Amitesh Mishra Dissertation

8/8/2019 Amitesh Mishra Dissertation

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2 nd step:

Questionnaire: In questionnaire i have drafted 10 questions to

check the risk factor of people. Questionnaire which i have drafted

is objective.

3 rd step:

Survey A part from questionnaire i have done surveys

Secondary data collection methods

● websites

● annual report

● magazines/journals

● News papers/business magazine

Tools and techniques:

There are two types of tools and techniques are used for the data

analysis. These are: -

•

Accounting tools : - Here we can use trend analysis,

comparative study or common size method etc.

• Statistical tools: - Here we can use graphs, pie -

charts, bar charts etc.

In this research study we have used both accounting as well as

statistical tools. These are: -



• Accounting Tools: - Comparative Study

•

Statistical Tools: - Pie charts and bar charts and graphs.



LIMITATIONS

• sample was small

• limited to a particular regin



SWOT ANALYSIS

Strengths

1. Presence of established distribution networks in both urban

and rural areas

2. Presence of well-known brands

3. In recent years, organized sector has increased its share in

the market vis a vis the unorganized sector.

Weaknesses

1. Demand is seasonal and is high during festive season

2. Demand is dependent on good monsoons

3. Poor government spending on infrastructure

4. Low purchasing power of consumers

Opportunities

1. In India, the penetration level of white goods is lower as

compared to other developing countries.

2. Unexploited rural market

3. Rapid urbanization

4. Increase in income levels, i.e. increase in purchasing power

of consumers.



5. Easy availability of finance

Threats

1. Higher import duties on raw materials imposed in the

Budget 2007-08

2. Cheap imports from Singapore, China and other Asian

countries



CLASSIFICATION OF CONSUMER DURABLES

SECTOR

Consumer durables Sector can be classified as follows:

1. Consumer Electronics includes VCD/DVD, home theatre,

music players, color televisions (CTVs), cameras,

camcorders, portable audio, Hi-Fi, etc.

2. White Goods include dishwashers, air conditioners, water

heaters, washing machines, refrigerators, vacuum cleaners,

kitchen appliances, non-kitchen appliances, microwaves,

built-in appliances, tumble dryer, personal care products,

etc.

3. Moulded Luggage includes plastics.

4. Clocks and Watches

5. Mobile Phones

The consumer durables market in India is valued at US $ 4.5

billions currently. In 2006, microwave ovens and air conditioners

registered a growth of about 25%. Frost-free refrigerators have

registered significant growth as many urban families are replacing

their old refrigerators. Refrigerator sales amounted to 4.2 millions

in 2006, whereas the production of the refrigerators went up by



17% as compared to the preceding year. Washing machines,

which have always seen poor growth, have seen reasonable

growth in 2006. More and more Indians are now buying electrical

appliances due to change in electricity scenario. The penetration

level of color televisions (CTVs) is expected to increase 3 times by

2007.



FUTURE SCENARIO

With easy availability of finance, emergence of double-

income families, fall in prices due to increased competition,

government support, growth of media, availability of disposable

incomes, improvements in technology, reduction in customs duty,

rise in temperatures, growth in consumer base of rural sector, the

consumer durables industry is growing at a fast pace. Given these

factors, a good growth is projected in the future, too.

The penetration level of consumer durables is very low in India, as

compared with other countries. This translates into vast

unrealized potential.

For example, in case of color televisions (CTVs), the penetration

level of various countries is:

India 24%

Brazil 11%

China 98%

US 333%

France 235%

Japan 250%

Demand and Penetration Level of White Goods in India



1995-1996 2005-2006 2009-2010

Demand 3.43 million 8.72 million 13.14 million

Penetration

level

149 per 1,000

households

319 per 1,000

households

451 per 1,000

households

In a study conducted by Frost & Sullivan and commissioned by

India Semiconductor Association (ISA), the demand for Electronic

Appliances is projected to grow exponentially at a compounded

annual growth rate (CAGR) of 30%.

In billions

SCOPE

In terms of Purchasing Power Parity (PPP), India is the 4th

largest economy in the world and is expected to overtake Japan in

the near future to become the 3rd largest. Indian consumer goods



market is expected to reach $400 billion by 2010. India has the

youngest population amongst the major countries. There are a lot

of young people in India in different income categories. Nearly

two- thirds of its population is below the age of 35, and nearly 50

% is below 25. There are 56 million people in middle class, who

are earning US$ 4,400- US$ 21,800 a year. And there are 6

million rich households in India. The upper-middle and high-

income households in urban areas are expected to grow to 38.2

million in 2007 as against 14.6 million in 2000.

Rural sector offers huge scope for consumer durables industry, as

it accounts for 70% of the Indian population. Rural areas have the

penetration level of only 2% and 0.5% for refrigerators and

washing machines respectively. The urban market and the rural

market are growing at the annual rates of 7%-10%and 25%

respectively. The rural market is growing faster than the urban

market. The urban market has now largely become a product

replacement market.

The bottom line is that Indian market is changing rapidly and is

showing unprecedented business opportunity



CONSUMER MARKETS

Last Updated: February 2009

Sustained Momentum

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. With above 300 million people

moving up from the category of rural poor to rural lower middle

class between 2005 and 2025, rural consumption levels are

expected to rise to current urban levels by 2017. Such

developments in India's markets are expected to create major

opportunities for Indian companies and multinationals (MNCs)

alike and further fuel consumer demand in India.

Despite the gloom in the global markets, India will continue to be

the second fastest growing economy in the world and according to

the Indian Minister for Commerce and Industry, Mr Kamal Nath,

the Indian economy may well grow at over 7 per cent in 2008-09.

According to a study by the McKinsey Global Institute (MGI),

Indian incomes are likely to grow three-fold over the next two

decades and India will become the world's fifth-largest consumer

market by 2025, moving up from its position in 2007 as the 12th-

largest consumer market.



Further, according to the National Council for Applied Economic

Research (NCAER) estimates, by 2012, only 14 per cent

households in India will have annual household incomes of less

than US$ 921.66, from 58 per cent in 1995-96 and 25 per cent

currently.

In an analysis (carried out by Economic Times) of the top 50

consumer goods and services firms, it was seen that the June

quarter of 2008-09 saw a sales growth of 24 per cent (year-on-

year) compared to last year. The firms included in the analysis

were from sectors like automobiles, textiles, fast moving

consumer goods (FMCGs), consumer durables and retail among

others. Sales of daily consumption items went up by 5-10 per cent

and the FMCG business increased by 18.8 per cent, while the

consumer durable segment also recorded strong volume growth in

the second quarter of the 2008-09 fiscal.

Moreover, approximately 315 hypermarkets are expected to come

into existence in tier-I and tier-II cities across India by the end of 2011, riding on the boom in organised retail sector, says a joint

study by consultancy firm KPMG and industry body, ASSOCHAM.

The study states that 212 Indian towns are capable of sustaining

the development of such hypermarkets in 2008.



Despite the prevailing gloom across global markets, Indian

consumers and companies continue to be a confident, optimistic

lot, with most Indian companies denying any cutbacks from

consumers.

"At both Big Bazaar and ezone, we've seen good growth of about

25 to 30 per cent on a same-store basis," said Manoj Kumar, CEO

of Future Group's ezone. In fact, expensive products like LCD

televisions and laptops are witnessing higher growth than their

cheaper counterparts.

On similar lines, V Ramachandran, LG Electronics' Sales and

Marketing Director, said, "We have not witnessed any pressure so

far. In fact the festival period saw a growth of 40-50 per cent."

Mayank Pareek, Executive Officer, Marketing and Sales, Maruti

Suzuki India, said, "We've seen four distinct phases in 2008. April

to June went okay; August to October saw some weakening. Then

October was huge, with the highest ever retail sales. Then again

November sales dropped only to again rise in December".

In the FMCG sector players continue to report good sales figures.

Marico's CEO-Consumer Products, Saugata Gupta, said, "In our

categories, we've seen no drop."



Rural Consumers

Rural India has provided a beacon of hope to India Inc amidst the

prevailing economic slowdown. Buoyed by a plenteous harvest,

liberal loan-waivers and a growing middle class, the rural

consumer is spending like never before, with FMCG, cars, two-

wheelers and consumer durables accounting for a significant part

of his spending. Dr Rajesh Shukla, senior fellow at the National

Council for Applied Economic Research (NCAER) said, " Most

corporate who have expected sales of 30-40 per cent from the

smaller markets now hope to net in more than 60 per cent of their

sales turnover from rural India."

FMCGs have seen over 20 per cent demand in rural markets

ahead of the 17-18 per cent growth in urban India. According to

AC Nielsen, mainstay categories like hair oils, toothpastes,

shampoos, skin creams and lotions, and even candies saw more

growth in rural markets than urban.

Beverage major Coca-Cola India has already introduced a large-

scale retail programme tailor-made for tier II and tier III towns.

Similarly, LG, Samsung, Sansui, Philips, Maruti, M&M, Tata

Motors, Hero Honda, Nestle and P&G are other major corporates

who are increasing their rural focus.



In spite of the economic slowdown, the Indian FMCG industry is

likely see robust 15 per cent growth in the third quarter of 2008-

09 against the corresponding period last year.

Adi Godrej, Chairman of the Godrej Group, said, "The overall

FMCG market, both urban and rural, have recorded robust growth

rates."

"I think the Indian FMCG industry's sales growth should be good

in Q3. My expectation is that the industry will register a 25 per

cent sales growth in Q3 2008-09," he further said.

According to a FMCG sectoral report by Angel Broking, an analyst

firm, companies will be seeing profits in terms of margin

expansions due to the correction in global commodity prices.

Further, IDFC SSKI Securities has predicted a revenue growth of

18 per cent in the third quarter of 2008-09.

In rural areas, companies like ITC, Godrej Agrovet and DCM

Shriram among others are growing rapidly in rural areas and, in

fact, may outdo their urban counterparts like Reliance Fresh and

the Future Group-owned Food Bazaar chain.

Tremendous growth is being recorded by value-added and

aspirational products. These products are estimated to propel the

FMCG industry to grow by 16 per cent (in sales) during 2008-09,

compared to 14.5 per cent during 2007-08.



Another promising trend is the growth of 'out-of-home

consumption', which is emerging as a new section in the FMCG

sector. With changing lifestyles, the concept of three core meals

fast vanishing, companies like Coca Cola India, ITC, and Dabur

are venturing into this market and are bringing out new product

packaging for the segment.

Significantly, several Indian FMCG companies have also been

aggressively exploring global markets through both acquisitions

and alliances. In 2008, four major acquisitions were made by

three firms—Godrej Consumer Products (GCPL), Emami and

Dabur.

In the past three years, they have acquired about 15 companies

and have spread their presence in more than a dozen countries.

Luxury Products

With the rapidly increasing number of millionaires in India, the

market for luxury brands is growing annually at a compound

average growth rate (CAGR) of about 35 per cent.

According to a FICCI-Yes Bank report, India is set to become a

manufacturing hub for global luxury brands over the next four to

five years. The report stated that with the core strengths in

India's manufacturing sector, the manufacture of luxury items in

India can grow to US$ 500 million. The luxury products market in



India was estimated in excess of US$ 500 million and is likely to

grow at a CAGR of 28 per cent to reach US$ 1.2 billion by 2010.

The market is expected to double by 2015, touching US$ 2.5

billion.

Global brands like Louis Vuitton and Frette are planning to set up

their manufacturing base in India.

Car imports fell in 2008, with consumers choosing to buy Indian

made models by foreign car makers. From 5,000 units in 2006,

7,500 luxury cars were sold in 2008. The market is likely to

further grow to 10,000 units by 2010. Leading luxury car makers

like Mercedes-Benz India, BMW and Audi are expecting improved

sale figures in 2009.

Industry experts believe that the top-end consumer electronics

segment in India is growing by 8-10 per cent annually.

Consumer Durables

A combination of changing lifestyles, higher disposable income,

greater product awareness and affordable pricing have been

instrumental in changing the pattern and amount of consumer

expenditure leading to robust growth of consumer durables

industry.



According to a snap poll carried out by the Confederation of Indian

Industry (CII), 92 per cent the CEOs surveyed were expecting

sales to increase by 10 per cent during 2008-09.

A flurry of hi-technology durables are expected to be introduced in

the US$ 4.09 billion Indian durables market by March-April in

2009. Samsung, LG, Haier and Videocon are among companies

planning new product launches in the coming months.

Korean major Samsung is planning to launch LCD-led live emitting

diode (LED) TVs at US$ 1433, and Blu-ray technology home

theatres and cameras in 2009.

Pranay Dhabhai, Director and CEO , Haier Appliances India, said,

"For the coming season, we plan to import 'dual-tech' larger

capacity (two-door, four-door and six-door refrigerators) from our

US-based factory. Besides, we will also launch ACs with a new

look and feel."

Videocon Industries will also launch high-end LCD TVs and plasma

TVs, along with air conditioners with technological compressors

and new designs.

Similarly, LG Electronics India is also planning to introduce air

conditioners with new technology compressors and revamped

designs.



Shantanu Das Gupta, Vice President-marketing, Whirlpool of India

Limited (WIL) revealed, "We plan to increase WIL's market share

across the four categories of home appliances to 20 per cent plus

by 2010 with more emphasis on washing machines, air

conditioners and microwaves where we are not as strongly

positioned as in the refrigerator category." "In the product

development area the investment in India, across all category, will

be in the region of US$ 25-30 million in the next two years,"

added Dasgupta.

Whirlpool is targeting a 22 per cent share of the US$ 430.23

million washing machine market in India by the end of 2009 and

is launching a range of new products with an investment of US$ 4

million for the same.

Automobiles

Presently, India is the second largest two-wheeler market in the

world, the fourth largest commercial vehicle market, the 11th

largest passenger car market and is expected to be the third

largest automobile market by 2030.

During April 2008, sales rose by more than 17 per cent in the car

segment, while sales in the utility-vehicle segment rose by 31 per

cent, compared to the corresponding month last year.



Maruti Suzuki, India's leading automaker registered a 20 per cent

net sales growth for the June 2008 quarter and it also posted 12

per cent growth in volume terms. Even Hero Honda registered

double digit growth in its volume shipment.

Even though the auto industry witnessed slowdown in more recent

times, car sales from manufacturers to dealers were expected to

stage a recovery in January 2009, after dealers took on new

stocks after selling off a huge inventory pile-up during December

2008.

In January 2009, big auto companies registered positive car sales,

reviving hopes of an upturn in demand. Maruti Suzuki India

achieved its highest-ever domestic and total sales in January this

year. Maruti's dispatches to domestic dealers increased 5.6 per

cent to 67,005 units during the month. Its last biggest dispatch of

65,216 cars took place way back in November 2007. Maruti

posted retail sales of 76,700 vehicles in December, its highest

ever, clearing the stocks piled up at dealerships.

In the luxury segment, even with the global auto industry being

affected by the economic slowdown, luxury cars have posted high

double digit growth in India in 2008.



Mercedes Benz India has registered robust growth in 2008 with

3,625 cars (46 per cent growth), 240 trucks (53 per cent growth)

and 16 bus chassis.

BMW India sold over 2,500 units in 2008 against an estimated

2,000 units. Similarly Audi India registered a growth of 201 per

cent at 1,050 units in 2008 against 349 units in 2007.

Global auto makers are still bullish on India. Describing India as

one of the promising emerging markets Toyota Motor Corporation

is going ahead with its US$ 655.60 million second plant at Bidadi,

near Bangalore.

To drive sales, Daimler Motors, Skoda Auto and Volkswagen, are

entering the US$ 4.50 billion auto loan market in the country.

Indian auto majors, Bajaj Auto, Tata Motors and M&M are already

offering loans through their own finance subsidiaries.

Consumer Electronics

The rapidly growing consumer electronics market in India has

spurred many leading manufacturers of the world to get into

partnerships with local companies to set up shop in the country.

Companies planning to enter India include Japanese testing firm

Saki, Hong Kong's surface mount technology (SMT) company

WKK, Singapore's Mydata (SMT) and USA's Indium (solder paste).



Supply, an electronics market research firm, has projected that

the Indian audio/video consumer electronics industry will grow to

US$ 6.59 billion by 2011, growing at a CAGR of around 10 per

cent.



GROWTH OF NICHE SEGMENTS AND E-

COMMERCE

Companies offering niche services within lighting for example

energy-efficient lighting and interior design are witnessing growth

and are looking at fresh investments. The energy-efficient lighting

solutions market witnessed 30 per cent growth in the year 2008.

Companies like Philips Consumer Lifestyle and Bajaj Lighting are

looking at continued investments in the segment.

Likewise, the US$ 307.37 million modular kitchen segment is

seeing a growth of 40 per cent. Amongst many other companies,

H&R Johnson, a leading tile manufacturer, is also planning to

foray into the market and launch a new kitchens division.

As broadband connectivity grows in India according to the

Telecom Regulatory Authority of India (TRAI) India had 4.73

million broadband internet connections at the end of August 2008

online purchasing is growing. According to a global online survey

by A C Nielsen, a staggering 78 per cent of Indians (who access

internet) make purchases online, with credit cards being the

preferred mode of payment. Online shopping has opened up new

avenues and the survey found that books (46 per cent), electronic

equipments (29 per cent), tours and hotel reservations (24 per



cent), videos/DVDs/games (23 per cent), event tickets (23 per

cent), clothing/accessories/shoes (21 per cent), and music (20 per

cent) are some of the categories in which Indians made online

purchases.

In fact, Indians have emerged as the third biggest credit card

users globally for online purchases.

Consumer Confidence

The Indian consumer remains one of the most upbeat globally.

The Nielsen Global Consumer Confidence study, conducted by

Nielsen, a market research company revealed that Indians are

"the most optimistic lot globally who think that their country will

be out of the economic recession in the next twelve months,"

stated the biannual report. India was at the top of the survey with

114 points, a remarkable 30 points above the global average of

84, and 51 per cent of the Indians surveyed believed that they

would be out of the recession in 12 months.

Furthermore, Indian consumers are also becoming more aware

about the finer nuances of nutritional panels and labels. According

to the Nielsen global online consumer survey, carried out by

Nielsen in April 2008, around 59 per cent Indians said that they

noticed packaged goods' labels containing nutritional information.

With 59 per cent, India tops in the Asia-Pacific region in its



price is often a more dominant feature than fashion or design in

messaging.

So carpeting is a market few would see as ripe territory for new

media. Stay tuned as we find out more about bringing social

media to the marketing of a carpet manufacturer.

Seriously good statistics

Flooring the Consumer was launched in June 2006, and is now

ranked as #108 on the Ad Age top marketing blogs , and has

over 800 subscribers. These are seriously good statistics for a

blog of this type.

More importantly, as you'll see in the coming posts, the blog is

achieving business results. Ms. Whittemore is the Director for In-

Store Innovation for the Wear-Dated carpet fiber division of

Solutia, a $3.8 Billion company with 6000 employees. The

company manufactures nylon fibers that go into residential carpet.

Her work involves training, presentations, and thought leadership

at retail for the flooring industry.

Below, authors of the Carpetology blog. The same team "elf

themselves" at the Office Max site.

http://adage.com/power150/

http://adage.com/power150/



Born out of frustration with traditional marketing

The blog was born out of Ms. Whittemore’s frustration with

traditional marketing to achieve her business objectives. “I had

been flirting with the notion of a blog actively for 9 months prior

to taking that step because I was so frustrated with traditional

marketing, had things to share with my audience of flooring

retailers and retail salespeople, and couldn’t get published fast

enough and frequently enough by the trade press.”

In addition to this challenge, there was minimal budget for a

traditional newsletter, and she felt these had become “inefficient”

as a communication tool in any event.

After attending a Columbia Business School conference on

marketing innovation, Ms. Whittemore says she realized “most of



the people in the room not only blogged, but were also cutting

edge marketers… and true innovators.” She took her content

ideas and her sense of urgency to work, and the blog was born.

About consumers and retailing, not just carpeting

There are now three blogs as well as a Twitter feed, and Facebook

activity. The blogs each have a distinct audience. Flooring the

Consumer is targeted to the trade, and addresses topics such as

marketing to women, the retail experience and consumers in

general.

Carpetology , launched in December 2007, is a consumer blog

about all things carpet.

The third blog, The Smoke Rise Blog , is a community-oriented,

more personal blog.

While the consumers are online, not all the retailers are. There are

retailers keen to reinvent the experience, however, and these are

the ones that Flooring the Consumer reaches, and that keep the

author motivated.



CONSUMER DURABLE MAJORS BID TO FIX

REGION-SPECIFIC PROBLEMS

Hindu business line

Friday, Feb 13, 2004

Richa Mishra

New Delhi , Feb. 12

THE consumer electronics and durables industry is now tackling

the issue of uneven growth experienced within the four regions of

the country. The industry has initiated a debate to address

stagnation and region-specific problems, a Consumer Electronics

& TV Manufacturers Association (CETMA) official said.

The market condition is largely determined by demographic

behaviour and differential tax regimes across States. The colour

television category is expected to clock sales of 9.5 million units in

2004, up from eight million units in 2003. For refrigerators, the

industry is targeting a growth of 3.85 million units, up from 3.5

million units, while for washing machines the industry is hoping to

record a sale of 1.5 million, up from 1.4 million units during the

previous year. In the microwave oven category, the industry is

targeting a growth of 2.75 lakh units, up from 2.4 lakh units in

the previous year.



The flat TV category and the frost-free refrigerator segment are

where the industry expects to maximise growth. In fact, the Flat

TV category is expected to grow from 12-13 per cent to 20 per

cent. To attain these figures, players need to address some macro

issues, industry representatives said.

"To examine the problems faced by the industry in each region

and the factors that can push growth, we have started

brainstorming sessions among players," the CETMA official told

Business Line . The first of such sessions was held in Chennai last

December followed by another in Mumbai this January.

Elaborating on some region-specific problems, the official said,

"West zone has been experiencing marginal negative growth

compared with the North. The reasons for this includes the fact

that products are more expensive in the West zone due to higher

sales tax."

When compared with the growth of around 10 per cent in the

Northern market for washing machines and over 25 per cent in

the microwave oven category, the West zone recorded marginal

growth in washing machines and less than 20 per cent in

microwave ovens. In the CTV category, West zone experienced a

growth of 12 per cent as against a 17 per cent growth

experienced by the North.



In the North zone, the issue of capacity fragmentation due to

exemptions enjoyed by units set up in Uttaranchal and Himachal

Pradesh is a concern. Earlier, companies used to have one plant

manufacturing more than a lakh units but due to these sops, they

have set up more than one plant, leading to economies of scale

and quality being affected. The industry has been trying to

address these issues and logistical problems. Consumer

electronics (CTVs and ACs) are not a priority when compared with

the home appliances category in the Southern market. The lowest

penetration, however, is experienced in the East. It is necessary

to maintain a healthy relationship between industry and trade, as

trade is an interface between industry and consumer, the CETMA

official said.



CONSUMER SOCIALIZATION: HOW DO

CHILDREN BECOME CONSUMERS

To begin with, socialization could briefly be described as the

process whereby an infant gradually becomes a member of

society and acquires the skills that are required to function in the

culture he or she is born into. The child is active in this process.

This is true even of a newborn baby, which has biological needs or

demands which affect those taking care of it.

Socialization has no end. Even though it is more intense in infancy

and childhood, learning and adjusting to new situations is a part

of the whole lifecycle. In modern society we even have to go

through periods of re-socialization in some respects.

Although socialization is a process everyone has to go through, it

is not the same for every one. Boys are socialized in different

ways than girls. Families from different social classes socialize

their children in different ways. The same differences could be

discerned between ethnic communities, and so on. There are also

a lot of competing influences already in a child’s primary

socialization. Early on the family – the primary or main socializing

agency has to compete with other agencies of socialization, as

e.g. the school, peer-groups or the media.



Consumer socialization could be defined in different ways. In

advertising research it has e.g. been defined as “the

developmental process by which young people acquire the

knowledge, attitudes and skills relevant to their functioning in the

marketplace” (Lowery & Fleur 1988, p. 410). This seems to be a

reasonable definition on an abstract level. Certainly, consumption

presupposes at least knowledge and skills. The real problem starts

when we ask what kind of knowledge or skills it is that is required

in this respect. Is it e.g. knowledge about the act of consumption,

commodities, prizes or the legal rights of consumers? It could, of

course, include all of those things, but if it does we can easily

conclude that there is no end to this2process. Or, put in other

words, if this is what is required no one will ever become fully

socialized as a consumer.

And this is, of course, true. As I said earlier socialization is an

unfinished process. This holds true for consumer socialization as

well. However, this is not a major problem when it comes to

define or understand consumer socialization from a child’s

perspective. Irrespective of the fact that consumer socialization

continues the whole life process, it has to start and develop from

a certain point in childhood. And at least one thing is certain:

although we are born with needs, we are not born as consumers,

it is something we become.



The question is then: when does this socialization start? Obviously

there is no clear point in the development of a child that can be

depicted as the “start” or beginning of its consumer socialization.

There are two main reasons for this. The first is that every child,

at least in present days societies, is born into a social context

where consumption plays an important role. The second is that it

is in many cases impossible to distinguish clearly between the

knowledge and skills that children require to function as

consumers from other forms of abilities. This could e.g. be

illustrated by the ability to read, which is scarcely considered as a

trait in consumer socialization, but nevertheless is something that

is required of any consumer in the present society. The same is

true if we consider the ability that has been called media literacy.

Before the child could make sense of TV ads he or she must have

acquired some basic skills in reading and decoding media texts.

Hence, consumer socialization in many cases presupposes and isbuilt upon prior or other forms of socialization. In the social and

cultural settings in which a child is born and comes to maturity,

consumer socialization will furthermore have an informal

character. That is, it will not except in rare cases be part of an

institutionalized or consciously pedagogical process guided by

some sort of curriculum. And if we look to later stages in an



individual’s life formal socialization in the form of some kind of

consumer schooling is still rare in most countries.

Thus the first informal patterns which affects a child’s consumer

socialization in contemporary societies will be determined by a

complex set of factors, economic as well as social and cultural. In

this way, differences in economic, social and cultural capital

among families affects a child’s consumer values, attitudes and

practices from infancy to adolescence and even beyond those life-

stages. This understanding of the influence of different types of

family background is common knowledge. Therefore, it comes as

no surprise that indicators of family background, as e.g. social

class, income, education and so forth, correlate with children’s

and youth’s views on consumption and advertising (see e.g.

Jorgensen et. al. 1992; Bjurstrom 1997, p. 345ff).

Probably those differences also affect when children begin their

careers as independent consumers. The conditions for letting

children consume on their own are of course better in prosperousthan in poor families; and presumably this is one factor which

explains why the age at which children themselves begin to

purchase consumer goods varies. But nevertheless this transition

from dependent to independent consumption marks an important

step in the consumer socialization of any child in contemporary

societies.



Until the age however where someone start to earn his or her own

money this independence is still some kind of semi-dependence.

Even if children are free to spend their pocket money on whatever

they choose at an early age they are still dependent on their

parents to do so until 3 their late teenage years in most

contemporary societies. To become a fully independent or

sovereign consumer is still and in some respects even more so

than before – a part of being adult.

The main reason for this is that young people’s entrance into the

labor market successively has been postponed to higher ages.

This process even accelerated dramatically in e.g. Sweden in the

1990s, when the rate of young people aged 16 to 19 years in the

labor force decreased to about 25 percent and the rate of those

aged 20 to 24 to about 60 percent (Ungdomsstyrelsen 1997, p.

21). Although the decline seems to have stabilized – and even

reversed slightly – in the last three-four years it still shows that

most young people spend their time studying until they reach the

age of twenty or beyond. Of course, this does not mean that they

do not have their own money to spend. Only that this money to a

larger extent than before comes from loans to study and other

forms of subsidiary funds. And this, in turn, means that the

disposable income often is less as well as the possibilities to raise

it compared to having a job.



So, one could conclude that most young people become

autonomous consumers at a relatively late age today. And in this

sense there is still a strong relationship between production and

consumption in contemporary post-industrial societies. However,

any attempt to make a clear distinction between productive and

consumptive activities is fraught with difficulty. Ever since the

nineteenth century consumption has primarily been seen as an

expression of hedonism or a pleasurable leisure activity, which

has contributed to disguise the fact that it is often experienced as

a kind of labor in people’s everyday life. Certainly, people shop for

fun, but most of their daily shopping does not follow this model

(see Miller 1998 and Miller et al. 1998). The purchase of common

goods, as e.g. basic food products, must rather be seen as a part

of the everyday labor that transcends the logic of market

exchange.

Consumption is often a dull everyday activity, but can also be

something extraordinary, which marks an interruption in people’s

everyday life. Overall consumption is an activity filled with

pleasure as well as discomfort. But what is consumption? It is, of

course, pointless to discuss consumer socialization or any impact

of consumption without some notion of what it means to

consume.



Consumption According to the Concise Oxford Dictionary the word

“consumption” refers to the “purchase and use of goods”.

Although this is far from an exhaustive definition of consumption,

it nevertheless points to the fact that it is an activity or practice.

In the Swedish language this is even confirmed by the word

handla , which is the most commonly used word for “purchase” or

“buy”, but also means to “act”. However, etymologically the word

“consumption” is derived from Latin’s consu´mere , which means

to “devour” something. This meaning is still present, although the

word “consumption” covers a wider semantic field in modern

languages.

Seen as a modern practice, consumption covers a wide range of

acts or moments which distinctively could be described as the

selection , purchase , use and disposal of goods or services

(Bjurström et. al. 2000, p. 42ff and Becker et. al. 2001).

According to this definition the purchase is the moment that fulfils

the consumption process. The purchase not only confirms that the

customers have made their choice, but also transforms them into

the rightful owners and users of the goods chosen with an implicit

responsibility for the future disposal of 4 it. But far from all

selection processes result in purchases. Window-shopping even

confirms that this process can become an end in itself.

Nevertheless, even if you only consume something with your eyes



and do not complete the whole consumption process it could still

be seen as a part of it.

Actually, each of the fou of consumption contains a variety of

possible acts. You may e.g. select the goods from a TV ad, in a

shop or from the advice of a good friend. You may pay for it in

cash, on account or by credit card. The realization of a

commodity’s use value may, of course, be very different

depending on what kind of goods you have bought.

And the moment of use may vary in time from seconds to years

and in some cases even last for several generations. A hamburger

is literally consumed immediately, while a TV set or a car is used

for years and objects like furniture or jewelry may be passed over

from generation to generation. The latter case also illustrates one

way to dispose an item, namely as a gift. Actually, there seems to

be four main types of disposal of consumer goods: either they

may be destroyed , traded in exchange for other goods, sold or

given away as gifts .

If an item used for a while is sold it once again becomes a

commodity and is re-introduced into the logic of market

exchange. Most probably though this re-introduction will be on a

different market than where it was originally introduced, as e.g.

an auction, a flea-market or a second-hand shop. But items that



are traded in exchange for other objects or given away as gifts

will break with the logic of market exchange. The former follows

the logic of bartering and the latter the logic of gift exchange.

Both barter and gifts have the character of pre-modern or even

archaic exchange forms.

Historically both precede the rise of modern market exchange. But

they still live on. Barter exchange is a quite dominant feature of

the so-called black or gray market and gifts are constantly given

and received in contemporary societies.

Here I will argue that gift exchange plays a central role in

consumer socialization. This also means that I will break with a

strictly economic understanding of consumption; not least

because I believe that such a perspective prevents a more

thoroughly understanding of the process of consumer

socialization. Foremost because a pure economic understanding

often rests on the implicit, but nevertheless normative,

presumption that the end result of this process should be thecreation of homo economicus , the rational, calculating and

wellinformed consumer who operates in the market economy. By

this I do not mean to deny the importance of such traits, but only

to emphasize that there are aspects of consumer socialization that

are not visible to the eye of homo economicus ; the role played by

the gift economy is certainly one of them.



Gift and commodity economy It is hardly a new discovery that

gifts follows a different logic of exchange than commodities. At

least it dates back to 1924 when Marcel Mauss’ (1990) well-known

and influential study Essai sur le don (Essay on the gift) was

published. By focusing on gift-giving practices in archaic societies

Mauss came to the conclusion that the market did not arise with

the invention of money. Rather, money replaced the rules

governing an ongoing circulation of gifts and thereby created the

prerequisite for the rise of a strictly economic market.

The successive rise of an economic market did not, however,

abolish the archaic forms of gift exchange. Gift-giving has

remained a common practice even in industrial and post-industrial

5 societies, and is still a practice that follows a different economic,

social and cultural logic than the exchange of commodities.

Compared to the logic of giving and receiving gifts the logic of

commodity exchange is quite simple. The main reason for this is

that commodity exchange is universalistic and thus moreautonomous in relation to social and cultural contexts than gift

exchange. The forms and rules of the latter are always deeply

socially and culturally embedded, and therefore vary considerably

from context to context. But the rules do not only vary, they are

also as Mauss (1990 p. 13ff) was the first one to point out partly

contingent and unconscious to those who follow them, not least



when it concerns the obligation to return presents. In this way

gifts and presents are not only a blessing, but give rise to

conjoined feelings of pleasure and displeasure or comfort and

discomfort. This also reflects that in contrast to commodities the

exchange of gifts is based on and confirms interpersonal

relationships which can be described in terms of complex feelings

of love, appreciation, devotion, sacrifice, and so forth. In

expressing feelings like these the gift economy contradicts the

values of the commodity economy, which are based on the

exchange of equivalent economic values and the maximization of

economic profit. Gift economy is based on disinterestedness,

commodity economy on interest in a narrow economic sense.



CHALLENGES FACING THE CONSUMER

ELECTRONICS INDUSTRY

With the increase in price wars due to the entry of new players in

the market and increase in manufacturing capacity by some

original manufacturers, the profitability and margins of the

companies are adversely affected. Poor distribution network in

semi-urban and rural areas. Low awareness of consumer

electronics products in rural India. Presence of gray market in

consumer electronics products, especially in DVD player, music

players. Companies need to increase focus on product

differentiation to address various segmental specific needs.

With the increase in access to Internet information, and

availability of wide range of choices, consumers have become

quite smart. They want the product that is easy-to-handle, good

in quality and low in price. Most importantly, consumers want

some guarantee for the product that they are buying. They look

for the product that can be used for many years. The role of

electronic companies doesn't end on the sale of the product, but

continues till the end of guarantee period.



DUTY CUT TO SPUR CONSUMER DURABLES

INDUSTRY LIKELY

February 25, 2008

In a bid boost the consumer durables industry that has lately

become a drag on the broader economy, chances are that Finance

Minister P. Chidambaram would announce cut duties.

Industry bodies like the Consumer Electronics & Appliances

Manufacturers Association have sought a cut in excise duty from

16 per cent to 8 per cent. The general consensus, however, is that

a moderate duty cut to 12 per cent could be in the offing.

In fact, alarmed by the economic slowdown in the second half of

the current fiscal, particularly a contraction of 1.3 per cent in the

consumer durable industry during the April-December period,

Chidambaram has already asked the public sector banks to make

available more credit for housing and consumer durables.

Given this backdrop, the Rs 35,000-crore consumer durables

industry is expecting tax rationalisation, among others, from the

coming budget, which could translate into a reduction of between

5 per cent and 10 per cent in prices at retail outlets.

The industry is of the opinion that 10 per cent customs duty on

critical inputs such as CPT, tuner and other parts is adversely



affecting it, while a similar duty on LCD and plasma panels is

equal to import duty on finished TV sets. “Manufacturing of LCD

TVs will get a fillip if the customs duty on panels of LCD TVs is

brought down to zero per cent,” said Ravinder Zutshi, Deputy

Managing Director, Samsung India.

Vivek Mishra, a partner at Ernst & Young, expects a reduction in

the customs duty rate for both consumer and non-consumer

goods from the current 10 per cent to 7.5 per cent. Also, the

central sales tax (CST) rate could be reduced from 3 per cent to 2

per cent, he said.

Manufacturers are seeking reduction of customs duty on basic raw

materials such as plastic, aluminum, copper and steel from 0-10

per cent at present to zero per cent, and the peak import duty on

raw materials from the current 7.5 per cent to 2 per cent.

In view of duty-free import of colour TV sets from Thailand, they

want the customs duty on inputs to be placed at par with the

customs duty on finished products.

According to V Ramachandran, director, sales and marketing, LG

Electronics India, “With the economy on a high and changing

lifestyles, consumers are looking forward to better technology and

as such there is great potential in India for telecom, digital

displays and information technology. A budget supporting these



industries will act as a catalyst in increasing production of such

high tech products”.

Meanwhile, the fast-moving consumer goods (FMCG) industry is

also looking for some tax reliefs from the budget. For instance, in

view of promoting cleanliness and hygiene, the industry is hoping

for the central value-added tax (CENVAT) on detergents is

reduced to 8 per cent from 16 per cent at present.

Likewise, the food processing industry is hoping for exemption

from the existing central sales tax of 3 per cent, while the bottled

water industry is looking for a reduction in excise duty from 16

per cent to 4 per cent



SOCIALIZATION

The term socialization is used by sociologists , social

psychologists and educationalists to refer to the process of

learning one’s culture and how to live within it. For the individual

it provides the skills and habits necessary for acting and

participating within their society. For the society, inducting all

individual members into its moral norms, attitudes, values,

motives, social roles, language and symbols is the ‘means by

which social and cultural continuity are attained

Types

Primary socialization

Primary socialization occurs when a child learns the

attitudes, values, and actions appropriate to individuals as

members of a particular culture. For example if a child saw

his/her mother expressing a discriminatory opinion about a

minority group, then that child may think this behavior is

acceptable and could continue to have this opinion about

minority groups.

Secondary socialization

Secondary socialization refers to the process of learning

what is appropriate behavior as a member of a smaller



Agents of Socialization

Agents of socialization are the people and groups that influence

our self-concept, emotions, attitudes, and behavior.

1. The Family . Family is responsible for, among other things,

determining one's attitudes toward religion and

establishing career goals.

2. Education . Education is the agency responsible for

socializing groups of young people in particular skills and

values in society.

3. Peer groups . Peers refer to people who are roughly the

same age and/or who share other social characteristics

(e.g., students in a college class).

4. The Mass Media .

5. Other Agents: Religion, Work Place, The State.



MEDIA AND SOCIALIZATION

Theorists like Parsons and textbook writers like Ely Chinoy (1960)

and Harry M. Johnson (1961) recognized that socialization didn’t

stop when childhood ended. They realized that socialization

continued in adulthood, but they treated it as a form of specialized

education. Johnson (1961), for example, wrote about the

importance of inculcating members of the US Coastguard with a

set of values to do with responding to commands and acting in

unison without question.

Later scholars accused these theorists of socialization of not

recognizing the importance of the mass media which, by the

middle of the twentieth century were becoming more significant

as a social force. There was concern about the link between

television and the education and socialization of children it

continues today but when it came to adults, the mass media were

regarded merely as sources of information and entertainment

rather than moulders of personality. According to these scholars,

they were wrong to overlook the importance of mass media in

continuing to transmit the culture to adult members of society.

In the middle of the twentieth century the pace of cultural change

was accelerating, yet Parsons and others wrote of culture as

something stable into which children needed to be introduced but



which adults could simply live within. As members of society we

need to continually refresh our ‘repertoire of habits, beliefs, and

values, the appropriate patterns of emotional response and the

modes of perception, the requisite skills and knowledge’ as Chinoy

(1961: 75) put it.

Some sociologists and theorists of culture have recognized the

power of mass communication as a socialization device. Dennis

McQuail recognizes the argument:

The media can teach norms and values by way of symbolic reward

and punishment for different kinds of behaviour as represented in

the media. An alternative view is that it is a learning process

whereby we all learn how to behave in certain situations and the

expectations which go with a given role or status in society. Thus

the media are continually offering pictures of life and models of

behaviour in advance of actual experience.



ANALYSIS OF QUESTIONNAIRE

Q1 If you were to buy a large electrical appliance such as a

colour TV or dishwasher would you expect the

manufacturer to provide a warranty?

0

1020

3040

5060

7080

90

Yes No

Serie

Yes 90

No 10

As it can be seen from the data above that 90% of the people look

for warranty while buying any electrical appliance. Since electrical

appliances are subject to repairing customers look for guarantee

as it provides them the satisfaction.



Q2 how long would you expect that warranty to be?

Less than one year 37

One year 20

Two years 10

Three years 10

Four years 10

Five years 0

More than five years 5

Varies by manufacturer 2

Varies by retailer 6

Don’t know 0



Ø Less

Ø

Ø Two

Ø

Ø Four

Ø Five

Ø More

Ømanuf

Customers also expect the guarantee provided to them to be long

enough.



Q 3Have you heard of extended warranties?

Yes 80

No 20

0

10

20

30

40

50

6070

80

Ø Yes Ø No

Serie

More than 80% of the people are aware of the extended

warranties.



Q4 Extended warranties may be offered to people who buy

electrical goods so the goods can be repaired free of charge

beyond the period of the manufacturer’s basic guarantee.

What types of company offer extended warranties?

Manufacturers 40

Retailers/shops 45

Insurance companies 5

Other answers (SPECIFY) 0

Don’t know 10

0 20 40 60

Ø Manufacturers 1

Ø Retailers/shops 2

Ø Insurance companies 3

Ø Other answers (SPECIFY) 4

Ø Don’t know 5

Serie

A survey conducted also showed the major companies which

offered the extended warranties. The retailers occupied the top

most position followed by the manufacturers.



Q 5 Extended warranties may include warranties backed by

insurance and warranties that are service contracts. As far

as you know, are there any differences between these

types of warranties?

Yes 1 10

No 2 15

Don’t know 3 75

Ø Yes 1

Ø No 2

Ø Don’t kno

Not much people are aware about that extended warranties are

backed by insurance products.



Q 6 Which of these types of appliance do you think are

most reliable is that will last the longest before needing

repairs?

Brown goods such as

colour TVs 40

White goods such as

dishwashers 25

Fridges or freezers 25

PCs or game consoles 10

Don’t know 0



05

101520253035

4045

Ø Browngoods such

as colour TVs 1

Ø Whitegoods such

asdishwashers

2

Ø Fridges orfreezers 3

Ø PCs orgame

consoles 4

Ø Don’tknow 5

Serie

According to the survey on electrical appliance the tv lasts the

longest.



Q7 what all do you look when u go to buy an electrical

appliance

Price 35

Durability 45

Quality 20

Ø Price

Ø Durabilit

Ø Quality

When customers go to buy a product they look mostly for

durability of the appliance and later comes the price. As it can be

seen 45% of the people look for durability as compared to 35%

who go for price.



Salesperson has always a major role to play in the sales of any

product. It is convincing power, communication skills and

handling pressure that converts the decision into sales. Thus the

sales person needs to be very effective and effiecient and also

customer friendly.



Q9. Who take the decision whenever you go to take the

consumer durable?

Men 65

Women 35

Ø Men

Ø Wome

It is generally the men who influence the decision of purchasing a

product.



CONCLUSION

As it can be seen from the data above that 90% of the

people look for guarantee while buying any electrical

appliance. Since electrical appliances are subject to

repairing customers look for guarantee as it provides them

the satisfaction.

Customers also expect the guarntee provided to them to be

long enough

There are various parameters which are looked upon while

buying a product. But the quality attains the highest place

followed by the service and price

It is generally the men who influence the decision of

purchasing a product.

Salesperson has always a major role to play in the sales of

any product. It is convincing power, communication skills

and handling pressure that converts the decision into sales.

Thus the sales person needs to be very effective and

effiecient and also customer friendly.

When customers go to buy a product they look mostly for

durability of the appliance and later comes the price. As it



can be seen 45% of the people look for durability as

compared to 35% who go for price.

According to the survey on electrical appliance the tv lasts

the longest.

Not much people are aware about that extended warranties

are backed by insurance products.

More than 80% of the people are aware of the extended

warranties.

The consumer durables market in India is valued at US $ 4.5

billions currently. In 2006, microwave ovens and air conditioners

registered a growth of about 25%. Frost-free refrigerators have

registered significant growth as many urban families are replacing

their old refrigerators. Refrigerator sales amounted to 4.2 millions

in 2006, whereas the production of the refrigerators went up by

17% as compared to the preceding year

With the increase in access to Internet information, and

availability of wide range of choices, consumers have become

quite smart. They want the product that is easy-to-handle, good

in quality and low in price. Most importantly, consumers want

some guarantee for the product that they are buying. They look

for the product that can be used for many years. The role of



electronic companies doesn't end on the sale of the product, but

continues till the end of guarantee period.

Highly involved customers tend to process product information at

deeper levels of understanding than the ones with low

involvement. For example educated parents in urban areas are

highly involved in baby food purchase decisions than rural

uneducated parents. They also retain this information for long

time.

In this case marketers need to provide information cues to help

the consumers to retrieve information from memory. But when

the target is low involvement consumers, marketers should make

the necessary information as accessible as possible at the time of

selection and buying of the product.



REFERENCES

www.pondiuni.org/DDE/consumer%20Behaviour.pdf

http://www.abcjmp.com/jump2/?

affiliate=nhost&subid=2733&terms=socialisation

%20process%20in%20consumer%20durable%20industry

http://www.naukrihub.com/india/consumer-

durables/overview/classification/electronics/challenges/

www.users.muohio.edu/shermalw/EDP603SM2005/EDP60s

m05-group-paper.doc

en.wikipedia.org/wiki/Durable_good

economictimes.indiatimes.com/News/News-By-

Industry/Cons-Products/

www.hindu.com/2005/10/17/stories/2005101706261400.ht

m

www.livemint.com/2008/02/10231454/Consumer-durables-

cos-see-rise.html

www.gemoney.in/en/happyhelp/consumer.html



ANNEXURES

Questionnaire

Q1 If you were to buy a large electrical appliance such as a colour

TV or dishwasher would you expect the manufacturer to provide a

guarantee?

Yes

No

Q2 And how long would you expect that guarantee to be?

Less than one year

One year

Two years

Three years

Four years

Five years

More than five years

Varies by manufacturer

Varies by retailer

Don’t know



Q 3Have you heard of extended warranties?

Yes

No

Q4 Extended warranties may be offered to people who buy

electrical goods so the goods can be repaired free of charge

beyond the period of the manufacturer’s basic guarantee. What

types of company offer extended warranties?

Manufacturers 1

Retailers/shops 2

Insurance companies 3

Other answers (SPECIFY) 4

Don’t know 5

Q 5 Extended warranties may include warranties backed by

insurance and warranties that are service contracts. As far as you

know, are there any differences between these types of

warranties?

Yes 1

No 2

Don’t know 3



Q 6 Which of these types of appliance do you think are most

reliable ie that will last the longest before needing repairs?

Brown goods such as colour TVs 1

White goods such as dishwashers 2

Fridges or freezers 3

PCs or game consoles 4

Don’t know 5

Q7 What all do you look when u go to buy an electrical appliance

Price

Durability

Quality

Q8 How can a salesperson affect electrical sales

Convincing power

Handling pressure

Solving customer problems

Communication skills

Q9 who take the decision whenever u go to purchase a consumer

durable products

Men



Women

Q10 what is the most important factor in consumer durables

Price

Quality

Service

Durability

Amitesh Mishra Dissertation

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