akshaya_4
New member
SUBJECT: - MARKETING MANAGEMENT.
INDEX
SR.NO TOPIC PAGE NO
1. FAN INDUSTRY IN INDIA. 5
2. PROFILE 8
3. PRODUCT 10
4. PRICE 16
5. PROMOTION 18
6. PLACE 20
7. S.W.O.T. ANALYSIS 24
8. S.W.O.T. ANALYSIS OF COMPETITOR 26
9. BIBLIOGRAPHY 28
FAN INDUSTRY IN INDIA
Fans are one of the largest domestic appliances industries in India. Over a number of years no of players have entered the Fan industry and stayed. The notable entrants in the past few decades are USHA (70’s), KHAITAN & POLAR (80’s). However 50% of the market is still unorganized. Such a characteristic has made the industry quite unique and an interesting area of study.
Interesting features of the fan industry
50% of the fan industry is organized.
There is no single market leader.
Fakes and trademark violations are rampant.
Second hand market is very big.
Very low product differentiation between the competing brands.
No major international company has entered into this sector even after liberalization
Rural market constitutes major part of the sales.
INTRODUCTION:
In a hot country like India fans are a relief. Over the years it has come from being hand held banana leaves to remote controlled multicolor designer fans fitted with exotic lights.
The technology involved in the product is low. This has led to a wide proliferation of the industry by many small-scale manufacturers. The competition from small-scale manufacturers is fierce and a continual worrying factor for the organized sector.
Added to this are the necessary trends in the industry whose fortunes lie a lot with the level of housing constructions in the country. Some of the major companies like CROMPTON GREAVES and RALLIFAN no longer generate interests they did a few years ago in their product structure. On the financial front the industry has suffered from a number of product problems. Shortages of working capital and high interest rates have constrained their resources. Rising input costs have hit profit margins. The seasonal as well as cyclical nature of the industry also had an impact. No wonder the production has been erratic. In 1991-92 the organized sector produced 44.01 lakh electrical fans.52.22 lakhs in the previous year i.e. 1990-91 a decline of 15.7%. In 1992-93 was a year of slow down and the sales did not grow. 1993-94 was a recessionary but 1994-95 had about 7 to 8 % growth rate. Next year turned out to be the same.1996-97 was a year of slowdown and the sales of the organized sector did not exceed 50 % of the total industries. The export market had marginal growth 5% in the year 1996-97. 1995-96 however was much better at 33% growth rate. The industry is quite prone to cyclical changes and is presently passing through a bad year.
THE PRODUCT:
The fan industry can be broadly classified on the bases of the products offered. The major products are:
• Ceiling fans
• Pedestal fans
• Table fans
• Wall fans
• Exhaust fans
• Others (include car fans, miniature ventilation fans, etc)
All the above categories combined had an annual turnover of Rs. 1000 Crore in the year 1996-97, registering a 6-7% growth over the previous year.
PLAYERS IN THE MARKET
• USHA -20%
• CROMPTON-20%
• ORTEM-7%
• ORIENT-18%
• KHAITAN-15%
• PADMINI-5%
• POLAR-5%
• OTHERS- 10%(Bajaj, Ravi, singer and some regional brands)
The fan industry undergoes major seasonal and cyclical changes. A year of growth is generally followed by year of slump. However the product is generic to every home the fundamentals of the industry are strong. Essentially being a low technology industry, unorganized sector occupies the same position as the organized sector in terms of sales
There is also a major effort to corner the rural markets, which on an average contributes about 30-40% of the total fan sales in the country. Since any branded products are taken for granted as trustworthy .The companies are trying hard to reach the rural market. The future of the industry seems to be bright as new horizons are added in India every year (any boom in housing constructions will still be beneficial). However there is not enough room for the players in organized sector unless they penetrate unorganized sectors market share. Designer fans are here to stay. More product innovations and devices must bring synergy with growth and eating into the market of AC’s would be beneficial. Given this condition industry is poised for the better returns.
PROFILE OF KHAITAN:
For decades, the Khaitan name has been synonymous with quality fans in India. With 19 offices located across the country, Khaitan has established itself as the undisputed leader in air-management technology. The Khaitan name is renowned for innovations as well which is reflected in the design of pioneering product concepts such as Fresh air fans, and models in the mini category.
Now Khaitan is diversifying even further. Pumps, lights, home appliances, cables, wires and circuit breakers have been added to Khaitan's portfolio. Good quality, great performance and novelty in design are some of the assured features of any product from Khaitan.
As a young entrepreneur in the early 60’s, S.K. Khaitan (chairman) was possessed by a burning desire to push the limits and create new goals for himself. Men like Henry Ford, Thomas Bata, Soichario Honda and J N Tata who had guts to build great brands with their own name, deeply moved him and then he was all set to create Khaitan his family name into a household word as well. Today Khaitan is already a household name and a leading brand through out the country, but the vision continues to grow.
In 1971, Mr. S.K. Khaitan founded Khaitan electrical ltd in kolkata.
Khaitan Electrical earnings from the fan sales were Rs 115 Crore in 2004-05 and it was expected to touch the Rs 150-crore mark in 2005-06. In the last financial year, Khaitan Electrical' registered a gross profit of Rs 5 Crore on a total turnover was Rs 129 Crore. With the introduction of the total electrical solution, the company hopes to cross the Rs 200-crore turnover in the current financial year. The company is exporting to neighboring countries. Exports generate approximately 8 per cent of the company's total sales.
VISION:
In my mind's eye I saw Khaitan fans in homes, offices, shops, factories and godowns. Today, Khaitan is already a household name and a leading brand throughout the country. But my vision continues to grow. Because everyday there is a new horizon to conquer, a new goal to reach.
-S.K. Khaitan.
(Khaitan group of companies)
MISSION:
Today Khaitan takes its place as one of the largest fan manufacturers in India. The winning reputation of the Khaitan name is built on the trust of millions of customers and the spirit of innovation kindled by my father, our Founder and Chairman. It is my mission to take the brand from strength to strength by tapping new markets, creating new models and continuously upgrading quality. After all, my name too is at stake.
-Sunil K.Khaitan
(Vice Chairman Khaitan group of companies)
4 P’S OF MARKETING.
PRODUCT
Khaitan has a huge range of products in each category. The different kinds of fans offered by khaitan are:
CATEGORY TYPES {KHAITAN.} TYPES {ZOLTAS.}
CEILING FANS EPRO: 13
OTHER CELING FANS: 5 8
TABLE FANS 9 -
PEDESTAL FANS 10 -
WALL AND CABIN 9 -
FRESH AIR 13 6
PORTABLE 4 5
The prices of all kinds of product differ. The prices differ on the bases of size, features, and looks.
PRODUCT LINE EXTENSION:
Day by day khaitan is extending its product line. New fans with improved features are being added to the product line. The very recent addition is the companies’ low priced fan zoltas. Initially when khaitan started it started as a company manufacturing only ceiling fans slowly but steadily it started adding and improving its product portfolio. Now along with ceiling fans khaitan manufactures different types of fans. Not only fans, khaitan is diversifying even further. Pumps, lights, home appliances, cables, wires and circuit breakers have been added to Khaitan's portfolio
Khaitan carved a niche for itself in the fan industry by creating new market for exhaust fans with its unique Khaitan fresh air fans. It resegmented the category by positioning Khaitan fresh air fans in the modern day answer to kitchen ventilators and bathroom hygiene. With bathrooms and kitchens becoming more and more compact, Khaitan fresh air fans became an essential accessory for living well. Backed by modern streamlined looks Khaitan fresh air fans also added style to the bathrooms and kitchens.
Khaitan not only offers ceiling fans but also ceiling fan’s accessories such as Resistance type Regulators, “CAPCON” capacitor type regulator, CHANDY (four way light attachment), PRETTY (single dome light attachment)
QUALITY:
Each product is the result of systematically documented Quality assurance Manual. The manual ensures rigid implementation of the quality policy for the Consistent Customer satisfaction. The Consumer Education and Research Society, Ahmedabad has adjudicated Zoltas as the best buy. Although Crompton scored the highest, Khaitan was the best buy since its price was far less than Crompton. Elantra has also won the Mera Brand award. At Khaitan, they have always believed in quality at reasonable prices. In fact, of all their achievements, the one they are most proud of is that of having earned the trust of their customers. The statement "Khaitan- the name is enough” is an expression of the faith that millions have bestowed upon the company.
The untiring quest for superlative quality and innovative design has brought some laurels both at home and abroad. They represent commitment to quality and service.
• ISO 9001 for the Kolkata and Hyderabad factories (including design)
• Awards from Export Promotion Council, Govt. of India
• CE Marking for ceiling fan
• The CSA certification marking, with the adjacent
• Indicator: NRTL/C – Canada
The Research and Development wings at our factories are responsible for producing new designs and product concepts to set the pace for change in the industry
The team of technicians, engineers and management experts constantly strive to improve the energy efficiency, air-delivery and durability of all our products.
They apply strict international quality-standards, using the latest technology to build fans recognized for years of smooth service. All these activities ensure that customers get full value for their money
.
SERVICES
Khaitan believes in quality without compromise. Khaitan has always offered excellent quality and service. Their products are testaments to the belief in excellence and are duly subject to the most stringent quality standards in the world. And as proof of their mettle and faith in quality, they took what may be regarded as the boldest-ever step in the fan industry: the introduction of the Replacement Bond. The Replacement Bond ensures that the customer always comes first. It is a bond signed by the Chairman of the Company, promising to replace any Khaitan fan with a manufacturing defect, discovered within one year of its purchase, with a new one. Till today, the idea goes unmatched by any competitor. This confidence in the fans is a result of dedicated service, commitment to quality and careful attention to detail.
SIZES:
Khaitan manufactures fans of various sizes to meet the consumer and the room requirements.
Ceiling fans:
The Ceiling fans are available in the following sweep sizes:
1400mm, 1300mm, 1200mm are suitable for large Room size.
1050mm is suitable for medium room size.
600mm is the smallest size khaitan offers.
Table fans:
Table fans are available in the following sizes:
300mm, 230mm, 400mm
Fresh air fans:
Fresh air fans are available in the following sizes.
150,230,300 and 400mm
Pedestal Fans
Pedestal fan is available in only one size:
400mm
Wall and cabin fans
Wall and cabin fans are available in the following sizes.
230mm, 300mm, 400mm, 450mm
FEATURES:
Features of all the Khaitan fans are different. But these are some a prominent feature for which khaitan is well known:
• Cost effective
• Large variety
• Less power consumption
• Nice all round performance.
• Strong regulators
• Effective air movement to suit exact requirement for ventilation
• Low temperature rise leading to longer bearing life
• Specially designed blades for better performance and non-overloading characteristics
• Stable speed voltage motor characteristics leading to excellent low voltage performance
• Designed to comply with abnormal test conditions as per international safety standards
• Higher Air Delivery Power Ratio (ADPR) for ultimate performance.
BRANDING:
S.K.Khaitan decided to use his surname ‘Khaitan’ as his brand name and thus it helped him to segment markets by offering different brands with features that suit different segments.
BRAND DECISION NAME:
Khaitan uses its brand name Khaitan for all the products
May it be their exhaust fans or their ceiling fans they are all labeled as Khaitan fans. Thus khaitan uses blanket family name decision to name all its products. But in 2002-it launched its low priced fans under a different brand name-“zoltas”.
BRAND REPOSITIONING:
Earlier khaitan sold fans only for the upper middle class and the middle class consumers.
However in 2002 by launching low cost fans “zoltas “they have repositioned khaitan as an economy fan. Thus they have tried to reach lower end segment.
PRICE:
The dictionary meaning of the word strategy is applicable to the art of general leading of an army. Khaitan has used penetration strategy to get a large chunk of the Indian market.
Khaitan has gone for both up market and down market stretch.
PENETRATION STRATEGY:
The share of unorganized sector in the fan market is almost 50 percent. Buffeted by the stiff competition from the unorganized sector it has used penetration strategy to attract its middle class consumers. Khaitan decided to introduce low cost fans to penetrate the lower end segment. Till 1991 it was a seller’s market. Competition was limited. But then things changed and people became more interested in what they were buying that apart a large no of companies came up in the organized sector, which challenged Khaitan’s monopoly. To survive, khaitan had to improve the product offering and become more contemporary. Besides the company was making losses at those times.
To fight the unorganized sector, which was supplying fans at cheaper rates, Khaitan launched a sub brand of Khaitan fans styled ‘zolta’. Introduction of low-priced fans resulted in improving their capacity utilization and will result in reduced overheads per fan.
Khaitan fans LTD, imported a complete Chinese fan manufacturing process line and techniques to make ‘China type fans’. For the economy segment, The Company’s Zoltas range of fans at Rs. 698 is entirely based on Chinese technology adopted in their plants. It is virtually a fan made in china and matches both locally assembled and imported Chinese fans in Price performance. It sent across its top management team to China less than a year ago, under intense pressure from fans and imports to study how Chinese were making fans as cheap as the local assembled ones. Their success is the result of this initiative. As a result a large consumer segment favored Zolta an instant hit. In fact consumer Education and Research, Ahmedabad has adjudicated Zolta as the best buy.
After dealing with the unorganized market, it was time to take care of the business rivals and attract rich consumers. So the designer fans were launched they too became an instant hit. The price of these fans ranges from Rs. 50,000 to Rs.1, 00,000. These fans too became an instant hit for the upper class consumers.
Khaitan offers fans for all the three segments.
For lower end segment:
For lower end segment it has its separate brand- “zoltas” where the price of the normal ceiling fans start from Rs. 878(600mm sweep i.e. the lowest).
For its middle class consumers:
Khaitan has not disappointed its middle class consumers by offering fans with prices ranging from Rs. 1300(900mm sweep i.e. the lowest.) as against 1400 and 1450 of Orient and Crompton respectively.
For the upper middle class consumers:
Khaitans designer fans range from Rs. 50,000 to Rs.1, 00,000.
PROMOTION
Khaitan though a long standing brand came with a bang in late 80’s and jerked the whole market. Its promotional advertising featured famous personalities like Hema Malini who put the fan in the top league. Infact, Khaitan was the first company to advertise on television.
“Main khaitan fan hoon”-hema malini
This above-mentioned advertisement overwhelmed the television in the last decade and got registered in the customers mind. Recently only, Khaitan Electrical Ltd has roped in Bollywood actress Karisma Kapoor as its brand ambassador. The company has entered into a three-year endorsement contract with Ms Kapoor, who will endorse the company's product range across different categories.
Karishma kapoor during the khaitan commercial shoot.
Being a seasonal industry summers are the hot selling seasons so they have to make the best use of it. Khaitan offers its advertising to McKANN ERICCSON (shifted from HTA after 15 yrs.).Like all the other advertisement commercials khaitan too, highlights on the durability. The main theme of its commercials is to establish its product as a branded product. Since in the market any branded product is deemed to be durable establishing equity on media is quite attractive
SALES PROMOTION
Sales promotion is a major mode of selling for these companies. Every year lots of ads announce Discounts abound in the print media, especially during off-season. Khaitan came with a free silver coin with each product bought. Both, the companies as well as the dealers carry out sales promotion.
PLACE:
CHANNELS OF DISTRIBUTION:
As a company, dealers and distributors play a major role in serving customers, while growing and sustaining markets. Khaitan has a network of over 3500 strong and dedicated distributors and dealers. A network that has helped khaitan’s name and its promise of reliable quality to every part of the country. The power of this highly efficient and motivated network goes a long way to create goodwill for khaitan brand among countless consumers besides creating availability and after sales services.
There are 2 channels of distribution one among them is a direct dealer network. A direct dealer is a dealer who is authorized to purchase the product directly from the company and sell. They have yearly targets given to them by the company .If they succeed in achieving those targets then there is a certain discount, which is offered to them. They are also rewarded on the basis of per fan sold. New plans launch ideas and sales strategies are shared with them at frequent meetings. The same goes with the distributors. The distributor has many dealers under him the distributor commands his margin on sales. Hence the price is likely to be slightly high. Now the company is also planning to roll out “khaitan fantasy” and khaitan city retail outlets. Hence the retail outlets will only have the goods manufactured by khaitan. Khaitan is also looking at launching retail stores, under the Lmart name, at an investment of Rs. 20 crores. These retail stores will stock four leading brands in each category of consumer durables and home appliances along with khaitan products. 20 such stores will be opened throughout the country’
It is also planning to launch its 2 retail outlets-‘khaitan city outlet’ and ‘khaitan fantasy’ outlet
Khaitan fantasy outlets, which will house only designer fans, have opened its first franchise outlet in kolkata. Another 25 fantasy outlets will be opened across the country this fiscal.
PHYSICAL DISTRIBUTION
Khaitan has made its presence felt all over India. The southern part of India contributes about 30% of its sales followed by the northern and the western sector. It is also planning to launch its retail stores all across the major metropolitan cities. Khaitan fantasy outlets will be opened across the country this fiscal. Besides the major metropolitan cities it has also made its presence felt in Himachal Pradesh.
INTERNATIONAL MARKET:
The export market is a potential growth area of the company. Given the reputation for quality, innovative product range, competitive pricing and excellent manufacturing skills they are capable to meet the global demand for excellence. Khaitan is not only an ISO 90001 certified manufacturers; UL of USA, CE of Europe and SABS of South Africa approve its fans. They are already exporting their premium range of fans to countries in Africa, Middle East and Asia including Sri Lanka, Bangladesh, Singapore, Myanmar and Nepal. At the export front, it has started penetrating the European market with an export target of 2 lakh fans in 2006-07 against 78,000 exported in 2005-06 The company is looking to increase its top line from Rs 150 Crore, at present, to Rs 750 Crore
Khaitan electrical ltd may supply fans to global retail behemoth Wal-Mart. Negotiations are at the advanced stage. If the deal goes through Wal-mart would be Indian fan’s major route to U.S. market. According to khaitan officials, discussons have taken place and at the end of this year it expects registration with Wal mart fiscal. The only other fan manufacturers registered with retail behemoth is an Orient fan.
LOCATION:
OFFICES:
The corporate office of khaitan is located in Kolkata. There are 17 branches all over India. They are located at New Delhi, Mumbai, Chennai, Kolkata, Kanpur, Ahmedabad, Hyderabad, Cuttak, Jaipur, Indore, Kochi, Patna, Faridabad, Chandigarh, Banglore and Guwahati.
FACTORIES:
Factories are located in Kolkata, Hyderabad and Potanib. That gives them the capacity to produce a wide range of domestic and industrial fans in many designs, sizes and colors. These factories have the capacity to produce 100,000 a month. The Faridabad factory is company’s R&D hub and earned the recognition of CSIR (Govt. of India.). The kolkata and Hyderabad factories have earned ISO 9001 certificate.
ASSORTMENTS:
Khaitan fans are normally placed at the center of the fan shops along with other brands like Orient and Crompton. Khaitan fancy fans or designer fans are usually assorted at the centre. There are separate racks filled with separate brands. Each rack contains 3-4 fans of the same brand.
SWOT ANALYSIS:
STRENGTH:
Khaitans biggest strength is its market segmentation. Khaitan has low priced fans ranging from Rs. 698 for the economy class as well as designer fans for the premium market ranging from Rs50000 to 100000 and above. Not only is this it also catering to the needs of the middle class consumers. Hence it is catering to the needs of both the segments. Thus khaitan has reduced its risk by not targeting only one kind of the market. It launched its economy fans under the name ZOLTA and not khaitan. This helped them remain loyal to their high-end customers. . Khaitan is not also known for its designs and varieties.
WEAKNESS:
Despite of having such a good brand name, being the first to advertise, being the first to introduce colored fans Khaitan stands second and not first only because of its quality. Though the quality and performance of khaitan fans has been reasonably good it is not at par with orient or Compton. When quality is taken into consideration orient and Compton are anytime better that khaitan and the dealers don’t fail to admit it.
OPPORTUNITIES:
It is expected that there will be 15% growth in demand for fans with a boom in the real estate sector and the market is looking for different models suiting the new pattern for decor and housing arrangements. Thus given its variety and designer models khaitan has great opportunity over the years to come. Moreover Chinese influx in Indian market is likely to end with Chinese government withdrawing manufacturing incentives and appreciating RMB by 10%. This would give Indian manufacturers a more competitive edge domestically as well as globally. Khaitan has a good opportunity for tapping a large percentage of unorganized sector in which the cheap Chinese assembeled fans play a major role. It is also widening its distribution network by opening various retail outlets in many parts of the country. In fact khaitan is targeting 22% of the Indian market by 2010.
THREATS:
A growing unorganized sector is a continual worry for khaitan. The current share of the organized sector is 50% and is increasing at a rapid rate. Khaitan has to be constantly on its toes to advertise their products better at the same time keep the prices low. Other wise the unorganized sector may eat up its market share. Unorganized sector is a big threat to the company.
COMPETITORS:
Khaitan has many competitors in the organized as well as the unorganized sector as unorganized sector supplies fans very cheap rates. Khaitan’s two major competitors in the industry are CROMPTON of Compton greaves ltd and ORIENT of C.K. Birla group. Crompton and Usha command the highest market share in the Indian fan industry i.e. 20% each. Followed by ORIENT, which commands 18% in the industry. Third in the league is Khaitan with a market share of 15%
SWOT ANALYSIS OF COMPETITORS: CROMPTON
STRENGTH:
Crompton has acquired super brand status. Super brand is a unique International recognition that is bestowed on brands that have emerged as icons in their category. In India, a council comprising eminent professionals from the fields of advertising, marketing, research and media was formed to determine India's most respected brands. Crompton is in d list of 134 selected brands. Thus, as a brand Crompton is much stronger than Khaitan. Crompton is a market leader with twenty percent of the market share in organized sector. Crompton scores over Khaitan when it comes to quality. Crompton enjoys a great brand loyalty.
WEAKNESS:
Crompton fans are the costliest ones as compared to the other brands.
OPPORTUNITIES:
Crompton has an excellent brand recall. Considering their market image and market share, there are great opportunities for Crompton as compared to Khaitan. Crompton has a good opportunity for tapping a large percentage of unorganized sectors which contributes almost fifty percent of the total fan sales
THREATS:
A growing unorganized sector is a continual worry for khaitan. The current share of the organized sector is 50% and is increasing at a rapid rate. Khaitan has to be constantly on its toes to advertise their products better at the same time keep the prices low. Otherwise the unorganized sector may eat up its market share. Unorganized sector is a big threat to the company.
INDEX
SR.NO TOPIC PAGE NO
1. FAN INDUSTRY IN INDIA. 5
2. PROFILE 8
3. PRODUCT 10
4. PRICE 16
5. PROMOTION 18
6. PLACE 20
7. S.W.O.T. ANALYSIS 24
8. S.W.O.T. ANALYSIS OF COMPETITOR 26
9. BIBLIOGRAPHY 28
FAN INDUSTRY IN INDIA
Fans are one of the largest domestic appliances industries in India. Over a number of years no of players have entered the Fan industry and stayed. The notable entrants in the past few decades are USHA (70’s), KHAITAN & POLAR (80’s). However 50% of the market is still unorganized. Such a characteristic has made the industry quite unique and an interesting area of study.
Interesting features of the fan industry
50% of the fan industry is organized.
There is no single market leader.
Fakes and trademark violations are rampant.
Second hand market is very big.
Very low product differentiation between the competing brands.
No major international company has entered into this sector even after liberalization
Rural market constitutes major part of the sales.
INTRODUCTION:
In a hot country like India fans are a relief. Over the years it has come from being hand held banana leaves to remote controlled multicolor designer fans fitted with exotic lights.
The technology involved in the product is low. This has led to a wide proliferation of the industry by many small-scale manufacturers. The competition from small-scale manufacturers is fierce and a continual worrying factor for the organized sector.
Added to this are the necessary trends in the industry whose fortunes lie a lot with the level of housing constructions in the country. Some of the major companies like CROMPTON GREAVES and RALLIFAN no longer generate interests they did a few years ago in their product structure. On the financial front the industry has suffered from a number of product problems. Shortages of working capital and high interest rates have constrained their resources. Rising input costs have hit profit margins. The seasonal as well as cyclical nature of the industry also had an impact. No wonder the production has been erratic. In 1991-92 the organized sector produced 44.01 lakh electrical fans.52.22 lakhs in the previous year i.e. 1990-91 a decline of 15.7%. In 1992-93 was a year of slow down and the sales did not grow. 1993-94 was a recessionary but 1994-95 had about 7 to 8 % growth rate. Next year turned out to be the same.1996-97 was a year of slowdown and the sales of the organized sector did not exceed 50 % of the total industries. The export market had marginal growth 5% in the year 1996-97. 1995-96 however was much better at 33% growth rate. The industry is quite prone to cyclical changes and is presently passing through a bad year.
THE PRODUCT:
The fan industry can be broadly classified on the bases of the products offered. The major products are:
• Ceiling fans
• Pedestal fans
• Table fans
• Wall fans
• Exhaust fans
• Others (include car fans, miniature ventilation fans, etc)
All the above categories combined had an annual turnover of Rs. 1000 Crore in the year 1996-97, registering a 6-7% growth over the previous year.
PLAYERS IN THE MARKET
• USHA -20%
• CROMPTON-20%
• ORTEM-7%
• ORIENT-18%
• KHAITAN-15%
• PADMINI-5%
• POLAR-5%
• OTHERS- 10%(Bajaj, Ravi, singer and some regional brands)
The fan industry undergoes major seasonal and cyclical changes. A year of growth is generally followed by year of slump. However the product is generic to every home the fundamentals of the industry are strong. Essentially being a low technology industry, unorganized sector occupies the same position as the organized sector in terms of sales
There is also a major effort to corner the rural markets, which on an average contributes about 30-40% of the total fan sales in the country. Since any branded products are taken for granted as trustworthy .The companies are trying hard to reach the rural market. The future of the industry seems to be bright as new horizons are added in India every year (any boom in housing constructions will still be beneficial). However there is not enough room for the players in organized sector unless they penetrate unorganized sectors market share. Designer fans are here to stay. More product innovations and devices must bring synergy with growth and eating into the market of AC’s would be beneficial. Given this condition industry is poised for the better returns.
PROFILE OF KHAITAN:
For decades, the Khaitan name has been synonymous with quality fans in India. With 19 offices located across the country, Khaitan has established itself as the undisputed leader in air-management technology. The Khaitan name is renowned for innovations as well which is reflected in the design of pioneering product concepts such as Fresh air fans, and models in the mini category.
Now Khaitan is diversifying even further. Pumps, lights, home appliances, cables, wires and circuit breakers have been added to Khaitan's portfolio. Good quality, great performance and novelty in design are some of the assured features of any product from Khaitan.
As a young entrepreneur in the early 60’s, S.K. Khaitan (chairman) was possessed by a burning desire to push the limits and create new goals for himself. Men like Henry Ford, Thomas Bata, Soichario Honda and J N Tata who had guts to build great brands with their own name, deeply moved him and then he was all set to create Khaitan his family name into a household word as well. Today Khaitan is already a household name and a leading brand through out the country, but the vision continues to grow.
In 1971, Mr. S.K. Khaitan founded Khaitan electrical ltd in kolkata.
Khaitan Electrical earnings from the fan sales were Rs 115 Crore in 2004-05 and it was expected to touch the Rs 150-crore mark in 2005-06. In the last financial year, Khaitan Electrical' registered a gross profit of Rs 5 Crore on a total turnover was Rs 129 Crore. With the introduction of the total electrical solution, the company hopes to cross the Rs 200-crore turnover in the current financial year. The company is exporting to neighboring countries. Exports generate approximately 8 per cent of the company's total sales.
VISION:
In my mind's eye I saw Khaitan fans in homes, offices, shops, factories and godowns. Today, Khaitan is already a household name and a leading brand throughout the country. But my vision continues to grow. Because everyday there is a new horizon to conquer, a new goal to reach.
-S.K. Khaitan.
(Khaitan group of companies)
MISSION:
Today Khaitan takes its place as one of the largest fan manufacturers in India. The winning reputation of the Khaitan name is built on the trust of millions of customers and the spirit of innovation kindled by my father, our Founder and Chairman. It is my mission to take the brand from strength to strength by tapping new markets, creating new models and continuously upgrading quality. After all, my name too is at stake.
-Sunil K.Khaitan
(Vice Chairman Khaitan group of companies)
4 P’S OF MARKETING.
PRODUCT
Khaitan has a huge range of products in each category. The different kinds of fans offered by khaitan are:
CATEGORY TYPES {KHAITAN.} TYPES {ZOLTAS.}
CEILING FANS EPRO: 13
OTHER CELING FANS: 5 8
TABLE FANS 9 -
PEDESTAL FANS 10 -
WALL AND CABIN 9 -
FRESH AIR 13 6
PORTABLE 4 5
The prices of all kinds of product differ. The prices differ on the bases of size, features, and looks.
PRODUCT LINE EXTENSION:
Day by day khaitan is extending its product line. New fans with improved features are being added to the product line. The very recent addition is the companies’ low priced fan zoltas. Initially when khaitan started it started as a company manufacturing only ceiling fans slowly but steadily it started adding and improving its product portfolio. Now along with ceiling fans khaitan manufactures different types of fans. Not only fans, khaitan is diversifying even further. Pumps, lights, home appliances, cables, wires and circuit breakers have been added to Khaitan's portfolio
Khaitan carved a niche for itself in the fan industry by creating new market for exhaust fans with its unique Khaitan fresh air fans. It resegmented the category by positioning Khaitan fresh air fans in the modern day answer to kitchen ventilators and bathroom hygiene. With bathrooms and kitchens becoming more and more compact, Khaitan fresh air fans became an essential accessory for living well. Backed by modern streamlined looks Khaitan fresh air fans also added style to the bathrooms and kitchens.
Khaitan not only offers ceiling fans but also ceiling fan’s accessories such as Resistance type Regulators, “CAPCON” capacitor type regulator, CHANDY (four way light attachment), PRETTY (single dome light attachment)
QUALITY:
Each product is the result of systematically documented Quality assurance Manual. The manual ensures rigid implementation of the quality policy for the Consistent Customer satisfaction. The Consumer Education and Research Society, Ahmedabad has adjudicated Zoltas as the best buy. Although Crompton scored the highest, Khaitan was the best buy since its price was far less than Crompton. Elantra has also won the Mera Brand award. At Khaitan, they have always believed in quality at reasonable prices. In fact, of all their achievements, the one they are most proud of is that of having earned the trust of their customers. The statement "Khaitan- the name is enough” is an expression of the faith that millions have bestowed upon the company.
The untiring quest for superlative quality and innovative design has brought some laurels both at home and abroad. They represent commitment to quality and service.
• ISO 9001 for the Kolkata and Hyderabad factories (including design)
• Awards from Export Promotion Council, Govt. of India
• CE Marking for ceiling fan
• The CSA certification marking, with the adjacent
• Indicator: NRTL/C – Canada
The Research and Development wings at our factories are responsible for producing new designs and product concepts to set the pace for change in the industry
The team of technicians, engineers and management experts constantly strive to improve the energy efficiency, air-delivery and durability of all our products.
They apply strict international quality-standards, using the latest technology to build fans recognized for years of smooth service. All these activities ensure that customers get full value for their money
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SERVICES
Khaitan believes in quality without compromise. Khaitan has always offered excellent quality and service. Their products are testaments to the belief in excellence and are duly subject to the most stringent quality standards in the world. And as proof of their mettle and faith in quality, they took what may be regarded as the boldest-ever step in the fan industry: the introduction of the Replacement Bond. The Replacement Bond ensures that the customer always comes first. It is a bond signed by the Chairman of the Company, promising to replace any Khaitan fan with a manufacturing defect, discovered within one year of its purchase, with a new one. Till today, the idea goes unmatched by any competitor. This confidence in the fans is a result of dedicated service, commitment to quality and careful attention to detail.
SIZES:
Khaitan manufactures fans of various sizes to meet the consumer and the room requirements.
Ceiling fans:
The Ceiling fans are available in the following sweep sizes:
1400mm, 1300mm, 1200mm are suitable for large Room size.
1050mm is suitable for medium room size.
600mm is the smallest size khaitan offers.
Table fans:
Table fans are available in the following sizes:
300mm, 230mm, 400mm
Fresh air fans:
Fresh air fans are available in the following sizes.
150,230,300 and 400mm
Pedestal Fans
Pedestal fan is available in only one size:
400mm
Wall and cabin fans
Wall and cabin fans are available in the following sizes.
230mm, 300mm, 400mm, 450mm
FEATURES:
Features of all the Khaitan fans are different. But these are some a prominent feature for which khaitan is well known:
• Cost effective
• Large variety
• Less power consumption
• Nice all round performance.
• Strong regulators
• Effective air movement to suit exact requirement for ventilation
• Low temperature rise leading to longer bearing life
• Specially designed blades for better performance and non-overloading characteristics
• Stable speed voltage motor characteristics leading to excellent low voltage performance
• Designed to comply with abnormal test conditions as per international safety standards
• Higher Air Delivery Power Ratio (ADPR) for ultimate performance.
BRANDING:
S.K.Khaitan decided to use his surname ‘Khaitan’ as his brand name and thus it helped him to segment markets by offering different brands with features that suit different segments.
BRAND DECISION NAME:
Khaitan uses its brand name Khaitan for all the products
May it be their exhaust fans or their ceiling fans they are all labeled as Khaitan fans. Thus khaitan uses blanket family name decision to name all its products. But in 2002-it launched its low priced fans under a different brand name-“zoltas”.
BRAND REPOSITIONING:
Earlier khaitan sold fans only for the upper middle class and the middle class consumers.
However in 2002 by launching low cost fans “zoltas “they have repositioned khaitan as an economy fan. Thus they have tried to reach lower end segment.
PRICE:
The dictionary meaning of the word strategy is applicable to the art of general leading of an army. Khaitan has used penetration strategy to get a large chunk of the Indian market.
Khaitan has gone for both up market and down market stretch.
PENETRATION STRATEGY:
The share of unorganized sector in the fan market is almost 50 percent. Buffeted by the stiff competition from the unorganized sector it has used penetration strategy to attract its middle class consumers. Khaitan decided to introduce low cost fans to penetrate the lower end segment. Till 1991 it was a seller’s market. Competition was limited. But then things changed and people became more interested in what they were buying that apart a large no of companies came up in the organized sector, which challenged Khaitan’s monopoly. To survive, khaitan had to improve the product offering and become more contemporary. Besides the company was making losses at those times.
To fight the unorganized sector, which was supplying fans at cheaper rates, Khaitan launched a sub brand of Khaitan fans styled ‘zolta’. Introduction of low-priced fans resulted in improving their capacity utilization and will result in reduced overheads per fan.
Khaitan fans LTD, imported a complete Chinese fan manufacturing process line and techniques to make ‘China type fans’. For the economy segment, The Company’s Zoltas range of fans at Rs. 698 is entirely based on Chinese technology adopted in their plants. It is virtually a fan made in china and matches both locally assembled and imported Chinese fans in Price performance. It sent across its top management team to China less than a year ago, under intense pressure from fans and imports to study how Chinese were making fans as cheap as the local assembled ones. Their success is the result of this initiative. As a result a large consumer segment favored Zolta an instant hit. In fact consumer Education and Research, Ahmedabad has adjudicated Zolta as the best buy.
After dealing with the unorganized market, it was time to take care of the business rivals and attract rich consumers. So the designer fans were launched they too became an instant hit. The price of these fans ranges from Rs. 50,000 to Rs.1, 00,000. These fans too became an instant hit for the upper class consumers.
Khaitan offers fans for all the three segments.
For lower end segment:
For lower end segment it has its separate brand- “zoltas” where the price of the normal ceiling fans start from Rs. 878(600mm sweep i.e. the lowest).
For its middle class consumers:
Khaitan has not disappointed its middle class consumers by offering fans with prices ranging from Rs. 1300(900mm sweep i.e. the lowest.) as against 1400 and 1450 of Orient and Crompton respectively.
For the upper middle class consumers:
Khaitans designer fans range from Rs. 50,000 to Rs.1, 00,000.
PROMOTION
Khaitan though a long standing brand came with a bang in late 80’s and jerked the whole market. Its promotional advertising featured famous personalities like Hema Malini who put the fan in the top league. Infact, Khaitan was the first company to advertise on television.
“Main khaitan fan hoon”-hema malini
This above-mentioned advertisement overwhelmed the television in the last decade and got registered in the customers mind. Recently only, Khaitan Electrical Ltd has roped in Bollywood actress Karisma Kapoor as its brand ambassador. The company has entered into a three-year endorsement contract with Ms Kapoor, who will endorse the company's product range across different categories.
Karishma kapoor during the khaitan commercial shoot.
Being a seasonal industry summers are the hot selling seasons so they have to make the best use of it. Khaitan offers its advertising to McKANN ERICCSON (shifted from HTA after 15 yrs.).Like all the other advertisement commercials khaitan too, highlights on the durability. The main theme of its commercials is to establish its product as a branded product. Since in the market any branded product is deemed to be durable establishing equity on media is quite attractive
SALES PROMOTION
Sales promotion is a major mode of selling for these companies. Every year lots of ads announce Discounts abound in the print media, especially during off-season. Khaitan came with a free silver coin with each product bought. Both, the companies as well as the dealers carry out sales promotion.
PLACE:
CHANNELS OF DISTRIBUTION:
As a company, dealers and distributors play a major role in serving customers, while growing and sustaining markets. Khaitan has a network of over 3500 strong and dedicated distributors and dealers. A network that has helped khaitan’s name and its promise of reliable quality to every part of the country. The power of this highly efficient and motivated network goes a long way to create goodwill for khaitan brand among countless consumers besides creating availability and after sales services.
There are 2 channels of distribution one among them is a direct dealer network. A direct dealer is a dealer who is authorized to purchase the product directly from the company and sell. They have yearly targets given to them by the company .If they succeed in achieving those targets then there is a certain discount, which is offered to them. They are also rewarded on the basis of per fan sold. New plans launch ideas and sales strategies are shared with them at frequent meetings. The same goes with the distributors. The distributor has many dealers under him the distributor commands his margin on sales. Hence the price is likely to be slightly high. Now the company is also planning to roll out “khaitan fantasy” and khaitan city retail outlets. Hence the retail outlets will only have the goods manufactured by khaitan. Khaitan is also looking at launching retail stores, under the Lmart name, at an investment of Rs. 20 crores. These retail stores will stock four leading brands in each category of consumer durables and home appliances along with khaitan products. 20 such stores will be opened throughout the country’
It is also planning to launch its 2 retail outlets-‘khaitan city outlet’ and ‘khaitan fantasy’ outlet
Khaitan fantasy outlets, which will house only designer fans, have opened its first franchise outlet in kolkata. Another 25 fantasy outlets will be opened across the country this fiscal.
PHYSICAL DISTRIBUTION
Khaitan has made its presence felt all over India. The southern part of India contributes about 30% of its sales followed by the northern and the western sector. It is also planning to launch its retail stores all across the major metropolitan cities. Khaitan fantasy outlets will be opened across the country this fiscal. Besides the major metropolitan cities it has also made its presence felt in Himachal Pradesh.
INTERNATIONAL MARKET:
The export market is a potential growth area of the company. Given the reputation for quality, innovative product range, competitive pricing and excellent manufacturing skills they are capable to meet the global demand for excellence. Khaitan is not only an ISO 90001 certified manufacturers; UL of USA, CE of Europe and SABS of South Africa approve its fans. They are already exporting their premium range of fans to countries in Africa, Middle East and Asia including Sri Lanka, Bangladesh, Singapore, Myanmar and Nepal. At the export front, it has started penetrating the European market with an export target of 2 lakh fans in 2006-07 against 78,000 exported in 2005-06 The company is looking to increase its top line from Rs 150 Crore, at present, to Rs 750 Crore
Khaitan electrical ltd may supply fans to global retail behemoth Wal-Mart. Negotiations are at the advanced stage. If the deal goes through Wal-mart would be Indian fan’s major route to U.S. market. According to khaitan officials, discussons have taken place and at the end of this year it expects registration with Wal mart fiscal. The only other fan manufacturers registered with retail behemoth is an Orient fan.
LOCATION:
OFFICES:
The corporate office of khaitan is located in Kolkata. There are 17 branches all over India. They are located at New Delhi, Mumbai, Chennai, Kolkata, Kanpur, Ahmedabad, Hyderabad, Cuttak, Jaipur, Indore, Kochi, Patna, Faridabad, Chandigarh, Banglore and Guwahati.
FACTORIES:
Factories are located in Kolkata, Hyderabad and Potanib. That gives them the capacity to produce a wide range of domestic and industrial fans in many designs, sizes and colors. These factories have the capacity to produce 100,000 a month. The Faridabad factory is company’s R&D hub and earned the recognition of CSIR (Govt. of India.). The kolkata and Hyderabad factories have earned ISO 9001 certificate.
ASSORTMENTS:
Khaitan fans are normally placed at the center of the fan shops along with other brands like Orient and Crompton. Khaitan fancy fans or designer fans are usually assorted at the centre. There are separate racks filled with separate brands. Each rack contains 3-4 fans of the same brand.
SWOT ANALYSIS:
STRENGTH:
Khaitans biggest strength is its market segmentation. Khaitan has low priced fans ranging from Rs. 698 for the economy class as well as designer fans for the premium market ranging from Rs50000 to 100000 and above. Not only is this it also catering to the needs of the middle class consumers. Hence it is catering to the needs of both the segments. Thus khaitan has reduced its risk by not targeting only one kind of the market. It launched its economy fans under the name ZOLTA and not khaitan. This helped them remain loyal to their high-end customers. . Khaitan is not also known for its designs and varieties.
WEAKNESS:
Despite of having such a good brand name, being the first to advertise, being the first to introduce colored fans Khaitan stands second and not first only because of its quality. Though the quality and performance of khaitan fans has been reasonably good it is not at par with orient or Compton. When quality is taken into consideration orient and Compton are anytime better that khaitan and the dealers don’t fail to admit it.
OPPORTUNITIES:
It is expected that there will be 15% growth in demand for fans with a boom in the real estate sector and the market is looking for different models suiting the new pattern for decor and housing arrangements. Thus given its variety and designer models khaitan has great opportunity over the years to come. Moreover Chinese influx in Indian market is likely to end with Chinese government withdrawing manufacturing incentives and appreciating RMB by 10%. This would give Indian manufacturers a more competitive edge domestically as well as globally. Khaitan has a good opportunity for tapping a large percentage of unorganized sector in which the cheap Chinese assembeled fans play a major role. It is also widening its distribution network by opening various retail outlets in many parts of the country. In fact khaitan is targeting 22% of the Indian market by 2010.
THREATS:
A growing unorganized sector is a continual worry for khaitan. The current share of the organized sector is 50% and is increasing at a rapid rate. Khaitan has to be constantly on its toes to advertise their products better at the same time keep the prices low. Other wise the unorganized sector may eat up its market share. Unorganized sector is a big threat to the company.
COMPETITORS:
Khaitan has many competitors in the organized as well as the unorganized sector as unorganized sector supplies fans very cheap rates. Khaitan’s two major competitors in the industry are CROMPTON of Compton greaves ltd and ORIENT of C.K. Birla group. Crompton and Usha command the highest market share in the Indian fan industry i.e. 20% each. Followed by ORIENT, which commands 18% in the industry. Third in the league is Khaitan with a market share of 15%
SWOT ANALYSIS OF COMPETITORS: CROMPTON
STRENGTH:
Crompton has acquired super brand status. Super brand is a unique International recognition that is bestowed on brands that have emerged as icons in their category. In India, a council comprising eminent professionals from the fields of advertising, marketing, research and media was formed to determine India's most respected brands. Crompton is in d list of 134 selected brands. Thus, as a brand Crompton is much stronger than Khaitan. Crompton is a market leader with twenty percent of the market share in organized sector. Crompton scores over Khaitan when it comes to quality. Crompton enjoys a great brand loyalty.
WEAKNESS:
Crompton fans are the costliest ones as compared to the other brands.
OPPORTUNITIES:
Crompton has an excellent brand recall. Considering their market image and market share, there are great opportunities for Crompton as compared to Khaitan. Crompton has a good opportunity for tapping a large percentage of unorganized sectors which contributes almost fifty percent of the total fan sales
THREATS:
A growing unorganized sector is a continual worry for khaitan. The current share of the organized sector is 50% and is increasing at a rapid rate. Khaitan has to be constantly on its toes to advertise their products better at the same time keep the prices low. Otherwise the unorganized sector may eat up its market share. Unorganized sector is a big threat to the company.
