project report on videocon
TRANSCRIPT
Table of ContentsS.No. TOPICS PAGE No.
1
1.1
1.2
Introduction
>Overview
>Objective
2
2 Company Profile
History
Customers, Corporate and Videocon
Ambitions and Technology
Success Stories
Visionary Videocon
Landmarks
3
3 Product of the Company 8
4 Industry Analysis 12
5 Methodology 18
6 Analysis and Findings 19
7 Recommendations & Suggestions 26
8 Bibliography 26
Page 1 of 26
INTRODUCTION1.1 OVERVIEWVideocon Industries Ltd. was one of the initials company that made it to the World.
Videocon Electricals captured the initial Indian Electrical market and topped the charts for
its products such as Refrigerators, television etc. before other players such as
Samsung,Whirlpool etc .entered Indian market. Videcon was one of the first Electronic
Company to Collaborate with Japanese Toshiba Ltd as early as 1985.
1.2 OBJECTIVEVideocon is a company hard to pass by as it was one of the few Indian Companies to be
listed in Fortune 500 beside being initial Indian MNC. With its wide range of electrical
product range I choose the one that has kept the Indian cools in enthralling summers
Refrigerators. The Hot and Humid weather of the country had made many Korean and
Americans countries to walk into Indian market earlier captured by Indian Electronics Giant
Videocon. The effect on Videocon and its strategy thus become my area and/or object of
study,
Page 2 of 26
COMPANY PROFILE
HISTORYA Man of ideas. A man of substance. A man of vision, Shri Nandlal Madhavlal Dhoot, the
founder of the Videocon group, completed his education in Ahmednagar, Pune and in
Maharashtra, India. A successful sugarcane and cotton grower, he boldly ventured forth and
imported machinery from Europe, setting up the Gangapur Sakhar Karkhana (Sugar Mill) in
1955, at a time when the village had no electricity, thereby unleashing an industrial
revolution.
The die was cast. Over the years, Nandlalji's pioneering spirit found expression in a myriad
ways, earning him the well-deserved reputation of the doyen of industrial activity in
Marathwada, India.
In early 80s, Nandlalji initiated his three sons - Venugopal, Rajkumar and Pradeep into the
business. Through a technical tie-up with Toshiba Corporation of Japan, he launched India's
first world -class Colour Television: Videocon.
Today, Videocon is a household name across the nation - India's No.1 brand of Consumer
Electronics and Home Appliances, trusted by over 50 million people to improve their
quality of life.
Customer, Corporate and Videocon
Corporate Overview
The Videocon Group is committed to create a better quality of life for people and furthering
the interests of society, by being a responsible corporate citizen.
Creating Happiness
We will bring happiness into every home, offering high quality consumer durables at
affordable prices, spreading the culture of convenience, entertainment and comfort, far and
wide.
Achieving Progress
We will pursue innovative technologies in the fields of Electronics and Energy, create
products and services that will improve the quality of life, realize the goals of the world
community and protect the environment.
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Sustaining Growth
We will be a source of pride to our business associates by ensuring mutual prosperity and
growth through the implementation of forward-looking corporate strategies, aimed at
identifying opportunities and responding intelligently to the dynamics of change.
Pursuing Excellence
We will provide a conducive environment for enabling our employees to develop their
potential and make a significant contribution to the Group's success.
In 1985, through a technical tie-up with Toshiba Corporation of Japan, Videocon
International Limited launched India's first world class Color Television. Today, Videocon
International Ltd., the flagship company of the Videocon Group, is India's leading
manufacturer of Consumer Electronic products. Fired by a passion for innovation, Videocon
has kept pace with the changing face of technology, constantly upgrading its
manufacturing facil ities to incorporate advanced technology and high
standards of quality into its product range, right across the spectrum.
AMBITIONS and TECHNOLOGIES
Technology with a Heart
Committed to giving the consumer the best the world has to offer, Videocon
has developed near zero wastage technology which helps reduce
manufacturing costs by optimizing material inputs. Coupled with quality-
consciousness at every stage, the consumer benefits enormously by getting
premium products at affordable prices.
The company currently manufactures Colour TVs, Black & White TVs and
Audio products. At its modern plant at Chitegaon and Aurangabad, the
Company has also undertaken complete backward integration to manufacture
all cri tical and important components of i ts products, such as Electronic
Tuners, FBTs, ATDMs and Deflection Yokes, thereby reducing costs,
ensuring quality control and becoming vertically integrated. It has set up a
unit at Gandhinagar in Gujarat for manufacturing Black & White TV picture
Tubes.
The Sound of Excellence
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Videocon produces a sophisticated range of Home Audio Systems, Stereo
Radio, Recorders and Personal Stereos, as well as the contemporary
international range of Kenwood Digital Hi Fi Systems.
First with the Best
Continuous upgradation and indigenous manufacturing has been and
continues to be an integral part of the company's philosophy. Perceived as
an innovator in its field, Videocon has notched up many exciting firsts, by
exploring the world's most advanced technologies. In Colour TVs, Videocon
was the first Indian Company to introduce Picture-In-Picture, Turbo Sound,
Surround Sound, Larger Screen Sizes, the Full Flat Square Tube, Bazooka
technology and the Freedom series : affordable high quality range of Colour
TVs for the price-conscious consumer.
Global Ambition
Looking beyond India, Videocon is now a global player, acknowledged by
the world. It is the first Indian company to win the prestigious CE approval
for exporting its Colour TV to Europe. Videocon is now entering world
market with i ts operations in the Middle East, Europe, Indonesia and South
Africa.
Videocon Narmada Glass (VNG): a division of Videocon International Ltd.,
has the distinction of having set up India's first plant for the manufacture of
Glass Shells for Color Television Picture Tubes, in technical collaboration
with Techneglas Inc., USA (formerly known as OI-NEG TV Products Inc.,
USA), world leader in Glass Shell Technology.
The projects in 1990, when the then Prime Minister of India, the late Shri
Rajiv Gandhi, laid the foundation stone for the project.
The Videocon Group, with the objective of backward integration, joined
hands with Gujarat Narmada Valley Ferti lizers Co. Ltd., (GNFC) for the
implementation of this 100% import substitution project, the largest
investment (Rs. 450 crores) in electronic component industry in the country.
The plant, with an installed annual capacity of 1.7 mill ion Glass Shells for
Color Picture Tubes and 0.25 million glass Bulbs for Black & white Picture.
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SUCCESS STORIESThe Heights of Success
VNG has some remarkable achievements to its credit, starting with the successful
absorption of sophisticated technology from Techneglas Inc., USA. The CTV Glass Shells
manufactured by VNG are at par with international standards and the Color Picture Tubes
made with VNG glass have already received VDE approval. The facilities include a state-
of-the-art Tool Room and Mould Shop to manufacture and maintain its mould requirements.
Having initially successfully established its 20V, 19V and 13V CTV glass parts, VNG has
now developed the 20V 2R the latest models.
A Picture Perfect Future
Till 1994, Indian manufacturers of CTV Picture Tubes were importing Glass Shells. VNG's
production has replaced these imports, thereby saving almost Rs.200 crores of precious
foreign exchange every year.
VNG has now surpassed the norms of performance guaranteed by the collaborator,
Techneglas Inc., U.S.A. and is operating the plant with 150% capacity utilization - with
efficiencies exceeding international standards. Where fields of sugarcane grow tall and
proud. Where bushes of cotton bud blooms. Where tourists flock to the world-famous caves
of Ajanta and Ellora.
Where India's NO.1 Consumer Electronics and Home Appliances take shape, to take
millions of Indians into a better, brighter future.
This is Marathwada, India, where the Dhoot family launched Videocon International
Limited in 1984, with the avowed purpose of producing world-class Colour Television
through a technical tie-up with Toshiba Corporation of Japan. Within a decade, Videocon
emerged as India's leading brand of both Colour and Black & White Televisions and
continues to dominate this highly competitive market.
The leader innovates. The leader forges ahead. The leader breaks new ground. Harnessing
the advanced technology, relentlessly pursuing quality to achieve various international
standards of Quality Control. Breaking through, time and again, with innovative products
for a better life.
Page 6 of 26
VISIONARY VIDEOCONProfiles of Leadership
Futuristic Neuro Fuzzy Logic Washing Machines, User-friendly - No-Frost Refrigerators,
the very latest music systems. The most sophisticated Colour Television and VCRs. High-
Tech Air-conditioners. Videocon today, is a multi-faceted group, with 9 state -of-the-art
manufacturing facilities all over India. Highly qualified engineers, trained in Japan, backed
by 6500 technical and support staff, work together in close unison to produce India's leading
branch of consumer electronic products and home appliances.
Leadership through People
Videocon lays great emphasis on the training and development of its work force, providing
every opportunity for growth and advancement, including training stints overseas.
LANDMARKS
FROM ELECTRONICS TO ENERGYThe Heart of Nation
1995 was a landmark year for Videocon. It clearly reaffirmed its leadership in Color TVs,
Black & White TVs, VCRs and VCPs, Washing Machines as well as No-Frost
Refrigerators. Then Videocon began to reach out to the core. To industries at the heart of a
nation: Petroleum, Power, Construction and Housing. Leading India into the future, with
Confidence, with determination, with a commitment to excellence, rooted in the pioneering
vision of a path breaker.
Page 7 of 26
PRODUCT OF THE COMPANY
REFRIGERATORSBaseline: Bring home the leader
Headline: Over Cool. Under Cool. Perfect Cool.
Subhead: The only refrigerator that adjusts the temperature to ensure perfect cooling.
Bodycopy: The Videocon frost-free refrigerator with the breakthrough Sensi-flow
technology. The perfect cooling system that keeps food fresh and nutritious by ensuring
continuous circulation of cool air through the many vents inside. What's more, the
refrigerator also has the sensi-control system. An intelligent device that senses even the
slightest rise in temperature; when you place a hot dish inside the refrigerator, with that the
air vents open and the rush of cool air inside brings the temperature down to the required
level. That's science at work for you, ensuring you and your family eats fresh food and stays
healthy.
Page 8 of 26
Baseline: Bring home the leader
AGENCY: Quadran
Product Range:
Consumer Electronics
Videocon brings to you the best of
products from their Consumer Electronics
stable which includes Plasma TV,
Projection TV, Color TV, Internet TV and
loads of other masterpieces and therefore
we offer you Technology for Health and
Pleasure.
Home Appliances
Videocon has ushered in a revolution
making waves in mill ions of homes by
virtue of its entire range of state-of-art
Home Appliances.
Page 9 of 26
PRODUCTS OF VIDEOCON
Refrigerator Home
Direct Cool
Frost free
Water matic
Washing Machine Home
Air Conditioner Home
Microwave Home
RNV271 Back
DIGITAL SENSI FLOW
DURAFRESH
PLATINUM
DEODORISER
GREEN HOUSE
CRISPER
SIX YEARS
WARRANTY
RNV275
DIGITAL SENSI FLOW
DURAFRESH PLATINUM DEODORIZER
GREEN HOUSE
STYLISH EURO HANDLE
6 YEARS WARRANTY
Page 10 of 26
RNR312
SENSI FLOW SYSTEM
DURAFRESH PLATINUM DEODORIZER
GREEN HOUSE CRISPER
RECESSED HANDLE
6 YEARS WARRANTY
RNV312
SENSI FLOW SYSTEM
DURAFRESH PLATINUM DEODORIZER
GREEN HOUSE CRISPER
VERTICAL HANDLE
6 YEARS WARRANTY
D380MF
No Frost Multi Flow System
Antibiotic Deodorizer
New Edge Door design
New Style Vertical Handle
6 Years Warranty
Page 11 of 26
INDUSTRY ANALYSIS (REFRIGERATOR INDUSTRY IN INDIA)
INTENSITY OF RIVALRY AMONG THE EXISTING COMPETITORS.
The companies in the Refrigerator industry of India can be divided into four strategic
groups based on the price and the perceived quality of the products. These groups also differ
in their target segments and the strategies adopted to cater to it.
High Price Medium Price Low Price
High
Perceived
Quality
1.PREMIUM
STRATEGY
(1)LG, Samsung,
2. HIGH VALUE
STRATEGY
(2) Whirlpool, BPL
3.SUPER VALUE
STRATEGY
Moderate
Perceived
Quality
4.OVER CHARGE
STRATEGY
5. MEDIUM VALUE
STRATEGY
(3) Godrej
6.GOOD VALUE
STRATEGY
(4) Videocon
Low
Perceived
Quality
7.RIP OFF
STRATEGY
8.FALSE ECONOMY
STRATEGY
9.ECONOMY
STRATEGY
5) Voltas
1. LG, Samsung: This strategic group includes the South Korean MNCs. These are the
players who are operating only in the frost-free segment and carry a large product length.
They have products only in the above 300 Ltrs segment. These brands follow the Premium
strategy of high quality at high price. They are targeting to the upper income as well as the
higher middle class of the society with the products that are associated with status. These
companies have shown a tremendous growth in few years.
2. BPL, Whirlpool: BPL, the market leader in the Frost-free segment and Whirlpool of
India, the subsidiary company of the US giant Whirlpool form this group. They have frost-
free models in the below 300 Ltrs capacity segments as well as the above 300 Ltrs segment.
The models in above 300 Ltrs segment cater to the replacement market and to the higher
middle class. These aim at providing high quality at a moderate price.
The models in the below 300 Ltrs are targeted at the first time buyers of middle class and
are not high in price.
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3. Godrej: These are the old brands of India, which have high brand awareness and
presence in urban as well as the rural Markets. These are mainly serving to the Direct cool
segment and have few models in the frost-free segment. These brands are catering to the
middle class and are not very high in prices.
4. Videocon: This is the company, which introduced Frost-free refrigerators in India. The
products are value for money products. With the lowest prices in the market it is catering to
the middle class of the society.
5. Voltas: These companies cater to the middle and lower middle class of buyers with their
low priced ranges.
The companies in the market witness a tough competition from the other members of its
strategic group as they fight for the same chunk of the market. As their products do not
differ much in the features, they try to differentiate their brands through copy differentiation
in advertising.
The competition intensifies as most of the companies are using the same dealer network to
distribute their products. They lure the dealers to promote their product by different
strategies on margins, incentives and credit and payment terms.
The competition increases as all the companies have high Strategic stakes in the
Refrigerator Business. A major fraction of their revenues come from this business and so
they retaliate sharply to any move of the competitor.
The industry has high Exit Barriers for the members who have invested in the
manufacturing facilities in India in the form of specialized assets.
3. PRESSURE FROM THE SUBSTITUTES
The domestic refrigerators have no substitutes and so it faces no threats in terms of that.
4. BARGAINING POWER OF THE BUYERS
The bargaining power of the consumers is high due to the presence of many competitive
products in the market.
The refrigerator models available are not much differentiated in terms of the features, and
so the buyers can switch between the different brands based on other criteria like Price,
service, warranty, promotion and financing schemes.
5. BARGAINING POWER OF THE SUPPLIERS.
Not very High
Page 13 of 26
DISTRIBUTION CHANNELS IN THE INDUSTRYThe Refrigerator companies in the industry use different distribution channels to reach the
customer. These are as follows:
1. In this type of channel the company uses its sales representatives to deal with the
dealers directly. The dealers place the order through the sales representatives who visit them
periodically, and the products are delivered directly from the company.
Some companies appoint Direct Dealers who act as their Franchisee Outlets or their
Exclusive showrooms.
BPL uses this channel
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2. In this channel of distribution the company appoints distributors on the basis of District/
Population /No of Dealers to be handled by one distributor. The area of operation and its
potential is also taken into consideration.
Some of the companies make the distributor totally responsible from appointing the dealers
to providing after sales service.
Godrej use this channel
3. In this channel of distribution the company appoints Distributors as well as Direct
Dealers. The company appoints distributors to deal with small dealers who order small
quantities. With the dealers who have good potential and sales the company deals directly.
Videocon and Samsung use this channel: The Korean Multinational follow this channel
where they appoint Distributors for upcountry towns and direct dealers for big cities and
major towns eg. Ahmedabad.
4. In this channel the company appoints a C&F agent who acts on behalf of the company.
The C&F agent is totally responsible for appointment of Distributors and Direct Dealers. He
sells to both the Distributors and the Direct Dealers at the same rates.
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Strategic group mapping of industry players:
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Page 17 of 26
METHODOLOGY
The methodology followed by the me, during the preparation of the report was collection of
data thorough SECONDARY SOURCES
When an investigator uses the data that has been already collected by others, is called
secondary data. The secondary data could be collected from Journals, Reports, and various
publications. The advantages of the secondary data can be –It is economical, both in terms
of money and time spent .The student of the report also did the same and collected
secondary data from various internet sites like www.Google.co.in and www.yahoo.com and
many more. The researcher of the report also visited various libraries for collection of the
introduction part.
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ANALYSIS And FINDINGS
COMPARISON WITH OTHER COMPANIES
REFRIGERATOR INDUSTRY AT A GLANCE
Refrigerators are being manufactured in India for the last four decades.
Till early nineties only direct cool refrigerators were used in India.
Videocon introduced frost-free refrigerators in 1991.
In 2005-06 the market was as follows:
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Segment Price % Market Share
Direct Cooling Low 85%
Frost Free 35-40% more than DC 15%
00.20.40.60.8
1
Price % Mkt.Share
DirectCooling
Direct CoolingFrost Free
Based on the Capacity and price the market was divided as follows in 2005-06
Segment Price Capacity % Share
Top >20000 >300 Ltrs 3%
High 15-20000 >230 Ltrs 7%
Medium Upto 15000 165-230 Ltrs 85%
Low <8-9000 Upto 90 Ltrs 5%
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In 2005-06 the penetration levels were approx. 9%
In 2005-06 the demand distribution as per the Income class was as follows:
Income Class Penetration %
Low 0.7%
Lower Middle 5.3%
Middle 19.8%
Upper Middle 43.5%
High 59.9%
Total 8.61%
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In 2005-06 the demand distribution as per markets was as follows:
Urban Rural Total
Penetration % 25.23 2.04 8.61
Share of Purchase% 75.7 24.3 100
Past trends Demand for refrigerators grew from 11,000 units in 1968-69 to about 2.25 million
units in 1996-97
Demand for refrigerators has grown at a CAGR of around 22% from 1.04 mn units
in 1992-93 to 2.18 mn units in 1997-98.
The total stock went up from 3.3 million units in 1968-69 to 17.2 million units in
1996-97, but still covering only about half of the total households in middle and high-
income groups.
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Current Scenario
The current demand for refrigerators is approx. 2.9 mn units per annum.
The 165-200 Ltrs of refrigerators comprise of 80% of the total demand.
Frost Free refrigerators contribute 15% of the total demand with 5% coming from
the premium range.
The market structure is as follows:
Segment Share(%)
North 25%
East 14%
West 32%
South 29%
Rural 25%
Urban 75%
Household 85%
Institutional 15%
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The replacement demand is about 20% of the total demand and shows preference for
larger and technically advanced models.
Demand for the frost-free refrigerator is increasing rapidly.
Feature based differentiation and various price points for same capacity emerge in
the top and high categories. Some of the features, individually or together are used for
differentiation.
No and type of doors.
Crushed ice and water dispenser
Quick chilling zones
Multiple temperature zones
Adjustable racks and shelves
Multiple use compartments
Refrigerant – CFC free Vs CFC
Energy efficient compressor
Freezer space vis a vis Refrigeration space
Future Trends Replacement market is expected to increase to 25-30% on account of faster replacement
(further induced by exchange scheme).
Refrigerator market is expected to grow at a CAGR of 14% in the medium term aided by
the rising per capita income and growing consumerism.
The demand for refrigerators is expected to be about 3.6 million units in 2005-06 with a
penetration rate of about 13%
As specified by the Montreal Protocol the use of refrigerants such as CFC-11 and CFC-12
need to be phased out by 2010.
*************************************************
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Balance sheet
Dec ' 10 Sep ' 09 Sep ' 08 Sep ' 07 Sep ' 06
Sources of funds
Owner's fundEquity share capital 301.95 229.41 229.30 220.95 220.84Share application money - 95.00 - - -Preference share capital 46.01 46.01 46.01 46.01 46.01Reserves & surplus 9,085.92 6,929.63 6,538.49 5,357.91 3,847.63
Loan funds
Secured loans 5,937.61 6,735.04 4,401.25 3,343.50 3,608.39Unsecured loans 5,836.16 2,349.51 3,604.34 1,916.14 1,352.80Total 21,207.64 16,384.59 14,819.39 10,884.50 9,075.67
Uses of funds
Fixed assetsGross block 9,536.60 9,004.95 8,947.78 8,083.16 7,127.93Less : revaluation reserve - - - 53.52 924.57Less : accumulated depreciation 4,804.07 4,298.83 4,310.63 3,376.67 2,847.09Net block 4,732.53 4,706.12 4,637.15 4,652.98 3,356.27Capital work-in-progress 1,270.58 1,314.15 1,289.52 612.98 608.28Investments 4,267.96 3,064.90 2,695.59 2,092.50 1,781.17
Net current assets
Current assets, loans & advances 12,643.27 8,820.90 7,641.68 5,142.49 4,425.46Less : current liabilities & provisions 1,706.69 1,521.48 1,444.55 1,616.44 1,095.51Total net current assets 10,936.57 7,299.42 6,197.13 3,526.05 3,329.96Miscellaneous expenses not written - - - - -Total 21,207.64 16,384.59 14,819.39 10,884.50 9,075.67
Notes:
Book value of unquoted investments 4,217.13 3,056.96 2,524.79 1,906.24 1,618.68Market value of quoted investments 62.59 10.83 214.72 230.38 94.13Contingent liabilities 191.47 122.93 178.17 112.59 81.65Number of equity sharesoutstanding (Lacs) 3019.64 2294.07 2294.51 2210.94 2209.86
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RECOMMENDATIONS AND SUGGESTIONS
Freezer should be small
No crystal, grill shelf should be there
No MRP is written. So MRP should be written
Date of manufacturing is not written
Model change should be there constantly
Double door refrigerator should be provided.
In today’s world of competition, the company should pay more attention towards:
Best sales service
Displays
In festivals we do promotions
0% finance
Exchange offer
High incentives
0% interest
Carry back scheme
BIBLIOGRAPHY
Philip Kotler for Marketing Management
NIS Study Material for Marketing Management
NIS Study Material for Marketing Research
www.videocon.com
www.yahoo.com
www.google.co.in
www.aol.in
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