successful market entry market expansion in india€¦ · strategy trading production lucknow •...

STRATEGY TRADING PRODUCTION

EFAC-Conference Davos, 18.01.2013

Successful Market Entry &

Market Expansion

in India


• India specialist since 12 years

• More than 150 employees

• M+V Competence centres in

Delhi, Bangalore, Chennai, Pune

supported by country-wide sales offices.

• Consulting office in Cologne, Germany

PUNE

BENGALURU

CHENNAI

NEW DELHI

COLOGNE

SUCCESS IN INDIA

Benefit from our strategic knowledge

and operational experience

– use this competitive advantage!

AHMEDABAD VADODARA

HYDERABAD

INDORE

KOLKATA JAMSHEDPUR

MUMBAI NAGPUR

JAMMU

CHANDIGARH

LUCKNOW KANPUR

JAIPUR

GOA

PONDICHERY

KOCHIN


Strategic Inputs

for your Indian Business

3


Future Markets are Outside Europe...

4 Source: IMF, World Economic and Financial Surveys, World Economic Outlook Database (all 2009)

Global economic growth in %

Goldman Sachs currently identifies 8 countries contributing to 70% of the future economic growth: BRICS Turkey Indonesia Korea


5 Source: http://abcnews.go.com/International/slideshow/population-hit-billion-mark-14836187

Who are our new customers?


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Income p.a. Population 2010.

INR 100,00,000 ($220,000)

Super Rich 1,22 Mio.

INR 50,00,000 ($110,000)

Rich 1,22 Mio.

INR 20,00,000 ($44,000)

Affluent 4,88 Mio.

INR 10,00,000 ($22,000)

Upper Middle Class 12,19 Mio.

INR 3,40,000 ($7,500)

Middle Class 158,47 Mio.

INR 1,50,000 ($3,200)

Lower Middle Class 365,70 Mio.

INR 52,00 ($1,000)

Poor 219,42 Mio.

INR 52,000

Below poverty line 451,03 Mio.

Source: M+V Research 2012

The Indian Middle Class in 2010

6


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Income p.a. Population 2010. Population 2020

INR 100,00,000 ($220,000)

Super Rich 1,22 Mio. 5,6 Mio.

INR 50,00,000 ($110,000)

Rich 1,22 Mio. 13,99 Mio.

INR 20,00,000 ($44,000)

Affluent 4,88 Mio. 41,97 Mio.

INR 10,00,000 ($22,000)

Upper Middle Class 12,19 Mio. 97,93 Mio.

INR 3,40,000 ($7,500)

Middle Class 158,47 Mio. 265,81 Mio.

INR 1,50,000 ($3,200)

Lower Middle Class 365,70 Mio. 503,64 Mio.

INR 52,00 ($1,000)

Poor 219,42 Mio. 83,94 Mio.

INR 52,000

Below poverty line 451,03 Mio. 391,72 Mio.

Source: M+V Research 2012

The Indian Middle Class in 2020

7

STRATEGY TRADING PRODUCTION Structure of the ‚organized‘ Automotive Component Suppliers (turn over in Euro)

Quelle: ACMA 2012 8

120 Companies

290 Companies

240 Companies

Ab € 40 Mio.

€ 4 – 40 Mio.

Bis € 4 Mio.

• Automotive Industry is one of the most organized industries in India • There are approx. 7000 Component Manufacturers out of which less than 10 %

(650) would be considered as ‚organized‘ • The organized segment counts for 3/4 of total annual sales of approx. Euro 40

Billion


What does that mean for Robot Installations

Source: IFR Statistical Department 9

Sales in 2011 • 1547 Units (double of 2010) • Share of total supply: Handling 33 % - Welding %

Operational Stock • 6350 Robots (31 % up from 2010) • Share of total supply Handling 33 % - Welding 43 %


What does that mean for Robot Installations

Source: IFR Statistical Department 10


Knowing and understanding today‘s potential

Source: RBI, Department of Commerce, Government of India, EUROSTAT and M+V Research 2012; Fiskal year 2011-12

16 %

38%

46%

Premium

Good-Enough Market (approx. € 196 Bill.)

Low-End Market (approx. € 236 Bill.)

Total imports to India: € 360 Bill. share of products: 23 % resp. € 83 Bill.

11

€ 515 Mrd.


Product Price

Different Products for different Market Segments

Market size

Competitor (market share)

Customer segment

Product (features)

Price (level)

Quality level

Premium market

MNC

Niche applications

Higher affordability

level

High end & additional features

High, international

Very quality-concious, long

lasting products

Middle market „Good-Enough Market“

Local organized

companies & International

local manufacturers

Affordable standard quality

applications

Features only crucial

for purchase decision

Lower than premium price

High quality expectations

Low-end market „Bottom of the Pyramid“

Local unorganized companies

Less quality- conscious

Serving basic needs Low price

Lower quality, shorter period

of use expected

Source: M+V Research (2012) 12

STRATEGY TRADING PRODUCTION Bait the hook to suit the fish, not the fisherman

Source: M+V Research (2012)

„Identify markets“ instead of

„Create markets“

13


Marketing „Target here is much less to sell the right soap brand, but rather to convince whole rural target groups of the benefits of using this soap.“ Distribution Close to local customers, in required quantities and local knowledge: Home-Delivery, rural communities and small packaging

Financing Flexible financing models – Trade-in options, renting and part-time usage option

Product ‚Indians don‘t want ordinary German standard‘s trucks - what they need are simply robust, inexpensive carriages instead‘ (Mercedes TestEngineer Jochen Mast)

Business model Changing market approach: from manufacturing to service provider From manufacturing machines to operating it and selling output

14 Source: M+V Research 2012

Strategic Challenges - ‚Indianize‘ Your Business: Marketing - Distribution - Product - Business Model


Operational Inputs

for your Indian Business

15


Market Conditions in India

India is as big as the old EU-15 (NW Europe)

Individual taxation laws in the different states

Different languages, cultures, mindsets and

hierarchical society

Significant bureaucracy, demanding administration, overextended legal system

Intransparent Market Structures

Bargaining culture, price sensitiveness and quality

consciousness

Increasing cost: Rent @ 5 % / year

Salaries @ 10-15 % / year

Special warehousing requirements

16


Market penetration challenges in India

Selling of High-Value Products • Strategy • Team Structuring and Management • Marketing & Service

Fast & Efficient Supply of Goods • Management of Service Providers • Complex Indirect Taxation System • ERP • Cross-Border Aspect (Customs / SVB)

Administration of Bureaucracy • Accounting & taxation • Company Law • Financing • Controlling & Reporting • Cross-Border Aspect (IFRS / RBI / Transfer Pricing)

17


• National Sales Manager (NSM): 30-... lakhs* Strategy, Development & Co-ordination of Country-Wide Sales Activities

• Regional Sales Manager (RSM): 10-24 lakhs* Co-ordination of ASM, Development of Regional Sales (like South India)

• Area Sales Manager (ASM): 4-8 lakhs* Coordination & Controle of SE & „Trouble Shooting“,

Identification of new customers and Dealers

• Sales Executive/Sales Engineer (SE): 2-4 lakhs*

Active Selling *1 Lakh = ca. Euro 1.450/- 18

Structuring Your Sales Team

STRATEGY TRADING PRODUCTION Sales are the basis of your success Smooth administration is essential

Company „XYZ“

Sales Strategy Marketing

CRM Distribution

Price

Supply chain Distribution

Inventory management Sales Coordination Order management

Logistics

Accounting Accounting & Bookkeeping

Intelligence & Systems ERP

Sales Consulting Quality Management System

Compliance Legal & secretarial

Internal Audit

Finance Cash Management

Financial Management Treasury

Sales Team Management Regional Sales Teams

Area Sales Team Sales Executives

Servicing Management Servicing Strategy

Technical Sales Support After Sales Servicing

Human Resources Payroll, Benefits & reimbursements

Personnel Management & Development

Infrastructure Office(s)

Warehousing After Sales Services

Meeting Rooms

Front Office Support Reception

IT equipment & support Travel Desk

19

Sales Operations Finance & Admin


You concentrate on sales - M+V takes care of the rest

National Sales Manager Chief Operating Officer Chief Finance Officer

Sales Strategy Marketing

CRM Distribution

Price

Supply chain Distribution

Inventory management Sales Coordination Order management

Logistics

Accounting Accounting & Bookkeeping

Intelligence & Systems ERP

Sales Consulting Quality Management System

Compliance Legal & secretarial

Internal Audit

Finance Cash Management

Financial Management Treasury

Sales Team Management Regional Sales Teams

Area Sales Team Sales Executives

Servicing Management Servicing Strategy

Technical Sales Support After Sales Servicing

Human Resources Payroll, Benefits & reimbursements

Personnel Management & Development

Infrastructure Office(s)

Warehousing After Sales Services

Meeting Rooms

Front Office Support Reception

IT equipment & support Travel Desk

Company „XYZ“

20


21

• Defining of „achievable“ targets

• Planning/: Budget Strategy Milestones

Target Segments

• Implementation: Price Product Distribution Sales Team

• Quick reaction in case required

• Review of Strategy

• Continuous Performance Review of Sales Team • Appropriate Controlling Instruments in order to see deviations of Mile-Stone Achievements immediately

Plan

Review &

Reward

Perform

ACTIVE Sales-Management and Controlling: Time which you need to invest!


Your Markets - Today

22


Your Markets - Tomorrow

Future Potential The future buyers in Emerging Markets

23


KALDEWEI

Almost 25 % of all German Market Entrants to India within the last 5 years work with M+V…

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Thank you very much for your attention!

Tel (DE): + 49.221.880 4080 Tel (IN): + 91.124.434 2300 E-Mail: [email protected]

Klaus Maier

Managing Director

Köln / New Delhi

This document is protected under the copyright laws of Germany and other countries as an unpublished work. This document contains information that is proprietary and confidential to Maier + Vidorno or its technical alliance partners, which shall not be disclosed outside or duplicated, used, or disclosed in whole or in part for any purpose other than to evaluate Maier + Vidorno. Any use or disclosure in whole or in part of this information without the written permission of Maier + Vidorno is prohibited. © 2013 Maier + Vidorno. (Unpublished). All rights reserved

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