GROUP # A5

PEYYALA HARISH (PGP13103)

RISHABH BHARDWAJ (PGP13110)

SANDEEP KUMAR SAW (PGP13049)

VATSAL CHAUHAN (PGP13061)

VINEET CHOUHAN (PGP13127)

EICHER MOTORS

IntroductionIn 80’s Bajaj Tempo & M&M – lower end of payload (1.5-2 tonne)

Market Share – Bajaj: 60%, M&M: 40%

In 80’s Tata Motors & Ashok Leyland – upper end of payload (10-20 tonne)Market Share – Tata: 75%, Ashok Leyland: 25%

Older technology, less safety, comfort & emission controlFord tried to enter Indian market but failed due to poor after sales services & high

prices

In 90’s 4 new entrants of LCV’s tied up with Japanese firms:-DCM Toyota – Capacity: 12,000 p.a. (3.5-6 tonne)Allwyn Nissan – Capacity: 10,000 p.a. (2.5-6 tonne)Swaraj Mazda – Capacity: 12,000 p.a. (3.5-6 tonne)Eicher Mitsubishi – Capacity: 12,000 p.a. (3.5-6 tonne)

These were rugged, highly reliable, faster, safer & much more comfortable but expensive

Introduction

DCM Toyota

• High decibel ad campaign

• Spent large amount building brand

• Advance bookings

• Asked dealers to invest heavily

• Tied up with well-established dealers

Allwyn Nissan

• Launched few months after DCM Toyota

• Also tied up with large established dealers

• Many of them were Ashok Leyland dealers

• Dealers had a very good understanding of the market

Swaraj Mazda

• 3rd entrant

• Faced difficulty attracting good dealership parties

• Lukewarm market response to vehicles released by earlier entrants

Eicher Mitsubishi

• 4th entrant – Late-to-market

• Funding problems in setting up manufacturing plant

• Entry delay helped in coming out with an updated version of LCV

Parameters Affecting Design of Distribution Channel

Market Variables like geography, size, density & behaviourNeeds & wants of target market

Geographical size of market

No. of buying units per unit of land area

How, when, where & who buys

Product variables like reliability, unit value, degree of standardization, newness

Company variables like financial capacity, managerial expertise, firm size

Intermediaries’ availability, cost, services offered

Economic conditions & Competitors’ Benchmarking

High cost involvement in company owned dealership stores

Agents will be experts/retired employees in this field

Bulk sales through Industrial distributors

Small scale sales through Dealers

Dealers & Service centers will cater to after sales services

Company approved spare parts will be available with all three (Industrial Distributors, Dealers & Service Centres)

Positioning of spare parts as reliable, easily available& of high quality

Eicher’s Channel Structure

Sellers

Industrial Distributors

Industrial Users

Dealers

Small Scale Users

Service Centres

Agents

Dealers would be provided with vehicles without initial payment & promised buy-back

Timely delivery to small scale buyers as promised

Management assistance will be provided through Sales force training

Tie-ups with banks for providing loans to build initial infrastructure

High amount of advertising and promotional support

Fair dealing and friendly relationship in order to build repo among dealers

Possible Ways of Attracting Channel Members

Credit & Financial

Conditions

Sales Strengths

Product Lines & Reputation

Market Coverage

Sales Performance

Management Succession

Management Ability

Attitude & Size

Channel Members Evaluation Parameters

Aggressive advertising & promotion to build a strong brand

Organize race events in villages showcasing their vehicle’s competencies

Service centres to provide services not only for Eicher’s vehicles but also for competitor’s vehicles

Usage of railways for faster transportation of vehicles especially for long distances

Selecting companies as approved spares partners such that Eicher has well-established spare parts network

Recommendations