Académique Documents
Professionnel Documents
Culture Documents
ON
Marketing Strategies Of
CARRIER AIRCONDITIONERS
Name:Saurabh Jindal
Class: BBA (general)
University Roll No.-0212061708
ACKNOWLEDGEMENT
motivation provided to me during the training for constant inspiration, presence and
blessings.
Lastly, I would like to thank the almighty and my parents for their moral
support and my friends with whom I shared my day-to-day experience and received lots
1. Executive Summary
2. Organization history
4. 7S Framework
5. SWOT Analysis
9. Brand perception
11. Methodology
15. APPENDIX
16. BIBLIOGRAPHY
Executive Summary
The project deals with the study into the marketing mix of Carrier in air-
conditioner market. The primary data has been obtained from the dealers
spread all across Delhi. The attributes, which defined the data were the price
of the product, push or pull strategy used, shelf space, various
advertisement tools used like bill boards, mass media etc and promotional
schemes used by various brands like bundling, coupons, free gifts etc.
In all I visited 50 outlets spread all over Delhi (includes dealers and retailer),
who dealt in air conditioner I also interviewed 50 customers at showrooms
across Delhi. Using this data inferences were drawn.
LG has the largest market share as far as home care is concerned. In Delhi
AC market LG has the highest penetration, as it is available in almost 75% of
the outlets while Hitachi is present in only 64% of the outlets. L.G. also leads
in the other categories like the window display (40%), shelf space (50%) and
POP (40%) while Voltas has the share of 7%, 28% and 34% in the respective
categories.
Of the outlets visited, 44% claim L.G. to be the top Brand whereas Voltas has
21% of the outlets claim it to be the top Brand. The strengths of L.G. lie in its
low price and good quality whereas Hitachi’s strengths lie in its superior
quality and post sales service. Whereas, on the negative side the claim that
LG is not as durable as other brands & has a life expectancy less than other
brands like Voltas, General etc.
Organization history
• Carrier is one of the first to adopt the energy efficiency label issued by
the Bureau of Energy Efficiency (BEE) - Awarded the First prize for
energy conservation in Consumer Goods Sector in 2007 & 2008 by the
Ministry of Power, Govt. of India
Establishing a performance culture that respects human values & team work
Thereby growing profitably and ahead of the market every year, making
Carrier a destination of choice for all within HVAC&R industry.
Mission
From the time our founder invented the basics of modern air conditioning in
1902, Carrier has been the world leader in air conditioning, heating and
refrigeration systems. A wholly-owned subsidiary of United Technologies
Corporation, Carrier is built upon a legacy of innovation and commitment.
Through our market-leading products and solutions, we are constantly
striving to help people live more comfortable, healthy and productive lives.
Across the globe and in virtually every facet of daily life, Carrier is there. We
create comfortable environments, regardless of the climate. We safeguard
the global food supply by preserving the quality and freshness of food and
beverages. We ensure health and well-being by enabling the proper
transport and delivery of vital medical supplies under exacting conditions.
We provide solutions that maintain exceptional indoor air quality —
controlling humidity, allergens and harmful pollutants. At every touch point
with consumers and in every commercial undertaking we pursue, we are
committed to delivering exceptional products and services that meet our
customers’ diverse needs.
Our web site serves as your link to the world of Carrier. We invite you to view
our showcase of successful installations, gain a glimpse into
the revolutionary vision behind the development of modern air conditioning,
and learn about Carrier’s dedication to balancing the promise of innovation
with the critical need to preserve our environmentfor generations to come.
Values
Performance
Innovation
Employee Development
• We listen to our employees and treat each other with respect.
• We care for our employees’ health and safety.
• We are committed to employee and management development.
• We value diversity in individuals and cultures.
Customer Care
Business Practices
7 s Framework
Strategy, Style:
Carrier wants to be our customers’ first choice for air conditioning, heating
and refrigeration solutions everywhere around the world. Markets: Carrier
has priced its products higher than other Korean and local brands like LG and
Samsung. So the market segment Carrier is catering to is middle class and
upper middle class who do not base their decisions only on price but also on
other factors like quality.The sustainable competitive advantage of the
product is quality and reliability. Carrier is one of the most highly regarded
brands in terms of quality
Carrier’s environmental commitment extends beyond our walls to our communities and the
marketplace. Carrier is the only company in the world to be a founding member of the U.S.,
Argentina, China and India Green Building Councils. In fact, Carrier was instrumental in
launching the U.S. Green Building Council in 1993 and was the first company in the world to
join the organization. Carrier’s Rick Fedrizzi was the council’s first chairman, and later went on
to lead the organization as President and CEO.
In China, Carrier serves as a formal international advisor to the China Green Building Council,
having helped introduce the green building council model to that country in 2002.
Staffing
Carrier actively employs degreed and advanced degreed professionals from leading
colleges of the country in disciplines of mechanical, electrical, electronics, software,
sales and engineering as well as experienced manufacturing professionals and
marketing and sales associates
Organizational Structure:
Carrier follows divisional structure where the organization is matrix into three
units business, operations and functional units and each unit is divided
further into 2 product divisions RLC and home care.
SWOT ANALYISIS
Strengths:
First to develop exclusive dealer network in the country. Today, there are
over 400 Carrier Aircon exclusive dealers and 60 Carrier compressor dealers
in India.
Opportunities:
Threats:
The size of the air-conditioner industry in India is about Rs 2,000 crore. The
industry can be sub-divided into non-ducted and ducted products. The
demand for non-ducted products window air-conditioners and mini-splits
comes from both households and corporate. The demand for ducted
products central plants, packaged air-conditioners and ducted splits is only
from the corporate.
Corporate traditionally accounted for about 60 per cent of the total demand
for air conditioners. Corporate sector is still the major demand driver in this
industry but because of the burgeoning Indian middle class there has been a
noticeable jump in the demand for air-conditioners from the household
segment
Air-Conditioner in India
Product Segment Size (Rs. in crores)
The domestic Window Air-conditioner has been growing at the fastest rate
but this has been accompanied by increasing competition leading to low
profit margins. Profits in this segment are driven by volume growth.
The proportion used to be 30:70 during 91-92. Then lowering of excise duties
from 110% to 40% favored the organized sector by narrowing the price gap
e.g., a 1.5 ton air-conditioner which costs Rs.45,000/- in 91-92, now costs
below Rs. 30,000/- in the organized sector against Rs. 24,000/- in the
unorganized sector. This has led to the organized sector entering into the
unorganized sector's share and also due to brand awareness on part of the
customers.
Industry Segments
Volume Value (Rs. in
(Units) crores)
Till 1994, excise duty on ACs varied from Rs.7,000/- for 0.5 ton ACs to Rs.
9,000 for 1.5 ton models. In the 1994-95 to 1996-97 budgets, the govt. gave
considerable relief to the Air-conditioning sector. The excise duty was
reduced from 80% to 60% in 1994-95 and from 60% to 30% in the following
years. In the Exim policy, ACs continued to be in the negative list which
means they cannot be imported without license or as baggage.
Demand
Demand for air conditioners is on a rise as the disposable income and hence
the purchasing power of the Indian middle class is increasing, air conditioner
is no longer a luxury but a necessity. The price of the air conditioner is also
falling with cheaper Korean and Indian players entering the market.
According to industry sources, most of the demand for the air conditioners
which is 70-80% of the air conditioners sold comes from industrial
applications, hospitals, buses and not merely for comfort, as it is widely
believed. Government is one of the major consumers as far as the industrial
applications are concerned.
The demand for air conditioners is expected to grow at the rate of 25% per
annum. In this segment, the demand for window air conditioners, which
currently accounts for 70% of the total demand is likely to reduce to 60% by
year 2011. Split air conditioners which are not very popular now, are
expected to pickup and account for 30% of the demand by 2010. This means
that out of a total of 34 lakh units of air conditioners sold in 2010, around 23
lakh will be window air conditioners and the remaining 11 lakh units will be
split types.
Profitability
Margins in the industry vary depending upon the segment, model and sizes,
between broad ranges of 10 to 20%. However margins in the window
segment are the least. But these are reasonable in the case of Split AIR
CONDITIONERs. Even then, for players who have their own Compressor
Manufacturing facilities, margins are higher. Margins are highest in Central
and Packaged Air-conditioning segments ranging between 20-24%.
The rotary compressor is suitable for conditions where temperature does not
exceed 55 degree Celsius. Beyond this, it’s cooling efficiency decreases.
Hence it is suitable for coastal areas like Mumbai where temperatures are
low as compared to central and northern India. Also it cannot withstand
voltage fluctuations which are common in India and once spoiled it cannot be
repaired. But the advantage is that it is much more efficient than the
reciprocating one at moderate temperatures, consuming less power with
negligible wear and tear problems.
Outlook
During 1999-2000 a total of about 7 lakh air conditioning units were sold and
this is expected to rise to a phenomenal 25 lakh units by the year 2011. The
industry has been growing at a healthy compound rate of 30% for the past
three years and this pace is expected to continue in the near future. While
the growth rate in the domestic window segment is expected to be highest
at around 50%, other segments are also expected to register healthy growth
rates of around 28%. With all the major players investing money towards
higher capacities and new entrants setting up their plants, supply is
expected to keep pace with demand.
Increasing income levels and change in life-styles have led to heavy demand
for consumer durables, esp. air conditioners, washing machines and
refrigerators. Since last two three years they have penetrated most urban
households.
Today, white goods is one of the most brand driven product segments where
companies success depends upon marketing power in terms of building
brand equity and being able to maintain and support nation-wide sales and
distribution network is a prime requirement for effective market penetration.
The cost of servicing and maintaining big distribution network is phenomenal
and this is one of the factors that resulted in regional restriction of some
brands.
In 1820 British Inventor Michael Faraday discovered that ammonia could chill
the air when compressed and liquidized and then allowed to evaporate. In
1841, John Gorrie, a medical doctor discovered that he could use compressor
technology to create ice to cool his patients rooms in Florida. This discovery
gave Gorrie the great aspiration of inventing the first air conditioning unit.
He came very close. His first pro type leaked and was unsuccessful. He
secured funding and his patent was approved in 1851. His funding partner
died and he lost the money to see his dream realized. He later died in 1855
and with him his vision of indoor air conditioning died as well for the next 50
years.
The first air conditioners proved to be hazardous to human’s health when the
toxic gases leaked. The use of ammonia, methyl chloride and propane. These
toxic, flammable gases tended to leak causing fatal results. In 1928 Thomas
Midgley, Jr. was the first to create an air conditioner that used Freon. This
was found to be much safer for humans but had disastrous effects to the
environme
7 O’S SCOPE
Occupants Institutes,Shops,Homes,ShoppingMalls,Restaurants,Clinics
BRAND PERCEPTION
From the survey conducted we can determine that the overall presence of
Carrier is equal to the other four brands, which would primarily mean that
the reach of the brand to the people is satisfactory. But Korean brands like
LG and Samsung are selling the most in western and eastern parts of Delhi
due to their more visibility as far as advertisements are concerned and a
considerable price difference as compared to brands like Carrier, General
and Hitachi. Carrier relies mainly on the age old trust and loyal customer
base it has built over the past hundred years.
Due to high price, Carrier is lagging behind LG and Samsung in terms of shelf
space thus depriving the potential customers the first hand experience of the
functioning of the air conditioner thus losing on potential customers.
The Point of Purchase material plays an important role in building the brand
value at the stores. According to the dealers Carrier is lagging behind when it
comes to POP material as compared to LG , Samsung and Voltas.
But according to the Carrier dealers the best publicity a company can get is
the word of mouth publicity and the large loyal customer base Carrier has
built over the years.
After Sales:
Pricing
Model Price
Durakool 2.0 Ton 22100/-
DURAKOOL X1
1.0Ton 15,900/-
DURAKOOL X2
0.75Ton 13,800/-
DURAKOOL X1
0.75T 13,200/-
Carrier-Gen X2
2.0 Ton 21,700/-
Carrier-Gen X1 15,500/
Carrier-Gen X2 17,200/
Quantity Margin
15-50 2%
51-75 2.50%
75-125 3%
126-175 3%
176-220 4%
>220 5%
Margin offered to the dealers by all the companies was almost the same as
told by the dealers themselves. But LG which is the market leader provides
an incentive of 8%. Hence the dealers will tend to push LG as compared to
other brands. It is very important for Carrier to provide better margins to its
dealers so that there is some incentive for them to push their brand. Also
margins offered to big giants like Croma are far more than those offered to
small dealers. So these dealers find it difficult to compete with high end
retail stores. Spares are also expensive as compared to LG and Samsung.
Major Issues with product and service
1. After sales service: After sales service of carrier was criticized by all
the dealers .Service of carrier is poor and this is one of the major
reasons it is lagging behind LG in the home segment. There are not
enough service centres .On the other hand most of the dealers and
customers were satisfied with the service provided by LG
2. A stock out is a major worry for quite few dealers. According to some
dealers like Amba Motors in Jhandewalah in west Delhi during the peak
season which is from March to May, demand is not met. So quite a few
customers have to be kept waiting for the product.
3. Spare parts are a major issue as they are not available readily. While
comparing with market leader LG spares are readily available.
1 Price 25
2 Quality 31
3 After Sales Service 24
4 Advertisements 14
5 Offers 6
As far as the dealers are concerned the most important parameter which
impacts the sales of air conditioners were price, quality and after sales
service. Brands like LG were rated high as far as after sales service is
concerned and price of the product. Carrier is a more trusted brand as far as
quality is concerned.
METHODOLOGY
The basis of the project was a survey plan. Using surveys all the appropriate
data was collected through dealers located in various parts of Delhi.
Research design:
Research Approach: Field surveys were used to collect data for the study.
The entire Delhi region was divided into five zones North, South, East,
Central and West.
Data Collection Methods: Primary data is the data collected from the first
hand experience. Primary data was collected through field surveys with the
help of questionnaires. The questionnaire had questions which would help in
understanding the 4 Ps of marketing as far as Carrier air conditioners are
concerned. Questionnaire had both open ended and close ended questions.
Considering the competitors in business market, Blue Star, LG, Voltas are
some of the prominent players –
BRAND COMPARISON
COMPANY: L.G. ELECTRONICS
Basis for campaign: Brand name ,Linking happiness with health ‘happiness in
every breath’, Its worlds no one manufacture of ac.
Features: Neo plasma health filters, Gold fins, Chaos logic, Energy savers, Jet
cool, Anti bacterial filters
Brand name, Clean and purified air “help your child breath free”, Own
compressor
Features: Turbo power, Quick power, Optimizer, Bio health plus, Tropical
Rotatory compressor, Compact design, Bionizer, Silver Nano health system
Basis for campaign: Old brand, AC with IQ, Sleek & streamlined body
Features : Vertis Power saver mode, air filter, Timer, Uniform cooling, Burst
proof capacitor, Vitamin-c filter, Blue fin technology
Vertis
Vectra
Window ac O.75,1,1.5 and 2
COMPANY: ONIDA
Window ac 1.5, 2
Split ac 1.5, 2
COMPANY: HITACHI
Features: Twin motor and twin turbo technology, Lower noise level, Low
power consumption, Low derating
Windows 1.5, 2
ac
Split ac 1.5, 2
COMPANY: WHIRLPOOL
Punch lines: “Whirlpool every where, every home…Every home, with pride,
passion, performance.”
Split ac 1.5, 2
COMPANY: O-GENERAL
Window ac 1.5, 2
Split ac 1.5, 2
COMPANY: GODREJ
Basis for campaign: Old and reputed brand, India’s most powerful ac
Features: Active air tech, Healthy negative ions Intelligent UV ray generator,
4 stage air filter , Bacteria killing medium, Powerful dehumidifier
Window ac 1.5 ,2
Split ac 1.5 ,2
COMPANY: ELECTROLUX
Cassette 2 and 4
COMPANY: VIDEOCON
Windows 1.5 ,2
ac
Spilt ac 2,2.5
The project deals with the study into the marketing mix of Carrier In the
Delhi Air- Conditioner Market. The report consists of the primary data
obtained from the dealers. The attributes, which defined the data, were shelf
space, window display, prices given, p.o.p. material, dealer preference,
general positive and negative attributes for various brands, dealer interface,
and finance schemes offered.
In all I visited 50 outlets spread all over Delhi (includes dealers and retailer),
who dealt in air conditioner I also interviewed 50 customers at showrooms
across Delhi. Data thus obtained was then grouped and analyzed, after
which the inferences were drawn.
I observed that L.G. was undoubtedly the market leader. In Delhi air
conditioner market LG has the highest penetration, as it is available in
almost 75% of the outlets while Carrier is present in only 64% of the outlets.
L.G. also leads in the other categories like the window display (40%), shelf
space (50%) and POP (40%) while Voltas has the share of 7%, 28% and 34%
in the respective categories. Although Voltas is No.2 brand in Delhi region
but it has the highest corporate customer or we can say, institutional sales in
comparison to other air conditioner brands.
Of the outlets visited, 44% claim L.G. to be the top Brand whereas Carrier
has 21% of the outlets claim it to be the top Brand. The strengths of L.G. lie
in its low price and good quality whereas Hitachi’s and Carrier’s strengths lie
in its superior quality. Whereas, on the negative side the claim that LG is not
as durable as other brands & has a life expectancy less than other brands
like Carrier ,Voltas, General etc
For Carrier the most spoken about negative is its high price & poor after
sales service.
3. Carrier, Hitachi and General are the most trusted brands in terms of
quality. Among these Carrier is the cheapest and General is the most
expensive brand
4. LG, Samsung and Voltas are the most demanded brands because of
better visibility due to more advertisements
5. While visiting the shop we know that LG gives high profit margin as
compare to other competitors.
7. LG has the best network of service centres all over Delhi. It provides
the best after sales service.
8. After sales service is the greatest concern for Carrier .All the dealers
were unsatisfied the service offered by carrier. Dealers claim that there
is no follow up calls from Carrier
Appendix