms from Hyderabad).
Building Product Division:
Bathroom Products: vitreous China sanitaryware, Tubs, Whirlpool & airpool,
Multifunctions, Bath accessories, Faucets fittings, seat covers, PVC Cisterns,
Concealed cisterns, Pressure pump, Shower Enclosures, Steam cabins etc.
Home Appliances: Kitchen sinks, Kitchen chimneys, Kitchen hobs & Ovens.
HSIL Limited’s own Sanitaryware Brands: Hindware Italian Collection, Hindware Art,
Hindware, Raasi. In addition to its own brand, the company has also launched the world’s
premium brands Teuco & Keramag in Indian market.
HSIL Limited’s sanitaryware manufacturing facilities are based in Bahadurgarh (Haryana)
and Somanypuram (Andhra Pradesh).
HSIL Limited is the only Indian Company to have its R&D Centre recognized by the
Government of India’s Ministry of Science & Technology for over 3 decades.
HSIL Limited’s installed capacity of 600 tonnes/ year at the time of inception has now
reached 32000 tonnes/ year (2.8 million pieces/ year).
HSIL Limited has introduced more than 250 products in the last 18 months.
30
HSIL Limited has evolved from a Sanitaryware manufacturer to a comprehensive Bathroom
solutions Company and has ambitious plans to continuously expand the basket of product
offerings by introducing new product mix within the extended umbrella of Bathrooms,
Kitchens & Beyond.
Expansion Plans:
The company is targeting a turnover of Rs 1000 crore by 2010 & Rs 2000 crore by 2014 from
the current turnover of Rs 671 crore.
Sanitaryware Division
To increase its sanitaryware portfolio & meet the growing demand for sanitaryware products
HSIL Limited is looking at sizable acquisitions in India as well as overseas market.
Retail: HSIL Limited has identified retail as one of the key focus area of the company. The
company plans to have a 3 tier expansion strategy:
Hindware Lacasa – Brand Experience Centres
Exclusive Hindware Boutiques & Arcades in major towns.
Shop in shops in small cities.
o EVOK: HSIL Limited has floated a separate company Hindware Home Retail Pvt. Ltd
(HHRL) & intends to open 50 large format stores under the brand name of EVOK.
The cumulative investment to fuel the Retail Expansion would be approx 300 crores.
The current capacity of the sanitaryware Bibinagar Plant is 18000 MT and will be increased
to 22000 MT.
A new container glass manufacturing plant has been set up at Bhongir , Andhra Pradesh
which has augmented the production capacity manifold.
.
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1. HSIL is the first company in the
Building Materials Industry to be
awarded the prestigious ISO 9001,
14001 and OHSAS 18001 certificate
2. It is the first in India to receive
the ISI License, back in 1962
3. Hindware has been recognized as
a Superbrand consecutively for
many years
4. Hindware manufactures 2.7
1. Hindware is famous majorly in India
but around the world, its awareness is
lesser.
2. Intense competition means limited
market share growth
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million sanitaryware pieces each
year
5. Hindware possesses the most
committed distribution network in
India's building products industry.
1. Hindware should leverage its
brand equity and come up with
brands in new construction
materials category by implementing
Umbrella Branding.
2. It can build up a strong
distribution network to ensure its
presence in all the parts of the
country
3. Global expansion can help boost
business
1. Hindware is facing a tough
competition from regional players in the
market.
2. Competitors are offering lucrative
schemes to distributors so that they
push their products. Hindware should
also look for trade promotion schemes
SWOT ANALYSIS OF HSIL LTD.
STRENGTHS WEAKNESSESS
OPPORTUNITIES THREAT
PROJECT PROCESS AND LEARNING
About Project
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Mapping Retail reach and Penetration of hindware-atlantic water heater in Delhi & NCR
Market”.
What is Market Penetration?
Market penetration is a measure of the amount of sales or adoption of a product or service
compared to the total theoretical market for that product or service . the amount of sale or
adoption can be an individual company’s sale or industry while the theoretical market can be
the total population or an estimate of total potential consumers for the product.
During my tenure as a summer intern I was assigned the project of “Mapping Retail reach
and Penetration of hindware-atlantic water heater in Delhi & NCR Market”.
So in HSIL Ltd., it was noticed that it is only able to cover some retail outlets which is not
even close to half of the total number of retail outlets present in the market. HSIL ltd is not
able to cover retail shops in each and every area or territory.
The deliverables out of this project are as follows:
1. Find out the problem faced by the dealer in sales and the distribution.
2. Pen down a process by which one can identify coverage Gap, start covering those
retail outlets, way to align distributors and ensure serviceability.
OBJECTIVES:
The project carried out for four main objectives
1. To carried out for market survey for knowing prevailing market condition of water
heater via dealer’s chain.
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2. To find out other company’s appliances that dealers approaching.
3. To analyse the selling techniques of dealers.
4. To evaluate the alternative preferences of dealers.
Area to be covered: Delhi & NCR
METHODOLOGY:
To study and identify the un-tap potential market along with the shortcomings of unable to
reach to the retail sector completely, the methodology is completely based on field work and
qualitative data obtained by interviews of the retail shopkeepers and observing the market
from the perspective of the retail shopkeeper, salesman and distributor by studying the
market.
LIMITATION:
I tried my best to get information and draw out responses required for preparing the project
report and management of organization. Yet there were some problems faced by me these are
as follows:
The Research study is confined to Delhi & Gurgaon only.
The sample size may not be adequately represent the market as a whole.
Some retail shopkeepers are not willing to respond properly.
Unavailability of dealers and busy schedule of dealers was exclusive factor because of
which a lot of time was wasted during data collection.
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OBJECTIVE OF THE STUDY
The objective was to find out the market share of hindware-atlantic water heater
products, advantages, and disadvantages of hindware-atlantic water heater products from
dealers and to find out what problems they are facing with the hindware-atlantic water
heater products so that problems can be resolved to increase the sale.
PICTURE SHOWING THE PRODUCT OF HINDWARE –ATLANTIC WATER
HEATER IN ONE OF THE SHOP
Data collection mode
Primary data
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These are the data that I collect directly from dealers by visited as a customer as well as researcher by asking direct question with them.
I have done some research work through internet and employees of hindware to know more about it.
My research work was mainly descriptive; these methodologies help me to get wide range of information.
Secondary data
I have collected data from Internet like the economic times, Company’s websites, Just dial and Indian info line.
Sale's Analysis of the Water heater in Gurgaon .
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2%
33%
28%
7%5%3%
21%
Sale's Analysis of the Water heater
HINDWAREAROSMITHRECCOLDHAVELSBAJAJCROMPTONOTHERS
PRODUCT PORTFOLIO
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10L Storage water Heater
15L Storage water Heater
25L Storage water Heater
Tank construction
Material: MS. 2 domes and 1 cylinder, welded
front bolted flange
Material: MS. 2 domes and 1 cylinder, welded
front bolted flange
Material: MS. 2 domes and 1 cylinder, welded
front bolted flange
Heating Element
2000 W - Mono 230 V~, 8,3W/cm² of surface load
2500 W - Mono 230 V~, 8,6W/cm² of
surface load
2500 W - Mono 230 V~, 8,3W/cm² of surface
load
Thermostat
Bulb thermostat, single pole single throw.
External temperature setting, Frost free setting
(12 +/- 7 °C) in conformity with IEC 335-
2-21
Bulb thermostat, single pole single throw.
External temperature setting, Frost free
setting (12 +/- 7 °C) in conformity with IEC
335-2-21
Bulb thermostat, single pole single throw.
External temperature setting, Frost free
setting (12 +/- 7 °C) in conformity with IEC
335-2-21
Insulation
Liquid High Density CFC free Polyurethane foam
Liquid High Density CFC free Polyurethane
foam
Liquid High Density CFC free Polyurethane
foam
Temperature setting
(regulation) 65 ± 5 °C 65 ± 5 °C 65 ± 5 °C
FINDINGS
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1. Hindware have good product range of water heater but very few dealers
have hindware products.
I found many reasons through field survey that hindware still facing tough
competition in water heater market due to less awareness of brand, therefore very
few dealers have hindware products.
2. A less of awareness of hindware -atlantic water heater.
A main reason of less sales of hindware- atlantic water heater in the market is less
product awareness, 35% dealers are not aware about hindware atlantic water
heater.
3. Hindware have poor after sale service and complaint handling.
26% dealers given their opinion that hindware have poor after sale service and
complaint handling, it creating bad impression of hindware products.
4. Other company have good margin and service compare then hindware.
Another main reason that I found is other company specially A.O. smith, recold,
havells , v-gurd have good service and margin, this companies are giving benefit
of credit policy to their dealers.
.
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Suggestions And Conclusion
I found conclusion from this market research, but with conclusion I
added some suggestions which may help the company as follows,
1. I found that there is very good market of water heater of
hindware but to keep this momentum hindware should have to
make loyal dealer who can promote this brand.
2. I analysed that water heater market in Gurgaon region can
provide good margin and growth opportunity to the company.
3. A.O.simth, Recold and some of the brands are equally good in
comparison of hindware but because of aggressive promotion
in market they are in good condition in Gurgaon region,
hindware should carry some promotional work.
4. A company should give discount and attractive schemes with
good margin to attract more dealers as well as customers in the
market.
5. A new method to connect customers directly is to visit
residential areas and societies by showing demo of water
heater through mobile van as like mobile ATM of banks.
6. As we know Indian consumers are more conscious about good
quality of product with reasonable price, hindware should
carry some promotional offers in market.
7. Hindware should promote its brand through brand promotion
activities like exhibition, fair, events, sponsorship, CSR
activities to increase its awareness.
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8. Hindware should increase the availability of their products so
that the product can easily be available to the consumer at
every corner of the city.
9. Hindware should carry discount and schemes and credit policy
with a view to satisfy the dealer’s chain.
10. Hindware has to increase its retail outlets via franchises chain
in the market.
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KEY LEARNINGS
Looking back to the day one of my internship, I had no clue how will I be able to get going
but as I reflect the thoughts of what all knowledge I am taking back after this valuable
experience gained in these months, I could say a much more than a lot. Some of the key
learnings are as follows:
Learnt how to do the market as I covered each and every beat of Gurgaon & visited
every retail shop which the distributor covers.
Learnt about the extensive distribution system which the company incorporates.
Learnt more about how consumer durable sector works and the marketing strategies
which the company uses along with how it sets the targets for its salesman and
distributors.
Learnt how to deal with people and the art of personnel selling with the importance of
communication skills and convincing power in the daily market
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REFERENCES
http: www.hindwarehome.com/about
http: www.hindware appliances .com/about
http: www.economiestime.com/
http: www. slideshare.com/
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