A

PROJECT REPORT

ON

SURVEY OF THEIR WARRANTY CUSTOMERS

FOR

LG ELECTRONICS

Submitted By: ABHILASH DHANIA

ROLL NO. 0903002

GURGAON COLLEGE OF ENGG.

ABHILASH DHANIA

Acknowledgement

It is indeed of great moment to pleasure to express my senses to all the people who

have been supportive in making my training a rich experience. I got the opportunity

to do a challenging project in LG ELECTRONIC JALANDHAR (INDIA). The

project is the important part of our study and gives us a real practical exposure to the

corporate world and it is almost impossible to do the same without the guidance of

peoples in and around us. Specifically the summer training of from 15 of june to

27th of July 2011.Similarly while doing the topic “customer survey of our warranty

customers in order to judge the satisfaction” as a summer trainee I took help of

many for my projects.

It gives me immense pleasure to acknowledge LG

ELECTRONICS INDIA Ltd., which has been nice enough to give me a chance to

do my summer training and providing me wonderful support through out my training

period and afterward.

I am thankful to MR. R.K ARORA for allowing me to do my research in his office

by knowing my interest in doing research on LG consumer durables and dealer

development research.

ABHILASH DHANIA

DECLARATION

I will take pleasure in declaring that the project work that is undertaken

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

being submitted in partial fulfillment for award of degree of Post

Graduate in Engineering from GURGAON COLLEGE OF

ENGINEERING.

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

during my tenure at LG Electronics Ltd. at JALANDHAR for SIX

WEEKS of training from 15 of JUNE to 27 July 2

ABHILASH DHANIA

CONTENTS

PAGE NO. TOPICS

7. Executive summary

9. Scope of the project

10. Key findings

11. Introduction

12. Classification of consumer durable mkt.

13. Opportunity

14. Brands in consumer elec. sector

16 History of the company

17. L.G group

19. Vision

20. Slogan

ABHILASH DHANIA

21. The partnership

26. Mission

27. Quality innovation

29. L.G india

33. Strategies adopted by the cmpny.

34. L.G market share

45. Customer service

49. Consumer survey

50. Objective of the project

51. Types of research

54. Data collection method

56. Analysis

64. Recommendations and suggestions

66. Bibliography

ABHILASH DHANIA

67. Consumer survey questionnaire

69. Appandix

ABHILASH DHANIA

Executive summary

Indian 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.

LG Electronics India is expecting to do a business of Rs.860 crore to Rs.870 crore in IT product segment during 2011, a top company executive said Friday.

“Armed with a new product line, the company is expecting to do a business of Rs.860 crore to Rs.870 crore during 2011, up from Rs.766 crore registered in 2010,” said LG (IT product group) head Sanjoy Bhattacharya here.

“We are gradually strengthening our IT product portfolio with new LED monitors with 3D technology, world’s slimmest and IPS monitors,” he said.

ABHILASH DHANIA

IT segment contributes six to seven percent of LG’s total turnover in India.

“In the current year, we do not hope for much revenue from 3D LED products. But in 2013, this will grow to 20 per cent of the total IT segment’s revenue,” Bhattacharya added.

ABHILASH DHANIA

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 JALANDHAR. 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 JALANDHAR 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 .

ABHILASH DHANIA

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.

ABHILASH DHANIA

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.

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.

ABHILASH DHANIA

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. 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.

3. 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.

4. 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.

ABHILASH DHANIA

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.

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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

ABHILASH DHANIA

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

platforms in information technology and related areas,

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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.

ABHILASH DHANIA

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

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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

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VISION

Global Top 3 by 2010

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

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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

ABHILASH DHANIA

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.

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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.

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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…………………………..

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In Feb. 2007 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. 2007 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

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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

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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

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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

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C ode 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

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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.

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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”.

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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:-

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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.

ABHILASH DHANIA

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.

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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

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ANDHRA PRADESH

ASSAM AND NORTH

EAST

BIHAR

CHHATTISG

ARHDELH

I

GUJARAT

HARYANA

JHARKHAND

KARNATAKA

KERALA

MADHYA PRADES

H

MAHARASHTR

A

ORISSA

PUNJAB

RAJAST

HAN

TAMIL N

ADU

UTTAR PRADES

H (EAST

)

UTTAR PRADES

H (WES

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WES

T BEN

GAL0.0%

10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%90.0%

LGSAMSUNG

LG position of WM in various states in India

LG

position of AC in various States in India

ABHILASH DHANIA

ANDHRA PRADESH

ASSAM AND NORTH

EAST

BIHAR

CHHATTISG

ARHDELH

I

GUJARAT

HARYANA

JHARKHAND

KARNATAKA

KERALA

MADHYA PRADES

H

MAHARASHTR

A

ORISSA

PUNJAB

RAJAST

HAN

TAMIL N

ADU

UTTAR PRADES

H (EAST

)

UTTAR PRADES

H (WES

T)

WES

T BEN

GAL0.0%

10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%90.0%

LGSAMSUNG

ANDHRA PRADESH

ASSAM AND NORTH

EAST

BIHAR

CHHATTISG

ARHDELH

I

GUJARAT

HARYANA

JHARKHAND

KARNATAKA

KERALA

MADHYA PRADES

H

MAHARASHTR

A

ORISSA

PUNJAB

RAJAST

HAN

TAMIL N

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UTTAR PRADES

H (EAST

)

UTTAR PRADES

H (WES

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WES

T BEN

GAL0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

LGSAMSUNG

ANDHRA PRADESH

ASSAM AND NORTH

EAST

BIHAR

CHHATTISG

ARHDELH

I

GUJARAT

HARYANA

JHARKHAND

KARNATAKA

KERALA

MADHYA PRADES

H

MAHARASHTR

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ORISSA

PUNJAB

RAJAST

HAN

TAMIL N

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UTTAR PRADES

H (EAST

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UTTAR PRADES

H (WES

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GAL0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

LGSAMSUNGVOLTASGODREJ

LG position of Audio & Home Theater in various in India

LG position of DVD in various in India

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ANDHRA PRADESH

ASSAM AND NORTH

EAST

BIHAR

CHHATTISG

ARHDELH

I

GUJARAT

HARYANA

JHARKHAND

KARNATAKA

KERALA

MADHYA PRADES

H

MAHARASHTR

A

ORISSA

PUNJAB

RAJAST

HAN

TAMIL N

ADU

UTTAR PRADES

H (EAST

)

UTTAR PRADES

H (WES

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T BEN

GAL0.0%

10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%90.0%

100.0%

PHILIPSLGSAMSUNGVIDEOCON

.

LG

JALANDHAR is the branch office of LGEIL.It is located in LAJPAT NAGAR

The organization structure is –one branch manager, one chief accountant, and area

sales manager of CE, HA separate for GSM, Marketing manager for CE, HA and

separate for GSM.The Pune branch has warehouse at wagoli.

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

ABHILASH DHANIA

ANDHRA PRADESH

ASSAM AND NORTH

EAST

BIHAR

CHHATTISG

ARHDELH

I

GUJARAT

HARYANA

JHARKHAND

KARNATAKA

KERALA

MADHYA PRADES

H

MAHARASHTR

A

ORISSA

PUNJAB

RAJAST

HAN

TAMIL N

ADU

UTTAR PRADES

H (EAST

)

UTTAR PRADES

H (WES

T)

WES

T BEN

GAL0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

LGPHILIPSSAMSUNGVIDEOCON

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

There are three types of Warehouse-

1. Mother Warehouse

2. Branch Warehouse

3. Spare part warehouse

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The mother warehouse is that where the products from the factory are kept and

from that warehouse, the products are sent to the branch warehouse.

A warehouse is a commercial building for storage of goods. Warehouses are used

by manufacturers, importers, exporters, wholesalers, transport businesses, customs,

etc. They are usually large plain buildings in industrial areas of cities and towns.

They come equipped with loading docks to load and unload trucks; or sometimes

are loaded directly from railways, airports, or seaports. They also often have cranes

and forklifts for moving goods, which are usually placed on ISO standard pallets

loaded into pallet racks.

5’s of warehouse, which the LG strictly follow.

1. Sweeping

2. Sorting

3. Systematic Arrangement

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4. Simplification

5. Self- discipline

In warehouse, the products are pinup with 3-color paper to get the knowledge

about the delivery.

1. Red Card – To stop the product going into market,

2. Green card – To allow the product for delivery in market,

3. Yellow Card – After the product labeled with green, allow this to move in

market

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Distribution Time:-

• Local delivery – 4 hrs.

• Upcountry delivery - 12 hrs.

• Within 200 km. – 24 hrs.

• Beyond 200 km. – 48 hrs.

The above distribution time is the time of delivery of products from warehouse to

the market place, which the logistic department follows to fulfill the demand in the

market at right time. In LG, we have the following process, which is followed in

logistic through ERP.

Order Processing

Invoicing

Indenting

Report

Order Processing booking for dealers /distributors

Invoicing after billing process/bill generation

Indenting requirement (Pdt Unit to branch unit)

Report distributed to all

In warehouse, there are two mode of dispersion of product from one place to

another within. a) Hydraulic b) Manual

In addition, there are 35 fire extinguishers to prevent the accidental hazard within

the warehouse due to fire. These fire extinguishers are valid up to year 2011. One

has to follow the rule of “NO Smoking” within the warehouse

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Logistics Ten Commandments – Golden Rules

1 - Warehouse 5S – to be strictly followed – FG – 2, 5 & 7 to be properly

maintained.

2 - 100% Bar-coding for all inward & outward transaction.

3 - Follow standard pick – ship process religiously.

4 – No inventory mismatch, shortage or excess – monthly 100% physical

stocktaking.

5 – Nil 30+ for FG – 2, 3 & 5.

6 – Nil transit damage.

7 – File insurance claim within 2 days. Settle all claim all within 30 days.

8 – No inter – branch transfer without HO clearance.

9 – PSI feeding into system by 25th of every month. Ensure 90% accuracy.

10 – Apply physical FMFO.

Problem

1- In transit material damage checking.

2- Cost target achievement.

3- Natural events tracking.

4- Fluctuation in demand-supply

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Equipments

1- 100% Bar code scanner.

2- ERP – Invoice Generation Process.

3- Hydraulic Trolleys for material movement.

4- Pallets for safety of material.

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WAREHOUSE WITH THE EQUIPMENT.

WAREHOUSE: REFRIGERATOR AND CTV SECTION

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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

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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."

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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.

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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.

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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

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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.

The main objective of research was to identify potential dealer and

development these dealer. So LG can make them their direct dealer.

This will ease the dependence on the some big dealer like Maharashtra and

Mahaveer electronics.

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?

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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.

Types of research are:

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.

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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

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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.

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PICTURE SHOWING THE PRODUCT OF LG IN ONE OF THE SHOP

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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.

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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

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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.

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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.

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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.

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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.

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

CTV

LCD

PLASMA

REF

WM

MW

AC

Inference

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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.

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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.

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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.

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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.

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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.

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.

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BIBLIOGRAPHY

www.lgindia.com

www.google.com

www.wikipedia.com

Business today

LG magazine

Economics times News paper

Times of India

Stockwatch.in

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Consumer survey Questionnaire

Q1. Have you purchased any consumer durable during Exhibitions?

a) Yes

b) No

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

a) Price

b) Product feature

c) Brand

d) Service

e) Durability

Q3. From where you prefer buying consumer durables

a) Exhibitions

b) Co.shoppee

c) Showroom

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

following reasons

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a) Attractive Price

b) Service

c) Demonstrations

d) Offers

e) Convenience

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

a) CTV -------------------

b) LCD -------------------

c) PLASMA -------------------

D) REF -------------------

E) WM -------------------

F) MW -------------------

G) AC -------------------

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

a) 1-3 years

b) 3-5 years

c) 5-10 years

d) More than 10 years

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

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a) Yes

b) No

APPENDIX

A.S.I Area Service In charge

A.S.M Area sales manager

B.S.I Branch Service In charge

CAC Commercial Air Conditioning System

C.S NET Customer Service Net

D.S.C. Direct service centre.

L.H.D Logistics Head of department

R.E.F Refrigerator

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