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Eveready Market sectors Should Expand Into Rural Markets Marketing Essay

Should Eveready Market sectors Pvt. Ltd. extend its market to the rural areas to be able to increase its sales?

Rationale:

In the present situation of the company, the company is merely providing to the urban marketplaces that is in the metropolitan areas. Recently Eveready Sectors has been growing all its other businesses, but neglecting the development of this business. Thus the business is now focusing on expanding to the rural market of India.

Theoretical Framework:

Financial and non-financial factors will be studied under consideration will analyzing the business's new endeavor. A SWOT and Infestation analysis will be achieved to assess the company's project. These two analytical tools will help us gain better knowledge about the opportunities and hazards that the business is most likely to following the development. Ansoff matrix will be utilized to investigate the projects framework as well as the advantages and disadvantages of the job. Investment Appraisal technique will used to analyze the financial feasibility of the job.

Key areas of syllabus:

Marketing

Accounting and Finance

Methodology:

Primary research:

Primary research was conducted by firmly taking interviews of the company's Mr. Suvamoy Saha, Complete time director of the renowned company and also of a non professional director Mr. Aditya Khaitan. I conducted these interviews to get an idea for the necessity of the extension as well as the advantages that the company will have from the expansion. I've also conducted the interview of the marketing mind rival company that has already been delivering to the rural market to access learn about the existing situation of the rural market.

Secondary research:

I have analyzed the project report that the company has provided me with generously to carry out my investment appraisal approach. I've also researched the internet and the gone through many literature to consider substantial quarrels and facts that i could put forth in my commentary.

Action Plan:

Date

Task

Modification

5-12 December 2010

Topic selection

Changed from benefits associated with expansion to benefits only in terms of revenue to increase focus

19 December 2010

Research Proposal Submitted

23 December 2010

Feedback received

Methodology modified, Aims elaborated upon

1 January 2010

2 main interviews conducted

7 January 2010

Project record studies

10 January 2010

Completed financial data examination, project survey and decision tree

Decision tree omitted due to the insufficient data

15 - 21 January 2010

PEST/ SWOT / Ansoff matrix

3 February 2010

First full draft

5 February 2010

Feedback recieved

Minor changes made

15 March 2010

Final submission

Limitations:

Throughout my business job I have experienced many troubles such as obtaining major and extra data from within the institution, as all the financial websites are blocked because of the school IT coverage. I've not had the opportunity to take a long comfortable interview of both associates of the business Mr. Suvamoy Saha and Mr. Aditya Khaitan however I've mentioned the tiny interview I have possessed with Mr. Suvamoy Saha and Mr. Aditya Khaitan in the appendices.

Main Research and Findings:

My commentary included the detailed analysis of the business's strengths weakness and many other aspects of the business. A few of main research and findings of the company would be:

The company is one of the primary seller of batteries in India

The company is well known for its excellent quality and fast and effective service

The main market of the business is India.

The company has a total of six manufacturing units across India and fifteen sales offices across the complete nation which really is a very huge amount

The main research and development lab of the company is in Kolkata

The labor force as on 31. 12. 2009 was a staggering 2700 employees.

The annual sale of the company for the year 2009 was Rs. 92530 Lakh.

With modernization of a few of the rural areas in India and also the increasing population on the rural part has opened entrance doors for the business to advertise its product in the rural areas.

The company has a very good brand image, which can only help to attract more customers in the new market and boost the profit.

Company Details

Eveready Companies India Ltd. a 103 yr old company is well known for its syndication strength and folks Development. Eveready Business India Limited is one of India's most respected FMCG companies. The company has a portfolio comprising dried up cell batteries (carbon zinc batteries, rechargeable batteries and alkaline batteries), flashlights (torches) and packet tea. It has recently forayed into the mosquito repellent industry under the brand, 'Poweron'.

Eveready is India's most significant selling brand of dried up cell batteries and flashlights (torches), with dominating market shares of about 46% and 85% respectively.

Eveready is the world's third most significant designer of carbon zinc batteries, retailing greater than a billion units annually. Its carbon zinc batteries dominate the Indian market with a complete range for those equipment types.

The turnover in the financial season 2005-06 for Eveready Establishments India Limited was approx. US $ 176 million. Eveready celebrated its centenary yr in India in 2005. The new tagline "The Next Century of Ability" affirms Eveready's dedication to being technology leaders well into the future, evolving with consumers to meet their changing needs. From small beginnings with an transfer consignment in 1905 of Rs 500, Eveready today dominates the Indian market and means portable ability and light to millions of consumers.

Research facilities

Eveready has a totally computerized battery screening facility - the only battery testing laboratory accredited by National Accreditation Mother board for Testing & Calibration Laboratories (NABL) - where batteries can be analyzed as per BIS, IEC and JEC expectations.

Eveready's research team constitutes highly experienced Scientists, Technicians, Chemists and Technicians focused on maintaining technology management in Zinc-Carbon batteries, Flashlights and related components.

The Research Centre has Pilot Vegetable facilities, Analytical tests facilities such as Atomic Absorption Spectrophotometer (AAS), Polarograph, X-Ray Diffractometer (XRD) and a Chemical substance Laboratory.

The Eveready Research Centre is capable of providing world-class assessment and research support to meet strict customer requirements from across the world.

Eveready Market sectors has savored a great monopoly till the recent past. Today the business is facing difficult competition since there are many competitors in the market. It has been following a vintage system of working. Now to be able to increase its market share, I believe Eveready should think about rural markets as in these areas the competition is less and Eveready ought to be the first someone to dominate these areas so that their market show remains normal or in fact better. Eveready has mainly concentrated on the metropolitan places till now and today I think it is time for them to look into the rural industries of the united states as well because now a days large market sectors are being create in these areas and so they will maintain need of the products. These industries then wont need to transport materials from the locations which will add to their cost due to transportation.

SWOT examination:

The vast product profile of Eveready Sectors is an extremely big durability of the company. If in a single particular sector one of its products fails, the company can hide the deficits from profits that it gets from the other products from the business. The effective distribution route also helps Eveready to be certain that its products are reaching to the people. The company has a very good brand image that really helps to draw in customers. Any new product launched by the company will be well accepted on the market as a result of reason mentioned previously. Eveready Market sectors has its sales office buildings spread all over India and the brand commitment of the clients is very strong because of the guarantee of good quality and affordable prices. Because of this the company will have a competitive advantages over its competitors. It is more probable to keep its monopoly in the Indian market due to its presence in the united states for more than century.

Though the company has a number of strengths, they do have weaknesses as well. The company follows an outdated system of work which includes excess of newspaper works which wastes energy and time when the right technology is merely next door. Eveready struggles to deal up with the market changes due to its wide spread. As the competition is becoming tuff, the marketplace share of the company is certainly going down speedily as it is being distributed by its different competition. Due to less money flow unlike its prior years, the company is keeping on advertising which is not supporting them in any way as people are not informed of the business's new products and prices. The company has is faltering in adopting new technologies whereas its competition are entering the market fully equipped with the latest technology which gives them economies of scale as well as better quality products. You will discover no unique products produced by Eveready India PVT. Ltd. The merchandise they make has nothing at all extraordinary than the merchandise of its rivals.

There are some opportunities for Eveready that if made use of can get its monopoly back the market. You may still find major servings of the rural portion to be tapped by Eveready. If it can so, the company increase its customer base as well as brand. There are plenty of new technology is offered which if utilised, gives the company a lot of edge over its competition using its high quality product and already proven brand name. The company can also start more advertisements to keep its brand name and devotion. Company can also spend money on R&D to grow its product mix and target a myriad of customers. In a few of the rural areas, it is presumed that if the tea packet is red, this means that the tea is way better. As Eveready markets its tea in renewable packets, it may think on changing the color of the retail packets from renewable to red to increase its sales. Eveready can certainly takeover small companies ruling in the rural areas. Some areas are not feasible for the company to market goods. THEREFORE I think they can develop E-marketing where they can sell their goods to anybody on earth and can reach them in no time. Eveready can also think of growing products which have alternate consumption such as torches which is often found in the dark and also help in detecting counterfeit money.

After a set of opportunities, the company needs to be familiar with the risks to it. The competition is increasing daily and the individuals are getting greedy to get the very best quality product in the least price and all the firms are fighting to get to that level keeping their earnings in mind. A fresh player in the market maybe a hazard as he'll be aware of the current market and will hold the latest solutions on his part to compete with. Eveready should also be mindful of its rivals that it generally does not eliminate its biggest customers. All the companies combat for the purchase price as the least price takes everything. So Eveready also need to assign competitive prices to endure in any market. If the competitor has a superior access to stations of circulation, then their will products would easily reach the people and faster too. So Eveready should also manage its distributing stations to be successful or continue to be one.

PEST evaluation:

In order to expand in the rural regions of India, Eveready has to keep in head many political, economical, social and technical factors in mind in order to conclude whether it'll be to their benefits or disadvantage by widening in the rural areas of the united states.

Their can be trade limitations in the rural areas. Materials from the cities may need to be taxed which will increase their cost and can ultimately impact its customers i. e. the clients. Before getting into the rural sector of circumstances, the company must check out the political stability of the state of hawaii. If the political conditions aren't stable, then there will be protests and punch very often and the labours wont come for work fifty percent of that time period and then the company will suffer a huge loss. The employment regulations of the rural areas also needs to be reasonable so that the labours can be employed easily and it could also become easier for the company to deal with. Frankly speaking, in cities it is straightforward to set up a business but it's very difficult to get land. But in the situation of rural areas, it is very easy to get land but very difficult to create an industry as a result of various pressure categories acting in these areas. More of farming nd breeding takes place in these areas and the farmers are incredibly particular about the business setting up there as almost all of them have a tendency to demolish or damage the crops for some reason or the other. Just like the TATA NANO place in Singur, Western Bengal. The farmers protested contrary to the plant establishing there and the business had to undergo a huge loss as that they had already bought a huge land and acquired started building the stock for the production of the world's cheapest car.

Now approaching to inexpensive factors, the business has to retain in mind the potential economical development of the place they will create their industry in. They also have to keep in mind the taxes gathered by the state if they are sensible or not.

Coming to social factors, Eveready really needs healthy labours and also offers to keep in mind that it does not deteriorate the fitness of the people in an around its manufacturing plant. If the career behaviour of its professionals, labours etc aren't good, then rather than making a profit and increase in market share, the company may suffer a huge loss. People is only going to work with the business if the company ensures them their security whether health or financial. Till the business doesn't involve in a good amount of advertising and promotion, their market show wont increase much as the consumers wont be familiar with the products made by the business. So Eveready also has to keep in mind the possibilities of marketing its products in these areas so that individuals buy their goods.

The main factor which any company would definitely consider while establishing factories in virtually any location (urban or rural) is the technical factors. The company needs to know about the possible technology in the region and which technology must be imported. There has to be a good automation in the factories so that the products are produced fast and are of a good quality. Eveready has to check out the likelihood of using the nearby resources and setting up a good R&D facility to compete with its competitors. If Eveready thinks that there surely is a good little technology incentive, they could probably consider widening in the rural regions of India.

Ansoff Matrix:

Analyzing the current the development of the task can be carried out using the Ansoff matrix also. The business is likely to develop its market, that is the company is adding the same product that it has been producing in an totally new market. The Eveready Companies is seeking to sell its Eveready batteries in the rural market, which is the new market in this case. The company is using the market penetration technique which really is a medium risk business, where the company's product is successful in today's market however in the new market it could not be that well accepted. The original investment will be at stake.

ANSOFF MATRIX:

MARKETS

PRODUCT

EXISTING

NEW

EXISTING

MARKET PENETRATION

PRODUCT DEVELOPMENT

NEW

MARKET DEVELOPMENT

DIVERSIFICATION

As you understand in the Ansoff Matrix, the primary evaluation is all if the merchandise or the marketplace of a specific company is changing. We generally use the Ansoff matrix research tool whenever a particular company is likely to introduce a fresh product or bring in itself to a fresh market or sometimes doing even both. There is also another case where the product or market is only being upgraded.

Market Penetration: This usually happens when the company tries and increases its market or its product by adding new modest changes to it rather than by completely bringing out a fresh product or a fresh market. It really is a low risk feature as the business and its product is well known in the market from before, thus bringing in minor changes wouldn't normally be a lot of a risk.

Product Development: This usually occurs whenever a particular company introduces a totally new product in the same market that it has been offering to from a long time. This a medium risk feature because the company may be known because of its quality and services in the market but the individuals are not very sure about the new product that the company has just launched.

Market Development: This condition usually gets there when the company expands its business to a fresh market. The merchandise that the business is the same however the market they are supplying it to is new. This is a medium risk feature as the merchandise of the business maybe popular but the company itself may well not be perfectly known by the consumers for the reason that particular region.

Diversification: This problem is an extremely high risks feature in the Ansoff matrix just as this conditions both the market as well as the product is completely new. An organization introduces a new product in a new market that's not familiar with it. It but clear that the consumers will see it hard to utilize the product.

Investment Appraisal:

The company has had the opportunity to provide me with a few of its very harsh project details considering the financial aspect. The business has determined the estimated cost of the enlargement to the rural areas task to be around Rs 300 crore. The company has approximated its gross annual sales for the job as follows:

Initial Investment

Rs 300 Crore

Year

Estimated Sales

1

55

2

60

3

65

4

75

5

80

PAYBACK PERIOD

The payback period approach gives around time in which the total amount of the initial investment will be recovered.

Using the payback period approach of Investment appraisal the payback period of this job is coming up to be around 4 years and six months.

ANNUAL AVERAGE RATE OF RETURN

It calculates the common profit with an investment task as a share f the total amount invested.

ARR = (total earnings during assignments/no. of yeas of project * 100) / initial amount spent.

Using these formula the gross annual average rate of come back arises to be 22. 3 %.

Analyzing the Investment Appraisal

The values in the Investment Appraisal, obtained by me at the mercy of change. There are various factors that donate to this state of mine.

The company is working to the development to the rural areas, which in turn will lead with their betterment for some reason. This may get the business some concessions from the government.

Government has promised the company a decrease in the percentage of the duty of their twelve-monthly sales. This may help raise the gross annual average rate of return and decrease the payback amount of the project.

The people moving into the rural areas will not be in a position to pay the total amount that the batteries cost because none of them have fixed careers and the recent recession worsened their condition.

There is increasing inflation which ultimately shows development and opportunities for the company, but it addittionally shows lowering demand as it reduces the disposable income of individuals.

The job will contribute towards both local and global environmental benefits. This can help the firm to fulfil its Corporate and business Social responsibility towards its stakeholders.

The section of expansion is completely unknown and it is subject to inability.

The management and the staff may also be unfamiliar to the market, thus you can find need for specific employees, which could further stall the task.

With extension economies of scale namely - technical and purchasing economies of scale can be gained.

Conclusion:-

After analysing the PEST and the SWOT examination, we see that there are many advantages and fewer down sides for Eveready India Pvt. Ltd. if it considers of increasing in the rural marketplaces of India. Due to the more competition in cities and the reduction in sales of Eveready, it is a good option for the company to remain in the cities but increase its market share by also getting into the rural areas.

Appendix

Product Mix

Batteries

Torch

Packet tea

CFL

Coils

Vaporizer

Dish wash

Pencil AA

Brass ( Jeevan sathi Range)

TEZ

EL Range

8 HR

60(45+15) NIGHTS

DW-100

Pencil AAA (Remote Battery)

Aluminum

JAGO

PL Range

10HR

DW-200

D size(Big size Battery)

Plastic

CLASSIC

Metal Halides (Industrial)

12HR

DW-400

C size(Medium Size Power supply)

Led Torches (Digi Led)

GOLD

Halogens

Rechargeable Batteries & Chargers 700 mAh

Rechargeable Torch

Rechargeable Batteries & Chargers 2100 mAh

Recharge Batteries - AAA - 600mAh

Cordless Mobile Batteries - T107, 110, 109

Strengths

Wide product range

Effective distribution channel

Known brand name

Competitive advantage

Familiar with the Indian market due to its presence for more than hundred years.

Weaknesses

Outdated system of work

Unable to deal up with the changes

Decreasing market share

Excess of paper works

Decreasing advertisement

Failure to look at modern technology

Undifferentiated products

Opportunities

Still major portion of rural section to be tapped

New technology is available

Can use advertisements to utilize its brand name

Research and Development to expand product mix

Change packets renewable to red.

Can takeover small companies.

Developing e-market

Product with alternate usage

Threats

Increase in competition.

New player in the market

Rival technology with much better version

Competitor having a solid hold on its biggest customers

Price war

Competitor has superior access to channels of syndication.

Political

Environmental regulations

Tax policy

Trade restrictions

Tariffs

Political stability

Employment laws

Pressure groups

Economical

Exchange rates

Economic growth

Interest rates

Inflation rate

Social

Health consciousness

Career attitudes

Emphasis on safety

Population progress rate

Advertising and publicity

Technological

Automation

R&D activity

Rate of scientific change

Technology incentives

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