MAKETING PLANING AND STRATEGY

A REPORT
ON
MARKETING PLAN OF HAND TOOL COMPANY

SUBMITTED TO :- SUBMITTED BY :-
Mr. S.P. KETKAR ANKIT KAPOOR
PRASHANT KAPOOR
SAURABH SINGH
SARAVJEET SINGH
KAPIL KIRSHNA
 EXECUTIVE SUMMARY

We here present a business plan to set up a new venture in hand tools industry. Our company is
“P.P. hand tools solution.” which will basically operate in Delhi and NCR region, But we are
willing to take orders from all over the India through website ordering.

The hand tool industry is totally fragmented industry which has large small players in the given
area. Our offering of hand tools is different from these local players in the sense that we provide
all kind of hand tools under one umbrella of P.P. hand tools solution. We have tools from
commonly used hammers, scisors to verneir caliper ,micrometers.

There are few organized players in the sectors also like Stanley India, Argeos ltd, Taparia tools,
Klvein ltd .These players also offer good range of hand tools in the markets. They have created
their names in the field. So our fight is not directly with these players but we first of all try to
make a space for ourself in the local markets with catering to the orders of far areas which come
through our sites.

Our first objective is to become a common name in the Delhi NCR region and then take on these
national level players. To become popular in the local area ,we are using the best material to
make hand tools reliable and durable, pushing it in markets with providing good discount to the
retailers on bulk purchase , creating positive word of mouth effect , handling the problems of
current users effectively

After this we will expand to the national level players , by further improving the standards and
specification of hand tools and reaching out to the industrial buyers of the region
,simulataneously promoting the order taken on internet.

Our sale target is for few months is large because we need to expand quickly in the local area
with low margin we get for every sales. In this phase we will derive major profits from the orders
that come from internets

In next phase our profit maximsation will be better because we will be well known brand in the
region.We will search out for better revenues from the Industrial buyers who purchase in bulk.
Analysis of the current situation:
Hand tools are those types of non-powered tools which are designed for use by experts as well as
in Do-It-Yourself (DIY) projects, like home repairs, general maintenance, woodworking,
building, mechanics and gardening. The hand tool industry is facing new challenges related to
worldwide business globalization and the invention and use of electronic business. Every single
manufacturer, irrespective of its size and importance in the market, should watch the movements
in its business environment, in order to adjust activities accordingly.

Characteristics of the industry

x A labor Intensive Industry: A source of employment to many, hand tools industry is

basically labor intensive in nature, whose development is of great importance for a
competitive as well as a self-reliant industrial structure. The manufacturers of hand tools
produce a comprehensive range of hand tools, right from carpentry and plumbing tools to
striking and cutting tools.

x Energy intensive industry: Apart from being a labor intensive industry, this industry is
also an energy intensive one. It is estimated in a recent study that in most economies
adoption of energy efficient processes and technologies can yield in energy savings of up
to 30 to 50%.

x Effective contributor to the economy: Adding positively to the income of a country,

hand tools industry has contributed to economy in terms of development and technology
up-gradation.
 (A) Market Situation :-

Hand Tool Market of India

India has a competitive advantage in the hand tool industry compared to other countries because
of easy availability of raw materials, entrepreneurship skills and skilled labor at competitive
wages. The hand tool industry as a whole is witnessing a shift of manufacturing base from
traditional manufacturing countries in Europe and Taiwan to the developing world and this is a
good sign for India to benefit. There has been an average growth of 17% per annum of the hand
tool market in India for the last 7 years.

Estimated No. of Unit in India 2500

SSI Units 12.8 million
Large Unit 7
Estimated number of workers 25000
Major Manufacturing regions Jallandhar/Nagpur
Total Export in 2001-02 $33 billion
Macro environmental situation

Economic Indicators

The Small Scale Industry today constitutes a very important segment of the Indian economy. The
development of this sector came about primarily due to the vision of our late Prime Minister
Jawaharlal Nehru who sought to develop core industry and have a supporting sector in the form
of small scale enterprises.

Small Scale Sector has emerged as a dynamic and vibrant sector of the economy.

- Today, it accounts for nearly 35% of the gross value of output in the manufacturing sector and
over 40% of the total exports from the country.

- In terms of value added this sector accounts for about 40% of the value added in the
manufacturing sector.

- The sector's contribution to employment is next only to agriculture in India. It is therefore an

excellent sector of economy for investment.

Opportunities in SSI due to Opportunities in hand tool

some factor industry
Less Capital Intensive 17% annual growth rate
Extensive Promotion & 35% of the gross value of output in
Support by the Government the manufacturing sector
Reservation for Exclusive Growth in demand in the domestic
Manufacture by small scale market size due to overall economic
sector growth
Tools & Tools utilisation Increasing Export Potential for
support Indian products
Funding
Raw Material Procurement
Reservation for Exclusive
Purchase by Government
SWOT ANALYSIS:-

STRENGTH WEALNESS

1- Competitive Price. 1- Limitation of product line.

2- Distribution network. 2- Large Capital oriented.
3- Innovative design of the products 3- Cash flow, start-up cash-drain?
which can increase efficiency. 4- Reliability of data, Plan predictability?
4- Direct delivery capability.

OPPORTUNITIES THREATS

1- Market Development? 1- Political effect?

2- Industry trends? 2- Environmental Effect?
3- Technology development and innovation? 3- IT Development?
4- Global influences:- (Government to 4- Market Demand.
remove 24 per cent FDI cap on SSI 5- New technologies, services, ideas?
units.) 6- Insurmountable weakness?
5- New market, vertical, horizontal?
6- Business Product development.
7- Partnership agencies and distribution
 Objectives:-

A:- Financial Objective:-

Long Term Objective:

x Achieve a positive contribution to overhead and meet the break even point with in 3 years
from the commencement of the business.
x Reach the target level of the average of 20% return on investment over the next 4 years.

Short Term objectives:

First Quarterly Objective –

x Achieve a positive contribution to overhead and sell 20000 kits in the market.
x Increase awareness about our entrance in the market. (It will be measured by no. of sales
in the first three month.

Second Quarterly Objective –

x Achieve a sales target 90000 Kits.

x Reach the target level of 5 % of the initial investment.

Other objective will be decide after absorbing of the first two quarterly
performance.

B:- Marketing Objective:

x Improve market share and net sales revenue.

x Improve current level of retail distribution coverage.
x Control on marketing expenditure sufficiently to achieve profit contribution objective.
x Identify viable objective for future volume and profit expension.
SEGMENTATION:

Our product is hand tools. It includes the axe, hammer ,chiesel , screwdrivers, drilling
tools, boring tools, micrometers, scalpers etc.

TARGETING:

NOW after segmentation we are going with targeting in this we segment the profitable market.

1- Industrial players
2- small labours who uses these hand tools
3- In various houses where to do the day to day business
4- In various instuitions of education where these tools are used

Industrial players who have few small work in their outlet or factory to be done. They use
various hand tools for small works They buy these hand tools in bulk ,but they don’t have
particular suppliers for it. So there is latent demand for the good suppliers, thus we can
positioned our self as reliable and great supplier. There are large such players in the outskirt of
NCR region .We will target these prospect clients to increase our base of loyal clients.

The layman labours ,technician ,electrician all need hand tools to perform their jobs. They buy
these tools from the local markets .So to reach these segments of ours we need that our hand
tools are available at each and every nuke and corners.

Secondly , the word of mouth is major marketing tool over here. So we should ensure that our
product is better in terms of quality and features. As we are the only brand that serves all type of
hand tools thus bad words in one sector can affect performance in other sectors too.
POSITIONING:

Before positioning we should know the critical factors that are perceive by the customers are:

1- Quality 2- Standard

3- Durability 4- Reliable

5-Good looks 6- Brand name

Ou r
positioning

competitors

Standards

Reliable

So from the analysis we get that standards and reliability are major way of positioning .The most
players are low in standard in terms of specification and quality but are reliable and durable
products.
So we position our products as better in terms of reliability and meeting the world class standards
that are prevailing in hand tools so we can definitely earn a brand name for ourselves.

200

150
o u rs
100 stanley
b ad o
50
aegon
0
1 2 3 4

Durable reliable standard

looks

Value grid
What Makes Us Unique

x We offer a diverse and comprehensive products mix to meet the need of the industrial
market. we manufacture tools for automotive and other industrial application.

x Assistance in custom application. we have certified engineers on staff to help you with
your custom required tools.
x We offer variety of services from products assembly custom parts and tooling for your
convenience.

PROJECTED P&L A/C

PARTICULARS PARTICULARS AMOUNT

SALES 2 LACKS * 52 WEEKS 104 LACKS

LESS:COST OF 40 LACKS 35 LACKS

PRODUCTION
LESS:ADMINISTRATIVE 10 LACKS 8 LACKS
COST
LESS:SELLING AND 15 LACKS 10 LACKS
DISTRIBUTION
EXPENSES
LESS:DEPRECIATION ON PLANT AND 5 LACKS
MACHINARY
LESS:INTREST PAID ON DEBT 5 LACKS

TAXABLE PROFIT =104-35-8-10-5-5 41

TAX FLAT 30% OF GROSS 13.8 LACKS

PROFIT = 30% OF LACKS
NET PROFIT =41-13.8 27.2 LACKS
POTER’S FIVE FORSE MODEL OF HAND TOOL INDUSTRY

Threat of New Entry: Competitive Rivalry:

1- Expensive to enter the industry 1- Many companies in the

2- Experience needed, but training market.
easily available. . 2- Low switching Cost.
3- Some economies of scale. 3- High cost of leaving
4- Low barriers to entry. Market.
5- New entry not too easy.

Supplier Power: Buyer Power:

1- More suppliers in the market. 1- Homogeneous products.

2- Suppliers large. 2- Average price sensitivity.
3- Similar products. 3- High buyer power.
4- Able to substitute. 4- Large orders.
5- Able to change. 5- Product life cycle is
6- Foreign supplier power. large.

Threat of Substitutes:

1- Some cross-products subst

2- Ability to import from oversees market.
This worries:

x The threat of new entry is not easy, if anyone looks as if they’re making a sustained
profit, then competitors can come in to the industry.
x Competitive rivalry is extremely is high: because of many companies are already exists.
x Buyer power is strong, again implying strong downward pressure on prices.
x There are some threat of substitution.

What can we do?

Product Differentiation:- The difference between the physical product is the packaging,
trademarks, tone, style and price differences. In the hardware tool, screwdriver, pliers, wrenches
belong to homogeneous products, hardware companies in the packaging and colors are also the
trend of homogenization, only mark is different.

Unless we are able to find some way of changing this situation, this looks like a very tough
industry to survive in. Maybe he'll need to specialize in a sector of the market that's protected
from some of these forces, or find a related business that's in a stronger position.
Distribution Network of Hand Tools :-

Gaining Distribution in the market :-

Direct to End Users Sales through Dealer Network

We have a sales team that sell directly We sell a product through a

to Small scale units, Professionals (e.g. geographical network of dealers who
carpenters, plumbers, craftsmen, sell to end-users in their areas. E.g.
toolmakers etc), House Hold (DIY) India Mart.
We have a second product line for small
business. Instead of using sales team, we Our dealers are essentially our
sell this line directly to end –users through customer, and we have a strong
our website and marketing campaigns. program to train and support them with
We have two market and two distribution marketing campaign and material.
channels.

Sales through Value Added Reseller

We sell a product to company who bundles it

with services or other products and re-sell it.
That company is called a Value Added
Reseller (VAR) because it adds value to your
product.

e.g. Tie up with Automobile companies,

Machinery manufacturing companies.
 MONITORING AND CONTROL
1. Evaluation of performance will be done on monthly basis at initial period of 1 year than at
quarterly basis for next 2 years.
2. Review of performance of our ancillary service providers will be done at quarterly basis to
ensure that 100% commitment is made from them.
3. Continuous research and development will be taken to meet the change in needs of customers
in terms of comfort and trends.
4. Evaluation of objectives will be done if needed to identify that they are under evaluated or
over evaluated.
5. Separate department will be established to make corrections if required without wasting time
and resources.

CONTINGENCY PLAN

1. We will focus on promotional schemes and discount to attract the customers if footfall is low.
2. Make our ambience more attractive for our customers to gain their interest.
3. We will organize special fest inspired by liberty to enhance our brand image if we found that
target market fail to recognize us.
4. We may also shift our focus our attention to one of the market if we are doing continuously
poor in one market (international and national).