Prithvi Electricals

Case facts

Prithvi Electricals was running in partnership by two brothers

Jayantilal and Gordhandas.
The firm was set up in 1976 by Jayantilal. In 1984, Prithvi Electricals
entered into the manufacturing field by making table top
mixers(mixies). By 1996, it had started selling 2000 units a month.
Prithvi had only one model of mixie. It also acquired BIS(ISI)
certification for its product.
The distributors made a margin of around 15% when sold to retailers
who in turn made 18% margin. The margin was reduced during
promotional schemes which was making distributors unhappy.
Prithvi had tie-up with finance companies like Countrywide and soft
payment options were available to customers.
Prithvi as a mixie brand was well established in its target segment.
Manufacturing schedule was primarily based on the gut feeling and
past experiences.
The manufacturing unit comprised of two sections -the motor
assembly, with a capacity of 2500 units of 250 watts, and the mixie
assembly line which produced about 3000 units per month.

Marketing Mix of its product

Prithvi mixies were small, compact table top units with fewer features than
heavy duty models. It consumed less power but made more noise than other
mixies in the market. Its market was segmented geographically into four
markets, south with 64% of sales followed by West (28%), East (5%) and
North (3%). In south, Karnataka, mainly Bangalore dominated with 50%
sales. Prithvi had appointed dealers at various locations and did not give any
credit to its dealers. Gordhandas was basically in charge of relationship
management with the dealers. It also adopted demographic segmentation
targeting lower middle class by charging nominal price of Rs 2000 for its
product. Prithvi created awareness and demand for its product through local
language newspapers, magazines and movie houses.

Problem
By 1990s, the mixie market had become competitive and aggressive with national
level players like Sumeet and Maharaja entering the market. With the introduction
of various attractive models, the buyer had more choices in different price ranges.

By 1999, the company saw its sale dipping by 10%. Underutilization of resources,
channel constraints, competition from new entrants, limited product offering were
cited as reasons for the drop. To withhold their business and for the survival of
Prithvi Electricals, Gordhandas decided to enter into the motor business. The motor
business is highly competitive with an already existing 55% organized sector
offering variety of motors, it was critical for Prithvi electricals to enter the market
with right strategy. The managing partners of Prithvi Electricals offered the position
of marketing manager to initiate the launch of the new product which would come
with lot of responsibilities.

Problem Statement
In what ways, can Gopal strategize the entry of Prithvi Electricals with its
motors in the market in terms of pricing, distribution, promotional plan and
after sales service to ensure that Prithvi Electricals was back on track?
At the time of market study of the motor market, through the interview it was
clearly brought out that the customers valued Price/discount, quality,
delivery, service and the company image while purchasing the product. It
was important to focus on these areas to ensure that the new product fared
well in the market. Since there are many existing players in the market in
both organized and unorganized sector, it was of utmost importance to have
a competitive edge with low cost differentiation. It would also enable them to
gain the customer base during the introduction phase of the product
lifecycle.
Quality plays a very important factor in driving the business and a timely
delivery would help in building a good reputation and loyalty among its
clients. The post purchase behavior can be vindicated through providing
efficient after sales service which will play a role in building a good image
about the product. Since Prithvi Electricals are venturing into a new business
altogether, their target customers are bound to change. The situation
demands to make the new potential customers aware of their product. Also,
as mentioned Prithvi Electricals as an organization was barely known,
positioning the product through a comprehensive promotional strategy,
highlighting its benefit over others and high quality offering would allure
customers.

Proposed Solutions

Considering the buyer preferences, delivering a high-quality product on

time tops the list of priorities of the company. Unlike for the mixie
business, which adopted random sampling method for quality check, it
was needed to adopt efficient quality testing techniques in order to
deliver defect free motors to the customers which could also be the

differentiating factor. Also, instead of going by instincts, it is advisable

to study the demand of the market and then design the manufacturing
schedule.