Published on

Published in: Education, Business, Technology
  • Be the first to comment

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide


  1. 1. INTRODUCTION 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. India’s consumer market is riding the crest of the country’s economic boom. 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. According to a study conducted by FICCI on the Indian consumer durables industry, a shift in consumer preferences towards higher-end, technologically advanced branded products has been quite discernable. This shift can be explained by narrowing differentials between the prices of branded and unbranded products added with the high quality of after sales service provided by the branded players. The shift has also been triggered by the availability of foreign branded products in India owing to lower import duties coupled with other liberal measures as introduced by the government. SEGMENTATION OF THE CONSUMER DURABLE INDUSTRY The Consumer Durables industry consists of durable goods and appliances for domestic use such as televisions, refrigerators, air conditioners and washing machines. Instruments such as cell phones and kitchen appliances like microwave ovens are also included in this category. The consumer durables industry can be broadly classified into two segments: Consumer Electronics and Consumer Appliances. Consumer Appliances can be further categorized into Brown Goods and White Goods. 1
  2. 2. CONSUMER DURABLES CONSUMER APPLIANCES CONSUMER ELECTRONICS WHITE GOODS BROWN GOODS • MOBILE PHONES • REFRIGERATORS • MIXERS • TELEVISIONS • WASHING • GRINDERS • MP3 PLAYERS MACHINES • MICROWAVE O VENS • DVD PLAYERS • AIR CONDITIONERS • IRON • VCD PLAYERS • SPEAKERS AND • ELECTRIC FANS AUDIO • COOKING RANGE EQUIPMENTS • CHIMNEYS Source: India Brand Equity Foundation report Table: Segmentation of consumer durables INDUSTRY SIZE, GROWTH AND TRENDS The consumer durables market in India was estimated to be around US$ 5 billion in 2007-08. More than 7 million units of consumer durable appliances have been sold in the year 2006-07 with colour televisions (CTV) forming the bulk of the sales with 30 per cent share of volumes. CTV, refrigerators and Air-conditioners together constitute more than 60 per cent of the sales in terms of the number of units sold. THE KEY DRIVERS BEHIND THE GROWTH The sector has been witnessing significant growth in recent years, helped by several drivers such as the emerging retail boom, real estate and housing demand, 2
  3. 3. greater disposable income and an overall increase in the level of affluence of a significant section of the population. The key trends that impact the Indian Consumer Durables Industry today are reflected in the diagram. Source: India Brand Equity Foundation report Fig: The key drivers of consumer durable industry TITLE OF THE TOPIC “A STUDY ON DISTRIBUTION CHANNEL RELATIONSHIP AND MARKET SHARE ANALYSIS OF SAMSUNG LCD IN THE TERRITORY OF KOLKATA”, WITH SPECIAL REFERENCE TO SAMSUNG INDIA ELECTRONICS PVT. LTD. 3
  4. 4. NEED FOR THE STUDY The basic idea of taking up this study is to analyze the market share of SAMSUNG LCD TVs in Kolkata sub-dealer market. At the same time, an attempt was made to understand the distribution channel relationship and the problem faced by the dealers. OBJECTIVE OF THE STUDY PRIMARY OBJECTIVES The primary objective of the study is to analyze 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 which is 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 what benefits a dealer wants so that he is satisfied in selling the products. 4
  5. 5. 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 50. SAMPLE SELECTION The sample was selected through the simple random technique with a sample of 50 questionnaires. 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. 5
  6. 6. SANSUNG- AN OVERVIEW The Samsung Group is a multinational conglomerate corporation headquartered in Samsung Town, Seoul, South Korea. It is the world's largest conglomerate by revenue with annual revenue of US$173.4 billion in 2008 and is South Korea's largest chaebol. The meaning of the Korean word Samsung is "Tri-Star" or "three stars". The Samsung Group is composed of numerous international affiliated businesses, most of them united under the Samsung brand including Samsung Electronics, the world's largest electronics company, Samsung Heavy Industries, the world's second largest shipbuilder and Samsung C&T, a major global construction company. Samsung has been the world's most popular consumer electronics brand since 2005 and is the best known South Korean brand in the world. Samsung Group accounts for more than 20% of South Korea's total exports and is the leader in many domestic industries, such as the financial, chemical, retail and entertainment industries. HISTORY In 1938, Lee Byung-Chull founded Samsung, a small trading company with forty employees located in Daegu. The company prospered until the Communist invasion in 1950 when he was forced to leave Seoul and start over in Busan. During the war, Samsung's businesses flourished and its assets grew twenty-fold. In 1953, Lee started a sugar refinery. The company diversified into many areas such as insurance, securities, and retail. In the early 1970s, Lee borrowed heavily from foreign interests and launched a radio and television station. 6
  7. 7. Samsung Group later formed several electronics-related divisions, such as Samsung Electronics Devices Co., Samsung Electro-Mechanics Co., Samsung Corning Co., and Samsung Semiconductor & Telecommunications Co., and grouped them together under Samsung Electronics Co., Ltd. in 1980s. Its first product was a black-and-white television set. 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. “By the 1980s Samsung was manufacturing, shipping, and selling a wide range of appliances and electronic products throughout the world”. In 1982, it built a television assembly plant in Portugal; in 1984, it built a $25 million plant in New York; and in 1987, it built another $25 million facility in England. The 1990s saw Samsung rise as an international corporation. Samsung's construction branch was awarded a contract to build one of the two Petronas Towers in Malaysia, Taipei 101 in Taiwan and the Burj Khalifa in United Arab Emirates, which is the tallest structure ever constructed. In 1993 and in order to change the strategy sold off ten of Samsung Group's subsidiaries, downsized the company, and merged other operations to concentrate on three industries: electronics, engineering, and chemicals. In 1996, the Samsung Group reacquired the Sungkyunkwan University foundation. Samsung survived the Asian financial crisis of 1997-98 relatively unharmed. However, Samsung Motor, a $5 billion venture was sold to Renault at a significant loss. Additionally, Samsung manufactured a range of aircraft from 1980 to 1990s. Most importantly, Samsung Electronics (SEC) has since come to dominate the group and the worldwide semiconductor business, even surpassing worldwide leader Intel in investments for the 2005 fiscal year. Samsung's brand strength has greatly improved in the last few years. 7
  8. 8. 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. In 2006, S-LCD was established as a joint venture between Samsung and Sony in order to provide a stable supply of LCD panels for both manufacturers. Samsung Electronics, which saw record profits and revenue in 2004 and 2005, overtook Sony as one of the world's most popular consumer electronics brands, 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. 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. 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. 8
  9. 9. Source: Samsung Electronics annual report 2009 Fig: Global Network of Samsung Electronics MISSION AND VISION STATEMENT VISION STATEMENT Samsung is guided by a singular vision: to lead the digital convergence movement. SAMSUNG believe that through technology innovation today, SAMSUNG will find the solutions they need to address the challenges of tomorrow. From technology comes opportunity for businesses to grow, for citizens in emerging markets to prosper by tapping into the digital economy, and for people to invent new possibilities. SAMSUNG’s aim is to develop innovative technologies and efficient processes that create new markets, enrich people’s lives and continue to make Samsung a trusted market leader. 9
  10. 10. MISSION STATEMENT Everything they do in Samsung is guided by our mission: to be the best “digital- Company”. Source: Samsung Electronics website Fig: Holistic Marketing Framework Samsung grew into a global corporation by facing challenges directly. In the years ahead, our dedicated people will continue to embrace many challenges and come up with creative ideas to develop products and services that lead in their markets. ORGANIZATION STRUCTURE Source: Samsung Electronics annual report 2009 Fig: Organization Structure of Samsung Electronics 10
  11. 11. ACHIEVEMENTS OF THE COMPANY • Became the official sponsor of 2010 Guangzhou Asian Game • Developed the world's first 2Gb 50 NANO • Samsung takes No. 1 spot in U.S. cellphone market 2008 • Opened Global Brand PR Centre ‘Samsung D'light' • No.1 worldwide market share position for TVs achieved for the 9th quarter in a row • No.1 worldwide market share position for TVs achieved for the seventh quarter in a row • Developed the world's first 30nm-class 64Gb NAND Flash™ memory 2007 • BlackJack bestowed the Best Smart Phone award at CTIA in the U.S. • Attained No.1 worldwide market share position for LCD for the sixth year in a row • Developed the world's first real double-sided LCD • Developed the worlds' first 50nm 1G DRAM 2006 • Unveiled 10M pixel camera phone • Launched the worlds' first Blu-Ray Disc Player • Developed 1.72"Super-Reflective LCD Screen • The India Retail Forum has awarded Samsung as the Best Retailer of the year 2005 in the consumer Durables category. • Most Trusted Company Award 2005 by Var 2005 India. • Mr. S. H. Oh appointed as the President and Chief Executive Officer of Samsung South West Asia. 11
  12. 12. • Samsung received the Golden Peacock Special commendation Certificate for Corporate Social Responsibility (Private Sector) for the year 2004 from Mr. Shivraj Patil, Union Home Minister. 2004 • India made regional headquarters for Samsung Southwest Asia. • Mr. K. S. Kim appointed as the First President and Chief Executive Officer of Samsung South West Asia. • Inaugurated Samsung's new, High-Tech, advanced Refrigerator facility. • Commencement of production at refrigerator 2003 facility in Noida. • Merger of SIEL with SEIIT. Software technology park set up at Noida • Construction commences for 5,000,000 refrigerator plant in Noida • Samsung unveils new technology for Consumer Home Entertainment (DNIe™) • ELCINA (Electronics Industries Association of India) 2002 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 • Foundation Stone laid for CTV Factory at Noida, Uttar Pradesh. 1996 • Launch in South Home Appliances Launch • Samsung India Electronics (SIEL) products launched in India. 1995 • Certificate for commencement of business received by Samsung Source: Samsung Electronics website Table: Achievements of Samsung Electronics 12
  13. 13. BRANDING STRATEGY OF SAMSUNG ELECTRONICS Interbrand, the world’s leading brand consultant has ranked Samsung as the fastest growing brand in the world. For any new company, when it enters the market, there are two options to stimulate the growth; intensive advertising campaign, and offer products with unique functions. Samsung opted for both, but tilted more towards advertising and brand making strategy-creating awareness of its name by investing enormously in million-dollar brand making campaigns. One problem with older companies is that they often portray their product as commodity and normally sell their products only on the basis of brand without improving their quality and lowering their price. Samsung worked on all directions, it not only invested hugely in brand creation campaigns worldwide ($3billion marketing budget per year), while it also remained ahead of the market by introducing innovation. In order to create a different image, Samsung decided to position itself by developing innovative products and become leader rather than a follower.The reason for this success is Samsung’s holistic approach to develop several strategies for different regions, but guided by one unified Samsung brand image building strategy. The branding strategy started in 1996 by its Chairman Kun Lee, whose aim was to launch a coordinated global program to make Samsung an international brand. Over the last one decade Samsung has been busy in executing its comprehensive brand building strategy. Samsung annual investment in branding and marketing is about US$3.5 billion, which has been spent to increase its brand awareness around the world. Samsung the approach is holistic reaching the world customer. It created its branding in multiple ways, ranging from traditional adds to billboards, racing, Olympics games, cricket matches, marathons, in short wherever it saw the crowd, it communicated Samsung message by presenting itself as a leader of innovation with affordable price. 13
  14. 14. SAMSUNG ELECTRONICS IN INDIA Samsung India Electronics Private Limited (SIEL) is the Indian subsidiary of the US $55.2 billion Samsung Electronics Corporation (SEC) headquartered in Seoul, Korea. Headquartered in New Delhi, SAMSUNG India has widespread network of sales offices all over the country . SAMSUNG India is the hub for SAMSUNG’s South West Asia Regional operations. The South West Asia Headquarters, looks after the SAMSUNG business in Nepal, Sri Lanka, Bangladesh, Maldives and Bhutan besides India. SAMSUNG India which commenced its operations in India in December 1995 enjoys a sales turnover of over US$ 1Bn in just a decade of operations in the country. 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). Initially, a player only in the Colour Televisions segment, it later diversified into colour monitors (1999) and refrigerators (2003). Today, it is recognized as one of the fastest growing brands in the sphere of digital technology. SIEL is the market leader in high end digital television (Plasma, LCD). PRODUCT PORTFOLIO OF SIEL SAMSUNG India is the hub for SAMSUNG’s South West Asia Regional operations. SAMSUNG India has segmented their products into five categories. Source: Samsung Electronics website Fig: Width of the product mix of SIEL 14
  15. 15. MOBILE PHONE TV/AUDIO /VIDEO CAMERA/CAMCORDER HOME APPLIANCES PC/PERIPHERALS/PRINTERS Source: Samsung Electronics website Fig: Depth of the product lines 15
  16. 16. DEPTH OF THE LCD TV SEGMENT 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. LCD TVs Series Series Series Series Series Serirs Series Others 7 6 5 4 5 4 3 Source: Samsung Electronics website Fig: Depth of the LCD segment 16
  17. 17. INDIAN CONSUMER ELECTRONICS INDUSTRY The consumer electronics industry has been witnessing a phenomenal growth globally over the past few years. This growth can be attributed to the revolutionary technological developments taking place in the consumer electronics industry. The revolution brought by the digital technology has enabled the consumer electronics sector to profit from the growing interaction of digital applications, such as camcorders, DVD player/recorder, still camera, computer monitor, LCD TV, etc. According to Consumer Electronics Market Forecast report, the global consumer electronics 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 a CAGR 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 consumer electronics industry, closely followed by Europe. In future, Asia Pacific region will constitute the major portion of the consumer electronics industry, mainly due to the increase in demand from the developed countries in the region. Also, the American region along with the European region will see a decline in their market shares because the markets there have attained saturation and only the advent of new technology will boost the demand. India’s consumer electronics devices market, defined as the addressable market for computing devices, mobile handsets and AV products, is projected at around US$28.6bn in 2010. This is expected to increase to US$45.7bn by 2014, driven by rising incomes and growing affordability. Growth in some product categories dipped in 2009, but the market recovered strongly during the festive sales season that ran until Diwali, with many retailers reporting 20-40% growth. Spending on consumer electronics 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 boxes 17
  18. 18. and notebook computers. Much of the growth will be driven by growing demand from India’s rural population. 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 Fig: Contribution of video in the CE 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 18
  19. 19. sold in rural india. At the same time there is a growing demand for LCD TVs in india. In this way vedio 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. EMERGING LCD TV MARKET India market and predicts that by 2012, LCD TV shipments will surpass those of CRT TVs in India. India has the second largest population in the world and an annual GDP growth rate of more than 8% from 2002 to 2012. CRT TV accounts for 92.9% of those units in 2008, followed by LCD TV with 6.6% and PDP TV with 0.5%. However, Indian LCD TV market is just at the beginning of a real growth curve, with Y/Y growth of more than 100% expected for each of the next five years. Growth will be driven by enhanced purchasing power, the digital broadcast (DTH, IPTV, STB cable) transition as well as consumer awareness and affordability of LCD TVs. India’s growing upper middle class is projected to be the greatest source of LCD TV purchasing power. Meanwhile, major brands like Samsung, LG, Sony and Philips and Indian local brands like Videocon and Onida are all focusing promotional efforts around LCD TV. Several Chinese brands are also targeting India with their first exports. Among the imports of LCD TV into India, approximately 25% were imported in as CBU (Complete Built Unit) and 75% were imported as SKD (Semi-Knock Down) or CKD (Complete Knock Down). Thailand has a special FTA (Free Trade Agreement) with India on duty benefits. Therefore, companies like Sony and Panasonic are making LCD TVs in Thailand and then shipping them to India. The 19
  20. 20. growing LCD TV market in India has encouraged Indian company Videocon group to set up a TFT LCD panel manufacturing lab. Source: Display search India Fig: Indian Emerging LCD TV Market THEORETICAL BACKGROUND OF THE STUDY Marketing involves satisfying consumer’s needs and wants. The task of any business is to deliver customer value at a profit. The American Marketing Association offers the following formal definition: Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stake holders. 20
  21. 21. According to this view, holistic marketers succeed by managing a superior value chain that delivers a high level of product quality, service, and speed. Holistic marketers achieve profitable growth by expanding customer share, building customer loyalty, and capturing customer lifetime value. Source: Marketing Management by Philip Kotler & Kevin Lane Kelle Fig: Holistic Marketing Framework A holistic marketing framework shows how the interaction between relevant actors (customers, company, and collaborators) and value-based activities (value exploration, value creation, and value delivery) helps to create, maintain, and renew customer value. THE ROLE OF MARKETING CHANNELS Successful value creation needs successful value delivery. Holistic marketers are increasingly taking a value network view of their businesses. The marketing channel 21
  22. 22. performs the work of moving goods from producers to consumers. Intermediaries normally achieve superior efficiency in making goods widely available and accessible to target markets. Through their contacts, experience, specialization, and scale of operation, 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; they can often be performed better through specialization; and they can be shifted among channel members. When the manufacturer shifts some functions to intermediaries, the producer's costs and prices are lower, but the intermediary must add a charge to cover its work. If the intermediaries are more efficient than the manufacturer, prices to consumers should be lower. If consumers perform some functions themselves, they should enjoy even lower prices. 22
  23. 23. CHANNEL MANAGEMENT DECISIONS After a company has chosen a channel alternative, individual intermediaries must be selected, trained, motivated, and evaluated. Channel arrangements must be modified over time. SELECTING CHANNEL MEMBERS Companies need to select their channel members carefully. To customers, the channels are the company. Consider the negative impression customers would get of if one or more of their outlets or dealers consistently appeared dirty, inefficient, or unpleasant. To facilitate channel member selection, producers should determine what characteristics distinguish the better intermediaries. They should evaluate the number of 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 size and quality of the sales force. If the intermediaries are department stores that want exclusive 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 their intermediaries. The company must constantly communicate its view that the intermediaries are partners in a joint effort to satisfy end users of the product. Coercive and reward power are objectively observable; legitimate, expert, and referent power are more subjective and dependent on the ability and willingness of parties to recognize them. 23
  24. 24. MOTIVATING CHANNEL MEMBERS A company needs to view its intermediaries in the same way it views its end users. It needs to determine intermediaries' needs and construct a channel positioning such that its channel offering is tailored to provide superior value to these intermediaries. Being able to stimulate channel members to top performance starts with understanding their needs and wants. The company should provide training programs, market research programs, and other capability-building programs to improve intermediaries’ performance. EVALUATING CHANNEL MEMBERS Producers must periodically evaluate intermediaries' performance against such standards as sales-quota attainment, average inventory levels, customer delivery time, treatment of damaged and lost goods, and cooperation in promotional and training programs. A producer will occasionally discover that it is paying too much to particular intermediaries for what they are actually doing. Producers should set up functional discounts in which they pay specified amounts for the trade channel's performance 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 as planned, consumer buying patterns change, the market expands, new competition arises, innovative distribution channels emerge, and the product moves into later stages in the product life cycle. 24
  25. 25. LEVELS OF MARKETING SEGMENTATIONS AND TARGETS Markets are not homogeneous. A company cannot connect with all customers in large, broad, or diverse .markets. Consumers vary on many dimensions and often can be 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 of one product for all buyers. The argument for mass marketing is that it creates the largest potential market, which leads to the lowest costs, which in turn can lead to lower prices or higher margins. However, many critics point to the increasing splintering of the market, which makes mass marketing more difficult. The proliferation of advertising media and distribution channels is making it difficult and increasingly expensive to reach a mass audience. Some claim that mass marketing is dying. 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 how many and which ones to target. Marketers are increasingly combining several variables in an effort to identify smaller, better-defined target groups. Effective target marketing requires that marketers: Identify and profile distinct groups of buyers who differ in their needs and preferences (market segmentation) . 25
  26. 26. Select one or more market segments to enter (market targeting). For each target segment , establish and communicate the distinctive benefits) of the 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 dominant firm might look old-fashioned against new and peppier rivals. The dominant firm's costs might rise excessively and hurt its profits, or a discount competitor can undercut prices. Leaders can respond to an aggressive competitor in three ways first, the firm must find ways to expand total market demand. Second, the firm must protect its current market share through good defensive and offensive actions. Third, the firm can try 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. The market 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 the product or who are resisting it because of price or lack of certain features. A company can 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 segment strategy) or those who live elsewhere (geographical-expansion strategy). Usage can be increased by increasing the level or quantity of consumption or increasing the frequency of consumption. 26
  27. 27. DEFINING MARKET SHARE While trying to expand total market size, the dominant firm must continuously defend its current business. The leader leads the industry in developing new product and customer services, distribution effectiveness, and cost cutting. It keeps increasing its competitive 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 produce higher profits—especially for labor-intensive service companies that may not experience 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, a company should consider four factors before pursuing increased market share: The possibility of provoking antitrust action, Economic cost, Pursuing the wrong marketing-mix strategy, The effect of increased market share on actual and perceived quality. DISTRIBUTION CHANNEL MAP OF SIEL IN KOLKATA The producer and the final customer are part of every channel. These channels are different levels. A one-level channel contains one selling intermediary, such as a retailer. A two-level channel contains two intermediaries. In consumer markets, these are typically a wholesaler and a retailer. A three-level channel contains three intermediaries. In the meatpacking industry, wholesalers sell to jobbers, who sell to 27
  28. 28. small retailers. From the producer's point of view, obtaining information about end users and exercising control becomes more difficult as the number of channel levels increases. SIEL is having three types of distribution system. Two of them comes under one-level channel and last one comes under two-level channel. ONE LEVEL CHANNEL Company Brand Shop Customers Warehouse Company Direct Customers Warehouse Dealers TWO LEVEL CHANNEL Company Distributors Sub Dealers Customers Warehouse Fig: Distribution channel map of SIEL 28
  30. 30. DATA INTERPRETATION AND ANALYSIS Table- 4.1: Table showing the counter share of SAMSUNG LCD TVs Particulars No of Dealers Percentage less than 30% 6 12 Between 30%-50% 27 54 Between 51%-70% 13 26 Greater than 70% 4 8 Total 50 100 Source: Primary Data Greater than 70% 8% less than 30% 12% Between 51%- 70% 26% Between 30%- 50% 54% INTERPRETATION: From the above table, it can be observed that 54% of the dealers are having counter share of SAMSUNG LCD is between 30%-50%, where as 26% of the dealers are having counter share of SAMSUNG LCD is between 51%-70%, 12% of the dealers are having counter share of SAMSUNG LCD is less than 30% and only 8% of the are having more than 75% counter share. 30
  31. 31. Table- 4.2: Table showing the counter size of the dealers Particulars No of respondents Percentage Between 0-19 27 54 Between 20-39 14 28 Between 40-60 7 14 More than 60 2 4 Total 50 100 Source: Primary Data More than 60 4% Between 40-60 14% Between 0-19 Between 20-39 54% 28% INTERPRETATION: The above table depicts that 54% of the dealers are having counter size between 0-19 TVs per month, where as 28% of the dealers are having counter size between 20-39 TVs per month, 14% of the dealers are of the dealers are having counter size between 40-60 TVs per month, and only 4% of the dealers are having counter size more than TVs per month. 31
  32. 32. Table- 4.3: Table showing whether the dealers are having of LCD stand Particulars No of Respondents Percentage Yes 19 38 No 31 62 Total 50 100 Source: Primary Data Yes 38% No 62% INTERPRETATION: From the above table, it can be observed that 62% of the respondents don’t have any LCD display stand in their counter where as 38% of the respondents are having LCD display stand in their counter. 32
  33. 33. Table- 4.4: Table showing the Display share of SAMSUNG LCD TVs Less Between Between Between Greater Particulars than 25%-40% 41%-54% 55%-75% than Total 25% 75% SAMSUNG 9 18 8 9 6 50 LG 21 18 5 3 3 50 SONY 31 15 2 2 0 50 Others 38 7 3 2 0 50 Source: Primary Data 40 35 30 25 SAMSUNG 20 LG 15 SONY 10 OTHERS 5 0 Less than 25% Between 25%- Between 41%- Between 55%- Greater than 40% 54% 75% 75% INTERPRETATION: From the above table, it can be observer that in 18% counter, Samsung, in 42% counter LG, in 62% counter SONY and in 72% counter others are having less than 25% Display share. Where as in 36% counter Samsung and LG are sharing the same, in 30% counter SONY and in 14% counter others are having Display share between 25%-40%. In 16% counter Samsung, in 10% counter LG, in 4% counter SONY and in 6% counter others are having Display share between 41%-54%. In 18% counter Samsung, in 6% counter LG, in 4% counter SONY and in 4% counter others are having Display share between 55%-75%. In 12% counter Samsung, in 6% counter LG is having more than 75% Display share. 33
  34. 34. Table- 4.5: Largest selling model among all the models Particulars No of Respondents Percentage 22 Inch 28 56 26 Inch 20 40 32 Inch 2 4 40 Inch 0 0 Above 40 Inch 0 0 Total 50 100 Source: Primary Data 32 Inch 40 Inch Above 40 Inch 4% 0% 0% 26 Inch 40% 22 Inch 56% INTERPRETATION: From the above table it can be found that 72% of respondents finds 22” is the largest selling model in their counter, followed by 26’’ which is the largest selling model in 40% counters, where as only 4% finds 22” is the largest selling model in their counter. 34
  35. 35. Table- 4.6: Table showing whether dealers are having sufficient catalog Particulars No of Respondents Percentage Yes 24 48 No 26 52 Total 50 100 Source: Primary Data Yes 48% No 52% INTERPRETATION: From the above data, it can be inferred that majority of the respondents i.e. 52% don’t have the sufficient catalog of the product. The rest 48% of the respondents are having sufficient catalog of the product. 35
  36. 36. Table- 4.7: Table showing whether the dealers are aware of current pricelist Particulars No of Respondents Percentage Yes 43 86 No 7 14 Total 50 100 Source: Primary Data No 14% Yes 86% INTERPRETATION: From the above table, it can be observed that 86% of the respondents are aware of current pricelist and they used to get it by email or via sales person and only 14% of the respondents not aware of current pricelist as they not getting the current pricelist from any of the available sources. 36
  37. 37. Table- 4.8: List of different sources from where the dealers get the product Particulars No of Respondents Percentage Distributor 41 82 Wholesaler 3 6 Other Source 2 4 All of them 4 8 Total 50 100 Source: Primary Data Other Source 4% All of them Wholesaler 6% 8% Distributor 82% INTERPRETATION: From the above table, it can be found that 82% of the respondents get the product from the distributor, 8% of the respondents get the product from all the available sources where they felt cheaper, 6% of the respondents get the product from the wholesaler and only 4% of the respondents get the product from other alternative sources. 37
  38. 38. Table- 4.9: Table showing the satisfaction level of the dealers about the distributors Particulars No of Respondents Percentage Highly Satisfied 15 30 Satisfied 34 68 Dissatisfied 1 2 Highly Dissatisfied 0 0 Total 50 100 Source: Primary Data Dissatisfied Highly Dissatisfied 2% 0% Highly Satisfied 30% Satisfied 68% INTERPRETATION: From the above table it can be found that 68% of respondents are satisfied with distributors as a whole, where as 30% of respondents are highly satisfied with distributors as a whole and only 2% of respondents are dissatisfied with distributors as a whole. 38
  39. 39. Table- 4.10: Table showing the frequency of sales persons visiting the counter Particulars No of Respondents Percentage Once in a week 17 34 Twice a week 19 38 Thrice a week 13 26 More than three days 1 2 Total 50 100 Source: Primary Data More than three days 2% Thrice a week Once in a week 26% 34% Twice a week 38% INTERPRETATION: From the above table it can be found that in 38% counters salespersons are visiting twice a week, where as in 34% counters salespersons are visiting once a week, 24% counters salespersons are visiting thrice a week, and only in 2% counters salespersons are visiting more than thrice a week. 39
  40. 40. Table- 4.11: Table showing the satisfaction level of the dealers about the service Particulars No of Respondents Percentage Good 36 72 Satisfactory 12 24 Average 2 4 Below average 0 0 Total 50 100 Source: Primary Data Average Below 4% average 0% Satisfactory 24% Good 72% INTERPRETATION: From the above table, it can be observed that majority of the respondent 72% rated the service as good, 24% of the respondents rated the service as satisfactory, and only 4% of the responded rated the service as average. 40
  41. 41. Table- 4.12: List of facilitating factors which will help the dealers to increase the counter share Particulars No of Respondents Percentage Branding 13 26 Advertising 25 50 Salesman 7 14 Display Concert 5 10 Total 50 100 Source: Primary Data Display Concert Branding Salesman 10% 26% 14% Advertising 50% INTERPRETATION: From the above table, it can be observed that majority of the respondents 50% think that advertising will facilitate to increase their counter share, where as 26% respondents think that branding will facilitate to increase their counter share, 14% respondents think that salesman will facilitate to increase their counter share and only 10% respondents think that display concert will facilitate to increase their counter share. 41
  42. 42. Table- 4.13: Table showing whether the dealers are satisfied with SAMSUNG as whole Particulars No of Respondents Percentage Yes 48 96 No 2 4 Total 50 100 Source: Primary Data No 4% Yes 96% INTERPRETATION: From the above table, it can be observed that majority of the respondents 96% are satisfied with SAMSUNG as a whole, where as only 4% respondents are not satisfied with SAMSUNG as a whole. 42
  43. 43. LIMITATIONS 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. 43
  44. 44. FINDINGS Majority of the dealers i.e. 54% are having counter share of SAMSUNG LCD is between 30%-50%. It shows that Samsung has got strong grip in the market and if the dealers will contribute more enthusiastically than market share may grow farther. 54% of the dealers are having counter size between 0-19 units per month. It shows that majority of the dealers need to improve their counter size in order to expand the market. From the study, it is revealed that 62% of the dealers don’t have any LCD display stand in their counter. Samsung is having healthy display share (between 55% to 75%) in 18% dealers rather than i.e. it shows that many of the dealers are keeping Samsung in the display. Different contest for displaying the LCD brings a new perspective in this context. Among the different models like 22 inch, 26 inch, 40 inch, above 40 inch, majority of the dealers (56%) finds 22” is the largest selling model in their counter. Majority of the dealers i.e. 52% don’t have the sufficient catalog of the product. Samsung should strive to ensure that the catalogs are sent out regularly and quickly, as this is the cause of most grievances of the channel partners. Majority of the dealers are aware of current pricelist due to the effective communication with the company. Without effective communication value cannot be passed deliver superior value to the target market. Some dealer’s are taking Samsung LCD from cheaper markets. This is creating price instability in the market between retailers and system integrators. 44
  45. 45. 68% of the dealers are satisfied with the distributors. In turn, it helps to achieve superior efficiency in making goods widely available and accessible to target markets. In 38% counters sales persons are visiting twice a week. 72% of the dealers rated the promotional service as good. The rating shows that Samsung is successful in delivering distinctive customer value. 50% of the respondents think that advertising will facilitate to increase their counter share. It might build conviction and purchase intent among the target audience. 96% of the dealers are satisfied with SAMSUNG as a whole. 45
  46. 46. SUGGESTIONS SAMSUNG should redress the grievance of the dealers regarding the supply of catalogs, so that the dealers can show various models to the prospects and endorse to buy SAMSUNG LCD TV. The company should modify some of the models as these models don’t have any output connection specially the 22” model as it is the largest selling model in most of the counters. Dealers in Kolkata don’t have enough space to display LCD in their counter that’s why they are not willing to keep LCD display stand in their counter. Company should customize the display stand so that it can be easily fix in the wall, in this way SAMSUNG can improve the display share as SAMSUNG also believes that “ JO DIKHTA HAI WO BIKTA HAI”. The rural counters are not getting the current price list of the product as sales persons are visiting less in these counters company should focus on that matter seriously. Company should introduce low cost products to satisfy the needs of the low or middle class as SONY is having 19” model in this segment. Branding and promotional activities should be done effectively as it creates a long lasting image in the mind of the customers. 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. 46
  47. 47. CONCLUSION This study highlighted that Kolkata market is still a virgin market for SAMSUNG LCD TVs. Customers need to be made aware of the productive usages of these products if SAMSUNG want to target these untapped market segments of customers. Also SAMSUNG need to modify their advertising strategies in order to educate the target audience about the product. Hence SAMSUNG will be able to win a major between the competitors. 47
  48. 48. BIBLIOGRAPHY BOOKS AND JOURNALS REFERRED: SAMSUNG Electronics annual report, 2009 Current state of Indian Economy (FICCI), October 2009 Indian journal of marketing, June 2009 Marketing Management, 12th Edition By: Philip Kotler and Kevin Lane Keller WEBSITES: http:// http:// 48
  49. 49. ANNEXURE Questionnaire “A Study on distribution channel relationship and market share analysis of Samsung LCD in the territory of Kolkata”, with special reference to SIEL. 1) Name of the dealer: …………………………………………………………………... 2) What is the Counter share of SAMSUNG LCD per month? ………………….. 3) What is the counter size of the dealer per month? ………………….. 4) Whether the dealer is having LCD stand? Yes No 5) How different brands are displayed (Size wise)? 22” 26” 32” 40” Above 40” SAMSUNG LG SONY Others 6) Which is the largest selling Model? 22” 26” 32” 40” Above 40” 7) Whether the Dealer is having sufficient catalog of the product? Yes No 8) Whether the Dealer is aware of current pricelist of the product? Yes No 9) From where the dealer used to get the product? Distributor Other Source Whole seller All of them 49
  50. 50. 10) Whether the Dealer is satisfied with the Distributor? Highly Satisfied Satisfied Dissatisfied Highly dissatisfied 11) How often distributors sales person visit the counter? Once a week Twice a week Thrice a week More than 3 times 12) Whether the dealer is satisfied with the service? Satisfactory Good Average Below Average 13) What can Samsung do to motivate you to sell more Samsung LCD rather than any other brand? Branding Advertising Salesman Display Concert 14) Have you been satisfied with Samsung as a whole, during your experience selling Samsung products? Yes No Suggestions (If Any): 50