A BUSINESS MODEL

Presented By:

Ashish Bansal
NMiMS,Mumbai (India)
OUTLINE
INTERNATIONAL MARKET
OVERVIEW
The consumer electronics industry manufactures and
distributes everything from telephones, stereo components,
televisions, alarm clocks, and calculators to digital cameras,
video cameras, VCRs, and DVD, MP3, laptop PC are also now
part of the industry.

 In 2005, in the U.S. alone, consumers spent more than $75

billion on consumer electronics products, 8 percent more than
in 2004.
HOW THE INDUSTRY BREAKS DOWN
The largest are multinational conglomerates with more than
100,000 employees.
The smallest often have only one office with fewer than 50
employees focused on one product.
 In the middle are manufacturers that offer a range of products
within a certain category, such as speakers and audio accessories.
Industry observers usually break down the market by product
category rather than company size.
 Consumer durables are items that provide a flow of services to a consumer over a period of time.
Examples include new cars, household appliances, audio-visual equipment, furniture etc. The real
level of spending on durables has surged in the last eight years.
SOME OBSERVATIONS
Among the explanations are:
 Falling prices for many durable products – arising from rapid
advances in production technology and the effects
of globalization which means that we can now import many of
these durables more cheaply from overseas
 Low interest rates which have encouraged people to spend more
on “big ticket items” – there has been a surge in demand for
consumer credit
 Strong consumer confidence and borrowing levels. The demand
for consumer durables is more income elastic than for non-
durables which are usually staple items in people’s monthly
budget.
GLOBAL PLAYERS
 Major Players
Top 10 Major Players, by 2005 Revenue

Rank Company Revenue ($M) 1-Year Change (%) Employees

1 General Electric Co. 148,019 –2.2 307,000

2 Siemens AG 90,670 17 461,000

3 Matsushita 81,298 13.0 334,752
4 Samsung Electronics Co., Ltd. 78,250 44.2 123,000

5 Sony Corp. 66,912 –7.2 151,400

6 Microsoft Corp. 39,788 8.0 61,000
7 Royal Philips Electronics NV 35,972 –12.4 231,161

8 Sharp Corp. 23,616 10.5 46,751

9 Sanyo Ltd. 24,174 –1.4 96,023
10 LG Electronics Inc. 23,542* 39.4* 66,614*
*2004 figures.
Sources: Hoover's; WetFeet analysis.
KEY FINDINGS
 SOME KEY FINDINGS
 Asia-Pacific region is the most lucrative area for the consumer electronics
industry, as most of the markets are still untapped.
 MP3 players continue to drive the audio market worldwide. 
 Wi-Fi networking is expected to become a key enabler for the delivery and
redistribution of content in homes, particularly for retail consumer electronics
hardware.
 Mobile camera phone market has emerged as the single largest market for
image sensors, surpassing the entire consumer electronics segment,
including digital still cameras worldwide.
 The strongest growth in consumer electronics segment is expected to come
from China by 2010, as the demand for consumer electronics is rising with
the rapid pace of economic development and low cost consumer electronics
manufacturing.
 On the back of this strong demand, China will become the second largest
market for consumer electronics, after US.
CONSUMER APPLIANCES & ELECTRONICS
RETAILING IN CHINA
The world’s fastest growing large economy, and foreign investors
and market
High Competitive market, margins very tight and, until recently, the
available market was shrinking.
Presence of Rural rebate scheme for reduced price goods to rural
consumers has made the available market a lot bigger though, over
the past few years.
Official estimates for the CNY period show sales of household
electric appliances grew by 17.8% over the same period in 2008.

*CNY : Chinese new

URBAN VS RURAL- CHINA
CHINA DEMOGRAPHICS
0-14 years: 20.1% (male 142,085,665/female
125,300,391) 
15-64 years: 71.9% (male
491,513,378/female 465,020,030) 
65 years and over: 8% (male
50,652,480/female 55,472,661) (2008 est.)
GLOBAL CONSUMER
BEHAVIOUR
Changing trends in women
 A Consumer Electronics Association (CEA) study has found that
women are more comfortable with technology than ever before,
are heavy users of CE products, and have a major influence on
technology purchases for the household.
 Female customers are distinct in their beliefs about technology, in
what they desire from consumer electronics, and in the way that
they shop for these products, the study indicated.
 Women are less enamoured of gadgets and technology for its own
sake.
 But the CEA study indicated that women are more open to advice,
and when shopping they focus on portability, functionality,
reliability and simplicity.
TOP 5 EMERGING
NATIONS
BRAZIL
CHINA
INDIA
MEXICO
SOUTH AFRICA
HIGHLIGHTS
The Top 5 Emerging countries contributed $37.6 billion to
the global consumer electronics industry in 2007, with a
CAGR of 10.9% between 2003 and 2007
In 2012, the market is forecast to have a value of $51.2
billion, with a CAGR of 6.4% over the 2007-2012 period.
China is the leading country among the Top 5 emerging
nations, with market revenues of $21.6 billion in 2007.
GLOBAL INDUSTRY POSITION
Support voluntary, market-oriented programs and initiatives,
including industry-led standards, which highlight and sustain
energy efficiency in the electronics industry
Continue to work cooperatively with governments in the
development of energy efficiency initiatives that complement
and support voluntary approaches and continued innovation,
expanded consumer choice, and enhanced product functionality
 Oppose government-imposed approaches that stifle
innovation, reduce consumer choice, and limit product features
and services
OVERVIEW OF INDIAN MARKET
 Pre liberalization dominated by a few domestic players like Godrej,
Allwyn, Kelvinator, and Voltas
 Post-liberalization many foreign companies have entered into India,
dethroning the Indian players and dominating the market
 Consumer durables sector is one of the fastest growing industries in
India
 LG and Samsung, the two Korean companies have been maintaining
the lead in the industry with LG being the leader in almost all the
categories
 The rural market is growing faster than the urban markets but
penetration level is very low
 CTV segment is expected to the largest contributing segment to the
overall growth of the industry
 The rising income levels, double-income families and increasing
consumer awareness are the main growth drivers of this industry
INDUSTRY CLASSIFICATION
 The consumer durables industry can be broadly classified as
consumer electronics and consumer appliances
 The consumer appliances category can be further segmented as
white goods and brown goods
TOWNS
 The existing size of this sector stands at an
estimated USD 4.5 Billion with organized
retailing being at 5%

Source:http://www.valuenotes.com/one-time/IndianRetailSector_11oct06.asp?ArtCd=86179&Cat=&Id
RETAIL FORMAT IN CE MARKET

Sourse:http://www.valuenotes.com/one-time/IndianRetailSector_11oct06.asp?ArtCd=86179&Cat=&Id
 DEMOGRAPHICS OF INDIAN
MARKET
Demographic Profile of India

Source:http://www.valuenotes.com/one-time/IndianRetailSector_11oct06.asp?ArtCd=86179&Cat=&Id
INCOME GROUPINGS AND
OWNERSHIP
(OWNERSHIP PER HOUSEHOLD)

Source: The Great Indian Market August 9, 2005 Results from the NCAER’s Market Information Survey of
Households
DEMAND OF CONSUMER
DURABLES
(FIGURES IN '000)

Source: The Great Indian Market August 9, 2005 Results from the NCAER’s Market Information Survey of
Households
PENETRATION OF CONSUMER
DURABLES (NUMBER OF HOUSEHOLDS OWNING GOODS PER '000
HOUSEHOLDS)

Source: The Great Indian Market August 9, 2005 Results from the NCAER’s Market Information Survey of
Households
RURAL DEMAND- CONSUMER
DURABLES
(% OF ALL INDIA)

Source: The Great Indian Market August 9, 2005 Results from the NCAER’s Market Information Survey of
Households
BUYING BEHAVIOR –CONSUMER
ELECTRONICS
Price is a significant influence on purchase behavior but is not
always the most important factor.
Consumer age, brand, type of product, current product
diffusion, and lifecycle stage of a product must be viewed in
concert with price to understand purchase process behavior.
For example, buyers of certain products, including game
consoles, high-definition DVD players, DVRs, and photo
printers, are more likely to consider product features and
capabilities over price.
 BUYING BEHAVIOR (Contd)
Endorsed by opinion leaders – excellent reviews in
magazines, TV shows, on blogs, by word of mouth
by existing consumers, etc
High on quality – brand name of apple assures on
quality, especially sound and music clarity as well
as product durability
Associated with the ‘aspirational group’ for a
consumer – with a trend setting product like an
iPod, it has become a symbol of status and ‘cool’
and hence become a must-have to fit in with the
popular groups
 TRENDS IN TERMS OF
TECHNOLOGY AND PRODUCTS –
Lower duties, cheaper technology and strong competition with
INDIA prices
low entry barriers ensure competitive
 Increase in brand and product choice
Value-for-money pricing lead consumers to upgrade – from
corded to cord-less phones, from conventional CRT to flat-
screen or plasma/LCD TVs, from 15- to 17-inch computer
monitors, from 1- to 3-megapixel cameras, from monochrome
to colour phones, etc
Huge boom in mobile phone purchases with high
penetration even in rural markets (launch of value for
money, no frills, reliance phones gave an impetus to
rural penetration)
With internet penetration also increasing along with
growing number of service providers, the sales of
modems, routers and accessories has gone up.
 CONSUMER BEHAVIOUR TRENDS
Shift from buying predominately during Diwali and other festive seasons to year round
purchasing
Consumers more aware of brands
Consumers more conscious of style, looks, technical specifications
More research is done on technically advanced gadgets, but there has also been an
increase in impulse buying with increasing disposable incomes, competitive prices and
wide choice.
KEY PLAYERS
STATISTICS
SWOT ANALYSIS
Strengths
1. Presence of established distribution networks in both urban and rural areas
2. Presence of well-known brands
3. In recent years, organized sector has increased its share in the market vis
a vis the unorganized sector. 
Weaknesses
1. Demand is seasonal and is high during festive season
2. Demand is dependent on good monsoons
3. Poor government spending on infrastructure
4. Low purchasing power of consumers
SWOT ANALYSIS (CONT) ..
Opportunities
1. In India, the penetration level of white goods is lower as
compared to other developing countries.
2. Unexploited rural market 
3. Rapid urbanization
4. Increase in income levels, i.e. increase in purchasing power of
consumers
5. Easy availability of finance
Threats
1. Higher import duties on raw materials imposed in the Budget
2007-08
2. Cheap imports from Singapore, China and other Asian countries 
ENTRY BARRIERS
ENTRY BARRIERS (CONT)

Restricted FDI entry

China and Korean competitors
Cultural Barriers
Heavy tax duties on exported goods
Competition through grey market like Alpha
Lack of information
VISION
“To offer the most technologically advanced, reliable
and Greener electronic products and related
services of the highest quality to individual and
institutional consumers in the country and make these
products and services available at the most fair and
competitive prices, creating and sustaining the long-
term goodwill of the consuming public.”
MISSION
“To constantly monitor international
developments in electronic products and
initiate efforts to source them to meet present
and emerging requirements in the market and
to delight and deliver beyond the
expectations of the consumers.”
MISSION OF THE FORMAT
“To continuously enhance the competency
level of personnel through training and
motivation, to expand the sales and network
to serve a larger segment of consumers and
to render the best after-sales service
possible.”
SHORT TERM STRATEGIC
OBJECTIVES
To promote and deliver energy efficient “greener “ products to consumers and
businesses over time

To differentiate from the competitors with superior product quality, service and
unmatched shopping experience

To Increase the awareness of the store in the region.

 To Increase the footfalls in the store.

To satisfy the unmet needs of the customers
LONG TERM OBJECTIVES
To become a market leader through:
 Increased customer loyalty

Exceeding customer expectations

Supreme Vendor relations

To expand to other potential areas

To support and sustain the greener concept and transform the market

Drive the society towards a more greener environment which would lead towards the upliftment and wellbeing of the society

 HIERARCHY OF OBJECTIVES
Company Mission/Vision
Level 0
Corporate objectives
Level I
Corporate strategies

Divisional objectives
Level II
Divisional strategies

Product/brand objectives
Level III
Brand strategies

Program objectives
Level IV
Tactics
 Microsoft Office
Excel 97-2003 Worksheet
SEGMENTATION
We have identified the segmentation variables as:
Geographic
Demographic
Psychographic
Socioeconomic
CUSTOMER ANALYSIS
Who the Customers Are:
Primarily upper middle class and upper class
Analytical and quantitative in nature
Well educated
Special focus on working class, specially working
women
MARKET SEGMENTS
Segment Size Characteristics Distinctive Attribute
Globetrotters 10% Age 45-54; mostly male; Innovators, would prefer to buy
employed in senior positions niche products like Laser TV's

Road Warriors 20% Mostly in corporate Would prefer to buy high end
management and sales, property products, tech savvy
management and real estate

Corporate Wanderers 12% Travel less than Globetrotters or Would prefer to buy high end
Road Warriors; spend most time laptops and PDA’s
visiting employees within their High e-mail users
own companies
MARKET SEGMENTS
Segment Size Characteristics Distinctive Attribute
Collaborators 8% Age 25-44 Innovators
Well educated young professionals, tend to hold Frequently change gadgets
advanced degrees Not very mobile but need mobile products
Team leaders, project managers

Corridor Cruisers 15% Similar profile to Collaborators Not as likely to adopt new products as
Collaborators

Hermits 8% Least mobile; Users of standard electronic goods

Youngest segment (many under 35) Prefer moderate purchase
Seldom work with others
Mostly finance and telemarketing

Solo Practitioners 16% Like Hermits but older Typically connect to corporate network
Diverse collection of technical professionals in small when traveling so likely to buy
to medium-size companies sophisticated gadgets via exhaustive
demonstration

Small-Site Bosses 11% Run small business Look for value-for-products

 TOTAL PRODUCT
CONCEPT
Potential Generic
product product
Latest Regular
Products White and
Laser TVs & Brown
Handheld Goods
PCs

Expected
product
New
Augmented Brands &
product CE spare Technologi
parts & es
add ons
FIVE AREAS FOR
DIFFERENTIATION
1. Quality
2. Status and Image
3. Branding
4. Convenience and Service
5. Distribution
MARKETING STRATEGY

PRESENCE RELEVANCE PERFORMANC

E
BONDING
MARKETING STRATEGY
Phase 1: Presence
A publicity drive would have to be undertaken to create a
buzzword in the markets by having stalls in exhibitions and fairs,
having a press release for every market they enter into
Phase 2: Relevance
Next phase would be of reasoning our presence in the market.
Our brand proposition and objectives would be conveyed through
the markets in this phase. Our marketing in this phase would be
through catalogues
MARKETING STRATEGY
Phase 3: Performance
After creating our niche in the market, we therefore, need to create a foothold
and respect in the market, and this can be done only via our financial reports.
Our financial reports should clearly mark us as a growing profitable and
trustworthy company in terms of product and prices.

Phase 4: Bonding
We are a successful brand by now, so our next step would be to create a
rapport/bond with our customers so as to make them feel prized and special.
This could be done by :
 Sending a small token of thanks on special days of their life like birthdays and anniversaries
 Getting a CRM team in place who would go that extra mile to please and win the trust of the
customers.
MARKETING MIX
Product
We would offer best quality differentiated products laced with advanced technologies
like Laser TV’s. Would also offer bundled products
Price
Pricing would depend from product to product, therefore no fixed price range. Price
would be correlated to unique products attributes. At the same time our prices would be
competitive so as to draw walk-ins in the store and have a higher conversion rate
Place
We would have company owned exclusive retail outlets in cities of the country. We
would go preferably for standalone shops where competition levels are low. We want to
create our store as a destination outlet and not any other roadside retailer
Promotion
For the initial years we would spend on advertising and branding activities till the time
we have created a niche market for ourselves. Based on the previous year‘s sales
figures we would contribute a certain % to promotional and marketing activities so as to
reach the present year‘s sales targets
PROMOTION MIX
The promotions would be carried out in the following ways:

 Trade fairs & Exhibitions: Would be best to way demonstrate and

advertise the product
 Advertisements through catalogues
This would be undertaken on a routine basis so as to create relevance
in the minds of the target group
 Billboards & Revolvers
One of the cheapest form of branding. Though the conversion rate in
this case would be debatable but it would perfectly accomplish our goal
of popularising the brand.
HOW BRANDING IS DONE?
Inside

We would be
Leadership adopting proprietary
Culture
Processes brand development
process

Branding would be
Customer done based on 3
Competitors Relationship
Industry Dynamics
key factors:
Trends
 Internal
Around Outside  External
 Service

Our Brand
TEN GUIDELINES FOR BUILDING
BRANDS
1. Brand Identity
 Each brand should have an identity, a personality. It can be
modified for different segments.
1. Value Proposition
 Each brand should have a unique value proposition.
1. Brand Position
 The brand’s position should provide clear guidance to those
implementing a communications program.
1. Execution
 The communications program needs to implement the
identity and position, and it should be durable as well.
1. Consistency Over Time
 Product managers should have a goal of maintaining a
consistent identity, position, and execution over time.
Changes should be resisted.
TEN GUIDELINES FOR BUILDING
BRANDS (CONT.)
6. Brand System
 The brands in the portfolio should be consistent and synergistic.
6. Brand Leverage
 Extend brands and develop co-branding opportunities only if the
brand identity will be both used and reinforced
6. Tracking
 The brand’s equity should be tracked over time, including
awareness, perceived quality, brand loyalty, and brand
associations.
6. Brand Responsibility
 Someone should be in charge of the brand who will create the
identity and positions and coordinate the execution.
6. Invest
 Continue investing in brands even when the financial goals are not
being met.
THE BRANDING EXERCISE
The main USP behind our branding is the service
quality level & competitive pricing
Our brand would reflect our mission & vision along
with our core competencies
Keeping in mind the target group that we are
capturing, the brand would reflect the element of
niche marketing
 We would be adopting active branding
methodology, i.e. providing credibility through our
branding exercise
POSTIONING OF OUR BRAND
HIGH Our
store
Croma

Competitive Quality
HIGH VALUE PREMIUM
PERCEIVED – VALUE
ENHANCEMENT
PERCEPTION

Vijay
Sales

Next

WORSE VALUE PERCEIVED AS

EXPLOITATIVE
LOW

LOW Relative Price HIGH

PROFILE OF JUHU TARA RD
 Accessible by all modes of transport and easily travelled from
Santacruz, Vile Parle & Andheri stations
 The premium section of the society resides here, rather the showbiz
population
 Hugely dominated by higher middle class of the society
 Value for money is negligible, the only things that matter are
ambience, service levels and product quality
 Popular hangout for all classes of people in the form of Juhu beach
 A shopper’s paradise, thereby making it a highly visited locality for
the elites of the social class.
PROFILE OF MALAD(W)
 Dominated by SEC A1, A2 & B1
 First generation population
 Metropolitan suburb, consisting of Marathis, Sikhs, Gujaratis &
Marwaris (Rich Legacy Heirs & Spendthrifts), & Punjabis
 Construction hotspot favoured by companies, therefore major
infrastructure developments
 IT Hub of Mumbai, throwing light on the fact that the younger
higher disposable segment of the populations travels and some
even reside in this area
 Home to 7 malls, with InOrbit being touted as the largest mall of
India.
 Therefore, perfect to enter and have a hefty pie of the wallet
PROFILE OF COLABA
 Rich Indian industrialists and business people prominently
reside
 Shoppers paradise again with all the well known brands
having a retail store in this area
 Major tourists destination, who are made for Indian arts and
crafts including jewellery and accessories
 Hippest neighbourhood in Mumbai serving as the major
shopping district for both tourists and locals.
 Hugely dominated by the elite class of the society
 Value for money is negligible, the only things that matter
are ambience, service levels and product quality.
STORE NAME
We propose to open our stores as

Our Logo is

For Greener Tomorrow…

 Microsoft Office
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