CGL – AN OVERVIEW

CROMPTON GREAVES LIMITED (CGL) is India's largest private sector

enterprise. It has diversified extensively and is engaged in designing,
manufacturing and marketing technologically advanced electrical
products and services related to power generation, transmission and
distribution, besides executing turnkey projects. In 1875, a Crompton
'dynamo' powered the world's very first electricity-lit house in
Colchester, Essex, U.K. CG's India operations were established in 1937,
and since then the company has retained its leadership position in the
management and application of electrical energy. Crompton Greaves
(CG) is part of the US$ 3 billion Avantha Group, a conglomerate with
an impressive global footprint. With a turnover, over Rs. 4200 crores,
the company is India's largest private sector enterprise in the business
of electrical engineering.

The company is organized into three business groups viz. Power

Systems, Industrial Systems and Consumer Products. Nearly, two-
thirds of its turnover accrues from products lines in which it enjoys a
leadership position. Presently, the company is offering wide range of
products such as power & industrial transformers, HT circuit breakers,
LT & HT motors, DC motors, traction motors, alternators/ generators,
railway signaling equipments, lighting products, fans, pumps and public
switching, transmission and access products. In addition to offering
broad range of products, the company undertakes turnkey projects from
concept to commissioning. Apart from this, CG exports it's products to
more than 60 countries worldwide, which includes the emerging South-
East Asian and Latin American markets. Thus, the company addresses
all the segments of the power industry from complex industrial solutions
to basic household requirements. The fans and lighting businesses
acquired "Super brand" status in January 2004. It is a unique

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recognition amongst the country's 134 selected brands by "Super
brands", UK
CG's business operations consist of 22 manufacturing divisions spread
across in Gujarat, Maharashtra, Goa, Madhya Pradesh and Karnataka,
supported by well knitted marketing and service network through 14
branches in various states under overall management of 04 regional
sales offices located in Delhi, Kolkata, Mumbai and Chennai. The
company has a large customer base, which includes State Electricity
Boards, Government bodies and large companies in private and public
sectors.
At Crompton Greaves there is always a passion for quality. The
company has the unique distinction of being the first one to receive an
ISO 9000 certification for Finance and Administration. The commitment
to responsible business through quality, technology and productivity has
helped the company to receive many certifications in the ISO
9000/9001:2000/14001 series. The company’s twenty-three divisions /
regions have been accredited with ISO9001: 2000 Certification; Seven
manufacturing units have been accredited for ISO 14001 and four units
for OHSAS 18001. The Light sources division is one of the few business
units in India in lighting industry to receive dual certificate of ISO
9000:2000 was well as ISO 14001. The company's Power Transformers
and Switchgear are now compliant to international Euro/IEC norms and
ANSI/NEMA standards for greater acceptance in international markets.
The Industrial Transformer Division located at Malanpur is amongst the
few units in India, to have been accredited both ISO 14001 and OHSAS
18001, Certification for Occupational Health and Safety Management
System. The company's Fans, Motors, Automation and control products
are approved by the CSA, BASEEFA, and CE

With several international acquisitions, Crompton Greaves (CG) is fast

emerging as a first choice global supplier for high quality electrical
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equipment. CG has completed the acquisition of the Belgium-based
Pauwels on 13th May 2005. The Pauwels has transformer manufacturing
facilities in five countries (Belgium, Ireland, Canada, USA and
Indonesia) and well spread distribution network across the globe, this
makes a significant impetus to the company's international presence. CG
have also successfully acquired Hungarian based Ganz (GTV), engaged
in the manufacture of EHV Transformers, Switchgear, Gas Insulated
Switchgear (GIS), Rotating Machines and Contracting businesses and
Transverticum Kft (TV) which was a subsidiary of GTV, engaged in the
supporting areas of design, erection, commissioning and commercial
activities on 17th October, 2006. The acquisition of Microsol Holdings
Limited (MHL) and its associate companies, based in Ireland with
facilities in UK and USA, in May 2007 is yet another significant stride
in CG's journey towards positioning itself as a Global T&D Solutions
Provider. The acquisition of Societe Nouvelle de Maintenance de
Transformateurs (Sonomatra) of France in June 2008, will enhance
Crompton Greaves' capabilities in the services segment of its
transmission and distribution business.

Crompton Greaves Limited is truly India’s industrial Ambassador to the

World.

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 CORPORATE PROFILE

Crompton Greaves goes back to 1878, when Col. R.E.B. Crompton

founded R.E.B.Crompton & Company. The company merged with F.A
Parkinson in the year 1927 to form Crompton Parkinson Ltd., (CPL).
Greaves Cotton and Co (GCC) was appointed as their concessionaire in
India. In 1937, CPL established, it's wholly owned Indian subsidiary
viz. Crompton Parkinson Works Ltd., in Bombay, along with a sales
organization, Greaves Cotton & Crompton Parkinson Ltd., in
collaboration with GCC. In the year 1947, with the dawn of Indian
independence, the company was taken over by Lala Karamchand Thapar,
an eminent Indian industrialist. Crompton Greaves is headquartered in a
self-owned landmark building at Worli, Mumbai.

Today, Crompton Greaves (CG) is part of the US$ 3 bn Avantha Group,

a conglomerate with an impressive global footprint. Mr. Gautam
Thapar, the third generation of Lala Karamchand Thapar, is Chairman &
CEO of India's foremost diversified corporation, the Avantha Group.
Mr. Sudhir Mohan Trehan is the Managing Director of Crompton
Greaves Limited since May 2000. He was the recipient of the
‘Outstanding Chief Executive of the Year’ Award for 2000-2001,
instituted by the Indian Institution of Industrial Engineering, for steps
he took towards successfully implementing his vision of making
Crompton Greaves a world-class manufacturing company. In addition to
above, the Board of Directors includes the renowned names of Dr. O.
Goswami, Mr. S. Labroo, Dr. Valentin A H von Massow, Ms. M.
Pudumjee, Mr. S.P. Talwar and Mr. S.R. Bayman.

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 DIVISIONS OF CGL

REGIONAL OFFICES (ALL PRODUCTS)

1. NEW DELHI (NORTHERN REGION)

2. K O L K A T A (EASTERN REGION)
3. MUMBAI (WESTERN REGION)
4. CHENNAI (SOUTHERN REGION)

BRANCH OFFICES

1. BANGALORE 16. NAGPUR

2. JALANDHAR 17. COCHIN
3. INDORE 18. JAIPUR
4. AURANGABAD 19. MADURAI
5. NASHIK 20. SECUNDERABAD
6. NEW DELHI 21. PUNE
7. CHENNAI 22. COIMBATORE
8. KOLKATA 23. BHUBANESHWAR
9. MUMBAI 24. CHANDIGARH
10. AHMEDNAGAR 25. RAIPUR
11. GURGAON 26. PATNA
12. BARODA 27. GUWAHATI
13. GOA 28. MANDIDEEP
14. LUCKNOW 29. MALANPUR
15. AHMEDABAD

MANUFACTURING UNITS
1.Manufacture of Domestic, Agro and Industrial Pumps, Ahmednagar
(Maharashtra)
2.Manufacturing range of DC M/C and Railway Traction Motors,
Mandideep (M.P.)

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3.Manufacture DC Motors in the range of 1.2 to 450KW, Ahmednagar
(Maharashtra)
4.Manufacture of Power Transformer and Shunt Reactor, Mumbai
(Maharashtra)
5.Manufacture of Distribution Transformer, Malanpur (M.P.)
6.Manufacture of Power Transformers, Mandideep (M.P.)
7.Manufacture of Transformer-AMT Plant, Mandideep (M.P.)
8.Manufacture of Stampings for Motors, Mumbai (Maharashtra)
9.Manufactures High Voltage Induction Motors, Mandideep (M.P.)
10.Signalling Relay Unit, Pithampur (M.P.)
11.Luminaire Division, Mumbai (Maharashtra)
12.Fans & Appliances Division – I, Goa
13.Table Fans(Kundaim) Division, Goa
14.FHP Motors Division, Goa
15.LT Motors Division, Goa
16.Switchgear Division – EHV, Nashik (Maharashtra)
17.Digital-PSTA Manufacturing, Bangalore (Karnataka)

SERVICE CENTRES
1. A h m e d a b a d ( G u j a r a t )
2. B a n g a l o r e ( K a r n a t a k a )
3. Bhubaneshwar (Orissa)
4. Cochin (Kerala)
5. New Delhi
6. Jaipur (Rajasthan)
7. Jalandhar (Punjab)
8. Kolkata (West Bengal)
9. Lucknow (U.P.)
10.Secunderabad (A.P.)
11.Patna (Bihar)

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 INTRODUCTION TO CGL TRANSFORMERS

The transformers division of Crompton Greaves began operations over

60 years ago with their first supply to the US Army. The initial inputs
for technology came from collaborations with Brush Transformers and
Hawker Siddeley Power Systems of U.K. The company then forged a
technology arrangement with Westinghouse Electric Corporation U.S.A.
for transformers of up to 400 kV to serve international demand. The
Transformer Division is the highest exporter of Power Transformers
from India, a position it has maintained consistently since 1997-98.
Exports of the division amount to over 50% of the total transformer
exports from India! Products of the Transformer division are exported to
over 40 countries worldwide. The Crompton Greaves Transformer
division is known for its wide range, reliable designs, excellent
materials and globally benchmarked manufacturing practices.

Crompton Greaves is among the very few companies worldwide that

designs and manufactures the widest range of Power & Distribution
Transformers and Reactors from 160kVA to 415MVA, 500kV Class to
fulfill the specific demands of the Power & Industrial sectors and the
Railways. With an installed base of over 120 million kVA in
Transformers, Crompton Greaves has emerged as the largest Indian
supplier of a wide range of Transformers and Reactors for all critical
applications. These Transformers and Reactors find use in industries
such as Power Utilities, Process Industries, Railways, Mines, Electricity
Boards, Industrial users etc in both the Domestic as well as Global
markets.

The division has the capability to manufacture transformers from 400

kVA to 900,000 kVA (in a bank) 3.3 kVA TO 500 kV class for various
applications confirming to IS, IEC, EN, AS, BS, ANSI and other

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international standards. All the plant operations are certified under the
ISO 9001 and ISO 14,000. The Division has technologically superior
manufacturing facilities in Mumbai, Gwalior and Bhopal with a total
installed capacity of 18,500 MVA. Crompton Greaves incorporates the
latest technology, superior raw materials and state-of-art manufacturing
facilities to build transformers of superior quality and with high degree
of reliability.

PRODUCTION LAYOUT OF TRANSFORMER FACTORIES

 BAY 1 : - WINDING MANUFACTURING AREA

 BAY 2 : - OVENS FOR PRESSURE/VACCUM

CYCLE OF WINDING

 BAY 3 : - CORE BUILDING AREA

 BAY 4 : - CORE COIL ASSEMBLY SECTION

 BAY 5 : - TANKING SECTION

 BAY 6 : - ROUTINE TESTING LAB

 BAY 7 : - PAINTING & FINISHING AREA

 BAY 8 : - PACKING, FORWARDING & DISPATCH

AREA

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 COMPANY’S VISION, MISSION AND VALUES

Vision & Mission:

To achieve for Crompton Greaves Limited, the status of a world class
company so as to ensure:-
 Customer satisfaction and preference
 Profitable growth
 Perpetuity
 Stakeholder satisfaction and pride
 Fulfillment of social obligations
 Profitable growing export
The best practices and continuous improvements of processes focused
on:
 Technology up gradation
 Total quality
 Resource productivity
 Cost effectiveness
 Speed
The leaders creating an environment which encourages organizational
learning and team effort where:
 Each individual understands his or her responsibility, makes
contributions and is recognized for the same.
 Each individual enjoys his or her work and has the urge to excel.
 Each individual gives his or her best to achieve the shared
VISION.
Values:
 PERFORMANCE EXCELLENCE: It is about reviewing and
raising the performance threshold, for self and as part of a team,
fo competitive edge; setting and meeting stretch targets;
accomplishing and exceeding performance commitments. It means

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 discouraging mediocrity in others and ourselves and confronting
status quo.
 LEADING EDGE KNOWLEDGE: It is a necessary ingredient for
competitiveness and growth; enhancing capabilities; actively
pursuing and applying best practices; continuously upgrading and
benchmarking with best in class. It is the key to working smart
instead of only working hard; a continuous search for alternatives
and new ways of doing things.
 NURTURANCE: It is helping us and others to grow in
professional and personal life. It encourages an atmosphere of
fairness with participation and a climate of trust as well as
trustworthiness; a positive environment for CG to become a
learning organization; for connection between CG and its
employees.
 CUSTOMER ORIENTATION: It is sensitive and responsiveness
to the market and customer needs for high quality existing as well
as new products and services, with deliveries and after-sales
service as committed. It establishes positive long-term
relationships with both internal and external customers.
 INTELLECTUAL HONESTY: It is honesty to self; doing what we
say; making and meeting meaningful commitments. It goes beyond
simplistic integrity, financial honesty, telling the truth and
includes openness and speaking up in situation when silence would
yield an undesired result.

PRODUCT PORTFOLIO

The transformer industry in India has been in the forefront for over 50
years and it has a well developed technology base up to 800 KV class.
Keeping pace with the developments the world over, the industry has
attained the status of ‘World Class’ over the years. The growth of

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transformer industry is closely related to power generation &
distribution.
There are 150 strong base transformer companies in India, with overall
manufacturing capacity of 90,000 MVA per annum. Its contribution to
the domestic power network has estimated as over 5 Lac MVA. Besides
meeting the domestic demand, India is exporting transformers to over 50
countries in the world, covering USA, Europe, South Africa, Cyprus,
Syria, Iraq and other Middle East & Far East countries. India has a field
proven technology and capacity to manufacture a wide range of power
transformers, distribution transformers and other types of special
transformers for wielding, traction, furnace, etc. Presently, 95% of the
transformers installed in the Indian Power Network are of indigenous
origin.

Energy efficient transformers with less losses and low noise levels are
available to meet international standards. Apart from this, India is self
reliant in respect of the resources for prime materials and testing
facilities. Manufacturing facilities of Cold Rolled Grained Oriented
Steel (CRGO), winding conductors, bushings up to 420 kV class, etc. is
well established.

The Indian transformer industry has a strong manufacturing base in

power transformers. Several leading companies enhanced the production
base of power transformers. In the organized sector, Crompton Greaves,
BHEL, Areva T&D, ABB, Bharat Bijlee, Telk,, EMCO, Kirloskar
Electric are the leading manufacturers offering a wide range of
industrial and power transformers. ABB entered the local market by
establishing a local state-of-art manufacturing facilities at Vadodara
(Gujrat) in 1999 with global common design concept.
In 2005, Crompton Greaves has made a history by acquiring the Pauwels
Group of Belgium, a transformer manufacturing company with
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operations in several countries. In addition to this, Crompton Greaves
has also acquired two Hungary based companies viz. Ganz-Transelektro
Villamossagi zrt (GTV) and Ganz-transverticum Kft (TV). The first
company is engaged in the business of EHV transformers, Gas Insulated
Switchgears, Rotating Machines and Project Contracting. The second
company, however, engaged in the supporting areas of design etc. In
May 2007, Crompton Greaves has concluded an agreement to purchase
shares of Microsol Holdings Ltd., headquatered in Ireland, fro few units
as well as for retrofitting existing substations.

Siemens Ltd. has set up a transformer factory at Kalwa (Maharashtra).

This transformer factory at Kalwa, went on stream in December’2007.
This business aims to reach markets in West Asia and SAARC countries.
This new factory has built at a cost of Rs. 200 Crore and would be able
to address the high lightened demand for power transmission in the
country by designing and manufacturing large transformers up to 600
MVA and 800 KV voltage class. It would also produce the special
transformers for HVDC system. Initially, the division would have the
capacity of manufacturing transformers totaling 15,000 MVA per year.
This unit is the latest addition to the 17 transformers factories of
Siemens located worldwide.

Beside these companies, Voltamp, Vijai Electricals, Transformers &

Rectifiers, Indo Tech Transformers and Kanohar Electricals are also
offering wide range of transformers in the organized sector. The
contribution of these manufacturers in the total output of organized
sector transformer industry is very significant.

Total production of transformers of all ratings has recorded continuous

increase from 46.68 Thousand MVA in 2000-01 to 113.28 Thousand
MVA in 2006-07 with a Compound Annual Growth Rate (CAGR) of
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15.9%. During this period, the production of transformers of above 400
KVA to 4 MVA as well as above 4 MVA ratings has been more than
doubled. Production of transformer ratings above 400 KVA to 4 MVA
has increased from 4.69Thousand MVA to 13.16 Thousand MVA, while
the production of ratings of transformers of above 4 MVA has shown an
impressive growth with the continuous increase from 34.5 Thousand
MVA to 87.09 Thousand MVA.
The upturn in the production of transformers continued in the current
financial year. During April – December 2007, the production of
transformers of all ratings has shown an increase of25.8%, over the
corresponding period of the previous year, while the production of
power transformers went up by 27.7% as shown below.

Trend in Production of Transformers (Thousand MVA)

400 KVA
Up to Above % Var.
Year To Total
400 KVA 4 MVA in Total
4 MVA
2000 – 01 7.49 4.69 34.50 46.68 5.8
2001 – 02 5.68 5.85 40.27 51.80 11.0
2002 – 03 5.69 5.77 46.47 57.94 11.9
2003 – 04 6.71 7.72 55.71 70.14 21.1
2004 – 05 9.93 10.22 61.06 81.21 15.8
2005 – 06 10.25 10.81 69.91 90.97 10.9
2006 – 07 13.03 13.16 87.09 113.28 24.5
Apr-Dec
9.51 9.59 55.08 74.18 22.2
06
Apr-Dec
11.38 11.62 70.33 93.33 25.8
07

Source: IEEMA
The improvement in the performance of transformer industry in the last
four years was mainly due to robust export performance, in addition to
strengthening of the local demand. Besides meeting the domestic

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requirement, India is exporting transformers to over 50 countries all
over the world.
Apart from the renewed support for the development of power sector
through APDRP, infrastructure development programme and passing of
Electricity Act – 2003, the government’s recent initiatives on Ultra
Mega Power Plant and Merchant Power Plants, robust export market,
thrust on rural infrastructure development, creation of a new national
fund for transmission and distribution reform etc., the future outlook for
this industry appears promising.

CHALLENGES OF THE ORGANISATION

Key challenges for the organization are reviewed as follows:-
 Excellence in all areas of marketing & sales.
 Effective execution of orders.
 Effective utilization of resources.
 Material cost reduction.
 Manufacturing cycle time reduction.
 Skill and knowledge management.
 Motivation of Employees.
 Timely delivery.
 Effective Financial Project closure.

VARIOUS STRATEGIC INITIATIVES OF CGL TO FACE THE

CHALLENGES
• Manufacturing units has been divided in to different business units
fro more flat structure.
• A Central Marketing Group has been created for tendering at
different business units for Power and Distribution transformers
separately, to analyze the market scenario and target the desired
segment.

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 • Total quality management (TQM) is being encouraged.
• Knowledge Management is being given thrust.
• A Central Execution Group has been created for effective
execution of secured orders at different business units for Power and
Distribution transformers separately.
• CGL has also taken step to reposition and reorient itself to meet
the demands of the new market economy and increasing its share &
base in the market.

TOTAL QUALITY MANAGEMENT (TQM)

For Excellence in business, Total Customer Satisfaction is the basic
prerequisite. Therefore, CGL launched Total Quality Management for
bringing excellence in managing vast resources in CGL.
Total Quality means to Business effectiveness through-
1. PEOPLE FOCUS
2. PROCESS FOCUS
3. CUSTOMER FOCUS

Total Quality doesn’t mean fulfillment of customer’s requirements, but

it is to make Customer Delight. It starts from internal customers and
lead to external customer.
Thus, T.Q.M. is defined as: -
“Effective Management of Business enterprise through focus on its
People and Processes by company wide Customer driven
Leadership.”
T.Q.M. PROCESS FOCUS

It includes-
• Design and Development
• Planning
• Inventory Control (Material Management)

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• Manufacturing
• Quality Assurance
• Quality Control
• Cost and Accounting
• Marketing
• Services
• Information sharing

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SWOT ANALYSIS
Situation analysis begins the process of strategy formulation and there
is need to find external opportunities and internal strengths. The
individual parameters are hereby listed-
STRENGTHS
• Wide product range to provide solutions to different customer
segments like Thermal / Hydro power generation clients ,
transmission agencies , distribution and industries .
• Major presence in domestic power market and wide installed
equipment / customer base.
• Prompt after sales service, understanding of Indian conditions & wide
geographical spread
• Significant technology absorption and adaptation capability to suit
local needs.
• Contemporary integrated manufacturing base and infrastructure
• Highly committed engineering, technical and managerial manpower
• International quality (ISO 9000/9001:2000/14001 series, OHSAS
18001, etc.) at competitive prices Strategic Management with a blend
of appropriate measures.

WEAKNESSES
• Technology development constraints.
• Limited financing capacity for large EPC projects & uncompetitive
financing costs.
• Operational constraints (flexibility, speed of response etc.) vis-à-vis
competitors.
• Inadequate recovery from traditional customers – Utilities / SEBs 
higher working capital requirements  adversely affecting
profitability

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OPPORTUNITIES
• Growth rate of economy envisaged (6-8% p.a.) in next few years to
stimulate large demand in infrastructure.
• Government has fixed up the target of 78,577 MW of capacity
addition for XIth Plan (2007-08 to 2011-12).
• Boost to power transmission sector & privatization moves in
distribution sector.
• The total transmission capacity is planned to increase from the
existing capacity of 9,450 MW to 37,150 MW by 2012.
• To secure cheaper power through large size power projects, the
government launched Ultra Mega Power Projects (UMPPs) with the
target to produce 4000 MW by 2012.
THREATS
• Delay / deferment of projects  adverse impact on domestic
business.
• Technology leaders unwilling to share new technologies and insisting
on their terms / imposing Licensing restrictions on Territories.
• International players consolidating & setting-up local manufacturing
bases.
• Increasing competition from large MNCs with greater financial &
strategic muscle and speedier response.
• Lowering of Import Tariffs below the WTO bound rates Continued
customers insistence on qualification/ experience requirements 
Roadblocks for introduction of Indigenous Technologies.

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 OBJECTIVE OF THE STUDY
The study has been undertaken with following objectives in the mind.
• To appreciate the electric power scenario and reforms implemented in
the power sector in India.
• To have an understanding of the business environment in the power
distribution business in India as per following parameters: -
(1) Current status
(2) Government initiatives in the areas
(3) Likely effect of the reforms
• To understand the customers perceptions about the marketing
elements of the major players in India, in terms of: -
(1) Quality of products
(2) Price of products
(3) Delivery commitment
(4) Reliability of products
(5) Ability to offer After Sales Service
(6) Importance placed upon Technology and financial strengths

•T o a n a l y z e t h e v a r i o u s f a c t o r s a f f e c t i n g t h e m a r k e t i n g o f t h e
company.

The factors are-

• Political factors

• Economic factors

• Socio-cultural factors

• Technological factors

• Competition

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 SCOPE OF THE STUDY

Scope of the project titled “A study on Indian marketing environment of

power transformers in Crompton Greaves Limited” is to:-

1. Access the Financial Capabilities, Technical Competence, Production

Skills and Customer loyalty.

2. Helps finding the different strategies, networks and problems usually

faced by the company in its marketing of products.

3. Helps analyzing the Strengths, Weaknesses, Opportunities and

Threats of the organization.

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 PORTER’S FIVE FORCES ANALYSIS

Two things determine a company's profitability - the industry in which

it competes and its strategic position in the industry. Some industries
have inherently low profit potential while others are highly profitable.
The most profitable companies have a strong competitive position in a
highly profitable industry. The poorest companies have weak positions
in weak industries.
Porter's Five Forces are:
• Buyers'/customers' power
• Suppliers' power
• Rivalry among competitors
• Threat of new entrants
• Threat of substitute products

Potential
Entrants

Threat of
Entrants

Buyers
Suppliers COMPETITIVE
RIVALRY
Bargaining Bargaining
Power Power

Threat of
Substitutes

Substitutes

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Buyer Power
• Number of buyers relative to sellers
• Product differentiation
• Buyers’ profit margins
• Buyers’ use of multiple sources
• Buyers’ threat of backward integration
• Sellers’ threat of forward integration
• Importance of product to the buyer
• Buyers’ volume
Supplier Power
• Supplier concentration
• Availability of substitute inputs
• Importance of suppliers’ input to buyer
• Suppliers’ product differentiation
• Importance of industry to suppliers
• Buyers’ switching cost to other input
• Suppliers’ threat of forward integration
• Buyers’ threat of backward integration
Rivalry among competitors
• Number of competitors (concentration)
• Relative size of competitors (balance)
• Industry growth rate
• Fixed costs vs. variable costs
• Product differentiation
• Capacity augmented in large increments
• Buyers’ switching costs
• Diversity of competitors
• Exit barriers

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 • Strategic stakes

Threat of New Entrants

• Barriers to entry
- Economies of scale
- Product differentiation
- Capital requirements
- Access to Target Customers
- Other cost advantages
- Government policies
• Incumbents’ defence of market share
• Industry growth rate
Threat of Substitute Products
• Relative price of substitute
• Relative quality of substitute
• Switching costs to buyers

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 INDUSTRIAL MARKETING

Industrial marketers have to develop their capabilities in supplying

ever more complex "total solutions" that include both tangible
(products) and Intangible (services). Thus, technical product marketing
has recently received increased scholarly attention.
The process of acquiring and delivering such products entails
coordinating the activities of buyers and sellers, as the details of each
equipment are agreed during often-extensive interaction between the
two sides. The relationships between employees in the buying and
selling firms are therefore important before, during and after delivery.
The term "Technical Product Marketing" embraces all this. Marketing
of technical solutions for electric distribution sub-station is
synonymous with project marketing that in turn encompasses
relationship and industrial marketing.

Concepts of Industrial Marketing

For industrial marketers, marketing has become virtually synonymous
with business strategy because of the critical importance of market
segmentation, targeting and positioning to the competitive performance
and financial success of the firm.

Industrial marketing management also called Business-to-Business

marketing; it is defined by the nature of the customer - a profit seeking
or a budget constrained organization seeking help in achieving its goals
through the purchase of goods and services. Industrial marketing is
unique in its concern for long term strategic relationships with
customers, the complexity of the buying process, and the mutual
dependence that results. Often the ongoing development of technology
is at the core of buyer seller relationship.

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Industrial goods and services can be categorized in a variety of ways.
A typical scheme involves-
• Construction
• Heavy equipment
• Light equipment
• Components
• Subassemblies
• Raw materials
• Processed materials
• Operation supplies and services.

Industrial Marketing versus Consumer Marketing

The four key dimensions in applying the marketing concept to
Industrial Marketing were-
(a) Aiming for improved profit performance, with sales volumes and
market share but not as important as in consumer marketing.
(b) Identifying customer needs, which require understanding the
economics of the customer’s operations, then structure of the industry
within which they operate and how they compete.
(c) Selecting customer groups for emphasis, the classic problem of
market segmentation, which takes on special meaning in Industrial
Marketing because of the high degree of buyer seller interdependence
after the sale.
(d) Designing the product /service package, where there is seldom a
standard product itself and the product must be invented.

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 DERIVED DEMAND

Demand for Industrial goods and services are derived from the demand
of the customers for their goods and services. Industrial customer's
purchases reflect their expectations about future demands for their
goods and services.

It is therefore true that understanding the nature and scope of industrial

markets requires understanding both the nature of demand facing the
industrial customer and the customer's customer throughout the
marketing channel to actual consumer demand. In addition, it is usually
helpful to analyze competitions in the customer's industry and perhaps
competition among customers in the market that customer serves. The
need to analyze market activity at all levels between industrial
customer and end users / consumers are the most significant implication
of the fact of "derived" demand in industrial markets.
PEST ANALYSIS
1. Political factors
2. Economic factors
3. Socio-cultural factors
4. Technological factors

1. POLITICAL FACTORS

• Monopolies legislation
• Environmental protection laws
• Taxation policy
• Employment laws
• Government policy
• Legislation

26
2. ECONOMIC FACTORS

• Inflation
• Employment
• Disposable income
• Business cycles
• Energy availability and cost

3. SOCIOCULTURAL FACTORS

• Demographics
• Distribution of income
• Social mobility
• Lifestyle changes
• Consumerism
• Levels of education

27
4. TECHNOLOGICAL

• New discoveries and innovations

• Speed of technology transfer
• Rates of obsolescence
• Internet
• Information technology

28
 POWER

Power for all by 2012 is the objective set by government of India to

make quality power available at affordable price. To achieve the
objective many steps such as focusing on implementing distribution
reforms, enactment of Electricity Act-2003, Introduction of
Accelerated Rural Electrification Programme (AREP).

Power is the focal area of CGL. Power system accounts for around 70%
of the Company’s revenues. The company makes Power & Distribution
Transformers for all types of applications i.e. for Power Generation
Plants (Thermal, Hydro, Nuclear, Wind Mills, etc.), for Transmission
Switchyards, for special applications of industries, for power
distribution, etc.

Indian power sector at a glance

India has been divided into five geographical regions for administrative
purposes, management of transmission lines; load dispatches centers and
inter state transfer of power. The table designed underneath describes
the All India Capacity of Thermal, Hydro and Nuclear Power generated.
ALL INDIA Central State Private
CAPACITY
Thermal – MW
27,757 41,213 8,999
Hydro – MW
5,249 23,375 876
Nuclear/Wind - MW
2,720 65 1,805

Total – MW
35,726 64,653 11,680

*Source www.powermin.nic.in

29
 POLITICAL FACTORS

Electric Power Sector Reforms In India Till Date

The Policy of Liberalization

The Government of India announced in 1991 and consequent

amendments in Electricity (Supply) Act have opened new vistas to
involve private efforts and investments in electricity industry. The
major policy changes have been announced by the Government and are
enumerated below: -
• The Electricity (Supply) Act, 1948 was amended in 1991 to
provide for creation of private, generating companies for setting up
power generating facilities and selling the power in bulk to the grid or
other persons.
• Financial Environment for private sector units modified to allow
liberal capital structuring and an attractive return on investment.
• Administrative & Legal environment modified to simplify the
procedures for clearances of the projects.
• Policy guidelines for private sector participation in the renovation
& modernization of power plants issued in 1995.
• In 1995, the policy for Mega power projects of capacity 1000 MW
or more and supplying power to more than one state introduced. The
Mega projects to be set up in the regions having coal and hydel
potential or in the coastal regions based on imported fuel.
• Government of India has promulgated Electricity Regulatory
Commission Act, 1998 for setting up of the Central Electricity
Regulatory Commission (CERC) and the State Electricity Regulatory
Commission (SERCs) at the Central and the State levels respectively.
• The Electricity Laws (Amendment) Act, 1998 passed with a view
to make transmission as a separate activity for greater participation

30
from public and private sectors.
• The Electricity Laws (Amendment) Act, 1998 provides for creation
of Central and State Transmission utilities. The Central
Transmission Utility undertakes transmission of energy through
inter-state transmission system. Power Grid Corporation of India
Limited (PGCIL) will be Central Transmission Utility. The
functions of the State Transmission Utility undertake transmission
of energy through intrastate transmission system.

Electricity Act 2003:

There has always been a special emphasis in increasing the power

generation in the country to provide cheap uninterrupted power supply
for the growth of industries and household. It is envisaged that a total
capacity addition of almost 140,000MW will take place during 1997-
2012. Against the prescribed ratio for investments in Generation,
Transmission and Distribution (T & D), investments in T&D in India
have been limited to 33% as compared to the total investments in the
power sector during the past plan periods.
The Electricity (Supply) Act, 1948, provides an elaborate institutional
frame work and financing norms of the performance of the electricity
industry in the country. The Act envisaged creation of State Electricity
Boards (SEBs) for planning and implementing the power development
programs. The Central Electricity Authority constituted under the Act
is responsible for power planning at the national level. The Electricity
(Supply) Act also allowed from the beginning the private licensees to
distribute and/or generate electricity in the specified areas designated
by the concerned State.

31
ELECTRICITY ACT-2003 is looked upon an important step in
addressing the issues like-
1. Reducing losses
2. Quality improvement of power delivery.
3. Keeping the customer at focal point
The major problems that the previous law was facing were-
1. Inadequate, limited growth in generation capacity
2. Inadequate transmission facilities
3. Inadequate and inefficient distribution facilities
4. Outdated T & D line with high technical losses
5. No money for SEBs for adequate generation and no assured power
for the consumer affecting all industrial, agricultural, commercial
and other sectors.
-It enables for accelerated and more efficient development of power
sector and result in availability of quality supply of electricity to
consumers.
- Section 3(1) of electricity act 2003 requires the central govt. to
formulate the National policy in consultation with central electricity
authority (CEA) and state governments for the development of power
system based on optimal utilization of resources such as coal, natural
gas, nuclear substances or hydro and renewable sources of energy.
- Section 3(3) of the act enables central government to review or revise
the National electricity policy to time from time.
- Section 3(4) of the act requires the central electricity authority (CEA)
to frame a National electric plan once in 5 years and revise the some
from time from time.
- Section 73(a) provides the formulation short term and perspective
plans for development of the electricity system and coordinating the
activities of various planning agencies.

32
- The CEA shall prepare short term and perspective plan and the plant
would be for five years.

NATIONAL ELECTRICITY PLAN: -

It includes-
1.Short-term and long-term demand forecast for different regions.
2.Suggested areas/location’s for capacity additions in generation and
transmission.
3.Integration of locations with transmission system and development of
National grid.
4.Different technologies available for efficient generation, transmission
and distribution.
5. Fuel choices based on economy, energy security and environmental
considerations.
ISSUES ADDRESED

The policy address the following issues—

a. Rural electrification
b. Generation
c. Transmission
d. Distribution
e. Technology development and Research & development (R&D).

33
RURAL ELECTRIFICATION

- The key development objective of the power sector is supply of

electricity to all areas including rural areas.
- Consumers, particularly those who are ready to pay tariff which
reflects efficient costs, have the right to get uninterrupted 24 hours
supply of quality power.
- About 56%of rural households have not yet been electrified even
though many of these households are willing to pay for electricity.

Rural Electrification System will aim at creating the following:-

(a)With at least one 33/11 KV substation in every block connected

appropriately to the state transmission system.
(b) One distribution transforms at least in every village.
(c)Wherever above is not feasible, decentralized distributed generation
facilities together with local distribution network would be provided
so that every household get access to electricity.
- Targeted expansion in access to electricity for rural households can be
achieved by the distribution licensees.
-Subsides should be properly targeted at the intended beneficiaries in
the most efficient manner.
- Adequate funds would need to be made available.
- Necessary institutional framework would need to be put in place for
creation of rural electrification infrastructure and to operate & maintain
supply system for reliable power supply to consumers.
-The task of rural electrification requires appropriate co-operation
among various agencies of the state government, central government &
participation of the community.
-Education & awareness programming would be essential for creating
demand for electricity.

34
GENERATION

-Inadequacy of generation has characterized power sector operation in

India.
-Need based capacity addition of more than 1, 00,000 MW would be
required during the period 2002-12.
According to the Electricity act 2003 there is no requirement of-
(a)Licensing for generation.
(b) Requirement of technology economic clearance of CEA for thermal
generation project.
(c)Captive generation has been freed from all controls.

THERMAL GENERATION

- Besides all other fuels, coal would necessarily continue to remain the
primary fuel for meeting future electricity demand.
- Imported coal based thermal power station at coastal locations, would
be encouraged based on their economic viability.
- Use of low ash content coal would also help in reducing the problem
of fly ash emissions.
- Power sector consume about 40% of the total gas in the country.
- It would be economical for new generating stations to be located either
near the fuel sources. E.g. Pithead locations
- Generating companies may enter in to medium to long-term fuel supply
agreements.

TRANSMISSION

- The transmission system requires adequate & timely investments and

also to develop an integrated power system for the country.
The policy emphasizes the following to meet the above objective-

35
(1)The central government would facilitate the continued development
of the National grid for providing adequate infrastucture for
transmission of electricity from surplus regions to deficit regions.
(2) The cental transmission utility(CTU) is responsible for the National
& regional development.
The State transmission Utility (STU) is responsible for planning &
development of the intra state transmission system. Therefore,both
should co-ordinate.
-To facilitate orderly growth & development of the power sector &
reliable operation of the grid, adequate margins in the transmission
system should be created.

DISTRIBUTION
Distribution is the most critical segment. The real challenges of reforms
in the power sector lies in efficient management of the
distribution sector.
The act provides regulatory framework
(1) For distribution licenses to safe guard consumer interests.
(2) For the distribution business.
(3) Offering options to consumers through the concepts of open access
& multiple licenses in the same area of supply.

36
 ECONOMIC FACTORS

The transformer industry in India has been in the forefront for over 50
years and it has a well developed technology base up to 800 KV class.
Keeping pace with the developments the world over, the industry has
attained the status of ‘World Class’ over the years. The growth of
transformer industry is closely related to power generation &
distribution.
The improvement in the performance of transformer industry in the last
four years was mainly due to robust export performance, in addition to
strengthening of the local demand. Besides meeting the domestic
requirement, India is exporting transformers to over 50 countries all
over the world.
Apart from the renewed support for the development of power sector
through APDRP, infrastructure development programmes and passing of
Electricity Act – 2003, the government’s recent initiatives on Ultra
Mega Power Plant and Merchant Power Plants, robust export market,
thrust on rural infrastructure development, creation of a new national
fund for transmission and distribution reform etc., the future outlook for
this industry appears promising.

ORDER BOOK OF CGL TRANSFORMERS

37
 ORDER BOOK OF CGL TRANSFORMERS
(Rs. Crore)

1400
1200
1000
Rs. Cr.

800 Power Transformer

600 Distribution Transformer
400
200
0
2004-05 2005-06 2006-07 2007-08
FY

• In the power sector order booked are Rs 1550 Crore in 2007-08 as

compared to Rs. 1300 Crore in 2006-07
• During the year 2007-08, CGL achieved a turnover of Rs. 1265 Crore
by delivering high quality products and excellent After Sales
Services. A huge amount was spent on R&D programmes, focusing on
new technology development, product improvements in terms of
reliability/quality/cost.

COMPARATIVE ANALYSIS

P/L A/C in Million Rs. For FY 2007-08 (For All

Products)
ABB AREVA
CGL
India India
SALES & SERVICE
(Net) 38757.56 59303.11 20062.71
PROFIT BEFORE
TAX 4856.52 7564.57 3431.78
PROFIT AFTER TAX 3139.22 4916.69 2162.99

As compared to its competitors CGL’s performance has been better in

terms of profit margins.

38
The widely distributed and rapidly increasing demand requirements of
the country need to be met in an optimum manner. Country is planning
to add 78,577 MW by the end of the XIth plan.
CGL has adopted a three-pronged focus
1. Raising its capacity to 30000 MW p.a.
2. Pursuing introduction of new technologies i.e. 800 kV
transformers.
3. To enhance its competitive edge.

SOCIOCULTURAL FACTORS

CGL has joined the “Global Compact” of United Nations, thus bringing
together with UN, governments, labour organizations, NGOs. CGL is
involved in a host of community development programmes.
CGL is committed to core values. Its manufacturing units of
transformers are bringing into focus welfare of the society. It bans child
and forced labour. There is no discrimination with weaker sex. Special
job reservation is provided for handicapped persons, persons belonging
to schedule cast and tribe, ex-service men and their wards.

Improvement in Community Life

• Up gradation of roads and provision of safety devices

• Renovation of house for social functions
• Plantation of trees
• Renovation of Parks, Hospital, Parking areas, Schools.
• Medical camps in villages
• Up gradation and provision of sports facilities

Support to local community and economy-

39
Local people skilled/semi-skilled workmen are recruited through local
employment exchange. CGL has utilized the industrial land of Madhya
Pradesh Government in the industrial development of the state. This
generated so many job opportunities for local and outside talents and
boosting the employment.
It also imparts vocational training to large number of student every
year. Unit supports educational institutions, which impart quality
education.
CGL has taken number of initiatives to improve the living standards of
people in rural area.
Facilities provided are-
• Basic Infrastructure like Road and drinking water.
• Primary schools in which children receive education.
• Furniture provided to these schools
• Provision of Hand pumps in schools, clothes and study material for
school children.
• Adult literacy centers
• Arranging medical camps.
• Provision of solar lights and fans.

SOCIAL DEVELOPMENT
• Support for social development is also provided.
• “Ladies club” runs a weaving center, Masala Kendra, Printing and
Typing Center and School Of Computer Education (SCE), which
provide employment to poor families.

ENVIORNMENT
CGL has taken certain initiatives such as
• The company has developed an offers product in the area of non-
conventional and renewable sources of energy like Wind electric

40
 generators, solar photovoltaic systems, solar heating systems and
solar lanterns.
• Crompton Greaves Ltd has bagged the prestigious "GREENTECH
GOLD AWARD 2007" in the Engineering Sector. This award is for
Environmental Management systems for Green Products and Process
Technologies developed at CG.

MEDICAL AND WELFARE

• CGL provides medical facilities at its manufacturing divisions, that
are a great help to the local society.
• Unit also provides medical assistance in running of dispensaries.

SPORTS
• Sports club is the key agency for all sports activities at CGL.
Sports club also conducts Cricket Matches with different teams
comprises of technicians, executives, managers, etc.

TECHNOLOGICAL FACTORS

The transformers division of Crompton Greaves began operations over

60 years ago with their first supply to the US Army. The initial inputs
for technology came from collaborations with Brush Transformers and
Hawker Siddeley Power Systems of U.K. The company then forged a
technology arrangement with Westinghouse Electric Corporation U.S.A.
for transformers of up to 400 kV to serve international demand. The
Transformer Division is the highest exporter of Power Transformers
from India, a position it has maintained consistently since 1997-98.
Exports of the division amount to over 50% of the total transformer
exports from India! Products of the Transformer division are exported to
over 40 countries worldwide. The Crompton Greaves Transformer

41
division is known for its wide range, reliable designs, excellent
materials and globally benchmarked manufacturing practices.

Crompton Greaves is among the very few companies worldwide that

designs and manufactures the widest range of Power & Distribution
Transformers and Reactors from 160kVA to 415MVA, 500kV Class to
fulfill the specific demands of the Power & Industrial sectors and the
Railways. With an installed base of over 120 million kVA in
Transformers, Crompton Greaves has emerged as the largest Indian
supplier of a wide range of Transformers and Reactors for all critical
applications. These Transformers and Reactors find use in industries
such as Power Utilities, Process Industries, Railways, Mines, Electricity
Boards, Industrial users etc in both the Domestic as well as Global
markets.

Few of the great achievements are as follows:-

- Crompton Greaves is the manufacturer of the largest rating of power
transformer - 320 MVA - to leave Indian shore.
- Crompton Greaves received the first India Power Award for its 800
KV class transformer, it is being the first Indian company to
manufacture the transformer of 800 KV class.

42
 MICRO ENVIRONMENT
COMPETITORS

S.No NAME

1 ABB
2 BHEL
3 Areva
4 Telk
5 Bhart Bijlee
Ltd.
6 EMCO
7 Voltamp
8 Kirloskar
Electric
9 Siemens vijai

Competition and Its profile

The most important factor for a company entering into any field is
to understand the business environment as well as the competitive
environment prevailing in the segment. Thus the competition has
been divided into two segments
• Domestic
• MNCs
The equipments manufacturers are listed in the form of the products
they manufacture mainly in the following categories of –
• Distribution Transformers
• Switchgears
• Multi-product companies

Major Customers
The main customers in the segment have been segregated into three
distinct categories. These are

43
1. State Electricity Boards (SEBs)
2. Central Public Sector Undertakings (PSUs)
3. Public / Private Industries

44
 METHODOLOGY

For formulating marketing strategies, it is imperative to understand the

concepts of marketing management with specific reference to
industrial marketing for Industrial Product.
It is also necessary to understand the concepts of strategic management
with particular reference to marketing strategy. Also it is an
essential requirement, to understand the electric power scenario
and the reforms being carried out in this sector in India as
compare to elsewhere in the world the literature survey was
carried out by reviewing the books and articles of renowned
authors to built up the frameworks for formulation of marketing
strategies for providing right solutions in terms of right product.

Primary data collection has been done by questionnaire method

undisguised, structured form. Sample Customers were taken from
existing and prospective users State Electricity Boards (SEB’s),
Industries, Contractors, Consultants and Independent Power Producers
(IPP’s). The data collected was analytically examined. The responses
were categorized on the various variables that affect the buying
behavior of the organization. The factors determining customer
satisfaction, which affect repeat purchases, were also critically
examined.

Questionnaire
The questionnaire is designed with close-ended questions only.
While designing the questionnaire, a wide range of parameters has been
given due considerations. The questions have tried to probe the various
clients on the basis of factors influencing purchase and satisfaction.
The questions have been mostly objective with multiple options. The
various characteristics are rated on the basis of importance and weight

45
age given in the decision process.
Some questions have been designed so as to obtain relevant
information of the profile and nature of the company.
The details of the Questionnaire are placed in Annexure and the
response is analyzed.

Secondary data collection has been done by referring to CGL journals

and brochures, Indian Electrical and Electronics Manufacturers
Association's (IEEMA) monthly journals, IEEMA production figures,
National Power Plan (1997-2012), and compilation of Notice Informing
Tenders (NITs).
A study was made on the market scenario, market identification of
turnkey solution concept, identification of the competition and the
customer.

SAMPLING

The sampling process considered to interview /gets the response from at

least one respondent from each customer segment. The samples are
chosen such that the samples are involved in this type of business
activity and are aware of the various facts of transformer purchase to
give correct opinion.
The study was conducted and the respondents were mainly from the
commercial and engineering department. The study was conducted
during the period of Sept’08 to Nov’08.
The personal interviews were conducted with respondents from NTPC
Ltd., State Electricity Board (SEBs), Bhushan Steel Ltd. & ABB Ltd.
This ensured a great variation in terms of respondent that included
actual customers and policy makers.

SAMPLE SIZE

46
The sampling units under consideration are the senior executives of
various companies.
The sample size taken was 50.

47
 LIMITATIONS OF THE STUDY
The research has been carried out under the following
constraints: -

- The time period of the research is very small.

- The sample size collected for the research work is
insufficient.
- The questionnaire is subjected to error.

Research was confined to a limited field. So the finding cannot be

applied universally.

48
 MARKET CAPACITY OF TRANSFORMER MANUFACTURER IN
INDIA

A major part of the transformer manufacturing capacity of India is

contributed by the major players like BHEL, CGL, ABB, Areva, etc.
The details are as under:-

Crompton Greaves
Ltd. 30000 MVA p.a.
BHEL 25000 MVA p.a.
ABB 17000 MVA p.a.
Areva 15000 MVA p.a.
EMCO 12000 MVA p.a.
Bharat Bijlee 7000 MVA p.a.
Voltamp 5000 MVA p.a.
Telk 3000 MVA p.a.
Whereas the total transformer manufacturing capacity of India in
MVA is approx. 200000 MVA p.a. CGL is one of the highest MVA
producer in India.

MARKET SHARE OF TRANSFORMERS SALES

45%
40%
35%
30%
25% Power Transformer
20% Distribution Transformer
15%
10%
5%
0%
Areva

Telk

Kirloskar
Crompton
BHEL

EMCO

Kanohar
Voltamp
ABB

Bharat

Others

The above are the market share captured by some major transformer
manufacturers.

49
 CGL AVERAGE TURNOVER
OF
POWER & DISTRIBUTION TRANSFORMERS

AVR. TURNOVER OF CGL TRANSFORMERS (Rs.

Crore)

1200
1000
800
Rs. Cr.

Power Transformer
600
Distribution Transformer
400
200
0
2004-05 2005-06 2006-07 2007-08
FY

The average turnover of CGL has risen considerably from 465 Crore
(Power & Distribution Transformers) in the period of 2004-05 to
1265 Crore (Power & Distribution Transformers) in the period of
2007-08.
CUSTOMER SEGMENT

SEB’s 38%
Utilities 42%
Industries 20%

50
 CUSTOMER SEGMENT

SEBs
Utilities
Industries

CGL caters to the customers in various segments. 38% of the supplies

are to the State Electricity Board’s (SEB), followed by 42% to various
Utilizes like NTPC Ltd., PGCIL, etc. It caters to Industries by 20% of
its supply.

51
PRODUCT MIX

Power Transformers 60%

Distribution 40%
Transformers

Power Transformer
Distribution Transformer

CGL has a diverse product mix. 60% of its products that are
manufactured are Power Transformers. The other product is Distribution
Transformers in the ratio of 40% respectively.

CUSTOMER CRITERION FOR VENDOR SELECTION

Quality 24%
Price 23%
Delivery 18%
After Sales 20%
Service
Brand Image 15%

52
The results in the chart clearly marks that customer wants the best
quality at best prices. The quality and price are the front-runners at 24%
and 23% respectively followed by After Sales Service and the delivery.

Brand Image Quality

15% 24%

After Sales
Service
Price
20%
Delivery 23%
18%

The customers are not interested in the brand image in the industrial
purchases.

PRODUCT QUALITY RATINGS OF COMPANY

BHEL 21%
CGL 21%
PRODUCT
A B B QUALITY RATING
20%
Areva 20%
22% EMCO 18%
21%
21%
20%
20%
19% Series1
19%
18%
18%
17%
17%
Crompton BHEL ABB Areva EMCO
Greaves
Ltd.

53
Customers perceived quality as the most important criteria. The
respondents have rated the product-performance of major equipment
suppliers. It has been observed that 21% respondents have rated BHEL
& CGL with the best quality of products. It is closely followed by ABB
& Areva at 20% .Quality of EMCO has not been up to the mark.

Customers perceived quality as the most important criteria. The

respondents have rated the product-performance of major equipment
suppliers. It has been observed that 21% respondents have rated BHEL
& CGL with the best quality of products. It is closely followed by
AREVA & ABB at 20%.Quality of EMCO has not been up to the mark.

54
 PRICE COMPETITIVENESS OF
COMPANIES

BHEL 19%
CGL 22%
ABB 21%
Areva 21%
EMCO 17%

PRICE COMPETITIVENESS OF COMPANIES

25%

20%

15%
Series1
10%

5%

0%
Crompton BHEL ABB Areva EMCO
Greaves
Ltd.

The company who can offer best quality at affordable prices often turns
out to be a winner. It has been observed that 22% respondents have
rated CGL for offering best quality at affordable prices; followed by
AREVA & ABB at 21%, then BHEL at 19% and at the end EMCO 17%
respectively

55
 FINDINGS

Market Share- A major part of the installed transformer capacity of

India is contributed by the transformers supplied by CGL i.e. every 7 th
transformer in the country is a CGL make transformer. High market
share is due to customer’s confidence in our reliable products and
services. However many international players entered in the Indian
market like ABB, Siemens, Areva and many more to come, CGL is ready
to face & counter future competition by continuous up gradation in its
technology & services. In spite of such stiff competition, CGL has
maintained increasing order book position and has increasing turn over
values.

Purchase Methodology- All the customers prefer to purchase through

tender as indicated by over 100% of the respondents.

Funding Procedure- Majority of the customers are funding the projects

from the domestic funding or own funds i.e. 35%; next way preferred is
through World bank/ADB i.e. 28%; others are financial institutions
which is 24% and ECB 13%.

Decision time- The responses received takes 3 to 6 months as the

products being purchased are generally costly and through tenders
however sometimes, responses received takes more than 06 months.

Buyer selection procedure- The suppliers were selected on the basis of

tender and order being given to the lowest or the chosen one, ho provide
best quality in cheaper prices.

Buying Frequency- The buying frequency indicates that there is no

set pattern followed by the SEBs / Utilities / Industries in the pre-
reform era and the equipments were procured as and when required.

56
Competition- The results indicate a mix response with likely increase
in competition.

Rating of various attributes of products- The results in the chart

clearly marks that customer wants the best quality at best prices. The
quality and price are the front-runners at 24% and 23% respectively
followed by ‘After Sales Service’ and the delivery. The customers are
not interested in the brand image in the industrial purchases.

Rating of the companies in terms of quality- Customers perceived

quality as the most important criteria. The respondents have rated the
product-performance of major equipment suppliers. It has been observed
that 22% respondents have rated CGL with the best quality of products.
It is closely followed by BHEL at 21 %, ABB at 20% & Areva at
19%.Quality of EMCO has not been up to the mark.

Rating of the companies in terms of price- The Company who can

offer best quality at affordable prices often turns out to be a winner.

It has been observed that 22% respondents have rated BHEL for
offering products at high prices; followed by CGL at 21% ,then ABB at
20% and at the end Areva and EMCO at 19% & 17% respectively.

57
 RECOMMENDATIONS

- The study and the analysis of the data tell about marketing strategy
for the transformer manufacturers. Thus, we need greater emphasis on
the following areas:
• Increasing market share - Aim to increase penetration especially
in distribution transformers.
• Price Competitiveness - to meet the levels of the small
transformer suppliers.
- The above can be achieved through: -
1. Greater participation in the distribution transformer.
2. Pre tendering activities to help customers developing
specifications.
3. Increased level of public relations with the customer.
4. Updating the customer with the new technologies by conducting
studies.
5. Improving the flow of information and speed of response towards
the customer.
6. Effective competitive prices and delivery schedules.
7. Awareness about the market development and competitor strategies.
8. Lowering the Inventory of Spare parts i.e. effective material
management.
9. Providing better After Sales Services to the existing customers.

58
 CONCLUSION

I was given the opportunity to do my project in the CGL, which is

the largest transformer manufacturing enterprise.

To conclude this project report, it can be said that the company

holds a good market share and is managing well, even when there is
a cut-throat competition in the market.

The study reveals that the company has entered into the technical
collaboration with many international firms through acquisitions.
With the increasing competition, company has improved their
performance in services and provide prompt after sales services.

A study on, the factors affecting the marketing environment of the

company also helped in knowing the impact on economic, political,
social & technological aspects of the firm.

Firm has got a large network of customers and thus helped in

knowing their perception about the firm’s product quality, price,
reliability and delivery.

Overall, it was a great experience to work with such a company who

has an excellent marketing strategies and ideal sales/marketing
network.

59
 BIBLIOGRAPHY

INTERNET

www.powermin.nic.in

www.google.com

www.cea.nic.in

www.cglonline.com

www.indiainfoline.com

MAGAZINES & JOURNALS

Powerful Power Law, IEEMA Journals.

National Electricity Policy, IEEMA Journals.

Annual Report 2006-07, Ministry of power Powerline

CGL Annual Report 2007-08

60
 ANNEXURES

QUESTIONNAIRE

1. S e c t o r t o w h i c h y o u r o r g a n i z a t i o n b e l o n g s

• Government
• Semi government
• Industrial sector
Private

2. What is your line of activity in electrical industry

• Transmission
• Distribution
• Generation
• IPP
• Any others (please specify)

3. Type of electrical equipment usually required/dealt by you

• Power Transformers
• Distribution Transformers

4. How do you route your purchases?

Alway Mostly Very Someti Neve

s often mes r
Tender
notification
through
press
Involved
consultants
Any other
please
specify

61
5. How do you finance your purchases?

Always Mostly Very Sometim Never

often es
External
commercial
borrowings
World
bank/ADB/O
EC funded
Owned
finances
Financial
institution
in India
Like IDBI,
PFC etc
Any other
please
specify

6. Your standard terms of payment

Alway Mostly Very Sometime Never

s often s
Allow for
release
advance
Payment
Pro-rata
release as
per supply
Through
letter of
credit
Through
banks/finan
cial
institution
(IDBI etc)
Any other
please
specify

62
7. What is your buyer selection procedure?

Alway Mostly Very Someti Never

s often mes
Tenders,
Selection on
basis of
prices
Tenders,
selection
after
negotiation
Negotiation
with the
short listed
manufactur
ers
Distributive
buying
from more
than one
party
Any other
please
specify

8. What is your buying pattern?

• Annually

63
• As and when required
• Once in 2 years
• Any other please specify

9. What is your vendor selection procedure?

• As per pre-qualification
• Past experience of supplies given to you
• Reference list of the vendor
• Brand image

10. Competition level after reforms in the distribution sector

• No change
• Increased competition from global players
• Emergence of new image of existing players in this field

11. Companies with which you have executed business

• Crompton greaves ltd (CGL)

• Bharat Heavy Electricals ltd (BHEL)
• ABB
• Areva
• EMCO
• VOLTAMP
• Kirloskar
• Any other please specify

12. Your rating various attributes of products

1 2 3 4 5
Quality
Price
13. Y
Delivery ou
After sales r
service
Brand
image
rating of the following companies in terms of quality

1 2 3 4 5
CGL
BHEL
ABB

64
 AREVA
EMCO

14. Your rating in terms of pricing the product

1 2 3 4 5
CGL
BHEL
ABB
AREVA
EMCO

15. What had been the response time of the suppliers dealt by
you?

• Immediate
• Within a fortnight
• Within a month
• After a month

16. T o t a l d e m a n d e x p e c t e d i n t h e d i s t r i b u t i o n & p o w e r t r a n s f o r m e r
business in the next five years.

• 1000crs
• 2000crs
• 3000crs
• 4000crs
• 5000 Crs
• 6000 crs

17. Technology

 CGL’s technology is outstanding

 CGL’s technology is very good
 CGL’s technology is good
 CGL’s technology is average
 CGL’s technology is poor
 CGL’s technology is very poor

18. Service after sales: How will you rank the following

65
 Outstandi Very Good Averag Poo Very
ng or good e r poor
expensive or
chea
p
Promptness
of response
Problem
repairs
Technical
competence
Promptness
of response
Timely
delivery

19. How will you rank CGL for its range of transformers

Wide Inadequat

20. C o n t r i b u t i o n o f C G L i n N a t i o n a l e c o n o m y

 High
 Moderate
 Low

21. Customer retention

 Major strength
 Minor strength
 Neutral
 Major weakness
 Minor weakness

22. H o w w i l l y o u r a n k CGL for providing the complete and

accurate invoices?

Complete Incomplet
and e and
Accurate 66 Inaccurate
67