INTRODUCTION

As rapid socio-economic changes sweep across India, the country is witnessing the
creation of many new markets and a further expansion of the existing ones. India’s
consumer market is riding the crest of the country’s economic boom. The Indian
consumer durables industry has witnessed a considerable change in the past couple of
years. Changing lifestyle with access to disposable incomes, easy finance options and a
surge in advertising has been instrumental in bringing about a sea change in the
consumer behavior pattern. According to a study conducted by FICCI on the Indian
consumer durables industry, a shift in consumer preferences towards higher-end,
technologically advanced branded products has been quite discernable. This shift can
be explained by narrowing differentials between the prices of branded and unbranded
products added with the high quality of after sales service provided by the branded
players. The shift has also been triggered by the availability of foreign branded
products in India owing to lower import duties coupled with other liberal measures as
introduced by the government.

SEGMENTATION OF THE CONSUMER DURABLE INDUSTRY

The Consumer Durables industry consists of durable goods and appliances

for domestic use such as televisions, refrigerators, air conditioners and washing
machines. Instruments such as cell phones and kitchen appliances like microwave
ovens are also included in this category. The consumer durables industry can be
broadly classified into two segments: Consumer Electronics and Consumer
Appliances. Consumer Appliances can be further categorized into Brown Goods and
White Goods.

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 CONSUMER DURABLES
CONSUMER APPLIANCES CONSUMER
ELECTRONICS
WHITE GOODS BROWN GOODS • MOBILE PHONES

• REFRIGERATORS • MIXERS • TELEVISIONS

• WASHING • GRINDERS • MP3 PLAYERS

MACHINES • MICROWAVE O VENS • DVD PLAYERS
• AIR CONDITIONERS • IRON • VCD PLAYERS
• SPEAKERS AND • ELECTRIC FANS
AUDIO • COOKING RANGE
EQUIPMENTS • CHIMNEYS
Source: India Brand Equity Foundation report
Table: Segmentation of consumer durables

INDUSTRY SIZE, GROWTH AND TRENDS

The consumer durables market in India was estimated to be around US$ 5

billion in 2007-08. More than 7 million units of consumer durable appliances have
been sold in the year 2006-07 with colour televisions (CTV) forming the bulk of the
sales with 30 per cent share of volumes. CTV, refrigerators and Air-conditioners
together constitute more than 60 per cent of the sales in terms of the number of units
sold.

THE KEY DRIVERS BEHIND THE GROWTH

The sector has been witnessing significant growth in recent years, helped
by several drivers such as the emerging retail boom, real estate and housing demand,

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greater disposable income and an overall increase in the level of affluence of a
significant section of the population. The key trends that impact the Indian Consumer
Durables Industry today are reflected in the diagram.

Source: India Brand Equity Foundation report

Fig: The key drivers of consumer durable industry

TITLE OF THE TOPIC

“A STUDY ON DISTRIBUTION CHANNEL RELATIONSHIP AND MARKET SHARE ANALYSIS

OF SAMSUNG LCD IN THE TERRITORY OF KOLKATA”, WITH SPECIAL REFERENCE
TO SAMSUNG INDIA ELECTRONICS PVT. LTD.

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 NEED FOR THE STUDY

The basic idea of taking up this study is to analyze the market share of SAMSUNG
LCD TVs in Kolkata sub-dealer market. At the same time, an attempt was made to
understand the distribution channel relationship and the problem faced by the dealers.

OBJECTIVE OF THE STUDY

PRIMARY OBJECTIVES

The primary objective of the study is to analyze the market share and understand
the distribution channel relationship with reference to SAMSUNG ELECTRONICS
INDIA PVT LTD.

SECONDARY OBJECTIVES

To find out the counter share of SAMSUNG LCD TVs.

To find out the counter size of the dealer as well as the different brands kept by
different dealers.

To record who are the major players of LCD TVs.

To find out which is the largest selling model among all the segments?

To know whether the dealer is aware of current pricelist.

To find out whether the dealer is having brochure of the product.

To know what benefits a dealer wants so that he is satisfied in selling the
products.

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 RESEARCH METHODOLOGY

The essential part of any report is research methodology. The field study was
conducted to analyze the market share and understand the distribution channel
relationship.

SAMPLE SIZE
The sample size is 50.

SAMPLE SELECTION
The sample was selected through the simple random technique with a sample of 50
questionnaires.

COLLECTION OF DATA
Data used of this report is mainly primary data, which are collected first hand by
survey in the field. In some area secondary data may also be taken into consideration.

COLLECTION OF PRIMARY DATA

The data was collected through the primary source by survey method using structured
questionnaire and taking respondent’s personal interview.

COLLECTION OF SECONDARY DATA

The data collected from text books, journals and internet.

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 SANSUNG- AN OVERVIEW

The Samsung Group is a multinational conglomerate corporation headquartered in

Samsung Town, Seoul, South Korea. It is the world's largest conglomerate by revenue
with annual revenue of US$173.4 billion in 2008 and is South Korea's largest chaebol.
The meaning of the Korean word Samsung is "Tri-Star" or "three stars".

The Samsung Group is composed of numerous international affiliated businesses, most

of them united under the Samsung brand including Samsung Electronics, the world's
largest electronics company, Samsung Heavy Industries, the world's second largest
shipbuilder and Samsung C&T, a major global construction company.

Samsung has been the world's most popular consumer electronics brand since 2005
and is the best known South Korean brand in the world. Samsung Group accounts for
more than 20% of South Korea's total exports and is the leader in many domestic
industries, such as the financial, chemical, retail and entertainment industries.

HISTORY

In 1938, Lee Byung-Chull founded Samsung, a small trading company with

forty employees located in Daegu. The company prospered until the Communist
invasion in 1950 when he was forced to leave Seoul and start over in Busan. During
the war, Samsung's businesses flourished and its assets grew twenty-fold. In 1953, Lee
started a sugar refinery. The company diversified into many areas such as insurance,
securities, and retail. In the early 1970s, Lee borrowed heavily from foreign interests
and launched a radio and television station.

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Samsung Group later formed several electronics-related divisions, such as Samsung
Electronics Devices Co., Samsung Electro-Mechanics Co., Samsung Corning Co., and
Samsung Semiconductor & Telecommunications Co., and grouped them together
under Samsung Electronics Co., Ltd. in 1980s. Its first product was a black-and-white
television set.

In the late 1980s and early 1990s, Samsung Electronics invested heavily in research
and development, investments that were pivotal in pushing the company to the
forefront of the global electronics industry. “By the 1980s Samsung was
manufacturing, shipping, and selling a wide range of appliances and electronic
products throughout the world”. In 1982, it built a television assembly plant in
Portugal; in 1984, it built a $25 million plant in New York; and in 1987, it built
another $25 million facility in England.

The 1990s saw Samsung rise as an international corporation. Samsung's construction

branch was awarded a contract to build one of the two Petronas Towers in Malaysia,
Taipei 101 in Taiwan and the Burj Khalifa in United Arab Emirates, which is the
tallest structure ever constructed. In 1993 and in order to change the strategy sold off
ten of Samsung Group's subsidiaries, downsized the company, and merged other
operations to concentrate on three industries: electronics, engineering, and chemicals.
In 1996, the Samsung Group reacquired the Sungkyunkwan University foundation.
Samsung survived the Asian financial crisis of 1997-98 relatively unharmed. However,
Samsung Motor, a $5 billion venture was sold to Renault at a significant loss.
Additionally, Samsung manufactured a range of aircraft from 1980 to 1990s.

Most importantly, Samsung Electronics (SEC) has since come to dominate the group
and the worldwide semiconductor business, even surpassing worldwide leader Intel in
investments for the 2005 fiscal year. Samsung's brand strength has greatly improved in
the last few years.

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Samsung became the largest producer of memory chips in the world in 1992, and is the
world's second-largest chipmaker after Intel. In 1995, it built its first liquid-crystal
display screen. Ten years later, Samsung grew to be the world's largest manufacturer
of liquid-crystal display panels. In 2006, S-LCD was established as a joint venture
between Samsung and Sony in order to provide a stable supply of LCD panels for both
manufacturers. Samsung Electronics, which saw record profits and revenue in 2004
and 2005, overtook Sony as one of the world's most popular consumer electronics
brands, and is now ranked #19 in the world overall. Behind, Nokia, Samsung is the
world's second largest by volume producer of cell phones with a leading market share
in the North America and Western Europe.

ABOUT SAMSUNG ELECTRONICS

Founded in 1969 in Suwon, Gyeonggi-do, Korea, Samsung Electronics Co., Ltd.

manufactures and sells a wide variety of electronic products, communication devices,
and semiconductors. In January 2009, we restructured our organizational structure to
better reflect the respective characteristics of each business sector and the common
technology, market and customer base denominators within its businesses, thereby
creating synergies. The previous six division-based system was separated into a Digital
Media & Communications (DMC) business unit and a Device Solution (DS) business
unit. Today, its global presence includes a total of 111 subsidiaries in the form of
production subsidiaries, sales subsidiaries, distribution subsidiaries, research
laboratories and eight overseas business divisions representing North America, Europe,
China, Southeast Asia, Southwest Asia, Central and South America, CIS, the Middle
East and Africa.

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 Source: Samsung Electronics annual report 2009
Fig: Global Network of Samsung Electronics

MISSION AND VISION STATEMENT

VISION STATEMENT

Samsung is guided by a singular vision: to lead the digital convergence

movement. SAMSUNG believe that through technology innovation today, SAMSUNG
will find the solutions they need to address the challenges of tomorrow. From
technology comes opportunity for businesses to grow, for citizens in emerging markets
to prosper by tapping into the digital economy, and for people to invent new
possibilities. SAMSUNG’s aim is to develop innovative technologies and efficient
processes that create new markets, enrich people’s lives and continue to make
Samsung a trusted market leader.
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MISSION STATEMENT

Everything they do in Samsung is guided by our mission: to be the best “digital-

Company”.

Source: Samsung Electronics website

Fig: Holistic Marketing Framework

Samsung grew into a global corporation by facing challenges directly. In the years
ahead, our dedicated people will continue to embrace many challenges and come up
with creative ideas to develop products and services that lead in their markets.

ORGANIZATION STRUCTURE

Source: Samsung Electronics annual report 2009

Fig: Organization Structure of Samsung Electronics

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ACHIEVEMENTS OF THE COMPANY

• Became the official sponsor of 2010 Guangzhou

Asian Game
• Developed the world's first 2Gb 50 NANO
• Samsung takes No. 1 spot in U.S. cellphone
market
2008
• Opened Global Brand PR Centre ‘Samsung
D'light'
• No.1 worldwide market share position for TVs
achieved for the 9th quarter in a row

• No.1 worldwide market share position for TVs

achieved for the seventh quarter in a row
• Developed the world's first 30nm-class 64Gb
NAND Flash™ memory
2007 • BlackJack bestowed the Best Smart Phone
award at CTIA in the U.S.
• Attained No.1 worldwide market share position
for LCD for the sixth year in a row

• Developed the world's first real double-sided

LCD
• Developed the worlds' first 50nm 1G DRAM
2006 • Unveiled 10M pixel camera phone
• Launched the worlds' first Blu-Ray Disc Player
• Developed 1.72"Super-Reflective LCD Screen

• The India Retail Forum has awarded Samsung

as the Best Retailer of the year 2005 in the
consumer Durables category.
• Most Trusted Company Award 2005 by Var
2005 India.
• Mr. S. H. Oh appointed as the President and
Chief Executive Officer of Samsung South West
Asia.

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 • Samsung received the Golden Peacock Special
commendation Certificate for Corporate Social
Responsibility (Private Sector) for the year 2004
from Mr. Shivraj Patil, Union Home Minister.
2004 • India made regional headquarters for Samsung
Southwest Asia.
• Mr. K. S. Kim appointed as the First President
and Chief Executive Officer of Samsung South
West Asia.

• Inaugurated Samsung's new, High-Tech,

advanced Refrigerator facility.
• Commencement of production at refrigerator
2003 facility in Noida.
• Merger of SIEL with SEIIT.
Software technology park set up at Noida

• Construction commences for 5,000,000

refrigerator plant in Noida
• Samsung unveils new technology for Consumer
Home Entertainment (DNIe™)
• ELCINA (Electronics Industries Association of India)
2002 Awards for ‘Excellence in Electronics’ instituted by the
IT department of the Government of India. SAMSUNG
India received the 1st Prize in the Consumer Electronics
category for productivity, exports, R&D and quality
assurance in 2002

• Foundation Stone laid for CTV Factory at

Noida, Uttar Pradesh.
1996 • Launch in South
Home Appliances Launch

• Samsung India Electronics (SIEL) products

launched in India.
1995 • Certificate for commencement of business
received by Samsung

Source: Samsung Electronics website

Table: Achievements of Samsung Electronics

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BRANDING STRATEGY OF SAMSUNG ELECTRONICS

Interbrand, the world’s leading brand consultant has ranked Samsung as the
fastest growing brand in the world. For any new company, when it enters the market,
there are two options to stimulate the growth; intensive advertising campaign, and
offer products with unique functions. Samsung opted for both, but tilted more towards
advertising and brand making strategy-creating awareness of its name by investing
enormously in million-dollar brand making campaigns. One problem with older
companies is that they often portray their product as commodity and normally sell their
products only on the basis of brand without improving their quality and lowering their
price.
Samsung worked on all directions, it not only invested hugely in brand creation
campaigns worldwide ($3billion marketing budget per year), while it also remained
ahead of the market by introducing innovation. In order to create a different image,
Samsung decided to position itself by developing innovative products and become
leader rather than a follower.The reason for this success is Samsung’s holistic
approach to develop several strategies for different regions, but guided by one unified
Samsung brand image building strategy. The branding strategy started in 1996 by its
Chairman Kun Lee, whose aim was to launch a coordinated global program to make
Samsung an international brand. Over the last one decade Samsung has been busy in
executing its comprehensive brand building strategy. Samsung annual investment in
branding and marketing is about US$3.5 billion, which has been spent to increase its
brand awareness around the world. Samsung the approach is holistic reaching the
world customer. It created its branding in multiple ways, ranging from traditional adds
to billboards, racing, Olympics games, cricket matches, marathons, in short wherever it
saw the crowd, it communicated Samsung message by presenting itself as a leader of
innovation with affordable price.

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SAMSUNG ELECTRONICS IN INDIA

Samsung India Electronics Private Limited (SIEL) is the Indian subsidiary of the
US $55.2 billion Samsung Electronics Corporation (SEC) headquartered in Seoul,
Korea. Headquartered in New Delhi, SAMSUNG India has widespread network of
sales offices all over the country . SAMSUNG India is the hub for SAMSUNG’s South
West Asia Regional operations. The South West Asia Headquarters, looks after the
SAMSUNG business in Nepal, Sri Lanka, Bangladesh, Maldives and Bhutan besides
India. SAMSUNG India which commenced its operations in India in December 1995
enjoys a sales turnover of over US$ 1Bn in just a decade of operations in the country.
From being a virtually unknown entity in the Year 1995, brand SAMSUNG today
enjoys an awareness level of over 65% and a positive opinion of over 80% in the
country today (source: BAS 2007). Initially, a player only in the Colour Televisions
segment, it later diversified into colour monitors (1999) and refrigerators (2003).
Today, it is recognized as one of the fastest growing brands in the sphere of digital
technology. SIEL is the market leader in high end digital television (Plasma, LCD).

PRODUCT PORTFOLIO OF SIEL

SAMSUNG India is the hub for SAMSUNG’s South West Asia Regional
operations. SAMSUNG India has segmented their products into five categories.

Source: Samsung Electronics website

Fig: Width of the product mix of SIEL

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MOBILE PHONE

TV/AUDIO /VIDEO

CAMERA/CAMCORDER

HOME APPLIANCES

PC/PERIPHERALS/PRINTERS

Source: Samsung Electronics website

Fig: Depth of the product lines

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DEPTH OF THE LCD TV SEGMENT

SAMSUNG India has divided the LCD TVs in different series according to the
features. Here there is a brief review of segmentation of LCD TVs.

LCD TVs
Series Series Series Series Series Serirs Series
Others
7 6 5 4 5 4 3

Source: Samsung Electronics website

Fig: Depth of the LCD segment

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 INDIAN CONSUMER ELECTRONICS INDUSTRY

The consumer electronics industry has been witnessing a phenomenal growth globally
over the past few years. This growth can be attributed to the revolutionary
technological developments taking place in the consumer electronics industry. The
revolution brought by the digital technology has enabled the consumer electronics
sector to profit from the growing interaction of digital applications, such as
camcorders, DVD player/recorder, still camera, computer monitor, LCD TV, etc.
According to Consumer Electronics Market Forecast report, the global consumer
electronics market is forecasted to grow at a CAGR of around 5% during 2009-2012.
Also, during the same period, the global consumer electronics shipment will grow at a
CAGR of around 5%. Various factors driving the future growth. On the regional front,
we found that the American region, mainly US, is driving the global consumer
electronics industry, closely followed by Europe. In future, Asia Pacific region will
constitute the major portion of the consumer electronics industry, mainly due to the
increase in demand from the developed countries in the region. Also, the American
region along with the European region will see a decline in their market shares because
the markets there have attained saturation and only the advent of new technology will
boost the demand.
India’s consumer electronics devices market, defined as the addressable market for
computing devices, mobile handsets and AV products, is projected at around
US$28.6bn in 2010. This is expected to increase to US$45.7bn by 2014, driven by
rising incomes and growing affordability. Growth in some product categories dipped in
2009, but the market recovered strongly during the festive sales season that ran until
Diwali, with many retailers reporting 20-40% growth. Spending on consumer
electronics devices is projected to grow at an overall CAGR of 12% through 2014,
with the key segments including touch-screen mobiles, for LCD TV sets, set-top boxes

17
and notebook computers. Much of the growth will be driven by growing demand from
India’s rural population.

DISPLAY AS A GROWTH DRIVER

India's domestic video device market is expected to grow at a CAGR of 22% between
2009-2013, to a value of US$15.2bn in that year. Television will remain the core
product in this category, with sports events such as the India Premier League cricket
and the 2010 Commonwealth Games in Delhi helping to drive demand for TV set
upgrades.

Source: Display search India

Fig: Contribution of video in the CE market

Indian market typically exhibits contradiction that there may be a unique to this
market. For instants CRT TVs are obsolete across the world; but they continue to be

18
sold in rural india. At the same time there is a growing demand for LCD TVs in india.
In this way vedio continues to drive growth in India’s consumer electronics industry.
The display industry in India promises huge potential in the years to come. The double
digit compound annual growth over the next five years will be aided by various
factors.

EMERGING LCD TV MARKET

India market and predicts that by 2012, LCD TV shipments will surpass those of
CRT TVs in India. India has the second largest population in the world and an annual
GDP growth rate of more than 8% from 2002 to 2012. CRT TV accounts for 92.9% of
those units in 2008, followed by LCD TV with 6.6% and PDP TV with 0.5%.
However, Indian LCD TV market is just at the beginning of a real growth curve, with
Y/Y growth of more than 100% expected for each of the next five years. Growth will
be driven by enhanced purchasing power, the digital broadcast (DTH, IPTV, STB
cable) transition as well as consumer awareness and affordability of LCD TVs. India’s
growing upper middle class is projected to be the greatest source of LCD TV
purchasing power. Meanwhile, major brands like Samsung, LG, Sony and Philips and
Indian local brands like Videocon and Onida are all focusing promotional efforts
around LCD TV. Several Chinese brands are also targeting India with their first
exports. Among the imports of LCD TV into India, approximately 25% were imported
in as CBU (Complete Built Unit) and 75% were imported as SKD (Semi-Knock
Down) or CKD (Complete Knock Down). Thailand has a special FTA (Free Trade
Agreement) with India on duty benefits. Therefore, companies like Sony and
Panasonic are making LCD TVs in Thailand and then shipping them to India. The

19
growing LCD TV market in India has encouraged Indian company Videocon group to
set up a TFT LCD panel manufacturing lab.

Source: Display search India

Fig: Indian Emerging LCD TV Market

THEORETICAL BACKGROUND OF THE STUDY

Marketing involves satisfying consumer’s needs and wants. The task of any business
is to deliver customer value at a profit. The American Marketing Association offers the
following formal definition: Marketing is an organizational function and a set of
processes for creating, communicating, and delivering value to customers and for
managing customer relationships in ways that benefit the organization and its stake
holders.

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According to this view, holistic marketers succeed by managing a superior value chain
that delivers a high level of product quality, service, and speed. Holistic marketers
achieve profitable growth by expanding customer share, building customer loyalty, and
capturing customer lifetime value.

Source: Marketing Management by Philip Kotler & Kevin Lane Kelle

Fig: Holistic Marketing Framework

A holistic marketing framework shows how the interaction between relevant actors
(customers, company, and collaborators) and value-based activities (value exploration,
value creation, and value delivery) helps to create, maintain, and renew customer
value.

THE ROLE OF MARKETING CHANNELS

Successful value creation needs successful value delivery. Holistic marketers are
increasingly taking a value network view of their businesses. The marketing channel

21
performs the work of moving goods from producers to consumers. Intermediaries
normally achieve superior efficiency in making goods widely available and accessible
to target markets. Through their contacts, experience, specialization, and scale of
operation, intermediaries usually offer the firm more than it can achieve on its own.
These are the various roles performed by the channel partners:

Gather information about potential and current customers, competitors, and

other actors and forces in the marketing environment.

Develop and disseminate persuasive communications to stimulate purchasing.

Reach agreements on price and other terms so that transfer of ownership or
possession can be affected.

Place orders with manufacturers.

Acquire the funds to finance inventories at different levels in the marketing

channel.

Assume risks connected with carrying out channel work.

Provide for the successive storage and movement of physical products.

Provide for buyers' payment of their bills through banks and other financial
institutions.

Oversee actual transfer of ownership from one organization or person to another.

All channel functions have three things in common: They use up scarce resources; they
can often be performed better through specialization; and they can be shifted among
channel members. When the manufacturer shifts some functions to intermediaries, the
producer's costs and prices are lower, but the intermediary must add a charge to cover
its work. If the intermediaries are more efficient than the manufacturer, prices to
consumers should be lower. If consumers perform some functions themselves, they
should enjoy even lower prices.

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CHANNEL MANAGEMENT DECISIONS

After a company has chosen a channel alternative, individual intermediaries

must be selected, trained, motivated, and evaluated. Channel arrangements must be
modified over time.

SELECTING CHANNEL MEMBERS

Companies need to select their channel members carefully. To customers, the channels
are the company. Consider the negative impression customers would get of if one or
more of their outlets or dealers consistently appeared dirty, inefficient, or unpleasant.
To facilitate channel member selection, producers should determine what
characteristics distinguish the better intermediaries. They should evaluate the number
of years in business, other lines carried, growth and profit record, financial strength,
cooperativeness, and service reputation. If the intermediaries are sales agents,
producers should evaluate the number and character of other lines carried and the size
and quality of the sales force. If the intermediaries are department stores that want
exclusive distribution, the producer should evaluate locations, future growth potential,
and type of clientele.

TRAINING CHANNEL MEMBERS

Companies need to plan and implement careful training programs for their
intermediaries. The company must constantly communicate its view that the
intermediaries are partners in a joint effort to satisfy end users of the product.
Coercive and reward power are objectively observable; legitimate, expert, and referent
power are more subjective and dependent on the ability and willingness of parties to
recognize them.
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MOTIVATING CHANNEL MEMBERS

A company needs to view its intermediaries in the same way it views its end users. It
needs to determine intermediaries' needs and construct a channel positioning such that
its channel offering is tailored to provide superior value to these intermediaries. Being
able to stimulate channel members to top performance starts with understanding their
needs and wants. The company should provide training programs, market research
programs, and other capability-building programs to improve intermediaries’
performance.

EVALUATING CHANNEL MEMBERS

Producers must periodically evaluate intermediaries' performance against such

standards as sales-quota attainment, average inventory levels, customer delivery time,
treatment of damaged and lost goods, and cooperation in promotional and training
programs. A producer will occasionally discover that it is paying too much to
particular intermediaries for what they are actually doing. Producers should set up
functional discounts in which they pay specified amounts for the trade channel's
performance of each agreed-upon service. Underperformers need to be counseled,
retrained, motivated, or terminated.

MODIFYING CHANNEL ARRANGEMENTS

A producer must periodically review and modify its channel arrangements.

Modification becomes necessary when the distribution channel is not working as
planned, consumer buying patterns change, the market expands, new competition
arises, innovative distribution channels emerge, and the product moves into later stages
in the product life cycle.

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LEVELS OF MARKETING SEGMENTATIONS AND TARGETS

Markets are not homogeneous. A company cannot connect with all customers in
large, broad, or diverse .markets. Consumers vary on many dimensions and often can
be grouped according to one or more characteristics.

SEGMENTATION MARKETING

The starting point for discussing segmentation is mass marketing. In mass marketing,
the seller engages in the mass production, mass distribution, and mass promotion of
one product for all buyers. The argument for mass marketing is that it creates the
largest potential market, which leads to the lowest costs, which in turn can lead to
lower prices or higher margins. However, many critics point to the increasing
splintering of the market, which makes mass marketing more difficult. The
proliferation of advertising media and distribution channels is making it difficult and
increasingly expensive to reach a mass audience. Some claim that mass marketing is
dying. Most companies are turning to micromarketing at one of four levels: segments,
niches, local areas, and individuals.

TARGET MARKETING

Once the firm has identified its market-segment opportunities, it has to decide how
many and which ones to target. Marketers are increasingly combining several variables
in an effort to identify smaller, better-defined target groups. Effective target marketing
requires that marketers:

Identify and profile distinct groups of buyers who differ in their needs and
preferences (market segmentation) .

25

Select one or more market segments to enter (market targeting).

For each target segment , establish and communicate the distinctive benefits) of
the company's market offering (market positioning) .

COMPETITIVE STRATEGIES FOR MARKET LEADERS

The leader might spend conservatively whereas a challenger spends liberally.

The leader might misjudge its competition and find itself left behind. The dominant
firm might look old-fashioned against new and peppier rivals. The dominant firm's
costs might rise excessively and hurt its profits, or a discount competitor can undercut
prices. Leaders can respond to an aggressive competitor in three ways first, the firm
must find ways to expand total market demand. Second, the firm must protect its
current market share through good defensive and offensive actions. Third, the firm can
try to increase its market share, even if market size remains constant.

EXPANDING THE TOTAL MARKET

The dominant firm normally gains the most when the total market expands. The
market leader should look for new customers or more usage from existing customers.
Every product class has the potential of attracting buyers who are unaware of the
product or who are resisting it because of price or lack of certain features. A company
can search for new users among three groups: those who might use it but do not
(market-penetration strategy), those who have never used it (new-market segment
strategy) or those who live elsewhere (geographical-expansion strategy). Usage can be
increased by increasing the level or quantity of consumption or increasing the
frequency of consumption.

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DEFINING MARKET SHARE

While trying to expand total market size, the dominant firm must continuously defend
its current business. The leader leads the industry in developing new product and
customer services, distribution effectiveness, and cost cutting. It keeps increasing its
competitive strength and value to customers.

EXPANDING MARKET SHARE

Market leaders can improve their profitability by increasing their market share.
Gaining increased share in the served market, however, does not automatically produce
higher profits—especially for labor-intensive service companies that may not
experience many economies of scale. Much depends on the company's strategy.
Because the cost of buying higher market share may far exceed its revenue value, a
company should consider four factors before pursuing increased market share: The
possibility of provoking antitrust action, Economic cost, Pursuing the wrong
marketing-mix strategy, The effect of increased market share on actual and perceived
quality.

DISTRIBUTION CHANNEL MAP OF SIEL IN KOLKATA

The producer and the final customer are part of every channel. These channels are
different levels. A one-level channel contains one selling intermediary, such as a
retailer. A two-level channel contains two intermediaries. In consumer markets, these
are typically a wholesaler and a retailer. A three-level channel contains three
intermediaries. In the meatpacking industry, wholesalers sell to jobbers, who sell to

27
small retailers. From the producer's point of view, obtaining information about end
users and exercising control becomes more difficult as the number of channel levels
increases.
SIEL is having three types of distribution system. Two of them comes under one-level
channel and last one comes under two-level channel.

ONE LEVEL CHANNEL

Company
Brand Shop Customers
Warehouse

Company Direct
Customers
Warehouse Dealers

TWO LEVEL CHANNEL

Company
Distributors Sub Dealers Customers
Warehouse

Fig: Distribution channel map of SIEL

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 MARKET SIZE OF SAMSUNG LCD TVS IN KOLKATA

During the study I have subdivided Kolkata in to three parts these are North Kolkata,
Central Kolkata and South Kolkata.

NORTH KOLKATA

TOTAL TOTAL
NO OF DEALERS AVERAGE AVERAGE COUNTER
COUNTER COUNTER
SURVEYED COUNTER SIZE SHARE
SIZE SHARE
404 200 22 18.36 9.09
(9.09/18.36)*100
COUNTER SHARE OF SAMSUNG LCD TV IN NORTH KOLKATA
= 49.50

CENTRAL KOLKATA

TOTAL TOTAL
NO OF DEALERS AVERAGE AVERAGE COUNTER
COUNTER COUNTER
SURVEYED COUNTER SIZE SHARE
SIZE SHARE
189 89 13 14.53 6.84
(14.53/6.84)*100
COUNTER SHARE OF SAMSUNG LCD TV IN NORTH KOLKATA
= 47.O 7

SOUTH KOLKATA

TOTAL TOTAL
NO OF DEALERS AVERAGE AVERAGE COUNTER
COUNTER COUNTER
SURVEYED COUNTER SIZE SHARE
SIZE SHARE
434 209 15 28.93 13.93
(13.93/28.93)*100
COUNTER SHARE OF SAMSUNG LCD TV IN NORTH KOLKATA
= 48.15

29
 DATA INTERPRETATION AND ANALYSIS

Table- 4.1: Table showing the counter share of SAMSUNG LCD TVs

Particulars No of Dealers Percentage

less than 30% 6 12
Between 30%-50% 27 54
Between 51%-70% 13 26
Greater than 70% 4 8
Total 50 100
Source: Primary Data

Greater than 70%

8%
less than 30%
12%
Between 51%-
70%
26%

Between 30%-
50%
54%

INTERPRETATION:
From the above table, it can be observed that 54% of the dealers are
having counter share of SAMSUNG LCD is between 30%-50%, where as 26% of the
dealers are having counter share of SAMSUNG LCD is between 51%-70%, 12% of
the dealers are having counter share of SAMSUNG LCD is less than 30% and only 8%
of the are having more than 75% counter share.

30
 Table- 4.2: Table showing the counter size of the dealers

Particulars No of respondents Percentage

Between 0-19 27 54
Between 20-39 14 28
Between 40-60 7 14
More than 60 2 4
Total 50 100
Source: Primary Data

More than 60
4%

Between 40-60
14%

Between 0-19
Between 20-39 54%
28%

INTERPRETATION:
The above table depicts that 54% of the dealers are having counter
size between 0-19 TVs per month, where as 28% of the dealers are having counter size
between 20-39 TVs per month, 14% of the dealers are of the dealers are having
counter size between 40-60 TVs per month, and only 4% of the dealers are having
counter size more than TVs per month.

31
 Table- 4.3: Table showing whether the dealers are having of LCD stand

Particulars No of Respondents Percentage

Yes 19 38
No 31 62
Total 50 100
Source: Primary Data

Yes
38%

No
62%

INTERPRETATION:
From the above table, it can be observed that 62% of the
respondents don’t have any LCD display stand in their counter where as 38% of the
respondents are having LCD display stand in their counter.

32
 Table- 4.4: Table showing the Display share of SAMSUNG LCD TVs

Less Between Between Between Greater

Particulars than 25%-40% 41%-54% 55%-75% than Total
25% 75%
SAMSUNG 9 18 8 9 6 50
LG 21 18 5 3 3 50
SONY 31 15 2 2 0 50
Others 38 7 3 2 0 50
Source: Primary Data

40

35

30

25
SAMSUNG
20 LG

15 SONY

10 OTHERS

0
Less than 25% Between 25%- Between 41%- Between 55%- Greater than
40% 54% 75% 75%

INTERPRETATION:
From the above table, it can be observer that in 18% counter,
Samsung, in 42% counter LG, in 62% counter SONY and in 72% counter others are
having less than 25% Display share. Where as in 36% counter Samsung and LG are
sharing the same, in 30% counter SONY and in 14% counter others are having Display
share between 25%-40%. In 16% counter Samsung, in 10% counter LG, in 4% counter
SONY and in 6% counter others are having Display share between 41%-54%. In 18%
counter Samsung, in 6% counter LG, in 4% counter SONY and in 4% counter others
are having Display share between 55%-75%. In 12% counter Samsung, in 6% counter
LG is having more than 75% Display share.

33
 Table- 4.5: Largest selling model among all the models

Particulars No of Respondents Percentage

22 Inch 28 56
26 Inch 20 40
32 Inch 2 4
40 Inch 0 0
Above 40 Inch 0 0
Total 50 100
Source: Primary Data

32 Inch 40 Inch Above 40 Inch

4% 0% 0%

26 Inch
40%
22 Inch
56%

INTERPRETATION:
From the above table it can be found that 72% of respondents finds
22” is the largest selling model in their counter, followed by 26’’ which is the largest
selling model in 40% counters, where as only 4% finds 22” is the largest selling
model in their counter.

34
 Table- 4.6: Table showing whether dealers are having sufficient catalog

Particulars No of Respondents Percentage

Yes 24 48
No 26 52
Total 50 100
Source: Primary Data

Yes
48%
No
52%

INTERPRETATION:
From the above data, it can be inferred that majority of the
respondents i.e. 52% don’t have the sufficient catalog of the product. The rest 48% of
the respondents are having sufficient catalog of the product.

35
 Table- 4.7: Table showing whether the dealers are aware of current pricelist

Particulars No of Respondents Percentage

Yes 43 86
No 7 14
Total 50 100
Source: Primary Data

No
14%

Yes
86%

INTERPRETATION:
From the above table, it can be observed that 86% of the
respondents are aware of current pricelist and they used to get it by email or via sales
person and only 14% of the respondents not aware of current pricelist as they not
getting the current pricelist from any of the available sources.

36
 Table- 4.8: List of different sources from where the dealers get the product

Particulars No of Respondents Percentage

Distributor 41 82
Wholesaler 3 6
Other Source 2 4
All of them 4 8
Total 50 100
Source: Primary Data

Other Source
4% All of them
Wholesaler
6% 8%

Distributor
82%

INTERPRETATION:
From the above table, it can be found that 82% of the respondents
get the product from the distributor, 8% of the respondents get the product from all the
available sources where they felt cheaper, 6% of the respondents get the product from
the wholesaler and only 4% of the respondents get the product from other alternative
sources.

37
Table- 4.9: Table showing the satisfaction level of the dealers about the
distributors

Particulars No of Respondents Percentage

Highly Satisfied 15 30
Satisfied 34 68
Dissatisfied 1 2
Highly Dissatisfied 0 0
Total 50 100
Source: Primary Data

Dissatisfied Highly Dissatisfied

2% 0%

Highly Satisfied
30%

Satisfied
68%

INTERPRETATION:
From the above table it can be found that 68% of respondents are
satisfied with distributors as a whole, where as 30% of respondents are highly satisfied
with distributors as a whole and only 2% of respondents are dissatisfied with
distributors as a whole.

38
 Table- 4.10: Table showing the frequency of sales persons visiting the counter

Particulars No of Respondents Percentage

Once in a week 17 34
Twice a week 19 38
Thrice a week 13 26
More than three days 1 2
Total 50 100
Source: Primary Data

More than three

days
2%
Thrice a week
Once in a week
26%
34%

Twice a week
38%

INTERPRETATION:
From the above table it can be found that in 38% counters
salespersons are visiting twice a week, where as in 34% counters salespersons are
visiting once a week, 24% counters salespersons are visiting thrice a week, and only in
2% counters salespersons are visiting more than thrice a week.

39
 Table- 4.11: Table showing the satisfaction level of the dealers about the service

Particulars No of Respondents Percentage

Good 36 72
Satisfactory 12 24
Average 2 4
Below average 0 0
Total 50 100
Source: Primary Data

Average Below
4% average
0%
Satisfactory
24%

Good
72%

INTERPRETATION:
From the above table, it can be observed that majority of the
respondent 72% rated the service as good, 24% of the respondents rated the service as
satisfactory, and only 4% of the responded rated the service as average.

40
Table- 4.12: List of facilitating factors which will help the dealers to increase the
counter share

Particulars No of Respondents Percentage

Branding 13 26
Advertising 25 50
Salesman 7 14
Display Concert 5 10
Total 50 100
Source: Primary Data

Display
Concert Branding
Salesman 10% 26%
14%

Advertising
50%

INTERPRETATION:
From the above table, it can be observed that majority of the
respondents 50% think that advertising will facilitate to increase their counter share,
where as 26% respondents think that branding will facilitate to increase their counter
share, 14% respondents think that salesman will facilitate to increase their counter
share and only 10% respondents think that display concert will facilitate to increase
their counter share.

41
Table- 4.13: Table showing whether the dealers are satisfied with SAMSUNG as
whole

Particulars No of Respondents Percentage

Yes 48 96
No 2 4
Total 50 100
Source: Primary Data

No
4%

Yes
96%

INTERPRETATION:
From the above table, it can be observed that majority of the respondents
96% are satisfied with SAMSUNG as a whole, where as only 4% respondents are not
satisfied with SAMSUNG as a whole.

42
 LIMITATIONS

During the dealer study, some of the dealers did not give the exact information
about number of products sold by them in a month.

The market size of SAMSUNG LCD TVs achieved is exclusive of B2C market.

This study does not take into account the market in Kolkata as whole, but only
50 dealers.

Study was conducted with dealers selling mostly Samsung products, with most
of them selling LG, SONY etc. products in lower quantities. Therefore, this
might skew the results a bit.

The period of the project was not sufficient to study all the factors in deep.

Many consumer and dealers/retailers showed less interest in providing
information and haven’t cooperated.

43
 FINDINGS

Majority of the dealers i.e. 54% are having counter share of SAMSUNG LCD is
between 30%-50%. It shows that Samsung has got strong grip in the market and
if the dealers will contribute more enthusiastically than market share may grow
farther.

54% of the dealers are having counter size between 0-19 units per month. It
shows that majority of the dealers need to improve their counter size in order to
expand the market.

From the study, it is revealed that 62% of the dealers don’t have any LCD
display stand in their counter.

Samsung is having healthy display share (between 55% to 75%) in 18% dealers
rather than i.e. it shows that many of the dealers are keeping Samsung in the
display. Different contest for displaying the LCD brings a new perspective in
this context.

Among the different models like 22 inch, 26 inch, 40 inch, above 40 inch,
majority of the dealers (56%) finds 22” is the largest selling model in their
counter.

Majority of the dealers i.e. 52% don’t have the sufficient catalog of the product.
Samsung should strive to ensure that the catalogs are sent out regularly and
quickly, as this is the cause of most grievances of the channel partners.

Majority of the dealers are aware of current pricelist due to the effective
communication with the company. Without effective communication value
cannot be passed deliver superior value to the target market.

Some dealer’s are taking Samsung LCD from cheaper markets. This is creating
price instability in the market between retailers and system integrators.

44

68% of the dealers are satisfied with the distributors. In turn, it helps to achieve
superior efficiency in making goods widely available and accessible to target
markets.

In 38% counters sales persons are visiting twice a week.

72% of the dealers rated the promotional service as good. The rating shows that
Samsung is successful in delivering distinctive customer value.

50% of the respondents think that advertising will facilitate to increase their
counter share. It might build conviction and purchase intent among the target
audience.

96% of the dealers are satisfied with SAMSUNG as a whole.

45
 SUGGESTIONS

SAMSUNG should redress the grievance of the dealers regarding the supply of
catalogs, so that the dealers can show various models to the prospects and
endorse to buy SAMSUNG LCD TV.

The company should modify some of the models as these models don’t have any
output connection specially the 22” model as it is the largest selling model in
most of the counters.

Dealers in Kolkata don’t have enough space to display LCD in their counter
that’s why they are not willing to keep LCD display stand in their counter.
Company should customize the display stand so that it can be easily fix in the
wall, in this way SAMSUNG can improve the display share as SAMSUNG also
believes that “ JO DIKHTA HAI WO BIKTA HAI”.

The rural counters are not getting the current price list of the product as sales
persons are visiting less in these counters company should focus on that matter
seriously.

Company should introduce low cost products to satisfy the needs of the low or
middle class as SONY is having 19” model in this segment.

Branding and promotional activities should be done effectively as it creates a
long lasting image in the mind of the customers.

As there is a bottle neck competition between SAMSUNG and LG, it is
necessary to take major steps to overcome the area of downfall in SAMSUNG
with respect to LG.

46
 CONCLUSION

This study highlighted that Kolkata market is still a virgin market for SAMSUNG
LCD TVs. Customers need to be made aware of the productive usages of these
products if SAMSUNG want to target these untapped market segments of customers.
Also SAMSUNG need to modify their advertising strategies in order to educate the
target audience about the product. Hence SAMSUNG will be able to win a major
between the competitors.

47
 BIBLIOGRAPHY

BOOKS AND JOURNALS REFERRED:

SAMSUNG Electronics annual report, 2009

Current state of Indian Economy (FICCI), October 2009

Indian journal of marketing, June 2009

Marketing Management, 12th Edition

By: Philip Kotler and Kevin Lane Keller

WEBSITES:
http://www.google.com
http://www.ibef.org
http://www.displaysearch.com
http:// www.dnb.com
http://www.samsung.com.
http:// www.cygnusindia.com

48
 ANNEXURE
Questionnaire
“A Study on distribution channel relationship and market share analysis of Samsung
LCD in the territory of Kolkata”, with special reference to SIEL.

1) Name of the dealer: …………………………………………………………………...

2) What is the Counter share of SAMSUNG LCD per month? …………………..

3) What is the counter size of the dealer per month? …………………..

4) Whether the dealer is having LCD stand?

Yes No

5) How different brands are displayed (Size wise)?

22” 26” 32” 40” Above 40”

SAMSUNG
LG
SONY
Others

6) Which is the largest selling Model?

22” 26” 32” 40” Above 40”

7) Whether the Dealer is having sufficient catalog of the product?

Yes No

8) Whether the Dealer is aware of current pricelist of the product?

Yes No

9) From where the dealer used to get the product?

Distributor Other Source

Whole seller All of them

49
10) Whether the Dealer is satisfied with the Distributor?

Highly Satisfied Satisfied

Dissatisfied Highly dissatisfied

11) How often distributors sales person visit the counter?

Once a week Twice a week

Thrice a week More than 3 times

12) Whether the dealer is satisfied with the service?

Satisfactory Good
Average Below Average

13) What can Samsung do to motivate you to sell more Samsung LCD rather than any other
brand?

Branding Advertising
Salesman Display Concert

14) Have you been satisfied with Samsung as a whole, during your experience selling
Samsung products?

Yes No

Suggestions (If Any):

50