EVOK | Furniture Industry | New Product Design

B2B Marketing Project

1. UM15006 Akash
UM15016 Chandan Das
UM15025 Ketan Choudhary
UM15036 Priya Ranjan Mohanty
UM15048 Somil Malhotra
UM15057 Prateek Gupta
XIMB | BM-2017
EVOK
SECTION A (GROUP – 5)

2. 1

Contents
Executive Summary ...................................................................................................................... 2
1. Current Marketing Situation ...................................................................................................... 3
1.1 Current product Situation ..................................................................................................... 3
1.2 Company Situation .............................................................................................................. 3
1.3 Current Market Situation ...................................................................................................... 4
1.4 Consumer Situation.............................................................................................................. 6
1.5 Macro-Environment Analysis ............................................................................................... 7
2. SWOT Analysis ........................................................................................................................ 9
2.1 Strengths ............................................................................................................................. 9
2.2 Weakness ............................................................................................................................ 9
2.3 Opportunities....................................................................................................................... 9
2.4 Threats ................................................................................................................................ 9
3. Objectives .............................................................................................................................. 10
3.1 Financial Objectives:.......................................................................................................... 10
3.2 marketing objectives: ......................................................................................................... 11
4. Marketing Strategy:................................................................................................................. 12
4.1 Segmenting strategy:-......................................................................................................... 13
4.2 Targeting (Demand Estimation): ......................................................................................... 14
4.3 Positioning Strategy: .......................................................................................................... 15
4.4 Product Strategy:- .............................................................................................................. 17
4.5 Pricing Strategy: - .............................................................................................................. 17
4.6 Distribution Strategy: - ....................................................................................................... 17
4.7 Sales & Promotion Strategy: -............................................................................................. 18
5. Action Plans ........................................................................................................................ 19
6. Projected Profit and Loss Statement ...................................................................................... 20
7. Controls .............................................................................................................................. 21
Conclusion ................................................................................................................................. 22

3. 2

EXECUTIVE SUMMARY
The project report aims to do the feasibility analysis of marketing a new product in an untapped
market by online players. EVOK’s strategy to start providing furnishing solutions to corporates
has been developed keeping in mind their requirements.
The report assesses the current market situation to give an overall perspective of how well
conditioned the market is for such a product. It gives a detailed description of the product being
offered as well as evaluates few businesses to which it can be marketed and sold.
Cost plus pricing has been adopted to achieving 15-20% market share in long term and also to
be able to provide end-to-end solutions to customers.
The report makes an all-inclusive analysis through various traditional methods like SWOT and
PESTEL analysis. Distribution plan has been made to effectively cater to the platform and the
service needs of the clients. Specific marketing and promotional activities have been selected
keeping in mind its efficacy and revenue benefits. A detailed marketing plan along with the
budget has been developed.
Detailed promotional plan has been developed depending on the touch points of the consumers
to highlight product benefits, business alignment, and eventually brand advocacy of EVOK.
Revenue projections have been made based on market growth and product adoption
expectations. Control methods have been devised to keep a check on the implementation of the
overall plan.

4. 3


1. CURRENT MARKETING SITUATION
1.1 CURRENT PRODUCT SITUATION
Product description:
Evok Stores showcase over 20000+ world class contemporary products in Soft Furnishings
,Home Furniture, , Home Décor & Accessories, Wall Fashion, Modular Kitchens & provide a
good assortment of services which include Design to Build (Interior Design Services), Post
Care Services & Turnkey Installation. Evok through its project division will also work in close
association with interior designers, architects, builders & corporate community utilizing the
group networks & relationships for institutional, retail & projects business.
Target markets:
HHRPL has forayed into Specialty Home Interior business & will focus on Projects business
& Retail to serve B2C & B2B segments. It aspires to be the first-choice partner for customers
searching for stylish home interior solutions.
1.2 COMPANY SITUATION
Hindware Home Retail Private Ltd (HHRPL) has been incorporated as a 100% subsidiary of
HSIL to spearhead the Group's vision to evolve into a Total Home Solutions Enterprise.
Taking the same forward, HHRPL has entered the modern retail sector with Home Interiors
Specialty business, considering growing urbanization & residential landscapes, changing
consumer lifestyle, modern retail sector opportunities & the demand-supply scenarios.
HHRPL shall leverage the core strengths of the group in understanding diverse consumer &
retail distribution network, trade behavior , brand equity, global sourcing & cost effective
supply chain management, which are critical success factors in the sector.
The core vision of HHRPL is "to be the first choice partner of customers aspiring for Value
for Style home interior solutions"

5. 4

1.3 CURRENT MARKET SITUATION
Indian furniture market
The furniture &furnishings market in India is pegged to be around USD 20 billion, with
furniture and furnishing shaving almost an equal split in the market. Within the furniture market
of USD 10 billion, the residential sector accounts for a 70% share (USD 7 billion), and ~ 6%
of this is organized (USD ~400 million).

E-Commerce industry are likely to target:
2020: USD 1.3 billion Indian organised furniture market – target for online players
50% of the market is present in the top 6 cities and more than 80% in top 46 cities
Large items (beds, wardrobes and sofas) account for 80% of the market share
Woods and its derivation accounts for 60% of the market, rest being metal and plastics
9% of the market is made up of imported goods

These are some of the key long term challenges restricting the rapid expansion of offline
organized players in the Indian market. To put things in perspective, only 6% of the overall
Indian residential furniture market is organized, while the same for USA is around 30-40%.
By the time the e-tailing market started to grow in the developed countries, the furniture market
was already organized to the certain extent. Thus the e-tailing market made furniture players
to resort to the omni-channel route.
It is expected that India is going to leapfrog the brick and mortar organized channel and move
to the pure play online market. So while the organized market share in India and other
developed markets would look similar in the long run, omni-channel would have a limited
share in India. RedSeer expects online players to control 3.1% of the overall furniture retail
market (of USD 22 billion) by 2020.

6. 5

Online Furniture Market: Assessment of key competitive areas
Assessment Areas
Horizontal vs.
Vertical (1-5) And why
Sourcing 3:3
Growing share of MDF, plastic, metal and
non-hardwood products in online market by
2020 is likely to reduce importance of
Jodhpur as a sourcing hub. Horizontals with
the their wide reach of seller onboarding
teams can catch up with verticals
Quality Control and Warehouse 3:3
Horizontals are investing aggressively in
warehousing and QC capabilities. Also, as
online market become 20X by 2020, the
sheer high volumes to be managed will allow
horizontals to leverage their skills including
technical capabilities with handling high
volumes and compete effectively with
verticals
Line Haul 2:3
Going forward, horizontals can work equally
well with 3P logistics players to establish
robust furniture line haul operations.
Verticals are unlikely to gain a significant
competitive advantage from their current
line-haul tie-ups1
Delivery Hub management 3:2
Expertise in managing high delivery hub
volumes efficiently is likely to become the
key differentiator going forward.
Additionally, horizontals like Flipkart and
Amazon already have a network of 220+
delivery hubs across India each, which offers
them readymade infrastructure to build upon
for shipping furniture

7. 6

Online Furniture Market: Assessment of key competitive areas
Last mile delivery 3:3
Horizontals like Amazon and Flipkart would
be able to leverage their large appliance
delivery expertise for furniture delivery as
well when the category is launched.
Additionally, horizontal’s expertise in
managing last mile shipment at scale is likely
to help them stay competitive with verticals,
when furniture volumes shipped grow to
~10,000 units per day from 350-400
currently1
Customer – Brand recall 5:2
Unaided brand recall of horizontals is 3-4x
that of horizontals

1.4 CONSUMER SITUATION
Many manufacturers are providing different kinds of offering to give their customers a one-
stop-shopping environment. There has a been an increase in demand of commercial furniture’s
which primarily includes Desks, Chairs, Conference tables, Cabinets, Shelves and even
beddings in hospitality industry. Growing urbanization & residential landscapes, changing
consumer lifestyle and rise in modern retail sector opportunities have led to a rise in demand
of branded and stylish furniture.
Growth in IT and ITES segments has provided a major thrust to commercial furniture segment.
Customers are now aspiring for ‘Value for Style’ interior solutions. In the commercial space,
manufacturers focus on building a strong and reliable brand. The drivers and challenges to this
industry is as below:

8. 7

Drivers Challenges
Growth in Real Estate Centre Reduction in Timber Harvest
Growth in organized retail FDI regulations
Rising quality consciousness amongst
customers
Market restricted to cities only
Growth in IT and ITES sector
Reduction in import duties

1.5 MACRO-ENVIRONMENT ANALYSIS
PESTEL Analysis
In this analysis the main political, economic, social, and technological factors that affect the
furniture industry in general are identified. The main objective of this analysis is to assess the
main impact of the external factors on the business and to come up with actions to exploit the
points with positive effect and avoid the points with negative effect.
Political
• Current Government is boosting entrepreneurship and organized business sector and
thus high demand is expected in near future.
Economic
• Indian Economy is the fastest growing economy and thus assures a promising future
• Increase in FDI will also boost this industry
• Inflation rate will reflect on expenses
• Changes in Taxation policies

9. 8

Social
• Companies/People becoming brand and quality conscious.
• The number of company offices and hotels are increasing in all Tier 1 and Tier 2
cities,
• The blend of comfort and luxury in any product leads people to aspire for it. This
product offers the same. So premium, hotels and offices will be willing to provide the
same.
Technological
• Low cost advantage in India will help in reduction in cost
• Availability of automated and semi-automated machinery than can affect production
positively.
• Rapid development of finishing materials & accessories.
Environmental
• Reduction in Timber harvest a major issue.
• Due to National Forest Policy of India, ban on falling of trees in forests.
Legal
• On the production front, labour law compliance is a major consideration.
• Since the company is into production it needs to adhere to stipulations of Factories Act
and if contract labours are employed, then the Contract Labour Regulation Act (1970)
will be of concern.
• As the raw material comes from forest, company also need to adhere to various forest
acts.

10. 9

2. SWOT ANALYSIS
2.1 STRENGTHS
 Offers a variety of products in different price ranges, much suitable for today’s coming-up
corporates /start-ups
 End-to-end solution provider
 Leverage the already existing strong distribution network of Hindware for farther reach in
the market
 Offers ‘Design to build’ service where the customer will be provided end-to-end solution,
and not just a product
2.2 WEAKNESS
 Currently, the business model for EVOK is set for a B2C business, hence the focus is mostly
on not keeping large SKUs of different furniture
 Since EVOK deals mostly in ‘customized furniture’ , hence there is an unavailability of
standardized furniture, which is mostly required by corporates
 Many corporates prefer low cost rather than specially designed furniture
2.3 OPPORTUNITIES
 The market for corporate furnishing is mostly catered by unorganized players, hence there
is a huge untapped market for an online retailer like EVOK
 Levering the cash reserves of Hindware, EVOK could easily have some M&A with giant
local players to further accelerate its reach in the market
 Real estate sector is experiencing a rapid growth, which directly coincides with the number
of increasing corporates in today’s world, hence creating a good market opportunity
 To lower cost and also promote sales, procurement of sustainable products will be a great
strategy, since currently there are just a few small players dealing with sustainable furniture
2.4 THREATS
 There is a great competition in the market, from existing famous B2C players like
PepperFry, Urban Ladder
 The government regulations could post as a challenge to protect the local players from
decreased revenues
 There are a lot of low-cost substitutes available in the market
 There is a growing demand for greener products

11. 10

3. OBJECTIVES

3.1 FINANCIAL OBJECTIVES:
Year Sales Unit Cost Revenue EBITDA Market Share
2016 1000 100000 100 mil 25 mil 10%
2017 1100 100000 110 mil 27.5 mil 11%
2018 1265 90000 113.85 mil 28.46 mil 12.5%
2019 1518 90000 136.62 mil 34.15 mil 13.5%
2020 2000 90000 180 mil 45 mil 15%

Operational Cost Structure (For standard office modular conference table (1) and chair
(10) set):
The main operational cost for the product includes material and labour cost. Another major
component of the cost is the Selling, Distribution and General Administration Cost accounting
for 20% of unit cost.
Serial
No.
Cost Element
Unit Cost of each
element (In Rs ‘000)
1 Material 25
2 Production Cost 30
3
Selling, Distribution and General Administration
Cost
15
4 Promotion & Other Costs 5
5 Total Cost 75

12. 11

Pricing Method:
The pricing method used is COST PLUS PRICING where a margin is added to the cost to give a
final price. The margin is kept at 33.33 %. The higher margin would help in increased cash flow
in the initial year. In the first phase, we will be keeping the margin constant.

Particulars (In Rs ‘000)
Total Cost per unit 75
Margin (33.33%) 25
Unit Cost (Cost + margin) 100

3.2 MARKETING OBJECTIVES:
 Maximize profit margin
Objective of Evok is to provide good quality product and satisfy its customer by product. That
will allow us to charge premium price from customer as compared to our competitors. Thus
we will try to maximize our profit.

 Quality leadership
Evok has the responsibility to provide best quality to our customers. It sets main objective to
provide quality products that satiate the customer needs and requirements.

 Long term relationship with customer
We will try to provide superior value to our customer that we have promised. So we believe
it will help in generating loyalty in the minds of our customers and will also help in building
long term relationships.

 Communication objective
We will use different sources to attract their customer. The objective of Evok is to create
awareness in our customer about our new product. Evok also tells their customer that they
provide pure wooden furniture to their customers.

13. 12

Strategy marketing objectives:
 To grow and nurture a unique distribution system that provides product at low cost.
 To build efficient & vertically integrated manufacturing capabilities to gain lower cost
advantage.
 To increase advertisement.
 To redesign packaging to be more attractive and familiar.
 To make innovation in product so that it become portable and in convenience oriented
form.
 To improve product quality.
 To maintain positive and consistent growth each month.
 To experience an increase in new customers i.e. to ensure that our products have a high
trial rate that will help us to turn new customers into long term customers.
 Build brand equity at the markets we are catering to as well as within the supplier and
distribution networks.
4. MARKETING STRATEGY:
We focus upon a special kind of consumer, a person who wants high quality office furniture
customized to work coherently with modern technology including scanners, internet
connections, and other high-tech items. The corporates can be in the government institutes,
large corporations, small or medium business, or at a home office. The target market will be
the corporates who wants to have very fine furniture with the latest in technology, combined
with an old fashioned sense of fine woods and woodworking.
Our marketing strategy assumes that we will be needed to go into specialty channels to
address our target customer's needs. The product should be tied in with the high end quality
catalogues, because these catalogues will cater to our kind of customers.
The product strategy should also be based on quality, in this case the amalgam of technical
understanding with high quality woodworking and materials, and workmanship.
Our most important competitive edge will be our assembly strategy, which is based on
interlocking wood pieces of such a high quality that assembly will not only be a pleasure for
our customers; it will actually be a feature that enhances the sense of quality.

14. 13

Market Needs:
Our target market will need more than a simple office furniture. The need grows out of the
needs of personal computing, combined with office furniture i.e. keyboards should be at
correct height, of correct weight, uses proper channels for cables etc. The customer wants to
have all of that plus fine furniture. There is a need for high quality, wood and good
workmanship. We don't want to just sell office furniture, we want to sell office environment
and design, plus workmanship.
4.1 SEGMENTING STRATEGY:-
Through the market segmentation process, we will segregate the options so that our
marketing strategies are better targeted at each segment more effectively. We have used the
following method to operationalize the market segmentation process.
1. Defining market boundaries: Our market would consist of all the corporates like govt.
institutes, large corporations, small scale business and home offices, educational and
health institutions, banks, etc.
2. Defining segmentation variables: We have used the following segmentation variables
for our market:
 Demographic variables: Through this we gathered information on important
parameters of our target customers like company size etc.
 Operating variables: Through this we identified the usage habits of our
customers like whether they are willing to change the infrastructure and the
internal décor as per the latest trends or not.
 Purchasing approaches: Through this we tried to explore what criteria were
being considered important by our target customers while making purchase
decisions.
 Situational factors: Through this we tried to find out in what order lot do our
target customers normally place the orders and what possible applications
that they can put our products to use.
3. Collecting and analysing segmentation data: This is done through a cluster analysis of
the data that was gathered through the customer analysis questionnaire.

15. 14

4. Developing a profile of each segment: Based on the clusters formed, we develop a
profile of the various segments which we would be targeting.
4.2 TARGETING (DEMAND ESTIMATION):
Our segment definition is itself strategic. We are not intending to satisfy all users of office
furniture space intended using with personal computers, but, rather, those who are most
demanding. We definitely want to address the needs of the high-end buyer, which is willing
to pay for quality. But all these will be mainly corporates majorly present in South India. It will
have an advantage for us as our major presence is in South India.
We focus our marketing on five types of target consumers:
1. Major Corporates: There are around 15 million major corporate offices in India, and
that number is growing at 1.6% per year. We estimate the top 1% of that number,
150,000, as our market, and we suggest the number is growing at the same 1.6%
annually.
2. Small Business Enterprises: According to the most recent data available, there are
around 21 million small businesses and MSMEs (500 employees or fewer) in India.
That includes approximately 5.5 mil employers and 11 mil self-employed people. We
take the top 1% of 21 million, to make our potential market of 210,000. We estimate
growth at 2.5%, a composite of different sources.
3. Home Offices: According to Home Office Computing magazine, there are around 40
million home offices in India. Our market is the top 1% of those, 400,000, which we
estimate is growing at 5% per year.
4. Institutions: It includes banks, educational institutions, malls, restaurants, public
libraries and community halls.
5. Others: We will also sell to some buyers outside India and outside of these targeted
market segments. We estimate 100,000 other potential customers, a number that we
estimate will be growing at 5% per year.
We also seek the buyer who appreciates two main attributes: the high quality of furniture
workmanship and the excellence of design, with the understanding of technology and
ergonomics built inside.

16. 15

4.3 POSITIONING STRATEGY:
Our product is positioned very carefully: this is high-quality office furniture combining
workmanship and ergonomics for the customer who understands quality, is a user of high
technology equipment, and is willing to spend money on the best. Unlike the mainstream
products, we do not use laminates or cheap manufacturing technology.
Our positioning strategy is designed from the findings of the 3C analysis as below:
 Customer: Through our market research we found that our customers lacked quality
furniture. Also, we could see an untapped demand of supplying the customized
furniture designed exactly according to the needs of an office space or institutional
requirements.
 Channel: The environment is conducive for the launch of such a product. Convincing
the customers about the relevancy of our offering might be a challenge and hence
utilizing this information to gain insights into the details of purchase processes,
demographics & sale strategies, and customer issues.
 Competition: As our product is being offered, we have a lot of direct competition.
There are various office furniture solutions offered by competitors.
1 | Godrej Interio
Corporate HQ – Mumbai, Maharashtra
Business – Home and office furniture
It is one of the top furniture brands in India that has been dominating the market. It
is a strategic business unit of Godrej & Boyce manufacturing ltd. which is part of
Godrej unit. It offers vast range of furniture and interior products for home, office,
kitchen, hotels etc.
2 | USHA Lexus Furniture
Corporate HQ – Gurgaon, Haryana
Business – Home interior and furniture
It is a company of Shriram group that is acing furniture brand in India offering
exclusive range for the products for bedroom, kitchen and living room furniture.
3 | Zuari Furniture
Corporate HQ – Chennai, Tamilnadu

17. 16

Business – Home & office furniture
Zuari furniture is a unit of IFPL (Indian furniture Products limited) company of Birla
group that has more than 450 dealers’ network across the country. It has trained
staff and concepts to manufacture world class furniture which makes them highly
demanded furniture brand in India.
4 | Durian
Corporate HQ – Mumbai, Maharashtra
Business – Residential and office furniture
It is a well-known plywood brand launched with the first furniture retail showroom
in Ahmadabad in 1999. It is an ISO 9001 certified company having dense retail and
distribution network of furniture stores that offers vast range of furniture that
includes home and office.
5 | Damro
Corporate HQ – Chennai, Tamilnadu
Business – Residential and office furniture
It is a multinational furniture brand, that is having 50 stores in India. It offers a wide
range of modern furniture products. It is one of the highest selling furniture brand in
southern India including Kerala and Tamil Nadu states.
6 | Wipro Furniture
Corporate HQ – Bangalore, Karnataka
Business – Furniture and FMCG
It is a strategic business unit of Wipro ltd. and is a part of their FMCG group that has
presence in 40 countries worldwide. It deals in all kind of furniture brands including
home & office furniture.
7. Pepper fry: It is a furniture and home products’ e-commerce market place having
main office branch in Mumbai, India.
8. Fab furnish: It is an online market for retail of furniture, and home appliances. It is
headquartered in Gurgaon, NCR.

18. 17

9. Urban Ladder: It is an online furniture seller in Bangalore, India, present in 12 cities
across India.
We would be positioning our product as “Customized enhanced sense of quality” based on
the tenets of convenience, experience and luxury.
Value Proposition:-
Evok gives the discriminating traditional office space user, who cares about design and quality
furniture and quality of working environment, a combination of highest quality furniture and
latest technology, at a relatively high price.
4.4 PRODUCT STRATEGY:-
1. Features/ benefits analysis
2. Unique Selling Proposition
3. Product Development
4. Product packaging
4.5 PRICING STRATEGY: -
The objective of the pricing strategy falls in line with the business objective of achieving 15-
20% market share in long term for the company in new product segment of total automated
bathing solutions. We are also targeting a growth rate of 15% every year in sales volume post
implementation phase in order to achieve the desired market share as quoted above and
keeping in line with industry growth in sales units.
4.6 DISTRIBUTION STRATEGY: -

Distributors 155
Retailers 1300
Depots 21
Exclusive Distributors 60%
 Owing to this strong network it is well equipped to handle the channel distribution of
office furniture.

19. 18

 Owing to increased depots, distributors have now low inventory cycle and efficient
working capital hence making them loyal to Evok brand thus pushing sales from these
distributors.
 Evok has implemented ERP and a strong IT platform amongst its distribution network
to keep track of the market and hence leverage this to monitor the demand
requirement in all its regions.
 Active brand building and strong network of service centres has helped monitor
interactions and providing good service which is essential for augmenting the added
maintenance and customer support services.
 It also plans to increase its distribution network by addition of over 400 distributors
and 3000 retailers in the next 5 years covering almost every town in India with a
population of over 25000. This strong network would be difficult to replicate and
hence leverage channel sales for Evok at the same time protecting its market share.
4.7 SALES & PROMOTION STRATEGY: -
Advertising Strategy:
1.Print Media& Ads – industry-specific, trade and lifestyle magazines such as GQ, Vogue etc.
The print ads also serve to communicate and connect to the customers about importance of
quality durable furniture.
2.Visual Media (TV) – Product features demonstrated through sponsored Programmes, ads,
Company executives’ interviews.
Sales Promotion Strategy:
1.PoP Marketing – Better Point of Purchase (PoP) marketing in the form of better and stylized
catalogues and brochures at the dealers and experience centres
2.Gifts & Give away – Evok can also come up with Gifts or some goodies to be given to dealers
or retailers on purchase such as gift/discount coupons etc.
3.Dealer Promotion Schemes – Coming up with dealer promotion schemes wherein it can
give some sort of incentives such as foreign trip or complete office makeover on continuously
achieving new targets.

20. 19

Internet Marketing Strategy:
We chose our preferred social media channels based upon product specific needs on how B2B
Technology Buyers use social media.
1. Online Forums
2. Virtual Trade Shows
3. Ratings & Reviews (Digg, Delicious, etc.)
4. Wikis
5. Private Online Community Sites
6. Open Social Networks - LinkedIn and Face book
7. Interactive and 3D Demonstrations
8. Podcasts (Downloadable Media, Audio & Video)
9. Blogs – Word Press, BlogSpot
10. Online Advertising
11. Online Video
12. Micro Blogs – Twitter
5. ACTION PLANS

Business Objectives Marketing Objectives Tactic Used
Achieve Sales of
10,000 units in 2016
To create an awareness about
the product among the
distribution companies
Awareness through print media & TV
ads about its quality and durability
To initiate a change in the
attitude of the B2B client
towards the modular office
furniture
Justify the costs to aggressively market
the product to the B2B client through
company presentations
Achieve sales
growth of 10% in
2017
To maximize reach and get as
many long term contracts for
supplies from major corporates
and institutions
Long term contracts are most suited for
this product. Once adopted and
implemented, the product will become a
standard in all tier 1 cities & some tier 2
cities. Sales pitch and tenders should be
aggressively bid yet not to allow hurting
the bottom line.

21. 20

Achieve Market
Share of 13.5% by
maintaining the
CAGR of 15% YoY
for next 2 years
Build a consistent brand image
and positioning and
consequently target the
institutional segment
Competitors are bound to decline the
prices competitively hence a strong
brand image becomes very important to
prevent them from making a dent in
sales.
Become a market
leader in office
furniture space by
2020 (15% market
share)
Ensure product modifications
and customizations according
to industry needs
Conducting Needs Gap analysis &
incorporating newer technological
developments into the products to keep
it competitive.
Have established systems in
place to ensure faster go-to-
market time. Develop and
maintain long term client
engagement and hence
relationships.
New developments should be futuristic
and anticipate the changes above. Their
time to market should be fast so that, the
core competency of superior technology
remains.

6. PROJECTED PROFIT AND LOSS STATEMENT
Table 1: Projected Profit and Loss Statement
Particulars 2016 2017 2018 2019 2020
Sales 1,000 1,100 1,265 1,518 2,000
Unit Price ₹ 1,00,000 ₹ 1,00,000 ₹ 90,000 ₹ 90,000 ₹ 90,000
Revenue
₹
10,00,00,000
₹
11,00,00,000
₹
11,38,50,000
₹
13,66,20,000
₹
18,00,00,000
Materials
₹
2,50,00,000
₹
2,75,00,000
₹
3,16,25,000
₹
3,79,50,000
₹
5,00,00,000
Production Cost
₹
3,00,00,000
₹
3,30,00,000
₹
3,79,50,000
₹
4,55,40,000
₹
6,00,00,000
S, D, G & A Expenses
₹
1,50,00,000
₹
1,65,00,000
₹
1,89,75,000
₹
2,27,70,000
₹
3,00,00,000
Promotion & Other
Costs ₹ 50,00,000 ₹ 55,00,000 ₹ 63,25,000 ₹ 75,90,000
₹
1,00,00,000
Total Cost
₹
7,50,00,000
₹
8,25,00,000
₹
9,48,75,000
₹
11,38,50,000
₹
15,00,00,000
PBT
₹
2,50,00,000
₹
2,75,00,000
₹
1,89,75,000
₹
2,27,70,000
₹
3,00,00,000
Tax (@ 32.445%) ₹ 81,11,250 ₹ 89,22,375 ₹ 61,56,439 ₹ 73,87,727 ₹ 97,33,500
PAT
₹
1,68,88,750
₹
1,85,77,625
₹
1,28,18,561
₹
1,53,82,274
₹
2,02,66,500
Assumptions
 The Tax Rate is taken as the prevailing tax rate, which is = (30*1.05*1.03) = 32.445%
 The Company has not taken any debt. The project will be equity financed. So there is
no Interest Expense.

22. 21

 All the costs are linked to the no. of units sold.
Analysis
 The margin has reduced in year 2018 and in subsequent years. This is because the unit
price has been reduced from 1,00,000 rupees to 90,000 rupees. Effective margin after
price reduction= (Unit Price/Unit Cost)-1=(90,000/75,000)-1= 20% margin. Hence the
margins will reduce from 33.33% to 20%. This strategy is aimed at increasing the sales
and enter into new markets because of attractive pricing.
 Due to the above reasons, there has been a 31% decrease in PBIT and PAT in 2018
(which is the first year of Phase 2). But the subsequent years will improve the PAT as
the sales will increase. In phase 2 the company expects sales in tier 2 cities along with
tier 1 (which was covered in phase 1)
 The PAT Margin that the company is getting is highest in the first two years at 16.89%.
After that it falls to 11.26% in 2018, 2019, and 2020.

7. CONTROLS
The main aim here is to monitor the plan and to ensure that we are on the track to achieve the
target. Following will be some control strategies to be implemented throughout the project.
7.1. Annual Plan control
The forecasted figures for sales and costs will be used to set annual plans for various
marketing activities. For each activity the expected result, time constraint and resources
allocated will be clearly mentioned. At the end of the year the achieved figures will be
compared against the projected ones. The deviation will be calculated and corrective
measures would be formulated.
The parameters to be analyses would be
a. Sales Figure
b. Market Share
c. Total Cost
d. Promotion to sales ratio
e. Profit Margins(PAT and EBIT)
f. Asset Turnover Ratio

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7.2. Marketing Efficiency Control
This will be a measure of how effective our marketing plan has been. We will analyse various
parameters like
a. Advertising Efficiency
b. Sales Force Efficiency
c. Distribution Channel Efficiency
d. Customer Relationship Efficiency
e. After sales service/Customer Support Efficiency
CONCLUSION
EVOK is one of India’s leading furnishing solution provider. They will leverage the core
strengths of the group (HSIL) in understanding diverse consumer & trade behaviour, retail
distribution network, brand equity, global sourcing & cost effective supply chain management,
which are critical success factors in this sector. EVOK through its project division will also
work in close association with architects, interior designers, builders & corporate community
utilizing the group networks & relationships for retail, institutional & projects business.