Siemens Presentation

EVALUATION OF MARKET POTENTIAL AND GO TO MARKET STRATEGY FOR

E-COMMERCE FOR STANDARD MOTORS

RAJAT GARG | NEHA AGGARWAL | DONGALA SSSK TEJA

TEAM SYNCHRO 30-11-2016 1


INDUSTRY OVERVIEW


CROMPTON GREAVES/ABB/BHARAT BIJLEE/SIEMENS/GE

All are selling motors, pumps, drives, starters online on “industrybuying.com”

“Snapdeal.com” too has pumps, washing machines, motors from some of the brands. Very limited SKUs

These are sold by distributors/retailers and not directly by the companies on the popular marketplaces like flipkart and snapdeal

Most of the questions asked and reviews given on the e-commerce marketplaces are by individual buyers.

No complaints were noted due to delivery problems or logistics issues which shows that delivery and logistics are not a problem

There is a constant problem regarding suitability of product for the specific customer needs which gives rise to multiple questions and negative reviews in case of underperformance due to wrong purchases

It is also noted that sellers of branded products online try to get the customer to purchase directly from retailer personnel or distributor website by sharing these details as an answer to customer queries

The entire range of products is not available online on these third party platforms. Difficult to find motor of right specifications since filters on these platforms do not give motor parameter filtering options. Most of the questions asked on these platforms are about specifications as the user is not able to get all his doubts cleared from the specifications shared online. Authenticity of products is questionable as some of the questions asked by prospective buyers are about authenticity

F

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G

S

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THE APP

GE launched the Motor and Generator Store for customers to quickly access key technical information , obtain quotes &

order products

KEY FEATURES

Pricing Availability

Features Specifications

Ordering Tracking

Reviews Ratings

ADDITIONAL OPTIONS

Straight quotes if they are using or stocking machines

Quoting on behalf of their customers (if they are OEMs or

distributors)

SUPPORT OPTIONS

Library of product literature, white papers and maintenance

manuals.

Base ratings and data packs, which contain specifications,

performance data, speed/torque curves, line

drawings, wiring diagrams and engineering notes.

GE MOTOR & GENERATOR STORE


FEASIBILITY FRAMEWORK Serve Me Buyer Order Taker

Sales Model

• May or may not require human intervention

• Customers questions are best addressed online

PERFECT FOR DIGITALLY ENABLED SALES

MODELS

Show Me Buyer Explainer

Sales Model

• Budget oriented purchasers with a pre-defined sales path to follow

• Explainers help buyer navigate information, compare products and reach final decision

NOT SUITED FOR DIGITAL SPACE

Guide Me Buyer Navigator

Sales Model

• Know what they want to buy, but may need help from a sales person in mapping, navigating and orchestrating multiple stakeholders and/or budget resources. CAN BE CUSTOMISED FOR DIGITALLY

ENABLED SALES MODELS

Enlighten Me Buyer Consultant

Sales Model • Never individuals but multiple

stakeholders involved in a complex buying environment

• The buying team may be undecided or unaligned as to what they need, who best to buy it from, and how to finesse the entire process. CAN BE CUSTOMISED FOR DIGITALLY

ENABLED SALES MODELS

Standard Motor purchasers fall

under the ‘Serve Me Buyer’

category

Standard Motor manufacturers &

distributors need to focus on the ‘Order Taker’ sales model

SELLING STANDARD MOTORS ONLINE IS A FEASIBLE SALES

MODEL


PRIMARY RESEARCH METHODOLOGY

Rank each of these on a scale: Very Important, Important, Would like if available (Not so important), Indifferent 1

“How important

are the following when you

are making work-

related purchase online?”

• Deliver the next day • Make real-time inventory information available

online • Self-service my account and orders • Download product information and sales sheets • Schedule delivery by time of day • View recommendations based on past purchases and

my interests/ profile • Look up product information (across any channel) • View my activities across all channels • Return or exchange across different channels • Share unified account and order history across

channels


RESULTS- QUESTION 1

70%

10%

10% 10%

Real Time Inventory

Very Important Important

Not So Important Indifferent

10%

20%

70%

0%

Next Day Delivery



70%

30%

Self Serving Accounts



0%

80%

10% 10%

Scheduled Delivery



0%

40%

50%

10%

Downoad Product Information


Not So Important Indifferent0%

30%

50%

20%

Purchase Recommendation




RESULTS- QUESTION 1

50%

40%

10%

0%

Cross Channel Product Information

Very Important Important Not So Important Indifferent

40%

50%

10%

0%

Cross Channel Account Information


90%

10%

0% 0%

Cross Channel Return/Exchange


10%

70%

20%

0%

Cross Channel Account Information


WHAT FACTORS AFFECT PURCHASE OF STANDARD MOTORS

Total Variance Explained

Component

Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings

Total % of Variance Cumulative % Total % of Variance Cumulative % Total % of Variance Cumulative %

1 4.512 45.118 45.118 4.512 45.118 45.118 3.570 35.699 35.699

2 2.168 21.676 66.794 2.168 21.676 66.794 2.362 23.618 59.317

3 1.448 14.477 81.271 1.448 14.477 81.271 1.914 19.145 78.462

4 1.045 10.449 91.720 1.045 10.449 91.720 1.326 13.258 91.720

5 .562 5.624 97.344

6 .232 2.317 99.661

7 .034 .339 100.000

8 3.602E-16 3.602E-15 100.000

9 -1.159E-16 -1.159E-15 100.000

10 -4.872E-16 -4.872E-15 100.000

Rotated Component Matrix

Component

1 2 3 4

CrossChannelProductInfo -.034 .863 -.023 -.388

CrossChannelActivityInfo .176 .094 .926 .179

CrossChannelReturnExchange -.152 -.162 .086 .820

CrossChannelAccountInfo .075 -.161 -.936 .033

NextDayDelivery -.967 -.155 -.138 .051

RealTimeInventory .986 .115 -.046 .004

Sel fServingAccounts .861 .492 .118 -.021

DownloadProductInfo .782 -.078 -.020 -.516

PurchaseRecommendation .412 .715 .174 .444

ScheduledDelivery .278 .872 .327 -.051

FACTOR ANALYSI- QUESTION 1

Factor 1: Next Day Delivery & Real Time Inventory Factor 2: Cross Channel Product Info & Scheduled Delivery Factor 3: Cross Channel Activity Information Factor 4: Cross Channel Return Exchange

ON TIME DELIVERY

SCHEDULING TRACKING

AUTHENTIC

INFORMATION

RETURN/ EXCHANGE



Rank each of these on a scale: Very Important, Important, Would like if available (Not so important), Indifferent 2

“To what extent do you agree or disagree with the following statements

regarding your work-related purchases?

I buy again from

the same supplier if I find

they have a”

• Consistently have the lowest prices • Excellent customer service • The broadest selection of products or

services • The most credible source of product

details and information • An easy-to-use website • The fastest delivery/shipment


RESULTS – QUESTION 2

90%

10%

0% 0%

Fast Delivery

Strongly Agree Agree Slightly Agree Disagree

50%

40%

10%

0%

User Friendly Website

Strongly Agree Agree

Slightly Agree Disagree0%

70%

30%

0%

Product Detail Source


10%

60%

30%

0%

Product Selection Variety


80%

20%

0% 0%

Customer Service


10%

10%

60%

20%

Low Prices

Strongly Agree Agree

Slightly Agree Disagree

30-11-2016 TEAM SYNCHRO 11

FACTORS AFFECTING B2B BUYER LOYALTY FOR SIEMENS 6 factors

that are widely speculated to induce buyer loyalty in B2B purchases

Consistent Low prices

Fastest delivery/ shipment

Excellent customer service

Easy to use

website

Broadest Selection

of products and

services

Most credible

source of product

information

SIG

NIF

ICA

NT

As per our analysis, supplier’s fastest delivering capability among the competitors emerged as a very significant factor for its customers to stick to a particular manufacturer [Chi-square test is showing a significant association at 89.3% confidence level]

Factor-1: Fastest Delivery/ Shipment

Chi -Square Tests

Value df

Asymptotic

Significance

(2-s ided)

Exact Sig. (2-

s ided)

Exact Sig. (1-

s ided)

Pearson Chi-Square 2.593a 1 .107

Continuity Correctionb .212 1 .645

Likelihood Ratio 2.683 1 .101

Fisher's Exact Test .300 .300

Linear-by-Linear

Association 2.333 1 .127

N of Val id Cases 10

a. 3 cel ls (75.0%) have expected count less than 5. The minimum expected count is .30.

b. Computed only for a 2x2 table

Factor-2: Credible Product Information Source


FACTORS AFFECTING B2B BUYER LOYALTY FOR SIEMENS

As per our analysis, supplier’s credibility to provide product details emerged as a very significant factor for its customers to choose that manufacturer [Chi-square test is showing a significant association at 90.2% confidence level]

Chi-Square Tests

Value df

Asymptotic

Significance

(2-s ided)

Exact Sig. (2-

s ided)

Exact Sig. (1-

s ided)


Continuity

Correctionb .816 1 .366


Fisher's Exact Test .183 .183

Linear-by-Linear

Association 2.469 1 .116


a. 4 cel ls (100.0%) have expected count less than 5. The minimum expected count is

.90.

b. Computed only for a 2x2 table

Factor-3: Easy to use e-procurement website

This factor turned out as the most significant factor among the six factors under test [Chi-square test is showing a significant association at 92.7% confidence level]

Chi -Square Tests

Value df

Asymptotic

Significance (2-

s ided)



Linear-by-Linear Association 4.714 1 .030


a. 6 cel ls (100.0%) have expected count less than 5. The minimum expected count is .30.


FACTORS AFFECTING B2B BUYER LOYALTY FOR SIEMENS

E-procurement portal enables a faster delivery

channel

E-procurement portal itself positively impacts

the buyer loyalty

E-procurement portal increases the access and

credibility of product information supplied by

the Siemens

Insights from Market Research on Buyer Loyalty Factors



Select only 3 from the given options 3 “Of the

following, which three

features/ functions would you most like

your suppliers to

offer?”

0 10 20 30 40 50 60 70 80 90 100

Search Function on Website

Product Recommendations on Website

Product Ratings on Website

Product Recommendation by Manufacturer

Backend Integration with Manufacturer

Selection Percentage

• Enhanced search functionality on their website • Showing ratings and reviews of products/services • Improved personalized product or service

recommendations on their website • Integration with our back-end finance, accounting, OMS, or

ERP systems • Merchandising/recommending relevant products and

services



4

“Which of the

following purchasing

options have you used for

work-related

purchases?”

• Use of credit or debit card • Payments via accounts payable utilizing invoices/ purchase

orders (POs) • Use of online payment services • Purchases through e-Procurement portal

Choose only one from the options given below

0%

20%

10%

70%

Percentage of Users

Credit/Debit Card Account Payable Online Payment e-Procurement

TEAM SYNCHRO 30-11-2016

16

STANDARD MOTOR CONSUMERS CHANNEL PREFERENCE

Large Corporate Houses, OEMs and Contract Purchasers

•Will prefer one on one interaction during the buying cycle

• Large volume purchases more bargaining, more discounts

• Low probability of using e-channel to place order

Distributors

• Want to deal with the company sales department directly for purchase

• Would like to have a e-channel to track order, get more details about products, etc.

• Would not mind if Siemens were to create an e-marketplace for them to sell online

Individual Buyers and Small Distributors/Retailers

• E-Commerce friendly- OUR TARGET CUSTOMER

• Small Amount Purchases Low Volumes Need Best Price Assurance

• Purchase online if present in remote locations and no direct contact with distributor

Independent Exchange Consortia Based Exchange Private Exchange

Allow distributors to sell on independent platforms to

increase volume sales

Create a private platform for distributors to manage and

track sales, monitor inventory. Eventually give buying options

on this platform Do not go for Consortia Based

Exchange

Focus on improving service to distributors by empowering them with smart e-tools for a better purchase experience Provide a marketplace to small retailers and individual consumers to buy at the best price from the distributors

Advantages

Standardization of order prices and monitoring of distributors

Electronic Invoicing

Distributor Scorecards

Sharing of Engineering Documents

Logistics Planning Made

Easier

Online quoting of orders, price

negotiation cycle time reduced significantly


ADVANTAGES OF E-COMMERCE FOR SIEMENS

THANK YOU


Siemens Presentation

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