MARKETING PROJECT

PART-1
Product-Air conditioner
A New Product is launched by Sony
Corporations

By GROUP 8:
AYUSHI CHOUDHARY 231038
ANJAN

2310

ANKIT BANSAL

2310

ALOK PATIL

2310

DEEPAK YADAV

2310

GINNIE DHANKAR

2310

INDUSTRY ANALYSIS
Porters 5 forces:
1. Threat of new entrants: The initial investment of setting up a plant is high. Also, the existing
players have strong distributional channels.
2. Bargaining power of suppliers: There is comparatively a higher number of suppliers, so
bargaining power is LOW.
3. Bargaining power of buyers: There are large numbers of players in the market, so quality and
performance is the most important factor while selecting the product. It gives high bargaining
power to buyers.
4. Firms rivalry: The industry is not concentrated, and there are large numbers of Indian
Companies and MNCs, hence there is a higher degree of rivalry.
5. Degree of competition : The level of competition is high.

Comparison: Organized and unorganized sector

The Air conditioner market has great potential because AC penetration in India currently is only about
3%.(home air conditioners).
Due to multiple players and stiff competition the air conditioners in organized sector are almost similarly
priced to their unorganized counterparts, also due to better distribution of leading brands the market
share of unorganized sector is almost negligible.
Tough the air conditioner market has experienced negative growth in past three years. This year about
three million units have been sold which is just about what was sold in the past year.
However the industry is expected to grow about a CAGR of 14% till the year 2019.

Leading market players:

About two years back Voltas toppled LG as the top market share holder in the Indian air conditioning
industry. However one of the major reasons for this was the fact that LG completely withdrew itself
from the window air conditioner market hence sales volume dropped partially.
Major impacting factors for Voltas were Energy efficiency, warranty, after sales service, aesthetics.These
factors were the major drivers in the market.
The market share for year 2013 is as follows.

Company name
VOLTAS
LG
PANASONIC
DAIKIN
SAMSUNG

Market share (2013)

18%
16.89%
13%
12%
11%

These were closely followed by Godrej and Videocon.

Indirect Competition
1. Indirect direct evaporative cooling - The Indirect system uses evaporative media in a cooling tower
to cool water down to temperatures approaching the wet bulb temperature. This water is then pumped
through a water coil to lower the entering air temperature without adding any moisture to the
airstream. An Indirect/Direct system will also have a direct evaporative module downstream of the
indirect section. This section will lower the dry bulb temperature even more by adding moisture to the
airstream.

Energy efficient: The American Society of Heating, Refrigerating, and Air-Conditioning Engineers
(ASHRAE) points out that system that uses a proven method for exchanger construction can lower
energy consumption by 50 percent or more when compared to standard packaged air conditioning.

CFC-free cooling: It is also free from environmentally damaging products. Because these systems
rely on water, they leave a significantly smaller carbon footprint and therefore offer a sustainable
method of cooling.

Competitive initial cost & low maintenance: It has a very competitive initial cost. This means that by
cutting the operation cost (sometimes in half) and decreasing maintenance costs - leads to real longterm savings at no additional initial cost.

Effective : Evaporative cooling actually becomes more effective as the temperature increasesjust
when traditional air conditioning becomes less effective. It works in all areas of the country, not just
in hot, dry climates.

2. Air coolers

The most important benefit- relatively cost effective.

Suitable for individual cooling in the summers unlike the ACs which cool the whole room.
Several types based on their ability of cooling and also easy to install.
The energy consumption of the air coolers is also comparatively low which can reduce your
electricity expenses.
Eco friendly.

Pestle Analysis
Political

India is a politically stable country which has positive impact on business activities.
The government has proposed a reduction in taxes in this years budget (2014-15).

Economic

There is a growing affluent middle class population in the country.

Robust economic growth coupled with booming retail sector will ensure that the expectation of a
25-30 percent growth in near future is a reality for this sector.

Social

Increase in the employable population in the country and more nuclear families, so more potential
customers.
Increasing competition among brands leads to decline in prices therefore higher affordability and
greater chances of people up-grading.

Technical

In India, inverter air conditioners use superior technology that varies the compressor speed air
conditioner according to room temperature, thereby saving around 30 percent on your power bill
even though they come with a hefty price tag of Rs 5000 are being accepted by the market.

Legal

Backed by the environmental protection agency (EPA), the US government and 190 countries
worldwide, January 1 marked the beginning of the phase out of hydrochloroflurocarbons.
In accordance with the MONTREAL PROTOCOL, from 2015 it will be illegal to use Hydro
chlorofluorocarbons (HCFCs), including the ozone-depleting refrigerant gas R22, in refrigeration,
heat pump and air conditioning (AC) systems. R22 is commonly used in AC systems pre-dating 2004
and so its ban will have a major effect on air-conditioning costs.

Environmental

In addition to placing strains on nations' power grids, air conditioners pose threats to the
environment and environmental health.

MARKET ANALYSIS
SEGMENTATION
Different segments created for Acs are:
1. On the basis of Demographic (Income): Lower Middle, Middle and high above.
2. On the basis of Geography(Region): North, East, West, and South.

3. On the basis of Behavioral (Usage): Domestic, Industrial.

4. On the basis of Preference: Central AC, Window, and Split AC.
5. On the basis of Benefits: Quality, service, economy.
TARGETTING and POSITIONING
INCOME GROUPS: As the income of people is increasing, demand for Ac is growing. Companies like
Carrier Aircon, Voltas, Fedders Llyod and Godrej-GE have introduced zero-interest installment schemes
as an option for its customers.Carrier even started targeting the lower segments of the market.
We should target lower middle income groups.
REGIONS:
CITIES
DELHI
MUMBAI
HYDERABAD
KOLKATA
BANGALORE

MARKET SHARE
28
35
04
04
02

The above figures explain that the sale of ACs is restricted to metros. This is so because the ACs still have
a very low penetration as compared to other durable goods. For central and north India, desert cooler is
preferred.
We should target metro cities.
PREFERENCES: Central AC segment is controlled by big players like Blue Star that have the facilities,
technology and personnel required to execute projects.LG hasemerged as the leading player in room ac
with respect to its innovation in offeringsuperior products. It changed the definition of ACs by terming
them as health air systems.
We should target room ac as it has more demand.
USAGFE:Blue Star enjoys a competitive advantage of having over 70 per cent of corporate and
commercial customers. The home segment witnessed an almost 30 percent growth in the lasttwo years
compared to the commercial segment. This is because AC is no longer perceived to be a luxury, and
better distribution network, finance schemes and large scaleadvertising have grown the market.
We should target home segment as its share is increasing at a rapid rate.
BENEFITS: Samsung provides energy efficiency as runs on less energy and gives 20% savings on
electricity bill provides incentive for middle class. It is also using the Internet for speedy order and
deliveryof spare parts. It is offering a combination of better services, features. LG is working on
incorporating its plasma technology in window ACs as well.
We should target to provide premium quality and energy efficient.

POSITIONING
SONY company wants to provide its target market with a line of Air Conditioners that are energy
efficient, of good quality and at a relatively lesser rates than its competitors. Sony company has already
been present in the market with its diverse product offerings in various business sectors thus the market
knows about the brand. They associate Sony company with values, trust and care. Sony will position
itself as a company which is providing technologically superior air conditioners at the best prices in the
market. Usually in a market like India the consumer looks at the products in a category, at different
levels of price, offering different standards of quality, and decides which price-cum quality level is most
suitable for a given need. The ACs provided by Sony will gradually strike a chord with the market
because of its quality and after sales services and then only could the company expand its positioning as
a brand. Sonys objective to provide with a product that would change the perception of air
conditioners from a luxury product for the high and the elite to a consumer durable for the common
man of India will be fulfilled by this.

Perception Map
Energy efficiency (High)
Blue star
Panasonic
LG

Voltas

Room cooling capacity (low)

room cooling capacity (high)

Daikin

Samsung

Hitachi
Godrej

Energy efficiency (Low)

Performance of the existing product of SONY

Sony India in 2010-11 touched a turnover of more than $1 billion and won the best performing
subsidiary award from the parent company. Sony has a variety of product to offer like tv and audio
system, digital photography to computer peripherals, games to mobile phone and other accessories.
Sony enjoys a cult status in India and is conceived as a super-premium brand with relatively higher
pricing than competitors like LG and Samsung. It is this price positioning which has made the brand
aspirational to consumers down the ages, right from transistor radio, Trinitron TV, Walkman, music
systems or PlayStation. According to market research firm Display Search, Sony is well positioned in the
Indian TV market with the strongest brand image and highest number of brand shops which acts to
reassure consumers that the brand is doing well
Sonys Indian unit sold more than 9.5 lakh Bravia televisions, which contributes more than 35% to Sony
India's total sales. Sony Bravia enjoys 40% share in LED TV, Cybershot has 42% share in compact digital
cameras, Handicam 90% share in camcorders, and Sony Vaio 20% share in consumer laptops. The
smartphone business accounted for 10-15 % of Sony India's total revenue of Rs 10,000 crore in 201314,Sony grew its market share in the smartphone business from 6% in 2013 to 10% by value. Sony
PlayStation (PS) has 80 per cent share in the Indian game console market (2011) it good but Sony isnt
celebrating yet because India has just 2% penetration rate of gaming console . The Indian game
console market is estimated at Rs 500 crore, growing at a CAGR of 35 per cent.

Promotion Techniques of the SONY

The company last year pumped in Rs 360 crore as marketing investment, which it plans to grow
substantially. In advance of the ICC Cricket World Cup 2011, which was staged in India in March 2011,
Sony launched a major advertising campaign for BRAVIA LCD televisions featuring Indias national team
captain, Mahendra Singh Dhoni, as Sony Brand Ambassador. Sony also has regional chain stores in
specific areas which it give upper hand to provide an extreme quality product services to its customer,
and both types of stores continue to see sales growth. we can see the promotion of the Sony in various
categories
Sony Marketing Communication Mix
Sony India will spend Rs 200crore in this financial year on advertising and promotion of the entire range
of consumer electronics, out of which Rs 60crore will be spent only on digital imaging products. The
major elements of promotion mix include advertising, personal selling, sales promotion, direct
marketing, and publicity. Sony Corporation has used all of these marketing communication mix
elements.

Advertising
Sony uses some events like Miss India 2008 to promote its products. Also, Sony has advertised its games
like PlayStation 3, PlayStation 2 and PSP using sports like football in England premiere league. Through
newspapers like Times of India, Sony has advertised a wide range of products it offers to its customers.
And also through Posters a message has been sent to a lot of people to be aware of the products which
Sony offers
Sales Promotion
Sony promoted them by earl bird prizes by saying that all BRAVIA full HD LCDTVs purchased during July
2008 and registered within two weeks of purchase qualify for a Bonus Playstation 3 as long as the
customer claims is one of the first 35,000 received and validated by Sony. Also Sony has promoted its
Sony Ericsson P1i phones by including a scratchcards which gives the customer the offer to download 10
free software application for that mobile phone. Sony Ericsson has also promoted its Sony Ericsson
K550i Mid-Range Cyber-shot Phone that if you buy it you get a free Bluetooth headset with one year
manufacturers warranty.
Public Relations and Publicity
Through its website, Sony corporation has its provided contacts for those customers who will be in need
of any information from the company. In this way Sony can create a mutual relationship with its
customers and ensure that it serves the wishes and demands of its customers. Unpleasant situations
arising as a result of negative events may precipitate unfavorable public reactions for an organization.
To minimize the negative effect of such situations leading to unfavorable coverage, the company has
policies and procedures in place to manage help any such public relation problems.

OBJECTIVES
The objective of the company is to increase the sales volume , market share and profit slowly and
steadily in the next 5 years and become the largest shareholder in the industry .
Around 3.1 million Room AC's were sold last year . The total worth of the industry in terms of rupees is
Rs.7800 crore. The largest market share was of Voltas which had a share of 18 % last year. The company
also plans to sell AC's to automobile industry thus increasing the sales by a significant number.
Initially the plan will be to establish a good sales volume in metropolitan cities and tier 1 cities.
The penetration of AC's as of now in India is very low . The company plans to sell AC's in tier 2 and tier 3
cities as well after 2 years with a well set dealership network.
The forecasted CAGR is 13.6% in the next 5 years and the company plans to make the maximum profit
during these 5 years.
Last year the overall AC sales of all the players combined were more than3 million and this is estimated
to be around 3.4 million this year. The company has an objective of increasing the sales volume at a
higher rate than the average of the market. The sale volume will be increased slowly over 5 years. The
company plans to have a market share larger than the biggest market player in the next 5 years. The
profit margin has been kept at 5% of the total revenues initially and plans to increase its profit over the
next 5 years.