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Company Profile

Introduction The Videocon Group emerged as a USD 4.1 billion global conglomerate continuing to set trend in every sphere of its activities from a conference room sized assembly line in 1979. Videocon is an industrial conglomerate with interests all over the world and based in India. The group has 17 manufacturing sites in India and plants in China, Poland, Italy and Mexico. It is also the third largest picture tube manufacturer in the world. Company is founded in 1979 by Mr. Nandlal Madhavlal Dhoot having headquarter in Aurangabad, Maharashtra, India.

Corporate profile The Videocon group has an annual turnover of US$ 4.1 billion, making it one of the largest consumer electronic and home appliance companies in India. Since 1998, it has expanded its operations globally, especially in the Middle East. Today the group operates through six key sectors: Consumer electronics

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In India the group sells consumer products like Colour Televisions, Washing Machines, Air Conditioners, Refrigerators, Microwave ovens and many other home appliances, selling them through a Multi-Brand strategy with the largest sales and service network in India. Videocon Group brands include Akai, Electrolux, Hyundai, Kelvinator, Kenstar, Kenwood, Next, PlanetM, Sansui, Toshibha, Philips (TV Products) etc. Mobile Phones In November 2009 Videocon launched its new line of Mobile Phones. Colour picture tube glass Videocon is one of the largest CPT Glass manufacturers in the world, operating in Mexico, Italy, Poland and China. Oil and Gas An important asset for the group is its Ravva oil field with one of the lowest operating costs in the world producing 50,000 barrels of oil per day. DTH In 2009, Videocon launched its DTH product, called 'd2h'. As a pioneering offer in the Indian DTH market, Videocon offered LCD & TVs with built-in DTH satellite receiver with sizes 19" to 32". This

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concept in the DTH service is relatively new in the presence of other players like ZEE tv's Dishtv, Tata Sky, Air tel Digital Tv and Reliance's BIG TV providing only the set top box. Telecommunication Videocon Telecommunication Ltd has license for mobile service operations across India. It launched its services on 7 March 2010 in Mumbai.

History of Videocon Group

Year

Sector

1989

Colour & B/W TV Washing Machine

198990

Home Entrainment System Electric Motor ,AC

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1991

Refrigerator Coolers

1995
Glass Shells for CRT

Year

Sector

1996

Kitchen Appliances Crude oil

1998

Compressors Compressors motors Philips colour TV plant takeover

2000

2005

Electrolux India 3 plants takeover

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2009

Mobile Phones DTH

2010

Telecommunication

Awards: Man of Electronics Award to Mr. P.N. Dhoot, president of

Videocon Group in the year 2005 by CETMA(Consumer Electronics and Television Manufacturing Association.) RAHBIC Award (Related to Recruitment) in the year 2005. BRAND EQUITY rated Videocon Group as No.1 Brand in

consumer durables for the year 2007.

Consumer Durables in India:

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100 90 80 70 60 50 40 30 20 10 0 philip s Onida videocon

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100 90 80 70 60 50 40 30 20 10 0 philip s Onida vid eocon

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Project Overview Videocon Appliances Limited

Organization name: Location:

Videocon Appliances Limited Videocon Appliances Limited, 15 Km Stone , Aurangabad-paithan road, Village Chitegaon. Tq-paithan, Dist: Aurangabad-431105.

Size: Quality Certificate: Product: Production Capacity: Workforce: Trade Union: Kamgar Union)

Land 8,26,000 Sq-Meter ISO 9001:2000 Refrigerator 2300-2800 per day 1000-1200 A.G.K.U. (Aurangabad General

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Manufactures:

Brands:Videocon,Electrolux,Samsui, Kenstar,Kelvinator,Allwyn, York and Toshiba.

Competitors:

LG, Whirlpool, Godrej, Samsung etc

Market Shares: Data Collected from ORG report

Logo Changed Videocon Group Changed Logo

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Videocon Group, the Rs 5,000-crore conglomerate, has embraced a new brand identity. The brand has shed its solid steel 'V' for a more fluid, lava like 'V', coupled With a new proposition Exprience Change prior to this , the brand has banked on other propositions, such as 'Technology for health and pleasure', 'Bring Home the Leader', 'New Improved Life', 'The Indian Multinational', 'Whatever role life gives you, play it big', as well as the most recent one, 'Eco Logic for sustainable life'. The company unveiled its new tagline recently, at an event promoting the 2009 chapter of the IIFA awards. The new logo was unveiled in San Francisco, by the Videocon brand ambassador Shah Rukh Khan, From static to flexible conceived by Interbrand, Singapore, the 'V' in the new logo is representative of the new identity of the brand an

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identity that is fresh, dynamic, and has been provided a life of its own. The new 'V' is composed of two animated green, lava-like shapes Called Chouw and Mouw both of which have distinct identities. Chouw and Mouw are 'live' characters, and will be used through a series of short videos to tell simple stories, each depicting a positive dimension of Videocon's new tagline, 'Experience Change'.

Both have certain personality traits, based on their physical attributes. The bigger one, Chouw, is slow but earnest; strong and silent; he is patient, good natured, kind, and maybe a little romantic too. The smaller one, Mouw, is quick witted, energetic bordering on restless, curious, and funny. Physically, they can coerce their bodies into rudimentary shapes that help them to get on with tasks at hand. The colour palette has been chosen to reflect the philosophy of the Videocon Group, that is, the green colour is symbolic of the company's ecology drive. Prasoon Joshi, executive chairman, McCann Erickson India, and regional executive creative director, Asia Pacific, McCann Erickson, says, "The task at hand was challenging, keeping in mind the brand equity and recall Videocon already enjoys. So, keeping in mind that the brand was getting into new age categories, it was decided to get

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rid of the static nature of the brand and getting it to move on. Hence, the new identity will bring energy into the brand." Joshi, along with Vineet Mahajan, senior creative director, led the team from T.A.G., McCann Worldgroup's second agency, which was recently handed over the duties for the brand. As far as the characters are concerned, Joshi maintains that they will help to create buzz and visibility around the transformation and establish the new logo in the consumer's mind effectively.

What prompted the change? The brand, which has been in existence for more than two decades, has managed a fair share in the entry/middle product segment. It is perceived as a brand for the Indian middle class -- no frills, no glamour, simple, reliable and hassle-free. However, in the high-end products segment, Videocon is way behind Samsung and LG. For example, it does well in the conventional CTV category but not in the LCD category. Again, while the window airconditioner category is doing well, not much is happening for the brand in the split air-conditioner category.

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With the present generation of consumers moving fast towards the premium segment, even for their first buys, the brand is not being seen as the preferred one. As a result, it is not able to cash in on the high growing segment, which is the premium category of products. This prompted Videocon to opt for a change. It has decided to focus on the premium segment and would now diversify into other related high-growth categories with the launch of its mobile services, handsets business and IDTV/D2H (in-built set-top box with single remote). Videocon expects to double its turnover in the next couple of years, and a large part of the increase is expected to come from these high-growth segments. The brand will also be positioned to make a connect with the hearts and minds of young-at-heart consumers. Adds, K R Kim, vicechairman and CEO, Videocon Group, in a communiqu, "The rationale behind Videocon's brand evolution comes from our constant endeavour to listen and respond to the changing market dynamics in India and overseas."

Executing the change The re-branding comes after a major review of the brand's advertising and media planning and buying duties. The group had put up the

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account, estimated to be in the region of Rs 200 crore, for a pitch. For the media duties, it appointed ZenithOptimedia. The creative duties for its consumer electronics and appliances business went to T.A.G. Videocon's five group brands -- Sansui, Electrolux, Akai, Hyundai and Kelvinator -- as well as Kenstar, were awarded to Saatchi & Saatchi. Other than that, among the brand's new verticals, its DTH venture, D2H+, is with Publicis Ambience; while the telecom venture, Datacom Solutions, is with T.A.G. To communicate the change in identity, the brand will engage in strong marketing initiatives and promotional campaigns across all the media, including print, electronic, radio and various BTL and onground activities, marketing collaterals and visual merchandising. The present campaign that announces the change comprises five TVCs, of which one is already on-air. Each commercial is a short story of someone in need of help. Chouw and Mouw come to the rescue and spread happiness and joy through their charm, kindness and efforts.

Joshi adds that apart from this, digital, outdoor and sponsored events are also being used, while the Chouw-Mouw jingle will be leveraged for radio. The present endorser of the brand, Shah Rukh Khan might take a backseat, while Chouw and Mouw create the buzz.

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Anybody Changing?

Demographically, the Indian consumer is getting younger -- it is predicted that by 2010, half of the country's population will be below the age of 25. Godrej, the 112-year-old consumer durable major identified this in 2008, when it went for a makeover. Though its typography and logo remained the same, a few colours were added to the logo to make it look more vibrant. Godrej had also relied on Interbrands for its makeover duties. Brand consultants believe that legacy brands have to constantly reinvent themselves to be relevant to their consumers. Their positioning should be such that they are equally aspirational to the next three generations, as they are to those generations that grew up using the brand. Jagdeep Kapoor, chairman and managing director, Samsika

Marketing Consultants says that the 'Videocon Washing Machines...' jingle still runs at the back of his mind, while he glances through the new campaign and logo. According to him, there can be three situations when a brand goes for a makeover -- mergers and acquisitions; the brand not performing well or just putting some new

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clothes on. For Videocon, he feels it could have been a fear of a disconnect between the brand and the consumer. "The brand has changed its positioning quite a few times. Now, with the old Videocon jingle and the previous Shah Rukh Khan adverts, coupled with the new green logo, I feel a bit confused; the consumer might feel confused too. And if the consumer is confused, the brand is refused," he remarks. However, he likes the idea of the two new characters to spread the brand message. However, what with Vodafone's Zoozoos and Virgin's unique characters, the success rate of Chouw-Mouw is being doubted by some. The characters may also end up as a 'me-too' phenomenon, especially since all three brands are present in the telecom space.

Sudhir Sharma, independent brand consultant and designer, talks about the logo and typography: "I found the lava-logo to be rather weak and not very pleasant and graphic, though the typography was done quite nicely, keeping in mind appliance brands." According to him, the consumer will be looking more at the service and quality, rather than the logo colour or fonts. So, given the fact that Videocon is marching towards newer categories such as DTH and mobiles, the change will marry well with the concept.

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However, keeping in mind the brand has existed for quite some time now, it would be disastrous if the consumer has had any bad experiences previously with, say, its washing machines or

conventional CTVs, which will, in turn, put him off the newer line-up of products as well. "Unlike most PSU banks, which change their logos and identity from outside and offer the same sloppy service inside, Videocon has to offer the consumer something truly rewarding and fresh," he says. However, unlike Godrej, he feels that Videocon's transformation is quite visible, especially with the two new characters.

History of Videocon Videocon is an Indian multinational with interests in consumer Electronics, Home appliance, colour picture Tube Glass ,and oil & Gas .Videocon was founded in 1987 by Nandallal Madhavlal Dhoot . At that time it used to manufacture Tv and Washing machine, In 1989 -90, Videocon Started manufacturing Home Entertainment System, Electric Motors & AC. Videocon entered Refrigerators and coolers segment in 1991. In 1995, Videocon started manufacturing Glass shells for CRT and in 1996 it ventured into Kitchen appliances and crude oil segment. In 1998, Videocon started manufacturing Compressors & Compressor Motors. In the year 2000, Videocon

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took over Philips Color TV Plant. In 2005, Videocon tookover 3 plants of Electrolux India and acquired Thomson CPT. Today, it has evolved into a giant conglomerate with annual revenues of over U$4.1 billion. Business Interests of Videocon

Consumer

Electronics

&

Home

Appliances:

Videocon

enjoys

leadership position in consumer products like Color Televisions, Washing Machines, Air Conditioners, Refrigerators, Microwave ovens and numerous other home appliances. Videocon's refrigerator manufacturing enjoys synergy with its in house compressor

manufacturing technology in Bangalore.

Display industry and its components: After the acquisition of Thomson in 2005, Videocon has emerged as one of the largest Colour Picture tube manufacturers in the world. It has plants in Mexico, Italy, Poland and China and manufactures a range of high- tech products such as slim CPT, extra slim CPT and High Definition 16:9 format CPT.

Colour Picture Tube Glass: Videocon is one of the largest CPT Glass Manufacturers in the world. It has plants in Poland and

India.Videocon's CPT Glass manufacturing complements its Colour Picture tube manufacturing business.

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Research & Development The company gives utmost importance to the R & D activities, which are carried out, at in-house R & D centre .The Company carries on new innovations in product development, cost reduction, quality improvement, process improvement, process controls.

1) Specific area in which R & D is carried out by the company During the year, the company has carried out research and Development in the following areas. 1. Home theatres-High end models and HTIB models. 2. Larger Screen Television i.e. 32 inch and 38inch. 3. True Flat Televisions. 4. Plasma Televisions. 5. Cosmetic Design and new out look to the TVs 6. Manufacturing of components for CTV,Refrigetors and Air conditioners. 7. Efforts to reduce power consumption of all its final products.

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2) Benefits Derived as a result of the above R&D. The company has Derived the following benefits as a result of the Research and Development: 1. Development of new design in product and launch of various new models. 2.Able to complete with the foreign players in the Indian Market by cost reduction and offering innovation features and to maintain market leadership in television under Videocon umbrella. 3. Increase in productivity. 4. Reduction in power consumption of some of the products.

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3) Future plan of action In the coming days company is aiming to achieve development in the following through Research and development:

1. Manufacturing of components for consumer Electronics Product. 2.Multimedia TV 3. Plasma televisions. 4. Launching of New Brands & Sub-brands under Videocon umbrella. 5. Composite Home Entertainment system with internet adaptability. 6. Work on better features, better quality & improved reliability with reduced/low prices. Company always attempts to use the latest and advanced technology in production process. the Keeping pace on with the technological sophisticated

developments,

company

keeps

adding

equipments with focus on automation to minimize manual intervention in manufacturing process thereby ensuring quality of the final product.

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Quality Policy: We, all Videocon Appliances Limited are committed to provide product with inbuilt quality and reliability so as to achieve at most customer satisfaction. We shall

Fulfil agreed customer requirements. Comply with applicable statutory and regulatory requirements. Comply with our quality management system, and Continuously improve the effectiveness of our quality

management system. Director Sethuraman

List of Departments at Videocon Appliances

Plant Engineering Department. PPC dept. (Production, planning &Control) Purchase Design and Development dept.

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Account dept. Material dept. Excise dept. Quality Control dept. Paint shop BSR dept.(Bounded store room) SAP dept (System Application Production) Imports dept HR dept (Human Resource) Show Case dept.

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Chapter Organisation Hierarchy:-

REF.DIVISION/ DIRECTOR (APPLIANCES)

AGM(PRODUCTION)

SR.MANAGER

DY.MANAGER

MANAGER

ASS.MANAGER

SR.MANAGER/S.R ENGINEER

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ENGINEER/EXECUTIVE

R.OFFICER/R.ENGINEER

ASST.TECHNICIAN(SUPERVISIOR)

ASSISTENT

TRAINEE(G.E.T)

WORKER

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PROJECT OVERVIEW Introduction Consumer Durables Sector The durables market is replaced with opportunity, with soring demands. The last decades has seen unemitted rise in demands in consumer durable sector. A number of factors have contributed to the persistent rise in demands for consumer durables in India. The most perceptible includes the mounting income levels of emergence of dual income families, availability of disposable income, changing lifestyles. These factors have lead to emergence of highly aware & demanding consumer base. In terms of product category the consumer durables can be stratified into consumer electronics compromising of T.V. sets , Audio system, VCD players & others & Appliances referred to as White Goods. Which includes washing machines, refrigerator, microwave ovens air conditioner. MNCS with their superior technology & high spending on R & D have a distinct edge over the Indian manufacturers. Domestic companies are able to have a standing owing to a far-reaching distribution network & a better understanding of the local market conditions.

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In the rural areas the demand is also governed by the extend of government funding for infrastructure development, particularly with respect to electricity. RNCOS, an Indian based market research company, in its report highlighted the overall contribution of Indian consumer durables sector. These have been stiff competition among major MNC brands like Sony, Samsung and LG; especially in the high demand categories like flat screen TVs and frost-free refrigerators.

Major players in consumer Durables sector LG Sony Samsung Videocon Godrej Haier Hitachi

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Sanyo Sharp Electrolux Kenstar Toshiba Kelvinator

Customer Needs Assessments: A customer is someone who makes use of receives the products or services of an individual or organisation. The word historically derives from custom means habit A customer was someone who frequented a particular shop. who made it a habit to purchase goods there, and with whom the shopkeeper had to maintain a relationship to keep his or her custom, meaning expected purchases in the future. Customer needs may be defined as the goods or services a customer requires to achieve specific goals. Different needs are of varying importance to the customer and other communications etc.

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Assessment is the process of documenting, usually in measurable terms, knowledge, skills, attitude and beliefs.

Scope of the Project It was found easy to know the perception and satisfaction of retailers and customers about the consumer durables on Videocon products. To eliminate the difficulties of the retailers so as to increase the sales volume. By adopting new promotional strategy, market share can be increased. The study was limited to the opinions of households and dealers only. Project was carried out to access new needs of customers for particular product. It will reveal trend of markets and problem related to sales.

Retailer have a handsome knowledge of customers attitude towards the product of manufacturer; therefore it is necessary to know their views on several aspect, which would help to know the pulse of market

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. Objectives of the Project Main object of the project is to match theoretical aspect with practical experience. Project is the vital element in curriculum of MMS. It helps the students to be familiar with the atmosphere of the organization. It gives an exposure to the students to an organization. Day-to-day business problems and obstacles in the way of management are perceived by the student during the project. The project is the integral part of management study which enables the student to develop his total personality as an efficient manager. It helps to take up arising challenges of business work and lead his contents in the actual field of management.

Research Methodology Research methodology is the systematic and objective search for analysis of information relevant to the identification and solution of any problems in the field of business. Research Methodology Adopted

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Research Design: Descriptive Research Research Instrument: Structured non disguised Questionnaire. Sampling Plan (a) A) Sampling Technique: Non-Probability Sampling (Area & Stratified Random Sampling) B) Sample Universe: Aurangabad c) Sample Population: All dealers and houses in Aurangabad. D) Sample Frame: Middle class Household E) Sampling Unit: Households/Dealers F) Sampling Size: 130

Sampling Technique

Area sampling is one where the overall area to be covered in the survey is divided into several smaller areas within which a random sample is selected. For example, a city map can be used for area sampling .various blocks can be identified on the map and this can provide a suitable frame. The entire city area can be divided into these

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blocks which are then numbered and from which a random sample is finally drawn. In this project various residential and dealers were choose at random for the purpose of survey. Stratified Random Sampling is one where the population is divided into mutually exclusive and mutually exhaustive strata or sub-groups. It does not means that stratification does not mean absence of randomness. All that it means is that the population is first divided into certain strata and then a simple random sample is chosen within the stratum of the population. Sampling Plan (b) a) Sampling technique: Non-probability Sampling (Convenience Sampling) b) Sample Universe: Aurangabad c) Sample Population: All dealers of refrigerators in Aurangabad. d) Sample frame: All Dealers of refrigerators in Aurangabad. e) Sampling Unit: Dealers. f) Sampling Size: 21 Data Analysis & Interpretation

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The crux of the research lies in the interpretation of the collected and analyzed data. The value of the research is derived only when some conclusion can be drawn through it. Tasteful information based on the real facts and data is made available. Presentation of this information in a conductive and a logical sequence is also important to achieve the research objective in a true sense. Thus an attempt toward the same is being made with the help of project report. Q. Which is the most preferred brand in refrigerators? a) Videocon b) LG c) Samsung d) Whirpool e) Other Option Respond percentage A 20 19 B 42 41 C 9 8 D 21 20 E 12 11 Total 104 100

Q. What other features you found in other brand? a) Six sense

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b) Child lock c) Door cooling d) Other Option Respond percentage A 26 25 B 16 15 C 28 27 d 34 33 Total 104 100

Q. Do you consider star rating before purchasing electronic product? a) Yes b) No

Q. Do you have a refrigerator? a) Yes Option Respondent Percentage A 101 97 b) No B 3 3 Total 104 100

Q. Do you completely satisfied with your product?

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a) Yes

b) No

Option Respondent Percentage

A 101 97

B 3 3

Total 104 100

Q. Which Brand of refrigerator you sell? (For dealers) a)Videocon b) Whirpool c) LG d) Samsung

Q. Rank the aspect that you look in a refrigerator?

Rank

Household

Dealer

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1. 2. 3. 4. 5. 6. 7

Brand Space Aesthetics Warranty Cost Power consumption Cooling time

Brand Space Cost Aesthetics Warranty Power consumption Cooling time

Q. What is your purpose to by particular refrigerator? a) Household purpose b) Commercial purpose c) Office purpose d) Other

Q. Cooling time are you planning to buy new refrigerator in near future? a) Yes b) No

Q. Which colour you prefer in refrigerator?

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a)Red b)Silver

c)skyblue

d)pink e)other

Household:Option Response percentage a 19 18 B 25 24 C 21 20 D 15 14 E 24 23 Total 104 100

Q. What capacity you will prefer? a)180lit b)220lit c)250lit d)280lit. e)above 280 lit Option Response percentage A 15 14 B 19 18 C 21 20 D 25 24 E 24 23 Total 104 100

Dealers:-

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Rank 1 2 3

Capacity 180 280 Above280

Door type Single Double door Double door

Q.Which type of refrigerator will you prefer? a)Frost free b)Direct cooled c)other Q.Would you like to have designer door? a) Yes Q. Do b)No you check about the quality of service (post

purchase),before purchasing the refrigerator? a) Yes b) No

Q. Do you ask about other technical details before purchasing the product? a) Yes b) No

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COMPANIES IN THE REFRIGERATOR MARKET The leading companies in the market with their market share in first half. TOTAL MARKET BRAND VIDEOCON FROSTFREE SEGMENT Sales(Units) 199000 % Share 12.9% 21000 12%

SAMSUNG

396000

25.7% 25000 14.3%

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LG

349000

22.7% 8000 4.6%

GODREJ

178000 25000

11.5% 13.8% 5.5% 83000 7.4%

BPL

85000

WHIRLPOOL

10000

0.7% 7000 4.0%

ELECTROLUX

8000

0.5% 8000 4.6%

OTHERS TOTAL 100%

313000 1535000

20.3% 100% 180000

INDUSTRY ANALYSIS (REFRIGERATOR INDUSTRY IN INDIA)

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THREAT OF ENTRY Barriers of entry Economies of scale: The players like Godrej, BPL , Whirlpool, Videocon and Electrolux have achieved economies of scale. Godrej has a capacity utilization of 75% and the highest capacity in the industry. This declines their unit cost of every function of business and enables them to keep their prices low. This will force the entrant to come in at a large scale and risk strong reactions from them or come at a small scale and accept a cost and price disadvantage. Godrej also possesses economies of vertical integration as it manufactures its own compressors, which constitutes a substantial part of the manufacturing cost. The other players like BPL and Videocon who are currently outsourcing their compressors also plan to set up their own manufacturing units for compressors in the long run. Product differentiation: The companies like Godrej, BPL and Videocon, being very old players in the Indian market enjoy high brand awareness and consumer loyalties. These brand names are associated with trust and reliability in the Indian market.

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The Korean players like LG and Samsung who engaged in heavy advertising and brand promotion during the last year have also created a niche for them in the premium segment. Their brand awareness has grown tremendously after the recent Cricket World Cup Tournament, during which they advertised heavily. These create a barrier to entry by forcing the entrant to spend heavily to overcome existing consumer loyalties and to build a brand image.

Capital Requirements: Huge Capital requirements are posed in front of the new entrant in terms of advertising, product development, Production facilities, Distribution channel credit, inventories and for covering up the start-up losses.

Access to the distribution channels: The Indian players like Godrej, Videocon and BPL which are catering to the mass market have a strong distribution and dealer network.. They have a presence in the urban as well as the rural areas. Moreover these companies have established developed ties with the channel members over the period of time, which are hard to break.

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Whirlpool has also developed a strong network of 4000 dealers in urban and semi urban areas in a period of few years. The South Korean Majors like Samsung and LG have a dealer network of more than 1500, mainly in urban areas and plan to expand it in rural and semi urban areas also. This poses a major threat in front of the new entrant as the existing firms already serve the channels and the new entrant will have to persuade the channels to accept its product through high margins, promotional allowances, better credit facilities and advertising support, which will reduce the profits.

Cost disadvantage independent of scale

Learning or Experience curve: The old players like Godrej, BPL, Videocon are high on the experience curve, as they know the Indian Market well. This Experience lowers their costs in production, marketing, and distribution and in other areas of business, thus giving a cost disadvantage to the new entrant. Government policy: The Government policies of levying duties on the imported Refrigerators and refrigerator parts gives an advantage to

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the Indian Players and in a way protect them from price competition in the market with the MNCs. Expected retaliation: The industry as a whole faces excess capacity and the supply exceeds demand and so the existing competitors are expected to respond forcefully to a new entrant. The new entrant will face competition based on the segment to which it tries to cater If the company enters in the Direct cool segment Godrej and Whirlpool will pose the major threat. If the company enters in the Frost free, high capacity segment (above 300 Ltrs) it will have to face main competition from LG, Samsung, BPL and Whirlpool.

2.

INTENSITY

OF

RIVALRY

AMONG

THE

EXISTING

COMPETITORS. The companies in the Refrigerator industry of India can be divided into four strategic groups based on the price and the perceived quality of the products. These groups also differ in their target segments and the strategies adopted to cater to it.

High Price

Medium Price Low Price

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High Perceived Quality 1.PREMIUM STRATEGY (1)LG, Samsung, (2) Whirlpool, BPL Moderate Perceived Quality 4.OVER CHARGE STRATEGY STRATEGY (3) Godrej (4) Videocon Low Perceived Quality 7.RIP OFF STRATEGY STRATEGY 5) Voltas 8.FALSE ECONOMY 6.GOOD VALUE STRATEGY 5. MEDIUM VALUE 2. HIGH VALUE STRATEGY 3.SUPER VALUE STRATEGY

9.ECONOMY STRATEGY

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1. LG, Samsung: This strategic group includes the South Korean MNCs. These are the players who are operating only in the frost-free segment and carry a large product length. They have products only in the above 300 Ltrs segment. These brands follow the Premium strategy of high quality at high price. They are targeting to the upper income as well as the higher middle class of the society with the products that are associated with status. These companies have shown a tremendous growth in few years. 2. BPL, Whirlpool: BPL, the market leader in the Frost-free segment and Whirlpool of India, the subsidiary company of the US giant Whirlpool form this group. They have frost-free models in the below 300 Ltrs capacity segments as well as the above 300 Ltrs segment. The models in above 300 Ltrs segment cater to the replacement market and to the higher middle class. These aim at providing high quality at a moderate price. The models in the below 300 Ltrs are targeted at the first time buyers of middle class and are not high in price. 3. Godrej: These are the old brands of India, which have high brand awareness and presence in urban as well as the rural Markets. These are mainly serving to the Direct cool segment and have few models in the frost-free segment. These brands are catering to the middle class and are not very high in prices.

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4. Videocon: This is the company, which introduced Frost-free refrigerators in India. The products are value for money products. With the lowest prices in the market it is catering to the middle class of the society.

5. Voltas: These companies cater to the middle and lower middle class of buyers with their low priced ranges. The companies in the market witness a tough competition from the other members of its strategic group as they fight for the same chunk of the market. As their products do not differ much in the features, they try to differentiate their brands through copy differentiation in advertising. The competition intensifies as most of the companies are using the same dealer network to distribute their products. They lure the dealers to promote their product by different strategies on margins, incentives and credit and payment terms. The competition increases as all the companies have high Strategic stakes in the Refrigerator Business. A major fraction of their revenues come from this business and so they retaliate sharply to any move of the competitor.

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The industry has high Exit Barriers for the members who have invested in the manufacturing facilities in India in the form of specialized assets.

3. PRESSURE FROM THE SUBSTITUTES The domestic refrigerators have no substitutes and so it faces no threats in terms of that.

4. BARGAINING POWER OF THE BUYERS The bargaining power of the consumers is high due to the presence of many competitive products in the market. The refrigerator models available are not much differentiated in terms of the features, and so the buyers can switch between the different brands based on other criteria like Price, service, warranty, promotion and financing schemes.

5. BARGAINING POWER OF THE SUPPLIERS. Not very High

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DISTRIBUTION CHANNELS IN THE INDUSTRY The Refrigerator companies in the industry use different distribution channels to reach the customer. These are as follows:

1. In this type of channel the company uses its sales representatives to deal with the dealers directly. The dealers place the order through the sales representatives who visit them periodically, and the products are delivered directly from the company. Some companies appoint Direct Dealers who act as their Franchisee Outlets or their Exclusive showrooms.

BPL uses this channel

2. In this channel of distribution the company appoints distributors on the basis of District/ Population /No of Dealers to be handled by one distributor. The area of operation and its potential is also taken into consideration. Some of the companies make the distributor totally responsible from appointing the dealers to providing after sales service. Godrej use this channel

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3. In this channel of distribution the company appoints Distributors as well as Direct Dealers. The company appoints distributors to deal with small dealers who order small quantities. With the dealers who have good potential and sales the company deals directly. Videocon and Samsung use this channel: The Korean Multinational follow this channel where they appoint Distributors for upcountry towns and direct dealers for big cities and major towns eg. Ahmedabad.

4.

In this channel the company appoints a C&F agent who acts on

behalf of the company. The C&F agent is totally responsible for appointment of Distributors and Direct Dealers. He sells to both the Distributors and the Direct Dealers at the same rates.

Strategic group mapping of industry players:

Recommendations: Company had believed that if we provide good quality product in the market, the demand will definitely be generated at customer side, but

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company has to follow push as well as pull strategy in order to increase its sales.

The recommendations are as follows:

The company should improve the consumer target approach

The company should focus on after sales strategy

Data Collection

Introduction to primary data Primary data is the finding which is collected by the way of an interview, mail survey, observation etc. For this project data is collected is by the way of personal interview. Interview is one of chief means of collecting data .interview may be defined as a systematic conversation initiated for a specific purpose and focused on certain planned content area. Introduction to secondary data Secondary data is the work of findings which are already present.

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Secondary data is in the form of published and unpublished document, reports, magazines, letters etc In this project secondary data consisted of company data, journals and product catalogues.

Key Findings The most used brand is LG, followed by Videocon, Godrej,

Samsung, Whirpool in the Surveyed region. Key competitors in refrigerator sectors are LG, Godrej,

Whirpool, Samsung etc. Consumers need refrigerator with Star rating and which is

preferably silver in colour. LG is leading the market with a market share of about 30%

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% Segment Top High Medium Low Price >20000 15-20000 upto 15000 <8-9000 Capacity >300 ltrs >230 ltrs 165-230 ltrs upto 90 ltrs share 3% 7% 85% 5%

Market share :Data collected from ORG report

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It can be seen from the pie chart that LG is leading the market with an market share of 30%, followed by Whirpools market share of 22%. Videocon has a market share of about 17% Conclusion: In order to with stand tough competition from rivals like LG, Samsung, Whirpool and Godrej. Videocon Should Come with new model in the most preferred segment. As customer need new and improved refrigerators thus Videocon has to make innovative products which are of use to the consumer. Based on the findings, new model should have double designer door, work without stabilizer, work against fluction in electricity and space to keep 2lit. Bottle vertically. Thus recommended features must be incorporated in the new product.

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Limitations While working on the proect, i came to know about the limitations of the company. They are as follows Small sample size due to small constraints The project has been carried out in AURANGABAD only hence

not applicable to other cities and towns of India, as various factors would differ Due to nature of certain questions respondents were reluctant

to part with certain information.

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Recommendation: Customers readily accept new things, so keep on making minor changes and innovations in the existing and new models. The new product must be launched in the most preferred segment i.e. double door .New concept of designer door and water dispenser must be incorporated in the new product.

Bibliography

www.wikipedia.org www.videoconworld.com www.videocon.com Marketing Management Philip Kotler

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