EXPERIENCE CHANGE

Anil Saini Gaurav MahajanAmandeep SinghSanchit Jain

INDEX

Introduction to videocon

Where Are We Now?

Where We Want To Be?

How Will We Get There?

Conclusion

AN INTRODUCTION

VIDEOCON ….AT A GLANCE Founder : Late Nandlal Madhval Dhoot

Videocon is an Indian multinational company with interests in Consumer Electronics, Home Appliances , and Colour Picture Tube Glass.

In 1987, it used to manufacture TV and Washing Machine. In 1989-90, Videocon started manufacturing Home

Entertainment Systems,Electric Motors & AC.

Videocon entered Refrigerators and coolerssegment in 1991.

In 1995, Videocon started manufacturing Glassshells for CRT

Founder : Late Nandlal Madhval Dhoot

Videocon is an Indian multinational company with interests in Consumer Electronics, Home Appliances , and Colour Picture Tube Glass.

In 1987, it used to manufacture TV and Washing Machine. In 1989-90, Videocon started manufacturing Home Entertainment Systems,Electric Motors & AC.

Videocon entered Refrigerators and coolers segment in 1991.

In 1995, Videocon started manufacturing Glassshells for CRT

VIDEOCON AT A GLANCE

CONTD… In 1996 it ventured into Kitchen appliances . In 1998, Videocon started manufacturing

Compressors & Compressor Motors. In the year 2000, Videocon tookover Philips

Color TV Plant. In 2005, Videocon tookover 3 plants of

Electrolux India and acquired Thomson CPT. Today, it has evolved into a giant

conglomerate with annual revenues of overU$4.1 billion.

In 1996 it ventured into Kitchen appliances .

In 1998, Videocon started manufacturing Compressors & Compressor Motors.

In the year 2000, Videocon tookover Philips Color TV Plant.

In 2005, Videocon tookover 3 plants of Electrolux India and acquired Thomson CPT.

Today, it has evolved into a giant conglomerate with annual revenues of overU$4.1 billion

CONTD…

SSTEP 1

WHERE ARE WE NOW ?

19%15%

22%

13%

5%

3%

6%

1%

2%

2%

12%

LG

Samsung

Videocon Group

Mirc Group

BPL

Sony

Phillps

Panasonic

Sharp

Thomsan

Others

CONSUMER DURABLES MARKET

LG

Sam

sung

Mirc

Vide

ocon

Philips

Sony

othe

rs0

10

20

30

40

50

FCTVCCTVHigh end

Videocon has a good foot hold in the CCTV segment.

Television

23%

17%

6%20%

6%

15%

14%

LG

Samsung

IFB

Videocon *

Godrej

Whirlpool

Others

WASHING MACHINE

Videocon has a good strength in washing machine sector

25%

19%

18%

12%

22%

5%

LGSamsungGodrejVideoconwhirlpoolOthers

REFRIGRATORS

Videocon needs to capture a large area or segment in refrigrator sector

Consumer Electronics Home Appliances

Televisions Refrigerators

VCD players Washing Machines

Mobile Phones Microwave Ovens

Audio Systems Air Conditioners

LCDs , LEDs

STRATEGIC BUSINESS UNIT

An SBU in a strategic management sense, is an entire division in large corporations that carries out certain business. This approach entails the creation of SBU to address each market in which company is operating.

Videocon is operating in following products.

FACTORS AFFECTING COMPANY MARKETING STRATEGY

External factors

Political Factors

Labour unions effects a lot the production

Resolution to reduce emission of carbon footprints in the atmosphere

Anti-dumping duty on imported color picture tubes.

CONTEXT -PEST ANALYSIS

PEST ANALYSIS

Economic Factors

Growth of retail sector – expected to reach 16% by 2011-12 from 4% in FY07

Availability of finance. High investments are needed in the consumer

durables. Economic reforms by the government –higher

purchasing power Emergence of organized retail market with large

players like Croma, next, reliance digital etc – leading to lower prices and higher varieties

61 % of total urban income comes from

households —earning between US$ 1,493 and

US$ 9,955 a year.

PEST ANALYSIS

Social Factors

Disposable Income roughly doubled since 1985.

Changing perception of luxury to necessity. In rural areas there is poor infrastructural

facilities like availability of electricity. Demand of the consumer durables is

seasonal and cyclic. Highly growing consumer durable market.

PORTER’S FIVE FORCE MODEL

Porters Five Force

Rivalry and competition:

High

Power of suppliers: moderate to low

Threat from substitute

products/services:

High to moderate;

depends on the product

Threat from new entrants: moderate

Power of buyers: high

PEST ANALYSIS

Technological Factors

Improved electricity consumption. Higher quality products. Technological is changing at a very fast rate.

Threat to Entry   Entering market isn’t very easy. One of the most important

features needed is a good distribution system which isn’t something that can be developed overnight.

The brand plays an important role in influencing the purchase decision. For a new company then entering this market, not having a recognized brand name is a threat to entry.

MICRO ANALYSIS

Rivalry among existing firms - There is strong competition among the current players. The main players are LG, Samsung, Onida, Videocon, Philips, Sansui.

This increased competition has ensured that advertising costs are an integral part of the players’ total cost.

It is expected that realizations will fall with increased competition.

CONTD..Bargaining Power of Buyers

The TV market today is a consumer’s market where the consumer has the upper hand with him having the power of choosing from a variety if brands.

This bargaining power of the buyer has forced the players to offer credit facilities on sale, to provide lower EMIs and excellent after-sales service.

The intense dealer competition also benefits the consumer in terms of prices and offers available.

Threat of Substitutes-  For a television, the substitute can only be a functional substitute. The functional use of a television is to watch programs, live events etc. This today can also be done on a computer.

  Theaters too can be a substitute to watching movies at home.

CONTD…

Determinant of supplier power

Cost of switching supplier. Presence of substitute input. Importance of volume to supplier.

SWOT ANALYSIS

Strengths Weakness

•Backward integration.

•Diversified goods portfolio across Consumer

Durables Sector.

•Multi brand strategy.

•Global company.

•Image of low to medium cost company .

•Diversification into too many sectors.

•Not much international recognition.

•Too much rebranding/ changing of positioning.• Weak sales and service network.

Opportunities Threats

•India is big consumer durables market and growing at 10 to 15 % .•Lifestyle of people has been change very much so there is demand for premium products. •consumer durable market will become $158 billion by 2015.• Overall number of rural households estimated to grow from 135 million in 2001-02 to 153 million in 2009-10

•Stiff competition from MNCs like LG, Samsung, SONY.•Cheaply available of chinese products.•Virtually not able to establish the products for online sales and marketing.•Local brands available in the market.

WHERE WE WANTS TO BE?

STEP 2

?

MA

RK

ET

GR

OW

TH

RATE

HIGH

LOW

RELATIVE MARKET SHARE

BCG MATRIX

LCD,LEDs

1) Geographic Segmentation

In the colder regions sales of the refrigerators is much less than the colder regions so geographic conditions play a very vital role in product segmentation. Similarly other products are influenced by the climatic conditions, different locations and regions.

2) Demographic segmentation

This part of segmentation is done on the basis of age .gender, income, family size income, etc.. For eg the Sale of LCDs and LEDs depend upon income of the customer and also sale of Air Conditioners also depend upon the purchasing power of the customer.

SEGMENTATION

3 ) Behavioral Segmentation

It totally depends upon the usage rate of the customer and the loyalty of the customer towards the company. For example washing machines shows the best example for the consumer loyalty towards the videocon.

4) Psychographic Segmentation

In this segment luxurious goods, personality and lifestyle of the customer effects totally

Goods like air conditioners and plasma panels, home theaters are segmented.

CONTD…

People with disposable incomeLow income masses.YouthWomen & senior citizens

In premium segments like Televisions and Air Conditioners the growth in sales has been many times the industry growth. More importantly, high end product sales are no longer restricted to metros. Consumer in tier-2 cities seems to be as evolved in lifestyle needs. The consumer profile, too, has changed. Higher disposable incomes, greater aspirations and younger demographic have increased demands for the technologies. And Videocon is targeting these segment.

TARGETING

Once the competitive frame of reference for positioning has been fixed by defining the customer target market and nature of competition, marketers can define the appropriate points-of-difference and points-of parity associations. Points of Parity (POPs) are associations that are not necessarily unique to the brand but may infact be shared with other brands. They represent necessary-but not necessarily sufficient-conditions for brand choice.Videocon's Points-of-Parity are good quality Picture and good sound. Points-of-Difference (PODs) are attributes or benefits consumers strongly associates with a brand, positively evaluate, and believe that they could not find to the same extent with a competitive brand.Videocon's POD is the quality product with low cost.With the strong backward integration Videocon can provide the products with low cost. Thus, Videocon is positioned itself as a reliable and value-for-money product. 

POSITIONING

TOWS MATRIXStrengths.Diversified goods portfolio.Multi brand strategy.

Weakness.Weak brand image.Not much. international recognition.

Opportunities.Market growing very fast.Lifestyle changes are creating demand for premium products.

SO analysisProvide customized products according to preferences of consumers.

WO analysisImprove the brand image to capture the market.

Threats.Stiff competition from MNCs.Local brands availability.

ST analysisUse its brand basket effectively to compete with competitors.

SW analysisMore expenditure on advertisement and customer relationship management is required.

HOW WE WILL GET THERE ?

Marketing mix

7ps

Product Place

Price

Process

Physical evidence

People

Promotion

1. PRODUCT Consumer electronics Home appliances

LCDs Washing machine

LEDs Refrigerator

CTVs ACs

DVDs and Home theatre Microwave oven

2. PRICE

Value pricing. Promotional pricing. Bundling.( Combo offers )

3.PROMOTION • Advertising on t.v , print media, word of mouth,

dealer recommendations• The company organise many events to promote

the products like youth awards, celebrities night.

• Brand ambassadors like Shahrukh khan and MS Dhoni are being roped in to promote the products.

Above the line

promotion.

• Scratch cards , discount coupons , gift with purchase of product , money back offers , on the spot cash discounts , exchange offers , festive discounts .

• Free service camps and promotional campaigns should be organised to target specific areas .

Below the line

promotion.

4.PLACEo Videocon wants to tap rural market that’s why it will be opening 1000 more stores of its retail venture – NEXT and PLANET Mo The company have over 4000 Dealers and sub dealers and Network of 100 service centers.o The products of videocon arealso available at electronics stores like croma, ezone .

5. PROCESS

Company

Dealers

Customers

6. PEOPLE

Videocon has an environment which is- -Driven by Performance -Strong Value base -Empowered -Inclusive -Diversified Talent base -Fun-filled

7. PHYSICAL EVIDENCE

VIDEOCON BRANDING

o New logo. Unveiled on 2nd July, 2009o The new ‘V’ composed of two animated green showing going green, lava like shape called chouw and mouw.

MULTI BRANDS

RECOMMENDATIONS Continuing with go green and electricity

efficient products. Relationship marketing through improved

sales support. Focus on OEMs as in international market it

can provide cost effective products. Videocon is still not able to create a brand

name in the international market so the company should increase its marketing budget for making its presence felt in the international market.