Project Report On

CONSUMER SATISFACTION SURVEY OF LG PRODUCTS"

For the Partial Fulfillment of BBA

Submitted to M.J.P Rohilkhand University Bareilly. Submitted by

Reenu Roll No. 0 BBA VI Semester

Submitted to

Ms.Nishtha Sharma

DEPARTMENT OF MANAGEMENT STUDIES INSTITUTE OF FOREIGN TRADE AND MANAGEMENT LODHIPUR RAJPUT, DELHI ROAD, MORADABAD (U.P.)

CONSUMER SATISFACTION SURVEY OF LG PRODUCTS"

by

REENU
BBA VI SEMESTER SUBMITTED TO DEPARTMENT OF MANAGEMENT STUDIES IN THE PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE DEGREE OF BACHELOR OF BUSINESS ADMINISTRATION AT THE INSITUTE OF FOREIGN TRADE AND MANAGEMENT APRIL 2010 The author hereby grants IFTM reproduce and to distribute publicly, paper and electronic copies of the project report in whole or in part.

Signature of student Department of Management studies April 2012

Certified by

Ms.Nishtha Sharma
Project Supervisor

Accepted by

TABLE OF CONTENTS
EXECUTIVE SUMMARY

5 6 15 53 60 76 79 81 82 84 85 89

INTRODUCTION OBJECTIVE OF RESEARCH RESEARCH METHODOLOGY TABULATION& ANALYSIS OF DATA FINDINGS SWOT ANALYSIS LIMITATIONS CONCLUSION SUGGESTIONS AND RECOMMENDATIONS APENDICES

BIBLIOGRAPHY

Executive Summary
In todays scenario, Marketing of a product is acknowledged as one of the most potent sources in contributing directly and significantly in the growth of any organization. This project attempts to explore the most effective Marketing Strategy for smooth sailing of an organization. The objective of the study is To determine the market share of branded computers. The main theme was to check the current & future demand of PCs in the market. The objective of the topic Market study of Branded PCs consists every major & minor aspect of the term Marketing. The topic consists valuable findings & suggestions made on the basis of sequential marketing research process for the marketing mix as Product, Price, Place, Promotion and intermediarys channels, services provided by the LG Electronics India Pvt. Ltd.

INTRODUCTION
ABOUT PC INDUSTRY
The PC industry is one of the strongest in the world. There is probably no other type of product that is so technologically sophisticated, sells for so much money, and yet is sold by so many companies for so little profit. The severe competition in the industry is the reason why those who deal with PC vendors encounter so many problems. In this report we have tried to bring forth the major areas in which a new PC vendor can enter and penetrate in the market. The segments that are important to the PC vendors, their buying behavior, purchasing power, etc. are segregated in this report. With the presence of so many PC vendors in the organized and unorganized sector that consists of assembled PC market it is not very easy to launch a new company in the same field. Over the last decade or so, the PC industry in India has undergone a sea change. The entry of MNC brands in the 1990s changed the rules of the game, as the industry at that time was predominantly the domain of assemblers and some local manufacturers. Given these dynamics, the going, at least initially, was not easy for the Compaqs, HPs and the IBMs, as they had to struggle to build brands as well as to give their offerings as much of a local flavor as would make them attractive to the Indian buying segments. Moreover the MNCs also had to combat the goodwill, the trust and the loyalty that the friendly neighborhood assembler had built over the years with clients cutting across the big through

small-enterprise markets. But as the years rolled on, the branded- PC industry secured what today constitutes a major slice of the Indian PC market pie. Today it is fashionable to talk about the new economy. Now a days businesses around the globe are operating in globalize economy because most of the economies of the world have become broader. The old economies were simple then todays. It was based on industrial revolution and managing manufacturing industries. But the new economy, in contrast, is based on the Digital Revolution and the management of information. Things are moving at a nano second pace, markets for every product category is highly competitive and consumers are more empowered and having awareness regarding products offered in the market by manufacturers. With the growing need for computerization, branded PC demand in public sector organizations and in the government is on the rise. Demand from the private sector, especially in the educational institutes and home segment, is already rising. The small office home office (SOHO) and small-and-medium enterprise (SME) segments are also driving hardware demand. The growing popularity of the Internet has also raised the demand for branded PCs. In such circumstances it is very difficult to survive for the small players. But MNCs like LG, HCL, HP, IBM Computers, etc. are doing good job and earning heavy profit consider the economy of our country. It is also emerging into a powerful economy and after a decade or so; India will be an economic power of this region. The main aim of my study is that find out the market share of branded PCs & future aspect of LG MyPc in Indian market. For this purpose I critically examined

the sales of different brands of PCs like HP, LG, IBM Compaq, HCL, PCs, Zenith, Wipro.

INTRODUCTION OF MARKETING
In the decades of 50s marketing was a far simpler subject. Consumer marketing largely operated on mass of marketing principle & business-marketing principle concerned itself will how to build the sales force. In those days, marketers faced a number of tough decisions. They have to determine products features & quality, establishes accompanying services set the price, determine the distribution channel. Many managers think of marketing as a company department whose job is to analyze the market, discern opportunities, formulate marketing strategies, develop specific strategies & tactics, propose a Budget & establish a set of control. But there is more to marketing: marketing must also push the rest of the company to be customer oriented & market driven. Marketing is more then a company department; it is an orderly & insightful process for thinking about and planning for market. The process is applicable to more then just goods & services. Anything can be marketed ideas, events, organizations, places, personalities. The process is being with researching the relevant marketplace to understand its dynamics and to identify opportunities to meet existing or latent needs. It involves segmenting. The marketing & those segments that the company can satisfy in a superior way. It involves carrying out a plan, evaluating the results & making further improvements.

A social definition shows the role marketing plays in society. One marketer said that marketings role is to deliver a higher standard of living. A social definition that serves our purpose follows: Marketing is a societal process by which individual & groups obtain what they need and want through creating, and freely exchanging products & services of value with others. For a managerial definition, marketing has often been described as the art of selling products. But people are surprised when they hear that the most important part of marketing is not selling! Selling is only a tip of the marketing iceberg. Peter Drucker, a leading management theorist, puts it this way: There will always, one can assume, be need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know & and understand the customer so well that the product & service fits him & sell itself. Ideally, marketing should result a customer who is ready to buy. All that should be needed than is to make the product available. Coping with exchange processes calls for a considerable amount of work and skill. Marketing management takes place when at least one party to a potential exchange thinks about the means of achieving desired responses from other parties. Marketing management as the art & science of choosing target market & getting, keeping & growing customers through creating, delivering and communicating superior customer value. Evolution through the changes: Marketing activities should be carried out under well through out philosophy of efficient, effective, & socially responsible marketing. However, there are five competing concepts under which organizations conduct marketing activities: the
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production concept, product concept, selling concept, marketing concept & societal marketing concept. THE PRODUCTION CONCEPT: The production concept holds that customers will prefer products that are widely available inexpensive. Managers of production based business concentrate on achieving high production efficiency, low cost, & mass distribution. They assume that consumers are primarily interested in product availability and low prices. It is used when a company wants to expand the market. This orientation makes sense in developing countries, where consumers are more interested in obtaining the product than in its feature. THE PRODUCT CONCEPT :The product concept holds that consumers will prefer those product that offers the most quality, performance, or innovative features. Managers in these organizations focus on making superior products & improving them over time. They assume that buyers admire well-made products and can appraise quality and performance. However, these managers are sometimes caught up in a love affair with their product and do not realize what the market needs. THE SELLING CONCEPT:The selling concept holds that consumers and businesses, if left alone, will ordinarily not buy enough of the organizations products. The organization must therefore, undertake an aggressive selling and promotion effort. This concept assumes that consumers typically show buying inertia or resistance & must be coaxed into buying. It also assumes that the company as a whole

10

battery of effective selling & promotion tools to stimulate more buying. The selling concept is also practiced in the nonprofit area by fundraisers, college admission offices, & political parties. Most firms practice the selling concept when they have over capacity. Their aim is to sell what they make rather than make what the market wants.

THE MARKETING CONCEPT: The marketing concept is a business philosophy that challenges the threebusiness orientation. The marketing concept holds that the key to achieving its organizational goals consists of the company being more effective than competitors in creating, delivering & communicating customer value to its chosen target market. The marketing concept has been expressed in many colorful ways: Meeting needs carefully Putting people first(British Airways) Partners for profits (Milliken & company) The marketing concept rests on four pillars: target market, customer needs, integrated marketing, and profitability. THE SOCIETAL MARKETING CONCEPT: The societal marketing concept holds that the organizations task is to determine the needs, wants & interests of the target market & to deliver the desired satisfaction more effectively & efficiently than competitors in a way that preserves & enhances the consumers & the society well being. The societal marketing concept calls upon the marketers to build social & ethical consideration into their marketing practices. They must balance & juggle the often-conflicting criteria of company profit, consumer want satisfaction, and public interest.

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Yet a number of companies have achieved notable sales & profit gains by adopting & practicing the societal marketing concept. We can say with some confidence that the marketplace isnt what it used to be. It is changing radically as a result of major societal force such as technological advancement, globalization, and deregulation. Customers increasingly expect higher quality & service & some customization. They perceive fewer real product differences and show less brand loyalty. They are showing greater price sensitivity in their search for value. Brand manufactures are facing intense competition from domestic & foreign brand, which is resulting in rising promotion cost & shrinking the profit margin. Store-based retailers are suffering from an over saturation of retailing. They are facing growing competition from catalog houses; direct-mail firms, newspapers, magazine & TV direct customer to ads & the Internet. They are marketing an experience rather than a product assortment.

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EVOLVING VIEWS OF MARKETINGS ROLE IN THE COMPANY

Production

Finance

Marketing

Human resource

a) Marketing as a equal function

13

b) Marketing as a more important function.

c) Marketing as a major function

(d) The customer as the controlling function

(e) The customer as the controlling function.

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OBJECTIVES OF THE RESEARCH

The objective of the study is To determine the market share of branded computers. The main theme was to check the current & future demand of PCs in the market. The objective of the topic Market study of Branded PCs consists every major & minor aspect of the term Marketing. The topic consists valuable findings & suggestions made on the basis of sequential marketing research process for the marketing mix as Product, Price, Place, Promotion and intermediarys channels, services provided by the LG Electronics India Pvt. Ltd. I have got major opportunity to explore all the aspect of Marketing under the topic Market study of Branded PCs in particular of LG Electronics India Pvt. Ltd. These aspects are really treasure for the researcher as well as for the reader of the research to attain maximum knowledge about the term Marketing. The main theme of research was to check the demand of PCs and sales of PCs of other companies in the market. All the market research has to design on the basis of above discussion.

Following are the main objectives of my research

Know the market share of branded PCs like IBM, HCL, Compaq, PCs, HP Zenith, LG My PC. To know the future aspect of LG My PC in NCR region. The main theme was to check the current & future demand of PCs. To know the retailers view about the market & customers.

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COMPANY PROFILE
LG Electronics Inc.
LG Electronics, Inc. was established in 1958 as the pioneer in the Korean consumer electronics market. The company is is a global force in electronics, information and communications products with 2004 annual sales of US $38 billion (consolidated). With more than 66,000 employees working in 76 subsidiaries in 39 countries around the world, LG Electronics is comprised of four main business companies including Mobile Communications, Digital Appliance, Digital Display, and Digital Media.
Corporate Name LG Electro nics Inc. Established October 1, 1958 (As a private Co mpany) Corporate Office LG Twin Towers 20,Yoido- dong, Youngdungpo- gu Seoul, Korea 150- 721 Tel: 82- 2- 3777- 1114 URL: http://www.LGE.com Vice Chairman & CEO S.S.Kim Business Area and Main Product Mobile Communications Company Wired -wireless handsets and network services , CDMA, GSM, 3G( WCDMA / cdma2000) Digital Appliance Company Air Conditioner , Refrigerator , Microwav e Oven, Washing Machi ne, Vacuum Cleaner , Co mpr essor for Air Conditioner, Co mpr essor for Refrigerator Digital Display Company Digital TV, PDP, Monitor Digital Media Company CD- ROM Drives, DVD- ROM Drives, CD Rewritable Recorder , VCR, DVD Player , Audio, Security System, Recording Media, Video Pho ne, PC Camera, Banking Automati c System , PCB Number of Employees 66,61 4(31 ,614 in Korea/ 35,000 overseas)

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In 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). The trend of beating industry norms started with the fastest ever-nationwide launch by LG in a period of 4 months with the commencement of operations in May 1997. LG set up a state-of-the art manufacturing facility at Greater Noida, near Delhi, in 1998, with an investment of Rs 500 Crores. The LG manufactures Color Televisions (CTVs), Washing Machines, Air-Conditioners (ACs), Microwave Ovens, Refrigerators PCs and Monitors. In the short span of eight years, LG has achieved the position of a premium brand in the Indian market and is today the most preferred brand in the consumer durable and home appliance segments. In 2004, the company's turnover touched Rs65bn, the highest among any company in this segment in the country. The company has set a target of achieving a turnover of Rs90bn in 2005. LG wants its Indian unit to generate US$10bn in annual revenue by 2010. Around 30% of these revenue will come from exports. During the year 2001, LG also commenced the home production for its Eco-friendly Refrigerators and established its assembly line for its PC Monitors at its Greater Noida manufacturing unit. The beginning of 2003 will see roll out of the first locally manufactured Direct Cool Refrigerator from the plant at Greater Noida. The Greater Noida manufacturing unit line has been designed with the latest technologies at par with international standards at Korea and is one of the most Eco-friendly units amongst all LG manufacturing plants in the world.

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Financial Performance: Turnover for RS. 125 Crores 1997 Turnover for RS. 485 Crores 1998 Turnover for Rs. 1056 Crores 1999 Turnover for Rs. 1903 Crores 2000 Turnover for Rs. 2216 Crores 2001 Turnover for Rs.3000 Crores 2002 Turnover for Rs.4500 Crores 2003 Turnover for Rs.6500 Crores 2004
Turover of the LGEIL
7000 Turover in Crores 6000 5000 4000 3000 2000 1000 0 1996 125 1997 485 1998 1056 1999 2000 2001 2002 2003 2004 2005 1903 2216 3000 4500 6500

Year

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

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Various studies have shown that the consumer is well informed on the health awareness front. LG was one of the first companies who recognized the emerging change in consumer needs and decided to differentiate their products on the basis of technology, which appealed to the consumer on the basis of health benefits. Its vision was to become a 'Health Partner' for its consumers worldwide and therefore formulated its corporate philosophy to make peoples' lives better, convenient and healthier. The CTV range offered by LG has 'Golden Eye' technology, which senses the light levels in the room and adjusts the picture to make it more comfortable for the eyes. The entire range of LG air-conditioners have 'Health Air System', which not just cools, but keeps pollution out. Similarly, microwave ovens have the 'Health Wave System', refrigerators have the 'PN System', which preserve the nutrition in food and washing machines have 'Fabricare System', which takes the health factor down to ones clothes. All the products offered by the company have unique technologies, developed by its R&D departments that give customers a healthier environment to live-in. The year 2001 witnessed LG becoming the fastest growing company in the consumer electronics, home appliances and computer peripherals industry. The company had till the month of October 2001 achieved a cumulative turnover of Rs 5000 Crores in India since its inception in 1997, making it the fastest ever Rs 5000 Crores clocked by any company in the Indian consumer electronics and home appliances industry. Having achieved this milestone, LG achieved another benchmark with the first ever sales of One Lakh ACs (Windows and Splits) in a calendar year. LG is poised to surpass its turnover target of Rs. 2700 Crores this year and clock a turnover of Rs. 3000 Crores. This year, LG has emerged as the leader in Colour Televisions, Semi Automatic Washing Machines, Air Conditioners, Frost-Free Refrigerators and Microwaves Ovens. In Colour Televisions having set the sales target of one million units of

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Color Televisions for 2002, LG has already achieved the one million mark in the month ahead of its target. 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 products & value for money to over 50 lakh households in India. LG is a No. 1 in the Air Conditioners in India and among the top priority in the sale of all other consumer electronics. In addition, LGs Golden Eye television offers the worlds most advanced picture system.

There are 18 branches offices covering whole of India in the following cities Ahmadabad, Bangalore, Bhuwaneshwar, Kolkata, Chandigarh, Chennai, Cochin, Patna, Guwahati, Hyderabad, Indore, Jaipur, Lucknow, Mumbai, New Delhi, Haryana, Meerut & Pune. While corporate office is situated at Greater Noida, U.P & Regd. Office at Okhala Industrial Estate, New Delhi. New Manufacturing Plant: Encouraged by this stupendous growth, LG Electronics India started building another manufacturing facility at Ranjangaon, some 50 km away from Pune in Maharashtra at an initial investment of Rs1.5bn (US$32mn). Spread over an area of 50 acres, the sprawling new facility is designed to manufacture CTVs, Refrigerators, ACs, Washing Machines, Microwave Ovens and Color Monitors. The plant commenced commercial production in June 2004, three months ahead of schedule. At present, it manufactures CTVs and Refrigerators besides assembling of a couple of GSM mobile handsets. The Ranjangaon facility is in line with LG's vision of making India the global export hub. The new plant, in addition to the Noida factory, will enable LG to expand its consumer reach and

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ensure better supply chain management that would translate into a faster response time. The company aims to pump in Rs5bn in the plant over the next five years. At present, it has a manpower strength of 2,000 people, and can go up to 5,000 by the year 2010. The new plant will contribute 10% of LG's total projected revenue of Rs90bn in 2005. It aims to double this every year and plans to increase it to 30% by the end of 2007. Production Capacity: CTVs - 5 lakh units per annum ACs - 1 lakh units per annum Refrigerators - 5 lakh units per annum Washing Machines - 2 lakh units per annum Microwave Ovens - 0.5 lakh units per annum Mobile phone handsets - 10 lakh units per annum Monitors - 1 lakh units R&D Thrust: LG aims to spend 2-3% of its total revenue on Research & Development (R&D) and hopes to establish India as an R&D hub for consumer electronics, home appliances and GSM handsets. At the end of 2004 LG had around 70 people in R&D at Pune, including Hardware and Software. This will be scaled up to 350 by the end of 2007, and 550 by 2010. At Noida, its R&D strength was 190 at the end of last year. This will be increased to 210 by the end of 2007, and further to 300 by the end of 2010.

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At its Bangalore centre, the R&D strength was 420 by the end of 2004. This will go up to 900 by the end of 2007, and 1500 by the end of 2010. By the end of 2010, LG will have 1,690 people doing R&D in Software and another 660 in Hardware, taking its total manpower strength in R&D to 2,350. At the end of 2004, LG had spent US$23mn and US$20mn on its Software and Hardware centres in the country respectively. By the end of 2007, it will increase to US$67mn and US$43mn. By 2010, it will go up further to US$124mn and US$88mn. Market Share: CTVs - LG has sold the highest ever number of CTVs in a month, and has set a landmark for the industry by selling over one million CTVs in a single calendar year. According to the recent retail audit conducted by ORG-GFK (Jan 2005), LG has consolidated its leadership position in CTVs with a market share of 26.7%. Washing Machines - In the overall category, LG has emerged and established itself as the No.1 brand with a market share of 35.2%. In the Semi Automatic segment, it has attained a market share of 36.5% while in the Fully Automatic segment it makes up 34.5% of the total market. Refrigerators - LG leads the market in refrigerators with a market share of 28.1%. Further in Frost Free LG has emerged as the undisputed leader with a market share of 35.4%. ACs - The company currently enjoys a market share of 45% in the Room AC (Window and Split) segment. Microwave Ovens - LG is the leader in this category with a market share of 41.4%.

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IT Products - LG has already become No.1 in the Optical Storage Devices (OSD) segment and is fast emerging as the market leader in the monitor segment also. It has around 34% share in Monitors and 44% in OSD apart from 15% in Personal Computers (PCs).

Financial Results: Division 2002

(Rs cr)

2003 %
contribution
(Rs cr)

2004
% % % % (Rs cr) contribution growth contribution growth

Consumer 1495 45 2049 46 37 Electronics Home 1507 45 1996 44 32 Appliances IT 313 10 448 10 43 GSM * 7 Total 3315 4500 36 * LG entered the mobile phone market in October 2003

2810 43 2760 42 715 11 215 3 6500

37 38 60 2971 56

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Vision 2010
LG Electronics India aims to become Rs450bn Company in India. Out of this, Consumer Electronics will account for Rs112.5bn; Home Appliances Rs12.5bn; IT Rs67.5bn and Mobile Phones Rs157.5bn. Exports will constitute 30% of total revenue at Rs140bn.

PHILOSOPHY

Complete in the International Market with a Global Mindset. Maximize value for Customers, Employees and Shareholders. Pursue the best in the class through Management by Principal. Contribute to the society through good corporate citizenship.

INITIATIVES
Redesign business portfolio. Develop new strategic business. Globalization. Acquire promising differentiated technology. Cultivate high performing leader.

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Life-Cycle Assessment (LCA) of LG Electronics

25

Web-based Eco-Design System Of LG

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MARKETING MIX
Marketing mix is the set of marketing tools that the firm uses to pursue its marketing objectives in the target market.

McCarthy classified these tools into four broad groups called 4Ps of marketing: Product, Price, Place, & Promotion. These marketing variables are shown in the following figure:

Marketing Mix

Product Price Place

Promotion

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The First PPRODUCT

Product is a key element in the market offering. Marketing mix planning being with formulating to meet target customers need & wants. The customer will judge the offering by three basic elements- features & quality, services mix & quality & price appropriateness. Kotler says that A product is anything that can be offered to a market to satisfy the wants or needs of the consumers.(*) Products that are marketed include physical goods, services, events, experience, persons, place, properties, organizations, informations & ideas. A firm is not selling a product. It sells only the product benefit. Product is most important variable in the marketing mix of the firm. If the product is sound & easily acceptable to the market if it satisfies resellers need & consumer preference & is carefully fitted to the needs & desires of the customers, sales success is assured. Hence product is the center of all-marketing policies & decisions. The marketing planning begins with the product & also ends with the product. (**) (*) Philip Kotler, Marketing Management, Millennium Edition, PHI, N.D. (**) S.A. Shrelekar et al. Principle of Marketing, II ed. Himalaya Publication N.D. As for as the LG Electronics India Pvt. Ltd. Is concerned near about 11 products. All of these are available in the market. Company plans to increase their product range in the future. A brief description of some products is as follows: -

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Products Name:
1.Air conditioners

2.Audio/Video/Home Theatre

3.Mobile

G1600

C2100

T5100

4.IT Products

29

Note book

5.Television

6.Refrigerators

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7. Washing Machines

THE SECOND P- PRICE

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Sales are only income fore any business concern. But price is the main factor, which affects the sale of the market. If the price is high, few buyers purchase and if the price is low many buyers purchase. Therefore a sound pricing policy must be adopted to have maximum sale revenue. Moreover, it is only through proper pricing policy the already laid down marketing objective and corporate goals could be achieved. Price is the exchange value of a product or service always expressed in tem of money. In other words, price of a product or service is what the seller feels its worth on term of money, when offered to a buyer. To the customer, the price is an agreement between seller & buyer concerning what each is to receive. The buyer is interested in the price of the whole package consisting of physical product plus a bundle of expectation and satisfaction. The consumer has numerous expectations such as after sale service, replacement of parts, technical guidance & money other benefits. However, to the seller, price is a source of revenue and a main determinant of profit. To the seller, price is equivalent to the total product offering. This offering includes a brand name, a package, product benefits, after sale service and so on. We can define price as the money of the product or service agreed upon in a market transaction. So, Price in money = physical product + bundle of expectations

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The Price Factor of PCs India is a price-sensitive market. When the PC was launched in 1984, it cost well over $4,450 here, and in the late 1980s, the price was around $2,220. While the price was around $1,100 in the mid-90s, today, a MNC brand with multimedia costs only around $761. The Indian market has seen local assemblers stealing a march over their domestic and multinational computer hardware rivals. More than 50 percent of total PC shipments are now from unbranded manufacturers, the magazine said. Four years ago, they accounted for less than 40 percent of the market. The Indian PC industry has also witnessed the rise and fall of many a domestic brand. Prominent players who fell out include DCM-DP, Usha, PCL, Sterling and Unicorp, though many Indian brands including HCL today account for nearly half of the branded PC sales in the country. Pricing adopted by the LG Electronics India Pvt. Ltd. The pricing adopted by LG Electronics India Pvt. Ltd. Can describe under this subhead: -

Competitive pricing: - LG Electronics India Pvt. Ltd. adopted the method

of pricing called competitive pricing for their PCs. Under this policy, the price of LG PCs is fixed according to the price of other competitor brand of the market & the price moves accordingly.

The price list of the IT Products of LG Electronics India Pvt. Ltd. Is as follows: -

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GSC 50-5

Intel Celron M1.3Ghz, 256RAM, 40GB Hard disk, 15TFT Display Intel Pentium M 1.6GHz, Mobile Tech. 256MB RAM 40GB Hard Disk15TFT Display Intel Pentium M Processor 1.6GHz Mobile tech. 256RAM, 40 GB Hard disk15TFT Display

MRP : RS 37,920

LSC 50-E

MRP :RS 52,480

LSC 50-E

MRP : RS 60,280

XS3-E049NPG MRP Rs.39990

Intel 865GV-Chipset ,256 MB-DDR Intel 845GV-Chipset ,128 MB-DDR Intel Celeron 2.0,128 MB-DDR Intel Celeron Processor 2.0 GHz , 128 MB RAM
Intel Celeron D

XS1-D419HPG

MRP Rs.29990

XS1-WH19LP1

MRP Rs.19990

XS1-WH1SLP2BCI0115

MRP Rs.18630

XS1-VI1SLP1BCI0117

MRP Rs.22790

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Processor 2.50 Ghz, 128 MB RAM, Free Gifts:UPS,Edurite CD Pack XT1-2219LP1BCI0115

Intel Pentium 4 Processor 2.26 GHz, 128 MB RAM Intel Pentium 4 Processor 2.40GHz, 128 MB RAM. Free Gifts:Tata Walky Phone,UPS Intel Pentium 4 Processor 2.80 GHz , 128MB RAM , 40GB HDD,Free Gifts:Laser Printer

MRP Rs.23050

XR1-D41SLP1BCI2115

MRP Rs.26950

XR1-D819LP1BCI0115

MRP Rs.31110

PA_110

Single Intel Pentium 4 Processor @ 3.0 GHz with 800MHz FSB with Hyper Threading Technology,1 X 36 GB U320 SCSI 10K rpm NHS Single Intel Pentium 4 Processor @ 3.0 GHz with 800MHz FSB with Hyper Threading Technology ,1 X 80 GB SATA 150

MRP Rs 67793

PA_105

MRP Rs.56293

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MB/s, 7200 rpm

GCR-8523B GCE-8525B GCC-4521B GSA-4163B

CD-ROM Drive CD-R/RW Drive Combo Drive DVD Rewriter

MRP Rs.650 MRP Rs.1250 MRP Rs.2250 MRP Rs.4050

E700S

17 inch FLATRON Monitor 19" Studio works Monitor

MRP Rs.8500

900B

MRP Rs.12500

700E 500G

Normal Monitor 15" Studio works Monitor 17 inch LCD

MRP Rs.4500 MRP Rs.4750

L1720B

MRP Rs.26000

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THE THIRD P PROMOTION

Promotion is the process of making communication involving information, persuasion and influence. Promotion has three specific purposes. It communicates marketing information to the customers, users & retailers. Promotion persuades and convinces the buyer & enters into this consumer behavior. Promotional efforts act as powerful tools of competition providing of cutting edge of its entire marketing programmed. Promotion has been defined as the coordinated self initiated effort to establish channel of information & persuasion to facilitate or faster the sale of goods or services, or the acceptance of ideas of points of view. It is a non-price competition. Broadly speaking, promotion means to push forward or to advance ideas in such a way as to gain its acceptance & approval. It is an effort by the marketer to inform and persuade buyer to accept, resell, recommend, or use the article, services or ideas, which is being promoted. The promotional activity always attempts to affect knowledge, attitude, preferences & behavior of recipient, i.e. buyers. The element of persuasion to accept ideas, products, services etc., is the heart of promotion. You may have the best product, package & so on. It may have a fair price. But people will not buy your products, if they have never heard of it, and they are simply unaware of its existence. The market must communicate to his prospective buyer & provide them adequate information in a persuasive language. People must know that the right product is available at the right place & at the right price. This is the job of promotion in marketing. In essence, promotion is the spark plug in our marketing mix. It is said that:-

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Nothing until somebody promotes something Promotion can create & stimulate demand, capture demand from rivals and maintain the demand of your products even against keen competition. It is true that nothing can be sold & nothing can make money (except mint) without means of promotion. The communication & promotion mix includes four ingredients viz.

1. Sales promotion. 2. Advertising. 3. Publicity. 4. Personal selling. 5. Trade Fairs & Exhibitions 6. Demonstration 1. Sales promotion
Sales promotion is an important instrument in marketing to lubricate the marketing efforts. Today, sales promotion is a necessity & not a luxury. It is not expenditure, it is an investment, which can pay a rich dividends. It is an integral part of marketing effort. In a specific sense, sales promotion includes those sales activities that supplement both personal selling & advertising & coordinated them and help to make them effective such as displays, shows and expositions, demonstration and other nonrecurring selling effort not in a ordinary routine.

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Sales promotion aims at stimulating the purchasing at the point of sales & dealers effectiveness at the retail channel of distribution.

Sales promotion with the reference of LG Electronics India Pvt. Ltd.

Company plans to follow two kinds of promotional tool for their products. They are: (a) (b) Dealers promotion Customers promotion

(a) Dealers promotion

To make a proper channel of distribution & to increase the market share of the company, corporate plans to promote their dealer or retailers through the various promotional strategies. Under which they provide a price off, a straight discount off the list price. The offer encourages retailers as well as distributors to buy a quantity or carry a new item. As it is company provide allowances to the distributors for the carrying out of the companys brand. An advertising allowance compensates retailers for advertising the companys products. Company also provides free goods to the distributors as the offer for taking up extra goods or for carrying new products. In the extra company plans to organize the industrial associations in the form of trade fairs & conventions o stimulate the sale result of their intermediaries.

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(b) Customers promotion

Due to the proper attention towards the channel of intermediaries, company is not able to give proper attention towards consumers promotion but they arrange whole the method of local promotion for the awareness of the local customers. As it is they also provides demonstration & gifts to the customers shortly by which products of the company are able to create a spec in the customers mind.

2. Advertising
The modern age is an era of competition. To withstand competition manufactures have to think of new & unfamiliar uses for their products or they have to find out new buyers for their products. The patent medicine people were the first to prove what advertisement could do. They sold Life ka naksa badal de. Advertisement is the art of influencing human action the awakening for the desire to possess & possess your product. Advertisement consists of all the activities in presenting a group a non-personal, oral or visual, openly sponsored message regarding a product, services or idea.

Advertising with the reference of LG Electronics India Pvt. Ltd.

At present time the chairman of LG Electronics India Pvt. Ltd. give attention to make proper distribution channel for their products. It is the companys policy that firstly they make proper distribution channel for their products by which any customer either he/she will be belongs to rural area or belongs to urban area got the product easily. After to make proper distribution channel corporate plans to come through the media, because advertisement on media requires heavy investment.

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As far as advertisement is concerned LG Electronics India Pvt. Ltd. provides claim to their respective stockiest of the different districts of the state for the local awareness / promotion as per required by the stockiest of the districts. Local promotion includes Banners, Holdings, and Cable TV. Ad. Installing, Trade fairs, Sponsorship etc. for the awareness of their products to the local customers. Because of the company doesnt come through the media in present time i.e. why company bears all the expanses for the local promotion as required by the distributors? It is true, that it is not sufficient in todays high competitive marketing scenario, but after the attainment of the proper distribution channel company definitely come through the media which is a powerful source of demand generation in todays tough marketing scenario & it is definitely provides a strong consumer pull to the new products of the LG Electronics India Pvt. Ltd.

3.

Personal selling

A salesman is one who practices the profession of selling. One can learn a lot about selling and salesmanship just by thinking about definition of personal selling. American marketing association defined salesmanship as the process of including and assisting a prospective buyer to buy a commodity or service or to act favorably upon an idea that has commercial significance to the seller. E.F.Schumaker defined selling as the process affecting the transfer, with a profit to buyer & seller, of goods & services that gives such lasting
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satisfaction that the buyer is predispose to come back to seller for more of the same. Personal selling refers to oral presentation in conversation or more prospective customers for the purpose of making sales. Personal selling involves two-way communication, a well defined problem is half solved. Due to seller buyer interaction, personal selling alone can provide immediate feedback of information, which enables salesman to understand properly the buyers mind, his problems, his needs & his preferences. Personal selling with the reference of LG Electronics India Pvt. Ltd. As far as the LG Electronics India Pvt. Ltd. is concerned corporate plans the effective medium of personal selling for their products. They provide full support to the salesman for selling their products. Effective communication & facilities motivate salesman to make a good relationship with the customers. Corporate actually knows the importance of the phenomenon of the personal selling I.e. why they tries to implement the A-I-D-A-S formula of personal selling. The brief description of this formula is as follows: A: - Attention The Attention of the customer. I: - Interest D: - Desire A: - Action -- Create an Interest. -- Ignite the Desire of the customer. -- Gaining an order.

S: - Satisfaction Customer Satisfaction.

4.

Trade Fairs & Exhibitions

Trade fares and exhibitions are the oldest forms of sales promotions. Trade fairs and exhibitions provide companies with the opportunities of introducing and

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displaying their products. This brings companys product and consumers in direct contact. Seeing is believing is the essence and basic concept of large-scale exhibitions and trade fairs. These works at all the three levels viz.; consumer level and sales force level.

5.

Demonstration

Demonstration is those tools of sales promotion, which are used for all the three levels of sales promotions. Viz., consumer level, trade level & sales force level. Companies reset to product demonstrations when it comes up with a new product. Following are different forms of demonstration: Demonstration at retail stores School demonstration Door to door demonstration Demonstration to key people

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THE FOURTH P -- PLACE

Marketer has to ensure the availability of its products to the target customers. If a product is not available to the target customers at the right place, then he/she may shift to competitive products. So place decision relates to : (i) (ii) (iii) (iv) (v) Channel decision what kind of distribution channels a company adopts between plants & consumer. Distribution channel policy whatever to go for extensive or selective or exclusive distribution. Degree of selectivity among wholesalers & retailers. Effort to get the cooperation of the trade. Physical distribution decision includes logistics, transportation, warehousing, material handling, bulk packaging; etc.

Meaning of channels of Distribution

Goods produced by the manufacturers must come to the knowledge of the ultimate consumers. This is arranging by the sales promotion activities like salesmanship & advertising. By mere knowledge, the prospective consumers are not happy. The products must reach their hands for actual use. Channels of distribution are paths through which products move from the point of production to the point of consumption. Distribution channels are also called Trade channels.

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Distribution Channels of LG Electronics India Pvt. Ltd. State Eastern Distributors Distributors Retailers Customers Central Distributors Retailers Customers Retailers Customers Western

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COMPETITORS
Major Brands of Computers in India
HCL Infosystems
HCL Infosystems Ltd is one of the pioneers in the Indian IT market, with its origins in 1976. For over quarter of a century, we have developed and implemented solutions for multiple market segments, across a range of technologies in India. The countrys number one desktop brand had yet another great year selling 4.76 lakh units. The company targeted aggressively the B and C class cities and upped its distribution network. The significant milestones over the last year include the launch of the low cost Ezeebee Pride that came with an attractive price tag of Rs 12,990. It attacked all the buying segments with low cost processors like Via to industry standard P4 HT offerings. The aggression HCL showed in pricing its product in a way kick-started the price war with brands like Acer, and vendors like HP cutting down end-user price points. Another significant development for HCL was its launch of the high-end home PC called Neo, complementing its Beanstalk range. Neo was also the first desktop brand in India to come with Windows XP Media Center OS. Meanwhile, on the Notebooks front, HCL is the exclusive distributor of Toshiba in India whose volumes scaled to 20,000 units, compared to last years 11,600 units. With Toshiba aligned to the Higher end of the spectrum HCL was unable to tap the low and mid-end segments of the portables. And to plug that, during the year the company made a low key launch of its own brand of notebooks called eZeebee and Powerlite, which summed up to 3,000 units during the fiscal. Meanwhile, the banking vertical did buy aggressively with large mandates from SBI and other

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nationalized banks. From the government side, nodal agencies like Tamilnadu ELCOT also went for large-scale installations. As a result of growing demand for its offerings, the company is in the process of expanding its Pondycherry plant.

Acer Computer International Ltd

Few IT companies offer the breadth and depth of products that Acer Group does. Leveraging the vast collective technological resources available - Acer India (Pvt) Ltd., was incorporated as a wholly owned subsidiary of Acer Computer International Ltd. on 9th September 1999. Acer's mission in India is to translate the Group's goal of making computer technology easier to use and more affordable - to everyone in this country. With a focused customer-centric approach, Acer in India is offering unmatched uptime for all it's systems through a vast network of Service points, innovative and user friendly functionality while continuously lowering barriers that limit the access to the fruits of technology.

Zenith Computers
This Indian company has, over the years, reinvented itself in more ways than one. In that, FY 2004-05 can be called the year of innovation and new product launches for Zenith. It launched seven notebookscalling it the power of seven and priced it aggressively, starting from Rs 35K for a low-end model and a Centrino at the sub Rs 60K. With its state of the art plant in Goa, eniths manufacturing capabilities got upped considerably and as a result of the number of manufacturing best practices the company put in place, it went ahead full steam. The company claims that its impressive performance was a result of it introducing higher and better range products, and backing them with superior quality control and distribution. Meanwhile, on the exports front, the company had mandates from Bangladesh and other SAARC countries, and its entire product offerings were certified with CE and FCC norms.
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IBM
The acquisition of IBMs PC division by Lenovo in December 2004 was probably a shocking and unexpected development in the global PC industry. Lenovo took over IBMs personal computing division and in the bargain became the third largest computer company in the world. According to IDC, Lenovos 2004 product volumes stood at 14 mn units. Meanwhile for IBM India, in the first three quarters of 2004, it shipped close to 39,450 ThinkPad notebooks as against 16,036 the corresponding period the previous year, representing a 146% growth. What drove the demand is buying from two kinds of consumersfirst time notebook buyers went for the low cost sub Rs 40k notebooks, while consumers who already owned notebooks went for high-end wireless notebooks. Overall, IBMs market share in the notebook space hovered around 26% during the year.

HP (Hewlett Packard India Ltd.)

HP delivers vital technology for business and life. The company's solutions span IT infrastructure, personal computing and access devices, global services and imaging and printing for consumers, enterprises and small and medium business. The 2002 merger with Compaq Computer Corporation forged a dynamic, powerful team of 140,000 employees with capabilities in 178 countries doing business in more than 40 currencies and more than 10 languages. Revenues for the combined companies were $72 billion for the fiscal year that ended October 31, 2002. Chairman and CEO Mark Hurd leads HP, which has corporate headquarters in Palo Alto, California.

In 1993, Vectra was the first foreign PC to be marketed in India. However, its JV with HCL ran into trouble and HP reentered the Indian PC market in early 1998.

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By that time, IBM and Compaq had entered and established their brands at the premium end. HP immediately made a dent into the market through its attractively priced PCs bundled with peripherals. Since then, both HP and Compaq have been engaged in a relentless price war to woo the homebuyer. According to IDC, HP has moved up to be the No.2 brand behind HCL in the fourth quarter of 1999. HP has an assembling facility in Bangalore with a capacity to assemble 20,000 PCs a month. It has a retail presence in 60 cities through 135 stores.

Compaq India
The worlds largest seller of PCs entered India in 1994. Initially, the commercial segment (large corporations, government, educational & research institutions) was its main target segment. But with recession in the economy in mid 1990s and the consequent slashing of IT budgets of corporate, it turned its attention to the home segment. However, it soon realized that its PCs, although perceived well on reliability and quality, were considered too expensive. The assemblers and Indian brands were cornering a major chunk of the market. It slashed prices of its sub brand Presario from Rs65, 000 to Rs50, 000 to penetrate into the price conscious Indian households. At the same time, Compaq is aggressively going after corporate segment by offering a range of products tailored around services to meet specific needs. Its merger with Digital Equipment further strengthened its position in the high-end server market.

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Wipro Ltd.

Wipro intends to focus more on the lucrative services business in future. Already, services accounts for more than half of its turnover. In contrast, the contribution of systems business dropped from 43 per cent to 25 per cent. It had a joint venture with Acer for marketing the Wipro-Acer brand of PCs. However, they called it off in 1999. Wipro has a 500-strong dealer network. It also distributes IBM PCs and Sun Microsystems.

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RESEARCH METHODOLOGY
RESEARCH
Research Methodology is a systematic way, which consists of series of actions or steps necessary to effectively carry out research and the desired sequencing of these steps. The marketing research is a process of involves a number of interrelated activities, which overlap and do rigidly follow a particular sequence. It consists of the following steps: 1. Formulating the objective of the study 2. Designing the methods of data collection 3. Selecting the sample plan 4. Collecting the data 5. Processing and analyzing the data 6. Reporting the findings

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OBJECTIVES OF THE RESEARCH

RESEARCH DESIGN

SAMPLE DESIGN

DATA COLLECTION

DATA ANALYSIS

FINDINGS

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SIGNIFICANCE OF RESEARCH
All progress in born of enquiry Doubt is often better than overconfidence, for it leads to enquiry, and enquiry leads to invention is a famous Hudson Maxim in context of which the significance of research will be understood, increased amounts of research make progress possible. The role of research in several fields of applied economics, whether related to business or to the economy as a whole, has greatly increased in modern times. The increasingly complex nature of business and government has focused attention on the use of research in solving operational problems. Research, as an aid to economic policy, has gained added importance, both for government and business. Research provides the basis for nearly all government policies in our economic system. For instance, governments budgets rest in part on an analysis of the needs and desires of the people and on the availability of revenues to meet needs. The cost of the needs has to equate to probable revenues and this is field where research is most needed, through research we can devise alternative policies and can as well examine the consequences of each of the alternatives. Decision-making may not be a part of research, out of research certainly facilitates the decisions of the policy maker. Government for dealing with all facets of the countrys existence and most of these well be related directly or indirectly to economic condition. The plight of cultivators, the problem of big and small business and industry, working conditions, trade union activities, the problems of distribution, even the size and nature of defense services are the matters which requires research. Thus research is considered necessary with regard to the allocation of nations resources.

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RESEARCH DESIGN
Research Design specifies the methods and procedures for conducting a particular study. A Research Design is the arrangement of conditions for collection and analysis of the data in a manner that aims to combine relevance to the research purpose with economy in procedure. Research Design is broadly classified into three types as: Exploratory Research Design Descriptive Research Design Hypothesis testing Research Design

On the basis of the objective of study, the studies which are concerned with describing the characteristics of a particular individual, or of a group of individual under study comes under Exploratory Research Design.

Exploratory Research Design

Exploratory Research is also termed as Formulative research studies. The main purpose of such studies is that of formulating the problem for more precise investigation. The major emphasis in such studies is on the discovery of new ideas and insights. Since our aim is to obtain complete and accurate information in the said studies, the procedure to be used must be carefully planned. The research design make enough provision for protection against bias and must maximize reliability, with due concern for the economical completion of the research study. In this research design the objective of study is clearly defined and has accurate method of measurement with a clear-cut definition of population which is to be studied.

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SAMPLING DESIGN
It is needless to say that no investigator can study the entire population and hence selects a few individuals belonging to the population for the purpose of investigation.

A Sample Design is a definite plan for obtaining a sample from a given population. It refers to the technique or the procedure adopted in selecting items for the sample. The main constituents of the sampling design are as below: 1. 2. Sampling Unit Sample Size

3. Sampling Procedure 4. Collection of Data

SAMPLING UNIT
A sampling framework i.e. developed for the target population will be sampled i.e. who is to be surveyed.

Retailers & Distributors of PCs

SAMPLE SIZE
It is the substantial portion of the target population that are sampled to achieve reliable results.

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I have taken 55 Retailers & Distributors as a sample.

SAMPLING PROCEDURE
The procedure to choose the respondents to obtain a representative sample, a probability sampling technique is applied for the target market.

NON-PROBABILITY SAMPLING
It is a purposive sampling which deliberately chooses the particular units of the universe for constituting a sample on the basis that the small mass that they so select out of a huge one will be typical or representative of the whole. NonProbability sampling technique is used in the study because the random selection of the universe i.e. all retailers cant be available randomly.

DATA COLLECTION
PRIMARY DATA
The primary data are those data that are collected afresh and for the first time. And happen to be original in character. The primary data to be collected for the study are: By Interviewing the retailers & distributors of PCs. By Structured Questionnaire.

SECONDARY DATA
Secondary data are those data which have already been collected by someone else and which already had been passed through the statically process. The secondary data to be collected for the study are: Publication of the company Periodical of the company

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By Companies Websites

RESEARCH INSTRUMENT
STRUCTURED QUESTIONNAIRE: A Questionnaire consist of a number of questions printed or typed n a definite order on a form or set of forms. It is the set of questions presented to the respondents for their answers. When the questions have only two alternatives or of multiple choices, then it is known as closed-end questionnaire, which is hence used the given study.

Research Step
Step-1 The topic MARKET STUDY OF BRANDED PCs was selected and a synopsis containing the title of the organization & objective was prepared. Step-2 A questionnaire is prepared for Retailers & Distributors consists of objective type questions; & given to the respondent. Step-3 The questionnaire was circulated to a random sample of 55 Retailers & Distributors in order to find out answers to the given questions. Step-4 The researcher for data analysis collected the questionnaire duly filled by the respondents. Step-5 After going through the entire questionnaire, researcher is able to find out various aspects related with topic.

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TABULATION & ANALYSIS OF DATA

Data analysis with the help of questionnaire filled up by the Retailers and Distributors. The responses are very encouraging. 75% responses are obtained & analyzed carefully. DATA ANALYSIS FOR QUESTIONNAIRE OF RETAILERS

Market share of major players in the industry

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The study shows the following figures about the market share of major players in the industry, which is shown in the table and pie chart below:

HCL HP LG IBM Wipro Zenith Lenovo Compaq Dell Apple Others Assemble

12.25 10.65 10.25 5.78 2.53 3.75 10.50 13.99 5.25 0.01 0.04 25.00

Market Share of Branded PCs in Industry

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The pie chart above shows that. The assembled market share is 48% then HCL share is 14% then comes HP at 12.65% % LG market share is 2.84 in Indian Market. Majority of people preferred the unorganized assemblers due as they were providing the PCs at low cost. The difference between assembled and branded PCs was around 18%-20%. After slash of duties from March 1, 2005 and April 1, 2005 this difference has come down to 3%-4% only. So, new opportunities have opened.

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 The total output of the PCs in 2003-04 & 2004-05

Total Output Units Company
HCL HP IBM ZENITH Lenovo Compaq Dell LG Wipro Apple Assembled 2005-06 Units 273445 227620 109570 82669 180030 585200 95000 115600 46434 25000 102812 2006-07 Units 300790 250382 120527 90936 198033 731500 104500 127160 51077 27500 113093

Total

1843380

2115498

This chart shows that the maximum turnover of others & assembled computers in 2003-04 & 2004-05 then the turnover of HCL is greater then other brands and LG turnover in 2004-05 is 95600.

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 Market share of branded PCs

HCL HP IBM ZENITH Lenovo Compaq Dell LG Wipro Apple Others Assemble Total 8 6 4 3 2 8 3 10 2 2 2 22 55

Market Share of Branded PCs

This pie chart shows that the highest market capture by the HCL in branded market & its share is 15% then HP covers the 12% market & LG has also capture 9% of the market in 2004-05 but the assemble computers capture the 37.57% of the market share. Here the assemble PCs also cover the big market share in this region.

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 Types of PCs sold by the Retailers & Distributors

Branded Assemble Both Total 18 Retailers & Distributors 12 Retailers & Distributors 25 Retailers & Distributors 55 Retailers & Distributors

Types of PCs sold in the market by the Retailers & Distributors

Both, 25, 45%

Branded, 18, 33%

Branded Assemble Both

Assemble, 12, 22%

45% retailers & Distributors selling both the assembled & branded computers, 33% retailers & Distributors selling only the branded computers & 22% retailers & Distributors selling only assembled computers.

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Customer preference of the PC

Retailers & Distributors Branded Assemble Total 35 20 55

Customer preference of the PC

Assemble, 20, 36% Branded Branded, 35, 64% Assemble

64% retailers & Distributors said that the customer purchase branded computers & 36% retailers & Distributors said that the customers purchase the assembled computers.

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 No. Brands sold by the retailers & distributors

No. Of Brands Only 1 2 2 to 5 More the 5 Total

Retailers & Distributors 9 13 19 14 55

No. of brands sold by the Retailers & Di stributors

More the 5, 14, 25%

Only 1, 9, 16% 2, 13, 24%

Only 1 2 2 to 5 More the 5

2 to 5, 19, 35%

16% retailers & distributors dealing with only one brand of the computers, 24% retailers & distributors dealing with two brands of the computers, 35% retailers & distributorsdealing with 2 to 5 brands of the computers & 25% retailers & distributors deal with more then 5 brands in the market.

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 PC Brands Higher In Demand

Brands LG HCL HP Compaq Zenith Wipro IBM Assemble Total Retailers &Distributors 5 8 7 5 3 2 5 20 55

PC Brands Higher In Demand

Assemble 36%

LG 9%

LG HCL 15% HP 13% HCL HP Compaq Zenith Wipro IBM Assemble

IBM 9%

Wipro 4%

Compaq 9% Zenith 5%

9% retailers & distributors said that the customer prefer LG, 15% retailers said that the customer prefer HCL, 13% retailers & distributors said that the customer prefer HP, 9% retailers & distributors said that the customer prefer Compaq, 5% retailers & distributors said that the customer prefer Zenith, 4% retailers & distributors said that the customer prefer Wipro, 9% retailers & distributors said that the customer prefer IBM & 36% retailers & distributors said that the customer prefer Assembled computers
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 Average monthly demand of the LG MyPc

No. Of PCs Up to 10 10 to 20 Above 20 Total

Retailers 31 14 10 55

Average monthly demand of LG MyPc

10 Upto 10 10 to 20 14 31 above 20

31% retailers & distributors said that average demand of LG computers is up to 10 units monthly, 14% retailers & distributors said that average demand of LG computers is 10 to 20 units monthly & 10% retailers & distributors said that average demand of LG computers is above 20 units monthly.

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 Pricing Factor affects to the customers

Importance Very much Almost Less No effect Total Retailers & Distributors 27 16 7 5 55

Pricing factor affects to the customers

9% 13% 49% Very much Almost Less No effect 29%

49% retailers & distributors believe that price is the very much important affecting factors to the customers, 29% retailers & distributors believe that price is almost important affecting factors to the customers, 13% retailers & distributors believe that price is the less important affecting factors to the customers , 9% retailers & distributors believe that price is not important affecting factors to the customers.

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Responses on the statement Customer is always best product seeker.

Strongly agreed Agreed Disagreed Cant say Total

23 16 11 5 55

25 20

23

16 15 11 10 5 0 Strongly agreed Agreed Disagreed Cant't say 5

Strongly agreed Agreed Disagreed Cant't say

23 retailers & distributors are strongly agreed with the statement that customer is always best product seeker, 16 retailers & distributorsare agreed with the statement that customer is always best product seeker, 11 retailers & distributors are disagreed with the statement that customer is always best product seeker & 5% retailers & distributors cant say any thing on the statement that customer is always best product seeker.

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 Important factors affects to the PC customers

Factors Price Quality Brand Availability Advertisement Total Retailers & Distributors 12 16 14 4 9 55

Important factors affects to the customers

16%

22% Price Quality Brand Availability Advertisement

7%

25%

30%

22% retailers & distributors believe that price is the important factor at the time of purchasing a product, 30% retailers & distributors believe that product is the important factor at the time of purchasing a product, 25% retailers & distributors believe that brand is the important factor at the time of purchasing a product, 7% retailers & distributors believe that availability is the important factor at the time of purchasing a product & 16% retailers & distributors believe that advertisement is the important factor at the time of purchasing a product.

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 Services
&retailers

makes

good

relationship with customers

Yes No Total

51 4 55

Services makes relationship with retailers & customers

7%

Yes No

93%

93% retailers & distributors said that service provided by the company makes a good relationship with customers as well as with intermediaries also & 7% retailers & distributors said that service provided by the company not makes a good relationship with customers as well as with intermediaries also.

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 Importance of profit margin for retailers & Distributors

Most important Important Not important Total

33 17 5 55

Importance of profit margin for retailers & distributors

9% 31% 60% Most important Important Not important

60% retailers & distributors believes that profit margin on the product is most important for the retailers & distributors, 31% retailers & distributors believes that profit margin on the product is important for the retailers & distributors & 9% retailers & distributors believes that profit margin on the product is not important for them.

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 No. of brands confused the customers

Yes No Total

35 20 55

Does the large no. of brands makes customer confused?

36% Yes No 64%

64% retailers & distributors are agreed with the statement that large number of products makes customer confused, 36% retailers & distributors are not agreed with the statement that large number of products makes customer confused.

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 Average monthly sale of computers in NCR region

Brands LG HCL HP IBM Compaq Dell Zenith Assembled Total

Units 250 425 375 100 125 50 85 850 2260

Average monthly sale of PCs

LG 11% 37% 19% HCL HP IBM Compaq 4% 4% 2% 6% Dell 17% Zenith Assembled

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FINDINGS
Indian PC buyers find value in brands
The market for assembled personal computers (PCs) is shrinking fast as branded majors continue to slash prices and plug the gap. Even as assemblers realize that they no longer have an edge, either in pricing or after-sales service, optimists indicate that it's not the end of the road for them yet. As of now, the message is loud and clear. Gone are the days of 65-70% market share for the assembling segment when first-time PC buyers preferred going to standalone hardware professionals. With the crashing prices of branded PCs, the Indian consumer, including the first time user, is seeing more value in branded products. While the total Indian PC market has been growing between 25-30% annually, the assembled segment has actually reported a negative growth over the past 12 months. Till a year ago, the price difference between branded and assembled PCs was 15-20%. Now, it is 6-8%. Why will a consumer buy an assembled PC rather than a branded PC? In the last one-year, PC manufacturers like HCL, Zenith, PCS and even local brands like Amar PC, have been successful in bringing operational efficiency in souring hardware components. Together with lower duty structures and efficient management PC production, the brands have been able to offer desktop computers at sub Rs 18,000 level for entry-level users. Branded computer vendor has to pay an average tax of 10-12%. With the customs duty touching zero on 200 IT hardware components and devices from March 1, and introduction of value added tax (VAT) from April 1, the simplified tax structure will help the organized player rather than the unorganized assemblers.
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Desktops: The Volumes Game

In the previous year (FY 2003-04) the major trend was the assemblers shedding market share in favor of the branded players. That trend saw further escalation during FY 2004-05 with the assemblers slice shrinking further as against the previous years 58% to 48% for FY 2004-05. A further downslide is expected on the assembler space in the days ahead. With the Intel based branded PC coming into the sub-Rs 18,000 mark, the assemblers found the going difficult. Some took the more lucrative route by becoming resellers, and in the bargain averaged better margins.

Demand of the PCs

With the growing need for computerization, branded PC demand in public sector organizations and in the government is on the rise. Demand from the private sector, especially in the educational institutes and home segment, is already rising. The small office home office (SOHO) and small-and-medium enterprise (SME) segments are also driving hardware demand. The growing popularity of the Internet has also raised the demand for branded PCs.

About The Assemblers:

The once ubiquitous neighborhood friendly assemblers were losing their face in the heat of intense competition from the branded segment of the PC industry. Industry estimates peg the share of assembles for the fiscal at around 48%. A MAIT-IMRB study said that market share for assembled PCs, which was 57% in FY 2003-04 was reduced to 44% in the first-half of FY 2004-05. Margin pressures and the 4% countervailing duty (CVD) that the government imposed on computer components put great stress on assemblers. In this scenario, better margins are there for those manufacturers who import fully built PCs as there would not be multiple taxation. While big players absorbed the tax and duty changes, the budget-constrained assemblers found the going difficult as

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customer loyalties shifted more to the branded side. Also, PC buyers found the service levels deficient with assemblers who were not able to offer quality and timely service unlike a branded PC manufacturer. In all, tough times are ahead for assemblers unless they re-invent and align with branded players. Good News For PC Vendors:Indian PC Market up 34.4% in 2004 The industry recorded the second highest shipments at 33.87 lakh in Asia-Pacific region Gartner, an industry expert, expects Indian market to grow by 29.3 per cent in 2005, due to the strong economic indicators. 32,67,885 desktops were sold in 2004 in India. PC Industry grew at a healthy rate of 26%, with volumes crossing 3.3 mn units Assemblers found the going difficult as cheaper branded PCs gained more market share

B and C class regions continued to represent a big opportunity for PC business

In FY 2004-05, assemblers lost share to brands in a big way. Their market share shrink furtherfrom 58% to 48% Assemblers and Intel got very aggressive in B and C class towns with active marketing and promos

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SWOT ANALYSIS
S: - STRENGHTS Quality based products. Experience of international market. Developed R & D. Increasing range of products. Suitable hierarchy of organization. Reliable products. Customer satisfaction oriented. Skilled employees at all level. Ethical work towards society. Looking forward for different types of other field to make organization wealthy. W: - WEAKENESSES Unawareness of Brand Name. Small market segment. Duplicity of products. Lesser control over duplicity. Price discrimination & wrong pricing. No proper promotional strategies. Weak market intelligence system. O: - OPPORTUNITIES Grasp maximum market share by utilizing well-developed R & D. Having large no. Of professionals in surroundings.

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 Customers are highly aware with the brand name & quality of the products. Rapid increase in demand of PCs, therefore highly potential market is available. Well-developed distribution channel in other electronic goods. T: - THREATS High competition from other brands. Market slump. Customers are highly confused by the promotional strategies followed by the competitors. Retailers are demand oriented. High market share of assembled PCs Beyond the above description I would like to mention it that in LG Electronics India Pvt. Ltd. The whole pattern of marketing is quite effective and is appreciable because they have established so huge empire with in three to four years.

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LIMITATIONS
Every research is conducted under some boundations and this research is not an exception. While doing the research some of the restraints had to be faced such as: The researcher could not cover each & every retailer & distributor because the sample survey was done. There might have been tendencies among the respondents to amplify or filter their responses under the testing conditions. Since the results have been drawn on the basis of the information provided by the respondents, chances of error might have crept in. Since the study involved sampling method, Drop in or Go through error might have crept in. Unintelligent answers or misinterpretation of any question by the respondent could not be corrected. Personal Biases of retailers and distributors may affect their responses. From all surveyed retailers and distributors only 75% have responded positively. .

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CONCLUSION
The outlook for FY 2005-06 is very positive, as vendors are bullish on huge volume growth in both home and the enterprises, which could further drive the PC volumes. A consolidation of vendor growth estimates for the ongoing fiscal puts the volume grow that 32-34%. Intels P4 HT configurations will see lots of traction and will start cannibalizing on its entry-level Celeron based offerings as one is seeing a declining interest in Celeron based machines. The consumer will be more willing to pay a small premium for P4 desktops. However, on the portables front, mobile Celeron will be key to the growth of entry-level offerings with the education segment expected to drive bigger volumes. Similarly, the Centrino-based notebooks will further become affordable and will breach the Rs 45K barrier in the ensuing quarters of FY 2005-06. With the impact of the new tax and duty regimes in place, most vendors consider that it only created a brief confusion on the part of the vendors, channels, and the consumers, and many believe that it will not create any major pricing fluctuations. It was a very eventful year for the PC business in India and one only hopes this revival will drive bigger growth in the days ahead. As I made a comparative study of Monthly sale of different brands of PCs like L.G, HP, Compaq, IBM, HCL, Zenith. I found HCL and HP to be the cutthroat rival of L.G. This is because of the reason that many other brands deal in mainly in their branded PCs and concentrate on them. But HCL & HP like the policies of LG concentrate on the peripherals market too. According to my study I found some discrepancies by the side of LG Electronics. Many retailers and distributors complained of not having a proper channel for sale. The problem arrives when the distributors start selling products to customers directly, when the customer get the products at some what lower

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prices from the distributors, then it is very obvious why will they go to the dealer & retailer. So a proper channel should be made in which the distributors should supply products to sub distributors, then the sub distributors should supply products to the retailers or dealers. And finally it should reach to the customers through them.

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SUGGESTIONS AND RECOMMENDATIONS

Almost 50% of the Retailers and distributors contacted complained of the services given. So satisfaction of these 50% of retailers and distributors is necessary, so the company should take measures by service section to come up to their expectations, following are the main suggestions to be followed by the company to improve the sales. LG MYPCs price should be less. Advertising material is not available there is a lack of pamphlets & Service should be improved. Onsite service should be also improved. Proper channeling of products from distributors to retailers. Consistence policies should be followed regarding distributors. Direct interaction between service members & dealers should be Improve dispatch and delivery of goods. Action must be taken if call is not attended after 24 hrs of There should be proper coordination between sales person &

brochures for advertising.

there.

registration call. service people, because the sales person says something else & the service people do something else. Many dealers are unaware of LG MyPCs so it should be properly

supplied & made known to them. The sale of LG MyPc is not very good in NCR region, if above suggestion will be positively accepted by the company then the day is not far when LG will be the best in this region.

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APPENDICES
QUESTIONNAIRE FOR RETAILERS & DISTRIBUTORS
We are carrying out a study for the knowledge of the current market share of the Branded PCs, percentage rise in the sales of branded PCs & the future aspect of LG MyPc in NCR region. We would appreciate if you will please convey your view on the different questions referred to this questionnaire. On behalf of the sponsor of this research study I thank you for sparing your valuable time.

Name of the shop.. Address ...

1. Which PC you sell in the market? a) Branded b) Assemble c) Both 2. In your view which PC do the customers prefer? a) Branded b) Assembled 3. How many brands you sell?

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a) Only1 c) 2 to 5 Brands

b) 2 Brands d) More then 5

4. Which PC is having mostly the higher demand? a) LG d) IBM g) Any other 5. What is the average monthly demand for LG MyPc? a) Up to 10 b) 10-20 c) Above 20 6. In your opinion how much pricing factor affects to the customer? a) Very much b) Almost c) Less 8. Are you agreed that the customers are always best product seeker? a) Strongly agreed b) Agreed c) Disagreed d) Cant say b) HCL e) Compaq c) HP f) Zenith

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9.

In present scenario which one is the most important factors for customers, which affects the purchasing decision? a) Price b) Quality c) Brand d) Availability e) Advertisement

10.

Services make good relationship with customers & retailers? a) Yes b) No

11.

How much importance of profit margin for retailers & distributors? a) Most important b) Important c) Not important

12.

Does the large numbers of product makes customer confused? a) Yes b) No

13. Monthly Sales In Percentage : LG HCL IBM Compaq

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Zenith HP IBM Dell Wipro Assembled 15. Opinion/suggestion for LG Electronics India Pvt. Ltd. ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Thanks for giving important details

Name & Signature

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BIBLIOGRAPHY
BOOKS:
1. Kotler Philip, marketing management, millennium edition, New Delhi, PHI 2002. 2. Sherlekar S.A. et al, Principles of Marketing, Second edition, Himalya publication, New Delhi. 3. Kothari C.R. Research Methodology, Second edition, Wishwa Publication, 2002.

CATALOG:
Catalog of LG Electronics India Pvt. Ltd.

MAGAZINES:
(a) Business standard (b) Business world (c) Data Quest.

INTERNET:
Information from official website of LG Electronics India Pvt. Ltd. www.lge.com www.lgindia.com www.lgezbuy.com www.google.com www.dqindia.com www.pcquest.com

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JOURNALS :
1. INDIAN JOURNAL OF MARKETING 2. ECONOMIC REVIEW

NEWSPAPER:
1. TIMES OF INDIA 2. HINDUSTAN TIMES 3. ECONOMIC TIMES

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