A

PROJECT REPORT
ON
MARKET ANALYSIS OF LG CONSUMER DURABLES &
DEALER DEVELOPMENT

In the partial fulfillment of

requirement for the award of degree of

MASTER OF BUSINESS ADMINISTRATION (MBA)

From
Dr. Babasaheb Ambedkar Marathwada University,
Aurangabad

Submitted By

Pratap P. Ingle
Roll No. 0815023

Under The Guidance of

Ms. Pradnyashailee Sawai

MGMs
Institute of Management (IOM), N-6, CIDCO,
Aurangabad.

1
 DECLARATION

I, the undersigned, hereby declare that the project report

on The Market Analysis of LG Consumer Durables &
Dealer Devlopment is submitted to the MGMs Institute
of Management, CIDCO, Aurangabad. It is my original
work and the conclusions drawn there in are based on the
data & material collected by myself.

Date: - Pratap P. Ingle

Place: - Aurangabad

2
 ACKNOWLEDGMENT

The successful completion of this project report could not

have been possible without the help and guidance of
many people. I would like to express my sincere and
deepest sense of gratitude to all of them.

I am deeply indebted to my project guide Ms.

Pradnyashailee Sawai for her valuable guidance for my
project.

It gives me immense pleasure to acknowledge LG

Electronics India Ltd. dealers, who have been nice
enough to give me a chance to do my project and
providing me wonderful support throughout my project.

I sincerely thank Dr. S.A.Somwanshi (Director, MGM

IOM) whose direction and encouragement motivated me
to steer the project work confidently and successfully.

CERTIFICATE

3
This is to certify that the project report on The Market
Analysis of LG Consumer Durables & Dealer
Devlopment submitted by Pratap Ingle is the result of
his original research work completed under our
supervision. To the best of our knowledge & belief the
work embodied in this project report has not formed
earlier the basis for the award of any degree or similar
title of this for any other examining body.

Ms. Pradnyashailee Mr.Goutam Saha Dr. G.A. Nikam

Sawai
Project Guide Dean Director
(Academics) (Research &
Academics)

Date:-
Place:-

INDEX

4
SR. NO. SUBJECT PAGE NO.

1. INTRODUCTION 6

OBJECTIVES 10

SCOPE 11

REASERCH METHODOLOGY 12

LIMITATIONS 13

2. REVIEW OF LITARATURE 14

3. PROFILE OF THE COMPANY 16

4. CRITICAL ANALYSIS 26

5. SUMMARY 31

FINDINGS 32

SUGGESTIONS 33

BIBLIOGRAPHY 36

6. QUESTIONNAIRE 37
INTRODUCTION

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.
5
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 2009-2010. 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.

Global Operation

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

LG Group
1. LG.Philips LCD
2. LG Chemical
3. LG Telecom
4. LG Powercom
5. LG Twins
6. LG Dac
Business areas and main products

Mobile communications
(a) CDMA Handsets,
(b)GSM Handsets,
(c) 3G Handsets,

6
(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) CDRW,
e) Notebook PCs,
f) Desktop PCs,
g) PDAs,
h) PDA Phones,
i) MP3 Players,
j) New Karaoke Systems,
k) Car Infotainment

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.

7
LG corporate office is located at Plot no.51, Udyog Vihar, Kasna Road,
Greater Noida, India. This facility manufactured Color Televisions, Washing
Machines, Air-Conditioners and Microwave Ovens.
''Company is setting up a chain of exclusive premium showrooms. LG plans
to launch 60 premium Brand Shoppes by the end of the first quarter of this
year. At present, LG has a total of 83 LG stores across the country, of which
45 are shops and 38 are exclusive stores. Brand shops will be placed in the
premium segment and the target audience will comprise buyers interested in
premium and high end products.
LG Brand Shoppe goes beyond the concept of a normal exclusive store by
having a more interactive environment and additional lifestyle orientation on
display so that the customer can actually experience the LG products in his
or her own home settings.
LG Electronics India Ltd (LGEIL), consumer durables leader with 27% market
share, is planning a brand new image. To attract inspirational and young
consumers across India, company will roll out a new marketing strategy. The
exercise will cost the company Rs 360 crore.
LG Electronics India is the fastest growing company in the consumer
electronics, home appliances, and computer peripherals industry today. LG
Electronics is continually providing, superior technology products & value for
money to more than 50 lakh households in India. LGEIL is celebrating the
11th anniversary this year.
LG Soft India the innovation wing of LG Electronics in Bangalore is LG
Electronics' largest R&D centre outside Korea. We at LGSI focus on niche
technology areas such as mobile application development, digital video
broadcast and biometrics software and support LG Electronics with our
expertise. Motivated by a passion for technology, a strong work culture and
loyalty to the organization, we are determined to see LG become one of the
top three brands globally.
Prominent consumer electronic company, LG Electronics Inc. has said that it
expects the sale of its products in India to up by 15 per cent in 2008. Moon
Bum Shin, managing director of LG Electronics India has said that the
company has earmarked 4.8 billion rupees for investment purpose in India
this year. The said money will be used to market as well as manufacture new
products.
LG Electronics, which is originally a South Korean Company with branch in
India, informed that its sales of GSM mobile phones, color televisions, air
conditioners and other household goods in the Indian market was to the tune
of 95 billion rupees ($2.4 billion) in 2007. As per Shin's estimate, the sales in
2008 would be around 110 billion rupees. In order to achieve its target, Shin
said LG Electronics will concentrate on catering to the high-end consumer

8
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
exports to 40 countries.

Classification of consumer durables sector

Consumer electronic include

vcd/dvd, home theatre, music player, color television (CTVs),
cameras, camcorders, portable audio, Hi-Fi, etc
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.
Moulded luggage include plastics
Clocks and watches
Mobile phones

OBJECTIVES OF THE PROJECT

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.
9
 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.
To enhances the knowledge about the marketing and branding
N activity.

SCOPE OF THE 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 Pune. Incidentally Gudipadava 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.
10
 In term of purchasing power parity (PPP), India is the 4th
largest economy in the world and overtake Japan in the near
future become the 3rd largest.
Indian consumer durable market is expected to reach $400
billion by on 2010
India has the youngest population amongst the major
countries. There are lot of people in the different income
categories nearly the two third population is below the age of
35 and nearly 50% is below 25.
There are 56 million people in middle class, who are earning
us$4,400-US$21,800 a year. And there are 6 million rich
household in India.
The upper-middle and high-income household in urban areas
are expected to grew to 38.2 million in 2007 as against 14.6
million in 2000.

RESEARCH METHODOLOGY

Research methodology is considered as the nerve of the project. Without a

proper well-organized research plan, it is impossible to complete the project
and reach to any conclusion. The project was based on the survey plan. The
main objective of survey was to collect appropriate data, which work as a
base for drawing conclusion and getting result.
Therefore, research methodology is the way to systematically solve the
research problem. Research methodology not only talks of the methods but
also logic behind the methods used in the context of a research study and it
explains why a particular method has been used in the preference of the
other methods

11
Research design

Research design is important primarily because of the increased complexity

in the market as well as marketing approaches available to the researchers.
In fact, it is the key to the evolution of successful marketing strategies and
programmers. It is an important tool to study buyers behavior, consumption
pattern, brand loyalty, and focus market changes. A research design
specifies the methods and 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 and to control variance.

Data collection methods

After the research problem, we have to identify and select which type of data
is to research. At this stage; we have to organize a field survey to collect the
data.
One of the important tools for conducting market research is the availability
of necessary and useful data.

Primary data: For primary data collection, we have to plan the following
four important aspects.
Sampling
Research Instrument
Secondary Data - The Companys profile, journals and various literature
studies are important sources of secondary data.
Data analysis and interpretation

LIMITATIONS

Every study has certain limitations. In our study, also there were certain
limitations, which I could not able to solve.

The research was conducted in a very small area.

12
 Our research work period witness the biggest ups and downs in
product sale of different brands, which affected the perception of the
customer.
This was biggest drawback of my study.
Time factor was also important for us. We had limited time for the
research, for which a full-fledged report was insufficient for me.
The customer filled the questionnaire mostly in careless manner, so it
was difficult to make them hold for time.
We had only found the upper-middle class family to fill up the
questionnaire, but generally, an average middle class family was
required for the study.
The sample size is also very small which represent my research on
consumer behavior

REVIEW OF LITERATURE

The increasing spread and domination of international brands has seemed

inevitable for at least the last 30 years. Investors have historically been
extremely confident about the prospects for branded goods businesses,
particularly those owning international brands like LG . And the multinational
branded goods owners themselves have shared that confidence. With their
economies of scale, massive spending power and highly developed
management structures, these behemoths have seemed invincible.
Multinationals, in pursuit of the global brand, have rationalized irrational
name variants In the last few months, LG has changed the name of its
13
leading cleaning brand in the Korea but local and regional brands still remain
strong.
The multi-layered multinationals simply dont have the agility and speed to
respond to local needs in every country of the world in the way that locally
grounded brands do. Nimbler, smaller competitors, who are solely focused on
their home markets, can adapt more quickly. None of this has gone
unnoticed by global brand owners. It could be argued that the downfall of all
local brands is that they have ambitions to be global brands. It is clear that
the fortunes of both global and local brands will wax and wane with new
fashions, new governments and new technology esp. in the case of
multinationals like . Perhaps, though, the question we really should be asking
is what global and local mean in the new economy. Most virtual Internet
brands are effectively transnational. The word global in our marketing
vocabularies for some time now and that very coining seems to recognize
that global and local brands need each other. In the end people want both
global and local brands brands that make them feel part of wider
international community and brands that root them in their home culture as
done by LG worldwide.

TERMS AND CONCEPTS USED:

Global Marketing Strategy:
How companies position themselves in different companies and how
customers perceive the value and authenticity of their brand name and
products is majorly what a marketing strategy focuses on Global
Marketing strategies become increasingly important within a modern
global company. No firm competing regionally, or world-wide, can
afford to pursue marketing strategies that are based solely on national
characteristics or potentials. To succeed in these situations, the
marketing effort must consider all global aspects of the companys
marketing effort and its competitors. Companies must develop
characteristics that, compared with national, regional and global
competitors, generate advantages in the market place. Marketing
resources must also be effectively allocated in line with strategic
objectives.

Global Success Factors:

A companys many attributes form to make the company a major

success. These major strategies and core competencies of companies
make up its global success factors.

Global Advertising:
14
 Global advertising depends on the culture, value and beliefs of the
coutry where the company wants to place itself. For example in
Pakistan the advertisements are way different than they would be in
china or in Australia or in any other country for that matter.

Mediums for Advertising

Another major part of global branding is mediums for advertising. It

depends a lot on technological potential of countries where the
company is doing its operations. Electronic-media, bill boards, print
media and many more mediums are used for this purpose.

Brand awareness

Brand awareness is a proof of companys success. It relates to how

customers know about the brand and respond to it. Later in this report
a brand awareness survey has been carried out to make the concept
clearer.

Competitors analysis

Its is very important for companies to carry out this analysis to know
their position in the market and to analyze how they can make it better
for themselves to improve on their product and mange to have a
competitive edge over their competitors

PROFILE OF THE COMPANY

MISSION

15
 The mission of LG is to provide the customers with utmost
satisfaction through leadership. The fundamental policy of
development is to secure product leadership that the Customers
may have the utmost satisfaction.

VISION

Global Top 3 by 2010

Global Top 3 Electronic/Telecommunication company

GROWTH STRATEGY

Fast innovation, Fast growth

CORE COMPETENCY

Product leadership, Market leadership, People leadership

CORPORATE CULTURE

No excuse, we not I, Fun workplace

SLOGAN

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

smart products that will make your life good.

THE SYMBOL

16
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 LGs efforts to keep close relationship
with our customers around the world.

The symbol consists of two elements.

1. The logo in LG gray

2. The stylized image of human face in the unique LG red color.

Red color represents our friendliness and gives a strong impression of LGs
commitment to deliver the best.

The circle symbolizes The Globe. The stylized image of a smiling face in the
symbol conveys Friendliness and Approachability.

The one eye on the symbol represents Goal-oriented, Focused &

Confident.

The slogan of LG is Lifes Good. It expresses Brands Value ,

Promises, Benefits , Personality .

History of the company

The company was originally established in 1958 as Gold Star, producing

radios, TVs, refrigerators, washing machines, and air conditioners.

17
1958-69 - GoldStar The Electronics Industry Dream

1970-79 - GoldStar symbol of The Technolgoy

1980-88 - INTERNATIONALIZATION

1989-94 - INOVATION

1995-98 - GLOBAL LEADERS LG ELECTRONICS

1999-03 - DIGITAL MANAGEMENT

2004-06 - 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 LG was derived. The current "Life's
good" slogan is a backronym. Before the corporate Name change to LG,
household products were sold under the Brand name of Lucky, while
electronic products were sold under the brand name of Gold Star. The
Gold Star brand is still perceived as a discount brand. In 1995, Gold Star was
renamed LG Electronics, and acquired Zenith Electronics of the United
States.

18
 LG BRAND IDENTITY

The brand of LG is delightfully smart. LG strives to enhance the customers

life and lifestyle with intelligent features, institutive functionality and
exceptional performance.

The brand platform

The LG brand is composed of four basic elements
1. Value
2. Promise
3. 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 the customer includes

a) Reliable products
b) Simple design
c) Ease of use
d) Extraordinary Experience

Personality describes the human characteristic that are expressed to the

customer throughTrustworthy, ConsideratePractical, Friendly

The Internal Culture of LG

LG practices four cultures

1. Learning Culture
2. Boundary less Environment
3. A Carrier
4. Growth

19
According to LG, the Learning Culture continuously helps the employee to
learn more and more to develop the habit of continuous learning.

Boundary less Environment means that there is no difference between

the levels of employees. There is transparency between the work and mutual
understanding between all the employees.

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.

Product Leadership

We are focusing on six development areas to become the product leader.

1. New Machine

2. Reliability

3. Conventional Installation

4. Environment Friendly Product

5. Low Noise & Vibration

6. Energy Savin

Quality Innovation

The policy of quality assurance is to provide customers with utmost

satisfaction by supplying zero defects.

20
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 LGs unique application to ethics. LG will

succeed through fair management practices 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

21
 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

DISTRIBUTION AND MARKETING

The company has number of dealers and warehouses. They have LG

exclusive shops. For the marketing of the products a number of activities are
followed
1. Exhibitions are conducted from time to time.
2. Society and college activities are conducted.

22
 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 at several time in
the year
7. LG divide dealer in gold silver etc. category to know the performance
of the dealers.
8. They have their sales persons at various sub dealer store 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. Provide capon and scratch card for festive season.

Innovative marketing strategy

Launch new technologies in consumer electronic and home appliances.

LG was the first brand to enter in cricket in big way a way, by sponsoring
the 1999 world cup followed it up in 2003 as well.

LG brought in four captains of the Indian cricket team to endorse its

products. LG invested more then US$ 8 million on advertising and
marketing in this sport.

LG has differentiated its product using technology and health benefits.

CTV has Golden eye technology Air conditioner has Health air
system and microwave ovens have the Health wave system.

Local and efficient manufacturing to reduce the cost

To overcome high import duties LG manufactures TV refrigerator in
India at manufacturing facility at Noida and . LGEI had already
commissioned contract manufacturing at Mohali Kolkata and Bhopal for
CTVs. This has helped LGEI to reduce cost. LGEI implementing the
Digital manufacturing system (DMS) as the cost cutting innovation
this system is follow-up to the six sigma exercise LGEI had initiate
earlier.

Regional channel and wide distribution network

1. LG has adopted the regional distribution channel in India. All the
distributers work directly with the company. This has resulted in
quicker rotation of the stock and better penetration into B, C, D, class
market.
2. LG also follows the stock rotation policy rather then dumping stock on
channel partners.
23
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

THE LOGISTICS

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.
5Rs of Logistic followed by LG:
Right Time
Right Place
Right Condition
Right Cost
Right Handling

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

Warehouse-
Mother Warehouse
Branch Warehouse
Spare part warehouse
The mother warehouse is that where the products from the factory are kept
and from that warehouse, the products 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 industrial
areas of cities and towns. They come equipped with loading docks to load

24
and unload trucks; or sometimes are loaded directly from railways, airports,
or seaports. They also often have cranes and forklifts for moving goods,
which are usually placed on ISO standard pallets loaded into pallet racks.

In warehouse, the products are pinup with 3-color paper to 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 in market,
3. Yellow Card After the product labeled with green, allow this
to move in market

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.

CRITICAL ANALYSIS

I have made questionnaire

No. of questions in questionnaires for customer: 07
No. of question related to LG product: 03
No. of people met during the research: 200

25
No. of respondents during the research: 50

Sample unit Professionals, Business man,

Employees, House wife, Working women, Students

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.

Q.2 While purchasing consumer durable which parameter influences you?

Price
Product feature
Brand
Service
Durability

26
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. A majority of customers prefer to buy from showrooms. Very less
proposition of customers buys from Exhibitions.
2. 47% customers are prefer to by from the showrooms because the
showrooms are more convenient to customers they also think that
these shops give more discounts.

27
 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.

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

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.

Q.5.Which consumer durable you have and of which brand?

CTV
LCD
PLASMA
REF
WM
MW

28
 AC

Inference
In CTV section maximum customers have Onida, in LCD Sony is the leader, In
plasma BPL is the leader, In Ref LG is 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

29
Inference
1. Customers prefer to change consumer durables within 5-10 years. In
India people do not change consumer durable frequently.
2. 23% 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.

Q.7.Do you prefer any financing scheme to purchase consumer durables?

Yes
No

Inference
Majority of customers do not prefer any financial scheme

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,
Refrigerators, Air Conditioners 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

30
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 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, LGs 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 companys response to customer complaint within two
hours. The fixing time for complaints varies from one hour to a maximum of
24 hours.

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.

DEALER SURVEY FINDINGS

By calculating the display share we found that in most of store LG has

50% display share almost all categories.

31
 By the actual monthly sale of particular store we came to know the
capacity of the store and how much product can they sale.
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 dealer who are
capableof being the dealer of LG.
We also came to know while visiting the shops that there was big
problem of after sale service.
Many dealers were facing the problem of after sale service because
there is no follow up calls from LG.
Demo calls also not done properly.
The top competitor of LG product in is SAMSUNG.
In area the performance of LG is in better position but the
competitor also hold closer margin.
There is high growth of sale in market due to booming in new
technology and better service.
Word of mouth plays a vital role in awareness among customer. This is
one factor, which can play a good role in promotion of products as well
as demonstration given by the shopkeeper also plays a vital role for
customer.

RECOMMENDATIONS AND SUGGESTIONS

LG should improve its after sale service because its hits badly LGs
market share in region.

32
 More detailed customaries service is to be provided.

The training to in shop demonstration should be given at frequent time

interval and feed back should be considered positively.
The company should look into the matter of person hiring for in shop
demonstration. A big LG showroom should have at least 2 such kind of
person.
LG should try new dealer who have the potential. So they can target
more market.
As there is a bottle neck competition between Samsung and LG, it is
necessary to take measure steps to overcome the area of downfall in
LG with respect to Samsung.
The marketing managers should make better relations with dealers
and reputation of the company.
Customer considers quality as their first preference, so the company
should give more stress on this.
The switching of customer from LG product to other brand is due to
the bed after sell service in shop.
The product is well aware and it is on top of mind of customer. So
company should always improve services and update their technology.

CUSTOMER SURVEY FINDINGS

Secondary supports play an important role in the customers mind

and create awareness among the customers. The secondary support
includes Demonstration, Exhibition & Even Sponsors.

33
 From the survey it was found out that the majority of customers
dont buy consumer durables from exhibitions. They just visit the
exhibitions to see the co. latest model.
They want to buy from the showrooms or from co. showrooms. For
them service is important .Beside convenience and other factors
service is key factor.
Also majority of customers do not want any financing scheme for
purchasing the durables.
There was heavy rush on weekends so large numbers of ISDs
were appointed that day. Also the live demo calls helps in selling.
Exchange offers also generate sale.
Customers are also now very choosy in buying the product and it
is important for the company to make loyal customer of their brand.
In survey we found that LG has captured maximum market share
in every category. LG dominates CTV, LCD, and Refrigerator, and
Washing machine, category.
LG and Samsung have bottle neck competition in TV and REF.
category.
The product is well aware and it is on top of mind of customer.
Customers are also now very choosy in buying the product and it
is important for the company to make loyal customer of their brand.

RECOMMENDATIONS AND SUGGESTIONS

Exhibitions do not help to generate so much sells but they should be

conducted regularly. This helps in generating awareness regarding the
product in customers which ultimately helps in sales.

34
 Also it is helps in advertising for the new products. Like in this
exhibition new LCD SCARLET was advertised. Company should always
focus on service.
Display share should be increased where there is less than 50% as LG
also believes that JO DIKHTA HAI WO BIKTA HAI.
Company should try to improve service. No doubt the company
products have technically edge over competitors but in long run it may
hamper the companys profit.
Company should concentrate more on its major drivers LCD, IT, and
GSM. Branding and promotions should be done effectively as it creates
a long lasting image in the mind of customers.
Company should also cater to the needs of sub dealers as some of the
sub dealers have potential of high sales.

BIBLIOGRAPHY

Business world
Business today
LG magazine
Economics times News paper
Times of India

35
WEB SOURCES

www.lgindia.com
www.google.com
www.wikipedia.com

CONSUMER SURVEY QUESTIONNAIRE

Q1. Have you purchased any consumer durable during Exhibitions?

Yes
No
Q.2While purchasing consumer durable which parameter influences you?
Price
Product feature
Brand
Service
Durability
Q3. From where you prefer buying consumer durables
Exhibitions
Co.shoppee

36
 Showroom
Q.4.You prefer to buy from the same as you have mentioned in Q.3
because of following reasons
Attractive Price
Service
Demonstrations
Offers
Convenience
Q.5.Which consumer durable you have and of which brand?
CTV -------------------
LCD -------------------
PLASMA -------------------
REF -------------------
WM -------------------
MW -------------------
AC -------------------
Q.6. How frequently you change your consumer durables?
1-3 years
3-5 years
5-10 years
More than 10 years
Q.7.Do you prefer any financing scheme to purchase consumer durables?
Yes
No

37