Professional Documents
Culture Documents
Dr. Prashant Mishra prepared this case as the basis for class discussion rather than to
illustrate either effective or ineffective handling of an administrative situation. Few names of
the participants and organizations involved have been changed/ withheld to protect the
identity of the individuals, involved in the case.
Rajesh Singh, Area Manager (Industrial), Western Uttar Pradesh territory of 600 crores auto component
major Elite India Limited (EIL), was a rather worried man. Sure, his company has been the market leader
in its three prime products i.e., batteries for automobiles, UPS systems for home, offices and industrial
segment and in the recent past the company has further consolidated its position in these product
categories by acquiring its main competitor SBL. Presently the company holds around 75 percent of the
total market share of Indian market in branded segment in the above mentioned categories ( Exhibit 1).
The company has outperformed the recession hit market in past two years when industry, especially
automobile industry, was witnessing a downward trend. The company’s sales have registered an upward
surge of around 40 percent in past two financial years defying all odds in a sluggish market ( Exhibit 2).
The company has established itself as a genuine market leader in almost all the product categories and
market segments (i.e., both in primary and replacement market) where it is operating ( Exhibit 1). Mr.
Singh attributed the company’s excellent sales performance to the brand image, product quality and
performance coupled with a committed sales team, company’s pursuit of excellent customer service
combined with a strong network of dealers and distributors across the market.
However, Singh’s present worries were due to different reasons. The company had decided to enter into a
new product category called emergency light cells and the responsibility of this product launch in Uttar
Pradesh territory was given to Singh. The State of Uttar Pradesh was categorized as single territory by
EIL and its operations were controlled from Ghaziabad branch. Habituated of being a market leader
where the company and its marketing team generally pursued either market growth strategy or hold
strategy in their prime product category, Singh was now facing a new reality of trying to penetrate the
fort of market leader in emergency light batteries segment, which is quite similar to any other FMCG
segment in its form and dynamics. The task looked even more challenging given the fact that this product
cannot be distributed through the present network of EIL. The product’s rate of consumption was also
higher and the market was dominated by one particular company having three fourth of the market in its
kitty of the total branded segment, whereas unbranded players having an equally dominating presence
had always given the branded manufacturers a run for their money in this product category.
When these findings were presented to Singh, he took off some time from his hectic schedule and went
through the report. Thereafter he thought about his company’s situation in the light of the above facts.
• Being a leading brand name in the market they cannot sell without proper documentation.
• For EIL, as per its policy of providing excellent after sales support to the customers, it becomes
necessary for them to persuade their dealers to have proper sales record of every sale made and to
provide relevant documents to the customers also.
• As EIL provides warranty to the customers on all its products it becomes even more necessary to
have proper records with both the seller and the buyer.
• There is little freedom to EIL executives on price front. Due to their technological superiority1
,better quality and additional after sales service prices of ELB are slightly higher than other
competitors in normal conditions.
• EIL cannot indulge in frequent price adjustments due to the fact that the new product is having the
brand name of company’s other successful UPS and automotive brand. The company is not willing
to risk the dilution of its already established brand name and image.
• Changing the brand name is not feasible at this juncture as the company intends to take leverage of
an already established brand name. Secondly, company can minimise the cost of promotion in the
long run by retaining the same brand name for all its products.
• As the company’s main presence till now was in the automotive and UPS segment, the
characteristics of their diostribution network were significantly different from ELB market where
the company has no prior presence.
• Given the company’s well laid out policy of sharing profits with their channel members, they
cannot afford to dole out largesses to the retailers apart from what they are offering to their dealers
in other product categories. Though minor ups and downs can be accepted but the present practices
in the ELB market were not congruent with EIL’s long laid policies.
1
EIL has adopted V.R.L.A. technology keeping in mind the most commonly observed draw back of ELBs i.e., the leakage problem.
V.R.L.A. stands for Volve Regulated Lead Acid. EIL has fitted its ELBs with this type of sealing rather than the hermaticale seal
which is done by other manufacturers and identified by experts as the prime reason of the leakage problem.
After analysing these facts against the information from survey though it appeared that EIL has very few
options considering the incongruency in their long established policies and demand of the new product
market, Singh decided to consult his colleagues. Another development which was taken notice of by Mr
Singh was the State government’s announcement regarding daily powercuts due to the shortage of power
supply from various sources. This was an encouraging sign as far as the demand for ELBs was
concerned. Faced with an uphill task Singh weighed his options very cautiously, then in consultation with
his sales team he devised a two weeks launch-cum-sales promotion program. The steps taken were as
under :
1. A well thought out communication strategy in consultation with a leading regional advertising
agency Spectrum, where EIL used hoardings, mobile promovans and banners at all dealer shops as
communication tools to increase the awareness of the customers.
2. Hiring management graduates to strengthen the sales team for the promotion period. Special sales
and demonstration camps were organised and these students were placed at those camps under the
supervision of one EIL sales executive.
3. A special discount for the launch period was announced for the customers only on the purchase of
the POWERPACK ELBs from EIL camps or retail shops.
4. Extensive promotion in chandni bazar by persuading dealers/retailers to display and sell their
products on discount to the customers.
5. Appointment of dealers in chandni bazar to cater to the larger market of the State.
6. In communication, highlighting the technological superiority of EIL’s Powerpack ELBs, after
sales support and warranty offers from EIL to both the retailers as well the customers.
At the end of the promotional program Singh seemed optimistic. He quipped while talking to his
colleagues that “ our main strength is our strong brand image, service support and quality promise, so
let’s hope all these combined together will add another feather in EIL’s cap.” However, It is still to be
seen whether this optimism converts in to reality or not, which only time will tell.
XHIBIT 1 : Showing Market Share of Branded and unbranded Players
The Players Automotive Segment UPS Segment Industrial
Elite India Ltd. 52 45 80
Amco 15 14 -
Prestolite 03 01 -
Unbranded locals 30 40 19
EXHIBIT 4 : Showing Market Share of Branded and unbranded Players in ELB’s Replacement Market
EXHIBIT 5 : Showing Prices of ELB’s Fixed by Branded and unbranded Players at different periods.
The Players Prices during the summer or At the Prices During The Year otherwise (in
time of power cuts (in Rs) Rs)
Elite 281* 281*
Sunca 200-215 165-180
Brite 195-215 160-180
Unbranded 175-205 150-170
* inclusive of local tax @ 14% + Excise duty @ 18%
Questions
1. Critically examine the new product launch strategy adopted by EIL.
2. Do you agree with Singh’s assessment of the scenario and steps taken thereafter? If yes, why? If
no, then what would you have done if you were there in place of Singh?
3. In your opinion, who should be the prime target of EIL, unbranded 30 percent or the branded 70
percent segment? Explain with reasons.
4. How the purchase behaviour of ELB consumers is different from that of urban users?