SAMSUNG Project Report

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INTRODUCTION

As rapid socio-economic changes sweep across India, the country is witnessing the

creation of many new markets and a further expansion of the existing ones. India’s

consumer market is riding the crest of the country’s economic boom. The Indian

consumer durables industry has witnessed a considerable change in the past couple of

years. Changing lifestyle with access to disposable incomes, easy finance options and a

surge in advertising has been instrumental in bringing about a sea change in the

consumer behavior pattern. According to a study conducted by FICCI on the Indian

consumer durables industry, a shift in consumer preferences towards higher-end,

technologically advanced branded products has been quite discernable. This shift can

be explained by narrowing differentials between the prices of branded and unbranded

products added with the high quality of after sales service provided by the branded

players. The shift has also been triggered by the availability of foreign branded

products in India owing to lower import duties coupled with other liberal measures as

introduced by the government.

SEGMENTATION OF THE CONSUMER DURABLE INDUSTRY

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 are also included in this category. 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.

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CONSUMER DURABLES

CONSUMER APPLIANCES CONSUMER

ELECTRONICS

WHITE GOODS BROWN GOODS • MOBILE PHONES

• TELEVISIONS

• MP3 PLAYERS

• DVD PLAYERS

• VCD PLAYERS

• REFRIGERATORS

• WASHING

MACHINES

• AIR CONDITIONERS

• SPEAKERS AND

AUDIO

EQUIPMENTS

• MIXERS

• GRINDERS

• MICROWAVE OVENS

• IRON

• ELECTRIC FANS

• COOKING RANGE

• CHIMNEYS

Source: India Brand Equity Foundation report

Table: Segmentation of consumer durables

INDUSTRY SIZE, GROWTH AND 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.

THE KEY DRIVERS BEHIND THE GROWTH

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,

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greater disposable income and an overall increase in the level of affluence of a

significant section of the population. The key trends that impact the Indian Consumer

Durables Industry today are reflected in the diagram.

Source: India Brand Equity Foundation report

Fig: The key drivers of consumer durable industry

TITLE OF THE TOPIC

“A STUDY ON DISTRIBUTION CHANNEL RELATIONSHIP AND MARKET SHARE ANALYSIS

OF SAMSUNG LCD IN THE TERRITORY OF KOLKATA”, WITH SPECIAL REFERENCE

TO SAMSUNG INDIA ELECTRONICS PVT. LTD.

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NEED FOR THE STUDY

The basic idea of taking up this study is to analyze the market share of SAMSUNG

LCD TVs in Kolkata sub-dealer market. At the same time, an attempt was made to

understand the distribution channel relationship and the problem faced by the dealers.

OBJECTIVE OF THE STUDY

PRIMARY OBJECTIVES

The primary objective of the study is to analyze the market share and understand

the distribution channel relationship with reference to SAMSUNG ELECTRONICS

INDIA PVT LTD.

SECONDARY OBJECTIVES

� To find out the counter share of SAMSUNG LCD TVs.

� To find out the counter size of the dealer as well as the different brands kept by

different dealers.

� To record who are the major players of LCD TVs.

� To find out which is the largest selling model among all the segments?

� To know whether the dealer is aware of current pricelist.

� To find out whether the dealer is having brochure of the product.

� To know what benefits a dealer wants so that he is satisfied in selling the

products.

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RESEARCH METHODOLOGY

The essential part of any report is research methodology. The field study was

conducted to analyze the market share and understand the distribution channel

relationship.

SAMPLE SIZE

The sample size is 50.

SAMPLE SELECTION

The sample was selected through the simple random technique with a sample of 50 questionnaires.

COLLECTION OF DATA

Data used of this report is mainly primary data, which are collected first hand by

survey in the field. In some area secondary data may also be taken into consideration.

� COLLECTION OF PRIMARY DATA

The data was collected through the primary source by survey method using structured

questionnaire and taking respondent’s personal interview.

� COLLECTION OF SECONDARY DATA

The data collected from text books, journals and internet.

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SANSUNG- AN OVERVIEW

The Samsung Group is a multinational conglomerate corporation headquartered in

Samsung Town, Seoul, South Korea. It is the world's largest conglomerate by revenue

with annual revenue of US$173.4 billion in 2008 and is South Korea's largest chaebol.

The meaning of the Korean word Samsung is "Tri-Star" or "three stars".

The Samsung Group is composed of numerous international affiliated businesses, most

of them united under the Samsung brand including Samsung Electronics, the world's

largest electronics company, Samsung Heavy Industries, the world's second largest

shipbuilder and Samsung C&T, a major global construction company.

Samsung has been the world's most popular consumer electronics brand since 2005

and is the best known South Korean brand in the world. Samsung Group accounts for

more than 20% of South Korea's total exports and is the leader in many domestic

industries, such as the financial, chemical, retail and entertainment industries.

HISTORY

In 1938, Lee Byung-Chull founded Samsung, a small trading company with

forty employees located in Daegu. The company prospered until the Communist

invasion in 1950 when he was forced to leave Seoul and start over in Busan. During

the war, Samsung's businesses flourished and its assets grew twenty-fold. In 1953, Lee

started a sugar refinery. The company diversified into many areas such as insurance,

securities, and retail. In the early 1970s, Lee borrowed heavily from foreign interests

and launched a radio and television station.

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Samsung Group later formed several electronics-related divisions, such as Samsung

Electronics Devices Co., Samsung Electro-Mechanics Co., Samsung Corning Co., and

Samsung Semiconductor & Telecommunications Co., and grouped them together

under Samsung Electronics Co., Ltd. in 1980s. Its first product was a black-and-white

television set.

In the late 1980s and early 1990s, Samsung Electronics invested heavily in research

and development, investments that were pivotal in pushing the company to the

forefront of the global electronics industry. “By the 1980s Samsung was

manufacturing, shipping, and selling a wide range of appliances and electronic

products throughout the world”. In 1982, it built a television assembly plant in

Portugal; in 1984, it built a $25 million plant in New York; and in 1987, it built

another $25 million facility in England.

The 1990s saw Samsung rise as an international corporation. Samsung's construction

branch was awarded a contract to build one of the two Petronas Towers in Malaysia,

Taipei 101 in Taiwan and the Burj Khalifa in United Arab Emirates, which is the

tallest structure ever constructed. In 1993 and in order to change the strategy sold off

ten of Samsung Group's subsidiaries, downsized the company, and merged other

operations to concentrate on three industries: electronics, engineering, and chemicals.

In 1996, the Samsung Group reacquired the Sungkyunkwan University foundation.

Samsung survived the Asian financial crisis of 1997-98 relatively unharmed. However,

Samsung Motor, a $5 billion venture was sold to Renault at a significant loss.

Additionally, Samsung manufactured a range of aircraft from 1980 to 1990s.

Most importantly, Samsung Electronics (SEC) has since come to dominate the group

and the worldwide semiconductor business, even surpassing worldwide leader Intel in

investments for the 2005 fiscal year. Samsung's brand strength has greatly improved in

the last few years.

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Samsung became the largest producer of memory chips in the world in 1992, and is the

world's second-largest chipmaker after Intel. In 1995, it built its first liquid-crystal

display screen. Ten years later, Samsung grew to be the world's largest manufacturer

of liquid-crystal display panels. In 2006, S-LCD was established as a joint venture

between Samsung and Sony in order to provide a stable supply of LCD panels for both

manufacturers. Samsung Electronics, which saw record profits and revenue in 2004

and 2005, overtook Sony as one of the world's most popular consumer electronics

brands, and is now ranked #19 in the world overall. Behind, Nokia, Samsung is the

world's second largest by volume producer of cell phones with a leading market share

in the North America and Western Europe.

ABOUT SAMSUNG ELECTRONICS

Founded in 1969 in Suwon, Gyeonggi-do, Korea, Samsung Electronics Co., Ltd.

manufactures and sells a wide variety of electronic products, communication devices,

and semiconductors. In January 2009, we restructured our organizational structure to

better reflect the respective characteristics of each business sector and the common

technology, market and customer base denominators within its businesses, thereby

creating synergies. The previous six division-based system was separated into a Digital

Media & Communications (DMC) business unit and a Device Solution (DS) business

unit. Today, its global presence includes a total of 111 subsidiaries in the form of

production subsidiaries, sales subsidiaries, distribution subsidiaries, research

laboratories and eight overseas business divisions representing North America, Europe,

China, Southeast Asia, Southwest Asia, Central and South America, CIS, the Middle

East and Africa.

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Source: Samsung Electronics annual report 2009

Fig: Global Network of Samsung Electronics

MISSION AND VISION STATEMENT

� VISION STATEMENT

Samsung is guided by a singular vision: to lead the digital convergence

movement. SAMSUNG believe that through technology innovation today, SAMSUNG

will find the solutions they 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. SAMSUNG’s aim is to develop innovative technologies and efficient

processes that create new markets, enrich people’s lives and continue to make

Samsung a trusted market leader.

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� MISSION STATEMENT

Everything they do in Samsung is guided by our mission: to be the best “digital-

Company”.

Source: Samsung Electronics website

Fig: Holistic Marketing Framework

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.

ORGANIZATION STRUCTURE

Source: Samsung Electronics annual report 2009

Fig: Organization Structure of Samsung Electronics

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ACHIEVEMENTS OF THE COMPANY

2008

• 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 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 the worlds' first Blu-Ray Disc Player

• Developed 1.72"Super-Reflective LCD Screen

2005

• The India Retail Forum has awarded Samsung as the Best Retailer of the year 2005 in the consumer Durables category.

• Most Trusted Company Award 2005 by Var India.

• Mr. S. H. Oh appointed as the President and Chief Executive Officer of Samsung South West Asia.

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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.

• India made regional headquarters for Samsung Southwest Asia.

• Mr. K. S. Kim appointed as the First President and Chief Executive Officer of Samsung South West Asia.

2003

• Inaugurated Samsung's new, High-Tech, advanced Refrigerator facility.

• Commencement of production at refrigerator facility in Noida.

• Merger of SIEL with SEIIT. Software technology park set up at Noida

2002

• Construction commences for 5,000,000 refrigerator plant in Noida

• Samsung unveils new technology for Consumer Home Entertainment (DNIe™)

• ELCINA (Electronics Industries Association of India) Awards for ‘Excellence in Electronics’ instituted by the IT department of the Government of India. SAMSUNG India received the 1st Prize in the Consumer Electronics category for productivity, exports, R&D and quality assurance in 2002

1996

• Foundation Stone laid for CTV Factory at Noida, Uttar Pradesh.

• Launch in South Home Appliances Launch

1995

• Samsung India Electronics (SIEL) products launched in India.

• Certificate for commencement of business received by Samsung


Table: Achievements of Samsung Electronics

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BRANDING STRATEGY OF SAMSUNG ELECTRONICS

Interbrand, the world’s leading brand consultant has ranked Samsung as the

fastest growing brand in the world. For any new company, when it enters the market,

there are two options to stimulate the growth; intensive advertising campaign, and

offer products with unique functions. Samsung opted for both, but tilted more towards

advertising and brand making strategy-creating awareness of its name by investing

enormously in million-dollar brand making campaigns. One problem with older

companies is that they often portray their product as commodity and normally sell their

products only on the basis of brand without improving their quality and lowering their

price.

Samsung worked on all directions, it not only invested hugely in brand creation

campaigns worldwide ($3billion marketing budget per year), while it also remained

ahead of the market by introducing innovation. In order to create a different image,

Samsung decided to position itself by developing innovative products and become

leader rather than a follower.The reason for this success is Samsung’s holistic

approach to develop several strategies for different regions, but guided by one unified

Samsung brand image building strategy. The branding strategy started in 1996 by its

Chairman Kun Lee, whose aim was to launch a coordinated global program to make

Samsung an international brand. Over the last one decade Samsung has been busy in

executing its comprehensive brand building strategy. Samsung annual investment in

branding and marketing is about US$3.5 billion, which has been spent to increase its

brand awareness around the world. Samsung the approach is holistic reaching the

world customer. It created its branding in multiple ways, ranging from traditional adds

to billboards, racing, Olympics games, cricket matches, marathons, in short wherever it

saw the crowd, it communicated Samsung message by presenting itself as a leader of

innovation with affordable price.

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SAMSUNG ELECTRONICS IN INDIA

Samsung India Electronics Private Limited (SIEL) is the Indian subsidiary of the

US $55.2 billion Samsung Electronics Corporation (SEC) headquartered in Seoul,

Korea. Headquartered in New Delhi, SAMSUNG India has widespread network of

sales offices all over the country . SAMSUNG India is the hub for SAMSUNG’s South

West Asia Regional operations. The South West Asia 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

enjoys a sales turnover of over US$ 1Bn in just a decade of operations in the country.

From being a virtually unknown entity in the Year 1995, brand SAMSUNG today

enjoys an awareness level of over 65% and a positive opinion of over 80% in the

country today (source: BAS 2007). Initially, a player only in the Colour Televisions

segment, it later diversified into colour monitors (1999) and refrigerators (2003).

Today, it is recognized as one of the fastest growing brands in the sphere of digital

technology. SIEL is the market leader in high end digital television (Plasma, LCD).

PRODUCT PORTFOLIO OF SIEL

SAMSUNG India is the hub for SAMSUNG’s South West Asia Regional

operations. SAMSUNG India has segmented their products into five categories.


Fig: Width of the product mix of SIEL

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� MOBILE PHONE

� TV/AUDIO/VIDEO

� CAMERA/CAMCORDER

� HOME APPLIANCES

� PC/PERIPHERALS/PRINTERS


Fig: Depth of the product lines

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DEPTH OF THE LCD TV SEGMENT

SAMSUNG India has divided the LCD TVs in different series according to the

features. Here there is a brief review of segmentation of LCD TVs.


Fig: Depth of the LCD segment

LCD TVs

Series

7

Series

6

Series

5

Series

4

Series

5

Serirs

4

Series

3Others

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INDIAN CONSUMER ELECTRONICS INDUSTRY

The consumer electronics industry has been witnessing a phenomenal growth globally

over the past few years. This growth can be attributed to the revolutionary

technological developments taking place in the consumer electronics industry. The

revolution brought by the digital technology has enabled the consumer electronics

sector to profit from the growing interaction of digital applications, such as

camcorders, DVD player/recorder, still camera, computer monitor, LCD TV, etc.

According to Consumer Electronics Market Forecast report, the global consumer

electronics market is forecasted to grow at a CAGR of around 5% during 2009-2012.

Also, during the same period, the global consumer electronics shipment will grow at a

CAGR of around 5%. Various factors driving the future growth. On the regional front,

we found that the American region, mainly US, is driving the global consumer

electronics industry, closely followed by Europe. In future, Asia Pacific region will

constitute the major portion of the consumer electronics industry, mainly due to the

increase in demand from the developed countries in the region. Also, the American

region along with the European region will see a decline in their market shares because

the markets there have attained saturation and only the advent of new technology will

boost the demand.

India’s consumer electronics devices market, defined as the addressable market for

computing devices, mobile handsets and AV products, is projected at around

US$28.6bn in 2010. This is expected to increase to US$45.7bn by 2014, driven by

rising incomes and growing affordability. Growth in some product categories dipped in

2009, but the market recovered strongly during the festive sales season that ran until

Diwali, with many retailers reporting 20-40% growth. Spending on consumer

electronics devices is projected to grow at an overall CAGR of 12% through 2014,

with the key segments including touch-screen mobiles, for LCD TV sets, set-top boxes

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and notebook computers. Much of the growth will be driven by growing demand from

India’s rural population.

DISPLAY AS A GROWTH DRIVER

India's domestic video device market is expected to grow at a CAGR of 22% between

2009-2013, to a value of US$15.2bn in that year. Television will remain the core

product in this category, with sports events such as the India Premier League cricket

and the 2010 Commonwealth Games in Delhi helping to drive demand for TV set

upgrades.

Source: Display search India

Fig: Contribution of video in the CE market

Indian market typically exhibits contradiction that there may be a unique to this

market. For instants CRT TVs are obsolete across the world; but they continue to be

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sold in rural india. At the same time there is a growing demand for LCD TVs in india.

In this way vedio continues to drive growth in India’s consumer electronics industry.

The display industry in India promises huge potential in the years to come. The double

digit compound annual growth over the next five years will be aided by various

factors.

EMERGING LCD TV MARKET

India market and predicts that by 2012, LCD TV shipments will surpass those of

CRT TVs in India. India has the second largest population in the world and an annual

GDP growth rate of more than 8% from 2002 to 2012. CRT TV accounts for 92.9% of

those units in 2008, followed by LCD TV with 6.6% and PDP TV with 0.5%.

However, Indian LCD TV market is just at the beginning of a real growth curve, with

Y/Y growth of more than 100% expected for each of the next five years. Growth will

be driven by enhanced purchasing power, the digital broadcast (DTH, IPTV, STB

cable) transition as well as consumer awareness and affordability of LCD TVs. India’s

growing upper middle class is projected to be the greatest source of LCD TV

purchasing power. Meanwhile, major brands like Samsung, LG, Sony and Philips and

Indian local brands like Videocon and Onida are all focusing promotional efforts

around LCD TV. Several Chinese brands are also targeting India with their first

exports. Among the imports of LCD TV into India, approximately 25% were imported

in as CBU (Complete Built Unit) and 75% were imported as SKD (Semi-Knock

Down) or CKD (Complete Knock Down). Thailand has a special FTA (Free Trade

Agreement) with India on duty benefits. Therefore, companies like Sony and

Panasonic are making LCD TVs in Thailand and then shipping them to India. The

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growing LCD TV market in India has encouraged Indian company Videocon group to

set up a TFT LCD panel manufacturing lab.

Source: Display search India

Fig: Indian Emerging LCD TV Market

THEORETICAL BACKGROUND OF THE STUDY

Marketing involves satisfying consumer’s needs and wants. The task of any business

is to deliver customer value at a profit. The American Marketing Association offers the

following formal definition: Marketing is an organizational function and a set of

processes for creating, communicating, and delivering value to customers and for

managing customer relationships in ways that benefit the organization and its stake

holders.

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According to this view, holistic marketers succeed by managing a superior value chain

that delivers a high level of product quality, service, and speed. Holistic marketers

achieve profitable growth by expanding customer share, building customer loyalty, and

capturing customer lifetime value.

Source: Marketing Management by Philip Kotler & Kevin Lane Kelle

Fig: Holistic Marketing Framework

A holistic marketing framework shows how the interaction between relevant actors

(customers, company, and collaborators) and value-based activities (value exploration,

value creation, and value delivery) helps to create, maintain, and renew customer

value.

THE ROLE OF MARKETING CHANNELS

Successful value creation needs successful value delivery. Holistic marketers are

increasingly taking a value network view of their businesses. The marketing channel

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performs the work of moving goods from producers to consumers. Intermediaries

normally achieve superior efficiency in making goods widely available and accessible

to target markets. Through their contacts, experience, specialization, and scale of

operation, intermediaries usually offer the firm more than it can achieve on its own.

These are the various roles performed by the channel partners:

� Gather information about potential and current customers, competitors, and

other actors and forces in the marketing environment.

� Develop and disseminate persuasive communications to stimulate purchasing.

� Reach agreements on price and other terms so that transfer of ownership or

possession can be affected.

� Place orders with manufacturers.

� Acquire the funds to finance inventories at different levels in the marketing

channel.

� Assume risks connected with carrying out channel work.

� Provide for the successive storage and movement of physical products.

� Provide for buyers' payment of their bills through banks and other financial

institutions.

� Oversee actual transfer of ownership from one organization or person to another.

All channel functions have three things in common: They use up scarce resources; they

can often be performed better through specialization; and they can be shifted among

channel members. When the manufacturer shifts some functions to intermediaries, the

producer's costs and prices are lower, but the intermediary must add a charge to cover

its work. If the intermediaries are more efficient than the manufacturer, prices to

consumers should be lower. If consumers perform some functions themselves, they

should enjoy even lower prices.

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CHANNEL MANAGEMENT DECISIONS

After a company has chosen a channel alternative, individual intermediaries

must be selected, trained, motivated, and evaluated. Channel arrangements must be

modified over time.

� SELECTING CHANNEL MEMBERS

Companies need to select their channel members carefully. To customers, the channels

are the company. Consider the negative impression customers would get of if one or

more of their outlets or dealers consistently appeared dirty, inefficient, or unpleasant.

To facilitate channel member selection, producers should determine what

characteristics distinguish the better intermediaries. They should evaluate the number

of years in business, other lines carried, growth and profit record, financial strength,

cooperativeness, and service reputation. If the intermediaries are sales agents,

producers should evaluate the number and character of other lines carried and the size

and quality of the sales force. If the intermediaries are department stores that want

exclusive distribution, the producer should evaluate locations, future growth potential,

and type of clientele.

� TRAINING CHANNEL MEMBERS

Companies need to plan and implement careful training programs for their

intermediaries. The company must constantly communicate its view that the

intermediaries are partners in a joint effort to satisfy end users of the product.

Coercive and reward power are objectively observable; legitimate, expert, and referent

power are more subjective and dependent on the ability and willingness of parties to

recognize them.

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� MOTIVATING CHANNEL MEMBERS

A company needs to view its intermediaries in the same way it views its end users. It

needs to determine intermediaries' needs and construct a channel positioning such that

its channel offering is tailored to provide superior value to these intermediaries. Being

able to stimulate channel members to top performance starts with understanding their

needs and wants. The company should provide training programs, market research

programs, and other capability-building programs to improve intermediaries’

performance.

� EVALUATING CHANNEL MEMBERS

Producers must periodically evaluate intermediaries' performance against such

standards as sales-quota attainment, average inventory levels, customer delivery time,

treatment of damaged and lost goods, and cooperation in promotional and training

programs. A producer will occasionally discover that it is paying too much to

particular intermediaries for what they are actually doing. Producers should set up

functional discounts in which they pay specified amounts for the trade channel's

performance of each agreed-upon service. Underperformers need to be counseled,

retrained, motivated, or terminated.

� MODIFYING CHANNEL ARRANGEMENTS

A producer must periodically review and modify its channel arrangements.

Modification becomes necessary when the distribution channel is not working as

planned, consumer buying patterns change, the market expands, new competition

arises, innovative distribution channels emerge, and the product moves into later stages

in the product life cycle.

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LEVELS OF MARKETING SEGMENTATIONS AND TARGETS

Markets are not homogeneous. A company cannot connect with all customers in

large, broad, or diverse .markets. Consumers vary on many dimensions and often can

be grouped according to one or more characteristics.

� SEGMENTATION MARKETING

The starting point for discussing segmentation is mass marketing. In mass marketing,

the seller engages in the mass production, mass distribution, and mass promotion of

one product for all buyers. The argument for mass marketing is that it creates the

largest potential market, which leads to the lowest costs, which in turn can lead to

lower prices or higher margins. However, many critics point to the increasing

splintering of the market, which makes mass marketing more difficult. The

proliferation of advertising media and distribution channels is making it difficult and

increasingly expensive to reach a mass audience. Some claim that mass marketing is

dying. Most companies are turning to micromarketing at one of four levels: segments,

niches, local areas, and individuals.

� TARGET MARKETING

Once the firm has identified its market-segment opportunities, it has to decide how

many and which ones to target. Marketers are increasingly combining several variables

in an effort to identify smaller, better-defined target groups. Effective target marketing

requires that marketers:

� Identify and profile distinct groups of buyers who differ in their needs and

preferences (market segmentation) .

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� Select one or more market segments to enter (market targeting).

� For each target segment , establish and communicate the distinctive benefits) of

the company's market offering (market positioning) .

COMPETITIVE STRATEGIES FOR MARKET LEADERS

The leader might spend conservatively whereas a challenger spends liberally.

The leader might misjudge its competition and find itself left behind. The dominant

firm might look old-fashioned against new and peppier rivals. The dominant firm's

costs might rise excessively and hurt its profits, or a discount competitor can undercut

prices. Leaders can respond to an aggressive competitor in three ways first, the firm

must find ways to expand total market demand. Second, the firm must protect its

current market share through good defensive and offensive actions. Third, the firm can

try to increase its market share, even if market size remains constant.

� EXPANDING THE TOTAL MARKET

The dominant firm normally gains the most when the total market expands. The

market leader should look for new customers or more usage from existing customers.

Every product class has the potential of attracting buyers who are unaware of the

product or who are resisting it because of price or lack of certain features. A company

can search for new users among three groups: those who might use it but do not

(market-penetration strategy), those who have never used it (new-market segment

strategy) or those who live elsewhere (geographical-expansion strategy). Usage can be

increased by increasing the level or quantity of consumption or increasing the

frequency of consumption.

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� DEFINING MARKET SHARE While trying to expand total market size, the dominant firm must continuously defend

its current business. The leader leads the industry in developing new product and

customer services, distribution effectiveness, and cost cutting. It keeps increasing its

competitive strength and value to customers.

� EXPANDING MARKET SHARE

Market leaders can improve their profitability by increasing their market share.

Gaining increased share in the served market, however, does not automatically produce

higher profits—especially for labor-intensive service companies that may not

experience many economies of scale. Much depends on the company's strategy.

Because the cost of buying higher market share may far exceed its revenue value, a

company should consider four factors before pursuing increased market share: The

possibility of provoking antitrust action, Economic cost, Pursuing the wrong

marketing-mix strategy, The effect of increased market share on actual and perceived

quality.

DISTRIBUTION CHANNEL MAP OF SIEL IN KOLKATA

The producer and the final customer are part of every channel. These channels are

different levels. A one-level channel contains one selling intermediary, such as a

retailer. A two-level channel contains two intermediaries. In consumer markets, these

are typically a wholesaler and a retailer. A three-level channel contains three

intermediaries. In the meatpacking industry, wholesalers sell to jobbers, who sell to

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small retailers. From the producer's point of view, obtaining information about end

users and exercising control becomes more difficult as the number of channel levels

increases.

SIEL is having three types of distribution system. Two of them comes under one-level

channel and last one comes under two-level channel.

� ONE LEVEL CHANNEL

� TWO LEVEL CHANNEL

Fig: Distribution channel map of SIEL

Company

WarehouseBrand Shop Customers

Company

Warehouse

Direct

DealersCustomers

Company

WarehouseDistributors Sub Dealers Customers

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MARKET SIZE OF SAMSUNG LCD TVS IN KOLKATA

During the study I have subdivided Kolkata in to three parts these are North Kolkata,

Central Kolkata and South Kolkata.

� NORTH KOLKATA

TOTAL

COUNTER

SIZE

TOTAL

COUNTER

SHARE

NO OF DEALERS

SURVEYED

AVERAGE

COUNTER SIZE

AVERAGE COUNTER

SHARE

404 200 22 18.36 9.09

COUNTER SHARE OF SAMSUNG LCD TV IN NORTH KOLKATA (9.09/18.36)*100

= 49.50

� CENTRAL KOLKATA

TOTAL

COUNTER

SIZE

TOTAL

COUNTER

SHARE

NO OF DEALERS

SURVEYED

AVERAGE

COUNTER SIZE

AVERAGE COUNTER

SHARE

189 89 13 14.53 6.84


= 47.O7

� SOUTH KOLKATA

TOTAL

COUNTER

SIZE

TOTAL

COUNTER

SHARE

NO OF DEALERS

SURVEYED

AVERAGE

COUNTER SIZE

AVERAGE COUNTER

SHARE

434 209 15 28.93 13.93


= 48.15

30

DATA INTERPRETATION AND ANALYSIS

Table- 4.1: Table showing the counter share of SAMSUNG LCD TVs

Particulars No of Dealers Percentage

less than 30% 6 12

Between 30%-50% 27 54

Between 51%-70% 13 26

Greater than 70% 4 8

Total 50 100 Source: Primary Data

INTERPRETATION: From the above table, it can be observed that 54% of the dealers are

having counter share of SAMSUNG LCD is between 30%-50%, where as 26% of the

dealers are having counter share of SAMSUNG LCD is between 51%-70%, 12% of

the dealers are having counter share of SAMSUNG LCD is less than 30% and only 8%

of the are having more than 75% counter share.

less than 30%

12%

Between 30%-

50%

54%

Between 51%-

70%

26%

Greater than 70%

8%

31

Table- 4.2: Table showing the counter size of the dealers

Particulars No of respondents Percentage

Between 0-19 27 54

Between 20-39 14 28

Between 40-60 7 14

More than 60 2 4


INTERPRETATION: The above table depicts that 54% of the dealers are having counter

size between 0-19 TVs per month, where as 28% of the dealers are having counter size

between 20-39 TVs per month, 14% of the dealers are of the dealers are having

counter size between 40-60 TVs per month, and only 4% of the dealers are having

counter size more than TVs per month.

Between 0-19

54%Between 20-39

28%

Between 40-60

14%

More than 60

4%

32

Table- 4.3: Table showing whether the dealers are having of LCD stand

Particulars No of Respondents Percentage

Yes 19 38

No 31 62


INTERPRETATION:

From the above table, it can be observed that 62% of the

respondents don’t have any LCD display stand in their counter where as 38% of the

respondents are having LCD display stand in their counter.

Yes

38%

No

62%

33

Table- 4.4: Table showing the Display share of SAMSUNG LCD TVs

Particulars

Less than 25%

Between 25%-40%

Between 41%-54%

Between 55%-75%

Greater than 75%

Total

SAMSUNG 9 18 8 9 6 50

LG 21 18 5 3 3 50

SONY 31 15 2 2 0 50

Others 38 7 3 2 0 50 Source: Primary Data

INTERPRETATION:

From the above table, it can be observer that in 18% counter,

Samsung, in 42% counter LG, in 62% counter SONY and in 72% counter others are

having less than 25% Display share. Where as in 36% counter Samsung and LG are

sharing the same, in 30% counter SONY and in 14% counter others are having Display

share between 25%-40%. In 16% counter Samsung, in 10% counter LG, in 4% counter

SONY and in 6% counter others are having Display share between 41%-54%. In 18%

counter Samsung, in 6% counter LG, in 4% counter SONY and in 4% counter others

are having Display share between 55%-75%. In 12% counter Samsung, in 6% counter

LG is having more than 75% Display share.

0

5

10

15

20

25

30

35

40

Less than 25% Between 25%-

40%

Between 41%-

54%

Between 55%-

75%

Greater than

75%

SAMSUNG

LG

SONY

OTHERS

34

Table- 4.5: Largest selling model among all the models


22 Inch 28 56

26 Inch 20 40

32 Inch 2 4

40 Inch 0 0

Above 40 Inch 0 0


INTERPRETATION:

From the above table it can be found that 72% of respondents finds

22” is the largest selling model in their counter, followed by 26’’ which is the largest

selling model in 40% counters, where as only 4% finds 22” is the largest selling

model in their counter.

22 Inch

56%

26 Inch

40%

32 Inch

4%

40 Inch

0%

Above 40 Inch

0%

35

Table- 4.6: Table showing whether dealers are having sufficient catalog


Yes 24 48

No 26 52


INTERPRETATION:

From the above data, it can be inferred that majority of the

respondents i.e. 52% don’t have the sufficient catalog of the product. The rest 48% of

the respondents are having sufficient catalog of the product.

Yes

48%No

52%

36

Table- 4.7: Table showing whether the dealers are aware of current pricelist


Yes 43 86

No 7 14


INTERPRETATION:

From the above table, it can be observed that 86% of the

respondents are aware of current pricelist and they used to get it by email or via sales

person and only 14% of the respondents not aware of current pricelist as they not

getting the current pricelist from any of the available sources.

Yes

86%

No

14%

37

Table- 4.8: List of different sources from where the dealers get the product


Distributor 41 82

Wholesaler 3 6

Other Source 2 4

All of them 4 8


INTERPRETATION:

From the above table, it can be found that 82% of the respondents

get the product from the distributor, 8% of the respondents get the product from all the

available sources where they felt cheaper, 6% of the respondents get the product from

the wholesaler and only 4% of the respondents get the product from other alternative

sources.

Distributor

82%

Wholesaler

6%

Other Source

4% All of them

8%

38

Table- 4.9: Table showing the satisfaction level of the dealers about the

distributors


Highly Satisfied 15 30

Satisfied 34 68

Dissatisfied 1 2

Highly Dissatisfied 0 0


INTERPRETATION:

From the above table it can be found that 68% of respondents are

satisfied with distributors as a whole, where as 30% of respondents are highly satisfied

with distributors as a whole and only 2% of respondents are dissatisfied with

distributors as a whole.

Highly Satisfied

30%

Satisfied

68%

Dissatisfied

2%

Highly Dissatisfied

0%

39

Table- 4.10: Table showing the frequency of sales persons visiting the counter


Once in a week 17 34

Twice a week 19 38

Thrice a week 13 26

More than three days 1 2


INTERPRETATION:

From the above table it can be found that in 38% counters

salespersons are visiting twice a week, where as in 34% counters salespersons are

visiting once a week, 24% counters salespersons are visiting thrice a week, and only in

2% counters salespersons are visiting more than thrice a week.

Once in a week

34%

Twice a week

38%

Thrice a week

26%

More than three

days

2%

40

Table- 4.11: Table showing the satisfaction level of the dealers about the service


Good 36 72

Satisfactory 12 24

Average 2 4

Below average 0 0


INTERPRETATION:

From the above table, it can be observed that majority of the

respondent 72% rated the service as good, 24% of the respondents rated the service as

satisfactory, and only 4% of the responded rated the service as average.

Good

72%

Satisfactory

24%

Average

4%

Below

average

0%

41

Table- 4.12: List of facilitating factors which will help the dealers to increase the

counter share


Branding 13 26

Advertising 25 50

Salesman 7 14

Display Concert 5 10

Total 50 100

Source: Primary Data

INTERPRETATION:

From the above table, it can be observed that majority of the

respondents 50% think that advertising will facilitate to increase their counter share,

where as 26% respondents think that branding will facilitate to increase their counter

share, 14% respondents think that salesman will facilitate to increase their counter

share and only 10% respondents think that display concert will facilitate to increase

their counter share.

Branding

26%

Advertising

50%

Salesman

14%

Display

Concert

10%

42

Table- 4.13: Table showing whether the dealers are satisfied with SAMSUNG as

whole


Yes 48 96

No 2 4


INTERPRETATION:

From the above table, it can be observed that majority of the respondents

96% are satisfied with SAMSUNG as a whole, where as only 4% respondents are not

satisfied with SAMSUNG as a whole.

Yes

96%

No

4%

43

LIMITATIONS

� During the dealer study, some of the dealers did not give the exact information

about number of products sold by them in a month.

� The market size of SAMSUNG LCD TVs achieved is exclusive of B2C market.

� This study does not take into account the market in Kolkata as whole, but only

50 dealers.

� Study was conducted with dealers selling mostly Samsung products, with most

of them selling LG, SONY etc. products in lower quantities. Therefore, this

might skew the results a bit.

� The period of the project was not sufficient to study all the factors in deep.

� Many consumer and dealers/retailers showed less interest in providing

information and haven’t cooperated.

44

FINDINGS

� Majority of the dealers i.e. 54% are having counter share of SAMSUNG LCD is

between 30%-50%. It shows that Samsung has got strong grip in the market and

if the dealers will contribute more enthusiastically than market share may grow

farther.

� 54% of the dealers are having counter size between 0-19 units per month. It

shows that majority of the dealers need to improve their counter size in order to

expand the market.

� From the study, it is revealed that 62% of the dealers don’t have any LCD

display stand in their counter.

� Samsung is having healthy display share (between 55% to 75%) in 18% dealers

rather than i.e. it shows that many of the dealers are keeping Samsung in the

display. Different contest for displaying the LCD brings a new perspective in

this context.

� Among the different models like 22 inch, 26 inch, 40 inch, above 40 inch,

majority of the dealers (56%) finds 22” is the largest selling model in their

counter.

� Majority of the dealers i.e. 52% don’t have the sufficient catalog of the product.

Samsung should strive to ensure that the catalogs are sent out regularly and

quickly, as this is the cause of most grievances of the channel partners.

� Majority of the dealers are aware of current pricelist due to the effective

communication with the company. Without effective communication value

cannot be passed deliver superior value to the target market.

� Some dealer’s are taking Samsung LCD from cheaper markets. This is creating

price instability in the market between retailers and system integrators.

45

� 68% of the dealers are satisfied with the distributors. In turn, it helps to achieve

superior efficiency in making goods widely available and accessible to target

markets.

� In 38% counters sales persons are visiting twice a week.

� 72% of the dealers rated the promotional service as good. The rating shows that

Samsung is successful in delivering distinctive customer value.

� 50% of the respondents think that advertising will facilitate to increase their

counter share. It might build conviction and purchase intent among the target

audience.

� 96% of the dealers are satisfied with SAMSUNG as a whole.

46

SUGGESTIONS

� SAMSUNG should redress the grievance of the dealers regarding the supply of

catalogs, so that the dealers can show various models to the prospects and

endorse to buy SAMSUNG LCD TV.

� The company should modify some of the models as these models don’t have any

output connection specially the 22” model as it is the largest selling model in

most of the counters.

� Dealers in Kolkata don’t have enough space to display LCD in their counter

that’s why they are not willing to keep LCD display stand in their counter.

Company should customize the display stand so that it can be easily fix in the

wall, in this way SAMSUNG can improve the display share as SAMSUNG also

believes that “ JO DIKHTA HAI WO BIKTA HAI”.

� The rural counters are not getting the current price list of the product as sales

persons are visiting less in these counters company should focus on that matter

seriously.

� Company should introduce low cost products to satisfy the needs of the low or

middle class as SONY is having 19” model in this segment.

� Branding and promotional activities should be done effectively as it creates a

long lasting image in the mind of the customers.

� As there is a bottle neck competition between SAMSUNG and LG, it is

necessary to take major steps to overcome the area of downfall in SAMSUNG

with respect to LG.

47

CONCLUSION

This study highlighted that Kolkata market is still a virgin market for SAMSUNG

LCD TVs. Customers need to be made aware of the productive usages of these

products if SAMSUNG want to target these untapped market segments of customers.

Also SAMSUNG need to modify their advertising strategies in order to educate the

target audience about the product. Hence SAMSUNG will be able to win a major

between the competitors.

48

BIBLIOGRAPHY

BOOKS AND JOURNALS REFERRED:

SAMSUNG Electronics annual report, 2009 Current state of Indian Economy (FICCI), October 2009

Indian journal of marketing, June 2009

Marketing Management, 12th Edition

By: Philip Kotler and Kevin Lane Keller

WEBSITES:

http://www.google.com

http://www.ibef.org

http://www.displaysearch.com

http:// www.dnb.com

http://www.samsung.com.

http:// www.cygnusindia.com

49

ANNEXURE

Questionnaire

“A Study on distribution channel relationship and market share analysis of Samsung LCD in the territory of Kolkata”, with special reference to SIEL.

1) Name of the dealer: …………………………………………………………………...

2) What is the Counter share of SAMSUNG LCD per month? …………………..

3) What is the counter size of the dealer per month? …………………..

4) Whether the dealer is having LCD stand?

Yes No

5) How different brands are displayed (Size wise)?

22” 26” 32” 40” Above 40”

SAMSUNG

LG

SONY

Others

6) Which is the largest selling Model?

22” 26” 32” 40” Above 40”

7) Whether the Dealer is having sufficient catalog of the product?

Yes No

8) Whether the Dealer is aware of current pricelist of the product?

Yes No

9) From where the dealer used to get the product?

Distributor Other Source

Whole seller All of them

50

10) Whether the Dealer is satisfied with the Distributor?

Highly Satisfied Satisfied

Dissatisfied Highly dissatisfied

11) How often distributors sales person visit the counter?

Once a week Twice a week

Thrice a week More than 3 times

12) Whether the dealer is satisfied with the service?

Satisfactory Good

Average Below Average

13) What can Samsung do to motivate you to sell more Samsung LCD rather than any other

brand?

Branding Advertising

Salesman Display Concert

14) Have you been satisfied with Samsung as a whole, during your experience selling

Samsung products?

Yes No

Suggestions (If Any):

SAMSUNG Project Report

Documents

consumer preferences

indias consumer market

consumer behavior pattern

samsung india electronics

samsung electronics

durable goods

branded players

collection of primary