CONTENTS

Title of the Section

P
-Project Objective
-Introduction
-Company Overview
-Area Of Business
-Air Conditioning Industry
-Methodology
-Analysis
# Product
# Price
# Place
# Promotion
-Suggestions & Recommendation
Project objectives :-
The following are the heads, which were given prominence
during the primary data collection.

Information on the display of Bluestar A.C.s &

competition:-
Under this head the objective was to
u n d e r s t a n d t h e d i s p l a y a l l o c a t i o n f o r a i r conditioners in
the outlets and also making a note of the shelf space and the
window display space allocated to each of the brands. Also, making a
note of how many Bluestar units are on display and what is the strength
of the competitors. The main focus when
co n sid ering th e co mp etito rs w as o n L.G., Sa msu n g , O-
Gen eral, Hitac h i, Carrier, Go d rej,v o ltas an d o th ers in clud in
g Vid eo co n , Ken star, On id a W h irlp o o l .

Display and use of support material:

The support material in the case is Carton Display, Poster,
Sticker, Dangler, Leaflet ,Dealer Certificate, Working Window
Display, Glow Signs and stands. The objective here is to verify
whether all the support material is in place. How much support
isg i v e n t o t h e v a r i o u s b r a n d s a t e a c h o u t l e t ? T h e o b j e
c t i v e h e r e i s t o c h e c k t h e effectiveness of the support material in
increasing the brand visibility, awareness
andi n a d d i t i o n t h e r e w o u l d b e a s t u d y o f t h e v a r i o u s p
r o m o t i o n a l a c t i v i t i e s b y t h e competition to woo the customers
and success rates of these promotional activities.
Information on the performance of the
Demonstrators/Salesperson:
under this head the focus will be on the
a c t i v i t i e s c a r r i e d o u t b y t h e demonstrators/
Salesperson on the shop floor. Also, there will be
r a t i n g o f t h e demonstrators on three aspects- 1) Communication
skills 2) Technical Knowledge and 3) Enthusiasm shown. Apart
from this there will also be a study of which brand the
demonstrators/salespersons are pushing, what they have to say
about Bluestar. There will the top preference of demonstrators from
every outlet which will give an idea of who is pushing what and what
are the most talked about positives and negatives of Hitachi.

Cleanliness of the displayed product:

A damaged or unkempt display unit will create a bad impression
of the brand. Also ,the approach to the unit on display has to be
tidy and easy in addition to the clean su rro u n d ing s o f th e
d isp lay u n it to serv e th e p u rp ose. As a resu lt th e co n d itio n
in which the display units are is also one of the objectives of the project.

Prominence given to Bluestar Air Conditioners :

For a brand to sell there is a lot of nitty -gritty that goes into it
like the prominence given to a brand. This can be adjudged by the
location of display on the shop floor, the lighting, the space provided
around where the product is centered, on lev el at wh ich th e
d isp lay u n it is k ep t g ov ern s the v isib ility.

Dealers Level Activities:

Dealers are the main part for any product that can create and damage the
image of a product. So this project also includes the study at dealer level
which includes the
Introduction
Indian Consumer durables market used to be dominated by few domestic
players
likeG o d r e j , B l u e s t a r , A l l w y n a n d K e l v i n a t o r . B u t p o s t
liberalization many foreigncompanies have entered in
t o I n d i a n m a r k e t d e t h r o n i n g t h e I n d i a n p l a y e r a n d domi
nating Indian market the major categories in the market
REFRIGRATOR, AIR CONDTIONERS AND WATER
COOLERS.In d ia b ein g th e secon d larg est g ro win g eco no my
with h u g e con su me r class h as r e s u l t e d i n c o n s u m e r d u r a b
les as the fastest growing industries in India. LG &S
AMSUNG the two Korean companies have been maint
a i n i n g t h e l e a d i n t h e industries with LG being leader in almost
all the categories. Consumer durables major Bluestar Limited will invest
nearly Rs 500 crore in India this year in research and development,
brand-building and other marketing initiatives .The company, having
a turnover of Rs 500 crore and market share of 17 per cent, is
investing Rs 500 crore on brand-building and other
marketing initiatives and around Rs 5 0 0
cro re o n resear ch an d d ev elo pmen t , b esid es lau n ch ing
n ew p latf o r ms in information technology and related areas, Bef o re
th e lib er alizatio n of the In d ian econ o my, on ly a f ew
co mp an ies
lik eKelv in ato r, Go d rej, Allwy n , an d Blu estar were th e maj
o r p layers in th e co n su mer d u r ab les mark et, a cco u n tin g fo r
n o less th an 9 0% o f th e mark e t. Th en , af ter t h e liberalization,
foreign players like LG, Samsung, Whirlpool, Daewoo, and Aiwa came
into the picture. Today, these players control the major share of the
consumer durables market.
Consumer durables market is expected to grow at 8-13% in 2009-2010.
It is growing very fast because of rise in living standards, easy access to
consumer finance, and wide range of choice, as many foreign players are
entering in the market. With the increase in income levels, easy
availability of finance, increase in consumer awareness, and
introduction of new models, the demand for consumer durables
has increased significantly. Products like washing machines, air
conditioners, microwave ovens, color televisions (CTVs) are no
longer considered luxury items. However, there are still very few
players in categories. Co n su mer d u rab les secto r is
ch aracterized b y th e e me rg en ce o f MNCs, ex ch an g e offers,
discounts, and intense competition. The market share of MNCs
in consumer d u rab les secto r is 6 5 %. MNC's majo r targ et
is th e g ro win g mid d le class o f In d ia. MNCs offer superior
technology to the Consumers whereas the Indian companies
compete on the basis of firm grasp of the local market, their well-
acknowledged brand name, and hold over wide distribution network.
However, the penetration level of the consumer durables is still low
in India & there is a yet a huge untapped rural market waiting to
be exploited.
COMPANY overview

Blue Star Limited (originally known as Blue Star Engineering (Bombay) Pvt Ltd)
was founded by Mohan T. Advani in 1943. The Company was initially engaged
in reconditioning of refrigerators and air- conditioners .Today, Blue Star is India's
largest central air-conditioning company with an annual turnover of Rs. 600
crores , a network of offices in 29 cities and three modern manufacturing facilities
.Blue Star became a public limited company in 1969 with its corporate
headquarters at Kasturi Buildings in Mumbai .Blue Star is India's largest and
most preferred air-conditioning and commercial refrigeration company .With six
decades of experience in providing expert cooling solutions, Blue Star has been
associated with the most prestigious corporate and commercial installations in the
country.

Areas of business
 The company mainly operates in the following
areas:
Company involved mainly into the design and manufacture of
industrial equipment ,management and execution of air
conditioning , sourcing ,installation and servicing of technology-
based systems, and representation of
globaltech n o lo gy lead ers, se rv in g d iv erse ind ustrial secto rs
an d ap p lication s. Blu estar ' operations have been organized into
three independent business-specific clusters. Each of these has its own
facilities for market coverage and service to customers. Namely:

Air Conditioning Industry

Air Conditioners give respite from summer heat and have become a
necessity. They have made our lives home and switch on your air
conditioner and let the fresh air relax you and rejuvenate your spirits.
Once again you are ready to shop out with your family or help your
spouse in household work or spend some quality time with your kids.
India you desperately need an air conditioner. In this scorching heat it is
only an air conditioner that can give you some respite and make you
livelier and energetic. Air conditioners also increase the working ability
of workers.
METHODOLOGY

Research methodology is considered as the nerve of the project.

Without a proper well-
organized research plan, it is impossible to co mplete
t h e p r o j e c t a n d r e a c h t o a n y conclusion. The project was based
on the survey plan. The main objective of survey was to collect
appropriate data, which work as a base for drawing conclusion and
getting result.

Therefore
,
research methodology is the way to systematically solve the research
problem. Research methodology not only talks of the methods but
also logic behind the method issued in the context of a research
study and it explains why a particular method has been used in the
preference of the other methods

.
Research design:
Research design is important primarily because of the increased
complexity in the markets well as marketing approaches available
to the researchers. In fact, it is the key to the evolution of
successful marketing strategies and programmers. It is an
important tool to study buyers behavior, consumption pattern, brand
loyalty, and focus market changes. Are search design specifies the
methods and procedures for conducting a particular study.
According to Kerlinger, Research Design is a plan, conceptual
structure, and strategy of investigation conceived as to obtain answers to
research questions and to control variance.
The first step of the project was to collect information regarding the
distributors, sub dealers with multi product/ multi brand portfolio
which included products like A.C. Televisions, Refrigerators and
Washing Machines for the whole Mumbai region (also including the
sales and services that are exclusive dealers for A.C).Fo r th is
p u rp ose I to o k th e h elp of v ario u s n ewsp ap ers lik e T.O. I.,
Eco n o mic Ti me s, Midday and Business Standard & also Just Dial.
All the ads of Consumer Durables, which appeared in these papers, were
noted down and the necessary details like the name of the shop, the
phone number and the location of the shop was fed into the computer in
an excel format and used as the database during the course of the survey
.The data was then structured and the whole Mumbai Region was
divided into three Zones .Then I set about the job of deciding upon
the format of the Questionnaire that would beused while collecting
data from the retailers/dealers. The initial format was then tested
for wh eth er all req u ired in fo rma tio n was o b tain ed f ro m th e
sh o wro o ms af ter wh ich th erequired changes were made to get the
optimum results. Af ter f reezin g th e f o r mat I h ad to d ecid e o n
th e ro le th at wo u ld en ab le u s to g et th e complete information
that I was looking for. I had various options:

To go to the outlets as personnel from Bluestar.

To go to the outlets as Management Student.

To go to the outlets disguised as customers. I realized during the format

the best and most unbiased Information was provided to me when I
visited the outlets as a Management Student. Hence a call was made by
me
to visit the outlets as a Management Student so that the purpose
of getting complete and unbiased information is served.
Data collection methods:
Af ter th e resea rch p ro b le m, w e h av e to id en tif y an d select
wh ich typ e o f d ata is to research. At this stage; we have to
organize a field survey to collect the data. One of the important
tools for conducting market research is the availability of necessary and
useful data.

Primary data
: For primary data collection, we have to plan the following four
important aspects.

Sampling

Research Instrument

Secondary Data
- The Companys profile, journals and various literature studies are
important sources of secondary data.

Data analysis and interpretation

1.Questionnaires 2.Pie chart
Questionnaires:
This is the most popular tool for the data collection. A questionnaire
contains question that the researcher wishes to ask his respondents
which is always guided by the objective of the survey.

Pie chart:
This is very useful diagram to represent data, which a
r e d i v i d e d i n t o a n u m b e r o f categories. This diagram consists
of a circle of divided into a number of sectors, which are proportional to
the values they represent. The total value is represented by the full create
.The diagram bar chart can make comparison among the various
components or between a part and a whole of data.

Preparation of report:
The report was based on the analysis and presented with the findings and
suggestions. The sample of the questionnaires is attached with the report
itself.

Sample unit:
Dealers, Employees, Professionals ,Businessmen, House wife ,Working
women, Students.
Analysis
PRODUCT & SERVCE:
On the whole the data collected shows that under the various
heads taken to conduct the survey Bluestars performance overall is a
mixed bag or I can say that it was 75:25of (good: bad). Finally I landed
up to five most popular brands who are ruling the AC market; Bluestar
, LG, Samsung, Carrier and Hitachi. On the basis of these brands
the further study has been carried out .From the survey conducted
we can determine that the overall presence of Bluestar is equal to
the other four brands, which would primarily mean that the reach of the
brand to the people is satisfactory. Brands like LG and Samsung doing
well because of
their o v e r a l l b r a n d i n g d u e t o t h e i r p r e s e n c e i n o t h e
r c o n s u m e r p r o d u c t l i k e L C D , refrigerators, Washing
Machines etc. But, on the counts of Shelf Space and Window Display
Bluestar is lagging behind and Samsung thus depriving the potential
customers the first hand experience of the f u n ction in g of th e
AC wh ich mig h t also mean th at th e b ran d s which h av e
mo re presence on the shelf might capture these customers.

The POP mat er i al whi ch i s quit e qui nt essent ial when i t

comes t o convi nci ng t he customer about the Brands
features, providing it distinctness from the host of
other competitors and in establishing the Brand Identity in the
minds of the customers. In the survey it was found that Bluestar is in
the second position after LG when it comes to the POP material in the
outlets but this is not the complete picture the presence of terms of the
support material. Continuing about the support material, the best
support any brand can have is the word of mouth preference that the
dealers or the salespersons give to the customers as only what they
push has the maximum chance of selling. In the outlets visited it was
found that Bluestar although second, again lags behind LG by some
margin. While speaking about there preferences the dealers or the
salespersons invariably give the attributes of the brand that they are
pushing and the negatives of others that they advise the customers
against. The good news here is that the most spoken about positive
attribute for Bluestar (the good quality attribute) as against the most
spoken about positive attribute of LG (the low price attribute). So, we
can safely assume that the positive attributes of Bluestar are spoken
about by the dealers/sales persons. But here again there is a spoiler,
which are the negative attributes of the Brands that the
dealers/salespersons use to dissuade the customer buying a particular
brand. While dealers claimed LG to be less durable, there were outlets
that claimed that Bluestar is priced too high. The result of which is that
all the good work of the positive attributes is nullified.

The best and the biggest international brands are here in India but the
irony if it all: where is the after-sales-service? So integral to a brand, so
critical for its success and sotaken for granted in developed
markets! In India, after sales service is, for want of
a bet t er descri pt i on, t he pi t s. So what s st oppi ng t he seco
nd best a i r con di t i oni ng companies from pulling out all the stops
when it comes to providing the best service? Do customers expect for
too much? Or is it that in India they dont really care. Brand Equity
fanned out to MNC as well as Indian consumer durable companies,
stockiest and dealers, analysts and market researchers to get a feel
of whats really keeping after sales from being used as a cutting
edge marketing tool in pushing products across categories
.Cust omers sup port f ol l owi ng t he purchase o f a produ ct or
servi ce. I n som e cases, a f t e r -
sales service can be almost as important as the i
n i t i a l p u r c h a s e . T h e manufacturer, retailer, or service provider
determines what is included in any warranty(or guarantee) package.
This will include the duration of the warranty traditionally oneyear from
the date of purchase, but increasingly two or more years
maintenancea n d / o r r e p l a c e m e n t p o l i c y , i t e m s i n c l u d e d /
e x c l u d e d , l a b o r c o s t s , a n d s p e e d o f response. In the case
of a service provider, after-sales service might include
additionaltraining or helpdesk availability. Of equal importance is the
customer's perception of t he degree of wi l l i ngness wi t h which
a deal er deal s wi t h a quest i on or co mpl ai nt ,speed of
response, and action taken
Types of Air Conditioners offered by Bluestar:
Now when we talk of air conditioners, there are a number of makes and
modelsavailable in the market. So as to say that there is a variety of sizes
and types of ACsavailable for cooling rooms of different sizes. And in
order to choose the perfect air conditioner for your room it is always
advisable to have some extra knowledge aboutthe types of AC and their
purpose as to which one is best for what kind of room.With the variety
of air conditioners available in the market, it is very difficult tochoose
the most suitable AC for our home or office. And if we dont have a clue
aboutair conditioner then it adds to our own disadvantage. There are
mainly five types of air conditioner:
1) Window mounted
:
These are air conditioners that are usually fixed through the windows,
which have been designed typically for double hung windows. And it is
one of the most commonly used air conditioners as this is best for
cooling a single room for the simple reason that these are easy to install,
cheaper and works with almost all the wiring system of your home. The
price range varies from Rs. 12,000 to Rs. 27, 000on an average for room
size the range varies from 10 meter square - 84 meter square.

2)Split Air conditioner

: This type of air conditioner is best suited for rooms whose area is up
to 60 meter square and might cost you (approx) around Rs.16,000 to
Rs.35,000 on an average (multi-split system). A split air conditioner
consists of two parts: the indoor unit which is also called as the
evaporator unit and the outdoor unit which is known as the external
condenser box and is installed outside the room or the building. And this
is one main reason why most people opt for split ACs, as duringthe
operation, it doesnt make any noise which might distract your attention
or annoy you. Split ACs are permanent systems which can either be
installed at the floor level or on the walls or on the ceiling. However, it
can be very noisy and may create

3) Cassette Air Conditioner:

These are air conditioners that are usually fixed intothe sealing.

This ultra thin air conditioner can be installed in any narrow ceiling
.These are usually fit in places where it is not possible to fit either a
Window or Split Air conditioner. The price range varies from Rs. 68,500
to Rs. 86,500on an average.

4) Slimline Air Conditioner:

This type of air conditioner has been one of the most popular types for
certain reasons. One major reason is that they can be easily movedfrom
one room to the other and is often referred to as a mobile air conditioner.
Being portable, it is easier to store when the summer season wears off.

5)Ductable Split Air Conditioners:

Ductable air conditioners are those that are usedto condition more than
one room, in the same building
.
These kind of air conditioners are usually seen in institutions, big
organizations, hotels etc. Durables comes indifferent tonnages
depending upon the space needed to be cooled. The prices of durables
vary depending upon the ton age .Out of all the above mentioned
air conditions the maximum selling would be the Splitair conditioners
.Though window a/c will cost less and is easier to install. The downside
is you will loose your view through the window and you will have more
air

Key Findings about Product

The product range is changed very frequently and the customers are not
able to relate themselves to the products.

Spare parts are a major issue as they are not available readily. While
compare in get to market leader LG spares are readily available.

Stock outs too are a major worry as products are not available on
demand, especially during peak season.

There are a lot of complaints from customers about the machine making
a lot of noise while running.

After sales service was criticized greatly. While most of the dealers
&customers were happy with the after sales service provided by LG.

Installation too is a bit on a slower side when you compare it to LG.

Where Bluestar takes approximately 48hrs to install the a/c LG
takes half as much time.

The design & color of Bluestar air conditioners is very simple

& common.

People buy Bluestar mainly because its a Bluestar ltd. group of company & also
as it is the pioneer in air conditioners in India.
Recommendations about Product
To improve after sales services provided. Instead of providing 2
free services Bluestar must offer at least 3 like its major
competitors. Also the time when a co mp lain t is mad e an d th e
co mp lain t is at ten d ed to sh o u ld b e red u ced . Th e company
could also offer an extended warranty at a nominal rate.

Av ailab ility o f sp ares n eed s to b e lo o k ed in to . A sep arate

tea m co u ld b e to appointed to handle all spare part related issues.

Better design could give it a huge leverage as in todays world looks are
givenhigh weighed. Different color panels could be used like that used
by Godrej to give the product a better look. Also detachable panels could
be popularized
as p e o p l e c o u l d s e l e c t t h e c o l o r o f t h e p a n e l s a c c
o r d i n g t o t h e r e t a s t e & preferences.

In a lot of cases it was reported that dealers are not made aware about
new product releases hence awareness about new products should
improve then thusiasm of dealers to sell a product as well.
Pricing
Definition: Pricing is the process of determining what a company will
receive in exchange for its products. Pricing factors are manufacturing
cost, market place ,competition, market condition, Quality of product
.Following is the price list of different air conditioner of Bluestar:

Price list:
bluestar Split A C Price List Blue star Windows ACPrice
List
Product name price Product name price
Blue star-Vertis GOLD 2.0T SAC 34,500/- b.s. vertis elite 1.5 ton 21900

Blue star -Vertis GOLD 1.5T SAC 30,500/- B.S. vertis elite 1.0 ton 17000

B.s. vertis gold 1.0 ton sac 24500/- B.S. Vertis Elite 0.75 Ton 14,000/-
BS-Vertis GOLD 0.75T SAC 18,500/- B.S. Vertis Plus -2.0Ton 19,500/-

BS-Vertis ELITE 2.0T SAC 33,000/- B.S. Vertis Plus -1.5Ton 17,500/-

BS-Vertis ELITE 1.5T SAC 28,400/- B.S. Vertis Plus -1.0Ton 14,350/-

BS -Vertis ELITE 1.0T SAC 20,100/- B.S. Vertis Plus -0.75Ton 12,000/-

BS -Vertis ELITE 0.75T 16,000/- B.S. Vertis Premium 1.5Ton R 16,800/-

BS -Vertis PLUS 2.0T 28,500/- B.S. Vertis Premium 1.5Ton M 16,400/-

BS -Vertis PLUS 1.5T SA 26,200/ B.S. VERTIS PREMIUM 1 TON R 14500/-

BS -Vertis PLUS 1.0T SAC 22,500/-

BS -Vertis PLUS 0.75T SAC 15,000/- B.S. PREMIUM 1.5 TON M 140000/-

Average price 21123 Average price 16177

Average Price list or lg air conditioner

Average price of LG split A.C.

= 19800

Average price of L.G. window A.C.

= 15375

One can notice significant difference in the prices offered by LG

& Bluestar. Today market is very sensitive to prices. The customers
survey conduced reviles that nearly30% of the customers buying
decision is influenced by the price offered of a particular product. Also
most of the multi brand dealers were of the opinion that there is not
much product differentiation, almost all the features of all brands are
alike the only thing setting them apart is the price .As a customer you
would tend to choose a product which has all the features and also which
is the lowest on price. Hence LG by offering such low prices has
managed to capture the majority of the market share .The pricing policy
for dealers varies depending upon the number of units sold by
a particular dealer in a stipulated period of time (usually 1
month.).Following is the Pricing & Incentives policy for dealers.
Quantity Scheme15-50
2% On basic To
51-75
2.5% On basic To
75-125
3% On basic To
126-175
3% On basic To
176-220
4% On basic To
>220
5% On basic To
Q u a n t i t y I n
c e n t i v e s 15-50
500 on WAC & 750 on SAC
51-75
750 on WAC & 1000 on SAC
>75
1000 on WAC & 1250 on SAC

As seen from the above table it is can be seen that while Bluestar
provides a minimum of 2% to dealers selling up to 50 units and a cash
incentive of Rs. 500 on window AC& Rs. 750 on splits, while market
leader LG provides its dealers with 8% incentives for the same & Rs. 500
on window AC & Rs. 750 on splits. Hence as a multi brand dealer one
would tend to push for LG as compared to to any other brand as it
would be a lot more profitable .In nearly all the multi brand dealers
vested there primary preference was LG followed my either Bluestar or
Samsung. The best support any brand can have is the word of mouth
preference that the dealers or the salespersons give to the
customers as only what they push has the maximum chance of selling
hence it would be vital for Bluestar to offer higher margins to its dealers
if it wanted to be the primary brand spoken about my all dealers .It was
also observed that Big accounts such as Vijay Sales, Croma, Reliance
Digital, Kohinoor and Snehaanjali are offered products at nearly
22% less than small dealers .In such a scenario it would get extremely
difficult for small dealers to compete with these giants .Example: An air
conditioner sold to a small dealer for a price of Rs.25, 000 the same air
conditioner would be sold to Vijay sales for 19,500. As a dealer
there would be no ways in which you could compete with these big
dealers as far as price is concerned eventually resulting in loosing out
the customer.
Key Findings about Pricing:

Bluestar air conditioner are priced nearly Rs.2000 to Rs. 3000 higher
than LG.

The Incentives provided to small dealers is 5% less than that provided

by LG

Margins offered to big giants like Vijay Sales, Croma, Reliance Digital
etc is far more than that offered to the small dealers .As a result small
dealers would find it extremely difficult to compete with these heavy
weights.

One would rather not prefer to be a dealer of Bluestar and buy the
products from these giants themselves at a lower price than what
Bluestar can offer them. Example: As a dealer, Bluestar offers me an
incentive of 2% on 50 units sold. I would rather purchase the products
from Vijay sales at a lower price and sell it at a higher profit margin.

Spares too are a bit higher priced while comparing it to LG

Initial dealership fees of Rs 50, 000 needs to be paid to become an

authorized dealer of Bluestar.

Very low profit margins for dealers.

From time to time LG provides free installation for its customers.

Recommendations about Pricing

Increase margins for all dealers.

Along with dealership fees provided the dealer with a free Bluestar
Air conditioner. This would serve 2 benefits
firstly
the dealer will feel he s paying less as he s getting a free air conditioner
so he will not feel the pinch of selling out 50, 000 &
secondly
as a customer you tend to observe the air conditioner installed in the
dealers shop, while making your purchase decision you observe a
Bluestar ac installed in the dealers shop this will tend to boost
your buying decision & will give you confidence in your buying
decision. This would act asa promotion as well.

Reduce the margins between the big & small dealers so that the small
dealer shave a good chance of competing with these giants.

Offer incentives to dealers to achieve set targets .Example: If a dealer

meets his targets provided him/her with a free Ac or a cash incentive.

Reduce prices of Air conditioner to match LG.

Come up with nano air conditioner for the lower middle class of people.

Offer interest free loans for purchasing an air conditioner which is

already offered by LG.

Place

The logistics (Supply Chain Management) Visit to ware house

Logistics
is the art and science of managing and controlling the flow of goods,
energy ,information, and other resources like products,
services, and people, from the
sourceo f p ro du ctio n to th e mar k etp lace. It is d iff icu lt to ac
co mp lish an y ma rk etin g o r manufacturing without logistical
support. It involves the integration of information,

tran sp o rtation , in v en to ry, war eh o u sin g , mate rial h an d lin g ,

an d p ack ag in g . Th eoperating responsibility of logistics is the
geographical repositioning of raw materials ,work in process, and
finished inventories where required at the lowest cost possible.
Logistics Management
is that part of the supply chain, which plans, implements
andco n tro ls th e ef f icien t, ef f ectiv e f o rward and rev erse f lo
w an d sto rag e o f go o ds,s e r v i c e s a n d r e l a t e d i n f o r m a t i o n
b e t w e e n t h e p o i n t o f o r i g i n a n d t h e p o i n t o f consumptio
n in order to meet customers' requirements.
5Rs of Logistic
followed by Bluestar:1 . R i g h t T i m e 2 . R i g h t
P l a c e 3. Right Condition4 . R i g h t C o s t 5 . R i g h t
Handling
The Factory is located at Bhand up &Bhiwandi

there are three types of Warehouse-

1. Mother Warehouse2. Branch Warehouse3. Spare part warehouseThe
mother warehouse is that where the products from the factory are
kept and fromthat warehouse, the products are sent to the branch
warehouse.
warehouse
is a commercial building for storage of goods. Warehouses are used by
manufacturers, importers, exporters, wholesalers, transport
businesses, customs, etc.They are usually large plain buildings in
industrial areas of cities and towns. They

come equipped with loading docks to load and unload trucks; or

sometimes are loaded directly from railways, airports, or seaports. They
also often have cranes and fork lifts for moving goods, which are usually
placed on ISO standard pallets loaded into tracks.
5Ss of warehouse
, which Bluestar strictly follows.1 . S w e e p i n g 2 . S o r t i n g
3 .Syste matic A rran g e men t 4 . S i m p l i f i c a t i o n 5 . S e l f -
discipline
In warehouse
, the products are pinup with 3-color paper to get the knowledge about
the delivery.
1.
Red Card To stop the product going into market,2.Green card To
allow the product for delivery in market,3 . Y e l l o w C a r d
After the product labeled with green, allow this
t o m o v e i n market
Distribution Time:
-

Local delivery 24 hrs

Upcountry delivery 48 hrs

Within 200 km. 24 hrs.

Beyond 200 km. 48 hrs

The above distribution time is the time of delivery of products from

warehouse to themarket place, which the logistic department follows to
fulfill the demand in the marketat right time. In Bluestar, we have
the following process, which is followed in logisticthrough ERP

Order Processing

Invoicing

Indenting

ReportOrder Processing booking for dealers /distributorsInvoicing after

billing process/bill generationIndenting requirement (Pdt Unit to branch
unit)Report distributed to all
Findings about Place

It was found that Bluestar had to go through a lot of

Nitigrity processes which are time consuming hence resulting in slow

delivery.

While LG manages to delivery its air conditioners in a1 days it was

found that Bluestar delivered its air conditioners in 2 to 3 days.

The installation of the air conditioner too was found to be on the slower
side while comparing it to market leader LG.

The market penetration can be increased by having more number of

dealers.

Only 2 warehouses in Mumbai.

Recommendations about Place

Make process short & simple to ensure quicker delivery of final product.

Improve the pace of installation at customers place.

Reduce the delivery time from 2 to 1 day.

Decide on the best possible channel of distribution keeping in mind

companys value to its customers.

Developing operational excellence in sales forecasting, warehouse

management, transportation management & material management.

Having more number of dealers to increase the market reach.

Having more number of warehouses at strategic locations could reduce

the time lag.

Reducing the cost of logistics & passing on the benefit to the consumer.
Promotion:
Retailers communicate with customers through five vehicles

Advertising

Sales Promotion

Publicity

Store Atmosphere &

Personal selling

Advertising:

form of paid communication to customers using mass media like

TV, Ne wsp ap er, an d Rad io . Here th e ad sp en d is so meth in g
th at h ad to b e v ery carefully planned. In the months preceding
summers (April to June & October) t h e ag g ressiv e ap p ro ach
n eed s to b e adop ted , as th e AC mark et in In d i a is seasonal.
The key here is to provide information to the customer when he is on
th e lo o k o u t.
Sales promotion
: Paid impersonal communication activity that offers incentive to
customer to purchase a product like coupons, contests, discounts
etc. in the bigger

outlets like Vijay Sales there are invariably schemes offered on the
purchases, whichinclude free tour packages, discount coupon schemes
etc. which increase the footfallsin the showroom thus increasing the
probability of sales. The showrooms that offer such schemes are
of prime importance to the company as the awareness
regardingsuch showrooms is very high amongst the customers.

Publicity

: Is communication through significant unpaid presen

t a t i o n a b o u t t h e retailer. For example the newspaper coverage
of any special event conducted by theretailer. In newspapers like the
Midday there are a lot of Ads give by the retailers for their showrooms
along with the brands of AC, this also fetches important publicity tothe
AC companies.
Store atmosphere

: paid impersonal communication is combination of stores physical

characteristics like signs, displays, color, lighting etc, which create an
image about stores service, pricing, fashion ability of merchandise. This
is one of the areas that we covered under our project. The figures for
store atmosphere are- of the total 50 outlets for the Mumbai Region
22 had the POP Material for Bluestar Air Conditioners. This
figure is second after LG, which has a presence in 31outlets with its POP
Material.

personal selling

: Is communication process in which sales people assist customers

ins a t i s f y i n g t h e i r n e e d s t h r o u g h f a c e - t o -
f a c e c o n v e r s a t i o n . I t i s p a i d p e r s o n a l conversation.
This as another head covered under the project. The Dealers/Sales
people at majority of the outlets speak highly of LGs low price & good
quality (21 outlets),as the most running brand (31 outlets) and good
after sales (10 outlets). Whereas for Bluestar the most spoken about
positive features are good quality (19 outlets), and better electricity
efficiency (20 outlets). Thus the positive feedback from the outlets is
almost
Key Findings about Promotion

A lot of dealers as well as customers could not recollect a Bluestar Ad.

The emotional appeal does not really make the customers buy a product.

A lot of customers did not know that Bluestar is a BLUESTAR

LTD. product hence.

20% of customers interviewed said LG was there favorite Air

conditioner ad followed by Hitachi at 16%.

In 2008 Rs 1250.76 lakhs was spent towards advertisement expenditure

which is substantially less when you compare it to LG.

Other forms of media too are now being used by Bluestar to advertise
like Radio, Print ads, Hoardings etc this was not done enough earlier.

It was found that in most of the multi brand dealers the branding of the
dealers shops were done by LG.

In nearly all the LG dealers a certificated of dealership was given to

dealers which also stated that LG is the Number 1 brand in
air conditioners.

It was also found that LG organized exhibitions to showcase its products

which Bluestar does not do.

LG also provided free installation as a promotional strategy.

LG also throws parties to its dealers every year also LG sends its dealers
for paid holidays on achieving of set targets.
Recommendations about Promotion

Highlight brand BLUESTAR LTD. in the ads.

Spend a lot more on outdoor advertising.

Appointed Bluestar salesmen in popular showrooms like Vijay Sales,

Sumaria etc. to not only promote the brand but also to push for sales.

Use celebrities to promote the brand.

Sponsor important events like T20 World Cup, Popular television

serials etc.

Set up kiosks outside shops to promote the brand.

Provided inept training to dealers about product specifications.

Branding of dealers shops & proving them dealership certificated which

can be displayed..

Providing dealers with rewards & recognitions for achieving targets.

Advertise a lot more aggressively during summers.

Highlight the power saving feature also make users aware about star
ratings.

Use the advantage of being the pioneer in Indian air conditioner.

Come up with attractive schemes like free installation, scratch card, free
trips, etc.

Come up with full page ads in newspapers, leaflets in

popular newspaper.

Product awareness needs to be increased further.

Install a Bluestar AC at dealers shops as a customer tends to notice the

air conditioner used by the dealer.