Alok Sharma case study on LG products

7/30/2019 Alok Sharma case study on LG products

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A

Project Study report

On

Training Undertaken at

LG ELECTRONICS INDIA Ltd.

Titled

Marketing Analysis on LG Consumer &

Dealer Development

Submitted in partial fulfillment for theAward of degree of

MASTERS OF BUSINESS ADMINISTRATION

SUBMITTED BY:- SUBMITTED TO:-

ALOK SHARMA RUPESH ROHSHN

MBA Final Year LECTURER

2009-2011

Sobhasaria Engineering College,

School of management,Sikar


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PREFACE

Project Study is an important part of our curriculum in M.B.A course. A projectstudy helps a student in getting aquatinted with the manner in which his

knowledge is practically used outside of his institution and it is different from

what he has learnt from books. Hence when one switches from the processes

of learning to that of implement his knowledge, he perceives an abrupt

change. He also interact with customers n dealers and perform Market Survey

collects primary data and analyze them. This is why a project study sessionduring M.B.A curriculum becomes an important aspect.

As a part of MASTERs degree I have taken my first implant Project Study at

LG ELECTRONICS INDIA Ltd. after 3rd sem. session.

During these days of study I was exposed to real working environment. Also I

took the advantage of viewing and learning practically about the large tech-

nical base.

On the basis of information collection and guidance provided I had prepared a

comprehensive report. Here it is a systematic presentation of this record.

ALOK SHARMA

M.B.A. FINAL YEAR


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Acknowledgement

I express my sincere thanks to my project guide, RUPESH SIR, Deptt_MBA, for guiding me right from the inception till the successful completion of

the project.

I sincerely acknowledge him/her/them for extending their valuable guidance,

support for literature, critical reviews of project and the report and above all the

moral support he/she/they had provided to me with all stages of this project.

I would also like to thank the supporting staff of MBA Department, for theirhelp and cooperation throughout our project.

(Signature)ALOK SHARMA

..


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DECLARATION

I will take pleasure in declaring that the project work that is undertaken by me

is an original and authentic work done by me. This project is being submittedin partial fulfillment for award of degree of Post Graduation in Management

from Rajasthan Technical University.

The content of this report is based on the information collected by me during

my tenure at LG Electronics Ltd. at JAIPUR for 45 days of study.

(ALOK SHARMA)


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Executive summary

Indian Consumer durables market used to be dominated by few domestic players like go-

drej, Voltas, allwyn and kelvinater. But post liberalization much foreign company have en-

tered into Indian market dethroning the Indian player and dominating Indian market the ma-

jor categories in the market CTV, REFRIGRATOR, AIR CONDTIONERS AND

WASHING MACHINE India being the second largest growing economy with huge con-

sumer class has resulted in consumer durables as the fastest growing industries in India

LG & SAMSUNG the two Korean companies has been maintaining the lead in the indus-

tries with LG being leader in almost all the categories.

The rural market is growing faster than the urban market, although the penetration level is

much lower .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 majorLG Electronics India Pvt Ltd (LGEIL) will invest nearly Rs

500 crore in India this year in research and development, brand-building and other mar-

keting initiatives.

The company, having a turnover ofRs 9,500 crore and market share of26 per cent, is

investing Rs 360 crore on brand-building and other marketing initiatives and around Rs

140 crore on research and development, besides launching new platforms in information

technology and related areas.

LGs innovative 211 campaign to provide quality after-sales service, will also be expanded

from the existing 45 to 56 cities by next month.

The campaign, for which IT infrastructure has been set up, includes the companys re-

sponse to customer complaint within two hours. The fixing time for complaints varies from

one hour to a maximum of 24 hours (TAT).


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Contents: -

1. Introduction to the Industry2. Introduction to the Organization

(a) History of the company

(b) Vision

(c) Mission

(d) LG India

(e) Major Key success factors

3. Research

3.1 Title of the Study

3.2 Duration of the project

3.3 Objective of the Study

3.4 Type of Research

3.5 Sample Size and method of selecting Sample

3.6 Scope of Study

3.7 Limitations of Study

4. Facts and Findings

4.1 Dealer survey findings

4.2 Customer survey findings


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5. Analysis and Interpretation

5.1 Dealer Survey

5.2 Customer Survey

6. SWOT Analysis

7. Conclusion

8. Recommendation and Suggestions

9. Appendix

9.1 Questionnaire

9.2 Abbreviation

10. Bibliography


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INTRODUCTION

Before the liberalization of the Indian economy, only a few companies like Kelvina-tor, Godrej, Allwyn, and Voltas were the major players in the consumer durables

market, accounting 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 consumer durables

market.

Consumer durables market is expected to grow at 10-12% in 2008-2009. 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 con-

sumer durables has increased significantly. Products like washing machines, air

conditioners, microwave ovens, color televisions (CTVs) are no longer consid-

ered luxury items. However, there are still very few players in categories like vacuum

cleaners, and dishwashers.

Consumer durables sector is characterized by the emergence of MNCs, exchange

offers, discounts, and intense competition. The market share of MNCs in con-

sumer durables sector is 65%. MNC's major target is the growing middle class of In-

dia. MNCs offer superior technology to the consumers whereas the Indian companies

compete on the basis of firm grasp of the local market, their well-acknowledged brands,

and hold over wide distribution network. However, the penetration level of the consumer

durables is still low in India.


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Classification of consumer durables sector

1. Consumer electronic includes 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, re-

frigerators, vacuum cleaners, kitchen appliances, non-kitchen appliances, microwaves,

built-in appliances, Tumble dryer, personal care product etc.

3. Moulded luggage includes plastics.

4. Clocks and watches.

5. Mobile phones.


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Strength

1. In term ofpurchasing 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 ofpeople in the different income categories nearly the two third population is below theage of 35 and nearly 50% is below 25.

4. There are 56 million people in middle class, who are earning us$4,400-US$21,800 a yearand there are 6 million rich household in India.

5. The upper-middle and high-income household in urban areas are expected to grewto 38.2 million in 2007 as against 14.6 million in 2000.

Opportunity

1. In India the penetration level of white goods is lower as compared to other develop-

ing 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

Higher import duties on raw materials.

Cheap imports from Singapore, China and from other Asian coun-

tries.


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Brands in consumer electronics sector

MNCs NATIONAL REGIONALLG )SAMSUNG ) KOREA ONIDA BUSHHYUNDAI ) VIDEOCON CROWN

BPL SALORATCL ) CHINA GODREJ T-SERIESHAIER ) VOLTAS WESTON

IFB BELTAKPHILIPS ) HOLLAND OSKAR

PANASONIC )SHARP )HITACHI )SANSUI ) JAPAN

AKAI )AIWA

WHIRLPOOL )

ELECTROLUX

TODAY Consumer durables sector is characterized by the emergence of MNCs, ex-

change offers, discounts, and intense competition. The market share of MNCs in consumer

durables sector is 65%. MNC's major target is the growing middle class of India. MNCs of-

fer superior technology to the consumers.

LG, SAMSUNG the two Korean companies has been maintaining the lead in theindustries 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 in-

vesting Rs 360 crore on brand-building and other marketing initiatives and around Rs 140

crore on research and development, besides launching new platforms in information tech-

nology and related areas.


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What does LG stand for?As LG is not an acronym, there is no full name for LG.

On renaming the Group, we considered 'LG' to be the most appropriate for a new Group

name that could integrate different images of two main streams of the Group's businesses,

the Chemicals led by 'Lucky' and the Electronics & Telecommunications led by 'Gold star,'

while including various brand images of other business fields.

LG Electronics is one of the leading companies in the field of electronics with a global

presence in many countries. It is a Korean Company. Before briefing, I have divided the in-

troduction part into three main sub parts.

1. LG Global2. LG India

3. LG Pune

History of company

Year of Foundation: 1947

Total Sales: KRW 84 Trillion (as of 2006)

Business Fields: Electronics, Chemicals,

Telecommunication & Services

Number of Companies: 30

Overseas Subsidiaries: around 130

Number of employees: around 120,000.

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

refrigerators, washing machines, and air conditioners.

The LG Group was a merger of two Korean companies Lucky and Gold Starfrom

which the abbreviation of LG was derived. The current "Life's good" slogan is a


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backronym. Before the corporate Name changeto LG, household products were sold under

the Brandname ofLucky, while electronic productswere sold under the brand name of

Gold Star. The Gold Star brand is still perceived as a discount brand.

In 1995, Gold Star was renamed LG Electronics, and acquired Zenith Electronicsof the

United States.

SignatureThe signature of LG being the most important element in communicating with LG's BrandImage, any change or distortion of proportion, spacing or resizing at will is absolutely pro-hibited. The signature shall be used with consistency and uniformity among all kinds of me-dia. Restrictions and rules of the corporate Identification Program shall always be respect-

ed.

Horizontal

coordination

Vertical

coordination

Global Operation

LG Electronics is playing an active role in the world market with its assertive global busi-

ness policy. As a result, LG Electronics controls 110 local subsidiaries in the world

with around 82,000 executive and employees.

LG Group

1. LG Philips LCD

2. LG Chemical

3. LG Telecom

4. LG Powercom

5. LG Twins

6. LG Dacom
http://en.wikipedia.org/wiki/Backronymhttp://en.wikipedia.org/wiki/Backronymhttp://en.wikipedia.org/wiki/Name_changehttp://en.wikipedia.org/wiki/Name_changehttp://en.wikipedia.org/wiki/Brandhttp://en.wikipedia.org/wiki/Brandhttp://en.wikipedia.org/wiki/Electronic_productshttp://en.wikipedia.org/wiki/Electronic_productshttp://en.wikipedia.org/wiki/Zenith_Electronicshttp://en.wikipedia.org/wiki/Zenith_Electronicshttp://en.wikipedia.org/wiki/LG_Grouphttp://en.wikipedia.org/wiki/LG.Philips_LCDhttp://en.wikipedia.org/wiki/LG_Chemicalhttp://en.wikipedia.org/wiki/LG_Telecomhttp://en.wikipedia.org/wiki/LG_Powercomhttp://en.wikipedia.org/wiki/LG_Twinshttp://en.wikipedia.org/wiki/LG_Dacomhttp://www.lg.co.kr/eabout/business/lgCorp.jsp?cmd=company&path=001000003http://www.lg.co.kr/eabout/business/lgCorp.jsp?cmd=company&path=001000003http://www.lg.co.kr/eabout/business/lgCorp.jsp?cmd=company&path=001000003http://en.wikipedia.org/wiki/LG_Dacomhttp://en.wikipedia.org/wiki/LG_Twinshttp://en.wikipedia.org/wiki/LG_Powercomhttp://en.wikipedia.org/wiki/LG_Telecomhttp://en.wikipedia.org/wiki/LG_Chemicalhttp://en.wikipedia.org/wiki/LG.Philips_LCDhttp://en.wikipedia.org/wiki/LG_Grouphttp://en.wikipedia.org/wiki/Zenith_Electronicshttp://en.wikipedia.org/wiki/Electronic_productshttp://en.wikipedia.org/wiki/Brandhttp://en.wikipedia.org/wiki/Name_changehttp://en.wikipedia.org/wiki/Backronymhttp://www.lg.co.kr/eabout/business/lgCorp.jsp?cmd=company&path=001000003


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LG Electronics

- LG.Philips LCD

- LG Innotek

- LG Micron

- Hiplaza

- Hi Logistics

Siltron

Lusem

LG Chem

- LG Petrochemical

-LG DOW Polycar-bonate

- SEETEC

LG Household &Health Care

LG Life Sciences

LG MMA

LG TeleCom

- CS Leader

- TeleDREAM

DACOM

- LG Powercom

-DACOM Multime-dia Internet

- DACOM Crossing

LG CNS

- V-ENS

LG N-Sys

SERVEONE

LG ManagementDevelopment Insti-tute(Economic Re-search Institute)
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o Business areas and main products

Mobile communications

(a)CDMA Handsets,(b)GSM Handsets,

(c)3G Handsets,

(d)Cellular Phones

Digital appliance

a) Air Conditioners,

b) Refrigerators,

c) Microwave Ovens,

d) Washing Machines,

e) Vacuum Cleaners,

f) Home Net,

Compressors for Air Conditioners and Refrigerators

Digital display

a) Plasma TVs,

b) LCD TVs,

c) Micro Display Panel TVs,

d) Monitors,

e) PDP Modules,
http://en.wikipedia.org/wiki/Air_conditioninghttp://en.wikipedia.org/wiki/Refrigeratorhttp://en.wikipedia.org/wiki/Microwave_ovenhttp://en.wikipedia.org/wiki/Washing_machinehttp://en.wikipedia.org/wiki/Vacuum_cleanerhttp://en.wikipedia.org/wiki/Compressorshttp://en.wikipedia.org/wiki/Plasma_displayhttp://en.wikipedia.org/wiki/Liquid_crystal_display_televisionhttp://en.wikipedia.org/wiki/Liquid_crystal_display_televisionhttp://en.wikipedia.org/wiki/Plasma_displayhttp://en.wikipedia.org/wiki/Compressorshttp://en.wikipedia.org/wiki/Vacuum_cleanerhttp://en.wikipedia.org/wiki/Washing_machinehttp://en.wikipedia.org/wiki/Microwave_ovenhttp://en.wikipedia.org/wiki/Refrigeratorhttp://en.wikipedia.org/wiki/Air_conditioning


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f) OLED Panels,

g) USB Memory.

Digital media

a) Home TheaterSystems,

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
http://en.wikipedia.org/wiki/Home_cinemahttp://en.wikipedia.org/wiki/DVD_recorderhttp://en.wikipedia.org/wiki/Digital_audio_playerhttp://en.wikipedia.org/wiki/Digital_audio_playerhttp://en.wikipedia.org/wiki/DVD_recorderhttp://en.wikipedia.org/wiki/Home_cinema


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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

SLOGAN


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Lifes 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 type face 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

unique identity of the company and unifies every division and product from LG

Electronics across the globe.

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 repre-

sents LGs efforts to keep close relationship with ourcustomers 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.


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Red colorrepresents our friendliness and gives a strong impression of LGs commitment

to deliver 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 repre-

sentsGoal-oriented, focused & Confident.

The slogan of LG isLifes Good, expresses Brands Value, Promises, Bene-

fits, Personality.

THE PARTNERSHIP

LG Electronics chooses to promote harmony and build constructively on a labor-

management relationship rather than an employee-employer 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 wherebyboth parties endeavor to address mutual problems and create 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 compa-

nies.

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 compa-

nies. "Strategic association between corporations," in which companies with different infra-

structures cooperate in the fast-developing 21st century business field, is of key signifi-

cance in terms of strengthening the existing industry and creating a new one.


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LG Electronicswill 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. HP8. GOOGLE

9. GE

10. INTEL

11. NORTEL

12. HITACHI

13. PRADA

14. RENESAS

15. TOSHIBA

16. BESTBUY

And the number follows many more..

In Feb. 2008 LG Electronics and Yahoo formed a strategic alliance. Yahoo mobile ser-

vices will be available from LG mobile. This service is targeting 10 million LG mobile

phones in over 70 countries.

In Mar. 2008 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.)


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LG BRAND IDENTITY:-

The brand of LG is delightfully smart. LG strives to enhance the customers life and lifestyle

with intelligent features, institutive functionality and exceptional performance.

The brand platform:-

The LG brand is composed of four basic elements

Value

Promise

Benefits

Personality

The Brands core Value that never changes:-

Trust

Innovation

People

Passion

The benefits that are consistently delivered to the customer includes:

Reliable products

Simple design

Ease of use

Extraordinary Experience

Personality describes the human characteristics that are expressed to the cus-

tomer through:

Trustworthy Considerate

Practical Friendly


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The Internal Culture of LG:

LG practices four cultures

Learning Culture

Boundary less Environment

A Carrier

Growth

According to LG, the Learning Culture continuously helps the employee to learn

more and more to develop the habit of continuous learning.

Boundary less Environment means that there is no difference between the lev-

els of employees. There is transparency between the work and mutual understand-

ing 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 is very 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 in LG. The company is growing with fast innovation and the BLUE

Ocean strategy is one of the examples of growth.

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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OUR PRINCIPLES AND POLICIES

01. Creativity & Autonomy

An individual's creativity is the source of creating value. We respect diversity and autonomyso that each can exercise his / her own creativity to the full extent.

02. Equal opportunity

Equal opportunity builds trust between people. We ensure everyone an equal opportunityregardless of gender, race, age, religion or nationality.

03. Emphasis on competence

We have adopted competence as the most important criterion for making personnel deci-sions.

04. Long-term perspective

Maintaining a long-term perspective is the foundation of our human resource policies. Hu-man resource programs should be designed with a long-term perspective and implementedwith dedication and persistence.

05. Performance based rewards

Rewards based on performance are essential for human motivation. Performance results

will be fairly evaluated and rewarded accordingly.


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Performance-Based Principle

LG practices a performance-based salary system, which was initiated in 2000 to install a

performance-based culture across all subsidiaries.

The performance-based salary system evaluates employees' rank, title, salary, and other

values on the basis of job performance and role, which represents a shift away from the

previous seniority-based system. This new system inspires employees to exercise their in-

dividual abilities to the greatest extent, which raises standards and promotes a perfor-

mance-based.

LG set the basic framework for this goal, and allowed each of its subsidiaries to formulate

their respective detailed action plans.


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o Product Leadership

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

New Machine Reliability

Conventional Installation

Environment Friendly Product

Low Noise & Vibration

Energy Saving

o Quality Innovation

The policy of quality assurance is to provide customers with utmost satisfaction by supply-

ing zero 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-DOManagement is LGs unique application to ethics. LG will succeed through

fair management practices and constantly developing our business skill.

A) Honest with our customer

b) Providing great values to customer through constant innovation & and develop-

ment.

c) Equal opportunities.

d) Equal Treatment

e) Management Principle - Creating value for customer

LG's vision is to become the best in its class by winning customers' acclaim as a true leaderin the global market.


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LGs VISION PICTURE

No. 2 Code of conduct of LG:


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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

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


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No.3 Management Principles

LG's management principles state the purpose of LG's business activities, and also providea basis for its operations. It embodies the key concepts of"Creating value for customers"and "Respecting human dignity."

LG believes that custom-ers make up the veryfoundation of our busi-ness. That is why LGplaces the highest priorityon serving customers,and encourages its peo-

ple to create true valuefor customers throughinnovation. This principleprovides a strong basisfor LG's operation that istargeted at winning thehearts of the customersby offering them truly in-novative products.

LG believes that thesource of its innovationlies in its people. "Re-specting human dignity"implies that LG valuesthe ingenuity and auton-omy of its people. It signi-fies that LG strives to

maximize capabilities ofits people, and helpsthem realize their poten-tial on the job. This prin-ciple is further reinforcedthrough LG's everydaymanagement practice ofrewarding its peoplebased on capabilities andperformance.


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FINANCIAL STATEMENT

Summarized Income Statement 04-05:-

Summarized Income Statement 07-08:-

(Unit : KRW 100 million) 2008 2007

Operating revenue 4,961 7,610

Operating expense 1,018 544

Operating income 3,943 7,066

Non-operating income 3,763 1,171

Non-operating expenses 320 1,769

Income before

income taxes7,386 6,468

Income tax expense 1,354 712

Net income 6,032 5,755


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GLOBAL REPORT

MobileSpa BathDonation

Openingof Chil-dren'sHospitalLong-TermCare Unit

On location at the WTCC - Spon-

soring the World's Top RacingEvent

Enjoying 'Four Giants'

World Cup with LGE

Twenty Elementary Schools Re-ceive 'Our Garden'

LG's Amazing Perfor-mance

Significant Innovation Toward In-creasing Customer Value

LG and Celebrity helpAlienated Youth

LG increases Brand Awarenesswith Africa Cup of Nations Spon-sorship

Kazakhstan, a shiningstar

Official Sponsorship of PDP TVfor ASEAN + 3 Summit Meeting

Free Medical Servicesin Africa
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Eco friendly activities of different LG Companies

LG Electronics

LG Electronics vows to observe the basic philoso-phy and principles of environmental managementto ensure sustainable development and improvequality of life for its customers.

LG Innotek

LG Innotek puts the environment and the peopleswelfare first in its efforts to develop technologies andin doing business. Based on this environmentallyfriendly mindset, we strive to step up our globalcompetitiveness.

LG Micron

LG Micron protects our environment and runs thecompany in an environmentally friendly manner. Allthe staff in LG Micron work on safety, health, envi-ronmental protection and energy saving.

Siltron

Siltron is putting all its efforts to minimize the envi-ronmental impact of its business activities and toprotect its employees and the residents near its fa-cilities from accidents.

LG Chem has been designating environmentally-friendly organizations, certificating environmentally-friendly managerial systems, conducting self-analysis, and executing preventive environmentalmanagerial evaluation as it fortifies its environmen-

tally-friendly managerial systems.
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LG Petrochemical

LG Petrochemical promises to maximize customers

satisfactionand to contribute to society. LG Petrochemical willprovide continualimprovement in environment, safety and health aswell as efficient use of energy through RC activities.

LG MMA

LG MMA has implemented self-controlled environ-mental management system based on the core val-ues of management for environment, safety andhealth, in addition to the collaboration of labor andmanagement.
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PRESS RELEASES

Sep 06, 2006 LG Electronics Completes Construction of Russian Plant

- The plant completes production triangle connecting Wroclaw,

Mlawa and Ruza to target Europe, Russia and the ...

Sep 06, 2006 LG.Philips LCD Receives BSC Hall of Fame Award

Seoul, Korea (September 6, 2006) - LG.Philips LCD (NYSE:LPL, KRX: 034220), one of the world's leading i...

Aug 29, 2006 LG Electronics Gearing Up for Next-Generation DVD Market

LG Electronics (LG), a global leader and technology innovatorin consumer electronics and mobile communication...

Aug 29, 2006 LG Mobile And DMC Continue Dream Team Partnership

London, 29 August 2006 LG Mobile (LG), a pioneer in con-sumer electronics and mobile phones, today an...

Aug 16, 2006 LG Unveils The UK's First 5 Mega-Pixel Digital Camera Phone

London, 27th July 2006 LG Mobile (LG) announces the first 5Mega-Pixel digital camera phone to arrive ...

Aug 15, 2006 LG Wins Three EISA Awards

LG Electronics (LG), a global leader and technology innovatorin consumer electronics and mobile communication...
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LG INDIA

LG Electronics India Pvt. Ltd., a wholly owned subsidiary of LG Electronics, South Korea

was established in January 1997after clearance from the Foreign Investment Promo-

tion Board (FIPB). LG set up a state-of-the art manufacturing facility at GreaterNoida, near

New Delhi, in 1998, with an investment ofRs 500 Crores.

LG corporate office is located at Plot no.51, Udyog Vihar, Kasna Road, Greater Noida, U.P,

India.

This facility manufactured Color Televisions, Washing Machines, Air-Conditioners and Mi-

crowave 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 of 83 LG stores across the country, of which 45 are shoppes and 38 are exclusive

stores. Brand shoppes will be placed in the premium segment and the target audience will

comprise buyers interested in premium and high end products.

LG Brand Shoppe 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 the LG products 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. 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,

home appliances, 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 13th anniversary this

year.


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LG Soft Indiathe innovation wing of LG Electronics in Bangalore is LG Electronics' larg-

est R&D centre outside Korea. We at LGSI focus on niche technology areas such as mo-

bile application development, digital video broadcast and biometrics software and support

LG Electronics with our expertise. Motivated by a passion for technology, a strong work cul-ture 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 expects the

sale of its products in India to up by 21 per cent in 2009. Moon Bum Shin, managing direc-

tor of LG Electronics India has said that the company has earmarked 5.8 billion rupees for

investment purpose 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 televisions, air conditioners and other household

goods in the Indian market was to the tune of 95 billion rupees ($2.4 billion) in 2008. As per

Shin's estimate, the sales in 2009 would be around 110 billion rupees.

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

cent of LG Electronics global revenues of $42 billion. The Indian branch of LG exports to 40

countries.

o India challenges

The challenges faced by LG when entered in Indian market

Low brand awareness about LG in India.

One of the last MNCs entered in India (Samsung, Panasonic entered in 1995 in In-

dia).

High import duty

Competition from local market players and other MNCs in consumer durable seg-

ment.

Price sensitiveness of the Indian consumer.


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LGEI over comes these challenges to emerge asInnovative 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 1999world cup followed it up in 2003 as well.

3. LG brought in four captains of the Indian cricket team to endorse its products. LG in-

vested 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 Mo-

hali Kolkata and Bhopal for CTVs. 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.

R&D potential

LG has the research and development facilities in Bangalore and Pune. Both the unit carry

out R&D department for the domestic as well as the parent company it also dose customize

R&D for the specific 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 than dumping stock on channel

partners.


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Product localization:-

1. Product localization is the key strategy used by the LG

2. 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 associa-

tion with cricket LG introduces cricket game in CTVs.

MAJOR KEY SUCCESS FACTORS

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.

2. Local and efficient manufacturing to reduce cost - To overcome high import du-

ties, LG manufactures PC monitors and refrigerators in India at its manufacturing

facility at Noida, Delhi.

3. Commissioned contract manufacturing at Mohali, Kolkata and Bhopal for CTVs.

4. Product localization - Product localization is a key strategy used by LG. It came

out with Hindi and regional language menus on its TV.

5. Regional distribution model - This has resulted in quicker rotation of stocks and

better penetration into the B, C and D class markets.

6. Leveraging Indias IT advantage - LG Electronics has awarded a contract to de-

velop IT solutions to LG Soft India (LGSI). The project involves development and

support for ERP, SCM, CRM and IT-enabled services for LG.


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0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

LG

SAMSUNG

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 -knowledgeDemographics

5. WinWin relationship with the trade partners

6. Customer is the king

7. Even BillingRoad 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 market share of consumer appliances and consumer electronic:-

LG position of CTV in various states in India


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0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

LG

SAMSUNG

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

LG

SAMSUNG

LG position of REF in various states in India

LG position of WM in various states in India


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0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

PHILIPS

LG

SAMSUNG

VIDEOCON

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

LG

SAMSUNG

VOLTAS

GODREJ

LG position of AC in various States in India

LG position of Audio & Home Theater in various in India


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0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

ANDHRA

PRADESH

ASSAM

ANDNORTHEAST

BIHAR

CHHAT

TISGARH

DELHI

GUJARAT

HARYANA

JHA

RKHAND

KARNATAKA

KERALA

MADHYA

PRADESH

MAHA

RASHTRA

ORISSA

PUNJAB

RA

JASTHAN

TAM

ILNADU

UTTARPRADESH(EAST)

UTTARPRADES

H(WEST)

WESTBENGAL

LG

PHILIPS

SAMSUNG

VIDEOCON

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

LG

SAMSUNG

KENSTAR

GODREJ

LG position of DVD in various in India

LG

position of

MWO in vari-

ous states in

India


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This analysis is based on the ORG survey conducted by LG which represent the LG po-

sition of different consumer durables in various states in India. I select different brand in dif-

ferent category as per the market share and the demand of product in market. This analysis

represents the LG market position during the period of March 2009. It shows that LG has

captured maximum 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 of its products in India to up by 21 per cent in 2009. Moon Bum Shin, managing direc-

tor of LG Electronics India has said that the company has earmarked 5.8 billion rupees for

investment purpose in India this year. The said money will be used to market as well as

manufacture new products.

LG Electronics, informed that its sales ofGSM mobile phones, color televisions, air

conditioners and other household goods in the Indian market was to the tune of 95

billion rupees ($2.4 billion) in 2008. As per Shin's estimate, the sales in 2009 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) per

cent of 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

million in 2009 from $230 million in 2008.

MANAGEMENT STRATEGY

LG is set to:

> Invest 3.2 trillion won in R&D, up by 20% from last year

> Invest 7.3 trillion won in facilities

> Attain sales of 92 trillion won, up by 10% from last year's 84 trillion won
http://www.lg.co.kr/eabout/investor/2006_management02.jsphttp://www.lg.co.kr/eabout/investor/2006_management03.jsphttp://www.lg.co.kr/eabout/investor/2006_management04.jsphttp://www.lg.co.kr/eabout/investor/2006_management04.jsphttp://www.lg.co.kr/eabout/investor/2006_management04.jsphttp://www.lg.co.kr/eabout/investor/2006_management03.jsphttp://www.lg.co.kr/eabout/investor/2006_management02.jsp


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Investing 10.5 trillion won, and achieving sales of 92 trillion won in 2008.

In 2008, LG is set to develop core technologies in electronics, chemicals andother mainstream businesses, and intensively foster new growth engines.

2008 Sales and Investment Plan

2008 Plan2007 Perfor-mance(estimated)

Change(%)

Total invest-

ment

KRW 10.5 tril-

lion

KRW 10.4 trillion

- R&D KRW 3.2 trillion KRW 2.7 trillion +20%

- Facility KRW 7.3 trillion KRW 7.7 trillion

Sales KRW 92 trillion KRW 84 trillion +10%

ExportUSD 46.4 bil-

lion

USD 40 billion +16%


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LG JAIPUR

LG Jaipur is the branch office of LGEIL. It is located in M I Road.

In 2004 LGEIL opened second factory which is located in Ranjangaon. This plant manufac-tures 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 crore till 2010.

LG India will become the export hub for LG Worldwide, catering to the Middle East and Afri-

can markets. The company aims to touch an export turnover of $3 billion by 2010 from In-

dia, which will contribute to 30 per cent of the Indian arm's turnover.

Jaipur, India, October 6, 2004 -- LGE announced 3 growth strategies aimed at the 1.1 bil-

lion people of India making the Indian market the second largest global production base fol-

lowing 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 electronics giant disclosed. in-

cluded: penetrates the south-western market of India through the new Jaipur plant near

Mumbai, the second largest city in India, in addition to the existing northern plant; installs a

new GSM handset production line in the new Jaipur plant and uses it as its second-largest

global GSM handset production line after the Qingdao plant in China; and expands the cur-

rent 750 R&D staff in India to 1,500 by 2007, striving to develop premium products and ex-

port 30% of India-manufactured products to Asia, Middle East and Africa markets by 2007.

LG Electronics second new plant in Jaipur, India covers a total area of 211,200 square me-

ters and is currently equipped with a production line to manufacture 600,000 TVs and one

million refrigerators a year. The company is set to add production 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 Jaipur

plant by early next year. The Pune GSM handset line envisages a capacity of manufactur-

ing 2 million handsets annually, and the company expands it to become a global GSM

handset production base with a capacity of an annual 10 million units by 2010.


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In connection with its three growth strategies for the Indian market, LG Electronics will in-

vest a total of US$150 million in establishing facilities and boosting R&D efforts in India by

2007. Specifically, it will invest US$53 million in the Jaipur second plant, another US$43

million in establishing the GSM line, and US$54 million in securing R&D manpower and

boosting other efforts. Through these strategies, LG Electronics aims to penetrate the glob-

al market by using China and India as its core production bases, while operating 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 the facility is of 1 lakh unit per year and it shall cater to the need of

the domestic markets. LG plans to upscale its operations to a figure of 2.5 lakh units a year

in the near future. The Jaipur plant in addition to its current manufacturing facility at GreaterNoida will enable the company to enhance its consumer reach and reiterate its commi t-

ment towards providing superior technology products to the India consumer.

The key strategiesbeing implemented include increasing the number of its re-

gional 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, Maha-

rashtra & 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 budg-

et of Rs 320 crore in 2008 with a 60:40 split in favor of below-the-line activities. Next year,

the company plans to increase the share of mass media even as overall marketing spends

would be raised by just about 10-15%.


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The organization structure is one branch manager, one chief accountant, and area sales

manager of CE, HA separate for GSM, Marketing manager for CE, HA and separate for

GSM. The Jaipur branch has warehouse at wagoli.

B.M

SR.BSIAccount

ASI

M.G A.M CAC A.M AC AM M.T AMGSM BSI GSMI.T.Z.M L.H.D

AM

DPT

BSI GSM


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Distribution and Marketing

The company has number of dealers and warehouses. They have LG exclusive shopper.

For the marketing 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.

6. For dealer relationship they arrange dealer meting at several time in the year

7. 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 for particularly 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)

Visit to warehouse of LG Jaipur

Logisticsis the art and science of managing and controlling the flow of goods, en-

ergy, 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 support. It involves the integration of information,

transportation, inventory, warehousing, material handling, and packaging. The oper-

ating responsibility of logistics is the geographical repositioning of raw materials,

work in process, and finished inventories where required at the lowest cost possible.

Logistics Management is that part of the supply chain, which plans, imple-

ments and controls the efficient, effective forward and reverse flow and storage of


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goods, services and related information between the point of origin and the point of

consumption in order to meet customers' requirements.

5Rs of Logistic followed by LG:

Right Time

Right Place

Right Condition

Right Cost

Right Handling

LG Jaipur Distribution

LG Jaipur comes under the western Distribution Region. This region has fol-

lowing

Jaipur

Kolapur

Sholapur

Satara

Sangli

The LG Factory is located at NOIDA & PUNE.

There are three types of Warehouse-

1. Mother Warehouse

2. Branch Warehouse

3. Spare part 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.


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A warehouse is a commercial building for 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 cities and towns. They come equipped

with loading docks to load and unload trucks; or sometimes are loaded directly from rail-ways, airports, or seaports. They also often have cranes and forklifts for moving goods,

which are usually placed on ISO standard pallets loaded into pallet racks.

The Jaipur warehouse is located near tonk. It is 13670 sq. feet in area.

In warehouse 7 locations is set up for the products.

Loc 1, Loc 2, Loc 3, Loc 4, Loc 5, Loc6, Loc 7

Loc 1 selling

Loc 2 - second sale

Loc 3 - insurance claim

Loc 4 - write off material

Loc 5 destroy the item

Loc 6 - court case material

Loc 7 - for repair

5s of warehouse, which the LG strictly follow:-

Sweeping

Sorting

Systematic Arrangement

Simplification

Self- discipline

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

delivery.


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1. Red CardTo stop the product going into market,

2. Green cardTo allow the product for delivery in market,

3. Yellow CardAfter 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 market

place, which the logistic department follows to fulfill the demand in the market at right time.

In LG, we have the following process, which is followed in logistic through ERP.

Order Processing

Invoicing

Indenting Report

Order Processing booking for dealers /distributors

Invoicing after billing process/bill generation

Indenting requirement (Pdt Unit to branch unit)

Report distributed to all

In warehouse, there are two mode of dispersion of product from one place to another

within:-

(a) Hydraulic

(b) Manual


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In addition, there are 35 fire extinguishers to prevent the accidental hazard within the ware-

house due to fire. These fire extinguishers are valid up to year 2011. One has to follow the

rule of NO Smoking 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.

4No inventory mismatch, shortage or excess monthly 100% physical stocktaking.

5Nil 30+ for FG 2, 3 & 5.

6Nil transit damage.

7Fileinsurance claim within 2 days. Settle all claim all within 30 days.

8No inter branch transfer without HO clearance.

9PSI feeding into system by 25th of every month. Ensure 90% accuracy.

10Apply physical FMFO.

Problem

1- In transit material damage checking.

2- Cost target achievement.3- Natural events tracking.

4- Fluctuation in demand-supply

Equipments

1- 100% bar code scanner.

2- ERP Invoice Generation Process.

3- Hydraulic Trolleys for material movement.


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4- Pallets for safety of material.

WAREHOUSE WITH THE EQUIPMENT

WAREHOUSE: REFRIGERATOR AND CTV SECTION

HUMAN RESOURCES

WHO WE LOOK FOR

1. Person who faithfully adheres to foundational knowledge

LG is pushing such intense hiring through its major subsidiaries, such as LG Electronics,LG Chem, LG.Philips LCD, and LG CNS, in North America, Europe, Japan, China, India,Russia, and other countries. LG will embark on a combined total of over 30 tours to hireover 600 globally talented individuals with a master's degree or a doctoral degree in thefield of engineering, and science and technology.


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2. Person who is highly creative

It is important to be widely knowledgeable. However, we still need young creative peoplewho are capable of using and applying their knowledge, to the creation of new values andideas. Talented individuals should tenaciously explore and seek out new things and sur-pass existing methods, not at desk but on the frontline, not by knowledge but by action, and

not using abstract concepts but with practical innovative passion.

3. Person with solid opinions

We need people who have their own clear viewpoints and yet get along well with others.We need people who possess the virtues of cooperation and accommodation. We needthose with sound thinking who will sacrifice even themselves, will participate in many activi-ties and thus contribute to the society. We also need people who are genuinely honest, areequitable, and do their best to serve customers. A corporation that aims to be a 'peoplecompany' needs all these talented people.

DEVELOPING TALENTED PEOPLE

Future competitiveness

Essential Education Programs by Rank

LG differentiates essential education programs by rank with a focus on five areas, the coreof which is pursuing LG management philosophy and corporate philosophy, and maximizingeducational outcomes.

LG differentiates essential education programs by rank with a focus on five areas, the coreof which is pursuing LG management philosophy and corporate philosophy, and maximizing

educational outcomes.


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ESSENTIAL EDUCATION SYSTEM BY RANK

LG executives and employees should complete essential educational courses by rank inorder to develop as core talented individuals with superior working abilities and baseknowledge.


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Salary System

The existing rank-based salary system has now been abolished. Salary is now categorizedas basic salary, performance-based salary, mandatory allowances, and special incentives.Gradually the performance-based salary aspect will be expanded.

As such, existing salary items based on seniority have been incorporated into the basic sal-ary, while the performance-based salary share of teams and individuals will be amended toincrease gradually, motivating employees to exercise their abilities to the greatest extent.


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Research Methodology:

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 conclu-

sion. 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 context of a research study and it explains why a particular method has been

used in the preference of the other methods.

Research design:

Research design is important primarily 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 to

study buyers behavior, consumption pattern, brand loyalty, and focus market changes. A

research design specifies the methods and procedures for conducting a particular study.

According to Kerlinger, Research Design is a plan, conceptual structure, and strategy ofinvestigation conceived as to obtain answers to research questions and to control variance.


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Title of the Study

Marketing Analysis on LG Consumer &Dealer Development

Duration Of The Project45 days including 8 working hours per day and Sunday was holiday.

OBJ ECTIVESExplained in detail next.

Scope of project

My job include while visiting the shops

1. Calculate the display share of the LG product in every shop which comes under

Jaipur region.

2. Collect the data of actual monthly sale of the LG product in every shop.

3. Check the availability of LG catalogue and the POPs in the store.

4. Find out the problems that the dealer are facing while sailing the LG product.

5. Find out the customer response for the LG product by asking the owner of the shop.

6. Find out the distributer name from whom they purchasing their product and also

weather they have direct dealership and which brand.

7. Check that demo calls are attended or not.


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LIMITATIONS

The limits of study are itself limitations:

Firstly, hard to include all users n dealers.

Secondly, employees part not considered.

More explained in next pages.


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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 descrip-

tion, the pits. So whats stopping the best companies from pulling out all the stops when it

comes to providing the best service? Do customers expect for too much? Or is it that in In-

dia they dont really care. Brand Equity fanned out to MNC as well as Indian consumer du-

rable companies, stockiest and dealers, analysts and market researchers to get a feel of

whats really keeping after sales from being used as a cutting edge marketing tool in push-

ing products across categories.

Customers support following the purchase of a product or service. In some cases, after-

sales service can be almost as important as the initial purchase. The manufacturer, retailer,

or service provider determines what is included in any warranty (or guarantee) package.

This will include the duration of the warranty traditionally one year from the date of pur-

chase, but increasingly two or more 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 additional training or helpdesk availability. Of equal im-

portance 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.

LG also had a big problem of after saleservice in India. During my project I also came to

know that after sale service becomes the big issue in Pune region. Customers as well as

dealer were facing the problem of after sale service. Because of this problem many dealer

in Jaipur region were not ready to sale LG product. So it becomes the big issue.

But LG has taken some solid steps towards improving customers perception and experi-

ence of after sales service. Because it very important in competitive market to provide the

best service.

L G Electronics has signed a memorandum of understanding with 23 Industrial Training In-

stitutes to strengthen its after sales service in India.

The company aims to recruit 10,000 people by the end of this year as a part of its branding

strategy to focus on service and move away from discounting.


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L G Electronics has identified eight states with high after sales service call rates to ink the

deals with the ITI. Y V Verma, director HR and management system, LG Electronics said,

"The Company was trying to find a solution for effective after sales service since last two

years. There is a huge need of trained manpower for the after sales service to align with the

company's expansion and focus on the GSM mobiles and the personal computer seg-

ments."

1. In the initial phase the company has entered into agreements with ITIs in the states

like Maharashtra, Gujarat, Delhi, Punjab, Assam, and Karnataka and is in the last

leg of signing with Uttar Pradesh.

2. L G Electronics, with 1200 service centers, has already recruited 300 students and

plans to beef 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 their training programmes,"

4. The company will invest Rs 8 crore (Rs 80 million) in employee development pro-

gramme this year with an aim to attain an 8 per cent attrition rate.

5. The company moved away from the discounting strategy since last year and is put-ting thrust on the quality and service in its brand communication to position LG as a

premium consumer electronics brand.

6. At the top, the Service Division in Korea reports to the Global CMO. (As mentioned

in Dermots public interview in ET on Wednesday). This shows commitment that

Service must be made into a marketing differentiator, and leveraged thus.

7. LG has the widest service network across the country; some estimates put it at a

significant multiple of service-infrastructure from our nearest competitor. While the

sale size may also be a nice 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 call you back in 2 hours (hence 2), set up an appointment for the next convenient

day for you (hence the first 1), and show up in the promised 1-hour slot (hence the

second 1). If the next convenient day for you is the next day, thats great too. Its a

disruptive action in an industry (including LG) having traditionally shied away from its

service responsibilities, and thus not leveraging any mileage from it.


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9. The company is promoting 211 through ATL, probably the first time after-sales ser-

vice is being communicated in this fashion by any product company. You may have

seen the TV commercial or heard the radio advert or seen the newspaper ad or in-

shop posters, both of which revolve around prompt response.

10.The first LG-owned service centre opened in Gurgaon. (Service in India generally

works through 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 a revenue center.

CONSUMER SURVEY DURING EXHIBITION

From 16th to 25th May, 2008 a consumer exhibition was organized at the college of Engi-

neering ground. The exhibition was sponsored by Sakal group in which number of compa-

nies participated.

EXHIBITIONS PICTURES SHOWING THE

Documents

Alok Sharma case study on LG products