Havells india ppt


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A Case study on Havells India Limited, its growth prospects, company history and their marketing activities.
This study was a part of academic project for the college and has been appreciated. Gives insights on how distribution has been leveraged to create excitement in a product category which is generally not that exciting.

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Havells india ppt

  1. 1. Havells India - The growth story Faculty in-charge – Prof. Sapan Shrimal Student Detail Vinit Gandhi Marketing B (36300)
  2. 2. Objective of the report  The report is focused as unravelling the formula of success that Havells has seen as an Electrical Equipment Manufacturer.  The emergence of Havells India from a local brand to a brand that acquired Sylvania Lightings – the fourth largest lighting manufacturer in the world, thereby gaining global presence is an excellent case in itself.  The following topics were covered while achieving the objective of the report  Sector analysis of the electrical appliance industry.  Evolution of Havells India as an emerging market player.  Tracking Growth of the company in previous years.  SWOT Analysis of the company.  Strategic decisions taken in the timeline of Havells India.  Studying the Marketing Mix, Product Profile and STP analysis.  Acquisition of Sylvania and its impact.  Marketing Initiatives and Distribution Channel enrichment by the company.  Innovations.  Future prospects of Havells India.
  3. 3. Why Havells Havells has been consistently growing faster than the market in all categories. Hence it should be something very unique which is to be discovered. Havells has been positioned as a premium brand in a price sensitive market and yet has been able to make its niche. Havells has done several innovations in the distribution and sales side which would be studied. Economic crisis resulted into backfiring of Havells decision to acquire Sylvania. Havells managed to come out of this crisis due to sheer management expertise which adds to the curiosity. Excellent Marketing campaigns to position Havells as the electrical equipment brand with highest brand recall
  4. 4. Company details Havells India Limited is a $1.3 Billion leading Fast Moving Electrical Goods (FMEG) Company with a strong global footprint led by Mr Qimat Rai Gupta. Has operations in 50 countries with 11 state-of-the-art plants in India and other 7 plants across Europe, Latin America, Africa and China. Its global network constitutes of 6500 professionals across 91 branches & representative offices in over 50 countries. Havells Luminance Standard Concord Sylvania Havells Crabtree BRANDS
  5. 5. Acquisition of Sylvania Havells had a track record of five successful acquisitions, and high growth in its Indian operations. However, Sylvania was making operational losses to the tune of 30 million euros annually after acquisition. This was due to shrinking in sales due to the 2008 Economic crisis. Plants operated at half the capacity and it was difficult to lay off people. However, in a classic turnaround case, Havells managed to pull out Sylvania from operational loss into a profit generating entity.
  6. 6. Sales and Marketing at Havells Havells World – 2 stores Havells Galaxy – 210 stores Distributors - 10000 Retail outlets - >50000 Distribution Expertise “Shock Laga Shock Laga” – Havells Switches “Wires that don’t catch fire” – Havells wires “Save electricity, Bijli Baba” – Havells lightings Havells fans are forever – Rajesh Khanna commercial Marketing Campaigns
  7. 7. Primary Analysis : Havells
  8. 8. Market Research : Retailers Q. What profit margin is generally realized on selling Havells products? Fans – 10 % + trade schemes. Switches – 12-15% + trade schemes. CFL – 6-8% + trade schemes Q. Do the customer demand for Havells specific products or do you have to push the products? Havells Fans and CFL sell well. Switches are a bit difficult to sell. Q. Does the brand Havells helps in selling the brand better? Yes. This was a question that had no alternate answer. Many distributors prefer keeping Havells products because of the quick turnover achieved in them. Q. Why does a customer not buy a Havells product and buy other products instead? While fans by Havells are highly competitive, the pricing in Switches and other allied products acts as a disadvantage. Retailers in the electrical appliances market are highly influential since these products sell largely on the relationships maintained by the store owner with the customers who are majorly architects, electricians and construction contractors. The list of Retailers interviewed are as below –  Aditya Electricals, Baner  Power Electric Corporations, Budhwarpeth  Lucky Electricals, Budhwarpeth  Neminath Electricals, Budhwarpeth  Modern Electricals, Budhwarpeth  Nikhil Electrical Enterprises, Budhwarpeth  Shreeji Electricals, Mumbai  Adinath Electricals, Mumbai  Hardware House and Electricals, Mumbai  Navneet Electricals, Mumbai
  9. 9. Market Research - Distributors • Quantity based schemes • Schemes with local trips • Schemes with trips abroad • Wholesalers meet • Training employees Schemes Offered New products enter the market every 6 – 8 months. However variations in the existing products are much frequently introduced New Products The sales agents visits them twice every week wherein we can communicate any message for the company. Heavy advertising and marketing. It has developed a niche of its own. Sales Visit Why Havells Issues in Selling Products Sold are always in the premium category creating issues in pushing them through the customers.
  10. 10. Market Research -Employees Pros – - Good market reputation. - Easy to sell and approach customers. - Lots of encouraging policies for Distributors and Retailers. - Rapidly expanding market base. - Stress level is normal. - Lots of benefits to the employees. Cons – - Premium products, makes it harder to sell. - Branding is totally taken care of by the HQ. - Switching verticals is not easy. - Loyalty is more important than skills when it comes to promotions. - Non- engineering background people, stay away.
  11. 11. Market Research – Sales Employees Sales Agent Havells runs a scheme named power plus for electricians and other influencers and is a lucky draw system. After Havells Galaxy, it is coming out with Havells World which is to provide user an excellent buying experience Promotional Activities carried out by Havells are – 1. Foreign and local trips. 2. Medical insurance to the retailers 3. Trader Meet, Dealer Meet, Retailer Meet and conferences 4. Lucky draws schemes during the meets to give extra incentives 5. Power Plus schemes – Scratch coupon based lucky draw. Main competitors Polycab, RR Cables and Finolex in the Indian cable markets. . Havells Galaxy Manager 1. Havells Galaxy stores are one of it kinds in the electrical markets. 2. Galaxy stores apart from being a consumer experience outlet, also act as stockiest of Havells products. All products in the market went by the Havells Galaxy. 3. Havells Galaxy is occupied during Saturdays and Sundays. Since majority of the home owners are free during this time frame. 4. Several promotional activities like Havells World that would come up .
  12. 12. Secondary Analysis : Havells
  13. 13. Positives for Havells Extremely successful brand: Highest recall in the industry Presence across the entire electrical equipment product gamut Apt positioning & strong distributor network…expected to expand further Lucrative incentives have kept the dealer lured to Havells – Dealer Financing, Mutual Fund scheme, Points based scheme Unorganized players moving out of the system…benefiting Havells Rapid Expansion Plans. Products from Sylvania not yet completely brought to Indian markets Strength of distribution: Majority of brands face the issue of struggling distribution which is not the case with Havells. Focus on manufacturing: Always manufacturing is at core of Havells strategy unlike competitors Strengths Opportunities
  14. 14. Threats for Havells Rising domestic competition: Havells is in a market where chances of occurrence of price wars is highly probable thereby affecting profitability Increasing raw material prices: Majority of businesses at Havells are highly sensitive to raw material prices. Macro economic risks : Devaluation of rupee makes the Sylvania acquisition even more expensive and taxing on the parent company Saturation of the premium segment: Since Havells is not present in the low price market, the market it is located in might get saturated With increasing divisions the management hassles increase as well. With no experience of a global takeover, Sylvania might create some issues in the parent brand FDI Policies would encourage more foreign players in an already crowded market. State of Hypercompetition.
  15. 15. Financial Analysis Returns on Invested Capital > 25%. NET SALES GROWTH (CAGR for 5 years) – 33.3% EPS Growth (CAGR for 5 years) – 27% Sales and EPS grew by 16.13% and 37.86% in 2012 respectively Debt to net profit ratio also showed improvement from -58.43 in FY2009 to 2.63 in FY 2012. D/E ratio improved from 2.01 in FY2009 to 1.07 in FY2012.
  16. 16. Future Prospects Havells is set on a path of high growth and is emerging as a category leader in majority of the verticals that it functions in. Havells products are amongst top 3 in category for 70% of its profile and amongst top 5 in 100% of its product categories. With things from Sylvania’s end getting sorted and the macro economy starting to look better, Havells would look forward to bring global brands to India which would further improve the offerings at Havells. Also, with an always improving balance sheet, Havells would be able to attract more investments in future if any be essential. The increase in Branding and advertisement spend by Havells has shifted it from a Electrical Equipment supplier to a Consumer product brand which would in future the USP for selling its offerings. All and All, the stage is set for Havells to lead in all the categories that it functions in the next 5 years and then diversify into other businesses once that is successful.