52901596 LG Marketing Project[1]

8/2/2019 52901596 LG Marketing Project[1]

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ADISSERTATIONPROJECTREPORTONMARKETANALYSISOFLGCONSUMERDURABLES

GuidedbyMr.PrakashChandraDashSeniorFaculty(Marketing)

SubmittedByAbhiramPrasadSatapathyRegd.No.0706275046


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Acknowledgement

Itisindeedofgreatmomenttopleasuretoexpressmysensesofperfoundgratitude&indebtnesstoallthepeoplewhohavebeeninstrumentalinmakingmytanningarichexperience.IgottheopportunitytodoachallengingprojectinLGELECTRONIC(INDIA)Theprojectistheimportantpartofourstudyandgivesusarealpracticalexposuretothecorporateworldanditisalmostimpossibletodothesamewithouttheguidanceofpeoplesinandaroundus.SimilarlywhiledoingthetopicMarketSurveyonLGconsumerdurablesasadissertationtraineeItookmanymyprojectsinhelp.

ItgivesmeimmensepleasuretoacknowledgeLGELECTRONICSINDIALtd.,whichhasbeenniceenoughtogivemeachancetodomydissertationprojectprovidingmewonderfulsupportthroughoutmytrainingperiodandafterward.

AbhiramPrasadSatapathy

Regd.No.0706275046


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PrakashChandraDashB.I.M.I.T,Bhubaneswar

FACULTYGUIDECERTIFICATE

ThisistocertifythatAbhiramPrasadSatapathy,astudentofBhubaneswarInstituteofManagementandInformationTechnology,BhubaneswarpursuinghisMBA(Marketing)hasworkedundermyguidanceandsupervisiononhisWorkentitledMarketSurveyonLGconsumerdurables.Tothebestofmyknowledgethisisanoriginalpieceofwork.

(PrakashChandraDash)FacultyMarketing


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DECLARATION

Iwilltakepleasureindeclaringthatthedissertationprojectworkthatisundertakenbymeisanoriginalandauthenticworkdonebyme.ThisdissertationprojectisbeingsubmittedbymeforthepartialfulfillmentforawardofMasterinBusinessAdministrationfromBhubaneswarInstituteofManagement&InformationTechnologyunderBPUT.

AbhiramPrasadSatapathyRegd.No.0706275046


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Executivesummary

IndianConsumerdurablesmarketusedtobedominatedbyfewdomesticplayerslikegodrejVoltasallwynandkalvinater.ButpostliberalizationmuchforeigncompanyhaveenteredintoIndianmarketdethroningtheIndianplayeranddominatingIndianmarketthemajorcategoriesinthemarketCTV,REFRIGRATOR,AIRCONDTIONERSANDWASHINGMACHINE

IndiabeingthesecondlargestgrowingeconomywithhugeconsumerclasshasresultedinconsumerdurablesasthefastestgrowingindustriesinIndiaLG,SAMSUNGthetwoKoreancompanieshasbeenmaintainingtheleadintheindustrieswithLGbeingleaderinalmostallthecategories.

Theruralmarketisgrowingfasterthantheurbanmarket,althoughthepenetrationlevelismuchlower.TheCTVsegmentisexpectedtothelargestcontributingsegmenttot

heoverallgrowththeindustry.Therisingincomelevelsdouble-incomefamiliesandconsumerawarenessarethemaingrowthdriversoftheindustries.

ConsumerdurablesmajorLGElectronicsIndiaPvtLtd(LGEIL)willinvestnearlyRs500croreinIndiathisyearinresearchanddevelopment,brand-buildingandothermarketinginitiatives.

Thecompany,havingaturnoverofRs9,500croreandmarketshareof26percent,is

investingRs360croreonbrand-buildingandothermarketinginitiativesandaroundRs140croreonresearchanddevelopment,besideslaunchingnewplatformsininformationtechnologyandrelatedareas,

LGsinnovative211campaigntoprovidequalityafter-salesservice,willalsobeexpandedfromtheexisting22to40citiesbynextmonth,Thecampaign,forwhichITinfrastructurehasbeensetup,includesthecompanysresponsetocustomercomplaintwithintwohours.Thefixingtimeforcomplaintsvariesfromonehourtoamaximumof

24hours.


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Scopeofproject

ThisprojectgivesmegreatexposuretotheconsumerdurablemarketbecauseitincludesproductknowledgeandthefiledjobinwhichIhavevisitedthestorecomesundertheregionofPune.DuringthisprojectIalsotookpartintheexhibitionofLGwhichheldforthepurposebrandingandawarenessofLGproduct.Thisprojecthelpsmetoknowthemarketpractically.MyjobwasduringthisprojecttoseethemarketshareandalsothedisplayshareoftheLGproductinthestore.LGalwaysinsistthe50%displayshareofLGproductbecauseLGbelievesthatJODIKHTAHAIWOBIKTAHAI.

Keyfindings:

1.BycalculatingthedisplaysharewefoundthatinmostofstoreLGhas50%displaysharealmostallcategories.2.Bytheactualmonthlysaleofparticularstorewecametoknowthecapacityo

fthestoreandhowmuchproductcantheysale.3.IthelpsustoknowthatweatherdealeriscapableofbeingadirectdealerofLGornotanditalsohelpstofindoutthenewdealerwhoarecapableofbeingthedealerofLG.4.Wealsocametoknowwhilevisitingtheshopsthattherewasbigproblemofaftersaleservice.5.

ManydealerswerefacingtheproblemofaftersaleservicebecausethereisnofollowupcallsfromLG.6.Democallsalsonotdoneproperly.


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INTRODUCTION

BeforetheliberalizationoftheIndianeconomy,onlyafewcompanieslikeKelvinator,Godrej,Allwyn,andVoltaswerethemajorplayersintheconsumerdurablesmarket,accountingfornolessthan90%ofthemarket.Then,aftertheliberalization,foreignplayerslikeLG,Sony,Samsung,Whirlpool,Daewoo,andAiwacameintothepicture.Today,theseplayerscontrolthemajorshareoftheconsumerdurablesmarket.

Consumerdurablesmarketisexpectedtogrowat10-15%in2007-2008.Itisgrowingveryfastbecauseofriseinlivingstandards,easyaccesstoconsumerfinance,andwiderangeofchoice,asmanyforeignplayersareenteringinthemarket

Withtheincreaseinincomelevels,easyavailabilityoffinance,increaseinconsumerawareness,andintroductionofnewmodels,thedemandforconsumerdurableshasincreasedsignificantly.Productslikewashingmachines,airconditioners,microwave

ovens,colortelevisions(CTVs)arenolongerconsideredluxuryitems.However,therearestillveryfewplayersincategorieslikevacuumcleaners,anddishwashers

ConsumerdurablessectorischaracterizedbytheemergenceofMNCs,exchangeoffers,discounts,andintensecompetition.ThemarketshareofMNCsinconsumerdurablessectoris65%.MNC'smajortargetisthegrowingmiddleclassofIndia.MNCsoffersuperiortechnologytothe

ConsumerswhereastheIndiancompaniescompeteonthebasisoffirmgraspofthe

localmarket,theirwell-acknowledgedbrands,andholdoverwidedistributionnetwork.However,thepenetrationleveloftheconsumerdurablesisstilllowinIndia.

Classificationofconsumerdurablessector

1.Consumerelectronicincludevcd/dvd,hometheatre,musicplayer,colortelevision(CTVs),cameras,camcorders,portableaudio,Hi-Fi,etc


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2.Whitegoodsincludedishwashers,airconditioners,heaters,washingmachines,refrigerators,vacuumcleaners,kitchenappliances,non-kitchenappliances,microwaves,built-inappliances,Tumbledryer,personalcareproductetc.3.Mouldedluggageincludeplastics4.Clocksandwatches5.MobilephonesScope

1.Intermofpurchasingpowerparity(ppp),Indiaisthe4thlargesteconomyintheworldandovertakeJapaninthenearfuturebecomethe3rdlargest.2.Indianconsumerdurablemarketisexpectedtoreach$400billionbyon20103.Indiahastheyoungestpopulationamongstthemajorcountries.Therearelotofpeopleinthedifferentincomecategoriesnearlythetwothirdpopulationisbelowtheageof35andnearly50%isbelow25.4.Thereare56millionpeopleinmiddleclass,whoareearningus$4,400-US$21,800a

year.Andthereare6millionrichhouseholdinIndia.5.Theupper-middleandhigh-incomehouseholdinurbanareasareexpectedtogrewto38.2millionin2007asagainst14.6millionin2000.Opportunity

1.InIndiathepenetrationlevelofwhitegoodsislowerascomparedtootherdevelopingcountries.2.Unexploitedruralmarket.3.Rapidurbanization.4.Increaseinincomelevel,i.e.increaseinpurchasingpowerofconsumers.5.Easyavailabilityoffinance.


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Threats

Higherimportdutiesonrowmaterials.CheapimportsfromSingapore,ChinaandfromotherAsiancountries.

Brandsinconsumerelectronicsector

MNCsNATIONALREGIONALLG)SAMSUNG)KOREAONIDABUSHHYUNDAI)VIDEOCONCROWNBPLSALORATCL)CHINAGODREJT-SERIESHAIER)VOLTASWESTONIFBBELTAKPHILIPS)HOLLANDOSKARPANASONIC)SHARP)HITACHI)SANSUI)JAPANAKAI)AIWA

WHIRLPOOL)ELECTROLUX

TODAYConsumerdurablessectorischaracterizedbytheemergenceofMNCs,exchangeoffers,discounts,andintensecompetition.ThemarketshareofMNCsinconsumerdurablessectoris65%.MNC'smajortargetisthegrowingmiddleclassofIndia.MNCsoffersuperiortechnologytothe

LG,SAMSUNGthetwoKoreancompanieshasbeenmaintainingtheleadintheindustrieswithLGbeingleaderinalmostallthecategories.

Thecompany,havingaturnoverofRs9,500croreandmarketshareof26percent,isinvestingRs360croreonbrand-buildingandothermarketinginitiativesandaroundRs


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140croreonresearchanddevelopment,besideslaunchingnewplatformsininformationtechnologyandrelatedareas,

LGElectronicsisoneoftheleadingcompaniesinthefieldofelectronicswithaglobalpresenceinmanycountries..Beforebriefing,Ihavedividedtheintroductionpartintothreemainsubparts.

1.LGGlobal2.LGIndia3.LGPuneHistoryofcompany

Thecompanywasoriginallyestablishedin1958asGoldStar,producingradios,TVs,refrigerators,washingmachines,andairconditioners.

TheLGGroupwasamergeroftwoKoreancompanies,LuckyandGoldStar,fromwhichtheabbreviationofLGwasderived.Thecurrent"Life'sgood"sloganisabackronym.

BeforethecorporateNamechangetoLG,householdproductsweresoldundertheBrandnameofLucky,whileelectronicproductsweresoldunderthebrandnameofGoldStar.TheGoldStarbrandisstillperceivedasadiscountbrand.

In1995,GoldStarwasrenamedLGElectronics,andacquiredZenithElectronicsoftheUnitedStates.

GlobalOperation

LGElectronicsisplayinganactiveroleintheworldmarketwithitsassertive

globalbusinesspolicy.Asaresult,LGElectronicscontrols110localsubsidiariesintheworldwitharound82,000executiveandemployees.

LGGroup


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1.LG.PhilipsLCD2.LGChemical3.LGTelecom4.LGPowercom5.LGTwins6.LGDacomBusinessareasandmainproducts

Mobilecommunications

(a)CDMAHandsets,(b)GSMHandsets,(c)3GHandsets,(d)CellularPhonesDigitalappliance

a)AirConditioners,b)Refrigerators,c)MicrowaveOvens,d)WashingMachines,e)VacuumCleaners,f)HomeNet,g)CompressorsforAirConditionersandRefrigerators

Digitaldisplay

a)PlasmaTVs,

b)LCDTVs,

c)MicroDisplayPanelTVs,

d)Monitors,

e)PDPModules,


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f)OLEDPanels,g)USBMemory,h)FlatPanelComputerMonitors

Digitalmedia

a)HomeTheaterSystems,b)DVDRecorders,c)SuperMultiDVDRewriters,d)CDRW,e)NotebookPCs,f)DesktopPCs,g)PDAs,h)PDAPhones,i)MP3Players,j)NewKaraokeSystems,k)CarInfotainment

LGBRANDIDENTITY:


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ThebrandofLGisdelightfullysmart.LGstrivestoenhancethecustomerslifeandlifestylewithintelligentfeatures,institutivefunctionalityandexceptionalperformance.

Thebrandplatform:

TheLGbrandiscomposedoffourbasicelements

1.Value2.Promise3.Benefits4.PersonalityTheBrandscoreValuethatneverchanges.

a.Trust,b.Innovation,c.Peopled.PassionThebenefitsthatareconsistentlydeliveredtothecustomerincludesReliableproductsSimpledesign

EaseofuseExtraordinaryExperience

PersonalitydescribesthehumancharacteristicthatareexpressedtothecustomerthroughTrustworthy,ConsideratePractical,Friendly

TheInternalCultureofLG:

LGpracticesfourcultures


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1.LearningCulture2.BoundarylessEnvironment3.ACarrier4.GrowthAccordingtoLG,theLearningCulturecontinuouslyhelpstheemployeetolearnmoreandmoretodevelopthehabitofcontinuouslearning.

BoundarylessEnvironmentmeansthatthereisnodifferencebetweenthelevelsofemployees.Thereistransparencybetweentheworkandmutualunderstandingbetweenalltheemployees.

AcarrierishighlygrowinginLGandonewhoistheemployeecandeveloptheircarrierlargely.Anewcomerwillfeelfullycomfortableinthecompanyandforanewcomerthecompanyisveryhelpfulintheoverallgrowthofpersonality.

GrowthinLGisveryhighforthosewhoareinthecompanyandforthosewhowanttojoininLG.ThecompanyisgrowingwithfastinnovationandtheBLUEOceanstrat

egyisoneoftheexamplesofgrowth.

Mission

ThemissionofLGistoprovidethecustomerswithutmostsatisfactionthroughleadership.

Thefundamentalpolicyofdevelopmentistosecureproductleadershipthatthe

Customersmayhavetheutmostsatisfaction.

ProductLeadership

Wearefocusingonsixdevelopmentareastobecometheproductleader.

1.NewMachine2.Reliability3.ConventionalInstallation4.EnvironmentFriendlyProduct


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5.LowNoise&Vibration6.EnergySavingQualityInnovation

Thepolicyofqualityassuranceistoprovidecustomerswithutmostsatisfactionbysupplyingzerodefects.

LGproceedsinahierarchalmanner.ItisnamedasLGWAY.

Fromtoptobottom:

No.1LGistheVISIONJeong-DOManagementisLGsuniqueapplicationtoethics.LGwillsucceedthroughfairmanagementpracticesandconstantlydevelopingourbusinessskill.a)Honestwithourcustomerb)Providinggreatvaluestocustomerthroughconstantinnovation&anddevelopment.

c)Equalopportunitiesd)EqualTreatmentManagementPrinciple-Creatingvalueforcustomer

CodeofconductofLG:


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1.Responsibilityandobligationstocustomers:RespectforCustomersCreatingValueProvidingValue2Faircompetition

PursuitofFreeCompetitionCompliancewithLawsandRegulations3FairTransaction:

EqualOpportunityFairTransactionProcedureSupportandAidforBusinessPartners4BasicEthicsforEmployees

BasicEthicsCompletionofDutySelfDevelopmentFairnessinPerformanceAvoidanceofconflictwithcompanyinterest5CorporateResponsibilitiestoemployees

Respectforhumandignity

FairTreatmentPromotingCreativity6Responsibilitiestosocietyandcountry

RationalBusinessDevelopmentProtectionofstockholderinterestContributiontosocialdevelopment

EnvironmentalConservationLGINDIA:


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LGElectronicsIndiaPvt.Ltd.,awhollyownedsubsidiaryofLGElectronics,SouthKoreawasestablishedinJanuary1997afterclearancefromtheForeignInvestmentPromotionBoard(FIPB).LGsetupastate-of-theartmanufacturingfacilityatGreaterNoida,nearDelhi,in1998,withaninvestmentofRs500Crores.

LGcorporateofficeislocatedatPlotno.51,UdyogVihar,KasnaRoad,GreaterNoida,India.

ThisfacilitymanufacturedColorTelevisions,WashingMachines,Air-ConditionersandMicrowaveOvens.

''Companyissettingupachainofexclusivepremiumshowrooms.LGplanstolaunch60premiumBrandShoppesbytheendofthefirstquarterofthisyear.Atpresent,LGhasatotalof83LGstoresacrossthecountry,ofwhich45areshoppesand38areexclusivestores.Brandshoppeswillbeplacedinthepremiumsegmentandthetargetaudie

ncewillcomprisebuyersinterestedinpremiumandhighendproducts.

LGBrandShoppegoesbeyondtheconceptofanormalexclusivestorebyhavingamoreinteractiveenvironmentandadditionallifestyleorientationondisplaysothatthecustomercanactuallyexperiencetheLGproductsinhisorherownhomesettings.

LGElectronicsIndiaLtd(LGEIL),consumerdurablesleaderwith27%marketshare,isplanningabrandnewimage.ToattractinspirationalandyoungconsumersacrossIndia,

companywillrolloutanewmarketingstrategy.TheexercisewillcostthecompanyRs360crore.

LGElectronicsIndiaisthefastestgrowingcompanyintheconsumerelectronics,homeappliances,andcomputerperipheralsindustrytoday.

LGElectronicsiscontinuallyproviding,superiortechnologyproducts&valueformoneytomorethan50lakhhouseholdsinIndia.LGEILiscelebratingthe11thanniversarythisyear.


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LGSoftIndiatheinnovationwingofLGElectronicsinBangaloreisLGElectronics'largestR&DcentreoutsideKorea.WeatLGSIfocusonnichetechnologyareassuchasmobileapplicationdevelopment,digitalvideobroadcastandbiometricssoftwareandsupportLGElectronicswithourexpertise.Motivatedbyapassionfortechnology,astrongworkcultureandloyaltytotheorganization,wearedeterminedtoseeLGbecomeoneofthetopthreebrandsglobally.

Prominentconsumerelectroniccompany,LGElectronicsInc.hassaidthatitexpectsthesaleofitsproductsinIndiatoupby15percentin2008.MoonBumShin,managingdirectorofLGElectronicsIndiahassaidthatthecompanyhasearmarked4.8billionrupeesforinvestmentpurposeinIndiathisyear.Thesaidmoneywillbeusedtomarketaswellasmanufacturenewproducts.LGElectronics,whichisoriginallyaSouthKoreanCompanywithbranchinIndia,

informedthatitssalesofGSMmobilephones,colortelevisions,airconditionersandotherhouseholdgoodsintheIndianmarketwastothetuneof95billionrupees($2.4billion)in2007.AsperShin'sestimate,thesalesin2008wouldbearound110billionrupees.Inordertoachieveitstarget,ShinsaidLGElectronicswillconcentrateoncateringtothehigh-endconsumermarketwhichwillhelpboostsalesthisyear.Indiachurnsoutsix(6)percentofLGElectronicsglobalrevenuesof$42billion.TheIndianbranchofLGexportsto40countries.

Indiachallenges

ThechallengesfacedbyLGwhenenteredinIndianmarket

1.LowbrandawarenessaboutLGinIndia.2.OneofthelastMNCsenteredinIndia(Samsung,Panasonicenteredin1995inIndia).3.Highimportduty4.CompititionfromlocalmarketplayersandotherMNCsinconsumerdurablesegment.

5.PricesensitivenessoftheIndianconsumer


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LGEIovercomesthesechallengestoemergeasInnovativemarketingstrategy

1.Launchnewtechnologiesinconsumerelectronicandhomeappliances.2.LGwasthefirstbrandtoenterincricketinbigwayaway,bysponsoringthe1999worldcupfolloweditupin2003aswell.3.LGbroughtinfourcaptainsoftheIndiancricketteamtoendorseitsproducts.LGinvestedmorethenUS$8milliononadvertisingandmarketinginthissport.4.LGhasdifferentiateditsproductusingtechnologyandhealthbenefits.CTVhasGoldeneyetechnologyAirconditionerhasHealthairsystemandmicrowaveovenshavetheHealthwavesystem.Localandefficientmanufacturingtoreducethecost

ToovercomehighimportdutiesLGmanufacturesTVrefrigeratorinIndiaatmanufacturingfacilityatNoidaandPune.LGEIhadalreadycommissionedcontractmanufacturingatMohaliKolkataandBhopalforCTVs.ThishashelpedLGEItoreducecost.LGEIimplementingtheDigitalmanufacturingsystem(DMS)asthecostcutting

innovationthissystemisfollow-uptothesixsigmaexerciseLGEIhadinitiateearlier.

R&Dpotential

LGhastheresearchanddevelopmentfacilitiesinBangaloreandPune.BoththeunitcarryoutR&DdepartmentforthedomesticaswellastheparentcompanyitalsodosecustomizeR&Dforthespecificcountriestowhichitexportproduct.

Regionalchannelandwidedistributionnetwork

1.

LGhasadoptedtheregionaldistributionchannelinIndia.Allthedistributersworkdirectlywiththecompany.ThishasresultedinquickerrotationofthestockandbetterpenetrationintoB,C,D,classmarket.2.LGalsofollowsthestockrotationpolicyratherthendumpingstockonchannelpartners.


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Productlocalization:

1.ProductlocalizationisthekeystrategyusedbytheLG2.LGcameoutwithHindiandregionallanguagemenusonitsTVs.3.Introducedthelow-pricedCineplusandsampoomafortheruralmarket.4.LGwasthefirstbrandtointroducegaminginTVsincontinuationsofitsassociationwithcricketLGintroducecricketgameinCTVsMAJORKEYSUCCESSFACTORS

1.Innovativemarketing-LGwasthefirstbrandtoentercricketinabigway,bysponsoringthe1999WorldCupandfolloweditupin2003aswell.2.Localandefficientmanufacturingtoreducecost-Toovercomehighimportduties,LGmanufacturesPCmonitorsandrefrigeratorsinIndiaatitsmanufacturingfacilityatNoida,Delhi.3.CommissionedcontractmanufacturingatMohali,KolkataandBhopalforCTVs.4.Productlocalization-ProductlocalizationisakeystrategyusedbyLG.Itc

ameoutwithHindiandregionallanguagemenusonitsTV.5.Regionaldistributionmodel-ThishasresultedinquickerrotationofstocksandbetterpenetrationintotheB,CandDclassmarkets.6.LeveragingIndiasITadvantage-LGElectronicshasawardedacontracttodevelopITsolutionstoLGSoftIndia(LGSI).TheprojectinvolvesdevelopmentandsupportforERP,SCM,CRMandIT-enabledservicesforLG.


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Strategiesadoptedbytheorganization

LGfollows10commandmentswhichareasfollows.

1.Fosterworkingenvironment-5SEnvironment2.Fastexecutioniskeytosuccess3.Transparentandfastcommunication-opencommunication4.Updatemarket-knowledgeDemographics5.WinWinrelationshipwiththetradepartners6.Customeristheking7.EvenBillingRoadtoachsupplierA8.Beintouchwiththemarket(70%Market,30%Office).9.PlanandExecuteannualmarketingCalendar-Timetomarket10.Displayshareof50%-toget50%consumershare.LGmarketshareofconsumerappliancesandconsumerelectronic:


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LGpositionofCTVinvariousstatesinIndia

LGpositionofACinvariousStatesinIndia


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LGpositionofAudio&HomeTheaterinvariousinIndia

LGpositionofDVDinvariousinIndia


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rupees($2.4billion)in2007.AsperShin'sestimate,thesalesin2008wouldbearound110billionrupees.

Inordertoachieveitstarget,ShinsaidLGElectronicswillconcentrateoncateringtothehigh-endconsumermarketwhichwillhelpboostsalesthisyear.Indiachurnsoutsix(6)percentofLGElectronicsglobalrevenuesof$42billion.TheIndianbranchofLGexportsto40countries.Shinremarkedthatthecompanywastargetinganincreaseofexportsto$300millionin2008from$230millionin2007.

.Thekeystrategiesbeingimplementedincludeincreasingthenumberofitsregionalofficesfromsixtoeight.LGhassplititssouthernregionalofficeintotwo,onecomprisingthestatesofTamilNaduandKeralaandtheotherconsistingofAndhraPradeshandKarnataka.Inaddition,ithassplitoneofitsnorthernregionalofficesbymakingUttarPradeshaseparateregionafterspinningitoutfromDelhiNCR.Theotherfourr

egionalofficestakecareofEast,GujaratandMadhyaPradesh,Maharashtra&GoaandPunjab,Haryana&Rajasthanrespectively.

Inthecomingyear,LGisalsorepositioningitsmarketingspends,resultinginasignificantincreaseinitsmassmediaexpenditureforbetterbrandvisibility.LGhadamarketingbudgetofRs320crorein2007witha60:40splitinfavorofbelow-the-lineactivities.Nextyear,thecompanyplanstoincreasetheshareofmassmediaevenasoverall

marketingspendswouldberaisedbyjustabout10-15%.

DistributionandMarketing

Thecompanyhasnumberofdealersandwarehouses.TheyhaveLGexclusiveshopee.Forthemarketingoftheproductsanumberofactivitiesarefollowed

1.Exhibitionsareconductedfromtimetotime.2.Societyandcollegeactivitiesareconducted.3.Hoarding,Posters,bannersareusedsoastograbtheattentionofthecostumers.4.Daytodayadvertisementinleadingnewspaper.

5.Discountatfestivaltime.


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6.Fordealerrelationshiptheyarrangedealermetingatseveraltimeintheyear7.LGdividedealeringoldsilveretc.categorytoknowtheperformanceofthedealers.8.TheyhavetheirsalespersonsatvarioussubdealerstoreandatmordenttradestoreforparticularlyforthepromotionoftheLGproduct.9.LGalsousestheradioFMforthepromotionactivities.10.Alsoprovidecaponandscratchcardforfestiveseason.CUSTOMERSERVICE

ThebestandthebiggestinternationalbrandsarehereinIndiabuttheironyifitall:whereistheafter-sales-service?Sointegraltoabrand,socriticalforitssuccessandsotakenforgrantedindevelopedmarkets!InIndia,aftersalesserviceis,forwantofabetterdescription,thepits.Sowhatsstoppingthebestcompaniesfrompullingoutallthestopswhenitcomestoprovidingthebestservice?Docustomersexpectfortoomuch?OrisitthatinIndiatheydontreallycare.BrandEquityfannedouttoMNCaswellasIndian

consumerdurablecompanies,stockiestanddealers,analystsandmarketresearcherstogetafeelofwhatsreallykeepingaftersalesfrombeingusedasacuttingedgemarketingtoolinpushingproductsacrosscategories.

Customerssupportfollowingthepurchaseofaproductorservice.Insomecases,after-salesservicecanbealmostasimportantastheinitialpurchase.Themanufacturer,retailer,orserviceproviderdetermineswhatisincludedinanywarranty(orguarantee)package.Thiswillincludethedurationofthewarrantytraditionallyoneyearfromthed

ateofpurchase,butincreasinglytwoormoreyearsmaintenanceand/orreplacementpolicy,itemsincluded/excluded,laborcosts,andspeedofresponse.Inthecaseofaserviceprovider,after-salesservicemightincludeadditionaltrainingorhelpdeskavailability.Ofequalimportanceisthecustomer'sperceptionofthedegreeofwillingnesswithwhichasupplierdealswithaquestionorcomplaint,speedofresponse,andactiontaken.

LGalsohadabigproblemofaftersaleserviceinIndia.DuringmyprojectIal

socametoknowthataftersaleservicebecomesthebigissueinPuneregion.Customersaswellas


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dealerwerefacingtheproblemofaftersaleservice.BecauseofthisproblemmanydealerinPuneregionwerenotreadytosaleLGproduct.Soitbecomesthebigissue.

ButLGhastakensomesolidstepstowardsimprovingcustomersperceptionandexperienceofaftersalesservice.Becauseitveryimportantincompetitivemarkettoprovidethebestservice.

LGElectronicshassignedamemorandumofunderstandingwith23IndustrialTrainingInstitutestostrengthenitsaftersalesserviceinIndia.

Thecompanyaimstorecruit10,000peoplebytheendofthisyearasapartofitsbrandingstrategytofocusonserviceandmoveawayfromdiscounting.

LGElectronicshasidentifiedeightstateswithhighaftersalesservicecallratestoinkthedealswiththeITI.YVVerma,directorHRandmanagementsystem,LGElectronicssaid,"TheCompanywastryingtofindasolutionforeffectiveaftersalesservicesincelasttwo

years.Thereisahugeneedoftrainedmanpowerfortheaftersalesservicetoalignwiththecompany'sexpansionandfocusontheGSMmobilesandthepersonalcomputersegments."

1.IntheinitialphasethecompanyhasenteredintoagreementswithITIsinthestateslikeMaharashtra,Gujarat,Delhi,Punjab,Assam,andKarnatakaandisinthelastlegofsigningwithUttarPradesh.2.LGElectronics,with1200servicecenters,hasalreadyrecruited300studentsand

planstobeefupthenumberto10,000bytheyear-end.3."Thecompanyhasofferedascholarshiptotheselectedstudentsforthelastsixmonthsoftheirtrainingprogramme,"4.ThecompanywillinvestRs8crore(Rs80million)inemployeedevelopmentprogrammethisyearwithanaimtoattaina8percentattritionrate.


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5.ThecompanymovedawayfromthediscountingstrategysincelastyearandisputtingthrustonthequalityandserviceinitsbrandcommunicationtopositionLGasapremiumconsumerelectronicsbrand.6.Atthetop,theServiceDivisioninKoreareportstotheGlobalCMO.(asmentionedinDermotspublicinterviewinETonWednesday).ThisshowscommitmentthatServicemustbemadeintoamarketingdifferentiator,andleveragedthus.7.LGhasthewidestservicenetworkacrossthecountry;someestimatesputitatasignificantmultipleofservice-infrastructurefromournearestcompetitor.Whilethesalesizemayalsobeanicemultiplefromnearest,itshowsthecompanyisreadytoputourmoneywhereourmouthis.8.Thecompanyhasintroduceda211service-onceyouregisteryourcomplaint,wewillcallyoubackin2hours(hence2),setupanappointmentforthenextconvenientdayforyou(hencethefirst1),andshowupinthepromised1-hourslot(hencethesecond1).Ifthenextconvenientdayforyouisthenextday,thatsgreattoo.Itsadisruptiveactioninanindustry(includingLG)havingtraditionallys

hiedawayfromitsserviceresponsibilities,andthusnotleveraginganymileagefromit.9.Thecompanyispromoting211throughATL,probablythefirsttimeafter-salesserviceisbeingcommunicatedinthisfashionbyanyproductcompany.YoumayhaveseentheTVcommercialorheardtheradioadvertorseenthenewspaperadorin-shopposters,bothofwhichrevolvearoundpromptresponse.10.ThefirstLG-ownedservicecentreopenedinGurgaon.(ServiceinIndiagenerallyworksthroughauthorizedservicecenters,inLGscasetheyworkexclusivelyforLG.)Acompany-ownedservicecentretriesthatmuchharder,knowsthingsbetter,

andcanevencontributeasarevenuecenter.


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Objectiveoftheproject

Primaryobjective

.ThemainobjectiveoffiledsurveyduringtheprojectwastofindoutthemarketshareoftheLGandalsocalculatethedisplayshare.

.FindoutthepositionaldealerwhocansaletheLGproductinlargevolume.

.Themainobjectiveofresearchwastoidentifypotentialdealeranddevelopmentthesedealer.SoLGcanmakethemtheirdirectdealer.

.ThiswilleasethedependenceonthesomebigdealerlikeMaharashtraandMahaveerelectronics.

.Findouttheproblemfacedbythedealerinsalesandthedistribution.

Secondaryobjective

.TheObjectivewastofindoutthathowfartheexhibitionsarehelpfulinbranding,

.Whilepurchasingtheconsumerdurableswhichparameterismostimportantfortheconsumer?

.Dotheconsumerspreferthefinancialfacilityforbuyingconsumerdurable?.Howfrequentlyconsumerschangetheconsumerdurable?.Toenhancestheknowledgeofconsumerdurablemarket..ToincreasestheknowledgeconsumerdurableproductofLG.

.Toenhancestheknowledgeaboutthemarketingandbrandingactivity.


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ResearchMethodology:

Researchmethodologyisconsideredasthenerveoftheproject.Withoutaproperwell-organizedresearchplan,itisimpossibletocompletetheprojectandreachtoanyconclusion.Theprojectwasbasedonthesurveyplan.Themainobjectiveofsurveywastocollectappropriatedata,whichworkasabasefordrawingconclusionandgettingresult.

Therefore,researchmethodologyisthewaytosystematicallysolvetheresearchproblem.Researchmethodologynotonlytalksofthemethodsbutalsologicbehindthemethodsusedinthecontextofaresearchstudyanditexplainswhyaparticularmethodhasbeenusedinthepreferenceoftheothermethods

Researchdesign:

Researchdesignisimportantprimarilybecauseoftheincreasedcomplexityinthemarket

aswellasmarketingapproachesavailabletotheresearchers.Infact,itisthekeytotheevolutionofsuccessfulmarketingstrategiesandprogrammers.Itisanimportanttooltostudybuyersbehavior,consumptionpattern,brandloyalty,andfocusmarketchanges.Aresearchdesignspecifiesthemethodsandproceduresforconductingaparticularstudy.AccordingtoKerlinger,ResearchDesignisaplan,conceptualstructure,andstrategyofinvestigationconceivedastoobtainanswerstoresearchquestionsandtocontrolvariance.

Typesofresearchis:

DescriptiveResearchThetypeofresearchadoptedforstudyisdescriptive.Descriptivestudiesareundertakeninmanycircumstanceswhentheresearchesisinterestedtoknowthecharacteristicofcertaingroupsuchasage,sex,educationlevel,occupationorincome.Adescriptivestudymaybenecessaryincaseswhenaresearcherisinterestedinknowingtheproportionofpeopleinagivenpopulationwhohaveinparticularmanner,makingprojectionsofacertainthing,or

determiningtherelationshipbetweentwoormorevariables.Theobjectiveofsuchstudyistoanswerthewho,what,when,whereandhowofthesubjectunderinvestigation.There


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isageneralfeelingthatdescriptivestudiesarefactualandverysimple.Thisisnotnecessarilytrue.Descriptivestudycanbecomplex,demandingahighdegreeofscientificskillonpartoftheresearcher.

Descriptivestudiesarewellstructured.Anexploratorystudyneedstobeflexibleinitsapproach,butadescriptivestudyincontrasttendstoberigidanditsapproachcannotbechangedeverynowandthen.Itisthereforenecessary,theresearchergivesufficientthoughttoframingresearch.

Questionsanddecidingthetypesofdatatobecollectedandtheproceduretobeusedinthispurpose.Descriptivestudiescanbedividedintotwobroadcategories:CrossSectionalandLongitudinalSectional.Acrosssectionalstudyisconcernedwithasampleofelementsfromagivenpopulation.Thus,itmaydealwithhousehold,dealers,retailstores,orotherentities.Dataonanumberofcharacteristicsfromsampleelementsare

collectedandanalyzed.Crosssectionalstudiesareoftwotypes:FieldstudyandSurvey.Althoughthedistinctionbetweenthemisnotclear-cut,therearesomepracticaldifferences,whichneeddifferenttechniquesandskills.Fieldstudiesareex-post-factorscientificinquiriesthataimatfindingtherelationsandinterrelationsamongvariablesinarealsetting.Suchstudiesaredoneinlivesituationslikecommunities,schools,factories,andorganizations.

Anothertypeofcrosssectionalstudyissurveyresult,whichhasbeentakenby

me.Amajorstrengthofsurveyresearchisitswidescope.Detailinformationcanbeobtainedfromasampleoflargepopulation.Besides;itiseconomicalasmoreinformationcanbecollectedperunitofcost.Inaddition,itisobviousthatasamplesurveyneedslesstimethanacensusinquiry.Descriptiveresearchincludessurveyandfactfindingenquiriesofdifferentkindsofthemajorpurpose.Descriptiveresearchisdescriptionofthestateofaffairs,asitexistsatpresent.Themaincharacteristicofthismethodisthattheresearcher

hasnocontroloverthevariables;hecanonlyreportwhathashappenedorwhatishappening.Themethodsofresearchutilizedindescriptiveresearcharesurveymethodsofallkindsincludingcomparativeandcorelationalmethods.Thereasonforusingsuch


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needstobeflexileinitsapproach,butadescriptivestudyincontrasttendstoberigidanditsapproachcannotbechangedevernowandthen.

Datacollectionmethods:

Aftertheresearchproblem,wehavetoidentifyandselectwhichtypeofdataistoresearch.Atthisstage;wehavetoorganizeafieldsurveytocollectthedata.Oneoftheimportanttoolsforconductingmarketresearchistheavailabilityofnecessaryandusefuldata.

Primarydata:Forprimarydatacollection,wehavetoplanthefollowingfourimportantaspects.

.Sampling

.ResearchInstrument

.SecondaryData-TheCompanysprofile,journalsandvariousliteraturestudies

areimportantsourcesofsecondarydata.

.Dataanalysisandinterpretation

1.Questionnaires2.PiechartandBarchartQuestionnaires:

Thisisthemostpopulartoolforthedatacollection.Aquestionnairecontainsquestionthattheresearcherwishestoaskhisrespondentswhichisalwaysguidedbytheobjectiveofthesurvey.

Piechart:

Thisisveryusefuldiagramtorepresentdata,whicharedividedintoanumberofcategories.Thisdiagramconsistsofacircleofdividedintoanumberofsectors,whichareproportionaltothevaluestheyrepresent.Thetotalvalueisrepresentedbythe

fullcreate.Thediagrambarchartcanmakecomparisonamongthevariouscomponentsorbetweenapartandawholeofdata.


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Barchart:

Thisisanotherwayofrepresentingdatagraphically.Asthenameimplies,itconsistofanumberofwhisperedbar,whichoriginatefromacommonbaselineandareequalwidths.Thelengthsofthebardsareproportionaltothevaluetheyrepresent.

Preparationofreport:

Thereportwasbasedontheanalysisandpresentedwiththefindingsandsuggestions.Thesampleofthequestionnairesisattachedwiththereportitself.

SamplingMethodology:

Detailsofthesamplingmethodology,Ihavemadequestionnaire.TheoneismadefortheCustomer.

No.ofquestionsinquestionnairesforcustomer:07No.ofquestionrelatedtoLGproduct:03No.ofpeoplemetduringtheresearch:200

No.ofrespondentsduringtheresearch:50SampleunitProfessionals,Businessman,Employees,Housewife,Workingwomen,Students


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Analysis:Q1.HaveyoupurchasedanyconsumerdurableduringExhibitions?

.Yes.No

Inferences

1.65%ofCustomerhavenotpurchasedanyconsumerdurablefromexhibitions.2.Only35%peoplehavepurchased.3.Itshowsthatconsumersarecomingintheexhibitionforknowledgeofproductandalsotheywanttoknowthatweatherthereisactualpricedifferenceinexhibitionandshopornot.4.

Consumeralsowanttocomparetothedifferentbrandwhichareavailableintheexhibition.5.Soexhibitionsaremoreusefultoincreasesbrandawareness.6.Peoplearelessinterestedtopurchaseproductfromtheexhibition.


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Q.2Whilepurchasingconsumerdurablewhichparameterinfluencesyou?

.Price.Productfeature.Brand.Service.Durability

Inference

1.30%ofcustomergivesimportancetoprice.SoitshowsthatIndianconsumersareverypricesensitive.Theygivemoreimportancetopriceoverthebrand.2.26%giveimportancetobrand.SopriceandBrandmatteralotsforthecostumers

.Andtheyarealsowantbestbrandinbestprice.3.19%toproductfeatureService16%anddurability9%Serviceisalsoabigfactorforthecustomertheyarelessinterestedinthedurability.


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Q3.Fromwhereyoupreferbuyingconsumerdurables

.Exhibitions.Co.shoppee.Showroom

Inference:

1.Amajorityofcustomersprefertobuyfromshowrooms.VerylesspropositionofcustomersbuysfromExhibitions.2.47%customersareprefertobyfromtheshowroomsbecausetheshowroomsaremoreconvenienttocustomerstheyalsothinkthattheseshopsgivemorediscounts.3.Peoplearelessinterestedtobuyfromtheexhibitiontheyonlyvisittheexhibitionforpricequotationoftheproductandthecomparisonoftheproduct.


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Q.4.YouprefertobuyfromthesameasyouhavementionedinQ.3becauseoffollowingreasons

.AttractivePrice.Service.Demonstrations.Offers

Inference

1.Customersbuyfromshowroomsbecauseoftheserviceandconvenience.Thesearetwomainfactors.2.Customersarepreferredtobuyfromtheshowroombecauseoftheythinkthattheseconvenientstoremayprovidegoodaftersellservice.

3.Customeralsothinksthatthereismorechancetobargainandtheycangetmorediscountsintheseshowrooms.4.Pricealsoafactorthatattractthecustomerintheseshowrooms.


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Q.5.Whichconsumerdurableyouhaveandofwhichbrand?

.CTV

.LCD

.PLASMA

.REF

.WM

.MW

.AC

Inference

InCTVsectionmaximumcustomershaveOnida,inLCDSonyistheleader,InplasmaBPListheleader,InRefLGistheleader,MWLGistheleader.InWMtherearecompaniesandinACalso.


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Q.6.Howfrequentlyyouchangeyourconsumerdurables?.1-3years.3-5years.5-10years.Morethan10years

INFERENCE

1.Customersprefertochangeconsumerdurableswithin5-10years.InIndiapeopledonotchangeconsumerdurablefrequently.2.23%customersdonotchangetheirconsumerdurablewithin10year.3.ItrepresentthatIndianconsumerdonotprefertochangetheirconsumerdurablefrequently.


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CUSTOMERSURVEYFINDINGS

1.Secondarysupportsplayanimportantroleinthecustomersmindandcreateawarenessamongthecustomers.ThesecondarysupportincludesDemonstration,Exhibition&EvenSponsors.2.Fromthesurveyitwasfoundoutthatthemajorityofcustomersdontbuyconsumerdurablesfromexhibitions.Theyjustvisittheexhibitionstoseetheco.latestmodel.3.Theywanttobuyfromtheshowroomsorfromco.showrooms.Forthemserviceisimportant.Besideconvenienceandotherfactorsserviceiskeyfactor.4.Alsomajorityofcustomersdonotwantanyfinancingschemeforpurchasingthedurables.5.TherewasheavyrushonweekendssolargenumbersofISDswereappointedthatday.Alsothelivedemocallshelpsinselling.Exchangeoffersalsogeneratesale.6.Customersarealsonowverychoosyinbuyingtheproductanditisimportant

forthecompanytomakeloyalcustomeroftheirbrand.7.InsurveywefoundthatLGhascapturedmaximummarketshareineverycategory.LGdominatesCTV,LCD,andRefrigerator,andWashingmachine,category.8.LGandSamsunghavebottleneckcompetitioninTVandREF.category.9.Theproductiswellawareanditisontopofmindofcustomer.10.Customersarealsonowverychoosyinbuyingtheproductanditisimportantforthecompanytomakeloyalcustomeroftheirbrand.

RECOMMENDATIONSANDSUGGESTIONS


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1.Exhibitionsdonothelptogeneratesomuchsellsbuttheyshouldbeconductedregularly.Thishelpsingeneratingawarenessregardingtheproductincustomerswhichultimatelyhelpsinsales.2.Alsoitishelpsinadvertisingforthenewproducts.LikeinthisexhibitionnewLCDSCARLETwasadvertised.Companyshouldalwaysfocusonservice.3.Displayshareshouldbeincreasedwherethereislessthan50%asLGalsobelievesthatJODIKHTAHAIWOBIKTAHAI.4.Companyshouldtrytoimproveservice.Nodoubtthecompanyproductshavetechnicallyedgeovercompetitorsbutinlongrunitmayhamperthecompanysprofit.5.CompanyshouldconcentratemoreonitsmajordriversLCD,IT,andGSM.Brandingandpromotionsshouldbedoneeffectivelyasitcreatesalonglastingimageinthemindofcustomers.6.Companyshouldalsocatertotheneedsofsubdealersassomeofthesubdealershavepotentialofhighsales.

LIMITATIONS


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Everystudyhascertainlimitations.Inmystudy,alsotherewerecertainlimitations,whichIcouldnotabletosolve.

1.Theresearchwasconductedinaverysmallarea.2.Myresearchworkperiodwitnessthebiggestupsanddownsinproductsaleofdifferentbrands,whichaffectedtheperceptionofthecustomer.Thiswasbiggestdrawbackofmystudy.3.Timefactorwasalsoimportantforme.Ihadonly60daystocompletemyresearch,forwhichafull-fledgedreportwasinsufficientforme.4.Thecustomerfilledthequestionnairemostlyincarelessmanner,soitwasdifficulttomakethemholdfortime.5.Ihadonlyfoundtheupper-middleclassfamilytofillupthequestionnaire,butgenerally,anaveragemiddleclassfamilywasrequiredforthestudy.6.ThesamplesizeisalsoverysmallwhichrepresentmyresearchonconsumerbehaviorMystudyisnotrecognizableinwholeINDIAaswellasoutsideRanchiduetotheabovelimitationsandlessareacoverage.

BIBLIOGRAPHY


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.www.lgindia.com.www.google.com.www.wikipedia.com.Businessworld.Businesstoday.LGmagazine.EconomicstimesNewspaper.TimesofIndia


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52901596 LG Marketing Project[1]

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