KOREAN CONQUEST: HOW LG AND SAMSUNG WON OVER THE INDIAN MARKET

Presented by: M. Arsalan Sheikh Ahsan Bham Sobia Khan (#7989) (#8106) (#6316)

CONSUMER DURABLES INDUSTRY: OVERVIEW

Fastest growing industry in India Advertising and brand building has a key role Demand is seasonal and cyclical Price and brand differentiation Technology driven Continuous innovation Supply and distribution network High involvement in R&D activities After-sales services

CONSUMER DURABLES INDUSTRY: PRODUCT SEGMENTATION Consumer Durables Consumer Appliances White Goods y Refrigerators y Washing machines y Air conditioners y Speakers and audio equipment Brown Goods y Mixers y Grinders y Microwave ovens y Iron y Electric fans y Cooking range y Chimneys Consumer Electronics y Mobile phones y Televisions y MP3 players y DVD players y VCD players .

The compound annual growth rate of the market volume in the period 2008-2013 is predicted to be 8.4% since 2008. the Indian household appliances market is forecast to have a volume of 52.5%.CONSUMER DURABLES INDUSTRY: PERFORMANCE ‡ Expected to drive the market to a value of $7.7 billion by the end of 2013. An anticipated CAGR of 10% for the five-year period 2008-2013 ‡ In 2013.2 million units. an increase of 50. .7% since 2008. an increase of 60.

India ($3.CONSUMER DURABLES INDUSTRY: CURRENT SCENARIO In term of purchasing power parity (PPP).5% per year until 2015. . The urban market has now largely become a product replacement market.55 Trillion) is the 5th largest economy in the world and overtake Japan in the near future become the 4th largest. The middle class in India is fueling economic growth and disposable incomes are expected to grow at an average of 8.

The market share of MNCs in the consumer durables sector is 65%. The top 67 cities in India are the key potential markets for appliances. 40 Billion by on 2010 The Indian household appliances market grew by 32% in 2010. These cities contribute 14% of the GDP. .CONSUMER DURABLES INDUSTRY: CURRENT SCENARIO Indian consumer durable market is expected to reach Rs.

In case of television the penetration level is 18%.5% for refrigerators and washing machines respectively. .CONSUMER DURABLES INDUSTRY: RURAL MARKET The rural market is growing faster than the urban market. Rural areas have the penetration level of only 2% and 0. The urban market and the rural market are growing at the annual rates of 7%-10%and 25% respectively. as it accounts for 70% of the Indian population. Rural sector offers huge scope for consumer durables industry.

CONSUMER DURABLES INDUSTRY: CURRENT SCENARIO .

CONSUMER DURABLES INDUSTRY: BRANDS MNCs  Korea o LG o Samsung o Hyundai  China o TCL o Haier  Holland o Phillips  Japan o Sony o Panasonic o Sharp o Hitachi o Sansui o Akai o Aiwa o Whirlpool o Electrolux National Onida ideocon BPL Kelvinator Allwyn Godrej oltas IFB Bush rown Salora Weston Beltak Oskar R gional .

000 households .CONSUMER DURABLES INDUSTRY: WHITE GOODS 1995-1996 Demand Penet ati n level 3.43 milli n 149 per 1.14 milli n 451 per 1.72 milli n 319 per 1.000 households 2005-2006 8.000 households 2009-2010 13.

CONSUMER DURABLES INDUSTRY: MARKET SEGMENTATION Demographic y y y y Life style Personality Income Occupation Behavioral y y Geographic y y Value Benefit sought Tier 1 Cities Tier 2 Cities Psychographic .

DEMAND & GROWTH DRIVER Personal Income Availability of financing Product affordability Increasing share of organized retail Entry of heavyweight retail players Increasing appreciation of the Rupee Technological and design advancements Innovative advertising and brand promotion .

CONSUMER DURABLES INDUSTRY: WHITE GOODS .

CONSUMER DURABLES INDUSTRY: COMPETITIVE STRUCTURE .

COMPANY PROFILE  Situation LG Electronics India Pvt. Ltd.. Growth Strategy  Focused on innovative.  . feature-rich products ²µValue-plusµ platform Offering affordable products at a lower margin ²cutting on volume to bring in revenues Key Success Factors Innovative marketing strategies yLG has differentiated its products using technology and health benefits. Product localization yLG came out with Hindi and regional language menus on its appliances Regional channel strategy and wide distribution network yLG has over 46 branch offices and 110 area offices across the country. a wholly owned subsidiary of LG Electronics. Local and efficient manufacturing to reduce cost yImplementing a ´digital manufacturing systemµ (DMS) as a cost-cutting innovation. South Korea was established in January 1997 after clearance from the Foreign Investment Promotion Board.

COMPANY PROFILE: Objectives y y The aim of LG is to provide the customers with utmost satisfaction through leadership. People leadership Core Competency y . Market leadership. Product leadership. The fundamental policy of development is to secure product leadership that the Customers may have the utmost satisfaction.

not with incentive areas other foreign brand Wide range of product categories to tap the consumer upper-middle class y Similar product categories and upper-upper class as compare to its close LG. having the widest competitors Samsung distribution network in the industry Good after-sales services .COMPANY PROFILE: SWOT ANALYSIS y y y Strength Weakness y y Market leader in home y Consumer compare LG appliance segment products with its competitor Manufacturing unit in taxSamsung and Sony.

launch new technological products. y Home appliances market is Samsung & Sony growing very fast.COMPANY PROFILE: SWOT ANALYSIS The closest competitors Samsung is also from South y Shifting to rural market Korea. y Opportunity Threat . so there is y Competitors from Indian an opportunity for LG to brand and new entrants. and consumer y Control over the white goods compare LG products with market. as we know the Samsung products highest market in home y Price-against-benefits war appliance market with its closes competitors.

Korea.COMPANY PROFILE Situation Key Success factors Innovative Samsung India Electronics Ltd. Strategy has won over 150 awards in India for its technology and design based products. plant and localization design and technology innovations Manufacturing . an affluent customer base ²higher priced products Customized Creating a premium brand image ² products for its consumers yunderstands the local cultural sensibilities to customize its products according to the market. is a subsidiary of Samsung Electronics Corporation (SEC) headquartered Launching the best in design and in Seoul. Samsung India technology was formed in 1995. ySamsung Growth Building promotion and advertising yBranded its products as superior technology and environment friendly ones.

COMPANY PROFILE Objectives aims to become India·s leading volume retailer in the consumer electronics segment yAchieving y ySamsung its aim by focusing on its Core Strategy Work on strengthening its unique Brand Image Customer Satisfaction yGaining Core competency yTechnology leadership .

COMPANY PROFILE: SWOT ANALYSIS y Strength Weakness Core value: Approach market y Approach market through through technology and technology and design design leadership leadership: a slow process. y Launching hi-tech and contemporary products with y Not targeting the mass zeal and speed market y Created a Unique Brand Image for itself as a high end y Not spreading the brand all value driven brand over India y The Samsung Marketing Academy .

Onida. The high end value driven proposition helps increase the Market Share.COMPANY PROFILE: SWOT ANALYSIS Opportunities The Indian Mass Market. Videocon. y y y captured by a rival company. Increased emergence of modern retail chains.a problem as Samsung is investing in building a retail network across the country y Samsung is well known for it product differentiation Threats Indian Mass Market may be y .etc. LG.

COMPETITOR ANALYSIS Localized positioning basis Centralized R&D Lesser Range of products Dealer Network not as strong Less Indian Customer Centric products Focus on local R&D Range of products in a wide range Dealer network is very strong Many products specially for India Positioning on a global .

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