Colour TVs

INTRODUCTION
The Indian consumer durable industry, with a turnover of about Rs. 20,000 crore,
can be broadly classified as consumer electronics and consumer appliances.
Consumer electronics includes televisions (TVs), VCR, VCP and audio systems
while consumer appliances includes refrigerators, washing machines, air
conditioners (ACs), microwave ovens, vacuum cleaners, dishwashers, etc.
Colour TVs dominate the industry with a 40% market share, followed by
refrigerators with 25%, washing machines 10%, B & W TVs 8%, and the rest
contributed by ACs, audio systems, microwave ovens, etc. ACs referred herein
exclude central and packaged ACs, which are targeting the commercial segment.
The leading listed companies in TV are BPL, Videocon, Philips, MIRC

Electronics. Similarly, Electrolux, Whirlpool, Videocon and BPL are the leading
companies in domestic refrigeration segment. In ACs, Carrier Aircon, Voltas,
Amtrex Hitachi, Videocon and Blue Star dominate the market. Leading unlisted
companies in the segment are LG Electronics, Samsung, Daewoo, Godrej-GE and
National.
COST DYNAMICS
The picture tube accounts for about 55% of the cost of colour TV (CTV). Other
major cost heads in a CTV include populated printed circuit boards (20-25%),
plastic molded parts (10%). The obsolescence rate is higher in Indian consumer
durable industry, as newer models with latest technologies catch market fancy,
adversely affecting the demand for the earlier models. The drive for latest
technology calls for frequent upgradations and new product introductions, leading
to fluctuations in cost structure.
S.K.P.I.M.C.S. / Grand Project / /M.B.A. II / 2001-03 1

The industry is also facing hectic competition from both domestic and
international players, which have resulted in thin margins. It is now more a game
of numbers, wherein pushing up sales volumes brings in profits. As a result, the
selling and distribution costs ranges between 10-15% of the sale value. The name
of the game is aggressive ad spends, and as a result, new players the market are
incurring higher selling costs.
CURRENT SCENARIO
The consumers durable industry has witnessed an all round growth in sales in the
quarter ended June'02 over the corresponding previous quarter. The CTV
production saw a spectacular 40% spurt in the quarter ended June'02, as against
-10% in the quarter ended June'01, over the corresponding previous quarter. The
index of industrial production of Consumer durable increased by 11.6% in FY
2001-02. However, as the growth was spectacular at 14.5% in the corresponding
previous year, the growth has only decelerated in FY 2001-02.
CTV, audio products, clocks and watches have also witnessed 7%, 5% and 10%
growth in production respectively. However, black and white TV production fell
sharply by 25% during the above period. The top three players in the domestic TV
market are BPL, Videocon and Onida, with a market share of 17.6%, 10.7% and
10.4% respectively in the year ended Dec'01. While BPL and Onida lost market
shares from 18.7% and 11.9% in the year ended Dec'00, Videocon actually
improved its market share from 10.5% and thereby wrested the second slot from
Onida. The entry of several new brands like Samsung, LG, Sansui, Aiwa and TCL
has eaten into the market shares of the leading domestic players, with Samsung
Electronics improving its market share from 7.9% in 2000 to 8.8% in 2001, while
LG's market share improved from 6.2% to 7.6% during the above period.
With more high-end products attracting the upper middle class, there is a growing
market for home theatres, superior sound systems, and Internet-enabled consumer

durable in the niche segment. While the volumes in these segments are quite low,
the margins are quite superior. However, what attracts the MNCs more are the
growing consumerism amongst the middle class segment, which is estimated to be
around 315 million people.
DEMAND DRIVERS
Increasing disposable income, availability of institutional finance, fall in prices,

urbanization are demand drivers. Good monsoons, festival season and new
product introductions also spur demand. The penetration levels of consumer
durable are very low. Besides this, increasing income and finer financial options
and growing consumerism will act as demand drivers. For instance, the
penetration level of ACs is less than 2% that of Washing Machines is less than
4%, Refrigerators is less than 9% and CTVs less than 10%.
The convergence of information technology, e-commerce and entertainment will

lead to Internet-enabled consumer durable like TVs, refrigerators and micro-wave
ovens generating fresh demand from tech-savvy consumers. The urge to improve
lifestyle and the huge and growing middle class population is likely to spur strong
demand growth in this sector.
Major events like the World Cup can also spur demand for CTVs. Similarly, very
hot summer can spur demand for refrigerators and ACs.
RISK FACTORS
Obsolescence and products becoming out of fashion on account of new
introductions are very high. Likewise, the country depends heavily on imports for
many components and parts. Unless it can increase the local content, without
diluting the superior technological features at reasonable costs, the domestic
industry will find it tough to face the competition from MNCs. Already, MNCs
have grabbed substantial market share in many products, wherein the domestic
players were market leaders until a few years ago.

KEY BARRIERS TO GROWTH:
The industry has not been able to achieve the expected growth potential because
of four key barriers.
- Firstly, low quality / penetration of basic infrastructure that is power, water
etc.
- Secondly, lack of real product innovation for the Indian market and the low
demand for replacement due to lack of benefit led technological advancement.
- Thirdly, the Societal factors such as low percentage of working women; and
- Fourthly, the Economic factors that is relatively high price vis-à-vis low
disposable income and lack of innovative / attractive financing schemes.
To spur market growth, the industry will have to focus on increasing the value to
the consumers by decreasing price in a highly price sensitive Indian market and
also enhancing the offerings to the consumer through quality, features and
improved technology. Building a strong brand image with respect to four key
brand drivers namely, Quality; Technology; Status and Internationalism was also
critical to push demand in the industry.
CRITICAL SUCCESS FACTORS
Constant product innovation, brand building, superior technologies are critical for
the domestic industry's survival. Intense competition has squeezed the margins,
and hence the industry has become a volume game. Only players with deep
pockets, aggressive marketing, brand recall and innovative product introductions
with latest technology will survive in the long run.
Cost competitiveness, e-integration, brand building are critical as the industry is

highly price-elastic that volume growth will be attained only through high-pitch
marketing, value enrichment and superior products.

Also, there is a need for reducing the overall tax rate for consumer durable.
Reducing the taxes would benefit the consumer; thereby support the growth in the
market. The industry, in turn should also invest in technology, which will lead to
development of low cost products suited for the Indian markets.
India can take a dominant position in the world consumer durable industry by
effectively utilizing its large base of low cost - high skill labour force. In order to
exploit this potential, it was imperative for the Indian industry to upgrade the
scale, technology and quality of manufacturing.

A. CATEGORY/ COMPETITOR DEFINITION
The CTV industry is fall under the category of the consumer electronics/durable,
which is a part of entertainment industry as a whole. Consumer electronics includes
Televisions (TVs), VCR, VCP and Audio Systems while Consumer Appliances
includes refrigerators, Washing Machines, Air Conditioners (ACs), Microwave
Ovens, Vacuum Cleaners, Dishwashers, etc. in Entertainment industry we can include
Multiplex, Theater, Holiday Package, Music, Games, Shopping, etc.
In each Consumer Durable and Entertainment industry number of companies are

available and they are providing quality products at a reasonable price to be remain in
the competition. The leading listed companies in TV are BPL, Videocon, Philips, and
MIRC Electronics. Similarly, Electrolux, Whirlpool, Videocon and BPL are the
leading companies in domestic refrigeration segment. In ACs, Carrier Aircon, Voltas,
Amtrex Hitachi, Videocon and Blue Star dominate the market. Leading unlisted
companies in the segment are LG Electronics, Samsung, Daewoo, Godrej-GE and
National.
The obsolescence rate is higher in Indian consumer durable industry as newer models
with latest technologies catch market fancy, adversely affecting the demand for the
earlier models. The drive for latest technology calls for frequent up gradations and
new product introductions, leading to fluctuations in cost structure.
The industry is also facing hectic competition from both domestic and international
players, which have resulted in thin margins. It is now more a game of numbers,
wherein pushing up sales volumes brings in profits. As a result, the selling and
distribution costs ranges between 10-15% of the sale value. The name of the game is
aggressive ad spends, and as a result, new players the market are incurring higher
selling costs.

B. CATEGORY ANALYSIS
1. Category Size:
• Manufacturers say the market for colour TVs in the country will growth from the
present 5.3 million per annum to al most 20 million in the next three years.
• The 55 million black and white television users are expected to start converting to
colour TVs within two years, when the price differential between a black and
white TV and a 14-inch or 20-inch colour TV will become negligible. People
owning colour TVs from the 1982 Asian Games days are also likely to upgrade.
First time colour TV buyers and repeat purchase are expected to grow. All this
will be backed by a decline in prices as volumes take off.
• Moreover, new transmission technology and high quality entertainment software
are likely to lure more consumers to colour TVs. Add to this, the advent of digital
transmission and DTH broadcasting.
2. Category Growth:
• The CTV industry expects a 20% growth in 2002-03.The CTV in the country
will grow from the present 5.3 million to almost 20 million sales by 2005.
Sales of Colour Television
(In lakh units) Sales ( in lakh units)
Years Sales 60 55.7

51
50 48
1996-97 21.6
40 37
Sales Units
30.6
1997-98 30.6 30
21.6
20
1998-99 37
10
1999-00 48 0
7
2
9
-9
-9
-9
-0
-0
-0
96
97
98
99
00
01
2000-01 51
19
19
19
19
20
20
Ye ar
2001-02 55.7

Growth in CTV Market:
Growth in CTV Market

* Over previous year
45
41.33
Years % Growth* 40
35
29.73
1996-97 23.25 30
Percentage
23.25
25
21.03
1997-98 41.33
20
15
1998-99 21.03
9.20
10
6.25
1999-00 29.73 5
0
2000-01 6.25
8
2
7
0
-9
-9
-0
-9
-0
-0
97
98
01
96
99
00
20
19
19
19
19
20
2001-02 9.20 Ye ar
3. Stage in The Product Life Cycle:

Each and every product has a life cycle through which it has to pass. Usually there are
4 stages through which it passes. They are introduction, growth, maturity and decline.
The times for which different products remain in one stage are different.
The first stage is the introduction stage in which the product is introduced into the
market. Here it is possible that the company may have initial losses. In the second
stage of PLC i.e. growth stage, the growth rate of the industry is very high. The
competition is increasing and the promotion expenses of companies also increase. In
the maturity stage the growth rate of the industry is somewhat constant and finally
product reaches to the last stage of decline where the growth rate is decreasing and
demand decreases. Some companies are able to get their products back on the growth
rate from the decline stage.

The CTV industry is in the maturity stage where the growth rate is somewhat constant
and is not growing at a higher rate. Here the marketing strategy of the company is
very much important to get more number of customers. The new features and
technological development strategies are very helpful to the company.
The Colour TV industry is running in the Maturity Stage as compared to the B&W
TV is already is in the Decline Stage. The reasons for CTV Maturity stage are:
• As the demand for the CTV is reduced as well as the growth of is somewhat
constant.
• The demand for the new technology and quality product is still there. As the old
user of the B&W TV user is switched to the CTV.
• Another factor is the competition from the local as well as the from MNCs has
been increased during last few years.
4. Sales Cyclicity:
According to Industry Sources: “ Today, China sells only colour TVs, and 30 million
units per annum. In three years the India colour TV industry will sell 20 million units
per annum. The five million B & W television sold every year will completely
convert to colour television by 2004. 7 million old technology CTV owners will also
convert, even as normal sales continue to grow at the rate of 20 % to 25 % annually.
The ctv industry is bound to grow to 20 million by 2004-05. The models will become
cheaper it will offer 14’’ and 20’’ ctv as cheap as B & W TV in a year from now. The
optimism contradicts the findings of a study by Francis Kanoi marketing research,
commissioned by Consumer Electronics & TV Manufacturers Association (CETMA)
last year. The research firm said by 2005 CTV volumes close to 10 million units.
Says CETMA Secretary general, Suresh Khanna; “the 10th plan pegs the GDP growth
rate at 8 % that may be a little optimistic. But even if we take a conservative outlook
the industry volume will be close to 15 million CTV in 3 years”. The association is
optimistic about the current year because there are signs of pick up in the economy.
Consumer spending is likely to increase with growing disposable income. With the

football and cricket world cup sales of CTV are boomed. Price, which fell 15 to 20%
last year, would decline another 10 %.
5. Seasonality:
Generally, Urban customers make their purchase at the time of the festival or some
mega event is running.
Rural customers purchase is depend on the climate of the country, as India is an

agriculture-based economy. About 70% of the people are dependent on the
agriculture. They make their purchase after the monsoon season is over and get good
return from it.
6. Profits:
The Conventional Colour Television business is the less margin business. While the
high technology product is having a higher margins. The investment required to
establishment is comparatively higher as well as it is necessary for the company to
make continuous R & D and innovation expenditure to remain in the market.

C. CATEGORY FACTORS
1. Porter’s Five Force Model
The Porter's five forces affect the company in the following manners:
 Threats of New Entrants:
Due to the liberalization policy of the government the entry of the foreign player
has increased. Therefore, the local player has a tough time. Earlier BPL had
threats of the local player such as Videocon, Onida, Crown, Salora, etc.which has
fewer resources as compared to the foreign player. After 1991, the competition
from the multinationals has increased such as LG, Samsung, Akai, Aiwa,
Samsung, etc. Due to this the local players market share has been reduced. These
new entrant in the CTV industry has achieved No. 1 spot. The MNCs are having
much more competency than local players in terms of finance, marketing,
economies of scale and other.
 Threats of Substitutes:
The substitute for the CTV is the entertainment industry like theater, holiday
package, music, etc. Now people want to have multiple things at the same time
and at the same place. In multiplex people not only enjoyment and rest but also
they can have a cinema, games, shopping etc. at a same time and at the same
place.
 Rivalry among the Competing Seller's:
It can be seen from the present scenario about the rivalry among the firms.
Because of liberalization policy followed by Indian government there is an entry
of big multinationals in India like LG, Samsung, etc. These players are giving

tough competition to the local players in India like BPL, Onida, Videocon, etc.
The number one player i.e. BPL for the last plenty year is now at the forth place
up to the data available of October 2002. Now the South Korean company i.e. LG
is on the number one position in the Indian CTV industry. These companies are
giving more technologically updated products to the customers than the Indian
companies can able to do. More over the price at which they are offering these
products is also very much reasonable. They are penetrating in Indian market by
appointing more and more number of dealers and starting more number of service
stations in India. The new product development process of these MNCs is also
very short.
As BPL has overtook LG, which is just a six years old firm this proves that an
aggressive competition is prevailing among the sellers. The existing companies in
this sector introduce various promotional schemes to get more and more number
of customers. They are introducing newer and newer version of CTV in which
high technology is used and it is offered at a reasonable price.
 Suppliers' Bargaining Power:
The bargaining power of supplier is very much high but as the manufacturer of
the colour picture tube (CPT) are very high they are having less degree of the
control. Few CTV companies are manufacturing its own CPT or importing from
the Korea, Taiwan, China etc. In this case, the local manufacturer of the local
CPT has less bargaining power. There is lot of pressure on CTV companies to
reduce the prices of their end product and hence there is a pressure on the Picture
Tube Manufacture to reduce the prices of Picture Tubes. Some manufacturers
have already reduced their prices. Samtel is the largest CPT manufacturer in the
country will launch its pure flat CPTs by the end of the year and it also working
hard on the pricing strategy to provide the better quality at a cheaper rate.

Domestic TVs manufacturer including MNCs, today rely on imports of flat tubes.
As on date, the landed price of an imported 21" CPT ranges between Rs.4150 and
Rs.4480. This is based on an FOB price of $62-67 depending on the country from
were the product is being shipped. Chinese CPTs are the cheapest, followed by
Taiwan, Malaysia and Korea.
Hence the suppliers bargaining power is less because of the increase competition
in final product industry i.e. CTV industry.
 Buyers' Bargaining Power:
The bargaining power of customers is increasing, as the number of players is

increases in the CTV industry. Customers are having more number of choices
available now than the choices available few years ago. This allows the buyers to
bargain high. As well as the customer expectations are increased with the same
price.

2. Category Production, Sales And Key Statistics:
PRODUCTION OF TV ( IN '000)
YEAR 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01
VIDEOCON INTERNATIONAL 2378.8 2574.2 2607 3811.6 4763.6 5058.6
BPL 641.4 598 681.9 833.2 1039.6 886.4
LG ELECTRONICS INDIA 121.1 354.2 472
SAMSUNG INDIA ELECTRONICS 266.8 411.8 529.2
SALORA 350.8 253.5 248.8 268.3 261.8 218.2
CROWN 140.7 140.7 82.2 42.3 42.3
ONIDA 154.9 93.6 64.1 48.9 51.9 39.8
PHILIPS 180 159 157 45
TOTAL PRODUCTION 7750 8600 9240 10260 11330 12000
TOTAL SALES (IN CRORES)

Particulars 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01
VIDEOCON INTERNATIONAL 935.44 1071.54 1135.69 1353.52 1763.27 1741.87
BPL 823.52 914.52 1012.17 1107.04 1319.16 1094.89
LG ELECTRONICS INDIA 215.52 538.29 723.13
SAMSUNG INDIA ELECTRONICS 397.92 521.35 612.43
SALORA 183.22 57.83 79.05 90.35 92.64 74.89
CROWN 85.14 85.14 80.4 52.26 52.26
ONIDA 85.36 63.49 20.5 33.14 39.41 25.8
PHILIPS 279.5 407.75 362.57 366.23 408.54 245.42
TOTAL SALES 3643.12 4300 5500 6500 7450 7500
KEY STATISTICS
YEAR 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01
PRODUCTION ( in'000 ) 7750 8600 9240 10260 11330 12000
EXPORT QUANTITY ( in'000 ) 134.6 52 40.2 56.4 144.9
EXPORT VOLUME ( in crores) 127.6 107.3 45.9 43.2 51.3 95.5
IMPORT QUANTITY ( in'000 ) 5.6 13.8 28.6 14.8 17.5
IMPORT VOLUME ( in crores) 40.7 11.6 23.6 44.1 24.4 15.7
SALES VALUE 3643.1 4300 5500 6500 7450 7500
MARKET SIZE (VALUE) 3683.8 4311.6 5523.9 6544.1 7474.4 7515.7
DOMESTIC CONSUMPTION (VALUE) 3556.2 4204.3 5478 6500.8 7423.1 7420.2

3. Current Scenario:
 The Consumer Durable industry has witnessed an all round growth in sales in the
quarter ended June'02 over the corresponding previous quarter. The CTV
production saw a spectacular 40% spurt in the quarter ended June'02, as against
-10% in the quarter ended June'01, over the corresponding previous quarter.
 The index of industrial production of Consumer durable increased by 11.6% in

FY 2001-02. However, as the growth was spectacular at 14.5% in the
corresponding previous year, the growth has only decelerated in FY 2001-02.
 CTV, audio products, clocks and watches have also witnessed 7%, 5% and 10%
growth in production respectively. However, black and white TV production fell
sharply by 25% during the above period.
 The top three players in the domestic TV market are BPL, Videocon and Onida,
with a market share of 17.6%, 10.7% and 10.4% respectively in the year ended
Dec'01. While BPL and Onida lost market shares from 18.7% and 11.9% in the
year ended Dec'00, Videocon actually improved its market share from 10.5% and
thereby wrested the second slot from Onida. The entry of several new brands like
Samsung, LG, Sansui, Aiwa and TCL has eaten into the market shares of the
leading domestic players, with Samsung Electronics improving its market share
from 7.9% in 2000 to 8.8% in 2001, while LG's market share improved from
6.2% to 7.6% during the above period.
 With more high-end products attracting the upper middle class, there is a growing
market for home theatres, superior sound systems, and Internet-enabled consumer
durable in the niche segment. While the volumes in these segments are quite low,
the margins are quite superior. However, what attracts the MNCs more are the
growing consumerism amongst the middle class segment, which is estimated to be
around 315 million people.

 Current Position Of The CTV Industry Players:
CTV brands 2000 2001 2002(Up to Oct.)
(Jan-Dec)
LG 6.2 7.6 15
SAMSUNG 7.9 8.8 13.5
BPL 18.7 17.6 10
VIDEOCON 10.5 10.7 7.3
ONIDA 11.9 10.4 12
(In Percentage)
Market Share ( In Percentage)

20
18
16
14
Percantage
12 2000
10
2001
8 2002(Up to Oct.)
6
4
2
0
BPL
LG
VIDEOCON
SAMSUNG
ONIDA
Company & Year
 BPL Ltd, once the leader in the CTV market, has now dropped out of the first
three slots in the CTV market share statistics, according to ORG-GFK estimates
for October '02. LG Electronics, the Korean heavyweight, now leads the market
with a share of 15 per cent, followed by another Korean company, Samsung, with
a market share of 13.5 per cent. Domestic company Onida is in third place with
12 per cent, while BPL is No 4 at 10 per cent. LG has come to lead the market on
the back of an aggressive marketing strategy, coupled with its huge array of
reasonably priced CTV models.

 Other brands in the top ten slots are Videocon with 7.3 per cent market share,
followed by Sansui (part of the Videocon group) at 6.7 per cent and Philips at 6.3
per cent.
 R Zutshi, vice-president of Samsung India, says Samsung's high sales were due to
the success of its consumer promotions and a 22-model product line-up. The
company has set an internal target of 8.5 lakh in domestic sales by the end of '02,
he said.
 Company officials in BPL who did not wish to be named admitted to abysmal
sales in October. Surprisingly for BPL, the dip in primary sales coincided with the
festive season bonanza the company had announced for the trade. It had wooed
dealers by announcing a scheme to take the top 125 dealers to South Africa for
the World Cup cricket finals. An official said the decline in sales was due to
production constraints, which would be overcome.
 For BPL, CTVs have been the flagship business, with annual sales crossing one
million in the last three years. Industry experts say BPL may not be able to meet
sales projections of 1.25 million sets in the current financial year.
 The timing is unfortunate, as the CTV industry is expecting sales to touch sales of
seven million units in 2002-03, up from 5.6 million last year, due to the Cricket
World Cup in February.
 The TPG Nambiar family, promoters of BPL, is in the midst of a financial

restructuring to tackle a debt burden in excess of Rs 750 crore. It hopes to
complete the exercise by early next year and be ready to tap the cricket mania.
 Companies invested Rs 15-20 crore on consumer promotions in October '02. The

Indian colour television companies sold 9 lakh CTVs to the trade in the month of
October, which was one of the best for business in recent years.

III. ENVIRONMENTAL FACTORS (PEST Analysis):
1. Political Factors:
 In the electronic goods item the role of government is noticeable. As the

growth of it depends on the government policy. If it is favorable than
company as well as consumer benefits it from it. No single party is
dominated in India therefore the stability of government is depends on
the support of other parties. Therefore, many investor and companies are
not came forward.
 After liberalization the government policy is favorable towards the foreign
investor/company. Therefore, the competition from MNCs is increased. But
on the other side the local manufacture is in trouble due foreign corporations
are much more resources than the local firm.
 In the 2003 budget, the government has reduced the tax on CTV. Therefore,
the prices of CTV are reduced up to Rs 1000 due to decrease in excise duty.
 The Cable TV Act is also affects the Television Industry. The sales of CTV
are increasing because of the Cable television in India. In India, as per one
estimation, the total number of Cable Connection will be 6 Crores in year
2005.
Major Political Issues Affecting The Business Climate:
• National elections were held in March 1998 and a 13 party coalition

government led by the Bharatiya Janata Party (BJP) was elected with a slim
majority. The BJP has continued the economic reform program initiated in
1991 by the Congress' Rao government. The direction of these reforms, which
move India from a planned to a market economy, is likely to remain
unchanged for the foreseeable future. BJP leaders have said they will pursue
economic reforms through national consensus and have encouraged foreign
investment in core (infrastructure) sectors. They have agreed to honor all
WTO obligations made by previous governments and said they will not

abrogate any treaties. BJP leaders have quietly distanced themselves from
their campaign rhetoric which advocated "computer chips and not potato
chips" in foreign Investment and a "swadeshi" (made in India) economy.
• India's dynamic, influential and confident private sector will also not yield the
gains they have made without a fight. To deal with this, BJP leaders have
projected a "swadeshi" or nationalist image, and called for India to be built by
Indians. We believe that these leaders can embrace nationalism without
antagonizing foreigners, by establishing policies that are fair and consistent,
and that address India's economic needs.
• Nevertheless, on balance, India continues to develop an attractive business
environment, and most industrialized nations are expanding their commercial
presence in the country.
2. Economic Factors
 India is developing country the labour resources is very cheap and easily
available for production facilities due to the higher unemployment. During
last few years the interest rate is continually decreased. Therefore, borrowed
capital is much cheaper than other financial option such as shareholder equity.
GDP: $390 billion.

Real growth rate (1998-99): 6.8%.
Per capita GDP: $420.
Natural resources: Coal, iron ore, manganese, mica, bauxite, Chromite,
Thorium, Limestone, Barite, Titanium Ore, Diamonds, Crude Oil.
 Agriculture (25% of GDP): Products--wheat, rice, coarse grains, oilseeds,
sugar, cotton, jute, tea
 Industry (29% of GDP): Products--textiles, jute, processed food, steel,
machinery, transport equipment, cement, aluminum, fertilizers, mining,
petroleum, chemicals, computer software.

 Trade: Exports--$34 billion: agricultural products, engineering goods,
precious stones, cotton apparel and fabrics, handicrafts, tea. Imports--$42
billion: petroleum, machinery and transport equipment, edible oils, fertilizer,
jewelry, iron and steel.
 Major trades partners--U.S., EU, Russia, Japan, Iraq, Iran, central and eastern
Europe.
 Inflation:- 5.4%
 The current economics slow down and the stock market slumps have hit
volumes in urban areas, while better agriculture growth in FY has seen
volumes is rising in rural region.
 Overall industry size of consumer durable is 7.2 $ billion.
3. Social Factors
 In India, there are large numbers of middle class families. In fact, time was
when customer had a penchant for a particular brand. Cut to the current
present, while buying, a TV, one wants to go in for a ‘Golden Eye’ or ‘Eye Fi’
TV first and brand later.
 And the reason are not far to fetch: Consumer awareness, spread of
information, flooding of the store with numerous brands, innovation sales
push by sales person, attractive offers and finance options.
 Customers’ choice is changing and they want something new from the CTV
producers. Now the Conventional Televisions are less preferred than the Flat
Screen Television, it is so because the price gap between the Conventional
Television and Flat Screen Television is narrowing down.
 Many customers buy the high tech, high priced television because they
looking it as status symbol.

Stretching Of Surface (Brand Penetration):
In $ billion
Share of Industry
Particulars brands Size
Food, Grocery & Tobacco 5 134
Consumer Durable 3.7 7.2
Clothing and Apparel 2.5 12.4
(Source Economic Times, 20th January 2003)
134
140
120
100
In $ Billion
80
60
40
20 12.4
5 3.7 7.2
2.5
0
Consumer
Clothing
Grocery &
Apparel
Tobacco
Durable
Food,
and
Share of brands
Particulars Industry Size
4. Technology:
 The challenge is to anticipate future technology changes and manufacture

products at a price that consumers will be delighted to pay. It also believe
manufacturers need to provide convergence between its several products and
allow for interplay through requisite protocols.
 BPL Research & Development and technology initiatives revolve around
providing the latest technologies to consumers at the optimum prices.
 The challenge is to anticipate future technology changes and manufacture
products at a price that consumers will be delighted to pay. It also believe

manufacturers need to provide convergence between its several products and
allow for interplay through requisite protocols.
 BPL use intensive technology to create in 3-D formats, which enable mass
production through superior tooling methods. Its aim is to develop technology
intelligence with appropriate products. It wants to give you the best and our R&D
center is constantly working towards that. Our strategic partners in technical
collaboration are Sanyo and Toshiba and Philips, NS, Infineon, TI, ADI,
Broadcom and Connexant for the latest technologies.
 In making of television the basic work in R & D is not required. Most of the time
market requirements come as add on features. Therefore R & D concentrates
mainly on extra features. R & D efforts were dedicated towards development of
product and process technologies, improvement of product performance and
quality, and reduction in cost with a view to retaining market leadership. Several
new products were including design for single chips chasis for almost all
transmission systems in the world. In addition, BPL’s R & D initiated work with
Indian academic institutions on digital television design. In this connection BPL
have been awarded by the government for having the best in-house R & D. this
work in recognized both nationally as well as internationally. The design made by
them is meant for safety, simplicity of design and best budget televisions.
 At present the organization’s R & D unit for development of television does such
things as lay-out, prototype development, testing, evaluation and pre-production.
For export orders, BPL gets requirements for tele-text facility or scans circuit,
which require R & D to make add on circuit. For new product development R&D
gets input from two sources. First from domestic market requirements whereby
marketing managers determines the type of model and features required. The
second is from there collaborators Sanyo, who provides these features. While
most of the time they get the design from Sanyo, R & D also works on its own.

C. COMPANY AND COMPETITORS ANALYSIS
I. Objectives
The objective of BPL Company is to become customer-oriented company. They want

to provide better services to its customers. They want to be at the number one spot in
this competitive world.
The objective of LG Company is also to be the number one in Indian CTV industry
by providing value for money to its valued customers. Its objective is to appoint more
number of dealers to penetrate in the urban and rural market of India. It is also having
the objective of coming with newer and newer technology in the Indian CTV
industry.
II. Business Strategy
Globally, the US and Japan are the largest CTV markets of 22mn and 7mn CTVs
respectively. By 2003, this market is likely to stagnate. The Indian market, on the
other hand, will double from its present level of 5.7mn sets to 11mn with
`customized’ being the USP (unique selling proposition) for the CTVs.
The consumer electronics sector is exposed to many realities, a few of them are
mentioned below:
• Huge surplus after meeting domestic and exports requirements. (Thus, demand is
elastic).
• Competition due to international brands and established domestic players.
• High potential in the rural sector.
• Indian market is `value-for-money’ driven and highly segmented.
• Technology is the key driver.

• Along with a sophisticated product, customers look for services, discounts,
attractive schemes etc.
• Growth in the CTV industry is not due to government incentives, but primarily
because of innovative marketing strategies and cost cutting exercises adopted by
various companies.
To achieve the desired target, the companies have formulated various marketing
strategies to meet their specific targets. Each player may have a unique set of
strengths and weaknesses. The company will have to chalk out different marketing
strategies based on a systematic study of the underlying opportunities in the light of
existing strengths and barriers. While some have concentrated on price-cutting, brand
building, some have looked at improving distribution, quality perception, product
competitiveness, etc. Let us see how these companies have tapped the underlying
potential so far and won in this highly competitive market.
Samsung spent a huge Rs90mn for its six-week long 1998 Soccer World Cup
campaign. It was also one of the official sponsors for the 1998 Asian Games and
sponsored the Indian contingent. The company believes that in this way, they would
convey the message: `Like a sportsman, Samsung is also pushing old boundaries by
developing new technology and products’. Hence, its ad-line `Challenge the limits’.
With its manifest support to the Indian contingent, the company hopes to increase
interest in their products.
So far, Samsung has achieved good results due to a mixture of aggressive marketing,
increasing product portfolio, use of information technology in logistics and customer
service, enhanced productivity and fiscal management. In future, it intends to focus
on introducing new models in every category of a product line, some of them with a
unique selling proposition.

BPL wants the customer to feel "smart" and not "cheap". Hence, BPL's strategy is to
reinforce brand values and not just put forth an offer. The company has gone beyond
just discounting thus delivering added value to the consumer and the brand. The
company wants to add a badge value to the customer. Accordingly, the company has
spent heavily on promotion in the print and electronic media (Rs80mn). In a strategic
shift in its brand strategy, the company has adopted a multi-brand strategy, by
introducing two more brands in the CTV market, one at the bottom end of the market
and another at the very top. The objective is to plug the gaps in the CTV portfolio of
BPL and use these new brands to get incremental volumes.
On offer to the consumers are hosts of schemes to choose from. During FY2002,
different models of CTVs, refrigerators, washing machines were bundled together in
the New Home Plan, Flexi Home Plan under which discounts were offered and
financing could be availed on individual product purchase. Not desiring to miss out
on family realignments through marriages, BPL has also put in place a Wedding Plan.
It also facilitates exchange offers. The idea is to offer a range of attractive schemes to
diversified user groups and fulfill the latent demand. To top it all, the company had a
slogan competition among bundled plan purchasers that promised an all expenses
paid trip to Singapore for 36 families. The company wants the customers to have a
unique experience and to this end, the company is taking 'customer relationship' very
seriously.
LG Electronics rightly understood the consumer motivations to create magnetic

products, price them strategically, position them sharply and keep making the
magnetism more potent. Having understood the finer differences in consumer
motivations, it opted for sharp-arrow 'reasons-to-buy' differentiation over the 'blanket-
all approach' taken by most of the other players. LG's strategy is to make their dealers
its partners. The company believes that its future lies in e-commerce. The objective is
to have at least one million hits on their website in 2000 and develop 2000 Internet
dealers in FY2001 in addition to the existing 3000 dealers nationwide. LG is the first
company to offer consumer electronics on its website. LG offers attractive online

financing options. The company's ad spend has increased from Rs240mn (FY1997) to
Rs700mn this year (FY2002). The company also plans to enter into co-operative
marketing tie-ups with various companies to extend their reach.
LG Electronics has also tried to cash in on the festive spirit by launching a special
discount scheme during the Durga Puja and Diwali festivals in states like West
Bengal, Orissa and the states of the North-East. The reason – these festivals are
treated as a special occasion for buying new household items. Customers were lured
with loyalty rewards on the purchase of any LG product. The reward would enable
them to get a discount of 10% on their next purchase.
In a bid to increase market penetration, Philips is looking at strengthening its

distribution channels. The company is also looking at optimizing its counter share at
the dealer and distributor level to raise its flagging market shares. As a part of the
same exercise, the company will also weed out inefficient dealer counters and infuse
fresh blood into the trade. With its new strategy of consolidating its ranking in the
Indian market by introducing the latest technology and products, the company has
launched what is being touted as the world's most advanced home cinema solutions.
The company's marketing strategy proposes to flood the market with state-of-the-art
products, which would dispel the myth that Philips is a lower-end company. Apart
from this, it also aims at investing in branding as well as in the organization and
employees of the MNC. The key initiatives for the company include a broad and fully
integrated marketing approach as well as a brand marketing approach. The company
also aims to use technology as a competitive advantage, which is why it plans to use
star products and technology as vitality drivers.
The company plans to invest Rs300mn towards its promotional activities out of which
Rs180mn has been earmarked for the CTV segment. It has planned to introduce 15
CTV models in this calendar year.

The Videocon group built up significant volumes in the market by taking one of the
lowest price points in the industry. A number of competitors consider Videocon
prices as the benchmark while fixing the prices of their products. The group now
proposes to project Videocon as a competitive brand, offering more value in terms of
features offered at a given price point than those from the multinational companies.
Under the new marketing strategy for the brand, Videocon will continue to be the
flagship brand, which would be flanked by multinational brands in the group's fold.
Thus, Akai, Sansui, Toshiba and Kenwood will flank Videocon with each of them
having a unique position. Videocon has so far used sub-branding aggressively as a
marketing tool for its range of colour televisions. However, due to its multi-branding
strategy, the mother brand Videocon has been losing its market share. Videocon
needs labels to service its burgeoning capacities and distribution strengths. But the
company will have a tough time managing the inherent tactical differentiation
between its brands, and their individual needs.
The 2003 cricket World Cup had proved to be a godsend to those companies who
now have an opportunity to increase their product awareness levels through increased
visibility. Companies like LG, Aiwa, Videocon, Thomson etc had come up with
grandiose sales promotion schemes. Aiwa, for example, had promised buyers that
they would be refunded a certain portion of their purchase cost depending on how
well the Indian team did at the World Cup. Thus for a 21" CTV priced at Rs8, 990,
the customer would have got back Rs6, 990 if India had won the finals.
Sony, for the first time, is cutting prices and re-defining its premium image. Their
business strategy has been transformed to, "retain price and increase features in some
cases, and retain features and reduce prices in others". The company is putting in
place a network of exclusive Sony outlets called Sony World. These outlets will
display the entire Sony range of top-of-the-line products along with those which have
been launched in the Indian market. One, these swank outlets will help Sony retain
some resemblance of a premium image without relying too much on price. Two, they

will help the company compete with the grey market as the entire range will be
available with an additional promise of efficient after-sales service.
Despite efforts to strengthen its distribution channels by beefing up its dealer and
service network, Sony India's new strategy is still seen as being skewed towards
'value' which is an approach the company should have identified itself with much
earlier.
Aiwa will be introducing a new product range as well as a new category in the Indian
market starting with CTVs in the premium range such as the 25" and 29" CTVs,
DVDs, flat screen CTVs.
1. Rural Marketing
As majority of Indians live in villages, companies foresee the rural markets as the
markets of tomorrow. The increasing competition in the urban market and its near-
saturation has forced marketers to look for greener pastures, and the corporate sector
seems to have found them too. The recent data provided by NCAER also strengthens
the belief of the corporate in the rural market, especially after the success some
companies like Videocon, BPL have had.
But, going rural is not that much simple. Apart from the distribution nightmare of
reaching the products to rural markets, with 13 major languages and thousands of
dialects, 1,700 ethnic groups and hundreds of caste groups, arriving at the correct
manner of communication for the rural community is mind-boggling. An
indiscriminate marketing strategy with a replication of what is used for the urban
customer will not work with his rural counterpart. The latter has a different set of
priorities, which necessitates a different approach, both in terms of developing
appropriate products to suit them and using appropriate communication strategies,
which they will comprehend better.

IRS '02 reveals that non-agricultural occupations, such as shopkeepers, traders,
government employees, bankers, teachers and so on, have grown and are around 21%
of the rural households, accounting for 45-60% of rural consumer durable purchase.
Though the land-holding farmer is still an important consumer group, there is a
decline in consumption over time.
 Characteristics Of A Rural Customer
A rural customer though not well educated, has good common sense and is wise and
sharp in many ways. He/she is very conscious of 'value for money'. He/she does not
always look for cheap products but wants good quality. Rural customers sense a
patronizing attitude and erect formidable barriers to protect themselves. It is not easy
to introduce new products for them. They are bigger brand loyalists than their urban
counterparts. The rural brands are mostly recognized through symbols, logos and
colour. There is a very high degree of involvement in the purchase of any product,
more so of expensive consumer durable. A typical rural customer checks and
rechecks the expensive product he/she is buying. A rural customer cannot be pushed
too far as there is no urgent requirement for the product. Inter-personal
communication still accounts for 80% of the rural communication process in villages.
This means that word-of-mouth recommendation by users and sheer familiarity
influences rural folks in their purchase decisions. During a study conducted by
Anugrah Madison Advertising Pvt. Ltd. for Philips in Tamil Nadu, it was found that
almost an entire village owned a single brand of TV such as BPL or Videocon.
Very often, dealers act as consultants and so their influence carries a lot of weight at
the point of purchase. Decisions regarding the brand of consumer durable are taken
by the men in the household, in consultation with others in the community.
Videocon, a market leader in the B&W TV segment, has tried to address itself to the
rural market by sponsoring a Hindi film-based radio program every Friday evening.
The media chosen is strategic because of the fact that radios have a high rural

penetration level. The ad jingle heard during the program relates to only B&W TVs
and no other product.
With purchasing power on the rise especially in the rural market, Onida has adopted
an innovative arrangement to widen its reach in the mofussil areas. The company has
approached rural co-operative societies (tea garden societies in Assam, sugar co-
operatives in Maharastra and coffee plantations in Tamil Nadu) and sold them TVs at
marginal prices. These societies then sell them in villages. The TVs sold are mostly
B&W with certain modern features including 100 channels and an on-screen display
facility in Hindi. A special remote function to help explain the operations is also
available. Such a move forms a part of Onida’s long-term strategy to gain the
confidence of the rural market before the expected onslaught of the MNCs.
Samsung has drawn up a blueprint to expand its penetration in India with a special
focus on rural markets. The company has earmarked a separate budget branch-wise,
especially for rural markets. It expects more than 10% of its sales to come from the
rural markets in the year ending Dec 2000. Specially designed CTVs for the rural
markets in the 14" and 20" categories, semi-automatic washing machines and direct
cool refrigerator range are being planned by the company. All these products have
been priced below the psychological barrier of Rs10, 000.
Finance packages have been designed with zero percent loans on specific product
categories to push volumes in these areas. Rural vans have also been introduced in
each region to tour states. This van will display all Samsung products and thus
enhance brand awareness levels in the rural areas. The company has also tied up with
local distributors to showcase the Samsung range in local melas and fairs.
Salora International, which has a 7% market share in the rural market, has decided
to change tracks and fight it out in the highly competitive urban CTV market at a time
when the other television majors are trying to make inroads into the rural market. Its
sales of B&W TVs have declined from Rs350.9mn in FY1998 to Rs306.3mn in

FY1999. Salora has made a mistake of not launching new models regularly. The
company has seven models in CTVs and about 11 models in the B&W segment. It
plans to have new launches every few months.
LG Electronics launched Sampoorna, India's first TV with a Devanagri script on-

screen display. Priced at Rs12, 900, it was affordable, consumer-friendly and aimed at
semi-urban and rural India. This has set the rural mind at ease and paved the way for
its other products in the rural areas.
However, the consumer electronics market has seen their rural marketing strategies
going awry. All these years it was felt that the rural markets could not afford premium
products, but models specially designed for the rural markets have found more takers
in the urban markets while premium models have sold more in rural areas. Rural
buyers have made cash down payments ignoring the financing options available in
places like Jodhpur.
LG's Golden Eye and Onida's KY Thunder have found more takers in the rural areas
while Sampoorna, which was launched by LG mainly for the rural areas are seeing
more buyers in the urban markets. Companies are finding the concept of rural markets
being poor to be wrong.
2. Building Brands
BPL has successfully used umbrella branding to create a certain image for itself. The
brand's underlying credo of building winning competencies, abilities and
infrastructure is a valuable asset. This, along with a huge amount of money put into
brand building, has helped the company metamorphose into a contemporary, yet an
Indian entity. Realizing that the levels of sophistication of the Indian consumer were
going up all the time, the brand made it its mission to meet these aspirations. Today,
the company is perceived as an Indian 'multinational'.

The brand has had a strong presence at the top end and it now wants to go down the
line by introducing Evelux into selective markets. BPL has put together a separate
management team to shepherd Evelux into the market. This brand requires strong
distribution, deep penetration and service support and is primarily introduced to take
on competition from the Chinese and local brands. The company also plans to
introduce a premium sub-brand Digital BPL that will include high-end convergence
products. The mother brand BPL will operate in the middle and upper-middle
segments of the CTV market. The company plans to spend Rs2.5bn for brand
building in FY2001 as compared to Rs1.7bn spent in the previous year.
Philips, the number two CTV brand worldwide and number one in Europe, stands at
number three in the Asia Pacific region. The company aims to be in the top three
CTV brands in India by the FY2003. The company has launched 15 new color TV
models. It plans to introduce one model every second week in the price range Rs
9,000-Rs 9 lakh across the 14" to 54" range. The new models will be promoted under
the existing sub-brands -- Match Line and Power Vision. The company has changed
its pricing policy to establish itself as a premium player in the Indian market. Philips
wants its brand personality to reflect technology sophistication.
Videocon has adopted a multi-brand strategy where it promotes Akai, Toshiba,

Sansui and Kenwood along with the mother brand Videocon. Underlying the
importance of having multi-brands, the company stresses that in a CTV market;
growth stagnates after a market share of 20%. The company wants the customers to
perceive Videocon as a product with value and having the latest technology.
Videocon has used sub-branding as a marketing tool for its range of CTVs.
Mirc Electronics has planned a revamp of its brand strategy by spinning off the
existing Onida sub-brands -- Igo and Candy -- into independent brands. Igo will take
on the lower-end of the television market while Candy will look at the medium
segment. The strategy is aimed at further broad basing the product offering of the
company, which has largely dominated the top-end of the television market, across

multiple market segments. Onida will continue to address the top end of the television
market. The Onida brand is valued at around Rs9-10bn. In a recent survey, Onida was
adjudged the second most popular brand in the country in terms of brand awareness.
The company plans to invest Rs6bn in building its brands over the next five years.
LG plans to spend 30-35% of its ad budget on giving the LG brand and its products
an edge over competition. The company has armed itself with five new CTVs. It will
also launch new commercials for different product segments. The idea is not just to
create awareness for the product but also create top of the mind (TOM) recall. After
the World Cup cricket promotions, TOM has increased to 31% and this year’s target
is 60%. The company had systematically chalked out three phases of operations:
• During the first phase (till mid-1998), the emphasis was on communicating global
credentials and establishes differentiation.
• The aim of the second phase was to build higher awareness with focus on the
"esteem factor" and differentiation.
• During the third phase of their operations (FY2001), the company wants to build
on the relevance and recommendation scores, which result in higher market shares.
• LG's brand strength lies in a great product at a honest price. The company aims at
building a large brand, which is beyond the product itself. The brand personality
relates to consumer's perception of an ideal brand.
3. Product Customization and Differentiation
A company needs to consistently innovate and improvise its products that suit the
customer preferences and pockets. Some instances of product innovations have
remained confined to removing the frills from a CTV set. Akai, for e.g., sold its CTVs
at an unbelievable price of Rs10, 000 to lure price-sensitive consumers. This strategy
paid off for some time in the urban areas.
Onida has come out with something unique in the Indian television market. It has
launched 14" TV sets, nicknamed Candy, with colored cabinets. They come in four
colors – green, red, yellow and blue. The product is essentially customized for the 12-

25 year olds who are increasingly looking out for personalized products. In order to
cater to their tastes, these TVs come with a wireless headphone to listen to MTV
Grind when the other members of the family are sleeping. Secondly, the remote can
be arranged for different channel configurations as per the choices of different
members of the family. Onida has come out with new and divided range of products.
The range consists of a ‘unique’ collection and a ‘techno-value’ collection. Both the
collections will have better technology products like big and better sounding TVs. A
current ad campaign for the ‘unique’ collection, which has caught everyone’s
attention, highlights the new 3D-360 degree sound technology.
The company will also be launching Duet, which will come in sizes of 14" and 20".
Colours are expected to be Black Currant, Raisen Cream and Berry Delite. Onida KY
Thunder redefines the idiot box with a powerful 650-watt sound output. This comes
with a unique and newly developed bass blaster technology, which delivers the best
sound ever, witnessed in a television. The Brand named Web Cruiser offers access to
Internet besides being a normal television. Also on the anvil is the Mail TV which
will help users access e-mail on TV. In future, video games would be distributed free
as part of their plans to boost sales.
Salora International has tied up with US-based audio and voice technology
specialist company -- SRS Labs -- to introduce a range of CTVs with SRS patented
technology. The first SRS-certified colour TVs with SRS 3D sound will be launched
in the next few months. Philips, trying to solve the problem of space, has successfully
invented a 'slim' TV, which could even be hung on a wall.
With the coming age of digital technology, today’s products may become obsolete in
the first few years of the next millennium. Already in the US, high definition TVs
(HDTVs) and digital videodiscs (DVDs) have caught the consumer fancy with sales
slated to grow at a rapid pace.

Samsung has spent Rs215mn at its R&D centre at Noida to roll out CTVs tailored to
the Indian customer needs. The company has launched its Plano flat television range
with the DynaFlat technology in the Samsung 'Plano' range. This technology ensures
perfectly flat images that have no visible curvature when viewed from any angle and
remarkable colour purity.
BPL plans to launch a 'Convergence TV' under the name BPL Digital that will
combine the Internet and cellular services with a television's traditional features.
Korean major LG Electronics has introduced nine new CTV models, falling under
the "Golden Eye" series, incorporating the best available technology. The Golden Eye
series will have a mechanism to detect the slightest variation in any of the six aspects
of light – brightness, color, contrast, sharpness, tint and balance – and the TV will get
automatically adjusted.
The Golden Eye ‘Flatron’ has the world’s flattest picture tube, which eliminates
image distortion caused by the screen curvature and expands the effective viewing
angle to a maximum of 180 degrees. The Golden Eye ‘Swing’ model has an auto-
swing concept. Introduced for the first time, it permits a rotation of 15 degrees in
either direction for added convenience and better viewing. The Golden Eye ‘Pride’
incorporates the ‘Nicam’ stereo, which gives crystal clear CD quality sound. The
Golden Eye ‘Supreme’ has a multi-language on-screen display and Nicam stereo.
With the new yuppie listener’s tastes driven by countdown charts, TV has become a
medium of incidental listening. The A&M magazine, in one of its market
examinations, has described the make-up of a typical young music listener. He/she
wants music, which sounds good, real and is loud. No wonder then those companies
has not hesitated to exhibit their superior quality sound in their advertising
campaigns. There is a Samsung ‘Super Horn’ for every Videocon ‘Bazooka’ with
`life-like’ sound features.

Aiwa is also looking at launching the latest technology to enter the Indian market in a
big way. The company plans to introduce the Pure Flat Television in India, which has
been very successful in Japan. Aiwa will first look out for companies, which will
provide the key components for marketing the product. Another technology
demonstrator from Aiwa, the Plasma Display Panel, is also likely to make an entry
into India. However, this product has not been commercially successful.'
4. Distribution Network
A strong distribution network is important for any industry. Not only does it
guarantee a country-wide reach for a company’s products but is also necessary for
providing good after-sales services. In today’s competitive scenario, what needs to be
emphasized is a strategic partnership between the company and its dealers. This
necessarily means that the company would not abandon its dealers in times of distress
and instead provide incentives for liquidating their stocks.
LG Electronics has acknowledged the importance of a well spread-out network

within a short span of time. In FY2001, LG sold in 1,800 towns and cities with a
population of 100,000 and above. LG changed the rules of the game in just four-and-
a-half months. It put the onus of credit management on the dealers. This measure not
only saved capital but also indirectly provided an incentive to the dealers to make
intelligent demand projections and make the products move faster off the shelves.
This helped the dealers maintain their own cash flows. The company currently has
3,000 dealers nationwide and plans to develop 2,000 Internet dealers in FY2001. This
will happen across 18 branches and 76 franchisee service centres.
Samsung has a widespread service network which includes 123 exclusive service
centres (will be increased to 200 by FY2001) and 200 distributors in any town with
more than one lakh population, besides Noida and 13 metro branch locations which
service all Samsung products. The company is expanding its dealer network to 2,500
from 1,750 this year with a separate strategy for the rural markets. There has been
hardware and software standardization among all the service centres, with uniform

spares prices, and a monitoring system which ensures that customer calls are serviced
within 24 hrs, 7 days a week.
Videocon has built up one of the strongest distribution networks in India. The
company is currently implementing a large ERP system, costing Rs100mn, which
will help in integrating the manufacturing, marketing, procurement, distribution
services with the corporate office.
Philips, in a bid to increase market penetration, is increasing the number of channels

distributing its product range. The company has increased its channels of distribution
to include five levels as opposed to the erstwhile two-layered -- dealer and distributor
-- set-up supplying to retailers. While the high-end televisions and audio products will
be stocked with 1,300 dealers nationally, the high volume mass products will be sold
through 100 distributors. In a low-cost effort to increase penetration, the distributors
will be expected to appoint sub-distributors to reach out to the remote pockets within
the area they are servicing. These 100 odd sub-distributors will work on an advance
payment basis. The company has also initiated various programmes including training
its dealers in 31 cities across the country.
Further, PIL will establish a dedicated set of 100 institutional distributors to address
institutional demand. By the end of June 2000, these distributors will take care of
bulk purchasers such as hotels, cross-promotions and the defense segment. The new
structure is expected to increase Philips’s retail strength to 5,000 from the current
level of 4,000 retailers by the end of this year.
Sony is putting in place a network of exclusive Sony outlets called Sony World that
will display the entire Sony range of top-of-the-line products along with those which
have been launched in the Indian market. There are eight such outlets at the moment,
but the company is planning to add four or five every year.

Till last year, limited distribution reach had restricted the company's expansion into
smaller towns. Initially, Sony had relied on distributors mainly because it was easier
to handle one party in an area rather than too many dealers and payment schedules
were more regular. The flip side is that the distributor is also an additional
intermediary in the chain and tends to distance the company from the consumer.
Baron's aggression forced the company to take a re-look at its distribution. In October
1998, Sony sold directly to 23 authorized dealers, with the remaining 60 towns being
serviced by distributors. Today the company claims to have put 1,500 authorized
dealers in place and expects to increase the number to 2,000 over the next two years.
Almost 75 per cent of these would be in smaller towns. The company has some 34
distributors, which are gradually being replaced with authorized dealers.
All BPL dealers are linked via VSAT nodes, ensuring online availability of
information on inventory status and sales movement. This has allowed its production
facilities to coordinate with the supply chain in accordance with latest demand data.
Dealer relations have also improved, with money being recovered faster than ever
before.
Onida has 5,000 main and 3,000 sub-dealers across the country. The company has
restructured the entire distribution system and has also taken over the distribution
activities of northern and the eastern India from its group companies.
5. Research and Development
While the manufacturing of most of the durable are neither capital nor technology
intensive. The need for constant product improvisation makes R&D a key factor in
the consumer electronics industry. The entire development of research and
technology for Mirc (Onida) is done in-house through a division called Onida
Technologies. Mirc is likely to provide a separate focus for this division in the
coming months.

LG has gained the 4th position in CTVs with an 11% market share and a sale of
0.13mn units. Today, it is 862-strong with 30 people devoted solely to R&D. Every
product is manufactured and packaged under one roof in a state-of-the-art factory at
Noida.
Understanding the importance of customization, the company intends to target the

hotel industry and manufacture TVs, which fulfill their specific needs. LG has
decided to design a TV with specialized features, which would make it possible to
block certain functions of the set, like volume etc, and fix internal settings so as to
allow only minimum adjustments with a remote. It introduced a TV having a Hindi
on-screen display facility, which would cater to the less sophisticated buyer in the
rural market.
Samsung has a Rs215mn R&D centre at Noida to roll out CTVs tailored to the Indian
customer needs. With the joint R&D efforts of Korean and Indian engineers at Noida,
the company has come out with Metallica, which was launched globally a few months
back and is now customized with special features like 360 watts of power. Other
features include on-screen-graphic equalizer, transparent on-screen display, five-
language OSD and game mode. Philips has tried to understand the problem of space
and has invented a 'slim' TV, which could even be hung on a wall.
In the near future, media technology will merge to give us products, which will
combine the features of a TV and a computer. Already, Videocon has taken the first
step in launching a ‘computer’ TV in India. Baron International (marketers for the
Aiwa brand) is planning to launch a product that would combine the resolution power
of a TV with the maneuverability and elasticity of a PC monitor.
With the expected growth in multi-media services, Thomson is gearing up to launch

the next generation TV sets in India for which it has tied up with global majors like
Alcatel and Microsoft for the purpose. These would offer a host of multimedia
services such as electronic program guides, Internet access and inter-activity features.

Thomson is already preparing for the future when direct-to-home broadcasting would
no longer be a source of controversy and signals will be telecast in the digital mode.
However, the product in the Thomson stable, which will stand out, will undoubtedly
be the plasma CTV which aims at enhancing performance by way of reduced power
consumption, improved brightness and picture quality. CTV models of 29" and 33"
sizes with features like super flat shape, flicker proof, zero distortion and computer
compatibility are also in the pipeline.
By adopting a technology savvy image, the company hopes to reposition itself so as

to change its image of a company in the business of production and marketing of CE
products to a virtual provider of all kinds of products and services. The only
imponderable will be the price. With such high prices, these products will attract only
those for whom quality matters more than money. Thomson has also recently
introduced the smallest CTV with a 10" monitor having a unique splash proof panel
and remote control. This product is targeted at people who are generally on the move
and can be installed in any room and run on DC or a car battery.

III. Differential Advantage/Resource Analysis
1. Customers’ loyalty:
BPL is the very old CTV manufacturing company in India. It is having a good brand
name and very strong customer base. The products offered by BPL is not that much
different from the competitors. They are producing the same type of product for long
time. But as the competition increasing in this sector it is necessary for BPL to come
up with newer and newer technologically correct colour television in the market. The
products are of good quality but it is not having more variety of products to offer.
2. Ability to conceive and design new product:
In making of television the basic work in R & D is not required. Most of the time
market requirements come as add on features. Therefore R & D concentrates mainly
on extra features. R & D efforts were dedicated towards development of product and
process technologies, improvement of product performance and quality, and
reduction in cost with a view to retaining market leadership. Several new products
were including design for single chips chasis for almost all transmission systems in
the world. In addition, BPL’s R & D initiated work with Indian academic institutions
on digital television design. In this connection BPL have been awarded by the
government for having the best in-house R & D. this work in recognized both

nationally as well as internationally. The design made by them is meant for safety,
simplicity of design and best budget televisions.
At present the organization’s R & D unit for development of television does such
things as lay-out, prototype development, testing, evaluation and pre-production. For
export orders, BPL gets requirements for tele text facility or scans circuit, which
require R & D to make add on circuit. For new product development R & D gets
input from two sources. First from domestic market requirements whereby marketing
managers determines the type of model and features required. The second is from
there collaborators Sanyo, who provides these features. While most of the time they
get the design from Sanyo, R & D also works on its own.
In contrast LG offers wide range of CTV in the market to capture more number of
customers from the market. It has introduced wide variety of products in very short
time. It is the first company, which has introduced “Golden Eye” television in Indian
CTV market. It is also the first company, which has introduced “Flat Screen”
television in Indian CTV market. LG also cash on the foreign brand, as it is the
multinational company form South Korea.
Another multinational company Samsung is also cash on the foreign brand and now
having much more stronger customer base in India.
Both LG and Samsung run their promotional schemes very frequently and try to be
there in the minds of customers. But BPL is not running the promotional campaign in
the market. Moreover the advertisement expense incurred by LG and Samsung is very
higher than the Indian corporate BPL. Moreover advertisement of BPL is confusing.
For example, the advertisement of BPL Quandra Point Focus television is not
conveying anything to customers, as the communication was not clear in the
advertisement.

The technology advantage is not with BPL, as they are not producing highly
technologically correct CTV as compared to LG and Samsung. They are coming with
newer and newer design in the market.
Some Korean companies such as LG and Samsung are having mastering in

manufacturing large number of color picture tubes which is much more cheaper than
others because of they are importing from Korea where it is produced in very large
number and having the advantage of economies of scale. As well as they have vital
financial and marketing resources, which enable them to compete globally. They
have ability to
3. Ability to deliver service:
Here company should able to provide the after sales services to its customers as early
as possible. Customers should not get frustrated. They should get required service at a
time when customers require it.
For this purpose LG have decided to appoint more and more number of dealers and
service centers to satisfy its customers. While BPL and other local players do not
have that much ability to serve the customer needs.
4. Ability to finance:
The multinational companies i.e. LG, Samsung, etc has very good financial condition
as they are getting the finance from their home country. Because of this, they can
spend more on promotional schemes to attract more and more number of customers.
While the financial condition of local players is not that much sound and thus cannot
able to spend more on promotional schemes.
5. Will to succeed in this sector:

BPL is the oldest player in the CTV industry and had number one spot till last year
but now it is on the forth place. It is because of the foreign player like LG who want
to be a number one player in Indian CTV market. They have ability to produce, have
financial strength, have large distribution system and thus we can say that it has that
will to succeed in this market. BPL also has this ability but it has some internal
problem in the top management and also having some financial problems. It is having
a debt burden in excess of Rs 750 crore.
D. CUSTOMER PROFILE:
Customers are very important for any company. Without the customers not a single
company can survive in this competitive world. Moreover getting the customers is not
the only task of the company but it has to maintain its customers for the longer time
to get more and more business out of that also.
Here in the consumer durable industry the customers are very conscious of what they
are purchasing because they will use it for a considerably long period of time.
Moreover Indian customers are very price conscious and also want to have value for
their money. They want good quality product.
In this industry customers are making more inquiry before they actually make
purchase. This is because of the reason given earlier in this chapter. Most of the
customers are getting information about the desired product from the relatives,
neighbors, dealers, etc. Thus the word of mouth promotion is very much used in this
industry, as customers believe what their relatives says not what company is saying.
There is a very high degree of involvement in the purchase of any product. They want
each and every information related to the product.

The customer in this industry mostly purchasing this type of products at a time of off-
season, festival, etc. Like in the cricket world cup fever the sales of color television is
increased. To attract more number of customers in that time each and every television
company has announced their promotional schemes like,
 LG had sponsored cricket world cup and used the promotional schemes like
purchase LG’s product and see the world cup in South Africa.
 Videocon had announced the scheme in which customer would get at least VCD
worth of Rs.4000 and maximum prize is worth of Rs. 4,00,000.
 Onida had announced world cup to world cup 4 years extended warranty.
 Samsung had also announced India first offer in which customer could have won
the prizes worth of Rs. 25 crores.
Customers are purchasing these products mostly from the authorized dealers, as the
after-sales service is very much important in this sector. They compares various
products available in the market of various company and select the best product that
gives them value for money. Numbers of dealers are available in near area of
potential customers and hence dealers also offers additional offer other than the
company is providing to attract more and more customer.
I. How they choose the product?

As per the survey done by us various factors that customers are considering while
making any purchase are like,
 Brand name
 Perceived quality
 Price
 After-sales service
 Features availability
 Promotional offer
 Finance available
II. What do they buy and how do they use it?

Actually, the customer is buying the enjoyment in terms of the CTV. For buying CTV
the extensively search it and then actually buy after they fully satisfy with that brand.
As CTV falls under the category of consumer durable product, they see it as long-
term value providing, because the repeat purchase will after many years.
III. Where do they buy?

Customers are purchasing this type of products from the authorized dealers because in
consumer durable product the service aspect is very much important and that’s why
they are putting more emphasis on the purchase from the authorized dealers.
Sometimes dealers are providing more discounts to its customers to get more sales.
They are giving their own discount to customers to get faster sales. Thus the
distribution channel for the consumer durable company is very important.
IV. When do they buy?
Customers are mainly buying this CTV at the time of festival or when some mega
events are taking place like Cricket World Cup. They are purchasing such products at
the time when companies are offering more discounts to its potential customers or
when they running any promotional schemes.
V. Why they prefer a product?

Customers prefer television for mainly entertainment purpose. They can have
programmes, pictures, etc in home. There is variety of options available. They prefer
this because other entertainment options are very much costly and require extra time
and efforts.
VI. How they respond to marketing programmes?

They respond to the marketing programmes positively as the Indian customer are very
much price conscious and more attracted to the promotional offers provided by the
various companies. They purchase products when such offers are introduced and also
postponed purchase till such type of promotional schemes introduced.
VII. Will they buy it again?

Television is a consumer durable product and last for a long period of time, may be
for 10-12 years. Hence the same customer will not purchase it very soon in the future
but now customers wants to have a new television set after a short period of time, it
may be 4-5 years. But the time for repurchase is very long as compared to FMCG
goods.
If the experience of having the particular brand of television is good then that
customer will buy that particular brand of television in his/her future purchase. Hence
the product quality and the after-sale service are very important in television industry.
VIII. Long-term value of customers

All Customers purchasing the CTV would like to get value for their money. They do
not want to go at the service center too often to repair their CTV. They want non-stop
entertainment. Thus company should able to give the value for money to its
customers to get favorable word of mouth advertisement. It should thus provide
quality product, which can able to satisfy the needs of the customers.
IX. Segmentation:
The CTV industry can be put in various segments. It can be based on the size of
colour television or on the bases of type/features of television or region wise.
The segments as per size are,
 14 - inch
 15 - inch
 20 - inch
 21 - inch
 25 - inch
 29 - inch
 34 - inch

The segments as per type/features of television,
 Black & White television
 Colour television:
• Conventional television
• Flat screen television
• Internet television
• Golden eye television
The segments as per region wise,

 Urban
 Rural
Analysis:
The 20’’ and 21’’ colour television segment is very important for the companies in
the CTV industry, as it is the fast growing segment in the industry. It is the highest
selling segment and the growth is also very high. There is also growth of 29’’ colour
television as there is the price reduction by mostly all the company.
The rural segment is also growing at a very fast rate. No company has yet able to
penetrate in this market. Rural customers are very price conscious and can be
attracted by price reduction.
The growth of Flat Screen television and Golden eye television is also very good.
Internet television is also growing as it is positioned as cheaper way to access
Internet.

E. CATEGORY AND PRODUCT SALES FORECASTS
According to Industry Sources: “ Today, China sells only colour TVs, and 30 million
units per annum. In three years the India colour TV industry will sell 20 million units
per annum. The five million B & W television sold every year will completely
convert to colour television by 2004. 7 million old technology CTV owners will also
convert, even as normal sales continue to grow at the rate of 20 % to 25 % annually.
The ctv industry is bound to grow to 20 million by 2004-05. The models will become
cheaper it will offer 14’’ and 20’’ ctv as cheap as B & W TV in a year from now. The
optimism contradicts the findings of a study by Francis Kanoi marketing research,
commissioned by Consumer Electronics & TV Manufacturers Association (CETMA)
last year. The research firm said by 2005 CTV volumes close to 10 million units.
Manufacturers say the market for colour TV in the country will grow from the present
5.3 million per annum to almost 20 million in the next three years. The 55 million B
& W TV users are expected to start converting to colour TVs within two years, when
a B & W TV and a 14 – inch or 20 – inch colour TV will become negligible. People
owing colour TVs from 1982 Asian Game days are also likely to upgrade. First time
colour TV buyers and repeat purchases are expected to grow.

A. AN INTRODUCTION TO BPL (I) LTD.
BPL is the flagship company of the Rs 30bn BPL group. The Company was
incorporated as a private company British Physical Laboratories Ltd. in April 1963.
The company started of as manufacturers of hermetically sealed panel instruments in
Kerala, in collaboration with BPLT Instruments Ltd., UK. Later in 1979, they started
manufacturing plain paper copiers. Gradually by 1982, the company diversified into
consumer electronics. It had its maiden public issue way back in March 1994. Though
the company was successful in consumer durable, it wanted a manufacturing base in
Northern India to minimize distribution and transportation cost. Subsequently the
company took over Uptron in 1996. In 1997, the company diversified into
manufacturing of alkaline batteries and set up facilities for the same in Karnataka for
Rs1.2bn. BPL once had nearly one-fourth share of the domestic television industry. It
remained the leader, but with figures considerably smaller.
The ORG-MARG data on the color television (CTV) industry during 2001 gives BPL
a volume share of 17.6 per cent ahead of its closest rival Videocon, at 10.7 per cent.
But the fall in its share of the pie continues as it surrendered one per cent share during
the course of the year. The downward trend has been consistent since 1999, when its

share slipped below 20 per cent. And now they have lost the market share to the
Korean Company LG and slipped down to second position with 13.0% of market
share.
BPL Business Summary

Incorporated in 1963, BPL was promoted by T P G Nambiar of the BPL group. Other
group companies include Electronic Research, BPL Systems and Projects, BPL
Sanyo, Dynamic Electronics, etc. The company came out with a public issue in
Mar.'94. Products manufactured by BPL include televisions, test and measuring
equipments, medical electronic equipments and office automation products. The
technical tie-up with Sanyo, Japan, has helped the company widen its product range
making it a formidable player in the Indian electronic industry. BPL is the only
company to be awarded with the BZT reputation for export to Germany.
BPL was granted recognition as an export house in 1993. It had won the Elcina award
(1991-92) for export of electronic equipment like color TVs, oscilloscopes, copiers,
PCBs, etc to competitive markets of GCA countries. Nokia Phones has appointed
BPL as its local distributor in India.
It was awarded the Certificate of Merit for outstanding export performance in

consumer electronics from the Export Promotion Council in 1995-96. In 1996-97, the
company successfully completed an export-oriented project for the manufacture of
alkaline batteries at a cost of Rs. 120 crores at Dobaspet, Tumkur district, Karnataka,
with technical collaboration from Sanyo, Japan. In 1998-99, BPL Automation, one of
the subsidiaries of the company was amalgamated with the company. The
amalgamation benefit the company in terms of better control over the affairs of
plastic moulding and tool room division. BPL is India's first television company to
cross the one million mark (sales in volume). It continues to retain its No 1 position in
the Colour television market across all segments with a composite retail market share
of 19%. BPL acquired 2 crore equity shares of BPL PTI Limited which was engaged
in the manufacture and marketing of dry cell batteries. This company is now a

subsidiary of BPL with effect from Aug.'00. During the 4th qtr of 2001-02 the
company introduced the first integrated Home Theatre Solution with 4000 MW
PMPO output.
B. CORPORATE OBJECTIVES OF BPL (I) LTD.
"BPL is committed to achieve a leadership position in all its groups through

utilization of the best and most appropriate technologies, applying the finest
manufacturing disciplines and most efficiently marketing high quality products and
services to consistently give its customers the best value for their money."
 The main objective of BPL is to deliver superior value to investors and

customers over the long-term. And the mission is strengthened by 4 core beliefs:
 Dedication to manufacturing.
 Complete control over core components & technology.
 Nurturing & leveraging a powerful brand
 Pursuing ethical business practices.
C. DIVISIONAL OBJECTIVES OF BPL (I) LTD.
“At BPL, we are dedicated to bringing the best of technology and products to meet
the needs of consumers and make their lives comfortable. We make televisions,
refrigerators, washing machines, microwaves, audio equipment and many more
products that provide entertainment and facilitate the business of life.”

D. MARKETING OBJECTIVES OF BPL (I) LTD.
The company’s product is over 9 million homes across India. The aim is to make
BPL the first choice of consumers all over India. That is why quality is a priority
and constant innovation, a quest. Our consumers expect the best from us. Living up
to their challenges make us strive to improve, innovate and perform constantly,
sustaining growth and profitability. The very nature of the company’s business and
the lengths to which we go to bring you the best from the world, have earned us the
reputation of being an "International Indian".
Its collaborators are Sanyo, Toshiba, Octel, Media One and Nokia among others,
whose expertise and international experience have helped us to provide the best in
India.
E. SECONDARY OBJECTIVES OF BPL (I) LTD.
 To penetrate in the rural market

 To come up with high technological products
 To be on both high end price and low end price products
 To reduce cost of final product
F. SWOT ANALYSIS OF BPL (I) LTD.
The SWOT analysis for BPL Company is as under:

Strengths:
• Reputed Brand Name in the market. As the company is local, therefore people
are very much trusting on the company.
• The most preferred CTV brand.
• The "No.1 Durable Brand on Ad Recall"
• Emphasis on Research.
• Successful in other consumer durable like Walkman, Music System etc.

• Having an in-house production facility (Vertically integrated).
Weaknesses:
• Not much range of products.
• Low advertising expenditure.
• Lack of New Product Development process.
Opportunities:
• Large untapped market to be covered (Rural Market).
• Can use brand name for other market penetration.
• Can also use its brand name for other electronic businesses.
Threats:
• New entrants of MNC companies.
• Erosion of market share.
PRODUT/BRAND STRATEGY ADOPTED BY BPL (I) LTD.
 BPL wants the customer to feel "smart" and not "cheap". Hence, BPL's
strategy is to reinforce brand values and not just put forth an offer.
 The company has gone beyond just discounting thus delivering added value to
the consumer and the brand. The company wants to add a badge value to the
customer. Accordingly, the company has spent heavily on promotion in the print
and electronic media.
 In a strategic shift in its brand strategy, the company has adopted a multi-
brand strategy, by introducing two more brands in the CTV market, one at
the bottom end of the market and another at the very top. The objective is to plug
the gaps in the CTV portfolio of BPL and use these new brands to get incremental
volumes.

 On offer to the consumers are hosts of schemes to choose from. During
FY2002, different models of CTVs, refrigerators, washing machines were
bundled together in the New Home Plan, Flexi Home Plan under which
discounts were offered and financing could be availed on individual product
purchase. Not desiring to miss out on family realignments through
marriages, BPL has also put in place a Wedding Plan. It also facilitates
exchange offers. The idea is to offer a range of attractive schemes to diversified
user groups and fulfill the latent demand. To top it all, the company had a
slogan competition among bundled plan purchasers that promised an all
expenses paid trip to Singapore for 36 families.
 The company wants the customers to have a unique experience and to this
end, the company is taking 'customer relationship' very seriously.
 BPL is dedicated to bringing the best of technology and products to meet the
needs of consumers and make their lives comfortable. It makes televisions,
refrigerators, washing machines, microwaves, audio equipment and many more
products that provide entertainment and facilitate the business of life.
 You will find BPL’s products in over 9 million homes across India. It’s aim is to
make BPL the first choice of consumers all over India. That is why quality is
a priority and constant innovation, a quest. Consumers expect the best from it.
Living up to their challenges make us strive to improve, innovate and perform
constantly, sustaining growth and profitability. The very nature of our business
and the lengths to which we go to bring you the best from the world, have earned
us the reputation of being an "International Indian".

 BPL’s collaborators are Sanyo, Toshiba, Octel, Media One and Nokia among
others, whose expertise and international experience have helped it to provide the
best in India.
 Most interestingly, BPL is a future-oriented company. Having realized that

increases in bottom line were not going to be achieved by any increase in the
selling price of television sets, the company embarked on an ambitious exercise to
cut inventory. By linking the shop floor more closely to the shelf space at the
dealer's end, the company figured that if it replaced the goods sold faster
than before, it could save interest costs. BPL can slash its inventory from Rs 1
billion to Rs 500 million, then it can save Rs 75 million on interest each year.
That's a straight Rs 3 per share increase in pre-tax profits. And the indications are
that the company has done precisely this in the first half of the current financial
year.
 BPL has successfully used umbrella branding to create a certain image for
itself. The brand's underlying credo of building winning competencies, abilities
and infrastructure is a valuable asset. This, along with a huge amount of money
put into brand building, has helped the company metamorphose into a
contemporary, yet an Indian entity. Realizing that the levels of sophistication of
the Indian consumer were going up all the time, the brand made it its mission to
meet these aspirations. Today, the company is perceived as an Indian
'multinational'.
 But more on the brand synergy, it simply sells BPL. It sells the brand, it sells the
image, and it sells perception. So when BPL advertises for mobile phone in
Bombay, sales of colour TVs rise. When BPL advertises washing machines,
refrigerators sell. BPL's power of advertising voice as a group has finally reached
that critical mass where it is able to outsell Indian and international
competition because it is a highly visible brand. If you extend this logic, single

product companies are likely to get edged out as multi-product single brands
start capturing market share.
 The company also plans to introduce a premium sub-brand Digital BPL that will
include high-end convergence products. The mother brand BPL will operate in the
middle and upper-middle segments of the CTV market. The company plans to
spend Rs2.5bn for brand building in FY2001 as compared to Rs1.7bn spent in the
previous year.
 A Company needs to consistently innovate and improvise its products that suit the
customer preferences and pockets. Some instances of product innovations have
remained confined to removing the frills from a CTV set.
 BPL plans to launch a 'Convergence TV' under the name BPL Digital that will
combine the Internet and cellular services with a television's traditional features
 All BPL dealers are linked via VSAT nodes, ensuring online availability of
information on inventory status and sales movement. This has allowed its
production facilities to coordinate with the supply chain in accordance with latest
demand data. Dealer relations have also improved, with money being recovered
faster than ever before.
 They produce excellent quality products and keep changing their models every
few months. This has an interesting impact where you least expect it: the dealer.
Just when the dealer is convinced that what a great quality this BPL model with
Nicam stereo is, BPL goes and launches the FQR 21 inch which is possibly the
best set that you can get for reasonable money in India. The dealer gets only a
three-week credit period from BPL so he doesn't like to see the models sitting

on his shelf-space. The faster they move out, the better. And because the
quality is right, the brand positioning is right, the models move. Just when the
dealer is absolutely comfortable with the new model, BPL goes one step further: it
introduces a newer model with better features. So the dealer stocks more and sells
more. BPL does not offer the best margins to dealers among the range of
colour TV manufacturers in the country and yet these dealers end up making
more money from the sale of BPL CTVs. So if the dealer push is right, the
manufacturer does well. This is BPL's big plus.
SUPPORTING MARKETING PROGRAMS:
A. BRAND COMMUNICATION
Consumers are constantly interacting with its brands in different environments, for
different purposes. To make this interaction memorable and delightful, its brands are
presented with high impact communication that is larger- than-life.
BPL has always given importance to brand communication. Consumers come across
advertisements for its brands everywhere - television, print, posters, Internet and
through sponsorships and goodwill campaigns. With the changing face and speed of
communication today, BPL focused on using media specific to audiences.

B. ADVERTISING
Advertising its products is an integral part of its brand communication and making
the brand visible in daily life, is its challenge.
BPL experience and initiatives in brand communication through the years have
effectively produced a team of communication specialists, who sustain the brand
vision of the company.
BPL use television, the most powerful visual medium in the country today, as the
primary medium for advertising its brands. The huge growth in television
ownership and the arrival of Internet provides many opportunities for one-to-one
communication. BPL's first commercial for BPL colour TVs was broadcast in 1982,
the very first colour TV commercial in India.
C. CUSTOMER CARE
BPL’S service mission is to support the vision of the company becoming the most
customer-oriented company in the country, by building a proactive service
organization that continuously strives to create customer satisfaction, by internalizing
the best practices of customer relationships management.
It has invested 6,500 man-days and Rs.2.6 million to train our technical and non-
technical customer care employees. Today, BPL has 280 exclusive authorized service
centers, 30 BPL service centers, (18 direct branches & 12 supervisory branches) and
5 call centers. BPL service employs directly and through exclusive franchisee
network approx 2500 front line executives for attending to the customer requirements.

D. CHANNEL PARTNERS
A consistent brand policy and close partnership with the dealer community is the key
strengths of BPL.
BPL’S IT infrastructure and the Internet will connect its business partners and
integrate re-engineered processes to deliver the best value to the customer. It will
leverage the existing physical and electronic distribution and information
infrastructure as a service to third party businesses.
BPL’S distribution network is a combination of 37 C&FAs, 33 Branch Offices, above

300 Service Centers with 400 sales personnel across product groups working to reach
over 2500 dealers and distributors, over 1000 distributors (FMCG) and over 300,000
retailers (FMCG).
With the integration of trade and supply chain, its dealers and distributors will be
converted into enterprise partners, improving service levels, leveraging reach and
connectivity.
E. DISTRIBUTION NETWORK
A strong distribution network is important for any industry. Not only does it
guarantee a country-wide reach for a company’s products but is also necessary for
providing good after-sales services. In today’s competitive scenario, what needs to be
emphasized is a strategic partnership between the company and its dealers. This
necessarily means that the company would not abandon its dealers in times of distress
and instead provide incentives for liquidating their stocks.
All BPL dealers are linked via VSAT nodes, ensuring online availability of
information on inventory status and sales movement. This has allowed its production
facilities to coordinate with the supply chain in accordance with latest demand data.

Dealer relations have also improved, with money being recovered faster than ever
before.
They produce excellent quality products and keep changing their models every few
months. This has an interesting impact where you least expect it: the dealer. Just
when the dealer is convinced that what a great quality this BPL model with Nicam
stereo is, BPL goes and launches the FQR 21 inch which is possibly the best set that
you can get for reasonable money in India. The dealer gets only a three-week credit
period from BPL so he doesn't like to see the models sitting on his shelf-space.
The faster they move out, the better. And because the quality is right, the brand
positioning is right, the models move. Just when the dealer is absolutely comfortable
with the new model, BPL goes one step further: it introduces a newer model with
better features. So the dealer stocks more and sells more. BPL does not offer the
best margins to dealers among the range of colour TV manufacturers in the
country and yet these dealers end up making more money from the sale of BPL
CTVs. So if the dealer push is right, the manufacturer does well. This is BPL's big
plus.
F. PARTNERSHIP/JOINT VENTURE:
BPL’s collaborators are Sanyo, Toshiba, Octel, Media One and Nokia among
others, whose expertise and international experience have helped us to provide
the best in India. With the help of this type of joint venture BPL is able to get more
technological assistance to fight with the multinational competitors.
G. SALES
The sales of the BPL company was increasing till the year 1999-00 but now it is
decreasing because of the tough competition prevailing in the colour television

industry. In 1998-99 the total sales of the company was Rs.1107.04 crores, in 1999-
00 it was Rs.1319.16 crores and in Rs.2000-01 it was 1094.89 crores. But in 2001-02
it further decrease to about Rs.1000 crores.
H. PRICES
The prices of the various products offered by BPL are very much competitive now as
the competition is increasing in this sector. Each and every colour television company
is offering their products at a very reasonable rate to attract more and more number of
customers. The pricing is base on the features available in the colour television like
flat screen, size of screen, remote, etc. The prices of BPL’s product are ranging from
Rs.10000 to Rs. 40000.
SUGGESTIONS:
 BPL should come up with newer and newer products into the market to get back its
number one position in the CTV industry in India.
 It should use higher technology to compete successfully with the multinational

players in the market.
 It should diversify in the related business to cash on its strong brand name and
reputation.

 BPL should focus more on the promotional aspects of the marketing, as its
promotional expenses are much lower than its competitors.
 It should cut down its cost, as the pricing is the important factor in the customer
purchase.
 It should come out from the huge debt burden of Rs. 750 crores so that the amount
saved in interest term can be used in the Research & Development.
CONCLUSION:
From the all above information gathered we can conclude that whatever the
competition level and the technology comes into the market the customers will
always be benefited. They will get quality products at a reasonable rate. Each and
every company want to get more market share and for that they are ready to give
away higher margin and provide products and after sale services at a lower rate.
CTV industry is now in the saturation stage and not having that much high growth
rate. And thus companies try to attract customers by giving more price cuts and more
features at a same price or at a low price same number of features are available.

BPL in particular having a good brand name and reputation is now not able to
increase its market share. Even it is not able to maintain its current market share in
the industry. It is because of the lack of new product development and the
promotional policy followed by it. Now it is at the forth place in the industry and if it
want to be at the number one again it has to start manufacturing high technology
CTVs and also have to spend on promotion. One option available to BPL is to expand
in the global market or diversify in the related industry where it can able to use its
brand name.
BIBLIOGRAPHY:
NEWS PAPERS / MAGAZINES:
 Materials from Gujarat Chamber of Commerce

 The Economic Times
 Business Standard
 The Times OF India
 Hindustan Times
WEB SITES:

 www.google.com
 www.bplworld.com
 www.indiainfoline.com
 www.lgindia.com

Colour TVs

Hochgeladen von

Dokumentinformationen

Originalbeschreibung:

Originaltitel

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

Colour TVs

Hochgeladen von

Copyright:

Verfügbare Formate

INTRODUCTION

The leading listed companies in TV are BPL, Videocon, Philips, MIRC

S.K.P.I.M.C.S. / Grand Project / /M.B.A. II / 2001-03 1

S.K.P.I.M.C.S. / Grand Project / /M.B.A. II / 2001-03 2

Increasing disposable income, availability of institutional finance, fall in prices,

The convergence of information technology, e-commerce and entertainment will

S.K.P.I.M.C.S. / Grand Project / /M.B.A. II / 2001-03 3

CRITICAL SUCCESS FACTORS

Cost competitiveness, e-integration, brand building are critical as the industry is

S.K.P.I.M.C.S. / Grand Project / /M.B.A. II / 2001-03 4

S.K.P.I.M.C.S. / Grand Project / /M.B.A. II / 2001-03 5

In each Consumer Durable and Entertainment industry number of companies are

S.K.P.I.M.C.S. / Grand Project / /M.B.A. II / 2001-03 6

Sales of Colour Television

(In lakh units) Sales ( in lakh units)

Years Sales 60 55.7

S.K.P.I.M.C.S. / Grand Project / /M.B.A. II / 2001-03 7

Growth in CTV Market

3. Stage in The Product Life Cycle:

S.K.P.I.M.C.S. / Grand Project / /M.B.A. II / 2001-03 8

S.K.P.I.M.C.S. / Grand Project / /M.B.A. II / 2001-03 9

Rural customers purchase is depend on the climate of the country, as India is an

S.K.P.I.M.C.S. / Grand Project / /M.B.A. II / 2001-03 10

1. Porter’s Five Force Model

 Threats of New Entrants:

 Rivalry among the Competing Seller's:

S.K.P.I.M.C.S. / Grand Project / /M.B.A. II / 2001-03 11

 Suppliers' Bargaining Power:

S.K.P.I.M.C.S. / Grand Project / /M.B.A. II / 2001-03 12

 Buyers' Bargaining Power:

The bargaining power of customers is increasing, as the number of players is

S.K.P.I.M.C.S. / Grand Project / /M.B.A. II / 2001-03 13

TOTAL SALES (IN CRORES)

S.K.P.I.M.C.S. / Grand Project / /M.B.A. II / 2001-03 14

 The index of industrial production of Consumer durable increased by 11.6% in

S.K.P.I.M.C.S. / Grand Project / /M.B.A. II / 2001-03 15

SAMSUNG 7.9 8.8 13.5

BPL 18.7 17.6 10

VIDEOCON 10.5 10.7 7.3

ONIDA 11.9 10.4 12

Market Share ( In Percentage)

Company & Year

S.K.P.I.M.C.S. / Grand Project / /M.B.A. II / 2001-03 16

 The TPG Nambiar family, promoters of BPL, is in the midst of a financial

 Companies invested Rs 15-20 crore on consumer promotions in October '02. The

S.K.P.I.M.C.S. / Grand Project / /M.B.A. II / 2001-03 17

 In the electronic goods item the role of government is noticeable. As the

Major Political Issues Affecting The Business Climate:

• National elections were held in March 1998 and a 13 party coalition

S.K.P.I.M.C.S. / Grand Project / /M.B.A. II / 2001-03 18

GDP: $390 billion.

S.K.P.I.M.C.S. / Grand Project / /M.B.A. II / 2001-03 19

S.K.P.I.M.C.S. / Grand Project / /M.B.A. II / 2001-03 20

 The challenge is to anticipate future technology changes and manufacture

S.K.P.I.M.C.S. / Grand Project / /M.B.A. II / 2001-03 21

S.K.P.I.M.C.S. / Grand Project / /M.B.A. II / 2001-03 22

The objective of BPL Company is to become customer-oriented company. They want

II. Business Strategy

S.K.P.I.M.C.S. / Grand Project / /M.B.A. II / 2001-03 23

S.K.P.I.M.C.S. / Grand Project / /M.B.A. II / 2001-03 24

LG Electronics rightly understood the consumer motivations to create magnetic

S.K.P.I.M.C.S. / Grand Project / /M.B.A. II / 2001-03 25