Description
It explainsincludes the marketing strategies of bluestar ltd., SWOT analysis of Blue Star company, industry trends of air conditioning industry, market share of various companies in air conditioning industry.
BLUESTAR Ltd. Marketing Strategy of the Company
COMPANY PROFILE Blue Star Limited (initially known as Blue Star Engineering (Bombay) Pvt Ltd) was found by Mohan T. Advani in the year 1943. The initial sector of the Company was in the reconditioning of refrigerators and air-conditioners. In today?s date, Blue Star is India's largest central air-conditioning company with an annual turnover of Rs. 600 crores and it has a network of offices in 29 cities and also owns three modern manufacturing facilities. Blue Star became a public limited company in 1969 with its corporate headquarters located at Kasturi Buildings in Mumbai. Blue Star is India's largest and most wanted air-conditioning and commercial refrigeration company. With sixty years of experience in providing expert cooling solutions, Blue Star has been associated with most prestigious corporate and commercial installations in India.
LARGEST SINGLE SOURCE OF AIRCONDITIONING EQUIPMENT Blue Star is the largest single source for air-conditioning equipment in India. It offers the widest range of air-conditioning products - window and split air conditioners, air-cooled/ water-cooled packaged air conditioners, centrifugal, absorption, reciprocating scroll, rotary screw chillers, variable air volume systems, fan coil units, air handling units, etc. If Blue Star were to be defined it would be put in the following way: Never seen, never heard, yet quietly at work in homes, hotels, offices, factories, showrooms, airports, laboratories, satellite launch stations, hospitals all over India and abroad. That's Blue Star air-conditioning. International Partnerships In its eagerness to provide the most advanced air-conditioning technologies, Blue Star has entered into several technical collaborations with York International, USA, Rheem Manufacturing Co., USA and Climatrol, Italy for the manufacture of air-conditioning equipment - centrifugal chillers, reciprocating chillers, screw chillers, air handling units.
ECO FRIENDLY Blue Star has made noticeable progress towards minimizing and even eliminating the environmental hazards resulting from CFCs in certain refrigerants used for cooling. As a matter of fact, Blue Star is one of the few companies selected in India for funding by "The Multilateral Fund for the implementation of the “MONTREAL PROTOCOL”. Blue Star has already introduced 'ozone friendly' centrifugal chillers using HCFC-123, the safe refrigerant replacing CFC-11. Blue Star also markets absorption chillers, which use water as refrigerant. All Blue Star reciprocating chillers already use HCFC-22 refrigerant, which is friendlier to the environment than the older R-12. The Company actively promotes wider use of large refrigeration systems using ammonia as the refrigerant. In fact, Blue Star is a member of the International Institute of Ammonia Refrigeration, USA.
CROSSING INDIA'S BOUNDARIES Blue Star's air-conditioning expertise extends beyond Indian horizons, from Indonesia in the East to Libya in the West. Blue Star has competed with other European companies on International terrain and satisfied demanding foreign consultants. STRATEGIES FOR GROWTH Blue Star has identified mega air-conditioning projects within the country and abroad as an opportunity area for growth. At the other end of the spectrum, the Company has aggressive plans to enhance its share in the growing market for window and split air conditioners, with a specific focus on corporate and commercial customers. Blue Star has ambitious plans to expand its commercial refrigeration business as well. Encouraged by the recent break-through orders from Sri Lanka, Yemen, Maldives and Armenia for water coolers, room air conditioners and packaged air conditioners, the Company wants to strengthen its exports operations as well.
MARKETING STRATEGIES ? Product Awareness Advertising is the main tool in the hands of the company 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 company gives their advertisements through ? Road side hoardings, banners & signboards ? Newspapers like „Times of India?, Hindustan Times?, „DNA? ? 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 company is focused on using media specific to audiences. ? Strong Dealer Network The Company has 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 company. It was found that dealers mainly want that the company should give them credit facilities and discounts. BLUE STAR is 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 dealer?s accounts are reconciled every quarter. Customer Care It was found that the company more or less analyses what customers are looking for and then incorporate those features in their products. The company provides quick & efficient after sales services. The service mission of BLUE STAR is to become the most customeroriented company in the country, by building a proactive service organization that continuously strives to create customer satisfaction, by internalizing the best practices of customer relationships management.
OBJECTIVES OF THE COMPANY • To gain consistent customer?s confidence through product quality & efficient & effective service. • To continually enhance Company?s worth to its shareholders and investors through sound investment and profitable operation. • To demonstrate a real concern for its employees and to constantly improve the quality and value of their job and career advancement. • To be a good corporate who contributes positively to its community by protecting the environment and working for public welfare • To respect the laws, rules and customers of the land and to ensure that the conduct of all company activities will always be to the highest ethical standards • To identify and determine suitable marketing strategic for boosting up the market share of AC, particularly for Blue Star Ltd • To make a detailed study of the Ac?s, in terms of its existing market size and future market potential. SWOT ANALYSIS OF THE BLUE STAR COMPANY 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. It has successfully introduced finance schemes that have taken airconditioners out of the luxury category and made it affordable for the homebuyer.
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 noncompetitive. 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 ? MNC?s like Samsung, Carrier, LG and Voltas are continuously raising their share while Blue Star despite of increasing sales is losing its market share. INDUSTRY AND MARKET OVERVIEW The air-conditioning industry has a total market size of approx. Rs. 1500 crores. It can be classified into windows, split, packaged and Chiller Airconditioners. The split is divided into ducted and non-ducted. The window and split AC have a current market of Rs. 900 crores and the central including Chillers command a market of Rs. 600 crores. The Government Policy Regarding AC’s The attitude of the government to the industry in general has been influenced by the perception of white good as a luxury item. Only after 1993 did the government liberalize its attitude towards white goods. Till 1994, excise duty on AC?s varied from Rs.7, 000/- for 0.5 tons AC?s to Rs. 9,000 for 1.5 tonne models. In the 1994-95 to 1996-97 budgets, the govt. gave considerable relief to the Air-conditioning sector. The excise duty was reduced from 80% to 60% in 1994-95 and from 60% to 30% in the following years. In the Exim policy, AC?s continued to be in the negative list, which means they cannot be imported without license or as baggage. Profitability Margins in the industry vary depending upon the segment, model and sizes, between a broad range of 10 to 20%. However margins in the window segment are the least. But these are reasonable in the case of Split AC?s. Even then, for players who have their own Compressor Manufacturing facilities, margins are higher. Margins are highest in Central and Packaged Air-conditioning segments ranging between 20-24%. Important Factors The important factors that govern profitability in the Air-conditioning Industry are Product Technology, Volumes, Distribution Network, After Sales
Service and Aesthetics. Most critical in the Product Technology is the Compressor, which contributes about 40% of the total cost. The most common type is reciprocating compressor. This is well suited for the Indian conditions where dust and ambient temperatures are relatively high. But the wear and tear is quite high necessitating frequent repairs. The rotary compressor is suitable for conditions where temperature does not exceed 55 degree Celsius. Beyond this, its cooling efficiency decreases. Hence it is suitable for coastal areas like Mumbai where temperatures are low as compared to central and northern India. Also it cannot withstand voltage fluctuations, which are common in India and once spoiled it cannot be repaired. But the advantage is that it is much more efficient than the reciprocating one at moderate temperatures, consuming less power with negligible wear and tear problems. The latest compressor technology is the scroll compressors. It has no part, which can cause wear and tear, is very efficient under variety of conditions and can be repaired instead of being replaced. The three world leaders in compressor technology Copeland, Bristol and Tacumbch already have a presence in India through their collaboration with Kirloskar, Carrier Aircon and SIEL respectively. Since this is a volume driven business in the window segment and technology driven in the package segment, distribution network and after sales services are the deciding factors in these two segments respectively. Being a consumer durable industry the activities aspect too is important. While 40 to 45% of the sales in the window segment come from first three months of April to June and the rest from the other months, there is no such seasonality in other segments, so companies have to manage inventory with minimum cost. Market Share In Central Air-conditioning (30 tons and above) This market has remained stagnant since past three years. Margins from this segment are as low as 7-8%, which makes it less attractive compared to others. Leading players in this segment are shifting their focus towards the faster growing segment-Room ACs.
Companies Market Share (%) (Source: FY02 Balance sheet of Blue Star Ltd) Blue Star 38 38 Voltas 17 Carrier Aircon 9 ETA 13 Suvidha 3 KPC/MCO 1 Trane 1 Thermax 9 Others 8
In Ducted System (5-20 tons) This is a segment, which lies in-between central and room ACs. These are packaged air conditioners (PAC), fitted with scroll compressors, which are more reliable because it has only three moving parts within the compressor, compared to 15 moving parts otherwise. And more importantly it ensures saving of energy cost to the consumer. Companies such as Blue star, who are leaders in central ACs are now vouching on about 50% future revenues from packaged air conditioners. Companies Market share (%) (Source: FY02 Balance sheet of Blue Star Ltd) Blue star 33 Carrier 29 Voltas 21 Amtex 7 Others 10 In Mini Split Air-conditioners (1-3 tons) The unitary products would include the window ACs and the mini-splits (without ducts). These ACs are ideal for rooms with low heat loads. They are available in the capacity range of 0.5 TR to 3 TR. The room AC sector caters to residential premises, offices and small establishments. Overall growth rate in this segment is about 15%. Split ACs are so named because the unit is 'split' into two parts. The compressor and the condenser forming an outdoor unit and the cooling coil remaining as an indoor unit. Split units can be with
or without ducts. In PAC?s, the unit is placed in a separate room and the cold air is carried through ducting to the required areas. It is suited for those establishments that are not large enough to go in for a central system. This segment is growing at 25%. With many more show rooms and commercial establishments companies the future looks bright for this segment. Companies Market share (%) (Source: FY02 Balance sheet of Blue Star Ltd) Carrier 42 Voltas 22 Amtrex 14 Blue Star 9 Videocon 3 Godrej 1 Others 9
Recent Developments ? Blue Star at the Threshold of VRF technology. The technology (called variable refrigerant flow or VRF), invented by Daikin of Japan, is now being developed in India by large and established players including LG, Voltas and Blue Star. Blue Star, which currently imports and sells Sanyo VRF units in India, plans to manufacture its own VRF ACs this year, and will position its products competitively against imported ones. ? Blue Star recently executed four major projects to set up perishable cargo handling refrigerated facilities at Ban galore, Pune, Hyderabad and Chennai airports. ? Blue Star, leaders in air conditioning, have air conditioned many prestigious establishments such as Parliament House, Bombay Stock Exchange and Reserve Bank of India. It is this very same expertise that goes into their new window air conditioners. ? Blue Star sets aside Rs 8 crore campaign- The Rs 601-crore Blue Star Ltd central air conditioning and commercial refrigeration major—has earmarked a total investment of Rs 8 crore on a new campaign for this summer, Blue Star Ltd vice-president (marketing) N Sivasankaran told FE. He added: “This is part of our new brand-building exercise for promoting our entire range of Blue Star ACs. The main objective behind the move is to showcase Blue Star?s strengths in providing
?
cooling solutions. The value proposition for the new campaign is „Cooling solutions to help your business do better? ??. Blue Star is planning to widen its reach for its recently launched „Help line Campaign? to many markets in India which will promote its tollfree number 1600-2222-00 to address common customer queries. It includes queries such as what capacity of AC to buy, whether to buy a window or a split AC among other things. Besides, it will also provide an SMS option for cell phone numbers. For the purpose, the company has set up a centralized call center at Thane in Mumbai.
CONCLUSION • Blue Star is the largest single source for air-conditioning equipment in India. • Blue Star is India's largest and most preferred air-conditioning and commercial refrigeration company. • Through its strategic long-term tie-ups with key and critical auxiliary manufacturers, Blue Star provides its customers many benefits. • The brand?s vision is to deliver excitement to the consumers, by providing comfort at its best. • Complete control over core components & technology. • The company has strong potential to grow & that through greater innovations. • In addition to corporate sector the company has the option to step into the local households by understanding their psychology. • Blue Star is India's largest central air-conditioning company. • In short it can be said that the company is still growing by making constant efforts.
doc_428777655.docx
It explainsincludes the marketing strategies of bluestar ltd., SWOT analysis of Blue Star company, industry trends of air conditioning industry, market share of various companies in air conditioning industry.
BLUESTAR Ltd. Marketing Strategy of the Company
COMPANY PROFILE Blue Star Limited (initially known as Blue Star Engineering (Bombay) Pvt Ltd) was found by Mohan T. Advani in the year 1943. The initial sector of the Company was in the reconditioning of refrigerators and air-conditioners. In today?s date, Blue Star is India's largest central air-conditioning company with an annual turnover of Rs. 600 crores and it has a network of offices in 29 cities and also owns three modern manufacturing facilities. Blue Star became a public limited company in 1969 with its corporate headquarters located at Kasturi Buildings in Mumbai. Blue Star is India's largest and most wanted air-conditioning and commercial refrigeration company. With sixty years of experience in providing expert cooling solutions, Blue Star has been associated with most prestigious corporate and commercial installations in India.
LARGEST SINGLE SOURCE OF AIRCONDITIONING EQUIPMENT Blue Star is the largest single source for air-conditioning equipment in India. It offers the widest range of air-conditioning products - window and split air conditioners, air-cooled/ water-cooled packaged air conditioners, centrifugal, absorption, reciprocating scroll, rotary screw chillers, variable air volume systems, fan coil units, air handling units, etc. If Blue Star were to be defined it would be put in the following way: Never seen, never heard, yet quietly at work in homes, hotels, offices, factories, showrooms, airports, laboratories, satellite launch stations, hospitals all over India and abroad. That's Blue Star air-conditioning. International Partnerships In its eagerness to provide the most advanced air-conditioning technologies, Blue Star has entered into several technical collaborations with York International, USA, Rheem Manufacturing Co., USA and Climatrol, Italy for the manufacture of air-conditioning equipment - centrifugal chillers, reciprocating chillers, screw chillers, air handling units.
ECO FRIENDLY Blue Star has made noticeable progress towards minimizing and even eliminating the environmental hazards resulting from CFCs in certain refrigerants used for cooling. As a matter of fact, Blue Star is one of the few companies selected in India for funding by "The Multilateral Fund for the implementation of the “MONTREAL PROTOCOL”. Blue Star has already introduced 'ozone friendly' centrifugal chillers using HCFC-123, the safe refrigerant replacing CFC-11. Blue Star also markets absorption chillers, which use water as refrigerant. All Blue Star reciprocating chillers already use HCFC-22 refrigerant, which is friendlier to the environment than the older R-12. The Company actively promotes wider use of large refrigeration systems using ammonia as the refrigerant. In fact, Blue Star is a member of the International Institute of Ammonia Refrigeration, USA.
CROSSING INDIA'S BOUNDARIES Blue Star's air-conditioning expertise extends beyond Indian horizons, from Indonesia in the East to Libya in the West. Blue Star has competed with other European companies on International terrain and satisfied demanding foreign consultants. STRATEGIES FOR GROWTH Blue Star has identified mega air-conditioning projects within the country and abroad as an opportunity area for growth. At the other end of the spectrum, the Company has aggressive plans to enhance its share in the growing market for window and split air conditioners, with a specific focus on corporate and commercial customers. Blue Star has ambitious plans to expand its commercial refrigeration business as well. Encouraged by the recent break-through orders from Sri Lanka, Yemen, Maldives and Armenia for water coolers, room air conditioners and packaged air conditioners, the Company wants to strengthen its exports operations as well.
MARKETING STRATEGIES ? Product Awareness Advertising is the main tool in the hands of the company 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 company gives their advertisements through ? Road side hoardings, banners & signboards ? Newspapers like „Times of India?, Hindustan Times?, „DNA? ? 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 company is focused on using media specific to audiences. ? Strong Dealer Network The Company has 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 company. It was found that dealers mainly want that the company should give them credit facilities and discounts. BLUE STAR is 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 dealer?s accounts are reconciled every quarter. Customer Care It was found that the company more or less analyses what customers are looking for and then incorporate those features in their products. The company provides quick & efficient after sales services. The service mission of BLUE STAR is to become the most customeroriented company in the country, by building a proactive service organization that continuously strives to create customer satisfaction, by internalizing the best practices of customer relationships management.
OBJECTIVES OF THE COMPANY • To gain consistent customer?s confidence through product quality & efficient & effective service. • To continually enhance Company?s worth to its shareholders and investors through sound investment and profitable operation. • To demonstrate a real concern for its employees and to constantly improve the quality and value of their job and career advancement. • To be a good corporate who contributes positively to its community by protecting the environment and working for public welfare • To respect the laws, rules and customers of the land and to ensure that the conduct of all company activities will always be to the highest ethical standards • To identify and determine suitable marketing strategic for boosting up the market share of AC, particularly for Blue Star Ltd • To make a detailed study of the Ac?s, in terms of its existing market size and future market potential. SWOT ANALYSIS OF THE BLUE STAR COMPANY 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. It has successfully introduced finance schemes that have taken airconditioners out of the luxury category and made it affordable for the homebuyer.
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 noncompetitive. 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 ? MNC?s like Samsung, Carrier, LG and Voltas are continuously raising their share while Blue Star despite of increasing sales is losing its market share. INDUSTRY AND MARKET OVERVIEW The air-conditioning industry has a total market size of approx. Rs. 1500 crores. It can be classified into windows, split, packaged and Chiller Airconditioners. The split is divided into ducted and non-ducted. The window and split AC have a current market of Rs. 900 crores and the central including Chillers command a market of Rs. 600 crores. The Government Policy Regarding AC’s The attitude of the government to the industry in general has been influenced by the perception of white good as a luxury item. Only after 1993 did the government liberalize its attitude towards white goods. Till 1994, excise duty on AC?s varied from Rs.7, 000/- for 0.5 tons AC?s to Rs. 9,000 for 1.5 tonne models. In the 1994-95 to 1996-97 budgets, the govt. gave considerable relief to the Air-conditioning sector. The excise duty was reduced from 80% to 60% in 1994-95 and from 60% to 30% in the following years. In the Exim policy, AC?s continued to be in the negative list, which means they cannot be imported without license or as baggage. Profitability Margins in the industry vary depending upon the segment, model and sizes, between a broad range of 10 to 20%. However margins in the window segment are the least. But these are reasonable in the case of Split AC?s. Even then, for players who have their own Compressor Manufacturing facilities, margins are higher. Margins are highest in Central and Packaged Air-conditioning segments ranging between 20-24%. Important Factors The important factors that govern profitability in the Air-conditioning Industry are Product Technology, Volumes, Distribution Network, After Sales
Service and Aesthetics. Most critical in the Product Technology is the Compressor, which contributes about 40% of the total cost. The most common type is reciprocating compressor. This is well suited for the Indian conditions where dust and ambient temperatures are relatively high. But the wear and tear is quite high necessitating frequent repairs. The rotary compressor is suitable for conditions where temperature does not exceed 55 degree Celsius. Beyond this, its cooling efficiency decreases. Hence it is suitable for coastal areas like Mumbai where temperatures are low as compared to central and northern India. Also it cannot withstand voltage fluctuations, which are common in India and once spoiled it cannot be repaired. But the advantage is that it is much more efficient than the reciprocating one at moderate temperatures, consuming less power with negligible wear and tear problems. The latest compressor technology is the scroll compressors. It has no part, which can cause wear and tear, is very efficient under variety of conditions and can be repaired instead of being replaced. The three world leaders in compressor technology Copeland, Bristol and Tacumbch already have a presence in India through their collaboration with Kirloskar, Carrier Aircon and SIEL respectively. Since this is a volume driven business in the window segment and technology driven in the package segment, distribution network and after sales services are the deciding factors in these two segments respectively. Being a consumer durable industry the activities aspect too is important. While 40 to 45% of the sales in the window segment come from first three months of April to June and the rest from the other months, there is no such seasonality in other segments, so companies have to manage inventory with minimum cost. Market Share In Central Air-conditioning (30 tons and above) This market has remained stagnant since past three years. Margins from this segment are as low as 7-8%, which makes it less attractive compared to others. Leading players in this segment are shifting their focus towards the faster growing segment-Room ACs.
Companies Market Share (%) (Source: FY02 Balance sheet of Blue Star Ltd) Blue Star 38 38 Voltas 17 Carrier Aircon 9 ETA 13 Suvidha 3 KPC/MCO 1 Trane 1 Thermax 9 Others 8
In Ducted System (5-20 tons) This is a segment, which lies in-between central and room ACs. These are packaged air conditioners (PAC), fitted with scroll compressors, which are more reliable because it has only three moving parts within the compressor, compared to 15 moving parts otherwise. And more importantly it ensures saving of energy cost to the consumer. Companies such as Blue star, who are leaders in central ACs are now vouching on about 50% future revenues from packaged air conditioners. Companies Market share (%) (Source: FY02 Balance sheet of Blue Star Ltd) Blue star 33 Carrier 29 Voltas 21 Amtex 7 Others 10 In Mini Split Air-conditioners (1-3 tons) The unitary products would include the window ACs and the mini-splits (without ducts). These ACs are ideal for rooms with low heat loads. They are available in the capacity range of 0.5 TR to 3 TR. The room AC sector caters to residential premises, offices and small establishments. Overall growth rate in this segment is about 15%. Split ACs are so named because the unit is 'split' into two parts. The compressor and the condenser forming an outdoor unit and the cooling coil remaining as an indoor unit. Split units can be with
or without ducts. In PAC?s, the unit is placed in a separate room and the cold air is carried through ducting to the required areas. It is suited for those establishments that are not large enough to go in for a central system. This segment is growing at 25%. With many more show rooms and commercial establishments companies the future looks bright for this segment. Companies Market share (%) (Source: FY02 Balance sheet of Blue Star Ltd) Carrier 42 Voltas 22 Amtrex 14 Blue Star 9 Videocon 3 Godrej 1 Others 9
Recent Developments ? Blue Star at the Threshold of VRF technology. The technology (called variable refrigerant flow or VRF), invented by Daikin of Japan, is now being developed in India by large and established players including LG, Voltas and Blue Star. Blue Star, which currently imports and sells Sanyo VRF units in India, plans to manufacture its own VRF ACs this year, and will position its products competitively against imported ones. ? Blue Star recently executed four major projects to set up perishable cargo handling refrigerated facilities at Ban galore, Pune, Hyderabad and Chennai airports. ? Blue Star, leaders in air conditioning, have air conditioned many prestigious establishments such as Parliament House, Bombay Stock Exchange and Reserve Bank of India. It is this very same expertise that goes into their new window air conditioners. ? Blue Star sets aside Rs 8 crore campaign- The Rs 601-crore Blue Star Ltd central air conditioning and commercial refrigeration major—has earmarked a total investment of Rs 8 crore on a new campaign for this summer, Blue Star Ltd vice-president (marketing) N Sivasankaran told FE. He added: “This is part of our new brand-building exercise for promoting our entire range of Blue Star ACs. The main objective behind the move is to showcase Blue Star?s strengths in providing
?
cooling solutions. The value proposition for the new campaign is „Cooling solutions to help your business do better? ??. Blue Star is planning to widen its reach for its recently launched „Help line Campaign? to many markets in India which will promote its tollfree number 1600-2222-00 to address common customer queries. It includes queries such as what capacity of AC to buy, whether to buy a window or a split AC among other things. Besides, it will also provide an SMS option for cell phone numbers. For the purpose, the company has set up a centralized call center at Thane in Mumbai.
CONCLUSION • Blue Star is the largest single source for air-conditioning equipment in India. • Blue Star is India's largest and most preferred air-conditioning and commercial refrigeration company. • Through its strategic long-term tie-ups with key and critical auxiliary manufacturers, Blue Star provides its customers many benefits. • The brand?s vision is to deliver excitement to the consumers, by providing comfort at its best. • Complete control over core components & technology. • The company has strong potential to grow & that through greater innovations. • In addition to corporate sector the company has the option to step into the local households by understanding their psychology. • Blue Star is India's largest central air-conditioning company. • In short it can be said that the company is still growing by making constant efforts.
doc_428777655.docx