Professional Documents
Culture Documents
ON
PRODUCT
AND
SERVICES
OF
VIDEOCON
Submitted in Partial Fulfillment for the award of
Degree of Bachelor of Business Administration
CERTIFICATION
Dr.Ravinderjit
Project Guide
Table of Contents
S.No. TOPICS PAGE No.
Executive Summary 1
1 Introduction 2
1.1 >Overview 2
1.2 >Objective 3
2 Company Profile 4
History 4
Customers, Corporate and Videocon 5
Ambitions and Technology 7
Success Stories 11
Visionary Videocon 13
Landmarks 14
3 Research Methodology 15
4 Analysis and Findings 16
5 Threats of Entrance 25
6 Distribution Channels 34
7 Recommendations & 41
Suggestions
Bibliography………………………42
Annexure…………………………..43
VIDEOCON
EXECUTIVE SUMMARY
I have decided to present PDCS minor Project on
Videocon after studying its Product Range and
Services. I worked on Refrigrators of Videocon
India Ltd. .
I have chosen Videocon for many reasons. It is
one of the biggest Indian Electrical brands not
only in India but also globally. Indeed, Videocon
is one of the fastest paced Electrical Products
worldwide. Videocon thus posed an exciting
opportunity to study a brand that is automatically
associated with youth and technology.
I worked on Videocon in order to understand the
various aspects of its marketing strategy that has
made it the Number 1 MNC of India.
I focused on its strategies in Refrigerators in
comparison with LG, Samsung, Godrej and
Whirlpool.
INTRODUCTION
1.1 OVERVIEW
Videocon Industries Ltd. was one of the initials
company that made it to the World. Videocon
Electricals captured the initial Indian Electrical
market and topped the charts for its products such
as Refrigerators, television etc. before other players
such as Samsung,Whirlpool etc .entered Indian
market. Videcon was one of the first Electronic
Company to Collaborate with Japanese Toshiba
Ltd as early as 1985.
1.2 OBJECTIVE
Videocon is a company hard to pass by as it was one of
the few Indian Companies to be listed in Fortune
500 beside being initial Indian MNC. With its wide
range of electrical product range I choose the one
that has kept the Indian cools in enthralling
summers Refrigerators. The Hot and Humid
weather of the country had made many Korean and
Americans countries to walk into Indian market
earlier captured by Indian Electronics Giant
Videocon. The effect on Videocon and its strategy
thus become my area and/or object of study,
COMPANY PROFILE
HISTORY
A Man of ideas. A man of substance. A man of vision,
Shri Nandlal Madhavlal Dhoot, the founder of the
Videocon group, completed his education in
Ahmednagar, Pune and in Maharashtra, India. A
successful sugarcane and cotton grower, he boldly
ventured forth and imported machinery from Europe,
setting up the Gangapur Sakhar Karkhana (Sugar Mill)
in 1955, at a time when the village had no electricity,
thereby unleashing an industrial revolution.
The die was cast. Over the years, Nandlalji's
pioneering spirit found expression in a myriad ways,
earning him the well-deserved reputation of the doyen
of industrial activity in Marathwada, India.
In early 80s, Nandlalji initiated his three sons -
Venugopal, Rajkumar and Pradeep into the business.
Through a technical tie-up with Toshiba Corporation of
Japan, he launched India's first world -class Colour
Television: Videocon.
Today, Videocon is a household name across the
nation - India's No.1 brand of Consumer Electronics
and Home Appliances, trusted by over 50 million
people to improve their quality of life.
Customer, Corporate and Videocon
Corporate Overview
The Videocon Group is committed to create a better
quality of life for people and furthering the interests of
society, by being a responsible corporate citizen.
Creating Happiness
We will bring happiness into every home, offering high
quality consumer durables at affordable prices,
spreading the culture of convenience, entertainment
and comfort, far and wide.
Achieving Progress
We will pursue innovative technologies in the fields of
Electronics and Energy, create products and services
that will improve the quality of life, realize the goals of
the world community and protect the environment.
Sustaining Growth
We will be a source of pride to our business associates
by ensuring mutual prosperity and growth through the
implementation of forward-looking corporate
strategies, aimed at identifying opportunities and
responding intelligently to the dynamics of change.
Pursuing Excellence
We will provide a conducive environment for enabling
our employees to develop their potential and make a
significant contribution to the Group's success.
In 1985, through a technical tie-up with Toshiba
Corporation of Japan, Videocon International
Limited launched India's first world class Color
Television. Today, Videocon International Ltd., the
flagship company of the Videocon Group, is India's
leading manufacturer of Consumer Electronic
products. Fired by a passion for innovation, Videocon
has kept pace with the changing face of technology,
constantly upgrading its manufacturing facilities
to incorporate advanced technology and high
standards of quality into its product range, right
across the spectrum.
SUCCESS STORIES
The Heights of Success
VNG has some remarkable achievements to its credit,
starting with the successful absorption of sophisticated
technology from Techneglas Inc., USA. The CTV
Glass Shells manufactured by VNG are at par with
international standards and the Color Picture Tubes
made with VNG glass have already received VDE
approval. The facilities include a state-of-the-art Tool
Room and Mould Shop to manufacture and maintain
its mould requirements. Having initially successfully
established its 20V, 19V and 13V CTV glass parts,
VNG has now developed the 20V 2R the latest models.
A Picture Perfect Future
Till 1994, Indian manufacturers of CTV Picture Tubes
were importing Glass Shells. VNG's production has
replaced these imports, thereby saving almost Rs.200
crores of precious foreign exchange every year.
VNG has now surpassed the norms of performance
guaranteed by the collaborator, Techneglas Inc.,
U.S.A. and is operating the plant with 150% capacity
utilization - with efficiencies exceeding international
standards. Where fields of sugarcane grow tall and
proud. Where bushes of cotton bud blooms. Where
tourists flock to the world-famous caves of Ajanta and
Ellora.
Where India's NO.1 Consumer Electronics and Home
Appliances take shape, to take millions of Indians into
a better, brighter future.
This is Marathwada, India, where the Dhoot family
launched Videocon International Limited in 1984, with
the avowed purpose of producing world-class Colour
Television through a technical tie-up with Toshiba
Corporation of Japan. Within a decade, Videocon
emerged as India's leading brand of both Colour and
Black & White Televisions and continues to dominate
this highly competitive market.
The leader innovates. The leader forges ahead. The
leader breaks new ground. Harnessing the advanced
technology, relentlessly pursuing quality to achieve
various international standards of Quality Control.
Breaking through, time and again, with innovative
products for a better life.
VISIONARY VIDEOCON
Profiles of Leadership
Futuristic Neuro Fuzzy Logic Washing Machines,
User-friendly - No-Frost Refrigerators, the very latest
music systems. The most sophisticated Colour
Television and VCRs. High-Tech Air-conditioners.
Videocon today, is a multi-faceted group, with 9 state
-of-the-art manufacturing facilities all over India.
Highly qualified engineers, trained in Japan, backed by
6500 technical and support staff, work together in close
unison to produce India's leading branch of consumer
electronic products and home appliances.
Leadership through People
Videocon lays great emphasis on the training and
development of its work force, providing every
opportunity for growth and advancement, including
training stints overseas.
LANDMARKS
FROM ELECTRONICS TO ENERGY
The Heart of Nation
1995 was a landmark year for Videocon. It clearly
reaffirmed its leadership in Color TVs, Black & White
TVs, VCRs and VCPs, Washing Machines as well as
No-Frost Refrigerators. Then Videocon began to reach
out to the core. To industries at the heart of a nation:
Petroleum, Power, Construction and Housing. Leading
India into the future, with Confidence, with
determination, with a commitment to excellence,
rooted in the pioneering vision of a path breaker.
RESEARCH METHODOLOGY
The methodology followed by the researcher, during
the preparation of the report was collection of data
thorough SECONDARY SOURCES
When an investigator uses the data that has been
already collected by others, is called secondary data.
The secondary data could be collected from Journals,
Reports, and various publications. The advantages of
the secondary data can be –It is economical, both in
terms of money and time spent .The researcher of the
report also did the same and collected secondary data
from various internet sites like www.Google.co.in and
www.yahoo.com and many more. The researcher of
the report also visited various libraries for collection of
the introduction part.
ANALYSIS And FINDINGS
COMPARISON WITH OTHER COMPANIES
REFRIGERATOR INDUSTRY AT A GLANCE
• Refrigerators are being manufactured in India for
the last four decades.
• Till early nineties only direct cool refrigerators
were used in India.
• Videocon introduced frost-free refrigerators in
1991.
• In 2005-06 the market was as follows:
1
0.8
0.6 Direct Cooling
0.4 Frost Free
0.2 Direct
0 Cooling
Price % Mkt.
Share
Past trends
• Demand for refrigerators grew from 11,000 units
in 1968-69 to about 2.25 million units in 1996-97
• Demand for refrigerators has grown at a CAGR of
around 22% from 1.04 mn units in 1992-93 to
2.18 mn units in 1997-98.
• The total stock went up from 3.3 million units in
1968-69 to 17.2 million units in 1996-97, but still
covering only about half of the total households in
middle and high-income groups.
Current Scenario
• The current demand for refrigerators is approx.
2.9 mn units per annum.
• The 165-200 Ltrs of refrigerators comprise of
80% of the total demand.
• Frost Free refrigerators contribute 15% of the total
demand with 5% coming from the premium
range.
• The market structure is as follows:
Segment Share(%)
North 25%
East 14%
West 32%
South 29%
Rural 25%
Urban 75%
Household 85%
Institutional 15%
• The replacement demand is about 20% of the total
demand and shows preference for larger and
technically advanced models.
• Demand for the frost-free refrigerator is
increasing rapidly.
• Feature based differentiation and various price
points for same capacity emerge in the top and
high categories. Some of the features, individually
or together are used for differentiation.
• No and type of doors.
• Crushed ice and water dispenser
• Quick chilling zones
• Multiple temperature zones
• Adjustable racks and shelves
• Multiple use compartments
• Refrigerant – CFC free Vs CFC
• Energy efficient compressor
• Freezer space vis a vis Refrigeration space
Future Trends
• Replacement market is expected to increase to 25-
30% on account of faster replacement (further
induced by exchange scheme).
• Refrigerator market is expected to grow at a
CAGR of 14% in the medium term aided by the
rising per capita income and growing
consumerism.
• The demand for refrigerators is expected to be
about 3.6 million units in 2005-06 with a
penetration rate of about 13%
• As specified by the Montreal Protocol the use of
refrigerants such as CFC-11 and CFC-12 need to
be phased out by 2010.
********************************************
*******
SAMSUNG 396000
25.7%
25000
14.3%
LG 349000
22.7%
8000
4.6%
GODREJ 178000
11.5%
25000
13.8%
BPL 85000
5.5%
83000
7.4%
WHIRLPOOL 10000
0.7%
7000
4.0%
ELECTROLUX 8000
0.5%
8000
4.6%
OTHERS 313000 20.3%
TOTAL 1535000
100% 180000 100%
INDUSTRY ANALYSIS
(REFRIGERATOR INDUSTRY IN INDIA)
THREAT OF ENTRY
Barriers of entry
Economies of scale:
The players like Godrej, BPL , Whirlpool, Videocon
and Electrolux have achieved economies of scale.
Godrej has a capacity utilization of 75% and the
highest capacity in the industry. This declines their unit
cost of every function of business and enables them to
keep their prices low. This will force the entrant to
come in at a large scale and risk strong reactions from
them or come at a small scale and accept a cost and
price disadvantage.
Godrej also possesses economies of vertical integration
as it manufactures its own compressors, which
constitutes a substantial part of the manufacturing cost.
The other players like BPL and Videocon who are
currently outsourcing their compressors also plan to set
up their own manufacturing units for compressors in
the long run.
Product differentiation:
The companies like Godrej, BPL and Videocon, being
very old players in the Indian market enjoy high brand
awareness and consumer loyalties. These brand names
are associated with trust and reliability in the Indian
market.
The Korean players like LG and Samsung who
engaged in heavy advertising and brand promotion
during the last year have also created a niche for them
in the premium segment. Their brand awareness has
grown tremendously after the recent Cricket World
Cup Tournament, during which they advertised
heavily.
These create a barrier to entry by forcing the entrant to
spend heavily to overcome existing consumer loyalties
and to build a brand image.
Capital Requirements:
Huge Capital requirements are posed in front of the
new entrant in terms of advertising, product
development, Production facilities, Distribution
channel credit, inventories and for covering up the
start-up losses.
Access to the distribution channels:
The Indian players like Godrej, Videocon and BPL
which are catering to the mass market have a strong
distribution and dealer network.. They have a presence
in the urban as well as the rural areas. Moreover these
companies have established developed ties with the
channel members over the period of time, which are
hard to break.
Whirlpool has also developed a strong network of 4000
dealers in urban and semi urban areas in a period of
few years.
The South Korean Majors like Samsung and LG have a
dealer network of more than 1500, mainly in urban
areas and plan to expand it in rural and semi urban
areas also.
This poses a major threat in front of the new entrant as
the existing firms already serve the channels and the
new entrant will have to persuade the channels to
accept its product through high margins, promotional
allowances, better credit facilities and advertising
support, which will reduce the profits.
Cost disadvantage independent of scale
Learning or Experience curve: The old players like
Godrej, BPL, Videocon are high on the experience
curve, as they know the Indian Market well. This
Experience lowers their costs in production, marketing,
and distribution and in other areas of business, thus
giving a cost disadvantage to the new entrant.
Government policy: The Government policies of
levying duties on the imported Refrigerators and
refrigerator parts gives an advantage to the Indian
Players and in a way protect them from price
competition in the market with the MNCs.
Expected retaliation: The industry as a whole faces
excess capacity and the supply exceeds demand and so
the existing competitors are expected to respond
forcefully to a new entrant. The new entrant will face
competition based on the segment to which it tries to
cater
If the company enters in the Direct cool segment
Godrej and Whirlpool will pose the major threat.
If the company enters in the Frost free, high capacity
segment (above 300 Ltrs) it will have to face main
competition from LG, Samsung, BPL and Whirlpool.
2. INTENSITY OF RIVALRY AMONG THE
EXISTING COMPETITORS.
The companies in the Refrigerator industry of India
can be divided into four strategic groups based on
the price and the perceived quality of the products.
These groups also differ in their target segments
and the strategies adopted to cater to it.
High Price Medium Price Low Price
High 1.PREMIUM 2. HIGH3.SUPER
Perceived STRATEGY VALUE VALUE
Quality (1)LG, STRATEGY STRATEGY
Samsung, (2) Whirlpool,
BPL
Moderate 4.OVER 5. MEDIUM 6.GOOD
Perceived CHARGE VALUE VALUE
Quality STRATEGY STRATEGY STRATEGY
(3) Godrej (4) Videocon
Low 7.RIP OFF8.FALSE 9.ECONOMY
Perceived STRATEGY ECONOMY STRATEGY
Quality STRATEGY 5) Voltas
1. LG, Samsung: This strategic group includes the
South Korean MNCs. These are the players who are
operating only in the frost-free segment and carry a
large product length. They have products only in the
above 300 Ltrs segment. These brands follow the
Premium strategy of high quality at high price. They
are targeting to the upper income as well as the higher
middle class of the society with the products that are
associated with status. These companies have shown a
tremendous growth in few years.
2. BPL, Whirlpool: BPL, the market leader in the
Frost-free segment and Whirlpool of India, the
subsidiary company of the US giant Whirlpool form
this group. They have frost-free models in the below
300 Ltrs capacity segments as well as the above 300
Ltrs segment. The models in above 300 Ltrs segment
cater to the replacement market and to the higher
middle class. These aim at providing high quality at a
moderate price.
The models in the below 300 Ltrs are targeted at the
first time buyers of middle class and are not high in
price.
3. Godrej: These are the old brands of India, which
have high brand awareness and presence in urban as
well as the rural Markets. These are mainly serving to
the Direct cool segment and have few models in the
frost-free segment. These brands are catering to the
middle class and are not very high in prices.
4. Videocon: This is the company, which introduced
Frost-free refrigerators in India. The products are value
for money products. With the lowest prices in the
market it is catering to the middle class of the society.
5. Voltas: These companies cater to the middle and
lower middle class of buyers with their low priced
ranges.
The companies in the market witness a tough
competition from the other members of its strategic
group as they fight for the same chunk of the market.
As their products do not differ much in the features,
they try to differentiate their brands through copy
differentiation in advertising.
The competition intensifies as most of the companies
are using the same dealer network to distribute their
products. They lure the dealers to promote their
product by different strategies on margins, incentives
and credit and payment terms.
The competition increases as all the companies have
high Strategic stakes in the Refrigerator Business. A
major fraction of their revenues come from this
business and so they retaliate sharply to any move of
the competitor.
The industry has high Exit Barriers for the members
who have invested in the manufacturing facilities in
India in the form of specialized assets.
3. PRESSURE FROM THE SUBSTITUTES
The domestic refrigerators have no substitutes and so it
faces no threats in terms of that.
Product Range:
Consumer Electronics
DIGITAL SENSI
FLOW
DURAFRESH
PLATINUM
DEODORISER
GREEN HOUSE
CRISPER
SIX YEARS
WARRANTY
RNV275
DIGITAL SENSI FLOW
DURAFRESH PLATINUM
DEODORIZER
GREEN HOUSE
STYLISH EURO HANDLE
6 YEARS WARRANTY
RNR312
RNV312
SENSI FLOW SYSTEM
DURAFRESH PLATINUM
DEODORIZER
GREEN HOUSE CRISPER
VERTICAL HANDLE
6 YEARS WARRANTY
D380MF
D452MF
INBUILT DEODORIZER
FULLY AUTOMATIC
DEFROSTING SYSTEM
MULTIFLOW COOLING
SYSTEM
6 YEARS WARRANTY