Tarak Kumar Jana - Lg Marketing Project

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A

DISSERTATION PROJECT REPORT

ON

MARKETANALYSISOF LG CONSUMERDURABLES

Guided byProf. Arunangshu SenguptaSenior Faculty (Marketing)

Submitted By

Tarak Kumar Jana

Roll No. 521055219

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Acknowledgement

It is indeed of great moment to pleasure to express my senses of per found gratitude &

indebtness to all the people who have been instrumental in making my tanning a rich

experience. I got the opportunity to do a challenging project in LG ELECTRONIC (INDIA)

The project is the important part of our study and gives us a real practical exposure to the

corporate world and it is almost impossible to do the same without the guidance of peoples

in and around us. Similarly while doing the topic Market Survey on LG consumer

durables as a dissertation trainee I took many my projects in help.

It gives me immense pleasure to acknowledge LG

ELECTRONICS INDIA Ltd., which has been nice enough to give me a chance to do my

dissertation project providing me wonderful support through out my training period and

afterward.

Tarak Kumar Jana

Roll no. 521055219

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Arunangshu Sengupta

R.I.B.S, Bhilai

FACULTY GUIDE CERTIFICATE

This is to certify that Tarak Kumar Jana, a student of Renaissance Indira

Business School, Bhilai; pursuing his MBA (Marketing) has worked

under my guidance and supervision on his Work entitled Market

Survey on LG consumer durables. To the best of my knowledge this is

an original piece of work.

(Arunangshu Sengupta)

Faculty Marketing

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DECLARATION

I will take pleasure in declaring that the dissertation project work that is

under taken by me is an original and authent ic work done by me. Thisdissertation project is being submitted by me for the partial fulfillment for

award of Master in Business Administration from Renaissance Indira

Business School, Bhilai.

Tarak Kumar Jana

Roll no. 521055219

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Executive summary

Indian Consumer durables market used to be dominated by few domestic players like

godrej Voltas allwyn and kalvinater. But post liberalization much foreign company haveentered into Indian market dethroning the Indian player and dominating Indian market the

major categories in the market CTV, REFRIGRATOR, AIR CONDTIONERS AND

WASHING MACHINE

India being the second largest growing economy with huge consumer class has

resulted in consumer durables as the fastest growing industries in India LG, SAMSUNG

the two Korean companies has been maintaining the lead in the industries with LG being

leader in almost all the categories.

The rural market is growing faster than the urban market, although the penetration level is

much lower .The CTV segment is expected to the largest contributing segment to the

overall growth the industry. The rising income levels double-income families and

consumer awareness are the main growth drivers of the industries.

Consumer durables major LG Electronics India Pvt Ltd (LGEIL) will invest nearly Rs 500

crore in India this year in research and development, brand-building and other marketing

initiatives.

The company, having a turnover of Rs 9,500 crore and market share of 26 per cent, is

investing Rs 360 crore on brand-building and other marketing initiatives and around Rs

140 crore on research and development, besides launching new platforms in information

technology and related areas,

LGs innovative 211 campaign to provide quality after-sales service, will also be

expanded from the existing 22 to 40 cities by next month, The campaign, for which IT

infrastructure has been set up, includes the companys response to customer complaint

within two hours. The fixing time for complaints varies from one hour to a maximum of24 hours.

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Scope of project

This project gives me great exposure to the consumer durable market because it includes

product knowledge and the filed job in which I have visited the store comes under theregion of Pune. During this project I also took part in the exhibition of LG which held for

the purpose branding and awareness of LG product. This project helps me to know the

market practically. My job was during this project to see the market share and also the

display share of the LG product in the store. LG always insist the 50% display share of LG

product because LG believes that JO DIKHTA HAI WO BIKTA HAI.

Key findings:-

1. By calculating the display share we found that in most of store LG has 50% display

share almost all categories.

2. By the actual monthly sale of particular store we came to know the capacity of the

store and how much product can they sale.

3. It helps us to know that weather dealer is capable of being a direct dealer of LG or

not and it also helps to find out the new dealer who are capable of being the dealer

of LG.

4. We also came to know while visiting the shops that there was big problem of after

sale service.

5.

Many dealers were facing the problem of after sale service because there is nofollow up calls from LG.

6. Demo calls also not done properly.

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INTRODUCTION

Before the liberalization of the Indian economy, only a few companies like

Kelvinator, Godrej, Allwyn, and Voltas were the major players in the consumer

durables market, accounting for no less than 90% of the market. Then, after the

liberalization, foreign players like LG, Sony, Samsung, Whirlpool, Daewoo, and Aiwa

came into the picture. Today, these players control the major share of the consumer

durables market.

Consumer durables market is expected to grow at 10-15% in 2011-2012. It is

growing very fast because of rise in living standards, easy access to consumer finance,and wide range of choice, as many foreign players are entering in the market

With the increase in income levels, easy availability of finance, increase in consumer

awareness, and introduction of new models, the demand for consumer durables has

increased significantly. Products like washing machines, air conditioners, microwave

ovens, color televisions (CTVs) are no longer considered luxury items. However, there

are still very few players in categories like vacuum cleaners, and dishwashers

Consumer durables sector is characterized by the emergence of MNCs, exchange

offers, discounts, and intense competition. The market share of MNCs in consumer

durables sector is 65%. MNC's major target is the growing middle class of India.

MNCs offer superior technology to the

Consumers whereas the Indian companies compete on the basis of firm grasp of thelocal market, their well-acknowledged brands, and hold over wide distribution

network. However, the penetration level of the consumer durables is still low in India.

Classification of consumer durables sector

1. Consumer electronic include vcd/dvd, home theatre, music player, color television(CTVs), cameras, camcorders, portable audio, Hi-Fi, etc

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2. White goods include dishwashers, air conditioners, heaters, washing machines,

refrigerators, vacuum cleaners, kitchen appliances, non-kitchen appliances,

microwaves, built-in appliances, Tumble dryer, personal care product etc.

3. Moulded luggage include plastics

4. Clocks and watches

5. Mobile phones

Scope

1. In term of purchasing power parity (ppp), India is the 4th largest economy in theworld and overtake Japan in the near future become the 3rd largest.

2. Indian consumer durable market is expected to reach $600 billion by on 2015

3. India has the youngest population amongst the major countries. There are lot of

people in the different income categories nearly the two third population is below

the age of 35 and nearly 50% is below 25.

4. There are 56 million people in middle class, who are earning us$4,400-US$21,800 ayear. And there are 6 million rich household in India.

5. The upper-middle and high-income household in urban areas are expected to grew

to 58.2 million in 2013 as against 27.6 million in 2007 .

Opportunity

1. In India the penetration level of white goods is lower as compared to other

developing countries.

2. Unexploited rural market.

3. Rapid urbanization.

4. Increase in income level, i.e.increase in purchasing power of consumers.

5. Easy availability of finance.

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Threats

Higher import duties on row materials.

Cheap imports from Singapore, China and from other Asian countries.

Brands in consumer electronic sector

MNCs NATIONAL REGIONAL

LG )SAMSUNG ) KOREA ONIDA BUSHHYUNDAI ) VIDEOCON CROWN

BPL SALORATCL ) CHINA GODREJ T-SERIESHAIER ) VOLTAS WESTON

IFB BELTAK PHILIPS ) HOLLAND OSKAR

PANASONIC )SHARP )HITACHI )

SANSUI ) JAPANAKAI )AIWA

WHIRLPOOL )ELECTROLUX

TODAYConsumer durables sector is characterized by the emergence of MNCs, exchange

offers, discounts, and intense competition. The market share of MNCs in consumer

durables sector is 65%. MNC's major target is the growing middle class of India. MNCs

offer superior technology to the

LG, SAMSUNG the two Korean companies has been maintaining the lead in the

industries with LG being leader in almost all the categories.

The company, having a turnover of Rs 9,500 crore and market share of 26 per cent, is

investing Rs 360 crore on brand-building and other marketing initiatives and around Rs

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140 crore on research and development, besides launching new platforms in information

technology and related areas,

LG Electronics is one of the leading companies in the field of electronics with a globalpresence in many countries. . Before briefing, I have divided the introduction part into

three main sub parts.

1. LG Global

2. LG India

3. LG Pune

History of company

The company was originally established in 1958 as Gold Star, producing radios, TVs,

refrigerators, washing machines, and air conditioners.

The LG Group was a merger of two Korean companies, Lucky and Gold Star, from which

the abbreviation ofLG was derived. The current "Life's good" slogan is a backronym.

Before the corporate Name change toLG, household products were sold under the Brand

name ofLucky, while electronic products were sold under the brand name of Gold Star.

The Gold Star brand is still perceived as a discount brand.

In 1995, Gold Star was renamed LG Electronics, and acquired Zenith Electronics of the

United States.

Global Operation

LG Electronics is playing an active role in the world market with its assertive global

business policy. As a result, LG Electronics controls 110 local subsidiaries in the world

with around 82,000 executive and employees.

LG Group10
http://en.wikipedia.org/wiki/LG_Grouphttp://en.wikipedia.org/wiki/LG_Group


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1. LG.Philips LCD

2. LG Chemical

3. LG Telecom

4. LG Powercom

5. LG Twins

6. LG Dacom

Business areas and main products

Mobile communications(a) CDMA Handsets,

(b)GSM Handsets,

(c) 3G Handsets,

(d)Cellular Phones

Digital appliance

a) Air Conditioners,

b) Refrigerators,

c) Microwave Ovens,

d) Washing Machines,

e) Vacuum Cleaners,

f) Home Net,

g) Compressors for Air Conditioners and Refrigerators

Digital display

a) Plasma TVs,

b) LCD TVs,

c) Micro Display Panel TVs,

d) Monitors,e) PDP Modules,

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http://en.wikipedia.org/wiki/LG.Philips_LCDhttp://en.wikipedia.org/wiki/LG_Chemicalhttp://en.wikipedia.org/wiki/LG_Telecomhttp://en.wikipedia.org/wiki/LG_Powercomhttp://en.wikipedia.org/wiki/LG_Twinshttp://en.wikipedia.org/wiki/LG_Dacomhttp://en.wikipedia.org/wiki/Air_conditioninghttp://en.wikipedia.org/wiki/Refrigeratorhttp://en.wikipedia.org/wiki/Microwave_ovenhttp://en.wikipedia.org/wiki/Washing_machinehttp://en.wikipedia.org/wiki/Vacuum_cleanerhttp://en.wikipedia.org/wiki/Compressorshttp://en.wikipedia.org/wiki/Plasma_displayhttp://en.wikipedia.org/wiki/Liquid_crystal_display_televisionhttp://en.wikipedia.org/wiki/LG.Philips_LCDhttp://en.wikipedia.org/wiki/LG_Chemicalhttp://en.wikipedia.org/wiki/LG_Telecomhttp://en.wikipedia.org/wiki/LG_Powercomhttp://en.wikipedia.org/wiki/LG_Twinshttp://en.wikipedia.org/wiki/LG_Dacomhttp://en.wikipedia.org/wiki/Air_conditioninghttp://en.wikipedia.org/wiki/Refrigeratorhttp://en.wikipedia.org/wiki/Microwave_ovenhttp://en.wikipedia.org/wiki/Washing_machinehttp://en.wikipedia.org/wiki/Vacuum_cleanerhttp://en.wikipedia.org/wiki/Compressorshttp://en.wikipedia.org/wiki/Plasma_displayhttp://en.wikipedia.org/wiki/Liquid_crystal_display_television


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f) OLED Panels,

g) USB Memory,

h) Flat Panel Computer Monitors

Digital media

a) Home TheaterSystems,

b) DVD Recorders,

c) Super Multi DVD Rewriters,

d) CDRW,

e) Notebook PCs,

f) Desktop PCs,

g) PDAs,

h) PDA Phones,

i) MP3 Players,

j) New Karaoke Systems,

k) Car Infotainment

LG BRAND IDENTITY:-

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http://en.wikipedia.org/wiki/Computer_Monitorshttp://en.wikipedia.org/wiki/Home_cinemahttp://en.wikipedia.org/wiki/DVD_recorderhttp://en.wikipedia.org/wiki/Digital_audio_playerhttp://en.wikipedia.org/wiki/Computer_Monitorshttp://en.wikipedia.org/wiki/Home_cinemahttp://en.wikipedia.org/wiki/DVD_recorderhttp://en.wikipedia.org/wiki/Digital_audio_player


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1. Learning Culture

2. Boundary less Environment

3. A Carrier

4. Growth

According to LG, the Learning Culture continuously helps the employee to learn more

and more to develop the habit of continuous learning.

Boundary less Environment means that there is no difference between the levels of

employees. There is transparency between the work and mutual understanding between all

the employees.

A carrier is highly growing in LG and one who is the employee can develop their carrier

largely. A new comer will feel fully comfortable in the company and for a new comer the

company is very helpful in the overall growth of personality.

Growth in LG is very high for those who are in the company and for those who want to

join in LG. The company is growing with fast innovation and the BLUE Ocean strategy is

one of the examples of growth.

Mission

The mission of LG is to provide the customers with utmost satisfaction through leadership.

The fundamental policy of development is to secure product leadership that the

Customers may have the utmost satisfaction.

Product Leadership

We are focusing on six development areas to become the product leader.

1. New Machine

2. Reliability

3. Conventional Installation

4. Environment Friendly Product

5. Low Noise & Vibration

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6. Energy Saving

Quality Innovation

The policy of quality assurance is to provide customers with utmost satisfaction by

supplying zero defects.

LG proceeds in a hierarchal manner. It is named as LG WAY.

From top to bottom:

No.1 LG is the VISION

Jeong-DO Managementis LGs unique application to ethics. LG will succeed through

fair management practices and constantly developing our business skill.

a) Honest with our customer

b) Providing great values to customer through constant innovation & and development.

c) Equal opportunities

d) Equal Treatment

Management Principle - Creating value for customer

Code of conduct of LG:

1. Responsibility and obligations to customers :

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Respect for Customers

Creating Value

Providing Value

2 Fair competition Pursuit of Free Competition

Compliance with Laws and Regulations

3 Fair Transaction : Equal Opportunity

Fair Transaction Procedure

Support and Aid for Business Partners

4 Basic Ethics for Employees

Basic Ethics Completion of Duty

Self Development

Fairness in Performance

Avoidance of conflict with company interest

5 Corporate Responsibilities to employees Respect for human dignity

Fair Treatment

Promoting Creativity

6 Responsibilities to society and country

Rational Business Development

Protection of stock holder interest

Contribution to social development Environmental Conservation

LG INDIA:

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LG Electronics India Pvt. Ltd., a wholly owned subsidiary of LG Electronics, South Korea

was established in January 1997 after clearance from the Foreign Investment Promotion

Board (FIPB). LG set up a state-of-the art manufacturing facility at GreaterNoida, near

Delhi, in 1998, with an investment of Rs 500 Crores.

LG corporate office is located at Plot no.51, Udyog Vihar, Kasna Road, Greater Noida,

India.

This facility manufactured Color Televisions, Washing Machines, Air-Conditioners and

Microwave Ovens.

''Company is setting up a chain of exclusive premium showrooms. LG plans to launch 60

premium Brand Shoppes by the end of the first quarter of this year. At present, LG has a

total of 83 LG stores across the country, of which 45 are shoppes and 38 are exclusive

stores. Brand shoppes will be placed in the premium segment and the target audience will

comprise buyers interested in premium and high end products.

LG Brand Shoppe goes beyond the concept of a normal exclusive store by having a more

interactive environment and additional lifestyle orientation on display so that the customer

can actually experience the LG products in his or her own home settings.

LG Electronics India Ltd (LGEIL), consumer durables leader with 27% market share, is

planning a brand new image. To attract inspirational and young consumers across India,

company will roll out a new marketing strategy. The exercise will cost the company Rs

360 crore.

LG Electronics India is the fastest growing company in the consumer electronics, home

appliances, and computer peripherals industry today.

LG Electronics is continually providing, superior technology products & value for money

to more than 50 lakh households in India. LGEIL is celebrating the 11th anniversary

this year.

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LG Soft India the innovation wing of LG Electronics in Bangalore is LG Electronics'

largest R&D centre outside Korea. We at LGSI focus on niche technology areas such as

mobile application development, digital video broadcast and biometrics software and

support LG Electronics with our expertise. Motivated by a passion for technology, a

strong work culture and loyalty to the organization, we are determined to see LG become

one of the top three brands globally.

Prominent consumer electronic company, LG Electronics Inc. has said that it expects the

sale of its products in India to up by 15 per cent in 2012. Moon Bum Shin, managing

director of LG Electronics India has said that the company has earmarked 8.8 billion

rupees for investment purpose in India this year. The said money will be used to market as

well as manufacture new products.

LG Electronics, which is originally a South Korean Company with branch in India,

informed that its sales of GSM mobile phones, color televisions, air conditioners and other

household goods in the Indian market was to the tune of 95 billion rupees ($2.4 billion) in

2011. As per Shin's estimate, the sales in 2012 would be around 310 billion rupees.

In order to achieve its target, Shin said LG Electronics will concentrate on catering to the

high-end consumer market which will help boost sales this year. India churns out six (6)

per cent of LG Electronics global revenues of $42 billion. The Indian branch of LG

exports to 40 countries.

India challenges

The challenges faced by LG when entered in Indian market

1. Low brand awareness about LG in India.

2. One of the last MNCs entered in India (Samsung, Panasonic entered in 1995 in

India).

3. High import duty

4. Compitition from local market players and other MNCs in consumer durable

segment.

5. Price sensitiveness of the Indian consumer

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LGEI over comes these challenges to emerge as

Innovative marketing strategy

1. Launch new technologies in consumer electronic and home appliances.

2. LG was the first brand to enter in cricket in big way a way, by sponsoring the 1999

world cup followed it up in 2003 as well.

3. LG brought in four captains of the Indian cricket team to endorse its products. LG

invested more then US$ 8 million on advertising and marketing in this sport.

4. LG has differentiated its product using technology and health benefits. CTV has

Golden eye technology Air conditioner has Health air system and microwave

ovens have the Health wave system.

Local and efficient manufacturing to reduce the cost

To overcome high import duties LG manufactures TV refrigerator in India at

manufacturing facility at Noida and Pune. LGEI had already commissioned contract

manufacturing at Mohali Kolkata and Bhopal for CTVs. This has helped LGEI to reduce

cost. LGEI implementing the Digital manufacturing system (DMS) as the cost cuttinginnovation this system is follow-up to the six sigma exercise LGEI had initiate earlier.

R&D potential

LG has the research and development facilities in Bangalore and Pune. Both the unit carry

out R&D department for the domestic as well as the parent company it also dose

customize R&D for the specific countries to which it export product.

Regional channel and wide distribution network

1. LG has adopted the regional distribution channel in India. All the distributers work

directly with the company. This has resulted in quicker rotation of the stock and

better penetration into B, C, D, class market.

2. LG also follows the stock rotation policy rather then dumping stock on channel

partners.

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Product localization:-

1. Product localization is the key strategy used by the LG

2. LG came out with Hindi and regional language menus on its TVs.

3. Introduced the low-priced Cineplus and sampooma for the rural market.

4. LG was the first brand to introduce gaming in TVs in continuations of its

association with cricket LG introduce cricket game in CTVs

MAJOR KEY SUCCESS FACTORS

1. Innovative marketing - LG was the first brand to enter cricket in a big way, by

sponsoring the 1999 World Cup and followed it up in 2003 as well.

2. Local and efficient manufacturing to reduce cost - To overcome high import duties,

LG manufactures PC monitors and refrigerators in India at its manufacturing facility

at Noida, Delhi.

3. Commissioned contract manufacturing at Mohali, Kolkata and Bhopal for CTVs.

4. Product localization - Product localization is a key strategy used by LG. It came out

with Hindi and regional language menus on its TV.

5. Regional distribution model - This has resulted in quicker rotation of stocks and

better penetration into the B, C and D class markets.

6. Leveraging Indias IT advantage - LG Electronics has awarded a contract to

develop IT solutions to LG Soft India (LGSI). The project involves developmentand support for ERP, SCM, CRM and IT-enabled services for LG.

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Strategies adopted by the organization

LG follows 10 commandments which are as follows.

1. Foster working environment-5S Environment

2. Fast execution is key to success

3. Transparent and fast communication-open communication

4. Update market -knowledge Demographics

5. Win Win relationship with the trade partners

6. Customer is the king

7. Even Billing Road to ach supplier A

8. Be in touch with the market (70% Market, 30% Office).

9. Plan and Execute annual marketing Calendar-Time to market

10.Display share of 50% -to get 50% consumer share.

LG market share of consumer appliances and consumer electronic:-

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LG position of CTV in various states in India

LG position of AC in various States in India

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LG position of Audio & Home Theater in various in India

LG position of DVD in various in India

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LG position of MWO in various states in India

This analysis is based on the ORG survey conducted by LG which represent the LG

position of different consumer durables in various states in India. I select different brand

in different category as per the market share and the demand of product in market. This

analysis represents the LG market position during the period of March 2012. It shows that

LG has captured maximum market share almost in every category. LG and Samsung have

the maximum market in consumer durable market but LG dominate the almost all the

category in consumer durable.

Prominent consumer electronic company, LG Electronics Inc. has said that it expects thesale of its products in India to up by 25 per cent in 2012. Moon Bum Shin, managing

director of LG Electronics India has said that the company has earmarked 4.8 billion

rupees for investment purpose in India this year. The said money will be used to market as

well as manufacture new products.

LG Electronics, informed that its sales of GSM mobile phones, color televisions, air

conditioners and other household goods in the Indian market was to the tune of 95 billion

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rupees ($2.4 billion) in 2012. As per Shin's estimate, the sales in 2013 would be around

110 billion rupees.

In order to achieve its target, Shin said LG Electronics will concentrate on catering to the

high-end consumer market which will help boost sales this year. India churns out six (6)

per cent of LG Electronics global revenues of $42 billion. The Indian branch of LG

exports to 40 countries. Shin remarked that the company was targeting an increase of

exports to $400 million in 2012 from $270 million in 2011.

.The key strategies being implemented include increasing the number of its regional

offices from six to eight. LG has split its southern regional office into two, one comprising

the states of Tamil Nadu and Kerala and the other consisting of Andhra Pradesh and

Karnataka. In addition, it has split one of its northern regional offices by making Uttar

Pradesh a separate region after spinning it out from Delhi NCR. The other four regional

offices take care of East, Gujarat and Madhya Pradesh, Maharashtra & Goa and Punjab,

Haryana & Rajasthan respectively.

In the coming year, LG is also repositioning its marketing spends, resulting in a significantincrease in its mass media expenditure for better brand visibility. LG had a marketing

budget of Rs 620 crore in 2012 with a 60:40 split in favor of below-the-line activities.

Next year, the company plans to increase the share of mass media even as overall

marketing spends would be raised by just about 10-15%.

Distribution and Marketing

The company has number of dealers and warehouses. They have LG exclusive shopee. For

the marketing of the products a number of activities are followed

1. Exhibitions are conducted from time to time.

2. Society and college activities are conducted.

3. Hoarding, Posters, banners are used so as to grab the attention of the

costumers.

4. Day to day advertisement in leading newspaper.

5. Discount at festival time.

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6. For dealer relationship they arrange dealer meting at several time in the year

7. LG divide dealer in gold silver etc. category to know the performance of the

dealers.

8. They have their sales persons at various sub dealer store and at mordent trade

store for particularly for the promotion of the LG product.

9. LG also uses the radio FM for the promotion activities.

10. Also provide capon and scratch card for festive season.

CUSTOMERSERVICE

The best and the biggest international brands are here in India but the irony if it all:

where is the after-sales-service? So integral to a brand, so critical for its success and so

taken for granted in developed markets! In India, after sales service is, for want of a better

description, the pits. So whats stopping the best companies from pulling out all the stops

when it comes to providing the best service? Do customers expect for too much? Or is it

that in India they dont really care. Brand Equity fanned out to MNC as well as Indian

consumer durable companies, stockiest and dealers, analysts and market researchers to get

a feel of whats really keeping after sales from being used as a cutting edge marketing tool

in pushing products across categories.

Customers support following the purchase of a product or service. In some cases, after-

sales service can be almost as important as the initial purchase. The manufacturer, retailer,

or service provider determines what is included in any warranty (or guarantee) package.

This will include the duration of the warranty traditionally one year from the date of

purchase, but increasingly two or more years maintenance and/or replacement policy,

items included/excluded, labor costs, and speed of response. In the case of a service

provider, after-sales service might include additional training or helpdesk availability. Of

equal importance is the customer's perception of the degree of willingness with which a

supplier deals with a question or complaint, speed of response, and action taken.

LG also had a big problem of after saleservice in India. During my project I also came

to know that after sale service becomes the big issue in Pune region. Customers as well as

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dealer were facing the problem of after sale service. Because of this problem many dealer

in Pune region were not ready to sale LG product. So it becomes the big issue.

But LG has taken some solid steps towards improving customers perception andexperience of after sales service. Because it very important in competitive market to

provide the best service.

L G Electronics has signed a memorandum of understanding with 23 Industrial Training

Institutes to strengthen its after sales service in India.

The company aims to recruit 10,000 people by the end of this year as a part of its brandingstrategy to focus on service and move away from discounting.

L G Electronics has identified eight states with high after sales service call rates to ink the

deals with the ITI. Y V Verma, director HR and management system, LG Electronics said,

"The Company was trying to find a solution for effective after sales service since last two

years. There is a huge need of trained manpower for the after sales service to align with

the company's expansion and focus on the GSM mobiles and the personal computer

segments."

1. In the initial phase the company has entered into agreements with ITIs in the states

like Maharashtra, Gujarat, Delhi, Punjab, Assam, and Karnataka and is in the

last leg of signing with Uttar Pradesh.

2. L G Electronics, with 1200 service centers, has already recruited 300 students and

plans to beef up the number to 10,000 by the year-end.

3. "The company has offered a scholarship to the selected students for the last six

months of their training programme."

4. The company will invest Rs 8 crore (Rs 80 million) in employee development

programme this year with an aim to attain an 8 per cent attrition rate.

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5. The company moved away from the discounting strategy since last year and is

putting thrust on the quality and service in its brand communication to position LG

as a premium consumer electronics brand.

6. At the top, the Service Division in Korea reports to the Global CMO. (As

mentioned in Dermots public interview in ET on Wednesday). This shows

commitment that Service must be made into a marketing differentiator, and

leveraged thus.

7. LG has the widest service network across the country; some estimates put it at a

significant multiple of service-infrastructure from our nearest competitor. While thesale size may also be a nice multiple from nearest, it shows the company is ready to

put our money where our mouth is.

8. The company has introduced a 211 service - once you register your complaint, we

will call you back in 2 hours (hence 2), set up an appointment for the next

convenient day for you (hence the first 1), and show up in the promised 1-hour slot

(hence the second 1). If the next convenient day for you is the next day, thats great

too. Its a disruptive action in an industry (including LG) having traditionally shied

away from its service responsibilities, and thus not leveraging any mileage from it.

9. The company is promoting 211 through ATL, probably the first time after-sales

service is being communicated in this fashion by any product company. You may

have seen the TV commercial or heard the radio advert or seen the newspaper ad or

in-shop posters, both of which revolve around prompt response.

10.The first LG-owned service centre opened in Gurgaon. (Service in India generally

works through authorized service centers, in LGs case they work exclusively for

LG.) A company-owned service centre tries that much harder, knows things better,

and can even contribute as a revenue center.

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Objective of the project

Primary objective

The main objective of filed survey during the project was to find out the market

share of the LG and also calculate the display share.

Find out the positional dealer who can sale the LG product in large volume.

The main objective of research was to identify potential dealer and development

these dealer. So LG can make them their direct dealer.

This will ease the dependence on the some big dealer like Prithvi electronics and

Jain Sales, Bhiai.

Find out the problem faced by the dealer in sales and the distribution.

Secondary objective

The Objective was to find out that how far the exhibitions are helpful in branding,

While purchasing the consumer durables which parameter is most important for the

consumer?

Do the consumers prefer the financial facility for buying consumer durable?

How frequently consumers change the consumer durable?

To enhances the knowledge of consumer durable market.

To increases the knowledge consumer durable product of LG.

To enhances the knowledge about the marketing and branding activity.

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Research Methodology:

Research methodology is considered as the nerve of the project. Without a proper

well-organized research plan, it is impossible to complete the project and reach to

any conclusion. The project was based on the survey plan. The main objective of

survey was to collect appropriate data, which work as a base for drawing conclusion

and getting result.

Therefore, research methodology is the way to systematically solve the research problem.

Research methodology not only talks of the methods but also logic behind the methods

used in the context of a research study and it explains why a particular method has been

used in the preference of the other methods

Research design:

Research design is important primarily because of the increased complexity in the market

as well as marketing approaches available to the researchers. In fact, it is the key to the

evolution of successful marketing strategies and programmers. It is an important tool to

study buyers behavior, consumption pattern, brand loyalty, and focus market changes. A

research design specifies the methods and procedures for conducting a particular study.

According to Kerlinger, Research Design is a plan, conceptual structure, and strategy of

investigation conceived as to obtain answers to research questions and to control variance.

Types of research is:

Descriptive Research

The type of research adopted for study is descriptive. Descriptive studies are undertaken in

many circumstances when the researches is interested to know the characteristic of certain

group such as age, sex, education level, occupation or income. A descriptive study may be

necessary in cases when a researcher is interested in knowing the proportion of people in a

given population who have in particular manner, making projections of a certain thing, or

determining the relationship between two or more variables. The objective of such study is

to answer the who, what, when, where and how of the subject under investigation. There

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is a general feeling that descriptive studies are factual and very simple. This is not

necessarily true. Descriptive study can be complex, demanding a high degree of scientific

skill on part of the researcher.

Descriptive studies are well structured. An exploratory study needs to be flexible in its

approach, but a descriptive study in contrast tends to be rigid and its approach cannot be

changed every now and then. It is therefore necessary, the researcher give sufficient

thought to framing research.

Questions and deciding the types of data to be collected and the procedure to be used in

this purpose. Descriptive studies can be divided into two broad categories: Cross Sectionaland Longitudinal Sectional. A cross sectional study is concerned with a sample of

elements from a given population. Thus, it may deal with household, dealers, retail stores,

or other entities. Data on a number of characteristics from sample elements are collected

and analyzed. Cross sectional studies are of two types: Field study and Survey. Although

the distinction between them is not clear- cut, there are some practical differences, which

need different techniques and skills. Field studies are ex-post-factor scientific inquiriesthat aim at finding the relations and interrelations among variables in a real setting. Such

studies are done in live situations like communities, schools, factories, and organizations.

Another type of cross sectional study is survey result, which has been taken by me. A

major strength of survey research is its wide scope. Detail information can be obtained

from a sample of large population .Besides; it is economical as more information can be

collected per unit of cost. In addition, it is obvious that a sample survey needs less time

than a census inquiry. Descriptive research includes survey and fact finding enquiries of

different kinds of the major purpose. Descriptive research is description of the state of

affairs, as it exists at present. The main characteristic of this method is that the researcher

has no control over the variables; he can only report what has happened or what is

happening. The methods of research utilized in descriptive research are survey methods of

all kinds including comparative and co relational methods. The reason for using such

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needs to be flexile in its approach, but a descriptive study in contrast tends to be rigid and

its approach cannot be changed ever now and then.

Data collection methods:

After the research problem, we have to identify and select which type of data is to

research. At this stage; we have to organize a field survey to collect the data. One of the

important tools for conducting market research is the availability of necessary and useful

data.

Primary data: For primary data collection, we have to plan the following four important

aspects.

Sampling

Research Instrument

Secondary Data - The Companys profile, journals and various literature studies

are important sources of secondary data.

Data analysis and interpretation

1. Questionnaires

2. Pie chart and Bar chart

Questionnaires:

This is the most popular tool for the data collection. A questionnaire contains question that

the researcher wishes to ask his respondents which is always guided by the objective of

the survey.

Pie chart:

This is very useful diagram to represent data , which are divided into a number of

categories. This diagram consists of a circle of divided into a number of sectors, which are

proportional to the values they represent. The total value is represented by the full create.The diagram bar chart can make comparison among the various components or between a

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Bar chart:

This is another way of representing data graphically. As the name implies, it consist of a

number of whispered bar, which originate from a common base line and are equal widths.

The lengths of the bards are proportional to the value they represent.

Preparation of report:

The report was based on the analysis and presented with the findings and suggestions. The

sample of the questionnaires is attached with the report itself.

Sampling Methodology:

Details of the sampling methodology, I have made questionnaire. The one is made for the

Customer.

No. of questions in questionnaires for customer: 07

No. of question related to LG product: 03

No. of people met during the research: 200

No. of respondents during the research: 50

Sample unit

Professionals, Business man,

Employees, House wife,

Working women, Students

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Analysis:

Q1. Have you purchased any consumer durable during Exhibitions?

Yes

No

Inferences

1. 65 % of Customers have not purchased any consumer durable from exhibitions.

2. Only 35 % people have purchased.

3.

It shows that consumers are coming in the exhibition for knowledge of product andalso they want to know that weather there is actual price difference in exhibition

and shop or not.

4. Consumers also want to compare to the different brand which are available in the

exhibition.

5. So exhibitions are more useful to increases brand awareness.

6. People are less interested to purchase product from the exhibition.

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Q.2While purchasing consumer durable which parameter influences you?

Price

Product feature

Brand

Service

Durability

Inference

1. 30% of customer gives importance to price. So it shows that Indian consumers are

very price sensitive. They give more importance to price over the brand.

2. 26% give importance to brand. So price and Brand matter a lots for the costumers.

And they are also want best brand in best price.

3. 19% to product feature Service 16% and durability 9% Service is also a big factor

for the customer they are less interested in the durability.

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Q3. From where you prefer buying consumer durables

Exhibitions

Co.shoppee

Showroom

Inference:

1. A majority of customers prefer to buy from showrooms. Very less proposition of

customers buys from Exhibitions.

2. 47% customers are prefer to by from the showrooms because the showrooms are

more convenient to customers they also think that these shops give more discounts.

3. People are less interested to buy from the exhibition they only visit the exhibition

for price quotation of the product and the comparison of the product.

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Q.4.You prefer to buy from the same as you have mentioned in Q.3 because of

following reasons

Attractive Price

Service

Demonstrations

Offers

Inference

1. Customers buy from showrooms because of the service and convenience. These are

two main factors.

2. Customers are preferred to buy from the showroom because of they think that these

convenient store may provide good after sell service.

3. Customer also thinks that there is more chance to bargain and they can get more

discounts in these showrooms.

4. Price also a factor that attract the customer in these showrooms.

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Q.5.Which consumer durable you have and of which brand?

CTV

LCD

PLASMA

REF

WM

MW

AC

Inference

In CTV section maximum customers have Onida, in LCD Sony is the leader, In plasma

BPL is the leader, In Ref LG is the leader, MW LG is the leader. In WM there are

companies and in AC also.

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Q.6. How frequently you change your consumer durables?

1-3 years

3-5 years

5-10 years

More than 10 years

INFERENCE

1. Customers prefer to change consumer durables within 5-10 years. In India people

do not change consumer durable frequently.

2. 23% customers do not change their consumer durable within 10 year.

3. It represent that Indian consumer do not prefer to change their consumer durable

frequently.

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CUSTOMER SURVEY FINDINGS

1. Secondary supports play an important role in the customers mind and create

awareness among the customers. The secondary support includes Demonstration,

Exhibition & Even Sponsors.

2. From the survey it was found out that the majority of customers dont buy consumer

durables from exhibitions. They just visit the exhibitions to see the co. latest model.

3. They want to buy from the showrooms or from co. showrooms. For them service is

important .Beside convenience and other factors service is key factor.

4. Also majority of customers do not want any financing scheme for purchasing the

durables.

5. There was heavy rush on weekends so large numbers of ISDs were appointed that

day. Also the live demo calls helps in selling. Exchange offers also generate sale.

6. Customers are also now very choosy in buying the product and it is important forthe company to make loyal customer of their brand.

7. In survey we found that LG has captured maximum market share in every category.

LG dominates CTV, LCD, and Refrigerator, and Washing machine, category.

8. LG and Samsung have bottle neck competition in TV and REF. category.

9. The product is well aware and it is on top of mind of customer.

10.Customers are also now very choosy in buying the product and it is important for

the company to make loyal customer of their brand.

RECOMMENDATIONS AND SUGGESTIONS

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1. Exhibitions do not help to generate so much sells but they should be conducted

regularly. This helps in generating awareness regarding the product in customers

which ultimately helps in sales.

2. Also it is helps in advertising for the new products. Like in this exhibition new LCD

SCARLET was advertised. Company should always focus on service.

3. Display share should be increased where there is less than 50% as LG also believes

that JO DIKHTA HAI WO BIKTA HAI.

4. Company should try to improve service. No doubt the company products have

technically edge over competitors but in long run it may hamper the companys

profit.

5. Company should concentrate more on its major drivers LCD, IT, and GSM.

Branding and promotions should be done effectively as it creates a long lasting

image in the mind of customers.

6. Company should also cater to the needs of sub dealers as some of the sub dealers

have potential of high sales.

LIMITATIONS

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Every study has certain limitations. In my study, also there were certain limitations, which

I could not able to solve.

1. The research was conducted in a very small area.

2. My research work period witness the biggest ups and downs in product sale of

different brands, which affected the perception of the customer. This was biggest

drawback of my study.

3. Time factor was also important for me. I had only 60 days to complete my research,

for which a full-fledged report was insufficient for me.

4. The customer filled the questionnaire mostly in careless manner, so it was difficult

to make them hold for time.

5. I had only found the upper-middle class family to fill up the questionnaire, but

generally, an average middle class family was required for the study.

6. The sample size is also very small which represent my research on consumer

behavior

My study is not recognizable in whole INDIA as well as outside Ranchi due to the

above limitations and less area coverage.

BIBLIOGRAPHY

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www.google.com

www.wikipedia.com

Business world

Business today

LG magazine

Times of India

Documents

Tarak Kumar Jana - Lg Marketing Project