2. India- Macroeconomic Environment
-Growth in Income in Urban areas > Growth in
Income in rural areas across the decade.
-More disposable income at the hands of the
Urban class.
-Urban India will drive a four fold increase in
average national income
- Great opportunity for high value products.
-Cities will account for nearly 60% & 70% of
India’s GDP by 2015 & 2030 respectively.
-India will have 68 cities with population more
than 1 million by 2030 up from 42 today.
2005 2015
4. Indian Consumer Electronics Market Analysis
-The consumer electronics and home
appliances market is worth Rs 70,000
crore (around $15 billion)
- Following are the Sales revenue
targets of major players in this sector:-
-- Samsung $10 B by 2013
-- LG- $10 B;
-- Whirpool- $2B;
-- Videocon- $ 5 B; by 2015
- With a $10-12 million (Rs 45-55
crore) investment on a manufacturing
line (excluding cost of land), a
company can churn out 15,000
refrigerators, or 9,000 washing
machines, or 1 million mobile phones
in a month. Typically any capacity
addition takes 12 months to become
operational.
&&
-every dollar invested on an asset, a
company can earn a little over $3 in
sales
--KPMG
Primary Growth drivers:- - Consumer spending on CE to grow
at rate higher than GDP growth.
-Change in demographics and lifestyle will push sales. - Shift
towards higher value products (in the urban markets).
-Different strategy for rural markets with more focus on volume
generators.
-Share of sales from modern retail channels will grow as FDI in
retail kicks in.
-Industry will continue to remain price competitive. Newer
technologies will also lower per-unit cost.
Challenges:- - Price competition will put pressure on margins.
- Increase in input price and volatile exchange rate.
- Excess capacity can trigger price war.
- Spiraling inflation will take the fizz out of consumer spending.
5. Consumer Durable Industry
-The urban consumer durable market for products
including TV is growing annually by 7 to 10 %
whereas the rural market is zooming ahead at
around 25 % annually
-Samsung India is launching a major distribution
push into tier-II and tier- III cities. The plan is to
expand the reach of consumer electronics and
mobile sales points by as much as 50% from
current levels.
-Mobile handsets accounted for 32% of consumer
electronics spending in 2009. The market will
continue to grow robustly due to a projected
increase in mobile subscriber penetration from an
estimated 62% in 2010 to 145% by 2015 as well as
falling handset prices, as the market momentum
shift to semi-urban and rural areas.
The AV segment will account for about 23% of
consumer electronics revenues over the forecast
period and driven by video, which will account for
84% of revenues in this segment by 2015.
6. Opportunity- Modern Retail & Specialist retailers
-Electronics and appliance specialists see growth of
6% in 2009 to reach Rs481 billion
-Sales through electronics and appliance specialist
retailers expected to see 10% constant value CAGR
over forecast period
7. Primary Research- Lajpat Rai Market
Televisions:-
Grey market sale:- Approx 70000 TVs are sold
in 1 day
Maximum CRTs sold- 14 inches
Ranging for 1800 to 2500 Rs
Without warranty
No Major Brands in this segment
Hub for all the major towns in India
LCDs without warranty sold at as low as
12000
Huge sale in AV -DVD players/ MP3 players
Mobiles:-
Sales Per Month-
MNC- 7 mn| Indian- 2.5 mn|Chinese- 2.5 mn
Even entry-level customer, features like dual
SIM, FM, color, flash are must.
Over 75% of the handsets are with camera.
Demand of GPRS and Bluetooth is increasing
Surge in Qwerty handsets & Social N/w enabled
Customers ask for Android based & Touch
Phones
Trade in Cash only. Recurring customers.
1st Phase (2011/12 Launch)
Inverters
Mobile Phones
2nd Phase (2013 Launch)
DTH- Set Top Boxes
Netbooks/Notebooks
8. Key Success Factors & Vision Statement
KEY Success Factors
to be managed
Remarks Attractiveness
Product – Consumer
Electronics
- Still highly underpenetrated: Huge Opportunity
- TV still un launched- Segment with largest value &
Volume
5
Promotion - All media- TVC, Radio, Social Media, Direct Marketing
in Rural India
4
Geographic Coverage - Huge untapped market
- Start with Pilot projects in markets
3
Distribution - Hub & Spoke Model
- Strong ERP system for better inventory
- Piggybacking in Some states
2.5
Customer Service - Strong network to maintain relations
- Word by mouth to improve customer perceptions
- Innovative marketing to sustain interest in rural &
Urban Areas
- Work on the technical perception of the company
2.5
3.4
8
Vision-
To be one of the leading Consumer Appliance company in the country driving on
innovation and customer service.
Mission-
Target 20-15 is to reach $1 Bn sales from the existing portfolio. And additional $1 Bn
from the sale of Inverters & Mobile Phones in the period 2012-2015.
9. 700 million mobile phone subscribers
Handset Market growing at CAGR of 23.1% (2005-09)
Monthly demand - 13 million handsets per month.
CAGR of 16.3% for the five year period 2009-2014,
Value of $12.9 billion by the end of 2014.
Forecast - Volume of 206.7 million units by 2014
Cellular phone penetration: 45 % in 2009
Replacement sales increased to 50 % of total sales
Inadian Mobile Handset Industry
10. STRATEGY Connect with target group through a medium that reaches them
in a language that they understand
TARGET Urban first-time buyers and semi-urban /rural upgrades
PRODUCTION In-house Product Development, Design and Manufacturing
facilities. Work with leading ODM/ OEM/ EMS / Design houses to
get access to latest products, designs and technologies
DISTRIBUTION State-level distributors, who further appoint area/town
distributors to reach the retail stores &cover all major modern
retail stores.
Godrej Mobiles
FOCUSED MARKETING
BRAND VIBRANCY
PRODUCT DEVELOPMENT
CHANNEL MANAGEMENT
QUALITY AFTER SALES SERVICE
Assumptions
• Initial Capital to start the operations • INR 1200 mn
• R&D Expenses to be incurred initially • INR 400 mn
• Average Retailers per Sub distributor • 60
• Cost of Capital • 15%
• Gross Margin per handset • 20%
• Average Retailers Per Sub Distributors • 60
Assumptions
Yr 1 Yr 2 Yr 3 Yr 4
Average Price of a handset sold INR 2,400 2300 2,300.00 2200
Expenses
• Logistic Costs
• Service Cost
• Communication
• Travel & Conveyance
• Marketing & Promotion
• Incentives
12. Inverter Market Scenario- India
4k-6.5k
6.5k- 10.5k
4k-6.5k
4k-6.5k
Though the market is competitive and
fragmented but un-penetrated
Luminous has the maximum market share of
around 10% of the Inverter market
Salient features: - Cost
Competitiveness, After Sales support,
wide distribution network, Strong Brand
awareness, 1st movers advantage,
Reliability and quality of the product.
Inverter Categories:-
Mid range for home segment
SME/SMB
Application based inverters- For lifts,
Hotels, Hospitals, Petrol pumps, Telecom
BTS, etc.
By Market size in India : - North> West > East >
South
Govt. of India has estimates- Demand of
installed capacity of over 2,00,000 MW by 2012
and over 4,00,000 MW by 2020.
(600VA- 1.5KVA) Inverter
Mid range home segment
3.8k-7.5k
13. Identification of Potential markets
Electricity penetration in India
Pilot phase
Identification of Potential markets :
Identification of 10 states based on
electricity penetration in India
Parametric ranking of the 10 states
Pilot Phase : Rajasthan, Bihar ,UP
selected
Districts are identified to venture
into for pilot phase for the states
Hub and Spoke model used: based
on Godrej partner /distribution offices
Source: www.indiastat.com
Phase 1
Phase 2
Identified
state
Average
Population per
vilage Rural literacy
% of working
rural population
No. of rural
HH
HH availing
banking
services
HH with
electricity Average score
UP 0.35 0.54 0.48 1.32 0.50 1.28 0.74
Bihar 1.48 0.44 0.46 0.81 0.45 0.10 0.63
Rajasthan 0.72 0.63 0.52 0.72 0.67 0.41 0.61
West Bengal 0.53 0.56 0.63 0.46 0.57 0.91 0.61
MP 0.41 0.58 0.64 0.52 1.00 0.41 0.59
Chhattisgarh 0.42 0.61 0.68 0.22 0.45 0.95 0.55
Orissa 0.31 0.60 0.54 0.44 0.48 0.39 0.46
Assam 0.45 0.61 0.49 0.27 0.36 0.35 0.42
Jharkhand 0.33 0.46 0.56 0.24 0.50 0.21 0.38
14. Total Market Size : Pilot Phase
Districts
Total
Households
Number of
unelectrified
Householdes
Number of
Schools
Household
industry
workers
Kanpur 224275 89710 4034 23393
Unnao 398756 159502.4 2424 30522
Lucknow 229516 91806.4 4325 20285
Raebareli 454640 181856 2459 35266
Alwar 383844 153537.6 4241 26299
Bharatpur 247936 99174.4 2399 9164
Dausa 172,097 68838.8 3241 12353
Jaipur 367891 147156.4 4765 36576
Nalanda 310799 233314 2786 26773
Patna 419619 342134 3897 30813
Bhojpur 278627 201142 2987 21523
Gaya 444220 366735 2376 41022
For Pilot phase,4 districts were identified for one hub and based on the number of households, schools and workers, potential for pilot
phase is estimated.
For Rajasthan and Uttar Pradesh,60% electricity penetration(source : Indian national health survey 2006 )while real data used for Bihar
Average cost of the Product
For Households 600 VA 4000
For Household industry
workers 800 VA 4500
For Schools 1.4K VA 6500
16. Marketing Strategies
Online Advertising:
Social Media Marketing: Current Rage.
PR & Advertorials: To increase visibility and brand
image
Strategic Tie Ups:
With Real Estate Developers, IPL, Sporting Events
Outdoor Advertising:
Events Hosting, Banners at selective locations for
some time
Television & Print Ads- Conventional Media
Marketing
Strategies
to be Used
Online
Advertising
Strategic
Tie Ups
Outdoor
Advertising
TVC/
Radio/
Print Ads
• Create an Engagement Model Around Objectives & Resources
• Address Specific Customer Needs
BLOG or be BLOGGED: Add blogging to the marketing mix, make people talk
about you, Always note PEOPLE trust PEOPLE
17. Marketing Strategies contd…
facebook
HOW?
• Create a Godrej Facebook page
• Use this page for discussions & events
• Integrate Godrej with Facebook to get discussion & event updates on Godrej website
WHY?
• Interaction at a more personal level between users
• Users can upload & share their Godrej Appliance Experience
• Facebook is widely used and hence more people would be involved. The ultimate goal is to get the
people know about godrej
• Discount coupons for Godrej members
Reach
70% of the private cabs daily commuters are from
business & corporate sectors
10% commuters are college students and Sr.citizens
98% of commuters belong to SEC A and B
Impact
Unlike other outdoor advertising, Cabvertised brands
are at eye-level
Cabvertised brands are seen at prime spots
Cab interiors deliver a more detailed message to a
captive audience
Outdoor Advertising - CABVERTISING
18. 18
Haats/ MelasInfluencers and opinion leaders
NGOS MFI, SHGs and BanksRegional Film Super star
Local Political leaders
Godrej Rural Promotions
• Demonstrate the product
to the opinion leaders.
• Promote individual use.
• Give a commission from
the revenue of the sale.
• Promote Word of mouth
for the product.
The Neta
The Barber
The Sarpanch
The Panditji
The Elders
Why?
• People Power
• Wealth
•Influence
•Networking skill
• Native of the region
has understanding of
the consumer.
• Can be involved in
the entrepreneur skills
•Collaborate with the Regional Super Stars
• Can be involved as a Local brand
ambassador .
• Better recall for the rural people which
pamphlets and print advertisement with the
Star.
Ravi Kishen and Manoj Tiwari-
super stars of U.P and Bihar
regional films
• NYKS- Nehru Yuvak Kendra sangathan
•Rajasthan Environment Preservation Society
•Vatavaran
Why?
• Good penetration in the rural areas
• Volunteers in the NGO are of the local region .
• Option to Tie Up with multiple NGOs in field of
Education, Health Care, Disaster management and
Women Empowerment.
•NGOs coming up with promoting green
environment and reducing carbon emissions can be
used as stalwarts
Why?
• Finance is required for up scaling
• Strategic tie ups with banks to fulfill
priority sector lending requirements
• SHGs are organized and can be easily
targeted for product promotion and
Usage
• MFIs pan India outreach .
Frequency of visits- 88% of Haat
visitors visit 4 Haats/week
• Village retailers availability-
62% of nearby cluster village
retailers attend Haats regularly
•Promotion capability : Useful
for both static & mobile promotion.
• Trade predisposition-Visiting
retailers come with shopping lists but
less than 60% of their final shopping
is planned
•Measurable-By monitoring
secondary sales of sub dealer catering
to cluster.