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APPLICATION OF BCG MATRIX FOR KCP .LTD. CHENNAI By S.VIGNESH (Reg. No:97807631051) A PROJECT REPORT Submitted to the FACULTY OF MANAGEMENT STUDIES In partial fulfilment of the requirement For the award of the degree of MASTER OF BUSSINESS ADMINISTRATION IN MARKETING

ANNA UNIVERSITY Tirunelveli Jan May 2009

UDAYA SCHOOL OF ENGINEERING UDAYA NAGAR,VELLAMODI.

DEPARTMENT MANAGEMENT STUDIES

BONAFIDE CERTIFICATE

Certified that this project title APPLICATION OF BCG MATRIX FOR KCP .LTD. CHENNAI is the bonafide work of S.VIGNESH who carried out the research under my supervision. Certified, that to be best of my knowledge the work reported have in does not form part of any other project report dissertation on the basis of which a degree or award was conferred on an occasion on this on any other candidate. Place: Date: Signature of Guide

Forwarded by H.O.D

Internal Examiner

External Examiner

DECLARATION

I here by declare that the project entitled APPLICATION OF BCG MATRIX FOR KCP .LTD. CHENNAI for the MBA, Degree is my original work done under the guidance of Mr.P.LOVELIN AUGUS KANI Lecturer in Department of Management Studies Udaya school of Engineering, Vellamodi.

Place: Vellamodi

Date:

(S.VIGNESH)

ACKNOWLEDGEMENT

I have an opportunity to express my deep thanks to my college Principal Mr.R.Subash Chandra Boss M.E,Phd., Udaya school of Engineering. Then, I wanted extend my gratitude to my Department of Management Studies H.O.D Mr.T. Paramasivan M.Sc., M.B.A., Then, I would extend my great thanks to my faculty Guide Mr.P.Lovelin Augus kani M.B.A., Department of Master OF Business Administration for her kind guidance. I like to express my gratitude and sincere thanks to Technical Director Mr.V.Gandhi and General Manager Mr.V.R.Annapragada of KCP LTD, Chennai for giving us permission to do the project I also like to express my deep sense of gratitude and sincere thanks to HR Manager Mr. S.Pavan Kumar and Marketing Manager Mr.V.R Udhaya Kumar for his valuable advice, guidance and encouragement for completing the project I also like to express my thanks to Mr.S.Sridharan and Mr. A. Raajesh for giving me a valuable suggestion to complete the project. I also sincerely thank my Parents and Friends for their warm and emotional support in the successful completion of our research work.

ABSTRACT The topic of my study is APPLICATION OF BCG MATRIX FOR KCP .LTD. CHENNAI. Questionnaire method is used for collecting the primary data. The secondary collected from the Marketing Department of the company. The random sampling technique was used for the selection of respondents. The tools used were Percentage, weighted average method and chi-square. The main objective of the study is to find out the products level in the BCG matrix and prove the matrix by through the porter five force model. The sample unit is The kcp limited, Chennai The sample size is 30. The primary data was collected through Questionnaire and the secondary data collected from the marketing department records. The samples were taken randomly. The tools used were Percentage analysis, weighted average, and Chi-square method. From the research, it is found that the companies delivery cycle and the dispatch period is fair. The major limitations of the study, is carried out only for a limited time period.the major limitation is the company has a customer through worldwide it is difficult to collect information from all the customer The major finding of the study are In Products of KCP the customer gave high ratings to Girth gear, Miln & klin shell and low ratings to tyre and sugar items & slide shoes in product quality and In Products of KCP the customer gave high ratings to support roller & girth gear and low ratings to tyre & Mill & Kiln shell in guarantee period criteria. The suggestion for that management are that, In BCG matrix three products of KCP, Girth gear, pinion and Mill head lies on the cash cow position. It means these 3 products have a huge market growth (profit) but it has low market share. So the company should take essential steps to increase the market share of the above 3 products. Tyre and other products lie on dog quadrant of BCG matrix. The company needs to review its products line-up and launch new products to cater the changed demand.

TABLE OF CONTENT
CHAPTER NO 1 DESCRIPTION INTRODUCTION 1.1 Introduction 1.2 Industrial Profile 1.3 Company Profile 1.4 Review of Litrature 2 RESEARCH METHODOLOGY 2.1 Title of the Project 2.2 Objectives of the Study 2.3 Research Design 2.4 Data collection Method 2.5 Methods of Sampling 2.6 Population Size 2.7 Sample Size 2.8 Sampling procedure 2.9 Field Work 2.10 Limitations of The Study 3 DATA ANALYSIS AND INTERPRETATIONS FINDINGS SUGGESTIONS CONCLUSION APPENDIX BIBLIOGRAPHY 23 23 23 23 24 24 24 24 24 25 10 22 25 19 PAGE NO

26 59 60 61 62 64

4 5 6

LIST OF TABLES Table 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 3.14 3.15 Title Table representing the Brand loyalty of KCP Table representing Distribution channel performance Table representing Price sensitivity of KCP products Table representing Response to communication Table representing Quality Standard requirement Table representing Dispatch complaint redressal Table representing Delivery cycle Table representing Quality of products Table representing Price of the product Table representing Performance of the product Table representing Satisfaction of the customer Table representing Quality of product packaging Table representing Technology of the product Table representing Guarantee Period of the product Chi-square test Page.no 27 29 31 34 35 37 39 41 43 45 47 49 51 53 55

3.16

Weighted average LIST OF FIGURE

57

Figure

Title

Page.no

3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11 3.12 3.13 3.14

Figure representing the Brand loyalty of KCP Figure representing Distribution channel performance Figure representing Price sensitivity of KCP products Figure representing Response to communication Figure representing Quality Standard requirement Figure representing Dispatch complaint redressal Figure representing Delivery cycle Figure representing Quality of products Figure representing Price of the product Figure representing Performance of the product Figure representing Satisfaction of the customer Figure representing Quality of product packaging Figure representing Technology of the product Figure representing Guarantee Period of the product

28 30 32 34 36 38 40 42 44 46 48 50 52 54

CHAPTER -I

INTRODUCTION

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1.1 INTRODUCTION BCG MATRIX Boston Consulting Group, founded in 1963 by former Bible salesman and Harvard Business School alum Bruce Henderson, may not be as large as its management consulting rival McKinsey, but its regarded as a consulting industry pioneer. When Henderson died in 1977, having built his firm from a one-man shop to a global powerhouse, the Financial Times wrote, Few people have had as much impact on international business in the second half of the twentieth century as the founder of The Boston Consulting Group. BCG set the stage for much of todays popular business-speak, developing neat theories and catchphrases to describe everything from time-based competition to the New Luxury. The firm often grabs headlines in business and popular media by weighing in on trends and issues its prooutsourcing stance inspired strong reactions during 2004s heated election season. It also blazed a trail in the way consulting is performed Henderson had faith that young men and women just out of business school could apply their minds to complex problems (especially when rewarded handsomely for their efforts), ratcheting up the stakes for B-School recruitment among competitors like McKinsey. Dont let the Boston moniker fool you into thinking BCG is a regional operation. In fact, almost from its inception, when BCG formed the first strategy consulting office in Tokyo, the firm has had an international tilt, collecting half of its revenues from outside the U.S. This means that many of its 2,600 consultants have the opportunity to pursue projects overseas. History BCG founder Bruce Henderson, a former Bible salesman, studied at Vanderbilt and went on to attend Harvard Business School, after which he went on to become one of the youngest vice residents ever at Westinghouse Corp. After Westinghouse, he joined Arthur D. Little, where he headed the firms management services group. His talents caught the eye of the head of the Boston Safe Deposit and Trust Company, and Henderson was asked to form a consulting wing at the Beantown bank in 1963. Henderson started modestly at the bank, billing just $500 during his first month on the job. But as business picked up, he proved his management acumen by

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identifying Japan as an up-and-coming market, and opening the first consulting firm in Tokyo in 1966. While making his mark on a global level, Henderson was also helping to shape strategy consulting as we know it, focusing on providing strategic advice to clients senior management. In fact, BCG is widely credited as the first strategy consulting firm. By 1966, the firm had 18 employees and was busy developing concepts like the experience curve for clients. A new perspective In 1964, the seeds of BCGs thought leadership were planted when the firm began publishing a series of concise, provocative essays addressing management issues. Later known as Perspectives, the essays were meant to shake up conventional thinking. Statements that senior business managers would find believable are not supported. Only provocative material is argued. The subject matter is chosen to be deliberately provocative, significant in implication, and relevant to the policy decisions of corporate competition, the firm said in describing the brochures intent. BCGs innovative theories including concepts like time-based competition and the experience curve soon were adopted by leading business schools and became part of consultings lingua franca. In 1968, the firm got more buzz when it introduced the BCG Growth-Share Matrix, a framework for explaining the relationship between a companys profitability and its market share. Using four icons, star, dog, cash cow and question mark, in a standardized layout, the model indicates that businesses in mature markets (cash cows) provide the funding for high-growth ventures with large expected returns (stars), while divesting of low-growth and return ventures (dogs) and trying to build low-return fast growers (question marks) into market leaders before they become dogs. The model provided strategy consultants with a standard way of approaching engagements, using terms and concepts that could be understood by consultants and their clients alike. Creating a Buzz BCGs buzz-words soon made the firm quite reputable (some would say trendy), and the small firm became a big draw for newly-minted MBAs from top schools, giving larger rivals like McKinsey a run for their money (BCGs attractive salary packages didnt hurt, either). In fact, the firm was one of the first to hire business school graduates right out of school, believing that students have the ability and fresh perspective to solve complex business problems. In 1968,

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the firm was spun off as a separate subsidiary of The Boston Company, and BCG entered into a joint venture in London called Attwood-Boston Consultants Ltd. On its ten-year anniversary, in 1973, the firm boasted 142 consultants with some, like Bill Bain, already successful enough to jump ship and go start their own rival strategy firms. In 1975, Henderson arranged an employeestock ownership plan (ESOP), so that the employees could take the company independent from The Boston Safe Deposit and Trust Company. The ESOP itself was one of the first such plans in the nation. The buyout of all shares was completed in 1979, five years ahead of schedule. The firm went on to make its mark in health care, especially following a 1980 engagement with German pharmaceutical manufacturer Boehringer Manheim. Helping the manufacturer analyze the cost of diabetes and its treatment, BCG applied traditional business systems analysis and total quality management principles to treatments for the disease, identifying junctures at which treatment could reduce costs. This approach, which came to be known as disease management, became standard operating procedure for managed care and other interested firms during the following decades. In 1995, BCGs Joshua Gray and Peter Lawyer wrote a Perspective titled The Promise of Disease Management, focusing on the patient as the relevant unit of management in health care delivery. Asian invasion BCG continued to capitalize on its early presence in Asia, obtaining roughly half of its Asian business from local entities (as opposed to other consultancies, which derive more business from American firms conducting operations overseas). Following a string of Asian expansions beginning with the opening of a Hong Kong office in 1991, BCG added offices in Kuala Lumpur, Malaysia, Shanghai, Seoul, Bangkok, Jakarta, Singapore, Mumbai, Beijing and New Delhi. The firms clientele includes five of Asias biggest non-Japanese companies, three of the top five business conglomerates in Korea, and eight of the biggest local commercial banks in Hong Kong, Indonesia, Malaysia, Thailand and Korea. BCG head Carl Stern reported that the firm averaged growth rates of more than 20 percent in Asia during the 1990s (compared to the high teens in Europe and the Americas). The engagements continue to roll in as the firm solidifies its presence in India: In July 2003, an alliance of four cellular operators in India hired BCG to draw a road map for growth in domestic and global markets. In June 2004, Indias

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Corporation Bank signed BCG to a six-month engagement to assist with brand building, overseas operations, and re-orienting its training system. The firm also began expanding early in Europe, making a name for itself in Eastern Europe in the mid-1980s, when it began giving companies there strategic advice that helped prepare them for deregulation and privatization in the new postCold War economy. In September 2003, the firm was engaged by the RTS Stock Exchange in Russia to undertake a comparative study of that countrys securities market. Other European offices include Athens, Beijing, Cologne, Istanbul, Prague and Rome; in 2002, BCG opened an office in Barcelona. The firms reputation has remained strong overseas; in Universums June 2002 survey, the firm was ranked as the second-most ideal employer (in any industry) among European graduate students (McKinsey came in first). BCG divides its business into three regions: Asia, the Americas and Europe. It has always had an international focus; as early as 1977, BCG derived half its revenues from outside the U.S. These days, the company earns almost half its revenue from consulting engagements in Europe and one-third from the Americas (the rest comes from its Asian offices). The firms global approach means its consultants can have plenty of international exposure, if they wish. The firm offers an ambassador program, which allows consultants to transfer to another office, for six months or longer (though the typical period is 12-18 months). Overseas consultants also transfer to American offices. Consultants may also work on international cases (normally for multinationals). Sometimes, consultants are required to relocate to a foreign office for the duration of a case. These relocations, however, are normally kept within BCGs geographic groups. Consultants in New York, for example, might relocate to Mexico City (like New York, another office in the Americas) The firm also has a reputation for giving its consultants the flexibility to follow their particular passions. Structured around areas of expertise, the firms segments are made up of worldwide networks of consultants who have chosen to focus on issues that interest them, a policy designed to ensure that consultants are passionate about their work and also to sustain peoples interest over time. Grabbing headlines

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Though Henderson retired as chairman emeritus in 1985 (he died in 1993), the BCG buzz machine he created has thrived well into the 21st century. Many of its concepts are picked up and discussed both in consulting circles and among the mainstream media. In 2001, BCG Senior VP Jeanie Ducks bestseller, The Change Monster: The Human Forces that Fuel or Foil Corporate Change, highlighted the Change Curve the predictable yet frustrating cycle of changes that cripple organizations. The book explores a new way of looking at change strategy for senior executives. In 2003, the book Trading Up: The New American Luxury, co-authored by BCG partner Michael J. Silverstein, made a splash among both business wags and everyday consumers. The book argues that, despite the economic downturn, New Luxury brands like fancy chocolates, bed linens, and lattes continue to thrive and even grow, at least in the U.S. The books authors observe that items once seen as luxuries in earlier times (such as chocolate) have become commonplace, as proved by the success of New Luxuryretailers like Starbucks and Restoration Hardware. As the BCG consultants observed, these goods, which sell at premiums of 20 to 200 percent over standard mid price goods, deliver higher profits than nonluxury goods, while at the same time selling in much higher volumes than super premium products.The books appearance just happened to coincide with a few other BCG studies along the same lines, including an October report analyzing sales by companies identified as new luxury players. In November 2002, the firm published New Luxury: Why the Middle Market American Consumer Wants Premium Goods and How Companies Create Them, which details the phenomenon of the middle class escaping the extraordinary stresses of modern life by carefully choosing high-quality, high-performance, emotionally satisfying goods and services and offers ideas on how companies can take advantage of this. Silverstein also observed the phenomenon of spite-based purchases by working women who buy higher priced goods as a response to overwork. More recently, in July 2004, BCG Stable leadership BCG hasnt undergone many major leadership changes in its 40-year history. In April 2003, Hans-Paul Brkner became president of BCG, replacing Carl W. Stern, who stepped down after two three-year terms. Appointed for a three-year term himself, Brkner becomes only the fifth CEO in the firms history. Observers were quick to note that the firm, like top competitor McKinsey, had selected a European in this case, a German as its leader, illustrating how truly

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global the consulting business has become. Brkner,who has been at BCG since 1981, was promoted from senior partner in the Frankfurt office. A Yale grad and Rhodes Scholar at Oxford, one of his major accomplishments was building up BCGs client roster in the financial services sector, an area that now makes up a fourth of BCGs worldwide revenues. Brkner also has a reputation for his accessibility he prefers sharing an office with junior colleagues. He came in first among Consulting magazines list of the top 25 consultants in 2003, speaks several languages, and has lived in Europe, Asia and the U.S. In other personnel news, BCG nabbed a private-equity expert to head its mergers and acquisitions practice in March 2003. Chris Neenans appointment, the company said, signals BCGs commitment to strengthen and expand its already strong capabilities in the field of corporate development. In October 2003, the firm named Steven Gunby, Bjorn Matre, and John Wong as the new regional leaders of the firms Americas, Europe and Asia regions respectively. A majority of BCGs consultants hold advanced degrees from leading business schools such as the University of Chicago, Harvard, and Kellogg. The firms alumni have gone on to found such companies as American Management Systems, Spinnaker Software, Boston Beer Company and Braxton Associates. In 2003, BCG alum Stephanie Klein Peponis was named chief marketing officer for Revlon. In April 2004, Massachusetts Gov. Mitt Romney hired former BCG partner Ranch Kimball to serve as his economic development secretary. The Boston Box The Growth-Share-Matrix commonly known as Boston Box was developed by the Boston Consulting Group (BCG) in the seventies. It is a tool of portfolio management. The Boston Box evaluates the products of an organization according to their market share and to their growth prospects. On that basis it can reveal insights about their financial needs or their ability to generate cash. The Boston Box model depends on the following premises: The profits and cash generated from a product are a function of its market share. Profits and market share correlate directly.

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Revenue growth requires investments. In the context of the Boston Box, investments are mainly expenses for marketing, distribution and product development. The extent of these expenses depends on the general market growth for that product. High market shares require additional investments. No business or market can grow infinitely. Placing products in the BCG matrix results in 4 categories in a portfolio of a company: 1. Stars (=high growth, high market share) Use large amounts of cash and are leaders in the business so they should also generate large amounts of cash.
Frequently roughly in balance on net cash flow. However if needed any attempt should be made to hold share, because the rewards will be a cash cow if market share is kept. 2. Cash Cows (=low growth, high market share)

Profits and cash generation should be high, and because of the low growth, investments needed should be low. Keep profits high

Foundation of a company

3. Dogs (=low growth, low market share)

Avoid and minimize the number of dogs in a company. Beware of expensive turn around plans.
Deliver cash, otherwise liquidate

4. Question Marks (= high growth, low market share)

Have the worst cash characteristics of all, because high demands and low returns due to low market share

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If nothing is done to change the market share, question marks will simply absorb great amounts of cash and later, as the growth stops, a dog.

Either invest heavily or sell off or invest nothing and generate whatever cash it can. Increase market share or deliver cash

The BCG Matrix method can help understand a frequently made strategy mistake: having a one-size-fits-all-approach to strategy, such as a generic growth target (9 percent per year) or a generic return on capital of say 9,5% for an entire corporation. Limitations of the Boston Consulting Group Matrix includes:

High market share is not the only success factor Market growth is not the only indicator for attractiveness of a market Sometimes Dogs can earn even more cash as Cash Cows

Porters Five Force Model Introduction Porter's five force model is used to analyze the attractiveness of a market segment. The determinants of the market attractiveness are: 1) The competitors operating in the same industry, 2) Potential new entrants, 3) Attractiveness of substitute products, 4) bargain power of buyers, 5) Bargain power of suppliers. This model is used to decide what strategy a firm should apply to meet its objectives of long run. Porters five force model

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1. Threats of intense segment rivalry: BOL face a huge problem in the dial-up service. It is not the case of any competitors strength of market share but the declining market of the dial-up service. People trends to ignore the hazards of using dial-up internet service. So this segment of customer and the service is disappearing from the scene. This makes a big problem for BOL regarding their investment and high exit barrier of the market. Another segment BOL concentrate is the broadband service. BOL is not performing as well as dial-up service. But the criterion is different here. Dial-up service is mostly in its exit part but broadband is still doing well. So, why BOL is not doing here? The answer is the better performance of competitors. BOL simply can't catch the attraction of the market, because the competitors have higher stakes than BOL. So BOL has to fight with others price and advertising constantly. So, both of the segments are not in a good shape for BOL. Recommendation: For dial-up service BOL simply should operate in small portion. Because they just can't leave the segment because of high exit barriers. As they have to do little operation for dial-up they have to perform rest of their resource for broadband service, because this segment got a

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good future in hand. So BOL should concentrate on it. They should offer good service at a low rate from its competitors to the market. In doing this they can invest more in upgrading their technology and in their advertising. 2. Threats of potential entries: BOL's business profit is low, risky in type because the market entry barrier is low due to the pure market competition. This business needs a good investment with high fixed cost. As a result it is also a problem to quit easily that means the entry barriers is low where exit barriers are high. It creates another problem, the small competitors has to stay because of the high exit barriers to cause a problem for big one's like BOL. So that BOL has to face extra competition in the market. Recommendation: To face this thing BOL has to be large to its competitors, in the same time they have to be good in their offerings and capturing market share. This will make sure that the profit will still high though poorer competitors are still in the frame. 3. Threats of substitute products: If there is any potential substitute product exists parallel with the actual product, then the respected market segment becomes unattractive. The profit margins and prices become limited by the substitute products. Sometime technological advancements yield convergences of new substitute products industry. If substitute products industry is more attractive than the actual product regarding to the aspect of competition, price and profits, the growth in the main product segment is likely to fall. The market of main product may not grow more. In the context of Bangladesh ISP (Internet Service Provider) and BOL online limited of Beximco group the market of dial-up internet becoming unattractive day by day. It contributes a substantial decline in the growth of dial-up internet service market in Bangladesh. There might be some probable reasons for this consequences happening in the industry. Internet service is one kind of market segment where differentiation is almost impossible. In addition, technological advancement is used as a leapfrog strategic tool by the substitute industry that outperforms dial-up internet service industry. Explaining the technological leapfrog, the customers prefer faster internet at

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comparatively low cost. But dial up service provides attractive low cost but its speed is not good enough to serve almost no purpose of customers expected demand. But substitute products such as GPRS, EDGE, Zip (High speed wireless connection) meet the expected need for high speed internet at comparatively lower cost. For the past five years, dial-up internet service industry is severely threatened by the local broadband service. Then the industry started a new trend that is price dumping. As there was technological backwardness involved, the speed was not sufficient till then. No competitors exiting the industry but dumping price to attract customers. On the other hand, the service quality was so poor that customer percept spending any money to the industry is a total loss. There was mass switching to the substitute service occurred as there was opportunity and customers switching cost is low. Afterwards, for the past three years, telecommunication and other large ISP developed their product and introduced wireless internet that is faster substantially at lower cost. Those ensure the emergence of abundance of backward technology and adopt new technology. Recommendation: There are low barriers to enter in the market for internet service because telecommunication companies already have capital requirements, licensing and patents, other networks. On the other hand, the struggling ISP companies face high exit barrier because there is pure competition, increasing customer expectations do not expect low cost but better quality, and low salvage value yields a chance of high capital loss. In this situation, profitability is low and risky. Moreover, if the market growth is declining, the dial-up ISP should exit slowly. 4. Threats of buyers growing bargaining power: The internet connection service is mostly undifferentiated in many ways. because lot of competitors are doing their business in this sector so to provide customer a good package every service provider tries to extend the service to the minimum profit limit . This makes the products quality relatively undifferentiated. Its only the types of service offering that might be bit different. But that is not any more a big case to say the product or service is differentiated. There also a negative thing for BOL is that the switching cost of buyer's is not enormous. Because it only cost them somewhere round about 1000tk or less to switch to other service. So it is an advantage for buyer's creating concern for BOL. Buyers who are opted to use internet

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seems to a standard class people in terms of their earnings and spending. These people are trends to be price sensitive because there is many service providers in the market, from whom they can chose their one. So this is another problem or challenge for BOL to negotiate the buyers price sensitivity. There is another thing that may bother BOL is that the service is associated with significant fraction of buyers cost because to take an internet connection a buyer pays some or whole amount of the cost of hub and ware cost. So here buyers also refer some power from the service provider. Recommendation: It is very important for BOL to workout these problems associated with buyers power. To do that BOL can chose the segment of buyer's who are not that powerful in terms of bargaining power and less price sensitive. BOL also can offer superior offerings to get buyers even though they are price sensitive. 5. Threats of suppliers bargaining power: BOLs business instruments are mainly from United States. So it appears that the cost is very high. The suppliers are organized and strong. As BOL is not a huge company from a huge country it is not much of a concern for the suppliers to be price cautious when it is set. As a small company it is difficult for BOL to be dominant for the suppliers. So BOL also has to negotiate the challenge. Another problem is that the switching of suppliers is also expensive because the foreign suppliers always demand a big deal to start. So might be it is not needed for BOL to subscribe the large quantity of products. Recommendation: As the market share is declining for BOL is has to be cautious steps to be taken by BOL. In this specific problem BOL should made the suppliers not one but multi. That means they should take different suppliers for different products but concentrate only on major or one supplier. This will enables them to switches easily and with less cost.

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1.2 INDUSTRY PROFILE India's earthmoving and construction equipment industry (ECE) is at a watershed in its evolution and will experience strong growth spurred by the nation's economic development, according to a study by McKinsey & Co. The study, ECE Vision 2015: Scaling new heights in the Construction Equipment Industry was conducted for the Confederation of Indian Industry (CII) and the Indian Earthmoving, Construction Industry Association Ltd. (IECIAL). The Indian ECE industry has the potential to grow fivefold from its current size of U.S. $2.3 billion to approximately U.S. $12 - 13 billion by 2015, growing at 24% compound annual growth rate (CAGR), according to the study. "The McKinsey report states that the industry's revenue and volume have recorded 40% growth year-on-year between 2004 and 2006 reaching U.S. $2.3 billion today and uncovers a $40 billion opportunity for the industry between now and 2015," said Vipin Sondhi, managing director and CEO, JCB India Ltd. The study discusses five trends that could shape the evolution of the industry and highlights the imperatives to realize this opportunity. Four of the five trends are growth opportunities including:

Investments of $750 billion in infrastructure development.

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Increasing dominance of price- and value-focused customers. Deeper engagement of global equipment manufacturers in India. Increasing opportunities for exports. However, the trend of increasing competition from product imports from other countries such as China could potentially challenge industry growth and needs to be addressed proactively, according to the study. Conservative estimates suggest that "as usual" growth will create a market of $8 billion by

2015, according to the study. But a push by the industry and government could result in an additional $4 billion opportunity equally split between exports and the provisioning of India specific products."For the industry to achieve its full potential, players need to embark on three strategic initiatives: (i) introduce India specific products that include low-priced multipurpose equipment to attract new customers and to increase mechanization in important areas adding features to products that make suitable for use in India and launching new applications and products for missing applications; (ii) improve cost positions to better deal with the onslaught of competition from low-cost carriers (LCCs); and (iii) pioneer efforts to boost exports in areas like engineering and design services that leverage the India's technical prowess," said Adil Zainulbhai, managing director, India McKinsey & Co. "In addition, companies need to pursue four growth-enabling initiatives to expand the market," said Rajat Dhawan, partner and coleader of McKinsey's automotive and assembly practice in India. "These include enhancing the quality, delivery and price of after sales-services to increase share of service revenues from 2% of total revenues to the global average of about 8%; dressing key gaps in financing to catalyze latent demand particularly in rural areas and small towns; expanding dealer and channel network coverage to address buyer fragmentation and quality and proactively strengthening supplier capacities and capabilities." The study concludes by outlining imperatives for the government including: 1. Increasing the availability of trained manpower because at the current pace the industry is likely to face a shortfall of 0.3 million trained operators by 2015. 2. Removing tax anomalies to encourage exports and lower tax burdens that impede demand.

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3. Instituting policy measures that strengthen the industry capabilities. Key policy measures include providing tax benefits to players to encourage investments in research and development; establishing an industry focused R&D center; incentivizing exports by exempting them from excise and local levies; and containing imports of used equipment as is done in other emerging market economies. The study also said that CII and IECIAL should work with the industry and government to create an enabling environment that results in the desired regulatory changes and export the "Made in India" brand to international shores. The ECE industry has a critical role in making India one of the world's top five economies by 2025, according to the study. Construction equipment players have an opportunity to help realize the potential of this sector and, in doing so, garner their share of the U.S. $12 -13 billion revenue potential. Behind all engineering marvels in the recent history has got the strong support of heavy equipments everywhere in the world. A recent study shows an annual growth of 5.4% for the construction equipment industry by 2009 and the market is estimated to witness a $110 billion business. In the construction machinery segment, road construction equipment has a significant share with $4 billion annually and it will expand further since almost all countries in the world giving much importance in upgrading their infrastructure. The fast expanding economies like India, China and the oil-rich Middle-East Arab countries are in the forefront of construction activities and all the major brands in the world establishing their market in these countries. Many of them have already started their manufacturing units, keeping in mind the further growth. Between the major players of manufacturing companies there is a stiff competition going on for the past few years and that will continue for a long time due to the huge demand. The European and Japanese markets are not as demanding as in the previous years due to their position remains as a supplier rather than an end-user status Another scope in this segment is through online transactions. Almost all major brands have established their online trading. Online business is convenient for the companies, dealers, and the buyers since no need of visitors and visiting and face to face bargains. Many of them offers discounted rates due to the savings in establishing floors and shopping centers for their business. Like in other businesses, they have clearance sale too and high-end equipments are offered at heavy discounted price in such online clearance sale. Another advantage of such online business

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is the reach of their business across the border. Large construction companies sell their equipments after a particular project and the second hand dealers buy them. Smaller companies in the market buy them for a quarter of their original prices for a new one in the market. Export of used equipment to other countries such as African countries has also become a lucrative business. Scrap dealers also gain in this business since the parts business is very profitable and many buyers are looking for these cheap parts from the demolished equipments. Anyway, heavy equipment and related business will flourish further in the coming years and many challenging engineering jobs will be taken up and many dreams will come true. High growth expected from the Asian countries and Middle East. Companies have started to flock in these countries and established their network to cater to the demand and to avoid import of those equipments. 1.3 COMPANY PROFILE The KCP Group of Companies had its beginning in the year 1941. It started with a single co-operative sugar factory in the state of Andhra Pradesh in South India with a simple philosophy... Modernize... Indigenous...Never compromise on Technology . These were the words of our founder Shri V. Ramakrishna who had stepped down at the age of 51 in those preindependence turbulent days (before 1947) to take up this challenge. Since then The KCP Group has diversified into Cement and Heavy Engineering. The KCP Cement Division went operational in 1958 and was India's first dry process kiln. The KCP Heavy Engineering Division was established in 1955 as a sprawling High Technology Complex in the suburb of Chennai. This complex is one of the largest and highly integrated centers with Casting, Fabrication and Machining facilities required in the manufacture of large infrastructure machinery for core Industries like Sugar, Cement, Steel and Power. Our Chairman & Managing Director Dr. V.L Dutt and Joint Managing Director Mrs. V.L. Indira Dutt have been the guiding architects for the groups continued progress. Under their leadership we have grown from strength to strength into a Rs. 150 Crore ($ 50 million) company. An important highlight in the financial performance is its 58 year uninterrupted dividend record and its bonus capitalization of shareholder wealth (98% of share capital) which is the 3rd highest in India.

26

KCP Philosophy KCPs philosophy is to modernize, Indigenise, Never Compromise on technology This has taken KCP from being a single co-operative sugar factory in 1941 to being one of the largest and most well diversified industrial houses in India. KCP HR Mission KCPs human resources development & services department will add value to all its Units and associate companies by ensuring that the right person is assigned for the right job and that they grow and contribute towards organizational excellence. KCP Vision KCPs vision is to achieve organizational excellence through innovation. KCP Quality policy Committed to the manufacture of heavy engineering equipment for various industries as per mutually accepted requirements of our customers. Our commitment towards total quality management is to forge the human resources of our organization into a team that promotes continual improvement in quality of products and services. KCP, a pioneer in producing premier cement is committed to maximize customer satisfaction and keep a clean and safe environment. We are certified for ISO 9001 and ISO 9002 standards in our engineering and cement production units respectively. KCP GROUPS Fives cail-KCP Limited KCP Technologies limited KCP Biotech limited

27

KCP Vietnam industries limited KCP cements KCP Heavy Engineering Unit

DEPARTMENTS IN KCP LIMITED Human Resource Marketing Finance Civil Production planning & control (PPC) Industrial Engineering Department(IED) Design Information Technology Purchase or procurement Stores Machine shop Foundry Fabrication Mechanical & electrical maintenance Quality

CEMENT INDUSTRY OVERVIEW:

28

The Company operates a plant of 5,00,000 tones annual capacity at Macherla in Guntur District of Andhra Pradesh. During the year under report, the Company marketed cement in Andhra Pradesh, Pondicherry and parts of Tamil Nadu. The Companys prospects were in tune with the realization in Andhra Pradesh since 90% of the production was marketed in Andhra Pradesh. State of the Industry: The entire country is witnessing increase in demand. Demand outstripped supplies in the entire country, as also in Andhra Pradesh. The Companys production capacity is 4% of the total production capacity available in the State.

Outlook: The company produced predominantly Portland cement in the current year. Demand for Cement increased substantially during the year. Hence prices are expected to firm up and rule at higher levels as compared to previous year all through the Country. The Company has installed and commissioned in April 2007, a Waste Heat Recovery System, at a cost of Rs.1150 lakhs, which is expected to generate 1.75 MW electricity. In furtherance of clean environment, a clinker silo has been built at a cost of Rs.1000 lakhs during the financial year 2006-07. POWER Overview: The Company has five mini-hydel units aggregating to 8.25 MW capacities on the Guntur Branch Canal of the Nagarjuna Sagar Dam. This being an irrigation canal, water is expected to be available for seven to eight months of the year. Electricity generated in these units is wheeled to the Companys Cement Unit for use. Generation in excess of the consumption at the cement unit is banked on a monthly basis and is to be used within twelve months of generation. Electricity unused even after twelve months is sold to the Grid. Electricity used in the cement factory will be deducted from the monthly bills and will get a relief at the H.T rates, while electricity sold to grid will be paid for at the prevalent purchase price as determined by APERC.

29

Risks: Except one scheme all the other four are operating at FULL capacity due to good inflow of water. Further, water flow in the canal is unpredictable which is entirely dependant on inflow of water to Nagarjuna Sagar dam. Normal monsoon during the season improved storage in Nagarjuna Sagar Dam. Consequently, during the year under report, adequate flow of water was available in the Canal. Generation was normal. ENGINEERING The Company operates a versatile engineering facility that is capable of manufacturing heavy mechanical equipment to a given design for various industries. The Unit has an integrated facility comprising of foundry, heavy fabrication and machine shop facilities. The Arakonam facility was effectively used to augment production of foundry products and fabrication. Due to good demand in the Cement, Sugar and Infrastructure sectors, the operation of the Engineering Unit at Tiruvottiyur was substantially better than the previous year in terms of turnover and profits. Overview: Status of capital goods sector: During the year capital goods industry has done well in both domestic and export markets. Opportunities: Widening of the product range has also widened the customer base. This is leading to better value addition. Risks: Product mix is the deciding factor affecting the performance of this segment. Consequently, this segment results are open to variations in profits depending on the Order profile. Outlook:

30

With the orders on hand of about Rs. 120 Crores and the existing product-mix, performance during fiscal 2007-2008 is expected to yield similar results as that of the year under report. The modernization programmed being implemented at a cost of Rs. 2200 lakhs will enable the Company to increase productivity and to compete in higher value added segment. CORPORATE INVESTMENTS Fives Cail K.C.P. Limited: Operations during the year ended 31.03.2007 were better than the previous year. New domestic orders fructified on revival of sugar industry. The company returned profits in the current year and was able to wipe out accumulated losses. Outlook for the ensuing year is optimistic. The Company has declared an interim dividend of 225% for the year ended 31.3.2007. KCP Vietnam Industries Limited: KCP Vietnam Industries Limited concluded the season with a crush of 2, 93,671 tones and a recovery of 8.92%. Realization in 2006 was higher than that of the previous year, due to shortage of sugar in Vietnam. For the year ended 31-12-2006, the Company earned a profit of Rs. 507 lakhs. After wiping out the entire accumulated losses, a profit of Rs. 110 lakhs is carried to Balance Sheet. Dong Xuan Factory crushed 12757 tones of cane and the syrup was taken into production process at the Phu yen factory. K.C.P. Biotech Limited: During the year under report, paprica (chilli) color extract was exported to USA, Quality of the products has been acceptable to the international buyers. Natural color market demand being vast, growth potential offered by this business is impressive. However, production process is under stabilization and the company is focusing to get quality manpower to improve the efficiency of the Plant. Efforts are on to improve yields, which is essential to make this business segment profitable. For the year under report this unit posted a loss of Rs. 225.74 lakhs. Diminution in value of investments:

31

As per the audited accounts of KCP Biotech Ltd, the Company has incurred cash losses during the year, and is more than 100% of its net worth. The Company is taking steps to merge KCP Biotech Limited with the K.C.P. Limited, and hence it is proposed to provide for 100% diminution in the value of investments in the books of The K.C.P. Limited. Investment in Sugar: Prospects of the parent Companys investment in Vietnam improved substantially, with the excellent demand for the sugar in Vietnam and this trend is likely to continue for the coming year also. During the year under review this Company posted profits. Investment in Bio-Technology: Natural color extraction facility fully operational during the year. Further, production process is yet to stabilize. While there is a good demand for the products, and quality has been established to international requirements, returns depend upon appropriate manufacturing process.

1.4 REVIEW OF LITERATURE George Stalk Jr

The underlying idea of the BCG matrix is that the best strategy is to dominate market share when the market is mature. The thinking goes like this: Profitability is greatest when the market matures. A dominating market share gives the highest accumulated production volume. According to the experience curve, high volume leads to lower production costs.

32

Low production costs can either be used to lower prices and take market share, or to increase profit margins.

The BCG matrix proved a great success and most of the big American companies used it to review their business units.

Richard Hamermesh,
portfolio planning on the basis of early methods was very useful when decisions had to be made concerning which business units were to be sold off, but was much less useful in connection with growth and business development. Richard Hammermesh gives good advice in this respect: Do not confuse resource allocation with strategy. Planning is not a substitute for visionary leadership. Pay careful attention to the strategy of each business unit and not only the strategy for the whole portfolio, which is of course the aim of portfolio planning. Involve line managers in the planning process. Line managers and not personnel managers should plan strategy. Do not confuse strategic planning with strategic thinking. The discipline involved in strategic planning helps in the development of strategic thinking, but they are in no way identical.

Dagmar Recklies
This product portfolio matrix classifies product lines into four categories. The BCG models suggests that organisations should have a healthy balance of products within their range. The Boston Consultancy Group classified these products as following: Dogs These are products which have low market shares and low market growth rates. The options for many companies is to phase these products out, however some organization do go for the strategy of re-inventing and injecting new life into the product. (see Heinz Case Study) Question Mark/Problem Child These are products with low market share but operate in high market growth rates. The company puts a lot of resources in this product in the hope that it will eventually increase market share and generate cash returns in the future.

33

Star Stars have high market shares that operate in growing markets. The product at this stageshould be generating positive returns for the company. Cash Cow Cash Cow are products at the mature stage of the lifecycle, they generate high amounts of cash for the company, but growth rate is slowing. There are chances that the product may slip into decline, appropriate marketing mix strategies should be employed to try to prevent this from happening. The Boston Box The Growth-Share-Matrix commonly known as Boston Box was developed by the Boston Consulting Group (BCG) in the seventies. It is a tool of portfolio management. The Boston Box evaluates the products of an organization according to their market share and to their growth prospects. On that basis it can reveal insights about their financial needs or their ability to generate cash. The Boston Box model depends on the following premises: The profits and cash generated from a product are a function of its market share. Profits and market share correlate directly. Revenue growth requires investments. In the context of the Boston Box, investments are mainly expenses for marketing, distribution and product development. The extent of these expenses depends on the general market growth for that product. High market shares require additional investments. No business or market can grow infinitely. In the result, the profitability of a product depends on its market share, the growth rate of its market and on its position in product lifecycle.

Carl W Stern
Typical Question Marks are new products in markets with a high growth rate. They enter the market with a small market share in relation to the market leader. In order to improve their position, it takes investments, especially in marketing. Normally, such products do not generate profits. Questions Marks that develop successfully achieve higher market shares and finally become Stars. Stars are often products in their growth phase. In order to maintain the high share

34

in a growing market, they require further investments. During phases of high growth, most products are not highly profitable. As soon as market growth slows down and the market becomes saturated, products with a high share become Cash Cows. Due to the slow market growth rate, such products need very little investments. They generate a positive cash flow. In a well balanced portfolio, the cash flow from a Cash Cow should be used for investments into Question Marks and Stars. Dogs are products that have a low market share in markets with a low growth rate. Products from all other categories can become Dogs. Despite their poor prospects, Dogs can be profitable. Many former Cash Cows are well positioned and enjoy a stable demand, although there are newer product releases with a much higher market volume. It is necessary to keep in mind that this model is relatively simplistic. All it does is to choose one element from each of the two parts of strategic analysis internal and external analysis. It puts them on two axes and distinguishes high and low. (see Mintzberg, Ahlstrand und Lampel in "Strategy Safari"). The model can reveal valuable insights on the actual composition of a companies product portfolio and on the activities necessary to improve it. However, it would be a mistake not to go any further. Many products or services of organizations are not really profitable in will probably never be. They are necessary to complement profitable core products, to differentiate from competitors ore simply are a value added that the customers expect. On the other hand, companies could have profitable products in their portfolio that are not related to all their other products and services. Does it really make sense to stick to a product however profitable even though it destroys the reputation as a highly specialized niche player? Or is it advisable to sell that Cash Cow and to use the price to invest in more related products? Another weakness of the Boston Box is inherent in the historical context in which it was developed. The early seventies have been a period of relatively stable growth. At that time, strategic decisions have been focused on reactions to changes in demand, on growth, and on diversification as a meansof minimizing risk. The Boston Box is an excellent model for such situations. Its basic premise that high market shares lead to high profits is especially applicable to volume-dependent industries. Today the situation has changed in many industries. Only those businesses who are profitable in their sectors will be able to extent their market share. The Boston Box does not into consideration critical success factors like specialisation, flexibility, and customer orientation.

35

R.Sharma
The BCG Matrix is useful for a company to achieve balance between the four categories of products a company produces. As a particular industry matures and its growth slows, all business units become either cash cows or dogs. The overall goal of this ranking is to help corporate analysts decide which of their business units to fund, and how much; and which units to sell. Managers are supposed to gain perspective from this analysis that allowed them to plan with confidence to use money generated by the cash cows to fund the stars and, possibly , the question marks . Some limitations of the Boston Consulting Group Matrix:
It neglects the effects of synergy between business units. Market growth is not the only indicator for attractiveness of a market. Sometimes Dogs can earn more cash than Cash Cows. The problems of getting data on the market share and market growth. There is no clear definition of what constitutes a "market". A high market share does not necessarily lead to profitability all the time. The model uses only two dimensions market share and growth rate. This may tempt

management to emphasize a particular product, or to divest prematurely.

A business with a low market share can be profitable too. The model neglects small competitors that have fast growing market shares.

36

CHAPTER -II

RESEARCH METHODOLOGY

CHAPTER II

RESEARCH METHODLOGY
2.1 Title of the project: APPLICATION OF BCG MATRIX FOR KCP .LTD. CHENNAI 2.2 Objectives: To study about the BCG matrix To find out the product level in the BCG matrix

37

Support the BCG matrix result through porters five force model To find out benefit of product thorough the BCG matrix.

2.3 Research Design: Research design is the plan and structure of investigation so convinced as to obtain answers to research questions. The plan is the overall schemes or program of the research. It includes an outline of what the investigator will do from writing hypothesis need their operational implication to the final analysis of data. A Structure is the framework, organization or configuration of the relations among variable of a study. A Research design expresses both structure of the research problem and the plan of research design expresses both structure of the research problem and the plan of investigation used to obtain evidence of the problem. The Research design adopted by the researcher in this research is Descriptive type. Descriptive type research includes survey and a finding enquires of different kinds. The main objective of descriptive research is to acquire knowledge. Through this study the researcher wishes to acquire more knowledge about the satisfaction functions. 2.4 Data collection method: A structured questionnaire was prepared which contains 21 items are used for collection of primary data. The question was administered to the employees. They were requested to hear our each statement carefully and make their response by choosing an appropriate option Excellent,Good,Fair,Poor. All statements are related to their views and expressions and therefore asked to be honest in making their preferences and this response is kept confidential. Primary data: Through our survey i.e. based on random sampling method some of the primary data has been taken that concerns about the cause of absenteeism. It was later discussed detail in the tabulation page of the report. Secondary Data: Some of the secondary data has been taken from the management. Such as the labors are going for outside work because of the wages provided from outside environment is higher when

38

compared to the industry. Most of the workers prefer to do the work in cardamom plantations, construction works and going for coolies. . 2.5 Methods of sampling: This survey consists of random sampling method. 2.6 Population Size: The KCP LTD maintain a72 customer in all over the world. In the company follow the industrial marketing and produce the industrial parts. So it has limited customer only. 2.7 Sampling Size: Total s1ample size is 30. 2.8 Sampling procedure: The selection of respondents were accordingly to be in a right place at a right time and so the sampling were quite easy to measure, evaluate and co-operative. It was a randomly area sampling method that attempts to obtain the sample of convenient elements 2.9 Field Work: I have collected the data through medium called questionnaire through mail, collecting the responses from 30 customers of kcp all over India. I had done my field work all over India. I started my project very first educating the respondents about my entire project, and ask them to co-operate with me. Mostly all the respondent were aware of this type of surveys. So I didnt face any type of difficulty during my project in the process of explaining and taking there responses on the questionnaire. 2.10 Limitation: Since it is Questionnaire through mail, the respondent might not get fully interested in answering the questionnaire Since our customer is a corporate they dont respond properly through mail

39

Since it has a customer through worldwide it is difficult to collect information from all the customer

Since it has worldwide customer the time limitation of project is short, so results may be biased

40

CHAPTER - III

DATA ANALYSIS AND INTERPRETATION

CHAPTER III

INTERPRETATION AND ANALYSIS

BCG MATRIX FOR KCP LIMITED

41

STAR MILL & KILN SHELL

QUESTION MARK SUPPORT ROLLER SUGAR ITEMS

CASH COW GIRTH GEAR PINION MILL HEADS TYRE

DOG

OTHERS

HIGH

LOW

42

MARKET SHARE
HIGH LOW

Table 3.1 Table representing the Brand loyalty of KCP

S.NO 1 2 3 4

CRITERIA Excellent Good Fair Poor Total

NO OF RESPONDENT 9 16 5 0 30

PERCENRAGE 30.00 53.33 16.66 0 100

Source: Survey Data Inference: Among the 30 respondent of KCP 53.33% said good and 30% say excellent and 16.66% said fair in brand loyalty criteria

43

Figure 3.1 Figure representing the Brand loyalty of KCP

44

Table 3.2 Table representing Distribution channel performance S.NO 1 2 3 4 CRITERIA Excellent Good Fair Poor Total NO OF RESPONDENT 3 9 11 7 30 PERCENRAGE 10 30 36.66 23.33 100

Source: Survey Data Inference Among the 30 respondent of KCP 10% said Excellent,30% said good and 36% said fair and 23.33% said poor in distribution channel criteria

45

Figure 3.2 Figure representing Distribution channel performance

46

Table 3.3 Table representing Price sensitivity of KCP products

S.NO 1 2 3 4

CRITERIA Excellent Good Fair Poor Total

NO OF RESPONDENT 4 10 12 4 30

PERCENRAGE 13.33 33.33 40.00 13.33 100

Source: Survey Data Inference: Among the 30 respondent of KCP 13.33% said excellent, 33.33% said good and 40% said fair and 13.33% said poor in price sensitivity criteria

47

Figure 3.3 Figure representing Price sensitivity of KCP products

48

Table 3.4 MAIN PROCESS Table representing Response to communication S.NO 1 2 3 4 CRITERIA Excellent Good Fair Poor Total NO OF RESPONDENT 7 11 5 7 30 PERCENRAGE 23.33 36.66 16.66 23.33 100

Source: Survey Data Inference: Among the 30 respondent of KCP 23.33% said excellent, 36.66% said good and 16.66% said fair and 23.33% said poor in response to communication channel criteria

49

Figure 3.4 Figure representing Response to communication

50

Table 3.5 Table representing Quality Standard requirement

S.NO 1 2 3 4

CRITERIA Excellent Good Fair Poor Total

NO OF RESPONDENT 12 10 5 3 30

PERCENRAGE 40 33.33 16.66 10 100

Source: Survey Data Inference: Among the 30 respondent of KCP 40% said excellent, 33.33% said good and 16.66% said fair and 10% said poor in product standard quality criteria.

51

Figure 3.5 Figure representing Quality Standard requirement

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Table 3.6 Table representing Dispatch complaint redressal

S.NO 1 2 3 4

CRITERIA Excellent Good Fair Poor Total

NO OF RESPONDENT 3 9 12 6 30

PERCENRAGE 10 30 40 20 100

Source: Survey Data Inference: Among the 30 respondent of KCP 10% said excellent, 30% said good and 40% said fair and 20% said poor in company dispatch criteria

53

Figure 3.6 Figure representing Dispatch complaint redressal

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Table 3.7 Table representing Delivery cycle

S.NO 1 2 3 4

CRITERIA Excellent Good Fair Poor Total

NO OF RESPONDENT 4 6 9 11 30

PERCENRAGE 13.33 20 30 36.66 100

Source: Survey Data Inference: Among the 30 respondent of KCP 13.33% said excellent, 20% said good and 30% said fair and 36.66% said poor in delivery channel criteria

55

Figure 3.7 Figure representing Delivery cycle

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Table 3.8 Table representing Quality of products

S.NO 1 2 3 4 5 6 7 8 Girth Gear Pinion

PRODUCT

QUALITY RATINGS 86 82 83 76 88 82 78 80

Support Roller Tyre Mill & Kiln Shell Mill Heads Sugar items & Slide Shoes Others

Source: Survey Data Inference: Among the 8 Products of KCP the customer gave high ratings to Girth gear,Miln & klin shell and low ratings to tyre and sugar items & slide shoes and average ratings to other products in quality criteria.

57

Figure 3.8 Figure representing Quality of products

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Table 3.9 Table representing Price of the product

S.NO 1 2 3 4 5 6 7 8 Girth Gear Pinion

PRODUCT

PRICE RATINGS 73 86 83 80 86 73 78 82

Support Roller Tyre Mill & Kiln Shell Mill Heads Sugar items & Slide Shoes Others

Source: Survey Data Inference: Among the 8 Products of KCP the customer gave high ratings to Pinion, Miln & klin shell and low ratings to Girth gear and Mill heads and average ratings to other products in price criteria.

59

Figure 3.9 Figure representing Price of the product

60

Table 3.10 Table representing Performance of the product

S.NO 1 2 3 4 5 6 7 8 Girth Gear Pinion

PRODUCT

PERFORMANCE RATINGS 85 84 72 80 86 76 80 78

Support Roller Tyre Mill & Kiln Shell Mill Heads Sugar items & Slide Shoes Others

Source: Survey Data Inference: Among the 8 Products of KCP the customer gave high ratings to Girth gear, Miln & klin shell and low ratings to support roller and Mill heads and average ratings to other products in performance criteria.

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Figure 3.10 Figure representing Performance of the product

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Table 3.11 Table representing Satisfaction of the customer

S.NO

PRODUCT

CUSTOMER SATISFACTION RATINGS

1 2 3 4 5 6 7 8

Girth Gear Pinion Support Roller Tyre Mill & Kiln Shell Mill Heads Sugar items & Slide Shoes Others

76 74 68 68 78 80 72 68

Source: Survey Data Inference: Among the 8 Products of KCP the customer gave high ratings to Mill heads, Miln & klin shell and low ratings to support roller and tyre and average ratings to other products in customer satisfaction criteria.

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Figure 3.11 Figure representing Satisfaction of the customer

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Table 3.12 Table representing Quality of product packaging

S.NO 1 2 3 4 5 6 7 8 Girth Gear Pinion

PRODUCT

PACKAGE QUALITY RATINGS 68 70 64 56 68 64 60 62

Support Roller Tyre Mill & Kiln Shell Mill Heads Sugar items & Slide Shoes Others

Source: Survey Data Inference: Among the 8 Products of KCP the customer gave high ratings to Pinion, Miln & klin shell and low ratings to tyre and average ratings to other products in quality criteria.

65

Figure 3.12 Figure representing Quality of product packaging

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Table 3.13 Table representing Technology of the product

S.NO 1 2 3 4 5 6 7 8 Girth Gear Pinion

PRODUCT

TECHNOLOGY RATINGS 80 78 72 68 82 78 74 73

Support Roller Tyre Mill & Kiln Shell Mill Heads Sugar items & Slide Shoes Others

Source: Survey Data Inference: Among the 8 Products of KCP the customer gave high ratings to Girth gear, Miln & klin shell and low ratings to tyre & support roller and average ratings to other products in technology criteria.

67

Figure 3.13 Figure representing Technology of the product

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Table 3.14 Table representing Guarantee Period of the product

S.NO

PRODUCT

GUARANTEE PERIOD RATINGS

1 2 3 4 5 6 7 8

Girth Gear Pinion Support Roller Tyre Mill & Kiln Shell Mill Heads Sugar items & Slide Shoes Others

68 64 70 60 58 64 58 60

Source: Survey Data Inference: Among the 8 Products of KCP the customer gave high ratings to support roller & girth gear and low ratings to tyre & Mill & Kiln shell and average ratings to other products in guarantee period criteria.

69

Figure 3.14 Figure representing Guarantee Period of the product

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CHI-SQUARE TEST
Table 3.15 RELATIONSHIP BETWEEN DELIVERY CYCLE AND DISTRIBUTION CHANNEL

Null Hypothesis Ho : There is no relationship between the delivery cycle and the distribution channel. Alternate Hypothesis H : There is a relationship between the delivery cycle and the distribution channel.

Excellent Excellent Good Fair Poor Total 1 1 2 4

Good 1 1 2 2 6

Fair 1 2 4 2 9

Poor 5 3 3 11

Total 3 9 11 7 30

OBSERVED FREQUENCY 1 1 1 0 1

EXPECTED FREQUENCY 0.4 0.6 0.09 1.1 1.2

(O E)2 0.36 0.16 0.01 1.21 0.04

(O E)2/E 0.09 0.267 0.01 1.1 0.03

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1 2 5 2 2 4 3 0 2 2 3

1.8 1.63 3.33 1.47 2.2 3.33 4.03 0.93 1.4 2.1 2.57

0.64 0.1369 2.789 0.2809 0.04 0.4489 1.0609 0.8649 0.36 0.01 0.1849 Total

0.36 0.084 0.84 0.19 0.02 0.134 0.26 0.93 0.26 0.005 0.07 4.65

= (C-1) (r-1) = (4-1) (4-1) =3x3 =9 Level of Significance 2 (0.05, 9) Calculated value 4.65 < < Table value 16.919 = 16.919

So, Null hypothesis is accepted. There is no relationship between the delivery cycle and the distribution channel. Table 3.16

72

Weighted Average
1) Quality of the product Products Wix W Girth Gear Pinion Support Roller Tyre Mill & Kiln Shell Mill Heads Sugar items & Slide Shoes Others 86/30 82/30 83/30 76/30 88/30 82/30 78/30 80/30 2.86 2.73 2.76 2.53 2.93 2.73 2.6 2.67 Weighted average

Inference Mill & Kiln Shell has a high quality in the organization when compare to the other products. Tyre has low quality.

2)Guarantee period of the product Products Wix W Weighted average

73 Girth Gear Pinion Support Roller Tyre Mill & Kiln Shell Mill Heads Sugar items & Slide Shoes Others 68/30 64/30 70/30 60/30 58/30 64/30 58/30 60/30 2.27 2.13 2.33 2 1.93 2.13 1.93 2

Inference: The company give high guarantee period to the Support roller Mill & Kiln Shell and Sugar items & Slide Shoes has a low guarantee period

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CHAPTER - IV

FINDINGS

CHAPTER IV
FINDINGS: In brand loyalty criteria 53% of respondent feel high brand loyalty In Distribution channel 59% respondent not satisfied with the KCP In price sensitivity 40% of respondent feel fair and 13.33% feel excellent

75

fair

In communication channel 36.66% of respondent feel good and 16.66% respondent feel

In Product quality 40% of respondent feel excellent and 10% feel poor In company dispatch method 40% feel fair and 10% feel excellent In delivery cycle 36.66% respondent feel poor and 13.33% feel excellent In Products of KCP the customer gave high ratings to Girth gear, Miln & klin shell and

low ratings to tyre and sugar items & slide shoes in product quality In Products of KCP the customer gave high ratings to Pinion, Miln & klin shell and low

ratings to Girth gear and Mill heads in price criteria. In Products of KCP the customer gave high ratings to Girth gear, Miln & klin shell and

low ratings to support roller and Mill heads in performance criteria In Products of KCP the customer gave high ratings to Mill heads, Miln & klin shell and

low ratings to support roller and tyre in customer satisfaction criteria. In Products of KCP the customer gave high ratings to Pinion, Miln & klin shell and low

ratings to tyre in quality packaging criteria. In Products of KCP the customer gave high ratings to Girth gear, Miln & klin shell and

low ratings to tyre & support roller in technology criteria In Products of KCP the customer gave high ratings to support roller & girth gear and low

ratings to tyre & Mill & Kiln shell in guarantee period criteria.

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CHAPTER - V

SUGGESTIONS

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CHAPTER V SUGGESTIONS
KCP Limited has to concentrate on Distributional channel. KCP Limited has to concentrate on complaint redressal.i.e, the company must take fast action to solve the customers problem KCP Limited has to concentrate on delivery cycle. It must reduce the time taken to deliver the product In BCG matrix three products of KCP, Girth gear, pinion and Mill head lies on the cash cow position. It means these 3 products have a huge market growth (profit) but it has low market share. So the company should take essential steps to increase the market share of the above 3 products. In BCG matrix two products of KCP, Support Roller and Sugar Items lies on Question mark Company should keep focusing on the fast moving products. Tyre and other products lie on dog quadrant of BCG matrix. The company needs to review its products line-up and launch new products to cater the changed demand.

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CHAPTER - VI

CONCLUSION

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CHAPTER IV

CONCLUSION:
The Indian ECE industry has the potential to grow fivefold from its current size of U.S. $2.3 billion to approximately U.S. $12 - 13 billion by 2015, growing at 24% compound annual growth rate, according to the study. Recent years the infra structure sector has a tremendous growth so there is a large potential for the cement industry, steel industry and power industry. So heavy equipment manufacturing industries has a large potential to grow In KCP three products of KCP lies on the Cash cow position. So if the company concentrates on these three products it very much helpful to increase the companys profit.

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APPENDIX

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APPENDIX APPLICATION OF BCG MATRIX FOR KCP .LTD. CHENNAI

I am S.Vignesh, doing M.B.A in UDHYA SCHOOL OF ENGINEERING. Nagercoil, doing my summer project in THE K.C.P. LIMITED. Chennai. You are invited to participate in my survey about Construction of BCG MATRIX for K.C.P. Limited. Chennai. It will take approximately 3 minutes to complete the questionnaire. Your participation will make our research better and help us to analyze the customers mind set about K.C.P.Limited. There are no foreseeable risks associated with this project. Please answer each and every question honestly because it is very important for us to know your opinion. The survey responses will be strictly confidential and data from this research will be used for constructive purposes. I enclose my permission certificate from K.C.P. Ltd with this questionnaire. 1. Company Name 2. Address 3. Type of customer : : : ) b.Sugar ( ) c. Mines ( ) d.Power ( ) e. Steel ( )

a.Cement (

ABOUT KCP:
S.No 1 2 3 4 5 Company Service Product Manufacturing Facility Distribution Channel Performance Condition of Product delivered Product Replacement Excellent Good Fair Poor

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6 7 8 9 10

Dispatch Time Price of raw material Price Sensitivity Brand Loyalty Inspection Calls

MAIN PROCESS:
S.No 1 2 3 4 5 Excellent Response to Communication Quality standards requirement Dispatch complaint Redressal Delivery cycle Pricing Good Fair Poor

PRODUCT CATEGORY
S.No 1 2 3 4 5 6 7 Quality Price Performance Satisfaction Package.Qlty Technology Guarantee Period Girth Gear 4 3 2 1 4 Pinion 3 2 1 Support Roller 4 3 2 1 4 Tyre 3 2 1

S.No

Mill & kiln shell 4 3 2 1 Quality Price Performance Satisfaction Package.Qlty Technology Guarantee

Mill Heads 4 3 2 1

Sugar items & Slide shoes 4 3 2 1

Others 4 3 2 1

1 2 3 4 5 6 7

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Period

BIBLIOGRAPHY

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BIBILIOGRAPHY
Research Methodology Marketing Management The Power of Marketing Strategic Management -- C. R. Kothari --Philip kotler --ZIKMUND/d AMICO (7th Edition) --Robert-E-Hoskisson --R-Duane Ireland

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