MARKETING ASSIGNMENT

UNIVERSITY OF BRADFORD, SCHOOL OF MANAGEMENT.

MARKETING PLAN FOR

L&T - Switchgears
MARKETING MAN 4045M. FT ACC MBA 2010

STATEMENT OF AUTHENTICITY: I certify that this assignment is the result of my own work and does not exceed the word count mentioned below. Word Count: 3559
(Excluding references, bibliography, graphs, tables and titles)

MARKETING ASSIGNMENT

Contents
EXECUTIVE SUMMARY: ................................................................................................................................. 4 BUSINESS MISSION: ...................................................................................................................................... 4 EXTERNAL MARKETING AUDIT: ..................................................................................................................... 5 Macro Environment: ................................................................................................................................. 5 Political:................................................................................................................................................. 5 Economic: .............................................................................................................................................. 6 Technological: ....................................................................................................................................... 7 Legal: ..................................................................................................................................................... 7 Micro Environment ................................................................................................................................... 8 The Market:........................................................................................................................................... 8 Distribution of Consumers: ................................................................................................................... 9 Porters Five Forces: ............................................................................................................................. 10 Internal Marketing Audit: ....................................................................................................................... 12 Operating Results:................................................................................................................................... 12 Strategic Analysis: ................................................................................................................................... 14 Current Marketing Objectives:............................................................................................................ 14 Market segmentation: ....................................................................................................................... 14 Competitive advantages: .................................................................................................................... 15 Positioning: ......................................................................................................................................... 16 Marketing Mix Effectiveness:.................................................................................................................. 17 Marketing Structures: ............................................................................................................................. 18 SWOT ANALYSIS: ......................................................................................................................................... 18 Strengths: ................................................................................................................................................ 19 Weakness: ............................................................................................................................................... 19 Opportunities: ......................................................................................................................................... 19 2

MARKETING ASSIGNMENT Threats: ................................................................................................................................................... 20 MARKETING OBJECTIVES: ........................................................................................................................... 20 Strategic Thrust: ...................................................................................................................................... 21 Market penetration: ........................................................................................................................... 21 Market development: ......................................................................................................................... 21 Product Development: ........................................................................................................................ 21 Diversification: .................................................................................................................................... 22 Strategic Objectives: ............................................................................................................................... 22 CORE STRATEGY: ......................................................................................................................................... 23 Target Markets:....................................................................................................................................... 24 Competitors Market:............................................................................................................................... 25 Competitive Advantage: ......................................................................................................................... 25 MARKETING MIX DECISIONS: ...................................................................................................................... 26 BUDGET: ...................................................................................................................................................... 27 ORGANIZATION & IMPLEMENTATION: ....................................................................................................... 28 CONTROL:.................................................................................................................................................... 29 REFLEXIVE ACCOUNT: ................................................................................................................................. 30 Why L&T EBG Switchgear division? ..................................................................................................... 30 Highlights: ............................................................................................................................................... 30 Practical vs. Theoretical: ......................................................................................................................... 30 References: ................................................................................................................................................. 31 BIBLIOGRAPHY: ........................................................................................................................................... 33 Appendix: .................................................................................................................................................... 33

MARKETING ASSIGNMENT

TERMS OF REFERENCE: Larsen & Turbo (L&T) operates as leading Engineering, construction and manufacturing company based in India. It has six divisions namely Engineering & Construction Projects, Heavy engineering, Construction, Electrical & Electronics (EBG), Machinery & industrial Products and IT Services. This report concentrates on the Switchgear section of EBG division which contributes to 1000 crores INR to the total revenue. This report would be formulating a marketing plan for Switchgear division of L&T in the Indian market. EXECUTIVE SUMMARY: The marketing plan analyses the Switchgear industry in INDIA and identifies key growth Opportunities for L&T. The analyses are done in the following way: Macro environment factors directly affecting the company short run and long run. Micro environment factors analyzing the strengths and weaknesses of the competitors and substitutes. Current marketing objectives, competitive advantage, core competence and positioning of the company using various marketing tools. Putting it together under the SWOT analysis. In order to gain growth and market share, following strategies are recommended: Extension of the product basket Medium and high Voltage switchgears. Focusing on micro segments of the Market to improve concentrates sales such as Infrastructure, Residential sector, Industry, Power plants etc. Pricing strategy special prices for projects, bundling of products to create better prices. A manger to liaison between operating divisions of L&T to create synergy and generate internal business. To generate loyalty among customers thro schemes and giving turn over discounts etc.

BUSINESS MISSION: L&T is in the business of manufacturing Low voltage Switchgears. Its business vision is to be entrepreneurial in bringing innovative class electrical products, thereby attaining customer satisfaction and to create value for its shareholders and meeting expectations of the employees, Stakeholders and society at large. It also aims to continuously learn and attain benchmarks in all its products. (L&T.com, 2010)

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EXTERNAL MARKETING AUDIT: Macro Environment: Political: Power Generation: Government of India has launched an initiative in response to the rising demand of electricity by allowing Public-Private Partnerships in the power sector. Power generation capacity is presently 144584MW and expected power to be produced by 2012 is 200,000 MW. This is expected to double by 2020, an opportunity for the Switchgear Companies.( Ministry of Power, India 2010) With Government of India opening up Ultra Mega Power Projects (UMPP) for private investments, a number of APDRP projects and rural electrification, a number of private companies have been increasingly showing interest in investing in power projects. Increase in Power generation is proportional to the increase in Switchgears Market. Effect: Opportunity FDI Policy: India's liberalized FDI policy allows up to a 100% FDI stake in ventures and there is no cap on the project cost. According to the UNCTAD World Investment Prospects Survey 200709, India emerged as the second most favoured FDI destination after China (Market line 2010). Industrial policy reforms, creation of Special Economic Zones have increased easy access to foreign technology and has created amicable situation for FDI. This has been even substantiated in the current Budget 2010-2011.Hence manufacturing industries in India is increasing substantially which in turn increases the need for Power

and switchgear. 5

MARKETING ASSIGNMENT Effect: Opportunity. Economic: The Indian economy has witnessed robust growth of approx. 9% in the last 3 years. However, the global economic downturn has caused GDP growth to decline to 6% in 2009 which is still better during the time of recession as per the Global standards.

. The GDP is thereby predicted to increase in the years to come The increasing disposable income raises the standard of living, increasing consumption of powered appliances such fridges, AC, Washing Machines etc. hence creating a demand for Power and ultimately Switchgears. The present per capita consumption given below is expected to grow sharply.

Effect: Opportunity

MARKETING ASSIGNMENT

Recession: The recession wave felt across the country has put credit constraints on expansion projects, up gradation of Power systems, electricity distribution etc. Many Companies as well have placed a cap on the Budgets, not to expand during the time of recession. The interest rates has also increased causing undesirable effect on the companies which want to expand as well to the companies which are entering into the country. Effect: Threat. Technological: Technology is becoming more advanced everyday and intelligent MCC and devices introduced in the market and the more electrical devices are getting upgraded to Electronic devices. The old technology is eradicated i.e Fuse is been replaced by the switching (Tripping) devices such as the MCB, MCCB etc. Steve Lane who invented the principle of the modern day magnetic actuators mentions New designs of switchgear will evolve, designed from scratch with every component as simple and reliable as possible to capitalise on the potential of the magnetic actuator mechanism to be as trouble free as the latest interrupter technology. World energy consumption has risen by 45% since 1980 and it is projected to increase by another 70% by 2030. (Schneiderelectric.com). the simple and powerful solution is intelligent energy efficiency. Therefore it is a threat to many existing products but definitely a challenge for the R&D to keep up the pace with changing technology in making energy efficient switchgear. Effect: Threat Legal: Heavy penalty is laid by the State electricity Boards on industries which do not maintain unity power factor resulting in most industries to implementing reactive power management which involves the Capacitors and the Contactors. Effect: Opportunity. 7

MARKETING ASSIGNMENT Micro Environment: The Market: The total Switchgear Market is $1600million and is expected to grow 2.5 times by 2020(Foster and Sullivan, 2009). This is just the low and medium voltage switchgear products. The detailed split is given below.

Switchgear Market in India

4173.2 4500 4000 3500 3000 2500 2000 1500 1000 500 0 2007 2008 Year 2020

1600 1360

$(Millions)

2007 1360M Switchgear Split-up:

Switchgear Total Market in India Present 2008 1600M(8099Crores)

Projected 2020 4173.2M

Medium Voltage 47% Low voltage 53% Source: Frost and Sullivan, 2009 The Switch gear Market is expected to grow every year and rapidly to 4173.2M in 2020 (Frost & Sullivan, 2009) while the high voltage switchgear market is supposedly to be growing because of the renewable energy. L&T Market share in the Low voltage Switchgear Market is almost about 19% of the low voltage switchgears.

MARKETING ASSIGNMENT This information was made available since I worked in the same industry.

Switchgear - Market Share

Others 22%

L&T 19%

L&T Siemens Schneider

GE 8%

Siemens 19% Schneider electric 11%

ABB GE Others

ABB 21%

Source: (Rajesh, Assistant Manager, BCH Electric, 2010) As far the Medium voltage is concerned except ABB and Siemens and some products of Schneider all other are small local players. The biggest segment of business is held by ABB and Siemens. Generally, switchgear Market is B2B and sometimes B2C.The below distribution chart shows the customer base of Switchgears. Distribution of Consumers:
S.No Type Comments

OEM Original equipment manufacturers

OEMs buy the switchgear to integrate into their design; equipments they manufacture. They are one of the biggest consumers of switchgears and they are the biggest assets for repeat orders in the market. Once they have found that the switchgear is a fit and forget experience in their equipments i.e. application they generally continue to buy. They build Panels with the switchgear and control gear based on logic and as per the functions they require. They work on different projects from various firms and they too buy Variety of Switchgear in Bulk case to case.

Panel Builders

MARKETING ASSIGNMENT SI is basically appointed by the Switchgear companies as their representatives who does work on the companys behalf as the capacity of the mother company gets piled. They work on small tenders and the Switchgear Companies themselves give tasks to these integrators to get the job done at faster pace. The Dealers generally are located all across the country and do counter sales. They hold the stock for the Switchgear Companies and sell when replacements, Spares else products are required r locally. This is basically a customized product specifically designed for that particular company or a general product. A rate contract is signed for the same based on the annual quantity required which is usually scheduled.

System Integrators

Electrical Dealers

Key accounts/ Projects

Porters Five Forces:

(Source: whatmakesagoodleader.com, 2009)

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MARKETING ASSIGNMENT

The Power of Buyers

1.Buyers Power in the market can be termed as moderate to high.
2.Buyers are price sensitive and have various options because of high competition. 3.Switching to Competitors is not high 4.Major(Project - one time) and repeated buyers tend to have a high negotiating power. 5.However sometimes buyers cannot make independent decisions. They are bound to buy certain companys switchgear,which is recommended and insisted by the consultants else recommended by the ultimate user specifications.

The Threat of New Entrants

1.The threat of new entrants is moderate. 2.The Entry barrier is not high but the switchgear industry is entering the maturity stage, some more MNC players are expected. 3.It is difficult to attain economies of scale and there are plenty of small players in Low voltage while in Medium and high voltage there are only two major players such as ABB and Siemens. 4.Brand identity of L&T is created over 40 years which is hard for any new company to replace new entrants in the market. 5.Strategic locations of manufacturing sites and excellent distribution channels of L&T are hard to be replicated.

The Power of Competitors

1.Competition in the Market can be termed as high as there are plenty of players who want to have a market share. 2.ABB has a wide range of switchgears and have established them strongly especially in the Sugar, Distillers, and Wind mill industries. 3.Schneider Electric, the French firm has established in the last eight years and now strong with their Contactors and relays. 4.Siemens is known for its quality products have a wide range of consumer base. 5.GE is known to be very aggressive in pricing strategy is now loosing its ground and has even closed its operations in its factory at Pondicherry following low asset utilization and is loosing its market share.

The Threat of Substitutes

1.The power of substitues is low. 2.Duplicates or look-alikes are the biggest threat in the Market which still remains a challenge.

3.There are no other substitutes for the switchgears unless the company wants to spend a lot more money and make things work electronically rather than electromechanically.

The Bargaining power of Suppliers:

1.The raw material-Metal suppliers of copper and steel which are unique and there are not many suppliers and hence it makes the power of suppliers strong. 2.Otherwise the Product is standardized and the customized raw material using dyes and other raw materials is not unique and is not expensive.

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MARKETING ASSIGNMENT Internal Marketing Audit: Operating Results: L&T overall Performance

Source: Larsentubro.com Electrical and electronics segment: EBG Performance 2007-08 Gross Revenue EBITDA / Revenue % Export Earnings 2663 15.8 290 2067 15.9 170 (In Crores) 2006-07 2005-06 1582 15.5 140 2004-05 1220 12.7 97

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MARKETING ASSIGNMENT

Source: Larsentubro.com, 2009 L&T Switchgear division:

2008 In INR - Crores 1259 2009 In INR - Crores 1242 2010 till 01/03/10 In INR - Crores 1330

Source: email from Mr. Abbas ,GM ,C&S electric (Primary source) The electrical & electronics division recorded revenues of INR24, 850 million (approximately $617.3 million) in FY2008, an increase of 39.5% over 2007 (Market line). The total gross revenues of the E&E segment in 2009 was close to 28 million and the switch gear division reported close to 1242 crores INR. In 2009 the growth was hindered by the Global recession and many of the companies had put a hold on their expansion projects and some have even cancelled because of which the revenues have not grown as expected. As per the latest information as the financial year ends this march 2010 the revenues have gone up and till 1st of march 2010 it is 1330 crores which is a close to 7% with another 31 days to go. L&T expects to grow close to 8-9% which is a good sign that the market is stabilising. The margins they are making are good as showed in the early chart.

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Strategic Analysis: Current Marketing Objectives: a. Expanding Product Basket: L&T is currently focussing on expanding from Low voltage into medium voltage Switchgear and as a result of that has acquired TAMCO. b. Customer Friendliness: To provide expert assistance in product selection, specification and effective post-sales service through a wide network of service centres .(L&T.com) c. Establishing business partners: L&T is adding new dealers in the country so that their presence is spread nationwide ensuring the availability of its products in every nook and corner with speedy deliveries to the customers. Market segmentation: Segmentation on the basis of customer groups:

L&T Switchgear division

OEM Original Equipment Manufactuers INDUSTRY AGRICULTURE BUILDING UTILITIES

L&T has divided its segments into different divisions as above and the below segmentation provided is based on the Products hierarchy. There are different products under each category. Segmentation on the basis of Products: Control gear Power gear Motor starters Agriculture starters and products MCCB MPCB Reactive power Management Capacitors 14

MARKETING ASSIGNMENT Drive systems

Competitive advantages: L&T has invested huge amounts of money in R&D to innovate new products and cost effectively; but the competitive advantage of L&T is the cost aspect. It is the cost leader and dictates the Switchgear market. The brand image it has built over the last 40 years through its finest products has made it to sustain as well. (Refer appendix for analysis on the Prices) COMPETITIVE BASE

(Source: Jobber 2010)

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MARKETING ASSIGNMENT

Positioning: High price

Wide product range

Narrow product range

Low price

SIEMENS ABB SCHNEIDER ELECTRIC L&T

The perpetual map clearly shows the need for L&Ts Product diversification and its rest of the competitors are quite well established in quite a variety of products.

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MARKETING ASSIGNMENT Marketing Mix Effectiveness: The Products are bascially low voltage switchgear products such as contactors,relays,MCCB,MCB,Motor starters etc Majorly L&T sells as components though it has a division which customizes products and make switchboards using the Switchgear. L&T Products are limited to Low voltage and not medium voltage or high voltage switchgear

Product

Promotion

The tools that the company currently uses to promote its products are as follows. Direct Marketing sales executives Road shows for Agriculture products. Internet online website. Exhibitions

Place

40 branch offices across the country and a network of over 100 service centres to deliver after-sales-service to its customers. L&T's Switchgear training centres at Pune, Lucknow and Coonoor have state-of-the-art training facilities with well equipped workshops and testing systems. 500 authorized stockists, one of the largest distribution networks in the industry. L&T's manufacturing facilities for standard switchgear products are at Mumbai , Ahmednagar and Coimbatore. The Prices and the discounts are offered on flat basis. Dealers/Customers are provided with a credit period of 55 days whilst new Dealers are asked to pay in advance. They are also given an option of getting a cash discount of 3% for the immediate payment. This actually is a problem since the customers have access to other suppliers who are ready to give credit to new customers.

Price

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MARKETING ASSIGNMENT Marketing Structures:

Above is the Business structure but the existing Marketing structure is that under Electrical and Electronics there is single SBU for the Standard Switchgear Products. Under the SBU head are certain Segment managers who monitor the sales of their respective segments such as agriculture, industry etc. Sales engineers according to region wise are spread across and they report to the area Mangers who in turn report to the Sales Director. Presently there are no Marketing mangers for different segments though there are only sales mangers and there are no liaison managers who work between the different operating units of L&T because of which much internal orders go to other competitors. SWOT ANALYSIS:

STRENGTHS
1.A strong Brand name 2.First to Market advantage 3.Cost Leadership

WEAKNESS
1.Lack of Synergy between different vertical business units 2.Long Delivery period of certain goods

OPPORTUNITIES
1.Acquisition of TAMCO 2.Exisitng APDRP and RGGVY projects 3. Growth in Power and Infrastructure

THREATS
1.Look alikes and duplicates 2.Stiff competition 3.Loosing Meher Capacitors to competitors

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MARKETING ASSIGNMENT Strengths: A strong Brand name: L&T being in the switchgear market for the last 40 years has a strong market name. Their Motor starters has the largest market share and used by almost all farmers across the country. Even before other MNCs came into India during the early 90s L&T has established its name strongly. It had the added advantage of first to the Market. Cost Leadership: L&T comparatively to competition has the lowest prices for its products which is a key strength to the price sensitive customers especially in the times of recession. Weakness: Lack of Synergy between different vertical business units: L&T has different verticals quite diversified into construction, heavy engineering etc which requires the services from the Switchgear division. Presently there is a lack of synergy between these departments and the benefit is sucked by the competitors. The delivery period of certain good specifically takes quite a bit of time especially in the contactors area. Opportunities: Existing Projects ADRPP, RGGVY: The Present initiatives of the Government of India investing APDRP(Accelerated Power development reform programs) and the Rajiv Gandhi Grameen Vidyutikaran Yojana Scheme of Rural Electricity Infrastructure and Household Electrification which will provide power to 7.8 crore household in the next 5 years(Ministry ofPower,2009) provides even much bigger junk of Market to occupy. Acquisition of TAMCO: TAMCO Switchgears manufactures Medium Voltage switchgear products comprising Vacuum Circuit Breakers (VCBs), Ring Main Units (RMUs), Gas Insulated Switchgear (GIS) and Switchboards. TAMCO is a good platform to pursue the companys domestic and international ambitions in MV switchgear business (Market line). The combination of the Low voltage along with the Medium Voltage switchgear is giving the company an opportunity to maximize the Market share and penetrate into different segments of the Markets.

Growth In Power and infrastructure: The Power demand in the Country is fast rising along with the rise in the Indian capital goods and infrastructure industry. The growth predicted in 2011-12 is that power will grow at 60%, Roads at 100%, airports at 400%, ports by 160% and railways to witness 250% growth (Data Monitor) which provides the Company ample of Market space to occupy. 19

MARKETING ASSIGNMENT Threats: Lookalikes and Duplicates: Look likes and duplicates are increasing and is a threat to the company and as the customers have increased access to fake products rather the original. Stiff Competition: Market is growing and there is stiff competition .This makes the market more dynamic and is price sensitive. There is a stiff price war on discounts and is threat for the companies as it eat the profits of the company. Loosing Meher Capacitors to competitors L&T who held Meher Capacitors has been taken over by Schneider Electric which leaves L&T to depend on their competitors for the reactive power management (Schneider electric.com, 2009) MARKETING OBJECTIVES: The Market objectives of the company will be To target new customer base through concentrated approach via detailed segmentation Developing new medium and high voltage switchgear products to remain effective in the market and expand wide product basket. To be a one shop stop for total electrical solution provider. To liaison with its other divisions creating synergy between its other operating units.

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MARKETING ASSIGNMENT Strategic Thrust:

EXISTING

NEW/RELATED

EXISTING

MARKET PENETRATION OR EXPANSION

MARKET DEVELOPMENT

NEW/RELATED

PRODUCT DEVELOPMENT

DIVERSIFICATION

Market penetration: It is proposed that the company concentrates on its lost customers. L&T lost many of its customers because of the inception of many competitors. They should strongly focus on the lost customers to revamp its sales. As a strategy for its existing customers it should introduce the loyalty schemes and turn over discounts. Market development: It is proposed that the company markets its existing products at the same price for existing market. The new market they need to concentrate is the medium voltage market as they are new in this market. They need to have attractive prices which through which they can capitalize on the market share. Product Development: Product development is a growth strategy where L&T has to aim new products into existing markets. They need to concentrate on the new products they are acquiring from TAMCO, which are to be type tested and certified by the authorities like ERCA, CPRI. They need to be approved by leading Electrical consultancies so that their name can be inducted into the specifications and tender documents. 21

MARKETING ASSIGNMENT Diversification: The Company has realised its need to diversification and has indeed done over the past years but limited to the engineering for Industries. L&Ts main source of income is thro the ECC division which accounts for close to 70% of its revenues which is a concern. It has concentrated sales which needs to look on unto other divisions and should find ways to explore to diversify (L&T.com) Strategic Objectives: The Switchgear Market is in the early stages of Maturity. Hence the Market strategy is to be based sustained Marketing activities. The below BCG matrix will help us draw further inferences of the strategy we need to follow.

STARS

???? MEDIUM VOLTAGE SWITCHGEAR ,RING MAIN UNITS, ISG UNITS

Market growth rate

CASH COWS LOW VOLTAGE SWITCHGEAR CONTACTORS,RELAYS

DOGS

Relative market share

From Portfolio analysis L&T s contactors, relays, Motor starters and MCCB are the bread and butter of the company. These products are quite well established in the market and are generating cash flow for the company. The Star Product for L&T is its Agriculture Motor Starters in which L&T enjoys 40% of the total Market share and has clearly out performed against competition. The cash generated needs to be further invested into the growth of other different products. As clearly seen the Question mark is the Medium voltage switchgears which are in the high market share but still to achieve in the market. This needs a lot of attention as this definitely can become as the star

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MARKETING ASSIGNMENT products as the competition is only against ABB and Siemens. Hence the strategic objective is to concentrate on the medium voltage switchgears. CORE STRATEGY:

Organizational segmentation Macro segmentation

Industry

Micro segmentation

Choice criteria (Price) (Source: Jobber 2010)

The Macro Segmentation has to be on the industry basis. The need is basically to micro segment which will enable to define the target markets and the customers which when concentrated will yield good numbers as they same a particular choice criteria of price or similar usage. At the same time there should be a Manger just to liaison between different operating units because they generate voluminous business. Concentrate on Medium Voltage Switchgear to maximize the Market share.

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MARKETING ASSIGNMENT Target Markets:

Power plant Mordernisation & alernate Energy Sources

Industrial

Switchgear Division Target Markets

Commercial & Infrastructure

Utilities and Residential

Utilities Segment An additional capacity of 78000 MW is expected to be generated as a part of the 11th five year plan (2007-2012)(Power ministry of India).This expansion in India's present generation capacity is a big market for LV and MV Switchgear. GOIs Schemes such as APDRP and RGGVY is concentrating on power to villages in India.

Opportunity: LV and MV switchgear market growth with about 7.8 crore home to be illuminated. Industrial Segment India's industrial sector accounts for nearly 30.0 percent of GDP (Data monitor) and a increase in process automation in industries is expected to support push-buttons, contactors and switching/Protection relays, as well as motor control centers.

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MARKETING ASSIGNMENT Commercial and Infrastructure segment Massive investments from the private and public sector are expected to steer the growth in infrastructure segment as indicated as the opportunity above in the SWOT analysis on the infrastructure. Opportunity: RMUs, ISG, ACBs, MCCBs Market will rise as a result of this growth in the Infrastructure development Residential Segment As the GDP is expected to rise which in turn will raise the disposable income of individuals will foster the growth of the residential sector and is likely to drive the MCBs, ELCBs and MCCBs market.

Power Plant Modernization Indian Power plants are on an average age of 30 years and needs overhauling and modernization. This will benefit the switchgear market as there will ample of replacements. Power plant modernization and refurbishment is expected to support growth of the switchgear market.(World bio energy, 2010)

Alternative Energy Sources The Indian Government continues to research and invest in renewable energy sources such as wind, solar and hydroelectric power. There is already a surge of FDI in windmill area and will boost the switchgear Market. The MCCB and MCB markets are expected to benefit considerably from alternative energy expansions.(Ministry of new and renewable energy, India)

Competitors Market: The different competitors will also concentrate on the above markets and there could be new players who could join in the market. But L&T having established its name in the market for the 40 years should remain as a cost leader to maximize the market share. Competitive Advantage: The competitive advantage of the company is that it has to remain a cost leader. It has to introduce the medium and high voltage switchgear in the market to widen the product basket so that L&T becomes a one stop shop for industrial Electrical Solutions can offer the entire range of switchgear to setup the industry.

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MARKETING ASSIGNMENT MARKETING MIX DECISIONS:

As discussed about the new Medium voltage products alongside High voltage switchgear products have to be developed, certified and positioned. L&T should be able to offer Low voltage, medium and high voltage switchgear as a package. Product customization is as well expected with certain customers preferring that and it will create loyalty business and constant volumes at fixed price over period.

Product

Promotion

Direct mailers to the lost customers for feedback have to take corrective action MCB indulges among the residential market it has to be promoted in Print and in Mass media. Since most of the industries hires electrical consultant they play a important role in making decisions. Hence designated People should work closely with them and promote the Products. The online website has to have still a lot of details pertaining to the solutions that can be offered and it is the most important tool for spreading awareness amongst customers.

Place

As seen already the company has a wide range of dealers who market the product. The new challenge is to see for the expert dealers in Medium voltage and high voltage switchgear products. As explained above the target markets needs to change and greater emphasis is to be given on these areas.

Price

Volume based prices. Competitors are also willing to give higher discounts to their dealers and customers when faced with bigger volumes. Hence case to case volume based pricing to be followed.. Bundling up strategy is required to be taken up. As far as the panel builders and system houses are concerned they buy products for specific projects where a lot of line items will be used and hence the price offered should be bundled to remain competitive. Loyalty schemes and turn over discount to motivate and retain customers

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BUDGET: From the Profits encased in 2008-2009 is close to 100 Crores (INR), in which the proposed amount for budget is 10 crores (INR). This amount would be distributed amongst the marketing mix in the following way: Marketing Mix Reasons New products being launched in the market calls for the extension of the Product lines. The new product needs to be certified and approved widely for product acceptance. Effective databases of different companies strategy and its effect of different segments of customers are to be monitored. Regular price lists to be circulated among the dealers and various industries. Explaining about the different products and its application in different industry will improve the market share and obviously since L&T is launching its Medium voltage switchgear Products needs to increase awareness. It also has to invest into Product literatures. Awareness of the new products that is launched in the Market. Existing People and the new people recruited should have good product knowledge and its applications which is the boom for the company. New channel partners i.e. dealers are to be developed and the existing ones needs to be revamped to maximize the reach and presence. Survey is to be done which results in the identification of the bottle necks so that process or people can be improved. Percentage of Budget

Product

30

Price

Promotion: Seminars and conferences

20 5

Print Media and Exhibitions People Place : Dealers Meet and channel development Customers response (Lost customers)

10

20

10

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MARKETING ASSIGNMENT

Customers response (Lost customers) 10% Place : Dealers Meet and channel development 20% People 10%

Budget Allocation
Product 30%

Price 5% Promotion: Seminars and conferences 20%

Print Media and Exhibitions 5%

ORGANIZATION & IMPLEMENTATION: The existing Product oriented organisation should be Market centred organisation. This would enable them to concentrate on the target markets and efficiently increase market share. Also there needs to be a Manger to liaison between the Switchgear SBU with the rest of the other operating SBUs. Managing Director

Sales Manger Switchgear

Marketing Manager Switchgear

Sales Manager Infrastructure

Sales Manager Industry

Marketing Manager Infrastructure

Marketing Manager Industry

Sales Executives

(Source: Jobber 2010)

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MARKETING ASSIGNMENT

ROLES
Role: Final authority Managing Director Feedback Feedback Role: Marketing Planning and Implementation Marketing Managers Manger - Liaison

Role: Sales, Maintain Databases of Customers Sales Managers Feedback

Manger Other operating divisions

(Source: Jobber 2010) The structure proposed in Fig. , does not require hiring new personnel. People working in the organization needs to be re-structured to concentrate on different segments. Roles are changed to make effective marketing plan and to implement. Implementation requires a time period of six months to induct into practice. This period would be required to gather approvals from other departments Finance and HR in order to incorporate these changes. Finance getting approvals to arrange for the budget. HR getting approvals to arrange to restructure and arrange training for Sales engineers regarding products and its applications. The training of the Sales engineers will be ongoing process.

CONTROL: Control is to done by the array of measures available to the Marketing managers called as the operational Control as explained by Jobber (Principles and practice of Marketing,2010) The Monthly sale analysis can be carried out on user based reports in SAP which L&T has implemented. This will give a detailed analysis and performance report on different Products and can be matched with the previous year and planned for this year. Measuring the Customers response on different parameters such as Sales support, Product Appraisal, after sales service etc. It can be carried out every 6 months once.

Sale Analysis

Customer Satisfaction

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MARKETING ASSIGNMENT This can be used to measure how new customers are added month after month. This can be carried out to see if the products are readily available for the customers within their reach and the quantity of stocks at the dealers place which can be carried out fortnightly. This can be carried out 3 months once to see the relative market share and their performance The Marketing manager who is also the SBU head can perform this check to see the business is profitable as they do all major deals and special price deals.

New customers added

Distribution/availability

Market Share

Gross margin

There are other parameters which can be critical for targeted customers which can be made just for the specific segments. REFLEXIVE ACCOUNT: Why L&T EBG Switchgear division? For the last 5 years I have been in this industry and had a close association with L&T. I have always been thrilled with the growth of the Power and switchgear Products. L&T is the oldest switchgear company in India has the finest of products and widest market and carries such a brand image though diversified in various segments. So having spent some considerable time in this industry I felt it would be great to do a marketing plan for L&T. Highlights: This assignment gave an insiders view of the industry with insights on strategies and objectives of company as told by senior management in their annual reports and in web sites. Much of secondary data helped me though some information I had received from the primary source as company employees. There was not much data on the market share of different companies and is not in the public domain. Secondly it quite hard to calculate the market shares as there are multiple switchgear products and each product has a different market Position. Hence the market share information shared above reflects the cumulative position of different competitors along with their products. Tough I have been a marketer this report gained me an insight of the different key tools available for analysis. I also realised there are many parameters which needs to be considered before forming a Marketing plan. Practical vs. Theoretical: Having chosen L&T and after collecting considerable data which was not quite easy, making the plan was perceived to be simple. Since I was in the Market I was able to relate to the problems which I faced to the things I studied. I was able to give a better form for the different things I had in my mind. But the application of the theory to the organization proved to be thought provoking. During the process, I also 30

MARKETING ASSIGNMENT learnt how maximum business can be achieved through internal business within the other operating SBUs just by having a manager to liaison. Another key thing is about bundling the products required for project seemed to be good. The Market segmentation indeed to concentrate where the investments are actually happening will boost the sales was also evident when the report was carried out. This coursework on a whole has kindled further interest in Marketing and I consider it a serious career option. Overall the assignment along with series of lectures has enlightened much about the field of marketing and has enhanced my knowledge.

References:

Larsen and Tubro Companys Vision 2010 http://www.larsentoubro.com/lntcorporate/common/ui_templates/HtmlContainer.aspx?res=P _CORP_AABT_ACOM_CVIS (accessed 20.02.2010) Power Generation in India 2010 http://www.powermin.nic.in/whats_new/pdf/ultra%20mega%20project.pdf (Accessed 21.02.2010) Data monitor report (2010)- FDI in INDIA- Country Profile: India http://www.marketlineinfo.com/library/DisplayContent.aspx?N=4294669489 (Accessed via Metalib 21.02.2010)

GDP growth in India and future 2010 -Data monitor report (2010) Country Profile: India GDP http://www.marketlineinfo.com/library/DisplayContent.aspx?N=4294669489 (Accessed via Metalib 21.02.2010) Per capita consumption of Electricity in BRIC Countries CEA, CIA World fact book 2008 (Accessed 21.02.2010) Technology in Switchgear gear on Actuator Steve lane, 2010 http://www.hssltd.com/assets/files/Switchgear%20developments%20for%20IME.pdf (Accessed 22.02.2010)

Switchgear Market in India 2009, Frost and Sullivan 2009 31

MARKETING ASSIGNMENT
www.energy.frost.com (accessed 21.02.2010) Switchgear Split up

http://blog.taragana.com/pr/indian-low-and-medium-voltage-switchgear-markets-to-reboundby-2010-driven-by-demand-from-various-segments-says-frost-sullivan-2602/ (Accessed on 22.02.2010) L&T corporate website- financials performance analysis etc. http://www.larsentoubro.com/lntcorporate/LnT_DWS/Downloads.aspx?res=P_CORP_CINV_AF NC_BQUT (Accessed 22.02.2010 Data monitor L&T profile http://www.marketlineinfo.com/library/DisplayContent.aspx?R=BC12843B-5BD8-4976-90C4A3B2589006AC&N=4294836015 (Accessed on 18.02.2010) Porters Five Forces - http://www.whatmakesagoodleader.com/Porters-five-forces.html (Accessed on 23.02.2010) Power ministry of India for APDRP and Rural electrification Project http://powermin.nic.in/JSP_SERVLETS/internal.jsp (Accessed on 23.02.2010) Acquisition of TAMCO switchgear Data monitor 2010 http://www.marketlineinfo.com/library/DisplayContent.aspx?N=4294669489 (Accessed on 24.02.2010) Target Markets for Low voltage and Medium voltage switchgear in India- Abhishek Gokhale, Industry Analyst Frost and Sullivan 2009 http://www.frost.com/prod/servlet/market-insight-top.pag?Src=RSS&docid=156855178 (Accessed on 24.02.09) Ministry of renewable energy 2010 http://mnes.nic.in/ (Accessed on 19.02.2010) Infrastructure Growth in India Data Monitor Country Profile India http://www.marketlineinfo.com/library/DisplayContent.aspx?N=4294669489 (Accessed on 24.02.2010) Rajesh Jeyachandran, Assistant Manager BCH Electric Limited (2010) - Market share of the different Switchgear Companies in India. Through email dated 17.03.2010. Abbas GM, C&S Electric Switchgear, 2010 L&T Performance over last three years including the present financial year 2010 Through email dated 14.03.2010.

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MARKETING ASSIGNMENT

BIBLIOGRAPHY:

Jobber, D. (2010). Principles and practices of Marketing 6th edition McGraw Hill McDonald, H.B.M. (1989). Marketing Plans How to Prepare Them: How to use them. Oxford: Butterworth-Heinemann.

Appendix:
Price Analysis:

S.NO 1 2 3 4

BRAND
L&T SIEMENS ABB SCHNEIDER ELECTIC

MODEL MNX 18A 3TF - 16A AL16 16A AV1 16A

List Price 780 745 750 670

Discount 50% 40% 45% 40%

Landed Price INR 390 447 413 402

Source: Price list of L&T, Siemens, ABB and Schneider Electric.

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