Project Report On

Study on ceiling fans at CROMPTON GREAVES

Submitted in partial fulfillment of the requirement of PGDM course of MET College 2011

Submitted By, Ankita Gada PG11011

Nishitkumar Dosani PG11027 Vinit Chedda Shraddha Patel PG11050 PG11055

PROJECT GUIDE
Prof. Charania
Marketing Management

MET Institute of Computer Science (MET ICS)

ACKNOWLEDGEMENT

We would like to express our sincere gratitude to all those who helped us in completing our project. We are grateful to Prof. Charania, MET College for encouraging us to do this project in a practical approach. We thank Mr. Vishal Neb, Deputy Marketing Manager, Crompton Greaves who shared his valuable time and experience through whom we received the required information crucial for our project. We would also thank the Institution and other faculty members without whom this project would have been a distant reality.
Our special thanks and appreciations to our colleagues in developing the project and our parents who have willingly helped us out with their abilities.

INDEX
Section A

1) 2) 3) 4) 5) 6) 7) 8)

Profile History Product Line Fans Ceiling Fans Marketing Mix Competitors Market Share

05 06 07 08 09 10 21 22

Section B
1) Questionnaire 2) Tabulation of Data 3) Recommendation 24 27 31

PROFILE

As one of the world`s leading engineering corporations, CG provides end-to-end solutions, helping its customers use electrical power effectively and increase industrial productivity with sustainability. CG was established in 1937 in India; and, since then the Company has been a pioneer and has retained its leadership position in the management and application of electrical energy. CG is a part of the USD 4 billion Avantha Group, a reputed Indian Industrial conglomerate led by its Chairman, Mr. Gautam Thapar. Since 2005, CG has embarked upon an ambitious globalization strategy, growing both organically and inorganically, drawing into its fold leading international companies such as Pauwels, Ganz, Microsol, Sonomatra, MSE and PTS. Consequent to this globalisation, CG now enjoys manufacturing bases in Belgium, Canada, Hungary, Indonesia, Ireland, France, UK and US, in addition to more than twenty manufacturing locations in India, employing more than 8000 employees worldwide with diverse nationalities and cultures. A worldwide marketing network of more than 150 representatives spans the globe, offering the entire range of CGs products, solutions and services. Today, CG is a public listed company, amongst the "A" (premier) category of listings on the Bombay and National Stock Exchanges of India and its GDRs are listed on the London Stock Exchange, with over 70,000 shareholders.

HISTORY

The origins of CG can be traced back to the pioneering work of Colonel REB Crompton, who, in 1878 founded a business at Chelmsford, Essex, England under the name of REB Crompton & Co., to engage in the manufacture and contracting of electrical equipment. REB Crompton & Co. merged with F&A Parkinson Limited, thereby establishing Crompton Parkinson Limited (CPL) in England. In 1937, CPL established its wholly owned Indian subsidiary 'Crompton Parkinson Works Ltd.', in Mumbai, along with a sales organization, 'Greaves Cotton & Crompton Parkinson Ltd.' In the year 1947, with the dawn of the independence of India, the Company was taken over by Lala Karamchand Thapar, an eminent Indian industrialist who formed the Thapar Group. In 1966, Crompton Parkinson Works Ltd and Greaves Cotton & Crompton Parkinson Ltd. merged to create Crompton Greaves Limited (CG) in its present form. CG established its international manufacturing footprint in the year 2005 by acquisition of the Belgium based Pauwels Group, which gave CG additional manufacturing facilities for Power and Distribution transformers at Belgium, Ireland, USA, Canada and Indonesia. This was followed with a series of successful acquisitions - Ganz, Hungary in 2006; Microsol, Ireland in 2007; Sonomatra, France; MSE, USA in 2008 and PTS, UK in 2010 in its quest to establish a technology edge, increase its global market reach and enhance the product portfolio. The business domains of the new companies that joined the CG family, has charted the way for CG becoming a "full solutions provider" which has carved out for CG a position as a serious international player and a recognized transnational corporation.

PRODUCT LINE
Crompton Greaves Ltd. Product Line

Power Systems

Industrial Systems

Consumer Products

Transformers & Reactors

Motors; High / Low Voltage

Fans

Switchgear Products

Generators / Alternators

Appliances

Power Quality Solutions

Railway Signaling & Coach Applications

Lighting

T & D Systems / Engineering Solutions

Drives & Automation

Pumps

Protection, Control & Automation

Stampings & Laminations

Home Automation

LV Switches & Panel Products

Integrated Security Systems

FANS

Fans
Industrial & Other Fans

Domestic Fans

Ceiling Fans
Table Fan

Industrial Fans

Special Purpose Fans Cooler Products

Wall Mounting Fans

Pedestal Fans

Domestic Exhaust Fans

The company earlier known as Crompton Parkinson Works manufactured its first ceiling fan in 1937 at Worli, Mumbai. In 1989, Crompton Greaves Ltd. became the only company in the fan industry to manufacture one million fans under a single roof in India. The fan with four blades is CGs innovation. This segment is considered as bread and butter of the company. It has the biggest range of products in fans industry. It manufactures and sells more than 90 lakhs fans per year. CG has turnover of ` 1100 - ` 1500 Crore only from fans. CG fans are exported to several countries throughout the world few of them are Seria, Belgium, Canada,US, UK, Australia, France, etc.

CEILING FANS

People are rediscovering that ceiling fans are cheap and energy efficient way of cooling. Apart from being functional and efficient ceiling fans also look good and even fantastic.

Market Segment
It seems bizarre that in a hot and humid country such as India, one of the most cost-effective gadgets to increase personal and collective comfort should have been a luxury till recent past. The versatility, adaptability as well as universal applicability of this wonderful machine has now created a worldwide market that cuts across income lines and uses, ranging from the basic function of blowing air to more complex sophisticated tasks. Target market of CG fans is low income group, middle class, higher middle class and very high income group. i.e. every household is target market for company.

Brand Values
When a customer thinks of a fan the chances are that the name most top of mind is Crompton. This is the real ower of this fine brand, recognized and validated, time and again, by Indian consumer studies. Over the years, the powerful brand recall the identity of fans with Crompton has impacted not only dealers but also consumers. Crompton fans signify and embody trust, unimpeachable quality, reliability and a sense of belonging. The brand has been generational in character, like a family that has grown up with, inspiring and been inspired by its customers. The brand has never fallen behind trends; it has led them. The legacy of the fan that keeps working from year to year is the special bonding it has forged with its customers a tie that has only grown stronger with time.

Marketing Mix

Product CG ceiling fans are broadly divided into 4 categories. Following are some of the fans with the features.
Under light Ceiling Fans

Zephyr Motor with Unique Acrylic covers. 5 Acrylic Blades and 3 beautiful lamp shades.

Jupiter

10

5 blades with decorative shanks,Four lampshades, pull cords for speed and light control, Aristocratic design.

Decorative Ceiling Fans

Lerone An Aesthetically very well crafted designer fan, Inspired from the smooth flowing floral designs.

Imperial Cool Exciting Looks, Contrasting Colour Trims Complements ceiling.

11

BEE Star Rated Fans

Aeromach BEE 5 Star Labeled Ceiling Fan. Beautifully Crafted & Styled model with Silent Performance Greater Reliability & Higher Air Delivery

High Breeze Plus BEE 5 Star Labeled Ceiling Fan. "Tried & Tested" Model with Silent Performance Greater Reliability & Higher Air Delivery

12

Standard Fans

High Speed Standard fan with painted Golden Ring on Motor

Olga Diverging Blades, Concentric Painted Gold Rings on Motor

The estimated life of a CG Fans is approximately 15 years.

13

Company always strives to give out quality products following the IS374 standards. Company gives 2 years of guarantee on fans.

Product Life Cycle

Product Life Cycle (PLC) is a term used to describe individual stages in the life of a product. Product life cycle is an important aspect of conducting business which affects strategic planning.

The product life cycle method identifies the four main stages affecting sales of a product, from the product's inception until its retirement. INTRODUCTION: The company earlier known as Crompton Parkinson Works manufactured its first ceiling fan in 1937 at Worli, Mumbai. Later these were manufactured at Kanjur Marg in Mumbai until the early 1980s. GROWTH: The Major growth period observed by CG especially in case of ceiling fans was 1985 onwards. CG fans division has a number of firsts to its credits as follows.. First company to introduce Under light ceiling fans 1985 First company to introduce 4 Blades Deco fans 1985 First company to manufacture 1 million units under single roof in India 1989 First fan manufacturing company to introduce fans to suit all pockets in all varieties 1992. Last five years proved to be excellent for CG fans where they experienced growth of 32% - 35% per year MATURITY: CG claims that it has reached its saturation point in terms of ceiling fans in last 2 years. It is enjoying market leadership. Company is just concentrating on innovation in the products to maintain its share in market and keep up with the competition. Companys emphasis is on brand and feature differentiation. But one aspect that contradicts the theory is the price range which does not drop.
14

DECLINE: The first quarter of 2011 has proved insignificant in terms of ceiling fans as compared to previous years.

Packaging
Ceiling fans are broadly divided into 4 Size. Small Size Fans 36 or less Complete fan viz. motor, canopy set, regulator and blade set packed in one small box. Medium Size Fans 37 48 Motor, regulator, canopy set packed individually in printed cartons. Blades sets packed in separate boxes. Standard Size Fans 49 55 Motor, regulator, canopy set packed individually in printed cartons. Blades sets packed in separate boxes. Large Size Fans 56 and larger Motor and regulator is packed in printed cartons, canopy set and Blades are packed separately in different boxes.

15

Price
Price basically depends on market forces. As being a market leader, CG follows premium pricing policy where the premium would be 10% - 15% as compared to other brands.

Price Range of CG Fans

Categories Under Light Fans Decorative Fans BEE Star Rated Fans Standard Fans Price Range (`) 3000 10000 1600 2000 1300 1700 1100 1500

Price varies according to the market, purchasing power of Customers and VAT applicable.

16

Place
Market Coverage:c Place depends on the width and depth of the market coverage. Crompton fans has its market all over India & are exported to the US, the UK, Australia, Italy, France, Spain, Greece, Lebanon, Singapore, the UAE, Oman, South Africa, Canada, Sri Lanka and several countries in Africa. Width analysis of market means the number of dealers and retailers of the company; depth analysis means stock of cg fans at each counter.

Distribution Channel: The distribution channel for India is as follows:

Manufacturer

Distributer

Wholesaler

Dealer

Retailer

Commission Agent

customer

17

The manufacturing units of CG fans are at Goa and Himachal Pradesh from where the distribution channel starts. Focusing on Mumbai & surrounding areas it goes as follows.

Goa Plant

Bhiwandi Godown

Distributers (In & around Mumbai)

Retailers

Dealers

The channel is basically DEALER oriented. Company concentrates on increasing the number of dealers. At present there are 105 dealers in Mumbai and 1000 plus at India level. Company perceives that rather than giving more material to debtor, its preferable to appoint new dealer.

18

Promotion
Advertising: It is believed in the advertising world that ultimately a product will sell on its own merit thus underlining the significant role of word-of- mouth. This adage is best illustrated in the positive feedback Crompton fans generate from satisfied customers. In many pockets of the country, the brand has almost become generic to fans. As CG fans have reached its maturity stage, company does not go for extensive advertisement. Company believes that product enjoys premium position in market so spending huge amount in advertising wont give proportionate returns. Latest TV advertisement of CG fans was done in 2005. Recently hoardings were put up across the big cities to communicate the change in brand name from Crompton Greaves to CG. To ensure that the customer is effectively updated on new product developments, the company has identified the sales counter as its first point of contact. Crompton provides product information leaflets and catalogues at all these locations, besides also dynamically displaying its range banners. Catalogs are also uploaded online in pdf format to make selection easier and also convenient. The sports section of national dailies carried sustained advertising for Crompton fans during the first round of the IPL cricket series. Some newspaper ads, posters, billboards and banner ads are also done by its dealers.

19

Sales promotion - Media and non-media marketing communication are employed for a predetermined, limited time to increase consumer demand, stimulate market demand or improve product availability. Examples: Coupons, sweepstakes, contests, product samples, rebates, tie-ins, self-liquidating premiums, trade shows, trade-ins, and exhibitions.

Sales promotion drives at the regional level ensure that Crompton fans can be seen on high-visibility locations such as front-lit hoardings, gantries, bus and metro panels, road shows and mobile vans. Crompton Greaves is notably present at most national exhibitions for electrical goods. Prominent amongst these is Elecrama and Gridtech which provide the company high visibility platforms to promote its wares on a large scale. In the Hannover and the Dubai Electricity Fairs, Crompton Greaves stalls with banners, display logos, glossy handbooks are must-visit destinations. At these fairs the company sends out a powerful message: it can compete with any world-class company and benchmark its products and technologies with the best in the business.

Public relations - Paid intimate stimulation of supply for a product, service, or business unit by planting significant news about it or a favorable presentation of it in the media. Examples: Newspaper and magazine articles/reports, TVs and radio presentations, charitable contributions, speeches, issue advertising, and seminars. These activities are done for the company, as whole. Annual reports and speeches of top level management are been published periodically.

Corporate image - The Image of an organization is a crucial point in marketing. If the reputation of a company is bad, consumers are less willing to buy a product from this company as they would have been, if the company had a good image. CG has developed a very good corporate image. Customers look up to the company and its products for quality, durability and reliability. It enjoys the image of a pioneer in motor manufacturing for transformer and fans etc.

20

Competitors

In a hot country like India fans are a relief. Over the years it has come from being hand held banana leaves to remote controlled multicolor designer fans fitted with exotic lights. The technology involved in the ceiling fans as compared to other electrical appliances is low. This has led to wide proliferation of the industry by many small scale manufactures. Industry faced overall decline in sales and also experienced defaults in last two years because of recession effects. Some facts of industry are as follows: Very low product differentiation between competing brands. No major international company has entered into this sector even after liberalization. Rural market constitutes major parts of sales. Fakes and Trademark violations are rampant. Second hand market is very big. Unorganized sector is also influential.

The competition from small scale manufacturers was worrying the big players. Since VAT has been introduced, the impact of small players is reduced. The major competitors of CG are:

1. 2. 3. 4. 5.

ORIENT PSPO USHA HAVELLS BAJAJ KHAITAN

Market positioning

Fan being a product of necessity, the industry is full of homogenous products. So when it comes to product differentiation CG is known for its quality and durability. CG being one of the oldest brand in this industry and is well known in the older generation. But CG failed to position its product in minds of young generation. Lack of communication and promotional activities has resulted in this situation.

21

Market share

Market share is the percentage of a market (defined in terms of either units or revenue) accounted for by a specific entity. Market share is a key indicator of market competitivenessthat is, how well a firm is doing against its competitors. The market share of CG in comparison with its competitors is as follow:

Market Share
10% 7% 7% Bajaj Havells 15% 17% Khaitan Others 19% 25% Crompton Greaves Orient PSPO Usha

22

Orient PSPO: Orient Fans has also seen much recognition in the past. For instance, PSPO technology, developed for fans in the 90s, provides more cool air to every corner of a room. Today, this patented path breaking technology has raised the bar in the industry and continues to be a milestone achievement in the industry. Latest TV advertisement of orient PSPO was done in 2011. It was a series of advertisement starring M.S.Dhoni with the jingle Kone kone main hawaa de Orient PSPO. Advertisement highlighted the problems like energy consumption, noisy working, poor looks that are faced by the users of other brands & its solution was Orient PSPO.

Usha: Company started manufacturing fans in 1948. Latest TV advertisement was made in 2009 emphasizing on energy saving feature of Usha fans. High sales promotion campaigns organized.

Havells: Havells has made a lot of innovations in case of fans. Some of them are as follows: Wooden blades made of high quality Fans operated by remote control Fans with low voltage Powerful motors with silent operators Adjustable spot lights

Bajaj: Bajaj is also one of the oldest company in this industry, some of its innovations are: Kids special Disney fans Ceiling fans with remote control and a new innovation speed regulation with light dimmer One year warranty The only company with six blade fans.
23

Market Research QUESTIONNAIRE

Name: Age: Occupation: Gender: Male [ ] Female [ ]

1) Who takes decisions about the electrical appliances to be purchased in your house? [ ] Self [ ] Spouse [ ] Children [ ] Parents. 2) At present how many ceiling fans are there at your house? [ ]12 [ ]34 [ ]56 [ ] More than 7 3) For how many hours a day, on an average do you keep your ceiling fan switched on? [ ] 1 6 Hrs [ ] 7 12 Hrs [ ] 13 18 Hrs [ ] 19 24 Hrs 4) How often do you buy a ceiling fan? [ ] 1 5 Yrs [ ] 6 10 Yrs [ ] 11 15 Yrs [ ] More than 15 Yrs 5) How much would you like to spend on a ceiling fan? [ ] Rs. 750 Rs. 1250 [ ] Rs. 1251 Rs. 2500 [ ] Rs. 2501 Rs. 4000 [ ] More than Rs. 4000.

24

6) When you hear about ceiling fans, which brand comes to your mind? ______________________________________________________________________ 7) Which factors would you take into consideration while buying a ceiling fan? [ ] Features [ ] Energy efficiency [ ] Price [ ] Brand name [ ] Recommendation of electrician 8) Which of the following brands have you used before and are using currently? Used before Bajaj Orient PSPO Crompton Greaves Havells Usha Any others (pls. specify) _______________________________ Using currently

9) Have you ever heard about Crompton Greaves Fans? [ ] Yes [ ] No 10) From which of these sources did you get information about Crompton Greaves Fans? [ ] Television [ ] Newspaper [ ] Hoardings [ ] Word of Mouth [ ] Internet [ ] Others. Pls. Specify __________________________________________________ 11) How would you rate the availability of Crompton Greaves Fans? [ ] Very convenient [ ] Convenient [ ] Satisfactory [ ] Inconvenient [ ] No Idea

25

12) Rate Crompton Greaves Fans Models Colour Quality Discounts After Sales Services No Idea Excellent [ ] [ ] [ ] [ ] [ ] [ ] Good [ ] [ ] [ ] [ ] [ ] Average [ ] [ ] [ ] [ ] [ ] Poor [ [ [ [ [ ] ] ] ] ]

13) Would you like to change the brand of the ceiling fan being used currently? [ ] Yes [ ] No If yes, specify _________________________________________________________

This questionnaire was surveyed to 50 consumers of ceiling fans falling into different age groups. The statistics of the survey have been calculated and its analysis is as follows.

26

Usage of Ceiling Fans (In Hrs)

4% 18% 18% 1 - 6 Hrs 7 - 12 Hrs 13 - 18 Hrs 19 - 24 Hrs

60%

Analysis: 60% of the consumers of ceiling fans have usage of fans about 13-18 hrs / day.

How often Do People Buy Fans (In Yrs)

2% 10%

1 - 5 Yrs 6 - 10 Yrs 36% 52% 11 - 15 Yrs More than 15 Yrs

Analysis: more than 50% people buy fans between 6 to 10 years.

27

Money Spent on the Ceiling Fans

10% 14%

Rs. 750 - Rs. 1250 22% Rs. 1251 - Rs. 2500 Rs.2501 - Rs. 4000 More Than Rs. 4000 54%

Analysis: 54% of the customers are ready to spend in the range of ` 1251 ` 2500.

Brand Awareness
4% 12% 30% Crompton Greaves Bajaj Orient PSPO 26% Usha Havells 28%

Analysis: the competition being on its peak, CG, Bajaj and Orient PSPO are the most preferred brands.

28

Factors Taken into Consideration

11% 20% Features Energy Efficiency 29% 14% Price Brand Recommendation

26%

Analysis: The pie-chart indicates that the customers give more importance to Brand and Price while buying.

Brands Used Before Vs Brands Currently used

Used Before Using Currently

25

27 23 19 15 12 9 5 0 1 Usha 2 12

Bajaj

Orient PSPO

CG

Havells

Others

Analysis: The graph indicates that customers have shifted from other brands to CG in recent years, and Havells has emerged as one of the major competitors to this industry.
29

Sources of Information
13% 6% 11% 4% Television Newspaper 17% Hoardings Word of Mouth Internet Others 49%

Analysis: It is believed in the advertising world that ultimately CG sells on its own merit thus underlining the significant role of word-of- mouth.

Availability

24%

28%

Very Convenient Convenient

0% 8%

Satisfactory Inconvenient No Idea

40%

30

Ratings of CG Fans
50 45 40 35 30 25 20 15 10 5 0 Models Colour Excellent Good Quality Average Discount Poor After Sales No Idea

Analysis: the graph shows that CG fans are well known for it quality and models.

RECOMMENDATIONS

1) CG has to come up with new attractive tv commercials to get more known amongst the youth. 2) CG has to bring about more sales promotion campaigns to sustain its brand image in this competitive market. 3) CG should provide more discounts and after sales service in order to retain its market share.

31