ICT Sustainability of Tesco PLC
January 6, 2022Reaction Paper Sample
January 6, 2022
Introduction
Bajaj Electricals Limited is an electronic business entity that functions in India. The electric commodity manufacturing concern has a diverse product range including lightings, appliances, fans, luminaries, etc. The business is a vital part of the Rs 20,000 crores Baja Group. It has a solid existence all over India. One of the key factors that allow the business to have a sustainable performance and profitability in the uncertain market setting is its unique and effective distribution channel model. An extensive distribution tactic allows the business to have a favorable recognition in the market setting (Baker, 2014).
In this paper, the Indian electronics company and the chosen product i.e. Baja Fan have been critically assessed. The ultimate intention is to understand the effectiveness of its channel structure in the Indian market (Bresler & Lubbe, 2014). The positioning strategic model and the customer relationship management (CRM) of the electronic firm have been assessed. This analysis process is crucial for the purpose of suggesting an appropriate channel structure such as the e-commerce model in the urban and rural parts of the country. Ultimately, a feasible market research system and data collection methodology have been highlighted to understand the customer perception of the Bajaj fans.
Critical analysis of the industry
The advancement and development of the electrical industry have transformed the lives of millions of people in the Indian nation. The most common electrical appliances that are found in most Indian houses are fans, light bulbs, tube lights, television sets, etc. The revenue that is generated from the organized electric fan market is growing with a CAGR of 12.29 percent in the past 5 years (Chernev, 2014). The report has highlighted that the key national brands that dominate the organized fan market include Bajaj, Havells, Usha, Orient, Khaitan, and Crompton Greaves. The key products that have been popular in the market setting are ceiling fans, table fans, pedestal fans, wall fans, and different kinds of fans.
According to the report “Consumer Durables Home Run” by Edelweiss, different electric components are expanding at a different pace in the Indian market setting. The graph below highlights the changing trend in the fan demand in the nation (Ieema.org, 2018). The diagrammatic representation shows that Bajaj electrical is a key participant in the industry. The main reason for the increase in demand for different kinds of fans is the rise in the disposable income of the people (Eichorn, 2017).
The graphical representation below shows that the market size of various consumer durable items such as stabilizers, UPS, pumps, fans, lighting, etc has increased in size. This is a positive move for the industry and the nation. Thus the fan segment of the electronics industry has seen a favorable change in its operations (Gummesson, Kuusela & Närvänen, 2014). The report has revealed that the electrical equipment market in India has a diverse set of components that help the participants to introduce innovative products. In the last few years, the industry has experienced massive growth due to the increase in disposable income in the hands of the Indian population. Some of the major strengths of the industry that led to its growth and expansion are its strong distribution network, focus on employee productivity, and use of technological innovations (Jooste & Strydom, 2014).
(Ieema.org, 2018)
Bajaj Electricals – Overview
Bajaj Electricals is a highly trusted brand that offers quality electronic products to customers. The electronic entity was established in the year 1938. The Bajaj fans are considered to be one of the most reputed products that exhibit durable performance to the users. The brand is highly trusted in the market because of its quality electronic items. The concern plays a key role in the Power Distribution Equipment sector (Keller & Kotler, 2016). It is one of the rapidly expanding electronic entities in India that has loyal customer backing. It has gained its reputation in the international market setting as well. It exports to various nations such as Egypt, UAE, Indonesia, and Malaysia.
Currently, it has around 19 branches that spread in different parts of the nation. It has a chain of 1000 distributors and 4000 authorized dealers. The business has around 40,000 retail outlets in India that help it to have a solid presence in the Asian country (Bajajelectricals.com, 2018). There are a total of 282 Customer Care centers that help Bajaj customers to resolve their issues relating to business products and commodities. The entity has been acknowledged as a major electronic goods manufacturer that offers the widest range of quality electrical commodities (Khodakarami & Chan, 2014).
Channels of Distribution
The effectiveness of the distribution channel of the business helps it to have a widespread presence in the vast Asian nation. The broad distribution model of the electronic business helps it to expand its reach and target customers in the rural segment and the urban segment. In the layman’s language, the distribution channel can be defined as the pathway that allows the electronic business entity to showcase its electronic goods in the market so that it can reach the intended consumers. The distribution network has always been a priority for the business concern. According to the Chairman & Managing Director of the company – Shekhar Bajaj the business is focused on improving its sales by strengthening its distribution channel (Menon, et al., 2015).
The business has over a thousand distributors in the nation and it intends to further increase those numbers so that its business reach can be further expanded. In the year 2004, the business had around 10,000 retailers in the country. Thus today this figure must have changed drastically for the better. In order to upgrade its distribution model, Bajaj believes in using technology and innovation. This helps it to provide superior quality electronic fans in the market. The business intends to further strengthen its distribution network so that its scope of business can be increased (Navimipour & Soltani, 2016). The distribution model of the business has been presented in the diagrammatic form below. The “Range & Reach Expansion Programme” (RREP) guides the distribution channel network of the business.
(Navimipour & Soltani, 2016)
Positioning strategy
The positioning strategy of the Bajaj Company plays a significant role because it enhances its brand value in the market setting. The positioning strategy of Bajaj Electricals helps the business to distinguish its product in the electronic market. This statement helps the concern to showcase its strong commitment towards the target audience in the market. The diagrammatic presentation below highlights the positioning of the business in various electronic market segments such as electronic fans, electronic lighting, and electronic appliances (Schmidt, Spann & Zeithammer, 2014). Due to its solid positioning strategic model the fans segment has seen rapid growth in the market. The positioning model of the electronic business is related to the perception of the customers about the brand.
(Schmidt, Spann & Zeithammer, 2014)
Bajaj Electricals’ solid positioning model helps the business to have a strong brand in the competitive business environment. It has got a favorable mass awareness due to its quality offerings in the electronic market. The business has been positioned as a mass-market brand and its forged tie-ups with international brands such as Disney, and Morphy Richards help it to target the premium section of the audience. Such kind of international tie-ups has helped the business undertaking to have a favorable position against its industry peers. The solid positioning model allows it to have a high demand in the market setting.
(Schmidt, Spann & Zeithammer, 2014)
CRM strategy of Bajaj
The CRM model basically stands for customer relationship management which aims at strengthening the association between the business undertaking and its target customers. Different business concerns adopt different kinds of CRM models o that they can effectively manage their customers. Bajaj Electricals use a simple and effective CRM model that helps it to focus on customer retention tactics. It ultimately helps the business undertaking to drive its sales in the market setting (Shapiro, Dupree & Keys, 2017).
The distributors and dealers form a vital part of the leading manufacturer entity. Almost all of its marketing activities are carried out with the help of these market participants. The sales team of the business ensures that it keeps a tab on the preferences and choices of the consumers in the market. This helps the business to produce and offer quality electronic fans and other equipments through its distributors and dealers. All these business participants perform their function keeping in mind the specific needs and requirements of the customers. This helps them to make sure that the product that is actually demanded in the market is produced by the undertaking and made available at the respective channel touchpoints.
A critical element that helps the business to strengthen the customer relationship management model is the application of technology and innovation in the process. It positively influences the business undertaking to strengthen its bond with the market audience. In order to create a long-lasting relationship with the ultimate users, the business uses technology to track the change in customer preferences and requirements (Werro, 2015). Bajaj Electricals has gone to great lengths to establish a positive relationship with the target audience. It has significantly invested in its Information Technology infrastructure so that the productivity of its distribution network can be upgraded in the process. Such an approach not only helps to have a positive image in the market setting but it also helps the entity to effectively manage its broad product portfolio in the market setting.
Bajaj Electricals has its presence on different social networking sites such as Facebook, Twitter, Instagram. This presence allows the business to have direct interaction with the customers. It uses this technology to help to strengthen the effectiveness of its distribution touchpoints. This model allows the free flow of necessary information between the key participants of the distribution channel.
Appropriate channel structure for the Urban Market
Bajaj Electricals is known to have a resilient distribution model. In order to further improve the model, the business needs to strengthen its presence on the online platform. It must have a smooth e-commerce distribution networking system. The urban market setting helps the business to have a favorable revenue-generating capacity. In the changing technological setting, there is a need for the electrical business to have a stronger virtual presence. It’s a head office which is situated is in Mumbai helps the business to have a favorable presence in major cities of India.
The business needs to use such innovative strategic models in the changing urban market setting so that it can have a better presence among the people. It can act as a competitive advantage for the electronic business. There is a need for the presence of online distributors and dealers who can strengthen the presence of electrical fans in far and wide regions of urban locations in India. In order to revive the business, it has already initiated the new strategic model. Shekhar Bajaj, the CEO of the business had previously stated in the interview to “The Hindu Business Line” that the business has completely eliminated the wholesalers from the business distribution channel (Kansara, 2018). In fact, it sells directly to the distributors so that the distribution process can be simplified and less cumbersome. Similarly, in order to have a vast presence in the virtual market setting, it needs to involve a significant number of distributors, dealers or retailers who can act as touchpoints for the target audience.
It can use digital media and online forums to enhance its distribution model. It will also help the electrical business to have a better relationship with its business partners and the market audience. The e-commerce platform can help the concern to strengthen its positioning model in the competitive business setting (Wilken, et al., 2015).
Appropriate channel structure for the Rural market
In the changing business setting, the rural market also opens a wide range of opportunities for Bajaj Electricals. The graphical representation below shows that the availability of electricity has increased in the rural parts of the country. The details relating to rural electrification, India electrification, fans industry CAGR (compound annual growth rate), etc show that in the coming years the growing trend will continue. This will bring new opportunities for the bu8ssiness in the competitive business setting. Bajaj Electricals can use this opportunity in the coming years so that it can continue to gain further business reputation in the rural market setting. Due to the availability of electricity, the demand for consumer durable goods such as fans and other electrical equipment is on the rise. The firm must strengthen its distribution channel so that it can increase its number of touchpoints in rural communities.
The report by Edelweiss correctly stated that the strengthening of the distribution network can help electrical businesses such as Bajaj, Usha, etc to boost their reach in the market. The rural sections provide a tremendous opportunity for the business because it is one of the least penetrated segments in the market setting. Currently, Bajaj Electricals’ market approach is premium-based. But in order to make its presence felt in the rural segment of the market, the business must open its distribution touch points – retailers (Edelresearch.com, 2018).
The business entity can strengthen its presence in the rural environment and continue to expand its reputation by focusing on the needs and requirements of the lower-income earning sections of the society that reside in the rural locations. The number of the distributors must be increased so that the exact needs of the potential customers can be understood by them. Similarly, the business must try to have a physical presence in major villages of India so that the people can be aware of the electrical business (Schmidt, Spann & Zeithammer, 2014). It must also set up after-sales service stations in the localities so that the experience of the customers can be enhanced in the process. These touchpoints would make sure that the ultimate service and products of Bajaj Electricals meet the specific needs of the target audience.
Suitable market research system and data collection method
Bajaj Electricals must design a suitable model that can help the electrical business to understand the reaction and perception of the customers relating to the Bajaj fans. It is a critical aspect that can help the business to understand the customers in a better way. For the Bajaj Electricals entity, a key component that strengthens its relationship with the customers is its focus on their specific needs in the evolving market setting. The market research model that is used by Bajaj Electricals has been highlighted below:
Research Design – The descriptive research design would help the business to understand the specific needs of the customers relating to electronic commodities such as fans and other electronic products. It would help the business to identify the main reasons for the change in their electronic needs.
Collection of market Data – Both the primary data and the secondary data must be used by the business undertaking so that it can get a holistic picture of its current market condition. In order to collect the primary data, the business entity must conduct a survey of the potential customers, consultants, and dealers. This would help to strengthen the touchpoints of the distribution model (Khodakarami & Chan, 2014).
Research Instrument Design – The questionnaire would be the most suitable research instrument in the process. It would act as a cost-effective tool that would help the firm to ask various questions about its market offering such as quality, price, electronic devise design, availability, etc.
Data Analysis – Once the data would be collected, the same must be checked so that irrelevant and incomplete pieces of information can be eliminated. Then the statistical software must be used to analyze the relevant set of data so that conclusive findings can be drawn in the process. This would help the concern to understand its brand value in the competitive market setting.
Such a systematic research process would help Bajaj Electricals to adopt the most effective business strategic models that could positively impact its distribution channel network in India and other regions of the world. A research process is a vital necessity for the business. It would help the electrical company to identify the major distribution areas that need to be remodeled by it. It would also be able to identify the change in the customer preferences relating to the business touchpoints. Thus the highlighted research process would help the Indian electrical business to have a robust distribution model that could act as its competitive advantage (Gummesson, Kuusela & Närvänen, 2014).
Conclusion
For each and every business undertaking, the distribution model plays a vital role. It is one of the Ps of the “marketing mix” that acts as a common platform between the business entity and the ultimate consumer or customer. Bajaj Electricals is one of the oldest and reputed electrical companies that offer quality consumer durables for the target audience. The primary focus is on the distribution channel of the business. The various kinds of fans that the business offers in the market include table fans, ceiling fans, exhaust fans, etc. Even though it faces stiff competition in the market setting, its robust distribution model helps to enjoy a competitive position in the highly unpredictable market setting.
The paper basically provides a critical assessment of the distribution model of the business. The positioning strategy and Customer Relationship Management have been highlighted here because these strategic tools help the business to strengthen its distribution model in the market environment. Similarly, the distribution channel design for the urban location and the rural location has been separately featured. The research processes that can help the electronic business to understand the perception of its target customers have been highlighted. This would help the business to alter its touchpoints based on their effectiveness. Bajaj Electricals is the business entity that believes in offering innovative electronic commodities through its constructive supply chain model, distribution channel, and branding. The study of its distribution network helps to understand its competitive advantage in the unpredictable business setting.
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