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Submitted in Partial Fulfillment for the award of Degree of Bachelor of Business Administration



Dr.RAVINDERJIT (Project Guide)



Affiliated To:



ACKNOWLEDGEMENT Success in my endeavor calls for cooperation and guidance from seniors and colleagues. This was simply brought out to me while making this Project. A special note of Thank goes to Dr.N.K.Kakkar for his guidance while undergoing this project. I would like to convey my heartfelt gratitude to Dr. Ravinderjit for the trust she showed in me in assigning me an important and interesting project by sparing time for me from her busy schedule to discuss and clarify various issues connected with this project, for her friendly advice and the motivation she provided me in the completion of the project. It was an enlivening and worthwhile experience to work on Videocon International Ltd. My Thanks would be incomplete without Thanking Almighty God for his superlative support and blessings.

Prabhpreet Singh (0921471707)

This is to certify that PRABHPREET SINGH has completed his project report entitled products and services of Videocon as a part of partial fulfillment of B.B.A (Gen) programme from Maharaja Agrasen Institute of Management Studies, affiliated to Guru Gobind Singh Indraprastha University, under my guidance and his work is original.

Dr.Ravinderjit Project Guide

Table of Contents
S.No. 1 1.1 1.2 2 TOPICS Executive Summary Introduction >Overview >Objective Company Profile
History Customers, Corporate and Videocon Ambitions and Technology Success Stories Visionary Videocon Landmarks

PAGE No. 1 2 2 3 4
4 5 7 11 13 14

3 Research Methodology 4 Analysis and Findings 5 Threats of Entrance 6 Distribution Channels 7 Recommendations & Suggestions Bibliography42 Annexure..43

15 16 25 34 41

I have decided to present PDCS minor Project on Videocon after studying its Product Range and Services. I worked on Refrigrators of Videocon India Ltd. . I have chosen Videocon for many reasons. It is one of the biggest Indian Electrical brands not only in India but also globally. Indeed, Videocon is one of the fastest paced Electrical Products worldwide. Videocon thus posed an exciting opportunity to study a brand that is automatically associated with youth and technology. I worked on Videocon in order to understand the various aspects of its marketing strategy that has made it the Number 1 MNC of India. I focused on its strategies in Refrigerators in comparison with LG, Samsung, Godrej and Whirlpool.

1.1 OVERVIEW Videocon Industries Ltd. was one of the initials company that made it to the World. Videocon Electricals captured the initial Indian Electrical market and topped the charts for its products such as Refrigerators, television etc. before other players such as Samsung,Whirlpool etc .entered Indian market. Videcon was one of the first Electronic Company to Collaborate with Japanese Toshiba Ltd as early as 1985.

1.2 OBJECTIVE Videocon is a company hard to pass by as it was one of the few Indian Companies to be listed in Fortune 500 beside being initial Indian MNC. With its wide range of electrical product range I choose the one that has kept the Indian cools in enthralling summers Refrigerators. The Hot and Humid weather of the country had made many Korean and Americans countries to walk into Indian market earlier captured by Indian Electronics Giant Videocon. The effect on Videocon and its strategy thus become my area and/or object of study,

COMPANY PROFILE HISTORY A Man of ideas. A man of substance. A man of vision, Shri Nandlal Madhavlal Dhoot, the founder of the Videocon group, completed his education in Ahmednagar, Pune and in Maharashtra, India. A successful sugarcane and cotton grower, he boldly ventured forth and imported machinery from Europe, setting up the Gangapur Sakhar Karkhana (Sugar Mill) in 1955, at a time when the village had no electricity, thereby unleashing an industrial revolution. The die was cast. Over the years, Nandlalji's pioneering spirit found expression in a myriad ways, earning him the well-deserved reputation of the doyen of industrial activity in Marathwada, India. In early 80s, Nandlalji initiated his three sons Venugopal, Rajkumar and Pradeep into the business. Through a technical tie-up with Toshiba Corporation of Japan, he launched India's first world -class Colour Television: Videocon.

Today, Videocon is a household name across the nation - India's No.1 brand of Consumer Electronics and Home Appliances, trusted by over 50 million people to improve their quality of life. Customer, Corporate and Videocon Corporate Overview The Videocon Group is committed to create a better quality of life for people and furthering the interests of society, by being a responsible corporate citizen. Creating Happiness We will bring happiness into every home, offering high quality consumer durables at affordable prices, spreading the culture of convenience, entertainment and comfort, far and wide. Achieving Progress We will pursue innovative technologies in the fields of Electronics and Energy, create products and services that will improve the quality of life, realize the goals of the world community and protect the environment.

Sustaining Growth We will be a source of pride to our business associates by ensuring mutual prosperity and growth through the implementation of forward-looking corporate strategies, aimed at identifying opportunities and responding intelligently to the dynamics of change. Pursuing Excellence We will provide a conducive environment for enabling our employees to develop their potential and make a significant contribution to the Group's success. In 1985, through a technical tie-up with Toshiba Corporation of Japan, Videocon International Limited launched India's first world class Color Television. Today, Videocon International Ltd., the flagship company of the Videocon Group, is India's leading manufacturer of Consumer Electronic products. Fired by a passion for innovation, Videocon has kept pace with the changing face of technology, constantly upgrading its manufacturing facilities to incorporate advanced technology and high

standards of quality into its product range, right across the spectrum. AMBITIONS and TECHNOLOGIES Technology with a Heart Committed to giving the consumer the best the world has to offer, Videocon has developed near zero wastage technology which helps reduce manufacturing costs by optimizing material inputs. Coupled with quality-consciousness at every stage, the consumer benefits enormously by getting premium products at affordable prices. The company currently manufactures Colour TVs, Black & White TVs and Audio products. At its modern plant at Chitegaon and Aurangabad, the Company has also undertaken complete backward integration to manufacture all critical and important components of its products, such as Electronic Tuners, FBTs, ATDMs and Deflection Yokes, thereby reducing costs, ensuring quality control and becoming vertically integrated. It has

set up a unit at Gandhinagar in Gujarat for manufacturing Black & White TV picture Tubes. The Sound of Excellence Videocon produces a sophisticated range of Home Audio Systems, Stereo Radio, Recorders and Personal Stereos, as well as the contemporary international range of Kenwood Digital Hi Fi Systems. First with the Best Continuous upgradation and indigenous manufacturing has been and continues to be an integral part of the company's philosophy. Perceived as an innovator in its field, Videocon has notched up the many world's exciting most firsts, by exploring advanced

technologies. In Colour TVs, Videocon was the first Indian Company to introduce Picture-InPicture, Turbo Sound, Surround Sound, Larger Screen Sizes, the Full Flat Square Tube, Bazooka technology and the Freedom series :

affordable high quality range of Colour TVs for the price-conscious consumer. Global Ambition Looking beyond India, Videocon is now a global player, acknowledged by the world. It is the first Indian company to win the prestigious CE approval for exporting its Colour TV to Europe. Videocon is now entering world market with its operations in the Middle East, Europe, Indonesia and South Africa. Videocon Narmada Glass (VNG): a division of Videocon International Ltd., has the distinction of having set up India's first plant for the manufacture Television collaboration of with Glass Shells in for Inc., Color USA Picture Tubes, Techneglas technical

(formerly known as OI-NEG TV Products Inc., USA), world leader in Glass Shell Technology. The projects in 1990, when the then Prime Minister of India, the late Shri Rajiv Gandhi, laid the foundation stone for the project.

The Videocon Group, with the objective of backward integration, joined hands with Gujarat Narmada Valley Fertilizers Co. Ltd., (GNFC) for the implementation of this 100% import substitution project, the largest investment (Rs. 450 crores) in electronic component industry in the country. The plant, with an installed annual capacity of 1.7 million Glass Shells for Color Picture Tubes and 0.25 million glass Bulbs for Black & white Picture Tubes and Monochrome Monitor Tubes, is located at Village Chavai, District Bharuch, Gujarat.

SUCCESS STORIES The Heights of Success

VNG has some remarkable achievements to its credit, starting with the successful absorption of sophisticated technology from Techneglas Inc., USA. The CTV Glass Shells manufactured by VNG are at par with international standards and the Color Picture Tubes made with VNG glass have already received VDE approval. The facilities include a state-of-the-art Tool Room and Mould Shop to manufacture and maintain its mould requirements. Having initially successfully established its 20V, 19V and 13V CTV glass parts, VNG has now developed the 20V 2R the latest models. A Picture Perfect Future Till 1994, Indian manufacturers of CTV Picture Tubes were importing Glass Shells. VNG's production has replaced these imports, thereby saving almost Rs.200 crores of precious foreign exchange every year. VNG has now surpassed the norms of performance guaranteed by the collaborator, Techneglas Inc., U.S.A. and is operating the plant with 150% capacity utilization - with efficiencies exceeding international standards. Where fields of sugarcane grow tall and

proud. Where bushes of cotton bud blooms. Where tourists flock to the world-famous caves of Ajanta and Ellora. Where India's NO.1 Consumer Electronics and Home Appliances take shape, to take millions of Indians into a better, brighter future. This is Marathwada, India, where the Dhoot family launched Videocon International Limited in 1984, with the avowed purpose of producing world-class Colour Television through a technical tie-up with Toshiba Corporation of Japan. Within a decade, Videocon emerged as India's leading brand of both Colour and Black & White Televisions and continues to dominate this highly competitive market. The leader innovates. The leader forges ahead. The leader breaks new ground. Harnessing the advanced technology, relentlessly pursuing quality to achieve various international standards of Quality Control. Breaking through, time and again, with innovative products for a better life. VISIONARY VIDEOCON

Profiles of Leadership Futuristic Neuro Fuzzy Logic Washing Machines, User-friendly - No-Frost Refrigerators, the very latest music systems. The most sophisticated Colour Television and VCRs. High-Tech Air-conditioners. Videocon today, is a multi-faceted group, with 9 state -of-the-art manufacturing facilities all over India. Highly qualified engineers, trained in Japan, backed by 6500 technical and support staff, work together in close unison to produce India's leading branch of consumer electronic products and home appliances. Leadership through People Videocon lays great emphasis on the training and development of its work force, providing every opportunity for growth and advancement, including training stints overseas.


1995 was a landmark year for Videocon. It clearly reaffirmed its leadership in Color TVs, Black & White TVs, VCRs and VCPs, Washing Machines as well as No-Frost Refrigerators. Then Videocon began to reach out to the core. To industries at the heart of a nation: Petroleum, Power, Construction and Housing. Leading India into the future, with Confidence, with determination, with a commitment to excellence, rooted in the pioneering vision of a path breaker.

RESEARCH METHODOLOGY The methodology followed by the researcher, during the preparation of the report was collection of data thorough SECONDARY SOURCES When an investigator uses the data that has been already collected by others, is called secondary data. The secondary data could be collected from Journals, Reports, and various publications. The advantages of the secondary data can be It is economical, both in terms of money and time spent .The researcher of the report also did the same and collected secondary data from various internet sites like and and many more. The researcher of the report also visited various libraries for collection of the introduction part.


COMPARISON WITH OTHER COMPANIES REFRIGERATOR INDUSTRY AT A GLANCE Refrigerators are being manufactured in India for the last four decades. Till early nineties only direct cool refrigerators were used in India. Videocon introduced frost-free refrigerators in 1991. In 2005-06 the market was as follows:

1 0.8 0.6 0.4 0.2 0 Price

% Mkt. Share

Direct Cooling

Direct Cooling Frost Free

Segment Share Direct Cooling Frost Free


% Market

Low 85% 35-40% more than DC 15%

Based on the Capacity and price the market was divided as follows in 2005-06

Segment Top High Medium Low

Price >20000 15-20000 Upto 15000 <8-9000

Capacity % Share >300 Ltrs 3% >230 Ltrs 7% 165-230 Ltrs 85% Upto 90 Ltrs 5%

In 2005-06 the penetration levels were approx. 9%

In 2005-06 the demand distribution as per the Income class was as follows:

Income Class Low Lower Middle Middle Upper Middle High

Penetration % 0.7% 5.3% 19.8% 43.5% 59.9%

Total was as follows:


In 2005-06 the demand distribution as per markets Urban Penetration % Share of Purchase% 25.23 75.7 Rural 2.04 24.3 Total 8.61 100

Past trends Demand for refrigerators grew from 11,000 units in 1968-69 to about 2.25 million units in 1996-97 Demand for refrigerators has grown at a CAGR of around 22% from 1.04 mn units in 1992-93 to 2.18 mn units in 1997-98. The total stock went up from 3.3 million units in 1968-69 to 17.2 million units in 1996-97, but still

covering only about half of the total households in middle and high-income groups.

Current Scenario The current demand for refrigerators is approx. 2.9 mn units per annum. The 165-200 Ltrs of refrigerators comprise of 80% of the total demand. Frost Free refrigerators contribute 15% of the total demand with 5% coming from the premium range. The market structure is as follows:

Segment North East West South Rural Urban Household Institutional

Share(%) 25% 14% 32% 29% 25% 75% 85% 15%

The replacement demand is about 20% of the total demand and shows preference for larger and technically advanced models.







increasing rapidly. Feature based differentiation and various price points for same capacity emerge in the top and high categories. Some of the features, individually or together are used for differentiation. No and type of doors. Crushed ice and water dispenser Quick chilling zones Multiple temperature zones Adjustable racks and shelves Multiple use compartments Refrigerant CFC free Vs CFC Energy efficient compressor Freezer space vis a vis Refrigeration space Future Trends Replacement market is expected to increase to 2530% on account of faster replacement (further induced by exchange scheme).

Refrigerator market is expected to grow at a CAGR of 14% in the medium term aided by the rising per capita income and growing consumerism. The demand for refrigerators is expected to be about 3.6 million units in 2005-06 with a penetration rate of about 13% As specified by the Montreal Protocol the use of refrigerants such as CFC-11 and CFC-12 need to be phased out by 2010. ******************************************** *******





The leading companies in the market with their market share in first half.


MARKET Sales(Units) 199000


21000 12% SAMSUNG 25.7% 25000 14.3% LG 22.7% 8000 4.6% GODREJ 11.5% 25000 13.8% 178000 349000 396000

BPL 5.5%

85000 83000

7.4% WHIRLPOOL 0.7% 7000 4.0% ELECTROLUX 0.5% 8000 4.6% OTHERS TOTAL 100% 313000 1535000 180000 100% 20.3% 8000 10000


Barriers of entry Economies of scale: The players like Godrej, BPL , Whirlpool, Videocon and Electrolux have achieved economies of scale. Godrej has a capacity utilization of 75% and the highest capacity in the industry. This declines their unit cost of every function of business and enables them to keep their prices low. This will force the entrant to come in at a large scale and risk strong reactions from them or come at a small scale and accept a cost and price disadvantage. Godrej also possesses economies of vertical integration as it manufactures its own compressors, which constitutes a substantial part of the manufacturing cost. The other players like BPL and Videocon who are currently outsourcing their compressors also plan to set up their own manufacturing units for compressors in the long run. Product differentiation: The companies like Godrej, BPL and Videocon, being very old players in the Indian market enjoy high brand

awareness and consumer loyalties. These brand names are associated with trust and reliability in the Indian market. The Korean players like LG and Samsung who engaged in heavy advertising and brand promotion during the last year have also created a niche for them in the premium segment. Their brand awareness has grown tremendously after the recent Cricket World Cup Tournament, during which they advertised heavily. These create a barrier to entry by forcing the entrant to spend heavily to overcome existing consumer loyalties and to build a brand image. Capital Requirements: Huge Capital requirements are posed in front of the new entrant in terms of advertising, product development, start-up losses. Access to the distribution channels: Production facilities, Distribution

channel credit, inventories and for covering up the

The Indian players like Godrej, Videocon and BPL which are catering to the mass market have a strong distribution and dealer network.. They have a presence in the urban as well as the rural areas. Moreover these companies have established developed ties with the channel members over the period of time, which are hard to break. Whirlpool has also developed a strong network of 4000 dealers in urban and semi urban areas in a period of few years. The South Korean Majors like Samsung and LG have a dealer network of more than 1500, mainly in urban areas and plan to expand it in rural and semi urban areas also. This poses a major threat in front of the new entrant as the existing firms already serve the channels and the new entrant will have to persuade the channels to accept its product through high margins, promotional allowances, better credit facilities and advertising support, which will reduce the profits. Cost disadvantage independent of scale

Learning or Experience curve: The old players like Godrej, BPL, Videocon are high on the experience curve, as they know the Indian Market well. This Experience lowers their costs in production, marketing, and distribution and in other areas of business, thus giving a cost disadvantage to the new entrant. Government policy: The Government policies of levying duties on the imported Refrigerators and refrigerator parts gives an advantage to the Indian Players and in a way protect them from price competition in the market with the MNCs. Expected retaliation: The industry as a whole faces excess capacity and the supply exceeds demand and so the existing competitors are expected to respond forcefully to a new entrant. The new entrant will face competition based on the segment to which it tries to cater If the company enters in the Direct cool segment Godrej and Whirlpool will pose the major threat.

If the company enters in the Frost free, high capacity segment (above 300 Ltrs) it will have to face main competition from LG, Samsung, BPL and Whirlpool. 2. INTENSITY OF RIVALRY AMONG THE EXISTING COMPETITORS. The companies in the Refrigerator industry of India can be divided into four strategic groups based on the price and the perceived quality of the products. These groups also differ in their target segments and the strategies adopted to cater to it. High Quality High Price Medium Price Low Price 1.PREMIUM 2. HIGH3.SUPER VALUE STRATEGY (1)LG, Samsung, Moderate 4.OVER Perceived CHARGE Quality Low STRATEGY (2) Whirlpool, 6.GOOD VALUE STRATEGY (4) Videocon 9.ECONOMY STRATEGY BPL 5. MEDIUM VALUE




Quality STRATEGY 5) Voltas 1. LG, Samsung: This strategic group includes the South Korean MNCs. These are the players who are operating only in the frost-free segment and carry a large product length. They have products only in the above 300 Ltrs segment. These brands follow the Premium strategy of high quality at high price. They are targeting to the upper income as well as the higher middle class of the society with the products that are associated with status. These companies have shown a tremendous growth in few years. 2. BPL, Whirlpool: BPL, the market leader in the Frost-free segment and Whirlpool of India, the subsidiary company of the US giant Whirlpool form this group. They have frost-free models in the below 300 Ltrs capacity segments as well as the above 300 Ltrs segment. The models in above 300 Ltrs segment cater to the replacement market and to the higher middle class. These aim at providing high quality at a moderate price.

The models in the below 300 Ltrs are targeted at the first time buyers of middle class and are not high in price. 3. Godrej: These are the old brands of India, which have high brand awareness and presence in urban as well as the rural Markets. These are mainly serving to the Direct cool segment and have few models in the frost-free segment. These brands are catering to the middle class and are not very high in prices. 4. Videocon: This is the company, which introduced Frost-free refrigerators in India. The products are value for money products. With the lowest prices in the market it is catering to the middle class of the society. 5. Voltas: These companies cater to the middle and lower middle class of buyers with their low priced ranges. The companies in the market witness a tough competition from the other members of its strategic group as they fight for the same chunk of the market. As their products do not differ much in the features,

they try to differentiate their brands through copy differentiation in advertising. The competition intensifies as most of the companies are using the same dealer network to distribute their products. They lure the dealers to promote their product by different strategies on margins, incentives and credit and payment terms. The competition increases as all the companies have high Strategic stakes in the Refrigerator Business. A major fraction of their revenues come from this business and so they retaliate sharply to any move of the competitor. The industry has high Exit Barriers for the members who have invested in the manufacturing facilities in India in the form of specialized assets. 3. PRESSURE FROM THE SUBSTITUTES The domestic refrigerators have no substitutes and so it faces no threats in terms of that.


The bargaining power of the consumers is high due to the presence of many competitive products in the market. The refrigerator models available are not much differentiated in terms of the features, and so the buyers can switch between the different brands based on other criteria like Price, service, warranty, promotion and financing schemes. 5. BARGAINING POWER OF THE SUPPLIERS. Not very High





The Refrigerator companies in the industry use different distribution channels to reach the customer. These are as follows:

1. In this type of channel the company uses its sales representatives to deal with the dealers directly. The dealers place the order through the sales representatives who visit them periodically, and the products are delivered directly from the company. Some companies appoint Direct Dealers who act as their Franchisee Outlets or their Exclusive showrooms. BPL uses this channel


In this channel of distribution the company distributors on the basis of District/


Population /No of Dealers to be handled by one distributor. The area of operation and its potential is also taken into consideration. Some of the companies make the distributor totally responsible from appointing the dealers to providing after sales service.

Godrej use this channel


In this channel of distribution the company

appoints Distributors as well as Direct Dealers. The company appoints distributors to deal with small dealers who order small quantities. With the dealers who have good potential and sales the company deals directly. Videocon and Samsung use this channel: The Korean Multinational follow this channel where they appoint Distributors for upcountry towns and direct dealers for big cities and major towns eg. Ahmedabad.


In this channel the company appoints a C&F agent

who acts on behalf of the company. The C&F agent is totally responsible for appointment of Distributors and Direct Dealers. He sells to both the Distributors and the Direct Dealers at the same rates.

Strategic group mapping of industry players:

ADVERTISEMENT OF VIDEOCON ON MEDIA Headline: Hidden in the new Videocon 290L are six refrigerators. Subhead: Bodycopy: Ice Twist Fastest ice maker. With just a simple twist you can collect ice cubes in the tray. Dura Fresh A long lasting platinum deodoriser that adsorbs bad odours and noxious gases. Green House The ceramic additives present in the vegetable tray increase the life of the vegetables by preventing moisture loss and vitamin degeneration. Chill Zone The spacious chiller maintains a temperature that's around freezing point, to ensure maximum freshness. Sensi-flow System The automatic thermostat controller in the advanced multi-air flow system ensures optimum and uniform cooling. CFC-free Our compressor uses an environment friendly gas to ensure a better future.

Buying the new Videocon 290L frost-free multi-fridge is as good as getting six others. While the other fridges just have a few specialities, Videocon has everything.


Freezer should be small No crystal, grill shelf should be there No MRP is written. So MRP should be written Date of manufacturing is not written Model change should be there constantly Double door refrigerator should be provided. In todays world of competition, the company should pay more attention towards: Best sales service Displays In festivals we do promotions 0% finance Exchange offer High incentives 0% interest Carry back scheme

Philip Kotler for Marketing Management
NIS Study Material for Marketing Management NIS Study Material for Marketing Research

Baseline: Bring home the leader

Headline: Over Cool. Under Cool. Perfect Cool. Subhead: The only refrigerator that adjusts the temperature to ensure perfect cooling. Bodycopy: The Videocon frost-free refrigerator with the breakthrough Sensi-flow technology. The perfect

cooling system that keeps food fresh and nutritious by ensuring continuous circulation of cool air through the many vents inside. What's more, the refrigerator also has the sensi-control system. An intelligent device that senses even the slightest rise in temperature; when you place a hot dish inside the refrigerator, with that the air vents open and the rush of cool air inside brings the temperature down to the required level. That's science at work for you, ensuring you and your family eats fresh food and stays healthy. Baseline: Bring home the leader AGENCY: Quadran

Product Range:



Videocon brings to you the best of products from their Consumer Electronics stable which includes Plasma TV, Projection TV, Color TV, Internet TV and loads of other masterpieces and therefore we offer you Technology for Health and Pleasure. Home Appliances Videocon has ushered in a revolution making waves in millions of homes by virtue of its entire range of state-of-art Home Appliances.

PRODUCTS OF VIDEOCON Refrigerator Home Direct Cool Frost free Water matic Washing Machine Home Air Conditioner Home Microwave Home RNV271 Back DIGITAL SENSI FLOW DURAFRESH PLATINUM DEODORISER GREEN HOUSE CRISPER SIX YEARS WARRANTY





















D380MF No Frost Multi Flow System Antibiotic New Edge Deodorizer Door design

New Style Vertical Handle 6 Years Warranty