bhel forcasting


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bhel forcasting

  1. 1. PROJECT INDEX  Demand Forecasting & its need for the Project  Research method  Research Methodology  DATA Collection Method, Analysis & Implementation  Marketing -Marketing Planning-mission -Marketing Planning-vision & values  Market Analysis –Defining the market -Types of Market  Market Research –Introduction -Market Segmentation -Why segment the market?  Product –Introduction-Product Life Cycle  Product Analysis  Customer or Consumer  Competitor Analysis kind of information -Role of competitor analysis  Pricing –Introduction  Brand  Demand Analysis of BHEL Products & Forecasting -Total demand of products in domestic market -Analysis of demand in domestic market  SWOT Analysis of BHEL  Findings  Limitations  Conclusion  Recommendation & Suggestions  Websites visited  Bibliography
  2. 2. DEMAND FORECASTINGDemand Forecasting is the activity of estimating the quantity of aproduct or service that consumers will purchase. Demand forecastinginvolves techniques including both informal methods, such as educatedguesses, and quantitative methods, such as the use of historical salesdata or current data from test markets. Demand forecasting may be usedin making pricing decisions, in assessing future capacity requirements,or in making decisions on whether to enter a new market. ‟Necessity for forecasting demandOften forecasting demand is confused with forecasting sales. But, failingto forecast demand ignores two important phenomenaStock effectsThe effects that inventory levels have on sales. In the extreme case ofstock-outs, demand coming into your store is not converted to sales dueto a lack of availability. Demand is also untapped when sales for an itemare decreased due to a poor display location, or because the desired sizesare no longer available. For example, when a consumer electronicsretailer does not display a particular flat-screen TV, sales for that modelare typically lower than the sales for models on display. And in fashionretailing, once the stock level of a particular sweater falls to the pointwhere standard sizes are no longer available, sales of that ite m arediminished.Market response effectsThe effect of market events that are within and beyond a retailerscontrol. Demand for an item will likely rise if a competitor increases theprice or if you promote the item in your weekly circular. The resultingsales increase reflects a change in demand as a result of consumersresponding to stimuli that potentially drive additional sales. Regardlessof the stimuli, these forces need to be factored into planning andmanaged within the demand forecast.
  3. 3. Methods that rely on judgment When using judgment, rely on structured procedures such as Delphi, simulated interaction, structured analogies, and conjoint analysis. Simulated interaction is useful to predict the decisions in conflict situations, such as in negotiations. In addition to seeking good feedback, forecasters should explicitly list all the things that might be wrong about their forecast. This will produce better calibrated prediction intervals. Unaided judgment : It is common practice to ask experts what will happen. This is a good procedure to use when • experts are unbiased • large changes are unlikely • relationships are well understood by experts (e.g., demand goes up when prices go down) • experts possess privileged information • experts receive accurate and well-summarized feedback about their forecasts. Prediction market : Prediction markets, also known as betting markets, information markets, and futures markets have a long history. Despite numerous attempts since the 1930s, no methods have been found to be superior to markets when forecasting prices. However, few people seem to believe this as they pay handsomely for advice about what to invest in. Some commercial organizations provide internet markets and software that to allow participants to bet by trading contracts. However, there are no empirical studies that compare forecasts from prediction markets with those from traditional groups or from other methods. Delphi technique: The Delphi technique was developed at RAND Corporation in the 1950s to help capture the knowledge of diverse
  4. 4. experts while avoiding the disadvantages of traditional group meetings. The latter include bullying and time-wasting. To forecast with Delphi the administrator should recruit between five and twenty suitable experts and poll them for their forecasts and reasons. The administrator then provides the experts with anonymous summary statistics on the forecasts, and experts‟ reasons for their forecasts. The process is repeated until there is little change in forecasts between rounds – two or three rounds are usually sufficient. The Delphi forecast is the median or mode of the experts‟ final forecasts. Game theory:Simulated interaction is a form of role playing for predicting decisions by people who are interacting with others. It is especially useful when the situation involves conflict. For example, one might wish to forecast how best to secure an exclusive distribution arrangement with a major supplier. To use simulated interaction, an administrator prepares a description of the target situation, describes the main protagonists‟ roles, and provides a list of possible decisions. Role players adopt a role and read about the situation. They then improvise realistic interactions with the other role players until they reach a decision; for example to sign a trial one-year exclusive distribution agreement. The role players‟ decisions are used to make the forecast. Judgmental bootstrapping : Judgmental bootstrapping converts subjective judgments into structured procedures. Experts are asked what information they use to make predictions about a class of situations. They are then asked to make predictions for diverse cases, which can be real or hypothetical. The resulting data are then converted to a model by estimating a regression equation relating the judgmental forecasts to the information used by the . Simulated interaction : Simulated interaction is a form of role playing for predicting decisions by people who are interacting with others. It is especially useful when the situation involves conflict. For example, one might wish to forecast how best to secure an exclusive distribution arrangement with a major supplier. To use simulated interaction, an administrator prepares a description of
  5. 5. the target situation, describes the main protagonists‟ roles, and provides a list of possible decisions. Role players adopt a role and read about the situation. They then improvise realistic interactions with the other role players until they reach a decision; for example to sign a trial one-year exclusive distribution agreement. The role players‟ decisions are used to make the forecast. Intentions and expectations surveys : With intentions surveys, people are asked how they intend to behave in specified situations. In a similar manner, an expectations survey asks people how they expect to behave. Expectations differ from intentions because people realize that unintended things happen Conjoint analysis : By surveying consumers about their preferences for alternative product designs in a structured way, it is possible to infer how different features will influence demand. Methods that rely on quantitative data With the proliferation of data, causal models play an increasingly important role in forecasting market size, market share, and sales. Methods should be developed primarily on the basis of theory, not data. Finally, efforts should be made to ensure forecasts are free of political considerations in a firm. To help with this, emphasis should be on gaining agreement about the forecasting methods. Also, for important forecasts, decisions on their use should be made before the forecasts are provided. Scenarios are helpful in guiding this process. Extrapolation : Extrapolation methods use historical data on that which one wishes to forecast. Exponential smoothing is the most popular and cost effective of the statistical extrapolation methods. It implements the principle that recent data should be weighted
  6. 6. more heavily and „smoothes‟ out cyclical fluctuations to forecast the trend. To use exponential smoothing to extrapolate, the administrator should first clean and deseasonalise the data, and select reasonable smoothing factors. The administrator then calculates an average and trend from the data and uses these to derive a forecast . Quantitative analogies : Experts can identify situations that are analogous to a given situation. These can be used to extrapolate the outcome of a target situation. For example, to assess the loss in sales when the patent protection for a drug is removed, one might examine the historical pattern of sales for analogous drugs. To forecast using quantitative analogies, ask experts to identify situations that are analogous to the target situation and for which data are available Rule-based forecasting : Rule-based forecasting (RBF) is a type of expert system that allows one to integrate managers‟ knowledge about the domain with time-series data in a structured and inexpensive way. For example, in many cases a useful guideline is that trends should be extrapolated only when they agree with managers‟ prior expectations Neural networks : Neural networks are computer intensive methods that use decision processes analogous to those of the human brain. Like the brain, they have the capability of learning as patterns change and updating their parameter estimates. However, much data is needed in order to estimate neural network models and to reduce the risk of over-fitting the data (Adya and Collopy 1998).
  7. 7.  Data mining : Data mining uses sophisticated statistical analyses to identify relationships. It is a popular approach. Data mining ignores theory and prior knowledge in a search for patterns. Despite ambitious claims and much research effort, we are not aware of evidence that data mining techniques provide benefits for forecasting. Causal models : Causal models are based on prior knowledge and theory. Time-series regression and cross-sectional regression are commonly used for estimating model parameters or coefficients. Causal models are most useful when (1) strong causal relationships are expected, (2) the direction of the relationship is known, (3) causal relationships are known or they can be estimated, (4) large changes are expected to occur in the causal variables over the forecast horizon, and (5) changes in the causal variables can be accurately forecast or controlled, especially with respect to their direction. Reviews of commercial software that can be used to develop causal models are provided at the site. Segmentation :Segmentation involves breaking a problem down into independent parts, using data for each part to make a forecast, and then combining the parts. For example, a company could forecast sales of wool carpet separately for each climatic region, and then add the forecasts.
  9. 9. CONCLUSIONS FOR DEMAND FORECASTINGSignificant gains have been made in forecasting for marketing, especiallysince 1960. Advances have occurred in the development of methodsbased on judgment, such as Delphi, simulated interactions, intentionsstudies, opinions surveys, bootstrapping, and combining. They have alsooccurred for methods based on statistical data, such as extrapolation,rule-based forecasting, and econometric methods. Most recently, gainshave come from the integration of statistical and judgmental forecasts.General principles • Managers‟ domain knowledge should be incorporated into forecasting methods. • When making forecasts in highly uncertain situations, be conservative. For example, the trend should be dampened over the forecast horizon. • Complex methods have not proven to be more accurate than relatively simple methods. Given their added cost and the reduced understanding among users, highly complex procedures cannot be justified. • When possible, forecasting methods should use data on actual behaviour, rather than judgments or intentions, to predict behaviour. • Methods that integrate judgmental and statistical data and procedures (e.g., rule-based forecasting) can improve forecast accuracy in many situations. • Overconfidence occurs with quantitative and judgmental methods. • When making forecasts in situations with high uncertainty, use more than one method and combine the forecasts, generally using simple averages.Methods based on statistical data
  10. 10. RESEARCH METHODSI- Why Are Research Methods Important?Science, at a basic level attempts to answer questions (such as “why arewe aggressive) through careful observation and collection of data. Theseanswers can then (at a more complex or higher level) are used to furtherour knowledge of us and our world, as well as help us predictsubsequent events and behavior. But, this requires asystematic/universal way of collecting and understanding data –otherwise there is chaos.At a practical level, methodology helps us understand and evaluate themerit of all the information we‟re confronted with every day. For example,do you believe in the following studies?  Study indicated that the life span of left-handed people is significantly shorter than those who are right hand dominant.  Study demonstrated a link between smoking and poor grades.There are many aspects of these studies that are necessary before onecan evaluate the validity of the results. However, most people do notbother to find out the details (which are the keys to understanding thestudies) but only pay attention to the findings, even if the findings arecompletely erroneous.They are also practical in the workplace  Mental Health Profession – relies on research to develop new therapies, and learn which therapies are appropriate and effective for different types of problems and people.  Business World – marketing strategies, hiring, employee productivity, etc.II- Different Types of Research Methods  Basic Research  Applied Research  Program Evaluation
  11. 11. III- How Do Non-Scientists Gather Information? We all observe our world and make conclusions. How do we do this:  Seek an authority figure  IntuitionIV- THE SCIENTIFIC METHODB. Why of Conducting Scientific Research  Naturalistic Observation  Case Study  Survey  Psychological Testing  Experimental Research
  12. 12. Research Methodology  Type or research ---------------- Exploratory Research Design.  Method of Research------------- Data collection Method Through Customer enquiries Receive for submission of Tender from domestic market.  Sampling method ---------------Through statistical andJudgement method (Regression)  Sampling unit--------------------BHEL Jhansi.  Sampling element transformer------Power transformer, Dry Type, Instrument & HVRTransformers.DATA COLLECTIONThere are very few hard and fast rules to define the task of datacollection. Each research project uses a data collection techniqueappropriate to the particular research methodology. The two primarygoals for both quantitative and qualitative studies are to maximizeresponse and maximize accuracy.When using an outside data collection service, researchers often validatethe data collection process by contacting a percentage of the respondentsto verify that they were actually interviewed. Data editing and cleaninginvolves the process of checking for inadvertent errors in the data. Thisusually entails using a computer to check for out-of-bounds data. Herewhich I collected the datas from enquiry records & annual reports ofBHEL are mainly secondary data set.
  13. 13. DATA ANALYSISModern computer software has made the analysis of quantitative data avery easy task. It is no longer incumbent on the researcher to know theformulas needed to calculate the desired statistics. However, this d oesnot obviate the need for the researcher to understand the theoretical andconceptual foundations of the statistical techniques. Each statisticaltechnique has its own assumptions and limitations. Considering the easein which computers can calculate complex statistical problems, thedanger is that the researcher might be unaware of the assumptions andlimitations in the use and interpretation of a statistic.DATA IMPLEMENTATIONThe most important consideration in preparing any research report is thenature of the audience. The purpose is to communicate information, andtherefore, the report should be prepared specifically for the readers of thereport. Sometimes the format for the report will be defined for theresearcher (e.g. a dissertation), while other times, the researcher willhave complete latitude regarding the structure of the report. At aminimum, the report should contain an abstract, problem statement,methods section, results section, discussions of the results, and a list ofreferences.
  14. 14. MARKETINGThere are many definitions of marketing. Consider some of the followingalternative definitions:“The all-embracing function that links the business with customerneeds and wants in order to get the right product to the place at theright time”.“The achievement of corporate goals through meeting andexceeding customer needs better than the competition”.“The management process that identifies anticipates and suppliescustomer requirements efficiently and profitably”.“Marketing may be defined as a set of human activities directed atfacilitating and consummating exchanges” Marketing Why is the business’ attitude to marketing? Marketing Orientation Gain information on Persuade Market The market: customers to buy: Analysis Market Research Marketing Mix Quantitative Product Market Analysis Analysis Price Market Qualitative Segmentation Analysis Place Marketing Strategy Consumer Tests Promotion
  15. 15. Five Successful Marketing Techniques1. Keep Adding Something New:Every time you add something new to your business you create anopportunity to get more sales. For example, something as simple as addingnew information on your web site creates another selling opportunity whenprospects and customers visit your site to see the new information. Adding a new product or service to the list of those you already offerusually produces a big increase in sales. The added product increases yoursales in 3 different ways:  It attracts mew customers who were not interested in your current products and services.  It generates repeat sales from existing customers who also want to have your new product.  It enables you to get bigger sales by combing two or more items into special package offers.2. Become a Valuable Resource: Look for ways you can be a resource for your prospects and customers.Supply them with free information. Help them do things faster, easier, lessexpensively. You get another opportunity to sell something every time theycome back to you for help.3. Separate Yourself from Your Competition: Find or create a reason for customers to do business with you instead ofwith someone else offering the same or similar products. For example, doyou provide faster results, easier procedures, personal attention or a betterguarantee? Determine the unique advantage you offer to customers that yourcompetitors do not offer. Promote that advantage in all of your advertising.Give your prospects a reason to do business with you instead of with yourcompetition and you‟ll automatically get more sales.4. Promote the End Result:
  16. 16. Your customers don‟t really want your productor service. They want the benefit produced by using it. For example, car buyers want convenient transportation with acertain image. Dental patients want healthy and good-looking teeth withoutsuffering any pain. Business opportunity seekers want personal andfinancial freedom for themselves and their family. Make sure your web pages, sales letters and other sales messages arepromoting the end result your customers want.5. Anticipate Change: Change is the biggest challenge to your businesssuccess. The days are gone when a business could constantly grow bysimply repeating what It did successfully in the past… or even recently.Aggressive, innovative competitors and rapidly changing technology make itimpossible. Expect change and prepare for it. Don‟t wait until your income declines totake action. Develop the habit of looking for early signs that something ischanging. Then confront it before you start to lose business.Tip:Insulate yourself against the impact of change by increasing the numberof products and services you offer and by using a variety of differentmarketing methods. Only a small portion of your total business will beaffected if the sales of one product decline or the response to one marketingmethod drops.Marketing planning – Mission
  17. 17. Mission“A mission describes the organization‟s basic function in society, interms of the products and services it produces for its customers”.A clear business mission should have each of the following elements: Purpose Why the business exists Strategy& Scope Values What business What management and how Believes in Standards & Behaviors The rules that guide how the business operates Marketing Planning – Values & Vision
  18. 18. Values from the foundation of a business management style.Values provide the justification of behavior and, therefore, exert significantinfluence on marketing decisions.Market analysis – defining the marketAll business operates in “markets”. But what is a market?And how can it be defined?Traditionally, a “market” was a physical place where buyers and sellersgathered to buy and sell goods. Economists describe a market as a collectionof buyers and sellers who transact over a particular product or productclass (such as the housing market or the grain market). It is important to be careful about how a market is defined. The followingkey marketing process relies on a relevant definition:  Measuring market share  Measuring market size and growth  Specifying target customers  Identifying relevant competitors  Formulating a marketing strategyA market can be defined as follows:A market is the set of all actual and potential buyers of a product orservice.Five basic markets & their connecting flows:
  19. 19. Resource MarketManufacturer Consumer Government Market Market Market Intermediary Market
  20. 20. Types of marketMarkets can be analysis via the product itself, or end-consumer, or both.The most common distinction is between consumer and industrialmarkets.Consumer MarketsConsumer markets are the markets for products and services bought byindividuals for their own or family use. Goods bought in consumer marketscan be categorized in several ways:  Fast-moving consumer goods (“FMCGs”)  Consumer durables  Soft goodsIndustrial MarketsIndustrial markets involve the sale of goods between business. These aregoods that are not aimed directly at consumers.Industrial markets include  Selling finished goodsExamples-office furniture, computer systems  Selling raw materials or componentsExample-steel, coal, gas timber  Selling services to businessesExample-waste disposal, security, accounting &legal services
  21. 21. MARKET RESEARCHMarket research answers questions in respect of different markets. Thepurpose of this research is to gather facts about markets and the forcesoperating therein, like competitors and government, so as to enhance thecompetitive strength of the company in the market place. The areas ofmarket research broadly include:  Determine the size of both current and potential market.  Assessing the market trends.  Ascertaining the strengths and weaknesses of competitors‟ marketing strategies.  Determining the impact of current and contemplated legislative actions of the state on the marketing effort of the company.  Demand and sales forecasting. Market Segmentation“Market Segmentation is the division of a market into thosesubgroups which have special needs & preferences & which representsufficient pockets of demand to justify separate marketingstrategies”.The concept of market segmentation is based on the fact that markets areheterogeneous.Bases for SegmentationThe major segmentation variables are: 1. Geographic segmentation 2. Demographic segmentation 3. Psychographic segmentation 4. Behavior segmentation
  22. 22. 1. Geographic segmentation: Geographic segmentation calls for divisionof the market into different geographic units such as nation, states, regions,countries, cities, neighbourhood, density of city, climate, etc. 2. Demographic segmentation: In demographic segmentation, we divide the market into groups on the basis of variables such as age, family size, gender, income, occupation, education religion, generation, nationality, etc. One reason, demographic variables are so popular with marketers is that they‟re often associated with consumer needs & wants. Another is that they‟re easy to measure. 3. Psychographic segmentation: Psychographics is the science of using psychology & demographics to better understand consumers. In Psychographic segmentation, buyers are divided into different groups on the basis of psychological/personality traits. Such as lifestyle, values, social class, etc. 4. Behavior segmentation: In Behavior segmentation, marketers divide buyers into groups on the basis of -use occasion, benefit sought, usage rate, loyalty status, readiness to purchase, attitude toward product, user status, etc.Why Segment Market? There are several important reasons why business should attempt to segment their market carefully. These are summarized below: 1. Enhanced profits for business. 2. Better opportunities for growth. 3. Retain more customers. 4. Target marketing communications. 5. Gain share of the market segment.
  23. 23. Products – IntroductionA product is defined as:“Anything that is capable of satisfying customer needs”A product group (or product line) is a group of brands that are closelyrelated in terms of their functions and the benefits they provide (e.g. Dell‟srange of personal computers or Sony‟s range of televisions).There are two main types of product brand: (1) Manufacture brands (2) Own-label brandsManufacturer brands are created by producers and use their chosen brandname. The producer has the responsibility for marketing the brand, bybuilding distribution and gaining customer brand loyalty. Good examplesinclude Microsoft, Panasonic and Mercedes.Own-label brands are created and owned by distributions.Good examples include Tesco and Sainsbury‟sBusiness need to regularly look for new products and markets for futuregrowth. A useful way of looking at growth opportunities is the An off Growthmatrix which suggests that there are four main ways in which growth can beachieved through a product strategy: (1) Market penetration- Increase sales of an existing product in an existing market. (2) Product development – Improve present products and/or develop new products for the current market. (3) Market development – Sell existing products into new markets (e.g. developing export sales). (4) Diversification– Develop new products for new markets.
  24. 24. Products – Product life cycleWe define a product as “anything that is capable of satisfying customerneeds. This definition includes both physical products (e.g. cars, washingmachines, DVD players) as well as services (e.g. insurance, banking, privatehealth care).Business should manage their products carefully over time to ensure thatthey deliver products that continue to meet customer wants. The process ofmanaging groups of brands and product lines is called portfolio planning.The stages through which individual products develop over time is calledcommonly known as the “Product Life Cycle”.The classic product life cycle has four stages (illustrated in the diagrambelow): introduction; growth; maturity and declineIntroduction StageA period of slow sales growth as the product is introduced in the market.Profits are non-existent because of the heavy expenses of productintroduction.Growth Stage
  25. 25. The Growth Stage is characterized by rapid growth in sales and profits.Maturity Stage The Maturity Stage is, perhaps, the most common stage for all markets, it isin this stage that competition is most intense as companies fight to maintaintheir market share.Decline StageIn the Decline Stage, the market is shrinking, reducing the overall amountof profit that can be shared amongst the remaining competitors.Object of Product AnalysisA Product Analysis refers to the study of: a) The raw materials used b) Components, c) Features like shape, size, colour, weight, design, etc. d) The merits of the product- its convenience, portability, style, comfort, durability, wholesomeness or purity. e) Packing. f) Branding Product AnalysisThose who are in the business of marketing, industrial products should becontinuously on the lookout of modifications in the existing products with aview to: (a) improving the quality & functional performance of the products and(b) ensuring that the products fulfills the changing requirements of thecustomers.The industrial marketers may also have to concern himself with the endproduct and the profitability of his customer and if possible suggest to himhow these could be improved.For this purpose, the Industrial Marketer will have to continuously subjecthis own products to marketing research – to product analysis and to newproduct ideas in particular. Product Analysis of his existing products wouldinclude the study of the following aspects of his products: i. Field performance of the products, and the quality, purity, fineness, etc. of the materials and parts used in their manufacture.
  26. 26. ii. Design of the product and features like size, shape, weight, applicability, interchangeability, etc.iii. Benefits like convenience of operating or using, durability, portability, etc.iv. Other special features or benefits if any.Since industrial customers are usually fewer, large, and geographicallyconcentrated, the problems relating to large populations and large territoriesin the selection of a sample would get reduced. In some cases the number ofcustomers might be so few and well listed in the company record accordingto area, type of business, sales turnover, etc.; that sample selection will bemuch easier.Customers or Consumers?A common question that arises when studying marketing is the following:What is the difference between a customer and a consumer?The following distinction should help:  A Customer – purchases and pays for a product or service.  A Consumer – is the ultimate user of the product or service, the consumer may not have paid for the product or service.Consider the following example:  A Food manufacturing business makes own-label, Italian ready meals for the major supermarkets.So far as the business is concerned, the customer is the supermarket towhom it supplies meals.  The consumer is the individual who eats the meal.In terms of its marketing effort, who should the business above target?In reality – it needs to understand the needs and wants of both the customerand the consumer.
  27. 27. It needs to develop a strong understanding of the needs of the supermarketsin terms of their requirements for ready meals (e.g. packaging, recipes, priceand delivery).It also needs to understand (perhaps with the help of the supermarkets) theneeds and wants of the consumer. How are tastes changing? Are consumershappy with the standard/taste of the product? Competitors analysis – kinds ofInformationThe tables below lists the kinds of competitors‟ information that would helpbusiness complete some good quality competitor analysis.What business probably already know their competitorsOverall sales and profitsSales and Profits by marketSales by main brandCost structureMarket shares (revenues and volumes)Organization StructureDistribution systemIdentity/profile of senior management.
  28. 28. The diagram below shows the impact of varying levels of competitor actionon the profits of a business: Weak competitors response Annual profits Moderate competitors response Strong competitor responseRole of competitor analysisCompetitor analysis has several important roles in marketing:  To help management understand their competitive advantages/disadvantages relative to competitors.  To generate understanding of competitor‟s past, present (and most importantly) future strategies.  To provide an informed basis to develop strategies to achieve competitive advantage in the future.  To help forecast the returns that may be made from future investments (e.g. how will competitors respond to a new product or pricing strategy)?What questions should be asked when undertaking competitor analysis?The following is a useful list to bear in mind:Who are our competitors? (See the section on identifying compe titors furtherbelow)
  29. 29. What threats do they post?What is the profile of our competitors?What are the objectives of our competitors?What strategies are our competitors pursuing and how successful are thesestrategies?What are the strength and weaknesses of our competitors?How are our competitors likely to respond to any changes to the way we dobusiness?Pricing – IntroductionSetting the right price is an important part of effective marketing. It is theonly part of the marketing mix that generates revenue (product, promotionand place are all about marketing costs).Price is also the marketing variable that can be changed most quickly,perhaps in response to a competitor price change.Put simply, price is the amount of money or goods for which a thing isbought or sold. The price of a product may be seen as a financial expression of the value ofthat product.For a consumer, price is the monetary expression of the value to be enjoyed/benefits of purchasing a product, as compared with other available items.The concept of value can therefore be expressed as:(Perceived) VALUE = (perceived) BENEFITS - (perceived)COSTSA Customer‟s motivation to purchase a product comes firstly from a needand a want: e.g.
  30. 30.  Need: “I need to eat.  Want: I would like to go out for a meal tonight”The second motivation comes from a perception of the value of a product insatisfying that need/want (e.g. “I really fancy a McDonalds”).The perception of the value of a product varies from customers to customer,because perceptions of benefits and costs vary.Perceived benefits are often largely dependent on personal taste (e.g. spicyversus sweet or green verses blue). In order to obtain the maximum possiblevalue from the available market, business try to „segment‟ the market – thatis to divide up the market into groups of consumers whose preferences arebroadly similar – and to adapt their products to attract these customers.In general a products perceived value may be increased in one of two ways –either by: (1) Increasing the benefits that the product will deliver, or, (2) Reducing the cost.For consumers, the PRICE of a product is the most obvious indicator of cost– hence the need to get product pricing right.Factors Affecting Demand:Consider the factors affecting the demand for a product that are: (1) Within the control of a business and (2) Outside the control of a business.Factors within a business control include:  Price (assuming an imperfect market – i.e. not perfect competition).  Product research and development.  Advertising & Sales promotion.  Training and organization of the sales force  Effectiveness of distribution (e.g. access to retail outlets; trained distributor agents)  Quality of after-sales services (e.g. which affects demand from repeat- business)Factors outside the control of business include:
  31. 31.  The price of substitute goods and services.  The price of complementary goods and services.  Consumer‟s disposable income.  Consumer tastes and fashions.Price is therefore, a critically important element of the choices available tobusinesses in trying to attract demand for their products.BRANDSMeaning of brandsBrands are a mean of differentiating a company‟s products and servicesfrom those of its competitors.There is plenty of evidence to prove that customers will pay a substantialprice premium for a good brand and remain loyal to that brand. It isimportant, therefore, to understand what brands are and why they areimportant.“…. It is not factories that make profits, but relationships withcustomers and it is company and brand names which secure thoserelationships”.Businesses that invest in and sustain leading brands prosper whereas thosethat fail are left to fight for the lower profits available in commodity markets.
  32. 32. What is brand?One definition of a brand is as follows:“A name, term, sign, symbol or design, or a combination of these, thatis intended to identified the goods and services of one business orgroup of businesses and to differentiated them from those ofcompetitors”.Interbrand – a leading branding consultancy – defines a brand in this way:“A mixture of tangible and intangible attributes symbolized in atrademark, which if properly managed, creates influence andgenerates value”.Three other important terms relating to brands should be defined at thisstage:  Brand equity  Brand image  Brand extension  Brands and products
  33. 33. Analysis of Demand for transformers in Domesticmarket of BHEL Jhansi UnitThe demand forecasting for the organizations like Bharat Heavy ElectricalsLtd.(BHEL), Jhansi is of great importance because it involves a big amountof working capital. If we have some predictions about the future demand oftransformers we can make better plan for production to ensure the deliveryof right product at right time and at the right place. The demand forecastingalso helps to make allotment of proper working capital. The method used for demand forecasting is REGRESSIONANALYSIS. This method is very useful for making demand forecast for theproduct/products which have actually increasing trend of demand butforecast goes downward or, conversely the trend for demand is downwardand the forecast goes upward. To minimize this effect a factor is added. Thisprocedure adjusts the forecast according to the trend. It has been observedthat the values of forecast come pretty close to the actual values.REGRESSION METHODMeaning & DefinitionThe measurement of the mutual relations of two or more variables is got byregression. Commonly, the question arises if there is some relation betweenthe weight and height of an infant, can its weight be calculated or if weknow its age can by this other magnitudes of it be declared .Can thequantity of demand and supply be known for a definite value. What will bethe effect on the consumption quantity, if the tax on intoxicant is doubled.For this & for many other measurements of relations the method ofregression is used.According to Blair, “Regression is the measure of the averagerelationship between two or more variables in the terms of the originalunits of data”.
  34. 34. “In more popular sense we may call regression a trend, a line whichshows how many units of change in one variable are associated withone unit of change in another Variable.”According to Yule & Kendall, “The term regression is not a particularhappy one from the etymological point of view, but it is so firmlyembedded in statistical literature that we make no attempt to replace.In general, the idea ordinarily attached to the word „regression, doesnot touch upon the connotation, & it should be regarded merely aconvenient term”.UTILITY OF REGRESSION 1. To forecast the probable value : In the analytical studies of different kinds, there is great value of regression. By it we can know that if out of the two connected series the value of one has been given what may possibly be the value of the other series connected with it. If the rate of pay scale is increased what will be its effect on the efficiency; there having been an increase in the common price level how much will there be a change in the life leading expenditure, increase or decrease in the study will how much effect the result of student etc. are many questions that can be satisfactorily answered by regression method. 2. To Know the Correlation & Co-Variation: With the help of regression the correlation between the two series can be known. If the two lines of regression cover each other the correlation between the two series is complete but if they cross each other at 90˚ angle, the correlation is cipher. The more are the lines of regression inclined towards each, the quantity of correlation is the greater. When the two lines rise from the lower left to right upper the correlation is positive but opposite to it when the lines move from upper to the lower side the correlation is negative. Co-Variation too can be known by it.
  35. 35. TOTAL DEMAND OF PRODUCT (TRANSFORMERS) IN DOMESTIC MARKET (FROM YEAR 2005-2012)YEAR POWER DRY-TYPE INSTRUMENT HVR TRANSFORMER TRANSFORMER TRANSFORMER TRANSFORMER2005-06 842 335 6822 11492006-07 948 873 7419 36842007-08 760 1200 5875 46112008-09 1192 927 10715 28032009-10 1150 794 8845 30432010-11 975 708 9702 42892011-12 855 769 7178 2451
  36. 36. FORMULAS USED IN REGRESSION:x= Mean for the number of years used.y= Mean for the demand collected in quantity.X= Number of years used.Y= Number of demands collected.{Y= a+b*x} where a, b are constants & Y shows the trend fordemand.b= sum(X-x)(Y-y)/sum(X-x)^2a=y-b*x
  37. 37. TOTAL DEMAND OF BHEL PRODUCTSIN DOMESTIC MARKETPOWER TRANSFORMERYEAR X Y X-x (X-x)^2 Y-y (X-x)(Y-y) Y=a+bx2005-06 1 842 -3 9 -118 354 9082006-07 2 948 -2 4 -12 24 9252007-08 3 760 -1 1 -200 200 9422008-09 4 1192 0 0 232 0 9592009-10 5 1150 1 1 190 190 9762010-11 6 975 2 4 15 30 9932011-12 7 855 3 9 -105 -315 1010 4 960 28 483 b= 17.25 17 a= 891 891DEMAND FORECASTYEAR X Y2012-13 8 10272013-14 9 10442014-15 10 10612015-16 11 10782016-17 12 1095
  38. 38. DEMAND140012001000 800 600 DEMAND 400 200 0 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 DEMAND FORECASTED11201100108010601040 DEMAND FORECASTED10201000 980 2012-13 2013-14 2014-15 2015-16 2016-17
  39. 39. 140012001000 800 DEMAND 600 TREND 400 200 0 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 DEMAND FORECAST11201100108010601040 DEMAND FORECAST10201000 980 2012-13 2013-14 2014-15 2015-16 2016-17
  40. 40. DRY TYPE TRANSFORMERYEAR X Y X-x (X-x)^2 Y-y (X-x)(Y-y) Y=a+bx2005-06 1 335 -3 9 -466 1398 8992006-07 2 873 -2 4 72 -144 9192007-08 3 1200 -1 1 399 -399 9392008-09 4 927 0 0 126 0 9592009-10 5 794 1 1 -7 -7 9792010-11 6 708 2 4 -93 -186 9992011-12 7 769 3 9 -32 -96 1019 4 801 28 566 b= 20.21429 20 a= 879.1429 879DEMAND FORECASTYEAR X Y2012-13 8 10392013-14 9 10592014-15 10 10792015-16 11 10992016-17 12 1119
  41. 41. DEMAND140012001000 800 600 DEMAND 400 200 0 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 DEMAND FORECASTED11401120110010801060 DEMAND FORECASTED104010201000 980 2012-13 2013-14 2014-15 2015-16 2016-17
  42. 42. 140012001000 800 TREND 600 DEMAND 400 200 0 2005-062006-072007-082008-092009-102010-112011-12 DEMAND FORECAST11401120110010801060 DEMAND FORECAST104010201000 980 2012-13 2013-14 2014-15 2015-16 2016-17
  43. 43. INSTRUMENT TRANSFORMERYEAR X Y X-x (X-x)^2 Y-y (X-x)(Y-y) Y=a+bx2005-06 1 6822 -3 9 -1257 3771 71572006-07 2 7419 -2 4 -660 1320 74642007-08 3 5875 -1 1 -2204 2204 77712008-09 4 10715 0 0 2636 0 80782009-10 5 8845 1 1 766 766 83852010-11 6 9702 2 4 1623 3246 86922011-12 7 7178 3 9 -901 -2703 8999 4 8079 28 8604 b= 307.2857 307 a= 6849.857 6850DEMAND FORECASTYEAR X Y2012-13 8 93062013-14 9 96132014-15 10 99202015-16 11 102272016-17 12 10534
  44. 44. DEMAND120001000080006000 DEMAND40002000 0 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 DEMAND FORECASTED1080010600104001020010000 9800 9600 DEMAND FORECASTED 9400 9200 9000 8800 8600 2012-13 2013-14 2014-15 2015-16 2016-17
  45. 45. 120001000080006000 TREND4000 DEMAND2000 0 DEMAND FORECAST1080010600104001020010000 9800 9600 DEMAND FORECAST 9400 9200 9000 8800 8600 2012-13 2013-14 2014-15 2015-16 2016-17
  46. 46. HVR TRANSFORMERYEAR X Y X-x (X-x)^2 Y-y (X-x)(Y-y) Y=a+bx2005-06 1 1149 -3 9 -1998 5994 27672006-07 2 3684 -2 4 537 -1074 28942007-08 3 4611 -1 1 1464 -1464 30212008-09 4 2803 0 0 -344 0 31482009-10 5 3043 1 1 -104 -104 32752010-11 6 4289 2 4 1142 2284 34022011-12 7 2451 3 9 -696 -2088 3529 4 3147 28 3548 b= 126.7143 127 a= 2640.143 2640DEMAND FORECASTYEAR X Y2012-13 8 36562013-14 9 37832014-15 10 39102015-16 11 40372016-17 12 4164
  47. 47. DEMAND5000450040003500300025002000 DEMAND15001000 500 0 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 DEMAND FORECASTED430042004100400039003800 DEMAND FORECASTED3700360035003400 2012-13 2013-14 2014-15 2015-16 2016-17
  48. 48. 500045004000350030002500 TREND2000 DEMAND15001000 500 0 2005-062006-072007-082008-092009-102010-112011-12 DEMAND FORECAST430042004100400039003800 DEMAND FORECAST3700360035003400 2012-13 2013-14 2014-15 2015-16 2016-17
  49. 49. Analysis of Demand in Domestic Market1. Power Transformer:-It is clear from data and graph that the demand of power transformer isfluctuating in nature. In 2005 to 2012, demand was 842, 948, 760, 1192,1150, 975 & 855 in quantity. The reasons for fluctuating & decrease intrend from 2008-12 may be due to role of recession, FDI, China equipment‟sare imported & tenders go to Foreign market so no role for Indian parties toinvolve for demand. After Forecasting, from 2012-2017, the demand iscontinuously increasing in a very small amount (1027, 1044, 1061, 1078 &1095) in quantity.2. Dry Type Transformer:-In this type of transformer, In 2005 to 2012, the actual demand was 335,873, 1200, 927, 794, 708 & 769 in quantity. The reasons for fluctuatingnature in trend from 2005-12 may be due to role of recession, FDI, Chinaequipment‟s are imported, costlier design so less demand & no coils filled soless dangerous used mainly in Small scale industries, Townships etc., somore demand for Dry Type Transformers. After forecasting, from 2012-2017, the demand iscontinuously increasing in a very small amount (1039, 1059, 1079, 1099 &1119) in quantity.3. HVR Transformer:-In this type of transformer, In 2005 to 2012, the actual demand was 1149,3684, 4611, 2803, 3043, 4289 & 2451 in quantity. The reasons forfluctuations may be due to role of recession, FDI, China equipment‟s areimported & technology has changed drastically. After forecasting, In 2012-17 the demand is increasingcontinuously increasing in good amount (3656, 3783, 3910, 4037 & 4164)in quantity.4. Instrument Transformer:- In this type of transformer, In 2005 to 2012,the actual demand was 6822, 7419, 5875, 10715, 8845, 9702 & 7178 inquantity. The reasons for fluctuations may be due to role of recession, FDI,China equipment‟s are imported, decrease in trend due to Indian markettenders doesn‟t float and it goes to Foreign market & less technological.Increase trend shows indications of power shortage increase, populationincrease, more standard of living so more power instruments are required &some new customers are coming up due to liberalization of Govt. policies forcaptive power plant. After forecasting, from 2012 to 2017, the demand is continuouslyincreasing in a very large amount (9306, 9613, 9920, 10227 & 10534) inquantity.
  50. 50. SWOT ANALYSIS OF BHELSTRENGTH:- 1. Manufacturing Capacity:- The manufacturing capacity of BHEL is 105 transformer per year . However the demand in market is 900 per year. 2. Mixed Product:- BHEL manufacture mixed product such as power transformers, DTT , INST transformer, HVR, etc. That‟s why it can meet mixed demand also compared to other manufacturers 3. EPC contractor (Engineering Procurement & Construction):- It has 14 manufacturing units. BHEL can design, procure raw material & do construct transformers.WEAKNESS:- 1. Long Procurement Cycle:- Being a Government organization everything is goes in a systematic manner & it takes more & more time. 2. Delay in Response:- Because of long procurement cycle the response is also delay.OPPORTUNITY:- 1. High Demand:- Because of high demand it can takes more orders & do more business. 2. It is established supplies so some government parties also prefer BHEL 3. Being an EPC Contractor it can get more EPC contract. 4. Joint Venture with Siemens in the name of Power Plant Performance Improvement Limited (PPIL), is a major strength for the company. This tie-up will be beneficial as there is a lot of scope for business.THREAT:- 1. Competition with Siemen‟s, Vijay, BL, EMG, etc. 2. New entrance of Firms in Market Such as Kanohar, Victory, IMP, ECE, etc.
  51. 51. FINDINGS  A Demand of BHEL Transformers has been increased in the last two years.  Less technological in comparison to their competitors.  At this time BHEL has good number of customers, this shows the progress of BHEL in the near future.
  52. 52. LIMITATIONSNobody is perfect in the world. Everybody makes some mistakes. Ifsomebody doesn‟t makes mistakes that means he or she doesn‟t workbecause when you do some work you are bound to make some mistakes &there is always room for improvements. So this study may also not be free ofmistakes. But I have tried my level best to make this project BEST. Theremay be some mistakes in this study. They may be as follows:-  The DATA has been mainly collected from Transformer & Commercial Department (TRC) of BHEL Jhansi, mainly it comes under the SECONDARY DATA (from BHEL annual reports, records & books)
  53. 53. CONCLUSIONAfter studying and analyzing various aspects of this project, I haveconcluded that I have gained lot of knowledge about this unit and BHELCompany. My project which is based on the topic of “Demand Analysis ofTransformers” is based the export-import procedure and demand analysisof BHEL.During my training period I have done rotation work in which I know aboutits working routine and collected lots of information about its product liketransformers and Locomotive. I have done my project on “Demand Analysisof transformers” such as power transformer, dry type transformers, HVRtransformers & Instrument transformer.So, through this project I have learned:  Analysis of Future demand of BHEL transformers in domestic market  Export & Import Procedure  Specific requirement of export & import
  54. 54. RECOMMENDATION & SUGGESTIONS  BHEL must try to find out the reasons of decreasing demand of transformers such as power transformers, Instrument transformers & HVR transformers in domestic market.  BHEL must try to change their marketing strategies.  There should be optimum utilization of all factors of production.  Modernization of techniques and up gradation of existing machinery.  Avoid indigenization.  They should try to motivate the employee and try to change their work so they get the interest against their work and enjoy the work also increase the knowledge.  The main products of BHEL JHANSI are Transformers & Locomotives.To expand the market for these products of BHEL, regular seminars should be conducted. These seminars should emphases on the awareness & advertisement of BHEL‟s product & their characteristic, features etc. among the customers related to that region this will in turn help in advertising of BHEL‟s product in the region of immense competitors where the other players are situated.
  55. 55. WEBSITES  Marketing Management (Kotler)  Marketing Research (C.R. Kothari)  Business Statistics (R.P. Varshney)  Annual REPORTS of BHEL