c




  
 

 



To frame consumer preference for Onida TV so as to improve its position in the Indian market.




 




 
  
The TV market is currently estimated at `11,500 Cr. Approximately 10.5 million TV sets are sold
per year
in India. The market of TV is expected to grow at 9-9.5% in 2010-12.
!" #$
TV sets are the fastest growing category among household durables. 11.5% of Indian homes
bought a TV
set in the last two years. Some of the growth drivers in the TV market are:
‡ !
  

  
%Innovative promotion like exchange offers, free gifts etc.
‡ 

 
  

&Indian middle class is growing in wealth and volume, both.
‡ '(

 

  %With families separating, no. of households needing TVs
increases.
‡ $


(
&More affordable prices resulting in volume sales in low-end markets.
‡ ) 

 

&Attention of consumers is evoked. Also, interest towards
upgrading is
generated. Replacement demand (46% of overall) would be well served by new variants.
‡ *
 (
  &Consumers have abundant choices at the same store. Information
search and
Alternative evaluation while purchasing the TV becomes easy. MTOs will ensure quick sales.
‡ + 
 %Demand for colour TVs usually picks up during the festive seasons.
This period
will continue to be the growth driver for consumer durable companies.
‡ *  %Penetration of CRT TV (CTV) in rural markets is about 17%. 120 million
households in
India still don¶t have CTVs, signifying tremendous potential for TV players in the rural market.
‡ (
 # &More shift towards high-end TVs like Plasma, LCD etc. Flat screens are
demanded
more. Dimension-wise, trend is more towards the mid-size (20 - 25 ) segment as the 14
market is
gradually shrinking. Affluent people and establishments are looking for big-sized TVs now.
‡ '
%ICC world cup and IPL will generate export demand in Sri Lanka, Bangladesh,
Pakistan etc.
cc#  ,Sluggish global economic conditions are making imports (in c



)
cheaper. Of late, rupee is appreciating, which will further bring down the landed cost of imports.
All this
will result in reduced cost ( 
 

c) of the product. The
TV
makers are capitalizing on this by marketing the latest products in India at competitive prices.
$c 
 (,Vasy availability of low-cost skilled labor and the emergence of SV s,
which are taxfree
zones, are some of the key factors that have resulted in growth of these manufacturing units. In
fact,
encouraged by tax-breaks, new manufacturing units are coming up in less-developed regions
now.
'" 


 ,Government spending on rural and small town electrification
program has
increased considerably over the years. More electricity will be available to the people È 


 !"This will spur the demand for electronics products further.

Äc  

-. /  

0
#  

(
* 
Competition is intense in this market with many brands available. There is very little
differentiation in terms
of product performance and technology. Foreign players (#" ) have put further pressure
on
margins. Vntry of Haier (c$ c#) has forayed in India will challenge even the
established players
now. While Mirc Vlectronics (% ) has managed to hold on to its value-for-money strategy;
competition
is from Akai, Panasonic, BPL, Philips, Sansui, Toshiba etc.
#  )'


The TV industry is capital intensive and huge initial investment is required. However, threat of
new entrants
is more because Tax-free zones and low import duty on electronic items is encouraging them to
enter India.
Also, the huge potential for CTV, Flat TV and HD TVs has attracted foreign players. Large
incentives are
required for new players to get recommended by the distribution channel members.
#  
Internet is posing a potential threat as becoming a medium for 
 
"But its penetration is
very low
presently. The TV industry has responded well to this threat by introducing a TV that can
provide functions
of the Internet along with regular features, e.g., BPL digital that includes Internet and cellular
facilities.
#  ! ( 

(.  !
The cost incurred by consumer in switching from one TV brand to another is practically zero.
Brand loyalty
is shrinking. Also, exchange offers are giving consumers more reasons to look for newer
products.
Therefore, every effort should be made to retain customers.
#  ! ( 

(.  
Many manufacturers need to import color picture tubes È


&
&'
$

c!.
As TV market is growing, so is the demand for colour picture tubes (CPT). It provides good
opportunity of
bargain for suppliers. Cheaper imports have rendered local component suppliers with little
bargaining
power. Moreover, since the picture tube has no alternate usage other than TVs, large players
manage to
negotiate good deals with these CPT manufacturers.
†c#
(
#

1c# 
,It is a Buyer's market now. There are plenty of options, both in terms of
brands and the
models. Advent of LCD and now 3-D, has helped in widening the product base of TVs.
!
#
 (
c#
(,Technological changes have helped the boom in the industry. In
recent years,
the market for televisions in India has changed rapidly from the conventional CRT technology to
Flat
Panel Display Televisions (FPTV). The split between CRT and FPTV is around 97:3 and is
likely to be
more towards FPTVs. Vven 3D has made inroads in India now.
The flat panel television (FPTV) market (LCD and plasma TV) is witnessing a phenomenal
growth.
c.

 
,The drop in prices and large scale promotions has managed to maintain
the sales.
Sales have primarily been in the low-budget range (`8,000 - `15,000). Models priced above Rs
20,000
have not been sold in large numbers. Also, brand loyalty is giving way to value-for-money
purchases.
$c#
(
($ ( #
,Good harvest would help improve rural income. Increasing
nuclear families
due to accelerated urbanization is also powering demand for consumer durables such as TV.

'* 



  (

,A shift in consumer preferences towards higher-end,
technologically advanced branded products has been quite discernable. The differential between
the prices
of branded and unbranded products is narrowing. There is growing preference towards foreign
brands as
consumers look for high quality of after sales service provided by the branded players.
2c  

The major players in the TV market are:
‡ LG
‡ Samsung
‡ Onida
‡ Videocon
‡ Sony
TV market is highly consolidated with the top
five players controlling around 3/4th of the market.
Sony and Samsung have very strong presence in
the LCD segment. È
$$ ()$!"
Competitive position as per *
$&
"+

framework ± Favourable.
°3
 
‡ The sector will continue to be characterized by intense competition and onslaught from MNCs.
Players
will go for introduction of state-of-the-art models, price discounts and exchange schemes.
Companies are
likely to promote financing schemes through their dealers even more.
‡ Market shares are expected to consolidate, though at a slower pace. While major industry
players would
continue to play on price in the low-medium range; advertising and promotional spends would
continue to
be an integral part of the players¶ marketing programs.
‡ For improving margins, many players will shift their focus towards Flat TV and higher
segments.È

&($,

$cc(
!
Ö4

+
 -4+0
. 
 ,Companies who have complete range will stand to gain. Also, focus on
multiple
categories will drive success.
!!

(#,In this category, there is very low scope for product differentiation. Brand
awareness
matters a lot in TV purchase.
c % 
,Companies like LG & Sony have been able to hold on to their market
share because
of their extensive service stations. Purchase of TV being a complex-buying process, availability
of service
instills confidence amongst potential consumers (c$#
-#&$ (

&).
'.  

#,Sales are primarily seasonal. Schemes such as Discount, Vxchange
Offers,
Coupons, Free Gifts, and Lucky Draw etc. help to drive the sales.
5



There are many players vying for same market, leading to low net realizations in the industry.
The net
margins in CTV will be around 7-9% while in Flat Panel market, profits will be higher (12-15%).
LG
22%
Samsung
14%
Onida
12%
Videocon
17%
Sony
10%
Others
25%
 # 
- 670
4
c   (
Currently MNCs dominate the Indian TV market with more than 65% market share in the CTV
segment.
MNCs like LG, Sony, Samsung, Phillips and Videocon command a high market share. These
companies are
focusing on product differentiation, value added offerings and exchange offers.
These players have adopted the following strategies to compete on the Indian turf:
‡ . 
3
,These companies (+.&(/$  # ) have a wider
product range
compared to Onida to target customers from all segment.
‡ . 

(,Their Image of a multinational company in the minds of consumer helped them to
grab
market share instantly. It gave a perception that these companies have better technology.
Videocon on the
other hand leveraged its MNC image by it tagline of  0c1"
‡ 
,LG has *$ $23$$, Samsung has *  $, Videocon had
*
$3$$
and now $&2$ $. All these players have used celebrities to a good effect to endorse their
brands.
On the other hand, Onida has an inconspicuous young couple which does not make an impact -
the  
in this case would have been very powerful.
‡ ,The companies are associated with events and sponsorships (+. 
 


$ 2
). This has resulted in better brand visibility.
‡ +

#(#%
 ,Many players have shifted their focus towards higher-end
segments, as the
pricing pressure is high in regular CTV. È
&($,

$cc(
!"
+


 ( 
 
1
 
 

(#
1. High brand recall È$
 !
2. Premium pricing (Price Value Strategy)
3. Good distribution facility
4. High quality LCD TV¶s (Less service
requirements)
5. Strong In Shop Training & Demonstration (ISD)
1 

1. Less promotion
2. Volatility in positioning
3. Weak afterþsales service points
4. Hitherto known for superior technology
5. Not much focus on R&D
 

1. Growing Middle class
2. Replacement market (CRT to Flat screen, LCD)
3. Growing semiþurban and rural market
4. Vasier financial assistance from banks
5. Increase in consumerism leading to increase in
entertainment needs
# 
1. Increased Competition from MNCs
2. High bargaining power of Speciality stores
3. Increase in salary of Technicians in the industry
4. Obsolescence of technology, esp. in LCD
5. Large manufacturers might benefit from their
scale, resulting in owering of prices
)$
5
.

(
 
The
TV market may be segmented based on
$(&in product, e.g. CRT or Flat
Panel. In the flat panel TV segment, sub-segments can be LCD, Plasma and 3-D.

#
 (89
CRT LCD HDTV
$ 

. 9
Videocon, Samsung, Onida, BPL Samsung, LG, Sony Samsung, LG, Sony
Since the lifestyle of consumers matters a lot in the decision of buying TV, they can also be
classified based
on their + 
/
4&È/$(#$ !i.e. based on 3Ä   .
 (
(&Onida should target SVC C and SVC B households with their regular offerings i.e.
CRT TV,
SVC A2 and SVC B1 for higher-end TVs such as LCD. Age-wise, they should focus on the
young and firsttime
buyers. As they graduate to the high end segment, they can target them with its high-end
products.
Out of all VALS-2 segments, they should target Thinkers È$& #&
!and
4elievers
È
2 (  
).
. 

(Onida
TV should be positioned as a medium for entertainment providing advanced
technology at affordable prices. The focus of the company would be to allow those people to
upgrade who
want to upgrade but do not have the means. Target consumers should see it as an aspirational
home appliance.
Onida TV should continue to be µ ($&56 5# 5ƒ
Onida owners are regarded in high esteem ±they are special, and this can act as a strong
differentiator.
. 
3
 (
3
':

,The Company should go for line extension in low-price value segment so as
to target
more customers there. Dimension wise, Onida¶s portfolio should cover more sizes other than
14 , such as
21 , 29 and more.
!LCD market is the fastest growing segment and this is where Onida should focus
immediately. These
products will fetch higher realization than the low-priced TVs. They should launch high-
definition, LVD
TVs. They should continue the USB supported TV which will be a good differentiator to project
its
technological superiority and user-friendly features.
$. 
c ( ,They should develop flat-screen, 29 LCD while continuing regular
21 CRT models.
 
(:-2.0
 (
. 
,Greater focus should be on the LCD TV line. Instead of following the trend, the TVs
should have
really new features, e.g. Ultra slim TV with USB connectivity.
.
,The pricing doesn¶t need to be altered much. They should keep the Landed Retail Price
(LRP) of TVs
the same but give more margins to dealers. The price for 14 and 21 should be kept `600 ±
1,500 more than
Videocon and BPL, so as to maintain its superior image È  (#  

!"In the
LCD segment, the price should be 15-20% less than Sony and Samsung. This will help in
grabbing the
aspirational customers who would not like to spend much in their TV purchase.
.
,They should expand dealer network across market geographies. Also, in their target
markets, they
should establish Onida TV Service & Vxchange stations. They should mploy service employees
at least at
the market rate to bring about confidence in the minds of the dealer and consumers.
6
.  
,They should bargain for more shelf space in speciality stores like Croma, e one etc.
They may
negotiate with discount stores like Big Bazaar for promoting Onida TV. They should also invest
more in
dealer promotions È $$&&
(( #
!.
‡ c
.  
,Promotions like contests, lucky draw, exchange offers etc. will help in
brand
awareness and better brand recall. This way they can capture a good part of replacement demand.
‡ c'
 
,The company can rope in a celebrity to endorse its brand in a fresh
advert. This
way the brand can be benefited from celebrities brand equity. We suggest rope in a sports icon or
a
bollywood star rather than the inconspicuous couple È#
$&
!where the recall
value is poor.
This will also help in better brand awareness.
‡ 
 
#
,To regain old customers and to regain visibility, Association with
events can
help. Onida¶s problem of low visibility will be solved with its sponsorship of events like cricket
matches
(ICC World Cup 2011 & IPL-4), rock shows, other games, marathons etc. È+.-#
cc
c&#7(

& ( 
 &  ("!
‡ 

 
,They should come up with catchy advertisement ahead of Cricket
World Cup
and IPL-4 season. Their decades old l
 5can be portrayed to find a connect with today¶s mid-
age
generation, who are their potential customers.
!

( (
!
. 

(,They positioning strategy is different in each segment, e.g. Onida LCD
TVs are not
as expensive compared to Samsung, LG, Videocon, etc. but among the colour TVs, it is much
more
expensive and considered as a premium product. Consumers don¶t have much clarity about what
does
Onida stand for? There is a disconnect between Brand identity and brand image.
Onida should stick to a uniform positioning strategy (%(6 ) throughout..
Ä!
 (,Vverything is fine with the brand. People recognize the brand. Vven though
exposure is
limited, the brand enjoys immediate recognition. Onida is known as a quality brand of TV in
India. It
needs to only remind the target customers of its rich heritage. It should project itself as a good
quality,
&--brand.
†!
c 


,The Company should go for a better adverting. The company can
rope in a
celebrity to endorse its brand. This way the brand can be benefited from celebrity¶s brand equity.
We
suggest roping in a sports icon or a bollywood star rather than the inconspicuous couple (#

$
&
) where the recall value is poor. 0
$ (&

$
&
$
2
 
(;*,The conversion rate of Onida TV (& (#&$&
) will
be a good
measure of efficiency of the strategy. Communication programs can be evaluated through the
µ$
89&4#
5analysis of Ads. The sales figures will indicate the consumer preference
towards
Onida brand, especially during purchase before World Cup and IPL-4. Unaided recall for brand
salience
can be used.
. ). 
$ 
-).$0
They can also focus on making the product with multi-functionality ("("
$$#$).
Middle class
consumers would welcome a Many-in-one product as TV. New products with future
technologies such as
HD, LVD can be launched.