A PROJECT REPORT ON Study of Consumer Durable Market For SAMSUNG ELECTRONICS LTD. With Special reference to NASHIK district A report submitted in the partial fulfillment of the requirements of the MBA program of the University of Pune By Swapnil D. Panpatil MBA - Marketing 2008-2010 PIREN’S Institute of Business Management And Administration Loni – Bk. 1
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50088799 Project Report on SAMSUNG Consumer Durables
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A
PROJECT REPORT
ON
Study of Consumer Durable Market
For SAMSUNG ELECTRONICS LTD.
With Special reference to NASHIK district
A report submitted in the partial fulfillment of the requirements of the
MBA program of the University of Pune
By
Swapnil D. Panpatil
MBA - Marketing
2008-2010
PIREN’S Institute of Business Management
And Administration
Loni – Bk.
1
Student Declaration
I hereby declare that this project report titled “The Study of Consumer Durable
Market with Special Reference to Nashik District” in SAMSUNG ELECTRONICS
LTD. is executed as per the course requirement for the post graduate program in
management. I have not been submitted by me or any other person to any other university
or institution for degree or diploma. It’s my own work.
Place:
Date:
Swapnil D. Panpatil.
MBA
(2008-2010)
2
ACKNOWLEDGEMENT
In this project I have made an honest and dedicated attempt to make the research
material as authentic as it could. And I earnestly hope that it provides useful and
workable information and knowledge to any person reading it.
During this small time frame of two months in which the project reached its
completion, there were a few people whom I would like to make a mention of and
without whose help the project would have never seen the light of the day.
I also thank to my internal guide Prof.Vinod Malkar for his timely response via e-
mail, which immensely helped in giving the project the initial direction it needed.
I would like to thank my external guide Mr.Santosh Keseri (Marketing Executive)
who gave me a free hand as far as going about the project work was concerned.
I dedicate this project to the Dealer’s of Nashik district who were extremely kind
and who at times went out of the way to help me. Without their co-operation it would
have perhaps not been possible to research a few places, which I did, within the stipulated
time frame.
Swapnil D. Panpatil
MBA (Marketing)
2008-2010
3
Preface
We look our training at SAMSUNG ELECTRONICS LTD. Nashik. During the training
was to get an overview of the Consumer Durable Market of Nashik district. It was a
firsthand experience to get exposed to the professional set-up and face the market, which
was really a great experience. Training period was a learning experience.
When business is involved, experiences counts a lot. experience are an instrument, which
leads towards success. Working with SAMSUNG ELECTRONICS LTD., has been a
pleasure
I take this opportunity to present the project report and sincerely hope that it will be as
much knowledge enhancing to the readers as it was to use during the fieldwork and the
compilation of the report.
4
Sr.no. Contents Page no.
1. Introduction
2. Industry Profile
3. Company Profile
4. Product Profile
5. Objective of Study
6. Research Methodology
1.Primary data
2. Secondary data
3.Sampling
4. Scope of the study
5.Limitations of the study7. Theoretical Background of the study
8. Data Analysis
9. Findings
10 Recommendations
11 Conclusion
10. Bibliography
5
INTRODUCTION
Before the liberalization of the Indian economy, only a few companies like Kelvinator,
Godrej, Alwyn, and Voltas were the major players in the consumer durables market,
accounting for no less than 90% of the market. Then, after the liberalization, foreign
players like LG, Sony, Samsung, Whirlpool, Daewoo, and Aiwa came into the picture.
Today, these players control the major share of the consumer durables market. Consumer
durables market is expected to 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 were 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 televisions (C-TV) were no
longer considered luxury items. However, there were still very few players in categories
like vacuum cleaners, and dishwashers Consumer durables 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%. MNC's major target is the growing
middle class of India. MNCs offer superior technology to the Consumers whereas the
Indian companies compete on the basis of firm grasp of the local market, their well-
acknowledged brands, and hold over wide distribution network. However, the penetration
level of the consumer durables is still low in India.
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Indian Consumer durables market used to be dominated by few domestic players like
Godrej, Voltas, Allwyn and Kelvinator. But post liberalization many foreign companies
have entered into Indian market dethroning the Indian players and dominating Indian
market the major categories being CTV, REFRIGRATOR, MICROWAVE OVEN 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 two
Korean companies have been maintaining the lead in the market with LG being leader in
almost all the categories.
The rural market is growing faster than the urban market, although the penetration level
is much lower .The CTV segment is expected to the largest contributing segment to the
overall growth of the industry. The rising income levels double-income families and
consumer awareness were the main growth drivers of the industries.
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INDUSTRY PROFILE
The Consumer Durables industry consists of durable goods and appliances for domestic
use such as televisions, refrigerators, air conditioners and washing machines. Instruments
such as cell phones and kitchen appliances like microwave ovens were also included in
this category. The sector has been witnessing significant growth in recent years, helped
by several drivers such as the emerging retail boom, real estate and housing demand,
greater disposable income and an overall increase in the level of affluence of a significant
section of the population. The industry is represented by major international and local
players such as BPL, Videocon, Voltas, Blue Star, MIRC Electronics, Titan, Whirlpool,
etc.
The consumer durables industry can be broadly classified into two segments: Consumer
Electronics and Consumer Appliances. Consumer Appliances can be further categorized
into Brown Goods and White Goods. The key product lines under each segment were as
follows.
Industry Size, Growth, Trends
The consumer durables market in India was estimated to be around US$ 5 billion in
2007-08. More than 7 million units of consumer durable appliances have been sold in the
year 2006-07 with colour televisions (CTV) forming the bulk of the sales with 30 per
cent share of volumes. CTV, refrigerators and Air-conditioners together constitute more
than 60 per cent of the sales in terms of the number of units sold.
8
In the refrigerators market, the frost-free category has grown by 8.3 per cent while direct
cool segment has grown by 9 per cent. Companies like LG, Whirlpool and Samsung have
registered double-digit growth in the direct cool refrigerator market.
In the case of washing machines, the semi-automatic category with a higher base and
fully-automatic categories have grown by 4 per cent to 526,000 units and by 8 per cent to
229,000 units, respectively. In the air-conditioners segment, the sales of window ACs
have grown by 32 per cent and that of split ACs by 97 per cent.
Since the penetration in the urban areas for these products is already quite high, the
markets for both C-TV and refrigerators were shifting to the semi-urban and rural areas.
The growth across product categories in different segments is assessed in the following
sections.
Consumer Electronics
The CTV production was 15.10 million units in 2007-08 and is expected to grow by at
least 25 per cent. At the disaggregated level, conventional CTV volumes have been
falling while flat TVs have grown strongly. Market sources indicate that most CTV
majors have phased out conventional TVs and have been instead focusing more on flat
TVs. The flat segment of CTVs now account for over60 per cent of the total domestic TV
production and is likely to be around 65 per cent in 2007-08.High-end products such as
liquid crystal display (LCD)and plasma display CTV grew by 400 per cent and 150 per
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Cent respectively in 2009–10 following a sharp decline in prices of these products and
this trend is expected to continue. The audio/video player market has seen significant
growth rates in the domestic market as prices have dropped. This trend is expected to
continue through 2009- 2010, as competition is likely to intensify to scale and capture the
mass market.
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COMPANY PROFILE
SAMSUNG – Introduction
Our Vision
Samsung is guided by a singular vision: to lead the digital convergence movement.
We believe that through technology innovation today, we will find the solutions we need
to address the challenges of tomorrow. From technology comes opportunity for
businesses to grow, for citizens in emerging markets to prosper by tapping into the digital
economy, and for people to invent new possibilities.
It’s our aim to develop innovative technologies and efficient processes that create new
markets, enrich people’s lives and continue to make Samsung a trusted market leader
Our Mission
Everything we do at Samsung is guided by our mission: to be the best “digital-
Company”.
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Samsung grew into a global corporation by facing challenges directly. In the years ahead,
our dedicated people will continue to embrace many challenges and come up with
creative ideas to develop products and services that lead in their markets. Their ingenuity
will continue to chart Samsung’s course as a profitable, responsible global corporation.
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SAMSUNG HISTORY
2008
• Named Yoon-Woo Lee as a Vice Chairman & CEO of Samsung Electronics
• Launched OMNIA phone • Completed establishing TV manufactory in Russia Kaluga• Became the official sponsor of 2010 Guangzhou Asian
Game• Developed the world's first 2Gb 50 NANO• Samsung takes No. 1 spot in U.S. cellphone market • Opened Global Brand PR Centre ‘Samsung D'light'
• No.1 worldwide market share position for TVs achieved for the 9th quarter in a row
2007 • No.1 worldwide market share position for TVs achieved for the seventh quarter in a row
• Developed the world's first 30nm-class 64Gb NAND Flash™ memory
• BlackJack bestowed the Best Smart Phone award at CTIA in
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the U.S.
• Attained No.1 worldwide market share position for LCD for the sixth year in a row
2006 • Developed the world's first real double-sided LCD• Developed the worlds' first 50nm 1G DRAM• Unveiled 10M pixel camera phone• Launched "Stealth Vacuum," a vacuum cleaner with the
world's lowest level of noises• Launched the worlds' first Blu-Ray Disc Player
• Developed 1.72"Super-Reflective LCD ScreenSeptember, 2005 The India Retail Forum has awarded Samsung as the Best Retailer of
the year 2005 in the consumer Durables category. James Damian,
SVP, Best Buy and his team handed over the award to Mr. Ravinder
Zutshi, Dy MD and Samsung India at the India Retail award function
held in Mumbai on 16th September. February 2005 Mr. S. H. Oh appointed as the President and Chief Executive Officer
of Samsung South West Asia.November 2004 Samsung received the Golden Peacock Special commendation
Certificate for Corporate Social Responsibility (Private Sector) for the
year 2004 from Mr. Shivraj Patil, Union Home Minister. February 2004 India made regional headquarters for Samsung Southwest Asia.
February 2004 Mr. K. S. Kim appointed as the First President and Chief Executive
Officer of Samsung South West Asia.November 2003 Inaugurated Samsung's new, High-Tech, advanced Refrigerator
facility.August 2003 Commencement of production at refrigerator facility in Noida.
June 2003 Merger of SIEL with SEIIT.Software technology park set up at Noida
December 2002 Construction commences for 5,000,000 refrigerator plant in Noida
October 2002 Samsung unveils new technology for Consumer Home Entertainment
(DNIe™)
June 1996 Foundation Stone laid for CTV Factory at Noida, Uttar Pradesh.
May 1996 Launch in South
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Home Appliances Launch
December 1995 Samsung India Electronics (SIEL) products launched in India.
August 1995 Certificate for commencement of business received by Samsung
GROWING TO BE THE BEST
Samsung India aims to be the ‘Best Company’ in India by the Year 2006. ‘Best
Company’ in terms of both the internal workplace environment as well as the external
context in which the Company operates. Samsung aims to grow in India by contributing
to the Indian economy and making the lives of its consumers simpler, easier and richer
through its superior quality products.
“Our aim is to gain technological leadership in the Indian marketplace even as our goal is
to earn the love and respect of more and more of our Indian consumers.” Mr. S.H. Oh,
President & CEO Samsung South-West Asia Regional Headquarters.
Samsung in India
Samsung India is the hub for Samsung’s South West Asia Regional operations. The
South West Asia Regional Headquarters looks after the Samsung business in Nepal, Sri
Lanka, Bangladesh, Maldives and Bhutan besides India. Samsung India, which
commenced its operations in India in December 1995, today enjoys a sales turnover of
over US$ 1Bn in just a decade of operations in the country.
15
Headquartered in New Delhi, Samsung India has a network of 19 Branch Offices located
all over the country. The Samsung manufacturing complex housing manufacturing
facilities for Colour Televisions, Colour Monitors,
Refrigerators and Washing Machines is located at Noida, near Delhi. Samsung ‘Made in
India’ products like Colour Televisions, Colour Monitors and Refrigerators were being
exported to Middle East, CIS and SAARC countries from its Noida manufacturing
complex. Samsung India currently employs over 1600 employees, with around 18% of its
employees working in Research & Development.
SAMSUNG GLOBAL
The DNA of Digital Innovation
Samsung Electronics is a global leader in semiconductors, telecommunications, digital
media and digital convergence technologies with 2004 parent company sales of
US$55.2Bn and net income of US$10.3Bn. Employing approx. 113,000 people in over
90 offices in 48 countries, the company has of 5 main business units: Digital Appliance
Business, Digital Media Business, LCD Business, Semiconductor Business and
Telecommunication Network Business. Recognized as one of the fastest growing global
brands, Samsung Electronics Corporation is the world’s largest pro ducer of Colour
Monitors, Colour TVs, Memory Chips and TFT LCD’s.
16
Customized products for Indian Consumers
Samsung understands the local cultural sensibilities to customize its products
according to the Indian market. It has set up a “usability lab” at the Indian Institute of
Technology in New Delhi to customize Samsung products to meet the specific needs of
Indian consumers. This industry-institute partnership is helping Samsung to study and
analyze consumer response in aspects of product design, including aesthetics, ergonomics
and interface.
Through its research done on consumer preferences in India, Samsung has concluded
that Indian consumers want more sound oriented products. Thus, the Samsung televisions
for India have a higher sound capacity than their foreign counterparts.
For the semi-automatic segment of Samsung washing machines, Samsung has
introduced for the first time in India a feature called Super Dry. It is present in three of
Samsung’s semi automatic models and dries the clothes better than the rest.
Samsung washing machines have an additional menu that takes care of the local
Indian wardrobes. They also have a ‘memory re-start’ that takes care of the frequent
power failures in India.
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PRODUCT PROFILE
650 Series Full HD LC D TV
Developed using our unique Crystal Design with a hint of
rose-red color accentuating a traditional piano-black
bezel frame, the 650 Series LCD TV features Auto Motion
Plus 120Hz, an Ultra Clear Panel, DNIe Pro and Wide
Color Enhancer Pro to provide perfect picture quality.
Wide Video MP3 Player (YP-P2)
Equipped with Bluetooth and a touch screen interface,
the YP-P2 lets consumers enjoy vivid videos on a 3-inch
wide LCD screen. Samsung’s proprietary DNSe 2.0
technology with EmoTure™ UI enhances the ultimate multimedia experience.
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VRT Front Loading Washer
Designed with Vibration Reduction TechnologyTM (VRT),