CONSUMER BEHAVIOUR STUDY FOR THE MARKETING OF SAMSUNG AIR CONDITIONERS

A Minor Project Report

Submitted in partial fulfillment of the requirement for BBA(cam) Semester IV Programme of G.G.S.Indraprastha University, Delhi

SUBMITTED BY Neha Bhalla BBA(cam) Semester-IV Enrolment No : 07112401909 (2009-2012)

Delhi Institute of Rural Development Nangali Poona, New Delhi 110036

Declaration

I hereby declare that the minor project report, entitled Comaprative Analysis of Mutual Fund , is based on my original study and has not been submitted earlier for any degree or diploma of any institution/university.

The work of other auther(s), wherever used, has been acknowledged at appropriate place(s).

Place: Date : ...

Candidates signature Name: .. Enrol. No. : ..

Countersigned

Name:. Supervisor Delhi Institute Of Rural Development

Preface

To acknowledge all the people who had helped for the fulfilment of project is not possible for any researcher but in spite of all that it becomes the foremost responsibility of the researcher and also the part of research ethics to acknowledge those who had played a great role for the completion of the project. First of all, I would like to thank my teachers for their continues support during this project. They were always there to listen and to give advice. Without their help, the whole project have been difficult to pursue. Their advice and suggestion kept me moving to finish this project. Last but not the least I would like to thank my family for their constant support and encouragement to complete the project in the stipulated time. I take this opportunity of expressing my sincere gratitude to the Mr. Nikhil Kumar (Senior Executive, SIEL) under than and competent guidance. I worked throughout the period of my training. My special thanks go to my Prof. Neha syal who have molded us to handle such critical project.

EXECUTIVE SUMMARY

The project is a consumer behaviour study for the marketing of Samsung air conditioners. An analysis of Consumer Behaviour is the first and foremost requirement for the successful formulation and implementation of Marketing Strategies. Marketing starts with the needs of the consumer and ends with his satisfaction. Since everything revolves round the Customer, the study of consumer behaviour becomes a necessity. The first part of the report deals with understanding consumer behaviour and its importance. It includes discussing as to how different is the Indian consumer from that of one in west. The study explores various aspects of the urban Indian consumer and differences in consumers within the country. The spending patterns of the SECs, their economic status, their social status etc. is depicted through tables and figures. Consumer behaviour models further help refine the study, bringing out the buyer behaviour process followed by the various factors that influence a buyer buy a product suiting his needs. Data is collected with from the universe and the results are interpreted. The other part deals with competition tracking, Samsung viz a viz its biggest competitor and other brands in terms of SKUS on the shop floor with respect to a particular product. The results are based on empirical studies and through analysis of the data collected. Areas left out by the questionnaires are tried and covered through market visits. Some of the main findings have been that a consumer is influenced the most by his family while taking a decision. Recommendations from them are the most trusted. Relationship across categories is also studied. When it came to choosing the best AC, Samsung and LG lead the race. Though LG is the market leader (by market reports) but consumers gave equal preferences to both brands. Concluding with where all Samsung as a brand could improve in order to gain the highest share in the air conditioner market.

Contents
1.

Introduction

2.

Objective Of Study

3.

Scope of the study

4.

Research Methodology

10

5.

Samsung Electronics India Private Limited

12

6.

Consumer Durable Models

16

7.

Recent trends in the Consumer Durable Market

27

8.

Samsung Air conditioners

34

9.

Competition tracking

39

LG Electronics ( The Competitor) Model and Star Rating Study

10. Data

analysis and Interpretation

43

11. Findings

83

12. Limitations

86

13. Conclusion

and Recommendations

87

14. Bibliography

89

15. Annexure

90

INTRODUCTION
Management is the youngest of sciences and the oldest of arts and consumer behaviour is a very young discipline. Various scholars and academicians concentrated on it at a much later stage. It was during the 1950s that the marketing concept developed and thus the need to study the behaviour of consumers was recognised. Marketing starts with identifying the various needs of its customers and ends with satisfying those very needs. When everything revolves around the customer, the study of consumer behaviour becomes a necessity. Consumer behaviour came to be rooted in the marketing strategy. When World War II ended, marketers found that they could sell almost any good that they produced for the consumers who had been done without, while the nations manufacturing facilities were dedicated to the production of then needed war equipments. The marketing objectives implicit in the production orientation are cheap and efficient production and intensive distribution. Production Orientation is a feasible marketing strategy when consumers are more interested in obtaining the product than they are in its specific features. When demand
6

exceeds supply, a production orientation strategy can work. Consumers will buy what is available rather than wait for what they really want. In the 1950s when goods became readily available and competition intensified, some marketers adopted product orientation while others followed the selling orientation strategy. The assumption underlying the strategy is that consumers will buy the product that offers them the highest quality, the best performance and the most features. A product-orientation strategy leads a company to strive constantly to improve the quality of its product, with a result often referred to as Marketing Myopia (i.e. Focus on the product rather than on the consumer need). A marketer in love with his product may improve it far beyond its worth to the consumer, passing the cost of unneeded quality or special features on to the public. In a highly competitive market some companies keep adding unnecessary features in hope of attracting buyers. Companies that switched to the selling-orientation concept changed their primary focus from improving the product to selling the product. During this process, companies exerted tremendous hard sell on consumers in order to move the goods they had unilaterally decided to produce. The implicit assumption in the selling orientation is that consumers are unlikely to buy a product unless they are actively and aggressively persuaded to do so. The problem with this strategy is that it fails to take consumer satisfaction into account. If consumers are induced to buy a product that they dont want or need, their unhappiness is likely to be communicated through negative word-of-mouth that may dissuade other potential consumers. Furthermore, if the product does not fulfil a consumer need; it is unlikely that a repeat purchase will be forth coming.

In the early 1950s many marketers began to realize that they could sell more goods easily, if they produced only those goods that they had predetermined that consumers would buy. Instead of trying to persuade customers to buy what the firm had already produced, marketing oriented firms endeavoured to produce only what they had first determined that consumers would buy. Consumer needs and wants became the firms primary focus. This consumer oriented marketing philosophy, introduced by general electrical in the mid 1950s came to be known as the marketing concept. The key assumption underlying the Marketing concept is that, to be successful, a company must
7

determine the needs and wants of specific target markets and deliver the desired satisfactions, better than its competition. The Marketing concept is based on the premise that a marketer should produce what he can sell, instead trying to sell what he had made. While the Selling concept focused on the needs of the Seller, the Marketing concept focuses on the needs of the Buyer. The widespread adoption of the Marketing concept provided the impetus for the study of consumer behaviour. To identify un-reached consumer needs, companies had to engage in extensive marketing research. In doing so, they discovered that consumers are highly complex individuals, subject to a variety of psychological and social needs quite different from their survival needs. They discovered that the needs and priorities of different consumer segments differed dramatically. And they also discovered that in order to design new products and marketing strategies that would fulfil consumer needs, they had to study consumers and their consumption behaviour in detail. Thus, the Marketing concept laid the groundwork for the application of consumer behaviour principles to Marketing strategy

Objective Of Study

To study consumer behaviour for Samsung Air Conditioners To study marketing of Samsung Air Conditioners

Scope of study
This project gave me great exposure to the customers perception to the marketing strategies adopted by the Samsung Air Conditioners because it includes the service offered by them. The study also identifies the attitudes and preference of the consumers. The study also focused on Media through which the product reaches the consumers This project helped me in knowing the market practically.

Research Methodology
The Samsung Philosophy At Samsung, we follow a simple business philosophy: to devote our talent and technology to creating superior products and services that contribute to a better global society. Every day, our people bring this philosophy to life. Our leaders search for the brightest talent from around the world, and give them the resources they need to be the best at what they do. The result is that all of our productsfrom memory chips that help businesses store vital knowledge to mobile phones that connect

10

people across continents have the power to enrich lives. And thats what making a better global society is all about.

THEIR BUSINESS PRINCIPLE

11

2000-Present Pioneering the Digital Age

The digital age has brought revolutionary change and opportunity to global business, and Samsung has responded with advanced techno-logies, competitive products, and constant innovation. At Samsung, we see every challenge as an opportunity and believe we are perfectly positioned as one of the world's recognized leaders in the digital technology industry. Their commitment to being the world's best has won us the No.1 global market share for 13 of our products, including semiconductors, TFT-LCDs, monitors and CDMA mobile phones. Looking forward, we're making historic advances in research and development of our overall semiconductor line, including flash memory and non-memory, custom semiconductors, DRAM and SRAM, as well as producing best-in-class LCDs, mobile phones, digital appliances, and more.

Samsung India Electronics Ltd.

Samsung India is the hub for Samsung's South West Asia Regional operations. The South West Asia Headquarters, under the leadership of Mr. J S Shin, President & CEO, looks after the Samsung business in Nepal, Sri Lanka, Bangladesh, Maldives and Bhutan besides India. Samsung India which commenced its operations in India in December 1995 enjoys a sales turnover of over US$ 1Bn in just a decade of operations in the country. Headquartered in New Delhi, Samsung India has widespread network of sales offices all over the country . The Samsung manufacturing complex housing manufacturing facilities for Colour Televisions, Mobile phones, Refrigerators and Washing Machines is located at Noida, near Delhi. Samsung 'Made in India'
12

products like Colour Televisions, Mobile phones and Refrigerators are being exported to Middle East, CIS and SAARC countries from its Noida manufacturing complex. In November 2007, Samsung commenced the manufacture of Colour televisions and LCD televisions at its stateof-the-art manufacturing facility at Sriperumbudur, Tamil Nadu. The Company is also manufacturing fully automatic front loading washing machines at its Sriperumbudur facility. Samsungs state of the art, highly automated manufacturing facilities are located at the Companys sprawling Complex at Noida and its recently inaugurated Sriperumbudur facility, near Chennai. Samsung Indias Noida CTV Plant enjoys the Number 1 position amongst all Samsung subsidiaries in terms of its Colour television productivity and has been ranked as the subsidiary with the Best Quality System. The highly advanced Chennai Facility that has been inaugurated in November 2007 will help the Company respond better and faster to the growing demand for its products in the Southern part of the country. The Samsung manufacturing facility at Sriperumbudur is the Company's second manufacturing complex in the country. Samsung India is working with and contributing to the development of the domestic component industry in the country. The Company is working with its partners to improve their product quality and processes. Thus, Samsung vendors are sent to different Samsung

subsidiaries to meet the Samsung overseas vendors in order to benchmark their own processes. Samsung is also training its vendors on eco-partnership so that the components manufactured by them are eco friendly as per ROHS norms.
13

Samsung products manufactured in India currently enjoy an average localisation level of over 50%. The manufacturing capacities of Samsung products manufactured at the Noida Facility are as follows: PRODUCT CTV Colour Monitor Refrigerator Washing Machine Mobile phones DETAILS Flat TVs & LCD TVs CRT & TFT LCD Monitor Frost-free and Conventional Refrigerators Fully Automatic and Semi Automatic GSM Handsets

Component Business Samsung's Component Business leads the world's memory and LCD markets in product and technology development. Their component business is divided into semiconductors and LCD. The Semiconductor business consists of the Memory Division which enjoys a global number 1 position, the System LSI Division, which has experienced huge growth in the market and the Storage Systems Division. In a fast-paced electronic components industry, marked by intense competition and market volatility, clearly differentiated products from each of these divisions have helped spur continued growth. From being a virtually unknown entity in the Year 1995, brand Samsung today enjoys an awareness level of over 65% and a positive opinion of over 80% in the country today (source: BAS 2007). The introduction of World First, Wow, leading technology products in the Indian market coupled with the Companys

14

efforts to customise products for the Indian consumers, have contributed to the success of the brand in the Indian market. Technology Leadership, Product design and innovative marketing have all contributed to making Samsung a household name in the Indian market. The Company has carried out over 170 Dream Home Road Shows - a four day exhibition of its new products and technologies - in the metros and smaller markets to create consumer awareness.

To display Samsung products in a more lifestyle ambience and to communicate the product benefits in a more interactive manner, Samsung India has set up a widespread network of Samsung Digital Plazas all over the country. The Samsung Brand shop network complements the over 8500 retail points for Samsung products located across the length and breadth of the country. Samsung plans to continue enhancing its penetration levels in the country to reach out to more and more Indian consumers.

15

Overview of Consumer Durable Models

Consumer behaviour is a multistage process, and actual buying comes at a much later stage. It becomes crucial for the marketer to understand the initial stage so that they are able to predict the buying stage. This makes the study of consumer behaviour models almost mandatory. Consumer behaviour models serve two basic functions: A. They explain the factors that affect purchase of a particular type of goods and services. B. They allow future predictions to be made and are able to access the likely outcome of various meeting strategies. In order to perform the above mentioned functions, a consumer behaviour model must be Relevant must be as much as possible near to real market situation Comprehensive it should not be vague and poorly constructed Valid thee outcome predicted by the model should be testable and predictable

16

Input Process and Output Model This is a simple model of consumer behaviour, in which the input for the model is the firms marketing effort (the product, the price, the place and promotion) and the social environment. The social environment consists of the family, reference groups, culture, social class etc. which influence the decision making process. Both the factors together constitute the input in the minds of the consumer. Need recognition When one is aware of a want, tension is created and one chooses a product that satisfies his needs. There is also a possibility that a person may be aware of a product before its need is recognised. This is indicated by the arrow going both ways from the need to the product and vice-versa.

Product awareness It can be had from advertising or exposure to different types of media or by the social circle. The awareness and the need lead to the building of interest. In some cases the interest may also break down and the decision process may stop or be postponed for the time being.

Evaluation It may consist of getting more information about the product and comparing and contrasting it with other products. This can be done theoretically or by taking a trial. Once the evaluation

is completed, the consumers interest may either build up and have intentions to buy, or he may lose interest and the decision process may again be stopped or postponed. Intention Once there is an intention to purchase the product, the consumer goes ahead and acts or purchases the product. Once the product is purchased, the product is
17

used to fulfil the need and more the product is used, more the consumer becomes aware of the positive and negative points of the product. Post Purchase Behaviour If after the purchase and use of the product, the customer is satisfied, he is happy and goes in for a repeat purchase or recommends the same to his friends and acquaintances. If however, the customer is dissatisfied, he discontinues further purchase of the product and builds a negative attitude towards it, which, may be harmful for the company. The post purchase behaviour is very important for marketers and the company too because it leads to proper feedback for improvement and maintaining the quality and features desired by the customer. If the customer is very happy with the purchase, he forms a good impression about the product and the company.

HOWARD SHETH MODEL

A simplified version of the basic Howard-Sheth Model consists of four major sets of variables: 1. Input The input variable consists of three distinct types of stimuli (information sources) in the consumers environment. Physical brand characteristics and verbal product characteristics are furnished by the marketer in the form of product or brand information. The third type of stimulus is provided by the consumers social environment. All three types of stimuli provide inputs concerning the product class or specific brands to the prospective consumer. 2. Perceptual and learning constructs The central component of the Howard Sheth model consists of psychological variables that are assumed to operate when the consumer is contemplating a decision. These constructs are treated as abstractions, and are not operationally defined or directly measured. Some of the variables are perceptual in nature and are concerned
18

with how the consumer receives and processes information acquired from the input stimuli and other parts of the model.

3. Output The model indicates a series of outputs that correspond in name of some of the perceptual and learning construct variables (attention, brand comprehension, attitudes, intention) in addition to the actual purchase. 4. Exogenous variables External variables are not directly a part of the decision making process and are not shown in the model presented here. Relevant external variables include the importance of the purchase, consumer personality traits, time pressure and financial status.

Nicosia Model It is an elaborate computer flow chart of the consumer decision-making process. It is divided into four major fields: 1. The consumer attitude based on message exposure 2. The consumer product search and evaluation 3. The act of purchase 4. Feedback in the form of consumer experience to both the firm and the consumer.

Consumers attitude based on the firms message The firms marketing environment and communication efforts that affect the consumer attitude such as product attributes, the competitive environment characteristics of relevant mass media, the choice of copy appeal and characteristics of the target market. It specifies various consumer characteristics (personal experience) that mediate reception of the firms promotional
19

messages. The output is an attitude the product based on consumers interpretation of the message. Search and evaluation It deals with the search for relevant information and evaluation of the firms brand in comparison with alternative brands. The output of this stage is motivation to purchase the firms brand. The act of purchase The consumers motivation towards the firms brand results in purchase of the brand from a specific retailer. Feedback Two important types of feedback form the purchase experience, one to the firm in the form of sales data and the other to the consumer in the form of experience (satisfaction and dissatisfaction). The consumer experience with the product affects the individuals attitude and predisposition concerning future message from the firm.

Black Box Model

The black box model shows the interaction of stimuli, consumer characteristics, decision process and consumer responses. It can be distinguished between interpersonal stimuli (between people) or intrapersonal stimuli (within people). The black box model is related to the black box theory of behaviourism, where the focus is not set on the processes inside a consumer, but the relation between the stimuli and the response of the consumer. The marketing stimuli are planned and processed by the companies, whereas the environmental stimuli are given by social factors, based on the economical, political and cultural circumstances of a society. The buyers black box contains the buyer characteristics and the decision process, which determines the buyers response. The black box model considers the buyers response as a result of a conscious, rational decision process, in which it is assumed that the buyer has recognized
20

the problem. However, in reality many decisions are not made in awareness of a determined problem by the consumer.

Engel, Kollat, Blackwell Model (EKB Model) The model shows that people are continually exposed to stimuli. A stimulus represents anything, generally inherent in the environment that has the potential for triggering some kind of behaviour. In general, marketing decision making can be viewed (at least in part) as putting together and controlling a set of stimuli intended to influence customer buying behaviour. Any marketing offer represents only a fraction of the total stimuli to which buyers are exposed. Many other stimuli, some controlled by competitors, some controlled by non-competitive organizations, some originating from other people, are also competing for consumers'attention. Stimuli provide information that consumers must process. This task includes the stages of exposure, attention, comprehension, and retention. Exposure refers to a stimulus reaching one of the senses, while attention indicates on which of these stimuli the consumer will focus. Comprehension is the process by which consumers attach meaning to stimuli. Because a consumer is attentive toward marketing offer does not mean that the offer will be comprehended as intended. Retention refers to the memory process that determines which of the many stimuli that have gone through the initial three stages of consumer information processing will be remembered. Not all stimuli that have been comprehended will be retained in memory. In fact, the percentage of stimuli remaining in memory is generally quite small, particularly after a period of weeks has passed since exposure. An implication of the processing of stimuli is that consumers actively interact with some businesses while avoiding interaction with others. They are certainly not passively receiving information and being influenced accordingly. An offer that is filtered out anywhere during this process by a significant number of customers will not achieve performance goals. Since the consumer is an active participant in interaction between buyers and sellers, the characteristics that form an individual's psychological makeup have an important impact on the success of an offer. A set of stimuli comprising the marketing program must interact with one or more key individual characteristics before a consumer determines what response will bemade.
21

Factors Influencing Buyer Behaviour Factors influencing consumer behaviour A consumer is affected by changes in his personality, attitudes, etc. and also by the external environment. One should be able to explain the following: Various factors influencing consumer behaviour. The joint effects of internal and external determinants. The elements of the decision-making process. The factors that influence consumer behaviour can be classified into internal factors (individual determinants) and external environmental factors. External factors do not affect the decision process directly, but percolate or filter through the individual determinants, to influence the decision process. The individual determinants that affect consumer behaviour are:

Motivation and Involvement Personality and Self Concept Learning and Memory Information Processing

The external influences or factors are: Cultural influences Sub-cultural influences Social class influences Family influences Personal influences
22

 Other influences

Individual determinants Motivation and involvement In a society, different consumers exhibit different consumer behaviour because they are unique and have unique sets of needs. Motivation is that internal force that activates some needs and provides direction of behaviour towards fulfilment needs as shown in fig While talking of motivation, we cannot afford to forget the Maslows hierarchy of needs, which tells us about the primary and secondary needs. First the biological needs of hunger, thirst and shelter are satisfied then the safety needs and then the physiological desires of being accepted in society seeking status, esteem, etc. are satisfied. People adopt different methods to fulfill their needs. The need of transport can be met by car, rail, bus or aeroplane. People choose different modes of transport because of their level of involvement in different activities. Involvement refers to the personal relevance of importance of a product or a service that a consumer perceives in a given situation. Depending on the value and personal interest, a consumer can have a low or high involvement. For a professional tennis player, the choice of a tennis racquet is made with great care. He sees the weight, size, grip and tension of the string, etc. the racquet is his most important professional tool. Attitudes These are our learned predispositions towards people, objects and events. Attitudes are responsible for our responses and are not inborn but are learnt from people around us. Our attitudes influence our purchase decision person having a carefree attitude will buy an object without much involvement. People who want to play safe and avoid risk taking will go for a safe investment.

23

People who want convenience and are short of domestic help, will have positive attitudes towards canned and frozen foods. Personality and self concept It is the sum total of our mental, physical and moral qualities and characteristics that are present in us and that make us what we are. Consumers try to buy the products that match their personality. People wanting to look manly will buy products with a macho appeal, which would enhance their image and personality. People, who give emphasis on comfort care, will purchase comfort products and so on. If one wants to emulate a film star, his choice will be different from others. Learning and Memory Everyday we are exposed to a wide range of information, but we retain only a small portion of it. We tend to remember the information that we are interested in and that is important to us. In a family, different members of the family are interested in different types of information which they individually retain. Fathers retain information regarding his interest in cars, motorcycles and other objects. Children are interested in objects of their interest like amusement parks, joy rides and dolls.

Our motives, attitudes and personality filter the information, keeping only the relevant information in our minds and keeping the others out. This is known as selective retention. We retain in our memory only selective information that is on interest to us. Information Processing All consumers analyse and process information that they receive. These are the activities that a consumer engages in while gathering, assimilating and evaluating information. Consumers assimilate and evaluate selective information and this reflects on their motives, attitude and personality and self concept. Some information is evaluated in a different manner by different individuals. The most common example is a glass half filled with a liquid. It can be interpreted as half empty or half full. This is a pessimistic view and the other is an optimistic view of processing the information.

24

EXTERNAL ENVIRONMENT FACTORS AFFECTING CONSUMER BEHAVIOUR 1. Cultural Influences It is defined as a complex sum total of knowledge, belief, tradition, customs, art, moral or any other habit acquired by people as members of a society. Our consumer behaviour is influenced by our culture or background. Different emphasis is given by different on buying, use and disposing of products. People in North India have a certain style of consumption of food, clothing, savings; etc.this differs from those in the southern part of the country. Different cultures and habits are prominent in different parts of the world. The Japanese have a different culture when compared to that of the USA, England or the Arabian countries. Therefore, culture plays an important role in consumer behaviour. 2. Sub-Cultural Influences

25

Within a culture, there are groups or segments of people with distinct customs, traditions and behaviour. In the Indian culture itself, we have many sub-cultures i.e., the North, East, West and south culture. Products are designed to suit a target group of customers which have similar cultural backgrounds and are homogeneous in many respects. 3. Social Group Influences A group is a collection of individuals who share some common relationship, attitudes and have the same interests. Such groups are prevelant in societies. These groups could be primary where interaction takes place frequently and consists of family groups. They have a lot of interaction amongst themselves and are close knit. Secondary groups on the other hand are a collection of individuals where relationship is more formal and less personal in nature. These could be political groups, work groups or study groups. The behaviour of a group is influenced by the members

of the group. An individual can be a member of various groups and can have varied influences by different members of groups in his consumption behaviour. 4. Family Influences As has already been said, a family is the most important of all primary groups and also the strongest source of influence on consumer behaviour. The family tradition and customs are learnt by children, and they imbibe many behavioural patterns from their family members, both consciously and unconsciously. These behaviour patterns become a part of a childs life. In a joint family, many decisions are jointly made which also leave an impression on the members of the family. 5. Personal Influences Each individual processes the information received in different ways and evaluates the products in his own personal way. This is irrespective of the influences of the family, social class, cultural heritage; etc.personal influences go a long way in the purchase of a product. 6. Other Influences
26

Consumers are also influenced by national and regional events, which could be like the Asiad, the Olympics and the cricket matches, world cup, a war or a calamity. Such events leave a temporary or a permanent impression on the minds of the consumer and affect his behaviour. Situation variables such as product display, price reduction, free gifts and attractive offers also influence consumer behaviour.

Recent Trends in the Consumer Durable Market

Consumer Durables The 2009 Cygnus Report on the Indian consumer durables industry says the sector is expected to reach a turnaround of around us$ 40 billion by this year by growing at a CAGR of 23% from 2007 onwards. Several Indian and MNC players are looking to strengthen their presence in India to leverage this opportunity. Success in the long-term will require firms to develop a wide and robust distribution network differentiate their products in areas of relevance to the consumer and innovate in the areas of promotion, product financing, etc.The product and approach to the market needs to be customised to suit the unique demands of the Indian market. According to a study by the McKinsey global institute (MIG), Indian incomes are likely to grow three-fold over the next two decades and India will become the worlds fifth largest consumer market by 2025, moving up from its position in 2007 as the 12th largest consumer market. Further, according to data released by Visa, (the worlds largest retail electronic payments network), by 2010
27

annual commercial spending in India is estimated at US$ 2.6 trillion. By this year, many international majors plan to beef up significant investment in India. KEY TRENDS Rising Income and Availability of Financing In this competitive era, the income levels of individuals are rising and disposable income has increased to a great extent. Consumer financing has become easier with all the banks coming forward to lend to the consumer at affordable rates of interest. Improved Affordability of Products Advanced technology and increasing competition are narrowing the price gap and the expensive appliances are becoming cheaper. Products that were once beyond the reach of the middle class Indian are now affordable to many. Growth in demand for products, once considered luxuries (air-conditioners, washing machines and high-end CTVs) is a reflection of this phenomenon.

High-End Customised Products Gain Ground The Indian consumer durables products market is going for high-end customisation of products with aesthetic appeal. Manufacturers are steadily going for innovations for developing advanced and user-friendly products for satisfying the needs of varied class of customers. The trend is worldwide and is mirrored in India too. Competition to Drive Sales Major consumer durable companies are coming up with new product lines. International companies such as Haier, as part of its expansion strategy in India, plans to launch televisions, air-conditioners, refrigerators and washing machines. This would provide consumers with ample choices and drive up sales in the sector.

Organised Retail gaining Momentum

28

Urban and rural markets are growing at the annual rates of 7%, 10% and 25%, respectively with organised retail expected to garner 10% share by this year, from a mere 3% share previously. While there are established distribution networks in both rural and urban India, the presence of well-known brands in the organised sector is increasing. The trend will also boost sales of private goods and will have a positive impact on the consumer durables industry, as organised retailing would not only streamline the supply chain, but also facilitate increased demand, especially for high-end and branded products. Entry of Large Retail Players Low penetration in the consumer durables industry has allowed the entry of large retailers to the Indian market. This is the resulting in rise in competition due to large players such as Croma, E zone and reliance digital. Part of the growth momentum in high-end segments of consumer electronics should be attributed to the competitive evolution of organised retail, stimulating the demand through exposure to high-end shopping experiences.

Increasing Depreciation of the Rupee The trend of rupee appreciation vis-a-vis the US dollar will continue to prevail in the long run, thus it is expected to tighten raw material costs for Indian manufacturers and befit those addressing the domestic market. Distribution and Retail With the Rural and Semi-Urban Markets creating opportunity and an almost sedentary urban market, the need to have a strong distribution network is crucial for the companies to remain price-sensitive. Major Indian companies are going for new ventures for retailing of consumer durables and IT products. The retailers are coming out with new retail formats such as exclusive brand outlets and the international style multi-brand showrooms. Taxation Reforms to Drive Sales The Indian government has set in motion an array of taxation reform initiatives across all sectors. The government plans to streamline the wide array of indirect
29

taxes across central and state levels and would largely benefit the manufacturing sector and enhance manufacturing activity. The government plans to introduce the value added tax (VAT) system across all states by this year. This move would help to drive up sales of consumer durables across the country. Presently, the taxes are quite high and are mostly passed onto customers, thus having a negative effect on the sales of the sector. Investment options Some of the attractive areas for investment in consumer durables sector are: High-End Colour TVs Plasma display panels and liquid crystal display TVs have registered an average growth of more than 250% in 2006-07 and the trend is expected to continue. The rise in income level, and easy availability of credit facilities would further fuel the growth of high-end colour TVs in the country. Split Air-conditioners (ACs) Split ACs have been growing at a much faster rate than Window ACs. The growth was 97% in 2006-07 as compared to a 32% growth of window ACs .The total AC market in India is expected to grow to 30-35% over the coming few years. Mobile Phones Production of mobile phones is estimated to grow at CAGR of 28.3% from 31mn units in 2006 to 107mn units in 2011.Low mobile penetration and favourable government policies are driving mobile phone Original Equipment Manufacturers (OEMs) to set up manufacturing facilities in India. Growing demand for low cost mobile phones and the need for Execution Management System (EMS) vendors to reduce their revenue exposure to Nokia, Motorola and Sony Ericsson, are the key factors expected to increase manufacture in India. New cell phone connections and handsets have given a huge boost to consumer durables sector. KEY FACTORS The following factors are critical for manufacturers in the sector: Product Technology
30

While the market is continuously expanding, there are several concerns that will have to be addressed while moving the focus to tier iii towns and rural areas. Total cost of ownership would be a key factor driving purchases in these regions. Distribution and Service Network As the market spreads out from saturated urban regions to low penetrated rural areas and tier ii/iii towns, distribution network and brand recognition will continue to play even more significant roles in determining market share and profitability. The emergence of multi-brand showrooms would help to drive sales of consumer durables as they offer a wide range of products under one roof. Innovation in Advertising and Promotion

Increasing competition and technology adoption has led to a situation where the basic function of most of the consumer durable goods has been largely commoditised. This has created a situation where identifying a unique differentiating factor and promoting it effectively has become imperative. The advertising and promotion spends in industry have been growing steadily. Attractive Locations Since raw materials account for more than 75% of the manufacturing cost of consumer durables and with a significant part of it being imported, Maharashtra, Gujarat and Tamil Nadus proximity to ports, high demand for durable goods and factor consolidation in the manufacturing sector make them amongst the preferred destinations for investment in manufacturing. Long term-growth The 2009 Euromonitor international report on consumer electronics in India says, sales growth in the consumer electronics sector over 2008-2013 is not expected to be as strong as that experienced during the review period. This is attributed in part, to the economic slowdown that is expected to continue until 2010.several products that are reaching their saturation points in Indias Urban markets will need to make an impression on the countrys rural markets, and that may be more difficult than some anticipate.
31

High-growth sub-sectors over the forecast period (2008-2013) are likely to be receivers of DTH broadcasting, Digital TVs, portable DVD players. Sales of mobile phones are expected to continue to grow based on increased consumer demand in rural areas. Sub-sectors likely to be adversely affected over the forecast period (2008-2013) include those with big-ticket products that many consumers might consider wholly unnecessary. Replacement purchases for many consumer electronics products are likely to be postponed. For example, a family considering the purchase of a new larger LCD TV to replace their existing analogue TV may decide to wait before purchasing, or a young household may decide to make do with their current computer rather than upgrade. On addition, car sales are expected to decline, and this will have a negative impact on the sales of in-car electronic products. Many companies in high-growth sub-sectors like digital TVs and receivers believe that, instead of seeing their sales double year-on-year as had been projected earlier, sales growth may dip to 40%-50%. A young population In 2008, there were an estimated 366 million people in India below the age of 14, representing 32% of the total population of the country. The mean age was 27 years old, branding the Indian population as young in contrast to the typical ageing populations of developed nations. Indias young population has resulted in the rapid adoption of new technologies as product prices have fallen to more affordable levels. Young consumers have rapidly moved away from old analogue technology and have embraced digital technology. During the review period (2008-2013), personal entertainment systems were more popular than in-home systems. Volume sales of portable consumer electronics grew at a CAGR of more than 43% during the review period while value sales grew at a CAGR of more than 33%. Low household penetration rates Among consumer electronics products, televisions and transistors have the highest household penetration rates in India. Overall however, household penetration rates for consumer electronic products continue to be abysmally low
32

in the country. Despite all the growth witnessed during the review period, by 2008 only an estimated 69% Indian households owned a small audio product, only 59% owned a TV and just 40% household owned a hi-fi system. Even with the phenomenal growth of the mobile phone subscriber base during the review period, in 2008 mobile phones were owned by only 26.5% of Indian households. Since old analogue products like VCRs and analogue camcorders never reached significant household penetration levels in India in the first place, not many consumers owned video home system (VHS) cassettes and home videos. This meant that there was almost no replacement market for these old analogue products and, once prices of digital products fell, most new consumers opted to buy the digital products straight away. The only exception to this trend has been analogue cameras. With a household penetration rate of 6% in 2008, companies like Kodak are seeking to keep the supply of these products going so that related products like film and processing services have a longer life. Increased demand and consumption is expected to raise household penetration and ownership levels of digital consumer electronics products. There is much room for future growth given the current low levels. Low household penetration rates, together with increasing disposable incomes, should result in significant sales growth for most consumer electronics sectors in India.Let alone the large number of urban replacement buyers, new, first-time rural consumers provide a large potential market over the forecast period. By 2013, its projected that 65% of Indian households will on mobile phones, an estimate that translates into more than 300 million phones.dvd players are also expected to see a huge rise in demand over the forecast period. Also in 2013, the household penetration rate of DVD players is expected to go up by 54% overtaking hi-fi systems, the priority in-home entertainment purchase of Indian households. To entice more rural consumers, manufacturers and retailers are expected to widen their portfolios of low-price product offerings.

33

SAMSUNG AIR CONDITIONERS

34

RANGE 2010

A SAMSUNG CUSTOMER GETS TO EXPERIENCE THE FOLLOWING FEATURES IN THEIR RANGE FOR AIR CONDITIONERS

Stabiliser Free

The Worlds First S-UTR compressor in Samsung air conditioners withstands voltage fluctuations as low as 135V to as high as 290V and reduces the need for an additional stabiliser during power fluctuations.

35

Biosleep

Samsungs Biosleep ensures your environment stays at the most comfortable temperature with automatic humidity adjustment to guarantee a good nights sleep. S-Touch of Colour

Samsung has created a new design of an air conditioner for your ultra modern lifestyle. Unlike the usual flat white look, Samsung has specially designed the front panel of its air conditioner with the Touch of Colour look. These sophisticated and colourful looks add a touch of class to your home interiors. Available in 6 elegant colours: Cherry Wine; Copper , Black, Chocolate Brown, Pearl White. Carbon Deodoriser

Activated carbon is incorporated in the filter. This smart deodorising filter with its splendid talent absorbs cigarette smoke, pet odours and all other unpleasant odours.
36

Comfort Care Too much air conditioning is not only hazardous to your health, but also harmful for the environment as it wastes energy. Samsungs S-Series Air Conditioner uses the least amount of energy to maintain comfort levels so you and the environment stay healthy. Comfort care not only controls temperature but also maintains humidity for optimised comfort. S-UTR Samsung developed the S-UTR (Ultra Tropical Rotary) compressor featuring incredible power that can quickly cool the air even in severe hot climates, and withstand voltage fluctuations as low as 135V to as high as 290V and reduces the need for an additional stabiliser during power fluctuations. S-UTR with its high torque motor has the reliability to maintain superb performance even in severe temperatures of up to 54C for a long time. The latest S-UTR succeeded in saving energy consumption and increased energy efficiency by 10%. Now, switch on your air conditioner and enjoy the refreshing cool air brought to you by the S-UTR.

54C S-UTR

Samsung developed the S-UTR (Ultra Tropical Rotary) compressor featuring incredible power that can quickly cool the air even in severe hot climates, and withstand voltage fluctuations as low as 135V to as high as 290V and reduces the need for an additional stabiliser during power fluctuations. S-UTR with its high torque motor has the reliability to maintain superb
37

performance even in severe temperatures of up to 54C for a long time. The latest S-UTR succeeded in saving energy consumption and increased energy efficiency by 10%. Now, switch on your air conditioner and enjoy the refreshing cool air brought to you by the S-UTR. Smart Saver

Save up to 31% on Your Electricity Bill. Smart Saver operates the air conditioner automatically in the least amount of time necessary to cool the room, which saves electricity. With the Smart Saver, you can stop worrying about your electricity bill and start enjoying cool comfort.

38

Competition Tracking
LG ELECTRONICS Making waves in the Indian market since 1997, LG air conditioners are, till date, a huge competition for Samsung. Retaining the number 1 position for the last 8 years they have proved time and again of their worthiness in creating new technology and their power to continuously innovate. The product line manufactured by LG comprises the following:

Business areas

Products

Consumer LCD TV , Plasma Display , Electronics Display Panel, Color Television, Home Theatre System, Music system, DVD Recorder/Player, MP3 & MP4 Player Home Room Air Conditioner, Appliances Commercial Air Conditioner , Refrigerator, Washing Machine, Dishwasher, Microwave, Vacuum Cleaner Computer
39

Laptop, Personal Computer, LCD

Products Mobile Phone

monitor, CRT monitor, Optical Storage Devices Premium trend setter phone , Camera Phone , Music Phone , Color Screen GSM Handset

In order to fulfil the main purpose, it is important to have a look at the strategies planned by them for the season. But first, a look (in brief) at what they have in store for their customers for summer 2010. A buyer would get to experience the following features from a new LG AIR CONDITIONER (SPLIT AND WINDOW AC).

DREAM FEATURES

Aero comfort system

Star

rated

ACs

Energy saver

COMFORT FEATURES HEALTH CARE FEATURES DURABILITY FEATURES COOLING FEATURES Strategies for Summer 2010 Following is how LG Electronics plans to serve their air conditioner customer base this summer:
40

There are 65 models planned for launch this season and through the sale of Brands Samsung LG Voltas

Total market size (100) Spilt Window Spilt Window Spilt Window All Market India Size 21.2 22.9 28.5 29.3 12 20.4 Delhi 24.4 19.6 32.8 34.6 12.6 18.6 14 3 25 5 13 5 Total 0.75-1 Ton No Of 1.5 Ton 14 6 30 10 9 4 Models 2 Ton 5 1 11 2 8 2 Total No Of Capacities 4 4 4 4 4 4 which the company expects a revenue of Rs. 2500 crore.Presently the company has a 32% share in the total ac market serving almost 30 lakh customers. In order to be effective, the company has planned to strengthen their after sales and installation service. The famous 2-1-1 concept has been proved successful time and again and the company intends to invest more in the service. They have almost 10,000 engineers trained for the same. Apart from this the engineers are also trained for behaviour and attitude training. The theme for their campaign is youthful and premium. They intend to showcase air conditioners with something that symbolises comfort and will market it saying Comfort hai toh sab kuch hai. Their business strategy aims at a 50% growth in air conditioner market this year. The company witnessed a turnover of 1600 Crores last year and expects to cross the 2500 Crores mark by 2012.

MODEL STUDY

The table highlights the total number of air conditioner models, by the top three brands for air conditioners, presently available in the market.
41

It clearly shows LG electronics as the leading brand for air conditioners, be it the overall share or for its share in the Delhi market. It has the highest number of models that are produced for the season, both Split and Window ACs ,across categories. Number two is Samsung with a share of 21.2% share in the all India market and 24.4% share in the Delhi market( Split acs) and 22.9% all India and 19.6 in Delhi for window acs. It is followed by Voltas which is number 3 in the ranking.

Star-Rated Air Conditioners

5 Star Models Split ac Samsung LG 0.75-1 ton 3 7 1.5 ton 3 8 2 ton 0 0

On comparing the countrys best brands for Air Conditioners, it is seen that LG Electronics has more models with 5 star rating in the split ac category.

42

Data Analysis and Interpretation

1.Your Purpose in mind while buying a Consumer Durable? N Vali d Mis sing 100 0 Frequen cy Percent Valid Necessit y For Enhanci ng one's Status As a Luxury Total 93 3 4 100 93.0 3.0 4.0 100.0 Valid Percent 93.0 3.0 4.0 100.0 Cumulativ e Percent 93.0 96.0 100.0

43

Your Purpose in mind while buying a Consumer Durable?

Necessity For Enhancing one's Status As a Luxury

Pies show percents

The pie shows that the majority (93%) of people buy a consumer durable item out of necessity.Very few percentage of people consider buying it as a luxury or to enhance their status in the society.

44

2.How do you make your purchase decision, Is it? N Vali d Mis sing 100 0

Frequen cy Percent Valid Aided (With Help) Unaided (Without Help) Total 79 21 100 79.0 21.0 100.0

Valid Percent 79.0 21.0 100.0

Cumulativ e Percent 79.0 100.0

How do you make your purchase decision,Is it?

Aided (With Help) Unaided (Without Help)

79% of the total population take help while deciding on the purchase of a consumer durable item while 21% of them prefer doing it own their own. 3.Which Purchase pattern is followed at your place?
45

Vali d Mis sing

100 0

Frequen cy Percent Valid Indivi dual Famil y Total 19 81 100 19.0 81.0 100.0

Valid Percent 19.0 81.0 100.0

Cumulativ e Percent 19.0 100.0

Which Purchase pattern is followed at your place?

Individual Family

When it comes to going to the market and buying the product, 81% people do the same with their family while the remaining 19% prefer buying all by themselves. 4.Place of purchase preferred? N
46

Vali

100

d Mis sing

Frequen cy Percent Valid Modern Retail shops Brand shops Multibran d Shops others Total 5 37 54 4 100 5.0 37.0 54.0 4.0 100.0

Valid Percent 5.0 37.0 54.0 4.0 100.0

Cumulativ e Percent 5.0 42.0 96.0 100.0

Place of purchase preferred?

Modern Retail shops Brand shops Multibrand Shops others

MULTIBRAND SHOPS are the most preferred when it comes to buying a consumer durable item (54%) followed by Brand Shops, Modern Retail Shops and Other stores. 5.Purchase decision influenced by?
47

Recommendation by friends and acquaintances Frequen cy Percent Vali YES 64 64.0 d NO 36 36.0 Tota 100 100.0 l Valid Cumulativ Percent e Percent 64.0 64.0 36.0 100.0 100.0

Recommendation by friends and acquaintances

YES NO

64% of the population takes into account the advice given to them by their family and friends while buying a Consumer Durable item. The other 36% of people do not believe in doing so. Advertisements Frequen cy Percent Vali YES 48 48.0 d NO 52 52.0
48

Valid Cumulativ Percent e Percent 48.0 48.0 52.0 100.0

Tota l

100

100.0

100.0

Advertisements
YES NO

Advertisements through various mediums influence only 48% of the population to buy any consumer durable item.

Display in Stores Frequen cy Percent Vali YES 50 50.0 d NO 50 50.0 Tota 100 100.0
49

Valid Cumulativ Percent e Percent 50.0 50.0 50.0 100.0 100.0

Display in Stores
YES NO

When it comes to getting influenced by the display in stores, 50% of the population prove it to be a reliable medium.

Others Frequen cy Percent Vali YES 2 2.0 d NO 98 98.0 Tota 100 100.0 l
50

Valid Cumulativ Percent e Percent 2.0 2.0 98.0 100.0 100.0

Others
YES NO

Just 2% of the population went with this option.

51

Are you influenced by Offers?

Always Often Occasionally Rarely

56% of the population is occasionally influenced by offers while buying a product while just 7% are always influenced.

52

 Features Frequen cy Percent Valid Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Total Syste m 18 19 31 17 6 6 97 3 100 18.0 19.0 31.0 17.0 6.0 6.0 97.0 3.0 100.0 Valid Percent 18.6 19.6 32.0 17.5 6.2 6.2 100.0 Cumulativ e Percent 18.6 38.1 70.1 87.6 93.8 100.0

Missi ng Total

Features Rank 1 Rank 4 Rank 2 Rank 5 Rank 3 Rank 6

Features share the same rank as quality

53

 Design Frequen cy Percent Valid Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Total 19 14 32 11 19 5 100 19.0 14.0 32.0 11.0 19.0 5.0 100.0 Valid Percent 19.0 14.0 32.0 11.0 19.0 5.0 100.0 Cumulativ e Percent 19.0 33.0 65.0 76.0 95.0 100.0

Design
Rank 1 Rank 2 Rank 3

Rank 4 Rank 5 Rank 6

Design of Samsung air conditioners is ranked 3. Price

54

Frequen cy Percent Valid Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Total 16 16 40 12 3 13 100 16.0 16.0 40.0 12.0 3.0 13.0 100.0

Valid Percent 16.0 16.0 40.0 12.0 3.0 13.0 100.0

Cumulativ e Percent 16.0 32.0 72.0 84.0 87.0 100.0

Price

Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6

Price ranked 3 the most Efficiency

55

Frequen cy Percent Valid Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Rank 7 Total 12 15 55 2 2 11 3 100 12.0 15.0 55.0 2.0 2.0 11.0 3.0 100.0

Valid Percent 12.0 15.0 55.0 2.0 2.0 11.0 3.0 100.0

Cumulativ e Percent 12.0 27.0 82.0 84.0 86.0 97.0 100.0

Efficiency
Rank Rank Rank Rank 1 2 3 4

Rank 5 Rank 6 Rank 7

Efficiency ranked 3 the most. Brand Name Frequen cy Percent

56

Valid Percent

Cumulativ e Percent

Valid Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Rank 7 Total

25 19 31 10 2 10 3 100

25.0 19.0 31.0 10.0 2.0 10.0 3.0 100.0

25.0 19.0 31.0 10.0 2.0 10.0 3.0 100.0

25.0 44.0 75.0 85.0 87.0 97.0 100.0

Brand Name
Rank Rank Rank Rank 1 2 3 4

Rank 5 Rank 6 Rank 7

Brand name- Rank After Sales Frequen cy Percent

57

Valid Percent

Cumulativ e Percent

Valid Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Rank 7 Total

7 16 29 5 6 3 34 100

7.0 16.0 29.0 5.0 6.0 3.0 34.0 100.0

7.0 16.0 29.0 5.0 6.0 3.0 34.0 100.0

7.0 23.0 52.0 57.0 63.0 66.0 100.0

After Sales
Rank Rank Rank Rank Rank Rank Rank 1 2 3 4 5 6 7

LG Frequen Percent
58

Valid

Cumulativ

cy Vali d Quality Frequen cy Percent Valid Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Rank 7 Total 9 26 48 8 4 1 4 100 9.0 26.0 48.0 8.0 4.0 1.0 4.0 100.0 100 100.0

Percent 100.0

e Percent 100.0

Valid Percent 9.0 26.0 48.0 8.0 4.0 1.0 4.0 100.0

Cumulativ e Percent 9.0 35.0 83.0 91.0 95.0 96.0 100.0

LG Quality
Rank Rank Rank Rank 1 2 3 4

Rank 5 Rank 6 Rank 7

59

Quality ranked 3 by consumers.

Features Frequen cy Percent Valid Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Rank 7
60

Valid Percent 16.0 24.0 32.0 11.0 9.0 2.0 6.0

Cumulativ e Percent 16.0 40.0 72.0 83.0 92.0 94.0 100.0

16 24 32 11 9 2 6

16.0 24.0 32.0 11.0 9.0 2.0 6.0

Total

100

100.0

100.0

Features
Rank Rank Rank Rank Rank Rank Rank 1 2 3 4 5 6 7

Features of LG air conditioners-Rank 3 Design Frequen cy Percent Valid Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Rank 7 Total 9 21 43 6 11 7 3 100 9.0 21.0 43.0 6.0 11.0 7.0 3.0 100.0 Valid Percent 9.0 21.0 43.0 6.0 11.0 7.0 3.0 100.0 Cumulativ e Percent 9.0 30.0 73.0 79.0 90.0 97.0 100.0

61

Design
Rank Rank Rank Rank Rank Rank Rank 1 2 3 4 5 6 7

Rank 3 for design the highest Price Frequen cy Percent Valid Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Rank 7 Total 5 19 40 22 8 3 3 100 5.0 19.0 40.0 22.0 8.0 3.0 3.0 100.0 Valid Percent 5.0 19.0 40.0 22.0 8.0 3.0 3.0 100.0 Cumulativ e Percent 5.0 24.0 64.0 86.0 94.0 97.0 100.0

62

Price
Rank Rank Rank Rank 1 2 3 4 Rank 5 Rank 6 Rank 7

Price ranked 3 the most Efficiency Frequen cy Percent Valid Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Rank 7 Total 4 16 40 11 20 2 7 100 4.0 16.0 40.0 11.0 20.0 2.0 7.0 100.0 Valid Percent 4.0 16.0 40.0 11.0 20.0 2.0 7.0 100.0 Cumulativ e Percent 4.0 20.0 60.0 71.0 91.0 93.0 100.0

63

Efficiency
Rank Rank Rank Rank Rank Rank Rank 1 2 3 4 5 6 7

Efficiency-Rank Brand Name Frequen cy Percent Valid Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Rank 7 Total 8 16 41 8 5 16 6 100 8.0 16.0 41.0 8.0 5.0 16.0 6.0 100.0 Valid Percent 8.0 16.0 41.0 8.0 5.0 16.0 6.0 100.0 Cumulativ e Percent 8.0 24.0 65.0 73.0 78.0 94.0 100.0

64

Brand Name
Rank Rank Rank Rank Rank Rank Rank 1 2 3 4 5 6 7

Rank 3 for brand name of LG After Sales Frequen cy Percent Valid Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Rank 7 Total 13 13 31 4 9 7 23 100 13.0 13.0 31.0 4.0 9.0 7.0 23.0 100.0 Valid Percent 13.0 13.0 31.0 4.0 9.0 7.0 23.0 100.0 Cumulativ e Percent 13.0 26.0 57.0 61.0 70.0 77.0 100.0

65

After Sales
Rank Rank Rank Rank 1 2 3 4

Rank 5 Rank 6 Rank 7

Rank 3 highest for after sales

WHIRLPOOL Frequen cy Percent Vali d Quality Frequen cy Percent Valid Rank 1 Rank 2 Rank 3 Rank 4 Rank 5
66

Valid Percent 100.0

Cumulativ e Percent 100.0

100

100.0

Valid Percent 10.0 20.0 19.0 14.0 3.0

Cumulativ e Percent 10.0 30.0 49.0 63.0 66.0

10 20 19 14 3

10.0 20.0 19.0 14.0 3.0

Rank 6 Total

34 100

34.0 100.0

34.0 100.0

100.0

WHIRLPOOL Quality
Rank Rank Rank Rank Rank Rank 1 2 3 4 5 6

Quality ranked 6 the most.

67

 Features Frequen cy Percent Valid Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Total 17 5 6 36 2 34 100 17.0 5.0 6.0 36.0 2.0 34.0 100.0 Valid Percent 17.0 5.0 6.0 36.0 2.0 34.0 100.0 Cumulativ e Percent 17.0 22.0 28.0 64.0 66.0 100.0

Features
Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6

68

Features ranked 6 the most for Whirlpool Design Frequen cy Percent Valid Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Total 8 12 5 3 6 66 100 8.0 12.0 5.0 3.0 6.0 66.0 100.0 Valid Percent 8.0 12.0 5.0 3.0 6.0 66.0 100.0 Cumulativ e Percent 8.0 20.0 25.0 28.0 34.0 100.0

Design
Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6

Design rank 6
69

 Price Frequen cy Percent Valid Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Rank 7 Total 7 2 43 6 17 5 20 100 7.0 2.0 43.0 6.0 17.0 5.0 20.0 100.0 Valid Percent 7.0 2.0 43.0 6.0 17.0 5.0 20.0 100.0 Cumulativ e Percent 7.0 9.0 52.0 58.0 75.0 80.0 100.0

Price
Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Rank 7

Price ranked 3 the most. Efficiency

70

Frequen cy Percent Valid Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Total 20 2 35 17 26 100 20.0 2.0 35.0 17.0 26.0 100.0

Valid Percent 20.0 2.0 35.0 17.0 26.0 100.0

Cumulativ e Percent 20.0 22.0 57.0 74.0 100.0

Efficiency
Rank 1 Rank 2 Rank 3 Rank 4 Rank 5

Efficiency ranked 3

Brand Name
71

Frequen cy Percent Valid Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Total 2 22 24 6 3 43 100 2.0 22.0 24.0 6.0 3.0 43.0 100.0

Valid Percent 2.0 22.0 24.0 6.0 3.0 43.0 100.0

Cumulativ e Percent 2.0 24.0 48.0 54.0 57.0 100.0

Brand Name
Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6

Brand name ranked 6 the most. After Sales

72

Frequen cy Percent Valid Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Rank 7 Total 24 10 1 3 1 40 21 100 24.0 10.0 1.0 3.0 1.0 40.0 21.0 100.0

Valid Percent 24.0 10.0 1.0 3.0 1.0 40.0 21.0 100.0

Cumulativ e Percent 24.0 34.0 35.0 38.0 39.0 79.0 100.0

After Sales
Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Rank 7

After Sales again ranked 6 the most. VIDEOCON

73

Frequen cy Percent Vali d Quality Frequen cy Percent Valid Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Total 4 12 9 54 21 100 4.0 12.0 9.0 54.0 21.0 100.0 100 100.0

Valid Percent 100.0

Cumulativ e Percent 100.0

Valid Percent 4.0 12.0 9.0 54.0 21.0 100.0

Cumulativ e Percent 4.0 16.0 25.0 79.0 100.0

VIDEOCON Quality
Rank 2 Rank 3 Rank 4 Rank 5 Rank 6

74

Quality of Videocon Air conditioners ranked 5 the most,

Features Frequen cy Percent Valid Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Total
75

Valid Percent 20.0 9.0 5.0 14.0 51.0 1.0 100.0

Cumulativ e Percent 20.0 29.0 34.0 48.0 99.0 100.0

20 9 5 14 51 1 100

20.0 9.0 5.0 14.0 51.0 1.0 100.0

Features
Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6

Features ranked 5 the most Design Frequen cy Percent Valid Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Total
76

Valid Percent 28.0 21.0 6.0 12.0 32.0 1.0 100.0

Cumulativ e Percent 28.0 49.0 55.0 67.0 99.0 100.0

28 21 6 12 32 1 100

28.0 21.0 6.0 12.0 32.0 1.0 100.0

Design
Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6

Design- Rank 5 Price Frequen cy Percent Valid Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Total 3 31 51 9 3 3 100 3.0 31.0 51.0 9.0 3.0 3.0 100.0 Valid Percent 3.0 31.0 51.0 9.0 3.0 3.0 100.0 Cumulativ e Percent 3.0 34.0 85.0 94.0 97.0 100.0

77

Price
Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6

Price ranked 3 the most

Efficiency Frequen cy Percent Valid Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Total 3 5 30 6 28 28 100 3.0 5.0 30.0 6.0 28.0 28.0 100.0 Valid Percent 3.0 5.0 30.0 6.0 28.0 28.0 100.0 Cumulativ e Percent 3.0 8.0 38.0 44.0 72.0 100.0

78

Efficiency
Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6

Efficiency ranked 3. Brand Name Frequen cy Percent Valid Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Rank 7 Total 5 9 2 25 10 46 3 100 5.0 9.0 2.0 25.0 10.0 46.0 3.0 100.0 Valid Percent 5.0 9.0 2.0 25.0 10.0 46.0 3.0 100.0 Cumulativ e Percent 5.0 14.0 16.0 41.0 51.0 97.0 100.0

79

Brand Name
Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Rank 7

Brand name ranked 6 the most. After Sales Frequen cy Percent Valid Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Rank 7 Total 3 4 4 6 10 25 48 100 3.0 4.0 4.0 6.0 10.0 25.0 48.0 100.0 Valid Percent 3.0 4.0 4.0 6.0 10.0 25.0 48.0 100.0 Cumulativ e Percent 3.0 7.0 11.0 17.0 27.0 52.0 100.0

80

After Sales
Rank 1 Rank 2 Rank 3 Rank 4 Rank 5 Rank 6 Rank 7

After sales ranked 6 the most for Videocon.

Findings

The following facts are revealed from the present study of consumer behaviour in the marketing of Samsung air conditioners: Motivational factors: 1. Need recognition: Necessity is the main purpose of buying any consumer durable item.

2. Influences on purchase decision Almost everyone requires some help while deciding on what to buy and would want his/her family to accompany for the final purchase. While obtaining information about what product to buy, a family member or friends recommendation is trusted the most.
81

Purchase process: 1. Factors affecting brand selection: Quality of a consumer durable item is given the highest importance while before considering an item. This is followed by price.

Very few people are seen getting influenced by offers, Always, and discount is the offer most availed.

2. Place and mode of purchase Mutilbrand shops are the most preferred when it comes to buying a consumer durable item.

People prefer paying through the cash that is readily available to them.

Most preferred brand for air conditioners:

1.

Samsung and LG electronics are rated almost equally and ahead of all other brands. After sales for LG scores more while the other parameters weigh equally for both brands.

2.

Hitachi as a brand is liked for the quality of its air conditioners the most but rank lower than the Big Brands in all other parameters. Whirlpool too lies on almost the same scale.

3.

Videocon and Voltas as brands of air conditioners are the least preferred. They rank well in the Price aspect but achieved a poor rank for all other parameters.

82

In short, the Big Brands;viz, Samsung and LG rank the highest amongst the choice of best air conditioners to buy.

Relationship across categories:

1.

Buying a product out of necessity is the highest opted for option by different age groups too. It clears the myth that most youngsters in todays time would want to own something just for the heck of it.

2. The above is also true for people belonging to different income groups also.
3.

People of different age groups choose multibrands as the most convenient place for buying a consumer durable item. Reason being it offers whole lot of choices.

4. All income groups prefer buying through the cash readily available with them.

Competition tracking LG stays the leading brand for both Split and Window type of Air conditioners with the highest ranking across the country as well as in Delhi and NCR.

Samsung is number two in the ranking followed by Voltas.

LG leads in the number of models too.

General findings Posted on a website, Samsung is the first brand to have offered protection against SWINE FLU in Pakistan and Afghanistan. Website of LG and Voltas have the feature named tonnage calculation and electricity consumption measure in their air conditioner category.
83

 Bad response of Samsungs after sale service on consumer forum websites complaining delay in response and false promises.

A general problem seen while surveying the sample area; most housing societies in East Delhi are situated near the sewage water canals. As per the people residing here emission of certain type of gases the air conditioner pipes get leaked in every two months. According to service engineers, it is the type of material used which is the problem. Due to this, there has been a fall in the use of Air conditioners thinking it to be a huge burden.

Limitations

Samsung did not get success in marinating customer faith and trust as being a foreign brand
84

 The after sales services were not very good as compared to main competitor LG. The spare parts were not readily available as it was being outsourced. The training period was very less. The data collected may not be reliable in some cases as it was collected various sources that does not have any formal relation with SAMSUNG.

Conclusion and Recommendations

Conclusion Marketing is not just selling and telling people but it is selling the customer satisfaction at a profit. Good knowledge of consumer behaviour helps marketers produce products that will satisfy the customers.

85

The study reveals very clearly that a consumer of today is dependent the most on consumer durable items. Samsung as a brand has performed to its level best to meet the increasing amount of dependency. It has gained a huge market share which shows the amount of satisfying customers they have. The study also shows that a customer today is well informed and makes a purchase decision after detailed evaluation.post purchase behaviour is equally important as a dissatisfied customer would spread the bad word around affecting the image of a company. Therefore, the study of consumer behaviour with respect to Samsung air conditioners proves that a clear knowledge of consumer behaviour is a key success factor in the consumer durable market. Recommendations The following are made based on the results of the study:

LG is and continues to be a big competition for Samsung air conditioners. With LG leading the rankings, it becomes all the more important for Samsung to innovate and plan well for the coming seasons.

Displays in stores influence the buying decision of a consumer and so the availability of catalogues and models at various stores should be checked on.

Inshop demonstrators to be skilled better in order to get more sales out of them.

After sales service to be majorly strengthened promising on time and better services.

Ways to boost sales in Samsung plazas in malls with the help of more displays, more readily available models and promotion.

86

To summarise the recommendations, the following framework is suggested:

Where Branding for a company gets it wrong Persuading the Sub Conscious Mind Making your brand uniquely Rewarding Aligning the Business with the Brand Strategy Getting your Audience to enter the game

87

BIBLIOGRAPHY
1.

Baker, Michael J. Marketing- An Introductory Text 6th Edition, Macmillan Press Ltd.

2. Wissen-Dictionary of marketing

3. Richard L.: Marketing (2000, S. 218)

4.

Leon, G. Schiffman and Leslie Lazar Kanuk,Consumer Behaviour,Prentice Hall of India Pvt. Ltd. New Delhi

5. The Marketing Whitebook, 2010-11, Businessworld

6. Tjaco Walvis, Branding with Brains, Pearson 2010, HARBOW, England

7.

www.samsung.co.in

8.

www.lgindia.com

9. Catalogues of leading brands of Air conditioners

10. Reviews

at www.consumerdaddy.com

11.Cosumer forum websites

88

12.ORG reports

Annexure

1. Your purpose in mind while buying a Consumer Durable Item: Necessity For enhancing ones status As a luxury

2. How do you make your purchase decision, Is It: Aided ( with help) Unaided (without help)

3. Which Purchase pattern is followed at your place? Individual Family

89

4. Place of purchase preferred : Modern retail stores Brand shops Multibrand shops Others

5. Purchase decision influenced by: Recommendation by friends and acquaintances

Advertisements Displays in stores Talk with salesman Others

6. On what all parameters do you base your purchase decision (rank on a scale from 1 to 6..1-highest,6-lowest) Price Product Quality Brand image Packaging Features

90

7. Are you influenced by offers ? Always Often Occasionally Rarely Never

8. Offers availed during purchase: Exchange Discount Free gifts None

9. Mode of purchase: Ready cash payment Consumer loans Instalment schemes Credit purchase

91