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

MARKETED’ BY: ANUP AGARWAL (SIKKIM MANIPAL UNIVERSITY 5TH SEMESTER)

Acknowledgement
It is indeed of great moment to pleasure to express our senses of profound gratitude & indebtedness to all the people who have been instrumental in making it a rich experience. We found it to be a challenging project that gave us a real practical exposure to the corporate world and it is almost impossible to do the same without the guidance of peoples around us. It gives us immense pleasure to acknowledge LG ELECTRONICS INDIA Ltd. dealers, who have been nice enough to give us a chance to do our project and providing us wonderful support throughout our project.

Executive summary
Indian Consumer durables market used to be dominated by few domestic players like Godrej Voltas Allwyn and

Kelvinator. But post liberalization many foreign companies have entered into Indian market dethroning the Indian players and dominating Indian market the major categories being CTV, REFRIGRATOR, AIR CONDTIONERS and WASHING MACHINES. India being the second largest growing economy with huge consumer class has resulted in consumer durables as the fastest growing industries in India. LG, SAMSUNG the two Korean companies have been maintaining the lead in the market with LG being leader in almost all the categories. The rural market is growing faster than the urban market, although the penetration level is much lower .The CTV segment is expected to the largest contributing segment to the overall growth of the industry. The rising income levels double-income families and consumer awareness are the main growth drivers of the industries. Consumer durables major LG Electronics India Pvt Ltd (LGEIL) will invest nearly Rs 500 crore in India this year in research and development, brand-building and other marketing initiatives. The company, having a turnover of Rs 9,500 crore and market share of 26 percent, is investing Rs 360 crore on brand-building and other marketing initiatives and around Rs 140 crore on research and development, besides launching new platforms in information technology and related areas, LG’s innovative ‘211 campaign’ to provide quality after-sales service, will also be expanded from the existing 22 to 40 cities by next month, the campaign, for which IT infrastructure has been set up, includes the company’s response to customer complaint within two hours. The fixing time for complaints varies from one hour to a maximum of 24 hours.

Scope of project

6.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. 5. Collected the data of actual monthly sale of the LG products in few shops. Incidentally Diwali time was nearing during our survey period which exposed us to another aspect of product promotion. Checked whether demo calls are attended or not . 4. Calculated the display share of the LG product in every shop. Found out the customer response for LG products by asking the owner of the shop. While visiting the shops we 1. 2. 7. 3. Found out the distributor name from who they were purchasing their products and also whether they have direct dealership and which brand. Checked the availability of LG catalogue and the POPs in the store. Found out the problems that the dealer are facing while selling the LG products. LG always insist the 50% display share of LG product because LG believes that “JO DIKHTA HAI WO BIKTA HAI”.

. 3. 5. Demo calls also not done properly. By the actual monthly sale of particular store we came to know the capacity of the store and how much product can they sell. 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. Many dealers were facing the problem of after sale service because there is no follow up calls from LG.Key findings:1. 2. 4. We also came to know while visiting the shops that there was big problem of after sales service. 6. By calculating the display share we found that in most of store LG has 50% display share almost all categories.

MNCs offer superior technology to the Consumers whereas the . and introduction of new models. there are still very few players in categories like vacuum cleaners. Consumer durables market is expected to grow at 10-15% in 2007-2008. exchange offers. Alwyn. Sony. Godrej. foreign players like LG. microwave ovens. MNC's major target is the growing middle class of India. and Aiwa came into the picture. these players control the major share of the consumer durables market. accounting for no less than 90% of the market. and dishwashers Consumer durables sector is characterized by the emergence of MNCs. as many foreign players are entering in the market With the increase in income levels. However. only a few companies like Kelvinator. Whirlpool. The market share of MNCs in consumer durables sector is 65%. Daewoo. the demand for consumer durables has increased significantly. Products like washing machines. increase in consumer awareness. Today. discounts. Samsung. Then. and wide range of choice.INTRODUCTION Before the liberalization of the Indian economy. and Voltas were the major players in the consumer durables market. easy availability of finance. It is growing very fast because of rise in living standards. air conditioners. color televisions (CTVs) are no longer considered luxury items. after the liberalization. and intense competition. easy access to consumer finance.

Hi-Fi. Consumer electronic include vcd/dvd. non-kitchen appliances. Moulded luggage include plastics 4. kitchen appliances. refrigerators. builtin appliances. washing machines. India is the 4th largest economy in the world and overtake Japan in the near . vacuum cleaners. etc 2. air conditioners. home theatre. heaters. portable audio. White goods include dishwashers. Mobile phones Scope 1. color television (CTVs). cameras. the penetration level of the consumer durables is still low in India. personal care product etc. Clocks and watches 5. music player. Tumble dryer. camcorders. and hold over wide distribution network. their well-acknowledged brands.Indian companies compete on the basis of firm grasp of the local market. 3. Classification of consumer durables sector 1. However. microwaves. In term of purchasing power parity (PPP).

Indian consumer durable market is expected to reach $400 billion by on 2010 3.400-US$21. Rapid urbanization.future become the 3rd largest. India has the youngest population amongst the major countries. 4. Unexploited rural market.e.2 million in 2007 as against 14. There are 56 million people in middle class. And there are 6 million rich household in India. Increase in income level. In India the penetration level of white goods is lower as compared to other developing countries. There are lot of people in the different income categories nearly the two third population is below the age of 35 and nearly 50% is below 25. The upper-middle and high-income household in urban areas are expected to grew to 38. . 4. Easy availability of finance.6 million in 2000.800 a year. increase in purchasing power of consumers. 5. who are earning us$4. 2. 5. i. Opportunity 1. 3. 2.

Brands in consumer electronics sector MNCs REGIONAL LG BUSH SAMSUNG CROWN HYUNDAI SALORA TCL SERIES CHINA NATIONAL ONIDA KOREA VIDEOCON BPL GODREJ T- . China and from other Asian countries. 2. Higher import duties on row materials. Cheap imports from Singapore.Threats 1.

SAMSUNG the two Korean companies has been maintaining the lead in the . MNC's major target is the growing middle class of India. discounts. The market share of MNCs in consumer durables sector is 65%. MNCs offer superior technology to the LG. and intense competition. exchange offers.HAIER WESTON BELTAK PHILIPS OSKAR PANASONIC SHARP HITACHI SANSUI AKAI ) AIWA WHIRLPOOL ELECTROLUX VOLTAS IFB HOLLAND JAPAN TODAY Consumer durables sector is characterized by the emergence of MNCs.

The company. we have divided the introduction part into three main sub parts.industries with LG being leader in almost all the categories. is investing Rs 360 crore on brand-building and other marketing initiatives and around Rs 140 crore on research and development. LG History of company: . Before briefing. besides launching new platforms in information technology and related areas. LG Global 2. having a turnover of Rs 9. LG Electronics is one of the leading companies in the field of electronics with a global presence in many countries.500 crore and market share of 26 per cent. 1. LG India 3.

TVs. 1958-1969-GoldStar The Electronics Industry Dream . washing machines. producing radios.The company was originally established in 1958 as Gold Star. refrigerators. and air conditioners.

1970-79 GoldStar symbol of The Technolgoy 1980-88 :.INTERNATIONALIZATION 1989-94 INOVATION .

1995-98 GLOBAL LEADERS LG ELECTRONICS 1999-2003-DIGITAL MANAGEMENT .

Lucky and Gold Star. from which the abbreviation of LG was derived.2004-2006 GREAT PEOPLE GREAT DESIGN 2007-THE PEOPLE COMPANY The LG Group was a merger of two Korean companies. The current "Life's good" slogan is a .

LG Dacom Business areas and main products Mobile communications (a) CDMA Handsets. As a result. d) Washing Machines. b) Refrigerators. LG Chemical 3. (b)GSM Handsets. Gold Star was renamed LG Electronics. (c) 3G Handsets. (d) Cellular Phones Digital appliance a) Air Conditioners. while electronic products were sold under the brand name of Gold Star. LG Powercom 5.backronym. Before the corporate Name change to LG.Philips LCD 2. and acquired Zenith Electronics of the United States. LG. LG Group 1. 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. c) Microwave Ovens.000 executive and employees. household products were sold under the Brand name of Lucky. LG Electronics controls 110 local subsidiaries in the world with around 82. In 1995. LG Telecom 4. g) Compressors for Air Conditioners and Refrigerators Digital display . LG Twins 6. f) Home Net. e) Vacuum Cleaners.

c) Micro Display Panel TVs. g) USB Memory.a) Plasma TVs. e) PDP Modules. j) New Karaoke Systems. f) OLED Panels. d) Monitors. k) Car Infotainment VISION Global Top 3 by 2010 Global Top 3 Electronic/Telecommunication company . d) CD±RW. b) LCD TVs. e) Notebook PCs. b) DVD Recorders. g) PDAs. f) Desktop PCs. h) Flat Panel Computer Monitors Digital media a) Home Theater Systems. h) PDA Phones. i) MP3 Players. c) Super Multi DVD Rewriters.

Fun workplace SLOGAN . “we” not “I”. Market leadership.GROWTH STRATEGY “Fast innovation. Fast growth” CORE COMPETENCY “Product leadership. People leadership” CORPORATE CULTURE No excuse.

"Life's Good" set in Charlotte sans typeface curved around the LG symbol. The curving of the slogan reinforces LG's personality and uniqueness. seal. and the slogan."Life's Good" represents LG's determination to provide delightfully smart products that will make your life good. THE SYMBOL . The LG Electronics Life's Good signature consists of the LG logo. 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.

humanity & technology. The one eye on the symbol represents “Goal-oriented. 1. Focused & Confident”. Benefits . Promises. youth. The stylized image of a smiling face in the symbol conveys “Friendliness and Approachability”. The stylized image of human face in the unique LG red color. . The logo in LG gray 2. LG philosophy is based on humanity.The symbol of LG is the face of future. The slogan of LG is “Life’s Good”. The letter “L” and “G” in a circle symbolizes world. future. Red color represents our friendliness and gives a strong impression of LG’s commitment to deliver the best. It expresses“ Brand’s Value . It also represents LG’s efforts to keep close relationship with our customers around the world. Personality . The symbol consists of two elements. The circle symbolizes The Globe.

STRATEGIC ALLIANCE LG Electronics is making technical advances and identifying business opportunities through various associative relationships with some of the world's leading companies.THE PARTNERSHIP LG Electronics chooses to promote harmony and build constructively on a labor-management relationship rather than an employee-employer relationship. but in a horizontal one. This illustrates that management and workers are not in a vertical relationship. is of key significance in terms of strengthening the existing industry and creating a new one. . 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. Such a relationship is transformed into a value-creation relationship whereby both parties endeavor to address mutual problems and create new values together. "Strategic association between corporations. This culture is necessary for LG Electronics as it strives to become one of the world's top companies." in which companies with different infrastructures cooperate in the fast-developing 21st century business field.

YAHOO 4.HITACHI 13.BESTBUY . TOYOTA 6. while developing new technologies and business fields through various associations with some of the world's most successful companies.PRADA 14. 1.LG Electronics will do its best to create new products and services with an open mind. MICROSOFT 7. 3M 2.NORTEL 12. HP 8.RENESAS 15. GE 10. GOOGLE 9.INTEL 11. SUN 3.TOSHIBA 16. PHILLIPS 5.

market. and blogs). Value Promise Benefits Personality The Brands core Value that never changes. This service is targeting 10 million LG mobile phones in over 70 countries. 2007 LG Electronics and Yahoo formed a strategic alliance. Both companies will work together to release.In Feb. institutive functionality and exceptional performance. LG BRAND IDENTITY:The brand of LG is delightfully smart. The brand platform:The LG brand is composed of four basic elements – 1. In Mar. 4. email. 2. Yahoo mobile services will be available from LG mobile. LG strives to enhance the customer’s life and lifestyle with intelligent features. 3. . map. and offer LG mobile phones with Google services (search engine. 2007 LG Electronics and Google formed a strategic alliance.

Innovation. b. Friendly The Internal Culture of LG: .a. 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. People d. c. Considerate Practical. Trust.

Boundary less Environment means that there is no difference between the levels of employees.LG practices four cultures 1. the Learning Culture continuously helps the employee to learn more and more to develop the habit of continuous learning. A Carrier 4. Boundary less Environment 3. Mission . A carrier is highly growing in LG and one who is the employee can develop their carrier largely. Learning Culture 2. Growth in LG is very high for those who are in the company and for those who want to join in LG. Growth According to LG. There is transparency between the work and mutual understanding between all the employees. 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. The company is growing with fast innovation and the BLUE Ocean strategy is one of the examples of growth.

Product Leadership We are focusing on six development areas to become the product leader. 1. New Machine 2. Reliability 3. Energy Saving Quality Innovation . Environment Friendly Product 5. Low Noise & Vibration 6. The fundamental policy of development is to secure product leadership that the Customers may have the utmost satisfaction.The mission of LG is to provide the customers with utmost satisfaction through leadership. Conventional Installation 4.

A) Honest with our customer . From top to bottom: No. LG will succeed through fair management practices and constantly developing our business skill. It is named as “LG WAY”.1 LG – is the VISION “Jeong-DO” Management is LG’s unique application to ethics.The policy of quality assurance is to provide customers with utmost satisfaction by supplying zero defects. LG proceeds in a hierarchal manner.

b) Providing great values to customer through constant innovation & and development.Creating value for customer Code of conduct of LG 1. Responsibility and obligations to customers : • Respect for Customers . c) Equal opportunities d) Equal Treatment Management Principle .

• • Creating Value Providing Value 2. Corporate Responsibilities to employees • Respect for human dignity • Fair Treatment • Promoting Creativity . Basic Ethics for Employees • • • • • Basic Ethics Completion of Duty Self Development Fairness in Performance Avoidance of conflict with company interest 5. 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.

LG set up a state-ofthe art manufacturing facility at Greater Noida. .6. Ltd.. with an investment of Rs 500 Crores. in 1998. a wholly owned subsidiary of LG Electronics. near Delhi. South Korea was established in January 1997 after clearance from the Foreign Investment Promotion Board (FIPB). Responsibilities to society and country • • • • Rational Business Development Protection of stock holder interest Contribution to social development Environmental Conservation LG INDIA LG Electronics India Pvt.

consumer durables leader with 27% market share. Washing Machines. This facility manufactured Color Televisions. At present. superior technology products & value for money to more than 50 lakh households in India. LG Electronics India Ltd (LGEIL). LG plans to launch 60 premium Brand Shoppes by the end of the first quarter of this year.51. ''Company is setting up a chain of exclusive premium showrooms.LG corporate office is located at Plot no. India. LG Electronics India is the fastest growing company in the consumer electronics. of which 45 are shops and 38 are exclusive stores. LG Electronics is continually providing. Udyog Vihar. Brand shops will be placed in the premium segment and the target audience will comprise buyers interested in premium and high end products. The exercise will cost the company Rs 360 crore. LGEIL is celebrating the 11th anniversary this year. company will roll out a new marketing strategy. home appliances. 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. Greater Noida. Kasna Road. To attract inspirational and young consumers across India. . AirConditioners and Microwave Ovens. and computer peripherals industry today. is planning a brand new image. LG has a total of 83 LG stores across the country.

As per Shin's estimate.8 billion rupees for investment purpose in India this year. air conditioners and other household goods in the Indian market was to the tune of 95 billion rupees ($2. The Indian branch of LG exports to 40 countries. we are determined to see LG become one of the top three brands globally. India churns out six (6) per cent of LG Electronics global revenues of $42 billion. the sales in 2008 would be around 110 billion rupees. India challenges The challenges faced by LG when entered in Indian market . LG Electronics. a strong work culture and loyalty to the organization. Motivated by a passion for technology. managing director of LG Electronics India has said that the company has earmarked 4.LG Soft India the innovation wing of LG Electronics in Bangalore is LG Electronics' largest R&D centre outside Korea. color televisions.4 billion) in 2007. digital video broadcast and biometrics software and support LG Electronics with our expertise. informed that its sales of GSM mobile phones. has said that it expects the sale of its products in India to up by 15 per cent in 2008. LG Electronics Inc. In order to achieve its target. which is originally a South Korean Company with branch in India. Moon Bum Shin. Shin said LG Electronics will concentrate on catering to the high-end consumer market which will help boost sales this year. The said money will be used to market as well as manufacture new products. Prominent consumer electronic company. We at LGSI focus on niche technology areas such as mobile application development.

3. by sponsoring the 1999 world cup followed it up in 2003 as well.1. Low brand awareness about LG in India. 2. One of the last MNCs entered in India (Samsung. 5. High import duty 4. Compitition from local market players and other MNCs in consumer durable segment. Launch new technologies in consumer electronic and home appliances. LG was the first brand to enter in cricket in big way a way. Price sensitiveness of the Indian consumer LGEI over comes these challenges to emerge as Innovative marketing strategy 1. 3. 2. Panasonic entered in 1995 in India). LG brought in four captains of the Indian cricket team to .

4. 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 . LG has differentiated its product using technology and health benefits. technology” Air conditioner has microwave ovens CTV has air “Golden system” eye and “Health have the “Health wave system”. 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 as the parent company it also .endorse its products. LG invested more then US$ 8 million on advertising and marketing in this sport. 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.

Regional channel and wide distribution network 1.dose customize R&D for the specific countries to which it export product. 3. Introduced the low-priced “Cineplus” and “Sampooma” for the rural market. LG also follows the stock rotation policy rather then dumping stock on channel partners. This has resulted in quicker rotation of the stock and better penetration into B. LG was the first brand to introduce gaming in TVs in continuations of its association with cricket LG introduce cricket game in CTVs . 4. class market. Product localization:1. All the distributers work directly with the company. C. Product localization is the key strategy used by the LG 2. D. LG has adopted the regional distribution channel in India. LG came out with Hindi and regional language menus on its TVs. 2.

4.MAJOR KEY SUCCESS FACTORS: 1. 3. by sponsoring the 1999 World Cup and followed it up in 2003 as well. C and D class markets. Regional distribution model .Product localization is a key strategy used by LG. Commissioned contract manufacturing at Mohali.LG was the first brand to enter cricket in a big way. Local and efficient manufacturing to reduce cost . It came out with Hindi and regional language menus on its TV. Kolkata and Bhopal for CTVs.LG Electronics has awarded .This has resulted in quicker rotation of stocks and better penetration into the B.To overcome high import duties. LG manufactures PC monitors and refrigerators in India at its manufacturing facility at Noida. Product localization . Innovative marketing . 2. Leveraging India’s IT advantage . 6. Delhi. 5.

30% Office). The project involves development and support for ERP. Strategies adopted by the organization: LG follows 10 commandments which are as follows. 1. Even Billing –Road to ach supplier A 8. CRM and IT-enabled services for LG. . Plan and Execute annual marketing Calendar-Time to market 10. Customer is the king 7. 9. Transparent and fast communication-open communication 4. Foster working environment-5S Environment 2. Update market -knowledge –Demographics 5.Display share of 50% -to get 50% consumer share. Be in touch with the market (70% Market. Win –Win relationship with the trade partners 6.a contract to develop IT solutions to LG Soft India (LGSI). Fast execution is key to success 3. SCM.

Moon Bum Shin. It shows that LG has captured maximum market share almost in every category. managing director of LG Electronics India has said that the company has earmarked 4. LG Electronics Inc. air conditioners and other household goods in the Indian market was to the tune of 95 billion rupees ($2. has said that it expects the sale of its products in India to up by 15 per cent in 2008.LG market share of consumer appliances and consumer electronic:LG LG LG LG LG LG LG position position position position position position position of of of of of of of CTV in various states in India REF in various states in India WM in various states in India AC in various States in India Audio & Home Theater in various in India DVD in various in India 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. informed that its sales of GSM mobile phones. color televisions. LG Electronics. This analysis represents the LG market position during the period of March 2008. As per .8 billion rupees for investment purpose in India this year. Prominent consumer electronic company.4 billion) in 2007. We selected different brand in different category as per the market share and the demand of product in market. The said money will be used to market as well as manufacture new products. LG and Samsung have the maximum market in consumer durable market but LG dominate the almost all the category in consumer durable.

LG PUNE LG Pune is the branch office of LGEIL. the sales in 2008 would be around 110 billion rupees. 2004 -. It is located in J. The company aims to touch an export turnover of $3 billion by 2010 from India. This plant manufactures all product including DVD writers and GSM mobiles.1 billion people of India making the Indian market the second largest global production base following China. In 2004 LGEIL opened second factory which is located in Ranjangaon.M Road. Shin remarked that the company was targeting an increase of exports to $300 million in 2008 from $230 million in 2007. In order to achieve its target. The Indian branch of LG exports to 40 countries.Shin's estimate. India churns out six (6) per cent of LG Electronics global revenues of $42 billion. Shin said LG Electronics will concentrate on catering to the high-end consumer market which will help boost sales this year. . catering to the Middle East and African markets. Thus it became first company to manufacture DVD writers in India. India. The ODP plant aims to reach a manpower base of 1500 people and an investment of Rs 300 crore till 2010. which will contribute to 30 per cent of the Indian arm's turnover. LG India will become the export hub for LG Worldwide. October 6. Under this .LGE announced 3 growth strategies aimed at the 1.

India covers a total area of 211. striving to develop premium products and export 30% of India-manufactured products to Asia. and expand the current 750 R&D staff in India to 1. and electronic ovens. the second largest city in India. it will invest US$53 million in the second plant. Specifically. LG Electronics aims to penetrate the global market by using China and India as its core production bases. 10 times that of 2004. The company is set to add production lines of air conditioners. and US$54 million in securing R&D manpower and boosting other efforts. in addition to the existing northern plant.strategy LGE has projected 2007 revenues in India will exceed US$10 billion. Middle East and Africa markets by 2007. The GSM handset line envisages a capacity of manufacturing 2 million handsets annually.000 TVs and one million refrigerators a year. monitors. Through these strategies. In connection with its three growth strategies for the Indian market. LG Electronics’ second new plant in Pune. by 2005. another US$43 million in establishing the GSM line. The three strategies for the Indian market that the global electronics giant disclosed included: penetrate the southwestern market of India through the new plant near Mumbai. LG Electronics is poised to install a GSM handset production line in the new plant by early next year. while operating its plants in Changwon and Gumi. Also. installs a new GSM handset production line in the new plant and use it as its secondlargest global GSM handset production line after the Qingdao plant in China. and the company expands it to become a global GSM handset production base with a capacity of an annual 10 million units by 2010. washing machines.200 square meters and is currently equipped with a production line to manufacture 600. . LG Electronics will invest a total of US$150 million in establishing facilities and boosting R&D efforts in India by 2007.500 by 2007.

LG has split its southern regional office into two. This way. LG had a marketing budget of Rs 320 crore in 2007 with a 60:40 split in favor of below-theline activities. LG plans to upscale its operations to a figure of 2. Gujarat and Madhya Pradesh. as its main production bases. the company is pushing to penetrate the global home appliance market.Korea. In the coming year. 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. Maharashtra & Goa and Punjab.5 lakh units a year in the near future. Haryana & Rajasthan respectively. The present capacity of the facility is of 1 lakh unit per year and it shall cater to the need of the domestic markets. Next year. it has split one of its northern regional offices by making Uttar Pradesh a separate region after spinning it out from Delhi NCR. one comprising the states of Tamil Nadu and Kerala and the other consisting of Andhra Pradesh and Karnataka. In addition. The key strategies being implemented include increasing the number of its regional offices from six to eight. the company plans to increase the share of mass media even as overall marketing spends would be raised by just about 10-15%. The other four regional offices take care of East. . resulting in a significant increase in its mass media expenditure for better brand visibility. LG is also repositioning its marketing spends.

. Exhibitions are conducted from time to time. They have LG exclusive shops. Posters. Society and college activities are conducted.Distribution and Marketing: The company has number of dealers and warehouses. Hoarding. For the marketing of the products a number of activities are followed: 1. 3. 2. banners are used so as to grab the attention of the costumers.

services. category to know the performance of the dealers. LG also uses the radio FM for the promotion activities. 5. Discount at festival time.4. 6. It involves the integration of information. and people. information. . and other resources like products. transportation. 10. inventory. Day to day advertisement in leading newspaper. energy. from the source of production to the marketplace. It is difficult to accomplish any marketing or manufacturing without logistical support.Also provide capon and scratch card for festive season. warehousing. 8. 9. For dealer relationship they arrange dealer meeting at several time in the year 7. LG divide dealer in gold silver etc. The logistics (Supply Chain Management):Logistics is the art and science of managing and controlling the flow of goods. They have their sales persons at various sub dealer store and at mordent trade store for particularly for the promotion of the LG product.

importers. the products are sent to the branch warehouse. exporters. They also often have cranes and forklifts for moving . Spare part warehouse The mother warehouse is that where the products from the factory are kept and from that warehouse. Warehouses are used by manufacturers. work in process. They come equipped with loading docks to load and unload trucks. transport businesses. Right Cost 5. There are three types of Warehouse1. Branch Warehouse 3. airports. Right Place 3. customs. Right Condition 4. and finished inventories where required at the lowest cost possible. Logistics Management is that part of the supply chain. implements and controls the efficient. Right Time 2. etc. A warehouse is a commercial building for storage of goods. Right Handling The LG Factory is located at NOIDA & . which plans. wholesalers. Mother Warehouse 2. and packaging. They are usually large plain buildings in industrial areas of cities and towns. or seaports. services and related information between the point of origin and the point of consumption in order to meet customers' requirements. The operating responsibility of logistics is the geographical repositioning of raw materials.material handling. effective forward and reverse flow and storage of goods. or sometimes are loaded directly from railways. 5R’s of Logistic followed by LG: 1.

Loc 7 Loc 1 – selling Loc 2 . which are usually placed on ISO standard pallets loaded into pallet racks. allow this to move in market Distribution Time:• Local delivery – 4 hrs. 3. 2. which the LG strictly follow.12 hrs. Loc 2. the products are pinup with 3-color paper to get the knowledge about the delivery.insurance claim Loc 4 . . Sweeping 2. 1.write off material Loc 5 – destroy the item Loc 6 . 1.discipline In warehouse. Loc 3. In warehouse 7 locations is set up for the products. Self. Loc 1.court case material Loc 7 . Red Card – To stop the product going into market.Loc6. Green card – To allow the product for delivery in market. Sorting 3.second sale Loc 3 . Loc 5 .goods. Yellow Card – After the product labeled with green. Simplification 5. Systematic Arrangement 4.for repair 5’s of warehouse. • Upcountry delivery . Loc 4 .

Follow standard pick – ship process religiously. The above distribution time is the time of delivery of products from warehouse to the market place. One has to follow the rule of “NO Smoking” within the warehouse Logistics Ten Commandments – Golden Rules 1 . 5 & 7 to be properly maintained. we have the following process.100% Bar-coding for all inward & outward transaction. 2 . · Order Processing · Invoicing · Indenting · Report Order Processing booking for dealers /distributors Invoicing after billing process/bill generation Indenting requirement (Production Unit to branch unit) Report distributed to all In warehouse. there are two mode of dispersion of product from one place to another within. In LG. a) Hydraulic b) Manual In addition. which the logistic department follows to fulfill the demand in the market at right time. . – 24 hrs. • Beyond 200 km. These fire extinguishers are valid up to year 2011.Warehouse 5S – to be strictly followed – FG – 2. there are 35 fire extinguishers to prevent the accidental hazard within the warehouse due to fire.• Within 200 km. – 48 hrs. which is followed in logistic through ERP. 3 .

Ensure 90% accuracy. shortage or excess – monthly 100% physical stocktaking. the pits. so critical for its success and so taken for granted in developed markets! In India. 9 – PSI feeding into system by 25th of every month. So what’s stopping the best companies from pulling . 5 – Nil 30+ for FG – 2. after sales service is. CUSTOMER SERVICE: The best and the biggest international brands are here in India –but the irony if it all: where is the after-salesservice? So integral to a brand. ERP – Invoice Generation Process. Hydraulic Trolleys for material movement. 8 – No inter – branch transfer without HO clearance. Fluctuation in demand-supply Equipments 100% Bar code scanner. Pallets for safety of material. Cost target achievement.4 – No inventory mismatch. 6 – Nil transit damage. for want of a better description. 7 – File insurance claim within 2 days. Problem 12341234In transit material damage checking. 10 – Apply physical FMFO. Settle all claim all within 30 days. Natural events tracking. 3 & 5.

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. labor costs. Because of this problem many dealer in the region were not ready to sell LG product. speed of response. So it becomes the big issue. stockiest and dealers. or service provider determines what is included in any warranty (or guarantee) package. and speed of response. In the case of a service provider. after-sales service can be almost as important as the initial purchase. During the project we also came to know that after sale service becomes the big issue in the region. and action taken. LG also had a big problem of after sale service in India. retailer. Of equal importance is the customer's perception of the degree of willingness with which a supplier deals with a question or complaint.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. L G Electronics has . Because it very important in competitive market to provide the best service. after-sales service might include additional training or helpdesk availability. In some cases. items included/excluded. Customers as well as dealer were facing the problem of after sales service. This will include the duration of the warranty traditionally one year from the date of purchase. Customers support following the purchase of a product or service. but increasingly two or more year’s maintenance and/or replacement policy. But LG has taken some solid steps towards improving customer’s perception and experience of after sales service. Brand Equity fanned out to MNC as well as Indian consumer durable companies. The manufacturer.

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." 1. Delhi. LG Electronics said. the Service Division in Korea reports to the Global CMO. 5. has already recruited 300 students and plans to beef up the number to 10. At the top. Y V Verma." 4. "The company has offered a scholarship to the selected students for the last six months of their training program. This shows commitment that . 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. 3. In the initial phase the company has entered into agreements with ITIs in the states like Maharashtra. L G Electronics has identified eight states with high after sales service call rates to ink the deals with the ITI. The company aims to recruit 10.000 by the year-end. 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. Gujarat. and Karnataka and is in the last leg of signing with Uttar Pradesh. Assam. with 1200 service centers. (as mentioned in Dermot’s public interview in ET on Wednesday). director HR and management system.000 people by the end of this year as a part of its branding strategy to focus on service and move away from discounting.signed a memorandum of understanding with 23 Industrial Training Institutes to strengthen its after sales service in India. L G Electronics. 6. 2. Punjab. "The Company was trying to find a solution for effective after sales service since last two years.

that’s great too. You may have seen the TV commercial or heard the radio advert or seen the newspaper ad or in-shop posters. knows things better. we will call you back in 2 hours (hence 2). 10. Objective of the project Primary objective . and can even contribute as a revenue center. (Service in India generally works through authorized service centers. It’s a disruptive action in an industry (including LG) having traditionally shied away from its service responsibilities.once you register your complaint. set up an appointment for the next convenient day for you (hence the first 1).The first LG-owned service centre opened in Gurgaon. both of which revolve around prompt response. it shows the company is ready to put our money where our mouth is. 8. probably the first time after sales service is being communicated in this fashion by any product company. in LG’s case they work exclusively for LG. and show up in the promised 1-hour slot (hence the second 1). some estimates put it at a significant multiple of serviceinfrastructure from our nearest competitor. LG has the widest service network across the country. and thus not leveraging any mileage from it. The company has introduced a 211 service . The company is promoting 211 through ATL.Service must be made into a marketing differentiator. If the next convenient day for you is the next day. and leveraged thus. 9. While the sale size may also be a nice multiple from nearest.) A company-owned service centre tries that much harder. 7.

 The main objective of research was to identify potential dealer and development these dealer. .  To increases the knowledge consumer durable product of LG. 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. So LG can make them their direct dealer.  Find out the positional dealer who can sale the LG product in large volume. Secondary objective  The Objective was to find out that how far the exhibitions are helpful in branding.  Find out the problem faced by the dealer in sales and the distribution.  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.  This will ease the dependence on the some big dealer like Maharashtra and Mahaveer electronics.  To enhances the knowledge about the marketing and branding activity.

According to Kerlinger. brand loyalty. consumption pattern. The main objective of survey was to collect appropriate data. Therefore. and focus market changes. In fact. Without a proper well-organized research plan. The project was based on the survey plan. which work as a base for drawing conclusion and getting result. It is an important tool to study buyer’s behavior. it is impossible to complete the project and reach to any conclusion. A research design specifies the methods and procedures for conducting a particular study. “Research Design is a plan. 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. conceptual structure.Research Methodology: Research methodology is considered as the nerve of the project. Descriptive studies are undertaken in many circumstances when the researches is interested to know . and strategy of investigation conceived as to obtain answers to research questions and to control variance. Type of research is Descriptive Research The type of research adopted for study is descriptive. research methodology is the way to systematically solve the research problem. it is the key to the evolution of successful marketing strategies and programmers.

the characteristic of certain group such as age. A cross sectional study is concerned with a sample of elements from a given population. demanding a high degree of scientific skill on part of the researcher.cut . Descriptive study can be complex. when. Descriptive studies are well structured. Questions and deciding the types of data to be collected and the procedure to be used in this purpose. the researcher give sufficient thought to framing research. it may deal with household. sex. Data on a number of characteristics from sample elements are collected and analyzed. Thus. dealers. making projections of a certain thing. Such . 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. which need different techniques and skills. It is therefore necessary. but a descriptive study in contrast tends to be rigid and its approach cannot be changed every now and then. education level. This is not necessarily true. Field studies are ex-post-factor scientific inquiries that aim at finding the relations and interrelations among variables in a real setting. Cross sectional studies are of two types: Field study and Survey. or determining the relationship between two or more variables. An exploratory study needs to be flexible in its approach. retail stores. where and how” of the subject under investigation. Descriptive studies can be divided into two broad categories: Cross Sectional and Longitudinal Sectional. or other entities. there are some practical differences. what. occupation or income. Although the distinction between them is not clear. The objective of such study is to answer the “who. There is a general feeling that descriptive studies are factual and very simple.

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 flexile in its approach, but a descriptive study BRANCH 1 2 3 in contrast tends to be rigid and its approach cannot be changed ever 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 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 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: 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. of people met during the research: 200 No. The one is made for the Customer. 65 % of Customers have not purchased any consumer durable from exhibitions. 2. I have made questionnaire. 3. Consumers also want to compare to the different brand which are available in the exhibition. House wife. of question related to LG product: 03 No. 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. Students Analysis: Q1. of respondents during the research: 50 Sample unit Professionals. . Employees. Only 35 % people have purchased. Business man. Working women. No. Have you purchased any consumer durable during Exhibitions?  Yes  No Inferences 1. 4. of questions in questionnaires for customer: 07 No.

So price and Brand matter a lots for the costumers. 3. So it shows that Indian consumers are very price sensitive.2While purchasing consumer durable which parameter influences you?  Price  Product feature  Brand  Service  Durability Inference 1. 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. So exhibitions are more useful to increases brand awareness. People are less interested to purchase product from the exhibition. . They give more importance to price over the brand. Q3. And they are also want best brand in best price. A majority of customers prefer to buy from showrooms. 6.5. Very less proposition of customers buys from Exhibitions. From where you prefer buying consumer durables  Exhibitions  Co. Q. 2. 30% of customer gives importance to price. 26% give importance to brand.shoppee  Showroom Inference: 1.

4. Customers are preferred to buy from the showroom because of they think that these convenient store may provide good after sell service.Which consumer durable you have and of which brand?  CTV  LCD  PLASMA  REF  WM . Q.3 because of following reasons  Attractive Price  Service  Demonstrations  Offers Inference 1. These are two main factors.2.You prefer to buy from the same as you have mentioned in Q. 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. 2.5. Customer also thinks that there is more chance to bargain and they can get more discounts in these showrooms.4. Customers buy from showrooms because of the service and convenience. 3. 3. Q. Price also a factor that attract the customer in these showrooms. 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.

By calculating the display share we found that in most of store LG has . 23% customers do not change their consumer durable within 10 year. Q. Dealer survey Findings 1.6. Q.7. In India people do not change consumer durable frequently. It represent that Indian consumer do not prefer to change their consumer durable frequently. In WM there are companies and in AC also. in LCD Sony is the leader. MW  AC Inference In CTV section maximum customers have Onida. MW LG is the leader. Customers prefer to change consumer durables within 5-10 years. 3.Do you prefer any financing scheme to purchase consumer durables?  Yes  No Inference Majority of customers do not prefer any financial scheme. 2. In plasma BPL is the leader. How frequently you change your consumer durables?  1-3 years  3-5 years  5-10 years  More than 10 years Inference 1. In Ref LG is the leader.

Word of mouth plays a vital role in awareness among customer. 2. which can play a good role in promotion of products as well as demonstration given by the shopkeeper also plays a vital role for customer. More detailed customaries service is to be provided. 8. The top competitor of LG product in is SAMSUNG. 6. This is one factor.50% display share almost all categories. . RECOMMENDATIONS AND SUGGESTIONS: 1. 5. 3. 4. 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. We also came to know while visiting the shops that there was big problem of after sale service. Demo calls also not done properly. 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. Many dealers were facing the problem of after sale service because there is no follow up calls from LG. 10. 7. 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. LG should improve it’s after sale service because its hits badly LGs market share in region.

So company should always improve services and update their technology. The switching of customer from LG product to other brand is due to the bed after sell service in shop. The training to in shop demonstration should be given at frequent time interval and feed back should be considered positively. A big LG showroom should have at least 2 such kind of person. so the company should give more stress on this. 8. CUSTOMER SURVEY FINDINGS 1. The marketing managers should make better relations with dealers and reputation of the company. . 10.The product is well aware and it is on top of mind of customer. 9.3. 5. 2. LG should try new dealer who have the potential. The company should look into the matter of person hiring for in shop demonstration. From the survey it was found out that the majority of customers don’t buy consumer durables from exhibitions. Customer considers quality as their first preference. Exhibition & Even Sponsors. 7. it is necessary to take measure steps to overcome the area of downfall in LG with respect to Samsung. The secondary support includes Demonstration. 6. They just visit the exhibitions to see the co. As there is a bottle neck competition between Samsung and LG. Secondary supports play an important role in the customers mind and create awareness among the customers. So they can target more market. latest model. 4.

LG dominates CTV. Also the live demo calls helps in selling. LCD. For them service is important . Customers are also now very choosy in buying the product and it is important for the company to make loyal customer of their brand. The product is well aware and it is on top of mind of customer. 6. LG and Samsung have bottle neck competition in TV and REF.3. 10. 4. 8. 7. category. . Also majority of customers do not want any financing scheme for purchasing the durables. In survey we found that LG has captured maximum market share in every category. There was heavy rush on weekends so large numbers of ISD’s were appointed that day. and Washing machine. They want to buy from the showrooms or from co. 9. 5. category. and Refrigerator.Customers are also now very choosy in buying the product and it is important for the company to make loyal customer of their brand. showrooms.Beside convenience and other factors service is key factor. Exchange offers also generate sale.

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

We had limited time for the research. Time factor was also important for us. We had only found the upper-middle class family to fill up the questionnaire. 6. The sample size is also very small which represent my research on consumer behavior . 5. In our study. which I could not able to solve. The research was conducted in a very small area. which affected the perception of the customer. but generally. 4. Our research work period witness the biggest ups and downs in product sale of different brands. 1. also there were certain limitations. an average middle class family was required for the study. This was biggest drawback of my study. 3. 2. for which a full-fledged report was insufficient for me. The customer filled the questionnaire mostly in careless manner. so it was difficult to make them hold for time.LIMITATIONS Every study has certain limitations.

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

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.You prefer to buy from the same as you have mentioned in Q.shoppee c) Showroom 76 Q. Have you purchased any consumer durable during Exhibitions? a) Yes b) No Q.Consumer survey Questionnaire Q1.4.3 because of following reasons a) Attractive Price b) Service c) Demonstrations d) Offers e) Convenience .

Q.Do you prefer any financing scheme to purchase consumer durables? a) Yes b) No .5. How frequently you change your consumer durables? a) 1-3 years b) 3-5 years c) 5-10 years d) More than 10 years 77 Q.7.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.