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CHAPTER 1

INTRODUCTION

Before the liberalization of the Indian economy, only a few companies like
Kelvinator, Godrej, Alwyn, and Voltas were the major players in the
consumer durables market, accounting for 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, the
demand for consumer durables has increased significantly. Products like
washing machines, air conditioners, microwave ovens, color televisions
(CTVs) 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


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1. Consumer electronic include 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, refrigerators, vacuum cleaners, kitchen
appliances, non-kitchen appliances, microwaves, built-in
appliances, Tumble dryer, personal care product etc.
3. Moulded luggage include plastics
4. Clocks and watches
5. Mobile phones

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

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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

1. Higher import duties on row materials.


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

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.
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, we
have divided the introduction part into three main sub parts.

1. LG Global
2. LG India
3. LG

History of company:

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The company was originally established in 1958 as Gold Star, producing
radios, TVs, refrigerators, washing machines, and air conditioners.

1958-1969-GoldStar The Electronics Industry Dream

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1970-79 GoldStar symbol of The Technolgoy

1980-88 :- INTERNATIONALIZATION

1989-94 INOVATION

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1995-98 GLOBAL LEADERS LG ELECTRONICS

1999-2003-DIGITAL MANAGEMENT

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2004-2006 GREAT PEOPLE GREAT DESIGN

2007-THE PEOPLE COMPANY

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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 backronym. Before the corporate Name change 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.

CHAPTER 2

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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 LCD
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
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

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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,
h) PDA Phones,
i) MP3 Players,
j) New Karaoke Systems,
k) Car Infotainment

VISION
Global Top 3 by 2010
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Global Top 3 Electronic/Telecommunication company

GROWTH STRATEGY

“Fast innovation, Fast growth”

CORE COMPETENCY

“Product leadership, Market leadership, People leadership”

CORPORATE CULTURE

No excuse, “we” not “I”, Fun workplace

SLOGAN

"Life's Good" represents LG's determination to provide delightfully


smart products that will make your life good.

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The LG Electronics Life's Good signature consists of the LG logo,
seal, and the slogan, "Life's Good" set in Charlotte sans typeface
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 represents LG’s efforts to keep close relationship
with our customers around the world.

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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.

Red color represents our friendliness and gives a strong impression of LG’s
commitment to deliver the best.

The circle symbolizes The Globe. The stylized image of a smiling face in
the symbol conveys “Friendliness and Approachability”.

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


Confident”.

The slogan of LG is “Life’s Good”. It expresses“ Brand’s Value , Promises,


Benefits , Personality .

CHPTER 3
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.

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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 whereby both 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 companies.

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 companies. "Strategic association between
corporations," in which companies with different infrastructures cooperate
in the fast-developing 21st century business field, is of key significance in
terms of strengthening the existing industry and creating a new one.

LG Electronics will do its best to create new products and services with an
open mind, 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
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7. HP
8. 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. 2007 LG Electronics and Yahoo formed a strategic alliance. Yahoo
mobile services will be available from LG mobile. This service is targeting
10 million LG mobile phones in over 70 countries.

In Mar. 2007 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).

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 –


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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

a) Reliable products

b) Simple design

c) Ease of use

d) Extraordinary Experience

Personality describes the human characteristic that are expressed to the


customer through

Trustworthy, Considerate
Practical, Friendly

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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.

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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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

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

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CHAPTER 4

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. 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

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of this year. At present, LG has a total of 83 LG stores across the country, of
which 45 are shops and 38 are exclusive stores. Brand shops 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 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,
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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).

3. High import duty

4. Compitition from local market players and other MNCs in

consumer durable segment.

5. Price sensitiveness of the Indian consumer

LGEI over comes these challenges to emerge as

Innovative marketing strategy

1. Launch new technologies in consumer electronic and home

appliances.

2. LG was the first brand to enter in cricket in big way a way,

by sponsoring the 1999 world cup followed it up in 2003 as

well.

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3. LG brought in four captains of the Indian cricket team to

endorse its products. LG invested more then US$ 8 million

on advertising and marketing in this sport.

4. LG has differentiated its product using technology and

health benefits. CTV has “Golden eye technology” Air

conditioner has “Health 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 . 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

LG has the research and development facilities in Bangalore and . 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.


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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

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
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and IT-enabled services for LG.

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.

LG market share of consumer appliances and consumer electronic:-

LG position of CTV in various states in India


LG position of REF in various states in India
LG position of WM in various states in India
LG position of AC in various States in India
LG position of Audio & Home Theater in various in India
LG position of DVD in various in India
LG position of MWO 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 states
in India. We selected 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 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
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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 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. Shin remarked
that the company was targeting an increase of exports to $300 million in
2008 from $230 million in 2007.

LG PUNE
LG Pune is the branch office of LGEIL. It is located in J.M Road. In 2004
LGEIL opened second factory which is located in Ranjangaon. This plant
manufactures all product including DVD writers and GSM mobiles. Thus it
became first company to manufacture DVD writers 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 African markets. The company
aims to touch an export turnover of $3 billion by 2010 from India, which
will contribute to 30 per cent of the Indian arm's turnover. , India, October
6, 2004 -- LGE announced 3 growth strategies aimed at the 1.1 billion
people of India making the Indian market the second largest global
production base following 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 included: penetrate the south-western market of India through
the new 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 plant and use it as its second-largest global GSM handset
production line after the Qingdao plant in China; and expand the current
750 R&D staff in India to 1,500 by 2007, striving to develop premium
products and export 30% of India-manufactured products to Asia, Middle
East and Africa markets by 2007. LG Electronics’ second new plant in Pune,
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India covers a total area of 211,200 square meters 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 plant by early next year. The GSM handset line envisages a
capacity of manufacturing 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. In connection with its three
growth strategies for the Indian market, LG Electronics will invest 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 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 global 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 plant in addition to its
current manufacturing facility at Greater Noida will enable the company to
enhance its consumer reach and reiterate it’s commitment towards
providing
superior technology products to the India consumer. 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
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

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increase the share of mass media even as overall marketing spends would
be raised by just about 10-15%.

CHAPTER 5
Distribution and Marketing:

The company has number of dealers and warehouses. They have


LG exclusive shops. 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.
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):-

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Logistics is the art and science of managing and controlling the flow of
goods, energy, information, and other resources like products, services,
and people, from the source of production to the marketplace. It is difficult
to accomplish any marketing or manufacturing without logistical support.
It involves the integration of information, transportation, inventory,
warehousing, material handling, and packaging. The operating
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,
implements and controls the efficient, effective forward and reverse flow
and storage of goods, services and related information between the point of
origin and the point of consumption in order to meet customers'
requirements.
5R’s of Logistic followed by LG:
1. Right Time
2. Right Place
3. Right Condition
4. Right Cost
5. Right Handling

The LG Factory is located at NOIDA & . 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. 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
railways, 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.

In warehouse 7 locations is set up for the products.


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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

5’s of warehouse, which the LG strictly follow.


1. Sweeping
2. Sorting
3. Systematic Arrangement
4. Simplification
5. Self- discipline

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

1. Red Card – To stop the product going into market,


2. Green card – To allow the product for delivery in market,
3. Yellow Card – After the product labeled with green, allow this
to move in market

Distribution Time:-
• Local delivery – 4 hrs.
• Upcountry delivery - 12 hrs.
• Within 200 km. – 24 hrs.
• Beyond 200 km. – 48 hrs.
The above distribution time is the time of delivery of products from
warehouse to the 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
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· Report
Order Processing booking for dealers /distributors
Invoicing after billing process/bill generation
Indenting requirement (Production 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
In addition, there are 35 fire extinguishers to prevent the accidental hazard
within the warehouse 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.
4 – No inventory mismatch, shortage or excess – monthly 100% physical
stocktaking.
5 – Nil 30+ for FG – 2, 3 & 5.
6 – Nil transit damage.
7 – File insurance claim within 2 days. Settle all claim all within 30 days.
8 – No inter – branch transfer without HO clearance.
9 – PSI feeding into system by 25th of every month. Ensure 90% accuracy.
10 – Apply physical FMFO.

Problem

1- In transit material damage checking.


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

CUSTOMER SERVICE:

The best and the biggest international brands are here in India –but the
irony if it all: where is 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 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, 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 the project
we also came to know that after sale service becomes the big issue in the
region. Customers as well as dealer were facing the problem of after sales
service. Because of this problem many dealer in the region were not ready
to sell 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
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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."

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 program,"
4. The company will invest Rs 8 crore (Rs 80 million) in employee
development program this year with an aim to attain a 8 per cent attrition
rate.
5. The company moved away from the discounting strategy since last year
and is putting 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 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.
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

33
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 and also calculate the display share.
 Find out the positional dealer who can sale the LG product in large
volume.
 The main objective of research was to identify potential dealer and
development these dealer. So LG can make them their direct dealer.
 This will ease the dependence on the some big dealer like Maharashtra
and 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.

34
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 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.

Type of research is 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
35
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 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 flexile in its approach, but a descriptive
study

36
BRANCH
1 2 3 in contrast tends to be rigid and its approach cannot be changed
ever now and then.
DEALER MANAGEMENT
Mapping of regional dealers.
They have been divided into three categories on the basis of their turnover
and the selling capacity.

 -1
 -2
 -3
-1 Includes the modern trade and they have direct billing from the branch
office. They have high turnover and the company depends heavily on
them-2 includes the distributors. They have direct billing from the branch
office. Their turnover is also high.
-3 Includes the sub dealers .They have direct billing from distributors or
from the branch office. Their turnover is not so high, but there are few sub
dealers whose potential is quite high. According to sales the branch has
designated as gold and silver sub dealers.

OBJECTIVE OF THE STUDY


The objective was to find out the market share of LG products, advantages
and disadvantages of LG products from dealers and to find out what
problems they are facing with the LG products so that problems can be
resolved to increase the sale.

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.
Primary data: For primary data collection, we have to plan the following
four important aspects.
 Sampling
 Research Instrument

37
 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 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: 07
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
Analysis:
38
Q1. Have you purchased any consumer durable during Exhibitions?
 Yes
 No
Inferences
1. 65 % of Customers have not purchased any consumer durable from
exhibitions.
2. Only 35 % people have purchased.
3. It shows that consumers are coming in the exhibition for knowledge of
product and also they want to know that weather there is actual price
difference in exhibition and shop or not.
4. Consumers also want to compare to the different brand which are
available in the exhibition.
5. So exhibitions are more useful to increases brand awareness.
6. People are less interested to purchase product from the exhibition.

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


 Price
 Product feature
 Brand
 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.
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.shoppee
 Showroom
Inference:
1. A majority of customers prefer to buy from showrooms. Very less
proposition of customers buys from Exhibitions.
39
2. 47% customers are prefer to by 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
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.5.Which consumer durable you have and of which brand?


 CTV
 LCD
 PLASMA
 REF
 WM
 MW
 AC
Inference
In CTV section maximum customers have Onida, in LCD Sony is the
leader, In plasma BPL is the leader, In Ref LG is the leader, MW LG is the
leader. In WM there are companies and in AC also.

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


 1-3 years
40
 3-5 years
 5-10 years
 More than 10 years

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.

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


 Yes
 No
Inference
Majority of customers do not prefer any financial scheme.

Dealer survey Findings


1. By calculating the display share we found that in most of store LG 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.
7. The top competitor of LG product in is SAMSUNG.
8. In area the performance of LG is in better position but the
competitor also hold closer margin.

41
9. There is high growth of sale in market due to booming in new
technology and better service.
10.Word of mouth plays a vital role in awareness among customer. This is
one factor, which can play a good role in promotion of products as well as
demonstration given by the shopkeeper also plays a vital role for customer.

RECOMMENDATIONS AND SUGGESTIONS:

1. LG should improve it’s after sale service because its hits badly LGs
market share in region.
2. More detailed customaries service is to be provided.
3. The training to in shop demonstration should be given at frequent time
interval and feed back should be considered positively.
4. The company should look into the matter of person hiring for in shop
demonstration. A big LG showroom should have at least 2 such kind of
person.
5. LG should try new dealer who have the potential. So they can target
more market.
6. As there is a bottle neck competition between Samsung and LG, it is
necessary to take measure steps to overcome the area of downfall in LG
with respect to Samsung.
7. The marketing managers should make better relations with dealers and
reputation of the company.
8. Customer considers quality as their first preference, so the company
should give more stress on this.
9. The switching of customer from LG product to other brand is due to the
bed after sell service in shop.
10.The product is well aware and it is on top of mind of customer.

So company should always improve services and update their technology.

CUSTOMER SURVEY FINDINGS

42
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 consumer durables 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 durables.
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 has captured maximum market share in
every category. LG dominates CTV, LCD, and Refrigerator, and Washing
machine, category.
8. LG and Samsung have bottle neck competition in TV and REF. category.
9. The product is well aware and it is on top of mind of customer.
10.Customers are also now very choosy in buying the product and it is
important for 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 LCD SCARLET 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”.

43
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 LCD, IT, and
GSM. 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 our study, also there were certain
limitations, which I could not able to solve.
1. The research was conducted in a very small area.
2. Our research work period witness the biggest ups and downs in product
sale of different brands, which affected the perception of the customer.
This was biggest drawback of my study.
3. Time factor was also important for us. We had limited time for the
research, for which a full-fledged report was insufficient for me.
4. The customer filled the questionnaire mostly in careless manner, so it
was difficult to make them hold for time.
5. We 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

44
CHAPTER 6

BIBLIOGRAPHY
 www.lgindia.com
 www.google.com
 www.wikipedia.com
 Business world
 Business today
 LG magazine
 Economics times News paper
 Times of India

45
CHAPTER 7

CONCLUSION

Branding has become so strong that today hardly anything goes unbranded
particularly automobiles or the reason that branding helps buyers in many ways.
Brand name helps the consumer to identify products that might benefit them, and
for familiarizing brand name advertisements play key role. Brands also tell the
buyer something about the product quality. Buyers who always buy the same
brand know that they will get same features, benefits, and quality each time they
buy. In this way, it is found that a powerful brand has high brand equity, higher
brand loyalty, name awareness, perceived quality, strong brand associations and
other assets such as patents, trademarks and channel relationship. However it is
important to note that fundamental asset underlying brand equity is consumer
equity and hence proper focus of market planning is required to extend life value
to the legal consumers. All these aspects facilitate the brands to go for brand
extension where successful brand name helps in launching new products. The
very important point to be considered is that if a brand extension fails, it may
harm consumer attitude towards the other products that carry the same brand
name. It is worth to note that a brand name may lose its special positioning in the
consumer’s mind through over use and hence the companies intend to use the old
name.

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