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Marketing Management > Consumer Durables In India > By Mustufa Arsiwalla

A REPORT ON CONSUMER DURABLE INDUSTRY IN INDIA: AN ANALYSIS

PREPARED BY MUSTUFA ARSIWALLA

TABLE OF CONTENTS

1. Introduction3

2. Television: CTV13.

3. Refrigerator..17

4. Air-conditioner.19

5. Washing Machine.21

6. Future Scenario23

7. Conclusion & Recommendation.25

8. Bibliography.26

INTRODUCTION

With Indian economy increasingly witnessing structural transformation from a rural, agricultural one to more urban industrialized one, consumer durable goods sector is fast emerging as an important segment of the economy. Consumption of manufactured consumer goods is recognized as one of most widely accepted measures of standard of living and quality of life. Consumer goods manufacturing industry provides the driving force for stimulating rapid economic growth. The growth rate of manufacturing and consumer goods industry normally surpasses that of agriculture and service sectors. It is for this reason that the manufacturing and consumer goods durable industry is considered the backbone of economy.

BACKGROUND

Prior to liberalization, the Consumer Durables sector in India was restricted to a handful of domestic players like Godrej, Allwyn, Kelvinator and Voltas. Together, they controlled nearly 90% of the market. They were first superceded by players like BPL and Videocon in the early 1990s, who invested in brand-building and in enhancing distribution and service channels. Then, with liberalization came a spate of foreign players from LG Electronics to Sony to Aiwa. Rs 23,000-crore consumer durables industry can be divided into two types: consumer electronics and consumer utilities. Consumer electronics is basically entertainment systems like television, VCRs, audio systems and home theater systems. Consumer utilities are other household appliances like refrigerators, washing machines, air conditioners, food processors, and vacuum cleaners. On most third world countries, consumer durables like the refrigerator and television are most popular. Out of these, the television segment is undoubtedly the largest

segment. Products in the white goods segment come next to the CTVs in the purchasing hierarchy of the Indian consumer. Over the years, demand for consumer durables has increased with rising income levels, double-income families, changing lifestyles, availability of credit, increasing consumer awareness and introduction of new models. Products like air conditioners are no longer perceived as luxury products. According to Indian Readership Surveys (1999-2004) the following durable categories have registered a healthy double-digit growth.

Durable Categories
Television Sets Washing Machine Refrigerators

Growth Rate (1999-2004)


16% 17% 14%

Source: Indian Readership Surveys (1999-2004)

While TV draws its share from both urban and rural refrigerators and washing machines are still inclined towards urban. Current Scenario

Most of the segments in this sector are characterized by intense competition, emergence of new companies (especially MNCs), introduction of state-of-the-art models, price discounts and exchange schemes. MNCs continue to dominate the Indian consumer durable segment, which is apparent from the fact that these companies command more than 65% market share in the colour television (CTV) segment.

Steady growth of CE at 13-15% (0323%) HA falling behind CE on account of growth Steady growth of CE+HA - yet low penetration

INDUSTRY SIZE

Rs 23,000-crore consumer durables industry can be divided into two types: consumer electronics and consumer utilities. Consumer Electronic industry has a size of around Rs. 102 billion. The Indian television industry has a size of around Rs 96 billion, comprising colour television (CTV) of Rs 91 bn and B&W TV market of Rs 5 bn and other markets (primarily video equipment) of Rs. 4-6 billion. In terms of volumes, the CTV market was estimated at 9.05 million units and the B&W TV market at 2 million units during calendar year 2004. Refrigerators constitute the second largest product segment within the Indian consumer durables sector in India, with an estimated annual turnover of Rs 39 bn during FY2005 with an estimated sale of 4.1m units. The size of the room Air-conditioners industry is estimated at 1.1 m in volume terms, and Rs 24 bn in value terms. Washing machines sales in India aggregated an estimated 1.37m during FY2004 or around Rs 11 bn in value terms.

MAJOR PLAYERS The major players in the consumer durables industry, operating in different sectors such as air conditioners, washing machines, refrigerators & television: Blue Star Ltd., Mirc Electronics Ltd., Whirlpool of India Ltd., Philips (India) Ltd.,

BPL Ltd., Sony Corporation Ltd., Samsung India Ltd., LG Electronics India Ltd., Videocon International Ltd., Thomson Ltd. & Daewoo Ltd.

Sector

Brands in Home Appliance Brands in Consumer Electronic Sector

DEMAND/SUPPLY Supply growth is high across all the segments. But the organized sector has gained substantial market share from the unorganized segment in recent years. However, there are fewer players in segments like dishwashers and vacuum cleaners.
Cyclical and seasonal. Demand is high during festive season and is generally dependent on good monsoons. There are certain factors in the consumer durables industry, which are considered as demand drivers. They are:

1. The degree of distribution network in the market. 2. The advertising and marketing strategy adopted by the players in the industry. 3. The brand image of the product as perceived by the consumer. 4. The technology used by the company viz. state-of-art technology or an older version. 5. The ability of the company to introduce newer products and newer product features 6. The capability of the company to service its products 'The discount schemes and consumer finance facility available 7. The market positioning of the product 8. The cost competitiveness and pricing strategy of the company

9. The financial strength of the players

CONSUMER DURABLE: URBAN & RURAL INDIA 1. In the top 5 million households, in affluence terms, 96 percent of households have color televisions, 82 percent own refrigerators, and 44 percent own washing machines. 2. In the next 7 million households, penetration of color TVs is 69 percent, 58 percent for refrigerators, and 19 percent for washing machines. 3. In the next tier of affluent households - numbering approximately 12 million - 50 percent own color TVs, 35 percent own refrigerators, and 8 percent own washing machines. Rural India too is set to see an increase in the number of high-income households. An additional 4.6 million high-income households and 13 million middle-income households by 2006 to 2007 will take the number of rural households from 122.8 million to 139 million. This constitutes a huge opportunity for marketers - 60 million households or 300 million consumers with the capacity to buy consumer appliances and other products is an attractive market for any global player. And it seems that global appliance players who have established brands in the Indian market are likely to benefit from this great big push towards consumerism SUCCESS FACTOR FOR CONSUMER DURABLE INDUSTRY

Indian consumer durables industry is going through a consolidation phase with MNC companies going in for strategies to increase market share. Certain success factors for this industry are identified as follows: 1. Technology: Rising competition has resulted in major competitors introducing technologically superior products at competitive prices. This means the technology input is gaining more and more importance. In this regard, the large MNC players score over their Indian counterparts as they can always source technology from their parents. On the other hand, Indian companies rely on the outside sources for their technology requirements. 2. Knowledge of the local market: Indian consumer durables market is different from other markets. Hence understanding these peculiarities is important for the long-term survival. For example, Samsung launched the 'Super Horn" brand after it discovered that Indian consumers prefer loud noise. Indian companies are better placed in this regard as they know the market pretty well. 3. Strong distribution network: Tough competition means that a proper mindshare of the consumer has to be maintained and the product has to be made visible. Volumes in this business are narrow and profitability comes from volumes. To achieve volumes, deep penetration of the market is necessary. Indian companies score a point here as being in the market for a longer time; they have developed strong distribution channels. 4. Good brand image: Perception of a particular brand plays an important role in purchase decision. A typical Indian consumer looks for value for money when he makes purchase of white goods, as the price involved is significant and unlike developed markets, Indians do not have the buy, use

and throw mindset. Hence, consumer also looks for reliability of the product. All this is conveyed through strong brand awareness.

Consumer Outlook: The Change in Consumer

India is a country in a hurry changing continuously and also trying hard to keep pace with these changes. The me too syndrome is no longer valid as consumers seek customized products. The Indian consumer consumers evolution in the last decade has thrown up some interesting trends: 1. Consumer base becoming younger. Nearly a third of the countrys population is under the age of 14years. 2. Kids graduating from pester power to decision makers. 3. People with buying power living longer and developing distinct health needs. 4. Multi-tasking consumers fighting paucity of time and new consumer trends. 5. Huge increase in High Income Groups and spend now-save later mentality leading to high disposable income. 6. Consume wants to be treated as an individual not as part of a large physical mass and the consumer looks for a post buy relationship to enhance the value of her brand decision making. NCAERs The Great Indian Middle Class Survey: A few interesting finding:

1. Total number of urban households will increase from 49 million to 60 million by 2006 to 2007. The number of urban households in the high-income group will increase by 8.6 million by the year 2006 to 2007, and by 7.3 million in the upper-middle-income group. 2. By 2005-2006, the number of these rich households would increase by 250per cent to 1, 40,000 by 2010. They are expected to grow from 0.2% in 1995-96 to 1.7% in 2010. 3. Middle class will rise to 12.8%, from the current 2.8%.

This is the first time that NCAER has defined the middle class as having an annual household income of Rs 200,000 to Rs 1 million. Many of these rich and middle class households are located in rural areas and small towns too.

SWOT ANALYSIS: CONSUMER DURABLE INDUSTRY

STRENGTH

WEAKNESS

o Supply continues to outstrip Demand. Demand Cyclical and seasonal. o Accessory to Necessary Airconditioners are no longer perceived to be a item of luxury. o o Advancement of technology which gives the companies ability to introduce new products and new product features. Volatile performance of the agricultural sector have a negative impact on demand. The sector's performance is highly dependent on monsoon and reforms, which has failed often.

High Growth. Key drivers being Urban and Rural.

Government Policies in favour of Industry includes infrastructure development, reduction in excise duty and so on.

OPPORTUNITY o

THREAT

Diversification. Developing new o Dozen companies operating in the white products for new markets. goods segment. Prices would continue to remain depressed and margins will be under pressure. o Easy availability of finance has stimulated consumers to buy durables. o Threats of cheaper imports from China and other South East Asian countries o Changes in Consumer Outlook from spend now-save later mentality leading to high

disposable income.

ENVIORNMENT ANALYSIS: PORTERS MODEL

POTENTIAL ENTRANTS MEDIUM

In the CE industry, although there are not prohibitively high costs of entry, the critical success factors are brand image, brand allegiance, and distribution networks.

INDUSTRY COMPETITORS INTER FIRM RIVALRY HIGH

The Indian industry consists of players of domestic origin as well as multinationals. Of late, the multinationals have gained a sizeable presence in the Indian CE market at the cost of domestic players.

BARGAINING POWER OF BUYERS HIGH

With the intensification of competition the bargaining power of the buyer has increased.

SUBSTITUTES LOW TO MEDIUM

The consumer electronics (CE) sector is characterised by continuous technology advances that may result in substitution within the product category.

BARGAINING POWER OF SUPPLIERS LOW TO MEDIUM

Most of the raw materials are

available easily and in India. Some high-end raw materials such as larger-size picture tubes for flat TVs are imported.

TELEVISION: CTV
BACKGROUND The television industry started in India in 1970 with the production of B&W TV sets. The initial TVs were all 20-inch (or 51-cm) sets. For 13 years, this was the only size offered in the B&W TV market, till 14-inch TVs were launched in 1984. . The Government policy on B&W TVs in the initial period was characterized by licensing of manufacturing units for capacity in excess of 10,000 per annum and encouragement to the small sector industry (SSI) sector to set up production facilities with capacities in the range of 2,500-5,000 per annum. The year 1983 saw the removal of restriction on capacity expansions and of the ceiling on capacity to be licensed, although the restrictions on foreign technology continued. A notable development was the launch of the 14-inch B&W TVs in 1984, which evoked an even better response from the market, especially since they were affordable for households in the lower economic strata, in both rural and urban areas. The birth of CTV in India can be traced to the Asian Games (ASIAD) held in New Delhi in 1982. After the ASIAD, Doordarshan Kendras were set up in many parts of the country. The euphoria over cricket following India's victory in the Prudential World Cup in 1983 and in the Benson and Hedges cricket championship in Australia

in 1985 (with the high-quality telecast of Channel Nine) provided a great impetus to CTV demand. The Government encouraged this sector, and various State Governments came up with their own TV companies like Uptron, Keltron and Meltron. Older players in the B&W TV market, like Weston, Dyanora and Televista, also diversified into CTVs. By 1989, there were around 200 players in the market. The second phase of CTV growth came on the heels of the 1991-initiated economic liberalization programme, after which there was a reduction in both excise and import duties. Simultaneously, with the opening up of Indian skies to foreign satellite channels in 1991-92 and the coming of cable TV, the demand for TVs grew further. This was also the period when private and more aggressive domestic players like Videocon, BPL and Mirc Electronics consolidated their presence in the CTV market through their focus on both product promotion and technology--the latter through collaborations with international bigwigs (BPL with Sanyo, Japan, Mirc Electronics with JVC, Japan, and Videocon with National, Japan). Since the mid1990s, the Indian TV market has witnessed the entry of global brands like Akai, Aiwa, Sansui, LG, Samsung and Toshiba. At present, while LG and Samsung operate through fully-controlled Indian operations, the Akai, Sansui and Toshiba brands are marketed by Videocon (Akai was initially with Baron International, and later sold to Videocon). Aiwa is now a subsidiary of Sony. The other multinationals (including Sony, LG, Samsung) entered on their own and quickly captured the imagination of the market with innovations in product quality and features.

INDIA V/S GLOBAL The penetration levels of televisions in India is just 24% as compared with 98% in China, 11% in Brazil, 235% in France, 250% in Japan and 333% in US.

"In the west, the colour television is replaced after every 2-3 years, for us Indians, the period of replacement varies between 10-12 years."

PLAYERS AND MARKET SHARE PLAYERS AND MARKET SHARE The major brands in the Indian CTV industry are LG, Samsung, BPL, Onida, Videocon, Onida, Sansui, Sony, Akai, Aiwa, Philips, Panasonic, Sharp, Thomson and Daewoo. Competition has also intensified with Chinese consumer electronics player Haier, German company G-Hanz and Japan's Hitachi having leaped into the colour TV market. The companies marketing their CTV products under these brands are as follows: Company BPL Limited Videocon International Limited Mirc Electronics Limited Sony India Private Limited LG Electronics India Limited Samsung India Electronics Limited Brands BPL Videocon, Akai, Sansui, Toshiba Onida and Igo Sony LG Samsung

National Panasonic India Limited/Matsushita Television and Audio Private Limited Kalyani Sharp India Limited Thomson Consumer Electronics India Limited

Panasonic Sharp Thomson

The Indian television industry has a size of around Rs 96 billion, comprising colour television (CTV) of Rs 91 bn and B&W TV market of Rs 5 bn. The top four players (LG, Samsung, Videocon group and Onida) have consolidated their position. Today, they account for 69 per cent of the market, up from 43 per cent a couple of years ago. Two or three factors have caused this change. BPL, once a leader with over 20 per cent market share, has dropped to 5.2 per cent. Second, multinationals brands like Sony, Panasonic, Thomson, and Sharp have lost ground. Third, regional brands like Oscar, Texla, Weston, and Beltek have lost market share. The reason behind this is that the consumer electronic and the CTV market is characterized by continue innovation and use of state of art technology which these companies have been unable to keep pace.

REFRIGERATOR

BACKGROUND

Refrigerators have been manufactured in India since 1950s. Till the 1980s, players like Godrej, Kelvinator, Allwyn and Voltas controlled almost 90% of the market. Earlier, the white goods sector was categorized as a luxury goods industry and was subject to oppressive taxation and licensing. The situation changed after the liberalization of the Indian economy in the early 1990s. The government removed all restrictions, and now there is no restriction on foreign investment, and licenses are no longer required. Post-liberalization, a number of foreign companies entered the market and many domestic players also diversified into refrigerators. BPL and Videocon who already had a presence in the consumer electronics market, leveraged their strengths to enter the durables sector.

In India, refrigerators have the highest aspirational value of all consumer durables, with the exception of televisions. This accounts for the high growth rate of the refrigerator market. Refrigerators are presently being manufactured in two basic designs which are referred to as Direct Cool (DC) and Frost Free (FF) refrigerator. The direct cool segment continues to dominate Indian refrigerator market compared to more expensive frost-free models. The growth in this segment though marginal, has been driven by factors like availability of low priced models as due to competitive pricing and a growing middle class. Manufacturers of refrigerators claim to have improved the quality of the product particularly the reliability of the Compressor. In so far as new technology is concerned, the concept of Frost Free refrigerator has been gaining popularity. Capacity-wise also, there is a shift in Refrigerator Market. Till about two years back, 165 Litres had a larger share and now units of capacity 185-300 Litres are having increasing market share. Manufacturers are encouraged to adopt environment friendly technology like usage of non-CFC (non- Chloro-Fluro-Carbons) refrigerant based air conditioners, Non-CFC refrigerators are manufactured in the country but because of their high initial cost, the demand is somewhat sluggish.

INDIA V/S GLOBAL


The penetration of household refrigerators in India, the fifth largest consumer durable in terms of penetration, is 13% compared to well over 90% in Malaysia, Australia, Singapore, Hong Kong and Korea; around 80% in Thailand; close to 40% in Philippines and China and 20% in Vietnam and Indonesia. When you compare the annual commercial

sales of HVAC and refrigeration equipment in the US at US $ 200 per capita and in China at US $ 3 per capita with a dismal US $ 0.25 per capita in India.

PLAYERS AND MARKET SHARE

The refrigerator industry has become highly competitive as a number of brands have entered the market and the consumer has a wide choice.

Company BPL Limited Videocon International Limited LG Electronics India Limited Samsung India Electronics Limited Whirlpool of India Ltd Godrej & Boyce Mfg. Co. Ltd. Voltas Limited Electrolux Kelvinator

Brands BPL Videocon, Akai LG Samsung Whirlpool Godrej Voltas Electrolux Kelvinator, Electrolux and Allwyn

Refrigerators constitute the second largest product segment within the Indian consumer durables sector in India, with an estimated annual turnover of Rs 39 bn during FY2005 with an estimated sale of 4.1m units. According to FICCI Survey April-March 2003-2004 Whirlpool and Godrej are the top two players with market shares of 27 per cent and 20 per cent respectively. Electrolux Kelvinator and LG compete for third and fourth position with market shares of 16 per cent and 14.5 per cent respectively. Videocon (11 per cent), Samsung (6), BPL (4), Voltas and Akai are other significant players.

AIR-CONDITIONER
BACKGROUND
In

1902, Dr. Willis Haviland Carrier invented and secured the patent for a weather control concept - air conditioning. Ever since, life hasn't been the same. The airconditioner market is hotting up as more and more people appear to be convinced about the comfort of an air-conditioner (AC). The extremely hot summers have stirred the demand for ACs and the industry is experiencing a significant change. Air-conditioner Types of Air conditioning

products are divided into Non Ducted products & Ducted systems .The Non Ducted products are divided into two parts: window ACs & the mini splits. The ducted systems are divided into central plants, packaged ACs, ducted ACs. Window ACs account for about 54% of the total market for ACs with an estimated market size of about Rs20bn. Room air conditioners operate on electricity or gas and are enclosed in a single cabinet. They blow the conditioned air directly into the room and do not have air ducts leading to and from them. The three chief types are window air conditioners, consoles and selfcontained air conditioners. Window air conditioners fit into the lower part of a window and can be moved from window to window and thus the name, Window ACs. Self-contained air conditioners are the large room air conditioners. Central air conditioners also use electricity or gas. They can supply conditioned air to a number of rooms or to an

entire building from one central source. Fans blow the conditioned air through air ducts from the air conditioner to the rooms. Central conditioners have a number of advantages over other kinds. For example, all the equipment for air conditioning a large area is located in one place. This reduces the cost of cleaning and repairing. Central conditioners can also be zoned i.e. they can supply air of different temperature to different parts of a building. INDIA V/S GLOBAL According to Refrigeration and Air-conditioning Manufacturing Association
(RAMA) the penetration of household Air-Conditioners is abysmally low in India

at around 2% compared to 20% in Indonesia, 24% in China, 40% in Thailand, 45% in Malaysia.

PLAYERS AND MARKET SHARE The size of the room Air-conditioners industry is estimated at 1.1 m in volume terms, and Rs 24 bn in value terms. According to FICCI Air Conditioners (AC) it reveals that Indian AC industry, which has mainly dominated by players like Carrier and Voltas, has been taken over by the new MNCs in the last few years. AC market is dominated by four major playersLG, Voltas, Carrier and Samsung. LG is the market leader with a market share of 29 per cent followed by Voltas (11) and by Carrier and Samsung (9.2 each) in addition to other players like Hitachi and Videocon.

Company Mirc Electronics Limited Videocon International Limited LG Electronics India Limited Samsung India Electronics Limited Whirlpool of India Ltd Godrej & Boyce Mfg. Co. Ltd. Voltas Limited Electrolux Kelvinator Blue Star India Ltd Daikin industries, ltd.

Brands Onida Videocon LG Samsung Whirlpool Godrej Voltas Electrolux Blue Star Daikin

WASHING MACHINE

BACKGROUND

Washing machines as a consumer durable product has been in existence in India for the last 10 years. During the last few years, in the Consumer Durable Sector the market for Washing Machines has grown quite fast. The washing machine market consists of two broad segments - semi-automatic and fully automatic. The first accounts for a chunk of the market. In terms of loading type, top loading machines sell in greater numbers than front-loading ones. In this industry, it is the fully automatic segment, which in recent times has been getting the attention of the users as more and more households have both partners working. Consequently manufacturers have started paying more attention to this segment and have started introducing more features in their products. The customers now have a wide range of world class brands to choose from. Major growth is projected to take place in fully automatic segment, which accounts for above 23 per cent of the total market to about 30 per cent. There is also a trend for purchasing smaller machines in the range of 3 to 4 kg. capacity as compared to larger machines as there are more and more nuclear families rather than joint families. In regard to emerging new technologies in the washing machines sector mention may be made of aero power, triple cascade tornado wash, digital intelligence, unique optical sensor and other such innovations and adaptations which are gradually being introduced by the indigenous manufacturers. Fully

automatic machines are gaining popularity with the change in lifestyle of consumers, increase in income, increase in number of working couples, and due to price competitiveness.

INDIA V/S GLOBAL

The penetration level of Washing Machine is relatively low in India as compared to global due to many reasons. Many housewives in less affluent households prefer to wash clothes themselves rather than invest in washing machines. Water scarcity in many Indian cities and timely availability is another major issue. However, it foresees that penetration of washing machine will rise by more than 6 per cent in the next two years.

PLAYERS AND MARKET SHARE The refrigerator industry has become highly competitive as a number of brands have entered the market and the consumer has a wide choice. Some of the company and their brands are as follows:

Company Mirc Electronics Limited BPL Limited LG Electronics India Limited Samsung India Electronics Limited Whirlpool of India Ltd Godrej & Boyce Mfg. Co. Ltd. Electrolux Kelvinator

Brands Onida BPL LG Samsung Whirlpool Godrej Electrolux

LG Electronics has registered a remarkable growth of 36 % in the Washing Machine Segment in H1 The Fully Automatic Washing Machines segment has recorded a remarkable performance where volumes have grown by 22% and value by 25% .Here again LGEIL happens to be the undisputed leader with a 30.7 % market share in Fully Automatic Washing Machine and 33.7 % market share in Semi Automatic Washing Machine . (Source: ORG-GFK, May 2004)

FUTURE SCENARIO
Rising rate of growth of GDP, growth in disposable income, improved lifestyles, rising purchasing power of people with higher propensity to consume with preference for sophisticated brands would provide constant impetus to growth of white goods industry segment makes future of consumer durable industry beneficial will rise the expectation of consumer durable industry, While the consumer durable market is facing a slowdown due to saturation in the urban market, rural consumers should be provided with easily payable consumer finances schemes. Rural India, which accounts for nearly 70 per cent of the total number of households, has a two per cent penetration in case of refrigerators and 0.5 per cent for washing machines, offers plenty of scope and opportunities for the white goods industry. By the industry itself the rural market is growing faster than the urban India now. The urban market is a replacement and up-gradation market now.

Unleashing of Consumer Durable Industry In TV segment, the 14, 20 and 21 inches segments are expected to be the key contributors to the overall industry growth. In the air conditioner segment, room air conditioner market is growing at the rate of 18% per annum. Majority of the companies, understandably, have plans to focus on these segments.

Domestic AC manufacturers plan to beef up their distribution and service networks, while MNCs will leverage on their brands and invest in highpowered advertising. Given the fact that household penetration of ACs in the country is very low (0.5%), growth potential is enormous. As running costs of the AC are very high, manufacturers plan to introduce energy-saving models in future. Demand for ACs in the long run will be robust due to rising income levels and also due to higher computerization. Besides, air conditioners are no longer perceived as luxury needs.

As per NCAER (one of the premier economic research agencies in India), the penetration of TVs is expected to increase almost three times by FY07 as compared to the FY99 level. Growth in even higher for other durable items like refrigerators and washing machines. The expectations are also on the premise that the consuming class, as a percentage of total households, is expected to grow at a faster rate. This would benefit the consumer durable manufactures. '000*) Category TVs (colour) Refrigerators Washing machines Sewing machines 1998-99 Rural Urban 48 35 10 71 304 335 167 172 2006-07 All Rural Urban All India India 121 120 55 100 185 65 20 85 723 717 399 152 347 262 135 103

Source: NCAER, * households

As per CETMA, Consumer Electronic plus Home Appliances is expected at 15-20% next five years.

CONCLUSION AND RECOMMENDATION

It Contributes more than 5.5% to index of Industrial Production and provides jobs to lakhs of professionals, Skilled, Semi Skilled and unskilled workers, particularly women. It improves the quality of life of people by providing Entertainment / information / education / comfort and helps reduce daily chores, particularly for housewives. But the importance of the sector in National Economy remains unnoticed.

"Lo Penetration means opportunity: The consumer electronic and home appliance which forms the part of consumer durable industry is categorized by low penetration. Television, Refrigerator and Air-conditioner have penetration of 24%, 13% & 2% respectively. This means huge opportunity and untapped market.

Problem Areas: Some of the reason Attributable to Industry are as follows: Inadequate stress on R&D Quality - Yet an issue

After Sale Service & Customer Satisfaction

Action for Industry for Growth Commit sufficient resources for R&D Need to be more quality conscious Need to improve After Sales Services Need to Build economies of Scale Explore exports as a viable option. More emphasis to develop Rural Market.

BIBLIOGRAPHY

Business World : The BW Mega Consumer Satisfaction Survey 2004 - 25th October 2004

Impact Magazine 15th Jan 2005

Internet
www.indiainfoline.com www.blonnet.com www.etstrategicmarketing.com www.lge.com

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