MARKETING PLANNING AND IMPLEMENTATION

ASSIGNMENT 2

ANALYSIS OF SALESPERSON INTERVIEW

GROUP-6
DIVYA TRIPATHI BJ21020
KRAMADHATI BHARADWAJ BJ21027
NIKHIL VASHISHT BJ21034
PRIYANKA AGRAWAL BJ21041
SARBANI DUTTA BJ21048
SUBHASISH DASH BJ21055
ARYAN KUMAR SINGH BJ21181
ABOUT THE INTERVIEWEE

Our interviewee is Mr. Hadnoor Murali Shekhar, who has more than 34 years of experience
in various countries in the sales and marketing department in the solar and renewable energy
industry.

He earned his Diploma in marketing from Osmania University, Hyderabad, in the year 1987
and started his career in a sales role in RES, one of India’s oldest renewable energy companies,
for over five years. He then worked for ‘Oman solar systems,’ Oman, for about 22 years,
where he started as a sales manager across B2C and B2B divisions and managed sales and
marketing for different power projects across the Middle East and Africa. He eventually
became the head of sales & marketing for the D2C division of the company.

He is one of the co-founders and the head of business development of ‘Ardra Power,’ a
company based out of Hyderabad, specializing in end-to-end large-scale solar civil engineering
works.

INDUSTRY BACKGROUND

Renewable energy is the energy derived from natural resources such as sunlight, wind, water,
etc. They are essentially classified as limitless as they can replenish in less than human lifetime
without causing any harm to earth’s resources. Our interviewee has worked majorly in the solar
industry. By 2022, India hopes to have 175 GW of renewable energy, including 100 GW from
solar energy, 10 GW from bio-power, 60 GW from wind power, and 5 GW from small
hydropower plants1.
The GOI has initiated the Production Linked Incentive (PLI) scheme to promote the
manufacturing of solar panels in India. The firms such as RIL, Adani Group, and TATA have
shown interest in the same2.
As of now coal accounts for 70% of energy needs of India while solar accounts for only 4%.
By 2030 India aims to increase the contribution of solar to 30% under it target of setting up
450 GW renewable capacity3.
It is an industry through which nation aims to achieve its target of Paris Climate Agreement
commitments.

Based on our interview with Mr. Hadnoor Murali Shekhar, we have analysed industry trends,
changes, impact on marketing practices and business implications of changing policies in the
broad segments ahead.

1
https://sustainabledevelopment.un.org/partnership/?p=34566
2
https://economictimes.indiatimes.com/industry/renewables/ril-adani-17-others-evince-interest-to-set-up-solar-
pv-units-under-pli-scheme/articleshow/86454562.cms?from=mdr
3
https://www.iea.org/reports/india-energy-outlook-2021
INDUSTRY TRENDS OVER THE YEARS

The solar industry has seen a massive vertical growth in all aspects make it much more lucrative
than it was 10 years ago. India’s solar story is one of minimizing renewable energy costs with
constant support from the government and private sector alike. From 2010 to 2016 the installed
solar capacity rose from 10 MW to 6000 MW, a climb of 600 times in just 6 years4 made
possible by the government’s focused approach and other conducive factors which fuelled this
growth. Some of the notable trends include:

I. Cost

Every time the global solar capacity doubles, the price of solar modules decreases by 20%.
Therefore, at the rate at which the global solar capacity is growing it is not too long before
every rooftop is equipped with solar panels. To put it in numbers, the global solar capacity
grew from 40 GW to 580 GW, at a growth factor of 14% between 2010 and 2019. Since 2010,
costs have fallen 82 percent (for photovoltaic solar). Hence the return for money invested in
renewable energy is much higher than it was in 2010.

II. Technological Maturity

Technology maturity has gone up significantly. Although it began with polycrystalline solar
panels (with efficiencies ranging from 13 to 17 percent), India is swiftly moving toward
monocrystalline modules, which have a greater efficiency (24 per cent). India is focused on
350 Wp and higher watt peak modules to harvest more energy from the same size module as
the Passivated Emitter and Rear Cell (PERC) method becomes more popular. Other
components of PV modules, like as backsheets, Ethylene Vinyl Acetate (EVA), and frames,
are also witnessing a technological revolution. Back sheet production technologies such as PET
(Polyethylene Terephalate), PVDF (Polyvinylidene Fluoride), and PVF (Polyvinyl Fluoride)
are becoming more popular among developers and producers.

III. Government Incentives

The Ministry of New and Renewable Energy (MNRE) and Solar Energy Corporation of India
(SCEI) have been instrumental is making India one of the fastest adopters of Solar Energy. Tax
incentives such as the Accelerated Depreciation Benefit and tax holiday announced under 80-
1A provided a huge relief to solar developers with tax breaks which were necessary. Initially
government provided up to 30% subsidy for all rooftop solar projects but now it is restricted to
non-profit and government buildings. With declining costs and increasing efficiency,
government has been reducing or discontinuing most subsidies.

Furthermore, by 2022, the government intends to install 175 GW of renewable energy,

including 100 GW of solar and 60 GW of wind5. The country has invested more in solar PV

4
https://economictimes.indiatimes.com/small-biz/productline/power-generation/how-india-in-a-short-period-of-
time-has-become-the-cheapest-producer-of-solar-power/articleshow/70325301.cms?from=mdr
5
https://www.energetica-india.net/articles/technological-advancements-in-the-solar-sector-in--india-evolution-
for-the-past-decade
 than it has in all fossil fuel electricity generating combined. As a result, the solar energy market
in India is projected to be driven by government programmes and ambitions to expand
renewables' proportion of the energy mix6.

CHANGE IN THE MARKETING PRACTICES

Outside India solar products are primarily marketed via various online mechanisms using the
major digital marketing tools like SEO, SMM and targeted advertisements. But through our
interaction with Mr. Shekhar we were informed that in our country the scenario is completely
different. As mentioned previously, even the government is encouraging and providing
incentives for adoption of renewable sources of energy for sustainable growth and the market
size has grown significantly in the past few years.
Majorly the marketing of the product follows a push strategy for retail and commercial users.
They rely on cold calling potential clients and differentiate the product that they have to offer
from the competitors. Most of the cold calling is done based on the information on the websites
of potential clients, hence they promote their product directly to the end user and explain all
the nuances of the product to them. This helps them maintain a good sales conversion rate.
These end consumers majorly consist of small industries, colleges, et cetera.
Major consumers are big corporations and govt, who release tender on websites or public
platforms, hence they target the same as well to bid for the tenders. Lastly, they heavily rely
on word-of-mouth publicity which puts an onus on them to keep the quality and service of the
product at a respectable level to maintain the consumer perception of the brand.
We were informed that advertisements and other such mediums are not very helpful as solar
transformation is generally a long duration process which doesn’t make sense to advertise.
Along with that, the requirements of each client are different, and a generic advertisement
doesn’t make sense for the sellers.
The major marketing changes are based on the policy changes that govt implements as most of
the products used for the solar products are imported by them. Hence, high excise duty makes
it difficult for them to sell their product. Along with that, over the past few years there has been
a growth in the number of the competitors in the sector and the efficiency of the products. Most
of the discussions inside the marketing department are based on the govt policies and the
technologies, as they are firm believers of the line that a good product will always beat its
competitors.

DIFFERENCE BETWEEN DOMESTIC AND INTERNATIONAL MARKETS

Mr.Shekhar has worked extensively across India and the Middle East. He pointed out the
following key features of the two markets:

- The Indian market is significantly larger in terms of volume which is evidently smaller in
case of the Middle East. Because of smaller volume (due to smaller countries) there are several

6
https://www.mordorintelligence.com/industry-reports/india-solar-energy-market
 players pitching in from different countries, making the competition tougher in the Middle
East.

- Further, there is abundant manpower in India and material can be locally sourced or procured,
except some solar modules that are imported. The recent push received through government
policies like Make in India has led to several companies coming up locally and manufacturing
modules leading to higher availability of materials in India at much cheaper rates, as compared
to the Middle East.

- Finally, the approval rates for projects in India are much faster. For instance, a 1 MW solar
project in India takes hardly 3 months to complete whereas in the Middle East, the government
itself gives a timeframe of 18 months for project completion. The extended timelines there are
primarily because everything needs to be imported there. This makes a huge impact on the
manufacturing firms since faster timelines enable them to cater to higher volumes, leading to
higher profits and remaining competitive in the market.

Therefore, it becomes evident to us that analysing the market factors and identifying the market
to launch your business is a much-needed task that can truly ensure if your business would
succeed or not. In this case, the role of production volume, market demand as well as
government policies plays a critical role.

CHANGES IN TECHNOLOGY OVER THE YEARS AND ITS IMPACT

Technology has been advancing at a remarkable pace. Through Mr. Murali’s extensive
experience in the industry, we were able to understand how the technology has changed in the
solar energy domain over the years and how it has impacted the business and their marketing
practices. The conversion efficiency had been about 7% when the solar energy sector had been
initiated about 35 years ago. The conversion rate increased to 12-14% eight years ago and in
the present time, it is about 20-21%. Major technological leaps have enabled the
customers/clients to increase their consumption of solar energy as the set-up pre-requisites have
drastically decreased over time. For instance, with the current tech, the area required to set up
the solar panels is less and the output per unit area has also increased significantly – roughly
8-10 watts per square foot of solar panel area.
Additionally, with the newer manufacturing technologies, the prices of manufacture and
installation of solar panels has decreased over time – from about Rs.17-18 per unit to Rs.2.40
per unit. This, coupled with the government offered incentives, the customer profitability has
also increased in installing solar panels. The marketing efforts are now more focussed towards
highlighting these benefits to the client along with pitching the environmental benefits of the
same. Mass market acceptance of solar energy has increased over the years and the demand is
met by timely supply due to innovation in technology.
With parallel industries (like electrical appliances) innovating and launching advanced
products, the company must stay updated with all the technological progress. This furthermore
highlights the need to have inter-departmental cohesion in order to make the most of the
changing times and technology.

REASONS TO CHOOSE TO FOCUS ON B2B MODEL INSTEAD OF DTC MODEL

Earlier it was believed that the biggest segment was the domestic segment due to its sheer size.
But the industry observed, especially in India, that the area available to install solar power
systems on the rooftop is very less and the consumption of energy is less too (~1,000 units per
month). The installed systems would only cover a part of their electricity bill even after
investing huge sums of money along with high interest rates, which made the customers
unhappy. Also in India, houses are adjacent with no gaps resulting in issues such as shadows
which limits power generation.

Lastly, there are certain benefits provided by the government to certain sectors which aren’t
given out to households. For instance, the government of India has launched the ‘PM-KUSUM’
scheme for agricultural farmers where they encourage the use of solar water-pumping/
irrigation systems. The farmers may generate power through the system and irrigate their land,
and the remainder of the power generated can be sent to the government in return for cash.

So, the Direct-to-Consumer model is not as profitable when compared to following a B2B
model with entities in the commercial and government sector. Identification of the suitable
business model helps a business leverage their strengths and remain competitive in the market.

EVOLUTION OF CLIENT POOL OVER THE YEARS

There has been a surge in commercial projects as compared to government projects. The reason
is the way solar systems are now being installed in establishments and the related investments.
Earlier, commercial entities had to spend their own money or borrow funds to install solar
systems in their establishments, which disincentivized them to move to renewable energy. But
now there has been a significant shift in how the industry operates.

Businesses now partner with investment partners from abroad to install solar systems in their
premises, without any upfront investment. The solar installation companies simply use the
premises to install solar systems using the investment partner’s funds. They install energy
meters to note down how much power is generated in that premises. Now, the business lending
its premises must be buying power from the government at let’s say Rs. 7 per unit. The investor
offers to enter into a power purchase agreement with the firm and supply power at a tariff of
just Rs. 4.5 per unit. Also, after operating the plant for 10-15 years, the investors give the
ownership to the premises owners, and they can enjoy the benefits of free power generation
through the lifetime of the installation (which is generally 25 years). This has incentivised
commercial establishments to move towards renewable energy more and more.
Even the government is following a similar pattern by paying tariffs for the solar installations
instead of making investments, thereby giving a huge boost to this industry.

Therefore, a business should continuously monitor how the industry is evolving in order to stay
ahead of the curve. In this case, if the manufacturers didn’t offer partnerships with investors,
they would have gone out of business since the entire industry model shifted gears.

INTERDEPARTMENTAL COORDINATION AND THE POINTS OF DISCUSSION

The marketing department follows a holistic functional strategy. It doesn’t operate in silos and
works closely with other departments. In the solar power industry, close to 90% of the material
required is imported from other countries like China. The entire supply chain revolves around
inter-departmental cooperation, from managing delivery timelines, budget requirements,
tracking the technological changes to positioning the brand as the leader in the industry.

It is crucial that goals pursued by the marketing team align with the organization’s goals. Inter-
Department communication is vital to implement the plan and integrate a consistent message
into all communication channels. Essentially, the whole of a business works together in synergy
to achieve a common mission, as well as ensure a great customer experience and a positive
brand image.

IMPACT OF THE PANDEMIC ON THE INDUSTRY

The Covid-19 pandemic has caused major operational and financial setbacks to the solar power
sectors across the world, thereby undermining the efforts to accelerate the clean energy
transitions. The solar power projects require outdoor fieldwork, which has been impossible due
to wide-scale economy shut down, supply chain disruptions, and workforce health concerns,
leading to indefinite delays in the construction progress. The projects signed during pre-
pandemic are at a standstill, and the costs for the parts have gone up significantly. Also, the
bills regarding solar cells and modules, material handling, labour costs, etc., cannot be
converted to invoices and charged to the clients till the project is completed. Going forward,
the industry will have to overcome major challenges:

• High offtake risks or delayed payments due to project completion delays.

• Rising costs of panel parts will burden already existing financial concerns.
• Reduced growth prospects due to uncertainty in future power demand.
• The smaller players in the industry might not recover from the losses, and the bigger
players will also take some time to bounce back.

At the same time, this could also trigger the government, the solar industry, and other
stakeholders to chart the roadmap to achieve the solar energy targets.
CONCLUSION
The interview gave us a deep insight into the primary marketing practices used in the solar
power industry. The accurate segmentation of the market into government, commercial and
households has enabled the marketeer to streamline their efforts to maximize penetration in
each segment- the current focus being small industries and colleges. The conversation also
highlighted the importance of harmonization between departments and the need to stay updated
on all technological progress. As a marketing personnel, keeping up to date with trends and
using relevant strategies to adapt to the changed is crucial.
APPENDIX:

Mr. Murali Shekhar Hadnoor’s business card