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VIDEOCON-

consumer durables division


Akshata Vyas (2009006)
Chetan Kabra(2009016)
Neelay Thaly (2009026)
Rima Dhume (2009036)
Sharon Rodrigues(2009046)
Ankit Tandon(2009056)
Consumer durables
 India -5th largest market (12th in 2007)
 (Study by McKinsey Global Institute )
 Value of industry is above $4.5 billion
 Divided into 2 sub categories-

Consumer electronics Consumer appliances


Televisions Refrigerators
VCD players Washing machines
Audio systems Air conditioners
Mobile phones Microwave oven
CONTEXT­PEST ANALYSIS
Political Factors:

ØAnti-dumping duty on imported color


picture tubes.
ØEasy credit facility available
ØResolution to reduce emission of carbon
footprints in the atmosphere

P EST Analysis (Cont’d)…
Economic Factors

üGrowth of retail sector – expected to


reach 16% by 2011-12 from 4% in
FY07
üReduction in excise duty coupled with
rising incomes
üEconomic reforms by the government –
higher purchasing power
üEmergence of organized retail market
-leading to lower prices and higher
varieties
ü
PE ST Analysis (Cont’d)…
Social Factors :-

üChanging perception of luxury to


necessity
üDemand of the consumer durables is
seasonal and cyclic.
üHighly growing consumer durable
market
üCustomized products for rural India
üDecrease in average household size
üRural market – constraints.
ü
PES T Analysis (Cont’d)…
Technological Factors :-

 Improved electricity consumption


 Higher quality products
 Technological advancements
 True flat televisions, plasma televisions,
fully automatic machines, multimedia
televisions and home theatres with
advanced HTIB models etc
Implications
 Promising future
 Government regulations : major
revolution in industry
 Surge of more environment friendly
products


Company-Brand Line
Strengths/Competitive Advantage
 Backward integration
 Diversified goods portfolio across Consumer
Durables Sector
 Multi brand strategy
 Wide range of sales and service network
 Global company
Weaknesses
 Image of low to medium cost company
 Diversification into too many sectors
 Cannibalisation

 Not much international recognition


 Too much rebranding/ changing of
positioning
Current Advertising Strategy
 New logo. Unveiled on 2nd July, 2009
 The new ‘V’ composed of two animated green
showing going green, lava-like shapes called
Chouw and Mouw
 Company positioning to connect with
 the hearts and minds of young-at-heart
consumers.
 Shah Rukh Khan and Mahendra Singh Dhoni as
Brand Ambassadors

implications
 Follow current trend for positioning
 Diversification
 Multi-brand strategy leading to
cannibalization

Collaborators
Suppliers

 Plastic parts and powder and Printed


circuit boards form a major part of the
raw materials.

 Chinese as well as Indian companies


supply these items

 Makes compressors and printed circuit


boards (PCBs), along with shells for the
picture tubes
Distributors

 Largest distribution networks in the


country

 Over 4,000 dealers and sub-dealers,


and an after-sales service network of
over 100 service centers

 40000 distribution centers



Alliances

 1998-99:- Tied up with Toshiba and


Sansui
 March 1999 –tied up with Akai Electric
of Japan
 June 2005 -Bought out French giant
Thomson's colour picture tube
business
 July 2005 -acquired Electrolux
Kelvinator Ltd (EKL), the Indian arm of
Swedish appliances major AB
Electrolux.
 September 2006 - it acquired South Korea’s
Daewoo Electronics
 It also picked up a 8% stake in IOL
Broadband.
 It acquired a part in Datacomwhich had
licenses for services across India.
 It recently acquired Planet M
 Has recently pitched for Motorola’s handset
business
implications
 Alliances are advantageous

 Backward integrations

 Post sales services are weak


Customers
 Market size and growth
 Fastest growing industry
 Growing at a CAGR of roughly 25%
 Expected to reach US$158 billion by 2015.
 Industry output increased by 2.5% in Q1 2009
 Color televisions sales increased by 2% in Jan-Mar
09
 Videocon sales declined by 15.5% in the December
2008 quarter, then increased sequentially
 Sales higher by 4% from June to September 09
 Gross sales from the Company’s consumer
electronics and home appliances division grew
by 7.3 per cent (y-o-y) during the September
2009 quarter

Statistics
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
T e le v is io n s
S a le s 1 ,6 3 4 .1 2 1 ,8 3 6 .1 5 2 ,1 8 8 .9 8 1 ,9 6 5 .9 5 3 ,9 4 7 .2 4 4 ,5 6 0 .8 5
T o ta l m a rk e t s a le s 8 ,0 0 0 .0 0 8 ,5 0 0 .0 0 9 ,0 0 0 .0 0 9 ,1 0 0 .0 0 9 ,8 0 0 .0 0 1 0 ,5 0 0 .0 0
M a rk e t s ha re (vo lum e ) 2 0 .4 3 % 2 1 .6 0 % 2 4 .3 2 % 2 1 .6 0 % 4 0 .2 8 % 4 3 .4 4 %

M a rk e t s ize (va lue ) 8 ,0 3 5 .1 0 8 ,6 7 3 .8 0 9 ,4 3 4 .8 0 9 ,8 7 2 .8 0 1 0 ,7 2 0 .3 0 1 1 ,3 5 1 .8 0


D o m e s tic c o ns up tio n 7 ,9 2 6 .9 0 8 ,3 6 9 .3 0 9 ,1 1 3 .2 0 9 ,5 4 2 .3 0 1 0 ,3 8 9 .1 0 1 1 ,0 4 6 .7 0
ü Benefits ü Retail channel
 Competitive  Showrooms
price and
high quality  Hypermarkets
 Improve standard of 

living ü Consumer information


 Convenience of use sources
  Word of mouth
ü Frequency of purchase  Dealer’s
 Festive seasons recommendations
  Print ads

 Television Commercials


üBuying process üTrends


 Careful comparison  Increased disposable
 High involvement incomes
 Dealer’s influence  Growing aspirations

 Social factors  Rise in consumption


expenditures
 Availability of new
üDecision maker or models
decision-making unit 
Low switching costs
 Generally Housewife’s in
 Attractive financing
case of convenience of schemes
use  Other population

dynamics
 


üMarket segments
 Urban Market

Mainly bulk of middle class


Rapid urbanisation, 45 % Indians living in
urban areas by 2050, up from 30% in
2007-08
Urban and rural markets are growing at
the annual rates of 7%–10% and 25%,
respectively
Organised retail expected to garner 10%
share by 2010 from a mere 3% share at
Year 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Per capita pvt. Final 14,138 15,891 16,971 22,899
consumption 14,703 18,665 20,676
expenditure

Not much impact of Global Liquidity crisis leading to increased purchases
On an average increased by 8% in 2008­09
PFCE expected to be higher by 4.7 per cent in 2009­10.
 Rural market
Over 300 million people moving up from
the category of rural poor to rural lower
middle class between 2005 and 2025
Rural consumption levels are expected
to rise to current urban levels by 2017
Overall number of rural households
estimated to grow from 135 million in
2001-02 to 153 million in 2009-10
As per an NCAER report, compared to
urban areas, the ‘lower middle income‘
group in rural areas has nearly
doubled.
implications
 High scope in the rural market
 Increase in spending power
 Shift to flat screen and LCD TVs

Competitors
Television
Videocon has a good

foot hold in the CCTV


segment.
 Leader LG
 Challenger Samsung
 Follower Onida
 Nicher Sony

 Source: CRISIL Research, Industry

 Washing
Machines
 Leader -LG
 Challenger -Whirlpool
 Challenger- Samsung
 Nicher- IFB
 Follower -Godrej




 Source: CRISIL Research, Industry



 Refrigerator
 Leader LG
 Challenger Whirlpool

 Follower Samsung

 Follower Godrej


 Source: CRISIL Research, Industry



Cell phone handset Satellite TV
Leader Nokia Leader cable TV

Challenger Sony Ericsson In DTH leader DishTV


Closest competitor in
consumer durable -
Samsung
 Strengths of Samsung
 Catching the pulse of the consumer,
offering good design and understanding
emotions
 Heavy investment in technology, product
design and human resource
 Focus on innovative products for the high-
end market
 Samsung marketing academy
 Weakness of Samsung

 Not targeting mass market


 Not spreading the brand all over India

implications
 Need to achieve market share in DTH
and cell-phones as being new to the
market

 LG became the leader due to
technological advancement and new
varities TV sets.
projections
recommendations
 Videocon can collaborate with some
gaming giants like Sega
 Continuing with go green and electricity
efficient products
 For DTH services can tap untapped rural
market
 Emphasize on LCD and Slim TVs along with
CCTV
 Relationship marketing through improved
sales support
 Focus on OEMs as in international market
it can provide cost effective products

references
 www.videoconworld.com
 http://www.ibef.org/economy/consumermarket.aspx
 http://us.asiancorrespondent.com/Indianomics/2009/08/27/india%E
 www.euromonitor.com/india
 http://www.4psbusinessandmarketing.com/24042008/storyd.asp?s

 http://www.businessworld.in/index.php/Videocon-s-Identity-Crisis.h
 www.indianbudget.nic.in
 Indian Council for Research on International Economic
Relations (ICRIER)
 Databases – CMIE IAS, CMIE EIS, CRISIL, PROWESS,
CAPITALINE

Thank you