Market Report On Lg Refrigerator w184

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UNIVERSITY OF WALES INSTITUTE CARDIFF Master of Business istration MBA 403

Marketing (Assignment 2) LETURER: MR David Goh STUDENT’S NAME: KOTHA SHIV SHANKER REDDY Student ID Number: 0910/5978 TABLE OF CONTENTS: § EXECUTIVE SUMMARY § PRESENT SCENARIO OF REFRIGERATOR IN INDIA § COMPETETORS IN THE INDUSTRY § COMPETETOR ANALYSIS OF INDIAN REFRIGERATOR MARKET § DIRECT RIVAL PROFILE § LG INDIA § PRODUCT PROFILE

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CONSUMER DECISION MAKING PROCESS TARGET MARKET MARKETING OBJECTIVES RESEARCH METHODS REFERENCES

EXECUTIVE SUMMARY The consumer durable industry in India has witnessed a major change in the past few years. The change in lifestyle, increase in household income along with more affordability and an increase in advertising standards have been instrumental in bringing phenomenal changes in consumer behaviour pattern. Indian consumer durables market used to be dominated by a few domestic players like Godrej, Allwyn, Kelvinator, and Voltas. But post-liberalization many foreign companies have entered into India, dethroning the Indian players and dominating the market. The major categories in the market are CTVs, refrigerators, air-conditioners and washing machines. India being the second fastest growing economy with a huge consumer class has resulted in consumer durables as one of the fastest growing industries in India. LG and Samsung, the two Korean companies have been maintaining the lead in the industry with LG being the leader in almost all the categories. A New Report on Indian Consumer Durables Market by Koncept Analytics By Koncept Analytics Pvt Ltd Dated: Jun 03, 2008 According to a survey conducted by FICCI on the consumer durable industry, there has been a notable change in the preferences of consumers towards more tech-savvy, high end quality branded products. The major reasons for this shift can be explained as very low difference in prices between branded and unbranded products, and the excellent quality of after sales service provided by some of the branded companies. One of the major reasons is the entry of foreign companies due to low import duty and other beneficials provided by the government.

REFRIGERATOR INDUSTRY IN INDIA PRESENT SCENARIO The present scenario in India is that refrigerators have the most aspirational value after televisions. This shows that the growth rate of refrigerator is high. Today refrigerators are being manufactured in two basic designs which are: a) Direct Cool Refrigerator b) Frost Free Refrigerator In these two designs of refrigerators, the direct cool design market is much more than the expensive frost-free models. Although the growth is marginal in the direct cool models, the major factor for its growth is the availability of low priced models. A T Kearney’s 8th Annual Global Retail Development Index (GRDI) of 2009 ranked the Indian market as the most promising emerging market for investment in the retail sector.

According to ‘The Rise of The Indian Consumer Market’ (A McKinsey report), the Indian consumer market is predicted to grow four times by 2025 Overview Indian refrigerator market is valued at Rs 4000 crore. Refrigerators hold only 16% of consumer durable market that is valued at around Rs. 20,000-25,000 crore in India. Its market is growing at the rate of 78% annually.

Projected sales for the year 2007-2008

CHALLENGES FACED BY COMPANIES IN REFRIGERATOR SEGMENT Despite the fact that refrigerators have immense utility to housewives and provide a solution to avoid food wastage, the penetration level is still below 20% and its market is growing at a very small pace. This may be because: People in small towns and rural areas do not consider it as a necessary product and are unaware of its utility value. • •

Non-availability of power.

(Reference- http://www.naukrihub.com/india/fmcg/overview/refrigerator/ )

According to an article from economic times, due to the increase in excise duty to 10% from 8%, the immediate net impact on mass items including televisions, washers and refrigerators will be a modest 100-200 rupees http://economictimes.indiatimes.com/news/news-by-industry/cons-products/durables/Budget-to-havepositive-impact-on-consumer-durable-cos/articleshow/5620068.cms. http://www.business-standard.com/india/news/lg-eyes-32-share-in-refrigerator-market/21/11/56713/on http://www.samsung.com/in/news/newsRead.do?news_seq=12993&gltype= http://www.domainb.com/companies/companies_w/Whirpool_India/20090817_product_development.html

COMPETETORS IN THE INDUSTRY The major players and competitors of LG electronics in the refrigerator segment are : Ø SAMSUNG Ø WHIRLPOOL Ø KELVINATOR Ø GODREJ

COMPETITOR ANALYSIS OF INDIA’S REFRIGERATOR MARKET INDUSTRIAL STRUCTURE: the industry structure comes in the category of oligopoly as there are 6-7 players in the market but only 3-4 have a good market share. BRAND IDENTITY: brand identity is very crucial in this industry as the buyers are aware when choosing brands. The company with a strong brand identity will definitely succeed in this industry. HIGH EXIT BARRIERS: the two major exit barriers are a) Very difficult to sell already installed machinery as it is very expensive. b) The difficulty in selling off the existing inventory. NEW ENTRANTS: the new entrant threat is low; it is very difficult for new entrants because of the government policies, high setup cost, increasing import duties, and due to the existence of strong players in the market. ECONOMIES OF SCALE: the established players who operate at higher costs benefit from economies of scale, as the production costs are high; it is a major factor for new entrants. HUGE ADVERTISING COSTS: to create awareness and to make an established position in the refrigerator industry, huge advertising costs are required.

DIRECT RIVAL PROFILE: HISTORY OF SAMSUNG:

BRAND VALUE: since its inception into the Indian consumer durable market, the company has been growing both in revenue as well as brand value. Today Samsung is one of the major players in the consumer durables industry with it’s high brand value and latest technological developments.

TARGET MARKET: Samsung Company is spread all over the world and has vast product lines. Samsung believes in constant innovation and giving out new products at a steady rate. Samsung currently is focussing on upper middle class segments and has targeted specific segments. Samsung also focuses on middle class segments. COMPETETOR STRATEGIC FOCUS: Samsung produces high quality products with constant innovation and Samsung’s goal is to be the leader in refrigeration manufacturing globally through innovative design and up to date technology. This shows Samsung’s research objective and prove that Samsung is striving to be the international trendsetter in manufacturing high-end refrigerators.

LG INDIA Established in 1997, LG Electronics India Pvt. Ltd., is a wholly owned subsidiary of LG Electronics, South Korea. In India for a decade now, LG is the market leader in consumer durables and recognised as a leading technology innovator in the information technology and mobile communications business. LG is the acknowledged trendsetter for the consumer durable industry in India with the fastest ever nationwide reach, latest global technology and product innovation. One of the most formidable brands, LGEIL has an impressive portfolio of Consumer Electronics, Home Appliances, GSM mobile phones and IT products. LG Electronics India Pvt. Ltd., a wholly owned subsidiary of LG Electronics, South Korea was established in January, 1997 after clearance from the Foreign Investment Promotion Board (FIPB). . Established In: May 1997 . Managing Director : Mr. Moon B. Shin . Corporate Office: Plot no 51, Udyog Vihar, Surajpur Kasna Road, Greater Noida (UP) . Corporate Website: http://www.in.lge.com . Manufacturing Units : Greater Noida (U.P.) & Pune (Maharashtra)

Business Areas & Main Products Business Areas & Main Products Category

Main Products

LCD TV , Plasma Display , Display , Colour Television, Consumer Electronics Home Theatre System, Music system, DVD Recorder/Player, MP3 & MP4 Player Room Air Conditioner, Commercial Air Conditioner , Home Appliances Refrigerator, Washing Machine, Dishwasher, Microwave, Vacuum Cleaner Laptop, Personal Computer, LCD monitor, CRT monitor, Computer Products Optical Storage Devices trend setter phone , Camera Phone , Music Phone , Mobile Phone Colour Screen GSM Handset http://www.in.lge.com/AboutUs/aboutus-companyProfile-factsnfig.aspx PRODUCT PROFILE:

Model: GR-M712YSQ

Capacity: 604 litres Green Ion Door Cooling Technology External Micom Child Lock Convertible Veg Box Opti Fresh Vitamin plus One Touch Twist Ice Tray Catechin Deodorizer Cell Fresh Crisper Humidity Controller Anti Bacteria Door Gasket Freezer Lamp VCM Door Finish

Consumer decision making process: NEED RECOGNITION: need recognition occurs when customers are faced with an imbalance between actual and desired states. Need recognition is triggered when a consumer is exposed to internal or an external stimulus. Today’s consumers are looking for refrigerators with innovative design and

latest technology. Nowadays people are looking for more complex features like smart door finishes, humidity controller, anti bacteria and additional features green ion door cool technology. INFORMATION RESEARCH: Customers get their information by two ways of research: Ø Internal Research Ø External Research Internal Research: internal research is basically a process of recalling past information stored in the memory.

External Information research: Non-marketing-controlled information source: product information source that is not associated with advertising or promotion. For example information from friends, relatives, journals etc.... Market-controlled information source: product information source that originates with markets promoting the product. For example information via advertising, news paper articles, in magazines etc....... Buyer’s evoked set: group of brands, resulting from an information research, from which a buyer can choose.

EVALUATION OF ALTERNATIVES: Customers evaluate alternatives based on different criteria like pricing, availability of the product, after sales service, brand loyalty.

PURCHASE: After thorough evaluation of the alternatives, the consumer takes a decision to purchase a product which is more appealing and affordable and which will satisfy their needs.

POST PURCHASE BEHAVIOR: One of the major factors that affect the customer buying behaviour is the after sales service. In electronic industry, after sales services is considered as a part of the product, so for gaining customer satisfaction, these services become a key element in adding the product features which further can help in gaining competitive advantage.

TARGET AUDIENCE: TARGET MARKET APPROACH: there can be two types of market approaches: Ø Market Segmentation Approach Ø Mass marketing Approach Market segmentation approach is the most preferred approach as it gives a clear idea to create a specific tuned product and in deciding the pricing for the specific segment.

IDENTIFING THE SEGMENT Market segmentation can be done on the basis of : Ø Geographic Ø Demographics Ø Behavioural A. Geographic Segmentation:

Region: all metro cities and suburbs. B. Demographics: Family size: 1-2, 3-4, 5+ Gender: male, female. Income: 3, 00, 000Rs and above. Social class: working class, middle class and upper middle class. Psychographic: Lifestyle: culture oriented, health oriented. Behavioural: Occasions: festivals and regular occasions. Benefits: quality, service. Loyalty status: none, medium, strong, absolute. Readiness stage: unaware, aware, interested, desirous, intending to buy.

MARKETING OBJECTIVES: Ø Servicing the health conscious segment by fulfilling their needs by providing the right product. Ø To maintain its competitive edge over the competitors. Ø Increasing its share in the market by catering to new market segments.

RESEARCH METHODS: Secondary Research Method: Ø Ø Ø Ø

Journals. News paper articles and other articles. Text Books. Internet

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