Sales Presentation on LG and Samsung

8/13/2019 Sales Presentation on LG and Samsung

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At the very outset we would like to express our heartfelt gratitude to LGEIL and SEILfor

providing us the relevant information about the functioning of their distribution network

without which this project report would not have been a success.

We would also like to thank to Mr. Sumit Chaudhary, Sr. Sales Executive and also Mr.

Piyush Jain, Marketing Manager of LGEIL on Delhi as well as Mr. Prashant Singh ,

marketing Manager of SEIL on Delhiand all those people at LGEIL.& SElLwho gave

us the courage & inspiration to work zealously on the project assigned to us & do justice to it.

We are extremely thankful to our faculty Prof. Veena Kumar Mamat the Indian Institute of

Planning & Management, New Delhi for her invaluable guidance and suggestions during

the project.

We all would also like to express our gratitude towards our parents from whom we have

inherited all the desired virtues & to whom we look up to as living inspirations.

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This project aims to study the distribution channels, sales network and service patterns

of the consumer durable market (Television) through an analytical and comparative

study of two leading companies- LG Electronics India Ltd. (LGEIL) and Samsung

India Pvt. Ltd. The project also tries to bring out the shortcomings, if any, in thepresent system and thus recommends suggestions to improve the same. These

suggestions are based on the market research conducted by our group.

The project was prepared in accordance to the guidelines provided by our group mentor

Prof. Veena Kumar Mam and the company officials we contacted during this

research. This project report also contains the valuable insights provided to us by

the channel Partners. Two company officials from each company and channel

members were contacted during this project.

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The projects outlines the consumer goods market in the country. We have also provided

a brief history of both the companies which we have chosen.

Further this project explain the distribution pattern of these companies the market

presence and the reasons for their presence in the market.

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CONTENT SLIDE NO.

METHODOLOGY 6

COMPANY BACKGROUND 7-15

INDUSTRY SIZE 16

DATA ANALYSIS 17-26

CONCLUSION 27

RECOMMENDATION 28

BIBLIOGRAPHY 29

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Data sources: Primary and secondary data

Tools: Personal interview, Questionnaire, internet and detailed

checklist etc.

Sample size: 2 Distributors and 10 Retailers.

Field: Delhi & NCR

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Its manufacturing units are in the Grater Noida.

In 2004, LGEIL also setup its Greenfield manufacturing unit in Pune,

Maharashtra that commences operation in Oct 2004.

This is India's first mobile phone manufacturing unit and also Asia's

largest Optical Disc Drive manufacturing plant.

This mainly deals in exports with some of the countries.

Covering over 50 acres, the facility manufactures LCD TV, GSM Phones,Color TV, Air Conditioners. Refrigerators, Microwave Ovens, Color

Monitors.

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In 1993, LG entered the Indian market through a joint venture with

the Delhi based consumer electronics company Bestavision for

selling color televisions under the brand name Gold Star brand.

Both the Indian manufacturing units have been designed with the

latest technologies.

Eco-friendly plants.

LGEIL has achieved a turnover of Rs 20000cr. (approx.) in 2011 in

India.

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Founded in 1938

exporter of dried fish, vegetables, and fruits

flour mill and confectionery machines

1950s Economic Stabilization

Korean War - Samsung lost all assets

aimed to help rebuild Korean economy; entered themanufacturing industry (sugar, fabrics)

became a leader in modern business practices (recruiting from

outside) 1960s Expansion of Key Industries

entered electronics and chemical industries

1969 established Samsung Electronics Co.

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Samsung entered India in December 1995 as a 51:49 joint

venture with Reasonable Computer Solutions Pvt Ltd, owned

by Venugopal Dhoot of the Videocon group.

Samsung buying the total stake of RCSPL in 1998, it became a

wholly-owned subsidiary of its South Korean parent company.

Initially, Samsung launched is operations in North India, and

then slowly expanded its operations.

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No.1Ranked1st among IT firmsin CDLI

31%REDUCTIONGreen house gasemissions cut by 31%

GALAXYSGALAXY S Leading Androidphone in 2010

37PRODUCT

Innovation Award winners

at CES 2011

SALES

In India total sales in 2011is approx. 21000cr.

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Home Multimedia Mobile Multimedia

Personal Multimedia Core Components

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http://samsungelectronics.com/tv/tv_index.htmlhttp://samsungelectronics.com/printer/printer_index.htmlhttp://samsungelectronics.com/tv/tv_index.html


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TERMS LG SAMSUNG

MARKET

SHARE

38% 40%

TURNOVER Currently Rs.20000 Cr. And

it is estimated

it will be grow

or toucharound Rs.

40000 Cr. By

2014.

Currently Rs.

22400 CR. And

it is estimated

it will be grow

or toucharound Rs.

46000 Cr. By

2014.

GROWTHRATE

50% 52%

Total industry size of

consumer electronic in

India is about approx.USD 35 billon and it is

estimated that it will

be grow to become

USD 45 billion in2014

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Three Level Channel

One

LevelTwo Level Channel

Channel

COMPANYWAREHOUSE

BRAND SHOP

CUSTOMERS

COMPANYWAREHOUSE

DIRECTDEALERS

CUSTOMERS

CompanyWarehouse

Distributors Dealers Retailers Customers

CompanyWarehouse

Distributors

Sub DealersCustomers1/18/2014 18GROUP NO. 433


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LG SAMSUNG

The company dispatches the

goods to C/F on consignment

basis.

The C/F agents take care of

companys goods in their

warehouse and transporting the

goods onward.

At the same time, these C/F

agents all work on contract

basis.

C/F work on contract basis.

They get paid as per the amount

they stock.

The ownership of goods are

still owned by the company.

Not disclosed. The C/F are paid a commission

of about 1.5% with additional

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LG SAMSUNG

They select distributors on their financial

strength, reputation in the particular

market as well as experience of their in

that field.

Same criteria but they also select them on

their performance.

The company sends goods to the

distributor on outright sale basis.

Same

It is the duty of the distributor to send his

people into the field to book the orders

and also execute them through their own

delivery vehicles.

The distributors play a vital role in

delivery the goods so they have their own

channel structure for distribution to dealer

and retailers.

The distributor has to maintain his own

sales, delivery and accounts, people for

smooth working of his unit and is served

by the nearest C/F for all his requirements.

Find the margin of 12.5%.

Find the margin of 16-18%.

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LG SAMSUNG

Takes 1 day for CFAs to service reorderwithin their zone.

Same

Distributor too caters to the demand in his

area within 48 hours from the time of

receiving the order.

Here in this activity the time is 30-48

hours.

If goods have to be procured from the

warehouse then it takes 8 days (avg) for

the goods to arrive at the C/F or distributor

and delivered to the stores.

Take 6-7 days .

No inventory management system in place

with the MBOs(Multi brand outlet).

Same

LG Shoppe and franchisee showrooms

do have a system in place to consolidate

their inventory and sales with the

company main office

Digital World, Digital Home, and Digital

Outlets for Samsung products strength

their inventory direct from the company.

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LG SAMSUNGThe retailers order their requirements

directly to the concerned distributors.

Same but retailer also order directly to the

company (minimum or maximum order

conditions and also on daily basis).

The distributors source the orders from the

company warehouses, which are

connected directly with each of the

branches.

Same

Company want a minimum order of

Rs.1to1.5cr. from distributors.

It is about Rs. 75 lakhs to 1 cr. From

distributors.

The mother warehouse in Noida caters to

the needs of all the regional warehouses.

If any reorder do come in during themonth then the regional warehouse that

entertains them properly services them.

The manufacturing unit in Noida and

fulfill all the requirements.

It is the responsibility of the C/F agents to

supply to the distributors as per theirrequirements.

Same

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LG SAMSUNGThe company goes for annual forecasts on

the basis of the previous years sales and

also current trends (on the basis of

market).

Based on past trends i.e. Y/Y and Q/Q

basis.

These sales forecasts are then

disaggregated into monthly sales plans.

Same

The logistics and the production people

meet every 15days, and on the basis of

sales as well as past inventory, they freeze

production for the next 15 days.

Same

In case the sales in the previous period

have not been up to the mark, and the

inventory levels are high, the production is

halted and stock of the situation is taken.

Here this condition not takes place

because company also give the goods

directly to their retailers.

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LG SAMSUNG

Avg. Inventory Size

At Retailers

Rs. 70 Lakh Depending upon in the

movement in the retailers.

Order Cycle 7-8 days.

Company set target on thebasis of their market research.

One week

Credit Period Company does not give.Distributors gives to their

reputed retailers for 15 days.

Company give -------7 days

For Retailers ---------15to 30

days.(by distributors)

Credit Amount And the amount is Rs.10-15Lakh.

Distributors provide about Rs.

5 to 20 Lakh.

Credit On Time Distributor provide somediscounts as 0.5-1%.

1- 2%

Interest Rate 1.5-2% Same1/18/2014 24GROUP NO. 433


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LG SAMSUNGMarket Research Once in 3 months.

For customers, channel

members and market survey.

Generally cover qualitative

and analytical research.

Same but Depends upon

product launch and sales

forecast.

Motivation To

Channel Members

Through gifts, and discounts. Through monetary and non

monetary ways.

Training Channel

Members

Company does not have any

scheme.

In terms of product features,

design of the store, the layout

and the lighting.

Evaluating Channel

Members

Through sales quota,

cooperation in companys

promotion activities.

Through customer delivery

time, feedback provided by

dealers and customers and

their performance.

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LG SAMSUNGReverse Logistic The company accepts returns

from their retailers as well as

company owned stores.

Same

Channel Conflicts LG owned exclusive outlets.MBOs (multi brand outlets).

Another type of conflict could

be a result of institutional

sales being sourced by both.

Sales target is not achieved

by distributors.

Same

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Our study found that, the dealers are somewhat satisfied with the LGCompany but some retailers are not satisfied by the company neitherin the way of credit facility nor by the distribution system of LG.

About the LG company we found that LG having a good position inthe market in terms of pricing but lacking badly in terms of its

retailer satisfaction.

Customer gets to know more by the television and they areinfluenced to buy new products by the unique products that are newto the market.

Our study also found that there are various factor influencingcustomer in buying decision and the most influencing factor is brandimage and advertisement and other factors play a secondary role in

buying decision.

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Both the companies should make advertisement of their productsaggressively in the way of hoardings which increase the morevisualizes customer.

In LG Company should provide credit facility to the dealer in a betterway by which they can increase their sale.

In both the companies Dealers should consider the demand of peopletime to time so that they come to know what people want in a particular

period of time.

LG needs to mend and maintain its service network and adopt a goodpricing strategy.

They should make their channel members more effective to increasetheir sales.

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www.businesstoday.com

www.indiatoday.com

www.lg.com/in www.samsung.com/in

www.economictimes.com

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http://www.businesstoday.com/http://www.indiatoday.com/http://www.lg.com/inhttp://www.samsung.com/inhttp://www.economictimes.com/http://www.economictimes.com/http://www.samsung.com/inhttp://www.lg.com/inhttp://www.indiatoday.com/http://www.businesstoday.com/


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Documents

Sales Presentation on LG and Samsung