You are on page 1of 13

PROJECT SYNOPSIS

MARKETING STRATEGY OF AIR-CONDITIONING COMPANIES

Title of the Project:


Marketing Strategy of Air-Conditioning Companies

Statement of the problem:


This particular topic is chosen as this can cop up with market competition which encourage the air-condition end users for using the product of different companies with multiple specifications / features. Comparison: 1. BLUE STAR Vs 1. Voltas Ltd 2. Carrier Aircon Ltd 3. LG Air Con Ltd. Bluestar is famous for its wonderful product innovation as per market requirement on his factory with their own R & D people. All other competitors have similar strategies like strong dealer network, credit facility and discount to dealer, customer care. Bluestar manufacture all types of airconditions starting from window AC, split AC, VRF to Central Airconditioning systems & provides turnkey solutions to their customer. Other companies like Voltas, Carrier & LG, they are selling their AC on technical collaboration with other companies or import the product from outside. Exa: For VRF Air conditions, Carrier tie-up with TOSHIBA, LG-Import the ACs & Voltas tie-up with MEDIA.

Chapter Scheme:
1. Introduction 1.1 Air-conditioning Industry 1.2 Definition of Air-condition 1.3 Different types of Air-condition 2. Objective of the Study 3. Research Methodology 3.1 Limitations 4. Marketing Strategy 5. SWOT Analysis 6. Conclusions--Recommendations 7. Annexure 7.1. Questionnaire 7.2. Bibliography

1.1GENERAL INTRODUCTION
Few years ago liberalization was not there in the Indian market. But slowly and

gradually scene changes and liberalization paves its way in the Indian market. Advent of liberalization policy has changed the whole scenario. Liberalization policy Leads to entry of MNCs Leads to technological Advancement Leads to Fierce Competition Which inturn Makes the Customer a King Therefore, today's winning companies are those who succeed best in satisfying target customers. In other words winning companies are those who provide value for money. They are market focused and customer driven, rather than solely product focused or customer driven. The most wrenching change that the business scenario is experiencing involves acquiring a strategy to cope with liberalization. Rising temperature and unexpected climate has lead to the invention of Airconditioner system. Thus this leads to birth of new industry known as AC Industry. I have decided to conduct a Market research on Air Conditioners. And I have selected exploratory design to conduct the market research because it is the most sound research design that is likely to achieve my research objectives. My goal is to explore rather than conclude on the level of awareness that people have about Air Conditioners. I was interested in knowing the expectations and apprehensions people have from the company. The Exploratory studies are used to seek small-scale information rather than definite results. I also analyzed that this research design is relatively inexpensive as compared to other research designs. The main focus of this report is to study the customer satisfaction level with the product performance.

1.2 DEFINITION OF AN AC
Air conditioning is simultaneous control of air for: Temperature control Air freshness Filtration, Dehumidification within a confined space. In other words, AC is defined as a process, which heats, cools, cleans and circulates air and its moisture content. Components of an Air Conditioner The Air-conditioner consists of the following components 1. A Cooling Coil (evaporator coil) 2. A Condenser Coil 3. A Compressor and 4. A Fan Motor Working of an Air-conditioner A Window air conditioner cools room air by means of refrigerant. The refrigerant absorbs heat from air and becomes vapour as it flows through the evaporator. A compressor pumps the vapour to condenser, which discharges the heat and turns the vapors back to liquid. Three important working cycles of an AC are:

1. Room side close cycle 2. Outdoor open cycle 3. The Refrigerant cycle The room side close cycle AC sucks the hot air from the room. The air is cooled, dehumidified and redelivered back to the room, during the process the room gradually becomes cold. Outdoor open cycle The fan on the condenser side sucks the air from outside atmosphere and delivers it back to the atmosphere after taking the heat from the condenser coil. The refrigerant cycle The closed cycle in which compressor compresses the refrigerant gas and delivers it to the condenser coil and then to the evaporator coil and back.

1.3 Type of Air-Conditioners:


Window AC Window AC is the most compact, versatile and cheapest air-conditioning system. It has the advantage of using single motor for both compressor and cooling side. It also takes motor for both compressor and cooling side. It also takes into advantage of the usage of humidity, which is absorbed, from cooling sides to lower temperature of condensing side. Split A.C. It is the most versatile and cheapest air-conditioning system where window ACs cannot be provided. It has the advantage of cooling any place irrespective of its location and just need a passage three inch in diameter so as to connect both sides of split AC. In split AC area covered is higher than the window AC. Package A.C. It is used for larger areas where the tonnage is higher (approx.3.0 tonne-15 tonnes). It consumes less power. Central A.C. It is used for cooling the area where the tonnage required is more than 50 tons. Though the capital cost is higher but the running cost is very economical. In central air conditioning a final air-conditioning is done through cold/hot water running through tubes. VRF air conditioning:Its a type of split AC where the flow of refrigerant is variable.

(2).Objectives & scope of study:


Primary Objective : The main purpose of this study is to determine different strategies that are adopted by the companies to achieve their targets. Moreover the strategies will be evaluated to see which is best amongst them.

Secondary Objective The secondary objective of the research is to find the image of the companies among the customers. In brief Objectives include Analyzing the Market strength of Companies (Like Blue Star, Voltas, Carier , Daikin, Toshiba, Samsung, LG, etc) Identifying potential market for launching new product and increasing sales of Existing ones Explicit feed back on product performance Determine relative quality perception among different companies.

(3). RESEARCH METHODOLOGY Secondary Data


I have used the secondary data relating to companies and have collected following information about various companies , the technology being used by company, their marketing strategies & information about their competitors.

All this information has been collected from the site www.ishrae.org ,www.ashrae.org, www.yahoo.com, search engine of Google, magazines such as Business India,Air conditioning Journals etc.

Primary Data
I have used personal interviewing where primary data can be directly collected from respondents. The desired information was secured using Questionnaire.At times I also asked questions as to why the respondent has chosen AC of a particular company or what made him feel about that choice. I was keen to ensure that the respondent was taking interest while filling the questionnaire. This ensured collection of unbiased and accurate data.To know the brand awareness, consumer perception about Blue Star, Voltas,Daikin..etc and their satisfaction level, the consumer personal survey was undertaken which was based on nondisguised structure questionnaire.

(3.1) LIMITATIONS
Some of the dealers as well as the customers were not forthcoming with information as they thought it to be a waste of time. Some customers were not able to respond due to lack of awareness. 1) A number of dealers were biased towards a particular brand which was giving them better returns. 2) Some of the shop owners were not available so, contacted person was not able to present a fair view. 3) Respondents lack of time to give information and their casual attitude was a big hindrance in the study. 4) The dealers were biased by some recent experiences which they had with a Particular distributor regarding the service or distribution.

4. MARKETING STRATEGIES
Product Awareness

Advertising is the main tool in the hands of the companies so as to make the consumers aware regarding the different products available in the market. Above all Advertising is a good business. Advertising is the marketing force, which helps in mass selling and distribution. The companies gives their advertisements through

_ Road side hoardings, banners & signboards _ Newspapers like Times of India, Hindustan Times, Navbharat Times _ Magazines like India Today, Business Outlook, etc. _ It is about to begin with TV Advertisements Consumers come across advertisements for their brands everywhere - television, print, posters, Internet and through sponsorships and goodwill campaigns. With the changing face and speed of communication today, the companies are focused on using media specific to audiences. Strong Dealer Network

The Companies have got a strong dealer network all over India and the products are available in each town and area. Credit Facilities & Discounts to dealers

Dealers, retailers, sub-dealers are also vital to be due to be given due importance. It is also necessary to understand the dealers, retailers, and sub-dealers because they are one of the important people who can push the sales of the companies. It was found that dealers mainly want that the companies should give them credit facilities and discounts. Companies like VOLTAS, BLUE STAR are the overall winner in its category. And according to them the dealers are also the controller of the sales to some extent. One of the important information is that most of the dealers ask the customers to wait and assure him the delivery if the particular brand is not available. For Example, BLUE STAR comes out with new schemes for dealers every month for special promotions. Special margins are made available to dealers from time to time. Overall the company operates as many as half-a-dozen schemes at any given time. Moreover the company ensures that dealers accounts are reconciled every quarter. Customer Care

It was found that the companies are more or less analyses what customers are looking for and then incorporate those features in their products. The companies provides quick & efficient after sales services. The service mission of BLUE STAR, VOLTAS are to become the most customer-oriented company in the country, by building a proactive service organisation that continuously strives to create customer satisfaction, by internalising the best practices of customer relationships management.

5.SWOT ANALYSIS OF BLUESTAR India Ltd.


STRENGTHS: Only Blue Star manufactures open-type centrifugal chillers with ozone friendly refrigerant HCFC 123 Only Blue Star manufactures variable air volume systems for economic localized cooling control Only Blue Star manufactures air handling units with dependable ratings to factory precision and the widest choice with single skin, double skin, horizontal, vertical, ceiling suspended and unitary. Air-conditioning of the largest number of synthetic fiber plants in India exceeding 25,000 Tons and 36 customers Largest Industrial air-conditioning contracts in India - RBI Note Mudran Private

Limited: Rs.40 crores. First to manufacture semi hermetic reciprocating compressors in India to international standards First air-conditioning company to introduce the concept of a Comfort Shop. It has a strong setup, Willis Carrier Engineering Center, to provide technological support to develop new products and upgrade existing ones. WEAKNESSES: Considered as premium brand so middle class people think it is unaffordable. Although BLUE STAR protects its Position in Domestic AC market but is regularly losing market share. Market penetration is still very low. Low qualities resulting in exports prices being non competitive. OPPORTUNITIES: Confederation of Indian Industry (CII) has urged the government to reduce special excise duty (SED) on air-conditioners from 16% to 8% in the forthcoming budget. Opportunity to influence Growing Indian middle class in influencing their decisions with regard to the products offered by Blue Star through comparatively lower prices. Advent of Internet provides an excellent opportunity to reach to a large base of customers and cut costs. The increasing presence of multinationals in India for manufacturing be it Samsung, LG, Carrier, Hitachi, thus providing an opportunity for upgrading the quality of manufacture in the country. THREATS: Likely to face fierce competition from domestic companies as they have well acknowledged brands, an extensive distribution network and better insights about the local market conditions. Increased threat from cheaper imports, especially from China MNCs like Samsung, Carrier & LG are continuously raising their share while Blue Star despite of increasing sales is losing its market share.

(6).Recommendations:
In the coming years competition will intensify more, so companies will have to fight hard to woo the customers. Crucial role facilitates price control. In other words, lower down its cost of production. Companies should improve there after sales service & should go for warranties for long durations. Companies should also come up with the new schemes for the customers. This will help in attracting more and more prospects. It was found that most customers owning ACs were interested in an exchange offer. So, companies can also consider exchange offer scheme to beef up its sales. Electronic media has a very effective reach in each and every potential household, but Indian Companies are not using this media. So Indian AC companies should stress on electronic media to beef up its sales.

The Advertisement should be such that customer develops an emotional attachment with the product. Companies should come out with 0% Finance Scheme. Due to this scheme more and more prospects will enter into the customer base of companies. The product must be available at most of the places keeping in mind that the distribution cost should remain minimum. Last but not the least the AC companies should introduce their consumer electronics products. Such as Television and washing machines.

(7.1)QUESTIONNAIRE Name: ____________________________________ Address: __________________________________ Occupation: _______________________________ Age: ______________ Gender: __________ 1)Are you aware of ACs? (a) Yes _ (b) No _

2) How did you come to know about the ACs? _ Television Ads _ Magazines _ Newspaper _ Internet _ Any Other 3) Do you have a AC? (a) Yes _ (b) No _ 4) Are you satisfied with your AC & the after sales service provided by the company? _ Yes _ No 5) What do you like the most about the ACs? _ Looks _ Price _ Durability _ None 6) Do you have any idea about the main components of AC _ Yes _ No 7) If you have to buy one more AC then of which brand would you prefer most? _ Blue Star _ LG _ Samsung _ Voltas _ Carrier _ Hitachi _ Any Other

8) What is your opinion regarding purchasing ACs? _ Reliable _ Long Lasting _ Technologically strong _ Innovative _ None 9) Any changes which you would like to bring among Blue Star ACs. _ Improve Quality _ Increase variety _ Reduce Prices _ Introduce more schemes _ No Change

(7.2)BIBLIOGRAPHY

MAGAZINES:

_ Advertising and Marketing. _ India Today. _ Air-Conditioning Journals


INTERNET SEARCH:

_ www.bluestarindia.com.

_ www.encyclopedia.com.
__ www.ishrae.org __www.ashrae.org __www.voltas.com BOOKS REFERRED:

_ Kotler, Philips. Marketing Management, New


Edition, 2000.

Millennium