A

PROJECT REPORT

ON

MARKET RESEARCH

OF

AIR-CONDITIONRERS

IN AHMEDABAD.

SUBMITTED BY:

SECOND YEAR M.B.A

2010-2011

SUBMITTED TO:K.S.SCHOOL OF BUSINESS MANAGEMENT

GUJARAT UNIVERSITY.

NAME OF GROUP MEMBERS

ROLL NO. NAMES2137 SHAH HIMALI2139 SHAH MONALI2164 BHALERAO ABHISHEKA2176 GAMIT TWINKLE2180 JAIN AANCHAL2195 PANCHASARA GOPAL2218 SHAH NEHAL 2221 SHAH SALONI K2230 PARIKH ANKIT2231 ARORA JUHI A

FACULTY GUIDE: MR. MAULIK DESAI

SIGNATURE:

DATE:

Acknowledgement

The feeling of gratitude automatically arises from the bottom of heart when we are helped by anyone. A small but timely help can proved to be achieving an important milestone i.e., the completion of this project report.

“Any single work is product of efforts, guidance and blessings of many people ’’ for our project this statement is equally true.

It is true that world outside name of a time is different from what we have perceived. Similarly, it is possible that the theoretical knowledge is not only aim of our career getting practical knowledge is not only aim of our career getting practical knowledge is also an important thing, which is not possible without support, guidance, motivation & information provided by different person. Hence our project bears the imprints of many people.

First and foremost we would like to express our gratitude to our college K.S. School of Business Management & its Direction in charge Mrs. Sarla Achyutan for giving us the golden opportunity of making the project. We feel obliged to Mr. Maulik Desai, our project guide for providing us the valuable information and the supporting guidance.

EXECUTIVE SUMMARY

“Well begin is half done”, as per this proverb we will like to share the blue print of our project, the summarization is as follows.

We started with analyzing the concept of our product which is Air-conditioner & we got some basic idea about our project.

After analyzing the idea, we discovered history of Air-conditioner along with some manufacturing companies.

Then comes one of the major task, which is discovering the 4p’s of marketing & that includes all concepts of market like Product, Price, Place and Promotion.

All these information was followed by preparing a suitable questionnaire so we could effectively communicate with the consumers of the product.

After that we surveyed about 2500 people for gathering the information regarding our project.

After the survey, the accurate task of analysis was held by us. We must admit here that without contribution of each and every group member, it would never have been this much successful.

We made the graphical presentation in form Univarite & Bivarite of for easy comparison & understanding; we have worked out. The inferences interpretation of each graph is to explain the facts.

And, finally we conclude our project with all the information that we found & our views about future of the market.

INDEX

Sr. No. Particulars Page No.1. History of A.C2. Competitive Scenario3. 4p’s of Marketing

Product Price Place Promotion

4. Market research1. Introduction2. Objectives3. Importance4. Process

5. Consumer Survey & Analysis

6. Findings7. Suggestions8. Limitations9. Conclusion

10. Bibliography 11. Annexure

HISTORY OF A.C

The idea of air conditioning started before a machine was created to produce the cooling effect desired. The first attempt at building an air conditioner was made by Dr. John Gorrie (1803-1855), an American physician, in here Apalachicola, Florida. During his practice the 1830s, Dr. Gorrie creating an ice-making machine that essentially blew air over a bucket of ice for cooling hospital rooms of patients suffering from malaria and yellow fever.

In 1881, when President James Garfield was dying, naval engineers constructed a box-like structure containing cloths saturated with melted ice water, where a fan blew hot air overhead. This contraption was able to lower a room by 20 degrees Fahrenheit but consumed a half million pounds of ice in two months time.

A close ancestor to the modern air conditioner units was first made in 1902 by an American engineer by the name of Willis Carrier. The machine at that time was called

“Apparatus for Treating Air” and was built for the Sackett - Wilhelms Lithographing and Publishing Co. in Brooklyn, New York. Chilled coils were used in the machines to cool air and lower humidity to 55%, although the apparatus was made with enough precision that the humidity level desired was adjustable.

After the invention by Carrier, air conditioners began to bloom.

They first hit the industrial buildings such as printing plants, textile mills, pharmaceutical manufacturers, and a few hospitals. The first air –conditioned home was that of Charles Gates, son of gambler John “Bet a Million” Gates, in Minneapolis in 1914. However, during the first wave of their installation, Carrier’s air conditioner units were large, expensive, and dangerous due to the toxic ammonia that was used as coolant.

In 1922, Carrier had two breakthroughs- he replaced the ammonia with the benign coolant dielene and added a central compressor to reduce the size of the unit. The next advance was when Carrier sold his invention to movie-theater operators, with a notable debut in 1925 at the Rivoli on Broadway in New York City. In a short amount of time, air conditioners were installed in office buildings,

department stores and railroad cars. The United States House of Representatives had air conditioners installed in 1928, with the Senate, White House and Supreme Court following suit in the years after. After World War II, window units’ air conditioners appeared, with sales escalating from 74,000 in 1948 to 1,045,000 in 1953.

Today, air conditioners have been said to be a partial cause for the changes in the South, and for most of us who have experienced its cooling benefits in times of searing heat waves, it is an invention that is hard to live without having a more powerful cleaning system. Then we realized that people still used their hands for cleaning so we launched the Triometic technology which gives the perfect hand wash. Then we realized that people still keep bending to wash clothes so we launched a washing machine with a higher and wider vent so you don’t have to bend.

BRAND COMPETITION

It means the competition is among same product having same price range. According to price the A.C can be categorized as low, economic & high price range.

Low: Onida, Goodrej, Panasonic, White House, Videocon

Economic: LG, Samsung, Carrier, Hitachi, Voltas

High: O General and Blue Star

INDUSTRY COMPETITION

It includes all competitor s producing same product irrespective of price range like O General, Blue Star, LG, Samsung, Carrier, Onida, Hitachi, Voltas, Videocon, Ken star, Whirlpool, Panasonic, etc…

FORM COMPETITION

All the products which give same utility will fall under this category like ACs, Coolers, and Fans.

GENERIC COMPETITION

It means the competition with the products irrespective of industry which are available for some value of money like

A.C, Refrigerator, Television, Micro-wave, R O, Washing machine, Laptops.

4p’s of marketingThe marketer’s task is to devise marketing and assemble fully integrated programmes to create, communicate and deliver value. For customers marketing comes in all forms. These tools are classified into 4 broad groups which are called 4p’s of marketing.

Product (THE FIRST P)

A product is anything that can be offered to a market to satisfy of a want of need. Products that are marketed include-

Goods Services Events Experiences Persons Places Properties Organizations Information ideas

The product offered to us is AIR CONDITIONER which comes under the category of GOODS.

PRODUCT LEVELS: THE CUSTOMER-VALUE HIERARCHY

In planning the market offering, the marketer needs to address five product levels. Each level adds more customer value, and the five constitute a customer- value hierarchy.

There are 5 levels of product as follows:

1. Core benefit2. Basic product3. Expected product4. Augmented product5. Potential product

Core benefitCore benefit is associated with its actual purpose and utility. The core benefit of air conditioner is cooling.

Basic productIt refers to the product which offers core benefit that is the product itself. Here the basic product is air conditioner.

Expected productThis level includes those attributes and conditions that buyers normally expect when they purchase the product. General expectations from air conditioners can be high cooling, energy saving and low maintenance cost.

Augmented productAn augmented product exceeds the expectation of the consumer from the product. It surpasses the customer’s expectation. In case of air conditioners, automatic timer control and slider air conditioners can be the innovations for augmented product.

Potential productIt encompasses all the possible augmentations and transformations the product or offering might undergo in the future. Here is where companies search for new ways to satisfy customers and distinguish their offering. In case of air conditioners, cooling as well as heating effects can be revolutionary potential product.

PRODUCT VARIETYWINDOW ACspic

SPLIT ACspic

CASSETTE ACs pic

Designer ACs pic

PRODUCT QUALITY

Quality is totality of features and characteristics of the product that bears ability and satisfaction. The quality of air conditioner depends upon star rating and cooling efficiency of the product .

FEATURES OF:

WINDOW AIR CONDITIONERS

These are air conditioners that are usually fixed through the windows, which have been designed typically for huge windows. It is one of the most commonly used air conditioners as this is best for cooling the single room, for simple reason that these are easy to install, cheaper, and works with almost all the wiring system of your home. The price range varies from Rs12000 to Rs27000 on an average for room size 10mr sq to 84mr sq.

SPLIT AIR CONDITIONERSThis kind of air conditioner is best suited for rooms whose area is up to 60me sq and cost around Rs16000 to Rs35000 on an average. Split air conditioners consist of two parts: the indoor unit which is also called the evaporator unit and the outdoor unit which is known as the external condenser box and is installed outside the room or building. This is the main reason why most people opt for split air conditioners as during the operation it doesn’t make any noise which might distract your

attention or annoy you. Split air conditioners are permanent system which can either be installed at floor level or on the walls or on the ceiling.

CASSETTE AIR CONDITIONERSThese are the air conditioner that is usually fixed on ceilings. This ultra this air conditioner can be installed in any narrow ceiling. These are usually fit in places where it is not possible to fit either a window or split air conditioner. The price range varies from Rs68500 to Rs86500.

DESIGNER AIR CONDITIONERS

PRODUCT HIERARCHY

The product hierarchy stretches from basic needs to particular items that satisfy those needs.

PRICE

Price is not just a number on a tag. Price is made up of any components. For air conditioners, price of the product varies with variation in model and capacity.

FOR WINDOW MODELScapacity→ 0.75 1 1.5 2 2.5

LGSamsung Rs17,990 Rs20,490 Rs RsHitachi

BluestarCarrierOnida

O general

FOR SPLIT

DISCOUNT:

There are three type of discount:

Cash Discount:

Cash discount means without taking official bill, company cut vat charges. Most of the companies give cash discount offers from 1000 to 2000.

Functional Discount:

Manufacturing gives some discount to trade channel member.

SEASONAL DISCOUNT:

This discount is given an special occasion like Diwali, 26th January, 15th August, Christmas ,etc.

ALLOWENCES:

Companies provide exchange offer trade-in-all and promotional allowances.

TAXES:

Taxes refer to tax to be paid on buying product. Here the list price is inclusive of all taxes ie., the maximum retail price, while inclusive taxes and retailer unit charge the price beyond it.

PAYMENT AND CREDIT TERMS:

Payment might differ from retailers to retailers based on the schemes some retailers like Croma, Next, Sales India, offer installment system

PLACE:

Place is not where your business is located but where your customers are located. Place is known as combination of distribution channels, assortment, inventor, and location. The distribution channel can also be defined as “two categories of activities and decisions”. The first relating to distribution channel which involves in taking decisions about the choice for the distribution network, whether to depend on wholesaler, retailer, agents, brokers or to establish own distribution channel. Second one is relating to physical distribution which involves decisions as to storing, warehousing, risk taking and insurance matter and about the mode of transport to be used in physical

transport and about inventory stock of raw materials, intermediate and finished goods and its coverage.

1)DISTRIBUTION CHANNEL:This distribution channel for AC is as above. It shows that first the product is manufactured in the manufacturing department and then the product is transferred to various distributors and then the distributor and then the distributor further transfer the product to various dealers. These dealers shift the product directly to the retailers or may transfer to the whole seller then ultimately the product reaches in the hands of the consumers. Some companies also own showrooms wherein the customer can directly shop from.

2)LOCATION:This is the prime factor in determining the success of the retail chain. As air conditioners nowadays are considered as prime need for consumers of the hot city like Ahemadabad, location for selling air conditioners is to analysed thoroughly.

3)TRANSPORT:The mode of transport is dependent on needs of consumers

PROMOTION:

Promotion mix includes decision relating to sales promotion, advertisement, direct marketing, personal selling and public relation. The purpose of promotion mix is to buy product.

Tools of promotion mix:

1)Advertisement:Company runs various ads, campaigns to create awareness about the product, new demand and replacement demand.

2)Sales promotion:To get stronger and quicker buyers response is aimed in sales promotion. There are also many tools for sales promotion like coupons, cash refund offer, gifts, and price offs. In this way the company held many offers to increase the sales.

3)Direct marketing:It is the use of consumer-direct channel to reach and deliver goods and services to the customers without using marketing middleman. These channels include direct mail, catalogs, telemarketing, interactive, TV, website. Consumer can easily buy the products through websites.

What is meant by marketing?

M - Money Motives

A - All customers must be satisfied

R - Risk must be minimized

K - Keep an eye on market position

E - Easy availability of product

T - Thoughtful decision making

I - Important to advertising

N - Needs incredible change at all times

G - Generation of new ideas

Marketing is a process of finding the needs of the customers through survey, research and thereby providing the customer services as per their demand.

Since it is necessary to have sound knowledge in every field of management, MARKET RESEARCH serves as an important tool to closely connect the customers and public to the marketer by providing RELIABLE, RELEVENT AND CURRENT INFORMATION to IDENTIFY and DEFINE MARKETING PERSPECTIVE, OPPORTUNITIES and PROBLEMS.

Objectives :

(1)To find out satisfaction level of users of air-conditioners.(2) To find out the most common and preferred company among users.(3) To find out brand loyalty among consumers.

(4) To find out the factors considered by the users at the time of purchasing.

(5) To find out problems encountered by existing users and come up with relevant solutions.(6) To devise new marketing practices to further enhance the market of the product.(7) To come up with relevant suggestions.

Importance :

(1) To determine current position of product in market.

(2) To know the position of competitors in the market.

(3) To know customers expectations towards the product. (4) To know the preference towards existing product. (5) To identify the schemes to be introduced to make product more successful. (6) To identify changes to be introduced in product according to need of customers and feasibility. (7) To understand the current market scenario with reference to the given product.

We have restricted to market research of AIR CONDITIONERS only to AHMEDABAD. The market research comprises of FOUR MAJOR STEPS.

1. DECISION ALTERNATIVES AND RESEARCH OBJECTIVES :-

For market research the following two things should be very clear :

(i)What is to be researched?(ii)Why it is to be researched?

We surveyed that AIR CONDITIONER companies having objectives for doing the survey are:

1.) To get information about consumers buying behavior.2.) Demand of consumers.3.) Problems faced by consumers.4.) Suggestions about modifications.5.) Favorable brands.6.) Success and failures of various models.

2. DEVELOP RESEARCH PLANS :-

.

Once it is decided to research the market for specific purpose, then researchers develop research plan which includes the following things :

(a.)DATA SOURCE:

Researchers can collect primary data which is freshly collected or secondary data which is collected from other sources.

(b.) RESEARCH APPROACHES:

Primary data can be collected by observing data, focus groups, behavioral data, surveys and experiments.

To conduct research, marketers can use instruments such as:

(i.)Questionnaires(ii.)Qualitative Measures(iii.)Technical Devices

(c) SAMPLING PLAN :

In this, a specific group of market is selected,

on specific common basis to survey the whole

market. After deciding on research approach

and instruments, the marketing researcher

must design a sampling plan which calls for

3 DECISIONS:

1.) SAMPLING UNITS:

We have done the survey of business men, housewives, students, professionals, etc. Respondents of all age groups have been covered in our survey.

2.) SAMPLE SIZE:

We have decided to survey 2500 people to get maximum response from wide variety of people.

3.) SAMPLING PROCEDURE:

We have used convenience unbiased sampling method.

4.) CONTACT METHOD:

This research has been done by e-mail, personal investigation, telephone and personal visits to respondents.

To do research on AIR CONDITIONERS, we have gathered information regarding various brands, tonnage, models available in the market. We have used QUESTIONARES to survey the market by taking personal interviews of consumers.

3. COLLECTION OF INFORMATION :-

By Questionnaire and personal interview, we have collected the information about occupation, monthly income, buying behavior, most preferable brands, promotional offers, capacity and models of ACs, satisfaction level of consumers using ACs. We have also studied about the consumers not having ACs and their future plans to buy an AC.

4. ANALYSIS OF INFORMATION & CONCLUSION :-

In this step we have extracted findings by tabulating data and developing frequency distributions. Then we have analyzed information by uni-variate and bi-variate graphs.

We have surveyed 300 dealers of small, medium and large size engaged into retail business of Air-Conditioners from all prominent areas of Ahmedabad, to get an unbiased response regarding our questions.

Particular big Malls having more than 1 branch like SALES INDIA, VIJAY SALES, CROMA, etc have been studied only from 1 major branch to avoid duplication as all branches follow similar procurement, marketing, pricing and discount policies. Emphasis has also been laid on small dealers and Exclusive brand dealers.

(1) REGARDING NUMBER OF DEALERS PER BRAND :

NAME OF BRAND : NUMBER OF DEALERS

Samsung 190L.G. 200Blue Star 40Hitachi 60O’Genral 120Carrier 70Onida 80Others 160

TOTAL 820

NOTE :-

Since several dealers deal in multiple brands, we have got total 820 dealers. But in actual these are 300 dealers, with each of them dealing in multi brands.

Graphical Representation :

SAMSU

NG L.G

BLUE S

TAR

HITACHI

O'GENRAL

CARRIERONIDA

OTHER

S0

20

40

60

80

100

120

140

160

180

200

NUMBER OF DEALERS PER BRAND:

NUMBER OF DEALERS

INTERPRETATION :

1.) From the above graph and tabulated figures, we conclude that majority dealers are multi brand dealers.2.) L.G. has maximum number of dealers followed by Samsung while Blue Star has lowest number of dealers.

(2)SALES DEALERS v/s SALES AND SERVICE DEALERS :

SALES AND SERVICE DEALER:

They get the products from the company and provide the services at their own will.

SALES DEALERS:

They just serve as an agent for the company. They get the product and provide the services as per the declaration of the company.

FINDINGS:

83% of the dealers are Sales and Service Dealers.

83

17

SALES DEALERSSALES AND SERVICE DEALERS

(3)

MODE OF PURCHASE :

Most dealers purchase directly from the company.

(4)

MODEL PREFFERED BY CONSUMERS :

According to dealers, split model of 1.5 tonns is most preferred by consumers.

(5)

FACTORS CONSIDERED BY CONSUMERS DURING PURCHASE:

The main factors considered by the consumers before buying an AC in order of their importance are as follows:

1.Price

2.Schemes

3.Star rating

4.Durability

5.Design

6.Colour

(6)

FREE SERVICES

Generally Three to four free services are provided by the company within a year of purchase.

(7)

COMPLAINS

1.Leakage in indoor unit.

2.No cooling

We have surveyed 2500 consumers covering students, housewives, businessmen, professionals and others (job persons and retired people). We have covered all income groups from income below Rs 25000 to above 75000 Rs MONTHLY INCOME.

Consumers constitute an important and most integral part of our survey. Based on the Questionnaires filled by them, we have classified, summarized, tabulated and analyzed the data from which the following findings have been extracted.

(1) REGARDING A.C. USERS AND NON-USERS :

CONSUMERS FIGURES

AC USERS 1415

NON USERS 1085

TOTAL 2500

GRAPHICAL REPRESENTATION :

56.6%

43.4%

AC USERSNON AC USES

(2) REGARDING COMPARISON OF DIFFERENT

INCOME GROUPS WITH USERS OF A.C.

INCOME LEVEL NO. OF USERS

BELOW 25,000 390

25,000-50,000 471

50,000-75,000 378

ABOVE 75,000 176

TOTAL 1415

INTERPRETATION :

Maximum AC users lie in income group of Rs 25,000-50,000.

GRAPHICAL REPRESENTATION :

BELOW 25,000 25,000-50,000 50,000-75,000 ABOVE 75,0000

50

100

150

200

250

300

350

400

450

500

NO OF CONSUMERS IN DIFFERENT INCOME GROUPS

NO OF CONSUMERS

(3) REGARDING COMPARISON OF DIFFERENT

INCOME GROUPS WITH USERS OF A.C. :

BUSINES

S MEN

HOUSEWIVES

PROFESSIO

NALS

STUDEN

TS

OTHER

S0

50100150200250300350400450

AC OWNERSAC NON OWNERS

OCCUPATION AC OWNERSAC NON OWNERS

BUSINESS MEN 421 117HOUSEWIVES 235 242PROFESSIONALS 367 351 STUDENTS 260 327OTHERS 132 152

Type Public (KRX: 003550)

Industry Conglomerate

Founded 1947 in Busan, South Korea

Headquarters Seoul, South Korea

Area served Worldwide

Key people

Koo Bon-Moo, (Chairman & CEO)

Yu Sig Kang, (Vice Chairman & Co-CEO)

Juno Cho, (EVP, COO, & Director)

Products

Electronics

Chemicals

Telecommunications

Revenue $104.3 billion (115 trillion KRW) (2008)[1]

Employees 177,000 (2008)[2]

Subsidiaries

LG Electronics

LG Display

LG Telecom

LG Chem

Website LG.com

Samsung Group

Type Public (Korean: 삼성그룹)

Industry Conglomerate

Founded 1938

Founder(s) Lee Byung-chull

Headquarters Samsung Town, Seoul, South Korea

Area served Worldwide

Key peopleLee Kun-hee (Chairman and CEO)

Lee Soo-bin (President, CEO of Samsung Life Insurance)[1]

Products List[show]

Revenue US$ 173.4 billion (2008)[2]

Net income US$ 10.7 billion (2008)[2]

Total assets US$ 252.5 billion (2008)[2]

Total equity US$ 90.5 billion (2008)[2]

Employees 276,000 (2009)[2]

Subsidiaries

Samsung Electronics

Samsung Life Insurance

Samsung Heavy Industries

Samsung C&T etc.

Website Samsung.com

Hitachi Ltd.

株式会社日立製作所

Type

Public

TYO: 6501

NYSE: HIT

Industry Conglomerate

Founded 1910

Founder(s) Namihei Odaira

Headquarters Marunouchi-1, Chiyoda, Tokyo, Japan

Area served Worldwide

Key peopleNamihei Odaira, Founder

Hiroaki Nakanishi, President

Products

Industrial machinery

Power plants

Information systems

Electronics

Materials

Financial services

Revenue US$ 95.982 billion (2010)

Profit US$ 1.145 billion (2010)

Total assets US$ 95.802 billion (2010)

Employees 359,746 (June 30, 2010)[1]

Website Hitachi.com

FINDINGS

1. Most of the people don’t know the varieties of air conditioners and their benefits.

2. There are many types of air conditioners so customers get confused to select A.C.

3. People are looking for less price of A.C providing more facility.

4. Some of the customers also believe that the energy consumption is much higher.

5. Dealers give many schemes during festival occasions.6. Most of the people are satisfied with their A.C.

LIMITATIONS Difficulties and challenges are the part and parcel of any

project, yet we endeavoured to overcome and resolve them.Following are the limitations faced by us:1. Limited experience of corporate world at S-Y level.2. Out of several survey techniques we could use only

questionnaire method 3. Our research area was limited to Ahmedabad city only

4. Our sample size is 2500 but the people of Ahmedabad are quite large so the sample might not be a true representative of the population.

CONCLUSION

In recent years consumer is the king of the market. The change is take place in the market only due to the change in the habit, behavior, fashion of the consumer. Experiencing the consumer behavior we would like to conclude our project with a high feeling of having gain enormous knowledge about air conditioner.

This includes thanks giving not only for valued co operation of the respondents that we surveyed but also our professor who gave us such a wonderful opportunity to learn so much about the practical aspects of life.

We learned how to deal with people and to maintain contacts. The important part was extracting as much information as possible which helped us to improve our potentials. It has boosted our confidence level and helped us to face the challenge. Above all it has put forth the essence of management and taught us the importance of team work and co ordination.

This has been our first step towards getting acquainted with the real business world. What we have learned will definitely help

us in enhancing our academic career. We look towards to such projects in future

THANK YOU