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8/8/2019 Amitesh Mishra Dissertation
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2 nd step:
Questionnaire: In questionnaire i have drafted 10 questions to
check the risk factor of people. Questionnaire which i have drafted
is objective.
3 rd step:
Survey A part from questionnaire i have done surveys
Secondary data collection methods
● websites
● annual report
● magazines/journals
● News papers/business magazine
Tools and techniques:
There are two types of tools and techniques are used for the data
analysis. These are: -
•
Accounting tools : - Here we can use trend analysis,
comparative study or common size method etc.
• Statistical tools: - Here we can use graphs, pie -
charts, bar charts etc.
In this research study we have used both accounting as well as
statistical tools. These are: -
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• Accounting Tools: - Comparative Study
•
Statistical Tools: - Pie charts and bar charts and graphs.
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LIMITATIONS
• sample was small
• limited to a particular regin
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SWOT ANALYSIS
Strengths
1. Presence of established distribution networks in both urban
and rural areas
2. Presence of well-known brands
3. In recent years, organized sector has increased its share in
the market vis a vis the unorganized sector.
Weaknesses
1. Demand is seasonal and is high during festive season
2. Demand is dependent on good monsoons
3. Poor government spending on infrastructure
4. Low purchasing power of consumers
Opportunities
1. In India, the penetration level of white goods is lower as
compared to other developing countries.
2. Unexploited rural market
3. Rapid urbanization
4. Increase in income levels, i.e. increase in purchasing power
of consumers.
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5. Easy availability of finance
Threats
1. Higher import duties on raw materials imposed in the
Budget 2007-08
2. Cheap imports from Singapore, China and other Asian
countries
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CLASSIFICATION OF CONSUMER DURABLES
SECTOR
Consumer durables Sector can be classified as follows:
1. Consumer Electronics includes VCD/DVD, home theatre,
music players, color televisions (CTVs), cameras,
camcorders, portable audio, Hi-Fi, etc.
2. White Goods include dishwashers, air conditioners, water
heaters, washing machines, refrigerators, vacuum cleaners,
kitchen appliances, non-kitchen appliances, microwaves,
built-in appliances, tumble dryer, personal care products,
etc.
3. Moulded Luggage includes plastics.
4. Clocks and Watches
5. Mobile Phones
The consumer durables market in India is valued at US $ 4.5
billions currently. In 2006, microwave ovens and air conditioners
registered a growth of about 25%. Frost-free refrigerators have
registered significant growth as many urban families are replacing
their old refrigerators. Refrigerator sales amounted to 4.2 millions
in 2006, whereas the production of the refrigerators went up by
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17% as compared to the preceding year. Washing machines,
which have always seen poor growth, have seen reasonable
growth in 2006. More and more Indians are now buying electrical
appliances due to change in electricity scenario. The penetration
level of color televisions (CTVs) is expected to increase 3 times by
2007.
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FUTURE SCENARIO
With easy availability of finance, emergence of double-
income families, fall in prices due to increased competition,
government support, growth of media, availability of disposable
incomes, improvements in technology, reduction in customs duty,
rise in temperatures, growth in consumer base of rural sector, the
consumer durables industry is growing at a fast pace. Given these
factors, a good growth is projected in the future, too.
The penetration level of consumer durables is very low in India, as
compared with other countries. This translates into vast
unrealized potential.
For example, in case of color televisions (CTVs), the penetration
level of various countries is:
India 24%
Brazil 11%
China 98%
US 333%
France 235%
Japan 250%
Demand and Penetration Level of White Goods in India
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1995-1996 2005-2006 2009-2010
Demand 3.43 million 8.72 million 13.14 million
Penetration
level
149 per 1,000
households
319 per 1,000
households
451 per 1,000
households
In a study conducted by Frost & Sullivan and commissioned by
India Semiconductor Association (ISA), the demand for Electronic
Appliances is projected to grow exponentially at a compounded
annual growth rate (CAGR) of 30%.
In billions
SCOPE
In terms of Purchasing Power Parity (PPP), India is the 4th
largest economy in the world and is expected to overtake Japan in
the near future to become the 3rd largest. Indian consumer goods
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market is expected to reach $400 billion by 2010. India has the
youngest population amongst the major countries. There are a lot
of young people in India in different income categories. Nearly
two- thirds of its population is below the age of 35, and nearly 50
% is below 25. There are 56 million people in middle class, who
are earning US$ 4,400- US$ 21,800 a year. And there are 6
million rich households in India. The upper-middle and high-
income households in urban areas are expected to grow to 38.2
million in 2007 as against 14.6 million in 2000.
Rural sector offers huge scope for consumer durables industry, as
it accounts for 70% of the Indian population. Rural areas have the
penetration level of only 2% and 0.5% for refrigerators and
washing machines respectively. The urban market and the rural
market are growing at the annual rates of 7%-10%and 25%
respectively. The rural market is growing faster than the urban
market. The urban market has now largely become a product
replacement market.
The bottom line is that Indian market is changing rapidly and is
showing unprecedented business opportunity
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CONSUMER MARKETS
Last Updated: February 2009
Sustained Momentum
As rapid socio-economic changes sweep across India, the country
is witnessing the creation of many new markets and a further
expansion of the existing ones. With above 300 million people
moving up from the category of rural poor to rural lower middle
class between 2005 and 2025, rural consumption levels are
expected to rise to current urban levels by 2017. Such
developments in India's markets are expected to create major
opportunities for Indian companies and multinationals (MNCs)
alike and further fuel consumer demand in India.
Despite the gloom in the global markets, India will continue to be
the second fastest growing economy in the world and according to
the Indian Minister for Commerce and Industry, Mr Kamal Nath,
the Indian economy may well grow at over 7 per cent in 2008-09.
According to a study by the McKinsey Global Institute (MGI),
Indian incomes are likely to grow three-fold over the next two
decades and India will become the world's fifth-largest consumer
market by 2025, moving up from its position in 2007 as the 12th-
largest consumer market.
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Further, according to the National Council for Applied Economic
Research (NCAER) estimates, by 2012, only 14 per cent
households in India will have annual household incomes of less
than US$ 921.66, from 58 per cent in 1995-96 and 25 per cent
currently.
In an analysis (carried out by Economic Times) of the top 50
consumer goods and services firms, it was seen that the June
quarter of 2008-09 saw a sales growth of 24 per cent (year-on-
year) compared to last year. The firms included in the analysis
were from sectors like automobiles, textiles, fast moving
consumer goods (FMCGs), consumer durables and retail among
others. Sales of daily consumption items went up by 5-10 per cent
and the FMCG business increased by 18.8 per cent, while the
consumer durable segment also recorded strong volume growth in
the second quarter of the 2008-09 fiscal.
Moreover, approximately 315 hypermarkets are expected to come
into existence in tier-I and tier-II cities across India by the end of 2011, riding on the boom in organised retail sector, says a joint
study by consultancy firm KPMG and industry body, ASSOCHAM.
The study states that 212 Indian towns are capable of sustaining
the development of such hypermarkets in 2008.
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Despite the prevailing gloom across global markets, Indian
consumers and companies continue to be a confident, optimistic
lot, with most Indian companies denying any cutbacks from
consumers.
"At both Big Bazaar and ezone, we've seen good growth of about
25 to 30 per cent on a same-store basis," said Manoj Kumar, CEO
of Future Group's ezone. In fact, expensive products like LCD
televisions and laptops are witnessing higher growth than their
cheaper counterparts.
On similar lines, V Ramachandran, LG Electronics' Sales and
Marketing Director, said, "We have not witnessed any pressure so
far. In fact the festival period saw a growth of 40-50 per cent."
Mayank Pareek, Executive Officer, Marketing and Sales, Maruti
Suzuki India, said, "We've seen four distinct phases in 2008. April
to June went okay; August to October saw some weakening. Then
October was huge, with the highest ever retail sales. Then again
November sales dropped only to again rise in December".
In the FMCG sector players continue to report good sales figures.
Marico's CEO-Consumer Products, Saugata Gupta, said, "In our
categories, we've seen no drop."
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Rural Consumers
Rural India has provided a beacon of hope to India Inc amidst the
prevailing economic slowdown. Buoyed by a plenteous harvest,
liberal loan-waivers and a growing middle class, the rural
consumer is spending like never before, with FMCG, cars, two-
wheelers and consumer durables accounting for a significant part
of his spending. Dr Rajesh Shukla, senior fellow at the National
Council for Applied Economic Research (NCAER) said, " Most
corporate who have expected sales of 30-40 per cent from the
smaller markets now hope to net in more than 60 per cent of their
sales turnover from rural India."
FMCGs have seen over 20 per cent demand in rural markets
ahead of the 17-18 per cent growth in urban India. According to
AC Nielsen, mainstay categories like hair oils, toothpastes,
shampoos, skin creams and lotions, and even candies saw more
growth in rural markets than urban.
Beverage major Coca-Cola India has already introduced a large-
scale retail programme tailor-made for tier II and tier III towns.
Similarly, LG, Samsung, Sansui, Philips, Maruti, M&M, Tata
Motors, Hero Honda, Nestle and P&G are other major corporates
who are increasing their rural focus.
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In spite of the economic slowdown, the Indian FMCG industry is
likely see robust 15 per cent growth in the third quarter of 2008-
09 against the corresponding period last year.
Adi Godrej, Chairman of the Godrej Group, said, "The overall
FMCG market, both urban and rural, have recorded robust growth
rates."
"I think the Indian FMCG industry's sales growth should be good
in Q3. My expectation is that the industry will register a 25 per
cent sales growth in Q3 2008-09," he further said.
According to a FMCG sectoral report by Angel Broking, an analyst
firm, companies will be seeing profits in terms of margin
expansions due to the correction in global commodity prices.
Further, IDFC SSKI Securities has predicted a revenue growth of
18 per cent in the third quarter of 2008-09.
In rural areas, companies like ITC, Godrej Agrovet and DCM
Shriram among others are growing rapidly in rural areas and, in
fact, may outdo their urban counterparts like Reliance Fresh and
the Future Group-owned Food Bazaar chain.
Tremendous growth is being recorded by value-added and
aspirational products. These products are estimated to propel the
FMCG industry to grow by 16 per cent (in sales) during 2008-09,
compared to 14.5 per cent during 2007-08.
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Another promising trend is the growth of 'out-of-home
consumption', which is emerging as a new section in the FMCG
sector. With changing lifestyles, the concept of three core meals
fast vanishing, companies like Coca Cola India, ITC, and Dabur
are venturing into this market and are bringing out new product
packaging for the segment.
Significantly, several Indian FMCG companies have also been
aggressively exploring global markets through both acquisitions
and alliances. In 2008, four major acquisitions were made by
three firms—Godrej Consumer Products (GCPL), Emami and
Dabur.
In the past three years, they have acquired about 15 companies
and have spread their presence in more than a dozen countries.
Luxury Products
With the rapidly increasing number of millionaires in India, the
market for luxury brands is growing annually at a compound
average growth rate (CAGR) of about 35 per cent.
According to a FICCI-Yes Bank report, India is set to become a
manufacturing hub for global luxury brands over the next four to
five years. The report stated that with the core strengths in
India's manufacturing sector, the manufacture of luxury items in
India can grow to US$ 500 million. The luxury products market in
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India was estimated in excess of US$ 500 million and is likely to
grow at a CAGR of 28 per cent to reach US$ 1.2 billion by 2010.
The market is expected to double by 2015, touching US$ 2.5
billion.
Global brands like Louis Vuitton and Frette are planning to set up
their manufacturing base in India.
Car imports fell in 2008, with consumers choosing to buy Indian
made models by foreign car makers. From 5,000 units in 2006,
7,500 luxury cars were sold in 2008. The market is likely to
further grow to 10,000 units by 2010. Leading luxury car makers
like Mercedes-Benz India, BMW and Audi are expecting improved
sale figures in 2009.
Industry experts believe that the top-end consumer electronics
segment in India is growing by 8-10 per cent annually.
Consumer Durables
A combination of changing lifestyles, higher disposable income,
greater product awareness and affordable pricing have been
instrumental in changing the pattern and amount of consumer
expenditure leading to robust growth of consumer durables
industry.
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According to a snap poll carried out by the Confederation of Indian
Industry (CII), 92 per cent the CEOs surveyed were expecting
sales to increase by 10 per cent during 2008-09.
A flurry of hi-technology durables are expected to be introduced in
the US$ 4.09 billion Indian durables market by March-April in
2009. Samsung, LG, Haier and Videocon are among companies
planning new product launches in the coming months.
Korean major Samsung is planning to launch LCD-led live emitting
diode (LED) TVs at US$ 1433, and Blu-ray technology home
theatres and cameras in 2009.
Pranay Dhabhai, Director and CEO , Haier Appliances India, said,
"For the coming season, we plan to import 'dual-tech' larger
capacity (two-door, four-door and six-door refrigerators) from our
US-based factory. Besides, we will also launch ACs with a new
look and feel."
Videocon Industries will also launch high-end LCD TVs and plasma
TVs, along with air conditioners with technological compressors
and new designs.
Similarly, LG Electronics India is also planning to introduce air
conditioners with new technology compressors and revamped
designs.
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Shantanu Das Gupta, Vice President-marketing, Whirlpool of India
Limited (WIL) revealed, "We plan to increase WIL's market share
across the four categories of home appliances to 20 per cent plus
by 2010 with more emphasis on washing machines, air
conditioners and microwaves where we are not as strongly
positioned as in the refrigerator category." "In the product
development area the investment in India, across all category, will
be in the region of US$ 25-30 million in the next two years,"
added Dasgupta.
Whirlpool is targeting a 22 per cent share of the US$ 430.23
million washing machine market in India by the end of 2009 and
is launching a range of new products with an investment of US$ 4
million for the same.
Automobiles
Presently, India is the second largest two-wheeler market in the
world, the fourth largest commercial vehicle market, the 11th
largest passenger car market and is expected to be the third
largest automobile market by 2030.
During April 2008, sales rose by more than 17 per cent in the car
segment, while sales in the utility-vehicle segment rose by 31 per
cent, compared to the corresponding month last year.
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Maruti Suzuki, India's leading automaker registered a 20 per cent
net sales growth for the June 2008 quarter and it also posted 12
per cent growth in volume terms. Even Hero Honda registered
double digit growth in its volume shipment.
Even though the auto industry witnessed slowdown in more recent
times, car sales from manufacturers to dealers were expected to
stage a recovery in January 2009, after dealers took on new
stocks after selling off a huge inventory pile-up during December
2008.
In January 2009, big auto companies registered positive car sales,
reviving hopes of an upturn in demand. Maruti Suzuki India
achieved its highest-ever domestic and total sales in January this
year. Maruti's dispatches to domestic dealers increased 5.6 per
cent to 67,005 units during the month. Its last biggest dispatch of
65,216 cars took place way back in November 2007. Maruti
posted retail sales of 76,700 vehicles in December, its highest
ever, clearing the stocks piled up at dealerships.
In the luxury segment, even with the global auto industry being
affected by the economic slowdown, luxury cars have posted high
double digit growth in India in 2008.
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Mercedes Benz India has registered robust growth in 2008 with
3,625 cars (46 per cent growth), 240 trucks (53 per cent growth)
and 16 bus chassis.
BMW India sold over 2,500 units in 2008 against an estimated
2,000 units. Similarly Audi India registered a growth of 201 per
cent at 1,050 units in 2008 against 349 units in 2007.
Global auto makers are still bullish on India. Describing India as
one of the promising emerging markets Toyota Motor Corporation
is going ahead with its US$ 655.60 million second plant at Bidadi,
near Bangalore.
To drive sales, Daimler Motors, Skoda Auto and Volkswagen, are
entering the US$ 4.50 billion auto loan market in the country.
Indian auto majors, Bajaj Auto, Tata Motors and M&M are already
offering loans through their own finance subsidiaries.
Consumer Electronics
The rapidly growing consumer electronics market in India has
spurred many leading manufacturers of the world to get into
partnerships with local companies to set up shop in the country.
Companies planning to enter India include Japanese testing firm
Saki, Hong Kong's surface mount technology (SMT) company
WKK, Singapore's Mydata (SMT) and USA's Indium (solder paste).
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Supply, an electronics market research firm, has projected that
the Indian audio/video consumer electronics industry will grow to
US$ 6.59 billion by 2011, growing at a CAGR of around 10 per
cent.
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GROWTH OF NICHE SEGMENTS AND E-
COMMERCE
Companies offering niche services within lighting for example
energy-efficient lighting and interior design are witnessing growth
and are looking at fresh investments. The energy-efficient lighting
solutions market witnessed 30 per cent growth in the year 2008.
Companies like Philips Consumer Lifestyle and Bajaj Lighting are
looking at continued investments in the segment.
Likewise, the US$ 307.37 million modular kitchen segment is
seeing a growth of 40 per cent. Amongst many other companies,
H&R Johnson, a leading tile manufacturer, is also planning to
foray into the market and launch a new kitchens division.
As broadband connectivity grows in India according to the
Telecom Regulatory Authority of India (TRAI) India had 4.73
million broadband internet connections at the end of August 2008
online purchasing is growing. According to a global online survey
by A C Nielsen, a staggering 78 per cent of Indians (who access
internet) make purchases online, with credit cards being the
preferred mode of payment. Online shopping has opened up new
avenues and the survey found that books (46 per cent), electronic
equipments (29 per cent), tours and hotel reservations (24 per
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cent), videos/DVDs/games (23 per cent), event tickets (23 per
cent), clothing/accessories/shoes (21 per cent), and music (20 per
cent) are some of the categories in which Indians made online
purchases.
In fact, Indians have emerged as the third biggest credit card
users globally for online purchases.
Consumer Confidence
The Indian consumer remains one of the most upbeat globally.
The Nielsen Global Consumer Confidence study, conducted by
Nielsen, a market research company revealed that Indians are
"the most optimistic lot globally who think that their country will
be out of the economic recession in the next twelve months,"
stated the biannual report. India was at the top of the survey with
114 points, a remarkable 30 points above the global average of
84, and 51 per cent of the Indians surveyed believed that they
would be out of the recession in 12 months.
Furthermore, Indian consumers are also becoming more aware
about the finer nuances of nutritional panels and labels. According
to the Nielsen global online consumer survey, carried out by
Nielsen in April 2008, around 59 per cent Indians said that they
noticed packaged goods' labels containing nutritional information.
With 59 per cent, India tops in the Asia-Pacific region in its
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price is often a more dominant feature than fashion or design in
messaging.
So carpeting is a market few would see as ripe territory for new
media. Stay tuned as we find out more about bringing social
media to the marketing of a carpet manufacturer.
Seriously good statistics
Flooring the Consumer was launched in June 2006, and is now
ranked as #108 on the Ad Age top marketing blogs , and has
over 800 subscribers. These are seriously good statistics for a
blog of this type.
More importantly, as you'll see in the coming posts, the blog is
achieving business results. Ms. Whittemore is the Director for In-
Store Innovation for the Wear-Dated carpet fiber division of
Solutia, a $3.8 Billion company with 6000 employees. The
company manufactures nylon fibers that go into residential carpet.
Her work involves training, presentations, and thought leadership
at retail for the flooring industry.
Below, authors of the Carpetology blog. The same team "elf
themselves" at the Office Max site.
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Born out of frustration with traditional marketing
The blog was born out of Ms. Whittemore’s frustration with
traditional marketing to achieve her business objectives. “I had
been flirting with the notion of a blog actively for 9 months prior
to taking that step because I was so frustrated with traditional
marketing, had things to share with my audience of flooring
retailers and retail salespeople, and couldn’t get published fast
enough and frequently enough by the trade press.”
In addition to this challenge, there was minimal budget for a
traditional newsletter, and she felt these had become “inefficient”
as a communication tool in any event.
After attending a Columbia Business School conference on
marketing innovation, Ms. Whittemore says she realized “most of
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the people in the room not only blogged, but were also cutting
edge marketers… and true innovators.” She took her content
ideas and her sense of urgency to work, and the blog was born.
About consumers and retailing, not just carpeting
There are now three blogs as well as a Twitter feed, and Facebook
activity. The blogs each have a distinct audience. Flooring the
Consumer is targeted to the trade, and addresses topics such as
marketing to women, the retail experience and consumers in
general.
Carpetology , launched in December 2007, is a consumer blog
about all things carpet.
The third blog, The Smoke Rise Blog , is a community-oriented,
more personal blog.
While the consumers are online, not all the retailers are. There are
retailers keen to reinvent the experience, however, and these are
the ones that Flooring the Consumer reaches, and that keep the
author motivated.
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CONSUMER DURABLE MAJORS BID TO FIX
REGION-SPECIFIC PROBLEMS
Hindu business line
Friday, Feb 13, 2004
Richa Mishra
New Delhi , Feb. 12
THE consumer electronics and durables industry is now tackling
the issue of uneven growth experienced within the four regions of
the country. The industry has initiated a debate to address
stagnation and region-specific problems, a Consumer Electronics
& TV Manufacturers Association (CETMA) official said.
The market condition is largely determined by demographic
behaviour and differential tax regimes across States. The colour
television category is expected to clock sales of 9.5 million units in
2004, up from eight million units in 2003. For refrigerators, the
industry is targeting a growth of 3.85 million units, up from 3.5
million units, while for washing machines the industry is hoping to
record a sale of 1.5 million, up from 1.4 million units during the
previous year. In the microwave oven category, the industry is
targeting a growth of 2.75 lakh units, up from 2.4 lakh units in
the previous year.
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The flat TV category and the frost-free refrigerator segment are
where the industry expects to maximise growth. In fact, the Flat
TV category is expected to grow from 12-13 per cent to 20 per
cent. To attain these figures, players need to address some macro
issues, industry representatives said.
"To examine the problems faced by the industry in each region
and the factors that can push growth, we have started
brainstorming sessions among players," the CETMA official told
Business Line . The first of such sessions was held in Chennai last
December followed by another in Mumbai this January.
Elaborating on some region-specific problems, the official said,
"West zone has been experiencing marginal negative growth
compared with the North. The reasons for this includes the fact
that products are more expensive in the West zone due to higher
sales tax."
When compared with the growth of around 10 per cent in the
Northern market for washing machines and over 25 per cent in
the microwave oven category, the West zone recorded marginal
growth in washing machines and less than 20 per cent in
microwave ovens. In the CTV category, West zone experienced a
growth of 12 per cent as against a 17 per cent growth
experienced by the North.
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In the North zone, the issue of capacity fragmentation due to
exemptions enjoyed by units set up in Uttaranchal and Himachal
Pradesh is a concern. Earlier, companies used to have one plant
manufacturing more than a lakh units but due to these sops, they
have set up more than one plant, leading to economies of scale
and quality being affected. The industry has been trying to
address these issues and logistical problems. Consumer
electronics (CTVs and ACs) are not a priority when compared with
the home appliances category in the Southern market. The lowest
penetration, however, is experienced in the East. It is necessary
to maintain a healthy relationship between industry and trade, as
trade is an interface between industry and consumer, the CETMA
official said.
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CONSUMER SOCIALIZATION: HOW DO
CHILDREN BECOME CONSUMERS
To begin with, socialization could briefly be described as the
process whereby an infant gradually becomes a member of
society and acquires the skills that are required to function in the
culture he or she is born into. The child is active in this process.
This is true even of a newborn baby, which has biological needs or
demands which affect those taking care of it.
Socialization has no end. Even though it is more intense in infancy
and childhood, learning and adjusting to new situations is a part
of the whole lifecycle. In modern society we even have to go
through periods of re-socialization in some respects.
Although socialization is a process everyone has to go through, it
is not the same for every one. Boys are socialized in different
ways than girls. Families from different social classes socialize
their children in different ways. The same differences could be
discerned between ethnic communities, and so on. There are also
a lot of competing influences already in a child’s primary
socialization. Early on the family – the primary or main socializing
agency has to compete with other agencies of socialization, as
e.g. the school, peer-groups or the media.
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Consumer socialization could be defined in different ways. In
advertising research it has e.g. been defined as “the
developmental process by which young people acquire the
knowledge, attitudes and skills relevant to their functioning in the
marketplace” (Lowery & Fleur 1988, p. 410). This seems to be a
reasonable definition on an abstract level. Certainly, consumption
presupposes at least knowledge and skills. The real problem starts
when we ask what kind of knowledge or skills it is that is required
in this respect. Is it e.g. knowledge about the act of consumption,
commodities, prizes or the legal rights of consumers? It could, of
course, include all of those things, but if it does we can easily
conclude that there is no end to this2process. Or, put in other
words, if this is what is required no one will ever become fully
socialized as a consumer.
And this is, of course, true. As I said earlier socialization is an
unfinished process. This holds true for consumer socialization as
well. However, this is not a major problem when it comes to
define or understand consumer socialization from a child’s
perspective. Irrespective of the fact that consumer socialization
continues the whole life process, it has to start and develop from
a certain point in childhood. And at least one thing is certain:
although we are born with needs, we are not born as consumers,
it is something we become.
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The question is then: when does this socialization start? Obviously
there is no clear point in the development of a child that can be
depicted as the “start” or beginning of its consumer socialization.
There are two main reasons for this. The first is that every child,
at least in present days societies, is born into a social context
where consumption plays an important role. The second is that it
is in many cases impossible to distinguish clearly between the
knowledge and skills that children require to function as
consumers from other forms of abilities. This could e.g. be
illustrated by the ability to read, which is scarcely considered as a
trait in consumer socialization, but nevertheless is something that
is required of any consumer in the present society. The same is
true if we consider the ability that has been called media literacy.
Before the child could make sense of TV ads he or she must have
acquired some basic skills in reading and decoding media texts.
Hence, consumer socialization in many cases presupposes and isbuilt upon prior or other forms of socialization. In the social and
cultural settings in which a child is born and comes to maturity,
consumer socialization will furthermore have an informal
character. That is, it will not except in rare cases be part of an
institutionalized or consciously pedagogical process guided by
some sort of curriculum. And if we look to later stages in an
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individual’s life formal socialization in the form of some kind of
consumer schooling is still rare in most countries.
Thus the first informal patterns which affects a child’s consumer
socialization in contemporary societies will be determined by a
complex set of factors, economic as well as social and cultural. In
this way, differences in economic, social and cultural capital
among families affects a child’s consumer values, attitudes and
practices from infancy to adolescence and even beyond those life-
stages. This understanding of the influence of different types of
family background is common knowledge. Therefore, it comes as
no surprise that indicators of family background, as e.g. social
class, income, education and so forth, correlate with children’s
and youth’s views on consumption and advertising (see e.g.
Jorgensen et. al. 1992; Bjurstrom 1997, p. 345ff).
Probably those differences also affect when children begin their
careers as independent consumers. The conditions for letting
children consume on their own are of course better in prosperousthan in poor families; and presumably this is one factor which
explains why the age at which children themselves begin to
purchase consumer goods varies. But nevertheless this transition
from dependent to independent consumption marks an important
step in the consumer socialization of any child in contemporary
societies.
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Until the age however where someone start to earn his or her own
money this independence is still some kind of semi-dependence.
Even if children are free to spend their pocket money on whatever
they choose at an early age they are still dependent on their
parents to do so until 3 their late teenage years in most
contemporary societies. To become a fully independent or
sovereign consumer is still and in some respects even more so
than before – a part of being adult.
The main reason for this is that young people’s entrance into the
labor market successively has been postponed to higher ages.
This process even accelerated dramatically in e.g. Sweden in the
1990s, when the rate of young people aged 16 to 19 years in the
labor force decreased to about 25 percent and the rate of those
aged 20 to 24 to about 60 percent (Ungdomsstyrelsen 1997, p.
21). Although the decline seems to have stabilized – and even
reversed slightly – in the last three-four years it still shows that
most young people spend their time studying until they reach the
age of twenty or beyond. Of course, this does not mean that they
do not have their own money to spend. Only that this money to a
larger extent than before comes from loans to study and other
forms of subsidiary funds. And this, in turn, means that the
disposable income often is less as well as the possibilities to raise
it compared to having a job.
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So, one could conclude that most young people become
autonomous consumers at a relatively late age today. And in this
sense there is still a strong relationship between production and
consumption in contemporary post-industrial societies. However,
any attempt to make a clear distinction between productive and
consumptive activities is fraught with difficulty. Ever since the
nineteenth century consumption has primarily been seen as an
expression of hedonism or a pleasurable leisure activity, which
has contributed to disguise the fact that it is often experienced as
a kind of labor in people’s everyday life. Certainly, people shop for
fun, but most of their daily shopping does not follow this model
(see Miller 1998 and Miller et al. 1998). The purchase of common
goods, as e.g. basic food products, must rather be seen as a part
of the everyday labor that transcends the logic of market
exchange.
Consumption is often a dull everyday activity, but can also be
something extraordinary, which marks an interruption in people’s
everyday life. Overall consumption is an activity filled with
pleasure as well as discomfort. But what is consumption? It is, of
course, pointless to discuss consumer socialization or any impact
of consumption without some notion of what it means to
consume.
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Consumption According to the Concise Oxford Dictionary the word
“consumption” refers to the “purchase and use of goods”.
Although this is far from an exhaustive definition of consumption,
it nevertheless points to the fact that it is an activity or practice.
In the Swedish language this is even confirmed by the word
handla , which is the most commonly used word for “purchase” or
“buy”, but also means to “act”. However, etymologically the word
“consumption” is derived from Latin’s consu´mere , which means
to “devour” something. This meaning is still present, although the
word “consumption” covers a wider semantic field in modern
languages.
Seen as a modern practice, consumption covers a wide range of
acts or moments which distinctively could be described as the
selection , purchase , use and disposal of goods or services
(Bjurström et. al. 2000, p. 42ff and Becker et. al. 2001).
According to this definition the purchase is the moment that fulfils
the consumption process. The purchase not only confirms that the
customers have made their choice, but also transforms them into
the rightful owners and users of the goods chosen with an implicit
responsibility for the future disposal of 4 it. But far from all
selection processes result in purchases. Window-shopping even
confirms that this process can become an end in itself.
Nevertheless, even if you only consume something with your eyes
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and do not complete the whole consumption process it could still
be seen as a part of it.
Actually, each of the fou of consumption contains a variety of
possible acts. You may e.g. select the goods from a TV ad, in a
shop or from the advice of a good friend. You may pay for it in
cash, on account or by credit card. The realization of a
commodity’s use value may, of course, be very different
depending on what kind of goods you have bought.
And the moment of use may vary in time from seconds to years
and in some cases even last for several generations. A hamburger
is literally consumed immediately, while a TV set or a car is used
for years and objects like furniture or jewelry may be passed over
from generation to generation. The latter case also illustrates one
way to dispose an item, namely as a gift. Actually, there seems to
be four main types of disposal of consumer goods: either they
may be destroyed , traded in exchange for other goods, sold or
given away as gifts .
If an item used for a while is sold it once again becomes a
commodity and is re-introduced into the logic of market
exchange. Most probably though this re-introduction will be on a
different market than where it was originally introduced, as e.g.
an auction, a flea-market or a second-hand shop. But items that
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are traded in exchange for other objects or given away as gifts
will break with the logic of market exchange. The former follows
the logic of bartering and the latter the logic of gift exchange.
Both barter and gifts have the character of pre-modern or even
archaic exchange forms.
Historically both precede the rise of modern market exchange. But
they still live on. Barter exchange is a quite dominant feature of
the so-called black or gray market and gifts are constantly given
and received in contemporary societies.
Here I will argue that gift exchange plays a central role in
consumer socialization. This also means that I will break with a
strictly economic understanding of consumption; not least
because I believe that such a perspective prevents a more
thoroughly understanding of the process of consumer
socialization. Foremost because a pure economic understanding
often rests on the implicit, but nevertheless normative,
presumption that the end result of this process should be thecreation of homo economicus , the rational, calculating and
wellinformed consumer who operates in the market economy. By
this I do not mean to deny the importance of such traits, but only
to emphasize that there are aspects of consumer socialization that
are not visible to the eye of homo economicus ; the role played by
the gift economy is certainly one of them.
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Gift and commodity economy It is hardly a new discovery that
gifts follows a different logic of exchange than commodities. At
least it dates back to 1924 when Marcel Mauss’ (1990) well-known
and influential study Essai sur le don (Essay on the gift) was
published. By focusing on gift-giving practices in archaic societies
Mauss came to the conclusion that the market did not arise with
the invention of money. Rather, money replaced the rules
governing an ongoing circulation of gifts and thereby created the
prerequisite for the rise of a strictly economic market.
The successive rise of an economic market did not, however,
abolish the archaic forms of gift exchange. Gift-giving has
remained a common practice even in industrial and post-industrial
5 societies, and is still a practice that follows a different economic,
social and cultural logic than the exchange of commodities.
Compared to the logic of giving and receiving gifts the logic of
commodity exchange is quite simple. The main reason for this is
that commodity exchange is universalistic and thus moreautonomous in relation to social and cultural contexts than gift
exchange. The forms and rules of the latter are always deeply
socially and culturally embedded, and therefore vary considerably
from context to context. But the rules do not only vary, they are
also as Mauss (1990 p. 13ff) was the first one to point out partly
contingent and unconscious to those who follow them, not least
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when it concerns the obligation to return presents. In this way
gifts and presents are not only a blessing, but give rise to
conjoined feelings of pleasure and displeasure or comfort and
discomfort. This also reflects that in contrast to commodities the
exchange of gifts is based on and confirms interpersonal
relationships which can be described in terms of complex feelings
of love, appreciation, devotion, sacrifice, and so forth. In
expressing feelings like these the gift economy contradicts the
values of the commodity economy, which are based on the
exchange of equivalent economic values and the maximization of
economic profit. Gift economy is based on disinterestedness,
commodity economy on interest in a narrow economic sense.
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CHALLENGES FACING THE CONSUMER
ELECTRONICS INDUSTRY
With the increase in price wars due to the entry of new players in
the market and increase in manufacturing capacity by some
original manufacturers, the profitability and margins of the
companies are adversely affected. Poor distribution network in
semi-urban and rural areas. Low awareness of consumer
electronics products in rural India. Presence of gray market in
consumer electronics products, especially in DVD player, music
players. Companies need to increase focus on product
differentiation to address various segmental specific needs.
With the increase in access to Internet information, and
availability of wide range of choices, consumers have become
quite smart. They want the product that is easy-to-handle, good
in quality and low in price. Most importantly, consumers want
some guarantee for the product that they are buying. They look
for the product that can be used for many years. The role of
electronic companies doesn't end on the sale of the product, but
continues till the end of guarantee period.
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DUTY CUT TO SPUR CONSUMER DURABLES
INDUSTRY LIKELY
February 25, 2008
In a bid boost the consumer durables industry that has lately
become a drag on the broader economy, chances are that Finance
Minister P. Chidambaram would announce cut duties.
Industry bodies like the Consumer Electronics & Appliances
Manufacturers Association have sought a cut in excise duty from
16 per cent to 8 per cent. The general consensus, however, is that
a moderate duty cut to 12 per cent could be in the offing.
In fact, alarmed by the economic slowdown in the second half of
the current fiscal, particularly a contraction of 1.3 per cent in the
consumer durable industry during the April-December period,
Chidambaram has already asked the public sector banks to make
available more credit for housing and consumer durables.
Given this backdrop, the Rs 35,000-crore consumer durables
industry is expecting tax rationalisation, among others, from the
coming budget, which could translate into a reduction of between
5 per cent and 10 per cent in prices at retail outlets.
The industry is of the opinion that 10 per cent customs duty on
critical inputs such as CPT, tuner and other parts is adversely
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affecting it, while a similar duty on LCD and plasma panels is
equal to import duty on finished TV sets. “Manufacturing of LCD
TVs will get a fillip if the customs duty on panels of LCD TVs is
brought down to zero per cent,” said Ravinder Zutshi, Deputy
Managing Director, Samsung India.
Vivek Mishra, a partner at Ernst & Young, expects a reduction in
the customs duty rate for both consumer and non-consumer
goods from the current 10 per cent to 7.5 per cent. Also, the
central sales tax (CST) rate could be reduced from 3 per cent to 2
per cent, he said.
Manufacturers are seeking reduction of customs duty on basic raw
materials such as plastic, aluminum, copper and steel from 0-10
per cent at present to zero per cent, and the peak import duty on
raw materials from the current 7.5 per cent to 2 per cent.
In view of duty-free import of colour TV sets from Thailand, they
want the customs duty on inputs to be placed at par with the
customs duty on finished products.
According to V Ramachandran, director, sales and marketing, LG
Electronics India, “With the economy on a high and changing
lifestyles, consumers are looking forward to better technology and
as such there is great potential in India for telecom, digital
displays and information technology. A budget supporting these
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industries will act as a catalyst in increasing production of such
high tech products”.
Meanwhile, the fast-moving consumer goods (FMCG) industry is
also looking for some tax reliefs from the budget. For instance, in
view of promoting cleanliness and hygiene, the industry is hoping
for the central value-added tax (CENVAT) on detergents is
reduced to 8 per cent from 16 per cent at present.
Likewise, the food processing industry is hoping for exemption
from the existing central sales tax of 3 per cent, while the bottled
water industry is looking for a reduction in excise duty from 16
per cent to 4 per cent
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SOCIALIZATION
The term socialization is used by sociologists , social
psychologists and educationalists to refer to the process of
learning one’s culture and how to live within it. For the individual
it provides the skills and habits necessary for acting and
participating within their society. For the society, inducting all
individual members into its moral norms, attitudes, values,
motives, social roles, language and symbols is the ‘means by
which social and cultural continuity are attained
Types
Primary socialization
Primary socialization occurs when a child learns the
attitudes, values, and actions appropriate to individuals as
members of a particular culture. For example if a child saw
his/her mother expressing a discriminatory opinion about a
minority group, then that child may think this behavior is
acceptable and could continue to have this opinion about
minority groups.
Secondary socialization
Secondary socialization refers to the process of learning
what is appropriate behavior as a member of a smaller
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Agents of Socialization
Agents of socialization are the people and groups that influence
our self-concept, emotions, attitudes, and behavior.
1. The Family . Family is responsible for, among other things,
determining one's attitudes toward religion and
establishing career goals.
2. Education . Education is the agency responsible for
socializing groups of young people in particular skills and
values in society.
3. Peer groups . Peers refer to people who are roughly the
same age and/or who share other social characteristics
(e.g., students in a college class).
4. The Mass Media .
5. Other Agents: Religion, Work Place, The State.
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MEDIA AND SOCIALIZATION
Theorists like Parsons and textbook writers like Ely Chinoy (1960)
and Harry M. Johnson (1961) recognized that socialization didn’t
stop when childhood ended. They realized that socialization
continued in adulthood, but they treated it as a form of specialized
education. Johnson (1961), for example, wrote about the
importance of inculcating members of the US Coastguard with a
set of values to do with responding to commands and acting in
unison without question.
Later scholars accused these theorists of socialization of not
recognizing the importance of the mass media which, by the
middle of the twentieth century were becoming more significant
as a social force. There was concern about the link between
television and the education and socialization of children it
continues today but when it came to adults, the mass media were
regarded merely as sources of information and entertainment
rather than moulders of personality. According to these scholars,
they were wrong to overlook the importance of mass media in
continuing to transmit the culture to adult members of society.
In the middle of the twentieth century the pace of cultural change
was accelerating, yet Parsons and others wrote of culture as
something stable into which children needed to be introduced but
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which adults could simply live within. As members of society we
need to continually refresh our ‘repertoire of habits, beliefs, and
values, the appropriate patterns of emotional response and the
modes of perception, the requisite skills and knowledge’ as Chinoy
(1961: 75) put it.
Some sociologists and theorists of culture have recognized the
power of mass communication as a socialization device. Dennis
McQuail recognizes the argument:
The media can teach norms and values by way of symbolic reward
and punishment for different kinds of behaviour as represented in
the media. An alternative view is that it is a learning process
whereby we all learn how to behave in certain situations and the
expectations which go with a given role or status in society. Thus
the media are continually offering pictures of life and models of
behaviour in advance of actual experience.
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ANALYSIS OF QUESTIONNAIRE
Q1 If you were to buy a large electrical appliance such as a
colour TV or dishwasher would you expect the
manufacturer to provide a warranty?
0
1020
3040
5060
7080
90
Yes No
Serie
Yes 90
No 10
As it can be seen from the data above that 90% of the people look
for warranty while buying any electrical appliance. Since electrical
appliances are subject to repairing customers look for guarantee
as it provides them the satisfaction.
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Q2 how long would you expect that warranty to be?
Less than one year 37
One year 20
Two years 10
Three years 10
Four years 10
Five years 0
More than five years 5
Varies by manufacturer 2
Varies by retailer 6
Don’t know 0
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Ø Less
Ø
Ø Two
Ø
Ø Four
Ø Five
Ø More
Ømanuf
Customers also expect the guarantee provided to them to be long
enough.
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Q 3Have you heard of extended warranties?
Yes 80
No 20
0
10
20
30
40
50
6070
80
Ø Yes Ø No
Serie
More than 80% of the people are aware of the extended
warranties.
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Q4 Extended warranties may be offered to people who buy
electrical goods so the goods can be repaired free of charge
beyond the period of the manufacturer’s basic guarantee.
What types of company offer extended warranties?
Manufacturers 40
Retailers/shops 45
Insurance companies 5
Other answers (SPECIFY) 0
Don’t know 10
0 20 40 60
Ø Manufacturers 1
Ø Retailers/shops 2
Ø Insurance companies 3
Ø Other answers (SPECIFY) 4
Ø Don’t know 5
Serie
A survey conducted also showed the major companies which
offered the extended warranties. The retailers occupied the top
most position followed by the manufacturers.
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Q 5 Extended warranties may include warranties backed by
insurance and warranties that are service contracts. As far
as you know, are there any differences between these
types of warranties?
Yes 1 10
No 2 15
Don’t know 3 75
Ø Yes 1
Ø No 2
Ø Don’t kno
Not much people are aware about that extended warranties are
backed by insurance products.
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Q 6 Which of these types of appliance do you think are
most reliable is that will last the longest before needing
repairs?
Brown goods such as
colour TVs 40
White goods such as
dishwashers 25
Fridges or freezers 25
PCs or game consoles 10
Don’t know 0
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05
101520253035
4045
Ø Browngoods such
as colour TVs 1
Ø Whitegoods such
asdishwashers
2
Ø Fridges orfreezers 3
Ø PCs orgame
consoles 4
Ø Don’tknow 5
Serie
According to the survey on electrical appliance the tv lasts the
longest.
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Q7 what all do you look when u go to buy an electrical
appliance
Price 35
Durability 45
Quality 20
Ø Price
Ø Durabilit
Ø Quality
When customers go to buy a product they look mostly for
durability of the appliance and later comes the price. As it can be
seen 45% of the people look for durability as compared to 35%
who go for price.
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Salesperson has always a major role to play in the sales of any
product. It is convincing power, communication skills and
handling pressure that converts the decision into sales. Thus the
sales person needs to be very effective and effiecient and also
customer friendly.
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Q9. Who take the decision whenever you go to take the
consumer durable?
Men 65
Women 35
Ø Men
Ø Wome
It is generally the men who influence the decision of purchasing a
product.
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CONCLUSION
As it can be seen from the data above that 90% of the
people look for guarantee while buying any electrical
appliance. Since electrical appliances are subject to
repairing customers look for guarantee as it provides them
the satisfaction.
Customers also expect the guarntee provided to them to be
long enough
There are various parameters which are looked upon while
buying a product. But the quality attains the highest place
followed by the service and price
It is generally the men who influence the decision of
purchasing a product.
Salesperson has always a major role to play in the sales of
any product. It is convincing power, communication skills
and handling pressure that converts the decision into sales.
Thus the sales person needs to be very effective and
effiecient and also customer friendly.
When customers go to buy a product they look mostly for
durability of the appliance and later comes the price. As it
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can be seen 45% of the people look for durability as
compared to 35% who go for price.
According to the survey on electrical appliance the tv lasts
the longest.
Not much people are aware about that extended warranties
are backed by insurance products.
More than 80% of the people are aware of the extended
warranties.
The consumer durables market in India is valued at US $ 4.5
billions currently. In 2006, microwave ovens and air conditioners
registered a growth of about 25%. Frost-free refrigerators have
registered significant growth as many urban families are replacing
their old refrigerators. Refrigerator sales amounted to 4.2 millions
in 2006, whereas the production of the refrigerators went up by
17% as compared to the preceding year
With the increase in access to Internet information, and
availability of wide range of choices, consumers have become
quite smart. They want the product that is easy-to-handle, good
in quality and low in price. Most importantly, consumers want
some guarantee for the product that they are buying. They look
for the product that can be used for many years. The role of
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electronic companies doesn't end on the sale of the product, but
continues till the end of guarantee period.
Highly involved customers tend to process product information at
deeper levels of understanding than the ones with low
involvement. For example educated parents in urban areas are
highly involved in baby food purchase decisions than rural
uneducated parents. They also retain this information for long
time.
In this case marketers need to provide information cues to help
the consumers to retrieve information from memory. But when
the target is low involvement consumers, marketers should make
the necessary information as accessible as possible at the time of
selection and buying of the product.
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REFERENCES
www.pondiuni.org/DDE/consumer%20Behaviour.pdf
http://www.abcjmp.com/jump2/?
affiliate=nhost&subid=2733&terms=socialisation
%20process%20in%20consumer%20durable%20industry
http://www.naukrihub.com/india/consumer-
durables/overview/classification/electronics/challenges/
www.users.muohio.edu/shermalw/EDP603SM2005/EDP60s
m05-group-paper.doc
en.wikipedia.org/wiki/Durable_good
economictimes.indiatimes.com/News/News-By-
Industry/Cons-Products/
www.hindu.com/2005/10/17/stories/2005101706261400.ht
m
www.livemint.com/2008/02/10231454/Consumer-durables-
cos-see-rise.html
www.gemoney.in/en/happyhelp/consumer.html
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ANNEXURES
Questionnaire
Q1 If you were to buy a large electrical appliance such as a colour
TV or dishwasher would you expect the manufacturer to provide a
guarantee?
Yes
No
Q2 And how long would you expect that guarantee to be?
Less than one year
One year
Two years
Three years
Four years
Five years
More than five years
Varies by manufacturer
Varies by retailer
Don’t know
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Q 3Have you heard of extended warranties?
Yes
No
Q4 Extended warranties may be offered to people who buy
electrical goods so the goods can be repaired free of charge
beyond the period of the manufacturer’s basic guarantee. What
types of company offer extended warranties?
Manufacturers 1
Retailers/shops 2
Insurance companies 3
Other answers (SPECIFY) 4
Don’t know 5
Q 5 Extended warranties may include warranties backed by
insurance and warranties that are service contracts. As far as you
know, are there any differences between these types of
warranties?
Yes 1
No 2
Don’t know 3
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Q 6 Which of these types of appliance do you think are most
reliable ie that will last the longest before needing repairs?
Brown goods such as colour TVs 1
White goods such as dishwashers 2
Fridges or freezers 3
PCs or game consoles 4
Don’t know 5
Q7 What all do you look when u go to buy an electrical appliance
Price
Durability
Quality
Q8 How can a salesperson affect electrical sales
Convincing power
Handling pressure
Solving customer problems
Communication skills
Q9 who take the decision whenever u go to purchase a consumer
durable products
Men
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Women
Q10 what is the most important factor in consumer durables
Price
Quality
Service
Durability
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