a study of the feasibility of led lamps in india
TRANSCRIPT
Business Communication
Project
A study of the feasibility of LED lamps in India
Business Communication Project
Submitted to:Prof. Sajith
By Group One• Gouri Shankar
Das• Sahil Channa• Sheetal Koul• Sourav Biswal• Kandarp Varia• Rajput Bharat
Singh• Pratik Mullick
What is LED?
• LED or Light Emitting Diode is a semiconductor diode emitting light at visible, infrared and ultraviolet wavelengths with very high brightness.
Red, Green and Blue LEDs.
LED Usage in various fieldsA bus with LED display board showing destination and stoppage.
LED usage in various fieldsA traffic light in Shanghai, China with LED lamps
LED vs. Incandescent
• A 5 watt LED produces approx. 18-22 lumens/watt.
• LEDs can be very small, less than 2mm.
• LEDs waste very little energy used.
• A 60-100 watt incandescent bulb produces 17 lumens per watt.
• The smallest lightbulb is around 2 inches in length.
• Incandescent bulbs waste nearly 98% of its energy as heat.
LED vs. Incandescent (contd)
• LEDs have a long useful lifespan, estimated to be 35,000 hours of useful life.
• LEDs fail by dimming over time.
• LEDs are shock resistant, due to solid-state parts.
• Incandescent bulbs have a relative lifespan of 1,500 hours.
• Incandescent bulbs fail abruptly.
• Incandescent bulbs are extremely fragile.
Vision Statement of IllumiCorp.
• Availability of cheap and reliable light source to rural areas with electrical connection.
• Availability of light source to undeveloped urban areas, especially slums.
• Reduce unaccounted light wastage from tampering of electricity sources.
• Decrease usage of electricity through efficient use of electricity.
Competition
Rural Areas• Kerosene Wick Lamps• Kerosene Hurricane Lamps• Incandescent Torches• Home Solar Systems
Competition
Urban Areas• Incandescent Bulbs• Fluorescent Tube Lamps• Compact Fluorescent Lamps (CFL)
Consumer Needs (Rural)
• Brighter light with wider diffusion.
• Lower daily expenditure.
• Wind-proofing• Multi-user
usability
• LED lamps diffuse light evenly.
• Kerosene lamp runs for 6 hrs per Rs. 10. LED runs for 50 hours.
• LEDs are very rugged
• The same light source is bright enough for 3 people.
Consumer Needs (Urban)
• Low power consumption.
• Portability
• Longer duration of usage.
• Incandescent : LED ratio for power consumption is 1:98
• LED lamps are portable, since they are lightweight and rugged.
• 1 LED lasts for 35,000 hours.
Product
• IllumiCorp’s LED lamp is designed for multi-use.
• It is portable• It has 2 energy
sources, both solar as well as AC Mains.
• Contains a rechargeable battery.
• Priced at Rs. 199/-
Product (contd.)
• Gives 4.2 hours of light on batteries.
• Designed to be hung from a wall, a ceiling or kept on a bed.
Target Customer
• The availability of artificial light is dismal in the interior districts of quite a few states in India.
• The product is targeted at the rural poor, in the pilot phase. Ke
rose
ne Lam
p
Elec
tric Bu
lb0%
10%
20%
30%
40%
50%
60%
< 2 Hours2 to 4 Hours4 Hours +
Data from Stanford Social Studies Report, June 2003
Market Size and Trends
Region % of villages electrified
% of homes electrified
Total Population (2001 census)
West Bengal 78% 26% 80,221,171
Uttar Pradesh 79% 27% 166,052,859
Orissa 73% 25% 36,706,920
Rajasthan 92% 52% 56,473,122
Data from Stanford Social Studies Report, June 2003
Marketing Plan
• Short Term Goals– Streamline the process of
penetrating new markets.– Emphasize incentives for poor users,
both rural and urban.– After-sales customer service– Establish good reputation with
customers
Marketing Plan
• Long Term Goals– Retain market focus.– Accessible to even the poorest
consumer.– Make customers feel as consumers
and not charity recipients.
Marketing Strategy
• Stimulate demand, in form of cheap and robust technology.
• Build positive brand recognition, especially over CFL Lamps.
• Emphasize product quality rather than cheapness to overcome stereotype.
Distribution
• The supply chain should have minimum handovers.
• Use of existing distribution channels.
• IllumiCorp to act as purchasing and manufacturing channel with zero inventory costs.
Local Component Suppliers
Foreign Component Suppliers
Manufacturer
Existing Distribution Channel
Local Vendor
Organization Structure
Illumicorp CEO
Chief Technical Officer
Factory Manager
Foreman
Supply Manager
Chief Marketing Officer
Local Sales
Officer
Rural Distributo
r
Rural Distributo
r
Local Sales
Officer
Urban Distributor
Local Sales
Officer
Rural Distributo
r
Rural Distributo
r
Organization Structure
• Illumicorp HQ coordinates marketing activity at the national and regional level.
• The HQ also coordinates with the factory for manufacturing, operations and resources, especially national and imported raw materials.
Pricing
• The product sells for Rs. 199• These prices, based on the retail
price, includes a 10% margin to IllumiCorp, 10% margin to distributor and 15% margin to retailer.
Production Cost per Unit
Component
Price Description
LED Source
Rs. 15 1 Watt Luxeon LED
Circuit Rs. 10 Regulate Current to LED
Solar Panel Rs. 35 1.2 Watt panel, supplied by Jai Wei, China
Batteries Rs. 60 2 X AA NIMH Batteries, Rs. 15 per battery
PVC Casing Rs.5 Injection-molded polycarbonate casing
Lens Rs. 4 Plastic Reflector
Switch Re. 1 On/Off Switch
AC Adapter Rs. 10 Inbuilt adapter for recharging + use
Assembly Rs. 5 Cost of assembly (Variable costs only)
Packaging Rs. 3 Cardboard box with graphics
Total Rs. 148
Fixed Costs
Component Price Description
Land Rs. 1,70,000 Factory Land Cost
Factory Rs. 3,20,000 Factory building, electric connection, plumbing
Machine Rs. 3,10,000 Assembly-Line machine for casing
Labor Rs. 1,50,000 Labor costs for 1 year
Management Rs. 2,50,000 Salary to top-level management
Marketing Rs. 3,00,000 Product promotion
Misc. Rs. 50,000 Administrative expenditure and stationery
Total Rs. 15,50,000
Break Even Calculation
• Break Even Point is calculated as:
• Here, the BEP stands at:tCostPerUniPROFIT
FixedCostBreakEven
30000)148199(
1500000
BEP
Projected Cashflow
Year 0 Year 1 Year2 Year 3 Year 4 Year 5
Mar-keted by Govt.
-155000
0
-600000
200000 400000 440000 NaN
Mar-keted by Il-lumi-Corp.
-155000
0
-700000
131000 318000 419000 NaN-1750000
-1250000
-750000
-250000
250000
750000
Marketed by Govt. Marketed by IllumiCorp.
Projected Sales
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Mar-keted by Govt.
4750 4000 1000 200 NaN NaN
Mar-keted by Illumi-Corp.
4000 4065 935 505 NaN NaN
250
1750
3250
4750
Marketed by Govt. Marketed by IllumiCorp.
Thank You…