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Acknowledgement
I sincerely feel that the credit of this project work could not be
narrowed to only one individual as the whole work is out come of
integrated efforts of all those concerned with it through whose
cooperation and effective guidance I could achieve its completion.
I wish to place my profound indebtness and deep sense of
obligation to Mr.Yusuf Sheikh, Area Sales Manager LG Electronics
Hubli for his kind permission for the study in his organization and for
his supreme guidance through out the project.
I express my sincere ness thanks to Mr. Shyam, Regional
Sales Officer LG Electronics Hubli for extending his cooperation and
guidance.I wish to express my deep sense of gratitude to
Prof. P.B.Roodagi, Principal and College guide for valuable
suggestions, guidance and constant encouragement in making this
project a success.
I am grateful to all dealers who have been helpful through my project
work.
Deepak S Narayanan. 10TH JANUARY 06
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LG ELECTRONICS PVT LTD, HUBLI:-
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).
The trend of beating industry norms started with the
fastest ever-nationwide launch by LG in a period of 4 and 1/2 months
with the commencement of operations in May 1997. LG set up a
state-of-the art manufacturing facility at Greater Noida, near Delhi, in
1998, with an investment of Rs 500 Crores. This facility manufactured
Color Televisions, Washing Machines, Air-Conditioners and
Microwave Ovens. During the year 2001, LG also commenced the
home production for its eco-friendly Refrigerators and established its
assembly line for its PC Monitors at its Greater Noida manufacturingunit. The beginning of 2003 saw the roll out of the first locally
manufactured Direct Cool Refrigerator from the plant at Greater
Noida.
In 2004, LGEIL also up its second Greenfield
manufacturing unit in Pune, Maharashtra that commences operations
in October this year. Covering over 50 acres, the facility
manufactures Color Televisions, Air Conditioners, Refrigerators,
Washing Machines Microwave Ovens Color Monitors and GSM
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phones.
The Greater Noida manufacturing unit line has been
designed with the latest technologies at par with international
standards at Korea and is one of the most Eco-friendly units amongst
all LG manufacturing plants in the world LG has been able to craft out
in eight years, a premium brand positioning in the Indian market and
is today the most preferred brand in the segment.
Various studies have shown that the consumer is well
informed on the health awareness front. LG was one of the first
companies who recognized the emerging change in consumer needs
and decided to differentiate their products on the basis of technology
which appealed to the consumer on the basis of health benefits. Its
vision was to become a 'Health Partner' for its consumers worldwide
and therefore formulated its corporate philosophy to make peoples'
lives better, convenient and healthier. The CTV range offered by LGhas 'Golden Eye' technology, which senses the light levels in the
room and adjusts the picture to make it more comfortable for the
eyes. The entire range of LG air-conditioners have 'Health Air
System', which not just cools, but keeps pollution out. Similarly,
microwave ovens have the 'Health Wave System', refrigerators have
the 'PN System', which preserve the nutrition in food and washing
machines have 'Fabricare System', which takes the health factor
down to ones clothes. All the products offered by the company have
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unique technologies, developed by its R&D departments that give
customers a healthier environment to live-in.
The year 2001 witnessed LG becoming the fastest
growing company in the consumer electronics, home appliances and
computer peripherals industry. The company had till the month of
October 2001 achieved a cumulative turnover of Rs 5000 Crores in
India since its inception in 1997, making it the fastest ever Rs 5000
Crores clocked by any company in the Indian consumer electronics
and home appliances industry. Having achieved this milestone, LG
achieved another benchmark with the first ever sales of One Lakh
ACs (Windows and Splits) in a calendar year.
In Color Televisions having set the sales target of one
million units of Color Televisions for 2002, LG has already achieved
the one million mark in the month ahead of its target. In 2003, LG has
emerged as the leader in Color Televisions, Semi Automatic Washing
Machines, Air Conditioners, Frost-Free Refrigerators and Microwaves
Ovens. In the year 2004, LGEIL achieved unprecedented sales
efficiency both in Direct Cool and Frost Free segment and sold more
than 1 million units of refrigerators outperforming industry
expectations.
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
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technology products & value for money to more than 50 Lakh
households in India.
The company has achieved a turnover of Rs 6500 crore
in 2004 and aims to touch a turnover of 10 Billion US Dollars by 2010
and commands an enviable position in the GSM mobile phone
market. It has already started manufacturing of GSM phones in its
plant at Pune.
LG India has also been taking on a slew of initiatives as a
part of Corporate Social Responsibility. LGEIL is proud to have
adopted about 24 villages around our Greater Noida facility. LG
extends Free Medical Care, which comprises of free check ups and a
free distribution of medicines on a daily basis. LGEIL is also
generating self-employment opportunities for the people in the form of
tailoring, knitting etc. in addition to all this, LG also sends veterinary
doctors regularly to these villages. Besides all this, LG India is one of
the very few companies in the country that has an internal Energy,
Environment, Safety and Health Department. This function caters to
activities like Energy Conservation, Environmental Issues, Work
Place Fire and Safety as well as Occupational Health for the benefit
of the employees.
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LG ELECTRONICS IN INDIA
It started operations in two phases in the first phase unit
of .25 million capacity was set up. In the second stage LG started
planning for expansion of this capacity. At present LG has 5 million
capacity which plans to be increased to seven million by year 2006.
LG is already the second largest consumer electronic
brand in Indian after BPL
1) INFRASTRUCTURE AND NETWORK:
LG has already established an impressive sales and
service network in India. It has 18 branch offices and 3000
dealers. LG has a national presence in the truest sense of the
term. Touching the lives of people in both urban and rural areas
across India.
2) COMMITMENT:
As a testimony to its commitment in India LG has set up
state-of-art manufacturing plant in Noida with an investment of
U.S Dollar 3000 million as in year 2002.
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3) SERVICE BACK UP:
LG has 500 service engineers located in 54 centers
across India. In addition LG customer offices and personalized
staff constantly endeavoring to provide better service to the
Indian customer.
4) GROWTH:
LG was able to move at a very fast pace initially and was
able to complete it s nation wide launch in a period of 5 month
where as its competitors took nearly 2 years to complete the
launch. Apart from Sony, LG is the only foreign company which
has successfully own subsidiary in country. This way it has
never been constrained for funds
5) MARKETING:
LG strategy of differentiating itself from other brands inmarket to has paid off. When LG entered the market in1997,
there was a price war going on in consumer electronic market.
After grabbing the urban market, now LG has decided to place
their bets on rural markets. They are also launching new
products especially design for this areas and prices which will
be very affordable
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LG electronics product range:-
Each LG products features world class technology that is
innovative and unique to LG. this is a reflection of LGs commitment
to its customers. LG is well known for its products fairness. It is
continuously updating its technological features in its products.
Color television - Worlds only Golden Eye.
Refrigerators - Worlds only PN system.
Microwave Oven - Worlds only multi wave.
Washing Machines- Worlds only Chaos Punch +3.
Air conditioner - Worlds only health air system.
LG Refrigerators:
LG electronics India Pvt Ltd has introduced a wide rang of
innovative Preserve Nutrition (PN) system refrigerators to the Indian
market. The worlds only PN system available in 14 models. The
futuristic model, DIOS side by side refrigerator. It wont just cool like
other refrigerator but would also keep food fresh and nutritious.
PN system has ceramic coated FAR INFRA RED (FIR)
lamp, the moisture controller and the deodorizer. The 3 components
function together to counter factors that cause unpleasant odors,
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degeneration and staleness of food. The natural flavor freshness and
nutritive value of food are maintained.
Apart from the above characteristics, LG refrigerators are
aesthetically designed. LG believes the refrigerator should be pieces
of furniture not just appliances. The DIOS side by side refrigerator
using the PN system technology is created on a product concept of
deluxe and robust exterior design and maximized facilitated interiors
design. It is among the top notch in the world in terms of energy
consumption, noise level and cooling power and is termed The King
of Refrigerators.
LG Microwave ovens:
Microwave ovens were never considered goods for the
Indian cooking. Not any more. LG has launched the first in the microwave oven that can be used for cooking anything.
LG Health air system and Air Conditioners
This technology is unique to LG Air conditioners are
clean, pure and healthy. A Chaos Logic air flow system recreates
natural air currents and conditions the air (as in ordinary air
conditioner). It also has the unique filter system comprising of an
Electronic Air Purification Unit that traps and gets rid of the minutest
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dust particles and even smoke. An Anti bacteria Filter guards your
home against air borne germs and diseases. While a Deodorizing
Filter gets rid of unpleasant odors.
LG Televisions
LG Electronics has introduced The Golden Eye series
television. The product is revolutionary as is does away with need to
adjust picture quality in ones TV, whatever the light conditions in the
room.
Golden Eye also has a host of other features like
scanning velocity modulation and picture quality improvement circuit
that uses three electronic filters to provide crisp and distortion free
images.
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WHITE GOODS INDUSTRY
INTRODUCTION:
The consumer durable industry consist of a large number
of household applications Refrigerator, washing machine and A.Cs
are popularly known as white good industry. The term White Goods is
generally referred to those class of household appliances that are
coated with a coat of white enamel.
The white goods sector in India was traditionally the
preserve of big players like Godrej, Kelvinator, Allwyn and Voltas.
The four of them were controlled 90% of market until late 80s.
Due to new economic reforms many Multi National
Companies like Whirlpool, LG, Videocon, BPL, Samsung, Daewoo,
and Electrolux get attracted towards Indian white good market
potential. This entry of various new Multi national Companies to
Indian market customers started to get the world class brand
products.
After entering Indian markets Multi national companiesstarted to adopt various marketing strategies. Whirlpool and
Electrolux were first to enter. Whirlpool took over the Kelvinator and
TVS appliances. During late 90s Koreans started to enter white
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goods industry. LG the Korean white goods leader operates in India
through 100% subsidiary. It started to concentrate on latest
technological developments in appliances of white goods industry.
The Koreans have realized more on imports of completely built up
units. This has ensured their presence in the Indian markets (which is
getting crowded day by day) much before their manufacturing set up
is ready.
Most of MNCs come into country with mega investment
plans hoping to capture the significant share of Indian markets, but
initially markets have been proved wrong.
When the consumers durable industry was in recession
(economic slowdown) Whirlpool, Godrej, and Electrolux have been
sustaining loss, others (Koreans) do not expect to reach their break
even points for next two years. Among Koreans Samsung and LGelectronics has done relatively well especially at the higher end
market.
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SOME COMPANY PROFILES AND THEIR MARKETING
STRATEGIES:
After economic reforms, the market for consumer durable
and white goods has become crowded in the past two years with
launch of several Multi National Companys brand. To service Indian
companies such as BPL, Videocon and Onida, it will become
essential to match their financial strengths and marketing strategies.
GODREJ:
Its a joint venture formed by spinning of the refrigerator
business with G.E appliance (U.S.A) with stake Godrej 60% and G.E
40%. Both are leaders in refrigerator markets in respective countries.
Godrej G.E plans to consolidate its business and enter into white
goods marketing currently.
Godrej G.E has entered all the segments in the
refrigerator market and has the widest market range of refrigerator.
The word Godrej enjoys tremendous brand equity.
Godrej is focusing on the cost control as the key to
success. In order to distinguish ones offering from that of others firms
are trying to add more value added services in their product portfolio.
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VIDEOCON:
Videocon International is holding company of Videocon
group, which involves in manufacturing and marketing of consumer
goods. Videocon was the first company to introduce frost-free
refrigerator in the Indian market.
BPL:
BPL refrigerator is a Rs 1295 million company started in
the year 1982. It is a rapidly growing company with production
facilities at Bangalore & technological tie ups with Sanyo Japan.
These companies have decided to concentrate on the white and
brown appliance goods. BPL was able to occupy a premium and rich
positioning in the market. It has its products priced at a small
premium as compared to other brands.
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DATA COLLECTION METHODS:
Data collection is an elaborate process in which the
researcher makes a planned search for all relevant data. Data is a
foundation of all marketing research. Its a raw material with which a
researcher functions. For present research major data required was
primary data. Major importance was given to collection of primary
data from dealers.
SOURCES OF PRIMARY DATA:
To collect required data from primary source, survey
method was used. It is the most common method of collecting
primary data for marketing decisions surveys. Survey research is
concerned with the administration of questionnaires and interview.
Interview:
To collect primary information, I contacted dealers
through personal interviews with structured questionnaires. Before
collecting the required information, I had a personal interview with all
major dealers in home appliances in the Hubli-Dharwad market. I
selected personal interview method to collect primary data becauseof the following advantages:
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1) Ability to handle questionnaires.
2) Need for accuracy
3) Easy to control sample
4) Time requirement.
5) Response rate.
QUESTIONNAIRE:
The questionnaire was designed after considering all the
major aspects of the survey, like the type of data to be collected,
ability of the response rate.
QUESTIONNAIRE FORMAT AND LAYOUT. (Refer annexure)
My questionnaire was mainly designed from a dealers
view point as my study consisted interviewing the major dealers in
Hubli Dharwad dealing in home appliances.
SAMPLING PROCESS
In marketing research projects making census study of
entire universe is impossible on account of limitation. Sampling is
used to collect primary data when the sources of information are
broad in nature sampling is integral part of the data collection process
following sampling process was used for present study.
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SWOT ANALYSIS BETWEEN DOMESTIC COMPANIES AND MNCS
Domestic players Multi national
Strengths Brand equity Brand recall
Distribution network Quality and
technology
Product range Financial strength
Production capacity International
experience
Price range Coverage
Weakness Quality and
technology
Late comers
Financial strength Presence in only
premium segment
Lack of exposure Distribution network
No experience of
Indian market
Opportunity Huge market
potential
Huge market
potential
Rural and semi
urban market
Foreign brand pull
Threats Recession market Well established
local player
More and moreMNCs coming in
Retaliation
Domestic taxes and
burdens
Launching of quality
product by domestic
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company
PROJECTS DETAILS AND METHODOLOGY:
The marketing process consist of of analyzing marketing
opportunities, developing marketing strategies and planning
and marketing process
ANALYSING MARKETING OPPORTUNITIES
Every organization has to study market potential when it
is going to target new market segment or want to improve
product performance in the market.
Once organization analyzes its marketing opportunities
then it can target market with strong competitive strategies. Toknow the opportunities market research is to be made to gather
all the information about market environment, potential market,
and competitors.
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DEVELOPING MARKETING STRATEGIES
After adopting various marketing strategies for
differentiating and positioning, every organization has to look
through its performance in comparison with market competitors.
PLANNING MARKETING PROGRAMMES
To transfer marketing strategies into marketing programs,
marketing expenditure, marketing mix and marketing allocation.
The company has to decide how to divide the total
marketing budget among various marketing tools.
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TITLE OF THE PROJECT
Market mapping study
OBJECTIVE
MARKET MAPPING STUDY of the Consumer Durable Industry
in Hubli city, to study competitive structure, performance of LG in
Hubli market
SUB OBJECTIVES:
1. To find out market share various companies in Hubli
market.
2. To study consumer buying behavior special for consumer
durables in Hubli.
3. To elicit dealers satisfaction levels in term of sales
margin, credit facility, response and service given by the
companies.
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FINDINGS OF THE PROJECT:
MARKET SHARE:
Sales data of different companies in the consumer durable market for
the refrigeratorsegment:
Company Sales in units\month
Videocon 198
Onida 219
Lg 189
BPL 136
Electrolux 12
Samsung 134
Godrej 221
Haier 90
Hyundai 121
Kelvinator 145
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Sales data region wise for refrigerators (per month):
Company Dharwad Hubli
Videocon 72 60
Onida 97 90
Lg 80 87
BPL 75 56
Electrolux 3 6
Samsung 49 78
Godrej 131 122
Haier 36 10
Hyundai 10 31
Kelvinator 65 54
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Sales data of different companies in the consumer durable market for
the washing machine segment:
Company Sales in units\
month
Videocon 154
Onida 223
Lg 187-189
BPL 150
Electrolux 50
Samsung 150-200
Godrej 100-150
Haier 10-12
Hyundai 15-20
Kelvinator ____
Sales data region wise for washing machines:
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Company Hubli Dharwad
Videocon 100 93
Onida 150 100
Lg 125 45
BPL 50-60 10-12
Electrolux 5-8 5
Samsung 70-80 80
Godrej 10-15 25-30
Haier 10-12 18-20
Hyundai 8-10 20-25
Kelvinator _____ _____
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RECOMMENDATIONS and SUGGESSTIONS:
1)PROMOTIONAL ACTIVITIES:-
Only 10% in rural and 55% in urban customers are fully aware
of LG brand name. But it is major requirement of market to increase
awareness level.
Company should involve itself in local melas through LG
exhibition, social work by LG, wall painting wherever
possible, hoarding display, maintain high frequency of
television and newspaper advertisement.
Company should launch vans which could also be used for
service purpose.
Company should advertise on different medias of
advertisement like radio, and broadcasting in regional
languages.
2)SALES AND SERVICE:-
It is necessary to develop after sale service facility further,
although company is having good sale service but the dealers and
the consumers are not satisfied as compared to the competitors
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What company must do?
Company should go for special carriage vans which would
carry all the necessary spares and items which provide for
better logistics
These vans are required in urban areas so has to increase
brand awareness
Can be used for promotion by using various medias of
advertising like promotion of LG logos, schemes and discounts
3)TECHNOLOGICAL DEVELOPMENT
LG should keep continuous monitoring of technological
developments happening in and around in the market scenario
and keep in track the competitors strategy and make its product
update.
4) TAPPING NEW DEALERS:Tapping new dealers refers to the dissatisfaction amongst
the current dealers and in such a scenario attracting new dealers
for dealership would be a challenge for the company. The charts
clearly depict that LG dealers are not very satisfied with the
company in different aspects. Therefore the company should
contact such dealers in order to sort out their grievances. Further
the company should look out for potential dealers who are willing
to take up exclusive LG dealership. This would help the company
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to set a foundation for a strong networking channel and effective
logistics management.
5) ATTACK ON SPECIFIC SEGMENT:
The company till now has not got its positioning right in
the Hubli market. The number of working couples in the city is
rising day by day and there is also steep increase in the
number of independents residing in the city. Students from out
states are getting attracted towards the city for study purposes
and career options. So the company has a greater market
population at its disposal to target its products to.
1) Satisfaction level of LG dealers in respect to sales margin:
dissatisfied
22%
satisfied
78%
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2) Satisfaction level of LG dealers in respect to credit facility:
satisfied
72%
dissatisfied
28%
3) Satisfaction level of LG dealers in respect to response:
satisfied
91%
ssa s e
9%
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4) Satisfaction level of LG dealers in respect to service:
satisfied
94%
dissatisfied
6%
5) Dealers feeling about LGs performance:-
excellent
32%
good
20%
fair
24%
poor
4%
very poor
20%
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MARKET SHARE OF LG:
LG has very good performance in urban area but
negligible presence in rural markets. Its is because of its nonavailability and reach to the rural villages and sectors.
AWARENESS:
In the refrigerator segment Godrej has highest awarenessand it tops the customers mind by gaining around 30%. WhereasLG covers just 16% of market share which is quite less ascompared to its competitors.
UTLITY OF THE PROJECT
1. This project highlights mainly on competitive scenario in
this local market which is useful for company to develop
new strategies and become more competitive.
2. The suggestions of this project are helpful to increase the
operation with in the limited territory.
3. The analysis of the project shows which areas have to be
concentrated more for better sales.
4. The project identifies new requirement of the market.
6. The project makes an attempt to identify any new valueaddition that dealers were expectin
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ANNEXURE:
DEALERS QUESTIONNAIRE:
I Deepak S. Narayanan studying Bachelor of BusinessAdministration (BBA) at KLESs College of Business Administration. Iam undergoing a project work as part of my academic course. Theobjective of my project work is Market Mapping Study of ConsumerDurable Industry in Hubli. Therefore I request you to fill in thequestionnaire given below:
I assure you that the information given will be purely used foracademic purpose.
1) Name of the proprietor:2) Name of the agency :3) Number of years in business:4) Major products and brands dealt with at your counter
Major products Major brands
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5) Please mention the various brands you sell and their averagemonthly sale at your counter:
brands television refrigerator Washingmachine
Airconditioner
microwave audio
6) Who is the brand leader in the below mentioned segments atyour counter?
segments Rank1 Rank2 Rank 3
Color television
Refrigerators
Washingmachines
Air conditioner
microwave
Audio systems
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7) which company is the best in the following criterias:
Criteria Rank 1 Rank 2 Rank 3
Sales
After salesSchemes
Advertisements
Credit period
Customersatisfaction
8) Which two companies are the current market leaders in Hubli
Dharwad?a)b)
9) What are the strengths of the market leader you chose off?
1)2)3)
10) Rank the following companies on a scale pf 1-10.
(1- the poorest)(10- The best)
Company name Ranking
LG
Samsung
Sony
Whirlpool
Electrolux
KenstarVideocon
Godrej
Haier
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