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Xavier Institute of Management & ResearchXavier Institute of Management & Research
Company Profile
Introduction
The Videocon Group emerged as a USD 4.1 billion global
conglomerate continuing to set trend in every sphere of its activities
from a conference room sized assembly line in 1979.
Videocon is an industrial conglomerate with interests all over the world
and based in India. The group has 17 manufacturing sites in India and
plants in China, Poland, Italy and Mexico. It is also the third largest
picture tube manufacturer in the world.
Company is founded in 1979 by Mr. Nandlal Madhavlal Dhoot having
headquarter in Aurangabad, Maharashtra, India.
Corporate profile
The Videocon group has an annual turnover of US$ 4.1 billion, making
it one of the largest consumer electronic and home appliance
companies in India. Since 1998, it has expanded its operations
globally, especially in the Middle East.
Today the group operates through six key sectors:
Consumer electronics
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In India the group sells consumer products like Colour Televisions,
Washing Machines, Air Conditioners, Refrigerators, Microwave ovens
and many other home appliances, selling them through a Multi-Brand
strategy with the largest sales and service network in India. Videocon
Group brands include Akai, Electrolux, Hyundai, Kelvinator, Kenstar,
Kenwood, Next, PlanetM, Sansui, Toshibha, Philips (TV Products) etc.
Mobile Phones
In November 2009 Videocon launched its new line ofMobile Phones.
Colour picture tube glass
Videocon is one of the largest CPT Glass manufacturers in the world,
operating in Mexico, Italy, Poland and China.
Oil and Gas
An important asset for the group is its Ravva oil field with one of the
lowest operating costs in the world producing 50,000 barrels of oil per
day.
DTH
In 2009, Videocon launched its DTH product, called 'd2h'. As a
pioneering offer in the Indian DTH market, Videocon offered LCD &
TVs with built-in DTH satellite receiver with sizes 19" to 32". This
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concept in the DTH service is relatively new in the presence of other
players like ZEE tv's Dishtv, Tata Sky, Air tel Digital Tv and Reliance's
BIG TV providing only the set top box.
Telecommunication
Videocon Telecommunication Ltd has license for mobile service
operations across India. It launched its services on 7 March 2010 in
Mumbai.
History of Videocon Group
Year Sector
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1989- Colour & B/W TV
- Washing Machine
1989-
90
- Home Entrainment
System
- Electric Motor ,AC
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Year Sector
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1991- Refrigerator
- Coolers
1995- Glass Shells for CRT
1996- Kitchen Appliances
- Crude oil
1998- Compressors
- Compressors
2000- Philips colour TV
plant takeover
2005- Electrolux India 3
plants takeover
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Awards:
Man of Electronics Award to Mr. P.N. Dhoot, president of
Videocon Group in the year 2005 by CETMA(Consumer
Electronics and Television Manufacturing Association.)
RAHBIC Award (Related to Recruitment) in the year 2005.
BRAND EQUITY rated Videocon Group as No.1 Brand in
consumer durables for the year 2007.
Consumer Durables in India:
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2009- Mobile Phones
- DTH
2010- Telecommunication
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0
10
20
30
40
50
60
70
80
90
100
philips Onida videocon
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0
10
20
30
40
50
60
70
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philips Onida videocon
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Project Overview
Videocon Appliances Limited
Organization name: Videocon Appliances Limited
Location: Videocon Appliances Limited,
15 Km Stone , Aurangabad-paithan
road,
Village Chitegaon.
Tq-paithan,
Dist: Aurangabad-431105.
Size: Land 8,26,000 Sq-Meter
Quality Certificate: ISO 9001:2000
Product: Refrigerator
Production Capacity: 2300-2800 per day
Workforce: 1000-1200
Trade Union: A.G.K.U. (Aurangabad General
Kamgar Union)
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Manufactures: Brands:-
Videocon,Electrolux,Samsui,
Kenstar,Kelvinator,Allwyn,
York and Toshiba.
Competitors: LG, Whirlpool, Godrej, Samsung etc
Market Shares: Data Collected from ORG report
Logo Changed
Videocon Group Changed Logo
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Videocon Group, the Rs 5,000-crore conglomerate, has embraced a
new brand identity. The brand has shed its solid steel 'V' for a more
fluid, lava like 'V', coupled
With a new proposition Exprience Change prior to this , the brand
has banked on other propositions, such as 'Technology for health and
pleasure', 'Bring Home the Leader', 'New Improved Life', 'The Indian
Multinational', 'Whatever role life gives you, play it big', as well as the
most recent one, 'Eco Logic for sustainable life'.
The company unveiled its new tagline recently, at an event promoting
the 2009 chapter of the IIFA awards. The new logo was unveiled in
San Francisco, by the Videocon brand ambassador Shah Rukh Khan,
From static to flexible conceived by Interbrand, Singapore, the 'V' in
the new logo is representative of the new identity of the brand an
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identity that is fresh, dynamic, and has been provided a life of its own.
The new 'V' is composed of two animated green, lava-like shapes
Called Chouw and Mouw both of which have distinct identities.
Chouw and Mouw are 'live' characters, and will be used through a
series of short videos to tell simple stories, each depicting a positive
dimension of Videocon's new tagline, 'Experience Change'.
Both have certain personality traits, based on their physical attributes.
The bigger one, Chouw, is slow but earnest; strong and silent; he is
patient, good natured, kind, and maybe a little romantic too. The
smaller one, Mouw, is quick witted, energetic bordering on restless,
curious, and funny.
Physically, they can coerce their bodies into rudimentary shapes that
help them to get on with tasks at hand. The colour palette has been
chosen to reflect the philosophy of the Videocon Group, that is, the
green colour is symbolic of the company's ecology drive.
Prasoon Joshi, executive chairman, McCann Erickson India, and
regional executive creative director, Asia Pacific, McCann Erickson,
says, "The task at hand was challenging, keeping in mind the brand
equity and recall Videocon already enjoys. So, keeping in mind that
the brand was getting into new age categories, it was decided to get
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rid of the static nature of the brand and getting it to move on. Hence,
the new identity will bring energy into the brand."
Joshi, along with Vineet Mahajan, senior creative director, led the
team from T.A.G., McCann Worldgroup's second agency, which was
recently handed over the duties for the brand.
As far as the characters are concerned, Joshi maintains that they will
help to create buzz and visibility around the transformation and
establish the new logo in the consumer's mind effectively.
What prompted the change?
The brand, which has been in existence for more than two decades,
has managed a fair share in the entry/middle product segment. It is
perceived as a brand for the Indian middle class -- no frills, no
glamour, simple, reliable and hassle-free.
However, in the high-end products segment, Videocon is way behind
Samsung and LG. For example, it does well in the conventional CTV
category but not in the LCD category. Again, while the window air-
conditioner category is doing well, not much is happening for the
brand in the split air-conditioner category.
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With the present generation of consumers moving fast towards the
premium segment, even for their first buys, the brand is not being
seen as the preferred one. As a result, it is not able to cash in on the
high growing segment, which is the premium category of products.
This prompted Videocon to opt for a change. It has decided to focus
on the premium segment and would now diversify into other related
high-growth categories with the launch of its mobile services,
handsets business and IDTV/D2H (in-built set-top box with single
remote). Videocon expects to double its turnover in the next couple of
years, and a large part of the increase is expected to come from these
high-growth segments.
The brand will also be positioned to make a connect with the hearts
and minds of young-at-heart consumers. Adds, K R Kim, vice-
chairman and CEO, Videocon Group, in a communiqu, "The rationale
behind Videocon's brand evolution comes from our constant
endeavour to listen and respond to the changing market dynamics in
India and overseas."
Executing the change
The re-branding comes after a major review of the brand's advertising
and media planning and buying duties. The group had put up the
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account, estimated to be in the region of Rs 200 crore, for a pitch. For
the media duties, it appointed ZenithOptimedia.
The creative duties for its consumer electronics and appliances
business went to T.A.G. Videocon's five group brands -- Sansui,
Electrolux, Akai, Hyundai and Kelvinator -- as well as Kenstar, were
awarded to Saatchi & Saatchi. Other than that, among the brand's
new verticals, its DTH venture, D2H+, is with Publicis Ambience; while
the telecom venture, Datacom Solutions, is with T.A.G.
To communicate the change in identity, the brand will engage in
strong marketing initiatives and promotional campaigns across all the
media, including print, electronic, radio and various BTL and on-
ground activities, marketing collaterals and visual merchandising.
The present campaign that announces the change comprises five
TVCs, of which one is already on-air. Each commercial is a short story
of someone in need of help. Chouw and Mouw come to the rescue
and spread happiness and joy through their charm, kindness and
efforts.
Joshi adds that apart from this, digital, outdoor and sponsored events
are also being used, while the Chouw-Mouw jingle will be leveraged
for radio. The present endorser of the brand, Shah Rukh Khan might
take a backseat, while Chouw and Mouw create the buzz.
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Anybody Changing?
Demographically, the Indian consumer is getting younger -- it is
predicted that by 2010, half of the country's population will be below
the age of 25. Godrej, the 112-year-old consumer durable major
identified this in 2008, when it went for a makeover. Though its
typography and logo remained the same, a few colours were added to
the logo to make it look more vibrant. Godrej had also relied on
Interbrands for its makeover duties.
Brand consultants believe that legacy brands have to constantly
reinvent themselves to be relevant to their consumers. Their
positioning should be such that they are equally aspirational to the
next three generations, as they are to those generations that grew up
using the brand.
Jagdeep Kapoor, chairman and managing director, Samsika
Marketing Consultants says that the 'Videocon Washing Machines...'
jingle still runs at the back of his mind, while he glances through the
new campaign and logo. According to him, there can be three
situations when a brand goes for a makeover -- mergers and
acquisitions; the brand not performing well or just putting some new
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clothes on. For Videocon, he feels it could have been a fear of a
disconnect between the brand and the consumer.
"The brand has changed its positioning quite a few times. Now, with
the old Videocon jingle and the previous Shah Rukh Khan adverts,
coupled with the new green logo, I feel a bit confused; the consumer
might feel confused too. And if the consumer is confused, the brand is
refused," he remarks. However, he likes the idea of the two new
characters to spread the brand message.
However, what with Vodafone's Zoozoos and Virgin's unique
characters, the success rate of Chouw-Mouw is being doubted by
some. The characters may also end up as a 'me-too' phenomenon,
especially since all three brands are present in the telecom space.
Sudhir Sharma, independent brand consultant and designer, talks
about the logo and typography: "I found the lava-logo to be rather
weak and not very pleasant and graphic, though the typography was
done quite nicely, keeping in mind appliance brands."
According to him, the consumer will be looking more at the service
and quality, rather than the logo colour or fonts. So, given the fact that
Videocon is marching towards newer categories such as DTH and
mobiles, the change will marry well with the concept.
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However, keeping in mind the brand has existed for quite some time
now, it would be disastrous if the consumer has had any bad
experiences previously with, say, its washing machines or
conventional CTVs, which will, in turn, put him off the newer line-up of
products as well. "Unlike most PSU banks, which change their logos
and identity from outside and offer the same sloppy service inside,
Videocon has to offer the consumer something truly rewarding and
fresh," he says.
However, unlike Godrej, he feels that Videocon's transformation is
quite visible, especially with the two new characters.
History of Videocon
Videocon is an Indian multinational with interests in consumer
Electronics, Home appliance, colour picture Tube Glass ,and oil & Gas
.Videocon was founded in 1987 by Nandallal Madhavlal Dhoot . At
that time it used to manufacture Tv and Washing machine, In 1989
-90, Videocon Started manufacturing Home Entertainment System,
Electric Motors & AC. Videocon entered Refrigerators and coolers
segment in 1991. In 1995, Videocon started manufacturing Glass
shells for CRT and in 1996 it ventured into Kitchen appliances and
crude oil segment. In 1998, Videocon started manufacturing
Compressors & Compressor Motors. In the year 2000, Videocon
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took over Philips Color TV Plant. In 2005, Videocon tookover 3 plants
of Electrolux India and acquired Thomson CPT.
Today, it has evolved into a giant conglomerate with annual revenues
of over U$4.1 billion.
Business Interests of Videocon
Consumer Electronics & Home Appliances: Videocon enjoys
leadership position in consumer products like Color Televisions,
Washing Machines, Air Conditioners, Refrigerators, Microwave ovens
and numerous other home appliances. Videocon's refrigerator
manufacturing enjoys synergy with its in house compressor
manufacturing technology in Bangalore.
Display industry and its components: After the acquisition of Thomson
in 2005, Videocon has emerged as one of the largest Colour Picture
tube manufacturers in the world. It has plants in Mexico, Italy, Poland
and China and manufactures a range of high- tech products such as
slim CPT, extra slim CPT and High Definition 16:9 format CPT.
Colour Picture Tube Glass: Videocon is one of the largest CPT Glass
Manufacturers in the world. It has plants in Poland and
India.Videocon's CPT Glass manufacturing complements its Colour
Picture tube manufacturing business.
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Research & Development
The company gives utmost importance to the R & D activities, which
are carried out, at in-house R & D centre .The Company carries on
new innovations in product development, cost reduction, quality
improvement, process improvement, process controls.
1) Specific area in which R & D is carried out by the company
During the year, the company has carried out research and
Development in the following areas.
1. Home theatres-High end models and HTIB models.
2. Larger Screen Television i.e. 32 inch and 38inch.
3. True Flat Televisions.
4. Plasma Televisions.
5. Cosmetic Design and new out look to the TVs
6. Manufacturing of components for CTV,Refrigetors and Air
conditioners.
7. Efforts to reduce power consumption of all its final products.
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2) Benefits Derived as a result of the above R&D.
The company has Derived the following benefits as a result of theResearch and Development:
1. Development of new design in product and launch of various new
models.
2.Able to complete with the foreign players in the Indian Market by
cost reduction and offering innovation features and to maintain market
leadership in television under Videocon umbrella.
3. Increase in productivity.
4. Reduction in power consumption of some of the products.
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3) Future plan of action
In the coming days company is aiming to achieve development in the
following through Research and development:
1. Manufacturing of components for consumer Electronics Product.
2.Multimedia TV
3. Plasma televisions.
4. Launching of New Brands & Sub-brands under Videocon umbrella.
5. Composite Home Entertainment system with internet adaptability.
6. Work on better features, better quality & improved reliability with
reduced/low prices.
Company always attempts to use the latest and advanced technology
in production process. Keeping pace with the technological
developments, the company keeps on adding sophisticated
equipments with focus on automation to minimize manual intervention
in manufacturing process thereby ensuring quality of the final product.
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Quality Policy:
We, all Videocon Appliances Limited are committed to provide
product with inbuilt quality and reliability so as to achieve at most
customer satisfaction.
We shall
Fulfil agreed customer requirements.
Comply with applicable statutory and regulatory requirements.
Comply with our quality management system, and
Continuously improve the effectiveness of our quality
management system.
Director Sethuraman
List of Departments at Videocon Appliances
Plant Engineering Department.
PPC dept. (Production, planning &Control)
Purchase
Design and Development dept.
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Account dept.
Material dept.
Excise dept.
Quality Control dept.
Paint shop
BSR dept.(Bounded store room)
SAP dept (System Application Production)
Imports dept
HR dept (Human Resource)
Show Case dept.
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Chapter Organisation Hierarchy:-
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REF.DIVISION/ DIRECTOR (APPLIANCES)
AGM(PRODUCTION)
SR.MANAGER
DY.MANAGER
MANAGER
ASS.MANAGER
SR.MANAGER/S.R ENGINEER
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ENGINEER/EXECUTIVE
R.OFFICER/R.ENGINEER
ASST.TECHNICIAN(SUPERVISIOR)
ASSISTENT
TRAINEE(G.E.T)
WORKER
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PROJECT OVERVIEW
Introduction
Consumer Durables Sector
The durables market is replaced with opportunity, with soring
demands. The last decades has seen unemitted rise in demands in
consumer durable sector.
A number of factors have contributed to the persistent rise in demands
for consumer durables in India. The most perceptible includes the
mounting income levels of emergence of dual income families,
availability of disposable income, changing lifestyles. These factors
have lead to emergence of highly aware & demanding consumer
base.
In terms of product category the consumer durables can be stratified
into consumer electronics compromising of T.V. sets , Audio system,
VCD players & others & Appliances referred to as White Goods.
Which includes washing machines, refrigerator, microwave ovens air
conditioner.
MNCS with their superior technology & high spending on R & D have
a distinct edge over the Indian manufacturers. Domestic companies
are able to have a standing owing to a far-reaching distribution
network & a better understanding of the local market conditions.
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In the rural areas the demand is also governed by the extend of
government funding for infrastructure development, particularly with
respect to electricity.
RNCOS, an Indian based market research company, in its report
highlighted the overall contribution of Indian consumer durables
sector.
These have been stiff competition among major MNC brands like
Sony, Samsung and LG; especially in the high demand categories like
flat screen TVs and frost-free refrigerators.
Major players in consumer Durables sector
LG
Sony
Samsung
Videocon
Godrej
Haier
Hitachi
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Sanyo
Sharp
Electrolux
Kenstar
Toshiba
Kelvinator
Customer Needs Assessments:
A customer is someone who makes use of receives the products or
services of an individual or organisation. The word historically derives
from custom means habit
A customer was someone who frequented a particular shop. who
made it a habit to purchase goods there, and with whom the
shopkeeper had to maintain a relationship to keep his or her custom,
meaning expected purchases in the future.
Customer needs may be defined as the goods or services a customer
requires to achieve specific goals. Different needs are of varying
importance to the customer and other communications etc.
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Assessment is the process of documenting, usually in measurable
terms, knowledge, skills, attitude and beliefs.
Scope of the Project
It was found easy to know the perception and satisfaction of
retailers and customers about the consumer durables on
Videocon products.
To eliminate the difficulties of the retailers so as to increase the
sales volume.
By adopting new promotional strategy, market share can be
increased.
The study was limited to the opinions of households and
dealers only.
Project was carried out to access new needs of customers for
particular product.
It will reveal trend of markets and problem related to sales.
Retailer have a handsome knowledge of customers attitude towards
the product of manufacturer; therefore it is necessary to know their
views on several aspect, which would help to know the pulse of
market
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.
Objectives of the Project
Main object of the project is to match theoretical aspect with
practical experience.
Project is the vital element in curriculum of MMS.
It helps the students to be familiar with the atmosphere of the
organization.
It gives an exposure to the students to an organization.
Day-to-day business problems and obstacles in the way of
management are perceived by the student during the project.
The project is the integral part of management study which
enables the student to develop his total personality as an efficient
manager.
It helps to take up arising challenges of business work and lead
his contents in the actual field of management.
Research Methodology
Research methodology is the systematic and objective search for
analysis of information relevant to the identification and solution of any
problems in the field of business.
Research Methodology Adopted
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Research Design: Descriptive Research
Research Instrument: Structured non disguised Questionnaire.
Sampling Plan (a)
A) Sampling Technique: Non-Probability Sampling (Area & Stratified
Random Sampling)
B) Sample Universe: Aurangabad
c) Sample Population: All dealers and houses in Aurangabad.
D) Sample Frame: Middle class Household
E) Sampling Unit: Households/Dealers
F) Sampling Size: 130
Sampling Technique
Area sampling is one where the overall area to be covered in the
survey is divided into several smaller areas within which a random
sample is selected. For example, a city map can be used for area
sampling .various blocks can be identified on the map and this can
provide a suitable frame. The entire city area can be divided into these
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blocks which are then numbered and from which a random sample is
finally drawn.
In this project various residential and dealers were choose at random
for the purpose of survey.
Stratified Random Sampling is one where the population is divided
into mutually exclusive and mutually exhaustive strata or sub-groups.
It does not means that stratification does not mean absence of
randomness. All that it means is that the population is first divided into
certain strata and then a simple random sample is chosen within the
stratum of the population.
Sampling Plan (b)
a) Sampling technique: Non-probability Sampling
(Convenience Sampling)
b) Sample Universe: Aurangabad
c) Sample Population: All dealers of refrigerators in Aurangabad.
d) Sample frame: All Dealers of refrigerators in Aurangabad.
e) Sampling Unit: Dealers.
f) Sampling Size: 21
Data Analysis & Interpretation
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The crux of the research lies in the interpretation of the collected and
analyzed data. The value of the research is derived only when some
conclusion can be drawn through it. Tasteful information based on the
real facts and data is made available.
Presentation of this information in a conductive and a logical
sequence is also important to achieve the research objective in a true
sense. Thus an attempt toward the same is being made with the help
of project report.
Q. Which is the most preferred brand in refrigerators?
a) Videocon
b) LG
c) Samsung
d) Whirpool
e) Other
Option A B C D E Total
Respond 20 42 9 21 12 104
percentage 19 41 8 20 11 100
Q. What other features you found in other brand?
a) Six sense
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b) Child lock
c) Door cooling
d) Other
Option A B C d Total
Respond 26 16 28 34 104
percentage 25 15 27 33 100
Q. Do you consider star rating before purchasing electronic
product?
a) Yes b) No
Q. Do you have a refrigerator?
a) Yes b) No
Option A B Total
Respondent 101 3 104
Percentage 97 3 100
Q. Do you completely satisfied with your product?
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a) Yes b) No
Option A B Total
Respondent 101 3 104
Percentage 97 3 100
Q. Which Brand of refrigerator you sell? (For dealers)
a)Videocon
b) Whirpool
c) LG
d) Samsung
Q. Rank the aspect that you look in a refrigerator?
Rank Household Dealer
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1. Brand Brand
2. Space Space
3. Aesthetics Cost
4. Warranty Aesthetics
5. Cost Warranty
6. Power consumption Power consumption
7 Cooling time Cooling time
Q. What is your purpose to by particular refrigerator?
a) Household purpose
b) Commercial purpose
c) Office purpose
d) Other
Q. Cooling time are you planning to buy new refrigerator in near
future?
a) Yes b) No
Q. Which colour you prefer in refrigerator?
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a)Red b)Silver c)skyblue d)pink e)other
Household:-
Option a B C D E Total
Response 19 25 21 15 24 104
percentage 18 24 20 14 23 100
Q. What capacity you will prefer?
a)180lit
b)220lit
c)250lit
d)280lit.
e)above 280 lit
Option A B C D E Total
Response 15 19 21 25 24 104
percentage 14 18 20 24 23 100
Dealers:-
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Rank Capacity Door type
1 180 Single
2 280 Double door
3 Above280 Double door
Q.Which type of refrigerator will you prefer?
a)Frost free
b)Direct cooled
c)other
Q.Would you like to have designer door?
a) Yes b)No
Q. Do you check about the quality of service (post
purchase),before purchasing the refrigerator?
a) Yes b) No
Q. Do you ask about other technical details before purchasing
the product?
a) Yes b) No
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COMPANIES IN THE REFRIGERATOR MARKET
The leading companies in the market with their market share in first
half.
TOTAL MARKET FROSTFREE SEGMENT
BRAND Sales(Units) % Share
VIDEOCON 199000 12.9%
21000 12%
SAMSUNG 396000 25.7%
25000 14.3%
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LG 349000 22.7%
8000 4.6%
GODREJ 178000 11.5%
25000 13.8%
BPL 85000 5.5%
83000 7.4%
WHIRLPOOL 10000 0.7%
7000 4.0%
ELECTROLUX 8000 0.5%
8000 4.6%
OTHERS 313000 20.3%
TOTAL 1535000 100% 180000
100%
INDUSTRY ANALYSIS
(REFRIGERATOR INDUSTRY IN INDIA)
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THREAT OF ENTRY
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.
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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, Production facilities,
Distribution channel credit, inventories and for covering up the start-up
losses.
Access to the distribution channels:
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.
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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
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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 Price Medium Price Low Price
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High
Perceived
Quality 1.PREMIUM STRATEGY
(1)LG, Samsung, 2. HIGH VALUE STRATEGY
(2) Whirlpool, BPL 3.SUPER VALUE STRATEGY
Moderate
Perceived
Quality 4.OVER CHARGE STRATEGY 5. MEDIUM VALUE
STRATEGY
(3) Godrej 6.GOOD VALUE STRATEGY
(4) Videocon
Low
Perceived
Quality 7.RIP OFF STRATEGY 8.FALSE ECONOMY
STRATEGY 9.ECONOMY STRATEGY
5) Voltas
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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.
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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.
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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.
4. BARGAINING POWER OF THE BUYERS
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
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DISTRIBUTION CHANNELS IN THE INDUSTRY
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
2. In this channel of distribution the company appoints 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
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3. 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.
4. 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:
Recommendations:
Company had believed that if we provide good quality product in the
market, the demand will definitely be generated at customer side, but
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company has to follow push as well as pull strategy in order to
increase its sales.
The recommendations are as follows:
The company should improve the consumer target approach
The company should focus on after sales strategy
Data Collection
Introduction to primary data
Primary data is the finding which is collected by the way of an
interview, mail survey, observation etc. For this project data is
collected is by the way of personal interview. Interview is one of chief
means of collecting data .interview may be defined as a systematic
conversation initiated for a specific purpose and focused on certain
planned content area.
Introduction to secondary data
Secondary data is the work of findings which are already present.
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Secondary data is in the form of published and unpublished
document, reports, magazines, letters etc
In this project secondary data consisted of company data, journals
and product catalogues.
Key Findings
The most used brand is LG, followed by Videocon, Godrej,
Samsung, Whirpool in the Surveyed region.
Key competitors in refrigerator sectors are LG, Godrej,
Whirpool, Samsung etc.
Consumers need refrigerator with Star rating and which is
preferably silver in colour.
LG is leading the market with a market share of about 30%
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Segment Price Capacity
%
share
Top >20000 >300 ltrs 3%
High 15-20000 >230 ltrs 7%
Medium upto 15000 165-230 ltrs 85%
Low
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It can be seen from the pie chart that LG is leading the market with an
market share of 30%, followed by Whirpools market share of 22%.
Videocon has a market share of about 17%
Conclusion:
In order to with stand tough competition from rivals like LG, Samsung,
Whirpool and Godrej. Videocon Should Come with new model in the
most preferred segment. As customer need new and improved
refrigerators thus Videocon has to make innovative products which are
of use to the consumer. Based on the findings, new model should
have double designer door, work without stabilizer, work against
fluction in electricity and space to keep 2lit. Bottle vertically. Thus
recommended features must be incorporated in the new product.
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Limitations
While working on the proect, i came to know about the limitations of
the company. They are as follows
Small sample size due to small constraints
The project has been carried out in AURANGABAD only hence
not applicable to other cities and towns of India, as various factors
would differ
Due to nature of certain questions respondents were reluctant
to part with certain information.
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Recommendation:
Customers readily accept new things, so keep on making minor
changes and innovations in the existing and new models. The new
product must be launched in the most preferred segment i.e. double
door .New concept of designer door and water dispenser must be
incorporated in the new product.
Bibliography
www.wikipedia.org
www.videoconworld.com
www.videocon.com
Marketing Management Philip Kotler
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