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PROJECT REPORT
ON
MARKET ANALYSIS OF LG CONSUMER DURABLES &
DEALER DEVELOPMENT
SUBMITTED BY:-
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 .
MBA (Marketing)
CERTIFICATE
CHAPTER:3- METHODOLOGY
CHAPTER:4- CONCLUSION
CHAPTER:5- BIBLIOGRAPHY
CHAPTER:1-
INTRODUCTION
Executive summary
Indian Consumer durables market used to be dominated
by few domestic players like Godrej Voltas Allwyn and
Kelvinator. But post liberalization many foreign
companies have entered into Indian market dethroning
the Indian players and dominating Indian market the
major categories being CTV, REFRIGRATOR, AIR
CONDTIONERS and WASHING MACHINES. 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 have been maintaining the lead in the market
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 of 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 percent, 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.
Scope of project
This project gives us great exposure to the consumer
durable market because it includes product knowledge
and field survey job in which we visited the LG stores in
Delhi. Incidentally Diwali time was nearing during our
survey period which exposed us to another aspect of
product promotion. LG always insist the 50% display
share of LG product because LG believes that “JO
DIKHTA HAI WO BIKTA HAI”.
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 to
know
the capacity of the store and how much product can
they 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 out
the new
dealers who are capable of being an LG dealer.
4. I also came to know while visiting the shops that there
was
big problem of after sales 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.
ABOUT LG
Before the liberalization of the Indian economy, only a
few companies like Kelvinator, Godrej, Alwyn, 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 2007-2008. 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.
Scope
Threats
PHILIPS ) HOLLAND
OSKAR
PANASONIC )
SHARP )
HITACHI )
SANSUI ) JAPAN
AKAI )
AIWA
WHIRLPOOL )
ELECTROLUX
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.
1. LG Global
2. LG India
3. LG
History of company:
The company was originally established in 1958 as Gold
Star, producing radios, TVs, refrigerators, washing
machines, 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
Global Operation:
LG Group
1. LG.Philips LCD
2. LG Chemical
3. LG Telecom
4. LG Powercom
5. LG Twins
6. LG Dacom
Business areas and main products
Mobile communications
(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,
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/Telecommunication
company
GROWTH STRATEGY
CORE COMPETENCY
CORPORATE CULTURE
SLOGAN
"Life's Good" represents LG's determination to
provide delightfully smart products that will make
your life good.
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.
STRATEGIC ALLIANCE
1. 3M
2. SUN
3. YAHOO
4. PHILLIPS
5. TOYOTA
6. MICROSOFT
7. HP
8. GOOGLE
9. GE
10.INTEL
11.NORTEL
12.HITACHI
13.PRADA
14.RENESAS
15.TOSHIBA
16.BESTBUY
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.
1. Value
2. Promise
3. Benefits
4. Personality
The Brands core Value that never changes.
a. Trust,
b. Innovation,
c. People
d. Passion
a) Reliable products
b)Simple design
c) Ease of use
d)Extraordinary Experience
Trustworthy, Considerate
Practical, Friendly
1. Learning Culture
3. A Carrier
4. Growth
Product Leadership
Quality Innovation
The policy of quality assurance is to provide customers
with utmost satisfaction by supplying zero defects.
Code of conduct of LG
2. Fair competition
3. Fair Transaction :
• Equal Opportunity
• Fair Transaction Procedure
• Support and Aid for Business Partners
• Basic Ethics
• Completion of Duty
• Self Development
• Fairness in Performance
• Avoidance of conflict with company interest
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.
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
Problem
CUSTOMER SERVICE:
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 Maharashtra 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.
Research design
BRANCH
1 2 3 in contrast tends to be rigid and its approach
cannot be changed ever now and then.
DEALER MANAGEMENT
Mapping of regional dealers.
They have been divided into three categories on the basis
of their turnover and the selling capacity.
-1
-2
-3
-1 Includes the modern trade and they have direct billing
from the branch office. They have high turnover and the
company depends heavily on them-2 includes the
distributors. They have direct billing from the branch
office. Their turnover is also high.
-3 Includes the sub dealers .They have direct billing from
distributors or from the branch office. Their turnover is
not so high, but there are few sub dealers whose
potential is quite high. According to sales the branch has
designated as gold and silver sub dealers.
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
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
Inferences
1. 65 % of Customers 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.
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
Inference:
1. 35% customers prefer to buy from co shoppee,18%
prefer from exhibitions.
2. 47% customers are prefer to buy 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.
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.
Inference
1. Customers prefer to change consumer durables within
5-10 years. In India people do not change consumer
durable frequently.
2. 43% 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.
APPENDIX
A.S.I Area Service In charge
A.S.M Area sales manager
B.S.I Branch Service In charge
CAC Commercial Air Conditioning System
C.S NET Customer Service Net
D.S.C. Direct service centre.
L.H.D Logistics Head of department
R.E.F Refrigerator