CHANNEL STRATEGY

FOR

PACKAGED CENTRAL AIR-CONDITIONING

PRODUCT DIVISION (PCPD)

GUIDED BY

MILIND BEGOOR (Manager Sales)

PRESENTED BY

AJINKYA TIRTHGIRIKAR

COMPANY PROFILE

Bluestar is India’s largest air-conditioning company

• Total Income: 3080 crores

• Net profit: 152 crores

• Listed on Bombay Stock Exchange in 1969

• 32 offices across India

Products segments under PCPD are

Ducted systems (5-22 TR) VRF systems (0.6- 80 TR) Chiller systems (10-4000 TR)

PROJECT TITLE AND OBJECTIVES

Project Title

Channel strategy for PCPD

Project Objectives

• To analyze the channel strategy adopted by competitor’s brands

• To study the existing BSL channel strategy

• To carve out new/improved channel strategy for BSL

METHODOLOGY ADOPTED

• Type of Research: Exploratory research with qualitative

investigation

• Source of data: Internal and External sources

• Sampling

• No sampling for BSL dealers

• Convenient sampling for competitor dealers

• Formalized and unconcealed questionnaire

• In depth interview was conducted

• Data analysis is done in textual and non-statistical way

Conversions

1. Amar builders: Shopping complex at F.C road: 1.5 Cr

2. Aditya builders: Housing society: 60 lakhs

3. Infratech builders: Aambey valley city: 40 lakhs

This was my contribution to Bluestar Ltd in this 2 months which was

done apart from the project given to me.

MARKET SHARE ANALYSIS

Prime competitors for BSL in all 3 segments

• Carrier

• Daikin

SEGMENT WISE REVENUE GENERATION

COMPARISION OF CHANNEL ADOPTED

Channel of competitors Channel of Bluestar

Brand

ICCs Architects Consultants

Exclusive dealers

Multi-brand Dealers

ANALYSIS OF CHANNEL STRATEGY

Channel strategy is analyzed on the basis of following things:

1. Comparison of type of dealers BSL and its competitors posses

2. Stock inventory BSL and its competitors have

3. Period of installations of machines

4. Complaints and their tracking

5. Availability of spare parts

6. Types of difficulties faced while dealing with customers

7. Satisfaction of dealers with dealers policies

8. Area of operation depending on market growth

9. Training of service staff

1. COMPARISION OF TYPE OF DEALERS

Dealers are divided into 3 categories on the basis of their

turnover and product segment they sell

1. Type A: Sells ducted systems only: 1-3 Cr

2. Type B: Sells ducted + VRF systems: 3-8 Cr

3. Type C: Sells ducted + VRF + Chiller systems: 8 + Cr

2. KEEPING STOCK INVENTORY

Reason from BSL dealers

- Keeping stock is a risk and a dead investment for them

3. INSTALLATION TIME TAKEN

Time taken for BSL dealers Time taken for competitors dealers

Installation time for BSL is better in all segment and in VRF its very

similar to competitors

4. TACKLING COMPLAINTS

Time taken by BSL Time taken by Competitors

Time taken for tackling complaints of chillers are very high for BSL where as in case

of ducted systems BSL is good

5. Availability of spare parts

• Availability of spares is directly related to satisfaction of the

customer with the service and brand image of the company

• Satisfaction level is degraded each day by 2%

(Note: This calculation is done with the help of formula generated in excel that was not

reveled by the company)

6. DIFFICULTIES DEALER FACING WHILE

DEALING WITH CUSTOMERS

BSL has the widest range of products where as competitors

are finding it difficult to maintain product differentiation.

7. AREA OF OPERATION

Competitors have analyzed the rising demand and thus increased their

dealers number outside Pune. Where as BSL has 5 dealers since 2010.

Revenue in

2012-13

Revenue in

2013-14

Revenue in

2014-15

12.5Cr 14.6Cr 17.8Cr

8. RATINGS OF DEALERS ON DEALER

POLICIES

BSL dealers are not very satisfied with the dealer policies, this is leading

to channel conflicts between dealers themselves and with company.

9. TRAINING OF SERVICE STAFF

Training of service staff vs. Launching of new product

SWOT ANALYSIS OF BSL CHANNEL

STRENGTH

1. Ducted systems

2. Exclusive dealership

3. Excellent relationship with existing customers

4. India brand

Weakness

1. Number of type C dealers

2. Faliure of previous models of VRF

3.Channel conflicts

4. Mapping new architects builders and Contractors

Opportunities

1. Area of operation

2. Expansion of channel

3. Training of service staff

Threats

1. Daikin coming up with R-32

2. Channel Conflicts

3. Myopic to urban areas

SWOT

KEY LEARNING

1. Studied and understood about channel management techniques

and strategies

2. Learnt about customer relationship management

3. Came to know about how to generate lead for sales

4. Learnt the documentation needed in domestic business

5. Learnt the techniques the manager incurs to eliminate channel

conflicts

6. Came to know about the product specification in central air-

conditioning

7. Importance of after sales service

8. Expansion of channel with different type of dealers

9. How to maintain market leadership

10. What is the effect of failure product on brand image

FINDINGS

1. BSL has experienced dealers in the market (4 dealers having 9+

years experience)

2. BSL entertains exclusive dealership strictly.

3. Daikin has the habit of entering the market with new technology

that surpasses the old ones. (For example- Daikin has invented VRF

technology and is market leader in that segment. Now recently it has

developed inverter type ducted system with R-32 model to capture ducted

system market)

4. BSL has large number of Type A dealers (Type B and Type C dealers

are lacking compare to its competitors)

5. Neglecting the increasing demand outside Pune region

6. BSL dealers are not very satisfied with the dealer policies (Igniting channel conflicts between dealers and with company)

7. Training of service staff is lethargic (Compared to induction of new

products in the market)

IMPROVED CHANNEL RECOMMENDED FOR

PCPD

1. Expansion of channel

1. Induction of new and potential dealers

2. Induction of manpower

(Expansion of channel should be done focusing on Type-B and Type-C dealers

and also BSL should induct those dealers who have the potential to cover tier-2

tier-3 areas where demand is picking up)

1. With induction of more dealers BSL would also need to expand its

work force of sales person so that new dealers are equipped and

managed properly

2. Improvement of VRF & Chiller systems (Many issues with the previous

models of VRF have eroded the band image of BSL. BSL should start building

brand image especially in VRF segment by making customers aware of the new

and improved technology in VRF which is very similar to market leader’s

technology)

Contd.

4. Mapping consultants, architects & builders (BSL has most of its business

through its relationships with architects, builders and contractors. Hence sales staffs

with the dealers are always applicable to map new upcoming architects, builders,

ICCs so as to expand their business)

6. Training of sales/service staff . (Regular training of service/sales staff should

be conducted to make them aware of new technology and advancements in the

products)

7. Improvement in delivery time & installation time by stocking

inventories. (Improvement in delivery time, service time will help create brand

image within the customers and this can be done by stocking inventories with the

dealers and company warehouses.)

8. Make spares available with the dealers and in the warehouses. (Making

spares available in nearby warehouses will always make sure the complaints are

tackled and solved as soon as possible)

IMPROVED CHANNEL RECOMMENDED FOR

PCPD

CONCLUSION

1. Bluestar Ltd is the market leader in ducted systems (Due to its heavy

population of Type A dealers as well as very good service in that segment)

2. Bluestar is suffering brand erosion (Failure of earlier models of VRF

systems)

3. Bluestar has very good customer relationship (With existing

customers, architects, builders and contractors which help them to get repeated

orders and help gain word of mouth)

4. Channel strategy of Bluestar is unique (Entertains exclusive dealership

strictly where as its competitors believe that multi-brand dealers would generate

more business for them)

5. Bluestar also has the largest range of products in Central air-

conditioning (This helps BSL to compete equally in all 3 segments of Central

air-conditioning)

REFERENCE

Books:

1. Research methodology: Concepts and cases- Deepak Chawla & Neena Sondhi

2. Marketing management: A south asian perspective- Philip Kotler

Websites:

https://www.bluestarindia.com/index.asp

http://www.daikinindia.com/

http://www.carrierindia.com/

http://www.vnmpublication.com/IJIRM.htm

Broachers:

https://www.bluestarindia.com/products/central-acs/packaged-ducted-splits-popup.asp

https://www.bluestarindia.com/products/central-acs/vrf-acs-sys-inverter-popup.asp

THANK YOU