ANALYSE FACTORS EFFECTING DEMAND

OF

DIESEL GENERATORS (5-60KVA) IN NCR

SUMMER PROJECT REPORT SUBMITTED IN PARTIAL FULFILLMENT OF

THE REQUIREMENTS FOR THE

By Adeep Singh Dhir

ROLL NO. 167014

FOR

EXECUTIVE SUMMARY

The study was undertaken primarily to understand and analyze the various factors that

affect the demand of DGsets in NCR market and also to find out the strength of the

competitor vis-à-vis UIL DGsets. Since power failure is very common in India, this equipment has got good demand. Diesel Generator set of 5 kVA to 60 kVA rating is having very good market as it suits to most of the commercial establishments. The time period was from 12th April to 2nd June.

The study was focused in the Low to Medium power rating segment i.e.; from 5kva to

60kva and region chosen was NCR. Any cellular company was not considered in the

study on the demand of the UIL. It was an Exploratory research or a problem

Identification research. It was found that the “After sales service” played a key role and is

one of the major factor followed by Brand of the ENGINE. Based on these findings UIL

should focus on building a strong after sales support team and device a promotion

strategy focusing on After sales service as there major asset and also build Brand

awareness of the M&M engine they are using as prime mover for there DGsets.

The project ends with the suggestions and the future scope of research. The suggestions

made by the researcher are based on the customer and maintenance head’s feedback, his

observations and understanding of the problem.

TABLE of CONTENTS

.

Sl.No. Topics Page No.

i. Acknowledgement i

ii. Executive Summary ii

iii Objectives of the study 1

1. Introduction

1.1 Product Profile

1.2 Company Profile

1.3 Industry Profile

2

2

11

17

2. Research Methodology

2.1 Scope of the study

2.2 Research Design

2.3 Research Methods

2.4 Questionnaire Design

2.5 Sampling

22

22

22

23

23

23

3. Analysis 26

4. Findings/Observations 35

5. Limitations/Scope of further research 39

6. Suggestions 40

7. Bibliography 41

3

OBJECTIVE OF THE STUDY:

The primary objective of the study is to analyse the various factors that affect the Demand

of DGsets in NCR. And also to find out the strength of the competitor vis-à-vis UIL

DGsets.

4

INTRODUCTION

1.1 PRODUCT PROFILE:

Diesel Generator set is used to generate electricity for meeting the electricity requirement of small establishments such as commercial buildings, Hotels, Railway Stations, Telephone Exchange, Shops etc. when there is a power supply failure from the State Electricity Board or other power supply undertakings.

The Diesel Generator sets proposed in this project profile are of lower to medium capacity only i.e. between 5 kVA to 60 kVA. The prime mover of the Generator set will be a diesel engine and the prime mover will be coupled to an alternator (single phase for small units). There is a control panel to control the on/off operation/change over from mains supply to Generator set supply etc. Generator sets of higher rating have to be started with battery starters. Diesel Generator sets of smaller rating can be started by cranking.

Technical Aspects :

The load requirement of the customer is studied in consultation with the customer. Any special requirements such as minimum start up period, fluctuations of load etc. are noted. A suitable alternator to meet the load requirement is procured from an alternator manufacturer. A diesel engine suitable for the alternator is also selected and procured from the diesel engine manufacturer. The diesel engine and alternator are coupled and fixed on a frame. A control panel for starting the engine using battery bank, isolating the mains while the alternator is running, disconnecting the alternator when the mains supply is available etc. is designed and assembled as stipulated by the customer. The assembly is tested for fuel efficiency, load capacity of the alternator, operational sequences etc.

5

The Diesel Generator set is then despatched to the premises of the customer in dismantled condition on in assembled condition depending upon the size of the Diesel Generator set.

Midium Gensets(15-125kva)

6

Small Genset(2-15kva)

7

These DGsets have to confirm to certain quality standards given by Govt. of India.

Quality Control and Standards :

The alternator has to meet the requirements of the customer with regard to voltage, frequency, power etc. and the diesel engine has to conform to IS 10001.

The performance of alternator and diesel engine may be tested at the manufacturers' works before taking delivery.

The control panel requires contactors and relays. The contractors and relays shall conform to relevant IS Specification and shall be from a reputed manufacturer.

Quality today is not only confined to the product or service alone. It also extends to the process and environment in which they are generated. The ISO 9000 defines standards for Quality Management

8

Systems and ISO 14001 defines standards for Environmental Management System for acceptability at international level. The unit may therefore adopt these standards for global competition

P.S. for more on ISO,,refer www.iso.org

NOISE LIMITS, APPLICABILITY AND REQUIREMENTS

 

The Environment (Protection) Second Amendment Rules, 2002, vide notification G.S.R.

371(E), dated 17th May, 2002, at serial no. 94 (paragraph 1 & 3), prescribes noise limit,

applicability and other requirements for new diesel generator sets (upto 1000 KVA),

manufactured on or after 1st July, 2003. The notification is reproduced here as such.

Noise Limit for Generator Sets run with Diesel

9

1. Noise limit for diesel generator sets (upto 1000 KVA) manufactured on or after

the 1st July, 2003.

The maximum permissible sound pressure level for new diesel generator (DG) sets with

rated capacity upto 1000 KVA, manufactured on or after the 1st July, 2003 shall be 75

dB(A) at 1 metre from the enclosure surface.

The diesel generator sets should be provided with integral acoustic enclosure at the

manufacturing stage itself.

The implementation of noise limit for these diesel generator sets shall be regulated as

given in paragraph 3 below.

3. Limits Of Noise for DG Sets (upto 1000 KVA) Manufactured on or after the 1st

July, 2003

3.1 Applicability

01. These rules apply to DG sets upto 1000 KVA rated output, manufactured or imported

in India, on or after 1st July, 2003.

02. These rules shall not apply to -

a) DG sets manufactured or imported for the purpose of exports outside India; and

b) DG sets intended for the purpose of sample and not for sale in India.

3.2 Requirement of Certification

Every manufacturer or importer (hereinafter referred to as "supplier") of DG set

(hereinafter referred to as "product") to which these regulations apply must have valid

certificates of Type Approval and also valid certificates of Conformity of Production for

each year, for all the product models being manufactured or imported from 1st July, 2003

with the noise limit specified in paragraph 1.

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3.3 Sale, import or use of DG sets not complying with the rules prohibited

No person shall sell, import or use of a product model, which is not having a valid Type

Approval Certificate and Conformity of Production certificate.

3.4 Requirement of Conformance Labelling

i) The supplier of the 'product' must affix a conformance label on the product meeting the

following requirements:

(a) The label shall be durable and legible,

(b) The label shall be affixed on a part necessary for normal operation of the 'product' and

not normally requiring replacement during the 'product' life.

ii) The conformance label must contain the following information:

(a) Name & address of the supplier (if the address is described in the owner's manual, it

may not be included in the label),

(b) Statement "this product conforms to the Environment (Protection) Rules, 1986",

(c) Noise limit viz. 75 dB(A) at 1 m

(d) Type approval certificate number

(e) Date of manufacture of the product

3.5 Nodal Agency

i) The Central Pollution Control Board shall be the nodal agency for implementation of

these regulations.

ii) In case of any dispute or difficulty in implementation of these regulations, the matter

shall be referred to the nodal agency.

iii) The nodal agency shall constitute a Committee to advise it on all matters; including

the disputed matters, related to the implementation of these regulations.

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3.6 Authorised agencies for certification

The following agencies are authorized to carry out such tests as they deem necessary for

giving certificates for Type Approval and Conformity of Production testings of DG sets

and to give such certificates:

i) Automotive Research Association of India, Pune

ii) National Physical Laboratory, New Delhi

iii) Naval Science & Technology Laboratory, Visakhapatanam

iv) Fluid Control Research Institute, Palghat

v) National Aerospace Laboratory, Bangalore

3.7 Compliance and Testing Procedure

The compliance and testing procedure shall be prepared and published by the Central

Pollution Control Board, with the help of the certification agencies.

PART I

  EMISSION LIMITS, APPLICABILITY AND OTHER REQUIREMENTS

The Environment (Protection) Second Amendment Rules, 2002, vide notification

no. G.S.R. 371 (E), dated 17th May, 2002, at serial no. 95, prescribes emission

limits, applicability and other requirements for new diesel engines (up to 800

kW) for genset applications. The notification is reproduced here as such.

95. EMISSION LIMITS FOR NEW DIESEL ENGINES (UP TO 800 KW)       FOR GENERATOR SETS (GENSETS) APPLICATIONS

1. Emission Limits

The emission limits for new diesel engines up to 800 kW, for gensets

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applications shall be as given in the Table below :

TABLE

Capacity of diesel engines

Date of implementation

Emission Limits(g/kw-hr) for

Smoke Limit(light

absorption coefficient, m-1) (at full

Test cycle

NOx HC CO PMWeighting%

Upto 19

kw

1.7.2003 9.2 1.3 5.0 0.6 0.7 100

75

50

25

10

 

 

 

1.7.2004 9.2 1.3 3.5 0.3 0.7

>19 kw

upto 50

kw

1.7.2003 9.2 1.3 5.0 0.5 0.7

1.7.2004 9.2 1.3 3.5 0.3 0.7

>50 kw

upto 260

kw

1.7.2003 9.2 1.3 3.5 0.3 0.7

>260 kw

upto 800

kw

1.7.2004 9.2 1.3 3.5 0.3 0.7

 

2. Applicability

These rules shall apply to all new diesel engines for genset applications

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(hereinafter referred to as ‘engine’) manufactured in India and all diesel

engines for genset applications and diesel gensets (hereinafter referred

to as ‘product’), imported into India, after the effective date:

Provided that these rules shall not apply to :

a. any engine manufactured or engine or product imported for the

purpose of export outside India, or;

b. any engine or product intended for the purpose of sample only and

not for sale in India.

3. Requirement of certification

Every manufacturer of engine or every importer of engine or product

must have valid certificates of Type Approval and certificates of

Conformity of Production for each year, for all engine models being

manufactured or for all engine or product models being imported, after

the effective date with the emission limit as specified in paragraph 1.

4. Sale, import or use of engine or product not complying with these rules

No person shall sell, import or use of an engine or a product which is not

having a valid Type Approval certificate and Conformity of Production

certificate as per paragraph 3.

5. Requirement of conformance labelling

i. All the engines (individually or as part of the product) shall be

clearly engraved ‘Genset Engine’ on the cylinder block.

ii. The engine or the product must be affixed with a conformance

label meeting the following requirements:

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a. the label shall be durable and legible;

b. the label shall be affixed on a part necessary for normal

operation of the engine or the product and not normally

requiring replacement during the life of the engine or the

product.

iii) The conformance label must contain the following information:

a. name and address of the engine manufacturer or the

engine or product importer (if the address is given in the

owner’s manual, it may not be included in the label);

b. statement that ‘this engine or product conforms to the

Environment (Protection) Rules, 1986;

c. type approval certificate number

d. date of manufacture of engine or in case of import, the date

of import of the engine or the product.

6. Compliance with BIS specifications

All engines up to 20 kw (individually or as part of the product) shall carry

ISI mark and meet relevant BIS specifications ( IS 10001).

7. Nodal agency

i. The Central Pollution Control Board shall be the nodal agency for

implementation of these rules.

ii. In case of any dispute or difficulty in implementation of these rules

the matter shall be referred to the nodal agency.

iii. The nodal agency shall constitute a Committee to advise it on all

matters, including the disputed matters, related to the

implementation of these rules.

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8. Authorised agencies for certification

The following agencies are authorized to carry out such tests as

they deem necessary for giving certificates of Type Approval and

Conformity of Production tests for Diesel engines and to give such

certificates:

i. Automotive Research Association of India, Pune

ii. Vehicle Research and Development Establishment, Ahmednagar.

 

9. Compliance and testing procedure

The compliance and testing procedure shall be prepared and published by the

Central Pollution Control Board with the help of the Certification Agencies.

10.Fuel Specification

The specification of commercial fuel applicable for diesel gensets

shall be the same as applicable for commercial HSD (High Speed

Diesel) applicable for diesel vehicles in the area, from time to time.

Source : http://www.cpcb.org

1.2 COMPANY PROFILE:

Usha International Ltd.

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Usha International is an associate company of the Siddharth Shriram Group. Its

philosophy and work culture finds inspiration in the vision and pioneering spirit of the

reputed Shriram Group. Usha International has been at the forefront of the country’s

economic and corporate growth for more than 50 years. It has been the marketing

company for a large number of products manufactured by other group companies and has

been reaching out to people in the remotest corners of the country and the world.

UIL is the largest Consumer durable marketing company of India with its brand “USHA”

being a household name among Indian consumers since the pre-independence period. UIL

is basically a distribution company except for few of its products, which it manufactures.

The brand “USHA” is registered with the Jay Engineering Works (JEW) which is an

affiliate of UIL and a principle vendor for Fans and fuel injection systems.

Product range :

Fans

Sewing Machines

Home Appliances

Refrigeration Equipments

Inverters

Power Products (includes Diesel engines, Gensets, Pumps etc.)

Auto Products.

Except for the Fans and the refrigeration equipments, all the other products are sourced

from various vendors and then distributed through its channels. The Fans and the Fuel

Injection systems are manufactured at the JEW factories at Kolkata and Hyderabad while

the refrigeration equipments factory is in Faridabad, Haryana. The product stable includes

brands imported from abroad – especially from China.

I. Electric Fans

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Electric fans are primary bread earner for the company with nearly 200 Crore of topline

contribution. Fans are one of the oldest business lines of UIL. UIL do over 160 Models of

fans, in different sweeps, shapes, sizes and application. UIL sources fans from its group

company, JEW and its units: HEI and UFI.

The total fan industry of the country is valued at about Rs. 3.3 Crores with the

Unorganized market commanding 55% of the pie and the organized being 45%.

The organized segment is very competitively shared by all the big names as follows:

Company Mkt. Share in 04 – 05

(%)

Mkt. Share in 05 – 06 (%)

Bajaj 13 13

Havell’s 5 7

Ortem 2 3

Usha 20 18

Orient 17 17

Crompton 21 23

Khaitan 11 10

Polar 11 9

Market size

(Rs Cr.)

1.37 1.50

It is evident from the above figures that the market leader is Crompton which has

increased over the last year while the performance of Usha has taken a beating with its

market share going down by 2% from the previous year. This is mostly because of the

decrease in the export contribution and the competitors eating up the market with better

design fans in the premium segment.

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But the potential threat lies else where. The growth of Havell’s in the Fan segment is

tremendous because of the fact that Havell’s is a very recent entrant in the industry, just 3

– 4 years ago. The critical factor of Havell’s success in such a short period of time is its

distribution network. Havell’s is in the electrical goods market for a considerable period

of time now and already has an established and very strong dealer network. Havell’s is

using these dealers to sell its fan – in the standard and premium segment, which has

benefited them immensely. And as per market experts, Havell’s is the company to look

for in the near future as a very serious competitor for all the established companies.

II. Sewing Machine

Sewing machine is the oldest product line of UIL. Earlier the sewing machines were

sourced from JEW, but lately, since JEW has stopped production of Sewing Machines,

UIL is sourcing Sewing machines from different vendors, generally in Ludhiana. UIL is

also marketing Jenome range of Sewing machines in collaboration with Jenome of Japan.

Total size of sewing machine in India is 220 Thousands*/Number/ Month. Market

being segmented as follows

(* - the number being equal to the number of the “khols” or the body of the SW m/c being

produced at Ludhiana by different vendors, the only location for all the SW m/c

manufacture).

St Stitch 80% (176.5 T/N/M)

LIM 18% (40 T/N/M)

Semi auto zig zag 1% (2 T/N/M)

ZigZag imported 1% (1.5 T/N/M)

Market share vis-à-vis Competitors

Usha 16%

Singer 4%

Laxmi 2%

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Pooja 3%

Relson 3%

Revo 3%

Novel 2%

Others 67%

III.Water Cooler and Air Conditioner

Total Market share of water cooler industry is 43000 per year. Blue Star is the market

leader with 36%, and voltas 29%. Sriram has 13% share in the industry.

A different kind of water coolers, called bottle coolers, used as dispenser for mineral

water are growing rapidly which has a market of 50000 per year and generally catered by

imported machines.

IV. Inverter

Inverter are solution to problem of frequent powercuts in northern India. According to a

conservative estimate, there will be demand for more than more than 15 lakh unit per

year. Today, the major player is Sukam with 31 % market share, followed by Microtek,

and luminous. Usha has a mere 2% market share.

Inverters are available in the following categories:

300 VA – Single battery, 240W

600 VA - -//-

800 VA - -//-, 640 W , 60%-65% of market

1400 VA – 2 batteries

2500 VA – 4 batteries

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V. Appliances

Usha caters to this segment of market with Usha Lexus range of appliances, which are

sourced from Usha Sriram Limited. Total market of appliances is 2350 Crore, in which

organized is 36% and unorganized is 64%.

The share of the market is as follows:

Bajaj 19%

Philips 11%

Kenstar 11%

Usha 10%

Maharaja 8%

Recold 7%

Venus 5%

Symphony 5%

Inalsa 4%

Sumeet 4%

Others 12 %

Only Usha has the complete range of appliances whereas other players are present in just

one or two product categories such as Inalsa is present in food processor and JMG

segment only. Similarly Symphony is doing only room coolers.

Total market according to product category

MG 27%

JMG 6%

EI 7%

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SDS 3%

RC 11%

SWH 14%

Wet Grinder 10%

Food Processor 6%

OTG 3%

Others 13%

Where as contribution of different product categories in Lexus for Usha are as follows:

MG 12%

JMG 7%

EI 11%

SDS 3%

RC 25%

SWH 19%

Heating appliance 10%

Others 13%

From above figure we can conclude that, we are excellent in Room coolers, heating

appliances. Appliances business is one of major thrust area for UIL, as it has complete

range of appliances and has lot of potential. UIL is trying to fill the gap with new models

to increase the penetration.

Power Products :- Power products is the division of Usha headed by Mr. Mahendroo. It

consists of 3 distinct segments….namely..

Pump sets—Both Diesel and Kerosene

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Electrical--- Mini Monoblock Pumps, Electric Monoblock Pumps and Submersible

Pumps

Gensets--- Large and Medium Capacity Canopy generators

In diesel Pump sets the market is 236000 per year and the organized sector takes 113000

of it and the unorganized 150000/year

In kerosene pumps the market size is 97000/ year..the main players are Honda with 36%

and Villiers with 17%, Usha’s share is 8%

In MMB’s the unorganized sector leads with 33% share and Usha and Crompton are

matched with 20% each shares

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1.3 INDUSTRY PROFILE

Market Size and share in the power generation segment for FY 0304 & FY 0405 is as

follows:

Manufacturer 03-04 Market Share 04-05 Market Share

KOEL 14000 45 17500 38

CUMMINS 11500 37 17000 37

MAHINDRA 450 1 5000 11

LEYLAND 2000 6 2400 5

GREAVES 1200 4 2000 4

CATERPILLAR 400 1 600 1

Others 1900 6 1500 3

Total 31450 46000

Complementors:

A player in the industry is a complementor to the organization’s product if customers

value the organization’s product more when they have the other player’s product/ service,

than when they have only the organization’s product/service.

In power generation segment, battery, fuel tank, radiator, etc. are the complementors,

since with these products, consumers can value the engine. In other segments, it is other

equipments’ components which act as complementors.

Influencers:

Influencers generally operate between the industry and its suppliers and buyers. In

engines industry, channel financers act as influencers. Channel financers are those banks

that provide finance to OEMs and dealers to purchase engines from the manufacturer.

Channel financers can influence buyers to purchase from another manufacturer by their

terms and conditions.

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MAJOR COMPETITOR:

Kirloskar: Kirloskar : Diesel Power

Generator Manufacturers in India

Kirloskar pioneered the Engineering industry in

India with the introduction of India's first Iron

Plough in 1988,first Electric Motor, first Pump

and first Diesel Engine in 1946. Always a

socially conscious group, this philosophy finds

its presence in the designing our products. Kirloskar Eco friendly Power

Generation Sets are first in the world to meet the Central Pollution Control

Board (CPCB) norms issued by Ministry of Environment & Forests,

Government of India. Kirloskar's Power Generators are thus well equipped to

satisfy the most stringent norms set in the industry.

On the quality front the power generators are of the best quality to have

received the type approval from ARAI for emission compliances. With

continuous up-gradation we have ensured total quality, a fact proven by the

ISO 9001 certifications for Quality Management Systems. On the

environmental front we have certified for ISO 14001 for Environmental

Management Systems for our plant at Pune.

Few characteristics of the Kirloskar Power generator sets -

Ready to use generator sets A warranty of 24 months from the date of the DG

set supply or 5000 normal operating hours whichever is earlier

Lowest Life Cycle Costs

High generator set availability

Eco friendly options available

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Product Range-

The various Diesel Generator sets manufactured by Kirloskar are the KGPI

series 15KVA to 600KVA and under the collaboration with SEMT-Pielstick in

the range of 2000 KVA to 6375 KVA.

Product Usage-

Kirloskar Green engines are used in industrial, agricultural, construction,

power generation as well as marine applications.

MAJOR DEALERS:

Bhaskar:

BHASKAR  POWER   PROJECTS (P)  LTD. is a Pioneer in manufacturing Generating Sets.

After graduating  as an  engineering from BITS, Pilani in 1971, Mrs. Chandralekha Bhaskar headed Marketing Divisions of leading OEAs of Kirloskar Cummins of their times. In 1988-89, she set up assembly plant at Noida and has been OEA of Cummins, Kirloskar Oil Engines and Leyland since then.

The other Director, Dr. Vinay Bhaskar is Ph.D from University of Delhi in Modernisation and Industrial Systems with experience of 32 years in industry. 

The company is ably supported by a team of talented and experienced engineers who have long and varied exposure in GENSET industry for 10 to 20 years with specialisation in diverse engine-alternator configuration.

The company has the distinction of assembling 5 to 1250KVA GENSETS with approvals of Defence, Air Force, NSIC, Petroleum Corporation, TELCOM, ISRO, SIDBI, RAILWAYS, CSIR, NRSA, Roof Top Installation,

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Silent and mobile sets, PLC based auto synchronised sets with complete data logging facilities and GENSETS with remote radiators of Heat Exchanger Cooling have been installed in various parts of the country.

A sound state-of art assembly plant was also started in DAMAN in 1996. Equipped with latest process equipments, the plant has adequately streamlined process flow, with UPF load bank and cooling towers to test 1 MW GENSET on full load, both in H.E. & Radiator Cooling arrangement. The packaging plant has a tool room, equipped with Lathe, Drills, Slotter, Sheet Cutting, Welding, Grinding, Painting and Hub Heating facilities. Complete records and tools are maintained to ascertain highest standard of tolerance. Sound levels, vibration tests, inductive transformer, alignment gauges provide necessary support in the quality systems.

A second unit, Accredited with ISO:9000 started in 2000 and has capacity to produce 300 DG sets per month, The plant has latest CNC based technology to manufacture acoustic controlled (canopy house) Generator sets for all applications.  

The manufacturing staff is provided periodic training at Pune, Stamford and Kirloskar plants at Ahmednagar and Bangalore respectively and by other engine and alternator manufactures at company's Daman works.

Since May 2000 company is exclusive GOEM of Kirlosker oil engine 10L, Pune, Countries largest producer of Diesel engine.

The Central Administrative and marketing office operates at NOIDA IN U.P. which is just 12 KMs from Connaught Place/Nehru Place/New Delhi. There are five Regional offices located at Lucknow, New Delhi, Ludhiana, Ahemedabad & Jaipur. Each is headed by Vice-President or Area Manager marketing and supported by team of Sales Engineers, Service & commissioning groups. 

27

The local branches cover different zones form Udaipur, Jodhpur, Daman, Karnal, Bareilly, Chandigarh, Allahabad, Surat, Rajcoat, Dehradoon, Kanpur, Agra, Varanasi 

The company has been oragnising training facilities for its customers at Pune and conducting seminars and product appraisals at different town. After sales services are the key areas of strength with Senior Engineers available all round the year to supplement service team of engines and alternators manufacturers.

The company has achieved sales of over 30000 DG sets till December 2003 and targets to manufacture 4000 GENSETS in 2004-05.

Since inception, the company directly procures all engines and alternators from the respective manufacturers as this enables better co-operation and effective product support.

Sudhir:

Sudhir today is the leading name in the powergen business for all gensets in the range of

15-2,000 KVA in single units in synchronising mode, power with cummins prime

movers.

The group forged a unique position for itself with its commitment to quality and complete

customer satisfaction covering a spectrum of service for over three decades.

The organisation has provided world class products to the Indian Industry.

Sudhir Group came into existence in 1973 and has today forged a unique position for itself through its commitment made towards quality & complete customer satisfaction. Covering a spectrum of services including power generation, distribution, protection, control & automation for over three decades the company has provided world class services & products to the industry. Driven through a tireless & unstinting desire for excellence in every field, the organisation has achieved an enviable position by a programme of continious improvement of quality, consistent growth, productivity & profitability,

28

customer goodwill & employee empowerment. Converting every challenge into an opportunity, we have garnered the market forces of liberalisation, competition and globalisation through stage-of-the-art facilities & a highly dedicated and motivated team, thus creating new benchmarks in quality, speed & reliability.

29

2. RESEARCH METHODOLOGY

Marketing Research

Marketing Research is a systematic and objective identification, collection, analysis,

dissemination, and use of information for the purpose of assisting management in

decision making related to the identification and solution of problems(and opportunities)

in marketing.

The researcher has used

Problem Identification Research

2.1 Scope of the study:

The study was focused in Delhi and NCR

Time scope:: The study is based on the primary data collected over the period from

27th April 2006 to 18th May 2006.

The study is focused on small and medium size gensets i.e.; 5kva to 60kva.

Cellular companies were not taken in survey.

2.2 Research Design:

Research Design is the framework or blueprint for conducting the marketing research

project. It specifies the details of the procedures necessary for obtaining the information

needed to structure and/or solve marketing research problems.

Research Design used in the project is Descriptive Research.

2.3 Research methods:

30

There can be different Research methods namely:

Observational

Survey

Secondary Data

The Researcher has followed the survey method.

Research Instruments:

Structured Questionnaire and Interview with the respondents.

2.4 Questionnaire Design:

To collect quantitative primary data, the researcher has design a questionnaire.

The questionnaire has three objectives:

It must translate the information needed into a set of specific questions the respondent

can and will answer.

It must motivate respondents to complete the interview.

It must also minimize response error.

2.5 SAMPLING

Target Customer:

The respondent should be owner/purchaser of company which owns DGset.

The respondent will be selected in the NCR.

The respondent must have basic knowledge about the DGset.

Sampling Technique:

31

Since there was no database, Convenient sampling is done.

Sample Size:

For the survey, a sample size of 150 is taken. Actually the researcher had allocated 20

days for the survey. In these 20 days, 150 respondents were interviewed and asked to fill

questionnaires. The break-up is as follows:

Delhi: (52)

Noida: (35)

Ghaziabad (32)

Faridabad (15)

Gurgaon (16)

32

Discussion of the Questionnaire

Qs.1-5 is concerned with the personal information of the owner/purchaser of DGset.

Qs.6 Gives information about the Brand owned by the interviewer and also the power

rating. Thus it could be termed as a classification Qs.

Qs.7-8 seeks to find out which is the most important attribute the interviewer saw while

finalizing the Dgset.

Qs.9 this question provides points to each of the attributes that the interviewer thinks

are important to him/her in a Dgset.

Qs.10 This question is in the form of a matrix between the various attributes of DGset

and the various brands available in the market. Thus it provides a good

comparison between various brands on each of the attribute.

Qs.11 it gives the comparison between various brands of diesel engine available in

market and also checks for any discrepancies in the answer given in the 10th Qs.

Qs.12 This Qs gives the average no. of hours the DGset are being used in NCR, thus

helps in determining the demand.

Qs.13 This Qs seeks to find out the satisfaction level of the interviewer.

33

3. ANALYSIS

Which Brand of DGSet you are using currently?

29%

9%13%4%

45%

kirloskarashok leylandcummins

caterpillarothers

34

Which of the following MOST influenced your purchase of DGSet?

33%

44%

2%11%

10% brand of DG SETbrand of enginebrand of alternator

referenceword of mouth

If by REFERENCE, then by whom it was referred

12%

18%

6%64%

yellow pages

builders/contractorsarchitect

others

35

Rate the following factors on a scale of 1-10 according to the IMPORTANCE

Given by you in a DGSet?

130421%

112318%

137221%

85313%

68611%

99316%

engine

alternator

after sales service

maintenance

Overall design /Aesthetics

fuel efficiency

Brand-wise comparsion of different attributes of DG SET

0200400600800

10001200

Usha

Kirlosk

ar

Ashok L

eylan

d

Cummins

Caterpilla

rLo

cal

EngineAlternator

After sales ServiceMaintenanceOverall Design

Fuel Efficiency

36

perception of various diesel engine brands.

468, 13%

1018, 27%

560, 15%962, 26%

385, 10%336, 9%M&M

kirloskarashok leylandcummins

caterpillarothers

usage of DG SET.(in hours )

0 to 1 2%

1 to 319%

3 to 667%

6 +12%

0 to 1

1 to 33 to 66 +

37

Would you recommend your existing DGSet Brand’s services to colleagues or

contacts within your industry?

114

31

50

2040

60

80100

120

yes no not sure

38

PESTEL Analysis:

Political Factors:

P1: Central government has declared that agriculture, road construction and housing will

continue to be their priorities. This will ensure the demand of engines in these segments.

P2: Announcements by States of free supply of electricity to farmers will affect the sale

of generating sets in rural areas.

P3: Value Added Tax (VAT) regime brought in effect from 1 April 2005 has reduced the

costs of manufactures, but they still have to pay octroi.

P4: Government initiatives to encourage exports will increase the exports of engines.

Economic Factors:

E1: GDP grew by 7.4 per cent in the first quarter and 6.6 per cent in the second quarter of

the current year. This also has good effect on the economy as whole.

E2: Industrial sector grew by 8.4 per cent in first three quarters of 2004-05 which means

that the manufacturing sector is booming.

E3: Inflation is 5% that is rise in prices of goods is not very much.

E4: Power deficit to increase, hence there will be demand for generating sets.

39

E5: Thrust on investments in infrastructure & construction sector continues, hence

demand for earth moving equipments will increase, thereby increasing the demand for

engines. Eg NHDP as on Jan 01, 2005 is:

Source: NHAI website

E6: IT-enabled Services sector to grow at CAGR of 38%, hence generating sets are

required for stand-by power.

E7: Investments in telecom infrastructure likely to be Rs.1030 billion over the next 5

years. This will also impact the sales of engines, as generating sets are required for

generating power in the base terminal stations of the network tower.

40

E8: Growth in retail banking to be at a CAGR of 10-12%, hence generating sets are

required for stand-by power. Expansion program of 05-06 of some banks is:

Source: KOEL

E9: Raw Material (Steel and non-ferrous metals) cost increase of 60% to 70%, which has

also made engines costly.

41

E10: Rising diesel costs which will affect sales of engines as diesel is used as fuel in

engines.

E11: Cheap imports from China will affect the sale of engines.

Socio-Cultural Factors:

S1: Per capita income of India has increased to US$534.

Source: www.ibef.org

S2: Lifestyle of people has changed; hence there is demand for housing and

entertainment. Because of this, sales of engines are affected, as engines are used in

construction equipments and also in generating sets as source of stand-by power.

S3: Bank financing has increased, which helps customers to buy gensets and hence,

demand for engines has increased.

Technological Factors:

T1: Research and technology up-gradation has become necessary to meet stringent

emission standards. Unless engines comply by these regulations, their sales get affected.

T2: As diesel costs have increased, hence there is a shift from using diesel to using gas as

an alternative fuel. This causes pressure on manufacturers to design engines using gas as

fuel.

T3: New products that are less material intensive are built so that rising raw material

(steel & non-ferrous metals) doesn’t affect the prices of engines.

T4: Changes due to Information Technology have caused changes in back-end and front-

end supply chains. ERP system is used in most of the companies to process orders and to

integrate all functions of the organizations.

42

Ecological Factors:

EC1: Emission and noise

regulation by Ministry of

Environment and Forest

concerning generating sets

regulates engine

manufacturers to manufacture

engines which comply with

these regulations.

All these factors are important to this industry. But not all the factors will have significant

impact on the organizations in the industry. Hence, we will use impact matrix to

determine those factors:

Impact on Business

Probability of

Impact

High Medium Low

High P2

E4,5,6,7,8,9,10,11

E1,2 P3,4

E3

EC1

Medium T1,2 P1

S2, T3

S1,3

T4

I1,2

Low ------- ----- -----

43

Hence, critical factors (having high probability and high impact) derived from the

external analysis are:

Factor 2003-04 2004-05 2005-06 Favourab

le

Unfavo

urable

Free supply of

electricity

to farmers

No free

supply

Free

supply

Free supply √

Power deficit

(Source: Mr. Jeetendra

Shende, KOEL)

Deficit of

26475 MW

in 03-04

Deficit of

28272 MW

in 04-05

Deficit of

30084 MW in

05-06

√

Investments in road

infrastructure

and construction

sector

Sector

started

getting

attention

High

investment

s

Investments

likely to

continue

√

Growth in services

sector

Medium

growth

High

growth

Expected to

grow by 60%

√

Investments in

telecom

Infrastructure

13 million

subscribers

in 0304

35 million

subscribers

in 0405

63 million

subscribers in

0506 & likely

to grow

√

Growth in retail

banking

Medium

growth

High

growth

High growth

to continue

√

Raw material prices Small

increase in

prices

Steep

increase in

prices

May increase

further

√

Diesel costs Small

increase in

Increase in

prices

Further

increase in

√

44

prices prices due to

increase in

global oil

prices

Cheap imports from

China

Less

imports

Imports

have

increased

in small hp

engines

Imports may

further

increase in all

segments

√

4.FINDINGS:

USHA is seen as a new entrant in DGsets. Hence, people perceive all the problems which

are encountered by a new entrant in USHA.

DGset customers in NCR look for the following attributes:

A strong after sales service, since it involves diesel engine

so all the maintenance headaches are to be solved by

company itself.

The Dgset should have a good Brand image, the image of

the DGset’s brand as well as the image of the Brand of the

diesel engine both play a major role

Brand of the alternator is also necessary

Easy Availability of cheap spare parts and mechanics

Less repair time and cost

Operator Safety

45

Easy installation

Overall design and aesthetics need to be customized

according to the customers requirement

CRITICAL FACTORS :

Strong service back-up:

Since engine is a product that is used very roughly, hence it requires timely

and correct service. Hence, this industry requires strong service back up.

Differe ntiation of engine, in terms of brand, customer service etc.:

Since the product i.eDGset is a differentiated product but it sells. engine is not

a differentiated product, hence companies require brand heritage, strong and

reliable customer service for differentiating themselves.

Threat of new entrants:

o Capital requirements are high, as manufacturing engines is a highly capital

intensive business. Hence, threat of new entrants is low.

o Switching costs are high because after investing huge capital, switching

business is not possible. Hence, threat of new entrants is low.

o Control of distribution channels is high, as the relationships with the

channel partners are very old and very strong. Hence, it is very difficult for

a newcomer to establish equal and strong distribution channels so early.

Hence, threat of new entrants is low.

o Profit is moderate. Hence, threat of new entrants is medium.

o Strong service back up is required, as engine is a product which has a very

usage. Thus, it requires a strong service back up. Hence, threat of new

entrants is medium.

46

o Product differentiation is moderate, since the basic product is same. It is

differentiated only by brand heritage, customer relationships and service.

Hence, again threat of new entrants is medium.

o Minimum efficient scale of production is high relative to market that is

scale of economies is large. Thus, threat of new entrants is low.

47

Intensity of Competitive Rivalry:

o Number of competitors is medium. The major players and their respective

market shares are:

Manufactures Market Share

Cummins India 24.31

KOEL 17.19

Greaves Cotton 11.06

Simpson & Co. 7.22

Ashok Leyland 2.76

Swaraj Engines 2.74

Imported 16.80

Source: CMIE Reports

o Industry growth rate is low as it is 10.7% (Source: CMIE Reports). It was -

0.7% last year, as the economy was not as good as it is this year. Hence,

this shows that the industry depends a lot upon the state of the economy.

Hence, the rivalry is moderate.

o Fixed costs are high, since large portion of investment goes into building

plant and fixing machines. Hence, fixed assets are high and the

competitive rivalry is low.

o Product differentiation is moderate, since the basic product is same. It is

differentiated only by brand and customer service. That is why, rivalry is

moderate.

o Exit barriers are high because of the large capital investment; which makes

the rivalry moderate.

Hence, competitive rivalry is moderate in the engines industry.

.

48

Threat of substitutes:

o Invertors:

The performance of invertors has increased and their prices have also

reduced. In lower ratings of upto 6 kW, the generating set market is

steadily shrinking.

o Gas fuelled generating sets:

Since gas is available at economical price, power generated from gas is

usually lower in cost. With the advent of technology, gas can be

supplied all over the country at lower costs, which will put pressure on

generating sets running on diesel engines

Hence, the threat of substitutes is high in power generation segment.

Network of distribution channels:

Vast network of distribution channels is an important requisite in this industry, as

presence of more and strong distribution channels helps in the pre-purchase and

post-purchase situation.

Technology used for manufacturing engines:

The technologies keep on changing in this industry due to environment friendly

norms, emission norms, sound free working, etc. Hence, technologies used for

manufacturing engines become very important

Hence, it can be said that the network of dealers, brand heritage and efficient

customer service are the core competence for USHA to look upon.

49

5. LIMITATIONS OF THE STUDY AND THE SCOPE OF

FUTURE RESEARCH

The study suffers from the following limitations:

The study is limited only to the Delhi region

Limited time period of two months.

Inability or unwillingness on the part of some respondents to answer all the

questions asked.

The scope of future research:

Further research could be done for choosing the best promotion strategy for the

promotion of DGsets by UIL

50

6. SUGGESTIONS:

Repair time for the customer should be minimum.

Make customer aware about the ISO9001 certificate.

Can provide finance or give on installment basis.

Since its illegal to run a DGset without Sound proof canopies, thus can educate

potential and existing users of DGsets.

After sales service is of prime importance, thus a good maintenance team should

be formed for DGsets.

Offering cost-effective models in all ranges of DGsets.

Leveraging the fuel efficiency of engines as a selling proposition.

To put pressure on competitor margins by positioning USHA offering with

affordable price and highlighting compactness of our offering

Deployment of additional service dealers in under represented areas

Further strengthen the partnership with the OEMs in various applications

USHA can reduce the price of its DGsets by using technology to manufacture less

costly DGsets.

Power deficit will continue to increase by enormous 10-15%, which will again

increase the sales of generating sets, so a big potential in the market for DGsets.

USHA can follow penetration by decreasing its prices or employing stronger sales

force.

No Frills Strategy: USHA can focus on Low Price, Low Perceived Added Value,

Focus on price-sensitive market OR Focused Differentiation: USHA can also

go high perceived value justifying high price.

Tie-up with or Acquisition of diminishing competitor

USHA can go for geographic expansion of untapped markets and even

manufacturing generators for retail customers i.e generators for household

purposes.

51

Bibliography

1. Marketing Research by Naresh Malhotra (4th Edition)

2. Marketing Management by Philip Kotler (11th Edition)

3. www.ushainternational.com

4. www.sudhirgensets.com

5. www.cumminsindia.com

6. http://kirloskarapps.kirloskar.com

7. www.cpcb.nic.in

8. www.indianindustry.com

52

ANNEXURE

FORE SCHOOL OF MANAGEMENT

SUMMER TRAINING PROJECT

Questionnaire

Q1. Name :

Q2. Designation :

Q3. Company name and address :

Q4. Contact number :

Q5. Email address :

Q6. Which Brand of DGSet you are using currently? (Kindly specify the power)

a. Usha

b. Kirloskar

c. Ashok Leyland

d. Cummins

e. Caterpillar

f. Any other(________________) please specify

Q7. Which of the following MOST influenced your purchase of DGSet?

a. Brand of the DGSet

b. Brand of the engine

c. Brand of the Alternator

d. Reference

e. Word of mouth

Q8. If by REFERENCE, then by whom it was referred:

a. Yellow pages

53

b. Builder / Contractor

c. Architect

d. Any other(________________) please specify

Q9. Rate the following factors on a scale of 1-10 according to the IMPORTANCE

Given by you in a DGSet?

a. Engine

b. Alternator

c. After sales service

d. Maintenance

e. Overall design / Aesthetics

f. Fuel Efficiency

g. Noise level

h. Installation

Q10. In the table below, please rate the brands on the following attributes on a scale

Of 1-10 :

Attributes

of DGSet

Brands of DGSet

Usha Kirloskar Ashok Leyland Cummins Caterpillar Local

Engine

Alternator

After sales Service

Maintenance

Overall Design

Fuel Efficiency

Noise level

Installation

54

Q11. On a scale of 1-10 rate the following brands of the DIESEL ENGINES:

a. M&M

b. Kirloskar

c. Ashok Leyland

d. Cummins

e. Caterpillar

f. Others

Q12. On an average, what is the usage rate of DGSet per day in hours?

a. 0 – 1 hr

b. 1 – 3hrs

c. 3 – 6hrs

d. > 6hrs

Q13. Would you recommend your existing DGSet Brand’s services to colleagues

or contacts within your industry?

a. Yes

b. No

c. Not sure

Thank You for sparing your time to complete this survey.

55