Situation 2: Use the information below to answer the question

BACKGROUND OF THE CASE

ROBO KNON is a joint venture between the Indian based $40 million ROBO group and the $7 billion KNONan industrial power group of the US, which is one of the most comprehensive provider of advance power systems. KNON has been at the hub of making available protection and control solutions for power systems for over 80 years and has developed a portfolio of specialist products and services. The KNON industrial power group, through its joint venture ROBO KNON, provides the world's most comprehensive systems for power generation and transmission in India.

ROBO KNON (RK) is a forerunner in the field of power system protection and control for past 28 years, with a wide spectrum of products that caters to the protection and control of generators, motors, transmission lines, transformers, sub-stations, and power distribution networks.

The company, presently with a 20 per cent market share, is poised to challenge the other multinational giants like Mac Iver of UK, Simpson of US, Roland and Smith of Germany, through its enhanced product range and multiple technology options. The company's capability ranges from conceptual design through systems integration to supply of major turnkey projects.

The company is having four manufacturing units with a strong distribution network spread over 10 states at 12 locations with four regional offices, eight branch offices and one project office.

Further, it is having a sales turnover of $12 million in 1998-99, recording a consistent annual growth rate of 40 per cent for the previous four years. It has been ranked fifth in the growth rate in market capitalization among its competitors, and ranked 20th in terms of earnings per share.

The products mainly aim to reach the customer groups such as state electricity boards, power utilities, power corporations, industries, captive generation plants, original equipment manufacturers (OEMs), railways, process industries, and so on.

The company is also having exports division, catering to customers and subsidiaries of KNON at U.K., South Africa, Gulf, Australia, and Far East.

Apart from the various products the company markets, their main focus is on "Relays", one of their key products. Relays are generally used to protect and control primary equipment like generators, transformers, feeders, motors, etc. in all the power plants and sub-stations. Three types of relays are manufactured: (a) Electromechanical, (b) Static, and (c) Numeric.

These relays are used depending upon their suitability for the system. Its estimated market in India during 1998-99 is a 60 million.

The major competitors in the relay market and their market share are:

Mac Iver (market leader): 32%

Roland: 27%

ROBO KNON: 20%

Smith: 10%

Simpson: 6%

Others: 5%

THE OBJECTIVES AND STRATEGIES

The major objectives of the company are:

1. To become the market leader in 'relay' market segment.

2. To challenge the market leader Mac Iver.

The marketing department developed strategies, keeping the company's objectives in mind. The strategies are:

(a) Offering multiple technology options and single window solutions.

(b) Identifying new market opportunities.

(c) Strengthening the dealer network.

The company intends to make an organised move in achieving its objectives. Initially it entrusted the task of getting information for developing marketing policies and strategies to its Marketing Research (MR) wing. The main responsibility of the MR wing is to study the market and give the findings to the marketing department to develop its strategies. The MR wing identified the buying process of its customers to start with their study.

HIGHLIGHTS OF RESEARCH

The industry which intends to set up its power plant initially gains approval from Central Electricity Authority, and depending upon its capacity of the power project, it entrusts the responsibility to its technical consultant and Original Equipment Manufacturers (OEM's) or Erection, Procurement and Construction contractors (EPC's).

The choice between the OEM or the EPC's options will be decided by the industry, based on the recommendations of a technical consultant. In case of small power plants, the OEM also acts as EPC since the cost of the equipment covers the major project cost. In case of large power plants, EPC contractors will be responsible for engineering, procurement and commissioning of the power plants. The EPC further tries to coordinate with project consultant and OEM.

Hence power system manufacturers need to pass through these business stages.

Case I If OEM takes the responsibility of the project, the major decision making for purchase of power systems will be

A. Industry: Final customer. (Ultimate decider: Refers his needs to his consultant and OEM)

B. Consultant: Recommender (Responsible for design, specifications of equipment and coordinates with the OEM)

C. OEM: Initial decider (may or may not be involved) (Responsible for supply of primary equipment, engineering, procurement and construction materials)

Case II If the industry appoints EPC to undertake the responsibility of the project, the major decision makers are:

A. Industry: Final customer (Ultimate decider refers his needs to his consultant and EPC contractor)

B. Consultant: Recommender (Responsible for design, specifications of equipment and coordinates with EPC and OEM)

C. OEM: Initial decider (may or may not be involved) (Responsible for supply of primary equipment and associated products)

D. EPC: Immediate customer or acts as a subsidiary customer. (Responsible for engineering, project and construction materials)

After this initial exercise, they basically identified important objectives that need to be achieved by conducting research.

The identified objectives for the study purpose are:

(a) To assess market potential for power generation equipment

(b) To evaluate the preferences and identify the perceptions and technology trends of power systems protections users.

(c) To measure the brand equity for ROBO KNON (RK) products and to make a comparative assessment with its competitors.

After a detailed research study, they came out with the following findings. These findings are used to modify their existing marketing strategies.

The highlights of their findings are:

(a) On an average there are about 60-70 power plants that are commissioned in the market and they are with a capacity ranging up to 500 mw.

(b) The transmission and distribution projects are in the capacity range of 33-132 kv.

(c) There is more or less equal participation by EPC's, OEM's, and consultants in both generation and transmission and distribution of power areas.

(d) The major captive power plants are set up by fertilizer, petroleum, steel, cement and sugar industries.

(e) RK relays are not preferred for generation projects that are less than 4 mw.

(f) OEM's and EPC's, for both generator and T&D (Transmission and Distribution) projects, consider price and delivery as the major criteria for brand decision.

(g) OEM's and EPC's are doubtful about the effectiveness of numeric relays but consultants generally recommend numeric relays.

(h) RK stands in 3rd position regarding brand preferences where the 1st and 2nd positions are shared by Mac Iver and Roland respectively

Questions:

1. What are the major issues involved and how has the company resolved the same?
2. What marketing strategy and action plan the company should follow to achieve the leadership position?