Formulation of Marketing Strategies to improve market share of LG microwave Owen

Executive summary

Indian Consumer durables market used to be dominated by fewdomestic players like godrej Voltas allwyn and kalvinater. But postliberalization much foreign company have entered into Indian marketdethroning the Indian player and dominating Indian market the majorcategories in the market CTV, REFRIGRATOR, AIR CONDTIONERS ANDWASHING MACHINEIndia being the second largest growing economy with hugeconsumer class has resulted in consumer durables as the fastestgrowing industries in India LG, SAMSUNG the two Korean companieshas been maintaining the lead in the industries with LG being leaderin almost all the categories. The rural market is growing faster than the urban market, althoughthe penetration level is much lower .The Microwave oven segment isexpected to the largest contributing segment to the overall growththe industry. The rising income levels doubleincome families andconsumer awareness are the main growth drivers of the industries. 10

Consumer durables major LG Electronics India Pvt Ltd (LGEIL) willinvest near ly Rs 500 crore in India this year in research anddevelopment, brand-building and other marketing initiatives. The company, having a turnover of Rs 9,500 crore and market shareof 26 per cent, is investing Rs 360 crore on brandbuilding and othermarketing initiatives and around Rs 140 crore on research anddevelopment , besides launching new platforms in informationtechnology and related areas,LGs 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, includesthe companys response to customer complaint within two hours. Thefixing time for complaints varies from one hour to a maximum of 24hours. Scope of project This project gives me great exposure to the consumer durable marketbecause it includes product knowledge and the filed job in which Ihave visited the store comes under the region of Mumbai. During thisproject I also took part in the exhibition of LG which held for thepurpose branding and awareness of LG product. This project helps meto know the market practically. My job was during this project to seethe market share and also the display share of the LG product(Microwave oven) in the store. LG always insist the 50% display shareof LG product (Microwave oven) because LG believes that JO DIKHTAHAI WO BIKTA HAI.Key findings:11

1.By calculating the display share we found that in most of storeLG has 50% display share almost all categories.2.By the actual monthly sale of particular store we came to knowthe capacity of the store and how much product can they sale. 3. It helps us to know that weather dealer is capable of being adirect dealer of LG or not and it also helps to find out the newdealer who are capable of being the dealer of LG. 4. We also came to know while visiting the shops that there was bigproblem of after sale service. 5. Many dealers were facing the problem of after sale servicebecause 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 fewcompanies like Kelvinator, Godrej, Allwyn, and Voltas were themajor players in the consumer durables market, accounting for noless than 90% of the market. Then, after the liberalization, foreignplayers like LG, Sony, Samsung, Whirlpool, Daewoo, and Aiwa cameinto the picture. Today, these players control the major share of theconsumer durables market.Consumer durables market is expected to grow at 10-15% in20072008. It is growing very fast because of rise in livingstandards, easy access to consumer finance, and wide range of choice, as many foreign players are entering in the marketWith the increase in income levels, easy availability of finance,increase in consumer awareness, and introduction of new models, 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 dishwashersConsumer durables sector is characterized by the emergence of MNCs, exchange offers, discounts, and intense competition. Themarket share of MNCs in consumer durables sector is 65%. MNC'smajor target is the growing middle class of India. MNCs offersuperior technology to theConsumers whereas the Indian companies compete on the basis of firm grasp of the local market, their well-acknowledged brands, andhold over wide distribution network. However, the penetration levelof the consumer durables is still low in India.Classification of consumer durables sector 1. Consumer electronic include vcd/dvd, home theatre, musicplayer, color television, cameras, camcorders, portable audio, Hi-Fi,etc 2. White goods include dishwashers, air conditioners, heaters,washing machines, r efrigerators, vacuum cleaners, kitchenappliances, nonkitchen appliances, microwaves oven, built-inappliances, Tumble dryer, personal care product etc. 3. Molded luggage include plastics4.Clocks and watches5.Mobile phones 13

Scope 1. In term of purchasing power parity (ppp), India is the 4th largesteconomy in the world and overtake Japan in the near futurebecome the 3rd largest. 2. Indian consumer durable market is expected to reach $400billion by on 2010 3. India has the youngest population amongst the major countries. There are lot of people in the different income categories nearlythe two third population is below the age of 35 and nearly 50% isbelow 25.4.There are 56 million people in middle class, who are earningus$4,400US$21,800 a year. And there are 6 million richhousehold in India. 5. The upper-middle and high-income household in urban areas areexpected to grew to 38.2 million in 2007 as against 14.6 millionin 2000 . Opportunity 1.In India the penetration level of white goods is lower ascompared to other developing countries.2.Unexploited rural market.3.Rapid urbanization. 4. Increase in income level, i.e. increase in purchasing power of consumers.5.Easy availability of finance. Threats 14

Higher import duties on row materials.Cheap imports from Singapore, China and from other Asian countries. Brands in consumer electronics sector MNCs NATIONALREGIONALLG)SAMSUNG)KOREA SAMSUNG SOLO HYUNDAI) VIDEOCON VJ-SERIES TCL)CHINA GODREJ GMC30EHAIER) VOLTAS WESTONPHILIPS)HOLLAND HD 4495PANASONIC ) ONE TOUCH SENSORHITACHI)SANSUI)JAPAN MW8554WWHIRLPOO L) GR3345WELECTROLUX TODAY Consumer durables sector is characterized by the emergenceof MNCs, exchange offers, discounts, and intense competition. Themarket share of MNCs in consumer durables sector is 65%. MNC'smajor target is the growing middle class of India. MNCs offer superiortechnology to theLG, SAMSUNG the two Korean companies has been maintainingthe lead in the industries with LG being leader in almost all thecateg ories. 15

The company, having a turnover of Rs 9,500 crore and market shareof 26 per cent, is investing Rs 360 crore on brand-building and othermarketing initiatives and around Rs 140 crore on research anddevelopment , besides launching new platforms in informationtechnology 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 Global2.LG India3.LG MumbaiHistory of company The company was originally established in 1958 as Gold Star,produci ng radios, TVs, refrigerators, washing machines, and airconditioners. The LG Group was a merger of two Korean companies, Lucky and GoldStar, from which the abbreviation of LG was derived. The current"Life's good" slogan is a acronym. Before the corporate Name change 16