A

DISSERTATION PROJECT REPORT

ON

MARKET ANALYSIS OF LG CONSUMER DURABLES

A proposal for dissertation submitted in partial fulfillment of the requirements for the degree of Bachelor of Business Administration

Submitted ByPradip Shivpujan Vishwakarma

PRN no:- 07108004149

Study Center

Ramdhar Maheshwari Lions Business School.

SV ROAD, Sunder Nagar, Malad(W), Mumbai:-400064.

Guided byProf Swati Dixit

Faculty (Marketing)

SUBMITTED TO

Tilak Maharashtra Vidyapeeth

Gultekadi,pune:- 37

Phone no:24403000/24264644

Year

1

2010-2011

A

DISSERTATION PROJECT REPORT

ON

MARKET ANALYSIS OF LG CONSUMER DURABLES

Guided by Prof Swati Faculty (Marketing)

Submitted By

2

Pradip Shivpujan VishwakarmaPRN no:-07108004149

ACKNOWLEDGEMENT

It is indeed of great moment to pleasure to express my senses of per found gratitude &

indebtness to all the people who have been instrumental in making my tanning a rich

experience. I got the opportunity to do a challenging project in LG ELECTRONIC (INDIA)

The project is the important part of our study and gives us a real practical exposure to the

corporate world and it is almost impossible to do the same without the guidance of peoples

in and around us. Similarly while doing the topic “Market Survey on LG consumer

durables as a dissertation trainee I took many my projects in help.

It gives me immense pleasure to acknowledge LG ELECTRONICS

INDIA Ltd., which has been nice enough to give me a chance to do my dissertation project

providing me wonderful support through out my training period and afterward.

3

DECLARATION

I will take pleasure in declaring that the dissertation project work that is

undertaken by me is an original and authentic work done by me. This

dissertation project is being submitted by me for the partial fulfillment for

award of Bachelor of Business Administration from Tilak Maharashtra

Vidyapeeth , Pune

Pradip Shivpujan Vishwakarma

PRN no: 07108004149

4

5

TABLE OF CONTENTS

Title Pg. No.

EXECUTIVE SUMMARY 6

OBJECTIVE OF THE STUDY 7

SCOPE OF THE STUDY 8-9

INTRODUCTION 10-12

BRAND IN CONSUMER ELECTRONICS SECTOR 13-14

HISTORY OF THE COMPANY 15-19

GLOBAL OPERATION 20-21

BUSINESS AREA & MAIN PRODUCTS 22-23

COMPANY LOGO 24-25

LG BRAND IDENTITY 26

INTERNAL CULTURE OF LG 27-28

QUALITY INNOVATION 29

CODE OF CONDUCT OF LG 30

LG INDIA 31-32

INDIA CHALLENGES 33-34

MAJOR KEY SUCCESS FACTOR 35

STARTEGIES ADOPTED 36

LG MARKET SHARE OF CONSUMER APP 37-40

DISTRIBUTION & MARKETING 41

CUSTOMER SERVICE 42-43

RESEARCH METHODOLOGY 45-46

DATA COLLECTION METHODS 47-48

ANALYSIS 49-55

RECOMMENDATION & SUGGESTION 56

LIMITATION 57

BIBLIOGRAPHY 58

CONSUMER SURVEY QUESTIONNAIRE 59-60

EXECUTIVE SUMMARY

Indian Consumer durables market used to be dominated by few domestic players like godrej Voltas

allwyn and kalvinater. But post liberalization much foreign company have entered into Indian market

dethroning the Indian player and dominating Indian market the major categories in the market CTV,

REFRIGRATOR, AIR CONDTIONERS AND WASHING MACHINE

India being the second largest growing economy with huge consumer class has resulted in

consumer durables as the fastest growing industries in India LG, SAMSUNG the two Korean companies

has been maintaining the lead in the industries with LG being leader in almost all the categories.

The rural market is growing faster than the urban market, although the penetration level is much

lower .The CTV segment is expected to the largest contributing segment to the overall growth the

industry. The rising income levels double-income families and consumer awareness are the main growth

drivers of the industries.

Consumer durables major LG Electronics India Pvt Ltd (LGEIL) will invest nearly Rs 500 crore in India

this year in research and development, brand-building and other marketing initiatives.

The company, having a turnover of Rs 9,500 crore and market share of 26 per cent, is investing Rs 360

crore on brand-building and other marketing initiatives and around Rs 140 crore on research and

development, besides launching new platforms in information technology and related areas,

LG’s innovative ‘211 campaign’ to provide quality after-sales service, will also be expanded from the

existing 22 to 40 cities by next month, The campaign, for which IT infrastructure has been set up,

includes the company’s response to customer complaint within two hours. The fixing time for complaints

varies from one hour to a maximum of 24 hours.

6

OBJECTIVE OF THE PROJECT

Primary objective

The main objective of filed survey during the project was to find out the market share of the LG

and also calculate the display share.

Find out the positional dealer who can sale the LG product in large volume.

The main objective of research was to identify potential dealer and development these dealer. So

LG can make them their direct dealer.

This will ease the dependence on the some big dealer like Mumbai and Mahaveer electronics.

Find out the problem faced by the dealer in sales and the distribution.

Secondary objective

The Objective was to find out that how far the exhibitions are helpful in branding,

While purchasing the consumer durables which parameter is most important for the consumer?

Do the consumers prefer the financial facility for buying consumer durable?

How frequently consumers change the consumer durable?

To enhances the knowledge of consumer durable market.

To increases the knowledge consumer durable product of LG.

To enhances the knowledge about the marketing and branding activity.

7

SCOPE OF PROJECT

This project gives me great exposure to the consumer durable market because it includes product

knowledge and the filed job in which I have visited the store comes under the region of Pune. During this

project I also took part in the exhibition of LG which held for the purpose branding and awareness of LG

product. This project helps me to know the market practically. My job was during this project to see the

market share and also the display share of the LG product in the store. LG always insist the 50% display

share of LG product because LG believes that “JO DIKHTA HAI WO BIKTA HAI”.

While visiting the shops we

1. Calculated the display share of the LG product in every shop.

2. Collected the data of actual monthly sale of the LG products in

few shops.

3. Checked the availability of LG catalogue and the POPs in the

store.

4. Found out the problems that the dealer are facing while selling

the LG products.

5. Found out the customer response for LG products by asking

the owner of the shop.

6. Found out the distributor name from who they were

purchasing their products and also whether they have direct

dealership and which brand.

7. Checked whether demo calls are attended or not

8

Key findings:-

1. By calculating the display share we found that in most of store LG has 50% display share almost

all categories.

2. By the actual monthly sale of particular store we came to know the capacity of the store and how

much product can they sale.

3. It helps us to know that weather dealer is capable of being a direct dealer of LG or not and it also

helps to find out the new dealer who are capable of being the dealer of LG.

4. We also came to know while visiting the shops that there was big problem of after sale service.

5. Many dealers were facing the problem of after sale service because there is no follow up calls

from LG.

6. Demo calls also not done properly.

9

INTRODUCTION

Before the liberalization of the Indian economy, only a few companies like Kelvinator, Godrej,

Allwyn, and Voltas were the major players in the consumer durables market, accounting for no less

than 90% of the market. Then, after the liberalization, foreign players like LG, Sony, Samsung,

Whirlpool, Daewoo, and Aiwa came into the picture. Today, these players control the major share of

the consumer durables market.

Consumer durables market is expected to grow at 10-15% in 2007-2010. It is growing very fast

because of rise in living standards, easy access to consumer finance, and wide range of choice, as

many foreign players are entering in the market

With the increase in income levels, easy availability of finance, increase in consumer awareness, and

introduction of new models, the demand for consumer durables has increased significantly. Products

like washing machines, air conditioners, microwave ovens, color televisions (CTVs) are no longer

considered luxury items. However, there are still very few players in categories like vacuum cleaners,

and dishwashers

Consumer durables sector is characterized by the emergence of MNCs, exchange offers, discounts,

and intense competition. The market share of MNCs in consumer durables sector is 65%. MNC's

major target is the growing middle class of India. MNCs offer superior technology to the

Consumers whereas the Indian companies compete on the basis of firm grasp of the local market,

their well-acknowledged brands, and hold over wide distribution network. However, the penetration

level of the consumer durables is still low in India.

10

Classification of consumer durables sector

1. Consumer electronic include vcd/dvd, home theatre, music player, color television (CTVs), cameras,

camcorders, portable audio, Hi-Fi, etc

2. White goods include dishwashers, air conditioners, heaters, washing machines, refrigerators, vacuum

cleaners, kitchen appliances, non-kitchen appliances, microwaves, built-in appliances, Tumble dryer,

personal care product etc.

3. Moulded luggage include plastics

4. Clocks and watches

5. Mobile phones

Scope

1. In term of purchasing power parity (ppp), India is the 4th largest economy in the world and overtake Japan in the near future become the 3rd largest.

2. Indian consumer durable market is expected to reach $400 billion by on 2010

3. India has the youngest population amongst the major countries. There are lot of people in the different income categories nearly the two third population is below the age of 35 and nearly 50% is below 25.

4. There are 56 million people in middle class, who are earning us$4,400-US$21,800 a year. And there are 6 million rich household in India.

5. The upper-middle and high-income household in urban areas are expected to grew to 38.2 million in

2007 as against 14.6 million in 2000.

11

Opportunity

1. In India the penetration level of white goods is lower as compared to other developing countries.

2. Unexploited rural market.

3. Rapid urbanization.

4. Increase in income level, i.e.increase in purchasing power of consumers.

5. Easy availability of finance.

Threats

Higher import duties on row materials.

Cheap imports from Singapore, China and from other Asian countries.

12

BRANDS IN CONSUMER ELECTRONICS SECTOR

MNCs NATIONAL REGIONALLG )SAMSUNG ) KOREA ONIDA BUSHHYUNDAI ) VIDEOCON CROWN

BPL SALORATCL ) CHINA GODREJ T-SERIESHAIER ) VOLTAS WESTON

IFB BELTAKPHILIPS ) HOLLAND OSKAR

PANASONIC )SHARP )HITACHI )SANSUI ) JAPANAKAI )AIWA

WHIRLPOOL )ELECTROLUX

13

TODAY Consumer durables sector is characterized by the emergence of MNCs, exchange offers,

discounts, and intense competition. The market share of MNCs in consumer durables sector is 65%.

MNC's major target is the growing middle class of India. MNCs offer superior technology to the

LG, SAMSUNG the two Korean companies has been maintaining the lead in the industries with LG

being leader in almost all the categories.

The company, having a turnover of Rs 9,500 crore and market share of 26 per cent, is investing Rs 360

crore on brand-building and other marketing initiatives and around Rs 140 crore on research and

development, besides launching new platforms in information technology and related areas,

LG Electronics is one of the leading companies in the field of electronics with a global presence in

many countries. . Before briefing, I have divided the introduction part into three main sub parts.

1. LG Global

2. LG India

3. LG Pune

14

HISTORY OF COMPANY

The company was originally established in 1958 as Gold Star, producing radios, TVs, refrigerators,

washing machines, and air conditioners.

The LG Group was a merger of two Korean companies, Lucky and Gold Star, from which the

abbreviation of LG was derived. The current "Life's good" slogan is a backronym. Before the corporate

Name change to LG, household products were sold under the Brand name of Lucky, while electronic

products were sold under the brand name of Gold Star. The Gold Star brand is still perceived as a

discount brand.

In 1995, Gold Star was renamed LG Electronics, and acquired Zenith Electronics of the United State.

15

1958-1969-GoldStar The Electronics Industry Dream

1970-1979-GoldStar symbol of the Technology

1980-1988:- INTERNATIONALIZATION

16

1989-1994-INOVATION

1995-1998- GLOBAL LEADERS LG ELECTRONICS

17

1999-2003-DIGITAL MANAGEMENT

2004-2006 GREAT PEOPLE GREAT DESIGN

18

2007-THE PEOPLE COMPANY

The LG Group was a merger of two Korean companies, Lucky and Gold Star, from which the

abbreviation of LG was derived. The current "Life's good" slogan is a backronym. Before the corporate

Name change to LG, household products were sold under the Brand name of Lucky, while electronic

products were sold under the brand name of Gold Star. The Gold Star brand is still perceived as a

discount brand.

In 1995, Gold Star was renamed LG Electronics, and acquired Zenith Electronics of the United States.

19

GLOBAL OPERATION

LG Electronics is playing an active role in the world market with its assertive global business policy. As

a result, LG Electronics controls 110 local subsidiaries in the world with around 82,000 executive and

employees.

LG Group

1. LG.Philips LCD

LG Philips, Poland

LG Philips LCD, one of the world’s leading innovators in thin-film transistor liquid crystal display (TFT-LCD) technology, established an LCD production facility in Kobierzyce near Wrocław.

2. LG Chemical

LG Chem is a manufacturer, supplier, and exporter of petrochemical goods, plastics, flooring and

automobile parts. The Company operates three main divisions: Chemicals and Polymers,

Industrial Materials, and Information and Electronic Materials.

3. LG Telecom

LG Telecom (Korean: LG 텔레콤) was a South Korean telecommunications and Mobile phone

operator controlled by the LG Group, one of the country's largest chaebol.

20

4. LG Twins

LG Twins Baseball Club (Korean: LG 트윈스 야구단) is a Korea Professional Baseball team

based in Seoul, South Korea. The club was known as the MBC Blue Dragons owned by

the Munhwa Broadcasting Corporation until 1989, when they were taken over by the LG Group.

The LG Twins play their home games at Jamsil Baseball Stadium, which they share with

the Doosan Bears.

5. LG Dacom

LG Dacom provides high-speed Internet and telephone services to broadband-hungry Koreans.The company is a leading Korean ISP and one of the largest providers of consumer Internetservice in Asia. It also provides residential domestic and international long-distance, as wellas digital leased line services over its nationwide voice network. For business customers,LG Dacom offers Internet and related data services under the e-Biz brand among others.The company provides digital voice service in the form of VoIP computer telephony, as well as digital television programming over computer lines via IPTV (Internet protocol television). It is controlled by its largest investor, LG Group, which owns a 30% stake.

BUSINESS AREAS AND MAIN PRODUCTS

Mobile communications

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(a) CDMA Handsets,

(b) GSM Handsets,

(c) 3G Handsets,

(d) Cellular Phones

Digital appliance

a) Air Conditioners,

b) Refrigerators,

c) Microwave Ovens,

d) Washing Machines,

e) Vacuum Cleaners,

f) Home Net,

g) Compressors for Air Conditioners and Refrigerators

Digital display

a) Plasma TVs,

b) LCD TVs,

c) Micro Display Panel TVs,

d) Monitors,

e) PDP Modules,

f) OLED Panels,

g) USB Memory,

h) Flat Panel Computer Monitors

Digital media

a) Home Theater Systems,

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b) DVD Recorders,

c) Super Multi DVD Rewriters,

d) Notebook PCs,

VISION

Global Top 3 by 2010

Global Top 3 Electronic/Telecommunication company

GROWTH STRATEGY

“Fast innovation, Fast growth”

CORE COMPETENCY

“Product leadership, Market leadership, People leadership”

CORPORATE CULTURE

No excuse, “we” not “I”, Fun workplace

SLOGAN

"Life's Good" represents LG's determination to provide delightfully smart products that will make

your life good.

23

LG LOGO

The LG Electronics Life's Good signature consists of the LG logo,

seal, and the slogan, "Life's Good" set in Charlotte sans typeface curved around the LG symbol. The

curving of the slogan reinforces LG's personality and uniqueness. The consistent usage of this signature

clearly establishes the unique identity of the company and unifies every division and product from LG

Electronics across the globe.

24

THE SYMBOL

The symbol of LG is the face of future. The letter “L” and “G” in a circle symbolizes world, future,

youth, humanity & technology. LG philosophy is based on humanity. It also represents LG’s efforts to

keep close relationship with our customers around the world.

The symbol consists of two elements.

1. The logo in LG gray

2. The stylized image of human face in the unique LG red color.

Red color represents our friendliness and gives a strong impression of LG’s commitment to deliver the

best.

The circle symbolizes The Globe. The stylized image of a smiling face in the symbol conveys

“Friendliness and Approachability”.

The one eye on the symbol represents “Goal-oriented, Focused & Confident”.

The slogan of LG is “Life’s Good”. It expresses“ Brand’s Value , Promises, Benefits , Personality .

25

LG BRAND IDENTITY

The brand of LG is delightfully smart. LG strives to enhance the customer’s life and lifestyle with

intelligent features, institutive functionality and exceptional performance.

The brand platform:-

The LG brand is composed of four basic elements –

1. Value

2. Promise

3. Benefits

4. Personality

The Brands core Value that never changes.

a. Trust,

b. Innovation,

c. People

d. Passion

The benefits that are consistently delivered to the customer includes

Reliable products

Simple design

Ease of use

Extraordinary Experience

Personality describes the human characteristic that are expressed to the customer through

Trustworthy, Considerate

26

Practical, Friendly

THE INTERNAL CULTURE OF LG

LG practices four cultures

1. Learning Culture

2. Boundary less Environment

3. A Carrier

4. Growth

According to LG, the Learning Culture continuously helps the employee to learn more and more to

develop the habit of continuous learning.

Boundary less Environment means that there is no difference between the levels of employees. There is

transparency between the work and mutual understanding between all the employees.

A carrier is highly growing in LG and one who is the employee can develop their carrier largely. A new

comer will feel fully comfortable in the company and for a new comer the company is very helpful in the

overall growth of personality.

Growth in LG is very high for those who are in the company and for those who want to join in LG. The

company is growing with fast innovation and the BLUE Ocean strategy is one of the examples of growth.

27

Mission

The mission of LG is to provide the customers with utmost satisfaction through leadership.

The fundamental policy of development is to secure product leadership that the

Customers may have the utmost satisfaction.

Product Leadership

We are focusing on six development areas to become the product leader.

1. New Machine

2. Reliability

3. Conventional Installation

4. Environment Friendly Product

5. Low Noise & Vibration

6. Energy Saving

28

QUALITY INNOVATION

The policy of quality assurance is to provide customers with utmost satisfaction by supplying zero

defects.

LG proceeds in a hierarchal manner. It is named as “LG WAY”.

From top to bottom:

No.1 LG – is the VISION

“Jeong-DO” Management is LG’s unique application to ethics. LG will succeed through fair

management practices and constantly developing our business skill.

a) Honest with our customer

b) Providing great values to customer through constant innovation & and development.

c) Equal opportunities

d) Equal Treatment

Management Principle - Creating value for customer

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CODE OF CODUCT OF LG

1. Responsibility and obligations to customers :• Respect for Customers• Creating Value • Providing Value

2 Fair competition• Pursuit of Free Competition• Compliance with Laws and Regulations

3 Fair Transaction :• Equal Opportunity • Fair Transaction Procedure• Support and Aid for Business Partners

4 Basic Ethics for Employees• Basic Ethics• Completion of Duty • Self Development• Fairness in Performance• Avoidance of conflict with company interest

5 Corporate Responsibilities to employees• Respect for human dignity• Fair Treatment• Promoting Creativity

6 Responsibilities to society and country

• Rational Business Development• Protection of stock holder interest• Contribution to social development• Environmental Conservation

30

LG INDIA

LG Electronics India Pvt. Ltd., a wholly owned subsidiary of LG Electronics, South Korea was

established in January 1997 after clearance from the Foreign Investment Promotion Board (FIPB). LG

set up a state-of-the art manufacturing facility at Greater Noida, near Delhi, in 1998, with an

investment of Rs 500 Crores.

LG corporate office is located at Plot no.51, Udyog Vihar, Kasna Road, Greater Noida, India.

This facility manufactured Color Televisions, Washing Machines, Air-Conditioners and Microwave

Ovens.

''Company is setting up a chain of exclusive premium showrooms. LG plans to launch 60 premium Brand

Shoppes by the end of the first quarter of this year. At present, LG has a total of 83 LG stores across the

country, of which 45 are shoppes and 38 are exclusive stores. Brand shoppes will be placed in the

premium segment and the target audience will comprise buyers interested in premium and high end

products.

LG Brand Shoppe goes beyond the concept of a normal exclusive store by having a more interactive

environment and additional lifestyle orientation on display so that the customer can actually experience

the LG products in his or her own home settings.

LG Electronics India Ltd (LGEIL), consumer durables leader with 27% market share, is planning a brand

new image. To attract inspirational and young consumers across India, company will roll out a new

marketing strategy. The exercise will cost the company Rs 360 crore.

LG Electronics India is the fastest growing company in the consumer electronics, home appliances, and

computer peripherals industry today.

LG Electronics is continually providing, superior technology products & value for money to more than

50 lakh households in India. LG EIL is celebrating the 11th anniversary this year.

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LG Soft India the innovation wing of LG Electronics in Bangalore is LG Electronics' largest R&D

centre outside Korea. We at LGSI focus on niche technology areas such as mobile application

development, digital video broadcast and biometrics software and support LG Electronics with our

expertise. Motivated by a passion for technology, a strong work culture and loyalty to the organization,

we are determined to see LG become one of the top three brands globally.

Prominent consumer electronic company, LG Electronics Inc. has said that it expects the sale of its

products in India to up by 15 per cent in 2010. Moon Bum Shin, managing director of LG Electronics

India has said that the company has earmarked 4.8 billion rupees for investment purpose in India this

year. The said money will be used to market as well as manufacture new products.

LG Electronics, which is originally a South Korean Company with branch in India, informed that its sales

of GSM mobile phones, color televisions, air conditioners and other household goods in the Indian

market was to the tune of 95 billion rupees ($2.4 billion) in 2007. As per Shin's estimate, the sales in

2010 would be around 110 billion rupees.

In order to achieve its target, Shin said LG Electronics will concentrate on catering to the high-end

consumer market which will help boost sales this year. India churns out six (6) per cent of LG Electronics

global revenues of $42 billion. The Indian branch of LG exports to 40 countries.

32

CHALLENGES IN INDIA

The challenges faced by LG when entered in Indian market

1. Low brand awareness about LG in India.

2. One of the last MNCs entered in India (Samsung, Panasonic entered in 1995 in India).

3. High import duty

4. Compitition from local market players and other MNCs in consumer durable segment.

5. Price sensitiveness of the Indian consumer

LGEI over comes these challenges to emerge as

Innovative marketing strategy

1. Launch new technologies in consumer electronic and home appliances.

2. LG was the first brand to enter in cricket in big way a way, by sponsoring the 1999 world cup

followed it up in 2003 as well.

3. LG brought in four captains of the Indian cricket team to endorse its products. LG invested more

then US$ 8 million on advertising and marketing in this sport.

4. LG has differentiated its product using technology and health benefits. CTV has “Golden eye

technology” Air conditioner has “Health air system” and microwave ovens have the “Health

wave system”.

Local and efficient manufacturing to reduce the cost

To overcome high import duties LG manufactures TV refrigerator in India at manufacturing facility at

Noida and Pune. LGEI had already commissioned contract manufacturing at Mohali Kolkata and Bhopal

for CTVs. This has helped LGEI to reduce cost. LGEI implementing the “Digital manufacturing system”

(DMS) as the cost cutting innovation this system is follow-up to the six sigma exercise LGEI had initiate

earlier.

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R&D potential

LG has the research and development facilities in Bangalore and Pune. Both the unit carry out R&D

department for the domestic as well as the parent company it also dose customize R&D for the specific

countries to which it export product.

Regional channel and wide distribution network

1. LG has adopted the regional distribution channel in India. All the distributers work directly with

the company. This has resulted in quicker rotation of the stock and better penetration into B, C, D,

class market.

2. LG also follows the stock rotation policy rather then dumping stock on channel partners.

Product localization:-

1. Product localization is the key strategy used by the LG

2. LG came out with Hindi and regional language menus on its TVs.

3. Introduced the low-priced “Cineplus” and “sampooma” for the rural market.

4. LG was the first brand to introduce gaming in TVs in continuations of its association with cricket

LG introduce cricket game in CTVs

34

MAJOR KEY SUCCESS FACTORS

1. Innovative marketing - LG was the first brand to enter cricket in a big way, by sponsoring the

1999 World Cup and followed it up in 2003 as well.

2. Local and efficient manufacturing to reduce cost - To overcome high import duties, LG

manufactures PC monitors and refrigerators in India at its manufacturing facility at Noida, Delhi.

3. Commissioned contract manufacturing at Mohali, Kolkata and Bhopal for CTVs.

4. Product localization - Product localization is a key strategy used by LG. It came out with Hindi

and regional language menus on its TV.

5. Regional distribution model - This has resulted in quicker rotation of stocks and better penetration

into the B, C and D class markets.

6. Leveraging India’s IT advantage - LG Electronics has awarded a contract to develop IT solutions

to LG Soft India (LGSI). The project involves development and support for ERP, SCM, CRM and

IT-enabled services for LG.

35

STRATEGIES ADOPTED BY THE ORGANIZATION

LG follows 10 commandments which are as follows.

1. Foster working environment-5S Environment

2. Fast execution is key to success

3. Transparent and fast communication-open communication

4. Update market -knowledge –Demographics

5. Win –Win relationship with the trade partners

6. Customer is the king

7. Even Billing –Road to ach supplier A

8. Be in touch with the market (70% Market, 30% Office).

9. Plan and Execute annual marketing Calendar-Time to market

10. Display share of 50% -to get 50% consumer share.

36

LG MARKET SHARE OF CONSUMER APPLIANCE AND CONSUMER ELECTRONIC:-

LG market share of consumer appliances and consumer electronic:-

37

LG position of CTV in various states in India

LG position of AC in various States in India

38

LG position of Audio & Home Theater in various in India

LG position of DVD in various in India

39

LG position of MWO in various states in India

This analysis is based on the ORG survey conducted by LG which represent the LG position of

different consumer durables in various states in India. I select different brand in different category as per

the market share and the demand of product in market. This analysis represents the LG market position

during the period of March 2010. It shows that LG has captured maximum market share almost in every

category. LG and Samsung have the maximum market in consumer durable market but LG dominate the

almost all the category in consumer durable.

Prominent consumer electronic company, LG Electronics Inc. has said that it expects the sale of its

products in India to up by 15 per cent in 2010. Moon Bum Shin, managing director of LG Electronics

India has said that the company has earmarked 4.8 billion rupees for investment purpose in India this

year. The said money will be used to market as well as manufacture new products.

LG Electronics, informed that its sales of GSM mobile phones, color televisions, air conditioners and

other household goods in the Indian market was to the tune of 95 billion rupees ($2.4 billion) in 2007. As

per Shin's estimate, the sales in 2010 would be around 110 billion rupees.

 In order to achieve its target, Shin said LG Electronics will concentrate on catering to the high-end

consumer market which will help boost sales this year. India churns out six (6) per cent of LG Electronics

40

global revenues of $42 billion. The Indian branch of LG exports to 40 countries. Shin remarked that the

company was targeting an increase of exports to $300 million in 2010 from $230 million in 2007.

.The key strategies being implemented include increasing the number of its regional offices from six to

eight. LG has split its southern regional office into two, one comprising the states of Tamil Nadu and

Kerala and the other consisting of Andhra Pradesh and Karnataka. In addition, it has split one of its

northern regional offices by making Uttar Pradesh a separate region after spinning it out from Delhi

NCR. The other four regional offices take care of East, Gujarat and Madhya Pradesh, Maharashtra & Goa

and Punjab, Haryana & Rajasthan respectively.

In the coming year, LG is also repositioning its marketing spends, resulting in a significant increase in its

mass media expenditure for better brand visibility. LG had a marketing budget of Rs 320 crore in 2007

with a 60:40 split in favor of below-the-line activities. Next year, the company plans to increase the share

of mass media even as overall marketing spends would be raised by just about 10-15%.

DISTRIBUTION AND MARKETING

The company has number of dealers and warehouses. They have LG exclusive shopee. For the marketing

of the products a number of activities are followed

1. Exhibitions are conducted from time to time.

2. Society and college activities are conducted.

3. Hoarding, Posters, banners are used so as to grab the attention of the costumers.

4. Day to day advertisement in leading newspaper.

5. Discount at festival time.

6. For dealer relationship they arrange dealer meting at several time in the year

7. LG divide dealer in gold silver etc. category to know the performance of the dealers.

8. They have their sales persons at various sub dealer store and at mordent trade store for

particularly for the promotion of the LG product.

9. LG also uses the radio FM for the promotion activities.

10. Also provide capon and scratch card for festive season.

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CUSTOMER SERVICE

The best and the biggest international brands are here in India –but the irony if it all: where is the after-

sales-service? So integral to a brand, so critical for its success and so taken for granted in developed

markets! In India, after sales service is, for want of a better description, the pits. So what’s stopping the

best companies from pulling out all the stops when it comes to providing the best service? Do customers

expect for too much? Or is it that in India they don’t really care. Brand Equity fanned out to MNC as well

as Indian consumer durable companies, stockiest and dealers, analysts and market researchers to get a

feel of what’s really keeping after sales from being used as a cutting edge marketing tool in pushing

products across categories.

Customers support following the purchase of a product or service. In some cases, after-sales service can

be almost as important as the initial purchase. The manufacturer, retailer, or service provider determines

what is included in any warranty (or guarantee) package. This will include the duration of the warranty

traditionally one year from the date of purchase, but increasingly two or more year’s maintenance and/or

replacement policy, items included/excluded, labor costs, and speed of response. In the case of a service

provider, after-sales service might include additional training or helpdesk availability. Of equal

42

importance is the customer's perception of the degree of willingness with which a supplier deals with a

question or complaint, speed of response, and action taken.

LG also had a big problem of after sale service in India. During my project I also came to

know that after sale service becomes the big issue in Pune region. Customers as well as dealer were

facing the problem of after sale service. Because of this problem many dealer in Pune region were not

ready to sale LG product. So it becomes the big issue.

But LG has taken some solid steps towards improving customer’s perception and experience of after

sales service. Because it very important in competitive market to provide the best service.

L G Electronics has signed a memorandum of understanding with 23 Industrial Training Institutes to

strengthen its after sales service in India.

The company aims to recruit 10,000 people by the end of this year as a part of its branding strategy to

focus on service and move away from discounting.

L G Electronics has identified eight states with high after sales service call rates to ink the deals with the

ITI. Y V Verma, director HR and management system, LG Electronics said, "The Company was trying to

find a solution for effective after sales service since last two years. There is a huge need of trained

manpower for the after sales service to align with the company's expansion and focus on the GSM

mobiles and the personal computer segments."

1. In the initial phase the company has entered into agreements with ITIs in the states like

Maharashtra, Gujarat, Delhi, Punjab, Assam, and Karnataka and is in the last leg of signing

with Uttar Pradesh.

2. L G Electronics, with 1200 service centers, has already recruited 300 students and plans to beef

up the number to 10,000 by the year-end.

3. "The company has offered a scholarship to the selected students for the last six months of their

training programme,"

4. The company will invest Rs 8 crore (Rs 80 million) in employee development programme this

year with an aim to attain a 8 per cent attrition rate.

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5. The company moved away from the discounting strategy since last year and is putting thrust on

the quality and service in its brand communication to position LG as a premium consumer

electronics brand.

6. At the top, the Service Division in Korea reports to the Global CMO. (as mentioned in Dermot’s

public interview in ET on Wednesday). This shows commitment that Service must be made into a

marketing differentiator, and leveraged thus.

7. LG has the widest service network across the country; some estimates put it at a significant

multiple of service-infrastructure from our nearest competitor. While the sale size may also be a

nice multiple from nearest, it shows the company is ready to put our money where our mouth is.

8. The company has introduced a 211 service - once you register your complaint, we will call you

back in 2 hours (hence 2), set up an appointment for the next convenient day for you (hence the

first 1), and show up in the promised 1-hour slot (hence the second 1). If the next convenient day

for you is the next day, that’s great too. It’s a disruptive action in an industry (including LG)

having traditionally shied away from its service responsibilities, and thus not leveraging any

mileage from it.

9. The company is promoting 211 through ATL, probably the first time after-sales service is being

communicated in this fashion by any product company. You may have seen the TV commercial

or heard the radio advert or seen the newspaper ad or in-shop posters, both of which revolve

around prompt response.

10. The first LG-owned service centre opened in Gurgaon. (Service in India generally works through

authorized service centers, in LG’s case they work exclusively for LG.) A company-owned

service centre tries that much harder, knows things better, and can even contribute as a revenue

center.

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RESEARCH METHODOLOGY

Research methodology is considered as the nerve of the project. Without a proper well-organized

research plan, it is impossible to complete the project and reach to any conclusion. The project was based

on the survey plan. The main objective of survey was to collect appropriate data, which work as a base

for drawing conclusion and getting result.

Therefore, research methodology is the way to systematically solve the research problem. Research

methodology not only talks of the methods but also logic behind the methods used in the context of a

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research study and it explains why a particular method has been used in the preference of the other

methods

Research design:

Research design is important primarily because of the increased complexity in the market as well as

marketing approaches available to the researchers. In fact, it is the key to the evolution of successful

marketing strategies and programmers. It is an important tool to study buyer’s behavior, consumption

pattern, brand loyalty, and focus market changes. A research design specifies the methods and procedures

for conducting a particular study. According to Kerlinger, “Research Design is a plan, conceptual

structure, and strategy of investigation conceived as to obtain answers to research questions and to

control variance.

Types of research are:

Descriptive Research

The type of research adopted for study is descriptive. Descriptive studies are undertaken in many

circumstances when the researches is interested to know the characteristic of certain group such as age,

sex, education level, occupation or income. A descriptive study may be necessary in cases when a

researcher is interested in knowing the proportion of people in a given population who have in particular

manner, making projections of a certain thing, or determining the relationship between two or more

variables. The objective of such study is to answer the “who, what, when, where and how” of the subject

under investigation. There is a general feeling that descriptive studies are factual and very simple. This is

not necessarily true. Descriptive study can be complex, demanding a high degree of scientific skill on

part of the researcher.

Descriptive studies are well structured. An exploratory study needs to be flexible in its approach, but a

descriptive study in contrast tends to be rigid and its approach cannot be changed every now and then. It

is therefore necessary, the researcher give sufficient thought to framing research.

Questions and deciding the types of data to be collected and the procedure to be used in this

purpose. Descriptive studies can be divided into two broad categories: Cross Sectional and Longitudinal

Sectional. A cross sectional study is concerned with a sample of elements from a given population. Thus,

it may deal with household, dealers, retail stores, or other entities. Data on a number of characteristics

from sample elements are collected and analyzed. Cross sectional studies are of two types: Field study

and Survey. Although the distinction between them is not clear- cut , there are some practical differences,

which need different techniques and skills. Field studies are ex-post-factor scientific inquiries that aim at

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finding the relations and interrelations among variables in a real setting. Such studies are done in live

situations like communities, schools, factories, and organizations.

Another type of cross sectional study is survey result, which has been taken by me. A major strength of

survey research is its wide scope. Detail information can be obtained from a sample of large

population .Besides; it is economical as more information can be collected per unit of cost. In addition, it

is obvious that a sample survey needs less time than a census inquiry. Descriptive research includes

survey and fact finding enquiries of different kinds of the major purpose. Descriptive research is

description of the state of affairs, as it exists at present. The main characteristic of this method is that the

researcher has no control over the variables; he can only report what has happened or what is happening.

The methods of research utilized in descriptive research are survey methods of all kinds including

comparative and co relational methods. The reason for using such needs to be flexile in its approach, but

a descriptive study in contrast tends to be rigid and its approach cannot be changed ever now and then.

DATA COLLECTION METHODS:

After the research problem, we have to identify and select which type of data is to research. At this stage;

we have to organize a field survey to collect the data. One of the important tools for conducting market

research is the availability of necessary and useful data.

Primary data: For primary data collection, we have to plan the following four important aspects.

Sampling

Research Instrument

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Secondary Data - The Company’s profile, journals and various literature studies are important

sources of secondary data.

Data analysis and interpretation

1. Questionnaires

2. Pie chart and Bar chart

Questionnaires:

This is the most popular tool for the data collection. A questionnaire contains question that the researcher

wishes to ask his respondents which is always guided by the objective of the survey.

Pie chart:

This is very useful diagram to represent data , which are divided into a number of categories. This

diagram consists of a circle of divided into a number of sectors, which are proportional to the values they

represent. The total value is represented by the full create. The diagram bar chart can make comparison

among the various components or between a part and a whole of data.

Bar chart:

This is another way of representing data graphically. As the name implies, it consist of a number of

whispered bar, which originate from a common base line and are equal widths. The lengths of the bards

are proportional to the value they represent.

Preparation of report:

The report was based on the analysis and presented with the findings and suggestions. The sample of the

questionnaires is attached with the report itself.

Sampling Methodology:

Details of the sampling methodology, I have made questionnaire. The one is made for the Customer.

No. of questions in questionnaires for customer: 07

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No. of question related to LG product: 03

No. of people met during the research: 200

No. of respondents during the research: 50

Sample unit

Professionals

Business man

Employees

House wife

Working women

Students.

ANALYSIS

Q1. Have you purchased any consumer durable during Exhibitions?

Yes

No

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Inferences

1. 65 % of Customer have not purchased any consumer durable from exhibitions.

2. Only 35 % people have purchased.

3. It shows that consumers are coming in the exhibition for knowledge of product and also they want

to know that weather there is actual price difference in exhibition and shop or not.

4. Consumers also want to compare to the different brand which are available in the exhibition.

5. So exhibitions are more useful to increases brand awareness.

6. People are less interested to purchase product from the exhibition.

Q.2While purchasing consumer durable which parameter influences you?

Price

Product feature

Brand

Service

Durability

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Inference

1. 30% of customer gives importance to price. So it shows that Indian consumers are very price

sensitive. They give more importance to price over the brand.

2. 26% give importance to brand. So price and Brand matter a lots for the costumers. And they are

also want best brand in best price.

3. 19% to product feature Service 16% and durability 9% Service is also a big factor for the

customer they are less interested in the durability.

Q3. From where you prefer buying consumer durables?

Exhibitions

Co.shoppee

Showroom

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Inference:

1. A majority of customers prefer to buy from showrooms. Very less proposition of customers buys

from Exhibitions.

2. 47% customers are prefer to by from the showrooms because the showrooms are more convenient

to customers they also think that these shops give more discounts.

3. People are less interested to buy from the exhibition they only visit the exhibition for price

quotation of the product and the comparison of the product.

Q.4.You prefer to buy from the same as you have mentioned in Q.3 because of

following reasons?

Attractive Price

Service

Demonstrations

Offers

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Inference

1. Customers buy from showrooms because of the service and convenience. These are two main

factors.

2. Customers are preferred to buy from the showroom because of they think that these convenient

store may provide good after sell service.

3. Customer also thinks that there is more chance to bargain and they can get more discounts in

these showrooms.

4. Price also a factor that attract the customer in these showrooms.

Q.5.Which consumer durable you have and of which brand?

CTV

LCD

PLASMA

REF

WM

MW

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AC

Inference

In CTV section maximum customers have Onida, in LCD Sony is the leader, In plasma BPL is the leader, In Ref LG is the leader, MW LG is the leader. In WM there are companies and in AC also.

Q.6. How frequently you change your consumer durables?

1-3 years

3-5 years

5-10 years

More than 10 years

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INFERENCE

1. Customers prefer to change consumer durables within 5-10 years. In India people do not change

consumer durable frequently.

2. 23% customers do not change their consumer durable within 10 year.

3. It represent that Indian consumer do not prefer to change their consumer durable frequently.

CUSTOMER SURVEY FINDINGS

1. Secondary supports play an important role in the customers mind and create awareness among the

customers. The secondary support includes Demonstration, Exhibition & Even Sponsors.

2. From the survey it was found out that the majority of customers don’t buy consumer durables

from exhibitions. They just visit the exhibitions to see the co. latest model.

3. They want to buy from the showrooms or from co. showrooms. For them service is

important .Beside convenience and other factors service is key factor.

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4. Also majority of customers do not want any financing scheme for purchasing the durables.

5. There was heavy rush on weekends so large numbers of ISD’s were appointed that day. Also the

live demo calls helps in selling. Exchange offers also generate sale.

6. Customers are also now very choosy in buying the product and it is important for the company to

make loyal customer of their brand.

7. In survey we found that LG has captured maximum market share in every category. LG

dominates CTV, LCD, and Refrigerator, and Washing machine, category.

8. LG and Samsung have bottle neck competition in TV and REF. category.

9. The product is well aware and it is on top of mind of customer.

10. Customers are also now very choosy in buying the product and it is important for the company to

make loyal customer of their brand.

RECOMMENDATIONS AND SUGGESTIONS

1. Exhibitions do not help to generate so much sells but they should be conducted regularly. This

helps in generating awareness regarding the product in customers which ultimately helps in sales.

2. Also it is helps in advertising for the new products. Like in this exhibition new LCD SCARLET

was advertised. Company should always focus on service.

3. Display share should be increased where there is less than 50% as LG also believes that “JO

DIKHTA HAI WO BIKTA HAI”.

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4. Company should try to improve service. No doubt the company products have technically edge

over competitors but in long run it may hamper the company’s profit.

5. Company should concentrate more on its major drivers LCD, IT, and GSM. Branding and

promotions should be done effectively as it creates a long lasting image in the mind of customers.

6. Company should also cater to the needs of sub dealers as some of the sub dealers have potential

of high sales.

LIMITATIONS

Every study has certain limitations. In my study, also there were certain limitations, which I could not

able to solve.

1. The research was conducted in a very small area.

2. My research work period witness the biggest ups and downs in product sale of different brands,

which affected the perception of the customer. This was biggest drawback of my study.

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3. Time factor was also important for me. I had only 60 days to complete my research, for which a

full-fledged report was insufficient for me.

4. The customer filled the questionnaire mostly in careless manner, so it was difficult to make them

hold for time.

5. I had only found the upper-middle class family to fill up the questionnaire, but generally, an

average middle class family was required for the study.

6. The sample size is also very small which represent my research on consumer behavior

My study is not recognizable in whole INDIA as well as outside Ranchi due to the above limitations

and less area coverage.

BIBLIOGRAPHY

www.lgindia.com

www.google.com

www.wikipedia.com

Business world

58

Business today

LG magazine

Economics times News paper

Times of India

Consumer survey Questionnaire

Name : ____________________________________

Address : ____________________________________ Occupation: ____________________________________

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Age : ____________________________________

Q1. Have you purchased any consumer durable during Exhibitions?

a) Yes

b) No

Q.2While purchasing consumer durable which parameter influences you?

a) Price

b) Product feature

c) Brand

d) Service

e) Durability

Q3. From where you prefer buying consumer durables?

a) Exhibitions

b) Co.shoppee

c) Showroom

Q.4.You prefer to buy from the same as you have mentioned inQ.3because of following reasons?

a) Attractive Price

b) Service

c) Demonstrations

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d) Offers

e) Convenience

Q.5.Which consumer durable you have and of which brand?

a) CTV -------------------

b) LCD -------------------

c) PLASMA -------------------

D) REF -------------------

E) WM -------------------

F) MW -------------------

G) AC -------------------

Q.6. How frequently you change your consumer durables?

a) 1-3 years

b) 3-5 years

c) 5-10 years

d) More than 10 years

Q.7.Do you prefer any financing scheme to purchase consumer durables?

a) Yes

b) No

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