Mornings best enjoyed fresh with

Kitchen Appliances
Presented by: Group 6, S5 Aprajita Aparna Sahay (12DM-034) Inderjeet Singh(12DM-059) Retika Bhat (12DM-120) Vineeth R Tengse(12DM-169) Bivojit Samanta(12FN-037) Mayank Malhotra(12FN-073) Shreya Trivedi(12HR-030)

Agenda
Kitchen appliances industry in India Havells: Brief History Market Scenario Havells Kitchen appliances Product portfolio Physical flow Channels Channel management decisions Competitor Analysis Perceptual Map

Kitchen appliances industry in India

Purchasing Power

Effective cooking modes

Purpose driven

Value options Price Plus

Most emergent market

Handy Time saving

Havells: Brief History

Havells India Ltd was incorporated as Havell's Pvt Ltd in August 1983 and converted into a public limited company in March 1992. It started its operations by producing miniature circuit-breakers and distribution boards

They entered into a technical collaboration with Christian Geyer, Germany, to manufacture miniature circuitbreakers in India. In order to manufacture ELCBs, the company entered into technical collaboration with Schiele Industriwerke, Germany

They continued their expansion by acquisitions and ventured into switchgear, cables, CFLs, lighting fixtures, consumer durables, Electric water heater, etc

In August 2011, Havells launched its range of kitchen appliances. The business is synergetic to consumer durables and will get benefit of Havells brand which has huge acceptance in fans and geyser market.

Market Scenario
50 45 40 35 Rs.4000 Crore market. Rs 2700 crore is branded market 30 25 20 15 10 Fastest growing segment was the Premium segment which grew by ~ 40% FYI 2012 saw a 16% increase in revenue. Volume growth was 10.6% 5 0 2008 2009 2010 2011 Bajaj Philips Braun Lexus Inalsa Nova Maharaja Morphy Richards Others

Sales
Bajaj Premium category makes up about 10% of the kitchen appliances market Dominated by unorganised segment which has a share of 40% 47.6 15.4 8.6 6.9 6 5.3 Philips Braun Lexus Inalsa Nova Maharaja Morphy Richards 2.3 3.2

4.8

Havells Kitchen appliances

Launch Availability
August 2011 Premium Segment with competitors like Bajaj , Philips, Morphy Richards, Black and Decker Products were initially sold in top 40 cities through 4,000 electrical goods outlets and through Havells exclusive Galaxy stores

Market Share

Targeted a market share of 5% by 2014. Has achieved a market share of 4% in Delhi and 2% in India.

Havells

Electrical Consumer Goods

Cables

Switchgears

Lighting and fixtures

Fans, Dry Iron, Geyser

Kitchen appliances

Cooking

Brewing

Food preparation

Product Portfolio

Pop-up Toaster Sandwich Maker Oven Toaster Griller Electric Cooker Induction Cooker

Juicer

Kettle Coffee Maker

Mixer Grinder Juicer Mixer Grinder Blender Chopper

Mornings best enjoyed fresh with

Physical flow

Manufacturing Unit

Mother Warehouse

Warehouse

Godown

Outlets

Channels
Exclusive stores (Galaxy) Modern Trade Multi-brand (Croma,reliance digital) Traditional trade Direct servicing

Havells

E-tailing

flipkart,etc

Number of intermediaries
Galaxy Exclusive Stores
Manufacturer

Traditional trade
Manufacturer

Distributor

Dealer
Retailer

Consumer

Consumer

Galaxy stores

Investment

Land and store construction/rental Interior design and decoration Maintenance Manpower No monthly franchise fee

Assistance by Havells

The colour scheme followed is red and white. The ceilings are Armstrong in colour The tiles used for flooring are Kajaria tiles. The outlay of product placement is given to the dealers. The lighting is also done uniformly across all the Galaxy stores in India. The in-store advertisements are provided by Havells

Operations

15 verticals. Margins vary from 3% to 30%. Avg of 5%-6% Goods are sent directly from its warehouse Two channels to place orders: Sales rep and Online portal Kitchen appliances are sold at MRP. They give a margin of around 20%

Galaxy Interiors

Distributor List Price and Max Retail Price

Traditional trade
No wholesalers
Distributor-cum-Retailer in less densely populated areas

2 distributors in West Delhi and 1 in East due to varying population density

Products sold at prices lower than MRP

The margins that earned are around 20%

CHANNEL MANAGEMENT DECISION

Selecting Channel Partners

Distributor
Financially strong so that he can make an initial investment of 35-40 lakhs Strong network of retailers in his territory

Dealer
Location
Footfalls

Growth and Profit record

Future Growth Potential

Terms and responsibilities of Channel Partners

Price policy
Price list, schedule of discount Distributor List Price which is generally 25-30% lower than the MRP

Credit Period

Cash Discount

Conditions of sales Mutual services and responsibilities

10 days
30 days 45 days

3%
1% No discount

Distributors: Mostly in the terms of setting of monthly targets and its achievement Dealers: Assistance in store setup. Min ROI of 5%. Achievement of Sales targets

Promotional schemes
Quantity Purchase Scheme

To promote ordering of more volumes of a particular product Order of 12 pieces of Juicer-Mixer-Grinder fetches a dealer/distributor 2 additional pieces

Free of Cost

To promote selling two products Order of 8 pieces of Juicer-Mixer-Grinder receive 4 pieces of Dry Iron free of cost

Bundle

To promote two products together. If the discount available on an order of 12 Juicer-Mixer-Grinder is 8% and that on an order of 10 sandwich maker is 12%, then an order of a bundle of 12 Juicer-Mixer-Grinder and 10 sandwich maker will fetch a discount of 15%.

Loyalty scheme

Promote loyalty towards Havells Shehensha Scheme on meeting a minimum level of target, some loyalty points are rewarded and a definite number of loyalty points are equivalent to 1% FDR (Fixed discount rate). Can be redeemed either through cash on travelling or through additional discounts

Channel Conflict:
No instance of channel conflict. Tracking mechanism in place in which the Master Carton has a code mentioned which defines the territory within which the goods in the carton is meant to be sold.

Key Performance Indicators for sales

No qualitative component in assessment of sales team

Achievement of Targets has a 100% weightage in assessment.

Post sales service

Lodge a complaint at a toll free number Within 48 hours the concerned service person visits the consumer and solves the problem Consumer constantly updated about the status of his complaint via smses

Competitor Analysis
Havells Philips Premium

Philips, Black and Decker, Morphy Richards

Usha, Bajaj

Price

At least 10% higher than Philips

Warehouse Margin to distributor

Sahibabad 20%

Noida 11%

Maharaja Whiteline, Kenstar

Demand

Low

High

Perceptual Map
Steps Followed :

Market Survey

1. Analytics started by collecting consumer rating for Havells and the competitive products in competitive set (Phillips , Black & Decker, Morphy Richards, Bajaj , Usha)

2. Through a Survey , response were taken on Likert Scale with options (Strongly Agree, Agree, Neither Agree nor Disagree , Disagree and Strongly Disagree) for the possible attributes that consumer might consider. Survey Link : https://docs.google.com/spreadsheet/view form?formkey=dHYwdkxsYW53bGREWGlVY TJXTFpmMnc6MQ

Regression analysis

Havells Awareness Safe/Trustworthy 2.36 2.1

Phillips 1.53 1.89

Black & Decker 2.93 2.57

Morphy Richards 1.89 2.03

Bajaj 1.6 2.1

Usha 1.92 2.23

3. Regression analysis was conducted . 4. X-Y perceptual map was plotted based upon two parameters which were highest in value Detailed Analysis (excel sheet): Grp6(S5)_Havells Kitchen appliances_Regression.xsl

Way Ahead .. !!
Good brand recall of Havell , But need to communicate about entry in new category. Customer Target- Premium Convey Value Make POD