Professional Documents
Culture Documents
PROJECT REPORT
ON
“MARKET ANALYSIS OF LG CONSUMER DURABLES”
With Reference to
AMRTANSH ENTERPRISES, Bhopal
(Authorized LG Electronics Dealer)
During this small time frame of two months in which the project reached its
completion, there were a few people whom I would like to make a mention of
and without whose help the project would have never seen the light of the
day.
I also thank to my internal guide Prof. (Dr.) Pawan Mishra, HOD of
Commerce Department, Rajeev Gandhi College, Bhopal for his timely
response, which immensely helped in giving the project the initial direction it
needed.
I would like to thank my external guide Mr. Prateek Gaur, Amrtansh
Enterprises, Bhopal (Authorized Dealer of LG Electronics) who gave me a free
hand as far as going about the project work was concerned.
Last, but not the least, my heartfelt love for my parents and my
friends, whose constant support and blessings kept me enthusiastic
throughout this project.
DECLARATION
I will take pleasure in declaring that the project work entitled
Place: Bhopal
(_______________)
NIKITA RAJPUT,
BCom. (Fifth Semester)
Roll No.:1023451208247
Preface
I take this opportunity to present the project report and sincerely hope
that it will be as much knowledge enhancing to the readers as it was to use
during the fieldwork and the compilation of the report.
TABLE OF CONTENTS
* EXECUTIVE SUMMARY
* INTRODUCTION
Introduction to Study
Opportunity
Brands in Consumer Electronic Sector
* COMPANY PROFILE
Global Operation
Product and Services offered by
Company
Mission of Company
* RESEARCH METHODOLOGY
India being the second largest growing economy with huge consumer
class has resulted in consumer durables as the fastest growing industries in
India LG, SAMSUNG the two Korean companies has been maintaining the lead
in the industries with LG being leader in almost all the categories.
The rural market is growing faster than the urban market, although the
penetration level is much lower .The CTV segment is expected to the largest
contributing segment to the overall growth the industry. The rising income
levels double-income families and consumer awareness are the main growth
drivers of the industries.
Consumer durables major LG Electronics India Pvt Ltd (LGEIL) will invest nearly
Rs 500 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 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’s innovative ‘211 campaign’ to provide quality after-sales service, will also
be expanded from the existing 22 to 40 cities by next month,
The campaign, for which IT infrastructure has been set up, includes the
company’s response to customer complaint within two hours. The fixing time
for complaints varies from one hour to a maximum of 24 hours.
Scope of project
This project gives me great exposure to the consumer durable market because
it includes product knowledge and the filed job in which I have visited the store
comes under the region of Pune. During this project I also took part in the
exhibition of LG which held for the purpose branding and awareness of LG
product. This project helps me to know the market practically. My job was
during this project to see the market share and also the display share of the LG
product in the store. LG always insist the 50% display share of LG product
because LG believes that “JO DIKHTA HAI WO BIKTA HAI”.
1. Calculate the display share of the LG product in every shop which comes
under Pune region.
2. Collect the data of actual monthly sale of the LG product in every shop.
4. Find out the problems that the dealer are facing while sailing the LG
product.
5. Find out the costumer response for the LG product by asking the owner
of the shop.
6. Find out the distributer name from whom they purchasing their product
and also weather they have direct dealership and which brand.
7. Check that demo calls are attended or not
Key findings:-
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.
Before the liberalization of the Indian economy, only a few companies like
Kelvinator, Godrej, Allwyn, and Voltas were the major players in the
consumer durables market, accounting for no less than 90% of the market.
Then, after the liberalization, foreign players like LG, Sony, Samsung,
Whirlpool, Daewoo, and Aiwa came into the picture. Today, these players
control the major share of the consumer durables market.
5. Mobile phones
Scope
Opportunity
3. Rapid urbanization.
Threats
PANASONIC )
SHARP )
HITACHI )
SANSUI ) JAPAN
AKAI )
AIWA
WHIRLPOOL )
ELECTROLUX
MNCs, exchange offers, discounts, and intense competition. The market share
of MNCs in consumer durables sector is 65%. MNC's major target is the
growing middle class of India. MNCs offer superior technology to the
LG, SAMSUNG the two Korean companies has been maintaining the lead
in the industries with LG being leader in almost all the categories.
The company, having a turnover of Rs 9,500 crore and market share of 26 per
cent, is investing Rs 360 crore on brand-building and other marketing
1. LG Global
2. LG India
3. LG Pune
History of company
The company was originally established in 1958 as Gold Star, producing radios,
TVs, refrigerators, washing machines, and air conditioners.
The LG Group was a merger of two Korean companies, Lucky and Gold Star,
from which the abbreviation of LG was derived. The current "Life's good"
slogan is a backronym. Before the corporate Name change to LG, household
products were sold under the Brand name of Lucky, while electronic products
were sold under the brand name of Gold Star. The Gold Star brand is still
perceived as a discount brand.
In 1995, Gold Star was renamed LG Electronics, and acquired Zenith Electronics
of the United States.
Global Operation
LG Electronics is playing an active role in the world market with its assertive
global business policy. As a result, LG Electronics controls 110 local subsidiaries
in the world with around 82,000 executive and employees.
LG Group
1. LG.Philips LCD
2. LG Chemical
3. LG Telecom
4. LG Powercom
5. LG Twins
6. LG Dacom
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,
Digital display
a) Plasma TVs,
b) LCD TVs,
d) Monitors,
e) PDP Modules,
f) OLED Panels,
g) USB Memory,
Digital media
d) CD±RW,
e) Notebook PCs,
f) Desktop PCs,
g) PDAs,
h) PDA Phones,
i) MP3 Players,
k) Car Infotainment
VISION
GROWTH STRATEGY
CORE COMPETENCY
CORPORATE CULTURE
SLOGAN
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.
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 PARTNERSHIP
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 will do its best to create new products and services with
an open mind, while developing new technologies and business fields through
various associations with some of the world's most successful companies.
1. 3M
2. SUN
3. YAHOO
4. PHILLIPS
5. TOYOTA
6. MICROSOFT
7. HP
8. GOOGLE
9. GE
10.INTEL
11.NORTEL
12.HITACHI
13.PRADA
14.RENESAS
15.TOSHIBA
16.BESTBUY
Both companies will work together to release, market, and offer LG mobile
phones with Google services (search engine, map, email, and blogs.)
LG BRAND IDENTITY:-
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.
1. Value
2. Promise
3. Benefits
4. Personality
a. Trust,
b. Innovation,
c. People
d. Passion
Reliable products
Simple design
Ease of use
Extraordinary Experience
Trustworthy, Considerate
Practical, Friendly
1. Learning Culture
2. Boundary less Environment
3. A Carrier
4. Growth
A carrier is highly growing in LG and one who is the employee can develop
their carrier largely. A new comer will feel fully comfortable in the company
and for a new comer the company is very helpful in the overall growth of
personality.
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
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.
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
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.
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.
India challenges
The challenges faced by LG when entered in Indian market
R&D potential
LG has the research and development facilities in Bangalore and Pune. Both
the unit carry out R&D department for the domestic as well as the parent
company it also dose customize R&D for the specific countries to which it
export product.
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 then dumping stock on
channel partners.
Product localization:-
LG
position
of REF in
various states in India
LG position of WM 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. I select
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 2012. 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.
. LG BHOPAL
In 2004 LGEIL opened second factory which is located in Ranjangaon. This plant
manufactures all product including DVD writers and GSM mobiles. Thus it
became first company to manufacture DVD writer in India. The ODP plant aims
to reach a manpower base of 1500 people and an investment of Rs 300 crore
till 2010.
LG India will become the export hub for LG Worldwide, catering to the Middle
East and African markets. The company aims to touch an export turnover of $3
billion by 2010 from India, which will contribute to 30 per cent of the Indian
arm's turnover.
The three strategies for the Indian market that the global electronics giant
disclosed. included: penetrates the south-western market of India through
the new Pune plant near Mumbai, the second largest city in India, in addition
to the existing northern plant; installs a new GSM handset production line in
the new Pune plant and uses it as its second-largest global GSM handset
production line after the Qingdao plant in China; and expands the current 750
R&D staff in India to 1,500 by 2011, striving to develop premium products and
export 30% of India-manufactured products to Asia, Middle East and Africa
markets by 2011.
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.
In connection with its three growth strategies for the Indian market, LG
Electronics will invest a total of US$150 million in establishing facilities and
boosting R&D efforts in India by 2007. Specifically, it will invest US$53 million
in the Pune second plant, another US$43 million in establishing the GSM line,
and US$54 million in securing R&D manpower and boosting other efforts.
Through these strategies, LG Electronics aims to penetrate the global market
by using China and India as its core production bases, while operating its plants
in Changwon and Gumi, Korea, as its main production bases. This way, the
company is pushing to penetrate the global home appliance market.
The present capacity of the facility is of 1 lakh unit per year and it shall cater to
the need of the domestic markets. LG plans to upscale its operations to a figure
of 2.5 lakh units a year in the near future. The Pune plant in addition to its
current manufacturing facility at Greater Noida will enable the company to
enhance its consumer reach and reiterate 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.
The company has number of dealers and warehouses. They have LG exclusive
shopee. For the marketing of the products a number of activities are followed
Logistics is the art and science of managing and controlling the flow of goods,
energy, information, and other resources like products, services, and people,
from the source of production to the marketplace. It is difficult to accomplish
any marketing or manufacturing without logistical support. It involves the
integration of information, transportation, inventory, warehousing, material
handling, and packaging. The operating responsibility of logistics is the
geographical repositioning of raw materials, work in process, and finished
inventories where required at the lowest cost possible.
1. Right Time
2. Right Place
3. Right Condition
4. Right Cost
5. Right Handling
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 a feel of what’s really keeping after sales from being used as a cutting edge
marketing tool in pushing products across categories.
LG also had a big problem of after sale service in India. During my project I
also came to know that after sale service becomes the big issue in Pune region.
Customers as well as dealer were facing the problem of after sale service.
Because of this problem many dealer in Pune region were not ready to sale LG
product. So it becomes the big issue.
But LG has taken some solid steps towards improving customer’s perception
and experience of after sales service. Because it very important in competitive
market to provide the best service.
The company aims to recruit 10,000 people by the end of this year as a part of
its branding strategy to focus on service and move away from discounting.
L G Electronics has identified eight states with high after sales service call rates
to ink the deals with the ITI. Y V Verma, director HR and management system,
LG Electronics said, "The Company was trying to find a solution for effective
after sales service since last two years. There is a huge need of trained
manpower for the after sales service to align with the company's expansion
and focus on the GSM mobiles and the personal computer segments."
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.
3. "The company has offered a scholarship to the selected students for the
last six months of their training programme,"
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. (as
mentioned in Dermot’s public interview in ET on Wednesday). 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). If the next
convenient day for you is the next day, that’s great too. 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.
From 16th to 25th May a consumer exhibition was organized at the college of
Engineering ground. The exhibition was sponsored by Sakal group in which
number of companies participated.
EXHIBITIONS PICTURES SHOWING THE PRODUCTS
Primary objective
The main objective of filed survey during the project was to find out the
market share of the LG and also calculate the display share.
Find out the positional dealer who can sale the LG product in large
volume.
This will ease the dependence on the some big dealer like Amrtansh
Enterprises.
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?
Research Methodology:
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
Kerlinger, “Research Design is a plan, conceptual structure, and strategy of
investigation conceived as to obtain answers to research questions and to
control variance.
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.
Questions and deciding the types of data to be collected and the procedure to
be used in this purpose. Descriptive studies can be divided into two broad
categories: Cross Sectional and Longitudinal Sectional. A cross sectional study
is concerned with a sample of elements from a given population. Thus, it may
deal with household, dealers, retail stores, or other entities. Data on a number
of characteristics from sample elements are collected and analyzed. Cross
sectional studies are of two types: Field study and Survey. Although the
distinction between them is not clear- cut , there are some practical
differences, which need different techniques and skills. Field studies are ex-
post-factor scientific inquiries that aim at finding the relations and
interrelations among variables in a real setting. Such studies are done in live
situations like communities, schools, factories, and organizations.
Another type of cross sectional study is survey result, which has been taken by
me. A major strength of survey research is its wide scope. Detail information
can be obtained from a sample of large population .Besides; it is economical as
more information can be collected per unit of cost. In addition, it is obvious
that a sample survey needs less time than a census inquiry. Descriptive
research includes survey and fact finding enquiries of different kinds of the
major purpose. Descriptive research is description of the state of affairs, as it
exists at present. The main characteristic of this method is that the researcher
has no control over the variables; he can only report what has happened or
what is happening. The methods of research utilized in descriptive research are
survey methods of all kinds including comparative and co relational methods.
The reason for using such needs to be flexile in its approach, but a descriptive
study in contrast tends to be rigid and its approach cannot be changed ever
now and then.
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.
PICTURE SHOWING THE PRODUCT OF LG IN ONE OF THE SHOP
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:
Preparation of report:
The report was based on the analysis and presented with the findings and
suggestions. The sample of the questionnaires is attached with the report
itself.
Sampling Methodology:
Sample unit
Analysis:
Yes
No
Inferences
Price
Product feature
Brand
Service
Durability
Inference
2. 26% give importance to brand. So price and Brand matter a lots for the
costumers. And they are also want best brand in best price.
Exhibitions
Co.shoppee
Showroom
Inference:
3. People are less interested to buy from the exhibition they only visit the
exhibition for price quotation of the product and the comparison of the
product.
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
3. Customer also thinks that there is more chance to bargain and they can
get more discounts in these showrooms.
CTV
LCD
PLASMA
REF
WM
MW
AC
Inference
In CTV section maximum customers have Onida, in LCD Sony is the leader, In
plasma BPL is the leader, In Ref LG is the leader, MW LG is the leader. In WM
there are companies and in AC also.
1-3 years
3-5 years
5-10 years
INFERENCE
Yes
No
INFERENCE
4. We also came to know while visiting the shops that there was big
problem of after sale service.
5. Many dealers were facing the problem of after sale service because
there is no follow up calls from LG.
1. LG should improve it’s after sale service because its hits badly LGs
market share in Pune region.
CONCLUSION
3. They want to buy from the showrooms or from co. showrooms. For
them service is important .Beside convenience and other factors service
is key factor.
6. Customers are also now very choosy in buying the product and it is
important for the company to make loyal customer of their brand.
2. Also it is helps in advertising for the new products. Like in this exhibition
new LCD SCARLET was advertised. Company should always focus on
service.
5. Company should concentrate more on its major drivers LCD, IT, and
GSM. Branding and promotions should be done effectively as it creates a
long lasting image in the mind of customers.
6. Company should also cater to the needs of sub dealers as some of the
sub dealers have potential of high sales.
LIMITATIONS
Every study has certain limitations. In my study, also there were certain
limitations, which I could not able to solve.
1. The research was conducted in a very small area.
2. My 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 me. I had only 60 days to complete
my research, for which a full-fledged report was insufficient for me.
4. The customer filled the questionnaire mostly in careless manner, so it
was difficult to make them hold for time.
5. I had only found the upper-middle class family to fill up the
questionnaire, but generally, an average middle class family was
required for the study.
6. The sample size is also very small which represent my research on
consumer behavior
BIBLIOGRAPHY
www.lgindia.com
www.google.com
www.wikipedia.com
Business world
Business today
LG magazine
Economics times News paper
Times of India