Essay About Company’S Industrial Battery Business And Amaron Batteries

Amara Raja Industry Analysis
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Group 1Industry Automotive componentsCompany Amara Raja BatteriesMembers Submission Number IV1. Abdur Rehman (31001)2.Ajay C N              (31002)3.Annamalai AN  (31003)4.Arun Kumar R   (31004)Product pricing strategies in vogue in the industry – and the strategy adopted by the company for pricing its products     For the success of any aftermarket product competitive pricing can go a long way in increasing the visibility across markets. In 2013, the Company’s Industrial Battery business registered a double digit revenue growth over the previous financial year with an improvement in price realisation, despite capacity constraint and challenging & competitive market conditions. Diminishing price gap between the organised and unorganised players increased the preference for branded products. The company used the right pricing strategy in this situation and had an edge over other players as it produced high quality products at competitive prices.    This was at a time when the battery industry witnessed significant additions in capacity by existing suppliers as well as new entrants, supply outstripped demand requirements, creating unfavourable pricing trends in the industry. Passenger car aftermarket battery prices were increased twice by 3.5% each in December 2012 and March 2013 to cover inflation and lead prices. There was an increase in material costs owing to increased volumes, enhanced trading, rupee depreciation against the US$ and increase in lead prices (Q4/2012-13). Material cost asa percentage of net sales was 67.4% in 2012-13 compared with 68.0% in 2011-12. The people cost increased on account of an increase in annual compensation, marginal headcount addition and the annualised effect of the cost of the previous year.     In spite of all this just because of the competitive pricing strategy adopted by the company the net profit for the year jumped 33.29% from Rs. 2,151 million in 2011-12 to Rs. 2,867 million in 2012-13. Various promotion/ communication strategies used by the industry and the company , branding and importance of branding in the industry and the company      Promotion of a company includes Personal selling, advertising, sales promotion and public relations. These components constitute the promotional mix. There is no one right promotional mix these strategies used in different ways help the company achieve its overall objectives.    Amaron batteries have also used some of these components extensively to promote its brand.Some of the recent promotional activities by Amaron include,Appointing Optima Advertising, a Chennai-based full service ad agency, to handle its online advertising mandate following a multi-agency pitch. Optima will devise a complete strategy to manage Amaron Batteries’ online image.Starting a virtual academy, as a part of the companys Amaron Pro Racing initiative in association with the companys brand ambassador, Narain Karthikeyan.     The reason behind choosing Narain Karthikeyan as the brand ambassador was to position the battery as a sturdy build, strong constitution with enormous stamina to endure sub-sonic speeds which resonates with speedster Narain Karthikeyan.     The main focal point behind these promotional activities was to tap potential customers and create various indirect touch points to link them to the brand and influence their buying decision, thereby, increasing the trials for the brand and promoting value added services.Details of the companyDetails of production, capacity availability, utilization levelsS. NoPlant typeCurrent production(in million units)Current Utilization(percentage)New Plant Proposed production(in million units)Proposed utilization(percentage)1Automotive batteries6 100640(2.4 million units)2UPS batteries (tubular and plastic batteries)4503-450(1.44 million units)Source: