A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

CERTIFIC A T E
This is to Certify that MR. ABC has been under my guidance on the final project. The title of the project was A STUDY ON CTV

INDUSTRY:INDIAN COMPANIES VIS--VIS MNCs, as per curriculum and

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

has submitted satisfactory report on the same as a pre-requisite for the award of Two Year Full Time Course of Post #anagement $P !"#% raduate !iploma in "usiness !" Mana# $ nt %

from Ishan Institut

T &hn!'!#() N * D 'hi) s ssi!n +,,--,..

MR. /. Y. 0.......................... 1PRO2ECT 3UIDE4

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

ACK N O W L E D G M E N T
& ta'e the opportunity to e(press my gratitude to all of them who in some or the other way helped me to accomplish this project. )o amount of written e(pressions would be sufficient to show my deepest sense of gratitude to them. First of all & am than'ful to #r. *he'har +ggarwal $,(ecuti-e ,ngineer, C-!.T, &&T, /anpur%, who was a source of continuous guidance and inspiration to me in my association with him & e(perienced not only his astonishing 'nowledge but also his a affection towards me. & am grateful to #r. !. /. arg $Chairman - &.&.#.T.% whose -aluable

suggestions helped me in preparing the report. 0ast but not least & am grateful to all of them who ha-e helped me directly or indirectly during the course of my project.

ABC

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

INTR O D U C T I O N
Tele-ision is one of the most popular and common means of entertainment for an a-erage &ndian family. +ccording to #ichael 1. +pter., 2Tele-ision is the most powerful medium of mass communication

which has e-er e(isted and it has re-olutioni3ed our li-es in many ways.4 The impro-ement in standards of li-ing and the growth in consumable income has caused the spirit in the demand of consumer durable products. &n fact the increase in purchasing power and inclination to purchase has made lu(uries of yesteryears the necessities of today. The electronics industry has been ma'ing rapid strides since the 56s and the main impetus has been pro-ided by growth of the consumer electronics segment. The phenomenal e(pansion of broadcasting facilities in the earlier plan periods and the special emphasis on the de-elopment of the T7 networ' in the eighties ha-e been major triggering factors.

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

&n the union "udget 899:-9; , the electronics &nd. was projected as &nd. with potential of becoming a world class &nd. contributing to our e(port efforts and to employment generation. There was a world wide recession in consumer electronics &ndustry. &ndian "<w and CT7 industry was also facing a recession which is mainly due to continuous increase in e(cise duties coupled with de-aluation of rupee. This has led to increase in prices. =owe-er, due to pro-isions in 899: budget and 899;-9> . "udget and reform policies of Finance #inister li'e - con-ertibility of rupee, reduction in custom duties and some relief in e(cise ? corporate ta( reforms will help to ma'e &ndian products internationally competiti-e. The last one year has been fairly e-entful for the colour tele-ision $CT7% industry. The mar'et grew by o-er :> per cent. The foreign brands spent the year learning the ropes in the &ndian mar'et. The &ndian brands spent it in building their @mar'etingA defences. #ar'et segmentation, product proliferation, networ' strengthening, appointment of e(clusi-e showrooms, bac'ward integration and high profile ad-ertising and sales promotions, the last year saw it all. The mar'et si3e at the end of the year was estimated at 8.5> million units with the top four brands ta'ing up o-er B6 per cent of the pie. "P0 and

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

7ideocon, both claiming the top spot in the mar'et, had mar'et shares of about CD per cent each, .nida and about 8B per cent and Philips about 8: per cent. The C84 segment which saw the entry of most of the global brands grew by ;6-;> per cent and accounts for about ;6 per cent of the mar'et. The 8;4 segment with an 8B per cent share grew at the mar'et growth rate while the C64 segment with a :> per cent share grew at C6-C> per cent. The C84 segment comprising the F*T and FF*T -ariations is e(pected to account for roughly half the mar'et during 899D-95. #ost brands are mo-ing from F*T models to the FF*T segment which is e(panding faster. Product upgradation during the year saw most brands coming, auto tuning and remote control as standard features. The premium segment is coming with =yper-band across models. The 8;4 segment is being fought on price and most brands ha-e launched models at below the Es. 86,666 barrier. #ost of the major players are also e(pected to focus on consumer financing schemes to help e(pand the mar'et. Philips has been steadily climbing the mar'et share ladder and has made an estimated three per cent gain during the year. .n ad-ertising

strategy it has focussed on the premium segment especially on the C94 models. Philips has parallely concentrated on the dealer push angle by

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

increasing its e(penditure on trade schemes. The distribution networ' was also strengthened all o-er with special gains being made in Punjab where it entered the -ery strong Te(la T7 networ'. Fith its product range, networ' and ad-ertising strategy in place Philips during 899D-95 will probably concentrate on its pricing strategy at the lower end of the mar'et. &t will be loo'ing for a -olume sale of C.>-: la'h units. 7ideocon during the last year has -ery successfully segmented the mar'et into three distinct segments and has positioned its products in each of these segments. +t the top end it has built on its brand image through the "a3oo'a with an emphasis on the bass output of the system. The middle emphasis segment loo'ing for a more durable product was offered the Turbo Tough line and the cost conscious bottom end of the mar'et was offered the "udgetline series. =owe-er there is a growing feeling in the mar'et that most of 7ideoconAs -olumes may be coming from the "udgetline series where its margins cannot be -ery high. 7ideocon has been trying to bring its mar'et outstanding and to streamline its credit and trade policies. +n attempt has also been made at streamlining the distribution setup. !uring the year "P0 increased its

product range from 86 models to 8: models with the addition of the /)E,

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

"GE and !1E models.

&t launched the FGE model to flan'

other

competiti-e models in the mar'et. &t focussed on the C>4 segment. Following the success of its earlier e(periment of sub branding the C84 FF*T-4The ,mperor4, the sub branding e(ercise was e(tended to the premium end with 2Teio4 $meaning ,mperor<,mpress in 1apanese%. The distribution networ' was further strengthen and "P0 alleries and

,(clusi-e showrooms were opened all o-er the country. The emphasis in these showrooms is to display the entire range of consumer durable offered by "P0. "P0 is e(pected to further widen its product range and continue with its high profile ad-ertising campaign. .nida, the brand with the premium image in the mar'et, focussed on the C>4 segment during the year. 0i'e Philips and "P0, it carried out sales promotion acti-ities during the Cric'et Forld Cup. .nida is finding it

increasingly difficult to hold on to its mar'et share figures, &t has squee3ed credit and through a mi( of schemes tried to get money from the mar'et. &t reacted to the entry of the big foreign brands by getting a more global perspecti-e on its ad-ertising campaign. &ts ad-ertising campaign is

e(pected to continue to help it retain its premium image in the mar'et.

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

Int 5nati!na' 65an7s For most of the international brands, last year was a year of learning. Panasonic which launched at a premium price and with strict credit control to dealers has since come down on its price and gone up on its credit period. +'ai continues to maintain its price premium but has announced one customer scheme after another. =ence the mar'et operating prices bear no relation to the official retail price. +'ai is operating with a -ery limited range of products and also a -ery limited distribution networ'. &t has ta'en the hoarding route to popularise its brand name. 0i'e Panasonic and +'ai, *ony too has come in with a limited range and is currently operating with a -ery limited networ' . &t has disco-ered that the price premium at which it can operate is far lower than what was e(pected at the time of its launch. *ony too is offering dealer oriented

schemes and is now e(pected to lay equal emphasis on the dealer push angle. +d-ertising at this stage focussing on picture clarity. Hnli'e the abo-e brands $which entered in the C84 segment% *amsung has entered the mar'et with a range of C64 F ? F*T tele-isions. &t has also come out with a T7-cum 7CE unit priced -ery competiti-ely. .f all the international brands *amsung appears to mean business and has gone about its launches and operations in an e(tremely systematic manner. 0i'e

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

+'ai, *amsung too has ta'en the route of hoardings to popularise its brand name in the metros. +d-ertising lays emphasis on flatness of its screen and picture clarity. The mar'et it e(pected to continue growing at :>-;6 per cent and should stand at C.; million units in 899D-95. The mar'et shares battle is bound to start in right earnest and it the beginning of the year is any indication sales promotions will be the order of the day. ,(change schemes, free gifts, price off and other incenti-es will increase their product range on offer and try to tone up the distribution networ'. +ll Players are e(pected to wor' on their production capacities in terms of utilisation and e(pansion. The domestic players are e(pected to gi-e serious consideration to the e(port mar'et.

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

CTV IND U S T R Y - A BIR D S EYE VIE W

+s in most durables categories the growth in the T7 industry was marginal last year at less than one per cent by -olume and about three per cent by -alue. +bout 8B la'h units -alue at Es. C,966 crores are estimated to ha-e been sold during the year. The mar'et shares of major players $according to industry sources % were as followsI Ma8!5 P'a( 5s *ith th i5 sha5 s Company "P0 7ideocon .nida Philips +'ai *amsung *ony *harp Panasonic *hare $Percentage% C9 CD 88 88 > ; : : :

Fhile the mar'et leader "P0 increased its -olume of sales, 7ideocon, .nida and Philips saw a decline during the year.

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

There has been an a-erage price reduction of three per cent on T7s for the consumer following the reduction of e(cise duties from C6 percent to 8B percent and customs duties on colour picture tubes from :> per cent to :6 per cent in the 8995-9B Central budget. &n the C94 segment howe-er prices ha-e come down substantially from an a-erage of Es. ;C,666 to Es. :;,666. The effect of this price reduction on -olumes is still awaited. Si9 *is t5 n7s There has been distinct shift 'in consumer preferences from C64 to C84 sets. &n 899>-9D the C64 sets accounted for ;; per cent of sales but their share came down to about :9 per cent in 899D-95. The share of C84 went up from ;6 per cent to ;C per cent. Fhile the C84 J segment has not grown as e(pected, the 8;4 segment has by about two per cent o-er last year. Chan#in# $a5: t sha5 s "P0 was the only big &ndian brand to gain -olumes and mar'et shares during last year. The company aimed at impro-ing its brand equity through a high profile brand campaign. !uring the year it launched a )&C+# *tereo Eange - FKE, "KE and )KE a high end of 8;4 model /*E. &t increased share in the C>4 segment to o-er >6 per cent. &t has underta'en e(tensi-e mar'et e(ploratory efforts for contemporary technology products li'e &nternet

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

T7, :! T7 and wide screen T7s which were displayed in e(hibitions across the country and are due for launch this year. 7ideocon saw -olumes declining by about fi-e per cent during the year. &t launched the 2Challenger4 *eries in C64 and C84 si3es. 7ideocon e(tended its mar'er segment strategy with the launch of Toshiba series at the top end. Fith 7ideoconA -alue for money brand image this strategy should help it gain numbers at the top end where a number of #)C brands ha-e registered their presence. The .nida brand of #irc ,lectronics registered the largest decline in -olume last year. + combination of internal factors was responsible for

constrained supplies during the year as well as e(tremely subdued media presence between +pril and )o-ember 899D. =owe-er, it impro-ed it

-isibility after !ecember and un increased its presence in the C>4 segment. Man( n * $!7 's Philips lost -olumes marginally. The company increased its -isibility last year with its high profile *achin Tendul'ar ad-ertisement across audio and 7ideo categories. &t introduced new model in the C84 category and also upgraded features in the e(isting range.

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

+mong the foreign entrants, *amsung , the *outh /orean consumer electronics giant, has established its presence in the )orth with a 86 per cent mar'et share. &ts factory at ).&!+ near !elhi is e(pected to come online shortly. *amsung has planned a phased launch across the country, but from initial reports it seems unable to duplicate its success in the )orth in other parts of the county. +mongst the new brands +/+& o 1apan has toted up the highest mar'et share with a combination of inno-ati-e consumer promotions. &ts offers ha-e ranged from 2,(change *chemes4 to free washing machines and free T7. =owe-er, concentration of the promotion campaigns in select cities has limited +/+&As networ'. The brand is also unli'ely to cloc' in numbers without the schemes with which it has become so closely associated. +nother late entrant *ony of 1apan has strengthened its product range through the introduction of 8;4 and a C>4 model. The company almost doubled its sales last year while increasing its presence at the top end of the mar'et. Out'!!: "!5 +,,;-,. +s for the current yearAs outloo', the year should see a continuing shift towards C84 and C>4 segments. The C94 segment will definitely become

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

an area of increased acti-ity for most brands. The fight for mar'et shares is bound to get intense with aggressi-e efforts e(pected from three /orean brands - *amsung, 0 and !aewoo.

*maller &ndian brands with localised presence and strengths will get marginalised by #)C brands fighting for shares in regional poc'ets, #)C brands li'e Thomson, rundig and *hi-a'i are e(pected to maintain their

presence in select mar'ets. ,stimates of mar'et growth range from low 86 per cent to abo-e C6 per cent though accelerated growth rates are e(pected only in the second half of the year.

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

SHIFT IN FOCU S -A MAJOR TRA N S I T I O N

The tele-ision industry has gone through patch for the last two years. !omestic manufacturers had large capacities but the demand was just not enough. Then there were the new entrants li'e Thomson, !aewoo and

oldstar to increase the supply. +nd +'ai, the dar' horse, threatened to change the way a consumer purchases a tele-ision. + media blit3'rieg with attracti-e e(change schemes and freebies ha-e gi-en +'ai mar'et share of 86.9 per cent between 1anuary 8995 and )o-ember 8995 against C.B per cent in pre-ious corresponding period. +nd -olumes at +'ai continue to increase. This is turn has resulted in similar schemes being offered by other tele-ision manufacturers li'e Crown and e-en Philips. manufacturers ta'e on +'ai L The smart in-estor find out. !emand in the tele-ision industry is price sensiti-e and the demand pattern in the country has been highly -olatile. +ccording to / * Eaman, president of Consumer ,lectronics #anufacturers +ssociations $C,T#+%, if a company through its dealer drops the price of a tele-ision e-en by Es.C66, it will effect -olumes significantly. &n 8995, the tele-ision industry recorded a sluggish 8; per cent growth and .E has estimated growth of the colour =ow will other

tele-ision industry at 86.: per cent for 899B.

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

0ast year o-erturned the apple cart for most tele-ision companies and belied growth predictions of almost all the companies. Total colour tele-ision sales rose from 8.9> million to C.: million units and the blac' and white tele-isions declined for the first time after 8998 from D million units to >.D million units. +nd among companies only four did well M +'ai, "P0 and 7ideocon and the /orean multinational *amsung. The myth that the entry of #)Cs would finish &ndian Tele-ision industry was also destroyed. #ajor &ndian brands together retained 56 per cent of mar'etshare while 7ideocon and "P0 together account for ;> percent of the total mar'et share. +nother emerging pattern is the di-ersification plans of tele-ision companies as they were uncertain about relying on tele-ision alone. business

Tele-ision companies un-eiled plans to di-ersify as they ha-e

realised falling profitability o-er past year. #)Cs despite the bac'ing of their parent companies ha-e found the going tough in the first year of their &ndian operations .Famous branded tele-ision sets to enter the troubled &ndian tele-ision mar'et this year are /orean #)Cs li'e 0 , *amsung, !aewoo and *ony from 1apan .These multinationals ha-e had to scales figures for 8995-9B, their first year of operations They also had to scale down their estimated turno-er and sales

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

projections of the &ndian mar'et as a whole for the ne(t few years till the year C666. Companies li'e *ony, Fhirlpool and #atsushita $the ma'ers of the Panasonic brand % ha-e admitted to ha-e entered the &ndian white goods mar'et on the basis of inflated -iews of demand in the &ndian domestic mar'et, The scaled down mar'et e(pectations ha-e much do to with the scale down of the much hyped buying potential of the fabled &ndian middle class. .f the multinationals , *amsung was the lone company to belie its own conser-ati-e estimates of turno-er of Es ;66 crore on 8995 $they achie-ed their estimated yearly% and captured B per cent of the mar'et share by selling 856,666 colour tele-isions. &n face of e(tensi-e competition, the domestic players appear to be learning all about sur-i-al. The domestic players are to be wa'ing up to the reality of an e(tremely price sensiti-e mar'et and the newly emerged equation - that sales figures will be in-ersely proportional to the price and e-ery penny charged less will be reflected positi-ely in the balance sheet. Today the companies ha-e realised that prices of their products ha-e to be reduced through economies scale, better production processes and impro-ed after sales ser-ice . The domestic players ha-e realised the need

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

for internal cost cutting which will facilitate the sale of tele-ision sets at the lowest possible price ..n the flip side , the industry is seeing an unprecedented increase in budgetary allocations for ad-ertising . "P0 has allocated Es ;> crore this year for the purpose of ad-ertising and publicity for tele-ision . 7ideoconAs budgetary for ad-ertising is around B per cent of its gross turno-er. The other company worth trailbla3ing success this year has been "aron &nternational, success this year has been baron &nternational, mar'eting the +'ai brand of tele-isions. +'ai offers its customers tele-ision sets at e(tremely reasonable rates and has further set the trend for increased discounts to trades and retailers. These discounts along with low ma(imum retail price ha-e been a -ery difficult precedent to follow for the other companies. "ut analysts say they ha-e heard rumors alleging that +'ai may be mar'eting substandard goods and therefore their real test will be the 2after sales ser-ice4 offered by the company if complaints start pouring. Eaman says the entry of /orean brands and the e(change schemes with freebies launched by +'ai will put further pressure on the established tele-ision companies. The *outh ,ast +sian crisis has further de-alued /orean currency, which means they will be able to sell cheaper tele-ision

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

sets in &ndia. +s the domestic mar'et is price sensiti-e, &ndian companies will ha-e to follow suit and slash prices in tandem with the #)Cs. =e says, 2&f a company wants their sales figures to go up, it has to slash prices. The moot question here is how much can companies reduce them without going in red4. The depreciation of the rupee on a daily basis also spells losses for the industry where the import content is significant. Fhile a section of the industry thin's that the current de-aluation will boost e(ports, the general perception is that margins will be affected. &t is belie-ed that an immediate increase in prices may pro-e disastrous gi-en the sluggish mar'et conditions and high import costs as companies will be compelled to either absorb the burden or pass it on to consumers. The blac' and white segment of the tele-ision industry is on the brin' of e(tinction. +ditya *rinath, analyst with **/&, says, IThere has been a 8C to 8: per cent hi'e in demand for colour tele-ision in the year while the blac' and white tele-ision industry is on its death bed, being 'illed at a rate faster than e(pected4. This is a fall-out of the e(change schemes run by the colour tele-ision $CT7s% majors in the rural mar'ets. The used CT7s in wor'ing condition are dumped in the rural mar'ets at lower rates than that of a new blac' and white tele-ision set. &n a mar'et that sells a brand new

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

blac' and white set at Es.:666, an old spruced up colour tele-ision is sold at Es. C>66, thus eating into the blac' and white tele-ision mar'et. This has nearly wiped out the demand for blac' and white tele-ision sets. Thus the booming replacement mar'et will continue to displace the blac' and white tele-isions from &ndian homes. +part from domestic sales, the sole other a-enue open to blac' and white tele-ision manufacturers has been e(ports. "ut e(ports ha-e also slumped in 8995-9B. The industry has lost out to Chinese manufacturers who sell at much lower prices. &f an &ndian set costs N:B-;6, a similar

Chinese set would be a-ailable for NC;-:>. This has resulted in decreased fore( earning also. "ig blac' and white players li'e "esta-ision and

Fusebase ,ltoro ha-e shel-ed plans to enter the e(port mar'et. Thus the industry is going through a major transition manufacturers need to chase -olume in order to sur-i-e. as

The ultimate

beneficiary for the ne(t few years is ob-iously the consumer. "ut how are the domestic manufacturers doing L The only company in the industry worth in-esting in right now is "P0. #ar'et rumours are that +'ai is also planning a public issue.

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

BP< For the first half of 8995-9B, domestic leader "P0 posted an

impressi-e :6 per cent growth in sales at Es.D6D.>> crore and a :D per cent rise in net profits at Es. ::.CD crore. "P0 has managed to cut costs by tightenning its internal operations. &t has brought its wor'ing capital down form Es. :6 crore to Es. : crore annually and their in-entory is cash neutral at present. *rinath e(pects "P0 to eat into the mar'et share of 7ideocon and .nida. 0ast year, "P0 shed its premium image and began wor'ing on introducing T7 sets in the lower segment of the mar'et and began chasing -olumes. "etween 1anuary and )o-ember 8995, "P0 commands a mar'et share of 89.D per cent, with a growth of >.> per cent o-er the pre-ious corresponding period. The company sold >C:.D8D colour tele-ision -alued at Es.5>9.8: crore and ;>D.CBC million blac' and white sets -alued at Es.8:8.;B crore in 899D.95. "P0 has an equity capital of Es. CD.9: crore and the 899D-95 ,P* is Es. 8B.6C. The current mar'et price of Es. 96.> discounts the ,P* fi-e times. "P0 has also di-ersified into other businesses li'e al'aline batteries and gas tables. "P0 is the most attracti-e stoc' in the industry right now.

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

Phi'i=s Philips has gone through two bad years now as the company is e(pected to show lower profits e-en this year. For the first half of 8995, it made a net profit of only Es. 8.6B crore against Es. 5.C5 crore in 1une 899D. The se-ere liquidity crunch in the mar'et has resulted in increased interest costs for the company. The company faced higher financing costs due to high utilisation of wor'ing capital in the first half of the year, additional term borrowings and increase in the interest rates. Costs at Philips are also high and analysts say that it will ha-e to spruce itself internally. *ujay #ishra, analyst, Peregrine, says, 2These cost structure of Philips is at least four times higher than all the other industry players, and its employee costs are -ery high4. "ut he feels that as long as the company has the bac'ing of the parent, it will sur-i-e. +s a major cost cutting effort, the management has decided to shift manufacturing facilities from Calcutta to Pune in #aharashtra. This mo-e is awaiting the chief minister of Fest "engal 1yoti "asu and the companyAs future depends on this decision to an e(tent. +nother positi-e step the

company has ta'en is by appointing Ea-i /ant, a well 'nown mar'eting man in the industry and mar'et watchers e(pect him to turn the company around.

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

"etween 1anuary and )o-ember 8995, Philips mar'et share fell to B.9 per cent, with a decline of C8.: per cent o-er the pre-ious corresponding period. ,-en in -olume terms, Philips saw a decline in tele-isions from B8;,666 units in 899> to 55>,666 units in 899D. Tele-isions contribute C5.;; per cent to the total turno-er. For 899D, the ,P* was Es. 8.55 with a not profit of Es. B.65 crore. The current share price of the company is Es. D6.>6. Vi7 !&!n 7ideocon &nternational sold 9B>,566 tele-ision between 1anuary and )o-ember 8995 -alued at Es. 5BD.5 crore. .f the total turno-er, DC.;5 per cent accrues from colour tele-ision sets, assemblies and sub assemblies of colour sets. &ts mar'et share was 89.> per cent for 1anuary-)o-ember 8995, a decline of D.: per cent. This decline is not as much as that of .nida and Philips. )abi upta, director-mar'eting and sales, 7ideocon, says that the

company has a strong control on the distribution channels. =e says that the company has a strong control on the distribution channels. =e says,

27ideocon has the largest dealer networ' in the country and therefore we are better positioned to read the mar'et trends accurately and well in ad-ance4. This allows the company to preempt any ad-erse fall-outs.

7ideocon has also resorted to internal cost cutting to ensure the general

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

slowdown does not affect them. &n addition, the company has integrated manufacturing facilities and collaborations with Toshiba to generate state-ofart products at competiti-e prices. For 899D-95, the companyAs turno-er was Es. 85C;.:D crore against Es. 8D;D.BB crores in the pre-ious year. )et profit dropped from Es. BB.:D to Es. BC.8:. &ts current mar'et price is Es. C>.>>. Mi5& E' &t5!ni&s #irc ,lectronics suffered stagnant -olumes in 899D-95. &n face of competition, the company has drawn up an aggressi-e mar'eting plan for 8995-9B along with new product launches this year. .nidaAs agenda this year is -alue engineering discipline and focusing on cost reduction as a mechanism to impro-e gross margins. The brand .nida is also losing

mar'et share and for the period 1anuary-)o-ember 8995, it saw a fall of 8D.B per cent and has a mar'et share of 9.B per cent. *ales for 899D-95 declined to Es. :9D.:C crores against Es. ;CB.>8 crore. )et profit dropped from Es. C>.DD crore in 899>-9D to Es. 8>.> crore in #arch 8995. current stoc' price is Es. >;.5>. The

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

ENTR Y OF MULTI N A T I O N A L S - FACI N G NE W CHALLE N G E S

0uc'y oldstar ,lectronics &ndia P-t. 0td., &ndian subsidiary of the

/orean consumer electronics gaint started mar'eting its T7s in &ndia last month and already claims to ha-e sold more than >,666 T7 sets. 0uc'y olstar $0 % is that latest in the long list of foreign companies that ha-e in-aded the &ndian tele-ision mar'et in the last fi-e years. The comple(ion of the &ndian colour T7 mar'et has already changed. The decade-long domination of the three mar'et leaders - 7ideocon, "P0 and .nida is crumbling in the wa'e of the onslaught of the li'es of +'ai, Panasonic, *amsung, *ony, and *harp. ,-en Philips, technically a

multinational but an old &ndia brand, has seen its sales stagnate. Foreign brands last year made up for a third of the two million colour T7 sets that were sold in country, up from a small B per cent mar'et share in 899:. Ent 5 th $u'tinati!na's The slowdown is li'ely to be temporary. Fhat seems a more

permanent proposition, though, is that there will be a sha'e out and only a few players will sur-i-e. Fhile domestic players still ha-e a D> per cent mar'et share, #)Cs ha-e managed to grab an impressi-e :> per cent. Predictably, complaints about unfair competition ha-e started emanating from the domestic manufacturers.

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

!omestic CT7 manufacturers ha-e cause for concern because #)C brands ha-e been gaining mar'et share at their e(pense. =owe-er, any statistical e(ercise to determine e(act mar'et shares are fought with uncertainty. The .E -#+E retail audit does not include sales from

e(clusi-e retail outlets and are therefore underestimate. +ll mar'et share data mentioned here has been collated from manufacturers. Courses at

"P0 claimed a mar'et share of C; per cent in 899D-95, marginally behind 7ideoconAs CD per cent, which ma'es the later &ndiaAs largest selling CT7 brand. ulu #irchandani, the chairman of the .nida group of companies,

claims a mar'et share of 8> per cent in 899D-95. the top three domestic brands $7idocon, "P0 and .nida% thus accounted for D> per cent of the mar'et last year, which is a share which the three commanded in 899:-9;. +nd where the domestic majors lost, the #)Cs gained. #)Cs include both well established @oldA #)C brands li'e /alyani*harp $mar'et share > per cent% and Philips $mar'et share 86 per cent% as well as the new entrants who ha-e entered &ndia after the liberalisation process began in 8998. +mong the latter, companies li'e Panasonic $>.> per cent%, *ony $> per cent%, Thomson $; per cent% and *amsung $:.> per cent% are ma'ing their presence felt slowly, but surely. &n fact, /arwal says that by ne(t year, #)Cs will be able to garner ;6 per cent of the mar'et.

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

Ta'e, for instance, Panasonic.

*tarting off with two models of CT7s in

!ecember 899;, they e(tended the range to 88 models by *eptember 899D and plan to launch the *ophia series of two C84 models and one watch of C64, C>4 and C94 models. PanasonicAs sales ha-e risen from >>,666 sets in 899>-9D to 866,666 last year, according to information pro-ided by the company. This month, Panasonic plans to launch a C>4 twin-top-dome

modeM. *ony &ndia P-t. 0td., on its part, has brought in 86 models of CT7s ranging from 8;4 to >:4. *ony still enjoys a great brand equity in &ndia. !uring the +sian ames in 89BC, about two la'h *ony sets were sold. *ony

sold >B,666 sets during 899>-9D and 8:6,666 in 899D-95. *amsung officials are equally optimistic and hope to achie-e sales of 8>6,666 to 8B6,666 sets by the end of 8995 and ha-e targeted an ambitious mar'et share of about B per cent by ne(t year. *amsung which started selling its CT7s from

!ecember 899D, claims to ha-e sold about B6,666 sets so far. 0uc'y oldstar had initially entered &ndia with the oldstar brand in

899: through a joint -enture $17% with Te(la, a small )ew !elhi based T7 manufacturer. =owe-er, the 17 with Te(la soon bro'e up and 0 tried to

hoo'up with C./."irlaAs .rient Paper. Finally, they entered &ndia on their own again late last year. 0 hopes to achie-e a turno-er of Es.866 crore in

the first year of operations - Es.5> crore from CT7s and Es.C> crore from

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

refrigerators - and plans to sell 8.> la'h sets in the first year. &t is a realistic target since & fell the industry should grow at a compounded annual rate of C6 per cent. 0 nine years. >a&in# th Cha'' n# The &ndian companies no doubt are putting up a bra-e front, e-en claiming that the #)CAs pose much of a challenge. The #)Cs do not e-en pose a threat to us. Contrary to what people thin', they ha-e not brought in the latest technology and are only bringing in catchy phrases and gimmic's. "P0 has 89 CT7 models and plans to import larger-screen $::4 and >;4% *anyo models during this yearAs festi-al season $they ha-e a technologytransfer agreement with *anyo of 1apan dating bac' from 89B;%. "P0 which along with 7ideocon is the main contender for the mar'et leaderAs position, sold >.> la'h sets in 899D-95 and has projected CT7 sales of 9 la'h units for ne(t year. "P0As own estimates of its 899D-95 sales howe-er contrast with the .E -#+E retail audit, which pegs its sales at ;.8: la'h. +s plans to in-est NCB9 million $Es.8,6;6 crore% o-er the ne(t

mentioned pre-iously, the latter figure e(cludes sales from e(clusi-e retail outlets. The same confusion about numbers surrounds .nida. Fhile the credits

company claims to ha-e sold C.9; la'h sets in 899D-95, .E -#+E

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

it with sales of only 8.9> la'h. #irchandani predicts ;6 per cent growth in 8995-9B followed by :> per cent rate o-er the following three years. =e is also confident that #)Cs will not pose much of a challenge to the top three. 2#)Cs ta'en together now account for about C6 per cent of the total mar'et. =owe-er, the three major &ndian players together still retain 56 per cent mar'et share. The net result of #)C entry is that smaller players ha-e been marginalised further4. 7ideoconAs claims are similar. Their H*P is that they ha-e products for e-ery segment of the population. Their prices range from Es. B,996 for a 8;4 T7 to Es. C6,D96 for a top-of-the line "a3oo'a model $C84%. =owe-er, this is not a threat to the #)Cs since their -olumes in the C64 and C84 segments, which form D> per cent of the mar'et, are rapidly increasing. #ost of the new customers for CT7s will go for the #)C brands because of the -alue-added technical features they offer, due to which their -olumes and shares will increase. The domestic brands, on the other hand, will

continue to maintain their shares but not drastically increase them. .f course the term &ndian-made T7 set is a sense a misnomer. + large portion of what goes into the ma'ing a tele-ision set continues to be imported. +nd all &ndian manufacturers ha-e arrangements with foreign

companies for components. "P0 has a tie-up with *anyo, 7ideocon has an

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

arrangement with Toshiba and .nida with 17C of 1apan. +nd e-en in the case of those components that are made locally, li'e the colour picture tubes, a large portion of the raw materials continues to be imported. "ut

the import of fully assembled TC sets in the popular 8;4 to C94 category continues to be banned under the pre-ailing go-ernment policy. =ence all T7 sold in the country, e(pect the C94 and abo-e are assembled locally. "ut considering the intense pressure on the go-ernment from trade bodies li'e the FT. to open up the &ndian mar'et, it wonAt be long before fully assembled foreign T7 sets are allowed to be imported, which should create more competition for the &ndian Companies. Currently, the go-ernment announce the ban on imports of the popular models with a high duty on components. .n picture tubes alone, the import duty is in the region of D> per cent, while other components ha-e duties -arying between :6 and ;6 per cent. This combined with e(cise duty of 8B per cent and the a-erage sales ta( of 8C per cent, ha-e ensured that a C64 CT7 in &ndia costs twice as much as it does in China. spawned a thri-ing blac' mar'et. 2biggest competitor4 is *ony itself. adds, accounts for Es.8,666 crore. &t has also

*onyAs )oo'ala e(plains that their The gray mar'et for *ony alone, he

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

C,T#+ rec'ons that the CT7 mar'et would reach C.B million in 89959B and ;.; million in 8999-C666 at e(isting duty rates. =owe-er, a reduction in e(cise duty to 86 per cent and a cut in duties on picture tubes to C6 per cent would, according to C,T#+, boost CT7 sales to :.5B million in 8995-9B and D million in 8999-C666. #uch of this is e(pected to come from the multinational brands, who are already busy setting up factories. "oth

*amsung and Panasonic ha-e set up plants at )oida, outside )ew !elhi with annual capacities of ;66,666 and C66,666 units respecti-ely. 0 As

B66,666 unit capacity plant nearby is e(pected to be ready by the middle of ne(t year. *onAs C66,666 units plant is located in =aryana while *harp has ta'en o-er and e(panded the /alyani plant in Pune and the French gaint Thomson has ta'en o-er the old !ynora plant in Chennai. *ome li'e 0 are

e-en mo-ing beyond, to set up a colour picture tube factory at a cost of o-er Es. :>6 crore. <!!$in# P5i& ?a5 0uc'y oldstar, on its part, claims it belie-es in an @honest pricingA

policy. The customers will realise that they are getting -alue for money. =e adds that what is ta'ing place in the CT7 mar'et now is not a price war in the real sense, but is actually just 2bail mar'eting4. The customers, are

paying more for less insted of paying less for more, which is what should

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

happen in the case of a price war. .nce the price wars start $maybe in a couple of years%, the mar'eting strength of organisations will be tested. +nother essential aspect of the CT7 mar'et are the dealers. Fhile normally dealer margins are between 5 and B per cent, mar'et leader 7ideocon insists that one of the main reasons why it has stayed on top is because of their 2e(cellent relationship with their dealers4. The company, li'e many

others, does not belie-e in gi-ing cash incenti-es to its dealers and instead gi-es indirect incenti-es. #ost companies admit that dealers are 'ings and ha-e the power to influence the decisions customers ma'e and therefore ha-e to be constantly pampered. &ndustry sources allege that some

companies set such challenging targets for the dealers that they $the dealers% often sell the T7s at lower prices so that they can sell larger numbers. Fhat they donAt realise, say industry sources, is that while

-olumes may go up, their profitability doesnAt. Fhether the dealers are 'ings or not, one thing is beyond doubt ultimately, itAs the consumer who might just ha-e the last laugh. +s for the industry, despite the slow down last year, there is little doubt about itAs future potential. .nly se-en out of a 866 &ndian households currency own a CT7, much lower than in other emerging economies. Fhile &ndians bought less than two million CT7s last year, the Chinese bought 8D million. so while

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

demand will continue to accelerate in the coming years, the question is which are the brands that will sur-i-e the intense competition this demand is bound to engender L &n countries li'e H* and the H/, the 1apanese and the /oreans ha-e -irtually 'illed the local tele-ision industry o-er the years. That should cause some worry for the li'es of "P0, 7ideocon and .nida in a world where the pace of technological change is matched only by the rate at which the import barriers are being brought down.

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

MUST SELL STRATEGIES TO BE ONE UP THE RIVALS

Fhen Consumer ,lectronics manufacturers battle to establish a beachhead in a crowded mar'et, there are windfalls for buyers and sellers. 0i'e a music system worth Es. C6,666 that comes free with the purchase of e-ery +'ai C9-inch colour tele-ision $CT7% set prices at Es. ;;,996. or ta'e 7ideocon. The company will continue with its year-old bonus scheme and has a bonan3a lined up for its go-getter dealersI CB #ercedes, >6 .pel +stras and 866 Cielos among other cars. &t will also spend Es. ;6 crore on ta'ing them for a wee'long tour of the H* later this year. +ll this because, today, it requires more than the salesmanAs spiel to come up trumps in the tough CT7 league. *ony, Panasonic, *amsung and Thomson are fighting "P0, 7ideocon and +'ai for increased shares in the Es. C,566 crore mar'et. )ow others ha-e joined them, 0 ,lectronics and

!aewoo +nchor ,lectronics. The mood in the arena can be gauged from the mar'eting strategy of 7ideocon competition, e-en it is means a head-on collision on prices or any other front. +ccordingly, the strategies today re-ol-e around direct wooing of customers and dealers. +nd such tactics wor'. 0ast year, "aron

&nternational, which mar'ets the +'ai brand in &ndia, almost doubled its mar'et share with an aggressi-e campaign that tempted buyers with freebies

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

a 8;-inch CT7 or a Fhirlpool washing machine free with a C8-inch set and a music system free with a C9-inch CT7. &ts unit sales doubled to 8,D>,666 during the year. &nfact, the sheer pull of the incenti-e dri-en mar'et saw o-erall sales grow by 8C per cent to touch the C6 la'h units mar' in 899D-95. The coming months should be no different, especially as 0 ,lectronics and

!aewoo +nchor ,lectronics ha-e also begun bard selling their brands. "esides, .nida and Philips are hoping to impro-e on their lac'lustre performance of the past year. +nd the dealers ha-e a -ital role to play in this situation. + sur-ey carried out in 899D by "angalore based consumer durables mar'et research firm Francis /anoi #ar'eting Planning *er-ices 0td. showed that e-en after a buyer decided on a brand, he was li'ely to change his decision at the point of purchase. For instance, :: per cent of the C.> la'h households contacted showed a preference for "P0 T7*, but the companyAs share in the mar'et in 899D-95, though the highest among the players was C8.D> per cent. Companies are eager to e(ploit this by ma'ing it more attracti-e for dealers to sway customers at the showroom into opting for a particular brand or simply by stoc'ing only that brand. To this end, dealers are being offered generous margins, besides the cars and foreign jaunts. !aewoo +nchor ,lectronics, for e(ample, is tal'ing about 8: per cent margins on the ma(imum retail price $normally margins

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

are D-B per cent%. "ut others, li'e "P0, subscribe to another method of promoting sales. &ncenti-e to the dealers are not in the form of gi-eaways or e(tra credit. "ut in actually helping them to impro-e their return on in-estment by way of lower in-entories, quic'er rotations and right model mi(. Pampering dealers is only one aspect of the intense competition in the T7 food chain that aims to gobble mar'et share at any cost. The more important spin-off of the crowding in the mar'et it the arri-al of technically superior T7 sets. +t one time, a C8-inches CT7 was almost the ultimate in -iewing lu(ury. Today blac' and white T7 set owners are being in-ited to upgrade to 8;-inch CT7s. Those who already own 8;4 or C84 CT7s are being tempted to own companion sets or, better still, to buy the C>4 or C94 sets. The mass selling C84 models now come with inno-ati-e features. "P0As latest )&C+# series promises C!-quality sound, while 0 As olden ,ye model tom-toms

sensiti-e @eyesA that respond to any change in the room lighting and automatically adjust colour, sharpness, brightness and contrast. 0 As

*oundma( && series, li'e *amsungAs *uper =aunt, is ad-ertised as ha-ing boosted audio output. +long with newer, upgraded models to choose from, consumers will also end up spending less with companies restoring to price undercutting. For e(ample, Thomson which e(pected to sell about 8.C la'h sets o-erall in

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

8995, slashed the price of its Kuadra C94 from Es. >;,666 to Es. ;:,666 in February and introduced the Fusion C94 model priced at Es. :;,99> which is mouth watering in comparison to prices in the C94 category Es. DB,666 for *amsungAs and Es. 5>,666 for *onyAs. 2Throughout 899D Thomson could sell only four hundred C94 sets. Fithin a month of its new price schemes, it sold 8,:66 sets4, Thomson ,lectronics, 2+fter #arch this year selling around B66 sets e-ery month. &t has increased the entire mar'et for C94 sets. 2&n a similar attempt to sell the 8;4 CT7 in rural poc'ets, "aron has started

selling its +'ai sets, which normally cost Es. 8C,996, for Es. B,996 from this month. &t has also brought the price of its C>4 model to below Es. C6,666 when the mar'et price for the category ranges Es. C>,666 to Es. C5,666. #oreo-er, the companies are trying to ensure that the T7 buyer does not feel the burden e-en the lowered prices. They ha-e tied up with

consumer finance firms to pro-ide attracti-e hire-purchase schemes. the dealers also ha-e their own installment options. The result higher sales. +s +sho' *harma, general manager $mar'eting and sales%, !aewoo +nchor ,lectronics, points out, 2+t least :6 per cent of our sales today is -ia consumer finance4. Fith T7 sets becoming cheaper and the selling more inno-ati-e, itAs a buyerAs mar'et out there.

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

CONCLUSION
The growth rates ha-e tumbled and the mar'et for se-eral durables has either increased or grown at snails pace. The CT7 &ndustry in &ndia is no e(pectation to it. "ut a lot of euphoria has been generated by the entry of global big wigs in the &ndustry. The recent budget proposalAs has caught the mar'et up by surprise. The finance minister has announced cuts in e(cise and customs duties on -arious consumer durables items with gusto. The pea' duty on consumer electronic imports such as colour T7s blac' and white T7s and Fashing machines will now be ;6 per cent, down from >6 per cent. #ultinational companies li'e *ony, *amsung and

Thomson which import C/! 'its for assembling in &ndia will be the major beneficiaries. +lready *ony had cut the prices of higher-end models by B per cent. *ays an industry source, 2Eeduction in import duty would help the #)Cs to increase their share in the domestic mar'et from B to 8C per cent4. .n the domestic front, the finance minister announced a cut in the e(cise duty on CT7s by C per cent. They will also be benefited by reduction in the import duty of colour pictures tubes $CPT% from :> to :6 per cent. This would enable to reduce the CT7 prices by Es. ;66->66. "y this cuts, the CT7 industry would witness a growth of C6-C> per cent.

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

=owe-er, not all the domestic manufacturers are optimistic about the cuts. The duty cuts on finished T7 sets being more than on CPTs, the #)Cs stand to gain. #oreo-er, the domestic CT7 ma'ers are not in a

position to effect any price cuts as they are already facing a se-ere pressure on their margins. *o itAs bac' to price-led consumer pull for now and the near future, rec'ons the industry. Further on, a polarisation of consumers will probably occur on product -alue and price, which is currently in a :6I56 ratio. "rand stances will ha-e to be ta'en on this, something that already seems to be emerging. there will be those that stay with the low price

propositions and others that straddle both through range and image. +nd still others who, ha-ing rejected deals and offer, will ha-e to 'eenly peg on distincti-e product -alue. +ny which way, the consumer will benefit.

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

MAJOR RUG PULLE R S IN THE INDI A N CTV INDU S T R Y

C5!*n &f necessity is the mother of in-ention, then the mar'eters at a Es 9C crore $899>-9D% +hmedabad - based manufacturer literally ta'e the crown. Crown, which has been around in the mar'et since 89BC, was facing a -irtual obliteration in the mar'et. &ts mar'et share in the colour tele-ision $CT7% mar'et had declined from 8> per cent to about B per cent in 899D-95 . The entry of #)C brands with their e(change offers, together with the slump in the consumer durable mar'et, had merely put the company and the brand under se-ere pressure. CrownAs gambit I launch a tele-ision priced at a shade below Es 86,666 . *ays *unil 1ha-eri, director, Crown T7, 2Fe reali3ed that Es 86,666 was a psychological barrier. &f we could brea' it, there was e-ery chance that e-en the replacement mar'et would consider buying a completely new tele-ision.4 "y the loo's of it, Crown seems to ha-e pulled it off. &n a span of ;6 days co-ering 1uly to the first half of +ugust, Crown has boo'ed 85,666 sets and actually sold 88,666 CT7 sets. Typically, the mar'et si3e of ujarat is

8C,666 CT7 sets per month. *ays 1ha-eri, 2Crown has e(panded the mar'et and by rough estimates captured D6 per cent of the ujarat mar'et4.

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

Oni7a The harsh competition has badly damaged the wor'ing at .)&!+. 0ast year faced with the /orean and 1apanese onslaught , the brand saw its mar'et share plummet by a whopping :9 per cent &n the Es C666 crore colour tele-ision mar'et. &n the eighties, .)&!+ had captured the imagination of the T7 mar'et with its stunning products and dare - de-il ad-ertising and 3oomed to the top of the heap. This rapid growth continued into the early nineties. "ut what the company failed to do was build an organi3ational structure that could support the increased si3e of business. The company was started in 89B; by two brothers, ulab and *onu

#irchandani. *oon after the )ew !elhi +siad, the two brothers sighted the opportunity in the nascent tele-ision mar'et. Then came the Eeliance Cup in 89B5. =ere .nidaAs technical tie - up with 17C helped it no end in a colour tele-ision $CT7% mar'etplace. "y 8998 , the cric'et fe-er had

reached its pitch with tournaments li'e )ehru Cup, =ero Cup ser-icing to prepone the CT7 purchase. &n 8998-9C , the brand pea'ed at C6 per cent mar'et share, "P0 had C8 per cent of the mar'et and 7ideocon had CC per cent. *ince the top three brands had o-er D> per cent of the mar'et the industry loo'ed consolidated. &n 899>, there started a tric'le of the

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

1apanese and the /oreans. The year saw a slowdown all around and the colour tele-ision segment was one of the hardest hit. rowth just

disappeared . Fhile e-ery mar'eter is grappling with ways to tac'le this phenomenon . .)&!+ too is loo'ing at the mar'et in its own way. S!n( The turn o-er of *.)Y &)!&+ E*. :;> Crores. &t ran's no.8 in the high end segment. The Core "rand 7alues of *.)Y are &nno-ation, Consistency, .riginality. &t product mi( is such that, it caters to all the segments. "ut its target segment lies in the age group of 8B-;6 years. =igh Kuality Product ? +esthetic

+ppeal are its H*P. &t follows a Premium Pricing policy. &ts distribution networ' comprises of :: distributors to ta'e care of 8:66 dealers. Da *!! The founder ? chairman of !aewoo is /imwoo choong. !aewoo recorded sales of N >5 billion. &n 899>

!aewoo is *outh /oreaAs third

largest company, after *amsung ? =yundai. &t was only in the late 89B6As that !aewoo electronics Co. ? !aewoo #otor Co. came in the international spotlight. *ince late 899> , !aewoo has been running to become the worldAs

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

largest manufacturer of T.7. sets, with its bid to buy out FranceAs Thomson #ultimedia. The deal, if it goes through , will gi-e !aewoo control o-er the EC+ brand name, as well as manufacturing facilities in ,urope *ingaporeAs and +merica, all in a single stro'e. )othing has fructified yet. "ut a failure here is li'ely to ma'e the group e-en more determined to emerge amount the top : electronics companies in the world by year C666, a target e-ery employee is supposed to be wor'ing towards. The groupAs new corporate philosophy, 2&nno-ation Tan'4 depicts e(actly how it wants to go about its ambition. The idea is to li'en all !aewoo products to an army tan', each of which need to -erify as simples durables reliable , trouble free. To that, one may need the ability to surprise competition and a dogged determination to bulldo3e through ad-ersity. <. 3. E' &t5!ni&s #any T7 brands made noise on technology this year. Foremost among them I 0 ,lectronics &ndia P-t. 0td., a wholly owned subsidiary of

the N 5: million south /orean electronics giant 0. .,lectronics. The high pitched ad campaign said , 289CDI 1ohn logic "arid in-ents the T7 ? creates history M 8995 I 0 The creates olden ,ye, and ma'es other T7s history . =owL

olden ,ye consists of a light sensiti-e natural algorithm @eyeA and an

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

ad-anced circuit de-eloped by 0 . The eye responds to any changes in the soon lighting, triggering off the circuit which then automatically adjusts colors, sharpness, brightness, contrast, tint ? white balance4. The product boasts of a host of other features li'e sound retrie-al system, re-olutionary graphic equali3er, super flat colour picture, scanning -elocity manipulation ? a picture impro-ement circuit with : electronic filters. The company introduced the C9 inch olden ,ye this year, at a price of Es olden ,ye C6

>;,;96. This was followed by the launch of C -ariants - The inch and the 0

olden ,ye C8 inch, priced at Es 8D>>6 and Es 89596. olden ,ye presents the biggest brea'through since the

claims

in-ention of T7. "ut will the ad campaign based on technology sell L &t apparently has. 0 has announced its first Es >6 crore in o-erall sales, just in ; months of

launch.

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

Sa$sun# *amsung $&ndia% ,lectronics 0td. $*&,0% , is a relati-ely new organi3ation ha-ing recei-ed its ser-ice for commencement of business on 9th +ug. 899>. Currently it has its =ead office at )ew !elhi with branches at I !elhi , ha3iabad, 0uc'now, 1aipur, Chandigarh, "angalore, #adras, andhinagar. For *amsung

=yderabad, "ombay, Cochin, =aryana and

&ndia ,lectronics 0td. +d- spent is stated to go up from ;.> million last year to N D.5 million this time. Th Sa$sun# Phi'!s!=h( : Fe will de-ote our human resources and technology to create superior products and ser-ices, thereby contributing to a better society. Sa$sun# S=i5it : To be always in-ol-ed with customers To recognise and confront global challenge To create a better future for all P5!7u&t Mi@ : Dist5i6uti!n : Catering to mid and hi-end segment 8C66 dealers

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

A:ai &n the crowded consumer electronics arena, +'ai has opted for an aggressi-e price - off strategy. +'ai entered the &ndian mar'et in 1anuary 899>. +'aiAs aggressi-e price discount strategy too' the T7 industry by storm forcing all players to follow suit. The company has grown an unbelie-able 866 times in ; years - from a start up of Es > crore in 899C-9: to Es >66 crore brown goods giant in 1une 899D and has grabbed 88O share of o-erall CT7 mar'et. +'ai is loo'ing at efficiencies reducing

in-entories from warehouse to dealer, supplying dealers on a daily basis, creating consumer pull through ad-ertising. +'aiAs distribution cost is 8O of sales, against the >O of others. +'aiAs dealerAs earning is higher by 56 to B6O on in-estment , against the C> to :6O pro-ided by competition. S!$ !" th s&h $ s !"" 5 7 6( A:ai a5 + )o'ia - 8D86 cellphone $ Es 8C,666% together with a connection along with its C84 CT7 $Es C:;96% in =yderabad. ,(change an old C84 T7 for a new C94 model and get Es C6,666 off.

Free 8;4 CT7 with e-ery C84 CT7 purchase.

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

Free 8D> litre whirlpool refrigerator with C84 CT7 $Es 8B,666%.

Free washing machine with +'ai T7.

+'aiAs brea' e-en is half that of &ndian players. The T+E ,T #+E/,T of +'ai are the second T.7. buyers, owners of

blac' and white sets who want to go colour and those who want to trade up to a bigger C94 model. =owe-er, +'ai now ris's being dubbed a discount brand. &t is felt that +'aiAs design and components are not necessarily of a high quality standard. Further, by ma'ing use of the loopholes in the manufacturing policy, semi assembled sets are imported, final assembly done and sets offered at throw away prices. There is a danger in letting ad-ertising ta'e a bac' seat to sales promotion. *ales Promotion aims to wea'en brand loyalty. Fhen a brand is promoted too much of the time, the consumer begins to thin' less of it and buy it mainly when it goes on sale . *o would +'ai be able to sustain its growth L

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

PREF A C E
The economic liberalisation has turned the &ndian economy into competiti-e mar'et place. The &ndian industry is made to struggle against both &nternal and e(ternal competition. the protected en-ironment is new a thing of the past. Fith augmentation in capacity the fresh capacity creation is on the an-il. ,(isting ones are also planning e(pansion of or setting up of new, capacities. the domestic mar'et is e(panding rapidly, total sales growth +nd yet a question is being

e(ceeding C6O for the last two years.

legitimately as'ed as to whether the mar'et can absorb the massi-e capacity addition what is in the pipeline. domestic mar'et L Fith all new de-elopment ta'ing place in the mar'et, the present study stri-es to e(amine these issues thread bare. Fhat is the growth prospectus of the

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

BIBLI O G R A P H Y
&. &)!&+ T.!+Y &&. *HE7,Y .F &)!&+) &)!H*TEY 899D &&&. *HE7,Y .F &)!&+) &)!H*TEY 8995 &7. C=+ET,E,! F&)+)C&+0 +)+0Y*T 7. "H*&),** F.E0! 7&. "H*&),** T.!+Y 7&&. 7&&&. "H*&),** &)!&+ C&& E,P.ET 1une :6, 8995 T=, =&)!H T=, =&)!H +pril,8995 C-8> .ct., 899D 5-C8 1une, 8995 8-86 +ug., 8995

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

MULTI N A T I O N A L S IN THE LIMELI G H T

"rands 7&!,.C.) "P0 .)&!+ +/+& P=&0&P* *=+EP P+)+*.)&C *+#*H) *.)Y T=.#*.) 899>-9D C>O C;O 85O 6DO 68O 6;O 6:O 6:O 6:O 6:O 899D-95 CDO C;O 88O 6BO 69O >O ;O >O ;O ;O

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- - VIS MNCS

SUBMITTED TO

MR. X. Y. Z....... (CHAIRMAN), IIMT

SUBMITTED FOR THE PARTIAL FULFILLMENT OF POST GRADUATE DIPLOMA IN BUSINESS MANAGEMENT BY ABC ( !!"- !#)

ISHAN INSTITUTE O F M ANAGEMENT A ND T ECHNOLOGY

A STUDY ON CTV INDUSTRY : INDIAN COMPANIES VIS- -VIS MNCs

NE$ DELHI