Sales & Distribution Project LG-SONY

SALES AND DISTRIBUTION
PROJECT
Sales (Pre & Post) & Distribution’ effectiveness:

A comparative study of
Sony & LG
Televisions
IIPM Satabri Page 1

Executive Summary
This project aims to study the distribution channels, sales
network and service patterns of the consumer durable market
(Television) through an analytical and comparative study of two
leading companies- LG Electronics India Ltd. (LGEIL) and Sony
India Pvt. Ltd. The project also tries to bring out the
shortcomings, if any, in the present system and thus
recommends suggestions to improve the same. These
suggestions are based on the market research conducted by
our group.
The project was prepared in accordance to the guidelines

provided by our group mentor Prof. Maninder Singh and the
company officials we contacted during the industry research.
This project report also contains the valuable insights provided
to us by the channel Partners. Two company officials from each
company and 6 channel members were contacted during this
project.
The project outlines the television market in country. We have

also provided a brief history of both the companies we have
chosen. Further this project explains the distribution pattern of
these companies the market presence and the reasons for their
present position in the market.
IIPM Satabri Page 2

We have also tried to explain the various problems
encountered by the end consumers and provided suggestions
which were based on a market research conducted on a sample
size of 225.
IIPM Satabri Page 3

Acknowledgments
We are very thankful to the entire dealer, service, and sales network of , LG
Electronics India Pvt. Ltd, Delhi , without which completion of this project would not
have been possible.
We are extremely grateful to Mr. Rishi Vasudeva (Area Manager, LG Electronics

India Pvt. Ltd. Delhi), Mr. Bharat Sethi (Deputy Manager, LG Electronics India Pvt.
Ltd. Delhi) and Mr. Syed Asif Ali (Executive, SONY India Pvt. Ltd. Delhi) Mr.
Amorinder Chettri, (Territory Incharge, SONY India Pvt. Ltd. Delhi) for sharing with
us all the details of the project and providing us with valuable insights about sales,
distribution & servicing function. We would like to thank them for the patience shown
by them and being of such a great help to all our queries.
We would also like to express our gratitude towards our professors, Prof. Maninder
Singh, for giving us an opportunity to do this project on sales and distribution and for
being the guiding light through the completion of this project.
IIPM Satabri Page 4

CONTENTS
1. Executive Summary 2
2. Acknowledgement 3
3. Methodology 5
4. Television Industry in India 8
5. Company Background (LG) 11
6. Distribution network 13
7. LG Channel Partners 14
8. Channel Conflicts And Corporations 18
9. Company Background (Sony) 19

10.Distribution Network 22
11.Sony Channel Partners 23
12.Channel Conflicts And Corporations 25
13.Findings 26
14.Conclusions 37
15. ANNEXURE- 1 38
16. ANNEXURE- 2 41
17.ANNEXURE- 3 44
IIPM Satabri Page 5

IIPM Satabri Page 6
Methodology
The focus point of this research was to do analytical and
comparative study of the sales, service and distribution
function of the two brands of the television makers, the chosen
brands were:
1. LG
2. SONY
Information Sources
Primary Data Sources :-
➢ LG
➢ Sony
➢ Area sales manager
➢ Dealers
Secondary Data Sources :-
➢ www.LG.com
➢ www.sony.co.in
➢ www.ximb.ac.in
IIPM Satabri Page 7

Data Collection Tools
➢ Interviews
➢ Questionnaires
Sample Size Used
The sample size for the dealers was 6 in number while the
sample size for sales people was 4.
SONY (dealers) - 3
SONY (sales people) – 2
LG (dealers) – 3
LG (sales people) – 2
LIMITATIONS:
It was difficult to ask for time required for a detailed discussion

on the questionnaire & therefore several aspects of the
questionnaire were answered briefly.
The company officials did not divulge details about competitive

sales policies, strategies & certain financial terms with dealers
as they find it to be a confidential piece of information of the
company.
IIPM Satabri Page 8

Television Industry in India
Today India is being referred as to land of opportunities for television
manufactures. The trends and opportunities within the India market and
predict that by 2012, LCD (Liquid Crystal Display) shipments will surpass
those of CRT (Cathode Ray Tube) TVs in India.
India has the second largest population in the world and an annual GDP
growth rate of more than 8 per cent from 2002 to 2012, with a TV market that
is projected to be 1.3 crore (13 million) units in 2008. CRT TV accounts for
92.9 per cent of those units in 2008, followed by LCD TV with 6.6 per cent and
PDP (Plasma Display Panel) TV with 0.5 per cent. However, Display search
finds that the India flat panel TV market is just at the beginning of a real
growth curve, with Y/Y growth of more than 100 per cent expected for each of
the next five years. Growth will be driven by enhanced purchasing power, the
digital broadcast (DTH, IPTV, STB cable) transition as well as consumer
awareness and affordability of flat panel TVs. India's growing upper middle
class is projected to be the greatest source of LCD TV purchasing power.
Display Search analyses the favourable demographics where more than 23M
Indians—greater than the entire population of Australia—will enter this
demographic in the next five years.
Meanwhile, major brands like Samsung, LGEI, Sony and Philips and Indian
local brands like Videocon and Onida are all focusing promotional efforts
around LCD TV. Several Chinese brands are also targeting India with their
first exports.
Other key findings in the report include:
IIPM Satabri Page 9

 Among the imports of LCD TV into India, approximately 25 per cent were
imported in as CBU (Complete Built Unit) and 75 per cent were imported as
SKD (Semi-Knock Down) or CKD (Complete Knock Down).
 In 2007, the leading India LCD TV brands were Samsung, with more than
30 per cent share, followed by Sony (19 per cent), and LG (16 per cent). The
leading PDP TV brands are LGE, Samsung and Panasonic. LGE also leads
the CRT TV market in India with more than 25 per cent market share, followed
by Samsung and Videocon.
 Thailand has a special FTA (Free Trade Agreement) with India on duty
benefits. Therefore, companies like Sony and Panasonic are making LCD TVs
in Thailand and then shipping them to India.
 21" flat CRT TVs have a 55 per cent share of the total CRT TV market in
India.
 There are still some concerns about India's LCD TV market growth: poor
power supply; vague progress towards India digital TV broadcasting; a
complex TV import-duty structure; and regulations that are very complicated
and very inefficient.
 In 2008, the share of 32" will be more than 45 per cent in India LCD TV
market, followed by 20-26" with 31 per cent share. 40-47" accounts for only 15
per cent in India LCD TV market.
 CRT TV OEM is a key business in India as many brands ship components

into the country and then subcontract to local OEM makers to assembly CRT
TVs for them.
 Sony, Samsung and LGE have the most exclusive shops in India.
IIPM Satabri Page 10

 The growing LCD TV market in India has encouraged Indian company
Videocon group to set up a TFT LCD panel manufacturing fab.

Company Background
LG Electronics India Ltd.
• Established In : Jan 1997

• Managing Director : Mr. Moon B. Shin
• Corporate Office : Plot no51, Udyog Vihar, Surajpur Kasna
Road, Greater Noida (UP)
• Corporate Website : http://www.lg.com
• Number of Employees: 3000+
Business Areas & Main Products

Home Entertainment
Plasma Display Panels, LCD TVs, LED LCD TVs, Colour TVs,
Audios, Home Theatre System, DVD Recorder/Player, BluRay
Players
Home Appliances

Refrigerators, Washing Machines, Microwave Ovens,
Vacuum Cleaners, Air Purifiers
AC
Split AC, Window AC, Commercial AC’s
Business Solutions
LCD monitors, CRT monitors, Network Monitors, Graphic

Monitor, Optical Storage Devices, LED Projectors, NAS (Network
attached Storage) and Digital signage
GSM
Smart Phones, Color Screen GSM Handsets, Camera Phones,

Touch Screen Phones, 3G Phones, Multimedia Phones, Dual SIM
Phones, CDMA Phones
Based in South Korea, LG Electronics (LGEI) had a global

turnover of US$ 29.9 billion in 2003. LGEI has 50 affiliated
companies across the globe, with 300 offices and presence in
120 countries. With over 64,000 employees, it focuses on four
main businesses - Electronics and Telecommunications,
Services, Finance and Chemicals. LGEI has 20 R&D centres
worldwide and has subsidiaries in 76 countries. Established in
1997, LG Electronics India (LGEI) is a wholly-owned subsidiary
of LG Electronics, South Korea. It is one of the leading
companies in consumer electronics, home appliances and
computer peripherals in India. It has a turnover of almost US$
1000 million in India. LGEI’s sales are increasing with a CAGR of
40 per cent over the past five years.
LG is the market leader in various segments like colour TVs,

microwave ovens, frost-free refrigerators, washing machines
and air-conditioners, with market shares of 26.2 per cent,

41.2per cent, 37.9 per cent, 34.1 per cent and 34 per cent
respectively.
LG Electronics India received the Occupational Health & Safety

Management System OHSAS18001:1999 certification from the
British Standards Institution (BSI), India, for a systematic
approach towards Occupational Health and Safety Management
System.
LGEI exported goods and services worth US$ 40 million in 2003.

The major export markets for LGEI are the Middle East, West
Africa and Central Asia.
Distribution network
LG has adopted the regional distribution model in India. All the
distributors work directly with the company. This has resulted
in quicker rotation of stocks, and better penetration into the B,
C, and D class markets.

LG also follows the strategy of stock rotation, rather than
dumping stocks on channel partners.
LG has over 46 branch offices and another 110 area offices

across the country. LG had set a target of developing 2,000
dealers in 2004, in addition to the existing 3,000 dealers all
over India.
LG CHANNEL PARTNERS

CFA’s
• The number of C/F agents as of 31st May,

2004 is 28.
• They are spread across 20 states in India.
• The company dispatches the goods to C/F on consignment

basis.
• At the same time, these C/F agents all work on contract basis.
• They get paid as per the amount they stock.
DISTRIBUTORS
• The company appoints distributor for selective cities where the

markets are small but require more focus and attention.
Distributors are required to conduct sales and marketing on
behalf of the company in these markets serving to all the
required company stores.
• The company sends goods to the distributor on outright sale

basis.
• It is the duty of the distributor to send his people into the field
to book the orders and also execute them through their own
delivery vehicles.
• The distributor has to maintain his own sales, delivery and

accounts people for smooth working of his unit and is served by
the nearest C/F for all his requirements.
• The distributor is given a margin of max 17.5%

Delivery Schedule
• Takes 1 day for CFA’s to service reorder within their zone

• Distributor too caters to the demand in his area within 48
hours from the time of receiving the order
• If goods have to be procured from the warehouse then it

takes 8 days (avg) for the goods to arrive at the C/F or
distributor and delivered to the stores.
• No inventory management system in place with the MBO’s

(Multi brand outlet)
•‘LG Shoppe’ and franchisee showrooms do have a system in

place to consolidate their inventory and sales with the company
main office
Ordering
•The retailers order their requirements directly to the

concerned distributors.
•The distributors source the orders from the company

warehouses, which are connected directly with each of the 43
branches.
•The mother warehouse in Greater Noida caters to the needs of

all the regional warehouses.

•It is the responsibility of the C/F agents to supply to
the distributors as per their requirements.
•If any reorder do come in during the month then the regional
warehouse that entertains them properly services them.
Planning & Forecasting
•The company goes for annual forecasts on the basis of the

previous year’s sales and also current trends.
•These sales forecasts are then disaggregated into monthly

sales plans.
•The logistics and the production people meet every 15days,

and on the basis of sales as well as past inventory, they freeze
production for the next 15 days.
•In case the sales in the previous period have not been up to
the mark, and the inventory levels are high, the production is
halted and stock of the situation is taken.
Reverse Logistics
•The company accepts returns from their retailers as well as

company owned stores

•The job of bringing back the defects again rests with local
distributor and C/F that collects them from the shop
•They are entered and kept separately at the warehouse and

proper stock is maintained and sent to warehouse
•The damaged goods are dispatched to the warehouse

periodically. The damaged goods received from the distributor
are credited to his account and as such are only accepted after
thorough examination by the local sales executive.
Sales Organization Structure
Average Inventory Size At Retailers
• Rs 70 lacs
Order Cycle
• 7-8 days
Credit Period
• 15 days
Market Research
• Conducted for Customers, Channel Members , General

market survey
• Research is conducted once in three months
• They generally cover Qualitative and analytical research

CHANNEL CONFLICTS AND
COOPERATION
The first type of channel conflict may arise because of the co-
existence of the following:
•LG owned exclusive outlets
•MBOs (multi brand outlets)
•Another type of conflict could be a result of institutional sales

being sourced by both:
•The company itself
•The dealers who want to meet targets
•Internal conflicts:
•The branch managers, who look after all products in a

particular region, and product group managers, who look after
particular products, often monitor the same dealers in a region,
thereby leading to conflicts.

Company Background
Sony India Pvt.Ltd
Company: Sony India Pvt. Ltd.
Managing
Mr. Masaru Tamagawa
Director:
Date of
Establishme November 17, 1994
nt:
Location: A-31, Mohan Cooperative Industrial Estate,

Mathura Road, New Delhi - 110044, India.
Staff
728
Strength:
Share
Rs. 550 million
Capital:
Share
100% subsidiary of Sony Corporation, Japan
Holding:
Branch Delhi, Haryana, Mumbai, Bangalore, Chennai,

Offices: Kolkata, Hyderabad, Vijayawada, Jaipur,
Chandigarh, Lucknow, Pune, Ahmedabad, Indore,
Cochin, Coimbatore, Ghaziabad, Guwahati,
Mangalore and Ranchi
Business Marketing, Sales and After-Sales Service of

Activities: electronic products & software exports
Products: Televisions, Hi-fi Audios, Home Theater
systems and DVD players, Personal Audio
(CD/Cassette Radio Players and Walkman®),
Audio Video Accessories, Car Audio and Visual
Systems, Notebooks, Gaming Consoles,
Camcorders and Digital Still Cameras, Digital
Imaging Accessory (Batteries, Chargers,
Microphone, Photo Printers), Mobile Phones,
Recording Media and Energy Devices, Broadcast
and Professional products.
One of the most recognized brand names in the world today,

Sony Corporation, Japan, established its India operations in
November 1994, focusing on the sales and marketing of Sony
products in the country. In a span of 15 years Sony India has
exemplified the quest for excellence in the world of digital
lifestyle becoming the country’s foremost consumer electronics
brand. With relentless commitment to quality, consistent
dedication to customer satisfaction and unparalleled standards
of service, Sony India is recognized as a benchmark for new
age technology, superior quality, digital concepts and
personalized service that has ensured loyal customers and
nationwide acclaim in the industry.

With brands names such as BRAVIA, BRAVIA Theatre, Cyber-
shot‚ Handycam®, VAIO, Walkman®, Xplod, Memory
Stick™‚ PlayStation®. Sony has established it self as a value
leader across its various product categories of Audio/Visual
Entertainment products, Information and
Communications‚ Recording Media, Business and Professional
products.
In India, Sony has its footprint across all major towns and cities
through a distribution network comprising of over 5000 dealers
and distributors, 240 exclusive Sony outlets and 19 direct
branch locations. Manned by customer friendly and informed
sales persons, Sony’s exclusive stores ‘Sony Center’ are fast
becoming the most visible face of the company in India.
Sony India also has a strong service presence across the

country with 20 company owned and 190 authorized service
centers and 16 exclusive demonstration centers. A distinctive
feature of Sony’s service is their highly motivated and well-
trained staffs that provide the kind of attentive and sensitive
service that is rare today.
Sony is committed to ensuring that both the products and the

marketing activities employed truly make a difference to
people’s lifestyles and offer them new dimensions of
enjoyment.

Distribution Network
Decisions with respect to distribution channel focus on making
the product available in adequate quantities at places where
customers are normally expected to shop for them to satisfy
their needs. Depending on the nature of the product, marketing
management decides to put into place an exclusive, selective
or intensive network of distribution, while selecting the
appropriate dealers or wholesalers.

Sony being the company which positions itself as a seller of
durable and
high-end products, it is practicing selective distribution of its
products from the
selective dealers i.e. SONY World. Apart from this there are
grey-markets in
India and other countries where a practice of intensive market
coverage is
practiced, and the products in these kind of markets normally
do not posses all
the features and benefits which Sony offers e.g. warranty and
guarantee.
Sony distributes its products in various channels. It uses Zero-

level Channel, one level channel and two-level channel.
In India, Sony has used the method of one-level distribution

channel.
This means that, customer buys their Sony product from the
retailers recognized by Sony, and these retailers buy the
products directly from the company itself.
i.e.

SONY CHANNEL PARTNERS
• There are 21 C & F agents in India
• They are spread across 21 states in India.
• The company dispatches the goods to C/F on consignment

basis.
• At the same time, these C/F agents all work on contract basis.
• They get paid as per the amount they stock.

DISTRIBUTORS
• Sony creates a non-competitive zone between itself and

its channel partners and among channels parts as well.
• It doesn’t supply to those to whom its distributors supplies

to
• It appoints only one distributor for a given location.
• Dealer margin was undisclosed.
• Also Sales executive from Sony visit distributors often to

keep them updated on new products and changes in
prices and to build a strong relationship.
ORDERING
Planning & Forecasting
The planning & forecasting is done on the sales based on the

past trends i.e Y/Y (year on year) & Q/Q (quarter on quarter)
basis.
The channel members order the respective quantity via

common software given to all the channel members. They can
order 1 unit also as there is no minimum or maximum order
conditions, also they can order on daily basis, weekly basis etc
as there is no condition of time duration for ordering the goods.

Delivery Schedule
The delivery is done via a logistic partner & totally it depends
on the order from the channel members. The average order
cycle time is 7 days. As and when the order comes, the logistic
partner or the C/F agent delivers the respective goods.
Sales Organization Structure
Average Inventory Size at Retailers
• Depending upon the movement at the retailers
Order Cycle
• 7 days
Credit Period
• 15 -30 days
Market Research
• Conducted for Customers, Channel Members , General

market survey
• They undertake both primary and secondary research
• The research frequency depends upon product launch &
sales forecast

CHANNEL CONFLICTS AND
COOPERATION
• Sony creates a non-competitive zone between itself and
its channel partners and among channels parts as well.
• It doesn’t supply to those to whom its distributors

supplies to
• It appoints only one distributor for a given location.
• The dealers are not allowed to sell below a certain price
Findings
We conducted a market research to find out the perception of

these brands in the minds of the end consumers regarding the
various activities undertaken by both the companies
Sample size : 224
Period of research: 10/22/2010 - 10/31/2010
Mode of research: Questionnaire

The questionnaire were mailed to the respondents and it was
also posted on social networking sites such as Facebook, Orkut,
Linked in.
The Questionnaire has been provided in the annexure.
Here as our respondents SONY emerges as leader in market

share with a 2% edge over LG.

As per the respondents Samsung take the third position
followed by other brands and Phillips, Akai grabs the last
position with a just 3% market share.

Retail chains here proves to be the most preferred choice of
end consumers for their purchases, however super markets are
not much far behind ,also internet is slowly becoming a
significant contributor to the sales.
As it is very clear from the responses that most of the people

are very happy with the buying experience at the retailers.

Retailers are proving to be delivering the value proposition
promised by the companies, this can be related to the proper
training and feedback provided by the companies

The labelling/ product information is very good as per the
consumers. This may be an outcome of the market research
they do.
Customers get wide range of price choices to select from at the

reatailer.

80% of the respondents find LG/Sony easy to locate which
means the retail network is very good
Approx 70% of the respondents are happy with the staff at the
retailers outlet i.e they are well trained & groomed.

80% of the respondents are happy with the delivery pattern
More than 75% of respondents were happy with the overall

quality of service the retailers provide

The advertisement done by Sony/LG does not mislead the
customer
59% of the respondents agreed with the hassle free

replacement of goods if the good were defective

There is slight aggressive practice with respect to the sales at
the retailers outlet. 62% of the respondents disagreed with the
aggressive practice & 38% were not happy with the practice

72% of the respondents never faced any problems with respect
to the TV, which is a very healthy sign for both the company.
CONCLUSIONS

ANNEXURE- 1
Questionnaire
(For Dealer’s/Retailer’s/Franchisee)
Person contacted: …………………………………………………………..
Name of dealer: ……………………………………………………………..
Address: ………………………………………………………………..
Tel. No.: …………………………
1) What are the different brands which you keep in stock?
2) Which brand is most asked by the customers

i) LG ii) SONY iii) Samsung iv) Videocon v) others
3) What is your average sales/month?
4) Which brand do you recommend to the customer and why?

5) Do you get any credit period from the company?
a) YES b) NO
If Yes, What is the credit period you get:
i) Upto 15 days ii) 15-30 days iii) >30 days
6) What is your average order size?
7) What are the margins that you get from the company?
8) What is the average order cycle time taken by the company?
i) < 5 days ii) 5-10 days iii) > 10 days
9) Where would you rank the services/assistance provided to you by the

company/s
Very Good Satisfactor Poor Very

Good y poor
Delivery Time
Quality Maintenance
Incentives
Promotional activities
Condition of Product
Ease and Flexibility of

placing Order

Transporter’s Behavior
Customers Orientation
Commercial Terms
Services of Sales
Persons
10) How will you rate the efficiency of your sales persons
a) Very Good b) Good c) Satisfactory d) Poor e) Very
poor
11) Does company provides you with any assistance by means of promotional
activities?
a) YES b) NO
If Yes,
i) Numbers
ii) Timing
iii) Quantity of promotions.
12) Do you provide appraisals to your sales persons?
a) YES b) NO
If Yes, on what Parameter

ANNEXURE- 2
1. Which Brand of TV you have in Your house?
• Sony
• Lg
2.If No then which TV brand are you using?
• Samsung
• Sansui
• Akai
• Videocon
• Philips
• Onida
• Other

3. When did you purchase the Sonly/LG TV?
• 1 Month
• 6 Months
• 12 Months
• More than 12 Months

4. From where did you buy this T.V
• Supermarket
• Discount Store
• Departmental Store
• Retail Chain
• Internet
• Any other
6. Overall, to what extent are you satisfied with (RETAILER) when it comes to buying
[PRODUCT]?
1 2 3 4 5
very
very good
bad
7. Innovation: Retailer continuously offers a wide enough choice of new products &
innovative ideas that meet your needs
1 2 3 4 5
very
very good
bad
8. Reliability: TV sold by the retailer are reliable
1 2 3 4 5
very
very good
bad
9. Product labeling: Product information provided by the company on the
label/packaging is clear, accurate & sufficient.
1 2 3 4 5
very
very good
bad

10. Enough choice of Prices: Retailer offers a wide enough choice of TV’s at different
prices.
1 2 3 4 5
very
very good
bad
11. Ease of Purchase: It is quick & easy to find the Sony/LG TV at the retailer.
1 2 3 4 5
very
very good
bad
12. Staff: The staff at the retailer is well informed about the product & is helpful to you
when you need it.
1 2 3 4 5
very
very good
bad
13. Delivery Fulfillment: Products are delivered as per the purchase order.
1 2 3 4 5
very
very good
bad
14. Overall: Retailer offers quality of service overall
1 2 3 4 5
very
very good
bad
15. Advertising from the company/retailer does not deceive, mislead or omit relevant
information
1 2 3 4 5
Totally Agree Totally Disagree
16. Defective Good: Retailer/company would agree to replace, repair, reduce the price
or give you your money back if the product was defective.
1 2 3 4 5
17. Aggressive Practice: You have felt unduly pressurized to buy the TV at the retailer.
1 2 3 4 5
18. Clear contract terms: When a written contract is provided by the retailer, the
contract terms are fair.
1 2 3 4 5

19. How many problems have you experienced in the past 12 months with Sony/LG
TV.
• None
• Once
• Twice
• Thrice
• Multiple

ANNEXURE- 3

Sales &amp; Distribution Project LG-SONY

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SALES AND DISTRIBUTION

Sales (Pre & Post) & Distribution’ effectiveness:

IIPM Satabri Page 1

The project was prepared in accordance to the guidelines

The project outlines the television market in country. We have

IIPM Satabri Page 2

IIPM Satabri Page 3

We are extremely grateful to Mr. Rishi Vasudeva (Area Manager, LG Electronics

IIPM Satabri Page 4

9. Company Background (Sony) 19

12.Channel Conflicts And Corporations 25

IIPM Satabri Page 5

Secondary Data Sources :-

IIPM Satabri Page 7

Sample Size Used

SONY (sales people) – 2

It was difficult to ask for time required for a detailed discussion

The company officials did not divulge details about competitive

IIPM Satabri Page 8

Other key findings in the report include:

IIPM Satabri Page 9

 CRT TV OEM is a key business in India as many brands ship components

IIPM Satabri Page 10

IIPM Satabri Page 11

• Established In : Jan 1997

Business Areas & Main Products

IIPM Satabri Page 12

Split AC, Window AC, Commercial AC’s

LCD monitors, CRT monitors, Network Monitors, Graphic

Smart Phones, Color Screen GSM Handsets, Camera Phones,

Based in South Korea, LG Electronics (LGEI) had a global

LG is the market leader in various segments like colour TVs,

IIPM Satabri Page 13

LG Electronics India received the Occupational Health & Safety

LGEI exported goods and services worth US$ 40 million in 2003.

IIPM Satabri Page 14

LG has over 46 branch offices and another 110 area offices

IIPM Satabri Page 15

• The number of C/F agents as of 31st May,

• They are spread across 20 states in India.

• The company dispatches the goods to C/F on consignment

• They get paid as per the amount they stock.

• The company appoints distributor for selective cities where the

• The company sends goods to the distributor on outright sale

• The distributor has to maintain his own sales, delivery and

• The distributor is given a margin of max 17.5%

IIPM Satabri Page 16

• Takes 1 day for CFA’s to service reorder within their zone

• If goods have to be procured from the warehouse then it

• No inventory management system in place with the MBO’s

•‘LG Shoppe’ and franchisee showrooms do have a system in

•The retailers order their requirements directly to the

•The distributors source the orders from the company

•The mother warehouse in Greater Noida caters to the needs of

IIPM Satabri Page 17

Planning & Forecasting

•The company goes for annual forecasts on the basis of the

•These sales forecasts are then disaggregated into monthly

•The logistics and the production people meet every 15days,

•The company accepts returns from their retailers as well as

IIPM Satabri Page 18

•They are entered and kept separately at the warehouse and

•The damaged goods are dispatched to the warehouse

Sales & Distribution Project LG-SONY

Sales & Distribution Project LG-SONY