Interesting case with many view points - 1. Suresh Kumar - Regional Marketing Manager - Eastern Region (RMM-E) of EEL 2. Pradeep Dasgupta - Sales Engineer, EEL- kolkata 3. Murli Bhasin - General Manager ( Materials ) of Voltas Ltd

1. Business-to-Business
EEL - Case Study
INSTITUTE OF MANAGEMENT DEVELOPMENT
AND RESEARCH
GROUP - VII

2. Elements of Case
1
Voltas & EEL Meeting Participants –
Suresh Kumar - Regional Marketing Manager - Eastern Region (RMM-E) of EEL.
Pradeep Dasgupta - Sales Engineer , EEL - Kolkata.
Murli Bhasin - General Manager ( Materials ) of Voltas Ltd
Products Specification –
Flame-proof motor - Maker - EEL, Cost - Rs. 50,000, Specifications - 40HP,
1400rpm,
Centrifugal Pump - Maker - Voltas Ltd.

3. The Meeting Scenario
 Voltas acquired order for 10 pump sets from Eastern Coalfields at a competitive price.
 Competitors - Siemens, ABB and Kirloskar.
 EEL - already sent quotation for supply of 10 flame-proof motors. Volume Discount - 20%
on basic price & maximum Discretionary Discount can be offered - 12%.
 Voltas demands for weekly delivery of 2-3 pumps from 4th
week, completion in 8 weeks.
Failure to do so will attract penalties (EEL disagrees)
 EEL offers for delivery in 6th
to 8th
week and will be sent in one or two full truck load, to
keep logistics costs low and avoid damages and delays. EEL also offers 12-18 months
warranty, free after sales service for the same period & free installation.
 Voltas accepts this arrangement immediately.
 Now Voltas demands more 15% discount to existing 20% basic discount. With
commitment to finalize the order right away.
 EEL were only willing to give 12% discount to which Voltas replied that they will inform
their decision within 3-4 days.
2

4. Organizational Buying Behavior
 (Concept Applied) Buying orientation has a narrow & short term focus and buyers
follow practices like lowest price involving hard negotiations with short-listed or qualified
suppliers. Buyers typically argue that there are no differences between various suppliers’
offers in terms of product quality, technical services or product features as it is a
commodity & price is the only thing negotiable.
 Voltas used “I WIN - YOU LOSE” negotiation style to achieve Cost Leadership.
 Voltas straight away took control and directed the entire negotiation over their stiff
competition to get this contract as well as their working on thin profits margins.
 While Voltas is reputed company and important client for EEL, hence there are many
demands from Voltas.
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5. Purchase/Procurement Process
4
(Concept
Applied)
Organizational
Purchasing is
complex and time
consuming.
There might be
individual, team,
top management
or even other
departments
involved in this
process.

6. Negotiations
 Negotiation is a process that tries to maximize the benefit to both buyer and seller
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7. Negotiations (2)
Voltas Limited Budget
Voltas (Mr Murli Bhasin) must have been approved budget by buying center/team that
matched the amount of 20%+15% discount – Hence possibilities are they either have to get
approval from buying center, decision making units or finance department.
Price Wars
All the organization use this Cost Leadership approach to get the best deal at lowest
maximum cost. The other competitors are also evaluated for their offered price and then
negotiated for the lowest possible price with other offered services.
Even though Voltas conveyed they will require 3-4 days to evaluate and take a decision, they
are more willing to deal with EEL for below reasons –
EEL has long standing relation with Voltas, they understand of needs/requirements of
Voltas and processes to complete the orders.
Voltas will opt for regular supplier i/o other competitors for reasons of quality, reliability of
delivery dates, and most important is urgency which may arise in future.
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8. Suggestions
 EEL should have opted for more proactive - negotiation strategy.
 EEL gave too much including freight charges and other benefits early in negotiations,
which should have been avoided.
 EEL should focus on “How the quality processes are maintained in their unit,” this
ensures that the pumps quality efficient as per prescribed standards.
 EEL can convey how it will align its resources and infrastructure to complete Voltas order
on Priority.
 EEL should have given a Cost-benefit analysis as below table to convince that their
product is real value for money.
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9. Suggestions (2)
 (Concept Used) Cost-benefit analysis: While conducting demand analysis, it is
useful to carry out an analysis of benefits received and the costs incurred by target
customers.
(Above estimates are hypothetical and only for reference of costing vs benefit)
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Sr
No
Particulars Amount
1 Cost of Per Pump Rs50,000 5,00,000
2 Transportation of Freight Costs – 2 Trucks 60,000
3 Installation 10 pumps 10,000
4 Repair & Maintenance Costs (12-18 months warranty) 10,000
5 Energy Savings Cost
(Rs5/kWh and motor uses 11.0kWh for 5000hrs)
2,75,000

10. Suggestions (3)
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11. Thank You
Group-VII
11
Manish Khandare 46
Rushabh Mogarkar 66
Saurabh Zulkantiwar 104
Tushar Bhadalkar 106
Vivek Arya 112
Prakhar Roy 116