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M LG & For LG Electronic Pune Limited: Project Report ON
M LG & For LG Electronic Pune Limited: Project Report ON
PROJECT REPORT
ON
Submitted By
Pankaj kumar srivastava
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 PUNE (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. Specifically
generally termed as the partial fulfillment of our pgp program holds extreme
importance for our whole career. Similarly while doing the topic Market
Survey on LG consumer durables & dealer development as a summer 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 summer training and providing me wonderful support through out my
training period and afterward.
I am thankful to MR. Sataya mohenty marketing manager Pune for allowing
me to do my research in his office by knowing my interest in doing research on
LG consumer durables and dealer development research.
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I am grateful for his exceptional support for my study throughout these eight
weeks. I have learned the meaning of marketing and professionalism from this
great personality.
I also thank to
I would like to take this opportunity to extend my heartfelt gratitude to:
Mr.K.R SINGH (Branch Manager)
Mr.Rohan Laddha (Area sales manager)
Mr.Mandar Damle (Logistic head)
I am also grateful to the Asmita Sawant, RSO, Shop manager, and the
Distributor I worked with. The entire experience has been very encouraging
and will certainly help me stand in good stead throughout my Career in Future.
I also thanks to my project guide Mr. M.K. GANDHI for his guidance during
my project. I also thank to my college director Mr. DIVAKARAN for giving
me chance to get such an experience and giving me chance to get an industrial
experience.
DECLARATION
I will take pleasure in declaring that the project work that is undertaken by me
is an original and authentic work done by me. This project is being submitted I
partial fulfillment for award of degree of Post Graduate Diploma in
Management from INDIRA SCHCOOL OF CAREER STUDUES.
The content of this report is based on the information collected by me during
my tenure at LG Electronics Ltd. at PUNE for two months of training from 2 nd
of May to 2nd July 2008
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 have entered into Indian market dethroning the Indian player
and dominating Indian market
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 of 24 hours.
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 the region 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.
My job include while visiting the shops
1. Calculate the display share of the LG product in every shop which comes
under Pune region.
2. Collect the data of actual monthly sale of the LG product in every shop.
3. Check the availability of LG catalogue and the POPs in the store.
4. Find out the problems that the dealer are facing while sailing the LG
product.
5. Find out the costumer response for the LG product by asking the owner
of the shop.
6. Find out the distributer name from whom they purchasing their product
and also weather they have direct dealership and which brand.
7. Check that 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 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 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, 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 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
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$4,400US$21,800 a year. And there are 6 million rich household in India.
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5.
Opportunity
Threats
Higher import duties on row materials.
Cheap imports from Singapore, China and from other Asian countries.
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)
)
)
KOREA
TCL
HAIER
)
)
CHINA
PHILIPS
HOLLAND
PANASONIC
SHARP
HITACHI
SANSUI
AKAI
AIWA
WHIRLPOOL
ELECTROLUX
NATIONAL
REGIONAL
ONIDA
VIDEOCON
BUSH
BPL
GODREJ
VOLTAS
IFB
SALORA
T-SERIES
WESTON
BELTAK
OSKAR
)
)
)
)
)
JAPAN
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.
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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,
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d) Washing Machines,
e) Vacuum Cleaners,
f) Home Net,
g) Compressors for Air Conditioners and Refrigerators
Digital display
a) Plasma TVs,
b) LCD TVs,
Digital media
a) Home Theater Systems,
b) DVD Recorders,
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VISION
Global Top 3 by 2010
Global Top 3 Electronic/Telecommunication company
GROWTH STRATEGY
Fast innovation, Fast growth
CORE COMPETENCY
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SLOGAN
"Life's Good" represents LG's determination to provide delightfully
smart products that will make your life good.
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THE SYMBOL
Red color represents our friendliness and gives a strong impression of LGs
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 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.
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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
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6. MICROSOFT
7. HP
8. GOOGLE
9. GE
10.INTEL
11.NORTEL
12.HITACHI
13.PRADA
14.RENESAS
15.TOSHIBA
16.BESTBUY
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Value
2.
Promise
3.
Benefits
4.
Personality
a.
Trust,
b.
Innovation,
c.
People
d.
Passion
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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.
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Product Leadership
We are focusing on six development areas to become the product leader.
1.
New Machine
2.
Reliability
3.
Conventional Installation
4.
5.
6.
Energy Saving
Quality Innovation
The policy of quality assurance is to provide customers with utmost
satisfaction by supplying zero defects.
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Fair Transaction :
Equal Opportunity
Fair Transaction Procedure
Support and Aid for Business Partners
LG INDIA:
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 Greater Noida, near Delhi, in 1998, with an
investment of Rs 500 Crores.
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India challenges
The challenges faced by LG when entered in Indian market
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LG market share of consumer appliances and consumer electronic:LG position of CTV in various states in India
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34
35
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LG PUNE
LG Pune is the branch office of LGEIL. It is located in J.M Road.
In 2004 LGEIL opened second factory which is located in Ranjangaon. This
plant manufactures all product including DVD writers and GSM mobiles. Thus
it became first company to manufacture DVD writer in India. The ODP plant
aims to reach a manpower base of 1500 people and an investment of Rs 300
crore till 2010.
LG India will become the export hub for LG Worldwide, catering to the
Middle East and African markets. The company aims to touch an export
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LG Electronics second new plant in Pune, India covers a total area of 211,200
square meters and is currently equipped with a production line to manufacture
600,000 TVs and one million refrigerators a year. The company is set to add
production lines of air conditioners, washing machines, monitors, and
electronic ovens, by 2005.
Also, LG Electronics is poised to install a GSM handset production line in the
new Pune plant by early next year. The Pune GSM handset line envisages a
capacity of manufacturing 2 million handsets annually, and the company
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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
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The organization structure is one branch manager, one chief accountant, and
area sales manager of CE, HA separate for GSM, Marketing manager for CE,
HA and separate for GSM.The Pune branch has warehouse at wagoli.
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B.M
Account
SR.BSI
ASI
AM
DPT
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LG Pune Distribution
LG Pune comes under the western Distribution Region. This region has
following
1. Pune
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2. Kolapur
3. Sholapur
4 Satara
5 Sangli
The LG Factory is located at NOIDA & PUNE. There are three types of
Warehouse1. Mother Warehouse
2. Branch Warehouse
3. Spare part warehouse
The mother warehouse is that where the products from the factory are kept and
from that warehouse, the products are sent to the branch warehouse.
A warehouse is a commercial building for storage of goods. Warehouses are
used by manufacturers, importers, exporters, wholesalers, transport businesses,
customs, etc. They are usually large plain buildings in industrial areas of cities
and towns. They come equipped with loading docks to load and unload trucks;
or sometimes are loaded directly from railways, airports, or seaports. They also
often have cranes and forklifts for moving goods, which are usually placed on
ISO standard pallets loaded into pallet racks.
The Pune warehouse is located near Wagoli. It is 13670 sq. feet in area.
In warehouse 7 locations is set up for the products.
Loc 1, Loc 2, Loc 3, Loc 4 , Loc 5 ,Loc6, Loc 7
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Loc 1 selling
Loc 2 - second sale
Loc 3 - insurance claim
Loc 4 - write off material
Loc 5 destroy the item
Loc 6 - court case material
Loc 7 - for repair
5s of warehouse, which the LG strictly follow.
1. Sweeping
2. Sorting
3. Systematic Arrangement
4. Simplification
5. Self- discipline
In warehouse, the products are pinup with 3-color paper to get the knowledge
about the delivery.
1. Red Card To stop the product going into market,
2. Green card To allow the product for delivery in market,
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4 hrs.
24 hrs.
48 hrs.
The above distribution time is the time of delivery of products from warehouse
to the market place, which the logistic department follows to fulfill the demand
in the market at right time. In LG, we have the following process, which is
followed in logistic through ERP.
Order Processing
Invoicing
Indenting
Report
Order Processing
Invoicing
Indenting
Report
distributed to all
In warehouse, there are two mode of dispersion of product from one place to
another within. a) Hydraulic
b) Manual
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Problem
48
Equipments
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CUSTOMER SERVICE
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.
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LG also had a big problem of after sale service 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 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
and experience 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 branding strategy 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."
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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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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 Maharashtra
and Mahaveer electronics.
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.
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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.
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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 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.
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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 Sectional and 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 inquiries that 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
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DEALER MANAGEMENT
Mapping of Pune region dealers.
In Pune region there were total 180 dealers including the up country side They
have been divided into three categories on the basis of their turnover and the
selling capacity.
PUNE -1
PUNE-2
PUNE-3
PUNE
BRANCH
PUNE 1
PUNE 2
PUNE 3
PUNE-1 Includes the modern trade and they have direct billing from the
branch office. They have high turnover and the company depends heavily on
them
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62
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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.
07
03
200
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 Customer 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 and also they want to know that weather there is actual price
difference in exhibition and shop or not.
4. Consumer also want to compare to the different brand which are
available in the exhibition.
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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.
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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
showrooms.
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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.
INFERENCE
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INFERENCE
Majority of customers do not prefer any financial scheme.
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74
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LIMITATIONS
Every study has certain limitations. In my study, also there were certain
limitations, which I could not able to solve.
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
BIBLIOGRAPHY
www.lgindia.com
www.google.com
www.wikipedia.com
Business world
Business today
77
LG magazine
Economics times News paper
Times of India
b) Product feature
c) Brand
d) Service
e) Durability
Q3. From where you prefer buying consumer durables
a) Exhibitions
b) Co.shoppee
c) Showroom
Q.4.You prefer to buy from the same as you have mentioned in Q.3 because of
following reasons
a) Attractive Price
b) Service
c) Demonstrations
d) Offers
e) Convenience
-------------------
b) LCD
-------------------
c) PLASMA
-------------------
D) REF
-------------------
E) WM
------------------79
F) MW
-------------------
G) AC
-------------------
APPENDIX
A.S.I
A.S.M
B.S.I
80
CAC
C.S NET
D.S.C.
L.H.D
R.E.F
Refrigerator
81