APROJECT REPORT

ON

“MARKET ANALYSIS OF LG CONSUMER DURABLES”

With Reference to

AMRTANSH ENTERPRISES, Bhopal(Authorized LG Electronics Dealer)

Under the Guidance of Prof. (Dr.) Pawan Mishra, HOD Submitted in Partially Fulfillment of

Undergraduate Degree in Commerce (BCom.)

By

NIKITA RAJPUT,(Fifth Semester)

Rajeev Gandhi College, Bhopal

AcknowledgementIn this project I have made an honest and dedicated attempt to make

the research material as authentic as it could. And I earnestly hope that it

provides useful and workable information and knowledge to any person

reading it.

During this small time frame of two months in which the project reached its

completion, there were a few people whom I would like to make a mention of

and without whose help the project would have never seen the light of the

day.

I also thank to my internal guide Prof. (Dr.) Pawan Mishra, HOD of

Commerce Department, Rajeev Gandhi College, Bhopal for his timely

response, which immensely helped in giving the project the initial direction it

needed.

I would like to thank my external guide Mr. Prateek Gaur, Amrtansh

Enterprises, Bhopal (Authorized Dealer of LG Electronics) who gave me a free

hand as far as going about the project work was concerned.

Last, but not the least, my heartfelt love for my parents and my friends, whose constant support and blessings kept me enthusiastic throughout this project.

DECLARATION

I will take pleasure in declaring that the project work entitled

“Market analysis of LG consumer durables” that is undertaken by me is

an original and authentic work done by me. This project is being submitted for

partial fulfillment of requirement of Bachelor in Commerce. (BCom.) from

Rajeev Gandhi College, Bhopal.

The content of this report is based on the information collected by me

during my tenure at Amrtansh Enterprises, (Authorized Dealer of LG

Electronics Ltd.) at BHOPAL for two months of training from 01st of September

to 31st October 2012.

Place: Bhopal

(_______________)

NIKITA RAJPUT,BCom. (Fifth Semester)Roll No.:1023451208247

Preface

We look our training at AMRTANSH ENTERPRISES, Bhopal. (Authorized

Dealer of LG Electronics). During the training was to get an overview of the

Market Analysis of LG Consumer durables of Bhopal district. It was a firsthand

experience to get exposed to the professional set-up and face the market,

which was really a great experience. Training period was a learning experience.

When business is involved, an experience counts a lot. Experiences are an

instrument, which leads towards success. Working with Amrtansh Enterprises

and LG Electronics, has been a pleasure.

I take this opportunity to present the project report and sincerely hope

that it will be as much knowledge enhancing to the readers as it was to use

during the fieldwork and the compilation of the report.

TABLE OF CONTENTS* EXECUTIVE SUMMARY

* INTRODUCTION

Introduction to Study

Opportunity

Brands in Consumer Electronic Sector

* COMPANY PROFILE

Global Operation

Product and Services offered byCompany

Mission of Company

* DISTRIBUTION & MARKETTING

The Logistics (Supply Chain Management)

Customer Service

Consumer Survey

* RESEARCH METHODOLOGY

Objective of the Project

Research Design

Questionnaires

* Analysis

* Recommendations & Suggestions

* Conclusion

* Limitation

* BIBLIOGRAPHY

Executive summaryIndian Consumer durables market used to be dominated by few domestic

players like godrej Voltas allwyn and kalvinater. But post liberalization much

foreign company have entered into Indian market dethroning the Indian player

and dominating Indian market the major categories in the market CTV,

REFRIGRATOR, AIR CONDTIONERS AND WASHING MACHINE

India being the second largest growing economy with huge consumer

class has resulted in consumer durables as the fastest growing industries in

India LG, SAMSUNG the two Korean companies has been maintaining the lead

in the industries with LG being leader in almost all the categories.

The rural market is growing faster than the urban market, although the

penetration level is much lower .The CTV segment is expected to the largest

contributing segment to the overall growth the industry. The rising income

levels double-income families and consumer awareness are the main growth

drivers of the industries.

Consumer durables major LG Electronics India Pvt Ltd (LGEIL) will invest nearly

Rs 500 crore in India this year in research and development, brand-building

and other marketing initiatives.

The company, having a turnover of Rs 9,500 crore and market share of 26 per

cent, is investing Rs 360 crore on brand-building and other marketing initiatives

and around Rs 140 crore on research and development, besides launching new

platforms in information technology and related areas,

LG’s innovative ‘211 campaign’ to provide quality after-sales service, will also

be expanded from the existing 22 to 40 cities by next month,

The campaign, for which IT infrastructure has been set up, includes the

company’s response to customer complaint within two hours. The fixing time

for complaints varies from one hour to a maximum of 24 hours.

Scope of project

This project gives me great exposure to the consumer durable market because

it includes product knowledge and the filed job in which I have visited the store

comes under the region of Pune. During this project I also took part in the

exhibition of LG which held for the purpose branding and awareness of LG

product. This project helps me to know the market practically. My job was

during this project to see the market share and also the display share of the LG

product in the store. LG always insist the 50% display share of LG product

because LG believes that “JO DIKHTA HAI WO BIKTA HAI”.

My job include while visiting the shops

1. Calculate the display share of the LG product in every shop which comes

under Pune region.

2. Collect the data of actual monthly sale of the LG product in every shop.

3. Check the availability of LG catalogue and the POPs in the store.

4. Find out the problems that the dealer are facing while sailing the LG

product.

5. Find out the costumer response for the LG product by asking the owner

of the shop.

6. Find out the distributer name from whom they purchasing their product

and also weather they have direct dealership and which brand.

7. Check that demo calls are attended or not

Key findings:-

1. By calculating the display share we found that in most of store LG has

50% display share almost all categories.

2. By the actual monthly sale of particular store we came to know the

capacity of the store and how much product can they sale.

3. It helps us to know that weather dealer is capable of being a direct

dealer of LG or not and it also helps to find out the new dealer who are

capable of being the dealer of LG.

4. We also came to know while visiting the shops that there was big

problem of after sale service.

5. Many dealers were facing the problem of after sale service because

there is no follow up calls from LG.

6. Demo calls also not done properly.

INTRODUCTION

Before the liberalization of the Indian economy, only a few companies like

Kelvinator, Godrej, Allwyn, and Voltas were the major players in the

consumer durables market, accounting for no less than 90% of the market.

Then, after the liberalization, foreign players like LG, Sony, Samsung,

Whirlpool, Daewoo, and Aiwa came into the picture. Today, these players

control the major share of the consumer durables market.

Consumer durables market is expected to grow at 10-15% in 2007-2008.

It is growing very fast because of rise in living standards, easy access to

consumer finance, and wide range of choice, as many foreign players are

entering in the market

With the increase in income levels, easy availability of finance, increase in

consumer awareness, and introduction of new models, the demand for

consumer durables has increased significantly. Products like washing

machines, air conditioners, microwave ovens, color televisions (CTVs) are

no longer considered luxury items. However, there are still very few players

in categories like vacuum cleaners, and dishwashers

Consumer durables sector is characterized by the emergence of MNCs,

exchange offers, discounts, and intense competition. The market share of

MNCs in consumer durables sector is 65%. MNC's major target is the

growing middle class of India. MNCs offer superior technology to the

Consumers whereas the Indian companies compete on the basis of firm

grasp of the local market, their well-acknowledged brands, and hold over

wide distribution network. However, the penetration level of the consumer

durables is still low in India.

Classification of consumer durables sector

1. Consumer electronic include vcd/dvd, home theatre, music player, color

television (CTVs), cameras, camcorders, portable audio, Hi-Fi, etc

2. White goods include dishwashers, air conditioners, heaters, washing

machines, refrigerators, vacuum cleaners, kitchen appliances, non-kitchen

appliances, microwaves, built-in appliances, Tumble dryer, personal care

product etc.

3. Moulded luggage include plastics

4. Clocks and watches

5. Mobile phones

Scope

1. In term of purchasing power parity (ppp), India is the 4th largest economy in the world and overtake Japan in the near future become the 3rd largest.

2. Indian consumer durable market is expected to reach $400 billion by on 2010

3. India has the youngest population amongst the major countries. There are lot of people in the different income categories nearly the two third population is below the age of 35 and nearly 50% is below 25.

4. 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 household in India.

5. The upper-middle and high-income household in urban areas are

expected to grew to 38.2 million in 2007 as against 14.6 million in 2000.

Opportunity

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 level, i.e.increase in purchasing power of consumers.

5. Easy availability of finance.

Threats

Higher import duties on row materials.

Cheap imports from Singapore, China and from other Asian countries.

Brands in consumer electronic sector

MNCs NATIONAL REGIONALLG )SAMSUNG ) KOREA ONIDA BUSHHYUNDAI ) VIDEOCON CROWN

BPL SALORATCL ) CHINA GODREJ T-SERIESHAIER ) VOLTAS WESTON

IFB BELTAKPHILIPS ) HOLLAND OSKAR

PANASONIC )SHARP )HITACHI )SANSUI ) JAPANAKAI )AIWA

WHIRLPOOL )ELECTROLUX

TODAY Consumer durables sector is characterized by the emergence of

MNCs, exchange offers, discounts, and intense competition. The market share

of MNCs in consumer durables sector is 65%. MNC's major target is the

growing middle class of India. MNCs offer superior technology to the

LG, SAMSUNG the two Korean companies has been maintaining the lead

in the industries with LG being leader in almost all the categories.

The company, having a turnover of Rs 9,500 crore and market share of 26 per

cent, is investing Rs 360 crore on brand-building and other marketing

initiatives and around Rs 140 crore on research and development,

besides launching new platforms in information technology and related areas,

LG Electronics is one of the leading companies in the field of electronics with a

global presence in many countries. . Before briefing, I have divided the

introduction part into three main sub parts.

1. LG Global

2. LG India

3. LG Pune

History of company

The company was originally established in 1958 as Gold Star, producing radios,

TVs, refrigerators, washing machines, and air conditioners.

The LG Group was a merger of two Korean companies, Lucky and Gold Star,

from which the abbreviation of LG was derived. The current "Life's good"

slogan is a backronym. Before the corporate Name change to LG, household

products were sold under the Brand name of Lucky, while electronic products

were sold under the brand name of Gold Star. The Gold Star brand is still

perceived as a discount brand.

In 1995, Gold Star was renamed LG Electronics, and acquired Zenith Electronics

of the United States.

Global Operation

LG Electronics is playing an active role in the world market with its assertive

global business policy. As a result, LG Electronics controls 110 local subsidiaries

in the world with around 82,000 executive and employees.

LG Group

1. LG.Philips LCD

2. LG Chemical

3. LG Telecom

4. LG Powercom

5. LG Twins

6. LG Dacom

Business areas and main products

Mobile communications

(a) CDMA Handsets,

(b) GSM Handsets,

(c) 3G Handsets,

(d) Cellular Phones

Digital appliance

a) Air Conditioners,

b) Refrigerators,

c) Microwave Ovens,

d) Washing Machines,

e) Vacuum Cleaners,

f) Home Net,

g) Compressors for Air Conditioners and Refrigerators

Digital display

a) Plasma TVs,

b) LCD TVs,

c) Micro Display Panel TVs,

d) Monitors,

e) PDP Modules,

f) OLED Panels,

g) USB Memory,

h) Flat Panel Computer Monitors

Digital media

a) Home Theater Systems,

b) DVD Recorders,

c) Super Multi DVD Rewriters,

d) CD±RW,

e) Notebook PCs,

f) Desktop PCs,

g) PDAs,

h) PDA Phones,

i) MP3 Players,

j) New Karaoke Systems,

k) Car Infotainment

VISION

Global Top 3 by 2015

Global Top 3 Electronic/Telecommunication company

GROWTH STRATEGY

“Fast innovation, Fast growth”

CORE COMPETENCY

“Product leadership, Market leadership, People leadership”

CORPORATE CULTURE

No excuse, “we” not “I”, Fun workplace

SLOGAN

"Life's Good" represents LG's determination to provide delightfully

smart products that will make your life good.

The LG Electronics Life's Good signature consists of the LG logo,

seal, and the slogan, "Life's Good" set in Charlotte sans typeface

curved around the LG symbol. The curving of the slogan reinforces

LG's personality and uniqueness. The consistent usage of this

signature clearly establishes the unique identity of the company and

unifies every division and product from LG Electronics across the globe.

THE SYMBOL

The symbol of LG is the face of future. The letter “L” and “G” in a circle

symbolizes world, future, youth, humanity & technology.LG philosophy is

based on humanity. It also represents LG’s efforts to keep close relationship

with our customers around the world.

The symbol consists of two elements.

1. The logo in LG gray

2. The stylized image of human face in the unique LG red color.

Red color represents our friendliness and gives a strong impression of LG’s

commitment to deliver the best.

The circle symbolizes The Globe. The stylized image of a smiling face in the

symbol conveys “Friendliness and Approachability”. The one eye on the

symbol represents “Goal-oriented, Focused & Confident”.

The slogan of LG is “Life’s Good”. It expresses “ Brand’s Value, Promises,

Benefits , Personality.

THE PARTNERSHIP

LG Electronics chooses to promote harmony and build constructively on a

labor-management relationship rather than an employee-employer

relationship. This illustrates that management and workers are not in a vertical

relationship, but in a horizontal one.

This culture is necessary for LG Electronics as it strives to become one of the

world's top companies. Such a relationship is transformed into a value-creation

relationship whereby both parties endeavor to address mutual problems and

create new values together.

STRATEGIC ALLIANCE

LG Electronics is making technical advances and identifying business

opportunities through various associative relationships with some of the

world's leading companies.

LG Electronics is striving to become number one in the world by mingling

in various business and technological fields and making strategic alliances with

world famous companies. "Strategic association between corporations," in

which companies with different infrastructures cooperate in the fast-

developing 21st century business field, is of key significance in terms of

strengthening the existing industry and creating a new one.

LG Electronics will do its best to create new products and services with

an open mind, while developing new technologies and business fields through

various associations with some of the world's most successful companies.

1. 3M

2. SUN

3. YAHOO

4. PHILLIPS

5. TOYOTA

6. MICROSOFT

7. HP

8. GOOGLE

9. GE

10.INTEL

11.NORTEL

12.HITACHI

13.PRADA

14.RENESAS

15.TOSHIBA

16.BESTBUY

And the number follows many more…………………………..

In Feb. 2011 LG Electronics and Yahoo formed a strategic alliance. Yahoo

mobile services will be available from LG mobile. This service is targeting 10

million LG mobile phones in over 70 countries.

In Mar. 2011 LG Electronics and Google formed a strategic alliance.

Both companies will work together to release, market, and offer LG mobile

phones with Google services (search engine, map, email, and blogs.)

LG BRAND IDENTITY:-

The brand of LG is delightfully smart. LG strives to enhance the customer’s life

and lifestyle with intelligent features, institutive functionality and exceptional

performance.

The brand platform:-

The LG brand is composed of four basic elements –

1. Value

2. Promise

3. Benefits

4. Personality

The Brands core Value that never changes.

a. Trust,

b. Innovation,

c. People

d. Passion

The benefits that are consistently delivered to the customer includes

Reliable products

Simple design

Ease of use

Extraordinary Experience

Personality describes the human characteristic that are expressed to the

customer through

Trustworthy, Considerate

Practical, Friendly

The Internal Culture of LG:

LG practices four cultures

1. Learning Culture

2. Boundary less Environment

3. A Carrier

4. Growth

According to LG, the Learning Culture continuously helps the employee to

learn more and more to develop the habit of continuous learning.

Boundary less Environment means that there is no difference between the

levels of employees. There is transparency between the work and mutual

understanding between all the employees.

A carrier is highly growing in LG and one who is the employee can develop

their carrier largely. A new comer will feel fully comfortable in the company

and for a new comer the company is very helpful in the overall growth of

personality.

Growth in LG is very high for those who are in the company and for those who

want to join in LG. The company is growing with fast innovation and the BLUE

Ocean strategy is one of the examples of growth.

Mission

The mission of LG is to provide the customers with utmost satisfaction through

leadership.

The fundamental policy of development is to secure product leadership that

the

Customers may have the utmost satisfaction.

Product Leadership

We are focusing on six development areas to become the product leader.

1. New Machine

2. Reliability

3. Conventional Installation

4. Environment Friendly Product

5. Low Noise & Vibration

6. Energy Saving

Quality Innovation

The policy of quality assurance is to provide customers with utmost

satisfaction by supplying zero defects.

LG proceeds in a hierarchal manner. It is named as “LG WAY”.

From top to bottom:

No.1 LG – is the VISION

“Jeong-DO” Management is LG’s unique application to ethics. LG will succeed

through fair management practices and constantly developing our business

skill.

A) Honest with our customer

b) Providing great values to customer through constant innovation & and

development.

c) Equal opportunities

d) Equal Treatment

Management Principle - Creating value for customer

Code of conduct of LG:

1. Responsibility and obligations to customers :• Respect for Customers• Creating Value • Providing Value•2 Fair competition• Pursuit of Free Competition• Compliance with Laws and Regulations

3 Fair Transaction :• Equal Opportunity • Fair Transaction Procedure• Support and Aid for Business Partners

4 Basic Ethics for Employees• Basic Ethics• Completion of Duty • Self Development• Fairness in Performance• Avoidance of conflict with company interest

5 Corporate Responsibilities to employees• Respect for human dignity• Fair Treatment• Promoting Creativity

6 Responsibilities to society and country

• Rational Business Development• Protection of stock holder interest• Contribution to social development• Environmental Conservation

LG INDIA:

LG Electronics India Pvt. Ltd., a wholly owned subsidiary of LG Electronics,

South Korea was established in January 1997 after clearance from the Foreign

Investment Promotion Board (FIPB). LG set up a state-of-the art manufacturing

facility at Greater Noida, near Delhi, in 1998, with an investment of Rs 500

Crores.

LG corporate office is located at Plot no.51, Udyog Vihar, Kasna Road, Greater

Noida, India.

This facility manufactured Color Televisions, Washing Machines, Air-

Conditioners and Microwave Ovens.

''Company is setting up a chain of exclusive premium showrooms. LG plans to

launch 60 premium Brand Shoppes by the end of the first quarter of this year.

At present, LG has a total of 83 LG stores across the country, of which 45 are

shoppes and 38 are exclusive stores. Brand shoppes will be placed in the

premium segment and the target audience will comprise buyers interested in

premium and high end products.

LG Brand Shoppe goes beyond the concept of a normal exclusive store by

having a more interactive environment and additional lifestyle orientation on

display so that the customer can actually experience the LG products in his or

her own home settings.

LG Electronics India Ltd (LGEIL), consumer durables leader with 27% market

share, is planning a brand new image. To attract inspirational and young

consumers across India, company will roll out a new marketing strategy. The

exercise will cost the company Rs 360 crore.

LG Electronics India is the fastest growing company in the consumer

electronics, home appliances, and computer peripherals industry today.

LG Electronics is continually providing, superior technology products & value

for money to more than 50 lakh households in India. LGEIL is celebrating the

11th anniversary this year.

LG Soft India the innovation wing of LG Electronics in Bangalore is LG

Electronics' largest R&D centre outside Korea. We at LGSI focus on niche

technology areas such as mobile application development, digital video

broadcast and biometrics software and support LG Electronics with our

expertise. Motivated by a passion for technology, a strong work culture and

loyalty to the organization, we are determined to see LG become one of the

top three brands globally.

Prominent consumer electronic company, LG Electronics Inc. has said that it

expects the sale of its products in India to up by 15 per cent in 2008. Moon

Bum Shin, managing director of LG Electronics India has said that the company

has earmarked 4.8 billion rupees for investment purpose in India this year. The

said money will be used to market as well as manufacture new products.

LG Electronics, which is originally a South Korean Company with branch in

India, informed that its sales of GSM mobile phones, color televisions, air

conditioners and other household goods in the Indian market was to the tune

of 95 billion rupees ($2.4 billion) in 2007. As per Shin's estimate, the sales in

2008 would be around 110 billion rupees.

In order to achieve its target, Shin said LG Electronics will concentrate on

catering to the high-end consumer market which will help boost sales this year.

India churns out six (6) per cent of LG Electronics global revenues of $42 billion.

The Indian branch of LG exports to 40 countries.

India challenges

The challenges faced by LG when entered in Indian market

1. Low brand awareness about LG in India.

2. One of the last MNCs entered in India (Samsung, Panasonic entered in

1995 in India).

3. High import duty

4. Compitition from local market players and other MNCs in consumer

durable segment.

5. Price sensitiveness of the Indian consumer

LGEI over comes these challenges to emerge as

Innovative marketing strategy

1. Launch new technologies in consumer electronic and home appliances.

2. LG was the first brand to enter in cricket in big way a way, by sponsoring

the 1999 world cup followed it up in 2003 as well.

3. LG brought in four captains of the Indian cricket team to endorse its

products. LG invested more then US$ 8 million on advertising and

marketing in this sport.

4. LG has differentiated its product using technology and health benefits.

CTV has “Golden eye technology” Air conditioner has “Health air

system” and microwave ovens have the “Health wave system”.

Local and efficient manufacturing to reduce the cost

To overcome high import duties LG manufactures TV refrigerator in India at

manufacturing facility at Noida and Pune. LGEI had already commissioned

contract manufacturing at Mohali Kolkata and Bhopal for CTVs. This has helped

LGEI to reduce cost.

LGEI implementing the “Digital manufacturing system” (DMS) as the cost

cutting innovation this system is follow-up to the six sigma exercise LGEI had

initiate earlier.

R&D potential

LG has the research and development facilities in Bangalore and Pune. Both

the unit carry out R&D department for the domestic as well as the parent

company it also dose customize R&D for the specific countries to which it

export product.

Regional channel and wide distribution network

1. LG has adopted the regional distribution channel in India. All the

distributers work directly with the company. This has resulted in quicker

rotation of the stock and better penetration into B, C, D, class market.

2. LG also follows the stock rotation policy rather then dumping stock on

channel partners.

Product localization:-

1. Product localization is the key strategy used by the LG

2. LG came out with Hindi and regional language menus on its TVs.

3. Introduced the low-priced “Cineplus” and “sampooma” for the rural

market.

4. LG was the first brand to introduce gaming in TVs in continuations of its

association with cricket LG introduce cricket game in CTVs

MAJOR KEY SUCCESS FACTORS

1. Innovative marketing - LG was the first brand to enter cricket in a big

way, by sponsoring the 1999 World Cup and followed it up in 2003 as

well.

2. Local and efficient manufacturing to reduce cost - To overcome high

import duties, LG manufactures PC monitors and refrigerators in India at

its manufacturing facility at Noida, Delhi.

3. Commissioned contract manufacturing at Mohali, Kolkata and Bhopal for

CTVs.

4. Product localization - Product localization is a key strategy used by LG. It

came out with Hindi and regional language menus on its TV.

5. Regional distribution model - This has resulted in quicker rotation of

stocks and better penetration into the B, C and D class markets.

6. Leveraging India’s IT advantage - LG Electronics has awarded a contract

to develop IT solutions to LG Soft India (LGSI). The project involves

development and support for ERP, SCM, CRM and IT-enabled services for

LG.

Strategies adopted by the organization

LG follows 10 commandments which are as follows.

1. Foster working environment-5S Environment

2. Fast execution is key to success

3. Transparent and fast communication-open communication

4. Update market -knowledge –Demographics

5. Win –Win relationship with the trade partners

6. Customer is the king

7. Even Billing –Road to ach supplier A

8. Be in touch with the market (70% Market, 30% Office).

9. Plan and Execute annual marketing Calendar-Time to market

10.Display share of 50% -to get 50% consumer share.

LG market share of consumer appliances and consumer electronic:-

LG position of CTV in various states in India

LG position of REF in various states in India

LG position of WM in various states in India

LG position of AC in various States in India

LG position of Audio & Home Theater in various in India

LG position of DVD in various in India

LG position of MWO in various states in India

This analysis is based on the ORG survey conducted by LG which represent the

LG position of different consumer durables in various states in India. I select

different brand in different category as per the market share and the demand

of product in market. This analysis represents the LG market position during

the period of March 2012. It shows that LG has captured maximum market

share almost in every category. LG and Samsung have the maximum market in

consumer durable market but LG dominate the almost all the category in

consumer durable.

Prominent consumer electronic company, LG Electronics Inc. has said that it

expects the sale of its products in India to up by 15 per cent in 2012. Moon

Bum Shin, managing director of LG Electronics India has said that the company

has earmarked 4.8 billion rupees for investment purpose in India this year. The

said money will be used to market as well as manufacture new products.

LG Electronics, informed that its sales of GSM mobile phones, color televisions,

air conditioners and other household goods in the Indian market was to the

tune of 95 billion rupees ($2.4 billion) in 2011. As per Shin's estimate, the sales

in 2008 would be around 110 billion rupees.

In order to achieve its target, Shin said LG Electronics will concentrate on

catering to the high-end consumer market which will help boost sales this year.

India churns out six (6) per cent of LG Electronics global revenues of $42 billion.

The Indian branch of LG exports to 40 countries. Shin remarked that the

company was targeting an increase of exports to $300 million in 2012 from

$230 million in 2011.

. LG BHOPAL

LG BHOPAL is the branch office of LGEIL. It is located in M.P. Nagar.

In 2004 LGEIL opened second factory which is located in Ranjangaon. This plant

manufactures all product including DVD writers and GSM mobiles. Thus it

became first company to manufacture DVD writer in India. The ODP plant aims

to reach a manpower base of 1500 people and an investment of Rs 300 crore

till 2010.

LG India will become the export hub for LG Worldwide, catering to the Middle

East and African markets. The company aims to touch an export turnover of $3

billion by 2010 from India, which will contribute to 30 per cent of the Indian

arm's turnover.

Bhopal, India, October 6, 2004 -- LGE announced 3 growth strategies aimed at

the 1.1 billion people of India making the Indian market the second largest

global production base following China. Under this strategy LGE has projected

2007 revenues in India will exceed US$10 billion, 10 times that of 2004.

The three strategies for the Indian market that the global electronics giant

disclosed. included: penetrates the south-western market of India through

the new Pune plant near Mumbai, the second largest city in India, in addition

to the existing northern plant; installs a new GSM handset production line in

the new Pune plant and uses it as its second-largest global GSM handset

production line after the Qingdao plant in China; and expands the current 750

R&D staff in India to 1,500 by 2011, striving to develop premium products and

export 30% of India-manufactured products to Asia, Middle East and Africa

markets by 2011.

LG Electronics’ second new plant in Pune, India covers a total area of 211,200

square meters and is currently equipped with a production line to manufacture

600,000 TVs and one million refrigerators a year. The company is set to add

production lines of air conditioners, washing machines, monitors, and

electronic ovens, by 2005.

Also, LG Electronics is poised to install a GSM handset production line in the

new Pune plant by early next year. The Pune GSM handset line envisages a

capacity of manufacturing 2 million handsets annually, and the company

expands it to become a global GSM handset production base with a capacity of

an annual 10 million units by 2010.

In connection with its three growth strategies for the Indian market, LG

Electronics will invest a total of US$150 million in establishing facilities and

boosting R&D efforts in India by 2007. Specifically, it will invest US$53 million

in the Pune second plant, another US$43 million in establishing the GSM line,

and US$54 million in securing R&D manpower and boosting other efforts.

Through these strategies, LG Electronics aims to penetrate the global market

by using China and India as its core production bases, while operating its plants

in Changwon and Gumi, Korea, as its main production bases. This way, the

company is pushing to penetrate the global home appliance market.

The present capacity of the facility is of 1 lakh unit per year and it shall cater to

the need of the domestic markets. LG plans to upscale its operations to a figure

of 2.5 lakh units a year in the near future. The Pune plant in addition to its

current manufacturing facility at Greater Noida will enable the company to

enhance its consumer reach and reiterate it’s commitment towards providing

superior technology products to the India consumer.

The key strategies being implemented include increasing the number of its

regional offices from six to eight. LG has split its southern regional office into

two, one comprising the states of Tamil Nadu and Kerala and the other

consisting of Andhra Pradesh and Karnataka. In addition, it has split one of its

northern regional offices by making Uttar Pradesh a separate region after

spinning it out from Delhi NCR. The other four regional offices take care of

East, Gujarat and Madhya Pradesh, Maharashtra & Goa and Punjab, Haryana &

Rajasthan respectively.

In the coming year, LG is also repositioning its marketing spends, resulting in a

significant increase in its mass media expenditure for better brand visibility. LG

had a marketing budget of Rs 320 crore in 2007 with a 60:40 split in favor of

below-the-line activities. Next year, the company plans to increase the share of

mass media even as overall marketing spends would be raised by just about

10-15%.

Distribution and Marketing

The company has number of dealers and warehouses. They have LG exclusive

shopee. For the marketing of the products a number of activities are followed

1. Exhibitions are conducted from time to time.

2. Society and college activities are conducted.

3. Hoarding, Posters, banners are used so as to grab the attention of the

costumers.

4. Day to day advertisement in leading newspaper.

5. Discount at festival time.

6. For dealer relationship they arrange dealer meting at several time in the

year

7. LG divide dealer in gold silver etc. category to know the performance of

the dealers.

8. They have their sales persons at various sub dealer store and at

mordent trade store for particularly for the promotion of the LG

product.

9. LG also uses the radio FM for the promotion activities.

10.Also provide capon and scratch card for festive season.

The logistics (Supply Chain Management)

Visit to warehouse of LG Bhopal at Govindpura

Logistics is the art and science of managing and controlling the flow of goods,

energy, information, and other resources like products, services, and people,

from the source of production to the marketplace. It is difficult to accomplish

any marketing or manufacturing without logistical support. It involves the

integration of information, transportation, inventory, warehousing, material

handling, and packaging. The operating responsibility of logistics is the

geographical repositioning of raw materials, work in process, and finished

inventories where required at the lowest cost possible.

Logistics Management is that part of the supply chain, which plans,

implements and controls the efficient, effective forward and reverse flow and

storage of goods, services and related information between the point of origin

and the point of consumption in order to meet customers' requirements.

5R’s of Logistic followed by LG:

1. Right Time

2. Right Place

3. Right Condition

4. Right Cost

5. Right Handling

CUSTOMER SERVICE

The best and the biggest international brands are here in India –but the irony if

it all: where is the after-sales-service? So integral to a brand, so critical for its

success and so taken for granted in developed markets! In India, after sales

service is, for want of a better description, the pits. So what’s stopping the best

companies from pulling out all the stops when it comes to providing the best

service? Do customers expect for too much? Or is it that in India they don’t

really care. Brand Equity fanned out to MNC as well as Indian consumer

durable companies, stockiest and dealers, analysts and market researchers to

get a feel of what’s really keeping after sales from being used as a cutting edge

marketing tool in pushing products across categories.

Customers support following the purchase of a product or service. In some

cases, after-sales service can be almost as important as the initial purchase.

The manufacturer, retailer, or service provider determines what is included in

any warranty (or guarantee) package. This will include the duration of the

warranty traditionally one year from the date of purchase, but increasingly two

or more year’s maintenance and/or replacement policy, items

included/excluded, labor costs, and speed of response. In the case of a service

provider, after-sales service might include additional training or helpdesk

availability. Of equal importance is the customer's perception of the degree of

willingness with which a supplier deals with a question or complaint, speed of

response, and action taken.

LG also had a big problem of after sale service in India. During my project I

also came to know that after sale service becomes the big issue in Pune region.

Customers as well as dealer were facing the problem of after sale service.

Because of this problem many dealer in Pune region were not ready to sale LG

product. So it becomes the big issue.

But LG has taken some solid steps towards improving customer’s perception

and experience of after sales service. Because it very important in competitive

market to provide the best service.

L G Electronics has signed a memorandum of understanding with 23 Industrial

Training Institutes to strengthen its after sales service in India.

The company aims to recruit 10,000 people by the end of this year as a part of

its branding strategy to focus on service and move away from discounting.

L G Electronics has identified eight states with high after sales service call rates

to ink the deals with the ITI. Y V Verma, director HR and management system,

LG Electronics said, "The Company was trying to find a solution for effective

after sales service since last two years. There is a huge need of trained

manpower for the after sales service to align with the company's expansion

and focus on the GSM mobiles and the personal computer segments."

1. In the initial phase the company has entered into agreements with ITIs in

the states like Maharashtra, Gujarat, Delhi, Punjab, Assam, and

Karnataka and is in the last leg of signing with Uttar Pradesh.

2. L G Electronics, with 1200 service centers, has already recruited 300

students and plans to beef up the number to 10,000 by the year-end.

3. "The company has offered a scholarship to the selected students for the

last six months of their training programme,"

4. The company will invest Rs 8 crore (Rs 80 million) in employee

development programme this year with an aim to attain a 8 per cent

attrition rate.

5. The company moved away from the discounting strategy since last year

and is putting thrust on the quality and service in its brand

communication to position LG as a premium consumer electronics

brand.

6. At the top, the Service Division in Korea reports to the Global CMO. (as

mentioned in Dermot’s public interview in ET on Wednesday). This

shows commitment that Service must be made into a marketing

differentiator, and leveraged thus.

7. LG has the widest service network across the country; some estimates

put it at a significant multiple of service-infrastructure from our nearest

competitor. While the sale size may also be a nice multiple from nearest,

it shows the company is ready to put our money where our mouth is.

8. The company has introduced a 211 service - once you register your

complaint, we will call you back in 2 hours (hence 2), set up an

appointment for the next convenient day for you (hence the first 1), and

show up in the promised 1-hour slot (hence the second 1). If the next

convenient day for you is the next day, that’s great too. It’s a disruptive

action in an industry (including LG) having traditionally shied away from

its service responsibilities, and thus not leveraging any mileage from it.

9. The company is promoting 211 through ATL, probably the first time

after-sales service is being communicated in this fashion by any product

company. You may have seen the TV commercial or heard the radio

advert or seen the newspaper ad or in-shop posters, both of which

revolve around prompt response.

10.The first LG-owned service centre opened in Gurgaon. (Service in India

generally works through authorized service centers, in LG’s case they

work exclusively for LG.) A company-owned service centre tries that

much harder, knows things better, and can even contribute as a revenue

center.

CONSUMER SURVEY DURING EXHIBITION

From 16th to 25th May a consumer exhibition was organized at the college of

Engineering ground. The exhibition was sponsored by Sakal group in which

number of companies participated.

EXHIBITIONS PICTURES SHOWING THE PRODUCTS

Objective of the project

Primary objective

The main objective of filed survey during the project was to find out the

market share of the LG and also calculate the display share.

Find out the positional dealer who can sale the LG product in large

volume.

This will ease the dependence on the some big dealer like Amrtansh

Enterprises.

Find out the problem faced by the dealer in sales and the distribution.

Secondary objective

The Objective was to find out that how far the exhibitions are helpful in

branding,

While purchasing the consumer durables which parameter is most

important for the consumer?

Do the consumers prefer the financial facility for buying consumer

durable?

How frequently consumers change the consumer durable?

To enhances the knowledge of consumer durable market.

To increases the knowledge consumer durable product of LG.

To enhances the knowledge about the marketing and branding activity.

Research Methodology:

Research methodology is considered as the nerve of the project.

Without a proper well-organized research plan, it is impossible to

complete the project and reach to any conclusion. The project was

based on the survey plan. The main objective of survey was to collect

appropriate data, which work as a base for drawing conclusion and

getting result.

Therefore, research methodology is the way to systematically solve the

research problem. Research methodology not only talks of the methods but

also logic behind the methods used in the context of a research study and it

explains why a particular method has been used in the preference of the other

methods

Research design:

Research design is important primarily because of the increased complexity in

the market as well as marketing approaches available to the researchers. In

fact, it is the key to the evolution of successful marketing strategies and

programmers. It is an important tool to study buyer’s behavior, consumption

pattern, brand loyalty, and focus market changes. A research design specifies

the methods and procedures for conducting a particular study. According to

Kerlinger, “Research Design is a plan, conceptual structure, and strategy of

investigation conceived as to obtain answers to research questions and to

control variance.

Types of research is:

Descriptive Research

The type of research adopted for study is descriptive. Descriptive studies are

undertaken in many circumstances when the researches is interested to know

the characteristic of certain group such as age, sex, education level, occupation

or income. A descriptive study may be necessary in cases when a researcher is

interested in knowing the proportion of people in a given population who have

in particular manner, making projections of a certain thing, or determining the

relationship between two or more variables. The objective of such study is to

answer the “who, what, when, where and how” of the subject under

investigation. There is a general feeling that descriptive studies are factual and

very simple. This is not necessarily true. Descriptive study can be complex,

demanding a high degree of scientific skill on part of the researcher.

Descriptive studies are well structured. An exploratory study needs to be

flexible in its approach, but a descriptive study in contrast tends to be rigid and

its approach cannot be changed every now and then. It is therefore necessary,

the researcher give sufficient thought to framing research.

Questions and deciding the types of data to be collected and the procedure to

be used in this purpose. Descriptive studies can be divided into two broad

categories: Cross Sectional and Longitudinal Sectional. A cross sectional study

is concerned with a sample of elements from a given population. Thus, it may

deal with household, dealers, retail stores, or other entities. Data on a number

of characteristics from sample elements are collected and analyzed. Cross

sectional studies are of two types: Field study and Survey. Although the

distinction between them is not clear- cut , there are some practical

differences, which need different techniques and skills. Field studies are ex-

post-factor scientific inquiries that aim at finding the relations and

interrelations among variables in a real setting. Such studies are done in live

situations like communities, schools, factories, and organizations.

Another type of cross sectional study is survey result, which has been taken by

me. A major strength of survey research is its wide scope. Detail information

can be obtained from a sample of large population .Besides; it is economical as

more information can be collected per unit of cost. In addition, it is obvious

that a sample survey needs less time than a census inquiry. Descriptive

research includes survey and fact finding enquiries of different kinds of the

major purpose. Descriptive research is description of the state of affairs, as it

exists at present. The main characteristic of this method is that the researcher

has no control over the variables; he can only report what has happened or

what is happening. The methods of research utilized in descriptive research are

survey methods of all kinds including comparative and co relational methods.

The reason for using such needs to be flexile in its approach, but a descriptive

study in contrast tends to be rigid and its approach cannot be changed ever

now and then.

OBJECTIVE OF THE STUDY

The objective was to find out the market share of LG products, advantages,

and disadvantages of LG products from dealers and to find out what

problems they are facing with the LG products so that problems can be

resolved to increase the sale.

PICTURE SHOWING THE PRODUCT OF LG IN ONE OF THE SHOP

Data collection methods:

After the research problem, we have to identify and select which type of data

is to research. At this stage; we have to organize a field survey to collect the

data. One of the important tools for conducting market research is the

availability of necessary and useful data.

Primary data: For primary data collection, we have to plan the following four

important aspects.

Sampling

Research Instrument

Secondary Data - The Company’s profile, journals and various literature

studies are important sources of secondary data.

Data analysis and interpretation

1. Questionnaires

2. Pie chart and Bar chart

Questionnaires:

This is the most popular tool for the data collection. A questionnaire contains

question that the researcher wishes to ask his respondents which is always

guided by the objective of the survey.

Pie chart:

This is very useful diagram to represent data , which are divided into a number

of categories. This diagram consists of a circle of divided into a number of

sectors, which are proportional to the values they represent. The total value is

represented by the full create. The diagram bar chart can make comparison

among the various components or between a part and a whole of data.

Bar chart:

This is another way of representing data graphically. As the name implies, it

consist of a number of whispered bar, which originate from a common base

line and are equal widths. The lengths of the bards are proportional to the

value they represent.

Preparation of report:

The report was based on the analysis and presented with the findings and

suggestions. The sample of the questionnaires is attached with the report

itself.

Sampling Methodology:

Details of the sampling methodology, I have made questionnaire. The one is

made for the Customer.

No. of questions in questionnaires for customer: 07

No. of question related to LG product: 03

No. of people met during the research: 200

No. of respondents during the research: 50

Sample unit

Professionals, Business man,

Employees, House wife,

Working women, Students

Analysis:

Q1. Have you purchased any consumer durable during Exhibitions?

Yes

No

Inferences

1. 65 % of Customer have not purchased any consumer durable from

exhibitions.

2. Only 35 % people have purchased.

3. It shows that consumers are coming in the exhibition for knowledge of

product and also they want to know that weather there is actual price

difference in exhibition and shop or not.

4. Consumer also want to compare to the different brand which are

available in the exhibition.

5. So exhibitions are more useful to increases brand awareness.

6. People are less interested to purchase product from the exhibition.

Q.2While purchasing consumer durable which parameter influences you?

Price

Product feature

Brand

Service

Durability

Inference

1. 30% of customer gives importance to price. So it shows that Indian

consumers are very price sensitive. They give more importance to price

over the brand.

2. 26% give importance to brand. So price and Brand matter a lots for the

costumers. And they are also want best brand in best price.

3. 19% to product feature Service 16% and durability 9% Service is also a

big factor for the customer they are less interested in the durability.

Q3. From where you prefer buying consumer durables

Exhibitions

Co.shoppee

Showroom

Inference:

1. A majority of customers prefer to buy from showrooms. Very less

proposition of customers buys from Exhibitions.

2. 47% customers are prefer to by from the showrooms because the

showrooms are more convenient to customers they also think that these

shops give more discounts.

3. People are less interested to buy from the exhibition they only visit the

exhibition for price quotation of the product and the comparison of the

product.

Q.4.You prefer to buy from the same as you have mentioned in Q.3 because of

following reasons

Attractive Price

Service

Demonstrations

Offers

Inference

1. Customers buy from showrooms because of the service and

convenience. These are two main factors.

2. Customers are preferred to buy from the showroom because of they

think that these convenient store may provide good after sell service.

3. Customer also thinks that there is more chance to bargain and they can

get more discounts in these showrooms.

4. Price also a factor that attract the customer in these showrooms.

Q.5.Which consumer durable you have and of which brand?

CTV

LCD

PLASMA

REF

WM

MW

AC

Inference

In CTV section maximum customers have Onida, in LCD Sony is the leader, In plasma BPL is the leader, In Ref LG is the leader, MW LG is the leader. In WM there are companies and in AC also.

Q.6. How frequently you change your consumer durables?

1-3 years

3-5 years

5-10 years

More than 10 years

INFERENCE

1. Customers prefer to change consumer durables within 5-10 years. In

India people do not change consumer durable frequently.

2. 23% customers do not change their consumer durable within 10 year.

3. It represent that Indian consumer do not prefer to change their

consumer durable frequently.

Q.7.Do you prefer any financing scheme to purchase consumer durables?

Yes

No

INFERENCE

Majority of customers do not prefer any financial scheme.

Dealer survey Findings

1. By calculating the display share we found that in most of store LG has

50% display share almost all categories.

2. By the actual monthly sale of particular store we came to know the

capacity of the store and how much product can they sale.

3. It helps us to know that weather dealer is capable of being a direct

dealer of LG or not and it also helps to find out the new dealer who are

capable of being the dealer of LG.

4. We also came to know while visiting the shops that there was big

problem of after sale service.

5. Many dealers were facing the problem of after sale service because

there is no follow up calls from LG.

6. Demo calls also not done properly.

7. The top competitor of LG product in Pune is SAMSUNG.

8. In Pune area the performance of LG is in better position but the

competitor also hold closer margin.

9. There is high growth of sale in market due to booming in new

technology and better service.

10.Word of mouth plays a vital role in awareness among customer. This is

one factor, which can play a good role in promotion of products as well

as demonstration given by the shopkeeper also plays a vital role for

customer.

RECOMMENDATIONS AND SUGGESTIONS

1. LG should improve it’s after sale service because its hits badly LGs

market share in Pune region.

2. More detailed customaries service is to be provided.

3. The training to in shop demonstration should be given at frequent time

interval and feed back should be considered positively.

4. The company should look into the matter of person hiring for in shop

demonstration. A big LG showroom should have at least 2 such kind of

person.

5. LG should try new dealer who have the potential. So they can target

more market.

6. As there is a bottle neck competition between Samsung and LG, it is

necessary to take measure steps to overcome the area of downfall in LG

with respect to Samsung.

7. The marketing managers should make better relations with dealers and

reputation of the company.

8. Customer considers quality as their first preference, so the company

should give more stress on this.

9. The switching of customer from LG product to other brand is due to the

bed after sell service in shop.

10.The product is well aware and it is on top of mind of customer. So

company should always improve services and update their technology.

CONCLUSION

1. Secondary supports play an important role in the customers mind and

create awareness among the customers. The secondary support includes

Demonstration, Exhibition & Even Sponsors.

2. From the survey it was found out that the majority of customers don’t

buy consumer durables from exhibitions. They just visit the exhibitions

to see the co. latest model.

3. They want to buy from the showrooms or from co. showrooms. For

them service is important .Beside convenience and other factors service

is key factor.

4. Also majority of customers do not want any financing scheme for

purchasing the durables.

5. There was heavy rush on weekends so large numbers of ISD’s were

appointed that day. Also the live demo calls helps in selling. Exchange

offers also generate sale.

6. Customers are also now very choosy in buying the product and it is

important for the company to make loyal customer of their brand.

7. In survey we found that LG has captured maximum market share in

every category. LG dominates CTV, LCD, and Refrigerator, and Washing

machine, category.

8. LG and Samsung have bottle neck competition in TV and REF. category.

9. The product is well aware and it is on top of mind of customer.

10.Customers are also now very choosy in buying the product and it is

important for the company to make loyal customer of their brand.

RECOMMENDATIONS AND SUGGESTIONS

1. Exhibitions do not help to generate so much sells but they should be

conducted regularly. This helps in generating awareness regarding the

product in customers which ultimately helps in sales.

2. Also it is helps in advertising for the new products. Like in this exhibition

new LCD SCARLET was advertised. Company should always focus on

service.

3. Display share should be increased where there is less than 50% as LG

also believes that “JO DIKHTA HAI WO BIKTA HAI”.

4. Company should try to improve service. No doubt the company products

have technically edge over competitors but in long run it may hamper

the company’s profit.

5. Company should concentrate more on its major drivers LCD, IT, and

GSM. Branding and promotions should be done effectively as it creates a

long lasting image in the mind of customers.

6. Company should also cater to the needs of sub dealers as some of the

sub dealers have potential of high sales.

LIMITATIONS

Every study has certain limitations. In my study, also there were certain

limitations, which I could not able to solve.

1. The research was conducted in a very small area.

2. My research work period witness the biggest ups and downs in product

sale of different brands, which affected the perception of the customer.

This was biggest drawback of my study.

3. Time factor was also important for me. I had only 60 days to complete

my research, for which a full-fledged report was insufficient for me.

4. The customer filled the questionnaire mostly in careless manner, so it

was difficult to make them hold for time.

5. I had only found the upper-middle class family to fill up the

questionnaire, but generally, an average middle class family was

required for the study.

6. The sample size is also very small which represent my research on

consumer behavior

My study is not recognizable in whole INDIA as well as outside Ranchi due

to the above limitations and less area coverage.

BIBLIOGRAPHY

www.lgindia.com

www.google.com

www.wikipedia.com

Business world

Business today

LG magazine

Economics times News paper

Times of India