Summer Training Report On A study on Market Potential of Bajaj Iron in Bhubaneswar & Cuttack Market At Bajaj Electricals Limited

Bhubaneswar

Saikat Modak Roll No. 08dm041 Batch 2008-10

Under the guidance of

Company Guide
Mr. Dhananjaya Mishra (Area Manager) & Mr. P.K Tripathy (Sales Manager)

Institutional Guide
Prof. Tanmoy De

Research Methodology:
Nature of Study: Quantitative Research Approach: Market Survey on Retailers Data Source: Primay source Sample Size: Sample Size is 79. Respondent Coverd: In Bhubaneswar 52 retailers has been covered and in Cuttack 27 retailers has been covered. Methodology: Descriptive Study, Survey through questionnaire on the retailers in Bhubaneswar and Cuttack market. Research Approach: Survey Research instrument: Open ended questionnaires Sampling Plan: Stratified Sampling,

Bajaj Group

History Bajaj Electricals Limited

SBUs of BEL:

Bajaj Electricals Ltd. Engineering & Project Lighting & Luminaries

Appliances

Fans

BEL Products:

Segment Revenue:
RS. In lakhs. 2007-08 a) Lighting b) Consumer Durables c) Engineering & Projects d) Others Sub-total Less: Inter segment Revenue Net Sales / Income from Operations 40,729.19 60,316.04 36,271.29 131.09 1,37,447.61 1,37,447.61 2006-07 32,670.64 44,539.56 30,519.35 156.61 1,07,886.16 1,07,886.16

Human Resource Development of BEL Social Responsibility R & D of BEL Marketing Strategy of BEL

Capital Structure Period From 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 To 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 Instrument Authorized Capital (Rs. cr) 20 10 10 10 10 10 10 10 10 10 10 Issued Capital (Rs. cr) 17.29 8.64 8.64 8.64 8.64 4.32 4.32 4.32 4.32 4.32 4.32 -PAIDUPShares (nos) Face Value 17285760 10 8642880 10 8642880 10 8642880 10 8642880 10 4321440 10 4321440 10 4321440 10 4321440 10 4321440 10 4321440 10 Capital 17.29 8.64 8.64 8.64 8.64 4.32 4.32 4.32 4.32 4.32 4.32

Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share Equity Share

From the graph of EPS we can say profit for equity share holders increased in each year. But it has decreased in FY07-08.

Iron Models
MX 21 Steam Iron MX 13 Steam Iron MX 15C Steam Iron MX 12 Steam Iron

M.R.P (in RS.)

2495/2095/1995/1995/-

MX 9 Steam Iron MX 9C Steam Iron MX 7 Steam Iron MX 3 Steam Iron Travel Iron TX 7 DX 7 Iron DX 6 Iron New Light Weight Iron DX 5 Light Weight Iron DX 3 Iron Glider Iron Popular Iron Auto Standard Iron

1595/1795/1095/795/1099/859/799/649/699/575/649/499/799/-

Demand Graph in Bhubaneswar Market:

The demand of Bajaj is 54%, demand of Vijay is 17%, demand of Maharaja is 5%, demand of CG is 5%, demand of Philips is 5%, demand of Usha is 4%, demand of LG is 2%, demand of Orpat is 3%, demand of Murphy is 0.21%, demand of Kenster is 2%, demand of Prestige is 2% and the demand of the other locals brands is 1%.

Monthly sale of Iron in Bhubaneswar market:

Market share for Iron in Bhubaneswar market:

Here market share of Bajaj is 48%, market share of Vijay is 16%, market share of Maharaja is 5%, market Share of Philips is 4.5%, market share of Usha is 3.5%, market share of Orpat is 2.2%, market share of Prestige is 2%, market share is Kenster is 2%, market share of CG is 4.5%, market share is LG is 2%.

Scenario Analysis for Bhubaneswar to find out the no. of potential customer:
Bhubaneswar Year 2001 1991 1981 1971 Total Population 648032 411542 219211 105491 No. of households 144279 91626 48805 23486

Growth rate for households 1971-81 Growth rate for households 1981-91 Growth rate for households 1991-01

52% 46% 37%

Now we can calculate it in two ways one is optimistic and an another is pecimistic. In optimistic way we can assume that the growth rate of households will be 30% from 2001 to 2011. If it will be 30% then the number of households in Bhubaneswar will be like fillowing:
Growth rate for households 2001-11 Year 2011 Total Population 842441 30%(assumed) No. of households 187562

If the number of households will become 187562 in Bhubaneswar in 2011, then we can assume that the total number of households is almost same as 2011 in 2009.

Now in pessimistic we can assume that the growth rate of households will become 22% from 2001 to 2011
Growth rate for population 2001-11 Total Population 790599 22%(assumed) No. of households 176020

Year 2011

If the number of households will become 176020 in Bhubaneswar in 2011, then we can assume that the total number of households is almost same in 2009 also.

Market Share of various model of Bajaj Iron in Bhubaneswar:

We can see that out of that 19460 pcs Popular Iron is selling 41.8%, DX3 is selling 8.9%, MX21 is selling 0%, MX15C is selling 0%, MX3 is selling 3.4%, MX13 is selling 0.21%, MX12 is selling 0%, MX9C is selling 0.1%, MX9 is selling 0.4%, MX8 is selling 0%, TX7 is selling 2.6%, MX7 is selling 2.6%, DX7 light weight Iron is selling 19.7%, New light weight Iron is selling 4%, DX5 light weight Iron is selling 6.2%, Glider Iron is selling 4.7%.

In Bhubaneswar average annual consumption is 375.

The average selling price of Bhubaneswar is Rs.200444/-

Calculation of Market Potential:

Market Potential = (Market Share) * (Number of potential customer) * (Average annual consumption) *(Average selling price)
For Bhubaneswar Market Market Share = 48% Average annual consumption= 375 Average selling price= 200444 If we go by optimistic then the number of potential customer = 187562 Then the Market Potential = 0.48 * 375 * 200444 * 187562 = Rs.6767221955040/If we go by pessimistic then number of potential customer will be = 176020 Then the Market Potential = 0.48 * 375 * 200444 * 176020 = Rs.6350787518400/-

Demand graph in Cuttack:

The demand of Bajaj is 47%, demand of Philips is 8.50%, demand of Vijay is 1.50%, demand of Usha is 0.8%, demand of Maharaja is 4.80%, demand of LG is 1.1%, demand of CG is 6.30%, demand of Orpat is 2.70%, demand is Kenster is 0.35%, demand of Murphy is 4.40%, demand of others local brands is 22%.

Monthly Sale in Cuttack market:

Here in Cuttack market the monthly total sale of Iron is 2947, out of that number of Bajaj Iron is 1379, number of Philips Iron is 250, number of Vijay Iron is 44, number of Prestige Iron is 0, number of Usha Iron is 24, number of Maharaja is 172, number of LG Iron is 33, number of CG Iron is 187, number of Orpat Iron is 80, number of Kenster Iron is 10, number of Murphy Iron is 130, number of Others brands Iron is 639.

Market share for Iron in Cuttack market:

Here the market share of Bajaj is 47%, market share of Philips is 8.50%, market share of Vijay is 1.5%, market share of Usha is 1%, market share of Prestige is 0%, market share of CG is 6.4%, market share of Maharaja is 6%, market share of kenster is 0.4%, market share of LG is 1.1%, market share of Orpat is 3%, and the market share of others brands is 22%.

Scenario Analysis for Cuttack to find out the no. of potential customer:
The scenario analysis for Cuttack is following
Cuttack Year 2001 1991 1981 1971 Total population 587182 445746 327412 230059 No. of households 101153 76788 56402 39631

We can represent these data through the following graph

The growth rate of the households is following

Growth rate for population 1971-81 Growth rate for population 1981-91 Growth rate for population 1991-01 30% 26% 24%

Now we can calculate it in two ways one is optimistic and an another is pecimistic. In optimistic way we can assume that the growth rate of households will be 20% from 2001 to 2011. If it will be 20% then the number of households in Cuttack will be like fillowing:
Growth rate for population 2001-11 = 20%(assumed)

Year 2011

Total population 704618

No. of households 121383

If the number of households will become 121383 in Cuttack in 2011, then we can assume that the total number of households is almost same as 2011 in 2009.

Now in pecimistic we can assume that the growth rate of households will become 15% from 2001 to 2011
Growth rate for population 2001-11 = 15%(assumed)

Year 2011

Total population 675259

No. of households 116326

If the number of households will become 116326 in Cuttack in 2011, then we can assume that the total number of households is almost same in 2009 also.

Market share of various Iron model in Cuttack:

We can see that out of that 16548 pcs Popular Iron is selling 26%, DX3 is selling 21.8%, MX21 is selling 0.3%, MX15C is selling 0%, MX3 is selling 2.2%, MX13 is selling 0.3%, MX12 is selling 0%, MX9C is selling 0%, MX9 is selling 0.3%, MX8 is selling 0%, TX7 is selling 0%, MX7 is selling 0.6%, DX7 light weight Iron is selling 11%, New light weight Iron is selling 13.5%, DX5 light weight Iron is selling 7%, Glider Iron is selling 16.6%.

 In Cuttack the average annual consumption is 616

The average selling price of Cuttack is Rs.322340/-

Calculation of Market Potential

For Cuttack Market

Market Share = 47% Average annual consumption= 616 Average selling price= 322340

If we go by optimistic then the number of potential customer = 121383 Then the Market Potential = 0.47 * 616 * 322340 * 121383 = Rs.11327932137614/-

If we go by pessimistic then number of potential customer will be = 116326 Then the Market Potential = 0.47 * 616 * 322340 * 116326 = Rs.10855993292636/-

Sales Forecasting:
Sales Forecasting of Bajaj Iron. For sales forecasting regression analysis have been used. Sales Forecasting for Bhubaneswar market To sales forecasting for Bhubaneswar market by using regression analysis first I assumed, The following two equation, Y = na + bX XY = aX + bX2 X = Demand for various retailers Y= Sale for various retailers Then I find out X and Y Then I find out X2. After finding out X2, I find out X2 Here, X = 19524 Y = 19460 XY = 50684220 X2 = 50718672 By putting the value of X, Y, XY and X^2 in those above two equation I got the following two equation 19460 = 52a + 19524b 50684220 = 19524a + 50718672b After solving the above two equation I got the value of the value of a and b a = -1.2 b=1 By putting the value of a and b in the first equation I got the Demand and Sale equation Y = -62.4 + X

Sales Forecasting: Sales Forecasting of Bajaj Iron.

Sales Forecasting for Cuttack market To sales forecasting for Cuttack market by using regression analysis first I assumed, The following two equation, Y = na + bX XY = aX + bX2 Here, X = 16635 Y = 16548 XY = 37572109 X2= 37800651 By putting the value of X, Y, XY and X^2 in those above two equation I got the following two equation 16548 = 27a + 16635b 37572109 = 16635a + 37800651b After solving the above two equation I got the value of the value of a and b a = -3.2 b = 1 By putting the value of a and b in the first equation I got the Demand and Sale equation Y = -86.4 + X If the demand changes then accordingly sales will also change. So now we can calculate that with the % change of demand how much the sales will change for Cuttack market. The calculation will be done through the above equation.