cunsumer behaviour group-2 project

8/6/2019 Cunsumer Behaviour Group-2 Project

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A Research Project Report

³M arket analysis of the products of LG on consumer durable goods

Industry in Delhi NCR´Submitted to IILM Gurgaon

Submitted By: Submitted To:

Acknowledgement It is indeed of great moment to pleasure to express my senses of per found gratitude & in-debt-ness to all the

people who have been instrumental in making my research project report as valuable. The research project is



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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. Similarly while doing the topic

as ³Market analysis of the products of LG on consumer durable goods Industry in Delhi NCR´ I took many

my research projects in help.

I also thanks to my project guide Mrs. Supriya Kala for his guidance during my project. I also thank to my

college director for giving me chance to get such an experience and giving me chance to get an industrial

experience.

(Rajeshwar Singh)

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



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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 marketWith 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

OBJECTIVES OF THE RESEARCH y To study the market share of branded computers in NCR.

y To check the demand of PCs and sales of PCs of other companies in the market.



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y To know the future aspect of LG My PC in NCR region.

y To know the retailers view about the market & customers.

y To enhances the knowledge about the marketing and branding activity.

SCOPE OF THE 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 Delhi NCR. 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



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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 ³JO 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 N.C.R. 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.

ORGANISATIONAL PROFILES

ABOUT PC INDUSTRYThe PC industry is one of the strongest in the world. There is probably no other type of product that

is so technologically sophisticated, sells for so much money, and yet is sold by so many companies

for so little profit. The severe competition in the industry is the reason why those who deal with PC

vendors encounter so many problems.



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In this report we have tried to bring forth the major areas in which a new PC vendor can enter and

penetrate in the market. The segments that are important to the PC vendors, their buying behavior,

purchasing power, etc. are segregated in this report. With the presence of so many PC vendors in

the organized and unorganized sector that consists of assembled PC market it is not very easy to

launch a new company in the same field.

Over the last decade or so, the PC industry in India has undergone a sea change. The entry of

MNC brands in the 1990s changed the rules of the game, as the industry at that time was

predominantly the domain of assemblers and some local manufacturers. Given these dynamics,

the going, at least initially, was not easy for the Compaqs, HPs and the IB Ms, as they had to

struggle to build brands as well as to give their offerings as much of a local flavor as would make

them attractive to the Indian buying segments. Moreover the MNCs also had to combat the

goodwill, the trust and the loyalty that the friendly neighborhood assembler had built over the years

with clients cutting across the big through small-enterprise markets. B ut as the years rolled on, thebranded- PC industry secured what today constitutes a major slice of the Indian PC market pie.In such circumstances it is very difficult to survive for the small players. B ut MNCs like LG, HCL,

HP, IB M Computers, etc. are doing good job and earning heavy profit consider the economy of our

country. It is also emerging into a powerful economy and after a decade or so; India will be an

economic power of this region.

COMPANY PROFILE LG Electronics Inc . LG Electronics, Inc. was established in 1958 as the pioneer in the Korean consumer

electronics market. The company is is a global force in electronics, information and

communications products with 2004 annual sales of US $38 billion (consolidated). With more

than 66,000 employees working in 76 subsidiaries in 39 countries around the world, LG

Electronics is comprised of four main business companies including Mobile Communications,

Digital Appliance, Digital Display, and Digital Media.



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Corporate NameLG Electronics I nc .

Es tabli sh edOctober 1, 1958 (As a private Company)

Corporate OfficeLG Twin Towers 20,Yoido-dong, Youngdungpo-gu Seoul, Korea 150-721Tel: 82-2-3777-1114URL: http://www.LGE.com

V ice C h airman & C E OS.S.Kim

Bu s ine ss Area andMain Prod u ctMobile Comm u nication s Company Wired -wireless handsets and network services, CDMA, GSM, 3G(WCDMA / cdma2000)

D igital Appliance Company Air Conditioner, Refrigerator, Microwave Oven, Washing Machine, Vacuum Cleaner, Compressor for Air Conditioner, Compressor for Refrigerator

D igital D is play Company Digital TV, PDP, Monitor

D igital Media Company CD-ROM Drives, DVD-ROM Drives, CD Rewritable Recorder, VCR, DVD Player, Audio, SecuritySystem, Recording Media, Video Phone, PC Camera, B anking Automatic System , PC B

Nu mber of E mployee s 66,614(31,614 in Korea/ 35,000 overseas)



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Consumer Durable Goods In IndiaLG Electronics India Pvt. Ltd., a wholly owned subsidiary of LG Electronics, South Korea was established inJanuary 1997 after clearance from the Foreign Investment Promotion Board (FIPB). The trend of beatingindustry norms started with the fastest ever-nationwide launch by LG in a period of 4 months with thecommencement 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. The LG manufactures Color Televisions

(CTVs), Washing Machines, Air-Conditioners (ACs), Microwave Ovens, Refrigerators PCs and Monitors. Inthe short span of eight years, LG has achieved the position of a premium brand in the Indian market and istoday the most preferred brand in the consumer durable and home appliance segments. In 2004, thecompany's turnover touched Rs65bn, the highest among any company in this segment in the country. Thecompany has set a target of achieving a turnover of Rs90bn in 2005. LG wants its Indian unit to generateUS$10bn in annual revenue by 2010. Around 30% of these revenue will come from exports. During the year 2001, LG also commenced the home production for its Eco-friendly Refrigerators and established itsassembly line for its PC Monitors at its Greater Noida manufacturing unit. The beginning of 2003 will seeroll out of the first locally manufactured Direct Cool Refrigerator from the plant at Greater Noida.The Greater Noida manufacturing unit line has been designed with the latest technologies at par withinternational 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 five years, a premium brand positioning in the Indian market and is today themost preferred brand in the segmentVarious 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. Itsvision 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 LG has'Golden Eye' technology, which senses the light levels in the room and adjusts the picture to make it morecomfortable for the eyes. The entire range of LG air-conditioners have 'Health Air System', which not justcools, but keeps pollution out. Similarly, microwave ovens have the 'Health Wave System', refrigerators havethe 'PN System', which preserve the nutrition in food and washing machines have 'Fabricare System', whichtakes the health factor down to ones clothes. All the products offered by the company have uniquetechnologies, 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, homeappliances and computer peripherals industry. The company had till the month of October 2001 achieved acumulative turnover of Rs 5000 Crores in India since its inception in 1997, making it the fastest ever Rs 5000Crores clocked by any company in the Indian consumer electronics and home appliances industry. Havingachieved this milestone, LG achieved another benchmark with the first ever sales of One Lakh ACs(Windows and Splits) in a calendar year. LG is poised to surpass its turnover target of Rs. 2700 Crores thisyear and clock a turnover of Rs. 3000 Crores.LG Electronics India is the fastest growing company in the consumer electronics, home appliances andcomputer peripherals industry today. LG Electronics is continually providing superior technology products &value for money to over 50 lakh households in India.LG is a No. 1 in the Air Conditioners in India and among the top priority in the sale of all other consumer electronics. In addition, LG¶s Golden Eye television offers the world¶s most advanced picture system.There are 18 branches offices covering whole of India in the following cities ± Ahmadabad, Bangalore,Bhuwaneshwar, Kolkata, Chandigarh, Chennai, Cochin, Patna, Guwahati, Hyderabad, Indore, Jaipur,Lucknow, Mumbai, New Delhi, Haryana, Meerut & Pune. While corporate office is situated at Greater

Noida, U.P & Regd. Office at Okhala Industrial Estate, New Delhi.



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Prod u ction Capacity:

y CTVs - 5 lakh units per annumy ACs - 1 lakh units per annumy Refrigerators - 5 lakh units per annumy Washing Machines - 2 lakh units per annumy

Microwave Ovens - 0.5 lakh units per annumy Mobile phone handsets - 10 lakh units per annumy Monitors - 1 lakh units

R &D Th r u s t:

y LG aims to spend 2-3% of its total revenue on Research & Development (R&D) and hopes toestablish India as an R&D hub for consumer electronics, home appliances and GSM handsets.

y At the end of 2004 LG had around 70 people in R&D at Pune, including Hardware and Software.This will be scaled up to 350 by the end of 2007, and 550 by 2010.

y

At Noida, its R&D strength was 190 at the end of last year. This will be increased to 210 by the endof 2007, and further to 300 by the end of 2010.y At its Bangalore centre, the R&D strength was 420 by the end of 2004. This will go up to 900 by the

end of 2007, and 1500 by the end of 2010.y By the end of 2010, LG will have 1,690 people doing R&D in Software and another 660 in Hardware,

taking its total manpower strength in R&D to 2,350.y At the end of 2004, LG had spent US$23mn and US$20mn on its Software and Hardware centres in

the country respectively. By the end of 2007, it will increase to US$67mn and US$43mn. By 2010, itwill go up further to US$124mn and US$88mn.

Market S h are:

CTVs - LG has sold the highest ever number of CTVs in a month, and has set a landmark for the industry byselling over one million CTVs in a single calendar year. According to the recent retail audit conducted byORG-GFK (Jan 2005), LG has consolidated its leadership position in CTVs with a market share of 26.7%.Washing Machines - In the overall category, LG has emerged and established itself as the No.1 brand with amarket share of 35.2%. In the Semi Automatic segment, it has attained a market share of 36.5% while in theFully Automatic segment it makes up 34.5% of the total market.Refrigerators - LG leads the market in refrigerators with a market share of 28.1%. Further in Frost Free LGhas emerged as the undisputed leader with a market share of 35.4%.ACs - The Company currently enjoys a market share of 45% in the Room AC (Window and Split) segment.Microwave Ovens - LG is the leader in this category with a market share of 41.4%.IT Products - LG has already become No.1 in the Optical Storage Devices (OSD) segment and is fastemerging as the market leader in the monitor segment also. It has around 34% share in Monitors and 44% inOSD apart from 15% in Personal Computers (PCs).

Vision 2010LG Electronics India aims to become Rs450bn Company in India. Out of this, Consumer Electronics willaccount for Rs112.5bn; Home Appliances Rs12.5bn; IT Rs67.5bn and Mobile Phones Rs157.5bn. Exportswill constitute 30% of total revenue at Rs140bn.



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PHILOSOPHY

Complete in the International Market with a Global Mindset.

Maximize value for Customers, Employees and Shareholders.

Pursue the best in the class through Management by Principal.

Contribute to the society through good ³corporate citizenship´. INITIATI V E S

Redesign business portfolio.

Develop new strategic business.

Globalization.

Acquire promising differentiated technology.

Cultivate high performing leader.

RESEARCH METHODOLOGYRESEARCH

Research Methodology is a systematic way, which consists of series of actions or steps necessary toeffectively carry out research and the desired sequencing of these steps. The marketing research is a processof involves a number of inter-related activities, which overlap and do rigidly follow a particular sequence.RESEARCH DESIGNResearch Design specifies the methods and procedures for conducting a particular study. A Research Designis the arrangement of conditions for collection and analysis of the data in a manner that aims to combinerelevance to the research purpose with economy in procedure. Research Design is broadly classified intothree types as: Exploratory Research Design, Descriptive Research Design, and Hypothesis testing ResearchDesignOn the basis of the objective of study, the studies which are concerned with describing the characteristics of a

particular individual, or of a group of individual under study comes under Exploratory Research Design.

EXPLORATORY RESEARCH DESIGN

Exploratory Research is also termed as Formularize research studies. The main purpose of such studies is thatof formulating the problem for more precise investigation. The major emphasis in such studies is on thediscovery of new ideas and insights.In this research design the objective of study is clearly defined and has accurate method of measurement with

a clear-cut definition of population which is to be studied.SAMPLING DESIGNIt is needless to say that no investigator can study the entire population and hence selects a few individuals

belonging to the population for the purpose of investigation.A Sample Design is a definite plan for obtaining a sample from a given population. It refers to the techniqueor the procedure adopted in selecting items for the sample. The main constituents of the sampling design areas below: -

1. Sampling Unit



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2 . Sample Size

3. Sampling Procedure

4. Collection of Data

SAMPLING UNITA sampling framework i.e. developed for the target population will be sampled i.e. who is to be surveyed.

Retailers & Distributors of PCs

SAMPLE SIZE

It is the substantial portion of the target population that are sampled to achieve reliable results. I have taken55 Retailers & Distributors as a sample. NON-PROBABILITY SAMPLING

It is a purposive sampling which deliberately chooses the particular units of the universe for constituting asample on the basis that the small mass that they so select out of a huge one will be typical or representativeof the whole. Non-Probability sampling technique is used in the study because the random selection of the

universe i.e. all retailers can¶t be available randomly.D ATA COLL E CTIONPrimary Data

The primary data are those data that are collected afresh and for the first time. And happen to be original in

character. The primary data to be collected for the study are: -

y B y Interviewing the retailers & distributors of PCs.y B y Structured Questionnaire.

Secondary D ata

Secondary data are those data which have already been collected by someone else and which already hadbeen passed through the statically process. The secondary data to be collected for the study are: -

y Publication of the companyy Periodical of the company

y B y Companies Websites

RESEARCH INSTRUMENT

ST RU CT UR E D QU E STIONNAI R E : -

A Questionnaire consists of a number of questions printed or typed n a definite order on a form or set of forms. It is the set of questions presented to the respondents for their answers. When the questions have onlytwo alternatives or of multiple choices, then it is known as closed -end questionnaire ,

which is hence used thegiven study.



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TA B U LATION & ANALYSIS OF D ATAData analysis with the help of questionnaire filled up by the Retailers and Distributors. The responses are

very encouraging. 75% responses are obtained & analyzed carefully.

D ata Analy s is For Q u e s tionnaire Of R etailer s

Market share of major players in the industry

The study shows the following figures about the market share of major players in the industry,

which is shown in the table and pie chart below:

HCL 13.99%HP 12.65%LG 2.84%

IB M 5.78%Wipro 2.53%Zenith 3.75%

Dell 3.12%PCs 3.12%

Acer 3.23 Apple .74Others 4.25%

Assemble 44.00%

The pie chart above shows that. The assembled market share is 48% then HCL share is 14%then comes HP at 12.65% % LG market share is 2.84 in Indian Market. Majority of people

13.99%

12.65%

5.78%

3.75%

3.25%3.23%3.12%

2.84%2.55%0.74%

48.10%

Market Sh

are of B

randed PCs

In Indu s

try

HCLHPIB MZENITHPCs

Acer DellLGWipro

Apple Assemble



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preferred the unorganized assemblers due as they were providing the PCs at low cost. Thedifference between assembled and branded PCs was around 18%-20%. After slash of dutiesfrom March 1, 2005 and April 1, 2005 this difference has come down to 3%-4% only. So, newopportunities have opened.

The total output of the PCs in 2003-04 & 2004-05

Company 2003-04 2004-2005U nit s U nit s

HCL 298400 473445HP 252718 427620

IB M 140000 195750ZENITH 113826 126699

PCs 70626 110030 Acer 65953 109065Dell 80000 105000LG 0 95600

Wipro 64098 86434

Apple 15000 25000 Assembled 1559000 1628124

Total 2659621 3382767

This chart shows that the maximum turnover of others & assembled computers in 2003-04 & 2004-05

then the turnover of HCL is greater then other brands and LG turnover in 2004-05 is 95600.

Market share of branded PCs

Total Output Units

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

1800000

H C L H P I B M

Z E N I T

P C

s A c

e r D e l l L G

W i p r o

A p p l e

O t h e r s

& a s s

e m b l e

Company

U n i t 2003-04 Units

2004-2005 Units



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HCL 8HP 6

IB M 4ZENITH 3

PCs 2 Acer 2

Compaq 3LG 5

Wipro 2 Assemble 20

Total 55

This pie chart shows that the highest market capture by the HCL in branded market & its share is 15%

then HP covers the 12% market & LG has also capture 9% of the market in 2004-05 but the assemble

computers capture the 37.57% of the market share. Here the assemble PCs also cover the big market

share in this region.

Types of PCs sold by the Retailers & Distributors

B randed18 Retailers

& Distributors

Assemble12 Retailers

& Distributors

B oth25 Retailers

& Distributors

Total

55 R etailer s &

D is trib u tor s

15.00%

12.00%

8.00%

5.00%

0.85%

0.58%7.00%

9.00%5.00%

37.57%

Market S h are of B randed PC s

HCL

HPIB M

ZENITH

PCs

Acer

Compaq

LG

Wipro

Assemble



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64% retailers & Distributors said that the customer purchase branded computers & 36% retailers

& Distributors said that the customers purchase the assembled computers.

No. Brands sold by the retailers & distributors

N o . o f $

r % &

'

s s o l'

$

y t h e R e t % i l e r s (

D i s t r i$

u t o r s

O n l) 0 , 1 , 0

2

3

4

, 0 5 ,4

6

3

4

t o 7 , 0 1 , 5 7 3

8 o r e t 9 e 7 , 0

6

,4

7 3

O n l) 0

4

4

t o 7

8 o r e t 9 e 7

16% retailers & distributors dealing with only one brand of the computers, 24% retailers &distributors dealing with two brands of the computers, 35% retailers & distributorsdealing with 2

to 5 brands of the computers & 25% retailers & distributors deal with more then 5 brands in the

market.

PC B rand s Hig h er In D emand

B rand s R etailer s &D is trib u tor s

LG 5HCL 8HP 7Compaq 5Zenith 3Wipro 2IB M 5

Assemble 20Total 55

No . Of B rand s R etailer s &

D is trib u tor s

Only 1 9

2 13

2 to 5 19

More the 5 14

Total 55



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B s h e r D e m a n d

L G

9 % H C L

1 5 %

C o @ p a q9 %

A s s e @ b le3 6 %

H P

1 3 %

Z e n iA

B

5 %

W ip r o4 %

IB M9 %

L G

H C L

H P

C o @ p a q

Z e n iA

B

W ip r o

IB M

A s s e @ b le

9% reta iler s & dis tr ibutor s s a id that the cu s to er pre f er LG , 15% reta iler s s a id that the cu s to er

pre f er HCL , 1 3% reta iler s & dis tr ibutor s s a id that the cu s to er pre f er HP , 9% reta iler s &

dis tr ibutor s s a id that the cu s to er pre f er C o paq , 5% reta iler s & dis tr ibutor s s a id that the

cu s to er pre f er Z en ith , 4% reta iler s & dis tr ibutor s s a id that the cu s to er pre f er W ipro , 9%

reta iler s & dis tr ibutor s s a id that the cu s to er pre f er IBM & 36 % reta iler s & dis tr ibutor s s a id that

the cu s to er pre f er A ss e b le d c o p uter s

Average mont h ly demand of t h e LG MyPc

No . Of PC s R etailer s Up to 10 3110 to 20 14

Above 20 10Total 55

Average monthly demand of LG MyPc

3114

10

Upto 10

10 to 20

above 20



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31% retailers & distributors said that average demand of LG computers is up to 10 units

monthly, 14% retailers & distributors said that average demand of LG computers is 10 to 20

units monthly & 10% retailers & distributors said that average demand of LG computers is above

20 units monthly.

Pricing Factor affect s to t h e c u s tomer s

Importance R etailer s & D is trib u tor s

Very much 27 Almost 16

Less 7No effect 5

Total 55

49% retailers & distributors believe that price is the very much important affecting factors to thecustomers, 29% retailers & distributors believe that price is almost important affecting factors to thecustomers, 13% retailers & distributors believe that price is the less important affecting factors to thecustomers , 9% retailers & distributors believe that price is not important affecting factors to thecustomers.

R e s pon s e s on t h e s tatement ³C u s tomer i s alway s be s t prod u ct s eeker .´

Strongly agreed 23

Agreed 16Disagreed 11

Can¶t say 5

Total 55

27, 49%

16, 29%

7, 13%5, 9%

Pricing factor affect s to t h e c u s tomer s

Very much

Almost

Less

No effect



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23 retailers & distributors are strongly agreed with the statement that customer is always best productseeker, 16 retailers & distributors are agreed with the statement that customer is always best productseeker, 11 retailers & distributors are disagreed with the statement that customer is always best productseeker & 5% retailers & distributors can¶t say any thing on the statement that customer is always best

product seeker. Important factor s affect s to t h e PC c u s tomer s

Factor s R etailer s &

D is trib u tor s

Price 12

Quality 16B rand 14

Availability 4

Advertisement 9

Total 55

23

16

11

5

0

5

10

15

20

25

Strongly agreed Agreed Disagreed Cant't say

Strongly agreed AgreedDisagreedCant't say

12, 22%

16, 29%14, 26%

4, 7%9, 16%

Important factor s affect s to t h e c u s tomer s

Price

Quality

B rand

Availability Advertisement



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22% retailers & distributors believe that price is the important factor at the time of purchasing a product,30% retailers & distributors believe that product is the important factor at the time of purchasing a

product, 25% retailers & distributors believe that brand is the important factor at the time of purchasing a product, 7% retailers & distributors believe that availability is the important factor at the time of purchasing a product & 16% retailers & distributors believe that advertisement is the important factor atthe time of purchasing a product.

Service s make s good relation sh ip wit h c u s tomer s &retailer s

93% retailers & distributors said that service provided by the company makes a good relationship with

customers as well as with intermediaries also & 7% retailers & distributors said that service provided by

the company not makes a good relationship with customers as well as with intermediaries also.

Importance of profit margin for retailer s & D is trib u tor s

Most important 33

Important 17

Not important 5

Total 55

51, 93%

4, 7%

Service s make s relation sh ip wit h retailer s &c u s tomer s

Yes

No

Yes 51

No 4

Total 55



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60% retailers & distributors believes that profit margin on the product is most important for the retailers &

distributors, 31% retailers & distributors believes that profit margin on the product is important for the

retailers & distributors & 9% retailers & distributors believes that profit margin on the product is not

important for them.

No . of brand s conf u s ed t h e c u s tomer s

Yes 35

No 20

Total 55

33, 60%17, 31%

5, 9%

Importance of profit margin for retailer s &di s trib u tor s

Most importantImportant

Not important

35, 64%

20, 36%

D oe s th e large no . of brand s make s c u s tomer conf u s ed?

YesNo



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64% retailers & distributors are agreed with the statement that large number of products makes

customer confused, 36% retailers & distributors are not agreed with the statement that large number

of products makes customer confused.

Average mont h ly s ale of comp u ter s in NC R region

B rand s U nit s LG 250

HCL 425HP 375

IB M 100Compaq 125

Dell 50Zenith 85

Assembled 850Total 2260

250, 11%

425, 19%

375, 17%100, 4%

125, 5%50, 2%

85, 4%

850, 38%

Average mont h ly s ale of PC s

LG

HCL

HP

IB M

Compaq

Dell

Zenith

Assembled



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FIND INGSIndian PC b u yer s find val u e in brand s

The market for assembled personal computers (PCs) is shrinking fast as branded majors continue to slash prices and plug the gap. Even as assemblers realize that they no longer have an edge, either in pricing or

after-sales service, optimists indicate that it's not the end of the road for them yet.As of now, the message is loud and clear. Gone are the days of 65-70% market share for the assemblingsegment when first-time PC buyers preferred going to standalone hardware professionals. With thecrashing prices of branded PCs, the Indian consumer, including the first time user, is seeing more value in

branded products. While the total Indian PC market has been growing between 25-30% annually, theassembled segment has actually reported a negative growth over the past 12 months.

D emand of t h e PC s

With the growing need for computerization, branded PC demand in public sector organizations and in thegovernment is on the rise. Demand from the private sector, especially in the educational institutes andhome segment, is already rising. The small office home office (SOHO) and small-and-medium enterprise(SME) segments are also driving hardware demand. The growing popularity of the Internet has also raisedthe demand for branded PCs.Abo u t T h e A ss embler s :

The once ubiquitous neighborhood friendly assemblers were losing their face in the heat of intensecompetition from the branded segment of the PC industry. Industry estimates peg the share of assemblesfor the fiscal at around 48%. A MAIT-IMRB study said that market share for assembled PCs, which was57% in FY 2003-04 was reduced to 44% in the first-half of FY 2004-05. Margin pressures and the 4%countervailing duty (CVD) that the government imposed on computer components put great stress onassemblers. In this scenario, better margins are there for those manufacturers who import fully built PCsas there would not be multiple taxation. While big players absorbed the tax and duty changes, the budget-

constrained assemblers found the going difficult as customer loyalties shifted more to the branded side.Also, PC buyers found the service levels deficient with assemblers who were not able to offer quality andtimely service unlike a branded PC manufacturer. In all, tough times are ahead for assemblers unless theyre-invent and align with branded players.

y Good News For PC Vendors:Indian PC Market up 34.4% in 2004y The industry recorded the second highest shipments at 33.87 lakh in Asia-Pacific regiony Gartner, an industry expert, expects Indian market to grow by 29.3 per cent in 2005, due to the

strong economic indicators.y 32,67,885 desktops were sold in 2004 in India.y PC Industry grew at a healthy rate of 26%, with volumes crossing 3.3 mn unitsy Assemblers found the going difficult as cheaper branded PCs gained more market sharey B and C class regions continued to represent a big opportunity for PC businessy In FY 2004-05, assemblers lost share to brands in a big way. Their market share shrink further

from 58% to 48%y Assemblers and Intel got very aggressive in B and C class towns with active marketing and promos



24

SWOT ANALYSISS: - ST R E NGHTS

y Quality based products.y Experience of international market.y

Developed R & D.y Increasing range of products.y Suitable hierarchy of organization.y Reliable products.y Customer satisfaction oriented.y Skilled employees at all level.y Ethical work towards society.y Looking forward for different types of other field to make organization wealthy.

W : - W E AKE NE SS E S

y Unawareness of Brand Name.y Small market segment.y Duplicity of products.y Lesser control over duplicity.y Price discrimination & wrong pricing.y No proper promotional strategies.y Weak market intelligence system.

O: - OPPO R TU NITIE S

y Grasp maximum market share by utilizing well-developed R & D.y H aving large no. Of professionals in surroundings.y Customers are highly aware with the brand name & quality of the products.y Rapid increase in demand of PCs, therefore highly potential market is available.y W ell-developed distribution channel in other electronic goods.

T: - TH R E ATS

y High competition from other brands.y Market slump.y Customers are highly confused by the promotional strategies followed by the competitors.y Retailers are demand oriented.y High market share of assembled PCs

Beyond the above description I would like to mention it that in LG Electronics India Pvt. Ltd. The whole pattern of marketing is quite effective and is appreciable because they have established so huge empirewith in three to four years.



25

CONCLUSION

The outlook for FY 2005-06 is very positive, as vendors are bullish on huge volume growth in both home

and the enterprises, which could further drive the PC volumes. A consolidation of vendor growth

estimates for the ongoing

fiscal puts the volume grow that 32-34%. Intel¶s P4 HT configurations will see lots of traction and will

start cannibalizing on its entry-level Celeron based offerings as one is seeing a declining interest in

Celeron based machines. The consumer

will be more willing to pay a small premium for P4 desktops. However, on the portables front, mobile

Celeron will be key to the growth of entry-level offerings with the education segment expected to drive

bigger volumes. Similarly, the Centrino-based notebooks will further become affordable and will breach

the Rs 45K barrier in the ensuing quarters of FY 2005-06. With the impact of the new tax and duty

regimes in place, most vendors consider that it only created a brief confusion on the part of the vendors,channels, and the consumers, and many believe that it will not create any major pricing fluctuations. It

was a very eventful

year for the PC business in India and one only hopes this revival will drive bigger growth in the days

ahead.

As I made a comparative study of Monthly sale of different brands of PCs like L.G, HP, Compaq, IBM,

HCL, Zenith. I found HCL and HP to be the cutthroat rival of L.G. This is because of the reason that many

other brands deal in mainly in their branded PCs and concentrate on them. But HCL & HP like the

policies of LG concentrate on the peripherals market too.

According to my study I found some discrepancies by the side of LG Electronics. Many retailers and

distributors complained of not having a proper channel for sale.

So a proper channel should be made in which the distributors should supply products to sub distributors,

then the sub distributors should supply products to the retailers or dealers. And finally it should reach to

the customers through them.



26

LIMITATIONS OF ST UD Y

Every research is conducted under some boundations and this research is not an exception. While

doing the research some of the restraints had to be faced such as: -

y The researcher could not cover each & every retailer & distributor because the sample survey was

done.y There might have been tendencies among the respondents to amplify or filter their responses under

the testing conditions.y Since the results have been drawn on the basis of the information provided by the respondents,

chances of error might have crept in.y Since the study involved sampling method, µDrop in¶ or µGo through¶ error might have crept in.y Unintelligent answers or misinterpretation of any question by the respondent could not be

corrected.y Personal Biases of retailers and distributors may affect their responses.y

From all surveyed retailers and distributors only 75% have responded positively.

SUGGESTIONS AND RECOMMENDATIONSAlmost 50% of the Retailers and distributors contacted complained of the services given. So satisfactionof these 50% of retailers and distributors is necessary, so the company should take measures by servicesection to come up to their expectations, following are the main suggestions to be followed by thecompany to improve the sales.

y LG MYPCs price should be less.y Advertising material is not available there is a lack of pamphlets & brochures for advertising.y

S

ervice should be improved.y Onsite service should be also improved.y Proper channeling of products from distributors to retailers.y Consistence policies should be followed regarding distributors.y Direct interaction between service members & dealers should be there.y Improve dispatch and delivery of goods.y Action must be taken if call is not attended after 24 hrs of registration call.y There should be proper coordination between sales person & service people, because the sales

person says something else & the service people do something else.

y Many dealers are unaware of LG MyPCs so it should be properly supplied & made known tothem.

The sale of LG MyPc is not very good in NCR region, if above suggestion will be positively accepted bythe company then the day is not far when LG will be the best in this region.



27

BIBLIOGRAPHYBOOKS:

1. Kotler Philip, marketing management, millennium edition, New Delhi, PHI 2002.2. Sherlekar S.A. et al, Principles of Marketing, Second edition, Himalya publication, New

Delhi.

3. Kothari C.R. Research Methodology, Second edition, Wishwa Publication, 2002.

CATALOG:

Catalog of LG Electronics India Pvt. Ltd.

MAGAZINES:

y B usiness standardy

B

usiness worldy Data Quest.

INTERNET:

Information from official website of LG Electronics India Pvt. Ltd.www.lge.com www.dqindia.comwww.lgindia.com www.pcquest.comwww.lgezbuy.comwww.google.com

NEWSPAPER: y Times of indiay Hindustan timesy Economic times



28

ANNEX UR E :

QU E STIONNAI R E FO R R E TAIL E R S & D IST R IB U TO R S

We are carrying out a study for the knowledge of the current market share of the Branded PCs, percentage

rise in the sales of branded PCs & the future aspect of LG MyPc in NCR region. We would appreciate if you will please convey your view on the different questions referred to this questionnaire. On behalf of the

sponsor of this research study I thank you for sparing your valuable time.

Name of the shop««««««««««««««««««««««..

Address ««««««««««««««««««««««««««...

1. Which PC you sell in the market?

a) Branded

b) Assemble

c) Both

2. In your view which PC do the customers prefer?

a) Branded

b) Assembled

3. How many brands you sell?

a) Only1 b) 2 Brands

c) 2 to 5 Brands d) More then 5

4. Which PC is having mostly the higher demand?

a) LG b) HCL c) HP

d) IBM e) Compaq f) Zenith

g) Any other««

5. What is the average monthly demand for LG MyPc?

a) Up to 10



29

b) 10-20

c) Above 20

6. In your opinion how much pricing factor affects to the customer?

a) Very much

b) Almost

c) Less

8. Are you agreed that the customers are always best product seeker?

a) Strongly agreed

b) Agreed

c) Disagreed

d) Can¶t say

9. In present scenario which one is the most important factors for customers, which affects the

purchasing decision?

a) Price

b) Quality

c) Brand

d) Availability

e) Advertisement

10. Services make good relationship with customers & retailers?

a) Yes

b) No11. How much importance of profit margin for retailers & distributors?

a) Most important

b) Important



c) Not important

12. Does the large numbers of product makes customer confused?

a) Yes

b) No

13. Monthly Sales In Percentage :

LG

HCL

IBM

Compaq

Zenith

HP

IBM

Dell

Wipro

Assembled

15. Opinion/suggestion for LG Electronics India Pvt. Ltd.

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Thanks for giving important details Name & Signature

cunsumer behaviour group-2 project

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