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Summer Internship Project Report on sale strategy and Market development plan to improve Leyland Deere Market share in Delhi/NCR region 7/27/2013 Leyland Deere Submitted by Nishchal Sarin BITS PILANI, MBA Department of Management Batch 2012-14 CERTIFICATE This is to certify that Mr. Nishchal Sarin, ...

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Summer Internship Project Report on sale strategy and Market development plan to improve Leyland Deere Market share in Delhi/NCR region

7/27/2013

Leyland Deere

Submitted by Nishchal Sarin BITS PILANI, MBA Department of Management Batch 2012-14

CERTIFICATE This is to certify that Mr. Nishchal Sarin, has completed his summer internship at Leyland Deere, and has submitted a report on sale strategy and Marketing development plan to improve Leyland Deere Market share in Delhi/NCR region towards partial fulfilment of the requirement for the award of Degree in Master of Business Administration from BITS Pilani. This report is the result of his own work and to the best of knowledge no part of it has earlier comprised any other report, monograph, dissertation or book. This project was carried out under supervision of Mr. Sameer Wadhwa, Assistant Vice President- Sales and Marketing.

Date:Place: - New Delhi

------------------------------Sameer Wadhwa AVP, Marketing & Sales

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ACKNOWLEDGEMENT The satiation and euphoria that accompany the successful completion of the project would be incomplete without the mention of the people who made it possible. I would like to take the opportunity to thank and express my deep sense of gratitude to my corporate mentor Mr. Sameer Wadhwa and Mr. Rajat Mathur. I am greatly indebted to both of them for providing their valuable guidance at all stages of the study, their advice, constructive suggestions, positive and supportive attitude and continuous encouragement, without which it would have not been possible to complete the project. I would also like to thank Mr. Simranjeet Singh ,who in spite of busy schedule has co-operated with me continuously and indeed, his valuable contribution and guidance have been certainly indispensable for my project work. I am thankful to Mr. T Sasikumar (VP-HR) for giving me the opportunity to work with Leyland Deere and learn. I owe my wholehearted thanks and appreciation to the entire staff of the company for their cooperation and assistance during the course of my project. I hope that I can build upon the experience and knowledge that I have gained and make a valuable contribution towards this industry in coming future.

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Table of Content S No.

Topic

Page No.

1

Executive Summary

5

2

Introduction  Need of the Study  Objective of the study

6

3

Organization Background  Backhoe Loader  Working of Backhoe Loader

7 9 10

4

Literature Review  Construction and equipment Industry a) Revenue details of CE companies b) Industry Growth Drivers c) Notable Trends d) Porter’s Five force analysis  Product specification

13 18 19 20 21 23 24

5

Competitor Analysis a) Leyland Deere Advantage

25 26

6

Research Methodology

27

7

Data Analysis a) Questionnaire Analysis using IBM SPSS

8

Conclusion

28 37 46

9

Limitations

47

10

MDP and Recommendations

49

11

References

53

12

Annexure  Questionnaire  Construction site visits

54 58

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EXECUTIVE SUMMARY The project was started on 27th of May 2013 after knowing all the relevant information related to construction equipment manufacturing industry, under the guidance of Mr. Sameer Wadhwa (AVP Marketing& Sales). The first part of my project involves the study of customer and dealers in Delhi/NCR region, then identification of their problem and helping them in order to increase sale. For this I used the method of personal interviews and questionnaires. At the same time , they were being made aware of various scheme of Leyland Deere for the quality insurance. To complete my project i visited customer located in Gurgaon, Faridabad, Sonipat and Gautam Buddha Nagar regions for better understanding of their grievances and to identify the gaps in sale process. For this I visited around 30 customers in the area, and spoke to them. I was also supposed to find out new customers and convince them to buy Backhoe loader of Leyland Deere by showing them the opportunity of getting attached with a global brand like Leyland Deere and how its product is superior to other products which are available in the market. The second part of my internship was the study of consumer attitude towards Leyland Deere in comparison to competitors like JCB, Escorts etc and to find out the factors affecting the decision of purchase of Backhoe loader. For this a sample of 30 consumers was taken as it’s a niche market and customers are less and a factor analysis was carried out to find the decision making factors. After analysing these factors a proposed marketing development plan was formulated.

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INTRODUCTION Need of studyThe project was an attempt to know the reasons behind low sale of backhoe loaders of Leyland Deere in Delhi/NCR regions. Despite of being a renowned brand i.e. Ashok Leyland and John Deere, the sale picture in Delhi/NCR region is very bleak due to stiff competitors like JCB, Escorts, and CAT etc. There is a need to revamp the company and position it all over again in the mind of the customer. In doing so firstly Brand has to be positioned competitively in the market, creating more awareness among the potential customers. Secondly a study on customer’s decision making factors is required in order to understand their priorities which can be worked upon. For this purpose a research is to undertaken to find out the market scenario. With the help of the responses given by the consumers and data analysis, the company will be able to understand its strengths, weakness, opportunities and threats. The survey report submitted by me will assist the company to take right decisions to increase the turnover and market share.

Objective of the study – The objectives of the study are the following:1. The main objective of this project is to probe the reasons behind small market share of Leyland Deere and to find out the measures that can be adopted to increase the sales. 2. To study the latest trends in construction industry. 3. To identify the issues related to backhoe loaders. 4. To get the feedback from current customers of our product. 5. To add up new customers. 6. To study Leyland Deere positioning in the mind of the consumers vis-à-vis competitors. 7. To find out the factors that affect customer’s decision to purchase Backhoe loaders. 8. Suggesting viable recommendations to be implemented in the area

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ORGANISATIONAL BACKGROUND

Founded in 1837, Deere & Company, most commonly known by its name, John Deere, is an American corporation based in Moline, Illinois, and one of the largest manufacturers of agricultural machinery in the world. Deere and Company agricultural products, sold under the John Deere name, include tractors, combine harvesters, cotton harvesters, balers, planters/seeders, sprayers, and UTVs. The company is also a manufacturer of construction equipment and forestry equipment, as well as a supplier of diesel engines and drive trains (axles, transmissions, and gearboxes) used in heavy equipment. Additionally, John Deere manufactures equipment used in lawn, grounds, and turf care, such as walk-behind lawn mowers, zero-turn lawn mowers, lawn tractors, and snow throwers. To support the core businesses, John Deere also provides financial services and other related activities. The company's slogan is "Nothing Runs Like a Deere" and has a picture of a leaping deer as a logo.

Ashok Leyland is an Indian automobile manufacturing company based in Chennai, India. Founded in 1948, the company is one of India's leading manufacturers of commercial vehicles, such as trucks and buses, as well as emergency and military vehicles. Operating six plants, Ashok Leyland also makes spare parts and engines for industrial and marine applications. It sells about 60,000 vehicles and about 7,000 engines annually. It is the second largest commercial vehicle company in India in the medium and heavy commercial vehicle (M&HCV) segment with a market share of 32%.

Ashok Leyland, the flagship firm of the Hinduja Group and the US-based John Deere announced their entry into the burgeoning Indian construction equipment business through their 50:50 joint venture, with the launch of their first product, Leyland Deere 435 Backhoe Loader, priced at Rs 23.59 lakhs (Ex-Showroom) New BrandThe new brand, Leyland Deere 435 Backhoe symbolises the coming together of two strong partners, each bringing to the association their unique individual strengths and competencies. John Deere brings in their advanced technical knowhow and vast experience in the global construction equipment space, while Ashok Leyland lends in-depth knowledge of the Indian market, proven expertise in manufacturing, sourcing and distribution, to this strategic partnership. 7 Summer Internship Report, MBA 2012-14

Redefining benchmarksThe first product from this combine, the Leyland Deere 435 Backhoe Loader has been designed to transform the nature of the construction equipment business in the country as well as redefine the way construction equipment products are perceived and used. Exceptionally well engineered and feature-rich, the 435 BHL will deliver superior value to the ever evolving construction equipment customer by addressing the critical considerations of lower operating cost, higher productivity and greater uptime. It is rugged in structure, powered by an Ashok Leyland engine of proven pedigree from the 'H' Series platform and replete with USPs including power shift transmission, best in class cabin with larger space and higher visibility, higher breakout forces and greater dig depths. In order to make sure that patrons get higher uptime, Leyland Deere 435 BHL will be supported by innovative customer care package called the CARE programme which will be delivered through the efficient Leyland Deere channel network developed. The CARE programme will include an extended warranty of a year after the first year of warranty, committed restoration time for the equipment and regular and periodic engineer visits to the customer during warranty period and also an insurance cover of Rs 2 lakhs for the customer's operator. PlantThe 435 BHL is being manufactured at Leyland Deere's brand new facility at Gummidipoondi, near Chennai. This plant incorporates globally benchmarked manufacturing processes like robotic welding, CNC cutting, state of the art paint shop to ensure the highest standards of product reliability and durability, supported by international standard quality processes and systems. ManagementChairman –Mr. V. Sumantran CEO – Mr. P. Ravishankar AVP Marketing & Sales - Mr. Sameer Wadhwa ProductsLeyland Deere

Backhoe Loader 435

Four Wheel Drive Loader

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Backhoe Loader A backhoe loader, also called a loader backhoe, digger, or colloquially shortened to backhoe, is a heavy equipment vehicle that consists of a tractor fitted with a shovel/bucket on the front and a small backhoe on the back. Due to its (relatively) small size and versatility, backhoe loaders are very common in urban engineering and small construction projects such as building a small house, fixing urban roads, etc. This type of machine is also known as a TLB i.e. Tractor-LoaderBackhoe.

Usage Backhoe loaders are very common and can be used for a wide variety of tasks: construction, small demolitions, light transportation of building materials, powering building equipment, digging holes/excavation, landscaping, breaking asphalt, and paving roads. Enhanced articulation of attachments can be achieved with intermediate attachments such as the tiltrotator. Many backhoes feature quick coupler (quick-attach) mounting systems and auxiliary hydraulic circuits for simplified attachment mounting, increasing the machine's utilization on the job site. Some loader buckets have a retractable bottom or "clamshell", enabling it to empty its load more quickly and efficiently. Retractable-bottom loader buckets are also often used for grading and scraping. Their relatively small frame and precise control make backhoe-loaders very useful and common in urban engineering projects such as construction and repairs in areas too small for larger equipment. Their versatility and compact size makes them one of the most popular urban construction vehicles. For larger projects, a tracked excavator is generally used. A backhoe loader is an interesting invention because it is actually three pieces of construction equipment combined into one unit. A backhoe loader is:  

A tractor A loader A backhoe

Each piece of equipment is suited to a particular sort of work. On a typical construction site, the backhoe operator usually uses all three components to get the job done.

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Working of backhoe Loader The Tractor The core structure of a backhoe loader is the tractor. Just like the tractors that farmers use in their fields, the backhoe tractor is designed to move easily over all kinds of rough terrain. It has a powerful, turbocharged diesel engine, large, rugged tires and a cab with basic steering controls (a steering wheel, brakes, etc.). Backhoe cabs are either completely enclosed or have an open canopy structure to give the operator protection. The Loader The loader is attached in the front and the backhoe is attached in the back. These two components serve very different functions. The loader can do several different things. In many applications, you use it like a big, powerful dustpan or coffee scoop. You usually don't dig with it; you mostly use it to pick up and carry large amounts of loose material. It's also used to smooth things over like a butter knife, or to push dirt like a plow. The operator controls the loader while driving the tractor. The Backhoe The backhoe is the main tool of the backhoe loader. It's used to dig up hard, compact material, usually earth, or to lift heavy loads, such as a sewer box. It can lift this material and drop it in a pile to the side of the hole. Basically, the backhoe is a big, extremely powerful version of your arm or finger. It has three segments:-

  

The Boom The Stick The Bucket

This arrangement is very similar to your arm. Your arm has three segments -- your upper arm, forearm and hand. The backhoe segments are connected by three joints, comparable to your wrist, elbow and shoulder.

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The backhoe moves in pretty much the same way as your arm. This design also provides extra space for the bucket when the operator curls it in with a full load. The backhoe can dig all sorts of holes, but is especially suited for digging ditches. To use the backhoe, the operator has to park the tractor and turn the seat around. The tractor component is for moving the other two components from place to place, and the operator also manoeuvres it when using the loader. The loader and backhoe components are a natural combination for all sorts of jobs. When you dig up a lot of dirt to make a ditch or any other sort of hole, you generally need a loader to either move the dirt out of the area or to fill the dirt back in once you've got the pipes, power lines, etc. in position. The most common application for a backhoe loader is this basic job digging a trench with the backhoe and then back-filling it with the loader. The Stabilizer Legs The other appendages you'll typically notice on a backhoe loader are the two stabilizer legs just behind the rear wheels. These legs are crucial to backhoe operation because they take the brunt of the weight when a backhoe is digging. Without the stabilizer legs, the weight of a heavy load or the downward force of digging into the ground would strain the wheels and tires, and the whole tractor would bounce constantly. The stabilizers keep the tractor steady, minimizing the jostling effect of digging with the backhoe. They also secure the tractor so that it won't slip into the ditch or hole. The stabilizer legs have two types of "shoes," so that they can be planted securely on both dirt and pavement. The grouser shoe side digs into the dirt for a better grip, but would tear up the pavement if you were to use it on a road. For a good grip on asphalt, the operator simply flips the rubber-padded shoe into position.

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CURRENT MARKET SCENARIO According to Construction World update, it has been projected that the present € 1.6 billion construction equipment industry in India is expected to touch about € 10.3 billion. While the current size is just a fraction of the world market, it has been growing between 10-15 % compared to the global growth of around 5%. The industry has been growing due to the large investments made by the Government and the private sector infrastructure developments. The prospects of the construction equipment industry look attractive with a projected investment of US$ 320 billion for current year. India is one among the top 10 markets for construction equipment and is one of the key international markets. Indian firms are strengthening their existing operations for catering to the growing domestic demand and are also planning to expand to tap overseas markets. At the same time international majors have ambitious plans for India considering that India’s per capita number of machines is very low at 13 machines per million compared to 396 in America and 96 in China.

Evolution of Indian Construction Industry

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Indian Construction Industry The Indian construction industry, at current prices, contributed more than US$ 91 billion [€ 62 billion] to the country’s gross domestic product (GDP). It employs more than 18 million people. Construction investments accounted for 11 % of GDP and 50 per cent of gross fixed capital formation. Construction activity has grown at 11 % over the period 2006 to 2009. Construction equipment accounts for 5 % - 24 % of construction project costs. Construction equipment accounts for 22 % of road construction costs.

Sales 2% 2% 5%

4%

Power Generation Roads Railways

27%

Telecom

60%

Residential Civil

Challenges & Opportunities in construction sector The major challenge that the construction industry faces during the next five years, is to raise its delivery capabilities with target on sectors such as transportation, housing and urban development. The planned development of infrastructure would face constraints, unless the construction industry improves the delivery potentials by addressing crucial issues and impediments by bringing in systemic changes. Productivity • R&D in the construction industry should be seen as a continuing activity, because the scientific and technological advancements are needed to strengthen and raise the technological base of the construction industry. Support to the national institutions engaged in scientific research and incentives for private sector players to undertake in-house R&D need to be provided. • Introduction of efficient technologies and modern management techniques to raise the pro...