Moni's Lg Marketing Project

8/9/2019 Moni's Lg Marketing Project

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APROJECT REPORT

ONMARKET ANALYSIS OF LG CONSUMER DURABLES &

DEALER DEVELOPMENT

SUBMITTED BY:-

MONI SHANKAR DASEN.ROLL NO. MO108069

MAGNUS SCHOOL OF BUSINESSHYDERABADCONT. NO.- 9398310123



DECLARATION

I declare that this dissertation is the result of my efforts and that

it confirms to University, department and course regulations

regarding cheating and plagiarisms. No material contained within

this dissertation has been used in any other submissions, for an

academic award.

MONI SHANKAR DAS

MBA (marketing)



ACKNOWLEDGEMENTS

I would like to thank all the people who have been actively

involved in carrying out this dissertation and those who have

given me this opportunity to do this dissertation on „ MARKET

ANALYSIS OF LG CONSUMER DURABLES .

It is my proud privilege to express my deep gratitude to my

dissertation guide, prof SUNANDA YADAV and special thanks , for

giving me valuable inputs and guidance that was provided at

every stage of my dissertation.

I am highly obliged to dealers of LG, I am thankful to them

for providing me with necessary information and materials and

without his kind co-operation, help and guidance this dissertation

would not have materialized.

Last but not the least, I express my indebtedness for all

those who have directly or indirectly influenced in completing this

dissertation work.

Moni Shankar das

MBA (Marketing)



CERTIFICATE

This is to certify that the dissertation entitled “market analysis

of LG consumer durables” is a confide research done by

Mr.moni Shankar das under my guidance. To the best of my

knowledge, the dissertation has not been submitted to elsewhere

for any other degree. In my judgment, the work is original. The

dissertation submitted for the partially fulfillment of Master

Degree of Business Administration is adequate to merit

consideration for the award of the degree.

Prof .SUNANDA YADAV

CAMPUS HEAD



CONTENTS

CHAPTER:1- INTRODUCTION

Executive summary

Scope of project

SWOT Analysis

CHAPTER:2- COMPANY PROFILE

History of company

Strategic Analysis

Brand Identity

CHAPTER:3- METHODOLOGY

CHAPTER:4- CONCLUSION

CHAPTER:5- BIBLIOGRAPHY



CHAPTER:1-

INTRODUCTION



Executive summaryIndian Consumer durables market used to be dominatedby few domestic players like Godrej Voltas Allwyn and

Kelvinator. But post liberalization many foreigncompanies have entered into Indian market dethroningthe Indian players and dominating Indian market themajor categories being CTV, REFRIGRATOR, AIRCONDTIONERS and WASHING MACHINES. India being thesecond largest growing economy with huge consumerclass has resulted in consumer durables as the fastestgrowing industries in India. LG, SAMSUNG the two Koreancompanies have been maintaining the lead in the marketwith LG being leader in almost all the categories. Therural market is growing faster than the urban market,although the penetration level is much lower .The CTVsegment is expected to the largest contributing segmentto the overall growth of the industry. The rising incomelevels double-income families and consumer awarenessare the main growth drivers of the industries. Consumerdurables major LG Electronics India Pvt Ltd (LGEIL) will

invest nearly Rs 500 crore in India this year in researchand development, brand-building and other marketinginitiatives. The company, having a turnover of Rs 9,500crore and market share of 26 percent, is investing Rs 360crore on brand-building and other marketing initiativesand around Rs 140 crore on research and development,



besides launching new platforms in informationtechnology and related areas, LG’s innovative ‘211campaign’ to provide quality after-sales service, will alsobe expanded from the existing 22 to 40 cities by next

month, the campaign, for which IT infrastructure hasbeen set up, includes the company’s response tocustomer complaint within two hours. The fixing time forcomplaints varies from one hour to a maximum of 24hours.

Scope of project

This project gives us great exposure to the consumerdurable market because it includes product knowledgeand field survey job in which we visited the LG stores inDelhi. Incidentally Diwali time was nearing during oursurvey period which exposed us to another aspect of product promotion. LG always insist the 50% displayshare of LG product because LG believes that “JODIKHTA HAI WO BIKTA HAI”.

While visiting the shops I

1. Calculated the display share of the LG product in everyshop.2. Collected the data of actual monthly sale of the LGproducts in

few shops.3. Checked the availability of LG catalogue and the POPsin the

store.4. Found out the problems that the dealer are facingwhile selling



the LG products.5. Found out the customer response for LG products byasking

the owner of the shop.

6. Found out the distributor name from who they werepurchasing their products and also whether they have

directdealership and which brand.

7. Checked whether demo calls are attended or not

Key findings:-

1. By calculating the display share I found that in most of store

LG has 50% display share almost all categories.2. By the actual monthly sale of particular store I came toknow

the capacity of the store and how much product canthey sell.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 outthe new

dealers who are capable of being an LG dealer.4. I also came to know while visiting the shops that therewas

big problem of after sales service.5. Many dealers were facing the problem of after saleservice



because there is no follow up calls from LG.6. Demo calls also not done properly.

ABOUT LG

Before the liberalization of the Indian economy, only afew companies like Kelvinator, Godrej, Alwyn, and Voltaswere 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 thepicture. Today, these players control the major share of the consumer durables market. Consumer durables

market is expected to grow at 10-15% in 2007-2008. It isgrowing very fast because of rise in living standards, easyaccess to consumer finance, and wide range of choice, asmany foreign players are entering in the market With theincrease in income levels, easy availability of finance,increase in consumer awareness, and introduction of new



models, the demand for consumer durables has increasedsignificantly. Products like washing machines, airconditioners, microwave ovens, color televisions (CTVs)are no longer considered luxury items. However, there

are still very few players in categories like vacuumcleaners, and dishwashers Consumer durables sector ischaracterized by the emergence of MNCs, exchangeoffers, discounts, and intense competition. The marketshare of MNCs in consumer durables sector is 65%. MNC'smajor target is the growing middle class of India. MNCsoffer superior technology to the Consumers whereas theIndian companies compete on the basis of firm grasp of

the local market, their well-acknowledged brands, andhold over wide distribution network. However, thepenetration level of the consumer durables is still low inIndia.

Classification of consumer durables sector

1. Consumer electronic include vcd/dvd, home theatre,music

player, color television (CTVs), cameras, camcorders,portable

audio, Hi-Fi, etc2. 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 plastics4. Clocks and watches5. Mobile phones

Scope

1. In term of purchasing power parity (PPP), India is the4th

largest economy in the world and overtake Japan in thenear

future become the 3rd largest.2. Indian consumer durable market is expected to reach$400

billion by on 20103. India has the youngest population amongst the major

countries. There are lot of people in the differentincome

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 areearning

us$4,400-US$21,800 a year. And there are 6 millionrich

household in India.5. The upper-middle and high-income household in urban

areasare expected to grew to 38.2 million in 2007 as against14.6

million in 2000.Opportunity



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

2. Unexploited rural market.3. Rapid urbanization.

4. Increase in income level, i.e. increase in purchasingpower of

consumers.5. Easy availability of finance.

Threats

1.Higher import duties on row materials.2.Cheap imports from Singapore, China and from other

Asian countries.



CHAPTER:2- COMPANY

PROFILE

Brands in consumer electronics sector



MNCs NATIONALREGIONALLG ) ONIDA

BUSHSAMSUNG ) KOREA VIDEOCONCROWNHYUNDAI ) BPLSALORA

TCL ) CHINA GODREJ T-SERIES

HAIER ) VOLTASWESTON

IFBBELTAK

PHILIPS ) HOLLANDOSKAR

PANASONIC )SHARP )HITACHI )SANSUI ) JAPANAKAI )AIWA

WHIRLPOOL )

ELECTROLUX



TODAY Consumer durables sector is characterized by theemergence of MNCs, exchange offers, discounts, andintense competition. The market share of MNCs inconsumer durables sector is 65%. MNC's major target isthe growing middle class of India. MNCs offer superiortechnology to the LG, SAMSUNG the two Koreancompanies has been maintaining the lead in theindustries with LG being leader in almost all the

categories. The company, having a turnover of Rs 9,500 crore andmarket share of 26 per cent, is investing Rs 360 crore onbrand-building and other marketing initiatives and aroundRs 140 crore on research and development, besideslaunching new platforms in information technology andrelated areas.

LG Electronics is one of the leading companies in thefield of electronics with a global presence in manycountries.Before briefing, we have divided theintroduction part into three main sub parts.

1. LG Global2. LG India

3. LG



History of company:

The company was originally established in 1958 as GoldStar, producing radios, TVs, refrigerators, washingmachines, and air conditioners.



1958-1969-GoldStar The Electronics Industry Dream



1970-79 GoldStar symbol of The Technolgoy

1980-88 :- INTERNATIONALIZATION

1989-94 INOVATION



1995-98 GLOBAL LEADERS LG ELECTRONICS

1999-2003-DIGITAL MANAGEMENT



2004-2006 GREAT PEOPLE GREAT DESIGN

2007-THE PEOPLE COMPANY



The LG Group was a merger of two Korean companies,Lucky and Gold Star, from which the abbreviation of LGwas derived. The current "Life's good" slogan is abackronym. Before the corporate Name change to LG,household products were sold under the Brand name of Lucky , while electronic products were sold under thebrand name of Gold Star . The Gold Star brand is stillperceived as a discount brand.In 1995, Gold Star was renamed LG Electronics, andacquired Zenith Electronics of the United States.

Global Operation:

LG Electronics is playing an active role in the worldmarket with its assertive global business policy. As aresult, LG Electronics controls 110 local subsidiaries inthe world with around 82,000 executive and employees.

LG Group1. LG.Philips LCD2. LG Chemical3. LG Telecom4. LG Powercom5. LG Twins6. LG DacomBusiness areas and main productsMobile communications



(a) CDMA Handsets,(b)GSM Handsets,(c) 3G Handsets,(d) Cellular Phones

Digital appliancea) Air Conditioners,b) Refrigerators,c) Microwave Ovens,d) Washing Machines,e) Vacuum Cleaners,f) Home Net,g) Compressors for Air Conditioners and RefrigeratorsDigital displaya) 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 MonitorsDigital mediaa) Home Theater Systems,

b) DVD Recorders,c) Super Multi DVD Rewriters,d) CD±RW,e) Notebook PCs,f) Desktop PCs,g) PDAs,h) PDA Phones,i) MP3 Players,

j) New Karaoke Systems,k) Car Infotainment

VISION

Global Top 3 by 2010



Global Top 3 Electronic/Telecommunicationcompany

GROWTH STRATEGY

“Fast innovation, Fast growth”

CORE COMPETENCY

“Product leadership, Market leadership, Peopleleadership”

CORPORATE CULTURE

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

SLOGAN



"Life's Good" represents LG's determination to

provide delightfully smart products that will makeyour life good.

The LG Electronics Life's Good signature consists of theLG logo,seal, and the slogan, "Life's Good" set in Charlotte sanstypefacecurved around the LG symbol. The curving of the sloganreinforces LG's personality and uniqueness. Theconsistent usage of this signature clearly establishes theunique identity of the company and unifies every divisionand product from LG Electronics across the globe.

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 alsorepresents LG’s efforts to keep close relationship with ourcustomers around the world.

The symbol consists of two elements.

1. The logo in LG gray2. The stylized image of human face in the unique LG redcolor.

Red color represents our friendliness and gives a strongimpression of LG’s commitment to deliver the best.

The circle symbolizes The Globe. The stylized image of asmiling 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’sValue , Promises, Benefits , Personality .



THE PARTNERSHIP

LG Electronics chooses to promote harmony and build

constructively on a labor-management relationship ratherthan an employee-employer relationship. This illustratesthat management and workers are not in a verticalrelationship, but in a horizontal one.

This culture is necessary for LG Electronics as it strives tobecome one of the world's top companies. Such arelationship is transformed into a value-creationrelationship whereby both parties endeavor to addressmutual problems andcreate new values together.

STRATEGIC ALLIANCE

LG Electronics is making technical advances andidentifying business opportunities through variousassociative relationships with some of the world'sleading companies.

LG Electronics is striving to become number one in theworld bymingling in various business and technological fields and

making strategic alliances with world famous companies."Strategic association between corporations," in whichcompanies with different infrastructures cooperate in thefast-developing 21st century business field, is of keysignificance in terms of strengthening the existingindustry and creating a new one.



LG Electronics will do its best to create new productsand services with an open mind, while developing newtechnologies and business fields through variousassociations with some of the world's most successfulcompanies.

1. 3M2. SUN3. YAHOO4. PHILLIPS5. TOYOTA6. MICROSOFT7. HP8. GOOGLE9. GE10.INTEL

11.NORTEL12.HITACHI13.PRADA14.RENESAS15.TOSHIBA16.BESTBUY

And the number follows manymore…………………………..In Feb. 2007 LG Electronics and Yahoo formed a strategicalliance. Yahoo mobile services will be available from LG



mobile. This service is targeting 10 million LG mobilephones in over 70 countries.

In Mar. 2007 LG Electronics and Google formed a

strategic alliance. Both companies will work together torelease, market, and offer LG mobile phones with Googleservices (search engine, map, email, and blogs).

LG BRAND IDENTITY:-

The brand of LG is delightfully smart. LG strives toenhance the customer’s life and lifestyle with intelligentfeatures, institutive functionality and exceptionalperformance.

The brand platform:-

The LG brand is composed of four basic elements –

1. Value2. Promise3. 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 thecustomer includes

a)Reliable products

b)Simple design

c)Ease of use

d)Extraordinary Experience

Personality describes the human characteristic that areexpressed to the customer through

Trustworthy, ConsideratePractical, 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 helpsthe employee to learn more and more to develop thehabit of continuous learning.

Boundary less Environment means that there is nodifference between the levels of employees. There is

transparency between the work and mutualunderstanding between all the employees.

A carrier is highly growing in LG and one who is theemployee can develop their carrier largely. A new comerwill feel fully comfortable in the company and for a newcomer the company is very helpful in the overall growthof personality.

Growth in LG is very high for those who are in thecompany and for those who want to join in LG. Thecompany is growing with fast innovation and the BLUEOcean strategy is one of the examples of growth.



Mission

The mission of LG is to provide the customers with utmost

satisfaction through leadership. The fundamental policyof development is to secure product leadership that theCustomers may have the utmost satisfaction.

Product Leadership

We are focusing on six development areas to become theproduct leader.

1. New Machine

2. Reliability

3. Conventional Installation

4. Environment Friendly Product

5. Low Noise & Vibration

6. Energy Saving

Quality Innovation



The policy of quality assurance is to provide customerswith 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 managementpractices 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

Code of conduct 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

LG INDIA

LG Electronics India Pvt. Ltd., a wholly owned subsidiaryof LG Electronics, South Korea was established in January 1997 after clearance from the ForeignInvestment Promotion Board (FIPB). LG set up a state-of-



the art manufacturing facility at Greater Noida, nearDelhi, 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 facilitymanufactured Color Televisions, Washing Machines, Air-Conditioners and Microwave Ovens.

''Company is setting up a chain of exclusive premiumshowrooms. LG plans to launch 60 premium BrandShoppes by the end of the first quarter of this year. Atpresent, LG has a total of 83 LG stores across the

country, of which 45 are shops and 38 are exclusivestores. Brand shops will be placed in the premiumsegment and the target audience will comprise buyersinterested in premium and high end products.

LG Brand Shoppe goes beyond the concept of a normalexclusive store by having a more interactive environmentand additional lifestyle orientation on display so that the

customer can actually experience the LG products in hisor her own home settings.

LG Electronics India Ltd (LGEIL), consumer durablesleader with 27% market share, is planning a brand newimage. To attract inspirational and young consumersacross India, company will roll out a new marketingstrategy. The exercise will cost the company Rs 360

crore.

LG Electronics India is the fastest growing company inthe consumer electronics, home appliances, andcomputer peripherals industry today. LG Electronics iscontinually providing, superior technology products &



value for money to more than 50 lakh households inIndia. LGEIL is celebrating the 11th anniversary thisyear.

LG Soft India the innovation wing of LG Electronics inBangalore is LG Electronics' largest R&D centreoutside Korea. We at LGSI focus on niche technologyareas such as mobile application development, digitalvideo broadcast and biometrics software and support LGElectronics with our expertise. Motivated by a passion fortechnology, a strong work culture and loyalty to theorganization, we are determined to see LG become one of

the top three brands globally.

Prominent consumer electronic company, LG ElectronicsInc. has said that it expects the sale of its products inIndia to up by 15 per cent in 2008. Moon Bum Shin,managing director of LG Electronics India has said thatthe company has earmarked 4.8 billion rupees forinvestment purpose in India this year. The said money

will be used to market as well as manufacture newproducts.

LG Electronics, which is originally a South KoreanCompany with branch in India, informed that its sales of GSM mobile phones, color televisions, air conditionersand other household goods in the Indian market was tothe tune of 95 billion rupees ($2.4 billion) in 2007. As per

Shin's estimate, the sales in 2008 would be around 110billion rupees. In order to achieve its target, Shin said LGElectronics will concentrate on catering to the high-endconsumer 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 exportsto 40 countries.

India challenges

The challenges faced by LG when entered in Indianmarket

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 MNCsin

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 away,



by sponsoring the 1999 world cup followed it up in2003 as

well.

3. LG brought in four captains of the Indian cricket teamto

endorse its products. LG invested more then US$ 8million

on advertising and marketing in this sport.

4.LG has differentiated its product using technology

and

health benefits. CTV has “Golden eyetechnology” Air

conditioner has “Health air system” andmicrowave ovens

have the “Health wave system”.

Local and efficient manufacturing to reduce thecost

To overcome high import duties LG manufactures TVrefrigerator in India at manufacturing facility at Noida and. LGEI had already commissioned contract manufacturingat Mohali Kolkata and Bhopal for CTVs. This has helpedLGEI to reduce cost. LGEI implementing the “Digitalmanufacturing system” (DMS) as the cost cuttinginnovation this system is follow-up to the six sigmaexercise LGEI had initiate earlier.



R&D potential

LG has the research and development facilities inBangalore and . Both the unit carry out R&D departmentfor the domestic as well as the parent company it alsodose customize R&D for the specific countries to which itexport product.

Regional channel and wide distribution network

1.LG has adopted the regional distribution channel inIndia.

All the distributers work directly with the company. This

has resulted in quicker rotation of the stock andbetter

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 LG2. LG came out with Hindi and regional language menuson 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 incontinuations of its association with cricket LG introduce

cricket game in CTVs

MAJOR KEY SUCCESS FACTORS:

1. Innovative marketing - LG was the first brand to entercricket

in a big way, by sponsoring the 1999 World Cup andfollowed

it up in 2003 as well.2. Local and efficient manufacturing to reduce cost - Toovercome

high import duties, LG manufactures PC monitors andrefrigerators in India at its manufacturing facility at

Noida,Delhi.

3. Commissioned contract manufacturing at Mohali,

Kolkata andBhopal for CTVs.4. Product localization - Product localization is a keystrategy

used by LG. It came out with Hindi and regionallanguage



menus on its TV.5. Regional distribution model - This has resulted inquicker

rotation of stocks and better penetration into the B, C

and Dclass markets.

6. Leveraging India’s IT advantage - LG Electronics hasawarded

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.

Strategies adopted by the organization:

LG follows 10 commandments which are as follows.

1. Foster working environment-5S Environment2. Fast execution is key to success3. Transparent and fast communication-opencommunication4. Update market -knowledge –Demographics5. Win –Win relationship with the trade partners



6. Customer is the king7. Even Billing –Road to ach supplier A8. Be in touch with the market (70% Market, 30% Office).9. Plan and Execute annual marketing Calendar-Time to

market10.Display share of 50% -to get 50% consumer share.

LG market share of consumer appliances andconsumer electronic:-

LG position of CTV in various states in IndiaLG position of REF in various states in IndiaLG position of WM in various states in IndiaLG position of AC in various States in IndiaLG position of Audio & Home Theater in various in IndiaLG position of DVD in various in IndiaLG position of MWO in various states in India

This analysis is based on the ORG survey conducted byLG which represent the LG position of different consumerdurables in various states in India. We selected differentbrand in different category as per the market share andthe demand of product in market. This analysisrepresents the LG market position during the period of March 2008. It shows that LG has captured maximum

market share almost in every category. LG and Samsunghave the maximum market in consumer durable marketbut LG dominate the almost all the category in consumerdurable. Prominent consumer electronic company, LGElectronics Inc. has said that it expects the sale of itsproducts in India to up by 15 per cent in 2008. Moon Bum



Shin, managing director of LG Electronics India has saidthat the company has earmarked 4.8 billion rupees forinvestment purpose in India this year. The said moneywill be used to market as well as manufacture new

products. LG Electronics, informed that its sales of GSMmobile phones, color televisions, air conditioners andother household goods in the Indian market was to thetune of 95 billion rupees ($2.4 billion) in 2007. As perShin's estimate, the sales in 2008 would be around 110billion rupees. In order to achieve its target, Shin said LGElectronics will concentrate on catering to the high-endconsumer market which will help boost sales this year.

India churns out six (6) per cent of LG Electronics globalrevenues of $42 billion. The Indian branch of LG exportsto 40 countries. Shin remarked that the company wastargeting an increase of exports to $300 million in 2008from $230 million in 2010

Distribution and Marketing:

The company has number of dealers and warehouses. They have LG exclusive shops. For the marketing of theproducts 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 meeting atseveral time in the year



7. LG divide dealer in gold silver etc. category to knowthe performance of the dealers.8. They have their sales persons at various sub dealerstore 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 festiveseason.

The logistics (Supply Chain Management):-

Logistics is the art and science of managing andcontrolling the flow of goods, energy, information, andother resources like products, services, and people, fromthe source of production to the marketplace. It is difficultto accomplish any marketing or manufacturing without



logistical support. It involves the integration of information, transportation, inventory, warehousing,material handling, and packaging. The operatingresponsibility of logistics is the geographical repositioning

of raw materials, work in process, and finishedinventories where required at the lowest cost possible.Logistics Management is that part of the supply chain,which plans, implements and controls the efficient,effective forward and reverse flow and storage of goods,services and related information between the point of origin and the point of consumption in order to meetcustomers' requirements.

5R’s of Logistic followed by LG:1. Right Time2. Right Place3. Right Condition4. Right Cost5. Right Handling

The LG Factory is located at NOIDA & . There are three

types of Warehouse-1. Mother Warehouse2. Branch Warehouse3. Spare part warehouse

The mother warehouse is that where the products fromthe factory are kept and from that warehouse, theproducts are sent to the branch warehouse. A warehouse

is a commercial building for storage of goods.Warehouses are used by manufacturers, importers,exporters, wholesalers, transport businesses, customs,etc. They are usually large plain buildings in industrialareas of cities and towns. They come equipped withloading docks to load and unload trucks; or sometimes



are loaded directly from railways, airports, or seaports. They also often have cranes and forklifts for movinggoods, which are usually placed on ISO standard palletsloaded into pallet racks.

In warehouse 7 locations is set up for the products.Loc 1, Loc 2, Loc 3, Loc 4 , Loc 5 ,Loc6, Loc 7Loc 1 – sellingLoc 2 - second saleLoc 3 - insurance claimLoc 4 - write off materialLoc 5 – destroy the item

Loc 6 - court case materialLoc 7 - for repair

5’s of warehouse, which the LG strictly follow.1. Sweeping2. Sorting

3. Systematic Arrangement4. Simplification5. Self- discipline

In warehouse, the products are pinup with 3-color paperto get the knowledge about the delivery.

1. Red Card – To stop the product going into market,

2. Green card – To allow the product for delivery inmarket,3. Yellow Card – After the product labeled with green,allow this

to move in market



Distribution Time:-• Local delivery – 4 hrs.• Upcountry delivery - 12 hrs.• Within 200 km. – 24 hrs.

• Beyond 200 km. – 48 hrs. The above distribution time is the time of delivery of products from warehouse to the market place, which thelogistic department follows to fulfill the demand in themarket at right time. In LG, we have the followingprocess, which is followed in logistic through ERP.· Order Processing· Invoicing

· Indenting· ReportOrder Processing booking for dealers /distributorsInvoicing after billing process/bill generationIndenting requirement (Production Unit to branch unit)Report distributed to all

In warehouse, there are two mode of dispersion of

product from one place to another within.a) Hydraulicb) ManualIn addition, there are 35 fire extinguishers to prevent theaccidental hazard within the warehouse due to fire. Thesefire extinguishers are valid up to year 2011. One has tofollow the rule of “NO Smoking” within the warehouse

Logistics Ten Commandments – Golden Rules

1 - Warehouse 5S – to be strictly followed – FG – 2, 5 & 7to be properly maintained.2 - 100% Bar-coding for all inward & outward transaction.



3 - Follow standard pick – ship process religiously.4 – No inventory mismatch, shortage or excess – monthly100% physical stocktaking.5 – Nil 30+ for FG – 2, 3 & 5.

6 – Nil transit damage.7 – File insurance claim within 2 days. Settle all claim allwithin 30 days.8 – No inter – branch transfer without HO clearance.9 – PSI feeding into system by 25th of every month.Ensure 90% accuracy.10 – Apply physical FMFO.

Problem

1- In transit material damage checking.2- Cost target achievement.3- Natural events tracking.4- Fluctuation in demand-supply Equipments1- 100% Bar code scanner.2- ERP – Invoice Generation Process.

3- Hydraulic Trolleys for material movement.4- Pallets for safety of material.

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 successand so taken for granted in developed markets! In India,after sales service is, for want of a better description, thepits. So what’s stopping the best companies from pullingout all the stops when it comes to providing the best



service? Do customers expect for too much? Or is it thatin India they don’t really care. Brand Equity fanned out toMNC as well as Indian consumer durable companies,stockiest and dealers, analysts and market researchers to

get feel of what’s really keeping after sales from beingused as a cutting edge marketing tool in pushingproducts across categories. Customers support followingthe purchase of a product or service. In some cases,after-sales service can be almost as important as theinitial purchase. The manufacturer, retailer, or serviceprovider determines what is included in any warranty (orguarantee) package. This will include the duration of the

warranty traditionally one year from the date of purchase, but increasingly two or more year’smaintenance and/or replacement policy, itemsincluded/excluded, labor costs, and speed of response. Inthe case of a service provider, after-sales service mightinclude additional training or helpdesk availability. Of equal importance is the customer's perception of thedegree of willingness with which a supplier deals with a

question or complaint, speed of response, and actiontaken.

LG also had a big problem of after sale service in India.During the project we also came to know that after saleservice becomes the big issue in the region. Customersas well as dealer were facing the problem of after sales

service. Because of this problem many dealer in theregion were not ready to sell LG product. So it becomesthe big issue. But LG has taken some solid steps towardsimproving customer’s perception and experience of aftersales service. Because it very important in competitivemarket to provide the best service. L G Electronics has



signed a memorandum of understanding with 23Industrial Training Institutes to strengthen its after salesservice in India. The company aims to recruit 10,000people by the end of this year as a part of its branding

strategy to focus on service and move away fromdiscounting. L G Electronics has identified eight stateswith high after sales service call rates to ink the dealswith the ITI. Y V Verma, director HR and managementsystem, LG Electronics said, "The Company was trying tofind a solution for effective after sales service since lasttwo years. There is a huge need of trained manpower forthe after sales service to align with the company's

expansion and focus on the GSM mobiles and thepersonal computer segments."

1. In the initial phase the company has entered intoagreements with ITIs in the states like Maharashtra,Gujarat, Delhi, Punjab, Assam, and Karnataka and is inthe 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 numberto 10,000 by the year-end.3. "The company has offered a scholarship to theselected students for the last six months of their trainingprogram,"4. The company will invest Rs 8 crore (Rs 80 million) inemployee development program this year with an aim toattain a 8 per cent attrition rate.

5. The company moved away from the discountingstrategy since last year and is putting thrust on thequality and service in its brand communication to positionLG as a premium consumer electronics brand.6. At the top, the Service Division in Korea reports to theGlobal CMO. (as mentioned in Dermot’s public interview



in ET on Wednesday). This shows commitment thatService 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 salesize may also be a nice multiple from nearest, it showsthe company is ready to put our money where our mouthis.8. The company has introduced a 211 service - once youregister 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 thepromised 1-hour slot (hence the second 1). If the nextconvenient 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 fromits service responsibilities, and thus not leveraging anymileage from it.9. The company is promoting 211 through ATL, probably

the first time after sales service is being communicated inthis fashion by any product company. You may have seenthe TV commercial or heard the radio advert or seen thenewspaper ad or in-shop posters, both of which revolvearound prompt response.10.The first LG-owned service centre opened in Gurgaon.(Service in India generally works through authorizedservice centers, in LG’s case they work exclusively for

LG.) A company-owned service centre tries that muchharder, knows things better, and can even contribute as arevenue center.Objective of the project

Primary objective



The main objective of filed survey during the projectwas to find out the market share of the LG and alsocalculate the display share. Find out the positional dealer who can sale the LG

product in large volume. The main objective of research was to identifypotential dealer and development these dealer. So LGcan make them their direct dealer. This will ease the dependence on the some big dealerlike Maharashtra and Mahaveer electronics. Find out the problem faced by the dealer in sales andthe distribution.

Secondary objective The Objective was to find out that how far theexhibitions are helpful in branding, While purchasing the consumer durables whichparameter is most important for the consumer? Do the consumers prefer the financial facility forbuying consumer durable? How frequently consumers change the consumer

durable? To enhances the knowledge of consumer durablemarket. To increases the knowledge consumer durable productof LG.

To enhances the knowledge about the marketing andbranding

activity.



CHAPTER:3-

METHODOLOGY



Research Methodology:Research methodology is considered as the nerve of theproject. Without a proper well-organized research plan, it

is impossible to complete the project and reach to anyconclusion. The project was based on the survey plan.

The main objective of survey was to collect appropriatedata, which work as a base for drawing conclusion andgetting result.

Therefore, research methodology is the way tosystematically solve the research problem. Researchmethodology not only talks of the methods but also logic

behind the methods used in the context of a researchstudy and it explains why a particular method has beenused in the preference of the other methods

Research design

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

approaches available to the researchers. In fact, it is thekey to the evolution of successful marketing strategiesand programmers. It is an important tool to study buyer’sbehavior, consumption pattern, brand loyalty, and focusmarket changes. A research design specifies the methodsand 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 andto control variance.

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



circumstances when the researches is interested to knowthe characteristic of certain group such as age, sex,education level, occupation or income. A descriptivestudy may be necessary in cases when a researcher is

interested in knowing the proportion of people in a givenpopulation who have in particular manner, makingprojections of a certain thing, or determining therelationship between two or more variables. The objectiveof such study is to answer the “who, what, when, whereand how” of the subject under investigation. There is ageneral feeling that descriptive studies are factual andvery 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 exploratorystudy needs to be flexible in its approach, but adescriptive study in contrast tends to be rigid and itsapproach cannot be changed every now and then. It istherefore necessary, the researcher give sufficientthought to framing research.

Questions and deciding the types of data to be collectedand the procedure to be used in this purpose. Descriptivestudies can be divided into two broad categories: CrossSectional and Longitudinal Sectional. A cross sectionalstudy is concerned with a sample of elements from agiven population. Thus, it may deal with household,dealers, retail stores, or other entities. Data on a numberof characteristics from sample elements are collected and

analyzed. Cross sectional studies are of two types: Fieldstudy and Survey. Although the distinction between themis not clear- cut , there are some practical differences,which need different techniques and skills. Field studiesare ex-post-factor scientific



inquiries that aim at finding the relations andinterrelations among variables in a real setting. Suchstudies 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 surveyresearch is its wide scope. Detail information can beobtained from a sample of large population .Besides; it iseconomical as more information can be collected per unitof cost. In addition, it is obvious that a sample surveyneeds less time than a census inquiry. Descriptiveresearch

includes survey and fact finding enquiries of differentkinds of the major purpose. Descriptive research isdescription of the state of affairs, as it exists at present.

The main characteristic of this method is that theresearcher has no control over the variables; he can onlyreport what has happened or what is happening. Themethods of research utilized in descriptive research aresurvey

methods of all kinds including comparative and corelational methods. The reason for using such needs to beflexile in its approach, but a descriptive study

BRANCH1 2 3 in contrast tends to be rigid and its approach

cannot be changed ever now and then.

DEALER MANAGEMENTMapping of regional dealers. They have been divided into three categories on the basisof their turnover and the selling capacity.

-1



Data analysis and interpretation1. Questionnaires2. Pie chart and Bar chartQuestionnaires:

This is the most popular tool for the data collection. Aquestionnaire contains question that the researcherwishes to ask his respondents which is always guided bythe objective of the survey.Pie chart:

This is very useful diagram to represent data , which aredivided into a number of categories. This diagramconsists of a circle of divided into a number of sectors,

which are proportional to the values they represent. Thetotal value is represented by the full create. The diagrambar chart can make comparison among the variouscomponents or between a part and a whole of data.

Bar chart: This is another way of representing data graphically. Asthe name implies, it consist of a number of whispered

bar, which originate from a common base line and areequal widths. The lengths of the bards are proportional tothe value they represent.

Preparation of report: The report was based on the analysis and presented withthe findings and suggestions. The sample of thequestionnaires is attached with the report itself.

Sampling Methodology:Details of the sampling methodology, I have madequestionnaire. The one is made for the Customer.No. of questions in questionnaires for customer: 07No. of question related to LG product: 03



No. of people met during the research: 200No. of respondents during the research: 50Sample unit Professionals, Business man,Employees, House wife, Working women, Students

Analysis:Q1. Have you purchased any consumer durable duringExhibitions? Yes No

Inferences1. 65 % of Customers have not purchased any consumerdurable from exhibitions.2. Only 35 % people have purchased.3. It shows that consumers are coming in the exhibitionfor knowledge of product and also they want to know that

weather there is actual price difference in exhibition andshop or not.4. Consumers also want to compare to the different brandwhich are available in the exhibition.5. So exhibitions are more useful to increases brandawareness.



6. People are less interested to purchase product fromthe exhibition.

Q.2While purchasing consumer durable which parameter

influences you? Price Product feature Brand Service Durability

Inference1. 30% of customer gives importance to price. So it showsthat Indian consumers are very price sensitive. They givemore 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 wantbest 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 lessinterested in the durability.



Q3. From where you prefer buying consumer durables Exhibitions Co.shoppee Showroom

Inference:1. 35% customers prefer to buy from co shoppee,18%prefer from exhibitions.2. 47% customers are prefer to buy from the showroomsbecause the showrooms are more convenient tocustomers they also think that these shops give morediscounts.3. People are less interested to buy from the exhibitionthey only visit the exhibition for price quotation of theproduct and the comparison of the product.

Q.4.You prefer to buy from the same as you havementioned in Q.3 because of following reasons Attractive Price Service Demonstrations



Offers

Inference1. Customers buy from showrooms because of the service

and convenience. These are two main factors.2. Customers are preferred to buy from the showroombecause of they think that these convenient store mayprovide good after sell service.3. Customer also thinks that there is more chance tobargain and they can get more discounts in theseshowrooms.

4. Price also a factor that attract the customer in theseshowrooms.

Q.5.Which consumer durable you have and of whichbrand? CTV LCD PLASMA

REFWM MW ACInferenceIn CTV section maximum customers have Onida, in LCDSony is the leader, In plasma BPL is the leader, In Ref LGis 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

Inference1. Customers prefer to change consumer durables within5-10 years. In India people do not change consumerdurable frequently.2. 43% customers do not change their consumer durablewithin 10 year.3. It represent that Indian consumer do not prefer to

change their consumer durable frequently.

Q.7.Do you prefer any financing scheme to purchaseconsumer durables? Yes No



InferenceMajority of customers do not prefer any financial scheme.

Dealer survey Findings



1. By calculating the display share we found that in mostof store LG has50% display share almost all categories.2. By the actual monthly sale of particular store we came

to know thecapacity of the store and how much product can theysale.3. It helps us to know that weather dealer is capable of being a direct dealerof LG or not and it also helps to find out the new dealerwho are capableof being the dealer of LG.

4. We also came to know while visiting the shops thatthere was big problemof after sale service.5. Many dealers were facing the problem of after saleservice because thereis no follow up calls from LG.6. Demo calls also not done properly.7. The top competitor of LG product in is SAMSUNG.

8. In area the performance of LG is in better position butthecompetitor also hold closer margin.9. There is high growth of sale in market due to boomingin new technology and better service.10.Word of mouth plays a vital role in awareness amongcustomer. This is one factor, which can play a good role inpromotion of products as well as demonstration given by

the shopkeeper also plays a vital role for customer.



CHAPTER:4-

CONCLUSION

RECOMMENDATIONS AND SUGGESTIONS:



1. LG should improve it’s after sale service because itshits badly LGs market share in region.2. More detailed customaries service is to be provided.3. The training to in shop demonstration should be given

at frequent time interval and feed back should beconsidered positively.4. The company should look into the matter of personhiring for in shop demonstration. A big LG showroomshould have at least 2 such kind of person.5. LG should try new dealer who have the potential. Sothey can target more market.6. As there is a bottle neck competition between

Samsung and LG, it is necessary to take measure steps toovercome the area of downfall in LG with respect toSamsung.7. The marketing managers should make better relationswith dealers and reputation of the company.8. Customer considers quality as their first preference, sothe company should give more stress on this.9. The switching of customer from LG product to other

brand is due to the bed after sell service in shop.10.The product is well aware and it is on top of mind of customer.

So company should always improve services and updatetheir technology.

CUSTOMER SURVEY FINDINGS



1. Secondary supports play an important role in thecustomers mind and create awareness among thecustomers. The secondary support includesDemonstration, 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 .Besideconvenience and other factors service is key factor.4. Also majority of customers do not want any financingscheme for purchasing the durables.

5. There was heavy rush on weekends so large numbersof ISD’s were appointed that day. Also the live demo callshelps in selling. Exchange offers also generate sale.6. Customers are also now very choosy in buying theproduct and it is important for the company to make loyalcustomer of their brand.7. In survey we found that LG has captured maximummarket share in every category. LG dominates CTV, LCD,

and Refrigerator, and Washing machine, category.8. LG and Samsung have bottle neck competition in TVand 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 theproduct and it is important for the company to make loyalcustomer of their brand.

RECOMMENDATIONS AND SUGGESTIONS



1. Exhibitions do not help to generate so much sells butthey should be conducted regularly. This helps ingenerating awareness regarding the product in customerswhich ultimately helps in sales.

2. Also it is helps in advertising for the new products. Likein this exhibition new LCD SCARLET was advertised.Company should always focus on service.3. Display share should be increased where there is lessthan 50% as LG also believes that “JO DIKHTA HAI WOBIKTA HAI”.4. Company should try to improve service. No doubt thecompany products have technically edge over

competitors but in long run it may hamper the company’sprofit.5. Company should concentrate more on its major driversLCD, IT, and GSM. Branding and promotions should bedone effectively as it creates a long lasting image in themind of customers.6. Company should also cater to the needs of sub dealersas some of the sub dealers have potential of high sales.



LIMITATIONSEvery study has certain limitations. In our study, alsothere were certain limitations, which I could not able tosolve.

1. The research was conducted in a very small area.2. Our research work period witness the biggest ups anddowns in product sale of different brands, which affectedthe perception of the customer.

This was biggest drawback of my study.3. Time factor was also important for us. We had limitedtime for the research, for which a full-fledged report wasinsufficient for me.

4. The customer filled the questionnaire mostly incareless manner, so it was difficult to make them hold fortime.5. We had only found the upper-middle class family to fillup thequestionnaire, but generally, an average middle classfamily was required for the study.6. The sample size is also very small which represent my

research on consumer behavior



CHAPTER:5-

BIBLIOGRAPHY



BIBLIOGRAPHY www.lgindia.com www.google.com www.wikipedia.com Business world Business today LG magazine Economics times News paper Times of India

Consumer survey Questionnaire



Q1. Have you purchased any consumer durable duringExhibitions?a) Yes

b) NoQ.2While purchasing consumer durable which parameterinfluences you?a) Priceb) Product featurec) Brandd) Servicee) Durability

Q3. From where you prefer buying consumer durablesa) Exhibitionsb) Co.shoppeec) Showroom76Q.4.You prefer to buy from the same as you havementioned in Q.3because of following reasons

a) Attractive Priceb) Servicec) Demonstrationsd) Offerse) ConvenienceQ.5.Which consumer durable you have and of whichbrand?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 yearsb) 3-5 yearsc) 5-10 years

d) More than 10 years77Q.7.Do you prefer any financing scheme to purchaseconsumer durables?a) Yesb) No

APPENDIXA.S.I Area Service In chargeA.S.M Area sales manager



B.S.I Branch Service In chargeCAC Commercial Air Conditioning SystemC.S NET Customer Service NetD.S.C. Direct service centre.

L.H.D Logistics Head of departmentR.E.F Refrigerator

Moni's Lg Marketing Project

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