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T E CH NOL O G Y Aman Kumar
MARKETING AND BRANDING STRATEGIES OF CONSUMER DURABLE COMPANIES
ACKNOWLEDGEMENT
Rishabh Bajpai
DECLARATION
I hereby declare that this project report entitled “ Marketing and Branding
Strategies of Consumer Durable Companies” is written and submitted by me
under the kind guidance of Mrs. Jyoti Bhasin.
The findings and interpretations in the report are based on both primary and
secondary data collection. This project is not copied from any source or other
project submitted for similar purpose.
Contents
Introduction
Industry Overview 7
History 8
Major Industries
Philips 14
Samsung 15
Videocon 15
Whirlpool 16
Hitachi
16
Electrolux 17
BPL 17
Onida 17
Comparison-Major Players
BPL
Products 20
Strategy 25
Distribution Network 40
Promotion Mix 42
Videocon
Products 46
Distribution Network
62
Promotion Mix 63
Samsung
Products 66
An Overview 76
LG’s Strategy 78
SWOT Analysis 93
Conclusion 95
Recommendation 101
Bibliography 104
Introduction
INTRODUCTION
INDUSTRY OVERVIEW
coffee maker. You pop a couple of slices of bread into your electric
toaster, grab some juice from the refrigerator and throw a load of
laundry into your washing machine. You dry your hair with your
electric hair dryer; brush your teeth with your electric toothbrush and
microwave oven and then leave early to head homework in your yard
your need to put that roasts in your electric oven, open a can of
vegetable with the electric can opener and mix up a cake with your
electric mixer. After the dishes have been put in the automatic
dishwasher, it is time to relax with the TV and VCR, but only after
you put the clothes into the dryer and iron the clothes you will need
for tomorrow. Time to set that timer on the coffee maker again and
appliances grows every year, but there is one sector of the industry,
the major appliance sector, that remains fairly constant. This is the
HISTORY
big blow. MNCs that are gaining good market share are Samsung,
LG, Electrux.
Inspite of many value added Service that are being offered by most
and has enhanced the quality of life that is enjoyed by the Indian
has thrown up competitive players who are not only able to cater to
of the world. This has all happened in the last 20 years or so. A
industry. There could have been two reasons for so little faith in
Indian goods. Firstly, the Indian public’s unhidden groups like BPL,
products but have also created in a very short span, brand equities
business objectives.
realized that the core of the corporate world must change, to focus,
the first time ever in India, on the consumer. And to stop chasing
revenues, profits and market shares, which will flow only from the
influences - for instance, the advent of satellite TV, internet and the
information age bringing with them rich, real - time images and data
buyer ’s market, the marketer has not choice but no make the
Major
Industries
MAJOR INDUSTRIES
economy is good, rather than waiting until they are forced to make
appliance market over the next few years. The baby boom
generation will be in the 35-to-55 age group during the next 5 years.
Philips India
years ago. Philips has had a fairly successful run as a major player
Samsung Electronics
Videocon
conditioner 12.7%.
Whirlpool
with TVS private limited. In 1994, TVS Whirlpool Ltd. changed its
Amtrex Hitachi
and brown goods market in India few years back and is aiming at a
end AC’s each in split and windows segment. Its market shares in
ELECTROLUX
BPL
BPL Group was promoted by the founder, TPG Nambiar. The flagship company,
BPL Limited was incorporated in 1963 as a private limited company under the
name British Physical Laboratories India Private Limited for the manufacture of
Ltd. UK. The company further expanded into such electronic products as medical
monitors etc. Making its foray into consumer electronics in 1982, BPL quickly
established itself as one of India’s most trusted consumer durable brands. Huge
building have made BPL a trusted name in the consumer durable industry. BPL
today enjoys one of the highest brand awareness amongst consumer electronics
brands and also has one of the highest preference shares in the CTV industry.
BPL is currently engaged in the production and sales of televisions, home theatre
alkaline batteries.
20%
6%
61% 13%
Market Share-CTV
8%
6%
18%
68%
INTRODUCTION
Japan. Since then the growth has been phenomenal with sales
its leadership in the market for a quality product company from its
competitive in the years to come and growth rate will slow down,
BPL is diversified itself into other industries like power and cell
group and group resources are stretched to the limit as both the
BPL GROUP
Mission Statement
consistently give its customers the best value for their money.
operations.
advancement.
welfare.
To respect the laws, rules and customs of the land and to ensure
ethical standards.
performance.]
from the cabinet to the electronic tuner itself and buys the picture
BPL group is lot shy, introverted, but excited about the quality of its
products. It is not surprising that over the past years, the group has
Rs. 19 crores to Rs. 1000 crore. BPL in the field of colour TVs has
left behind old time rivals Videocon & Onida . In audio segment the
VCD, BPL SANYO was the market leader with a 17 percent share of
market. In the Epbaxs, the group has the largest user base in the
has been able shed its image to largely because of the involvement
or event.
BPL has always invested money first into factories and then into
place. Stress consumer pull, not dealer push. In the long run, this is
consumer.
attention. The rub-of on the entire range down the line will work
advertising due to the fact that if the promotional spend crosses and
spend that means they are cutting their brand in the long run. So for
all factors BPL has got its act together. BPL’s range strategy works
on two levels. At the first one, the group is pushing into every
across the country and turning them into BPL Galleries that stock
and display only and all BPL products. The main objective of the
BPL Galleries is to show the public the width of BPL’s product range,
build corporate image and sales. The second level of BPL’s range
strategy is most obvious in the Rs. 1,500 crore audio market. The
The BPL group is slowly moving away from its core areas of
Bombay, stands out for jumping into the fray without any foreign
power skills of it’s the BPL group’s attempt to move away from the
along. They have entered power sector because of its high entry
barriers for smaller players. Since telecom and power are high
reduce but very gradually. The various companies are in six main
STRATEGY
Differentiation : last four years along, the BPL group has splurged
India, reveals that BPL is the sixth –most popular in the country
today. Not surprisingly, the group has valued the BPL brand at Rs.
company, which did the valuation for BPL: The huge amount of
process.
To small extent has that helped BPL actually expand its CTV market
sales grew by 15 per cent. But BPL did not have a straightforward
BPL cannot afford to overplay the Sanyo part. In fact, the entire
budget or Rs. 6.45 crore in 2004-05 ford not show great commitment
pace with market demand. For instance, the group’s first venture
crore, BPL has consolidated capacities under the flagship BPL Ltd.
Besides the total capacity has been expanded from 8.30 lakhs CTV s
a year to 10.30 lakhs, and BPL plans to double it. If scale economies
Rs. 450.
Business Portfolio
research firm, BPL has a market share of 19 per cent. For at least
three to four more years, CTVs will continue to drive BPL’s revenues
THE 4Ps
Colour televisions account for 37% of all TV sets sold in India , 21”
range of high end digital products like digital camera, digital home
product line of CTV’s by adding more items within the line’s present
range.
Product Range
Product Specifications
Price Rs (MRP) NA
Brand BPL
Screen Size (Inches) 20
Type of Screen FFST
Sound Output (Watts) 240
Child Lock YES
Remote YES
Channel Scan YES
Sound Quality STEREO
Auto Volume Leveller No
Multi Language OSD Menu No
Warranty Years 1
15400
22500
29900
new buyers.
The other big factor in the 21” segment is the gradual shift to the
F&FST (full and flat square tube), which allows for better viewing.
India is expected to go the way of the rest of the world which prefers
the margins are higher there. Even as more consumers are willing to
and the obsolete products both can sell side by side in substantial
numbers.
Washing Machine
Other Features:
Fully automatic
Top Loading
Quiet operation
Other Features:
Top Loading
Quiet operation
BPL Factory
Branch Towns/C&F
Distributors
Retailers
Customers
BPL has about 8000 dealers all over India. It regularly conducts
dealers meets to tell them about its new product and future plans.
The latest being Techno Summit ’03 held in month of December. The
strategies to lower prices. BPL has been affected by price cuts of its
quality and the brand values it enjoys. BPL went for quite a few
CTVs value and price are currently perceived in 30/70 ratio which
means that Indian consumers still go for the lower priced versions,
way that it can cater to all category of buyers. The company has
been very aggressive in its pricing which has led to a sales strategy
of receiving 100% advance payment from its dealers and giving its
components.
New CTV sets come cheap, thanks to exchange meals and easy
PROMOTION MIX
west are seen to respond more to push and the east and south are
investment in tools, used to make dies and kits of CTVs, are rising,
BPL launches four to five models each year. They have five tools
and each tool costs Rs. 5 crore to set up. The brand building activity
has become important for all the companies and this basically to
brand.
the country called BPL galleries that stock and display only BPL
the width of BPL’s product range, build corporate image and sales.
centers. Currently BPL is using Amitabh Bachchan only for its rural
marketing campaigns. BPL will also exit from niche programs like
BPL Oye, the popular Hindi film song countdown show on Channel V
sympathies (thanks to the kid) and warmed its way inside every
the game and get into cricket – related sponsorship in a big way in
the Cricket World Cup in2003. BPL has also launched its Player –
In last 2 years it had come out with more than 11 such schemes.
ANALYSIS
Introduction
TV.
videocon.
Videocon has tied up with international giants like Sansui for middle
range audio products, Toshiba for CTVs and VCD Players. Videocon
consumer electronics.
customers stay ahead over the years, Videocon has offered state-of-
Plasma TV, the WebTV, Degital Video Disc, Double cascade washing
customers.
connections.
price with quality. Thus, it lost its leadership in the CTV market to
Leadership
Through
technology
innovation
quality
performance
Videocon has been bringing the latest and very best in Consumer
life –
The new Symbol of Videocon asserts its passion for global impact,
and the two ‘E’s on other side represent to group’s wide spectrum of
proclaims a paradigm shift. A sign that represents the new force that
While training out wide and penetrating India to the deepest possible
depths was once the natural future course for this distribution driven
including R&D.
thanks to the buoyant CTV market with VIL’s turnover rising by 23%.
it, it is the dominant brand that gets affected by the entry of new
comes – That’s the reason they were not surprised when their CTV
They have ‘Bazooka’ for the Top-end of the market. For the middle
sound and now Bazooka Videocon is using its brand equity built over
its current market share. The number it wants will come from
to suit localized needs. Videocon says that the stripping – down job
demand patterns.
Five years ago – small towns accounted for first 1% of the brands
CTV volumes now the proportion stands at over 17%. The upshot;
are lower in small towns, so VLL gees a layer fraction of the price
the consumer pays. This is one reason that the strategy is sound at
economic behaviours.
with money being purified mainly into things which deliver results, to
millions.
THE 4 P’S
3609 R 9,990
3617 R 8,990
51 cm 5122R 13,990
5120R 11,990
53 cm 5414R 20,490
5420 R 16,990
7501 33,990
Bazooka Worfee
200 W PMPO
CD Comparable
Child lock
Channel Scan
Bazooka Woofer
CD Compatible
Child lock
Channel Scan
product.
Television with PIP (Picture in Picture, FSFT Hill flat square Tube),
This was the 1st step and company started launching good
of the society and keeping its image as it was for the price sensitive
customer
Price
Model Name Description
(Rs.)
VIDEOCON,fully auto,top
Option,Self Timer
VIDEOCON,fully auto,top
V-P-1000 AFDC 29990
loading,10 (Kgs),Self Timer
VIDEOCON,fully auto,top
1211 16400
loading,4.5 (Kgs),Self Timer
VIDEOCON,fully auto,top loading,6
V-P-0600 AF 19990
(Kgs),Self Timer
VIDEOCON,fully auto,top
V-P-45 FDX 12290
loading,4.5 (Kgs),Self Timer
VIDEOCON,semi auto,top
V-P-55 BT 8990
loading,5.2 (Kgs)
VEDEOCON,semi auto,top
V-NA-70 TS 8990
loading,7 (Kgs),Self Timer
Other Features:
Fully automatic
Top Loading
Capacity 4 Kg
6 wash programmes
Auto soak
VIDEOCON 50 T
Other Features:
Semi automatic
Top Loading
VIDEOCON 55 F
Other Features:
Fully automatic
Top Loading
VIDEOCON 55 TDX
Other Features:
Semi automatic
Top Loading
VIDEOCON 60 BT
Other Features:
Semi automatic
Top Loading
Distribution
service centres all are India, equipped with the latest technology
norms.
DISTRIBUTION NETWORK
Factory
Distributors
Consumers
PROMOTION
14-inch CTV is aimed at young people who want their own CTV sets.
launched its ‘Money – back offer ’ a unique scheme for the 21-inch
Bazooka (Rs. 14,990) and the 14-inch private (Rs. 5,990), through
which Videocon promises to return the entire money in six –years for
confirmed suspicion that much money was being saved to make big-
ticket purchases later. Replacement market buyers are all the more
to get that money out of the bank on the assured that the money
celebrity advertising like BPL is but still it has left an impact on the
MNC’S
and communication.
and network businesses), but also creates a rich life for people
Samsung SDI puts much energy into developing new products and
completely flat Braun tubes and from developing 42-inch and 50-inch
MANUFACTURING
right product mix to the customer, in time, and at the right price.
Microwave Oven Facility : Seeing the high potential for the product
India.
Microwave Oven
1875N-S
Features
7 Power Levels
99 Minute Timer
Glass turntable
Specifications
Capacity:
Power Output:
and cook
Auto Programmes:
Auto defrost
TDS:
evenly throughout
Design:
489mmx275mmx393mm
Colours:
White/Silver
M183DNS
Features
Auto Programmes
TDS
OTHER PRODUCTS
DIGITAL TV
Flat-screen TV
without curves
- Distortion-free screen
detailed picture
original colors
were there
Marketing and
Branding
Strategy
STRATEGY
MARKETING STRATEGY
opportunity area and the industry is strongly taking this route of increasing the
production and sales volumes in order to make the most of the economies of
scale. With increasing consumption, the raw material prices have been moving
offering products which are unique and where the customer sees value in his
purchase. The customer is ready to pay more if she feels that she is getting
something, which will improve her life and enhance her lifestyle.
consumer lifestyles and offer the right product at the right time. Basically, the
management (Ideally nil bad debts and zero days operation). A good, committed
at the back of most of the peaks in this industry’s growth. Right from the
CRTs becoming pure flat, technology is the prime booster for this industry.
Advancements in future technologies like the LCD panels and DVD recorders
and the like will critically impact the industry. It is expected that by 2008, 33 per
cent of the worldwide demand will be met by LCD TVs and Plasma TVs.The core
to handling various market challenges is to protect the bottom line while being
cheapest of the prices, but by the benefit that the Customer perceives for the
while being relevant to the value for money seeker. With lifestyles improving and
relevance to the consumer will become more important than ever before.
through during the entire purchase cycle and the post purchase usage
relations and the experience that is offered to her throughout will be a challenge
network, and the organisation that manages the network better, has a substantial
The past couple of years could be termed as the most dynamic years in the
history of this industry. The rise of MNC brands and its adverse effect on the
Indian counterparts. Many Indian brands have become almost extinct. Few
Indian brands who have not only survived but have grown during this period.
Today, Onida & Videocon enjoy a high brand salience and is seen as a trusted
and reliable brand, with a very high degree of product satisfaction among its
users.
brands that have proven track record of trouble-free product performance score
on this parameter. Like any product, electronic goods suffer wear and tear.
South Korea was established in January 1997 in India. It is one of the youngest
Ovens, Refrigerators (Direct Cool and Frost Free), PCs, Vacuum Cleaners,
optical storage devices and GSM mobile phones. During the ten years of its
norms starting with the fastest ever-nationwide reach, latest global technology
“The success in India has been phenomenal and We foresee the Indian
2010. The success is attributed to the employees who have made all efforts
to make the company grow strength in strength. The Pune factory is in line
export hub for several South Asian countries,” once said by Mr. S. S. Kim,
Vice Chairman & CEO of LGE . LG India will become the export hub for LG
worldwide catering to the Middle East and African markets. The company aims to
touch an export turnover of USD 3 billion by 2010, which will contribute to 30 per
percent while the rest 35 per cent will be from Consumer Electronics and Home
Appliances
Vision 2010
With a strong R&D and export focus, LG India intends to become a USD 10
billion company by 2010 of which 30 per cent will be from exports. With their firm
resolution to realize their objectives, they will further consolidate their leadership
It hasn’t been very long since this Korean electronics and home appliance giant
came to India to sell colour TVs and other white goods. No sooner did the
company entered India than it found this to be a large market for its IT products
as well. LG’s experiments may have resulted in some initial snarls, but the
business. How has this been possible? Not that the company didn’t face any
competition when it came here, but LG has fought well to get where it has today.
customers. The company launched an optical mouse some time back, which has
LG has also launched a ‘My PC’ initiative. Though not as talked about as
Samsung’s high-profile and well-known ‘Build your own PC’ scheme, the
company feels that the launch was quite successful and claims the response is
encouraging. B- and C-class cities were key targets for the scheme. The
peripherals are being offered to the channels that cater to the assembled PC
market. When it comes to the branded PC market, LG has all the strengths/core
NEW DEVELOPMENTS
export performance.
Nambiar, the company had identified Eastern Europe for the unit to
refrigerators.
The company hopes to increase its turnover by 35 per cent with the
With the entry of several foreign and domestic players in the frost-
free segment, BPL's market share has fallen substantially over two-
three years.
a combination of both.
BPL Telecom has listed its one of its three entities-BPL Innovision,
broad band ISP services through digital subscriber line, cable and
satellite.
capacity would increase from 3mn tons to 6mn tons. The company
plans to increase its capacity to 9mn tons in the next three years,
shift in the demand from small and medium TVs to large and flat
TVs, which require 30% more glass. The technology for the venture
stable -- the group which owns brands such as Akai and Sansui -- in
market.
Future
Prospects in
this Industry
Future Investment
than a luxury item. And hence, the demands of consumer items are
were flung open to foreign operator. Many came flooding in and the
For instance :
Rupees (US$680 million) for the fiscal year ending March of 2005.
from 620.96 million Indian Rupees to 1.33 billion Indian Rupees. Not
various countries. The scheme will offer a 20 per cent discount to its
in India.
The scheme is pegged at Videocon's Indian retail price list and also
can pay in the local currency of the country they reside in. Videocon
would focus on countries such as the US, the UK, Dubai, Oman,
available. New CTV sets come cheap, thanks to the exchange melas
the price differential between a 20-inch B/W set and a 14-inch CTV
Crown, BPL, Videocon and Salora are the leading players in the B/W
During the year, the price of picture tube has gone up from Rs 430
performance is poor.
started selling and growing in the late 1980s still sell the largest,
accounting for around 80% of the total market. This has been due to
(for each wash cycle, the water is changed 2-3 times). Most Indian
of late with many new entrants making their foray into this segment.
segment.
MNCs, after initially targeting the top end of the market (as only 5 kg
Brand % share
Videocon 25
BPL 17
Onida 3
OTHERS 55
years ago, is now half to 25%. This is one of the reasons why the
washing machine segment has not grown. The leader has been
unable to lead well. The company has not made any fresh
investment and has not launched nor advertised any new models.
BPL is also not doing very well although presently, there is a lot of
BPL Sanyo Utilities. The new company will concentrate on the white
3%
17%
55%
25%
SWOT ANALYSIS
STRENGTHS
Strong brands
Now the Indian consumer has a greater choice for the foreign
WEAKNESS
under utilized
OPPORTUNITIES
country.
THREATS
economy. A few years back, the economic tigers of Asia have faced an
which has become a member in the year 1995, and hence the
are flooded with the various brands like BPL, LG, Onida, Samsung,
Sony etc.
CONCLUSION
companies a big blow. MNCs that are gaining good market share
high growth rate CTV market is that now a days TV is not used as a
Inspite of many value added Service that are being offered by most
IFB Electrolux, Samsung, LG are the new entrant and gaining sales
industrial development.
realized that the core of the corporate world must change, to focus,
the first time ever in India, on the consumer. And to stop chasing
revenues, profits and market shares, which will flow only from the
There has been a slow down in the US’s economy, this has led down
influences - for instance, the advent of satellite TV, internet and the
information age bringing with them rich, real - time images and data
buyer ’s market, the marketer has not choice but no make the
Recommendations
RECOMMENDATIONS
consumers have about brands. What they really want from the
manufacturers.
MNCs
map.
Bibliography
BIBLIOGRAPHY
Books
Magazines
Websites
www. google.com,
www.indiainfoline.com ,
www.yahoo.com ,
www.webcrawler.com ,