CONTENTS

Chapter I : Introduction

Introduction
Scope of the study
Importance of the study
Objective of the study
Chapter II : About the company

Brief history of LG
Chapter III : Research Methodology.

Research Design
Sampling
Data collection methods
Limitation

Chapter IV : Data Analysis & Interpretation...

Chapter V : Finding & Recommendations...

Suggestion
Conclusion
Bibliography

Annexure........

1
 ABSTRACT

This Dissertation project is a study of Market Strategy in white goods

products of LG consumers satisfaction.
What are the factors that affect the consumer satisfaction?
Determining the factors affecting the consumer satisfaction.
What is the magnitude of those factors regarding the consumer
satisfaction?

Korean brands, LG have cornered nearly half of the Rs 10,000 crore (Rs 100
billion) Indian home appliances market for the first time in the later half of
this year. While the LG leads the market with around 35 per cent of the
overall market, LG improved its position from around 13 to around 16 per
cent now.
In fact, except in the refrigerator segment, the two now have combined
turnovers greater than the rest of the brands in all the major segments of the
market. In the refrigerator market, which accounts for the biggest chunk of
the market at around Rs 4,000 crore (Rs 40 billion) this year, LG emerged as
the biggest gainer since the close of last financial year. It has also seen a
steady increase in its market share since then from around 12.5 percent of
the total value to around 17 per cent now.

In the washing machine segment too, estimated to be worth around Rs 1,500

crore (Rs 15 billion) this year, the company was able to increase its presence
from 13.3 per cent share to 19.2 per cent share while its share in the
microwave market too improved from 18.5 to 24.6 per cent.

2
The company, which had a 15 per cent share in the retail-consumer AC
market, was also able to improved its position by around 1.5 per cent over
the last seven months.

However LG continued to be the dominant player in the market. Leading in

all the four product segments, it has around 50 per cent more market share
than its closest competitor in each segment. By value, the company has
around 30 per cent of the refrigerator market, 34 per cent of the washing
machine segment, 40 per cent in the home AC segment and 38.7 per cent of
the microwave market.

3
INTRODUCTION

4
Consumers expect electrical household appliances to be safe, for themselves,
their children and the older members of their families.

Individual consumption expenditure by households covers the actual and

imputed final consumption expenditure incurred by households on the goods
and services they require to satisfy their individual needs and wants.

The White Goods organization is part of a major group of companies that

sells electrical appliances in industrial, commercial and domestic markets. At
the time the events in this case took place, it was not a company in its own
right but a division of a larger organization called Complete Energy
Systems. The division dealt only with the domestic market (households) and
two other divisions dealt respectively with industrial and commercial
markets. The case appears in two parts, both dealing with a proposed
reorganization. The first part sets the scene by describing the situation that
led up to the proposed reorganization and part two describes management
proposals for the reorganization itself and the reactions of groups of staff and
individuals to the proposals.

It is important to stress that while a trade union plays a prominent part in

events, this is not a case study in industrial relations. Therefore, while
reactions to managements proposals largely surfaced through the trade
union, it is the reactions themselves on which you should focus your
attention, rather than the industrial relations aspects. Like most industrial
relations issues involving negotiation, managements motives and
considerations were largely unknown to the trade union, which had to deal
with the information provided by management at face value. Nor was
management privy to a great deal of what went on behind the scenes

5
between the trade union and its members. Therefore, unless the case
explicitly states that something was revealed by one party to the other, you
should assume that it was known only to the party concerned.
Heavy consumer durables such as air conditioners,
refrigerators, stoves, etc., which used to be painted only in
white enamel finish. Despite their availability in varied colors
now, they are still called white goods. See also brown goods.
LG and Samsung both are big white goods product
manufacturing companies from South Korea. Both are
equally strong, global companies, and more or less with
equal presence in Indian market.
A major appliance, or domestic appliance, is usually defined as a large
machine which accomplishes some routine housekeeping task, which
includes purposes such as cooking, food preservation, or cleaning, whether
in a household, institutional, commercial or industrial setting. An appliance
is differentiated from a plumbing fixture because it uses an energy input for
its operation other than water, generally using electricity or natural
gas/propane. An object run by a watermill would also be considered an
appliance. The term white goods or white ware is also used for these items,
primarily where British English is spoken, although definitions for the term
"white goods" can differ. In the United States, the term white goods more
commonly refers to linens rather than appliances.

Major appliances are differentiated from small appliances because they are
large, difficult to move, and generally fixed in place to some extent. They
are often considered fixtures and part of real estate and as such they are
often supplied to tenants as part of otherwise unfurnished rental properties.

6
Another frequent characteristic of major appliances is that they may have
substantial electricity requirements that necessitate special electrical wiring
to supply higher current than standard electrical outlets can deliver. This
limits where they can be placed in a home.

Major appliances have become more technically complex from the control
side recently with the introduction of the various Energy Labelling rules
across the world. This has meant that the appliances have been forced to
become more and more efficient leading to more accurate controllers in
order to meet the regulations.

. SCOPE OF THE STUDY

7
The electrical goods are those goods which already exist in the market.
Because without it, it is not possible that anybody can survive with his/her
life. We define scope of Mathura region. Scope is a very broad term. The
customers purchase the electrical appliances through market, exhibition, and
showroom for fulfillment of needs.

This report analyzes the markets for Electric Household Appliances in

Thousand Units by the following Segments: Major Electric Household
Appliances (Compactors, Dishwashers, Disposers, Dryers, Freezers,
Microwave Ovens, Range Hoods, Electric Ranges, Refrigerators, Vacuum
Cleaners, Washing Machines, Water Heater (Electric), Room ACs, & Other
Major Electric Household Appliances), and Small Electric Household
Appliances (Blenders, Bread Makers, Broilers, Can Openers (electric),
Coffee Makers, Electric Knives, Food Choppers, Food Processors, Irons,
Mixers, Toaster Ovens, Toasters, Waffle Irons, & Miscellaneous Small
Electric Household Appliances). The report provides separate
comprehensive analytics for the Mathura.

This report is prepared in Mathura region with the help of owner and
customer. It defines the marketing strategy (product, price, place, promotion)
of LG with Samsung.

LIMITATIONS OF THE STUDY:

Subjective nature of the study may affect its interpretation by different
individuals.

8
 Regional differences, area differences may change the scope of study
also

At different places, different implementation of applied CRM

(consumer relationship management) can be seen.

The information given over Internet and other sources may be

different from practical experiences of the customers.

IMPORTANCE OF THE STUDY

9
To know the position of LG and Samsung in the market and to gauge the
impact of market strategy vis--vis consumer durables in Mathura region.

Till the early nineties in the area of marketing whole effort was focused on
fine tuning the four Ps: product, price, place and promotion. It was only
in the early nineties that a few marketers began realizing that companies
basically existed to serve consumers - and that the consumer did not exist
merely to buy a company's products.

LG and Samsung both are big white goods product manufacturing

companies from South Korea. Both are equally strong, global companies,
and more or less with equal presence in Indian market. So it will be quite
rational to compare these two brands.

ISSUES TO BE ADDRESSED:

What are the factors that affect the consumer satisfaction?

Determining the factors affecting the consumer satisfaction.

What is the magnitude of those factors regarding the consumer

satisfaction?

RESEARCH PROJECT AIMS:

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 The overall purpose of this work is to analyze the level of
satisfaction of consumer of LG.

To develop insight about the factors involved in consumer

satisfaction related to white goods product in the transition phase of
globalization.

11
 OBJECTIVE OF STUDY
The research will provide an invaluable opportunity to conduct a research
and practicing the theoretical knowledge while pursuing B.Com.
(Vocational) and examining them against the ground realities.

I am concentrating on developing questionnaire and retrieving information.

Apart from it I also collect secondary data, mainly taken from journals,
newspapers and Internet will also be taken into account for this research.

PROFESSIONAL OBJECTIVE:

This Dissertation project is a study of consumer satisfaction

in white goods products of LG will be based on the LG
consumer satisfaction.

What are the factors that affect the consumer satisfaction?

Determining the factors affecting the consumer satisfaction.

What is the magnitude of those factors regarding the consumer satisfaction?

PERSONAL OBJECTIVE:

12
Personal objectives in this project are to gain experience of working in the
market and interacting with people and knowing their views as consumer.
Enhancing the indirect learning about the market and consumer behaviour is
another objective which will be helpful further in future in the field of
marketing.

13
 CONSUMER DURABLE HISTORY
The Consumer Durables industry consists of durable goods and appliances
for domestic use such as televisions, refrigerators, air conditioners and
washing machines. Instruments such as cell phones and kitchen appliances
14
like microwave ovens were also included in this category. The sector has
been witnessing significant growth in recent years, helped by several drivers
such as the emerging retail boom, real estate and housing demand, greater
disposable income and an overall increase in the level of affluence of a
significant section of the population. The industry is represented by major
international and local players such as BPL, Videocon, Voltas, Blue Star,
MIRC Electronics, Titan, Whirlpool, etc.

The consumer durables industry can be broadly classified into two segments:
Consumer Electronics and Consumer Appliances. Consumer Appliances can
be further categorized into Brown Goods and White Goods. The key product
lines under each segment were as follows.

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 came into the picture. Today, these players
control the major share of the consumer durables market.

Consumer durables market is expected to grow at 10-15% in 2007-2008. It is

growing very fast because of rise in living standards, easy access to
consumer finance, and wide range of choice, as many foreign players are
entering in the market

With the increase in income levels, easy availability of finance, increase in

consumer awareness, and introduction of new models, the demand for
consumer durables has increased significantly. Products like washing

15
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.
INDUSTRY SIZE, GROWTH, TRENDS:
The consumer durables market in India was estimated to be around US$ 5
billion in 2007-08. More than 7 million units of consumer durable
appliances have been sold in the year 2006-07 with colour televisions (CTV)
forming the bulk of the sales with 30 per cent share of volumes. CTV,
refrigerators and Air-conditioners together constitute more than 60 per cent
of the sales in terms of the number of units sold.

In the refrigerators market, the frost-free category has grown by 8.3 per cent
while direct cool segment has grown by 9 per cent. Companies like LG,
Whirlpool and Samsung have registered double-digit growth in the direct
cool refrigerator market.

In the case of washing machines, the semi-automatic category with a higher

base and fully-automatic categories have grown by 4 per cent to 526,000
units and by 8 per cent to 229,000 units, respectively. In the air-conditioners

16
segment, the sales of window ACs have grown by 32 per cent and that of
split ACs by 97 per cent.

Since the penetration in the urban areas for these products is already quite
high, the markets for both C-TV and refrigerators were shifting to the semi-
urban and rural areas. The growth across product categories in different
segments is assessed in the following sections.

Consumer appliances are electronically operated machines that are used

primarily in domestic activities like cooling, heating, cooking, cleaning,
refrigerating, entertainment etc. Based on the tasks performed by them they
are classified as entertainment products, cooling products, heating products,
photographic products, household etc.
Appliances which are required for fulfilling daily needs of a household come
under kitchen appliances. Consumer appliances are electronically operated
machines that are used primarily in domestic activities like cooling, heating,
cooking, cleaning, refrigerating, entertainment etc. Based on the tasks
performed by them they are classified as entertainment products, cooling
products, heating products, photographic products, household appliances etc.
Appliances which are required for fulfilling daily needs of a household,
come under kitchen appliances like refrigerator, water purifier, air purifier,
toaster, microwave ovens etc. Entertainment products are further divided
into two sectors- audio & video. The audio sector consists of hi-fi systems,
cassette, CD, MP3 players, stereos, wireless headphone. While the video
sector consists of television, plasma TV, LCD TV etc. Another industry
which is on a boom is gaming industry consisting of video games, game
consoles etc.

17
 The growing needs of the consumers are driving the latest technological
innovations in the consumer appliances industry. A look at today's consumer
appliances market, there are consumer electronics products with features like
ultra thin designs, function convergence, environmental protection, energy
saving and lower prices. New products, which are easy to use and provide a
lot of facilities, are being launched by the consumer appliance manufactures,
which provide a wide choice to the consumers. With so many selections and
so many different technologies, products have increased considerable market
demands and giving a hard time to manufacturers & suppliers of consumer
electronics appliances.
China, Taiwan and Italy are the largest manufacturers of consumer
appliances. Global consumer appliances industry's sales revenues reached
US$950 billion in 2006.According to an estimate the consumer appliances
industry in China will be the strongest by 2010, as the demand for consumer
appliances is rising because of the rapid pace of economic development
taking place in China and low cost of manufacturing of these appliances.
China is expected to become the second largest market for consumer
appliances in the world after US.
One of the biggest working parts of any household is home appliances for
the kitchen, and without a solid line up, could be difficult to manage home
cooking. When choosing any set of appliances, it's important to look at
several key features, prices, and warranty information. Making an educated
decision about these things can help save time and money.

First and foremost, before buying anything in regards to home appliances for
the kitchen, it's important to measure the space that you have free. This is a
crucial thing to remember no matter what you're purchasing in the near
18
future. By measuring the free space that you have, you can make sure that
you will be utilizing your appliance without any major complications. The
second step is to set a budget. Setting a budget might seem trivial, but it will
save you energy when you're ready to purchase your items, and are faced
with a purchasing decision.
After measuring your space and setting a budget, consider looking at the
various color options that are available to you. Many people want to match
their kitchen dcor with their appliances. It's important to consider what
style and dcor you want to go with, especially if you're buying home
appliances for the kitchen, separately. If you purchase a limited edition color,
or a color that isn't necessarily the norm, you might have a hard time
matching everything in your kitchen. Consider something standard like
black, white, or stainless steel if you're purchasing items one by one. If
you're buying sets, you might be able to match everything with relative ease,
but it might cost more up front.
Energy star rated options are gaining popularity amongst all different walks
of life. Look for highly efficient, energy saving appliances, and you'll ensure
money is saved over time. Highly efficient machines run better and faster,
and consume at least 30% less energy than other options. You'll be amazed at
the low cost of use, and definitely be happy to own one. It is true that they
cost more up front, but you will save money over time. Traditional options
still abound, so if you're not ready to take the energy saver leap, do not fret,
there are still other options available for the consumer.

Another key point to looking at home appliances for the kitchen is warranty
information. Never forget to read the fine print on any warranty information
that comes coupled with your investment. Some manufacturers offer a
19
limited time; limited warranty and that could end up costing you down the
road. To make sure you have peace of mind, always look for extended
warranty options, or make sure you understand the terms of your limited
warranty. Making sure your appliance works for the longevity you desire
from your home is vital to picking out the right appliance.
There is a plethora of options to explore in regards to ovens, sinks,
refrigerators, and so much more. Always shop around for the best price, and
make sure you look at several key points before investing in anything. You
can ensure peace of mind by doing some preliminary thinking, and investing
in the right option that fits your needs.

CONSUMER DURABLE PRODUCTS

REFRIGERATOR

20
WASHING MACHINE

LCD TV

21
SWOT ANALYSIS: CONSUMER DURABLE HISTORY
22
STRENGTH
o Accessory to Necessary Air- o
conditioners are no longer perceived
to be a item of luxury.
o Advancement of technology which o
gives the companies ability to
introduce new products and new
product features.
o High Growth. Key drivers being
Urban and Rural.
o Government Policies in favour of
Industry includes infrastructure
development, reduction in excise duty
and so on.
OPPORTUNITY
o Diversification. Developing new o
products for new markets.
o Easy availability of finance has
stimulated consumers to buy
durables.
o Changes in Consumer Outlook
from spend now-save later mentality
leading to high disposable income.
BRIEF HISTORY OF LG
WEAKNESS
Supply continues to outstrip
Demand. Demand Cyclical and
seasonal.
Volatile performance of the
agricultural sector have a negative
impact on demand. The sector's
performance is highly dependent on
monsoon and reforms, which has
failed often.
THREAT
Dozen companies operating in the
white goods segment. Prices would
continue to remain depressed and
margins will be under pressure.
o Threats of cheaper imports from
China and other South East Asian
countries
23
LG INDIA PVT.LTD
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).

The trend of beating industry norms started with the fastest ever-nationwide
launch by LG in a period of 4 and 1/2 months with the commencement of
operations in May 1997. LG set up a state-of-the art manufacturing facility
at Greater Noida, near Delhi, in 1998, with an investment of Rs 500 Crores.
This facility manufactured Colour Televisions, Washing Machines, Air-
Conditioners and Microwave Ovens. During the year 2001, LG also
commenced the home production for its eco-friendly Refrigerators and
established its assembly line for its PC Monitors at its Greater Noida

24
manufacturing unit. The beginning of 2003 saw the roll out of the first
locally manufactured Direct Cool Refrigerator from the plant at Greater
Noida.

In 2004, LGEIL also up its second Greenfield manufacturing unit in Pune,

Maharashtra that commences operations in October this year. Covering over
50 acres, the facility manufactures Color Televisions, Air Conditioners,
Refrigerators, Washing Machines Microwave Ovens Color Monitors and
GSM phone. The Greater Noida manufacturing unit line has been designed
with the latest technologies at par with international standards at Korea and
is one of the most Eco-friendly units amongst all LG manufacturing plants in
the world. LG has been able to craft out in eight years, a premium brand
positioning in the Indian market and is today the most preferred brand in the
segment. Various studies have shown that the consumer is well informed on
the health awareness front.

LG was one of the first companies who recognized the emerging change in
consumer needs and decided to differentiate their products on the basis of
technology which appealed to the consumer on the basis of health benefits.

Its vision was to become a 'Health Partner' for its consumers worldwide and
therefore formulated its corporate philosophy to make peoples' lives better,
convenient and healthier. The CTV range offered by LG has 'Golden Eye'
technology, which senses the light levels in the room and adjusts the picture
to make it more comfortable for the eyes. The entire range of LG air-
conditioners have 'Health Air System', which not just cools, but keeps
pollution out. Similarly, microwave ovens have the 'Health Wave System',
refrigerators have the 'PN System', which preserve the nutrition in food and

25
washing machines have 'Fabricare System', which takes the health factor
down to ones clothes. All the products offered by the company have unique
technologies, developed by its R&D departments that give consumers a
healthier environment to live-in.

The year 2001 witnessed LG becoming the fastest growing company in the
consumer electronics, home appliances and computer peripherals industry.
The company had till the month of October 2001 achieved a cumulative
turnover of Rs 5000 Crores in India since its inception in 1997, making it the
fastest ever Rs 5000 Crores clocked by any company in the Indian consumer
electronics and home appliances industry. Having achieved this milestone,
LG achieved another benchmark with the first ever sales of One lakh ACs
(Windows and Splits) in a calendar year.

In Colour Televisions having set the sales target of one million units of
Color Televisions for 2002, LG has already achieved the one million mark in
the month ahead of its target. In 2003, LG has emerged as the leader in
Colour Televisions, Semi Automatic Washing Machines, Air Conditioners,
Frost-Free Refrigerators and Microwaves Ovens. In the year 2004, LGEIL
achieved unprecedented sales efficiency both in Direct Cool and Frost Free
segment and sold more than 1 million units of refrigerators outperforming
industry expectations.

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.

26
The company has achieved a turnover of Rs 6500 crore in 2004 and aims to
touch a turnover of 10 Billion US Dollars by 2010 and commands an
enviable position in the GSM mobile phone market. It has already started
manufacturing of GSM phones in its plant at Pune.

LG India has also been taking on a slew of initiatives as a part of Corporate

Social Responsibility. LGEIL is proud to have adopted about 24 villages
around our Greater Noida facility. LG extends Free Medical Care, which
comprises of free checkups and a free distribution of medicines on a daily
basis. LGEIL is also generating self-employment opportunities for the
people in the form of tailoring, knitting etc. in addition to all this, LG also
sends veterinary doctors regularly to these villages. Besides all this, LG
India is one of the very few companies in the country that has an internal
Energy, Environment, Safety and Health Department. This function caters to
activities like Energy Conservation, Environmental Issues, Work Place Fire
and Safety as well as Occupational Health for the benefit of the employees.

VISION OF LG INDIA PVT.LTD.

LG Electronics is pursuing the vision of becoming a true global digital

leader, attracting customers worldwide through its innovative products and
design. The companys goal is to rank among the top 3 consumer electronics
and telecommunications companies in the world by 2010. To achieve this,
we have embraced the idea of Great Company, Great People, recognizing
that only great people can create a great company.

27
28
 AWARDS
New Delhi, October 24th October, 2007: LG Electronics India Pvt. Ltd.
today achieved another landmark by bagging the award for excellence in
Exports of Electronic Hardware by the Electronics and Computer Software
Export promotion Council of India (ESC) .This achievement is another
feather in the cap for the company after achieving a milestone of USD 186
million in exports for calendar year 2006. This milestone has reiterated LGs
prime position not only in the domestic but the international markets as well.

The award was received by Mr. Ajay Sapra, DGM, Corporate Exim,
LGEIL and Mr.Jatin Madan, AGM, Exports, LGEIL, on behalf of LG
on 24th October, 2007 at a function held at Hall Kamal Mahal, Hotel
Maurya Sheraton, Sardar Patel Marg, New Delhi. Shri A. Raja, Union
Minister for IT and Communications presented the Awards.

LG has emerged as top player in Consumer Electronics Exports and is

exporting a range of products primarily to the highly competitive markets of
Middle East, Asia and Africa. The award was given to LG for its excellent
exports performance in Consumer Electronics (CTV, Monitors, GSM,
Personal Computers and ODD) during the financial year 2005-2006.
During this period, LG achieved exports worth USD 133 Million defined
product categories.

29
 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 LGs 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

30
 CODE OF CONDUCT 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

31
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 shoppes and 38 are exclusive stores. Brand shoppes 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.

32
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

33
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.

34
 RESEARCH METHODOLOGY

HYPOTHESIS:

35
There is no significance difference between market strategy of LG white
goods products.

This project has been structured in the following manner. This is followed by
scope of research and sample design, which encompasses the following:

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

36
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.

Research design specifies methods and procedures for study. In this study
the company was interested to know the demand of different consumer
durable product, about competitors, and potential for LG and SAMSUNG
procedures to be used for the study among retailers/dealer and. However it
was exclusively personal interview.

TYPES OF RESEARCH

37
 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-
38
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 flexible in its approach, but a descriptive study in contrast tends to be
rigid and its approach cannot be changed ever now and then.

DATA COLLECTION METHOD

39
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.

This report was prepared after collecting data from the retailers/ dealers and

past data was arranged from the various studies conducted in last few years

and various other records of company.

PRIMARY DATA:

These data were collected by personal interview with retailers/ dealer. For

this purpose questionnaires were prepared in such that all necessary data

would be collected.

: For primary data collection, we have to plan the following four important
aspects.

Sampling
Research Instrument

SECONDARY DATA:

40
Information regarding the project, secondary data was also required. These
data were collected from various past studies and other sources of the
company.

- 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.
41
Preparation of report:
The report was based on the analysis and presented with the findings
and suggestions. The sample of the questionnaires is attached with the
report itself.

SAMPLING METHODOLOGY

Details of the sampling methodology, I have made questionnaire.

The one is made for the Customer.

No. of questions in questionnaires for customer: 07

No. of question related to LG product: 03
No. of people met during the research: 200
No. of respondents during the research: 50

SAMPLE UNIT
Professionals, Business man,
Employees, House wife,
Working women, Students

SAMPLING METHOD

42
 Random Sampling method

SAMPLE SIZE

10 Dealers

RESEARCH TOOL

Questionnaires

LIMITATIONS

Every study has certain limitations. In this study, also there were certain
limitations, which could not able to solve.
1. The research was conducted in a very small area.

2. This 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 me. I had only 25 days to complete
my 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.

43
 5. Only the upper-middle class family was considered while filling up
this questionnaire, whereas an average middle class family would
have made a good choice as well for the study.

6. The sample size is also very small which represent my research on

consumer behavior.
This study doesnt reflect the customers perception and preferences
regarding the two brands in the entire nation. No region outside Mathura
was considered for the same due to the above limitations as well as lack
of movement on the part of researcher.

DESCRIPTIVE WORK OF SUBTOPIC

SAMPLING PROCEDURE

Single stage Non-random convenience sampling was undertaken to obtain

information promptly and inexpensively. The sample size of 30 was taken.
The respondents were contacted mainly at their home and the questionnaire
was administered by me in person and the doubts regarding questions were
cleared.

METHOD OF ANALYSIS AND INTERPRETATION

Microsoft Office was used during project for analyzing the results and
preparing graphs, which were prepared especially for the survey, Microsoft
Word was used for designing the Questionnaire and Microsoft Excel was
used for analysis of data gathered. Data was recorded on regular basis and
the results were obtained at the end from which inferences were drawn. In

44
order to minimize the error in result and obtaining result in tabular and
systematic manner, I had used computer.

METHOD OF HYPOTHESIS TESTING

My sample size was small (n < 30), independent and equally populated
mean. For the hypothesis testing t-test was used as statistical tool. A t-test
can be used for comparison of two population means in order to establish
whether there is any significant difference between two population means,
provided the following conditions are met:
Each population is approximately normally distributed.
Sample size taken from each population is small (n < 30), but sample
do not have to be equal in size.

SURVEY AND DATA COLLECTION

Primary data was collected through formal structured questionnaires, which
were administered personally. The structured format ensured greater control
over responses and facilitated easy tabulation, editing and analysis.
Steps involved in this process are as follows:

First step was the literature review about the research topic and
then the preliminary proposal was prepared. For all this
internet, news paper was explored.

45
 The next step involved was selecting research topic and
assessing the feasibility of topic regarding research and
developing hypothesis for which I contacted my mentor.

Then, questionnaire for the interview was prepared. It was the

most critical and important phase. The whole research and it
relevance was based on the right questionnaire.

Then, all data gathered was sorted, compiled and arranged for
analysis.

CONSUMER ELECTRONICS

OVERVIEW
The consumer electronics market is valued at $25 billion in 2006 and is
growing at a rate of 20% per annum.

PRODUCT COVERED
The consumer electronics sector can be segmented into VCD/DVD, home
theatre, music players, and color televisions (CTVs), MP3, digital cameras,
laptop etc. and white goods, such as, dish washers, air conditioners, water
heaters, washing machines, refrigerators, etc.

MAJOR PLAYERS

46
Before economic liberalization, there were only a few players like
Kelvinator, Godrej, Allwyn, and Voltas in the consumer durable market.
90% of the market was captured by these companies alone.
Then, after the liberalization, foreign players like LG, Sony, Samsung,
Whirlpool, Daewoo and Aiwa came into the picture. And today, these
players control major share of the consumer durable market.

Consumer electronics market is projected as shown in the graph

Growth

47
 Consumer Durable/ White Goods Growth
Air Conditioner 20-25%
Refrigerator 5-10%
Microwave Ovens 25%
Washing Machines 5-10%
Consumer Electronics (Overall) 9%

GROWTH DRIVERS
Electronic market is growing very fast because rising living standards of
individuals, easy access to consumer finance, growing consumerism,
increase in disposable income, and large variety of choice as many foreign
players are entering in the market. But, sometimes due to the presence of
large number of players in the consumer electronics market, over-supply
situation arises.

48
 LEADERSHIP

LG LEADERSHIP

49
Source: ORG-GFK

FINANCIAL HIGHLIGHTS

AMOUNTS IN BILLIONS WON DOLLARS EUROS

50
Net Sales* 220,120.40 172.5 124.1

Total Assets 343,811.60 294.5 205.3

Total Liabilities 212,512.90 182 126.9

Total Stockholder's Equity 131,298.60 112.5 78.4

Net Income* 17,663.80 13.8 10

51
 DATA ANALYSIS & INTERPRETATION

Q1.Which brand are you using?

52
 INFERENCE

This depiction shows 55 respondents to the survey conducted and the

number of respondents who use specific brands.

Q2. Have you purchased any consumer durable during Exhibitions?

Yes
No

53
INFERENCES

1. 65 % of Customers have not purchased any consumer durable from

exhibitions. Only 35 % people have purchased.

2. 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.

3. Consumer also wants to compare to the different brand which are

available in the exhibition.

4. So exhibitions are more useful to increase brand awareness.

5. People are less interested to purchase product from exhibitions.

Q3. While purchasing consumer durable which parameter influences

you?
Price

54
 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% give importance to product feature Service 16% and durability

9%. Service is also a big factor for the customer they are less
interested in the durability.

Q4. From where you prefer buying consumer durables.

Exhibitions

55
 Co.shoppee
Showroom

INFERENCES

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.

Q 5. You prefer to buy from the same as you have mentioned in Q.3
because of following reasons

Attractive Price

56
 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.

4. Price also a factor that attract the customer in these showrooms.

Q6. Which consumer durable you have and of which brand?

CTV

57
 LCD

PLASMA

REF

WM

MW

AC

INFERENCE

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

Q7. How frequently you change your consumer durables?

58
 1-3 years

3-5 years

5-10 years

More than 10 years

INFERENCES

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.

Q8. Complaint handling of the brand.

59
INFERENCE

By the above bar diagram it is clear that the complaint handling of both the
brand is quite satisfactory. Most of the consumers using Samsung consider
that the brands complaint handling is excellent & very good. On the other
hand LG consumers are also quite satisfied with the service provided.

Q9. Did the consumers find in product what they were looking for?

60
INFERENCE

Most of the consumers of both the brand have responded positively but
consumers of Samsung are more satisfied with the features of their white
goods product they are using.

Few consumers of LG are not satisfied with features of the product they are
using.

Q10. Consumers using the brand since.

61
INFERENCE

Customer uses LG and SAMSUNG brands last some time. After using given
his preference.

Q11. Number of white goods product consumers are using.

62
INFERENCE

From the above graph we can say that most of the respondents were using on
one to two products of Samsung but these is still LG which is used by the
consumer and they are two to three white goods product of LG.

So on an average most of the consumers are having LG products.

Q12. Consumers buying intention in next six month regarding the

brands.

63
INFERENCE

If we see the bar diagram it is clear that there is very less consumer loyalty
in the white goods product and the consumers are supposed to analyze every
possible option and they are indecisive about their further buying. A bunch
of consumer is definitely not going to buy the Samsung and LG products.
On the other hand a substantial bunch of consumer is definitely going to
purchase the LG product.

Q13. Perception of consumers regarding white goods products of this

brand as value for money.

64
INFERENCE

From the above graph, we can say that most of the LG white goods ,
consumers are of the perception that the product is worth of the money. But
it is not in the case of Samsung.

So LG is having the more positive response then the Samsung.

Q14. Consumers experience with the brand.

65
INFERENCE

If we see the Bar diagram it is evident that the overall experience of LG and
Samsungs consumers satisfaction is average or more than average but
Samsungs consumers experience with the product is excellent while the
none LG consumer has responded as excellence experience.

Q15. Sales of LG and SAMSUNG in Monthly basis at Mathura region.

66
 Users

LG SAMSUNG

INFERENCE

Through the inspection we know that LG have more sale compare to

SAMSUNG in Mathura region

REASON:

LG provide good quality of services and SAMSUNG provide customer

satisfaction.

67
 FINDINGS
CUSTOMER SURVEY FINDINGS

68
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.

69
10.Customers are also now very choosy in buying the product and it is
important for the company to make loyal customer of their brand.

RECOMMENDATIONS AND SUGGESTIONS

1. Exhibitions do not help to generate so much sells but they should be

conducted regularly. This helps in generating awareness regarding the
product in customers which ultimately helps in sales.

70
 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.

CONCLUSION

Before conclusion, it would be prudent to share the key learning derived

from this project. This has been enumerated below as follows: -
71
 The learning specific to this project has been that it provided us with a
real exposure to the market of white goods and its consumers level of
satisfaction.

People have different personalities and different attitudes and

therefore good communication is required to approach the consumers.

Gaining in-depth knowledge about the consumers behaviour and

white goods business in India as-well-as consumer loyalty.

LG Electronics Digital Appliances Company is a global leader in the

home appliance industry.

Dedicated to enhancing consumer lifestyles through its stylish and

advanced products by offering creative solutions for consumers
everyday lives.

LIMITATION

The sample size chosen for interview was small in size (10). If the
sample size would have been large, the study will be more accurate and
near to reality as the confidence limit will be more.
72
 Another limitation was the scope of research is limited as personal
interview couldnt be conducted in more areas due to inconvenience.

The questionnaire prepared for interviews has limitations also; the

questionnaire cant cover the whole complexity of the topic. The
questionnaire covers some important points only.

73
 BIBLIOGRAPHY

BIBLIOGRAPHY

The majority of the project has been primarily our own research, findings
and endeavor. Wherever the support of the Internet and books has been
taken, the name of sites and books used are as mentioned below: -

74
C.R. Kothari - Business Research methodology

Naresh K. Malhotra - Marketing research an applied orientation (4th

edition)

Philip Kotler - Marketing Management (11th edition)

Economic Times Newspaper
Business Line Newspaper
Business world
Business today
LG magazine

www.1gindia.com

www.LG.com

www.google.co.in

75
 ANNEXURE

QUESTIONNAIRE FOR THE STUDY OF CONSUMER SATISFACTION

IN WHITE GOODS
Name of the researcher: ___________________________

Brands concerned: LG

Location: ------Agra-------------------------------------------------------

76
1. Are you using any electronic appliances?
Yes No

2. Which brand are you using?

LG Samsung other,

Please specify: -----------------------------------

3. Why do you prefer LG?

Durability Reasonable price better service
Quality other
4. Have you purchased any consumer durable during exhibitions?
Yes NO

5. While purchasing consumer durable which parameters influence you?

Price Product feature Brand

Services Durability

6. From where do you prefer buying consumer durables?

Exhibitions company shop showroom

7. You preferred to buy form the same as you have mentioned in Q.3
Because of following reason
Attractive price services demonstration

Offers convenience

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

CTV LCD PLASMA REF

WM MW AC

77
9. How frequently you change your consumer durables?

1-3 years 3-5 years

5.10 ears More than 10 years

10. How do you see the compliant handling of the brand?

Excellent Very Good Good Fair
Poor

1 2 3 4 5

11. Did you find what you were looking for?

Exactly
Not at all

2 2 3 4
5

12. Why have you chosen this brand?

Price packaging availability others

13. Since when have you been using this brand?

Last 5 years Last 3 years Last 2 years Last 1 year Last 6 months

78
 Or above or above or above or above or above

1 2 3 4 5

14. How many white goods product of this brand you are using?

Three or more Two One

15. Do you intend to buy a new white goods product of this brand within
next six months?

Definitely Probably Undecided Probably will Definitely will

Will buy will buy not buy not buy

1 2 3 4 5

16. Do you think the products of this brand are value for money?

Exactly Not at all

1 2 3 4 5

17. How is your experience with this brand?

Excellent Very good Good Fair Poor

79
 1 2 3 4 5

Questionnaire
1) Study of Consumer Durable Market for LG Electronics Ltd. With

Special reference To Agra district.

Name of shop:

Address:

Contact no.:

1) Which consumer durable product you sell?

C-TV

Refrigerator

Washing Machine

80
 DVD

Microwave

All of the above

2. How many no. of companys product you sell?

ONE_______________________________________________
TWO______________________________________________

THREE____________________________________________
FOUR______________________________________________
FIVE_______________________________________________
SIX________________________________________________

3) Which is major brand of Colour-Television you sell from your shop?

SAMSUNG

LG

Videocon

Onida

Sansui

Any other, please spacify------------------------

4) What is the important parameter for more sales of Colour-Television

brand?

Price

81
 Quality

Services

Advertisement

Schemes

All of the above

5) Which is major brand of Refrigerator you sell from your shop?

Godrej

Whirlpool

Ken star

LG

SAMSUNG

Videocon

Kelvinator

6) What is the important parameter for more sales of Refrigerator brand?

Price

Quality

Services

Advertisement

Schemes

82
7) What is the important parameter for more sales of Washing Machine
brand?

Price

Quality

Services

Advertisement

Schemes

8) What is the important parameter for more sales of DVD brand?

Price

Quality

Services

Advertisement

Schemes

9) What is the important parameter for more sales of Microwave brand?

Price

Quality

Services

Advertisement

Schemes

83
10) Which product you give high profit margin?

Refrigerator

Air conditioner

Television

11) What are your suggestions for LG to increase the sales?

_____________________________________________________________

____________________________________________________________

84