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INTRODUCTION

1.1 Consumer Buying Behavior:

The purchase is only the visible part of a more complex decision process created by the

consumer for each buying decision he makes. But what happens before and after this

purchase? What are the factors influencing the choice of product purchased by the consumer?

Today, let’s focus on the Consumer Buying Decision Process and the stages that lead a

shopper to purchase a new product.

Engel, Blackwell and Kollat have developed in 1968 a model of consumer buying decision

process in five steps: Problem/need recognition, information search, evaluation of alternatives

to meet this need, purchase decision and post-purchase behavior.

I. Need Recognition / Problem Recognition:

The need recognition is the first and most important step in the buying process. If there is no

need, there is no purchase. This recognition happens when there is a lag between the

consumer’s actual situation and the ideal and desired one.

However, not all the needs end up as a buying behavior. It requires that the lag between the

two situations is quite important. But the “way” (product price, ease of acquisition, etc.) to

obtain this ideal situation has to be perceived as “acceptable” by the consumer based on the

level of importance he attributes to the need.

On the other hand, the ability to be able to go to your work by car in 20 minutes every

morning (ideal situation) rather than lose three hours in transit because you do not have a car

and you live in the countryside (actual situation) is something that means a lot to you. So you

will have a buying behavior to purchase a car.

In addition to a need resulting from a new element, the gap between the actual situation and

the ideal situation may be due to three cases. The current situation has not changed, but the

ideal situation has (a neighbor told you about the possibility – that you did not know – to

clean the pool by a specialized company). Or, the ideal situation is still the same but it’s the

actual situation has changed (you’re tired of cleaning your pool by yourself). Or finally, the

two situations have changed.

The recognition of a need by a consumer can be caused in different ways. Different

classifications are used:

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Internal stimuli (physiological need felt by the individual as hunger or thirst) which

opposes the external stimuli such as exposure to an advertisement, the sight of a pretty

dress in a shop window or the mouth-watering smell of a Cake when passing by a bakery.

Classification by type of needs:

o Functional need: the need is related to a feature or specific functions of the product or

happens to be the answer to a functional problem. Like a computer with a more

powerful video card to be able to play the latest video games or a washing machine

that responds to the need to have clean clothes while avoiding having to do it by hand

or go to the Laundromat.

o Social need: the need comes from a desire for integration and belongingness in the

social environment or for social recognition. Like buying a new fashionable bag to

look good at school or choose a luxury car to “show” that you are successful in life.

o Need for change: the need has its origin in a desire from the consumer to change.

This may result in the purchase of a new coat or new furniture to change

the decoration of your apartment.

The Maslow’s hierarchy of needs: Developed by the eponymous psychologist, this is one

the best known and widely used classifications and representations for hierarchy of needs.

It specifies that an individual is “guided” by certain needs that he wants to achieve before

seeking to focus on the following ones:

o 1. Physiological needs

o 2. Safety needs

o 3. Need of love and belonging

o 4. Need of esteem (for oneself and from the others)

o 5. Need of self-actualization

II. Information search

Once the need is identified, it’s time for the consumer to seek information about possible

solutions to the problem. He will search more or less information depending on the

complexity of the choices to be made but also his level of involvement. (Buying pasta requires

little information and involves fewer consumers than buying a car.)

Then the consumer will seek to make his opinion to guide his choice and decision making

process.

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Internal information: this information is already present in the consumer’s memory. It

comes from previous experiences he had with a product or brand and the opinion he may have

of the brand.

Internal information is sufficient for the purchasing of everyday products that the consumer

knows – including Fast-Moving Consumer Goods (FMCG) or Consumer Packaged Goods

(CPG). But when it comes to a major purchase with a level of uncertainty or stronger

involvement and the consumer does not have enough information, he must turns to another

source:

External information: This is information on a product or brand received from and

obtained by friends or family, by reviews from other consumers or from the press. Not to

mention, of course, official business sources such as an advertising or a seller’s speech.

During his decision-making process and his Consumer Buying Decision Process, the

consumer will pay more attention to his internal information and the information from friends,

family or other consumers. It will be judged more “objective” than these from advertising,

a seller’s speech or a commercial brochure of the product.

III. Alternative evaluation

Once the information collected, the consumer will be able to evaluate the different alternatives

that offer to him, evaluate the most suitable to his needs and choose the one he think it’s best

for him.

In order to do so, he will evaluate their attributes on two aspects. The objective characteristics

(such as the features and functionality of the product) but also subjective (perception

and perceived value of the brand by the consumer or its reputation).

Each consumer does not attribute the same importance to each attribute for his decision and

his Consumer Buying Decision Process. And it varies from one shopper to another. Mr. Smith

may prefer a product for the reputation of the brand X rather than a little more powerful but

less known product. While Mrs. Johnson has a very bad perception of that same brand.

The consumer will then use the information previously collected and his perception or image

of a brand to establish a set of evaluation criteria, desirable or wanted features, classify the

different products available and evaluate which alternative has the most chance to satisfy him.

The higher the level of involvement of the consumer and the importance of the purchase are

stronger, the higher the number of solutions the consumer will consider will be important. On

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the opposite, the number of considered solutions will be much smaller for an everyday

product or a regular purchase.

IV. Purchase decision

Now that the consumer has evaluated the different solutions and products available for

respond to his need, he will be able to choose the product or brand that seems most

appropriate to his needs. Then proceed to the actual purchase itself.

His decision will depend on the information and the selection made in the previous step based

on the perceived value, product’s features and capabilities that are important to him.

But his Consumer Buying Decision Process and his decision process may also depend or be

affected by such things as the quality of his shopping experience or of the store (or online

shopping website), the availability of a promotion, a return policy or good terms and

conditions for the sale.

For example, a consumer committed to the idea of buying a stereo of a well-known brand

could change his decision if he has an unpleasant experience with sellers in the store. While a

promotion in a supermarket for a yogurt brand could tip the scale for this brand in the

consumer’s mind who was hesitating between three brands of his “evoked set”.

V. Post-purchase behavior

Once the product is purchased and used, the consumer will evaluate the adequacy with his

original needs (those who caused the buying behavior). And whether he has made the right

choice in buying this product or not. He will feel either a sense of satisfaction for the product

(and the choice). Or, on the contrary, a disappointment if the product has fallen far short of

expectations.

An opinion that will influence his future decisions and buying behavior. If the product has

brought satisfaction to the consumer, he will then minimize stages of information search and

alternative evaluation for his next purchases in order to buy the same brand. Which will

produce customer loyalty.

On the other hand, if the experience with the product was average or disappointing, the

consumer is going to repeat the 5 stages of the Consumer Buying Decision Process during his

next purchase but by excluding the brand from his “evoked set”.

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1.2 Cutting Tools

In the context of machining, a cutting tool (or cutter) is any tool that is used to remove

material from the work piece by means of shear deformation. Cutting may be accomplished

by single-point or multipoint tools. Single-point tools are used in turning, shaping, plaining

and similar operations, and remove material by means of one cutting edge. Milling and

drilling tools are often multipoint tools. Grinding tools are also multipoint tools. Each grain

of abrasive functions as a microscopic single-point cutting edge (although of high negative

rake angle), and shears a tiny chip.

Cutting tools must be made of a material harder than the material which is to be cut, and the

tool must be able to withstand the heat generated in the metal-cutting process. Also, the tool

must have a specific geometry, with clearance angles designed so that the cutting edge can

contact the work piece without the rest of the tool dragging on the work piece surface. The

angle of the cutting face is also important, as is the flute width, number of flutes or teeth, and

margin size. In order to have a long working life, all of the above must be optimized, plus the

speeds and feeds at which the tool is run.

TYPES

Linear cutting tools include tool bits (single-point cutting tools) and broaches. Rotary cutting

tools include drill bits, countersinks and counter bores, taps and dies, milling cutters,

reamers, and cold saw blades. Other cutting tools, such Asbandsaw blades, hacksaw blades,

and fly cutters, combine aspects of linear and rotary motion.

i) Cutting tools with inserts (index able tools)

Cutting tools are often designed with inserts or replaceable tips (tipped tools). In these, the

cutting edge consists of a separate piece of material, either brazed, welded or clamped on to the

tool body. Common materials for tips include cemented carbide, polycrystalline diamond,

and cubic boron nitride. Tools using inserts include milling cutters (end mills, fly cutters),

tool bits, and saw blades.

ii) Solid cutting tools

The typical tool for milling and drilling has no changeable insert. The cutting edge and the

shank is one unit and built of the same material. Small tools cannot be designed with

exchangeable inserts.

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iii) Holder

To use a cutting tool within a CNC machine there is a basic holder required to mount it on

the machines spindle or turret. For CNC milling machines, there are two (2) types of holder.

There are shank taper (SK) and hollow shank taper (HSK).

iv) Tool setup

The detailed instruction how to combine the tool assembly out of basic holder, tool and

insert can be stored in a tool management solution.

1.2 MATERIALS

To produce quality product, a cutting tool must have three characteristics:

Hardness: hardness and strength at high temperatures.

Toughness: so that tools do not chip or fracture.

Wear resistance: having acceptable tool life before needing to be replaced.

Cutting tool materials can be divided into two main categories: stable and unstable.

Unstable materials (usually steels) are substances that start at a relatively low hardness point

and are then heat treated to promote the growth of hard particles (usually carbides) inside

the original matrix, which increases the overall hardness of the material at the expense of

some its original toughness. Since heat is the mechanism to alter the structure of the

substance and at the same time the cutting action produces a lot of heats, such substances

are inherently unstable under machining conditions.

Stable materials (usually tungsten carbide) are substances that remain relatively stable under the

heat produced by most machining conditions, as they don't attain their Hardness through heat.

They wear down due to abrasion, but generally don't change their properties much during use.

Most stable materials are hard enough to break before flexing, which makes them very fragile.

To avoid chipping at the cutting edge, some tools made of such materials are finished with a

slightly blunt edge, which results in higher cutting forces due to an increased shear area,

however, tungsten carbide has the ability to attain a significantly sharper cutting edge than

tooling steel for uses such as ultrasonic machining of composites.

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OBJECTIVES & SCOPE

The purpose of this report is to find the ways to convert old existing non-buying

customer to buying customer.

2.1.1 PRIMARY OBJECTIVE:

To study the factors influencing buying decision of customer buying cutting

tools.

2.1.2 SECONDARY OBJECTIVES:

i. To understand & analyze the market potential for cutting tools.

ii. To find out different competitors of Sandvik Coromant and their

market presence.

2.2 SCOPE OF THE PROJECT:-

All types of industries in and around Rajkot.

The study involves the responses from decision makers in the SMEs and will help

understanding potential for Sandvik products (cutting tools).

To increase potential in use of cutting tools in existing SMEs customer in Rajkot.

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COMPANY PROFILE

3.1 SANDVIK OVERVIEW

Sandvik is a global engineering Group with more than 47,000 employees with a strong

commitment to enhancing customer productivity, profitability and safety.

Our operations are based on unique expertise in materials technology, extensive knowledge

about industrial processes and close customer cooperation. This combination, coupled with

continuous investments in research and development (R&D), has enabled us achieve world-

leading positions in the following areas:

Tools and tooling systems for metal cutting as well as components in cemented

carbide and other hard materials

Equipment and tools for the mining and construction industries as well as various

types of processing systems

Products in advanced stainless steels, special alloys and titanium as well as metallic

and ceramic resistance materials

Organization

The Sandvik Group conducts operations within five business areas: Sandvik Mining, Sandvik

Machining Solutions, Sandvik Materials Technology, Sandvik Construction and Sandvik

Venture - with responsibility for research and development (R&D), production and sales of

their respective products.

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Sandvik's business areas

The Sandvik Group conducts operations in five business areas with responsibility for research

and development (R&D), production and sales of their respective products:

Sandvik Mining

A leading supplier in equipment, tools and service for the mining industry.

The business area is active in exploration, rock drilling, rock cutting, crushing, and loading

and hauling solutions for surface and underground applications.

Sales: about 30,700 MSEK (2013)

Number of employees: About 13,000 (2013)

www.mining.sandvik.com

Sandvik Machining Solutions

Market-leader for tools and tooling systems for advanced industrial metal

cutting. Products are manufactured in cemented carbide and other hard materials such as

diamond, cubic boron nitride and special ceramics.

Sales: about 28,500 MSEK (2013)

Number of employees: about 19,100 (2013)

www.sandvik.coromant.com

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Sandvik Materials Technology

A world-leading developer and manufacturer of products made from

advanced stainless steel grades and special alloys for the most demanding industries. The

product areas comprise Tube, Strip, Primary Products, Wire and Heating Technology.

Sales: about 14,000 MSEK (2013)

Number of employees: about 7,100 (2013)

www.smt.sandvik.com

Sandvik Construction

Specializes in equipment, tools and service for the breaking, drilling and

crushing niches in the construction industry. Application areas include tunneling, quarrying,

road building, demolition and recycling.

Sales: about 8,600 MSEK (2013)

Number of employees: about 3,100 (2013)

www.construction.sandvik.com

Sandvik Venture

Sandvik Venture is aiming to create the best possible environment for

growth and profitability in attractive and fast-growing operations. The product areas comprise

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Sandvik Process Systems, Sandvik Hyperion* and Wolfram.

Sales: about 5,400 MSEK (2013)

Number of employees: about 2,600 (2013)

Sandvik Coromant

Sandvik Coromant is the world’s leading supplier of tools, tooling solutions and know-how to

the metalworking industry. With extensive investments in research and development we

create unique innovations and set new productivity standards together with our customers.

These include the world's major automotive, aerospace and energy industries.

Sandvik Coromant has 8,000 employees and is represented in 130 countries.

We are part of the business area Sandvik Machining Solutions within the global industrial

group Sandvik

3.2 Vision and strategy

Sandvik vision is to set the industry standard. Sandvik means that we set the benchmark for

others to follow.

With more than 2,700 people active in research and development, Sandvik have established a

significant track record in commercializing new products and solutions, many of which have

become the yardstick within customers' industries.

Driven by the challenges our customers face, Sandvik continuously strive to set new industry

standards, resulting in higher productivity and enabling more efficient and safer industrial

activities. Sandvik have the passion, expertise and innovative mindset for developing new

ideas into pioneering solutions.

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3.3 Products Profile:

Turning tools

General turning: CoroTurn 107 | CoroTurn 111 | CoroTurn HP |

CoroTurn RC | CoroTurn SL | CoroTurn TR | T-Max P

Heavy turning: T-Max P

Multi-task machining: CoroPlex MT | CoroPlex SL | CoroPlex TB |

CoroPlex TT | CoroTurn SL

Parting and grooving: CoroCut 1-2 | CoroCut 3 | CoroCut MB |

Milling tools

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Face milling: Auto AF | Auto FS | Auto Roughing | CoroMill 210 |

CoroMill 245 | CoroMill 345 | CoroMill 357 | CoroMill 360 | CoroMill 365 |

CoroMill Century | CoroMill S-60 | T-Max 45

Gear milling: CoroMill 170 | CoroMill 172 | CoroMill 176 | CoroMill 177

High feed milling: CoroMill 210 | CoroMill 316 | CoroMill 419 |

CoroMill Plura

Parting and grooving: CoroMill 327 | CoroMill 328 | CoroMill 329 |

CoroMill 331 | T-Max Q-cutter

Profile milling: CoroMill 200 | CoroMill 210 | CoroMill 216 |

CoroMill 216F | CoroMill 300 | CoroMill 419 | CoroMill 600

Round tools milling: CoroMill 316 | CoroMill Plura

Chamfer milling: CoroMill 326 | CoroMill 327 | CoroMill 495

Drilling tools

Deep hole drills: CoroDrill 800 | CoroDrill 801 | CoroDrill 818 | Gun drills

Drills for composites: Composite solutions | CoroDrill 452 |

CoroDrill 854/856

Exchangeable tip drills: CoroDrill 870

Gun drills: Gun drills overview

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Boring tools

Face grooving: CoroBore 825 SL

Fine boring: CoroBore 824 XS | CoroBore 825/826 |

CoroBore 825/826 XL | Fine boring head

Rough boring: CoroBore 820 | CoroBore 820 XL | DuoBore 821

Threading tools

Thread milling: CoroMill 325 | CoroMill 326 | CoroMill 327 |

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Tapping tools

CoroTap overview

Cutting taps: CoroTap 100 | CoroTap 200 | CoroTap 300

Forming taps: CoroTap 400

Sandvik Coromant offers world class products for turning, milling, drilling and tool holding.

In addition we are able to provide extensive process and application knowledge within

machining. This is what has positioned us as the market leader in our industry.

3.4 Small and Medium Enterprises:

SME (small and medium enterprises) are those whose investment in plant and machinery are

more than Rs.10 lakh but doesn’t exceed Rs.2 crore. They play a pivotal role in the country’s

industrial economy. It is estimated that in value, the sector accounts for about 45 percent of

manufacturing output and 40 percent of total exports. They always represented the model of

socio-economic policies of Government of India which emphasized judicious use of foreign

exchange for import of capital goods and inputs labor intensive mode of production;

employment generation; non concentration of economic power in the hands of few (as in the

case of big houses); discouraging monopolistic practices of production and marketing; and

finally effective contribution to foreign exchange earning of the nation with low import-

intensive operations. It was also coupled with the policy of de-concentration of industrial

activities in few geographical centres.

It can be observed that by and large, SMEs in India met the expectations of the Government in

this respect. SMEs developed in a manner, which made it possible for them to achieve the

following objectives:

High contribution to domestic production

Significant export earnings

Low investment requirements

Operational flexibility

Location wise mobility

Low intensive imports

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Capacities to develop appropriate indigenous technology

Import substitution

SME’s also suffer from few limitations which must be looked upon for the smooth

functioning of this sector. Some of the limitations are:-

Low Capital base

Concentration of functions or authority with one / two persons

Inadequate exposure to international environment

Inability to face impact of WTO regime

Inadequate contribution towards R & D

Lack of professionalism

In spite of these limitations, the SMEs have made significant contribution toward

technological development and exports.

SMEs have been established in almost all-major sectors in the Indian industry such as:

Food Processing

Agricultural Inputs

Chemicals & Pharmaceuticals

Engineering; Electricals; Electronics

Electro-medical equipment

Textiles and Garments

Leather and leather goods

Meat products

As a result of globalization and liberalization, coupled with WTO regime, Indian SMEs have

been passing through a transitional period. With slowing down of economy in India and

abroad, particularly USA and European Union and enhanced competition from China and a

few low cost centers of production from abroad many units have been facing a tough time.

Those SMEs who have strong technological base, international business outlook, competitive

spirit and willingness to restructure themselves shall withstand the present challenges and

come out with shining colors to make their own contribution to the Indian economy.

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RESEARCH METHODOLOGY

Research is defined as art of scientific investigation.

Redman and Mory defines research as “Systematic effort to gain new knowledge.”

4.1 Research Title:

Study of factors influencing customer buying decision for cutting tools.

4.2 Research objectives:

The purpose of this report is to find the ways to convert non buying customer to buying

customer.

To study the potential of Sandvik products in Rajkot market.

To understand & analyze the market potential for cutting tools.

To find out different competitors of Sandvik Coromant and their market presence.

Research design : Descriptive

Research approach : Quantitative research

Research method : Questionnaires-assisted Personal

Interview

Research Instrument : Structured Questionnaire

Sample Universe : Rajkot

Sample frame : Existing & Non Buying Customers

(small scale Enterprise)

Sample Size : 130 Nos.

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4.3 Types and sources of data:

Quantitative research was conducted due to analysis and interpretation was in terms of sample

counts.

1. Quantitative Research

Quantitative research refers to systematic empirical investigation of social phenomena via

statistics, mathematical or numerical data or computational techniques.

The objective of quantitative research is to develop and employ mathematical models, theories

and/or hypotheses pertaining to phenomena. The process of measurement is central to

quantitative research because it provides the fundamental connection between empirical

observation and mathematical expression of quantitative relationships. Quantitative data is

any data that is in numerical form such as statistics, percentages, etc. In layman's terms, this

means that the quantitative researcher asks a specific, narrow question and collects a sample

of numerical data from participants to answer the question. The researcher analyzes the data

with the help of statistics. The researcher is hoping the numbers will yield an unbiased result

that can be generalized to some larger population. Qualitative research, on the other hand,

asks broad questions and collects word data from participants. The researcher looks for

themes and describes the information in themes and patterns exclusive to that set of

participants.

2. Qualitative Research

Qualitative research refers exploring issues, understanding phenomena and answering

questions by analyzing and making sense of unstructured and non-numeric data.

Qualitative research is designed to reveal a target audience’s range of behavior and the

perceptions that drive it with reference to specific topics or issues. It uses in-depth studies of

small groups of people to guide and support the construction of hypotheses. The results of

qualitative research are descriptive rather than predictive.

Qualitative research methods originated in the social and behavioral sciences: sociology,

anthropology and psychology. Today, qualitative methods in the field of marketing research

include in-depth interviews with individuals, group discussions, diary and journal exercises;

and in-context observations. Sessions may be conducted in person, by telephone, via

videoconferencing and via the Internet.

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Data Types:

Primary Data:

Primary research consists of a collection of original primary data collected by the researcher.

It is often undertaken after the researcher has gained some insight into the issue by reviewing

secondary research or by analyzing previously collected primary data. It can be accomplished

through various methods, including questionnaires and telephone interviews in market

research, or experiments and direct observations in the physical sciences, amongst others.

The term primary research is widely used in academic research, market research and

competitive intelligence.

Advantages:

1. Researcher can focus on both qualitative and quantitative issues.

2. Addresses specific research issues as the researcher controls the search design to fit

their needs

Disadvantages:

Compared to secondary research, primary data may be very expensive in preparing and

carrying out the research. Costs can be incurred in producing the paper for questionnaires or

the equipment for an experiment of some sort.

1. Some research projects, while potentially offering information that could prove quite

valuable, may not be within the reach of a researcher.

2. By the time the research is complete it may be out of date.

3. Low response rate has to be expected.

For business development of Sandvik, we performed survey work, cold calling with at least

140 potential clients, and 7-8 meetings on daily basis.

Secondary Data:

Secondary data is data collected by someone other than the user. Common sources of

secondary data for social science include censuses, organizational records and data collected

through qualitative methodologies or qualitative research.

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The collection of secondary data was done with the help of employees & Distributors of

Sandvik in Rajkot region.

Data collection is preferably done through interviews with owner of the SME’s.

I have received the secondary data from the company website regarding the industry scope

and competitors information. The company journals help to know the product and its

specification which help me understand the product and customer needs and requirements

minutely.

Surveys helped for getting glimpse of market expectations and also contributed for market

research.

4.4 Research Technique:

Sampling Techniques

Convenience Sampling is used as sampling technique.

Convenience Sampling

Convenience sampling is a non-probability sampling technique where subjects are selected

because of their convenient accessibility and proximity to the researcher.

A sample population selected because it is readily available and convenient, as researchers are

drawing on relationships or networks to which they have easy access. The researcher using

such a sample cannot scientifically make generalizations about the total population from this

sample because it would not be representative enough.

The subjects are selected just because they are easiest to recruit for the study and the

researcher did not consider selecting subjects that are representative of the entire population.

In all forms of research, it would be ideal to test the entire population, but in most cases, the

population is just too large that it is impossible to include every individual. This is the reason

why most researchers rely on sampling techniques like convenience sampling, the most

common of all sampling techniques. Many researchers prefer this sampling technique because

it is fast, inexpensive, easy and the subjects are readily available.

For example, if the interviewer was to conduct such a survey at a shopping center early in the

morning on a given day, the people that he/she could interview would be limited to those

given there at that given time, which would not represent the views of other members of

society in such an area, if the survey was to be conducted at different times of day and several

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times per week. This type of sampling is most useful for pilot testing. Credibility of a

researcher's results by convenience sampling will depend on convincing the reader that the

sample chosen equates to a large degree of the population from which they are drawn.

4.5 Research instrument:

Interviews:

Interviews are usually carried out in person i.e. face-to-face but can also be administered by

telephone or using more advance computer technology such as Skype. Sometimes they are

held in the interviewee’s home, sometimes at a more neutral place. It is important for

interviewees to decide whether they are comfortable about inviting the researcher into their

home and whether they have a room or area where they can speak freely without disturbing

other members of the household.

The interviewer (which is not necessarily the researcher) could adopt a formal or informal

approach, either letting the interviewee speak freely about a particular issue or asking specific

pre-determined questions. This will have been decided in advance and depend on the approach

used by the researchers. A semi-structured approach would enable the interviewee to speak

relatively freely, at the same time allowing the researcher to ensure that certain issues were

covered.

When conducting the interview, the researcher might have a check list or a form to record

answers. This might even take the form of a questionnaire. Taking notes can interfere with the

flow of the conversation, particularly in less structured interviews. Also, it is difficult to pay

attention to the non-verbal aspects of communication and to remember everything that was

said and the way it was said. Consequently, it can be helpful for the researchers to have some

kind of additional record of the interview such as an audio or video recording. They should of

course obtain permission before recording an interview.

Surveys

Surveys involve collecting information, usually from fairly large groups of people, by means

of questionnaires but other techniques such as interviews or telephoning may also be used.

There are different types of survey. The most straightforward type is one shot survey is

administered to a sample of people at a set point in time. Another type is the “before and after

survey” which people complete before a major event or experience and then again afterwards.

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Questionnaires

Questionnaires are a good way to obtain information from a large number of people and/or

people who may not have the time to attend an interview or take part in experiments. They

enable people to take their time, think about it and come back to the questionnaire later.

Participants can state their views or feelings privately without worrying about the possible

reaction of the researcher. Unfortunately, some people may still be inclined to try to give

socially acceptable answers. People should be encouraged to answer the questions as honestly

as possible so as to avoid the researchers drawing false conclusions from their study.

4.6 Data representation tools:

Histogram

A histogram is a graphical representation of the distribution of data. It is an estimate of

the probability distribution of a continuous variable.

Pie Chart

A pie chart is divided into sectors, illustrating numerical proportion. In a pie chart, the arc

length of each sector and consequently its central angle and area, is proportional to the

quantity it represents.

Bar Graph

A bar graph is a chart with rectangular bars with lengths proportional to the values that they

represent. The bars can be plotted vertically or horizontally. A vertical bar chart is sometimes

called a column bar chart. A bar graph is a chart that uses horizontal and vertical bars to show

comparisons among categories.

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DATA ANALYSIS

Industry segment catering to ?

Automotive 65 42%

General Engineering 62 41%

Die & Mold Industry 24 16%

Oil & Gas Industry 1 1%

Medical – Implants 1 1%

Other 0 0%

Interpretation:

It is observed from the graph that the automobile and General Engineering segment are

the most target market at Rajkot region.

Automobile sector alone 42% and General Engineering shares 41% of the market.

Other sectors such as medical, Die and mould has less scope at Rajkot region.

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Machines being used?

CNC Machines-Turning 86 58%

VMC Machines-Milling 48 32%

CNC Machine-Machining Centre 4 3%

Conventional-Turning 7 5%

Conventional-Milling 4 3%

Interpretation:

From the graph we can conclude that SME’s use 56% of the CNC machines for the

Turning purpose and 32% VMC machines being used for milling purpose.

The CNC and VMC machines have replaced most of the traditional lathe machines

and the industry growing at a faster rate.

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Operations being performed ?

Turning 87 40%

Milling 48 22%

Drilling 23 11%

Threading 14 6%

Parting & grooving 46 21%

Interpretation:

From the graph we can conclude that there is huge scope for Turning operation and the

Company should focus on the R&D for the insert for turning operation

Milling is the second most operation wghich is carried out by the SME’s at Rajkot

region.

26

Tooling Brands being procured?

Interpretation:

It is from the study that after Sandvik, Taegutech is Growing rapidly and is a big

competition to Sandvik in the tooling industry, special its 4015 insert is ruling the

market.

Followed by Taegutech there are other companies which are having a good market

presence in the Rajkot region are ceratizit with 24% market share, Keyocera and

Tungalloy and walter shares 18%, 11% and 12% market share resp.

27

Choose Factors affecting your buying decision as per the importance of the

factors :

1. Price of Tools?

Interpretation:

As per the graph it is observed the price the very crucial factor for the SME’s while

purchasing tooling for their organisation.

2. Tool Quality / Consistency in performance ?

Interpretation:

28

As per the graph it is observed the tools quality has fairly good importance when it

comes for SME’s while purchasing tooling for their organisation.

3. Productivity of Tool?

Interpretation:

As per the graph it is observed the productivity of tool is the fairly important factor for

the SME’s while purchasing tooling for their organisation.

4. Reduction in CPC ?

Interpretation:

29

As per the graph it is observed reduction in Cost per component is the second most

important factor after price for the SME’s while purchasing tooling for their

organisation.

5. Tool life?

Interpretation:

As per the graph it is observed that tool life has equal importance as that of CPC and

price for the SME’s while purchasing tooling for their organisation.

1. Deliveries?

Interpretation:

30

As per the graph it is observed the deliveries factor has fair importance but price factor

play a decisive role for the SME’s while purchasing tooling for their organisation.

2. Services Offered / Training?

Interpretation:

As per the graph it is observed the services and training are Important and slight

important while consider tooling procurement.

B. Rate Factors for which you have chosen or will choose Sandvik as a

partner

1. Price of Tools?

31

Interpretation:

As per the graph it is observed that price of Sandvik products has very Dissatisfied

opinion in the minds of the customer while consider tooling procurement.

2. Tool Quality / Consistency in performance?

Interpretation:

As per the graph it is observed that tool quality of Sandvik products has somewhat

satisfied opinion in the minds of the customer while consider tooling procurement.

3. Productivity of Tool?

32

Interpretation:

As per the graph it is observed that productivity of Sandvik products has very good

opinion in the minds of the customer.

4. Reduction in CPC?

Interpretation:

As per the graph it is observed that reduction in CPC has very satisfied opinion in the

minds of the customer while consider tooling procurement.

5. Tool life?

33

Interpretation:

As per the graph it is observed that tool life of Sandvik products has very satisfied

opinion in the minds of the customer while consider tooling procurement.

6. Deliveries?

Interpretation:

As per the graph it is observed that deliveries offered by Sandvik found Neutral

opinion while consider tooling procurement in the minds of the customer.

7. Services Offered / Training?

34

Interpretation:

As per the graph it is observed that services and training offered by Sandvik found

satisfactory while consider tooling procurement.

Annual Insert Consumption:

Annual insert consumption Company

Less than 500 33

Between 501-1000 21

Between 1001-3000 34

Greater than 3000 21

The table above shows factors decision maker take into consideration while selecting

particular brand:

43% of customer says productivity is important to them

38% of customers says tool life is important to them.

Key factors: -

Around 40 % people say they want reduction in CPC but there are also customers who

are having batch production at their place and say CPC is not important to them.

Sandvik Coromant inserts can reduce their CPC but Company must focus upon and

prove the remaining customers that even they have can be benefited by using Sandvik

tools they must be given proper knowledge about the advantages of the insert and other

added services provided by the company.

Same is the case with Price as a factor, if company can explain the advantages of using

Sandvik tool and the Services people will invest more in inserts.

SME’s compare tool life directly with price they should be told that reduction in tool

life is less changing of inserts, improved quality and reduction in time of production.

35

What are the concerns SME’s have with Sandvik Coromant?

Concerns Companies

Communication Gap 70

Delivery 85

Credit Period 70

Machining Parameters 80

Batch Production 95

The table above shows the factors influencing the buying decisions.

44 % customers say they have batch production and so we don’t need advantages

given by premium brand.

38 % customer say in a day delivery is an important factors while selecting a

particular tooling brand.

Key factors:-

Majority of SME’s (Small and medium scale enterprises ) have batch production at their

place so they expect in a delivery to complete the different orders they get.

Sandvik Coromant has a strong point that it can help reduce CPC (Cost per component)

and also reduce the cycle time but these customer carrying out batch production say

they do not need both the advantages provided by Sandvik Coromant and so choose

other competitors brand .

Needs of Small and Medium scale enterprises?

Needs Companies (in %)

Technical Support 60

Distributors Support 80

Constant Price 95

36

The table above shows need of SME’s

Key factor:-.

Majority of customers expects a constant price for the inserts they buy. They do not want the

company to have price rise every year. Customers expect good support from distributors as in

quick deliveries, solving their problems on top priority. Customer expects a good technical

support from distributor. They expect the distributor to prove the inserts with their machine

capacities.

37

FINDINGS & OBSERVATIONS

It is found that Products of Sandvik Coromant are considered as Premium Brand

products by almost all the SME’s across the industry and has good reputation in

the market when it comes to Brand value.

Sandvik Coromant are the pioneer in providing best Quality inserts tooling &

Quality Assurance

Many existing customers claim that the Sandvik tools are Productive in achieving

reduction in Bottleneck problems.

Many Non Buying customers also claim that the tooling provided by Sandvik

Coromant are sometimes Unaffordable.

Sandvik Coromant has the Best world class R&D lab which launches 600 new

products every half yearly, hence Sandvik is considered as Pioneer in Introducing

new advance technology to the Market.

Sandvik tooling produces best results when used for mass production but there are

issues with batch production as claim by some customers as the productivity is not

same in the case of batch production.

It is the perception of some of the customers that Sandvik is only for large scale

industries as the discount provided by them to these companies is more as per the

bulk order.

It is observed that the SME’s do not have sufficient fund to back up the equipment

required to provide the services.

38

RECOMMENDATIONS

After undertaking the study the following suggestion could be pondered to improve

the services & customer relations of TTL.

Sandvik Coromant should try to build relationship with the SME’s by offering certain

valuable services like arranging support team to help clients in using the products.

Sandvik Coromant should undertake a program to create awareness about company

products and benefits for expand the business in the SME sector.

Company should have a uniform discount scheme for all SME’s.

The company should focus on maintaining and improving good relationship with

SMEs as this can boost the sales & thereby the business to the company.

The organization (the sales & marketing teams) should thoroughly study the cash flow

statement and balance sheet of the SME’s before starting business with them, this will

ensure the payment for the services provided.

The company should focus on the SME during its advertising and promotion activities

as most of the SME’s are unaware about the offers and services.

The company should keep the track of the SME’s who are using the Sandvik

Coromant tooling as they are prospect customers for the up gradation of tooling

requirement in future.

The company should also focus on effectively handle the complain of the customers

so that customer feel like king and happy with the services.

The company should resolve the downtime problem with in the required time frame

so that customers always used to prefer Sandvik Coromant and positive word of mouth

should be there.

39

LIMITATIONS

Every research project, more often than not, will have some limitations. In this project we

have classified the limitations into two broad categories i.e. project level – limitations linked

with the project that are mostly independent in nature, Sandvik level – limitations linked with

the project that were dependent on Sandvik Coromant in some way or the other. Each of these

categories is described in greater detail in the following sections:

PROJECT LEVEL

Limited coverage of survey participants – Due to limited time frame of the project

and given the busy schedule of SME Owners and their Concern Authorities, It was

difficult to schedule appointments with large number of individuals

Inability to conduct a detailed market potential assessment survey – this project

was basically to know what are the factors that play a crucial role in deciding cutting

tool requirement by customers. Also a detailed study was made on competitor’s

company and their offerings. The marketing research and survey was undertaken for

Rajkot region during two months. The sample size of the marketing research was

taken to be 130. But due to few limitations 109 responses were collected and report

has been prepared on that basis.

SANDVIK COROMANT LEVEL

Inability to Reach the total Market Reach: As the Market was limited to Rajkot

area the company had customer base and presence in the Rajkot area of Saurashtra

region as the scope of Market is huge but it is limited to few because of unavailability

of proper distribution channel. :

Inability to produce low price products for the SME’s

40

CONCLUSION

Study tells that Sandvik Coromant offer Excellent Service and quality of products is also best

in the industry.

Sandvik Coromant also has best distributors channel in the industry and has a great channel of

loyal customer base.

The Sandvik has all the fat customers in its basket which is why the Sandvik has 300 crore

turnover which is the highest in the tooling business.

The Sandvik tooling has somewhat extensively high price tooling as compared to the other

brand in the market.

Correction/Improvement in delivery of material take little more time as the market is very

vast. (problems caused due to inappropriate distributor service in some places also)

There is perception in the market that sandvik offers non Uniform Discount Schemes.

Following are various conclusions according to the objectives:

1. Customer wise requirements:

Potential/Existing customers expect Reduction in Price (as competitors

are offering lower prices)

New R&D to Provide Insert at Competitive Price.

Less Price discrimination (Universal Discount schemes)

Improvement in Delivery Services.

More Technical Support & In-depth study before trial.

Cost Per Component Reduction Achievement

2. Strategy Sandvik Coromant should attempt for penetrating in the market and

increasing its market presence.

As per the recommendations, Sandvik should,

Develop new Design of Insert for Batch production as there is huge scope in this section.

Undertake a program to create awareness about company products and benefits for expanding

the business in the SME sector.

Have a uniform discount scheme for all SME’s, so that the products should be Affordable &

Price per Component can be achieved by Customers.

Focus on maintaining and improving good relationship with SME’s

41

BIBLIOGRAPHY

10.1 Books

Philip Kotler, “Marketing Management”, a south Asian Perspective, Pearson

Publication,Fourteenth Edition. (Pg No: 58-260)

C.R. Kothari, “Research Methodology Methods & Techniques”, New Age

International Limited Publishers, Second revised edition, May 1990.

(Pg No: 55-122)

Catalogues of Sandvik Coromant.

Directory of Gujarat Industrial Development Corporation, Rajkot.

Tools Registry of Inserts.

10.2 Websites

www.wikipedia.com/rajkot

http://theconsumerfactor.com/en/5-stages-consumer-buying-decision-process/

www.sandvikcoromant.com/about

42

ANNEXURE

11.1 Corporate Presentation

To Study the Scope, presence and customer perspective on SANDVIK COROMANT in

Medium & Small Scale Industry Market, Rajkot

July 08, 2014

By

Ramesh Muske(Management Trainee)

Under the Esteemed Guidance

Rajendra Goyal( Asst. Sales Manager, Rajkot )

Objectives of the Study

To identify :

New Customers and Important Factor before tools purchase

Perception of Customers about Sandvik Coromant

Needs and Expectation of Customers from Sandvik Coromant

Get competitors information & Market share of various competitors

Potential of purchase or Budget of tooling per month

Challenges and Opportunities

What will make non-buying customers buy from Sandvik

43

Industrial Areas Visited

Metoda GIDC

Shapar Ind. Area

Veraval (Shapar) Ind. Area

Vavdi Ind. Area

Mavadi Ind. Area

Patel Nagar

Bhaktinagar Ind. Estate

Atika Ind. Area

Kothariya Ind. Area

Samrat Ind. Area

Aji Ind. Area

General Findings

Total Customer Visited => 109 Nos.

Total Budget of Tooling => Rs.1,00,15,000.00

4

Brand AwarenessClassification of Machines Being used

44

Sector-Wise segmentation of the customer

Sales

Automotive

General Engineering

Die & Mold Industry

Oil & Gas Industry

Medical - Implants

Other

01% 01%

5

42%

41%

15%

6

45

7

Perception Of SANDVIK COROMANT In Market

Premium Brand

Best at Quality & Quality Assurance

Productive in Achieving reduction in Bottleneck problems

Unaffordable sometimes

Best in R&D, Pioneer in Introducing new advance technology

Good for mass production but issues with batch production

Only made for large scale industries

46

Factors Affecting Customer buying decision

9

Price of Tools Tool Quality / Consistency in performance

Productivity of Tool

10

Deliveries

Reduction in CPC Tool life

Services Offered / Training

47

Factors why Customer will choose Sandvik

11

Price of Tools Tool Quality / Consistency in performance

Productivity of Tool

12

Deliveries

Reduction in CPC Tool life

Services Offered / Training

48

Expectation Of Market

New R&D to Provide Insert at Competitive Price.

Less Price discrimination (Universal Discount schemes)

Improvement in Delivery Services.

Affordability and Reachability

More Technical Support & In-depth study Before trial.

Cost Per Component Reduction Achievement

Performance & Value deliverance period.

Recommendation

Theft “ROKO”.

Aggression in Distribution channel; Required at prima phase (while buying machine)

Communication gap (P2B)

Planning –Execution-JIT Delivery (Profit oriented)

Discount support (Case 2 case & on-the-spot)

Sandvik Vision Development in Distributors FSE’s;

- Culture, Etiquettes, Value deliverance, Confidence, Knowledge and Motivation

Kaizen;

- Internal Employees & FSE’s(Without any threat to their personal status)

49

11.2 MARKET POTENTIAL ASSESSMENT QUESTIONNAIRE

New Customer Perspective

Location: Rajkot

1. Organisation Name *

---------------------------------------------------------------------------------------------------------

2. Address of Organisation*

----------------------------------------------------------------------------------------------------------

----

3. Contact Person *

----------------------------------------------------------------------------------------------------------

----

4. Industry segment catering to *

Automotive General Engineering

Die & Mold Industry

Oil & Gas Industry

Medical – Implants

Other:

5. Parts / components being manufactured? *

----------------------------------------------------------------------------------------------------------

----

50

6. Machines being used *

CNC Machines-Turning

VMC Machines-Milling

CNC Machine-Machining Centre

Conventional-Turning

Conventional-Milling

7. Number and make of machines? *

----------------------------------------------------------------------------------------------------------

8. Plans to Invest In new machines

----------------------------------------------------------------------------------------------------------

9. Operations being performed *

Turning

Milling

Drilling

Threading

Parting & grooving

10. Types of material machined?

----------------------------------------------------------------------------------------------------------

----

51

11. Tooling Brands being procured. *

Seco

Taegutech

Korloy

CeraTizit

Widia

keyocera

Tungalloy

Walter

Other:

12. Type of brand / grade / Specification of tools using

----------------------------------------------------------------------------------------------------------

13. Challenges facing any?

----------------------------------------------------------------------------------------------------------

14. Are you aware of services being provided by Sandvik? *

o yes

o No

52

15. Choose Factors affecting your buying decision as per the importance of the factors, *

Not at all

Importan

t

Sligh

tly

Impo

rtant

Impo

rtant

Fairly

Import

ant

Very

Import

ant

Price of

Tools

Tool Quality

/

Consistency

in

performance

Productivity

of Tool

Reduction in

CPC

Tool life

Deliveries

Services

Offered /

Training

53

16. Rate Factors for which you have chosen or will choose Sandvik as a partner *

Very

Dissatisfied

Somewhat

Dissatisfied Neutral

Somewhat

Satisfied

Very

Satisfied

Price of Tools

Tool Quality /

Consistency in

performance

Productivity of

Tool

Reduction in

CPC

Tool life

Deliveries

Services Offered

/ Training

17. Tool Budget for Month? *

----------------------------------------------------------------------------------------------------------

18. Special Remark *

---------------------------------------------------------------------------------------------------------