Cummins India - Consumer Driven Modularization Strategy

            
 
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Case Details:

Case Code : MKTG104
Case Length : 15 Pages
Period : 1999-2004
Pub Date : 2005
Teaching Note :Not Available
Organization : Cummins India
Industry : Power Gensets, Diesel Engines
Countries : India

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Excerpts

Customized Power Rental Business

In the face of uncertain demand due to the recession in the Indian economy, CIL understood that there was not much possibility for either increasing or even sustaining the genset sales figures. The company started renting gensets to the customers who did not want to spend huge amounts of money on constructing captive power generation plants and to the newly established plants that were yet to reach their full capacity utilization levels...

The Modularization Strategy

The basic design of the regular genset model was kept intact by CIL. Modularization involved adding a few additional or customized features to cater to the unique needs of specific customer segments.

Basic genset design was customized to broaden its use and appeal to the particular customer. In developing this value proposition, a different approach was required. The engineers had to start not with a product but with the desired benefits a customer required.

Marketing Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies

They had to understand each customer's operating economics to determine the value of uninterrupted power, put together all the components of the required power generator system, fit it into a customer's operating environment and develop maintenance and testing programmes...

The Future

Since India's energy needs were growing faster than its production capacity, power problems seemed to be here to stay in the country. The recurring power shortages, with an average and peak power deficit of 7 per cent and 14 per cent respectively, coupled with low quality power supplied by the SEBs in almost all the states meant that alternative power sources would inevitably be needed. Diesel-based gensets turned out to be the most popular choice for both industrial as well as domestic users as they were faster and easier to install and also economical to operate...

Exhibits

Exhibit I: Major Players In The Indian Genset Industry
Exhibit II: CIL Diesel Engine Product Range
Exhibit III: Gensets on the Rooftop of Ansal Plaza
Exhibit IV: 'S' Series Engine
Exhibit V: 'X' Series Engine


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