B2B MARKETING

CARRIER INDIA

Fadhal Abdulla A V
215112084

COMPANY BACKGROUND Carrier is a part of United Technologies Corporation, USA. With 2008 revenue of $58.7 billion, UTC is a conglomerate operating in the high technology space. The UTC group operates in aerospace & building systems with companies like Carrier (air-conditioning), Otis (Elevators), Pratt & Whitney (Jet- engines), Sikorsky (Helicopters), UTC Fire & Security (Chubb & Kidde), Hamilton Sundstrand and UTC Power. Founded in 1915 by Dr.Willis Carrier, the inventor of modern air-conditioning, Carrier has developed into being the worlds largest provider of air -conditioning, heating and commercial refrigeration systems (HVACR) with operations in more than 170 countries, employing approximately 41,000 people worldwide and revenues of $14.9 billion in 2008. Over the decades, Carrier name has become synonymous with reliability, innovation, commitment, superior technology, cutting-edge manufacturing and world-class performance. It also has one of the most prestigious installation bases in the world.

Carrier started its operations in India with setting up of companies namely Carrier Aircon Limited in 1986, and Carrier Refrigeration Private Limited in 1992. Carrier brought to the Indian consumer, access to advanced technology and air-conditioning and refrigeration products from the worldwide product portfolio of Carrier. In October, 2006, Carrier Aircon merged with Carrier Refrigeration and the name of the merged entity was changed to Carrier Air-conditioning & Refrigeration Limited (Carrier India). Carrier India's manufacturing facility at Gurgaon produces air conditioning equipments including Window Room Air conditioners, Hi- Wall Splits, Slimpak Splits, Cassette Splits, Ducted Splits and Chillers. It also manufactures Refrigeration Equipments including Cold chain equipment comprising of Cold Rooms, Truck Refrigeration & Bus Air-conditioning system, Freezers, Visi Coolers & Super Market Products. Carrier's India operation has many firsts to its credit:

First air conditioning Company to introduce the concept of a Comfort Shop.

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First to develop exclusive dealer networks in the country. Today, there are over 345 Carrier exclusive dealers in India. Setup the Willis Carrier Engineering Centre to provide technological support to develop new products and upgrade existing ones.

Carrier India pioneered HVAC dealer concept in the country to give an unparalleled experience to its customers. The Company has built a strong distribution network on a platform of partnership and trust. The Company boasts of a strong network of over 590 sales and service dealers and 1000 distributors and retailers. The cornerstone of the Companys distribution is the Willis Carrier Club Dealer (WCCD). Willis Carrier Club is a nationwide endorsement of the Companys best dealers in the country. This endorsement not only gives unique identity to the dealers, but also helps drive customer satisfaction through expertise, the hallmark of Carrier, the inventor of modern air-conditioning. Apart from the national traditional channel, the Company has also developed relationships with most of the organized retail chains in the country. Carrier is one of the first to adopt the energy efficiency label issued by the Bureau of Energy Efficiency (BEE) - Awarded the First prize for energy conservation in Consumer Goods Sector in 2007 & 2008 by the Ministry of Power, Govt. of India Carrier is committed to the highest levels of quality and service. It is the companys endeavour to ensure total customer satisfaction. For this the Company has a network of over 475 service dealers and 90 service franchisees to provide a range of services. Carrier India Vision:

To be recognized as the leader in every segment we operate in by: Being customer focused in everything we do and following ACE diligently Delivering best in class quality in the product as well as aftermarket service Being environmentally conscious in areas of energy efficiency and pollution Establishing a performance culture that respects human values & team work Remaining embedded in our core values of EH&S and ethics

Thereby growing profitably and ahead of the market every year, making Carrier a destination of choice for all within HVAC&R industry. AIR CONDITIONING The air conditioning business segment consists of Residential & Light Commercial, Building Systems and Services, Toshiba, Totaline and Service. During the year, the air conditioning segment grew by 26%. The Residential & Light Commercial sales growth rate was more than the growth rate of Air conditioning segment during the year. The Company entered into contracts with more than 20 new corporate accounts and is the preferred supplier for customers in most segments including retail, private banking and insurance. The Company has increased its focus in retail by appointing

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around 300 new outlets during the year and now has a network of over 520 Sales & Service Dealers and around 1000 distributors and retailers throughout the country. The Company has an elite club of exclusive dealers named Willis Carrier Club Dealer (WCCD) comprising its best HVAC dealers in India. Under the Building Systems & Services (BSS), the Company has been in the fore front promoting the green building movement in India. The Company has been part of some prominent LEED certified buildings in India. The Company maintained its leadership position in the Commercial market throughout the previous year being the preferred supplier to some of the large real estate builders. Further, the Company localized the 39G Air Handling Unit to be manufactured at its Gurgaon factory. Toshiba sales growth rate was more than twice the growth rate of Air conditioning segment during the year. During the year, the Company focused on the Toshiba business as a separate business vertical in the premium market segment. The Company bagged some prestigious orders from major retail brand chains, IT, commercial and hospitality segments in the energy efficient Digital Inverter products and Variable Refrigerant Flow systems. Totaline provides factory-authorized and other spare parts to dealers, contractors, technicians and other customers. During the year, Totaline expanded the product range with the introduction of Fractional Horse Power (FHP) compressor, reciprocating and scroll compressors, new range of water dispensers, air purifiers, Totaline branded installations and tools for VRF systems. Totaline stores are truly One-Stop-Shop for parts and supplies in the HVAC industry. In September, 2007 the Company opened a Totaline store in Ghaziabad. In R.LC Service, the Company is focused towards quality of field service with faster resolution time, approach and revenue. During the year the Company launched an all India Call Centre located at New Delhi with a national no. 1800301. This call centre is multi lingual with 7 languages - English, Hindi,Tamil, Malayalan, Bangla, Kannada and Telegu for improved customer communication. Carrier Care Net, an initiative for standardizing Customer Call Management Process and monitoring mechanism for enhancing customer satisfaction. It facilitates monitoring of all the received calls and timely resolution on a daily basis. During the year the Company laid greater emphasis on training for field employees, providing them with identity cards, uniforms and tools to enhance customer satisfaction towards its products and services. In BSS Service, during the year, the Company has deputed dedicated service sales personnel to increase the service revenue and added retrofit as a new business initiative. This has significantly increased the market penetration. Further, in order to enhance field service and quality, measures like providing EH&S kits, service vans in major metres, uniforms and tools to field service staff were initiated. AIR CONDITIONER INDUSTRY The size of the air-conditioner industry in India is about Rs 2,000 crore. The industry can be sub-divided into non-ducted and ducted products. The demand for non-ducted products -- window air-conditioners and mini-splits -- comes from both households and corporate. The demand for ducted products -- central plants, packaged airconditioners and ducted splits -- is only from the corporate. Corporate traditionally accounted for about 60 per cent of the total demand for airconditioners. Corporate sector is still the major demand driver in this industry but -3-

because of the burgeoning Indian middle class there has been a noticeable jump in the demand for air-conditioners from the household segment.

Competitors of Carrier India: Indian air conditioner market is already flooded by players like Hitachi, Whirlpool, LG, Haier, Samsung, Voltas, Videocon and many more each competing on the basis of price and features. Carrier has played a pioneering role in the growth of air conditioners in India. Carrier has established itself as the market and brand leader in the Air Conditioner market in India. The company has built a diverse product portfolio to meet the needs of different consumer segments, ranging from middle income buyers to high class buyers, who look for high performance and better quality. Competitors Analysis Considering the competitors in business market, Blue Star, LG, Voltas are some of the prominent players 1) LG offers some of the commercial products like Standing ACs and Cassette ACs but it does not offer any customized cooling solutions like carrier does 2) Blue star is one of the leaders in business segment and as a necessary evil of being the leader in the category it offers a wide range of customized offerings like a. Central Air Conditioning - The building blocks of Blue Stars solutions are its products. The most comprehensive range of air conditioning products in the country. A wide range of models are available in each product category to ensure that the air conditioning system design is implemented without any compromise. All products have been designed on the energyefficiency platform, and offer a host of advanced features. b. Precision Air conditioners - Blue Star's Precision Air conditioners (generally know as PACs or CRACs) are ideal cooling solutions wherever continuous, round-the-clock, precise control of temperature, humidity and

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filtered air is desired. Modular in design, Blue Star's PCPAs are manufactured using state-of-the-art techniques from an ISO 9001 plant at Dadra, under technical collaboration with Eaton Williams of the UK. Highly energy-efficient and designed for 24x7 operations, using an openarchitecture control protocol, these air conditioners offer very low cost of ownership and subsequent up gradation. The offerings of blue star are attractive at the first place but when we analyze the offerings we can infer that exhaustive customized offering is not provided by any of the other players. The flexibility of Carrier in offering the customized services even with non-Carrier products provides it unique advantage and competence which cannot be replicated in the short run by its competitors. PRODUCT LINE Air Quality Solutions

Improves the quality of air. Controls and Thermostats

Innovative controls that manage all aspects of your home comfort. Air Conditioners and Heat Pumps for Split Systems

Cooling solutions for split systems. Choose a heat pump for A/C and extra heating.

Furnaces for Split Systems

Heating solutions to work with your preferred fuel source.

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Fan and Evaporator Coils

Coils connect to the refrigerant line from Heat Pumps or A/C units. Fan coils add air flow. Duct-Free Split Systems

Can't install ducts in your home or room? Consider a duct-free solution. Packaged Products

Carrier's All-In-One external solutions for whole home heating and cooling.

Room By Room Solutions

Solutions for cooling and heating for individual rooms. Boilers

The perfect heat source for your home's radiant heat system.

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Generators

When power goes out, your home health and comfort are on the line. Back yourself up with a state-of-the-art Carrier. Carrier is famous in India because of its high quality, innovation and ability to cater to consumers of various stratas of life. Across the globe, Carrier ship one residential heating/cooling system every 3 seconds and install a unit every 6 seconds. No matter what home and office comfort needs, people can count on Carrier to keep them comfortable.

CREATING VALUE: Noresco NORESCO, a unit of Carrier Corporation, develops and implements energy, water and operational improvement solutions with guaranteed performance and savings. For nearly 20 years, NORESCO has partnered with government clients to reduce energy consumption by developing and installing performance-based energy and resource conservation projects that have generated more than $1.5 billion in guaranteed lifecycle savings. Performance contracting, a core financing approach offered by NORESCO, delivers facility infrastructure upgrades with guaranteed savings that are transparent, measurable and sustainable. Use of performance contracting in conjunction with public funding enables government clients to leverage private investment to multiply the value of projects. It is estimated that performance contracting can produce three to four times the accomplishment of publicly funded projects, with greater infrastructure improvements, energy and water savings and regional job creation. Dome-Tech Dome-Tech, Inc., a unit of Carrier Corporation, is an energy engineering and professional consulting services firm that ensures sustainable, high-performance building solutions; their services focus on reducing energy consumption and climate impact while providing a productive work environment. Comprehensive services span both existing buildings and new construction and include sustainable building consulting / energy modelling, new building commissioning, building turnover services, energy procurement consulting, benchmarking and conservation opportunities, existing building commissioning, energy performance testing, and turnkey project implementation. Architectural Engineering Corporation Architectural Energy Corporation (AEC), a unit of Carrier Corporation, is a leading business-to-business energy engineering firm focused on energy, buildings, and the -7-

environment. AEC offers a comprehensive and innovative suite of professional services and products that enable AECs clients to achieve and maintain peak energy and environmental performance over the life of their buildings. AECs offerings range from sustainable design assistance for building construction and renovation projects to Leadership in Energy and Environmental Design (LEED) consulting services and building commissioning, re-commissioning and retrocommissioning services. AEC also conducts a broad spectrum of energy and environmental research and development activities, focused on improving integrated building performance. AECs products include software tools for analyzing the energy performance of residential and commercial buildings, and ENFORMA Building Diagnostic, which provides continuous and automated performance analysis of building HVAC and other energy-using systems.

MARKETING STRATEGY The three major components of B2C marketing usually are: 1. All company activities should begin with, and be based on, the recognition of a fundamental customer need. 2. A customer orientation should be integrated throughout the functional areas of the firm production, engineering, finance, R&D. 3. Customer satisfaction is viewed as the means to long-term profitability goals. So what is different in B2B marketing? 1. The technical characteristics of the product are important. 2. These products directly affect the operations and economic health of the customer. 3. The customer is an organization rather than an individual consumer, or family. In a typical B2B market the following features of products and services make the task a difficult one. 1. More complex offerings. 2. Functional vs. Symbolic Attributes 3. Large unit dollar value/Large quantities 4. Custom/Tailored 5. Various Stages from raw material to finished goods. 6. Foundation, Entering, Facilitating Goods The nature of customer buying behavior is something which marketers need to look into deeply. In B2B marketing: 1. Group Process is involved. 2. Formal decision process needs to be followed every time. 3. Lengthy hours of decision. 4. Loyalty is of prime importance.

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5. Decisions based on risk and opportunity. Under such circumstances B2B marketers need to follow the below mentioned processes. At Carrier selling Air Conditioners would involve: 1. Positioning Statement: An important first step in business to business marketing is the development of your positioning statement. This is a statement of what you do and how you do it differently and better than your competitors. Carrier as a maker and distributor of various types of ACs would like to position itself as a first choice for organizations. 2. Developing your messages: The next step is to develop your messages. There is usually a primary message that conveys more strongly to your customers what you do and the benefit it offers to them, supported by a number of secondary messages, each of which may have a number of supporting arguments, facts and figures. According to the market research and advices from certain executive batch students we came to know that for Carrier it would be better to propagate a divided communication strategy to gather maximum awareness and understanding of the firms interested in its offerings. It can offer the following combination of communication tools: a. Advertising (in trade magazines) b. Public Relations / Corporate c. Communications d. Prospects, Leaflets, Catalogues e. Sales Promotion Trade Fairs / Exhibitions Direct Mail Sponsorship 3. Building a campaign plan: Whatever form your B2B marketing campaign will take, build a comprehensive plan up front to target resources where you believe they will deliver the best return on investment, and make sure you have all the infrastructure in place to support each stage of the marketing process - and that doesn't just include developing the lead make sure the entire organization is geared up to handle the inquiries appropriately. 4. Briefing an agency: A standard briefing document is usually a good idea for briefing an agency. As well as focusing the agency on what's important to you and your campaign, it serves as a checklist of all the important things to consider as part of your brief. Typical elements to an agency brief are: Your objectives, target market, target audience, product, campaign description, your product positioning, graphical considerations, corporate guidelines and any other supporting material. 5. Measuring results: The real value in measurement results is in tying the marketing campaign back to business results. After all, youre not in the business of developing marketing campaigns for marketing sake. So always put metrics in place to measure your campaigns, and if at all possible, measure your impact upon your desired objectives, be it Cost per Acquisition, Cost per Lead or tangible changes in customer perception. Carrier can measure the effectiveness of its marketing strategies by:

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a. The profitability from Customer Affinity study, which points to disconnects between vendors and customers, argues for a new measure of marketing performance, called customer affinity, which incorporates critical elements of the customer lifecycle experience. This way Carrier would be able to incorporate the good elements of a successful sale and stay cautious of errors committed. b. A survey of people who read a magazine to evaluate brand recall and predisposition to your products before and after a series of ads. This can be done by your marketing team or by companies that offer focus groups and market research. c. Increases in levels of brand awareness over time will tell Carrier that decision-makers are at least hearing something about a clients brand either positive or negative. d. Positive brand associations will help to determine the ways in which the brand is perceived and provide guidance as to ways in which perceptions need to be changed. Levels of brand consideration will inform us that the brand is at least being considered in the overall purchase decision. Ultimately, of course, increasing sales and market share are the best two indications that the brand is healthy. VALUE DELIVERY Considering the wide variety of product offerings in the commercial segments we can state that value creation can be done in a number of ways in air conditioners market by carrier India.

Carrier limited offers a complete solution which is explained below. This system helps company to offer a complete value proposition to the institution that look for such solutions. This concept is not only restricted to integrating carrier products but it is treated as separate revenue earning unit and also respects business for integrating carrier and non- carrier products as per the institutional customers demand and requirements. - 10 -

The Carrier Comfort Network (CCN) architecture is the most advanced technology to evolve from Carrier's through knowledge of both comfort and control. CCN addresses a wide range of comfort, operational, air quality and energy management objectives by allowing separate pieces of Carrier HVAC equipment, non carrier equipment and related building systems to work in harmony. The Carrier comfort Network's seamless architecture integrates reliable DDC control technology with high quality HVAC equipment to deliver maximum operating efficiency and precise comfort levels. Whether it is a single facility or it is a complete system, whether it is a retail shop, or it is a comprehensive commercial centre, Carrier offers an economically sound and efficient solution to create the most comfortable and energy saving indoor environment. With every generation, Carrier Corporation has consistently led the industry, not only in HVAC equipments advances, but also in development of standalone and networked controls that optimized the performance of Carriers world class HVAC systems. 1) Chillervisior System Manager (CSM):centralized control and management of several chillers automatic switch on/off of chillers for operation balancing optimizing carrier chiller's efficiency. 2) Comfort Controller 6400: Genral purpose controller :These fileds installed,general purpose controllers enable noncarrier products or pre CCN equipment to communicate with CCN. Comfort controllers are ideal for networking cooling towers boilers and pumps. 3) ComfortView: CCN user interface : Graphic operation realizes the convenience of building control management system. 4) CCN Web:Web Access Module :with 1E or LAN or P2P ,CCN can be accessed from anywhere As we can see that the value offered through these customized solutions is much more than the value created by selling the individual products. Carrier has a dedicated team which works with the clients on gathering the requirements from the customers, designing the solution and installing the proposed solution at the facility. This allows the company to offer unique offers to the customers. Environment Health & Safety (EH&S) EH&S is a core value in all of Company's business operations. Company believes that an excellent Company is by definition "a safe Company". Since Company is committed to EH&S excellence, it implies that minimizing risk to people, plant and products is inseparable objective from all other Company's objectives. Every employee of the Company is committed towards a zero accident goal and has taken full ownership of the EH&S process. With a combination of commitment and disciplined approach to the implementation of EH&S Management System at all levels, your Company has made remarkable improvement in conservation of natural resources and protecting natural environment.

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