A STUDY TO UNDERSTAND CUSTOMER PREFERENCE OF LG CONSUMER DURABLES IN INDORE

Major Research Project

Submitted towards partial fulfillment of Master of Business Administration Awarded by Devi Ahilya VishwaVidhyalaya, Indore

Guided By: Prof. Shahina Qureshi

Submitted By:
Vinay Pradhan MBA IV Semester Roll. No.11706674

Faculty of Management, Acropolis Technical Campus, Indore

1|Page

CERTIFICATE

This is to certify that the Major Research Project Report entitled A STUDY TO
UNDERSTAND CUSTOMER PREFERENCE OF LG CONSUMER DURABLES IN INDORE, which is being submitted herewith for partial fulfillment of requirement

for award of the degree of Master of Business Administration (Full time) by Devi Ahilya VishwaVidhyalaya (DAVV), Indore is successfully completed by Vinay Pradhan under my supervision and guidance.

Date:

Prof. Shahina Qureshi

Countersigned:

Internal Examiner

External examiner

2|Page

DECLARATION

I, Vinay Pradhan, hereby declare that the Project Report entitled A STUDY TO UNDERSTAND CUSTOMER PREFERENCE OF LG CONSUMER DURABLES IN INDORE is an authentic work done by me under the supervision of Prof. Shahina Qureshi. The Study was undertaken as a part of the course curriculum of MBA IV Semester (Full Time) of Faculty of Management, Acropolis Technical Campus, and Indore affiliated to Devi Ahilya VishwaVidhyalaya (DAVV), Indore. This project work does not contain any part of any work which has been submitted for the award of any degree either in this university or in any other University/ Deemed University without proper citation.

Date:

Vinay Pradhan MBA IV Semester

3|Page

ACKNOWLEDGEMENT

would

like

to

acknowledge

my

project

guide

Prof.Shahina

Qureshi

for guiding me in my research project. Her/his encouragement, time and effort are greatly appreciated. I would like to thank all the respondents who offered their opinions and suggestions for the survey that was conducted by me and all those who supported me directly or indirectly in completing my Major Research Project.

Date:

Vinay Pradhan MBA IV Semester

4|Page

INDEX

Chapter No. 1 2 3 4 5 6 7 8 9 10 11 12 13

Chapter Name INTRODUCTION REVIEW OF LITERATURE

RATIONALE OF THE STUDY

Page No. 6-24 25 26 27 28-29 30-37 38 39 40 41-42 43 44 45-48

OBJECT OF THE PROJECT RESEARCH METHODOLOGY DATA ANALYSIS FINDINGS LIMITATIONS

RECOMMENDATIONS AND SUGGESTIONS

SCOPE OF PROJECT CONCLUSION BIBLIOGRAPHY APPENDIX/QUESTIONNAIRE

5|Page

INTRODUCTION

Preface

It is a matter of great honor for me to present before my humble readers this project based on Market Analysis of LG Consumer Durables. The data collected by me is both primary as well as secondary.

This report on Market Analysis of LG Consumer Durables is the outcome of my effort. This report can be easily understood by any person because I try to make more elaborate of this report.

This report is design in easy language so that all readers dont face any problem on this report.

In this report has done the analysis on LG Consumer Durables. Analysis report is represented by the graph so that can easily understand by any person.

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 Cores.

LG corporate office is located at Plot no.51, Udyog Vihar, Kasna Road, Greater Noida, and India. This facility manufactured Color Televisions, Washing Machines, AirConditioners 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.
6|Page

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 core.

LG Electronics India is the fastest growing company in the consumer electronics, home appliances, and computer peripherals industry today. LG Electronics is continually providing, superior technology products & value for money to more than 50 lakh households in India. LGEIL is celebrating the 11th anniversary this year.

LG Soft India the innovation wing of LG Electronics in Bangalore is LG Electronics' largest R&D centre outside Korea. We at LGSI focus on niche technology areas such as mobile application development, digital video broadcast and biometrics software and support LG Electronics with our expertise. Motivated by a passion for technology, a strong work culture and loyalty to the organization, we are determined to see LG become one of the top three brands globally.

Prominent consumer electronic company, LG Electronics Inc. has said that it expects the sale of its products in India to up by 15 per cent in 2008. Moon Bum Shin, managing director of LG Electronics India has said that the company has earmarked 4.8 billion rupees for investment purpose in India this year. The said money will be used to market as well as manufacture new products.

LG Electronics, which is originally a South Korean Company with branch in India, informed that its sales of GSM mobile phones, color televisions, 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.

Before the liberalization of the Indian economy, only a few companies like Kelvinator, Godrej, and Voltas were the major players in the consumer durables market, accounting for no less than 90% of the market. Then, after the liberalization, foreign players like LG, Sony, Samsung, Whirlpool, Daewoo, and Aiwa came into the picture. Today, these players control
7|Page

the major share of the consumer durables market. Consumer durables market is expected to grow at 10-15% in 2009-2010. It is growing very fast because of rise in living standards, easy access to consumer finance, and wide range of choice, as many foreign players are entering in the market with the increase in income levels, easy availability of finance, increase in consumer awareness, and introduction of new models, the demand for consumer durables has increased significantly. Products like washing machines, air conditioners, microwave ovens, color televisions (CTVs) are no longer considered luxury items. However, there are still very few players in categories like vacuum cleaners, and dishwashers Consumer durables sector is characterized by the emergence of MNCs, exchange offers, discounts, and intense competition. The market share of MNCs in consumer durables sector is 65%. MNC's major target is the growing middle class of India. MNCs offer superior technology to the Consumers whereas the Indian companies compete on the basis of firm grasp of the local market, their well-acknowledged brands, and hold over wide distribution network. However, the penetration level of the consumer durables is still low in India.

Classification of consumer durables sector

1. Consumer electronic include VCD/DVD, home theatre, music player, color television (CTVs), cameras, camcorders, portable audio, HI-FI, etc 2. White goods include dishwashers, air conditioners, heaters, washing machines, refrigerators, vacuum cleaners, kitchen appliances, non-kitchen appliances, and microwaves; built in appliances, tumble dryer, personal care product etc. 3. Moulded luggage include plastics 4. Clocks and watches 5. Mobile phones

8|Page

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

9|Page

1970-79 Gold Star symbol of The Technology

1980-88:- INTERNATIONALIZATION

10 | P a g e

1989-94 INOVATION

1995-98 GLOBAL LEADERS LG ELECTRONICS

1999-2003-DIGITAL MANAGEMENT

11 | P a g e

2004-2006 GREAT PEOPLE GREAT DESIGN

2007-THE PEOPLE COMPANY

12 | P a g e

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

13 | P a g e

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
14 | P a g e

Digital media

a) Home Theater Systems, b) DVD Recorders, c) Super Multi DVD Rewriters, d) CDRW, e) Notebook PCs, f) Desktop PCs, g) PDAs, h) PDA Phones, i) MP3 Players, j) New Karaoke Systems, k) Car Infotainment

15 | P a g e

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.

16 | P a g e

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 LGs 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 our friendliness and gives a strong impression of LGs 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 Lifes Good. It expresses Brands Value, Promises, Benefits, Personality.

17 | P a g e

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
18 | P a g e

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 and email).

19 | P a g e

LG Brand Identity

The brand of LG is delightfully smart. LG strives to enhance the customers 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

20 | P a g e

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.

21 | P a g e

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

22 | P a g e

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 whats 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 dont 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 whats 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 years maintenance and/or replacement policy, items included/excluded, labor costs, and speed of response. In the case of a service provider, after-sales service might include additional training or helpdesk availability. Of equal importance is the customer's perception of the degree of willingness with which a supplier deals with a question or complaint, speed of response, and action taken.

LG also had a big problem of after sale service in India. During the project we also came to know that after sale service becomes the big issue in the region. Customers as well as dealer were facing the problem of after sales service. Because of this problem many dealer in the region were not ready to sell LG product. So it becomes the big issue. But LG has taken some solid steps towards improving customers 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. LG Electronics has identified eight states with high after sales service call rates to ink the deals with the ITI. 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."

23 | P a g e

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 Dermots public interview in ET on Wednesday). This shows commitment that Service must be made into a marketing differentiator, and leveraged thus. 7. LG has the widest service network across the country; some estimates put it at a significant multiple of service infrastructure from our nearest competitor. While the sale size may also be a nice multiple from nearest, it shows the company is ready to put our money where our mouth is. 8. The company has introduced a 211 service - once you register your complaint, we will call you back in 2 hours (hence 2), set up an appointment for the next convenient day for you (hence the first 1), and show up in the promised 1-hour slot (hence the second 1).If the next convenient day for you is the next day, thats great too. Its 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 Gorgon. (Service in India generally works through authorized service centers, in LGs case they work exclusively for LG.) A companyowned service centre tries that much harder, knows things better, and can even contribute as a revenue center.
24 | P a g e

REVIEW OF LITERATURE

Dynamics of Consumer Demand for New Durable Goods

According Gautama Gowrisan Karan, Marc Ryman-Most new consumer durable goods experience rapid prices declines and quality improvements, suggesting the importance of modeling dynamics. This paper specifies a dynamic model of consumer preferences for new durable goods with persistently heterogeneous consumer tastes, rational expectations, and repeat purchases over time. We estimate the model on the digital camcorder industry using panel data on prices, sales and characteristics. We find that the one-year elasticity in response to a transitory industry-wide price shock is about 25% less than the one-month elasticity. Standard cost-of-living indices overstate welfare gain in later periods due to a changing composition of buyers. 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 cooperates in the fast-developing21st century business. Field is of key significance in terms of strengthening the existing industry and creating new one.

13Growth in LG is very high for those who are in the company and froths who wanton join in LG. The company is growing with fast innovation and the BLUE Ocean strategy is one of the examples of growth.

25 | P a g e

RATIONALE OF THE STUDY

1. This project will give us great exposure to the consumer durable market because it includes product knowledge and field survey job in which the researcher will visit the LG stores in Indore. Through this survey the researcher will try to probe more into the market share of the LG Company with the consumers parameters in buying decisions.

2. The current study will be helpful for the researchers for further research &for the organization on in framing marketing strategies for the coming period the mission of LG is to proven the customers with utmost satisfaction through leadership. The fund a mental policy of development is to secure product leadership that the Customers may have the utmost satisfaction the resigning one eve double-income families and consumer awareness are the main growth drivers of the industries. 3. It will help the Consumer durables major LG Electronics India Pvt. Ltd (LGEIL) to a great extent as it will invest nearly Rs 500 corrosion India this year in research and development, brand-building and other marketing initiatives.

26 | P a g e

OBJECTIVE OF THE PROJECT

Primary objective

The main objective of filed survey during the project was to find out the market share of the LG and also calculate the display share. Find out the positional dealer who can sale the LG product in large volume. The main objective of research was to identify potential dealer and development these dealer. So LG can make them their direct dealer. This will ease the dependence on the some big dealer Find out the problem faced by the dealer in sales and the distribution.

Secondary objective

The Objective was to find out that how far the exhibitions are helpful in branding, While purchasing the consumer durables which parameter is most important for the consumer? Do the consumers prefer the financial facility for buying consumer durable? How frequently consumers change the consumer durable? To enhances the knowledge of consumer durable market. To increases the knowledge consumer durable product of LG.

To enhances the knowledge about the marketing and branding activity.

27 | P a g e

RESEARCH METHODOLOGY

Research methodology is considered as the nerve of the project. Without a proper well-organized research plan, it is impossible to complete the project and reach to any conclusion. The project was based on the survey plan. The main objective of survey was to collect appropriate data, which work as a base for drawing conclusion and getting result.

Therefore, research methodology is the way to systematically solve the research problem. Research methodology not only talks of the methods but also logic behind the methods used in the context of a research study and it explains why a particular method has been used in the preference of the other methods

Research design

Research design is important primarily because of the increased complexity in the market as well as marketing approaches available to the researchers. In fact, it is the key to the evolution of successful marketing strategies and programmers. It is an important tool to study buyers behavior, consumption pattern, brand loyalty, and focus market changes. A research design specifies the methods and procedures for conducting a particular study. According to Kerlinger, Research Design is a plan, conceptual structure, and strategy of investigation conceived as to obtain answers to research questions and to control variance.

Type of research is Descriptive Research

The type of research adopted for study is descriptive. Descriptive studies are undertaken in many circumstances when the researches is interested to know the characteristic of certain group such as age, sex, education level, occupation or income. A descriptive study may be necessary in cases when a researcher is interested in knowing the proportion of people in a given population who have in particular manner, making projections of a certain thing, or determining the relationship between two or more variables. The objective of such study is to answer the who, what, when, where and how of the 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
28 | P a g e

exploratory study needs to be flexible in its approach, but a descriptive study in contrast tends to be rigid and its approach cannot be changed every now and then. It is therefore necessary, the researcher give sufficient thought to framing research. Questions and deciding the types of data to be collected and the procedure to be used in this purpose, Descriptive studies can be divided into two broad categories: Cross Sectional and Longitudinal Sectional. A cross sectional study is concerned with a sample of elements from a given population. Thus, it may deal with household, dealers, retail stores, or other entities. Data on a number of characteristics from sample elements are collected and analyzed. Cross sectional studies are of two types: Field study and Survey. Although the distinction between them is not clear- cut, there are some practical differences, which need different techniques and skills. Field studies are ex-post-factor scientific inquiries that aim at finding the relations and interrelations among variables in a real setting. Such studies are done in live situations like communities, schools, factories, and organizations. Another type of cross sectional study is survey result, which has been taken by me. A major strength of survey research is its wide scope. Detail information can be obtained from a sample of large population .Besides; it is economical as more information can be collected per unit of cost. In addition, it is obvious that a sample survey needs less time than a census inquiry. Descriptive research includes survey and fact finding enquiries of different kinds of the major purpose. Descriptive research is description of the state of affairs, as it exists at present. The main characteristic of this method is that the researcher has no control over the variables; he can only report what has happened or what is happening. The methods of research utilized in descriptive research are survey methods of all kinds including comparative and co-relational methods. The reason for using such needs to be flexile in its approach, but a descriptive study.

29 | P a g e

DATA ANALYSIS

Q1. Have you purchased any consumer durable during Exhibitions?

Option Yes No

Percentage Of Respondents 35 65

65%

80%

60%
35% 40% 20% 0%
0 0 0

0
0 0

-20%

Yes

No

Inferences 1. 65 % of Customers have not purchased any consumer durable from exhibitions. 2. Only 35 % people have purchased. 3. It shows that consumers are coming in the exhibition for knowledge of product and also they want to know that weather there is actual price difference in exhibition and shop or not.
30 | P a g e

4. Consumers also want to compare to the different brand which are available in the exhibition. 5. So exhibitions are more useful to increases brand awareness. 6. People are less interested to purchase product from the exhibition.

Q2. While purchasing consumer durable which parameter influences you?

Option Price Product Feature Brand Service Durability

Percentage of Respondents 30 19 26 9 16

Product Feature 19% Brand 26%

Price 30%

Durability 16%

Service 9%

31 | P a g e

Inference

1. 30% of customer gives importance to price. So it shows that Indian consumers are very price sensitive. They give more importance to price over the brand. 2. 26% give importance to brand. So price and Brand matter a lots for the costumers. And they are also want best brand in best price. 3. 19% to product feature Service 16% and durability 9% Service is also a big factor for the customer they are less interested in the durability.

Q3.From where you prefer buying consumer durables?

Other Exhibition

Showrooms

32 | P a g e

Inference:

1. A majority of customers prefer to buy from showrooms. Very less proposition of customers buys from Exhibitions. 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.

Q4. You prefer to buy from the same as you have mentioned in Q.3 because of following reasons?

Option Attractive Price Services Offers

Percentage of Respondents 42 27 31

33 | P a g e

Offers 31%

Attractive Price 42%

Services 27%

Inference:

1. Customers buy from showrooms because of the service and convenience. These are two main factors. 2. Customers are preferred to buy from the showroom because of they think that these convenient store may provide good after sell service. 3. Customer also thinks that there is more chance to bargain and they can get more discounts in these showrooms. 4. Price also a factor that attracts the customer in these showrooms.

34 | P a g e

Q5. Which consumer durable you have and of which brand?

o o o o o

CTV LCD

o PLASMA REF MW AC

Inference

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

35 | P a g e

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

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

More than 10 Years

1-3 Years

3-5 Years
1-3 Years

3-5 Years
5-10 Years More than 10 Years

5-10 Years

Inference

1. Customers prefer to change consumer durables within 5-10 years. In India people do not change consumer durable frequently. 2. 23% customers do not change their consumer durable within 10 year. 3. It represent that Indian consumer do not prefer to change their consumer durable frequently.

36 | P a g e

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

No 81%

90% 80% 70% 60% 50%

Yes 19%

40% 30% 20% 10% 0%

Yes

No

Inference

Majority of customers do not prefer any financial scheme

37 | P a g e

FINDINGS

Customer Survey 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. 8. LG and Samsung have bottle neck competition in TV and REF. category. 9. The product is well aware and it is on top of mind of customer. 10. Customers are also now very choosy in buying the product and it is important for the company to make loyal customer of their brand.

38 | P a g e

LIMITATIONS

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

1. The research was conducted in a very small area. 2. Our research work period witness the biggest ups and downs in product sale of different brands, which affected the perception of the customer. This was biggest drawback of my study. 3. Time factor was also important for us. We had limited time for the research, for which a full-fledged report was insufficient for me. 4. The customer filled the questionnaire mostly in careless manner, so it was difficult to make them hold for time. 5. We had only found the upper-middle class family to fill up the questionnaire, but generally, an average middle class family was required for the study. 6. The sample size is also very small which represent my research on consumer behavior.

39 | P a g e

RECOMMENDATIONS AND SUGGESTIONS

Customer Survey

1. Exhibitions do not help to generate so much sells but they should be conducted regularly. This helps in generating awareness regarding the product in customers which ultimately helps in sales. 2. Also it is helps in advertising for the new products. Like in this exhibition new LCD SCARLET was advertised. Company should always focus on service. 3. Display share should be increased where there is less than 50% as LG also believes that JO DIKHTA HAI WO BIKTA HAI. 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.

40 | P a g e

SCOPE OF PROJECT

This project gives us great exposure to the consumer durable market because it includes product knowledge and field survey job in which we visited the LG stores in Delhi. Incidentally summer time was during our survey period which exposed us to another aspect of product promotion. LG always insist the 50% display share of LG product because LG believes that JO DIKHTA HAI WO BIKTA HAI. While visiting the shops we

1. Calculated the display share of the LG product in every shop. 2. Collected the data of actual monthly sale of the LG products in few shops. 3. Checked the availability of LG catalogue and the POPs in the store. 4. Found out the problems that the dealer are facing while selling the LG products. 5. Found out the customer response for LG products by asking the owner of the shop. 6. Found out the distributor name from who they were purchasing their products and also whether they have direct dealership and which brand. 7. Checked whether demo calls are attended or not Key findings:1. By calculating the display share we found that in most of store LG has 50% display share almost all categories. 2. By the actual monthly sale of particular store we came to know the capacity of the store and how much product can they sell. 3. It helps us to know that weather dealer is capable of being a direct dealer of LG or not and it also helps to find out the new dealers who are capable of being an LG dealer 4. We also came to know while visiting the shops that there was big problem of after sales service. 5. Many dealers were facing the problem of after sale service because there is no follow up calls from LG. 6. Demo calls also not done properly.

41 | P a g e

Scope

1. In term of purchasing power parity (PPP), India is the 4th largest economy in the world and overtake Japan in the near future become the 3rd largest. 2. Indian consumer durable market is expected to reach $400 billion by on 2010 3. India has the youngest population amongst the major countries. There are lot of people in the different income categories nearly the two third population is below the age of 35 and nearly 50% is below 25. 4. There are 56 million people in middle class, who are earning us$4,400-US$21,800 a year. And there are 6 million rich household in India. 5. The upper-middle and high-income household in urban areas are expected to grew to 38.2 million in 2007 as against 14.6 million in 2000.

Opportunity

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.

42 | P a g e

CONCLUSION

LG is the most preferred brand of consumer. After the liberalization, foreign players like LG, Sony, Samsung, Whirlpool, Daewoo, and Aiwa came into the picture. Today, these players control the major share of the consumer durables market. We found that in most of store LG has 50% displays share almost all categories. The most competitor brand in market of LG is SAMSUNG. LG is high growth of sale in market due to booming in new technology and better service.

43 | P a g e

BIBLIOGRAPHY

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

44 | P a g e

APPENDIX/QUESTIONNAIRE

Q1. Have you purchased any consumer durable during Exhibitions?

Option Yes No

Percentage Of Respondents

Q2. While purchasing consumer durable which parameter influences you?

Option Price Product Feature Brand Service Durability

Percentage of Respondents

Q3.From where you prefer buying consumer durables?

Exhibition Showrooms Other

45 | P a g e

Q4. You prefer to buy from the same as you have mentioned in Q.3 because of following reasons?

Option Attractive Price Services Offers

Percentage of Respondents

Q5. Which consumer durable you have and of which brand?

o CTV o LCD o PLASMA o REF o MW o AC

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

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

46 | P a g e

Q7. Have you purchased any consumer durable during Exhibitions? a) Yes b) No Q8. While purchasing consumer durable which parameter influences you? a) Price b) Product feature c) Brand d) Service e) Durability Q9. From where you prefer buying consumer durables. a) Exhibition b) Showroom c) Other Q10. 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

47 | P a g e

Q11. Which consumer durable you have and of which brand? a) CTV ----------------b) LCD ----------------c) PLASMA ----------d) REF ----------------e) WM -----------------f) MW -----------------g) AC ------------------Q12. How frequently you change your consumer durables? a) 1-3 years b) 3-5 years c) 5-10 years d) More than 10 years Q13. Do you prefer any financing scheme to purchase consumer durables? a) Yes b) No

48 | P a g e