LED I LCD | PLASMA | REFRIGERATOR | AC |WASHING MACHINE |HOME ENTERTAINMENT | SPEAKERS | MP3 PLAYERS |

• Mass market heavy goods intended to last three or more years

• Also known as hard goods or durable goods-Classification as below

WHITE GOODS

•AIR CONDITIONERS

•REFRIGERATORS

•WASHING MACHINE

•SEWING MACHINE

•WATCHES AND CLOCKS

•CLEANING EQUIPMENT

•OTHER DOMESTIC APPLIANCES

BROWN GOODS

•MICROWAVE OVEN

•COOKING RANGE

•CHIMNEYS

•MIXERS

•GRINDERS

•ELECTRONIC FANS

•IRONS

CONSUMER ELECTRONICS

• TVs

•AUDIO-VIDEO SYSTEMS

•ELECTRONIC ACCESSORIES

•PCs

•MOBILE PHONES

•DIGITAL CAMERAS

•DVDs

•CAMCORDERS

CONSUMER DURABLES

What are Consumer Durables ?

INDUSTRY ANALYSIS

• India fifth largest consumer durable Market

• Market is expected to reach US $12.5 billion by FY 15 from US $7.3 billion in FY 12.

• Urban and rural market growing at the rate of 15% on average

• Urban growth driven by new technology innovative products

• Rural market has recently shown a 30% growth rate in demand for home appliances

• Demand likely to rise in the coming years- Government of India Investment in rural electrification

65%

35%

SHARES IN THE CONSUMER

DURABLES MARKET IN INDIA (FY

14)

URBAN

RURAL

STRENGTH WEAKNESSES OPPURTUNITIES THREATS

Presences of established distribution networks in both rural and urban areas

Demand is seasonal and high during festive seasons

Lowerpenetration level of White goods compared to other developing companies

Higher import duties on raw materials imposed

Presences of well known Brands

Poor Governmentspending on infrastructure

Rapid urbanization

Cheap import from China

Increase inmarket share by the organized sector visa vise the unorganized sector

Low purchasing power of customer

Increasing purchasing power of consumer and easy availability of Finance

Poor infrastructure ;scarcity of power supply

SWOT ANALYSIS OF CONSUMER DURABLES HOME- APPLIANCES SECTOR: INDIA

MAJOR PLAYERS IN INDIA

LG

1.Product

• Product differentiation: AC and Microwave

• Product localization: regional language menus

• First to introduce gaming in TVs.

2. Price

• Pricing strategy: cost + fixed markup

LG3. PLACE

Regional Distribution model in India Quicker rotation of stocks- strategy of stock rotation LG Electronics controls 114 local subsidiaries in India

4.PROMOTION

LG promotes its products through Newspaper, T.V., Radio, hording and taking part in events .

LG going beyond traditional routes of marketing campaigns by logging on social media platforms to tap young consumers.

Sponsored 1999 Cricket World Cup as well as 2003

LG- STP Focus on the premium segment of the market-greater margin

opposed to volumes

SEGMENTATION TARGET POSITION

•Consumer durables: Home appliances

•Upper class segment•Consumer more concern of life style product.•Consumers who want quality product at the best price.• Consumers who are more concern of safety and health issues.•Now shifting to mid class segment-mass market product.

•Tagline Life’s Good•Product with health benefits•Brand is young, vibrant and premium•Differentiated product using technology and health benefits.

• Refrigerator• AC• Microwave oven• Washing Machine

• Vacuum Cleaner• Home

entertainment• Camera

• Monitor• Cell phone

• Pen drive• Water purifier

BCG Matrix Of LG

S

W

O

T

I. Strong presence in LED segment (24.2%)

II. Strong Distribution network (20,000 retail points) and after sales service

III. Strong focus- technology and quality

IV. High Advertising Budget (550-600 Cr.)

V. Good product features and value for money

I. Low profit margins within the category

II. Late entrant into audio market (17.3% MS)

III. R&D challenges from Korean counterparts

I. Fast growth rate of home appliances-emerging market

II. Growing rural market (39.8%)III. Upgrade shift (from CRT-LCD;

LED)

I. Emerging domestic players in the market

II. Highly competitive industry dynamics

III. Substitutes (Laptops & Mobiles)IV. False green claims can erode

brand value and consumer trust

S.W.O.T. ANALYSIS OF LG

21%

22%14%9%

13%21%

FLAT PANEL TVLG

SONY

VIDEOCON

PANASONIC

OTHERS

28%

21%19%

10%

23%

ACLG

SAMSUNG

VOLTAS

HITACHI

OTHER

23%

20%3%16%

18%

20%

REFRIGERATORLG

SAMSUNG

OTHERS

VIDEOCON

GODREJ

WHIRLPOOL

29%

27%15%

11%17%

MICROWAVE OVEN

LG

SAMSUNG

WHIRLPOOL

GODREJ

OTHERS

Market Share

Source: Economics Times

Source: Economics Times

Which company do you feel is a strong competitor of LG ?-Samsung

Which factor do you consider while purchasing a home appliance ?-Product features

You came across LG from :-TV ads

From where do you prefer shopping ? -Authorized dealers

Rate LG products ?-Good