Project Report on

Formulation of Marketing Strategies to improve market share of LG microwave

Owen

Submitted by

RAJESH L. KAMBLE

REG NO:-520951125

2010-2011

Sikkim Manipal University

India.

1

karRox Technologies Ltd.

Center code no:-02754

Project Report

Formulation of marketing strategies to improve market share of LG microwave Owen

Submitted in partial fulfillment of the requirement for the degree of masters of business administration [marketing] of Sikkim Manipal University. India

By

Rajesh L. kamble

Reg no:-520951125

2010 - 2011.

Sikkim Manipal University of Health, Medical & Technological sciences, Distance

2

education wing syndicate house, manipal – 576104

DECLARATION

I hereby declare that the project report entitled Formulation of marketing strategies to improve market share of LG Microwave Owen submitted in partial fulfillment of the requirement for the degree of masters business of administration to Sikkim manipal university, India is my original work and not submitted for the award of any other degree, diploma, fellowship or any other similar title prize.

Place: - Mumbai Rajesh L. Kamble

Date: - Reg no:-520951125

3

Examiner’s Certification

The project report of Mr. Rajesh L. Kamble entitled Formulation of marketing strategies to improve market share of LG microwave oven is approved and is acceptable in quality and form.

Internal Examiner External Examiner

Name: - Name:-

Designation: - Designation:-

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UNIVERSITY STUDY CENTER CERTIFICATION.

This is to certify that the project report entitled Formulation of marketing strategies to improve market share of LG Microwave oven. Submitted in partial fulfillment of the requirements for the degree of masters of business administration of Sikkim Manipal University of health, medical and technological sciences.

Mr. Rajesh L. Kamble has work under my supervision and guidance and that no part of this report has been submitted for the award of any title or prize and that the work has not been publish in any journal or magazine

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Reg no.520951125 Certified

Guide name

Acknowledgement

I cannot adequately express my sense of gratitude to my guide for his constant guidance encouragement and support

throughout the project and giving me his valuable time.

Also I would like to thank my classmate, my colleagues in office who are working in related industry and have provided me

valuable information and help to complete the study.

Rajesh L. kamble

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Formulation of Marketing Strategies to Improve Market Share of LG Microwave

Ovens.

Evolution…..Trend…...and Future…..In India

In partial fulfillment for the requirement for masters in business administration in

marketing

2010-2011

7

Reg no.-520951125

MBA

Sikkim Manipal University.

TABLE OF CONTENT

Sr.no

Content Page.no.

01 EXECUTIVE SUMMARY

02 SCOPE OF PROJECT

03 INTRODUCTION

04 HISTORY OF COMPANY

05 LG GROUP

06 LG BRAND IDENTITY

07 CODE OF CONDUCT

08 LG : CHALLENGES IN INDIA

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09 RESEARCH AND DEVELOPMENT

10 STRATEGIES ADOPTED

11 CUSTOMER SERVICE

12 OBJECTIVE OF RESEARCH

13 RESEARCH METHODOLOGY

14 DATA COLLECTION

15 SAMPLING METHDOOLOGY

16 DATA ANALYSIS

17 CUSTOMER SERVEY FINDINGS

18 RECOMMENDATION AND SUGGESTION

19 BIBILOGRAPHY

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Executive summaryIndian Consumer durables market used to be dominated by few

domestic players like godrej Voltas allwyn and kalvinater. But post

liberalization much foreign company have entered into Indian market

dethroning the Indian player and dominating Indian market the major

categories in the market CTV, REFRIGRATOR, AIR CONDTIONERS AND

WASHING MACHINE

India being the second largest growing economy with huge

consumer class has resulted in consumer durables as the fastest

growing industries in India LG, SAMSUNG the two Korean companies

has been maintaining the lead in the industries 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 Microwave oven 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.

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Consumer durables major LG Electronics India Pvt Ltd (LGEIL) will

invest nearly Rs 500 crore in India this year in research and

development, brand-building and other marketing initiatives.

The company, having a turnover of Rs 9,500 crore and market share

of 26 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,

LG’s innovative ‘211 campaign’ to provide quality after-sales service,

will also be expanded from the existing 22 to 40 cities by next month,

The campaign, for which IT infrastructure has been set up, includes

the company’s response to customer complaint within two hours. The

fixing time for complaints varies from one hour to a maximum of 24

hours.

Scope of project

This project gives me great exposure to the consumer durable market

because it includes product knowledge and the filed job in which I

have visited the store comes under the region of Mumbai. During this

project I also took part in the exhibition of LG which held for the

purpose branding and awareness of LG product. This project helps me

to know the market practically. My job was during this project to see

the market share and also the display share of the LG product

(Microwave oven) in the store. LG always insist the 50% display share

of LG product (Microwave oven) because LG believes that “JO DIKHTA

HAI WO BIKTA HAI”.

Key findings:-

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1. By calculating the display share we found that in most of store

LG has 50% display share almost all categories.

2. By the actual monthly sale of particular store we came to know

the capacity of the store and how much product can they sale.

3. It helps us to know that weather dealer is capable of being a

direct dealer of LG or not and it also helps to find out the new

dealer who are capable of being the dealer of LG.

4. We also came to know while visiting the shops that there was big

problem of after sale service.

5. Many dealers were facing the problem of after sale service

because there is no follow up calls from LG.

6. Demo calls also not done properly.

INTRODUCTION

Before the liberalization of the Indian economy, only a few

companies like Kelvinator, Godrej, Allwyn, and Voltas were the

major players in the consumer durables market, 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 10-15% in

2007-2008. It is growing very fast because of rise in living

standards, easy access to consumer finance, and wide range of

choice, as many foreign players are entering in the market

With the increase in income levels, easy availability of finance,

increase in consumer awareness, and introduction of new models, 12

the demand for consumer durables has increased significantly.

Products like washing machines, air conditioners, microwave ovens,

color televisions are no longer considered 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 consumer 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 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.

Classification of consumer durables sector

1. Consumer electronic include vcd/dvd, home theatre, music

player, color television, cameras, camcorders, portable audio, Hi-Fi,

etc

2. White goods include dishwashers, air conditioners, heaters,

washing machines, refrigerators, vacuum cleaners, kitchen

appliances, non-kitchen appliances, microwaves oven, built-in

appliances, Tumble dryer, personal care product etc.

3. Molded luggage include plastics

4. Clocks and watches

5. Mobile phones13

Scope

1. In term of purchasing power parity (ppp), India is the 4th largest economy in the world and overtake Japan in the near future become the 3rd largest.

2. Indian consumer durable market is expected to reach $400 billion by on 2010

3. India has the youngest population amongst the major countries. There are lot of people in the different income categories nearly the two third population is below the age of 35 and nearly 50% is below 25.

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

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

Opportunity

1. In India the penetration level of white goods is lower as

compared 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

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Higher import duties on row materials.

Cheap imports from Singapore, China and from other Asian countries.

Brands in consumer electronics sector

MNCs NATIONAL REGIONALLG )SAMSUNG ) KOREA SAMSUNG SOLOHYUNDAI ) VIDEOCON VJ-SERIES

TCL ) CHINA GODREJ GMC-30EHAIER ) VOLTAS WESTON

PHILIPS ) HOLLAND HD 4495

PANASONIC ) ONE TOUCH SENSORHITACHI )SANSUI ) JAPAN MW8554W

WHIRLPOOL ) GR3345WELECTROLUX

TODAY Consumer durables sector is characterized by the emergence

of MNCs, exchange 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 offer superior

technology to the

LG, SAMSUNG the two Korean companies has been maintaining

the lead in the industries with LG being leader in almost all the

categories.

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The company, having a turnover of Rs 9,500 crore and market share

of 26 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,

LG Electronics is one of the leading companies in the field of

electronics with a global presence in many countries. . Before briefing,

I have divided the introduction part into three main sub parts.

1. LG Global

2. LG India

3. LG Mumbai

History of company

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

Star, from which the abbreviation of LG was derived. The current

"Life's good" slogan is a acronym. Before the corporate Name change

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to LG, household products were sold under the Brand name of Lucky,

while electronic products were sold under the brand name of Gold

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

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

Electronics of the United States.

Global Operation

LG Electronics is playing an active role in the world market with its

assertive global business policy. As a result, LG Electronics controls

110 local subsidiaries in the world with around 82,000 executive and

employees.

LG Group

1. LG. Philips

2. LG Chemical

3. LG Telecom

4. LG Powercom

5. LG Twins

6. LG Dacom

Business areas and main products

Mobile communications

(a) CDMA Handsets,

(b) GSM Handsets,

(c) 3G Handsets,

(d) Cellular Phones

Digital appliance

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a) Air Conditioners,

b) Refrigerators,

c) Microwave Ovens,

d) Washing Machines,

e) Vacuum Cleaners,

f) Home Net,

g) Compressors for Air Conditioners and Refrigerators

Digital display

a) 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 Monitors

Digital media

a) Home Theater Systems,

b) DVD Recorders,

c) Super Multi DVD Rewriters,

d) CD±RW,

e) Notebook PCs,

f) Desktop PCs,

g) PDAs,

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h) PDA Phones,

i) MP3 Players,

j) New Karaoke Systems,

k) Car Infotainment

LG BRAND IDENTITY:-

The brand of LG is delightfully smart. LG strives to enhance the

customer’s life and lifestyle with intelligent features, institutive

functionality and exceptional performance.

The brand platform:-

The LG brand is composed of four basic elements –

1. Value

2. Promise

3. Benefits

4. Personality

The Brands core Value that never changes.

a. Trust,

b. Innovation,

c. People

d. Passion

The benefits that are consistently delivered to the customer includes

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Reliable products

Simple design

Ease of use

Extraordinary Experience

Personality describes the human characteristic that are expressed to

the customer through

Trustworthy, Considerate

Practical, 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 more to 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 is very helpful in the

overall growth of personality.20

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.

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 supplying 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-DO” Management is LG’s 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 development.

c) Equal opportunities

d) Equal Treatment

Management Principle - Creating value for customer

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

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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

LG INDIA:

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

Electronics, South Korea was established in January 1997 after

clearance from the Foreign Investment Promotion Board (FIPB). LG set

up a state-of-the art manufacturing facility at Greater Noida, near

Delhi, in 1998, with an investment of Rs 500 Crores.

LG corporate office is located at Plot no.51, Udyog Vihar, Kasna Road,

Greater Noida, India.

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This facility manufactured Color Televisions, Washing Machines, Air-

Conditioners and Microwave 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 11th anniversary this year.

LG Soft India the innovation wing of LG Electronics in Bangalore is LG

Electronics' largest R&D centre outside Korea. We at LGSI focus on

niche technology areas such as mobile application development,

digital video broadcast and biometrics software and support LG

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Electronics with our expertise. Motivated by a passion for technology,

a strong work culture and loyalty to the organization, we are

determined to see LG become one of the top three brands globally.

Prominent consumer electronic company, LG Electronics Inc. has said

that it expects the sale of its products in India to up by 15 per cent in

2008. Moon Bum Shin, managing director of LG Electronics India has

said that the company has earmarked 4.8 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 2007. As

per Shin's estimate, the sales in 2008 would be around 110 billion

rupees.

In order to achieve its target, Shin said LG Electronics will concentrate

on catering to the high-end consumer market which will help boost

sales this year. India churns out six (6) per cent of LG Electronics

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

countries.

India challenges

The challenges faced by LG when entered in Indian market

1. Low brand awareness about LG in India.

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

entered in 1995 in India).

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3. High import duty

4. Competition 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 than US$ 8 million on advertising

and marketing in this sport.

4. LG has differentiated its product using technology and health

benefits. CTV has “Golden eye technology” Air conditioner has

“Health air system” and microwave ovens have the “Health wave

system”.

Local and efficient manufacturing to reduce the cost

To overcome high import duties LG manufactures TV refrigerator in

India at manufacturing facility at Noida and Pune. LGEI had already

commissioned contract manufacturing at Mohali Kolkata and Bhopal

for 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

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LG has the research and development facilities in Bangalore and

Mumbai. 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 then dumping

stock on channel partners.

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 association with cricket LG introduce cricket

game in CTVs

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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 duties, 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 India’s IT advantage - LG Electronics has awarded a

contract to develop 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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Strategies adopted by the organization

LG follows 10 commandments which are as follows.

1. Foster working environment-5S Environment

2. Fast execution is key to success

3. Transparent and fast communication-open communication

4. Update market -knowledge –Demographics

5. Win –Win relationship with the trade partners

6. Customer is the king

7. Even Billing –Road to ach supplier A

8. Be in touch with the market (70% Market, 30% Office).

9. Plan and Execute annual marketing Calendar-Time to market

10. Display share of 50% -to get 50% consumer share.

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LG market share of LG Microwave ovens in its consumer segments:-

LG position of Microwave oven in various states in India

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

represent the LG position of different consumer durables in various 30

states in India. I select different brand in different 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 2008. It

shows that LG has captured maximum market share almost in every

category. LG and Samsung have the maximum market in Microwave

oven 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 15 per cent in

2008. Moon Bum Shin, managing director of LG Electronics India has

said that the company has earmarked 4.8 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 of Microwave oven and other

household goods in the Indian market was to the tune of 95 billion

rupees ($2.4 billion) in 2007. As per Shin's estimate, the sales in 2008

would be around 110 billion rupees.

In order to achieve its target, Shin said LG Electronics will

concentrate on catering to the high-end consumer market which will

help boost sales this year. India churns out six (6) 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 2008 from $230

million in 2007.

.The key strategies being implemented include increasing the number

of its regional offices from six to eight. LG has split its southern

regional office into two, one comprising the states of Tamil Nadu and

Kerala and the other consisting of Andhra Pradesh and Karnataka. In

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addition, it has split one of its northern regional offices by making

Uttar Pradesh a separate region after spinning it out from Delhi NCR.

The other four regional offices take care of East, Gujarat and Madhya

Pradesh, Maharashtra & Goa and Punjab, Haryana & Rajasthan

respectively.

In the coming year, LG is also repositioning its marketing spends,

resulting in a significant increase in its mass media expenditure for

better brand visibility. LG had a marketing budget of Rs 320 crore in

2007 with a 60:40 split in favor of below-the-line activities. Next year,

the company plans to increase the share of mass 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 shopee. 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 meeting 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.32

9. LG also uses the radio FM for the promotion activities.

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

CUSTOMER SERVICE

The best and the biggest international brands are here in India –but

the irony if it all: where is the after-sales-service? So integral to a

brand, so critical for its success and so taken for granted in developed

markets! In India, after sales service is, for want of a better

description, the pits. So what’s stopping the best companies from

pulling out all the stops when it comes to providing the best service?

Do customers expect for too much? Or is it that in India they don’t

really care. Brand Equity fanned out to MNC as well as Indian

consumer durable companies, stockiest and dealers, analysts and

market researchers to get a feel of what’s really keeping after sales

from being used as a cutting edge marketing tool in pushing products

across categories.

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 purchase, but increasingly two or more year’s

maintenance and/or replacement policy, items included/excluded,

labor costs, and speed of response. In the case of a service provider, 33

after-sales service might include additional training or helpdesk

availability. Of equal importance 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 sale service in India. During my

project I also came to know that after sale service becomes the big

issue in Mumbai region. Customers as well as dealer were facing the

problem of after sale service. Because of this problem many dealer in

Mumbai region were not ready to sale LG product. So it becomes the

big issue.

But LG has taken some solid steps towards improving customer’s

perception and experience 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 Institutes 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.

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 segments."

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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. LG Microwave oven, 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 programme,"

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

development programme 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 putting thrust on the quality and service in its

brand communication to position LG as a premium consumer

Microwave oven.

6. At the top, the Service Division in Korea reports to the Global

CMO. (As mentioned in Dermot’s 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.

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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,

that’s great too. It’s a disruptive action in an industry (including

LG) having traditionally shied away from its 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 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 LG’s

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.

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 Microwave oven and also

calculate the display share.

Find out the positional dealer who can sale the LG Microwave

oven in large volume.

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The main objective of research was to identify potential dealer

and development these dealer. So LG can make them their

direct dealer.

This will ease the dependence on the some big dealer like

Maharashtra and Mahaveer electronics.

Find out the problem faced by 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 the consumer?

Do the consumers prefer the financial facility for buying

consumer durable?

How frequently consumers change the consumer durable?

To enhances the knowledge of consumer durable market.

To increases the knowledge consumer durable product of LG.

To enhances the knowledge about the marketing and branding

activity.

Research Methodology:

Research methodology is considered as the nerve of the project.

Without a proper well-organized research plan, it is impossible to

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complete the project and reach to any conclusion. The project

was based on the survey plan. The main objective of survey was

to collect appropriate data, which work as a base for drawing

conclusion and getting result.

Therefore, research methodology is the way to systematically solve

the research problem. Research methodology not only talks of the

methods but also logic behind the methods used in the 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 buyer’s 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 of

investigation conceived as to obtain answers to research questions

and to control variance.

Types of research are:38

• Descriptive Research

The type of research adopted for study is descriptive. Descriptive

studies are undertaken in many circumstances when the researches is

interested to know the characteristic of certain group such as age,

sex, education level, occupation or income. A descriptive study may

be necessary in cases when a researcher is interested in knowing the

proportion of people in a given population who have in particular

manner, making projections of a certain thing, or determining the

relationship between two or more variables. The objective of such

study is to answer the “who, what, when, where and how” of the

subject under investigation. There is a general feeling that descriptive

studies are factual and very simple. This is not necessarily true.

Descriptive study can be complex, demanding a high degree of

scientific skill on part of the researcher.

Descriptive studies are well structured. An exploratory study needs to

be flexible in its approach, but a descriptive study in contrast tends to

be rigid and its approach cannot be changed every now and then. It is

therefore necessary, the researcher give sufficient thought to framing

research.

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 and Longitudinal

Sectional. A cross sectional study is concerned with a sample of

elements from a given population. Thus, it may deal with household,

dealers, retail stores, or other entities. Data on a number of

characteristics from sample elements are collected and analyzed.

Cross sectional studies are of two types: Field study and Survey.

Although the distinction between them is not clear- cut , there are

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some practical differences, which need different techniques and skills.

Field studies are ex-post-factor scientific inquiries 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 major strength of survey research is its wide scope.

Detail information can be obtained from a sample of large

population .Besides; it is economical as more information can be

collected per unit of cost. In addition, it is obvious that a sample

survey needs less time than a census inquiry. Descriptive research

includes survey and fact finding enquiries of different kinds of the

major purpose. Descriptive research is description of the state of

affairs, as it exists at present. The main characteristic of this method

is that the researcher has no control over the variables; he can only

report what has happened or what is happening. The methods of

research utilized in descriptive research are survey methods of all

kinds including comparative and co relational methods. The reason for

using such needs to be flexible in its approach, but a descriptive study

in contrast tends to be rigid and its approach cannot be changed

every now and then.

Data collection methods:

After the research problem, we have to identify and select which type

of data is to research. At this stage; we have to organize a field survey

to collect the data. One of the important tools for conducting market

research is the availability of necessary and useful data.

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Primary data: For primary data collection, we have to plan the

following four important aspects.

Sampling

Research Instrument

Secondary Data - The Company’s profile, journals and various

literature studies are important sources of secondary data.

Data analysis and interpretation

1. Questionnaires

2. Pie chart and Bar chart

Questionnaires:

This is the most popular tool for the data collection. A questionnaire

contains question that the researcher wishes to ask his respondents

which is always guided by the objective of the survey.

Pie chart:

This is very useful diagram to represent data, which are divided into a

number of categories. This diagram consists of a circle of divided into

a number of sectors, which are proportional to the values they

represent. The total value is represented by the full create. The

diagram bar chart can make comparison among the various

components or between a part and a whole of data.

Bar chart:

This is another way of representing data graphically. As the name

implies, it consist of a number of whispered bar, which originate from 41

a common base line and are equal widths. The lengths of the 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. The sample 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 the Customer.

No. of questions in questionnaires for customer: 06

No. of question related to LG product: 03

No. of people met during the research: 200

No. of respondents during the research: 50

Sample unit

Professionals, Business man,

Employees, House wife,

Working women, Students

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Analysis:

Q1. Have you purchased any consumer durable during Exhibitions?

Yes

No

Inferences

1. 65 % of Customer has 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 they want to know that weather

there is actual price difference in exhibition and shop or not.

4. Consumer also wants to compare to the different brand which

are available in the exhibition.

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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

Service

Durability

Inference

1. 30% of customer gives importance to price. So it shows that

Indian consumers are very price sensitive. 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 they are also want best brand in best

price.

3. 19% to product feature Service 16% and durability 9% Service is

also a big factor for the customer they are less interested in the

durability.

Q3. From where you prefer buying consumer durables

Exhibitions

Co. shoppe

Showroom

Inference:

1. A majority of customers prefer to buy from showrooms. Very less

proposition of customers buys from Exhibitions.

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2. 47% customers are prefer to buy from the showrooms because

the showrooms are more convenient 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 reasons

Attractive Price

Service

Demonstrations

Offers

Inference

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1. 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 these convenient store may provide good after

sell service.

3. Customer also thinks that there is more chance to bargain and

they can get more discounts in these showrooms.

4. Price also a factor that attract the customer in these showrooms.

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

1-3 years

3-5 years

5-10 years

More than 10 years

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INFERENCE

1. Customers prefer to change consumer durables within 5-10

years. In India people do not change consumer durable

frequently.

2. 23% customers do not change their consumer durable within 10

year.

3. It represent that Indian consumer do not prefer to change their

consumer durable frequently.

CUSTOMER SURVEY FINDINGS

1. Secondary supports play an important role in the customers

mind and create awareness among the customers. The

secondary support includes Demonstration, Exhibition & Even

Sponsors.

2. From the survey it was found out that the majority of customers

don’t buy LG Microwave oven from 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 is important .Beside convenience and other

factors service is key factor.

4. Also majority of customers do not want any financing scheme for

purchasing the LG Microwave oven.

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5. There was heavy rush on weekends so large numbers of ISD’s

were appointed that day. Also the live demo calls helps in selling.

Exchange offers also generate sale.

6. Customers are also now very choosy in buying the product and it

is important for the company to make loyal customer of their

brand.

7. In survey we found that LG Microwave oven has captured

maximum market share in every category. LG Microwave oven

dominates CTV, LCD, and Refrigerator, and Washing machine,

category.

8. LG and Samsung have bottle neck competition in Microwave

oven category.

9. The product is well aware and it is on top of mind of customer.

10. Customers are also now very choosy in buying the product

and it is important for the company to make loyal customer of

their brand.

RECOMMENDATIONS AND SUGGESTIONS

1. Exhibitions do not help to generate so much sells but they should

be conducted regularly. This helps in generating awareness

regarding the product in customers which ultimately helps in

sales.

2. Also it is helps in advertising for the new products. Like in this

exhibition new LG (LG LRM2060) 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 “JO DIKHTA HAI WO BIKTA HAI”.

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4. Company should try to improve service. No doubt the company

products have technically edge over competitors but in long run

it may hamper the company’s profit.

5. Company should concentrate more on its major drivers. Branding

and promotions should be done effectively as it creates a long

lasting image in the mind of customers.

6. Company should also cater to the needs of sub dealers as some

of the sub dealers have potential of high sales.

LIMITATIONS

Every study has certain limitations. In my study, also there were

certain limitations, which I could not able to solve.

1. The research was conducted in a very small area.

2. My research work period witness the biggest ups and downs in

product sale of different brands, which affected the perception of

the customer. This was biggest drawback of my study.

3. Time factor was also important for me. I had only 60 days to

complete my research, for which a full-fledged report was

insufficient for me.

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4. The customer filled the questionnaire mostly in careless manner,

so it was difficult to make them hold for time.

5. I had only found the upper-middle class family to fill up the

questionnaire, 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.

My study is not recognizable in whole INDIA as well as outside

Ranchi due to the above limitations and less area coverage.

BIBLIOGRAPHY

www.lgindia.com

www.google.com

www.wikipedia.com

Business world

Business today

LG magazine

Economics times News paper

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Times of India

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