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marketing strategiies of videocon, presented by anil saini ,gaurav mahajan, amandeep singh .sanchit jainJIMS KALAKAJI

TRANSCRIPT

AnilSaini GauravMahajan Amande e p Singh Sanc hitJ ain

Experience change

indexIntro duc tio nto vide o c o n Whe re Are We No w? Whe re We WantT Be ? o Ho wWillWe Ge tThe re ? Co nc lusio n

AN INTRODUCTION

VIDEOCONATAGLANCE Videocon .at a glanceFounder:LateNandlalMadhvalDhoot Videocon is an Indian multinational company with VideoconisanIndianmultinationalcompanywithinterestsin interests in Consumer Electronics, Home ConsumerElectronics,HomeAppliances,andColourPicture Appliances , and Colour Picture Tube Glass. TubeGlass. In 1987, it used to manufacture TV and Washing In1987,itusedtomanufactureTVandWashingMachine. Machine. In 1989-90, Videocon started manufacturing Home In198990,VideoconstartedmanufacturingHome Entertainment Systems,Electric Motors & EntertainmentSystems,ElectricMotors&AC. AC. Videocon entered Refrigerators and coolerssegment in VideoconenteredRefrigeratorsandcoolerssegmentin1991. 1991. In1995,VideoconstartedmanufacturingGlass In 1995, Videocon started manufacturing Glass shellsforCRTshells for CRT Founder : Late Nandlal Madhval Dhoot

CONTD CONTDIn 1996 it ventured into Kitchen appliances . In 1998, Videocon started manufacturing In1996itventuredintoKitchenappliances. Compressors & Compressor Motors. In1998,VideoconstartedmanufacturingCompressors& In the year 2000, Videocon tookover Philips Color TV Plant. CompressorMotors. 2005, Videocon tookover 3 plants of In Intheyear2000,VideocontookoverPhilipsColorTV Electrolux India and acquired Thomson CPT. Plant. Today, it has evolved into a giant conglomerate with annual revenues of over In2005,Videocontookover3plantsofElectroluxIndia U$4.1 billion. andacquiredThomsonCPT.

Today,ithasevolvedintoagiantconglomeratewith annualrevenuesofoverU$4.1billion

SSTEP 1

WHERE ARE WE NOW ?

CONSUMERDURABLES MARKET5% 3% 6% 13% 1% 2% 22% 2% 12% LG Samsung Videocon Group Mirc Group BPL Sony Phillps Panasonic Sharp 15% 19% Thomsan Others

Television

VideoconhasagoodfootholdintheCCTV segment.

WASHINGMACHINE

Videoconhasagoodstrengthinwashing machinesector

REFRIGRATORS

Videoconneedstocapturealargeareaorsegment inrefrigratorsector

STRATEGIC BUSINESS UNIT An SBU in a strategic management sense, is an entire division in large corporations that carries out certain business. This approach entails the creation of SBU to address each market in which company is operating.

Videocon is operating in following products.

Consumer Electronics Televisions VCD players Mobile Phones Audio Systems LCDs , LEDs

Home Appliances Refrigerators Washing Machines Microwave Ovens Air Conditioners

Factors affecting company marketing strategy

External factors

CONTEXTPESTANALYSIS

Political Factors

Labour unions effects a lot the production Resolution to reduce emission of carbon footprints in the atmosphere Anti-dumping duty on imported color picture tubes.

P

EST Analysis

Economic Factors

Growth of retail sector expected to reach 16% by 2011-12 from 4% in FY07 Availability of finance. High investments are needed in the consumer durables. Economic reforms by the government higher purchasing power Emergence of organized retail market with large players like Croma, next, reliance digital etc leading to lower prices and higher varieties61

% of total urban income comes from

households earning between US$ 1,493 and US$ 9,955 a year.

PE

ST Analysis

Social Factors

Disposable Income roughly doubled since 1985. Changing perception of luxury to necessity. In rural areas there is poor infrastructural facilities like availability of electricity. Demand of the consumer durables is seasonal and cyclic. Highly growing consumer durable market.

Porters Five Force ModelRivalryandcompetition:High Powerofsuppliers:moderatetolow

eatfromnewentrants:moderate Force

Porters Five

Threatfromsubstituteproducts/service

Hightomoderate;dependsontheproduc

Powerofbuyers:high

PES

T Analysis

Technological Factors

Improved electricity consumption. Higher quality products. Technological is changing at a very fast rate.

MICROANALYSISvThreat to Entry Entering market isnt very easy. One of the most important features needed is a good distribution system which isnt something that can be developed overnight.

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.v Rivalryamongexistingfirms Thereisstrongcompetitionamongthecurrentplayers.Themain playersareLG,Samsung,Onida,Videocon,Philips,Sansui. Thisincreasedcompetitionhasensuredthatadvertisingcostsarean integralpartoftheplayerstotalcost. Itisexpectedthatrealizationswillfallwithincreasedcompetition.

CONTD..vBargainingPowerofBuyersv TheTVmarkettodayisaconsumersmarketwherethe consumerhastheupperhandwithhimhavingthepowerof choosingfromavarietyifbrands. Thisbargainingpowerofthebuyerhasforcedtheplayerstooffer creditfacilitiesonsale,toprovidelowerEMIsandexcellentafter salesservice. Theintensedealercompetitionalsobenefitstheconsumerin termsofpricesandoffersavailable.

vThreatofSubstitutes Foratelevision,thesubstitutecanonlybeafunctionalsubstitute. Thefunctionaluseofatelevisionistowatchprograms,liveevents etc.Thistodaycanalsobedoneonacomputer. Theaterstoocanbeasubstitutetowatchingmoviesathome.

ContdvDeterminant of supplier power

Cost of switching supplier. Presence of substitute input. Importance of volume to supplier.

Swot analysisStrengths

Weakness

Backward integration. Diversified goods portfolio across Consumer Durables Sector. Multi brand strategy. Global company.

Image of low to medium cost company . Diversification into too many sectors. Not much international recognition. Too much rebranding/ changing of positioning. Weak sales and service network.

Opportunities

Threats

India is big consumer durables market and growing at 10 to 15 Stiff competition from MNCs like LG, Samsung, SONY. Cheaply available of chinese products. %. Lifestyle of people has been change very much so there is Virtually not able to establish the products for online sales and demand for premium products. marketing. consumer durable market will become $158 billion by 2015. Local brands available in the market. Overall number of rural households estimated to grow from 135 million in 2001-02 to 153 million in 2009-10

STEP2

Where we wants to be?

BCGMATRIXMARKETGROWTH RATE

HIGH

?LCD,LEDs

LOW

RELATIVEMARKETSHARE

SEGMENTATION1)GeographicSegmentation Inthecolderregionssalesoftherefrigeratorsismuch lessthanthecolderregionssogeographicconditions playaveryvitalroleinproductsegmentation.Similarly otherproductsareinfluencedbytheclimaticconditions, differentlocationsandregions. 2)Demographicsegmentation Thispartofsegmentationisdoneonthebasisofage .gender,income,familysizeincome,etc..ForegtheSale ofLCDsandLEDsdependuponincomeofthecustomer andalsosaleofAirConditionersalsodependuponthe purchasingpowerofthecustomer.

CONTD3)BehavioralSegmentation Ittotallydependsupontheusagerateofthecustomer andtheloyaltyofthecustomertowardsthecompany.For examplewashingmachinesshowsthebestexamplefor theconsumerloyaltytowardsthevideocon. 4)PsychographicSegmentation Inthissegmentluxuriousgoods,personalityand lifestyleofthecustomereffectstotally Goodslikeairconditionersandplasmapanels,home theatersaresegmented.

TARGETINGPeoplewithdisposableincome Lowincomemasses. Youth Women&seniorcitizens InpremiumsegmentslikeTelevisionsandAirConditionersthe growthinsaleshasbeenmanytimestheindustrygrowth.More importantly,highendproductsalesarenolongerrestrictedto metros.Consumerintier2citiesseemstobeasevolvedin lifestyleneeds.Theconsumerprofile,too,haschanged.Higher disposableincomes,greateraspirationsandyounger demographichaveincreaseddemandsforthetechnologies.And Videoconistargetingthesesegment.

POSITIONINGOncethecompetitiveframeofreferenceforpositioninghasbeenfixedby definingthecustomertargetmarketandnatureofcompetition, marketerscandefinetheappropriatepointsofdifferenceandpointsof parityassociations. PointsofParity(POPs)areassociationsthatarenotnecessarilyunique tothebrandbutmayinfactbesharedwithotherbrands.Theyrepresent necessarybutnotnecessarilysufficientconditionsforbrandchoice. Videocon'sPointsofParityaregoodqualityPictureandgoodsound. PointsofDifference(PODs)areattributesorbenefitsconsumers stronglyassociateswithabrand,positivelyevaluate,andbelievethat theycouldnotfindtothesameextentwithacompetitivebrand. Videocon'sPODisthequalityproductwithlowcost. WiththestrongbackwardintegrationVideoconcanprovidetheproducts withlowcost. Thus,Videoconispositioneditselfasareliableandvaluefor moneyproduct.

Tows matrixStrengths. Diversified goods portfolio. Multi brand strategy. Opportunities. SO analysis Market growing Provide customized very fast. products according Lifestyle changes to preferences of are creating demand consumers. for premium Threats. ST analysis products. Stiff competition Use its brand basket from MNCs. effectively to Local brands compete with availability. competitors. Weakness. Weak brand image. Not much. international recognition. WO analysis Improve the brand image to capture the market. SW analysis More expenditure on advertisement and customer relationship management is

HOWWEWILL GET THERE?

MarketingmixPrice Process Promotion

Physicalevidence

7ps

People

Product

Place

1. ProductConsumer electronics LCDs LEDs CTVs DVDs and Home theatre Home appliances Washin