Escolar Documentos
Profissional Documentos
Cultura Documentos
PROJECT REPORT
ON
Submitted to Submitted by
School of Business Management Raghunandan Jariyal
Govt. PG College, Dharamshala BBA VIth Semester
Roll No.: 7928
Project Guide
Mrs. Meenakshi
Assistant Professor
Dept. of BBA
DEPARTMENT OF BBA
SCHOOL OF BUSINESS MANAGEMENT
GOVT. POST GRADUATE COLLEGE
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DHARAMSHALA
2
DEPARTMENT OF BBA
SCHOOL OF BUSINESS MANAGEMENT
GOVT. PG COLLEGE DHARAMSHALA
3
Acknowledgement
At last but not least I would like to thank my dedicated and respected
parents who were supported all the time and also to my friends who gave me a
constant support and suggestions for preparation of my research report.
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DECLARATION
Date: Raghunandan
BBA VIth Sem
Roll No.: 7928
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PREFACE
There is a great saying The theory without practical is lame and practical
without theory is blind.
It has been identified that in the beginning of 21 st century the market was
observed a drastic change. The successful brand presents itself in such a way
that buyers buy them in special values which match their needs.
Certainly this analysis explores my ability and strength to its fullest extent for
the achievement of organization as well as my personal goal.
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INDEX
INTRODUCTION
History
RESEARCH METHODLOGY
Objectives of study
CONCLUSION
Findings
Suggestions
QUESTIONNAIRES
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Executive Summary
Indian Consumer durables market used to be dominated by few domestic
players like godrej Voltas allwyn and kalvinater. But post liberalization much
foreign company have entered into Indian market dethroning the Indian player
and dominating Indian market the major categories in the market CTV,
REFRIGRATOR, AIR CONDTIONERS AND WASHING MACHINE.
India being the second largest growing economy with huge consumer
class has resulted in consumer durables as the fastest growing industries in India
LG, SAMSUNG the two Korean companies has been maintaining the lead in
the industries with LG being leader in almost all the categories.
The rural market is growing faster than the urban market, although the
penetration level is much lower .The CTV segment is expected to the largest
contributing segment to the overall growth the industry. The rising income
levels double-income families and consumer awareness are the main growth
drivers of the industries.
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within two hours. The fixing time for complaints varies from one
hour to a maximum of 24 hours.
CHAPTER 1
INTRODUCTION
9
The company was originally established in 1958 as Gold Star, producing radios, TVs,
refrigerators, washing machines, and air conditioners.
The company started in 1947 under the trading name Lak Hui. Back then, it was not yet an
electronics company but more of a cosmetics and trading business. Then by 1958, Gold star
was established by In-Hwoi Koo, who was the founder of Lak Hui. It should be known that
Gold star made the first radio in Korea. The letter G in LG Electronics today traces its roots
from Gold star-its original brand name.
Then in the 1960's, Gold star, which was the electronics division of Lak Hui expanded
exponentially. By 1962, Gold star radios were exported to countries like the United States of
America. In 1965, Gold star produced the first refrigerator in Korea. Then the following year,
10
they made Korea's first black and white television. Then in 1968, Korea's first air-
conditioning unit was produced and followed the succeeding year. As shown here, when
Electronics was still known as Gold star, it was already the pioneering home appliance
manufacturer in its native South Korea.
In the 1970's, Koo Cha-Kyun took over the leadership of the company. Under him, Luk Hai
changed its name to "Lucky", therefore forming the original meaning of the letter L in LG
Electronics. As a pioneer of electronics invention, they made the first colored television in
Korea in the year 1977. By 1978, their exports reached US $100 million.
Then in the 1980's LG Electronics was already using the initials LG to refer to Lucky Gold
star. It expanded throughout the entire decade. The first European subsidiary was established
in Germany. A color TV manufacturing plant was established in the United States of America.
Then a European standard VCR manufacturing plant was inaugurated in Germany. Then by
the end of the decade, the company already had a sales subsidiary and a joint production
subsidiary in the Southeast Asian region as they established one in Thailand. In the history of
LG, the 1980's is known as the decade of international expansion. LG Electronics, then
known as Lucky Gold star was selling cheaper home appliances and other forms of
telecommunications devices compared to Japanese brands.
In the 1990's, the company was becoming more aggressive in the international market. By
early 1990, they put up an Ireland-based design technology center. Then in 1993, with the
inauguration of the Huizhou subsidiary, their marketing in mainland China got bigger. It was
in 1995 that Lucky Gold star officially changed its name to Electronics. In the same year,
they acquired the US-based company named Zenith. In 1997, LG Electronics established a
subsidiary in India. The following year the company made the world's first 60-inch PDP TV.
In 2000, LG Electronics launched a refrigerator that can be bought through the internet. They
were also becoming the leading brand when it comes to LCD TV, mobile phones, and
computer hardware. In 2001, LG Electronics launched home appliances that can be bought
via the internet. These were LG Electronics' newest models of washing machine, air
conditioner, and microwave oven. It also became the market leader in Australia's CDMA
market. LG Electronics also augmented their GSM mobile handsets exports to European
countries such as Russia and Italy. In 2003, it became the top global CDMA producer. Then it
also entered the Northern European and Middle East GSM market. In 2007, LG Electronics
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demonstrated the world's first MIMO 4G-Enabled Technologies with 3G LTE. Then in 2008,
the company went a gradual change as the LG no longer represents Lucky Gold star but the
new company logo "Life is good", which also incidentally is its new brand identity.
The trajectory of LG Electronics, its growth and diversification, has always been grounded in
the company ethos of making our customers' lives ever better and easier-happier, even-
through increased functionality and fun.
Since its founding in 1958, LG Electronics has led the way to an ever-more advanced digital
era. Along the way, our constantly evolving technological expertise has lent itself to many
new products and applied technologies. Moving forward into the 21st century, LG continues
to on its path to becoming the finest global electronics company, bar none.
1958 Founded as Gold Star 1959 Produce Korea's first consumer radios 1998 Introduce the
60-inch plasma TV 1999 Forge joint venture with Philips 2003 Enter UK GSM handset
market 2005 Develop 3G UMTS DMB handset 2007 Launch HD disc-player and drive
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BUSINESS AREAS AND MAIN PRODUCTS
Mobile communications
(a) CDMA Handsets,
(b) GSM Handsets,
(c) 3G Handsets,
(d) Cellular Phones
Digital appliances
a) Air Conditioners,
b) Refrigerators,
c) Microwave Ovens,
d) Washing Machines,
e) Vacuum Cleaners,
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f) Home Net,
Digital displays
a) Plasma TVs,
b) LCD TVs,
d) Monitors,
e) PDP Modules,
f) OLED Panels,
g) USB Memory,
Digital media
a) Home Theater Systems,
b) DVD Recorders,
d) Notebook PCs,
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VISION
GROWTH STRATEGY
CORE COMPETENCY
CORPORATE CULTURE
SLOGAN
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LG SYMBOL
The circle in the logo represents the globe, i.e. the full reach of LG aspiration to emerge as a
global company. It also implies the face of a smiling customer, conveying that we are
extremely customer focused or that LG represent a world that is futuristic, youthful and
humane.
The bulls eye on the circle represents the organizations single minded focus on goals and
determination to achieve results with a smile.
The white space deliberately left at the upper right end stand for adaptability and the hidden
potential of creativity.
The red color conveys friendliness and LGs commitment to quality, while the gray stands for
technology and reliability.
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
LGs efforts to keep close relationship with our customers around the world.
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BRAND IDENTITY
Positioning
LG strives to enhance the customers life (and lifestyle) with intelligent features, intuitive
functionality, and exceptional performance. Choosing LG is a form of self-expression and
self-satisfaction. Our customer will take pride in owning the amazing and take comfort in
knowing he/she made a smart, informed decision.
Brand Platform
The LG brand is comprised of four basic elements: values, promise, benefits, and personality.
Click each element for further details.
The Face of the Future: The meaning and inspiration behind LGs logo
design.
The letters L and G in a circle symbolize the world, future, youth, humanity, and
technology. Our philosophy is based on Humanity. Also, it represents LGs efforts to keep
close relationships with our customers around the world.
The symbol consists of two elements: the LG logo in LG Grey and the stylized image of a
human face in the unique LG Red color. Red, the main color, represents our friendliness, and
also gives a strong impression of LGs commitment to deliver the best. Therefore, the shape
or the color of this symbol must never be changed.
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Face
The stylized image of a smiling face is meant to convey company friendliness and
approachability. That the portrait is one-eyed conveys LGs profile as goal-oriented, focused,
and confident.
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Circle
The circle represents the globe, symbolizing the world and all of humanity, as well as youth
and the future.
Shape
The upper-right corner of the LG logo, intentionally left blank, makes the design distinctly
asymmetrica nod to LGs creativity and adaptability to change.
Colors
LG Red, the main color, symbolizes friendliness, and is also meant to convey LGs
commitment to delivering the best. LG Gray represents technology and reliability.
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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.
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.
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Electronics with our expertise. Motivated by a passion for technology, a strong work culture
and loyalty to the organization, we are determined to see LG become one of the top three
brands globally.
Prominent consumer electronic company, LG Electronics Inc. has said that it expects the sale
of its products in India to up by 15 per cent in 2008. Moon Bum Shin, managing director of
LG Electronics India has said that the company has earmarked 4.8 billion rupees for
investment purpose in India this year. The said money will be used to market as well as
manufacture new products.
LG Electronics, which is originally a South Korean Company with branch in India, informed
that its sales of GSM mobile phones, color televisions, air conditioners and other household
goods in the Indian market was to the tune of 95 billion rupees ($2.4 billion) in 2007. As per
Shin's estimate, the sales in 2008 would be around 110 billion rupees. In order to achieve its
target, Shin said LG Electronics will concentrate on catering to the high-end consumer
market which will help boost sales this year. India churns out six (6) per cent of LG
Electronics global revenues of $42 billion. The Indian branch of LG exports to 40 countries.
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
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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 its 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 increase the share of mass media even as overall marketing spends would be raised
by just about 10-15%.
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India challenges
2. One of the last MNCs entered in India (Samsung, Panasonic entered in 1995
in India).
4. Competition from local market players and other MNCs in consumer durable
segment.
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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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.
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 than dumping stock on channel
partners.
Product localization
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.
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6. Leveraging Indias IT advantage - LG Electronics has awarded a contract to develop IT
solutions to LG Soft India (LGSI). The project involves development and support for
ERP, SCM, CRM and IT-enabled services for LG.
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LG market share of consumer appliances and consumer
electronics
1. LG position of CTV in various states in India:
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2. LG position of REF in various states in India
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3. LG position of AC in various States in India
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4. LG Position of WM in various states in India
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5. LG position of Audio & Home Theater in various in India
6.
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7. 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. I select different brand in
different category as per the market share and the demand of product in market. This analysis
represents the LG market position during the period of March 2008. It shows that LG has
captured maximum market share almost in every category. LG and Samsung have the
maximum market in consumer durable market but LG dominate the almost all the category in
consumer durable.
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CHAPTER -2
Research Methodology
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PROCESS OF RESEARCH
Research design
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Research Methodology:
Research design:
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.
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Types 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 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
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information can be collected per unit of cost. In addition, it is obvious that a sample
survey needs less time than a census inquiry. Descriptive research includes survey and
fact finding enquiries of different kinds of the major purpose. Descriptive research is
description of the state of affairs, as it exists at present. The main characteristic of this
method is that the researcher has no control over the variables; he can only report
what has happened or what is happening. The methods of research utilized in
descriptive research are survey methods of all kinds including comparative and co
relational methods. The reason for using such needs to be flexible in its approach, but
a descriptive study in contrast tends to be rigid and its approach cannot be changed
ever now and then.
LIMITATIONS
Every study has certain limitations. In my study, also there were following limitations:
After the research problem, we have to identify and select which type of data is to
research. At this stage; we have to organize a field survey to collect the data. One of
the important tools for conducting market research is the availability of necessary and
useful data.
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Primary data: For primary data collection, we have to plan the following four
important aspects.
Sampling
Research Instrument
Secondary Data - The Companys 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.
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CHAPTER -3
Analysis of Data
and
Interpretation
38
Analysis
Yes
No
Inferences
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.
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Q.2. While purchasing consumer durable which parameter influences you?
Price
Product feature
Brand
Service
Durability
Inferences
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.
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Q3. From where you prefer buying consumer durables
Exhibitions
Co. shoppee
Showroom
Inferences
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.
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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
Inferences
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.
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Q.5.Which consumer durable you have and of which brand?
CTV
LCD
PLASMA
REF
WM
MW
AC
Inferences
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.
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Q.6. How frequently you change your consumer durables?
1-3 years
3-5 years
5-10 years
Inferences
1. Customers prefer to change consumer durables within 5-10 years. In India people do
not change consumer durable frequently.
3. It represent that Indian consumer do not prefer to change their consumer durable
frequently.
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Q.7.Do you prefer any financing scheme to purchase consumer durables?
Yes
No
Inferences
45
FINDINGS
1. Secondary supports play an important role in the customers mind and create
awareness among the customers. The secondary support includes Demonstration,
Exhibition & Even Sponsors.
2. From the survey it was found out that the majority of customers dont 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 ISDs 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.
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RECOMMENDATIONS AND SUGGESTIONS
1. Exhibitions do not help to generate so much sale 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.
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 companys 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.
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BIBLIOGRAPHY
www.lgindia.com
www.google.com
www.wikipedia.com
Business world
Business today
LG magazine
Economics times News paper
Times of India
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ANNEXURES
49
ABBREVIATIONS
50
QUESTIONNAIRE
Q1. Have you purchased any consumer durable during Exhibitions?
a) Yes
b) No
Q.4.You prefer to buy from the same as you have mentioned in Q.3 because of
following reasons
a) Attractive Price
b) Service
c) Demonstrations
d) Offers
e) Convenience
51