CHAPTER 1

EXECUTIVE SUMMARY

1
 EXECUTIVE SUMMARY

Indian consumer durables market used to be dominated by few domestic players like Godrej
,Voltas Allwyn and Kelvinater .But post liberalization much foreign company have entered
into Indian market dethroning the Indian player and dominating Indian market the major
categories in the market 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
Korean companies has been maintaining the lead in the industries with LG being leader in
most all the categories.

The rural market is growing faster than the urban market, although the penetration level is
much more. 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
Cr in India this year in research and development, brand-building and other
marketing initiatives.

The company having a turnover of Rs.9500 Cr. and market share of 26 percent,
is investing Rs. 360 Cr. on brand-building and other marketing initiatives and
around Rs. 140 Cr. on research and development, besides launching new
platforms in information technology and related areas

LGs innovative 211 campaign to provide quality after-sales service, will also
be expanded the existing 22 to 40 cities by next month,

The campaign, for which IT infrastructure has been set up, includes the
companys response to customer complaint within the two hours. The fixing time
for companies varies from one hour to a maximum of 24 hours.

2
The objectives that a good brand will achieve include:

Deliver the message clearly.

Confirms your credibility.
Connects your target prospects emotionally.
Motivates the buyer.
Concrete user loyalty.

3
 CHAPTER 2

LITERATURE REVIEW

4
 LITERATURE REVIEW

Competitive analysis

Competitor analysis is an important part of firms development of its strategy.

Its importance lies in understanding of competitors, their strategy, and resources
and capabilities. More specifically competitive analysis also allows a firm to
access its own firm verses competitors and plan for what competitors action
may be as a reactive to action the firm may take.

A competitor analysis provides a firm with the knowledge to leverage its

strength and address its weakness and, currently, take advantage of competitors
consist their strength. Finally, competitor analysis also gives a firm a better
understanding not only of the competitors but also their overall sector and where
the emerging opportunities may be.

In the time of internship as working on the topic of competitive analysis, I

referred to various literatures as published on internet on consumer durables
while goods various consumer durables companies etc.

Consumer durables in India

A combination of changing lifestyles, higher disposable income, greater product

awareness and affordable pricing has been internal in changing the pattern and
amount of consumer expenditure leading to robust growth of consumer durables
industry.

5
 CHAPTER 3

OBJECTIVE OF THE STUDY

6
 OBJECTIVE OF THE PROJECT

Primary Objective

The main of filed survey during the project was to find out the market
share of the LG and also calculate the display share.
Find out the positional dealer who can sale the LG product in large
volume.
The main objective of research was to identify potential dealer and
development these dealer. So LG can make them their direct dealer.
This will ease the dependence on the some big dealer like Maharashtra and
Mahaveer electronics.
Find out the problem faced by dealer in sales and the distribution.

Secondary Objective

The objective was to find out that how far the exhibitions are helpful in
branding.
While purchasing the consumer durables which parameter is most
important for the consumer
Do the consumers prefer the financial facility for buying consumer
durable?
How frequently consumers change the consumer durable?
To enhances the knowledge of consumer durable market.
To enhances the knowledge about the marketing and branding activity.

7
 CHAPTER 4

COMPANY PROFILE

8
 VISION

Global Top 3 by 2010

Global top 3 Electronic/Telecommunication company

GROWTH STRATEGY

Fast Innovation, Fast growth

CORE COMPETENCY

Product leadership, market leadership, people leadership

CORPORATE CULTURE

No excuse, we not I, fun workplace

9
SLOGAN

Lifes Good represents LGs determination to provide delightfully smart products

that will make your life good.

The LG Electronics Lifes Good consists of the LG logo, seal and the slogan.
Lifes Good set in charlotte sans typeface curved around the LG symbol. The
curving of the slogan reinforces LGs personality and uniqueness. The consistent
usage of this signature clearly establishes the company and unifies every
division and product from LG Electronics across the globe.

10
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 LGs efforts to keep close relationship with
our customers around the world.

The symbol consists of two elements.

1. The logo in LG Gray

2. The stylized image of human face in the unique LG red color

Red colors represent our friendliness and gives a strong impression of LGs commitment to
deliver the best.

The circle symbolizes the globe. The stylized image of a smiling face in the
symbol conveys Friendliness and Approachability. The one eye on the
symbol represents Goal-oriented, Focused & confident.

The slogan of LG is Lifes Good. It expresses Brands Value, Promises,

Benefits, Personality.

11
THE PARTNERSHIP

LG Electronics chooses to promote harmony and build constructively on a labor-

management relationship rather than an employee-employee relationship. This
illustrates that management and workers are not in a vertical relationship. but in
a horizontal one.

This culture is necessary for LG Electronics as it strives to become one of the

worlds top companies. Such a relationship is transformed into a value-creation
relationship whereby both parties endeavor to address mutual problems and
create new value together.

STRATEGIC ALLIANCE

LG Electronics is making technical advances and identifying business

opportunities through various associative Relationships with some of the
worlds leading companies.

LG Electronics is striving to become number one in the world by mingling

in various business and technological fields and making strategic alliances with
world famous companies. Strategic association between corporation, in which
companies with different infrastructures cooperate in the fast developing 21 st
century business field, is of key significance in terms of strengthening the
existing industry and creating is new one.

12
 CHAPTER 5

INTRODUCTION

13
 INTRODUTION

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
durables market.

Consumers durables market is expected o grow at 10-15% in 2007-2008. It is

growing very fast because of rise in living standards, easy access to consumer
finance, and wide range of choice, as many foreign players are entering in the
market

With the increase in income levels, easy availability of finance, increase in

consumer awareness, and introduction of new models, the demand for consumer
durables has increased significantly. Products like washing machines, air
conditioners, microwave ovens, color television (CTVs) are no longer considered
luxury items. However, there are still very few players in categories like vacuum
cleaners, and dishwashers.

Consumer durable sector is characterized by the emergence of MNCs exchange

offers, discounts, and intense competition. The market share of MNCs in
consumer durables sector is 65%. MNCs major target is the growing middle
class of India. MNCs offer superior technology to the consumers

Whereas the Indian companies complete on the basis of firm grasp of the local
market, their well-acknowledged brands, hold over wide distribution network.
However, the penetration level of the consumer durables is still low in India.

In 2004, LGEIL also up its second Greenfield manufacturing unit in pune,

Maharashtra that commences operations in October this year. Covering over 50
acres, the facility manufactures color television, Air Conditioners, Refrigerators,
Washing Machines, Microwave Ovens color Monitors and GSM phones.

LG has been able to craft out in eight years, a premium brand positioning in the
Indian market and is today the most preferred brand in the segment.

14
CLASIFICATION OF CONSUMER DURABLES SECTOR

1. Consumer electronic include VCD/DVD, home theatre, music player, color television
(CTVs), cameras, camcorders, portable audio, HI-FI, etc.
2. White goods include dishwashers, air conditioners, heaters, washing machines,
refrigerators, vacuum cleaners, kitchen appliances, non-kitchen appliances,
microwaves, built-in appliances, tumble dryer, personal care product etc.
3. Moulded luggage include plastics
4. Clocks and watches
5. Mobile phones

SCOPE

1. In term of purchasing power parity (PPP), India is the 4th largest economy in the
world and overtake Japan in the near future become the 3rd largest.
2. Indian consumer durable market is expected to reach $400 billion by on 2010.
3. India has the youngest population amongst the major countries. There 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.
4. There are 56 million people in middle class, who are earning US$4,400-US$21800 a
year. And there are 6 million rich household in India.
5. The upper-middle and high income household in urban areas are expected to grew to
38.2 million in 2007 as against 14.6 million in 2000.

15
S.W.O.T ANALYSIS OF THE ORGANIZATION

STRENGTHS

Premium Pricing, No Discount.

Focus on Technology and Quality.
Strong commitment from parent.
In house manufacturing capability.
Products localized to suite Indian tastes.

WEAKNESS

Lack of transparency with dealers

Focus on niche segments
Dominance of Frances work culture
Little presence in A and B class towns

OPPORTUNITY

Convert image into market share.

Wide product portfolio
Positive rub-off due to high quality
Healthy resources generation

THREATS

Way behind market leader

Stagnant urban demand
Nothing unique about strategy

16
BRAND IN CONSUMER ELECTRONICS SECTOR

MNCs

LG }

SAMSUNG } KOREA

HYUNDAI }

TCL } CHINA

HAIER }

PHILIPS } Holland

PANASONIC }

SHARP }

HITACHI } JAPAN

SANSUI }

AKAI }

AIWA }

TODAY Consumer durables sector is characterized by the emergence of MNCs,

exchange offers, discount, and intense competition. The market share MNCs in consumer
durables sector is 65%. MNCs major target is the growing middle class of India. MNCs
offer superior technology.

LG, SAMSUNG the two Korean companies has been maintaining the lead in the
industries with LG being leader in almost all the categories.

17
The company, have a turnover of Rs. 9500 Cr. and market share of 26 percent, is investing
Rs. 360 Cr. on brand-building and other marketing initiatives and around Rs. 140 Cr. on
research and development, besides launching new platforms in information technology and
related areas.

LG Electronics is one of the leading companies in the field of electronics with a global
presence in many countries. Before briefing, I have divided the introduction part into three
main sub parts.

1. LG Global
2. LG India
3. LG Pune

18
 CHAPTER 6

HISTORY OF THE COMPANY

19
 HISTORY OF THE 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 lifes 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
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 Powercom
4. LG Twins
5. LG Dacom

BUSINESS AREAS AND MAIN PRODUCTS

Mobile Communication

a) CDMA Handsets
b) GSM Handsets
c) 3G Handsets

20
 d) Cellular phones

Digital Appliance

a) Air Conditioner
b) Refrigerators
c) Microwave Ovens
d) Washing Machines
e) Vacuum Cleaners
f) Home Net
g) Compressors for Air Conditioners and Refrigerators

Digital Display

1) Plasma TVs
2) LCD TVs
3) Micro Display Panel TVs
4) Monitors
5) PDP Modules
6) OLED Panels
7) USB Memory
8) Flat Panel Computer Monitors

Digital media

1) home theater system

2) Super Multi DVD Rewriters
3) CD+RW
4) Notebook PCs
5) Desktop PCs
6) PDAs
7) PDA Phones
8) MP3 Players
9) New Karaoke System
10) Car Infotainment

21
22
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 worlds 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

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

In Mar. 2007 LG Electronics and Google formed a strategic alliance.

Both companies will work together to release, market, 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 consumers life and lifestyle

With intelligent features, institutive functionality and exceptional performance.

23
THE BRAND PLATFORM

The LG brand is composed of four basic elements:-

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

The Brands core Value that never changes.

a. Trust
b. Innovation
c. People
d. Passion

The benefits are consistently delivered to the customer includes

i. Reliable products
ii. Simple design
iii. Ease of use
iv. Extraordinary experience

Personality describes the human characteristic that are expressed to the customer
through

1. Trustworthy, considerate
2. Practical, Friendly

24
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. LG proceeds in a hierarchal manner. It is named as LG WAY

25
VISION

JEONG-DO Management is LGs unique application to ethics. LG will succeed through

fair management practices and constantly developing our business skill.

a. Providing great value to customer through constant innovation & and development
b. Equal opportunities
c. Equal Treatment
d. Honest with our customer.

Management principle - creating value for customer

MISSION

The mission of LG is to provide the customers with utmost satisfaction through leadership.

The fundamental policy of development is to secure product leadership that the customers
may have the utmost satisfaction.

26
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 site-of-the manufacturing facility at Greater Noida, near Delhi, in 1998,
with an investment of Rs. 500 Crs.

LG Corporate office is located at Plot No. 51, Udyog Vihar, Kasna Road, Greater Noida,
India.

This facility manufactured Color Television, Washing Machines, Air Conditioners and
Microwave Ovens.

Company is setting up a chain of executive premium showrooms. LG plans to launch 60

premium brand shoppers by the end of the first quarter of this year. At present, LG has a total
of 83 LG stores across the country, of which 45 are shopper and 38 are exclusive stores.
Brand shoppers will be placed in the premium segment and the target audience will comprise
buyers interested in premium and high end product.

LG Brand shop 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 of LG product in his or her own home settings.

LG Electronics India Ltd. (LGEIL), Consumer durables leader with 27% market share, is
planning a brand new image. Ta attract inspirational and young consumer across India,
company will roll out a new marketing strategy. The exercise will cost the company Rs. 360
Cr.

LG Electronics India is the fastest growing company in the consumer electronics, home
appliances, and computer peripherals industry today.

LG Electronics is continually providing, superior technology product & value for more than
50 Lakh household in India. LGEIL is celebrating the 11th anniversary this year.

27
LG Soft India the innovation wing of LG Electronics in Bangalore is LG Electronics
Largest R&D centre outside Korea. We a LGSI focus on niche technology areas such as
mobile application development, digital video broadcast and biometrics software and support
LG Electronics with our expertise. Motivated by a passion for technology. A strong work
culture and loyalty to the organization, we are determined to see LG become one of the top
three brands globally.

Prominent consumer electronic company, LG Electronics Inc. has said that it expect the sale
of its products in India this year. The said money will be used to market as well as
manufacture new products.

LG Electronics, which is originally a South Korean Company with branch in India, informed
that its sales of GSM mobile phones, color television, air conditioners and other household
goods in the Indian market was to the tune of 95 billion rupees ($2.4 billion) in 2007. As per
shins estimate, the sales in 2008 would be around 110 billion rupees.

In order to achieve its target, shin said LG Electronics will concentrate on catering to the
high-end consumer market which will help boost sales this year. India churns out six (6)
percent of LG Electronics global revenues of $42 billion, The Indian branch of LG exports to
40 countries.

CHALLENGES IN INDIA

The challenges faced awareness by LG when entered in Indian market.

1. Low brand awareness about LG in India.

2. One of the MNCs entered in India (Samsung, Panasonic entered in 1995 in India).
3. High import duty.
4. Competition from local market players and other MNCs in consumer durable
segment.
5. Price sensitiveness of the Indian consumer.

28
LGEI over comes these challenges to emerge as

Innovative marketing strategy

1. Launch new technologies in consumer electronic and home appliances.
2. LG was the first brand enters in cricket in big way a way, by sponsoring the 1999 world
cup followed it up in 2003 as well.
3. LG brought in four captains of the Indian cricket team to endorse its products. LG
invested more than US$ 8 million on advertising and marketing in this sport.
4. LG has differentiated its product using technology and health benefits. CTV has
Golden eye technology Air conditioner has Health air system and microwave
ovens have the Health wave system.

Local and efficient manufacturing to reduce the cost

To overcome high import duties LG manufactures TV refrigerator in India at manufacturing

facility at Noida and Pune. 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.

Product Localization

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

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

29
MAJOR KEY SUCCESS FACTOR

1. Innovative marketing LG was the first brand to enter cricket in a big way, by
sponsoring the 1999 World Cup and followed it up in 2003 as well.
Local and efficient manufacturing to reduce cost To overcome high import duties,
LG manufactures PC monitors and refrigerators in India at its maintaining facility at
Noida, Delhi.
2. Commissioned contract manufacturing at Mohali, Kolkata, and Bhopal for CTVs
3. Product localization product localization is a key strategy used by LG. It came out
with Hindi and regional language menus on its TV.
4. Regional distribution model this has resulted in quicker rotation of stocks and better
penetration into the B, C and D class markets.
5. Leveraging Indias IT advantage LG Electronics has awarded a contract to develop
IT solution to LG Soft India (LGSI). The project involves development and support
for ERP, SCM, CRM and IT-enabled services for LG.

Strategies adopted by the organization

LG follows 10 commandments which are as follows

1. Foster working environment-5S environment

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

LG PUNE

30
LG Pune is the branch office of LGEIL. It is located in J.M Road.

In 2004 LGEIL opened second factory which is located in Ranjangaon. This plant
manufactures all product including DVD writers and GSM mobiles. Thus it became first
company to manufacture DVD writer in India. The ODP plant aims to reach a manpower
base of 1500 people and an investment of Rs. 300 Cr. 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 per cent of the Indian arms turnover.

Pune India, October 6, 2004 LGE announced 3 growth strategies aimed at the 1.1 billion
people of India making the Indian market the second largest global production base following
china. Under this strategy LGE has projected 2007 revenues in India will exceed US$10
billion, 10 times that of 2004.

The three strategies for the Indian market that the global electronic giant disclosed. Included:
penetrates the South-Western market of India through the new Pune plant near Mumbai, the
second largest global GSM handset production line after the Qingdao plant in china; and
expand the current 750 R&D staff in India to 1500, by 2007, striving to develop premium
products and export 30% of India-manufactured products to Asia, Middle East and Africa
markets by 2007.

LG Electronics second new plant in Pune, India covers a total area of 211,200 square
meters and is currently equipped with a production line to manufacture 600,000 TVs and
one million refrigerators a year. The company is set to add production lines of air
conditioners, Washing Machines, Monitors, and electronic oven, by 2005.

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.

31
In the coming year, LG is also repositioning its marketing spends, resulting in a significant
increase in its mass media expenditure for better brand visibility. LG had a marketing budget
of Rs. 320 Cr. in 2007 with a 60:40 split in favor of below-theline activities. Next year, the
company plans to increase the share of mass even as overall marketing spend would by just
about 10-15%.

32
LG Pune is the branch office of LGEIL. It is located in J.M Road.

The organization structure is-one branch manager, one chief accountant, and area sales
manager of CE, HA separate for GSM, Marketing manager for CE, HA and separate foe
GSM. The branch has warehouse at Wagholi.

33
DISTRIBUTION AND MARKETING

The company has the number of dealers and warehouses. They have LG exclusive shop. For
the marketing of the product a number of activities followed.

1. Exhibitions are conducted from time to time.

2. Society and college activities are conducted.
3. Hoarding, posters, banners are used so as to grab the attention of the customers.
4. Day to day advertisement in leading newspaper.
5. Discount at festival time.
6. For dealer relationship they arrange dealer meeting at several time in the year.
7. LG divide dealer in gold silver etc. category to know the performance of the dealers.
8. They have their sales persons at various sub dealer store and at modern trade store for
particularly for the promotion activities.
9. LG also uses the radio FM for the promotion activities.
10. Also provide capon and scratch card for festive season.

34
THE LOGISTICS (SUPPLY CHAIN MANAGEMENT)

Visit to warehouse of LG Pune at Wagoli

Logistics is the art and science of maintaining 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, transporting, inventory,
warehousing, material handling, and packaging. The operating responsibility of logistics is
the geographical repositioning of raw material, work in progress, and finished inventories
where required at the lowest cost possible.

Logistics Management is that part of the supply chain. Which chain, which plans, implements
and controls the efficient, effective forward and reverse flow and storage of goods, services
and related information between the point of origin and the point of consumption in order to
meet customers requirements.

5R of Logistic followed by LG:

1. Right Time
2. Right Place
3. Right Condition
4. Right Cost
5. Right Handling

35
LG Pune Distribution

LG Pune comes under the western Distribution Region. This region has following

1. Pune
2. Kolhapur
3. Sholapur
4. Satara
5. Sangali

The LG Factory is located at NOIDA & PUNE. There are three types of warehouse:-

1. Mother Warehouse
2. Branch Warehouse
3. Spare Warehouse

The mother warehouse is that where the products from the factory are kept and from that
warehouse, the products are sent to the branch warehouse.

A warehouse is a commercial building for storage of goods. Warehouse are used by

manufactures, Importer, Exporters, Wholesalers, Transport Business, customs etc. they are
usually large plain building in industrial areas of cities towns. They come equipped with
loading docks to load and unload trucks; or sometimes are loaded directly from railways,
airport, or seaports. They also often have cranes and forklifts for moving goods, which are
usually placed on ISO standard pallets loaded into pallet racks.

36
The Pune Warehouse is located near Wagoli. It is 136770 sq. feet in area

In warehouse 7 locations is set up for the products.

Loc 1, Loc 2, Loc 3, Loc 3, Loc 4, Loc 5 Loc 6, Loc 7

Loc 1 Selling

Loc 2 - Second Sale

Loc 3 Insurance Claim

Loc 4 Destroy The Item

Loc 5 Write Off Material

Loc 6 Court Case Material

Loc 7 For Repair

5S Of Warehouse, Which the LG strictly follow.

1. Sweeping
2. Sorting
3. Systematic Arrangement
4. Simplification
5. Self-Discipline

In warehouse, the products are pin up with 3-color paper to get the knowledge about the
delivery.

1. Red Card To stop the product going to market.

2. Green Card To allow the product for delivery in market.
3. Yellow Card After the product labeled with green, allow this to move in market.

37
Distribution Time

Local Delivery - 4 hrs.

Upcoming Delivery - 12 hrs.
Within 200 km. 24 hrs.
Beyond 200 km 48 hrs.

The above distribution time is the time of delivery of product from warehouse to the market
place, which the logistic department follows to fulfill the demand in the market at the right. In
LG, we have the following process, which is followed process, which is followed in logistic
through ERP.

Order processing
Invoicing
Indenting
Report

Order processing - Booking for dealers/distributor

Invoicing - After billing process

Indenting - Requirement

Report - Distributed to all.

In warehouse, there are two mode of dispersion of product from one place to another within.
A) Hydraulic B) Manual

In addition, there are 35 extinguishers to prevent the accidental hazard within the warehouse
due to fire. These fire extinguishers are valid up to year 2011. One has to follow the rule of
NO Smoking within the warehouse.

38
DELIMMA

1. In transit material damage checking.

2. Cost target achievement.
3. Natural events tracking.

Equipments

1. 100% bar code scanner.

2. ERP Invoice Generation Process.
3. Hydraulic Trolleys for material movement.
4. Pallets for safety of material.

WAREHOUSE WITH THE EQUIPMENT

39
WAREHOSE: REFRIGERATOR AND CTV SECTION

40
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 whats stopping the best companies from pulling out all the stops when it comes
to providing the best service? Do customer expect for too much? Or is it that in India they
dont 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 whats
really keeping after sales from being used as a cutting edge marketing tool in pushing
products across categories.

Customer support following the purchase of a product or service. In some cases, after-
sales service can be almost as important as the initial purchase. The manufacturer, retailer, or
service provider determine what is included in any warranty traditionally one year from the
date of purchase, but increasingly two or more years maintenance and replacement policy,
items included, labor costs, and speed of response. In the case of a service provider, after-
sales service might include additional training or helpdesk availability. Of equal importance
is the customer is the customers perception of the degree of willingness with which a
supplier deals with a question or complaint, speed of response, and action taken.

41
In the initial phase the company has entered into agreements with ITIs in states like
Maharashtra, Gujarat, Delhi, Punjab, Assam, and Karnataka and is in the last leg of
signing with Uttar Pradesh.

1. LG Electronics, with 1200 service centers, has already recruited 300 student and plans
to beef group the number to 10,000 by the year-end.
2. the company has offered a scholarship to the selected for the last six months of their
training Programmer.
3. The will invest Rs. 8 Cr. (Rs 80 million) in employee development Programmers this
year.
4. 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.
5. At the top, the service division in Korea reports to the Global CMO. This shows
commitment that service must be made into a marketing differentiator, and leveraged
thus.
6. LG has the widest service network across the country; some estimates put it at a
significant multiple of service-infrastructure from our nearest competitor.

42
CONSUMER SURVEY DURING EXHIBITION

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.

43
ADVERTISING

Advertising plays an instrumental role in establishing a brand and its success. But in todays
environment, advertising should be molded looking at various other parameters such as the
growth or the performance of the concerned industry, the respective companys performance
and the brand pull.

For an example, in the earlier stages of establishing itself in the market, a company should
follows the strategy of imagery advertising, but after creating a strong foothold in the
consumers household, the brand should change its strategy for its marketing communication
to product centric communication and more interactive communication on the ground level.

Taking another example of LG Microwave ovens, they have always spoken about health
wave and the initiatives taken by them for the cookery classes. But in todays changed
environment, since the price points give us an opportunity to reach out to a greater audience,
they have changed the communication to? Garam Garam Khaana? Thereby addressing the
mass media.

In our first year of operations (97-98) the communication was focused on imagery advertising
and we leveraged its association with world cup cricket to get closer to the end consumers.
During 99-00, the marketing communication was focused on creating a superior image in
technology, thereby taking about digital LG and cyber LG with the advent of internet
enabled products.

Now, we are taking the brand closer to the consumer by taking an emotional route in our
advertising and marketing communication. We took the health platform and communication
the Health Benefits their media strategy revolves around using different media vehicles
depending on the product category must target segment for that particular product. For
instance in case of CTVs. We focused on the channels providing high reach opportunities.

Similarly for Air Conditioners, they focused on movie channels and niche magazine for their
media vehicles. The objective was to retain the premium image of this product category.

For Refrigerators, they focused on the family oriented channels as a strategic move to target
the right segment.

On the whole, LG tried to spread its investments across all channels.

44
Today, the brand LG has already established itself in the market. The unaided brand recall for
our brand has been as high as 61%. Therefore, we now want to penetrate further and want to
given an opportunity to a greater number of consumers to experience our products. DD suited
LGs objective by giving us a greater reach into the consumer households that MAX couldnt
have offered us.

Given our high brand recall, we now are using DD penetrate into new sets of consumers.

LG was one of the few companies that recognized the emerging trend in consumer needs
towards health consciousness. Our advertising strategy has been to communicate what our
products actually deliver health, convenience, advanced features, and technological
superiority. LG communication, till date, was centered at the theme of protective health. It
was driven by LGs concern for the consumers health, and having technology that work
towards protecting them this platform gave LG the ability to cater to the benefits that
consumers were looking for and was focused on product and technology.

LG brand communication speaks the language of active health which is all about a vibrant
and colorful life. The active technology allows consumers to go ahead and explore the myriad
vignettes of their lives and free them from all worries and cares. It allows them to live their
dreams in full color and enjoy like to the fullest.

This is a positive step for the brand in connecting with consumers at a personal level, thereby
building bonds that further cement the LG brand in the consumers life. During the seven
years of existence in the country, LG has managed to capture a premium brand positing in the
market through its integrity, dynamism and innovation making it a symbol of trust and
quality.

LG WAS VERY ACTIVE IN ITS ADVERTISING CAMPAIGNS BUT LATELY

THERE HAS BEEN AN IN LULL PROMOTIONS.

LG is not so available in advertisements but they are very much visible in other areas. They
believe that marketing is beyond advertising and is beyond a 30-second. There are some

45
companies which have a visibility issue, awareness issue, top-of-mind recall issue but when
you reach a certain position, then your first priority is not visibility or awareness any more.
They dont need to run an advertising campaign saying that this is LG. people know LG the
brand. We have already spent a lot highest level. So it is a conscious decision to move away
from the 30-second space. They believe that there should be a 360-degree paradigm.

LG ELECTRONICS LAUCH MARKETING CAMPAIGNS FEATURING ABHISHEK

BACHCHAN

Bollywood icon Abhishek Bachchan to be the face of home appliance at LG

Abhishek Bachchan is more than just an icon; while his image is sophisticated and upscale
he also projects the aura of an out of box thinker and a caring human being. All these images
are perfectly matched with LG in the sense that cares about customers and continues to
develop new generation technology. He further added? Another important reason for our
choice was the fact that Abhisheks appeal transcends across all sections and demographics
of the society, a vital element for a consumer durable company.

LG has signed the contract with Abhishek for a period of two years, during which the star
will endorse the entire range of home appliance of the company. LG plans to utilize this
utilize this association for various communication channels such as print and television ads,
outdoor publicity, road shows and strategic events amongst others?

Commenting on his association with LG Electronics as their new brand ambassador, Mr.
Abhishek bachchan said, LG Electronics as a brand is synonymous with quality and
commitment consumers the world over.

46
 CHAPTER 7

RESEARCH METHODOLOGY

47
 RESEARCH METHOLOGY

Research Methodology is considered as the nerve of the project. Without a proper well
organized research plan, it is impossible to complete the project and reach to any conclusion.
The project was based on the survey plan. The main objective of survey was to collect
appropriate data, which work as a base for drawing conclusion and getting result.

Therefore, research methodology is the way to systematically solve the research problem.
Research methodology not only talks of the methods but also logic behind the methods used
in the preference of the other methods.

Research Methodology is considered as the nerve of the project. Without a proper well
organized research plan, it is impossible to complete the project and reach to any conclusion.
The project was based on the survey plan. The main objective of survey was to collect
appropriate data, which work as a base for drawing conclusion and getting result.

Therefore, research methodology is the way to systematically solve the research problem.
Research methodology not only talks of the methods but also logic behind the methods used
in the preference of the other methods.

Research Design

Research design is the important primary 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 study
buyers behavior, consumption pattern, brand loyalty, and focus market changes. A research
design specifies the method 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.

48
TYPES OF RESEARCH

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 knowledge the proportion of people in a
given population who have in particular manner, making projection 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 cannot be changed every
now and then. It is therefore necessary, the researcher give sufficient thought to framing
research.

49
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.

PICTURE SHOWING THE PRODUCT OF LG IN ONE OF THE SHOP

50
DATA COLLECTION METHODS

After the research problems, 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 Companys profile, journals and various literature studies are
important sources of secondary data.

Data analysis and interpretation

1. Questionnaires
2. Pie chart and bar chart

51
QUESTIONNAIRES

This is the most popular tool for the data collection. A questionnaire 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 key represent.

Preparation of report:

The report was based on the analysis and represented with the findings and suggestions. The
sample of the questionnaires is achieved with the report itself.

52
SAMPLING METHODOLOGY

Details of the sampling methodology, I have made questionnaire. The one is made for the
customer.

No. of question in questionnaires for customer: 07

No. of question related to LG project 03

No. of people met during the research 200

No. of respondents during the research 50

Sample unit

Professional, business man,

Employees, house wife,

Working women, students.

53
 CHAPTER 8

DATA ANALYSIS

54
 DATA ANALYSIS

Q.1 Have you purchased any consumer durable during Exhibition.

Yes
No

35%

Yes
65%
No

1. 65% of Customer Have not purchased any consumer durables from Exhibitions
2. Only 35% people have purchased
3. Consumer also wants to compare to the different brand which are available in the
exhibition.
4. Exhibitions are more useful increase brand awareness
5. People are less interested to purchase product from exhibitions.

55
Q.2 While purchasing consumer durable which parameter influences you?

Brand
Product feature
Brand
Service
Durability

9% Price
16% 30%
Product feature
Brand
26% 19% Service
Durablity

1. 30% of consumers give importance to price. so it shows that Indian consumers are
very price sensitive. They give more importance to price over the brand.
2. 26% give importance to brand. So price and brand matter a lots for the consumers.

56
Q.3 From where you prefer buying consumer durables.

Exhibitions
Co. shoppee
showroom

17%
47%
Exhibitions
Co. shoppee
36%
Showroom

1. A majority of consumer prefer to buy from showrooms. Very less proposition of

customer.
2. 47% customers prefer showrooms, because showrooms are more convenient.
3. People are less interested to buy from the exhibition they only visit the exhibition for
price quotation of the product and the comparison.

57
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

14% 14% Offers

22% 23% Attractive price

Service

27% convenience 22
Demonstration 14

1. Customers buy from showroom because of the service and convenience. This are two
main factors.
2. Customer are preferred to buy from the showroom because of they think that these
convenient store may provide good after sell service.
3. Price also a factor that attract the customer in these showrooms.

58
Q.5. Which consumer durable you have and of which brand?

CTV
LCD
PLASMA
REF
WM
MW
AC

18

16

14

12 CTV

10 LCD

8 PLASMA
REF
6
MW
4
WM
2
AC
0

1. In CTV section maximum have Onida, in LCD Sony is the leader, In plasma BPL is
the leader, MW LG is the leader, In WM there are companies and in AC also.

59
Q.6. How frequently you change your consumer durables?

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

4%
23% 19% 1-3 years
3-5 years
5-10 years
54%
more than 10 years

1. Customer prefers to change consumer durable within 5-10 years. In India people do
not change consumer durable frequently.
2. 23% customers do not change their consumer durable within 10 year.

60
Q.7. Do you prefer any financing scheme to purchase consumer durables?

Yes
No

43%
Yes
57%
No

1. Majority of consumer do not prefer any financial scheme.

61
CHAPTER 9

FINDINGS

62
 DEALER SURVEY FINDINGS

1. By calculating the display share we found that in most of store LG has 50% display
share almost all categories.
2. By the actual monthly sale of particular store we came to know the capacity of the
store and how much product can they sale.
3. It helps us to know that weather dealer is capable of being a direct dealer of LG or not
and it also helps to find out the new dealer who are capable of being the dealer of LG.
4. We also came to know while visiting the shops that there was big problem of after
sale service.
5. Many dealers were facing the problem of after sale service because there is no follow
up calls from LG.
6. Demo calls also not done properly.
7. The top competitor of LG product in pune is SAMSUNG.
8. In pune area the performance of LG is in better position but the competitor also hold
closer margin.
9. There is high growth of sale in market due to booming in new technology and better
service.
10. Word of mouth plays a vital role in awareness among customer. This is one factor.
Which can play a good role in promotion of products as well as demonstration given
by the shopkeeper also plays a vital role for customer.

63
 FINDINGS

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

64
CHAPTER 10

CONCLUSIONS

65
 CONCLUSIONS

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

66
CHAPTER 11

LIMITIONS

67
 LIMITATION

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; full-fledged report was insufficient for me.
4. The consumer 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 was required for the study.
6. The sample size is also very small which represent my research on consumer
behavior.

68
 CHAPTER 12

BIBLOGRAPHY

69
 BIBLOGRAPHY

Sites

Www. LGindia.com
Www. Google.com
Www. Wikipedia.com
Www.LG.co.in

Books

Business today
LG magazine
Economic times News paper
Times of India.
Marketing Management Philip Kotler
Electronics For You - Magazine

70
 CHAPTER 13

QUESTIONNAIRE

71
Consumer Survey Questionnaire

Q.1 Have you purchased any consumer durable during exhibitions?

a) Yes
b) No

Q.2. While purchasing consumer durable which parameter influences you?

a) Price
b) Product feature
c) Brand
d) Service
e) Durability

Q.3. From where you prefer buying consumer durables?

a) Exhibitions
b) Co.shoppee
c) Showroom

Q.4 You prefer to buy from the same as you have mentioned in Q.3 because of following
reasons

a) Attractive Price
b) Service
c) Demonstrations
d) Offers
e) convenience

72
Q.5 which consumer durable you have and of which brand?

a) CTV
b) LCD
c) PLASMA
d) REF
e) WM
f) MW
g) AC

Q.6 How frequently you change your consumer durables?

a) 1-3 years
b) 3-5 years
c) 5-10 years
d) More than 10 years

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

a) Yes
b) No

73