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ADISSERTATIONPROJECTREPORTONMARKETANALYSISOFLGCONSUMERDURABLES
GuidedbyMr.PrakashChandraDashSeniorFaculty(Marketing)
SubmittedByAbhiramPrasadSatapathyRegd.No.0706275046
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Acknowledgement
Itisindeedofgreatmomenttopleasuretoexpressmysensesofperfoundgratitude&indebtnesstoallthepeoplewhohavebeeninstrumentalinmakingmytanningarichexperience.IgottheopportunitytodoachallengingprojectinLGELECTRONIC(INDIA)Theprojectistheimportantpartofourstudyandgivesusarealpracticalexposuretothecorporateworldanditisalmostimpossibletodothesamewithouttheguidanceofpeoplesinandaroundus.SimilarlywhiledoingthetopicMarketSurveyonLGconsumerdurablesasadissertationtraineeItookmanymyprojectsinhelp.
ItgivesmeimmensepleasuretoacknowledgeLGELECTRONICSINDIALtd.,whichhasbeenniceenoughtogivemeachancetodomydissertationprojectprovidingmewonderfulsupportthroughoutmytrainingperiodandafterward.
AbhiramPrasadSatapathy
Regd.No.0706275046
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PrakashChandraDashB.I.M.I.T,Bhubaneswar
FACULTYGUIDECERTIFICATE
ThisistocertifythatAbhiramPrasadSatapathy,astudentofBhubaneswarInstituteofManagementandInformationTechnology,BhubaneswarpursuinghisMBA(Marketing)hasworkedundermyguidanceandsupervisiononhisWorkentitledMarketSurveyonLGconsumerdurables.Tothebestofmyknowledgethisisanoriginalpieceofwork.
(PrakashChandraDash)FacultyMarketing
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DECLARATION
Iwilltakepleasureindeclaringthatthedissertationprojectworkthatisundertakenbymeisanoriginalandauthenticworkdonebyme.ThisdissertationprojectisbeingsubmittedbymeforthepartialfulfillmentforawardofMasterinBusinessAdministrationfromBhubaneswarInstituteofManagement&InformationTechnologyunderBPUT.
AbhiramPrasadSatapathyRegd.No.0706275046
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Executivesummary
IndianConsumerdurablesmarketusedtobedominatedbyfewdomesticplayerslikegodrejVoltasallwynandkalvinater.ButpostliberalizationmuchforeigncompanyhaveenteredintoIndianmarketdethroningtheIndianplayeranddominatingIndianmarketthemajorcategoriesinthemarketCTV,REFRIGRATOR,AIRCONDTIONERSANDWASHINGMACHINE
IndiabeingthesecondlargestgrowingeconomywithhugeconsumerclasshasresultedinconsumerdurablesasthefastestgrowingindustriesinIndiaLG,SAMSUNGthetwoKoreancompanieshasbeenmaintainingtheleadintheindustrieswithLGbeingleaderinalmostallthecategories.
Theruralmarketisgrowingfasterthantheurbanmarket,althoughthepenetrationlevelismuchlower.TheCTVsegmentisexpectedtothelargestcontributingsegmenttot
heoverallgrowththeindustry.Therisingincomelevelsdouble-incomefamiliesandconsumerawarenessarethemaingrowthdriversoftheindustries.
ConsumerdurablesmajorLGElectronicsIndiaPvtLtd(LGEIL)willinvestnearlyRs500croreinIndiathisyearinresearchanddevelopment,brand-buildingandothermarketinginitiatives.
Thecompany,havingaturnoverofRs9,500croreandmarketshareof26percent,is
investingRs360croreonbrand-buildingandothermarketinginitiativesandaroundRs140croreonresearchanddevelopment,besideslaunchingnewplatformsininformationtechnologyandrelatedareas,
LGsinnovative211campaigntoprovidequalityafter-salesservice,willalsobeexpandedfromtheexisting22to40citiesbynextmonth,Thecampaign,forwhichITinfrastructurehasbeensetup,includesthecompanysresponsetocustomercomplaintwithintwohours.Thefixingtimeforcomplaintsvariesfromonehourtoamaximumof
24hours.
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Scopeofproject
ThisprojectgivesmegreatexposuretotheconsumerdurablemarketbecauseitincludesproductknowledgeandthefiledjobinwhichIhavevisitedthestorecomesundertheregionofPune.DuringthisprojectIalsotookpartintheexhibitionofLGwhichheldforthepurposebrandingandawarenessofLGproduct.Thisprojecthelpsmetoknowthemarketpractically.MyjobwasduringthisprojecttoseethemarketshareandalsothedisplayshareoftheLGproductinthestore.LGalwaysinsistthe50%displayshareofLGproductbecauseLGbelievesthatJODIKHTAHAIWOBIKTAHAI.
Keyfindings:
1.BycalculatingthedisplaysharewefoundthatinmostofstoreLGhas50%displaysharealmostallcategories.2.Bytheactualmonthlysaleofparticularstorewecametoknowthecapacityo
fthestoreandhowmuchproductcantheysale.3.IthelpsustoknowthatweatherdealeriscapableofbeingadirectdealerofLGornotanditalsohelpstofindoutthenewdealerwhoarecapableofbeingthedealerofLG.4.Wealsocametoknowwhilevisitingtheshopsthattherewasbigproblemofaftersaleservice.5.
ManydealerswerefacingtheproblemofaftersaleservicebecausethereisnofollowupcallsfromLG.6.Democallsalsonotdoneproperly.
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INTRODUCTION
BeforetheliberalizationoftheIndianeconomy,onlyafewcompanieslikeKelvinator,Godrej,Allwyn,andVoltaswerethemajorplayersintheconsumerdurablesmarket,accountingfornolessthan90%ofthemarket.Then,aftertheliberalization,foreignplayerslikeLG,Sony,Samsung,Whirlpool,Daewoo,andAiwacameintothepicture.Today,theseplayerscontrolthemajorshareoftheconsumerdurablesmarket.
Consumerdurablesmarketisexpectedtogrowat10-15%in2007-2008.Itisgrowingveryfastbecauseofriseinlivingstandards,easyaccesstoconsumerfinance,andwiderangeofchoice,asmanyforeignplayersareenteringinthemarket
Withtheincreaseinincomelevels,easyavailabilityoffinance,increaseinconsumerawareness,andintroductionofnewmodels,thedemandforconsumerdurableshasincreasedsignificantly.Productslikewashingmachines,airconditioners,microwave
ovens,colortelevisions(CTVs)arenolongerconsideredluxuryitems.However,therearestillveryfewplayersincategorieslikevacuumcleaners,anddishwashers
ConsumerdurablessectorischaracterizedbytheemergenceofMNCs,exchangeoffers,discounts,andintensecompetition.ThemarketshareofMNCsinconsumerdurablessectoris65%.MNC'smajortargetisthegrowingmiddleclassofIndia.MNCsoffersuperiortechnologytothe
ConsumerswhereastheIndiancompaniescompeteonthebasisoffirmgraspofthe
localmarket,theirwell-acknowledgedbrands,andholdoverwidedistributionnetwork.However,thepenetrationleveloftheconsumerdurablesisstilllowinIndia.
Classificationofconsumerdurablessector
1.Consumerelectronicincludevcd/dvd,hometheatre,musicplayer,colortelevision(CTVs),cameras,camcorders,portableaudio,Hi-Fi,etc
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2.Whitegoodsincludedishwashers,airconditioners,heaters,washingmachines,refrigerators,vacuumcleaners,kitchenappliances,non-kitchenappliances,microwaves,built-inappliances,Tumbledryer,personalcareproductetc.3.Mouldedluggageincludeplastics4.Clocksandwatches5.MobilephonesScope
1.Intermofpurchasingpowerparity(ppp),Indiaisthe4thlargesteconomyintheworldandovertakeJapaninthenearfuturebecomethe3rdlargest.2.Indianconsumerdurablemarketisexpectedtoreach$400billionbyon20103.Indiahastheyoungestpopulationamongstthemajorcountries.Therearelotofpeopleinthedifferentincomecategoriesnearlythetwothirdpopulationisbelowtheageof35andnearly50%isbelow25.4.Thereare56millionpeopleinmiddleclass,whoareearningus$4,400-US$21,800a
year.Andthereare6millionrichhouseholdinIndia.5.Theupper-middleandhigh-incomehouseholdinurbanareasareexpectedtogrewto38.2millionin2007asagainst14.6millionin2000.Opportunity
1.InIndiathepenetrationlevelofwhitegoodsislowerascomparedtootherdevelopingcountries.2.Unexploitedruralmarket.3.Rapidurbanization.4.Increaseinincomelevel,i.e.increaseinpurchasingpowerofconsumers.5.Easyavailabilityoffinance.
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Threats
Higherimportdutiesonrowmaterials.CheapimportsfromSingapore,ChinaandfromotherAsiancountries.
Brandsinconsumerelectronicsector
MNCsNATIONALREGIONALLG)SAMSUNG)KOREAONIDABUSHHYUNDAI)VIDEOCONCROWNBPLSALORATCL)CHINAGODREJT-SERIESHAIER)VOLTASWESTONIFBBELTAKPHILIPS)HOLLANDOSKARPANASONIC)SHARP)HITACHI)SANSUI)JAPANAKAI)AIWA
WHIRLPOOL)ELECTROLUX
TODAYConsumerdurablessectorischaracterizedbytheemergenceofMNCs,exchangeoffers,discounts,andintensecompetition.ThemarketshareofMNCsinconsumerdurablessectoris65%.MNC'smajortargetisthegrowingmiddleclassofIndia.MNCsoffersuperiortechnologytothe
LG,SAMSUNGthetwoKoreancompanieshasbeenmaintainingtheleadintheindustrieswithLGbeingleaderinalmostallthecategories.
Thecompany,havingaturnoverofRs9,500croreandmarketshareof26percent,isinvestingRs360croreonbrand-buildingandothermarketinginitiativesandaroundRs
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140croreonresearchanddevelopment,besideslaunchingnewplatformsininformationtechnologyandrelatedareas,
LGElectronicsisoneoftheleadingcompaniesinthefieldofelectronicswithaglobalpresenceinmanycountries..Beforebriefing,Ihavedividedtheintroductionpartintothreemainsubparts.
1.LGGlobal2.LGIndia3.LGPuneHistoryofcompany
Thecompanywasoriginallyestablishedin1958asGoldStar,producingradios,TVs,refrigerators,washingmachines,andairconditioners.
TheLGGroupwasamergeroftwoKoreancompanies,LuckyandGoldStar,fromwhichtheabbreviationofLGwasderived.Thecurrent"Life'sgood"sloganisabackronym.
BeforethecorporateNamechangetoLG,householdproductsweresoldundertheBrandnameofLucky,whileelectronicproductsweresoldunderthebrandnameofGoldStar.TheGoldStarbrandisstillperceivedasadiscountbrand.
In1995,GoldStarwasrenamedLGElectronics,andacquiredZenithElectronicsoftheUnitedStates.
GlobalOperation
LGElectronicsisplayinganactiveroleintheworldmarketwithitsassertive
globalbusinesspolicy.Asaresult,LGElectronicscontrols110localsubsidiariesintheworldwitharound82,000executiveandemployees.
LGGroup
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1.LG.PhilipsLCD2.LGChemical3.LGTelecom4.LGPowercom5.LGTwins6.LGDacomBusinessareasandmainproducts
Mobilecommunications
(a)CDMAHandsets,(b)GSMHandsets,(c)3GHandsets,(d)CellularPhonesDigitalappliance
a)AirConditioners,b)Refrigerators,c)MicrowaveOvens,d)WashingMachines,e)VacuumCleaners,f)HomeNet,g)CompressorsforAirConditionersandRefrigerators
Digitaldisplay
a)PlasmaTVs,
b)LCDTVs,
c)MicroDisplayPanelTVs,
d)Monitors,
e)PDPModules,
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f)OLEDPanels,g)USBMemory,h)FlatPanelComputerMonitors
Digitalmedia
a)HomeTheaterSystems,b)DVDRecorders,c)SuperMultiDVDRewriters,d)CDRW,e)NotebookPCs,f)DesktopPCs,g)PDAs,h)PDAPhones,i)MP3Players,j)NewKaraokeSystems,k)CarInfotainment
LGBRANDIDENTITY:
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ThebrandofLGisdelightfullysmart.LGstrivestoenhancethecustomerslifeandlifestylewithintelligentfeatures,institutivefunctionalityandexceptionalperformance.
Thebrandplatform:
TheLGbrandiscomposedoffourbasicelements
1.Value2.Promise3.Benefits4.PersonalityTheBrandscoreValuethatneverchanges.
a.Trust,b.Innovation,c.Peopled.PassionThebenefitsthatareconsistentlydeliveredtothecustomerincludesReliableproductsSimpledesign
EaseofuseExtraordinaryExperience
PersonalitydescribesthehumancharacteristicthatareexpressedtothecustomerthroughTrustworthy,ConsideratePractical,Friendly
TheInternalCultureofLG:
LGpracticesfourcultures
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1.LearningCulture2.BoundarylessEnvironment3.ACarrier4.GrowthAccordingtoLG,theLearningCulturecontinuouslyhelpstheemployeetolearnmoreandmoretodevelopthehabitofcontinuouslearning.
BoundarylessEnvironmentmeansthatthereisnodifferencebetweenthelevelsofemployees.Thereistransparencybetweentheworkandmutualunderstandingbetweenalltheemployees.
AcarrierishighlygrowinginLGandonewhoistheemployeecandeveloptheircarrierlargely.Anewcomerwillfeelfullycomfortableinthecompanyandforanewcomerthecompanyisveryhelpfulintheoverallgrowthofpersonality.
GrowthinLGisveryhighforthosewhoareinthecompanyandforthosewhowanttojoininLG.ThecompanyisgrowingwithfastinnovationandtheBLUEOceanstrat
egyisoneoftheexamplesofgrowth.
Mission
ThemissionofLGistoprovidethecustomerswithutmostsatisfactionthroughleadership.
Thefundamentalpolicyofdevelopmentistosecureproductleadershipthatthe
Customersmayhavetheutmostsatisfaction.
ProductLeadership
Wearefocusingonsixdevelopmentareastobecometheproductleader.
1.NewMachine2.Reliability3.ConventionalInstallation4.EnvironmentFriendlyProduct
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5.LowNoise&Vibration6.EnergySavingQualityInnovation
Thepolicyofqualityassuranceistoprovidecustomerswithutmostsatisfactionbysupplyingzerodefects.
LGproceedsinahierarchalmanner.ItisnamedasLGWAY.
Fromtoptobottom:
No.1LGistheVISIONJeong-DOManagementisLGsuniqueapplicationtoethics.LGwillsucceedthroughfairmanagementpracticesandconstantlydevelopingourbusinessskill.a)Honestwithourcustomerb)Providinggreatvaluestocustomerthroughconstantinnovation&anddevelopment.
c)Equalopportunitiesd)EqualTreatmentManagementPrinciple-Creatingvalueforcustomer
CodeofconductofLG:
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1.Responsibilityandobligationstocustomers:RespectforCustomersCreatingValueProvidingValue2Faircompetition
PursuitofFreeCompetitionCompliancewithLawsandRegulations3FairTransaction:
EqualOpportunityFairTransactionProcedureSupportandAidforBusinessPartners4BasicEthicsforEmployees
BasicEthicsCompletionofDutySelfDevelopmentFairnessinPerformanceAvoidanceofconflictwithcompanyinterest5CorporateResponsibilitiestoemployees
Respectforhumandignity
FairTreatmentPromotingCreativity6Responsibilitiestosocietyandcountry
RationalBusinessDevelopmentProtectionofstockholderinterestContributiontosocialdevelopment
EnvironmentalConservationLGINDIA:
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LGElectronicsIndiaPvt.Ltd.,awhollyownedsubsidiaryofLGElectronics,SouthKoreawasestablishedinJanuary1997afterclearancefromtheForeignInvestmentPromotionBoard(FIPB).LGsetupastate-of-theartmanufacturingfacilityatGreaterNoida,nearDelhi,in1998,withaninvestmentofRs500Crores.
LGcorporateofficeislocatedatPlotno.51,UdyogVihar,KasnaRoad,GreaterNoida,India.
ThisfacilitymanufacturedColorTelevisions,WashingMachines,Air-ConditionersandMicrowaveOvens.
''Companyissettingupachainofexclusivepremiumshowrooms.LGplanstolaunch60premiumBrandShoppesbytheendofthefirstquarterofthisyear.Atpresent,LGhasatotalof83LGstoresacrossthecountry,ofwhich45areshoppesand38areexclusivestores.Brandshoppeswillbeplacedinthepremiumsegmentandthetargetaudie
ncewillcomprisebuyersinterestedinpremiumandhighendproducts.
LGBrandShoppegoesbeyondtheconceptofanormalexclusivestorebyhavingamoreinteractiveenvironmentandadditionallifestyleorientationondisplaysothatthecustomercanactuallyexperiencetheLGproductsinhisorherownhomesettings.
LGElectronicsIndiaLtd(LGEIL),consumerdurablesleaderwith27%marketshare,isplanningabrandnewimage.ToattractinspirationalandyoungconsumersacrossIndia,
companywillrolloutanewmarketingstrategy.TheexercisewillcostthecompanyRs360crore.
LGElectronicsIndiaisthefastestgrowingcompanyintheconsumerelectronics,homeappliances,andcomputerperipheralsindustrytoday.
LGElectronicsiscontinuallyproviding,superiortechnologyproducts&valueformoneytomorethan50lakhhouseholdsinIndia.LGEILiscelebratingthe11thanniversarythisyear.
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LGSoftIndiatheinnovationwingofLGElectronicsinBangaloreisLGElectronics'largestR&DcentreoutsideKorea.WeatLGSIfocusonnichetechnologyareassuchasmobileapplicationdevelopment,digitalvideobroadcastandbiometricssoftwareandsupportLGElectronicswithourexpertise.Motivatedbyapassionfortechnology,astrongworkcultureandloyaltytotheorganization,wearedeterminedtoseeLGbecomeoneofthetopthreebrandsglobally.
Prominentconsumerelectroniccompany,LGElectronicsInc.hassaidthatitexpectsthesaleofitsproductsinIndiatoupby15percentin2008.MoonBumShin,managingdirectorofLGElectronicsIndiahassaidthatthecompanyhasearmarked4.8billionrupeesforinvestmentpurposeinIndiathisyear.Thesaidmoneywillbeusedtomarketaswellasmanufacturenewproducts.LGElectronics,whichisoriginallyaSouthKoreanCompanywithbranchinIndia,
informedthatitssalesofGSMmobilephones,colortelevisions,airconditionersandotherhouseholdgoodsintheIndianmarketwastothetuneof95billionrupees($2.4billion)in2007.AsperShin'sestimate,thesalesin2008wouldbearound110billionrupees.Inordertoachieveitstarget,ShinsaidLGElectronicswillconcentrateoncateringtothehigh-endconsumermarketwhichwillhelpboostsalesthisyear.Indiachurnsoutsix(6)percentofLGElectronicsglobalrevenuesof$42billion.TheIndianbranchofLGexportsto40countries.
Indiachallenges
ThechallengesfacedbyLGwhenenteredinIndianmarket
1.LowbrandawarenessaboutLGinIndia.2.OneofthelastMNCsenteredinIndia(Samsung,Panasonicenteredin1995inIndia).3.Highimportduty4.CompititionfromlocalmarketplayersandotherMNCsinconsumerdurablesegment.
5.PricesensitivenessoftheIndianconsumer
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LGEIovercomesthesechallengestoemergeasInnovativemarketingstrategy
1.Launchnewtechnologiesinconsumerelectronicandhomeappliances.2.LGwasthefirstbrandtoenterincricketinbigwayaway,bysponsoringthe1999worldcupfolloweditupin2003aswell.3.LGbroughtinfourcaptainsoftheIndiancricketteamtoendorseitsproducts.LGinvestedmorethenUS$8milliononadvertisingandmarketinginthissport.4.LGhasdifferentiateditsproductusingtechnologyandhealthbenefits.CTVhasGoldeneyetechnologyAirconditionerhasHealthairsystemandmicrowaveovenshavetheHealthwavesystem.Localandefficientmanufacturingtoreducethecost
ToovercomehighimportdutiesLGmanufacturesTVrefrigeratorinIndiaatmanufacturingfacilityatNoidaandPune.LGEIhadalreadycommissionedcontractmanufacturingatMohaliKolkataandBhopalforCTVs.ThishashelpedLGEItoreducecost.LGEIimplementingtheDigitalmanufacturingsystem(DMS)asthecostcutting
innovationthissystemisfollow-uptothesixsigmaexerciseLGEIhadinitiateearlier.
R&Dpotential
LGhastheresearchanddevelopmentfacilitiesinBangaloreandPune.BoththeunitcarryoutR&DdepartmentforthedomesticaswellastheparentcompanyitalsodosecustomizeR&Dforthespecificcountriestowhichitexportproduct.
Regionalchannelandwidedistributionnetwork
1.
LGhasadoptedtheregionaldistributionchannelinIndia.Allthedistributersworkdirectlywiththecompany.ThishasresultedinquickerrotationofthestockandbetterpenetrationintoB,C,D,classmarket.2.LGalsofollowsthestockrotationpolicyratherthendumpingstockonchannelpartners.
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Productlocalization:
1.ProductlocalizationisthekeystrategyusedbytheLG2.LGcameoutwithHindiandregionallanguagemenusonitsTVs.3.Introducedthelow-pricedCineplusandsampoomafortheruralmarket.4.LGwasthefirstbrandtointroducegaminginTVsincontinuationsofitsassociationwithcricketLGintroducecricketgameinCTVsMAJORKEYSUCCESSFACTORS
1.Innovativemarketing-LGwasthefirstbrandtoentercricketinabigway,bysponsoringthe1999WorldCupandfolloweditupin2003aswell.2.Localandefficientmanufacturingtoreducecost-Toovercomehighimportduties,LGmanufacturesPCmonitorsandrefrigeratorsinIndiaatitsmanufacturingfacilityatNoida,Delhi.3.CommissionedcontractmanufacturingatMohali,KolkataandBhopalforCTVs.4.Productlocalization-ProductlocalizationisakeystrategyusedbyLG.Itc
ameoutwithHindiandregionallanguagemenusonitsTV.5.Regionaldistributionmodel-ThishasresultedinquickerrotationofstocksandbetterpenetrationintotheB,CandDclassmarkets.6.LeveragingIndiasITadvantage-LGElectronicshasawardedacontracttodevelopITsolutionstoLGSoftIndia(LGSI).TheprojectinvolvesdevelopmentandsupportforERP,SCM,CRMandIT-enabledservicesforLG.
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Strategiesadoptedbytheorganization
LGfollows10commandmentswhichareasfollows.
1.Fosterworkingenvironment-5SEnvironment2.Fastexecutioniskeytosuccess3.Transparentandfastcommunication-opencommunication4.Updatemarket-knowledgeDemographics5.WinWinrelationshipwiththetradepartners6.Customeristheking7.EvenBillingRoadtoachsupplierA8.Beintouchwiththemarket(70%Market,30%Office).9.PlanandExecuteannualmarketingCalendar-Timetomarket10.Displayshareof50%-toget50%consumershare.LGmarketshareofconsumerappliancesandconsumerelectronic:
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LGpositionofCTVinvariousstatesinIndia
LGpositionofACinvariousStatesinIndia
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LGpositionofAudio&HomeTheaterinvariousinIndia
LGpositionofDVDinvariousinIndia
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rupees($2.4billion)in2007.AsperShin'sestimate,thesalesin2008wouldbearound110billionrupees.
Inordertoachieveitstarget,ShinsaidLGElectronicswillconcentrateoncateringtothehigh-endconsumermarketwhichwillhelpboostsalesthisyear.Indiachurnsoutsix(6)percentofLGElectronicsglobalrevenuesof$42billion.TheIndianbranchofLGexportsto40countries.Shinremarkedthatthecompanywastargetinganincreaseofexportsto$300millionin2008from$230millionin2007.
.Thekeystrategiesbeingimplementedincludeincreasingthenumberofitsregionalofficesfromsixtoeight.LGhassplititssouthernregionalofficeintotwo,onecomprisingthestatesofTamilNaduandKeralaandtheotherconsistingofAndhraPradeshandKarnataka.Inaddition,ithassplitoneofitsnorthernregionalofficesbymakingUttarPradeshaseparateregionafterspinningitoutfromDelhiNCR.Theotherfourr
egionalofficestakecareofEast,GujaratandMadhyaPradesh,Maharashtra&GoaandPunjab,Haryana&Rajasthanrespectively.
Inthecomingyear,LGisalsorepositioningitsmarketingspends,resultinginasignificantincreaseinitsmassmediaexpenditureforbetterbrandvisibility.LGhadamarketingbudgetofRs320crorein2007witha60:40splitinfavorofbelow-the-lineactivities.Nextyear,thecompanyplanstoincreasetheshareofmassmediaevenasoverall
marketingspendswouldberaisedbyjustabout10-15%.
DistributionandMarketing
Thecompanyhasnumberofdealersandwarehouses.TheyhaveLGexclusiveshopee.Forthemarketingoftheproductsanumberofactivitiesarefollowed
1.Exhibitionsareconductedfromtimetotime.2.Societyandcollegeactivitiesareconducted.3.Hoarding,Posters,bannersareusedsoastograbtheattentionofthecostumers.4.Daytodayadvertisementinleadingnewspaper.
5.Discountatfestivaltime.
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6.Fordealerrelationshiptheyarrangedealermetingatseveraltimeintheyear7.LGdividedealeringoldsilveretc.categorytoknowtheperformanceofthedealers.8.TheyhavetheirsalespersonsatvarioussubdealerstoreandatmordenttradestoreforparticularlyforthepromotionoftheLGproduct.9.LGalsousestheradioFMforthepromotionactivities.10.Alsoprovidecaponandscratchcardforfestiveseason.CUSTOMERSERVICE
ThebestandthebiggestinternationalbrandsarehereinIndiabuttheironyifitall:whereistheafter-sales-service?Sointegraltoabrand,socriticalforitssuccessandsotakenforgrantedindevelopedmarkets!InIndia,aftersalesserviceis,forwantofabetterdescription,thepits.Sowhatsstoppingthebestcompaniesfrompullingoutallthestopswhenitcomestoprovidingthebestservice?Docustomersexpectfortoomuch?OrisitthatinIndiatheydontreallycare.BrandEquityfannedouttoMNCaswellasIndian
consumerdurablecompanies,stockiestanddealers,analystsandmarketresearcherstogetafeelofwhatsreallykeepingaftersalesfrombeingusedasacuttingedgemarketingtoolinpushingproductsacrosscategories.
Customerssupportfollowingthepurchaseofaproductorservice.Insomecases,after-salesservicecanbealmostasimportantastheinitialpurchase.Themanufacturer,retailer,orserviceproviderdetermineswhatisincludedinanywarranty(orguarantee)package.Thiswillincludethedurationofthewarrantytraditionallyoneyearfromthed
ateofpurchase,butincreasinglytwoormoreyearsmaintenanceand/orreplacementpolicy,itemsincluded/excluded,laborcosts,andspeedofresponse.Inthecaseofaserviceprovider,after-salesservicemightincludeadditionaltrainingorhelpdeskavailability.Ofequalimportanceisthecustomer'sperceptionofthedegreeofwillingnesswithwhichasupplierdealswithaquestionorcomplaint,speedofresponse,andactiontaken.
LGalsohadabigproblemofaftersaleserviceinIndia.DuringmyprojectIal
socametoknowthataftersaleservicebecomesthebigissueinPuneregion.Customersaswellas
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dealerwerefacingtheproblemofaftersaleservice.BecauseofthisproblemmanydealerinPuneregionwerenotreadytosaleLGproduct.Soitbecomesthebigissue.
ButLGhastakensomesolidstepstowardsimprovingcustomersperceptionandexperienceofaftersalesservice.Becauseitveryimportantincompetitivemarkettoprovidethebestservice.
LGElectronicshassignedamemorandumofunderstandingwith23IndustrialTrainingInstitutestostrengthenitsaftersalesserviceinIndia.
Thecompanyaimstorecruit10,000peoplebytheendofthisyearasapartofitsbrandingstrategytofocusonserviceandmoveawayfromdiscounting.
LGElectronicshasidentifiedeightstateswithhighaftersalesservicecallratestoinkthedealswiththeITI.YVVerma,directorHRandmanagementsystem,LGElectronicssaid,"TheCompanywastryingtofindasolutionforeffectiveaftersalesservicesincelasttwo
years.Thereisahugeneedoftrainedmanpowerfortheaftersalesservicetoalignwiththecompany'sexpansionandfocusontheGSMmobilesandthepersonalcomputersegments."
1.IntheinitialphasethecompanyhasenteredintoagreementswithITIsinthestateslikeMaharashtra,Gujarat,Delhi,Punjab,Assam,andKarnatakaandisinthelastlegofsigningwithUttarPradesh.2.LGElectronics,with1200servicecenters,hasalreadyrecruited300studentsand
planstobeefupthenumberto10,000bytheyear-end.3."Thecompanyhasofferedascholarshiptotheselectedstudentsforthelastsixmonthsoftheirtrainingprogramme,"4.ThecompanywillinvestRs8crore(Rs80million)inemployeedevelopmentprogrammethisyearwithanaimtoattaina8percentattritionrate.
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5.ThecompanymovedawayfromthediscountingstrategysincelastyearandisputtingthrustonthequalityandserviceinitsbrandcommunicationtopositionLGasapremiumconsumerelectronicsbrand.6.Atthetop,theServiceDivisioninKoreareportstotheGlobalCMO.(asmentionedinDermotspublicinterviewinETonWednesday).ThisshowscommitmentthatServicemustbemadeintoamarketingdifferentiator,andleveragedthus.7.LGhasthewidestservicenetworkacrossthecountry;someestimatesputitatasignificantmultipleofservice-infrastructurefromournearestcompetitor.Whilethesalesizemayalsobeanicemultiplefromnearest,itshowsthecompanyisreadytoputourmoneywhereourmouthis.8.Thecompanyhasintroduceda211service-onceyouregisteryourcomplaint,wewillcallyoubackin2hours(hence2),setupanappointmentforthenextconvenientdayforyou(hencethefirst1),andshowupinthepromised1-hourslot(hencethesecond1).Ifthenextconvenientdayforyouisthenextday,thatsgreattoo.Itsadisruptiveactioninanindustry(includingLG)havingtraditionallys
hiedawayfromitsserviceresponsibilities,andthusnotleveraginganymileagefromit.9.Thecompanyispromoting211throughATL,probablythefirsttimeafter-salesserviceisbeingcommunicatedinthisfashionbyanyproductcompany.YoumayhaveseentheTVcommercialorheardtheradioadvertorseenthenewspaperadorin-shopposters,bothofwhichrevolvearoundpromptresponse.10.ThefirstLG-ownedservicecentreopenedinGurgaon.(ServiceinIndiagenerallyworksthroughauthorizedservicecenters,inLGscasetheyworkexclusivelyforLG.)Acompany-ownedservicecentretriesthatmuchharder,knowsthingsbetter,
andcanevencontributeasarevenuecenter.
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Objectiveoftheproject
Primaryobjective
.ThemainobjectiveoffiledsurveyduringtheprojectwastofindoutthemarketshareoftheLGandalsocalculatethedisplayshare.
.FindoutthepositionaldealerwhocansaletheLGproductinlargevolume.
.Themainobjectiveofresearchwastoidentifypotentialdealeranddevelopmentthesedealer.SoLGcanmakethemtheirdirectdealer.
.ThiswilleasethedependenceonthesomebigdealerlikeMaharashtraandMahaveerelectronics.
.Findouttheproblemfacedbythedealerinsalesandthedistribution.
Secondaryobjective
.TheObjectivewastofindoutthathowfartheexhibitionsarehelpfulinbranding,
.Whilepurchasingtheconsumerdurableswhichparameterismostimportantfortheconsumer?
.Dotheconsumerspreferthefinancialfacilityforbuyingconsumerdurable?.Howfrequentlyconsumerschangetheconsumerdurable?.Toenhancestheknowledgeofconsumerdurablemarket..ToincreasestheknowledgeconsumerdurableproductofLG.
.Toenhancestheknowledgeaboutthemarketingandbrandingactivity.
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ResearchMethodology:
Researchmethodologyisconsideredasthenerveoftheproject.Withoutaproperwell-organizedresearchplan,itisimpossibletocompletetheprojectandreachtoanyconclusion.Theprojectwasbasedonthesurveyplan.Themainobjectiveofsurveywastocollectappropriatedata,whichworkasabasefordrawingconclusionandgettingresult.
Therefore,researchmethodologyisthewaytosystematicallysolvetheresearchproblem.Researchmethodologynotonlytalksofthemethodsbutalsologicbehindthemethodsusedinthecontextofaresearchstudyanditexplainswhyaparticularmethodhasbeenusedinthepreferenceoftheothermethods
Researchdesign:
Researchdesignisimportantprimarilybecauseoftheincreasedcomplexityinthemarket
aswellasmarketingapproachesavailabletotheresearchers.Infact,itisthekeytotheevolutionofsuccessfulmarketingstrategiesandprogrammers.Itisanimportanttooltostudybuyersbehavior,consumptionpattern,brandloyalty,andfocusmarketchanges.Aresearchdesignspecifiesthemethodsandproceduresforconductingaparticularstudy.AccordingtoKerlinger,ResearchDesignisaplan,conceptualstructure,andstrategyofinvestigationconceivedastoobtainanswerstoresearchquestionsandtocontrolvariance.
Typesofresearchis:
DescriptiveResearchThetypeofresearchadoptedforstudyisdescriptive.Descriptivestudiesareundertakeninmanycircumstanceswhentheresearchesisinterestedtoknowthecharacteristicofcertaingroupsuchasage,sex,educationlevel,occupationorincome.Adescriptivestudymaybenecessaryincaseswhenaresearcherisinterestedinknowingtheproportionofpeopleinagivenpopulationwhohaveinparticularmanner,makingprojectionsofacertainthing,or
determiningtherelationshipbetweentwoormorevariables.Theobjectiveofsuchstudyistoanswerthewho,what,when,whereandhowofthesubjectunderinvestigation.There
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isageneralfeelingthatdescriptivestudiesarefactualandverysimple.Thisisnotnecessarilytrue.Descriptivestudycanbecomplex,demandingahighdegreeofscientificskillonpartoftheresearcher.
Descriptivestudiesarewellstructured.Anexploratorystudyneedstobeflexibleinitsapproach,butadescriptivestudyincontrasttendstoberigidanditsapproachcannotbechangedeverynowandthen.Itisthereforenecessary,theresearchergivesufficientthoughttoframingresearch.
Questionsanddecidingthetypesofdatatobecollectedandtheproceduretobeusedinthispurpose.Descriptivestudiescanbedividedintotwobroadcategories:CrossSectionalandLongitudinalSectional.Acrosssectionalstudyisconcernedwithasampleofelementsfromagivenpopulation.Thus,itmaydealwithhousehold,dealers,retailstores,orotherentities.Dataonanumberofcharacteristicsfromsampleelementsare
collectedandanalyzed.Crosssectionalstudiesareoftwotypes:FieldstudyandSurvey.Althoughthedistinctionbetweenthemisnotclear-cut,therearesomepracticaldifferences,whichneeddifferenttechniquesandskills.Fieldstudiesareex-post-factorscientificinquiriesthataimatfindingtherelationsandinterrelationsamongvariablesinarealsetting.Suchstudiesaredoneinlivesituationslikecommunities,schools,factories,andorganizations.
Anothertypeofcrosssectionalstudyissurveyresult,whichhasbeentakenby
me.Amajorstrengthofsurveyresearchisitswidescope.Detailinformationcanbeobtainedfromasampleoflargepopulation.Besides;itiseconomicalasmoreinformationcanbecollectedperunitofcost.Inaddition,itisobviousthatasamplesurveyneedslesstimethanacensusinquiry.Descriptiveresearchincludessurveyandfactfindingenquiriesofdifferentkindsofthemajorpurpose.Descriptiveresearchisdescriptionofthestateofaffairs,asitexistsatpresent.Themaincharacteristicofthismethodisthattheresearcher
hasnocontroloverthevariables;hecanonlyreportwhathashappenedorwhatishappening.Themethodsofresearchutilizedindescriptiveresearcharesurveymethodsofallkindsincludingcomparativeandcorelationalmethods.Thereasonforusingsuch
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needstobeflexileinitsapproach,butadescriptivestudyincontrasttendstoberigidanditsapproachcannotbechangedevernowandthen.
Datacollectionmethods:
Aftertheresearchproblem,wehavetoidentifyandselectwhichtypeofdataistoresearch.Atthisstage;wehavetoorganizeafieldsurveytocollectthedata.Oneoftheimportanttoolsforconductingmarketresearchistheavailabilityofnecessaryandusefuldata.
Primarydata:Forprimarydatacollection,wehavetoplanthefollowingfourimportantaspects.
.Sampling
.ResearchInstrument
.SecondaryData-TheCompanysprofile,journalsandvariousliteraturestudies
areimportantsourcesofsecondarydata.
.Dataanalysisandinterpretation
1.Questionnaires2.PiechartandBarchartQuestionnaires:
Thisisthemostpopulartoolforthedatacollection.Aquestionnairecontainsquestionthattheresearcherwishestoaskhisrespondentswhichisalwaysguidedbytheobjectiveofthesurvey.
Piechart:
Thisisveryusefuldiagramtorepresentdata,whicharedividedintoanumberofcategories.Thisdiagramconsistsofacircleofdividedintoanumberofsectors,whichareproportionaltothevaluestheyrepresent.Thetotalvalueisrepresentedbythe
fullcreate.Thediagrambarchartcanmakecomparisonamongthevariouscomponentsorbetweenapartandawholeofdata.
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Barchart:
Thisisanotherwayofrepresentingdatagraphically.Asthenameimplies,itconsistofanumberofwhisperedbar,whichoriginatefromacommonbaselineandareequalwidths.Thelengthsofthebardsareproportionaltothevaluetheyrepresent.
Preparationofreport:
Thereportwasbasedontheanalysisandpresentedwiththefindingsandsuggestions.Thesampleofthequestionnairesisattachedwiththereportitself.
SamplingMethodology:
Detailsofthesamplingmethodology,Ihavemadequestionnaire.TheoneismadefortheCustomer.
No.ofquestionsinquestionnairesforcustomer:07No.ofquestionrelatedtoLGproduct:03No.ofpeoplemetduringtheresearch:200
No.ofrespondentsduringtheresearch:50SampleunitProfessionals,Businessman,Employees,Housewife,Workingwomen,Students
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Analysis:Q1.HaveyoupurchasedanyconsumerdurableduringExhibitions?
.Yes.No
Inferences
1.65%ofCustomerhavenotpurchasedanyconsumerdurablefromexhibitions.2.Only35%peoplehavepurchased.3.Itshowsthatconsumersarecomingintheexhibitionforknowledgeofproductandalsotheywanttoknowthatweatherthereisactualpricedifferenceinexhibitionandshopornot.4.
Consumeralsowanttocomparetothedifferentbrandwhichareavailableintheexhibition.5.Soexhibitionsaremoreusefultoincreasesbrandawareness.6.Peoplearelessinterestedtopurchaseproductfromtheexhibition.
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Q.2Whilepurchasingconsumerdurablewhichparameterinfluencesyou?
.Price.Productfeature.Brand.Service.Durability
Inference
1.30%ofcustomergivesimportancetoprice.SoitshowsthatIndianconsumersareverypricesensitive.Theygivemoreimportancetopriceoverthebrand.2.26%giveimportancetobrand.SopriceandBrandmatteralotsforthecostumers
.Andtheyarealsowantbestbrandinbestprice.3.19%toproductfeatureService16%anddurability9%Serviceisalsoabigfactorforthecustomertheyarelessinterestedinthedurability.
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Q3.Fromwhereyoupreferbuyingconsumerdurables
.Exhibitions.Co.shoppee.Showroom
Inference:
1.Amajorityofcustomersprefertobuyfromshowrooms.VerylesspropositionofcustomersbuysfromExhibitions.2.47%customersareprefertobyfromtheshowroomsbecausetheshowroomsaremoreconvenienttocustomerstheyalsothinkthattheseshopsgivemorediscounts.3.Peoplearelessinterestedtobuyfromtheexhibitiontheyonlyvisittheexhibitionforpricequotationoftheproductandthecomparisonoftheproduct.
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Q.4.YouprefertobuyfromthesameasyouhavementionedinQ.3becauseoffollowingreasons
.AttractivePrice.Service.Demonstrations.Offers
Inference
1.Customersbuyfromshowroomsbecauseoftheserviceandconvenience.Thesearetwomainfactors.2.Customersarepreferredtobuyfromtheshowroombecauseoftheythinkthattheseconvenientstoremayprovidegoodaftersellservice.
3.Customeralsothinksthatthereismorechancetobargainandtheycangetmorediscountsintheseshowrooms.4.Pricealsoafactorthatattractthecustomerintheseshowrooms.
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Q.5.Whichconsumerdurableyouhaveandofwhichbrand?
.CTV
.LCD
.PLASMA
.REF
.WM
.MW
.AC
Inference
InCTVsectionmaximumcustomershaveOnida,inLCDSonyistheleader,InplasmaBPListheleader,InRefLGistheleader,MWLGistheleader.InWMtherearecompaniesandinACalso.
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Q.6.Howfrequentlyyouchangeyourconsumerdurables?.1-3years.3-5years.5-10years.Morethan10years
INFERENCE
1.Customersprefertochangeconsumerdurableswithin5-10years.InIndiapeopledonotchangeconsumerdurablefrequently.2.23%customersdonotchangetheirconsumerdurablewithin10year.3.ItrepresentthatIndianconsumerdonotprefertochangetheirconsumerdurablefrequently.
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CUSTOMERSURVEYFINDINGS
1.Secondarysupportsplayanimportantroleinthecustomersmindandcreateawarenessamongthecustomers.ThesecondarysupportincludesDemonstration,Exhibition&EvenSponsors.2.Fromthesurveyitwasfoundoutthatthemajorityofcustomersdontbuyconsumerdurablesfromexhibitions.Theyjustvisittheexhibitionstoseetheco.latestmodel.3.Theywanttobuyfromtheshowroomsorfromco.showrooms.Forthemserviceisimportant.Besideconvenienceandotherfactorsserviceiskeyfactor.4.Alsomajorityofcustomersdonotwantanyfinancingschemeforpurchasingthedurables.5.TherewasheavyrushonweekendssolargenumbersofISDswereappointedthatday.Alsothelivedemocallshelpsinselling.Exchangeoffersalsogeneratesale.6.Customersarealsonowverychoosyinbuyingtheproductanditisimportant
forthecompanytomakeloyalcustomeroftheirbrand.7.InsurveywefoundthatLGhascapturedmaximummarketshareineverycategory.LGdominatesCTV,LCD,andRefrigerator,andWashingmachine,category.8.LGandSamsunghavebottleneckcompetitioninTVandREF.category.9.Theproductiswellawareanditisontopofmindofcustomer.10.Customersarealsonowverychoosyinbuyingtheproductanditisimportantforthecompanytomakeloyalcustomeroftheirbrand.
RECOMMENDATIONSANDSUGGESTIONS
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1.Exhibitionsdonothelptogeneratesomuchsellsbuttheyshouldbeconductedregularly.Thishelpsingeneratingawarenessregardingtheproductincustomerswhichultimatelyhelpsinsales.2.Alsoitishelpsinadvertisingforthenewproducts.LikeinthisexhibitionnewLCDSCARLETwasadvertised.Companyshouldalwaysfocusonservice.3.Displayshareshouldbeincreasedwherethereislessthan50%asLGalsobelievesthatJODIKHTAHAIWOBIKTAHAI.4.Companyshouldtrytoimproveservice.Nodoubtthecompanyproductshavetechnicallyedgeovercompetitorsbutinlongrunitmayhamperthecompanysprofit.5.CompanyshouldconcentratemoreonitsmajordriversLCD,IT,andGSM.Brandingandpromotionsshouldbedoneeffectivelyasitcreatesalonglastingimageinthemindofcustomers.6.Companyshouldalsocatertotheneedsofsubdealersassomeofthesubdealershavepotentialofhighsales.
LIMITATIONS
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Everystudyhascertainlimitations.Inmystudy,alsotherewerecertainlimitations,whichIcouldnotabletosolve.
1.Theresearchwasconductedinaverysmallarea.2.Myresearchworkperiodwitnessthebiggestupsanddownsinproductsaleofdifferentbrands,whichaffectedtheperceptionofthecustomer.Thiswasbiggestdrawbackofmystudy.3.Timefactorwasalsoimportantforme.Ihadonly60daystocompletemyresearch,forwhichafull-fledgedreportwasinsufficientforme.4.Thecustomerfilledthequestionnairemostlyincarelessmanner,soitwasdifficulttomakethemholdfortime.5.Ihadonlyfoundtheupper-middleclassfamilytofillupthequestionnaire,butgenerally,anaveragemiddleclassfamilywasrequiredforthestudy.6.ThesamplesizeisalsoverysmallwhichrepresentmyresearchonconsumerbehaviorMystudyisnotrecognizableinwholeINDIAaswellasoutsideRanchiduetotheabovelimitationsandlessareacoverage.
BIBLIOGRAPHY
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.www.lgindia.com.www.google.com.www.wikipedia.com.Businessworld.Businesstoday.LGmagazine.EconomicstimesNewspaper.TimesofIndia
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