Research Paper 1

of the perception of customer and dealers

Abstract

regarding the different manufacturers. Findings are that the customer walk in is

A survey was undertaken to analyze the market

of

fully

automatic

washing

machines in Ludhiana city with the special reference to LG Electronics India Pvt. Ltd. This research was done in order to find out the consumer perception regarding fully automatic

washing

machines

and

regarding the different washing machine manufactures. This research has been done on the present customers to ascertain the brand loyalty among customers. The other objective of the research is to find out the display share of different companies in Ludhiana and to ascertain the market share in the present consumer durable industry.

mainly from rural sector and the customer mind set is already there that they want to purchase semi automatic washing machine because fully automatic machines are difficult to use and they are costly as compared to semi automatic washing machines.

Other

reasons

given

by

customers are that servants usually handle machines and it is difficult for them to understand the working of the fully automatic washing machine. Other findings according to the dealers that they prefer to sell semi automatic because of customer demand that is mainly due to the lower price of semi automatic machines. Dealers said that customers are

This report provides an overview of the

more brand cautious now they purchase

industry in the current scenario and the

only those products which appeals to them

future opportunities available with the

more. There is no pre set platform

different companies manufacturing and

available for any company to sell there is

selling goods in Indian market. Also, this

wider competition in the market, so it is

report provides information regarding the

not easy to sell whatever they want.

market share of different companies present in the Indian consumer durable market. For this purpose survey was conducted among the present customers in Ludhiana city. On the basis of research data, findings were drawn which provides the clear idea

Introduction Consumer durables are the products whose life expectancy is at least 3 years. These products are hard goods that cannot be used up at once. The consumer durables sector can be segmented into consumer electronics, such as, VCD/DVD, home theatre, music players, color televisions (CTVs), etc. and white goods, such as, dish washers, air conditioners, water heaters, washing machines, refrigerators, etc

phones, washing machines, microwave ovens, refrigerators, music systems, etc. The growth in the consumer durables sector has been driven primarily by factors such as the boom in the real estate & housing

industry,

higher

disposable

income, decrease in the availability of time with the consumers, emergence of the retail industry in a big way coupled with rising affluence levels of a considerable section of the population.

Industry size, growth and trends The volume share of the single largest

The Indian consumer durables industry has

consumer durable was color TVs at 30%,

changed a lot in the last couple of years.

followed

There is change in a life style, higher

conditioners at 18% and 13% respectively.

income makes the goods affordable and

Washing machines and other assorted

with the increase in the advertisement the

consumer durables captured a share in the

consumer behavior has changed a lot

total volume by 5% and 34% respectively.

towards consumer durable goods. Now the consumer purchases these goods and even they change their older variants with the new variants available in the market. One major constraint that is time has changed the consumer durable demand more than any other factor. Today the consumers have less time than before because they are busier with their day to day activities. This industry consists of those goods which are used for the daily routine purpose or we can say for the domestic purposes such as televisions, mobile

by

refrigerators

and

air

Projected Growth rate Consumer Durables Air Conditioner Refrigerator Microwave Ovens Washing Machines Color Televisions (CTVs) Black &

Growth Rate 15-20% 5-10% 25% 5-10% 15-20%

White -20%

Televisions Consumer

15%

Electronics (Overall)

The top 5 players in consumer durables sector are •

Nokia India

•

LG Electronics India Ltd.

•

Philips India

•

Titan Industries

•

Samsung India Electronics

Literature Review

A washing machine or a clothes washer is

Appliances is projected to grow

a machine manufactured and used to wash

exponentially at a compounded

the laundry that is cloths, towels and

annual growth rate (CAGR) of

sheets.

30%.Hi-technology durables are expected to introduce US$ 4.09

All the washing machines work by using

billion Indian durables market in

mechanical energy, thermal energy, and

2009.

chemical action. Mechanical energy is supplied to the clothes load by the rotation of the agitator in the top load washing machines, or by the tumbling feature of the drum in front load washing machine. Thermal energy is supplied by the temperature of the wash bath. •

to

Corporation”

(Applied

Market

Intelligence),

Country's

fiscal

encouraged

Indian

has

“Isuppli

consumer electronic industry. The reduction on import duty in the year 2005-06 has benefited many companies, such as Samsung, LG, and Sony. These companies import their premium end products from manufacturing facilities that are located outside India. Also Isuppli predicts that market will grow to US$ 6.59 billion by 2011. •

According to FICCI, The sectors which have recorded excellent growth rates of more than 20 per cent in terms of quantity produced are Air Conditioners (25 per cent), Split Air Conditioners (42.6 per

According

policy

•

In a study conducted by Frost & Sullivan and commissioned by India Semiconductor Association (ISA), the demand for Electronic

cent) Micro Wave Woven (27.3 per cent),

DVDS

(25

per

cent)

VCD/MP3 (20per cent), Colour Picture Tube (23 per cent,) The sectors which have recorded high growth rates between 10 and 20 per cent in April-March 2004-05 over the corresponding previous period are

Colour

Television

(12%),

Window Air Conditioners (18.8 per cent ), Washing Machines (18.1 per cent Watch (10%), Frost Free Refrigerators (13.8%). Washing Machines is estimated to have grown by 18.1 per cent from 1.35 million units in 2003-04 to 1.6 million units in 2004-05.

•

According to a recent research conducted

by

the

Business

Standard, the washing machine market in India is estimated to be about 1.95-2 million units and constitutes 33 per cent of the durables

market.

LG

has

maintained an overall leadership in washers with a 27 per cent share. IFB has replaced Whirlpool as the marked

leader

automatic

in

washing

the

fully-

machine

category and LG clocked leading sales in semi-automatic washers (28.6 per cent), while Samsung bagged 17.8 per cent, followed closely by Videocon which bagged 17.3 per cent, knocking Whirlpool out of the top three. Of the 1.8 lakh washers

sold,

1.4

was

semi-

automatic.

Research Objective

 To study the market to find out the different reasons for the less sale of the

fully

machine

automatic as

compared

Washing to

the

semiautomatic washing machine.  To analyze consumers perception

UNIT OF STUDY The sample or target customers mainly comprise of the washing machine owners those who have purchased semi automatic washing machines and full automatic washing machines. Also the sample or the target includes the dealers and distributors

regarding LG electronics.  To study why the market share of LG electronics is less in fully

who full automatic washing machine. UNIVERSE OF STUDY

automatic segment as compared to semiautomatic washing machine

The research was conducted in the

segment.

Ludhiana city in Punjab.

 To know how much customer is aware

of

different

SAMPLING DESIGN

functions

available in different variants.

Convenient Non Probability Sampling was used to choose sample out of the target

METHODOLOGY RESEARCH DESIGN USED:

population SAMPLE SIZE: A total of 160 people have been targeted

This study is based on the exploratory

for

the

purpose

research followed by descriptive research.

questionnaires.

of

obtaining

Exploratory research is done in order to find the problem with fully automatic segment in Ludhiana region, why the sales of fully automatic washing machine is less as compared to the semi automatic washing machine. Descriptive research is done in order to get the exact reasons from the customers why they

prefer

machine

semiautomatic

more

washing machine

than

fully

washing automatic

Customer Type Customers

Number customers of 100

of

Semiautomatic washing machine Customers of Fully 50 automatic

washing

machine Dealers

& 10

Distributors Total

160

DATA COLLECTION: Primary Data The primary data collection comprises of questionnaire understand

which the

is

customer

mainly

to

perception

regarding LG products and to know the different reason for their preference of semi automatic washing machine. Secondary Sources  Internet  Company data  Newspaper Articles from – Times of India, Economic Times. Based on the information obtained from the

above

sources

concepts

were

developed on which analysis was made.

ANALYSIS & DISCUSSIONS

Following table shows the market share of

of LG Electronics is Samsung and

different companies with respect to their

Whirlpool with market share of 22.8% and

volume size in the last year. Different

18.2% respectively.

segments are studied as shown color television, Refrigerator (FF), Refrigerator (DC), Air Conditioners, Microwave Oven,

REASONS FOR THE PREFERENCE OF FULLY AUTOMATIC WASHING MACHINE

Washing Machine (SAWM), Top Load and Front Load

MARKET SHARE Product

LG

Samsung

Whirlpool

Other

C.TV

25.7%

16.1%

0%

40.4%

Ref (FF)

30.2%

22.4%

22.7%

16.8%

Ref (DC)

25%

15%

23%

26%

A.C

26%

16.4%

3.9%

37%

MWO

29.7%

18.2%

5.4%

31.1%

SAWM

25.6%

14.7%

15.3%

15.8%

T.L

24.9%

22.8%

18.2%

17.9%

F.L

27%

7.7%

5.2%

5%

This table shows that LG is on the top in the

category

of

Color

television,

Refrigerator (FF), Refrigerator (DC), Air Conditioners, Micro wave oven, Washing machine (SAWM) and in Top Load with 25.7%, 30.20%, 25%, 26%, 29.7%, 25.6%,

The main reasons for the preference of fully automatic washing machine are following •

Comfort: it provides comfort you

and 24.9% respectively. And in the

can just start the machine and can

segment of Fully automatic Front Load LG

do your work or you can rest you

is on the second position with market

need not to stand their waiting for

share of 27%, IFB which is considered as

cloth to get washed.

the most trusted brand in this segment is on the top with almost 45% market share. In the Top Load segment main competitors

•

Different preset programs (jeans, silk, wool, synthetic)

•

Delays start function.

purchased fully automatic because of its new and attractive looks, today designs are

Out of 50 customers 36 said that fully automatic washing machine provides more comfort as compared to semi automatic washing machine. 34 said that it has different preset programs which make their cleaning process easier than the semi automatic washing machine. 36 customers replied that delay start function makes their washing process more effective even if there is any power cut they need not to set the machine again. Other reasons for the preference of semi automatic washing machine as compared to fully are following: •

New technology

•

Delicate cloth wash

•

New designs/ Attractive looks

•

Hot wash function

•

Tumble wash

•

Deep cleaning

attractive and good enough that it can be placed in common room also in home. 29 customers

told

that

fully

automatic

washing machine provides them the best wash function ever experienced with hot wash function. 22 respondents said they purchased the fully automatic washing machine because of its function known as Tumble wash. 26 customers interviewed said

they

purchased

fully

automatic

washing machine for deep cleaning of cloth. REASONS FOR THE PREFERENCE OF SEMI AUTOMATIC WASHING MACHINE

Total 32 respondents agreed that they have purchased fully automatic because of its new technology which will provide them more results than semi automatic washing machine. 24 customers said they prefer fully automatic because of its delicate cloth wash. 33 respondents told that they

The main reasons for the preference of semiautomatic following

washing

machine

are

•

IT is difficult to operate full

dealer or what they have told by sales

automatic washing machine.

person. 31 said they took the opinion from their friends and relatives for the purchase

•

Less price than fully automatic

•

Not willing to change/ handy with semi automatic washing machine

of washing machine. 26 replied that semi automatic takes less time than fully automatic to wash the cloths. 30 said because servants handle machine that’s

Out of 100 customers 67 said that it is

why they have purchased semi automatic

difficult

automatic

washing machine. 42 said that fully

washing machine as compared to semi

automatic use more detergent and water it

automatic washing machine. 52 said that it

comes out to be costly that’s why they

has lesser price than fully automatic that’s

prefer semi automatic washing machine.

to

operate

fully

why they prefer semi automatic washing machine. 62 said that they are using semiautomatic washing machine from long

Does the following factor plays an important role in buying decision? O Band name

Y

N

O Promotion

Y

N

Other reasons for the preference of semi

O Washing Capacity Y

N

automatic washing machine as compared

O Aesthetics/ looks Y

N

to fully are following:

O Friends opinion

Y

N

O Prior knowledge Y

N

time and they do not want to shift.

•

Dealers / Sales person influence on semi automatic

•

Friends/Relatives opinion

•

Takes less time to wash the cloths than the fully automatic machine

•

Servants handle machine

•

Can wash more cloths with same water and detergent

Total 18 respondents told that they purchased what they have shown by the

Above diagram shows that the main factor that plays the important role in the buying

decision of the customer are Brand name

automatic washing machine and 75%

and Washing capacity. 116 customers

customers of fully automatic washing

said yes the brand name affects the buying

machine customers are satisfied from the

decision and 115 customers said yes the

products and after sale service of the LG

washing capacity affects the buying

Electronics.

decision. After that Looks, promotion and Opinion of friends and relatives considered to be the important factors with the positive response of 104, 97 and 91. Prior Knowledge is considered to be the least important as compared to the factors. This shows that customer is more brand

About 7% of the customers of semi automatic washing machine and 25% of fully automatic washing machine customer are not satisfied from the product and after sale service. Reasons for selling other Brands

cautious and they consider the main

O Customer demand/ Awareness

constraint washing capacity as the main

O Price of product

factor that plays the important role in the

O Unique Features

buying decision. SATISFIED CUSTOMERS WITH

O Brand cautious O After sale service O Other please specify…………………

THEIR PRODUCT

This pie chart shows that all the dealers Objective of the above question is to obtain the information that whether the customers of LG Electronics India Pvt. Limited. Nearly 93 % customers of semi

gave the reason for selling different brand is customer demand of different brands. 8 dealers gave the reason that the price of product

is

also

important

different

customers have different budget for the

purchase so different price range should be

different family size; every customer

available according to their demand. 3

has different family size.

dealers said different unique features of every company is important factor. 7 dealers said customer is brand cautious now they prefer specific brands. Brand name is important that’s why they sell different brands. 5 dealers agreed that after sale service of different companies also considered as one of the reason for selling different brand.

NUMBER OF FAMILY MEMBERS

The above diagram shows that the normal distribution curve is negatively skewed in nature with .140 values this is because the number of respondents vary in the family size. They have

CONCLUSIONS

 Customers still thinks that the brand

name,

promotion

and

According to the survey conducted

washing capacity of the washing

following findings are drawn:

machine

 From the above research the main thing which came out is that the customer is still focused on the traditional methods of washing. Mainly the customer walk in is from rural segment, many research organizations also said that rural

affects

the

buying

decision. Their prior knowledge of the brand today does not affect much because today the market is changing day by day now nothing is pre determined any one can sell their product in highly volatile market.

market is still open to all the

 According to the dealers customers

company , companies can grow

are brand cautious and also they

more by focusing on the rural

prefer quality product that can give

market.

value to their money invested.

 Customers

still

prefer

semi

automatic washing machine more than

fully

machine

automatic

because

of

washing

They sell the products of different brands in order to attract different customers.

different

 Most important factor which came

reason but the main reason for that

out is that the customers do not

was the price of the product, its

have the proper knowledge of

easiness to use the product and

different brands and the functions

they are not willing to change their

different companies provide.

preference.

 The customers are satisfied with

 Other reasons for the preference of

the products of LG and most of

semi automatic washing machine

them do not want to change their

over

product that means the customers

fully

automatic

washing

machine are that fully automatic washing machines are difficult to operate,

and

servants

washing machines.

handle

of LG are brand loyal.

 Customer feedback should be taken at regular interval; this will build a healthy

relationship

between

company and customer.

RECOMMENDATIONS  To compete with the other big brand LG Electronics India Pvt. Ltd. should encourage the dealers and distributor to focus on the fully automatic

washing

machine

segment more. This segment needs

 ISD on the various locations should be told to convert the of

their

washing

semi

automatic

machines

with

respect to other brand, because some companies offer their fully automatic washing machine at low prices.  To promote the selling of fully automatic

more attention.

customers

 Company should revise the price of

washing

machines

different promotional schemes can be

given

to

Distributors

and

Dealers.

fully

 Needs more display on multi brand

automatic. For this purpose they

showrooms and focus is required to

need to have complete knowledge

cover the untapped rural market.

of each and every function of the

Customers can be easily converted

washing machine. This will make

from semi automatic to top load if

their work easy to convert the

given

customer to fully automatic.

machines.

washing

machines

to

proper

knowledge

of

 The customers do not have the

 More promotion is required for this

proper knowledge for that the

segment. Advertisements should be

company

organize

given in the newspapers and on TV

exhibitions or display on the most

so that customer gets aware of the

crowded places like the recently

product.

should

organized in the Flames. There customers should be given proper knowledge regarding the product.

Consumer-Electronics-Market-inIndia.html.  http://www.managementparadise.co m/forums/business-environment-be/29377-industry-analysis-washingmachines-onida.html.

BIBLIOGRAPHY

 http://www.allbusiness.com/marketi ng-advertising/marketingtechniques/10511031-1.html.

 www.lgindia.com  http://www.free-press www.wikipedia.org  Economic Times  Business Standard  Ficci survey on consumer durable: http://www.ficci.com/surveys/consu mer-durable.pdf.  Company Sources  Market Research Report Preparation by N.K.Malhotra  Magazine- Business Today  www.org-marg.com  Articles by org-gfk  www.naukarihub.com  http://www.bharatbook.com/Market -Research-Reports/Booming-

release.com/news/200812/12307223 20.html.