Buying Behavior of Consumer For Sanitary Products

GROHE India Pvt. Ltd.
Summer Project Report

on
Consumer behavior of luxury
sanitary ware
May – June 2009
--
Under the guidance of --
Prof.
P.C.Tungare (Faculty Guide)
Anan
d Dixit (Company Guide)
-- Submitted by --
Jayant Singh Raghav
Ref. no. KH2008PGDMF128
Institute for Technology & Management, Kharghar, Navi Mumbai

GROHE India Pvt. Ltd.
A
Summer Project Report
On
Consumer behavior of Luxury sanitary ware
By
Jayant Singh Raghav
Under the guidance of Prof. P.C. Tungare (Faculty Guide) & Mr. Anand Dixit
(Company Guide)

I.
Acknowledgement
Expressions have their own boundaries but this citation is an attempt to

acknowledge the support given to me during the tenure of project. I would like to
express my gratitude towards my Faculty guide Prof. P.C. Tungare sir, for his
timely steering. Without his valuable guidance this project wouldn’t have been
successful. I would also like to thank my company guide Mr. Anand Dixit sir,
Territory manager- Pune GROHE India Pvt. Ltd. for his prop up and
encouragement.
I am extremely grateful to GROHE India Pvt. Ltd. for giving me the
opportunity to complete this assignment in their esteemed organization. I am
thankful to Mr. Pradeep Patnaik sir, Regional sales manager for his counseling
and help in facilitating smooth execution of this project. This assignment could not
have been successfully completed without his sincere guidance & Company guide
Mr. Anand Dixit sir Territory manager-Pune. I am also appreciative towards other
interns from same company for their co-operation & sharing outlook.
Above all, I am thankful to the almighty ‘Bhagwan’ for empowering me and
ushering my way to sufficiently address my duties.
Executive Summary

This project deals specially with the behavior of end
consumers of luxury sanitary ware. Today faucets & showers are no more
just the requirement for the consumer, but a luxury commodity. India is a
growing market touching world standards in sanitary market. With the
advent of local guerillas in sanitary market, competition for a new entrant
is tough in lower segment. Since upper middle class income group in
South Asian countries like India is growing very rapidly, the consumption
of luxury item will also increase at a faster pace .Indian Sanitary ware
industry is worth $ 700 million.
We have focused on the brand awareness among builders,
contractors, architects and end consumer and tried to sneak into those
factors which they look for while buying any sanitary product. We also
found out what are those cues and parameters which are prompting a
consumer from awareness to consideration. During this we also made
some viral advertisement to create awareness among Indian buyers.
Since internet today, is the most cost effective and extensive reach for
consideration set. Amid we also studied distribution channel for the
GROHE and its competitors. Report contains detailed analysis of
distribution channel of GROHE India Pvt. Ltd. Our study area is Pune,
Maharashtra. Pune is the second fastest growing city in India with more
than 350 running projects. During Commonwealth Games-08, around 15
five-star hotels have begun construction. These facts make this area most
suitable to undertake our study.

Contents
1. Introduction
2. Grohe – A brief history
3. 4-P’s of Grohe
4. Internship Objectives & Tasks
5. Research Proposal
6. Observations
7. PCSW Analysis – Indian Sanitary ware Market
8. Suggestions
9. Appendices
9.1. Questionnaire
9.2. Research Calculations
A. Reference
B. Glossary
C. Index

1.Introducti
on
B
athrooms and kitchens were once considered just as one portion of
home where people usually visit early in the morning to perform
their daily routine. But today they are one of the important
considerations for a buyer when he buys is flat or builds one for him.
Today various sanitary companies across globe are providing innovative &

creative solutions to their consumers. Bathrooms are becoming more and
more intelligent & eco friendly which not only saves water but also gives
unbelievable facility to their users. Bathrooms are becoming comfort zone
today. From faucets to showers, cisterns to waterless urinals, each &
every equipments are being designed to give more comfort.
The sanitary industry in India is neglected in early nascent stage

but now is creating news with many international players are entering
into the market with their ground-breaking out of the box solutions.
Indian Sanitaryware industry is currently in its growth stage. Indian
sanitary market is currently leaded by Hindustan Sanitary Ind. Ltd. (HSIL),
EID Parry’s comes next. The other major players are Cera, Jaquar, Marc
etc.The market statistics have become interesting after the introduction
of international brands into the market through joint ventures. Name a
few are Toto from Indonesia and American Standard from Thailand, Hans
Grohe ,Grohe AG both from Germany, Sanitec Group of Finland .HSIL has
roped in Hans-Grohe, Sanitec group to complete its product range.
Although market has huge potential but all International brands

comprise of only 10% of total market pie. But with their presence felt in
market, Indian companies are making aggressive moves. In past 12
months Hindware has launched around 50 products. Cera not being
behind has provided its product in more than 18 colors range.
So what is it that is attracting many international brands to the

country? The reasons are high augmentation of still to be penetrated
higher middle income group in the country, & unparalleled growth of
infrastructure. If words of an industry expert are to be believed only
Faucet market in India is of around $ 200 million alone. These companies’
products are two to seven times more expensive than Indian products but
in the near future they will be setting up production unit in India also.
Companies are trying to capture the emerging market with new
pioneering ideas of marketing with emphasize on customer service.
During my tete-a-tete with various Builders and Senior persons I

came to know that today’s consumer is very brand conscious, and he look
for branded instrumentalities whenever come to visit sample house.
“Today’s consumer is very intelligent and knows one n’ all brands.
Sometimes they demand one brand over other.” Companies taking cues
from these ideas are trying to cross the threshold of consumer mind.

International brands are making their presence felt by their novel
offerings and giving value to the consumer money. Mostly they are
targeting the upper segment of market and keeping their eye on high end
customers who do not mind to give some extra in order to get a
bathroom of their dreams. They are putting a lot of weight over their past
experience, in the world market. Sanitary ware companies are getting
into entire bathroom solutions in order to provide their customers with a
one-stop-shop. Cera & Hindware are coming up with studios which will
help them establishing them as premium brands in country. Grohe is
backed with a full gamut of products. Its faucets range from Rs.2, 000/- to
20,000/- . But they are promoting themselves as a finest International
brand available in India. Hindware had just at home with a new concept
saying Bathrooms are no more Bathrooms, but glamourooms. Although
this concept is not new but still able to catch attention.
Distribution channels today are backbone of any industry. In this

industry developing distribution channel is a big challenge. Margins are
really low with infuriating prices of raw materials. Companies winning
strategy is to play with their operations. Companies like Grohe have
adopted practices which are helping them to make their process more
efficient. Grohe lean® came up emulating Toyota Production system
which cut their waste by unbelievable 35%. Parry’s are working on
intelligent supply chain systems taking help of an IT company. So cutting
cost, not raising price is the real mantra.
During survey I came to know some interesting facts like builders

are providing not only branded fittings but also in some cases let the
buyers choose from selected products. This is interesting because now
even builders know the preference of their consumers and providing
them what they want. This even helps builders to select a product for
future projects. Finding their preference to select a brand we come to
know that affordability is at higher priority & a big concern for them.
Brand image of any product is also looked at.
To reach their target audience and to communicate the right

message in the right manner is the major concern for any company.
Companies are using various ways for promotion like Promotional
allowances, Public reviews in newspaper, magazines and advertisings. But
one thing that gained my attention is “word of mouth”. People use what
people believe in. They even recommend others to use what they have
trusted. Other promotional tricks are warranties & service contracts. I find
out builders in Pune region are having affinity for a product because of
their service support.
Today everyone wants his consumer to be happy and satisfied so that

he will become a repeat consumer of that product. Bathroom appliances
are durable goods, so they are bought once in 6-7 years or until
renovation take place. So keeping customers tracked and building a long
term relationship must be worked out.
2.GROHE –concise
history

G
ROHE AG, a GEuropean manufacturer of sanitary fittings,
including kitchen and bathroom Gfaucets, and Gshower systems
was headed by Friedrich Grohe in year 1936. According to World
production Index, Grohe has roughly 10% of the World in market for such
products in year 2006. The Grohe corporate center is located in
GDüsseldorf, GGermany, and it has offices in many parts of the world. Its
employee strength counts up to 5,100. It continues to expand its
presence in all economic regions worldwide in order to strengthen its
competitiveness and safeguard our company's independence.
Grohe focuses on water technology products and systems & is

continually advancing the standards of quality, functionality and design.
Their products and services respond to customers' expectations and
increase their willingness to buy. This ensures that services are in line
with market trends and guarantee high levels of customer satisfaction.
Modest Beginnings and Postwar Construction Boom

Grohe's history began in the first half of the 20th century in
Germany. Company founder Friedrich Grohe was the second son of
German entrepreneur Hans Grohe. Hans Grohe, the sixth son of a weaver,
grew up near Berlin and learned the weaving craft himself. However, in
1901 he started his own business in Schiltach, a small town in the Black
Forest. At first he made metal casings for alarm clocks for the German
firm Junghans, then the largest watchmaker in the world. Soon his
business grew into a mini-factory for stovepipe rings, shower heads,
spigots, faucets, and other bathroom fixtures, and employed about 100
people by 1928.
Friedrich Grohe joined his father's company for a time, but left in
1934 to strike out on his own. In 1936 he acquired Berkenhoff &
Paschedag, a manufacturer of bathroom fixtures that had been in
business since 1911 and was located in the small German town Hemer
near Dortmund in Westphalia. Two years passed before Grohe's company
received its first orders from abroad. World War II then interrupted the
firm's development.
After the war, in 1948, the company was renamed after the owner:
Friedrich Grohe Armaturenfabrik. Grohe greatly benefited from the

postwar construction boom. The exploding demand for kitchen and
bathroom fixtures put the company on the track to dynamic growth. In
1956 Grohe bought Carl Nestler, a manufacturer of thermostats which
was located in the small town Lahr in the Black Forest. Grohe's first
subsidiary was renamed Grohe Thermostat GmbH. In 1957, to help
promote his products, Grohe started providing special training for
retailers that carried Grohe's kitchen and bathroom fixtures and for the
plumbers who installed them. Six years later, a brand-new manufacturing
plant for thermostats was erected in Lahr.
Ownership and Global Expansion after 1960

The 1960s brought a major change in the company's ownership.
In 1961, Friedrich Grohe became CEO of his father's firm in Schiltach,
which his brother Hans had been in charge of until his death. Although
the two firms had coordinated their product lines to minimize direct
competition--Hans Grohe focused on drains and shower heads, Friedrich
Grohe on faucets and hot-and-cold-water mixers--and although they used
the same distribution channels, the two families decided not to merge the
two businesses. Instead, Friedrich Grohe sold a 51 percent majority stake
in his company to the American telephone giant ITT (International
Telephone & Telegraph) in 1968. In the same year Hans Grohe's third son,
Friedrich's brother Klaus, entered the older Grohe family enterprise, while
Friedrich Grohe kept a 27-percent stake in his brother's firm.
During the 1960s and 1970s Friedrich Grohe expanded

internationally. In 1961 the company founded its first foreign subsidiary,
in France. A second was established in Austria in 1965, followed by a third
subsidiary abroad in Italy two years later. In 1973 Grohe set up its fourth
European subsidiary, in the Netherlands. Five years later, the company
expanded into Great Britain and Spain, and in 1979 into Belgium.
The death of company founder Friedrich Grohe in 1983 closed a

chapter in the firm's history. The following year, Friedrich Grohe's heirs
bought back ITT's majority stake in Friedrich Grohe and sold their 26-
percent stake in Hansgrohe to the American Masco Corporation in
Indianapolis. Due to growing competitive pressures, the two companies
abandoned the idea of staying off each other's turf. To the contrary, over
a period of several years they fought over the Grohe brand name rights.
The conflict would not be settled until the early 1990s when it was
decided that Friedrich Grohe would use the brand name Grohe while Hans
Grohe would market its products under the Hansgrohe label.
Entering the U.S. Market in 1975

The establishment of Friedrich Grohe's first subsidiary in the
United States in 1975 marked a new chapter in the company's history. A
small office was opened in the outskirts of Chicago, and the first sales
representative, Urell, Inc. in Massachusetts, started selling the European-
style kitchen and bathroom fixtures to American builders, retailers, and
plumbers. In 1976 the new venture was incorporated as Grohe America,
Inc. and moved into a small warehouse-office complex. Two years later Al
Corwin became Grohe America's CEO and successfully steered the young
company through its initial growth phase, establishing Grohe as one of
the leading brands in the top price segment for upscale bathroom design.
Trying to catch up with the steadily rising demand, Grohe America kept
moving to bigger facilities.
In 1978 the company occupied one section of a larger warehouse

facility; in 1986, it moved to a new 64,000 square foot warehouse in
Wood Dale; and finally it settled into a brand-new custom-built 90,000
square foot facility in Bloomingdale, Illinois, in 1993. Calvin retired in
1995 and was succeeded by Bob Atkins as CEO.
Although the faucets Grohe started selling in 1975 in the United

States had a different look and functioned a little differently from the
ones American consumers were used to, they increasingly gained
acceptance. Grohe's single-hole fixtures were easy to use and install.
Another factor that contributed to sales figures doubling every year was
the constant stream of innovations in cutting-edge designs that Friedrich
Grohe introduced to the market. In 1983 Grohe America launched
Ladylux, the first pull-out spray kitchen faucet in the U.S. market. In 1989
Europlus, another pull-out spray kitchen faucet was introduced, which
became a bestseller. While the first models had a plastic finish, they were
replaced by the industry's first versions in solid stainless steel in the late
1990s.
Another innovation, the Grohmix thermostat line, was launched in

1992. Equipped with a new kind of valve that automatically regulated
water temperature as well as pressure, consumers could set the desired
water temperature just as they would do for their heating or air
conditioning systems. With an accuracy within one degree Fahrenheit, the
Grohmix line allowed bath safety for households with small children, the
physically disabled, or elderly persons. Depending on their budget,
consumers could choose between a chrome, white, polished brass, or 23-
karat gold finish. In the late 1980s Grohe became known for its
innovative custom shower systems.
During this time Grohe America invested in a range of marketing

efforts to increase the company's reach and boost sales. To promote the
company's custom shower systems, Grohe began advertising directly to
consumers. The print campaign featured the image of a naked couple
taking a shower together in a large custom shower. In 1989 Grohe
introduced a new product line for commercial customers. Five years later
the company introduced its Select Showroom program for wholesalers. In
1996 Grohe America launched its first television ad campaign and
introduced a limited lifetime warranty in 1997. By the mid-1990s Grohe
America sold European-style fixtures worth $38 million, reaching a
market share of approximately 1.7 percent.
Positioning in the Changing Market of the 1990s

By the end of the 1980s Friedrich Grohe had become one of
Europe's top manufacturers of kitchen and bathroom fixings. Sales had
climbed to over DM 700 million and exports accounted for 70 percent of
the total. Up until that time, the company's main concern had been on
adjusting production capacity and logistics to meet an ever-growing
demand. The situation changed fundamentally in the 1990s. After the
unexpected construction boom brought about by the reunification of East
and West Germany in 1990 began drying up, the German market
stagnated. Moreover, the company was suffering significant losses from
volatile exchange rates caused by weakening currencies in several
countries around the world.
To secure further growth, Friedrich Grohe had to develop a new

strategy. After a brief and ultimately unsuccessful attempt to venture into
other bath-related products such as ceramics in the late 1970s, the
company had stuck to its niche. This niche was nearing its growth limits.
There were two types of enterprises competing in the international
market--specialists and all-arounders. Although Grohe had become the
leader among the specialists, the top players in the global league of
bathroom outfitters offered the complete range of products from the
shower divider to the floor tiles. Becoming an all-arounder would have
required enormous investments. Friedrich Grohe decided to keep its focus
on an expanded range of fixtures. The company grew through a number
of acquisitions, continued to expand its international reach, and
positioned itself as a world leader in water technology.
In 1991 Friedrich Grohe was transformed into a public stock

company under the name Friedrich Grohe AG. The Grohe family retained
a majority stake in the enterprise, while the IPO filled the company's bank
account with cash to finance further growth. In the first half of the 1990s
Friedrich Grohe acquired the German plumbing fixture makers H.D.
Eichelberg & Co. GmbH, Herzberger Armaturen GmbH, and DAL-Georg
Rost & Soehne GmbH Armaturenfabrik, including its subsidiaries Aqua
Butzke AG and Eggemann GmbH. The acquisition of the privately owned
DAL/Rost group catapulted Friedrich Grohe's sales over the DM 1 billion
mark. DAL/Rost's line of bathroom installation and flushing systems and
Aqua Butzke's automatic bathroom fixtures for public buildings
complemented Grohe's product range. As part of the deal, the Grohe
family--which owned all the company's common stock--gave up 26
percent to the Rost family.
In the mid-1990s increasing numbers of Asian competitors flooded

the European markets with less expensive plumbing fixtures, putting
established manufacturers, including Friedrich Grohe, under growing
price pressure. At German building centers, do-it-yourself customers
could buy a cheaper Asian fixture for around DM 50.
Friedrich Grohe, by comparison, sold its high-quality fixtures

through specialized retailers and directly to plumbing firms, with prices
starting at DM 200. As a countermeasure, Grohe started moving a part of
its production abroad. A new factory in Thailand started putting out
cheaper fixtures for the southern Asian mass market in 1996. Two years
later Friedrich Grohe's second foreign production plant in Portugal started
operations. In 1997 the company bought a 70-percent majority stake in
Rotter GmbH & Co. KG, a supplier of sanitary equipment to businesses
and public institutions.
To position Friedrich Grohe as a "world leader in water technology"

the company invested over DM 50 million in a massive marketing
campaign. Under the auspices of the Grohe name, the firm established
four sub-brands: bathroom fixtures for consumers, such as faucets and
hot-and-cold-water mixers, were sold under the label Groheart;
thermostats, valves and other plumbing fixtures for kitchens and
bathrooms were marketed under the Grohetec label; flush toilet fittings
and tanks were labeled Grohedal; fixtures for professional water
management in public buildings were sold under the brand name
Groheaqua. The marketing campaign included ads in German plumbing
trade magazines, as well as special interest and general interest
consumer titles.
The campaign not only raised Friedrich Grohe's public recognition

but received a German marketing award in 1996. In addition to the ad
campaign the company also initiated the Profi Club, which not only
offered training to Germany's plumbing firms in how to use Grohe
products and innovations, but also offered training in making their own
enterprises more efficient. Up to 10,000 plumbers annually attended such
training sessions and received the quarterly club magazine.
Going Private in 2000

In June 1999, to the surprise of the business community and
shareholders, Charles R. Grohe, chair of Friedrich Grohe's advisory board
and majority shareholder, announced that he and the Rost family were
selling their stakes in the company. A few weeks later, the European
investment firm BC Partners won out in the auction organized by Credit
Suisse First Boston, over counter bidders including American equity house
Kohlberg Kravis Roberts and U.S. plumbing supplier Kohler. BC Partners
acquired all common shares from the two families, representing a 51
percent stake in Friedrich Grohe, and these shares were transferred to
Grohe Holding GmbH. BC Partners went on to buy back all but 0.4 percent
of the preferred stock that was publicly traded. On March 29, 2000, the
public trading of Friedrich Grohe shares ceased. Ultimately, the company
was transformed into a private entity--Friedrich Grohe AG & Co. KG.
During the next two years, measures were taken to strengthen

Friedrich Grohe's position in the world market. The United States had
become the company's most important market outside of Germany,
generating DM 200 million--or about $160 million--in sales in 2000. The
company also invested in new subsidiaries in Eastern Europe, specifically
Poland and Russia, as well as in Asia, where Friedrich Grohe was planning
to open a new production plant in Shanghai and to cooperate with a
Chinese tile manufacturer. On the internal front the company reorganized
its sales divisions and pushed its designer line of fixtures with higher
profit margins. With a world market share of roughly 10 percent in 2001,
Friedrich Grohe aimed at becoming the global leader in bathroom fixtures
and sanitary installations.

3. 4-P’s of Grohe
India
G
ROHE India Pvt. Ltd. is a fully subsidiary of Friedrich Grohe AG of
Germany. Grohe has entered into the Indian market in year 2005.
It has mulled a Joint venture with Indian sanitary giant Hindustan
Sanitaryware India Ltd. (HSIL). HSIL better known as Hindware has helped
German incumbent to use its experience. Grohe in India is targeting niche
market of luxury highly sophisticated and technologically advanced
sanitary ware market which if experts are believed, is increasing at a
faster pace. Marketing mix of Grohe was interesting to study because it

has product ranging from 2,000 to 20,000 INR. Also its distribution
channel is very effective and considered best in industry.
Product Mix
Grohe claims to have Products of International standards. Its

product mix length dwells among faucets, showers, cisterns, thermostats,
and unique customized solutions. They have broadly classified their
appliances into Bathroom & Kitchen products. Although some of products
are cross functional and included both in verticals.
Products are having high depth. Company is trying to convert

these durable items in India into specialty goods for which consumers will
be ready to go an extra mile in spending, since their target group is
higher income group. They have differentiated their products by
providing special features attached to it. Like one its Product Grohtherm
came with special features of temperature control. One important
differentiation is their customized solutions for bathrooms. These
bathroom solutions are customized for an individual. Another aspect that
creates Grohe Effect as they say among sanitary ware products is their
look & feel. Aesthetic is an important attribute as I have found out in my
survey study. With that German technology is also known for its cutting
edge features, so is Grohe.
Grohe product offerings are generally divided into three main categories
Cosmopolitans: Minimalism, with its reduction of the unnecessary and

defined iconic geometry. These are targeting those consumers which
need minimum furnishings with product.
Contemporary: These look for more garish equipments, Harmonious soft
flowing lines and conventional aesthetics, radiating longevity and
comfort.
Authentic: This ranges products having elegance of past combined with

today’s technology.
It shows how company is aware of different needs of consumer

and providing them what they need through their innovative range.
Product mix of Grohe India pvt. Ltd. is as follows

Product-Mix width
Faucets Showers Thermostats

Accessories
Bathroom:
Allure Rainshower Grohtherm 2000
Skate
Aria Relexa Grohtherm 3000
Surf
Atrio Tempesta Free hander
Essence Sena
Arabesk Aquatower
Sinofina Classic
Tenso Movario
Concetto
Lineare
Kitchen:
Atrio
Essence
Minta
K4
Zedra
Aria
Alira
Europlus
Eurodisc
Eurostyle
Eurosmart
Classic line
Costa
Arabesk
Grohe India faucets range is a good example of Line stretching with the
advent of new faucets coming in the market targeting lower income

segments. Grohe is following Product line pricing by providing their
products at three different levels of cosmopolitan, contemporary and
Authentic. Authentic are priced higher than other Contemporary which
again is more pricy then Cosmopolitan. Warranties are another major
feature that is attached to a Grohe product. Now every Grohe India
product comes with 10 years repairable warranty.
Pricing
Customer today is very diligent. When he goes out to buy

something first they take a full comparison of product on internet. If a
product is quoting price more than its perceived value, it is out of
customers’ consideration set at the same moment. Although high prices
in Indian market is synonymous to high quality. Grohe products are
priced high as compared to competitor product in the same category.
Grohe is a company having high technology products as compared to its

competitors, so citing a slightly higher price for its products can impact
consumer when they take inference form product quality and its price.
Pricing objective for the Grohe product is supposed to be product quality

leadership. Since its products are though priced higher than other
company’s product in the market but their affordable luxury is also
attached to them. Although their products need to be very much
differentiated on the basis of technology.
Grohe is supposed to be using Perceived value pricing method in India.

German technology is recognized as one of the best in terms of
performance and complexity. So perceived value is definitely higher.
Since their products are attached with 10 years warranty, their distributor
channel is also very reputed, trustworthy. The main pick out about their
high perceived value is their high customer contacts and feedback even
after the many years of sales.
Other important factors affecting its price are the company pricing policy.
Grohe has lowered their price for its Indian customers for the same
products. They have products ranging from 2,000 to 25,000 for a single
faucet .But these might be just for introductory phase of the company.
Once company will establish its name in the country it will be having
Slightly higher prices what they have today.

Promotion
Market dynamics and the changing perceptions of the customer, have

nudged Grohe.HSIL at revamping and strengthening the image of its
flagship brand, Hindware. This is expected to provide HSIL with the
muscle to maintain its competitive edge and support future line
extensions. The new communications, ‘Impressions and Expressions’,
aims to project hindware as an expression of art and a brand that
enhances lifestyle.The company has also launched Hindware Helpline,
which offers after sales service, with a capability to attend to any
complaint within 24 hours. Sustained trade promotion activities aimed at
multi-brand retail outlets have given Hindware products the necessary
fillip. Referral business has been strengthened by the initiation of special
programmes such as architect meets and seminars. The up gradation of
dealer showrooms and the setting up of Hindware Arcades have furthered
the market hold of HSIL.
A Grohe campaign Called the GROHE "Enjoyment Guarantee,"

the promotion offers a 30-day money-back promise on all GROHE
Rainshower mounted and hand-held showerheads. Until November 30, if
customers are not completely satisfied with their GROHE Rainshower
designs, they can return them within 30 days of purchase for a full
refund.
Place
Grohe believes in long term partnerships with its distributors, as well

as it selects the distributors looking at their eagerness to grow, their
reputation, past experience etc. Long
Association can thrive on mutual trust. These Distribution points are
located mostly in the growing city. Grohe has targeted major growing
cities of India like Pune, Ahmedabad, Goa, Indore, Mumbai etc.
Their policy is to capture new market not existing market. So existing in

growing city only.
Grohe has a model of State Distribution System (CDS) for distribution.
The main Distribution center for a state or a region is hold responsible for
logistics and distribution and replenishment of orders at the faster pace.
Assortment creation for the efficient utilization of space in store and
logistics transportations is done at the SDS only. The logistics software of
the company is maintained by IBM software solutions.

4.Internship
Objectives

The Objective of my summer internship are as follows
1. To understand the consumer’s buying behavior of luxury

sanitary products.
Luxury Sanitary equipments are altogether a niche market of

sanitary products and it is raising with 12% per annum in Asian countries.
Our objective is to study the typical buying behavior of the prospective
consumers and trace out those peculiar attributes which gives a cue to a
consumer to finally decide to buy a bathroom appliance.
2. To prepare a database of future customers of Grohe products.
Pune is a region which is 4th fastest growing city in the country.

Currently there are more than 500 big projects of townships & villa, row
houses, & five star hotels are running. Preparing a database of big
builders and architects was one of the important task assigned to me
during internship. The area assigned to me is Pune municipal corporation
region only.
3. To do a competitor analysis of Grohe India.
Knowing your Competitors inside out is as important as knowing

your consumers. Grohe is facing stiff competition from many big as well
as local brands in the market. A comprehensive analysis of competitors
will tell us about their big strength as well as their weakness, & last but
not the least weakness in their strength on which Grohe can capitalize
upon when making its marketing strategy.
4. To study supply chain of Grohe India.
Grohe is a new entrant into the Indian market, still a big brand in
Europe and other parts of World. Grohe has taken help from IBM to
implement logistics networking planning tool to build a case of reducing
the number of its Regional Distribution centre (RDC) in European network.
But in India it is still a distant dream. Although in year 2008 Grohe has
around 70 distributors across India & is going up to 100 by Dec. 2009.
5. To develop an advertisement for Grohe India.

Although this task is not in original list, I appended it later as I start
generating the feel of what generally the luxury bathroom fittings
generally mean for its customer. It’s sheer pleasure, status, & lavishness
attached to it.
Defining Management Problem
Any research process helps decision maker to make a decision

with high probability. Even degree of uncertainty decides what kind of
research to be undertaken. To identify all the dimensions of a business
problem is next to impossible for any researcher or objective rest alone
management student. The formal quantitative research will not begin if
the management problem is not apparent. So it is important to define a
problem first in a comprehensive manner.But here the Iceberg principle is
worth mentioning, which states that dangerous part of the business
problem is neither visible to nor easy to understand by managers.
The management problem can be avowed as

“Since Pune is a big break for Grohe India to establish its Brand,
the major apprehension of the company is ‘to understand buying
behavior of consumer’ & ‘to communicate the message in most
effective manner’”.
For this reason it is necessary to comprehend the atypical

behavior of end user. Obj.1 will assist us to figure out what today’s
consumer think of when they buy bathroom equipments. This will help us
to create a stimulus among them by giving them faithful cues. These cues
can impel them to purchase a Grohe. In the intervening time a database
will be prepared while getting in touch with and collecting data from
various builders and high-flying customers.
We have to design certain Hypotheses on a range of research

objectives. These research objectives will put in the picture of purchasing
deeds of customer in lucid way. A questionnaire need to be prepared
consist of questions marking those hypothesis and objectives. Again it is
important to lay bare the symptoms and identify the core problem of the
business. So it is needed to gather lots of background information from
primary or secondary sources. I talked with my company guide about the
industry and product position in the market and search internet
exhaustively to accumulate information about whereabouts of the
industry.
In Pune Jaquar & some other brands came out as clear leader
for C.P. fittings. Obj.3 is to do a competitor analysis of Grohe. Studying
the weakness of Jaquar and targeting them will become possible. I’ll try to
find out any lacunae in their service channel or product portfolio to which
Grohe can target.
Unit of Analysis
For defining the management problem we will require the unit of

analysis for study. Here we will see what is to be considered an individual,
or organization as a whole for the purpose of collection of data. Since we
are collecting data from big construction firms from Pune region as well
as from individual prominent customers, it is better to deem the unit of
analysis for data collected from builders as organization and for high-
flying consumer as individual.
Determining relevant variables
It is inevitable to determine the key variables, in order to define a

management problem. Variables for this research mostly related to the
buying behavior of the consumers.
The variables affecting the customer choice for a particular product, their
affinity towards a brand after long use are to be considered. The variables
will help in deriving certain research questions.
1. Brand image
2. Ease of use
3. Aesthetic value
4. Functional value
5. Affordability
6. Advertisements
7. Renovation
8. Sources of advertisements
9. Income group
10. Willingness to spend.

5. Research
Proposal

T
he general purpose of this study is to determine the buying behavior
of the consumer of luxury sanitary items. In defining the limit of the
study, as a summer intern I have identified some study areas to be
addressed as elucidated.
A careful review of those question areas led to the development of the

following specific research objectives.
Research Objectives
1. Choice of Appliances is independent of Brand image of

product.
2. Aesthetics of product is given priority over other attributes of

kitchen & bathroom
appliances.
3. Bathrooms are considered important portion of house by the

population.
4. People are ready to pay more than 150,000/- INR for new
bathroom / kitchen appliances.
5. People always consider new brands for renovation.
6. Brand image of appliance is closely co-related with

advertisements effectiveness.
Research Design

The survey research method was the basic research design. Each
respondent (here as builders, architects and end consumers) were
interviewed in their respective locations.
The personal interviews are generally expected to last between 40-45
minutes, although the length of interviews depending on previous product
related experience of research units. For example if a respondent has
never been asked related question, they might not be ready to divulge
their experience about bathroom appliances. Sometimes respondent
looked wary of responding to certain question certain question must be
skipped.
Some of the questions asked are
1. Does product brand of appliances affect your / end consumer’s choice?

a. Yes b. May be
c. Not at all
2. What importance does bathroom have in your/ end consumers’ home?

a. Very important b. Important c. Not much importance d. No
importance e. doesn’t matter
3. What are you/ end consumers willing to pay for a bathroom/ kitchen of
your/ end consumers’ dream?
a. 50,000 -1 lakh b. 1lakh to 1.5 lakh c. 1.50 lakh to 2.0 lakh d.
2.0 lakh to 2.50 lakh
Sample Design
A survey of approximately 100 unit located in around 45

locations throughout the Pune region is provided as database for this
study. The sample is selected on a convenient sampling from all
construction sites. Eligible respondents were holding responsible
positions at various builders’, architects’ organizations. Within each
household an effort will be made to interview the individual who is the
most familiar with completing the survey forms. When there is more than
one respondent a random process is used to select the respondent to be
interviewed.
Data Gathering
The field work was done and a non random sampling survey was
conducted. The survey was based on convenience. Questionnaire was
utilized to collect the data on face to face, through e-mail using internet.
Google documents were used to develop an online questionnaire and link
was mailed to the various respondents. The survey was conducted to
quantify certain factual information, certain aspects of information are
also qualitative. Although I tried to conduct the survey free of any
sampling error but there are certain errors which are inevitable. Response
bias occurs when respondent tends to answer in a certain direction that is
when they consciously or unconsciously misrepresent the truth. Auspices
bias occurs when respondent bias in the responses of subjects caused by
their being influenced by the organization conducting the study.
I deliberately didn’t tell the respondents that I represent any

company. Sometimes it is not possible to eradicate the social desirability
bias which can create a bias in the responses of subjects caused by their
desire either conscious or unconscious, to gain prestige or to appear in a
different social role. We tried to put brands which are virtually well known
among the respondents.
Data processing & Analysis
Standard editing & coding procedure will be utilized. Simple

tabulation & cross tabulation will be utilized to analyze the data.Various
hypothesis testing tools were utilized.

6. Observations

Sample size
For any kind of business research it is necessary to estimate

the size of sample necessary to accomplish the purpose of study. In the
following research conducted the sample size was calculated (see
appendix A). This leads us conduct a survey and collect the sample of at
least 90 samples.
No of samples collected = 131
Builders/ Architects/Plumbing Contractors N1 = 96
End Consumers N2 = 35
Frame of questionnaire
Questionnaire consists of only close ended questions. Size of

questionnaire is kept up to 11 questions .Asking about various
parameters related to their buying nature and their inclination towards
one product. The Questionnaire follows tunnel technique with general
questions to more specific questions in order to obtain unbiased
response. It also helped in understanding and knowing about responders’
frame of reference by asking more specific questions about the
respondent’s information. No filter questions and pivot questions were
asked in the questionnaire (see Appendix - 1).
Questions were set on various scales namely nominal, rational

and ordinal. We tried to keep the questionnaire as succinct and
resourceful as possible .Nominal scale is used to know the average
thinking of the consumers and decision makers .Every variable was tried
to include in the questionnaire.
Brand awareness was an important purpose that I tried to
solve through this survey. Grohe might be a big brand in European co.
and people who have made any foreign trips are able to recall brand
Grohe. Any Brand identify the source or maker of a product and allow
consumer to assign responsibility for its performance to a particular
manufacturer or distributor. So I asked End consumer’s only that can they
give a brand recall and asked to identify as many brands as possible from
a range of 13 brands.
Graph -1
Long bars shows high brand awareness, and it is clear Jaquar is leading
and it has even left behind Industry leaders Parryware, Hindware. Grohe
has low brand awareness with only 4% of respondents are nodding to
know about brand Grohe. Management must give a deep thought to
make themselves a known brand in the country.
We also tested total Brand awareness of the end consumers by

looking at no. of reactions given by each respondents to us . Looking at
this we can say that how conscious todays’ consumer is, about their
sanitary brands. We have plotted the no. of respondents against the no.
of brand recalls. The Graph on the next page evidently depicts the
awareness of the respondents. Around 50 % of the respondents were able
to identify between 6 t0 8 brands name. More than 59% of people were
known to 6 or more brands shows the end consumers’ apprehension for
the brands for their bathroom fittings

Graph -
Knowing their Brand awareness we come to know how a branded product

is the requisite in today’s consumers’ bathroom. We were skeptic about
brand awareness results so now when it is clear that Consumers are well
aware of the various companies existing in the market, we asked them
directly from where they heard about these companies and offerings, we
wanted to know the source of information.
Graph -
After filling general information in the questionnaire, we asked them

about appliance respondents prefer to fit in consumers’ bathroom. I got
following response
Graph 1
Does product brand of appliances affect This
your / endgraph shows
consumer’s choice?
clearly that Jaqaur is
in leading position with
Graph 2 Cera-parryware coming
at second place.
Interesting to know that
local guerillas
Now putting above data in cross tabulation every combine
Brandi.e.isfor clearlydifferent brand
considered
what people think about brand image we eating
will about
get one- fourth
following table
when choosing a bathroom or
of the market.
kitchen appliance. Around 77 %
0f respondents somehow
consciously or unconsciously
Table: take brand image of an
1 appliance under cons
Brands Parrywa
ideration
Effect Jaguar re Kohler Other Total
Yes 32 8 3 11 54
Maybe 8 4 2 6 20
Not at all 6 4 1 11 22
Total 46 16 6 28 96

Majority of respondents who consider brand image has an effect on their
choice. The following graph shows how the preference for branded
product changes among the user of various brands. The respondents who
are using or prefer to use category “Other” product are undecided about
their choice of appliance is based on brand.
Graph 3
The above Graph 3 clearly represents that Consumers using
Jaquar are more brand conscious than any other brand. These people are
companies target market.We tried to find out does Indian consumer give
importance to their bathroom and are they willing to spend a large sum of
money to get a bathroom of their dream. Initially bathrooms were
considered an adjunct to home.
So is there anychange in the belief of Indian consumer. Because initially

we have presumed that there is a change in Indian consumer thinking
and our whole study is based on this assumption. So we asked them what
importance does the bathroom has in their home and we find out.
Graph 4
More than 79% of respondents told that bathroom is important

portion of their home. To my expectance not a single respondent has said
bathroom is having no importance in their home. This supports our initial
assumption that bathroom is having certainly importance. Looking at
another question in which we asked how much a consumer is keen to
spend and tried to gauge their willingness to get a dream bathroom.This
clearly indicates that the consumers will be getting more & more
interested in their bathrooms which was once thought to be a detached
part of the home
Visiting at about 130 construction sites with varying price range I found
that there are some things common in all of them. The size of bathrooms
is between 4” X 7” to 6” X 8”. There are other appliances commonly put

into a bathroom and one more thing, They are placing floor cisterns in the
toilet, a wash basin, a geyser , faucet with mixer systems. Every house
has at least one master bathroom. This master bathroom is bigger one
and special worry of builders and architect. These master bathroom can
be a special target area for Grohe. They can give customize solution to
these bathrooms
Graph – 5
This Graph clearly shows people who are willing to pay more than
150,000 are less than 20% of all the respondents. This clears the picture
of the population with more people willing to pay less than 100,000. Next
we want to know the best possible way to reach the target audience, i.e.
the best medium to advertise the Grohe Product. We asked them to rate
following sources of advertising and the result shows how the end
Consumer & Builders and other stake holders prefer different medium.
Graph- 5
It can be concluded from the above graph that Builders have given higher
ratings to Print media and Billboards, but amazingly lower ratings for the
radio/ fm advertisements. Now this is interesting because it is generally
thought that TV advertisements are bigger persuaders than any other
source. It can be clearly observed from above Graph- 5 that print media
(News, Magazines etc.) is having major chunk in 4 as well as 5 ratingbars.
It clearly shows Builders are more influenced by Print media similarly with
billboards. Mall media and Radio advertisements are neglected as shown
by decreasing weightage in bars.
Graph – 7

This graph shows how end consumer has rated for different sources of
advertisements and it is quite evident that TV advertisements came out
as winner then come print media. Interestingly both Builders data and
End consumer data show apathy towards radio ads. Mall media being a
new advertisement media is also left and not persuaded by both End
consumer as well as Builders. Graph- 7 clearly shows 52 % of respondents
have given rating 5 to TV advertisements.This finding can be an
important info in advertising budget planning.
Hypothesis testing
Another major portion of the Data analysis is the testing of various

hypotheses we set at the beginning of the whole study. We tried to prove
the above 5 hypothesis and found only acceptable.
Hypothesis : 1 Choice of Appliances is independent of different

brands available in the
market
Hypothesize:
Since it is well acknowledged that brand name plays important criteria to
select any home appliance we tried to prove the same in the sanitary
ware industry also. So null & alternate hypotheses are
H0 : Choice of Bathroom appliance is dependent on the brand image

H1 : Choice of Bathroom appliance is independent of the brand image
Test:
Since we are testing the behavior of consumer on two variable i.e. the
brands they use & effect of brand name on their selection for a particular
type of appliance, it is quite evident we will require a chi-square bi-variate
test.
Χ2 = Σ(o –e)2/ e
α: type 1 error rate α is taken as 0.10. Since the test is two tailed and α =
0.10, there is α/2 = 0.05 area in each of tail of distribution. Thus rejection

region lies at two ends of distribution curve and acceptable region is 90%
of total area which is lying symmetrically on both sides of the mean mean
value. The degree of freedom for the hypothesis testing is 11.
χ2α/2 = 9.8376 df = 11
Gathering data and keeping in cross tabulation format we can calculate

the expected values. Calculating the value for the χ2 we found out it
comes under the acceptance region defined.
χ2 calculated = 4.07018
*
for calculation see appendix
Action: Because this test static, we found that calculated value is coming
very much inside the limits of acceptance region so null hypothesis is not
rejected. That is the brand image is affecting a consumer’s choice and an
important step in product selection.
Hypothesis2. Aesthetics of product is given priority over other

attributes of kitchen &
Bathroom appliances.
Hypothesize:
Any products have some aesthetic attributes which act as cue for
consumer to buy the product. Generally aesthetics or in better terms
looks plays an significant job to select a particular appliance. In case of
bathroom appliance we are considering four major attributes like
Aesthetics, affordability, functions, & ease of use. We will be trying to
prove that Aesthetics are given priority over other feature
H0: Aesthetic is given preference over other features

H1: Aesthetic is not given preference over other features
Alternatively can be stated as

H0: µa > µe , µa > µf , µa > µd
H1 : µa ≤ µ e , µa ≤ µf , µa ≤ µd
Where
µa = Population mean for aesthetic
µe = Population mean for ease of use
µf =Population mean for functionality
µd = Population mean for affordability
Test:
This is a simple hypothesis test with two variables taking at a time. We
will apply Z-test for the difference between two populations. This is a two
tail test for testing variations about a central value i.e.
Z = ( x - µ )/(σ/√n)
Level of significance α is 0.1. Since it is two tailed test i.e. α/2 =0.05 and
being normal distribution the rejection region is 0.05 on each sides of
acceptance region
From standard Z tabulated values for α/2 = .05 we get
Ztab = 1.645 Z α/2 = 0.823
Calculating Sample means and Population means we will obtain following

values,
Table: Sample means Table: Population means

Attributes X
Ease of
Use 4.13
Aesthetic 4.08
Functions 4.14
Affordabilit
y 4.17
Attributes µ
Ease of Use 4.04
Aesthetic 4.24
Functions 4.16
Affordability 4.32

Table: Standard deviation ‘σ’
Ease of Affordabil
use Aesthetic Functions ity
0.8614 0.763188 0.815892 0.816496

55 142 04 58
S. Relation ZCal Ztab Hypothe

No. testing sis
µa > µe -1.798 -0.823 Rejecte
d
µa > µf -0.745 -0.823 Accepte
d
µa > µd 0.618 0.823 Accepte
d
*
For calculation see Appendix
Action : We can conclude that since Zcal value for Ease of use &
Aesthetic taking as two variables is deep into rejection region, we have
enough evidence to reject the null hypothesis that aesthetic is always
given priority over other features of the bathroom appliances. We can
also conclude that we have not adequate data to give exact priority of
attributes.
Hypothesis 3: Bathrooms are considered important portion of

house by the population.
Hypothesize:
Bathrooms initially are considered just as a portion of home but now they
are deemed as very important section of house. We are hypothesizing on
this change in attitude of the Indian consumer
H0 : Bathrooms are just a portion of house

H1 : Bathrooms are important part of house
Test:
We are applying Z test for testing population mean. Calculating
population mean and estimating its validity. This is a single tale test.
Z = ( x - µ )/(σ/√n)

α is set at 0.1, which means the level of significance for the hypothesis is
90%.Calculating value for Z form the table we will get
Ztab = 1.645
Calculating Sample mean x = 4.146

Sample standard Deviations σ = 0.889
Taking random samples for calculating population mean

No. of samples taken = 25
Population mean µ = 3.80
Zcal = 0.078
Action:
Since the Ztab< Zca, We can clearly predict that null hypothesis is
rejected that bathrooms are just a portion of a house.
Hypothesis 4: People are ready to pay more than 150,000/- INR for
new bathroom /
kitchen appliances.
Hypothesize:
We are trying to estimate whether the consumers are ready to pay a
large sum in order to get a bathroom of their dream and ready to
embellish the clandestine part of their house.
H 0 : Consumers are not willing to pay a large sum for

bathrooms
H1: Consumers are willing to pay a large sum for
bathrooms

Test:
Applying Z test for testing population mean checking its validity. It is one
tail test.
Z = ( x - µ )/(σ/√n)
taking α = 0.05 We have tabulated value of Z
Ztab = 1.96
Calculating Sample mean x = 109375

Sample standard Deviations σ = 43448.56
Taking random samples for calculating population mean

No. of samples taken = 25
Population mean µ = 107000
Zcal = 0.535
Hypothesis 5: Brand image of appliance is closely co-related with

advertisements
effectiveness
Hypothesize:
Generally it is believed that Brand image is related with
effectiveness of advertisements, here also we are assuming the same
and try to predict the population’s attitude towards advertisements and
brand image.
H0 : Brand image and Advertisements are having high

correlation
H1: Brand image & advertisements are not co-related
We find out that Brand perception is highly co-related to the cosumers’

interaction with different media of advertising

7. Analysis of Indian
Sanitaryware
industry
I
n the next decade, India is expected to be one of the world's fastest
growing countries for sanitaryware consumption. The sanitation
penetration has more than trebled from 8% in 1982 to 18% in 1994
and to 29% in 1999. The comparative penetration levels in neighboring
countries are as follows: Pakistan: 50%, Sri Lanka: 65%, Malaysia: 94%
and Thailand: 96%.
The government impetus to improve hygiene and sanitation is likely to
increase the demand for sanitaryware in India. Moreover the increasing
urbanization of India and the consequent requirement for residential and
commercial buildings will be a major driver for growth of sanitaryware.
Along with this the focus of the central and state governments to provide
housing facilities to the poor, is also expected to generate demand.

The National Housing Policy formulation that envisages "Housing for all"
by the end of Ninth Plan period is a big step towards this. Indira Awaas
Yojana, Samgra Awaas Yojana are programs for providing housing to the
rural poor is a key step taken by the government in this area. The
housing development organizations like HUDCO, State Housing
Development Boards and Rajiv Gandhi Rural Housing Corporation Ltd. are
also playing a large role in this initiative.
It is estimated that there is currently a demand for 20 million housing
units in India. Further, a significant number of the 115 million housing
units across the country will need reconstruction for improvement.
Therefore a replacement market will emerge, though currently original
equipment sanitaryware market accounts for nearly 90% of the market.
Sanitaryware demand
Sanitaryware Industries in India for the last 6-7 years have shown very
dramatic growth with major players doubling their production capacity.
The Companies have also upgraded their manufacturing system by
introducing Battery Casting, Beam Casting and have gone in for latest
imported Fast Firing Cycle Kiln Technology. These Companies have also
upgraded their quality and have introduced high value range in the
market, which has been accepted and appreciated. The demand for high
value Sanitaryware in India is growing very fast. The Companies are
trying to meet the demand as the realization per Metric Ton for high value
product is very good which ultimately results in good profitability. In order
to educate the customers in India to go for quality products and also for
higher value sanitarywares, companies have adopted a very aggressive
advertisement campaign. Companies have also strengthened their dealer
network by offering showroom incentives and some of the companies
have also gone for their own retail outlets in major towns. The demand
for Sanitarywares in India is growing @ 15% -17% every year.
The sanitaryware industry in India is divided in two sectors. The

organized sector consisting of 5 companies (M/s. Hindustan Sanitary
Industries Limited, M/s. E.I.D. Parry, M/s. Swastik Sanitarywares Limited,
M/s. Madhusudan Ceramics, M/s. Neycer India Limited), manufacturing
sanitaryware for the last 15-20 years and have established their Brand
image. The organized sectors produce fully vitrified sanitarywares, using
latest technology and best of Ceramic Raw Materials available in India.
The unorganized sectors have adopted local Indian technology to
manufacture the basic sanitaryware products. Since the availability of raw
material is in abundance and also very cheap in the state of Gujarat &
Rajasthan, various companies have established their factory in these
areas. They are producing the basic sanitaryware in various brands.
Unorganized sector's percentage of production capacity and also their
sales in the local domestic market are higher than that of the organized
sectors' sales. Unorganized sanitaryware manufacturer comes under
small sectors and hence enjoy the benefit of Nil Excise Duty and Sales
Tax and hence they sell their products in the domestic market
approximately 70% cheaper than the organized sector products.
Government of India Policy on Housing Sector is very encouraging.

The Government has announced Income Tax rebate on housing loan to
boost the housing sector. All financial institutions are lending money for
construction of house at a very low rate of interest. Government figure
shows that Housing Sector is growing by approximately 25% every year.
The need of Housing in India with 100 crores population looks to be very
potential. As per DGTD Survey Report there is a shortage of about 20
million houses in the country by the end of 8th Five Year Plan. The
housing has become a basic necessity, as people in India are looking
forward for improved sanitary condition. The concept of making toilet is
fast growing even in village areas, where toilet till last two years did not
exist.
The cost of producing sanitaryware in India is substantially low as

compared to the advance countries, because the labour cost and the
basic raw materials for manufacturing quality sanitarywares is available
at very cheap rate and in abundance. Because of our low cost of
production, Indian sanitarywares are very competitive in the neighboring
countries and hence export from India is also growing every day.

Fig.: Showing the presence of various sanitaryware industry in India
Source: Indian
Council for ceramic tiles & sanitaruware
Table below shows the statistics data related to the sanitaryware industry.
It can be noted that not a single company is ranked in top 10 in terms of
productions while market is growing consistently at the rate of
SANIT ARYW ARE INDUSTRY ST ATISTI CS :
World production: 187 Million pieces

India's Share: 6.7 Million pieces.
not in the Top 10 (India A/c
World ranking (in production):
for 3.30%)
Global Industry Growth Rate: 5-7%
Growth Rate (India Domestic Market): 10%
Organized sector:
% Share of Production: 43%
No. of units: 6
Production Capacity: 103300 M.T. per annum
Actual Production: 95000 M.T. per annum
Unorganized sector:
% Share of Production: 57%
Production Capacity: 136700 M.T. per annum
Actual Production: 120000 M.T. per annum

8. Suggestions &
Limitations

Suggestions
Ggohe is a global leader with a turnover of over € 1 billion and
holding it’s core competency of delivering value products to its customer
from the very beginning of this century. But Indian market which is
growing at rate of more than 9% annually is still hard nut to crack for it.
Grohe has entered India way back 2 years but still only 4% of the
surveyed consumer knows about it.
Indian consumers are always a hard fish to catch for any local or global
company. While Grohe has an exemplary supply chain management in
German and European countries, it is still to be implemented in India.
These SCM are maintained by IBM there. With more than 80 distributers
in 7 cities in India and raised to 100 by this year end a diligent logistics
software is the need of hours.
Company is the winner of for three consecutive years for the better
quality and competitive products offered to the consumers. Although
Grohe is targeting high end consumers in the country but a brand
become big once people begin cherishing it. Grohe has even loosen up its
Brand value, because of low awareness of the brand among the
population.
We have come up with certain suggestions looking at the study results

that are generated through the analysis of data
1. Brand Awareness is desired to be improved among the

consumers
“Seeing is believing” is what they say when it comes to recognition of

Brand in this industry. Today consumer is brand conscious, we are
amazed to know that many of the respondents are aware of more than 8
brand names when asked to respond. Today with the advent of internet
and gradually escalating flow of excessive information end consumers are
giving more emphasis on known names of brands. Indian consumers have
a typical tendency to get a word of mouth publicity of any product. The
viral marketing and intensive advertising plan is required for the
development of market share.
In order to plan the advertising campaign this study can be immense

help, because it states how to reach target customers. TV advertisements
are the best medium to get in touch and communicate to the end
consumers while news paper, magazines are better sources to be in touch

with the other major stake holders of industry like builders, architects,
etc.
2. A installment scheme for the Grohe customers is to be

introduced
We can evidently say through this study that large base consumer
of the country is not ready to invest more than 100,000 in the bathroom
appliance. This is the total money which they can invest over a single
bathroom which include tiles for walls and floor, fresher fans, and other
garnishes with faucets and sanitary fittings. So it’s better to give options
of more than one installments payments to the consumers
3. The delivery of high technology quality product with lesser

glitches is to be assured.
Grohe’s biggest competitors in Indian faucet market is Jaquar and

the reason that I come to know about, why the builders, plumbing
contractors and individual household like to trust Jaquar is it’s after sales
service. I am being told that if there is any technical glitch in the product
then Jaquar engineers personally come to attend it , and replaces the
faulty piece without any trouble. This after sales service is a competitive
advantage of Jaquar over its competitors. Grohe, a German company
should place itself as company with high technology products into the
minds of the consumers with greater emphasis on high quality product
delivery.
4. An after sales service force is considered necessary to be

developed.
Amid they can also start training Plumbing contractors and give
them authorized service dealership for specific Grohe products. Since
Grohe involve German technology in their products which is reliable as
well as complex to understand, a continuous training program for these
dealers is to be made. An all India toll free service no. is to be provided to
the consumers for service or maintenance of any Grohe Product. This
force need to be as competent as to be fore front of the service.
5. Search engine marketing of Grohe website is rudimentary.

Internet today is a strong and cost effective medium to reach a
concentrated audience. When asked about whether the responders’ have
mail id and uses internet about 87% of the respondents speak affirmative
and more than 70% of them uses internet twice a week. We are
assuming that any average web surfer use search engines 12 times a
week one or other search engines. According to An interesting statistics
which came out soon after the release of ET report which stated that
there are 81 million Internet users in India.
Infact, India has been ranked fourth among the top ten nations in the
world with 81 million internet users even as the world aggregate touched
1.35 billion by the end of 2007, according to figures released by Internet
Governance Forum. This time LiveMint along with Mumbai based digital
advertising & technology company Komli Pvt. Ltd. did some qualitative
and quantitative research on online consumer trends in 2008.
Now when we search for key words like Luxury bathroom products or
bathroom fittings, it is hard to say that Grohe does not feature even on
the third page of organic search. This shows poor rate of hits on website.
Even by generating tag clouds wefound out that people are not looking
for what Grohe.co.in has to offer. ‘Grohe cube’ is not even featured.
Source: www.tagcrowd.com
Fig. – Tag cloud developed for www.grohe.co.in
Google adwords, adsenses and other search optimization tools are

available to the marketers to optimize the search of web users and
increase website traffic.Grohe website is the best when compared to its
competitors but not utilized to its best of potential.

7. Grohe cube virtual bathroom web tool need to be improvised.
Today when it comes to buy a new appliance, buyer is so educated

that he browses internet & tries to compare all the products. Various
portals even help them to buy one. Grohe –cube is tool where you can
design your own bathroom and can visualize how will a certain product
look in his bathroom. In the process we are generating interest after
getting attention of the consumers.
We are now considering those consumer who are really interested to buy
a grohe product. But to bring them to this level we have to generate their
attention acc. to AIDA model. So to seek attention I have designed an
adword using Google adwords. These adwords will appear in sponsored
links on Google search engine as well as google search network.
I tried to make a google sponsored link and get success to some extent
Google rated me 7/10 in keyword relevance. Figure below shows the
snapshot of Google adwords account.

Sou
rce : www.adwords.google.com
Fig. showing the snapshot of google adwords account
The encircled sectionis the sponsored link I created although it does not
feature on the Google network. This link can help in creating a stimulus
and attention of the web users Grohe cube is a unique feature in Grohe
portal and must be used as competitive advantage
8. Implementation of major SCM software.
Already implemented across many countries in Europe, Supply

chain management is prerequisite for a company to flourish. Distributors
need to be informed about the consumer demands & accordingly
replenished. Today no distributor want a product with low mobility, So
keep low volume with them and rest to be stored at Central state
distribution system.
But it’ll be beneficial to store material near to places where demand is
high i.e. near to the customer.
Limitations
1.The analysis of potential products is limited to 6 digit H.S. code level,

due to the
unavailability of getting details of products imports to Australia in 8
digit H.S. code level.
2.During my study, I have identified that there are considerable

differences and inherited
feature in consumer tastes, fashions and preferences of separate states
within Australia.
Therefore it is very hard to identify common features of customers
when analyzing
products. Also it is very important to study deeply about different
states separately.
3.One of the main barrier was communication, it was very difficult to

contact builder representatives as they sometimes denied to provide
with information.
4. Many times their views seemed biased and it was hard to desolate
these views. So it might affect our results
5.Pune was a new city for the surveyor so lot of precious time was wasted
in wandering from one site to other.
6.Study contains views of a small section of Pune, which might not be a

true representation of the whole sanitary industry of the country. This
study is strictly conducted in Pune municipal corporation region –Pune.

9. Appendices
Appendix – 10.1
Questionnaire
ITM Business School

Plot #25/26, Sector 4, Kharghar, Navi Mumbai - 410210
Phone No +91 22 5616 5001 / 32985592, Fax No +91 22
27580950,
Website: www.itm.edu

Name: …………………………………………….. Mail id: ………………………………
….
Classification: ………
(A for Architect/ designer, B for builder/ contractor, E for End Consumer, P for
Plumbing Contractor )
1.Your income group (per annum) for end consumers’ only.

a. 5-10Lakh b. 10-15 lakh c. 15-20 lakh d. above 20 lakh
2.What Appliances do you use/ prefer to fit in your/ consumers’ bathroom

/kitchen?
a.Jaguar b. Parryware c. Kohler d. Others.
3. How do you rate following for the appliances? (1 for low 5 for high)
S. No. Attributes
Ease of use
Aesthetic
Functions
Affordability
4. Does product brand of appliances affect your / end consumer’s choice?

a. Yes b. May be c. Not at all
5. What importance does bathroom have in your/ end consumers’ home?

a. Very important b. Important c. Not much importance d. No
importance e. Doesn’t matter
6. What are you/ end consumers willing to pay for a bathroom/ kitchen of
your/ end consumers’ dream?
a. 50,000 -1 lakh b. 1lakh to 1.5 lakh c. 1.50 lakh to 2.0 lakh d. 2.0
lakh to 2.50 lakh

7. Are you/ end consumers satisfied with your/ their bathroom/ kitchen
appliances?
8. Do you/ does end consumer think about changing your/ their appliances on
renovation?
9. How do you rate advertisements from following sources? (1 for low 5 for
high)
S. No. Sources
1. Print Media (News Papers, Magazines
etc.)
2. TV Advertisements
3. Mall media
4. FM/ Radio Advertisements
5. Billboards
10. How much are you affected by the advertisements for your choice?
a. Very much b. Often c. Sometimes d. Not much e.
Not at all
11. How often do you use internet?

a. Daily b. Twice a week c. Weekly d. Fortnightly.

Appendix- 10.2.
Research Calculations
Hypotheses Calculations
Hypothesis-1
Responses to appliances builders prefer to fit in bathrooms

Table:1
Jaguar 46
Parryware 16
Kohler 6
Other 28
Total 96
Responses to effectiveness of Product brand of appliances over builders’ choice

Table:2
Yes 54
May be 20
No 22
Total 96

Calculating expected value Calculation of χ2
(0 -
Applying Chi square goodness of (0 - e)2 e)2 / e
fit test 37.52 1.45
Let α = 0.10 or
2.51 0.26
α/2 = 0.05
Degree of 20.63 1.96
freedom = 11 1.00 0.11
0.44 0.13
Ef 0.11 0.03
fe Bran Jagu Parryw Othe 0.14 0.01
ct ds ar are Kohler r 0.56 0.10
25.8 15.7 5
0.14 0.02
Yes 8 9.00 3.38 5 4
Σ (0 - e)2 / 4.070
2
e 18
Maybe 9.58 3.33 1.25 5.83 0
Not at 10.5 2
all 4 3.67 1.38 6.42 2
46.0
0 16.00 6.0 28
Hypothesis- 2
weig frequen Actual

Lebel ht cy weight
Very
5
important 40 200
Important 4 36 144
Somewhat 3
important
14 42
Less
2
Importance 6 12
No
1
importance 0 0
Total 96 398
4.1458333
Avg. = 33
Hypothesis 3:

Calculation of Sample mean
Frequency table of samples collected
Actual
weight
We are
taking 25
randomly
selected
samples to
calculate
population
mean.
frequen
Lebel weight cy
Very important 5 40 200
Important 4 36 144
Somewhat
3
important 14 42
Less Importance 2 6 12
No importance 1 0 0
Total 96 398
4.14583333
Avg. = 3
Calculation of Population mean
Very important 5 8 40
Important 4 8 32
Somewhat
3
Important 5 15
Less Importance 2 4 8
Doesn't metter 1 0 0
Total 25 3.8

Hypothesis 4:
Calculation of sample mean i.e. average value a group of people can

spend to have a bathroom of their dream.
Table:1
Frequen No of
Range cy f*r Observations : 96
50,000- 390000
1,00,000 52 0
1,00,000- 325000 Note: r = mean of
1,50,000 26 0 Class range
1,50,000- 245000 f = sample
2,00,000 14 0 frequency
2,00,000-
2,50,000 4 900000
105000
96 00
sample
average = 109375
Calculation of Population mean

Table:2
We are selecting randomly 25
Frequen samples out of total population of
Range cy f*r samples in order to calculate
50,000- 97500 population mean
1,00,000 13 0
1,00,000- 11250 Standard deviation σ = 43,488.80
1,50,000 9 00
1,50,000- 35000 . α = 0.05
2,00,000 2 0
2,00,000- 22500
2,50,000 1 0
26750
25 00
Population Avg. = 107000
Hypothesis:5
Responses to the folowing questions are tabulated
Does product brand image is affecting

your choice?
Table:1
Yes 54
May be 20
Not at all 22
Total 96
How much are you affected by the advertisements for you
choice
Table:2
Very much 34
Often 27
Sometimes 15
Not much 12
Not at all 8
Total 96
Cross Tabulation:
Table:
3
Very Someti Not Not at
much Often mes much all
Yes 22 12 4 9 7 54
May
be 6 9 5 0 0 20
Not at
all 6 6 6 3 1 22
34 27 15 12 8 96
Calculating expected value for the above observations

Table:
4 Expected values
Very Someti Not Not at
much Often mes much all
15.18
Yes 19.125 75 8.4375 6.75 4.5 54
May 7.0833 1.6666
be 333 5.625 3.125 2.5 67 20
Not at 7.7916 6.187 1.8333
all 667 5 3.4375 2.75 33 22
34 27 15 12 8 96
Glossary

Advertising Any paid form of non personal presentation and promotion
of ideas, goods, or services by an identified sponsir
Brand A name, term, sign, symbol, or design, or a combination of them,

intended to identify the goods or servicesof one seller or group of sellers
and to differntiate them from those of competitors,
Brand awareness all the thoughts, feelings, images, experience,

beliefs, and so on that become associated with the brand.
Brand image The perceptions and belief held by consemers, as

reflected in the association held in consumer memory.
Branding Endowing the products and services with the power of brand.
Competitive adventage A company’s ability to perform in one or more

ways that competitors can not match.
Core Values the belief systems that underlie consumer attitudes and
behavior, and that determine peoples’ choice and desire over a long term.
Core competency attribute that is a source of competitive advantage in

that it makes a significant contribution to perceived customer benefits,
has applications in a wide variety of markets, is difficult for competitors to
imitate.
Cues stimuli that determine when, where, and how a person responds.
Customer perceived value The difference between the prospective

customers’ evaluation of all benefits and all the cost of an offering and
perceived alternatives.
Delivery how well the products or services are deliverd to customer

Drive a strong internal stimulus
e-marketing company efforts to inform buyers, communicate, promote,

and sell its products and services over the internet
Image the set of beliefs, ideas, and impressions a person holds regarding
an object.
Loyalty a commitment to rebuy or re-patronise a preferred product or

service.
Marketing communication mix advertising, sales promotion, events &

experience, public relation & publicity, direct marketing, and personal
selling
Marketing research the systematic design, collection, analysis,

reporting of data & findings relevant to a specific markeitng situation
facing to the company.
Media Selection finding the most collective media to deliver the desired
no. and type of exposure to the target audience.
Perceived value the value promisecby the company’s value proposition

and perceived by customer
Perception the process by which an individual selects, organizes, and

intercepts information inputs to create a meaningful picture of the world
Performance quality the level at which products’ primary characterstics

operate
Product assortment the set of all products and items, a seller offers for
sell.
Product mix same as product assortment

Satisfaction a persons’ feeling of pleasure or disappointment resulting
from comparing a products’ percieved performance or outcome in
relation to his or her expectations.
SCM procuring the right inputs and converting them into finished
products; and despatching them to the final destinations.
Target market the part of qualified available market the company

decides to pursue.
Value delivery network a company’s supply chain and how it partners

with specific suppliers and distributors to make products and bring them
to market.
Value pricing winnig loyal customer by charging an offordable price for

a high quality product.
Viral marketing using the internet to create word of mouth effects to

support marketing efforts and goal.


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GROHE India Pvt. Ltd.

Summer Project Report

May – June 2009

Institute for Technology & Management, Kharghar, Navi Mumbai

Institute for Technology & Management, Kharghar, Navi Mumbai

Expressions have their own boundaries but this citation is an attempt to

Institute for Technology & Management, Kharghar, Navi Mumbai

Institute for Technology & Management, Kharghar, Navi Mumbai

Institute for Technology & Management, Kharghar, Navi Mumbai

Institute for Technology & Management, Kharghar, Navi Mumbai

The sanitary industry in India is neglected in early nascent stage

Although market has huge potential but all International brands

So what is it that is attracting many international brands to the

During my tete-a-tete with various Builders and Senior persons I

Institute for Technology & Management, Kharghar, Navi Mumbai

Distribution channels today are backbone of any industry. In this

During survey I came to know some interesting facts like builders

To reach their target audience and to communicate the right

Today everyone wants his consumer to be happy and satisfied so that

Institute for Technology & Management, Kharghar, Navi Mumbai

Grohe focuses on water technology products and systems & is

Modest Beginnings and Postwar Construction Boom

Institute for Technology & Management, Kharghar, Navi Mumbai

Ownership and Global Expansion after 1960

During the 1960s and 1970s Friedrich Grohe expanded

The death of company founder Friedrich Grohe in 1983 closed a

Entering the U.S. Market in 1975

In 1978 the company occupied one section of a larger warehouse

Although the faucets Grohe started selling in 1975 in the United

Another innovation, the Grohmix thermostat line, was launched in

During this time Grohe America invested in a range of marketing

Positioning in the Changing Market of the 1990s

To secure further growth, Friedrich Grohe had to develop a new

In 1991 Friedrich Grohe was transformed into a public stock

In the mid-1990s increasing numbers of Asian competitors flooded

Friedrich Grohe, by comparison, sold its high-quality fixtures

To position Friedrich Grohe as a "world leader in water technology"

The campaign not only raised Friedrich Grohe's public recognition

Going Private in 2000

During the next two years, measures were taken to strengthen

Institute for Technology & Management, Kharghar, Navi Mumbai

Institute for Technology & Management, Kharghar, Navi Mumbai

Grohe claims to have Products of International standards. Its

Products are having high depth. Company is trying to convert

Cosmopolitans: Minimalism, with its reduction of the unnecessary and

Authentic: This ranges products having elegance of past combined with

It shows how company is aware of different needs of consumer

Product mix of Grohe India pvt. Ltd. is as follows

Institute for Technology & Management, Kharghar, Navi Mumbai

Faucets Showers Thermostats

Institute for Technology & Management, Kharghar, Navi Mumbai

Customer today is very diligent. When he goes out to buy

Grohe is a company having high technology products as compared to its

Pricing objective for the Grohe product is supposed to be product quality

Grohe is supposed to be using Perceived value pricing method in India.

Institute for Technology & Management, Kharghar, Navi Mumbai

Market dynamics and the changing perceptions of the customer, have

A Grohe campaign Called the GROHE "Enjoyment Guarantee,"

Grohe believes in long term partnerships with its distributors, as well

Their policy is to capture new market not existing market. So existing in

Institute for Technology & Management, Kharghar, Navi Mumbai

Institute for Technology & Management, Kharghar, Navi Mumbai

1. To understand the consumer’s buying behavior of luxury