Televison industry
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Transcript of Televison industry
BRIEF HISTORYYEAR TURNING POINTS
Late 1960s B&W TV Transmission1982 Import of Colour TV sets (coinciding with the broadcast of
Asian Games)1992 Liberalization Process initiated1993-94 Dismantling of controls such as licenses, use of foreign
Brand Names etc.1994-95 Entry of MNCs – Panasonic, Sony, LG, Samsung etc.
Lowering of Import duties.Cable TV Started
1995- Till Date Entry of Many MNCs & Rapid Growth2001 Non Tariff Barriers on Imports removed.2004 Free Trade Agreement with Thailand implemented,
resulting in reduction of import duties on ColourTelevision sets, Colour Picture Tubes, Refrigeratorsand Air Conditioners, thus more competition.
INDIAN TV INDUSTRY-FACTSHEET• India is one of the largest TV markets in terms of viewership• Technology driven industry- Companies need to constantly improvise,
innovate & customize their products• Television is the mainstay of the consumer electronics industry in India.
CTV production expected to grow at 10% as healthy demand projected during 2010-11: CMIE
INDIAN TV INDUSTRY-FACTSHEET …contd.• Quantitative & qualitative change in TV technology and
software • With the advent of several local and foreign satellite
channels, demand for CTVs has seen a rise.• Shift from joint family system to that of nuclear families.
• Sale of TVs also tends to be event driven (the Cricket World Cup in 1999, CTV sales recorded a phenomenal rise of 40-50%)
• Strong brand differentiation and prices (industry has products available at different price points at all levels)
• MNCs & domestic companies are now making India as a manufacturing centre (Low cost skilled labour, tax free zones i.e. SEZs, Qualified workforce)
Major market players
LG electronicsPositioned itself as a frontrunner by developing groundbreaking products such as LCD & Plasma TVs with built-in DVR.
Samsung•Strategy of Samsung in India to create premium image had failed.•Competition with LG has led Samsung to play price game•Seeking for digital leadership in India by introducing its digital ready televisions like the 40" LCD Projection TV, 43" Projection TV and the Plano series of Flat Color televisions.
Onida• Failure of devil ad in revitalizing its position• Technical tie up with JVC(Japan victor company)• Requires more strategy to compete with the market
Sony7000 channel partners, 215 Sony world and Sony 21 branchLocations
PhilipsOperates in Medium and high range price
VideoconPrice player and image as a low price brand
Market Leader- Videocon• Videocon, an Indian multinational, is the market
leader in television industry.• An annual turnover of US$ 4.1 billion, making it
one of the largest consumer electronics
Market Share
• Market share, in strategic management and marketing is, according to Carlton O'Neal, the percentage or proportion of the total available market or market segment that is being serviced by a company. It can be expressed as a company's sales revenue (from that market) divided by the total sales revenue available in that market.
Videocon Industries; 36.02
LG Electronics; 18.38
Samsung India Electronics;
15.86
Mirc Electron-ics; 5.3
Philips Elec-tronics India;
2.32
Panasonic; 1.5
Others; 22
Market Share Of Individual Firm’s In Television Industry
Degree Of Concentration for Television Industry• Herfindahl Index (H) is the method of estimating the degree of
concentration in an industry.• The HHI potentially reflects both the number of firms in the
market and their relative size• (H) is the sum of the squared values of the market shares of all
the firms in the Industry.• HHI lies between 0 and 1.• Higher the Herfindahl Index , the greater is the degree of
concentration in the industry• Herfindahl Index Of Concentration for Television Industry is
0.193• Perfect competition has the value zero, while monopoly has the
value one
Hirschman-Herfindahl Index
2010
The value of HHI in Television industry is less than 0.25 for all the years. In earlier decades, competition was fierce, while now, market structure is more of competitive in nature. However , competitive market structure is hard to find in its true sense. Thus, we consider Television market to be monopolistically competitive market structure.
Market StructureDue to few major market players, and HHI ( Herfindahl Index of Concentration ) index lower than 0.25 (0.193) Indian market for CTV (color television) is Monopolistic Competitive in nature.
Monopolistic Competitive in nature, characteristics of CTV Market
Market is dominated by a small number of participants who are able to collectively exert control over supply and market prices.
The sellers are the price makers and not price takers, since the few sellers mutually dominate the pricing decisions.
Firms are interdependent for decision making.
Short-run equilibriumMR = MC
Long-run equilibrium
Under monopolistic competition
Segment StructureThe colour television market in India is divided majorly into 5 segments: LED/ Plasma Ranging from 42 to 56 inches on average, consume more power than
LCD televisions of the same size Price ranging from 50,000-4,00,000 only Luxury nature.
LCD Sizes from 15 to 55 inches. With lower costs and a wide array of sizes. Price ranging from 15,000-125000 only Lower Price band is normal and Upper price band is luxury
Ultra slim Compact CRT, which make it 20% slimmer than conventional. Price ranging from 7,000-15000 only Normal Price band
Flat Suits the budget, and a conventional with feel of elegancy due
to flat screen Price ranging from 6,000-10000 only Normal Price band
Conventional Normal TV Price ranging from 5,000-8000 only Inferior Price band
Segment Structure continued…..
2005 2006 2007 2008 2009 20100
2000
4000
6000
8000
10000
12000
14000
88679436
10029
1065511204
11795
Units Sold
Units SoldLinear (Units Sold)
Facts on growth of TV Industry
Forces acting on TV Industry
Buyers Analysis THE UPGRADERS Upgraded from Black and White TV to Color television Constitutes approximately 62% of the market
FIRST TIME BUYERS Comprise 18 per cent of the market. Primarily belong to nuclear families. The structure of these families is either DINK or SINK
MULTIPLE SET PURCHASERS Comprise the lowest share of the market in terms of volume with just 8% set.
REPLACEMENT PURCHASERS This segment usually trades in its old CTV for the new models. Around 12% of the market Holds immense potential in the future. Replacement demand is expected to account for 55-57 per cent of total CTV
sales by 2010-11 ( Technology change)
CHALLENGESHeavy taxation in the country ( 25-30 %) , whereas the corresponding tariffs in other Asian countries are between 7 -17 %.
65%of Indian population that lives in its villages (still conventional CTVs and doesn't know what flat screens are)
Poor infrastructure , Regular power supply is imperative for any consumer electronics product. But that remains a major hiccup in India.
PROBLEM AREAS
Inadequate stress on R&D
Quality - Yet an issue
After Sale Service & Customer Satisfaction
Fragmentation of Capacity - not able to achieve economies of scale
Action Points for Industry for Growth
Commit sufficient resources for R&D
Need to be more quality conscious
Need to improve After Sales Services
Need to Build economies of Scale
Explore exports as a viable option.
More emphasis to develop Rural Market.
THANK YOU