Godrej Interio About & Industry Analysis

Institutional buying process at

Navodaya Chourasia (14PGP013)Joydeep Bhattacharjee (14PGP020)Sindhu NA (14PGP042)Swapnil Singh (14PGP050)Swarit Yadav (14PGP051)Aleena Chishti (14PGP064)Nirupama Singh (14PGP088)Satvik Jani (14PGP095)

group 2

About US & Industry Analysis

Business unit of Godrej & Boyce Mfg. Co. Ltd.Largest furniture manufacturer in India50 showrooms in 18 cities across IndiaA strong network of over 800 dealers in India, 200 exclusive retailers, in which 51 are COCO rest are franchise storesOfferings can be broadly classified into:Retail office and home furnitureContract ManufacturingProjects

Product lineB2CHome furnitureHome accessories StorageB2B Solutions for LaboratoriesHospitals and Healthcare establishmentsEducation and Training InstitutesShipyards and NavyAuditoriums and Stadiums

HOMEBedroomLiving RoomStudy RoomDining RoomKids RoomKitchenMattressHome AccessoriesOFFICEDeskingWorkstationsSeatingStorageSPECIAL SOLUTIONSLaboratory Furniture & Engineering SolutionsMarine SolutionsHealthcare FurnitureCARPETSINTERIORSTotal Turnkey SolutionsEXPORTS

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Industry Analysis

Major Competitors: Wipro, Methodix, Featherlite, Zuari, Herman Miller & Haworth No legal or regulatory barrier However becoming a leader is difficult extensive distribution and economies of scale

Since this covers all kinds of furniture catering to various market segments, scope of a substitute is low Entry of new players offering more innovative products and services Price sensitivityNo switching cost involvedLack of differentiation in raw material suppliedBargaining Power of Buyers HighThreat of Substitutes LowBargaining Power of Suppliers LowBarriers to Entry LowIndustry Rivalry Moderately competitive

Based on interactionwith Assistant Sales Mngr, Guwahati in Workspace furniture

Market Analysis

Market Analysis85% unorganized ,15% organized (growing at 15 % Y-o-Y)3 tier sales & distribution model: distributor, wholesaler, retailerConcentrated in A, B , C category cities (top 589 cities)A and B type cities together constitute 33 % of total market

Market Share ofCurrent market share : 8%Turnover of Rs 800 CroresGrowing at about 23% for the last three years

Source of data : Excerpts from interview with Mr. Anil S Mathur, COO of Godrej interio, Research Paper by Kenresearch.comThe Indian furniture market, which has grown at a CAGR of 17.2% for the period FY2008-FY2013, will incline at a compounded annual rate of 13.0% from FY2013-FY2018. Market Growth Prediction

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Clientele for B2B segment ofSiemens Sanofi Aventis Colgate Palmolive

Reliance Tata Bharti Airtel Vedanta ITC IFFCONTPCBHEL GAIL Delhi Metro Bombay High Court Nagpur High Court MPCB BCCIMumbai Cricket Association Indian Premier League (IPL)

Total Cost ownership & Value creation

Total Cost of Ownership byTotal Cost of OwnershipPre- Sales:

One Stop Solution- Focus on providing the best solution to the customers rather than going for push strategy.

Demo-After enquiry generation from the client, they provide demo presentations so as to make sure that the client get complete satisfaction with what they are going to have.

After - Sales:

Annual Maintenance Contract- They generally provide one year warranty to the client and apart from that they also provide AMCs for a period of 2-3 years.

Free service Check Up-Considering the relationship they share and based on account volumes, they also provide free service check ups.

Value Creation by

Channel management

Channel Management atChannel partners have detailed contract laid out with clear territory allocations.Channel conflict (specifically horizontal) is not common and if any is dealt by sales reps and managers through relationships; if required warnings is also given

Based on excerpts with Jimeet Mehta, Channel Manager - Mumbai Godrej interioSales process at Godrej interioChannel motivationTaking them for company sponsored toursForming advisory councilBuilding trustBest distributor awards.Trade discounts are offered for better performing distributors.All India meets of top 50 distributors where they share time with the Godrej Interio top management

Channel Management at

Channel ManagerDrive sales at dealer channel through ATL/BTL activities to get brand visibility & conversionDevelop cordial professional relationship with architects/interior designers/contractors/ association heads of key industrial areas for promoting interio office productsPromote Express Delivery Programme (EDP)Increase revenue from ecommerce sites (indiamart)Work closely with sales/product/branding/supply chain verticals to ensure timely completion of the display centers with strict adherence to Godrej interio brand guidelines

Support sales teamNew product dev. & PLC managementMarket analysis for latest consumer trendsCompetition Mapping & Order Lost AnalysisProduct Management & Range Rationalization

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Distributor selection at Ware house area : min 3000 Sq ft. Show Room area : min 4500 Sq ft. Selection done majorly through scouting. Approx Territory Covered : 4-5 Km radius.Security deposit of 2L to 8L

ERP usage

ERP at Need: Streamlining & monitoring end-to-end business processes and support decision-making at Godrej and BoyceImplemented BaaN ERP system to monitor end-to-end business processBaaN is now being upgraded to INFOR LN ERP system

CRMContact Mgmt..Lead TrackingOpportunity TrackingSales forecastingCampaign Mgmt..Customer PortalSales & Order Mgmt.Quote/Order Mgmt.Pricing/Commissions/DiscountsOrder configuration

Supply Chain Mgmt.SourcingProcurementInventory Mgmt.Shipping & ReceivingEDIBarcodingOverview of the INFOR LN system

ERP at

Enterprise PlanningForecastingItem plansChannel planningSchedulingProduct Mgmt.Serial/Lot controlProd. configurationProduct costingShip floor controlPlan maintenanceService Mgmt.WarrantyCall center mgmt.RMA Depot repairMobile serviceProject Mgmt.Quoting & EstimationBilling & AccrualEarned value prop.Engineering change noticeFinancial Mgmt.Fixed assetsExpense mgmt.Inventory costingProject accountingPerformance Mgmt.Home pagesBusiness intelligenceFin reportingPlanning & BudgetingMaster Data Mgmt.ForecastingItem plansChannel planningSchedulingHuman Capital Mgmt.Human resourcesPayrollEvent mgmt. & Config. platformWorkflowReal-time alertsNotifications

Data Mining TechniquesNavodaya

Data Mining Techniques atVerify that CAPA system procedure(s) that address the requirements of the quality system regulation have been defined and documentedDetermine if appropriate sources of product and quality problems have been identified. Confirm that data from these sources are analyzed to identify existing product and quality problems that may require corrective actionDetermine if sources of product and quality information that may show unfavorable trends have been identified. Confirm that data from these sources are analyzed to identify potential product and quality problems that may require preventive actionChallenge the quality data information system. Verify that the data received by the CAPA system are complete, accurate and timelyDetermine if results of analyses are compared across different data sources to identify and develop the extent of product and quality problemsDetermine if failure investigation procedures are followedDetermine if appropriate actions have been taken for significant product and quality problems identified from data sourcesConfirm that corrective and preventive actions do not adversely affect the finished device.Verify that corrective and preventive actions for product and quality problems were implemented and documentedDetermine if information regarding nonconforming product and quality problems and corrective and preventive actions has been properly disseminated, including dissemination for management review

CAPA (Corrective and Preventive Actions)

Lost-order analysisLost-order analysis IIT Bombay example

Organizational Buying Behavior

General Need Description and Product Specification Existing customer:Generally, a straight or modified re-buyGodrej interios Sales Executives and dealers get involved at this stage only and offer pre sales consultancy.Enquiry generation from clients side or,Regular Visits by Dealer or Companys sales executive.Follow up with Contact Person in the Client Organization.Sales Executives leverage relationship to:Incorporate Specifications suiting their product portfolio.Incorporate Certification compliances which their competitors do not possess.

New CustomerIt is generally a new task.Enquiry generated by the client by calling nearby dealers or through godrejinterio.com.To be followed up by Dealer or Godrej Interios sales executives.The client organization comes out with its own specifications or,Asks Godrej interio Sales executives to take measurements and present solutions.General Need Description and Product Specification

Proposal Solicitation by

Supplier Selection at

Order Routine Specification:

After GI receives the order, the delivery schedules are negotiated and documented.GI is highly known for meeting its delivery deadlines.

Performance Review:

GI receives regular feedbacks from its Clients regarding the products and after sales service through sales executives.It also conducts market researches to gain insights into institutional buyers decision making process.

Supplier Selection at

Sales Process

Pre Sales Process atThe sales team at a GI branch compromises of Sales executives, Design Engineers and Sales Managers.

PROJECT ESTIMATIONLABORATORY DESIGNPROJECT MANAGEMENTConceptualizing layouts through drawings/3D viewsDetailed EngineeringPreparing BOQs with detailed specificationsProviding cost estimates

Project control (quality, schedule and cost)Coordination with suppliers and contractorsEnsure timely hand overLABORATORY FURNITURE & ENGINEERING SOLUTIONSTURNKEY SOLUTIONS PROVIDER FOR ALL KIND OF LABORATORIES

B2B Sales Process Overview

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Pricing strategies

Pricing Strategies by Pre-Determined pricing for Standardized Products mentioned in the catalog.Standardized product Customized Product

Based on variation in the product for the clientPricing is done based on:Competition FacedRelationship with the CustomerMode of Purchase

Basis for Pricing

Customer Discount SanctionSales Executive need to raise it through internal portal, where he/she puts the following details:Business volumePrevious business with the clientRelationship being shared with the clientWhy the discount is requiredAnd it needs to be sanctioned by the followed in hierarchy

During tendering, if more discounts are to be given and dealers margin is going less than 6% then the following need to be done:

buyer-seller relationships

Buyer Seller Relationships atTypes of Buyer-Seller Relationships Transactional Relationships Collaborative Relationships Value added Relationships @ Godrej Interio

The buyer-seller relationship evolves across 5 stages: pre-relationship stage, exploratory stage, development stage, stable stage, and final stage.

There are 2 basic buyer seller relationships observed @ GI:-

Buyer Seller RelationshipsClient relationships The sales representatives do some sales through nodal agencies like Pwd & other govt agencies. They achieve these sales by the means of participation in trade shows, organising seminars, cock tail parties etc. Regular visits to the clients periodic greetings on festivals like Diwali, Eid etc They also sponsor some events of some of the educational institutes to maintain the relationship.

Buyer Seller RelationshipsDealer relationshipsGI conducts Annual Dealer meets where the top performing dealers get a reward of an all expenses paid trip to a destination abroad.GI conducts regular dealer visits in the following manner:-

Marketing by

MarketingGI follows practices like mass customisation, where there are products with standard shapes and sizes with customised exteriors and colour shades.Ex.- Special mattresses range for hotels & hospitals, Bamboo furniture etc.GI offers a one-stop solution to cater to the customers complete furniture requirements, as it offers a wide range of furniture from around the world under one roof.GIs major marketing efforts in the B2B space are realized by the means of providing the customers with specially designed catalogues & customized presentations to clientsOccasional direct marketing is also observed @ GI

Marketing @ GI (catalogue)

Exclusive series for offices, government institutions and other organizations.

CAPTURING PERFORMANCE

Capturing Performance at KRA Key Responsibility AreasRegular quarterly review 4 times a year || Final review & Grading end of the yearMeeting Sales TargetMeasurement of number of wins and sales amount over the specific time periodComparing with the target & past performance

Revenue from ProjectsProject A task to be executed within a stipulated time Eg: Furniture solutions for a new building coming up for Airport Authority of IndiaMinimum target level 5% of the sales target

Revenue from Key AccountsShould maintain a minimum % of revenue from the major key accountsComparing with the past performance

Revenue from Nodal AgenciesNodal agencies Government departments which place the order on behalf of some government institutions. Eg: PWD, CPWD, NPCC,TIDC etc.Minimum target level 10% of the sales target

Capturing Performance at Channel Management Wholesale Dealer management Coverage check Are the dealers covering all the customers in a territory? Do they follow up regularly?In a Month,A-Category Customer- Visit twice||B-Category Customer- Once

New account generation How many new accounts have they generated at the end of each year? Also includes appointment of new dealers.

Capturing Performance at Working Capital ManagementRegular follow up till the payment is madeOutstanding payment within norms Within 6 months from the bill date of sales

Inventory or Stock within normsShould also ensure whether inventory pile up with the dealers is within norms.

CHALLENGES FACED

Challenges Faced By GI Sales Reps Pricing Competitors are ready to reduce the price as low as possible

Payment delays Facing problem mainly from government institutions w.r.t settlement of payment

Out of stock situation OOS is common at dealers end

Recommendations

Recommendations

Should have in between delivery points for B2B furniture as well. Transportation from Mumbai incurs lot of delays.

Proper and timely information exchange between HO, branch office and dealers can also improve out of stock situations.

Increased focus on post sales service to retain existing customers.

The dealers need to be more responsive to the post sales issues reported by the client.(before and after installation)

These create points of differentiation for GI which is the only way to counter low prices offered by competitors.

Learning

Learning from the project

Knowledge about end-to-end B2B sales process by one of the market leaders and how they have sustained their position How Godrej interio creates, deliver and communicates value How companies and their processes evolve during dynamically changing environment Usage and benefits of ERP in B2B context GI does not have high channel conflict, this indicates robustness in their processes Measuring performance effectively Insights onPricing strategiesFostering buyer-seller relationshipsSupplier and dealer selection process

Referenceshttp://www.news.kenresearch.com/post/82675062461/indian-furniture-market-research-reporthttp://www.ibef.org/download/Furniture_170708.pdfhttps://www.godrejinterio.com/Godrejinterio/about-us.aspx?id=29&menuid=62https://www.kpmg.com/IN/en/IssuesAndInsights/ArticlesPublications/Documents/Collaborating_for_Growth.pdfhttps://www.pwc.in/assets/pdfs/industries/retail-and-consumer/retail-report-300812.pdfInterview with various GI personnels