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DESCRIPTION OF INDUSTRY

Agriculture sector is dominating in Indian economy as it accounts for over 53% share
of countrys total work force. Declining water level and rising per capita water demand are
major challenges being faced by population associated with agriculture sector and its allied
segments. On the other hand, per capita water availability has reduced to about one third
since 1940, resulting into growing demand for water pumps, where agriculture water pump is
the leading segment. Other factors such as rising urbanization, infrastructure investment and
industrialization (especially in water & waste water, oil & gas sectors) are also driving the
water pumps market. Urbanization in India has been witnessing strong growth, where urban
population is further forecasted to be increased from 290 Million in 2002 to 500 Million by
the end of 2017. Export segment of water pumps have also grown immensely as it grew by
over two folds during 2010-12.
Indian water pump market revenues are expected to grow at the CAGR of around
13% during 2013-18. Indian water pumps market is segmented into two categories i.e.
Positive Displacement and Centrifugal pumps, where centrifugal pumps market is dominant.
The leading companies operating in water pumps market in India are Kirloskar Brother
Limited, KSB Pumps, CRI Pumps, and Shakti Pumps. Increased energy crisis and
government regulation are motivating water pump manufacturers to develop energy efficient
products. States such as Gujarat, Tamil Nadu and Maharashtra has strong industrial base,
hence, leading in demand for industrial pumps, while Punjab and Uttar Pradesh are
agriculture based states and consequently agricultural pumps are more in demand from these
states.
Pumps play a dominant role in the sectors like agriculture, production of oil and
natural gas, petroleum refining, petrochemicals, power generation, domestic and household
utilities, etc, and contribute a major part in nations economy. The Indian pump
manufacturers have traditionally catered to the needs of domestic market. In India, pumps are
mainly used for pumping water from wells in households.
The global pump market is expected to grow at a compounded annual rate of 7 per
cent in the period 2013-18. The current Indian Pump market is approximately worth 10,500
Crores. There are over 800 pump manufacturers in India, of which a few are large players
Indian and MNCs with revenues above Rs100 crore and plenty of SME players. The
pumps market is broadly classified into two categories: industrial pumps, which cater to
infrastructure sectors; and agriculture and domestic pump. The latter is used for household
needs as well as irrigation activities.
Bounds of the study
This market feasibility study is limited to self priming centrifugal monoblock
domestic pumps. Pump casing is of unique design. Liquid is retained in it, which at the time
of restarting, works as the intake for the impeller and pump is primed. The pump is used for
dirty water, emptying pits and employed in situation where suction lift conditions are there. It
has the advantage of avoiding foot valves often a source of problems. The disadvantage is
its higher cost and lower efficiency. These pumps are powered by 0.125 to 1.5 hp motors and

is used for the varied use of pumping water from the well or a reservoir or for small
agricultural works.
Limitations of the study
This market feasibility is based on the assumption that the market demand trend
remains constant i.e. no eventuality of a recession or collapse in the global or domestic
markets. It is also further assumed that there will be no immediate shifts or obsolesce of
present technology.
Potential Project
The Indian pumps market is fairly mature, with domestic sales expected to increase at
a rate of 16 to18 per cent per year, and exports projected to grow at around 10 to 12 per cent
over the next few years.

1. Coimbatore
The pump manufacturing industry in Coimbatore is varied and well established. It
holds a major portion of the total Indian market share with 60% of Indias requirements of
domestic and agricultural pump sets manufactured here. According to the report by Ministry
of MSME, Govt of India there are nearly 1100 micro and small pump manufacturing units
with a total value of 2150 crore and exports worth 30 crore employing 104500 employees.
The average investment requiredas per the reportfor plant and machinery is around 15 to
25 lakhs.
Coimbatore is well connected with the major cities and ports. It is linked to the
Cochin port by NH47, Bangalore by NH209. Also the presence of many professional
engineering colleges as well as Industrial Training Institutes (ITI) provides a pool of skilled
workforce necessary for a small scale industry.
The availability and the quality of power supply is however a major deterrent to the
operation of small scale industries in Coimbatore which are dependent on the power grid.
Despite the presence of many small scale industries, lending interest rates are notoriously
high.

CURRENT MARKET ANALYSIS:


The current pumps market in India is very good and eligible for substantial growth. It has a
very steady demand considering growth in infrastructure, new projects underway, improved
lifestyle of people and steady growth in manufacturing industry. Applications of self priming
centrifugal monoblock pumps is widening day-by-day. Some of the applications where the
self priming pumps are used today are as follows:

Household use
Use as pressure pumps
Road construction machinery
Coal-tar plant
Plastic testing equipments
Refrigeration industry
Small cooling towers
Casting industry
Fountain applications
H.V.A.C
Dairy and food processing industry (Food grade SS316 MOC)
Paper and pulp industry
Gardening applications
Automobile car washing applications
R.O. Plants
Machine tool applications (circulation of cutting fluid with special MOC Pumps)
Hotel Industry
Laundry industry (Industrial Washing machines and dish washers)

Multiple applications of 3-phase versions of self-priming centrifugal monoblock pumps has


completely changed the scenario of domestic pumps and predictions of the pundits have gone
wrong. Apart from cities, domestic pumps usage has deepened further to small towns and
villages due to urbanization. Mr. Modis efforts to build smart cities in Gujarat provided an
escalation gate to growth in pumps industry. SS316 MOC Self priming centrifugal
monoblock pumps has revolutionized the scenario of chemical and process industries. Earlier
people used higher HP pumps with low rpm for low head and low flow rate applications. But,
with advent of mini self priming pumps market has accepted the small self priming pumps
with 2900rpm very well.
Mini self priming pumps have also found their way in Car washing automobile sector where
earlier high pressure reciprocating piston pumps were used. Now, self-priming pumps
capable to produce 5.5kg/cm2 pressure are used. Emergence of 0.125HP and 0.25HP pumps
has drastically reduced power consumption in applications where very small quantity of
water is to be transferred across small head. E.g.: Small chilling plants and domestic R.O.
Self priming pumps with better mechanical seals have found applications in Hot water
industry (>65*C).
Solar operated mini self priming pumps are the most recent development in the pumps
industry. Both AC and DC version are available for use. Initial cost of such pumps is high but
this can be recovered in terms of almost nil operating costs (Pricing 1 to 1.5lakhs for 1 and
1.5hp pumps). Also, recently the self priming pumps have seen huge demand as a substitute
to multi-stage pressure booster pumps. The high pressure (upto 5.5kg/cm2) self priming
pumps are used as pressure pumps in bungalows and apartments to provide sufficient
pressure to water coming out of bath accessories and shower panels.

COMPETITION
China made pumps are the biggest competition to the Indian markets. High productivity,
cheap labour, advanced technical know-how help the Chinese to produce pumps at a very
nominal rate.
Giant players in the self priming pumps market like CG, CRI, KSB, KBL, Texmo, Sharp,
Lubi, Jyoti Ltd., Shakti Pumps and many more too are tough competitors.
There exist more than 1000 medium scale and minor competitors in Ahmedabad, Rajkot,
Coimbatore, etc.
However, there is such a huge demand that new players like Havells, Bajaj, Usha, Surya
roshni, V-Guard, Oswal, etc. are penetrating very well in the market.

ANTICIPATED FUTURE MARKET POTENTIAL


Self priming pumps market is estimated to grow at least by 18-20% due to infrastructure
development. Stable government, suitable business reforms, upcoming mega-projects,
increase in population, ever-expanding city boundaries, developing towns, evolving villages,
agricultural growth, growth in automobile sector, planning to build smart cities across India
all indicate to a positive growth to the pump industry.
More urbanizationMore Bungalows and apartmentsMore Roads More buildings and
mallsMore Gardens and parksMORE SALE OF PUMPS
The 0.5HP mini self priming pumps with in-built small tanks and auto on-off technology for
bathrooms have a huge market potential as pressure pumps. Similarly, 1HP and 1.5HP high
pressure self priming pumps with 24Litre and 35Litre pressure tanks respectively along with
other accessories also have huge market potential to provide pressure for 2, 3 and also 4
bathrooms.

POTENTIAL BUYERS

Common Man (consumer for household purpose)


O.E.Ms such as
H.V.A.C plant manufacturers
Chilling plant manufacturers
Fountain applications
Bottled water Packaging industries
Beverage industries
Laundry machine manufacturers

High quality self-priming pumps will induce huge confidence among buyers.
In the long run we can definitely aim at going international and export our pumps to
developing countries.

SALES PROJECTIONS

Sales (in crores)

CG; 18%
Other Players; 38%
KBL; 15%
Sharp; 5%

LUBI; 10%
Texmo; 5% CRI; 10%

The above are recent 2013-2014 sales figures for Self priming Pumps market.
Out of the total 2000 Crore market of self priming pumps, around 1200-1300 crores is
catered by major players, while the remaining 700 to 800 crores is catered by local small and
medium scale manufacturers.

Our objective as a beginner is to achieve sales of over 2 crore in the very 1st
year especially in the luxury, OEM and consumers segment.

TEMPORAL DEMAND OVER THE YEAR


Demand over the year is generally distributed in the following way:
1st quarter (March to May): 35% of the yearly sale
2nd Quarter (June to September): 20% of the yearly sale
3rd quarter (October to December): 20% of the yearly sale
4th quarter (January to March): 25% of the yearly sale.
The above trend is due to the fact that there is scarcity of water during summers (1st quarter)
and hence huge demand of pumps. The sale in 3rd quarter is steady due to post monsoon
agriculture season. 4th Quarter is the beginning of the uptrend in the pump sales for summer.

GEOGRAPHICAL EFFECTS ON DEMAND

Hilly places / Places situated at a considerable altitude require comparatively less


water due to cooler atmosphere and frequent rains. Hence, the demand for pumps is
quite low at such locations.
Small villages where there is a constant flow of fresh water in the rivers/ ponds also
do not require pumps.
Cities such as Gujarat, Rajasthan, Madhya Pradesh, Chattisgarh, Jharkhand and WestBengal situated near the tropic of Cancer have considerably high temperatures
throughout the year. Hence, there is huge demand for pumps due to scarcity of water.

PRICE CUSTOMERS WILLING TO PAY


1. 0.5HP Self priming centrifugal monoblock pump:
Production cost of best quality premium model possessing high reliability, high head,
high discharge and good life in todays scenario works out to be around Rs2500.
However, the profit margin or selling price would depend on the type of customer:
0.5hp Pressure pump with 24Litre tank and accessories can fetch around
10000Rs (because it is a luxury product)
Normal consumer asking for 2 year warranty will be willing to pay Rs3000
per pump.
OEMs using the same pumps in 3-phase versions would happily pay Rs 3500
Same pump with minor difference in Material of construction (SS316) and
good quality mechanical seal can give you a price of Rs4000 to 4500 per each.
2. 1HP Self priming centrifugal monoblock pump:
Production cost of best quality premium model possessing high reliability, high head,
high discharge and good life in todays scenario works out to be around R3750.
3. 1.5HP Self priming centrifugal monoblock pump:
Production cost of best quality premium model possessing high reliability, high head,
high discharge and good life in todays scenario works out to be around Rs4500.
4. 0.125HP Self priming centrifugal monoblock pump:
Production cost of best quality premium model possessing high reliability, high head,
high discharge and good life in todays scenario works out to be around Rs1500.
5. 0.25HP Self priming centrifugal monoblock pump:

Production cost of best quality premium model possessing high reliability, high head,
high discharge and good life in todays scenario works out to be around Rs1800.

CONVINCING CUSTOMERS ABOUT SUPERIORITY OF OUR


PRODUCT

To improve mechanical efficiency, optimum design of volute casing and impeller will
be done. To improve electrical efficiency and reduce current and iron losses use of
best quality stampings, windings and wires will be done.
Proper selection of Pumps according to application will be done in order to offer the
pump which has the best efficiency point closer to the operating point in the curve.
Longer core length will be offered to improve overall pump efficiency.
Fit it and forget it will be the tag line and we will strongly abide by it.
Live demos that indicate actual current, power consumption, pressure measurement
and flow rate etc will be done to have a feel of the product.
We will provide thermal overload protector to avoid motor failure.
Designing the motor and cooling fan aerodynamically to facilitate sufficient cooling.
Dynamic balancing of shaft and impellers for best performance and reduced friction
Best quality casting through proper testing for sturdy design.
Introducing high quality low corrosive gun metal impellers.
Noryl impellers can be used as a substitute for less consumption of electricity (but
negative impact is that such impellers melt during dry run).
Anti-corrosive paint can be provided to customer on request at an extra cost.
However, in future we may incorporate this as a standard feature.
Supplying suction pipe along with the pumps itself.
Understanding the real requirement of the consumers: Actual head (horizontal or
vertical), flow rate required, No. of bends on discharge side. Educating consumers to
reduce no. of bends and Ts. If the same is unavoidable, would recommend usage of
long bends to reduce friction losses.
Knowing the fluid to be handled will be of prime importance. Using a water pump to
circulate or transfer milk, oil, diesel, or any flammable or high density fluid etc. can
be disastrous.

PRICE AND WARRANTY ACCEPTANCE


With the prices discussed above, the market would happily accept the following:

Standard warranty clause provided by all the market players is 1 year. However, we can give
2 year warranty by charging 10% extra over the basic price for all models except pressure
pumps. The reason being that pressure pumps are highly service oriented. Since, the pump
operates on the phenomena of pressure drop and pressure settings on the tank, it starts and
stops automatically. Minor leakage in the tap, pipes etc. lead to continuous running of pumps
or power not being cut off at appropriate time etc. This leads to frequent complaints.

DISTRIBUTION CHANNELS SUITED FOR SELF PRIMING


PUMPS
The best suited distribution channel for self priming pumps would be as follows:

District wise distributors to be appointed for distribution of pumps.


To achieve their confidence utmost care will be taken to supply zero defect product
that are properly tested.
Pricing to retailers and consumers and minimum profit margins of distributors will be
fixed to avoid internal inter-distributor competition.
We will introduce special schemes and projects under which distributors will be paid a
secondary sales force salary, salary of driver for delivering pumps through tempo,
van, auto etc.
Duty of secondary sales force will be to increase the number of retailers and hence
increase the market reach in every nook and corner of small towns and cities.
Retailers in varied segment will be developed. (e.g.: Pipe dealers, Hardware and paint
shops, Sanitary counters, small machinery traders) to increase the market reach.

TRADE MARGINS FOR DISTRIBUTORS


Trade margins for all the distributors would be fixed at around 5-7% over and above quarterly
and annual schemes and advertisement expenses. This would be enough for the distributors to
take interest in our product and encourage them to carry full range of our products.

PROSPECTS OF IMMEDIATE SALES


The following steps would help us to make immediate sales:

Since, pump is a consumer product participation in state and national level exhibitions
in all segments would help to gain immediate sales.
Product displays, Branding behind auto rickshaws, In-house retailer shop branding.
Running distributor vans during the peak hours in the machinery market.
Distribution of banners, standees, leaflets, catalogues, and all kinds of advertisement
material.
Conducting retailer meets through distributors to improve sales and narrow down
communication gap with retailers.
Launching consumer schemes to boost sales (e.g.: One bucket free with every pump)
Conducting technical seminars to educate the distributors,

INCOME AND PRICE ELASTICITIES OF DEMAND

During the times when the demand is high (summer) and there is scarcity of pumps,
we can realise better profits and income.
During time when the demand is low (winters) there is lot of stock piled up, we can
off-load the material at lower profits by pushing the material by offering special
schemes.

SATISFACTION WITH EXISTING PRODUCTS

UNSATISFIED NEEDS

Replace warranty is a big constraint to boost sales with major players like CG, CRI,
KBL, Lubi etc.
Prompt after sales service is necessary because a customer cannot survive without
water for more than 6-8 hours. Customer expects service within hours and not days.
Distribution margins are getting squeezed due to heavy internal and external
competition.
Effective sales and service feedback that help to improve product quality are lacking.
Pre-, during and after-sales service is not provided appropriately to the consumers.
Consumers expect the retailers or distributors to provide installation services along
with the sales of the pump. This facility can be provided with fixed terms and
conditions.

DISTRIBUTIVE TRADE PRACTICES AND PREFERENCES

One of the very successful trade practices is to provide quantity schemes or quantity
discounts to the distributors.
Signing MOUs with the distributors, fixing their quarterly and annual targets and
providing turnover discounts if the distributor achieves the target can also boost sales
considerably.
Launching consumer schemes like bucket free with every pump or free travel bag etc.
Road shows, seminars, Retailer meets, Distribution of leaflets, catalogues etc. to
provide complete details of the product to the consumer.

SOCIO-ECONOMIC CHARACHTERISTICS OF BUYERS


Different consumers have different economic situations and different requirements. Right
selection of pumps by understanding the complete requirement of the consumer can help in
selecting an economic and low priced pump.

EFFECTIVE DEMAND IN THE PAST AND THE PRESENT


Demand depends on the economic situation of the country, effective growth rate of the
country and the trend of the market.
Hence, the demand was good when there was a boom in the economy, development in
infrastructure, industrialization and market was uptrend.
But, in the last few years the economy is at standstill, no new upcoming projects and market
is experiencing a down trend due to government issues and policies.

BREAKDOWN IN DEMAND
Following factors cause breakdown in the demand of self-priming pumps:

Poor Monsoon
Poor GDP
Psychological thinking changes to retain the market rather than to grow
Less foreign investment
Negative impact of the countrys economic situation

SALES PROMOTION

In-house branding of retailer shops would give a feel to the customer about the
product

Road-shows, hoardings, Wall paints, display behind Autos, Retailer meets, Banner
ads, Distribution of leaflets and catalogues, etc. would help boost sales in a big way.
Awards distribution to retailers and distributors in conferences would give a huge
moral boost to them. This would also motivate them to sell more.
Organizing overseas conferences for top distributors of the country and treating them
well would also encourage them to do more in the next year.

SUPPLY AND COMPETITION


Coimbatore is the biggest supplier of pumps in the country. All major players outsource their
products from manufacturers based in Coimbatore. More than 400 local pump manufacturers
co-exist in the city. China made pumps are the biggest competition to all small and big
players in the country. Giant players like KSB, CRI, CG, Lubi, Texmo, Sharp, etc. are major
competitors for a growing pump manufacturing firm.

GOVERNMENT POLICY
VAT/ Taxes in Gujarat being 5% increases the sales in Gujarat (as compared to few other
states where VAT is 15%). Non-uniform taxation prove to be a major deterrence to growth.
There have been talks going on since a long time about introducing Goods Service Tax
(G.S.T.) across the country. Such, standardization of taxation is a must to provide a levelplaying field for all. Reduction of Excise duty if possible. However the current excise duty of
5.15% on pumps is fine. Excise and VAT Exemption for exports is a must. This already
exists. However there is a lot of paper formality and clearance exercises for exports, excise
exemption and Tax exemption. For example, producing H-Form for VAT Exemption is a big
hitch in exports. Similarly, for producing ARE-1 Form the long procedure of getting CT1
Bond and then distributing copies to Manufacturer, Seller, exporter, excise office, getting
signatures etc. hinders fast growth and interest of manufacturers to export.

CURRENT MARKETING SITUATION


The standard retailer and distributor network for marketing, promotion and sales of Self
priming pumps is the current situation. However growth of online sale has led to emergence
of half a dozen online players that sell a large variety of different brands of pumps. Few to
name are pumpbazaar.com, pumpkart.com, snapdeal.com etc. Online platform for selling
pumps has led to direct consumer interaction, direct complaints interaction and direct service
interaction. This reduction in communication gap has led to a strong feedback system which

helps to improve product quality. No sharing of margins with the distributor and retailer helps
the manufacturers to improve their margins.

ISSUE AND OPPORTUNITY ANALYSIS


Following are the issues in market planning:

Nationwide service network is a must.


Pressure pump issues
Customer expectations of getting the service within hours.
Issues in pump failure due to water spilling on motor body, delivery side clogging due
to unwanted waste, dry running of pump, Cement concrete pebbles getting inside the
pump casing, incorrect selection and installation of pumps.

OBJECTIVES
To achieve sales worth our objective as a beginner is to achieve sales of over 2

crore in the very 1st year especially in the luxury, OEM and consumers segment.
To achieve our target we will adopt the below mentioned marketing strategy and
action program.

MARKETING STRATEGY

100% customer satisfaction will be our foremost motto.


Distributors and retailers who are the real promoters of the product will get reasonable
margins.
To set up an effective and prompt service network. (i.e. easy availability of spares
etc.)
To launch retailer schemes, to give special benefits to distributors, providing sufficient
advertisement material to retailers and distributors.
Distribution of standees, banners, leaflet, catalogues etc. in order to give consumer a
complete idea about the product.

ACTION PROGRAM

Advertisement
Distribution of hand-bills in newspapers.
Advertising in magazines and newspapers.

Participating in Exhibitions.
Online advertising.
Hoardings at key spots.
Road-shows to make people aware of a new brand
Conducting Social responsibility functions such as free medical health checkups etc.

Documentation
Contract with distributors involving distributorship offer, Terms of payment,
service policy, replacement and warranty terms, MOU and target fixing, Terms
of delivery, delivery time, legal jurisdictions, channel financing if required
through a good bank.
All points for a long term sustainable relationship between manufacturer and
distributor are documented.
Documentation of warranty card, company logo, trademark, Registering brand
name, Acquiring required government licences, excise no., GST and CST Tin
Number etc.