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LG Report Field Study
LG Report Field Study
ON
SUBMITTED BY
ARUN . SINGH
(PGDM)
Department of Management & Social Research,
Tirpude College of Social Work
(BATCH 2010-2012)
I owe my gratitude to LG Pvt. Ltd., Nagpur for providing me the opportunity to undergo 4
months summer training, especially Mr Ashish Mathur, Regional Manager for allowing me to
work on the project.
It is my foremost duty to express my deep sense of gratitude and respect to Branch Manager
Mr.Milind Lende for his valuable guidance as well as for mentoring me, taking active interest
throughout the project, sharing his insights on the topic and for being a constant source of
inspiration.
I would like to give sincere thanks to everyone in LG Pvt. Ltd., for their extreme help, self
guidance, cooperation and friendliness; they did it in one way or other for successful
completion of the project. I am greatly acknowledged by their kind help.
Arun Singh
SR.
TOPIC PAGE NO.
No.
1. Executive Summary 05
3. Company Profile 08
4. Introduction 13
5. Theoretical Background 18
6. Research Methodology 56
10. Bibliography 78
11. Annexure 79
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 Cr in India this year in research and development, brand-building
and other marketing initiatives.
The company, having a turnover of Rs 9,500 Cr and market share of 26 per cent,
is investing Rs 360 Cr on brand-building and other marketing initiatives and
around Rs 140 Cr on research and development, besides launching new
platforms in information technology and related areas,
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.
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.
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,
GROWTH STRATEGY
CORE COMPETENCY
CORPORATE CULTURE
THE SYMBOL:
Branding & Promotion
Page 10
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 LGs efforts to keep close relationship
with our customers around the world.
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
STRATEGIC ALLIANCE
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.
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.
5. Mobile phones
Scope:-
Opportunity:-
1. In India the penetration level of white goods is lower as compared to
other developing countries.
3. Rapid urbanization.
Threats:-
WHIRLPOOL )
ELECTROLUX
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 Cr and market share of 26 per cent,
is investing Rs 360 Cr on brand-building and other marketing initiatives and
around Rs 140 Cr on research and development, besides launching new
platforms in information technology and related areas,
1. LG Global
2. LG India
3. LG Pune
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 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.
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
Digital appliance
a) Air Conditioners,
b) Refrigerators,
c) Microwave Ovens,
d) Washing Machines,
e) Vacuum Cleaners,
f) Home Net,
Digital display
a) Plasma TVs,
d) Monitors,
e) PDP Modules,
f) OLED Panels,
g) USB Memory,
Digital media
b) DVD Recorders,
d) CDRW,
e) Notebook PCs,
f) Desktop PCs,
g) PDAs,
h) PDA Phones,
i) MP3 Players,
k) Car Infotainment
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
Both companies will work together to release, market, and offer LG mobile
phones with Google services (search engine, map, email, and blogs.)
LG BRAND IDENTITY:-
1. Value
2. Promise
a. Trust,
b. Innovation,
c. People
d. Passion
Reliable products
Simple design
Ease of use
Extraordinary Experience
Trustworthy, Considerate
Practical, Friendly
1. Learning Culture
2. Boundary less Environment
3. A Carrier
4. Growth
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.
Mission
Product Leadership
1. New Machine
2. Reliability
3. Conventional Installation
4. Environment Friendly Product
5. Low Noise & Vibration
6. Energy Saving
3 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
Crs.
LG corporate office is located at Plot no.51, Udyog Vihar, Kasna Road, Greater
Noida, India.
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 Cr.
Challenges in India
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.
Product localization:-
90.0%
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0% LG
10.0% SAMSUNG
0.0%
70.0%
60.0%
50.0%
40.0%
30.0%
LG
20.0% SAMSUNG
10.0%
0.0%
70.0%
60.0%
50.0%
40.0%
30.0%
LG
20.0%
SAMSUNG
10.0%
VOLTAS
0.0% GODREJ
L
G position of AC in various States in India
10.0% VIDEOCON
0.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0% LG
PHILIPS
10.0%
SAMSUNG
0.0%
VIDEOCON
L
G position of DVD in various in India
LG position of MWO in
various states in India
LG PUNE
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 turnover of $3
billion by 2010 from India, which will contribute to 30 per cent of the Indian
arm's turnover.
Pune, India, October 6, 2004 -- LGE announced 3 growth strategies aimed at the
1.1 billion people of India making the Indian market the second largest global
production base following China. Under this strategy LGE has projected 2007
revenues in India will exceed US$10 billion, 10 times that of 2004.
The three strategies for the Indian market that the global electronics giant
disclosed. included: penetrates the south-western market of India through the
new Pune plant near Mumbai, the second largest city in India, in addition to the
existing northern plant; installs a new GSM handset production line in the new
Pune plant and uses it as its second-largest global GSM handset production line
after the Qingdao plant in China; and expands the current 750 R&D staff in
India to 1,500 by 2007, striving to develop premium products and export 30%
of India-manufactured products to Asia, Middle East and Africa markets by
2007.
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
In connection with its three growth strategies for the Indian market, LG
Electronics will invest a total of US$150 million in establishing facilities and
boosting R&D efforts in India by 2007. Specifically, it will invest US$53
million in the Pune second plant, another US$43 million in establishing the
GSM line, and US$54 million in securing R&D manpower and boosting other
efforts. Through these strategies, LG Electronics aims to penetrate the global
market by using China and India as its core production bases, while operating
its plants in Changwon and Gumi, Korea, as its main production bases. This
way, the company is pushing to penetrate the global home appliance market.
The present capacity of the facility is of 1 lakh unit per year and it shall cater to
the need of the domestic markets. LG plans to upscale its operations to a figure
of 2.5 lakh units a year in the near future. The Pune plant in addition to its
current manufacturing facility at Greater Noida will enable the company to
enhance its consumer reach and reiterate its commitment towards providing
superior technology products to the India consumer.
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
The organization structure is one branch manager, one chief accountant, and
area sales manager of CE, HA separate for GSM, Marketing manager for CE,
Logistics is the art and science of managing and controlling the flow of goods,
energy, information, and other resources like products, services, and people,
from the source of production to the marketplace. It is difficult to accomplish
any marketing or manufacturing without logistical support. It involves the
integration of information, transportation, inventory, warehousing, material
handling, and packaging. The operating responsibility of logistics is the
geographical repositioning of raw materials, work in process, and finished
inventories where required at the lowest cost possible.
1. Right Time
2. Right Place
3. Right Condition
4. Right Cost
5. Right Handling
LG Pune comes under the western Distribution Region. This region has
following
1. Pune
2. Kolapur
3. Sholapur
4 Satara
5 Sangli
The LG Factory is located at NOIDA & PUNE. There are three types of
Warehouse-
1. Mother Warehouse
2. Branch 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.
Loc 1 selling
1. Sweeping
2. Sorting
3. Systematic Arrangement
4. Simplification
5. Self- discipline
Order Processing
Invoicing
Indenting
Report
Order Processing booking for dealers /distributors
7 File insurance claim within 2 days. Settle all claim all within 30 days.
9 PSI feeding into system by 25th of every month. Ensure 90% accuracy.
Equipments
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.
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."
2. "The company has offered a scholarship to the selected students for the
last six months of their training programme,"
4. 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.
5. 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.
6. 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 the sale 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 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.
From 16th to 25th May a consumer exhibition was organized at the college of
Engineering ground. The exhibition was sponsored by Sakal group in which
number of companies participated.
Research design:
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
Branding & Promotion
Page 58
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.
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 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.
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
P
P
U
U
N
N
E
E
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
PUNE-2 includes the distributors. They have direct billing from the branch
office.Their turnover is also high.
PUNE-3 Includes the sub dealers .They have direct billing from distributors or
from the branch office. Their turnover is not so high, but there are few sub
dealers whose potential is quite high. According to sales the branch has
designated as gold and silver sub dealers.
Branding & Promotion
Page 61
OBJECTIVE OF THE STUDY
The objective was to find out the market share of LG products, advantages,
and disadvantages of LG products from dealers and to find out what
problems they are facing with the LG products so that problems can be
resolved to increase the sale.
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
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 part and a whole of data.
Bar chart:
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:
Sample unit
Yes
No
Inferences
4. Consumer also want to compare to the different brand which are available
in the exhibition.
Price
Product feature
Brand
Service
Durability
Inference
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.
Exhibitions
Co.shoppee
Showroom
Inference:
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.
Attractive Price
Service
Demonstrations
Offers
Inference
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.
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.
1-3 years
3-5 years
5-10 years
Inference
Yes
No
Inference
Majority of customers do not prefer any financial scheme.
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.
1. LG should improve its after sale service because its hits badly LGs
market share in Pune region.
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.
6. Customers are also now very choosy in buying the product and it is
important for the company to make loyal customer of their brand.
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.
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.
www.lgindia.com
www.google.com
www.wikipedia.com
Business world
Business today
LG magazine
Economics times News paper
Times of India
a) Yes
b) No
a) Price
b) Product feature
c) Brand
d) Service
e) Durability
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
a) CTV -------------------
b) LCD -------------------
c) PLASMA -------------------
D) REF -------------------
E) WM -------------------
F) MW -------------------
G) AC -------------------
a) 1-3 years
b) 3-5 years
c) 5-10 years
a) Yes
b) No
R.E.F Refrigerator