Godrej PPT startegy

13,589 views

Published on

PPT made for Godrej strategy compet

Godrej PPT startegy

  1. 1. Brand MantraTeam JoMannKare
  2. 2. India- Macroeconomic Environment-Growth in Income in Urban areas > Growth inIncome in rural areas across the decade.-More disposable income at the hands of theUrban class.-Urban India will drive a four fold increase inaverage national income- Great opportunity for high value products.-Cities will account for nearly 60% & 70% ofIndia’s GDP by 2015 & 2030 respectively.-India will have 68 cities with population morethan 1 million by 2030 up from 42 today.2005 2015
  3. 3. Main centers of growth and development
  4. 4. Indian Consumer Electronics Market Analysis-The consumer electronics and homeappliances market is worth Rs 70,000crore (around $15 billion)- Following are the Sales revenuetargets of major players in this sector:--- Samsung $10 B by 2013-- LG- $10 B;-- Whirpool- $2B;-- Videocon- $ 5 B; by 2015- With a $10-12 million (Rs 45-55crore) investment on a manufacturingline (excluding cost of land), acompany can churn out 15,000refrigerators, or 9,000 washingmachines, or 1 million mobile phonesin a month. Typically any capacityaddition takes 12 months to becomeoperational.&&-every dollar invested on an asset, acompany can earn a little over $3 insales--KPMGPrimary Growth drivers:- - Consumer spending on CE to growat rate higher than GDP growth.-Change in demographics and lifestyle will push sales. - Shifttowards higher value products (in the urban markets).-Different strategy for rural markets with more focus on volumegenerators.-Share of sales from modern retail channels will grow as FDI inretail kicks in.-Industry will continue to remain price competitive. Newertechnologies will also lower per-unit cost.Challenges:- - Price competition will put pressure on margins.- Increase in input price and volatile exchange rate.- Excess capacity can trigger price war.- Spiraling inflation will take the fizz out of consumer spending.
  5. 5. Consumer Durable Industry-The urban consumer durable market for productsincluding TV is growing annually by 7 to 10 %whereas the rural market is zooming ahead ataround 25 % annually-Samsung India is launching a major distributionpush into tier-II and tier- III cities. The plan is toexpand the reach of consumer electronics andmobile sales points by as much as 50% fromcurrent levels.-Mobile handsets accounted for 32% of consumerelectronics spending in 2009. The market willcontinue to grow robustly due to a projectedincrease in mobile subscriber penetration from anestimated 62% in 2010 to 145% by 2015 as well asfalling handset prices, as the market momentumshift to semi-urban and rural areas.The AV segment will account for about 23% ofconsumer electronics revenues over the forecastperiod and driven by video, which will account for84% of revenues in this segment by 2015.
  6. 6. Opportunity- Modern Retail & Specialist retailers-Electronics and appliance specialists see growth of6% in 2009 to reach Rs481 billion-Sales through electronics and appliance specialistretailers expected to see 10% constant value CAGRover forecast period
  7. 7. Primary Research- Lajpat Rai MarketTelevisions:-Grey market sale:- Approx 70000 TVs are soldin 1 dayMaximum CRTs sold- 14 inchesRanging for 1800 to 2500 RsWithout warranty No Major Brands in this segment Hub for all the major towns in India LCDs without warranty sold at as low as12000 Huge sale in AV -DVD players/ MP3 playersMobiles:- Sales Per Month-MNC- 7 mn| Indian- 2.5 mn|Chinese- 2.5 mn Even entry-level customer, features like dualSIM, FM, color, flash are must.Over 75% of the handsets are with camera. Demand of GPRS and Bluetooth is increasing Surge in Qwerty handsets & Social N/w enabledCustomers ask for Android based & TouchPhones Trade in Cash only. Recurring customers.1st Phase (2011/12 Launch) Inverters Mobile Phones2nd Phase (2013 Launch) DTH- Set Top Boxes Netbooks/Notebooks
  8. 8. Key Success Factors & Vision StatementKEY Success Factorsto be managedRemarks AttractivenessProduct – ConsumerElectronics- Still highly underpenetrated: Huge Opportunity- TV still un launched- Segment with largest value &Volume5Promotion - All media- TVC, Radio, Social Media, Direct Marketingin Rural India4Geographic Coverage - Huge untapped market- Start with Pilot projects in markets3Distribution - Hub & Spoke Model- Strong ERP system for better inventory- Piggybacking in Some states2.5Customer Service - Strong network to maintain relations- Word by mouth to improve customer perceptions- Innovative marketing to sustain interest in rural &Urban Areas- Work on the technical perception of the company2.53.48Vision-To be one of the leading Consumer Appliance company in the country driving oninnovation and customer service.Mission-Target 20-15 is to reach $1 Bn sales from the existing portfolio. And additional $1 Bnfrom the sale of Inverters & Mobile Phones in the period 2012-2015.
  9. 9.  700 million mobile phone subscribersHandset Market growing at CAGR of 23.1% (2005-09) Monthly demand - 13 million handsets per month. CAGR of 16.3% for the five year period 2009-2014, Value of $12.9 billion by the end of 2014. Forecast - Volume of 206.7 million units by 2014Cellular phone penetration: 45 % in 2009 Replacement sales increased to 50 % of total salesInadian Mobile Handset Industry
  10. 10. STRATEGY Connect with target group through a medium that reaches themin a language that they understandTARGET Urban first-time buyers and semi-urban /rural upgradesPRODUCTION In-house Product Development, Design and Manufacturingfacilities. Work with leading ODM/ OEM/ EMS / Design houses toget access to latest products, designs and technologiesDISTRIBUTION State-level distributors, who further appoint area/towndistributors to reach the retail stores &cover all major modernretail stores.Godrej MobilesFOCUSED MARKETINGBRAND VIBRANCYPRODUCT DEVELOPMENTCHANNEL MANAGEMENTQUALITY AFTER SALES SERVICEAssumptions• Initial Capital to start the operations • INR 1200 mn• R&D Expenses to be incurred initially • INR 400 mn• Average Retailers per Sub distributor • 60• Cost of Capital • 15%• Gross Margin per handset • 20%• Average Retailers Per Sub Distributors • 60AssumptionsYr 1 Yr 2 Yr 3 Yr 4Average Price of a handset sold INR 2,400 2300 2,300.00 2200Expenses• Logistic Costs• Service Cost• Communication• Travel & Conveyance• Marketing & Promotion• Incentives
  11. 11. Financials- Godrej MobilesFinancials
  12. 12. Inverter Market Scenario- India4k-6.5k6.5k- 10.5k4k-6.5k4k-6.5k Though the market is competitive andfragmented but un-penetratedLuminous has the maximum market share ofaround 10% of the Inverter market Salient features: - CostCompetitiveness, After Sales support,wide distribution network, Strong Brandawareness, 1st movers advantage,Reliability and quality of the product. Inverter Categories:-Mid range for home segmentSME/SMBApplication based inverters- For lifts,Hotels, Hospitals, Petrol pumps, TelecomBTS, etc. By Market size in India : - North> West > East >SouthGovt. of India has estimates- Demand ofinstalled capacity of over 2,00,000 MW by 2012and over 4,00,000 MW by 2020.(600VA- 1.5KVA) InverterMid range home segment3.8k-7.5k
  13. 13. Identification of Potential marketsElectricity penetration in IndiaPilot phaseIdentification of Potential markets : Identification of 10 states based onelectricity penetration in IndiaParametric ranking of the 10 statesPilot Phase : Rajasthan, Bihar ,UPselectedDistricts are identified to ventureinto for pilot phase for the statesHub and Spoke model used: basedon Godrej partner /distribution officesSource: www.indiastat.comPhase 1Phase 2IdentifiedstateAveragePopulation pervilage Rural literacy% of workingrural populationNo. of ruralHHHH availingbankingservicesHH withelectricity Average scoreUP 0.35 0.54 0.48 1.32 0.50 1.28 0.74Bihar 1.48 0.44 0.46 0.81 0.45 0.10 0.63Rajasthan 0.72 0.63 0.52 0.72 0.67 0.41 0.61West Bengal 0.53 0.56 0.63 0.46 0.57 0.91 0.61MP 0.41 0.58 0.64 0.52 1.00 0.41 0.59Chhattisgarh 0.42 0.61 0.68 0.22 0.45 0.95 0.55Orissa 0.31 0.60 0.54 0.44 0.48 0.39 0.46Assam 0.45 0.61 0.49 0.27 0.36 0.35 0.42Jharkhand 0.33 0.46 0.56 0.24 0.50 0.21 0.38
  14. 14. Total Market Size : Pilot PhaseDistrictsTotalHouseholdsNumber ofunelectrifiedHouseholdesNumber ofSchoolsHouseholdindustryworkersKanpur 224275 89710 4034 23393Unnao 398756 159502.4 2424 30522Lucknow 229516 91806.4 4325 20285Raebareli 454640 181856 2459 35266Alwar 383844 153537.6 4241 26299Bharatpur 247936 99174.4 2399 9164Dausa 172,097 68838.8 3241 12353Jaipur 367891 147156.4 4765 36576Nalanda 310799 233314 2786 26773Patna 419619 342134 3897 30813Bhojpur 278627 201142 2987 21523Gaya 444220 366735 2376 41022 For Pilot phase,4 districts were identified for one hub and based on the number of households, schools and workers, potential for pilotphase is estimated. For Rajasthan and Uttar Pradesh,60% electricity penetration(source : Indian national health survey 2006 )while real data used for BiharAverage cost of the ProductFor Households 600 VA 4000For Household industryworkers 800 VA 4500For Schools 1.4K VA 6500
  15. 15. Household Potential (Inverter for 3500Rs-600VA)School/SMEs Potential (Inverter for 40,000Rs-5KVA)Household Industry worker potential (1.5KVA-6000Rs)LL= 1% ML=2% HL=3% LL= 1% ML=2% HL=3% LL= 1% ML=2% HL=3%7849625 15699250 23548875 1613600 3227200 4840800 1403580 2807160 421074013956460 27912920 41869380 969600 1939200 2908800 1831320 3662640 54939608033060 16066120 24099180 1730000 3460000 5190000 1217100 2434200 365130015912400 31824800 47737200 983600 1967200 2950800 2115960 4231920 634788013434540 26869080 40303620 1696400 3392800 5089200 1577940 3155880 47338208677760 17355520 26033280 959600 1919200 2878800 549840 1099680 16495206023395 12046790 18070185 1296400 2592800 3889200 741180 1482360 222354012876185 25752370 38628555 1906000 3812000 5718000 2194560 4389120 658368010877965 21755930 32633895 1114400 2228800 3343200 1606380 3212760 481914014686665 29373330 44059995 1558800 3117600 4676400 1848780 3697560 55463409751945 19503890 29255835 1194800 2389600 3584400 1291380 2582760 387414015547700 31095400 46643100 950400 1900800 2851200 2461320 4922640 7383960137627700 275255400 412883100 15973600 31947200 47920800 18839340 37678680 56518020LL= 1% ML=2% HL=3%172440640 344881280 517321920DistrictsTotalHouseholdsNumber ofSchools/SMEsHousehold industryworkersKanpur 224275 4034 23393Unnao 398756 2424 30522Lucknow 229516 4325 20285Raebareli 454640 2459 35266Alwar 383844 4241 26299Bharatpur 247936 2399 9164Dausa 172,097 3241 12353Jaipur 367891 4765 36576Nalanda 310799 2786 26773Patna 419619 3897 30813Bhojpur 278627 2987 21523Gaya 444220 2376 41022Sales Potential from 12 districts in pilotphaseLL=1% => 17 Cr => 170 Mill RsML=2% => 34 Cr => 340 Mill RsHL=3% => 51 Cr => 510 Mill Rs
  16. 16. Marketing StrategiesOnline Advertising:Social Media Marketing: Current Rage.PR & Advertorials: To increase visibility and brandimageStrategic Tie Ups:With Real Estate Developers, IPL, Sporting EventsOutdoor Advertising:Events Hosting, Banners at selective locations forsome timeTelevision & Print Ads- Conventional MediaMarketingStrategiesto be UsedOnlineAdvertisingStrategicTie UpsOutdoorAdvertisingTVC/Radio/Print Ads• Create an Engagement Model Around Objectives & Resources• Address Specific Customer NeedsBLOG or be BLOGGED: Add blogging to the marketing mix, make people talkabout you, Always note  PEOPLE trust PEOPLE
  17. 17. Marketing Strategies contd…facebookHOW?• Create a Godrej Facebook page• Use this page for discussions & events• Integrate Godrej with Facebook to get discussion & event updates on Godrej websiteWHY?• Interaction at a more personal level between users• Users can upload & share their Godrej Appliance Experience• Facebook is widely used and hence more people would be involved. The ultimate goal is to get thepeople know about godrej• Discount coupons for Godrej membersReach70% of the private cabs daily commuters are frombusiness & corporate sectors10% commuters are college students and Sr.citizens98% of commuters belong to SEC A and BImpactUnlike other outdoor advertising, Cabvertised brandsare at eye-levelCabvertised brands are seen at prime spots Cab interiors deliver a more detailed message to acaptive audienceOutdoor Advertising - CABVERTISING
  18. 18. 18Haats/ MelasInfluencers and opinion leadersNGOS MFI, SHGs and BanksRegional Film Super starLocal Political leadersGodrej Rural Promotions• Demonstrate the productto the opinion leaders.• Promote individual use.• Give a commission fromthe revenue of the sale.• Promote Word of mouthfor the product.The NetaThe BarberThe SarpanchThe PanditjiThe EldersWhy?• People Power• Wealth•Influence•Networking skill• Native of the regionhas understanding ofthe consumer.• Can be involved inthe entrepreneur skills•Collaborate with the Regional Super Stars• Can be involved as a Local brandambassador .• Better recall for the rural people whichpamphlets and print advertisement with theStar.Ravi Kishen and Manoj Tiwari-super stars of U.P and Biharregional films• NYKS- Nehru Yuvak Kendra sangathan•Rajasthan Environment Preservation Society•VatavaranWhy?• Good penetration in the rural areas• Volunteers in the NGO are of the local region .• Option to Tie Up with multiple NGOs in field ofEducation, Health Care, Disaster management andWomen Empowerment.•NGOs coming up with promoting greenenvironment and reducing carbon emissions can beused as stalwartsWhy?• Finance is required for up scaling• Strategic tie ups with banks to fulfillpriority sector lending requirements• SHGs are organized and can be easilytargeted for product promotion andUsage• MFIs pan India outreach .Frequency of visits- 88% of Haatvisitors visit 4 Haats/week• Village retailers availability-62% of nearby cluster villageretailers attend Haats regularly•Promotion capability : Usefulfor both static & mobile promotion.• Trade predisposition-Visitingretailers come with shopping lists butless than 60% of their final shoppingis planned•Measurable-By monitoringsecondary sales of sub dealer cateringto cluster.

×