Submitted by
In Partial Fulfillment of
MMM course
University Of Mumbai
(2007-2010)
Executive Summery
Before the liberalization of the Indian economy, only a few
companies like Kelvinator, Godrej, Allwyn, and Voltas were the major
players in the consumer durables market, accounting for no less than 90%
of the market. Then, after the liberalization, foreign players like LG,
Sony, Samsung, Whirlpool, Daewoo, and Aiwa appeared. Today, few of
these players control the major share of the consumer durables market.
Opportunity :
Threats :
1. Higher import duties on row materials.
2. Cheap imports from Singapore, China and from other Asian countries.
SCOPE OF THE PROJECT:
Path Forward:
Study Secondary data for industry overview,
Collect primary data for more insight,
Derive conclusions based on the Primary and Secondary,
Address research findings based on theory of Consumer Buying
Behaviorand Brand loyalty.
Study the various marketing moves of the market leader for better
understanding of the
Research Method
Assumptions :
• Samples collected are representative of the entire
population.
• Modern consumer is conscious and awareness is high.
• He/ She is more curious about the product, quality, price
and features offered.
• Try to obtain maximum information before actual
decision making.
• Being in the Indian context family plays a important role.
Research Objective:
• In this study more focus was to understand the Consumer
Buying Behaviorwhile purchasing Colour Television.
• In the changing market scenario, and post globalization
do Brand Loyalty really exist?
The key growth drivers for Indian consumer durables industry are :
• Rise in the share of organised retail: Rise in organised retail will set
the growth pace of the Indian consumer durables industry. According
to a working paper released by the Indian Council for Research on
International Economic Relations (ICRIER), organised retail which
constituted a mere four percent of the retail sector in FY07 is likely to
grow at 45-50% per annum and quadruple its share in the total retail
pie 16% by 2011-2012. The share will grow with bigger players
entering the market.
• Festive season sales: Demand for colour TVs usually pick up during
the festive seasons. As a result most companies come out with offers
during this period to cash in on the festive mood. This period will
continue to be the growth driver for consumer durable companies.
Industry Classification
Industrial Growth
C olour
Television, 30%
O thers, 34%
Refrigerators,
W ashing Air 18%
Mac hine , 5% C onditioners,
13%
C olour Television R efrigerators Air C onditioners
W ashing Mac hine O thers
Now lets see who all are the market players in this colour T.V. segment.
TV company and relative market share table and pie chart…
MARKET SHARE SHARE
OTHERS
VEDIOCON 2%
16%
LG
36%
ONIDA
18%
SAMSUNG
28%
From the market share analysis it is clear that LG India is market leader
in the Colour TV segment.
Age Group
Option % of Respondent
20 yrs - 25 yrs 27.50%
25 yrs - 30 yrs 47.50%
30 yrs - 35 yrs 12.50%
40 yrs - 45 yrs 8%
45 yrs and above 4.50%
50.00%
45.00%
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
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yr
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25
30
40
45
Age Group
Interpretation :
From the above findings it is clear that maximum no of respondent
(47.5%) who responds to the survey are between age group 25 – 30 yrs. We
can interpret based on this that maximum consumer for this category is
young in age. So, product should be attractive towards young generation.
Targeting and positioning should be done by keeping in mind this age group.
Q2. Gender
Gender
Option % Respondent
Male 85
Female 15
Gender V/S % Respondent
90
80
70
60
50
40
30
20
10
0
Male Female
Gender
Interpretation :
During survey and interviews it was observed that most of the respondent
(85%) are male. Even after globalization and many changes which had
occurred in the country’s social structure, male dominance can not be
ignored. Or other way it can be interpreted that male counter parts are given
liberty to take such high involvement decision.
So, Electronic industry is male dominated decision making industry.
Q3. Monthly Income :
Monthly Income
Option % respondent
Rs 10K - Rs. 20K 15.00%
Rs 20K - Rs. 30K 27.50%
Rs 30K - Rs. 40K 22.50%
Rs 40K - Rs. 50K 20.00%
Rs. 50K and above 15.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
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30
40
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10
20
30
40
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Interpretation :
From the collected data, monthly income of almost 50% respondent lies
between Rs. 20K – Rs.40 K. Companies should take this in to account while
fixing price for the Colour T.V.
Q 4. Which brand of electronics are you currently using?
.
Brand of Electronics
Option % respondent
BPL 3.61%
LG 15.66%
Sony 18.07%
Panasonic 1.81%
Vedeocon 8.43%
Samsung 12.05%
Whirlpool 6.63%
Godrej 9.64%
Philips 10.24%
Sharp 1.81%
Onida 4.82%
Others 7.23%
20.00%
18.00%
16.00%
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
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Q 4. Which brand of electronics are you currently using?
30%
25%
20%
15%
10%
5%
0%
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LG
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Q 4. Which brand of electronics are you currently using?
This question was used to check the various brands which have entered in
the consumers home through various appliances. Also, this gives the fair
idea about which brand of colour T.V. consumer is currently using
Interpretation :
As the data suggest, electronic brands which have strong foot hold in the
consumers house hold are LG, SONY, SAMSUNG, PHILIPS, Which are
comprising of 56.02% . Indian consumer market is dominated by these
International players. Where as Domestic big shot players like GODREJ,
VEDEOCON, ONIDA, BPL, hardly comprises of 26.5%
This clearly indicate that Indian consumers, post globalization are more
attracted toward the International Brands, instead of Domestic Brands.
They are ready to experiment by leaving age old Brands if proper quality
and value for money is offered.
Q5. When you think of colour T.V. which brand name strikes to your
mind ?
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
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LG
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Interpretation:
Recall value in the consumers mind plays a very important role in purchase
decision. Various factors such as brand image, Advertising impact, plays a
major role in creating a recall.
More the recall, more are the chances that the prospective customer will get
converted in to a active buyer. Data interpretation shows that international
brands like LG, Sony, Samsung are having more recall value. Where as in
domestic segment Vedeocan is followed by Onida.
LG should think of this, as even though being a market leader in the industry
the recall value for the SONY is high compare to LG. Samsung is almost on
the same ground as that of LG. LG. is having a immediate threat from
SONY and SAMSUNG in near future.
Q 6. Which type of colour TV are you having?
Type of colour TV
Option % Respondent
Conventional TV 35%
Flat TV 48%
LCD TV 10%
Plasma TV 8%
Ultra slim TV 0%
Type of colour TV
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Conventional Flat TV LCD TV Plasma TV Ultra slim TV
TV
Interpretation:
Even though the companies are more concentrating on flat screen TV, LCD
TV, there are still considerable consumers (35%) who are still using
conventional TV. This means, these consumers can be aspiring consumers
for the Flat screen or LCD TV. But market is not that much responding to
the Plasma or Ultra slim TV. Reason could be high price line or target
consumers (Top of the pyramid).
Q7. Do you own multiple TV units? (for bedroom, living room etc)
No of T.V. Sets
Option % Respondent
YES 12.82
NO 87.18
90
80
70
60
50
40
30
20
10
0
YES NO
Interpretation :
Only 12.82 % respondent says that they are having multiple TV units in the
house hold. This means still Indian consumer perceive the Colour TV to be a
family using item and not for individual usage. So, while customizing the
product company should keep in mind this family factor value in mind,
There is still scope for improvement for companies to introduce some
variant which will fulfill the room specific requirement at affordable price.
No of years % Respondent
30.00
25.00
20.00
15.00
10.00
5.00
0.00
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Yr
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6
-0
-0
-1
-0
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0
Yr
s
Yr
Yr
Yr
13
07
10
04
Interpretation :
Purchasing cycle of the product is very important. Respondent where
subjected to this question to know the purchase cycle of the Colour TV. If
we see the data, almost 56.10 % consumers had changed there colour TV in
last 6 years. Hence, 5 years purchase cycle can be considered by companies
for future strategies.
Q9. Do you intent to buy colour TV in near future? And within how
much time frame?
Intent to buy
Option % Respondent
YES 60
NO 40
Time period
Option % Respondent
with in three months 5.00
Next six months 2.50
Within a year 25.00
with in next Three yrs 15.00
with in next Six yrs 52.50
Time period %Respondent
60.00
50.00
40.00
30.00
20.00
10.00
0.00
with in three Next six Within a year with in next with in next
months months Three yrs Six yrs
Interpretation:
This findings also support to the earlier suggestion. Almost 52.5%
consumers intent to buy CTV in next 6 years.
• Affordable price
• Good clarity
• Good sound quality
• Long term durability
• Good Performance
• Over all features
• After sales service,
As a part of consumer behaviour, every Brand has some USP’s to which the
consumers always associate the brand with. Respondent were asked to name
brand against the feature mentioned. The results for the same are as follows.
25
20
15
10
0
Samsung LG Onida Vediocon Sony
Interpretation:
Consumers are having a perception of Vediocon and SAmsung among the
top brand based on the pricing.
Clarity
Option % Respondent
Samsung 19
LG 27
Onida 16
Vediocon 10
Sony 28
Clarity % Respondent
30
25
20
15
10
0
Samsung LG Onida Vediocon Sony
Interpritation
Sound Quality
Option % Respondent
Samsung 22
LG 28
Onida 10
Vediocon 12
Sony 28
Sound Quality % Respondent
30
25
20
15
10
0
Samsung LG Onida Vediocon Sony
Interpretation:
Again the survey findings are in favor of the LG and Sony for sound clarity.
Durability
Option % Respondent
Samsung 28
LG 34
Vediocon 14
Sony 24
Durability % Respondent
35
30
25
20
15
10
0
Samsung LG Vediocon Sony
Interpretation :
Performance
Option % Respondent
Samsung 24
LG 30
Vediocon 18
Sony 28
Performance % Respondent
30
25
20
15
10
0
Samsung LG Vediocon Sony
Interpretation:
Consumers rate LG ahead of all the brands in case of performance.
35
30
25
20
15
10
0
Samsung LG Vediocon Sony
Interpretation:
Sony provides best after sales service through the CRM of the company.
Q 11. Will you buy the same company which you are currently owning?
Same company
Option % Respondent
YES 42.5
NO 57.5
Same company % Respondent
60
50
40
30
20
10
0
YES NO
Interpretation:
There is not much difference in the consumers response. Reason for this
could be consumers are unsatisfied with current brand, or they are eager to
try out some new product from different brand.
Q12. From where would you collect data / information about new colour
TV set?
Information Processing
Option % Respondent
Friends 22.05%
Showroom Survey 22.83%
News paper/ magazine 18.11%
Internet 17.32%
T,V, Commercials 15.75%
Others 3.96%
Information Processing % Respondent
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
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Interpretation:
Consumers like to acquire required information from traditional methods of
information processing and that is friends, magazines. Due to retail growth
in India the showroom survey is more comfortable for consumers. Internet
information gathering is also on the raising side.
Q 13)What would you take in to consideration while making buying
decision?
Factors
Options % Response
Price 14.9
Quality 18.27
Features Offered 15.87
Style 6.25
Latest Technology 13.46
Aftersale service 13.46
Gifts Offered 3.85
Brand 13.94
Factors % Response
20
18
16
14
12
10
8
6
4
2
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In previous few questions we have seen that how consumer perceive various
Brands with various features. Now to understand the consumer decision
making process in a better way, it is important to know what are the factors
which consumer take in to account while making decision making. As listed
above various factors are taken in to account by the consumers. Quality,
features and price are on the top of the mind while making buying decision.
90
80
70
60
50
40
30
20
10
0
Yes No
Interpretation:
Opinion
Option Response
Friends 23.68
Parents 25
Spouse 25
Children 13.16
Salesman 4
Others 9.16
Opinion Response
25
20
15
10
0
Friends Parents Spouse Children Salesman Others
Interpretation :
As discussed earlier, consumer’s family plays a very important role in
decision making. But apart from family members what all are the factors
which influence the consumers in buying decision? Friends, parent,
spouse , children, salesman, others (office colleague , word of mouth,
brand ambassadors) are influencers. There opinion is count by the
purchaser before making buying decision.
Q16. From where would you prefer to buy your colour TV set. ?
Purchase Point
Option Response
Company Showroom 42.5
Electrical mall 26.5
Local Vendor 12.5
Exhibitions 0
Multi Branded Showroom 18.5
Purchase Point Response
45
40
35
30
25
20
15
10
0
Company Electrical mall Local Vendor Exhibitions Multi Branded
Showroom Showroom
Interpretation:
Point of purchase is another important factor which always come to
buyers mind. Being a high involvement product, consumers want to buy
the product from the reputed and trustworthy purchase point. When
response from the respondent was analyzed it can be seen that almost
42.5% respondent want to buy product from the companies showroom.
Electronic mall, and multi branded showroom comprise of 44.5% share.
Various exhibitions which company get in to do not form part of the
favorite consumer purchase ponit.
Q17. As a future product what features would you like to add in to colour
T.V.?
Interpretation:
Understanding the consumers need, adding a desire in that need,
converting the same in to want and providing the product to fulfill the
want is the main key for any marketer. For this purpose , by this survey I
tried get insight of what consumer is expecting form the product in near
future? What are the needs of the consumers? What future development
do the consumer want in the product?
If we study and try to understand what need the colour TV basically
address then the question would be need for entertainment, need for
pleasure, need to experience the LIFE by visual and hearing senses.
But is this all that a consumer want from the colour TV?
Survey findings gave a total new insights about the consumers changing
lifestyle patterns, new expectation, creative demands and lot more
possibility to bring the totally innovative products.
Following are the few key expectations of the consumers from the
product :
1. Quality Picture,
Good Resolution,
3D Picture,
Big Screen,
Can be converted in to proxima when needed for theatre
like experience (actual Home Theatre).
Screen at both the side !!!
2. Quality Sound,
Surround Sound
No of speakers, for better sound quality,
Natural sound reproduction.
3. Additional features:
Ergonomic view.
Ready Set Top Box inside the TV,
Wire less connectivity,
Less power consumption when in use,
Additional features like inbuilt games, music system.
Artificial intelligence.
4. Techno savvy features:
Ergonomic view
Great resolution
Wireless
Big Screen connectivity
Customer relationship
management
Natural sound
Reproduction After sales service Blue tooth
connectivity
CONSUMER BEHAVIOR
The aim of marketing is to meet and satisfy target customers’ needs and
wants. The field of consumer Behaviorstudies how individuals, groups, and
organizations select, buy, use, and dispose of goods, services, ideas, or
experiences to satisfy their needs and desires. The consumer buyer
Behavioris the buying Behaviorof final consumer–individuals and
households who buys goods and services for personal consumption.
Understanding consumer Behaviorand “knowing customers” are
never simple. Customers may state their needs and wants but act otherwise.
They may not be in touch with their deeper motivations. They may respond
to influences that change their mind at the last minute. Nevertheless,
marketers must study their target customers’ wants, perceptions, preferences,
and shopping and buying behavior:
Studying consumers provides clues for developing new products, product
features, prices, channels, messages, and other marketing-mix elements.
Habit
(Little or no Information Inertia
Search, consideration of Brand Loyalty (canned Vegetables,
only one brand) (Cigarettes, Perfumes) Paper Towels)
The first dimension represent a continuum from decision making to habit.
Consumers can base their decision on a cognitive process of information
search and evaluation of brand alternatives. On the other hand, little or
no decision making may take place when consumer is satisfied with a
particular brand and purchase it consistently.
The second dimension depicts a continuum from high to low
involvement product. High involvement purchase are those that are
important to the consumers. Such a purchases are closely tied to the
consumers ego and self image and involve some financial, social,
personal risk. In such cases it worth consumer’s time and energy for
information search. Low involvement purchase are not important to
consumer and risk involve is less.
Decision making versus habit and low versus high involvement produces
four types of consumer purchase processes. The first process is called as
Complex decision making, it takes place when involvement is high and
decision making occurs. In such a types of cases consumers have the time
for active information search and process it in more details. They use this
information to evaluate and consider the alternate brand by applying specific
criteria such as economy, durability, and service.
Complex decision making will not occur every time the consumer purchase
a brand. When choice is repetitive the consumers learns from the past
experience and with little or no decision making buys the brand that is most
satisfactory. Such a Brand loyalty is the result of repeated satisfaction and
strong commitment to a particular brand. In such cases purchase is important
for the consumers. Also it should be noted that decision process are
consumer specific rather than product specific. That is the degree of
involvement and decision making depend more on the consumer’s attitude
toward the product than on the product’s characteristics. One consumer
might be involved with the product because of some specific characteristics.
Another might not give importance to these characteristics and switch brand
in search of variety.
CONSUMER INVOLVEMENT AND COMPLEX DECISION
MAKING:
As seen earlier two conditions for complex decision making are
• Decision process require extensive information
processing,
• High degree of consumer involvement with the product.
Therefore to understand the complex decision making, we will first consider
the nature of the consumer involvement and then describe the nature of the
consumer decision process.
Complex
Decision
Extensive Making
Information
processing
High level of
involvement
Little or no
Information
processing
Brand
Loyalty
The nature of the product is not the only conditions for complex decision
making. Certain facilitating conditions need to exist. The most important is
adequate time for extensive information search and processing.
Complex decision making will not occur if a decision must be made quickly.
Also consumers may not have time to devote to extensive information
processing because of business and social obligations may have higher
priority.
Second condition for complex decision making is the availability of
adequate information to evaluate alternative brands. Consumers some times
delay in decision making because of insufficient and inaccurate information.
Decision making is delayed when there are too many products
characteristics and features to consider.
Consumer
Need Information
Arousal Processing
Feedback
Post Brand
Purchase
purchase Evaluation
Evaluation
As seen in the above figure and as explained in the above points consumer
buying Behavior is a five step process. This process starts with need
recognition and completes it’s loop with post purchase evaluation feedback
to the consumer. It is an on going process. It never stops even after the
purchase is happened. Consumers feedback may initiate the purchase
decision of the other buyer. Hence it becomes very important for the
company to make the entire experience of the buying a memorable one for
the consumer. So, that he/she become self impose Brand ambassador for the
product and endorse the product in the market.
But is it so easy for any consumer to buy the product? How does the
decision making happens in various products? Is it same complexities in all
products?
If we see the survey findings for buying the same product or from same
company to that matter. Consumers are not very much sure about the
decision. Only 44.19 % consumers responded positively where as
remaining things otherwise. Now what does this means? Consumers are
not very sure about their association with a particular Brand. Probably
Consumers want to try different Brand next time. So, slowly, slowly
Brand loyalty is getting diluted from this segment of the market. Which
was not the case earlier. Consumers used to be very much Brand loyal
with the particular brand for years. But changing globalization and
market environment is shifting the Consumer’s focus from being Brand
Loyal.
MARKETING MIX
Marketing mix can be defined as the set of controllable tactical marketing
tools – product, price, place, promotion-that the firm may blend to produce
the response it wants in the target market.
PRICE- It is the amount of money the customer have to pay to obtain the
product (CTV). It includes list price, discount, allowances, payment period,
credit terms.
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
GROWTH STRATEGY
CORE COMPETENCY
SLOGAN
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
And the number follows many more…………………………..
In Feb. 2007 LG Electronics and Yahoo formed a strategic alliance. Yahoo
mobile services will be available from LG mobile. This service is targeting
10 million LG mobile phones in over 70 countries.
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
The Internal Culture of LG:
1. Learning Culture
3. A Carrier
4. Growth
A carrier is highly growing in LG and one who is the employee can develop
their carrier largely. A new comer will feel fully comfortable in the company
and for a new comer the company is very helpful in the overall growth of
personality.
Growth in LG is very high for those who are in the company and for those
who want to join in LG. The company is growing with fast innovation and
the BLUE Ocean strategy is one of the examples of growth.
Mission
Product Leadership
We are focusing on six development areas to become the product leader.
1. New Machine
2. Reliability
3. Conventional Installation
6. Energy Saving
Quality Innovation
c) Equal opportunities
d) Equal Treatment
Code of conduct of LG
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.
India challenges
appliances.
well.
R&D potential
LG has the research and development facilities in Bangalore and Pune. Both
the unit carry out R&D department for the domestic as well as the parent
company it also dose customize R&D for the specific countries to which it
export product.
Regional channel and wide distribution network
LG PUNE
LG Pune is the branch office of LGEIL. It is located in J.M Road. In 2004
LGEIL opened second factory which is located in Ranjangaon. This plant
manufactures all product including DVD writers and GSM mobiles. Thus it
became first company to manufacture DVD writers in India. The ODP plant
aims to reach a manpower base of 1500 people and an investment of Rs 300
crore till 2010. LG India will become the export hub for LG Worldwide,
catering to the Middle East and African markets. The company aims to touch
an export turnover of $3 billion by 2010 from India, which will contribute to
30 per cent of the Indian arm's turnover. , India, October 6, 2004 -- LGE
announced 3 growth strategies aimed at the 1.1 billion people of India
making the Indian market the second largest global production base
following China. Under this strategy LGE has projected 2007 revenues in
India will exceed US$10 billion, 10 times that of 2004.
The three strategies for the Indian market that the global electronics giant
disclosed included: penetrate the south-western market of India through the
new plant near Mumbai, the second largest city in India, in addition to the
existing northern plant; installs a new GSM handset production line in the
new plant and use it as its second-largest global GSM handset production
line after the Qingdao plant in China; and expand the current 750 R&D staff
in India to 1,500 by 2007, striving to develop premium products and export
30% of India-manufactured products to Asia, Middle East and Africa
markets by 2007. LG Electronics’ second new plant in Pune, India covers a
total area of 211,200 square meters and is currently equipped with a
production line to manufacture 600,000 TVs and one million refrigerators a
year. The company is set to add production lines of air conditioners, washing
machines, monitors, and electronic ovens, by 2005. Also, LG Electronics is
poised to install a GSM handset production line in the new plant by early
next year. The GSM handset line envisages a capacity of manufacturing 2
million handsets annually, and the company expands it to become a global
GSM handset production base with a capacity of an annual 10 million units
by 2010. In connection with its three growth strategies for the Indian market,
LG Electronics will invest a total of US$150 million in establishing facilities
and boosting R&D efforts in India by 2007. Specifically, it will invest
US$53 million in the second plant, another US$43 million in establishing
the GSM line, and US$54 million in securing R&D manpower and boosting
other efforts. Through these strategies, LG Electronics aims to penetrate the
global market by using China and India as its core production bases, while
operating its plants in Changwon and Gumi, Korea, as its main production
bases. This way, the company is pushing to penetrate the global home
appliance market. The present capacity of the facility is of 1 lakh unit per
year and it shall cater to the need of the domestic markets. LG plans to
upscale its operations to a figure of 2.5 lakh units a year in the near future.
The plant in addition to its current manufacturing facility at Greater Noida
will enable the company to enhance its consumer reach and reiterate it’s
commitment towards providing superior technology products to the India
consumer.
Logistics is the art and science of managing and controlling the flow of
goods, energy, information, and other resources like products, services, and
people, from the source of production to the marketplace. It is difficult to
accomplish any marketing or manufacturing without logistical support. It
involves the integration of information, transportation, inventory,
warehousing, material handling, and packaging. The operating responsibility
of logistics is the geographical repositioning of raw materials, work in
process, and finished inventories 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 meet customers'
requirements.
5R’s of Logistic followed by LG:
1. Right Time
2. Right Place
3. Right Condition
4. Right Cost
5. Right Handling
CUSTOMER SERVICE:
The best and the biggest international brands are here in India –but the irony
if it all: where is the after-sales-service? So integral to a brand, so critical for
its success and so taken for granted in developed markets! In India, after
sales service is, for want of a better description, the pits. So what’s stopping
the best companies from pulling out all the stops when it comes to providing
the best service? Do customers expect for too much? Or is it that in India
they don’t really care. Brand Equity fanned out to MNC as well as Indian
consumer durable companies, stockiest and dealers, analysts and market
researchers to get feel of what’s really keeping after sales from being used
as a cutting edge marketing tool in pushing products across categories.
Customers support following the purchase of a product or service. In some
cases, after-sales service can be almost as important as the initial purchase.
The manufacturer, retailer, or service provider determines what is included
in any warranty (or guarantee) package. This will include the duration of the
warranty traditionally one year from the date of purchase, but increasingly
two or more year’s maintenance and/or replacement policy, items
included/excluded, labor costs, and speed of response. In the case of a
service provider, after-sales service might include additional training or
helpdesk availability. Of equal importance is the customer's perception of
the degree of willingness with which a supplier deals with a question or
complaint, speed of response, and action taken.
LG also had a big problem of after sale service in India. Customers as well
as dealer were facing the problem of after sales service. Because of this
problem many dealer in the region were not ready to sell LG product. So it
becomes the big issue. But LG has taken some solid steps towards
improving customer’s perception and experience of after sales service.
Because it very important in competitive market to provide the best service.
L G Electronics has signed a memorandum of understanding with 23
Industrial Training Institutes to strengthen its after sales service in India. The
company aims to recruit 10,000 people by the end of this year as a part of its
branding strategy to focus on service and move away from discounting. L G
Electronics has identified eight states with high after sales service call rates
to ink the deals with the ITI. Y V Verma, director HR and management
system, LG Electronics said, "The Company was trying to find a solution for
effective after sales service since last two years. There is a huge need of
trained manpower for the after sales service to align with the company's
expansion and focus on the GSM mobiles and the personal computer
segments."
1. In the initial phase the company has entered into agreements with ITIs in
the states like Maharashtra, Gujarat, Delhi, Punjab, Assam, and Karnataka
and is in the last leg of signing with Uttar Pradesh.
2. L G Electronics, with 1200 service centers, has already recruited 300
students and plans to beef up the number to 10,000 by the year-end.
3. "The company has offered a scholarship to the selected students for the
last six months of their training program,"
4. The company will invest Rs 8 crore (Rs 80 million) in employee
development program this year with an aim to attain a 8 per cent attrition
rate.
5. The company moved away from the discounting strategy since last year
and is putting thrust on the quality and service in its brand communication to
position LG as a premium consumer electronics brand.
6. At the top, the Service Division in Korea reports to the Global CMO. (as
mentioned in Dermot’s public interview in ET). This shows commitment
that Service must be made into a marketing differentiator, and leveraged
thus.
7. LG has the widest service network across the country; some estimates put
it at a significant multiple of service-infrastructure from our nearest
competitor. While the sale size may also be a nice multiple from nearest, it
shows the company is ready to put our money where our mouth is.
8. The company has introduced a 211 service - once you register your
complaint, we will call you back in 2 hours (hence 2), set up an appointment
for the next convenient day for you (hence the first 1), and show up in the
promised 1-hour slot (hence the second 1). If the next convenient day for
you is the next day, that’s great too. It’s a disruptive action in an industry
(including LG) having traditionally shied away from its service
responsibilities, and thus not leveraging any mileage from it.
9. The company is promoting 211 through ATL, probably the first time after
sales service is being communicated in this fashion by any product
company. You may have seen the TV commercial or heard the radio advert
or seen the newspaper ad or in-shop posters, both of which revolve around
prompt response.
10.The first LG-owned service centre opened in Gurgaon. (Service in India
generally works through authorized service centers, in LG’s case they work
exclusively for LG.) A company-owned service centre tries that much
harder, knows things better, and can even contribute as a revenue center.
1. LG should improve it’s after sale service because its hits badly LGs
market share.
LIMITATIONS
Every study has certain limitations. In my study, also there were certain
limitations, which I could not able to solve.
consumer behavior.
4. Rural area coverage was limited due to the consumers passiveness
towards the survey.
5. Due to passiveness and Geographic limitations of showroom owners,
Never the less whatever support I have got from consumers, survey
respondent, Showroom owners is highly appreciable.
BIBLIOGRAPHY
www.lgindia.com
www.google.com
www.wikipedia.com
Business world
Business today
Economics times News paper
Times of India
“ Consumer Behavior and Marketing Action” … by Henry Assael