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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

KLE Societys

College of Business Administration- B BA

Hubli


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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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