Dissertation on contemporary issues

From Mohit Kumar Gupta PGDM-11031

Purpose of study: Channel management is concerned with the entire process of setting up and operating the channel for meeting the company objectives. It refers to the way that a business or supplier of products uses various marketing techniques and sales strategies to reach the widest possible customer base. Under channel management, the company deals with the external organisation. The company uses these external organisations to achieve its objectives of profitability and customer satisfaction and in turn ensure that the channel members objectives are satisfied. The purpose of the study is related to the Channel management and sales & distribution system in the automobile industry where we analyse the way the channel are operating in the two wheeler segment of Automobile industry. We also analyse the importance of channel in the two wheeler segment of automobile industry.

Objective of study: The objective of the report is Background of the industry Marketing channel Importance of Marketing channel Function of marketing channel Channel management decision Evaluation of alternatives Types of channel Factors affecting the channel decision Channel level Channel conflict Summary and conclusion

Methodology

The methodology adopted will be data collection from secondary sources. This includes articles published in journals, publications, annual reports. Books and websites relating to the subject under study will be used extensively. Models and conceptual frameworks relevant to topic of discussion will also be considered.

Introduction of Automobile sector:

Automobile industry in India has huge potentials thanks to the growth of the middle class along with their overall economic growth. This is the reason of attraction for international brands who are trying hard to find new market for their products due to stagnated growth of auto sector in Europe, US, and Japan. Potential of Indian automobile industry can be best understood by following features: India is the second largest two wheeler market, fourth largest commercial vehicle market, eleventh largest passenger-car market, and fifth largest bus and truck market. With these facts in mind, let's talk about auto-component sector in particular. This segment is further divided into five sub segments --engine parts, drive transmission and steering parts, suspension and brake parts, electric parts, and body and chassis. According to the Automotive Manufacturers Association of India (AMAI), this sector is projected to grow at a CAGR of 10% till 2015-16; India is projected to be among top five automotive economies by 2025. In view of such huge potential, the Government of India has launched a 10-year plan Automotive Mission Plan (AMP), 2006-16 which aims to make automobile industries' contribution to GDP more than 10% while providing employment to 250 lakh people.

Introduction of Two wheeler segment of automobile:

Although the Year on year volume growth of the industry remained in double digits, the pace of growth during the last quarter was at its lowest gear in the last three years. In an environment where the increase in inflation, fuel prices and interest rates has been the archenemy of growth in the Indian automobile industry at large, the two wheeler industry has been tough and was reflected in its vigorous volume growth.

A look on the volumes of major 2-wheeler OEMs -

. Demand drivers of two wheeler industry:

Rising per capita income Rise of Indias Rural Economy and Growth in Middle Income Households Favourable demographic distribution with rising working population and middle class Urbanisation Increasing disposable incomes in rural agri-sector Availability of a variety of vehicle models meeting diverse needs and preferences Greater affordability of vehicles Rapid Product Introduction and Shorter Product Life Cycle Easy finance schemes Favourable government policies Inadequate Public Transport Systems in most Urban Areas

Challenges faced by the industry: Rising Customer Expectations Environmental and Safety Concerns Creation of Distribution Infrastructure

References:
http://management-punditz.blogspot.in/2012/04/indian-two-wheeler-industry-2011-2012.html http://www.ciol.com/ciol/news/71731/automobile-industry-challenges-expectations-2012 http://www.indiainbusiness.nic.in/industry-infrastructure/industrial-sectors/automobile.htm http://articles.yellowpages.co.in/indian-two-wheeler-industry-steady-growth-continues-part-i/