Low Voltage Component Products

1. Energypac - LVCD
REPORT ON THE ANATOMY OF LVCD
Prepared By :
Md. Mushfik Monjur
ENERGYPAC ENGINEERING LIMITED
1

2. Energypac - LVCD
Goal of The Report:
“To achieve market leadership, profitability, good corporate citizenship
and a sustainable growth.”
Executive Summary
“The main objective of the company is to increase the market share in related
diversified products and solutions in Bangladesh and to assure the potential
customers of the quality and durability of the Low Voltage components. Although
the products are competitively priced but it is the best bargain that money can
buy.”
MARKETING RESEARCH OBJECTIVE
There is a strong competition in the low voltage component market in
Bangladesh. And we found that, “The sales volume of ABB is higher than the
other brand company of the market”. In our marketing research, we try to find out
the major marketing problems that Energypac Engineering Limited is facing now
for ABB products in the current marketing situation. We have tried to emphasize
the significance of the problems faced by Energypac in selling their ABB
products compare to others in our research work, survey.
Methods of analysis:
In order to attain the objectives of the study, we have gathered primary
information from the market. To prepare our report we use both primary data
analysis and secondary data analysis. We have conducted a questionnaire
survey to the active sales officers of Legrand, SIEMENS, MEM, Fuji, Schneider,
Havels. We have also gathered information from our ABB office, Bangladesh.
2

3. Energypac - LVCD
BACKGROUND OF THE REPORT
The report on the analysis of LVCD, Energypac has two parts. The first part of
the report basically focuses on the facts and findings from the industry and
secondary data information. The second part of the report focuses from the point
of view of the primary data and information gathered from the survey also key
points from interview session with 07 Sales officers of LVCD. Finally The report
analyzes the primary data and reaches to the conclusion.
Reasons for conducting research
The objective of this report is to find out the problems of LVCD for selling ABB
components in Bangladesh market and also the prospects where we can target
and grab the potential market. The analysis is focused on the perspective of the
customer, the sales officers and their views towards selling items, what are their
needs and wants. The reason for conducting the interview session with each
individual Sales executive is to find out the attitude and perception of them
towards their strategies as well as organization and what are the problems
related to it and what the management of Energypac can do to improve it and
gain the market share.
A few of our research objectives:
We primarily try to see whether ABB products are actually popular among the
customers or not and if so, then what are the reasons behind it and what
Energypac can do to retain, improve and gain more market share. We try to
explore the opinions of the Sales people of LVCD, who are actively engaged in
selling ABB components.
We can summarize our report objectives into the following parts:
 Identify the total market share for low voltage components in Bangladesh..
3

4. Energypac - LVCD
 Identify the proportion of market share that ABB is holding.
 To see whether the advertisements of ABB products are effective.
 To find out what makes a customer comfortable in case of purchasing low
voltage components.
MARKET SHARE :
Major Competitors For Market Size
Low Voltage Components ( BDT - Crore) Market Share ( %)
ABB 25 33
LEGRAND 12 15
Fuji 12 15
Schneider 7.8 10
LG 7.2 9
SIEMENS 6 8
MEM 4.8 7
HAVELS 2 2.59
Others 0.2 0.41
Total 77 100
From the above table we get to know that, total size of market for low Voltage
components in Bangladesh is BDT 77 crore whereas ABB is the market leader
and proportion of ABB is BDT 25 crore with 33% of market share. Legrand and
Fuji belongs to second position with 15% market share each.
4

5. Energypac - LVCD
Graphical Presentation of Major Competitors :
MARKET SHARE HAVELS OTHERS
3% 0%
MEM
SIEMENS 7%
8%
ABB
33%
LG
9%
SCHNEIDER
10%
LEGRAND
FUJI 15%
15%
Hypothesis:
1) ABB products are popular among the corporate sector compared to other
brands.
2) There is a significant relationship between price of the ABB products
compared to Other brands.
3) There is a significant relationship between sales service of the ABB products
compared to other brands.
4) There is a significant relationship between features. of the ABB products
compared to other brands.
5) Energypac is loosing target market for low voltage components for their credit
policies.
6) Distance of LVCD store is creating problems for smooth and prompt delivery.
7) Factory support for LVCD is not prompt all over the year.
5

6. Energypac - LVCD
SWOT ANALYSIS of LVCD:
Strengths:
 Wider product range
 Strong local presence
 Favorable brand image
 Comprehensive knowledge of the total market and client
 Good quality and top quality of products with solution
 Made in Germany and standard is maintained by them
 Using advance high-tech technology
 Because of long term experience, customers reliability and loyalty
 Efficient after sales service.
Weakness:
 Lack of brand awareness
 Lack of consistency in promotional activities
 Less competitive price; competitor sourcing product at cheaper
price
 Less organized distribution
 Less compliance to market demand
 Product support is not always available
 Store location.
Opportunities:
The major three sources of barriers to new entry are to gain: brand loyalty,
absolute cost advantage, economy of scale and governmental regulation.
Besides, it created brand loyalty through continuous advertising of the brand,
company names, patent protection products, product innovation, and
emphasized on high product quality, and good after sales service.
6

7. Energypac - LVCD
Threats:
Recently the competition in the market has become stronger as many
multinational companies have started their business. At the same time local
companies are being established. They are becoming rivals of ABB. Especially
Legrand, Fuji, Schneider, LG, Siemens used by other multinational company
can offer a lower price to the customers. In some cases the local company is
offering a moderate standard product at a cheap price like Nababpur area.
They are entering the competition gradually. But the most challenging part for
us to compete with Multiple Trading which is also distributing ABB products in
Bangladesh.
THE MARKETING AND MANAGEMENT PROBLEM
We have identified some problem of Low voltage components through our primary and
secondary market study. These problems directly and indirectly have link with the
company’s marketing and management system.
The marketing problem:
LVCD of Energypac Engineering Limited deals with ABB low voltage
components has great deal of problem in their marketing part. The problems are
more or less related to the strategies taken by the company regarding product
advertisement and promotion, market segmentation. The marketing problems
are concerned with the fact that the strategy taken by the company is not always
well implemented. The problems from the point of view of marketing are:
 Credit facilities compared to competitors
 Marketing strategies
 Market segmentation
7

8. Energypac - LVCD
Credit facilities :
Recently Energypac Engineering Limited has decided not to give enough credit
facilities to customers. But ultimately end of the day, this vital decision has
restricted to grab the attention of LVCD’s target market whereas competitors are
giving enough credit facilities to grab the attention of their target customers as
MR basis. For example, Adex corporation is selling low voltage components to
all over Bangladesh and their payment terms are as follows :
50% advance payment + 30% during delivery + 20% after final delivery. We are
simply loosing our target customers in these cases.
Marketing strategies:
There are some conflicts between the marketing strategies and the target market
of the product. The company wants to attract the large market of including Panel
builders, industrial sectors, private clients as well but promotional activities are
very poor for this target market. The overall marketing plan and strategies of the
company is concern with this issue but it doesn’t reflect in the actual planning or
marketing and promotion issues.
The industry analysis shows that the largest market of the product is the
industrial sector group but the strategies of the company doesn’t indicates
enough importance to this part of the market. The information gathered indicates
that the company needs to go through the marketing strategies and plans to
come up with some better solution of the issue. The marketing strategies need to
be more detailed in some cases, which are lacking at this point. Moreover as
Multiple Trading is also selling and distributing same products, so they are
considered as strong competitor for Energypac compared to other brands. In this
particular case, our marketing strategy is very weak in searching and attracting
both actual and potential buyer from Multiple Trading. Sales officers need to give
proper sales training under the guidance of expert supervision.
8

9. Energypac - LVCD
Management Related Issues :
After arranging one to one interview with seven Sales officers of LVCD, we got to
know about few critical issues related to motivation. We get to know that most of
the Sales officers are trying to give their effort with sales as it’s a part of their
responsibility but are not interested to give their level best just due to lack of
motivation such as poor salary structure, job promotion.
Analysis of the Advertisement
The most of the products are known to their customers by advertisement to the
people. Knowing from the friends, family and others about the products are very
important advertisement that easily goes into the people. Energypac is not very
successful in this field. Hence, people are not much conscious about the ads.
This made the statement neutral that promotional activities are better than the
other ads for products in this product category.
Some critical issues
• Majority of people in our country are price sensitive. They like to buy
things, which have a good quality within their affordability.
• Customer from the corporate class aware of using branded products like
ABB but customers, who belong to the lower middle class and middle
class society are not aware of using original ABB products rather they
used to purchase fake branded items from Nababpur market.
• Most of the customer want products as MR basis and they want flexible
credit facilities.
9

10. Energypac - LVCD
Questionnaires used during one to one Interview session with
Sales Officers about:
• Personal attitude towards the customer.
• Status of bad credit.
• Ways of recovering bad credits from customers.
• Problems facing by Sales people during sales.
• Requirement of Sales training
• Credit policies of other companies.
• Reasons for not reaching personal target.
• Support from organization for reaching actual target.
• Status of meeting with clients.
Proposed Target For Each Individual Sales Officer For FY 2010-11 :
1. Mr. Mostafizur Rahman : BDT 3.20 crore
2. Mr. Mahmudul Hoque : BDT 2 crore
3. Mr. Shaheb Ali : BDT 2.50 crore
4. Mr. Matiur Islam : BDT 2 crore
5. Mr. Mohammad Ali : BDT 2 crore
6. Mr. Kaisar Hamid : BDT 1.20 crore
7. Mr. Munshi Ajeeb Hossain : BDT 1.50 crore.
RECOMMENDATIONS
Having analyzed the problems of the company and the opinions of the Sales
Officers, we are able to come up with the following recommendations :
First, we are suggesting that the company should think of new credit policy for
selling ABB products to their target customers. The reason behind that through
the market research, we have found out that other companies who are also
10

11. Energypac - LVCD
selling low voltage components of different international brands are giving much
more flexible payment facilities to their target customers whereas Energypac;’s
revised credit policy creating restriction in attracting potential as well as existing
customers. So they should come up with strong research and development in
their credit policies.
Second, As the price of ABB products are very much competitive, the quality of
customer support and after sales service is the main the issue here. In terms of
quality service and support, they need to prepare their sales & service team
active all through the year so that Energypac can retain it’s customers forever.
Third, Special spotlight on Industrial corporate clients and Panel builders as their
target consumer (Niche Marketing): In spite of taking the huge target market and
a huge amount of money on advertisement and competing with other brands,
Energypac can target this specific group of customers for half yearly meeting
with entertainment scopes. If they can manage to do so, they will be able to
retain their customers as well get loyal customers by doing such promotional
activities.
Fourth, Energypac should create a solid brand image among the consumers
through consistent marketing strategy: Energypac’s marketing strategy is very
poor has a very poor brand image among the customers. While marketing their
ABB low voltage components, Energypac should focus on delivering one single
theme about the product to its target market. This is important because we saw
respondents are unable to show any single reaction to this brand. Therefore with
an ‘integrated marketing communication” Energypac can build better brand
awareness. For this they can implement the following steps;
1. Specialize on specific features of product.
2. Promote their product by associating with other products or events like
annual meeting with customer..
11

12. Energypac - LVCD
3. Provide intense customer service and after sale service.
Fifth, Persuade ABB to lower the price on imported ABB items. One major
problem that Competitors price is comparatively lower than ABB. Moreover lower
middle class customer is interested to purchase from Nababpur with cheaper
price.
Sixth, No Warranty unless clear payment. Energypac can form a policy
regarding warranty of the product to their target customer in such a way that,
warranty will be given only after receiving full payment from customers.
Seventh, Energypac can take security deposit from repeated customers. As a
result of that, the company will be in safe side regarding credit payment status. If
any customer wants to delay the credit more than six months then this security
deposit can at least save some portion of credit risk.
Eighth, Energypac can make a long term agreement with their potential
customer by doing a master agreement with them. This master agreement will
include all the terms and conditions.
Ninth, In some cases Head of the LVCD should go and meet with corporate
client for solving critical issues with the Sales team member. From the study it is
found that department head should be little more active and need s to actively
participate and involve in negotiating some critical issues.
Tenth, Motivation through job security and salary enhancement. From the study
we have found that, employees are more or less demotivated. Department head
should communicate with HR department to know the status of each employee
and by monitoring performance of each employee, they can enhance salary or
secure job.
12

13. Energypac - LVCD
Eleventh, Energypac should arrange sales training for LVCD Sales officers to
improve their personal sales skills under expert supervision and proper
guidance. It is very essential to give them proper sales training.
Twelfth, Energypac should set a sales target for each individual sales officer
which is achievable. Based on their performance, willpower, strength we have
found that too some extent, target is too high to achieve for some of them.
CONCLUSIONS FOR THE OVER ALL RESEARCH:
In our conclusion part we can mention that ABB is the market leader in
capturing low voltage components in Bangladesh. But through our research we
have found some critical issues, which provide the negative impact on the LVCD
of Energypac Engineering Limited. But they can come up with solution under
strong research and development procedure and promotional campaign. In our
marketing research we have found out that our hypothesis about ABB and other
competitors were more or less correct.. So there is opportunity for ABB to raise
its market share under proper guideline as their popularity is has raised and in
terms of brand value and image.
13