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Television (TV) is a widely used telecommunication medium for transmitting and receiving moving images, either monochromatic ("black and white") or color, usually accompanied by sound. Commercially available since the late 1930s, the television set has become a common communications receiver in homes, businesses and institutions, particularly as a source of entertainment, tutorials and news. Since the 1970s the availability of video cassettes, laserdiscs, DVDs and now Blue-ray Discs, have resulted in the television set frequently being used for viewing recorded as well as broadcast material. Television has recorded a phenomenal growth in India. It has become an accepted part of our daily life in very short span. Television is affecting customers, domestic routines, educational techniques and entertainment pattern. In the recent past television was luxury item meant for rich people only but now-a-days, it is considered as necessity by most of the people. However the role of audio visual media of communication for a country like India with large population, high illiteracy and vast area assumes critical importance and television can be regarded as harbinger of social, economic, and cultural development. Television combines in it all the benefit of the radio, newspaper and cinema and therefore it is the most popular media for education, information and entertainment.

The results revealed that the purchasing decision of the consumer depends on Quality, Goodwill Popularity, Affordability, Features, and Support Services of the product, this phenomenon observed in all income groups. The results also revealed that the brand preference is independent of age, income and education. Our intuition directed that in the countries like India the economic liberalization has influenced the consumer durable industry especially Color T.V. industry. The foreign player entered the Indian market since the Indian economy increasingly interdependent almost over the last one and half decades. Consumers in India with open markets on an average are enjoying lower prices, improved consumption, improved savings and rising standards of living The growing convergence of information, entertainment and communication is bringing the new momentum to the consumer electronics in India. LCD sales are expected to surpass CRT TV sales in 2012, CRT TV will continue to find a good market in the area where TV penetration is still low.

Coming to TV industry, it is true that Indian Television Industry is highly competitive in nature. Various brands are coming up and various brands are closing down. Entry leads to more competition, while this competition leads to survival of fittest strategies among the companies. The graph below depicts the stated claim. Television industry is monopolistic competitive in nature is clear from various directions. The features of this type of market structure, clearly applies to the television industry. There are large number of buyers and sellers; product differentiations; and imperfect product knowledge, are the keys to this industry.8 The advertisement planning and timing, the type of offers made and their timing, etc, all reveal that this market is monopolistically competitive in nature.

The history of the Indian television industry dates back to 1982, the year when India hosted the Asian Games. There was a huge demand for color televisions all through the 80s. During this period, the prices of color televisions skyrocketed due to the high import duties imposed on color picture tubes (CPT).
Television in India has been in existence for four decades. For the first 17 years, it spread haltingly and transmission was mainly in black & white. The thinkers and policy makers of the country, which had just been liberated from centuries of colonial rule, frowned upon television, looking on at it as a luxury, which Indians could do without. Television has come to the forefront only in the past 21 years and more so in the past 13 years. Year 1982 was a significant year in the history of Indian Television. The government allowed thousands of color TV sets to be imported into the country to coincide with the broadcast of Asian Games hosted in New Delhi. Over the years, this industry experienced a great boom and today, India is one of the largest television markets in terms of viewership. Not only this, but overall TV industry is the most booming sector among consumer electronics in India. The diagram below depicts the same.

Indian TV industry is technology driven, so companies need to constantly improvise, innovate and customize their products. Colored cabinets, headphones, 3-D 360 degree sound technology and e-mail in TV, plasma TV and golden eye technology are just a few examples. The last few years have seen a quantitative and qualitative change in TV technology and software. With the advent of several local and foreign satellite channels, demand for CTVs has seen a rise. In fact, the television manufacturing industry has come a long way from the big black and white TV sets to the modern day ultra-thin Plasma and LCD TV sets. With the ever changing technology the Television industry has adapted itself suitably to cater to the changing tastes of the consumer.

Globalization and its impact on Television Industry in India In countries like India, the economic liberalization has influenced the consumer durable industry especially the television industry. This industry has seen a gamut of changes in the past one decade making its market highly competitive and consumer driven. Changing and growing demands of the consumers made the industry competitive. This globalization is important for various reasons as discussed below: New areas for growth. Globalization provides the Indian television industry an access to new markets beyond its typical Southeast Asian demographic constituents. Serving new markets can not only provide new revenue sources but also lead to product innovations in the industry. Minimal marginal cost. Globalization requires significant initial investment and learning. But once global, the firm can easily release the programs produced for one market in other markets. The success rate of a program across various markets may differ; nonetheless the marginal cost is extremely low post-penetration thereby providing much higher overall returns. Diversify and stabilize. Political, economic, or viewer preference upheavals in a market can be disastrous to a firm, if the firm is completely dependent on that market. Globalization can provide the much-needed diversification, stability, and insurance against unexpected, drastic changes. A global firm can easily survive and organically adapt to the changes in market conditions. Better utilization of assets. Over the years, the Indian television industry has developed both tangible and intangible assets in terms of production facilities, program libraries, and experienced talent. Recycling and reusing these assets in global markets can increase the return on these assets and make a better economic sense. It also provides global exposure to the Indian talent leading to the development of professional approach to the activities of the industry. Analyzing these benefits, after globalization and liberalization, many foreign players have entered the Indian market. Together with this, consumers in India with open markets on an average are enjoying lower prices, improved consumption, and improved savings and rising standards of living. Before liberalization in India, the consumer was at the mercy of the producer and savings management was prevailing in the sense that individuals saved and then consumed. This might be because of no financing facilities, no credit card facilities and moreover demand side economic were prevailing. After liberalization the total scenario has changed- consumers in India moved from savings management to expenditure management. This is because of the availability of goods and services at lower price, availability of credit cards, availability of finance at low interest and in some cases zero interest and moreover the death of power of monopoly in many sectors because of the entry of the foreign players. Producers have become price takers rather than price setters. The tastes and preferences, life style and consumption patterns of the consumers have also changed. Like other third world countries, people in India have started spending much more money and there has been a distinct shift from joint family system to that of nuclear families.

Post- liberalisation However, the period after the liberalisation of the Indian economy marked a new beginning for the color television industry. The liberalisation reforms have had a lasting impact on the television industry that is very much visible today. With opening up of the economy, a number of multinational companies came in the market and started giving stiff competition to the domestic producers who had grown complacent in an oligopolistic market. Initially, the MNCs did face certain problems in building a strong base in India, against the domestic competition. But soon, with the help of their advanced technology, their constant R&D and their strong fiscal strength, they managed to set and develop a strong base in the Indian market. Indian companies :- Videocon, BPL, Onida ,etc MNCs :- LG, AIWA, Akai, Panasonic, Samsung, Sony, etc.


Factors Affecting the Choice of a right TV Choosing the right CTV is difficult enough when there are half a dozen brands and all of these claims to give excellent picture quality. Nowadays the problem is to choose the kind of TV we want to watch it with. There is just a huge variety available in the market todaynot just brands, but also product categories. Choosing the right CTV involves many different factors. These include, of course, the budget, picture quality, sound quality, remote control, facility for DVD connection etc. Here are some things to consider as we make our choice. Price: The choice of TV mostly depends on the price of the TV. The more we pay; the better would be the facilities in the TV. Picture Quality: To have a good view from any angle, the picture quality of the TV also matters. Direct-View televisions have amazing picture quality, while still being less expensive than flat panel types. Sound Quality: While watching television we often forget about the quality of the sound, because we are concentrating on visual experience. With more and more consumers integrating televisions into their stereo and home theater systems, the ability for a TV to provide more in the audio area is becoming more important. Remote Control Facility: When shopping for a television, we have to make sure that the remote control is easy to use. If we need to control several items with the same remote, it is compatible with at least some of the other components we have at home. Most TVs come with remotes that may be partial function or full function types. Partial function types are equipped with only simple features such as; channel up/down, volume up/down, auto search, auto tuning, sound mute, etc. Full function remotes, in addition to providing essential functions provide advanced functions such as, picture quality control, component control etc not just the TV. Add on Facilities: The TV, nowadays, is getting more attractive by some add-ons such as DVD players. The price of DVD players has dropped dramatically in the last couple of years. These entry-level players rival some of the best DVD players from only a few years ago in terms of both picture and sound quality. Emotional Consideration: Often we are influenced by emotional considerations such as friends and neighbors. At the same time we cannot ignore the importance of the recognised dealers in this regard. There are several units in the market that can be analyzed. Our main thrust in this study is the consumer and their perception towards choosing Television. Keeping all these aspects in view, we have analyzed the attitude of the consumers on the basis of the attributes, preferable brand, sound quality, durability, recommendations, price, advertisement etc.

PRODUCT LIFE CYCLE Introduction (1982-84) The first ever experimental color TV broadcast was on December 1979. Indian Trade Fair The first color TV Broadcast on a national channel started in August 15, 1982. Independence Day Broadcast In 1982, 22 firms were given permission to start manufacture from imported kits One time exception for Asian Games In January 1984, the first indigenously manufactured Color Television was released. Growth & Maturity

Growth (1984-86) The industry was steadily growing for Colored TV Was dominated by the B/W TVs A lot of small manufactures were there Assembly kits

Import duty at 240% Maturity (1986-89) A lot of competition Technology upgrades for the components Policy was such that large players had become stronger. Decline & Re-introduction Decline (1989 -91) Penetration in rural areas was low Urban segment dominated the market

Components demand-supply gap was increasing Re-introduction (1991 to 1994) Market became open to MNCs Samsung, LG, Panasonic etc. Added a lot of features to the products Prices became lower Growth & Maturity Growth (1995-1999) Demand increased manifold Aggressive marketing Increased competition between MNCs and local players Prices were decreasing Flat Screen TVs were introduced Maturity (2000- 2004) Markets for FCTV consolidated and new innovations were being done. Market was saturating Households were now upgrading to bigger sizes and better features

Brand Loyalty was low as now benefit for being loyal Comparative Pricing Decline & Reintroduction

Decline (2005 Present) The CTV sales are decreasing Introduction (2004-2006) LCD TV and Plasma TV were introduced Initially was highly priced Available in large sizes only

Growth (2006 Present) LCD TV o The sales have been increasing drastically o Prices are coming down Plasma TV The sales have increased by a small margin Prices are still high for mass consumer appeal

HD TV have been introduced Many DTH providers are now offering the HD TV features The major players are creating awareness about the product


Rise in disposable income: The demand for consumer electronics has been rising with the increase in disposable income coupled with more and more consumers falling under the double income families. The growing Indian middle class is an attraction for companies who are out there to woo them. Availability of newer variants of a product: Consumers are spoilt for choice when it comes to choosing products. Newer variants of a product will help a company in getting the attention of consumers who look for innovation in products. Product pricing: The consumer durables industry is highly price sensitive, making price the determining factor in increasing volumes, at least for lower range consumers. For middle and upper range consumers, it is the brand name, technology and product features that are important.

Availability of financing schemes: Availability of credit and the structure of the loan determine the affordability of the product. Sale of a particular product is determined by the cost of credit as much as the flexibility of the scheme. Innovative advertising and brand promotion: Sales promotion measures such as discounts, free gifts and exchange offers help a company in distinguishing itself from others. 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. Emergence of nuclear families Declining prices It is linked with GDP New technology and life style trends creating replacement demand.


1. Threat from new entrants

Threat of entry is determined by the entry barriers, which act to prevent new firms from entering the industry. A lower entry barrier makes it difficult for the existing producers to remain profitable for long. When profits increase, additional firms will enter the market to take advantage of the high profit levels and over time drive down profits of all firms in the industry. When profits decrease, some firms will exit the market, thus restoring the market equilibrium. Barriers to entry arise from several sources:
Access to Distribution Channels

A strong distribution network is absolutely essential to compete in this industry. Not only does it guarantee a country wide reach for a companys products but is also necessary for providing good after sales service. LG Electronics sells in 1800 towns and cities with a population of 1,00,000 and above. Samsung also has a widespread service network, which includes 123 exclusive service centres and 200 distributors in any town with more than 1 lakh population. All BPL dealers are linked via VSAT nodes, ensuring online availability of information on inventory status and sales movement. Videocon has implemented ERP system, which helps in integrating the manufacturing, marketing, procurement and distribution services with the corporate office. Distribution hence is difficult and costly as established firms dominate distribution. Large incentives are required to gain entry into the distribution channels and further gain recommendation to retailers from the dealers.

Brand Salience With little product differentiation and parity products, it is imperative that distinct images are created in the minds of consumers through positioning and brand building. MNCs have been able to compress the cost of brand building by amortising the cost of sponsoring international events across a larger footprint straddling multiple countries. LG sponsored ICC World Cup 2003 along with Pepsi and Hero Honda and got tremendous mileage in terms of increased sales and brand building. Similarly Samsung sponsored the Indo-Pak series in 2004. Domestic players are constrained in their brand building due to not being global in their operations.

Capital Investment and Economies of Scale Television industry is capital intensive and players have made huge investments in putting up state of the art manufacturing facilities. Sony India had a production capacity of 300,000 CTV sets with capacity utilisation of 66%. But since the demand for its products in India was much less than the plant capacity, Sony finally closed down its plant. Samsung is investing $4 mn to expand its CTV manufacturing capacity at Noida to 800,000 units per year. The existing capacity of the plant is around 600,000 units. Other players like Videocon, Mirc Electronics, LG have also set up manufacturing facilities in India. The market players need sales volume to achieve economies of scale, which is difficult because of large number of competitors. Apart from investments in manufacturing the industry requires huge working capital to manage inventories. Supply chain management and inventory management thus becoming crucial to determining profitability. With regard to sourcing funds, MNCs are better placed than their Indian

counterparts as they manage to get funds from their parent companies at low rates of interest. Huge capital requirement thus can act as barrier to entry.

2. Degree of Rivalry Rivalry denotes the intensity of competition within the industry. In Television industry , degree of rivalry is high. Leading to higher ad spends and lesser pricing power, thereby lowering margins. LG is the market leader with 26% share. Its average realization is lower than the industry average; it is majorly due to competitive pricing, and reducing margins. It is not so strong globally but India is amongst the biggest global markets for LG, so to hold ground here, it has set its foot and is going for aggressive market capturing strategies. Samsung on the other hand, is a global leader but is not very strong in India. It is, however, not going for such strategies and is content with the share of the market it has now. Samsung aims at increasing its market shatre gradually. But due to the competitive pricing having a negative impact on margins, its gains have decreased. Mirc electronics portrays itself as a value for money brand, and manages to be in the race. One major player in the past, BPL has suffered severe competition, and has lost its share has reduced drastically. Videocon is also one such company which has faced decline in profits, but is maintaining its presence Although all the players have reduced their prices drastically and comparatively the sales volumes have seen a boost. This increase in sales makes up for the declining price. All the players are now concentrating on penetrating to the lower levels rather then profit maximization.

3. Threat of Substitutes - HIGH The television industry is characterized by continuous technology advances that may result in substitution within the product category. In Porters model, substitute products refer to products in other industries. Internet though emerging as an infotainment medium is very low in penetration. Moreover the industry has responded to the future threat by introducing a TV that can provide functions of the Internet along with regular features, e.g., BPL digital that includes Internet and cellular facilities. 4. Bargaining Power of Buyers - HIGH With the intensification of competition in the Indian CTV industry, the bargaining power of the buyer has increased. As compared with the early-1990s, a consumer can bargain more effectively on price and service conditions.

Its his preferences, demands, and wishes that the companies compete to fulfil. Conversely, the buyer also goes for a product, when he sees a correlation between what he wants, and what is being offered. He has separate needs and reasons to buy a TV setThe decision of purchase is however guided by the class and the strata of the buyer. Multitude of brands across price points wide variety of choice for customers 5. Bargaining Power of Suppliers HIGH Most of the raw materials are available easily in India. Some high-end raw materials such as larger-size picture tubes for flat TVs are imported.

The television market can be broadly segmented into following categories:A. THE UPGRADERS This segment of buyers has upgraded from Black and White TV to Colour television. This segment is by far the largest in the Indian TV market and constitutes approximately 62% of the market. The principal reason behind the up gradation is the C&S (cable and satellite) boom that has hit India and the increasing coverage of major sports events like cricket tournaments and Olympics. The consumer in this segment usually goes for active information search. This segment normally builds its product knowledge from advertising and other product communication that it gets exposed to & the dealer. This segment also normally shows a distinct preference for multi brand outlets and the primary reason for this is to compare brands and process relative and unbiased information. B. FIRST TIME BUYERS This constitutes people who are purchasing a colour television for the first time. They comprise 18 per cent of the market. They primarily belong to nuclear families. The fixed or planned budget and the compatibility with the small establishment are two major factors that drive the nature and direction of information search in this segment. In this situation, the wide screen models are mostly out of the consideration set of the purchasers in this segment. C. MULTIPLE SET PURCHASERS This segment represents those people that are purchasing more than one set and are looking for specific need gaps to fill. They comprise the lowest share of the market in terms of volume with just 8% being commanded. The family demographics of this segment are mostly joint families and full nests. The principal reason behind most of the purchases is an increasing family size and desire to own a personal TV set. The credibility of the dealer is not high at all in this segment and the company sources of information with a high technical content are mostly preferred. Price is not the most important criterion for purchase decision-making.

D. REPLACEMENT PURCHASERS This segment usually trades in its old CTV for the new models. It forms around 12% of the market and holds immense potential in the future. The expansion of innovative technology and cable compatibility has thrown the old sets, with their eight programmable channels, completely out of favour.

Buyer Concentration
The industry is akin to consumer durables whose end users are fragmented. Hence buyers do not have any specific influence on producers.

Buyer Switching Cost The cost incurred by consumer in switching from one television brand to another is practically zero. Brand loyalty is low. Hence the companies cannot rest on their laurels and have to be on their tenterhooks to retain the customers. Price Sensitivity Market is highly price conscious and promotion driven. With the onslaught of Akais major price cuts and promotional schemes, this market has now become a promotion driven one. To successfully compete in this industry, even premium players like Sony, LG have had to come up with schemes. LG and Philips have been the most aggressive amongst industry leaders as far as pricing is concerned and hence their realization shave been lower than industry average. Industry leaders like LG focus on low medium priced CTV, while Samsung has moved gradually towards higher priced CTVs (Exhibit 9). The domestic high-end CTV prices will follow the global price trend of declining prices. However, the prices of domestic products would be higher than those of global products due to negligible demand in the domestic market and hence most likely to be met through imports.

Competitor Strategies
Major Players in Indian Market Indian Television Industry is facing intense competition from foreign players, like the Korean companies LG and Samsung, US companies like Sony, and Chinese companies like Haier. In this stiff competition, many Indian brands are out of the market, like Beltak, Oscar, Texla, Crown, Salora, etc. Still, three Indian companies manage to stand apart. These are Videocon, BPL and Onida. A small introduction to these and some more companies is given below: 50 VIDEOCON Videocon has always been a price player and has an image of a low price brand. This entails providing more features at a given price vis--vis competitors. It has taken over multinational brands to cater to unserved segments, like Sansui- to flank the flagship brand Videocon in the low to mid priced segment, essentially to fight against brands like BPL, Philips, and Onida and

taken over Akai- tail end brand for brands like Aiwa. Videocon is one of the largest manufacturers of television and its components in India and thus has advantages of economies of scale and low cost due to indigenization. It has the widest distribution network in India with more than 5000 dealers in the major cities. It also has a strong base in the semi-urban and rural markets. Due to its multi-brand strategy, it has, at present, multiple brands at the same price point. Some of them are Kelvinator, Kenwood, Electrolux, Kenstar, etc. This has led to a state of diffused positioning for its brands. It has also led to a cannibalization of sales among these brands. The flagship brand Videocon has lost market share due to the presence of Sansui in the same segment. Because of reduction in import duties on Color Picture Tubes (CPT) the cost advantage of Videocon is also on the decline. Hence it is facing rough weather and also trying to boost exports. ONIDA (MIRC ELECTRONICS) Its popular devil ad although had engendered a strong emotional pull towards the brand, technologically it represented no advancement. The company plugged the gap by touting its digital technology. Like Videocon, it has also been able to hold its market share. The world-class quality of Onida has enabled the company to make a breakthrough on the export front. Onida is a leading brand in Gulf market and also exports its models to Africa, Bangladesh, Sri Lanka and Nepal. It has technical tie-up with the Japan Victor Company, better known as JVC. So focused Onida is positioning itself on the premium, high-tech plank that it is even planning to push its own envelope on obsolescence, much like Intel has been doing in its own industry. The strategy is aimed at further broad basing the product offering of the company, which has largely dominated the top-end of the television market, across multiple market segments. SAMSUNG Initially the strategy of Samsung in India was to create premium image by emphasizing global brand. After facing stiff competition from another Korean major- LG, Samsung also started playing price game. In 2004 it reverted back to its premium positioning, although it resulted in some loss of market share. In line with the Global Digital Initiative of the Parent Company, Samsung India is seeking to acquire digital leadership in India by introducing its digital ready televisions like the 40" LCD Projection TV, 43" Projection TV and the Plano series of Flat Color televisions. Samsung is ruling the waves in terms of people's choice, the familiarity and the selection. According to the study done by Corporate Catalyst of India, Samsung holds almost 39 per cent in the choice meter used by the authors, as the most of the respondents wish to have a Samsung Television. LG ELECTRONICS LG Electronics, a South Korean Electronics Company, rightly understood the consumer motivations to create magnetic products, price them strategically, position them sharply and keep making the magnetism more potent. Having understood the finer differences in consumer motivations, it opted for sharp arrow reasons-to-buy differentiation over the blanket-all approach taken by most of the other players. It is an aggressive marketer. It focuses on low and medium price products. Therefore, it is called the LUCKY GOLD STAR Company. It is the Pinnacle in Plasma TV. SONY Sony Corporation, Japanese electronics manufacturer, designs, manufactures, and sells electronic equipment. It is a leader in the development of consumer electronics goods, such as videocassette recorders, cellular and cordless telephones, compact disc equipment, and television systems. Followed by Samsung, Sony is the next most preferable brand in India, the choice meter points Sony to an even 38 per cent, though Sony has a market share of 3 per cent, it's a Dream Television. The above mentioned Mega Five companies provide the Best picture quality with sharper flat

screens, also the LCD Television's of these companies are the Best, & finally they are the most loyal companies. PHILIPS Philips Electronics, international conglomerate based in Netherlands that develops manufactures, and markets a whole range of electronic and lightning products and systems. One of the worlds largest electronics producers, Phillips sells a vast array of consumer products, including televisions, audio and video recorders, etc. BPL British Physical Laboratories Group (BPL) is an Indian electronics company that deals with consumer appliances (such as television, microwaves, refrigerators and washing machines), home entertainment products and health care devices. The average revenue SHARP Sharp Corporation is a major manufacturer of electronic products, office-automation products, and home appliances. Sharp is the world's leading producer of liquid-crystal displays (LCD's), which many companies use to make calculators, digital watches, laptop computer screens, handheld video cameras, and other products. Sharp is based in Osaka, Japan. HAIER To address the need of Indian consumers, Haier was in the process of setting up a Greenfield project near New Delhi to manufacture television sets. By January 2005, it was assembling 20,000 television sets a month under manufacturing contracts with Indian companies. The TV market in India has proved to be highly unpredictable for Haier. GODREJ Godrej entered the TV market with a new technology of EON range of LCDs with iPIX technology and CRTs television. According to the company, One of the biggest plus points that Godrej has with iPIX technology is that it is perhaps the only demonstrable technology which shows visual improvement in the video images.

Onida / Mirc Electronics

Onida was started in 1981 in Mumbai. In 1982, Onida started assembling television sets at their factory in Andheri, Mumbai. Superior products and the combination of a distinctive voice, a cutting edge advertising strategy and purposeful marketing ensured that Onida became a household name. It is well reputed for intelligent and pioneering application of technologies. It enjoys a strong equity among consumers. It constantly introduces products of substance which offer best technology and finest design. Its shares are listed on the NSE and the MSE. It has also seen a transition from a family owned business to a professionally managed company.

Onida has been in the market for quite some time. It made an emotional connect with the consumers, and its DEVIL advertising strategy also helped it in boosting up sales. It is currently aiming at targeting the high end segment of the market, it continuously revamps its products range By doing this it is actually boosting up its exports also.

Objectives : Regain past glory Attaining a Global Scale Rebuilding its Brand Image Strategy Bring back The Devil Develop markets abroad aggressively Increase reach in Semi-Urban and Rural areas Product innovation & differentiation Strengths Good dealer relationship Strong brand awareness in esp. in non- urban areas. Median Pricing Best among second rung players Weaknesses Poor financial strength Dependency on JVC for R&D Weak distribution network in North & East Over- dependency on suppliers

Opportunity 1. Growing Middle class 2. Replacement market (CRT to Flat screen, LCD)

3. Growing semiurban and rural market 4. Easier financial assistance from banks 5. Increase in consumerism leading to increase in entertainment needs Threats 1. Increased Competition from MNCs 2. High bargaining power of Speciality stores 3. Increase in salary of Technicians in the industry 4. Obsolescence of technology, esp. in LCD 5. Large manufacturers might benefit from their scale, resulting in owering of prices

Before 2005, LGs strategy was to offer affordable products, while Samsung focused on premium offerings

2005, the two have expanded the scope of their target markets and offer both functional and high-end products

market development and product innovation have been the key success factors for the companies

Videocon Videocon enjoys the most widespread network of distribution channels and dealers. It positions itself as a low priced brand and has good penetration in sub rural population. Due to the wide spread network and demand, it enjoys economies of scale and thus costs are low. It has launched several models in the low ranged prices and has a diffused perception across the board. It faces the major competition with Sansui, as the export duties have been reduced, and both these players target the low price segment.

Third largest consumer durables company in India

Holds Leads

about one-fourth market share in the consumer durables market

the market in colour TV, refrigerator, washing machine, and microwave oven segments

One of the largest colour picture tube manufacturers globally

An Indian multinational company, which involved in the key sectors of Consumer Durables, Display & Color Picture Tube, CRT Glass, Oil & Gas is named as Videocon Industries Limited. The Company was incorporated in 4th September of the year 1986 as Adhigam Trading Private Limited for the business of trading in paper tubes. For manufacture the products under the Videocon, the company have 8 plants situated in Tq Paithan, Bhalgaon, Bangalore, Hosur, Kolkata, Maheshwaram Mand and Bharuch. To strengthen and maintain & its leadership status, the Videocon group has clearly charted out its course for the future. Aggressive development is in full swing at the R & D Centres to bring out stateoftheart technologies including True Flat, Slim, Extra Slim, Plasma & LCDs, at the earliest. Videocon Industries is planning for manufacturing LCD panels and also LCD and flat televisions with inbuilt DTH set top boxes in its Taratola factory. However, the company plans to convert its Kolkatta manufacturing facility at Taratola into a hub for its D2H satellite TV in a long run. With a capex of Rs 120 crore, the company plans to roll out with 20,000 to 30,000 television sets with inbuilt set top box from this factory. o Videocon Industries signed a fiveyear agreement with Philips Electronics NV to make and sell the centuryold Philips brand televisions in India. o Videocon is a new entrant to Direct to Home services (DTH). It has partnered with Irdeto for a modular Scalable Conditional access system and they have partnered with Tech Mahindra in IT space and IBM for technology support.

The major advantages that Videocon has in India are as follows: Cost cutting Videocon is better positioned to shift the activities to low-cost locations and also it can integrate the operations with the glass panel facility in India. With the CPT manufacturing facilities acquired from Thomson S.A., Videocon wants to leverage its position in the existing parts of the business and this acquisition has given it a strong negotiation position and can reduce impact of glass pricing volatility. Videocon has the capacity to reduce the costs by upgrading and improving the existing production lines. Vertical Integration The acquisition, mentioned above, has helped Videocon in vertically integrating its existing glass-shell business where it has been enjoying substantially high margins. Videocons glass division has the largest glass shell plant in a single location. This gives the company an unrivalled advantage in terms of economies of scale and a leadership position in the glass shell industry. Rationalization of Product Profile Videocon has modified its product profile to cater to the

changing market needs like moving away from very large size picture tubes to smaller ones. Apart from the overall strategy, Videocon also has a plan on the technological front. It wanted to improve the setup for the production line and line speed post-merger. Its focus was to increase sales while reducing the costs and thereby improving the productivity of the existing line. The company also wanted to foray in a big way into LCD panels back-end assembly. On the sales front the company wanted to leverage on the existing clients of Thomson and build relation as a preferred supplier to maximize sales. Also, Videocon could benefit from OEM CTV business with the help of Videocons CTV division, invest for new models and introduction of new technologies. An official of Videocon said on the deal The word is out in the world that India and Indian companies are not just a good bet by themselves, but also a hedge against China. 20 Despite facing a highly competitive market Videocon has managed to turn a plant around while the other is on its way. The vigorous marketing efforts being made by the domestic majors will help the industry. The Internet is now being used by the market functionaries will lead to intelligence sales of the products in the future. It will help to sustain the demand boom witnessed recently in this sector. The ability of imports to compete is set to rise. However, the effective duty protection is still quite high at about 35-40 per cent. So, a flood of imports is unlikely and would be rather need based. Reduction in import duties may significantly lower prices of products. Otherwise, local manufacturing will continue to stay competitive. At the same time, there will be some positive benefits in the form of reduction in input costs.

Established in 1997, after clearance from the Foreign Investment Promotion Board (FIPB), LG Electronics India Pvt Ltd., is a wholly owned subsidiary of LG Electronics, South Korea. It has been in India for a decade now and is a market leader in consumer durables and recognised as a leading technology innovator in the information technology. It has a manufacturing facility in Greater Noida, since 1998, which manufactures its broad range of products including colour televisions, washing machines and air conditioners. The manufacturing of LCD television sets and colored monitors is taken up at the Pune plant which has been set up in 2004. The plants are state of the art and match the international standards; they are the most eco-friendly as well. In the past ten years LG has been able to craft out a

premium brand positioning in the Indian market and is today the most preferred brand in the segment.

LG Electronics rightly understood the consumer motivations to create magnetic products, price them strategically, position them sharply and keep making the magnetism more potent. Having understood the finer differences in consumer motivations, it opted for sharp-arrow reasons-tobuy differentiation over the blanket-all approach taken by most of the other players. It is an aggressive marketer. It focuses on low and medium price products. Objective : To become a Health Partner for consumers Focus on technology leadership To enhance Brand Equity Strategy : Promote Golden-Eye technology Introduction of Internet- TV/Interactive TV Online Sales & Service consultancy through To create Niche markets for High-end technology products To associate LG brand with Entertainment & Sports industry Aggressive Promotional Campaigns Some analysts are of the opinion that the corner stone of LG's strategy was its heavy advertising. In 2002, it spent around 1.3 billion on advertising. An ad agency which handled the account of one of the LG's rivals, commented: "Communication creates a mind space among the consumers and LG has occupied that fairly well." Unlike many Indian brands which advertised seasonally i.e., (two-three months of the festival season-September, October and November), LG advertised all round the year. According to analysts, this resulted in high brand recall and successful positioning. By the end of 2002, LG had emerged as one of the top 3 consumer durables players in India. Its success was largely attributed to its marketing strategy. Though analysts agree that LG's performance has been remarkable in India, they point out that it still has to enter the audio segment, which is the largest of the home appliance segment...

Strengths : Financial strength Wide Distribution Network Wholly owned R &D cell Products having special focus on Consumer Health (eg- Golden Eye) Only player capable of Backward Integration Only player to conduct on-line business Only player to adopt Six-Sigma Weaknesses : Low penetration in Rural Areas Poor dealer relationship

Samsung India Electronics Private Limited (SIEL) is the Indian subsidiary of the US $55.2 billion Samsung Electronics Corporation (SEC) headquartered in Seoul, Korea. It is the hub of Samsungs South West Asia Regional Operations, and looks after its business in Nepal, Bangladesh, Maldives & Bhutan besides India.

Initially the strategy of Samsung in India was to create premium image by emphasising global brand. After facing stiff competition from another Korean major- LG, Samsung also started playing price game. In 2004 it reverted back to its premium positioning, although it resulted in some loss of market share. In line with the Global Digital Initiative of the Parent Company, Samsung India acquired digital leadership in India by introducing its digital ready televisions like the 40" LCD Projection TV, 43"Projection TV and the Plano series of Flat Colour televisions.

Objectives :

Acquire digital leadership Providing superior quality & state-of-the- art technology products Strategy Turnaround strategy Betting on premium products like projection & flat screen TVs Reinforce presence across all segments by launching 4-6 new models in every product category every year. Beef up distribution network by 10-15% Initially the strategy of Samsung in India was to create premium image by emphasizing global brand. After facing stiff competition from another Korean major- LG, Samsung also started playing price game. In 2008 it reverted back to its premium positioning, although it resulted in some loss of market share. Samsung India is seeking to acquire digital leadership in India by introducing its digital televisions.

Strengths Strong R&D facilities- investing on scientific talent ( 2 R&D centers in India at Noida & Banglore) Planned investments of $42 Million Online spares and service management Innovation (new digital technology) Customization (new product every year) New allocation of marketing resources (M-Net)

Weaknesses Poor after sales service Limited presence in rural areas


STRATEGY When it comes to innovative design concepts, there is no question that Sony is on the leading edge. The company is targeting an aggressive growth strategy for the current fiscal. The category that are expected to drive growth will be display products (LCD, projection and Plasma TVs). Electronics major Sony India today said it is aiming at a market share of 30 per cent in the countrys ballooning LCD TV market in 2009-10, even as the Japanese company has no plans to start manufacturing LCDs in the country. Sony India has already launched 14 new Bravia range of LCDs, which also includes slimmest LCD TV model measuring 9.9 mm and weighing 15 kg.

INDIA EMERGING AS A FORCE IN THE TELEVISION MARKET In India, where 70 percent of citizens earn less than $5,000 a year, buying a television is not an option for many consumers. Surprisingly, however, Indians have shown remarkable interest in buying televisions, even the more-expensive flat-panel sets, mostly because of increased awareness, rising availability and declining prices. India is emerging as a major force in the global television market in terms of domestic consumption as well as in production of sets, while there remain disparities in terms of the economic status of television buyers, set sales in India are experiencing strong growth. CRTs still dominate market While Flat-Panel-Display (FPD) televisions are gaining sales momentum in India, CRT televisions still have a leading position in the nation because the higher prices of Liquid Crystal Display Televisions (LCD-TVs) and plasma sets have discouraged their adoption in most parts of the country. Many consumers in India buying their first television sets are looking at 21-inch and smaller CRTs as starter sets. However, this carries over to the replacement market as well, where consumers are attracted to 29-inch flat-face CRT TVs as alternatives to LCD-TVs because of their lower prices. It is the urban areas, where consumers are looking for replacement sets or buying second televisions, where there is a likelihood of flat panels gaining some market share. Manufacturing on the rise Television set manufacturing continues to rise in India, with both domestic and overseas firms increasing their production bases in the country. This is due to a number of reasons, including: Low-cost skilled labour. Availability of a qualified workforce.

An untapped domestic market. Special economic zones that provide tax-free environments. Other tax and financial support breaks. Supply for glass and color picture tube

Factories in India are cropping up in less-developed regions because of tax breaks given by the government in order to improve the living conditions of citizens as well as to promote investments in television production in the country. India has an excellent component supply base in terms of manufacturing facilities for glass and colour picture tubes so it makes it a good fit for companies
Increasing competition and technology adoption has led to a situation where the basic function of most of the consumer durable goods has been largely commoditised. This has created a situation where identifying a unique differentiating factor and promoting it effectively has become imperative. The advertising and promotions spends in the industry have been growing steadily.

Government and Regulatory Interventions

The role of the government as the supervisor for business, creating the rules for competition is crucial. It creates boundaries within which the industry must operate. Following the liberalization policy of 1992, the Indian government completely delicensed the TV sector by November 1996. The government has been regularly reducing the import duty on television sets from the reform period. From 20% duty in 2004, it has been reduced to only 12.5% presently. However, reduction in the import of television set is unlikely to have a significant impact on the industry as most of the TV sets are produced domestically. However, the customers who purchase high end product, that are largely imported, are benefited by such cuts in import. Excise duty on CTV was brought down by half in 2001 from 16% to 8% and this excise rate continues till date. Moving beyond television sets, the import and excise duty on television components has been reduced as well. Cathode Ray monitor tubes that are an essential raw material of televisions have a custom duty of 12.5% in the last budget. The import duty on the same is 16%. The duties have been brought down from 16% and 20% in earlier years. This cut in import duty is likely to not have an impact on the domestic players as they do not rely significantly on imports. However, the cut will have a beneficial impact on high-end product consumers and MNCs who are more dependent on import of raw materials for CTV. But the domestic players can breathe a sigh of relief. Recently, the commerce ministry has raised concern over the dumping on CPTs from Malaysia, China, Korea and Thailand. It has recommended an anti-dumping duty of 10% to ensure that the domestic players have a level

playing field. The MNCs are up in arms regarding this anti-dumping duty and raise their concern about the hike in price of CPT being ultimately passed on to consumer. The duty will raise the price of manufacturing TVs in India and it is predicted that the price of TV may go up by 10% to 20%, varying with the TV size. An important raw material in production of TV sets is insulated glass. Continuing the trend of falling duties in all goods, the excise and import duty has been reduced in glass as well to 16% from 20%. After the Free Trade Agreement with Thailand, the import duty on CPT and CTV was fixed at 10% and for glass parts at 20%. In this scenario, the duty on finished good is lower than the duty of the raw material that is not encouraging for domestic value addition. All major domestic TV producers except Sony, source their requirements from Samtel, an Indian company. Therefore, the duty structure favours the imported brands, putting the domestic players like BPL, Onida and Videocon at a disadvantage. The lower duties on CRT tubes and finished TV sets as compared to the raw materials is sending a wrong signal to the industry and discourages domestic value addition in the industry. A serious look needs to be taken at the duty structure to remove all discrepancies and provide the right environment for growth to the domestic players and encouragement to the MNCs.

Effective tax rate on T.V is 22 % The VAT rate on CTV and other consumer durable is 12.5 -15% LCD TV display panel and chips has 5 % basic duty. Indian tax laws allow setting off import duties against CENVAT in a scenario where the final product is sold in India (except for the basic duty) However, comparison of even basic duty in India with the effective duty for China shows that Indian importers pay a higher duty compared to China importers

EPCG allows import of capital goods on paying 3 per cent customs duty EHTP provides benefits, such as duty waivers and tax incentives, to companies which replace certain imports with local manufacturing

JCT Electronics Ltd, the first CPT manufacturers in India , is now shifting its focus to 21 inch flat and launching 14 and 21 inch ultaslim, beside ramping up production of conventional 14 inch.

Industry Analysis: Economic Scenario

There has been much talk about the steep growth trajectory that India has been on for the past few years. After liberalisation, Indias GDP from growing at the Hindu rate of about 2-3%, has started growing at 7-8%. In 2006-07, the per capita income rose by 8.1%, enabling Indians to spend more on consumer goods including durables goods like Televisions. Availability of readily available and cheap finance is one of the main drivers of growth of the TV industry. The TV producers realising the importance of consumer financing, have tied up with banks to provide easy finance to consumers at cheap rates. Schemes such as zero percent interest rate financing have given a strong push to the industry growth. LG and Whirlpool have employed zero financing schemes to increase their penetration in the market. BPL has tied up with banks like ICICI to provide easy financing to consumers. The availability of finance has allowed the usually price sensitive Indian consumer to increase his spending by a great deal. In the last year, the Rupee has appreciated by a great deal against the dollar. While this has spelled trouble for the Indian exporters and the Indian Finance Minister and RBI together have tried to stop the appreciation of the rupee, the appreciation has been a blessing for CTV industry. Raw materials make up about 75% of the total manufacturing cost and for MNCs these raw materials are largely imported. Thus, with appreciation of the rupee, the raw material costs and hence the final production cost of televisions will come down, which may be passed on the consumer. With the world oil crisis and supply side mismanagement in the Indian economy, the inflation rate has touched a a 13 year high of about 13%. Inflation has been rising in india for the past few months and this has had a significant impact on the spending power of people. With rising inflation and constant income, peoples spending on food and other necessary items as a percentage of income has shot up dramatically, thus, leaving little disposable income for consumer durables like TVs. Many consumers who were considering upgrading to technologically superior products have deferred their decision to later period. In an attempt to control inflation, the RBI has been hiking CRR and this interest rates have been rising in all sectors and all banks. This also has had a negative impact of the sales in the industry. Consumer financing companies like GE Money, ICICI Bank and Citi Bank have left the consumer financing segment. Fewer financing options are sure to have a negative impact on sales in the industry.


There has a strong change in the perception and lifestyles of people in India in the last two decades. From being a luxury item, television and in particular the colour television has become a necessary good for the middle class and upper class. Moving deeper into the demand pattern, it has been noted that it is the colour television that is more in demand as opposed to the B&W TV, even in the lower middle class. With the opening up of the economy, the aspirations of the people have increased to mirror that of the western world and there is a strong demand for technologically superior goods with flat screens, digital sound etc. Thus, with Indian favouring colour TVs over B&W and plasma over older televisions, there is a huge market for replacement demand and this has supported the rapid growth of the Indian TV industry. In the Indian TV industry, it has been noted that demand for televisions is usually seasonal and cyclical. Demand for television is strongly impacted by festivals such as Onam, Dusshera, Diwali and Christmas. Every Diwali sets the benchmark for the highest TV sales in any month in a year for most TV companies. The companies keeping this in mind, spend about 40% of their annual advertising budget during the festive season. LG for instance set its Diwali target sales at about Rs. 400 crores in 2006. Presently, it expects sales to increase by 30% in the festive season. Besides the festive season, the TV industry is also impacted by the cricket season. India, being a cricket crazy nation, sees a high correlation between the sales of Televisions in India and how well the Indian team is performing in tournaments. For instance, this year during the IPL, there was a 15% growth in sales of CTVs as compared to 2007 in the same period. Both LG and Samsung have experienced a 20% growth in the sales during the period. There was a strong demand for flat screen TVs, mainly in the metros and B&W and smaller TVs in the smaller cities. Many companies took advantage of this series, and launched special TVs to reap more benefits. Onida launched its Xaria series especially for the IPL, while LG launched its Scarlet series during the period to capitalise on the IPL craze.

Industry Analysis: Technological Scenario

The manufacturing of televisions in India, is largely an assembly type job. The TV industry is a technological driven industry, therefore, companies need to continuously innovate, improve and customise their products. The new innovations like golden eye technology, dolby digital sound and High-Definition televisions are examples of the same. The TV companies have been innovating and customising on mainly three fronts : TV Picture or Screen, Sound and additional features. LG had introduced Golden Eye technology that provides a better picture and more vibrant colours on the TV screen. Philip's Powerchip model gave clearer picture, plasma screens were flatter than the older television screens and hyperband allowed for a larger number of channels. These for just a few of the recent technological innovations in television sets. You can get expert help with your essays right now. Find out more... New technology gives the companies and the marketers a significant point of differentiation over other producers and gives them a fresh chance to market these features. In the recent years, there has been an increasing trend and emphasis on the latest technological aspect of the model. All the players have started becoming more and more dependent of introducing latest technology as the means to garner market share. This was started by the MNC firms initially but even the Indian players have realised the need for innovative features and products to remain competitive On the MNC front, many new technologies have been introduced by Sony, LG, Samsung etc. Sony, already enjoys good brand equity and respect mainly because of its Trinitron technology for picture tubes. Not to rest on its laurels, it has introduced the Sony Bravia series, which builds on Sony's strength, the picture tube quality, in an LCD TV supplying high quality images along with powerful side speakers. The industry players have been investing heavily in R&D and providing the customers with better technology constantly. The plasma market in India is not doing as well as expected. Sony India, has recently quit the Plasma TV market and Panasonic seems to be in trouble as well. LG also is unhappy with the sales of Plasma in India. The LCD market in India is the fastest growing LCD market in the world. LG and Samsung are strong competitors here as well. Sony has a 26% market share in the segment and hopes to increase it with launch of Bravia. LG, is about to launch a LCD TV with Bluetooth wireless networking to maintain its edge in the segment. Keeping in mind the very high technical nature of the industry, and expectations of the customers, the marketers have to strengthen the service network to ensure the best facilities to the customer. COLOR PICTURE TUBE

Samtel color and JCT Electronics Ltd are the major Indian CPT manufacturers.'

Samtel color manufacturers one of the widest range of CPTs in India from 14 inch to 29 inch. The company has a capacity of over 10 million picture tubes per annum. Integrated backward with its component divisions at Ghaziabad and Parwanoo , it also manufacturers electron guns and deflection yokes for colors pictures tubes. ] JCT Electronics Ltd, the first CPT manufacturers in India, is now shifting its focus to 21 inch flat and launching 14 and 21 inch ultaslim.

Political scenario FDI in consumer durables sector too is not expected to face any major political deliberation

Key Challenges
Intense competition among players - leading to higher ad spends and lesser pricing power, thereby lowering margins Increase in raw material prices major raw materials (metals) are exhibiting increasing trend posing margin pressures; however, shift in product mix to partially offset increase in input costs over the medium term Changes in technology - making product lifecycles short Rural distribution - availability of products to masses is difficult as 68% of Indias population still lives in rural areas. Entry of cheap products - as private labels in organized retail

CURRENT SCENARIO Indian television market saw a decline for the first time in 2011, and that too sharp one of 33.3 % from 18 million TV set to 12 million units. This decline is perceived in line with global trends of a shift towards LCD technology.

LG, Samsung, Videocon and Onida strengthened their dominance and increased their combined share from 58.3 % in 2010 to 77.5% in 2011. The mid-size segment continues to remain popular with an 84-percent market share, and together with its 14-inch and 15-inch counterparts command a 99 percent share of the market. The discerning customer has moved from larger sizes to LCD sets. Indian television industry has been under transition over the past few years as flat panel displays continue to erode the dominance of conventional CRT TVs. The biggest challenge for this segment is the decline in prices of flat panel TVs along with continuous technological advancements in the category. India continues to provide support with Videocon glass panels and funnel, Samtel funnel production, color picture tubes from JCT Electronics and Samtel Color, and Videocon-Thomson CPT facility in China. This is in sharp contrast to the shutdown of four facilities Chungwa, Malaysia; LG, Korea; LG, China; and Arico, China in 2011.

Due to continued price cuts in the CRT TV segment and reducing margins, players are increasingly shifting focus to higher-end televisions For high-end LCD TVs, India does not produce LCD panels and most of the panel requirements is met through imports resulting in high prices of LCD TVs in India as compared to China. Also , LCD TV sales are still low in India to achieve significant economies of scale

Consumer preference has changed both for India and China. The product mix has shifted towards high-end models, such as plasma display panels (PDP), liquid crystal displays (LCD), digital light processing (DLP), highdefinition television (HDTV), and flat-panel TVs The average unit price in both India and China has been rising over the last few years on account of this shift

LCDs are perceived as high-end products Indian LCD market in 2010 was about 3.2 million units The price decline due to relatively low import duty on LCD panels and the introduction of small entry-size models have triggered growth in LCD sales

FPD television The flat panel display television market in India is estimated to be 4.5 million set in the year 2011. The category including LCD,LED and Plasma TVs registered a growth of 50 % over the previous year. LCD and LED made significant space in contributing to the overall market size of the televisions. LED, being latest in the technology, received greater response from consumers, because of its design, high energy and less energy consumptions. LED TV enjoy the share of 15 % in Indias total flat panel market while LCD dominate the segment with 85 % share, down by 7 % from previous year. Samsung Samsung at sale on 1 million units in2011 has a wide product range of flat panel televisions that include LCD, LED and plasma technologies. These technologies offer added innovations of HD, 3D and smart TV concept. It has about 17,000 retail points located around the length and breath of the country. The brands plans to continue its penetration levels in the country to reach to more and more Indian consumers. LG LG received a sales figure of 0.98 million flat panel TVs in the year 2011. The company communicates in its ever evolving technology of 3D space as well as highlights other key USPs such as smart functionality and design. Special attention is given to experimental platforms such as mall activation or game festivals to make the target customer experience what 3D is all about. The brand will endeavor to create best in class experience zones for its target customers at various retail outlets. Sony In 2011 Sony sold 0.79 million flat panel TVs. The company has launched the range of LCD TVs, which deliver the best quality picture powered X- reality engine and motion flow technology. Sony plans to further enhance its existing dealer network of 6000. Videocon Videocon has an extensive and reliable network of 5000 plus retailer counters. In addition to it company is planning to have around 2000 stores of its own retail initiative DIGIWORLD in 2012. Videocon aims at building relationship with youth as they are its biggest target segment. Increased purchasing power has led to more indulgence of youth in high value products such as LCDs/LEDs/3Ds LED and smart TVs. This product will not only be technologically advanced but also be connected to the consumers in their everyday lives.



The price decline due to relatively low import duty on LCD panels and the introduction of small entry-size models have triggered growth in LCD sales

LCDs are expected to be one of the fastest growing segments, growing at a phenomenal CAGR of 87.6 per cent during 2009-12