INTRODUCTION

Before the liberalization of the Indian economy, only a few

companies like Kelvinator, Godrej, Alwyn, and Voltas were the
major players in the consumer durables market, accounting for no
less than 90% of the market. Then, after the liberalization, foreign
players like LG, Sony, Samsung, Whirlpool, Daewoo, and Aiwa
came into the picture. Today, these players control the major
share of the consumer durables market. Consumer durables
market is expected to grow at 10-15% in 2007-2008. It is growing
very fast because of rise in living standards, easy access to
consumer finance, and wide range of choice, as many foreign
players are entering in the market With the increase in income
levels, easy availability of finance, increase in consumer
awareness, and introduction of new models, the demand for
consumer durables has increased significantly. Products like
washing machines, air conditioners, microwave ovens, color
televisions (CTVs) are no longer considered luxury items.
However, there are still very few players in categories like
vacuum cleaners, and dishwashers Consumer durables sector is
characterized by the emergence of MNCs, exchange offers,
discounts, and intense competition. The market share of MNCs in
consumer durables sector is 65%. MNC's major target is the
growing middle class of India. MNCs offer superior technology to
the Consumers whereas the Indian companies compete on the
basis of firm grasp of the local market, their well-acknowledged
brands, and hold over wide distribution network. However, the
penetration level of the consumer durables is still low in India.
Classification of consumer durables sector

1. Consumer electronic include vcd/dvd, home theatre, music

player, color television (CTVs), cameras, camcorders, portable
audio, Hi-Fi, etc
2. White goods include dishwashers, air conditioners, heaters,
washing machines, refrigerators, vacuum cleaners, kitchen
appliances, non-kitchen appliances, microwaves, built-in
appliances, Tumble dryer, personal care product etc.
3. Moulded luggage include plastics
4. Clocks and watches
5. Mobile phones

Scope

1. In term of purchasing power parity (PPP), India is the 4th

largest economy in the world and overtake Japan in the near
future become the 3rd largest.
2. Indian consumer durable market is expected to reach $400
billion by on 2010
3. India has the youngest population amongst the major
countries. There are lot of people in the different income
categories nearly the two third population is below the age of
35 and nearly 50% is below 25.
4. There are 56 million people in middle class, who are earning
us$4,400-US$21,800 a year. And there are 6 million rich
household in India.
5. The upper-middle and high-income household in urban areas
are expected to grew to 38.2 million in 2007 as against 14.6
million in 2000.
Opportunity

1. In India the penetration level of white goods is lower as

compared to other developing countries.
2. Unexploited rural market.
3. Rapid urbanization.
4. Increase in income level, i.e. increase in purchasing power of
consumers.
5. Easy availability of finance.

Threats

1. Higher import duties on row materials.

2. Cheap imports from Singapore, China and from other Asian
countries.

Brands in consumer electronics sector

MNCs NATIONAL REGIONAL
LG ) ONIDA BUSH
SAMSUNG ) KOREA VIDEOCON CROWN
HYUNDAI ) BPL SALORA

TCL ) CHINA GODREJ T-SERIES

HAIER ) VOLTAS WESTON
IFB BELTAK

PHILIPS ) HOLLAND OSKAR

PANASONIC )
SHARP )
HITACHI )
SANSUI ) JAPAN
AKAI )
AIWA

WHIRLPOOL )
ELECTROLUX

TODAY Consumer durables sector is characterized by the

emergence of MNCs, exchange offers, discounts, and intense
competition. The market share of MNCs in consumer durables
sector is 65%. MNC's major target is the growing middle class of
India. MNCs offer superior technology to the LG, SAMSUNG the
two Korean companies has been maintaining the lead in the
industries with LG being leader in almost all the categories.
The company, having a turnover of Rs 9,500 crore and market
share of 26 per cent, is investing Rs 360 crore on brand-building
and other marketing initiatives and around Rs 140 crore on
research and development, besides launching new platforms in
information technology and related areas.

LG Electronics is one of the leading companies in the field of

electronics with a global presence in many countries.Before
briefing, we have divided the introduction part into three main
sub parts.

1. LG Global
2. LG India
3. LG

History of company:
The company was originally established in 1958 as Gold Star,
producing radios, TVs, refrigerators, washing machines, and air
conditioners.

1958-1969-GoldStar The Electronics Industry Dream

1970-79 GoldStar symbol of The Technolgoy

1980-88 :- INTERNATIONALIZATION

1989-94 INOVATION
1995-98 GLOBAL LEADERS LG ELECTRONICS

1999-2003-DIGITAL MANAGEMENT
2004-2006 GREAT PEOPLE GREAT DESIGN

2007-THE PEOPLE COMPANY

The LG Group was a merger of two Korean companies, Lucky
and Gold Star, from which the abbreviation of LG was derived.
The current "Life's good" slogan is a backronym. Before the
corporate Name change to LG, household products were sold
under the Brand name of Lucky, while electronic products were
sold under the brand name of Gold Star. The Gold Star brand is
still perceived as a discount brand.
In 1995, Gold Star was renamed LG Electronics, and acquired
Zenith Electronics of the United States.

Global Operation:

LG Electronics is playing an active role in the world market with

its assertive global business policy. As a result, LG Electronics
controls 110 local subsidiaries in the world with around 82,000
executive and employees.

LG Group
1. LG.Philips LCD
2. LG Chemical
3. LG Telecom
4. LG Powercom
5. LG Twins
6. LG Dacom
Business areas and main products
Mobile communications
(a) CDMA Handsets,
(b)GSM Handsets,
(c) 3G Handsets,
(d) Cellular Phones
Digital appliance
a) Air Conditioners,
b) Refrigerators,
c) Microwave Ovens,
d) Washing Machines,
e) Vacuum Cleaners,
f) Home Net,
g) Compressors for Air Conditioners and Refrigerators
Digital display
a) Plasma TVs,
b) LCD TVs,
c) Micro Display Panel TVs,
d) Monitors,
e) PDP Modules,
f) OLED Panels,
g) USB Memory,
h) Flat Panel Computer Monitors
Digital media
a) Home Theater Systems,
b) DVD Recorders,
c) Super Multi DVD Rewriters,
d) CD±RW,
e) Notebook PCs,
f) Desktop PCs,
g) PDAs,
h) PDA Phones,
i) MP3 Players,
j) New Karaoke Systems,
k) Car Infotainment

VISION
Global Top 3 by 2010
 Global Top 3 Electronic/Telecommunication company

GROWTH STRATEGY

“Fast innovation, Fast growth”

CORE COMPETENCY

“Product leadership, Market leadership, People leadership”

CORPORATE CULTURE

No excuse, “we” not “I”, Fun workplace

SLOGAN
"Life's Good" represents LG's determination to provide
delightfully smart products that will make your life good.

The LG Electronics Life's Good signature consists of the LG logo,

seal, and the slogan, "Life's Good" set in Charlotte sans typeface
curved around the LG symbol. The curving of the slogan
reinforces LG's personality and uniqueness. The consistent usage
of this signature clearly establishes the unique identity of the
company and unifies every division and product from LG
Electronics across the globe.
 THE SYMBOL

The symbol of LG is the face of future. The letter “L” and “G” in a
circle symbolizes world, future, youth, humanity & technology.
LG philosophy is based on humanity. It also represents LG’s
efforts to keep close relationship with our customers around the
world.

The symbol consists of two elements.

1. The logo in LG gray

2. The stylized image of human face in the unique LG red color.

Red color represents our friendliness and gives a strong

impression of LG’s commitment to deliver the best.

The circle symbolizes The Globe. The stylized image of a smiling

face in the symbol conveys “Friendliness and Approachability”.

The one eye on the symbol represents “Goal-oriented, Focused &

Confident”.

The slogan of LG is “Life’s Good”. It expresses“ Brand’s Value ,

Promises, Benefits , Personality .
 THE PARTNERSHIP

LG Electronics chooses to promote harmony and build

constructively on a labor-management relationship rather than an
employee-employer relationship. This illustrates that
management and workers are not in a vertical relationship, but in
a horizontal one.

This culture is necessary for LG Electronics as it strives to become

one of the world's top companies. Such a relationship is
transformed into a value-creation relationship whereby both
parties endeavor to address mutual problems and
create new values together.

STRATEGIC ALLIANCE

LG Electronics is making technical advances and identifying

business opportunities through various associative
relationships with some of the world's leading companies.

LG Electronics is striving to become number one in the world by

mingling in various business and technological fields and making
strategic alliances with world famous companies. "Strategic
association between corporations," in which companies with
different infrastructures cooperate in the fast-developing 21st
century business field, is of key significance in terms of
strengthening the existing industry and creating a new one.
LG Electronics will do its best to create new products and
services with an open mind, while developing new technologies
and business fields through various associations with some of the
world's most successful companies.

1. 3M
2. SUN
3. YAHOO
4. PHILLIPS
5. TOYOTA
6. MICROSOFT
7. HP
8. GOOGLE
9. GE
10.INTEL
11.NORTEL
12.HITACHI
13.PRADA
14.RENESAS
15.TOSHIBA
16.BESTBUY

And the number follows many more…………………………..

In Feb. 2007 LG Electronics and Yahoo formed a strategic alliance.
Yahoo mobile services will be available from LG mobile. This
service is targeting 10 million LG mobile phones in over 70
countries.
In Mar. 2007 LG Electronics and Google formed a strategic
alliance. Both companies will work together to release, market,
and offer LG mobile phones with Google services (search engine,
map, email, and blogs).

LG BRAND IDENTITY:-
The brand of LG is delightfully smart. LG strives to enhance the
customer’s life and lifestyle with intelligent features, institutive
functionality and exceptional performance.

The brand platform:-

The LG brand is composed of four basic elements –

1. Value
2. Promise
3. Benefits
4. Personality

The Brands core Value that never changes.

a. Trust,
b. Innovation,

c. People

d. Passion

The benefits that are consistently delivered to the customer

includes

a) Reliable products

b) Simple design

c) Ease of use

d) Extraordinary Experience

Personality describes the human characteristic that are expressed

to the customer through

Trustworthy, Considerate
Practical, Friendly

The Internal Culture of LG:

LG practices four cultures

1. Learning Culture
 2. Boundary less Environment

3. A Carrier

4. Growth

According to LG, the Learning Culture continuously helps the

employee to learn more and more to develop the habit of
continuous learning.

Boundary less Environment means that there is no difference

between the levels of employees. There is transparency between
the work and mutual understanding between all the employees.

A carrier is highly growing in LG and one who is the employee

can develop their carrier largely. A new comer will feel fully
comfortable in the company and for a new comer the company is
very helpful in the overall growth of personality.

Growth in LG is very high for those who are in the company and
for those who want to join in LG. The company is growing with
fast innovation and the BLUE Ocean strategy is one of the
examples of growth.

Mission

The mission of LG is to provide the customers with utmost

satisfaction through leadership. The fundamental policy of
development is to secure product leadership that the Customers
may have the utmost satisfaction.
 Product Leadership

We are focusing on six development areas to become the product

leader.
1. New Machine
2. Reliability
3. Conventional Installation
4. Environment Friendly Product
5. Low Noise & Vibration
6. Energy Saving

Quality Innovation

The policy of quality assurance is to provide customers with

utmost satisfaction by supplying zero defects.
LG proceeds in a hierarchal manner. It is named as “LG WAY”.

From top to bottom:

No.1 LG – is the VISION

“Jeong-DO” Management is LG’s unique application to ethics. LG

will succeed through fair management practices and constantly
developing our business skill.

A) Honest with our customer

b) Providing great values to customer through constant
innovation & and development.
c) Equal opportunities
d) Equal Treatment
Management Principle - Creating value for customer

Code of conduct of LG

1. Responsibility and obligations to customers :

• Respect for Customers

• Creating Value
• Providing Value

2. Fair competition
 • Pursuit of Free Competition
• Compliance with Laws and Regulations

3. Fair Transaction :

• Equal Opportunity
• Fair Transaction Procedure
• Support and Aid for Business Partners

4. Basic Ethics for Employees

• Basic Ethics
• Completion of Duty
• Self Development
• Fairness in Performance
• Avoidance of conflict with company interest

5. Corporate Responsibilities to employees

• Respect for human dignity

• Fair Treatment
• Promoting Creativity

6. Responsibilities to society and country

• Rational Business Development

• Protection of stock holder interest
 • Contribution to social development
• Environmental Conservation

LG INDIA
LG Electronics India Pvt. Ltd., a wholly owned subsidiary of LG
Electronics, South Korea was established in January 1997 after
clearance from the Foreign Investment Promotion Board (FIPB).
LG set up a state-of-the art manufacturing facility at Greater
Noida, near Delhi, in 1998, with an investment of Rs 500 Crores.

LG corporate office is located at Plot no.51, Udyog Vihar, Kasna

Road, Greater Noida, India. This facility manufactured Color
Televisions, Washing Machines, Air-Conditioners and Microwave
Ovens.

''Company is setting up a chain of exclusive premium

showrooms. LG plans to launch 60 premium Brand Shoppes by
the end of the first quarter of this year. At present, LG has a total
of 83 LG stores across the country, of which 45 are shops and 38
are exclusive stores. Brand shops will be placed in the premium
segment and the target audience will comprise buyers interested
in premium and high end products.

LG Brand Shoppe goes beyond the concept of a normal exclusive

store by having a more interactive environment and additional
lifestyle orientation on display so that the customer can actually
experience the LG products in his or her own home settings.

LG Electronics India Ltd (LGEIL), consumer durables leader with

27% market share, is planning a brand new image. To attract
inspirational and young consumers across India, company will
roll out a new marketing strategy. The exercise will cost the
company Rs 360 crore.

LG Electronics India is the fastest growing company in the

consumer electronics, home appliances, and computer
peripherals industry today. LG Electronics is continually
providing, superior technology products & value for money to
more than 50 lakh households in India. LGEIL is celebrating the
11th anniversary this year.

LG Soft India the innovation wing of LG Electronics in Bangalore

is LG Electronics' largest R&D centre outside Korea. We at LGSI
focus on niche technology areas such as mobile application
development, digital video broadcast and biometrics software
and support LG Electronics with our expertise. Motivated by a
passion for technology, a strong work culture and loyalty to the
organization, we are determined to see LG become one of the top
three brands globally.

Prominent consumer electronic company, LG Electronics Inc. has

said that it expects the sale of its products in India to up by 15 per
cent in 2008. Moon Bum Shin, managing director of LG
Electronics India has said that the company has earmarked 4.8
billion rupees for investment purpose in India this year. The said
money will be used to market as well as manufacture new
products.

LG Electronics, which is originally a South Korean Company with

branch in India, informed that its sales of GSM mobile phones,
color televisions, air conditioners and other household goods in
the Indian market was to the tune of 95 billion rupees ($2.4
billion) in 2007. As per Shin's estimate, the sales in 2008 would be
around 110 billion rupees. In order to achieve its target, Shin said
LG Electronics will concentrate on catering to the high-end
consumer market which will help boost sales this year. India
churns out six (6) per cent of LG Electronics global revenues of
$42 billion. The Indian branch of LG exports to 40 countries.
India challenges

The challenges faced by LG when entered in Indian market

1. Low brand awareness about LG in India.

2. One of the last MNCs entered in India (Samsung, Panasonic
entered in 1995 in India).
3. High import duty
4. Compitition from local market players and other MNCs in
consumer durable segment.
5. Price sensitiveness of the Indian consumer

LGEI over comes these challenges to emerge as

Innovative marketing strategy

1. Launch new technologies in consumer electronic and home

appliances.
2. LG was the first brand to enter in cricket in big way a way,
by sponsoring the 1999 world cup followed it up in 2003 as
well.
3. LG brought in four captains of the Indian cricket team to
endorse its products. LG invested more then US$ 8 million
on advertising and marketing in this sport.
4. LG has differentiated its product using technology and
health benefits. CTV has “Golden eye technology” Air
conditioner has “Health air system” and microwave ovens
have the “Health wave system”.
Local and efficient manufacturing to reduce the cost

To overcome high import duties LG manufactures TV refrigerator

in India at manufacturing facility at Noida and . LGEI had
already commissioned contract manufacturing at Mohali Kolkata
and Bhopal for CTVs. This has helped LGEI to reduce cost. LGEI
implementing the “Digital manufacturing system” (DMS) as the
cost cutting innovation this system is follow-up to the six sigma
exercise LGEI had initiate earlier.

R&D potential

LG has the research and development facilities in Bangalore and .

Both the unit carry out R&D department for the domestic as well
as the parent company it also dose customize R&D for the specific
countries to which it export product.

Regional channel and wide distribution network

1. LG has adopted the regional distribution channel in India.

All the distributers work directly with the company. This
has resulted in quicker rotation of the stock and better
penetration into B, C, D, class market.
2. LG also follows the stock rotation policy rather then
dumping stock on channel partners.
Product localization:-
1. Product localization is the key strategy used by the LG
2. LG came out with Hindi and regional language menus on its
TVs.
3. Introduced the low-priced “Cineplus” and “Sampooma” for the
rural market.
4. LG was the first brand to introduce gaming in TVs in
continuations of its association with cricket LG introduce cricket
game in CTVs

MAJOR KEY SUCCESS FACTORS:

1. Innovative marketing - LG was the first brand to enter cricket

in a big way, by sponsoring the 1999 World Cup and followed
it up in 2003 as well.
2. Local and efficient manufacturing to reduce cost - To overcome
high import duties, LG manufactures PC monitors and
refrigerators in India at its manufacturing facility at Noida,
Delhi.
3. Commissioned contract manufacturing at Mohali, Kolkata and
Bhopal for CTVs.
4. Product localization - Product localization is a key strategy
used by LG. It came out with Hindi and regional language
menus on its TV.
5. Regional distribution model - This has resulted in quicker
rotation of stocks and better penetration into the B, C and D
class markets.
6. Leveraging India’s IT advantage - LG Electronics has awarded
a contract to develop IT solutions to LG Soft India (LGSI). The
project involves development and support for ERP, SCM, CRM
and IT-enabled services for LG.
Strategies adopted by the organization:

LG follows 10 commandments which are as follows.

1. Foster working environment-5S Environment
2. Fast execution is key to success
3. Transparent and fast communication-open communication
4. Update market -knowledge –Demographics
5. Win –Win relationship with the trade partners
6. Customer is the king
7. Even Billing –Road to ach supplier A
8. Be in touch with the market (70% Market, 30% Office).
9. Plan and Execute annual marketing Calendar-Time to market
10.Display share of 50% -to get 50% consumer share.

LG market share of consumer appliances and consumer

electronic:-

LG position of CTV in various states in India

LG position of REF in various states in India
LG position of WM in various states in India
LG position of AC in various States in India
LG position of Audio & Home Theater in various in India
LG position of DVD in various in India
LG position of MWO in various states in India
This analysis is based on the ORG survey conducted by LG which
represent the LG position of different consumer durables in
various states in India. We selected different brand in different
category as per the market share and the demand of product in
market. This analysis represents the LG market position during
the period of March 2008. It shows that LG has captured
maximum market share almost in every category. LG and
Samsung have the maximum market in consumer durable market
but LG dominate the almost all the category in consumer durable.
Prominent consumer electronic company, LG Electronics Inc. has
said that it expects the sale of its products in India to up by 15 per
cent in 2008. Moon Bum Shin, managing director of LG
Electronics India has said that the company has earmarked 4.8
billion rupees for investment purpose in India this year. The said
money will be used to market as well as manufacture new
products. LG Electronics, informed that its sales of GSM mobile
phones, color televisions, air conditioners and other household
goods in the Indian market was to the tune of 95 billion rupees
($2.4 billion) in 2007. As per Shin's estimate, the sales in 2008
would be around 110 billion rupees. In order to achieve its target,
Shin said LG Electronics will concentrate on catering to the high-
end consumer market which will help boost sales this year. India
churns out six (6) per cent of LG Electronics global revenues of
$42 billion. The Indian branch of LG exports to 40 countries. Shin
remarked that the company was targeting an increase of exports
to $300 million in 2008 from $230 million in 2007.

LG PUNE
LG Pune is the branch office of LGEIL. It is located in J.M Road.
In 2004 LGEIL opened second factory which is located in
Ranjangaon. This plant manufactures all product including DVD
writers and GSM mobiles. Thus it became first company to
manufacture DVD writers in India. The ODP plant aims to reach
a manpower base of 1500 people and an investment of Rs 300
crore till 2010. LG India will become the export hub for LG
Worldwide, catering to the Middle East and African markets. The
company aims to touch an export turnover of $3 billion by 2010
from India, which will contribute to 30 per cent of the Indian
arm's turnover. , India, October 6, 2004 -- LGE announced 3
growth strategies aimed at the 1.1 billion people of India making
the Indian market the second largest global production base
following China. Under this strategy LGE has projected 2007
revenues in India will exceed US$10 billion, 10 times that of 2004.
The three strategies for the Indian market that the global
electronics giant disclosed included: penetrate the south-western
market of India through the new plant near Mumbai, the second
largest city in India, in addition to the existing northern plant;
installs a new GSM handset production line in the new plant and
use it as its second-largest global GSM handset production line
after the Qingdao plant in China; and expand the current 750
R&D staff in India to 1,500 by 2007, striving to develop premium
products and export 30% of India-manufactured products to Asia,
Middle East and Africa markets by 2007. LG Electronics’ second
new plant in Pune, India covers a total area of 211,200 square
meters and is currently equipped with a production line to
manufacture 600,000 TVs and one million refrigerators a year.
The company is set to add production lines of air conditioners,
washing machines, monitors, and electronic ovens, by 2005. Also,
LG Electronics is poised to install a GSM handset production line
in the new plant by early next year. The GSM handset line
envisages a capacity of manufacturing 2 million handsets
annually, and the company expands it to become a global GSM
handset production base with a capacity of an annual 10 million
units by 2010. In connection with its three growth strategies for
the Indian market, LG Electronics will invest a total of US$150
million in establishing facilities and boosting R&D efforts in India
by 2007. Specifically, it will invest US$53 million in the second
plant, another US$43 million in establishing the GSM line, and
US$54 million in securing R&D manpower and boosting other
efforts. Through these strategies, LG Electronics aims to penetrate
the global market by using China and India as its core production
bases, while operating its plants in Changwon and Gumi, Korea,
as its main production bases. This way, the company is pushing
to penetrate the global home appliance market. The present
capacity of the facility is of 1 lakh unit per year and it shall cater
to the need of the domestic markets. LG plans to upscale its
operations to a figure of 2.5 lakh units a year in the near future.
The plant in addition to its current manufacturing facility at
Greater Noida will enable the company to enhance its consumer
reach and reiterate it’s commitment towards providing
superior technology products to the India consumer. The key
strategies being implemented include increasing the number of its
regional offices from six to eight. LG has split its southern
regional office into two, one comprising the states of Tamil Nadu
and Kerala and the other consisting of Andhra Pradesh and
Karnataka. In addition, it has split one of its northern regional
offices by making Uttar Pradesh a separate region after spinning
it out from Delhi NCR. The other four regional offices take care of
East, Gujarat and Madhya Pradesh, Maharashtra & Goa and
Punjab, Haryana & Rajasthan respectively. In the coming year,
LG is also repositioning its marketing spends, resulting in a
significant increase in its mass media expenditure for better brand
visibility. LG had a marketing budget of Rs 320 crore in 2007 with
a 60:40 split in favor of below-the-line activities. Next year, the
company plans to increase the share of mass media even as
overall marketing spends would be raised by just about 10-15%.
Distribution and Marketing:

The company has number of dealers and warehouses. They have

LG exclusive shops. For the marketing of the products a number
of activities are followed:
1. Exhibitions are conducted from time to time.
2. Society and college activities are conducted.
3. Hoarding, Posters, banners are used so as to grab the attention
of the costumers.
4. Day to day advertisement in leading newspaper.
5. Discount at festival time.
6. For dealer relationship they arrange dealer meeting at several
time in the year
7. LG divide dealer in gold silver etc. category to know the
performance of the dealers.
8. They have their sales persons at various sub dealer store and at
mordent trade store for particularly for the promotion of the LG
product.
9. LG also uses the radio FM for the promotion activities.
10.Also provide capon and scratch card for festive season.

The logistics (Supply Chain Management):-

Logistics is the art and science of managing and controlling the

flow of goods, energy, information, and other resources like
products, services, and people, from the source of production to
the marketplace. It is difficult to accomplish any marketing or
manufacturing without logistical support. It involves the
integration of information, transportation, inventory,
warehousing, material handling, and packaging. The operating
responsibility of logistics is the geographical repositioning of raw
materials, work in process, and finished inventories where
required at the lowest cost possible.
Logistics Management is that part of the supply chain, which
plans, implements and controls the efficient, effective forward
and reverse flow and storage of goods, services and related
information between the point of origin and the point of
consumption in order to meet customers' requirements.
5R’s of Logistic followed by LG:
1. Right Time
2. Right Place
3. Right Condition
4. Right Cost
5. Right Handling

The LG Factory is located at NOIDA & . There are three types of

Warehouse-
1. Mother Warehouse
2. Branch Warehouse
3. Spare part warehouse
The mother warehouse is that where the products from the
factory are kept and from that warehouse, the products are sent
to the branch warehouse. A warehouse is a commercial building
for storage of goods. Warehouses are used by manufacturers,
importers, exporters, wholesalers, transport businesses, customs,
etc. They are usually large plain buildings in industrial areas of
cities and towns. They come equipped with loading docks to load
and unload trucks; or sometimes are loaded directly from
railways, airports, or seaports. They also often have cranes and
forklifts for moving goods, which are usually placed on ISO
standard pallets loaded into pallet racks.

In warehouse 7 locations is set up for the products.

Loc 1, Loc 2, Loc 3, Loc 4 , Loc 5 ,Loc6, Loc 7
Loc 1 – selling
Loc 2 - second sale
Loc 3 - insurance claim
Loc 4 - write off material
Loc 5 – destroy the item
Loc 6 - court case material
Loc 7 - for repair
5’s of warehouse, which the LG strictly follow.
1. Sweeping
2. Sorting
3. Systematic Arrangement
4. Simplification
5. Self- discipline

In warehouse, the products are pinup with 3-color paper to get

the knowledge about the delivery.

1. Red Card – To stop the product going into market,

2. Green card – To allow the product for delivery in market,
3. Yellow Card – After the product labeled with green, allow this
to move in market

Distribution Time:-
• Local delivery – 4 hrs.
• Upcountry delivery - 12 hrs.
• Within 200 km. – 24 hrs.
• Beyond 200 km. – 48 hrs.
The above distribution time is the time of delivery of products
from warehouse to the market place, which the logistic
department follows to fulfill the demand in the market at right
time. In LG, we have the following process, which is followed in
logistic through ERP.
· Order Processing
· Invoicing
· Indenting
· Report
Order Processing booking for dealers /distributors
Invoicing after billing process/bill generation
Indenting requirement (Production Unit to branch unit)
Report distributed to all

In warehouse, there are two mode of dispersion of product from

one place to another within.
a) Hydraulic
b) Manual
In addition, there are 35 fire extinguishers to prevent the
accidental hazard within the warehouse due to fire. These fire
extinguishers are valid up to year 2011. One has to follow the rule
of “NO Smoking” within the warehouse

Logistics Ten Commandments – Golden Rules

1 - Warehouse 5S – to be strictly followed – FG – 2, 5 & 7 to be

properly maintained.
2 - 100% Bar-coding for all inward & outward transaction.
3 - Follow standard pick – ship process religiously.
4 – No inventory mismatch, shortage or excess – monthly 100%
physical stocktaking.
5 – Nil 30+ for FG – 2, 3 & 5.
6 – Nil transit damage.
7 – File insurance claim within 2 days. Settle all claim all within 30
days.
8 – No inter – branch transfer without HO clearance.
9 – PSI feeding into system by 25th of every month. Ensure 90%
accuracy.
10 – Apply physical FMFO.

Problem

1- In transit material damage checking.

2- Cost target achievement.
3- Natural events tracking.
4- Fluctuation in demand-supply Equipments
1- 100% Bar code scanner.
2- ERP – Invoice Generation Process.
3- Hydraulic Trolleys for material movement.
4- Pallets for safety of material.

CUSTOMER SERVICE:

The best and the biggest international brands are here in India –
but the irony if it all: where is the after-sales-service? So integral
to a brand, so critical for its success and so taken for granted in
developed markets! In India, after sales service is, for want of a
better description, the pits. So what’s stopping the best companies
from pulling out all the stops when it comes to providing the best
service? Do customers expect for too much? Or is it that in India
they don’t really care. Brand Equity fanned out to MNC as well as
Indian consumer durable companies, stockiest and dealers,
analysts and market researchers to get feel of what’s really
keeping after sales from being used as a cutting edge marketing
tool in pushing products across categories. Customers support
following the purchase of a product or service. In some cases,
after-sales service can be almost as important as the initial
purchase. The manufacturer, retailer, or service provider
determines what is included in any warranty (or guarantee)
package. This will include the duration of the warranty
traditionally one year from the date of purchase, but increasingly
two or more year’s maintenance and/or replacement policy,
items included/excluded, labor costs, and speed of response. In
the case of a service provider, after-sales service might include
additional training or helpdesk availability. Of equal importance
is the customer's perception of the degree of willingness with
which a supplier deals with a question or complaint, speed of
response, and action taken.

LG also had a big problem of after sale service in India. During

the project we also came to know that after sale service becomes
the big issue in the region. Customers as well as dealer were
facing the problem of after sales service. Because of this problem
many dealer in the region were not ready to sell LG product. So it
becomes the big issue. But LG has taken some solid steps towards
improving customer’s perception and experience of after sales
service. Because it very important in competitive market to
provide the best service. L G Electronics has signed a
memorandum of understanding with 23 Industrial Training
Institutes to strengthen its after sales service in India. The
company aims to recruit 10,000 people by the end of this year as a
part of its branding strategy to focus on service and move away
from discounting. L G Electronics has identified eight states with
high after sales service call rates to ink the deals with the ITI. Y V
Verma, director HR and management system, LG Electronics
said, "The Company was trying to find a solution for effective
after sales service since last two years. There is a huge need of
trained manpower for the after sales service to align with the
company's expansion and focus on the GSM mobiles and the
personal computer segments."

1. In the initial phase the company has entered into agreements

with ITIs in the states like Maharashtra, Gujarat, Delhi, Punjab,
Assam, and Karnataka and is in the last leg of signing with Uttar
Pradesh.
2. L G Electronics, with 1200 service centers, has already recruited
300 students and plans to beef up the number to 10,000 by the
year-end.
3. "The company has offered a scholarship to the selected students
for the last six months of their training program,"
4. The company will invest Rs 8 crore (Rs 80 million) in employee
development program this year with an aim to attain a 8 per cent
attrition rate.
5. The company moved away from the discounting strategy since
last year and is putting thrust on the quality and service in its
brand communication to position LG as a premium consumer
electronics brand.
6. At the top, the Service Division in Korea reports to the Global
CMO. (as mentioned in Dermot’s public interview in ET on
Wednesday). This shows commitment that Service must be made
into a marketing differentiator, and leveraged thus.
7. LG has the widest service network across the country; some
estimates put it at a significant multiple of service-infrastructure
from our nearest competitor. While the sale size may also be a
nice multiple from nearest, it shows the company is ready to put
our money where our mouth is.
8. The company has introduced a 211 service - once you register
your complaint, we will call you back in 2 hours (hence 2), set up
an appointment for the next convenient day for you (hence the
first 1), and show up in the promised 1-hour slot (hence the
second 1). If the next convenient day for you is the next day,
that’s great too. It’s a disruptive action in an industry (including
LG) having traditionally shied away from
its service responsibilities, and thus not leveraging any mileage
from it.
9. The company is promoting 211 through ATL, probably the first
time after sales service is being communicated in this fashion by
any product company. You may have seen the TV commercial or
heard the radio advert or seen the newspaper ad or in-shop
posters, both of which revolve around prompt response.
10.The first LG-owned service centre opened in Gurgaon. (Service
in India generally works through authorized service centers, in
LG’s case they work exclusively for LG.) A company-owned
service centre tries that much harder, knows things better, and
can even contribute as a revenue center.
Objective of the project

Primary objective
 The main objective of filed survey during the project was to
find out the market share of the LG and also calculate the display
share.
 Find out the positional dealer who can sale the LG product in
large volume.
 The main objective of research was to identify potential dealer
and development these dealer. So LG can make them their direct
dealer.
 This will ease the dependence on the some big dealer like
Maharashtra and Mahaveer electronics.
 Find out the problem faced by the dealer in sales and the
distribution.
Secondary objective
 The Objective was to find out that how far the exhibitions are
helpful in branding,
 While purchasing the consumer durables which parameter is
most important for the consumer?
 Do the consumers prefer the financial facility for buying
consumer durable?
 How frequently consumers change the consumer durable?
 To enhances the knowledge of consumer durable market.
 To increases the knowledge consumer durable product of LG.
 To enhances the knowledge about the marketing and branding
activity.

Research Methodology:
Research methodology is considered as the nerve of the project.
Without a proper well-organized research plan, it is impossible to
complete the project and reach to any conclusion. The project was
based on the survey plan. The main objective of survey was to
collect appropriate data, which work as a base for drawing
conclusion and getting result.
Therefore, research methodology is the way to systematically
solve the research problem. Research methodology not only talks
of the methods but also logic behind the methods used in the
context of a research study and it explains why a particular
method has been used in the preference of the other methods

Research design

Research design is important primarily because of the increased

complexity in the market as well as marketing approaches
available to the researchers. In fact, it is the key to the evolution of
successful marketing strategies and programmers. It is an
important tool to study buyer’s behavior, consumption pattern,
brand loyalty, and focus market changes. A research design
specifies the methods and procedures for conducting a particular
study. According to Kerlinger, “Research Design is a plan,
conceptual structure, and strategy of investigation conceived as to
obtain answers to research questions and to control variance.

Type of research is Descriptive Research

The type of research adopted for study is descriptive. Descriptive
studies are undertaken in many circumstances when the
researches is interested to know the characteristic of certain group
such as age, sex, education level, occupation or income. A
descriptive study may be necessary in cases when a researcher is
interested in knowing the proportion of people in a given
population who have in particular manner, making projections of
a certain thing, or determining the relationship between two or
more variables. The objective of such study is to answer the “who,
what, when, where and how” of the subject under investigation.
There is a general feeling that descriptive studies are factual and
very simple. This is not necessarily true. Descriptive study can be
complex, demanding a high degree of scientific skill on part of the
researcher.
Descriptive studies are well structured. An exploratory study
needs to be flexible in its approach, but a descriptive study in
contrast tends to be rigid and its approach cannot be changed
every now and then. It is therefore necessary, the researcher give
sufficient thought to framing research.
Questions and deciding the types of data to be collected and the
procedure to be used in this purpose. Descriptive studies can be
divided into two broad categories: Cross Sectional and
Longitudinal Sectional. A cross sectional study is concerned with
a sample of elements from a given population. Thus, it may deal
with household, dealers, retail stores, or other entities. Data on a
number of characteristics from sample elements are collected and
analyzed. Cross sectional studies are of two types: Field study
and Survey. Although the distinction between them is not clear-
cut , there are some practical differences, which need different
techniques and skills. Field studies are ex-post-factor scientific
inquiries that aim at finding the relations and interrelations
among variables in a real setting. Such studies are done in live
situations like communities, schools, factories, and organizations.
Another type of cross sectional study is survey result, which has
been taken by me. A major strength of survey research is its wide
scope. Detail information can be obtained from a sample of large
population .Besides; it is economical as more information can be
collected per unit of cost. In addition, it is obvious that a sample
survey needs less time than a census inquiry. Descriptive research
includes survey and fact finding enquiries of different kinds of
the major purpose. Descriptive research is description of the state
of affairs, as it exists at present. The main characteristic of this
method is that the researcher has no control over the variables; he
can only report what has happened or what is happening. The
methods of research utilized in descriptive research are survey
methods of all kinds including comparative and co relational
methods. The reason for using such needs to be flexile in its
approach, but a descriptive study

BRANCH
1 2 3 in contrast tends to be rigid and its approach cannot be
changed ever now and then.
DEALER MANAGEMENT
Mapping of regional dealers.
They have been divided into three categories on the basis of their
turnover and the selling capacity.

 -1
 -2
 -3
-1 Includes the modern trade and they have direct billing from
the branch office. They have high turnover and the company
depends heavily on them-2 includes the distributors. They have
direct billing from the branch office. Their turnover is also high.
-3 Includes the sub dealers .They have direct billing from
distributors or from the branch office. Their turnover is not so
high, but there are few sub dealers whose potential is quite high.
According to sales the branch has designated as gold and silver
sub dealers.

OBJECTIVE OF THE STUDY

The objective was to find out the market share of LG products,
advantages and disadvantages of LG products from dealers and
to find out what problems they are facing with the LG products
so that problems can be resolved to increase the sale.

Data collection methods:

After the research problem, we have to identify and select which

type of data is to research. At this stage; we have to organize a
field survey to collect the data.
One of the important tools for conducting market research is the
availability of necessary and useful data.
Primary data: For primary data collection, we have to plan the
following four important aspects.
 Sampling
 Research Instrument
 Secondary Data - The Company’s profile, journals and various
literature studies are important sources of secondary data.
 Data analysis and interpretation
1. Questionnaires
2. Pie chart and Bar chart
Questionnaires:
This is the most popular tool for the data collection. A
questionnaire contains question that the researcher wishes to ask
his respondents which is always guided by the objective of the
survey.
Pie chart:
This is very useful diagram to represent data , which are divided
into a number of categories. This diagram consists of a circle of
divided into a number of sectors, which are proportional to the
values they represent. The total value is represented by the full
create. The diagram bar chart can make comparison among the
various components or between a part and a whole of data.

Bar chart:
This is another way of representing data graphically. As the name
implies, it consist of a number of whispered bar, which originate
from a common base line and are equal widths. The lengths of the
bards are proportional to the value they represent.

Preparation of report:
The report was based on the analysis and presented with the
findings and suggestions. The sample of the questionnaires is
attached with the report itself.

Sampling Methodology:
Details of the sampling methodology, I have made questionnaire.
The one is made for the Customer.
No. of questions in questionnaires for customer: 07
No. of question related to LG product: 03
No. of people met during the research: 200
No. of respondents during the research: 50
Sample unit Professionals, Business man,
Employees, House wife, Working women, Students
Analysis:
Q1. Have you purchased any consumer durable during
Exhibitions?
 Yes
 No
Inferences
1. 65 % of Customers have not purchased any consumer durable
from exhibitions.
2. Only 35 % people have purchased.
3. It shows that consumers are coming in the exhibition for
knowledge of product and also they want to know that weather
there is actual price difference in exhibition and shop or not.
4. Consumers also want to compare to the different brand which
are available in the exhibition.
5. So exhibitions are more useful to increases brand awareness.
6. People are less interested to purchase product from the
exhibition.

Q.2While purchasing consumer durable which parameter

influences you?
 Price
 Product feature
 Brand
 Service
 Durability
Inference
1. 30% of customer gives importance to price. So it shows that
Indian consumers are very price sensitive. They give more
importance to price over the brand.
2. 26% give importance to brand. So price and Brand matter a lots
for the costumers. And they are also want best brand in best
price.
3. 19% to product feature Service 16% and durability 9% Service is
also a big factor for the customer they are less interested in the
durability.

Q3. From where you prefer buying consumer durables

 Exhibitions
 Co.shoppee
 Showroom
Inference:
1. A majority of customers prefer to buy from showrooms. Very
less proposition of customers buys from Exhibitions.
2. 47% customers are prefer to by from the showrooms because
the showrooms are more convenient to customers they also think
that these shops give more discounts.
3. People are less interested to buy from the exhibition they only
visit the exhibition for price quotation of the product and the
comparison of the product.

Q.4.You prefer to buy from the same as you have mentioned in

Q.3 because of following reasons
 Attractive Price
 Service
 Demonstrations
 Offers

Inference
1. Customers buy from showrooms because of the service and
convenience.
These are two main factors.
2. Customers are preferred to buy from the showroom because of
they think that these convenient store may provide good after sell
service.
3. Customer also thinks that there is more chance to bargain and
they can get more discounts in these showrooms.
4. Price also a factor that attract the customer in these showrooms.

Q.5.Which consumer durable you have and of which brand?

 CTV
 LCD
 PLASMA
 REF
 WM
 MW
 AC
Inference
In CTV section maximum customers have Onida, in LCD Sony is
the leader, In plasma BPL is the leader, In Ref LG is the leader,
MW LG is the leader. In WM there are companies and in AC also.

Q.6. How frequently you change your consumer durables?

 1-3 years
 3-5 years
 5-10 years
 More than 10 years

Inference
1. Customers prefer to change consumer durables within 5-10
years. In India people do not change consumer durable
frequently.
2. 23% customers do not change their consumer durable within 10
year.
3. It represent that Indian consumer do not prefer to change their
consumer durable frequently.

Q.7.Do you prefer any financing scheme to purchase consumer

durables?
 Yes
 No
Inference
Majority of customers do not prefer any financial scheme.
Dealer survey Findings
1. By calculating the display share we found that in most of store
LG has
50% display share almost all categories.
2. By the actual monthly sale of particular store we came to know
the
capacity of the store and how much product can they sale.
3. It helps us to know that weather dealer is capable of being a
direct dealer
of LG or not and it also helps to find out the new dealer who are
capable
of being the dealer of LG.
4. We also came to know while visiting the shops that there was
big problem
of after sale service.
5. Many dealers were facing the problem of after sale service
because there
is no follow up calls from LG.
6. Demo calls also not done properly.
7. The top competitor of LG product in is SAMSUNG.
8. In area the performance of LG is in better position but the
competitor also hold closer margin.
9. There is high growth of sale in market due to booming in new
technology and better service.
10.Word of mouth plays a vital role in awareness among
customer. This is one factor, which can play a good role in
promotion of products as well as demonstration given by the
shopkeeper also plays a vital role for customer.

RECOMMENDATIONS AND SUGGESTIONS:

1. LG should improve it’s after sale service because its hits badly
LGs market share in region.
2. More detailed customaries service is to be provided.
3. The training to in shop demonstration should be given at
frequent time interval and feed back should be considered
positively.
4. The company should look into the matter of person hiring for
in shop demonstration. A big LG showroom should have at least
2 such kind of person.
5. LG should try new dealer who have the potential. So they can
target more market.
6. As there is a bottle neck competition between Samsung and LG,
it is necessary to take measure steps to overcome the area of
downfall in LG with respect to Samsung.
7. The marketing managers should make better relations with
dealers and reputation of the company.
8. Customer considers quality as their first preference, so the
company should give more stress on this.
9. The switching of customer from LG product to other brand is
due to the bed after sell service in shop.
10.The product is well aware and it is on top of mind of customer.

So company should always improve services and update their

technology.

CUSTOMER SURVEY FINDINGS

1. Secondary supports play an important role in the customers
mind and create awareness among the customers. The secondary
support includes Demonstration, Exhibition & Even Sponsors.
2. From the survey it was found out that the majority of
customers don’t buy consumer durables from exhibitions. They
just visit the exhibitions to see the co. latest model.
3. They want to buy from the showrooms or from co. showrooms.
For them service is important .Beside convenience and other
factors service is key factor.
4. Also majority of customers do not want any financing scheme
for purchasing the durables.
5. There was heavy rush on weekends so large numbers of ISD’s
were appointed that day. Also the live demo calls helps in selling.
Exchange offers also generate sale.
6. Customers are also now very choosy in buying the product and
it is important for the company to make loyal customer of their
brand.
7. In survey we found that LG has captured maximum market
share in every category. LG dominates CTV, LCD, and
Refrigerator, and Washing machine, category.
8. LG and Samsung have bottle neck competition in TV and REF.
category.
9. The product is well aware and it is on top of mind of customer.
10.Customers are also now very choosy in buying the product
and it is important for the company to make loyal customer of
their brand.

RECOMMENDATIONS AND SUGGESTIONS

1. Exhibitions do not help to generate so much sells but they
should be conducted regularly. This helps in generating
awareness regarding the product in customers which ultimately
helps in sales.
2. Also it is helps in advertising for the new products. Like in this
exhibition new LCD SCARLET was advertised. Company should
always focus on service.
3. Display share should be increased where there is less than 50%
as LG also believes that “JO DIKHTA HAI WO BIKTA HAI”.
4. Company should try to improve service. No doubt the
company products have technically edge over competitors but in
long run it may hamper the company’s profit.
5. Company should concentrate more on its major drivers LCD,
IT, and GSM. Branding and promotions should be done
effectively as it creates a long lasting image in the mind of
customers.
6. Company should also cater to the needs of sub dealers as some
of the sub dealers have potential of high sales.

LIMITATIONS
Every study has certain limitations. In our study, also there were
certain limitations, which I could not able to solve.
1. The research was conducted in a very small area.
2. Our research work period witness the biggest ups and downs
in product sale of different brands, which affected the perception
of the customer.
This was biggest drawback of my study.
3. Time factor was also important for us. We had limited time for
the research, for which a full-fledged report was insufficient for
me.
4. The customer filled the questionnaire mostly in careless
manner, so it was difficult to make them hold for time.
5. We had only found the upper-middle class family to fill up the
questionnaire, but generally, an average middle class family was
required for the study.
6. The sample size is also very small which represent my research
on consumer behavior
BIBLIOGRAPHY
 www.lgindia.com
 www.google.com
 www.wikipedia.com
 Business world
 Business today
 LG magazine
 Economics times News paper
 Times of India

Consumer survey Questionnaire

Q1. Have you purchased any consumer durable during

Exhibitions?
a) Yes
b) No
Q.2While purchasing consumer durable which parameter
influences you?
a) Price
b) Product feature
c) Brand
d) Service
e) Durability
Q3. From where you prefer buying consumer durables
a) Exhibitions
b) Co.shoppee
c) Showroom
76
Q.4.You prefer to buy from the same as you have mentioned in
Q.3
because of following reasons
a) Attractive Price
b) Service
c) Demonstrations
d) Offers
e) Convenience
Q.5.Which consumer durable you have and of which brand?
a) CTV -------------------
b) LCD -------------------
c) PLASMA -------------------
D) REF -------------------
E) WM -------------------
F) MW -------------------
G) AC -------------------
Q.6. How frequently you change your consumer durables?
a) 1-3 years
b) 3-5 years
c) 5-10 years
d) More than 10 years
77
Q.7.Do you prefer any financing scheme to purchase consumer
durables?
a) Yes
b) No

APPENDIX
A.S.I Area Service In charge
A.S.M Area sales manager
B.S.I Branch Service In charge
CAC Commercial Air Conditioning System
C.S NET Customer Service Net
D.S.C. Direct service centre.
L.H.D Logistics Head of department
R.E.F Refrigerator