Summer Training Report

On
A study on Market Potential of Bajaj Iron in Bhubaneswar &
Cuttack Market
At
Bajaj Electricals Limited
Bhubaneswar

Saikat Modak
Roll No. 08dm041
Batch – 2008-10
 Under the guidance of

Company Guide Institutional Guide

Mr. Dhananjaya Mishra (Area Manager) Prof. Tanmoy De
& Mr. P.K Tripathy (Sales Manager)
Research Methodology:
Nature of Study: Quantitative

Research Approach: Market Survey on Retailers

DataSource: Primay source

Sample Size: Sample Size is 79.

Respondent Coverd: In Bhubaneswar 52 retailers has been covered and in Cuttack 27 retailers has been covered.

Methodology: Descriptive Study, Survey through questionnaire on the retailers in Bhubaneswar and Cuttack market.

Research Approach: Survey

Research instrument: Open ended questionnaires

SamplingPlan: Stratified Sampling,

Bajaj Group

History

Bajaj Electricals Limited

SBUs of BEL:
BEL Products:
Segment Revenue:
………………RS. In lakhs…………….
2007-08 2006-07

a) Lighting 40,729.19 32,670.64

b) Consumer Durables 60,316.04 44,539.56

c) Engineering & Projects 36,271.29 30,519.35

d) Others 131.09 156.61

Sub-total 1,37,447.61 1,07,886.16

Less: Inter segment Revenue - - -

Net Sales / Income from Operations 1,37,447.61 1,07,886.16

Human Resource Development of BEL

Social Responsibility

R & D of BEL

Marketing Strategy of BEL

 Capital Structure

Period Instrument Authorized Issued Capital -PAIDUP-

Capital
From To (Rs. cr) (Rs. cr) Shares (nos) Face Value Capital
2007 2008 Equity Share 20 17.29 17285760 10 17.29
2006 2007 Equity Share 10 8.64 8642880 10 8.64
2005 2006 Equity Share 10 8.64 8642880 10 8.64
2004 2005 Equity Share 10 8.64 8642880 10 8.64
2003 2004 Equity Share 10 8.64 8642880 10 8.64
2002 2003 Equity Share 10 4.32 4321440 10 4.32
2001 2002 Equity Share 10 4.32 4321440 10 4.32
2000 2001 Equity Share 10 4.32 4321440 10 4.32
1999 2000 Equity Share 10 4.32 4321440 10 4.32
1998 1999 Equity Share 10 4.32 4321440 10 4.32
1997 1998 Equity Share 10 4.32 4321440 10 4.32
From the graph of EPS we can say profit for equity share holders
increased in each year. But it has decreased in FY07-08.
 Iron Models M.R.P (in RS.)

MX 21 Steam Iron 2495/-

MX 13 Steam Iron 2095/-

MX 15C Steam Iron 1995/-

MX 12 Steam Iron 1995/-

MX 9 Steam Iron 1595/-

MX 9C Steam Iron 1795/-

MX 7 Steam Iron 1095/-

MX 3 Steam Iron 795/-

Travel Iron TX 7 1099/-

DX 7 Iron 859/-

DX 6 Iron 799/-

New Light Weight Iron 649/-

DX 5 Light Weight Iron 699/-

DX 3 Iron 575/-

Glider Iron 649/-

Popular Iron 499/-

Auto Standard Iron 799/-

Demand Graph in Bhubaneswar
Market:

The demand of Bajaj is 54%, demand of Vijay is 17%, demand of Maharaja

is 5%, demand of CG is 5%, demand of Philips is 5%, demand of Usha is
4%, demand of LG is 2%, demand of Orpat is 3%, demand of Murphy is
0.21%, demand of Kenster is 2%, demand of Prestige is 2% and the demand
of the other locals brands is 1%.
Monthly sale of Iron in Bhubaneswar
market:
Market share for Iron in Bhubaneswar market:

Here market share of Bajaj is 48%, market share of Vijay is 16%, market
share of Maharaja is 5%, market Share of Philips is 4.5%, market share of
Usha is 3.5%, market share of Orpat is 2.2%, market share of Prestige is 2%,
market share is Kenster is 2%, market share of CG is 4.5%, market share is
LG is 2%.
Scenario Analysis for Bhubaneswar to find out the no.
of potential customer:

Bhubaneswar
Year Total Population No. of households

2001 648032 144279

1991 411542 91626
1981 219211 48805
1971 105491 23486

Growth rate for households 1971-81 52%

Growth rate for households 1981-91 46%
Growth rate for households 1991-01 37%
Now we can calculate it in two ways one is optimistic and an another is pecimistic.

In optimistic way we can assume that the growth rate of households will be 30% from 2001 to 2011.
If it will be 30% then the number of households in Bhubaneswar will be like fillowing:

Growth rate for households 2001-11 30%(assumed)

Year Total Population No. of households
2011 842441 187562

If the number of households will become 187562 in Bhubaneswar in 2011, then we can assume that the
total number of households is almost same as 2011 in 2009.

Now in pessimistic we can assume that the growth rate of households will become 22% from 2001 to
2011

Growth rate for population 2001-11 22%(assumed)

Year Total Population No. of households
2011 790599 176020

If the number of households will become 176020 in Bhubaneswar in 2011, then we can assume that the
total number of households is almost same in 2009 also.
Market Share of various model of Bajaj Iron
in Bhubaneswar:

We can see that out of that 19460 pcs Popular Iron is selling 41.8%, DX3 is selling
8.9%, MX21 is selling 0%, MX15C is selling 0%, MX3 is selling 3.4%, MX13 is
selling 0.21%, MX12 is selling 0%, MX9C is selling 0.1%, MX9 is selling 0.4%,
MX8 is selling 0%, TX7 is selling 2.6%, MX7 is selling 2.6%, DX7 light weight
Iron is selling 19.7%, New light weight Iron is selling 4%, DX5 light weight Iron is
selling 6.2%, Glider Iron is selling 4.7%.
In Bhubaneswar average annual consumption is 375.

The average selling price of Bhubaneswar is Rs.200444/-

Calculation of Market Potential:
Market Potential = (Market Share) * (Number of potential customer) * (Average annual
consumption) *(Average selling price)

For Bhubaneswar Market

Market Share = 48%

Average annual consumption= 375
Average selling price= 200444

If we go by optimistic then the number of potential customer = 187562

Then the Market Potential = 0.48 * 375 * 200444 * 187562

= Rs.6767221955040/-

If we go by pessimistic then number of potential customer will be = 176020

Then the Market Potential = 0.48 * 375 * 200444 * 176020

= Rs.6350787518400/-
Demand graph in Cuttack:

The demand of Bajaj is 47%, demand of Philips is 8.50%, demand of Vijay is

1.50%, demand of Usha is 0.8%, demand of Maharaja is 4.80%, demand of LG is
1.1%, demand of CG is 6.30%, demand of Orpat is 2.70%, demand is Kenster is
0.35%, demand of Murphy is 4.40%, demand of others local brands is 22%.
Monthly Sale in Cuttack market:

Here in Cuttack market the monthly total sale of Iron is 2947, out of that number
of Bajaj Iron is 1379, number of Philips Iron is 250, number of Vijay Iron is 44,
number of Prestige Iron is 0, number of Usha Iron is 24, number of Maharaja is
172, number of LG Iron is 33, number of CG Iron is 187, number of Orpat Iron is
80, number of Kenster Iron is 10, number of Murphy Iron is 130, number of
Others brands Iron is 639.
Market share for Iron in Cuttack market:

Here the market share of Bajaj is 47%, market share of Philips is 8.50%, market
share of Vijay is 1.5%, market share of Usha is 1%, market share of Prestige is 0%,
market share of CG is 6.4%, market share of Maharaja is 6%, market share of
kenster is 0.4%, market share of LG is 1.1%, market share of Orpat is 3%, and the
market share of others brands is 22%.
 
 Scenario Analysis for Cuttack to find out the no. of
potential customer:
The scenario analysis for Cuttack is following

Cuttack
Year Total population No. of households
2001 587182 101153
1991 445746 76788
1981 327412 56402
1971 230059 39631
We can represent these data through the following graph

The growth rate of the households is following

Growth rate for population 1971-81 30%

Growth rate for population 1981-91 26%

Growth rate for population 1991-01 24%

Now we can calculate it in two ways one is optimistic and an another is pecimistic.
In optimistic way we can assume that the growth rate of households will be 20% from 2001 to
2011.
If it will be 20% then the number of households in Cuttack will be like fillowing:

Growth rate for population 2001-11 = 20%(assumed)

Year Total population No. of households

2011 704618 121383

If the number of households will become 121383 in Cuttack in 2011, then we can assume that the
total number of households is almost same as 2011 in 2009.

Now in pecimistic we can assume that the growth rate of households will become 15% from 2001
to 2011

Growth rate for population 2001-11 = 15%(assumed)

Year Total population No. of households

2011 675259 116326

If the number of households will become 116326 in Cuttack in 2011, then we can assume that the
total number of households is almost same in 2009 also.
 Market share of various Iron model in
Cuttack:

We can see that out of that 16548 pcs Popular Iron is selling 26%, DX3 is
selling 21.8%, MX21 is selling 0.3%, MX15C is selling 0%, MX3 is selling
2.2%, MX13 is selling 0.3%, MX12 is selling 0%, MX9C is selling 0%, MX9 is
selling 0.3%, MX8 is selling 0%, TX7 is selling 0%, MX7 is selling 0.6%, DX7
light weight Iron is selling 11%, New light weight Iron is selling 13.5%, DX5
light weight Iron is selling 7%, Glider Iron is selling 16.6%.
 In Cuttack the average annual consumption is 616

The average selling price of Cuttack is Rs.322340/-

 
Calculation of Market Potential
For Cuttack Market

Market Share = 47%

Average annual consumption= 616

Average selling price= 322340

If we go by optimistic then the number of potential customer = 121383

Then the
Market Potential = 0.47 * 616 * 322340 * 121383

= Rs.11327932137614/-

If we go by pessimistic then number of potential customer will be = 116326

Then the
Market Potential = 0.47 * 616 * 322340 * 116326

= Rs.10855993292636/-
Sales Forecasting:
Sales Forecasting of Bajaj Iron.

For sales forecasting regression analysis have been used.

Sales Forecasting for Bhubaneswar market

To sales forecasting for Bhubaneswar market by using regression analysis first I assumed,

The following two equation,

∑Y = na + b∑X

∑XY = a∑X + b∑X2

X = Demand for various retailers

Y= Sale for various retailers

Then I find out ∑X and ∑Y

Then I find out X2. After finding out X2, I find out ∑X2

Here,
∑X = 19524
∑Y = 19460
∑XY = 50684220
∑X2 = 50718672

By putting the value of ∑X, ∑Y, ∑XY and ∑X^2 in those above two equation I got the following
two equation

19460 = 52a + 19524b

50684220 = 19524a + 50718672b

After solving the above two equation I got the value of the value of a and b

a = -1.2
b=1

By putting the value of a and b in the first equation I got the Demand and Sale equation

Y = -62.4 + X
 Sales Forecasting:
Sales Forecasting of Bajaj Iron.

Sales Forecasting for Cuttack market

To sales forecasting for Cuttack market by using regression analysis first I assumed,

The following two equation,

∑Y = na + b∑X

∑XY = a∑X + b∑X2

Here,
∑X = 16635
∑Y = 16548
∑XY = 37572109
∑X2= 37800651

By putting the value of ∑X, ∑Y, ∑XY and ∑X^2 in those above two equation I got the following
two equation

16548 = 27a + 16635b

37572109 = 16635a + 37800651b
After solving the above two equation I got the value of the value of a and b

a = -3.2
b = 1
By putting the value of a and b in the first equation I got the Demand and Sale equation

Y = -86.4 + X

If the demand changes then accordingly sales will also change. So now we can calculate that with
the % change of demand how much the sales will change for Cuttack market. The calculation will
be done through the above equation.