Indian White Goods Industry (LG & Samsung)

8/9/2019 Indian White Goods Industry (LG & Samsung)

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Presented by:M. Arsalan Sheikh (#7989)

Ahsan Bham (#8106)Sobia Khan (#6316)


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` Fastest growing industry in India

` Advertising and brand building has a key role

` Demand is seasonal and cyclical

` Price and brand differentiation

` Technology driven

` Continuous innovation

` Supply and distribution network` High involvement in R&D activities

` After-sales services


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Consumer DurablesConsumer Appliances Consumer Electronics

White Goods Brown Goodsy

M

obile phonesyTelevisionsyMP3 playersyDVD playersyVCD players

yRefrigeratorsyWashing machinesyAir conditionersySpeakers and audio equipment

yMixersyGrindersyMicrowave ovensyIronyElectric fansyCooking rangeyChimneys


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Expected to drive the market to a value of $7.7 billion by the end of 2013, anincrease of 60.7% since 2008. An anticipated CAGR of 10% for the five-year

period 2008-2013 In 2013, the Indian household appliances market is forecast to have a volume of

52.2 million units, an increase of 50.4% since 2008. The compound annual growthrate of the market volume in the period 2008-2013 is predicted to be 8.5%.


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` In term of purchasing power parity (PPP), India($3.55 Trillion) is the 5th largest economy in theworld and overtake Japan in the near future

become the 4th largest.` The middle class in India is fueling economic

growth and disposable incomes are expected togrow at an average of 8.5% per year until 2015.

` The urban market has now largely become aproduct replacement market.


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` Indian consumer durable market is expected toreach Rs. 40 Billion by on 2010

` The Indian household appliances market grew by

32% in 2010.` The top 67 cities in India are the key potential

markets for appliances. These cities contribute14% of the GDP.

` The market share of MNCs in the consumerdurables sector is 65%.


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` The rural market is growing faster than the urban market.

` Rural sector offers huge scope for consumer durables industry, as it

accounts for 70% of the Indian population.

` The urban market and the rural market are growing at the

annual rates of 7%-10%and 25% respectively.

` Rural areas have the penetration level of only 2% and 0.5%

for refrigerators and washing machines respectively.

` In case of television the penetration level is 18%.


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MNCs National R gionalKoro L o Samsungo Hyundai

Onida

id o on

BPL

Kelvinator

All yn

Godrejoltas

IFB

Bush

Cro n

Salora

Weston

Beltak

OskarChinao TCLo Haier

Hollando Phillips

Japano Sonyo Panasoni

o Sharpo Hitachio Sansuio Akaio Ai ao Whirlpoolo Electrolux


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1995-1996 2005-2006 2009-2010

Demand 3.43 million 8.72 million 13.14 million

Penetration level149 per 1,000

households

319 per 1,000

households

451 per 1,000

households


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` Demographic

Income

Occupation

` Geographic

Tier 1 Cities

Tier 2 Cities

` Psychographic

Life style

Personality

` Behavioral

Value

Benefit sought


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` Personal Income

` Availability of financing

` Product affordability

` Increasing share of organized retail

` Entry of heavyweight retail players

` Increasing appreciation of the Rupee

` Technological and design advancements

` Innovative advertising and brand promotion


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Situation

` LG Electronics India Pvt. Ltd., awholly owned subsidiary ofLGElectronics, South Korea was

established in January 1997 afterclearance from the ForeignInvestment Promotion Board.

Growth Strategy

` Focused on innovative, feature-rich

products V

alue-plus platform` Offering affordable products at a

lower margin cutting on volume tobring in revenues

Key Success Factors

` Innovative marketing strategies

LG has differentiated its products usingtechnology and health benefits.

` Local and efficient manufacturing to

reduce cost

Implementing a digital manufacturingsystem (DMS) as a cost-cuttinginnovation.

` Product localization

LG came out with Hindi and regionallanguage menus on its appliances

` Regional channel strategy and wide

distribution networkLG has over 46 branch offices and 110area offices across the country.


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` Objectives

The ai of L is to provide the custo ers with ut ost

satisfaction through leadership.

The funda ental policy of develop ent is to secureproduct leadership that the Custo ers ay have the

ut ost satisfaction.

` Core Competency

Product leadership, Market leadership, People leadership


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` Strength Market leader in home

appliance segment Manufacturing unit in tax-

incentive areas Wide range of product

categories to tap theconsumer upper-middleclass and upper-upper

class LG, having the widest

distribution network in theindustry

Good after-sales services

` Weakness

Consumer compare LG

products with its competitor

Samsung and Sony, not

with other foreign brand

Similar product categories

as compare to its close

competitors Samsung


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Situation

Samsung India Electronics Ltd. is asubsidiary of Samsung ElectronicsCorporation (SEC) headquartered in

Seoul, Korea. Samsung India wasformed in 1995.

Growth Strategy

`Building an affluent customer base

higher priced products

`Creating a premium brand image designand technology innovations

Key Success factors

`Innovative promotion and advertising

Branded its products as superiortechnology and environment friendlyones.

`Launching the best in design and

technologySamsung has won over 150 awardsin India for its technology and designbased products.

`Customized products for its consumers

understands the local culturalsensibilities to customize its products

according to the market.`Manufacturing plant and localization


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` Opportunities

The Indian Mass Market.

The high end value drivenproposition helps increase

the Market Share.

Samsung is well known forit product differentiation

` Threats

Indian Mass Market maybe captured by a rivalcompany, LG, Onida,Videocon;etc.

Increased emergence ofmodern retail chains- aproblem as Samsung isinvesting in building a retail

network across the country


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` Localized positioning

` Focus on local R&D

` Range of products in awide range

` Dealer network is verystrong

` Many products speciallyfor India

` Positioning on a globalbasis

` Centralized R&D

` Lesser Range ofproducts

`

Dealer Network not asstrong

` Less Indian CustomerCentric products

Documents

Indian White Goods Industry (LG & Samsung)