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SAMSUNG LCD TELEVISION - DISTRIBUTION CHANNEL RELATIONSHIP AND MARKET SHARE ANALYSIS

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A MAJOR PROJECT REPORT
                                        ON

    SAMSUNG LCD TELEVISION - DISTRIBUTION
  CHANNEL REL...
CERTIFICATION

        This is to certify that Mr. Prabhjot Singh has completed his project report,
entitled‘Samsung LCD T...
ACKNOWLEDGEMENT


       The present work is an effort to throw some light on ‘Samsung LCD Television -
Distribution Chann...
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SAMSUNG LCD TELEVISION - DISTRIBUTION CHANNEL RELATIONSHIP AND MARKET SHARE ANALYSIS

# PRIMARY OBJECTIVES
The primary objective of the study is to analyse the market share and understand the distribution channel relationship with reference to SAMSUNG ELECTRONICS INDIA PVT LTD.

# SECONDARY OBJECTIVES
To find out the counter share of SAMSUNG LCD TVs.
To find out the counter size of the dealer as well as the different brands kept by different dealers.
To record who are the major players of LCD TVs.
To find out the largest selling model among all the segments.
To know whether the dealer is aware of current pricelist.
To find out whether the dealer is having brochure of the product.
To know the benefits a dealer wants so that he is satisfied by selling the products.

# PRIMARY OBJECTIVES
The primary objective of the study is to analyse the market share and understand the distribution channel relationship with reference to SAMSUNG ELECTRONICS INDIA PVT LTD.

# SECONDARY OBJECTIVES
To find out the counter share of SAMSUNG LCD TVs.
To find out the counter size of the dealer as well as the different brands kept by different dealers.
To record who are the major players of LCD TVs.
To find out the largest selling model among all the segments.
To know whether the dealer is aware of current pricelist.
To find out whether the dealer is having brochure of the product.
To know the benefits a dealer wants so that he is satisfied by selling the products.

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SAMSUNG LCD TELEVISION - DISTRIBUTION CHANNEL RELATIONSHIP AND MARKET SHARE ANALYSIS

  1. 1. A MAJOR PROJECT REPORT ON SAMSUNG LCD TELEVISION - DISTRIBUTION CHANNEL RELATIONSHIP AND MARKET SHARE ANALYSIS Submitted To:- Submitted By:- Dr. Suneyna Prabhjot Singh Asst. Professor BBA (General) 2nd Shift Business Administration Dept. 0262121708 2008-2011 In partial fulfillment of the Requirements for the award of Degree of Bachelor of Business Administration Maharaja Surajmal Institute Affiliated To:- Guru Gobind Singh Indraprastha University
  2. 2. CERTIFICATION This is to certify that Mr. Prabhjot Singh has completed his project report, entitled‘Samsung LCD Television - Distribution Channel Relationship and Market Share Analysis’ as a part of partial fulfillment of Bachelor of Business Administration(General) programme from ‘Maharaja Surajmal Institute’, affiliated to ‘Guru Gobind Singh Indraprastha University’, under my guidance and his work is original. Dr. Suneyna Project Guide ii
  3. 3. ACKNOWLEDGEMENT The present work is an effort to throw some light on ‘Samsung LCD Television - Distribution Channel Relationship and Market Share Analysis’. The work would not have been possible to come to the present shape without the able guidance, supervision and help to me by number of people. With deep sense of gratitude I acknowledge the encouragement and guidance received by my mentor and guide, Dr. Suneyna, and other staff members. I also thank her for the ideas and basic concepts she delivered and shared with me, as they helped me a lot in accomplishing this project of mine. I convey my heart full affection to my Parents, who helped and supported me during the course, for completion of my Major Project Report. Prabhjot Singh Enrollment No.: 0262121708 iii
  4. 4. TABLE OF CONTENTS 1) INTRODUCTION 1-4 1.1) Objectives of the Study 2 1.2) Research Methodology 3 1.3) Limitations of the Study 4 2) PROFILE OF THE ORGANISATION 5-30 2.1) Samsung – An Overview 6 2.2) Indian Consumer Electronics Industry 19 2.3) Theoretical Background of the Study 23 3) ANALYSIS AND INTERPRETATION OF DATA 31-38 4) CONCLUSIONS AND RECOMMENDATIONS 39-42 5) BIBLIOGRAPHY 43-44 6) ANNEXURE 45-48 iv
  5. 5. CHAPTER 1 INTRODUCTION
  6. 6. OBJECTIVES OF THE STUDY  PRIMARY OBJECTIVES The primary objective of the study is to analyse the market share and understand the distribution channel relationship with reference to SAMSUNG ELECTRONICS INDIA PVT LTD.  SECONDARY OBJECTIVES To find out the counter share of SAMSUNG LCD TVs. To find out the counter size of the dealer as well as the different brands kept by different dealers. To record who are the major players of LCD TVs. To find out the largest selling model among all the segments. To know whether the dealer is aware of current pricelist. To find out whether the dealer is having brochure of the product. To know the benefits a dealer wants so that he is satisfied by selling the products. 2
  7. 7. RESEARCH METHODOLOGY The essential part of any report is research methodology. The field study was conducted to analyze the market share and understand the distribution channel relationship. SAMPLE SIZE The sample size is 35. COLLECTION OF DATA Data used of this report is mainly primary data, which are collected first hand by survey in the field. In some area secondary data may also be taken into consideration. COLLECTION OF PRIMARY DATA The data was collected through the primary source by survey method using structured questionnaire and taking respondent‘s personal interview. COLLECTION OF SECONDARY DATA The data collected from text books, journals and internet. 3
  8. 8. LIMITATIONS OF THE STUDY Research made was limited to the territory of Delhi region. During the dealer study, some of the dealers did not give the exact information about number of products sold by them in a month. The market size of SAMSUNG LCD TVs achieved is exclusive of B2C market. This study does not take into account the market in Kolkata as whole, but only 50 dealers. Study was conducted with dealers selling mostly Samsung products, with most of them selling LG, SONY etc. products in lower quantities. Therefore, this might skew the results a bit. The period of the project was not sufficient to study all the factors in deep. Many consumer and dealers/retailers showed less interest in providing information and haven‘t cooperated. 4
  9. 9. CHAPTER 2 PROFILE OF THE ORGANISATION
  10. 10. SAMSUNG – AN OVERVIEW The Samsung Group is a multinational conglomerate corporation headquartered in Samsung Town, Seoul, South Korea. It is South Korea's largest chaebol and is the world's largest private conglomerate by revenue with the annual revenue of US $172.5 billion in 2009. The meaning of the Korean word Samsung means "tristar" or "three stars". The word "three" represents something "big, numerous and powerful"; the "stars" mean eternity. The Samsung Group comprises numerous international affiliated businesses, most of them united under the Samsung brand including Samsung Electronics, the world's largest technology company by sales; Samsung Heavy Industries, the world's second largest shipbuilder. Samsung Group accounts for more than 20% of South Korea's total exports.In many domestic industries, Samsung Group is the sole monopoly dominating a single market; its revenue as large as some countries' total GDP. Many businesses today use Samsung's international success as a role model. HISTORY In 1938, Lee Byung-chull founded Samsung, a small trading company with forty employees located in Su-dong (now Ingyo-dong). It dealt in groceries produced in and around the city and produced noodles itself. The company prospered and Lee moved its head office to Seoul in 1947. He started a sugar refinery in Busan as a name of Cheil Jedang. After the war, in 1954, Lee founded Cheil Mojik and built the plant in Chimsan-dong, Daegu. It was the largest woolen mill ever in the country and the company took on an aspect of a major company. 6
  11. 11. Samsung diversified into many areas and Lee sought to establish Samsung as an industry leader in a wide range of enterprises, moving into businesses such as insurance, securities, and retail. Lee placed great importance on industrialization, and focused his economic development strategy on a handful of large domestic conglomerates, protecting them from competition and assisting them financially. In the late 1960s, Samsung Group began the electronics industry. It formed several electronics-related divisions, such as Samsung Electronics Devices Co., Samsung Electro- Mechanics Co., Samsung Corning Co., and Samsung Semiconductor & Telecommunications Co., and made the facility in Suwon. Its first product was a black-and-white television set. In 1980, the company acquired Hanguk Jeonja Tongsinin Gumi, and started to build telecommunication devices. The company grouped them together under Samsung Electronics Co., Ltd. in the 1980s. In the late 1980s and early 1990s, Samsung Electronics invested heavily in research and development, investments that were pivotal in pushing the company to the forefront of the global electronics industry. Samsung started to rise as an international corporation in the 1990s. In 1993, Lee Kun-hee sold off ten of Samsung Group's subsidiaries, downsized the company, and merged other operations to concentrate on three industries: electronics, engineering, and chemicals.Samsung manufactured a range of aircraft from the 1980s to 1990s. The company was founded in 1999 as Korea Aerospace Industries (KAI), the result of merger between then three domestic major aerospace divisions of Samsung Aerospace, Daewoo Heavy Industries, and Hyundai Space and Aircraft Company. Samsung became the largest producer of memory chips in the world in 1992, and is the world's second-largest chipmaker after Intel. In 1995, it built its first liquid-crystal display screen. Ten years later, Samsung grew to be the world's largest manufacturer of liquid-crystal display panels.Samsung Electronics overtook Sony as one of the world's most popular consumer electronics brands in 2004 and 2005, and is now ranked #19 in the world overall. Behind Nokia, Samsung is the world's second largest by volume producer of cell phones with a leading market share in the North America and Western Europe. 7
  12. 12. ABOUT SAMSUNG ELECTRONICS Founded in 1969 in Suwon, Gyeonggi-do, Korea, Samsung Electronics Co., Ltd. manufactures and sells a wide variety of electronic products, communication devices, and semiconductors. In January 2009, we restructured our organizational structure to better reflect the respective characteristics of each business sector and the common technology, market and customer base denominators within its businesses, thereby creating synergies. The previous six division-based system was separated into a Digital Media & Communications (DMC) business unit and a Device Solution (DS) business unit. Source: Samsung Electronics Sustainability Report 2009 Figure: Global Network of Samsung Electronics 8
  13. 13. Today, its global presence includes a total of 111 subsidiaries in the form of production subsidiaries, sales subsidiaries, distribution subsidiaries, research laboratories and eight overseas business divisions representing North America, Europe, China, Southeast Asia, Southwest Asia, Central and South America, CIS, the Middle East and Africa. VISION As stated in its new motto, Samsung Electronics' vision for the new decade is, "Inspire the World, Create the Future." This new vision reflects Samsung Electronics‘ commitment to inspiring its communities by leveraging Samsung's three key strengths: ―New Technology,‖ ―Innovative Products,‖ and ―Creative Solutions.‖ -- and to promoting new value for Samsung's core networks -- Industry, Partners, and Employees. Through these efforts, Samsung hopes to contribute to a better world and a richer experience for all. As part of this vision, Samsung has mapped out a specific plan of reaching $400 billion in revenue and becoming one of the world‘s top five brands by 2020. To this end, Samsung has also established three strategic approaches in its management: ―Creativity,‖ ―Partnership,‖ and ―Talent.‖ 9
  14. 14. Samsung is excited about the future. As we build on our previous accomplishments, we look forward to exploring new territories, including health, medicine, and biotechnology. Samsung is committed to being a creative leader in new markets and becoming a truly No. 1 business going forward. ORGANISATION STRUCTURE 10
  15. 15. BRANDING STRATEGY OF SAMSUNG It does not require the genius of a rocket scientist to recognize that branding is the lifeblood of any corporation. This was well recognized by Samsung Electronics Corporation (Samsung), way back in 1998, when the South Korea‘s leading consumer electronics giant entered into an agreement with the International Olympic Association (IOA) to sponsor the 1998 Seoul Olympics. The message was clear. Samsung wanted to sponsor Olympics to establish itself as a global brand. And it became successful to a great extent too. Samsung‘s association with the Olympics helped the company increase its brand visibility and brand recall among its consumers worldwide. In the late 1990s, Samsung forged several marketing alliances with companies worldwide and sponsored events to enhance its brand awareness. Due to its marketing efforts, its brand value appreciated by more than 200 per cent from US$5.2 billion in 2001 to its current $10.8 billion. The company was ranked twenty-fifth in Interbrands list of the world‘s top 100 brands. In 2002, Samsung emerged as the only non-Japanese brand from Asia to be listed in the global top 100 brands valued by Interbrand, the worlds leading brand consultant. The company was ranked as the fastest-growing brand in the world by Interbrand. In late 2008, Samsung emerged as the number one player in the US cell phone market by snatching the crown from Motorola. It also emerged as the world leader in the memory chip market. In 2007, Samsung spent more on R&D than IBM. The company has jumped to the second place in the number of patents granted by Americas patent office (just behind IBM). As a result of its commitment to innovation and unique design, SEA was ranked #6 in the electronics industry segment in the Fortune magazines ―Most Admired Companies 2008‖, and named as one of Fast Company‘s ―Fast 50 Most Innovative Companies of 2008‖. Among popular Business Week rankings, SEC ranked #26 in the publications ―Most Innovative Companies of 2008‖ and #21 in the ―100 Best Global Brands‖ for 2007. SEC is also a top patent holder, ranking second overall in the U.S. in 2007. 11
  16. 16. According to industry experts, the reason for these earnings over the years is Samsungs holistic approach to develop several strategies for different regions, but guided by one unified Samsung brand image building strategy. Samsungs branding strategy was launched by its Chairman Kun Lee in 1996. It was a coordinated global programme to make Samsung an international brand. Over the last one decade, Samsung has executed its comprehensive brand building strategy. The company‘s annual investment in branding and marketing is about US$3 billion, which has been spent to increase its brand awareness around the world. For any new company, when it makes its entry into the market, there are two ways to stimulate growth: intensive advertising campaign, and product offerings with unique functions. Samsung recognized the potential of both. ―In terms of products, Samsung introduced its leading-technology display products as well as printers in the Indian market and carried out SI meets all over the country to educate the channel community on its newproducts,‖ saysRanjitSingh Yadav, Director; IT, Samsung India. However, the power of brand building exercise was not lost on the company. In fact, Samsung tilted more towards advertising and brand-making strategy; creating awareness of its name by investing large amounts of money in million-dollar brand- making campaigns. In India, Samsung, in order to create its brand awareness, signed seven cricket celebrities and in doing this it aimed to cash in on the popularity of cricket in India which is considered a religion in India. Instead of just ads featuring cricketers, Samsung launched its ―Team Samsung India‖ campaign all over India. The focus of this concept was to create patriotism through cricketers, but under the Samsung brand name the banner reads ―With Team Samsung‖. The campaign was a huge success and it enabled Samsung to increase awareness of its brand. As a result, it began to make impressive growth in India. 12
  17. 17. ―In the year 2008, Samsung supported the Olympics cause in India by way of sponsorship of the Indian team, the support for select members of the Indian team. The company also organized the biggest-ever national level school quiz on Olympics for school children. Consequently, its Olympic-related advertising campaign brought the companys brand closer to customers. It has been noted that older companies often portray their products as commodities and generally sell their products only on the basis of brand without enhancing their quality and lowering their price. However, Samsung has proved to be an exception to this. The company not only invested hugely in brand creation campaigns, it also remained a cut above the rest by introducing innovation. In order to create a somewhat different image, Samsung has positioned itself by developing innovative products, thus becoming a leader rather than a follower. TheSuccessSecret being ahead of the competition is the mantra of Samsungs success. In business, it always pays to reduce the lead-time, as being late in business means business is over, which happened in the case of many big brands and competitors. However, part of this success was also Samsungs openness. The company opened up and recruited employees from a global pool of talent bringing in talent from various countries, making these people work together at one table designing the best product. This trend boosted the company‘s perception and made it a global brand among the consumers. The strategy paid off and in the past five years, it has achieved the biggest gain among major brands, even surpassing Sony. Finally, successful branding is all about establishing a long-term vision and crafting the company‘s operations to meet that objective‘s. In 1993, as a first step in its globalization drive, Samsung acquired a new corporate identity. The company changed its logo and that of the group. In the new logo, the words ―Samsung Electronics‖ were written in white colour on a blue colour background to represent stability, reliability and warmth. 13
  18. 18. It was this sort of huge investment where millions saw the Samsung‘s message. Their brand remained in the forefront of millions of people giving them an edge over its competitors. It is no surprise that Samsung‘s brand building strategy overtook its competitors in less than the expected time. SAMSUNG IN INDIA Samsung India is the hub for Samsung's South West Asia Regional operations. The South West Asia Headquarters, under the leadership of Mr. J S Shin, President & CEO, looks after the Samsung business in Nepal, Sri Lanka, Bangladesh, Maldives and Bhutan besides India. Samsung India which commenced its operations in India in December 1995 enjoys a sales turnover of over US$ 1Bn in just a decade of operations in the country. Headquartered in New Delhi, Samsung India has widespread network of sales offices all over the country. The Samsung manufacturing complex housing manufacturing facilities for Colour Televisions, Mobile phones, Refrigerators and Washing Machines is located at Noida, near Delhi. Samsung 'Made in India' products like Colour Televisions, Mobile phones and Refrigerators are being exported to Middle East, CIS and SAARC countries from its Noida manufacturing complex. In November 2007, Samsung commenced the manufacture of Colour televisions and LCD televisions at its state–of-the-art manufacturing facility at Sriperumbudur, Tamil Nadu. The Company is also manufacturing fully automatic front loading washing machines at its Sriperumbudur facility. Samsung‘s state of the art, highly automated manufacturing facilities are located at the Company‘s sprawling Complex at Noida and its recently inaugurated Sriperumbudur facility, near Chennai. Samsung India‘s Noida CTV Plant enjoys the Number 1 position amongst all Samsung subsidiaries in terms of its Colour television productivity and has been ranked as the subsidiary with the ‗Best Quality System‘. 14
  19. 19. The highly advanced Chennai Facility that has been inaugurated in November 2007 will help the Company respond better and faster to the growing demand for its products in the Southern part of the country. The Samsung manufacturing facility at Sriperumbudur is the Company's second manufacturing complex in the country. Samsung India is working with and contributing to the development of the domestic component industry in the country. The Company is working with its partners to improve their product quality and processes. Thus, Samsung vendors are sent to different Samsung subsidiaries to meet the Samsung overseas vendors in order to benchmark their own processes. Samsung is also training its vendors on eco-partnership so that the components manufactured by them are ‗eco friendly‘ as per ROHS norms. Samsung products manufactured in India currently enjoy an average localisation level of over 50%.From being a virtually unknown entity in the Year 1995, brand Samsung today enjoys an awareness level of over 65% and a positive opinion of over 80% in the country today (source: BAS 2007). The introduction of World First, Wow, leading technology products in the Indian market coupled with the Company‘s efforts to customise products for the Indian consumers, have contributed to the success of the brand in the Indian market. Technology Leadership, Product design and innovative marketing have all contributed to making Samsung a household name in the Indian market. The Company has carried out over 170 Dream Home Road Shows - a four day exhibition of its new products and technologies - in the metros and smaller markets to create consumer awareness. To display Samsung products in a more lifestyle ambience and to communicate the product benefits in a more interactive manner, Samsung India has set up a widespread network of Samsung Digital Plazas all over the country. 15
  20. 20. The Samsung Brand shop network complements the over 8500 retail points for Samsung products located across the length and breadth of the country. Samsung plans to continue enhancing its penetration levels in the country to reach out to more and more Indian consumers. AWARDS During its tenure of 12 years in the country, Samsung India has won several Product Awards and recognitions across its Audio Video, Home Appliance, IT and Telecom Product categories. The Corporate Recognitions received by the Company in the recent past include:- 'Electronics Organisation of the Year' by EFY Magazine at its 'Readers' Choice Awards' February, 2007 Electronics Company of the Year - in 2006 by Consumer Electronics & TV Manufacturers Association No.1 Channel Favourite Company - in 2006 by Var India Most preferred TV partner in Hospitality Industry by Hospitality India 2006 Best Retailer for the Year 2005 by India Retail Forum Most Trusted Company Award 2005 by Var India ELCINA (Electronics Industries Association of India) Awards for 'Excellence in Electronics' instituted by the IT department of the Government of India. Samsung India received the 1st Prize in the Consumer Electronics category for productivity, exports, R&D and quality assurance in 2002 Golden Peacock Special commendation Certificate for Corporate Social Responsibility (Private Sector) for the year 2004 'Special Award' by Electronic Industries Association of India for 'significant contribution to the development and growth of India's Electronics Hardware and IT industry.' in 2004 16
  21. 21. PRODUCT PORTFOLIO Touch Phone Television Digital Camera Refrigerator Notebook Style Phone Blue-ray Digital Camcorder Air Conditioner Monitor Multimedia DVD Player Washing Machine Optical Disk Phone Drive Business Phone Home Theatre Microwave Oven External HDD Guru Series Multimedia Player Smart Oven Laser Printer/ Multifunction Dual SimPhone CDMA Phone Mobile Phone Accessories 17
  22. 22. DEPTH OF THE LCD TELEVISION SEGMENT Samsung TVs offer world-class picture quality, design and energy efficiency. Samsung India has divided the LCD TVs in different series according to the features. Here there is a brief review of segmentation of LCD TVs. 18
  23. 23. INDIAN CONSUMER ELECTRONICS INDUSTRY The consumer electronics industry has been witnessing a phenomenal growth globallyover the past few years. This growth can be attributed to the revolutionarytechnological developments taking place in the consumer electronics industry. Therevolution brought by the digital technology has enabled the consumer electronicssector to profit from the growing interaction of digital applications, such ascamcorders, DVD player/recorder, still camera, computer monitor, LCD TV, etc. According to Consumer Electronics Market Forecast report, the global consumerelectronics market is forecasted to grow at a CAGR of around 5% during 2009- 2012.Also, during the same period, the global consumer electronics shipment will grow at aCAGR of around 5%.Various factors driving the future growth. On the regional front,we found that the American region, mainly US, is driving the global consumerelectronics industry, closely followed by Europe. In future, Asia Pacific region willconstitute the major portion of the consumer electronics industry, mainly due to theincrease in demand from the developed countries in the region. Also, the Americanregion along with the European region will see a decline in their market shares becausethe markets there have attained saturation and only the advent of new technology willboost the demand. India‘s consumer electronics devices market, defined as the addressable market forcomputing devices, mobile handsets and AV products, is projected at aroundUS$28.6bn in 2010. This is expected to increase to US$45.7bn by 2014, driven byrising incomes and growing affordability. Growth in some product categories dipped in2009, but the market recovered strongly during the festive sales season that ran untilDiwali, with many retailers reporting 20-40% growth. Spending on consumerelectronics devices is projected to grow at an overall CAGR of 12% through 2014,with the key segments including touch-screen mobiles, for LCD TV sets, set-top boxesand notebook computers. Much of the growth will be driven by growing demand fromIndia‘s rural population. 19
  24. 24. DISPLAY AS A GROWTH DRIVER India's domestic video device market is expected to grow at a CAGR of 22% between 2009-2013, to a value of US$15.2bn in that year. Television will remain the core product in this category, with sports events such as the India Premier League cricket and the 2010 Commonwealth Games in Delhi helping to drive demand for TV set upgrades. Source:Display Search India Figure: Contribution of video and audio in Consumer Electronics market Indian market typically exhibits contradiction that there may be a unique to this market. For instants CRT TVs are obsolete across the world; but they continue to be sold in rural India. At the same time there is a growing demand for LCD TVs in India. In this way video continues to drive growth in India‘s consumer electronics industry. The display industry in India promises huge potential in the years to come. The double digit compound annual growth over the next five years will be aided by various factors. 20
  25. 25. EMERGING LCD TV MARKET India market and predicts that by 2012, LCD TV shipments will surpass those ofCRT TVs in India. India has the second largest population in the world and an annualGDP growth rate of more than 8% from 2002 to 2012. CRT TV accounts for 92.9% ofthose units in2008,followed by LCD TV with 6.6% and PDP TV with 0.5%. Source:Display Search India Figure: Indian emerging LCD TV market 21
  26. 26. However, Indian LCD TV market is just at the beginning of a real growth curve, withY/Y growth of more than 100% expected for each of the next five years. Growth willbe driven by enhanced purchasing power, the digital broadcast (DTH, IPTV, STBcable) transition as well as consumer awareness and affordability of LCD TVs. India‘sgrowing upper middle class is projected to be the greatest source of LCD TVpurchasing power. Meanwhile, major brands like Samsung, LG, Sony and Philips andIndian local brands like Videocon and Onida are all focusing promotional effortsaround LCD TV. Several Chinese brands are also targeting India with their firstexports. Among the imports of LCD TV into India, approximately 25% were importedin as CBU (Complete Built Unit) and 75% were imported as SKD (Semi-KnockDown) or CKD (Complete Knock Down). Thailand has a special FTA (Free TradeAgreement) with India on duty benefits. Therefore, companies like Sony andPanasonic are making LCD TVs in Thailand and then shipping them to India. Thegrowing LCD TV market in India has encouraged Indian company Videocon group toset up a TFT LCD panel manufacturing lab. 22
  27. 27. THEORETICAL BACKGROUND OF THE STUDY Marketing involves satisfying consumer‘s needs and wants. The task of any businessis to deliver customer value at a profit. The American Marketing Association offers thefollowing formal definition: Marketing is an organizational function and a set ofprocesses for creating, communicating, and delivering value to customers and formanaging customer relationships in ways that benefit the organization and its stakeholders. 21 Customer Core Collaborative Focus Competencies Network Value Cognitive Competency Resource Exploration Space Space Space Value Customer Business Business Creation Benefits Domain Partners Customer Internal Business Value Relationship Resource Partner Delivery Management Management Management Figure: Holistic Marketing Framework According to this view, holistic marketers succeed by managing a superior value chainthat delivers a high level of product quality, service, and speed. Holistic marketersachieve profitable growth by expanding customer share, building customer loyalty, andcapturing customer lifetime value. 23
  28. 28. A holistic marketing framework shows how the interaction between relevant actors(customers, company, and collaborators) and value-based activities (value exploration,valuecreation, and value delivery) helps to create, maintain, and renew customervalue. THE ROLE OF MARKETING CHANNELS Successful value creation needs successful value delivery. Holistic marketers areincreasingly taking a value network view of their businesses. The marketing channelperforms the work of moving goods from producers to consumers. Intermediariesnormally achieve superior efficiency in making goods widely available and accessibleto target markets. Through their contacts, experience, specialization, and scale ofoperation, intermediaries usually offer the firm more than it can achieve on its own.These are the various roles performed by the channel partners: Gather information about potential and current customers, competitors, and other actors and forces in the marketing environment. Develop and disseminate persuasive communications to stimulate purchasing. Reach agreements on price and other terms so that transfer of ownership or possession can be affected. Place orders with manufacturers. Acquire the funds to finance inventories at different levels in the marketing channel. Assume risks connected with carrying out channel work. Provide for the successive storage and movement of physical products. Provide for buyers' payment of their bills through banks and other financial institutions. Oversee actual transfer of ownership from one organization or person to another. All channel functions have three things in common: They use up scarce resources; theycan often be performed better through specialization; and they can be shifted amongchannel members. When the manufacturer shifts some functions to intermediaries, theproducer's costs and prices are lower, but the intermediary must add a charge to coverits 24
  29. 29. work. If the intermediaries are more efficient than the manufacturer, prices toconsumers should be lower. If consumers perform some functions themselves, theyshould enjoy even lower prices. CHANNEL MANAGEMENT DECISIONS After a company has chosen a channel alternative, individual intermediariesmust be selected, trained, motivated, and evaluated. Channel arrangements must bemodified over time.  SELECTING CHANNEL MEMBERS Companies need to select their channel members carefully. To customers, the channelsare the company. Consider the negative impression customers would get of if one ormore of their outlets or dealers consistently appeared dirty, inefficient, or unpleasant.To facilitate channel member selection, producers should determine whatcharacteristics distinguish the better intermediaries. They should evaluate the numberof years in business, other lines carried, growth and profit record, financial strength,cooperativeness, and service reputation. If the intermediaries are sales agents,producers should evaluate the number and character of other lines carried and the sizeand quality of the sales force. If the intermediaries are department stores that wantexclusive distribution, the producer should evaluate locations, future growth potential,and type of clientele.  TRAINING CHANNEL MEMBERS Companies need to plan and implement careful training programs for theirintermediaries. The company must constantly communicate its view that theintermediaries are partners in a joint effort to satisfy end users of the product.Coercive and reward power are objectively observable; legitimate, expert, and referentpower are more subjective and dependent on the ability and willingness of parties torecognize them. 24 25
  30. 30.  MOTIVATING CHANNEL MEMBERS A company needs to view its intermediaries in the same way it views its end users. Itneeds to determine intermediaries' needs and construct a channel positioning such thatits channel offering is tailored to provide superior value to these intermediaries.Beingable to stimulate channel members to top performance starts with understanding theirneeds and wants. The company should provide training programs, market researchprograms, and other capability-building programs to improve intermediaries‘performance.  EVALUATING CHANNEL MEMBERS Producers must periodically evaluate intermediaries' performance against suchstandards as sales-quota attainment, average inventory levels, customer delivery time,treatment of damaged and lost goods, and cooperation in promotional and trainingprograms. A producer will occasionally discover that it is paying too much toparticular intermediaries for what they are actually doing. Producers should set upfunctional discounts in which they pay specified amounts for the trade channel'sperformance of each agreed-upon service. Underperformers need to be counseled,retrained, motivated, or terminated.  MODIFYING CHANNEL ARRANGEMENTS A producer must periodically review and modify its channel arrangements.Modification becomes necessary when the distribution channel is not working asplanned, consumer buying patterns change, the market expands, new competitionarises, innovative distribution channels emerge, and the product moves into later stagesin the product life cycle. LEVELS OF MARKETING SEGMENTATIONS ANDTARGETS 26
  31. 31. Markets are not homogeneous. A company cannot connect with all customers inlarge, broad, or diverse .markets. Consumers vary on many dimensions and often canbe grouped according to one or more characteristics.  SEGMENTATION MARKETING The starting point for discussing segmentation is mass marketing. In mass marketing,the seller engages in the mass production, mass distribution, and mass promotion ofone product for all buyers. The argument for mass marketing is that it creates thelargest potential market, which leads to the lowest costs, which in turn can lead tolower prices or higher margins. However, many critics point to the increasingsplintering of the market, which makes mass marketing more difficult. Theproliferation of advertising media and distribution channels is making it difficult andincreasingly expensive to reach a mass audience. Some claim that mass marketing isdying. Most companies are turning to micromarketing at one of four levels: segments,niches, local areas, and individuals.  TARGET MARKETING Once the firm has identified its market-segment opportunities, it has to decide howmany and which ones to target. Marketers are increasingly combining several variablesin an effort to identify smaller, better-defined target groups. Effective target marketingrequires that marketers: Identify and profile distinct groups of buyers who differ in their needs and preferences (market segmentation). Select one or more market segments to enter (market targeting). For each target segment, establish and communicate the distinctive benefits) ofthe company's market offering (market positioning). COMPETITIVE STRATEGIES FOR MARKET LEADERS The leader might spend conservatively whereas a challenger spends liberally.The leader might misjudge its competition and find itself left behind. The dominantfirm might look old-fashioned against new and peppier rivals. The dominant firm'scosts might rise 27
  32. 32. excessively and hurt its profits, or a discount competitor can undercutprices. Leaders can respond to an aggressive competitor in three ways first, the firmmust find ways to expand total market demand. Second, the firm must protect itscurrent market share through good defensive and offensive actions. Third, the firm cantry to increase its market share, even if market size remains constant.  EXPANDING THE TOTAL MARKET The dominant firm normally gains the most when the total market expands. Themarket leader should look for new customers or more usage from existing customers.Every product class has the potential of attracting buyers who are unaware of theproduct or who are resisting it because of price or lack of certain features. A companycan search for new users among three groups: those who might use it but do not(market-penetration strategy), those who have never used it (new-market segmentstrategy) or those who live elsewhere (geographical-expansion strategy). Usage can beincreased by increasing the level or quantity of consumption or increasing thefrequency of consumption. 27  DEFINING MARKET SHARE While trying to expand total market size, the dominant firm must continuously defendits current business. The leader leads the industry in developing new product andcustomer services, distribution effectiveness, and cost cutting. It keeps increasing itscompetitive strength and value to customers.  EXPANDING MARKET SHARE Market leaders can improve their profitability by increasing their market share. Gaining increased share in the served market, however, does not automatically producehigher profits—especially for labor-intensive service companies that may notexperience many economies of scale. Much depends on the company's strategy.Because the cost of buying higher market share may far exceed its revenue value, acompany should consider four factors before pursuing increased market share: Thepossibility of provoking antitrust action, 28
  33. 33. economic cost, pursuing the wrongmarketing-mix strategy, the effect of increased market share on actual and perceivedquality. DISTRIBUTION CHANNEL OF SAMSUNG Company's Manufacturing Units (Noida and Chennai) C&F Agents (One in each state) Franchised Distributor Big Retailers Retail Chains Outlets Small Digital Plazas Digital Homes Digital Worlds Dealers/Retailers Figure: Samsung’s Distribution Channel Samsung has two manufacturing units one each in Noida and Chennai. A national distributor takes care of the logistics associated with distributing the goods across the country. A Carrying & Forwarding(C&F) Agent is present in each of the main states. The C&F agent takes care of storing and transporting the goods onwards to dealers and distributors. While warehouses for storing the products are provided by the C&F agent the goods are still owned by the company. In big cities like Delhi the goods are shipped directly from the C&F agents to the dealers. In some cases the smaller dealers may be supplied by some of the larger dealers. For big retailers like e-zone and Next the goods may be shipped from the C&F agents‘ warehouse to a warehouse owned by the retail chain. In both the cases once the goods are transferred to the dealers the ownership is taken over by them. The transactions are on cash basis and no goods are given on credit. In case of large retail chains 29
  34. 34. the purchasing decisions are taken at a national level and happen directly between the company ant the head office of the retailer. CONSUMER ELECTRONICS DISTRIBUTION Diagram shows the distribution networks in general for a consumer durables company. It has its own branch network acting as first level of distribution, which handles storage and distribution of goods. The next level is direct dealers whom the company‘s representatives visit regularly. These direct dealers help to disperse the goods to next level where company cannot serve directly. The second diagram is where company has wholly owned wholesale buyers who have branches countrywide for sales and after sales service. The company sells to wholesale buyers which in turn supply to authorised dealers across the country. Branch Office/ Wholesaler Godown Godown of Direct Dealers Wholesaler Only Sales, Sub Authorised Dealer Dealers Figure: Distribution Network 30
  35. 35. 31
  36. 36. CHAPTER 3 ANALYSIS AND INTERPRETATION OF DATA
  37. 37. Q.1) How many different brands are displayed? 60% 54% 50% 38% 40% 36% 36% 20" and less 32% 21" to 29" 28% 30% 25% 30" to 37" 20% 21% 18% 38" to 46" 20% 15% 14% 47" and above 12% 11% 10% 8% 10% 7% 6% 5% 4% 0% Samsung LG Sony Others INTERPRETATION: From the above chart, it is observed that of the total counter share 20% counter of Samsung, 21% counter LG, 10% counter SONY and 18% counter others arehaving in 20‖ and less LCD TV display share. Whereas, of the total counter share 54% counter of Samsung, 36% counter LG, 28% counter SONY and 38% counter others arehaving in 21‖ to 29‖ LCD TV display share. In the total counter share 14% counter of Samsung, 25% counter LG, 36% counter SONY and 32% counter others arehaving 30‖ to 37‖ LCD TV display share. In the total counter share 7% counter of Samsung, 6% counter LG, 11% counter SONY and 8% counter others arehaving 38‖ to 46‖ LCD TV display share. In the total counter share 5% counter of Samsung, 12% counter LG, 15% counter SONY and 4% counter others arehaving 47‖ and above LCD TV display share. 32
  38. 38. Q.2) Does customer have prior knowledge/information about particular brands of LCD? Awareness 37% Yes 63% No INTERPRETATION: This chart shows the awareness of the customers towards the product. From the above chart, it is observed that 63% of the respondents agree that people are aware of the product prior to their approaching the dealer, and only 37% says that people are less or not aware of the product. Q.3) When customers mostly visit showroom for buying LCD? Samsung 37% 40% 35% 26% 28% 30% 25% 20% 9% Samsung 15% 10% 5% 0% During During Gift During Discount Others Exchange Offers Option Offers Offers INTERPRETATION: From the above chart, it is observed that 37% of the respondents agree that most of the people visit the showroom during discount offers, 28% goes with gift option offers, 26% goes with exchange offers, and only 9% goes with other offers. 33
  39. 39. Q.4) What are the parameters on which consumer makes his purchase decision? Parameter 16% 24% Price Brand Name Design 27% Features Quality 21% 12% INTERPRETATION: From the above chart, it is observed that 24% of the respondents agree that people choose their LCD television on the basis of price, 21% goes with brand name, 12% goes with design, 27% with features and remaining 16% goes with quality. Q.5) To what extents, following brands of LCD are preferred by customers? Preference 1st 2nd 3rd Preference 4th Samsung LG Sony Others INTERPRETATION: The above chart shows the preference among customers towards different brand of LCD television. From the above chart, it is observed that customers preferred LG at first position, followed by Samsung, Sony and then other brands. 34
  40. 40. Q.6) Which is the largest selling model? Model Share 40% 36% 32% 30% 18% 20% 10% 7% Samsung 7% 0% 20" and 21" to 29" less 30" to 37" 38" to 46" 47" and above INTERPRETATION: From the above chart, it is observed that 18% of the counter share of Samsung LCD Television is 20‖ and less. 36% is between 21‖ to 29‖, 32% isbetween 30‖ to 37‖, 7% is between 38‖ to 46‖ and 7% is 47‖ and above. Q.7) Where does the dealer used to get the product? Source 14% Distributor 9% Wholesaler Other sources 17% 60% All of them INTERPRETATION: From the above chart, it is observed that majority of 60% of the respondents use to get the product only from distributors. Whereas, 17%, 9% and 14% used to get the product from wholesalers, other sources, and all of distributor, wholesaler and other sources respectively. 35
  41. 41. Q.8) Whether the dealer is satisfied with the distributor? Satisfaction with Distributor 68% 70% 60% 50% 29% 40% 30% Satisfaction 20% 3% 0% 10% 0% Highly Satisfied Satisfied Dissatisfied Highly Dissatified INTERPETATION: From the above chart, it isobserved that majority of 68% of respondents are satisfied with their distributor, 29% are highly satisfied, and only 3% is dissatisfied. None is highly dissatisfied. Q.9) How often the distributor‘s sales person visit the counter (in a week)? Visit 3% 33% 27% One time Two times Three times More than three times 37% INTERPRETATION: From the above chart, it is observed that to 33% of the respondents, the distributor visit only one time, two times to 37% of the respondents, three times to 27% of the respondents and more than three times to 3% of the respondents. 36
  42. 42. Q.10) Whether the dealer is satisfied with the service? Satisfaction with Service 70% 80% 70% 60% 50% 40% 27% 30% Satisfaction with Service 20% 3% 0% 10% 0% Good Satisfactory Average Below Avergae INTERPRETATION:From the above chart, it is observed that majority of the respondent 70% rated the service as good, 27% of the respondents rated the service as satisfactory, and only 3% of the responded rated the service as average. Q.11) What can Samsung do to help you to sell more LCD TV rather than any other brand? Strategy 49% 50% 40% 30% 20% 17% Strategy 20% 14% 10% 0% Advertising Branding Display Concert Salesman INTERPRETATION:From the above chart, it is observed that 49% of the total respondents think that branding strategy will attract customers towards Samsung. Whereas, 20% think advertising will help in promoting Samsung, other 14% think of display concert and remaining 17% think that salesman may help Samsung to increase its demand. 37
  43. 43. Q.12) Have you been satisfied with Samsung as a whole, during your experience sellingSamsung products? Satisfaction with Samsung 3% Yes No 97% INTERPRETATION:The above chart shows the satisfaction of the dealer with Samsung in selling the product. From the above chart, it is observed that with the total experience with Samsung 97% of the respondents are satisfied and only 3% is dissatisfied. 38
  44. 44. CHAPTER 4 CONCLUSIONS AND RECOMMENDATIONS
  45. 45. CONCLUSIONS From the study it is concluded that consumer durables play a major role in our day to day life. Consumer durable has become a necessity. Now-a-days one finds it hard to survive without them. Samsung India electronics is one of the leading consumer durable provider and it should also concentrate on the research and development in the country itself so as to fulfill the demands of the local residents in the desired manner.As rapid socio-economic changes sweep across India, the country is witnessing the creation of many new markets and a further expansion of the existing ones. The Indian consumer durables industry has witnessed a considerable change in the past couple of years. Changing lifestyle with access to disposable incomes, easy finance options and a surge in advertising has been instrumental in bringing about a sea change in the consumer behavior pattern. SAMSUNG also need to modify their advertising strategies in order to educate thetarget audience about the product. According to a study conducted by FICCI on the Indianconsumer durables industry, a shift in consumer preferences towards higher-end,technologically advanced branded products has been quite discernable. This shift canbe explained by narrowing differentials between the prices of branded and unbrandedproducts added with the high quality of after sales service provided by the brandedplayers. 40
  46. 46. RECOMMENDATIONS Cataloguesof the LCD television should be available in sufficient stock at dealer showrooms so that the dealers can show various models to the prospective customers and guide them the strategies to convert the enquiries into orders of Samsung LCD television. The design of showroom should be made unique so that if a customer visits a showroom he can feel the similarity and thus giving him a confidence of visiting a good branded showroom. Company should customize the display stands so that LCD television can be easily fixed on the wall. Samsung India Electronics should also target the lower end markets where their sale is very low due to the existence of the local players.Samsung should make the market strategy keeping in mind both the lower-end as well as the premium markets.Samsung should also concentrate on the product category gap between the branded and the local players to win the competition in the long run. Smaller cities are also witnessing great changes. The dealers in smaller cities are not getting the current price list and updates of the product as sales persons are visiting less in these counters.Company should focus on that matter seriously. Company should introduce high cost products to target the high income group by introducingLCD television of 52‖ and morejust like LG and Sony.Branding and promotional activities should be done effectively as it creates a long lasting image in the mind of the customers. 41
  47. 47. As there is a bottle neck competition between Samsung and LG, it is necessary to take major steps to overcome the area of downfall in Samsung. With respect to LG, the companies should more concentrate on R&D rather than wasting their money in various Sales promotional techniques. Most of the people feel that advertisement is not up to the mark i.e. it does not provide clear picture about the product being promoted and its schemes. So, proper measure should be taken to make the advertisement more informative and creative. 42
  48. 48. BIBLIOGRAPHY
  49. 49. BOOKS Philip Kotler & Gary Armstrong; Principles of Marketing Management, Prentice Hall of India, 2001 T.N. Chhabra & S.K Grover; Marketing Management, Dhanpat Rai & Co., 2004 G C Beri, Marketing Research, Tata McGraw Hill, 2006 WEBSITES www.samsung.com www.lg.com www.sony.co.in www.videoconworld.com www.sansui-india.com www.ibef.org www.displaysearch.com www.varindia.com www.ficci.com www.researchandmarkets.com www.google.com en.wikipedia.org 44
  50. 50. ANNEXURE
  51. 51. QUESTIONNAIRE ON SAMSUNG LCD TELEVISON This is a survey on ‘Samsung LCD Television’ by Prabhjot Singh for the partial fulfillment of BACHELOR OF BUSINESS ADMINISTRATION. So kindly give your response to these questions:- Information in the questionnaire will be: Used for academic purposes only Kept strictly confidential Name of the Dealer: __________________ Date: __/__/____ Q.1)How many different brands are displayed? 20‖ and less 21‖ to 29‖ 30‖ to 37‖ 38‖ to 46‖ 47‖ and above Samsung LG Sony Others Q.2)Does customer have prior knowledge/information about particular brands of LCD? Yes No Q.3)When customers mostly visit showroom for buying LCD? During Exchange Offers During Discount Offers During Gift Option Offers Others (Please Specify) __________ 46
  52. 52. Q.4)What are the parameters on which consumer makes his purchase decision? Price Features Brand Name Quality Design Q.5)To what extents, following brands of LCD are preferred by customers? Very High High Low Very Low Samsung LG Sony Others Q.6) Which is the largest selling model? 20‖ and less 21‖ to 29‖ 30‖ to 37‖ 38‖ to 46‖ 47‖ and above Q.7) Where does the dealer used to get the product? Distributor Other Source Wholesaler All of them Q.8)Whether the dealer is satisfied with the distributor? Highly Satisfied Dissatisfied Satisfied Highly Dissatisfied 47
  53. 53. Q.9)How often the distributor‘s sales person visit the counter (in a week)? One time Three times Two times More than 3 times Q.10)Whether the dealer is satisfied with the service? Satisfactory Average Good Below Average Q.11) What can Samsung do to help you to sell more LCD TV rather than any other brand? Advertising Display Concert Branding Salesman Q.12)Have you been satisfied with Samsung as a whole, during your experience sellingSamsung products? Yes No 48

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