Buying Behavior of Consumer For Sanitary Products

GROHE India Pvt. Ltd.
Summer Project Report

on
Consumer behavior of luxury sanitary ware
May – June 2009
-- Under the guidance of --

Prof. P.C.Tungare (Faculty Guide)
Anand Dixit (Company Guide)
-- Submitted by --
Jayant Singh Raghav
Ref. no. KH2008PGDMF128
Institute for Technology & Management, Kharghar, Navi Mumbai

GROHE India Pvt. Ltd.
A
Summer Project Report
On
Consumer behavior of Luxury sanitary ware
By
Jayant Singh Raghav
Under the guidance of Prof. P.C. Tungare (Faculty Guide) & Mr. Anand Dixit (Company Guide)

I.
Acknowledgement
Expressions have their own boundaries but this citation is an attempt to

acknowledge the support given to me during the tenure of project. I would like to
express my gratitude towards my Faculty guide Prof. P.C. Tungare sir, for his
timely steering. Without his valuable guidance this project wouldn’t have been
successful. I would also like to thank my company guide Mr. Anand Dixit sir,
Territory manager- Pune GROHE India Pvt. Ltd. for his prop up and
encouragement.
I am extremely grateful to GROHE India Pvt. Ltd. for giving me the

opportunity to complete this assignment in their esteemed organization. I am
thankful to Mr. Pradeep Patnaik sir, Regional sales manager for his counseling
and help in facilitating smooth execution of this project. This assignment could not
have been successfully completed without his sincere guidance & Company guide
Mr. Anand Dixit sir Territory manager-Pune. I am also appreciative towards other
interns from same company for their co-operation & sharing outlook.
Above all, I am thankful to the almighty ‘Bhagwan’ for empowering me and

ushering my way to sufficiently address my duties.

Executive Summary
This project deals specially with the behavior of end consumers of luxury sanitary
ware. Today faucets & showers are no more just the requirement for the consumer, but a
luxury commodity. India is a growing market touching world standards in sanitary market.
With the advent of local guerillas in sanitary market, competition for a new entrant is tough
in lower segment. Since upper middle class income group in South Asian countries like India
is growing very rapidly, the consumption of luxury item will also increase at a faster pace
.Indian Sanitary ware industry is worth $ 700 million.
We have focused on the brand awareness among builders, contractors, architects

and end consumer and tried to sneak into those factors which they look for while buying any
sanitary product. We also found out what are those cues and parameters which are
prompting a consumer from awareness to consideration. During this we also made some
viral advertisement to create awareness among Indian buyers. Since internet today, is the
most cost effective and extensive reach for consideration set. Amid we also studied
distribution channel for the GROHE and its competitors. Report contains detailed analysis of
distribution channel of GROHE India Pvt. Ltd. Our study area is Pune, Maharashtra. Pune is
the second fastest growing city in India with more than 350 running projects. During
Commonwealth Games-08, around 15 five-star hotels have begun construction. These facts
make this area most suitable to undertake our study.

Contents
1. Introduction
2. Grohe – A brief history
3. 4-P’s of Grohe
4. Internship Objectives & Tasks
5. Research Proposal
6. Observations
7. PCSW Analysis – Indian Sanitary ware Market
8. Suggestions
9. Appendices
9.1. Questionnaire
9.2. Research Calculations
A. Reference
B. Glossary
C. Index

1. Introduction

B athrooms and kitchens were once considered just as one portion of home where
people usually visit early in the morning to perform their daily routine. But today they
are one of the important considerations for a buyer when he buys is flat or builds one for
him. Today various sanitary companies across globe are providing innovative & creative
solutions to their consumers. Bathrooms are becoming more and more intelligent & eco
friendly which not only saves water but also gives unbelievable facility to their users.
Bathrooms are becoming comfort zone today. From faucets to showers, cisterns to
waterless urinals, each & every equipments are being designed to give more comfort.
The sanitary industry in India is neglected in early nascent stage but now is creating
news with many international players are entering into the market with their ground-
breaking out of the box solutions. Indian Sanitaryware industry is currently in its growth
stage. Indian sanitary market is currently leaded by Hindustan Sanitary Ind. Ltd. (HSIL), EID
Parry’s comes next. The other major players are Cera, Jaquar, Marc etc.The market statistics
have become interesting after the introduction of international brands into the market
through joint ventures. Name a few are Toto from Indonesia and American Standard from
Thailand, Hans Grohe ,Grohe AG both from Germany, Sanitec Group of Finland .HSIL has
roped in Hans-Grohe, Sanitec group to complete its product range.
Although market has huge potential but all International brands comprise of only
10% of total market pie. But with their presence felt in market, Indian companies are
making aggressive moves. In past 12 months Hindware has launched around 50 products.
Cera not being behind has provided its product in more than 18 colors range.
So what is it that is attracting many international brands to the country? The reasons
are high augmentation of still to be penetrated higher middle income group in the country,
& unparalleled growth of infrastructure. If words of an industry expert are to be believed
only Faucet market in India is of around $ 200 million alone. These companies’ products are
two to seven times more expensive than Indian products but in the near future they will be
setting up production unit in India also. Companies are trying to capture the emerging
market with new pioneering ideas of marketing with emphasize on customer service.
During my tete-a-tete with various Builders and Senior persons I came to know that
today’s consumer is very brand conscious, and he look for branded instrumentalities
whenever come to visit sample house. “Today’s consumer is very intelligent and knows one
n’ all brands. Sometimes they demand one brand over other.” Companies taking cues from
these ideas are trying to cross the threshold of consumer mind.

International brands are making their presence felt by their novel offerings and
giving value to the consumer money. Mostly they are targeting the upper segment of
market and keeping their eye on high end customers who do not mind to give some extra in
order to get a bathroom of their dreams. They are putting a lot of weight over their past
experience, in the world market. Sanitary ware companies are getting into entire bathroom
solutions in order to provide their customers with a one-stop-shop. Cera & Hindware are
coming up with studios which will help them establishing them as premium brands in
country. Grohe is backed with a full gamut of products. Its faucets range from Rs.2, 000/- to
20,000/- . But they are promoting themselves as a finest International brand available in
India. Hindware had just at home with a new concept saying Bathrooms are no more
Bathrooms, but glamourooms. Although this concept is not new but still able to catch
attention.
Distribution channels today are backbone of any industry. In this industry developing
distribution channel is a big challenge. Margins are really low with infuriating prices of raw
materials. Companies winning strategy is to play with their operations. Companies like
Grohe have adopted practices which are helping them to make their process more efficient.
Grohe lean® came up emulating Toyota Production system which cut their waste by
unbelievable 35%. Parry’s are working on intelligent supply chain systems taking help of an
IT company. So cutting cost, not raising price is the real mantra.
During survey I came to know some interesting facts like builders are providing not
only branded fittings but also in some cases let the buyers choose from selected products.
This is interesting because now even builders know the preference of their consumers and
providing them what they want. This even helps builders to select a product for future
projects. Finding their preference to select a brand we come to know that affordability is at
higher priority & a big concern for them. Brand image of any product is also looked at.
To reach their target audience and to communicate the right message in the right
manner is the major concern for any company. Companies are using various ways for
promotion like Promotional allowances, Public reviews in newspaper, magazines and
advertisings. But one thing that gained my attention is “word of mouth”. People use what
people believe in. They even recommend others to use what they have trusted. Other
promotional tricks are warranties & service contracts. I find out builders in Pune region are
having affinity for a product because of their service support.
Today everyone wants his consumer to be happy and satisfied so that he will become a
repeat consumer of that product. Bathroom appliances are durable goods, so they are
bought once in 6-7 years or until renovation take place. So keeping customers tracked and
building a long term relationship must be worked out.

2.GROHE –concise history

G ROHE AG, a European manufacturer of sanitary fittings, including kitchen and
bathroom faucets, and shower systems was headed by Friedrich Grohe in year 1936.
According to World production Index, Grohe has roughly 10% of the World in market
for such products in year 2006. The Grohe corporate center is located in Düsseldorf,
Germany, and it has offices in many parts of the world. Its employee strength counts up to
5,100. It continues to expand its presence in all economic regions worldwide in order to
strengthen its competitiveness and safeguard our company's independence.
Grohe focuses on water technology products and systems & is continually advancing
the standards of quality, functionality and design. Their products and services respond to
customers' expectations and increase their willingness to buy. This ensures that services are
in line with market trends and guarantee high levels of customer satisfaction.
Modest Beginnings and Postwar Construction Boom

Grohe's history began in the first half of the 20th century in Germany. Company
founder Friedrich Grohe was the second son of German entrepreneur Hans Grohe. Hans
Grohe, the sixth son of a weaver, grew up near Berlin and learned the weaving craft himself.
However, in 1901 he started his own business in Schiltach, a small town in the Black Forest.
At first he made metal casings for alarm clocks for the German firm Junghans, then the
largest watchmaker in the world. Soon his business grew into a mini-factory for stovepipe
rings, shower heads, spigots, faucets, and other bathroom fixtures, and employed about 100
people by 1928.
Friedrich Grohe joined his father's company for a time, but left in 1934 to strike out
on his own. In 1936 he acquired Berkenhoff & Paschedag, a manufacturer of bathroom
fixtures that had been in business since 1911 and was located in the small German town
Hemer near Dortmund in Westphalia. Two years passed before Grohe's company received
its first orders from abroad. World War II then interrupted the firm's development.
After the war, in 1948, the company was renamed after the owner: Friedrich Grohe
Armaturenfabrik. Grohe greatly benefited from the postwar construction boom. The
exploding demand for kitchen and bathroom fixtures put the company on the track to
dynamic growth. In 1956 Grohe bought Carl Nestler, a manufacturer of thermostats which
was located in the small town Lahr in the Black Forest. Grohe's first subsidiary was renamed
Grohe Thermostat GmbH. In 1957, to help promote his products, Grohe started providing
special training for retailers that carried Grohe's kitchen and bathroom fixtures and for the
plumbers who installed them. Six years later, a brand-new manufacturing plant for
thermostats was erected in Lahr.

Ownership and Global Expansion after 1960
The 1960s brought a major change in the company's ownership. In 1961, Friedrich
Grohe became CEO of his father's firm in Schiltach, which his brother Hans had been in
charge of until his death. Although the two firms had coordinated their product lines to
minimize direct competition--Hans Grohe focused on drains and shower heads, Friedrich
Grohe on faucets and hot-and-cold-water mixers--and although they used the same
distribution channels, the two families decided not to merge the two businesses. Instead,
Friedrich Grohe sold a 51 percent majority stake in his company to the American telephone
giant ITT (International Telephone & Telegraph) in 1968. In the same year Hans Grohe's
third son, Friedrich's brother Klaus, entered the older Grohe family enterprise, while
Friedrich Grohe kept a 27-percent stake in his brother's firm.
During the 1960s and 1970s Friedrich Grohe expanded internationally. In 1961 the
company founded its first foreign subsidiary, in France. A second was established in Austria
in 1965, followed by a third subsidiary abroad in Italy two years later. In 1973 Grohe set up
its fourth European subsidiary, in the Netherlands. Five years later, the company expanded
into Great Britain and Spain, and in 1979 into Belgium.
The death of company founder Friedrich Grohe in 1983 closed a chapter in the firm's
history. The following year, Friedrich Grohe's heirs bought back ITT's majority stake in
Friedrich Grohe and sold their 26-percent stake in Hansgrohe to the American Masco
Corporation in Indianapolis. Due to growing competitive pressures, the two companies
abandoned the idea of staying off each other's turf. To the contrary, over a period of several
years they fought over the Grohe brand name rights. The conflict would not be settled until
the early 1990s when it was decided that Friedrich Grohe would use the brand name Grohe
while Hans Grohe would market its products under the Hansgrohe label.
Entering the U.S. Market in 1975

The establishment of Friedrich Grohe's first subsidiary in the United States in 1975
marked a new chapter in the company's history. A small office was opened in the outskirts
of Chicago, and the first sales representative, Urell, Inc. in Massachusetts, started selling the
European-style kitchen and bathroom fixtures to American builders, retailers, and plumbers.
In 1976 the new venture was incorporated as Grohe America, Inc. and moved into a small
warehouse-office complex. Two years later Al Corwin became Grohe America's CEO and
successfully steered the young company through its initial growth phase, establishing Grohe
as one of the leading brands in the top price segment for upscale bathroom design. Trying to
catch up with the steadily rising demand, Grohe America kept moving to bigger facilities.

In 1978 the company occupied one section of a larger warehouse facility; in 1986, it
moved to a new 64,000 square foot warehouse in Wood Dale; and finally it settled into a
brand-new custom-built 90,000 square foot facility in Bloomingdale, Illinois, in 1993. Calvin
retired in 1995 and was succeeded by Bob Atkins as CEO.
Although the faucets Grohe started selling in 1975 in the United States had a different
look and functioned a little differently from the ones American consumers were used to,
they increasingly gained acceptance. Grohe's single-hole fixtures were easy to use and
install. Another factor that contributed to sales figures doubling every year was the constant
stream of innovations in cutting-edge designs that Friedrich Grohe introduced to the market.
In 1983 Grohe America launched Ladylux, the first pull-out spray kitchen faucet in the U.S.
market. In 1989 Europlus, another pull-out spray kitchen faucet was introduced, which
became a bestseller. While the first models had a plastic finish, they were replaced by the
industry's first versions in solid stainless steel in the late 1990s.
Another innovation, the Grohmix thermostat line, was launched in 1992. Equipped
with a new kind of valve that automatically regulated water temperature as well as
pressure, consumers could set the desired water temperature just as they would do for their
heating or air conditioning systems. With an accuracy within one degree Fahrenheit, the
Grohmix line allowed bath safety for households with small children, the physically disabled,
or elderly persons. Depending on their budget, consumers could choose between a chrome,
white, polished brass, or 23-karat gold finish. In the late 1980s Grohe became known for its
innovative custom shower systems.
During this time Grohe America invested in a range of marketing efforts to increase
the company's reach and boost sales. To promote the company's custom shower systems,
Grohe began advertising directly to consumers. The print campaign featured the image of a
naked couple taking a shower together in a large custom shower. In 1989 Grohe introduced
a new product line for commercial customers. Five years later the company introduced its
Select Showroom program for wholesalers. In 1996 Grohe America launched its first
television ad campaign and introduced a limited lifetime warranty in 1997. By the mid-
1990s Grohe America sold European-style fixtures worth $38 million, reaching a market
share of approximately 1.7 percent.

Positioning in the Changing Market of the 1990s
By the end of the 1980s Friedrich Grohe had become one of Europe's top
manufacturers of kitchen and bathroom fixings. Sales had climbed to over DM 700 million
and exports accounted for 70 percent of the total. Up until that time, the company's main
concern had been on adjusting production capacity and logistics to meet an ever-growing
demand. The situation changed fundamentally in the 1990s. After the unexpected
construction boom brought about by the reunification of East and West Germany in 1990
began drying up, the German market stagnated. Moreover, the company was suffering
significant losses from volatile exchange rates caused by weakening currencies in several
countries around the world.
To secure further growth, Friedrich Grohe had to develop a new strategy. After a brief
and ultimately unsuccessful attempt to venture into other bath-related products such as
ceramics in the late 1970s, the company had stuck to its niche. This niche was nearing its
growth limits. There were two types of enterprises competing in the international market--
specialists and all-arounders. Although Grohe had become the leader among the specialists,
the top players in the global league of bathroom outfitters offered the complete range of
products from the shower divider to the floor tiles. Becoming an all-arounder would have
required enormous investments. Friedrich Grohe decided to keep its focus on an expanded
range of fixtures. The company grew through a number of acquisitions, continued to expand
its international reach, and positioned itself as a world leader in water technology.
In 1991 Friedrich Grohe was transformed into a public stock company under the name
Friedrich Grohe AG. The Grohe family retained a majority stake in the enterprise, while the
IPO filled the company's bank account with cash to finance further growth. In the first half of
the 1990s Friedrich Grohe acquired the German plumbing fixture makers H.D. Eichelberg &
Co. GmbH, Herzberger Armaturen GmbH, and DAL-Georg Rost & Soehne GmbH
Armaturenfabrik, including its subsidiaries Aqua Butzke AG and Eggemann GmbH. The
acquisition of the privately owned DAL/Rost group catapulted Friedrich Grohe's sales over
the DM 1 billion mark. DAL/Rost's line of bathroom installation and flushing systems and
Aqua Butzke's automatic bathroom fixtures for public buildings complemented Grohe's
product range. As part of the deal, the Grohe family--which owned all the company's
common stock--gave up 26 percent to the Rost family.
In the mid-1990s increasing numbers of Asian competitors flooded the European

markets with less expensive plumbing fixtures, putting established manufacturers, including
Friedrich Grohe, under growing price pressure. At German building centers, do-it-yourself
customers could buy a cheaper Asian fixture for around DM 50.

Friedrich Grohe, by comparison, sold its high-quality fixtures through specialized
retailers and directly to plumbing firms, with prices starting at DM 200. As a
countermeasure, Grohe started moving a part of its production abroad. A new factory in
Thailand started putting out cheaper fixtures for the southern Asian mass market in 1996.
Two years later Friedrich Grohe's second foreign production plant in Portugal started
operations. In 1997 the company bought a 70-percent majority stake in Rotter GmbH & Co.
KG, a supplier of sanitary equipment to businesses and public institutions.
To position Friedrich Grohe as a "world leader in water technology" the company

invested over DM 50 million in a massive marketing campaign. Under the auspices of the
Grohe name, the firm established four sub-brands: bathroom fixtures for consumers, such as
faucets and hot-and-cold-water mixers, were sold under the label Groheart; thermostats,
valves and other plumbing fixtures for kitchens and bathrooms were marketed under the
Grohetec label; flush toilet fittings and tanks were labeled Grohedal; fixtures for professional
water management in public buildings were sold under the brand name Groheaqua. The
marketing campaign included ads in German plumbing trade magazines, as well as special
interest and general interest consumer titles.
The campaign not only raised Friedrich Grohe's public recognition but received a
German marketing award in 1996. In addition to the ad campaign the company also
initiated the Profi Club, which not only offered training to Germany's plumbing firms in how
to use Grohe products and innovations, but also offered training in making their own
enterprises more efficient. Up to 10,000 plumbers annually attended such training sessions
and received the quarterly club magazine.
Going Private in 2000

In June 1999, to the surprise of the business community and shareholders, Charles R.
Grohe, chair of Friedrich Grohe's advisory board and majority shareholder, announced that
he and the Rost family were selling their stakes in the company. A few weeks later, the
European investment firm BC Partners won out in the auction organized by Credit Suisse
First Boston, over counter bidders including American equity house Kohlberg Kravis Roberts
and U.S. plumbing supplier Kohler. BC Partners acquired all common shares from the two
families, representing a 51 percent stake in Friedrich Grohe, and these shares were
transferred to Grohe Holding GmbH. BC Partners went on to buy back all but 0.4 percent of
the preferred stock that was publicly traded. On March 29, 2000, the public trading of
Friedrich Grohe shares ceased. Ultimately, the company was transformed into a private
entity--Friedrich Grohe AG & Co. KG.

During the next two years, measures were taken to strengthen Friedrich Grohe's
position in the world market. The United States had become the company's most important
market outside of Germany, generating DM 200 million--or about $160 million--in sales in
2000. The company also invested in new subsidiaries in Eastern Europe, specifically Poland
and Russia, as well as in Asia, where Friedrich Grohe was planning to open a new production
plant in Shanghai and to cooperate with a Chinese tile manufacturer. On the internal front
the company reorganized its sales divisions and pushed its designer line of fixtures with
higher profit margins. With a world market share of roughly 10 percent in 2001, Friedrich
Grohe aimed at becoming the global leader in bathroom fixtures and sanitary installations.

3. 4-P’s of Grohe India

G ROHE India Pvt. Ltd. is a fully subsidiary of Friedrich Grohe AG of Germany. Grohe has
entered into the Indian market in year 2005. It has mulled a Joint venture with Indian
sanitary giant Hindustan Sanitaryware India Ltd. (HSIL). HSIL better known as
Hindware has helped German incumbent to use its experience. Grohe in India is targeting
niche market of luxury highly sophisticated and technologically advanced sanitary ware
market which if experts are believed, is increasing at a faster pace. Marketing mix of Grohe
was interesting to study because it has product ranging from 2,000 to 20,000 INR. Also its
distribution channel is very effective and considered best in industry.
Product Mix
Grohe claims to have Products of International standards. Its product mix length
dwells among faucets, showers, cisterns, thermostats, and unique customized solutions.
They have broadly classified their appliances into Bathroom & Kitchen products. Although
some of products are cross functional and included both in verticals.
Products are having high depth. Company is trying to convert these durable items in
India into specialty goods for which consumers will be ready to go an extra mile in spending,
since their target group is higher income group. They have differentiated their products by
providing special features attached to it. Like one its Product Grohtherm came with special
features of temperature control. One important differentiation is their customized solutions
for bathrooms. These bathroom solutions are customized for an individual. Another aspect
that creates Grohe Effect as they say among sanitary ware products is their look & feel.
Aesthetic is an important attribute as I have found out in my survey study. With that
German technology is also known for its cutting edge features, so is Grohe.
Grohe product offerings are generally divided into three main categories
Cosmopolitans: Minimalism, with its reduction of the unnecessary and defined iconic
geometry. These are targeting those consumers which need minimum furnishings with
product.
Contemporary: These look for more garish equipments, Harmonious soft flowing lines and
conventional aesthetics, radiating longevity and comfort.
Authentic: This ranges products having elegance of past combined with today’s technology.
It shows how company is aware of different needs of consumer and providing them
what they need through their innovative range.

Product mix of Grohe India pvt. Ltd. is as follows
Product-Mix width
Faucets Showers Thermostats Accessories
Bathroom:
Allure Rainshower Grohtherm 2000 Skate
Aria Relexa Grohtherm 3000 Surf
Atrio Tempesta Free hander
Essence Sena
Arabesk Aquatower
Sinofina Classic
Tenso Movario
Concetto
Lineare
Kitchen:
Atrio
Essence
Minta
K4
Zedra
Aria
Alira
Europlus
Eurodisc
Eurostyle
Eurosmart
Classic line
Costa
Arabesk

Grohe India faucets range is a good example of Line stretching with the advent of new
faucets coming in the market targeting lower income segments. Grohe is following Product
line pricing by providing their products at three different levels of cosmopolitan,
contemporary and Authentic. Authentic are priced higher than other Contemporary which
again is more pricy then Cosmopolitan. Warranties are another major feature that is
attached to a Grohe product. Now every Grohe India product comes with 10 years
repairable warranty.
Pricing
Customer today is very diligent. When he goes out to buy something first they take a
full comparison of product on internet. If a product is quoting price more than its perceived
value, it is out of customers’ consideration set at the same moment. Although high prices in
Indian market is synonymous to high quality. Grohe products are priced high as compared
to competitor product in the same category.
Grohe is a company having high technology products as compared to its competitors, so

citing a slightly higher price for its products can impact consumer when they take inference
form product quality and its price.
Pricing objective for the Grohe product is supposed to be product quality leadership. Since its
products are though priced higher than other company’s product in the market but their
affordable luxury is also attached to them. Although their products need to be very much
differentiated on the basis of technology.
Grohe is supposed to be using Perceived value pricing method in India. German technology
is recognized as one of the best in terms of performance and complexity. So perceived value
is definitely higher. Since their products are attached with 10 years warranty, their
distributor channel is also very reputed, trustworthy. The main pick out about their high
perceived value is their high customer contacts and feedback even after the many years of
sales.
Other important factors affecting its price are the company pricing policy. Grohe has
lowered their price for its Indian customers for the same products. They have products
ranging from 2,000 to 25,000 for a single faucet .But these might be just for introductory
phase of the company. Once company will establish its name in the country it will be having
Slightly higher prices what they have today.

Promotion
Market dynamics and the changing perceptions of the customer, have nudged Grohe.HSIL at
revamping and strengthening the image of its flagship brand, Hindware. This is expected to
provide HSIL with the muscle to maintain its competitive edge and support future line
extensions. The new communications, ‘Impressions and Expressions’, aims to project
hindware as an expression of art and a brand that enhances lifestyle.The company has also
launched Hindware Helpline, which offers after sales service, with a capability to attend to
any complaint within 24 hours. Sustained trade promotion activities aimed at multi-brand
retail outlets have given Hindware products the necessary fillip. Referral business has been
strengthened by the initiation of special programmes such as architect meets and seminars.
The up gradation of dealer showrooms and the setting up of Hindware Arcades have
furthered the market hold of HSIL.
A Grohe campaign Called the GROHE "Enjoyment Guarantee," the promotion

offers a 30-day money-back promise on all GROHE Rainshower mounted and hand-held
showerheads. Until November 30, if customers are not completely satisfied with their
GROHE Rainshower designs, they can return them within 30 days of purchase for a full
refund.
Place
Grohe believes in long term partnerships with its distributors, as well as it selects the
distributors looking at their eagerness to grow, their reputation, past experience etc. Long
Association can thrive on mutual trust. These Distribution points are located mostly in the
growing city. Grohe has targeted major growing cities of India like Pune, Ahmedabad, Goa,
Indore, Mumbai etc.
Their policy is to capture new market not existing market. So existing in growing city only.
Grohe has a model of State Distribution System (CDS) for distribution. The main Distribution
center for a state or a region is hold responsible for logistics and distribution and
replenishment of orders at the faster pace. Assortment creation for the efficient utilization
of space in store and logistics transportations is done at the SDS only. The logistics software
of the company is maintained by IBM software solutions.

4.Internship Objectives

T he Objective of my summer internship are as follows
1. To understand the consumer’s buying behavior of luxury sanitary products.
Luxury Sanitary equipments are altogether a niche market of sanitary products and it
is raising with 12% per annum in Asian countries. Our objective is to study the typical buying
behavior of the prospective consumers and trace out those peculiar attributes which gives a
cue to a consumer to finally decide to buy a bathroom appliance.
2. To prepare a database of future customers of Grohe products.
Pune is a region which is 4th fastest growing city in the country. Currently there are
more than 500 big projects of townships & villa, row houses, & five star hotels are running.
Preparing a database of big builders and architects was one of the important task assigned
to me during internship. The area assigned to me is Pune municipal corporation region only.
3. To do a competitor analysis of Grohe India.
Knowing your Competitors inside out is as important as knowing your consumers.

Grohe is facing stiff competition from many big as well as local brands in the market. A
comprehensive analysis of competitors will tell us about their big strength as well as their
weakness, & last but not the least weakness in their strength on which Grohe can capitalize
upon when making its marketing strategy.
4. To study supply chain of Grohe India.
Grohe is a new entrant into the Indian market, still a big brand in Europe and other
parts of World. Grohe has taken help from IBM to implement logistics networking planning
tool to build a case of reducing the number of its Regional Distribution centre (RDC) in
European network. But in India it is still a distant dream. Although in year 2008 Grohe has
around 70 distributors across India & is going up to 100 by Dec. 2009.
5. To develop an advertisement for Grohe India.
Although this task is not in original list, I appended it later as I start generating the feel
of what generally the luxury bathroom fittings generally mean for its customer. It’s sheer
pleasure, status, & lavishness attached to it.

Defining Management Problem
Any research process helps decision maker to make a decision with high
probability. Even degree of uncertainty decides what kind of research to be undertaken. To
identify all the dimensions of a business problem is next to impossible for any researcher or
objective rest alone management student. The formal quantitative research will not begin if
the management problem is not apparent. So it is important to define a problem first in a
comprehensive manner. But here the Iceberg principle is worth mentioning, which states
that dangerous part of the business problem is neither visible to nor easy to understand by
managers.
The management problem can be avowed as

“Since Pune is a big break for Grohe India to establish its Brand, the major apprehension
of the company is ‘to understand buying behavior of consumer’ & ‘to communicate the
message in most effective manner’”.
For this reason it is necessary to comprehend the atypical behavior of end user.
Obj.1 will assist us to figure out what today’s consumer think of when they buy bathroom
equipments. This will help us to create a stimulus among them by giving them faithful cues.
These cues can impel them to purchase a Grohe. In the intervening time a database will be
prepared while getting in touch with and collecting data from various builders and high-
flying customers.
We have to design certain Hypotheses on a range of research objectives. These

research objectives will put in the picture of purchasing deeds of customer in lucid way. A
questionnaire need to be prepared consist of questions marking those hypothesis and
objectives. Again it is important to lay bare the symptoms and identify the core problem of
the business. So it is needed to gather lots of background information from primary or
secondary sources. I talked with my company guide about the industry and product position
in the market and search internet exhaustively to accumulate information about
whereabouts of the industry.
In Pune Jaquar & some other brands came out as clear leader for C.P. fittings.
Obj.3 is to do a competitor analysis of Grohe. Studying the weakness of Jaquar and
targeting them will become possible. I’ll try to find out any lacunae in their service channel
or product portfolio to which Grohe can target.

Unit of Analysis
For defining the management problem we will require the unit of analysis for study.
Here we will see what is to be considered an individual, or organization as a whole for the
purpose of collection of data. Since we are collecting data from big construction firms from
Pune region as well as from individual prominent customers, it is better to deem the unit of
analysis for data collected from builders as organization and for high-flying consumer as
individual.
Determining relevant variables
It is inevitable to determine the key variables, in order to define a management

problem. Variables for this research mostly related to the buying behavior of the consumers.
The variables affecting the customer choice for a particular product, their affinity towards a
brand after long use are to be considered. The variables will help in deriving certain research
questions.
1. Brand image
2. Ease of use
3. Aesthetic value
4. Functional value
5. Affordability
6. Advertisements
7. Renovation
8. Sources of advertisements
9. Income group
10. Willingness to spend.

5. Research Proposal

T he general purpose of this study is to determine the buying behavior of the consumer
of luxury sanitary items. In defining the limit of the study, as a summer intern I have
identified some study areas to be addressed as elucidated.
A careful review of those question areas led to the development of the following specific
research objectives.
Research Objectives
1. Choice of Appliances is independent of Brand image of product.
2. Aesthetics of product is given priority over other attributes of kitchen & bathroom
appliances.
3. Bathrooms are considered important portion of house by the population.
4. People are ready to pay more than 150,000/- INR for new bathroom / kitchen
appliances.
5. People always consider new brands for renovation.
6. Brand image of appliance is closely co-related with advertisements effectiveness.
Research Design
The survey research method was the basic research design. Each respondent (here as
builders, architects and end consumers) were interviewed in their respective locations.
The personal interviews are generally expected to last between 40-45 minutes, although the
length of interviews depending on previous product related experience of research units. For
example if a respondent has never been asked related question, they might not be ready to
divulge their experience about bathroom appliances. Sometimes respondent looked wary of
responding to certain question certain question must be skipped.

Some of the questions asked are
1. Does product brand of appliances affect your / end consumer’s choice?

a. Yes b. May be c. Not at all
2. What importance does bathroom have in your/ end consumers’ home?

a. Very important b. Important c. Not much importance d. No importance e.
doesn’t matter
3. What are you/ end consumers willing to pay for a bathroom/ kitchen of your/ end
consumers’ dream?
a. 50,000 -1 lakh b. 1lakh to 1.5 lakh c. 1.50 lakh to 2.0 lakh d. 2.0 lakh to 2.50 lakh
Sample Design
A survey of approximately 100 unit located in around 45 locations throughout the

Pune region is provided as database for this study. The sample is selected on a convenient
sampling from all construction sites. Eligible respondents were holding responsible positions
at various builders’, architects’ organizations. Within each household an effort will be made
to interview the individual who is the most familiar with completing the survey forms. When
there is more than one respondent a random process is used to select the respondent to be
interviewed.
Data Gathering
The field work was done and a non random sampling survey was conducted. The
survey was based on convenience. Questionnaire was utilized to collect the data on face to
face, through e-mail using internet. Google documents were used to develop an online
questionnaire and link was mailed to the various respondents. The survey was conducted to
quantify certain factual information, certain aspects of information are also qualitative.
Although I tried to conduct the survey free of any sampling error but there are certain errors
which are inevitable. Response bias occurs when respondent tends to answer in a certain
direction that is when they consciously or unconsciously misrepresent the truth. Auspices
bias occurs when respondent bias in the responses of subjects caused by their being
influenced by the organization conducting the study.

I deliberately didn’t tell the respondents that I represent any company. Sometimes it is
not possible to eradicate the social desirability bias which can create a bias in the responses
of subjects caused by their desire either conscious or unconscious, to gain prestige or to
appear in a different social role. We tried to put brands which are virtually well known
among the respondents.
Data processing & Analysis
Standard editing & coding procedure will be utilized. Simple tabulation & cross
tabulation will be utilized to analyze the data. Various hypothesis testing tools were utilized.

6. Observations

Sample size
For any kind of business research it is necessary to estimate the size of sample
necessary to accomplish the purpose of study. In the following research conducted the
sample size was calculated (see appendix A). This leads us conduct a survey and collect the
sample of at least 90 samples.
No of samples collected = 131
Builders/ Architects/Plumbing Contractors N1 = 96
End Consumers N2 = 35
Frame of questionnaire
Questionnaire consists of only close ended questions. Size of questionnaire is kept up

to 11 questions .Asking about various parameters related to their buying nature and their
inclination towards one product. The Questionnaire follows tunnel technique with general
questions to more specific questions in order to obtain unbiased response. It also helped in
understanding and knowing about responders’ frame of reference by asking more specific
questions about the respondent’s information. No filter questions and pivot questions were
asked in the questionnaire (see Appendix - 1).
Questions were set on various scales namely nominal, rational and ordinal. We
tried to keep the questionnaire as succinct and resourceful as possible .Nominal scale is used
to know the average thinking of the consumers and decision makers .Every variable was
tried to include in the questionnaire.

Brand awareness was an important purpose that I tried to solve through this
survey. Grohe might be a big brand in European co. and people who have made any foreign
trips are able to recall brand Grohe. Any Brand identify the source or maker of a product and
allow consumer to assign responsibility for its performance to a particular manufacturer or
distributor. So I asked End consumer’s only that can they give a brand recall and asked to
identify as many brands as possible from a range of 13 brands.
100
88
90 83
79
80 71
67
70 63
58
60
50
40
30 25
21
17 % of Respondent aware of
20
10 4 4 the brand
0
0
Graph -1
Long bars shows high brand awareness, and it is clear Jaquar is leading and it has even left
behind Industry leaders Parryware, Hindware. Grohe has low brand awareness with only 4%
of respondents are nodding to know about brand Grohe. Management must give a deep
thought to make themselves a known brand in the country.
We also tested total Brand awareness of the end consumers by looking at no. of
reactions given by each respondents to us . Looking at this we can say that how conscious
todays’ consumer is, about their sanitary brands. We have plotted the no. of respondents
against the no. of brand recalls. The Graph on the next page evidently depicts the awareness
of the respondents. Around 50 % of the respondents were able to identify between 6 t0 8
brands name. More than 59% of people were known to 6 or more brands shows the end
consumers’ apprehension for the brands for their bathroom fittings

60.0
50.0 Total Respondents = 48
50.0
40.0
30.0
% age wise
20.8 20.8
20.0
8.3
10.0
0.0
0.0
0 to 2 3 to 5 6 to 8 9 to 11 11 to 14
Graph -
Knowing their Brand awareness we come to know how a branded product is the requisite in
today’s consumers’ bathroom. We were skeptic about brand awareness results so now when
it is clear that Consumers are well aware of the various companies existing in the market,
we asked them directly from where they heard about these companies and offerings, we
wanted to know the source of information.
90.00
80.00
70.00
60.00
50.00
40.00 %ge respondent
30.00
20.00
10.00
0.00
TV News MagazinesHoardings Others
papers
Graph -

After filling general information in the questionnaire, we asked them about appliance
respondents prefer to fit in consumers’ bathroom. I got following response
50 46
45
40
This graph shows clearly that
35 Jaqaur is in leading position
30 28 with Cera-parryware coming
25 at second place. Interesting to
20 know that local guerillas
16
combine eating about one-
15
fourth of the market.
10 6
5
0
Jaguar Parryware Kohler Other
Graph 1
Does product brand of appliances affect your / end consumer’s choice?
60
54
50
40 Brand is clearly considered when

choosing a bathroom or kitchen
30 appliance. Around 77 % 0f respondents
22
20 somehow consciously or unconsciously
20
take brand image of an appliance under
cons
10
ideration
0
Yes May be No
Graph 2
Now putting above data in cross tabulation i.e. for every different brand what people think
about brand image we will get following table

Table:1
Brands
Effect
Jaguar Parryware Kohler Other Total
Yes 32 8 3 11 54
Maybe 8 4 2 6 20
Not at all 6 4 1 11 22
Total 46 16 6 28 96
Majority of respondents who consider brand image has an effect on their choice. The
following graph shows how the preference for branded product changes among the user of
various brands. The respondents who are using or prefer to use category “Other” product
are undecided about their choice of appliance is based on brand.
50
45
40
35
30 Yes
25 Maybe
20 Not at all
15 Total repondents
10
5
0
Jaguar Parryware Kohler Other
Graph 3
The above Graph 3 clearly represents that Consumers using Jaquar are more
brand conscious than any other brand. These people are companies target market.We tried
to find out does Indian consumer give importance to their bathroom and are they willing to
spend a large sum of money to get a bathroom of their dream. Initially bathrooms were
considered an adjunct to home.

So is there any change in the belief of Indian consumer. Because initially we have presumed
that there is a change in Indian consumer thinking and our whole study is based on this
assumption. So we asked them what importance does the bathroom has in their home and
we find out.
0%
6%
15%
Very important
42% Important
Somewhat important
Less Importance
No importance
37%
Graph 4
More than 79% of respondents told that bathroom is important portion of their
home. To my expectance not a single respondent has said bathroom is having no
importance in their home. This supports our initial assumption that bathroom is having
certainly importance. Looking at another question in which we asked how much a consumer
is keen to spend and tried to gauge their willingness to get a dream bathroom. This clearly
indicates that the consumers will be getting more & more interested in their bathrooms
which was once thought to be a detached part of the home
Visiting at about 130 construction sites with varying price range I found that there are some
things common in all of them. The size of bathrooms is between 4” X 7” to 6” X 8”. There are
other appliances commonly put into a bathroom and one more thing, They are placing floor
cisterns in the toilet, a wash basin, a geyser , faucet with mixer systems. Every house has at
least one master bathroom. This master bathroom is bigger one and special worry of
builders and architect. These master bathroom can be a special target area for Grohe. They
can give customize solution to these bathrooms

60
52
50
40
30 26
20
14
10
4
0
50,000-1,00,000 1,00,000-1,50,000 1,50,000-2,00,000 2,00,000-2,50,000
Graph – 5
This Graph clearly shows people who are willing to pay more than 150,000 are less than
20% of all the respondents. This clears the picture of the population with more people
willing to pay less than 100,000. Next we want to know the best possible way to reach the
target audience, i.e. the best medium to advertise the Grohe Product. We asked them to
rate following sources of advertising and the result shows how the end Consumer & Builders
and other stake holders prefer different medium.
100%
90%
Billboards
80%
70%
FM/ Radio
60% Advertisements
50% Mall media
40%
30% TV Advertisements
20%
Print Media (News
10% Papers, Magazines etc.)
0%
1 2 3 4 5
Graph- 5

It can be concluded from the above graph that Builders have given higher ratings to Print
media and Billboards, but amazingly lower ratings for the radio/ fm advertisements. Now
this is interesting because it is generally thought that TV advertisements are bigger
persuaders than any other source. It can be clearly observed from above Graph- 5 that print
media (News, Magazines etc.) is having major chunk in 4 as well as 5 rating bars. It clearly
shows Builders are more influenced by Print media similarly with billboards. Mall media and
Radio advertisements are neglected as shown by decreasing weightage in bars.
100
90 1
80
70 2
60 52 52 3
50 44
40 33 4
30 3030 30
30 26 26 26
22 22
19 5
20 15 15
11
7
10 4 4 4
0 00 0
0
Graph – 7
This graph shows how end consumer has rated for different sources of advertisements and
it is quite evident that TV advertisements came out as winner then come print media.
Interestingly both Builders data and End consumer data show apathy towards radio ads.
Mall media being a new advertisement media is also left and not persuaded by both End
consumer as well as Builders. Graph- 7 clearly shows 52 % of respondents have given rating
5 to TV advertisements. This finding can be an important info in advertising budget
planning.

Hypothesis testing
Another major portion of the Data analysis is the testing of various hypotheses we set at the
beginning of the whole study. We tried to prove the above 5 hypothesis and found only
acceptable.
Hypothesis : 1 Choice of Appliances is independent of different brands available in the

market
Hypothesize:
Since it is well acknowledged that brand name plays important criteria to select any home
appliance we tried to prove the same in the sanitary ware industry also. So null & alternate
hypotheses are
H0 : Choice of Bathroom appliance is dependent on the brand image

H1 : Choice of Bathroom appliance is independent of the brand image
Test:
Since we are testing the behavior of consumer on two variable i.e. the brands they use &
effect of brand name on their selection for a particular type of appliance, it is quite evident
we will require a chi-square bi-variate test.
Χ2 = Σ(o –e)2/ e
α: type 1 error rate α is taken as 0.10. Since the test is two tailed and α = 0.10, there is α/2 =
0.05 area in each of tail of distribution. Thus rejection region lies at two ends of distribution
curve and acceptable region is 90% of total area which is lying symmetrically on both sides
of the mean mean value. The degree of freedom for the hypothesis testing is 11.
χ2α/2 = 9.8376 df = 11
Gathering data and keeping in cross tabulation format we can calculate the expected
values. Calculating the value for the χ2 we found out it comes under the acceptance region
defined.

χ2 calculated = 4.07018
*
for calculation see appendix
Action: Because this test static, we found that calculated value is coming very much inside
the limits of acceptance region so null hypothesis is not rejected. That is the brand image is
affecting a consumer’s choice and an important step in product selection.
Hypothesis2. Aesthetics of product is given priority over other attributes of kitchen &
Bathroom appliances.
Hypothesize:
Any products have some aesthetic attributes which act as cue for consumer to buy the
product. Generally aesthetics or in better terms looks plays an significant job to select a
particular appliance. In case of bathroom appliance we are considering four major attributes
like Aesthetics, affordability, functions, & ease of use. We will be trying to prove that
Aesthetics are given priority over other feature
H0: Aesthetic is given preference over other features

H1: Aesthetic is not given preference over other features
Alternatively can be stated as

H0: µa > µe , µa > µf , µa > µd
H1 : µa ≤ µe , µa ≤ µf , µa ≤ µd
Where
µa = Population mean for aesthetic
µe = Population mean for ease of use
µf =Population mean for functionality
µd = Population mean for affordability
Test:
This is a simple hypothesis test with two variables taking at a time. We will apply Z-test for
the difference between two populations. This is a two tail test for testing variations about a
central value i.e.

Z = ( x - µ )/(σ/√n)
Level of significance α is 0.1. Since it is two tailed test i.e. α/2 =0.05 and being normal
distribution the rejection region is 0.05 on each sides of acceptance region
From standard Z tabulated values for α/2 = .05 we get
Ztab = 1.645 Z α/2 = 0.823
Calculating Sample means and Population means we will obtain following values,
Table: Sample means Table: Population means

Attributes X Attributes µ
Ease of Use 4.13 Ease of Use 4.04
Aesthetic 4.08 Aesthetic 4.24
Functions 4.14 Functions 4.16
Affordability 4.17 Affordability 4.32
Table: Standard deviation ‘σ’

Ease of
use Aesthetic Functions Affordability
0.861455 0.763188142 0.81589204 0.81649658
S. No. Relation testing ZCal Ztab Hypothesis

µa > µe -1.798 -0.823 Rejected
µa > µf -0.745 -0.823 Accepted
µa > µd 0.618 0.823 Accepted
*
For calculation see Appendix
Action : We can conclude that since Zcal value for Ease of use & Aesthetic taking as two
variables is deep into rejection region, we have enough evidence to reject the null hypothesis
that aesthetic is always given priority over other features of the bathroom appliances. We
can also conclude that we have not adequate data to give exact priority of attributes.

Hypothesis 3: Bathrooms are considered important portion of house by the population.
Hypothesize:
Bathrooms initially are considered just as a portion of home but now they are deemed as
very important section of house. We are hypothesizing on this change in attitude of the
Indian consumer
H0 : Bathrooms are just a portion of house

H1 : Bathrooms are important part of house
Test:
We are applying Z test for testing population mean. Calculating population mean and
estimating its validity. This is a single tale test.
Z = ( x - µ )/(σ/√n)
α is set at 0.1, which means the level of significance for the hypothesis is 90%.Calculating
value for Z form the table we will get
Ztab = 1.645
Calculating Sample mean x = 4.146

Sample standard Deviations σ = 0.889
Taking random samples for calculating population mean

No. of samples taken = 25
Population mean µ = 3.80
Zcal = 0.078
Action:
Since the Ztab< Zca , We can clearly predict that null hypothesis is rejected that bathrooms
are just a portion of a house.

Hypothesis 4: People are ready to pay more than 150,000/- INR for new bathroom /
kitchen appliances.
Hypothesize:
We are trying to estimate whether the consumers are ready to pay a large sum in order to
get a bathroom of their dream and ready to embellish the clandestine part of their house.
H0 : Consumers are not willing to pay a large sum for bathrooms

H1 : Consumers are willing to pay a large sum for bathrooms
Test:
Applying Z test for testing population mean checking its validity. It is one tail test.
Z = ( x - µ )/(σ/√n)
taking α = 0.05 We have tabulated value of Z
Ztab = 1.96
Calculating Sample mean x = 109375

Sample standard Deviations σ = 43448.56
Taking random samples for calculating population mean

No. of samples taken = 25
Population mean µ = 107000
Zcal = 0.535
Hypothesis 5: Brand image of appliance is closely co-related with advertisements

effectiveness

Hypothesize:
Generally it is believed that Brand image is related with effectiveness of
advertisements, here also we are assuming the same and try to predict the population’s
attitude towards advertisements and brand image.
H0 : Brand image and Advertisements are having high correlation

H1 : Brand image & advertisements are not co-related
We find out that Brand perception is highly co-related to the cosumers’ interaction with
different media of advertising

7. Analysis of Indian
Sanitaryware industry

I n the next decade, India is expected to be one of the world's fastest growing countries for
sanitaryware consumption. The sanitation penetration has more than trebled from 8% in
1982 to 18% in 1994 and to 29% in 1999. The comparative penetration levels in
neighboring countries are as follows: Pakistan: 50%, Sri Lanka: 65%, Malaysia: 94% and
Thailand: 96%.
The government impetus to improve hygiene and sanitation is likely to increase the demand
for sanitaryware in India. Moreover the increasing urbanization of India and the consequent
requirement for residential and commercial buildings will be a major driver for growth of
sanitaryware. Along with this the focus of the central and state governments to provide
housing facilities to the poor, is also expected to generate demand.
The National Housing Policy formulation that envisages "Housing for all" by the end of Ninth
Plan period is a big step towards this. Indira Awaas Yojana, Samgra Awaas Yojana are
programs for providing housing to the rural poor is a key step taken by the government in
this area. The housing development organizations like HUDCO, State Housing Development
Boards and Rajiv Gandhi Rural Housing Corporation Ltd. are also playing a large role in this
initiative.
It is estimated that there is currently a demand for 20 million housing units in India. Further,
a significant number of the 115 million housing units across the country will need
reconstruction for improvement. Therefore a replacement market will emerge, though
currently original equipment sanitaryware market accounts for nearly 90% of the market.
Sanitaryware demand
Sanitaryware Industries in India for the last 6-7 years have shown very dramatic growth with
major players doubling their production capacity. The Companies have also upgraded their
manufacturing system by introducing Battery Casting, Beam Casting and have gone in for
latest imported Fast Firing Cycle Kiln Technology. These Companies have also upgraded their
quality and have introduced high value range in the market, which has been accepted and
appreciated. The demand for high value Sanitaryware in India is growing very fast. The
Companies are trying to meet the demand as the realization per Metric Ton for high value
product is very good which ultimately results in good profitability. In order to educate the
customers in India to go for quality products and also for higher value sanitarywares,
companies have adopted a very aggressive advertisement campaign. Companies have also
strengthened their dealer network by offering showroom incentives and some of the
companies have also gone for their own retail outlets in major towns. The demand for
Sanitarywares in India is growing @ 15% -17% every year.

The sanitaryware industry in India is divided in two sectors. The organized sector
consisting of 5 companies (M/s. Hindustan Sanitary Industries Limited, M/s. E.I.D. Parry,
M/s. Swastik Sanitarywares Limited, M/s. Madhusudan Ceramics, M/s. Neycer India
Limited), manufacturing sanitaryware for the last 15-20 years and have established their
Brand image. The organized sectors produce fully vitrified sanitarywares, using latest
technology and best of Ceramic Raw Materials available in India. The unorganized sectors
have adopted local Indian technology to manufacture the basic sanitaryware products. Since
the availability of raw material is in abundance and also very cheap in the state of Gujarat &
Rajasthan, various companies have established their factory in these areas. They are
producing the basic sanitaryware in various brands. Unorganized sector's percentage of
production capacity and also their sales in the local domestic market are higher than that of
the organized sectors' sales. Unorganized sanitaryware manufacturer comes under small
sectors and hence enjoy the benefit of Nil Excise Duty and Sales Tax and hence they sell their
products in the domestic market approximately 70% cheaper than the organized sector
products.
Government of India Policy on Housing Sector is very encouraging. The Government

has announced Income Tax rebate on housing loan to boost the housing sector. All financial
institutions are lending money for construction of house at a very low rate of interest.
Government figure shows that Housing Sector is growing by approximately 25% every year.
The need of Housing in India with 100 crores population looks to be very potential. As per
DGTD Survey Report there is a shortage of about 20 million houses in the country by the end
of 8th Five Year Plan. The housing has become a basic necessity, as people in India are
looking forward for improved sanitary condition. The concept of making toilet is fast
growing even in village areas, where toilet till last two years did not exist.
The cost of producing sanitaryware in India is substantially low as compared to the

advance countries, because the labour cost and the basic raw materials for manufacturing
quality sanitarywares is available at very cheap rate and in abundance. Because of our low
cost of production, Indian sanitarywares are very competitive in the neighboring countries
and hence export from India is also growing every day.

Fig.: Showing the presence of various sanitaryware industry in India
Source: Indian Council for ceramic tiles & sanitaruware
Table below shows the statistics data related to the sanitaryware industry. It can be noted
that not a single company is ranked in top 10 in terms of productions while market is
growing consistently at the rate of
SANITARYWARE INDUSTRY STATISTICS:
World production: 187 Million pieces

India's Share: 6.7 Million pieces.
not in the Top 10 (India A/c
World ranking (in production):
for 3.30%)
Global Industry Growth Rate: 5-7%
Growth Rate (India Domestic Market): 10%
Organized sector:
% Share of Production: 43%
No. of units: 6
Production Capacity: 103300 M.T. per annum
Actual Production: 95000 M.T. per annum
Unorganized sector:
% Share of Production: 57%
Production Capacity: 136700 M.T. per annum
Actual Production: 120000 M.T. per annum

8. Suggestions &
Limitations

Suggestions
Ggohe is a global leader with a turnover of over € 1 billion and holding it’s core
competency of delivering value products to its customer from the very beginning of this
century. But Indian market which is growing at rate of more than 9% annually is still hard
nut to crack for it. Grohe has entered India way back 2 years but still only 4% of the surveyed
consumer knows about it.
Indian consumers are always a hard fish to catch for any local or global company. While
Grohe has an exemplary supply chain management in German and European countries, it is
still to be implemented in India. These SCM are maintained by IBM there. With more than 80
distributers in 7 cities in India and raised to 100 by this year end a diligent logistics software
is the need of hours.
Company is the winner of for three consecutive years for the better quality and competitive
products offered to the consumers. Although Grohe is targeting high end consumers in the
country but a brand become big once people begin cherishing it. Grohe has even loosen up
its Brand value, because of low awareness of the brand among the population.
We have come up with certain suggestions looking at the study results that are generated
through the analysis of data
1. Brand Awareness is desired to be improved among the consumers
“Seeing is believing” is what they say when it comes to recognition of Brand in this
industry. Today consumer is brand conscious, we are amazed to know that many of the
respondents are aware of more than 8 brand names when asked to respond. Today with the
advent of internet and gradually escalating flow of excessive information end consumers are
giving more emphasis on known names of brands. Indian consumers have a typical tendency
to get a word of mouth publicity of any product. The viral marketing and intensive
advertising plan is required for the development of market share.
In order to plan the advertising campaign this study can be immense help, because it states
how to reach target customers. TV advertisements are the best medium to get in touch and
communicate to the end consumers while news paper, magazines are better sources to be in
touch with the other major stake holders of industry like builders, architects, etc.

2. A installment scheme for the Grohe customers is to be introduced
We can evidently say through this study that large base consumer of the country is
not ready to invest more than 100,000 in the bathroom appliance. This is the total money
which they can invest over a single bathroom which include tiles for walls and floor, fresher
fans, and other garnishes with faucets and sanitary fittings. So it’s better to give options of
more than one installments payments to the consumers
3. The delivery of high technology quality product with lesser glitches is to be assured.
Grohe’s biggest competitors in Indian faucet market is Jaquar and the reason that I
come to know about, why the builders, plumbing contractors and individual household like
to trust Jaquar is it’s after sales service. I am being told that if there is any technical glitch in
the product then Jaquar engineers personally come to attend it , and replaces the faulty
piece without any trouble. This after sales service is a competitive advantage of Jaquar over
its competitors. Grohe, a German company should place itself as company with high
technology products into the minds of the consumers with greater emphasis on high quality
product delivery.
4. An after sales service force is considered necessary to be developed.
Amid they can also start training Plumbing contractors and give them authorized
service dealership for specific Grohe products. Since Grohe involve German technology in
their products which is reliable as well as complex to understand, a continuous training
program for these dealers is to be made. An all India toll free service no. is to be provided to
the consumers for service or maintenance of any Grohe Product. This force need to be as
competent as to be fore front of the service.
5. Search engine marketing of Grohe website is rudimentary.
Internet today is a strong and cost effective medium to reach a concentrated audience.
When asked about whether the responders’ have mail id and uses internet about 87% of the
respondents speak affirmative and more than 70% of them uses internet twice a week. We
are assuming that any average web surfer use search engines 12 times a week one or other
search engines. According to An interesting statistics which came out soon after the release
of ET report which stated that there are 81 million Internet users in India.

Infact, India has been ranked fourth among the top ten nations in the world with 81 million
internet users even as the world aggregate touched 1.35 billion by the end of 2007,
according to figures released by Internet Governance Forum. This time LiveMint along with
Mumbai based digital advertising & technology company Komli Pvt. Ltd. did some
qualitative and quantitative research on online consumer trends in 2008.
Now when we search for key words like Luxury bathroom products or bathroom fittings, it is
hard to say that Grohe does not feature even on the third page of organic search. This
shows poor rate of hits on website. Even by generating tag clouds we found out that people
are not looking for what Grohe.co.in has to offer. ‘Grohe cube’ is not even featured.
Source: www.tagcrowd.com
Fig. – Tag cloud developed for www.grohe.co.in
Google adwords, adsenses and other search optimization tools are available to the
marketers to optimize the search of web users and increase website traffic.Grohe website is
the best when compared to its competitors but not utilized to its best of potential.
7. Grohe cube virtual bathroom web tool need to be improvised.
Today when it comes to buy a new appliance, buyer is so educated that he browses
internet & tries to compare all the products. Various portals even help them to buy one.
Grohe –cube is tool where you can design your own bathroom and can visualize how will a
certain product look in his bathroom. In the process we are generating interest after getting
attention of the consumers.

We are now considering those consumer who are really interested to buy a grohe product.
But to bring them to this level we have to generate their attention acc. to AIDA model. So to
seek attention I have designed an adword using Google adwords. These adwords will appear
in sponsored links on Google search engine as well as google search network.
I tried to make a google sponsored link and get success to some extent Google rated me
7/10 in keyword relevance. Figure below shows the snapshot of Google adwords account.
Source : www.adwords.google.com
Fig. showing the snapshot of google adwords account
The encircled section is the sponsored link I created although it does not feature on the
Google network. This link can help in creating a stimulus and attention of the web users
Grohe cube is a unique feature in Grohe portal and must be used as competitive advantage

8. Implementation of major SCM software.
Already implemented across many countries in Europe, Supply chain management is

prerequisite for a company to flourish. Distributors need to be informed about the consumer
demands & accordingly replenished. Today no distributor want a product with low mobility,
So keep low volume with them and rest to be stored at Central state distribution system.
But it’ll be beneficial to store material near to places where demand is high i.e. near to the
customer.
Limitations
1.The analysis of potential products is limited to 6 digit H.S. code level, due to the
unavailability of getting details of products imports to Australia in 8 digit H.S. code level.
2.During my study, I have identified that there are considerable differences and inherited
feature in consumer tastes, fashions and preferences of separate states within Australia.
Therefore it is very hard to identify common features of customers when analyzing
products. Also it is very important to study deeply about different states separately.
3. One of the main barrier was communication, it was very difficult to contact builder
representatives as they sometimes denied to provide with information.
4. Many times their views seemed biased and it was hard to desolate these views. So it
might affect our results
5.Pune was a new city for the surveyor so lot of precious time was wasted in wandering
from one site to other.
6. Study contains views of a small section of Pune, which might not be a true representation
of the whole sanitary industry of the country. This study is strictly conducted in Pune
municipal corporation region –Pune.

9. Appendices

Appendix – 10.1
Questionnaire
ITM Business School

Plot #25/26, Sector 4, Kharghar, Navi Mumbai - 410210
Phone No +91 22 5616 5001 / 32985592, Fax No +91 22 27580950,

Website: www.itm.edu
Name: …………………………………………….. Mail id: ………………………………….

Classification: ………
(A for Architect/ designer, B for builder/ contractor, E for End Consumer, P for Plumbing
Contractor )
1.Your income group (per annum) for end consumers’ only.

a. 5-10Lakh b. 10-15 lakh c. 15-20 lakh d. above 20 lakh
2.What Appliances do you use/ prefer to fit in your/ consumers’ bathroom /kitchen?
a.Jaguar b. Parryware c. Kohler d. Others.
3. How do you rate following for the appliances? (1 for low 5 for high)
S. No. Attributes 1 2 3 4 5
1. Ease of use
2. Aesthetic
3. Functions
4 Affordability
4. Does product brand of appliances affect your / end consumer’s choice?

5. What importance does bathroom have in your/ end consumers’ home?

a. Very important b. Important c. Not much importance d. No importance e.
Doesn’t matter
6. What are you/ end consumers willing to pay for a bathroom/ kitchen of your/ end consumers’
dream?
a. 50,000 -1 lakh b. 1lakh to 1.5 lakh c. 1.50 lakh to 2.0 lakh d. 2.0 lakh to 2.50 lakh

7. Are you/ end consumers satisfied with your/ their bathroom/ kitchen appliances?
8. Do you/ does end consumer think about changing your/ their appliances on renovation?
9. How do you rate advertisements from following sources? (1 for low 5 for high)
S. No. Sources 1 2 3 4 5
1. Print Media (News Papers, Magazines etc.)
2. TV Advertisements
3. Mall media
4. FM/ Radio Advertisements
5. Billboards
10. How much are you affected by the advertisements for your choice?
a. Very much b. Often c. Sometimes d. Not much e. Not at all
11. How often do you use internet?

a. Daily b. Twice a week c. Weekly d. Fortnightly.

Appendix- 10.2.
Research Calculations
Hypotheses Calculations
Hypothesis-1
Responses to appliances builders prefer to fit in bathrooms

Table:1
Jaguar 46
Parryware 16
Kohler 6
Other 28
Total 96
Responses to effectiveness of Product brand of appliances over builders’ choice

Table:2
Yes 54
May be 20
No 22
Total 96
Calculating expected value Calculation of χ2
(0 - e)2 /
Applying Chi square goodness of fit test (0 - e)2 e
Let α = 0.10 or α/2 = 37.52 1.45
0.05 2.51 0.26
Degree of freedom =
20.63 1.96
11
1.00 0.11
0.44 0.13
Effect
0.11 0.03
Brands Jaguar Parryware Kohler Other
0.14 0.01
Yes 25.88 9.00 3.38 15.75 54
0.56 0.10
Maybe 9.58 3.33 1.25 5.83 20
0.14 0.02
Not at all 10.54 3.67 1.38 6.42 22
Σ (0 - e)2 / e 4.07018
46.00 16.00 6.0 28

Hypothesis- 2
Actual
Lebel weight frequency weight
Very important 5 40 200
Important 4 36 144
Somewhat 3
important 14 42
Less Importance 2 6 12
No importance 1 0 0
Total 96 398
Avg. = 4.145833333
Hypothesis 3:
Calculation of Sample mean

Frequency table of samples collected
Lebel weight frequency Actual weight

Important 4 36 144 We are taking 25 randomly selected
Somewhat samples to calculate population mean.
3
important 14 42
No importance 1 0 0
Total 96 398
Avg. = 4.145833333
Calculation of Population mean
Important 4 8 32
Somewhat
3
Important 5 15
Doesn't metter 1 0 0
Total 25 3.8

Hypothesis 4:
Calculation of sample mean i.e. average value a group of people can spend to have a
bathroom of their dream.
Table:1
No of
Range Frequency f*r Observations : 96
50,000-1,00,000 52 3900000
1,00,000-
1,50,000 26 3250000 Note: r = mean of Class range
1,50,000-
2,00,000 14 2450000 f = sample frequency
2,00,000-
2,50,000 4 900000
96 10500000
sample average = 109375
Calculation of Population mean
Table:2
Range Frequency f*r We are selecting randomly 25 samples out
50,000-1,00,000 13 975000 of total population of samples in order to
1,00,000- calculate population mean
1,50,000 9 1125000
1,50,000- Standard deviation σ = 43,488.80
2,00,000 2 350000
2,00,000- . α = 0.05
2,50,000 1 225000
25 2675000
Population Avg. = 107000

Hypothesis:5
Responses to the folowing questions are tabulated
Does product brand image is affecting your choice?

Table:1
Yes 54
May be 20
Not at all 22
Total 96
How much are you affected by the advertisements for you choice
Table:2
Very much 34
Often 27
Sometimes 15
Not much 12
Not at all 8
Total 96
Cross Tabulation:
Table:3
Very Not Not at
much Often Sometimes much all
Yes 22 12 4 9 7 54
May be 6 9 5 0 0 20
Not at
all 6 6 6 3 1 22
34 27 15 12 8 96
Calculating expected value for the above observations

Table:4 Expected values
Very Not
much Often Sometimes much Not at all
Yes 19.125 15.1875 8.4375 6.75 4.5 54
May be 7.0833333 5.625 3.125 2.5 1.666667 20
Not at
all 7.7916667 6.1875 3.4375 2.75 1.833333 22
34 27 15 12 8 96

Glossary
Advertising Any paid form of non personal presentation and promotion of ideas, goods, or
services by an identified sponsir
Brand A name, term, sign, symbol, or design, or a combination of them, intended to identify
the goods or servicesof one seller or group of sellers and to differntiate them from those of
competitors,
Brand awareness all the thoughts, feelings, images, experience, beliefs, and so on that
become associated with the brand.
Brand image The perceptions and belief held by consemers, as reflected in the association
held in consumer memory.
Branding Endowing the products and services with the power of brand.
Competitive adventage A company’s ability to perform in one or more ways that

competitors can not match.
Core Values the belief systems that underlie consumer attitudes and behavior, and that
determine peoples’ choice and desire over a long term.
Core competency attribute that is a source of competitive advantage in that it makes a

significant contribution to perceived customer benefits, has applications in a wide variety of
markets, is difficult for competitors to imitate.
Cues stimuli that determine when, where, and how a person responds.
Customer perceived value The difference between the prospective customers’ evaluation of
all benefits and all the cost of an offering and perceived alternatives.

Delivery how well the products or services are deliverd to customer
Drive a strong internal stimulus
e-marketing company efforts to inform buyers, communicate, promote, and sell its products
and services over the internet
Image the set of beliefs, ideas, and impressions a person holds regarding an object.
Loyalty a commitment to rebuy or re-patronise a preferred product or service.
Marketing communication mix advertising, sales promotion, events & experience, public
relation & publicity, direct marketing, and personal selling
Marketing research the systematic design, collection, analysis, reporting of data & findings
relevant to a specific markeitng situation facing to the company.
Media Selection finding the most collective media to deliver the desired no. and type of
exposure to the target audience.
Perceived value the value promisecby the company’s value proposition and perceived by
customer
Perception the process by which an individual selects, organizes, and intercepts information
inputs to create a meaningful picture of the world
Performance quality the level at which products’ primary characterstics operate
Product assortment the set of all products and items, a seller offers for sell.
Product mix same as product assortment

Satisfaction a persons’ feeling of pleasure or disappointment resulting from comparing a
products’ percieved performance or outcome in relation to his or her expectations.
SCM procuring the right inputs and converting them into finished products; and despatching
them to the final destinations.
Target market the part of qualified available market the company decides to pursue.
Value delivery network a company’s supply chain and how it partners with specific suppliers
and distributors to make products and bring them to market.
Value pricing winnig loyal customer by charging an offordable price for a high quality
product.
Viral marketing using the internet to create word of mouth effects to support marketing
efforts and goal.


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GROHE India Pvt. Ltd.

Summer Project Report

May – June 2009

-- Under the guidance of --

Institute for Technology & Management, Kharghar, Navi Mumbai

Institute for Technology & Management, Kharghar, Navi Mumbai

Expressions have their own boundaries but this citation is an attempt to

I am extremely grateful to GROHE India Pvt. Ltd. for giving me the

Above all, I am thankful to the almighty ‘Bhagwan’ for empowering me and

Institute for Technology & Management, Kharghar, Navi Mumbai

We have focused on the brand awareness among builders, contractors, architects

Institute for Technology & Management, Kharghar, Navi Mumbai

Institute for Technology & Management, Kharghar, Navi Mumbai

Institute for Technology & Management, Kharghar, Navi Mumbai

Institute for Technology & Management, Kharghar, Navi Mumbai

Institute for Technology & Management, Kharghar, Navi Mumbai

Institute for Technology & Management, Kharghar, Navi Mumbai

Modest Beginnings and Postwar Construction Boom

Institute for Technology & Management, Kharghar, Navi Mumbai

Entering the U.S. Market in 1975

Institute for Technology & Management, Kharghar, Navi Mumbai

Institute for Technology & Management, Kharghar, Navi Mumbai

In the mid-1990s increasing numbers of Asian competitors flooded the European

Institute for Technology & Management, Kharghar, Navi Mumbai

To position Friedrich Grohe as a "world leader in water technology" the company

Going Private in 2000

Institute for Technology & Management, Kharghar, Navi Mumbai

Institute for Technology & Management, Kharghar, Navi Mumbai

Institute for Technology & Management, Kharghar, Navi Mumbai

Institute for Technology & Management, Kharghar, Navi Mumbai

Faucets Showers Thermostats Accessories

Institute for Technology & Management, Kharghar, Navi Mumbai

Grohe is a company having high technology products as compared to its competitors, so

Institute for Technology & Management, Kharghar, Navi Mumbai

A Grohe campaign Called the GROHE "Enjoyment Guarantee," the promotion

Institute for Technology & Management, Kharghar, Navi Mumbai

Institute for Technology & Management, Kharghar, Navi Mumbai

1. To understand the consumer’s buying behavior of luxury sanitary products.

2. To prepare a database of future customers of Grohe products.

3. To do a competitor analysis of Grohe India.

Knowing your Competitors inside out is as important as knowing your consumers.

4. To study supply chain of Grohe India.

5. To develop an advertisement for Grohe India.

Institute for Technology & Management, Kharghar, Navi Mumbai

The management problem can be avowed as

We have to design certain Hypotheses on a range of research objectives. These

Institute for Technology & Management, Kharghar, Navi Mumbai

Determining relevant variables

It is inevitable to determine the key variables, in order to define a management

Institute for Technology & Management, Kharghar, Navi Mumbai

Institute for Technology & Management, Kharghar, Navi Mumbai

1. Choice of Appliances is independent of Brand image of product.

3. Bathrooms are considered important portion of house by the population.

5. People always consider new brands for renovation.

6. Brand image of appliance is closely co-related with advertisements effectiveness.

Institute for Technology & Management, Kharghar, Navi Mumbai

1. Does product brand of appliances affect your / end consumer’s choice?

2. What importance does bathroom have in your/ end consumers’ home?