Introduction

Consumer Durables

A durable good or a hard good is a good which does not quickly wear out, or more
specifically, it yields services or utility over time rather than being completely used up
when used once. Most goods are therefore durable goods to a certain degree. These are
goods that can last for a relatively long time, such as refrigerators, cars, and DVD
players. Perfectly durable goods never wear out. An example of a durable good might be
a brick. As a counter-example, sticky tape is not very durable.

Examples of consumer durable goods include cars, appliances, business equipment,

electronic equipment, home furnishings and fixtures, house ware and accessories,
photographic equipment, recreational goods, sporting goods, toys and games.

Consumer Durables Market in India

Indian consumer durables market used to be dominated by a few domestic players like
Godrej, Allwyn, Kelvinator, and Voltas. But post-liberalization many foreign companies
have entered into India, dethroning the Indian players and dominating the market. The
major categories in the market are CTVs, refrigerators, air-conditioners and washing
machines.
India being the second fastest growing economy with a huge consumer class has resulted
in consumer durables as one of the fastest growing industries in India. LG and Samsung,
the two Korean companies have been maintaining the lead in the industry with LG being
the leader in almost all the categories.
The rural market is growing faster than the urban markets, although the penetration level
in rural area 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 increasing consumer awareness are the main growth drivers of this industry.
This report highlights the significance this industry has for the Indian economy, throwing
light on the pre and post liberalization scenario. It discusses the important segments of
this industry and the growth patterns, trends and the demand drivers. The report also
profiles the key players of this industry, with a discussion of their business strategies.
 Market Share of Consumer Durables

Sales

Air Conditioners
Televison Sets
Fans
Refrigerators
Water Purifiers/filters
Range of Durables
Air Coolers
Others

Air Conditioners 27%

Television Sets 21%
Fans 13%
Refrigerators 09%
Water Purifiers 9%
Air coolers 7%
Others 16%

Industry Profile of Air Conditioner Market in India

Major Players
1. Godrej
2. Voltas
3. Samsung
4. Onida
5. Hitachi
6. Carrier
7. Videocon
8. Blue Star
9. Haier
10. Kenstar
11. SANYO
12. Whielpool

Recent Trends and Market share of the Industry

Thanks to the fabled Indian middle-class, the air-conditioner market is hotting up.
According to some industry estimates, growth in volume terms has been 45-50 per cent
this fiscal. But official statistics underestimate this and even report a decline in
production. Nevertheless, by all accounts, including a study by the Confederation of
Indian Industry, there has been a noticeable jump in the demand for air-conditioners from
the household segment.

Domestic companies like Godrej and Onida are gearing up for challenges from biggies
like LG and Samsung. LG is aiming for a 30 per cent market share while Samsung is
targetting a 25 per cent market share in 2009.
Godrej Appliances has a market share of 8 per cent, George Menezes, chief operating
officer, Godrej Appliances, said at the launch of the new positioning for the company
'Design by Curiosity'. Onida, which claims to control 15 per cent of the split air-
conditioner market, has an aggressive marketing and advertising budget of over Rs 20
crore. The company is eyeing a 20 per cent market share during the current financial
year. Godrej, Samsung and LG have launched new ranges of split air-conditioners. The
Godrej Eon range of split air-conditioners is priced between Rs 20,790 and Rs 36,990.
Samsung's range has 18 split and 7 window air-conditioner models while LG's range has
43 split and 19 window air-conditioner models.
While Samsung air-conditioners are available for Rs 16,090 to Rs 35,990, LG models are
priced between Rs 10,000 and Rs 100,000.Air conditioners constitute 20 per cent of
Godrej Appliances' overall business. The company spent Rs 85 crore on its research and
development in 2008-09. Onida had a volume share of Rs 450 crore in 2008 and has set a
target of Rs 775 crore for 2009. Split air-conditioners are registering higher growth over
window air-conditioners. The market for split air conditioners will register a 63 per cent
growth this year.

United Technologies Corporation (UTC) reports, Asia revenues were $8 billion in 2005
and over $300 million (about 4% of the total Asia revenues ) were from India. Today,
UTC's Otis Elevators and Carrier Air Conditioners were the biggest contributors to
UTC's Indian revenues. A little over a quarter of our Indian revenues were from exported
sales to the U.S and a majority of the Indian revenue was generated from in- country
sales.
Report says, Carrier, the world's largest producer of heating, ventilating and air
conditioning equipment, was UTC's second largest employer in India. In the US, Carrier
produces a residential air-conditioning unit every six seconds. "While we are not yet
producing that volume in India, we see a great future demand driven by
construction/urbanization," reported.
Dwelling further on the prospects of the growth of the Indian market, the UTC President
pointed out that the air conditioning market was expected to double from $1 billion to $2
billion in 2010, a growth of 25% each year. The refrigeration segment is projected to
grow 17% annually from $80 million in 2005 to $180 million in 2010. This growth
represents a great opportunity for Carrier and UTC.

Growth and Volume of the Industry and contribution to GDP

• The Rs30bn strong air-conditioner market has recorded an impressive demand

growth rate of 19% (compounded) between 1991 and 2001.
• The industry, which was majorly dominated by players like Carrier and Voltas,
has been taken over by the new MNCs in the last two years.
• Lowering of duties and newer product categories has seen AC's being positioned
as a retail product. Earlier, with a retail price of nearly Rs40,000 it stood no chance
against say a CTV costing Rs15,000.
• The Rs12bn Central AC (CAC) market has had a rough patch in the last two
years. Being dependent on user industries, it is highly susceptible to industrial growth
cycles.
• With the ad valorem duties coming down, unorganized sector that contributed as
much as 70% of the market few years ago has fallen to around 20% now.
• The present penetration level in India for air-conditioners is a miniscule 1-2%.
This figure compares unfavorably to countries like the USA (35%) and Singapore
(30%).
• Demand for room air-conditioners is fairly price sensitive. For demand from
households to spurt, prices have to come down significantly.
• A sustained GDP growth of over 7%, increased government spending and
industrial activity, cheaper consumer credit etc. will drive the demand for AC
products.
 Corporate Profile of Samsung

The Samsung Philosophy

At SAMSUNG, we follow a simple business philosophy: to devote our talent and

technology to creating superior products and services that contribute to a better global
society.

Every day, our people bring this philosophy to life. Our leaders search for the brightest
talent from around the world, and give them the resources they need to be the best at what
they do. The result is that all of our products from memory chips that help businesses
store vital knowledge to mobile phones that connect people across continent have the
power to enrich lives. And that’s what making a better global society all is about.

Our Values

We believe that living by strong values is the key to good business. At SAMSUNG, a
rigorous code of conduct and these core values are at the heart of every decision we
make.

People
Quite simply, a company is its people. At SAMSUNG, we’re dedicated to giving our
people a wealth of opportunities to reach their full potential.

Excellence
Everything we do at Samsung is driven by an unyielding passion for excellence and an
unfaltering commitment to develop the best products and services on the market.

Change
In today’s fast-paced global economy, change is constant and innovation is critical to a
company’s survival. As we have done for 70 years, we set our sights on the future,
anticipating market needs and demands so we can steer our company toward long-term
success.

Integrity
Operating in an ethical way is the foundation of our business. Everything we do is guided
by a moral compass that ensures fairness, respect for all stakeholders and complete
transparency.

Co-prosperity
A business cannot be successful unless it creates prosperity and opportunity for others.
Samsung is dedicated to being a socially and environmentally responsible corporate
citizen in every community where we operate around the globe.
Vision and Mission

Vision

SAMSUNG is guided by a singular vision: to lead the digital convergence movement.

We believe that through technology innovation today, we will find the solutions we need
to address the challenges of tomorrow. From technology comes opportunity—for
businesses to grow, for citizens in emerging markets to prosper by tapping into the digital
economy, and for people to invent new possibilities.

It’s our aim to develop innovative technologies and efficient processes that create new
markets, enrich people’s lives and continue to make Samsung a trusted market leader.

Mission

Everything we do at SAMSUNG is guided by our mission: to be the best “digital-E-

Company”.

SAMSUNG grew into a global corporation by facing challenges directly. In the years
ahead, our dedicated people will continue to embrace many challenges and come up with
creative ideas to develop products and services that lead in their markets. Their ingenuity
will continue to chart SAMSUNG’s course as a profitable, responsible global
corporation.
Performance

Net Sales Total Assets

Total Liabilities Net Income

Total Stock Holder Equity Employees

 Samsung India Electronics Private Limited (SIEL)

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 Samsung’s South West Asia Regional Operations, and looks after its
business in Nepal, Bangladesh, Maldives & Bhutan besides India. SIEL commenced
operations in India in December, 1995. Initially, a player only in the Colour Televisions
segment, it later diversified into colour monitors (1999) and refrigerators (2003). Today,
it is recognized as one of the fastest growing brands in the sphere of digital technology,
and enjoys a sales turnover of over $ US 1 billion in a just a decade of operations in
India.

Samsung in India has a presence in the following areas of business:

• Consumer Electronics (CE)/Audio Visual (AV) Business

• Home Appliances (HA) Business
• Information Technology (IT) Business

Its operations are broadly divided into the following key sub-functions:
• Sales & Marketing
• Manufacturing
• Software Centre Operations

Samsung Air Conditioners in India

Samsung Air Conditioners India are one of the most popular products in this category of
electronics. The scorching summer heat experienced by most parts of India has made a
quality Air Conditioner a mandatory home appliance for all households. As the summer
rings in, a hunt for the best available air conditioner in the market begins. Samsung India
Air Conditioner based on the unique Energy Star technology provides a much preferred
solution to your staggering electricity bills.

Samsung India provides window air conditioners that are ideal for small rooms or in a
room where extra cooling is required for e.g. kitchen. While split air conditioners by
Samsung are designed for larger rooms and halls where a single window AC in
ineffective. Some special features available in different Samsung window and split ACs
include Anti-Fungus or Bacterial Filters incorporated within the air conditioner that
purify the air thereby leaving the air fresh for people with respiratory problems. Some
ACs also have deodorizing filters that absorb tobacco smoke, ionization technology that
promises a cleaner, purer and dust and germ-free air and electrostatic filters that remove
particles as small as 0.01 microns from the air.
Samsung India takes extreme care in the manufacturing and subsequent assembling of its
Air conditioners. From the required tonnage to power consumption and Energy
efficiency, from the type of compressor (rotary or reciprocating) to the refrigerant gas
used, from the noise levels to the air circulation levels, everything is given individual
focus at Samsung India to design the best possible product and wrap it in a completely
anti-corrosion body.

A unique Samsung air conditioner recently launched is the Samsung Biosleep. This
contains the specially developed UTR (Ultra Tropical Rotary) Compressor that helps the
Air conditioner maintain an optimal skin temperature for the inmates of the room. This is
known as the Good Sleep Mode that is also energy efficient and saves up to 30 % of the
energy consumed usually.
 Product Line of Samsung ACs

Samsung Bio Sleep ACs

1.Split ACs:

Total number of models: 18

Categories:

 Vivace Plus
• 1.0 Tons
• 1.5 Tons
Price: 28890 to 35990

 Deluxe Crystal
• 1.0Tons
• 1.5 Tons
• 2.0 Tons
Price: 26890 to 34490

 Standard Max
• 0.8 Tons
• 1.0 Tons
• 2.0 Tons
Price: 17990 to 32990

2.Window ACs:

Total number of models: 7

Category:
• 1.0 Tons
• 1.5 Tons
• 2.0 Tons
Price: 16090 to 23290
Segmenting, Targeting and Positioning of Samsung

Apart from sales to households through its robust distribution channel, SIEL also has a
huge clientele in the Institutional Sales space. Therefore, there is a separate department
devoted completely to this function. It is the VMB (Vertical Market Business)
department that is responsible for making sales to institutions such as airports, hotels,
banks, movie theatres, etc.

Corporate Marketing is aimed at strengthening Samsung as a brand among the dealers,

distributors, and end customers. Hence, the activities covered under this function include
formulating and announcing promotional schemes for both the trade partners as well as
the end customers. Moreover, it also plays an instrumental role in ensuring brand
visibility through corporate sponsorships, and planning, managing and organizing various
events and product launches.

The tag line for its air-conditioners range is `Breathes Life'. This campaign highlights the
benefits of Samsung's proprietary technology, Bioniser, which releases anions into the
room environment and coupled with the `Silver Nano' health system helps in making air
pure and fresh, devoid of any kind of pollution.

The air conditioners feature slim design and come equipped with Samsung's most
advanced technologies, comprising the Silver nano heath system, Digital 'i' technology
and Bionizers that make air conditions in home and office healthier and bacteria-free.

The air conditioners are embedded with Digital 'i' technology, which is a large circular
LED (light emitting diode) display that allows consumers to monitor the 'health' of the
room in terms of current operation mode, power and the room temperature all at a glance.

In addition to Digital 'i', the air conditioners are equipped with bionizers and the Silver
Nano Health System - Evaporator and filter, to prevent propagation of fungus and
bacteria. To deliver fresh air, it is essential not only to purify the air but also maintain the
cleanliness within the air conditioner, as they are an ideal place for molds.

If no counter measures are taken, molds will propagate and the air conditioner starts to
produces air with an unpleasant odour. To counter that, Samsung air conditioners come
equipped with Samsung Bionizer Air Purifying System that provides the freshest and
cleanest air.

Along with Digital 'i' and bionizers, Samsung's new air conditioners are equipped with a
dehumidification function that allows consumers to reduce humidity while maintaining
room temperature to consumers' preferences.
Furthermore, with a touch of a button, consumers can preset a Samsung air conditioner to
automatically adjust the room temperature, without worrying about the air-conditioning
getting too cold or warm during the night. As the sleep mode is automatically turned off
after 6 hours, it ensures that users get good quality sleep at night.

Marketing Mix of Samsung

Product

The new star rated, bio sleeplus air conditioner range, comprising of 18 Split AC and 7
Window AC models, is differentiated on account of the unique Biosleep and Comfort
Care features that have been incorporated in this range. The 2009 Split AC range from
Samsung is available across the premium Vivace Plus, the deluxe Crystal and the
standard Max series.

Some of the key features of this BEE Star rated Split Air conditioner range include its
Bio Sleep feature that ensures uninterrupted sleep since it works with the body’s bio
rhythm and adjusts the room temperature according to the body’s natural needs ensuring
that the user wakes up refreshed; Comfort Care feature that not only provides powerful
cooling power but automatically adjusts humidity so that the users are truly comfortably
cool. The new Comfort Care technology in the Samsung ACs adjusts the room
temperature depending on the percentage of humidity and maintains the most
comfortable room temperature; Smart Saver mode that operates the air conditioner
automatically in the least amount of time necessary to cool the room. It therefore saves
electricity and does away with the need to repeatedly switch on and off the AC to save
electricity. Samsung’s S inverter technology lowers energy consumption by up to 50%
compared to conventional air conditioners. Its powerful, exact control let’s the AC reach
the desired temperature quickly and maintains precise temperatures, so that there’s less
fluctuation and less motor run time. This ensures quieter operations and less energy
wastage. Samsung’s UTR Plus Compressor ensures that the AC maintains superb
performance even in temperatures of up to about 54 degrees Celsius. The multi step filter
system of the Samsung Air conditioners is designed to filter out more pollutants for
cleaner, healthier air.

We firmly believe that continuous innovation is the key to making path-breaking

improvements in our products & processes and achieve productivity goals beyond
imagination. Samsung uses many tools for innovation such as “Reduced 7 Type of
Wastage & SixSigma”. Their commitment to grow through continuous innovation has
helped us improve our productivity by 200% in the last 5 years.

Samsung Electronics brings a very enriching entertainment experience to the consumers

worldwide through its cutting edge technologies. We aim to revolutionize the way and
break the barriers to ride on the frontiers of technology to provide superior quality
products to Samsung's customers. Our Engineers continuously strive to improve the
performance and introduce innovative features to make these products very user friendly.
We follow optimized and stringent quality processes to build these world leading
products.
SIEL has its manufacturing facility at Noida, U.P. This is the state-of-the-art, high-tech
facility for manufacturing Color Televisions, Color Monitors, and Washing Machines &
Refrigerators. This manufacturing unit consists of sophisticated facilities with latest Auto
Insertion Machines, Auto PCB Tester, High Efficiency Module Conveyor, and all
modern machines geared up for High Speed, High Volume & Very High Quality
Production.

Price

The premium Vivace Plus Series, available in 1.0T and 1.5T capacity, features a
Premium Shadow Mirror Design and comes with a 5 star rating. The Vivace Plus is
priced at Rs.28890/- and Rs.35990/-.The Crystal Series available in 1T, 1.5T and 2.0T
capacities, comes with a high glossy panel in front with the colour options of wine red,
white, silver and black being available to consumers for matching with the interior of
their home. The Crystal series come with 4 and 3 star BEE ratings and are priced in the
range between Rs 26890/- to Rs.34,490/-. The Max Series, available in 0.8T,1.0T,1.5T
and 2.0T capacities, offer a simple, chic look and slim body and is priced in the range
between Rs.17,990/- to Rs.32,290/-.

The 2009 range of Samsung Window Air conditioner across 1.0 T, 1.5 T and 2.0 T
capacities comes with unique features like biosleep, Smart saver, Samsung UTR PlusTM
compressor, Silver Nano filter, washable grill and a fluorescent LCD Remote Control.
The Samsung 2009 Window AC range is priced between Rs. 16,090 to Rs. 23,290/-.

Place

Along with the launch of new products, Samsung also consolidated its distribution
system. Samsung had 18 state-level distribution offices and a direct dealer interface. The
direct dealer interface helped the company get quick feedback from dealers, and enabled
it to launch products according to consumer needs.

The smallest villages have remote area offices (RAOs) with individual budgets and
separate servicing and marketing teams. The RAOs report to central area offices in larger
towns that, in turn, report to branch offices. Just over a third of the company's revenues
comes from urban markets; the rest is accounted for by semi-urban towns and rural
markets.

It is making a strong effort to reach a much wider base of consumers in tier-two and tier-
three cities. Apart from increasing the number of branch sales offices and expanding its
retail presence, the company is also reaching out to its customers directly.
Promotion

Headquartered in New Delhi, Samsung India has a network of 19 branches and 16 Area
Sales Offices (ASOs) located all over the country, and the number is expected to grow, as
the organization continues to expand its horizons.

The Sales & Marketing function at Samsung is primarily divided into two categories:
• Sales & Marketing (IT)
• Sales & Marketing (AV/HA)

Another function of the sales & marketing function at SIEL is public relations, also
known as corporate communications. Here, the scope of activities includes maintaining
liaison with the media, organizing corporate social responsibility initiatives, website
management, corporate literature, etc.

In 1995, when Samsung entered India, it realized that Indian consumers were not familiar
with the company. So, in order to establish itself in the Indian consumers' mind, Samsung
launched corporate advertisements highlighting its technologically superior goods.
 Competitors
Samsung is a leader in the market of air conditioners along with LG, both occupying
almost equal share. Thus LG is always perceived as its major competitor. The detail
analysis of this competition is as under.

Sales of the two South Korea-based conglomerates, LG and Samsung were 35% to 50%
higher in India in September and October 2008, compared to the same period last year.
And both are confident of meeting their targets by this year's end, which include revenue
growth of around 30%.

However, the level of success LG and Samsung have achieved in India is worth studing.
In just over 10 years, the Korean duo has established dominance over the Indian white
goods market, edging out traditional multinational companies and Indian competitors.
Between them, they account for the largest share of the $6 billion consumer durables,
electronics and appliances market, with LG claiming the preferred brand position for
virtually everything from televisions to microwave ovens and washing machines, while
Samsung is a steady number-two or number-three player. Over the past decade, both have
consistently seen double-digit growth rates and are convinced they will maintain, if not
surpass, those levels in coming years as well an optimism that is shared by industry
watchers.

LG and Samsung's success is a function not just of what these two companies did, but
also of what their competitors didn't do. The super-premium price and positioning of
technologically superior Japanese brands like Sony and Panasonic made them
inaccessible to most of the Indian market. On the other hand, lower-priced Indian brands
offered old-generation products; they did not invest sufficiently in R&D because they
were not able to launch new products quickly enough to amortize those costs.

The other players in the consumer electronics space consider India a market for
transactions, which is a short-term, unsustainable strategy. On the other hand, LG and
Samsung believe this is a market in which to do [long-term] business. Both have made a
full commitment to India.

In any customer-facing business, your product, brand and distribution decide your
success. Moreover, in the durables industry, after-sales service and product innovation
are also key factors. These two companies leveraged their global R&D facilities to
speedily bring in new products and offered more variety at attractive prices. LG followed
this approach better than Samsung, which is why it is bigger than Samsung in India."

In for the Long Haul

LG may be the leading electronics brand now, but its initial attempts to crack the Indian
market were disappointments. In the late 1980s and early 1990s, when government
regulations prohibited foreign companies from starting independent ventures, Lucky
Goldstar (as the company was then known) twice entered the Indian market with local
partners; both ventures failed. In 1997, LG finally got permission to set up its own
manufacturing facilities. The company has come a long way since: Revenues in 1997
were US$33.97 million; last year, LG India earned US$2.37 billion. Samsung India has
maintained a steady growth since it launched in India in 1995-96, with 2007 revenues
reaching US$1.3 billion.

Early on, the two companies had very different approaches in India. LG's entry strategy
was to establish its presence across the country, offering a range of affordable but
feature-rich products. Margins in the consumer electronics industry are traditionally very
low, and the company didn't try to push them up. Instead, it clung to the "value-plus"
platform, counting on volume to bring in revenues.

Samsung, on the other hand, focused on creating a premium brand image by emphasizing
the design and technology aspects of its higher-priced products and building a more
affluent customer base. "Customers would buy an LG [product] for their bedrooms but
pick a Sony or Samsung for their living rooms," says Gupta.

Over the past couple of years, though, there has been a reversal of roles. Now, Samsung
is reaching out to the price-sensitive masses, offering affordable, customized products.
Samsung India wants market leadership not only in the premium end, but also in the
large-volume categories. LG, meanwhile, is seeking to upgrade its image and product
portfolio, thus moving from being a functional to an aspirational brand. All efforts are
directed towards offering aspirational products that new-age customers can be proud of.

When Samsung and LG's existing approaches to the market were obviously successful,
why are they changing them now? Your initial route is based on your company's heritage.
But whether you choose a product-led or brand-led strategy, you have to complete the
circle. When you want to expand the market, it is easier to reach out to a segment where
you don't have a presence than to eke out more value from an existing category."

Product Innovation Is Key

Regardless of which segment of the population they target, the key to LG and Samsung's
success lies in their product innovation. While the basic design of the products originates
in South Korea, both companies have invested heavily in local R&D to tweak product
design to suit local tastes. This year, Samsung spent US$13 million to set up a 75-
member hardware R&D center at Noida (Uttar Pradesh), while LG has budgeted US$50
million for R&D and manpower in the coming 12 months. When LG and Samsung
entered the Indian market, domestic companies were investing in advertising and
marketing, rather than product development. The Koreans' promise of cutting-edge
technology and their hunger for R&D worked to their advantage.
One reason LG is successful in India is that they listen carefully to their customers. We
have realized that not just localization, but micro-localization, is required. Recently, LG
conducted a nationwide lifestyle study to know more about our consumers and their
preferences. Products are designed based on those findings. In many Indian households,
the washing machine is operated by domestic helpers who can't read instructions in
English. LG's solution was to add speech technology that gives instructions in local
languages. Innovations like this help us connect with our customers and offer products
that fit into their lifestyles.

Getting Satisfaction

Having gained a foothold in the Indian electronics market, LG and Samsung are now
working on firmly securing their positions through customer retention. That requires a
two-pronged approach -- promoting replacements for electronics and appliances and
focusing on customer satisfaction and after-sales service. Industry observers point out
that the product lifecycle in consumer electronics has already plunged from two years to
under one year, on average, which creates huge potential for replacement purchases.
Earlier, all purchases were for a lifetime. Now, the lifecycle is getting shorter and
companies are seizing this opportunity.

Customer service is another way of keeping existing customers engaged with the brand.
Across the industry, customer service has improved, from installation to follow-up. Of
course, technology has also improved, so breakdowns are fewer. But the accent on
customer satisfaction builds brand loyalty and contributes to word-of-mouth publicity for
the brand. Both LG and Samsung have focused on providing reliable and quick customer
service right from the start. Even in the mid-1990s, when Samsung had just begun its
India operations, vans painted in the company's colors toured the major cities with
engineers on call for service visits.

Now, apart from a website, Samsung has two captive call centers where operators field
calls in six languages and route calls to any one of 900 service centers and 7,000
engineers across the country. The emphasis is on quality and speed of service, so
turnaround time is under 24 hours in most cases.

LG, too, has increased its attention to customer service. Earlier this year, the company
launched its "211" initiative, where it promises to call back the consumer within two
hours, fix an appointment within one day of registering the call, and allocate a one-hour
slot to fix the problem. The idea is to provide service at the customer's convenience, says
a company spokesman. Like Samsung, LG has a call center, 8,000 engineers and 1,200
service centers across India. After-sales service is critical in the durables industry

Customer service is vital, even if product quality is impeccable. It is a way of establishing

confidence in the brand. With customer service, you can connect with the customer not at
the functional level, but at a higher, emotional level.
Voltas

The premium air conditioner segment is estimated to be around 12 percent of the total
annual market of two million units.

Including the premium range, Voltas has launched 30 new models, aiming to increase its
market share to 20 percent next fiscal.

The market size in fiscal 2008-09 for the home and commercial segments is expected to
be 2.6 million units and we hope to sell 525,000 units, up from the current year’s
200,000.

The air conditioner market is broadly divided into home, commercial and industrial
segments.

The commercial segment includes premises fitted with off the shelf air conditioners and
those needing custom-built air conditioning systems.

The group looks after off-the-shelf air conditioners and other products like water coolers
and water dispensers.

Queried about the higher price of the Voltas products compared to those of some
multinationals, their products are certified for energy efficiency. The total ownership cost
will be less in the case of our products.

In fact, Voltas air conditioners are competitively priced.

Voltas, which has a turnover of Rs.24.50 billion, also plans to beef up its distribution
network to 4,000 outlets next year by adding 1,000.

The company will also increase the number of its exclusive outlets, called Voltas Domes,
to 125 by opening 45 of them.