“Consumer Buying Behavior & Brand Loyalty

In consumer Durable products

(Segment Colour T.V. )”

Submitted by

Thakur Mandar Dnyaneshwar

MMM – SEM V Roll No. 96

Under the Guidance of

Prof. Shri. Shailesh Kale

In Partial Fulfillment of

MMM course

University Of Mumbai

(2007-2010)
 Executive Summery
Before the liberalization of the Indian economy, only a few
companies like Kelvinator, Godrej, Allwyn, and Voltas were the major
players in the consumer durables market, accounting for no less than 90%
of the market. Then, after the liberalization, foreign players like LG,
Sony, Samsung, Whirlpool, Daewoo, and Aiwa appeared. Today, few of
these players control the major share of the consumer durables market.

Consumer durables market 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 and increasing floating population. 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.
Strengths:
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 growing

Opportunity :

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

other developing countries.
2. Unexploited rural market.
3. Rapid urbanization.
4. Increase in income level, i.e.increase in purchasing power of
consumers.
5. Easy availability of finance.

Threats :
1. Higher import duties on row materials.
2. Cheap imports from Singapore, China and from other Asian countries.
 SCOPE OF THE PROJECT:

 Taking in to consideration over all view of the situation, project

scoped down to understand the role of Consumer Buying Behaviorin
this transformation in Consumer Durable Products.
 Factors affecting consumer decision making.
 Understand the role of the Brand loyalty in Consumer Durables.
 Study the position of leader in the segment.

Path Forward:
 Study Secondary data for industry overview,
 Collect primary data for more insight,
 Derive conclusions based on the Primary and Secondary,
 Address research findings based on theory of Consumer Buying
Behaviorand Brand loyalty.
 Study the various marketing moves of the market leader for better
understanding of the
 Research Method

Data type : Primary Data

Research Tool : Questionnaire,
Literature Survey,
Internet.
Business Magazines,
Peoples Interactions
Sample Units : Individual Consumers, Family members,
Sampling Method: Random Sampling,

Assumptions :
• Samples collected are representative of the entire
population.
• Modern consumer is conscious and awareness is high.
• He/ She is more curious about the product, quality, price
and features offered.
• Try to obtain maximum information before actual
decision making.
• Being in the Indian context family plays a important role.

Research Objective:
• In this study more focus was to understand the Consumer
Buying Behaviorwhile purchasing Colour Television.
 • In the changing market scenario, and post globalization
do Brand Loyalty really exist?

India has an increasingly affluent middle class population that, on the

back of rapid economic growth, has made the countries consumer
electronics industry highly dynamic. The industry had been witnessing
significant growth in recent year due to several factors such as retails
boom, growing disposable income and availability of easy finance
scheme. But still the consumers electronics goods such as Colour T.V.
refrigerator, microwave, and washing machine have low penetration in
the country., representing vast room for growth . This is attracting many
foreign players in country.
Since the penetration of several products T.V. refrigerators are reaching
saturation in the urban areas the markets for this products are shifting to
the semi urban and rural area.
The Indian consumer durables industry has witnessed a considerable
change in the past couple of years. Changing lifestyle, coupled with
greater affordability and a surge in advertising has been instrumental in
bringing about a sea change in the consumer behavior pattern.
This industry consists of durable goods used for domestic purposes such
as televisions, washing machines, refrigerators, microwave ovens, mobile
phones etc. The growth in the consumer durables sector has been driven
primarily by factors such as the boom in the real estate & housing
industry, higher disposable income, emergence of the retail industry in a
big way coupled with rising affluence levels of a considerable section of
the population.
As per the survey conducted by the FICCI on Indian consumer durables
industry, a shift in the consumer preferences towards higher end,
technologically advance branded products has been quite discernable.
This shift can be explained by narrowing differentials between the prices
of branded and unbranded products added with the high quality of after
sales service provided by the branded players. . The shift has also been
triggered by the availability of foreign branded products in India owing
to lower import duties coupled with other liberal measures as introduced
by the government.

The key growth drivers for Indian consumer durables industry are :

• Rise in disposable income: The demand for consumer electronics has

been rising with the increase in disposable income coupled with more
and more consumers falling under the double income families. The
growing Indian middle class is an attraction for companies who are
out there to woo them.

• Availability of newer variants of a product: Consumers are spoilt

for choice when it comes to choosing products. Newer variants of a
product will help a company in getting the attention of consumers
who look for innovation in products.

• Product pricing: The consumer durables industry is highly price

sensitive, making price the determining factor in increasing volumes,
at least for lower range consumers. For middle and upper range
consumers, it is the brand name, technology and product features that
are important.
 • Availability of financing schemes: Availability of credit and the
structure of the loan determine the affordability of the product. Sale of
a particular product is determined by the cost of credit as much as the
flexibility of the scheme.

• Rise in the share of organised retail: Rise in organised retail will set
the growth pace of the Indian consumer durables industry. According
to a working paper released by the Indian Council for Research on
International Economic Relations (ICRIER), organised retail which
constituted a mere four percent of the retail sector in FY07 is likely to
grow at 45-50% per annum and quadruple its share in the total retail
pie 16% by 2011-2012. The share will grow with bigger players
entering the market.

• Innovative advertising and brand promotion: Sales promotion

measures such as discounts, free gifts and exchange offers help a
company in distinguishing itself from others.

• Festive season sales: Demand for colour TVs usually pick up during
the festive seasons. As a result most companies come out with offers
during this period to cash in on the festive mood. This period will
continue to be the growth driver for consumer durable companies.

Major hurdles and challenges plaguing the Indian consumer durables

sector:

• Threat from new entrants, especially global companies: The

domestic consumer durables sector faces threat from newer
companies, especially from global ones who have technologically
advanced products to offer.
• Rivalry and competition: Presence of a large number of players in
the domestic consumer durables industry leads to competition and
rivalry among companies. Threat from rivalry and competition poses a
threat to domestic companies.
• Potential markets remaining yet untapped: A large segment of the
domestic market, mostly the rural market is yet to be tapped. Tapping
this yet untapped and unorganised market is a major challenge for the
Indian consumer durables sector.

• Threat from substitute products/services: The domestic consumer

durables industry is plagued by threats from substitute products. Easy
accessibility to theatres/multiplexes, especially in urban areas has
turned off the viewership from TV to a large extent. With the advent
of a horde of FM radio stations, radio sets have now substituted TVs.

• Customer power with respect to availability of choice: The

availability of a wide product line on account of most products being
homogeneous, poses a threat for companies operating in the consumer
durables sector. Customers have the choice of both domestically
produced and imported goods, with similar features.
Importance of studying this topic :

This study will give an important insight of customer who

goes to buy consumer durables mainly Colour TV in
showrooms. What does he thinks while purchasing a Colour
TV. What factors influence his decisions of purchasing TV?
A seller in showroom does not know what all goes in mind of
consumer when he enters his shop to purchase TV. They
have to rely on trial and error basis this research will tell
what factor consumer wants so that he comes to your shop.
Thus he can convert maximum of potential customer into
buyers if he knows what exactly triggers the customer
decision.
A company gets to know from this research what factors
influence the purchase decision of customer. Accordingly
directs its marketing effort so that it can get maximum
potential customer to purchase companies TV. Seller or
company would get an insight to consumer behavior
regarding purchases like what does consumer thinks while
purchasing a Colour TV?, What factors influence his decisions
of purchasing TV?

Industry Classification

The consumer durable industry can be broadly classified as consumer

electronics and consumer appliance. The consumer appliances category
can be further segmented as white goods and brown goods.

Classification of Consumer goods under following three category

Brown Goods / Kitchen Consumer
White Goods appliances Electronics
Refrigerators Mixers and grinders Mobile Phones
Washing
Machines Microwave oven, cooking range Televisions
A/C Irons MP3 Players
Audio
Equipments Electric fans DVD players
Etc Etc Etc

Industrial Growth

The industrial sector grew in moderation during FY08 at 8.5% on the

back of a comparatively higher growth of 11.5% during the previous
fiscal. The country’s real GDP grew by 9% during FY08; a tad lower
than 9.6% in the previous fiscal. The consumer durables segment
witnessed a fall in production particularly for items where consumer
preferences have shifted towards newer products. Shifting in the
consumption pattern coupled with rising input costs of steel, iron ore etc,
may further affect the production levels of these goods. On the supply
side newer variants of consumer durables on the back of technological
advancements have flooded the market, whereas on the demand side it is
the prospering middle class and consumerism which have led to changing
demand patterns.

Consumer durables: Industry size, growth and trends:

During FY 07, volume share of consumer durables was as follows…

C onsumer D urables Volum e S hare

C olour
Television, 30%
O thers, 34%

Refrigerators,
W ashing Air 18%
Mac hine , 5% C onditioners,
13%
C olour Television R efrigerators Air C onditioners
W ashing Mac hine O thers

The consumer durable market in India was estimated to be around US $

4.5 billion in 2006 – 07. More than 700 million units have been sold in
the year 06-07. Colour T.V. forming the bulk of the sales with 30% share
of volume. CTV, refrigerator and Air conditioner together constitute
more than 60 % of the sales in terms of the number of units sold.
The CTV production was 15.10 million units in 06-07 and is expected to
grow by at least 25 % . At the disaggregated level conventional CTV
volumes have been falling while flat TV’s have grown strongly. The flat
segment of the CTV now accounts for more than 60% of the total
domestic TV production.
High end products such as Liquid crystal display ( LCD), and plasma
display TV grew by 400 % and 150 % respectively in 06-07 with sharp
decline in the price of these products.

Now lets see who all are the market players in this colour T.V. segment.
TV company and relative market share table and pie chart…
 MARKET SHARE SHARE

OTHERS
VEDIOCON 2%
16%

LG
36%

ONIDA
18%

SAMSUNG
28%

From the market share analysis it is clear that LG India is market leader
in the Colour TV segment.

Indian Colour T.V. industry comprises of 30 % of total market share in

consumer durable industry. For any company getting the chunk of this
market will always be delightful. But in today’s competitive market
which is dominated by consumers, understanding the consumer buying
Behaviorwill always be important. To get the insight of the consumer
buying Behaviorin a better way, it was decided to conduct market survey
and interpret the results. Based on the findings the various consumer
behavioral aspects will be explained and studied.

To interact with the consumer on-line survey as well as interviews were

conducted.
Questioner was prepared and mailed across various recipients.
Various consumers from different strata were selected.
Live interviews were taken for better understanding of the consumer
psychic.
 DATA ANALYSIS
AND
INTERPRETATION

Q.1 What is your age group?

Age Group
Option % of Respondent
 20 yrs - 25 yrs 27.50%
25 yrs - 30 yrs 47.50%
30 yrs - 35 yrs 12.50%
40 yrs - 45 yrs 8%
45 yrs and above 4.50%

Age Group V/S % of Respondent

50.00%
45.00%
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%

e
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yr

yr

yr

yr

ab
5

5
2

d
-

an
s

s
yr

yr

yr

yr

s
yr
20

25

30

40

45

Age Group

Interpretation :
From the above findings it is clear that maximum no of respondent
(47.5%) who responds to the survey are between age group 25 – 30 yrs. We
can interpret based on this that maximum consumer for this category is
young in age. So, product should be attractive towards young generation.
Targeting and positioning should be done by keeping in mind this age group.
Q2. Gender
Gender
Option % Respondent
Male 85
Female 15
 Gender V/S % Respondent

90
80
70
60
50
40
30
20
10
0
Male Female
Gender

Interpretation :
During survey and interviews it was observed that most of the respondent
(85%) are male. Even after globalization and many changes which had
occurred in the country’s social structure, male dominance can not be
ignored. Or other way it can be interpreted that male counter parts are given
liberty to take such high involvement decision.
So, Electronic industry is male dominated decision making industry.
Q3. Monthly Income :

Monthly Income
Option % respondent
Rs 10K - Rs. 20K 15.00%
Rs 20K - Rs. 30K 27.50%
Rs 30K - Rs. 40K 22.50%
Rs 40K - Rs. 50K 20.00%
Rs. 50K and above 15.00%

Monthly Income V/S % respondent

30.00%

25.00%

20.00%

15.00%

10.00%

5.00%

0.00%
ve
K

K
20

30

40

50

bo
a
s.

s.

s.

s.

d
-R

an
-

K
K

50
10

20

30

40

s.
s

s
R

Interpretation :
From the collected data, monthly income of almost 50% respondent lies
between Rs. 20K – Rs.40 K. Companies should take this in to account while
fixing price for the Colour T.V.
Q 4. Which brand of electronics are you currently using?
.

Brand of Electronics
Option % respondent
BPL 3.61%
LG 15.66%
Sony 18.07%
Panasonic 1.81%
Vedeocon 8.43%
Samsung 12.05%
Whirlpool 6.63%
Godrej 9.64%
Philips 10.24%
Sharp 1.81%
Onida 4.82%
Others 7.23%

Brand of Electronics % respondent

20.00%
18.00%
16.00%
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
p

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j
on
LG

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so

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Q 4. Which brand of electronics are you currently using?

Brand Of Colour T.V.

Option % Respondent
BPL 8%
LG 28%
Sony 23%
Panasonic 4%
Vedeocon 16%
Samsung 10%
Sharp 2%
Onida 4%
Others 5%

Brand Of Colour T.V. % Respondent

30%

25%

20%

15%

10%

5%

0%
p

da
n
LG

s
ng
ny

ic
L

co

ar

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BP

on
So

ni
su

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th
o

O
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Sa
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Pa
Q 4. Which brand of electronics are you currently using?
This question was used to check the various brands which have entered in
the consumers home through various appliances. Also, this gives the fair
idea about which brand of colour T.V. consumer is currently using

Interpretation :

As the data suggest, electronic brands which have strong foot hold in the
consumers house hold are LG, SONY, SAMSUNG, PHILIPS, Which are
comprising of 56.02% . Indian consumer market is dominated by these
International players. Where as Domestic big shot players like GODREJ,
VEDEOCON, ONIDA, BPL, hardly comprises of 26.5%

But , when we see colour T.V. industry, LG is dominating market by 28%

followed by SONY 23%. Vedeocon is on IIIrd position with 16% market
share.

This clearly indicate that Indian consumers, post globalization are more
attracted toward the International Brands, instead of Domestic Brands.
They are ready to experiment by leaving age old Brands if proper quality
and value for money is offered.
Q5. When you think of colour T.V. which brand name strikes to your
mind ?

Brand Of Colour T.V.

Option % Respondent
BPL 2%
LG 16%
Sony 16%
Panasonic 6%
Vedeocon 12%
Samsung 16%
Sharp 3%
Onida 11%
Philips 4%
Sharp 3%
Others 11%
 Brand Of Colour T.V. recall

18%

16%
14%

12%

10%

8%
6%

4%

2%

0%

p
on
LG

ng

s
ny

ic
L

s
d
ar

ar

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BP

on

oc
So

ni
su

Sh

Sh

th
Ph
O
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de

O
na

Sa
Ve
Pa

Interpretation:
Recall value in the consumers mind plays a very important role in purchase
decision. Various factors such as brand image, Advertising impact, plays a
major role in creating a recall.
More the recall, more are the chances that the prospective customer will get
converted in to a active buyer. Data interpretation shows that international
brands like LG, Sony, Samsung are having more recall value. Where as in
domestic segment Vedeocan is followed by Onida.
LG should think of this, as even though being a market leader in the industry
the recall value for the SONY is high compare to LG. Samsung is almost on
the same ground as that of LG. LG. is having a immediate threat from
SONY and SAMSUNG in near future.
Q 6. Which type of colour TV are you having?
Type of colour TV
Option % Respondent
Conventional TV 35%
Flat TV 48%
LCD TV 10%
Plasma TV 8%
Ultra slim TV 0%

Type of colour TV

50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Conventional Flat TV LCD TV Plasma TV Ultra slim TV
TV

Interpretation:
Even though the companies are more concentrating on flat screen TV, LCD
TV, there are still considerable consumers (35%) who are still using
conventional TV. This means, these consumers can be aspiring consumers
for the Flat screen or LCD TV. But market is not that much responding to
the Plasma or Ultra slim TV. Reason could be high price line or target
consumers (Top of the pyramid).

Q7. Do you own multiple TV units? (for bedroom, living room etc)
No of T.V. Sets
Option % Respondent
YES 12.82
NO 87.18

No of T.V. Sets % Respondent

90
80

70

60
50

40

30

20
10

0
YES NO

Interpretation :
Only 12.82 % respondent says that they are having multiple TV units in the
house hold. This means still Indian consumer perceive the Colour TV to be a
family using item and not for individual usage. So, while customizing the
product company should keep in mind this family factor value in mind,
There is still scope for improvement for companies to introduce some
variant which will fulfill the room specific requirement at affordable price.

Q8. How old is your current TV set?

No of years
Option % Respondent
0 - 03 Yrs 29.27
04 Yrs - 06 Yrs. 26.83
07 Yrs - 09 Yrs 14.63
10 Yrs - 12 Yrs 12.20
13 Yrs - above 17.07

No of years % Respondent

30.00

25.00

20.00

15.00

10.00

5.00

0.00
ve
s

s
s.
Yr

Yr

Yr
Yr

bo
3

-a
6
-0

-0

-1
-0

s
0

Yr
s

Yr

Yr
Yr

13
07

10
04

Interpretation :
 Purchasing cycle of the product is very important. Respondent where
subjected to this question to know the purchase cycle of the Colour TV. If
we see the data, almost 56.10 % consumers had changed there colour TV in
last 6 years. Hence, 5 years purchase cycle can be considered by companies
for future strategies.

Q9. Do you intent to buy colour TV in near future? And within how
much time frame?
Intent to buy
Option % Respondent
YES 60
NO 40

Time period
Option % Respondent
with in three months 5.00
Next six months 2.50
Within a year 25.00
with in next Three yrs 15.00
with in next Six yrs 52.50
 Time period %Respondent

60.00

50.00

40.00

30.00

20.00

10.00

0.00
with in three Next six Within a year with in next with in next
months months Three yrs Six yrs

Interpretation:
This findings also support to the earlier suggestion. Almost 52.5%
consumers intent to buy CTV in next 6 years.

Q10. What features would you like to have in your TV?

This was a descriptive question asked to respondent. Idea behind this

question was to know about the consumers perception about the GOOD
FEATURES in the colour TV.
All the expectations of the consumers were jotted down and to bring the
uniformality among the suggestions, they were grouped based on the
characteristics. Following are the expectations of the consumer from a good
colour TV.

• Affordable price
• Good clarity
• Good sound quality
 • Long term durability
• Good Performance
• Over all features
• After sales service,

As a part of consumer behaviour, every Brand has some USP’s to which the
consumers always associate the brand with. Respondent were asked to name
brand against the feature mentioned. The results for the same are as follows.

Q10 A) Which Brand of colour TV is best in terms of PRICE?

Price
Option % Respondent
Samsung 24
LG 20
Onida 20
Vediocon 25
Sony 11
 Price % Respondent

25

20

15

10

0
Samsung LG Onida Vediocon Sony

Interpretation:
Consumers are having a perception of Vediocon and SAmsung among the
top brand based on the pricing.

Q 10 B) Which brand of colour TV is best in terms of clarity?

Clarity
Option % Respondent
Samsung 19
LG 27
Onida 16
Vediocon 10
Sony 28
 Clarity % Respondent

30

25

20

15

10

0
Samsung LG Onida Vediocon Sony

Interpritation

As per the consumer perception Clarity of Sony Colour TV is good,

followed by LG and Samsung

Q 10 C) Which Brand of colour TV is good in terms of sound quality?

Sound Quality
Option % Respondent
Samsung 22
LG 28
Onida 10
Vediocon 12
Sony 28
 Sound Quality % Respondent

30

25

20

15

10

0
Samsung LG Onida Vediocon Sony

Interpretation:

Again the survey findings are in favor of the LG and Sony for sound clarity.

Q 10 D ) Which brand is best in terms of Durability?

Durability
Option % Respondent
Samsung 28
LG 34
Vediocon 14
Sony 24
 Durability % Respondent

35

30

25

20

15

10

0
Samsung LG Vediocon Sony

Interpretation :

Taking in to consideration the consumer perception, LG again lead the

competition.
Consumers perceive LG products more durable compare to competition.

Q10 E) Which brand of colour TV is best in terms of performance?

Performance
Option % Respondent
Samsung 24
LG 30
Vediocon 18
 Sony 28

Performance % Respondent

30

25

20

15

10

0
Samsung LG Vediocon Sony

Interpretation:
Consumers rate LG ahead of all the brands in case of performance.

Q 10 F) Which brand of the colour TV is best in terms of the after sales

service?
Performance
Option % Respondent
Samsung 22
LG 29
Vediocon 16
 Sony 33

After Sales Service % Respondent

35

30

25

20

15

10

0
Samsung LG Vediocon Sony

Interpretation:
Sony provides best after sales service through the CRM of the company.

Q 11. Will you buy the same company which you are currently owning?
Same company
Option % Respondent
YES 42.5
NO 57.5
 Same company % Respondent

60

50

40

30

20

10

0
YES NO

Interpretation:
There is not much difference in the consumers response. Reason for this
could be consumers are unsatisfied with current brand, or they are eager to
try out some new product from different brand.

Q12. From where would you collect data / information about new colour
TV set?
Information Processing
Option % Respondent
Friends 22.05%
Showroom Survey 22.83%
News paper/ magazine 18.11%
 Internet 17.32%
T,V, Commercials 15.75%
Others 3.96%
Information Processing % Respondent

25.00%

20.00%

15.00%

10.00%

5.00%

0.00%

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Interpretation:
Consumers like to acquire required information from traditional methods of
information processing and that is friends, magazines. Due to retail growth
in India the showroom survey is more comfortable for consumers. Internet
information gathering is also on the raising side.
Q 13)What would you take in to consideration while making buying
decision?
Factors
Options % Response
Price 14.9
Quality 18.27
Features Offered 15.87
Style 6.25
Latest Technology 13.46
Aftersale service 13.46
Gifts Offered 3.85
 Brand 13.94

Factors % Response

20
18
16
14
12
10
8
6
4
2
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In previous few questions we have seen that how consumer perceive various
Brands with various features. Now to understand the consumer decision
making process in a better way, it is important to know what are the factors
which consumer take in to account while making decision making. As listed
above various factors are taken in to account by the consumers. Quality,
features and price are on the top of the mind while making buying decision.

Q14. Would you take in to consideration your family members opinion?

Family members Opinion

Option Response
Yes 85
No 15
 Family members Opinion Response

90

80

70

60

50

40

30

20

10

0
Yes No

Interpretation:

Consumer electronics market is considered to be a complex decision making

market. In such a complex market consumer do lot of information
processing . Various external factors influences consumers decision making
process. One of the influencing factor in this process is FAMILY
MEMBERS. In Indian context , Consumer’s family plays a very important
role. To check the influence of the family members above question was
asked to respondent. As expected 85% of the respondent replied that they
will take in to consideration the family members opinion.

Q15. Whose opinion will matter you most ?

Opinion
Option Response
Friends 23.68
Parents 25
Spouse 25
Children 13.16
Salesman 4
 Others 9.16

Opinion Response

25

20

15

10

0
Friends Parents Spouse Children Salesman Others
Interpretation :
As discussed earlier, consumer’s family plays a very important role in
decision making. But apart from family members what all are the factors
which influence the consumers in buying decision? Friends, parent,
spouse , children, salesman, others (office colleague , word of mouth,
brand ambassadors) are influencers. There opinion is count by the
purchaser before making buying decision.
Q16. From where would you prefer to buy your colour TV set. ?

Purchase Point
Option Response
Company Showroom 42.5
Electrical mall 26.5
Local Vendor 12.5
Exhibitions 0
Multi Branded Showroom 18.5
 Purchase Point Response

45

40

35

30

25

20

15

10

0
Company Electrical mall Local Vendor Exhibitions Multi Branded
Showroom Showroom

Interpretation:
Point of purchase is another important factor which always come to
buyers mind. Being a high involvement product, consumers want to buy
the product from the reputed and trustworthy purchase point. When
response from the respondent was analyzed it can be seen that almost
42.5% respondent want to buy product from the companies showroom.
Electronic mall, and multi branded showroom comprise of 44.5% share.
Various exhibitions which company get in to do not form part of the
favorite consumer purchase ponit.
Q17. As a future product what features would you like to add in to colour
T.V.?

Interpretation:
Understanding the consumers need, adding a desire in that need,
converting the same in to want and providing the product to fulfill the
want is the main key for any marketer. For this purpose , by this survey I
tried get insight of what consumer is expecting form the product in near
future? What are the needs of the consumers? What future development
do the consumer want in the product?
If we study and try to understand what need the colour TV basically
address then the question would be need for entertainment, need for
pleasure, need to experience the LIFE by visual and hearing senses.
But is this all that a consumer want from the colour TV?
Survey findings gave a total new insights about the consumers changing
lifestyle patterns, new expectation, creative demands and lot more
possibility to bring the totally innovative products.
Following are the few key expectations of the consumers from the
product :
1. Quality Picture,
 Good Resolution,
 3D Picture,
 Big Screen,
 Can be converted in to proxima when needed for theatre
like experience (actual Home Theatre).
 Screen at both the side !!!

2. Quality Sound,
 Surround Sound
 No of speakers, for better sound quality,
 Natural sound reproduction.
3. Additional features:
 Ergonomic view.
  Ready Set Top Box inside the TV,
 Wire less connectivity,
 Less power consumption when in use,
 Additional features like inbuilt games, music system.
 Artificial intelligence.
4. Techno savvy features:

 Blue tooth connectivity with other devices such as

mobile, computer, camera, camcorder, music system.
 Touch screen menu and remote control,
 USB connect,
 Wireless communication,
 WI FI enabled device,
 User friendly interaction,
 Artificial intelligence (to change the program as per the
mood of user).

In a glance at the features expected by the consumers, we will come to know

that the preferences of the consumer had changed. Now days consumers not
only want entertainment but far more than that. During interaction with
consumers it was observed that Quality Picture, Quality Sound are
considered as the in built features in the product. Those are no more product
differentiation factors. Today consumer had become more demanding in
terms of creative factors. Techno savvy had become need for time.
Expectations from future product are more on this features. Connectivity,
compatible inter phase between various instrument. If we study the features
required by the consumers then it is very much clear that they are more of
technology oriented. Connectivity, USB connection, blue tooth, wire less
connectivity are all in more hype.
So, while developing the future products any organization should keep this
thing in mind.

TOTAL PRODUCT CONCEPT

Following is the diagram of total product concept. Total product
concept talks about the basic, core product. Followed by formal
product, in this, concept talks about what primary need those are
fulfilled by the core product. Then comes the augmented product,
 which tells what all are the other benefits the product is offering
which will attract consumer to buy the product. Then followed by
the future product, consumers idea or the expectations from the
future product.

Ergonomic view
Great resolution
Wireless
Big Screen connectivity
Customer relationship
management

Big Screen Ready set top CORE

Free installment box
Product
Picture clarity Any time help
Inbuilt proxima Call centre
Sound clarity
Video
out put
Formal
Less power
Tube, screen
consumption Product
type
Warranty
Screen at both
Guarantee Colour
The side Various
TV brands Augmented
No of channels Inbuilt games
Product

Gift vouchers Features offered

Exchange offer
Surround Audio out put Artificial intelligence
Future
sound
Product
O % finance Dealer reputation

Natural sound
Reproduction After sales service Blue tooth
connectivity

Touch screen menu

3 D view
and remote
User friendly control
WI FI
interactions

CONSUMER BEHAVIOR
The aim of marketing is to meet and satisfy target customers’ needs and
wants. The field of consumer Behaviorstudies how individuals, groups, and
organizations select, buy, use, and dispose of goods, services, ideas, or
experiences to satisfy their needs and desires. The consumer buyer
Behavioris the buying Behaviorof final consumer–individuals and
households who buys goods and services for personal consumption.
Understanding consumer Behaviorand “knowing customers” are
never simple. Customers may state their needs and wants but act otherwise.
They may not be in touch with their deeper motivations. They may respond
to influences that change their mind at the last minute. Nevertheless,
marketers must study their target customers’ wants, perceptions, preferences,
and shopping and buying behavior:
Studying consumers provides clues for developing new products, product
features, prices, channels, messages, and other marketing-mix elements.

A Model of Consumer Behavior

At one time, marketers could understand consumers through the daily
experience of selling to them. But the growth of companies and markets has
removed many marketing managers from direct contact with customers.
Increasingly, managers have had to rely on the 7 O’s framework for
consumer research to answer the following key questions about any market:
Who constitutes the market? Occupants
What does the market buy? Objects
Why does the market buy? Objectives
Who participates in the buying? Organizations
How does the market buy? Operations
When does the market buy? Occasions
Where does the market buy? Outlets
The starting point for understanding buyer behavior is stimulus-response
model shown below. Marketing and environmental stimuli enter the buyer’s
consciousness. The buyer’s characteristics and decision process lead to
certain purchase decisions. The Marketer’s task is to understand what
happens in the buyer’s consciousness between the arrival of outside stimuli
and the buyer’s purchase decisions. They must answer two questions:

How do the buyer’s characteristics-cultural, social, personal, and

psychological-influence buying behavior?
How does the buyer make purchasing decisions?

Marketing Other stimuli Buyer’s Buyer’s decision Buyer’s

stimuli characteristics process decision
Product Economic Cultural Problem Product choice
Price Technological Social Recognition Brand choice
Place Political Personal Information search Dealer choice
Promotion Cultural Psychological Evaluation Purchase Timing
Decision Purchase amount
Post Purchase
Behavior

TYPES OF CONSUMER PURCHASING DECISION :

The process by which the consumers make purchasing decision must be
understood in order to develop a strategic application. Consumer decision
making is not a simple process. Deciding to buy a car is different than the
deciding to buy a tooth paste. Following figure presents a typology of
consumer purchasing decisions based on two dimensions:
• Extent of decision making
 • The degree of involvement in purchase.

High Involvement Low Involvement

Purchase Decision Purchase Decision

Decision Making Complex Decision

Variety seeking
(Information Search,
consideration of
Making (Cereals)
(Autos, Electronics Appliances)
brand alternatives)

Habit
(Little or no Information Inertia
Search, consideration of Brand Loyalty (canned Vegetables,
only one brand) (Cigarettes, Perfumes) Paper Towels)
The first dimension represent a continuum from decision making to habit.
Consumers can base their decision on a cognitive process of information
search and evaluation of brand alternatives. On the other hand, little or
no decision making may take place when consumer is satisfied with a
particular brand and purchase it consistently.
The second dimension depicts a continuum from high to low
involvement product. High involvement purchase are those that are
important to the consumers. Such a purchases are closely tied to the
consumers ego and self image and involve some financial, social,
personal risk. In such cases it worth consumer’s time and energy for
information search. Low involvement purchase are not important to
consumer and risk involve is less.
Decision making versus habit and low versus high involvement produces
four types of consumer purchase processes. The first process is called as
Complex decision making, it takes place when involvement is high and
decision making occurs. In such a types of cases consumers have the time
for active information search and process it in more details. They use this
information to evaluate and consider the alternate brand by applying specific
criteria such as economy, durability, and service.
Complex decision making will not occur every time the consumer purchase
a brand. When choice is repetitive the consumers learns from the past
experience and with little or no decision making buys the brand that is most
satisfactory. Such a Brand loyalty is the result of repeated satisfaction and
strong commitment to a particular brand. In such cases purchase is important
for the consumers. Also it should be noted that decision process are
consumer specific rather than product specific. That is the degree of
involvement and decision making depend more on the consumer’s attitude
toward the product than on the product’s characteristics. One consumer
might be involved with the product because of some specific characteristics.
Another might not give importance to these characteristics and switch brand
in search of variety.
CONSUMER INVOLVEMENT AND COMPLEX DECISION
MAKING:
As seen earlier two conditions for complex decision making are
• Decision process require extensive information
processing,
• High degree of consumer involvement with the product.
Therefore to understand the complex decision making, we will first consider
the nature of the consumer involvement and then describe the nature of the
consumer decision process.

INVOLVEMENT AND INFORMATION PROCESSING :

The reason that involvement is link to complex decision making is,
generally, higher level of involvement the greater the search for the
information (refer fig ). Such a information processing defines complex
decision making.
Also, a high level of involvement does not always lead to complex decision
making. In some cases consumer may be involved with product and consider
only one brand (refer fig). Such a brand loyal consumers are satisfied with a
brand based on repeat purchase and do not feel the need to engage in
extensive information processing.
Even when decision making does take place, involve consumers are likely to
vary greatly in the extent of information processing. And consider
alternative brand in the next purchase. The only choice may be model and
option. Even when decision making takes place, involve consumers are

Complex
Decision
Extensive Making
Information
processing

High level of
involvement

Little or no
Information
processing
Brand
Loyalty

likely to vary greatly in the extent of information processing. Some may

evaluate just few brands on one or more attribute. Others may evaluate a
larger no of brands on many attributes. This means that extent of information
processing should be regarded as continuum from high to low and the degree
of decision making should be regarded on a continuum from low to
complex.
There are two types of involvement with the products, namely Situational
involvement occurs only in specific situation and is temporary. Where as
enduring involvement is continues and is more permanent. Both these are
likely to result in the complex decision making.
A different approach is needed in targeting those with enduring versus
situational involvement. The deep seated nature of enduring involvement
means that symbol and images are likely to used to connect the consumer
with the product. In targeting the situational involvement more specific
appeals to particular context of purchase will be made.

COMPLEX DECISION MAKING :

In complex decision making consumers evaluate brands in details and
comprehensive manner. More information is sought and more brands are
evaluated than in the other types of decision making situations.
Conditions for complex decision making are as follows,
• High priced product,
• Products associated with the performance risk,
(medical products, automobiles)
• Complex products ( Electronic gadgets, personal
computers)
• Products associated with ones ego.

The nature of the product is not the only conditions for complex decision
making. Certain facilitating conditions need to exist. The most important is
adequate time for extensive information search and processing.
Complex decision making will not occur if a decision must be made quickly.
Also consumers may not have time to devote to extensive information
processing because of business and social obligations may have higher
priority.
Second condition for complex decision making is the availability of
adequate information to evaluate alternative brands. Consumers some times
delay in decision making because of insufficient and inaccurate information.
Decision making is delayed when there are too many products
characteristics and features to consider.

THE BUYER DECISION PROCESS

The buyer decision process consist of Five Stages-:

• Need recognition,
• Information search,
• Evaluation of alternatives,
• Purchase decision, and
• Post purchase behaviour.
Clearly the buying process starts long before actual purchase and continues
long after. Marketer need to focus on the entire buying process rather than
on just the purchase decision.

1. NEED RECOGNITION- The first stage of the buyer decision

process in which the consumer recognizes a problem or need.

2. INFORMATION SEARCH- The stage of the buyer decision
process in which the consumer is aroused to search for more
information; the consumer may simply have heightened attention or
may go into active information search.
3. EVALUATION OF ALTERNATIVES - The stage of the buyer

decision process in which the consumer uses information to evaluate

alternative brands in the choice set.
 4. PURCHASE DECISION- The stage of the buyer decision process in

which the consumer actually buys the product.

5. POST PURCHASE BEHAVIOUR-The stage of the buyer decision

process in which the consumer take further action after purchase

based their satisfaction or dissatisfaction.

Consumer
Need Information
Arousal Processing

Feedback

Post Brand
Purchase
purchase Evaluation
Evaluation

As seen in the above figure and as explained in the above points consumer
buying Behavior is a five step process. This process starts with need
recognition and completes it’s loop with post purchase evaluation feedback
to the consumer. It is an on going process. It never stops even after the
purchase is happened. Consumers feedback may initiate the purchase
decision of the other buyer. Hence it becomes very important for the
company to make the entire experience of the buying a memorable one for
the consumer. So, that he/she become self impose Brand ambassador for the
product and endorse the product in the market.
But is it so easy for any consumer to buy the product? How does the
decision making happens in various products? Is it same complexities in all
products?

For colour TV as a product, it is a COMPLEX DECISION MAKING

process. Because in the buying process of the color TV purchasing,
consumers involvement is very high. In Indian context still the buying of
colour T.V. is considered as the high risk and high emotional and
economical involvement procedure. Still for majority of the house hold
buying a colour TV is a buying luxuries thing. Consumer him self , family
members all get involved in the entire process. As the survey finding
suggest, many consumers would like to do lot of information processing
from various information sources. Consumers don’t mind doing a show
room surveys, going through various news papers, magazines, active search
for information is also involved from Internet.
Survey findings also suggest that 86.05% consumers will take in to
consideration the family members opinion. This clearly indicates that the
there is high involvement of the family members. Now, about the
information processing, if we see the survey findings then it can be seen that
consumer take in to account various factors such as ,
Quality
Features offered,
Style
Latest technology,
After sales service,
Gifts offered,
Brand
8. Price
Consumer takes in to account so many factors while evaluating the
Product !!!
It clearly shows how complex the decision making process is.

If we see the survey findings for buying the same product or from same
company to that matter. Consumers are not very much sure about the
decision. Only 44.19 % consumers responded positively where as
remaining things otherwise. Now what does this means? Consumers are
not very sure about their association with a particular Brand. Probably
Consumers want to try different Brand next time. So, slowly, slowly
Brand loyalty is getting diluted from this segment of the market. Which
was not the case earlier. Consumers used to be very much Brand loyal
with the particular brand for years. But changing globalization and
market environment is shifting the Consumer’s focus from being Brand
Loyal.

MARKETING MIX
Marketing mix can be defined as the set of controllable tactical marketing
tools – product, price, place, promotion-that the firm may blend to produce
the response it wants in the target market.

PRODUCT-Product means the goods and services combination the

company offers to the target market. In case of color television it includes
variety, quality, design feature, brand name, packaging, services that are
offered along with the television.

PRICE- It is the amount of money the customer have to pay to obtain the
product (CTV). It includes list price, discount, allowances, payment period,
credit terms.

PLACE- It includes company activities that make the product available to

target consumers. Channels, coverage, assortments, locations, inventory,
transportation, logistics becomes the part of place

PROMOTION- Promotion means activities that communicate the merits of

the product and persuade target consumer to buy it. various promotional
activities are advertising, personal selling, sales promotion, public relations.

FACTORS AFFECTING CONSUMER BEHAVIOR

Consumer purchases are influenced strongly by cultural, social, personal, and

psychological characteristics. For most marketer cannot control such factors, but
they must take them into account.
 (a) CULTURAL FACTORS
Cultural factors exert the broadest and deepest influence on the
consumer behavior the marketer needs to understand the role played by
the buyer’s culture, subculture, and social class.
• Culture- the set of basic values, perception, wants and behavior learned by
the member of the society from family and other important institutions.
• Subculture- a group of people with shared values system based on common
life experiences and situations.
• Social class- relatively permanent and division in a society house members
share a similar values, interests, and behavior.

(b) SOCIAL FACTORS

A consumer’s behavior is influenced by social factors, such as the
consumer’s small group, family and social roles and status
o Group- Two or more people who interact to accomplish individual
or mutual goals.
o Family- The family members (husband, wife, children) can
strongly influence buyer behavior
o Role and Status- Role consist of the activities people are expected
to perform according to the persons around them.
Status reflect the general esteem given to it by the society.
people often choose the products that show their status in the
society.

(c) PERSONAL FACTOR

 A buyer decision also are influenced by personal characteristics
such as the buyer’s age life style, and life cycle stage, occupation ,economic
situation , lifestyle , and personality and self concept.
o Age and Life cycle stage- People change the goods and
services they buy over their lifetime. Tastes of the people
undergo change with their age.
o Family life cycle- the stages through which families might pass
as they mature over time.
 Occupation – A person’s occupation also affect the
goods and services they bought
 Life Style- A person’s pattern of living as expressed in
his/her activities, interest, and opinion.
 Personality-A person’s distinguishing psychological
characterstics that lead to relatively consistent and lasting
responses to his or her own environment.

(d) PSYCHOLOGICAL FACTORS

A person’s buying choices are influenced by four major
psychological factors: motivation, perception, learning, and beliefs and
attitudes.
(i) Motivation- A need that is sufficiently pressing to direct the person to
seek satisfaction of the need.
(ii) Perception- The process by which people select, organize, and
interpret information to form a meaningful picture of the world.
(iii) Learning- Changes in the individual’s behavior arising from
experience.
(iv) Beliefs and Attitude- Belief is a descriptive thought a person hold
about something.
Attitude is a person’s consistently favorable or unfavorable
evaluation, feelings, and tendencies towards an object or idea.

FOLLOWING THE MARKET LEADER

During the entire Survey and study one thing was observed that even after
being the late entry in the market and being a MNC, LG India had out
performed in all segment of consumer durable and consumer electronic market.
For most of the consumers LG is having maximum recall value. Hence in the
ending up sessions of the project, L India was studied for the understanding of
the success of the leader.
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
consumers. 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, have
divided the introduction part into three main sub parts.

1. LG Global
2. LG India
3. LG

History of company:
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
1970-79 GoldStar symbol of The Technolgoy

1980-88 :- INTERNATIONALIZATION

1989-94 INOVATION
1995-98 GLOBAL LEADERS LG ELECTRONICS

1999-2003-DIGITAL MANAGEMENT
2004-2006 GREAT PEOPLE GREAT DESIGN

2007-THE PEOPLE COMPANY

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.

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
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

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.

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.

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 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 .
 THE PARTNERSHIP

LG Electronics chooses to promote harmony and build constructively on a

labor-management relationship rather than an employee-employer
relationship. This illustrates that management and workers are not in a
vertical relationship, but in a horizontal one.

This culture is necessary for LG Electronics as it strives to become one of

the world's top companies. Such a relationship is transformed into a value-
creation relationship 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
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 –

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
 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.

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

1. New Machine

2. Reliability

3. Conventional Installation

4. Environment Friendly Product

5. Low Noise & Vibration

6. Energy Saving
 Quality Innovation

The policy of quality assurance is to provide customers with

utmost satisfaction by supplying zero defects.

LG proceeds in a hierarchal manner. It is named as “LG WAY”.

From top to bottom:

No.1 LG – is the VISION

“Jeong-DO” Management is LG’s unique application to ethics. LG will

succeed through fair management practices and constantly developing our
business skill.
A) Honest with our customer

b) Providing great values to customer through constant

innovation & and development.

c) Equal opportunities

d) Equal Treatment

Management Principle - Creating value for customer

Code of conduct of LG

1. Responsibility and obligations to customers :

• Respect for Customers

• Creating Value
• Providing Value
2. Fair competition

• Pursuit of Free Competition

• Compliance with Laws and Regulations

3. Fair Transaction :

• Equal Opportunity
• Fair Transaction Procedure
• Support and Aid for Business Partners

4. Basic Ethics for Employees

• Basic Ethics
• Completion of Duty
• Self Development
• Fairness in Performance
• Avoidance of conflict with company interest

5. Corporate Responsibilities to employees

• Respect for human dignity

• Fair Treatment
• Promoting Creativity
 6. Responsibilities to society and country

• Rational Business Development

• Protection of stock holder interest
• Contribution to social development
• Environmental Conservation

LG INDIA
LG Electronics India Pvt. Ltd., a wholly owned subsidiary of LG
Electronics, South Korea was established in January 1997 after clearance
from the Foreign Investment Promotion Board (FIPB). LG set up a state-of-
the art manufacturing facility at Greater Noida, near Delhi, in 1998, with
an investment of Rs 500 Crores.

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

Greater Noida, India. This facility manufactured Color Televisions, Washing
Machines, Air-Conditioners and Microwave Ovens.

''Company is setting up a chain of exclusive premium showrooms. LG plans

to launch 60 premium Brand Shoppes by the end of the first quarter of this
year. At present, LG has a total of 83 LG stores across the country, of which
45 are 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.
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.
The said money will be used to market as well as manufacture new products.

LG Electronics, which is originally a South Korean Company with branch in

India, informed that its sales of GSM mobile phones, color televisions, air
conditioners and other household goods in the Indian market was to the tune
of 95 billion rupees ($2.4 billion) in 2007. As per Shin's estimate, the sales
in 2008 would be around 110 billion rupees. In order to achieve its target,
Shin said LG Electronics will concentrate on catering to the high-end
consumer market which will help boost sales this year. India churns out six
(6) per cent of LG Electronics global revenues of $42 billion. The Indian
branch of LG exports to 40 countries.

India challenges

The challenges faced by LG when entered in Indian market

1. Low brand awareness about LG in India.

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

entered in 1995 in India).

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.

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 Pune. Both
the unit carry out R&D department for the domestic as well as the parent
company it also dose customize R&D for the specific countries to which it
export product.
Regional channel and wide distribution network

1. LG has adopted the regional distribution channel in India.

All the distributers work directly with the company. This

has resulted in quicker rotation of the stock and better

penetration into B, C, D, class market.

2. LG also follows the stock rotation policy rather 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
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 washing machine in various states in INDIA

LG position of AC in various states in INDIA

LG position of Audio & Home Theatre in various states INDIA

LG position of DVD 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 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, 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.

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):-

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

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. 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 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). This shows commitment
that Service must be made into a marketing differentiator, and leveraged
thus.
7. LG has the widest service network across the country; some estimates put
it at a significant multiple of service-infrastructure from our nearest
competitor. While the sale size may also be a nice multiple from nearest, it
shows the company is ready to put our money where our mouth is.
8. The company has introduced a 211 service - once you register your
complaint, we will call you back in 2 hours (hence 2), set up an appointment
for the next convenient day for you (hence the first 1), and show up in the
promised 1-hour slot (hence the second 1). If the next convenient day for
you is the next day, 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.

RECOMMENDATIONS AND SUGGESTIONS

1. LG should improve it’s after sale service because its hits badly LGs
market share.

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.

LIMITATIONS
Every study has certain limitations. In my study, also there were certain
limitations, which I could not able to solve.

1. The research was conducted in a small area.

2. My research work period witness the ups and downs in product sale of
different brands, which affected the perception of the customer. This
was biggest drawback of my study.
 3. The sample size is also very which represent my research on

consumer behavior.
4. Rural area coverage was limited due to the consumers passiveness
towards the survey.
5. Due to passiveness and Geographic limitations of showroom owners,

consumers buying Behavior could not be studied in great details while

actual buying.

Never the less whatever support I have got from consumers, survey
respondent, Showroom owners is highly appreciable.

BIBLIOGRAPHY

 www.lgindia.com
 www.google.com

 www.wikipedia.com

 Business world
 Business today
 Economics times News paper
 Times of India
 “ Consumer Behavior and Marketing Action” … by Henry Assael

 Show Room Survey:

o Vijay Sales ( Karghar, Navi Mumbai),

o Kings Electronics ( Kharghar, Navi Mumbai)

o Shri Shakti Electronics ( Dhule),

o Madhu Electronics (Nasik).