Sales Marketing Presentation on Consumer Durables

Classification Of Consumer Durables

Consumer Durables Industry

Before the liberalization of the Indian economy, only a few
companies like Kelvinator, Godrej, Allwyn, and Voltas were the major players in the consumer durables market, accounting for no less than 90% of the market.

Then, after the liberalization, foreign players like LG, Sony,

Samsung, Whirlpool, Daewoo, Aiwa came into the picture. Today, these players control the major share of the consumer durables market.
2008. It is growing very fast because of rise in living standards, easy access to consumer finance, and wide range of choice, as many foreign players are entering in the market

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

Consumer Durable Industry

The penetration level
of consumer durables is very low in India, as compared with other countries. This translates into vast unrealized potential. For example, in case of color televisions (CTVs), the penetration level of various countries is:
India Brazil 24% 11%

China
US

98%
333%

France
Japan

235%
250%

Demand and Penetration Level of White Goods in India

Year 1995-1996 2005-2006 2009-2010

Demand

3.43 million

8.72 million

13.14 million

Penetratio n Level

149 per 1,000 Households

319 per 1,000 Households

451 per 1,000 Households

Consumer Durable Industry

In a study conducted by Frost & Sullivan
and commissioned by India Semiconductor Association (ISA), the demand for Electronic Appliances is projected to grow exponentially at a compounded annual growth rate (CAGR) of 30%.

Consumer Durable Industry

The key growth drivers for the Indian consumer durables industry:

Rise in disposable income Availability of newer variants of a

product Product pricing Availability of financing schemes Rise in the share of organized retail Innovative advertising and brand promotion Festive season sales

Projected growth in detail

Commodity Air Conditioners Split Air Conditioners

Excellent growth rate projected..

Growth % 25 60

Frost-free refrigerators Washing machines

Fully automatic Washing machines Microwave ovens LCD TVs Plasma TV VCD/MP3 Players DVD Players Organized DVD Players

54 20
35 35 110 100 20 25 30

Major challenges plaguing this industry: Threat from new entrants, especially
global companies Rivalry and competition Potential markets remaining yet untapped Threat from substitute products/services Customer power with respect to availability of choice

Company

The Late Shri. Nandlal Madhavlal Dhoot Founder, The Videocon Group ( 26 February 1932 - 26 April 1993 ) A man of Ideas. A man of Substance. A man of Vision.

Company Profile
The Videocon group has an annual
turnover of 4.1 billion $, It is one of the largest Consumer Electronic and Home Appliances companies in India. Since 1998, it has expanded its operations globally, especially in the Middle East

Videocon at a glance
Videocon at a glance:-

Key Factor for the success

To delight and deliver beyond expectation Through ingenious strategy Intrepid entrepreneurship improved technology Innovative products Insightful marketing Inspired thinking about the future

Sales and Distribution (Urban area)

Increasing the number of dealers by offering them

lucrative margins. Discounts during festival times. Dealer meetings several times a year to maintain cordial relation with dealers. Dividing dealers into silver and gold category as per their performance and as per this the margin varies. Authorised sales person in dealers stores for promotion of their products. Coupons and scratch cards during festival seasons.

Sales and Distribution (Rural area)

Indian rural consumer lives in over 6 lakhs villages across the country and

they account over 70% of the population. Strategy:Cashing on improvement in lifestyle of rural consumer Increase in the number of outlets from 23 to 46 in recent months. Posting of 930 area managers across the country. This brings them closer to the consumer Increase in road shows, society demonstration and localized shows. Increased annual advertisement and promotion budget from 25 to 42 crores. Cheaper products to lure the rural consumer. 2600 mobile authorized service personnel. Volumes makes up in the city whereas values makes up in rural area. Dealer margin increased from 7 to 12 percent.

Some facts, Irregularities: The Govt charges 16% excise duty on

televisions, whereas it is 12% for PCs. Similarly, televisions attract a 12.5% VAT rate, while it is 4% for PCs 12% growth rate, achieved despite the constraints of an inverted customs duty structure and high levels of excise duties

Financial Statement
Period Ending Description
Net Sales / Interest Earned / Operating Income
Other Income Total Income Expenditure Interest Profit Before Depreciation and Tax Depreciation Profit before Tax Tax Net Profit Equity Capital Basic EPS after Extraordinary items Diluted EPS after Extraordinary items Nos. of Shares - Public Percent of Shares-Public Operating Profit Margin Net Profit Margin Cash EPS 22144 62 22206 -18063 -1556 20747 60 20806 -17077 -1495

31-Mar-09

31-Dec-08 Amount(Rs. million)

30-Sep-08

30-Jun-08

26260 51 26311 -21611 -1106

26129 75 26204 -20778 -1019

2587
-1482 1105 -375 730 2293 3 3 39684396 17 19 3 10

2235
-1380 854 -250 604 2293 3 3 41994018 18 18 3 9

3594
-1239 2355 -600 1755 2293 8 7 18 7 13

4407
-1257 3151 -600 2551 2293 11 11 42738461 19 21 10 17

Market Share for Washing Machine Year 2007-2008

Others 6% Godrej 16%

LG 22%

Whirlpool 14% Videocon 16%

Samsung 26%

Market Share for Televisions Year 2007-2008

LG 19% Others 31%

Videocon 22% Micr (Onida) 13% Samsung 15%

Videocon at a glance:-

Videocon

Partner

Tie-ups with global leaders

Product Fly Back Transformers, Tuners Washing Machine Air Conditioner Refrigerator Audio Products and Color TV

Nature Of Tie-Up Technical Support

Samsung Electronics

Matsushita Electric

Technical * Collaboration

Matsushita Electric Matsushita Electric Sansui Electric Co. Ltd

Design & Drawing Design & Drawing ODM for Indian Market

Techneglas

Glass Shell

Technical Collaboration

Akai

Audio Products and Color TV

ODM for Indian Market

Hyundai

Color TV

ODM for Indian Market

Electrolux AB Sweden

Refrigerator,

1.ODM & Indian Market

Air Conditioner and

2.Sourcing Market

of

components

for

Global

Washing Machine

3.ODM for Global market

Vision & Mission

To delight and deliver beyond
expectation through ingenious strategy, intrepid entrepreneurship, improved technology, innovative products, insightful marketing and inspired thinking about the future.

Global locations..more than 25000 employees.

Organization chart

Organization chart
Chairman CEO G.M

V.P R&D

V.P Finance

V.P Mrkting

V.P H.R

V.P Ops

AD MGR

Area MGR

Sales MGR

M.R Exe (A/C)

M.R Exe (T.V)

M.R Exe (W.M)

M.R Exe Fridge

Hierarchy in Sales dept:Regional Manager (VP)

Area Manager Sales Manager
Marketing executives

Industry analysis, 5 force model

Michael porters 5 force model Bargaining
Power of Customer Bargaining Power of supplier Threat of new entrants

Competitive Rivalry Within an Industry

Threat of Substitute products

Product Based Sale

Videocon has product based specialized sales process.
They have been innovating on the products on regular basis. On a regular basis they come up with the consumer user

friendly products at reasonable rates. They have bagged awards pertaining to their development on products like Their products have been certified by USA Laboratories for being compliant with international safety. Certification on products by VDE Germany. The products are CE approved for exports The products are certified with British Standards. The products are got ISO 9002 quality certification.

Products Based Revenue FY 08

R&D
Videocon gives utmost importance to R&D
activities, which are carried out at in-house R&D centre. This helps the company in cost reduction, improving the quality, process implementation, process control and product development. Specific areas in which R&D is carried out. Home theatres True flat televisions Plasma televisions Manufacturing of components for CTV, fridge & A/C.

SWOT Analysis: Strengths: Largest distribution capacity and manufacturing base across

India and a plant in China, Poland, Italy and Mexico Videocon has a network of 400 plus service. Tie up with Mitsushita electric company Japan adds goodwill. Strong backward integration Large brand basket Multi brand stratergy Cheap price 3rd largest picture tube manufacturer in India. Global acceptance

SWOT
Weaknesses: Less investment on CTV, LCD & Plasma Lesser margin to distributors/dealers Weak promotional strategy of CTV, LCD &
Plasma Less focus on unconventional channels Poor after sales service No exclusive showrooms

SWOT
Opportunities: Going global Exploring new segment Growing semi-urban markets Upward growth of the industry Growing purchasing power of the middle class
segment Mergers and joint ventures of strategic alliances Intense competition Change in taste and trends

SWOT
Threats: Entrance of global competitors like China Brand loyalty is more of LG & other Cos. Substitute products or services Increased trade barriers Brand reputation is not that great Strong competitors like LG, Samsung, Sony
etc.

Marketing strategy
The 4A approach: Availability (Place) 1080 authorized service centres 875 authorised service providers. 900 + sales and service dealers 26 mother warehouses 123 stock points

Marketing strategy
Affordability (Price) Special prices offered during festive seasons
and the lowest price in the market Product priced by middle class consumers in mind

Marketing strategy
Acceptability (Product) Product localization as the key strategy Regional language menus on its TVs High quality product at lowest price in the
market. Established brand Upgraded features across its product line

Marketing strategy
Awareness (Promotion) Mobile vans Cookery classes to promote microwave Ads on television, print media etc Exhibitions and road shows in rural areas Festive season offers and discounts

Logistics Management
5Rs of Logistic: Right time Right place Right condition Right cost Right handling

Recruitment
Preferred qualification: Any Graduate BCA/MCA CA/ICWA BE/B.Tech/M.Tech B.Com M.Com with diploma in Materials Management from

Indian Institute of Materials Management MBA/PGDM in all streams

Recruitment
Sources of recruitment

Internal:Transfers Promotions Upgrading Demotion Retrenched employees Dependents of deceased employees

External:Press ads Educational Institutes Placement agencies Employee referrals Recruitment at factory gates

Training
Videocon believes its most valuable capital are its people. Videocon's main

training centre in India is supplemented by other learning resources strategically located around the globe. These offer advanced programs designed to develop management and operational skills. Steps:Periodic seminars and workshops for sales team as per their designation and specialization required. Books made available relating to different skills required to be possessed by the sales team. Various trainings and tests conducted on intranet. Cross training Tie-ups with universities and B-schools encouraging sales team for further education. Before shift briefings to give information regarding any updates Encouraging sales team to train other staff members which can enhance hs confidence. Personality development workshops conducted periodically.

Motivation

Weekend get away programs Increments and promotions Gifts and contests for Sales team Chance to attend the yearly CEO meet in foreign locations Rewards and recognition programs organized every quarter on a grand level Incentives as per the targets achieved. Assigning leadership roles as per performance Skill enhancement programs for the performers along with trips to foreign locations.

Attrition
Attrition rate is 23%, due to following reasons: Lure of better pay: If skilled manpower is scarce,

professionals will inevitably be poached for higher salaries. Leadership crisis: Being a fairly new industry it does not have too many established players. Hence, there are very few veterans and worthy leaders in top management positions. This presents a crisis of leadership in smaller firms, which makes people move onto larger and more reputable companies. Lack of understanding of PR: This may come as a surprise, but most people still have a very vague notion of PR.

Attrition
Two main causes of attrition

Functional:Retirement Spouse job transfer Major health problem To take care of sick

Preventable attrition:Lack of job satisfaction Stressful work environment Outside influence Conflict with manager

Thank you