Market Analysis of LG Consumer Durables & Dealer Development

Market Analysis
MA
of LG Consumer Durables & Dealer Development
A Project Report On
Market Analysis of LG Consumer Durables & Dealer Development
By
Hiba Naseer
MBA PROFESSIONAL (3.5) (SESSION 2014-2019)
School of Business & Management Sciences
Minhaj University, Lahore
August 2019
School of Business & Management Sciences,Minhaj University 1

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Market Analysis of LG Consumer Durables & Dealers Development
Final Project Submitted to the School of Business & Management Sciences
In Partial Fulfillment of the requirement for the Degree of Masters of Business

Administration (MBA Professional 3.5)
Introduction of Research Scholar Introduction of Supervisor
Name: Hiba Naseer Name: Muhammad Saleem Zia
Roll No: 01 Designation:Lecturer School of Business

& Management Sciences
Class: MBA(3.5) Professional
Session: 2014-2019
School of Business & Management Sciences
Minhaj University, Lahore
August 2019

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DECLARATION
I hereby declare that this submission is my own work and that, to the best of my knowledge and
belief, it contains no material previously published or written by another person nor material which
has been accepted for the award of any other degree or diploma of the university or other institute of
higher learning, except where due acknowledgment has been made in the text.
Signature _______________
Name: Hiba Naseer
Reg.No.2014F-mulmba-35-006
Date:____________________

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PROJECT COMPLETION CERTIFICATE
It is certified that the project entitled (A Project Report on Market Analysis of LG Consumer
Durables & Dealer Development) has been completed by MS. Hiba Naseer Registration No.
2014F-mulmba-35-006 under my supervision. It is also certified that the project based on
original research work and meets all criteria and standards laid down for MBA (3.5) degree.
The following areas have been critically monitored:-
1. Conformance to APA Format.

2. Precision & Correctness of the language.
3. Literature Review is relevant and comprehensive.
4. Relevance of references with the text.
5. Methodology and Estimation techniques are appropriate.
Name & Signature: - ------------------------
Designation:- -----------------------------
Date: _______________

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SCHOOL OF BUSINESS & MANAGEMENT SCIENCES
MBA (3.5) FINAL PROJECT AND DEFENSE APPROVAL SHEET
The undersigned certify that they have read the following project, examined the defense and are
satisfied with the overall exam performance, and recommend the project to Department of
Business Administration for acceptance.
PROJECT TITLLE
Market Analysis of LG Consumer Durables & Dealer Development
Submitted by: Hiba Naseer Registration #:2014F-mulmba-35-006
Masters of Business Administration (3.5) (Professional)
Degree in Full MBA (3.5) Professional
Specialization (Marketing)
Name of Discipline
Mr.Muhammad Saleem Zia
Name of Research Supervisor Signature of Research

Supervisor
Dr. M Zeeshan Zafar
Name of Head SBM Signature of HOD

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DEDICATION
I dedicate this research project to my Honorable Parents for their endless support, prayers,
guidance, moral support and inspiration towards knowledge served as a beacon of light. Their
encouragement and prayers strengthened me at every step of my life. So I can’t pay back to them
what they did for me.

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ACKNOWLEDGEMENT
First of all I would like to say thanks to Allah Almighty for providing me the strength, Courage,
direction and skills to learn, acquire knowledge and the ability to accept and meet challenges.
Secondly I would like to thank all those who have helped in performing this research project
especially my respected supervisor Mr. Muhammad Saleem Zia (Lecturer School of
Management Sciences, Minhaj University Lahore). I hope this project will be beneficial for every
knowledge loving individual. We found it to be a challenging project that gave us a real
practical exposure to the corporate world and it is almost impossible to do the same without the
guidance of people around us.it gives us immense pleasure to acknowledge LG ELECTRONICS
Ltd.

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A Project Report On
Market Analysis Of LG Consumer Durables & Dealer Development

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Executive Summary
LG Electronics is part of the fourth-largest Chaebol in South Korea (LG Corporation) and in
2014 global sales reached $55.91 billion (₩ 59.04 trillion), LG comprises four business units:
Home Entertainment, Mobile Communications, Home Appliances & Air Solutions, and Vehicle
Components, With Starion India as its main production vendor for refrigeration and washing
machines in the Indian subcontinent. LG Electronics owns Zenith and controls 37.9 percent of
LG DISPLAY and since 2008, LG Electronics remains the world's second-largest
LCD television manufacturer. The company has 128 operations worldwide, employing 83,000
people. Haniska International is a multinational company, located in Korea. LG is an agent of
Haniska International in Pakistan market. LG is an importer of home appliances in Pakistan. It
imports Refrigerators, Air Conditioners, Washing Machines & Microwave Ovens from Korea
and China. LG has got around 300 dealers all over the country. Marketing objectives of L.G are:
to provide world class product to upper and upper middle class to enjoy real luxury in their life.
Present Market Share of L.G product is: Refrigerators 4%, Washing Machines 2%, Microwave
Oven 3%, Chest Freezers nil, Air Conditioners 25%.LG Electronics’ brand recognition in the
global consumer electronics market has increased exponentially in the past two years. The
company successfully achieved “Global Top 3” status in almost every business area in the first
quarter of this year. Much of this success can be attributed to LG Electronics’ commitment to
drive “Innovation” and “Globalization”. LG Electronics is re-inventing its global procurement
organization from highly decentralized to center-led, establishing streamline procurement
leadership across five business units (companies) and eight regions. LGE’s procurement is
currently comprised of 2,200 staff who are part of an 84,000-strong workforce in 115 operations
globally, managing US$26 billion direct spend and US$10 billion general spend, led by Tom
Linton, Executive Vice President and Chief Procurement Officer. The profitability of LG

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Electronics is heavily dependent on procurement’s performance and efficiency since its spend
represents 80 percent of revenues. LG Electronics procurement is re-positioning the organization
to a new level while maintaining its focus on high quality manufacturing and becoming a global
top brand. 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. Consumer durables major LG
Electronics India Pvt Ltd (LGEIL) will invest nearly Rs 500 crore in India this year in research
and development, brand-building and other marketing initiatives. The company, having a
turnover of Rs 9,500 crore and market share of 26 percent, 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’s innovative
‘211 campaign’ to provide quality after-sales service, will also be expanded from the existing 22
to 40 cities.

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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 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

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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.

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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.

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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

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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

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

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1958-1960
In 1958, LG Electronics was founded as GoldStar (Hangul). It was established in the aftermath
of the Korean War to provide the rebuilding nation with domestically-produced consumer
electronics and home appliances. LG Electronics produced South Korea's first radios, TVs,
refrigerators, washing machines, and air conditioners. GoldStar was one of the LG groups with a
brethren company, Lak-Hui (pronounced "Lucky") Chemical Industrial Corp. which is now LG
Chem and LG Households. GoldStar merged with Lucky Chemical and LS Cable on 28 February
1995, changing the corporate name to Lucky-Goldstar, and then finally to LG Electronics.
1970-1990
LG Electronics earned US$100 million in revenue from exports for the first time in its history.
Rapid growth by globalization saw the company establish its first overseas production, based in
the United States, in 1982. In 1994, GoldStar officially adopted the LG Electronics brand and a
new corporate logo. In 1995, LG Electronics acquired the US-based TV manufacturer Zenith.
Also in that year, LG Electronics made the world's first CDMA digital mobile handsets and
supplied Ameritech and GTE in the US. The company was also awarded UL certification in the
US.In 1998, LG developed the world's first 60-inch plasma TV, and in 1999 established a joint
venture with Philips – LG.Philips LCD – which now goes by the name LG Display.
2000 present
In order to create a holding company, the former LG Electronics was split off in 2002, with the
"new" LG Electronics being spun off and the "old" LG Electronics changing its name to LG EI.
It was then merged with and into LG CI in 2003 (the legal successor of the former LG Chem), so
the company that started as Goldstar does not currently exist.

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LG Electronics plays a large role in the global consumer electronics industry; it was the second-
largest LCD TV manufacturer worldwide as of 2013. By 2005, LG was a Top 100 global brand,
and in 2006 LG recorded a brand growth of 14%.Its display manufacturing affiliate, LG Display,
as of 2009 was the world's largest LCD panel manufacturer.In 2010, LG Electronics entered the
smartphone industry. Since, LG Electronics continued to develop various electronic products,
such as releasing the world's first 84-inch ultra-HD TV for retail sale
On 5 December 2012, the antitrust regulators of the European Union fined LG Electronics and
five other major companies (Samsung, Thomson since 2010 known as Technicolor, Matsushita
which today is Panasonic Corp, Philips, and Toshiba) for fixing prices of TV cathode-ray tubes
in two cartels lasting nearly a decade.
On 11 June 2015, LG Electronics found itself in the midst of a human rights controversy when
The Guardian published an article by Rosa Moreno, a former employee of an LG television
assembly factory.
At the end of 2016, LG Electronics merged its German branch (situated in Ratingen) and
European headquarter (situated in London) together in Eschborn a suburb of Frankfurt am Main.
In March 2017, LG Electronics was sued for its handling of hardware failures with recent
smartphones such as the LG G4.
In July 2018 Koo Bon-Joon who was the CEO then the vice chairman was replaced by his
nephew implementing "first son-only succession rule". Also involved under the same rule is the
present CEO of LG Corporation (the parent company) Koo Kwang-mo succeeding his father
Koo Bon-moo who died of a brain tumor on May 20, 2018.
In November 2018, LG announced Hwang Jeong-hwan, who took the job as president of LG
Mobile Communications in October 2017, will be replaced by Brian Kwon, who is head of LG's
hugely profitable home entertainment business, from 1 December 2018.

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1958-1969-GoldStar The Electronics Industry Dream
1970-79 GoldStar symbol of The Technolgoy
1980-88 :- INTERNATIONALIZATION

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1989-94 INOVATION
1995-98 GLOBAL LEADERS LG ELECTRONICS
1999-2003-DIGITAL MANAGEMENT

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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.

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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

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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
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.”

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VISION
LG’s vision is to deliver innovative digital products and services that make our customers’ lives
better and easier—happier, even—through increased functionality and fun.
Global Top 3 by 2010
Global Top 3 Electronic/Telecommunication company
GOAL
To deliver on our promise to keep ‘Accelerating Opportunity’ by providing the best

communication products to enrich the human experience.
GROWTH STRATEGY
“Fast innovation, Fast growth”

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STRATEGIES ADOPTED BY THE COMPANY
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.
CORE COMPETENCY
“Product leadership, Market leadership, People leadership”
CORPORATE CULTURE
No excuse, “we” not “I”, Fun workplace

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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.
There are some slogans that has been used.
 "We put people first" (1997–1999)

 "Digitally Yours" (1999–2004)
 "Life's Good" (2004–present)
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.

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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.

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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
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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.

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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

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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
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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.
Product Leadership
We are focusing on six development areas to become the product leader.
1. New Machine

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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.

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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

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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

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• 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
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LG Pakistan:
LG Electronics has taken Pakistani home appliances market more seriously and started its
production in Pakistan in 2016. The Korean consumer electronics company has decided to
establish a network of premium brand shops as well as building a manufacturing facility in the
country with the contribution of its local distributer, Momin Group which also manages the
Dubai region for former as its distributor.
LG which is not included in the list of top sellers of home appliances in Pakistan has started
focusing Pakistani consumer market which is growing steadily and offering a vast potential to
global brands.
Main Electronics players in Pakistan:
Before we discuss about LG’s working & strategies in Pakistan we have to know about its main
competitors.
Local Manufacturers of Refrigerators are: Dawlance, Waves, PEL and Singer. These
manufacturers roughly cater 80% need of the market.
Imported Manufacturers of Refrigerators are: LG, Super, General, Hair, Sam Sung, Indesit,
Semins,

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Parties import product from their principal and market the same in Pakistan. In-fact these all
parties contribute only 20% of the market requirement. The above all are direct competitors of
LG. electronics.
Not included in the list of top sellers of home appliances in Pakistan has started focusing
Pakistani consumer market which is growing steadily and offering a vast potential to global
brands.
Product strategy:
LG's objective is to provide world class product to upper class and upper middle class to enjoy
real luxury in their life. Since LG is a Korean brand and being imported from Korea, it has very
advanced features as compared to local brands in Pakistan, which are normally demanded by in
developed countries.
LG also insures that whatever product they market should be durable enough which last quite
many years and give trouble free service to their customers. It provides its refrigerators, five
years compressor guarantee and one year free service in spare parts under normal use.
After sale services in Pakistan:
As it has been mentioned earlier that LG has got market of refrigerators only in big cities and
some of its big towns in Pakistan. Therefore, they have got relatively lesser number of service
centers as compared to Dawlance.
At present LG has got only eight after sales service centers in Pakistan. From these service
centers LG provides after sales service to each customers. They also maintain spare parts of
serviceable items. Since their products are 90% imported, the souring of spare parts is mostly
import based.
Relatively LG refrigerator's parts are expensive comparative to locally made because LG imports
spare parts from Korea and various other LG production centers. One of the reasons for being
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these parts expensive is that LG's local agent has to pay almost 70% of the product cost towards
import duty, sales tax and other import cost.
Distribution strategy:
Mostly they import from Korea and some of the models are imported from China as well. LG
relatively don't maintain loose stock at their end. Simply based on historical forecast and
feedback of their dealer about the possible demand, they import from their principal.
They ask their dealer to maintain sufficient stock at-least 4-6 week at their end. Rather they
believe in replenishment of dealer stock based on their sales. It means dealers stock always
remain in within a limit, doesn't exceed beyond 6 week level.
As mentioned above, they have only 300 dealers mostly in big cities and some in small towns.
They also have got a policy that retail price all over the country should be uniformed for the
customers, whether he/she buy from Karachi, Islamabad, or Peshawar.
They also bear transportation cost and thus provide supplies at uniform rate to their dealers. They
have got three big warehouses in Karachi, Lahore and in Islamabad. From these warehouses they
feed their product to their dealers and thus they make their product available to them.
Marketing strategy:
As far as Advertising strategy of LG is concerned, it is being planned and executed by LG,

Korea through their Pakistan Office keeping in view their global approach and theme line. Local
Agent of LG simply gives advice and coordinate in its implementation. Since LG is a multi-
national brand, their spending on advertising is in such a way that

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their all product get promoted. Although for different product they have got different agent; like
for TV, New Electronics/Karachi. For computer monitor, Vision Computer. For mobile phone,
Chimera.
It was not possible to get the exact advertising budget of LG, but it appears from their spending
and the figures collected from Pakistan Advertising Association and from some other sources
that their spending is around 6/7 per cent of their sales in Pakistan territory. Due to being a multi-
national company and as a part of their global Strategy they, most of the time, divert their funds
from strong market and spend more on weak or under developed markets.
Further, as far as Sales Promotion strategy is concerned, it is being designed and implemented by
their respective agent of each product in Pakistan. For the promotion of Home Appliances
products: Hanaska International designs their own strategy. Their major approach and emphasis
on promotion through trade. They offer very handsome incentives to their dealers, who in return
push their product among the customer and thus they get their desired volumes in Pakistan. It has
been noted that due to being import base product they are always high price vis-a-vis other
brands in the market and it is one of the reason why they give so much emphasis on the
motivation of dealers.
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.

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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.
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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 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.

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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

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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

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“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:-
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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

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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

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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

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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
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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
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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:

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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.

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BCG MATRIX OF LG COMPANY ACCORDING TO ITS PRODUCTS
BCG Matrix
STARS QUESTION MARKS
(Appliances) (LCD)
CASH COWS DOGS
(Mobile Phones (Oil & Gas Division)

&
Telecommunications)

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BCG MATRIX OF LG COMPANY IN COMPARISON TO OTHER ELECTRONIC

COMPANIES

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SWOT ANALYSIS OF LG COMPANY
 STRENGTH
 Market leader in home appliances segment
 Manufacturing unit in tax incentives areas.
 Wide range of product categories to tap the consumer of

middle class, upper middle class and high class.
 LG having the widest distribution network in the industry (47

branches,175 area offices and over 10,000 trade partners).
 Shifting to the rural market.
 WEAKNESS

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 Consumer compares LG products only with Samsung and not with any other brand.
 OPPORTUNITIES
 Shifting to rural market
 Control over the white goods market, as we know the highest market share in home
appliance market.
 THREAT
 The closet competitor of LG ,Samsung is also from South Korea and consumers
LG product with Samsung products
 Price war with its closest competitors, Samsung
 Competitors from Indian brands and from new entrants

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PRODUCT LIFE CYCLE OF LG
 LG LCD AT INTRODUCTION STAGE (Question Mark).
 LG APPLIANCES IS AT STAR STAGE

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 LG MOBILE PHONES & TELECOMMUNICATION SERVICES IS AT CASH COW

STAGE
 LG OIL & GAS DIVISION IS AT DOGS STAGE
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

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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

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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

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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

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· 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.

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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.

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3- Natural events tracking.
4- Fluctuation in demand-supply Equipments
5- 100% Bar code scanner.
6- ERP – Invoice Generation Process.
7- Hydraulic Trolleys for material movement.
8- 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
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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,"

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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-
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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.

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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.

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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 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.

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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

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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.
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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

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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.

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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

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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.

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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

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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

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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

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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

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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.

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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.
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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 feedback
should be considered positively.

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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.

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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.

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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”.
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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.

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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

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LITERATURE REViEW
Kim. R, “Setting cost targets”(2008),With LG's cell phones, cost targets are set by the LG's
mobile communication business procurement team after meeting with the product planning
division and with R&D. There are target costs for the baseband processors, memory chips and
other semiconductors in the phone. "We want to meet the targets or do better than the target
costs," says Tae Woo Kim, vice president, development procurement team for mobile
communication. "At the end of the day we want to reduce cost," he says. Kim says much of what
procurement engineers do in new product development with mobile phones concerns
semiconductors. That's because 80–85% of LG's spend in the mobile communications business is
for semiconductors. LG makes a variety of smart phones and other cell phones such as the
Chocolate, Incite and Shine.
Kim. R, v” Mapping technologies” He says procurement's involvement in product development

begins with the technology roadmap meetings. LG procurement engineers have with suppliers to
discuss what technologies suppliers may have in the works that might be used in future LG
phones. Kim says buyers have technical meetings to discuss new technologies and compare
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technology roadmaps to see how they match up. Besides new technology that suppliers may be
working on, procurement engineers also talk to suppliers about technology issues such as
packaging changes that may be coming for semiconductors, migration of chips to higher
densities and power consumption issues.
BIBLIOGRAPHY
www.lgindia.com
www.google.com
www.wikipedia.com
Business world
Business today
LG magazine

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Economics times News paper
Times of India
Consumer Survey Questionnaire
Q1. Have you purchased any consumer durable during Exhibitions?
a) Yes

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b) No
Q.2.While 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

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c) Showroom
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 -------------------
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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
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c) 5-10 years
d) More than 10 years
Q.7.Do you prefer any financing scheme to purchase consumer durables?
a) Yes
b) No

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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

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Market Analysis

School of Business & Management Sciences

Minhaj University, Lahore

School of Business & Management Sciences,Minhaj University 1

Market Analysis of LG Consumer Durables & Dealers Development

Final Project Submitted to the School of Business & Management Sciences

In Partial Fulfillment of the requirement for the Degree of Masters of Business

Introduction of Research Scholar Introduction of Supervisor

Name: Hiba Naseer Name: Muhammad Saleem Zia

Roll No: 01 Designation:Lecturer School of Business

School of Business & Management Sciences

Minhaj University, Lahore

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Name: Hiba Naseer

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PROJECT COMPLETION CERTIFICATE

The following areas have been critically monitored:-

1. Conformance to APA Format.

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SCHOOL OF BUSINESS & MANAGEMENT SCIENCES

MBA (3.5) FINAL PROJECT AND DEFENSE APPROVAL SHEET

Submitted by: Hiba Naseer Registration #:2014F-mulmba-35-006

Masters of Business Administration (3.5) (Professional)

Degree in Full MBA (3.5) Professional

Mr.Muhammad Saleem Zia

Name of Research Supervisor Signature of Research

Dr. M Zeeshan Zafar

Name of Head SBM Signature of HOD

School of Business & Management Sciences,Minhaj University 5

School of Business & Management Sciences,Minhaj University 6

School of Business & Management Sciences,Minhaj University 7

Market Analysis Of LG Consumer Durables & Dealer Development

School of Business & Management Sciences,Minhaj University 8

School of Business & Management Sciences,Minhaj University 9

School of Business & Management Sciences,Minhaj University 10

Classification of consumer durables sector

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

School of Business & Management Sciences,Minhaj University 11

2. White goods include dishwashers, air conditioners, heaters,

3. Moulded luggage include plastics

4. Clocks and watches

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

2. Indian consumer durable market is expected to reach $400

3. India has the youngest population amongst the major

4. There are 56 million people in middle class, who are earning

School of Business & Management Sciences,Minhaj University 12

5. The upper-middle and high-income household in urban areas

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

2. Unexploited rural market.

4. Increase in income level, i.e. increase in purchasing power of

5. Easy availability of finance.

1. Higher import duties on row materials.

School of Business & Management Sciences,Minhaj University 13

Brands in consumer electronics sector

MNCs NATIONAL REGIONAL

TCL ) CHINA GODREJ T-SERIES