Dealers Perception With Reference To LG Products Hyderabad

A study on
“DEALERS PERCEPTION WITH REFERENCE TO LG

PRODUCTS”
With special reference to
“LG ELECTRONICS, Hyderabad”
A project report submitted to Viswanadha Business
School in the partial fulfillment of the requirements for
the award of the degree of Post Graduate Diploma in
Management
Submitted by
R. DEEPAK
Under the Guidance of

Mr. C. RAVINDRA BABU
VISWANADHA BUSINESS SCHOOL

(Approved by AICTE Ministry of HRD, Govt. of India, New
Delhi)
Visakhapatnam.
2009-2011
LG Electronics Page 1
DECLARATION
I, R. DEEPAK hereby solemnly declare that the project report entitled
“DEALERS PERCEPTION WITH REFERENCE TO LG
PRODUCTS” at “LG ELECTRONICS, Hyderabad” submitted to
Viswanadha Business School is a genuine and bonafide work done by me
and is not submitted to any other University/College or published any
time before. The project work is in partial fulfillment of the requirement
for the award of the Degree, Post Graduate Diploma in Management.
Place : Visakhapatnam (R. DEEPAK)

Date : Reg. No.09/VBS/AP/PGDM/FT/021
VISWANADHA BUSINESS SCHOOL
(Approved by AICTE Ministry of HRD, Govt. of India,
NewDelhi)
Visakhapatnam.
CERTIFICATE
This is to certify that project report entitled” A STUDY ON

DEALERS PERCEPTION WITH REFERENCE TO LG
PRODUCTS” Hyderabad being submitted by R.DEEPAK in
partial fulfillment of the requirement for the award of POST
GRADUATION DIPLOMA IN MANAGEMENT to the,
VISHWANDHA BUSINESS SCHOOL, Visakhapatnam is a
record of bonafide work done by his own under my guidance
and supervision.
Station: Visakhapatnam
RAVINDRABABU
Date:
Asst.Professor
ACKNOWLEDGEMENT
I express my deep and sincere gratitude to Dr.P.Kameswara

Rao, Director, Viswanadha Business School for having
permitted me to do my project work at LG Electronics.
I would like to thank my project guide Prof C. RAVINDRA

BABU, Viswanadha Business School for having provided me
with his valuable guidance and cooperation to make this project
a successful one.
I express my personal thanks to Mr. Company Guide,

Designation, Department for permitting and supporting me to
do this project.
I would like to express my sincere and heart full thanks to the
office staff of the organization for providing me the required
information.
I would also like to express my heart full thanks to all those

who have directly or indirectly assisted me in completing my
project.
CONTENTS
Page No.-
DECLARATION
ACKNOWLEDGEMENT
INDEX
CHAPTER-01
INTRODUCTION
OBJECTIVES OF THE STUDY
NEED FOR THE STUDY
METHODOLOGY OF THE STUDY
LIMITATIONS OF THE STUDY.
CHAPTER-02
INDUSTRY PROFILE
COMPANY PROFILE
ORGANISATION STRUCTURE.
CHAPTER-03
THEORITICAL STUDY ON PERFORMANCE APPRAISAL.
CHAPTER-04
ANALYSIS AND INTERPRETATION.
CHAPTER-05
SUMMARY
FINDINGS
SUGGESTIONS
CONCLUSION
CHAPTER-06
QUATIONAIRE
BIBLIOGRAPHY
INTRODUCTION
We live in a fast moving world of data and information. Our

mobile phones, entertainment systems, cameras, and PDAs have
become extensions of who we are. We expect products and
services that integrate real-world information to create new
functionality and experiences. And, we expect them to work
wherever we are: at home, at the office, and out in the world.
Today's consumer electronics systems are no longer gadgets.
They've become high performance distributed information and
data systems. And we expect them to perform with absolute
quality and reliability.
In order to create the experiences consumers expect in the

shortest timeframes, manufacturers are changing the way they
develop products. The market leaders are adopting data
management solutions to increase their capacity for innovation
and to improve the quality and reliability of their products,
while simultaneously optimizing the performance of their
platforms.
Technology enables to develop applications and products that

integrate complex, real-world information in order to create new
functionality, new business models, and unique customer
experiences — all within the challenging constraints of a
fiercely competitive marketplace.
Need Of The Study
The need of the study is related to “LG Electronics

Company’s and the dealers of LG Electronics .It includes the
concept relating to the world profile of LG Electronic goods.
To know the perception or views of dealers their

importance and to know the facts about their dealership business
and also their opinions about the LG Electronics I have taken up
the study.
The study is various problems faced by the dealers towards

the distribution network can be clearly identified. Therefore this
will help to compact to adapt certain distribution strategies to
over come this issue
The study is to find out awareness on Electronics goods

with reference to LG Electronics.
Methodology of the study
This project has been done under the descriptive research

design. Descriptive research design is one that simply
describes something such a demography character sticks of
dealers who are in distribution of various products of LG
Electronics’. The descriptive study is typically concerned
with determining frequency with which something occurs or
how two variables very together .This study is typically
guided by an initial hypothesis.
. Descriptive design is used from the purpose of research
is –
 To describe the character sticks of certain groups who

use products with different age, sex and education.
 To estimate the properties of people in a specified

population who have behave in certain way
 To make specific predictions
 To determine whether certain particulars are associated.
Data collection methods
 Primary Data
 Secondary Data
Primary Data Primary data was collected through designed

questionnaire from the respondents (dealers) investigates a
particular problem at hand.
Secondary data. Secondary data includes these data which
was collected for earlier some research work and are
applicable in the study the research has presently undertaken
and also from various magazines, journals, company
broachers etc.
Objective of the study
 To know the different product being marketed by LG in

study area
 To know the different competitors of products of LG being

marketed in the study Area.
 To know the level of satisfaction of LG dealer
 To study and identify the problems being faced by dealers

in the study area.
 To provide suggestion wherever necessary for

improvement of dealers satisfaction.
Limitations
 The scope of the project was confined to the twin cities of

Hyderabad and Secundreabad.
 The project is also confined by the time factor an extensive

research of just 45 days.
 An entire study on distribution was not possible due to

time factor.
INDUSTRY PROFILE:
The electronics industry in India dates back to the early

1960s. Electronics was initially restricted to the development
and maintenance of fundamental communication systems
including radio-broadcasting, telephonic and telegraphic
communication, and augmentation of defense capabilities. Until
1984, the electronics sector was primarily government owned.
The late 1980s witnessed a rapid growth of the electronics
industry due to sweeping economic changes, resulting in the
liberalization and globalization of the economy. The economic
transformation was motivated by two compelling factors - the
determination to boost economic growth, and to accelerate the
development of export-oriented industries, like the electronics
industry.
The electronics industry has recorded very high growth in

subsequent years. By 1991, private investments - both foreign
and domestic - were encouraged. The easing of foreign
investment norms, allowance of 100 percent foreign equity,
reduction in custom tariffs, and de-licensing of several
consumer electronic products attracted remarkable amount of
foreign collaboration and investment. The domestic industry
also responded favorably to the policies of the government. The
opening of the electronics field to private sector enabled
entrepreneurs to establish industries to meet hitherto suppressed
demand.
Improvements in the electronics industry have not been

limited to a particular segment, but encompass all its sectors.
Strides have been made in the areas of commercial electronics,
software, telecommunications, instrumentation, positioning and
networking systems, and defense. The result has been a
significant trade growth that began in the late 1990s.
Despite commendable achievements in the sphere of electronics,
considerable infrastructural improvements remain a priority.
Water, power, telecommunications, and transportation sectors
must still be augmented so that high economic growth can be
sustained.
Driven by computer and computer component sectors, the

Indian electronics industry is poised to take off at growth rates
surpassing even those of China,
However, India's total electronics market will remain well

behind China's electronics industry, which was worth $272
billion in 2006, compared with India's $11.5 billion for the same
year. It is the expected growth rate of India's electronic segment
that caught the eye of the market research firm. In-Stat expects
India's electronics market to log a compound annual growth rate
of 23 percent, enabling it to reach $40 billion in sales by 2010.
In-Stat said the Indian market will be driven by low labor and
raw materials costs as well as by an abundance of available
engineering skills. The country's substantial population will also
help spur electronics sales. There are some hurdles to growth,
though.
"Major challenges facing the Indian electronics
manufacturing market are an infrastructure that needs to be
improved at the earliest possibility, easing of foreign investment
procedures, which is underway, and a restructured government
tariff that now makes domestically manufactured goods more
expensive than imported goods with zero tariff”
India's growing middle class of some 330 million now has
enough disposable income to purchase consumer goods
including computers and electronics devices.
Electronics and Information Technology (IT) industry in
India is one of the fastest growing sectors of the Indian
Economy with a growth of 22% in production and 26% in
exports during 2005-06. The industry achieved a Compound
Annual Growth Rate (CAGR) of 25% in production and 41% in
exports during the last 5 years.
With a CAGR exceeding 48% in turnover and 52% in
export over the last decade, the Software and Services Sector
has emerged as the fastest growing Sector of the Indian IT
industry. Software production during 2003-04 was worth Rs.
708.5 billion. The Indian IT Enabled Business Process
Outsourcing (ITES-BPO) industry is estimated to have grown
by about 75% during 2003-04. The total export revenues of the
Indian IT-enabled services industry are projected at more than
Rs. 120 billion, up from Rs. 71 billion in 2001-02.
The production of IT and electronics during 2008-09 is at
Rs. 1,146.5 billion as compared to Rs. 970 billion in 2006-07, of
which the share of Software is Rs. 708.5 billion and Electronics
Hardware Rs. 438 billion.
Consumer electronics is the largest sector of Electronics
Hardware industry and accounts for almost 35 per cent of the
total electronics hardware production. The Colour TV segment
contributes over 60 per cent of the turnover of the Consumer
electronics industry with other products being audio products,
DVD units and microwave ovens.
During the year 2006-07, production of computers was worth
Rs. 68 billion. The total PC population in India in April 2006
was estimated to be over 8.0 million. The penetration of
computers in commercial and domestic segments in the country
is approximately in the ratio of 80:20 respectively. With 3.7
million connections, the Internet penetration is currently at a
mere 0.37% of the population.
In control instrumentation and industrial electronics,
ultrasound equipment and uninterrupted power supply are major
export items. In industrial electronic products group, mixed
performance was observed. The domestic production in this
sector is estimated to be around Rs. 81 billion for the year
2009-10.
Electronic Components
Total electronic components production during 2008-09

was Rs. 76 billion, of which 60% is accounted for by the
television industry and 10% by audio industry. The balance 30%
caters to the requirement of professional electronic sector,
namely, telecommunication and industrial sector. This trend has
remained stable for last many years. The demand of surface
mount components, display devices, micro-electronic, opto-
electronic, semiconductor devices, etc., continued to be met by
imports due to limited or non-existent manufacturing base in the
country.
Exports
A fairly good measure of success has been achieved on

export front. The export performance of electronics and IT
industry was Rs. 615 billion in
2008-09. Exports have increased not only in financial terms but
also in terms of variety of items exported. To take advantage of
growing world trade, 100% Export Oriented Zones, Software
Technology Parks and Electronics Hardware Technology Parks
have been set-up in the country.
Policy of Liberalization
The electronics industry as a whole, with the exception of

aerospace and defense electronics, has been fully delicensed.
Fiscal, investment and trade policies for the electronics sector
have also been liberalized. All components, raw materials and
capital goods are freely importable. Sector specific schemes
have been introduced to attract foreign investment and provide a
duty free environment for export of electronic hardware and
software under the Export Oriented schemes.
During the last eight years, the telecom sector has seen
continued liberalization. Telecom services, which were the sole
monopoly of the Government till 1994, were opened to the
private sector, the policy making functions of the Government
were separated from those of providing services and the private
sector was allowed to provide telecom services. An independent
Telecom Regulatory Authority of India (TRAI) has been set up
to act as a watchdog body on matters related to telecom services.
The Department of Telecommunications, which was providing
telecom services as a sole monopoly, was corporative in 2000.
The National Long Distance Services on the domestic routes
were also opened to the private sector.
These liberalized policies have given a boost to
telecommunication services. From a total of 18 million
telephone connections in 2001, this sector has seen a rise to 75
million connections in March 2009 of which 45 million are
fixed connections and 30 million are mobile connections.
Fiscal policy measures were launched to reduce duty rates from
the earlier high duty regime. In the software sector, the import
duty has been brought down to zero.
With deli censing of the entire consumer electronics
industry and liberalization in foreign investment and Export-
Import policies, the country is witnessing inflow of new
investments, restructuring of existing activities, diversification
of the product range and an intensely competitive environment.
All the renowned global brands have either established
production facilities in the country or are present in the market
through technical/financial collaborations, thus giving consumer
a wider choice in terms of product features, technology quality
and competitive prices.
Business Potential
The current penetration and targets by the year 2009-10

for different items in India are as follows:
Hardware production projections for India are from Rs. 470
billion in 2008-09 to Rs. 690 billion in 2009-10. During 2009-
10, demand for Indian hardware was US$ 15.96 billion and
supply was only US$ 7.48 billion. By 2010-11 the demand for
Indian hardware will be US$ 93.2 billion.
With existing policy framework, supply will be only US$
22.3 billion thus gap being US$ 70.9 billion. The Indian
components sector has been one-sixth of the total hardware
production. Thus for a demand of US$ 93 billion hardware by
2010-11, the components requirement will be US$ 15 billion.
Even to meet half this by local production would mean an
Indian components industry of US$ 7.5 billion then. This is
more than doubling every three years.
The production of semiconductor devices has been
largely confined to discrete small signal (diodes and transistors)
and power devices (rectifiers, SCR’s and power transistors). A
few units are also engaged in the manufacture of integrated
circuits for consumer and telecom applications, application
specific integrated circuits (ASICs) etc.
A few units have also been manufacturing transistors in
surface mount packages, namely, SOT- 23 largely for export. A
few units have also taken up production of semiconductor
devices on contract manufacturing basis for MNC’s of TO-92
package.
A number of units are also engaged in the manufacture of
hybrid micro circuits (thick film and thin film) for telecom
applications and resistor/capacitor arrays for general purpose
applications. Opto-electronic devices, such as, LEDs, LCD
display and solar photo voltaic cells are being manufactured by
some units. There is no production base for devices like lasers,
infra-red detectors, sensors and other components for fiber optic
communication system.
Impact Analysis - Consumer Durables

Burgeoning Indian middle class to drive demand
India has a huge middle class population with rising
income levels and growing aspirations. This, along with easy
availability of consumer finance, will drive the demand for
consumer durables. In the medium term, LCDs and ACs are
expected to continue to grow in double digits, while
refrigerators and washing machines are likely to record a
moderate growth of 5-10 per cent. While LCD prices are
expected to decline marginally, prices of white goods will
remain stable or increase marginally due to rising input costs.
Air Conditioners
The demand for ACs is expected to grow stupendously at

a compounded rate of 20 per cent during 2009-10 to 2010-11.
Refrigerators
After a flat growth in 2008-09, the industry grew by 10

per cent Y-o-Y during April-December 2009. The aggressive
focus by Korean MNCs (particularly on the frost-free segment)
will result in an 8-10 per cent growth in the medium term.
LCD Televisions
LCD demand surged by 21 per cent Y-o-Y during April-

December 2009 to cross 6 million units, and is expected to grow
by 10-15 per cent in the medium term. Growth will be
substantial in the LCD segment, which is expected to account
for 30-35 per cent of LCD sales in 2009-10 (up from about 25
per cent in 2008-09).
Washing Machines
The washing machines segment is expected to end the
year at about 1.4-1.5 million units, and is expected to grow by 5
per cent in the medium term.
Impact Factors
A. The reduction in the import duty on consumer durables will
not affect the domestic industry, as domestically manufactured
consumer durables will continue to remain price-competitive
even at the revised duty levels. However, players concentrating
on the premium end / higher capacity segments (such as LG,
Samsung and Sony) will benefit, as these products are mostly
imported.
B. The removal of the special excise duty (SED) of 8 per cent on
ACs, along with a corresponding reduction in the abatement rate
to 30 per cent (35 per cent last year), will result in an effective
excise duty of 11.2 per cent (15.6 per cent). This will lead to a
Rs 700-900 decline in AC prices, which will lead to a
corresponding rise in demand, as ACs have displayed significant
price elasticity in the past.
C. The decline in the import duty on colour picture tubes
(CPTs), along with the fall in the duty on glass components used
for manufacturing CPTs, will result in a Rs 100-300 decline in
CPT prices. While the decline will be partially passed on to
consumers, the quantum of the fall will be higher in the flat and
large size CRT prices. Overall, this will have a marginally
positive impact on CRT sales. LG, Samsung, and Mirc will be
the key beneficiaries. In case of Videocon, the impact of CPT
Price decline will be more than offset by the corresponding fall
in duty of glass shells.
The reduction in import duty on alloy steel, copper, zinc and
polymers (ABS/HIP) will be marginally positive for the
refrigerators, washing machines and the air-conditioner
segments.
D. The expected rise in disposable income of consumers
(following the change in the tax brackets and norms) is expected
to induce demand.
COMPANY PROFILE:
Vision
LG Electronics pursues its 21st century vision of

becoming a true global digital leader who can make its
customers worldwide happy through its innovative digital
products and services .LG Electronics sets its mid-term and
long-term vision a new to rank among the top 3 electronics,
information, and telecommunication firms in the world by 2010.
As such, LG embrace the philosophy of "Great Company,

Great People," whereby only great people can create a great
company, and pursue two growth strategies involving "fast
innovation" and "fast growth." Likewise, LG seek to secure
three core capabilities: product leadership, market leadership,
and people-centered leadership.
LG Electronics, Inc. was established in 1958 as the pioneer

in the Korean consumer electronics market. The company is a
global force in electronics, information and communications
products with 2009 annual sales of US $40 billion
(consolidated). With more than 66,000 employees working in 76
subsidiaries in 39 countries around the world, LG Electronics is
comprised of four main business companies including Mobile
Communications, Digital Appliance, Digital Display, and
Digital Media.
LG Electronics' goal is to enable the intelligent networking of
digital products that will make consumers' lives better than ever.
Established October 1, 1958
Main Product Mobile Communications Company

Wired -wireless handsets and network services, CDMA,
GSM, 3G(WCDMA / cdma2000)
Digital Appliance Company

Air Conditioner, Refrigerator, Microwave Oven, Washing
Machine, Vacuum Cleaner, Compressor for Air Conditioner,
Compressor for Refrigerator
Digital Display Company

Digital TV, PDP, Monitor
Digital Media Company

CD-ROM Drives, DVD-ROM Drives, CD Rewritable
Recorder, VCR, DVD Player, Audio, Security System,
Recording Media, Video Phone, PC Camera, Banking
Automatic System , PCB
Number of Employees 66,614(31,614 in Korea/ 35,000
overseas)
The company has been undertaking 'Super A' pioneering

activities since 1993, seeking to strengthen its competitiveness
and create profitability. The company is also practicing TL
2009, a technological management strategy aimed at building
and sustaining prominence in the global market.
In addition, LG Electronics is carrying out the Six Sigma

Campaign to achieve an ideal management base.
LG Electronics is exerting its best efforts to respond
positively to the fast-changing business environment and to
shore up its global competitiveness in its core businesses
Labor-Management Relation
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, with each party on equal footing and
working together based on mutual trust and respect.
By shifting the paradigm from an employee-employer
relationship to that of labor-management, LG Electronics and its
members discard the old vertical relationships of pursuing and
keeping their respective shares. Instead, a horizontal relationship
type is embraced wherein workers and management assume
their functions and roles in pursuit of a common goal: boosting
competitiveness and enhancing the quality of life while
promoting mutual trust and respect. Because of this harmonious
relationship, the company's labor and management work
together to establish and cultivate a world-class corporate
culture.
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.
Fair and Transparent Management
LG Electronics management seeks to employ fair and

transparent methods in all its transactions to compete fairly and
to elicit customer acceptance and loyalty. LG Electronics aims
to become a superior and highly competitive company based on
customer-oriented services. A fair and transparent management
is one of LG Electronics’ corporate ethical criteria.
LG Electronics intends to continue this kind of

management, striving to be known as a corporation that
encourages fair competition while doing its part to promote
social responsibility. Many years since the company declared
the LG Electronics Ethical Code it has taken the initiative in
practicing fair and transparent management.
LG Electronics strongly believes that this is the way

towards achieving the status of a superior, world-class
corporation. The company will continue to pursue its goals
together with its partners in an environment of mutual trust and
cooperation.
Brand platform
In an effort to establish a global identity for LG

Electronics, a brand platform that strives to encompass the many
facets of the LG mission has been developed.
A strategic framework that contains the necessary

elements and information to guide brand expression,
communication, action, behaviors.
No sooner did the company enter India than it found this
to be a large market for its IT products as well. LG’s
experiments may have resulted in some initial snarls, but the
company is now successful in terms of both market penetration
and presence. Year-on-year LG is registering tremendous
growth in its PC components business. How has this been
possible? Not that the company didn’t face any competition
when it came here, but LG has fought well to get where it has
today.
LG has grown by about 76 percent in monitors this year,

compared to 2008-09. The company has also recorded nearly 30
percent growth in the optical storage devices (OSD) segment in
2009-10 as compared to the last fiscal. The high growth for the
company in the latter segment came from the CD-Writer sub-
segment. If we take this sub-segment in isolation, we see that it
grew by about 200 percent this year as compared to the
corresponding period last year. Sales revenues went up by 44
percent, and the company achieved 43 percent growth in volume
terms. The total sales turnover for the IT division touched Rs
199 crore, against 138 crore a year ago. The company as a
whole posted a 45 percent jump in sales revenue for the same
period. In the IT division OSD posted a growth of 30 percent in
sales revenues, while the monitor division registered a growth of
60 percent in revenue and 73 percent in volumes.
Channels are the lifeline

This growth, according to company officials, has been
possible due to a focused channel strategy. By and large, the
channel too seems to have found LG business to be profitable.
The company believes in stock rotation; it doesn’t believe in
dumping stocks on its channel partners. "LG provide stocks of
LG products and simultaneously create the pull factor. Thus, the
stock that the company sends to its channel partners is sold in
three to four days. When we get information about a shortage of
stock we feed them fresh stock. What we have observed is that
at any given point of time stock held by the channel doesn’t
remain there for more than a week". Channels therefore are kept
happy because their cash flow is rotated fast. As a result, there is
no price undercutting. In the whole chain, the channel fraternity
feels that prices are stable and do not fluctuate because of
overstocking and under stocking. This simply translates into a
scenario where everybody involved in the channel makes
money. There is no excess inventory, which means no flab on
the channel’s belly.
How is it done? It’s a cyclic parameter. "You start with

an increased pull. That pull is generated by launching various
attractive schemes and promotional activities. All the
programmes that the company carries out for sales promotion
are interlinked.
The IT distribution process involves multiple tiers, unlike

any other industry. In other segments like electronics and home
appliances, there is a maximum of two tiers in the channel—
from the vendor it goes to a dealer and finally to a customer. But
in IT the product goes from the vendor to the distributor to a
master reseller to a smaller reseller or a system
assembler/consumer. Thus, the company feels it is essential to
energize all the tiers involved in selling an LG product. "The
entire hierarchy of this channel has to be. For end-user pull the
company suggests many bundling propositions. When all these
schemes are put together, the company gets the pull factor
activated for its products. This results in greater push for LG
products as compared to others. To top it all, supplies are very
consistent in the market because the company operates on a
cash-and-carry basis, unlike other players.
To enhance the pull factor, LG has been announcing a lot

of schemes from time to time. "LG has a unique point-based
incentive scheme for the channels on a very large scale. The
way it is administered is unique to LG, the company has
implemented for the past one year. It has virtually forced other
market players to consider similar deals.
Timely settlement is another key factor that helps LG sell

more in the areas it operates in. Company officials boast of a
settlement period of two months, and this actual period cannot
be reduced by any means. "Data from across the country is
collated and invoices are taken into account. The data entry and
validation process takes this much time," Based on these
calculations, the dealer or channel partner is informed about the
points they have scored by selling LG products. That leads to
the final stage of sending them their incentives/gifts.
LG is the only company to successfully introduce and run

a regional distribution model in India. This model is 100 percent
successful. Regional distribution means there is no national
distributor and thus no monopolistic attitude. The model which
was adopted last year, has worked to the advantage of the
company. There is quicker rotation of stocks, and better
penetration into B-, C-, and D-class markets. "Today LG have
distributors representing geographies like Dibrugarh in Assam.
These distributors work directly with the company," The
products have also become very competitive since the company
has cut many tiers and introduced value additions to fill the gap.
Now LG feels the time has come to consolidate its success.
Compare this to the practices of many other IT firms in
India. A credit line is established by the national distributor.
People get credit for a certain period, which drives them to
overstock. This results in overtrading, which gives birth to price
undercutting. Ultimately there is a sharp decline in profits for
the entire channel fraternity. LG is proud to get out of this
vicious circle—there is no overstocking, no price undercutting
and no overtrading. He claims that due to this successful
strategy, more and more channel partners are joining hands with
LG. They have also been reciprocating by providing them better
schemes and incentives.
New products will bring new markets
LG’s new initiative is to provide value-added products

around the PC to its customers. The company launched an
optical mouse some time back, which has since achieved
tremendous success. LG announced the launch of multimedia
keyboards as part of its ongoing strategy to penetrate all spheres
of the PC market. This product was available from mid-
September 2003.
LG has also launched a ‘My PC’ initiative. Though not as

talked about as Samsung’s high-profile and well-known ‘Build
your own PC’ scheme, the company feels that the launch was
quite successful and claims the response is encouraging. B- and
C-class cities were key targets for the scheme. The peripherals
are being offered to the channels that cater to the assembled PC
market. When it comes to the branded PC market, LG has all the
strengths/core competencies to manufacture a PC. "LG wanted
to go a little further and add value to the product, and that’s how
the PC initiative came into being But he candidly accepts that
the company has still to achieve the magic numbers as far as
‘My PC’ is concerned. Last month LG launched AMD-powered
PCs catering to the value segment. The company says that
though the acceptance of Linux is increasing day by day, sales
of PCs with Linux have not picked up very strongly; however,
refuses to share any numbers. Ship PCs with the Linux OS, but
if the consumer wants to use any other OS, it’s his choice .LG’s
strategic relationship with Maxtor has also got it the desired
momentum; it offers Maxtor hard disks in its PCs.
Won’t retailing kill the channels?

Stands to get more benefits, and once the strategy is in
place, people will understand how it works. As of now, the three
retail LG outlets in Delhi belong to its channel partners.
What’s next?
The company is believed to be toying with the idea of
introducing two new products for the Indian market—the LG
laptop and LG home-based PC server for the small office, home
office environment.
MARKET SITUATION FOR DIFFERENT LG

PRODUCTS
Air conditioners
LG Electronics India Pvt Ltd hopes to sell five lakh air-

conditioner units in the domestic market in 2010. This will
translate into revenue of Rs 950 crore. In 2009, LG Electronics
India sold 3 lakh air-conditioner units in India.
The size of the Indian market for air-conditioners in the
organized sector was expected to touch one million units in the
current calendar year. Air-conditioner sales in India were
expected to go up further to two million units.
In 2009, the high-end new range would account for 10 per

cent of LG's air-conditioner sales. These air-conditioners were
available at capacities of between one tonne and three tonnes
and were priced in the Rs 23,000-Rs 56,000 range. 90 per cent
of the new range was presently being imported from South
Korea, which manufacturing the new range in India would be
considered when sales volumes pick up. At present, LG
Electronics has the capacity to manufacture six lakh air-
conditioner units at its manufacturing facilities at Noida and
elsewhere.
Air-conditioner sales were expected to account for 25 per

cent of LG Electronics India's total revenue by 2010. The
company's share of the domestic market for air conditioners in
the organized sector has presently been pegged at 31 per cent.
This is expected to go up to 45 per cent during the year ending
December 31, 2010
In 2009, LG Electronics India exported 75,000 air-

conditioner units, mostly to neighboring countries. In 2010, the
company hopes to augment air-conditioner exports to 1, 20,000
units.
Mobiles
With the liberalization of the telecom sector in 1994,

Indian telecom industry has witnessed a significant boom. It is
estimated that India is witnessing an addition of around two
million new mobile phone users a month. The country’s mobile
user base has already crossed the fixed line base. Presently,
there are about 45 million mobile phones users as compared to
44 million fixed phone line users in India.
Mobile telephony market in India has grown at a rapid

pace in the last decade. However, still the level of penetration is
very less when compared with the level of penetration in other
developing nations such as China, Malaysia. The mobile
penetration rate in India is just 2.6 per 100 persons. The low
penetration presents a huge opportunity for the companies
operating in this space. With the significantly huge domestic
demand for mobile phones and increasing electronics
manufacturing capabilities, India is fast emerging as a preferred
destination for mobile handset manufacturing. Several global
majors such as Intel, LG have already announced their plans to
set up manufacturing facilities in India.
Recognized as India’s one of the most industrialized State,

Gujarat is one of the most ideal locations in the country for
manufacturing of mobile handsets. To promote this industry in
the State, Government of Gujarat invites leading global and
Indian mobile handset manufacturing companies to set up their
manufacturing unit. Government of Gujarat is determined to
provide all kinds of necessary support required for setting up
such a project in the State.
Market Overview
The world over, telecom is becoming wireless. According

to IDC, the global mobile phone market has grown by more than
648 million units in 2009, reaching 1.8 billion total subscribers
worldwide.
The Indian mobile phone market grew by more than 32

million subscribers in 2009. Having an advantage of huge
domestic market, it is expected that India will feature among the
top five markets in terms of sales of handsets and among the top
three in terms of subscribers in the coming years. The current
mobile handset market in India is pegged at $2.5 billion. More
than 37 million handsets are likely to be sold in India in 2010,
with the annual number rising to 50 million by 2011.
Excellent policy framework (Telecom Policy) providing
conducive business environment.
Increase in urbanization & disposable income
Extensive rollout and coverage by service providers.
Increasing affordability (Over 90% drop in tariff since
commencement of service)
100% Foreign Direct Investment (FDI) in the telecom
equipment manufacturing sector.
With such a huge domestic market and having all
ingredients of low cost quality manufacturing, India is fast
emerging as a preferred manufacturing destination for mobile
phone manufacturers. Several global Telecom majors (mobile
handset manufacturing) such Nokia, LG, Samsung etc are either
evaluating or have already announced to set up their
manufacturing base in the Country. These companies are
looking to capitalize the cost advantage offered by the country.
It is estimated that manufacturing of mobile handsets in India
will reduce the cost of mobile handsets by around 30% for the
domestic users.
The recent policy changes and initiatives by the Central

Government have also positioned India as a lucrative location
for mobile handset manufacturing. As per the recent policies, for
the telecom equipment segment (which also includes
manufacture of mobile handsets), the requirement for obtaining
an industrial license has been abolished. The Government has
also allowed 100%
COLOUR TV
The Colour TV industry in India has seen a gamut of

changes in the past one decade as liberalization set in the Indian
subcontinent making its market highly competitive and
consumer driven. The Indian consumer is indifferent in
choosing the brand, since a lot of close substitute available in
the market. In the process the producers became price takers
rather than price setters and Colour T.V. became necessity good.
The Indian consumer has changed ever since the India
liberalized its economy. The Indian consumer not only wants a
variety in the products but also demands high quality and
service in those products. The consumer durable sector
comprises of a gamut of products each with a cheesed off past.
However considering television to be a pioneer lifestyle product
our research paper delves into those facts, reasons and trends
that substantiate this phenomenal change. With the fast
changing liberalization policies, changing and growing demands
of the consumers made the industry competitive. The constant
desire of the companies (domestic or international) to have a
major share in the market often leads them to die many deaths
which has became a hackneyed phenomenon in this sector of
Liberalized India if the companies are not in able to cope with
changing reforms and the changing tastes and preferences of the
consumers. Hence we made an attempt to analyze the factors
that influence the buying decision of the consumer in choosing
the brand by taking the variables other than the family roles and
social influences The results revealed that the purchasing
decision of the consumer depends On Quality, Goodwill
Popularity, Affordability, Features, and Support Services of the
product, this phenomenon observed in all income groups. The
results also revealed that the brand preference is independent of
age, income and education.
Refrigerators
To add to the bewildering array of refrigerator variants and
models, brands, colours, price points, two-door, direct-cool,
frost-free, bio-fresh, DIOS and other such jargon, comes the
news of more fridge makers jumping into the fray. As if the
battle between the Korean players, LG and Samsung, and
Whirlpool, home-grown Godrej and Videocon, wasn't bruising
enough, Voltas and Ken star have also thrown their hats into the
ring with a range of models.
The more the merrier, you would say, in a market that's
promising to explode this year after a lackadaisical five per cent
average growth over the past five years. Fridge makers can take
heart from a forecast on the market put out by the Chennai-
based research agency Francis Kanoi Marketing Research. The
study on the market for durables in India, based on sample sizes
ranging from two lakh to 3.5 lakh households, says that the
refrigerator market is likely to get "charged in 2009-2010
reaching sales of 4.1-4.2 million units, from 3.65 million unit’s
in 2008-2009." 2009-10 will finish with a growth of 7 per cent
for the industry as the good monsoons and consequent better
rural incomes came after the peak summer season of April-June,
when fridge sales are at their highest. "Forty per cent of
refrigerator sales comes from the Northern markets which bore
the brunt of the drop in agricultural production the previous
year," he explains. So, fridges, like other durables, saw poor
sales. In fact, growth for fridges in 2009-2010 was merely 3.6
per cent (see chart) and 6.3 per cent in the subsequent year.
Even this year (2009-2010), only the robust sales during the
festival season led to the overall 7 per cent growth in the
category. Rural incomes do matter as the rural market
contributes 22 per cent of fridge sales.
This time around, Xavier's study says it is the slack created
due to depressed sales during the peak season last year, together
with the extended underperformance of the market over the
previous five years. "If the economic environment continues to
be positive after the next monsoon, the growth, in fact, may
touch 15 per cent. The last time a 15 per cent growth was
achieved by the refrigerator sector was way back in 1995-96.
The upswing predictions are based on the expected increase in
refrigerator sales linked with increase in sales in semi-urban
markets and the seasonality factor that comes into play for
products like fridges. With the crop harvest and the wedding
season starting in April, we are expecting direct-cool fridge
sales to show a sharp pick-up in the April-June period. The
general economic upturn and an early summer are other factors
that are expected to have a bearing on refrigerator sales.
The price erosion that has occurred in the market is
expected to further fuel the growth in this segment. The prices
would have declined by around 6-7 per cent this year compared
to prices last summer.
A robust economy combined with a good monsoon has a lag
effect on refrigerator sales and we surely expect to reap the
benefits of both this summer. In fact, penetration of fridges has
almost touched 18 per cent from a stagnant 15 per cent and the
entry-level direct-cool segment of the market continues to grow.
The upswing to falling prices, new launches in the entry-level
segment and a change in the consumer mindset wherein people
across income groups are openly seeking a more glamorous
lifestyle. It is not surprising that 20 per cent of intending buyers
of refrigerators are from SEC D2.
Potential growth in the segment to people planning to buy
products on credit. About 30-40 per cent of appliances are
bought on credit and this figure is rising, particularly in smaller
towns. Also, the refrigerator is now a very basic product and
people's aspirations are also rising.
Changing market
This year, the contours of the refrigerator market have

changed. In the past nine months, Godrej, the old stalwart, has
been overtaken by LG, which is fast acquiring supremacy in
most categories of consumer durables. According to industry
figures, Godrej currently has a 21 per cent volume market share,
Whirlpool 23 per cent and LG 24 per cent. The three take a
lion's share of the market, while Electrolux Kelvinator has a 12
per cent share. This too will change with Electrolux deciding to
drop the Kelvinator name (see box). LG's rising share in the
market has been contributed by the brute share of 38 per cent
that LG has acquired in the frost-free segment. Whirlpool
follows with a 22 per cent share, Godrej with 17 per cent and
Samsung with 16 per cent in this segment.
According to Francis Xavier, the market is primed for a

slugfest between Whirlpool and LG for market share. However,
a double-digit growth in sales in 2009-2010 will diffuse
considerably the pressure on the market leader, Whirlpool, in
withstanding the onslaught of LG. "Whirlpool happens to be the
last brand standing in the way of total domination of the
consumer electronics and appliances field in the country by LG.
The battle for supremacy between LG and Whirlpool in the
refrigerators field was set for the peak season in the first quarter
of 2009-2010. But if the purchases during this period exceed
expectations as predicted, then the ardor for a no-holds-barred
battle will simmer down with the growth of the market allowing
the sales targets to be achieved without having to wage such
battles. Though LG itself is primed for battle. As LG Electronics
sales of about 7.5 lakh fridges in 2009, and we are targeting a
growth of about 80-90 per cent this year to about 13 lakh ... we
would be overtaking the current market leader in the category
within the next couple of months."
The study on the status of fridge brands among intending

buyers in 2009 shows that Godrej still ranks very high in terms
of unaided awareness and as the most preferred brand. However,
this brand salience has not translated into sales"Godrej has been
more subdued than it needed to be "Godrej took a dip for a
while, though it came back strongly with its Pentacool model,
but now it's a fierce fight."
"It is true that Godrej is No. 1 in terms of brand recall and

preference the high brand preference as a huge potential for the
brand and the fact that Godrej is the only brand to have not lost
share to the Koreans is testimony to the inherent strength of the
brand."
Godrej market shares have been on the upswing for the

last four years going from 16 per cent in 2005-06 to 21 per cent
in 2006-07 to 22 per cent in 2008-09 and holding ground this
year.
Direct-cool vs. frost-free
In the last couple of years, frost-free refrigerators have
been showing a double-digit growth and today this segment
accounts for 20 per cent of the market, up from 16 per cent just
a couple of years ago. Volumes still come from the direct-cool
segment, which is 80 per cent of the market. One of the reasons
why the market has not grown that much for frost-free is that
everybody is promoting brands, not the concept of frost-free;
every manufacturer is just looking for numbers where it is easier
to sell. The direct-cool market is going to get even more
competitive with Voltas now jumping into the fray with LG and
Samsung, which were sourcing from Voltas, now having set up
their own plants.. With both LG and Samsung deciding to set up
their own plants Voltas decided to enter the category as a test
run under our own brand, as Voltas had spare leftover capacity
of about 50,000 units last year. Also, the minimum price
difference between a basic direct-cool fridge and a frost-free is
Rs 3,000, which doesn't help consumers to plump for the latter,
especially on a tight budget.
The dog-eat-dog competition has ensured that either prices

are stagnant or have actually fallen in the category. For instance,
a 185 liter direct-cool fridge which sold for Rs 7,500 about 2-3
years ago now sells for about Rs 6,500. Also, for example, a
Whirlpool 285 liter frost-free fridge which sold for Rs 19,000 in
August 2007 now sells for Rs 16,675 in Chennai, a more than 12
per cent drop. The industry, recent surveys have pointed out,
will take off in a big way when prices go below the Rs 4,000-
level for a basic no-frills fridge. When that happens, things
could really hot up for an industry that is used to keeping its
cool.
Blow to the coolest one
A major development which will diffuse tension in the
market place in 2006-07 is the decision of Electrolux to
discontinue the Kelvinator brand. The brand, promoted as the
`coolest one', is among the top four brands in the refrigerators
field despite neglect over the last two years Electrolux
Kelvinator as a brand has an overall market share of 12 and 14
per cent in direct cool.
Along with Godrej, Kelvinator has defined the market for
refrigerators in the country for decades now. There are several
million households owning Kelvinator refrigerators, supporting
its purchases, even today. The timing of the decision will
especially be damaging, as the company is at its weakest
because of the turmoil that it has faced over the last two years.
In an intensely competitive market, the void created by the
absence of Kelvinator will be a major opportunity for
competitors to convert Kelvinator loyalists to their own brands.
The study goes on to say that dealers, other than those
most loyal to Electrolux, will also see this as a major
opportunity to increase their sales of other brands and
consolidate their own positions with the other companies.
Whatever loyalty that Electrolux commands among the dealers
is due to the legacy and the consumer pull that the Kelvinator
brand commands. Therefore it is almost certain that Electrolux
will lose a sizeable chunk of even its diminished sales to the
competing brands, easing the pain of competition to them
considerably. The principal beneficiary will be Whirlpool,
which has been its arch rival for years. This will also lead to a
postponement of the war for supremacy between Whirlpool and
LG as both of them will find the pickings easier this year,
concludes the study.
THEORITICAL FRAME WORK
Marketing is a societal process by which individuals

and groups obtain what they need and want through creating,
offering, and freely exchanging products and services of value
with others. For a managerial definition, marketing has often
been described as “the art of selling products,” but people are
surprised when they hear that the most important part of
marketing is not selling! Selling is only the tip of the marketing
iceberg.
The American Marketing Association offers the

following definition:” Marketing is the process of planning and
executing the conception, pricing, promotion, and distribution of
ideas, goods, and services to create exchanges that satisfy
individual and organizational goals”.
Traditionally, a “market” was a physical place where

buyers and sellers gathered to buy and sell goods. Economists
now describe market as a collection of buyers and sellers who
transact over a particular product class (the housing market or
grain market); but marketers view the sellers as constituting the
industry and the buyers as constituting the market. Figure1
shows the relationship between the industry and the market.
Sellers and buyers are connected by four flows. The sellers send
goods and services and communications (ads, direct mail) to the
market: in return they receive money and information (attitudes,
sales data). The inner loop shows an exchange of money for
goods and services; the outer loop shows an exchange of
information.
COMMUNICATION
GOODS/SERVICES
INDUSTRY MARKET
(a collection (a collection
of sellers) of buyers)
MONEY
INFORMATION
Fig.1. A SIMPLE MARKETING SYSTEM
MARKETING PROGRAM:
The marketer’s task is to build a marketing program

or plan to achieve the company’s desired objectives. The
marketing program consists of numerous decisions on the mix
of marketing tolls to use. The marketing mix is the set of
marketing tools the firm uses to pursue its marketing objectives
in the target market.
McCarthy classified these tools into four broad

groups that he called the four Ps of marketing: product, price,
place, and promotion.
MARKETING
MIX
TARGET
MARKET
Place
Product Channels
Variety Coverage
Quality Assortments
Design Locations
Features Inventory
Brand name Price Promotion Transport
Packing List price Sales promotion
Sizes Discounts Advertising
Services Allowances Sales force
Warranties Payment period Public relations
Returns Credit terms Direct marketing
Fig.2.THE 4P COMPONENTS OF THE MARKETING MIX
The particular marketing variables under each P are
shown in Figure2. Marketing-mix decisions must be made for
influencing the trade channels as well as the final consumers.
Figure3 shows the company preparing an offering mix of
products, services, and prices, and utilizing a promotion mix of
sales promotion, advertising, sales force, public relations, direct
mail, telemarketing, and Internet to reach the trade channels and
the target customers.
PROMOTIONAL MIX
Sales
promotion
OFFERING MIX
Advertising
Products Distribution Target
Company Sales force
Services channels customers
Prices
Public
relations
Direct mail,
telemarketing
and internet
Fig.3.MARKETING-MIX STRATEGY
The firm can change its price, sales force size, and
advertising expenditures in the short run. It can develop new
products and modify its distribution channels only in the long
run. Thus the firm typically makes fewer period-to-period
marketing-mix changes in the short run than the number of
marketing-mix decision variables might-suggest.
Note that the four Ps represent the seller view of the

marketing tools available for influencing buyers. From a buyer’s
point of view, each marketing tool is designed to deliver a
customer benefit. Robert Lautenberg suggested that the sellers
four Ps correspond to the customers four Cs.
Four Ps Four Cs
Product Customer solution
Price Customer cost
Place Convenience
Promotion communication
Winning companies will be those that can meet customer needs

economically and conveniently and with effective
communication.
MARKETING CHANNELS:
Marketing channels are behind every product and

service that consumers and business buyers purchase
everywhere. Yet in many cases, these end-users are unaware of
the richness and complexity necessary to deliver what might
seem like everyday items to them. Usually, combinations of
institutions specializing in manufacturing, wholesaling,
retailing, and many other areas join forces in marketing
channels. These deliver everything from mutual funds to books,
from medical equipment to office supplies, to end-users in both
businesses and households. The following proceedings defines
the concept of a marketing channel, and then discusses the
purpose for using marketing channels to reach the marketplace,
the functions and activities that go on in marketing channels to
reach the marketplace, the functions and activities that go on in
marketing channels; membership in marketing channels; and
how a framework analysis can improve the channel decisions
made by an executive acting as a channel manager or designer.
“A marketing channel is a set of interdependent
organizations in the process of making a product or service
available for use or consumption”.
The definition bears some explication. It first points
out that a marketing channel is a “set of interdependent
organization.” That is, a marketing channel is not just one firm
doing its best in the market-whether that firm is a manufacturer,
wholesaler, or retailer. Rather, many entities are typically
involved in the business of channel marketing. Each channel
member depends on the others to do their jobs.
What are their jobs? The definition makes clear that
running a marketing channel is a “process.” It is not an event
distribution frequently takes time to accomplish, and even when
a sale is finally made, the relationship with the end-user is
usually not over. For example, think about a hospital purchasing
a piece of medical equipment and its demands for post sale
service to see that this is true.
Finally, what is the purpose of this process? The

definition claims that it is “making a product or service available
for use or consumption. “That is, the purpose of channel
marketing is to satisfy the end-users in the market, be they
consumers or final business buyers. Their goal is the use or
consumption of the product or service being sold. A
manufacturer who sells through distributors to retailers, who
serve final consumers, may be tempted to think that it has
generated “sales” and developed “happy customers” when its
sales force successfully places a product in the distributors
warehouses. This definition argues otherwise. It is of critical
importance that all channel members focus their attention on the
end-user.
WHAT IS THE WORK OF THE MARKETING
CHANNEL?
The work of the channel includes the performance of

several marketing flows. We use the term flows rather than
functions or activities to emphasize that these processes often
flow through the channel, being done at different points in time
by different channel members. In institutional setting, one often
hears of the need to carry inventory; to generate demand through
selling activities to physically distribute product; to engage in
after-sales service; and to extend credit to other channel
members or to end-users. We formalize this list in figure4
showing eight universal channel flows as they might be
performed in a hypothetical channel containing producers,
wholesaler, retailers, and consumers. As the figure4 shows,
some flows move forward through the channel (physical
possession, ownership, and promotion) whereas others move up
the channel from the end-user (ordering and payment). Still
other flows can move in either direction or are engaged in by
pairs of channel members (negotiation, financing, risking).
We have left out of figure4 an important flow that

permeates all the value-added activities of the channel; the flow
of information. Information can and does flow between every
possible pair of channel members in both routine and
specialized ways. Retailers share information with their
manufacturing suppliers about sales trends and patterns through
electronic data interchange relationships; when used properly
this information can help better manage the costs of performing
many of the eight classic flows (e.g., by improving sales
forecasts, the channel can reduce total costs of physical
possession through lower inventory holding).
CUSTOMERS
WHOLESALERS
RETAILERS
PRODUCERS
Physical Physical Physical

Possession Possessi Possession
on
Ownership Ownership Ownership
Promotion Promotio Promotio

n n
Negotiatio Negotiatio Negotiatio
n n n
Fig.4.MARKETING FLOWS IN CHANNELS
Financin Financin Financin
g g g
Risking Risking Risking
Ordering Ordering Ordering
Paymen Paymen Paymen
t t t
Commercial Channel Subsystem
So important is the information content that logistics managers
call this the ability to “transform inventory into information.
Manufacturers share product and salesmanship information with
their distributors, independent sales representatives, and
retailers, to improve the performance of the promotion flow by
these intermediaries. Consumers can give preference
information to the channel, improving the channel’s ability to
supply valued services. Clearly, producing and managing
information well is at the core of developing distribution
channel excellence.
About channel flows a few remarks are in order here.

First, the flows presented in Figure may be done in different
ways for different parts of a company’s business. Consider, for
example, the various ways in which physical possession flows
are handled in the automobile channel. In the early to mid-
1990s, automobile manufacturing supply chains in Great Britain
were managed in a lean, just-in-time manner, but spare-parts
supplies were not. The channel for the original product and that
for the spare parts were thus not managed jointly. However,
margins on new-car sales started to fall in the mid-1990s,
causing manufacturers to pay new attention to the spare-parts
channel and to contract with outside logistics company experts
to help rationalize the spare-parts system. The different nature of
new-car and spare-parts sales now necessitates a custom
approach to managing the physical possession of each. As a
result, the channel manager may well want to represent these
two physical possession activities separately, because they
represent important, but different, flows in the movement of
products (cars versus spare parts) to the market.
In addition, not every channel member need

participate in every flow. Indeed, specialization in the
performance of channel flows is the hallmark of an efficiently
operating channel. For example, Figure depicts a channel in
which physical possession of product moves from the
manufacturer to wholesalers to retailers and finally to end-users.
But an alternate channel might involve not stocking wholesalers,
but instead manufacturers’ representatives, who generally do not
participate in the physical possession or ownership flows
because they do not handle physical product. In such a case, the
physical possession flow might be performed by the
manufacturer and retailer, but not by other intermediaries, on its
way to the final end-user.
It is also important to note that the performance of

certain flows is correlated with that of other flows. For instance,
any time inventories are held by one member of the channel
system, a financing operation is also underway. Thus, when a
wholesaler or retailer takes title and assumes physical
possession of a portion of a manufacturer’s output, the
intermediary is financing the manufacturer. This is consistent
with the fact that the largest component of carrying cost is the
cost of capital tied up when inventories are held in a dormant
state that is, not moving toward final sale. Other carrying costs
are obsolescence, depreciation, pilferage, breakage, storage,
insurance, and taxes. If that intermediary did not have to tie up
its funds in inventory holding costs, it would instead be able to
invest in other profitable opportunities. Capital costs are thus the
opportunity costs of holding inventory. Consider the following
example of a manufacturer recognizing and re0ponding to this
phenomenon.
WHO BELONGS TO A MARKETING CHANNEL?
The key members of a marketing channel are

manufacturers, intermediaries (wholesale, retail, and
specialized), and end-users (business customers or consumers).
The presence or absence of a particular type of channel member
is dictated by its ability to perform the necessary channel flows
to add value to end-users. Often one channel member can be
considered the “channel captain.” This is an organization that
takes the keenest interest in the workings of the channel for this
product or service, and that acts as a prime mover in establishing
and maintaining channel links. The channel captain is often the
manufacturer of the product or service, particularly in the case
of branded products.
MANUFACTURERS
The manufacturer can be the originator of a service as well as
the manufacturer of a product.
1. Some manufacturers brand their products and thus are

known by name to end-users, even if they use
intermediaries to reach end-users.
2. Other manufacturers make products but do not invest in a
branded name for them. Instead, they do private-label
production, and the downstream buyer puts its own brand
name on the product.
All of the product manufacturers are involved in

physical possession and ownership flows, until the product
leaves their manufacturing sites and travels to the next channel
member’s site. Manufacturers also engage in negotiation with
the buyers of their products to set terms of sale and
merchandising of the product. The manufacturer of a branded
good participates significantly in the promotion flow for its
product.
INTERMEDIARIES
The term intermediary refers to any channel member
other than the manufacturer or the end-user (individual
consumer or business buyer). We differentiate among three
types of intermediaries; wholesale, retail, and specialized.
Wholesalers include merchant wholesalers or

distributors, manufacturer’s representatives, agents, and brokers.
A wholesaler sells to other channel intermediaries, such as
retailers, or to business end-users, but not to individual
consumer end-users. Merchant wholesalers take both title to and
physical possession of inventory; store arrange for financing,
ordering, and payment with their customers. They make their
profit by buying at a wholesale price and selling at a marked-up
price to their downstream customers, pocketing the difference
between the two prices, net of any distribution costs they bear.
Manufacturer’s reps, agents, and brokers typically do not take
title to or physical possession of the goods they sell. The major
flows in which they take part are promotion and negotiation, as
they work on selling the products of the manufacturers they
represent and negotiating terms of trade for them some of these
intermediaries, such as trading companies or import-export
agents, specialize in international selling, whether or not they
take on title and physical possession flows.
Retail intermediaries come in many forms today,
including department stores, mass-merchandisers, hypermarkets,
specialty stores, category killers, convenience stores, franchises,
buying clubs warehouse clubs, catalogers, and on-line retailers.
Unlike purely wholesale intermediaries, they sell directly to
individual consumer end-users. In the mutual fund industry
example shown in figure, the retail level is represented through
branch bank investment services, registered investment advisers,
and brokerage firms in the United States. The investment
adviser (e.g., Lyon Street Asset Management Company) does
not sell directly to end-users but relies on these retail outlets-
particularly registered investment advisers-to expand its reach
nationwide. Whereas retailer’s role historically has focused on
amassing an assortment of goods that is appealing to their
consumer end-users, their role today often goes much further.
They may contract for private-label (store-label) goods,
effectively vertically integrating upstream in the supply chain.
Some retailers, such as Office Depot in the United
States actually make more sales to businesses than to consumer
end-users, although their storefronts nominally identify them as
retailers. Thus, the classic distinction between retailing and
wholesaling has shifted, making the distinction between retailers
and wholesalers much less meaningful than it once was.
Specialized intermediaries are brought into a channel
to perform a specific flow and typically are not heavily involved
in the core business represented by the product sold. These
intermediaries include insurance companies, finance companies,
credit card companies (all involved in the financing flow),
advertising agencies (participating in the promotion flow),
logistics and shipping firms (participating in the physical
possession flow), information technology firms (who may
participate in ordering or payment flows), and marketing
research firms (generating marketing intelligence that can be
useful for the performance of any of the flows).
END-USERS
Finally, it is important to note that end-users (either

business customers or individual consumers) are themselves
channel members as well. Consumers are classified as
marketing channel members because they can and frequently do
perform channel flows, just as other channel members do.
Consumers who shop at a mass-merchandiser such as Wal-Mart
or Target and stock up on paper towels are performing physical
possession, ownership, and financing flows because they are
buying a much larger volume of product than they will use in
the near future. They pay for the paper towels before they use
them, thus injecting cash into the channel and performing a
financing flow. They store the paper towels in their houses,
lessening the need for warehouse space at the retailer, thus
taking on part of the physical possession flow. They bear all the
costs of ownership as well, including pilferage, spoilage, and so
forth. Naturally, consumers except a price cut when they shop at
such a store, due to the channel flow costs borne when buying
through this channel relative to buying a single package of paper
towels at the local grocer.
CHANNEL FUNCTIONS AND FLOWS
A marketing channel performs the work of moving

goods from producers to consumers. It overcomes the time,
place, and possession gaps that separate goods and services from
those who need or want them. Members of the marketing
channel perform a number of key functions.
1. They gather information about potential and current

customers, competitors, and other actors and forces in the
marketing environment.
2. They develop and disseminate persuasive communications
to stimulate purchasing.
3. They reach agreements on price and other terms so that
transfer of ownership or possession can be affected.
4. They place orders with manufacturers.
5. They acquire the funds to finance inventories at different
levels in the marketing channel.
6. They assume risks connected with carrying out channel
work.
7. They provide for the successive storage and movement of
physical products.
8. They provide for buyers payment of their bills through
banks and other financial institutions.
9. They oversee actual transfer of ownership from one
organization or person to another.
IDENTIFYING CHANNEL CONFLICTS:

Channel conflict is generated when one channel
member’s action prevent the channel from achieving its goals.
Channel conflict is both common and dangerous to the success
of distribution efforts. Given the interdependence of all channel
members, any one member’s action has an influence on the total
success of the channel effort, and thus can harm total channel
performance.
Channel conflict can stem from differences between channel
member’s goals and objectives (goal conflict), from
disagreements over the domain of action and responsibility in
the channel (domain conflict), and from differences in
perceptions of the market place (perceptual conflict). These
conflicts directly cause a channel member to fail to perform the
flows that the optimal channel design specifies for them, and
thus inhibit total channel performance. The management
problem is twofold. First the channel manager needs to be able
to identify the sources of channel conflict. Second, the channel
manager must decide on the action to take (if any) to manage
and reduce the channel conflicts that have been identified.
In general, channel conflict reduction is

accomplished through the application of one more sources of
channel power. For example, a manufacturer may identify a
conflict in its independent-distributor channel: The distributor is
exerting too little sales effort on behalf of the manufacturer’s
product line and therefore sales of the product are suffering.
Analysis might reveal that the effort level is low because the
distributorship makes more profit from selling a competitor’s
product than from selling this manufacturer’s product. There is
thus a goal conflict. The manufacturer’s goal is the
maximization of profit over its own product line but the
distributorship goal is the maximization of profit overall of the
products that it sells only some of which come from this
particular manufacturer. To resolve the goal conflict, the
manufacturer might use one of the following strategies :( 1) it
might use some of its power to reward the distributor by
increasing the distributor’s discount. Thus increasing the profit
margin it can make on the manufacturer product line. Or (2) the
manufacturer may invest in developing brand equity and thus
pull the product through the channel. In that case its brand
power induces the distributor to sell the product more
aggressively because the sales potential; for the product as risen.
In both cases, some sort of leverage or power on the part of the
manufacturer is necessary to change the distributor’s behavior
and thus reduce the channel conflict.
THE GOAL OF CHANNEL COORDINATION
Generally the channel designs by the company with

target end-user segments service output demands in mind, and
channel power will be appropriately applied to ensure the
smooth implementation of the optimal channel design. When the
disparate members of the channel are brought together to
advance the goals of the channel rather than their own
independent (and likely conflicting) goals, the channel is said to
be coordinated. This term is used to denote both the
coordination of interest and action among the channel members
who produce the outputs of the marketing channel, and the
coordination of performing of channel flows with his production
of service outputs demand by target end-users. This is the end
goal of the entire channel management process. As conditions
change in the market place, the channels design and
implementation may need to respond; thus, channel coordination
is not a one-time achievement, but an on going process of
analysis and responds to the market, the competition, and the
abilities of the members of the channel.
ANALYSIS
ANALYSIS OF DEALERS PERCEPTION OF
DIFFERENT LG PRODUCTS AND ITS SERVICES.
This Chapter deals with the dealer’s perception of different LG

Products that are available in the market.
These findings and their resultant analysis is based on the
research carried on with various dealers of LG products. The
following are the various attributes that are considered during
the research.
Attributes:
 Grade of LG Products
 Standardization of LG Products
 Products sales
 Demand for LG Products
 Satisfaction levels of dealers
 Pricing of products
 Technical aspects of the product
 Replacement and repairs of LG Products
 Packaging standards
 Distribution channel.
 Promotional activities of the product
Table 1: Grade:
 The following data gives information about the
grade given by the dealers of LG Products to
various LG products available in the market.
 The various Grades are:
 Excellent
 Good
 Average
 Poor
S.No Criteria No of Percentage( %
Respondents )
1 Excellent 33 33
2 Good 60 60
3 Average 4 4
4 Poor 3 3
Grade
60
60
50
40 33.33 Excellent
percent 30
20 Good
10 4.442.22 Average
0
Poor
Excellent 33.33
Good 60
Average 4.44
Poor 2.22
Inference: Most of the dealers categorized LG products under

the grade good from the above graph we can understand that
33.33% of the dealers feel LG products are excellent while
60%of the dealers feel that LG products are good. Only a small
percent of dealers (4.44) feel that the products are average and
2.22% of them feel that the products are poor.
The above statistics indicates that LG products have been
perceived well by more than average no. of dealers giving the
company brand identity since dealers are the basis to push any
company’s product in a highly competitive market it is a
significant achievement.
Table 2: Standardization of LG products:

 In this table, the data shows whether the
dealers are satisfied with the standardization
of LG products.
 The criteria that are considered are :
 Satisfied
 Unsatisfied

Respondents )
1 Satisfied 97 97
2 Unsatisfied 3 3
Standardization of the product
100
50
Unsatisfied Satisfied
0 Satisfied Unsatisfied
Satisfied 97.7
Unsatisfied 2.22
Inference: Standardization of a product means a specification

and standards to be maintained in a particular market. The above
graph indicates most of the dealers (97.77%) feel that there are
no problems from them regarding standardization of products.
In direct interviewing with the dealers it was found out that the
customers feel that the standardization of a product is up to
mark.
Table 3: Product sales:
The following table gives information about the sales of
various LG Products that are available in the market.
The various products are:
 Television
 Refrigerator
 Air conditioners
 All
S.No Criteria No of Percentage

Respondents (%)
1 Television 7 7
2 Refrigerators 18 18
3 Air-conditioners 6 6
4 All 69 69
Product sales
Television Television
0% 7% Refrigerator Refrigerator
18%
Air conditioners Air conditioners
All
All
6%
69%
Inference: The product sales graph above shows that a

significant number 68% feel all the LG product sales is good.
The sales of Refrigerators and Air conditioners generally
seasonal. So 18% in refrigerators and 7% in air conditioners is a
significant percentage. The sales of television are unseasonable
according to most of the dealers. Most of the dealers cited that
the demand for LG products is fast increasing and they are
extremely satisfied over the sales.
Table 4: Satisfaction Levels of Dealers
 Table 5 shows the satisfaction level
of dealers about the sales of LG Products.

Respondents )
1 Satisfied 82 82
2 Unsatisfied 18 18
Satisfied Unsatisfied
100
50
Unsatisfied 17.77
Satisfied 82.22
Inference: According to the data collected from the dealers of
LG products, most of them are very much satisfied with the
sales of the LG products and dealing with the LG Products.
Table 5: Satisfaction rate of Services provided by LG

Company
The table below shows the
satisfaction rate of various services provided by the LG
Company, after the sales of the goods to both the customers and
also to the dealers in various forms like:
 After sales services
 Replacing and repairs
 Distribution of LG Products
 Commission after the sales of LG
Products.
Respondents )
1 0-50 % 4 4
2 50-70 % 34 34
3 70-80 % 51 51
4 80-100 % 11 11
Satisfaction rate of services provided
by LG
4.44
33.33
51.11
11.11 0-50%
50-70%
0 20 40 60 70-80%
0-50% 4.44 80-100%
50-70% 33.33
70-80% 51.11
80-100% 11.11
Inference: Dealers gave a mixed reaction when it came to

service provided by LG electronics. Though significant no. of
dealers (51.11%) rate the service provided by LG between 70-
80% where as 33.33% rated in between 50-70% which is also a
significant number a less percentage (4.44%) of the dealers felt
that LG service is not up to mark.
In direct interviewing with the dealer it was found that there
are frequent problems with certain motels of products but the
problems remain uncertified even after the service. Dealers cited
that the replacement or repair time for the LG products is high
when comparing to other company products.
Table 6: Pricing of the Products:
This table shows how the LG Products are priced
according to its product quality. The various criteria chosen for
the LG Products are :
 High priced
 Reasonably priced
 Average
 Low

Respondents )
1 High 18 18
2 Reasonable 71 71
3 Average 9 9
4 Low 2 2
Pricing of products
80 71.11 High
Reasonable
60
Average
40
Low
17.77
20
8.88
2.22
0
Inference: A good percent of dealers (71.1%) the LG products
of the products of the products is reasonable. But a significant
number (17.77%) dealer felt it is high. But it is identified that
most of the dealers are satisfied with the pricing of the products.
The product pricing of the LG products is in accordance with
the market. In Air conditioner and Refrigerators there is no. of
much difference in pricing when compared to other players in
the
same segment? The margins they are offering to the dealers
varied. The pricing of the products varied with the value
addition a particular model is going to the customer. The pricing

range offered by LG is widely varied because of models the
company is offering in a particular segment when compared to
other players like Blue Star which is offering only two models
in Air conditioners.
Table 7: Satisfaction level on Credit period:
The following table shows the satisfaction
levels on the credit period given by LG Products to repay the
credit that the dealers take for the goods. Most of the dealers are
satisfied with the credit period that LG has provided.

Respondents (%)
1 Satisfied 88 88
2 Unsatisfied 12 12
Satisfaction level on credit period
88.88%
100.00%
50.00% Satisfied
11.11%
Unsatisfied
0.00%
Satisfied 88.88%
Unsatisfied 11.11%
Inference: A huge 88.88% of the dealer voted in favor of the
credit period the LG is offering to the dealers. But in direct
interviewed with some of dealers felt the Blue Star is offering
them a better credit period then LG.
Table 8: Replacement of the Products:
This table gives information about the
LG Products which are damaged or needs repair or sometimes
replacement for mal functioning. It also shows whether the
products are:
 Replaced
 Repaired

Respondents )
1 Replaced 60 60
2 Repaired 40 40
Replacement of products
Replaced
Repaired
50-50
100%
50%
0%
Inference: Most of dealer agreed that in case of any problem

with a product it is repaired than replaced 60% of the dealers felt
the product is repaired in case of damage 40% of the people that
the product is replaced in case of dealers. 20% felt that it depend
on the situation. But most of the dealers expressed their concern
over the service provided by in this aspect.
Table 9: Replacement time period:
1. The average repair period they cited is 7-15 days.
2. But even these are situation the period exceeded 15 days.
3. The persistence of the problem over after repair.
4. The replacement period is also high when compared to other
players in the segment.

Respondents )
1 Week 18 18
2 Fortnight 71 71
3 One month 9 9
4 One month 2 2
& more
Replacement time period
60%
40%
20%
0%
Week Fortnight Month One and more
40% 51.11% 4.44% 4.44%
Inference: The average time period for replacement of a

product is 7-15 days. Even 4.4%of dealers felt even that goes to
one month in extreme cases. The above replacement period can
be considered high for the following reasons.
1. Highly competitive environment.
2. More no. of players in a particular segment.
3. Service becoming increasingly important.
4. Change of customer’s perception about service.
Table 10: Promotional activities:
Promotional activities are also meant for the
dealers to promote their products. As the dealers deal with many
company’s products, various promotional activities are done to
woe the dealers in promoting their company’s product.
The various promotional activities that LG do
are:
 Festival offers
 Schemes
 Coupons
 Discount

Respondents (%)
1 Festival 45 18
2 offers 20 71
3 Schemes 9 9
4 Coupons 26 2
Discount
Promotional Activities
60
45
40
20 26
20 9
0
S1
Inf
erence: The results show that mostly LG Electronics choose
Festival offers (45%s) as its promotional activity to promote its
products to the dealers. The other promotional activities are like
price reduction is the most common promotional activity that can
be noticed.
SUMMARY
After detailed study on dealers’ perception and also

competitors of LG it can be concluded that LG is fast growing
brand in the market. For LG Hyderabad / Secundrabad are
potential markets. These markets are growing at a rapid pace
(approximately 25%).
LG has set its quality standards on par with the

international standards. It is pioneer in introducing many
products in India. It can be concluded from the study that the
after sale service of LG Electronics is an issue of concern. The
company has to look into
this aspect before any serious deterioration in terms of dealers
perception occurs.
The environment around us is fast changing and so

are the consumer’s tastes and preferences. In this context
the buyer is a riddle to the company, he is a highly
complex entity. His needs and desires are innumerable.
With the impact of the strong winds of information-about
new products, new services, new uses for existing
innumerable brands, which are available to satisfy one
particular understand how the buyer responds to the
marketing programmed undertaken by the company and
also the buying patterns of the consumer with reference to
the product LG consumer durables.
The project report is entitled “A STUDY ON

DEALERS PERCEPTION WITH REFERENCE TO LG
PRODUCTS, HYDERABAD” with particular reference to
LG Electronics Pvt Ltd.
FINDINGS
1. After the market survey, I came to the conclusion that

customer’s selection of goods depends upon their tastes
and preferences. Consumers enjoy the satisfaction of
being a smart shopper irrespective of effective
advertisements and celebrity endorsements.
2. After analyzing the data it was found that 48% are dealing
in LG products because of its brand name and 46% cited
the reason quality. It indicates quality and brand name are
the driving forces behind LG’s success in consumer
durables.
3. Most of the dealers categorized LG products under the
grade good. From the above findings we can understand
that 33% of the dealers feel LG products are excellent
while 60% of the dealers feel that LG products are good.
Only a small percent of dealers (4%) feel that products are
average and 3% of them feel that the products are poor.
4. In direct interviewing with the dealers it was found out
that the customers feel that the standardization of a product
is up to mark. The above finding indicates most of the
dealers (98%) feel that there are no problems from them
regarding standardization of products.
5. The product sales show that a significant number 68% feel
all the LG product sales is good. The sales of
Refrigerators and Air Conditioners generally seasonal. So
18% in refrigerators and 7% in air conditioners is a
significant percentage.
6. In direct interviewing with the dealer it was found that
there are frequent problems with certain models of
products but the problems remain uncertified even after
the service. Dealers cited that the replacement or repair
time for the LG products is high when comparing to other
company products.
7. After the market survey it was found that a good percent of
dealers (72%) the LG products is reasonable. But a
significant number (18%) dealer felt it is high. But it is
identified that most of the dealers are satisfied with the
pricing of the products. The product pricing of the LG
products is in accordance with the market.
8. After the market survey it was observed that a huge 89%
of the dealers voted in favor of the credit period the LG are
offering to the dealers. But in direct interviewed with
some of dealers felt the Blue Star is offering them a
better credit period then LG.
9. After the market survey it was founded most of the dealers
agreed that in case of any problem with a product it is
repaired than replaced 60% of the dealers felt the product
is repaired in case of damage 40% of the people that the
product is replaced in case of dealers 20% felt that it
depend on the situation. But most of the dealers expressed
their concern over the service provided by in this aspect.
10. After the market analysis if was found that the average
time period for replacement of a product is 7 to 15 days
because of highly competitive environment and more
number of players in a particular segment. It was also
found that service has become increasingly important and
customer’s perception towards service of various products
has been changed.
SUGGESTIONS
In the present competitive scenario any company has to

look for the following aspects.
1. Quality of the product.
2. After sale service.
Though LG Electronics has scored points in terms of quality
it is lagging behind in terms of after sale service.
Basis on the data interpreted the following recommendation
can be made.
1. Maintaining high quality standards.
2. Improving after sale service.
3. LG Electronics has to consider from time to time
dealers suggestions in order to maintain there position
in the market.
4. LG Electronics has to give support to small dealers in
the market during peak seasons.
QUESTIONNAIRE
LG ELECTRONICS
Survey On Retailer Satisfaction
Retailer particulars
Name of retailer outlet :--------------------------
Area :---------------------------
City :----------------------------
Details of survey
Date of survey :----------------------------
Time taken :----------------------------
1. What made you to deal with LG products?
1. Quality 2.Price 3.Brandname 4.Schemes
2. What is your grade for LG products?
1. Excellent 2.Good 3.Average 4.poor
3. The standardization of LG products is ?
1. Satisfied 2.Unsatisfird
4. Which of the following products LG having good sales?
1. Television
2. Refrigerator
3. Air conditioners
4. Mobiles
5. Others
5. The demand for LG products is?
1. Increasing 2.Decresing 3.Constant
6. Are you satisfied with the commission/discount offering by

LG?
1. Yes 2.No
7. What satisfaction rate of services provided by LG?
1.Morethan80% 2.Between70-80%
3.Between50-70% 4.Lessthan50%
8. How do you rate the pricing for the products?
1. High 2.Reasonable 3.Avg

4.Low
9. If there is any technical damage in the products?
1. Replaced 2.Repaired
10. What is the period taken for replacement of products?
1.7days 2.15days 3.30days 4.45 days
11. How often does the company sales person visits the outlets?
1. Everyday 2.Once in a week 3.once in a 15days

4.1 month
12.How do you grade packaging standards for LG products?
1.Excellent 2.Good 3.Average 4.Poor
13. Are you satisfied with the delivery period after placing
order?
1. Yes 2. No.
14.What are the sales promotional activities does the company

offer to you?
1. Festival offers 2.Coupans 3.Schemes 4.Discount
15. Are you satisfied with the promotional activities?
1. Yes 2.No
16. What suggestion would you like offer for its improvement in
Retailer?
Satisfaction?
BIBLIOGRAPHY
 Philip Kotler, “MARKETING MANAGEMENT”,

Eleventh Edition, Pearson Education (Singapore) Pvt. Ltd., New
Delhi (2004).
 Martin Christopher,
“EFFECTIVE DISTRIBUTION”, PAN Books, London (1978)
 C.R.Kothari, “RESEARCH METHODOLOGY”, Second

Edition, New Age International (P) Limited Publishers, New
Delhi (2009)
 Ramchandran, “DISTRIBUTION AND SALES

MANAGEMENT”, Allied Publishers Pvt. Ltd. (2002)
 Beri G.C., “MARKETING RESEARCH”, Tata McGraw

Hill Publishing Company Ltd
 S.L.Gupta, “SALES AND DISTRIBUTION

MANAGEMENT”, Excel Books, New Delhi (2000)
 Pandey and Rastogi, “SALES MANAGEMENT”, King

Books Educational Publishers, Delhi
 Website: Retailindustry.about.com
 Website: Magazine.org

APPENDIX
The dealers of LG products in Hyderabad are
 Sona electronics &home appliances

 Pch ezone
 Tanmaiyee home appliances
 Bajaj electronics
 Best buy
 Next
 Thirumala music centre
 Digital shoppy
 Jai bhagwati electronics
 J d electronics
 Om surya electronics pvt ltd
 Giant hyper market
 Shah electronics
 Roop technology
 Rajkamal electronics
 Ramakrishna electronics
 Sony electronics
 Triumph home appliances pvt ltd
 Ankit electronics
 Dignity annexe
 Bell electronics
 Km associates
 Garnet marketing
 Shweta computer bazaar
 Km enterprises

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A study on

“DEALERS PERCEPTION WITH REFERENCE TO LG

Under the Guidance of

VISWANADHA BUSINESS SCHOOL

I, R. DEEPAK hereby solemnly declare that the project report entitled

“DEALERS PERCEPTION WITH REFERENCE TO LG

PRODUCTS” at “LG ELECTRONICS, Hyderabad” submitted to

Viswanadha Business School is a genuine and bonafide work done by me

and is not submitted to any other University/College or published any

time before. The project work is in partial fulfillment of the requirement

for the award of the Degree, Post Graduate Diploma in Management.

Place : Visakhapatnam (R. DEEPAK)

VISWANADHA BUSINESS SCHOOL

This is to certify that project report entitled” A STUDY ON

I express my deep and sincere gratitude to Dr.P.Kameswara

I would like to thank my project guide Prof C. RAVINDRA

I express my personal thanks to Mr. Company Guide,

I would also like to express my heart full thanks to all those

We live in a fast moving world of data and information. Our

In order to create the experiences consumers expect in the

Technology enables to develop applications and products that

The need of the study is related to “LG Electronics

To know the perception or views of dealers their

The study is various problems faced by the dealers towards

The study is to find out awareness on Electronics goods

This project has been done under the descriptive research

 To describe the character sticks of certain groups who

 To estimate the properties of people in a specified

 To make specific predictions

 To determine whether certain particulars are associated.

Data collection methods

Primary Data Primary data was collected through designed

 To know the different product being marketed by LG in

 To know the different competitors of products of LG being

 To know the level of satisfaction of LG dealer

 To study and identify the problems being faced by dealers

 To provide suggestion wherever necessary for

 The scope of the project was confined to the twin cities of

 The project is also confined by the time factor an extensive

 An entire study on distribution was not possible due to

The electronics industry in India dates back to the early

The electronics industry has recorded very high growth in

Improvements in the electronics industry have not been

Driven by computer and computer component sectors, the

However, India's total electronics market will remain well

Total electronic components production during 2008-09

A fairly good measure of success has been achieved on

The electronics industry as a whole, with the exception of

The current penetration and targets by the year 2009-10

Impact Analysis - Consumer Durables

The demand for ACs is expected to grow stupendously at

After a flat growth in 2008-09, the industry grew by 10

LCD demand surged by 21 per cent Y-o-Y during April-

LG Electronics pursues its 21st century vision of

As such, LG embrace the philosophy of "Great Company,

LG Electronics, Inc. was established in 1958 as the pioneer

Established October 1, 1958

Main Product Mobile Communications Company