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APROJECT REPORT

ONMARKET ANALYSIS OF LG CONSUMER DURABLES &

DEALER DEVELOPMENT


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INTRODUCTION

Before the liberalization of the Indian economy, only a few companies like Kelvinator, Godrej,Alwyn, and Voltas were the major players in the consumer durables market, accounting for noless 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 themajor share of the consumer durables market. Consumer durables market is expected to grow at10-15% in 2007-2008. It is growing very fast because of rise in living standards, easy access toconsumer finance, and wide range of choice, as many foreign players are entering in the marketWith the increase in income levels, easy availability of finance, increase in consumer awareness,and introduction of new models, the demand for consumer durables has increased significantly.Products like washing machines, air conditioners, microwave ovens, color televisions (CTVs) areno longer considered luxury items. However, there are still very few players in categories likevacuum cleaners, and dishwashers Consumer durables sector is characterized by the emergenceof MNCs, exchange offers, discounts, and intense competition. The market share of MNCs inconsumer durables sector is 65%. MNC's major target is the growing middle class of India.

MNCs offer superior technology to the Consumers whereas the Indian companies compete onthe basis of firm grasp of the local market, their well-acknowledged brands, and hold over widedistribution network. However, the penetration level of the consumer durables is still low inIndia.

Classification of consumer durables sector

1. Consumer electronic include vcd/dvd, home theatre, musicplayer, color television (CTVs), cameras, camcorders, portableaudio, Hi-Fi, etc

2. White goods include dishwashers, air conditioners, heaters,washing machines, refrigerators, vacuum cleaners, kitchenappliances, non-kitchen appliances, microwaves, built-inappliances, Tumble dryer, personal care product etc.

3. Moulded luggage include plastics4. Clocks and watches5. Mobile phones


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Scope

1. In term of purchasing power parity (PPP), India is the 4thlargest economy in the world and overtake Japan in the near

future become the 3rd largest.2. Indian consumer durable market is expected to reach $400billion by on 2010

3. India has the youngest population amongst the majorcountries. There are lot of people in the different incomecategories nearly the two third population is below the age of35 and nearly 50% is below 25.

4. There are 56 million people in middle class, who are earningus$4,400-US$21,800 a year. And there are 6 million richhousehold 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 14.6million in 2000.

Opportunity

1. In India the penetration level of white goods is lower ascompared to other developing countries.

2. Unexploited rural market.3. Rapid urbanization.4. Increase in income level, i.e. increase in purchasing power of

consumers.5. Easy availability of finance.

Threats

1. Higher import duties on row materials.2. Cheap imports from Singapore, China and from other Asian countries.


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Brands in consumer electronics sector

MNCs NATIONAL REGIONAL

LG ) ONIDA BUSHSAMSUNG ) KOREA VIDEOCON CROWNHYUNDAI ) BPL SALORA

TCL ) CHINA GODREJ T-SERIESHAIER ) VOLTAS WESTON

IFB BELTAK

PHILIPS ) HOLLAND OSKAR

PANASONIC )SHARP )HITACHI )SANSUI ) JAPANAKAI )AIWA

WHIRLPOOL )ELECTROLUX

TODAY Consumer durables sector is characterized by the emergence of MNCs, exchangeoffers, discounts, and intense competition. The market share of MNCs in consumer durablessector is 65%. MNC's major target is the growing middle class of India. MNCs offer superiortechnology to the LG, SAMSUNG the two Korean companies has been maintaining the lead inthe industries with LG being leader in almost all the categories.The company, having a turnover of Rs 9,500 crore and market share of 26 per cent, is investingRs 360 crore on brand-building and other marketing initiatives and around Rs 140 crore onresearch and development, besides launching new platforms in information technology andrelated areas.

LG Electronics is one of the leading companies in the field ofelectronics with a global presence in many countries.Before briefing, we have divided theintroduction part into three main sub parts.

1. LG Global2. LG India


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3. LG

History of company:

The company was originally established in 1958 as Gold Star, producing radios, TVs,

refrigerators, washing machines, and air conditioners.


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1958-1969-GoldStar The Electronics Industry Dream

1970-79 GoldStar symbol of The Technolgoy


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1980-88 :- INTERNATIONALIZATION

1989-94 INOVATION

1995-98 GLOBAL LEADERS LG ELECTRONICS


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1999-2003-DIGITAL MANAGEMENT

2004-2006 GREAT PEOPLE GREAT DESIGN


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2007-THE PEOPLE COMPANY

The LG Group was a merger of two Korean companies, Lucky and Gold Star, from which theabbreviation ofLG was derived. The current "Life's good" slogan is a backronym. Before thecorporateName change to LG, household products were sold under the Brand name ofLucky,while electronic products were sold under the brand name ofGold Star. The Gold Star brand isstill perceived as a discount brand.In 1995, Gold Star was renamed LG Electronics, and acquired Zenith Electronics of the UnitedStates.

Global Operation:

LG Electronics is playing an active role in the world market with its assertive global businesspolicy. As a result, LG Electronics controls 110 local subsidiaries in the world with around82,000 executive and employees.

LG Group


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1. LG.Philips LCD2. LG Chemical3. LG Telecom4. LG Powercom5. LG Twins

6. LG DacomBusiness areas and main productsMobile communications(a) CDMA Handsets,(b)GSM Handsets,(c) 3G Handsets,(d) Cellular PhonesDigital appliancea) Air Conditioners,b) Refrigerators,c) Microwave Ovens,

d) Washing Machines,e) Vacuum Cleaners,f) Home Net,g) Compressors for Air Conditioners and RefrigeratorsDigital displaya) Plasma TVs,b) LCD TVs,c) Micro Display Panel TVs,d) Monitors,e) PDP Modules,f) OLED Panels,g) USB Memory,h) Flat Panel Computer MonitorsDigital mediaa) Home Theater Systems,b) DVD Recorders,c) Super Multi DVD Rewriters,d) CDRW,e) Notebook PCs,f) Desktop PCs,g) PDAs,h) PDA Phones,i) MP3 Players,j) New Karaoke Systems,k) Car Infotainment

VISION

Global Top 3 by 2010


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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

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 signature consists of the LG logo,seal, and the slogan, "Life's Good" set in Charlotte sans typefacecurved around the LG symbol. The curving of the slogan reinforces LG's personality anduniqueness. The consistent usage of this signature clearly establishes the unique identity of thecompany and unifies every division and product from LG Electronics across the globe.


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THE SYMBOL

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 representsLGs efforts to keep close relationship with our customers around the world.

The symbol consists of two elements.

1. The logo in LG gray2. The stylized image of human face in the unique LG red color.

Red color represents our friendliness and gives a strong impression of LGs commitment todeliver the best.

The circle symbolizes The Globe. The stylized image of a smiling face in the symbol conveysFriendliness and Approachability.

The one eye on the symbol represents Goal-oriented, Focused & Confident.

The slogan of LG is Lifes Good. It expresses Brands Value , Promises, Benefits ,Personality .

THE PARTNERSHIP


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LG Electronics chooses to promote harmony and build constructively on a labor-managementrelationship rather than an employee-employer relationship. This illustrates that management andworkers 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 topcompanies. Such a relationship is transformed into a value-creation relationship whereby bothparties endeavor to address mutual problems andcreate new values 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 bymingling in various business and technological fields and making strategic alliances with worldfamous companies. "Strategic association between corporations," in which companies withdifferent infrastructures cooperate in the fast-developing 21st century business field, is of keysignificance in terms of strengthening the existing industry and creating a new one.

LG Electronics will do its best to create new products and services with an open mind, whiledeveloping new technologies and business fields through various associations with some of theworld's most successful companies.

1. 3M2. SUN3. YAHOO4. PHILLIPS5. TOYOTA6. MICROSOFT7. HP8. GOOGLE9. GE10.INTEL11.NORTEL12.HITACHI13.PRADA14.RENESAS


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15.TOSHIBA16.BESTBUY

And the number follows many more..In Feb. 2007 LG Electronics and Yahoo formed a strategic alliance. Yahoo mobile services willbe available from LG mobile. This service is targeting 10 million LG mobile phones in over 70countries.

In Mar. 2007 LG Electronics and Google formed a strategic alliance. Both companies will worktogether 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 customers life and lifestylewith intelligent features, institutive functionality and exceptional performance.

The brand platform:-

The LG brand is composed of four basic elements

1. Value2. Promise3. Benefits4. Personality

The Brands core Value that never changes.

a. Trust,

b. Innovation,

c. People

d. Passion


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The benefits that are consistently delivered to the customer includes

a) Reliable products

b) Simple design

c) Ease of use

d) Extraordinary Experience

Personality describes the human characteristic that are expressed to the customer through

Trustworthy, ConsideratePractical, Friendly

The Internal Culture of LG:

LG practices four cultures

1. Learning Culture

2. Boundary less Environment

3. A Carrier

4. Growth

According to LG, the Learning Culture continuously helps the employee to learn more and moreto develop the habit of continuous learning.

Boundary less Environment means that there is no difference between the levels of employees.There is transparency between the work and mutual understanding between all the employees.

A carrier is highly growing in LG and one who is the employee can develop their carrier largely.A new comer will feel fully comfortable in the company and for a new comer the company isvery helpful in the overall growth of personality.

Growth in LG is very high for those who are in the company and for those who want to join inLG. The company is growing with fast innovation and the BLUE Ocean strategy is one of theexamples of growth.


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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 havethe utmost satisfaction.

Product Leadership

We are focusing on six development areas to become the product leader.

1. New Machine

2. Reliability

3. Conventional Installation

4. Environment Friendly Product

5. Low Noise & Vibration

6. Energy Saving

Quality Innovation

The policy of quality assurance is to provide customers with utmost satisfaction by supplyingzero defects.


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LG proceeds in a hierarchal manner. It is named as LG WAY.

From top to bottom:

No.1 LG is the VISION

Jeong-DO Managementis LGs unique application to ethics. LG will succeed through fairmanagement practices and constantly developing our business skill.

A) Honest with our customer

b) Providing great values to customer through constant

innovation & and development.

c) Equal opportunities

d) Equal Treatment

Management Principle - Creating value for customer


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Code of conduct of LG

1. Responsibility and obligations to customers :

Respect for Customers

Creating Value Providing Value

2. Fair competition

Pursuit of Free Competition Compliance with Laws and Regulations

3. Fair Transaction :

Equal Opportunity Fair Transaction Procedure Support and Aid for Business Partners

4. Basic Ethics for Employees

Basic Ethics Completion of Duty Self Development Fairness in Performance Avoidance of conflict with company interest


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5. Corporate Responsibilities to employees

Respect for human dignity Fair Treatment Promoting Creativity

6. Responsibilities to society and country

Rational Business Development Protection of stock holder interest Contribution to social development Environmental Conservation

LG INDIA

LG Electronics India Pvt. Ltd., a wholly owned subsidiary of LG Electronics, South Korea wasestablished in January 1997 after clearance from the Foreign Investment Promotion Board(FIPB). LG set up a state-of-the art manufacturing facility at Greater Noida, near Delhi, in1998, with an investment of Rs 500 Crores.


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LG corporate office is located at Plot no.51, Udyog Vihar, Kasna Road, Greater Noida, India.This facility manufactured Color Televisions, Washing Machines, Air-Conditioners andMicrowave Ovens.

''Company is setting up a chain of exclusive premium showrooms. LG plans to launch 60

premium Brand Shoppes by the end of the first quarter of this year. At present, LG has a total of83 LG stores across the country, of which 45 are shops and 38 are exclusive stores. Brand shopswill be placed in the premium segment and the target audience will comprise buyers interested inpremium and high end products.

LG Brand Shoppe goes beyond the concept of a normal exclusive store by having a moreinteractive environment and additional lifestyle orientation on display so that the customer canactually experience the LG products in his or her own home settings.

LG Electronics India Ltd (LGEIL), consumer durables leader with 27% market share, is planninga brand new image. To attract inspirational and young consumers across India, company will roll

out a new marketing strategy. The exercise will cost the company Rs 360 crore.

LG Electronics India is the fastest growing company in the consumer electronics, homeappliances, and computer peripherals industry today. LG Electronics is continually providing,superior technology products & value for money to more than 50 lakh households in India.LGEIL is celebrating the 11th anniversary this year.

LG Soft India the innovation wing of LG Electronics in Bangalore is LG Electronics' largestR&D centre outside Korea. We at LGSI focus on niche technology areas such as mobileapplication development, digital video broadcast and biometrics software and support LGElectronics with our expertise. Motivated by a passion for technology, a strong work culture andloyalty to the organization, we are determined to see LG become one of the top three brandsglobally.

Prominent consumer electronic company, LG Electronics Inc. has said that it expects the sale ofits products in India to up by 15 per cent in 2008. Moon Bum Shin, managing director of LGElectronics India has said that the company has earmarked 4.8 billion rupees for investmentpurpose in India this year. The said money will be used to market as well as manufacture newproducts.

LG Electronics, which is originally a South Korean Company with branch in India, informed thatits sales of GSM mobile phones, color televisions, air conditioners and other household goods inthe Indian market was to the tune of 95 billion rupees ($2.4 billion) in 2007. As per Shin'sestimate, 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 whichwill help boost sales this year. India churns out six (6) per cent of LG Electronics globalrevenues of $42 billion. The Indian branch of LG exports to 40 countries.

India challenges

The challenges faced by LG when entered in Indian market


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1. Low brand awareness about LG in India.

2. One of the last MNCs entered in India (Samsung, Panasonic

entered in 1995 in India).

3. High import duty

4. Compitition from local market players and other MNCs in

consumer durable segment.

5. Price sensitiveness of the Indian consumer

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 to enter 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 then 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 airsystem and microwave ovens

have the Health wave system.

Local and efficient manufacturing to reduce the cost


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To overcome high import duties LG manufactures TV refrigerator in India at manufacturingfacility at Noida and . LGEI had already commissioned contract manufacturing at MohaliKolkata and Bhopal for CTVs. This has helped LGEI to reduce cost. LGEI implementing theDigital manufacturing system (DMS) as the cost cutting innovation this system is follow-up to

the six sigma exercise LGEI had initiate earlier.

R&D potential

LG has the research and development facilities in Bangalore and . Both the unit carry out R&Ddepartment for the domestic as well as the parent company it also dose customize R&D for thespecific countries to which it export product.

Regional channel and wide distribution network

1. LG has adopted the regional distribution channel in India.

All the distributers work directly with the company. This

has resulted in quicker rotation of the stock and better

penetration into B, C, D, class market.

2. LG also follows the stock rotation policy rather then

dumping stock on channel partners.

Product localization:-

1. Product localization is the key strategy used by the LG2. LG came out with Hindi and regional language menus on its TVs.3. Introduced the low-priced Cineplus and Sampooma for the rural market.4. LG was the first brand to introduce gaming in TVs in continuations of its association withcricket LG introduce cricket game in CTVs

MAJOR KEY SUCCESS FACTORS:

1. Innovative marketing - LG was the first brand to enter cricketin a big way, by sponsoring the 1999 World Cup and followedit up in 2003 as well.

2. Local and efficient manufacturing to reduce cost - To overcomehigh import duties, LG manufactures PC monitors and


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refrigerators in India at its manufacturing facility at Noida,Delhi.

3. Commissioned contract manufacturing at Mohali, Kolkata andBhopal for CTVs.

4. Product localization - Product localization is a key strategy

used by LG. It came out with Hindi and regional languagemenus on its TV.5. Regional distribution model - This has resulted in quicker

rotation of stocks and better penetration into the B, C and Dclass markets.

6. Leveraging Indias IT advantage - LG Electronics has awardeda contract to develop IT solutions to LG Soft India (LGSI). Theproject involves development and support for ERP, SCM, CRMand IT-enabled services for LG.

Strategies adopted by the organization:

LG follows 10 commandments which are as follows.1. Foster working environment-5S Environment2. Fast execution is key to success3. Transparent and fast communication-open communication4. Update market -knowledge Demographics5. Win Win relationship with the trade partners6. Customer is the king7. Even Billing Road to ach supplier A8. Be in touch with the market (70% Market, 30% Office).9. Plan and Execute annual marketing Calendar-Time to market10.Display share of 50% -to get 50% consumer share.

LG market share of consumer appliances and consumer electronic:-

LG position of CTV in various states in IndiaLG position of REF in various states in IndiaLG position of WM in various states in IndiaLG position of AC in various States in IndiaLG position of Audio & Home Theater in various in IndiaLG position of DVD in various in IndiaLG position of MWO in various states in India


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This analysis is based on the ORG survey conducted by LG which represent the LG position ofdifferent consumer durables in various states in India. We selected different brand in differentcategory as per the market share and the demand of product in market. This analysis representsthe LG market position during the period of March 2008. It shows that LG has capturedmaximum market share almost in every category. LG and Samsung have the maximum market in

consumer durable market but LG dominate the almost all the category in consumer durable.Prominent consumer electronic company, LG Electronics Inc. has said that it expects the sale ofits products in India to up by 15 per cent in 2008. Moon Bum Shin, managing director of LGElectronics India has said that the company has earmarked 4.8 billion rupees for investmentpurpose in India this year. The said money will be used to market as well as manufacture newproducts. LG Electronics, informed that its sales of GSM mobile phones, color televisions, airconditioners 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 billionrupees. In order to achieve its target, Shin said LG Electronics will concentrate on catering to thehigh-end consumer market which will help boost sales this year. India churns out six (6) per centof LG Electronics global revenues of $42 billion. The Indian branch of LG exports to 40

countries. Shin remarked that the company was targeting an increase of exports to $300 millionin 2008 from $230 million in 2007.

LG PUNELG Pune is the branch office of LGEIL. It is located in J.M Road. In 2004 LGEIL openedsecond factory which is located in Ranjangaon. This plant manufactures all product includingDVD writers and GSM mobiles. Thus it became first company to manufacture DVD writers inIndia. The ODP plant aims to reach a manpower base of 1500 people and an investment of Rs300 crore till 2010. LG India will become the export hub for LG Worldwide, catering to theMiddle East and African markets. The company aims to touch an export turnover of $3 billion by2010 from India, which will contribute to 30 per cent of the Indian arm's turnover. , India,October 6, 2004 -- LGE announced 3 growth strategies aimed at the 1.1 billion people of Indiamaking the Indian market the second largest global production base following China. Under thisstrategy LGE has projected 2007 revenues in India will exceed US$10 billion, 10 times that of2004.The three strategies for the Indian market that the global electronics giant disclosed included:penetrate the south-western market of India through the new plant near Mumbai, the secondlargest city in India, in addition to the existing northern plant; installs a new GSM handsetproduction line in the new plant and use it as its second-largest global GSM handset productionline after the Qingdao plant in China; and expand the current 750 R&D staff in India to 1,500 by2007, striving to develop premium products and export 30% of India-manufactured products toAsia, Middle East and Africa markets by 2007. LG Electronics second new plant in Pune, Indiacovers a total area of 211,200 square meters and is currently equipped with a production line tomanufacture 600,000 TVs and one million refrigerators a year. The company is set to addproduction lines of air conditioners, washing machines, monitors, and electronic ovens, by 2005.Also, LG Electronics is poised to install a GSM handset production line in the new plant by earlynext year. The GSM handset line envisages a capacity of manufacturing 2 million handsetsannually, and the company expands it to become a global GSM handset production base with acapacity of an annual 10 million units by 2010. In connection with its three growth strategies forthe Indian market, LG Electronics will invest a total of US$150 million in establishing facilities


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and boosting R&D efforts in India by 2007. Specifically, it will invest US$53 million in thesecond plant, another US$43 million in establishing the GSM line, and US$54 million insecuring R&D manpower and boosting other efforts. Through these strategies, LG Electronicsaims to penetrate the global market by using China and India as its core production bases, whileoperating its plants in Changwon and Gumi, Korea, as its main production bases. This way, the

company is pushing to penetrate the global home appliance market. The present capacity of thefacility is of 1 lakh unit per year and it shall cater to the need of the domestic markets. LG plansto upscale its operations to a figure of 2.5 lakh units a year in the near future. The plant inaddition to its current manufacturing facility at Greater Noida will enable the company toenhance its consumer reach and reiterate its commitment towards providingsuperior technology products to the India consumer. The key strategies being implementedinclude increasing the number of its regional offices from six to eight. LG has split its southernregional office into two, one comprising the states of Tamil Naduand Kerala and the other consisting of Andhra Pradesh and Karnataka. In addition, it has splitone of its northern regional offices by making Uttar Pradesh a separate region after spinning itout 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 mediaexpenditure for better brand visibility. LG had a marketing budget of Rs 320 crore in 2007 with a60:40 split in favor of below-the-line activities. Next year, the company plans to increase theshare of mass media even as overall marketing spends would be raised by just about 10-15%.

Distribution and Marketing:

The company has number of dealers and warehouses. They have LG exclusive shops. For themarketing of the products a number of activities are followed:1. Exhibitions are conducted from time to time.2. Society and college activities are conducted.3. Hoarding, Posters, banners are used so as to grab the attention of the costumers.4. Day to day advertisement in leading newspaper.5. Discount at festival time.


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6. For dealer relationship they arrange dealer meeting at several time in the year7. LG divide dealer in gold silver etc. category to know the performance of the dealers.8. They have their sales persons at various sub dealer store and at mordent trade store forparticularly for the promotion of the LG product.9. LG also uses the radio FM for the promotion activities.

10.Also provide capon and scratch card for festive season.

The logistics (Supply Chain Management):-

Logistics is the art and science of managing 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 manufacturingwithout logistical support. It involves the integration of information, transportation, inventory,warehousing, material handling, and packaging. The operating responsibility of logistics is thegeographical repositioning of raw materials, work in process, and finished inventories whererequired at the lowest cost possible.Logistics Management is that part of the supply chain, which plans, implements and controls theefficient, effective forward and reverse flow and storage of goods, services and relatedinformation between the point of origin and the point of consumption in order to meet customers'requirements.5Rs of Logistic followed by LG:1. Right Time2. Right Place3. Right Condition4. Right Cost5. Right Handling

The LG Factory is located at NOIDA & . There are three types ofWarehouse-1. Mother Warehouse2. Branch Warehouse3. Spare part warehouseThe mother warehouse is that where the products from the factory are kept and from thatwarehouse, the products are sent to the branch warehouse. A warehouse is a commercial buildingfor storage of goods. Warehouses are used by manufacturers, importers, exporters, wholesalers,transport businesses, customs, etc. They are usually large plain buildings in industrial areas of


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cities and towns. They come equipped with loading docks to load and unload trucks; orsometimes are loaded directly from railways, airports, or seaports. They also often have cranesand forklifts for moving goods, which are usually placed on ISO standard pallets loaded intopallet racks.

In warehouse 7 locations is set up for the products.Loc 1, Loc 2, Loc 3, Loc 4 , Loc 5 ,Loc6, Loc 7Loc 1 sellingLoc 2 - second saleLoc 3 - insurance claimLoc 4 - write off materialLoc 5 destroy the itemLoc 6 - court case materialLoc 7 - for repair

5s of warehouse, which the LG strictly follow.1. Sweeping2. Sorting3. Systematic Arrangement4. Simplification5. Self- discipline

In warehouse, the products are pinup with 3-color paper to get the knowledge about the delivery.

1. Red Card To stop the product going into 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

Distribution Time:- Local delivery 4 hrs. Upcountry delivery - 12 hrs. Within 200 km. 24 hrs. Beyond 200 km. 48 hrs.The above distribution time is the time of delivery of products from warehouse to the marketplace, which the logistic department follows to fulfill the demand in the market at right time. InLG, we have the following process, which is followed in logistic through ERP. Order Processing Invoicing Indenting ReportOrder Processing booking for dealers /distributorsInvoicing after billing process/bill generationIndenting requirement (Production Unit to branch unit)


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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 fire extinguishers to prevent the accidental hazard within the warehousedue to fire. These fire extinguishers are valid up to year 2011. One has to follow the rule of NOSmoking within the warehouse

Logistics Ten Commandments Golden Rules

1 - Warehouse 5S to be strictly followed FG 2, 5 & 7 to be properly maintained.2 - 100% Bar-coding for all inward & outward transaction.3 - Follow standard pick ship process religiously.4 No inventory mismatch, shortage or excess monthly 100% physical stocktaking.

5 Nil 30+ for FG 2, 3 & 5.6 Nil transit damage.7 File insurance claim within 2 days. Settle all claim all within 30 days.8 No inter branch transfer without HO clearance.9 PSI feeding into system by 25th of every month. Ensure 90% accuracy.10 Apply physical FMFO.

Problem

1- In transit material damage checking.2- Cost target achievement.3- Natural events tracking.4- Fluctuation in demand-supply Equipments1- 100% Bar code scanner.2- ERP Invoice Generation Process.3- Hydraulic Trolleys for material movement.4- Pallets for safety of material.

CUSTOMER SERVICE:

The best and the biggest international brands are here in India but the irony if it all: where is theafter-sales-service? So integral to a brand, so critical for its success and so taken for granted indeveloped markets! In India, after sales service is, for want of a better description, the pits. Sowhats stopping the best companies from pulling out all the stops when it comes to providing thebest service? Do customers expect for too much? Or is it that in India they dont really care.Brand Equity fanned out to MNC as well as Indian consumer durable companies, stockiest anddealers, analysts and market researchers to get feel of whats really keeping after sales frombeing used as a cutting edge marketing tool in pushing products across categories. Customers


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support following the purchase of a product or service. In some cases, after-sales service can bealmost as important as the initial purchase. The manufacturer, retailer, or service providerdetermines what is included in any warranty (or guarantee) package. This will include theduration of the warranty traditionally one year from the date of purchase, but increasingly two ormore years maintenance and/or replacement policy, items included/excluded, labor costs, and

speed of response. In the case of a service provider, after-sales service might include additionaltraining or helpdesk availability. Of equal importance is the customer's perception of the degreeof willingness with which a supplier deals with a question or complaint, speed of response, andaction taken.

LG also had a big problem of after sale service in India. During the project we also came toknow that after sale service becomes the big issue in the region. Customers as well as dealerwere facing the problem of after sales service. Because of this problem many dealer in the regionwere not ready to sell LG product. So it becomes the big issue. But LG has taken some solidsteps towards improving customers perception and experience of after sales service. Because it

very important in competitive market to provide the best service. L G Electronics has signed amemorandum of understanding with 23 Industrial Training Institutes to strengthen its after salesservice in India. The company aims to recruit 10,000 people by the end of this year as a part ofits branding strategy to focus on service and move away from discounting. L G Electronics hasidentified eight states with high after sales service call rates to ink the deals with the ITI. Y VVerma, director HR and management system, LG Electronics said, "The Company was trying tofind a solution for effective after sales service since last two years. There is a huge need oftrained manpower for the after sales service to align with the company's expansion and focus onthe GSM mobiles and the personal computer segments."

1. In the initial phase the company has entered into agreements with ITIs in the states likeMaharashtra, Gujarat, Delhi, Punjab, Assam, and Karnataka and is in the last leg of signing withUttar Pradesh.2. L G Electronics, with 1200 service centers, has already recruited 300 students and plans tobeef up the number to 10,000 by the year-end.3. "The company has offered a scholarship to the selected students for the last six months of theirtraining program,"4. The company will invest Rs 8 crore (Rs 80 million) in employee development program thisyear with an aim to attain a 8 per cent attrition rate.5. The company moved away from the discounting strategy since last year and is putting thruston the quality and service in its brand communication to position LG as a premium consumerelectronics brand.6. At the top, the Service Division in Korea reports to the Global CMO. (as mentioned inDermots public interview in ET on Wednesday). This shows commitment that Service must bemade into a marketing differentiator, and leveraged thus.7. LG has the widest service network across the country; some estimates put it at a significantmultiple of service-infrastructure from our nearest competitor. While the sale size may also be anice multiple from nearest, it shows the company is ready to put our money where our mouth is.8. The company has introduced a 211 service - once you register your complaint, we will callyou back in 2 hours (hence 2), set up an appointment for the next convenient day for you (hence


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the first 1), and show up in the promised 1-hour slot (hence the second 1). If the next convenientday for you is the next day, thats great too. Its a disruptive action in an industry (including LG)having traditionally shied away fromits service responsibilities, and thus not leveraging any mileage from it.9. The company is promoting 211 through ATL, probably the first time after sales service is

being communicated in this fashion by any product company. You may have seen the TVcommercial or heard the radio advert or seen the newspaper ad or in-shop posters, both of whichrevolve around prompt response.10.The first LG-owned service centre opened in Gurgaon. (Service in India generally worksthrough authorized service centers, in LGs case they work exclusively for LG.) A company-owned service centre tries that much harder, knows things better, and can even contribute as arevenue center.Objective of the project

Primary objective

The main objective 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 Mahaveerelectronics. Find out the problem faced by the 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 theconsumer?

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 increases the knowledge consumer durable product of LG.

To enhances the knowledge about the marketing and brandingactivity.

Research Methodology:

Research methodology is considered as the nerve of the project. Without a proper well-organizedresearch plan, it is impossible to complete the project and reach to any conclusion. The projectwas 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


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the context of a research study and it explains why a particular method has been used in thepreference of the other methods

Research design

Research design is important primarily because of the increased complexity in the market as wellas marketing approaches available to the researchers. In fact, it is the key to the evolution ofsuccessful marketing strategies and programmers. It is an important tool to study buyers behavior, consumption pattern, brand loyalty, and focus market changes. A research designspecifies the methods and procedures for conducting a particular study. According to Kerlinger,Research Design is a plan, conceptual structure, and strategy of investigation conceived as toobtain answers to research questions and to control variance.

Type of research is Descriptive Research

The type of research adopted for study is descriptive. Descriptive studies are undertaken in manycircumstances 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 incases when a researcher isinterested in knowing the proportion of people in a given population who have in particularmanner, making projections of a certain thing, or determining the relationship between two ormore variables. The objective of such study is to answer the who, what, when, where and howof the subject under investigation. There is a general feeling that descriptive studies are factualandvery simple. This is not necessarily true. Descriptive study can be complex, demanding a highdegree 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 approach cannot be changed everynow and then. It is therefore necessary, the researcher give sufficient thought to framingresearch.Questions and deciding the types of data to be collected and the procedure to be used in this purpose. Descriptive studies can be divided into two broad categories: Cross Sectional andLongitudinal Sectional. A cross sectional study is concerned with a sample of elements from agiven population. Thus, it may deal with household, dealers, retail stores, or other entities. Dataon a number of characteristics from sample elements are collected and analyzed. Cross sectionalstudies are of two types: Field study and Survey. Although the distinction between them is notclear- cut , there are some practical differences, which need different techniques and skills. Fieldstudies are ex-post-factor scientificinquiries that aim at finding the relations and interrelations among variables in a real setting.Such studies are done in live situations like communities, schools, factories, and organizations.Another type of cross sectional study is survey result, which has been taken by me. A majorstrength of survey research is its wide scope. Detail information can be obtained from a sampleof large population .Besides; it is economical as more information can be collected per unit ofcost. In addition, it is obvious that a sample survey needs less time than a census inquiry.Descriptive researchincludes survey and fact finding enquiries of different kinds of the major purpose. Descriptiveresearch is description of the state of affairs, as it exists at present. The main characteristic of this


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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 tothe values they represent. The total value is represented by the full create. The diagram bar chartcan 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 numberof whispered bar, which originate from a common base line and are equal widths. The lengths ofthe bards are proportional to the value they represent.

Preparation of report:The report was based on the analysis and presented with the findings and suggestions. Thesample of the questionnaires is attached with the report itself.

Sampling Methodology:

Details of the sampling methodology, I have made questionnaire. The one is made for theCustomer.No. of questions in questionnaires for customer: 07No. of question related to LG product: 03No. of people met during the research: 200No. of respondents during the research: 50Sample unit Professionals, Business man,Employees, House wife, Working women, StudentsAnalysis:Q1. Have you purchased any consumer durable during Exhibitions?Yes

NoInferences1. 65 % of Customers have not purchased any consumer durable from exhibitions.2. Only 35 % people have purchased.3. It shows that consumers are coming in the exhibition for knowledge of product and also theywant to know that weather there is actual price difference in exhibition and shop or not.4. Consumers also want to compare to the different brand which are available in the exhibition.5. So exhibitions are more useful to increases brand awareness.6. People are less interested to purchase product from the exhibition.

Q.2While purchasing consumer durable which parameter influences you? Price Product feature

Brand ServiceDurabilityInference1. 30% of customer gives importance to price. So it shows that Indian consumers are very pricesensitive. They give more importance to price over the brand.


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2. 26% give importance to brand. So price and Brand matter a lots for the costumers. And theyare also want best brand in best price.3. 19% to product feature Service 16% and durability 9% Service is also a big factor for thecustomer they are less interested in the durability.

Q3. From where you prefer buying consumer durables

Exhibitions Co.shoppee ShowroomInference:1. A majority of customers prefer to buy from showrooms. Very less proposition of customersbuys from Exhibitions.2. 47% customers are prefer to by from the showrooms because the showrooms are moreconvenient to customers they also think that these shops give more discounts.3. People are less interested to buy from the exhibition they only visit the exhibition for price

quotation of the product and the comparison of the product.

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

ServiceDemonstrationsOffers

Inference1. Customers buy from showrooms because of the service and convenience.These are two main factors.2. Customers are preferred to buy from the showroom because of they think that theseconvenient store may provide good after sell service.3. Customer also thinks that there is more chance to bargain and they can get more discounts inthese showrooms.4. Price also a factor that attract the customer in these showrooms.

Q.5.Which consumer durable you have and of which brand? CTV LCD PLASMA

REFWMMW

ACInferenceIn CTV section maximum customers have Onida, in LCD Sony is the leader, In plasma BPL isthe leader, In Ref LG is the leader, MW LG is the leader. In WM there are companies and in ACalso.


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Q.6. How frequently you change your consumer durables? 1-3 years 3-5 years 5-10 years

More than 10 years

Inference1. Customers prefer to change consumer durables within 5-10 years. In India people do notchange consumer durable frequently.2. 23% customers do not change their consumer durable within 10 year.3. It represent that Indian consumer do not prefer to change their consumer durable frequently.

Q.7.Do you prefer any financing scheme to purchase consumer durables?Yes

NoInference

Majority of customers do not prefer any financial scheme.

Dealer survey Findings

1. By calculating the display share we found that in most of store LG has50% display share almost all categories.2. By the actual monthly sale of particular store we came to know thecapacity 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 dealerof LG or not and it also helps to find out the new dealer who are capableof being the dealer of LG.4. We also came to know while visiting the shops that there was big problemof after sale service.5. Many dealers were facing the problem of after sale service because thereis no follow up calls from LG.6. Demo calls also not done properly.7. The top competitor of LG product in is SAMSUNG.8. In area the performance of LG is in better position but thecompetitor 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 canplay a good role in promotion of products as well as demonstration given by the shopkeeper alsoplays a vital role for customer.

RECOMMENDATIONS AND SUGGESTIONS:

1. LG should improve its after sale service because its hits badly LGs market share in region.2. More detailed customaries service is to be provided.3. The training to in shop demonstration should be given at frequent time interval and feed backshould be considered positively.


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4. The company should look into the matter of person hiring for in shop demonstration. A bigLG showroom should have at least 2 such kind of person.5. LG should try new dealer who have the potential. So they can target more market.6. As there is a bottle neck competition between Samsung and LG, it is necessary to takemeasure steps to overcome the area of downfall in LG with respect to Samsung.

7. The marketing managers should make better relations with dealers and reputation of thecompany.8. Customer considers quality as their first preference, so the company should give more stresson this.9. The switching of customer from LG product to other brand is due to the bed after sell servicein shop.10.The product is well aware and it is on top of mind of customer.

So company should always improve services and update their technology.

CUSTOMER SURVEY FINDINGS

1. Secondary supports play an important role in the customers mind and create awareness amongthe customers. The secondary support includes Demonstration, Exhibition & Even Sponsors.2. From the survey it was found out that the majority of customers dont buy consumer durablesfrom exhibitions. They just visit the exhibitions to see the co. latest model.3. They want to buy from the showrooms or from co. showrooms. For them service isimportant .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 ISDs were appointed that day. Alsothe 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 companyto make loyal customer of their brand.7. In survey we found that LG has captured maximum market share in every category. LGdominates 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 thecompany to make loyal customer of their brand.

RECOMMENDATIONS AND SUGGESTIONS

1. Exhibitions do not help to generate so much sells but they should be conducted regularly. Thishelps in generating awareness regarding the product in customers which ultimately helps in sales.


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2. Also it is helps in advertising for the new products. Like in this exhibition new LCDSCARLET was advertised. Company should always focus on service.3. Display share should be increased where there is less than 50% as LG also believes that JODIKHTA 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 companys profit.5. Company should concentrate more on its major drivers LCD, IT, and GSM. Branding andpromotions should be done effectively as it creates a long lasting image in the mind ofcustomers.6. Company should also cater to the needs of sub dealers as some of the sub dealers havepotential of high sales.

LIMITATIONS

Every study has certain limitations. In our study, also there were certain limitations, which Icould not able to solve.1. The research was conducted in a very small area.

2. Our research work period witness the biggest ups and downs in product sale of differentbrands, which affected the perception of the customer.This was biggest drawback of my study.3. Time factor was also important for us. We had limited time for the research, for which a full-fledged report was insufficient for me.4. The customer filled the questionnaire mostly in careless manner, so it was difficult to makethem hold for time.5. We had only found the upper-middle class family to fill up thequestionnaire, but generally, an average middle class family was required for the study.6. The sample size is also very small which represent my research on consumer behavior

BIBLIOGRAPHYwww.lgindia.com

www.google.comwww.wikipedia.com Business world

Business today LG magazine Economics times News paper Times of India


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Consumer survey Questionnaire

Q1. Have you purchased any consumer durable during Exhibitions?a) Yesb) NoQ.2While purchasing consumer durable which parameter influences you?a) Priceb) Product featurec) Brandd) Servicee) Durability

Q3. From where you prefer buying consumer durablesa) Exhibitionsb) Co.shoppeec) Showroom76Q.4.You prefer to buy from the same as you have mentioned in Q.3because of following reasonsa) Attractive Priceb) Servicec) Demonstrationsd) Offerse) ConvenienceQ.5.Which consumer durable you have and of which brand?a) CTV -------------------b) LCD -------------------c) PLASMA -------------------D) REF -------------------E) WM -------------------F) MW -------------------G) AC -------------------Q.6. How frequently you change your consumer durables?a) 1-3 yearsb) 3-5 yearsc) 5-10 yearsd) More than 10 years77Q.7.Do you prefer any financing scheme to purchase consumer durables?a) Yesb) No


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APPENDIX

A.S.I Area Service In chargeA.S.M Area sales managerB.S.I Branch Service In charge

CAC Commercial Air Conditioning SystemC.S NET Customer Service NetD.S.C. Direct service centre.L.H.D Logistics Head of departmentR.E.F Refrigerator

Documents

22 Lg+Marketing+Project