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A
 PROJECT REPORT
ON
MARKET ANALYSIS OF LG CONSUMER DURABLES &
DEALER DEVELOPMENT

‘MARKETED’ BY:

POOJA SHARMA (27)

RAJESH RANJAN (30)
ROHIT SONKAR (32)
SANJAY VERMA (36)
SONI (40)
MASTERS OF INTERNATIONAL BUSINESS 1st SEMESTER

Acknowledgement

It is indeed of great moment to pleasure to express our

senses of profound gratitude & indebtedness to all the
people who have been instrumental in making it a rich
experience. We found it to be a challenging project that
gave us a real practical exposure to the corporate world
and it is almost impossible to do the same without the
guidance of peoples around us. It gives us immense
pleasure to acknowledge LG ELECTRONICS INDIA Ltd.
dealers, who have been nice enough to give us a chance to
do our project and providing us wonderful support
throughout our project.
 Executive summary
Indian Consumer durables market used to be dominated by few
domestic players like Godrej Voltas Allwyn and Kelvinator. But
post liberalization many foreign companies have entered into
Indian market dethroning the Indian players and dominating
Indian market the major categories being CTV, REFRIGRATOR,
AIR CONDTIONERS and WASHING MACHINES. 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
have been maintaining the lead in the market 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 of 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 percent, 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, LG’s 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 company’s response
to customer complaint within two hours. The fixing time for
complaints varies from one hour to a maximum of 24 hours.
 Scope of project
This project gives us great exposure to the consumer durable
market because it includes product knowledge and field survey
job in which we visited the LG stores in Delhi. Incidentally Diwali
time was nearing during our survey period which exposed us to
another aspect of product promotion. LG always insist the 50%
display share of LG product because LG believes that “JO
DIKHTA HAI WO BIKTA HAI”.

While visiting the shops we

1. Calculated the display share of the LG product in every shop.

2. Collected the data of actual monthly sale of the LG products in
few shops.
3. Checked the availability of LG catalogue and the POPs in the
store.
4. Found out the problems that the dealer are facing while selling
the LG products.
5. Found out the customer response for LG products by asking
the owner of the shop.
6. Found out the distributor name from who they were
purchasing their products and also whether they have direct
dealership and which brand.
7. Checked whether demo calls are attended or not

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 sell.
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
dealers who are capable of being an LG dealer.
4. We also came to know while visiting the shops that there was
big problem of after sales service.
5. Many dealers were facing the problem of after sale service
because there is no follow up calls from LG.
6. Demo calls also not done properly.
 INTRODUCTION
Before the liberalization of the Indian economy, only a few
companies like Kelvinator, Godrej, Alwyn, 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 2007-2008. 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 the local 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
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 the world and overtake Japan in the near
future become the 3rd largest.
2. Indian consumer durable market is expected to reach $400
billion by on 2010
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 a year. 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 38.2 million in 2007 as against 14.6
million in 2000.
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.

Threats

1. Higher import duties on row materials.

2. Cheap imports from Singapore, China and from other Asian
countries.
 Brands in consumer electronics sector

MNCs NATIONAL REGIONAL

LG ) ONIDA BUSH
SAMSUNG ) KOREA VIDEOCON CROWN
HYUNDAI ) BPL SALORA

TCL ) CHINA GODREJ T-SERIES

HAIER ) VOLTAS WESTON
IFB BELTAK
PHILIPS ) HOLLAND OSKAR

PANASONIC )
SHARP )
HITACHI )
SANSUI ) JAPAN
AKAI )
AIWA

WHIRLPOOL )
ELECTROLUX

TODAY 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 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 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 global presence in many countries.Before
briefing, we have divided the introduction part into three main
sub parts.

1. LG Global
2. LG India
3. LG
History of company:

The company was originally established in 1958 as Gold Star,

producing radios, TVs, refrigerators, washing machines, and air
conditioners.
1958-1969-GoldStar The Electronics Industry Dream
1970-79 GoldStar symbol of The Technolgoy

1980-88 :- INTERNATIONALIZATION
1989-94 INOVATION

1995-98 GLOBAL LEADERS LG ELECTRONICS

1999-2003-DIGITAL MANAGEMENT

2004-2006 GREAT PEOPLE GREAT DESIGN

2007-THE PEOPLE COMPANY

The LG Group was a merger of two Korean companies, Lucky

and Gold Star, from which the abbreviation of LG was derived.
The current "Life's good" slogan is a backronym. Before the
corporate Name change to LG, household products were sold
under the Brand name of Lucky, 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 Group
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,
f) OLED Panels,
g) USB Memory,
h) Flat Panel Computer Monitors
Digital media
a) Home Theater Systems,
b) DVD Recorders,
c) Super Multi DVD Rewriters,
d) CD±RW,
e) Notebook PCs,
f) Desktop PCs,
g) PDAs,
h) PDA Phones,
i) MP3 Players,
j) New Karaoke Systems,
k) Car Infotainment

VISION

Global Top 3 by 2010

Global Top 3 Electronic/Telecommunication company

GROWTH STRATEGY

“Fast innovation, Fast growth”

 CORE COMPETENCY

“Product leadership, Market leadership, People leadership”

CORPORATE CULTURE

No excuse, “we” not “I”, Fun workplace

 SLOGAN

"Life's Good" represents LG's determination to provide

delightfully smart products that will make your life good.

The LG Electronics Life's Good signature consists of the LG logo,

seal, and the slogan, "Life's Good" set in Charlotte sans typeface
curved around the LG symbol. The curving of the slogan
reinforces LG's personality and uniqueness. The consistent usage
of this signature clearly establishes the unique identity of the
company and unifies every division and product from LG
Electronics across the globe.
 THE SYMBOL

The symbol of LG is the face of future. The letter “L” and “G” in a
circle symbolizes world, future, youth, humanity & technology.
LG philosophy is based on humanity. It also represents LG’s
efforts to keep close relationship with our customers around the
world.

The symbol consists of two elements.

1. The logo in LG gray
2. The stylized image of human face in the unique LG red color.

Red color represents our friendliness and gives a strong

impression of LG’s commitment to deliver the best.

The circle symbolizes The Globe. The stylized image of a smiling

face in the symbol conveys “Friendliness and Approachability”.

The one eye on the symbol represents “Goal-oriented, Focused &

Confident”.

The slogan of LG is “Life’s Good”. It expresses“ Brand’s Value ,

Promises, Benefits , Personality .
 THE PARTNERSHIP

LG Electronics chooses to promote harmony and build

constructively on a labor-management relationship rather than an
employee-employer relationship. This illustrates that
management and workers are not in a vertical relationship, but in
a horizontal one.

This culture is necessary for LG Electronics as it strives to become

one of the world's top companies. Such a relationship is
transformed into a value-creation relationship whereby both
parties endeavor to address mutual problems and
create new values together.

STRATEGIC ALLIANCE

LG Electronics is making technical advances and identifying

business opportunities through various associative
relationships with some of the world's leading companies.

LG Electronics is striving to become number one in the world by

mingling in various business and technological fields and making
strategic alliances with world famous companies. "Strategic
association between corporations," in which companies with
different infrastructures cooperate in the fast-developing 21st
century business field, is of key significance in terms of
strengthening the existing industry and creating a new one.

LG Electronics will do its best to create new products and

services with an open mind, while developing new technologies
and business fields through various associations with some of the
world's most successful companies.

1. 3M
2. SUN
3. YAHOO
4. PHILLIPS
5. TOYOTA
6. MICROSOFT
7. HP
8. GOOGLE
9. GE
10.INTEL
11.NORTEL
12.HITACHI
13.PRADA
14.RENESAS
15.TOSHIBA
16.BESTBUY

And the number follows many more…………………………..

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