New Marketing Strategy Of Lg Company 5h4gw

Study of Marketing strategy of LG company in India

CHAPTER 1 EXECUTIVE SUMMARY

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EXECUTIVE SUMMARY Indian consumer durables market used to be dominated by few domestic players like Godrej ,Voltas Allwyn and Kelvinater .But post liberalization much foreign company have entered into Indian market dethroning the Indian player and dominating Indian market the major categories in the market CTV, REFRIGRATOR, AIR CONDTIONERS AND WASHING MACHINES. India being the second largest growing economy with huge consumer class has resulted in consumer durables as the fastest growing industries in India LG, SAMSUNG the Korean companies has been maintaining the lead in the industries with LG being leader in most all the categories. The rural market is growing faster than the urban market, although the penetration level is much more. The CTV segment is expected to the largest contributing segment to the overall growth the industry. The rising income levels double-income families and consumer awareness are the main growth drivers of the industries. Consumer durables major LG Electronics India pvt.ltd (LGEIL) will invest nearly Rs.500 Cr in India this year in research and development, brand-building and other marketing initiatives. The company having a turnover of Rs.9500 Cr. and market share of 26 percent, is investing Rs. 360 Cr. on brand-building and other marketing initiatives and around Rs. 140 Cr. on research and development, besides launching new platforms in information technology and related areas LG’s innovative ‘211 campaign’ to provide quality after-sales service, will also be expanded the existing 22 to 40 cities by next month, The campaign, for which IT infrastructure has been set up, includes the company’s response to customer complaint within the two hours. The fixing time for companies varies from one hour to a maximum of 24 hours.

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Study of Marketing strategy of LG company in India The objectives that a good brand will achieve include:     

Deliver the message clearly. Confirms your credibility. Connects your target prospects emotionally. Motivates the buyer. Concrete loyalty.

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CHAPTER 2 LITERATURE REVIEW

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LITERATURE REVIEW Competitive analysis Competitor analysis is an important part of firm’s development of its strategy. Its importance lies in understanding of competitors, their strategy, and resources and capabilities. More specifically competitive analysis also allows a firm to access its own firm verses competitors and plan for what competitor’s action may be as a reactive to action the firm may take.

A competitor analysis provides a firm with the knowledge to leverage its strength and address its weakness and, currently, take advantage of competitors consist their strength. Finally, competitor analysis also gives a firm a better understanding not only of the competitors but also their overall sector and where the emerging opportunities may be.

In the time of internship as working on the topic of competitive analysis, I referred to various literatures as published on internet on consumer durables while goods various consumer durables companies etc.

Consumer durables in India A combination of changing lifestyles, higher disposable income, greater product awareness and affordable pricing has been internal in changing the pattern and amount of consumer expenditure leading to robust growth of consumer durables industry.

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CHAPTER 3

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OBJECTIVE OF THE STUDY OBJECTIVE OF THE PROJECT

Primary Objective  The main of filed survey during the project was to find out the market share of the LG and also calculate the display share.  Find out the positional dealer who can sale the LG product in large volume.  The main objective of research was to identify potential dealer and development these dealer. So LG can make them their direct dealer.  This will ease the dependence on the some big dealer like Maharashtra and Mahaveer electronics.  Find out the problem faced by dealer in sales and the distribution.

Secondary Objective  The objective was to find out that how far the exhibitions are helpful in branding.  While purchasing the consumer durables which parameter is most important for the consumer  Do the consumers prefer the financial facility for buying consumer durable?  How frequently consumers change the consumer durable?  To enhances the knowledge of consumer durable market.  To enhances the knowledge about the marketing and branding activity.

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CHAPTER 4 COMPANY PROFILE

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VISION

Global Top 3 by 2010 Global top 3 Electronic/Telecommunication company

GROWTH STRATEGY ‘‘Fast Innovation, Fast growth

CORE COMPETENCY ‘’Product leadership, market leadership, people leadership’’

CORPORATE CULTURE No excuse, ‘’we’’ not ‘’I’’, fun workplace

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SLOGAN ‘ ’Life’s Good’’ represents LG’s determination to provide delightfully smart products that will make your life good.

The LG Electronics Life’s Good consists of the LG logo, seal and the slogan. ‘’Life’s Good’’ set in charlotte sans typeface curved around the LG symbol. The curving of the slogan reinforces LG’s personality and uniqueness. The consistent usage of this signature clearly establishes the company and unifies every division and product from LG Electronics across the globe.

THE SYMBOL

10

Study of Marketing strategy of LG company in India The symbol of LG is the face of future. The letter ‘’L’’ and ‘’G’’ in a circle symbolizes world, future, youth, humanity & technology. LG philosophy is based on humanity. It also represents LG’s efforts to keep close relationship with our customers around the world.

The symbol consists of two elements. 1. The logo in LG Gray 2. The stylized image of human face in the unique LG red color

Red colors represent our friendliness and gives a strong impression of LG’s commitment to deliver the best.

The circle symbolizes the globe. The stylized image of a smiling face in the symbol conveys ‘’Friendliness and Approachability’’. The one eye on the symbol represents ‘’Goal-oriented, Focused & confident’’.

The slogan of LG is ‘’Life’s Good’’. It expresses ‘ ’Brand’s Value, Promises, Benefits, Personality.

THE PARTNERSHIP

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Study of Marketing strategy of LG company in India LG Electronics chooses to promote harmony and build constructively on a labormanagement relationship rather than an employee-employee relationship. This illustrates that management and workers are not in a vertical relationship. but in a horizontal one. This culture is necessary for LG Electronics as it strives to become one of the world’s top companies. Such a relationship is transformed into a value-creation relationship whereby both parties endeavor to address mutual problems and create new value together.

STRATEGIC ALLIANCE LG Electronics is making technical advances and identifying business opportunities through various associative Relationships with some of the world’s leading companies. LG Electronics is striving to become number one in the world by mingling in various business and technological fields and making strategic alliances with world famous companies. ‘’Strategic association between corporation,’’ in which companies with different infrastructures cooperate in the fast developing 21 st century business field, is of key significance in of strengthening the existing industry and creating is new one.

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CHAPTER 5 INTRODUCTION

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INTRODUTION 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, ing for no less than 90% of the market. Then, after the liberalization, foreign players like LG, Sony, Samsung, Whirlpool, Daewoo, and Aiwa came into the picture. Today, these players control the major share of the durables market. Consumers durables market is expected o 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 market With the increase in income levels, easy availability of finance, increase in consumer awareness, and introduction of new models, the demand for consumer durables has increased significantly. Products like washing machines, air conditioners, microwave ovens, color television (CTVs) are no longer considered luxury items. However, there are still very few players in categories like vacuum cleaners, and dishwashers. Consumer durable sector is characterized by the emergence of MNC’s exchange offers, discounts, and intense competition. The market share of MNC’s in consumer durables sector is 65%. MNC’s major target is the growing middle class of India. MNC’s offer superior technology to the consumers Whereas the Indian companies complete on the basis of firm grasp of the local market, their well-acknowledged brands, hold over wide distribution network. However, the penetration level of the consumer durables is still low in India. 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 television, Air Conditioners, Refrigerators, Washing Machines, Microwave Ovens color Monitors and GSM phones. LG has been able to craft out in eight years, a brand positioning in the Indian market and is today the most preferred brand in the segment. 14


CLASIFICATION OF CONSUMER DURABLES SECTOR 1. Consumer electronic include VCD/DVD, home theatre, music player, color television (CTVs), cameras, camcorders, portable audio, HI-FI, etc. 2. White goods include dishwashers, air conditioners, heaters, washing machines, refrigerators, vacuum cleaners, kitchen appliances, non-kitchen appliances, microwaves, built-in appliances, tumble dryer, personal care product etc. 3. Moulded luggage include plastics 4. Clocks and watches 5. Mobile phones

SCOPE 1. In term of purchasing power parity (PPP), India is the 4th largest economy in the world and overtake Japan in the near future become the 3rd largest. 2. Indian consumer durable market is expected to reach $400 billion by on 2010. 3. India has the youngest population amongst the major countries. There are lot of people in the different income categories nearly the two third population is below the age of 35 and nearly 50% is below 25. 4. There are 56 million people in middle class, who are earning US$4,400-US$21800 a year. And there are 6 million rich household in India. 5. The upper-middle and high income household in urban areas are expected to grew to 38.2 million in 2007 as against 14.6 million in 2000.

S.W.O.T ANALYSIS OF THE ORGANIZATION

STRENGTHS  Pricing, No Discount. 15


   

Focus on Technology and Quality. Strong commitment from parent. In house manufacturing capability. Products localized to suite Indian tastes.

WEAKNESS    

Lack of transparency with dealers Focus on niche segments Dominance of s work culture Little presence in A and B class towns

OPPORTUNITY    

Convert image into market share. Wide product portfolio Positive rub-off due to high quality Healthy resources generation

THREATS  Way behind market leader  Stagnant urban demand  Nothing unique about strategy

BRAND IN CONSUMER ELECTRONICS SECTOR MNC’s LG

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SAMSUNG

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HYUNDAI

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KOREA

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Study of Marketing strategy of LG company in India TCL

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HAIER

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PHILIPS

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PANASONIC

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SHARP

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HITACHI

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SANSUI

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AKAI

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AIWA

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CHINA

Holland

JAPAN

TODAY Consumer durables sector is characterized by the emergence of MNC’s, exchange offers, discount, and intense competition. The market share MNC’s in consumer durables sector is 65%. MNC’s major target is the growing middle class of India. MNC’s offer superior technology. LG, SAMSUNG the two Korean companies has been maintaining the lead in the industries with LG being leader in almost all the categories. The company, have a turnover of Rs. 9500

Cr. and market share of 26 percent, is investing

Rs. 360 Cr. on brand-building and other marketing initiatives and around Rs. 140 Cr. on research and development, besides launching new platforms in information technology and related areas. LG Electronics is one of the leading companies in the field of electronics with a global presence in many countries. Before briefing, I have divided the introduction part into three main sub parts. 1. LG Global 17

Study of Marketing strategy of LG company in India 2. LG India 3. LG Pune

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CHAPTER 6 HISTORY OF THE COMPANY

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HISTORY OF THE COMPANY The company was originally established in 1958 as gold star, producing radios, TV’s, refrigerators, washing machines, and air conditioners. The LG Group was a merger of two Korean companies, Lucky and Gold Star, from which the abbreviation of LG was derived. The current ‘’life’s Good’’ slogan is a backronym. Before the corporate name change to LG, household products were sold under the Brand name of lucky, while electronic products were sold under the brand name of Gold Star. The Gold Star is still perceived as a discount brand. In 1995, Gold Star was renamed LG Electronics, and acquired Zenith Electronics of the United States.

GLOBAL OPERATION LG Electronics is playing an active role in the world market with its assertive global business policy. As a result, LG Electronics controls 110 Local subsidiaries in the world with around 82,000 executive and employees.

LG Group 1. 2. 3. 4. 5.

LG Philips LCD LG Chemical LG Powercom LG Twins LG Dacom

BUSINESS AREAS AND MAIN PRODUCTS Mobile Communication a) b) c) d)

CDMA Handsets GSM Handsets 3G Handsets Cellular phones

Digital Appliance 20

Study of Marketing strategy of LG company in India a) b) c) d) e) f) g)

Air Conditioner Refrigerators Microwave Ovens Washing Machines Vacuum Cleaners Home Net Compressors for Air Conditioners and Refrigerators

Digital Display 1) 2) 3) 4) 5) 6) 7) 8)

Plasma TV’s LCD TV’s Micro Display TV’s Monitors PDP Modules OLED s USB Memory Flat Computer Monitors

Digital media 1) home theater system 2) Super Multi DVD Rewriters 3) CD+RW 4) Notebook PC’s 5) Desktop PC’s 6) PDA’s 7) PDA Phones 8) MP3 Players 9) New Karaoke System 10) Car Infotainment

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Study of Marketing strategy of LG company in India LG Electronics will do its best to create new products and services with an open mind, while developing new technologies and business fields through various associations with some of the world’s most successful companies. 1. 3M 2. SUN 3. YAHOO 4. PHILLIPS 5. TOYOTA 6. MICROSOFT 7. HP 8. GOOGLE 9. GE 10. INTEL 11. NORTEL 12. HITACHI 13. PRADA 14. RENESAS 15. TOSHIBA 16. BESTBUY

In Feb. 2007 LG Electronics and YAHOO formed a strategic alliance. Yahoo mobile services will be available. This service is targeting 10 million LG mobile phones in over 70 countries. In Mar. 2007 LG Electronics and Google formed a strategic alliance. Both companies will work together to release, market, and offer LG mobile phones with Google services (search engine, map, email, and blogs.)

LG BRAND IDENTITY The brand of LG is delightfully smart. LG strives to enhance the consumer’s life and lifestyle With intelligent features, institutive functionality and exceptional performance.

THE BRAND PLATFORM The LG brand is composed of four basic elements:1. Value 23

Study of Marketing strategy of LG company in India 2. Promise 3. Benefits 4. Personality

The Brands core Value that never changes. a. b. c. d.

Trust Innovation People ion

The benefits are consistently delivered to the customer includes i. ii. iii. iv.

Reliable products Simple design Ease of use Extraordinary experience

Personality describes the human characteristic that are expressed to the customer through 1. Trustworthy, considerate 2. Practical, Friendly

PRODUCT LEADERSHIP We are focusing on six development areas to become the product leader. 1. 2. 3. 4. 5. 6.

New Machine Reliability Conventional Installation Environment Friendly Product Low Noise & Vibration Energy Saving 24


QUALITY INNOVATION The policy of quality assurance is to provide customers with utmost satisfaction by supplying zero defects. LG proceeds in a hierarchal manner. It is named as “LG WAY’’

VISION “JEONG-DO” Management is LG’s unique application to ethics. LG will succeed through fair management practices and constantly developing our business skill.

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a. b. c. d.

Providing great value to customer through constant innovation & and development Equal opportunities Equal Treatment Honest with our customer.

Management principle - creating value for customer

MISSION The mission of LG is to provide the customers with utmost satisfaction through leadership. The fundamental policy of development is to secure product leadership that the customers may have the utmost satisfaction.

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LG INDIA LG Electronics India Pvt. Ltd., a wholly owned subsidiary of LG Electronics, south Korea was established in January 1997 after clearance from the foreign investment promotion board ( FIPB ). LG set up a site-of-the manufacturing facility at Greater Noida, near Delhi, in 1998, with an investment of Rs. 500 Crs. LG Corporate office is located at Plot No. 51, Udyog Vihar, Kasna Road, Greater Noida, India. This facility manufactured Color Television, Washing Machines, Air Conditioners and Microwave Ovens. ‘’Company is setting up a chain of executive showrooms. LG plans to launch 60 brand shoppers by the end of the first quarter of this year. At present, LG has a total of 83 LG stores across the country, of which 45 are shopper and 38 are exclusive stores. Brand shoppers will be placed in the segment and the target audience will comprise buyers interested in and high end product. LG Brand shop goes beyond the concept of a normal exclusive store by having a more interactive environment and additional lifestyle orientation on display so that the customer can actually experience of LG product in his or her own home settings. LG Electronics India Ltd. (LGEIL), Consumer durables leader with 27% market share, is planning a brand new image. Ta attract inspirational and young consumer across India, company will roll out a new marketing strategy. The exercise will cost the company Rs. 360 Cr. 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 technology product & value for more than 50 Lakh household in India. LGEIL is celebrating the 11th anniversary this year.

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Study of Marketing strategy of LG company in India LG Soft India the innovation wing of LG Electronics in Bangalore is LG Electronics Largest R&D centre outside Korea. We a LGSI focus on niche technology areas such as mobile application development, digital video broadcast and biometrics software and LG Electronics with our expertise. Motivated by a ion for technology. A strong work culture and loyalty to the organization, we are determined to see LG become one of the top three brands globally. Prominent consumer electronic company, LG Electronics Inc. has said that it expect the sale of its products in India this year. The said money will be used to market as well as manufacture new products. LG Electronics, which is originally a South Korean Company with branch in India, informed that its sales of GSM mobile phones, color television, air conditioners and other household goods in the Indian market was to the tune of 95 billion rupees ($2.4 billion) in 2007. As per shin’s estimate, the sales in 2008 would be around 110 billion rupees. In order to achieve its target, shin said LG Electronics will concentrate on catering to the high-end consumer market which will help boost sales this year. India churns out six (6) percent of LG Electronics global revenues of $42 billion, The Indian branch of LG exports to 40 countries.

CHALLENGES IN INDIA The challenges faced awareness by LG when entered in Indian market. 1. 2. 3. 4.

Low brand awareness about LG in India. One of the MNC’s entered in India (Samsung, Panasonic entered in 1995 in India). High import duty. Competition from local market players and other MNC’s in consumer durable

segment. 5. Price sensitiveness of the Indian consumer.

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LGEI over comes these challenges to emerge as Innovative marketing strategy 1. Launch new technologies in consumer electronic and home appliances. 2. LG was the first brand enters in cricket in big way a way, by sponsoring the 1999 world cup followed it up in 2003 as well. 3. LG brought in four captains of the Indian cricket team to endorse its products. LG invested more than US$ 8 million on advertising and marketing in this sport. 4. LG has differentiated its product using technology and health benefits. CTV has ‘’ Golden eye technology’’ Air conditioner has ‘’Health air system’’ and microwave ovens have the ‘’ Health wave system’’.

Local and efficient manufacturing to reduce the cost To overcome high import duties LG manufactures TV refrigerator in India at manufacturing facility at Noida and Pune. LGEI had already commissioned contract manufacturing at Mohali, Kolkata and Bhopal for CTV’s. This has helped LGEI to reduce cost. LGEI implementing the ‘’Digital manufacturing system’’ (DMS) as the cost cutting innovation this system is follow-up to the six sigma exercise LGEI had initiate earlier.

Product Localization 1. 2. 3. 4.

Product localization is the key strategy used by the LG. LG came out with Hindi and regional language menus on its TV’s. Introduced the low-priced ‘’cineplus ‘’ and ‘’sampooma’’ for the rural market. LG was the first brands to introduce gaming in TV’s in continuations of its association with cricket LG introduce cricket game in CTV’s.

MAJOR KEY SUCCESS FACTOR 1. Innovative marketing LG was the first brand to enter cricket in a big way, by sponsoring the 1999 World Cup and followed it up in 2003 as well.

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Study of Marketing strategy of LG company in India Local and efficient manufacturing to reduce cost – To overcome high import duties, LG manufactures PC monitors and refrigerators in India at its maintaining facility at Noida, Delhi. 2. Commissioned contract manufacturing at Mohali, Kolkata, and Bhopal for CTV’s 3. Product localization – product localization is a key strategy used by LG. It came out with Hindi and regional language menus on its TV. 4. Regional distribution model – this has resulted in quicker rotation of stocks and better penetration into the B, C and D class markets. 5. Leveraging India’s IT advantage – LG Electronics has awarded a contract to develop IT solution to LG Soft India (LGSI). The project involves development and for ERP, SCM, CRM and IT-enabled services for LG.

Strategies adopted by the organization LG follows 10 commandments which are as follows 1. Foster working environment-5S environment 2. Fast execution is Key to success. 3. Transparent and fast communication-open communication. 4. Update market – knowledge – Demographics. 5. Win – win relationship with the trade partners. 6. Customer is the king 7. Even Billing – Road to ach supplier A. 8. Be in touch with the market (70% market, 30% Office). 9. Plan and Execute annual marketing calendar-Time to market. 10. Display share of 50%- to get 50% consumer share.

LG PUNE LG Pune is the branch office of LGEIL. It is located in J.M Road. In 2004 LGEIL opened second factory which is located in Ranjangaon. This plant manufactures all product including DVD writers and GSM mobiles. Thus it became first company to manufacture DVD writer in India. The ODP plant aims to reach a manpower base of 1500 people and an investment of Rs. 300 Cr. till 2010. LG India will become the export hub for LG worldwide, catering to the Middle East and African markets. The company aims to touch an export turnover of $3 billion by 2010 from India, Which will contribute to per cent of the Indian arm’s turnover. 30

Study of Marketing strategy of LG company in India Pune India, October 6, 2004 – LGE announced 3 growth strategies aimed at the 1.1 billion people of India making the Indian market the second largest global production base following china. Under this strategy LGE has projected 2007 revenues in India will exceed US$10 billion, 10 times that of 2004. The three strategies for the Indian market that the global electronic giant disclosed. Included: penetrates the South-Western market of India through the new Pune plant near Mumbai, the second largest global GSM handset production line after the Qingdao plant in china; and expand the current 750 R&D staff in India to 1500, by 2007, striving to develop products and export 30% of India-manufactured products to Asia, Middle East and Africa markets by 2007. LG Electronics second new plant in Pune, India covers a total area of 211,200 square meters and is currently equipped with a production line to manufacture 600,000 TV’s and one million refrigerators a year. The company is set to add production lines of air conditioners, Washing Machines, Monitors, and electronic oven, by 2005. The key strategies being implemented include increasing the number of its regional offices from six to eight. LG has split its southern regional office into two, one comprising the states of Tamil Nadu and Kerala and the other consisting of Andhra Pradesh and Karnataka, In addition, it has split one of its northern regional offices by making Uttar Pradesh a separate region after spinning it out from Delhi NCR. The other four regional offices take care of East, Gujarat, and Madhya Pradesh, Maharashtra & Goa and Punjab, Haryana & Rajasthan Respectively. In the coming year, LG is also repositioning its marketing spends, resulting in a significant increase in its mass media expenditure for better brand visibility. LG had a marketing budget of Rs. 320 Cr. in 2007 with a 60:40 split in favor of below-the–line activities. Next year, the company plans to increase the share of mass even as overall marketing spend would by just about 10-15%.

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Study of Marketing strategy of LG company in India LG Pune is the branch office of LGEIL. It is located in J.M Road. The organization structure is-one branch manager, one chief ant, and area sales manager of CE, HA separate for GSM, Marketing manager for CE, HA and separate foe GSM. The branch has warehouse at Wagholi.

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DISTRIBUTION AND MARKETING The company has the number of dealers and warehouses. They have LG exclusive shop. For the marketing of the product a number of activities followed. 1. 2. 3. 4. 5. 6. 7. 8.

Exhibitions are conducted from time to time. Society and college activities are conducted. Hoarding, posters, banners are used so as to grab the attention of the customers. Day to day ment in leading newspaper. Discount at festival time. For dealer relationship they arrange dealer meeting at several time in the year. LG divide dealer in gold silver etc. category to know the performance of the dealers. They have their sales persons at various sub dealer store and at modern trade store for

particularly for the promotion activities. 9. LG also uses the radio FM for the promotion activities. 10. Also provide capon and scratch card for festive season.

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THE LOGISTICS (SUPPLY CHAIN MANAGEMENT) Visit to warehouse of LG Pune at Wagoli

Logistics is the art and science of maintaining and controlling the flow of goods, energy, Information, and other resources like products, services and people from the source of production to the marketplace. It is difficult to accomplish any marketing or manufacturing without logistical . It involves the integration of information, transporting, inventory, warehousing, material handling, and packaging. The operating responsibility of logistics is the geographical repositioning of raw material, work in progress, and finished inventories where required at the lowest cost possible.

Logistics Management is that part of the supply chain. Which chain, which plans, implements and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customer’s requirements.

5R of Logistic followed by LG: 1. 2. 3. 4. 5.

Right Time Right Place Right Condition Right Cost Right Handling

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Study of Marketing strategy of LG company in India LG Pune Distribution LG Pune comes under the western Distribution Region. This region has following 1. 2. 3. 4. 5.

Pune Kolhapur Sholapur Satara Sangali

The LG Factory is located at NOIDA & PUNE. There are three types of warehouse:1. Mother Warehouse 2. Branch Warehouse 3. Spare Warehouse The mother warehouse is that where the products from the factory are kept and from that warehouse, the products are sent to the branch warehouse. A warehouse is a commercial building for storage of goods. Warehouse are used by manufactures, Importer, Exporters, Wholesalers, Transport Business, customs etc. they are usually large plain building in industrial areas of cities towns. They come equipped with loading docks to load and unload trucks; or sometimes are loaded directly from railways, airport, or seaports. They also often have cranes and forklifts for moving goods, which are usually placed on ISO standard pallets loaded into pallet racks.

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Study of Marketing strategy of LG company in India The Pune Warehouse is located near Wagoli. It is 136770 sq. feet in area In warehouse 7 locations is set up for the products. Loc 1, Loc 2, Loc 3, Loc 3, Loc 4, Loc 5 Loc 6, Loc 7 Loc 1 – Selling Loc 2 - Second Sale Loc 3 – Insurance Claim Loc 4 – Destroy The Item Loc 5 – Write Off Material Loc 6 – Court Case Material Loc 7 – For Repair

5’S Of Warehouse, Which the LG strictly follow. 1. 2. 3. 4. 5.

Sweeping Sorting Systematic Arrangement Simplification Self-Discipline

In warehouse, the products are pin up with 3-color paper to get the knowledge about the delivery. 1. Red Card – To stop the product going to market. 2. Green Card – To allow the product for delivery in market. 3. Yellow Card – After the product labeled with green, allow this to move in market.

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Distribution Time   Local Delivery - 4 hrs.   Delivery - 12 hrs.   Within 200 km. – 24 hrs.   Beyond 200 km – 48 hrs. The above distribution time is the time of delivery of product from warehouse to the market place, which the logistic department follows to fulfill the demand in the market at the right. In LG, we have the following process, which is followed process, which is followed in logistic through ERP.

   

Order processing Invoicing Indenting Report

Order processing - Booking for dealers/distributor Invoicing

- After billing process

Indenting

- Requirement

Report

- Distributed to all.

In warehouse, there are two mode of dispersion of product from one place to another within. A) Hydraulic B) Manual In addition, there are 35 extinguishers to prevent the accidental hazard within the warehouse due to fire. These fire extinguishers are valid up to year 2011. One has to follow the rule of ‘’NO Smoking’’ within the warehouse.

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DELIMMA 1. In transit material damage checking. 2. Cost target achievement. 3. Natural events tracking.

Equipments

1. 2. 3. 4.

100% bar code scanner. ERP – Invoice Generation Process. Hydraulic Trolleys for material movement. Pallets for safety of material.

WAREHOUSE WITH THE EQUIPMENT

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WAREHOSE: REFRIGERATOR AND CTV SECTION

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CUSTOMER SERVICE The best and the biggest international brands are here in India – but the irony if it all: where is the after-sales-service? So integral to a brand, so critical for its success and so taken for granted in developed markets! In India, after sales service is, for want of a better description, the pits. So what’s stopping the best companies from pulling out all the stops when it comes to providing the best service? Do customer expect for too much? Or is it that in India they don’t really care. Brand Equity fanned out to MNC as well as Indian consumer durable companies, stockiest and dealers, analysts and market researchers to get a feel of what’s really keeping after sales from being used as a cutting edge marketing tool in pushing products across categories. Customer following the purchase of a product or service. In some cases, aftersales service can be almost as important as the initial purchase. The manufacturer, retailer, or service provider determine what is included in any warranty traditionally one year from the date of purchase, but increasingly two or more year’s maintenance and replacement policy, items included, labor costs, and speed of response. In the case of a service provider, aftersales service might include additional training or helpdesk availability. Of equal importance is the customer is the customer’s perception of the degree of willingness with which a supplier deals with a question or complaint, speed of response, and action taken.

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Study of Marketing strategy of LG company in India In the initial phase the company has entered into agreements with ITI’s in states like Maharashtra, Gujarat, Delhi, Punjab, Assam, and Karnataka and is in the last leg of g with Uttar Pradesh.

1. LG Electronics, with 1200 service centers, has already recruited 300 student and plans to beef group the number to 10,000 by the year-end. 2. ‘’ the company has offered a scholarship to the selected for the last six months of their 3.

training Programmer. The will invest Rs. 8 Cr. (Rs 80 million) in employee development Programmers this

year. 4. The company moved away from the discounting strategy since last year and is putting thrust on the quality and service in its brand communication to position LG as a consumer electronics brand. 5. At the top, the service division in Korea reports to the Global CMO. This shows commitment that service must be made into a marketing differentiator, and leveraged thus. 6. LG has the widest service network across the country; some estimates put it at a significant multiple of service-infrastructure from our nearest competitor.

CONSUMER SURVEY DURING EXHIBITION 41

Study of Marketing strategy of LG company in India From 16th to 25th may a consumer exhibition was organized at the college of Engineering ground. The exhibition was sponsored by sakal group in which number of companies participated.

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ADVERTISING Advertising plays an instrumental role in establishing a brand and its success. But in today’s environment, advertising should be molded looking at various other parameters such as the growth or the performance of the concerned industry, the respective company’s performance and the brand pull. For an example, in the earlier stages of establishing itself in the market, a company should follows the strategy of imagery advertising, but after creating a strong foothold in the consumer’s household, the brand should change its strategy for its marketing communication to product centric communication and more interactive communication on the ground level. Taking another example of LG Microwave ovens, they have always spoken about health wave and the initiatives taken by them for the cookery classes. But in today’s changed environment, since the price points give us an opportunity to reach out to a greater audience, they have changed the communication to? Garam Garam Khaana? Thereby addressing the mass media. In our first year of operations (97-98) the communication was focused on imagery advertising and we leveraged its association with world cup cricket to get closer to the end consumers. During 99-00, the marketing communication was focused on creating a superior image in technology, thereby taking about ‘’digital LG’’ and ‘’cyber LG’’ with the advent of internet enabled products. Now, we are taking the brand closer to the consumer by taking an emotional route in our advertising and marketing communication. We took the health platform and communication the ‘’Health Benefits’’ their media strategy revolves around using different media vehicles depending on the product category must target segment for that particular product. For instance in case of CTV’s. We focused on the channels providing high reach opportunities. Similarly for Air Conditioners, they focused on movie channels and niche magazine for their media vehicles. The objective was to retain the image of this product category. For Refrigerators, they focused on the family oriented channels as a strategic move to target the right segment. On the whole, LG tried to spread its investments across all channels.

43

Study of Marketing strategy of LG company in India Today, the brand LG has already established itself in the market. The unaided brand recall for our brand has been as high as 61%. Therefore, we now want to penetrate further and want to given an opportunity to a greater number of consumers to experience our products. DD suited LG’s objective by giving us a greater reach into the consumer households that MAX couldn’t have offered us. Given our high brand recall, we now are using DD penetrate into new sets of consumers.

LG was one of the few companies that recognized the emerging trend in consumer needs towards health consciousness. Our advertising strategy has been to communicate what our products actually deliver – health, convenience, advanced features, and technological superiority. LG communication, till date, was centered at the theme of ‘’protective health’’. It was driven by LG’s concern for the consumer’s health, and having technology that work towards protecting them this platform gave LG the ability to cater to the benefits that consumers were looking for and was focused on ‘product and technology. LG brand communication speaks the language of ‘active health’ which is all about a ‘vibrant and colorful life. The active technology allows consumers to go ahead and explore the myriad vignettes of their lives and free them from all worries and cares. It allows them to live their dreams in full color and enjoy like to the fullest. This is a positive step for the brand in connecting with consumers at a personal level, thereby building bonds that further cement the LG brand in the consumer’s life. During the seven years of existence in the country, LG has managed to capture a brand positing in the market through its integrity, dynamism and innovation making it a symbol of trust and quality.  LG WAS VERY ACTIVE IN ITS ADVERTISING CAMPAIGNS BUT LATELY THERE HAS BEEN AN IN LULL PROMOTIONS. LG is not so available in ments but they are very much visible in other areas. They believe that marketing is beyond advertising and is beyond a 30-second. There are some companies which have a visibility issue, awareness issue, top-of-mind recall issue but when 44

Study of Marketing strategy of LG company in India you reach a certain position, then your first priority is not visibility or awareness any more. They don’t need to run an advertising campaign saying that this is LG. people know LG the brand. We have already spent a lot highest level. So it is a conscious decision to move away from the 30-second space. They believe that there should be a 360-degree paradigm.

LG ELECTRONICS LAUCH MARKETING CAMPAIGNS FEATURING ABHISHEK BACHCHAN Bollywood icon Abhishek Bachchan to be the face of home appliance at LG Abhishek Bachchan is more than just an icon; while his image is sophisticated and upscale he also projects the aura of an out of box thinker and a caring human being. All these images are perfectly matched with LG in the sense that cares about customers and continues to develop new generation technology. He further added? Another important reason for our choice was the fact that Abhishek’s appeal transcends across all sections and demographics of the society, a vital element for a consumer durable company. LG has signed the contract with Abhishek for a period of two years, during which the star will endorse the entire range of home appliance of the company. LG plans to utilize this utilize this association for various communication channels such as print and television ads, outdoor publicity, road shows and strategic events amongst others? Commenting on his association with LG Electronics as their new brand ambassador, Mr. Abhishek bachchan said, LG Electronics as a brand is synonymous with quality and commitment consumers the world over.

45


CHAPTER 7 RESEARCH METHODOLOGY

46


RESEARCH METHOLOGY Research Methodology is considered as the nerve of the project. Without a proper well organized research plan, it is impossible to complete the project and reach to any conclusion. The project was based on the survey plan. The main objective of survey was to collect appropriate data, which work as a base for drawing conclusion and getting result. Therefore, research methodology is the way to systematically solve the research problem. Research methodology not only talks of the methods but also logic behind the methods used in the preference of the other methods. Research Methodology is considered as the nerve of the project. Without a proper well organized research plan, it is impossible to complete the project and reach to any conclusion. The project was based on the survey plan. The main objective of survey was to collect appropriate data, which work as a base for drawing conclusion and getting result. Therefore, research methodology is the way to systematically solve the research problem. Research methodology not only talks of the methods but also logic behind the methods used in the preference of the other methods. Research Design

47

Study of Marketing strategy of LG company in India Research design is the important primary because of the increased complexity in the market as well as marketing approaches available to the researchers. In fact, it is the key to the evolution of successful marketing strategies and programmers. It is an important tool study buyer’s behavior, consumption pattern, brand loyalty, and focus market changes. A research design specifies the method and procedures for conducting a particular study. According to Kerlinger, Research Design is a plan, conceptual structure, and strategy of investigation conceived as to obtain answers to research questions and to control variance. TYPES OF

RESEARCH



Descriptive Research

The type of research adopted for study is descriptive. Descriptive studies are undertaken in many circumstances when the researches is interested to know the characteristic of certain group such as age, sex, education level, occupation or income. A descriptive study may be necessary in cases when a researcher is interested in knowledge the proportion of people in a given population who have in particular manner, making projection of a certain thing, or determining the relationship between two or more variables. The objective of such study is to answer the ‘’who, what, when, where, and how’’ of the subject under investigation. There is a general feeling that descriptive studies are factual and very simple. This is not necessarily true. Descriptive study can be complex, demanding a high degree of scientific skill on part of the researcher. Descriptive studies are well structured. An exploratory study needs to be Flexible in its approach, but a descriptive study in contrast tends to be rigid and its cannot be changed every now and then. It is therefore necessary, the researcher give sufficient thought to framing research.

48


OBJECTIVE OF THE STUDY The objective was to find out the market share of LG products, advantages, and disadvantages of LG products from dealers and to find out what problems they are facing with the LG products so that problems can be resolved to increase the sale.

PICTURE SHOWING THE PRODUCT OF LG IN ONE OF THE SHOP

49


DATA COLLECTION METHODS

After the research problems, We have to identify and select which type of data is to research. At this stage: we have to organize a field survey to collect the data. One of the important tools for conducting market research is the availability of necessary and useful data.

Primary Data: for primary data collection, we have to plan the following four important aspects.

 Sampling  Research Instrument

Secondary Data: The Company’s profile, journals and various literature studies are important sources of secondary data.

 Data analysis and interpretation 1. Questionnaires 2. Pie chart and bar chart

50


QUESTIONNAIRES This is the most popular tool for the data collection. A questionnaire question that the researcher wishes to ask his respondents which is always guided by the objective of the survey. Pie chart: This is very useful diagram to represent data, which are divided into a number of categories. This diagram consists of a circle of divided into a number of sectors, which are proportional to the values they represent. The total value is represented by the full create. The diagram bar chart can make comparison among the various components or between a part and a whole of data. Bar chart: This is another way of representing data graphically. As the name implies, it consist of a number of whispered bar, which originate from a common base line and are equal widths. The lengths of the bards are proportional to the value key represent. Preparation of report: The report was based on the analysis and represented with the findings and suggestions. The sample of the questionnaires is achieved with the report itself.

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SAMPLING METHODOLOGY

Details of the sampling methodology, I have made questionnaire. The one is made for the customer.

No. of question in questionnaires for customer:

07

No. of question related to LG project

03

No. of people met during the research

200

No. of respondents during the research

50

Sample unit Professional, business man, Employees, house wife, Working women, students.

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CHAPTER 8 DATA ANALYSIS

53


DATA ANALYSIS Q.1 Have you purchased any consumer durable during Exhibition.  Yes  No

35% 65%

Yes No

1. 65% of Customer Have not purchased any consumer durables from Exhibitions 2. Only 35% people have purchased 3. Consumer also wants to compare to the different brand which are available in the exhibition. 4. Exhibitions are more useful increase brand awareness 5. People are less interested to purchase product from exhibitions.

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Study of Marketing strategy of LG company in India Q.2 While purchasing consumer durable which parameter influences you?     

Brand Product feature Brand Service Durability

9%

30%

16% Price

Product feature 26%

Brand

19%

Service

Durablity

1. 30% of consumers give importance to price. so it shows that Indian consumers are very price sensitive. They give more importance to price over the brand. 2. 26% give importance to brand. So price and brand matter a lots for the consumers.

Q.3 From where you prefer buying consumer durables.

55

Study of Marketing strategy of LG company in India  Exhibitions  Co. shoppee  showroom

17% 47%

Exhibitions 36%

Co. shoppee Showroom

1. A majority of consumer prefer to buy from showrooms. Very less proposition of customer. 2. 47% customers prefer showrooms, because showrooms are more convenient. 3. People are less interested to buy from the exhibition they only visit the exhibition for price quotation of the product and the comparison.

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

56

Study of Marketing strategy of LG company in India    

Attractive price Service Demonstrations Offers

14%

14%

22% Offers

Attractive price

Service

23% convenience

22

Demonstration

14

27%

1. Customers buy from showroom because of the service and convenience. This are two main factors. 2. Customer are preferred to buy from the showroom because of they think that these convenient store may provide good after sell service. 3. Price also a factor that attract the customer in these showrooms.

57

Study of Marketing strategy of LG company in India Q.5. Which consumer durable you have and of which brand?       

CTV LCD PLASMA REF WM MW AC

18 16 14 12

CTV

10

LCD PLASMA

8

REF

6

MW

4

WM

2

AC

0

1. In CTV section maximum have Onida, in LCD Sony is the leader, In plasma BPL is the leader, MW LG is the leader, In WM there are companies and in AC also.

Q.6. How frequently you change your consumer durables? 58

Study of Marketing strategy of LG company in India    

1-3 years 3-5 years 5-10 years More than 10 years

23%

4%

19%

1-3 years 3-5 years

54%

5-10 years more than 10 years

1. Customer prefers to change consumer durable within 5-10 years. In India people do not change consumer durable frequently. 2. 23% customers do not change their consumer durable within 10 year.

59

Study of Marketing strategy of LG company in India Q.7. Do you prefer any financing scheme to purchase consumer durables?  Yes  No

43% 57%

Yes No

1. Majority of consumer do not prefer any financial scheme.

60


CHAPTER 9 FINDINGS

61


DEALER SURVEY FINDINGS 1. By calculating the display share we found that in most of store LG has 50% display share almost all categories. 2. By the actual monthly sale of particular store we came to know the capacity of the store and how much product can they sale. 3. It helps us to know that weather dealer is capable of being a direct dealer of LG or not and it also helps to find out the new dealer who are capable of being the dealer of LG. 4. We also came to know while visiting the shops that there was big problem of after sale service. 5. Many dealers were facing the problem of after sale service because there is no follow up calls from LG. 6. Demo calls also not done properly. 7. The top competitor of LG product in pune is SAMSUNG. 8. In pune area the performance of LG is in better position but the competitor also hold closer margin. 9. There is high growth of sale in market due to booming in new technology and better service. 10. Word of mouth plays a vital role in awareness among customer. This is one factor. Which can play a good role in promotion of products as well as demonstration given by the shopkeeper also plays a vital role for customer.

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FINDINGS 1. Secondary s play an important role in the customer mind and create awareness among the customers. The secondary includes Demonstration, Exhibition & even sponsors. 2. From the survey it was found out that the majority of customers don’t buy consumer durables from exhibitions. They just visit the exhibitions to see co. latest model. 3. They want to buy from the showrooms. For them service is important. Beside convenience and other factors service is key factor. 4. Also majority of customers do not want any financing scheme for purchasing the durables. 5. There was heavy rush on weekends so large numbers of ISD’s were appointed that day. Also the live demo calls helps in selling. Exchange offers also generate sale. 6. Customers are also now very choosy in buying the product and it is important for the company to make loyal consumer of their brand. 7. In survey we found that LG has captured maximum market share in every category. LG dominates CTV, LCD. And refrigerator, and washing machine, category. 8. LG and Samsung have bottle neck competition in TV and REF. category. 9. The product is well aware and it is on top of mind of customer. 10. Customers are also now very choosy in buying the product and it is important for the company to make loyal consumer of their brand.

63


CHAPTER 10 CONCLUSIONS

64


CONCLUSIONS 1. Exhibitions do not help to generate so much sells but they should be conducted regularly. This helps in generating awareness regarding the product in customers which ultimately helps in sales. 2. Also it is helps in advertising for the new products. Like in this exhibition new LCD SCARLET was d. Company should always focus on service. 3. Display share should be increased where there is less than 50% as LG also believe that ‘’ JO DIKHTA HAI WO BIKTA HAI’’. 4. Company should try to improve service, No doubt the company products have technically edge over competitors but in long run it may hamper the company’s profit. 5. Company should concentrate more on its major drivers LCD, IT, and GSM. Branding and promotions should be done effectively as it creates a long lasting image in the mind of customers. 6. Company should also cater to the needs of sub dealers as some of the sub dealers have potential of high sales.

65


CHAPTER 11 LIMITIONS

66


LIMITATION Every study has certain limitations. In my study, also there were certain limitations, which I could not able to solve. 1. The research was conducted in a very small area. 2. My research work period witness the biggest ups and downs in product sale of different brands, which affected the perception of the customer. This was biggest drawback of my study. 3. Time factor was also important for me. I had only 60 days to complete my research; full-fledged report was insufficient for me. 4. The consumer filled the questionnaire mostly in careless manner, so it was difficult to make them hold for time. 5. I had only found the upper-middle class family was required for the study. 6. The sample size is also very small which represent my research on consumer behavior.

67


CHAPTER 12 BIBLOGRAPHY

68


BIBLOGRAPHY

Sites    

Www. LGindia.com Www. Google.com Www. Wikipedia.com Www.LG.co.in

Books      

Business today LG magazine Economic times News paper Times of India. Marketing Management – Philip Kotler Electronics For You - Magazine

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CHAPTER 13 QUESTIONNAIRE

70


Consumer Survey Questionnaire

Q.1 Have you purchased any consumer durable during exhibitions? a) Yes b) No Q.2. While purchasing consumer durable which parameter influences you? a) Price b) Product feature c) Brand d) Service e) Durability Q.3. From where you prefer buying consumer durables? a) Exhibitions b) Co.shoppee c) Showroom Q.4 You prefer to buy from the same as you have mentioned in Q.3 because of following reasons a) Attractive Price b) Service c) Demonstrations d) Offers e) convenience

71

Study of Marketing strategy of LG company in India Q.5 which consumer durable you have and of which brand?

a) b) c) d) e) f) g)

CTV LCD PLASMA REF WM MW AC

Q.6 How frequently you change your consumer durables? a) b) c) d)

1-3 years 3-5 years 5-10 years More than 10 years

Q.7 Do you prefer any financing scheme to purchase consumer durables? a) Yes b) No

72

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