Professional Documents
Culture Documents
On
Understanding the distribution strategy of Screw
Business in Delhi NCR
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By
Tanumoy Chattopadhyay
16PGDM062
PGDM 2016-18
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ACKNOWLEDGEMENT
Thank You
Tanumoy Chattopadhyay
16PGDM062
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CONTENTS
1 Executive Summary 5
2 Introduction 6
3 Problem Identification 12
4 Objective of work 13
5 Methodology 14
6 Learning 16
8 Suggestion 22
9 Four P of marketing 23
Conclusion 28
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EXECUTIVE SUMMARY
Hettich manufactures premium range products like fasteners, hinges, door handles,
channels, etc.
The price is high and quality is very good.
The company is launching a new brand named Hepo which will be less costly than
Hettich and will have lower quality than Hettich but better quality than local brands.
Local brands are market leader in screw business, so the company wants to capture
the screw market in India.
Thus, the company needs feedback from market about the expectations of retailers and
dealers for screw business in Delhi and Faridabad. So, to make them aware of the quality
and benefits of the screw that Hettich is providing them.
Preparing questionnaire and interacting with retailers about Hettich screws for
survey. This will help us to understand the screw market.
Making retailers aware of Hettich screws and its benefits.
Selling of Hettich screws and taking order for the distributors.
Training carpenters and making them aware of the screws and enroll them in the
loyalty program.
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INTRODUCTION
Industry Profile
Indian Market has been very price sensitive when it comes to hardware fittings for any
project. To cater to such need there is a huge unorganized hardware fitting market in India
which offers cheap products which may or may not be durable. Customers are also ready to
sacrifice certain features and functionality of hardware fitting products for what they
understand as a value for money buying. Its OK as long as you are able to use it for a
reasonable time period. The reason of such a booming market are:
But for the last one and half decade there has been a entry of number international brand of
hardware fittings which not only created a different market but also made Indian
manufacturers upgrade to international quality. With the help of architect specifications for
products, these brands are blossoming in this huge hardware fittings market in India.
Some standard hardware fittings category are
Door Locks, Door Hardware, Cabinet Hardware, Outdoor Hardware, Traditional Locks,
Aluminum profile, Furniture Hardware, Window Fittings, Glass Fittings, Kitchen
Accessories, architectural hardware
Below are the top hardware fittings brands in India having a trusted brand name and a good
distribution network. Out of the list Ebco, Doorset, Enox & Hardwyn are Indian companies
and the rest are European brands. Here is a List of Top Hardware fittings companies in India
from the organized Hardware fittings Industry in India.
1. Hafele furniture fittings companies in India Hfele India lays pride in its diverse range of
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quality products, well-networked channel partners and unmatched service to customers.
Based out of Germany, quality of Hfele products are of superior quality and this brand is
well known among high end interior designers.
2. Enox hardware fittings companies in India Enox is a brand of Pooja hardware Pvt. ltd.
which expertise in aluminum profiles which is a New trend in Indian Market. Aluminum
profiles can be coated with shades and it gives a dignified look to your furniture cabinet and
wardrobe doors, window frames etc. Enox has a great range of door control systems like floor
springs which are really of very high quality.
Products Glass architectural hardware, aluminum profile, furniture fitting, Kitchen solution,
sliding solution, architectural hardware, door control.
3. Ebco furniture fittings company in India a very popular and old brand known to most of
the carpenters. It has good dealer network and great range of products to cater to each and
every hardware fitting requirement. It is one of the largest among hardware fittings
companies in India having its own manufacturing unit. Prices are genuine and go well with
the quality and features of the product they offer.
Products Drawer slides, Hinges, Computer furniture fittings, Joinery fittings, Wardrobe
fittings, furniture locks, Window-door fittings, Kitchen system accessories, general hardware,
architectural hardware
4. Blum
furniture fittings companies in India Blum offers range of drawer systems and lift up
mechanism widely used in wardrobe, kitchen cabinets and for filing cabinets in office. Blum
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offers superior quality of sliding drawers which are absolutely mind blowing. These are
durable, beautiful and can give a heavy duty performance. So next time you are installing a
drawer system, go for blum but please ensure to get hold of a good person/carpenter to fit
these properly. Although you have manuals for installation, you will need a skilled installer
for optimum functionality.
Products Lift systems, Hinge systems, Box systems, Runner systems, Inner dividing
systems, Motion technologies, Assembly device.
5. Doorset:
Hardware fittings companies in India Door set is one of the few Indian companies who made
a mark in the organized hardware fittings market in India. It made a humble beginning in
1996 but made its way through to the top competing global brands. Quality of the products is
good and so is the price you pay for.
Products Architectural hardware Door Handles, Door Control Systems Accessories, Glass
Solution PVC Hardware Autodoor Solution, Lock & security systems Mortise Locks, Night
Latches, Cylindrical Locks, Euro profile Cylinders, Physical access systems, Automatic glass
doors, Luxury faucets.
6. Dorma:
Hardware fittings companies in India Dorma are a German company offering great quality of
hardware fittings. Within a short span of time they have established a good network and
brand name in India.
Products Door Closer, Automatic Swing Door Operators, Automatic Sliding & Special
Doors, Sliding Door Operators Manual Sliding Door Systems, Revolving Doors, Glass
Fittings for Doors & Assemblies, Lever & Handles, Profiles Accessories, SECURING,
Mechanical Locks & Cylinders, Electric Locks, Escape Route System ,Electronic Access
Control, Electrified Door Hardware, Panic Hardware & Exit Devices, DIVIDING Operable
Partitions, Sliding, Glass etc.
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7. Hardwyn:
Hardware fittings companies in India Hardwyn is an old brand in Indian market. Established
in 1965 it has a good presence and a trusted brand name. They offer good range at affordable
prices both for residential and commercial architectural hardware fittings requirement.
Products -Door handles & locks, Glass fittings, stair case railing, Channels, Hinges, sliders,
Security system, door closer, Bathroom accessories.
Reason for your purchase should not be only on the basis of product prices. Consider the cost
of repairing, enjoying additional feature, headache of repairing eventually giving you a hassle
free cost per year. i.e. amount invested/No. of years of problem free use.
Company Profile
a) Background of the company
Hettich is the world leading fittings specialist for the furniture industry with over 125
years of expertise in furniture hardware. The company was started by Karl Hettich in
1888. Hettich has a presence in 110 countries. Hettich is the only brand worldwide,
which has a complete range of fittings and hardware like: Hinges, Drawer runner,
Screws, Handles, folding and sliding door System etc. Its products set the benchmark
for function, quality and comfort.
Hettich India Pvt. Ltd. a Joint Venture between Hettich Group, Germany and the
Saroj Poddar Group, was set up in 2000-01, is a market leader by a wide margin, with
a sustained profitable growth year after year.
Hettich has a pan India presence with a customer base of over 1500, which consist of
large and small Dealers, Furniture and Kitchen manufacturers. It has six registered
offices and Application Centers in all metros across the country, viz., Mumbai, New
Delhi, Chennai, Kolkata, Bengaluru & Hyderabad.
With such a large network of Partners, they are never far from our customers
wherever they are in the country. We are specialists in every market segment, know
the different needs and make sure we meet them in the products we develop for the
success of everyone involved.
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b) Values of the company:
c) Product/Service profile:
Hinges:
Hinges from Hettich, the heart of good doors. Unbeatable solutions for any range of furniture
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Innovative, reliable, untiring performers. Top quality, smart mounting and adjustment
techniques.Added convenience from push to open or with Sensys, the hinge with integrated
soft-closing feature for cushioned closure.
Drawer System:
Hettich has the right drawer system for any type of furniture. For the kitchen, bathroom,
bedroom, living-room, office. Ingenious concept for systems to suit any application. Sturdy,
smooth-running, convenient, attractive. Single or double-walled side profiles in a wide range
of options. Comprehensive range of accessories optimised for the target group.
Drawer Runner:
When it comes to runners and drawers, product diversity from Hettich is unbeatable. The new
Actro 5D runner, with an option for any loading capacity, tried and proven established ball-
bearing slides and the unique Quadro runner provide the best solution for convenient, reliable
drawer opening and closing in all classes of furniture.
Hettich offers a wide range of innovative hardware systems for these alternatives. Various
folding and sliding door systems with different runner types permit solutions for all furniture
segments. Conveniently moving door elements in all sizes and materials. The optional Silent
System provides cushioned closure.
Further Products:
Handles, Screws, Flap Fittings etc.
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PROBLEM IDENTIFICATION
Hettich manufactures premium range products such as hinges, door handles, drawer channels,
hinges, etc. Costs of the products are much higher compared to local brands Godrej, Kaff,
Ebco, Hafele, etc. There are other local players also which sells furniture fittings at much
lower cost.
Main challenge for the company is to penetrate into the market with its premium products
and increase its market share. The company is facing main problem in selling fasteners
because of lack of awareness about fasteners (mainly screw) among consumers.
In most of the cases end user of furniture does not bother about fasteners used in furniture,
but screw is one of the important things which are used in furniture, strength and longevity of
furniture heavily depends upon fasteners.
Company is pushing the screw very hard but these problems are creating a lot of hindrance in
increasing its market share. We were given the responsibility to short these issues and
increase the sale of Hettich screws.
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OBJECTIVE OF WORK
To understand the distribution strategy of screw business in Delhi and NCR and
Knowledge about the product, factors that drive the screw market in Delhi and NCR,
knowing the competitors and their product and finally try to generate sales by pitching our
product to retailers and dealers.
To begin with we have to make questionnaire to ask the retailers or dealers. It was done to
know the screw market in Delhi-NCR region, understanding expectation of retailers, and to
promote or make aware our product directly to retailers. I did the survey for 3 weeks in East
Delhi. Then each one of us was assigned a market area and was asked to generate sales.
I had visited over a 100 retailers and dealers in East Delhi and Faridabad for marketing the
product by demonstrating its USPs and eventually generate sales. This helped me to
understand the distribution strategy of a Fast moving company like Hettich and how a
company generate sales and market its product.
I was also given the duty to spread awareness and understand the factors which can increase
Hettich market shares and address the problems that Hettich is facing in its distribution
channel.
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METHODOLOGY
1) Survey
During the first 3 weeks we visited various markets in Delhi-NCR region and collected
information about competitors price, margin, quality, SKUs, etc. Main competitors of
Hettich Screw are PATA, Omni, Milap, and Ebco.
After 3 weeks we were assigned an area, where we used to visit various markets and generate
sales. We demonstrated USPs of Hettich screws:
Stainless Steel 410 grade with magnetic properties (Omni SS came with 205 grade
without magnetic properties)
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Very Sharp tip
Saw thread
High Pitch Length
Pozi drive
Retailers showing interest were provided price list and we used to collect orders at that time
or during our revisit. Every day we would visit 7-8 retail shops either to convert orders or to
spread awareness about the qualities of the product.
At the end of our internship we were asked about the problems or factors that are causing
hindrance for Hettich to capture market and suggestion which can help more brand
awareness and eventually generate sales and make the distribution channel more
effective.
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LEARNING
Product Knowledge:
High Pitch- Gap between two threads are more than usual for easy to penetrate
wooden surface.
Saw thread on the threads- Helps the screw not to tear the wood instead cut smoothly.
Pointed tip- Makes the screw more precise for the carpenter to use.
Material- SS 410 grade having magnetic property which makes the screw resilient to
corrosion and less defective. The head of Hettich screw never breaks.
Product Image:
Expensive- Hettich products are usually priced high in the market than its competitors due to
its quality.
Premium product range- Hettich due to its quality and reliability has emerged as a premium
brand in the market which can be trusted.
Unavailability of SKUs- Hettich does not have all the variants in its product range which
gave not so good image to the retailers.
Understanding different markets: Hettich as a German brand give superior quality to its
customer thus product comes with a higher price than local brands. It makes the product very
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niece and affordable to some retailers or dealers. Furthermore different markets have
different demand of a type of screw. So, to market a product it is necessary to understand the
market and expectation of retailers and customers.
Therefore, promoting products to retail outlets is very important; the process involves
visiting retail outlets and displaying products of various SKUs, explaining about material
used, how Hettich products are different from its competitors, why Hettich is charging
more prices, how Hettich products will benefit both customers and retailers.
Hettich
Distributors Dealers
Retailers Dealers
Carpenter
Customer
Hettich uses two different strategies to generate demand of its products including screws i.e.
Push and Pull strategy.
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Push Strategy: Hettich has set up an effective distribution channel to maximize the sale of
Hettich products. The focus is also on the easy availability of the screws to the consumers.
The distribution network is very widely spread. The company follows the policy of
distributing screws through an effective and consistent channel consisting of distributors,
retailers, outlets and consumers. Its sales team spread all over the country in different places
which generate order and market screw along with other Hettich products.
Pull Strategy: Hettich runs a program called Carpenters loyalty program which is a
scheme to include carpenters to buy Hettich products regularly by giving them discounts and
cashback through points they gather by buying Hettich products.
Step they follow are as follows:
1. Initially they fill up a form which is like any KYC form and an amount of Rs. 500
will be given to them as bonus.
2. They will be given a membership card where points will be added when they buy any
Hettich products by the retailers.
3. The points will add up to give them further discount when they buy any Hettich
product.
It helps Hettich to generate constant demand of their products, make their customers
which are mainly carpenters loyal to them and also increase their market share.
SWOT Analysis
Strength:
Weakness:
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Improper distribution network.
Low brand awareness in the tier 2 and 3 cities.
Opportunities:
Hettich has a huge market area like tier 2 and 3 cities to cover.
Growing Indias infrastructure and strength of middle class population.
People started shifting from price to quality.
No as such competitor present for Hettich
Threat
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ANALYSIS & FINDINGS
Nearly a month of survey and then followed by generating sales for Hettich over a month
and a half we found many interesting and notable points for the company about the
market in different areas of Delhi and NCR for their screw market. Screw is a product
where the end customer is not the one who buys screw from retailers i.e. carpenters buys
screw for them. That is the reason Hettich is finding difficult to establish its screw market
on the basis of quality as Hettich provide high end quality product having prices two or
three fold higher than local brands.
Following are the points:
Price issue- Price is very high than local brands. Especially price of MS screws
are 2-3 times more than other brands in the market. SS screws are reasonably
priced as compared to premium brands like Omni.
Price driven market- Hettich screws are highly priced because of its impeccable
quality. But as the market is price driven Hettich could not able to capture the
market.
Unavailability of SKUs- Hettich screws only comes in full thread Mild
Steel(MS) and Stainless Steel(SS) but different markets have different demand
and unavailability of SKUs mainly gypsum, half thread and self-drilling screws
makes Hettich loose customer.
Less retailer margin- as compared to local brands Hettich profit margin is 10-5
% less which makes it unfavourable for dealers or retailers to keep the product in
its inventory.
Market depended- Markets that are in proper Delhi does have a demand for
premium brands, mostly 20% of screw market in proper Delhi sale premium
screws but Faridabad retailers are reluctant to sell premium brand screws as low
demand or lack of awareness of the benefits.
Packaging issue- Most of Hettich screws comes with a bulk packaging of 1000
screws and some sizes comes in 500 and 200. Retailers find it very difficult to
order or sale the product as it is very tiresome to count screws and takes lot of
time too.
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Unavailability of sales person- Unavailability of sales person in Faridabad area
is a major issue as Hepo is a new company and it should be nurtured and thus
proper marketing is required to generate constant sales.
Carpenter habits- Carpenters habits are difficult to change and as in Faridabad
carpenters are used to gypsum, half thread or self-drilling screws, it become
difficult for Hepo to capture the market without these screw types in their
portfolio.
Unavailability of Catalogues- Retailers was facing problems as there is no
catalogue or contact number provided to further order. It is bad for companies
image also.
Inventory problems- Distributors should be well connected with the company as
there is always inventory problems because of that it takes more than a week to
reach the order given by respective retailers.
Awareness issues- As to generate demand for pull strategy marketing of Hepo
through print or digital media is very necessary.
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SUGGESTION
Lower the price- SS screws are reasonably priced but company should think of
decreasing the price of MS screws as it is 2-3 times more while launching Hepo
screws if possible at the expense of quality.
Availability of all types of SKUs- Make available gypsum, half thread and self-
drilling screws as to increase your market share.
Packaging- Make small packaging of 100 screws.
Recruit sales person- At least one sales person in each area or region for every
distributors round the clock to follow up and generate sales and marketing of Hepo
screws.
Incentive for sales person- Provide incentives or travelling allowance to sales
person. Give those awards or titles each year.
Availability of catalogue- Make available enough catalogues for every retailers or
dealers to make sure doing business is easy.
Branding and Marketing- Hepo as it is in its initial days company should think
about promoting the brand through both print and digital media. Giving T-shirts or
pens to every retailer.
Create different positioning- Hettich primarily based as a product for furniture but it
can also be used as electricity fittings, product that can fix your broken house etc.
BROKEN TO FIX
HOUSE HETTICH
SCREWS
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THE FOUR PS OF MARKETING HETTICH SCREWS
Product
Hettich provides the best quality screws in India and that is the reason why they are most
expensive among its competitors. They are among the very few premium brands currently in
India that manufacture fasteners. Due to its high price Hettich coming up with a new brand
called Hepo that will be bit a cheaper and having every range of screws that Hettich
previously didnt had.
Self-drilling screws.
Gypsum screws.
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Self-Tapping.
Price:
Hettich screws are high priced than other local or premium brands.
Hettich Price is higher for Stainless Steel Category than Omni. But the price
difference is minimal.
Hettich(Saw) vs Omni(Regular)
1.84
1.54 1.57
1.411.32 1.43
1.22
PRICE (Rs)
1.08
Hettich(Saw)
Omni(Regular)
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Hettich vs Omni SS (Saw Thread)
1.841.84
1.67
1.52 1.54
1.41
1.261.22
PRICE (Rs)
Omni(Saw)
Hettich(Saw)
There is a huge difference between prices of Hettich and other brnads like Patta and
Paras; prices of Pata and Paras are almost similar. This makes Hettich less famous
among retailers.
0.82
0.76
0.65
PRICES (Rs)
0.56
0.420.42 Hettich(Saw)
0.350.35 Patta(Regular)
0.280.27 0.310.31
Paras(Regular)
Hepo brand that is launching in coming month has less difference in price as
compared to brands like Patta and Paras. It will make a huge impact in the market and
will increase the market share of Hettich.
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Hepo vs Patta vs Paras (Regular)
Hepo(Regular)
0.7
Patta(Regular)
0.57 Paras(Regular)
0.51
PRICES (Rs)
0.45
0.420.42
0.350.35
0.310.31
0.280.27
Promotion
Carpenters Meet
Pamphlet distribution
Advertising Hepo screws in metros or trains.
Make Hepo screw free with other Hettich or Hepo products.
Social Media promotion
Print media like advertisement in paper and magazines.
Technical training to dealers and retailers via sales person
Sample distribution to carpenters
T-shirt and pens with Hepo written on them distributed among carpenters, dealers and
retailers.
Place
Hettich as a company has a market in Tier-1 cities like Delhi but unable to penetrate the Tier-
2 and 3 cities like Faridabad. The reasons of failure to capture screw market are high price of
product, low brand awareness, sales team is very weak in numbers, unavailability of SKUs,
and distributors are not bothered about the product as less demand and low margin.
Suggestion:
Recruit more sales people to push the product to retailers and dealers.
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Dealers who already keep other Hettich products make them offer or combo price
which will include screw to boost sales.
Hettich website or a proper MIS system where customers, dealers, distributors can
order online.
Awards for dealers and distributors on national platform to make them more
competitive
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CONCLUSION
The screw market in India is majorly price sensitive which helped the local brands like Pata,
R.K., Apex to capture the market easily but premium brands like Hettich is finding it
difficult. But as India is a developing country and people are slowly moving to quality
Hettich through proper marketing and brand awareness campaigns can also able to capture
screw market in India. With a better distribution network and proper follow up and revised
push strategy can help Hettich reach great heights and increase sales by big margin.
The internship has helped me a lot to understand channel sales and the way it works. I have
learnt how to pitch a product to retailers and dealers to generate sales and the way company
can do marketing and the problems that arise in a distribution channel and how to tackle them
for a smooth movement along the channel.
I will like to conclude that Hettich in India has emerged as a premium brand and it has the
best quality hardware product range in India but still it has not been able to penetrate the
market properly and thus it has a long way to go; I am sure with proper strategy Hettich will
able to touch new heights.
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