final videocon crt tv project
TRANSCRIPT
Videocon Industries
Corporate Profile
Videocon is an industrial conglomerate with interests all over the world and based
in India. The group has 17 manufacturing sites in India and plants in China, Poland,
Italy and Mexico. It is also the third largest picture tube manufacturer in the world.
The Videocon group has an annual turnover of US$ 4.1 billion, making it one of the
largest consumer electronic and home appliance companies in India. Since 1998, it
has expanded its operations globally, especially in the Middle East.
In India the group sells consumer products like Colour Televisions, Washing
Machines, Air Conditioners, Refrigerators, Microwave ovens and many other home
appliances, selling them through a Multi-Brand strategy with the largest sales and
service network in India. Videocon Group brands include Sansui, Toshiba,
Electrolux, Kenstar, Next etc.
Videocon is one of the largest CPT Glass manufacturers in the world, operating in
Mexico, Italy, Poland and China.
On May 23, 2008, Videocon announced that it is studying an invitation from General
Electric (GE) to bid for its century-old appliances division, , which it has put up for
sale.
Today the group operates through 4 key sectors:
1. Consumer durable
2. Thomson CPT
3. CRT glass
4. Oil and gas 1
Consumer Electronics, Home Appliances & Compressor manufacturing in
India
The company enjoy a pre-eminent position in terms of sales and customer
satisfaction in many of our consumer products like Colour Televisions, Washing
Machines, Air Conditioners, Refrigerators, Microwave ovens and many other home
appliances, selling them through a Multi-Brand strategy with the largest sales and
service network in India. Refrigerator manufacturing is further supported by
inhouse compressor manufacturing technology in Bangalore.
Display industry and its components
With the Thomson acquisition Videocon has emerged as one of the largest Colour
Picture tube manufacturers in the world operating in Mexico, Italy, Poland and
China, continuing to lead through new innovative technologies like slim CPT, extra
slim CPT and High Definition 16:9 format CPT.
Colour Picture Tube Glass
Videocon is one of the largest CPT Glass manufacturers in the world with a high
level of experience and technical expertise operating through Poland and India.
Videocon will leverage on this synergy after the Thomson acquisition to internally
source glass for its CPT manufacturing increasing efficiencies and lowering costs.
Oil and Gas An important asset for the group is its Ravva oil field with one of the
lowest operating costs in the world producing 50,000 barrels of oil per day. The
group has ambitious plans for expansion in this sector globally.
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ABOUT CONSUMER ELECTRONICS INDUSTRY
1.History of consumer Electronics in India
The Electronics Industry in India took off around 1965 with an orientation towards
space and defense technologies. This was rigidly controlled and initiated by the gov-
ernment. This was followed by developments in consumer electronics mainly with
transistor radios, Black & White TV, Calculators and other audio products. Colour
Televisions soon followed. In 1982-a significant year in the history of television in
India – the government allowed thousand of Colour TV sets to be imported into the
country to coincide with the broadcast of Asian Games in New Delhi. 1985 saw the
advent of Computers and Telephone Exchanges, which were succeeded by Digital
Exchanges in 1988. The period between 1984 and 1990 was the golden period for
electronics during while the industry witnessed continuous and rapid growth.
From 1991 onwards, there was first an economic crises triggered by the Gulf War,
which was followed by political and economic uncertainties within the country.
Pressure on the electronics industry remained though growth and developments
have continued with digitalization in all sectors and more recently the trend to-
wards convergence of technologies.
In recent years the electronic industry is growing at a brisk pace. It is currently
worth $ 10 Billion but according to estimates, has the potential to reach $ 40 billion
by 2010. The largest segment is the consumer electronics segment. While is largest
export segment is the consumer electronics segment. While is largest export seg-
ment is of components.
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2. CURRENT SCENARIO
CRT-TV’ Falling as India Embraces LCDs
With Liquid Crystal Display-Television (LCD-TV) sales in India gaining momentum
quickly, 2010 will be the last year that Cathode Ray Tubes (CRTs) can lay claim as
the leading television display type in the country on a revenue basis, according to
iSuppli Corp.
“India represents one of the last strongholds for CRT-TVs, with consumers in other
major economies having transitioned the majority or nearly all of their television
purchasing to LCD display technology in recent years,” said Riddhi Patel, director of
television systems and retail services for iSuppli. “However, the allure and declining
prices of LCD-TVs, along with increased consumer awareness, have spurred sales of
the flat-panel televisions—and eroded the dominance of CRT TVs. As a result, LCD-
TV revenue in India will exceed that of CRT-TV starting in 2011. LCD-TV shipments
will catch up the year after, exceeding those of CRT TVs starting in 2012.”
CRT-TV revenue in India in 2011 will decline to $1.6 billion, down 32.3 percent $2.3
billion in 2010. In contrast, LCD-TV revenue will rise to $3.5 billion in 2011, up a
stunning 94.3 percent from $1.8 billion in 2010.
Meanwhile, CRT-TV unit shipments will decline to 9.4 million in 2012, down from
11.1 million in 2011 and from 15.7 million in 2010. At the same time, LCD TV ship-
ments will increase to 9.7 million units in 2012, up from 6.6 million in 2011 and
from 3.3 million in 2010.
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QuickTime™ and a decompressor
are needed to see this picture.
QuickTime™ and a decompressor
are needed to see this picture.
No Local Production: While demand for LCD-TVs in India will increase rapidly over
the next five years, LCD-TV growth still will not be enough to compel TV manufac-
turers to open up local production plants for LCD panels or modules in the country.
Samsung, LG and Dixon are increasing their presence in the country with final as-
sembly plants, but unless demand in India increases significantly, localized LCD-TV
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production does not appear to be feasible, especially as Korean and Chinese LCD-TV
OEMs prefer to manufacture their products in their own plants.
Assembly plants, on the other hand, are catching up in the country, with key players
either already possessing facilities or announcing plans to invest in final-assembly
plants in India. The Indian government is also involved by reducing customs duties
on important LCD panels.
Retail Expansion: While localized plants may not be a reality in the near future, the
increasing demand for LCD-TVs is putting increased pressure on retailers in India to
launch exclusive durable-only retail outlets. Meanwhile, several players in the mar-
ket—such as LG Display, Samsung Electronics Co. Ltd., Whirlpool Corp. and India-
based Videocon—are busy forming relationships with retailers and other large-for-
mat retail chains in order to develop the appropriate sales channels to accommo-
date incoming demand for LCD-TVs.
QuickTime™ and a decompressor
are needed to see this picture.
Source: DisplaySearch India TV Market: TV’s Emerging Land of Opportunity
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The consumer durables market in India is valued at US $ 4.5 billions currently. In
2008, microwave ovens and air conditioners registered a growth of about 25%.
Frost- free refrigerators have registered significant growth as many urban families
are replacing their old refrigerators. . Washing machines, which have always seen
poor growth, have seen reasonable growth in 2006. More and more Indians are now
buying electrical appliances due to change in electricity scenario. The penetration
level of color televisions (CTVs) is expected to increase 3 times by 2008.
On the brick of rapid economic growth, India has witnessed the dynamic change in
country's consumer electronics industry. In last few years the industry has been wit-
nessing significant changes in retail boom, growing disposable income and availabil-
ity of easy finance schemes. One electronic gadget that has brought new revolution
in Indian Electronic Industry is Television Set. Today, India is fast emerging as the
key driver in the global television market both as a manufacturer and consumer. In
recent years, the market for televisions in India has changed rapidly from the con-
ventional CRT technology to Flat Panel Display Televisions (FPTV).
Currently, the split between CRT and FPTV is around 97% and 3% respectively. In
addition to this, one of the most striking changes sweeping across the colour televi-
sion market in Indian market is the exponential growth of the flat panel television
(FPTV) market, in common parlance called the liquid crystal display (LCD) and
plasma televisions. Moreover, as per recent research data available, the global mar-
ket for FPTV is expected to grow from 51 million units in 2006 to 127 million by
2009.
Looking at the present scenario, over the last couple of years, the LCD prices have
even dropped by around 30 per cent annually. Some of the important factors that
boasted this growth also include the increasing awareness of the advantages of LCD
televisions, the growing availability of the product across dealer counters and the Fi-
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nance schemes in the market. Besides this, as a manufacturing hub, the television
industry is improving more and more. There are many domestic and MNC compa-
nies that have increased their production bases in the country. Easy availability of
low- cost skilled labor and the emergence of SEZs, which are tax-free zones are some
of the key factors that have resulted in growth of these manufacturing units. In fact,
encouraged by tax-breaks, new manufacturing units are coming up in less-devel-
oped regions now.
Today, India is one of the few emerging countries to have an excellent component
supply base in terms of manufacturing facilities for glass and color picture tubes, so
it helps it a good choice for all those companies who are looking to take benefit of
this emerging market.
In present scenario top player for colour television are
• LG
• VIDEOCON
• SAMSUNG
• SONY
• ONIDA
• PHILLIPS
LG ELECTRONICS
LG Electronics rightly understood the consumer motivations to create magnetic
products, price them strategically, position them sharply and keep making the mag-
netism more potent. Having understood the finer differences in consumer motiva-
tions, it opted for sharp- arrow ‘reasons-to-buy’ differentiation over the ‘blanket-all
approach’ taken by most of the other players. It is an aggressive marketer. It focuses
on low and medium price products.
SAMSUNG
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Initially the strategy of Samsung in India was to create premium image by emphasis-
ing global brand. After facing stiff competition from another Korean major- LG, Sam-
sung also started playing price game. In 2004 it reverted back to its premium posi-
tioning, although it resulted in some loss of market share. In line with the Global
Digital Initiative of the Parent Company, Samsung India is seeking to acquire digital
leadership in India by introducing its digital ready televisions like the 40" LCD Pro-
jection TV, 43" Projection TV and the Plano series of Flat Colour televisions.
ONIDA
Its popular devil ad although had engendered a strong emotional pull towards the
brand, technologically it represented no advancement. The company plugged the
gap by touting its digital technology. Like Videocon, it has also been able to hold its
market share. The world-class quality of Onida has enabled the company to make a
breakthrough on the export front. It has technical tie- up with the Japan Victor Com-
pany, better known as JVC. So focused is Onida on positioning itself on the premium,
high- tech plank that it is even planning to push its own envelope on obsolescence,
much. The strategy is aimed at further broad basing the product offering of the com-
pany, which has largely dominated the top-end of the television market, across mul-
tiple market segments.
VIDEOCON
Videocon has always been a price player and has an image of a low price brand. This
entails providing more features at a given price vis-à-vis competitors. It has taken
over multinational brands to cater to unserved segments, like Sansui- to flank the
flagship brand Videocon in the low to mid priced segment, essentially to fight
against brands like BPL, Philips, Onida and taken over Akai- tail end brand for
brands like Aiwa.
Videocon is one of the largest manufacturers of television and its components in In-
dia and thus has advantages of economies of scale and low cost due to indigeniza-
tion. It has the widest distribution network in India with more than 5000 dealers in
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the major cities. It also has a strong base in the semi-urban and rural markets. Due
to its multi-brand strategy, it has at present multiple brands at the same price point.
This has led to a state of diffused positioning for its brands. It has also led to a canni-
balization of sales among these brands. The flagship brand Videocon has lost market
share due to the presence of Sansui in the same segment. Because of reduction in
import duties on CPT the cost advantage of Videocon is also on the decline. Hence it
is facing rough weather and also trying to boost exports.
PRODUCT LIFE CYCLE (PLC) OF CRT TV IN INDIA
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The PLC for television has a “SCALLOPED PATTERN”
Introduction Stage (1982 – 1983) – The CRT TV was introduced.
Growth Stage (1984 to 1986)-The industry was at the nascent stage where the
Black & White Television was pre-dominant. The sale of CRT TV increased.
Maturity Stage (1986 to 1989)
The industry went into the maturity stage with lot of domestic competition coming
in the market.
Decline Stage (1989-1991)
Penetration levels into rural India were at low levels. Urban segment purely
dominated CRT TV market while there was a huge untapped market.
Re-introduction Stage: Entry of MNC’s Introduction1992 to 1994. The MNC’s
entered into India resulting in a greater degree of penetration. They brought lot of
products having a lot of features.
Growth (1995 to 1999) - The CRT TV Market grew at a very fast rate. The demand
for CRT TV s increased Manifold with aggressive marketing techniques, resulting in
increased penetration and cut throat competition between domestic players and
MNC’s. The growing demand for flat CRT TVs was propelled by the declining price
differentials between FCTV and CCTV segments.
Maturity Stage (2000 to 2002-03) - The market of FCTV and CCTV were
consolidating. After 2002-03- Cycle Continues the Product Life Cycle has been going
through a lot of Stages where before the decline of the product, a newer version has
been launched in the market and the PLC has gone through the phases again. These
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innovations include LCD, Plasma in the past. Now HDTV has also been launched and
that has led to a rising PLC.
Decline Stage (2003- onwards): CRT TV manufacturing declining due to new
technology up-dation. Companies are lunching new products like LED TV, LCD TV,
DTH TV, that is main cause of declining of CRT TV market.
Porter’s Model
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Suppliers(Supplier Power)
Potential entrants(Threat of
Entry)
IndustryCompetetitors
(Segment rivalry)
Substitutes(Threat of
substitutes)
Buyers(Buyer Power)
In order to understand the industry better, we analyze the industry using Porter’s
Five Force Model-
- Threat to entry
- Rivalry of among existing firms
- Bargaining power of buyers
- Bargaining Power of Suppliers
- Threat of Substitutes
Threat to Entry-
- Entering the CRT TV market isn’t very easy. One of the most important features
needed is a good distribution system which isn’t something that can be developed
overnight and technology up-dation in CRT TVs.
- Also a television today is a style statement. Therefore the brand plays an important
role in influencing the purchase decision. For a new company then entering this
market, not having a recognized brand name is a threat to entry.
Rivalry among existing firms-
- There is strong competition among the current players. The main players being LG,
Samsung, Onida, Videocon, Philips, Sansui. Some of the regional players are Hyundai
and Haier are new entrants in the CRT TV space in addition to a number of small
regional players.
- This increased competition has ensured that advertising costs are an integral part
of the players’ total cost. A lack of product differentiation means that price is a
competitive feature that intensifies rivalry. The highest price reductions during
2002-03 to 2005-06 were in the 20inch and 21inch CRT TV category.
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- With the future being in LCDs, this market is likely to see price reductions future.
- It is expected that realizations will fall with increased competition.
Bargaining Power of Buyers-
- The TV market today is a consumer’s market where the consumer has the upper
hand with him having the power of choosing from a variety if brands.
- This bargaining power of the buyer has forced the players to offer credit facilities
on sale, to provide lower EMIs and excellent after-sales service.
- The intense dealer competition also benefits the consumer in terms of prices and
offers available.
- Inventory carrying costs for television companies are high. This is a boon for the
consumers as it translates into higher bargaining power for the consume
Threat of Substitutes-
- For a television, the substitute can only be a functional substitute. The functional
use of a television is to watch programs, live events etc. This today can also be done
on a computer.
- Theaters too can be a substitute to watching movies at home.
- Today with various multiplexes and theaters providing screenings of live events
such as sports telecasts etc along with the luxury of good food and the opportunity
to enjoy the event with a number of other enthusiasts, the TV can be substituted if
the TV is bought only to watch certain events.
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- However if the television on considered to be a style statement and a lifestyle
statement, then consumers will seek to keep upgrading the type and the model of
their television sets.
Bargaining Power of Suppliers-
- PCBs (Printed Circuit Boards) & CRTs (Cathode Ray Tube) are key raw materials in
the production of CTVs.
- CRT accounts for 46-48 per cent of the total raw material costs of a CTV. PCBs and
housing components account for 33-39 per cent of total raw material costs.
- Domestic CPTs prices tend to follow Global price trends. Therefore the suppliers
do not have much of bargaining power in this regard.
-Cabinets are sourced from plastic manufacturers and as these manufacturers
supply to different industries, they therefore do have a bargaining power, especially
in comparison to CRT suppliers.
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VIDEOCON'S STRATEGIES
Multi-brand strategy
Videocon International was the first Indian company to adopt the strategy of multi-
brands. Apart from its mid-priced brand Videocon, the company now hawks
Toshiba, a premium brand, and the low-priced brands Akai and Sansui. The multi
branding technology paid off as Videocon managed to hold on to a combined market
share of around 19.6 percent, with LG at 25.9 percent and Samsung at around 13.8
percent.
Overall, the shift in the power to trade is probably one of the defining developments.
It is important since the TV companies themselves have taken it seriously and
embarked on crafting longer-term strategies to accommodate this development. The
effectiveness of their strategy and the responses of the other players promise to
deliver a few more years of enterprising developments in the Indian TV market.
Backward Integration
Videocon integrated backwards by getting into manufacture of components such as
electron guns, metal parts and deflection yokes for TVs and compressors, and
electric motors and plastic components for households appliances such as washing
machines, refrigerators and Air conditioners. The group integrated further to get in
to manufacture of glass panels and funnels, the key components for the manufacture
of color picture tubes.
“Videocon enjoys a unique synergy in the global CTV business from glass to CRT
(Cathode Ray tubes) to CTVs. - (From Sand to CTV). Together with other
components for households appliances. This high degree of backward integration
bestows upon the company a unique benefit over competition.
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Videocon's revenue mix
Performance Measures
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SEGMENTATION, TARGETING & POSITIONING (STP)
SEGMENTATION:
Market segmentation is the process in marketing of dividing a market into distinct
subsets (segments) that behave in the same way or have similar needs. Because
each segment is fairly homogeneous in their needs and attitudes, they are likely to
respond similarly to a given marketing strategy. They are likely to have similar
feelings and ideas about a marketing mix comprised of a given product or service,
sold at a given price, distributed in a certain way and promoted in a certain way.
The process of segmentation is distinct from targeting (choosing which segments to
address) and positioning (designing an appropriate marketing mix for each
segment). The overall intent is to identify groups of similar customers and potential
customers; to prioritize the groups to address; to understand their behavior; and to
respond with appropriate marketing strategies that satisfy the different preferences
of each chosen segment.19
Segments based on Income
Plasma: Income group of more than 50,000
LCD: Income bracket of Rs 20,000 and above
Slim: Consumer in the income bracket of Rs 9000-15000
Flat: Consumer in the income bracket of 7000-12000
Conventional: income bracket of Rs 3000-6000
Segments based on social class
Plasma: rich class
LCD: upper middle class and rich class
Slim: middle class
Flat: middle and lower middle class
Conventional: lower economic class.
Benefit Segmentation:
Conventional, Flat screen Slim, LCD, and Plasma can also segmented on the basis of
benefits that an end consumer would receive from them.
User Status:
TV market can be classified into non users of TV and potential users in term of
graduating to a higher segment like slim, LCD,Plasma from basic conventional TV
Loyalty status: On the basis of Loyalty status
Hardcore Loyal: brand loyal to Videocon for a long time in terms of purchasing
products of Videocon
Shifting Loyal: who shift loyalty from other brands to another
Switchers: not loyal to any brands so attract them to Videocon and convert they
brand loyal.
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TARGETING:
Once the firm has identified its marketing-segment opportunities, it has to decide
how many and which ones to target. Marketers are increasingly combining several
variables in an effort to identify smaller, better-defined target groups.
The decisions involved in targeting strategy include:
* Which segments to target?
* How many products to offer
* Which products to offer in which segments
In premium segments like flat screens and FDPs the growth in sales has been many
times the industry growth. More importantly, high end product sales are no longer
restricted to metros. Consumer in tier-2 cities seems to be as evolved in lifestyle
needs. The consumer profile, too, has changed. Higher disposable incomes, greater
aspirations and younger demographic have increased demands for the technologies.
And Videocon is targeting this segment.
POSITIONING
Positioning has come to mean the process by which marketers try to create an
image or identity in the minds of their target market for its product, brand, or
organization. It is the 'relative competitive comparison' their product occupies in a
given market as perceived by the target market.
Once the competitive frame of reference for positioning has been fixed by defining
the customer target market and nature of competition, marketers can define the
appropriate points-of-difference and points-of parity associations.
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Points of Parity (POPs) are associations that are not necessarily unique to the brand
but may infact be shared with other brands. They represent necessary-but not
necessarily sufficient-conditions for brand choice.
Videocon's Points-of-Parity are good quality Picture and good sound.
Points-of-Difference (PODs) are attributes or benefits consumers strongly associates
with a brand, positively evaluate, and believe that they could not find to the same
extent with a competitive brand.
Videocon's POD is the quality product with low cost.
With the strong backward integration Videocon can provide the products with low
cost.
Thus, Videocon is positioned itself as a reliable and value-for-money product.
4P’s
The 4Ps includes the Product, Price, Place and promotion.
Product Mix
Product mix is the set of all product and items a particular seller offers for sale.
Product mix consists of various product lines.
The width of a product mix refers to how many different product lines the company
carries. The Videocon television has product mix width of five lines. I.e. plasma, LCD,
Slim, flat and Conventional.
The length of a product mix refers to the total number of items in the mix.
I.e. for the line of LCD the length is 2 as it has two items 50” PDP and 42” PDP.
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The depth of the product mix refers to how many variants are offered of each
product in the line.i.e. For LCD the depth will be 2. As Videocon is offering only one
product in 50” PDP and 42” PDP.
The three product-mix dimensions permit the company to expand its business in
three ways.
It can add new product lines, thus widening its product mix.
It can lengthen each product lines.
It can add more product variants to each product and deepen its product mix.
Width, Length & Depth
Width = 5 (Plasma, LCD, Slim, Flat, Conventional)
Plasma LCD Slim Flat Conventional
50”PDP 42” LCD 29” slim 29” flat 21” FFST
42”PDP 32” LCD 21” slim 21” flat 20” conv
26” LCD 15” flat 14” conv
20” LCD
19” LCD
In the product mix of Videocon, it is having 37 different models, which gives them
their product line Depth.
PLASMA
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Plasma television technology is similar to the technology used in a fluorescent light
bulb. The display itself consists of cells. Within each cell two glass panels are
separated by a narrow gap in which neon-xenon gas is injected and sealed in plasma
form during the manufacturing process.
The main advantage of Plasma over CRT technology is that, by utilizing a sealed cell
with charged plasma for each pixel, the need for a scanning electron beam in
eliminated, which, in turn, eliminates the need for a large Cathode Ray Tube to
produce video images. This is why traditional televisions are shaped more like
boxes and Plasma televisions are thin and flat.
Advantages of Plasma Television:
Largest Screen Formats.
Superior Contrasts.
Versatile.
Capable Of Displaying Full HDTV & Dtv Signal.
Capable Of Displaying Xga, Svga & Vga Pc Signal.
Wide Viewing Angle.
Wide Rage Of Richer Color Over 16 Million.
Superb Realistic Images.
Less Expensive Than Lcds.
Life More Than 30,000 Hours.
Wide Screen Aspect Ratio around 16:9.
Perfect Flat Screen.
Uniform Screen Brightness.
Slim & Space Saving Design.
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50" PDP
Integra 50
10000:1 Contrast Ratio
3:2 & 2:2 Pull Down
HDMI Compatible
3-D Video Noise Reduction
PC Input
42" PDP
16.77 Million Color
10000:1 Contrast Ratio
3.2 & 2:2 Pull Down
1500cd/m2 Brightness
HDMI Compatible
3-D Video Noise Reduction
LCD
The flab’s are out and now technology has switched over to sleek and slim products,
LCD being the prominent amongst them. LCD technology is the recent breakthrough
in consumer electronics and because of its esteemed advantages this segment is
growing day by day.
Videocon are launching this range under the sub brand “Integra”. “INTEGRA” term
indicates the integration of various systems connectivity with LCDTV.
This is an integration of best sound quality and excellent picture quality.
What is TFT-LCD?
Meaning of this term is Thin Film Transistor–Liquid Crystal Display. TFT technology
used in this category offers the best image quality in flat panels. This technology is
also called as Active Matrix Technology.
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40" LCD
32" LCD
26" LCD
20" LCD
19" LCD
Slim
With Continuous Research & Development Videocon brings a revolutionary
advancement in physics & brings new Slim & Trim Television.
The Most significant feature of the Slim & Trim Television is its one kind of super
slim picture tube technology. This has enables us to make the TV 42% Slimmer.
Slim Picture tube is a product with reduced depth providing the TV and monitor
producers with opportunity to design Slim, flat and stylish TVs comparable to
plasma or LCD panels maintaining Good picture Quality
29" SLIM
21" SLIM
Flat
Videocon Bada Woofer with
Surrounds Bass Technology
Bass Amplification by Dynamic Alignment (BADA) woofer is a revolutionary
technology that offers a new sound to create an unbelievable sound space
Videocon unique Bazoomba Woofer Technology
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Videocon's superior Bazoomba Woofer Technology incorporates a unique conjugate
arrangement of Woofer motors that ensures rich bass reproduction.
The Bazoomba Woofer Technology
Enables the generation of the lowest bass frequencies from a small enclosure
(Bazoomba tube). Enables cleaner and tighter bass reproduction due to acoustic
cancellation of distortion in the even harmonics
29" TFT
21" TFT
15" TFT
Conventional TV
21" FFST
20" CONV
14" CONV
Pricing
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The pricing of the Videocon’s various models is as following.
Plasma TV: Rs. 59,990 - 2, 40,000
LCD TV: Rs. 28,400 – 89,900
Slim TV : Rs. 10,400 – 18,900
Flat TV : Rs. 5,500 – 18,400
Conventional TV : Rs. 4,600 - 9,500
Place
Videocon has its presence all throughout India.
They have their presence in 25 states and each state has at least 2 divisions per
state. In total they are having 78 divisions.Videocon has around 1800 dealers in
India. They are having 96 service centers across India.
Promotional Activities
Focusing on LCD, Plasma and 29” Flat TVs since 2006.
By institutional selling. Company used both TVC as well as print media for
promotion. The company is using outdoor media promotions in hording and bus
shelters to high light the feature packed advantages.
Major tie ups in the background IIT alumni/ Videocon Santos ham film awards 2006
with ZEE and ICC Cricket champions trophy.
Seasonal offers
Trip to Germany during FIFA world cup
Videocon bonanza offer ( har din diwali) during diwali
Chance to win car, motor bike and LCD TV's.
Brand ambassador
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Shahrukh Khan
M S Dhoni
Total spending of 80 crores in 2006 on advertisements.( 35 crores for CTV)
Sponsorship
Videocon is inspired heavily by the uplifting values perpetuated by sports. Its ability
to draw people together irrespective of differences in race, gender, religion and
country. Unity of spirit and purpose is ultimately what builds bridges between
diverse cultures. This is the core belief of a group that today has operations spread
over a cross-cultural milieu worldwide. Also, at the heart of sports is fair play, a
virtue which enjoys exalted status among values cherished by Videocon.
The group has been deeply involved in supporting sports. Its sponsorship of
cricketing events across the globe underlies its commitment and passion for sports
as well as its goal to connect with a global audience.
It is a matter of pride that Videocon's Audio Visual products entertain enthusiasts
and fans passionate about watching sports worldwide.
A breakdown of the statement above reveals a ‘means and end’ approach, where the
end is articulated at the beginning with the means linked to it.
Their famous tag line
“One of the only companies in the world to convert sand to TV”
Competitor’s strategies
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Differentiation Strategy adopted by other players:
LEADER-LG
Product localization is a key strategy used by LG.
* LG came out with Hindi and regional language menus on its TV.
* Introduced the low-priced “Cineplex” and “Sampoorna” range for the rural
markets.
* LG was the first brand to introduce gaming in CRT TVs. In continuation of its
association with cricket, LG introduced the cricket game in CRT TVs.
CHALLENGERS- SAMSUNG
Samsung considers ‘After Sales Service’ as a key differentiator for Samsung
products. In order to deliver prompt and easily accessible service, Samsung
India has set up a widespread network of company owned as well as Authorized
Service Centers to service its customers. The Samsung Service Plazas, as the
Company owned Service Centers are called, are a first in the industry.
FOLLOWERS- ONIDA AND PHILIPS
Onida
Onida’s differentiation strategy is based on its brand based advertising rather than
feature based advertising. They used its brand mascot ‘The Onida Devil’ and its
punch line “Neighbor’s Envy Owner’s Pride” to create Brand awareness of their
product.
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Where its competitors were focusing on advertising of the features of their
products, Onida has concentrated only on their Brand. The ‘Devil’ helped Onida gain
substantial market share and brand recall among the customers.
Philips
Philips Differentiation Strategy is their “Simplicity Led Design”. Philips believes in
the unity of form and function. Their technology is easy to use. In Philips’s world,
they are trying to improve the consumer’s life.
Philips is known for its consumer insight and empathy. Therefore, their
differentiation strategy includes making technology simple to use.
NICHER-SONY
Sony is focusing on providing quality products to its customers and differentiating
itself from the other players.
The positioning strategy adopted by other players:
Leader-LG
It is positioned as a premium brand that pioneers the most innovative technologies
in India.
Challengers - Samsung
Samsung has positioned itself as a brand that brings communication, entertainment
and information in easy to use digital device.
Nicher- Sony
Sony Positioned as a premium product giving the best quality to cater to the
demands of its high end customers.
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Recommendations (Strategies)
Product Strategy
1. Stop all curved CRT PT production
2. Shift focus to LCD CTVs; target: by December 2007.
3. Launch Slim 21” and focus Slim 29” immediately. Target is to have almost all
CRTs production shifted to Slim by 2007
4. Take full advantage of Digital and HDTV revolution, gain leadership in HDTV
Slim TV segment through OEM and model mix worldwide strategy.
5. Study unique product range / pro large to fill market gaps in markets such as
Asia and Eastern Europe / CIS / South America
6. Focus on reduction of costs through reduction of glass, shift to AK mask and
reduction of process rejection.
Sales Strategy
1. Improve relationship with existing clients ; Use of Thomson’s excellent
relations as preferred supplier to maximize sales
2. Improve service and quality without putting pressure on price structure
3. Fetch a better price and avoid crisis of huge stock.
4. Leverage Slim product offering
5. Launch LCD panels assembly to be a major actor of the Flat Panel Displays
market (which is expected to account for 50% of the market by 2012).
6. Benefit from OEM CTV business with the help of Videocon’s CTV division,
invest for new models, introduction of new technologies.
7. upgrade to LCD's schemes
easy EMI.
Re. 1 offer.
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8. Improve after sales service
9. Free service camp on the wheels.
Industrial Strategy
1. Consider improvement in production lines set-up: investments, line speed up
/ mergers? Target is to increase output and decrease product costs by
increasing productivity of existing lines
2. This will reduce manpower and overheads per picture tube by 30% that will
be redeployed on new activities in the sites (new technologies)
3. Improve the furnace output in the Poland Glass factory by making some
changes into furnaces including electrical boosting. Consider increasing
capacity through one more furnace.
4. t is envisaged that 100m€ will be invested in the next 2 years for this
purpose
5. Expand into LCD panels back-end assembly (from buying LCD arrays from
big suppliers like LG, SDI, CMO, AUO, Sharp)
Cost Strategy
1. Leverage the strong base of Videocon’s glass business: Thomson-Videocon
partnership will have a very strong negotiation position and can reduce
impact of glass pricing volatility
2. Reduce production cost by upgrading and improving the production lines.
Thomson-Videocon partnership will have its own base of additional 4 million
units CTV (other than India)
3. Necessary to rationalize R & D efforts, necessary to make its cost below 1.5%
of sales
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Product Development
1. i-TV – web enabled TV at the price of 13,900 with exchange offer for an older
version.
2. TVs With hard disk to store programs.
3. Wall mounted Flat CTVs at the price of 12,990.
4. Aimed at fulfilling needs of customer who can not buy LCDs but prefer to do
away with CTV models which occupy space in living rooms.
5. CTVs with inbuilt set top box
6. Tie up with DTH player and provide annual subscription offer.
7. to provide Direct to home services.
8. Bluetooth enabled CTV.
New Product Line
Introduce CCTVs as it has the demand in several areas like restaurants, airport,
railways stations,banks, hospitals, shopping malls, company offices.
“A lifestyle statement”
People do not see the television as a mere electronic device providing sight & sound.
It has now become an entertainment experience and a lifestyle statement that
people are willing to pay for. Since consumers are ready to shell out money for a
lavish entertainment experience, there is today no limit to the number facilities that
a television can envision of offering. From in built recording to internet facilities to
supreme sound etc. The opportunity for this industry lies in coming up with new
features to the conventional CTV. There is therefore lot of scope for growth and
innovation.
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