Presented By Group 1

BACKGROUND
Deals in Stationary Air Compressors Market share 30% Manufactures 3 main products

y Reciprocating compressors y Rotary compressors y Centrifugal compressors

Introduction of a new 200Hp Centrifugal model CENTAC 200

STATIONARY AIR COMPRESSOR MARKET

Classification of Products by size

y Small - less than 25 Hp y Medium 25 300 Hp y Large greater than 300 Hp

Market size in 1985 - $660 million Ingersoll Rand leading supplier in the US capturing 30% of the market Major players
y Joy (Centrifugal Compressors) y Sullair (Rotary Compressors) y Atlas Copco ( Stationary Compressors)

STATIONARY AIR COMPRESSOR DIVISION

Ingersoll Rand Sales in 1985- $2.64 billion Manufacturing operations 16 countries Sales office- 40 countries Distribution Arrangement 80 countries Very good network of distribution

DISTRIBUTION SYSTEM

Four types of Distribution Channelsy y y y

Direct Sales Force Independent Distributors Air Centres Merchandising Teams

Direct Sales 26 Territories

y Sales of >250 Hp Recips & 450 Hp Rotaries and all

Centrifugals

Distributors & Air Centres

y Sales of <250 Hp Recips & < 450 Hp Rotaries

Merchandising Team
y Sales of Recips < 5Hp & under

BUYING BEHAVIOUR

Direct Sales y Large Compressors (>300Hp) purchased by Contractors like y y y y y

Bechtel, General Motors. Used in custom designed products. Quotations contained detailed specifications High degree of technical expertise Service requirements are complex Eqpt being costly buying decision taken by the group. Lead time of 6 8 weeks acceptable to user.

Distributors & Air Centres

y Selling of medium & Small compressors y Off-the-shelf availability y Lead time of 1 weeks

Merchandising Teams
y Selling of less than 5 hp compressors. y A different set of customers, plumbers, Small contractors etc.
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PROBLEM - INTRODUCTION OF NEW PRODUCT IN MKT

Product Model Spare parts reqmt

Centrifugal compressor (200 Hp) CANTAC 200 Less 2 3% of initial cost per annum.

Operates @ very high speeds

50000rpm

Repairs

Regularly required

PROPOSE A CHANNEL OF DISTRIBUTION

OPTION 1 - DIRECT SALES

Advantages
y Availability of trained manpower y It has well established Service Capabilities y Availability of Spare parts as and when required

Disadvantages
y Not a lucrative offer as the Sales reps are Elephant hunters,

they go for Large orders y The product would be a lower category product which would not interest the Sales rep y Existing set of customers Do not fall in 200 Hp category y Difficult to get new customers considering Network constraints
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OPTION 2 - DISTRIBUTORS & AIR CENTRE

Advantages
y Willingness to upgrade their product range from Small & y y y y y

Medium to LARGE. Well established Network The product is consistent with existing Hp assignment Good reward for the Distributor IR would be motivating them to sell the new product. Increase in Loyalty quotient with IR The product requires less spare parts, while distributors face a problem of supplying spare parts.
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OPTION 2 - DISTRIBUTORS & AIR CENTRE

Disadvantages
y Deviate attention to Large compressor y Intense Technical Training required to provide required

services y Risk of being dependent on a particular channel

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GROUP RECOMMENDED OPTION

Option 2 - Distributors recommended Provide necessary trainings

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ROTARY SCREW
Oil Flooded- Single Stage Advantages
y y y

Low 1st cost; Low maintenance $ Simple packaged design Adaptable to variable speed drive Somewhat lower efficiency Moderate durability - 10 15 years on average
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Disadvantages
y y

CENTRIFUGAL COMPRESSORS

Advantages
y y y y

Only real option over 600+ Hp High air quality- 0 PPM oil carryover Moderate to high efficiency Longer design life than Rotaries Higher initial cost Fluid cooled only Power reduction down to 70% flow Constant speed operation
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Disadvantages
y y y y

QUESTIONS IF ANY ???...

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THANK YOU
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