A PROJECT REPORT ON MARKET POTENTIAL FOR AUTHORISED ANNUAL MAINTENANCE CONTRACT OF DIESEL GENERATOR SETS IN PUNE INDUSTRIAL ZONE

SUBMITTED TO UNIVERSITY OF PUNE IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF MASTERS IN BUSINESS ADMINISTRATION (MARKETING)

SUBMITTED BY ANKUR KUMAR SHRIVASTAVA

VISHWAKARAMA INSTITIUTE OF MANAGEMENT PUNE-411048 2005-2006

ACKNOWLEDGMENT

This project would not have been completed without the assistance and guidance of many individuals. I would take this opportunity to acknowledge the help of them, in providing guidance, spending their valuable time and reviewing my project.

In particular I would like to express my heart felt gratitude to my project leader at JP Synergy Consultants, Mr. Pushkar Phadtare for his constant support, recommendations and continuously motivating me for the project, without which it would have been not possible to complete my project. His experience, feedback and hard work kept me on track and helped me produce much better results.

I would also like to acknowledge the support and valuable time given to me by my Project Guide Prof. Abhay Kardeguddi and Dr. Sharad Joshi, Director of Vishwakarma Institute of Management who gave me guidance at each and every step of my project.

I would also like to thank all the managers in the different companies, which I visited, for their kind cooperation during my project.

TABLE OF CONTENTS

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14.

INTRODUCTION OBJECTIVES COMPANY PROFILE EXECUTIVE SUMMARY ABOUT THE MAINTENANCE RESEARCH INSTRUMENT RESEARCH METHODOLOGY FIELD WORK OBSERVATIONS, ANALYSIS & INTERPRETATION LIMITATIONS CONCLUSION RECOMMENDATIONS BIBLIOGRAPHY APPENDIX

1 2 3 5 7 12 17 25 26 46 47 49 51 52

INTRODUCTION

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INTRODUCTION

Due to the power problem in our country more and more companies and individuals are using diesel generator sets. In the diesel generator two things are very important- one is the product and other is the service. So the companies & other individuals using D.G. sets need service and maintenance of their D.G. sets for efficient and effective running. It was a hypothesis/thinking that many companies are not taking authorized annual maintenance contract (AMC) due to high costs or due to some to other reasons. So I have undertaken this research project to study the market of AMC and know the market potential for AMC of DG sets. Another important part of my research is to check the satisfaction or dissatisfaction of the customers with the service and to know the reasons for which the companies not prefer authorized AMC. Also I have given suggestions that how the companies can improve the service to their customers and increase the customer satisfaction.

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OBJECTIVES

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OBJECTIVES

To determine the present market of authorized annual maintenance contract (AMC) for diesel generator sets.

To identify the share of different service providers of annual maintenance contract to various companies.

To know the preference of companies for the annual maintenance contract given by service providers.

To determine the preference of companies for authorized service.

To know the payment terms for annual maintenance contract preferred by different companies.

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COMPANY PROFILE

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COMPANY PROFILE

JP Synergy Consultants is a firm promoted in the year 2002 by professionals having wide experience in the industry. This is a consultancy firm engaged in providing consultancy services to the industry. The areas of operation are:

Marketing Manufacturing Human resources development Project Management

Marketing Consultancy includes market development, channel partner identification, evaluating distribution network, strategy formulation and

implementation, customer satisfaction index studies, market research and training. Manufacturing Consultancy includes productivity improvement, quality enhancement programs and management effectiveness and measurement modules. Project management includes evaluation and value estimation of plants, facilitating the process of takeovers, facilitating production process. Human resource Development consultancy includes managerial effectiveness, goal setting and evaluation, role of organization and its different focal functions. The firm is broadly divided into three functional areas namely consultancy & project management, training and market research.

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The firm s customers include

Kirloskar Oil Engines Ltd.

Tata Motors

Bharat Vikas Group

Coca-Cola

Bank of Maharashtra

Niranjan Polymers Etc. To name few.

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EXECUTIVE SUMMARY

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EXECUTIVE SUMMARY

This project was undertaken to perform the market study of annual maintenance contract (AMC) for diesel generator (D.G.) sets and also to know the market potential for authorized annual maintenance contract of D.G. sets. Firstly the questionnaire was prepared and a pilot study was conducted. Then the questionnaire was revised and the main research study was done. First the areas outside Pune city were targeted which comprised of companies, hotels, and institutes. After outside Pune city was covered, Pune city and Pimpri-Chinchwad were targetted. The maintenance managers through direct interview gave mostly the feedback. A total of 206 customers were covered in this research. Through the survey knowledge was gained about the types of D.G. sets used by companies, how many companies have annual maintenance contract for D.G. sets or they are doing self-service. The survey gave an insight into the different service providers to the D.G. sets of different companies, the type of AMC they are providing i.e. comprehensive or without material. One of the most important things found from this survey was that how many of the companies are satisfied or dissatisfied from the service and what are the reasons for their dissatisfaction. On the basis of conclusions, recommendations are suggested for the AMC market of D.G. sets. To target more and more customers, the price of the AMC should be competitive enough to attract the customers. Also the distribution network of service dealers should be appointed in such away that each important area is covered to meet the specific customers requirements of that area. The marketing of the AMC

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service should be done in such a way that more and more customers should be targetted in the promotion. The type of research methodology selected was descriptive research because the aim of the research was to collect information from different respondents. Census method was adopted for the selection of industries. The field for research was decided such that it would cover all the important areas of Pune district, which have got potential for AMC.

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ABOUT THE MAINTENANCE

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ABOUT THE MAINTENANCE

Maintenance is the key to lower operating costs. A diesel engine requires regularly scheduled maintenance to keep it running efficiently. There are basically two types of maintenance done for diesel generators: 1. Preventive Maintenance: This type of maintenance is done on a regular basis under a maintenance schedule so as to prevent any breakdown of the D.G. set. This is the easiest and least expensive type of maintenance. There are 4 types of maintenance checks in preventive maintenance:

a) A Check: Daily Lubrication: Regular oil level is checked, top up if necessary Fuel System: Fuel level in the fuel tank is checked and the tank cap is secured. Cooling System: The coolant level is checked in the radiator top up if necessary and the cap is secured. Instruments: All instruments are checked if they are functioning. Others: Leakage of coolant, fuel and lub oil are checked & rectified.

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b) B Check: 300 hours/every 3months All the A checks are repeated Lubrication: Oil in the sump is changed, drained off while still hot and the magnetic drain plug is cleaned. The FIP linkage is lubricated by using oilcan. Oil level is checked in FIP and governor and top up if necessary. Engine oil filter housing is cleaned. Oil filter cartridge and O-ring are replaced. Oil filter housing is filled with recommended engine oil. Fuel System: Both fuel filters are changed. Drain plug of fuel filter bowls are removed and sediment id drained off. Cooling System: Coolant concentration is checked;

replacement or addition of coolant is done if necessary.

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Radiator

core

is

cleaned

with

compressed air. Air System: Restriction indicator is checked whether in operating condition or showing red signal? Air cleaner element is cleaned for dry type air cleaner. In case, red signal is shown in restriction indicator, and then the element is taken up for cleaning. Oil condition is checked and oil level in air cleaner oil bath. Others: Connections of starter motor and

alternator are checked and tightened if necessary. Cylinder head units are tightened (with engine warm) and in correct sequence. Valve clearance is checked and adjusted, if necessary (engine warm).

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c) C Check: 600 hours/every 6 months Battery mounting is checked. Battery posts and terminals are cleaned. Terminals are tightened and Vaseline/petroleum jelly is smeared. Air ducting hoses are removed and cleaned. Engine breather cap (stainer) is removed and cleaned in kerosene oil; air is blown in reverse direction and refitted. Rubber gasket is replaced, if necessary. Valve clearance is checked and adjusted, if necessary (engine warm). Lubrication of water pump is done with bearing grease. Fuel filter bowl is cleaned and filter element No.1 is replaced. The drain plug of fuel filter No.2 is removed and sediment is drained off. The system is bleeded. The thermostat is checked for proper functioning and operating temperature. Engine is checked for trouble-free operation (colour of exhaust gases and nozzle operation).

d) D Check: 1200 hours/every 12 months All A, B, C Checks are repeated.

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Oil pan mounting cap screws is checked whether is tightened or not. Fan belt tension is checked and replaced if necessary. Grease is applied to fan hub & belt tensioner. The fuel tank is checked for the dirt and sediments.

2. Breakdown Maintenance: Breakdown maintenance is the maintenance, which is carried out after the breakdown of the diesel generator. It involves huge cost as the production is halted due to breakdown on diesel generator, if no alternative power supply is there. It should be avoided as far as possible. Preventive maintenance is done on a regular basis.

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RESEARCH INSTRUMENT

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RESEARCH INSTRUMENT

Marketing researchers have a choice of three main research instruments in collecting primary data

Questionnaires Psychological tools Mechanical devices

QUESTIONNAIRES:

A questionnaire consists of a set of questions presented to respondents because of its flexibility, the questionnaire is by far the most common instrument used to collect primary data. These need to be carefully developed, tested and debugged before they are administered on large scale. In preparing a questionnaire, the researcher carefully chooses the questions and their form; wording and sequence, the form of the question asked can influence the response. Marketing research distinguish between closed-ended and open-ended questions. Closed-ended questions specify all the possible answers and provide answers that are easier to interpret and tabulate. Open-ended questions allow respondents to answer in their own words and often reveal more about how people think. They are especially useful in exploratory

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research, where the researcher is looking for insight in to how people think rather than measuring how many people think a certain way.

PSYCHOLOGICAL TOOLS:

Marketing researchers can probe a buyer s beliefs and feeling using psychological tools such as:

Laddering techniques Depth interviews Rorshach tests

MECHANICAL DEVICES:

Mechanical

devices

are

occasionally

used

in

marketing

research.

Galvanometers measure the interest on emotions aroused by exposure to a specific ad or picture the tachistoscope flashes and ad to a subject with an exposure interval that may range from less than one hundredth of a second to several seconds. After each exposure the respondent s eye movements to see where their eyes land first how long they linger on a given item and so on.

Quantitative measures: Some marketers prefer more qualitative methods for gauging consumer opinion because consumer actions do not always match their answers to survey VIM, PUNE 13

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questions. New tools such as video s, pagers and informal interviewing will help marketers overcome the limitations of traditional research methods.

TYPES OF QUESTIONS:

Closed-end questions Open-end questions.

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CLOSED-END QUESTIONS

Name Dichotomous

Description A question with two possible answers

Example In arranging this trip did you personally phone America? Yes No With whom are you traveling on this flight? No one Children only Spouse Friends

Multiple choice

A question with three or more answers

Likert Scale

A statement with which the respondent shows the amount of agreement A scale connecting two bipolar words. The respondent selects the point that represents his or her opinion A scale that rates the importance of some attribute A scale that rates some attribute from poor to excellent A scale that describes the respondent intention to buy

Small airlines give better service than large ones. Strongly disagree Disagree Agree Strongly agree Indian airlines Large_ _ _ _ _ _ _ _ _ _ Small Experienced _ _ _ _ _ _ _Inexperienced Modern_ _ _ _ _ _ _ _ _ _ Old fashion Airline food service to me is Very important Important Not important Indian food service is Excellent Very good Good Fair Poor If an in-flight telephone were available on a long flight I would Definitely buy Probably buy Not sure Not Buy

Semantic differential

Importance scale Rating scale

Intention to buy scale

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OPEN-END QUESTIONS

Name Completely unstructured

Word association

Description A question that respondents can answer in an unlimited number of ways Words are presented one at a time and respondents mention the first word that comes to mind An incomplete sentence is presented and respondents are asked to complete it An incomplete story is presented and respondents are asked to complete it

Example What is your opinion on Indian airlines What is the first word that comes to your mind when you hear the following Airline_ _ _ _ _ _ _ _ _ _ American_ _ _ _ _ _ _ _ _ When I choose an airline the most important consideration in my decision is_ _ _ _ _ _ _ _ I flew American a few days ago. I noticed that the exterior and the interior of the plane had very bright colours. This aroused in me the following thoughts and feelings_ _ _ _ _ _ _ _ _ _ .Now complete the story.

Sentence completion

Story Completion

Picture

A picture of two characters is presented with one making a statement respondents are asked to identify with the other and fill in the empty

Thematic appreciation test(TAT)

A picture is presented and respondents are asked to make up as story about what they think is happening or may happen in the picture.

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RESEARCH METHODOLOGY

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RESEARCH METHODOLOGY

The marketing research process involves a number of inter-activities which overlaps and do not rigidly follow a particular sequence. A researcher is often required to think a few steps ahead. For example, if a researcher has formulated a research problem and is considering the sample plan, he is suppose to consider the time of data to be collected as also the detailed tabulation. This is because the various steps will have some influence over the following step. Let us now describe the major steps involved in marketing research project.

FORMULATING THE RESEARCH PROBLEM The first step is research is formulating a research problem. It is most important stage in applied research, as poorly defined problems will not yield useful results. It is rightly said, a problem well defined is half solved . Poorly defined problem s cause confusion and do not allow the researcher to Develop a good research design. In order to identify the research problem, three categories of symptomatic Situations, namely, overt difficulties, latent difficulties and opportunities should be studied. Overt difficulties are those which are quite apparent and which manifest themselves. For example, if a firm has been witnessing a decline in its sales for sometime this could be called an overt difficulty. Latent Difficulties, on other hand, are those which are not so apparent and which, if not checked would soon become evident. For example, declining sales may in due course demoralize the sales staff. Unnoticed opportunities indicate the potential for growth in a certain area of marketing. Such opportunities are not clearly seen and some effort is required to explore them. VIM, PUNE 17

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A complete problem definition must specify each of the following: [i] Unit of analysis [ii] Time and space boundaries [iii] Characteristics of interest- both the results that are of concern to management and the variables that are to be tested for their relationship to the results [iv] Specific environmental conditions Taken together these four aspects identify the who, when, where & what of the research. These are briefly explained.

UNIT OF ANALYSIS The individuals or objects whose characteristics are to be measured are called the units of analysis. The units always identify the objects to be studied. It is necessary that the universe is well defined. Consider, for example, the statement Women s dress buyers in Delhi stores on January 30, 1990 . The universe indicates Buyers of women dresses implying that the buyers may be either male or female. Time and space boundaries As regards time and space boundaries, we find that two universes are again different. In the first instance, a precise date, viz. 30th January 1990 is given. The buyers universe specifies stores located in Delhi.

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CHARACTERISTICS OF INTEREST This aspect identifies the focus problem. It is necessary that the problem definition specify one or more characteristics to be measured and the fact that the nature relationships amongst them are to be determined. Thus, we may like to know more specifically as to what dresses are liked by educated women or those who are employed.

ENVIRONMENTAL CONDITIONS The problem definition must specify the environment for which the company wants research results. It may also spell out possibilities of changes as well as the direction of change in environment so that the research study does not become irrelevant. It may be emphasized that the problem definition in marketing research is a step towards identification and structuring of the management s question.

HYPOTHESIS DEVELOPMENT A hypothesis is a proposition, which the researcher wants to verify. Often there may be several competing hypothesis, either specified or implied. If before undertaking the research, the researcher finds that all hypotheses are true, then there is no need whatsoever to undertake of research is to select among the possible hypotheses and to test them empirically with the help of statistical tool in order to ascertain whether they are true or false. While the formulation and testing of hypotheses are important in research, it is not necessary that every marketing research study must have a hypothesis.

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CHOICE OF RESEARCH DESIGN A research design specifies the method and procedures for conducting a particular study. The researcher should specify the approach he intends to use with respect to the proposed study. Broadly speaking research designs can be grouped into three categories- exploratory research, descriptive research and casual research. An exploratory research focuses on the discovery of ideas and is generally based on secondary data. It is preliminary investigation, which does not have rigid design. A descriptive study is undertaken when the researcher wants to know the characteristic of certain groups such as age, sex, educational level, income, occupation, etc. In contrast to exploratory studies, descriptive studies are well structured. A causal research is undertaken when the researcher is interested in knowing the cause and effect relationship between tow and more variables. Such studies are based on reasoning along well-tested lines. Further, the researcher should select that research design which is appropriate in achieving the objects to study.

DETERMINING SOURCES OF DATA The next step is to determine the sources of data to be used. The marketing researcher has to decide whether he has to collect primary data or depend exclusively on secondary data. Sometimes, the research study is based on both the secondary and primary data. When a study is to be based on a secondary data, whether partly or fully, it is necessary to satisfy oneself the data are quite suitable for the objectives spelt out by VIM, PUNE 20

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the study. A sincere effort must be made to look into the existing data with a view to examining their suitability for the research. It is only when such secondary data are unavailable, inadequate, or unreliable, that a researcher should decide on collecting fresh data.

DESIGNING DATA COLLECTION FROMS Once the decision in favour of collection of primary data is taken, one has to decide the mode of collection. The two methods available are observational method and survey method. Observation method: This method suggests that data are collected through one s observation. If the researcher were a keen observer, with integrity he would be in a position to observe and record data faithfully and accurately. While the observational method may be suitable in case of some studies, several things of interest such as attitude, opinions, motivations and other intangible states of mind cannot be observed. Surveys: In marketing research, field surveys are commonly used to collect primary data from the respondents. Surveys can be (i) personal (ii) telephonic (iii) by mail (iv) by diary. Of these, personal and mail surveys are more frequently used in India. A choice has to be made regarding the type of survey for collecting data. There are certain advantages and limitations of each type of survey. Broadly speaking, telephonic survey is suitable when very limited information is sought in a short period of time. Moreover, such information should be readily available with the respondents. In contrast, surveys based on personal interviews are suitable when detailed VIM, PUNE 21

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information is to be collected. Sometimes a combination of two or more methods could also be used. Whether it is a personal or mail survey, it is necessary to design a suitable questionnaire, conduct a pilot survey and undertake a pre-testing of questionnaire. The pre-testing will enable the researcher to realize the shortcomings of his questionnaire. In the light of this reaction of the respondent, coupled with the personal observation of the researcher, the questionnaire should be modified.

DETERMINING SAMPLING DESIGN AND SAMPLING SIZE Another aspect, which forms a part of research process, is the sampling plan. When the marketing has decided to carry out a field survey, he has to decide whether it is to be a census or sample survey. In almost all cases, a sample survey is undertaken on account of its overwhelming advantages over a census survey. When a decision in favour of a sample survey has been taken, it is necessary to have a clear definition of the population from which the sample is to be drawn, before deciding on the type of sample design to be used. The object of sampling is to choose a sample, which will faithfully reproduce the characteristic of the population or universe.

ORGANISING AND CONDUCTING THE FIELD SURVEY Having prepared the questionnaires and select the sample design and size of sample, the next step is to organize and conduct the field survey. Two important aspects should be looked into- interviewing and the supervision of fieldwork. The task

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Annual Maintenance Contract of interviewing seems to be simple but, in reality, it is one of the most difficult tasks in marketing research. This is because respondents are generally hesitant in giving information unless approached with tact, initiative and intelligence. Supervision of fieldwork is equally important to ensure timely and proper completion of the field survey.

PROCESSING ANS ANALYSING THE COLLECTED DATA Once the field survey is over and questionnaires have been received, the next task is to aggregate the data in meaningful manner. A number of tables are prepared to bring out the main characteristics of the data. The researcher should have a well thought out framework for processing and analyzing data, and this should be done prior to the collection. It is advisable to prepare dummy tables; as such an exercise would indicate the nature and extend of tabulation as also the comparisons of data that can be undertaken. In order to derive meaningful results from the statistical tables, the researcher may use one or more of the following four steps. The first step is to calculate relevant measures of central tendency as also of dispersion, highlighting the major aspects of the data. The second is to cross tabulate the data to ascertain some useful relationship. The third is to calculate the correlation coefficient and undertake a regression

analysis between variables. The fourth is to undertake a multivariate analysis. Such an analysis uses a variety of techniques to determine important relationship amongst several variables. While designing a research study, the researcher should give adequate thought to the use of particular analytical techniques. VIM, PUNE 23

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It is necessary that the researcher give as much importance to the analysis and interpretation of data as he has given to their collection.

PREPARING THE RESEARCH REPORT Once the data have been tabulated, interpreted and analyzed, the marketing researcher is required to prepare his report embodying the findings of the research study and his recommendations. As a poor report on an otherwise good research will considerably undermine its utility, it is necessary that the researcher gives sufficient thought and care to its preparation.

CONCLUSION The marketing research process, as described above, involves various steps, through strict adherence to each of these steps may not be necessary. A researcher may deviate from the above sequence and steps depending on his specific needs. Further, while it is beneficial to draw a detailed plan and sequence of various activities in marketing research, it is hardly so if it requires such financial backing as the firm cannot afford. Another point worth emphasizing is that howsoever elaborate a research design may be, it s successful Implementation depends in no small measures on its management. In fact, management of research, whether in marketing or not in any other field is of great importance.

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FIELD WORK

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FIELD WORK

Places Visited: Chandni Chowk Bavdhan Pirangut Khadakvasla N.D.A. Road Hinjewadi Talegaon Urse Maval Kanhe Phata Nangargaon Lonavala & Khandala Phugewadi Pimpri Pune City

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OBSERVATIONS, ANALYSIS & INTERPRETATION

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1. COMPANIES HAVING ANNUAL MAINTENANCE CONTRACT (AMC) FOR D.G.SETS

TYPE OF SERVICE AMC VS. SELF SERVICE

AMC 58.25%

SELF SERVICE 41.75%

AMC VS. SELF SERVICE

42% AMC SELF SERVICE 58%

From the pie chart, we can see that 58% of companies are taking annual maintenance contract for service while 42% of companies are doing selfservice.

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2. SHARE OF DIFFERENT SERVICE PROVIDERS OF AMC TO VARIOUS COMPANIES:

1. FOR CUMMINS:

TYPE OF SERVICE % OF COMPANIES

TRIDENT SERVICE 73.33%

LOCAL SERVICE 26.67%

% OF COMPANIES 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% TRIDENT SERVICE LOCAL SERVICE
% OF COMPANIES

Trident services, the authorized dealer of Cummins has got 73.33% market share in the Cummins diesel generator sets service while other local service providers have got 26.67% share.

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2. FOR KIRLOSKAR:

TYPE OF SERVICE % OF COMPANIES

KIRLOSKAR SERVICE 78%

LOCAL SERVICE 22%

% OF COMPANIES

80% 70% 60% 50% 40% 30% 20% 10% 0% KIRLOSKAR SERVICE LOCAL SERVICE

% OF COMPANIES

The authorized dealers of Kirloskar have got 51% market share in the Kirloskar diesel generator sets service while other local service providers have got 49% share. Authorized Dealers for Kirloskar are : 1. DV Brahme & Sons Sales & Service Ltd. 2. Kelkar Brothers Sales Pvt. Ltd., Sadashiv Peth 3. Kelkar Brothers Sales Pvt. Ltd., Mulshi 4. Sagarsons Industrial Marketing (P.) Ltd., Pune 5. Vyespee & Co., Pune.

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3. FOR GREAVES:

TYPE OF SERVICE % OF COMPANIES

M.K. SERVICE 57%

LOCAL SERVICE 43%

% OF COMPANIES 57% 43% 60% 40% % OF COMPANIES 20% 0% M.K. SERVICE LOCAL SERVICE

M.K. Service, the authorized dealer of Greaves has got 57% market share in the Greaves diesel generator sets service while other local service providers have got 43% share.

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3. TYPE OF ANNUAL MAINTENANCE CONTRACT (AMC) PREFFERED BY COMPANIES

TYPE OF AMC % OF COMPANIES COMPRHENSIVE 19.17% WITHOUT MATERIAL 71.66%

TYPE OF AMC

19.17%

COMPRHENSIVE WITHOUT MATERIAL 71.66%

More than 2/3rd of companies, which are taking AMC, prefer without material AMC than the comprehensive AMC.

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SATISFACTION WITH THE SERVICE PROVIDER

1. CUMMINS SERVICE:

SATISFACTION % OF COMPANIES

SATISFIED 77.27%

NOT SATISFIED 22.73%

SATISFACTION

NOT SATISFIED

22.73%

% OF COMPANIES

SATISFIED

77.27%

77.27% of the companies are satisfied with the Cummins service while 22.73% of companies are dissatisfied. Local service providers for Cummins diesel generator sets are: 1. Palav Enterprises 2. Sai Genetic Enterprises 3. Renuka Diesel 4. DV Brahme 5. M.K. Service 6. Summit Power Industries Pvt.ltd. 7. Universal Enterprises 8. Bharat Electronics.

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ISSUES OF DISSATISFACTION WITH CUMMINS SERVICE:

REASONS % OF COMPANIES

IMPROPER SERVICE 41.17%

TIME 29.41%

COST 17.64%

PERSON'S EMPATHY 5.88%

OTHER REASONS 5.88%

REASONS 45.00% 40.00% 35.00% 30.00% 25.00% % OF COMPANIES 20.00% 15.00% 10.00% 5.00% 0.00% IMPROPER SERVICE TIME COST PERSON'S EMPATHY OTHER REASONS

41.17% of companies are dissatisfied due to improper service, 29.41% are dissatisfied due to time. 17.64% of the companies are dissatisfied due to cost, 5.85% are dissatisfied due to person s empathy and rest 5.85% are dissatisfied due to other reasons.

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2. KIRLOSKAR SERVICE:

KIRLOSKOR SERVICE SATISFACTION

SATISFIED 87.75%

NOT SATISFIED 12.25%

SATISFACTION

12%

SATISFIED NOT SATISFIED

88%

87.75% of the companies are satisfied with the Kirloskar service while 12.25% of companies are dissatisfied. Local Service Providers for Kirloskar diesel generator sets are: 1. Kulkarni 2. Aishwarya sales & services 3. Sucheta 4. Ace Engineers 5. Dubey 6. M.K. Services 7. Kelkar Brothers 8. S.Engineers 9. Summit Power Indutries Pvt. Ltd. VIM, PUNE 33

Annual Maintenance Contract 10. Raskar 11. Orient Electronics 12. Acetech 13. Accurate Power Systems 14. Trident Services

ISSUES OF DISSATISFACTION WITH KIRLOSKAR SERVICE:

REASONS % OF COMPANIES

IMPROPER SERVICE 20%

TIME 60%

OTHER REASONS 20%

REASONS

TIME

OTHER REASONS

% OF COMPANIES

IMPROPER SERVICE 0%

10%

20%

30%

40%

50%

60%

70%

60% of companies are dissatisfied due to time, 20% are dissatisfied due to improper service. And the rest 20% are dissatisfied due to other reasons.

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3. ANY OTHER SERVICE:

SATISFACTION % OF COMPANIES

SATISFIED 90%

NOT SATISFIED 10%

SATISFACTION

10%

SATISFIED NOT SATISFIED

90%

90% of the companies are satisfied with the any other service while 10% of companies are dissatisfied.

In any other service, all the other local service providers who give service for other diesel generator sets come.

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ISSUES OF DISSATISFACTION WITH OTHER SERVICES:

REASON % OF COMPANIES TIME 100%

REASON

TIME

% OF COMPANIES

0%

50%

100%

150%

All the companies are dissatisfied due to time, i.e. the service person not coming on time to give the service.

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PREFERENCE OF COMPANIES FOR AUTHORISED/ NONAUTHORISED SERVICE:

SERVICES PREFERENCES AUTH. SERVICE 48.05% NON AUTH.SERVICE 11.65% NOT REPLIED 40.30%

PREFERENCES

40% 48%

AUTH. SERVICE NON AUTH.SERVICE NOT REPLIED

12%

48% of companies prefer authorized service, 12% of the companies not prefer authorized service & 40% of the respondents have not replied.

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REASONS FOR AUTHORISED SERVICE PREFERENCE:

REASONS PREFERENCES GOOD SERVICE 66 GOOD MATERIAL 27 RELIABILITY 40 GUARANTEE 9 ANY OTHERS 11

PREFERENCES 70 60 50 40 30 20 10 0
E L BI LI TY TE E IC IA M AT ER SE R AN O TH ER V S

NO. OF COMPANIES

PREFERENCES

EL IA

AR

O O

66 companies prefer authorized service due to good service. 40 companies prefer it due to reliability. 27 companies prefer it due to good material. 9 companies prefer it due to guarantee. 11 companies prefer authorized service due to other reasons.

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REASONS FOR NON-AUTHORISED SERVICE PREFERENCE:

AVAILABILITY OF TRAINED WORKERS 1 ANY OTHERS 9

REASONS PREFERENCES

COST 9

GOOD SERVICE 2

TIME 3

PREFERENCES

ANY OTHERS

AVAILABILITY OF TRAINED WORKERS TIME PREFERENCE

GOOD SERVICE

COST 0 2 4 6 8 10

9 companies prefer non-authorized service due to cost. 2 companies prefer it due to good service. 3 companies prefer it due to time. 1 company prefers non-authorized service due to availability of trained workers. 9 companies prefer it due to other reasons.

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PAYMENT TERMS FOR ANNUAL MAINTENANCE CONTRACT PREFERRED BY COMPANIES:

PAYMENT TERMS PREFERENCES MONTHLY 9.61% QUARTERLY 17.31% HALF YEARLY 5.77% YEARLY 47.11% AS PER WORK 20.19%

PREFERENCES

10% 20% 17% MONTHLY QUARTERLY HALF YEARLY 6% YEARLY AS PER WORK 47%

47% of companies prefer yearly payment for AMC. 20% of companies prefer payment for AMC as per work. 17% of companies prefer quarterly payment for AMC. 10% of companies prefer monthly payment for AMC. 6% of companies prefer half-yearly payment for AMC.

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Annual Maintenance Contract

RELATION BETWEEN CUSTOMER AUTHORIZED MARKET SHARE:

SATISFACTION

&

For finding the relationship between customer satisfaction and authorized, the areas visited have been divided into five zones-Chandni Chowk, Pirangut, Talegaon, Pimpri & Pune City. Then it was observed for Kirloskar Oil Engines Ltd. (KOEL) & Cummins their no. of D.G.sets used. Then for no. of Kirloskar D.G.sets & Cummins D.G.sets being used, no. of customers taking authorized service & no. of customers satisfied with the service. Using analytical method of Regression, an equation that establishes the relationship between customer satisfaction and authorized market share was established. This equation establishes the relationship between market share for authorized service providers & the customer satisfaction.

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Annual Maintenance Contract

CUMMINS:
TYPE OF CUSTOMERS CHANDNI CHOWK PIRANGUT TALEGAON PIMPRI PUNE CITY

CUSTOMERS TAKING AUTHORIZED AMC SATSIFIED CUSTOMERS WITH AUTHORIZED AMC

12

11

12

REGRESSION ANALYSIS:
X 5 12 9 5 2 =33 Y 7 12 11 9 2
= 41

X2 25 144 81 25 4 = 279

Y2 49 144 121 81 4 = 399

XY 35 144 99 45 4 = 327

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Annual Maintenance Contract

X= Y=

X /N= Y /N=

6.6, 8.2

Regression Equation is Y- Y = byx (X- X ) Where byx = = (N 0.92

XY -(
X)( Y ))/ (N X 2-( X ) 2)

Putting this value in equation it becomes Y-8.2= 0.92(X-6.6) Hence final equation is: Y=0.92X + 2.13

Using this equation we can get to know that if Cummins wants to achieve total AMC market share of 83 customers then it should have a customer satisfaction of nearly 100%.

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Annual Maintenance Contract

KIRLOSKAR:
TYPE OF CUSTOMERS CHANDNI CHOWK PIRANGUT TALEGAON PIMPRI PUNE CITY

CUSTOMERS TAKING AUTHORIZED AMC SATSIFIED CUSTOMERS WITH AUTHORIZED AMC

12

11

REGRESSION ANALYSIS:
X 3 11 4 5 3 =26 Y 3 12 6 6 4
= 31

X2 9 121 25 25 9 = 180

Y2 9 144 36 36 16 = 241

XY 9 132 24 30 12 = 207

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Annual Maintenance Contract

X=
Y=

X /N=
Y /N=

5.2, 6.2

Regression Equation is Y- Y = byx (X- X ) Where byx = = (N 1.02

XY -( X)( Y ))/ (N X 2-( X ) 2)

Putting this value in equation it becomes Y-6.2= 1.02(X-5.2) Hence final equation is: Y=1.02X + 1

Using this equation we can get to know that if Kirloskar wants to achieve total authorized market share of 92 customers then it should have a customer satisfaction of 97%.

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LIMITATIONS

Annual Maintenance Contract

LIMITATIONS

In any research, the researcher should ensure that the research does not have a high degree of error. If no care is exercised in minimizing errors that are likely to crop up at every stage then they are bound to assume phenomenal proportions. In this research also I have tried to minimize errors as much as possible, but still there may be some errors due to the following reasons:

1. Non-response Error: It is almost impossible to obtain data from each and every respondent covered in the sample. There are always some respondents who refuse to give any information. This error also occurs when the concerned managers are not available.

2. Lack of knowledge: This is caused when the concerned manager is not having correct knowledge about the maintenance of diesel generator and the service provider.

3. Area Limitation: This study was limited to Pune district only. Therefore the findings may differ from other parts of India where I have not visited.

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CONCLUSION

Annual Maintenance Contract

CONCLUSION

1. Market Potential for the authorized AMC for diesel generator industry is good as there is a good demand for diesel generators among the companies due to power crisis which results in a good demand of AMC for diesel generators. Expansion is going in almost every industry and to meet this expansion, they need diesel generator sets and service is needed for these sets. The authorized service providers of AMC can tap a large share of AMC market if they keep their customers satisfied. 2. Another factor in the market of this AMC industry is that mechanical based industries have the technical expertise and maintenance department in their own company. So they do not want to take AMC for service as this will not be cost effective to them. 3. The priority of attributes which helps customers in deciding which service is better is cost, time and then person s empathy. 4. For Kirloskar Oil Engines Ltd.: The authorized dealers of Kirloskar are the market leader in the Kirloskar service. 5. For Cummins India Ltd.: Trident Services, the authorized dealer of Cummins is the market leader in the Cummins service. 6. For Greaves: M.K. Services, the authorized dealer of Greaves is the market leader in the Greaves service. VIM, PUNE 47

Annual Maintenance Contract

7. Kirloskar has got better share in authorized AMC market than Cummins because it is having more reach than Cummins due to better dealer network and also because of the higher level of satisfaction of customers with Kirloskar service than Cummins service. 8. Annual maintenance contract without material is the preferred form of AMC with the companies. 9. Majority of the companies prefer authorized service and the main reasons for their preference are good service, good material and reliability. Some companies do not prefer authorized service and the main reasons for their non-preference of authorized service are high cost involved, availability of trained workers and more time taken by authorized service providers to give service. 10. Many companies do self service as they have got trained workers, who can do the maintenance of diesel generator sets. Also it leads to saving in cost. 11. Another important point in this industry is the customer relationship management. Many companies are having long term relationships with the local service providers. So these companies not like to switch to other authorized or local service providers. 12. Yearly payment is the most preferred form of payment for AMC by different companies. In numeric terms, the market potential for AMC of diesel generator sets is more than Rs.25 crore in Pune district alone. From all this we can safely conclude that there is a huge market potential for AMC of diesel generator sets.

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RECOMMENDATIONS

Annual Maintenance Contract

RECOMMENDATIONS

Customers will switch over to the authorized annual maintenance contract if the cost involved in the service is competitive with the local service providers or authorized service providers are able to provide value satisfaction in terms of transparency, timely service and customer education.

The time taken in providing service to the customer should be minimized so as to give quick & efficient service.

Authorized service providers should extend their reach by exploring sub dealers/ representatives in industrial areas.

Another recommendation is that the diesel generator companies should do more and more promotion of their service and the customers should be made aware of the cost benefit advantages of taking service from the authorized company dealer.

The diesel generator companies should try to do customer relationship management and maintain a good relationship with customers, which goes a long way in maintaining good business relations.

The authorized service providers should focus on their service quality. They should give a better service than their local counterparts & this should be their USP. VIM, PUNE 49

Annual Maintenance Contract

The authorized service providers should give a guarantee for their service.

For keeping the customers satisfied, the service providers should try to understand the problems of customers by putting themselves in customer s shoes.

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BIBLIOGRAPHY

Annual Maintenance Contract

BIBLIOGRAPHY
BOOKS:

1. Dr. Kulkarni B.D., Research Methodology , Everest Publishing House, Pune, (2002). 2. Mr. Kotler Philip, Marketing Management , Pearson Education Inc., (2005). 3. Mr. Beri G.C., Marketing Research , Tata McGraw-Hill Publishing Company limited, New Delhi, (2004).

WEBSITES:

1. www.kirloskars.com 2. www.kirloskarapps.kirloskar.com 3. www.greavescotton.com 4. www.cat.com 5. www.cumminsindia.com

OPERATION AND MAINTENANCE MANUALS:

1. Cummins Diesel Engine , Bulletin No.3243786-02, (Jan.2003).

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APPENDIX

QUESTIONNAIRE

Name of the company Address Contact Person / Designation Phone No. Mobile No.

: : : : :

DG Set is powered by an engine of the make a) Cummins b) Kirloskar c) Caterpillar What is KVA rating of the set? Approximate Year of purchase: Do you have AMC for DG Sets? Yes No d) any other

If yes, is it for complete set or for part of DG Set? Who is the service provider? For Engine: For entire Set: Which type of AMC they provide? a) Comprehensive b) Without Material For Electrical:

In case of breakdown how fast is his service? <2 hrs. <24 hrs 2-4 hrs >24 hrs 4-8 hrs

Are you fully satisfied with your current service provider?

Yes

No

If no, what are issues of dissatisfaction? Cost Time Person s Empathy Improper Service

Do you prefer an authorized AMC service provider? Yes Reasons: Good Material Reliability Cost Guarantee Good Service No

Availability of Trained Workers

What are the existing terms and conditions? Monthly As per work Quarterly Half Yearly Yearly

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