Industrial Distribution of Taparia Tools

1. INDUSTRIAL DISTRIBUTION
TAPARIA TOOLS

2. INDIAN HAND TOOL INDUSTRY
Production of hand tools is reserved for small-scale industry with an investment in plant and
machinery limited to Rs.50 million
The sector, with a total investment of about Rs. 5000 million, employs an estimated 25000
workers
There are an estimated 2500 small scale units
Of the total global market of more than US$ 10 billion, India's share is more than Rs. 5 billion

3. TAPARIA TOOLS
Leading brand in India for hand tools
Started in 1969 in collaboration with a Sweden company named Bacho
Products exported to more than 21 countries
Production Plant located in Nashik(42832 mts)
Over 800 distributors in India

4. PRODUCTS OF TAPARIA

5. COMPETITOR ANALYSIS
Tenders/Public
Enterprises
• Everest
• Jhalani
Institutional
Buyers
• Stanley (Black & Decker)
• Stahlwille
Tradesmen
• JK
• Venus
DIY Enthusiasts • Gedore

6. COMPARISON WITH IMPORTED TOOLS
Parameter Taparia Imported Tools
Delivery times Next day delivery 15 days air freight; 2 months ocean
freight
Cost Approx. one-third of imported
tools cost
-
Distributor network Ubiquitous Selected dealers/direct company
contact
Delay due to customs
clearances
- Grey marketing issues
Quality Relatively poorer Relatively better

7. COMPARISON WITH DOMESTIC TOOLS
Parameter Taparia Domestic Tools
Brand name Extremely strong brand name;
“evokes quality”
Unreliable
Cost Approx. 20-40% more than
domestic
Distributor network Ubiquitous Less spread due to Taparia
Service Warranty including reverse
logistics
Usually not provided
Quality Better quality Dubious quality

8. PRICE COMPARISON
• Typical price points of Phillips Screwdriver Tip Size 1
• Indian brands (Everest, JK, Eastman) – INR 30-50
• Taparia – INR 70
• European Brands (Stanley, Stahlwille) – INR 140-180

9. INSIGHTS
Heavy Pull
• Orders generated through pull rather than push
• Logistic cost difference of ~2% of picking up supplies from wholesalers rather than having them delivered
• Same day or +1 day delivery depending on location and order
Flexible margins
• Retailers are usually flexible in margins and can sacrifice margins up to 25% on their 30% for specific bulk
orders and client relationships
• Normal tendency is to maintain 5-10%, but can also go up till 30%
Price hikes YoY
• Some retailers feel that even though metal prices remain constant, prices of Taparia have gone up by 30 – 40%
• Annual price hikes of 5-10% are considered normal
• Nexus between company and distributors allow skimming during price hikes

10. INSIGHTS
Reverse Logistics
• Service as per quality guarantee
• Tools sent back to company through wholesaler with authorized complaint letter
• Cost borne by the company
Heavy market presence
• Only 1 store out of the 14 stores did not sell Taparia Tools
• 6 stores did not sell any other tools other than Taparia Tools
Problem of survival of distributors in suburbs
• Distributors in South Mumbai attract orders from all over Maharashtra
• Distributors in suburbs cater only to local industries and workmen; hence suburbs not a
sustainable market

11. DISTRIBUTION NETWORK
Factory (Nasik,
Maharashtra)
C & F Agent Distributer
Dealers /
Wholesalers
RetailersEnd Customer
B2B Customers

12. MARGINS IN THE CHANNEL
Company Manufacturing
70% of list
price
C&F Transportation 2%
Distributors Bulk break and Local taxes 3% to 5%
Dealers/ Wholesalers
Reach Users with huge
purchases
10% to 15%
Retail
Reach Home users/small
mechanics and servicing
small purchases
10% to 15%

13. MONEY FLOW
No credit is provided by company to dealers and
distributers
Credit may be extended for bulk purchases by business
at dealer level
Company directly get in to the rate contracts for larger
orders. Dealers get commission for getting such orders.
Dealers get the delivery within 3 days of ordering by
paying in advance
Dealers keep around 5 lac inventory sufficient for 15
days

14. INFORMATION FLOW
Company has
control up to
dealer level
Dealers
employ sales
personal to
cover the area
Visit the
customers
once in a week
No
sophisticated
it system are
used

15. BUSINESS DYNAMICS
Dealers stock multiple competitor products from India as well as imported products
Imported products are costly. Most of Indian competitors are regional players
Taparia do not have comprehensive range in tools and products are predominantly hand tools
Customers primarily buy main tools and then it is in the purview of dealer to push Taparia tools or
competitors tools
Maintaining quality and availability of products is key for success

16. CUSTOMERS EXPECTATIONS
Attributes Retail Customers Institutions
Price 30 8
Brand 52 7
Features 21 5
Quality/Durability 37 10
• On Visiting 14 retail outlets, it was observed that customers give the most amount of Importance to brand names
when it comes to a purchase decision followed by Quality and price
• Information from institutions suggested that for Institutions quality is the most important attribute
followed by price and the brand name

17. “SWITCH TO TAPARIA AND EXPERIENCE THE
DIFFERENCE”
Thank You
Group 7 : Rohan Pant | Aditya Anand Chegu
Karan Arora | Chinmaya Dandekar
Divya Gorantla | Kaivalya Desai