A00036

Indian Institute of Management Ahmedabad March 29, 2016

B2B Segmentation Exercise

Group A: Sigma Motor Company (SMC)
Instructions

An extensive market opportunity analysis in the Middle East and North Africa (MENA) and
Asia-Pacific Region (APR) reveals a very good potential for next generation efficient electric
motor business. Your group has decided to enter the electric motor business to exploit this
opportunity.

For the purpose of this exercise, you can assume that buyers in MENA and APR are similar to
fellow participants sitting inside the class. Thus, your identified target segment will comprise of
your fellow participants sitting in the classroom who are representing respective firms in
MENA and APR. Though all the firms operate in Chemical Industry, some of the firms follow
centralized purchasing policy and some follow decentralized purchasing policy. The centralized
policy firms may buy a maximum of 100 motors but such firms would also like to have some
added features such as additional warranty or add-on services covered in same price. Firms
with decentralized policy may buy a maximum of 50 motors but they do not press for add-on
services.

This being a new venture, your firm has initially hired a contract manufacturer for the supply of
electric motors. However while entering this business, you have to take decisions about a
number of alternatives with regard to the specifications/characteristics of electric motor to be
introduced in the market. Because of the resource constraints, you can introduce only one type
of electric motor which is 5 Horse Power (HP) electric motor, in the market. Being a first
generation business, the success of this electric motor business is crucial for your future
aspirations and expansion plans. For this, you need to tactfully decide about the motor
attributes, quantity, and the other factors like region and type of firms.

You also have to make a decision about the selling price of your product i.e. price at which you
will offer the 5 HP electric motor. After receiving the price quote from the contract
manufacturer and factoring in your distribution and marketing costs, your calculations show
that you will have to incur total cost (production, distribution and marketing costs) of Rs. 20,000
for the proposed 5 HP electric motor. The opportunity analysis done earlier has indicated that
in this sector, the margins are in the range of 15 to 40 per cent over the total cost.

Prepared by Professor Bipul Kumar, Indian Institute of Management, Indore and Professor Abhishek,
Indian Institute of Management, Ahmedabad.
This exercise is inspired from MAR0399EX, developed by Professor Sanjeev Tripathi and Professor
Abhishek, Indian Institute of Management, Ahmedabad.
Cases of the Indian Institute of Management, Ahmedabad, are prepared as a basis for classroom
discussion. They are not designed to present illustrations of either correct or incorrect handling of
administrative problems.
© 2016 by the Indian Institute of Management, Ahmedabad.
This document is authorized for use only in Prof. Rajveer Verma's Executive MBA 2023-25/ B2B Marketing at Indian Institute of Management - Ranchi from Sep 2024 to Mar 2025.
 2 of 19 A00036

Please note that the firms would buy the motors only if all the requirements match. Note that
each unsold unit as well as each demand you cannot satisfy, implies cost. You have also learnt
that some other new firms also have identified MENA and APR as target markets and they are
also planning to launch a new brand of 5 HP electric motor in these markets.

You realize that you need to take the following important decisions before the production and
launch of the electric motors:

1. Whether the primary benefit projected for the 5 HP electric motor will be:
(a) High power factor (Above 0.8) with manual operation (HPFM)
(b) Low power factor (Below 0.6) with auto operation (LPFA)
(c) Medium power factor (Between 0.6 and 0.8) with panel board (MPFP)

2. Whether the motor would be:

(a) Flame proof (FP)
(b) Weather proof (WP)

3. Whether the target buyer firms would be:

(a) Centralized Purchasers
(b) Decentralized Purchasers

4. Whether the target region would be

(a) Middle East and North Africa (MENA)
(b) Asia-Pacific Region (APR)

5. How many units to make for launching the motors?

(Please specify the numbers separately if your target buyers are both Centralized Purchasers
and Decentralized Purchasers)

6. Selling price of 5 HP electric motor

Please indicate your choices (Please specify ONE alternative for each decided by your company)

1. Primary benefit ……………………………………………….

2. Flame proof (FP) /Weather proof (WP) ……………………………………………….

3. Centralized Purchaser/ Decentralized ……………………………………………….

Purchaser/ Both

4. MENA / Asia-Pacific ……………………………………………….

5. No. of units ……………………………………………….

6. Selling price ……………………………………………….

Please Note that:

This document is authorized for use only in Prof. Rajveer Verma's Executive MBA 2023-25/ B2B Marketing at Indian Institute of Management - Ranchi from Sep 2024 to Mar 2025.
 3 of 19 A00036

• Centralized buying: A firm resorts to centralized buying when it can standardize the
product for all locations, it has concern for long-term supply availability, and procurement
needs specialized purchasing skill and knowledge.

• Decentralized buying: A firm resorts to decentralized buying when it has ability to

customize the product, it has user-unique requirements, and it has ability to manage local
sourcing.

• Flame proof motors: These motors are designed to contain an explosion or flame produced
within them due to a spark, explosion or any other condition.

• Weather proof motors: These motors, when exposed, are designed to withstand harsh
weather conditions such as extreme heat, cold and rain.

• Power Factor: Usually in an AC circuit, power factor is defined as the ratio of the real power
that is used to do work and the apparent power which passes through the circuit. The
power factor ranges from 0 to 1.

• Manual Operation/ Auto Operations: In manual operations, the motor is operated by an

operator whereas in auto operation an electrically designed system takes care of the
operation of the motor such as the process of switching on or off.

• Panel Board: It is a board consisting of indicators, start/stop button and other electrical
systems required for operations of the motor.

This document is authorized for use only in Prof. Rajveer Verma's Executive MBA 2023-25/ B2B Marketing at Indian Institute of Management - Ranchi from Sep 2024 to Mar 2025.
 4 of 19 A00036

Group B: Omega Motor Company (OMC)

Instructions

An extensive market opportunity analysis in the Middle East and North Africa (MENA) and
Asia-Pacific Region (APR) reveals a very good potential for next generation efficient electric
motor business. Your group has decided to enter the electric motor business to exploit this
opportunity.

For the purpose of this exercise, you can assume that buyers in MENA and APR are similar to
fellow participants sitting inside the class. Thus, your identified target segment will comprise of
your fellow participants sitting in the classroom who are representing respective firms in
MENA and APR. Though all the firms operate in Chemical Industry, some of the firms follow
centralized purchasing policy and some follow decentralized purchasing policy. The centralized
policy firms may buy a maximum of 100 motors but such firms would also like to have some
added features such as additional warranty or add-on services covered in same price. Firms
with decentralized policy may buy a maximum of 50 motors but they do not press for add-on
services.

This being a new venture, your firm has initially hired a contract manufacturer for the supply of
electric motors. However while entering this business, you have to take decisions about a
number of alternatives with regard to the specifications/characteristics of electric motor to be
introduced in the market. Because of the resource constraints, you can introduce only one type
of electric motor which is 5 Horse Power (HP) electric motor, in the market. Being a first
generation business, the success of this electric motor business is crucial for your future
aspirations and expansion plans. For this, you need to tactfully decide about the motor
attributes, quantity and the other factors like region and type of firms.

You also have to make a decision about the selling price of your product i.e. price at which you
will offer the 5 HP electric motor. After receiving the price quote from the contract
manufacturer and factoring in your distribution and marketing costs, your calculations show
that you will have to incur total cost (production, distribution and marketing costs) of Rs. 20,000
for the proposed 5 HP electric motor. The opportunity analysis done earlier has indicated that
in this sector, the margins are in the range of 15 to 40 per cent over the total cost.

Please note that the firms would buy the motors only if all the requirements match. Note that
each unsold unit as well as each demand you cannot satisfy, implies cost. You have also learnt
that some other new firms also have identified MENA and APR as target markets and they are
also planning to launch a new brand of 5 HP electric motor in these markets.

You realize that you need to take the following important decisions before the production and
launch of the electric motors:

1. Whether the primary benefit projected for the 5 HP electric motor will be:
(a) High power factor (Above 0.8) with manual operation (HPFM)
(b) Low power factor (Below 0.6) with auto operation (LPFA)
(c) Medium power factor (Between 0.6 and 0.8) with panel board (MPFP)

This document is authorized for use only in Prof. Rajveer Verma's Executive MBA 2023-25/ B2B Marketing at Indian Institute of Management - Ranchi from Sep 2024 to Mar 2025.
 5 of 19 A00036

2. Whether the motor would be:

(a) Flame proof (FP)
(b) Weather proof (WP)

3. Whether the target buyer firms would be:

(a) Centralized Purchasers
(b) Decentralized Purchasers

4. Whether the target region would be

(a) Middle East and North Africa (MENA)
(b) Asia-Pacific Region (APR)

5. How many units to make for launching the motors?

(Please specify the numbers separately if your target buyers are both Centralized Purchasers
and Decentralized Purchasers)

6. Selling price of 5 HP electric motor

Please indicate your choices (Please specify ONE alternative for each decided by your company)

1. Primary benefit ……………………………………………….

2. Flame proof (FP) /Weather proof (WP) ……………………………………………….

3. Centralized Purchaser/ Decentralized ……………………………………………….

Purchaser/ Both

4. MENA / Asia-Pacific ……………………………………………….

5. No. of units ……………………………………………….

6. Selling price ……………………………………………….

Please Note that:

• Centralized buying: A firm resorts to centralized buying when it can standardize the
product for all locations, it has concern for long-term supply availability, and procurement
needs specialized purchasing skill and knowledge.

• De-centralized buying: A firm resorts to decentralized buying when it has ability to

customize the product, it has user-unique requirements, and it has ability to manage local
sourcing.

• Flame proof motors: These motors are designed to contain an explosion or flame produced
within them due to a spark, explosion or any other condition.

This document is authorized for use only in Prof. Rajveer Verma's Executive MBA 2023-25/ B2B Marketing at Indian Institute of Management - Ranchi from Sep 2024 to Mar 2025.
 6 of 19 A00036

• Weather proof motors: These motors, when exposed, are designed to withstand harsh
weather conditions such as extreme heat, cold and rain.

• Power Factor: Usually in an AC circuit, power factor is defined as the ratio of the real power
that is used to do work and the apparent power which passes through the circuit. The
power factor ranges from 0 to 1.

• Manual Operation/ Auto Operations: In manual operations, the motor is operated by an

operator whereas in auto operation an electrically designed system takes care of the
operation of the motor such as the process of switching on or off.

• Panel Board: It is a board consisting of indicators, start/stop button and other electrical
systems required for operations of the motor.

This document is authorized for use only in Prof. Rajveer Verma's Executive MBA 2023-25/ B2B Marketing at Indian Institute of Management - Ranchi from Sep 2024 to Mar 2025.
 7 of 19 A00036

Group C: Theta Motor Company (TMC)

Instructions

An extensive market opportunity analysis in the Middle East and North Africa (MENA) and
Asia-Pacific Region (APR) reveals a very good potential for next generation efficient electric
motor business. Your group has decided to enter the electric motor business to exploit this
opportunity.

For the purpose of this exercise, you can assume that buyers in MENA and APR are similar to
fellow participants sitting inside the class. Thus, your identified target segment will comprise of
your fellow participants sitting in the classroom who are representing respective firms in
MENA and APR. Though all the firms operate in Chemical Industry, some of the firms follow
centralized purchasing policy and some follow decentralized purchasing policy. The centralized
policy firms may buy a maximum of 100 motors but such firms would also like to have some
added features such as additional warranty or add-on services covered in same price. Firms
with decentralized policy may buy a maximum of 50 motors but they do not press for add-on
services.

This being a new venture, your firm has initially hired a contract manufacturer for the supply of
electric motors. However while entering this business, you have to take decisions about a
number of alternatives with regard to the specifications/characteristics of electric motor to be
introduced in the market. Because of the resource constraints, you can introduce only one type
of electric motor which is 5 Horse Power (HP) electric motor, in the market. Being a first
generation business, the success of this electric motor business is crucial for your future
aspirations and expansion plans. For this, you need to tactfully decide about the motor
attributes, quantity and the other factors like region and type of firms.

You also have to make a decision about the selling price of your product i.e. price at which you
will offer the 5 HP electric motor. After receiving the price quote from the contract
manufacturer and factoring in your distribution and marketing costs, your calculations show
that you will have to incur total cost (production, distribution and marketing costs) of Rs. 20,000
for the proposed 5 HP electric motor. The opportunity analysis done earlier has indicated that
in this sector, the margins are in the range of 15 to 40 per cent over the total cost.

Please note that the firms would buy the motors only if all the requirements match. Note that
each unsold unit as well as each demand you cannot satisfy, implies cost. You have also learnt
that some other new firms also have identified MENA and APR as target markets and they are
also planning to launch a new brand of 5 HP electric motor in these markets.

You realize that you need to take the following important decisions before the production and
launch of the electric motors:

1. Whether the primary benefit projected for the 5 HP electric motor will be:
(a) High power factor (Above 0.8) with manual operation (HPFM)
(b) Low power factor (Below 0.6) with auto operation (LPFA)
(c) Medium power factor (Between 0.6 and 0.8) with panel board (MPFP)

2. Whether the motor would be:

This document is authorized for use only in Prof. Rajveer Verma's Executive MBA 2023-25/ B2B Marketing at Indian Institute of Management - Ranchi from Sep 2024 to Mar 2025.
 8 of 19 A00036

(a) Flame proof (FP)

(b) Weather proof (WP)

3. Whether the target buyer firms would be:

(a) Centralized Purchasers
(b) Decentralized Purchasers

4. Whether the target region would be

(a) Middle East and North Africa (MENA)
(b) Asia-Pacific Region (APR)

5. How many units to make for launching the motors?

(Please specify the numbers separately if your target buyers are both Centralized Purchasers
and Decentralized Purchasers)

6. Selling price of 5 HP electric motor

Please indicate your choices (Please specify ONE alternative for each decided by your company)

1. Primary benefit ……………………………………………….

2. Flame proof (FP) /Weather proof (WP) ……………………………………………….

3. Centralized Purchaser/ Decentralized ……………………………………………….

Purchaser/ Both

4. MENA / Asia-Pacific ……………………………………………….

5. No. of units ……………………………………………….

6. Selling price ……………………………………………….

Please Note that:

• Centralized buying: A firm resorts to centralized buying when it can standardize the
product for all locations, it has concern for long-term supply availability, and procurement
needs specialized purchasing skill and knowledge.

• De-centralized buying: A firm resorts to decentralized buying when it has ability to

customize the product, it has user-unique requirements, and it has ability to manage local
sourcing.

• Flame proof motors: These motors are designed to contain an explosion or flame produced
within them due to a spark, explosion, or any other condition.

• Weather proof motors: These motors, when exposed, are designed to withstand harsh
weather conditions such as extreme heat, cold and rain.

This document is authorized for use only in Prof. Rajveer Verma's Executive MBA 2023-25/ B2B Marketing at Indian Institute of Management - Ranchi from Sep 2024 to Mar 2025.
 9 of 19 A00036

• Power Factor: Usually in an AC circuit, power factor is defined as the ratio of the real power
that is used to do work and the apparent power which passes through the circuit. The
power factor ranges from 0 to 1.

• Manual Operation/ Auto Operations: In manual operations, the motor is operated by an

operator whereas in auto operation an electrically designed system takes care of the
operation of the motor such as the process of switching on or off.

• Panel Board: It is a board consisting of indicators, start/stop button and other electrical
systems required for operations of the motor.

This document is authorized for use only in Prof. Rajveer Verma's Executive MBA 2023-25/ B2B Marketing at Indian Institute of Management - Ranchi from Sep 2024 to Mar 2025.
 10 of 19 A00036

Instructions for Observers of SMC/OMC/TMC

You are observing the members of SMC/OMC/TMC making decisions on various aspects of
the launch of the product of their company. You are not a participant in the decision making,
but just a silent observer. You should be in the proximity of the group (but not inside the
group’s circle) so that you can listen to what they are discussing and make notes on the progress
of discussion.

They are taking a decision on the following aspects

• Whether the primary benefit projected for the 5 HP electric motor will be:
(a) High power factor (Above 0.8) with manual operation (HPFM)
(b) Low power factor (Below 0.6) with auto operation (LPFA)
(c) Medium power factor (Between 0.6 and 0.8) with panel board (MPFP)

• Whether the motor would be:

(a) Flame proof (FP)
(b) Weather proof (WP)

• Whether the target buyer firms would be:

(a) Centralized Purchasers
(b) Decentralized Purchasers

• Whether the target region would be

(a) Middle East and North Africa (MENA)
(b) Asia-Pacific Region (APR)

• How many units to make for launching the motors?

• Selling price of 5 HP electric motor

You need to note down your observations regarding

 What factors did the members of SMC/OMC/TMC consider in making their choices?

 Did they think/discuss about attributes other than the ones given to them?

 Did they think/discuss about customers’ expectations?

 Did anybody talk about finding out customers’ requirements/expectations by any means?

 Did they discuss about/consider the presently available offerings in the market?

 Did they take into account the competitors (present and future) in their decision about
product offering? If yes, in which aspects (price, quantity, attributes, etc.)?

 Anything else worth reporting about the decision?

This document is authorized for use only in Prof. Rajveer Verma's Executive MBA 2023-25/ B2B Marketing at Indian Institute of Management - Ranchi from Sep 2024 to Mar 2025.
 11 of 19 A00036

Note: Under no circumstances, should you talk to the members of SMC/OMC/TMC and
participate in their discussion process.

Please Note that:

• Centralized buying: A firm resorts to centralized buying when it can standardize the
product for all locations, it has concern for long-term supply availability, and procurement
needs specialized purchasing skill and knowledge. These firms may buy a maximum of 100
motors but such firms would also like to have some added features such as additional
warranty or add-on services covered in same price.

• De-centralized buying: A firm resorts to decentralized buying when it has ability to

customize the product, it has user-unique requirements, and it has ability to manage local
sourcing. These firms may buy a maximum of 50 motors but they do not pose requirements
for add-on services.

• Flame proof motors: These motors are designed to contain an explosion or flame produced
within them due to a spark, explosion or any other condition.

• Weather proof motors: These motors, when exposed, are designed to withstand harsh
weather conditions such as extreme heat, cold and rain.

• Power Factor: Usually in an AC circuit, power factor is defined as the ratio of the real power
that is used to do work and the apparent power which passes through the circuit. The
power factor ranges from 0 to 1.

• Manual Operation/ Auto Operations: In manual operations, the motor is operated by an

operator whereas in auto operation an electrically designed system takes care of the
operation of the motor such as the process of switching on or off.

• Panel Board: It is a board consisting of indicators, start/stop button, and other electrical
systems required for operations of the motor.

This document is authorized for use only in Prof. Rajveer Verma's Executive MBA 2023-25/ B2B Marketing at Indian Institute of Management - Ranchi from Sep 2024 to Mar 2025.
 12 of 19 A00036

Brief and choice sheet for Customers

You represent a Chemical firm and you are located in Middle East and North Africa (MENA)
region. Industry analysts indicate that you follow centralized purchasing procedures♣. You
require 5 HP motors for various uses, besides other equipment. You have your own
specifications and other requirements with regard to the purchasing of such motors. The
supplier company has used these attributes, as specified earlier by you, to develop and launch
new brands of 5 HP electric motors. Based on your requirements and attributes of the motors
available, please indicate your preferences for 5 HP motors.

Once the representatives of electric motor companies present their market offerings, based on
whether or not it matches your preferences, you need to express whether you will buy their
product or not. If the offerings by the companies exactly match your indicated preference, only
then will you buy the motors; otherwise not.

Preferences regarding 5 HP electric motor

1. Whether the primary benefit projected for the 5 HP electric motor will be:
(a) High power factor (Above 0.8) with manual operation (HPFM)
(b) Low power factor (Below 0.6) with auto operation (LPFA)
(c) Medium power factor (Between 0.6 and 0.8) with panel board (MPFP)

2. Whether the motor would be:

(a) Flame proof (FP)
(b) Weather proof (WP)

Please write down your preferences for the motors:

a. Primary benefit ……………………

b. Flame proof (FP) or Weather proof (WP) ……………………

c. Number of Units (Maximum 100) ……………………

IMPORTANT: You are not allowed to change your choices once you finalize them.

♣
Centralized purchasing procedure means that you can standardize the product for all
locations, you are concerned about long-term supply availability, and procurement needs
specialized purchasing skill and knowledge. You may buy a maximum of 100 motors but you
would also like to have some added features such as additional warranty or add-on services
covered in same price.

Please Note that:

• Flame proof motors: These motors are designed to contain an explosion or flame produced
within them due to a spark, explosion, or any other condition.

This document is authorized for use only in Prof. Rajveer Verma's Executive MBA 2023-25/ B2B Marketing at Indian Institute of Management - Ranchi from Sep 2024 to Mar 2025.
 13 of 19 A00036

• Weather proof motors: These motors, when exposed, are designed to withstand harsh
weather conditions such as extreme heat, cold and rain.

• Power Factor: Usually in an AC circuit, power factor is defined as the ratio of the real power
that is used to do work and the apparent power which passes through the circuit. The
power factor ranges from 0 to 1.

• Manual Operation/ Auto Operations: In manual operations, the motor is operated by an

operator whereas in auto operation an electrically designed system takes care of the
operation of the motor such as the process of switching on or off.

• Panel Board: It is a board consisting of indicators, start/stop button and other electrical
systems required for operations of the motor.

This document is authorized for use only in Prof. Rajveer Verma's Executive MBA 2023-25/ B2B Marketing at Indian Institute of Management - Ranchi from Sep 2024 to Mar 2025.
 14 of 19 A00036

Brief and choice sheet for Customers

You represent a Chemical firm and you are located in Middle East and North Africa (MENA)
region. Industry analysts indicate that you follow decentralized purchasing procedures♣. You
require 5 HP motors for various uses, besides other equipment. You have your own
specifications and other requirements with regard to the purchasing of such motors. The
supplier company has used these attributes, as specified earlier by you, to develop and launch
new brands of 5 HP electric motors. Based on your requirements and attributes of the motors
available, please indicate your preferences for 5 HP motors.

Once the representatives of electric motor companies present their market offerings, based on
whether or not it matches your preferences, you need to express whether you will buy their
product or not. If the offerings by the companies exactly match your indicated preference, only
then will you buy the motors; otherwise not.

Preferences regarding 5 HP electric motor

3. Whether the primary benefit projected for the 5 HP electric motor will be:
(a) High power factor (Above 0.8) with manual operation (HPFM)
(b) Low power factor (Below 0.6) with auto operation (LPFA)
(c) Medium power factor (Between 0.6 and 0.8) with panel board (MPFP)

4. Whether the motor would be:

(a) Flame proof (FP)
(b) Weather proof (WP)

Please write down your preferences for the motors:

d. Primary benefit ……………………

e. Flame proof (FP) or Weather proof (WP) ……………………

f. Number of Units (Maximum 50) ……………………

IMPORTANT: You are not allowed to change your choices once you finalize them.

♣
Decentralized purchasing procedure means you have the ability to customize the product,
you have user-unique requirements, and you have ability to manage local sourcing. You may
buy a maximum of 50 motors but you do not pose requirements for add-on services.

Please Note that:

• Flame proof motors: These motors are designed to contain an explosion or flame produced
within them due to a spark, explosion, or any other condition.

• Weather proof motors: These motors, when exposed, are designed to withstand harsh
weather conditions such as extreme heat, cold and rain.

This document is authorized for use only in Prof. Rajveer Verma's Executive MBA 2023-25/ B2B Marketing at Indian Institute of Management - Ranchi from Sep 2024 to Mar 2025.
 15 of 19 A00036

• Power Factor: Usually in an AC circuit, power factor is defined as the ratio of the real power
that is used to do work and the apparent power which passes through the circuit. The
power factor ranges from 0 to 1.

• Manual Operation/ Auto Operations: In manual operations, the motor is operated by an

operator whereas in auto operation an electrically designed system takes care of the
operation of the motor such as the process of switching on or off.

• Panel Board: It is a board consisting of indicators, start/stop button and other electrical
systems required for operations of the motor.

This document is authorized for use only in Prof. Rajveer Verma's Executive MBA 2023-25/ B2B Marketing at Indian Institute of Management - Ranchi from Sep 2024 to Mar 2025.
 16 of 19 A00036

Brief and choice sheet for Customers

You represent a Chemical firm and you are located in Asia-Pacific region (APR). Industry
analysts indicate that you follow centralized purchasing procedures♣. You require 5 HP motors
for various uses, besides other equipment. You have your own specifications and other
requirements with regard to the purchasing of such motors. The supplier company has used
these attributes, as specified earlier by you, to develop and launch new brands of 5 HP electric
motors. Based on your requirements and attributes of the motors available, please indicate your
preferences for 5 HP motors.

Once the representatives of electric motor companies present their market offerings, based on
whether or not it matches your preferences, you need to express whether you will buy their
product or not. If the offerings by the companies exactly match your indicated preference, only
then will you buy the motors; otherwise not.

Preferences regarding 5 HP electric motor

5. Whether the primary benefit projected for the 5 HP electric motor will be:
(a) High power factor (Above 0.8) with manual operation (HPFM)
(b) Low power factor (Below 0.6) with auto operation (LPFA)
(c) Medium power factor (Between 0.6 and 0.8) with panel board (MPFP)

6. Whether the motor would be:

(a) Flame proof (FP)
(b) Weather proof (WP)

Please write down your preferences for the motors:

g. Primary benefit ……………………

h. Flame proof (FP) or Weather proof (WP) ……………………

i. Number of Units (Maximum 100) ……………………

IMPORTANT: You are not allowed to change your choices once you finalize them.

♣
Centralized purchasing procedure means that you can standardize the product for all
locations, you are concerned about long-term supply availability, and procurement needs
specialized purchasing skill and knowledge. You may buy a maximum of 100 motors but you
would also like to have some added features such as additional warranty or add-on services
covered in same price.

Please Note that:

• Flame proof motors: These motors are designed to contain an explosion or flame produced
within them due to a spark, explosion or any other condition.

This document is authorized for use only in Prof. Rajveer Verma's Executive MBA 2023-25/ B2B Marketing at Indian Institute of Management - Ranchi from Sep 2024 to Mar 2025.
 17 of 19 A00036

• Weather proof motors: These motors, when exposed, are designed to withstand harsh
weather conditions such as extreme heat, cold and rain.

• Power Factor: Usually in an AC circuit, power factor is defined as the ratio of the real power
that is used to do work and the apparent power which passes through the circuit. The
power factor ranges from 0 to 1.

• Manual Operation/ Auto Operations: In manual operations, the motor is operated by an

operator whereas in auto operation an electrically designed system takes care of the
operation of the motor such as the process of switching on or off.

• Panel Board: It is a board consisting of indicators, start/stop button and other electrical
systems required for operations of the motor.

This document is authorized for use only in Prof. Rajveer Verma's Executive MBA 2023-25/ B2B Marketing at Indian Institute of Management - Ranchi from Sep 2024 to Mar 2025.
 18 of 19 A00036

Brief and choice sheet for Customers

You represent a Chemical firm and you are located in Asia-Pacific region (APR). Industry
analysts indicate that you follow decentralized purchasing procedures♣. You require 5 HP
motors for various uses, besides other equipment. You have your own specifications and other
requirements with regard to the purchasing of such motors. The supplier company has used
these attributes, as specified earlier by you, to develop and launch new brands of 5 HP electric
motors. Based on your requirements and attributes of the motors available, please indicate your
preferences for 5 HP motors.

Once the representatives of electric motor companies present their market offerings, based on
whether or not it matches your preferences, you need to express whether you will buy their
product or not. If the offering by the companies exactly match your indicated preference, only
then will you buy the motors; otherwise not.

Preferences regarding 5 HP electric motor

7. Whether the primary benefit projected for the 5 HP electric motor will be:
(a) High power factor (Above 0.8) with manual operation (HPFM)
(b) Low power factor (Below 0.6) with auto operation (LPFA)
(c) Medium power factor (Between 0.6 and 0.8) with panel board (MPFP)

8. Whether the motor would be:

(a) Flame proof (FP)
(b) Weather proof (WP)

Please write down your preferences for the motors:

j. Primary benefit ……………………

k. Flame proof (FP) or Weather proof (WP) ……………………

l. Number of Units (Maximum 50) ……………………

IMPORTANT: You are not allowed to change your choices once you finalize them.

♣
Decentralized purchasing procedure means you have the ability to customize the product,
you have user-unique requirements, and you have ability to manage local sourcing. You may
buy a maximum of 50 motors but you do not pose requirements for add-on services.

Please Note that:

• Flame proof motors: These motors are designed to contain an explosion or flame produced
within them due to a spark, explosion or any other condition.

• Weather proof motors: These motors, when exposed, are designed to withstand harsh
weather conditions such as extreme heat, cold and rain.

This document is authorized for use only in Prof. Rajveer Verma's Executive MBA 2023-25/ B2B Marketing at Indian Institute of Management - Ranchi from Sep 2024 to Mar 2025.
 19 of 19 A00036

• Power Factor: Usually in an AC circuit, power factor is defined as the ratio of the real power
that is used to do work and the apparent power which passes through the circuit. The
power factor ranges from 0 to 1.

• Manual Operation/ Auto Operations: In manual operations, the motor is operated by an

operator whereas in auto operation an electrically designed system takes care of the
operation of the motor such as the process of switching on or off.

• Panel Board: It is a board consisting of indicators, start/stop button and other electrical
systems required for operations of the motor.

This document is authorized for use only in Prof. Rajveer Verma's Executive MBA 2023-25/ B2B Marketing at Indian Institute of Management - Ranchi from Sep 2024 to Mar 2025.