OF

SUBMITTED BY:

POOJA GOUR

IN PARTIAL FULFILLMENT FOR THE AWARD OF THE DEGREE OF

BBA (E-COMMERCE)

IN

DEPARTMENT OF MEDIA MANAGEMENT

MAKHANLAL CHATURVEDI NATIONAL UNIVERSITY OF JOURNALISM

AND MASS COMMUNICATION, BHOPAL

2016-2019
 ACKNOWLEDGEMENT

IT IS GREAT PLEASURE THAT, I PRESENT THIS REPORT ON “SALES PEOMOTION

STRETEGY”, I WOULD LIKE TO TAKE THIS OPPORTUNITY TO EXPRESS MY
PROFOUND INDEBTNESS TOWARDS MY REVERED PROJECT TEACHER “MRS
ANKITA SHARMA”, DEPARTMENT OF MEDIA MANAGEMENT OF MAKHANLAL
CHATURVADI NATIONAL UNIVERSITY OF JOURNALISM AND MASS
COMMUNICATION, BHOPAL FOR HER AGREENENT TO BECOME MY GUIDE AND
TO HELP ME COMPLETE THIS PROJECT. WITHOUT HER GUIDANCE AND
MOTIVATION THIS WOULDN’T HAVE BEEN POSSIBLE. I THANK HER FOR HER
VALUABLE GUIDANCE EXCELLENT SUPERVISION AND TIME THAT SHE GAVE ME
DURING THA ENTIRE COURSE OF ACTION.

MY SPECIAL THANKS TO “MRS.TEJASVI KHATRI” HEAD OF THE SERVICE

DEPARTMENT OF VOLTAS (MP NAGAR ZONE-1),BHOPAL FOR GIVING ME
PERMISSION TO MAKE MY OWN DESIRED PROJECT AND FOR PROVIDING
EXCELLENT OFFICE ATMOSSPHER FOR MY INTERSHIP, WHICH MADE THE
ANDEAVOR POSSIBAL.

I ALSO EXPRESS SINCERE GRATITUDE TO MY DEPARTMENT OF MEDIA

MANAGEMENT TO FOR THEIR CURRICULUM TO GIVE ME THE OPPORTUNITY TO
CREATE A PROJECT. LAST BUT NOT LEAST, I WOULD LIKE TO THANKS MY LOVING
PARENTS FOR THEIR ENCOURAGEMENT AND COOPERTION DURING THA TIME OF
WORKING THROUGH THIS PROJECT. ALSO, THANKS TO MY ENTIRE FRIEND FOR
THEIR ENCOURAGEMENT AND SUPPORT.

POOJA GOUR
 DECLARATION
I HEREBY DECLARE THAT THE PROJECT REPORT (SALES PROMOTION STRATEGY)IS
BASED ON MY OWN WORK CARRIED OUT DURING THE COURSE OF OUR STUDY
UNDER THE SUPERVISION OF <TEJVI KHATRI> I ASSERT THE STATEMENTS MADE
AND CONCLUSIONS DRAWN ARE AN OUTCOME OF MY RESEARCH WORK, I
FURTHER CERTIFY THAT.
1, THE WORK CONTAINED IN THE REPORT IS ORIGINAL AND HAS BEEN DONE
BY ME UNDER THE GENERAL SUPERVISION OF MY SUPERVISOR..

2, HE WORK HAS NOT BEEN SUBMITTED TO ANY OTHER INSTITUTION FOR

OTHER DEGREE \DIPLOMA \CERTIFICATE IN THIS UNIVERSITY OF INDIA OR
ABROAD.

3, I HAVE FOLLOWED THE GUIDELINES PROVIDED BY THA UNIVERSITY IN

WRITING THA REPORT.

4, WHENEVER I HAVE USED MATERIALS (DATA, THEORETICAL ANALYSIS AND

TEXT) FROM OTHER SOURCES, I HAVE GIVEN DUE CREDIT TO THEM IN THE TEXT
OF THE REPORT AND GIVING AND THEIR DETAILS IN THE REFERENCES.

POOJA GOUR

CERTIFICATE
CERTIFUED THAT THIS PROJECT “SALES PROMOTION STRATEGY” IS
THE BONAFIAD WORK OF POOJA GOUR CARRIED OUT THE PROJECT
WORK UNDER MY SUPERVISION. THIS TO FURTHER CARTIFY TO THE
BEST OF MY KNOWLEDGE, THAT THIS PROJECT HAS NOT BEEN
CARRIED OUT EARLIER IN THIS INSTITUTION AND THE UNIVERSITY.

SIGNATURE

INDEX
CONTENTS
CHAPTER #1: COMPANY PROFILE

1.1 INDRODUCTION
1.2 COMPANY PROFILE OF VOLTAS NSE, INDIA
1.3 HISTORY

CHAPTER # 2:1 INDRODUCTION OF TOPIC

2.1.1 PUSH SALER STRATEGY

2.1.2 PULL SALER STRATEGY

2.1.3 COMBINING PUSH AND PULL

2:2 IMPORTANCE STUDY

2.2.1 SALER PROMOTION COMPANY OF VOLTAS

2.2.2 LASTEST UPDATE ABOUT VOLTAS SALER STRATGY

2.2.3 VOLTAS DRAWING UP PLANS TO DOUBLE

2.2.4 PROFITAS FOUR YEARS

2.2.5 SUCCESSION PLANNING

2.2.6 VOLTAS MAY EXPAND CAPCITY BY NEXT YEAR

2.2.7 MAKING EXCELLENCE A WAY OF LIFE

2.2.8 VOLTAS LIMITED KEY DATA

2.2.9 HUMAN RESOURCES STRATEGY

2.2.10 OUTCOME OF THE TURNAROUND EXERCISE

2.2.11 THE COMMUNICATION PLAN

CHAPTER # 3 LITERATURE REVIEW

 3.1 STUDIES ON IMPACT OF PROMOTION

3.2 STUDIES ON CONSUMER PROMOTION

CHAPTER # 4.4.1 METHODOLOGIES

4.2 OBJECTIVES OF STUDY

4.3 DATA COLLECTION METHODOLOGY

CHAPTER # 5 DATA ANALYSIS AND INTERPREATATION

CHAPTER # 6 FINDING

CHAPTER # 7.7.1 CONCLUSIONS

7.2 SUGGESTION

7.3 SCOPE FOR FUTURE STUDY

7.4 REFERNCES

CHAPTER -1
COMPANY PROFILE

INTRODUCTION
 VOLTAS LIMITED IS A COMPANY IN INDIA SPECIALIZING IN AIR
CONDITIONING AND COOLING TECHNOLOGY.

TATA THE COMPANY WAS INCORPORATED ON 1954 IN MUMBAI. IT WAS

COLLABORATION BETWEEN SONS AND VOLKART BROTHERS. THE CHAIRM
SEPTEMBER AN OF THE COMPANY IS MR.NOEL N TATA AND THE MANAGING
DIRECTOR AND CHIEF EXECUTIVE OFFICER OF THE COMPANY IS MR.PRADEEP
BAKSHI .ITS SHARES ARE TRADED ON THE BOMBAY STOCK EXCHANGE UNDER
SYMBOL 500575.

UNITARY PRODUCTS BUSINESS GROUP MANUFACTURE PRODUCTS IN

CATEGORIES INCLUDING AIR CONDITIONERS, AIR COOLERS, COMMERCIAL
REFRIGERATORS, WATER COOLERS AND WATER DISPENSERS VOLTAS IS THE
LARGEST AIR-CONDITIONING BRAND IN INDIA. VOLTAS PRODUCED INDIA'S
FIRST WINDOW AIR CONDITIONER WITH DC-INVERTER-BASED VARIABLE-SPEED
MOTORS. VOLTAS ALSO HAS A LARGE NETWORK OF REPAIR CENTRES.

THE FIRM IS ALSO A MAJOR PRODUCER OF EVAPORATIVE COOLERS, WHICH ARE

WIDELY USED FOR COMFORT COOLING IN ARID AND SEMI-ARID CLIMATES.

THE COMPANY IS BROADLY STRUCTURED INTO PROJECTS AND PRODUCTS

BUSINESS. THE PROJECTS BUSINESS IS DIVIDED INTO DOMESTIC PROJECTS
GROUP (DPG) AND INTERNATIONAL OPERATIONS BUSINESS GROUP (IOBG).
MEANWHILE, THE PRODUCTS BUSINESS IS CLASSIFIED INTO UNITARY PRODUCTS
BUSINESS GROUP (UPBG), MINING & CONSTRUCTION EQUIPMENT DIVISION
(MCED), AND TEXTILE MACHINERY DIVISION (TMD)

VOLTAS HAS ALSO ENTERED INTO A JOINT VENTURE WITH TURKEY-BASED

ARDUTCH (A SUBSIDIARY OF ARÇELIK, PART OF THE KOÇ GROUP MAKING THE
BEKO BRAND OF HOME APPLIANCES). IT BEGAN PRODUCING REFRIGERATORS,
WASHING MACHINES AND KITCHEN APPLIANCES UNDER THE NAME OF VOLTAS
BEKO.

VOLTAS WON THE FIRST PRIZE IN THE CATEGORY ‘MANUFACTURERS OF BEE

STAR LABELED APPLIANCES (AIR CONDITIONER)’, AS PART OF THE NATIONAL
ENERGY CONSERVATION AWARDS 2015. THE COMPANY HAD PREVIOUSLY WON
THE SAME AWARD IN DECEMBER 2013.

STUDY THE COMPANY MANAGEMENT,

 COMPANY PROFILE, OWNERSHIP, BOARD OF
DIRECTORS AND ORGANIZATION
STRUCTURE OF VOLTAS

COMPANY PROFILE OF VOLTAS NSE,INDIA

DATE OF INCORPORATIOT
06-SEP-1954

DATE OF LISTING 07-NOV-1994

COMPANY PROFILE OF VOLTAS, NSE, INDIA

MANAGEMENT

NAME DESIGNATION

ADDITIONAL
HEMANT BHARGAVA
DIRECTOR

ADDITIONAL
ANIL GEORGE EXECUTIVE
DIRECTOR

ADDITIONAL
PRADEEP BAKSHI EXECUTIVE
DIRECTOR

ADDNL.INDEPENDE
ARUN KUMAR ADHIKARI
NT DIRECTOR
V DESHPANDE DIRECTOR

R N MUKHIJA DIRECTOR

NANI JAVERI DIRECTOR

N N TATA DIRECTOR

D SARANGI DIRECTOR

BAHRAM N VAKIL DIRECTOR

ANJALI BANSAL DIRECTOR

MANAGING
SANJAY JOHRI
DIRECTOR
TYPE PUBLIC COMPANY

(NSC; VOLTAS)

(BSE:500575)
INDUSTRY HOME APPLIANCES

ENGINEERING
Founded 1954; 65 years ago

Headquarters India

Area served Worldwide

PRODUCTS AIR CONDITIONERS, AIR COOLERS AND

CO MMERCIAL REFRIGERATES

Number of employees 5,287 (2015)

Parent Tata group

Website Voltas official website

HISTORY
1954 - THE COMPANY WAS INCORPORATED ON 6TH SEPTEMBER AT MUMBAI. THE
COMPANY WAS PROMOTED IN 1954 BY M/S. VOLKART BROTHERS AND TATA
SONS PVT. LTD., TO TAKE OVER THE ENGINEERING & IMPORT DIVISION OF M/S.
VOLKART BROTHERS IN INDIA

- THE COMPANY'S MANUFACTURING ACTIVITIES WERE ORIGINALLY CARRIED

ON AT ITS FACTORY AT CHINCHPOKLI, MUMBAI AND COVERED AIR-
CONDITIONING AND REFRIGERATION EQUIPMENT MINING, ELECTRICAL AND
AGRICULTURAL EQUIPMENT.

- THE COMPANY SET UP IN THANE, MUMBAI AN UP-TO-DATE FACTORY TO

MANUFACTURE WIDE RANGE OF AIR-CONDITIONING AND REFRIGERATION AND
RANGE OF MINING EQUIPMENTS FOR WHICH THE COMPANY HAD ENTERED INTO
COLLABORATION WITH LEADING MANUFACTURERS ABROAD.

THE COMPANY'S DISTRIBUTION ORGANISATION IS DIVIDED INTO TWO MAIN

GROUPS - `ENGINEERING' AND `MARKETING'.

- THE MARKETING GROUP CONSISTS OF TWO MAIN DIVISIONS, ONE DEALING IN

DRUGS, PHARMACEUTICALS AND CONSUMER PRODUCTS AND THE OTHER IN
CHEMICALS AND VITAMINS. THE COMPANY DEALS IN FOREIGN AS WELL AS
INDIGENOUS PRODUCTS, BESIDES MARKETING ITS OWN PRODUCTS.

- THE COMPANY MANUFACTURES, SALE AND DISTRIBUTION OF A VARIETY OF

PRODUCTS IN THE ENGINEERING, CHEMICAL AND PHARMACEUTICAL
INDUSTRIES SUCH AS AGRICULTURAL, EARTHMOVING, AIR-CONDITIONING AND
REFRIGERATION, TEXTILE MACHINERY, MACHINE TOOLS, ELECTRICAL AND
MECHANICAL EQUIPMENTS AS WELL AS CHEMICALS, PHARMACEUTICALS AND
CONSUMER PRODUCTS.

1956 - SHARES SUB-DIVIDED. 1, 05, 000 RIGHTS SHARES THEN ISSUED AT PAR IN
PROP. 7:10.

1963 - THE COMPANY PROMOTED SCOTTISH INDIAN MACHINE TOOLS LTD., IN

COLLABORATION WITH SCOTTISH MACHINE TOOL CORPORATION OF GLASGOW
FOR THE MANUFACTURE OF MACHINE TOOLS.

1964 - THE COMPANY CONCLUDED A COLLABORATION AGREEMENT WITH

EATON YALE AND TOWNS, U.S.A., FOR THE MANUFACTURE OF YALE FORK-LIFT
TRUCKS. THE COMPANY HAS EXTENSIVE DOMESTIC AND INTERNATIONAL TIES.
1965 - 1,02, 000 RIGHTS EQUITY SHARES ISSUED AT A PREMIUM OF RS 25 PER
SHARE IN THE PROPORTION 2:5.

1966 - A NEW DIVISION, VIZ., THE AGRO-INDUSTRIAL PRODUCTS DIVISION WAS

ADDED. THE MAIN OPERATION OF THE DIVISION CONSISTED OF THE SALE AND
SERVICING OF THE TRACTORS AND IMPLEMENTS MADE BY THE INTERNATIONAL
TRACTOR CO. OF INDIA. THIS DIVISION HANDLES HYDRAULIC EQUIPMENT
RANGING FROM LARGER PUMPING SETS TO SMALL IRRIGATION PUMPS,
SPRINKLER IRRIGATION SYSTEMS AND OIL ENGINES AND ALSO HANDLES
VETERINARY PRODUCTS, PESTICIDES AND FERTILISERS.

1970 - IN APRIL, 85,580 BONUS EQUITY SHARES ISSUED IN THE PROPORTION 1:5.

1972 - 1,03, 896 RIGHTS EQUITY SHARES ISSUED FOR CASH AT A PREMIUM OF RS
50 PER SHARE IN JUNE.

1973 - ARREARS AS ON 31.8.1974 - RS 4935, ARREARS AS ON 31.8.1976 - RS 200

(APPROXIMATELY).

1979 - WITH EFFECT FROM 1ST JULY, TATA-MERLIN & GERIN LTD. (TMG), AND
THE NATIONAL ELECTRICAL INDUSTRIES LTD. (NEI), WERE AMALGAMATED
WITH THE COMPANY. IN TERMS OF THE SCHEME OF AMALGAMATION, MEMBERS
OF THE NATIONAL ELECTRICAL INDUSTRIES LTD., WERE ALLOTTED FOR EVERY
30 PREFERENCE SHARES OF RS 100 EACH HELD, 20 `B' CLASS EQUITY SHARES OF
RS 10 EACH AND 15-11% REDEEMABLE MORTGAGE DEBENTURES OF RS 100 EACH
OF VOLTAS LTD., AND FOR EVERY 240 NO. OF EQUITY SHARES OF RS 10 EACH OF
NEI HELD, 20 `B' CLASS EQUITY SHARES OF RS 10 EACH AND 9-11% REDEEMABLE
MORTGAGE DEBENTURES OF RS 100 EACH OF VOLTAS LTD

1981 - THE COMPANY OFFERED 5, 00,000 - 13.5% SECURED CONVERTIBLE BONDS

OF RS 250 EACH AT PAR. OUT OF THIS, 2, 00,000 BONDS WERE OFFERED AS RIGHTS
TO THE EXISTING SHAREHOLDERS AND THE BALANCE 3, 00,000 BONDS ISSUED
TO THE PUBLIC. EACH BOND CARRIES AN OPTION TO RECEIVE ONE EQUITY
SHARE OF RS 100 EACH AT PAR WITHIN THREE MONTHS AFTER THE EXPIRY OF
THREE YEARS FROM THE DATE OF ALLOTMENT OF BONDS. THE FACE VALUE OF
EACH BOND WILL BE REDUCED BY RS 100 AND THE BALANCE RS 150 PER BOND
WILL BE REPAID TO THE BONDHOLDERS AT THE END OF THE 10TH YEAR FROM
THE DATE OF ALLOTMENT OF THE BONDS.

1982 - THE COMPANY PROPOSED TO SET UP AN ELECTRICAL BUSINESS UNIT AT

PUNE
1983 - 1, 91, 708 NO. OF EQUITY SHARES ISSUED ON PART CONVERSION OF 13.5%
CONVERTIBLE BONDS (91 SHARES ISSUED DURING 1984/85).

1985 - 3, 00, 000 NO. OF EQUITY SHARES ISSUED ON PART CONVERSION OF 13.5%
CONVERTIBLE BONDS.

1987 - THE COMPANY ACCEPTED THE CONDITION LAID DOWN BY LIC WHICH
HOLDS RS 50.09 LAKHS OF THE DEBENTURES, THAT IN THE EVENT OF THE
COMPANY MAKING A PUBLIC OR RIGHTS ISSUE OF SHARE CAPITAL DURING THE
PERIOD UPTO 31ST OCTOBER, 1987, THE LIC SHOULD BE GIVEN ON ONE TIME
BASIS THE RIGHT TO BE ALLOTTED EQUITY SHARES OF A NOMINAL VALUE
EQUIVALENT TO 10% OF ITS HOLDINGS OF THE DEBENTURES ON TERMS AND
CONDITIONS ON WHICH SUCH EQUITY ISSUE IS MADE.

1988 - THE MATERIAL HANDLING BUSINESS GROUP SUCCESSFULLY INTRODUCED

UP-TO-DATE WAREHOUSING EQUIPMENT TO FURTHER ENLARGE ITS PRODUCT
RANGE. THE OPERATIONS OF MACHINE TOOL DIVISION WITNESSED ANOTHER
SUCCESSFUL YEAR WITH THE MANUFACTURING CAPACITY OF ALL DOMESTIC
PRINCIPALS BEING FULLY UTILISED.

1989 - WITH EFFECT FROM 1ST MARCH, "VOLRHO LTD." WAS AMALGAMATED
WITH THE COMPANY AS PER THE ORDER OF BIFR.THE COMPANY ISSUED 4, 44, 445
NO. OF EQUITY SHARES OF RS 10 EACH TO THE ERSTWHILE SHAREHOLDERS OF
"VOLRHO LTD”
1990 - APPROVAL WAS ALSO RECEIVED FOR EXTENDING HITACHI
COLLABORATION TO THE MANUFACTURE OF ABSORPTION REFRIGERATION
MACHINES. THE MATERIALS HANDLING BUSINESS GROUP PROPOSED TO EXTEND
ITS SCOPE OF ACTIVITIES TO TURN-KEY MATERIALS HANDLING SYSTEMS FOR
MASS PRODUCTION IN ENGINEERING INDUSTRIES.

1991 - THE PERFORMANCE OF THE INDUSTRIAL MACHINERY DIVISION WAS

ADVERSELY AFFECTED DUE TO A LOCK-OUT AT THE COMPANY'S PRINCIPAL,
WESTERWORKS.

1992 - THE COMPANY RESTRUCTURED ITS OPERATIONS INTO PRODUCT GROUP I

COMPRISING REFRIGERATORS, PHARMACEUTICALS AND CONSUMER PRODUCTS
AND BEVERAGES WHILE PRODUCT GROUP I(A) INCLUDE TEXTILE MACHINERY.
PRODUCT GROUP II CONSISTED OF MACHINE TOOLS, MATERIALS HANDLING
FACILITY, INDUSTRIAL MACHINERY, AIR-CONDITIONING PUMPS AND PROJECTS.
GROUP III COMPRISED OF CHEMICALS PLANT, CHEMICALS DIVISION AND AGRO-
INDUSTRIAL PRODUCTS.
1993 - THE COOLING APPLIANCES BUSINESS LAUNCHED FOUR NEW PRODUCTS
VIZ., WATER COOLERS FILLED WITH PURIFIERS DUCTABLE AND SLIM-LINE 3
TONNE AIR-CONDITIONERS, CEILING MOUNTED SPLIT IN 1.5 AND 3 TONNE
CAPACITIES AND 2 TONNE ROOM SPLIT UNITS.

1994 - THE HOME APPLIANCES DIVISION INTRODUCED 250 L REFRIGERATORS IN

THE MARKET AND A 100L REFRIGERATOR WAS EXPECTED TO BE LAUNCHED IN
THE FIRST QUARTER OF 1995-96.

1995 - THE COOLING APPLIANCES BUSINESS DIVISION IS TO INTRODUCE NEW

ROOM AIR-CONDITIONERS TO TOSHIBA DESIGN IN OCTOBER.

1996- PUMPS AND PROJECTED BUSINESS DIVISION SUCCESSFULLY DEVELOPED,

MANUFACTURED AND COMMISSIONED THE LARGEST SIZES OF HORIZONTAL
AND VERTICAL PUMPS IN ITS RANGE.

1997 - AFTER 3 YEARS OF GROWTH, THE CHEMICALS DIVISION FACED

DIFFICULTIES DURING THE YEAR AS VITAMINES AND VETERINARY DIVISION
WAS AFFECTED BY LIBERALISED IMPORTS UNDER THE ADVANCE LICENCE
SCHEME.

1998 - VOLTAS RECENTLY COMMISSIONED DADRA PLANT, WHICH HAS A

CAPACITY TO PRODUCE ABOUT 40,000 UNITS PER ANNUM IF IT WORKED ONE
SHIFT, CAN GO UP TO ONE LAKH UNITS PER ANNUM IF THE STRATEGIC
ALLIANCES WORKED OUT.

1999 - THE INDUSTRIAL COURT OF MUMBAI HAS GRANTED A STAY ON THE

VOLTAS LTD'S VOLUNTARY RETIREMENT SCHEME (VRS) IN MUMBAI
FOLLOWING OPPOSITION FROM THE VOLTAS EMPLOYEES UNIO.

2000 - THE COMPANY HAS RECEIVED A SPECIAL AWARD FOR COMPLETING THE
ELECTRO MECHANICAL PUMPING PROJECT OF AHMEDABAD MUNICIPAL
CORPORATION IN 120 DAYS.

2001 - TATA GROUP COMPANY VOLTAS LTD. IS RELAUNCHING VOLTAS

AIRCONDITIONERS UNDER THE `VERDANT' BRAND, A PREMIUM MODEL
TARGETED AT THE RETAIL SEGMENT.

2002- N D KHURODY APPOINTED AS ADDITIONAL DIRECTOR OF VOLTA.

2003- VOLTAS LTD HAS INFORMED BSE THAT MR BIR D SINGH EXECUTIVE
DIRECTOR HAS RETIRED FROM THE SERVICES OF THE COMPANY ON DECEMBER
27, 2002. ACCORDINGLY, HE CEASES TO BE A DIRECTOR AND WHOLETIME
DIRECTOR OF THE COMPANY.

2004- VOLTAS LTD. HAS INFORMED THAT IN RESPONSE TO THEIR APPLICATION

FOR VOLUNTARY DELISTING, THE DELHI STOCK EXCHANGE ASSOCIATION
LIMITED (DSE) HAS INFORMED THE COMPANY VIDE ITS LETTER DATED
DECEMBER 26, 2003 THAT THE SECURITIES OF THE COMPANY HAVE BEEN
DELISTED FROM DSE WITH EFFECT FROM DECEMBER 29, 2003.

2005- VOLTAS INTRODUCES NEW SERIES OF ACS, MAY SET UP PLANT IN

UTTARANCHAL, VOLTAS SECURES ORDER FOR WORLD'S TALLEST BUILDING.

2006- VOLTAS JOINS HAND WITH DUTCH COMPANY.

2007- VOLTAS LTD HAS INFORMED THAT UNIVERSAL COMFORT PRODUCTS

LTD (UCPL) IS A 50:50 JOINT VENTURE COMPANY BETWEEN VOLTAS AND
FEDDERS INTERNATIONAL AIR-CONDITIONING PVT LTD (FIACPL), A SUBSIDIARY
OF FEDDERS CORPORATION, USA.

2008- VOLTAS LTD HAS APPOINTED MR. JIMMY BILIMORIA AND MR. S N
MENON, INDEPENDENT DIRECTORS HAVE AS ADDITIONAL DIRECTORS OF THE
COMPANY WITH EFFECT FROM SEPTEMBER 22, 2008.

2009- VOLTAS' OVERSEAS MEP BUSINESS ACHIEVED PROFESSIONAL

RECOGNITION AT THE HIGHEST LEVELS, AT THE MEP MIDDLE EAST AWARDS
2008.

2010- MEMORANDUM OF UNDERSTANDING BETWEEN VOLTAS AND THE

MUSTAFA SULTAN GROUP TO FORM JOINT VENTURE COMPANY IN THE
SULTANATE OF OMAN

2011- VOLTAS LIMITED AND KION GROUP GMBH HAVE AGREED TO ESTABLISH
A JOINT VENTURE IN INDIA.

2012 - VOLTAS LTD HAS RECOMMENDED DIVIDEND OF RS. 1.60 PER SHARE.

2013 - VOLTAS ACQUIRES 100% STAKE IN ROHINI INDUSTRIAL ELECTRICALS

LTD.

2014 - VOLTAS EXECUTED A JOINT VENTURE AGREEMENT WITH DOW

CHEMICAL PACIFIC (SINGAPORE) PTE. LTD.

2015- VOLTAS, LEADERS IN AIR CONDITIONERS NOW FORAYS INTO 'FRESH-AIR

COOLERS - VOLTAS WINS MINISTRY OF POWER'S COVETED NATIONAL ENERGY
CONSERVATION AWARD FOR 2015 - VOLTAS WINS HONOURS FROM DUN &
BRADSTREET INDIA FOR BEING FIRST IN CONSUMER DURABLES.

2016 - VOLTAS LAUNCHES SMART WATER SOLUTIONS TO PROVIDE CLEAN

WATER - VOLTAS WATER SOLUTIONS COMBINES SMART ENGINEERING WITH
SMART WATER SCIENCE TO LAUNCH SMART WATER SOLUTION

2017 - VOLTAS LIMITED WON THE MOST COVETED MEP CONTRACTOR OF THE
YEAR AWARD - VOLTAS LIMITED AND ARÇELIK A.S. JOIN FORCES IN INDIA JOINT
VENTURE COMPANY TO BE ESTABLISHED TO TAP INDIA’S GROWING CONSUMER
DURABLES MARKET.
 CHAPTER 2

INTRODUCTION OF TOPIC
SALES PROMOTION STRATEGY
PROMOTING YOUR BUSINESS IS AN IMPORTANT PART OF YOUR DAILY
ACTIVITIES. AFTER ALL, IF CUSTOMERS ARE NOT SHOWING UP, THEN YOU
CAN'T MAKE A SALE. TO PROMOTE YOUR BUSINESS IN AN EFFECTIVE WAY,
CONSIDER USING THE TRIED AND TRUE SALES STRATEGIES OF "PUSH" AND
"PULL." WHETHER YOU USE COUPONS, GIVE AWAYS OR INCENTIVES FOR YOUR
BEST SALES PERSON, YOU WILL SEE YOUR BOTTOM LINE INCREASE.

PUSH SALES STRATEGY

THE PUSH SALES STRATEGY EMANATES FROM MANUFACTURERS WHO "PUSH"
THEIR PRODUCT THROUGH THE SUPPLY CHAIN TO THE CONSUMER. INCENTIVES
ARE OFFERED THAT GIVE EACH MIDDLE-CARRIER MOTIVATION TO CONVINCE
THE NEXT PERSON TO BUY THE PRODUCT. TRADITIONALLY, THIS TECHNIQUE
INCLUDES PREMIUMS, WHOLESALE DISCOUNTS AND BUY-BACK GUARANTEES.

THIS TECHNIQUE IS NOT ONLY FOR THE BIG PLAYERS WHO VIE TO GET THEIR
PRODUCT CARRIED BY OTHER RETAILERS. IF YOU HAVE A SMALL RETAIL
OUTLET OR OWN A SERVICE-PROVIDING COMPANY, YOU CAN STILL BENEFIT
FROM THIS STRATEGY. OFFERING A BONUS TO YOUR STAFF FOR SELLING THE
PRODUCT OR SERVICE OF-THE-WEEK IS A "PUSH" TECHNIQUE. GIVE CUSTOMERS
A FREE ITEM FOR REFERRING A FRIEND TO YOUR BUSINESS.

PULL SALES STRATEGY

THE "PULL" STRATEGY WORKS BY GETTING THE END CONSUMER INTERESTED IN
THE PRODUCT TO CREATE A DEMAND. WHEN THE DEMAND IS THERE, THE
SUPPLY CHAIN PULLS IT THROUGH, AS RETAILERS ASK SUPPLIERS AND
DISTRIBUTORS, WHO IN TURN ASK THE MANUFACTURER ABOUT THE PRODUCT.
IF YOUR BUSINESS HAS THE RESOURCES, YOU CAN LAUNCH A CAMPAIGN TO
GET END CONSUMERS EXCITED ABOUT YOUR PRODUCTS. TELEVISION, PRINT
AND ELECTRONIC ADVERTISING OPTIONS LEND THEMSELVES TO THE PULL
STRATEGY.

COMBINING PUSH AND PULL

TO BOLSTER SALES, TRY COMBING INING THE TWO SYSTEMS. FOR INSTANCE,
OFFER YOUR CUSTOMERS COUPONS, FREE GIFTS OR A FREQUEND CUSTOMER
LOYALTY INCENTIVE TO DRIVE TRAFFIC TO YOUR BUSINESS. THESE ACTIVITIES
FALL UNDER THA “PULL” STRATEGY

AT THA SAME TIME, OFFER YOUR SALES TEAM AN INCENTIVE SUCH AS A

VACATION CONTEST, EXTRA COMMISSION OR A BETTER PARKING SPACE FOR
SELLING A PARTICULAR PRODUCT OR MOVING A CERTAIN VOLUME OF
MERCHANDISE. THIS FALLS UNDER THA “PUSH”STRATEGY.

BY COMBINING THA TWO METHODS AS PART OF AN OVERALL PROMOTION, YOU

WILL BE MATCHING MOTIVATED BUYERS WITH AN EAGER SALES TEAM TO
INCREASE SALES GROETH..
 IMPORTANCE OF STUDY

SALES PROMOTION IMPORTANT AS IT CREATES AWARENESS FOR A PRODUCT OR

SERVICE THIS WILL USUALLY RESULT INTO HIGHER SALES AND PROFITS FOR
THE COMPANY.

SALES PROMOTION IS THE SHORT TERM PROCESS TO INCREASE THE SALES

VOLUME FOR A DEFINED PRODUCT, IN A DEFINED TERRITORY FOR A DEFINED
PERIOD OF TIME. BASICALLY THERE ARE TWO TYPE OF SALES PROMOTION
STRATEGY: A) PUSH UP SALES PROMOTION B) PULL UP SALES PROMOTION. IN
PULL UP SALES PROMOTION MARKETER TRIES TO PULL THE CUSTOMER WITH
SOME EXTRA BENEFIT, WITH SOME GIFTS AND OFFERS, WHILE IN PULL UP SALES
PROMOTION MARKETER TRIES TO PUSH THE PRODUCT TO THE CUSTOMER WITH
THE HELP OF DISTRIBUTION NETWORK, SHOWROOM OWNER WITH THE HELP OF
DEALER MEET ETC. THEREFORE MARKETERS USE SALES PROMOTION TO
INCREASE SALES VOLUME IN ORDER TO ACHIEVE TARGET.

SALE PROMOTION IS A PART OF THE MARKETING ACTIVITIES THROUGH WHICH

THE PRODUCT IS PROMOTED IN THE MARKET. IT IS FOR SHORT DURATION AND
IT IS CARRIED OUT TO CREATE A MIND SHARE AND THE CUSTOMER WILL THINK
OF THAT COMPANY'S PRODUCT WHEN HE WANTS TO BUY THE PARTICULAR
PRODUCT.

SALES PROMOTION A RE TEMPORARY INCENTIVES THAT A COMPANY USE TO

PROMOTE ITS PRODUCT RESULTING IN INDUCING THE CUSTOMERS TO BUY
NOW. THE MAIN CHARACTERISTICS ARE:

1)IT ENCOURAGE CUSTOMERS TO BUY ONE BRAND OVER ANOTHER BY

INTRODUCING SAMPLES,COUPONS,POP PROMOTIONS ETC.

2) OBTAINING TRIAL PURCHASE FROM CUSTOMERS.

3) STIMULATES SALES FORCE ENTHUSIASM.

4) REINFORCE ADVERTISING.

5) PRE-EMPT COMPETITION ETC.

SALES PROMOTION COMPAIGN OF VOLTAS
‘MURTHY AND UNWANTED ATITHI’

THE GROUNDED, DOWN-TO-EARTH AND HARDWORKING HOUSEHOLDER

MURTHY IS A MAN FOR ALL WEATHERS. SINCE 2012, HE HAS BEEN KEEPING HIS
COOL WITH BOSSES, IN-LAWS, FAMILY AND NOW HIS UNWANTED GUEST WITH
SLICE OF LIFE HUMOUR THAT HAS BECOME SYNONYMOUS WITH VOLTAS’
BRAND.

MURTHY’S UNWANTED GUEST KEEPS CONTROL OF BOTH THE TV REMOTE AND

HIS VOLTAS AC TO NOT USE POWER AT HIS OWN HOME. HE DRINKS HIS COFFEE,
SLEEPS ON HIS COUCH AND COMPLIMENTS MURTHY FOR HIS COMFORTABLE
HOUSE. BUT MURTHY DOESN’T MIND THAT HIS GUEST IS TAKING ADVANTAGE
OF HIS BENEVOLENCE AND USING HIS AC THROUGHOUT THE DAY BECAUSE OF
HIS ‘ATITHI DEVO BHAVA’ PHILOSOPHY. HE IS SMART AS HE HAS INVESTED IN
THE VOLTAS ALL STAR INVERTER AC WITH TWO-STAGE STEADY COOL
COMPRESSOR WHICH GIVES THE DOUBLE BENEFIT OF STEADY COOLING ALONG
WITH STEADY SAVINGS. ‘CHAIN KI NEEND’ FOR EVERYBODY INDEED!

VOLTAS HAS BEEN ABLE TO POSITION ITSELF AS ONE OF THE LEADING

CONSUMER ENGINEERING AND ELECTRONIC OPTIONS ACROSS INDIA. THE
COMPANY EMPLOYS A PRODUCT MARKETING STRATGY THAT AS ENTERPRISE
SOLUTIONS AND END USERS IN FOCUSES.

SINCE VOLTAS HAS DIFFERENT PRODUCTS ACROSS AN ARRAY OF CATEGORIES,

DIFFERENT PRICING STRATEGIES ARE USED ACCORDINGLY. AFFORDABLE
RANGE PRICING IS APPLIED ON THE HOUSEHOLD PRODUCTS WITH A NORMAL
PRICE RANGE BEING USED ON THE INDUSTRIAL PRODUCTS. THE QUALITY
STANDARDS OF PRODUCTION JUSTIFY ITS PRICES. SINCE VOLTAS PRODUCTS
ARE TRUSTED AND DUE TO ITS ASSOCIATION WITH THE TRUSTED TATA, MANY
CUSTOMERS DON’T ALWAYS MIND PAYING SLIGHTLY HIGHER THIS TRUSTS AT
TIMES INSIGHTS VOLTAS IN ITS PRICING STRATGY.

THE COMPANY HAS A VERY WIDESPREAD NETWORK ACROSS INDIA AND

BEYOND. ITS WELL-DESIGNED WEBSITE HAS PROVEN TO BE THE BEST
CATALOGUE ALL CUSTOMER BASES CAN DEPEND UPON. WITH ITS HEAD OFFICE
IN MUMBAI, THE COMPANY HAS OPENED OTHER OFFICES IN KOLKATA,
CHENNAI, DELHI AND MUMBAI FOR AN ELABORATE NETWORKING. UNDER
THESE ZONAL OFFICES ARE FOUND BRANCH OFFICES IN ALMOST ALL THE
CITIES OF INDIA. IN ADDITION, IT IS ALSO LOCATED IN SINGAPORE, SAUDI
ARABIA, QATAR, EMIRATES AND SAUDI ARABIA.

THE COMPANY BOASTS OF 360 BRANDING IN ITS PROMOTION STRATEGY THE

COMPANY ENDORSES A DEDICATED “GREEN” MISSION THAT IS GEARED
TOWARDS MINIMIZATION OF WASTE ENERGY CONSUMPTION AMONG OTHER
SUSTAINABLE PRACTICES THAT TEND TO SAVE THE WORLD FROM
ENVIRONMENTAL DEGRADATION. VOLTAS ALSO ENGAGES IN CSR ACTIVITIES
ACROSS SKILL AND VOCATIONAL STUDIES & DEVELOPMENT, IN HEALTH CARE,
SUSTAINABLE PRACTICES, AND DISASTER RELIEF AND IN EDUCATION. SUCH
ACTIVITIES BOOST THE GOOD “WORD OF MOUTH” AS WELL AS A FORMIDABLE
IMAGE, WHICH IS ONE OF THE COMPANY’S VISIONS AND MISSIONS.

SOME OF THE GREAT PROJECTS THE COMPANY HAS HANDLED HAVE GIVEN IT A
GOOD NAME. THESE INCLUDE THE PROVISION OF AIR CONDITIONING SERVICES
TO BURJ KHALIFA: THE TALLEST BUILDING IN THE WORLD, AS WELL AS TO RMS
QUEEN MARY 2, WHICH WAS ONCE THE WORLD’S LARGEST OCEAN LINER.
LATEST UPDATE ABOUT VOLTAS SALES
STRATGY

VOLTAS LAUNCHES ‘INDIA KA DIL, INDIA KA

AC’ CAMPAIGN; TARGETS 20 PER CENT SHARE
IN 2006
VOLTAS LTD HAS ANNOUNCED ITS MULTI-PRONGED STRATEGY TO A
ATTAINS MARKET SHARE OF 20 PER CENT IN THE DOMESTIC AC MARKET. A
RS 20 CRORE ADVERTISING BUDGET AND RS 6 CRORE RETAIL EXPANSION
BUDGET HAVE BEEN ALLOCATED FOR VOLTAS’ NEW RANGE OF WINDOW
AND SPLIT ACS. THE COMMUNICATION WILL STRESS ON ‘INDIA KA DIL,
INDIA KA AC’.

VOLTAS, THE AIR-CONDITIONING AND ENGINEERING SERVICES COMPANY OF

THE TATA GROUP, HAS ANNOUNCED ITS MULTI-PRONGED STRATEGY TO ATTAIN
A MARKET SHARE OF 20 PER CENT IN THE 1,500,000 (UNITS) DOMESTIC AIR
CONDITIONER MARKET. VOLTAS’ CURRENT MARKET SHARE WAS 16 PER CENT,
SAID A COMPANY OFFICIAL, OF WHICH 70 PER CENT CAME FROM
INSTITUTIONAL SALES.

A RS 20 CRORE ADVERTISING BUDGET AND A RS 6 CRORE RETAIL EXPANSION

BUDGET HAVE BEEN ALLOCATED FOR VOLTAS’ NEW RANGE OF WINDOW AND
SPLIT ACS. THE COMMUNICATION WILL STRESS ON ‘INDIA KA DIL, INDIA KA AC’.
BUOYED BY RESEARCH INSIGHTS THAT SAID INDIANS WERE INCREASINGLY
COMING BACK TO (AND TAKING PRIDE IN OWNING) INDIAN PRODUCTS, THE NEW
COMMUNICATION STRATEGY HAS BEEN PUT IN PLACE.

SAID K J JAWA, SENIOR VP, UNITARY BUSINESS PRODUCTS GROUP, VOLTAS LTD,
“WE REALISED THAT THE BIG IDEA MUST LEVERAGE THE RISING PRIDE IN
BRAND INDIA AND INDIAN BRANDS.A RECENT SURVEY SHOWS THAT PEOPLE
ARE COMING BACK TO INDIAN BRANDS, ARE REALISING THAT AMONG OTHER
THINGS, INDIAN BRANDS ARE RELIABLE, PROVIDE VALUE-FOR-MONEY, AND
CARED FOR THE CUSTOMER.”

THE NEW CAMPAIGN IS ALREADY VISIBLE IN THE CHENNAI MARKET. THE TVC
PLEASANTLY REINFORCES THE INDIANNESS OF VOLTAS, EVEN AS IT
SUCCESSFULLY TUGS AT HEARTSTRINGS. EURO RSCG IS THE CREATIVE AGENCY
ON THE BUSINESS, AND THE FILM WAS THE WORK OF PRAKASH VARMA OF
NIRVANA FILMS. STARCOM HANDLES THE MEDIA DUTIES FOR VOLTAS.
JAWA EXPLAINED THAT THE BRAND WAS ‘SHY’ AT FIRST, AND HAD CHOSEN TO
SHOW ITS MARKETING MUSCLE ONLY IN THE LAST THREE YEARS, FOLLOWING
THE COMPETITION FROM AMERICAN AND KOREAN BRANDS. IN 2002, IT TOOK ON
THE LINE ‘AC WITH IQ’ AND FOLLOWED IT UP WITH SUBSEQUENT CAMPAIGNS.
LAST YEAR, IT INTRODUCED THE SUB-RS 10,000 ACS WITH A VIEW TO BE
ACCESSIBLE TO A LARGER SECTION OF INDIAN HOUSEHOLDS. THE PRESENT
EFFORT, TOO, WAS TO REACH OUT TO A LARGER SECTION OF INDIAN
HOUSEHOLDS, ACCORDING TO JAWA.

HE ADDED, “OVER AND ABOVE THE ADVERTISING SPENDS AND OTHER BELOW
THE LINE ACTIVITIES, WE WOULD BE LOOKING AT ADDING 1,500 DEALERS,
MAKING IT A TOTAL OF 3,500 NATIONALLY, APART FROM STRENGTHENING OUR
FRANCHISEE SPREAD FROM 350 TO 500 THIS YEAR.”

THE ATTEMPT WOULD BE TO INCREASE THE DOMESTIC SHARE WITHIN ITS

MARKET SHARE TO 40 PER CENT, UP FROM THE PRESENT 30 PER CENT. CLAIMING
A GROWTH OF 50 PER CENT LAST YEAR AGAINST AN INDUSTRY AVERAGE OF 22
PER CENT TO 25 PER CENT, VOLTAS IS OPTIMISTIC OF ATTAINING ITS TARGET OF
300,000 UNITS THIS YEAR. IN THE LONG TERM, THE COMPANY IS TARGETING A
TURNOVER OF RS 10,000 CRORE BY 2010, GROWING STEADILY FROM LAST
YEAR’S RS 1,500-CRORE FIGURE.

VOLTAS DRAWING UP PLANS TO DOUBLE

PROFITS IN FOUR YEARS

VOLTAS IS ONE OF SEVERAL TATA COMPANIES THAT ARE SAID TO HAVE

SPRUNG INTO ACTION AFTER TATA SONS CHAIRMAN CYRUS MISTRY EXHORTED
CHIEF EXECUTIVES OF GROUP COMPANIES TO BECOME “BOLD” AND “AGILE.

MUMBAI: AIR CONDITIONER MAKER VOLTAS IS CHALKING OUT A STRATEGY TO

DOUBLE PROFITS OVER THE NEXT FOUR YEARS, ACCORDING TO A SENIOR
EXECUTIVE OF THE COMPANY.

VOLTAS IS ONE OF SEVERAL TATA COMPANIES THAT ARE SAID TO HAVE

SPRUNG INTO ACTION AFTER TATA SONS CHAIRMAN CYRUS MISTRY
EXHORTED CHIEF EXECUTIVES OF GROUP COMPANIES TO BECOME “BOLD” AND
“AGILE”. VOLTAS REPORTED A FIRST-QUARTER PROFIT OF RS 157.6 CRORE, UP
53.7% FROM A YEAR AGO.

A MONTH AGO DURING THE ANNUAL GROUP LEADERSHIP CONFERENCE, MISTRY

HAD TOLD TATA SONS’ TOP BRASS TO BE “BOLD AND AGILE”, AND
“COURAGEOUSLY” TAKE ON CHALLENGES. MISTRY HAD ALSO DISCUSSED THE
LEADERSHIP QUALITIES NEEDED TO TAKE THE CONGLOMERATE TO ITS TARGET
OF BECOMING ONE OF THE TOP 25 BUSINESS HOUSES GLOBALLY BY 2025.

TO ET’S EMAILED QUERY ON THE MATTER, VOLTAS SAID “THESE MATTERS ARE
INTERNAL TO THE COMPANY”. HOWEVER, THE EXECUTIVE CITED EARLIER SAID,
“THE PLAN TO AGGRESSIVELY FOLLOW A NEW STRATEGY WAS TAKEN IN THE
LAST BOARD MEETING AND ALL BUSINESS HEADS AND THE NEXT LINE IN
COMMAND HAVE BEEN INFORMED.” THE COMPANY HAS THREE BUSINESSES —
ELECTRO-MECHANICAL PROJECTS AND SERVICES; ENGINEERING PRODUCTS
AND SERVICES; AND UNITARY COOLING PRODUCTS.
.ITS MAIN SEGMENT—UNITARY COOLING PRODUCTS—CONTRIBUTED 65% TO
THE COMPANY’S TOTAL REVENUE FOR THE FIRST QUARTER. REVENUE STOOD
AT RS 1,855.2 CRORE AND IT WAS 18.6% MORE THAN A YEAR AGO.

SUCCESSION PLANNING

THE COMPANY WILL ALSO BE ON THE HUNT FOR THE NEXT IN LINE SINCE ITS
MANAGING DIRECTOR, SANJAY JOHRI, 63, AND CHIEF FINANCIAL OFFICER
AND PRESIDENT OF CORPORATE AFFAIRS, ANIL GEORGE, 58, WILL RETIRE IN THE
NEXT COUPLE OF YEARS. SUCCESSION PLANNING WAS DISCUSSED IN THE
MEETING AS WELL. TATA SONS AND ITS GROUP COMPANIES
HAVE A RETIREMENT AGE OF 65 FOR MDS AND 60 FOR OTHER SENIOR
EXECUTIVES.

VOLTAS IS NOT THE ONLY TATA GROUP FIRM LOOKING AT ITS NEXT LINE OF
LEADERS. IN JULY, ET HAD REPORTED THAT WATCH-TO-JEWELLERY MAKER
TITAN COMPANY TOO HAS STARTED SUCCESSION PLANNING SINCE FIVE-SIX OF
ITS TOP BRASS WILL RETIRE IN THE NEXT TWO-THREE YEARS.

ALSO ON THE ANVIL IS ADDING MORE “AGILITY” AND “FLEXIBILITY” ACROSS

THE COMPANY’S BUSINESSES AND THE TOP BRASS HAVE BEEN ASKED
TO ENSURE THERE IS MORE INNOVATION IN THE PIPELINE, THE EXECUTIVE
QUOTED EARLIER SAID. THEY HAVE BEEN ASKED TO FOCUS ON INTERNATIONAL
MARKETS LIKE THE MIDDLE EAST, FROM WHERE LARGE ORDERS ARE EXPECTED
TO ROLL IN WITH GLOBAL EVENTS LIKE WORLD EXPO — DUBAI 2020 AND THE
QATAR OLYMPICS IN 2022.

SOME OF VOLTAS’ RECENT BETS LIKE AIR COOLERS HAVE WORKED WELL FOR
THE COMPANY. ACCORDING TO A REPORT BY AXIS DIRECT, VOLTAS
SOLD 50,000 AIR COOLERS IN FIRST QUARTER, AND THE MANAGEMENT ISNOW
LOOKING AT EXPANDING THE PRODUCT PORTFOLIO AND DEALERSHIP
NETWORK.

THE AC MARKETS HAVE DONE WELL LAST QUARTER, BUT COMPETITION FROM
JAPANESE FIRMS LIKE DAIKEN, HITACHI ON THE ROOM-AC SIDE IS WORRYING.
THEIR INTERNATIONAL BUSINESS HAS BEEN A DRAG WITH COMMERCIAL
PROJECTS TAKING TIME,” SAID AN ANALYST WHO TRACKS THE COMPANY.
ON WEDNESDAY, SHARES OF VOLTAS CLOSED 0.74% LOWER ON BSE

VOLTAS MAY EXPAND CAPACITY BY NEXT

YEAR.

AIR-CONDITIONER MAJOR VOLTAS MAY HAVE TO GO IN FOR CAPACITY

EXPANSION BY EARLY NEXT YEAR — EITHER BY SETTING UP NEW LINES IN THE
EXISTING FACILITY OR A GREEN FIELD UNIT— AS ITS CURRENT PRODUCTION
FACILITY IS RUNNING TO ITS CAPACITY. “WE ARE YET TO TAKE A CONCRETE
DECISION ON THIS,” SAID PRADEEP BAKSHI, PRESIDENT AND CHIEF OPERATING
OFFICER OF VOLTAS LTD.
WITH MORE THAN SEVEN LAKH UNITS SOLD LAST YEAR, THE MARKET LEADER
COMMANDS OVER 20 PER CENT SHARE OF THE 3.5-MILLION-UNIT ROOM AIR-
CONDITIONER MARKET IN THE COUNTRY.
FOR THE CURRENT YEAR, IT HAS LAUNCHED 68 NEW MODELS OF SPLIT AIR-
CONDITIONER, INCLUDING FIVE MODELS IN THE ‘INVERTER’ RANGE. BESIDES, IT
IS ALSO IN THE PROCESS OF EXPANDING ITS NETWORK OF CHANNEL PARTNERS
AND RETAIL FOOTPRINT ACROSS THE COUNTRY. “WITH ALL THIS, WE HOPE TO
SELL MORE THAN A MILLION UNITS IN 2014,” BAKSHI SAID. TILL THE COMPANY
FINALISES ITS PLANS ON EXPANSION, IT MAY OPT TO OUTSOURCE SOME OF ITS
PRODUCTS AS A TEMPORARY ARRANGEMENT.
THE COMPANY, PART OF THE TATA GROUP, PIONEERED THE CONCEPT OF
ENERGY-EFFICIENCY IN AIR-CONDITIONERS. IT IS THE MARKET LEADER IN 5-
STAR LABELLED AIR-CONDITIONER SEGMENT TOO. “OVER 30 PER CENT OF OUR
TOTAL AC BUSINESS COMES FROM THE 5-STAR CATEGORY, WHILE THE
INDUSTRY AVERAGE IS 15 PER CENT,” HE SAID. ACCORDING TO BAKSHI, VOLTAS
WILL FOCUS ON ITS INVERTER MODELS THIS YEAR. THE COMPANY HAS MADE A
NEW TELEVISION COMMERCIAL CREATED BY OGILVY & MATHER TO PROMOTE
THE NEW RANGE, AND RS 60 CRORE HAS BEEN SET ASIDE FOR ADVERTISING.
IN ADDITION TO ITS UNITARY PRODUCTS BUSINESS THAT INCLUDES ROOM AIR-
CONDITIONERS, WATER DISPENSERS AND COMMERCIAL REFRIGERATION
PRODUCTS, VOLTAS HAS ANOTHER DIVISION THAT OFFERS ENGINEERING
SOLUTIONS TO A WIDE SPECTRUM OF INDUSTRIES SUCH AS HEATING,
VENTILATION, ELECTRO-MECHANICAL PROJECTS, TEXTILE MACHINERY,
THE COMPANY IS THE MARKET LEADER IN 5-STAR LABELLED AC SEGMENT-
SHIVA KUMAR PUSHPAKAR.

MAKING EXCELLENCE
A WAY OF LIFE
 AT VOLTAS, WE HAVE INCULCATED A CULTURE OF EXCELLENCE. WE BELIEVE
IN CONTINUAL IMPROVEMENT ON ALL OUR ACTIVITIES IN ORDER TO EXCEED
EXPECTATIONS OF THE KEY STAKEHOLDERS.

OUR QUEST FOR EXCELLENCE IS BASED ON THE TATA BUSINESS EXCELLENCE

MODEL (TBEM). WITH A STRONG EMPHASIS ON VISIONARY LEADERSHIP, OUR
FOCUS IS TO MAXIMISE PROFITS FOR OUR SHAREHOLDERS AND EXTEND AN
UNSURPASSED COMMITMENT TO OUR CLIENTS. CAREFUL PLANNING, PRUDENT
MANAGEMENT OF A WISELY SELECTED WORKFORCE WITH AN UNPARALLELED
SET OF SKILLS, ENSURES WE CONSTANTLY RAISE BENCHMARKS.

AT THE CENTER OF OUR FORMULA FOR SUCCESS, LIES OUR COMMITMENT TO

SOCIOECONOMIC DEVELOPMENT, ENERGY EFFICIENCY, ENVIRONMENTAL
PROTECTION AND OUR ASSURANCE TO IMPROVE THE OVERALL QUALITY OF
LIFE.

LEADERSHIP
THE TATA BUSINESS EXCELLENCE MODEL

TO GUIDE\ STIMULATE EMPLOYEES TO BETTER ON ORDER TO MEET THE

ORGANISATION GOAL. MEET CORPORATE SOCIAL RESPONSIBILITIES AND
ADHERE TO THE NORMS OF CORPORATE GOVERNANCE.

OPERATION FOCUS
THE TATA BUSIMESS EXCELLENT MODEL

INTEGRATING PROCESSES ACROSS BUSINESS UNITS AND ORGANISATIONS, TO

OFFER VALUE TO CUSTOMERS AND SUCCESS TO THE ORGANIZATION.
 CUSTOMER AND MARKET KNOWLEDGE
THE TATA BUSIMESS EXCELLENT MODEL

THE MOST CRUCIAL FACTOR THATHELP COMPANY STAY CONNECTED WITH THE
CHANGGING NEED OF CUSTOMERS AND THE MARKET AND SPOT OPPORTUNITIES
TO CREATE INNOVATIVE OFFERINGS.

WORKFORCE FOCUS
THE TATA BUSIMESS EXCELLENT MODEL

HANDLING TALENT ACQUISITION, MANAGEMENT, DEVELOPMENT AND

CRITICAL AREAS LIKE SAFETY,HEALTH AND ENVIRONMENT, THE CATEGORY
COMPREHENSIVELY COVERS THE VARIOUS AREAS OF HUMAN RESOURCES
MANAGEMENT.

STRATEGIC PLANNING
THE TATA BUSIMESS EXCELLENT MODEL

IN A COMPLEX, VOLATILE MAEKET, STRATEGIC PLANNING DEFINES A

DIRECTION FOR THE ORGANIZATION AND ALLOCATES RESOURCES IN PURSUIT
OF THAT DIRECTION.

MEASUREMENT, ANALYSIS AND KNOWLEDGE

MANAGEMENT
THE TATA BUSIMESS EXCELLENT MODEL

A RULE OF MEASURING, ANALYSIS AND IMPROVING THE PROCESSES &PRACT

COUPLED WITH SHARING OF KNOWLEDGE ACROSS THE
ORGANISATION.INFORMATION TECHNOLOGY PLAYS A SIGNIFICANT PART IN
INTEGRATING ORGANIZATION PROCESSES.
VOLTAS LIMITED KEY DATA:
Ticker: VOLTAS Country: India

Exchanges: BOM Major Industry: Capital Goods

Refrigeration & Heating

Sub Industry:
Equipment

64,043,800,000
2018 Sales Employees: 8,118
(Year Ending Jan 2019).

Currency: Indian Rupees Market Cap: 203,392,380,000

Fiscal Yr Ends: March Shares Outstanding: 330,800,000

Share Type: Ordinary Closely Held Shares: 100,253,480

RECENT STOCK
PERFORMANCE:
1 Week -0.9% 13 Weeks 0.0%
Current Price (4/18/2019): 614.85
(Figures in Indian Rupees) 4 Weeks 14.9% 52 Weeks -3.3%
AC MAKERS LG, VOLTAS TO INCREASE
PRODUCTION BY 20% TO MEET SUMMER
DEMANDS
The companies expect this will boost sales since
consumers can compare the models on an even platform.
WITH WARM TEMPERATURE IN WEST AND SOUTH PUSHING DEMAND BY OVER
15% IN FEBRUARY AND MET OFFICE FORECASTING A HARSH SUMMER THIS
YEAR, AIR-CONDITIONER MAKERS SUCH AS VOLTAS, LG, DAIKIN AND GODREJ
ARE EXPANDING THEIR PRODUCTION BY UP TO 20%.

THE WHITE GOODS INDUSTRY, WHICH HAS BEEN BATTLING POOR SALES FOR
OVER 6 MONTHS, EXPECTS AIR-CONDITIONER SALES TO GROW ALMOST 20%
THIS SUMMER BASED ON EARLY SALES TREND AND FORECAST BY INDIA
METEOROLOGICAL DEPARTMENT (IMD) OF AVERAGE TEMPERATURE BEING
ABOVE NORMAL BY MORE THAN ONE DEGREE CELSIUS IN MOST OF THE
COUNTRY FROM MARCH TO MAY.

HE SAID, “COMPANIES ARE NOW BUILDING UP ADDITIONAL INVENTORY

PIPELINE AS THEY WERE EARLIER EXPECTING 10-12% SALES GROWTH. “WE ARE
RAMPING UP PRODUCTION BY ALMOST 20% SINCE WE EXPECT MUCH HIGHER
SALES GROWTH NOW THAN WHAT WAS INITIALLY EXPECTED,” SAID TATA-
OWNED VOLTAS MANAGING DIRECTOR PRADEEP BAKSHI. “THERE IS ALSO A LOT
OF PENT-UP DEMAND OF LAST YEAR. WE ARE GEARING UP OUR PRODUCTION TO
STOCK UP.
GODREJ APPLIANCES BUSINESS HEAD KAMAL NANDI SAID THE IMD
PROJECTION HAS BEEN THE BIGGEST POSITIVE DEVELOPMENT FOR THE
INDUSTRY IN THE ABSENCE OF ANY OTHER INDICATOR SUPPORTING
GROWTH. “NIGHT TEMPERATURE IN WEST AND SOUTH IS 25-DEGREES
PLUS SINCE MID-FEBRUARY, PUSHING SALES. WE WOULD NOW RUN OUR
PLANT IN PEAK CAPACITY.”

THE WHITE GOODS INDUSTRY HAS BEEN AFFECTED BY CONSUMERS

HOLDING BACK DISCRETIONARY SPENDING WHEREBY SEVERAL
CATEGORIES LIKE TELEVISION, REFRIGERATORS AND WASHING
MACHINES REPORTING FLAT TO LOW SINGLE DIGIT GROWTH SINCE THE
INTRODUCTION OF GST.
DAIKIN AIR-CONDITIONING INDIA CEO KJ JAWA SAID THE COMPANY HAS
RAMPED UP PRODUCTION WITH TARGET OF GROWING FASTER THAN THE
MARKET.

HE SAID, “WE HAVE RECENTLY STARTED PRODUCTION AT OUR SECOND

PLANT WHICH HAS INCREASED THE ANNUAL CAPACITY FROM 7 LAKH
UNITS TO 1.5 MILLION UNITS. THE TARGET IS TO TOUCH RS 4,000 CRORE
SALES THIS YEAR AS COMPARED TO RS 3,250 CRORE OF LAST YEAR

AC MAKERS HAVE ALSO MOVED TO A COMMON ENERGY EFFICIENCY

RATING, INDIAN SEASONAL ENERGY EFFICIENCY RATIO (ISEER RATINGS)
AS MANDATED BY THE GOVERNMENT FOR BOTH INVERTER COMPRESSOR
MODELS AND LOWER-PRICED FIXED SPEED AC MODELS. THE COMPANIES
EXPECT THIS WILL BOOST SALES SINCE CONSUMERS CAN COMPARE THE
MODELS ON AN EVEN PLATFORM AND REALISE HIGHER SAVINGS ON
THEIR ELECTRICITY BILLS.

ONLY ALL-WEATHER ACS FROM VOLTAS STABLE

FROM THIS SUMMER
WHILE ACS IS MOSTLY SOLD DURING SUMMERS, THE AGGRESSIVE MARKETING
OF ALL-WEATHER ACS KEPT VOLTAS' SALES RUNNING THROUGHOUT THE YEAR.
VOLTAS LTD, A TATA GROUP COMPANY, HAS DECIDED TO BID ADIEU TO
NORMAL AIR-CONDITIONING (AC) MACHINES AS PART OF ITS STRATEGY TO
FOCUS ON ALL-WEATHER ACS, INTRODUCED LAST SUMMER.

THE COMPANY ON THURSDAY UNVEILED 86 NEW STOCK-KEEPING UNITS

(SKUS), WITH 23 BEING WINDOW ACS “ALL SKUS ARE ALL-WEATHER ACS,
AND ALL OUR FUTURE PRODUCTS WILL BE IN THE ALL-WEATHER AC
CATEGORY," SAID PRADEEP BAKSHI, CHIEF OPERATING OFFICER, VOLTAS
UNITARY PRODUCTS BUSINESS GROUP (UPBG).

LAST SUMMER, VOLTAS LAUNCHED ABOUT 70 SKUS, MAINTAINING A

GOOD MIX OF ALL-WEATHER ACS AND THE NORMAL MACHINES. ALL-
WEATHER ACS HAVE HELPED THE COMPANY REGAIN ITS LEADERSHIP
POSITION IN THE DOMESTIC MARKET. ACCORDING TO BAKSHI, VOLTAS
HAS 18.5 PER CENT MARKET SHARE IN THE DOMESTIC AC MARKET AS ON
MARCH 2013.

WHILE ACS IS MOSTLY SOLD DURING SUMMERS, THE AGGRESSIVE

MARKETING OF ALL-WEATHER ACS KEPT VOLTAS' SALES RUNNING
THROUGHOUT THE YEAR. THIS SUMMER, VOLTAS TARGETS ITS REVENUE
FROM ACS TO INCREASE BY 20 PER CENT WITH SALES OF ONE MILLION
UNITS.

"WE HAVE BEEN GROWING AT AROUND 20 PER CENT IN THE LAST FEW
YEARS AND WE ARE CONFIDENT TO MAINTAIN THE GROWTH RATE THIS
FISCAL AS WELL," BAKSHI SAID. THE COMPANY'S UPBG VERTICAL POSTED
A TURNOVER OF RS 1,560 CRORE IN 2011-12. IT SOLD ABOUT 800,000 ACS
LAST FINANCIAL YEAR.

LAST YEAR, THE TATA GROUP UNIT HAD REPORTEDLY CROSSED ITS
KOREAN RIVALS, LG ELECTRONICS AND SAMSUNG ELECTRONICS, IN
TERMS OF SALES
BAKSHI IS HOPEFUL THAT TIER-II AND III CITIES WILL BECOME GROWTH
DRIVERS, CONTRIBUTING ABOUT 55 PER CENT TO THE COMPANY'S ANNUAL
SALES, AS METRO MARKETS ARE GETTING SATURATED DAY BY DAY.
THE COMPANY GETS ABOUT 85 PER CENT FROM RETAIL AND DISTRIBUTION
SALES, AND THE REMAINING 15 PER CENT COMES FROM INSTITUTIONAL SALES.
THOUGH INPUT COSTS HAVE INCREASED, THE COMPANY WOULD NOT CONSIDER
ANY PRICE RISE THIS SUMMER, BAKSHI SAID.
AT PRESENT, VOLTAS HAS AROUND 6,000 DISTRIBUTORS ACROSS THE COUNTRY.
IT AIMS TO CROSS 7,500 OF SUCH TOUCH POINTS BY THE END OF THIS FINANCIAL
YEAR.
THE COMPANY WOULD SPEND ABOUT THREE PER CENT OF ITS REVENUE ON
MARKETING DURING THE SUMMER..

VOLTAS STOCK'S PROSPECTS IMPROVING SLOWLY, BUT ANALYSTS NOT YET

BULLISH

SHARES OF VOLTAS HAVE REBOUNDED OVER 20 PER CENT SINCE FEBRUARY

LOWS ON HOPES THAT AS THE SUMMER SEASON KICK STARTED IN SOUTH INDIA
DRIVING DEMAND FOR COOLING PRODUCTS, ESPECIALLY AIR CONDITIONERS
(ACS), NORTH INDIA WOULD FOLLOW SUIT SOON. THE CHANNEL CHECKS ALSO
INDICATE THAT SOME INVENTORY HAS BEEN CLEARED, WHICH IS POSITIVE.
AS PER ANALYSTS AT CLSA, THE AC INVENTORY HAS NOW STARTED COMING
DOWN AND STANDS AT ONE MONTH FOR VOLTAS AS AGAINST TWO MONTHS AS
ON DECEMBER’18. THE COMPANY, ALONG WITH PEERS, HAD NOT SEEN A
FAVOURABLE ENVIRONMENT IN THE FIRST NINE MONTHS OF FY19 AS
SEASONAL.

INCREASING SALES YET TO AID MARGINS AT

VOLTAS AS VALUATIONS LIMIT POTENTIAL.

 PROSPECTS IN VOLTAS' AC BUSINESS DOVETAILED WITH A STRATEGY TO

PENETRATE OTHER WHITE GOODS SUB-SEGMENTS POWER SHARE PRICES

 BUT IT REMAINS TO BE SEEN SEEN IF THE DEMAND PULL IN THE AC

BUSINESS CAN POWER VOLTAS' MARCH QUARTER REVENUE.

 SHARES OF VOLTAS LTD SIZZLED THIS PAST MONTH, GAINING 18% UNTIL

FRIDAY BEFORE COOLING OFF. BETTER PROSPECTS IN ITS AIR

CONDITIONING (UNITARY COOLING PRODUCTS OR UCP) DIVISION

DOVETAILED WITH A STRATEGY TO PENETRATE OTHER WHITE GOODS

SUB-SEGMENTS POWERED THE SHARES.

 HIGHER SALES IN THE SOUTH IN THE LAST FEW WEEKS NORMALIZED

INVENTORY FROM TWO MONTHS UNTIL DECEMBER TO ONE MONTH.

AHEAD, EFFORTS TO BROADEN ITS PRODUCT RANGE AND OFFER GREATER

CHOICE TO CUSTOMERS COULD LEAD TO MARKET SHARE GAINS. AS

SUCH, THE FIRMS’S SHARE IN ROOM AIR CONDITIONERS (ACS) HAS

GROWN ABOUT 600 BASIS POINTS IN THE LAST SIX YEARS TO 24%.

BUT, THAT’S NOT ENOUGH. IT REMAINS TO BE SEEN IF THE DEMAND PULL

CAN POWER THE COMPANY’S MARCH QUARTER REVENUE.

 IN THE LAST TWO QUARTERS, VOLTAS HAS BEEN UNABLE TO RAISE

PRICES DUE TO WEAK DEMAND RESULTING IN 3% SALES CONTRACTION IN

THE NINE MONTHS ENDED DECEMBER. LITTLE SURPRISE, THE STOCK HAS

UNDERPERFORMED BENCHMARK INDICES FOR A LONG TIME IN

CALENDAR YEAR 2018.

 ACCORDING TO A JM FINANCIAL SERVICES LTD REPORT, “INDUSTRY

PLAYERS ARE UNABLE TO HIKE PRICES TO MAKE UP FOR ADVERSE

CURRENCY MOVEMENTS AND IMPORT DUTIES AS COMPETITION REMAINS

HIGH. FURTHER, RISING COSTS AND STICKY SELLING PRICES IN THE UCPS

SEGMENT HAS ALREADY TAKEN MARGINS DOWNHILL. VOLTAS

 MANAGEMENT MAINTAINED ITS FULL-YEAR GUIDANCE FOR UCPS

SEGMENT MARGINS AT 11% FOR FY19 VERSUS 14.7% IN FY18."

 FURTHER, THE COMPANY’S ENTRY INTO REFRIGERATORS AND WASHING

MACHINES THROUGH A JOINT VENTURE, VOLTAS BEKO, WOULD

TRANSLATE INTO REVENUE ACCRETION ONLY AFTER A FEW QUARTERS.

INITIAL MARKETING COSTS MAY ALSO TELL ON ITS OVERALL NEAR-TERM

PROFITABILITY.

 AS IF THIS IS NOT ENOUGH, NEW ORDERS IN ITS EMP (ELECTRO-

MECHANICAL PROJECTS) DIVISION ARE SLACK. EXECUTION DELAYS HAVE

CUT INTO MARGINS. ANALYSTS SAY WITH ABOUT 18 MONTHS’ REVENUE

VISIBILITY IN ITS KITTY, THE DIVISION INTENDS TO FOCUS ON ORDERS

WITH BETTER MARGINS.

 VOLTAS IS AIMING AT GREATER LOCALIZATION TO REPLACE IMPORTED

PARTS TO GROW ITS EBITDA (EARNINGS BEFORE INTEREST, TAX,

DEPRECIATION AND AMORTIZATION) MARGIN, AT PRESENT AROUND 8-9%.

NO DOUBT, THE COMPANY IS MAKING THE RIGHT MOVES TO STRENGTHEN

ITS OPERATIONS IN THE UCP AND EMP DIVISIONS.

 HOWEVER, IT MAY BE SEVERAL QUARTERS BEFORE THE FAVOURABLE

EFFECT TRANSLATES INTO EARNINGS GROWTH.

 IN FACT, SOME SCEPTICS FORECAST A CONTRACTION IN

EARNINGS IN FY19 BEFORE IT GAINS TRACTION IN SUBSEQUENT
YEARS. MEANWHILE, THE RECENT RALLY HAS PUFFED UP
VALUATIONS. VOLTAS’S CURRENT SHARE PRICE OF ₹612.35
DISCOUNTS FY21 EARNINGS ESTIMATE ON BLOOMBERG BY 31
TIMES, WHICH MAY CAP ITS POTENTIAL TILL EARNINGS
MEASURE UP.
HUMAN RESOURCES STRATEGY
THE TURNAROUND REQUIRED SHARPENING OF HUMAN RESOURCES, INDUCING

CONTINUOUS LEARNING AND ENHANCED TRAINING EFFORTS, ALONG WITH

RESALVING INDUSTRIAL DISPUTES THAT USED TO AFFECT PERFORMANCE.

VOLTAS HAD SPLIT ITS HUMAN RESOURCES DEPARTMENT INTO TWO DIVISIONS

IN THE LATE 1990s. THE FIRST DIVISION ACTED AS A THIK THAN FOR PEOPLE

POLICIES AND PROCESSES AND MANAGED CORPORATE HUMAN RESOURCES

AND INDUSTRIAL RELATIONS. THE SECOND DIVISION HANDLED ISSUES OF

INTEREST TO THE COMPANY’S UNIONIZED EMPLOYEES AT THE DIVISIONS AND

LOCATION. VOLTAS HAD THREE BUSINESS DIVISION AND LINE LOCATION.

THE ERSTWHILE MD OBSERVED, ’THE MANAGES WERE NOT USED TO

CONFRONTATION AND THE MANAGMEMENT ALSO NEVER BACKED MANAGERS

WHO ADOPTED A CONFRONTATIONIST ATTITUDE TOWARDS EMPLOYEES. SO

MANAGERS WERE MEEK. THE UNION HAD A HISTORY OF FIGHTING THE

MANAGEMENT AND HAD OFFEN WON THEIR DEMANDS IT WAS A COMMUNIST

IDEOLOGY THAT THEY FOLLOWED BECAUSE OF WEEK MANAGERS AND

LEADERSHIP IT WAS ALWAYS THE TAIL WAGGING THE DOG. SO, ONE OF MY

FIRST STEPS WAS TO STRENGTHEN THE MANAGEMENT’’.

ACCORDING TO VICE PRESIDENT, HUMAN RESOURCES “THERE WASA NEED TO

INSTILL MORE CONFIDENCE IN MANAGERS AND BOOST THEIR MORALE.THEY

WERE MEEK BECAUSE THE TOP MANAGEMENT WOULD NOT BACK THEM UP IF

THEY SOUGHT CONFRONTATION. THIS HAD RESULTED IN THE UNION AND

EMPLOYEES DICTATING TEMS ORIENTED THAN MANAGERS. IN FACT IT WAS THE

OPPOSITE IN THE MANAGEMENT EVEN COMMUNICATION AT THE MANAGERIAL

LEVEL IS INCONSISTENT BECAUSE OF PERSONL DIFFERENCES WHERE AS IN

WORKERS COMMUNICATION IS BRTTER. WE HAD TO EDUCATE MANAGERS ON

THEIR LOGAL RIGHTS AND HOW TO BE ASSERTIVE WHILE DEALING WITH

WORKERS. WE TAUGHT MANAGERS TO FIRST ACT. THEN DECIDE AND JUSTING.

THE IDEA WAS TO MAKE THEN ENFORCE DISCIPLINE AMONGST THE

EMPLOYEES.

“THE UNION HAD TO BE TAMED AND GOVERNANCE TIGHTENED. ENFORCEMENT

OF DISCIPLINE REQUIRED THAT EMPLOYEES FOLLOW RULES STRICTLY.

CHRONIC ABSENTECISN, DISOBEDIENCE AND REFUSED TO WORK OR MORE TO

OTHER SECTIONS WOULD NOW INVIT DISCIPLINARY ACTION. EXEMPLARY

DISMISSALS WERE DONE TO REND OUT THE MESSAGE THAT THE MANAGEMENT

WAS SERIOUS SOME REDUNDONT WORKERS WOULD BE SEPARTED AND SEATED

AT CORNERS SINCE THEY HAD NO WORK TO DO BUT WERE GIVEN FULL WAGES

A CULTURE OF PERFORMANCE WAS INSTILLED WHEREIN IF WORKERS DID NOT

MEET TARGETS THEIR WAGES WERE SLASHED ACCORDINGLY. THOSE WHO

WERE NOT PERFORNING BEGIN TO FEAR THAT THEY MIGHT LOSE THEIR JOBS,

AN OTHER STRATEGY WAS TO LET REDUNDANT WORKERS, WHO DID NOT TAKE

BEHALF PLEADING THAT IT WAS EMBARRASSING FOR THEY WANTED THE

COMPANY TO ALLOW THEM INSIDE THE WORK PREMISES. THE COMPANY

ARGUED THAT THERE WAS NO WORK FOR THEM LELTING THEM IN WOULD

MERELY ADD TO THE COST OF PROVIDING TRANSPORT, FOOD AND MAINTANING

OVERHEADS WITHOUT THEIR CONTRIBUTING ANYTHING TO THE COMPANY. THE

COURT UP HELD THE COMPANY STANCE, STATED THE VICE PRESIDENT, HUMAN

RESOURCESS”.
DOWNSIZING WORKFORCE NUMBERS WAS AN IMPORTANT ELEMENT OF THE

HUMAN RESOURCE STTRELEGY. VOLTAS RADUCED ITS INVESTMENT IN

MANUFACTURING BY CHANGING ITS FOCUS TO OUT SOURCING AND ASSEMBLY

BASED OPERATIONS BY HIVING OFF CONSUMER.DURABLES AND CHEMICALS

THE TOTAL STAFF STRENGHT WAS BROUGHT DOWN FROM 10,200 IN 1997 TO 8700

IN 1999. FURTHER REDUCTIONS WERE ACHIEVED BY COORDINATION AND

REORGANIZATION OF FUNCTIONS, SUCH AS INTEGRATION OF COMMERCIAL AND

FINANCIAL FUNCTIONS OF EACH DIVISION AT EACH LOCATION.

IN THE ANNUAI REPORT FOR 1998-99 THE BOARD OF DIRECTORE REPORTED THAT

“CONTINUCEUS DIALOGUES WITH THE UNIONS WERE DONE WHILE KEEPING ALL

DOORS OPEN DELIVERING FIRM MESSAGES ON WHAT IS EXPECTED BY WAY OF

REDUCED HOLIDAYS, CANTEEN AND TRANSPORT SUBSIDIES WORK FLEXIBILITY

AND LEAN NUMBERS. THE MANAGEMENT IS DETERMINED TO ELIMINATE ALL

COSTS THAT DO NOT BRING ANY VALUE TO THE COMPANY’S BUSINESSES. THE

COMPANY INTRODUCED A VRS ON 23rd APRIL 1999 AND ACHIEVED A REDUCTION

OF 500 PEOPLE AT A TOTAL COST OF RS 193 MILLION.. THE DIRETORS HOPED

THAT THE UNION WILL APPRECIATE THE COMPANY’S EFFORTS TO MAKE

VOLTAS LEAR WITHOUT WHICH IT CANNOT MATCH COMPETITONS”.

THE FIRST VRS OF 23 APRIL 1999 HAD DRAWN A LUKEWARM RESPONSE AND THE

UNION WENT TO THE INDUSTRIAL COURT COMPLAINING THAT THE VRS

VIOLATED ANEARLIER AGREEMENT WITH THE UNION THAT FOR EVERY FOUR

WORKERS LEAVING, AT LEAST THREE NEW APPOINTMENTS WOULD MADE. ON

MAY 5, 1999 THE VRS WAS STAYED BY THE COURT. HOWEVER THE COURT

HOWEVER, THE HIGH COURT REJECTED THE UNION’S PLEA AND THE COMPANY
RE-NOTIFIED THE VRS ON NOVEMBER 15, 1999. THE UNION CONTINUED TO

DISCOURAGE WOKERS FROM ACCEPTING VRS.

IN THE ANNUAL REPORT OF 1999-2000 THA BOARD OF DIRECTORS REPORTED

THAT “EFFORTS CONTINUE TO CORRECT THA OVERSTAFFING OF MANY OF

COMPANY’S BUSINESSES AND ACTIVITIES DURING THA YEAR ,THE HEADCOUNT

DROPPED BY 3001 NUMBERS OF WHICH 1290 PEOPAL OPTED FOR VRS FOR

PERMANENT GENERAL. STAFF AND 1436 SEPARATED ON ACCOUNT OF

DIVESTMENT OF WHITE GOODS BUSINESS THE REST WERE ON ACCOUNT OF

NATURAL ATTRITION WHICH WERE NOT REPLACED BOTH AT MANAGERIAL AND

WORKMAN LEVELS…………..THE COMPANY HAS ANNOUNCED A FRESH EARLY

SEPARATION SCHEME BY WHICH 75% OF LAST DRAWN SALARY IS PAID AS

PENSION TO SURPLUS WORKMEN UPTO NORMAL DATE OF RETIREMENT OR FOR

10 YEARS WHICHEVER IS EARLIER. INDUSTRIAL RELATIONS REMAINED

HARMONIOUS, TAKINGB INTO ACCOUNT THE EXPECTED OPPOSITION

EXPRESSED BY THE UNION TO THE COST OF REDUCTION AND DOWNSIZING

ACTIVITIES BEING CONDUCTED THRODGHOUT THE YEAR. THE DIRECTORS

SUPPORT THE MANAGEMENT EFFORTS TO GAIN CASH OUT OF ALL SURPLUS AND

UNDERUTILIZED ASSETS SO THAT THE ASSETS OF THE COMPANY ARE SWEATED

FULLY.

EARLY SEPARATION SCHEME 2000 OR COMPASSIOATE SCHEME WAS

INTRODUCED TO REDUCE ITS EMPLOYEE BASE. UNDER THE SCHEME THE

COMPANY HELPED SMALL GROUPS OF WORKERS TO SET UP AN ENTERPRISE,

OFFERED THEM TECHNICAL KNOW-HOW, INITIAL WORK AND ENGINEERING

EQUIPMENTS.CERTAIN HR INITIATIVES WERE INTENSIFIED SUCH AS CAREER

AND SUCCESSION PLANNING, IDENTIFICATION AND DEVELOPMENT OF HIGH

POTENTIAL STAFF, REWARD AND RECOGNITION METHODOLOGIES AND

KNOWLEDGE CULTURE. EMPLOYEE SATISFACTION SURVEYS WERE LAUNCHED

TO IDENTIFY DEVELOPMENT NEEDS.

IN THE ANNUAL REPORT OF 2000-2001 THE BOARD OF DIRECTORS STSTED THAT

DESPITE THE DOWNSIZING UNDER THE VRS INTRODUCED DURING THE YEAR,

THE COMPANY FURTHER DOWN TOWARDS WHICH END THE MANAGEMENT AND

UNIONS ARE IN CONSTANT DIALOGUE THE NUMBER OF EMPLOYEES STANDS

REDUCED FROM 5807 TO 5136 AS ON 31 MARCH 2001.

TALKING OF OUTLOOK OPPORTUNITIES AND THREATS IN THEIR REPORT OF 2000-

2001 THE BOARD OF DIRECTORS STSTED, A”MAJOR PLANK IN THIS DRIVE

TOWARDS SERVICE EXCELLENCE AND MARGINS IS HIGHER AND BETTR

PRODUCTIVITY OF OPERATION. REGRETTABLY IN THIS PROCESS SELECT

CATEGORIES OF MANPOWER BECOME REDUNDANT. UNLESS THIS MANPOEWR

EXITS FROM OUR COST STRUTURE AND THE PROCESS IS A CONTINUOUS ONE,

THE COMPANY WILL NOT BE ABLE TO AFFORD THE IT AND TECHNICAL SKILLS

NEEDED TO WIRE SERVICES RIGHT ACROSS OUR BUSINESS HORIZONS. A FAIR

BUT QUICKLY IMPLEMENTABLE EXIT AND CLOSURE POLICY IS A MUST IF OLD

ENGINEERING COMPANIES LIKE OURS ARE TO MAKE HEADWAY IN THE NEW

UNFOLDING ECONOMY.
OUTCOME OF THE TURNAROUND EXERCISE

THERE WAS A FORMAL CLOSURE TO THE RESTRUCTURING DISPUTES. ON 01

OCTOBER 2003 THE VP (HR) DEPARTMENT OF VOLTAS ADDRESSED A LETTER TO

THE GENERAL SECRETARY. ALL INDIA VOLTAS EMPLOYEES FEDERATION

WHEREIN A SETTLEMENT WAS ARRIVED AT BETWEEN THE UNION AND

MANAGEMENT THE LETTER SAID,’’THE COMPANY HAS BEEN FINDING IT

EXTREMELY DIFFICUT TO BEAR THE COST OF MANPOWER. UNDER THE

CIRCUMSTANCES, THE COMPANY WAS CONSTRAINED TO RESORT TO LEGAL

MEASURES SUCH AS CLOSURE OF ITS NONVIABLE UNITS\ ACTIVITIES,

RETENHMENT OF SURPLUSMANPOWER ETC. IT WAS BUT NATURAL THAT,

THOUGH SUCH MEASURES WERE UNDERTAKEN IN OVERALL INTERST OF THE

COMPANY, IT HAS IMPACTED THE INDUSTRIAL RELATION IN OVERALL IN THE

COMPANY.WITH THIS BACKGROUND THE MANAGEMENT HAD EXPRESSED ITS

DESIRE TO THE FEDERATION TO SETTLE ALL THE PENDING ISSUSE BY MUTUAL

NEGOTIATIONS. IN RESPONSE TO THIS LETTER THE GENERAL SECRETARY OF

THE UNION WROTE TO THE MANAGEMENT ON 03 OCTOBER 2003 THOUGH IN

PRINCIPLE WE ARE OPPOSED TO ANY SCHEME WHICH ENVISAGES REDUCTION

OF THE EMPLOYEES IN VIEW OF THE PRESENT BUSINESS SCENARIO AND THE

DISCUSSION WE HAD WITH YOU WHICH HAS CULMINATED IN YOUR ABOVE

MENTIONED LETTER, WE HAVE DECIDED NOT TO OPPOSE YOUR PLAN TO

INTRODUCE VRS ALONG WITH EX-GRAYIA”. FOLLOWING THIS 38 CASESPENDING

IN COURTS ON VARIOUS WERE WITHDRAWN JOINTLY BY MANAGEMENT AND

THE UNION.
“PRODUCTIVE HIGH PERFORMING EMPLOYEES ARE THE COMPANY’S MOST

VALUABLE ASSETS’’,IN THE ANNUAL REPORT OF 2003-2004, THE COMPANY

REPORTED, “THE INDUSTRIAL RELATIONS SCENARIO WAS CORDIAL DURING THE

CURRENT YEAR FOLLOWING AN UNDERSTANDING REACHED AFTER A PERIOD

OF FIVE YEARS BETWEEN THE COMPANY AND THE EMPLOYEES FEDERATION

HAS AGREED TO COOPERATE WITH THE COMPANY AND THE EMPLOYEES

FEDERATION, REGARDING THE COMPANY’S NEED TO SAFEGUARD THE VIABLITY

OF ITS OPRATIONS.THE FEDERATION HAS AGREED TO COOPERATE WITH THE

COMPANY TOWORDS REDUCTION OF SURPLUS MANPOWER, CONSTANT

IMPROVEMENT IN PRODUCTIVITY, COST REDUCTION , PRODUCT QUALITY /

FLEXIBLITY OF WORK PERFORMANCE AND EMPLOYEE PERFORMANCE.

“THE COMPANY OFFERD ENHANCE VRS COMPENSATION IN VIEW OF THE LOWER

INTEREST RATES. THIS THIS VRS WAS ALSO EXTENDED TO THOSE EMPLOYEES

WHO WERE EARLIER AFFECTED BY CLOSURE, RETRENCHMENT AND DISMISSAL.

THE COMPANY HAS AGREED TO ABSORB YOUNG EMPLOYEES WHO WERE

AFFECTED BY SUCH CLOSURE\RETRENCHMENT BUT DID NOT WISH TO OPT FOR

VRS. MANY CASES PENDING IN COURTS WERE WITHDRAWN JOINTLY BY

FEDERATION\UNION AND MANAGEMENT AFTER THIS UNDERSTANDING. THE

LONG PENDING ISSUE OF BONUS WAS ALSO SETTLED AND THE SAME WAS ALSO

SETTLED AND THE SAME WAS PAID TO THE EMPLOYEES. THE TOTAL NUMBER OF

EMPLOYEES AS ON 31 MARCH 2004 WAS 3593 AS COMPARED TO 3935 PER AND

MARCH 2003”.
ACCORDING TO THE ADVOCATE FOR THE COMPANY AND MANAGEMENT

CONSULTANT, THIS COMPREHENSIVE SETTLEMENT WAS A EIN-WIN SOLUTION

AS ANY SETTLEMENT IS A PROCESS OF GIVE AND TAKE.

IN THE VOLTAS WORKER- A JOURNAL OF THE ALL INDIA VOLTAS EMPLOYEES

FEDERATION, ISSUED ON FEDERATION FOUNDATION DAY, OCTOBER 2007,THE

PERIOD OF FIGHTING THE MANAGEMENT ON ALL ITS MOVES TOWARDS

RESTRUCTURING AND DOWNSIZING AND THE RESULTANT SETTLEMENT IN

2003IS DESCRIBED AS THE WORST PERIOD IN THE FEDERATION’S HISTORY.AFTER

THERE HAD BEEN MASS EXODUS OF WORKERS UNDER VRS INCLUDING FRPNT

RANK OFFICE BEARERS OF THE UNION.

HAVING STRIPPED ITSALF DOWN TO ITS CORE AREAS OF STRENGHT, VOLTAS

RESTURCTTURED ITS BUSINESSES INTO FOUR CLUSTERS THAT HAD IMMEDIATE

IMPACT ON CHAIN OF COMMAND; STATUS AS FINANCIAL ENTITIES;

PERFORMANCE APPRAISAL, MONITORING AND REPORTING MECHANISM AND

ALLOCATION OF FUNDS AND RESOURRCES

ACCORDING TO THE VICE PRESIDENT, HUMAN RESOURCES,” SUCCESS OF THE

RESTUCTURING WAS DUE TO THE CONVICTION OF THE MANAGEMENT. IN THE

PAST, THE MANAGEMENT DID NOT HAVECONVICTION; WAS WEAK.TOP

MANAGEMENT SUPPORT WAS LACKING. CONVICTION MADE A LOT OF

DIFFERENCE. IT WAS ONLY AFTER 1997, THAT MANAGEMENT STARTED TALKING

ABOUT OPERATIONAL IMPERATIVES.”

BY FY 2004, VOLTAS HAD COMPLETED ITS RESTRUCTURING PHASE AND MOVED

INTO ITS NEW INCARNATION AS A TURNED AROUND COMPANY READY FOR

CONSOLIDATION AND GROWTH.

SOME OF ITS ACCOMPLISHMENTS WERE:

 FEATURED ON THE BIGGEST WEALTH LIST OF 2004

 RATIONALIZED WOEKFOCE.

 STRONGER MARKET PRESENCE

 ABSENCE OF NON PRODUCTIVE ASSETS.

 STRONG AND EFFICIENT SYSTEMS AND PROCESSES.

 STRATEGIC PIANNING FOR SUSTAINED GROWTH.

 GREATER AGILITY IN RESPONDING TO GROWTH OPPORTUNITIES

ACCORDING TO THE CHIEF OF CORPORATE COMMUNICATION, THE WHOLE

POINT OF THE RESTRUCTURING EXERCISE WAS NOT JUST TO PREVENT

AGAINST FUTURE BRUTAL LOSSES BUT IN FACT TO BECOME A COMPANY

CAPABLE OF SUSTAINED HIGH GROWTH. VOLTAS HAS TRANFORMED

ITSELF INTO ONE OF THE RE-EMERGENT AND RISING STARS OF THE NEW

BUSINESS MILLENNIUN.

THE SUCCESSFUL OUTCOME OF THE TURNAROUND EXERCISE CAN BEST BE SEEN

IN THE FOLLOWING BRIEF ROUND-UP OF PERFORMANCE STATISTICS.

IN FY 2005: THE COMPANY HAD COMPANY HAD 13.5% MARKET

SHARE IN DOMESTIC AC SOLUTIONS

 HAD 2855 EMPLOYEES

 32% GROWTH IN NET PROFIT TO RS.199902.29 CRORES YOY

  42% GROWTH IN NET PROFIT RS. 70.49 CRORES YOY

 NOW TRARGETING RS.10, 000 CRORE TURNOVER BY FY 2010-11

WITH CAGR 40%, 10% MARGIN.

IN A MESSAGE TO EMPLOYEES ON THE OCCASION OF DIAMAND JUBILEE IN

OCTOBER 2007, THE PRESIDENT OF THE FEDERATION STATED,” MUMBAI UNION

HAS ALWAYS FOUGHT AGAINST THE FORCES OF DISRUPTION IT HAS NOT

ALLOWED PARTY POLITICS TO ENTER THE UNION AND HAS BEEN FUNCTIONG

BASED ON WORKING CLASS OUTLOOK...THE ASSURANCES GIVEN BY THE

MANAGEMENT REGARDING JOB POTENTIAL AND JOB SECURITY IN THE

COMPANY HAVE NOT BEEN KEPT UP.THE RESULT IS A GREAT SHRINKAGE OF

NUMBER OF EMPLOYEES OF UNIONIZED CATEGORY IN MUMBAI AND

ELSEWHERE AND SUURT IN CONTRACTUAL LABOURENGAGEMENT

EVERYWHERE.. THE STRUGGLE FOR PRESERVATION OF JOB SECURITY AND

EMPLOYMENT POTENTIAL IN VOLTAS IS VERY DIFFICULT TO FIGHT IN AN

ISOLATED MANNER. IT REQUIRES MORE AND MORE IN THE TRADE UNION

MOVEMENT.”CRITICIZING THE ERSTWHILE LEADERSHIP’ OUTLOOK TO RELY ON

LEGAL REMEDIES RATHER THAN THE WORKER’S UNITED STRENGHT; THE

PRESIDENT SAID THAT THE MANAGEMENT HAD LEFT MANY ISSUES

UNRESOLVED. THE SECRETARY OF THE FEDERATION STATED “,IT IS A PITY THAT

THE MANAGEMENT COULD NOT EXPLOIT OUR STRENGHT. IT WAS ALWAYS THE

EGO OF THE MANAGEMENT THAT LED TO POOR RELATIONS.

“IN THE RECENT PAST, VOLTAS HAS BEEN MAKING HUGE PROFITS AND SHARING

IT ONLY WITH SHAREHOLDERS AND OFFICERS SHARE OFFERED TO UNIONIZED

EMPLOYEES AND UNORGANIZE CONTARACT LABOR IS NOT AT ALL

SATISFACTORY. HERE LIES THE RESPONSIBILITY OF THE LEA DERSHIP TO

SECURE EQUITABLE SHARE TO WORKERS WHILE EXTEENDING COOPERATION

TOMANAGEMENT TO ACHIEVE BETTER AND BETTERRESULTS BEARING IN MIND

THAT COOPERATION SHOULD NOT CROSS THE’ LAKSHAMAN REKHA’ AND

BECOME COLLABORATION’’THE PRESIDENT OF THE EMPLOYEE FEDERATION

STATED IN THE DIMOND JUBILEE MESSAGE.

“INCIDENTALLY IN THE SAME JOURNAL THE COMPLIMENTARY LETTER FROM VP

(HR) IS PUBLISHED WHEREIN HE STATES THAT THE MANAGEMENT LOOKS

FORWARD TO AN ERA OF COOPERATIVE ENDEAVOR AND COLLABORATIVE

FUNCTIONING THAT ALONE CAN ENABLE REALIZATION OF THE COMPANY’S

AMBITIOUS GOALS”

THE SECRETARY OF THE VOLTAS UNION MUMBAI STAZEDTED THAT AS OF NOW,

THE UNIONIZED CATEGORY OF WORKER WAS LOSING OUT THE WORK DONE

ORIGINALLY BY THEM TO MANAGEMENT TRAINEES, CASUAL LABOUR,

MANAGEMENT SUPERVISORS, QUALITY CONTROL AND CLERICAL CADRES. THE

SECRETARY FELT THAT THE AIM OF THE MANAGEMENT WAS TO GET THE

UNIONIZED CATEGORY ABOLISHED. FROM 8000 MUMBERS WE HAVE ALREADY

REDUCED TO ABOUT 650. “HE ADDED THAT THE MANAGEMENT PEOPLE STAY IN

THE AIR AND TAKE AWAY A LARGE PIECE OF THE LARGESSE. THERE ARE

TRAINING PROGRAMMES AND DEVELOPMENT OPPORTUNITIES FOR MANAGERS

AND LOTS OF MONEY ARE SPENT ON THEM TO RAISE THEIR QUALITY OF LIFE

BUT WHEN WE ASK FOR A DALY EGG IN THE CANTEEN THE COST FACTOR

COMES UP”
“THE SECRETARY ADDED, “WE HAD TO FIGHT EVEN FOR TWO CUPS OF TEA TO

BE GIVEN TO WORKERS DURING THEIR SHIFT. MANAGEMENT ON THEIR OWN

HAVE NEVER GIVEN US ANYTHING. WE HAVE STRUGGLED TO GRT EVERYTHING

AND SO WE HOLD ON TO IT STRONGLY”.

CRITICIZING THE CSR INITIATIVES OF THE COMPANY THE TRADE UNION

REPRESENTATIVES STATED THAT WHILE THE COMPANY DRAWS MEDIA

MILEAGE OUT OF ITS CSR ACTIVITIES, THERE WAS DIYA TALE ANDHERA

(DARKNESS UNDER THE LAMP). THE COMPANY WAS NOT LOOKING AFTER ITS

OWN EMPLOYEES AND.” THERE WAS” BHED BHAV” WHILE THEY CLAIMED

FAIRNESS AND TRANSPARENCY. THE THEIR ACTIONS ARE NOT IN CONFORMITY

TO WHAT THEY CLAIM TO BE AS A TATA COMPANY. WHAT HURT US MORE ARE

THEIR CLAIMS WHICH ARE NOT BASED ON REALITY”.

THE SECRETARY OF THE FEDERATION ADMITTED THAT UNIONS ALL OVER THE

INDUSTRY WERE NOW ON LOW EBB AND THERE WERE JUST A HANDFUL OF

FEDERATIONS LEFT IN THE COUNTRY.

ACCORDING TO AN HR EXECUTIVE, SUCCESSIVE RIGHTSIZING DID NOT

INCREASE THA WORKLOAD OF THOSE WHO STAYED BACK BUT AMONG THOSE

WHO STAYED BACK THERE WAS FEAR AND UNCERTAINTY ABOUT BEING NEXT .

THE ERSTWHILE MD REMINISCED, “I LIKED SPEED. I WAS IMPATIENT. I WOULD

BE ADVISED THAT I WAS GOING TOO FAST. I WAS ASKED TO GIVE UNION TIME

TO DIGEST. THEY ARE USED TO WORKING AND THINKING IN A LINEAR PROCESS

WHEREAS I WAS USED TO MULTI-TASKING. I NEVER LOST SIGHT OF THE

AGENDA. THA UNION WOULD CALL ME “KASA I(BUTCHER)” IN PUBLIC FORUMS.

THEY SAID THAT I HAVE NO FEELINGS. BUT THE VRS GIVEN WAS GENEROUS

AND HUMANITARIAN”.

IN THE NEXT CHAPTER, THE STUDY IS CONCLUDED AND ITS IMPLICATIONS AND

DIRECTIONS FOR FUTURE RESEARCH IDENTIFIED.

THE COMMUNICATION PLAN

MANAGEMENT FACED A CHALLENGE IN CONVINCING PEOPLE ABOUT THE NEED

TO CHANGE. AGITATION ACTIVITIES LIKE NON-COOPERATION, STOPPAGE OF

OVERTIME WORK, SELECTIVE WORK TO RULE AND PERIODIC STRIKES

CONSTRAINED THE WORKFIOW AND LED TO VICE PRESIDENT, HUMAN

RESOURCES ADDED,” CONVINCING OWN MANAGEMENT WAS ALSO A

CHALLENGE. THEY WOULD TAKE THE EXCUSE OF VOLTAS CULTURE.

TURUAROUND OF MINDSET WAS ALSO TO BE ACHIEVED”.

THE ERSTWHILE MD RECALLED, “MY TALKS USED TO FOCUS ON THE HERE AND-

THE CURRENT SITUATION AND THE NOT TOO DISTANT FUTURE FOR THE

COMMUNICATION. THE MANAGERS WERE REGAINING THEIR VITALITY AND A

SENSE OF PRIDE IN VOLTAS WAS REDEVELOPED. THEY WERE CONNINCED THAT

WE WERE GOING TO FIGHT A FAIRE JUST WAR AND WE RESTORED PRIDE IN THE

MANAGERS AND STRENGTHENED THEM TO FACE THE UNION. WHEN MCKINSEY

DID A STUDY FOR THE TATA GROUP.THEY HAD LISTED VOLTAS IN THE NON-

CORE LIST OF COMPANIES.I USED SHOW THIS TO THE UNION TELLING THEM

THAT WE MIGHT GET SOLD OFF AND WHO KNOW WHAT THE NEW OWNERS WILL
BE LIKE. THEY WOULD NOT BELIEVE IT BUT I STILL USED IT AS AN ARGUMENT

TO PLAY ON THEIR FEARS”.

SPEAKING ABOUT HOW COMMUNICATION WHICH EMPLOYEES WAS DONE THE

VICE PRESIDENT HUMAN RESOURCES EXPLAINED, WE FELT THAT THE WORD OF

MOUTH AND INFORMAL MEDIUMS OF COMMUNICATION ARE MORE IMPORTANT.

80% OF OUR COMMUNICATION WAS VERBAL. AT EACH LOCATION WE

APPOINTED PERSONNEL FOR DRIVING THE CHANGE AND THEY WERE BRIEFED.

WORKERS THEIR OWN PEERS AND LEADERS MORE THAN THEY DO STRUCTURED

FORMAL COMMUNICATION WHICH IS ALWAYS DOUBTED SO OUR STRATEGY

WAS TO USE OPINION LEADERS AND ALLOW THEM TO SPREAD THE MESSAGE.

COMMUNICATION THROUGH OPINION LEADERS WAS THE FASTEST.

STRUCTURED MEETINGS NEVER DRIVE HOME THE MESSAGE AS FAST

COMMUNICATION SHOULD ALWAYS BE IN RECEIVERS LANGUAGE SINCE

COMMUNICATION IS NOT COMPLETE UNLESS RECEIVED AND UNDERSTOOD.

INFORMAL MEANS ARE THUS BETTER OUR COMMUNICATION THEME WAS “WE

ARE NOT COME FORWORD TO TAKE EARLY RETIREMENT. THIS IS WHAT

HAPPENED WITH OUR FIRST VRS”.

A DELIBERATE COMMUNICATION EXERCISE WAS UNDERTAKEN IN WHICH

MANAGERS DISCUSSED WITH EMPLOYEES AND UNION LEADER HOW THE

LIBERALIZATION AND COMPETITION WERE FORCING THEIR HANDS TO REDUCE

EMPLOYEE NUMBERS HOW EMPLOYEE COST WAS MAKING THEIR PRODUCT

EXPENSIVE, HOW HIGHER PRODUCT PRIICES WOULD PUSH THE CUSTOMERS

AWAY AND HOW THIS WOULD ADD THAT BEING PART OF THE TATA GROUP, THE

COMPANY WAS BEING CONSIDERATE AND GENEROUS. IN CONTRAST MANY

OTHER COMPANIES HAD CLOSED DOWN AND LEFT WORKERS IN THE LURCH.

THE MESSAGE WAS DEAR THEY SHOULD TAKE ADVANTAGE OF THE VRS AND

LEAVE THERE WAS NO CHOIC FOR REHABILITATION EXTENSIVE FINANCIAL

COUNSDLING WAS PROVIDED AND IN SOME CASES THE EMPLOYEES WERE

OFFERED DEALERSHIP OF VOLTAS PRODUCTS.

CHAPTER-3

LITERATURE REVIEW

SALES PROMOTION HAS BECOME AN INTEGRAL PART OF THE PROMOTION

SCHEMES OF BOTH MANUFACTURERS AND RETAILERS OF DURABLE AS WELL AS
NON-DURABLE CONSUMER GOODS. IT CONSUMES A VERY SIGNIFICANT PORTION
OF THE PROMOTIONAL EXPENSES OF MARKETERS. IN SOME OF THE DEVELOPED
COUNTRIES ALLOCATION OF PROMOTION BUDGET TO SALES PROMOTION HAS
FAR EXCEEDED SPENDING ON ADVERTISEMENT. BRAND MANAGERS ARE NOW
RELYING HEAVILY ON SALES PROMOTION BECAUSE ITS IMPACT ON SALES IS
MORE DIRECT, IMMEDIATE, AND QUANTIFIABLE AS COMPARED TO
ADVERTISEMENT. MARKETERS USE BOTH PRICE AND NON-PRICE PROMOTIONS
EITHER INDEPENDENTLY OR IN ASSOCIATION WITH EACH OTHER. PRICE
PROMOTIONS ALLOW BUYERS TO MAKE SOME SAVINGS OF MONEY WHERE AS
NON-PRICE PROMOTIONS LIKE PREMIUM ADD VALUE TO THE OFFER. POINT-OF-
PURCHASE PROMOTIONS LIKE FEATURE ADVERTISEMENTS AND DISPLAYS LEAD
TO IMPULSE BUYING.THE DYNAMIC NATURE OF SALES PROMOTION HAS
INSPIRED MANY RESEARCHERS TO TURN THEIR ATTENTION TO STUDY THE
VARIOUS ISSUES RELATED TO THIS ELEMENT OF PROMOTION MIX. MANY
STUDIES HAVE BEEN CONDUCTED ON THE PLANNING, IMPLEMENTATION AND
EVALUATION ASPECT OF SALES PROMOTION WORLDWIDE.THESE STUDIES ARE
REVIEWED AND PRESENTED BRIEFLY UNDER SUITABLE HEADS LIKE STUDIES ON
CONSUMER PROMOTION, STUDIES ON SALES FORCE PROMOTION, STUDIES ON
TRADE PROMOTION AND OTHER STUDIES ON PROMOTION.
 MAJORITY OF THE STUDIES ON SALES PROMOTION ENCOMPASS

CONSUMER SALES PROMOTION STRATEGIES OF MARKETERS. CONSUMER

SALES PROMOTION TECHNIQUES ARE ALSO CALLED 'PULL STRATEGIES' AS

THEY ATTRACT OR PULL CUSTOMERS TOWARDS THE PROMOTED BRAND

OR PROMOTED STORE AS THE CASE MAY BE. ACCORDING TO ONE

STUDY, CONSUMER SALES PROMOTIONS ARE THE MOST RESEARCHED

TOPIC AHEAD OF TRADE PROMOTION AND SALE FORCE PROMOTION.

IMPORTANT ISSUES EXAMINED IN THESE.

STUDIES INCLUDE THE CONSUMER'S PERCEPTION OF MARKETERS SALES

PROMOTION ACTIVITIES, EFFECT OF PROMOTION ON CONSUMPTION, TRIAL
PURCHASE, CATEGORY EXPANSION, BRAND SWITCHING, BRAND EVALUATIONS,
STOCK PILING AND CONSUMPTION RELATIONSHIP, LONG TERM IMPACT OF
PROMOTIONS, INCENTIVE-OUTLAY RATIO, ETC. CONSUMER SALES PROMOTION
LITERATURES ARE M E R CLASSIFIED IN TO THREE CATEGORIES, VIZ.L.STUDIES
ON IMPACT OF SALES PROMOTION; 2.STUDIES ON PERCEPTION ABOUT SALES
PROMOTION; AND SALES PROMOTION EVALUATION, RELATIONSHIP AND OTHER
ASPECTS.

STUDIES ON IMPACT OF PROMOTION

STUDIES RELATING TO THE IMPACT OF CONSUMER SALES PROMOTION

ON
CONSUMER BEHAVIOR, SALES, PROFIT, MARKET SHARE, ETC. ARE
INCLUDED IN THIS SECTION. THESE STUDIES PROVIDE GUIDELINES TO
MANAGERS ON VARIOUS ISSUES SUCH AS THE APPROPRIATE TOOLS THAT
MAY BE USED FOR ACHIEVING A SPECIFIC MARKETING OBJECTIVE,
IMPROVE THEIR SALES PROMOTION EFFECTIVENESS AND SO ON.

VECCHIO, DEL, DEVON ET.AL. (2006) ' REPORT THE RESULTS OF THE
STUDY, WHICH EXAMINED THE EFFECT OF SALES PROMOTION ON
BRAND PREFERENCE THROUGH META ANALYSIS. RESULTS OF 51
STUDIES HAD BEEN INTEGRATED. AS PER THE STUDY SALES
PROMOTIONS DO NOT AFFECT POST PROMOTION BRAND
PREFERENCES IN GENERAL.
BUT DEPENDING UPON CHARACTERISTICS OF SALES PROMOTION AND
THE PROMOTED PRODUCT, PROMOTION CAN EITHER INCREASE OR
DECREASE PREFERENCE FOR A BRAND. NDUBISI, OLY, NELSON AND
MOI, TUNG, CHIEW (2005) IN THEIR STUDY EVALUATED THE IMPACT OF
SALES PROMOTIONAL TOOLS, NAMELY COUPON, PRICE DISCOUNT,
FREE SAMPLE, BONUS PACK, AND IN-STORE DISPLAY, ON PRODUCT
TRIAL AND
REPURCHASE BEHAVIOUR OF CONSUMERS. THE MODERATION ROLE
OF FEAR OF LOSING FACE ON THE RELATIONSHIP BETWEEN THE
SALES PROMOTIONAL TOOLS AND PRODUCT TRIAL WAS ALSO
EXAMINED. THE RESULTS OF STUDY SHOW THAT PRICE DISCOUNTS,
FIEE SAMPLES, BONUS PACKS, AND IN-STORE DISPLAY ARE
ASSOCIATED WITH PRODUCT TRIAL.
COUPON DOES NOT HAVE ANY SIGNIFICANT EFFECT ON PRODUCT
TRIAL. TRIAL DETERMINES REPURCHASE BEHAVIOUR AND ALSO
MEDIATES IN THE RELATIONSHIP BETWEEN SALESPROMOTIONS AND
REPURCHASE. FEAR OF LOSING FACE SIGNIFICANTLY MODERATES
THE RELATIONSHIP BETWEEN IN-STORE DISPLAY AND PRODUCT
TRIAL.

KUMAR, V. AND SWAMINATHAN, SRINIVASAN (2005) ' STUDIED THE

IMPACT OF COUPONS ON BRAND SALE AND HOW THAT IMPACT
DECAYS OVER THE LIFE OF THE COUPON. THE AUTHORS USE AN
ECONOMETRIC MODEL TO DEMONSTRATE THE COUPON EFFECT IN
TERMS OF EQUIVALENT PRICE REDUCTION, ACCOUNT FOR COUPON
EFFECT OVER TIME, ALLOW INFERENCE OF COUPON EFFECTS WHEN
RETAILERS DECIDE TO DOUBLE OR TRIPLE THE COUPON VALUE AND
PROVIDE BOTH SELF-COUPON AND CROSS-COUPON ELASTICITIES AT
DIFFERENT LEVELS OF AGGREGATION. RESULTS INDICATE THAT THE
EFFECT OF DOUBLING THE
FACE VALUE OF COUPON RESULT IN MORE THAN A PROPORTIONATE
INCREASE IN ELASTICITY AND BOTH SELF AND CROSS- COUPON
ELASTICITIES ARE MUCH SMALLER IN MAGNITUDE THAN THE
AVERAGE SELF-CROSS PRICE ELASTICITY. LAROCHE, MICHEL ET.AL.
(2005) ' STUDIED THE EFFECT OF COUPONS ON CONSUMER'S BRAND
CATEGORISATION AND CHOICE PROCESS USING FAST-FOOD
RESTAURANTS IN CHINA. RESULTS SUGGEST THAT THERE ARE BOTH
DIRECT AND CROSSADVERTISING
EFFECTS I.E., THE PRESENCE OF A COUPON FOR A FOCAL BRAND HAS
AN
IMPACT ON CONSUMER'S ATTITUDES AND INTENTIONS TOWARDS
THAT BRAND.

LEWIS, MICHEL (2004) DEVELOPED AN APPROACH FOR SIMULTANEOUS

MEASUREMENT OF THE INFLUENCE OF A DYNAMIC LOYALT
PROGRAMME AND MORE TRADITIONAL SHORT- TERM PROMOTIONS.
THEY ARGUE THAT THE LOYALTY PROGRAMMES UNDER
EXAMINATION SUCCESSFBLLY ALTER BEHAVIOR AND INCREASE
RETENTION RATES. EMAIL BASED COUPONS, SHIPPING FEE AND
GENERAL PRICE LEVELS AL SIGNIFICANTLY
AFFECT CUSTOMERS PURCHASE DECISIONS. ANDERSON, T. ERIC AND
SIMESTER LDUNCAN (2004) INVESTIGATED HOW THE DEPTH OF A
CURRENT PRICE PROMOTION AFFECT FUTURE PURCHASING OF FIRST
TIME AND ESTABLISHED CUSTOMERS BASED ON THREE LARGE SCALE
FIELD EXPERIMENTS ON DURABLE GOODS SOLD THROUGH A DIRECT
MALE CATALOGUE. THE FINDINGS REVEAL DIFFERENT EFFECT FOR
FIRST-TIME AND ESTABLISHED CUSTOMERS. DEEPER PRICE
DISCOUNTS IN THE
CURRENT PERIOD INCREASED FUTURE PURCHASES BY THE FIRST TIME
CUSTOMERS (APOSITIVE LONG-RUN EFFECT) BUT REDUCED FUTURE
PURCHASES BY ESTABLISHED CUSTOMERS (A NEGATIVE LONG- RUN
EFFECT) DAWES, JOHN (2004) ' REPORTED THE RESULT OF HIS STUDY
ON THE EFFECT OF A MASSIVELY SUCCESSFBL PRICE PROMOTION IN A
CONSUMER GOODS CATEGORY. SPECIFICALLY, HE SOUGHT TO
DETERMINE IF THIS LARGE PRICE PROMOTION HAD ANY LONG-TERM
IMPACT ON BRAND VALUE; SHORT-TERM IMPACT ON TOTAL
CATEGORY VOLUME FOR THE RETAILER; SHORT-TERM EFFECT ON
COMPETING RETAILERS; AND LONG-TERM EFFECT ON CATEGORY
SALES FOR THE RETAILER WHO RUNS THE PROMOTION. RESULTS OF
THE STUDY
SHOWED THAT A VERY SUCCESSFBL PROMOTION DID NOT HAVE ANY
LONGER-TERM EFFECT ON THE BRAND (POSITIVE OR NEGATIVE), BUT
IT DID EXPAND THE TOTAL CATEGORY FOR THE RETAILER, THOUGH
TEMPORARILY. SALES DROPPED SLIGHTLY FOR ONE COMPETING
RETAILER AT THE TIME OF PROMOTION OUT OF THE THREE UNITS
STUDIED. IT WAS OBSERVED THAT THE PROMOTION WAS FOLLOWED
BY A DECLINE IN THE TOTAL CATEGORY VOLUME FOR THE RETAILER,
SUGGESTING SOME DEGREE OF PURCHASE ACCELERATION OR
STOCKPILING BY CONSUMERS, LONGER-TERM NEGATIVE EFFECT ON
CATEGORY CANCELLED OUT APPROXIMATELY TWO THIRD OF THE
GAIN OF THE PRICE PROMOTION TO THE RETAILER.

BAOHONG ET.AL. (2003) ' REVIEWED VARIOUS STUDIES RELATING TO

THE IMPACT OF PROMOTION ON BRAND SWITCHING AND FOUND THAT
THESE STUDIES USED CHOICE MODELS, ESPECIALLY LOGIT.
ACCORDING TO THESE STUDIES PROMOTION HAS A STRONG EFFECT
ON BRAND SWITCHING. THE AUTHORS SHOW THAT LOGIT CHOICE
MODEL CAN
SUBSTANTIALLY OVER ESTIMATE BRAND SWITCHING BECAUSE THEY
DO NOT TAKE IN TO ACCOUNT THE RATIONAL ADJUSTMENTS THAT
CUSTOMERS MAKE TO TAKE ADVANTAGE OF PROMOTION. LOGIT
MODELS DO NOT TAKE IN TO ACCOUNT STOCK PILING AND
DECELERATION STRATEGIES. THEY USE A DYNAMIC RATIONAL
MODEL AND COMPARE IT WITH A LOGIT MODEL. THE RESULT WAS
THAT LOGIT MODELS OVER ESTIMATE BRAND SWITCHING, THAT
NESTED LOGIT HELPS ADDRESS THE PROBLEM BUT NOT COMPLETELY
AND THAT DYNAMIC RATIONAL MODEL PROVIDE THE MOST
ACCURATE ESTIMATE OF SWITCHING.

SWAIT, JOFIE AND ERDEN, TULIN (2002) IN THEIR STUDY FOCUSED ON

A
PARTICULAR ASPECT OF MARKETING MIX CONSISTENCY OVERTIME
FOR FREQUENTLYPURCHASED PACKAGED CONSUMER GOODS, THE
IMPACT OF TEMPORAL CONSISTENCY OF STORE PROMOTIONS AS
WELL AS THE AVAILABILITY OF THE PRODUCT ON THE SHELF; ON
CONSUMER PRODUCT EVALUATIONS (UTILITIES) AND CHOICES. THE
EMPIRICAL RESULTS,
BASED ON FABRIC SOFTENER PANEL DATA, INDICATE THAT HTURE
INSERT AND AVAILABILITY CONSISTENCY INCREASE SYSTEMATIC
UTILITY IN A STATISTICALLY SIGNIFICANT WAY OVER AND ABOVE
THE POSITIVE EFFECTS THAT DISPLAYS AND FEATURE HAVE ON
CHOICE.

SOMAN, DILIP AND GOURVILLE, T. JOHN (2001) 'O INVESTIGATED HOW

AND WHY PRICE BUNDLING AFFECT THE CONSUMPTION OF A SERVICE
BASED PRODUCT SUCH AS A SPORTING EVENT OR A THEATRE
PERFORMANCE. THE RESULTS OF THE STUDY SHOWED THAT
PRICE BUNDLING LEADS TO A DECOUPLING OF THE SUNK COST AND
PENDING BENEFITS OF A TRANSACTION THERE BY REDUCING THE
LIKELIHOOD OF DOWN STREAM CONSUMPTION. SMITH, F. MICHAEL
AND SINHA, INDRAJIT (2000) *L EXAMINED THE RELATIONSHIP
BETWEEN DIFFERENT TYPES OF PROMOTIONS (STRAIGHT PRICE
PROMOTION,
EXTRA-PRODUCT OR VOLUME PROMOTION AND MIXED PROMOTION)
ACROSS FOUR SUPERMARKET PRODUCT CATEGORIES CONTROLLING
SEPARATELY FOR THE EFFECT OF TWO CATEGORY-BASED
MODERATING FACTORS VIZ. PRODUCT STOCK-UP CHARACTERISTICS
AND PRICE LEVEL. RESULTS SHOWED THAT A MAJORITY OF
CONSUMERS PREFERRED MIXED
PROMOTIONS TYPE OF PROMOTIONS DOES INFLUENCE STOP
PREFERENCE (WITH PRICE AND VOLUME PROMOTIONS HAVING THE
GREATEST INFLUENCE). CONSUMERS GENERALLY PREFERRED PRICE
PROMOTION FOR HIGHER PRICED PRODUCT CATEGORIES AND THEY
PREFERRED VOLUME PROMOTIONS FOR LOWER PRICED CATEGORIES.

FEAME, ANDREW ET.AL. (1999) L2 STUDIED THE IMPACT OF

PROMOTIONS ON THE DEMAND FOR SPIRITS CATEGORY IN THE UK
MARKET. THE RESULTS OF AN ECONOMETRIC ANALYSIS OF WEEKLY
CROSS-SECTIONAL STORE DATA AND CLUSTER ANALYSIS OF
CONSUMER PANEL DATA SUGGESTED THAT PROMOTIONS HAVE HAD
A SLIGHT POSITIVE IMPACT ON THE VOLUME OF SALES,
PARTICULARLY OVER THE SEASONALLY IMPORTANT CHRISTMAS
PERIOD. SOME PROMOTIONS, ESPECIALLY MULTI-BUYS, REWARD
LARGELY LOYAL BUYERS, DOING LITTLE FOR EITHER VOLUME OR
MONETARY GROWTH OF THE SPIRIT CATEGORY. OTHER PROMOTIONS,
SUCH AS PRICE AND GIFT OFFERS, APPEAL MORE TO CONSUMERS WHO
DONOT PURCHASE SPIRITS SO FIEQUENTLY AND ALSO ATTRACT
PEOPLE WHO ARE LESS BRAND
AND STORE LOYAL.

AILAWADI, L. KUSUM AND NELSIN, A SCOTT (1998) L3 EMPIRICALLY

DEMONSTRATED THE EXISTENCE OF FLEXIBLE CONSUMPTION RATE
IN PACKAGED GOODS PRODUCTS, HOW THIS PHENOMENON COULD BE
MODELED AND ITS IMPORTANCE IN ASSESSING THE EFFECTIVENESS
OF SALES PROMOTION. RESULTS OF THEIR STUDY SHOW THAT SALES
PROMOTION INCREASES CONSUMPTION BECAUSE OF HIGHER USAGE
RATE AND STOCKPILING.
MELA, F. CARL. ET.AL. (1997) L4 EXAMINED THE LONG-TERM EFFECT
OF
PROMOTION AND ADVERTISING ON CONSUMER'S BRAND CHOICE
BEHAVIOR. THEYADDRESSED TWO QUESTIONS: 1. DO CONSUMERS
RESPOND TO MARKETING MIX VARIABLES SUCH AS PRICE CHANGES
OVER A LONG PERIOD OF TIME IF YES, ARE THESE CHANGES
ASSOCIATED WITH CHANGE IN MANUFACTURER'S ADVERTISING AND
RETAILER'S
PROMOTIONAL POLICIES? THEIR RESULTS ARE CONSISTENT WITH THE
HYPOTHESIS THAT CONSUMERS BECOME MORE PRICE AND
PROMOTION SENSITIVE OVER TIME BECAUSE OF REDUCED
ADVERTISING AND INCREASED PROMOTIONS.
GOULD, W. BRIM (1997) IN HIS STUDY, FOCUSED ON THE DYNAMICS OF
THE CONSUMER PURCHASE PROCESS AND EXAMINED THE EFFECT OF
COUPON-BASED PRICE DEALS ON INTER PURCHASE TIMES. HE USED
ECONOMETRIC MODELS OF DURATION TO A FORMALLY PURCHASED
FOOD COMMODITY, CHEESE. RESULTS SUGGESTED THAT USE OF
COUPON RESULTS IN REDUCED INTER-PURCHASE TIME FOR ALL
VARIETIES OF CHEESE PRODUCTS.

SETHURAMAN, RAJ (1996) L6 DEVELOPED A SEPARATE EFFECT MODEL

THAT SEPARATES THE TOTAL DISCOUNT EFFECT OF COMPETING HIGH-
PRICED BRAND ON THE SALE OF THE FOCAL LOW-PRICED BRANDS IN
TO DISCOUNT EFFECT. FINDINGS FIOM EMPIRICAL ANALYSIS IS THAT
THE LEADING NATIONAL BRAND CAN DRAW SALES FIOM COMPETING
BRANDS WITHOUT REDUCING ITS PRICE BELOW THE PRICE OF OTHER
BRANDS.

STUDIES ON CONSUMER PERCEPTION

HOW CONSUMERS PERCEIVE THE VARIOUS ASPECT OF SALES

PROMOTION IS VERY IMPORTANT FOR BRAND MANAGERS TO PLAN,
IMPLEMENT AND PROPERLY EVALUATE THEIR PROMOTION SCHEMES.
A PRICE DISCOUNT OR A GIFT OFFER MAY AFFECT THE BRAND EQUITY
AND LOYALTY ADVERSELY. SEVERAL STUDIES WERE CONDUCTED ON
THE PERCEPTION OF CONSUMERS ABOUT PRICE, QUALITY, VALUE,
ETC. OF A PROMOTED BRAND. A SUMMARY OF AVAILABLE
LITERATURES ARE PRESENTED BELOW.

KUMAR, KM. KRISHNA (2006) 22 STUDIED CONSUMER'S PERCEPTION

ABOUT PROMOTIONAL STRATEGIES ADOPTED BY MARKETERS OF
FAST MOVING CONSUMER GOODS IN KERALA. THE LEVEL OF
AWARENESS ABOUT VARIOUS SALES PROMOTION STRATEGIES, THEIR
ATTRACTIVENESS TO CONSUMERS AND THEIR EFFECTIVENESS IN
CREATING BRAND AWARENESS, TRIAL PURCHASE, REPEAT PURCHASE
AND BRAND LOYALTY WERE SOME OF THE ISSUES ADDRESSED. THE
DATA WERE COLLECTED FI-OM 300 CONSUMERS FROM DIFFERENT.
PARTS OF THE STATE. VARIOUS MATHEMATICAL AND STATISTICAL
TOOLS WERE USED FOR ANLYSING THE DATA INCLUDING CHI-SQUARE
TEST, T-TEST, ANOVA AND DUNCAN TEST. ACCORDING TO THI
FINDINGS OF THE STUDY CONSUMERS BELONGING TO DIFFERENT
CATEGORIES ARE VERY MUCH AWARE OF THE VARIOUS SALES
PROMOTIONAL STRATEGIES
ADOPTED BY MARKETERS. FURTHER, OF THE DIFFERENT TOOLS USED
FOR SALES PROMOTION, PRICE-OFFS AND GIFTS AND COMPLEMENTS
ARE MOST ATTRACTIVE TO CONSUMERS. MORE OVER, FOR CREATING
BRAND AWARENESS, TRIAL PURCHASE, REPEAT PURCHASE AND
BRAND
LOYALTY, GIFTS AND COMPLEMENTS, FIEE SAMPLES, PRICE-OFFS AND
PREMIUM OFFER RESPECTIVELY ARE THE BEST TOOLS SUGGESTED.

ALVAREZ, BEGOFIA, RODOLFO, VTTZQUEZ, CASIELLES (2005) 23

EXAMINED THE INFLUENCE THAT SALES PROMOTION HAS ON BRAND
CHOICE BEHAVIOUR. A REGIONAL CONSUMER PANEL WAS USED FOR
COLLECTING NECESSARY INFORMATION FOR THE STUDY. THE
AUTHORS REPORT THAT PROMOTION IS A TOOL THAT CAN HELP
MANUFACTURERS ANDOR RETAILERS IN THE ACHIEVEMENT OF THEIR
OBJECTIVES (TRY THE BRAND, HELP TO DECIDE WHAT BRAND TO
BUY, ETC.). IMMEDIATE PRICE REDUCTION IS THE TECHNIQUE THAT
EXERTS GREATEST INFLUENCE ON THE BRAND CHOICE PROCESS. IT IS
POSSIBLE THAT THE
CONSUMER PERCEIVES A PROMOTION, FOR EXAMPLE, COUPONS OR
REBATES, BUT DOES NOT MODIFL HIS OR HER BEHAVIOUR. IN THIS
CASE, MANUFACTURERS ANDOR RETAILERS WILL BE INVESTING
THEIR RESOURCES IN PROMOTIONAL ACTIONS THAT DO NOT HAVE
ANY
EFFECT ON THE CONSUMER. MORE OVER PROMOTIONS BASED ON
PRICE HAVE THE GREATEST EFFECTIVENESS.

BAILEY, ANTHONY, AINSWORTH (2005) STUDIED THE IMPACT OF

GENDER AND COMPANY REPUTATION ON CONSUMER ATTITUDES
TOWARDS, AND PERCEPTIONS OF COMPANIES INVOLVED IN NON-
FULFILLMENT OF PROMOTIONS. THE RESULTS OF AN EXPERIMENTAL
STUDY INDICATED THAT COMPANIES INFLUENCE HOW CONSUMERS
PERCEIVE BRANDS AND COMPANIES INVOLVED IN NON-FULFILLMENT
OF PROMOTIONAL DEALS. COMPANIES WITH POSITIVE REPUTATIONS
DO NOT SUFFER AS ADVERSELY AS THOSE WITH NEGATIVE
REPUTATIONS. GENDER HAS AN IMPACT ON PERCEPTIONS OF THE
CREDIBILITY OF COMPANIES INVOLVED IN NON-FULFILLMENT, BUT
DOES NOT AFFECTBRANDVAGUE SCARCITY RESTRICTION AND USING
A TENSILE CLAIMS FORMAT IMPROVE TH CONSUMER'S PERCEIVED
INFORMATIONAL VALUE OF THE OFFER, ONLY IF EXAGGERATED
PRICE DISCOUNTS ARE INVOLVED.
SALES PROMOTION NOW A DAY IS A MUCH DEBATED AND RESEARCHED
TOPIC AT THE MANAGERIAL AS WELL AS ACADEMIC LEVEL. THE REVIEW OF
AVAILABLE LITERATURE SHOWS THAT VARIOUS ASPECTS OF SALES
PROMOTION HAVE BEEN STUDIED FROM DIFFERENT DIMENSIONS. THESE
STUDIES ARE DONE FIOM THE MANUFACTURER, RETAILERAND CONSUMER
PERSPECTIVES, ADDRESSING THE PLANNING, IMPLEMENTATION AND
CONTROL FUNCTIONS RELATED TO PROMOTION MANAGEMENT. THOUGH
ALL OF THE IMPORTANT TOOLS OF SALES PROMOTION HAVE BEEN SUBJECT
TO RESEARCH, COUPONINGCAN BE SINGLED OUT AS THE MOST FAVOURITE
TOOL OF RESEARCHERS. ANOTHER IMPORTANT POINT EMERGED FKOM THE
REVIEW IS THAT MAJORITY OF THE STUDIES ARE CONDUCTED IN
DEVELOPED NATIONS LIKE USA, FRANCE, CANADA, UK, GERMANY, ETC. A
VERY FEW STUDIES WERE ALSO DONE IN INDIA. CONSIDERING THE SIZE AND
POTENTIALS OF INDIAN MARKETS, THE STUDIES CONDUCTED HERE ARE
INSUFFICIENT AND INCONCLUSIVE. A STUDY ON THE LEVEL OF
ATTRACTIVENESS AND USAGE OF VARIOUS SALES PROMOTION TOOLS AND
THEIR EFFECT ON CONSUMER'S BUYING AND CONSUMPTION DECISIONS IN
THE CONTEXT OF INDIA IN GENERAL AND KERALA IN PARTICULAR SHALL
PROVIDE VALUABLE INFORMATION TO THE MANAGERS OF COMPANIES,
ESPECIALLY FMCG COMPANIES, WHERE SALES PROMOTION IS VERY
COMMON..

CHAPTER -4

METHODOLOGY

THE EXPLORATORY RESEARCH IS DESIGNED TO ALLOW AN

INVESITIGATOR TO BASSICALLT LOOK AROUND WITH RESPECT TO
SOME PHENOMENON, WITH THE AIM TO DEVELOP SUGGESTIVE IDEA.
THIS STUDY IS EXPLORATORY IN NATURE AND INCLUDES BOTH
DUANTITATIVE ANALYSIS

AS A PURPOSE OF THIS STUDY, DATA HAVE BEEN COLLECTED ON ALL INDIA

BASES THE SECONDARY DATA & INFORMATION HAVE BEEN ANALYZED FOR
PREPARING THIS PAPER EXTENSIVELY. THE SECONDARY DATA
&INFORMATION HAVE BEEN COLLECTED FROM DIFFERENT SCHOLARS AND
RESEARCHERS, PUBLISHED E-BOOKS ARTICLES PUBLISHED DIFFERENT
JOURNALS, PERIODICALS, CONFERENCE PAPERS, WORKING PAPER,
COMPANY WEBSITES FOR ANNUAL REPORTS & CSR ACTIVITY REPORTS AND
THEIR INTERNAL NEWSLETTERS.

THE COMPANY RELATED DATA AND INFORMATION ARE USED WHICH

IS AVAILABLE PUBLICALLY ON THE WEBSITES OF THE COMPANIES.
THIS IS THE BEST\STANDARD PRACTICE FOR A RESEARCH WHICH IS A
CRITICAL REVIEW TYPE.

OBJECTIVE OF STUDY

EVERY SALES PROMOTION MUST HAVE A CLEAR-CUT OBJECTIVE TO BE

EFFECTIVE. SPECIFICALLY, YOU NEED TO DETERMINE THE CHANGE YOU
WISH TO TAKE PLACE AS THE RESULT OF THE PROMOTION. IDEALLY, THE
OBJECTIVE SHOULD BE MEASURABLE SO YOU CAN EASILY EVALUATE THE
PROMOTION'S EFFECTIVENESS. FOR EXAMPLE, YOU MIGHT WANT TO GAIN A
SPECIFIC NUMBER OF REPEAT CUSTOMERS OR INCREASE THE NUMBER OF
PEOPLE WHO COME THROUGH THE DOOR OF YOUR BUSINESS FOR A
SPECIFIED PERIOD OF TIME.

THE MAIN OBJECTIVE OF SALES PROMOTION IS TO BRING ABOUT A CHANGE

IN THE DEMAND PATTERN OF PRODUCTS AND SERVICES. BASICALLY, SALES
PROMOTION HAS THREE SPECIFIC OBJECTIVES. FIRST, IT IS MEANT TO
PROVIDE IMPORTANT MARKETING INFORMATION TO THE POTENTIAL
BUYERS.

THE SECOND OBJECTIVE IS TO CONVINCE AND INFLUENCE THE POTENTIAL

BUYERS THROUGH PERSUASIVE MEASURES. THIRDLY, SALES PROMOTION IS
MEANT TO ACT AS A POWERFUL TOOL OF COMPETITION. THE SPECIFIC
OBJECTIVES OF SALES PROMOTION ARE AS FOLLOWS
A. TO INTRODUCE NEW PRODUCTS OR SERVICES:

SALES PROMOTION IS OFTEN USED TO MOTIVATE PROSPECTIVE CONSUMERS

TO TRY NEW PRODUCTS AND SERVICES. DEALERS ARE ALSO INDUCED TO
INTRODUCE NEW PRODUCTS AND SERVICES IN THE MARKET. USUALLY,
FREE SAMPLES ARE PROVIDED THROUGH DEALERS DURING SUCH
INTRODUCTION. SIMILARLY, DISCOUNTS IN CASH OR GOODS MAY ALSO BE
OFFERED TO DEALERS TO STOCK NEW PRODUCTS OR DEAL WITH NEW
SERVICES. FREE SAMPLES, TRADE DISCOUNTS CASH DISCOUNTS ARE
BASICALLY SALES PROMOTION MEASURES.

B. TO ATTRACT NEW CUSTOMERS:

SALES PROMOTION MEASURES ALSO PLAY AN IMPORTANT ROLE IN

ATTRACTING NEW CUSTOMERS FOR AN ORGANISATION. USUALLY, NEW
CUSTOMERS ARE THOSE PERSONS THAT ARE WON AWAY FROM OTHER
FIRMS. SAMPLES, GIFTS, PRIZES, ETC. ARE USED TO ENCOURAGE
CONSUMERS TO TRY A NEW BRAND OR SHIFT THEIR PATRONAGE TO NEW
DEALERS

C. TO INDUCE EXISTING CUSTOMERS TO BUY MORE:

SALES PROMOTION DEVICES ARE MOST OFTEN USED TO INDUCE THE

EXISTING CUSTOMERS OF A FIRM TO BUY MORE. PRODUCT DEVELOPMENT,
OFFERING THREE PRODUCTS AT THE COST OF TWO, DISCOUNT COUPONS,
ARE SOME OF THE SALES PROMOTION DEVICES USED BY FIRMS TO
MOTIVATE THE EXISTING BUYERS TO BUY MORE OF A SPECIFIC PRODUCT.

D. HELPS THE FIRM TO REMAIN COMPETITIVE:

MOST OF THE COMPANIES UNDERTAKE SALES PROMOTION ACTIVITIES IN

ORDER TO REMAIN IN THE COMPETITIVE MARKET. THEREFORE, IN THE
MODERN COMPETITIVE WORLD NO FIRM CAN ESCAPE THE RESPONSIBILITY
OF UNDERTAKING SALES PROMOTION ACTIVITIES
E. TO INCREASE SALES IN OFF-SEASONS:

MANY PRODUCTS LIKE AIR-COOLERS, FANS, REFRIGERATORS, AIR-

CONDITIONERS, COLD DRINKS, ROOM HEATERS, ETC. HAVE SEASONAL
DEMAND. MANUFACTURERS AND DEALERS DEALING WITH SUCH TYPE OF
GOODS MAKE EVERY EFFORT TO MAINTAIN A STABLE DEMAND
THROUGHOUT THE YEAR.

IN OTHER WORDS, FIRMS TRY TO ENCOURAGE THE PURCHASE OF SUCH

GOODS IN OFF-SEASONS ALSO. THAT IS THE MAIN REASON BEHIND
DISCOUNTS AND OFF-SEASON PRICE REDUCTIONS OF SUCH ITEMS IN THE
MARKET DURING SLACK SEASONS.

F. TO ADD TO THE STOCK OF THE DEALERS:

DEALERS LIKE WHOLESALERS AND RETAILERS USUALLY DEAL WITH A

VARIETY OF GOODS. THEIR SELLING ACTIVITY BECOMES EASIER WHEN THE
MANUFACTURER SUPPLEMENTS THEIR EFFORTS BY SALES PROMOTION
MEASURES. WHEN A PRODUCT OR SERVICE IS WELL SUPPORTED BY SALES
PROMOTION, DEALERS ARE AUTOMATICALLY INDUCED TO HAVE MORE OF
SUCH ITEMS.

DATA COLLECTION METHODLOGY

TOOLS TO BE USED FOR DATA COLLECTION IS SECONDARY DATA &

INFORMATION HAVE BEEN COLLECTED FROM DIFFERENT SCHOLARS AND
RESEARCHERS, PUBLISHED E-BOOKS, ARTICLES PUBLISHED DIFFERENT
JOURNALS, PERIODICALS, CONFERENCE PAPERS, WORKING PAPER,
COMPANY WEBSITES & AND THEIR INTERNAL NEWSLETTERS.

CHAPTER-5
 DATA ANALYSIS AND INTERPREATATION

INTRODUCTION
VOLTAS LIMITED IS A COMPANY IN INDIA SPECIALIZING IN AIR
CONDITIONING AND COOLING TECHNOLOGY.

TATA THE COMPANY WAS INCORPORATED ON 1954 IN MUMBAI. IT WAS

COLLABORATION BETWEEN SONS AND VOLKART BROTHERS. THE CHAIRM
SEPTEMBER AN OF THE COMPANY IS MR.NOEL N TATA AND THE MANAGING
DIRECTOR AND CHIEF EXECUTIVE OFFICER OF THE COMPANY IS
MR.PRADEEP BAKSHI .ITS SHARES ARE TRADED ON THE BOMBAY STOCK
EXCHANGE UNDER SYMBOL 500575.

INTRODUCTION OF TOPIC
PROMOTING YOUR BUSINESS IS AN IMPORTANT PART OF
YOUR DAILY ACTIVITIES. AFTER ALL, IF CUSTOMERS ARE NOT SHOWING
UP, THEN YOU CAN'T MAKE A SALE. TO PROMOTE YOUR BUSINESS IN AN
EFFECTIVE WAY, CONSIDER USING THE TRIED AND TRUE SALES STRATEGIES
OF "PUSH" AND "PULL." WHETHER YOU USE COUPONS, GIVE AWAYS OR
INCENTIVES FOR YOUR BEST SALES PERSON, YOU WILL SEE YOUR BOTTOM
LINE INCREASE

IMPORTANCE OF STUDY

SALES PROMOTION IMPORTANT AS IT CREATES AWARENESS FOR A

PRODUCT OR SERVICE THIS WILL USUALLY RESULT INTO HIGHER SALES
AND PROFITS FOR THE COMPANY.

SALES PROMOTION IS THE SHORT TERM PROCESS TO INCREASE THE SALES

VOLUME FOR A DEFINED PRODUCT, IN A DEFINED TERRITORY FOR A

DEFINED PERIOD OF TIME. BASICALLY THERE ARE TWO TYPE OF SALES

PROMOTION STRATEGY: A) PUSH UP SALES PROMOTION B) PULL UP SALES

PROMOTION. IN PULL UP SALES PROMOTION MARKETER TRIES TO PULL THE

CUSTOMER WITH SOME EXTRA BENEFIT, WITH SOME GIFTS AND OFFERS,

WHILE IN PULL UP SALES PROMOTION MARKETER TRIES TO PUSH THE

PRODUCT TO THE CUSTOMER WITH THE HELP OF DISTRIBUTION NETWORK,

SHOWROOM OWNER WITH THE HELP OF DEALER MEET ETC. THEREFORE

MARKETERS USE SALES PROMOTION TO INCREASE SALES VOLUME IN

ORDER TO ACHIEVE TARGET CONTINUOUS LEARNING AND ENHANCED

TRAINING EFFORTS, ALONG WITH RESALVING INDUSTRIAL DISPUTES THAT

USED TO AFFECT PERFORMANCE.

HUMAN RESOURCES STRATEGY

VOLTAS HAD SPLIT ITS HUMAN RESOURCES DEPARTMENT INTO TWO

DIVISIONS IN THE LATE 1990s. THE FIRST DIVISION ACTED AS A THIK THAN

FOR PEOPLE POLICIES AND PROCESSES AND MANAGED CORPORATE HUMAN

RESOURCES AND INDUSTRIAL RELATIONS. THE SECOND DIVISION HANDLED

ISSUES OF INTEREST TO THE COMPANY’S UNIONIZED EMPLOYEES AT THE

DIVISIONS AND LOCATION. VOLTAS HAD THREE BUSINESS DIVISION AND

LINE LOCATION.
 CHAPTER-6

FINDINGS

FROM THE ANALYZED DATA, IT CAN BE RIGHTLY DEDUCED THAT THE AIM

OF THE STUDY IS NOT ONLY TO DETERMINE THE IMPACT OF SALES

PROMOTION ON CONSUMERS BUYING BEHAVIOUR BUT TO EFFECTIVELY

HARMONIZE PROMOTIONAL TOOLS FOR COMPANY’S GROWTH AND

PROFITABILITY. IT WAS STRONGLY AGREED THAT SALES PROMOTION NOT

ONLY CREATE AWARENESS ON COMPANY’S PRODUCT BUT TO REWARD

AND APPRECIATE CUSTOMERS PATRONAGE AS THE MOTIVE OF SALES

PROMOTION IS TO PULL CUSTOMERS INTEREST TOWARDS THE COMPANY’S

PRODUCT USING NOT ONLY NON-FINANCIAL INCENTIVES.

THE COMPANY’S PROMOTIONAL EXPENDITURE IS CENTERED MORE

ON SALES PROMOTION THAN OTHER PROMOTIONAL TOOLS BECAUSE IT IS

STRONGLY AGREED THAT SALES PROMOTION IS AN EFFECTIVE

MARKETING TOOL FOR COMPANY’S GROWTH AND MANAGERS THAT

IMPLEMENT SALES PROMOTION INCENTIVES.

TO MANAGEMENT UNDERTAKES SALES PROMOTION IN OTHER TO

INCREASE SALES VOLUME AND PROFITABILITY AS IT WAS AGREED THAT

SALES PROMOTION BOOST ADVERTISING. EFFECTIVENESS, IN TERMS OF

HIGH PATRONAGES SALES PROMOTION REQUIRED HIGH INVESTMENT TO

IMPACT ON CUSTOMERS BUYING BEHAVIOUR BECAUSE IT WAS AGREED

THAT PROMOTIONAL INCENTIVE MUST MATCH THE INTEREST OF TARGET

BUYERS TO YIELD INCREASING SALES VOLUME, SALES PROMOTION IGNITE

CUSTOMERS BUYING BEHAVIOUR BECAUSE IT WAS AGREED THAT OTHER

BEVERAGE COMPANIES SHOULD ADOPT SALES PROMOTION IF THEY MUST

INCREASE VOLUME AND PROFITABILITY.

CHAPTER-7

CONCLUSION

THE SUCCESS OF SALES PROMOTION IS HIGHLY DEPENDENT ON THE

AMOUNT OF PROMOTIONAL EXPENDITURE BUDGETED, AVAILABILITY OF
THE PROMOTIONAL STRATEGY REQUIRES THE COMPANY TO UNDERSTAND
HOW SALES PROMOTION OBJECTIVES FOCUSED ENHANCES PRODUCT
QUALITY AND BRAND KEEPING THE SALES PROMOTIONAL OBJECTIVE.
FOCUSED, INCREASE SALES VOLUME AND IMPACT ON THE COMPANY
THEREBY EXPANDING THE CORPORATE IMAGE AND THE GOODWILL OF THE
COMPANY CONTINUES RESEARCH AND DEVELOPMENT MUST BE SUSTAINED
AND PRACTICE IN THE COMPANY.

SUGGESTIONS
IN ORDER TO ENHANCE THE RELATIONSHIP BETWEEN SALES PROMOTION

AND THEIR PROMOTIONAL TOOLS IN LINE WITH CONSUMERS BUYING

BEHAVIOURS, THE FOLLOWING RESEARCH TOPIC IS SUGGESTED.

E 1. THE CONCEPTUALIZATION OF SALES PROMOTION TOWARDS

ENHANCING BRAND LOYALTY.

2. THE EFFECTIVENESS OF PROMOTIONAL TOOLS TOWARDS

PROMOTIONAL BRAND LOYALTY AND BOOST COMPANY’S GROWTH.

3. CRITICAL ANALYSIS OF THE BENEFICIAL ROLE OF PROMOTIONAL

STRATEGIES TO BOTH THE CONSUMERS AND THE COMPANY.

SCOPE FOR FUTURE STUDY

THIS STUDY IS RELATING TO PROMOTION-MIX ELEMENTS OUT OF TOTAL

MARKETING EFFORTS. IT WILL COVER MAINLY SALES PROMOTION,
METHODS FOR SALES PROMOTION, PARTIES INVOLVED FOR SALES
PROMOTION, COMBINATION OF PROMOTION METHODS WITH SALES
PROMOTION, SALES PROMOTION STRATEGY AND ITS RELATED CONCEPTS.
THIS TOPIC HAS STUDIED IN FMCG SECTOR IN WORLD AND INDIAN
INDUSTRY. LEADING COMPANIES HAVE BEEN SELECTED ON THE BASIS OF
THEIR MARKET SHARE FOR THE RESEARCH STUDY AND THEIR
COMPARATIVE STUDY HAS BEEN CARRIED OUT. FURTHER, FOCUS IS THERE
ON FUTURE OF SALE PROMOTION STRATEGY ALSO. THE SCOPE OF THE
STUDY AS PER THE TOPIC IS SUFFICIENT ENOUGH TO MEET THE
REQUIREMENT OF RESEARCH STUDY.
 REFRENCES
1. KUMAR, KM. KRISHNA (2006) "CONSUMER PERCEPTION ABOUT
PROMOTIONAL STRATEGIES ADOPTED BY MARKETERS: A
STUDY WITH REFERENCE TO FAST MOVING CONSUMER GOODS
IN KERALA", PHD. THESIS, UNIVERSITY OF CALICUT, APRIL.

2. ALVEREZ, BEGOIIA AND CASIELLES, VHQUEZ, RODOLFO (2005),

"CONSUMER EVALUATIONS OF SALES PROMOTION: THE EFFECT ON
BRAND CHOICE", EUROPEAN JOURNAL OF MARKETING, VOL. 39,
NUMBER: 1 PP. 54 - 70.

2. BAILEY, ANTHONY, AINSWORTH (2005), "NON-FULFILLMENT OF

PROMOTIONAL DEALS: THE IMPACT OF GENDER AND
COMPANY REPUTATION ON CONSUMERS' PERCEPTION AND
ATTITUDES", JOURNAL OF RETAILING AND CONSUMER
SERVICES, VOL. 12, ISSUE 4, JULY, PP. 285-295.

4.UDEMY BLOG> COMPANY- PROFILE- EXAMPLES

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