Case Analysis PV Technologies Inc

B2B Marketing
Prepared By:
Name Murali R Karan Sangar Roll Number EPGP-04C-055 EPGP-04C-044 Organization Target Corporation Dell India Pvt. Ltd. Designation Sr. Delivery Manager Sr. Business Advisor

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Summary
PV Technologies (PVT) was a premiere supplier of different segments of the solar energy technology arena. In late July 2011, PVT got/received a RFP from a long-time client, Solenergy Development LLC, a major developer of energy generation systems. Solenergy was seeking a supplier of utility grade central inverters for their 100MW plant; which was to be situated adjacent to an existing 25MW plant where PVT's central inverters had been performing flawlessly. Solenergy's chief electrical engineer, Greg Morgan, began his extensive evaluation of the select group of companies he had invited to bid on this major project. The officials at PVT knew they were the company to compete with, as their product was certainly the best. However, it was unofficially revealed that PVT lagged behind other competitors, leaving PVT to most likely lose the contract.

Current Situation
With respect to product Photovoltaic Inverters convert Direct Current output of solar panel into Alternative current which can be used for both residential and commercial use. As per the customer requirement PVT received an RFP from Solenergy Development, a long-time customer to build a solar energy power plant of 100MW in Barstow, California

Solenergy Assessment
Greg Morgan chief electrical engineer who is much respected at Solenergy conducted the assessment and its customary process at Solenergy to evaluate companies to invite bid for their major projects. Morgans judgment is highly influential throughout the industry and solenergy most often include its opinions and observations in press release. So here PV Tech needs to get a good evaluation for the bid in order to get the contract and confirm its status as a flagship company in this field.

Unfavorable reasons for evaluation of PV technologies by Greg Morgan?

PVTs Prices are significantly higher than competitors ones. Better quality could explain the difference but Morgan was surprised of the spread being so wide.

Solenergy was committed to cut costs among the company.

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Greg Morgans opinion was inferior performance could be compensated developing an enhanced maintenance schedule and a proactive quality control program.

Here Salvatori heard that Morgans evaluation was bad for PVT. Solenergy was about to conclude the selection process, complete evaluation was mainly based on prices.

Alternative course of action available to PVT to gain favorable evaluation by Solenergy for the Barstow Project
PVT can Offer to extend the original WARRANTY at internal cost from10 to 20 years. Fast-track the introduction of the NEW INVERTER (1.25 MW with98.5% efficiency) Initiate a DISCUSSION with Morgan Offer a 99% One- Time GUARANTEE at no cost for the customer

Extend the original WARRANTY at internal cost from10 to 20 years. Summary Cost Good sign of quality Will not break Reliable On the flip side A bit expensive Warranty does not always mean good quality product

Total Project Revenue Warranty Premium Total Revenue Total Cost of Sales Warranty Expense Sales Commission Project Cost Project Gross Profit

18000000 3240000 21240000 10800000 3240000 72000 14112000 7128000

99% One- Time GUARANTEE This offer would be unmatchable by the competitors, but this will increase quality and superiority of PV technology products.

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Signal of high reliability.

Again on the flip side of it super costly and a very high impact on the profit; Rest of the customers would definitely ask for it; Not sustainable in the future, market is already more and more focusing on low cost solutions

Initiate a DISCUSSION with Morgan We dont think this strategy will as this will show PV Tech appear as desperate measure but only advantage is that we can build a long run relationship.

Investment in the new model Accelerate the introduction of a new product, scheduled to release shortly, with higher capacity at 1.25 MW and 98.5% efficiency. o o Most efficient and reliable inverter in the market. No change is pricing strategy which the market is looking at.

But, extremely risky as it is new and is not tested.

Short term and long term policies and processes should PVT develop and implement to effectively improve its marketing programs
There was a communication issue between Morgan and Salvatori. Good communication is key to success, we should not talk big and deliver small, we should be responsive and flexible to our long term customers with whom we know we will get a good chunk of business year on year. With long term customers better to avoid forceful sales based culture.

Our take on this case and what we would have implemented differently

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Losing a powerful client like Solenergy will have huge impact on PV Tech and also on the overall reputation of the company. More focused on communication on products with our long term customers Hire trained sales professionals that can market/ update the new & upcoming offerings. Contingency plan is a must in any type of marketing, especially when quality might not be the best when compared with competitors.