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RURAL MARKETING

ASSIGNMENT 2
PRODUCT LAUNCH GENERATOR 5 KVA

COMPANY
LG Electronics India Pvt Ltd ABOUT US
LG Electronics India Pvt. Ltd. is a wholly owned subsidiary of LG Electronics, South Korea.
LG Electronics India Pvt. Ltd. was formed in January 1997. The company has its
manufacturing

units

in

Greater

Noida,

Delhi,

and

Pune.

LG Electronics has an employee base of over 72,000 across the world. It has 77 subsidiaries
worldwide.

RURAL MARKET:
There has been huge untapped potential in the rural market for electronic goods. Our special
focus on the rural and semi-urban segment has helped us come up with innovations in
keeping with the needs of the consumers in these areas, giving us an edge over competition.
Thus in one year we have been able to enter lower price points targeted at the low end
customer.
The entry level CTV is now priced at Rs 5,650, against the earlier Rs 9,000. Similarly, frostfree refrigerators now begin from Rs 11,500, ACs from Rs 16,000 and microwave ovens from
Rs 6,000.
The company has also taken other initiatives like 65 Remote Area Offices under the branch
offices that are empowered to directly link to the central billing system for orders, 230 service
centres and 2,600 mobile authorised service personnel for villages having below 10,000
residents.
There is good potential in rural areas even for products in the invertors & generator segment.
RURAL INDIA THE LG VISION:
Re-defining the position of Indian Rural poor by extending the boundaries for their activities
(products and services) through Cutting Edge initiatives.

PRODUCT DEVELOPMENT

MARKET RESEARCH:
1. We have done some research and found out details about how the villagers purchase
& who all can influence them in buying an Electronic product such as generator.
They are:
-

Opinion Leaders
Electrician
Head of the Village
Educated Youth
Dealers

2. According to the National Council for Applied Economic Research in New Delhi,
50% of durables and consumer goods are now sold in rural markets.
3. Word of mouth is the best means of promotion.
4. Locally available inverters lack on quality and after sales service.
5. Indian inverter market is highly unorganized, and full of local players and Chinese
competition.

FACTS:
1. Almost 44% households in India are without electricity and majority of these are in
rural areas.
2. The present size of the inverter market in India is about 1.5 million units a year and
growing.
3. There are constant energy shortages and blackouts.
4. A typical family spends Rs. 50 a month on Kerosene (i.e. 4% of their income).
5. Electricity is 20 times less expensive for lighting than Kerosene.

SWOT

STRENGTHS:
1.
2.
3.
4.
5.

LG is a known and reliable brand in the rural market.


Established Offices and dealers.
Good understanding of the rural market.
As on December 2007, there were 106381 villages yet to be electrified.
Domestic Inverter market is almost Rs. 1000 crore.

WEAKNESS:
1.
2.
3.
4.

Poor infrastructural facility.


Limited Knowledge of consumer.
Difficult to change psyche of rural consumer.
Low income of rural consumers.

OPPURTUNITY:
1. Rural per capita expenditure grew by 11.5 percent during 2007 2008.
2. There has been a significant change in the consumption habits of rural India. There
wants are changing into needs.
3. Rural household saves Rs. 11613 on an average per annum.

THREATS:
1. Rural income levels are largely determined by the vagaries of monsoon.
2. Nearly 60% of the rural income is tied with rural agriculture.
3. Rural Consumers have traditional outlook and do not prefer changes.
4. Threat of competition for cheap Chinese and local products.

PRODUCT ROSHNI INVERTORS

The need for generators holds true for both urban and rural areas multiple daily power cuts
are commonplace in Indian metros, and basically all sites are equipped with generators that
run several hours every day. In fact, its not uncommon for these generators to run 24/7/365,
since shutting down and powering up a generator wears more (and costs more) than leaving it
running.
Rural electrification currently requires installing expensive, overhead electric transmission
lines. These transmission lines need right-of-way clearing that devastates more vegetation
than the area serviced. An alternative-- onsite power generation using a motor-driven electric
generator- is costly and often beyond the reach of most buyers. These generators also have
short lives.
An inexpensive, alternative-energy electrification system is needed in the India.
LG has developed ROSHNI Invertors, a portable, solid-state, electric generator based on
the thermocouple principle especially for the rural households. A specially configured ring of
metal plates produces a very high electric-current circulation when it is heated. The current
store of energy can be tapped to provide a source of ac and dc electric power, and electrical
energy can be stored overnight. This generator operates with fuels, such as heat from various
wastes, solar, wood, propane, or petroleum. It can produce 4 kW of power and its weight of
75 Ibs allows portability. There are no moving parts to cause vibration or to make noise.
A key advantage of this product is that it uses a wide form of common, energy-producing
products. These products include hay, grass, coal, animal dung, renewable fuels, and wood
byproducts ultimately leading to lower costs for the rural consumer.

PRODUCT:
In rural villages our company will be providing the battery charging services also. For that it
will set up a Generator with a charger to charge batteries every day.
There will be a generator costing 20,000/- Rs and Battery charger. Charger are available for
Rs. 3,000 to 3,500 can charge 30 batteries at a time and with 2 shifts in 4 hours 60 batteries
can be charged to serve 60 home accounts . For 30 days of power supply, the total cost for
recharging the inverter battery would be around Rs.35, whereas, each poor household spends
up to Rs. 50 per month to buy kerosene at government subsidized prices.
Features:
Maximum output of 4000 W.
Easy to store and transport with sturdy fold-down carry handle and large-diameter
wheels.
Delivers greater fuel efficiency via the built-in eco-throttle which adjusts the engine
speed to meet the load demand.
Single Phase
Batteries 12 V Battery for starting system

Provided with water proof cover


Engine filtration easily available
No extra fuel costs expect battery charging.