Safari Batteries
Mr. Alok Vanshal is the Head of Sales of a large company called Safari Batteries. Safari Batteries is one of the oldest battery companies in the country selling the popular Pencil cells and the larger ‘D’ size batteries used in torches in transistors. Safari was the third largest company after Everyday, and Shippo. Safari was very strong in certain pockets of the country – in UP, Bihar, Gujarat and Mumbai. They also had torches in the brand name of Safari.
The ‘D’ segment of the market was the largest segment contributing to about 50% of the sale. This was widely distributed, with a significant rural presence also. Safari had a 30% market share in this segment. Most of the business happened through the wholesale channel. The most important factor in its sale was price. It had to be kept 2 rupees below the market leader Everyday, and then the sales would fly. The business had continued in this manner for many years.
The pencil cell segment was about 30% of the total battery market. Pencil cells were sold more in the urban arena, and in this segment Safari was an insignificant player. Pencil cells were largely distributed through the retail channel.
The last couple of years had seen an increase in costs, largely due to the government policies. Everyday had not increased prices, and they were able to sustain it because of their larger volumes. However, Safari was feeling the pressure. Alok had just met the Head of Finance, Mr. Singhal who had communicated that it was essential to increase prices in the market for D-cells, otherwise they would run into a loss. On the other hand, his sales team was threatening that any increase in prices would be detrimental to the volumes. In fact they had taken an increase of 50 paise, and the entire sales team ...