A Project Report On A Study on Samsung Electronics Ltd With Special References to Una District

Under The Guidance Of Prof. Shiavli Submitted To Amity Global Business School In Partial Fulfilment Of Master Degree Course In Business Administration (2008-2010) Submitted By Prithviraj Singh

ACKNOWLEDGEMENT

In this project I have made an honest and dedicated attempt to make the research material as authentic as it could. And I earnestly hope that it provides useful and workable information and knowledge to any person reading it. I dedicate this project to my teachers and to the Dealers of Una district who were extremely kind and who at times went out of the way to help me. Without their cooperation it would have perhaps not been possible to research a few places, which I did, within the stipulated time frame.

Prithviraj Singh Jaswal MBA (Marketing) 2008-2010

Preface We look our training at SAMSUNG ELECTRONICS LTD. During the training was to get an overview of the stores in the Una district. It was a firsthand experience to get exposed to the professional set-up and face the market, which was really a great experience.

INDEX Sr.no. 1. 2. 3. 4. 5. 6. Introduction Industry Profile Company Profile Product Profile Objective of Study Research Methodology 1.Primary data 2. Secondary data 3.Sampling 4. Scope of the study 7. 8. 9. 10 11 10. 5.Limitations of the study Theoretical Background of the study Data Analysis Findings Recommendations Conclusion Bibliography Contents Page no.

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 20011-2012. 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 were 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 (C-TV) were no longer considered luxury items. 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. So, the main aim of studying the display patterns and doing a market research on Samsung stores was to know about the various types of point of purchase display activities and what are the main promotion and selling techniques which these stores are using to attract the customer

Indian Consumer durables market used to be dominated by few domestic players like Godrej, Voltas, Allwyn and Kelvinator. But post liberalization many foreign companies have entered into Indian market dethroning the Indian players and dominating Indian market the major categories being LCD, REFRIGRATOR, MICROWAVE OVEN and WASHING MACHINES. India being the second largest growing economy with huge consumer class has resulted in consumer durables as the fastest growing industries in India. LG, SAMSUNG the two Korean companies have been maintaining the lead in the market with LG being leader in almost all the categories. The rural market is growing faster than the urban market, although the penetration level is much lower .The LCD segment is expected to the largest contributing segment to the overall growth of the industry. The rising income levels double-income families and consumer awareness were the main growth drivers of the industries.

INDUSTRY PROFILE 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 were also included in this category. 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, greater disposable income and an overall increase in the level of affluence of a significant section of the population. The industry is represented by major international and local players such as BPL, Videocon, Voltas, Blue Star, MIRC Electronics, Titan, Whirlpool, etc. 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. The key product lines under each segment were as follows. Industry Size, Growth, 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. In the refrigerators market, the frost-free category has grown by 8.3 per cent while direct cool segment has grown by 9 per cent. Companies like LG, Whirlpool and Samsung have registered double-digit growth in the direct cool refrigerator market.

In the case of washing machines, the semi-automatic category with a higher base and fully-automatic categories have grown by 4 per cent to 526,000 units and by 8 per cent to 229,000 units, respectively. In the air-conditioners segment, the sales of window ACs have grown by 32 per cent and that of split ACs by 97 per cent. Since the penetration in the urban areas for these products is already quite high, the markets for both C-TV and refrigerators were shifting to the semi-urban and rural areas. The growth across product categories in different segments is assessed in the following sections.

Consumer Electronics The CTV production was 15.10 million units in 2007-08 and is expected to grow by at least 25 per cent. At the disaggregated level, conventional CTV volumes have been falling while flat TVs have grown strongly. Market sources indicate that most CTV majors have phased out conventional TVs and have been instead focusing more on flat TVs. The flat segment of CTVs now account for over60 per cent of the total domestic TV production and is likely to be around 65 per cent in 20010-11.High-end products such as liquid crystal display (LCD)and plasma display CTV grew by 400 per cent and 150 per Cent respectively in 200910 following a sharp decline in prices of these products and this trend is expected to continue. The audio/video player market has seen significant growth rates in the domestic market as prices have dropped. This trend is expected to continue through 2009- 2010, as competition is likely to intensify to scale and capture the mass market.

COMPANY PROFILE SAMSUNG Introduction

Our Vision Samsung is guided by a singular vision: to lead the digital convergence movement. We believe that through technology innovation today, we will find the solutions we 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. Its our aim to develop innovative technologies and efficient processes that create new markets, enrich peoples lives and continue to make Samsung a trusted market leader Our Mission Everything we do at Samsung is guided by our mission: to be the best digitalCompany.

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. Their ingenuity will continue to chart Samsungs course as a profitable, responsible global corporation.

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SAMSUNG HISTORY

2008

Named Yoon-Woo Lee as a Vice Chairman & CEO of Samsung Electronics Launched OMNIA phone Completed establishing TV manufactory in Russia Kaluga 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 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 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

2007

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2006

Developed the world's first real double-sided LCD Developed the worlds' first 50nm 1G DRAM Unveiled 10M pixel camera phone Launched "Stealth Vacuum," a vacuum cleaner with the world's lowest level of noises Launched the worlds' first Blu-Ray Disc Player

September, 2005

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. James Damian, SVP, Best Buy and his team handed over the award to Mr. Ravinder Zutshi, Dy MD and Samsung India at the India Retail award function February 2005 November 2004 held in Mumbai on 16th September. Mr. S. H. Oh appointed as the President and Chief Executive Officer of Samsung South West Asia. Samsung received the Golden Peacock Special commendation Certificate for Corporate Social Responsibility (Private Sector) for February 2004 February 2004 November 2003 August 2003 June 2003 December 2002 October 2002 the year 2004 from Mr. Shivraj Patil, Union Home Minister. 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 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)

June 1996 May 1996 December 1995 August 1995

Foundation Stone laid for CTV Factory at Noida, Uttar Pradesh. Launch in South Home Appliances Launch Samsung India Electronics (SIEL) products launched in India. Certificate for commencement of business received by Samsung

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GROWING TO BE THE BEST Samsung India aims to be the Best Company in India by the Year 2006. Best Company in terms of both the internal workplace environment as well as the external context in which the Company operates . Samsung aims to grow in India by contributing to the Indian economy and making the lives of its consumers simpler, easier and richer through its superior quality products. Our aim is to gain technological leadership in the Indian marketplace even as our goal is to earn the love and respect of more and more of our Indian consumers. Samsung in India Samsung India is the hub for Samsungs South West Asia Regional operations. The South West Asia Regional 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, today enjoys a sales turnover of over US$ 1Bn in just a decade of operations in the country. Headquartered in New Delhi, Samsung India has a network of 19 Branch Offices located all over the country. The Samsung manufacturing complex housing manufacturing facilities for Colour Televisions, Colour Monitors, Refrigerators and Washing Machines is located at Noida, near Delhi. Samsung Made in India products like Colour Televisions, Colour Monitors and Refrigerators were being exported to Middle East, CIS and SAARC countries from its Noida manufacturing complex. Samsung India currently employs over 1600 employees, with around 18% of its employees working in Research & Development. SAMSUNG GLOBAL 13

Samsung Electronics is a global leader in semiconductors, telecommunications, digital media and digital convergence technologies with 2004 parent company sales of US$55.2Bn and net income of US$10.3Bn. Employing approx. 113,000 people in over 90 offices in 48 countries, the company has of 5 main business units: Digital Appliance Business, Digital Media Business, LCD Business, Semiconductor Business and Telecommunication Network Business. Recognized as one of the fastest growing global brands, Samsung Electronics Corporation is the worlds largest pro ducer of Colour Monitors, Colour TVs, Memory Chips and TFT LCDs. Customized products for Indian Consumers Samsung understands the local cultural sensibilities to customize its products according to the Indian market. It has set up a usability lab at the Indian Institute of Technology in New Delhi to customize Samsung products to meet the specific needs of Indian consumers. This industry-institute partnership is helping Samsung to study and analyze consumer response in aspects of product design, including aesthetics, ergonomics and interface. Through its research done on consumer preferences in India, Samsung has concluded that Indian consumers want more sound oriented products. Thus, the Samsung televisions for India have a higher sound capacity than their foreign counterparts. For the semi-automatic segment of Samsung washing machines, Samsung has introduced for the first time in India a feature called Super Dry. It is present in three of Samsungs semi automatic models and dries the clothes better than the rest.

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 Samsung washing machines have an additional menu that takes care of the local Indian wardrobes. They also have a memory re-start that takes care of the frequent power failures in India.

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OBJECTIVES OF THE PROJECT

To locate number of Samsung stores in the una region. To study brand ambiance of the stores and their promotion schemes. To have a face to face conversation with the shop owners and get their opinion about Samsung distribution.

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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

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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 buyers 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. Research design specifies methods and procedures for study. In this study the company was interested to know the demand of different consumer durable product, about competitors, and potential for SAMSUNG procedures to be used for the study among retailers/dealer and. However it was exclusively personal interview. Data Collection: This report was prepared after collecting data from the retailers/ dealers and past data was arranged from the various studies conducted in last few years and various other records of company. Primary Data: These data were collected by personal interview with retailers/ dealer. For this purpose questionnaires were prepared in such that all necessary data would be collected. Secondary Data:

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Information regarding the project, secondary data was also required. These data were collected from various past studies and through internet. SAMPLING METHOD Random Sampling method

SAMPLE SIZE 20 Dealers Research tools: Questionnaires and discussions RESEARCH AREA UNA DISTRICT-

Scope of the study This project gives us great exposure to the distribution and display patters of the company in rural areas because it includes product knowledge and field survey job in which we visited the Samsung stores in Una.

While visiting the shops we 1. Calculated the display share of the SAMSUNG product in shop. 3 Found out the problems that the dealer were facing while selling the SAMSUNG product. 4. Found out the customer response for SAMSUNG products by asking the owner of the shop.

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5. Talked about the after sale services of the company. 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 has reach $450 billion in 2010 3. India has the youngest population amongst the major countries. There were 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 were 56 million people in middle class, who were earning us$4,400US$21,800 a year. And there were 6 million rich household in India. 5. The upper-middle and high-income household in urban areas were 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 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. compared to other

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Threats 1. Higher import duties on raw materials. 2. Cheap imports from Singapore, China and from other Asian countries. LIMITATION OF STUDY Although I tried my best in preparation of this project, but this study has some limitation: 1. The period of the project was not sufficient to study all the factors in deep. 2. Visiting various places for the study consumed a lot of time. 3. We cannot say that what the owners have revealed will be right for each and every situation because their perception is influenced by many factors. 5. Some of confidential information viz. credit period, schemes, policies and sales figure were not disclosed by the competitors. 6. Some of the problems may not have been reveled because we came from the company headquarters. 7. Due to heavy rains accessibility to some parts were very difficult.

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Theoretical Background of the study

Scope of market research in view of modern global business. Research methods provide you with the knowledge and skills you need to solve the problems and meet the challenges of a fast-paced decision-making environment. Business research courses are a recognition that students in business, not-for-profit, and public organizations in all functional areas need training in the scientific method and its application to decision making. Two factors stimulate an interest in more scientific decision making: (1) the managers increased need for more and better information and (2) the availability of improved techniques and tools to meet this need. During the last two decades, we have witnessed dramatic changes in the business environment. Emerging from a historically economic role, the business organization has evolved in response to the social and political mandates of national public policy, explosive technology growth, and continuing innovations in global communications. These changes have created new knowledge needs for the manager. Other knowledge demands have arisen from problems with mergers, trade policies, protected markets, technology transfers, and macroeconomic savings investment issues. The trend toward complexity has increased the risks associated with business decisions, making it more important to have a sound information base. Increased complexity means there are more variables to consider. The competition is more vigorous, with many businesses downsizing to make competitive gains. Workers, shareholders, customers, and the public are better informed and more sensitive to their self-interest. Government continues to show concern with all aspects of society. Each of these factors demands that managers have more and better information upon which to base decisions.

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To do well in such an environment, you will need to be equipped with an understanding of scientific methods and a means of incorporating them into decision making. You will need to know how to identify good research and how to conduct it. This book addresses these needs. As the complexity of the business environment has increased, there has been a commensurate, increase in the number and power of the tools to conduct research. There is vastly more knowledge in all fields of management. We have begun to build better theories. The computer has given us a quantum leap in the ability to deal with problems. New techniques of quantitative analysis take advantage of this power. Communication and measurement techniques have also been enhanced. These trends reinforce each other and are having a massive impact on business management.

Sources of collection of primary and secondary data for market research. The sources may be classified as either internal (organizational) or external sources of information. Internal Sources Internal sources of organizational data are so varied that it is difficult to provide generalizations about their use. Accounting and management information systems create and store much of the internal data, research and development, planning, and marketing functions also contribute. Examples are departmental reports, production summaries, financial and accounting reports, and marketing and sales studies. The collection methods used are unique to the specific situation, and collection success depends on knowing just where and how to look. Sometimes the information may exist in central files (i.e., at headquarters), in computer database, or in departmental chronological files.

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In other organizations, a central library keeps all relevant information. Systematic searches should be made through exploratory interviews with everyone who handles the information. Often company librarians, MIS, PR/communications or departmental secretaries can help in pinpointing critical data sources. Internal data sources may be the only source of information for many studies.

External Sources
External sources are created outside the organization and are more varied than internal sources. There are also better defined methods for finding them. This discussion is restricted to published sources, although other sources of information may be useful. Published sources of data can be classified into five categories. The newest and fastest growing one is computerized database. They are composed of interrelated data files. The files are sets of records grouped together for storage on some medium. Access may be through online search or CD-ROM. Online databases are often specialized and focus on information about a particular field. Major source of published information consists of diverse materials from special collections. Within this category there are many reference books, each a compendium of a range of information. A second group includes university publications, of which there are masters theses, doctoral dissertations, and research records. A third group includes company publications such as financial reports, company policy statements, and speeches by prominent executives, sales literature, product specifications, and many others. There are miscellaneous information sources consisting of the productions of various trades, professional and other associations. These organizations often publish statistical compilation, research report, and proceeding of meeting.

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Data Analysis and Interpretation

Table No.1 Sr. No. 1 2 3 4 5 6 Total number of display items in all stores PRODUCT T.V. LCD Washing machine Micro wave Fridge AC Total NO. OF RESPONDENTS 208 156 173 92 213 55 897

INTERPRETATION:According to the survey the mast displayed product of Samsung was fridge and the least on the display was AC

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Table No.2
Si.no Major parameter for sales 1 Quality 2 Price 3 Discounts Total respondents 7 4 9 20

INTERPRETATION:According to the survey quality is the major parameter which the dealers think helps in increasing the sales, whereas price is considered the least important parameter for sale of Samsung products.

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Table No.3 Shows Suggestion from dealers for SAMSUNG to increase the business Sr. No. 1 2 3 5 6 SUGGESTION FAST AND REGULAR AFTER SALES SERVICE REDUCE PRICES INCREASE DEALER MARGIN IMPROVE QUALITY REGULAR SCHEMES TOTAL NO. OF RESPONDENTS 3 3 4 1 8 20

INTERPRETATION:The survey shows that regular schemes are what mast of the stores want from the company. Also mostly all the dealers are happy with the quality of the product.

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Table No.4 People think Samsung to be a better brand than its competitors
Si.no Samsung better brand 1 Yes 2 No respondents 13 7

INTERPRETATION:Most of the dealers think that customers think Samsung as a better brand than others the main reason being the quality.

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Table No.5 People pay more for quality

Si.no people pay more for quality 1 Yes 2 No respondents 11 9

INTERPRETATION:11 dealers think that people pay more for the quality of the product. Although these stores are in the more developed are of Una region. In the less developed region people dont pay more for the quality.

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Table No.6 Reason for L.G. greater market share

Si.no 1 2 3 4 Why L.G. has a greater market share Ouality Price Promotion Brand Image respondents 7 5 8

INTERPRETATION:Price and brand image are the two main parameters due to which L.G. is more successful in the market

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FINDING 1. We came to know while visiting the shop all of the dealers sold entire consumer durable product including TV, Refrigerator, Washing Machine, Microwave oven. 2. We came to know that during the survey in consumer durable industry in Una district and rural area of Una district that there is a huge market for the product it Samsung gets the contract from army to sell products in their canteen. 3. Study shows that quality is most important parameter for quality sale of Samsung products and then price is considered by consumers. 4.All the dealers were not satisfied with the profit margin. 5.SAMSUNG product is costly as compare to LG and VIDEOCON. 6.Maximum rural area is covered by the VIDEOCON because of their low price products. 7.We came to know while visiting the shops that there was big problem of after sales service. 8.Many dealers were facing the problem of after sale service because there is no follow up calls from Samsung. 9.Demo calls also not done properly.

10. LG and Videocon is the main competitor of Samsung.

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11. Advertising of Samsung CTV is more effective as compare to the competitors. SUGGESTIONS &RECOMANDETION

Company should improve the after sales service of products as it is the main factor for the sales of consumer products.

If the SAMSUNG Ltd. reduces their product price like LG and VIDEOCON then SAMSUNG will take over the LG in all categories.

Company should distribute free key chain, calendar, t-shirts for making brand popular among people.

Company should introduce low price and low power consumption Refrigerator for acquiring the middle income group.

Advertisements of the companys products should focus on quality rather then price.

Company should target upper middle class or premium class customers. Company should introduce low cost products to satisfy the needs of low or middle class.

Demo calls as well as follow up Help Company to maintain customer relationship and hence the company should focus on these aspects.

SAMSUNG ltd. should concentrate on after sales service. SAMSUNG ltd. should try to trap the rural market. SAMSUNG ltd. Establish the service center in hamirpur region. More awareness should be spread in less developed areas about the quality and its importance.

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Conclusion

With respect to the above study and the findings thereby, the company has definitely entrenched into the urban market.

With few more concerted efforts, the said organization needs to enter the rural market in order to completely establish itself all over.

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ANNEXURE A. Questionnaire

Study of Consumer Durable Market for SAMSUNG Electronics Ltd. With Special reference To Una district. Name of shop: Address: Contact no.:

1) What is the important parameter for more sales of Samsung? Price Quality Offers 2) Who is the major competitor of Samsung? L.G. Videocon Others________ 3) Display items T.V.______ Micro wave LCD____ Fridge_______ Whirlpool Kenstar

Washing machine______ AC_______

4) Do people think Samsung to be a better brand than its competitors? Yes No

5) Do you think people are ready to pay more for better quality? Yes No

6) What is the major reason of L.G. having a greater market share? Quality Price Promotion Brand image

7) What are your suggestions for SAMSUNG to increase the sales? _________________________________________________________

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B.

LIST OF DEALERS:Name of the store Shakti Traders Kathuria electronics Amandeep electronics Saliya electronics Name of the owner Madan Dhiman Ravi Amandeep Mukesh parmar

Si.no 1 2

3 4 5 Manoj Electronics 6 7 8 9 10 11 12 13 14 15

Boathara Electronics Hari-Om(Next) Sai-Sakshi Electronics Sushil Electronics Jupiter Appliances Shubham Electronics Kirti Electronics Pankaj Electronics NRTV ceter SukheerElectronics

Manoj Kumat Subhash Bothara mahesh Umesh Shinde Pravin Lodha Bharat N.D. Sanjay Sanghvi Sumit Kochar Amol Sangvi
Pramod Patil

16 Ashoka Electronics 17 Patwa Electronics 18 Shivam Electronics

Sai-Parth
19 Electronics 20 Jagdish Electronics

Sukhbeer Jitendra Gujrani Rushabh Patwa Narendra Deore Jayant Deopurkar

Rajendra Rathi

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B). Bibliography 1- http://www.samsung.com/in/aboutsamsung/index.html 2- http://www.samsung.com/in/aboutsamsung/corporateprofile/index.html 3- http://www.samsung.com/in/aboutsamsung/corporateprofile/history.html 4- http://www.samsung.com/in/aboutsamsung/corporateprofile/visionmission.html 5- http://www.samsung.com/in/consumer/index.html 6- Personal interview with dealers.

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