Professional Documents
Culture Documents
submitted by:
student of:
IMT - Ghaziabad
to the:
Marketing Department,
June, 2010
CERTIFICATE OF APPROVAL
2 Market Entry strategy and plan for Bus Air Conditioner Market
Summer Project Report Examination Committee for evaluation of Summer Project Report
Name Signature
____________________ _________________
CERTIFICATE
This is to certify that Mr. Sachin Gupta, 09FT-128, a student of the Post-Graduate
Diploma in Management-Full Time, IMT Ghaziabad, has worked under our guidance and
supervision. This Summer Project Report has the requisite standard and to the best of our
knowledge no part of it has been reproduced from any other summer project, monograph,
report or book.
The euphoria and satisfaction that is associated with the successful completion of this
project would not have been there, had it not been without the kind and helpful assistance by
my guide Mr.Pankaj Mehra, Assistant General Manager - NBD, AM & Communication,
Subros Limited, Noida.
I would like to heartily thank them for giving me the wonderful opportunity on working on a
business critical and challenging project. The entire duration of two months of working on the
project has been an enlightening experience. I would also like to extend my gratitude to Mr.
Karan Bains and Mr. Yogesh Singh who has been a constant source of help and guidance,
and all the team members at Marketing and TIE for the support extended.
I would also like to thank my faculty guide Dr. Rakesh Chopra for sparing time to help me
during the difficult phases of my project and providing his valuable insights on how I could
tackle them. His valuable suggestions helped me in channelling my effort in the right
direction and take a right approach in initializing and completing the project.
Table of Contents
2 Introduction.................................................................................................................... 9
2.3 Deliverables.......................................................................................................... 10
5.2.3 Conclusion..................................................................................................... 52
Appendix 1: Company viz sales figure for passenger vehicle in India ................................. 79
Appendix 3: Company viz production figure of Buses having GVW < 5 tons ....................... 83
Appendix 5: Calculation for total number of annual tourist bus trips required ...................... 87
Appendix 6: Technical Details for available AC Product Range for Small Buses................. 89
Appendix 7: Technical Details for available AC Product Range for Medium Buses ............. 91
Appendix 8: Technical Details for available AC Product Range for Large Buses................. 92
Appendix 12: Principal Component Analysis for expected after sales service ................... 103
Appendix 13: Principal Component Analysis for perceived after sales service .................. 113
List of Tables
Table 3-4: Models available for buses with GVW < 5T ........................................................ 16
Table 3-5: Models available for buses with GVW < 7.5T ..................................................... 17
Table 3-6: Models available for buses with GVW < 12T ...................................................... 19
Table 3-7: Models available for buses with GVW > 12T ...................................................... 20
Table 3-8: Various types of buses registered in major metro cities in India ......................... 21
Table 3-11: Popular available options for school bus application ........................................ 31
Table 5-3: Gross Output (in lakhs) of coach work factory .................................................... 47
Table 5-8: Principal Component Analysis Factors for expected after sales service ............. 57
Table 5-9: Factor Score for expected after sales service component .................................. 57
Table 5-10: Principal Component Analysis Factors for perceived after sales service .......... 59
Table 5-11: Factor score for perceived value of after sales service..................................... 59
Chart 4-1: Weighted market capitalisation for Air-Conditioner & Refrigerator Industry 40
Executive Summary
Introduction
Subros Limited to achieve a figure of annual revenue of 2500 crores from current figure of
1000 crores has decided to look into other business opportunities like railways, buses,
refrigerated trucks, tractors, containers and truck cabins. At present bus air-conditioning
penetration level is only 4-6% and market experts expects it to grow at a rate of 35% in
coming years.
Hence this project was initiated by company to do a feasibility study for entering into the bus
air-conditioner market.
Approach
This study will analyze different market growth drivers to provide an estimate for bus air
conditioner growth rate and market size in coming years. Also the regional trends would be
analyzed to find the lucrativeness of different regions across the geography of country. The
projection will include demand from institution, tourist operators, private operators and state
transport undertakings (STUs).
This study will also propose a market entry strategy for this market. For this first of all in
order to identify order qualifiers and order winners, an analysis of customer buying behaviour
would be done
At third step market competitive forces would be analyzed to formulate a market positioning
strategy and plan for the company.
Limitations
Opportunities
Due to the strong support from government and rise in per capita income because of strong
economic growth rate demand of deluxe buses is growing at a very high rate. To meet the
rise in demand all the major original equipment manufacturers have initiated number of
projects to increase installed capacity. Also because of new government policies with
regards to health care and school buses demand for buses from them has also increased
manifold. In 2009 in total 103083 buses were sold in India.
Also because of tourism ministry efforts to increase tourist traffic, will gives a boost to
demand for luxury buses.
For this a market survey was done. On statistical analysis of obtained data after sales
service and cooling efficiency were identified as order qualifiers. A second level survey was
conducted to understand the customer expectations for after sales service.
Using SPSS on the data obtained from second market survey, two major factors were
identified – Responsiveness and Effectiveness. Market was segmented on this two
parameters To formulate a market targeting strategy statistical analysis was done on
customers perceived value. The results obtained have shown that for most of the customers
there is no major difference between expected and perceived value of service. So we cannot
enter the market only with strong after sales service proposition. To tap this market we have
to look into second order qualifier i.e. cooling efficiency. For this further study can be
undertaken to compare competitors market offering technical details.
After doing competitive force analysis it was found that there are few suppliers which are
particularly strong in Northern India. Further study can be done to analyze other regions also
so as to formulate a national level strategy.
Conclusion
Future Scope
Y/E March (Rs cr) Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06
Sales (Rs) 787.63 774.21 755.26 657.21
DPS (Rs) 0.5 0.8 4 3.5
EPS (Rs) 2.19 4.76 23.69 20.72
Operating Margin (%) 9.09 12.58 11.7 11.23
Gross Profit Margin (%) 4.55 7.67 7.45 6.93
Net Profit Margin (%) 1.92 4.31 4.38 4.28
Debt/Equity 0.73 0.63 0.83 0.63
Long Term debt/Equity 0.37 0.25 0.36 0.27
Current Ratio 1.51 2.01 2.23 2.04
Quick Ratio 0.79 0.77 0.85 0.79
Inventory Turnover Ratio 10.04 9.09 8.23 8.26
Source: http://money.rediff.com/companies/subros-ltd/10630002/results-annual
http://www.moneycontrol.com/financials/subros/profit-loss/S07
Their is a sharp decrease in EPS for the year 2008 which can be attributed to the share split
of 1:5. Company has very strong financial health. Debt/Equity ratio for company is quite low.
As cost of debt is low in comparison to cost of equity so company can borrow more to finace
its expansion plan. But looking into earning per share, it has drastically reduced from 4.76 in
2008 to 2.19 in 2009 though operating income has increased from 774.21 to 787.63. It can
be attributed to increase in cost of good sold and increased interest payout.
Subros interest coverage ratio has decline from 6.01 in 2007 to 2.15 in Mar 2009. Also
company’s current assets are highest at Rs 175.49 crores in 2009 in compare to Rs 145.58
crores in Mar 2008. Company’s PBDITA also stoods low at Rs 70.28 crores in Mar 2009 as
compare to Rs 87.94 crores in Mar 2008. So we may say that the comapny is facing a
financial problem. And company PE ratio has also dropped to 6.59 in Mar 2009 from 10.19 in
Mar 2007. So company has somewhat looses its investors confidence.
Company management has set a goal for coming 5 years and named it ‘1525’. The goal is to
achieve an annual sales figure of 2500 crores from present 1000 crores by 2015.
The companyhas classified its businesses into two strategic business units on the product
basis:
Automobile air conditioner consist of compressor, condenser, evaporator, cooling fan, blower
and heater unit.
HVAC is an acronym that stands for the closely related functions of "Heating, Ventilating,
and Air Conditioning" - the technology of indoor or automotive environmental comfort. It is
particularly important in the design of medium to large industrial and office buildings such
as skyscrapers and in marine environments such as aquariums, where safe and healthy
building conditions are regulated with temperature and humidity, as well as "fresh air" from
outdoors.
Market Penetration Strategy: To gain more market share with its current products in
their current markets (Maruti, Tata etc), company has started improving its vendor rating.
By this they are able to get a large portion of available pie by delivering high quality
product at desired cost. Company has also expanded its installed capacity to 0.75 million
and is planning to increase it further to 1 million units per annum. Alos company has set
up two new plants i.e. at Manesar and Pune.
Market Development Strategy: Company has started exploring new OEMs (like M&M,
Reva) for its existing product line.
Diversification Strategy: Company has started exploring new avenues for further
growth like railways, refrigerated trucks, tractors and buses. It has started manufacturing
air conditione units for tractors and mini buses.
Subros is a largest and only integrated manufacturing unit in India for Auto Air Conditioning.
The company has the capability to manufacture compressors, condensers, heat exchangers
and al the connecting elements that are require to complete the AC loop.
To improve its current business company is planning to enter into below listed air conditioner
market.
Truck Cabins
Railways
Tractor
Refrigerated Trucks
The India bus industry forms an important part of the automobile industry in the country.
Over the last few years, the bus industry has grown to a great extent and new types of buses
with better facilities have come up. Due to the development of infrastructure and more roads,
more and more people from the rural areas are also nowadays availing of the bus services.
With the recent innovations, more buses are being introduced into the market. These buses
are spacious and comfortable. They are also eco friendly and the mileage is also pretty
good. Nowadays, new types of buses are being introduced which are equipped with
advanced facilities and services such as air-conditioners, passenger information system, air
suspension system, high quality engines and transmission systems and so on. With more
such buses being introduced, the customer base is also expected to rise pretty well over the
few years.
Considering the growing middle and upper class, rise in per capita income, strong GDP
growth rate of the country; we can say that there is a very huge market for air conditioned
buses and hence bus air conditioners. But there is no reliable database or a previous study
on air conditioned buses and their emerging trends.
To do a feasibility study for entry into air conditioned bus market and prepare a report for
the same.
To prepare a market entry strategy and plan for the air conditioned bus market.
To attain the aforesaid, the deliverable is the bus segment to enter into and the market
positioning strategy for the same.
Looking into geography of India, we can say that air condition bus is still a niche segment.
As no data is readily available for the same, CMIE and Indiastat database will be use to
study the demand drivers for various segments of bus market. Also various magazine
sources like Commercial Vehicle, Auto Monitor, Motor India and other will be followed to
study the market forecasts.
For further analysis, two level of study will be carried out. During first stage interviews and
field survey will be conducted with different stakeholders like Bus operators, Institutional
buyers, Bus bodybuilders and competitors’ sales agent. By this we will try to identify various
parameters which play a role of order qualifiers and order winners while making a purchase
decision for a bus AC.
In second stage on the basis on the basis of results obtained for order qualifier in first stage,
questionnaire will be designed. After analysing the result, criteria for market segmentation
will be identified and accordingly market targeting and positioning strategy would be
formulated.
2.6 Limitations
Field Survey is conducted only in Delhi NCR region. Regional pattern may exist across the
geography of India.
CRISIL in its annual report 2009-10 has estimated that the domestic passenger vehicle
segment will grow at a CAGR of 7-8 %. Growing population and urbanisation are driving up
demand for the bus segment. At the same time, higher usage of personal modes of transport
is leading to a lower preference for public transport. The LCV bus segment is expected to
grow at a CAGR of 8-9 %, whereas the MHCV bus segment is expected to increase at a
CAGR of 6-7% in next 5 years.
The Jawaharlal Nehru Urban Mission (JNNURM) scheme was introduced by the government
in December 2005 for 7 years. It is a prominent centrally sponsored scheme with sector
specific focus on urban infrastructure. Improving the urban infrastructure is one of the
important focus of the scheme. Under this scheme states will be provided financial
assistance for procuring urban buses for their respective state transportation. In union
budget 2009-10 government has increased the outlay under this scheme by 87%. LCVs are
primarily demanded by schools and corporate sectors like IT/ITes.
The below drawn pie graph shows the overall bus market share for 2008-09.
CMIE in its annual forecast report for commercial vehicles has projected North India to be
the key market for trucks and buses.
1. Route
a. Intra-City
b. Inter-City
2. User
a. Public
b. Corporate
3. Ownership
a. State Transport Undertakings (STUs)
b. Private Operators
4. Vehicle
a. Light Commercial Vehicles (LCVs)
b. Medium & Heavy Commercial Vehicles (MHCVs)
There is a high degree of overlap among the above four segments. Each individual segment
would account for the entire population of buses at any given point of time.
This segment includes buses which ply on intra-city and inter-city routes across the country.
Demand drivers for this classification of buses are:
Inter-City Intra-City
Improving road infrastructure Urban Congestion
Propensity to travel Improving road infrastructure
Better quality buses Safer Travel
Economical over short distances
Low cost of setting up infrastructure
Growth in urban population and increasing
working age population
This segment includes demand of buses from public and corporate, including demand from
niche segment such as BPO industry, school buses and executives. Demand drivers for this
classification of buses are:
Public Corporate
Economical mode of transport Fast growing BPO industry (on city
outskirts)
Better connectivity and flexibility Demand from schools and executive travels
Urban congestion Better connectivity and flexible timings
Improving road infrastructure Growth in urban population and increasing
working age population
Demand from SEZs, EPZs etc.
This segment includes demand for buses from the state transport undertakings (STUs) and
private operators. Demand drivers for this classification of buses are:
STUs Private
Growth in urban population and increasing Demand from corporate
working age population
Fleet replenishment Comfortable travelling
Social obligation Customised Service
Low vehicle maintenance cost Better connectivity and flexible timings
This segment includes LCV and MHCV buses. The following are the demand drivers for
these two sub categories:
LCV MHCV
Fast growing BPO industry Export Demand
Demand from schools and executive sales. Inter-City travel
Better cost economics
The below listed table give a brief of total number of buses produced by various OEM’s. The
percent share of buses with GVW < 5 tons is highest i.e. 44% followed by 28% for 12-16.2
tons.
So from this data we can say that though % share of buses with GVW < 5 tons is highest but
maximum proportion of it is of buses with GVW < 5 tons and seats < 13 seats. Also even
though the % share of these buses are decreasing over the years but that of buses having
seats more than 13 seats is increasing continuously from 12% to 27% of total these segment
bus sales.
Year <= 5T and > 13 Seats 5-7.5 T 7.5-12 T 12-16.2 T >16.2T Total
So from above table we can say that bus segment with GVW in between 12 – 16.2 tons is
largest with 42 % followed by 5-7.5 tons. Also bus segment with GVW between 5 – 7.5 tons
and seat capacity more than 13 is growing continuously over the years.
Market experts estimate that the LCV segment will increase at an annual growth rate of 16%
and M&HCV by 12%.
This category forms the 38.5 % of the total LCV sales (buses with GVW < 7.5 tons). The
leading company in this segment is Tata Motors with a share of 15.1% followed by Force
Motors with a share of 14.9% of the total segment sales. Tata Motors is continuously
increasing its share from 7.9% in 2006 to15.1% in 2009. The below listed table shows the
various available models available from various OEMs in this segment:
Company Name 6 - 16 Seaters Length (in mm) Wheel Base (in mm)
Traveller Smooth 5885 3700
Traveller Mini Bus 4755/ 5235 3050/3350
Citiline 16 + D 3420
Force Motors
Citiline School Bus (16 + D) 3420
Traveller Ambulance 5235 3350
Traveller Luxury 5415 3350
RTV Ranger
Hindustan Motors RTV School Bus
RTV Custom Bus
Mahindra Mahindra FJ Minibus
Magic 3790 2100
Winger Standard 4520 2800
Starbus 16 5125 2750
Tata Motor
Winger DLX Non AC 4920 3200
Winger DLX AC 4920 3200
Winger Luxury 4920 3200
Source: Company websites
This category forms the 61.4 % of the total LCV sales (buses with GVW < 7.5 tons). The
leading company in this segment is Tata Motors with a share of 40.1% followed by Mahindra
with a share of 7.26% of the total segment sales. This segment caters to the fast growing
BPO industry, Executive staff and School Bus. The below listed table shows the various
available models available from various OEMs in this segment:
Table 3-5: Models available for buses with GVW < 7.5T
Company Name 17 - 35 Seaters Length (in mm) Wheel Base (in mm)
This category forms the 22.4 % of the total MHCV sales (buses with GVW > 7.5 tons). The
leading company in this segment is Tata Motors with a share of 11.7% followed by Swaraj
Mazda with a share of 4.04% of the total segment sales. This segment caters to the needs of
Corporate, Intra-city bus and School Bus. The below listed table shows the various available
models available from various OEMs in this segment:
Table 3-6: Models available for buses with GVW < 12T
Company Name 36 - 52 Seaters Length (in mm) Wheel Base (in mm)
Globus 20 8620 4200
Tata Motor
Starbus DLX 35 8620 4200
Eicher Starline 10.90K 8677 4800
Eicher Skyline 10.90 8677 4800
Eicher Skyline Executive Bus 10.90K 8677 4800
Eicher Motors Eicher Starline Standard 10.90H 8677 4800
Eicher Cruiser CNG School Bus 8677 4800
Eicher 11.10H Bus Chasis 8080 4300
Eicher 10.90K Bus Chasis 8677 4800
Ashok Leyland Lynx BS II 7486 / 7966 3900/4200
Swaraj Mazda ZT54E-D-EL WB NG Bus 8660 4760
Source: Company websites
This category forms the 77.5 % of the total MHCV sales (buses with GVW > 7.5 tons). The
leading company in this segment is Tata Motors with a share of 37.88% followed by Ashok
Leyland with a share of 37.36% of the total segment sales. This segment mostly caters to
the needs of private operators and STUs for Inter-city travel. The below listed table shows
the various available models available from various OEMs in this segment:
Table 3-7: Models available for buses with GVW > 12T
Company Name 52 - 64 Seaters Length (in mm) Wheel Base (in mm)
Globus 45 11950 6200
Starbus 54 10384 5334
Starbus 67 11950 6200
Tata Motor
Starbus LF 11255 5875
Starbus ULF CNG 11980 6200
Starbus Skool 52 9645 5195
Eicher 20.15 Bus Chasis 20.15M 10044 5340
Eicher Motors Eicher 20.15 Bus Chasis 20.15N 11444 5840
Eicher 11.10K Bus Chasis 9475 4650
12 M Bus 12000 6200
222 CNG Bus
Airport Tarmac Coach 11000 5200
Cheetah BS I & II 9575 / 9857 5156 / 5334
Double Decker 8890 5080
Panther Luxury 11070 5568
Viking BS I & II 10816/10325 5639/5334
Viking BS - II 10816/10325 5639/5334
Ashok Leyland Viking BS - III 10816/10325 5639/5334
Viking SLF BS - III 10960 5639
Viking CNG BS - III 10816/10325 5639/5334
12 M Bus - BS II 11800 6200
Cheetah BS – II 9575/9857 5156/5334
Cheetah BS – III 9575 5156
Panther BS – II 11070 5568
As on 2006 data available from IndiaStat for the various type of bus registration in India’s
major cities is given in below listed table.
Table 3-8: Various types of buses registered in major metro cities in India
The below listed table list the various types of bus registration in Delhi as on 1st Jan 2009.
As per the central institute of road transport, buses play a dominant role in the passenger
transportation among the different modes of transport available in roadways. The value is
estimated to be about 41% of total roadways distribution. In India only 0.75 buses are
available for every 1000 people in India whereas in Brazil 1.5 buses are being estimated.
The growing demand is not only from cities but is also from other section of Indian economy.
Indian government efforts to promote tourism have also given a major boost to luxury buses
This buses are use to travel within a city/ state. Mostly they have a seating capacity varying
17-45. They are in great demand from institutional players, corporate, BPOs and STUs. So
for our further analysis we may classify them into public and private sector on the basis of
their possession type.
The ever expanding boundaries of our cities because of increase in population have also
increased the demand for intra-city bus service. As per the report available from transport
ministry the average distance travel by a daily passenger is estimated at 60-80 kms per day.
Considering Delhi, emergence of Greater Noida, Manesar, Sonepat as a satellite town will
lead to an increase in demand for public bus service to these places. For eg for a route
length of 30 kms between Bhajan Pura (Delhi) and Noida (Uttar Pradesh), DTC is plying in
total 50 buses of which 15 are public and 35 private buses. For a route length of 34 kms
between Mehrauli (Delhi and Noida (Uttar Pradesh), they are plying in total 59 buses of
which 20 are public and 39 are private buses.
In this demand from corporate, executives, BPOs, IT/ITes plays a major role. The
emergence of SEZ/ EPZ/ Software parks on the outskirts of cities has provided a major
boost to demand for intra city bus service. As per the information available from
www.sezindia.com, there are 580 formally approved SEZs of which 353 have been notified.
The below drawn chart give an overview of the regional distribution for the same.
Source: http://sezindia.nic.in/writereaddata/pdf/StatewiseDistribution-SEZ.pdf
NASSCOM has reported that the demand for IT professionals is expected to reach 430000
by 2011-12 with the corresponding figures on indirect employment being 1,72,0000. Keeping
in line with the expansion/entry plans of major IT/ITES companies, IT parks and townships
are being built. As most of this software and IT parks are generally on the peripherals of the
cities, so this will provide a demand stimulus for the air conditioned buses.
These buses are used to travel between states or cities. Mostly they have a seating capacity
varying 40-64. They are available in different variants like Economy, Deluxe, Semi Deluxe,
A/C Deluxe and Sleeper. Market experts expect a strong growth rate in this application.
Tourist Bus Service: Between 2000 and 2009, foreign tourist arrival in India has increased
by 48% from about 26 lakhs in 2000 to 51 lakhs in 2009. As per the annual report from
ministry of tourism, air continued to be the predominant travel for the tourists coming to
India. Arrival by sea is negligible and share of arrivals through land routes comprises tourist
mainly from Bangladesh and Pakistan. The percentage of tourist arrival by land route is
estimated to about 3.7%.
For domestic tourism with in India growth rate from 2000 to 2008 is estimated to about
156%. As per the latest figures available from ministry of tourism for 2008, domestic tourism
is estimated at 562.92 millions. About 39.4% of domestic tourists use bus as a preferred
mode of transportation. Average number of trips per household in the country was 1.17. Top
five states ranked according to trips per 1000 tourist households are Himachal Pradesh,
Karnataka, Punjab, Madhya Pradesh and Maharashtra.
According to the information available from ministry of tourism for distribution of tourism
according to mode of transportation 39.4% of domestic tourists and 3.7% of international
tourists use bus as preferred mode of transportation. On analysing the available data for
number of tourists arrived, we can say that nearly 55497292 annual bus trips are required.
For detailed calculation refer appendix.
As on 31st Dec 2003, 186 travel agents, 340 tour operators, 154 tourist transport operators
and 13 adventure tour operators are registered with ministry of tourism.
Government sponsored JNNURM scheme has given a major boost to demand from various
state governments. Improving road infrastructure and booming economy has increased the
demand for road transportation. Apart from this Supreme Court verdict to government to
strengthen up their fleet size so as to meet the increased demand has also work as a stimuli
for the demand. Currently as far as interstate bus service is concerned, public sector is the
leading player.
The above drawn graph shows the public sector buses in various major states of India.
Under JNURM scheme various state governments have ordered a total of 11185 buses.
Such orders include AC & non AC, low floor buses, semi low floor buses and mini buses.
Global standards talk about medical standards which would demand basic life support
systems for patient within 15-20 minutes of an accident. India witnesses three lakhs
emergencies daily. According to experts to meet the set standards of 2 ambulances per
50km the country would require132000 ambulances.
Source: NCRE
Vehicles Classification: The below table highlights ambulance vehicle classification based
on application.
1 Patient Transport Ambulance, (PTS) Stretcher, single long seat, non A/C, oxygen cylinder (optional),
saline hook (optional), scoop stretcher for highway application
(optional).
2 Basic Life Support System, (BLS) All PTS optional features are compulsory. Wash basin, medical
rack, doctor seat, A/C (optional), Defibrillator (optional), Suction
apparatus (optional)
3 Advance Life Support System All BLS optional features are compulsory. Monitor
(ALSS) (compulsory), ventilator, head immobiliser, individual seats,
high intensity focus lights, ECG and other specific requirements
of the customer
4 Crash Ambulance (CA) 4-12 stretchers with hydraulic lifts used in airport/ factories/
military accident recovery zone.
LCV (<7.5T) Force Travelller, Tata Winger, Maruti, Not viable Body built on Tata, Ashok
Mahindra, AL Stag, Mahindra Tourister, Leyland and Mahindra
Eicher 10.50, Swaraj Mazda Tourister chasis
LCV (>7.5T -12T) Not viable Not viable Body built on Tata 1109 and Eicher 10.75 chasis
MCV (>12 – 16.2T) Not viable Not viable Body built on Ashok Leyland chasis
HCV (>16.2T) Not viable Not viable Not presently available in India. Mercedes has a model in
other countries for airport/ military/ factories accident
recovery zone.
Application Split: The emergency vehicles (BLS & ALSS) have the major share of more
than 60% due to emerging private profit and non-profit emergency service organizations.
Source: Race
Vehicle platform: Force motor has 70% of ambulance market in India followed by Tata
motors at 19%.
EMRI has planned to have 11000 vehicles by end of 2011 for India’s 1.1 billion populations.
Today an ambulance is also positioned as a mode of increasing brand equity for the
hospitals.
Globally, school buses remain the safest form of surface transportation, far safer than cars,
truck, public transport buses, or trains. School buses are designed and manufactured
specifically for the safety and protection of the vulnerable passengers. However in today's
scenario a school bus is more than often looked as a commercial product, without regard for
safety, comfort, hygiene and reliability. The school bus market is expected to see an addition
of 10,000-12,000 buses in 2009-10. Over a five year (2010-15) horizon, market experts
expect a growth rate of 25 percent.
Vehicle Classification: In India, school buses are basically classified based on key
parameters like overall length, number of seats, power and comfort. The below table
illustrates the school bus market:
Note: LLCB -Lowest Light commercial bus, NDX: Non Deluxe Bus – bus designed for basic comfort levels
LCB – Light commercial bus SDX: Semi Deluxe Bus – bus designed for a slightly higher
MCB - Medium commercial Bus, comfort level and with provision for ergonomically designed
HCB - Heavy commercial Bus seats.
DLX: Deluxe Bus – bus designed for a high comfort level and
individual seats and adjustable for seat back, improved
ventilation and pleasing interiors.
ACX: A. C. Deluxe Bus – Deluxe Bus which is air conditioned
Current Scenario: India already has 5 lacs schools and colleges across India and the
school bus penetration level is estimated to be just 20%. Add to this, the growing number of
private schools and colleges being added every year and the potential for the school bus
segment is huge. This segment has been growing at a CAGR of 10-15% from the recent
past.
Demand Review: The Indian school bus market is estimated to be worth some 10000 –
15000 units each year on total bus sales of some 60000 units. According to industry experts
of the 3 lacs school in India, only third of them use schoool buses. Since children need to be
picked up from multiple points on school route, so they predominantly demand ‘functional’
15-40 seaters (5-9 tonnes) mini buses. According to the experts, the size of 7 -11 m school
bus is only about 4000 units.
The below listed table gives an overview of the various available options in this segment.
Table 3-11: Popular available options for school bus application
The extent of fully built school bus is 80-90%. Their is a huge demand for more compact
school buses. Take Force Motors Traveller for instance.
The surrogate variables taken to estimate the growth rate for luxury bus segment are:
Increasing Urbanization
Government Support
Improving Road Infrastructure
Special Economic Zones
Increasing Urbanization: The people in rural areas have started migrating to urban areas
due to which there is urban congestion and also the cities are expanding leading to which
there is a need for intra-city, special application buses like institutions etc and thereby
creating an attraction towards mass transport which is also economical. The below listed
graph show the projection for the population lives in urban.
Indian economy is witnessing a strong year on year GDP growth rate. It has lead to an
increase both in per capita income and consumption.
Improving Road Infrastructure: As per the latest information available from the ministry of
transport and surface, length of national highway has been increased by about 33% i.e. from
49585 kms in 2000 to 65590 kms in 2008. It will be further increased because of government
sponsored schemes like golden quadrilateral, North – South and East - West corridor and
many more. All these initiatives will enhance the passengers to travel long distance through
roadways.
Special Economic Zone: As per the information available from ministry of commerce and
industry, there are nearly 568 formally approved and about 291 notified SEZ’s as on 31st Mar
2009 in India. This is going to increase the demand for buses in India from corporate sector
movement.
The luxury bus segment in India is expected to be around 25,000 to 30,000 units per annum.
Customers in this segment mostly buy chasis from the manufacturer and build the bus
bodies at an independent body building unit. The topless luxury segment is estimated to be
around 500-600 units per annum.
The leading Indian commercial vehicle manufacturers have line up a capacity expansion
programmes for the upcoming years
To tap this market international leading players have formulated their market entry strategy.
Volvo which soon expects a whooping sales figure of around 1000 buses in India have
shown there keen interest to bring in their articulated buses into India. The population of
Volvo in India is expected to exceed 2000 units by Jan 2010. Volvo India is partner with nine
major cities including Bangalore, Chennai, Pune, Hyderabad, Mumbai and
Thiruvananthapuram, for supply of modern buses for city and inter-city transport system.
Recently Volvo has made its foray into North India with a committed supply of 15 buses for
Faridabad inter-city bus service. Kolkata too will get 60 Volvo buses and; Gujarat and
Karnataka are going to introduce there sleeper coaches in their respective inter-city bus
service.
Turkish bus maker Temsa has also reinforced its commitment to India. So far as India is
concerned, Temsa is to locally manufacture its Safari RD integral coach, most likely in
collaboration with auto component major, JBM group.
Irizar-TVS, a joint venture company of Ashok Leyland, T V Sundram Iyengar & Sons Ltd,
and Irizar S Coop of Spain, has opened its new state of art facility at Viralimalai near Trichy.
The new facility has a capacity to produce 180 buses per month. With this Irizar-TVS has
expanded its capacity from 1200 to 2200 buses per annum. They have the capacity and
expertise to build the complete range of buses, starting from top end luxury coach to low
floor and semi low floor city buses. Ashok Leyland has targeted sale of 18000 to 20000
buses during 2010-11, of which 50-60 percent will be fully built buses. In the next 3 to 4
years percentage of fully built buses could increase it to 90%. Irizar-TVS has also launched
iT09 luxury coach for inter city transportation.
Ashok Leyland had launched a luxury vehicle, Exuba, priced at Rs 3 millions. The vehicle is
aimed at the tourism industry and institutional buyers. It also targeted the film industry and
adventure seekers. The company had plans to produce only 400 Exubas annually at its
Hosur plant. Lately, the company is coming up with CNG-fuelled CVs.
Some of the ongoing bus projects are listed in table given below.
Project Cost
Company Name Project Name
(in Rs cr)
Ashok Leyland Ltd. City Buses Project N.A.
Caparo India Pvt. Ltd. Luxury Bus Manufacturing Facility Project 80
Electrotherm (India) Ltd. Hybrid Buses Project 100
Force Motors Ltd. Pithampur Buses Project 1845
Irizar T V S Ltd. Viralimalai New Assembly Line Project 30
Swaraj Mazda Ltd. Bus Manufacturing Project 260
Ural India Ltd. Haldia Eighty Seater Bus Manufacturing Project 150
Ashok Leyland Ltd. Alwar Bus Body Building Project 40
Automobile Corpn. Of Goa Ltd. Bus Bodies Expansion Project 17.87
Volvo India Bus Technologies Ltd. Hoskot Bus Body Project 80
Ahmedabad Municipal Corpn. Ahmadabad Brts Phase-I Project 500
Andhra Pradesh State Road Transport Bus Purchase Project 400
Bangalore Metropolitian Transport Corpn. Volvo Bus Project N.A.
Brihan Mumbai Electric Supply & Transport Fleet Expansion Project N.A.
Brihan Mumbai Electric Supply & Transport Mumbai Fleet Expansion Project 320
Delhi Transport Corpn. New Buses Acquisition Project 1800
Government Of Uttar Pradesh Agra Eco-Friendly City Bus Service 260
Government Of Uttar Pradesh Ghaziabad CNG Bus Service To Metro Stations 10
Gujarat State Road Transport Corpn. Fleet Expansion Project 153
Source: CMIE database
Companies can prepare as many as 90 different types of demand estimates. Demand can
be measured for six different product levels, five different space levels, and three different
time levels. Each demand measures specific purpose.
World
Space Level
India
Region
Territory
Customer
All Sales
Product Level
Industry Sales
Company Sales
Product line sales
Product Item
Sales
Short Run Medium Run Long Run
Time Level
The size of a market hinges on the number of buyers who might exist for a particular market
offer. But there are many productive ways to break down the market:
The potential market is the set of consumers who profess a sufficient level of interest in a
market offer. Potential consumers must have enough income and must have access too
the product offer.
The available market is the set of consumers who have interest, income and access to a
particular offer. The eligible adults constitute the qualified available market – the set of
consumers who have interest, income, access and qualification for the particular market
offer.
The target market is the part of qualified available market the company decides to
pursue. The company will end up selling to a certain number of buyers in its target
market.
The penetrated market is the set of consumers who are buying company’s product.
4.1.1 AC Sleeper
AC Sleeper buses provide dual comforts of an AC bus with sleeper berths. AC Sleeper
buses are today the most preferred bus type for long distance road travel. Operating mostly
as overnight buses on road routes across states, interstate AC sleeper bus services connect
major cities across various regions. AC Sleeper buses are specially designed for a
comfortable bus travel experience and like trains have berths instead of seats. Each
passenger is assigned a berth to sleep on during the journey. Most sleeper buses feature
4.1.2 AC Bus
AC bus services are offered by state road transport corporations as well as private bus
operators and bus travel companies. Air conditioned buses generated a wave of relief when
they were introduced into the passenger road transport industry over two decades ago. Prior
to that, passengers had to bear the extreme weather conditions prevalent in the regions that
they travelled across. Ever since the introduction of AC bus services, passengers enjoy a
pleasant bus ride to their preferred destination, unaffected by weather conditions outside the
AC bus. For a comfortable travel experience, AC buses are fitted with upholstered seats that
can be reclined. Windows have curtains to block out the sun while some AC buses also play
music or movies for entertainment of passengers. AC buses are available on all important
road routes, connecting all main cities to major tourist, commercial and religious
destinations. AC bus services are available from all major cities including Delhi, Mumbai,
Bangalore, Chennai, Hyderabad, Pune, Ahmedabad, Jaipur, Kolkata, Chandigarh, Shimla,
Agra, Dehradun and many more. Even smaller towns are connected by interstate AC buses.
For the most convenient booking experience, book your AC bus tickets online and enjoy a
hassle free experience.
4.1.4 Volvo AC
With the introduction of AC Volvo bus services on major important road travel routes, bus
travel in the country has come of age. The air conditioned Volvo buses are the most popular
mode of public transport amongst the metropolitan travellers. The super luxury AC Volvo
buses by Swedish auto company Volvo offer spacious reclining seats with adequate leg
room to stretch out besides additional comforts like window curtains and matted screens to
block out light. Features such as overhead reading lamps, powerful air conditioning with
individual controls and superior air suspension make the AC Volvo buses ideal for long
journeys where comfort is of utmost importance. Most new AC Volvo buses also offer
entertainment options like dual LCD screens for better viewing besides central audio system
for music. AC Volvo bus services are available on major intercity and interstate routes and
from all major cities including Delhi, Bangalore, Chennai, Mumbai, Hyderabad, Pune, Jaipur,
Ahmedabad and many more. While some state road transport corporations like that of
Rajasthan and Himachal Pradesh offer AC Volvo bus services, most other routes are
covered by private bus operators. The online booking system is the most convenient for
booking AC Volvo bus tickets as it allows you to choose from a range of bus travel operators
as well as choose your preferred seat.
The Golden Quadrilateral highway network and the introduction of fully built luxury buses by
large OEMs, as well as the entry of foreign bus manufacturers, has led to a quantum jump in
the quality of buses. More and more passengers are discovering the comforts of air
conditioned bus travel in city transport and in intercity travel, and passenger expectations are
rising. The increase in grants for the JNNURM scheme announced by the Indian
Government in the Budget will ensure that demand for bus air-conditioning compressors will
continue to remain strong going forward.
Bus air conditioner demand is directly related to overall expectation of air conditioning in
homes, offices, cars and shopping centres.
The above graph shows a strong growth rate in this sector over the last year.
Analyzing the above listed table we can say that there is a huge increase in demand for air-
conditioners and refrigerators.
4.3.1 Methodology
To validate the reasoning for increase in demand for AC Buses data for per capita GDP,
Industrial Refrigerator & Air conditioning production and cooling tower produced will be used.
Year Per capita GDPfc Refrigerators & air-conditioning production Cooling towers production
Unit Rupees Rs.lakh Rs.lakh
Mar-00 17847.41 7332.86 14070
Mar-01 18891.24 6027.76 12546
Mar-02 20170.44 4894.76 13980.66
Mar-03 21414.91 4758.89 14197.7
Mar-04 23676.96 5298.58 15186
Mar-05 26425.17 5370.07 22729
Mar-06 29677.98 6351.22 20538
Mar-07 33684.36 7747.78 28314
Mar-08 37969.17 9668.2 37551
Mar-09 42748.55 12064.15 54661
Mar-10 11751.57 43668
Source: CMIE Database
Cooling towers common applications include cooling the circulating water used in oil
refineries, chemical plants, power stations and building cooling. So they may be use to
estimate the market demand trend for institutional cooling.
Correlations
N 10 10 10
** **
Refrigerant Pearson Correlation .833 1 .921
N 10 10 10
** **
Cooling_Tower Pearson Correlation .948 .921 1
N 10 10 10
The above listed figure shows the correlation output between per capita income, cooling
tower production and air conditioner production. From these figure we can conclude that
there is a strong positive correlation between per capita income and refrigerant and that this
correlation is significant at the significance level of 0.01. Also same is true for correlation
between cooling tower and per capita income.
So higher is the per capita income, higher will be the demand for domestic air conditioner &
refrigerator and commercial cooling tower. Using these we can also infer that there would be
higher demand for commercial air conditioned buses too.
Customers tend to be value-maximizers, within the bounds of search costs and limited
knowledge, mobility and income. They estimate which offer will deliver the most perceived
value and act on it. Whether or not the offer lives up to expectation affects customer
satisfaction and the probability that he or she will purchase the product again.
Customer perceived value is the difference between the prospective customer’s evaluation
of all the benefits and all costs of an offering and the perceived alternatives. The seller must
assess the total customer value and total customer cost associated with each competitor’s
offer in order to know his or her offer rates in the buyer’s mind. The seller who is at a
customer perceived value disadvantage has two alternatives: to increase total customer
value or reducing the buyer’s cost.
So we may study:
Region wiz number of coach work factories in operation.
Workers employed in factory.
Gross Output of factory
For our further analysis we have classified the states of India into four regions i.e. North,
South, East and West. The classification is as per the below listed table.
On analysing the data we have found that there were 126 coach building factories in South
Region, 124 in west, 63 in North and 14 in east. Maharashtra has the highest number of
Summer Project Report 46
coach building factories i.e. 85 in India. So we can say that that South and West Indian
Region are most popular region for coach building. It may be because of large customer
base in this region.
In South India maximum number of employees i.e. 9790 were employed in coach work
factories. It was followed by west region which had 8299 employees, then north region at
6202 and then east region at 1521. So it again strengthen our belief that south and west
region have the highest commercial vehicle demand in India.
Analyzing the data we can see that the relative size of northern region is highest i.e.
1143139 lakhs followed by west region at 118903 lakhs. Haryana has emerged out as a
market leader in terms of gross sales at Rs 1126672 lakhs. Also the gross value of plant and
machinery for Haryana is highest i.e. Rs 449737 lakhs followed by West Bengal at Rs 19263
lakhs.
For our research all of these 13 AC bus body builders will be approached.
In Delhi there are large numbers of AC Bus operators for which no complete information is
available. For AC Bus Private Operators snowball sampling will be used. This sampling
method is generally use when researcher does not have access to sufficient people with the
required characteristics. So here we ask them to refer other people who fit our study
requirements, then follow up with these new people. For institutional buyers and competitors
sales person judgment sampling approach will be followed.
5.2.2 Results
Out of approached persons only 9 bus body builders, 4 sales person, 5 institutional buyers
and 11 private ac bus operators agreed to participate in our study.
The participants for this survey were bus body builders, institutional bus buyers and private
bus operators. During this survey questionnaire approach was being followed.
It was observed that bus body builders have lesser role in purchase decision. Most of the
times they are guided by customer himself about the brand of ac to be install. But if
sometimes customer is quite confused while selecting then they do recommend them. Sales
person of different available brand do visit them on continuous basis and offer them the
margin money on amount of sales they have helped in.
Institutional buyers and Private bus operators have rated cooling efficiency and after sales
service as the most important factor they consider while selecting a particular make of bus
AC.
Respondent Type
Cluster Number
Institutional/ Private Attribute
Institutional (School) Fleet Size < 5, Experience< 5 year
1
Institutional (School) Fleet Size < 10, Experience < 5 year
Private Fleet Size < 5, Experience < 10 year
Private Fleet Size < 10, Experience < 5 year
2 Private Fleet Size > 15, Experience < 5 year
Private Fleet Size < 10, Experience < 10 year
Private Fleet Size < 10, Experience < 15 year
Institutional (School) Fleet Size < 20, Experience < 10 year
Private Fleet Size < 5, Experience < 10 year
3 Private Fleet Size > 20, Experience > 20 year
Private Fleet Size < 5, Experience < 5 year
Private Fleet Size < 5, Experience < 5 year
Institutional (School) Fleet Size < 5, Experience < 5 year
4 Institutional (School) Fleet Size < 5, Experience < 5 year
Private Fleet Size < 5, Experience < 10 year
Cluster
Attributes
1 2 3 4
After Sales Service 1 1 1 1 Order
Cooling Efficiency 1 1 1 1 Qualifier
Body Builder Recommendation 1
Peer Recommendation 2 1
Brand Name 1 1 Order
Maintenance Cost 1 1 2 Winner
Mileage 1 1 1
Product Price 1 1
1 Very Important
Colour Coding
2 Important
From above table we can say that institutional buyer gives high importance to bus body
builders and peer recommendation. It can be explained because of their less experience and
also they are not very regular in making purchase decision. So they are not updated with
latest happenings and offers. Because of all these they rely on others to help them in making
decision.
Five Competitor Sales person had agreed to participate. For them personal interview was
conducted. They have highlight following as order qualifier for a customer
After Sale Support
Product Reliability
Part Availability
Part Pricing
Cooling Efficiency.
5.2.3 Conclusion
Bus air conditioner customer values cooling efficiency and service quality as the most
important attributes while making purchase decision. So we can classify these two as order
qualifier. Apart from this he also looks for maintenance cost, mileage, price and
recommendation. These can be classified as order winner. These parameters matter to
different degrees for different type of customers as per his needs.
Is there is any mark difference for after sales service expectations across the two group
i.e. institutional buyer and private operators.
The total perceived value of a service comes from two sources. First, customers perceive
value that originates from service act itself. Second, customers perceive value that originates
from the quality of service act.
At the strategic business area level, the overall after-sales financial performance is
considered. It can be measured by indicators such as operating profit, ROA, ROI, etc. It s
important to stress that the financial results are generated both by market results (market
share, market penetration, etc.) that impact on revenue, and by the efficient consumption of
resources (costs). The second level of the framework is the process one. According to Lynch
and Cross (1991), process performance can be measured with regard to customer
satisfaction, flexibility and productivity. The third level considers the performance of the after-
sales organisational unit in dealing with its specific activities. It is useful to distinguish
between front office activities, impacting directly on customer satisfaction, and back office
ones, which are responsible for efficiency and lead times. Five performance dimensions at
the activity level are considered: reliability, responsiveness, internal lead times (which are
mainly measured by non financial indicators), waste, costs and assets utilisation (which is
mostly evaluated through financial indicators). Finally, the fourth level of the framework
proposed by Gaiardelli et al. (2005), assesses the development and innovation dimension
(Kaplan and Norton, 1992), aiming at capturing the drivers of future competitive and financial
results.
The questions in the questionnaire were designed using various scales like Nominal Scale,
Ordinal Scale and Ratio Scale.
Null Hypothesis: There is no much difference between institutional buyers and private bus
operator for weightage given to after sales service while making purchase decision.
Alternate Hypothesis: There is much difference between the two groups for the weightage
given to after sales service while making purchase decision.
To check the normality of data obtained for institutional buyer and private bus operator,
boxplot was plotted. The graph obtained is as shown below for the two.
The median for the two boxplot lies in the centre of box. So we can say that data is normal.
Moving ahead to determine whether there is any significant difference between institutional
buyer and private operator for after sale service, an independent group T Test was
conducted. The results obtained are
F Sig. t
Given that Levene’s test probability is greater than 0.05, we can assume that population
variances are relatively equal. Therefore we would check the t value, df and two tail
significance for the equal variance estimate whether the after sales service weightage
difference exists.
Independent Samples Test
Lower Upper
The two tail significance for after sale service weightage indicates that p > 0.05 and
therefore is not significant. At 5% significance level we can accept the null hypothesis i.e. the
2 To study the various after sales service component and find the key underline
service attributes
In previous study we have found that there is no much difference between the after sales
service weightage given by institutional buyers and private bus operators. So now we would
try to map the expected and perceived after sales service by these customers.
For this we have use principal component analysis. As the communalities is consistently
high and the number of factors is only 2 we can say that strength of data is strong. So for
this data sample size is less important. Also KMO measure of adequacy is greater than 0.5
i.e. 0.668. So our result is valid. Analyzing the result, two factors seem to emerge out. Factor
1 represents Responsiveness and factor 2 seems to represent effectiveness.
Table 5-8: Principal Component Analysis Factors for expected after sales service
Factor Variables Factor Loading
Application_Design .897
Spare_Part_Cost .884
Responsiveness Technical_Assistance .857
Response_Time .720
Operator_Training .635
Service_Productivity .802
Effectiveness
Repair_Time .802
The obtained factor scores for the respondents are shown in below listed table.
Table 5-9: Factor Score for expected after sales service component
Though there are few outliners in plot, but most of other respondents lie in somewhat close
range. So we can say that for most of the customers expected after sales service demand
parameters are same.
3 To identify the perceive value of after sales service customers are currently
getting from their existing suppliers.
For this we have had asked respondents to rate various for the current level of after sales
service they are getting from their supplier. To find the underlying components we have
performed principal component analysis. The KMO measure of sampling adequacy is 0.766
which is very good and for these data Bartlett’s test is highly significant (p < .001) and
therefore analysis is appropriate. Also communalities for data is consistently high and
number of components are only 2, so small sample size is not a problem.
The obtained factor scores for the respondents are shown in below listed table.
Table 5-11: Factor score for perceived value of after sales service
In the above graph we can see that there is a mark difference between perceived value on
two defined dimensions whereas expected value lies somewhat in close range. So we can
say that there is a huge difference between what customers want and what they are being
delivered.
In previous chapter we have find that bus air conditioner after sales service has two measure
dimensions – Responsiveness and Effectiveness. As market segment consists of customers
who share a similar set of needs and wants, therefore we can group customers on the basis
of these two dimensions. The four obtained segments are
Segment C Segment A
Effectiveness
Low
Segment D Segment B
Low High
Responsiveness
For our survey we have considered institutional buyers and private bus operators only. We
haven’t taken OEMs (Ashok Leyland, Tata Motors, VECV etc.) and bus body builders. After
analysis we have identified after sales service as one of the critical parameter while making
purchase decision. So for our further discussion we can eliminate fourth segment i.e. low
responsiveness and low effectiveness.
Now we would try to find the size, purchasing power and characteristics of each identified
segment. It is done so as to identify whether each segment is large enough to serve. Also it
will help to craft the strategy to serve them by formulating effective programs.
6.1.1 Segment A
This segment his high on both after sales service attribute i.e. they want the bus ac supplier
to be more responsive and as well as more effective. So the cost of service for this segment
is high. On analyzing the respondent details we have found that this segment constitutes
private operators having medium fleet size (between 10 & 20). Also there are few
institutional buyers also in this segment. Maximum number of respondents in our sample lies
in this segment.
6.1.2 Segment B
This segment is high on responsiveness but low on effectiveness. They want their service
provider to be more of proactive rather than reactive. On analyzing the respondent details
we have found that customers of this segment have medium to low fleet size and majority of
them have less experience. But few of the respondents also have their own full time
workshops. It may be the case that they have diversified business (like car service, truck
service etc) and depends on their supplier for assistance purpose only.
6.1.3 Segment C
Market Segment
Features/ Parameters
A B C D
OEMs 1
Segment
Attribute
Cluster 1 1 1 NA
Analysis
Cluster
Cluster 2 1 NA
Cluster 3 1 1 NA
Cluster 4 1 NA
* NA: Not Applicable
In evaluating different market segments, the firm must look at two factors: the segment’s
overall attractiveness and the company’s objectives and resources.
On perception mapping the perceived value by customers for existing level of after sales
service offered by competitors, we have identified that there is no much significant difference
between the perceived and expected after sales service value. So company cannot target
any of the market segments on after sales service criteria.
But looking into the segment attractiveness, we can further analyse Segment B and
Segment C for market entry. As Segment D due to lack of required data is not analyzed so
nothing can be said about it.
Also our survey is being conducted only in Northern region (Delhi/NCR) of India only, so
there may be some regional biases which may not be accounted for in this research.
The second order qualifier was ‘cooling efficiency’. Company should look for new value
proposition in it. For this we may use ‘Quality Function Deployment tool – House of
Quality’. But company then also has to deliver a high quality after sales service to attract the
targeted market share of this market.
Michael Porter has identified five forces that determine the intrinsic long run attractiveness of
a market or market segment: industry competitors, potential entrants, substitutes, buyers
and suppliers. His model is shown in figure 5.1.
Source: http://thomasbarker.com/files/porters.gif
7.1 Analysis
Mumbai,
Thermoking USA 1938
Maharashtra
Carrier enjoys a leadership position with a significant market share. They offer a full range of
products specially designed for high ambient temperatures in India. Carrier has been one of
the pioneers in the fields of transport air-conditioning and in cold chain development. For
buses, they have a range of split and roof top systems with cooling capacities ranging from 5
kW to 44 kW, for installation on buses carrying 10 to 100 passengers.
Their manufacturing facility is located in Gurgaon, on the outskirts of New Delhi and the India
sales and distribution Head office is in Bangalore. The Regional Offices are in Delhi,
Mumbai, Bangalore and Kolkata. We also have sales offices at Chandigarh, Pune, and
Chennai. Their service dealer network includes more than 20 company technicians and 60
service dealers spread in all major cities in India, primarily along the main highway routes.
They have set up a state of the art engineering/R&D center at Gurgaon. Their bus air
conditioning equipment is used by almost all State Transport Corporations. They offer
customized solutions, specially adapted to Indian road and ambient conditions; and also
provide strong parts and service support through a countrywide network of service dealers.
Carrier also has a strong leadership position in room air-conditioning as well as air-
conditioning of large buildings and projects.
The company has established nine service stations in UP alone to provide service support to
UP roadways and other private customers. It has also bagged significant orders from the
Government and private operators in West Bengal, Orissa and Andhra Pradesh. In the
Haiger offers a complete product range from 11.6 KW to 50 KW, from 3.3 tonnes to 14
tonnes. It offers solutions for buses starting from 6 m long to 12 m long coaches. Haiger is
an 100 per cent OEM for JCBL and Cerita Motors. Haiger is also considering a entry into the
truck refrigeration market as also cars and rail coach air-conditioning. Haiger India clocked a
turnover of Rs. 12.5 crores in 2007-08.
Sidwal has also built very strong competency in the Bus air-conditioning business. Sidwal
has the largest range of air-conditioning products for this industry to meet the diversified
needs of customers, starting from trucks, Defence combat vehicles, military ambulances,
free flow units for city ambulances and low-roof mini-buses, and roof top units for small, mid
and large buses having seating capacities from 10 to 72 seaters.
By March 2009, company has fitted over 2000 units on various types of buses including
luxury coaches for long distance travel, for tourist purpose and even some of the Tarmac
coaches for airport applications.
Sidwal is currently a 100 per cent Indian company with no technology tie-ups for any of its
products. The company has three manufacturing facilities in the North. Sidwal employs over
a 1,000 people out of which 400 people are employed in service alone along all the rail
network across the country to provide 24/7 service support for Railways. This is a big
advantage for Sidwal as these service centers can also be used to service its other products.
Sidwal clocked a turnover of Rs. 100 crores in 2007-08 and is looking to double this in the
next couple of years. The company is also closely looking at a possibly entry in the
refrigerated goods storage, displays and transportation business particularly for super
markets and refer trucks and trailers, which is bound to grow in the coming years.
Thermo King has a very wide range of products, which include Container Refrigeration (sea-
going). Rail Air-conditioning, Truck & Trailer Refrigeration and Bus Air-conditioning units.
In India, we have been promoting a wide range of TK bus airconditioning and truck
refrigeration models to suit the domestic requirements. We have been supplying regularly TK
Truck Refrigeration units to Amalgam, Choice, Devi, Baby, Integrated, Alsa Marine for frozen
fish; Quality Walls and Amul for Ice Creams; Allana, Al-Kabeer, Venkey’s, McDonald’s for
meat & poultry and to hordes of private transports, floriculturists and fish exporters.
Source: http://www.aitransit.com/bus_and_coach/Pictures/SRLT_Bus_Instal_small.jpg
For brief study of available range of bus air conditioners in India, we would classify them into
three segments i.e. Small Bus A/C, Medium Bus A/C and large bus A/C
CT-15 6 2030
CT-25 10 2465
Haiger Alfa 17 17 NA
In this range all the suppliers provides a one year warranty service. For more details please
look in Appendix.
There is no industry standard for cooling capacity. It all depends on the usage of vehicle and
hence has to be customized as per its need. Also it varies in power consumption and weight.
SR 30S 28 4000
Sidwal
SR 13S 16 4000
Haiger Alfa 20 20
In this range all the suppliers provides a one year warranty service. For more details please
look in Appendix.
Considering weight, power consumption and cooling capacity as the parameter there is a
wide range of difference available in the available product range. This can be because of the
wide application for which this range of product is being use. Like if vehicle has a box type
Summer Project Report 72
body building then engine load will not interfere with cabin cooling and so effectiveness of air
conditioner increase.
In this range all the suppliers provides a one year warranty service. For more details please
look in Appendix.
Depending upon the application of bus, product has to be designed. So there is a very wide
difference between the product attributes.
Indian air conditioner suppliers have a tie up with any one of the strong international player
and hence depends upon them to source critical air conditioner unit components. Hence this
reduces the bargaining power of suppliers.
Soon coming years we can see a large shift in complete build bus market from small
unorganized players to bus chasis manufacturers. But for a period of time we continue study
both as customer, as still major chunk of market is with these small players.
OEMs AC Suppliers
JCBL Haiger
Few of them have entered into the strategic partnership with AC Suppliers. Some of the
customers depend on their expertise and source fully built buses from them but some time
they are guided by the end customer for brand of ac unit to be installed. We can say that
they enjoy a strategic location in evolving Indian bus market. So they too have a high
bargaining power.
Company 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
% Market Share
Maruti Suzuki India 67.1 52.46 48.04 47.22 43.54 41.71 39.89 40.63 38.8 39.88 38.34
Hyundai Motor India 4.55 13.77 16.97 18.45 19.57 22.12 22.28 23.28 22.46 22.8 29.56
Tata Motors 1.21 9.76 7.33 10.78 12.43 13.95 15 15.24 14.76 12.43 12.85
Honda Siel Cars India 5.55 3.86 4.02 4.61 4.82 6.11 8.12 8.66 11.21 9.86 7.58
Ford India Pvt. Ltd 4.02 2.02 5.33 4.58 4.13 4.43 4.39 4.56 5.81 4.46 3.37
General Motors India Pvt. 2.11 1.24 2.8 3.79 0.79 3.56 2.72 1.82 1.76 3.5 3.01
Toyota Kirloskar Motor Pvt. 0.59 2.93 2.34 2.34 1.58 1.31 1.46
Mahindra Renault Pvt. 2.49 1.23
Sales Value (in Rs crores)
Maruti Suzuki India 7300.9 8540.6 8187.6 8284 8441.2 10355.3 12407.5 13734.2 16034.1 19549 21186.56
Hyundai Motor India 495.11 2242.19 2892.1 3237.41 3794.57 5490.52 6930.17 7867.72 9283.09 11179.41 16336.82
Tata Motors 132 1589.73 1248.42 1890.77 2409.74 3464.24 4664.67 5152.31 6098.51 6092.96 7100
Honda Siel Cars India 603.4 628.24 685.72 808.34 935.29 1516.33 2525.26 2928.83 4634.08 4835.12 4191.08
Ford India Pvt. Ltd 437.95 328.3 908.5 803.41 801.38 1100.23 1365.13 1539.92 2400.78 2188 1865
General Motors India Pvt. 229.12 201.13 476.39 665.22 153 884.44 845.05 614.15 727.42 1716.45 1664.53
Toyota Kirloskar Motor Pvt. 114.47 726.58 726.58 792.12 652.16 641.5 806.71
Mahindra Renault Pvt. 1219.07 677.21
Source: CMIE Database
Year Force Motors General Motor Toyota Bajaj Hindustan Motors Mahindra Tata Motor Total
X No. of seats including driver not exceeding 13
2004 4032 25887 5004 185 18356 22920 76384
2005 4533 11631 11 2174 55 15265 23600 57269
2006 7225 11190 14084 24292 56791
2007 7219 10884 8683 20009 46795
2008 6400 7534 10540 15815 40289
2009 5191 5690 4 10623 12067 33575
2010 (Jan - Mar) 1866 2488 562 2919 NA
Y No. of seats including driver exceeding 13
2004 3900 382 2801 3447 10530
2005 3074 1300 198 1513 3398 9483
2006 3707 232 1669 1831 7439
2007 4099 58 3171 1862 9190
2008 4119 6 2807 3617 10549
2009 4709 10 2674 4800 12193
2010 (Jan - Mar) 1873 4 649 1427 NA
Source: Indiastat Database
Tourist Visit (in no) Pasngrs Travelled By Bus Bus Trip Required
Total
Year Foreign Domestic Trips
Tourist Tourist Foreign Domestic Foreign Domestic
1995 21200000 1366400000 784400 538361600 19610 13459040 13478650
1996 22900000 1401200000 847300 552072800 21182 13801820 13823002
1997 23700000 1598800000 876900 629927200 21922 15748180 15770102
1998 23600000 1682000000 873200 662708000 21830 16567700 16589530
1999 24800000 1906700000 917600 751239800 22940 18780995 18803935
2000 26500000 2201100000 980500 867233400 24512 21680835 21705347
2001 25400000 2364700000 939800 931691800 23495 23292295 23315790
2002 23800000 2696000000 880600 1062224000 22015 26555600 26577615
2003 27300000 3090400000 1010100 1217617600 25252 30440440 30465692
2004 34600000 3662700000 1280200 1443103800 32005 36077595 36109600
2005 39200000 3919500000 1450400 1544283000 36260 38607075 38643335
2006 44500000 4623100000 1646500 1821501400 41162 45537535 45578697
2007 50800000 5265600000 1879600 2074646400 46990 51866160 51913150
2008 53700000 5629200000 1986900 2217904800 49672 55447620 55497292
Power
Cooling Capacity Voltage Weight Airflow Price
Company Model Name Compressor Consumption
(in Kcal/hr) (in V DC) (in Kg) (in m3/hr) (in lakhs)
(in Amp)
4. What are the various factors you consider while selecting bus air conditioner?
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
Variable 1 2 3 4 5
Price
Maintenance Cost
Brand Name
Mileage
After Sale Service
Body Builder Recommendation
Peer Recommendation
Sale Person Recommendation
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
11. What are the features you like most in current product?
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
12. What are the features you would like to have in new product?
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
Visiting Card
Thank You
a
Case Processing Summary
Cases
16 100.0 0 .0 16 100.0
Proximity Matrix
Case 1 2 3 4 5 6 7 8
Case 9 10 11 12 13 14 15 16
Agglomeration Schedule
1 3 4 1.000 0 0 6
2 10 16 3.000 0 0 9
3 9 15 3.000 0 0 7
4 12 13 3.000 0 0 12
5 5 11 3.000 0 0 10
6 3 14 3.500 1 0 10
7 8 9 3.500 0 3 12
8 1 2 4.000 0 0 15
10 3 5 5.500 6 5 13
11 6 7 6.000 9 0 14
12 8 12 6.833 7 4 13
13 3 8 7.760 10 12 14
14 3 6 9.300 13 11 15
15 1 3 11.357 8 14 0
Cluster Membership
1 1 1 1 1 1
2 1 1 1 1 1
3 2 2 2 2 2
4 2 2 2 2 2
5 2 2 2 2 2
6 3 3 3 3 2
7 4 3 3 3 2
8 5 4 4 2 2
9 5 4 4 2 2
10 3 3 3 3 2
11 2 2 2 2 2
12 6 5 4 2 2
13 6 5 4 2 2
14 2 2 2 2 2
15 5 4 4 2 2
16 3 3 3 3 2
Company Name
1. Have you purchased, or participate in the decision to purchase a bus air conditioner in the past 5
years? (Check one)
Yes No
2. How many times have you used warranty service for your bus ac in past 5 years? (Check one)
1 1 2 3 4 5 or more
3. Do you anticipate purchasing, or participating in the decision to purchase, a bus a/c within one
year? (Check one)
Yes No
4. How much information concerning after sales service that typically comes with bus a/c do you
know, in general?
5. How much experience do you have in evaluating after-sales offerings for bus a/c?
Little or no Great
1 2 3 4 5
experience experience
6. How much information concerning after sales service that accompanies your bus a/c do you
know?
7. How much expertise do you have as a consumer of after sales service for automobiles?
Not Very
Parameters
Important Important
Parts availability 1 2 3 4 5
Technical assistance 1 2 3 4 5
Operator Training 1 2 3 4 5
Application Design 1 2 3 4 5
Service Productivity 1 2 3 4 5
Service Quality 1 2 3 4 5
Response Time 1 2 3 4 5
Repair Time 1 2 3 4 5
Environment Friendly 1 2 3 4 5
9. What are the different services you are getting from your current supplier in general?
10. During commercial phase does your supplier is in constant touch with you?
11. Below are product characteristics one might consider when purchasing a bus A/C. Please
distribute 100 points among the four characteristic to you in your decision to purchase?
Highly Highly
Parameters
Dissatisfied Satisfied
Parts availability 1 2 3 4 5
Technical assistance 1 2 3 4 5
Product Design 1 2 3 4 5
Service Productivity 1 2 3 4 5
Service Quality 1 2 3 4 5
Response Time 1 2 3 4 5
Repair Time 1 2 3 4 5
Installation Time 1 2 3 4 5
Cooling Efficiency 1 2 3 4 5
Installation Cost 1 2 3 4 5
(Visiting Card)
Thank You
a
Correlation Matrix
a. Determinant = .016
Df 21
Sig. .006
Initial Extraction
Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings
Component Total % of Variance Cumulative % Total % of Variance Cumulative % Total % of Variance Cumulative %
Component
1 2
Spare_Part_Cost .897
Application_Design .866
Technical_Assistance .858
Response_Time .797
Service_Productivity .765
Repair_Time .765
a. 2 components extracted.
Component
1 2
Application_Design .897
Spare_Part_Cost .884
Technical_Assistance .857
Service_Productivity .802
Repair_Time .802
Component 1 2
1 .982 .190
2 -.190 .982
Component
1 2
Component
1 2
Correlation Parts Availability 1.000 .726 .717 .577 .467 .674 .559 .552
Technical Assistance .726 1.000 .696 .661 .330 .338 .672 .628
Operator Training .717 .696 1.000 .592 .538 .469 .512 .565
Product Design .577 .661 .592 1.000 .400 .387 .582 .487
Service Productivity .467 .330 .538 .400 1.000 .758 .679 .411
Service Quality .674 .338 .469 .387 .758 1.000 .613 .334
Response Time .559 .672 .512 .582 .679 .613 1.000 .661
Repair Time .552 .628 .565 .487 .411 .334 .661 1.000
Sig. (1-tailed) Parts Availability .002 .002 .015 .046 .004 .019 .020
Correlation Parts Availability 1.000 .726 .717 .577 .467 .674 .559 .552
Technical Assistance .726 1.000 .696 .661 .330 .338 .672 .628
Operator Training .717 .696 1.000 .592 .538 .469 .512 .565
Product Design .577 .661 .592 1.000 .400 .387 .582 .487
Service Productivity .467 .330 .538 .400 1.000 .758 .679 .411
Service Quality .674 .338 .469 .387 .758 1.000 .613 .334
Response Time .559 .672 .512 .582 .679 .613 1.000 .661
Repair Time .552 .628 .565 .487 .411 .334 .661 1.000
Sig. (1-tailed) Parts Availability .002 .002 .015 .046 .004 .019 .020
a. Determinant = .002
Technical Service
Parts Availability Assistance Operator Training Product Design Productivity Service Quality Response Time Repair Time
Parts Availability 5.235 -2.487 -1.107 -.214 1.129 -3.495 1.316 -.763
Technical Assistance -2.487 4.988 -1.342 -.596 .925 1.786 -2.729 .114
Operator Training -1.107 -1.342 3.292 -.429 -1.624 .460 1.240 -.504
Product Design -.214 -.596 -.429 2.011 -.006 .063 -.516 .078
Service Productivity 1.129 .925 -1.624 -.006 3.858 -2.203 -1.665 -.032
Service Quality -3.495 1.786 .460 .063 -2.203 4.854 -1.541 .818
Response Time 1.316 -2.729 1.240 -.516 -1.665 -1.541 4.778 -1.421
Repair Time -.763 .114 -.504 .078 -.032 .818 -1.421 2.275
df 28
Sig. .000
Anti-image Covariance Parts Availability .191 -.095 -.064 -.020 .056 -.138 .053 -.064
Technical Assistance -.095 .200 -.082 -.059 .048 .074 -.114 .010
Operator Training -.064 -.082 .304 -.065 -.128 .029 .079 -.067
Product Design -.020 -.059 -.065 .497 .000 .006 -.054 .017
Service Productivity .056 .048 -.128 .000 .259 -.118 -.090 -.004
Service Quality -.138 .074 .029 .006 -.118 .206 -.066 .074
Response Time .053 -.114 .079 -.054 -.090 -.066 .209 -.131
Repair Time -.064 .010 -.067 .017 -.004 .074 -.131 .440
a
Anti-image Correlation Parts Availability .732 -.487 -.267 -.066 .251 -.693 .263 -.221
a
Technical Assistance -.487 .743 -.331 -.188 .211 .363 -.559 .034
a
Operator Training -.267 -.331 .813 -.167 -.456 .115 .313 -.184
a
Product Design -.066 -.188 -.167 .954 -.002 .020 -.167 .037
a
Service Productivity .251 .211 -.456 -.002 .732 -.509 -.388 -.011
a
Service Quality -.693 .363 .115 .020 -.509 .656 -.320 .246
a
Response Time .263 -.559 .313 -.167 -.388 -.320 .736 -.431
a
Repair Time -.221 .034 -.184 .037 -.011 .246 -.431 .856
Anti-image Covariance Parts Availability .191 -.095 -.064 -.020 .056 -.138 .053 -.064
Technical Assistance -.095 .200 -.082 -.059 .048 .074 -.114 .010
Operator Training -.064 -.082 .304 -.065 -.128 .029 .079 -.067
Product Design -.020 -.059 -.065 .497 .000 .006 -.054 .017
Service Productivity .056 .048 -.128 .000 .259 -.118 -.090 -.004
Service Quality -.138 .074 .029 .006 -.118 .206 -.066 .074
Response Time .053 -.114 .079 -.054 -.090 -.066 .209 -.131
Repair Time -.064 .010 -.067 .017 -.004 .074 -.131 .440
a
Anti-image Correlation Parts Availability .732 -.487 -.267 -.066 .251 -.693 .263 -.221
a
Technical Assistance -.487 .743 -.331 -.188 .211 .363 -.559 .034
a
Operator Training -.267 -.331 .813 -.167 -.456 .115 .313 -.184
a
Product Design -.066 -.188 -.167 .954 -.002 .020 -.167 .037
a
Service Productivity .251 .211 -.456 -.002 .732 -.509 -.388 -.011
a
Service Quality -.693 .363 .115 .020 -.509 .656 -.320 .246
a
Response Time .263 -.559 .313 -.167 -.388 -.320 .736 -.431
a
Repair Time -.221 .034 -.184 .037 -.011 .246 -.431 .856
Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings
Component Total % of Variance Cumulative % Total % of Variance Cumulative % Total % of Variance Cumulative %
Initial Extraction
Parts Availability 1 0.721
Technical Assistance 1 0.861
Operator Training 1 0.694
Product Design 1 0.636
Service Productivity 1 0.862
Service Quality 1 0.88
Response Time 1 0.723
Repair Time 1 0.621
Extraction Method: Principal Component Analysis.
Component
1 2
a. 2 components extracted.
a
Rotated Component Matrix
Component
1 2
Component 1 2
1 0.805 0.594
2 -0.594 0.805
Component
1 2