SESSION 22

CONTROLS
COMPANY : Bajaj Electricals LTD
PRODUCT: Water heater
TEAM 7

SUBMITTED BY:
PUNEET SINGH DHANI (PGFA1939)
UTKARSH PADIYAR (PGFA1959)
SHARON ELIZABETH JOSHI (PGFA 1947)
RAVINA SINGH (PGFA1941)
AAYUSHI BHANDARI (PGFA1902)
Marketing Objectives for 2020-21
• Increase sales revenue by ₹79cr for FY2020-21 i.e. from ₹394 crores to ₹473
crores. (1)
• This will lead to an increase market share from 14% to 14.6% for FY2020-21

Justification:
• For the past 10 years, sales revenue for Bajaj Electricals Ltd water heaters has
increased by approximately 5% YoY.
REASON BEHIND THE OBJECTIVE(1)

MARKET GROWTH RATE= CAGR 10%

BAJAJ ELECTRICALS MARKET SHARE= 14%
WATER HEATER MARKET IN FY2018-19 = Rs. 2840 crores
PROJECTED WATER HEATER MARKET IN FY2020-21= Rs. 3240 crores
BAJAJ SALES REVENUE IN FY2019-20= Rs. 394 crores (6% of the company’s total revenue)
INCREASE IN SALES BY 20%(Rs. 473 crores) would lead to the total market share of 14.6%
 Marketing Budget for 2020-21
  INR (₹)
Revenue from operations 4730000000
Cost of material consumed 310200000
Gross revenue 4419800000
Marketing Expenses  
sales force 230364000
technology 17948898
distribution cost 233280000
shelf space 30000000
freight 12149968
Event: Exchange its time to change campaign 12097800
T.V Commercials(Colours, Sony TV, Aaj Tak, Zee
News) (1) 25740000
Print Media(Hindustan Times (Hindi) & Time of
India) (2) 46777500
Social media advertisements  
YouTube 11000000
Facebook 5500000
Advertising Agency Commissions 7251750
website and digital 1400000
PR 10000000
trade promotions 30000000
commissions on sales 2928164.8
discount cost 5000000
Total 681438081
Assumptions
• Cost of material consumed = 6% of total material cost+ 10% increase
• Technology = 6% of total R&D+ 10% increase
• Distribution cost = 3% of total expenses + 20% increase
• Commission on sales : 6% of total commission on sales
Notes (1)
Channels Cost (₹)
15000 per 10 seconds,
Star Plus, Colours 12-7 pm time slot
4000 per 10 seconds,
News 12-7 pm time slot
5000 per 10 seconds,
Sony 12-7 pm time slot
39000 per 10 seconds,
For all channels 12-7 pm time slot
Frequency = 5 times a day for 120 days 23400000
   
Notes (2)  
PAN India display ad rate per cm square 10500
PAN India display ad rate (10 by 15 sqaure cms) for one day 1575000
Frequency= 9 times in 3 months 42525000
Marketing Profitability Metrics

Net sales 4730000000

Cost of goods sold 3,20,00,00,000
Marketing expense 681438080.8
Net marketing contribution 84,85,61,919
Marketing Return on sales 18%
Marketing ROI 125%

• Marketing ROI is 125% since marketing expense is low. Water heater is

a matured market, which is why our overall marketing expense is low.
• Out of every ₹ 100 sales the product returns ₹18.
 Assessing performance control measures
Type of measures Input Measure Intermediate Measure Output Measure
Measure now used Extensive distribution RREP programme More wide
availability of
product
Suggested changes/ • Implementation of • E-commerce sales Increased sales
additions sales planning system • Retail displays accepted- revenue.
• Intensive Product Good shelf positioning.
Knowledge training.
• Total sales expense

• Increased distribution Increased market

breadth for the product. share
• Calls per new account-
Identifies what time spent
linked to the sales
strategies.

• Product quality perception

• Increased no. of press Customer
mention. satisfaction &
• Creating Awareness, liking & attitudes.
interest.
Firm Functioning Control
  Difficulties Suggestions
External 1) Shelf Space Presence As compared to competitors Bajaj water
  heater shelf space is low.
More benefit (schemes, discount,
commission) should be given to retailer in
order to increase.

  2) Social Media Presence is low Expenditure on social media presence

needs to be increased as compared to
competitors.

Internal 1) Technology Advancement More amount needs to be invested in R&D

  to improve the design, increase pressure
bar as well as technology.

  2) Design Up gradation Improve design of water heaters as

competitors introducing new shapes.
 Assessing Strategy Control
Market strategy changes based
on:
Changed market conditions Technological advancements,
Increase in social media presence,
Increase in E-commerce sales
Potential actions to avoid future
problems with strategy control
• Check customer engagement
regularly through social media
analytics
• Addressing customer queries
within 24 hours
• Monitor quarterly sales form e-
commerce channels