Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
A                      DISSERTATION REPORT                                 ON            “Buyer Behavior in Consumer Elect...
Certificate of OriginalitySubhojit Dey D/o Sh.Prasanta Kumar Dey, having roll no- 1029 of Batch 2009-2011, do herebycertif...
Approval pageThis report, entitled Buyer Behavior in Consumer Electronics Prepared and submitted bySUBHOJIT DEY, in partia...
ACKNOWLEDGEMENTThe moment of acknowledgement is one of the prides that gives up a feeling of cherish about”. Itake this op...
TABLE OF CONTENTS1. Industry Introduction2. Consumer electronics industry analysis3. Consumer Buying Behavior4. Existing P...
1).Introduction-1.1 Worldwide consumer electronics marketThe consumer electronics industry has witnessed a unique growth o...
1.2 Consumer expenditure on durable goodsConsumer durables are items that provide a flow of services to a consumer over ap...
2. Computing Devices: Computers, Calculators, Laptops3. White Goods: Household /Domestic Appliances such as washing machin...
The report thoroughly analyzes the historic performance and futureprospects, offering 4-year industry forecast, of followi...
1.5 Classification of consumer durable Goods                   Classification of consumer durable goods                   ...
1.6..SWOT Analysis Of Electronics-  Strengths1. Presence of established distribution networks in both urban and rural are...
The low penetration level of consumer electronics goods coupled with increasing preference forcomfort and luxurious goods ...
2.) Consumer electronics industry analysisPorter’s Five Forces ModelAlthough the Indian Consumer electronics market is hig...
Product Differentiation:Though the awareness is increasing amongst the Indian consumers, retailers andmanufacturers are un...
electronics market, the retailers find it difficult to integrate backwards to produce their ownelectronic goods as in the ...
3) Consumer buying behavior    WHAT IS BUYER BEHAVIOUR?The wealth of products and services produced in a country make our...
2. Search for InformationAssuming consumers are motivated to satisfy his or her need, they will next undertake a search fo...
 Why Consumers Buy :Customers make purchases in order to satisfy needs. Some of these needs are basic and must befilled b...
“Nothing is more difficult and therefore, more precious, than to be able to decide isquoted to be the words of Napoleon. T...
3.2..Cultural factors Influencing Consumer BehaviourCultures, which only goes on to make the marketers job tougher. Some o...
1. Fear :     To overcome theft, you may purchase a burglar alarm(out offear)2. Desire for money :       Purchasing when t...
2.Size of family income :The size of family and size of family income affect the spending and saving patterns. Generallyla...
perceptions enables us to learn about our environment and the specific products and brands in ourenvironment. Learning is ...
found out that brand-loyal consumers have been declining. The erosion of brand loyalty and thegrowth of non-brand products...
Economic factors. It is obvious that consumers cannot spend more money than they have oruse more credit than is available ...
influence in purchasing cleaning products, food, and clothing. From changes in family composition,a study has drawn the fo...
CONSUMER BEHAVIOUR TRENDS       Shift from buying predominately during Diwali and other festive seasons to year round     ...
Revolution in Indian Consumer Behaviour· Rising disposables incomes(higher buying power)· Male no longer the sole income g...
4)Existing Players in the indian marketBefore the liberalization of the Indian economy, only a few companies like Kelvinat...
Consumer                                          Durables          Consumer                        Consumer              ...
4.2..Scope1. In term of purchasing power parity (ppp), India is the 4th largest economy in the world andovertake Japan in ...
Some of the major category of good coming under consumer durable industry is washingmachines, air-conditioners, refrigerat...
Titan Industries:Titan Industries came into existence in the year 1984 and it is a joint venture between TamilNadu Industr...
TODAY Consumer durables sector is characterized by the emergence of MNCs, exchange offers,discounts, and intense competiti...
4.4…1)MARKET SHARE OF CONSUMER APPLIANCE AND CONSUMERELECTRONIC:-
2)Market share of consumer appliances and consumer electronic:-
3)Position of CTV in various states in India-
4)Position of AC in various States in India-
5)Position of Audio & Home Theater in various in India-
6)Position of DVD in various in India-This analysis is based on the survey which represent the position of different consu...
5.)….RESEARCH METHODOLOGYResearch methodology is considered as the nerve of the project. Without a proper well-organizedre...
5.2..Marketing Research Process-  Defiene the Problem & Research  Objective       Define the Reserch Plan            Colle...
Step 4: Analyze the informationAfter the process of gathering information was completed we tabulated the data and develope...
There are several ways of collecting primary data. They are as follows:        1.Observation method       2. Interview met...
-Various publications of foreign government or of international bodies and their subsidiaryorganization.-Technical and tra...
5.6..DATA COLLECTION METHODS:After the research problem, we have to identify and select which type of data is to research....
5.7..Sampling Methodology:Details of the sampling methodology, I have made questionnaire. The one is made for theCustomer....
0%                                          0%                                                                  35%       ...
9%                                                     30%               16%                                              ...
0%                                                  17%            47%                                                    ...
 Offers    Convenience                         29%                                                               35%    ...
4%                                                           19%                                                          ...
5%                         10%                                                 40%                    Strongly Agree      ...
4. Reference groups                               20%                     20%                                             ...
d) Celebrities/Movies                                10%        10%                                                       ...
d) Youth                                             25%                  35%                                             ...
6)Key findingsThe sector has been witnessing significant growth in recent years, helped by several drivers such asthe emer...
Other reasons-Young Population with rising incomes45% of the Indian population is below 25 years which accounts to close t...
CUSTOMER SURVEY FINDINGS1. Secondary supports play an important role in the customers mind and create awareness among thec...
7)Some Statistics-Consumer electronics (durables) sector continues to be the main stay of the Indian electronicindustry co...
8)Challenges to the electronics industry-     Price WarsWith the increase in price wars due to the entry of new players i...
10)Limitations of the project-Every study has certain limitations. In my study, also there were certain limitations, which...
ConclusionThe consumer durables industry in India is set for sustained growth over the long term, fuelled byfavourable con...
BIBLIOGRAPHY    www.lgindia.com    www.google.com    www.wikipedia.com    “India Consumer Electronics Report Q4 2010” ...
Buyer behavior in consumer electronics market
Upcoming SlideShare
Loading in …5
×

Buyer behavior in consumer electronics market

38,491 views

Published on

Buyer Behavior in Consumer Electronics Market Project Report

  • Login to see the comments

Buyer behavior in consumer electronics market

  1. 1. A DISSERTATION REPORT ON “Buyer Behavior in Consumer Electronics Market” Report by Subhojit Dey Submitted to the Department of Management Studies In Partial fulfillment Of the Requirements For the 2-Year full-time PGDM course In Partial Fulfillment of the Requirement for the 2-year Full-Time PGDM Course PRESIDENCY INTERNATIONAL INSTITUTE OF MANAGEMENT VIDHYADER NAGAR, JAIPURROLL NO.1029 BATCH YEAR 2009-11 SPECIALIZATION:MARKETING, FINANCE
  2. 2. Certificate of OriginalitySubhojit Dey D/o Sh.Prasanta Kumar Dey, having roll no- 1029 of Batch 2009-2011, do herebycertify and declare that this research report titled Buyer Behavior In Consumer ElectronicsMarket is the result of my own work. This report contains no materials or information which hasbeen previously submitted for any other academic diploma or degree, except where indicatedotherwise.Date: Signature of the Student SUBHOJIT DEY
  3. 3. Approval pageThis report, entitled Buyer Behavior in Consumer Electronics Prepared and submitted bySUBHOJIT DEY, in partial fulfillment of the requirements for the degree of PGDM is herebyaccepted. GAURAV VARSHNEY (Faculty Guide) Accepted as partial fulfillment of the requirements for the second year full-time PGDM COURSE.
  4. 4. ACKNOWLEDGEMENTThe moment of acknowledgement is one of the prides that gives up a feeling of cherish about”. Itake this opportunity to express our sincere gratitude to all, contributed to making this work possiblewithin very limited time.I am also thankful to all mine faculty specially MR KAMLESH KUMAR JANGID under herguidance which has really a source of inspiration and supporting to accomplish my project fairlyand effectively.I am greatly thankful to my colleagues, friends and parents for their regardless help and appreciationin my each and every moment of internship.I am very thankful to God who blessed me with energy, potential and will power to complete theinternship and also the project with best of my worth. SUBHOJIT DEY PGDM 4th SEMESTER
  5. 5. TABLE OF CONTENTS1. Industry Introduction2. Consumer electronics industry analysis3. Consumer Buying Behavior4. Existing Players in the Indian market5. Research Methodology6. Key findings7. Some statistics8. Challenges to the electronics industry9. Limitation of the project.Bibliography
  6. 6. 1).Introduction-1.1 Worldwide consumer electronics marketThe consumer electronics industry has witnessed a unique growth over the past few years. Thisgrowth can be attributed to the increasing effect of state of the art electronic devices on the market.The consumer electronics industry is ushering in the dawn of Convergence. It is the confluence andmerging of hitherto separated markets of digital based audio, video and information technology,removing entry barriers across the market and industry boundaries. This convergence oftechnologies has resulted in a greater demand for consumer devices, be they portable, in-home(mobile phones, digital camera) or in-car (CD/DVD players), offering multiple functions.The revolution brought about by Digital technology has enabled the consumer electronics sector toprofit from the growing interaction of digital applications such as: camcorders, DVDplayer/recorder, still camera, computer monitor, LCD TV etc. It has also witnessed the emergenceof mobile telecommunications technology, incorporating both digital visual and digital MP3capabilities. The computer industry has also benefited by being able to make its way intoconsumers living rooms. HDTVs with VGA connections and SD/MMC card slots, personal mediaplayers, and Microsoft-based Media Center PCs have pushed the two industries even closer togetherthan before.The India Consumer Electronics Report provides industry professionals and strategists, corporateanalysts, electronics associations, government departments and regulatory bodies with independentforecasts and competitive intelligence on Indias consumer electronics industry.India‟s consumer electronics devices market, defined as the addressable market for computingdevices, mobile handsets and AV products, is projected at about US$29.4bn in 2011. This isexpected to increase to US$50.6bn by 2015, driven by rising incomes and growing affordability.Only nine out of 1,000 people in India own a computer, one-fifth of the level in China, while Indianhandset population penetration is about 57%.Spending on consumer electronics devices is projected to grow at an overall CAGR (compoundedannual growth rate) of 14% through 2015, with the key segments including low-cost mobilehandsets, colour TVs, set-top boxes and notebook computers. In 2010 demand for LED TV setsgrew strongly, and touchscreen phones were another growth area.Consumer electronics manufacturers, after suffering a rare dip in sales last year, are hoping tobounce back in 2010 with smartphones, e-readers and smaller laptops leading the way.
  7. 7. 1.2 Consumer expenditure on durable goodsConsumer durables are items that provide a flow of services to a consumer over aperiod of time. Examples include new cars, household appliances, audio-visualequipment, furniture etc. The real level of spending on durables has surged in the last eight years.1.3 Segment DefinitionIn general consumer electronics refers to a variety of electronic equipment used by privatecustomers. This industry can be divided into many segments:1. „Traditional‟ Consumer Electronics: audio and video equipment
  8. 8. 2. Computing Devices: Computers, Calculators, Laptops3. White Goods: Household /Domestic Appliances such as washing machines, irons, vacuumcleaners, grinders, etc4. Personal Care: Hair Dryers, shavers, electric toothbrushes.In addition to this, the emergence of telecommunication has lead to the convergence of mobiletechnology into the consumer electronics industry and hence this paper will only deal withtraditional consumer electronics, mobile phones and computing devices which can be termed asBrown Goods as per industry definitions. Henceforth in this paper consumer electronics will refer toBrown Goods.In 2008, the market size was estimated to be $22 billion and growing. With the growing populationin India, exceeding 1 billion, the consumer electronic Industry is all geared up for fast growth in thecoming years. The predicted figure for the consumer electronic market by 2013 is around $46billion, growing at a compound annual growth rate (CAGR) of 16%. This astounding growth is dueto many factors, the major ones including Rising disposable incomes coupled with increasing consumer exposure Increase in manufacturing in the local grounds Credit/Financing schemes which make purchase easy Growing competition , leading to better deals Increased reach due to better distribution networks1.4. Consumer electronics market in IndiaIndia has an increasingly affluent middle class population that, on the back of rapid economicgrowth, has made the country‟s consumer electronics industry highly dynamic. The industry hasbeen witnessing significant growth in recent years due to several factors, such as retail boom,growing disposable income and availability of easy finance schemes. But still, the consumerelectronics goods, like refrigerators, microwave and washing machines have low penetration inthe country, representing vast room for future growth.The report finds that since the penetration of several products like TVs and refrigerators arereaching saturation in the urban areas, the markets for these products are shifting to the semi-urban and rural areas.This analytical research evaluates the Indian consumer electronics industry. It briefly discussesabout the current and emerging trends in the industry, underlining the future potential areas andkey issues crucial for the industry development. It provides an insight into the emerging andpotential future trend in all the categories and highlights the key strategies that need to be workedupon to get success in the highly competitive industry.
  9. 9. The report thoroughly analyzes the historic performance and futureprospects, offering 4-year industry forecast, of following consume electronics products:- Washing Machines (Semi-automatic & Fully Automatic)- Television- Set-top Box- Refrigerator (Frost-free & Direct Cool)- Air Conditioner- Microwave Oven- MP3 Players- Digital Camera & Camcorder- Mobile Handsets- PCs (Desktop & Notebook)
  10. 10. 1.5 Classification of consumer durable Goods Classification of consumer durable goods Cameras & camcordersComputers Digital cameraLaptops Movie cameraDesktops Camera accessoriesMonitors Kitchen AppliancesPeripherals Cooking range Comp Hand blender Telephone & Mobiles uter Toaster maker Mobile phones acces Water purifiers Land line telephones sories Vaccum cleaners Fax Food processor Mobile accessories &mixer,grinderTelevision Water heaterCRT/LCD/PlasmaCD/DVD playerDTH
  11. 11. 1.6..SWOT Analysis Of Electronics-  Strengths1. Presence of established distribution networks in both urban and rural areas2. Presence of well-known brands3. In recent years, organized sector has increased its share in the market vis a visthe unorganized sector.  Weaknesses1. Demand is seasonal and is high during festive season2. Demand is dependent on good monsoons3. Poor government spending on infrastructure4. Low purchasing power of consumers  Opportunities1. In India, the penetration level of white goods is lower as compared to other developing countries.2. Unexploited rural market3. Rapid urbanization4. Increase in income levels, i.e. increase in purchasing power of consumers5. Easy availability of finance  Threats1. Higher import duties on raw materials imposed in the Budget 2007-082. Cheap imports from Singapore, China and other Asian countries1.7. Trends in electronic marketPropelled by growing middle class population, changing lifestyle and rapid urbanization, the Indianconsumer electronics industry is forecasted to grow at a rapid rate of 10% to 12% in the coming fewyearsVolume sales of washing machine will be driven by growth in fully automatic category during2008-09 to 2011-12. The market for televisions in India is changing rapidly from the conventionalCRT technology to Flat Panel Display Televisions (FPTV). Currently, the split between CRT andFPTV is around 97% and 3% respectively, and the share of FPTV is projected to increase at robustrate in near future.Frost-free refrigerator sales, certainly growing at a much faster pace than the direct-cool category,are anticipated to drive the Indian refrigerators market over the forecast periodThe AC market in India is projected to grow at 30% to 35% for the coming few years. Driven byyoung population, demand for MP3 players and digital video appliances are anticipated to surge atdouble-digit rate in near future
  12. 12. The low penetration level of consumer electronics goods coupled with increasing preference forcomfort and luxurious goods are widely attracting the foreign as well as domestic players to theindustry.TRENDS IN TERMS OF TECHNOLOGY AND PRODUCTS – INDIA Lower duties, cheaper technology and strong competition with low entry barriers ensure competitive prices 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)
  13. 13. 2.) Consumer electronics industry analysisPorter’s Five Forces ModelAlthough the Indian Consumer electronics market is highly competitive, the high growth rates thatit promises make it a good industry to enter. Threat of New Entrants Low to Moderate Bargaining Power Rivalry Amongst Bargaining Power of Suppliers Existing Firms of Customers Low Moderate Moderate to High Threat of Substitutes LowThreat of New EntrantsCapital Requirements and Economies of Scale:In the case of retail stores, there is lack of good distribution network and lack ofknowledge of consumer buying patterns which calls for large investment in distribution channelsand research to improve the reach. Economies of scale is required in as there are large fixed costsassociated with setting up a manufacturing plant as there are problems of under-developedinfrastructure, erratic supply of water and electricity in many areas, a high cost of capital andcontinuous up gradation of technical and managerial skills.Supply Chain Issues:The existence of too many intermediaries in the supply chain coupled with issues inlogistics, management of POS data, pilferage and distribution and inventory management, eats awaythe profits of the retailer, making it unattractive for new entrants
  14. 14. Product Differentiation:Though the awareness is increasing amongst the Indian consumers, retailers andmanufacturers are unable to increase brand loyalty. The Indian consumer is very price sensitive andhence he keeps hoping from one place to another, hunting for good deals. Switching costs varyamongst the electronic categories. For instance, the switching costs in mobile phones are high, asconsumers who are used to one brand find it difficult to use another brand. However, for televisions,cameras, and even laptops, consumers are ready to try new brands based on price for featuresoffered and service quality or reputation of the brand.Government Policy:By encouraging manufacturing zones and improving the infrastructure, the government isdeveloping the entire manufacturing sector, which will help in boosting the electronics productionin India, which has traditionally been a very small slice of the overall manufacturing segment.While the government is trying to encourage the growth of the retail and manufacturing industries inIndia, there are some policies which need to be looked at.· The duty structure for electronics adds up to 30% which is a significant amount. This is mainly dueto the multiple tax structure which consists of 12% VAT, 8% excise, 4% Goods and Service Tax,2% Central Sales Tax and Local taxes.· The FDI policy limits to 51% stake for foreign investors, which forces foreign retailers to usefranchise arrangements, and in the manufacturing sector, the FDI is 100% favouring foreigninvestors· Existence of the grey market due to poor government regulations to keep counterfeits at baycoupled with the lack of consumer knowledge and legal recourse encourages manufacturers tochurn out spurious products which can lead to lost sales of the tune of 10-15%.· Red tapes and bribery in the Indian government system is also a stumbling blockfor new retailers or manufacturers.Taking into consideration the positives and negatives, India still offers a good chance for newentrants and hence the threat is considered to be low to moderate.Bargaining Power of BuyersWith the emergence of new channels like the internet, auction sites like rediff.com, the generalconsumer (buyers) who usually purchase electronic goods from electronic retailers, hypermarts,music and book stores, can easily compare prices and go for the best deals in town. Though thebetter brands can command a higher price, buyers are constantly comparing prices, service qualityand product features and hence commands a moderate to high power in this industry.Large chain stores like Tata Croma, E-Zone have distinct advantage over the smaller stand alonestores as they can demand good discounts suppliers. As brands play an important role in the
  15. 15. electronics market, the retailers find it difficult to integrate backwards to produce their ownelectronic goods as in the case of private food labels. Considering the market dynamics and the sizeof the market, the buyers have moderate to high power in the consumer electronics industryBargaining power of suppliersThe biggest threat is the trend of large suppliers integrating forward as in the case of Dell, Apple,Nokia, by setting up their own retail outlets. However, in the Indian electronic context, there are alarge number of suppliers in the market who face overcapacities, poor distribution, large duties, anddeclining margins and hence the bargaining power for suppliers is less and competitive pricingcomes into play. With more companies setting up the manufacturing plants in India, like Nokia inthe south, the bargaining power of suppliers is definitely low to medium. Product differentiation ismore and more difficult in the consumer electronics industry and the existence of cheap Chinesesuppliers also adds woes to the suppliers.Intensity of Rivalry amongst existing playersThere are few key players in the consumer electronic market, but as they are part of big Indianbusiness groups, they have a lot of muscle power and hence the intensity of rivalry can be placed ata mid level. Though factors such as high transport and storage costs, lack of differentiation, largeinvestments, and low switching costs tend to intensify the rivalry, the fact that the market is only atthe nascent stage with promises of high growth rates of 16% coupled with the diverse needs ofcustomer groups, and an untapped rural market; the existing players seem to be enjoying a relativelylow rivalry.Threat of SubstitutesThe threat of substitutes for the manufacturers of these electronic goods is medium to high unlikethe case of white goods. As new technology enters the market at increasing pace, the manufacturersand retailers need to understand the consumer needs. For instance the VCR was replaced by theDVD player which will soon be replaced by a Blue Ray Player. The incorporation of camera in themobile phones is definitely a threat to the camera market. Hence product innovations in thissegment are very high and players in this industry need to mindful of this.
  16. 16. 3) Consumer buying behavior  WHAT IS BUYER BEHAVIOUR?The wealth of products and services produced in a country make our economy strong. Almost allthe products, which are available to buyers, have a number of alternative suppliers: substituteproducts are available to consumers, who make decision to buy products. Therefore a seller most ofhis time, seeks buyers and tries to please them. In order to be successful, a seller is concerned with.  · Who is the customer?  · What do consumers buy?  · When do consumers buy?  · How do consumers buy?  · From where do consumers buy?  · Why do consumers buy?A buyer makes a purchase of a particular product or a particular brand and this can be termed “product buying motives” and the reason behind the purchase from a particular seller is “ patronagemotives” When a person gets his pay packet, and if he is educated ,sits down along with his wifeand prepares a family budget, by appropriating the amount to different needs. It may happen thatafter a trip to the market, they might have purchased some items, which are not in the budget, andthus there arises a deviation from the budgeted items and expenditure. all the behaviour of humanbeings during the purchase may be termed as “buyer behaviour”.  HOW CONSUMERS BUY1. Need/Want/Desire is RecognizedIn the first step the consumer has determined that for some reason he/she is not satisfied (i.e.,consumer‟s perceived actual condition) and wants to improve his/her situation (i.e consumer‟sperceived desired condition). For instance, internal triggers, such as hunger or thirst, may tell theconsumer that food or drink is needed. External factors can also trigger consumer‟s needs.Marketers are particularly good at this through advertising, instore displays and even the intentionaluse of scent (e.g., perfume counters).
  17. 17. 2. Search for InformationAssuming consumers are motivated to satisfy his or her need, they will next undertake a search forinformation on possible solutions. The sources used to acquire this information may be as simple asremembering information from past experience (i.e., memory) or the consumer may expendconsiderable effort to locate information from outside sources (e.g., Internet search, talk with others,etc.). How much effort the consumer directs toward searching depends on such factors as: theimportance of satisfying the need, familiarity with available solutions, and the amount of timeavailable to search.3. Evaluate OptionsConsumers‟ search efforts may result in a set of options from which a choice can be made. It shouldbe noted that there may be two levels to this stage. At level one the consumer may create a set ofpossible solutions to their needs (i.e., product types) while at level two the consumer may beevaluating particular products (i.e., brands) within each solution. For example, a consumer whoneeds to replace a television has multiple solutions to choose from such as plasma, LCD and CRTtelevision.4. PurchaseIn many cases the solution chosen by the consumer is the same as the product whose evaluation isthe highest. However, this may change when it is actually time to make the purchase. The“intended” purchase may be altered at the time of purchase for many reasons such as: the product isout-of-stock, a competitor offers an incentive at the pointof- purchase (e.g., store salespersonmentions a competitor‟s offer), the customer lacks the necessary funds (e.g., credit card notworking), or members of the consumer‟s reference group take a negative view of the purchase (e.g.,friend is critical of purchase).5. After-Purchase EvaluationOnce the consumer has made the purchase they are faced with an evaluation of the decision. If theproduct performs below the consumer‟s expectation then he/she will reevaluate satisfaction with thedecision, which at its extreme may result in the consumer returning the product while in lessextreme situations the consumer will retain the purchased item but may take a negative view of theproduct. Such evaluations are more likely to occur in cases of expensive or highly importantpurchases. To help ease the concerns consumers have with their purchase evaluation, marketersneed to be receptive and even encourage consumer contact. Customer service centers and follow-upmarket research are useful tools in helping to address purchasers‟ concerns.
  18. 18.  Why Consumers Buy :Customers make purchases in order to satisfy needs. Some of these needs are basic and must befilled by everyone on the planet (e.g., food, shelter) while others are not required for basic survivaland vary depending on the person. It probably makes more sense to classify needs that are not anecessity as wants or desires. In fact, in many countries where the standard of living is very high, alarge portion of the population‟s income is spent on wants and desires rather than on basic needs.For example, in planning for a family vacation the mother may make the hotel reservations butothers in the family may have input on the hotel choice. Similarly, a father may purchase snacks atthe grocery store but his young child may be the one who selected it from the store shelf. Sounderstanding consumer purchase behavior involves not only understanding how decisions aremade but also understanding the dynamics that influence purchases3.1..TYPES OF CONSUMER PURCHASE BEHAVIOURConsumers are faced with purchase decisions nearly every day. But not all decisions are treated thesame. Some decisions are more complex than others and thus require more effort by the consumer.Other decisions are fairly routine and require little effort . In general, consumers face four types ofpurchase decisions:· Minor New Purchase – these purchases represent something new to a consumer but in thecustomer‟s mind is not a very important purchase in terms of need, money or other reason (e.g.,status within a group).· Minor Re-Purchase – these are the most routine of all purchases and often theconsumer returns to purchase the same product without giving much thought toother product options (i.e., consumer is brand loyalty).· Major New Purchase – these purchases are the most difficult of all purchasesbecause the product being purchased is important to the consumer but theconsumer has little or no previous experience making these decisions. Theconsumer‟s lack of confidence in making this type of decision often (but notalways) requires the consumer to engage in an extensive decision-making process..· Major Re-Purchase - these purchase decisions are also important to the consumer but theconsumer feels confident in making these decisions since they have previous experience purchasingthe productFor marketers it is important to understand how consumers treat the purchase decisions they face. Ifa company is targeting customers who feel a purchase decision is difficult (i.e., Major NewPurchase), their marketing strategy may vary greatly from a company targeting customers who viewthe purchase decision as routine. In fact, the same company may face both situations at the sametime; for some the product is new, while other customers see the purchase as routine. Theimplication of buying behavior for marketers is that different buying situations require differentmarketing efforts
  19. 19. “Nothing is more difficult and therefore, more precious, than to be able to decide isquoted to be the words of Napoleon. This is amply true in the case of consumer too. It is for thisreason that the marketers are bound to have a full knowledge of the consumer – buying decisionprocess.However it should be remembered that the actual act of purchasing is only one stage in the processand the process is initiated at the several stages prior to the actual purchase. Secondly even thoughwe find that purchase is one of the final links in the chain of process, not all decision processes leadto purchase. The individual consumer may terminate the process during any stage. Finally not allconsumer decisions always include all stages. Persons engaged in extensive decision makingusually employ all stages of this decision process. Where as those engaged in limited decisionsmaking and routine response behaviour may omit some stages. The consumer decision process iscomposed of two parts, the process itself and the factors affecting the process.A survey conducted by the marketing team of shoppers stop Ltd. Reveals thepsychography of the modern shopper.Accordingly the survey classifies customers in to the four segments namely· Convenience Shoppers· Value Shoppers· Image Shoppers· Experience ShoppersConvenience shoppers for instance ,are people who consume relatively less amount of time whileshopping. Also they look out for the width and depth of the range they purchase and conduct theirannual shopping at one shot.Value Shoppers always hunt for value for money ; Prefer quality reassurance andbenchmark offerings among other related attributes.Image Shoppers are fashion- conscious and look out for the latest trends and labels. On the otherhand , Experience Shoppers are attentive and prefer personalized services look out for the rightambience, prefer giving personal advice on clothing at the time of purchase , and prefer not to buy atone sold.
  20. 20. 3.2..Cultural factors Influencing Consumer BehaviourCultures, which only goes on to make the marketers job tougher. Some of the few cultural factorsthat influence buyer behaviour are:1. Product (colour, size, design, and shape)There are many examples that support this point. A good example would be Philips audio systems.Urban India looks at technology with the viewpoint of „the smaller the better‟ . However, in ruralIndia, the viewpoint is totally opposite. That is the main reason for the large acceptance of big audiosystems. Thus Philips makes audio systems, which are big in size and get accepted in rural India bytheir sheer size.2. Social practicesThere are so many different cultures, and each culture exhibits different social practices. Forexample, in a few villages they have common bath areas. Villagers used to buy one Lifebuoy cakeand cut it into smaller bars. This helped lifebuoy to introduce smaller 75-gram soap bars, whichcould be used individually.3. Decision-making by male headThe male in Indian culture has always been given the designation of key decision maker. Forexample, the Mukhiya‟ s opinion (Head of the village), in most cases, is shared with the rest of thevillage. Even in a house the male head is the final decision maker. In rural areas, this trend is veryprominent.4. Changes in saving and investment patternsFrom Gold, Land, to Tractors, VCR‟ s, LCD TV‟ s etc.3.3..MARKETING IMPLICATIONS OF CONSUMER’S DECISION PROCESSIt was during 1960‟s that a number of theories to explain the consumer „s decisionprocess started appearing. The three leading theorists were Howard-sheth , Engel Kollat- Blackwelland Nicosia. Since then a considerable research on the marketing implications of the process hasbeen developed and tested the applications of many elements of marketing.Many of the marketing strategies and tactics will have to be developed in relation toconsumer attitudes. Marketing strategies,if effectively used, will go a long way ininitiating and developing consumer attitudes in favour of the products.THE IMPORTANT MOTIVES, INFLUENCING THE ULTIMATE BUYING BEHAVIOUR OFCUSTOMERS.
  21. 21. 1. Fear : To overcome theft, you may purchase a burglar alarm(out offear)2. Desire for money : Purchasing when the price falls down.3. Vanity : Getting costly items to be admired by others4. Pride : Possessing luxurious items for high position in the society5. Love and affection : When you purchase toys, dresses for your sister, it is out Of affections.6. Sex and romance : Spending much on dresses, ornaments etc.7. Fashion : Imitation motives : Old people dress like young ones.8. Possession : This refers to collection of stamps, coins etc.9. Health and Physical : Purchasing health foods, vitamins etc.Well being10. Comfort and : Purchasing equipments like refrigerator, pressure cookers etc3.4..Consumer Electronics MarketRapid InnovationDynamic Market PlaceHighly Competitive IndustrySignificant Time-To-Market PressuresSignificant Cost PressuresRapid Rates of Market PenetrationRapid Transition from One Technology to another3.5..ECONOMIC FACTOR AFFECT THE BUYER’S BEHAVIOUR1. Disposal personal income :The economists made attempts to establish a relationship between income andspending. Disposal personal income represents potential purchasing power that a buyer has. Thechange in income has a direct relation on buying habits.
  22. 22. 2.Size of family income :The size of family and size of family income affect the spending and saving patterns. Generallylarge family spend more and short family spend less, in comparison.3. Income expectations :The expected income to receive in future has a direct relation with the buying behaviour. Theexpectation of higher or lower income has a direct effect on spending plans.4.Propensity to consume and to save :This goes to the habit of spending or saving with the disposal income of buyers. If the buyers giveimportance to present needs, then they dispose of their income. And buyers spend less if they giveimportance to future needs.5. Liquidity of Fund :The present buying plans are influenced greatly by liquidity of assets i.e., cash and assets readilyconvertible into cash, e.g. bonds, bank balances etc.,6. Consumer Credit :“ Buy now and pay later” plays its role effectively in the rapid growth of markets for car, scooter,radio, furniture and the like.Economic model suggests behavioural hypothesis :Lower the price of the product, higher the sales.Lower the price of substitute products, lower the sales of this productHigher the real income, higher the sales of the product.Higher the promotional expenses, higher the sales.3.6..Factors influencing consumer purchase behaviourThe factors affecting consumer behaviour are discussed from the perspective of Internal influences, Environmental influences (external influences) Marketer –initiated influences 1. Internal influences – not directly observable - are those factors which are internalized tothe consumer and affect the consumer‟s selection of products. They are: motivations, perceptions,learning, attitudes, personality and lifestyle. These factors are related to one another. For example,to some extent, our level of motivation and our specific motives have an effect on those stimuli weperceive in our environment and on how we perceive them. Information gathered through these
  23. 23. perceptions enables us to learn about our environment and the specific products and brands in ourenvironment. Learning is essential for the development of attitudes. Motives - the initial stage of the consumer decision process represent the recognition of a needor problem. According to A. Maslow, needs are arranged in the following hierarchy: 1. Psychological needs (nutritional necessities, sleep, sensory pleasure, maternal behaviour, activity and exercise); 2. Safety needs (security, stability, dependency, protection, freedom, need for laws); 3. Belongingness and love needs (to give and receive love and affection, to develop relationships); 4. Esteem needs; 5. Self-actualization needs (self-fulfilment, self – development). Unless a certain level of needs has been satisfied, higher levels of needs will not serve tomotivate the individual. Thus, once a level of needs has been satisfied, it no longer serves as amotivator. The amount of unsatisfied needs influences the effort that the individual will expend inseeking need gratification. The object of the individual‟s behaviour is determined also by its abilityto satisfy the particular motivating need. Perceptions. Marketers are concerned with the way consumers perceive their productoffers. Consumers are faced with an increasingly complex environment which bombards them withthousands of stimuli every day. Perception is the process by which the sensory stimuli are selected,organized and given meaning. For example our perception of “quality” may be based on knownstandards of performance. When there are no objective standards, our perception of quality may be based on subjective factors such as brand name, the store in which theproduct is stocked, an advertising slogan or price. Learning may be defined as a change in the response tendency of an individual because ofthe effect of experience with the environment. Consumers learn to respond in a particular way bystudying the consequences of their purchase behaviour. For example, people continue to purchase aparticular brand if they are satisfied with that brand. The most significant outcome of a consumer‟suse of a product is satisfaction with the product. Some marketers consider repetitive advertising asan important tool for establishing associations between product symbols (packing, logos) and brandnames, thus creating familiarity with the product among customers. These familiar brands are muchmore likely to be considered by customers than brands they have not heard of before. Concerningbrand loyalty (the greater probability that a consumer will purchase a certain brand repeatedly) theconsumer even may be aware that other brands might offer greater satisfaction, yet is not interestedin those brands. The brand currently being purchased may provide enough satisfaction and notexploring new brands reduces the consumer‟s risk of unknown consequences. But recent research
  24. 24. found out that brand-loyal consumers have been declining. The erosion of brand loyalty and thegrowth of non-brand products determine challenges for firms that invested much in building brandnames. Attitudes. Marketers‟ concern is to understand how attitudes toward brands are formed,maintained and changed since they are important determinants of consumer‟s behavior. Consumersfavour products and brands for which they have positive attitudes and avoid those for which theyhave negative attitudes. For example, consumers who agree that some nutrients are healthy willhave a positive attitude for products containing them. But on contrary, consumers who believe thatcaffeine is harmful have the tendency to avoid cola products. Attitudes toward products and brandsare also shaped by family and peer groups. Consumers hold beliefs about the attributes of aparticular brand or about the benefits which it provides. For example, a woman believes thatPantene Shampoo has a nice smell, rinses out easily (are attributes) and makes her hair shiny andattractive (benefits). Consumers make an overall evaluation of a brand on the basis of their beliefsabout its attributes or benefits. When consumers have favourable evaluations of brands they tend topurchase. When the evaluations are unfavourable they tend not to purchase. Generally, the consumer looks at only one or a few attributes of a product. The marketer‟stask is to identify the relevant product attributes and their benefits, communicate them to theconsumer and provide an opportunity for their easy in –store evaluation. For example, in asupermarket, consumers who want to purchase a new product that they have not used before, theypick the product on the shelf and examine it (read the label, smell it). Personality refers to the way a person acts which makes that person different from others.This is a fundamental aspect of human behaviour which influences purchase behaviour. People arevery different and their personalities influence the purchasing process but marketing researchesfaced difficulty in trying to use personality to explain specific consumer purchases. Therefore,marketers have turned to lifestyle research. Lifestyle represents a broad composite of what a person does, the way the lives, whatproducts and services are bought and how they are used. Lifestyle is in fact what the individual doeswith available resources – financial, social and time. This dimension influences consumerbehaviour. According to their lifestyles people purchase different products and services, fromdifferent places or stores, at different periods. Considering foodstuffs purchasing, there are peoplewho go shopping many times a week, once a week, twice a month and so on according to their time,money and needs. There are people who prefer spending a large amount of money for a largerquantity of foodstuffs at a time but others cannot afford it and buy smaller quantities of productsmore often. Some people prefer an expensive one - week vacation to a cheaper fortnight vacation. 2. Environmental influences refer to economic factors, cultural factors, social class,reference groups and random environmental factors.
  25. 25. Economic factors. It is obvious that consumers cannot spend more money than they have oruse more credit than is available to them. The consumer‟s available income is an importantinfluencer of behaviour because it can limit total expenditures, eliminate alternatives, changeexpectations of product attainments and influence the amount of time devoted to gatheringinformation on the alternatives. The cost of living is another influencer because if it rises at a rateless than the rate of personal income, consumers either will have a real increase in income and willspend their money for more goods and services or will increase their savings. Otherwise, if incomeincreases do not keep pace with rises in the cost of living, real income declines and consumers findthat their paychecks do not buy the same amount of goods and services as before. To compensatefor this decline in real income, they will seek less expensive items or retail outlets with fewerservices but lower mark-ups. Cultural factors. Culture is the broadest of the external social influences on consumer‟sbehaviour. Values are learned through the process of consumer socialization in which youngermembers of society develop attitudes toward products, brands and the purchasing process. Social learning is the result of social influences on consumer behaviour. For example, achild is taught to buy or how to shop for bargains or a child may imitate the consumption patterns offamily members and peers. Marketing abroad requires particular attention to cultural differences.Many companies, when they begin to market abroad, make serious errors because they are unawareof the subtle differences in local cultural values. As concerns subcultures, orthodox people,Mormons, or other religion-based subcultures have rules which include what their members can andcannot consume. When subcultures contain enough people, they can be considered as marketsegments justifying separate marketing strategies. Hispanics represent the main importantsubculture in the United States. Their attitudes toward brands are often distinct. Thus companiessuch as McDonald‟s, Coca –Cola advertise in Spanish language. Social class. Moreover, people do not live with uniformly equal status. Every society isstratified into different levels of social status which give rise to many of our social motivations.Sometimes people attempt to climb the social ladder purchasing certain products (the tendency tobuy certain brands of cars considered conventionally the best ones). Reference group is any aggregation of people who influence an individual‟s attitudes orbehaviour. Someone will buy Nike trainers because a famous sportsman wears that brand. Family isconsidered to have the greatest influence on purchase behaviour. Besides adult roles, parents setexamples of adult consumers. But parents may be influenced by their children. The child canrequest a certain brand of cereal, chocolate or toy seen on TV. Family buying patterns varyaccording to the type of products being purchased. For example, the husband has the dominantinfluence in purchasing the car and different types of insurance but the wife has the dominant
  26. 26. influence in purchasing cleaning products, food, and clothing. From changes in family composition,a study has drawn the following implications for marketers: Declining family size affects marketers who sell products that appeal to large families (largepackage sizes of products). The young divorced stage may be a good segment for small appliances, personal services(health spas and sports clubs) Middle–aged childless couples and divorced individuals with no children to support mayrepresent a good market for luxury goods and services. Middle – aged divorce parents may seek low-priced products. Random environmental factors also can shape consumer‟s behaviour. Weather, forexample, determines the demand for specific products. Hot weather areas increase the demand forair-conditioners and cooling beverages. Also, epidemics or a disease may request purchasingspecific medications. A government announcement can affect consumer‟s attitudes and purchasebehaviour. A disease largely spread among animals may cause a drop in demand for meat or relatedproducts. International situations can influence consumer‟s behaviour. The oil crisis affected theway consumers evaluated automobiles. Changing technology is constantly influencing consumer‟sbehaviour. Video projectors replaced other projection equipment. 3. Market-initiated influences. Buyer behaviour influences which are controllable by themarketer‟s own organisation are of major interest. In formulating the marketing programme of afirm, the marketing decision-maker should view the different components (product, price,distribution, personal selling, and advertising) as an integrated package, which the consumer willperceive as a single offering. Marketing elements are seen by the consumer as only part of the totalpurchase environment. A price can be high or low relative to the consumer‟s income, need forquality and perceived quality of the brand. Consumer‟s behaviour concerns the study of the following questions: what, when, how,where and why people do or do not buy products. It attempts to understand the consumerdecision making process, both individually and in groups. It studies characteristics of individualconsumers and behavioural variables in an attempt to understand peoples needs and wants andalso tries to assess influences on the consumer from groups such as family, friends, referencegroups, and society in general. Consumer‟s behaviour is a complex process comprising all theactivities people engage in when they search for, select, purchase, use, evaluate and disposeproducts and services in order to satisfy their needs and desires.
  27. 27. 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 choice3.7..Different Segments of Indian ConsumerThe SocialitesSocialites belong to the upper class. They prefer to shop in specialty stores, go to clubs onweekends, and spend a good amount on luxury goods. They are always looking for somethingdifferent. They go for high value, exclusive products. Socialites are also very branding consciousand would go only for the best known in the market.The ConservativesThe Conservatives belong to the middle class. The conservative segment is the reflection of the trueIndian culture. They are traditional in their outlook, cautious in their approach towards purchase;spend more time with family than in partying and focus more on savings than spending. Slow indecision making, they seek a lot of information before making any purchase. They look fordurability and functionality but at the same time is also image conscious.The Working WomenThe working woman segment is the one, which has seen a tremendous growth in the late nineties.This segment has opened the floodgates for the Indian retailers. The working woman today hasgrown out of her long-standing image of being the homemaker. Today, she is rubbing shoulderswith men, proving herself to be equally good, if not better. Working women have their own mind indecision to purchase the products that appeal to them.The YouthThe “rise of next generation” has been written about with unbridled optimism andenthusiasm, based on the coming of age of liberalization children. They are global in theirworldwide view and have been exposed to enormous information unlike their parents raised amidsta consumption-friendly and consumption encouraging social discourse. They are expected to be atthe forefront of creating a new, modern, west-embracing consumer society, as well as yield thedemographic dividend that will drive economic growth
  28. 28. Revolution in Indian Consumer Behaviour· Rising disposables incomes(higher buying power)· Male no longer the sole income generator· Enjoys travelling, shopping and eating out· Increased indulgence in entertainment and lifestyle products· Pester power, Seeking variety· Seeking value for money(High quality and price consciousness)· Technology Savvy (Internet, Mobiles, Voice Recognition…)· Getting used to speed of service· Convenience seekers
  29. 29. 4)Existing Players in the indian marketBefore the liberalization of the Indian economy, only a few companies like Kelvinator, Godrej,Allwyn, and Voltas were the major players in the consumer durables market, accounting for no lessthan 90% of the market. Then, after the liberalization, foreign players like LG, Sony, Samsung,Whirlpool, Daewoo, and Aiwa came into the picture. Today, these players control the major shareof the consumer durables market.Consumer durables market is expected to grow at 10-15% in 2007-2010. It is growing very fastbecause of rise in living standards, easy access to consumer finance, and wide range of choice, asmany foreign players are entering in the marketWith the increase in income levels, easy availability of finance, increase in consumer awareness,and introduction of new models, the demand for consumer durables has increased significantly.Products like washing machines, air conditioners, microwave ovens, color televisions (CTVs) areno longer considered luxury items. However, there are still very few players in categories likevacuum cleaners, and dishwashersConsumer durables sector is characterized by the emergence of MNCs, exchange offers, discounts,and intense competition. The market share of MNCs in consumer durables sector is 65%. MNCsmajor target is the growing middle class of India. MNCs offer superior technology to theConsumers whereas the Indian companies compete on the basis of firm grasp of the local market,their well-acknowledged brands, and hold over wide distribution network. However, the penetrationlevel of the consumer durables is still low in India.4.1..Classification of consumer durables sectorThe Consumer Durables industry consists of durable goods and appliances for domestic use such astelevisions,refrigerators, airconditioners and washing machines. Instruments such as cellphones andkitchen appliances like microwave ovens are also included in this category.The sector has been witnessing significant growth in recent years, helped by several drivers such asthe emerging retail boom, real estate and housing demand, greater disposable income and an overallincrease in the level of affluence of a significant section of the population. The industry isrepresented by major international and local players such as BPL, Videocon, Voltas, Blue Star,MIRC Electronics, Titan, Whirlpool, etc.The consumer durables industry can be broadly classified into two segments: Consumer Electronicsand Consumer Appliances. Consumer Appliances can be further categorised into Brown Goods andWhite Goods. The key product lines under each segment are as follows.Kitchen Applicances/Brown Goods Consumer Electronics
  30. 30. Consumer Durables Consumer Consumer Others Like Appliances Electronics Jewellery,Watche s etc Mobile phones Brown Goods/Kitchen Television White goods Appliances MP3 Player Mixer DVD PlayerRefrigerator Grinder VCD Player Washing machine Iron Computers Air Electric fans TelephonesConditioner Cooking range Camera/camcorders Speakers & Chimneys Home Theatres Audiocomponents Microwawe oven Sewing machinesElectric Fans Cleaningequipments
  31. 31. 4.2..Scope1. In term of purchasing power parity (ppp), India is the 4th largest economy in the world andovertake Japan in the near future become the 3rd largest.2. Indian consumer durable market is expected to reach $400 billion by on 20103. India has the youngest population amongst the major countries. There are lot of people in thedifferent income categories nearly the two third population is below the age of 35 and nearly 50% isbelow 25.4.. There are 56 million people in middle class, who are earning us$4,400-US$21,800 a year. Andthere are 6 million rich household in India.5. The upper-middle and high-income household in urban areas are expected to grew to 38.2 millionin 2007 as against 14.6 million in 2000.4.3..BRANDS IN CONSUMER ELECTRONICS SECTORMNCs NATIONAL REGIONALLG )SAMSUNG ) KOREA ONIDA BUSHHYUNDAI) VIDEOCON CROWN BPL SALORATCL ) CHINA GODREJ T-SERIESHAIER ) VOLTAS WESTON IFB OSKARPHILIPS ) HOLLANDPANASONIC )SHARP )HITACHI )SANSUI ) JAPANAKAI )AIWAWHIRLPOOL )India‟s Consumer Durable industry is dominated by some of the top players like Voltas,Kelvinator, Allwyn and Godrej, but after liberalization many foreign companies has also enteredthe consumer durable industry in India.
  32. 32. Some of the major category of good coming under consumer durable industry is washingmachines, air-conditioners, refrigerators and CTVs. Some of the top players presentlydominating the consumer durable industry in India are:Top players in consumer durable industry:• Nokia India• LG Electronics India Limited• Philips India• Titan Industries• Samsung India Electronics• Whirlpool Appliances• Siemens• Sony India• Videocon Industries• Blue StarSome of the details regarding these top players in the consumer durable industry in India is givenbelow:Nokia India:Nokia India is a world leader in mobile phone industry and they have built a diverse productportfolio with a view to meet the mobile phone requirement of different types of consumer. Theirproduct ranges from an entry-level mobile phone to an advance mobile phones with severalapplications and multimedia facilities like gaming, music and imaging.LG Electronics India Limited:LG Electronics India Limited came into existence in the year 1997 and they have manufacturingunits at Pune, Delhi and greater Noida for manufacture of consumer durable goods liketelevisions, IT products, vacuum cleaners, audio devices, microwave ovens, washing machines,refrigerators, air conditioners, etc…Philips India:Philips India are leaders in the production of different consumer durable products like domesticappliances, personal care products, etc… Their product range includes household products,kitchen appliances, personal care products, accessories, phones, PC products, portableentertainment and televisions.
  33. 33. Titan Industries:Titan Industries came into existence in the year 1984 and it is a joint venture between TamilNadu Industrial Development Corporation and the Tata Group. They are dealing with consumerdurables like sunglasses, jewelry and watches. Their jewelry business is being done in the nameof Tanishq.Samsung India Electronics:Samsung India came into existence in the year 1995 and they are dealing with differentbusinesses like household business, consumer electronics business and IT business. Theirproduct range includes washing machines, refrigerators, color monitors and color televisions.Whirlpool Appliances:Whirlpool Appliances came into India in the late 1980s and this company was established injoint venture with TVS group. They are having their business in 170 countries and in the year1995, they acquired Kelvinator India Ltd, which was a consumer durable company by itself.Siemens:Siemens have their operations in more than 190 countries and they have an employee base ofmore than 4 lakh employees all over the world. They have more than 15 sales offices andmanufacturing units in India. They are engaged in different businesses like lighting,transportation, healthcare, information and communications, energy and automation & control.Sony India:Sony India came into existence in the year 1994 and they have more than 7000 channel partners,more than 200 Sony exclusive outlets in the name of Sony World and more than 20 direct branchlocations. They are dealing with nearly 20 different products in the consumer durable industry inIndia.Videocon Industries:Videocon is actually based in India and they are dealing with a variety of home appliances andconsumer electronics. Their product variety include consumer electronics, glass, Thompsonproducts, Oil & gas.Blue Star:The main product dealt by Blue Star is central air conditioners. They are the leading producers ofAir-conditioners in India and they have made their presence felt in different countries likeAfrica, South East Asia and Middle East.These consumer durable companies are operating with the main objective of meeting therequirement of a wide range of consumers belonging to different financial strata and thesecompanies have reached this place mainly because of the satisfaction they offered to theircustomers.
  34. 34. TODAY Consumer durables sector is characterized by the emergence of MNCs, exchange offers,discounts, and intense competition. The market share of MNCs in consumer durables sector is 65%.MNCs major target is the growing middle class of India. MNCs offer superior technology to theLG, SAMSUNG the two Korean companies has been maintaining the lead in the industries with LGbeing leader in almost all the categories.The company, having a turnover of Rs 9,500 crore and market share of 26 per cent, is investing Rs360 crore on brand-building and other marketing initiatives and around Rs 140 crore on researchand development, besides launching new platforms in information technology and related areas
  35. 35. 4.4…1)MARKET SHARE OF CONSUMER APPLIANCE AND CONSUMERELECTRONIC:-
  36. 36. 2)Market share of consumer appliances and consumer electronic:-
  37. 37. 3)Position of CTV in various states in India-
  38. 38. 4)Position of AC in various States in India-
  39. 39. 5)Position of Audio & Home Theater in various in India-
  40. 40. 6)Position of DVD in various in India-This analysis is based on the survey which represent the position of different consumer durablesin various states in India. I select different brand in different category as per the market share andthe demand of product in market. This analysis represents the market position of differentconsumer durables during the period of March 2010. It shows that LG has captured maximummarket share almost in everycategory. LG and Samsung have the maximum market in consumer durable market but LGdominate the almost all the category in consumer durable.Prominent consumer electronic company, LG Electronics Inc. has said that it expects the sale of itsproducts in India to up by 15 per cent in 2010. Moon Bum Shin, managing director of LGElectronics India has said that the company has earmarked 4.8 billion rupees for investment purposein India this year. The said money will be used to market as well as manufacture new products.
  41. 41. 5.)….RESEARCH METHODOLOGYResearch methodology is considered as the nerve of the project. Without a proper well-organizedresearch plan, it is impossible to complete the project and reach to any conclusion. The project wasbased on the survey plan. The main objective of survey was to collect appropriate data, which workas a base for drawing conclusion and getting result.Therefore, research methodology is the way to systematically solve the research problem. Researchmethodology not only talks of the methods but also logic behind the methods used in the context ofa research study and it expl ains why a particular method has been used in the preference of theother methods5.1..MEANING OF RESEARCH –Research in common parlance refers to a search for knowledge. One can also define research as ascientific and systematic search for pertinent information on a specific topic. In fact, research isan art of scientific investigation. The Advanced Learner‟s Dictionary of Current English laysdown the meaning of research as a careful investigation or inquiry especially through search fornew facts in any branch of knowledge. Redman and Mory define research as a “systematizedeffort to gain new knowledge.” Some people consider research as a movement from the knownto the unknown. It is actually a voyage of discovery.Research is an academic activity and such a term should be used in a technical sense. Accordingto Clifford Woody research comprises defining and redefining problems, formulating hypothesisor suggested solutions; collectingorganizing and evaluating data; making deductions and reaching conclusions to determine whetherthey fit the formulating hypothesis. D.Slesinger and M.Stephenson in the Encyclopedia of SocialSciences define research as “the manipulation of things, concepts or symbols for the purpose ofgeneralizing to extend, corrector verifyknowledge, whether that knowledge aids in construction of theory or in the practice of art.”Research is thus an original contribution to the existing stock of knowledge making for itsadvancement. It is the pursuit of truth with the help of study, observation, comparison andexperiment. In short, the search for knowledge through objective and systematic method of findingsolution to a problem is research. The systematic approach concerning generalization and theformulation of a theory is also research. As such the term „research‟ refers to the systematic methodconsisting of enunciating the problem, formulating a hypothesis, collecting facts or data, analyzingthe facts and reaching certain conclusion either in the form of solutions towards the concernedproblem or in certain generalization for some theoretical formulation
  42. 42. 5.2..Marketing Research Process- Defiene the Problem & Research Objective Define the Reserch Plan Collect the Information Analyze The information Present the Findings in ReportStep 1: Define the problem and the research objectivesThe 1st step in research is formulating a research problem. It is most important stage as poorlydefined problems will not yield useful results. Also the marketing management must be carefulnot to define the problem too broadly or too narrowly. In order to identify the research problem,three categories of symptomatic situations, namely, overt difficulties, latent difficulties andunnoticed opportunities should be studied. Overt difficulties are hose which are quite apparentand which manifest themselves. Latent difficulties are those which are not so apparent andwhich, if not checked, would soon become evident. Unnoticed opportunities indicate thepotential for growth in a certain area of marketing. Such opportunities are not clearly seen anddome effort is required to explore them.Step 2: Develop the research planDesigning a research plan calls for decisions on data sources, choice of research design, researchapproaches, research instruments, sampling plan and contact methods.Step 3: Collect the informationOur research group collected the information over a period of 15 days and from various locationssuch as malls, residential complexes, colleges and schools and also retailers
  43. 43. Step 4: Analyze the informationAfter the process of gathering information was completed we tabulated the data and developedfrequency distributions and extracted the findings from the survey.Step 5: Present the findingsFinally we prepared a project report on our survey and along with thefindings we also presented our recommendations.Step 6: Make the decision5.3..Research design:Research design is important primarily because of the increased complexity in the market as well asmarketing approaches available to the researchers. In fact, it is the key to the evolution of successfulmarketing strategies and programmers. It is an important tool to study buyer‟s behavior,consumption pattern, brand loyalty, and focus market changes. A research design specifies themethods and procedures for conducting a particular study. According to Kerlinger, “ResearchDesign is a plan, conceptual structure, and strategy of investigation conceived as to obtain answersto research questions and tocontrol variance.A research design is the detailed blueprint used to guide a research study toward its objectives.The process of designing a research study involves many interrelated decisions. The mostsignificant decision is the choice of research approach, because it determines how theinformation will be obtained.To design something also means to ensure that the pieces fit together. The achievement of this fitamong objective, research approach, and research tactics is inherently an iterative process inwhich earlier decisions are constantly reconsidered in light of subsequent decisions5.4..DATA COLLECTIONThe task of data collection begins after problem has been identified. While deciding about themethod of data collection to be used for the study the researcher should keep in mind two typesof data viz, primary data and secondary.The primary data are those, which are collected afresh and for first time and thus happen to beoriginal in character. The secondary are those which have been collected by someone else andwhich have already been passed through statistical process.The researcher would have to decide which sort of data he would be using for his study. Themethod collecting primary and secondary data differ since primary data are to be originallycollected while in case of secondary data the nature of data collection work is merely that ofcompilation.
  44. 44. There are several ways of collecting primary data. They are as follows: 1.Observation method 2. Interview method 3. Through questionnaires 4. Through schedulesOBSERVATION METHODObservation becomes a scientific tool and the method of data collection for the researcher whenit serves a formulated research. Purpose is systematically planned and recorded and is subjectedto checks and controls on validity and reliability. Under the observation method the informationis sought by way of investigators own direct observation without asking from respondentSurvey(questionnaire to public)Surveys are concerned with decribing,recording,analyzing, and interpreting conditions that existor existed.the researcher does not manipulate the variable or arrange FOR EVENTS TOhappen.surveys are only concerned with conditions or relationships that exist., opinions that areheld, process that are going on,effects that are evident or trends that are developing.they areprimarily concerned with present but at times do consider past events and influences as theyrelate to current conditions.1)surveys type research usually have larger samples because percentage of responses generallyhappen to be low ,as low as 20% to 30% ,especially in mailed questionnaire studies.thus,thesurvey method gathers data relatively from the larger number of cases at a pecular times.2)surveys are the example of field research and are concerned with hypothesis formulation andtesting analysis of the relationships between non-manipulated variables.3)surveys may either be census or sample surveys they may also be classified as socialsurveys,public opinions surveys.COLLECTION OF SECONDARY DATASecondary data means that are already available that is they refer to the data, which have alreadybeen collected and analyzed by someone else. When the researcher utilizes secondary data, thenhe has to look into various sources from where he can obtain them. In this case he is certainly notconfronted with the problems that are usually associated with the collection of original data.Secondary data may be either published or unpublished data. Usually published data areavailable in:-Various publications of the central, state and local government.
  45. 45. -Various publications of foreign government or of international bodies and their subsidiaryorganization.-Technical and trade journals.-Books magazines and newspapers.-Reports publication of various associations connected with business and industry, banks, stocksexchanges etc.-Reports prepared by various scholars‟ universities economists etc in different field.Public records and statistics, historical documents and other sources of publish information. Thesources of unpublished data are many; they may be found in diaries, letters unpublished biographiesand autobiographies and also may be available with scholar‟s research workers. Trade organization,labor bureaus and other public/private organizations.Researcher must be careful in using data. He must make a minute because it is just possible thatthe secondary data may be unsuitable or maybe be inadequate in the context of a problem whichthe researcher wants to study.5.5Selection of appropriate methods for data collection -Nature scope and object of enquiry: This constitutes the most importantfactor affecting the choice of a particular method .the method selected should be such that it suitsthe type of enquiry that is to be conducted in the researcher, this factor is also important indeciding whether the data already available are to be used not yet available are to be collectedAvailability of funds: Availability of funds for the research projectdetermines to a large extent the method to be used for the collection of data. When the funds atthe disposal of the researcher are very limited, he will have to select a comparatively cheapermethod. Finance in fact is big constraint in practice and the researcher has to act within thislimitationTime factor: Availability of time has also to be taken into account indeciding particular method of data collection. Some methods take relatively more time whereaswith others the data can be collected in a comparatively shorter duration. The time at the disposalof the researcher thus affects the selection of the method by which the data is collected.Precision required: Precision required is yet another important factor to beconsidered at the time of selecting the method of collection of data
  46. 46. 5.6..DATA COLLECTION METHODS:After the research problem, we have to identify and select which type of data is to research. At thisstage; we have to organize a field survey to collect the data. One of the important tools forconducting market research is the availability of necessary and useful data.Primary data: For primary data collection, we have to plan the following four important aspects.  Sampling  Research Instrument  Secondary Data - The Company‟s profile, journals and various literature studies are important sources of secondary data.  Data analysis and interpretation 1.Questionnaires 2.Pie chart and Bar chartQuestionnaires:This is the most popular tool for the data collection. A questionnaire contains question that theresearcher wishes to ask his respondents which is always guided by the objective of the survey.Pie chart:This is very useful diagram to represent data , which are divided into a number of categories. Thisdiagram consists of a circle of divided into a number of sectors, which are proportional to the valuesthey represent. The total value is represented by the full create. The diagram bar chart can makecomparison among the various components or between a part and a whole of data.Bar chart:This is another way of representing data graphically. As the name implies, it consist of a number ofwhispered bar, which originate from a common base line and are equal widths. The lengths of thebards are proportional to the value they represent.Preparation of report:The report was based on the analysis and presented with the findings and suggestions. The sampleof the questionnaires is attached with the report itself.
  47. 47. 5.7..Sampling Methodology:Details of the sampling methodology, I have made questionnaire. The one is made for theCustomer.No. of questions in questionnaires for customer: 09No. of question related to consumer behavior 04No. of people met during the research: 200No. of respondents during the research: 50Sample unitProfessionals usiness man BEmployeesHouse wifeWorking womenStudents5.8..ANALYSIS-Q1. Have you purchased any consumer durable during Exhibitions?  Yes  No
  48. 48. 0% 0% 35% Yes 65% NoInferences1. 65 % of Customer have not purchased any consumer durable from exhibitions.2. Only 35 % people have purchased.3. It shows that consumers are coming in the exhibition for knowledge of product and alsothey want to know that weather there is actual price difference in exhibition and shop or not.4. Consumers also want to compare to the different brand which are available in the exhibition.5. So exhibitions are more useful to increases brand awareness.6.People are less interested to purchase product from the exhibitionQ.2 While purchasing consumer durable which parameter influences you?PriceProduct featureBrandServiceDurability
  49. 49. 9% 30% 16% Price Product Feature Brand 26% service 19% DurabilityInference1. 30% of customer gives importance to price. So it shows that Indian consumers are very pricesensitive. They give more importance to price over the brand.2. 26% give importance to brand. So price and Brand matter a lots for the costumers. And they arealso want best brand in best price.3. 19% to product feature Service 16% and durability 9% Service is also a big factor for the customer they are less interested in the durabilityQ3. From where you prefer buying consumer durables?ExhibitionsCo.shoppeeShowroom
  50. 50. 0% 17% 47% Exhibitions Co.shoppee 36% ShowroomInference:1. A majority of customers prefer to buy from showrooms. Very less proposition of customers buysfrom Exhibitions.2. 47% customers are prefer to buy from the showrooms because the showrooms are moreconvenient to customers they also think that these shops give more discounts.3. People are less interested to buy from the exhibition they only visit the exhibition for pricequotation of the product and the comparison of the productQ.4. you prefer to buy from the same as you have mentioned in Q.3 because of followingreasons?  Attractive Price  Service  Demonstrations
  51. 51.  Offers  Convenience 29% 35% Service Demonstration Offers 18% Convenience 18%Inference1. Customers buy from showrooms because of the service and convenience. These are two mainfactors2. Customers are preferred to buy from the showroom because of they think that these convenientstore may provide good after sell service.3. Customer also thinks that there is more chance to bargain and they can get more discounts inthese showrooms.4. Price is also a factor that attract the customer in these showrooms.Q.5… How frequently you change your consumer durables?  1-3 years  3-5 years  5-10 years  More than 10 years
  52. 52. 4% 19% 1-3 Years 54% 3-5 Years 23% 5-10 Years More than 10 YearsInference1. Customers prefer to change consumer durables in more than 10 years. In India people do notchange consumer durable frequently.2. 23% customers change their consumer durable within 10 year.3. It represent that Indian consumer do not prefer to change their consumer durable frequently.Q.6.. Has your friends/relatives opinions influenced you to buy electronics products?a) Strongly agree b) Agree c) Average d) Disagreee) Strongly disagree
  53. 53. 5% 10% 40% Strongly Agree Agree 20% Average Disagree Strrongly disagree 25%Inference- 1. Majority of the customers are influenced by friends/ family opinion in buying electronic products. Among them Youth are the most. 2. There are very few customers who does not influence by their relatives or friends opinion. They are quite conservative.Q.7. what influence you the most while making buying decision?1. Personality2. Lifestyle3. Self- esteem.
  54. 54. 4. Reference groups 20% 20% Personality Lifestyle 30% 30% Self-Esteem Reference group Inference- 1...Majority of the customers are interested in buying electronic products for their personality and Life style. 2. Some people also buy because of their self-esteem means for their acceptance, recognition in society.Q.8.. What initiated you to purchase consumer durables for the first time?A) Word of mouthb) Friendsc) Need Recognition
  55. 55. d) Celebrities/Movies 10% 10% 30% Word of mouth Friends 50% Need recognition Celebrities/MoviesInferences-1. People prefer to buy consumer durables when they recognize need for it or when they areinfluenced by their friends/relatives.2. Very few decide to purchase by influencing with the Celebrities & word of mouth.Q.9..Which segment of consumer mostly influence purchase decision?A) Socialitesb) Conservativesc) Working Women
  56. 56. d) Youth 25% 35% Socialities Conservatives Working womer 10% Youth 30%Inference-1. Youth and working Women Plays an important role in Purchase decision.2.Although socialites play lesser role than youth and working women, but yet they can‟t beignored.
  57. 57. 6)Key findingsThe sector has been witnessing significant growth in recent years, helped by several drivers such asthe emerging retail boom, real estate and housing demand, greater disposable income and an overallincrease in the level of affluence of a significant section of the population. The industry isrepresented by major international and local players such as BPL, Videocon, Voltas, Blue Star,MIRC Electronics, Titan, Whirlpool, etc.The electrical appliances industry, which had been focused on the urban market, is now reaching outto semi-urban and rural markets as well, because of the shiftin living style of the population, increasing electrification of villages and relatively higherpurchasing power of consumers. As the market penetrates into the coremiddle class segment in both urban and rural areas, it is expected to expand phenomenally, offeringlarge volumes to the industry.ComputersComputers accounted for around 33% of Indian consumer electronics spending in 2009. BMIforecasts Indian domestic market PC sales (including notebooks and accessories) of US$6.4bn in2010, up from US$5.3bn in 2009. Sales were up by as much as one-third in Q110 compared withthe same period of the previous year. With PC penetration currently around 2%, computer hardwarecompound annual growth rate (CAGR) for the 2010-2014 period will be around 15%.AVIndia‟s domestic video, audio and gaming device market is expected to grow to a value ofUS$19.5bn in 2014. Television will remain the core product in this category, with sports eventssuch as India Premier League cricket and the 2010Commonwealth Games in Delhi helping to drive demand for TV set upgrades. LCD TV set salesgrew almost 100% in 2009 and are projected to reach around 2.5mn units in 2010.Mobile HandsetsIndian mobile handset sales accounted for around 33% of Indian consumer electronics spending in2009. Total Indian market handset sales are expected to grow to 220.7mn units in 2014, as mobilesubscriber penetration soars towards 133%. Vendors are likely to increase their focus on semiurbanrural customers, with penetration in rural areas estimated at less than 15%, far below the nationallevel. Smartphones and touch-screen models are a strong growth area, with Indian and multinationalvendors competing to offer phones with perceived high-end features at affordable prices.
  58. 58. Other reasons-Young Population with rising incomes45% of the Indian population is below 25 years which accounts to close to 500 millionconsumers (18+) of which 230 million are in Urban India. With the rising incomes and educationlevels, the discretionary expenditure is increasing.  Availability of Easy Credit OptionsWith all the major players offering easy EMI schemes and with the increasedpenetration of Credit cards, the Indian consumers now have an easier access to consumer electronics  Changing Consumption PatternsGone are the times when people bought electronics with the intension of using itfor years together. With increasing speed of innovations and as new technologiescome in, the Indian consumer wants the latest and the best. Now mobile phonesare changed every year, laptops once in 2 years ,etc. People want to be trendy andare becoming gizmo frenzy.  Falling Prices of Consumer ElectronicsWith new models, products and more competition, prices are being driven even further down.Especially in the mobile phone segment, prices fall as much 20% after 6 months after introduction.
  59. 59. CUSTOMER SURVEY FINDINGS1. Secondary supports play an important role in the customers mind and create awareness among thecustomers. The secondary support includes Demonstration, Exhibition & Even Sponsors.2. From the survey it was found out that the majority of customers don‟t buy consumer durablesfrom exhibitions. They just visit the exhibitions to see the co. latest model.3. They want to buy from the showrooms or from co. showrooms. For them service is important.Beside convenience and other factors service is key factor.4.Also majority of customers do not want any financing scheme for purchasing the durables.5. Customers are also now very choosy in buying the product and it is important for the company tomake loyal customer of their brand.6. In survey we found that LG has captured maximum market share in every category. LGdominates CTV, LCD, and Refrigerator, and Washing machine, category.7. LG and Samsung have bottle neck competition in TV and REF. category.8. The product is well aware and it is on top of mind of customer
  60. 60. 7)Some Statistics-Consumer electronics (durables) sector continues to be the main stay of the Indian electronicindustry contributing about 32 per cent of the total electronic hardware production. By theend of 2005-06, the market for consumer durables (including entertainment electronics,communitarian and IT products) was Rs 180 billion (US $4.5 billion). The market isexpected to grow at 10 to 12 per cent annually and is expected to reach Rs 60 billion (US$13.3billion) by 2008. The urban consumer durables market is growing at an annual rate of seven to 10per cent, the rural durables market is growing at 25 per cent annually. Some high-growth categorieswithin this segment include mobile phones, TVs and music systems.Source:- Isuppli Markets(Indian market intelligence service)
  61. 61. 8)Challenges to the electronics industry-  Price WarsWith the increase in price wars due to the entry of new players in the market and increase inmanufacturing capacity by some original manufacturers, the profitability and margins of thecompanies are adversely affected. Hence companies need to increase focus on product / storedifferentiation to address various segmental specific needs  Lack of Distribution Networks and Logistics ManagementGetting stock into a store in India is a massive challenge given the poor city roads andcomplex intra city transportation regulations , high cost of moving goods between starts, inefficientstorage ( e.g. small store backrooms owing to expensive real estate). It is of utmost importance todesign an efficient network. Transportation, including railway systems, highways has to meet globalstandards. Airport capacities, power supply, warehouse facilities and timely distribution are otherareas which need to be enhanced. The distribution network is also highly fragmented and is verypoor in semi-urban and rural areas.  Presence of Gray Market in Consumer ElectronicsPresence of gray market in consumer electronics products, especially in DVD player,music players is definitely eating into the sales of the retailers. Counterfeit products are presentacross a wide range of products.  Increasing Awareness of the Indian ConsumersWith the increase in access to Internet information, and availability of wide range ofchoices, consumers have become quite smart. They want the product that is easy-tohandle, good inquality and low in price. Most importantly, consumers want someguarantee for the product that they are buying. The role of electronic companies doesnt end on thesale of the product, but continues till the end of guarantee period.  Trained manpower shortage in IndiaThere is lack of talent in consumer electronics retailing. Retailers need to spend heavily on trainingits sales force to match the expectations of the Indian consumers both in terms of technicalknowledge and soft skills.
  62. 62. 10)Limitations of the project-Every study has certain limitations. In my study, also there were certain limitations, which I couldnot able to solve.1. The research was conducted in a very small area.2. My research work period witness the biggest ups and downs in product sale of different brands,which affected the perception of the customer. This was biggest drawback of my study.3. The customer filled the questionnaire mostly in careless manner, so it was difficult to make themhold for time.4. I had only found the upper-middle class family to fill up the questionnaire, but generally, anAverage middle class family was required for the study.5.The sample size is also very small which represent my research on consumer behavior
  63. 63. ConclusionThe consumer durables industry in India is set for sustained growth over the long term, fuelled byfavourable consumer demographics, overall growth in services and industrial sectors andinfrastructure development in suburban and rural areas. Several Indian and MNC players arelooking to strengthen their presence in India to leverage this opportunity.Success in the long-term will require firms to develop a wide and robust distribution network,differentiate their products in areas of relevance to the consumer and innovate in the areas ofpromotion, product financing, etc. The product and approach to market need to be customised tosuit the unique needs of the Indian market.
  64. 64. BIBLIOGRAPHY  www.lgindia.com  www.google.com  www.wikipedia.com  “India Consumer Electronics Report Q4 2010”  “India Consumer Electronics Report Q2 2011”

×