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Summer Training Project Report

On
“MARKET ANALYSIS OF LG CONSUMER DURABLES &

DEALER DEVELOPMENT”
Submitted for the partial fulfillment of the requirement for the award
of Master of Business Administration (MBA) degree from Uttar Pradesh
Technical University (UPTU), Lucknow.

Submitted By:

VINAY KUMAR SINGH

MBA III Semester

0902970115

Under the Guidance of:

Mr. RAMESH SINHA

Year 2010-11

Krishna Institute of Engineering and Technology

(Department of Management Studies)

1
13 KM Stone, Ghaziabad – Meerut Road, Ghaziabad-201206 (U.P.)

To whom it may concern

This is to certify that Mr. Vinay Kumar Singh, Roll no.


0902970115, is the student of MBA III semester and has
successfully completed his project on “MARKET ANALYSIS OF LG
CONSUMER DURABLES &DEALER DEVELOPMENT”.

Date: HOD

2
To whom it may concern

This is to certify that Mr. Vinay Kumar Singh, Roll No.


0902970115, is the student of MBA III semester. He has
worked on the project titled “MARKET ANALYSIS OF LG
CONSUMER DURABLES &DEALER DEVELOPMENT” under my
supervision and guidance. This is an original and authenticated
work done by him.

Date: - Guide

24/07/2010 Mr. Ramesh Sinha

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DECLARATION

I Vinay Kumar Singh, Roll no. 0902970115, student of MBA IIIrd


semester of Department of Management Studies, Krishna
Institute of Engineering and Technology, Ghaziabad hereby
declare that the project report on ““MARKET ANALYSIS OF LG
CONSUMER DURABLES &DEALER DEVELOPMENT”” is an original
and authenticated work done by me. I further declare that it
has not been submitted elsewhere by any other person in any
of the University for the Award of any degree or diploma.

Date: Name of student


Vinay Kumar Singh

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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.

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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.

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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

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Key findings:-
1. By calculating the display share we found that in most of store
LG has 50% displays 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
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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

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1. Consumer electronic include VCD/DVD, home theatre, music
player, color television (CTVs), cameras, camcorders, portable
audio, Wi-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. Mounded 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 is 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$21,800ayear. 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

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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

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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

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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.

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1958-1969-GoldStar The Electronics Industry Dream

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1970-79 GoldStar symbol of The Technolgoy

1980-88 :- INTERNATIONALIZATION

1989-94 INOVATION

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1995-98 GLOBAL LEADERS LG ELECTRONICS

1999-2003-DIGITAL MANAGEMENT

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2004-2006 GREAT PEOPLE GREAT DESIGN

2007-THE PEOPLE COMPANY

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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 acronym. 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 acronym chronics ,Name change ,Brand, 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

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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

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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

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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.

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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.

INDUSTRY PROFILE
The Consumer Durables industry consists of durable goods
and appliances for domestic use such as televisions,

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refrigerators, air conditioners and washing machines.
Instruments such as cell phones and kitchen appliances like
microwave ovens were also included in this category. The sector
has been witnessing significant growth in recent years, helped by
several drivers such as the emerging retail boom, real estate and
housing demand, greater disposable income and an overall
increase in the level of affluence of a significant section of
the population. The industry is represented by major
international and local players such as BPL, Videocon, Voltas,
Blue Star, MIRC Electronics, Titan, Whirlpool, etc. The consumer
durables industry can be broadly classified into two
segments:
Consumer Appliances can be further categorized into Brown
Goods and White Goods. The key product lines under each
segment were as follows.

Industry Size, Growth, Trends


The consumer durables market in India was estimated to be
around US$ 5 billion in 2007-08. More than 7 million units of
consumer durable appliances have been sold in the year 2006-07
with color televisions (CTV) forming the bulk of the sales with
30 per cent share of volumes. CTV, refrigerators and Air-
conditioners together constitute more than 60 per cent of the sales
in terms of the number of units sold. In the refrigerators market,
the frost-free category has grown by 8.3 per cent while direct
cool segment has grown by 9 per cent. Companies like LG,
Whirlpool and Samsung have registered double-digit growth in
the direct cool refrigerator market. In the case of washing
machines, the semi-automatic category with a higher base and
fully-automatic categories have grown by 4 per cent to 526,000
units and by 8 per cent to 229,000 units, respectively. In the air-
conditioners segment, the sales of window ACs have grown by 32

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per cent and that of split ACs by 97 per cent. Since the penetration
in the urban areas for these products is already quite high, the
markets for both C-TV and refrigerators were shifting to the
semi-urban and rural areas. The growth across product
categories in different segments is assessed in the following
sections.

Consumer Electronics
The CTV production was 15.10 million units in 2007-08 and is
expected to grow by at least 25 per cent. At the disaggregated
level, conventional CTV volumes have been falling while flat TVs
have grown strongly. Market sources indicate that most CTV
majors have phased out conventional TVs and have been instead
focusing more on flat TVs. The flat segment of CTVs now
account for over60 per cent of the total domestic TV
production and is likely to be around 65 per cent in 2007-
08.High-end products such as liquid crystal display (LCD)and
plasma display CTV grew by 400 per cent and 150 per Cent
respectively in 2009 –10 following a sharp decline in prices of
these products and this trend is expected to continue. The
audio/video player market has seen significant growth rates in
the domestic market as prices have dropped. This trend is
expected to continue through 2009- 2010, as competition is likely
to intensify to scale and capture the mass market.

Customized products for Indian Consumers

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L G understands the local cultural sensibilities to customize its
products according to the Indian market. It has set up a usability
lab at the Indian Institute of Technology in New Delhi to
customize Samsung products to meet the specific needs of Indian
consumers. This industry-institute partnership is helping
Samsung to study and analyze consumer response in aspects of
product design, including aesthetics, ergonomics and interface.
Through its research done on consumer preferences in India,
Samsung has concluded that Indian consumers want more
sound oriented products. Thus, the Samsung televisions for
India have a higher sound capacity than their foreign
counterparts. For the semi-automatic segment of Samsung
washing machines, Samsung has introduced for the first time in
India a feature called Super Dry. It is present in three of
Samsung‘s semi
-automatic models and dries the clothes better than the rest.
Samsung washing machines have an additional menu that takes
care of the local best. They also have a =memory restart‘that takes
care of the frequent Indian warder -power failures in India.

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OBJECTIVES OF THE PROJECT

To find number of brands of consumer durable in Indore district,


to study brand preference of consumer for consumer durable
goods. To find most important parameter for selection of brand of
Color television, Refrigerators, Washing machine, DVD,
Microwave oven. To study profit margin of major brands in
consumer durable.

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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 system ethically 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 buyer‘s behavior, consumption
pattern, brand loyalty, and focus market changes. A research
design specifies the methods and procedures for conducting a
particular study. According to Ker linger, Research Design is a
plan, conceptual structure, and strategy of investigation conceived
as to obtain answers to research questions and to control variance.
Research design specifies methods and procedures for study. In
this study the company was interested to know the demand of
different consumer durable product, about competitors, and
potential for SAMSUNG procedures to be used for the study
among retailers/dealer and. However it was exclusively personal
interview.

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Data Collection:

This report was prepared after collecting data from the retailers/
dealers and past data was arranged from the various studies
conducted in last few years and various other records of company.

Primary Data:

These data were collected by personal interview with retailers/


dealer. For this purpose questionnaires were prepared in such
that all necessary data would be collected.

Secondary Data:

Information regarding the project, secondary data was also


required. These data were collected from various past studies and
other sources of the company.

SAMPLING METHOD
Random Sampling method

SAMPLE SIZE
100 Dealers

Research tools:
Questionnaires

RESEARCH AREA INDORE DISTRICT-


Indore city

28
M.G Road
A.B. Road
Vija1. Calculate the display share of the L G product in shop.
2. Collected the data of actual monthly sale of the L G product in few
shop.
3 Found out the problems that the dealer were facing while selling the L
G product.
4. Found out the customer response for L G products by asking the
owner of the shop.
5. Checked whether demo calls were attended or not
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 consumer durable stores in Indore district.
Indore city
M.G Road
A.B. Road
Vijay Nagar
Scope of the study
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 consumer durable stores in Indore
district.
While visiting the shops we
1. Calculated the display share of the L G product in shop.
2. Collected the data of actual monthly sale of the L G product in
few shop.
3 Found out the problems that the dealer were facing while selling
the L G product.
4. Found out the customer response for L G products by asking
the owner of the shop.
5. Checked whether demo calls were attended or not.
Scope
1. In term of purchasing power parity (PPP), India is the 4th

29
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 $450
billion by on 2010
3. India has the youngest population amongst the major countries.
There were 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 were 56 million people in middle class, who were
earning us$4,400-US$21,800 a year. And there were 6 million rich
household in India.

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.

THREATS
1. Higher import duties on row materials.
2. Cheap imports from Singapore, China and from other Asian
countries.

LIMITATION OF STUDY

Although I tried my best in preparation of this project, but


this study has some limitation:

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1. The period of the project was not sufficient to study all the
factors in deep.
2. Visiting various places for the study consumed a lot of time.
3. We cannot say that what the consumer have revealed will be
right for each and every situation because their perception is
influenced by many factors.
4. Many consumer and dealers/retailers showed less interest in
providing information and haven‘t cooperated.

Theoretical Background of the study and Scope of market


research in view of modern global business.
Research methods provide you with the knowledge and skills
you need to solve the problems and meet the challenges of a
fast-paced decision-making environment. Business research
courses are recognition that students in business, not-for-
profit, and public organizations in all functional areas need
training in the scientific method and its application to decision
making. Two factors stimulate an interest in more scientific
decision making:
(1) the manager‘s increased need for more and better information
and
(2) The availability of improved techniques and tools to meet this
need.

During the last two decades, we have witnessed dramatic changes


in the business environment. Emerging from a historically
economic role, the business organization has evolved in response
to the social and political mandates of national public policy,

31
explosive technology growth, and continuing innovations in
global communications. These changes have created new
knowledge needs for the manager. Other knowledge demands
have arisen from problems with mergers, trade policies, protected
markets, technology transfers, and macroeconomic savings
investment issues.

The trend toward complexity has increased the risks


associated with business decisions, making it more important
to have a sound information base. Increased complexity means
there are more variables to consider. The competition is more
vigorous, with many business downsizing to make
competitive gains. Workers, shareholders, customers, and the
public are better informed and more sensitive to their self-interest.
Government continues to show concern with all aspects of society.
Each of these factors demands that managers have more and
better information upon which to base decisions.

To do well in such an environment, you will need to be


equipped with an understanding of scientific methods and a
means of incorporating them into decision making. You will need
to know how to identify good research and how to conduct it.
This book addresses these needs.
As the complexity of the business environment has increased,
there has been a commensurate, increase in the number and
power of the tools to conduct research.

There is vastly more knowledge in all fields of management. We


have begun to build better theories. The computer has given us a
quantum leap in the ability to deal with problems. New
techniques of quantitative analysis take advantage of this power.
Communication and measurement techniques have also been

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enhanced. These trends reinforce each other and are having a
massive impact on business management.

Sources of collection of primary and secondary data for


market research.
Ta sources may be classified as either internal (organizational) or
external sources of information.

Internal Sources
Internal sources of organizational data are so varied that it is
difficult to provide generalizations about their use. Accounting
and management information systems create and store much
of the internal data. Research and development, planning and
marketing functions also contribute. Examples are departmental
reports, production summaries, financial and accounting reports,
and marketing and sales studies. The collection methods used
are unique to the specific situation, and collection success
depends on knowing just where and how to look. Sometimes the
information may exist in central files (i.e., at headquarters), in
computer database, or in departmental chronological files. In
other organizations, a central library keeps all relevant
information. Systematic searches should be made through
exploratory interviews with everyone who handles the
information. Often company librarians, IS, PR/communications,
or departmental secretaries can help in pinpointing critical data
sources. Internal data sources may be the only source of
information for many studies.

External Sources
External sources are created outside the organization and are more
varied than internal sources. There are also better defined methods for
finding them. This discussion is restricted to published sources, although
other sources of information may be useful.

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Published sources of data can be classified into five categories.
The newest and fastest growing one is computerized database.
They are composed of interrelated data files. The files are sets
of records grouped together for storage on some medium.
Access may be through online search or CD-ROM. Online
databases are often specialized and focus on information about a
particular field. Major source of published information consists
of diverse materials from special collections. Within this
category there are many reference books, each a compendium
of a range of information. A second group includes university
publications, of which there are master‘s theses, doctoral
dissertations, and research records. A third group includes
company publications such as financial reports, company policy
statements, and speeches by prominent executives, sales
literature, product specifications, and many others. There are
miscellaneous information sources consisting of the productions
of various trades, professional and other associations. These
organizations often publish statistical compilation, research
report, and proceeding of meeting.

Data Analysis and Interpretation

Table No.1 Number of company‘s product sold by dealers.

Sr. No. PRODUCT NO. OF RESPONDENTS

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1 C-TV 86
2 C-TV & REFRIGERATOR 67
3 C-TV & REFRIGERATOR &
WASHING MACHINE 56
4 ABOVE ALL 92
TOTAL 301
Source: - Survey
Graph No. 1

INTERPRETATION:-
According to survey, 86 dealers were sold only C-TV, 67 dealers were
sold C-TV and REFRIGERATOR, 56 dealers were sold C-TV and
REFRIGERATOR,WASHING MACHINE and 92 dealers were sold all
product.

Table no. 2 shows no. of company‘s product sold from dealer‘s shop.

Sr. NO. NO. OF COMPANIES NO. OF RESPONDENTS


PRODUCT
1 FIVE 33
2 FOUR 24

35
3 THREE 9
4 TWO 34
TOTAL 100
Source:- Survey
Graph No. 2

INTERPRETATION-
According to survey, 33 dealers were sold 5 brands, 34 dealers were sold only
2 brands from their shops.

Table No.3 Shows Major brand of C-TV sold by dealers.

Sr. NO. BRAND NO. OF PERCENTAGE


RESPONDENTS
1 LG 39 39
2 VIDEOCON 23 23

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3 SAMSUNG 18 18
4 SANSUI 11 11
5 ONIDA 9 9
TOTAL 100 100
Source:- Survey
Graph No.3

INTERPRETATION-
According to dealers, in Indore district LG is leading in
C-TV with 39%, after that VIDEOCON is 2 with 23% and then SAMSUNG
is on 3 with 18%.

Table No.4 Most important parameter for more sale of C-TV

Sr. NO. REASONS FOR NO. OF PERCENTAGE


MORE SALES RESPONDENTS
1 Price 28 28
2 Quality 30 30

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3 Service 17 17
4 Advertisement 15 15
5 Schemes 10 10
TOTAL 100 100
Source:- Survey
Graph No.4

INTERPRETATION-
According to dealers, Price is most important parameter for more sale of C-
TV and then Quality, Services, Advertisement and Schemes.

Table No. 5 shows the major brands of REFRIGERATOR sold by dealers.

Sr. NO BRAND NO. OF RESPONDENTS


PERCENTAGE
1 LG 22 22
2 VIDEOCON 13 13

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3 SAMSUNG 9 9
4 GODREJ 12 12
5 WHIRLPOOL 19 19
6 KELVINATOR 16 16
7 KENSTAR 9 9
TOTAL 100 100
Source:- Survey
Graph No. 5

INTERPRETATION-
According to dealers, LG also leading in the REFRIGERATOR market in
Indore district with 22%,
After that Whirlpool and Kelvinator is following them.

TableNo.6 shows most important parameter for more sale of REFRIGERATOR

Sr. NO. REASONS FOR NO. OF PERCENTAGE


MORE SALES RESPONDENTS
1 Price 27 27
2 Quality 32 32

39
3 Service 19 19
4 Advertisement 13 13
5 Schemes 9 9
TOTAL 100 100
Source:-Survey
Graph No. :- 6

INTERPRETATION-
According to dealers, most important parameter for more sale of Refrigerator
is Quality and then Price, Services, Advertisement and Schemes.

Table no.7 shows Major brands of Washing Machine sold by dealers.

Sr. NO. BRAND NO. OF PERCENTAGE


RESPONDENTS
1 LG 18 18
2 VIDEOCON 11 11

40
3 SAMSUNG 15 15
4 IFB 7 7
5 WHIRLPOOL 21 21
6 GODREJ 9 9
7 KELVINATOR 10 10
8 KENSTAR 9 9
TOTAL 100 100
Source:- Survey

INTERPRETATION-
According to dealers, LG is leading in Washing Machine market with
18%, after that VIDEOCON and SAMSUNG is leading in Indore
district.

Table No.8 shows most important parameter for more sale of Washing
Machine

Sr. NO. REASONS FOR NO. OF PERCENTAGE


MORE SALES RESPONDENTS
1 Price 26 26
2 Quality 32 32
3 Service 24 24
4 Advertisement 10 10
5 Schemes 8 8
TOTAL 100 100
Source:- Survey
Graph No.8

41
INTERPRETATION-
According to dealers, the most important factor which affects the sales of
washing machine is QUALITY, and then prices and services is
considered by the customers.

Table No.9 shows Major brands of DVD sold by dealers.

Sr. NO. BRAND NO. OF PERCENTAGE


RESPONDENTS
1 LG 11 11
2 VIDEOCON 13 13
3 SAMSUNG 10 10
4 ONIDA 15 15
5 PHILIPS 22 22
6 SANSUI 12 12
7 SONY 8 8
8 INTEX 9 9
TOTAL 100 100
Source:-Survey

42
INTERPRETATION-
According to dealers, PHILIPS is the most popular brand in DVD
market with 22%,after that ONIDA with 15% and VIDEOCON with
13% on 3 position.

Table No.10 shows most important parameter for more sales of DVD

Sr. NO. REASONS FOR NO. OF PERCENTAGE


MORE SALES RESPONDENTS
1 Price 21 21
2 Quality 42 42
3 Service 17 17
4 Advertisement 8 8
5 Schemes 12 12
TOTAL 100 100
Source:- Survey

INTERPRETATION-
According to dealers, Quality is major factor in respect of more sale of DVD,
and then Services and prices were to be considered.

Table No.11shows Major Brand of MICROWAVE OVEN sold by dealers.


Sr. NO. BRAND NO. OF PERCENTAGE
RESPONDENTS
1 LG 18 18
2 VIDEOCON 13 13
3 SAMSUNG 15 15
4 KENSTAR 21 21
5 GODREJ 9 9
6 PHILIPS 8 8
7 BAJAJ 9 9
8 SONY 7 7
TOTAL 100 100
Source:- Survey

43
INTERPRETATION-
According to dealers, KENSTAR is very popular brand for
microwave oven KENSTAR is making a huge business as com pare to
other competitors after that LG and then SAMSUNG. According to
dealers, microwave oven does not have that much demand as compare to
other consumer durable product.

Table No.12 shows Reason for more sales of MICROWAVE OVEN

Sr. NO. REASONS FOR NO. OF PERCENTAGE


MORE SALES RESPONDENTS
1 Price 21 21
2 Quality 36 36
3 Service 14 14
4 Advertisement 17 17
5 Schemes 12 12
TOTAL 100 100
Source:-Survey
Graph No. 12

44
INTERPRETATION-
The most important factor of m ore sales of microwave oven is
QUALITY of the product. Quality is mostly affected on sales of
microwave oven.

Table NO.13 shows High Profit margin brands

Sr. No. BRANDS NO. OF PERCENTAGE


RESPONDENTS
1 LG 21 21
2 SAMAUNG 18 18
3 WHIRLPOOL 16 16
4 VIDEOCON 13 13
5 SONY 11 11
6 GODREJ 9 9
7 PHILIPS 7 7
8 KENSTAR 5 5
TOTAL 100 100
Source: - Survey
INTERPRETATION-
According to dealers, in Indian consumer durable industry LG is
leading company because of their low pricing policy and the better
quality of product. SAMSUNG is on 2 positions, if SAMSUNG will
change their pricing policy like LG and VIDEOCON then SAMSUNG
should be on 1 position.

45
Table No.14 shows Suggestion from dealers for SAMSUNG to increase
the business

Sr. No. SUGGESTION NO. OF RESPONDENTS


1 FAST AND REGULAR
AFTER SALES SERVICE 31
2 REDUCE PRICES 21
3 INCREASE DEALER
MARGIN 15
4 ADVERTISMENT AT
RURAL AREA 13
5 IMPROVE QUALITY 10
6 REGULAR SCHEMES 9
TOTAL 100
Source: - Survey

INTERPRETATION-

According to suggestion of dealers, AFTER SALES SERVICE is most


important factor which is helping to the SAMSUNG for increase the
sales. After that PRICES OF THE PRODUCT should be economic.
DEALER MARGIN should increase for motivation of dealers.

46
FINDING

1. We came to know while visiting the shop most of the dealers


sold entire consumer durable product including C-TV,
Refrigerator, Washing Machine, DVD, Microwave oven.

2. We know that during the survey in consumer durable


industry in Indore district and rural area of Indore district
LG is leading in Color television, Washing Machine,
Refrigerator.

3. Study shows that quality is most important parameter


for more sale of color television and then price is
considered by consumers.

4. Study shows that quality of the product is most


important parameter for Refrigerator then price is
considered by consumers.

5. While visiting the shop we came to know that quality is most


important parameter which is affect on more sales of
Washing Machine.

6. According to Survey, Philips is most popular brand for DVD.

7. We came to know that while visiting the shop, Ken star is


most preferable brand for Microwave oven because of their
quality.

47
8. While visiting the shop we know that LG is gives high profit
margin as compare to other competitors.

9. While visiting the shop dealers suggested that after sales


service is most important factor which contributes towards
the sales of Consumer durables.

10. All the dealers were not satisfied with the profit margin.

11. SAMSUNG product is costly as compare to LG and


VIDEOCON.

12. Maximum rural area is covered by the VIDEOCON


because of their low price products.

13. We came to know while visiting the shops that


there was big problem of after sales service.

14. Many dealers were facing the problem of after sale


service because there is no follow up calls from SAMSUNG.s

15. Demo calls also not done properly.

16. LG and Videocon is the main competitor of SAMSUNG.

17Advertising of SAMSUNG CTV is more effective as compare


to the competitors.

18. Sales promotion scheme were sufficient.

THE PARTNERSHIP

48
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.

49
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…………………………..


In Feb. 2007 LG Electronics and Yahoo formed a strategic alliance.
Yahoo mobile services will be available from LG mobile. This
service is targeting 10 million LG mobile phones in over 70
countries.

In Mar. 2007 LG Electronics and Google formed a strategic


alliance. Both companies will work together to release, market,

50
and offer LG mobile phones with Google services (search engine,
map, email, and blogs).

LG BRAND IDENTITY:-
The brand of LG is delightfully smart. LG strives to enhance the
customer’s life and lifestyle with intelligent features, institutive
functionality and exceptional performance.

The brand platform:-

The LG brand is composed of four basic elements –

1. Value
2. Promise
3. Benefits
4. Personality

The Brands core Value that never changes.

a. Trust,

51
b. Innovation,

c. People

d. Passion

The benefits that are consistently delivered to the customer


includes

a) Reliable products

b) Simple design

c) Ease of use

d) Extraordinary Experience

Personality describes the human characteristic that are expressed


to the customer through

Trustworthy, Considerate
Practical, Friendly

The Internal Culture of LG:

LG practices four cultures

52
1. Learning Culture

2. Boundary less Environment

3. A Carrier

4. Growth

According to LG, the Learning Culture continuously helps the


employee to learn more and more to develop the habit of
continuous learning.

Boundary less Environment means that there is no difference


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

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


can develop their carrier largely. A new comer will feel fully
comfortable in the company and for a new comer the company is
very helpful in the overall growth of personality.

Growth in LG is very high for those who are in the company and
for those who want to join in LG. The company is growing with
fast innovation and the BLUE Ocean strategy is one of the
examples of growth.

Mission

The mission of LG is to provide the customers with utmost


satisfaction through leadership. The fundamental policy of

53
development is to secure product leadership that the Customers
may have the utmost satisfaction.

Product Leadership

We are focusing on six development areas to become the product


leader.
1. New Machine
2. Reliability
3. Conventional Installation
4. Environment Friendly Product
5. Low Noise & Vibration
6. Energy Saving

Quality Innovation

The policy of quality assurance is to provide customers with


utmost satisfaction by supplying zero defects.

54
LG proceeds in a hierarchal manner. It is named as “LG WAY”.

From top to bottom:

No.1 LG – is the VISION

“Jeong-DO” Management is LG’s unique application to ethics. LG


will succeed through fair management practices and constantly
developing our business skill.

A) Honest with our customer


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

55
c) Equal opportunities
d) Equal Treatment

Management Principle - Creating value for customer

Code of conduct of LG

1. Responsibility and obligations to customers :

• Respect for Customers


• Creating Value
• Providing Value

56
2. Fair competition

• Pursuit of Free Competition


• Compliance with Laws and Regulations

3. Fair Transaction :

• Equal Opportunity
• Fair Transaction Procedure
• Support and Aid for Business Partners

4. Basic Ethics for Employees

• Basic Ethics
• Completion of Duty
• Self Development
• Fairness in Performance
• Avoidance of conflict with company interest

5. Corporate Responsibilities to employees

• Respect for human dignity


• Fair Treatment
• Promoting Creativity

6. Responsibilities to society and country

• Rational Business Development


• Protection of stock holder interest
• Contribution to social development

57
• Environmental Conservation

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.

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


Road, Greater Noida, India. This facility manufactured Color
Televisions, Washing Machines, Air-Conditioners and Microwave
Ovens.

58
''Company is setting up a chain of exclusive premium
showrooms. LG plans to launch 60 premium Brand Shoppes by
the end of the first quarter of this year. At present, LG has a total
of 83 LG stores across the country, of which 45 are shops and 38
are exclusive stores. Brand shops will be placed in the premium
segment and the target audience will comprise buyers interested
in premium and high end products.

LG Brand Shoppe goes beyond the concept of a normal exclusive


store by having a more interactive environment and additional
lifestyle orientation on display so that the customer can actually
experience the LG products in his or her own home settings.

LG Electronics India Ltd (LGEIL), consumer durables leader with


27% market share, is planning a brand new image. To attract
inspirational and young consumers across India, company will
roll out a new marketing strategy. The exercise will cost the
company Rs 360 crore.

LG Electronics India is the fastest growing company in the


consumer electronics, home appliances, and computer
peripherals industry today. LG Electronics is continually
providing, superior technology products & value for money to
more than 50 lakh households in India. LGEIL is celebrating the
11th anniversary this year.

LG Soft India the innovation wing of LG Electronics in Bangalore


is LG Electronics' largest R&D centre outside Korea. We at LGSI
focus on niche technology areas such as mobile application
development, digital video broadcast and biometrics software
and support LG Electronics with our expertise. Motivated by a
passion for technology, a strong work culture and loyalty to the

59
organization, we are determined to see LG become one of the top
three brands globally.

Prominent consumer electronic company, LG Electronics Inc. has


said that it expects the sale of its products in India to up by 15 per
cent in 2008. Moon Bum Shin, managing director of LG
Electronics India has said that the company has earmarked 4.8
billion rupees for investment purpose in India this year. The said
money will be used to market as well as manufacture new
products.

LG Electronics, which is originally a South Korean Company with


branch in India, informed that its sales of GSM mobile phones,
color televisions, air conditioners and other household goods in
the Indian market was to the tune of 95 billion rupees ($2.4
billion) in 2007. As per Shin's estimate, the sales in 2008 would be
around 110 billion rupees. In order to achieve its target, Shin said
LG Electronics will concentrate on catering to the high-end
consumer market which will help boost sales this year. India
churns out six (6) per cent of LG Electronics global revenues of
$42 billion. The Indian branch of LG exports to 40 countries.

India challenges

The challenges faced by LG when entered in Indian market

1. Low brand awareness about LG in India.


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

60
3. High import duty
4. Compitition from local market players and other MNCs in
consumer durable segment.
5. Price sensitiveness of the Indian consumer

LGEI over comes these challenges to emerge as Innovative


marketing strategy

1. Launch new technologies in consumer electronic and home


appliances.
2. LG was the first brand to enter in cricket in big way a way,
by sponsoring the 1999 world cup followed it up in 2003 as
well.
3. LG brought in four captains of the Indian cricket team to
endorse its products. LG invested more than US$ 8 million
on advertising and marketing in this sport.
4. LG has differentiated its product using technology and
health benefits. CTV has “Golden eye technology” Air

61
conditioner has “Health air system” and microwave ovens
have the “Health wave system”.

Local and efficient manufacturing to reduce the cost

To overcome high import duties LG manufactures TV refrigerator


in India at manufacturing facility at Noida and. LGEI had already
commissioned contract manufacturing at Mohali Kolkata and
Bhopal for CTVs. This has helped LGEI to reduce cost. LGEI
implementing the “Digital manufacturing system” (DMS) as the
cost cutting innovation this system is follow-up to the six sigma
exercise LGEI had initiate earlier.

R&D potential

LG has the research and development facilities in Bangalore and .


Both the unit carry out R&D department for the domestic as well

62
as the parent company it also dose customize R&D for the specific
countries to which it export product.

Regional channel and wide distribution network


1. LG has adopted the regional distribution channel in India.
All the distributers work directly with the company. This
has resulted in quicker rotation of the stock and better
penetration into B, C, D, class market.
2. LG also follows the stock rotation policy rather than
dumping stock on channel partners.

Product localization:-

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


2. LG came out with Hindi and regional language menus on its
TVs.
3. Introduced the low-priced “Cineplus” and “Sampooma” for the
rural market.
4. LG was the first brand to introduce gaming in TVs in
continuations of its association with cricket LG introduce cricket
game in CTVs

MAJOR KEY SUCCESS FACTORS:

1. Innovative marketing - LG was the first brand to enter cricket


in a big way, by sponsoring the 1999 World Cup and followed
it up in 2003 as well.

63
2. Local and efficient manufacturing to reduce cost - To overcome
high import duties, LG manufactures PC monitors and
refrigerators in India at its manufacturing facility at Noida,
Delhi.
3. Commissioned contract manufacturing at Mohali, Kolkata and
Bhopal for CTVs.
4. Product localization - Product localization is a key strategy
used by LG. It came out with Hindi and regional language
menus on its TV.
5. Regional distribution model - This has resulted in quicker
rotation of stocks and better penetration into the B, C and D
class markets.
6. Leveraging India’s IT advantage - LG Electronics has awarded
a contract to develop IT solutions to LG Soft India (LGSI). The
project involves development and support for ERP, SCM, CRM
and IT-enabled services for LG.

Strategies adopted by the organization:

LG follows 10 commandments which are as follows.


1. Foster working environment-5S Environment
2. Fast execution is key to success
3. Transparent and fast communication-open communication
4. Update market -knowledge –Demographics
5. Win –Win relationship with the trade partners
6. Customer is the king
7. Even Billing –Road to ach supplier A
8. Be in touch with the market (70% Market, 30% Office).
9. Plan and Execute annual marketing Calendar-Time to market
10.Display share of 50% -to get 50% consumer share.

64
LG market share of consumer appliances and consumer
electronic:-

LG position of CTV in various states in India


LG position of REF in various states in India
LG position of WM in various states in India
LG position of AC in various States in India
LG position of Audio & Home Theater in various in India
LG position of DVD in various in India
LG position of MWO in various states in India

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


represent the LG position of different consumer durables in
various states in India. We selected different brand in different
category as per the market share and the demand of product in
market. This analysis represents the LG market position during
the period of March 2008. It shows that LG has captured
maximum market share almost in every category. LG and
Samsung have the maximum market in consumer durable market
but LG dominate the almost all the category in consumer durable.
Prominent consumer electronic company, LG Electronics Inc. has
said that it expects the sale of its products in India to up by 15 per
cent in 2008. Moon Bum Shin, managing director of LG
Electronics India has said that the company has earmarked 4.8
billion rupees for investment purpose in India this year. The said
money will be used to market as well as manufacture new
products. LG Electronics, informed that its sales of GSM mobile
phones, color televisions, air conditioners and other household
goods in the Indian market was to the tune of 95 billion rupees
($2.4 billion) in 2007. As per Shin's estimate, the sales in 2008

65
would be around 110 billion rupees. In order to achieve its target,
Shin said LG Electronics will concentrate on catering to the high-
end consumer market which will help boost sales this year. India
churns out six (6) per cent of LG Electronics global revenues of
$42 billion. The Indian branch of LG exports to 40 countries. Shin
remarked that the company was targeting an increase of exports
to $300 million in 2008 from $230 million in 2007.

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 writers 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 turnover of $3 billion by 2010
from India, which will contribute to 30 per cent of the Indian
arm's turnover. , 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

66
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: penetrate the south-western
market of India through the new 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 plant and
use it as its second-largest global GSM handset production line
after the Qingdao plant in China; and expand 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 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 plant by early next year. The GSM handset line
envisages a capacity of manufacturing 2 million handsets
annually, and the company expands it to become a global GSM
handset production base with a capacity of an annual 10 million
units by 2010. 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 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

67
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 plant in addition to its current manufacturing facility at
Greater Noida will enable the company to enhance its consumer
reach and reiterate it’s 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 consisting of Andhra Pradesh and Karnataka. In
addition, it has split one of its northern regional offices by making
Uttar Pradesh a separate region after spinning it out from Delhi
NCR. The other four regional offices take care of East, Gujarat
and Madhya Pradesh, Maharashtra & Goa and Punjab, Haryana
& Rajasthan respectively. In the coming year, LG is also
repositioning its marketing spends, resulting in a significant
increase in its mass media expenditure for better brand visibility.
LG had a marketing budget of Rs 320 crore in 2007 with a 60:40
split in favor of below-the-line activities. Next year, the company
plans to increase the share of mass media even as overall
marketing spends would be raised by just about 10-15%.

Distribution and Marketing:

The company has number of dealers and warehouses. They have


LG exclusive shops. For the marketing of the products a number
of activities are followed:
1. Exhibitions are conducted from time to time.
2. Society and college activities are conducted.

68
3. Hoarding, Posters, banners are used so as to grab the attention
of the costumers.
4. Day to day advertisement in leading newspaper.
5. Discount at festival time.
6. For dealer relationship they arrange dealer meeting at several
time in the year
7. LG divide dealer in gold silver etc. category to know the
performance of the dealers.
8. They have their sales persons at various sub dealer store and at
mordent trade store for particularly for the promotion of the LG
product.
9. LG also uses the radio FM for the promotion activities.
10.Also provide capon and scratch card for festive season.
The logistics (Supply Chain Management):-

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.
Logistics Management is that part of the supply chain, which
plans, implements and controls the efficient, effective forward
and reverse flow and storage of goods, services and related
information between the point of origin and the point of
consumption in order to meet customers' requirements.
5R’s of Logistic followed by LG:
1. Right Time

69
2. Right Place
3. Right Condition
4. Right Cost
5. Right Handling

The LG Factory is located at NOIDA &. There are three types of


Warehouse-
1. 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.

In warehouse 7 locations is set up for the products.


Loc 1, Loc 2, Loc 3, Loc 4 , Loc 5 ,Loc6, Loc 7
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

70
5’s 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,
3. Yellow Card – After the product labeled with green, allow this
to move in market

Distribution Time:-
• Local delivery – 4 hrs.
• Upcountry delivery - 12 hrs.
• Within 200 km. – 24 hrs.
• Beyond 200 km. – 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 booking for dealers /distributors
Invoicing after billing process/bill generation
Indenting requirement (Production Unit to branch unit)

71
Report distributed to all

In warehouse, there are two mode of dispersion of product from


one place to another within.
a) Hydraulic
b) Manual
In addition, there are 35 fire extinguishers to prevent the
accidental hazard within the warehouse due to fire. These fire
extinguishers are valid up to year 2011. One has to follow the rule
of “NO Smoking” within the warehouse

Logistics Ten Commandments – Golden Rules

1 - Warehouse 5S – to be strictly followed – FG – 2, 5 & 7 to be


properly maintained.
2 - 100% Bar-coding for all inward & outward transaction.
3 - Follow standard pick – ship process religiously.
4 – No inventory mismatch, shortage or excess – monthly 100%
physical stocktaking.
5 – Nil 30+ for FG – 2, 3 & 5.
6 – Nil transit damage.
7 – File insurance claim within 2 days. Settle all claim all within 30
days.
8 – No inter – branch transfer without HO clearance.
9 – PSI feeding into system by 25th of every month. Ensure 90%
accuracy.
10 – Apply physical FMFO.

Problem

1- In transit material damage checking.


2- Cost target achievement.

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3- Natural events tracking.
4- Fluctuation in demand-supply Equipments
1- 100% bar code scanner.
2- ERP – Invoice Generation Process.
3- Hydraulic Trolleys for material movement.
4- Pallets for safety of material.

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 what’s 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 don’t really care. Brand Equity fanned out to MNC as well as
Indian consumer durable companies, stockiest and dealers,
analysts and market researchers to get feel of what’s 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 year’s 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

73
is the customer's perception of the degree of willingness with
which a supplier deals with a question or complaint, speed of
response, and action taken.

LG also had a big problem of after sale service in India. During


the project we also came to know that after sale service becomes
the big issue in the region. Customers as well as dealer were
facing the problem of after sales service. Because of this problem
many dealer in the region were not ready to sell LG product. So it
becomes the big issue. But LG has taken some solid steps towards
improving customer’s 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."

1. In the initial phase the company has entered into agreements


with ITIs in the states like Maharashtra, Gujarat, Delhi, Punjab,
Assam, and Karnataka and is in the last leg of signing with Uttar
Pradesh.

74
2. L G Electronics, with 1200 service centers, has already recruited
300 students and plans to beef up the number to 10,000 by the
year-end.
3. "The company has offered a scholarship to the selected students
for the last six months of their training program,"
4. The company will invest Rs 8 crore (Rs 80 million) in employee
development program this year with an aim to attain a 8 per cent
attrition rate.
5. The company moved away from the discounting strategy since
last year and is putting thrust on the quality and service in its
brand communication to position LG as a premium consumer
electronics brand.
6. At the top, the Service Division in Korea reports to the Global
CMO. This shows commitment that Service must be made into a
marketing differentiator, and leveraged thus.
7. LG has the widest service network across the country; some
estimates put it at a significant multiple of service-infrastructure
from our nearest competitor. While 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 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). It’s 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.

75
10.The first LG-owned service centre opened in Gurgaon. (Service
in India generally works through authorized service centers, in
LG’s 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.

Objective of the project

Primary objective
The main objective of filed survey during the project was to find
out the market share of the LG and also calculate the display
share.
 Find out the positional dealer who can sale the LG product in
large volume.
The main objective of research was to identify potential dealer
and development these dealer. So LG can make them their direct
dealer.
This will ease the dependence on the some big dealer like
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.
To increases the knowledge consumer durable product of LG.

76
To enhances the knowledge about the marketing and branding
activity.

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 buyer’s behavior, consumption pattern,
brand loyalty, and focus market changes. A research design
specifies the methods and procedures for conducting a particular
study. According to Ker linger, “Research Design is a plan,
conceptual structure, and strategy of investigation conceived as to
obtain answers to research questions and to control variance.

77
Type of research is Descriptive Research
The type of research adopted for study is descriptive. Descriptive
studies are undertaken in many circumstances when the
researches is interested to know the characteristic of certain group
such as age, sex, education level, occupation or income. A
descriptive study may be necessary in cases when a researcher is
interested in knowing the proportion of people in a given
population who have in particular manner, making projections of
a certain thing, or determining the relationship between two or
more variables. The objective of such study is to answer the “who,
what, when, where and how” of the subject under investigation.
There 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.
Decide the types of data to be collected and the procedure to be
used in this research. 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.

78
Such studies are done in live situations like communities, schools,
factories, and organizations.
Another type of cross sectional study is survey result, which has
been taken by me. A major strength of survey research is its wide
scope. Detail information can be obtained from a sample of large
population .Besides; it is economical as more information can be
collected per unit of cost. In addition, it is obvious that a sample
survey needs less time than a census inquiry. Descriptive research
includes survey and fact finding enquiries of different kinds of
the major purpose. Descriptive research is description of the state
of affairs, as it exists at present. The main characteristic of this
method is that the researcher has no control over the variables; he
can only report what has happened or what is happening. The
methods of research utilized in descriptive research are survey
methods of all kinds including comparative and co relational
methods. The reason for using such needs to be flexible in its
approach, but a descriptive study

BRANCH
1 2 3 in contrast tends to be rigid and its approach cannot be
changed every now and then.

DEALER MANAGEMENT: Mapping of regional dealers.


They have been divided into three categories on the basis of their
turnover and the selling capacity.

 -1
 -2
 -3
-1 Includes the modern trade and they have direct billing from
the branch office. They have high turnover and the company

79
depends heavily on them-2 includes the distributors. They have
direct billing from the branch office. Their turnover is also high.
-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.

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.

Data collection methods:

After the research problem, we have to identify and select which


type of data is to research. At this stage; we have to organize a
field survey to collect the data.
One of the important tools for conducting market research is the
availability of necessary and useful data.
Primary data: For primary data collection, we have to plan the
following four important aspects.
 Sampling
 Research Instrument
 Secondary Data - The Company’s profile, journals and various
literature studies are important sources of secondary data.
 Data analysis and interpretation
1. Questionnaires
2. Pie chart and Bar chart
Questionnaires:
This is the most popular tool for the data collection. A
questionnaire contains question that the researcher wishes to ask

80
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 of data and a whole of
data.

Bar chart:
This is another way of representing data graphically. As the name
implies, it consist of a number of whispered bar, which originate
from a common base line and are equal widths. The lengths of the
bards are proportional to the value they represent.

Preparation of report:
The report was based on the analysis and presented with the
findings and suggestions. The sample of the questionnaires is
attached with the report itself.

Sampling Methodology:
Details of the sampling methodology, I have made questionnaire.
The one is made for the Customer.
No. of questions in questionnaires for customer: 07
No. of question related to LG product: 03
No. of people met during the research: 200
No. of respondents during the research: 50
Sample unit Professionals, Business man,
Employees, House wife, Working women, Students
Analysis:

81
Q1. Have you purchased any consumer durable during
Exhibitions?
 Yes
 No
Inferences
1. 65 % of Customers have not purchased any consumer durable
from exhibitions.
2. Only 35 % people have purchased.
3. It shows that consumers are coming in the exhibition for
knowledge of product and also they want to know that weather
there is actual price difference in exhibition and shop or not.
4. Consumers also want to compare to the different brand which
are available in the exhibition.
5. So exhibitions are more useful to increases brand awareness.
6. People are less interested to purchase product from the
exhibition.

Q.2While purchasing consumer durable which parameter


influences you?
 Price
 Product feature
 Brand
 Service
 Durability
Inference
1. 30% of customer gives importance to price. So it shows that
Indian consumers are very price sensitive. They give more
importance to price over the brand.
2. 26% give importance to brand. So price and Brand matter a lots
for the costumers. And they are also want best brand in best
price.

82
3. 19% to product feature Service 16% and durability 9% Service is
also a big factor for the customer they are less interested in the
durability.

Q3. From where you prefer buying consumer durables


 Exhibitions
 Co.shope
 Showroom
Inference:
1. A majority of customers prefer to buy from showrooms. Very
less proposition of customers buys from Exhibitions.
2. 47% customers are prefer to by from the showrooms because
the showrooms are more convenient to customers they also think
that these shops give more discounts.
3. People are less interested to buy from the exhibition they only
visit the exhibition for price quotation of the product and the
comparison of the product.

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


Q.3 because of following reasons
 Attractive Price
 Service
 Demonstrations
 Offers

Inference
1. Customers buy from showrooms because of the service and
convenience.
These are two main factors.
2. Customers are preferred to buy from the showroom because of
they think that these convenient store may provide good after sell
service.

83
3. Customer also thinks that there is more chance to bargain and
they can get more discounts in these showrooms.
4. Price also a factor that attract the customer in these showrooms.

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


 CTV
 LCD
 PLASMA
 REF
 WM
 MW
 AC
Inference
In CTV section maximum customers have Onida, in LCD Sony is
the leader, In plasma BPL is the leader, In Ref LG is the leader,
MW LG is the leader. In WM there are companies and in AC also.

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


 1-3 years
 3-5 years
 5-10 years
 More than 10 years

Inference
1. Customers prefer to change consumer durables within 5-10
years. In India people do not change consumer durable
frequently.
2. 23% customers do not change their consumer durable within 10
year.
3. It represent that Indian consumer do not prefer to change their
consumer durable frequently.

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Q.7.Do you prefer any financing scheme to purchase consumer
durables?
 Yes
 No
Inference
Majority of customers do not prefer any financial scheme.

Dealer survey 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.
7. The top competitor of LG product in is SAMSUNG.
8. In area the performance of LG is in better position but the
competitor also hold closer margin.
9. There is high growth of sale in market due to booming in new
technology and better service.
10.Word of mouth plays a vital role in awareness among
customer. This is one factor, which can play a good role in

85
promotion of products as well as demonstration given by the
shopkeeper also plays a vital role for customer.

RECOMMENDATIONS AND SUGGESTIONS:

1. LG should improve it’s after sale service because its hits badly
LGs market share in region.
2. More detailed customaries service is to be provided.
3. The training to in shop demonstration should be given at
frequent time interval and feed back should be considered
positively.
4. The company should look into the matter of person hiring for
in shop demonstration. A big LG showroom should have at least
2 such kind of person.
5. LG should try new dealer who have the potential. So they can
target more market.
6. As there is a bottle neck competition between Samsung and LG,
it is necessary to take measure steps to overcome the area of
downfall in LG with respect to Samsung.
7. The marketing managers should make better relations with
dealers and reputation of the company.
8. Customer considers quality as their first preference, so the
company should give more stress on this.
9. The switching of customer from LG product to other brand is
due to the bed after sell service in shop.
10.The product is well aware and it is on top of mind of customer.

So company should always improve services and update their


technology.

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CUSTOMER SURVEY FINDINGS
1. Secondary supports play an important role in the customers
mind and create awareness among the customers. The secondary
support includes Demonstration, Exhibition & Even Sponsors.
2. From the survey it was found out that the majority of
customers don’t buy consumer durables from exhibitions. They
just visit the exhibitions to see the co. latest model.
3. They want to buy from the showrooms or from co. showrooms.
For them service is important .Beside convenience and other
factors service is key factor.
4. Also majority of customers do not want any financing scheme
for purchasing the durables.
5. There was heavy rush on weekends so large numbers of ISD’s
were appointed that day. Also the live demo calls helps in selling.
Exchange offers also generate sale.
6. Customers are also now very choosy in buying the product and
it is important for the company to make loyal customer of their
brand.
7. In survey we found that LG has captured maximum market
share in every category. LG dominates CTV, LCD, and
Refrigerator, and Washing machine, category.
8. LG and Samsung have bottle neck competition in TV and REF.
category.
9. The product is well aware and it is on top of mind of customer.
10.Customers are also now very choosy in buying the product
and it is important for the company to make loyal customer of
their brand.

87
RECOMMENDATIONS AND SUGGESTIONS
1. Exhibitions do not help to generate so much sells but they
should be conducted regularly. This helps in generating
awareness regarding the product in customers which ultimately
helps in sales.
2. Also it is helps in advertising for the new products. Like in this
exhibition new LCD SCARLET was advertised. Company should
always focus on service.
3. Display share should be increased where there is less than 50%
as LG also believes that “JO DIKHTA HAI WO BIKTA HAI”.
4. Company should try to improve service. No doubt the
company products have technically edge over competitors but in
long run it may hamper the company’s profit.
5. Company should concentrate more on its major drivers LCD,
IT, and GSM. Branding and promotions should be done
effectively as it creates a long lasting image in the mind of
customers.
6. Company should also cater to the needs of sub dealers as some
of the sub dealers have potential of high sales.

88
LIMITATIONS
Every study has certain limitations. In our study, also there were
certain limitations, which I could not able to solve.
1. The research was conducted in a very small area.
2. Our research work period witness the biggest ups and downs
in product sale of different brands, which affected the perception
of the customer.
This was biggest drawback of my study.
3. Time factor was also important for us. We had limited time for
the 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. We 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

89
BIBLIOGRAPHY
 www.lgindia.com
 www.google.com
 www.wikipedia.com
 Business world
 Business today
 LG magazine
 Economics times News paper
 Times of India

Consumer survey Questionnaire

90
Q1. Have you purchased any consumer durable during
Exhibitions?

a) Yes

b) No

Q.2While purchasing consumer durable which parameter


influences you?

a) Price

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


because of following reasons

91
a) Attractive Price

b) Service

c) Demonstrations

d) Offers

e) Convenience

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

a) CTV -------------------

b) LCD -------------------

c) PLASMA -------------------

D) REF -------------------

E) WM -------------------

F) MW -------------------

G) AC -------------------

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

a) 1-3 years

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b) 3-5 years

c) 5-10 years

d) More than 10 years

Q.7.Do you prefer any financing scheme to purchase consumer


durables?

a) Yes

b) No

APPENDIX

93
A.S.I Area Service In charge
A.S.M Area sales manager
B.S.I Branch Service In charge
CAC Commercial Air Conditioning System
C.S NET Customer Service Net
D.S.C. Direct service centre.
L.H.D Logistics Head of department
R.E.F Refrigerator

94

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