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Videocon Industries
Corporate Profile
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.
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.
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 Sansui, Toshiba, Electrolux, Kenstar, Next etc.
Videocon is one of the largest CPT Glass manufacturers in the world,
operating in Mexico, Italy, Poland and China.
On May 23, 2008, Videocon announced that it is studying an invitation
from General Electric (GE) to bid for its century-old appliances division,
, which it has put up for sale.
Today the group operates through 4 key sectors:
1. Consumer durable
2. Thomson CPT
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3. CRT glass
4. Oil and gas
Consumer Electronics, Home Appliances & Compressor
manufacturing in India
The company enjoy a pre-eminent position in terms of sales and
customer satisfaction in many of our 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. Refrigerator manufacturing is further supported by
inhouse compressor manufacturing technology in Bangalore.
Display industry and its components
With the Thomson acquisition Videocon has emerged as one of the
largest Colour Picture tube manufacturers in the world operating in
Mexico, Italy, Poland and China, continuing to lead through new
innovative technologies like 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
with a high level of experience and technical expertise operating
through Poland and India. Videocon will leverage on this synergy after
the Thomson acquisition to internally source glass for its CPT
manufacturing increasing efficiencies and lowering costs.
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
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of oil per day. The group has ambitious plans for expansion in this
sector globally.
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ABOUT CONSUMER ELECTRONICS INDUSTRY
1.History of consumer Electronics in India
The Electronics Industry in India took off around 1965 with an
orientation towards space and defense technologies. This was rigidly
controlled and initiated by the government. This was followed by
developments in consumer electronics mainly with transistor radios,
Black & White TV, Calculators and other audio products. Colour
Televisions soon followed. In 1982-a significant year in the history of
television in India the government allowed thousand of Colour TV sets
to be imported into the country to coincide with the broadcast of Asian
Games in New Delhi. 1985 saw the advent of Computers and
Telephone Exchanges, which were succeeded by Digital Exchanges in1988. The period between 1984 and 1990 was the golden period for
electronics during while the industry witnessed continuous and rapid
growth.
From 1991 onwards, there was first an economic crises triggered by
the Gulf War, which was followed by political and economic
uncertainties within the country. Pressure on the electronics industry
remained though growth and developments have continued with
digitalization in all sectors and more recently the trend towards
convergence of technologies.
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In recent years the electronic industry is growing at a brisk pace. It is
currently worth $ 10 Billion but according to estimates, has the
potential to reach $ 40 billion by 2010. The largest segment is the
consumer electronics segment. While is largest export segment is the
consumer electronics segment. While is largest export segment is of
components.
2. CURRENT SCENARIO
CRT-TV Falling as India Embraces LCDs
With Liquid Crystal Display-Television (LCD-TV) sales in India gaining
momentum quickly, 2010 will be the last year that Cathode Ray Tubes
(CRTs) can lay claim as the leading television display type in the
country on a revenue basis, according to iSuppli Corp.
India represents one of the last strongholds for CRT-TVs, withconsumers in other major economies having transitioned the majority
or nearly all of their television purchasing to LCD display technology in
recent years, said Riddhi Patel, director of television systems and
retail services for iSuppli. However, the allure and declining prices of
LCD-TVs, along with increased consumer awareness, have spurred
sales of the flat-panel televisionsand eroded the dominance of CRT
TVs. As a result, LCD-TV revenue in India will exceed that of CRT-TV
starting in 2011. LCD-TV shipments will catch up the year after,
exceeding those of CRT TVs starting in 2012.
CRT-TV revenue in India in 2011 will decline to $1.6 billion, down 32.3
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percent $2.3 billion in 2010. In contrast, LCD-TV revenue will rise to
$3.5 billion in 2011, up a stunning 94.3 percent from $1.8 billion in
2010.
Meanwhile, CRT-TV unit shipments will decline to 9.4 million in 2012,
down from 11.1 million in 2011 and from 15.7 million in 2010. At the
same time, LCD TV shipments will increase to 9.7 million units in 2012,
up from 6.6 million in 2011 and from 3.3 million in 2010.
QuickTime and adecompressor
are needed to see this picture.
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QuickTime and adecompressor
are needed to see this picture.
No Local Production: While demand for LCD-TVs in India will increase
rapidly over the next five years, LCD-TV growth still will not be enough
to compel TV manufacturers to open up local production plants for LCD
panels or modules in the country. Samsung, LG and Dixon are
increasing their presence in the country with final assembly plants, but
unless demand in India increases significantly, localized LCD-TV
production does not appear to be feasible, especially as Korean and
Chinese LCD-TV OEMs prefer to manufacture their products in their
own plants.
Assembly plants, on the other hand, are catching up in the country,
with key players either already possessing facilities or announcing
plans to invest in final-assembly plants in India. The Indian government
is also involved by reducing customs duties on important LCD panels.
Retail Expansion: While localized plants may not be a reality in the
near future, the increasing demand for LCD-TVs is putting increased
pressure on retailers in India to launch exclusive durable-only retail
outlets. Meanwhile, several players in the marketsuch as LG Display,
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Samsung Electronics Co. Ltd., Whirlpool Corp. and India-based
Videoconare busy forming relationships with retailers and other
large-format retail chains in order to develop the appropriate sales
channels to accommodate incoming demand for LCD-TVs.
QuickTime and adecompressor
are needed to see this picture.
Source: DisplaySearch India TV Market: TVs Emerging Land of Opportunity
The consumer durables market in India is valued at US $ 4.5 billions
currently. In 2008, 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. . Washing machines, which have always seen poorgrowth, 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 2008.
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On the brick of rapid economic growth, India has witnessed the
dynamic change in country's consumer electronics industry. In last few
years the industry has been witnessing significant changes in retail
boom, growing disposable income and availability of easy finance
schemes. One electronic gadget that has brought new revolution in
Indian Electronic Industry is Television Set. Today, India is fast
emerging as the key driver in the global television market both as a
manufacturer and consumer. In recent years, the market for
televisions in India has changed rapidly from the conventional CRT
technology to Flat Panel Display Televisions (FPTV).
Currently, the split between CRT and FPTV is around 97% and 3%
respectively. In addition to this, one of the most striking changes
sweeping across the colour television market in Indian market is the
exponential growth of the flat panel television (FPTV) market, in
common parlance called the liquid crystal display (LCD) and plasma
televisions. Moreover, as per recent research data available, the global
market for FPTV is expected to grow from 51 million units in 2006 to127 million by 2009.
Looking at the present scenario, over the last couple of years, the LCD
prices have even dropped by around 30 per cent annually. Some of the
important factors that boasted this growth also include the increasing
awareness of the advantages of LCD televisions, the growing
availability of the product across dealer counters and the Finance
schemes in the market. Besides this, as a manufacturing hub, the
television industry is improving more and more. There are many
domestic and MNC companies that have increased their production
bases in the country. Easy availability of low- cost skilled labor and the
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emergence of SEZs, which are tax-free zones are some of the key
factors that have resulted in growth of these manufacturing units. In
fact, encouraged by tax-breaks, new manufacturing units are coming
up in less-developed regions now.
Today, India is one of the few emerging countries to have an excellent
component supply base in terms of manufacturing facilities for glass
and color picture tubes, so it helps it a good choice for all those
companies who are looking to take benefit of this emerging market.
In present scenario top player for colour television are
LG
VIDEOCON
SAMSUNG
SONY
ONIDA
PHILLIPS
LG ELECTRONICSLG Electronics rightly understood the consumer motivations to create
magnetic products, price them strategically, position them sharply and
keep making the magnetism more potent. Having understood the finer
differences in consumer motivations, it opted for sharp- arrow
reasons-to-buy differentiation over the blanket-all approach taken by
most of the other players. It is an aggressive marketer. It focuses on
low and medium price products.
SAMSUNG
Initially the strategy of Samsung in India was to create premium image
by emphasising global brand. After facing stiff competition from
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another Korean major- LG, Samsung also started playing price game. In
2004 it reverted back to its premium positioning, although it resulted
in some loss of market share. In line with the Global Digital Initiative of
the Parent Company, Samsung India is seeking to acquire digital
leadership in India by introducing its digital ready televisions like the
40" LCD Projection TV, 43" Projection TV and the Plano series of Flat
Colour televisions.
ONIDA
Its popular devil ad although had engendered a strong emotional pull
towards the brand, technologically it represented no advancement.
The company plugged the gap by touting its digital technology. Like
Videocon, it has also been able to hold its market share. The world-
class quality of Onida has enabled the company to make a
breakthrough on the export front. It has technical tie- up with the Japan
Victor Company, better known as JVC. So focused is Onida on
positioning itself on the premium, high- tech plank that it is even
planning to push its own envelope on obsolescence, much. The
strategy is aimed at further broad basing the product offering of thecompany, which has largely dominated the top-end of the television
market, across multiple market segments.
VIDEOCON
Videocon has always been a price player and has an image of a low
price brand. This entails providing more features at a given price vis--
vis competitors. It has taken over multinational brands to cater to
unserved segments, like Sansui- to flank the flagship brand Videocon in
the low to mid priced segment, essentially to fight against brands like
BPL, Philips, Onida and taken over Akai- tail end brand for brands like
Aiwa.
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Videocon is one of the largest manufacturers of television and its
components in India and thus has advantages of economies of scale
and low cost due to indigenization. It has the widest distribution
network in India with more than 5000 dealers in the major cities. It also
has a strong base in the semi-urban and rural markets. Due to its
multi-brand strategy, it has at present multiple brands at the same
price point. This has led to a state of diffused positioning for its brands.
It has also led to a cannibalization of sales among these brands. The
flagship brand Videocon has lost market share due to the presence of
Sansui in the same segment. Because of reduction in import duties on
CPT the cost advantage of Videocon is also on the decline. Hence it is
facing rough weather and also trying to boost exports.
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PRODUCT LIFE CYCLE (PLC) OF CRT TV IN INDIA
The PLC for television has a SCALLOPED PATTERN
Introduction Stage (1982 1983) The CRT TV was introduced.
Growth Stage (1984 to 1986)-The industry was at the nascent stage
where the Black & White Television was pre-dominant. The sale of CRT
TV increased.
Maturity Stage (1986 to 1989)
The industry went into the maturity stage with lot of domestic
competition coming in the market.
Decline Stage (1989-1991)
Penetration levels into rural India were at low levels. Urban segmentpurely dominated CRT TV market while there was a huge untapped
market.
Re-introduction Stage: Entry of MNCs Introduction1992 to 1994.
The MNCs entered into India resulting in a greater degree of
penetration. They brought lot of products having a lot of features.
Growth (1995 to 1999) - The CRT TV Market grew at a very fast rate.
The demand for CRT TV s increased Manifold with aggressive
marketing techniques, resulting in increased penetration and cut
throat competition between domestic players and MNCs. The growing
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demand for flat CRT TVs was propelled by the declining price
differentials between FCTV and CCTV segments.
Maturity Stage (2000 to 2002-03) - The market of FCTV and CCTV
were consolidating. After 2002-03- Cycle Continues the Product Life
Cycle has been going through a lot of Stages where before the decline
of the product, a newer version has been launched in the market and
the PLC has gone through the phases again. These innovations include
LCD, Plasma in the past. Now HDTV has also been launched and that
has led to a rising PLC.
Decline Stage (2003- onwards): CRT TV manufacturing declining due
to new technology up-dation. Companies are lunching new products
like LED TV, LCD TV, DTH TV, that is main cause of declining of CRT TV
market.
Porters Model
14
Suppliers(Supplier
Power)
Potential entrants
(Threat of
Entry)
Industry
Competetitors
(Segment rivalry)
Substitutes
(Threat of
substitutes)
Buyers(Buyer
Power)
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In order to understand the industry better, we analyze the industry
using Porters Five Force Model-
- Threat to entry
- Rivalry of among existing firms- Bargaining power of buyers
- Bargaining Power of Suppliers
- Threat of Substitutes
Threat to Entry-
- Entering the CRT TV market isnt very easy. One of the most
important features needed is a good distribution system which isnt
something that can be developed overnight and technology up-dation
in CRT TVs.
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- Also a television today is a style statement. Therefore the brand plays
an important role in influencing the purchase decision. For a new
company then entering this market, not having a recognized brand
name is a threat to entry.
Rivalry among existing firms-
- There is strong competition among the current players. The main
players being LG, Samsung, Onida, Videocon, Philips, Sansui. Some of
the regional players are Hyundai and Haier are new entrants in the CRT
TV space in addition to a number of small regional players.
- This increased competition has ensured that advertising costs are an
integral part of the players total cost. A lack of product differentiation
means that price is a competitive feature that intensifies rivalry. The
highest price reductions during 2002-03 to 2005-06 were in the 20inch
and 21inch CRT TV category.
- With the future being in LCDs, this market is likely to see price
reductions future.- It is expected that realizations will fall with increased competition.
Bargaining Power of Buyers-
- The TV market today is a consumers market where the consumer has
the upper hand with him having the power of choosing from a variety if
brands.
- This bargaining power of the buyer has forced the players to offer
credit facilities on sale, to provide lower EMIs and excellent after-sales
service.
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- The intense dealer competition also benefits the consumer in terms of
prices and offers available.
- Inventory carrying costs for television companies are high. This is a
boon for the consumers as it translates into higher bargaining power
for the consume
Threat of Substitutes-
- For a television, the substitute can only be a functional substitute.
The functional use of a television is to watch programs, live events etc.
This today can also be done on a computer.
- Theaters too can be a substitute to watching movies at home.
- Today with various multiplexes and theaters providing screenings of
live events such as sports telecasts etc along with the luxury of good
food and the opportunity to enjoy the event with a number of other
enthusiasts, the TV can be substituted if the TV is bought only to watch
certain events.
- However if the television on considered to be a style statement and a
lifestyle statement, then consumers will seek to keep upgrading the
type and the model of their television sets.
Bargaining Power of Suppliers-
- PCBs (Printed Circuit Boards) & CRTs (Cathode Ray Tube) are key raw
materials in the production of CTVs.
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- CRT accounts for 46-48 per cent of the total raw material costs of a
CTV. PCBs and housing components account for 33-39 per cent of total
raw material costs.
- Domestic CPTs prices tend to follow Global price trends. Therefore the
suppliers do not have much of bargaining power in this regard.
-Cabinets are sourced from plastic manufacturers and as these
manufacturers supply to different industries, they therefore do have a
bargaining power, especially in comparison to CRT suppliers.
VIDEOCON'S STRATEGIES
Multi-brand strategy
Videocon International was the first Indian company to adopt the
strategy of multi-brands. Apart from its mid-priced brand Videocon, the
company now hawks Toshiba, a premium brand, and the low-priced
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brands Akai and Sansui. The multi branding technology paid off as
Videocon managed to hold on to a combined market share of around
19.6 percent, with LG at 25.9 percent and Samsung at around 13.8
percent.
Overall, the shift in the power to trade is probably one of the defining
developments. It is important since the TV companies themselves have
taken it seriously and embarked on crafting longer-term strategies to
accommodate this development. The effectiveness of their strategy
and the responses of the other players promise to deliver a few more
years of enterprising developments in the Indian TV market.
Backward Integration
Videocon integrated backwards by getting into manufacture of
components such as electron guns, metal parts and deflection yokes
for TVs and compressors, and electric motors and plastic components
for households appliances such as washing machines, refrigerators and
Air conditioners. The group integrated further to get in to manufactureof glass panels and funnels, the key components for the manufacture
of color picture tubes.
Videocon enjoys a unique synergy in the global CTV business from
glass to CRT (Cathode Ray tubes) to CTVs. - (From Sand to CTV).
Together with other components for households appliances. This high
degree of backward integration bestows upon the company a unique
benefit over competition.
Videocon's revenue mix
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Performance Measures
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SEGMENTATION, TARGETING & POSITIONING (STP)
SEGMENTATION:
Market segmentation is the process in marketing of dividing a market
into distinct subsets (segments) that behave in the same way or have
similar needs. Because each segment is fairly homogeneous in their
needs and attitudes, they are likely to respond similarly to a given
marketing strategy. They are likely to have similar feelings and ideas
about a marketing mix comprised of a given product or service, sold at
a given price, distributed in a certain way and promoted in a certain
way.
The process of segmentation is distinct from targeting (choosing which
segments to address) and positioning (designing an appropriate
marketing mix for each segment). The overall intent is to identify
groups of similar customers and potential customers; to prioritize the
groups to address; to understand their behavior; and to respond with
appropriate marketing strategies that satisfy the different preferences
of each chosen segment.
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Segments based on Income
Plasma: Income group of more than 50,000
LCD: Income bracket of Rs 20,000 and above
Slim: Consumer in the income bracket of Rs 9000-15000
Flat: Consumer in the income bracket of 7000-12000
Conventional: income bracket of Rs 3000-6000
Segments based on social class
Plasma: rich class
LCD: upper middle class and rich class
Slim: middle class
Flat: middle and lower middle class
Conventional: lower economic class.
Benefit Segmentation:
Conventional, Flat screen Slim, LCD, and Plasma can also segmented
on the basis of benefits that an end consumer would receive fromthem.
User Status:
TV market can be classified into non users of TV and potential users in
term of graduating to a higher segment like slim, LCD,Plasma from
basic conventional TV
Loyalty status: On the basis of Loyalty status
Hardcore Loyal: brand loyal to Videocon for a long time in terms of
purchasing products of Videocon
Shifting Loyal: who shift loyalty from other brands to another
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Switchers: not loyal to any brands so attract them to Videocon and
convert they brand loyal.
TARGETING:
Once the firm has identified its marketing-segment opportunities, it
has to decide how many and which ones to target. Marketers are
increasingly combining several variables in an effort to identify smaller,
better-defined target groups.
The decisions involved in targeting strategy include:
* Which segments to target?
* How many products to offer
* Which products to offer in which segments
In premium segments like flat screens and FDPs the growth in sales
has been many times the industry growth. More importantly, high end
product sales are no longer restricted to metros. Consumer in tier-2
cities seems to be as evolved in lifestyle needs. The consumer profile,
too, has changed. Higher disposable incomes, greater aspirations and
younger demographic have increased demands for the technologies.And Videocon is targeting this segment.
POSITIONING
Positioning has come to mean the process by which marketers try to
create an image or identity in the minds of their target market for its
product, brand, or organization. It is the 'relative competitive
comparison' their product occupies in a given market as perceived by
the target market.
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Once the competitive frame of reference for positioning has been fixed
by defining the customer target market and nature of competition,
marketers can define the appropriate points-of-difference and points-of
parity associations.
Points of Parity (POPs) are associations that are not necessarily unique
to the brand but may infact be shared with other brands. They
represent necessary-but not necessarily sufficient-conditions for brand
choice.
Videocon's Points-of-Parity are good quality Picture and good sound.
Points-of-Difference (PODs) are attributes or benefits consumers
strongly associates with a brand, positively evaluate, and believe that
they could not find to the same extent with a competitive brand.
Videocon's POD is the quality product with low cost.
With the strong backward integration Videocon can provide the
products with low cost.
Thus, Videocon is positioned itself as a reliable and value-for-
money product.
4Ps
The 4Ps includes the Product, Price, Place and promotion.
Product Mix
Product mix is the set of all product and items a particular seller offers
for sale. Product mix consists of various product lines.
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The width of a product mix refers to how many different product lines
the company carries. The Videocon television has product mix width of
five lines. I.e. plasma, LCD, Slim, flat and Conventional.
The length of a product mix refers to the total number of items in the
mix.
I.e. for the line of LCD the length is 2 as it has two items 50 PDP and
42 PDP.
The depth of the product mix refers to how many variants are offered
of each product in the line.i.e. For LCD the depth will be 2. As Videocon
is offering only one product in 50 PDP and 42 PDP.
The three product-mix dimensions permit the company to expand its
business in three ways.
It can add new product lines, thus widening its product mix.
It can lengthen each product lines.
It can add more product variants to each product and deepen itsproduct mix.
Width, Length & Depth
Width = 5 (Plasma, LCD, Slim, Flat, Conventional)
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In the product mix of Videocon, it is having 37 different models, which
gives them their product line Depth.
PLASMA
Plasma television technology is similar to the technology used in a
fluorescent light bulb. The display itself consists of cells. Within each
cell two glass panels are separated by a narrow gap in which neon-
xenon gas is injected and sealed in plasma form during themanufacturing process.
The main advantage of Plasma over CRT technology is that, by utilizing
a sealed cell with charged plasma for each pixel, the need for a
scanning electron beam in eliminated, which, in turn, eliminates the
need for a large Cathode Ray Tube to produce video images. This is
why traditional televisions are shaped more like boxes and Plasma
televisions are thin and flat.
Advantages of Plasma Television:
Plasma LCD Slim Flat Conventional
50PDP 42 LCD 29 slim 29 flat 21 FFST
42PDP 32 LCD 21 slim 21 flat 20 conv
26 LCD 15 flat 14 conv
20 LCD
19 LCD
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Largest Screen Formats.
Superior Contrasts.
Versatile.
Capable Of Displaying Full HDTV & Dtv Signal.
Capable Of Displaying Xga, Svga & Vga Pc Signal.
Wide Viewing Angle.
Wide Rage Of Richer Color Over 16 Million.
Superb Realistic Images.
Less Expensive Than Lcds.
Life More Than 30,000 Hours.
Wide Screen Aspect Ratio around 16:9.
Perfect Flat Screen.
Uniform Screen Brightness.
Slim & Space Saving Design.
50" PDP
Integra 50
10000:1 Contrast Ratio3:2 & 2:2 Pull Down
HDMI Compatible
3-D Video Noise Reduction
PC Input
42" PDP
16.77 Million Color
10000:1 Contrast Ratio
3.2 & 2:2 Pull Down
1500cd/m2 Brightness
HDMI Compatible
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3-D Video Noise Reduction
LCD
The flabs are out and now technology has switched over to sleek and
slim products, LCD being the prominent amongst them. LCD
technology is the recent breakthrough in consumer electronics and
because of its esteemed advantages this segment is growing day by
day.
Videocon are launching this range under the sub brand Integra.
INTEGRA term indicates the integration of various systems
connectivity with LCDTV.
This is an integration of best sound quality and excellent picture
quality.
What is TFT-LCD?
Meaning of this term is Thin Film TransistorLiquid Crystal Display. TFT
technology used in this category offers the best image quality in flat
panels. This technology is also called as Active Matrix Technology.
40" LCD
32" LCD
26" LCD
20" LCD
19" LCD
Slim
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With Continuous Research & Development Videocon brings a
revolutionary advancement in physics & brings new Slim & Trim
Television.
The Most significant feature of the Slim & Trim Television is its one kind
of super slim picture tube technology. This has enables us to make the
TV 42% Slimmer.
Slim Picture tube is a product with reduced depth providing the TV and
monitor producers with opportunity to design Slim, flat and stylish TVs
comparable to plasma or LCD panels maintaining Good picture Quality
29" SLIM
21" SLIM
Flat
Videocon Bada Woofer with
Surrounds Bass Technology
Bass Amplification by Dynamic Alignment (BADA) woofer is a
revolutionary technology that offers a new sound to create anunbelievable sound space
Videocon unique Bazoomba Woofer Technology
Videocon's superior Bazoomba Woofer Technology incorporates a
unique conjugate arrangement of Woofer motors that ensures rich bass
reproduction.
The Bazoomba Woofer Technology
Enables the generation of the lowest bass frequencies from a small
enclosure (Bazoomba tube). Enables cleaner and tighter bass
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reproduction due to acoustic cancellation of distortion in the even
harmonics
29" TFT
21" TFT
15" TFT
Conventional TV
21" FFST
20" CONV
14" CONV
Pricing
The pricing of the Videocons various models is as following.
Plasma TV: Rs. 59,990 - 2, 40,000
LCD TV: Rs. 28,400 89,900
Slim TV : Rs. 10,400 18,900
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Flat TV : Rs. 5,500 18,400
Conventional TV : Rs. 4,600 - 9,500
Place
Videocon has its presence all throughout India.
They have their presence in 25 states and each state has at least 2
divisions per state. In total they are having 78 divisions.Videocon has
around 1800 dealers in India. They are having 96 service centers
across India.
Promotional Activities
Focusing on LCD, Plasma and 29 Flat TVs since 2006.
By institutional selling. Company used both TVC as well as print media
for promotion. The company is using outdoor media promotions in
hording and bus shelters to high light the feature packed advantages.
Major tie ups in the background IIT alumni/ Videocon Santos ham film
awards 2006 with ZEE and ICC Cricket champions trophy.
Seasonal offers
Trip to Germany during FIFA world cup
Videocon bonanza offer ( har din diwali) during diwali
Chance to win car, motor bike and LCD TV's.
Brand ambassador
Shahrukh Khan
M S Dhoni
Total spending of 80 crores in 2006 on advertisements.( 35 crores for
CTV)
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Sponsorship
Videocon is inspired heavily by the uplifting values perpetuated by
sports. Its ability to draw people together irrespective of differences in
race, gender, religion and country. Unity of spirit and purpose is
ultimately what builds bridges between diverse cultures. This is the
core belief of a group that today has operations spread over a cross-
cultural milieu worldwide. Also, at the heart of sports is fair play, a
virtue which enjoys exalted status among values cherished by
Videocon.
The group has been deeply involved in supporting sports. Its
sponsorship of cricketing events across the globe underlies its
commitment and passion for sports as well as its goal to connect with a
global audience.
It is a matter of pride that Videocon's Audio Visual products entertain
enthusiasts and fans passionate about watching sports worldwide.
A breakdown of the statement above reveals a means and endapproach, where the end is articulated at the beginning with the
means linked to it.
Their famous tag line
One of the only companies in the world to convert sand to TV
Competitors strategies
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Differentiation Strategy adopted by other players:
LEADER-LG
Product localization is a key strategy used by LG.
* LG came out with Hindi and regional language menus on its TV.
* Introduced the low-priced Cineplex and Sampoorna range for
the rural markets.
* LG was the first brand to introduce gaming in CRT TVs. In
continuation of its association with cricket, LG introduced the cricket
game in CRT TVs.
CHALLENGERS- SAMSUNG
Samsung considers After Sales Service as a key differentiator for
Samsung products. In order to deliver prompt and easily accessible
service, Samsung
India has set up a widespread network of company owned as well asAuthorized Service Centers to service its customers. The Samsung
Service Plazas, as the Company owned Service Centers are called, are
a first in the industry.
FOLLOWERS- ONIDA AND PHILIPS
Onida
Onidas differentiation strategy is based on its brand based advertising
rather than feature based advertising. They used its brand mascot The
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Onida Devil and its punch line Neighbors Envy Owners Pride to
create Brand awareness of their product.
Where its competitors were focusing on advertising of the features of
their products, Onida has concentrated only on their Brand. The Devil
helped Onida gain substantial market share and brand recall among
the customers.
Philips
Philips Differentiation Strategy is their Simplicity Led Design. Philips
believes in the unity of form and function. Their technology is easy to
use. In Philipss world, they are trying to improve the consumers life.
Philips is known for its consumer insight and empathy. Therefore, their
differentiation strategy includes making technology simple to use.
NICHER-SONY
Sony is focusing on providing quality products to its customers and
differentiating itself from the other players.
The positioning strategy adopted by other players:
Leader-LG
It is positioned as a premium brand that pioneers the most innovative
technologies in India.
Challengers - Samsung
Samsung has positioned itself as a brand that brings communication,
entertainment and information in easy to use digital device.
Nicher- Sony
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Sony Positioned as a premium product giving the best quality to cater
to the demands of its high end customers.
Recommendations (Strategies)
Product Strategy
1. Stop all curved CRT PT production
2. Shift focus to LCD CTVs; target: by December 2007.
3. Launch Slim 21 and focus Slim 29 immediately. Target is to
have almost all CRTs production shifted to Slim by 2007
4. Take full advantage of Digital and HDTV revolution, gain
leadership in HDTV Slim TV segment through OEM and model
mix worldwide strategy.
5. Study unique product range / pro large to fill market gaps in
markets such as Asia and Eastern Europe / CIS / South America
6. Focus on reduction of costs through reduction of glass, shift toAK mask and reduction of process rejection.
Sales Strategy
1. Improve relationship with existing clients ; Use of Thomsons
excellent relations as preferred supplier to maximize sales
2. Improve service and quality without putting pressure on price
structure
3. Fetch a better price and avoid crisis of huge stock.
4. Leverage Slim product offering
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5. Launch LCD panels assembly to be a major actor of the Flat
Panel Displays market (which is expected to account for 50% of
the market by 2012).
6. Benefit from OEM CTV business with the help of Videocons CTV
division, invest for new models, introduction of new technologies.
7. upgrade to LCD's schemes
easy EMI.
Re. 1 offer.
8. Improve after sales service
9. Free service camp on the wheels.
Industrial Strategy
1. Consider improvement in production lines set-up: investments,
line speed up / mergers? Target is to increase output and
decrease product costs by increasing productivity of existing
lines2. This will reduce manpower and overheads per picture tube by
30% that will be redeployed on new activities in the sites (new
technologies)
3. Improve the furnace output in the Poland Glass factory by
making some changes into furnaces including electrical boosting.
Consider increasing capacity through one more furnace.
4. t is envisaged that 100m will be invested in the next 2 years for
this purpose
5. Expand into LCD panels back-end assembly (from buying LCD
arrays from big suppliers like LG, SDI, CMO, AUO, Sharp)
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Cost Strategy
1. Leverage the strong base of Videocons glass business:
Thomson-Videocon partnership will have a very strong
negotiation position and can reduce impact of glass pricing
volatility
2. Reduce production cost by upgrading and improving the
production lines. Thomson-Videocon partnership will have its own
base of additional 4 million units CTV (other than India)
3. Necessary to rationalize R & D efforts, necessary to make its cost
below 1.5% of sales
Product Development
1. i-TV web enabled TV at the price of 13,900 with exchange offer
for an older version.
2. TVs With hard disk to store programs.
3. Wall mounted Flat CTVs at the price of 12,990.
4. Aimed at fulfilling needs of customer who can not buy LCDs but
prefer to do away with CTV models which occupy space in livingrooms.
5. CTVs with inbuilt set top box
6. Tie up with DTH player and provide annual subscription offer.
7. to provide Direct to home services.
8. Bluetooth enabled CTV.
New Product Line
Introduce CCTVs as it has the demand in several areas like restaurants,
airport, railways stations,banks, hospitals, shopping malls, company
offices.
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A lifestyle statement
People do not see the television as a mere electronic device providing
sight & sound. It has now become an entertainment experience and a
lifestyle statement that people are willing to pay for. Since consumers
are ready to shell out money for a lavish entertainment experience,
there is today no limit to the number facilities that a television can
envision of offering. From in built recording to internet facilities to
supreme sound etc. The opportunity for this industry lies in coming up
with new features to the conventional CTV. There is therefore lot of
scope for growth and innovation.