PROJECT REPORT

ON

“CONSUMER PREFERENCE TOWARDS LG

PRODUCTS”

Submitted in partial fulfillment for the award of

Degree of Master of Business Administration
(session: 2008-2010)

Submitted by:
Poonam Sangwan
Roll no: 415
M.B.A. 4th sem.

P.D.M. COLLEGE OF ENGINEERING

BAHADURGARH (JHAJJAR)
(Affiliated to M.D. University, Rohtak)
 DECLARATION

I, Poonam Sangwan Roll No. 415 class MBA 4th SEM of PDM college of Engineering, Bahadurgarh, hereby

declare that the project entitled ‘CONSUMER PREFERENCE TOWARDS LG PRODUCTS”’

is an original work and same has not been submitted to any other institution for the award of any other
degree. The interim report was presented to the supervisor on ________________ and the presubmission was
made on _______________. The feasible suggestion has been duly incorporated in consultation
with the supervisor.

Countersigned

Signature of supervisor Signature of the Candidate

Forwarded by

Director/Principal of the institute

 ACKNOWLEDGEMENT

“Acknowledgements are a bit like acceptance speeches; Predictable but from the heart so
here is some predictable prose direct from the heart.”
A successful project can never be prepared by the single efforts of the person to whom project is
assigned, but it also demand the help and guardianship of some conversant person who helped the
undersigned actively or passively in the completion of successful project.
I am grateful for finishing this project to many people.
First of all, I want to thank Mrs. Nandita Rathee Head of Department, Management Studies.
Secondly I wish to express my profound gratitude and sincere thanks to my esteemed
Professor Mrs. Parul at who was always there to help and guide me when I needed help. Her
perceptive criticism kept me working to make this project more full proof. I am thankful to
her for her encouragement and valuable support. Working under her was an extremely
knowledgeable and enriching experience for me. I am very thankful to her for all of the
productive discussions on customers buying preference. I am grateful to many anonymous
experts working in the turbulent environment of business, who provided me with better
understanding of market and customers. These insights helped me in explaining some of the
empirical research findings.
Without my friends it would have been difficult to balance between work and free time. I
would like to thank them .At last but not least, I want to thank God without whose inspiration
and guidance this herculean task would not have been accomplished.

POONAM SANGWAN
 INTRODUCTION

The study of consumers helps firms and organizations improve their marketing strategies by
understanding issues such as how

• The psychology of how consumers think, feel, reason, and select between different
alternatives (e.g., brands, products);
• The psychology of how the consumer is influenced by his or her environment (e.g.,
culture, family, signs, media);
• The preference of consumers while shopping or making other marketing decisions;
• Limitations in consumer knowledge or information processing abilities influence
decisions and marketing outcome;
• How consumer motivation and decision strategies differ between products that differ
in their level of importance or interest that they entail for the consumer; and
• How marketers can adapt and improve their marketing campaigns and marketing
strategies to more effectively reach the consumer.

One "official" definition of consumer preference is "The study of individuals, groups, or

organizations and the processes they use to select, secure, use, and dispose of products,
services, experiences, or ideas to satisfy needs and the impacts that these processes have on
the consumer and society." Although it is not necessary to memorize this definition, it brings
up some useful points:

• Preference occurs either for the individual, or in the context of a group (e.g., friends
influence what kinds of clothes a person wears) or an organization (people on the job
make decisions as to which products the firm should use).
• Consumer preference involves the use and disposal of products as well as the study of
how they are purchased. Product use is often of great interest to the marketer, because
this may influence how a product is best positioned or how we can encourage
increased consumption. Since many environmental problems result from product
disposal (e.g., motor oil being sent into sewage systems to save the recycling fee, or
garbage piling up at landfills) this is also an area of interest.
• Consumer preference involves services and ideas as well as tangible products.
 • The impact of consumer preference on society is also of relevance. For example,
aggressive marketing of high fat foods, or aggressive marketing of easy credit, may
have serious repercussions for the national health and economy.

There are four main applications of consumer preference:

• The most obvious is for marketing strategy—i.e., for making better marketing
campaigns. For example, by understanding that consumers are more receptive to food
advertising when they are hungry, we learn to schedule snack advertisements late in
the afternoon. By understanding that new products are usually initially adopted by a
few consumers and only spread later, and then only gradually, to the rest of the
population, we learn that (1) companies that introduce new products must be well
financed so that they can stay afloat until their products become a commercial success
and (2) it is important to please initial customers, since they will in turn influence
many subsequent customers’ brand choices.
• A second application is public policy. In the 1980s, Accutane, a near miracle cure for
acne, was introduced. Unfortunately, Accutane resulted in severe birth defects if taken
by pregnant women. Although physicians were instructed to warn their female
patients of this, a number still became pregnant while taking the drug. To get
consumers’ attention, the Federal Drug Administration (FDA) took the step of
requiring that very graphic pictures of deformed babies be shown on the medicine
containers.
• Social marketing involves getting ideas across to consumers rather than selling
something. Marty Fishbein, a marketing professor, went on sabbatical to work for the
Centers for Disease Control trying to reduce the incidence of transmission of diseases
through illegal drug use. The best solution, obviously, would be if we could get illegal
drug users to stop. This, however, was deemed to be infeasible. It was also determined
that the practice of sharing needles was too ingrained in the drug culture to be
stopped. As a result, using knowledge of consumer attitudes, Dr. Fishbein created a
campaign that encouraged the cleaning of needles in bleach before sharing them, a
goal that was believed to be more realistic.
• As a final benefit, studying consumer preference should make us better consumers.
Common sense suggests, for example, that if you buy a 64 liquid ounce bottle of
laundry detergent, you should pay less per ounce than if you bought two 32 ounce
bottles. In practice, however, you often pay a size premium by buying the larger
 quantity. In other words, in this case, knowing this fact will sensitize you to the need
to check the unit cost labels to determine if you are really getting a bargain.

There are several units in the market that can be analyzed. Our main thrust in this course is
the consumer. However, we will also need to analyze our own firm’s strengths and
weaknesses and those of competing firms. Suppose, for example, that we make a product
aimed at older consumers, a growing segment. A competing firm that targets babies, a
shrinking market, is likely to consider repositioning toward our market. To assess a
competing firm’s potential threat, we need to examine its assets (e.g., technology, patents,
market knowledge, awareness of its brands) against pressures it faces from the market.
Finally, we need to assess conditions (the marketing environment). For example, although we
may have developed a product that offers great appeal for consumers, a recession may cut
demand dramatically.

Consumer Research Methods

Market research is often needed to ensure that we produce what customers really want and
not what we think they want.

Primary vs. secondary research methods. There are two main approaches to marketing.
Secondary research involves using information that others have already put together. For
example, if you are thinking about starting a business making clothes for tall people, you
don’t need to question people about how tall they are to find out how many tall people exist
—that information has already been published by the U.S. Government. Primary research, in
contrast, is research that you design and conduct yourself. For example, you may need to
find out whether consumers would prefer that your soft drinks be sweater or tarter.

Research will often help us reduce risks associated with a new product, but it cannot take the
risk away entirely. It is also important to ascertain whether the research has been complete.
For example, Coca Cola did a great deal of research prior to releasing the New Coke, and
consumers seemed to prefer the taste. However, consumers were not prepared to have this
drink replace traditional Coke.

Secondary Methods. For more information about secondary market research tools and
issues.

Primary Methods. Several tools are available to the market researcher—e.g., mail
questionnaires, phone surveys, observation, and focus groups.
Surveys are useful for getting a great deal of specific information. Surveys can contain open-
ended questions (e.g., “In which city and state were you born? ____________ ) or closed-
ended, where the respondent is asked to select answers from a brief list (e.g., “__Male ___
Female.”� Open ended questions have the advantage that the respondent is not limited to
the options listed, and that the respondent is not being influenced by seeing a list of
responses. However, open-ended questions are often skipped by respondents, and coding
them can be quite a challenge. In general, for surveys to yield meaningful responses, sample
sizes of over 100 are usually required because precision is essential. For example, if a market
share of twenty percent would result in a loss while thirty percent would be profitable, a
confidence interval of 20-35% is too wide to be useful.

Surveys come in several different forms. Mail surveys are relatively inexpensive, but
response rates are typically quite low—typically from 5-20%. Phone-surveys get somewhat
higher response rates, but not many questions can be asked because many answer options
have to be repeated and few people are willing to stay on the phone for more than five
minutes. Mall intercepts are a convenient way to reach consumers, but respondents may be
reluctant to discuss anything sensitive face-to-face with an interviewer.

Surveys, as any kind of research, are vulnerable to bias. The wording of a question can
influence the outcome a great deal. For example, more people answered no to the question
“Should speeches against democracy be allowed?  than answered yes to “Should speeches
against democracy be forbidden?” For face-to-face interviews, interviewer bias is a danger,
too. Interviewer bias occurs when the interviewer influences the way the respondent
answers. For example, unconsciously an interviewer that works for the firm manufacturing
the product in question may smile a little when something good is being said about the
product and frown a little when something negative is being said. The respondent may catch
on and say something more positive than his or her real opinion. Finally, a response bias may
occur—if only part of the sample responds to a survey, the respondents  answers may not
be representative of the population.

Focus groups are useful when the marketer wants to launch a new product or modify an
existing one. A focus group usually involves having some 8-12 people come together in a
room to discuss their consumption preferences and experiences. The group is usually led by
a moderator, who will start out talking broadly about topics related broadly to the product
without mentioning the product itself. For example, a focus group aimed at sugar-free
cookies might first address consumers  snacking preferences, only gradually moving
toward the specific product of sugar-free cookies. By not mentioning the product up front,
we avoid biasing the participants into thinking only in terms of the specific product brought
out. Thus, instead of having consumers think primarily in terms of what might be good or
bad about the product, we can ask them to discuss more broadly the ultimate benefits they
really seek. For example, instead of having consumers merely discuss what they think about
some sugar-free cookies that we are considering releasing to the market, we can have
consumers speak about their motivations for using snacks and what general kinds of benefits
they seek. Such a discussion might reveal a concern about healthfulness and a desire for
wholesome foods. Probing on the meaning of wholesomeness, consumers might indicate a
desire to avoid artificial ingredients. This would be an important concern in the marketing of
sugar-free cookies, but might not have come up if consumers were asked to comment directly
on the product where the use of artificial ingredients is, by virtue of the nature of the product,
necessary.

Focus groups are well suited for some purposes, but poorly suited for others. In general,
focus groups are very good for getting breadth—i.e., finding out what kinds of issues are
important for consumers in a given product category. Here, it is helpful that focus groups are
completely “open-ended:  The consumer mentions his or her preferences and opinions,
and the focus group moderator can ask the consumer to elaborate. In a questionnaire, if one
did not think to ask about something, chances are that few consumers would take the time to
write out an elaborate answer. Focus groups also have some drawbacks, for example:

• They represent small sample sizes. Because of the cost of running focus groups, only
a few groups can be run. Suppose you run four focus groups with ten members each.
This will result in an n of 4(10)=40, which is too small to generalize from. Therefore,
focus groups cannot give us a good idea of:
• What proportion of the population is likely to buy the product.
• What price consumers are willing to pay.
• The groups are inherently social. This means that:
• Consumers will often say things that may make them look good (i.e., they watch
public television rather than soap operas or cook fresh meals for their families daily)
even if that is not true.
• Consumers may be reluctant to speak about embarrassing issues (e.g., weight control,
birth control).
Personal interviews involve in-depth questioning of an individual about his or her interest in
or experiences with a product. The benefit here is that we can get really into depth (when the
respondent says something interesting, we can ask him or her to elaborate), but this method of
research is costly and can be extremely vulnerable to interviewer bias.

To get a person to elaborate, it may help to try a common tool of psychologists and
psychiatrists—simply repeating what the person said. He or she will often become
uncomfortable with the silence that follows and will then tend to elaborate. This approach
has the benefit that it minimizes the interference with the respondent’s own ideas and
thoughts. He or she is not influenced by a new question but will, instead, go more in depth
on what he or she was saying.

Personal interviews are highly susceptible to inadvertent “signaling  to the respondent.

Although an interviewer is looking to get at the truth, he or she may have a significant
interest in a positive consumer response. Unconsciously, then, he or she may inadvertently
smile a little when something positive is said and frown a little when something negative is
said. Consciously, this will often not be noticeable, and the respondent often will not
consciously be aware that he or she is being “reinforced  and “punished  for saying
positive or negative things, but at an unconscious level, the cumulative effect of several facial
expressions are likely to be felt. Although this type of conditioning will not get a completely
negative respondent to say all positive things, it may “swing  the balance a bit so that
respondents are more likely to say positive thoughts and withhold, or limit the duration of,
negative thoughts.

Projective techniques are used when a consumer may feel embarrassed to admit to certain
opinions, feelings, or preferences. For example, many older executives may not be
comfortable admitting to being intimidated by computers. It has been found that in such
cases, people will tend to respond more openly about “someone else.”� Thus, we may ask
them to explain reasons why a friend has not yet bought a computer, or to tell a story about a
person in a picture who is or is not using a product. The main problem with this method is
that it is difficult to analyze responses.

Projective techniques are inherently inefficient to use. The elaborate context that has to be
put into place takes time and energy away from the main question. There may also be real
differences between the respondent and the third party. Saying or thinking about something
that “hits too close to home  may also influence the respondent, who may or may not be
able to see through the ruse.
Observation of consumers is often a powerful tool. Looking at how consumers select
products may yield insights into how they make decisions and what they look for. For
example, some American manufacturers were concerned about low sales of their products in
Japan. Observing Japanese consumers, it was found that many of these Japanese consumers
scrutinized packages looking for a name of a major manufacturer—the product specific-
brands that are common in the U.S. (e.g., Tide) were not impressive to the Japanese, who
wanted a name of a major firm like Mitsubishi or Proctor & Gamble. Observation may help
us determine how much time consumers spend comparing prices, or whether nutritional
labels are being consulted.

A question arises as to whether this type of “spying  inappropriately invades the privacy of
consumers. Although there may be cause for some concern in that the particular individuals
have not consented to be part of this research, it should be noted that there is no particular
interest in what the individual customer being watched does. The question is what consumers
—either as an entire group or as segments—do. Consumers benefit, for example, from stores
that are designed effectively to promote efficient shopping. If it is found that women are
more uncomfortable than men about others standing too close, the areas of the store heavily
trafficked by women can be designed accordingly. What is being reported here, then, are
averages and tendencies in response. The intent is not to find “juicy  observations specific
to one customer.

The video clip with Paco Underhill that we saw in class demonstrated the application of
observation research to the retail setting. By understanding the phenomena such as the
tendency toward a right turn, the location of merchandise can be observed. It is also possible
to identify problem areas where customers may be overly vulnerable to the “but brush,  or
overly close encounter with others. This method can be used to identify problems that the
customer experiences, such as difficulty finding a product, a mirror, a changing room, or a
store employee for help.

Online research methods. The Internet now reaches the great majority of households in the
U.S., and thus, online research provides new opportunity and has increased in use.

One potential benefit of online surveys is the use of “conditional branching.”� In

conventional paper and pencil surveys, one question might ask if the respondent has shopped
for a new car during the last eight months. If the respondent answers “no,  he or she will
be asked to skip ahead several questions—e.g., going straight to question 17 instead of
proceeding to number 9. If the respondent answered “yes,  he or she would be instructed
to go to the next question which, along with the next several ones, would address issues
related to this shopping experience. Conditional branching allows the computer to skip
directly to the appropriate question. If a respondent is asked which brands he or she
considered, it is also possible to customize brand comparison questions to those listed.
Suppose, for example, that the respondent considered Ford, Toyota, and Hyundai, it would be
possible to ask the subject questions about his or her view of the relative quality of each
respective pair—in this case, Ford vs. Toyota, Ford vs. Hyundai, and Toyota vs. Hyundai.

There are certain drawbacks to online surveys. Some consumers may be more comfortable
with online activities than others—and not all households will have access. Today, however,
this type of response bias is probably not significantly greater than that associated with other
types of research methods. A more serious problem is that it has consistently been found in
online research that it is very difficult—if not impossible—to get respondents to carefully
read instructions and other information online—there is a tendency to move quickly. This
makes it difficult to perform research that depends on the respondent’s reading of a situation
or product description.

Online search data and page visit logs provides valuable ground for analysis. It is possible to
see how frequently various terms are used by those who use a firm’s web site search feature
or to see the route taken by most consumers to get to the page with the information they
ultimately want. If consumers use a certain term frequently that is not used by the firm in its
product descriptions, the need to include this term in online content can be seen in search
logs. If consumers take a long, “torturous  route to information frequently accessed, it
may be appropriate to redesign the menu structure and/or insert hyperlinks in
“intermediate  pages that are found in many users  routes.

Scanner data. Many consumers are members of supermarket “clubs.”� In return for
signing p for a card and presenting this when making purchases, consumers are often eligible
for considerable discounts on selected products.

Researchers use a more elaborate version of this type of program in some communities.
Here, a number of consumers receive small payments and/or other incentives to sign up to be
part of a research panel. They then receive a card that they are asked to present any time they
go shopping. Nearly all retailers in the area usually cooperate. It is now possible to track
what the consumer bought in all stores and to have a historical record.
The consumer’s shopping record is usually combined with demographic information (e.g.,
income, educational level of adults in the household, occupations of adults, ages of children,
and whether the family owns and rents) and the family’s television watching habits.
(Electronic equipment run by firms such as A. C. Nielsen will actually recognize the face of
each family member when he or she sits down to watch).

It is now possible to assess the relative impact of a number of factors on the consumer’s
choice—e.g.,

• What brand in a given product category was bought during the last, or a series of past,
purchase occasions;
• Whether, and if so, how many times a consumer has seen an ad for the brand in
question or a competing one;
• Whether the target brand (and/or a competing one) is on sale during the store visit;
• Whether any brand had preferential display space;
• The impact of income and/or family size on purchase patterns; and
• Whether a coupon was used for the purchase and, if so, its value.

A “split cable  technology allows the researchers to randomly select half the panel
members in a given community to receive one advertising treatment and the other half
another. The selection is truly random since each household, as opposed to neighborhood, is
selected to get one treatment or the other. Thus, observed differences should, allowing for
sampling error, the be result of advertising exposure since there are no other systematic
differences between groups.

Interestingly, it has been found that consumers tend to be more influenced by commercials
that they “zap  through while channel surfing even if they only see part of the
commercial. This most likely results from the reality that one must pay greater attention
while channel surfing than when watching a commercial in order to determine which program
is worth watching.

Scanner data is, at the present time, only available for certain grocery item product
categories—e.g., food items, beverages, cleaning items, laundry detergent, paper towels, and
toilet paper. It is not available for most non-grocery product items. Scanner data analysis
is most useful for frequently purchased items (e.g., drinks, food items, snacks, and toilet
paper) since a series of purchases in the same product category yield more information with
greater precision than would a record of one purchase at one point in time. Even if scanner
data were available for electronic products such as printers, computers, and MP3 players, for
example, these products would be purchased quite infrequently. A single purchase, then,
would not be as effective in effectively distinguishing the effects of different factors—e.g.,
advertising, shelf space, pricing of the product and competitors, and availability of a coupon
—since we have at most one purchase instance during a long period of time during which
several of these factors would apply at the same time. In the case of items that are purchased
frequently, the consumer has the opportunity to buy a product, buy a competing product, or
buy nothing at all depending on the status of the brand of interest and competing brands. In
the case of the purchase of an MP3 player, in contrast, there may be promotions associated
with several brands going on at the same time, and each may advertise. It may also be that
the purchase was motivated by the breakdown of an existing product or dissatisfaction or a
desire to add more capabilities.

Physiological measures are occasionally used to examine consumer response. For example,
advertisers may want to measure a consumer’s level of arousal during various parts of an
advertisement. This can be used to assess possible discomfort on the negative side and level
of attention on the positive side.

By attaching a tiny camera to plain eye glasses worn by the subject while watching an
advertisement, it is possible to determine where on screen or other ad display the subject
focuses at any one time. If the focus remains fixed throughout an ad sequence where the
interesting and active part area changes, we can track whether the respondent is following the
sequence intended. If he or she is not, he or she is likely either not to be paying as much
attention as desired or to be confused by an overly complex sequence. In situations where the
subject’s eyes do move, we can assess whether this movement is going in the intended
direction.

Mind-reading would clearly not be ethical and is, at the present time, not possible in any
event. However, it is possible to measure brain waves by attaching electrodes. These
readings will not reveal what the subject actually thinks, but it is possible to distinguish
between beta waves—indicating active thought and analysis—and alpha waves, indicating
lower levels of attention.

An important feature of physiological measures is that we can often track performance over
time. A subject may, for example, be demonstrating good characteristics—such as
appropriate level of arousal and eye movement—during some of the ad sequence and not
during other parts. This, then, gives some guidance as to which parts of the ad are effective
and which ones need to be reworked.

In a variation of direct physiological measures, a subject may be asked, at various points

during an advertisement, to indicate his or her level of interest, liking, comfort, and approval
by moving a lever or some instrument (much like one would adjust the volume on a radio or
MP3 player). Republican strategist used this technique during the impeachment and trial of
Bill Clinton in the late 1990s. By watching approval during various phases of a speech by the
former President, it was found that viewers tended to respond negatively when he referred to
“speaking truthfully  but favorably when the President referred to the issues in controversy
as part of his “private life.”� The Republican researchers were able to separate average
results from Democrats, Independents, and Republicans, effectively looking at different
segments to make sure that differences between each did not cancel out effects of the
different segments. (For example, if at one point Democrats reacted positively and
Republicans responded negatively with the same intensity, the average result of apparent
indifference would have been very misleading).

Research sequence. In general, if more than one type of research is to be used, the more
flexible and less precise method—such as focus groups and/or individual interviews—should
generally be used before the less flexible but more precise methods (e.g., surveys and scanner
data) are used. Focus groups and interviews are flexible and allow the researcher to follow
up on interesting issues raised by participants who can be probed. However, because the
sample sizes are small and because participants in a focus group are influenced by each other,
few data points are collected. If we run five focus groups with eight people each, for
example, we would have a total of forty responses. Even if we assume that these are
independent, a sample size of forty would give very imprecise results. We might conclude,
for example, that somewhere between 5% and 40% of the target market would be interested
in the product we have to offer. This is usually no more precise than what we already
reasonably new. Questionnaires, in contrast, are highly inflexible. It is not possible to ask
follow-up questions. Therefore, we can use our insights from focus groups and interviews to
develop questionnaires that contain specific questions that can be asked to a larger number of
people. There will still be some sampling error, but with a sample size of 1,000+ responses,
we may be able to narrow the 95% confidence interval for the percentage of the target market
that is seriously interested in our product to, say, 17-21%, a range that is much more
meaningful.

Cautions. Some cautions should be heeded in marketing research. First, in general, research
should only be commissioned when it is worth the cost. Thus, research should normally be
useful in making specific decisions (what size should the product be? Should the product be
launched? Should we charge $1.75 or $2.25?)

Secondly, marketing research can be, and often is, abused. Managers frequently have their
own “agendas  (e.g., they either would like a product to be launched or would prefer that it
not be launched so that the firm will have more resources left over to tackle their favorite
products). Often, a way to get your way is to demonstrate through “objective  research
that your opinions make economic sense. One example of misleading research, which was
reported nationwide in the media, involved the case of “The Pentagon Declares War on Rush
Limbaugh.”� The Pentagon, within a year of the election of Democrat Bill Clinton,
reported that only 4.2% of soldiers listening to the Armed Forces Network wanted to hear
Rush Limbaugh. However, although this finding was reported without question in the media,
it was later found that the conclusion was based on the question “What single thing can we do
to improve programming?”� If you did not write in something like “Carry Rush
Limbaugh,  you were counted as not wanting to hear him.

Culture and Subculture

Culture is part of the external influences that impact the consumer. That is, culture represents
influences that are imposed on the consumer by other individuals.
The definition of culture offered in one textbook is “That complex whole which includes
knowledge, belief, art, morals, custom, and any other capabilities and habits acquired by man
person as a member of society.”� From this definition, we make the following observations:

• Culture, as a “complex whole,  is a system of interdependent components.

• Knowledge and beliefs are important parts. In the U.S., we know and believe that a
person who is skilled and works hard will get ahead. In other countries, it may be
believed that differences in outcome result more from luck. “Chunking,  the name
for China in Chinese, literally means “The Middle Kingdom.”� The belief among
ancient Chinese that they were in the center of the universe greatly influenced their
thinking.
• Other issues are relevant. Art, for example, may be reflected in the rather arbitrary
practice of wearing ties in some countries and wearing turbans in others. Morality
may be exhibited in the view in the United States that one should not be naked in
public. In Japan, on the other hand, groups of men and women may take steam baths
together without perceived as improper. On the other extreme, women in some Arab
countries are not even allowed to reveal their faces. Notice, by the way, that what at
least some countries view as moral may in fact be highly immoral by the standards of
another country. For example, the law that once banned interracial marriages in South
Africa was named the “Immorality Act,  even though in most civilized countries
this law, and any degree of explicit racial prejudice, would itself be considered highly
immoral.

Culture has several important characteristics: (1) Culture is comprehensive. This means that
all parts must fit together in some logical fashion. For example, bowing and a strong desire
to avoid the loss of face are unified in their manifestation of the importance of respect. (2)
Culture is learned rather than being something we are born with. We will consider the
mechanics of learning later in the course. (3) Culture is manifested within boundaries of
acceptable preference. For example, in American society, one cannot show up to class naked,
but wearing anything from a suit and tie to shorts and a T-shirt would usually be acceptable.
Failure to behave within the prescribed norms may lead to sanctions, ranging from being
hauled off by the police for indecent exposure to being laughed at by others for wearing a suit
at the beach. (4) Conscious awareness of cultural standards is limited. One American spy
was intercepted by the Germans during World War II simply because of the way he held his
knife and fork while eating. (5) Cultures fall somewhere on a continuum between static and
dynamic depending on how quickly they accept change. For example, American culture has
changed a great deal since the 1950s, while the culture of Saudi Arabia has changed much
less.

Dealing with culture. Culture is a problematic issue for many marketers since it is
inherently nebulous and often difficult to understand. One may violate the cultural norms of
another country without being informed of this, and people from different cultures may feel
uncomfortable in each other’s presence without knowing exactly why (for example, two
speakers may unconsciously continue to attempt to adjust to reach an incompatible preferred
interpersonal distance).

Warning about stereotyping. When observing a culture, one must be careful not to over-
generalize about traits that one sees. Research in social psychology has suggested a strong
tendency for people to perceive an “outgroup  as more homogenous than an “ingroup, 
even when they knew what members had been assigned to each group purely by chance.
When there is often a “grain of truth  to some of the perceived differences, the temptation
to over-generalize is often strong. Note that there are often significant individual differences
within cultures.

Cultural lessons. We considered several cultural lessons in class; the important thing here is
the big picture. For example, within the Muslim tradition, the dog is considered a “dirty 
animal, so portraying it as “man’s best friend  in an advertisement is counter-productive.
Packaging, seen as a reflection of the quality of the “real  product, is considerably more
important in Asia than in the U.S., where there is a tendency to focus on the contents which
“really count.”� Many cultures observe significantly greater levels of formality than that
typical in the U.S., and Japanese negotiator tend to observe long silent pauses as a speaker’s
point is considered.

Cultural characteristics as a continuum. There is a tendency to stereotype cultures as

being one way or another (e.g., individualistic rather than collectivistic). Note, however,
countries fall on a continuum of cultural traits. Hofstede’s research demonstrates a wide
range between the most individualistic and collectivistic countries, for example—some fall in
the middle.

Hofstede’s Dimensions. Gert Hofstede, a Dutch researcher, was able to interview a large
number of IBM executives in various countries, and found that cultural differences tended to
center around four key dimensions:
 • Individualism vs. collectivism: To what extent do people believe in individual
responsibility and reward rather than having these measures aimed at the larger
group? Contrary to the stereotype, Japan actually ranks in the middle of this
dimension, while Indonesia and West Africa rank toward the collectivistic side. The
U.S., Britain, and the Netherlands rate toward individualism.
• Power distance: To what extent is there a strong separation of individuals based on
rank? Power distance tends to be particularly high in Arab countries and some Latin
American ones, while it is more modest in Northern Europe and the U.S.
• Masculinity vs. femininity involves a somewhat more nebulous concept.
“Masculine”� values involve competition and “conquering  nature by means
such as large construction projects, while “feminine  values involve harmony and
environmental protection. Japan is one of the more masculine countries, while the
Netherlands rank relatively low. The U.S. is close to the middle, slightly toward the
masculine side. ( The fact that these values are thought of as “masculine  or
“feminine  does not mean that they are consistently held by members of each
respective gender—there are very large “within-group  differences. There is,
however, often a large correlation of these cultural values with the status of women.)
• Uncertainty avoidance involves the extent to which a “structured  situation with
clear rules is preferred to a more ambiguous one; in general, countries with lower
uncertainty avoidance tend to be more tolerant of risk. Japan ranks very high. Few
countries are very low in any absolute sense, but relatively speaking, Britain and
Hong Kong are lower, and the U.S. is in the lower range of the distribution.

The past year can be characterized by the stiff competition for the mind space of the Indian
consumer. Most of the multinational companies launched their latest products in the Indian
market and the Indian companies were not found very far behind on this front. Past year also
saw deals that were structured keeping in mind the changing buyer profile. Industry’s
perception of the Indian consumer durable market in terms of volume and product attributes
has refined over a period of time. It is not necessary that the products that have been a great
success outside the country will continue to perform well on Indian soil. Indian consumer
looks for value for money in these products apart from some peculiar product attributes.

Decline in the economic growth of the country had a negative impact on almost all of the
industries. Consumer durable was not an exception to this. But in FY02the industry showed
better performance, as per CII's latest ASCON Consumer durables Industry Survey for the
period April-June 2002 over April-June 2001 has indicated an excellent production growth in
the consumer durables sector. The production growth, according to the survey, has followed
an increase in steady demand in the domestic and export markets..
Some of the characteristics of the Indian consumer durable market are listed below:
♦ Since the prices of most of products are in multiples of an average person’s monthly
salary, there is a hierarchy of purchase, with the market being price sensitive.
Correspondingly, any change in government policy regarding levies, import duties and
such, can cause considerable shifts in demand along different segments; these policies
also affect the total domestic demand.

While brand loyalty is an important consideration for consumers, purchases are greatly
influenced by dealers, making a widespread dealer network, a critical factor for success.
Hence a wide range of products covering all or almost all segments, would provide a
manufacturer with economies of scale in distribution as well as enable him to provide strong
after sales service support.
♦ Players to attract the consumer incur heavy promotional expenditures. With the entry of
many MNCs in the industry offering a large number of brands and range of models
jostling for shelf space, wholesale and dealer margins have become important in order to
retain dealer interest in pushing the product. Some companies have been offering dealers
expensive gifts and even travel abroad.
♦ Given the fact that the basic designing of products has plateaued, in order to retain
consumer interest, companies are left with the option of introducing newer features and
better technology, which enhance visual appeal, performance and convenience. Demand
has become technology driven.
♦ Inspite of owning strong brands and well-developed dealer networks, Indian companies
have been forced to revamp strategies in the face of the aggressive marketing launched by
the MNCs which possess the financial clout to operate on the thinnest of margins. An
outcome of those Indian companies such as BPL and Videocon are diversifying into areas
such as power and telecom.
Large volumes and small margins characterize the industry. Thus cash flows are very
important. A typical feature of the industry is the occurrence of high levels of receivables
and loans. In a high interest rate scenario, companies face a liquidity crunch and along with a
slump in demand, face a build up of inventories.
 SIGNIFICANCE OF THE STUDY

The significance of research is not only of fulfill the needs of the course but also to find out the
strategies used by the LG company to attract the customers more towards the company. it is quite
pertinent to know the inclination a d liking of the customers towards a particular company. And
one more significant point in study is that to know about that how LG Company fulfills the needs
of the customers according to the needs of the customers.

The main significance of the study is to know about the reason behind the growth
of the company and to know about the marketing strategies of the company. After study this
topic I can judge the reason of the success of the LG Company. And one of the main
significant of the study is that to know about the product which is provide by the LG
Company to the customers accordingly to their needs.
 REVIEW OF THE EXISTING LITERATURE

Many of researches have been done on the automobile industry as it is the

most dynamic area. Automobile industry is growing very fastly in India. Reasons for
this are high purchasing power or more disposable income, changing life style, govt.
policies, easy loan availability, competition among companies, new entrances through
joint ventures, mergers etc. To understand the consumer’s wants or expectations from
any company these researches have been conducted.

(Batra & Kazmi, 2004)

Analyzing consumer behaviour is perceived as cornerstone of a successful marketing strategy
(Papers4you.com, 2006). Consumer behaviour is ‘the mental and emotional processes and the
observable behaviour of consumers during searching purchasing and post consumption of a
product and service. Similarly Engel (et al, 1990) refers consumer behaviour as the action and
decision process of people who purchase goods and services for personal consumption.

Now if these defining criteria are closely observed, it is evident that analyzing consumer’s
decision making process is the foundation of entire notion of consumer behaviour.

There are four different views related to consumer decision making process and behaviour
(Schiffman & Kanuk, 2004). It is argued that first of them is ‘economic view’ that consumers
are primarily facing imperfect competition and they are always expected to make rational
decision on the basis of assumptions that they are aware of all product alternatives, they can
rank benefits and limitation of each alternative and are able to identify one best alternative.
Second ‘Passive View’ is absolutely opposite to economic view and suggests that consumers
are irrational and impulsive as they are submissive to self-centered interests of marketers and
got influenced by marketing tools. Similarly third, ‘ Emotional View’ is related to perceive
consumer’s decision making based on their emotional association or feeling about some
products and services. For instance, a person loosing red colour specific pen neither go for
rational decision by evaluating alternatives ( economic view) nor will the person get
influenced by marketers ( passive view). Rather the person will try to purchase any pen
closely resembled with his favourite possession. Fourth and arguably most acknowledged
view is ‘Cognitive View’ where consumers are considered as “thinking problem solver’
which are receptive as well as actively searching for the products and services that can fulfil
their need. Consumer’s behaviour under this view is based on information seeking and
processing attributes usually directed by a goal. For instance, buying a tooth paste from shop
can have a certain goal of choosing product that can taste good (Papers4you.com, 2006).

Despite of critiques for each viewpoint, it can be considered a valid argument, that all four
types of decision making behaviour exist and provide marketer guidelines to analyze
consumer accordingly.

Based on general perception about most acknowledged and common ‘cognitive view’, Batra
& Kazmi (2004) asserts broader stages of a consumer’s decision making process that includes
problem identification (feeling need of a new car), information search ( on internet and
showrooms), evaluation of alternatives (comparing brands, for instance’ on basis of repute
and features), outlet selection and purchase ( purchasing selected item) and post-purchase
action (satisfaction or dissonance).

The discussion may be concluded on the notion that no matter which view point out of four
discussed above is common; it is an imperative fact that marketers have to realize existence
of all of them to analyze consumer behaviour effectively.
It has been recognised that eco-efficiency improvements at production and product design
level can be significantly reduced or totally negated by rebound effect from increased
consumption levels. In line with this problem factor 10 to 20 material and energy efficiency
improvements have been suggested (Factor 10 Club 1994; Schmidt-Bleek 1996; Bolund,
Johansson et al. 1998; Ryan 1998). The improvements, however, if not carefully done, may
still lead to rebound effects through changes in resource prices.
As a potential solution to the factor 10/20 vision, system level improvements have to be
made, contrary to redesigning individual products or processes.

(Weterings and Opschoor 1992; Vergragt and Jansen 1993; von Weizsäcker, Lovins et
al. 1997; Ryan 1998; Manzini 1999; Brezet, Bijma et al. 2001; Ehrenfeld and Brezet
2001).
The product service system (PSS) concept has been suggested as a way to contribute to this
system level improvement (Goedkoop, van Halen et al. 1999; Mont 2000). Here the
environmental impacts of products and associated services could be addressed already at the
product and service design stage. Special focus should be given to the use phase by providing
alternative system solutions to owning products.
A number of examples in the business-to-business (B2B) area exist that confirm the potential
of PSS for reducing life cycle environmental impact. It is, however, increasingly evident that
business examples are difficult to directly apply to the private consumer market. Private
consumers, contrary to businesses, prefer product ownership to service substitutes (Schrader
1996; Littig 1998). Even if accepted, the environmental impacts of “servicised products”
offers depend to a large extent on consumer behaviour.
To address this problem, either behavioural or service system design changes are needed.
Changing human behaviour and existing lifestyles contributes to the vision of sustainable
development, but at the same time, it is an extremely difficult and time-consuming process. A
potentially easier way is changing the design of the product-service system to reduce
behavioural pitfalls. In order to change system design, it is necessary to understand how
consumer acceptance of more sustainable solutions is formed, influenced or changed, what
are the influencing factors and what are the leverage points for best results with lowest costs.
Understanding consumer perceptions and behaviour in this context is crucial.

CONSUMER RESEARCH IN DIFFERENT DISCIPLINES

A considerable body of literature in a range of different disciplines exists on consumption,
consumer behaviour, and consumer decision- making process. Research in economics,
business, marketing, psychology and sociology domains studies consumer behaviour from
different theoretical premises: “for economists, consumption is used to produce utility; for
sociologists, it is a means of stratification; for anthropologists – a matter of ritual and symbol;
for psychologists – the means to satisfy or express physiological and emotional needs; and for
business, it is a way of making money”(Fine 1997).
For more than a decade now, a range of studies that address environmentally sound consumer
behaviour, e.g. car use, waste sorting, minimisation and recycling practices, have been
conducted. However, few studies evaluated consumer acceptance of the PSS concept – a
consumption based on non-ownership of physical products, see, for example, studies on car
sharing schemes (Schrader 1999; Meijkamp 2000), ski rental and washing services (Hirschl,
Konrad et al. 2001).
One reason explaining the lack of studies in the area could be that, there are still not many
PSS schemes in place to serve as test grounds. Another reason could be uniformity of
research focus. Most of consumer research focused on adopter categories, habits, attitudes
and intentions, rather than on actually measuring the satisfaction level with the service. The
reason is probably that PSS ideas have been promoted by researchers from the environmental
management, marketing, design, and engineering fields, and to a lesser extent by sociologists,
who hold the banner of research in customer satisfaction.
CONSUMER SATISFACTION PROCESS
The paramount goal of marketing is to understand the consumer and to influence buying
behaviour. One of the main perspectives of the consumer behaviour research analyses buying
behaviour from the so-called “information processing perspective" (Holbrook and Hirschman
1982). According to the model, customer decision-making process comprises a need-
satisfying behaviour and a wide range of motivating and influencing factors. The process can
be depicted in the following steps (Engel, Blackwell et al. 1995):
Need recognition – realisation of the difference between desired situation and the current
situation that serves as a trigger for the entire consumption process.
Search fo r information - search for data relevant for the purchasing decision, both from
internal sources (one's memory) and/or external sources.
• Pre-purchase alternative evaluation - assessment of available choices that can fulfil
the
realised need by evaluating benefits they may deliver and reduction of the number of
options to the one (or several) preferred.
• Purchase - acquirement of the chosen option of product or service.
• Consumption - utilisation of the procured option.
• Post-purchase alternative re-evaluation - assessment of whether or not and to what
degree
the consumption of the alternative produced satisfaction.
• Divestment - disposal of the unconsumed product or its remnants.
Besides the information processing perspective, marketing analyses consumer behaviour by
employing a psychologically grounded concept of attitudes (Balderjahn 1988; Ronis, Yates et
al. 1989; Luzar and Cosse 1998). It is consumer attitudes that are usually named as the major
factor in shaping consumer behaviour and a wealth of studies is available on the topic of how
attitudes can predict behaviour.
INTER -DISCIPLINARITY OF CONSUMER RESEARCH
Different research disciplines diverge in their presuppositions about human nature, factors
influencing consumer behaviour, market response, etc. Therefore, they naturally employ
different research approaches. However, despite that seemingly insurmountable abyss
between disciplines, we see that many research topics and methods overlap, and that there is
no clear-cut line between different domains of consumer research. Many consumption-related
issues are being increasingly addressed from interdisciplinary or multidisciplinary
perspectives.
Many interdisciplinary concepts and factors are of interest for research on consumer
satisfaction with eco-efficient services and PSS. Contrary to the suggestions from many
traditional neoclassical theories, consumption patterns are very flexible and prone to various
influences. Today consumer behaviour is increasingly dynamic as the choice of alternatives
increases with the growth of global markets. The complexity of the decision- making process
and a large number of influencing factors suggest that changing consumer behaviour towards
more sustainable consumption is a challenging process, which requires coordination at
individual and societal level.
The area of PSS and eco-efficient services is still developing. Further efforts are required in
order to understand relations between the functional and emotional needs of customers.
DIFFERENT LEVELS OF COMPLEXITY
When evaluating satisfaction with a product, customers initially assess tangible features of
the product. In the service context, the features, though observable, are considerably less
tangible and are thus more difficult to assess. A product service system comprises four
components (products, services, infrastructures, and networks), rendering the evaluation
process of consumer satisfaction even more complex (Mont 2000). Here the part of the
system, with which the customer comes into direct contact, is larger than in the case of a pure
product or service, which has implications for customer evaluation process. In the case of
PSS or eco-services, customers are exposed to both dimensions: product and service. In
addition, due to closer relations with the service provider, customers can even become
exposed to infrastructure and networks that support PSS delivery. Therefore, in the PSS
context, an evaluation of all four PSS components becomes relevant:
• Product evaluation is conducted by assessment of products or technologies.
• Person-based or other types of services (technical, information and knowledge
services)
that are included into PSS may be evaluated.
• Infrastructure can be evaluated when the customer comes into contact with enabling
supporting technology, or by evaluation of ambient conditions, spatial layout or by
evaluating signs and artefacts of the PSS.
• Networks, are not usually exposed to the customer, but in some cases may be
evaluated
when they come into contact with customers.
 • RESEARCH FRAMEWORKS AND METHODS
A great variety of methods and frameworks for understanding and evaluating consumer
acceptance and satisfaction are used in different disciplines. The study has discussed the
following frameworks: Kano model of customer satisfaction, the Innovation diffusion of
Rogers, the service quality model of Grönsroos, and SERVQUAL model by Parasuraman.
The study has also surveyed a range of tools used for evaluating and measuring consumer
satisfaction. These included surveys, in-depth interviews, focus group interviews,
observations, mystery shopping, and psychographic portrait of customers. A number of
drawbacks and benefits pertaining to the tools have been pointed out and discussed. Both the
research models and the tools, while diverse to a different extent, were found to be useful for
application in the PSS research area.

The environmental impacts of ever increasing consumption throughout the world have been
recently recognised. Many solutions have been proposed to combat the rising levels of
consumption. One of the concepts suggested as a potential solution to reduce consumption
levels is the concept of product-service systems (PSS).
The concept proved to be viable in the business-to-business context. However, in the private
consumer markets, it has been less successful, both in terms of economic viability and
environmental impact reduction. User behaviour has been named as the primary reason for
this situation.
To address this problem, either behavioural or service system design changes are needed.
Changing human behaviour and existing lifestyles contribute to the vision of sustainable
development, but it proves to be an insurmountable task over a short period of time.
Alternatively, changing the design of product-service system to reduce the behavioural
pitfalls could be a potentially easier way towards sustainable development. Changing system
design requires understanding how consumer acceptance of more sustainable solutions is
formed, influenced or changed, what are the influencing factors and what are the leverage
points for the best results with lowest costs. Understanding consumer perceptions and
behaviour in this context is crucial.
However, the consumer decision-making process is much more complex and intricate than
just a simple decision about shifting from owning a product towards paying per use of it.
Throughout this study we demonstrated that products are not seen purely for their functional
features, but rather products are complex combinations of various attributes, which, together
with functionality, also bring status, serve as a key to a certain social class, reinforce self-
esteem, and much-much more.
Therefore, the goal of this study was to take a step towards a better understanding of the
complexity of the phenomena we are aiming to change. We did that by looking at how
different disciplines perceive the consumption process in general and the consumer decision-
making process in particular. We saw the wealth of theories and frameworks being developed
trying to solve this puzzle. We then looked closer at the potentially most promising models,
which could prove useful in understanding the consumer decision- making process in the
context of ownerless consumption.
We also found some useful tools, which can be employed for collecting information about
and from consumers. Identified frameworks and tools were then evaluated for suitability in
the PSS context. We also provided some suggestions and examples for how several presented
models could be operationalised in the PSS context.
Some important lessons were learned from this study:
• The consumer is a moody creature – swinging between rationality and emotional
behaviour.
• All disciplines we looked at addressed consumption from some perspective. This
perspective may be unique to this discipline, or may share common premises with
other
disciplines. Cross- fertilisation and learning is the key to success.
• The challenge is not in the availability of analysis tools, but in analysis frameworks,
which would allow us to speak the same language as our system and understand it
better.
• We can probably employ just one tool to measure customer satisfaction with our
system.
But it is multifaceted and thus a combination of tools is more promising. PSS is a
system, comprised of products, services, infrastructures, and networks. The
criteria we want to evaluate this system against should include attributes of each
dimension.
PSS is a multi-disciplinary area and initiating system level change will require system
level effort. Researchers with various backgrounds need to be involved in developing
ideas and methods for measuring customer satisfaction with PSS. “Non-social” PSS
practitioners should learn methods of social sciences.
The study of consumption is increasingly enriched by a growing number of contributions.
The purpose of this section is to provide a selective sampling of literature that deals with
issues or methods, which might be applicable for studying the field of product-service
systems. It is far from an overview of how consumption has been studied by different
disciplines. Instead, the intention is to select useful sources and draw methodological and
theoretical lessons, rather than to provide a thorough literature analysis.
This section provides a selective presentation of how consumption and consumer behaviour is
studied and explained by economics, business and marketing studies, social, and
psychological research. The disciplines differ in their presuppositions about the human
nature, influencing factors of consumer behaviour, and market response. They also employ
different research methods, some of which will be described in the following sections.
Despite that seemingly insurmountable abyss between disciplines, we will see that many
research topics overlap, and that obviously there is no clear-cut line between different
domains of consumer research. In addition, a lot of consumption related issues have been
addressed from an interdisciplinary or multidisciplinary perspective. As Ackerman puts it, “a
new interdisciplinary area of research on consumption has emerged in the last 10-15 years,
drawing contributions and participants from sociology, anthropology, history, philosophy,
literature, and marketing - even, on occasion, from economics” (Ackerman 1997).

Figure 2 Disciplines that study consumption and consumer behaviour

3.1 Business and marketing domain
This section provides a summary of the current understanding of consumer behaviour based
on the overview of the existing body of business literature on the subject. Special focus is
given to the formation of consumer needs and attitudes, information processing and the
decision- making process within the purchasing decision. The ultimate goal of this decision-
making process is satisfaction of consumer needs. This section helps the reader understand
different stages in the consumer decision process and distinguish between the notions of
customer acceptance and customer satisfaction. It provides background to the following
sections, which analyse consumption and consumer behaviour from the point of view of
different disciplines.
Business management and marketing are concerned with ways of satisfying and retaining
customers for the purpose of generating profits, improving companies’ competitiveness and
securing market share. Some of the major themes in the business management domain
include studies of customer relationship marketing, which analyses how customer satisfaction
relates to competitiveness and profits, methods for measuring customer satisfaction
(Thomson 1995), and approaches that can help transfer customer satisfaction data into
strategies for improvement of customer relations and their retention (Reidenbach and
McClung 1998), (Johnson and Gustafsson 2000), (Schellhase, Hardock et al. 2000).
The paramount goal of the marketing domain is to understand the consumer and to influence
buying behaviour. One of the main perspectives of the consumer behaviour research analyses
buying behaviour from the so-called “information processing perspective” (Holbrook and
Hirschman 1982). The basic concept is derived from the model of the consumer’s decision-
making process, suggested by Dewey (1910) and adapted by Simon (1955), that includes the
following major steps: problem recognition, search, alternative evaluation, choice and
outcomes (Dewey 1910), (Simon 1955).
1. Need recognition – realisation of the difference between desired situation and the current
situation that serves as a trigger for the entire consumption process.
This process depends on the difference between the desired and the current state of affairs.
Several factors can influence this process: changed circumstances, time, new product purchase,
and consumption that trigger the need for other products. Once a certain threshold of this
discrepancy is exceeded, the need is recognised. However, to trigger the action, the need should
be considered as important and the need satisfaction should be within a person’s resources (e.g.
time, money, etc.).
2. Search for information - search for data relevant for the decision, both from internal
sources (one’s memory) and/or external sources.
The search for information usually begins with the internal search for any sort of information,
memory, or experience with a product or service. The outcomes of this stage depend on the
actual existence of internal knowledge about the subject and on the ability of the individual to
retrieve this information. If the internal search does not produce expected results, the individual
turns toward external information sources. The external searches differ in scale (how
comprehensive the search for information is), in the direction (advertising, brands, in-store
information, information received from sales people, or social contacts) and in the sequence of
the research (brand or attribute processing). The major determinants that influence a search are
product determinants, situational determinants, retail, and consumer determinants. The consumer
determinants comprise knowledge, involvement, attitudes, beliefs, and demographic features.
The extent of the information search depends on the degree of importance of the purchasing
decision to the customer. For example, people seek information more actively than in cases of
more expensive products (Engel, Blackwell et al. 1995). The relevance of product information
presented to consumers also affects the purchasing decision. It has been shown that irrelevant
information weakens consumers’ beliefs in the product’s ability to deliver the outcome and
satisfy the need (Meyvis and Janiszewski 2002).
3. Pre-purchase alternative evaluation - assessment of available choices that can fulfil the
realised need by evaluating benefits they may deliver and reduction of the number of options to
the one (or several) preferred. In this step, a number of alternatives are evaluated and the final
option, which is believed to be able to satisfy consumer need, better than the other options, is
chosen. A number of evaluative criteria, which represent product or service attributes or
particular dimensions of their delivery, are used for the evaluation. The criteria can be functional
or expressive in nature, for example, price, brand name, colour, smell, environmental attributes,
etc., which have different importance to various individuals (Mittal, Ratchford et al. 1990).
Ratchford (1975) posits that consumers may often choose products for the status and image
attributes and less for their functional features (Ratchford 1975).
Differences in product attributes are also reflected in the way the consumer knowledge about a
product can be measured. Functional attributes are more likely to be measured objectively, while
expressive /status/ and image attributes can primarily be measured through subjective
experiences of consumers with products (Park, Mothersbaugh et al. 1994). It has been
demonstrated that these image or intangible attributes are important in customer evaluations,
especially when their tangible features are difficult to evaluate (Olson 1977).
In addition to the choice of criteria, consumers also choose which alternatives they will evaluate.
The set of alternatives for the evaluations process is called the consideration or evoked set.
Research on the evoked set (number of alternatives that are considered in the evaluation process)
has focused on both explaining the process in which close substitutes -alternatives sharing the
same attributes (usually within the same product category, but of different brands) – are being
evaluated and on the choice of alternatives from different product categories - noncomparables,
so called across-category choice alternatives (Johnson 1989), (Park and Smith 1989). The
difference in the choice process between close substitutes and alternatives from different product
categories has been shown. The choice process between close substitutes is a top-down process,
in which consumers start from comparing general information about product categories,
narrowing it down to concrete choices among brands of products (Park and Smith 1989),
(Johnson 1988). The choice process between alternatives from different product categories is the
opposite. It starts from concrete features of alternatives and widens the comparison to more
abstract characteristics, based on which the alternatives are being compared (Johnson 1989).
Knowledge from these studies is useful for analysing consumer acceptance of PSS, because in
the PSS context, the consumers have to compare service alternatives to products, which
resembles comparing non-comparables from different product and service categories. Following
Johnson’s logic, the evaluation in this case will also be a bottom- up process.
The information processing capabilities about product characteristics are shown to depend on
how well individuals are informed about a product, brand and entire product category (Beattie
1982), (Bettman 1979). It is demonstrated that well- informed customers focus more on objective
information and particular product attributes, while less informed customers rely on general
information about the entire product category (Bettman and Sujan 1987) and use more subjective
information and recommendations of social contacts (King and Balasubramanian 1994).
Furthermore, studies report that well- informed customers are willing to pay more for the quality
brand than were lower-knowledge customers (Cordell 1997).
An important part of the pre-purchase alternative evaluation is acceptance - whether the
consumer accepts and believes the information provided and trusts t he sources of that
information.
4. Purchase - acquirement of the chosen option of product or service.
The purchase step is associated with a number of decisions that individuals have to make. Even
if the alternative is already chosen, the purchasing may still not be made, because motivations
and circumstances can change, new information can become available, or there could be no such
alternatives available at that particular place. The decision also depends on when and where to
buy, and/or how to pay for the purchase. Thus, at the purchasing stage, the final decision can be
fully planned, partially planned, or totally unplanned.
5. Consumption - utilisation of the procured option.
After the product or service is bought, consumers can use it directly, in a period of time or could
even abort the consumption process all together. Research distinguishes between sacred and
profane consumption, as well as impulsive consumption.
6. Post-purchase alternative evaluation - assessment of whether or not and to what degree
the consumption of the alternative produced satisfaction.
The result of this step can be either satisfaction or dissatisfaction. Satisfaction is the result of a
post-consumption evaluation if a chosen alternative met or exceeded expectations of the
customer.
According to Oliver’s expectation-disconfirmation model, consumers have three levels of
expectations about the product or service performance: equitable performance (what the
customer has to receive in return for money and effort spent), expected performance, and ideal
performance (Oliver 1980). The model states that individual’s expectations are either confirmed
if a product performs as expected, negatively disconfirmed when the product
performs more poorly than expected, or positively disconfirmed if a product performs better than
expected. A negative disconfirmation results in dis satisfaction, and consumption of the product
is likely to be discontinued. Confirmation or positive disconfirmation results in satisfaction and
the continued use of the product or service.
7. Divestment - disposal of the unconsumed product or its remnants.
Divestment became a focus of customer research relatively recently because of growing
environmental concerns. Most of the research has been focusing on final disposal and recycling,
but recently the secondary use of a product, such as reuse and remarketing, is gaining more and
more attention.
Besides “information processing perspective” presented above, marketing analyses buyer
behaviour by employing a psychologically grounded concept of attitudes. Attitudes are usually
named as the major factor in shaping consumer behaviour and a wealth of studies is available on
the topic of how attitudes can be used to predict consumer behaviour (Balderjahn 1988; Ronis,
Yates et al. 1989; Luzar and Cosse 1998). Katz’ functional theory of attitudes explains the role of
attitudes in shaping social behaviour (Katz 1960). People form attitudes toward products, brands,
advertisements, stores, themselves, and other people based on four underlying reasons: utilitarian
function (based on rewards and punishments), value-expressive function (consumer’s central
values or self- concept), ego-defensive function (serves to protect the person from internal
feelings of threat), and knowledge function (need for order, meaning, and structure). Underlying
dimensions of attitude include: affect (feelings), behaviour (do), and cognitions (learning and
beliefs). These dimensions can be combined into three hierarchies of effects models, which try to
explain a different kind of consumer decision-making process. Consumption plays a central role
in economic theory. The most popular theories and models in economic consumer research
portray consumers as somewhat passive rational decision-makers and assume that well-defined
and insatiable desires for goods and services drive consumer behaviour in the market. Traditional
neoclassical economists posit that these desires are not affected by culture, institutional
frameworks, social interactions, or the consumption choices and lifestyles of their social
contacts. Furthermore, these desires or preferences for certain goods are stable by nature and
consumers maximise their own utility in the world of perfect information and market
competition. They identify three major influencing factors that affect consumption - prices,
incomes, and personal tastes. As personal tastes fall outside the realm of economics, most often,
traditional economists restrict themselves to the role of income and prices in determining
consumption choices.
Other presuppositions of economic theory of consumer demand are that desires are not
diminishing as more of them are satisfied and that the origin of desires is in the consumers
themselves. In response to these traditional views, Galbraith argued that we need to realise that
there are limits to desires and that expressions of these desires in specific want s are created by
industrial systems, implying that consumer sovereignty is an empty concept (Galbraith 1958).
Here he implies that only physiological needs have limits. He critiques the present consumer
societies, which exploit the fact that psychological needs are insatiable, and which employ great
amount of resources to discover and create urge for more and more desires, all in order to sustain
the growth drive of indus try.
After Galbraith, the narrow scenario of reality drawn by neoclassical economists has been
heavily criticised on several grounds and a shift towards new foundations in microeconomics has
taken place (Lancaster 1966), (Lancaster 1966), (Lancaster 1971), (Michael and Becker 1973). A
modern consumer theory regards consumers as full members of the market who create their
utility in the context of the household. The fundamental prerequisite of this approach is that
goods and services are simply inputs to the consumption process, and their utility is being
extracted by consumers, who spend time and other resources, in the household. The notion that
needs and outcomes is really what consumers want is at the centre of this new approach. Needs
ma y be fulfilled by putting market-provided goods through consumption process, in which time
and skills of the consumers are employed. The end result could be a great variety of ways
consumers can produce utility. This vast amount of alternatives makes the consumer decision
process a complex task, which consumers face every day. Taking into account the concept of
bounded rationality with lack of information and cognitive limitations, it is clear that consumers
cannot be efficient in their choices and that neoclassical economics failed to provide sufficient
explanation of consumption processes.
A different approach to the consumer decision process comes from the studies by prominent
economists who explored the effects of tastes and preferences on consumption choices
(Scitovsky 1992), (Becker 1996). It is been argued that life would be impossibly complex if we
were to go through the entire decision- making process every time we are faced with a choice. It
is suggested instead that our lives are deeply routinised and the decisions about familiar daily
situations are made automatically, as a matter of habit. Habits are formed based on changes in
tastes, and our preferences depend on experiences in past consumption. This discussion stems
from the psychological learning theory, according to which habits are formed in the process of
continuous reinforcement of influencing factors. Once people are satisfied with their choice and
situation, their behaviour becomes routinised and they do not tend to search for new solutions,
until new signals and influences come that can trigger the search for better alternative.
These ideas built the foundation for an extensive debate on economic implications of habits
(Pollak 1970), (von Weizsäcker 1971). Economists suggested looking at individual costs as an
explanation of the habitual behaviour. Stigler and Becker (1977) explain stability of habits with a
certain capital, consisting of skills, information and experiences, that was acquired during
consumption of a particular object or service. Triggers for change reduce this accumulated
capital (Stigler and Becker 1977). This discussion is interesting from environmental point of
view as well, as routines and habits often offset sustainable patterns of consumption.
 OBJECTIVES OF THE STUDY

 To find out the marketing strategies used by the company.

.
 Comparative study between LG and other competitors.

 Find out the present position of the company in the market.

 Consumer preference towards the products of LG.

 Find out the reason behind the growth of LG Company.

 RESEARCH METHODOLOGY

Research in common sense refers to search for knowledge. In fact, research is an art of scientific investigation. I also
is considered as a movement, a movement from known to unknown.

According to Clifford Woody research comprises defining and redefining the problems; formulating hypothesis or
suggested; collecting, organizing and evaluating data, making deductions and reaching conclusions; and at last
carefully testing the conclusions to determine whether they fit the formulating hypothesis.

The purpose of research is to discover answers to questions through the application of scientific procedures. The
main aim of the research is to find out the truth which is hidden and which has not been discovered yet.

Research Methodology

Research Methodology is a way to systematically solve the research problem . It may be understood as a science of
studying how research is done scientifically. In it we study the various steps that are generally adopted by a
researcher in studying his research problem along with the logic behind them.

For example, an architect, who designs a building, has to consciously evaluate the basis of his decision, i.e. he has to
evaluate why and on what basis he selects particular size, number and location of doors, windows and ventilators,
uses particular materials and not others and the like.

Similarly, in research the scientist has to expose the research decisions to evaluation before they are implemented. In
the same sense way, I also tried to specify very clearly and precisely what decisions I should select and also in the
manner so that they can be evaluated by others also.

Methodology has been divided into following sections:

 Research Design

 Sample Design

 Data Collection

Research design
After formulating the research objectives, the next step is to select the suitable research design. A research design is
the arrangement of conditions for collection and analysis of the data in a manner that aims to combine relevance to
the purpose with economy in procedure. I n fact, it is the conceptual structure within which research is conducted: it
constitutes the blueprint for the collection, measurement and analysis of data.

There are different research designs like:

 Research design in case of exploratory research studies

 Research design in a case of descriptive & diagnostic research studies

 Research design in case of hypothesis – testing or Experimental research studies

In this research work Analytical research design has been used. Analytical research study determine the frequently
with which something else.

SAMPLE DESIGN

Examining the entire universe accurately is desirable, but practically it is impossible because of time and money
constraints. In such a case sampling is the only technique.
As such a sample design is need to be prepared for obtaining a sample from a given population. Sample Design
needs to be determined before data is collected. It includes the following:

• Sample unit: The sample used in the study includes the customers of LG Products.
• Sampling size: Convenient Sampling are used to get the response from the different segment of
customer having sample size of 35 respondent.

DATA COLLECTION

The data collection is the gathering of needed information for making fruitful decisions that helps the successful
compilation of the project work. The Project calls for collection of both primary and secondary data.
In present work, both types of data are collected for achieving the objectives of the research study.

• Primary Data: These are those that are collected afresh for the first time, and thus happen to be original in
nature.
1. Questionnaire Method
2. Direct Interview Method
3 Observation Method
The main tool will use the questionnaire method. Further direct interview method, where a face to face formal
interview will be taken. Lastly observation method has been continuous with the questionnaire method. As one
continuously observed the surrounding environment works in.

• Secondary data:

Internet
Business Magazines
Newspapers
 COMPANY PROFILE

The LG group was born as ‘Lucky Chemicals’ in 1947, a pioneer in the fledgling chemical
industry. With a pioneering spirit, founder chairman In Hwi-koo planted the seed of industry in a
barren land. The seed grew into a dream factory for hope. During the 1950’s amidst the ruins of
the Korean war, the ‘Lucky’ brand emerged as the representative brand of Korea, offering
dreams and joy to the impoverished Korean economy. LG was the first Korean company to make
cosmetics and to enter the synthetic resins industry.

LG established ‘Gold star’ in 1958, opening the door to the electronics industry in Korea. Since
developing Korea’s first radio in 1959, LG Electronics has pioneered and led the Korean
Electronic industry for over four decades .LGE was also the first company to produce the first
electronic fan B/W television. In 1960’s with the launch of a national economic development
plan LG emerged as the leader of Korean industrial growth.

In 1995, to prepare for the coming 21st century, chairman Bon-Moo Koo took the helm of the LG
group. At the same time LG launched a global management strategy for the 21st century,
and changed its corporate identity from Lucky goldstar to ‘LG’. Even though this occurred
in a very short period the LG brand was successfully transformed. LGE now meets the worlds
customer with LG brand. LG is known as a premium quality brand with more useful functions
and products popular for their superior.

LG ELECTRONICS- CORPORATE PROFILE

LG GROUP
The US $73 billion LG group is one of the world’s top conglomerates today, having established
its supremacy in diverse fields ranging from electronics, chemicals etc., to trade and services.

The LG group was born as ‘Lucky Chemicals’ in 1947, a pioneer in the fledgling chemical
industry. With a pioneering spirit, founder chairman In Hwi-koo planted the seed of
industry in a barren land. The seed grew into a dream factory for hope. During the 1950’s
amidst the ruins of the Korean war, the ‘Lucky’ brand emerged as the representative brand of
Korea, offering dreams and joy to the impoverished Korean economy. LG was the first Korean
company to make cosmetics and to enter the synthetic resins industry.
LG established ‘Goldstar’ in 1958, opening the door to the electronics industry in Korea. Since
developing Korea’s first radio in 1959, LG Electronics has pioneered and led the Korean
Electronic industry for over four decades .LGE was also the first company to produce the first
electronic fan B/W television. In 1960’s with the launch of a national economic development
plan LG emerged as the leader of Korean industrial growth.

LG’s success is ensuing the genial alliance between the Korean government and the organization
.The South Korean Government guided the five chaebols into different industries and product
lines.

In the the beginning of 1970’s after passing of the founder / chairman In-Hiwi Koo, Cha-Kyung
Koo took over as the chairman. Under his able leadership, in a decade LG established more than
20 sister companies and schools increased its sales by 36 times, its exports by 90 times and
confirmed its place as Korea’s leading business group. In particular, it opened a central R & D
centre, the first Korean company to do so, which served as a back bone for strengthening
international competitiveness.

By mid 80’s LG grew into a leading comprehensive chemical company. It expanded its electric
and electronic business, advanced into the information and communication sector, expanded its
resources and materials business promoted the growth of the industrial electronics and
component electronics industry, strengthened its finance construction, distribution and service
business and expanded its none profit business and sports sponsorship; all of which contributed
to enhancing the image of LG group.

LG’s period of first change came in the late 1980’s. Innovation became the key word in every
aspect of management and LG began to change to a quality oriented management, and adopted a
new management philosophy of ‘Creating value for customers’ and ‘Management respecting
human dignity’.

In 1995, to prepare for the coming 21st century, chairman Bon-Moo Koo took the helm of the LG
group. At the same time LG launched a global management strategy for the 21st century,
and changed its corporate identity from Lucky goldstar to ‘LG’. Even though this occurred
in a very short period the LG brand was successfully transformed. LGE now meets the worlds
customer with LG brand. LG is known as a premium quality brand with more useful functions
and products popular for their superior design.
LG’s vision is to bring the ‘smiling face” to every home cross the globe

The “smiling” face logo symbolizes five key concepts world, future, youth Human and
Technology. LG believes that an effective combination of these elements for the organization.
LGE has been exploring ways to develop, combine, apply technologies that would customize
products and services to meet customer needs and exceed their expectations LGE is performing
this task by identifying its focus on R & D centers.

Outside Korea, LGE has seven R & D centers in Japan, United States, Ireland and Russia, among
other countries and two R & D centers in Korea. LGE’s long term strategy is to expand its R &
D centre base worldwide ad to invest 8% of the total revenue into R & D.

In its leap 2005 vision, LG put forth the highest management value the ‘Righteous
Management’. Leap 2005 is the strategy for surviving in an era of unlimited competition and
started from a highly charged second innovation.

LG’s business strategy for the 21st century is very aggressive. Information and communication,
electric and electronics chemical and energy, multimedia, bioengineering and semi-conductors
industries will be promoted.

LGE is an integrated electronic goods manufacturer that operates three business divisions :

Multimedia Division

The multimedia division handles a range of multimedia products such as computers, CD-
ROMS, O/A equipment information and communications equipment, optical data devices, audio
equipment, VCR’s cam-corders, printed circuit boards (PCB) and magnetic tapes (MT). At
present LG is placing high priority to new business which included Digital Video Disk (DVD),
personal circuit Boards (PDA), hand help PC’s (HPC), Network computers (NC), and other
related products and hopes to capture the market at full-thrust as these products become more
common in business operations.

Home appliances division

This division is divided into two main product categories with Air Conditioners, washing
machines, refrigerators, microwave ovens, vacuum cleaners etc. in the home appliances category,
and the electronics components category which makes compressors and motors for use in home
appliances.

In 1997, this division posted US $ 3 bn in sales. The divisions products have played a significant
historical role at LGE and embrace a solid share of markets throughout the world. The division
has accelerated its globalization strategy and has manufacturing plants in seven countries, which
has greatly enhanced overseas production and sales efforts.

LGE’s home appliances products are admired in various countries. LGE washing machines hold
the top position in Libya, Jordan, Tunisia, South Africa and in most regions of Asia. The division
also leads market share figures for washing machines in Singapore, Panama, Chile, Bolivia and
over 10 countries throughout Asia and Latin America.

Refrigerator exports have increased tremendously occupying top positions in 11 countries

spanning every region of the world. Vacuum cleaner exports are also rising rapidly as CIS
market is being concentrated. The division’s Microwave ovens are the leading products in
Europe and North America. Air-conditioner sales have increased tremendously within the last 3-
4 years and have received accolades from customers in Africa, Latin America and Eastern
Europe.

Display Division

The Display division produces TV sets (CTV), Colour Picture Tubes (CPT) Colour display
Tubes (CDT) Monitors (MNT), Deflection Yokes (DF) and other display related products and
has grown rapidly amidst large scale market expansion. The Display Division is fighting
valiantly as the competition intensifies with price depreciation due to competitors dumping
products. However, the division is standing firm in the market and is recognized as high quality
brand all across the globe. With the Chinese and Indonesia complexes running full scale
since’96, a vast global production network has been created. In the turmoil of constantly rising
taxes, the division still managed to boost sales by US$ 3.6 billion, a 27% increase over the
previous year.

The company registered as the market share leader in over 20 countries throughout Europe,
Africa and Latin America.
The 60 inch projection TV, Internet TV and Art vision live TV that utilizes distinct Chroma Eye
technology were launched. The company is also pursuing research of Digital TV (DTV) and high
definition TV (HDTV). Production of CTV tubes, of which yearly sales have grown by a average
32% over the past several years. Demand for wide screen TV tubes is also rapidly expanding.
The division developed a 0.39 dot per inch tube for 17 inch monitors and the “Flatron” tube for
17 inch flat wide screens.

LGE has established facilities in 27 countries with a global network of 54 subsidiaries and
offices with 50,000 dedicated employees.

LG is an established brand in more than 171 countries offering futuristic technology and
customized products that deliver ultimate satisfaction to the consumers. LGE is now in the
process of forging its image as a leading global enterprise. The products that are manufactured
globally include multimedia players, Video & Audio products, Home Appliances, Information
systems products, Communication Devices, Display products, Magnetic recording Media,
Electric / Electronic components.

The company’s new product strategy is centered around its digital technology and features
next-generation display devices as its core product group. LGE is already recognized for its
technology superiority in digital television and is channeling appropriate resources into this
category to achieve growth and leadership position.

Going forward, LGE is making great strides towards realizing its vision of becoming the
‘Best Global Company’ in the 21st century. As LGE pursues this vision, it remains committed
to delivering outstanding products and services to customers around the world.

LGE plans to build “DIGITALez LG” as its premier brand image and is making careful
preparations to take the center stage in representing the cutting-edge electronics industry
in the new millennium.

VISION
 The Best Global Company.

The strategic blueprint for the LG Group and each of its member companies as they look
ahead to the year after year when they intend to be among the world’s top
companies in their respective fields.

It seeks to create a more prosperous future while providing the highest level of customer
satisfaction, ultimately transforming the company into one of the best global electronics
manufacturers.

OBJECTIVES

 Achieve gross sales of US$78 billion.

 Secure ordinary income of 6 percent of gross sales.

 Attain a return on investment of 15 percent.

 Build a brand reputation for total satisfaction.

 Create more comfortable, convenient homes electronics companies .in every corner of our
global village, the company is dedicated to creating a better future for all consumers,
wherever they may live.

Globalization

LGE plans to have global regional headquarters in operation, as result, LGE hopes to raise its
overseas sales by US $ 606n, or 80% of its total sales and increase its overseas production to
70% of its total production.

Acquiring promising differentiated technology entails beating the competition on gaining a

foothold in key industries of future where holding a competitive advantage is feasible.

LG would attract and cultivate leading individuals in the core technology fields and establish R
& D centers at major regional bases around the world and thereby boost technological co-
ordination.
Cultivate HPL’s “High performing leaders

In order to produce early and effective management results great efforts will be made to train
and foster the most promising management graduates. At least 250 subsidiary leaders who are
executive level or higher will be cultivated and trained as specialists on new business
development, M & A, core technology and other areas.

LG Groups presence in India

♦ LG electronics India Limited

♦ LG Software

♦ LG Chemicals

♦ LG Construction

Production Facility

LGEIL set up its 47 acres manufacturing facilities at Greater Noida in April 1998. Today the
factory chuns out washing machines, colour televisions, air conditioners and micro wave
ovens.Refrigerators are externally sourced from Allwyn’s manufacturing facility at Hyderabad.
Currently LGEIL has tied up with Voltas Ltd., to source about 600,000 refrigerators over 3
years.

Voltas will product refrigerators according to the specified standards of design and quality given
by LG electronics. Voltas would increase its capacity of 180,000 units to 250,000 units per year
of which LGE will be sourcing about 80%.

At present, the average Indigenous level in LG products is about 45 percent and it plans to
increase it to 85 per cent in the next couple of years. When it had started the production of air
conditioners, the level of indigenous was a mere 20 per cent that shot up to 90 per cent almost
instantly. CTV’s would also be reaching such levels by the end of the year.

LG’s Production Capacity

Colur TV’s 500,000 units

Semi Automatic washing machines 200,000 units

Air Conditioners 100,000 units

Micro waves 50,000 units

Refrigerators Externally sourced

Manufacturing

At its state of the art manufacturing plant acute cost control has been on the agenda from day
one. Some of the ways used to control costs at the plant are:

a. Full-optimization of resources

b. Smoothening the clock work

c. Raising the efficiently of employees

d. Minimal inventory levels.

At the plant, it is made sure that there is no wastage of material and every thing must keep
moving all the time. Since money has time value, nothing that has hogged money should lie idle
for too long.

Inventory is kept minimal, for which strict guidelines are followed religiously all through the
chain. The plant keeps no more than seven days stock of material from vendors and 15-20 days
of imported parts. Branch offices must have, at the end of every month, just 40 percent of the
requirement for the next month.

Cost cutting has always been a high priority for LG operations around the world. In keeping
with this aim, the company has been trying to achieves much localization as possible, as fast
as possible.

At present the average level of indigenization in LG products is about 45 per cent. The
company hopes to increase that to 85% within the next couple of years or so, thus insulating
itself from exchange rate volatility and crushing costs in general. The challenge is to cultivate
high quality local vendors quickly. When LG first started making Aces in India, the indigenous
component accounted for a mere 20 percent of the value of the final product, but within a few
months, the figure shot up to 90 per cent level.
Since the USP of LG has been high technology, it cannot let any defective product pass through
the gates. Even ensuring that the machines can handle Indian conditions has been top priority for
LG. Every product is put to an Early Life Test (ELT), which subjects of to the misery of 40
degrees centigrade heat for a prolonged period. The defect elimination programmed follows a
statistically optimized process of random sample checks.
Innovation at LG
At LG innovation is a policy. The management’s pet phrases are ‘TPI 50’ and TDR. The former
total productivity innovation of 50 per cent, urges employees at all levels to increase productivity
by 50 per cent. And the latter is the tool that helps to do that–Tear Down Re-engineering, by
which employees, especially at the assembly line, are directed to tear down all processes to the
ground and start afresh by using less tine, more innovative technique and so on. In this manner, it
is believed the company is bringing down costs for the future and through TDR and TPI 50
expects to create significant profits this year.
Engineers at LG don’t say ‘no’ to any idea. If the company has to compete in the long run, it
cannot do so by merely cutting costs. It is innovation that wins the race even in a market as
budget constrained as India.
Performance Review
LG electronic India Pvt. Ltd., has in a very short span of six months achieved a turnover of Rs.
100 cores which is a breakthrough in the Electronic industry. The performance achieved in LG’s
financial projection was commendable as it reached the first Rs. 50 crores in first 1.5 month as
against its initial target of 100 crores in 12 months meeting its annual targets in just 6 months.
In the first year of operation in India LG has achieved the number one position in the frost free
refrigerators in the 300 it and above category and Neuro-Fuzzy segment washing machine. In the
CTV segment LG is No. 4. Moreover it has launched world class state of the art technologies as
PN system and refrigerators, Golden eye series of CTV’s, chaos technology in washing machines
and Air conditioners.
At the end of March’98, the company had secured a market share, above 55% in CTV 37% in
300 liters No. frost refrigerator, and 35% in Neuro Fuzzy washing Machines. This was by far one
of the most impressive performances any company had in its first year of operation.
In 1998, its first complete year of operation in India, it sold products worth Rs. 477 crore The
company for the period Jan-June’99, has recorded a turnover of Rs. 500 crores. Last year in the
same period the turnover was only 200 crores. This is a whopping growth of approximately
150%. Only BPL and Videocon groups have more turnover than LG in consumer electronics and
Home Appliances industry in this period.
Currently LG has a market share of 9%. It has sold 1,80,000 CTV’s in the first six month,
2006, making it the fifth largest players in the CTV market.
In the frost free refrigerator, 300 lt + category, LG is already the market leader with almost 36%
market share, it has sold 16,250 units against a market size of approx 45,000 units in the first 6
months of current calendar year. This is a growth of 31% over last year corresponding period.
In the Direct cool refrigerator segment however the company has only 3% market share because
of capacity constraints due to out sourcing. It has sold 42,000 units in the first six month, which
is a growth of about 330% over last crores pounding period.
In the fully automatic (Fuzzy Logic category) washing machine too LG is the market leader with
37% market share. It sold about 6,600 units against the industry sale of 18,000 units in the first
six months of current calendar year. This is a growth of 92% over cost year corresponding
period.
Overall in the semi automatic washing machine category the company has 12% market share and
a No. 4 ranking. It sold about 41,200 units against the industry sale of 3.45 lacs units in the first
six month of current calendar year. This is a growth of 790% over last year corresponding
period.
In the micro wave oven Segment Company has a 21% market share and a No. 2 overall position.
It sold about 7000 units against the industry sale of 33,000 units in the first six months of current
calendar year. This is a growth of 460% over last year corresponding period.
In the Air Conditioner organized segment the company has a 17% market share and a No. 2
position on overall basis. It sold about 24,200 units against the industry sale of 1.45 lacs units in
the first six month of current calendar year. This is a growth of 410% over last year
corresponding period.
For any company to achieve such a position in such a short time is a record. Amongst the MNC’s
in this industry LG now is the undisputed numerous undo. According to company sources, at LG
it can be said with pride that in 26 months of existence, LG stands at a level that many
companies in this industry have attained in 26 years of their existence.

Product offerings & related strategies

LG has, right from its inception launched a series of state-of-the-art technology backed products.
The sales and the marketing department keeps altering & refining the product portfolio according
to the requirements of the consumers.

LG electronics has the following product lines

i. Colour televisions

ii. Refrigerators

iii. Washing machines

iv. Air conditioners

v. Microwave ovens

vi. VCD players (not all that popular).

vii. LCD Plasma TV

viii. TFTs

ix. Mobile phones

Initially in 1997, the company had launched only 12 models of CTV’s, 8 models of refrigerators
(300 lt + frost free) and 3 models of fully automatic washing machines. Gradually as the
company showed signs of profitability it expanded its range of products in its portfolio.

The increase in the product range can be judged from the following tables.

Colour Television

When LG launched its range of CTV’s, it was caught amidst at least 18 competitors all over
India in the industry. What it needed was a USP to its range of CTV apart from competition.

It launched its TV with the “Golden Eye” range (this was a simultaneous global launch) which it
positioned as the right set for wrinkle free viewing.
With this differentiating strategy, today LG-is at number five position in the CTV market with a
market size of 9.23 percent.

In order to meet the needs of the Indian rural market, LG launched on 15 th August 1998”
sampoarna” television, India’s first TV with a devanagri script on –screen display. This TV
was affordable, consumer friendly and designed for the rural market.

Following are the range of TVs offered:

♦ LG golden Eye.

♦ LG Roving Eye TV

♦ Home Cinema

♦ LG Super Flat wide vision

♦ LG Flatron

♦ LCD Plasma

LG Golden Eye : It is considered to be the world’s first television that provides wrinkle free
viewing. It consists of light sensitive natural algorithms ‘EYE’ and an advanced circuit
developed by LG. The ‘EYE’ automatically adjusts colour, brightness, contrast, sharpness tint
and white balance in response to any change in ambient light conditions. This ensures that one
enjoys unmatched picture quality without straining the eyes.

LG. Philips LCD Co., Ltd. (LPL), incorporated in 1985, is a manufacturer and merchant supplier
of thin-film transistor liquid crystal displays (TFT-LCD) panels. The Company manufactures
TFT-LCD panels in a range of sizes and specifications primarily for use in televisions, notebook
computers, desktop monitors and other applications. It also supplies high-definition television
panels. LPL manufactures TFT- LCDs for handheld application products, such as mobile phones
and personal digital assistants, as well as for industrial and other applications, such as
entertainment systems, automobile navigation systems, aircraft instrumentation and medical
diagnostic equipment. During the year ended December 31, 2006, the Company sold a total of
54.2 million large-size (10-inch or larger) TFT-LCD panels.
LPL operates seven fabrication facilities, called P1, P2, P3, P4, P5, P6 and P7, located in Gumi
and Paju, Korea, and six assembly facilities located in Gumi and Paju, Korea, Naming, China
and Wroclaw, Poland. In May 2006, it entered into an investment agreement with the Guangzhou
Development District Administrative Committee to construct a module production plant in
Guangzhou, a city in southern China, and established its subsidiary, LG.Philips LCD Guangzhou
Co., Ltd., in June 2006. The Company's customers include manufacturers of televisions,
notebook computers and desktop monitors. In 2006, its display panels were included in products
sold by LG Electronics, Philips Electronics, Dell, Hewlett-Packard, Toshiba, Apple and Acer,
among others.

Televisions

The Company's television panels range from 15 inches to 55-inch wide format in size. In 2006,
its principal products in the television category were 32-inch wide format, 37-inch wide format
and 42-inch, wide-format panels. The Company's sales of display panels for televisions were
46.5% of sales in 2006. In March 2006, the Company developed a 100-inch panel for televisions.
LPL employs super-in-plane-switching (S-IPS) technology on certain television panels to
increase the viewing angle. It also applies its over driving circuit (ODC) technology to certain
categories of larger-size panels to increase response time and decrease motion blurring.

Notebook Computers

The Company's display panels for notebook computers range from 12.1 inches to 20.1-inch
wide format in size in a variety of display formats. In 2006, LPL's principal products in the
notebook computer category were 14.1-inch, 15-inch, 15.4-inch and 17.1-inch panels. The
Company's sales of display panels for notebook computers represented 20.4% of sales in 2006.
One of the features of LPL's notebook computer display panels is its side mounting technology,
which shifts the screws mounting a TFT-LCD panel on a display from the front to the side,
thereby allowing for thinner borders or bezels around the display and allowing product
designers to utilize larger screens without increasing a product's overall size.
 Desktop Monitors

The Company's desktop monitor display panels range from 15 inches to 30-inch wide format in
size in a variety of display resolutions and formats. In 2006, its principal products in the
desktop monitor category were 17-inch, 19-inch panels and 20.1-inch panels. In 2006, the sales
of display panels for desktop monitors were 27.4% of sales. In addition to its side mounting
technology, LPL employs its S-IPS technology on certain desktop monitor display panels to
achieve increased viewing angles.

Other Applications

The Company's product portfolio includes small and medium-size TFT-LCD panels for use in
handheld application products, including mobile phones, digital cameras and personal digital
assistants, and large-size panels for industrial and other products, including entertainment
systems, automobile navigation systems, aircraft instrumentation and medical diagnostic
equipment. TFT-LCD panels that are 10 inches and smaller are referred to as small and
medium-size panels, with those smaller than four inches being considered small-size panels. In
2006, LPL's principal products in the other applications category were the seven-inch and two-
inch panels. Some of the panels the Company produces for industrial products, such as aircraft
instrumentation and medical diagnostic devices, are specialized niche products manufactured to
the specifications of its clients, while others, such as industrial controllers, are manufactured by
slightly modifying a standard product design for its other products, such as desktop monitors.
The sales of display panels for other applications were 5.7% of sales in 2006.

LPL competes with Samsung Electronics, BOE-Hydis, AU Optronics, Chi Mei Opto-
electronics, Chunghwa Picture Tubes, HannStar, SVA-NEC, BOE-OT, Sharp and IPS-Alpha.

Sound retrieval system

Front left and right speakers along with a super woofer for a three dimensional audio
effects.
 Market shares in the 3,000,000 units market are :

LG
Others 7%
Onida
9%
Aka i 10%
12% Sony
4%
Philips
6%

BPL
21%
Vide ocon
20% Sa m s ung Thom s on
8% 3%
 LCD PLASMA TV Market Shares

SONY 32 %

SAMSUNG 25 %

LG 30 %

LCD PLASMA TV Market Shares

According the latest survey conducted by ZIARUL Group

Slice
Slice 7
5
6
OTHERS
0.0%
0.0%
13.0%
SONY
32.0%

LG
30.0%

SAMSUNG
25.0%

ii. Refrigerators
In the domestic refrigeration segment there are two types:

a. Direct Cool: These refrigerators cool through the direct contact of air with the cooling coils
bound around the freezer. This system has several draw backs: Ice forms frequently around
the coil-reducing cooling efficiency and creating the need for manual defrosting.
Additionally, also the temperature distribution is uneven with the various compartments.

b. Frost free refrigerator: is designed to overcome the drawback of conventional refrigerators.

Hence the cooling coils are located outside the stroke area. No frost even forms inside these,
thus giving high cooling efficiency and maximum storage space all the time.

LG entered the refrigerator market with 300 lt frost free models. It introduced 8 models initially
and now it has 9 models in the frost free type and 3 in the direct cool type. After establishing
itself as the market leader in the 300 lt plus frost free refrigerators with a share close to 37
percent in 1999, LG is now targeting the direct cool segment which is the fastest g rowing
category among refrigerator in India (nine out of every 10 models of fridge’s sold in India are
direct cool inside). At present its market share in this category is one 3 percent.

In 1999, it launched three new models of DC refrigerators in 175 liter, 210 liter and 250 liter.

LG has the following models of refrigerator available:

i. 3 models in direct cool: 175 liters, 210 liters and 250 liters.

ii. 8 models in frost free: 330 liters, 360 liters, 380 liters 400 liters, 410 liters, 460 liters, 570
liters, 640 liters.

iii. DIOS 730 liter model: Deluxe Intelligent Optimum Silence.

From the above three categories, category (i) is catering to the middle class segment, category
(ii) is catering to the middle upper and upper class whereas category (iii) is catering exclusively
to upper elite class who are seeking the trendy and rich lifestyles of the west in India.
LG’s refrigerators have been positioned as a nutrition preserver via its PN system.

PN system (Preserve Nutrition system) : The PN system comprises the F.I.R. Lamp, the
moisture controller and the Deodorizer. The three work together to counter factors that cause
unpleasant odors, degeneration and staleness of food. This maintaining the natural flavor,
freshness and nutritive value of food.
The unique features of a LG refrigerator are:

 Super cooling system: if one wants to cool lots of food in a short time for a party for
instance), the super cooling systems HI-speed fan will let out cool air much faster and more
powerfully.

 Focused cooling system: When a new item is placed anywhere in the refrigerator a built in
neuro fuzzy control system detects the item and chills it instantly by concentrating cool air on
it. It is the best and the most efficient cooling system for refrigerators.

 Neuro Fuzzy control system: With the help of various sensors and a micro computer this
system provides preferenceal control functions. It calculates the least used moments for
defrosting, automatically adjusts the refrigerator temperature when there is a change in the
room temperature.

 Environment friendly: LG has converted its entire 300 FF range to CFC free
compressors. The CFC (Chloral flour carbons) free gas does not deplete the ozone layer and
does not add to global warming.

 Active carbon filter: Effectively absorbs unpleasant odors from onions, stale milk etc.

 Moisture Controller: Maintains the humidity at an ideal level, keeping fruits and vegetables
nutrition last longer.

Dios Refrigerator (Deluxe Intelligent Optimum Silence) : This 730 lt refrigerator was
launched in August 1999. It is considered to be the first refrigerator of its kind in the country,
DIOS claimed has the world lowest noise level and lowest power consumption.
It is a super premium product launched in the top four metros. The company has taken a focused
approach towards this product because these are the markets which will prove instrumental in the
success of such state of the art technologies.

The target audience is the top end customer who is seeking the trendy and rich lifestyle of the
west in India. Foreign diplomats, NRIs and top executives constitute this segment.

LG is confident that with frost free refrigerators doing well in the Indian market, the future for
such super premium category refrigerators is bright.

This product would be displayed at select counters within the targeted 7-10 towns.
The company feels that the successful campaign of its PN system refrigerators in the FF
segment is bound to have a spillover effect on this new segment. This refrigerator is directly
imported from Korea and the service engineers for this product are extensively trained by a team
from Korea.

The unique features of this product are:

 Worlds lowest noise level

 World lowest power consumption

 CFC free

 Uniform Ice making dispenser with one touch system

 Built in home bar.

 Tempered glass shelves

 Unique electronics temperature control syste

LG Fresh Master

Direct cool refrigerators come under this category. They give more space along with better value
for money. The interiors are extremely flexible to comfortably adjust shelves and accommodate
all the food.

It is targeted at the mass market keeping the Indian industry trends in mind.

Unique features:

 Versatile and convenient

 Unerring efficiency

 Great looks

 Strong compressor for cooling

Market shares in the 2,693,000 units market (no frost + direct cool

iii. Washing Machines

In the washing machine category there are two types of machines :

a. Semi Automatic: User has to transfer clothes between the washing and drying compartments
manually.

b. Fully automatic: washing and drying is done in the same unit.

LG has about 6 models of washing machines available in the market out of which three are fully
automatic and three semis automatic.

The company introduced washing machines in the market in 1998. The company has entered the
semi automatic segment because bulk of washing machines bought is semi automatic. World
over the company does not cater to this category.

LG has a 37 percent share in the market in the fully automatic washing machine market. In the
semi automatic category it has a 12 per cent share.

Product positioning: LG’s washing machine is positioned as machine that cares for the
fabric” via it’s fabricate system.
The technology used in its products in the Chaos punch +3.

Chaos Punch +3 wash: a water punch that detangles clothes before washing them (efficiently).
The punch propels water through every pore of the fabric and ‘+3’ are 3 additional pulsators
(technology used by LG).
LG’s washing machines are available in the following models:
i. ‘Punch wash’ semi automatic : 2 models of 6 kg capacity
ii. ‘Clean master’ semi automatic: 7 kg capacity.
iii. ‘Turbo Drum’ fully automatic: 3 models in 5.5kg, 6 kg and 10 kg.
Fabricate system
LG has introduced this system to its range of washing machines. It is a distinct principle that
helps preserve life of the fabric. Whenever clothes are rubbed against hard surfaces like
agitators to remove dirt, the fabric wears out. Clothes get tangled and are stretched out of
shape. Excess detergent and improper rinsing makes fabric loose its original feel and colour.
The fabricate system has a washing action that creates powerful water currents and a water
Punch, to give clothes a cleaner, more effective and tangle free wash.
‘Punch wash’ semi automatic:
This is the world’s only washing machine with twin tub along with Punch technology.
 Just within 3 months of its launch in May’98, the LG Punch wash became the largest selling
semi automatic washing machine in the 6 kg and above category, in towns and cities across
the country. Since then it has sold about, 94,840 machines.
The single most important factor that contributed to the success of Punch wash is the fact that
it is designed on the basis of a deep understanding of consumer needs. The unique features
of this product are :
 Punch technology: The gushing upward movement of water removes direct effectively.
Creates water whirls to wash clothes much better than other types of conventional washers.
Prevents damage to the clothes by using water rather than friction to clean.
 6 kg-twin tub: This is the first twin-tub washing machine to boast of a 6 kg capacity.
 Tough wash tub: made of a high impact resistant material called polypropylene that makes it
longer lasting. Unique water dynamic pulsator that’s designed to give the cleanest wash.
 Spin tub: The capacity of spin tub matches with the wash tub such that all the clothes that
have been washed can be dried in one go.
‘Clean Master’ semi automatic
This is the India’s biggest front load, tumble wash machine with greater load capacity.
Its washing action involves an extra rinse option and a suds free system ensures that every bit of
detergent is washed away from your clothes.
The unique feature s of this product are:
 Jumbo drum (7 kgs)
 Powerful dual filter
 Economical water consumption
 Low noise level
 Suds free system
‘The Turbo drum’ fully automatic
This washing machine provides with features that are unique to LG. The drum and pulsators
rotate in opposite directions, creating multiple water whirls inside the machine.

The unique features of this product are :

 The turbo drum
 Pulsators
 Triple water punch
 Triple water fall system
 Low power consumption
 4 wash programs.

Market share in the 776,000 unit market (semi automatic + automatic)

iv. Air Conditioners

LG’s air conditioners were launched in phase II in Jan’98. It launched its air conditioners as
“Health Air ACs”
There are two types of AC sold by the company :
a. Split type
b. Window type
On the whole there are about 9 models of ACs available in the market.
Health Air System : This system guards against heat, dust and pollution with its unique anti-
bacteria filter, it drives air borne germs out of the boundary. Its de-odorizing filter does away
with unpleasant odors. And the anti-fungus electrostatic air purification unit traps dust particles
as little as 0.01 microns and even smoke. It’s ‘Chaos’ Logic air flow system creates natural air
currents, and cools in gentle puffs rather than with blasts of world air. Thus it prevents any
unhealthy, abrupt drops in the body temperature.

The unique features of LG air conditioners are:

 Unique air purifying filters: The filtering system utilizes two filters. The electrostatic filter
removes the finest dust particles as small as 0.01 mm and even tobacco, smoke and pollen.
The de-odorizing filter removes unpleasant odors, especially those caused by airborne fungi.
 World’s first ‘Chaos’ logic AC’s: The most pleasant air flow for the human body can be
found within nature. Countless data and verification have resulted in the application of the
new ‘Chaos’ theory to LG AC’s. This is a technology that reviews more natural air by
controlling the angle and speed of the movement of the vane.
Worlds quietest AC’s: To provide a comfortable pleasant and well balanced environment, LG
AC’s utilized a streamlined air fan and a unique design which create smooth air flow from
the air conditioner so that it operates under the lowest noise level with the best structure for
the air path. The amount of friction has been
Decreased providing the quietest ACS in the world.

Following is the range of models:

i. Split AC’s – 1.0T, 1.5T, 2.0T, 2.5T

ii. Window AC’s –0.75T, 1.0T, 1.5T, 2.0T.
iii.
LG is launching the Digital Plasma AC for the new millennium. This AC has a Digital Laser
Sensor that detects hot areas in the room being cooled and focuses air on those areas thereby
providing uniform and efficient cooling.

Digital plasma AC: Air Clean + De-odorization + Allergy Prevention

The unique feature of this AC is:

 Anti-Bacteria filter: It removes dust in the air as well as inhibits bacteria proliferation,
making the indoor atmosphere healthy. LG AC would be 98.5% bacteria free.

 Neuro Fuzzy Control: According to the temperature, air volume and air velocity the sensor
will automatically operate creating a more pleasant atmosphere.

 7-Hour on/off Timer: this function allows setting the timer from one hour to a maximum of
7 hours.

 Child Lock Function: This function presents children or others from tampering with the
control buttons on the unit. All the buttons on the indoor display panel can be locked. The
unit can then, only be controlled by remote.
 Market shares in the 165,000 units market (Retail)

LG
Others 6.1%
13.4%
Voltas
Videocon 18.2%
12.7%

Am trex Carrier
21.2% 28.5%

v. Microwave oven

LG launched microwave ovens in the second phase. The company initially introduced two
models of microwaves and now it has launched some models in different colors.

Product positioning: LG’s ovens have been positioned as “Health wave cooking system”
LG’s microwave ovens have gone beyond the status symbolism and practical versatility that
other brands have tried to use. The market for microwaves was at 65,000 units and this is one
area that the company wants to explore.
Health wave cooking system: LG’s health wave system has “Multiage technology” which
other microwaves don’t have. This feature creates multiple emissions that help to ensure that the
entire dish is cooked amazingly, evenly and fast. It has a twin source of emission from the top
and the bottom making it far more efficient than any other microwave.

Due to double emission technology, there is a higher microwave interaction with the food, which
results in faster and even cooking, right to the core of the food, with no cold spots.

There are two types of models available:

a. Microwave – for general working (Non-grilling)

b. Microwave + Grill + Combination

Unique features of a LG microwave:

 Worlds only one-touch Indian cooking system: The LG health wave has the worlds only
one touch Indian cooking system. All vegetables and dishes can be cooked at the touch of a
single button.

 Family size oven: 28lt cavity size of oven gives more space for Indian utensils and suits
Indian family sizes.

 Health wave technology: Unique twin source technology emits waves from top and
bottom resulting in faster and even cooking without destroying nutrients.

LG has plans to introduce a microwave oven with pre-set Indian menus.

It also plans to launch India’s first Digital infrared microwave. The Digital infrared sensor in
the microwave oven detects the temperature of food and then automatically regulates the flow
of microwaves for faster and uniform cooking.
 DATA ANALYSIS AND INTERPRETATION

Q1. Are you user of electronic products?

Rating Scale Yes No

Customers 50 0

0%

yes
No

100%

Interpretation:
Out of 50 customer 100% customer says that they are using electronic products.
Q2. Do you prefer branded products?

Rating Scale Yes No Can’t Buy

Customers 35 10 5

10%

20%

Yes
No
Can't Say

70%

Interpretation:

Out of 50 customer 70% customer says that they prefer branded products and 20% customers says that they
not prefer branded products and 10% customers says that they can’t buy branded products.
Q3. Which brand do you have?

Rating Scale LG Phillips Samsung Videocon Sony

Customers 35 3 4 5 3

6%

10%

8%
LG
Philips
Samsung
6% Videocon
Sony

70%

Interpretation:

Out of 50 customers 70% customers says that they are using LG product and 85 customers says that they
are using Phillips product and 6% customers says that they are using Samsung product and 8% customers
says that they are using videocon product and 6% customers says that they are using Sony product.
Q..4. Which consumer durable you have?

Response respondent

CTV 40

LCD 10

PLASMA 0

REF 40

WM 30

MW 15

AC 10

45

40

35

30

25

20

15

10

0
CTV LCD PLASMA REF WM MW AC

Interpretation:

Out of 50 customers Most of the customer used CTV and Refrigerator while some customer also used
Microwave and washing Machine.
Q.5 Were you having full information about this brand?
Response Respondent
Yes 40
No 10

20%

Yes
No

80%

Interpretation:

Out of 50 customers 80% respondent having full information while some having not any information.
Q.6. If no, then from where you acquired information ?
Response Respondent
TV Adds 38
Family 2
Friend 2
Newspaper 5
Magazine 1
Relatives 2

2% 4%
10%

4%
4% TV Adds
Family
Friend
Newspaper
Magazine
Relatives

76%

Interpretation:

Out of 50 customers Most of the customer get information from Television and other source of information
are not so much effective.
7. From where you prefer buying consumer durables?

Response Respondent
Exhibitions 5
Co.shoppee 10
Showroom 35

10%

20%

Exhibitions
Co.shoppee
Showroom

70%

Interpretation:

Out of 50 customers buy the consumer durable from show rooms and other from Co-shoppe and Exhibitions.
Q.8. How frequently you change your consumer durables?
Response Respondent
1-3 years 38
3-5 years 6
5-10 year 3
More than 10 years 3

6%
6%

12%

1-3 years
3-5 years
5-10 year
More than 10 years

76%

Interpretation:

Out of 50 customers most of the customer change their durable with in 3 years and while only some change
after more than 5 years.
Q9. What is your priority while purchasing electronic products?
Response Respondent
Feature 15
Price 10
Quality 15
After Sale Service 10

20%
30%

Feature
Price
Quality
After Sale Service

30%
20%

Interpretation:

Out of 50 customers having priority towards quality and feature and some to the price and quality.
Q10. Are you satisfied with your product?
Response Respondent
Yes 48
No 2

4%

Yes
No

96%

Interpretation:

Out of 50 96 % customers satisfied with their product.

Q11. Are you satisfied with proportional schemes of the company?
Response Respondent
Fully satisfied 48
Dissatisfied 2

4%

Fully satisfied
Dissatisfied

96%

Interpretation:

Out of 50 customers 96% satisfied with the proportional schemes of the company.
Q12. Are you happy from the sale features and services being updated?
Response Respondent
Highly satisfied 45
Highly Dissatisfied 5

10%

Highly satisfied
Highly Dissatisfied

90%

Interpretation:

Out of 50 customers 90% customers are highly satisfied with the sale features and services while 10% are
highly unsatisfied.
Q. 13 Are the features projected by the company are the actual features of the company ?
Response Respondent
Yes 48
No 2

4%

Yes
No

96%

Interpretation:

Out of 50 customers 96% customers told that feature are same while 4% says company are giving fake
information.
Q14. Are the product provider produces you after sale services timely?
Response Respondent
Regularly 35
Sometime 10
Not at all 5

10%

20%

Regularly
Sometime
Not at all

70%

Interpretation:

Out of 50 customers70% customers said that they for regularly after sale service and other said that
sometime and not at all.
Q15. Do you frequently change the brand?
Response Respondent
Yes 5
No 45

10%

Yes
No

90%

Interpretation:

Out of 50 customers 90% customers do not change the product 10% says change the products.
Q.16 Do you think the company is taking steps to remove cognitive dissonance ?

Response Respondent
Yes 47
No 3

6%

Yes
No

94%

Interpretation:

Out of 50 customers are agree to accept the companies cognitive dissonance.

Q.17. What attracted you in the advertisement?( PLEASE RATE THEM from 1-3)

Response Respondent
Creativity 25
Brand ambassador 5
Idea of delivering the message 5
Frequency of add 5
Logical reason 10

20%

Creativity
Brand ambassador
10% 50% Idea of delivering the message
Frequency of add
Logical reason

10%

10%

Interpretation:

Out of 50 customers most of the customer (50%) attracted due to creativity and 20% due to logical reason
while others go for brand ambassador etc.
Q.18. Do you remember any advertisement campaign for LG Products?
Response Respondent
Yes 30
No 20

40%

Yes
No

60%

Interpretation:

Out of 50 customers 60% are remind the LG campaign while 40% are not.
Q.19. Please rate on a scale of 1-4 for the following purchase:

Factors 1 2 3 4
Location of Dealerships 10

Location of Authorised service centre 25

Integraty with Salespersons 5

Warranty 5

Quality of product 10

Interpretation

Most of the customer rated to the Location authorised service centre.

 FINDINGS

• After the study of the project I have find that 80% of the customer using LG product.
• And another thing which I have found during the project preparation is that Most of the
electronic customers prefer branded products.
• One of the main things towards customer is that they give priority to the quality of the
product rather than price.
• Nearly 85% customer of LG product is satisfied from the product performance.
• Most of LG product customer is happy from the after sale service provided by the
company
• One of the main factor or we can say that reason behind of the regular growth of the LG
product is that the company continue looking towards the needs of the customer and
accordingly then they manufacture the product.
 RECOMMENDATION

Though LG electronic has done fairly well in the Indian market, but in order to gain a market
share in the long run, certain recommendation are highlighted below based on the analysis
conducted earlier and the conclusions.

• LG should create a mass market image for itself if it wants to achieve its objective to
become the market leader: Even to day after three years of its existence in the market, the
company has a premier image in the consumers mind. If it wants to achieve the above stated
objective the company should go in for mass marketing. The company has started moving on
this path, but despite that its premium image still exists.

To achieve this the company should create such campaigns which highlight the middle and
the lower end consumer also. For products such as the DIOS refrigerator, Flatron T.V. etc, it
should highlight them as premium products for the elite class. Other products such as 14”
CTV or 175 lt refrigerators should target the lower end of the customer.

• LG should concentrate more on the rural markets: Currently sales of the company form a
very insignificant portion from the rural market. It only accounts for about 30 per cent of the
total sales. This is very little considering the vast potential that lies in our country. The
company should consider exploiting the untouched areas of population even less than 50,000.

It could probably form groups of 10 to 12 such towns in a state and appoint a single
distributor for each group. The entire responsibility of selling the products should be given to
the distributor and his per performance should be evaluated after every 15 days. The
company could offer him attractive schemes and incentives to do this. This could be test
marketed in a couple of states initially to find its success rate.

• In order to reap long term benefits, the company should go in for certain honest
schemes : Majority of companies in this industry today are selling their products via
schemes, offers etc., in order to survive in this competitive market. It is quite doubt full that
LG with its policy of “no schemes, no scheming” would be able to do much. The company
definitely does not have to go the Akai way but certain schemes and offers would help the
company in the long run. Since LG believes in “value marketing” it does not have to go in
 for exchange offers where by you get a new washing machine or TV if return the old one.
Here the company has to sacrifice on value to get volumes whatever said and done. Some of
the schemes that the company could opt for is “Buy a refrigerator (300 lt+) and a microwave
and get some rupees off” or “buy refrigerator + washing machine and get the washing
machine at half the price”.

For its international business division the company should take care of the following points:

• Due to lack of expertise in this field in India, the company should recruit professionals who
specialize in this field to fill the gaps.

• There appears to be lack of communication between the PPC department and the export
department for production of goods for exports. As after getting the orders, few orders get
delayed due to no production on time. If this continues LG may loose good orders as a result
loosing out on potential customers
 LIMITATION OF THE STUDY

• This scope of the project was limited to the companies established in bhiwani only. Hence the result and
analysis do not involve the practices and trends of their other cities

• The survey also suffers from the inhibition and unwillingness on the part of company personnel to reveal
any inside information.

• The sample size taken in only 35 and hence will not be able to represent the entire population.

• Respondent were unaware of many terms related to study while asking to them.

• The time duration could not provide sample opportunity to study every detail of the company.
 CONCLUSION

Aft
er analysis the project, researcher can conclude that:
• LG is capturing the more share in the market.
• Other electronic companies are also in good position but they have to look upon weak points.
• People prefer LG product rather than other company product.
• Reason of holding big market share is that LG have equally good range of product for every class of
consumers.
• Other companies and even LG to maintain the goodwill in market must emphasis on marketing
programmed
 BIBLIOGRAPHY

• Books

Kothari C.R., “Research Methodology”, New Age International Publication, New Delhi, 2nd Edition
(2004).
Kotler Philip, “Marketing Management”, Prentice Hall of India Pvt. Ltd., New Delhi, 11th Ed (2000).
Saxena & Rajan, “Marketing Management”, Tata Mc Graw Hill Publication Co. Ltd. , New Delhi, 2002
Edition.

• Newspaper & Magazines -

Economic Times
India Today
Times of India

• Websites Links

www.google.com
www.lgindia.com