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I hereby declare that the work, which is being presented in this project, entitled “Advent of LCD TVs and their future prospects in India” is an authentic record of my own work carried out by me under the supervision and guidance of Mr. S.Thiyagarajan, Project Guide, BHAI PARMANAND INSTITUTE OF BUSINESS STUDIES, Shakarpur, Delhi. This project was undertaken as a part of the Summer Training Project as per the curriculum of “Guru Gobind Singh Indraprastha University, Delhi” for the partial fulfillment of MBA from “Bhai Parmanand Institute of Business Studies, Shakarpur”. I have not submitted the matter embodied here in this project for the award of any other degree/diploma.
ASHUTOSH FOTEDAR ROLL NO. 0031143908 M.B.A., THIRD SEMESTER BHAI PARMANAND INSTITUTE OF BUSINESS STUDIES, SHAKARPUR, DELHI
This is to certify that Mr. Ashutosh Fotedar Roll No. 0031143908, Student of MBAIIIrd Semester, has satisfactorily completed his Project Research Title- “Advent of LCD TVs and their future prospects in India” as a part of Summer Training Project under my guidance for the partial fulfillment of M.B.A degree under Guru Gobind Singh Indraprastha University, Delhi for the year 2009-10.
Mr. S.THIYAGARAJAN [MBA- IN- CHARGE] BPIBS, SHAKARPUR
The project entitled “Advent of LCD TVs and their future prospects in India” was a challenging assignment for me and required an improved environment, extensive endeavor and all necessary support. I take this opportunity to express my gratitude to Mr. Vijay Sharma and Mr. S. Thiyagarajan my Project Guide on behalf of the company and college respectively for their able guidance, cooperation and out of box thinking without which this project would not have been exciting at all. The successful progression of my project also gives me the opportunity to acknowledge and appreciate the staff of the organization as well as of the college that provided me much needed stimulating suggestions and encouragement in order to steer this project towards completion.
The exploratory research was carried out with 50 respondents with a set of 20 open and close ended questions. like refrigerators. has made the country’s consumer electronics industry highly dynamic. on the back of rapid economic growth. To find out the reasons influencing the minds of the common man a marketing research was carried out by me. representing vast room for future growth. The exploratory findings helped me in determining the key factors which needed to be further explored for making the marketing strategy for my company. This is attracting many foreign majors to the country. the present report is prepared to formulate a marketing strategy for increasing the market share of the company in case of the sale of LCD TVs. The response format was of a mixed variety which also helped in better determination of outcomes. The survey was conducted by me by visiting 50 dealers of consumer electronics in North Delhi region. Television continues to be the mainstay of the consumer electronics industry in India with the transition slowly occurring to newer technologies such as LCD and PDP. such as retail boom. But still. The industry has been witnessing significant growth in recent years due to several factors.EXECUTIVE SUMMARY India has an increasingly affluent middle class population that. 4 . Keeping the above fact in mind. Each of the questions was designed to satisfy at least one of the secondary objectives of the research. the consumer electronics goods. growing disposable income and availability of easy finance schemes. microwave and washing machines have low penetration in the country.
3 1.6 2 2.2 2.4 4 5 6 7 7.2 3.CONTENTS Chapter No 1 S.4 3 3.3 2.1 3.1 2.2 8 9 Topic Consumer Electronics Industry Worldwide Consumer Electronics Industry Indian Consumer Electronics Industry Trends in Indian Consumer Electronics Industry Competition Overview Policy and Initiatives Challenges and Opportunities Company Profile Introduction Vision Key People Future Goals Essential Theory Liquid Crystal Display Television Marketing Mix Branding Process Consumer Decision Process Research Report Data Analysis and Interpretation Observations and Findings Conclusion and Strategy Conclusion Proposed Marketing Strategy Bibliography Annexure Page No 06 07 09 13 15 17 21 23 24 25 25 26 28 29 39 47 75 79 82 98 100 101 101 105 107 5 .5 1.1 1.4 1.1 7.3 3.No 1.2 1.
video and information technology is a major reason. Consumer electronics appliances such as digital televisions. These changes began nearly two decades ago and have resulted in an avalanche of state of the art electronic devices in the 6 .1 Worldwide Consumer Electronics Industry The consumer electronics industry is a global business. portable media players and educational toys are in a state of constant flux.CHAPTER . In recent years. The convergence of digital-based audio. It is ushering in a dawn of convergence. of technologies.1 CONSUMER ELECTRONICS INDUSTRY 1. products and markets. witnessing a phenomenal growth. the consumer electronics industry is in the midst of a new wave of change.
still camera. It has also witnessed the emergence of mobile telecommunications technology.4 percent in 2007.1 percent growth rates of the previous two years. growing by just 2. computer monitor and LCD TV. Miniaturization also accelerates the growth of the consumer electronics industry. play and communicate anywhere. Global consumer electronic sales are expected to top $724 billion this year.2 billion units. miniaturization and mobility are the key elements for modern consumer electronic products. Digitalization transformed the consumer electronics sector. the CEA forecast.market. delivering new and exciting entertainment products that have changed the way we live.7% to $694 billion in 2008. from mobile phones to televisions to computers. Mobile phones accounted for 26. down from the 10. Mobile phone sales grew by 13 percent in 2008 and by 15. “Liquid crystal displays will grow slower in 2009 but will still achieve double digit unit and 7 . Digitalization. consumer confidence at lows and consumer electronics companies suffering. Still with the economy in a downturn. making its way into the family living room. It paved the way for digital devices such as camcorders. this year’s growth will only be 4. anytime will continue to drive innovation and CE sales. While sales grew 13. Microsoft-based Media Centre PCs have pushed the two industries even closer together than before.5 percent and 9.6 percent in 2009 to 232 million units." Television sales are expected to grow by 2.1 percent this year over last year to 1. The demand for a multitude of portable. in-home or in-car consumer electronic items with multiple functions has increased tremendously. according to the Consumer Electronics Association. The CEA said that although mobile phone growth was expected to slow "the macro trend of work.3%. personal media players. HDTV’s with VGA connections and SD/MMC card slots. DVD player/recorder. any growth is sure to be welcome. The slowdown in 2009 is expected to affect products virtually across the board. The computer industry has also benefited.7 percent of total revenue last year but sales are expected to slow in 2009. incorporating both digital visual and digital MP3 capabilities.
2 percent over 2008 but still a significant drop from the 17. Brazil and India now account for nearly one-fourth of worldwide consumer electronics revenue (24 percent) while North America and Western Europe combined account for 37. televisions. It said that in 2005. "Plasma displays are forecast to achieve positive unit growth and negative revenue growth. "Unit sales of portable navigation grew 55 percent in 2008 and are expected to grow another 22 percent in 2009.It said the game console market is expected to grow by 5. energy efficiency and recycling potential. packaging. "Laptop PCs are expected to continue to generate double digit increases in units and revenue in 2009." the CEA said." The CEA's 2009 outlook for computer sales is somewhat better.4 percent in units and 1. Companies that are capable of change and those that develop branding will be most successful. The trade association said the trend towards "no strings attached" wireless devices would accelerate along with increased touch screen and voice activation technology. with growth forecast at 8.7 percent." The ratio of laptop PC sales to desktop PC sales is expected to continue to widen this year with 63 percent of the computers sold in 2009 expected to be laptops. Russia. Fundamentally. DVD players and other household electronics face the same challenges as other consumer goods 8 . As for trends to watch this year. the CEA said. with North America accounting for the largest percentage of Blu-ray sales followed by Western Europe and Japan." the CEA said. The CEA said emerging powers China. The CEA said MP3/digital media players were expected to generate "strong sales" in 2009 along with portable navigation GPS units.8 percent growth of last year. the CEA said. Blu-ray DVD sales were expected to nearly double in both unit sales and revenue in 2009. the changes in the consumer electronics industry are not being driven by product evolution. but by fluctuations in the industry's business models.1 percent in revenue in 2009. Consumer electronics companies producing computers. the ratio of desktop PC unit sales to laptop PC unit sales was 58 percent to 42 percent. "Desktops will experience declines in both units and revenue." the CEA said. the trade association said to expect products that were environmentally friendly in terms of the materials used.revenue growth worldwide.
Samsung can claim to be the world's fastest growing electronic company. Growing consumer confidence due to rising disposable incomes. The growth is aided by a multitude of factors. The rapidly falling prices and improved functionality provided by convergence are influential forces behind the growing consumer demand for electronic items. Expanding distribution networks. Increased local manufacturing. on the back of rapid economic growth. The European market share is expected to take a drubbing due to the growing demand for consumer durables in the Asia Pacific consumer electronic market. a factor that makes demand. 3. World famous brands such as Sony. Japanese companies have captured the consumer electronics market. including: 1. Easy financing schemes that are making purchases possible. has made the country’s consumer electronics industry highly dynamic. differentiation and flexibility are critical to a company’s survival in the consumer electronics market.companies. Panasonic and Matsushita are all owned by these Japanese manufacturers. 2. The lifecycle of consumer electronics products is shrinking along with severe price deflation. 4. 1. 9 . Innovation. The Asia Pacific region is the market leader wielding the biggest chunk of the market. pricing and promotions management even more challenging. closely followed by Europe.2 Indian Consumer Electronics Industry India has an increasingly affluent middle class population that. Korean companies such as Samsung and LG are all trying to join the Japanese bandwagon.
increasing consumer awareness and introduction of new models. Products like air conditioners are no longer perceived as luxury products.2 13. The figure presents iSuppli's estimates and projections for the size of the Indian audio/video consumer electronics industry for the period of 2004 to 2011.9 12.8 11. demand for consumer durables has increased with rising income levels.7 16. Given the government's inclination to cut back spending. availability of credit. This has not favoured durable companies till now. rural electrification programs have always lagged behind schedule. double-income families.8 18 Rs billion Rs billion 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 Year In consonance with the global trend. One of the critical factors those influences durable demand is the government spending on infrastructure.Growth of Consumer Electronics Production in India 18 16 14 12 10 8 6 4 2 0 15. 10 . changing lifestyles. Any incremental spending in infrastructure and electrification programs could spur growth of the industry. especially the rural electrification program. over the years.
13 crore ($3. especially the Korean chaebols.5 billion) in 2007.18. thereby creating a niche for themselves. By conducting consumer research. 931. 897. the consumer electronics industry in India is poised for strong growth in the years to come. With a market size of Rs.59 billion) by 2011. predicts the Indian audio/video consumer electronics industry will grow to Rs.13 crore ($6. FPD remains a focus area.89 billion) in 2006. Most players in the consumer-electronics industry have introduced products in the FPD segment. Television continues to be the mainstay of the consumer electronics industry in India with the transition slowly occurring to newer technologies such as LCD and PDP. Several companies are conducting market research in order to understand the psyche of an Indian consumer. 390 crore ($4. ISuppli Corp.15. companies are trying to identify customer requirements. catering to a population of more than 100 crore people. LG in 2006 launched a range of TVs from 21 inches to 29 inches in size that were designed based on the company's research on consumer preferences for television 11 . rising at a Compound Annual Growth Rate (CAGR) of 10. thereby incorporating specific design elements into their products. and for few companies. The inputs from this research are determining product attributes and pricing and accordingly are achieving better acceptance among consumers.0 per cent from Rs.26. For example. Companies are focusing on customizing products to suit Indian tastes.The consumer electronics market is one of the largest segments in the electronics industry in India.
Furthermore. although they often have poor quality. fabless companies are suitable to cater to such development because they can assist in moving the industry up the value chain by creating design-service opportunities for the Indian market. Domestic consumption is reaching significant size to trigger manufacturing in the electronics sector. although such relationships represent an extension of their global relationships. rural consumers have been inclined to buy these products. India also is assuming a significant place in the global plans of several major electronics manufacturers. The move has positively impacted sales for companies opting for rural expansion. thereby positioning it also as an export base. rationalizing duties and creating export-promotion zones. companies are expanding their distribution networks in these areas. As the local market gains size. they are expected to show a preference for branded products. EMS and ODM companies in India have been associated with several design companies. rural consumers have not been as brandconscious as their urban counterparts. these associations will become more common. the trend is gradually changing. Due to the lower prices of unbranded products. such as Flextronics' deal with in Silica for the development of SOC devices. As the awareness among rural consumers rises. This is reflected by the fact that established players are reporting years to come. Although electronics production has remained a miniscule portion of overall Indian manufacturing for a long time. However. higher sales of products in rural areas. This is in alignment with India figuring into the plans of several companies that want to cater to the domestic and export markets. However. ISuppli expects domestic manufacturing to be a key characteristic of this growth in the 12 . In order to tap semi-urban and rural demand. such instances are few and far between. some local partnerships also are appearing. The government has been focusing increasingly on developing the manufacturing sector by developing infrastructure. Currently.sets.
audio/video appliances. and PC market. It provides an insight into the emerging and potential future trend in all the categories and highlights the key strategies that need to be worked upon to get success in the highly competitive industry.Television .Microwave Oven . 'Booming Consumer Electronics Market in India” offers extensive research on various consumer electronics products that are broadly classified as home appliances.MP3 Players . The report thoroughly analyzes the historic performance and future prospects. underlining the future potential areas and key issues crucial for the industry development.Washing Machines (Semi-automatic & Fully Automatic) . offering 4year industry forecast. of following consumer electronics products: .3 Trends in Indian Consumer Electronics Industry RNCOS research report finds that since the penetration of several products like TVs and refrigerators are reaching saturation in the urban areas. the markets for these products are shifting to the semi-urban and rural areas. This analytical research thoroughly evaluates the Indian consumer electronics industry.Refrigerator (Frost-free & Direct Cool) .Digital Camera & Camcorder .Set-top Box .Air Conditioner . It briefly discusses about the current and emerging trends in the industry.Mobile Handsets . mobile handsets.1.PCs (Desktop & Notebook) 13 .
the Indian consumer electronics industry is forecasted to grow at a rapid rate of 10% to 12% in the coming few years.Propelled by growing middle class population. . .The low penetration level of consumer electronics goods coupled with increasing preference for comfort and luxurious goods are widely attracting the foreign as well as domestic players to the industry. demand for MP3 players and digital video appliances are anticipated to surge at double-digit rate in near future. the split between CRT and FPTV is around 97% and 3% respectively.Driven by young population. are anticipated to drive the Indian refrigerators market over the forecast period. certainly growing at a much faster pace than the direct-cool category. Currently. .The AC market in India is projected to grow at 30% to 35% for the coming few years.The market for televisions in India is changing rapidly from the conventional CRT technology to Flat Panel Display Televisions (FPTV). . . changing lifestyle and rapid urbanization. .Volume sales of washing machine will be driven by growth in fully automatic category during 2008-09 to 2011-12. 14 .Key Research Findings: .Frost-free refrigerator sales. and the share of FPTV is projected to increase at robust rate in near future.
Bauknecht. operating 77 subsidiaries around the world with over 72. The Samsung manufacturing complex housing manufacturing facilities for Colour Televisions. Whirlpool is the most recognized brand in home appliances in India and holds a market share of over 25%. Colour Monitors and Refrigerators are being exported to Middle East. The parent company is headquartered at Benton Harbor. 375 crores. USA with a global presence in over 170 countries and manufacturing operation in 13 countries with 11 major brand names such as Whirlpool. Michigan.1. LG India LG Electronics was established on October 1. San Francisco. Tokyo. Laden and Ignis. Shanghai and Romen.000 employees worldwide it is one of the major giants in the consumer durable 15 . near Delhi. Pondicherry and Pune.4 Competition Overview Samsung India Samsung India commenced its operations in India in December 1995. Samsung India has its headquartered in New Delhi and has a network of 19 Branch Offices located all over the country. Los Angeles. In the year ending in March '06. Roper. The company owns three state-of-the-art manufacturing facilities at Faridabad. Samsung ‘Made in India’ products like Colour Televisions. 1958 (As a private Company) and in 1959. Today. today enjoys a sales turnover of over US$ 1 billion in just a decade of operations in the country. LGE started manufacturing radios.1. Refrigerators and Washing Machines is located at Noida. According to IMRB surveys Whirlpool enjoys the status of the single largest refrigerator and second largest washing machine brand in India. CIS and SAARC countries from its Noida manufacturing complex. Kitchen Aid. Colour Monitors. Samsung design centers are located in London. with around 18% of its employees working in Research & Development. Estate. Whirlpool of India Whirlpool was established in 1911 as first commercial manufacturer of motorized washers to the current market position of being world's number one manufacturer and marketer of major home appliances. Samsung India currently employs over 1600 employees. the annual turnover of the company for its Indian enterprise was Rs.
the Company was incorporated with limited liability on March 3. The Company has Representative Offices in Sharjah (UAE). Sony India Sony Corporation.270 million). The company was entered into a joint venture with Sharp Corporation. Sony has its distribution network comprising of over 7000 channel partners. Colombo (Sri Lanka). more than 2. The Company has a network of 38 Company-owned Retail Stores.000 Retail Outlets.200 Wholesale Dealers. In India.a leading manufacturer of 16 . Godrej India Godrej India was established in 1897. Sharp India Ltd Sharp India ltd was incorporated in 1985 as Kalyani Telecommunications and Electronics Pvt Ltd. home theatre systems and optical storage systems. under the Indian Companies Act. The combined Sales during the Fiscal Year ended March 31. DVD players. amounted to about Rs. The company also has presence across the country with 21 company owned and 172 authorized service centers. Nairobi (Kenya). The company has as many as 27 R & D centers and 5 design centers. 215 Sony World and Sony Exclusive outlets and 21 direct branch locations. Riyadh (Saudi Arabia) and Guangzhou (China-PRC).000 million (US$ 1. 2006. established its India operations in November 1994. Japan . Japan. the company was converted into a public limited company in the same year. It's global leading products include residential air conditioners. 58. The Company is one of the largest privately-held diversified industrial corporations in India. The name was changed to Kalyani Sharp India in 1986. 1932. Toshiba had a presence in India since 1985 and was represented in India through their Liaison Office. CDMA handsets. 1913. and more than 18. Toshiba India Toshiba India Private Limited (TIPL) is the wholly owned subsidiary of Japanese Electronic giant Toshiba Corporation and was incorporated in India on September 2001.domain worldwide.
The government. VCRs. 1. Air Conditioning & Refrigeration Equipment to International Procurement of software. LCD Projectors. no duties on imported components or capital equipment. Sharp has a production base in 26 countries with 33 plants. The company was accredited with the ISO-9001 certification in the month of February. Industrial Components & Equipment. business tax incentives. and its products are used in 133 countries. It is now possible to import duty-free all components and raw materials manufacture products and export it. 17 . Hitachi India Hitachi India Ltd (HIL) was established in June 1998 and engaged in marketing and sells a wide range of products ranging from Power and Industrial Systems. It also supports the sale of Plasma TVs.consumer electronic products to manufacture VCRs/VCPs/VTDMs. 2001. Smart Boards and DVD Camcorders. EHTP (Electronic Hardware Technology Park) is an initiative to provide benefits to companies that are replacing certain imports with local manufacturing. The company manufactures consumer electronic goods such as TVs.5 Policy and Initiatives Foreign investment up to 100 per cent is possible in the Indian consumer electronics industry to set up units exclusively for exports. Some of HIL’s product range includes Semiconductors and Display Components. in an attempt to encourage manufacture of electronics in India has changed the tariff structure significantly. LCD TVs. VCPs and audio products. The products were sold under the Optonica brand name. materials and components. Customs duty on Information Technology Agreement (ITA-1) items (217 items) has been abolished from March 2005. and an expedited import-export process. EHTP benefits include export credits. All goods required in the manufacture of ITA-1 items are exempt from customs duty.
hard disc drives. and the protection of industrial designs. amended most of its IPR Acts and Rules to conform to the said Agreement. India is a party to the “Trade Related Aspects of the Intellectual Properties (TRIPs) Agreement” and has accordingly. Several amendments to the Copyright Act. creation of a new Trademark Act. Excise duty on computers has been removed. growth and development. New acts have also been enacted to cover semiconductors and layout designs which will be of considerable importance to the electronic industry. The Industrial Design Act 1911 was effectively replaced by The Design Act 2000. a new Designs Act and amendments to the Patents Act show India’s continued effort to protect IPR.. The Government of India has developed a robust IP act to facilitate innovation. the patent Act 1970 was amended in 1999 & 2003 and Trademarks and Merchandise Marks Act 1959 was overtaken by a new Trademark Act 1999. Several amendments to the Copyright Act. The agreement on TRIPs takes care of the intellectual property rights by enforcing the patent rights.Customs duty on specified raw materials / inputs used for manufacture of electronic components or optical fibers / cables has been removed. Customs duty on specified capital goods used for manufacture of electronic goods have been abolished. The country has already made several changes in its IP acts over the years. geographical indications. and the Layout Design of Semiconductor integrated Circuit Act 2000 was enacted. In the current WTO regime. layout designs of integrated circuits and undisclosed information. floppy disc drives and CD ROM drives continue to be exempt from excise duty. trade marks. creation of a new Trademark Act. The Indian Copyright Act 1957 was amended in 1999. the member nations are asked to modify their existing laws. 18 . a new Designs Act and amendments to the Patents Act show India’s desire to change and adapt. Intellectual Property Rights Protection of Intellectual property rights (IPR) is a prime requisite for development of R&D and innovation in the consumer electronics sector. copy rights and related rights. Accordingly. Microprocessor.
several items were already at NIL customs duty. free of duty. Regulations 1.Once these laws come into force. A part of the production from such units is permitted to be sold in the DTA depending upon the level of the value addition achieved. etc. The FDI approval for electrical equipment (including computer software and electronics) from January 1991 to March 2004 was US$ 7. trade marks. Out of these 217 items. The units set up under these programs are bonded factories eligible to import. raw materials and components. Enforcement of the TRIPs agreement makes the production of any product possible either through internal innovation or through formal transfer of technologies. 2. The ITA-1 would result in intensifying competition as more imported products will be easily available at lower prices. IT/electronics was the first sector in India to face complete customs tariff elimination. unauthorized use of the patented innovations. The consumer electronics and durables sector is expected to continue to benefit from supportive policies and become globally competitive. which was 9. 217 IT/electronic items were covered under the Information Technology Agreement (ITA) of the WTO for complete customs tariff elimination by 2005. Deemed export benefits are available to suppliers of these goods from the Domestic Tariff Area (DTA). 19 . office equipment etc. their entire requirements of capital goods.94 per cent of the total foreign direct investment (FDI) approved. In fact. spares and consumables.29 billion.32 billion. results in zero customs duty on imports of all telecom equipment. becomes difficult. Free Trade Agreement WTO regime which came in force in 2005. During the same period the FDI inflow for electrical equipment (including computer software and electronics) was US$ 3. Foreign Investment Policy: FDI Foreign investment up to 100 per cent is allowed in Indian electronics industry set up exclusively for exports.
Approvals for setting up Electronic Hardware Technology Park (EHTP) and Software Technology Park (STP) units are cleared by the Inter Ministerial Standing Committee (IMSC) set-up under the Chairmanship of the Secretary. Proposals involving foreign direct investment not covered under the automatic route are considered by the Foreign Investment Promotion Board (FIPB). Procedure for approval Once the investment in equity has been approved. FDI and foreign technology collaborations are approved through automatic route by the Reserve Bank of India 20 . Approval for setting up units in Export Processing Zones (EPZs) is given by the Board of Approvals in the Ministry of Commerce. to complement and supplement domestic investment. predominantly owned by them. 4.Resident Indians (NRIs) including Overseas Corporate Bodies (OCBs). components and raw materials or the engagement of foreign technicians for short duration does not require any additional approvals. Department of Information Technology. the import of capital goods. FDI/ Foreign Technology Collaboration Agreement The government facilitates FDI and investment from Non. Approval of Ministry of Home Affairs is not needed for hiring foreign nationals holding valid employment visa. Foreign technology induction is encouraged through FDI and foreign technology collaboration agreements. Approval for setting up export-oriented units (EOUs) outside the zones is given by the Ministry of Industry.3.
But that remains a major hiccup in India. These include: 1.6 Challenges and Opportunities The Challenges Heavy taxation in the country is one of the challenges for the players. Declining margins for many players 2. foraying into these rural markets has a considerable cost component attached to it.000 of the around 40. At its present structure the total tax incidence in India even now stands at around 25-30 per cent.) have hindered the reach of the distribution network in India 4. at least a large proportion of its constituents. have a direct presence only in 15.000 retail outlets (for consumer durables) in the country. manpower. but also spend on transportation for moving inventory. About 65 per cent of Indian population that lives in its villages still remains relevant for some consumer durables companies. Companies not only have to set up the basic infrastructure in terms of office space. Poor infrastructure is another reason that seems to have held back the industry.000 to 18.1. still buys black and white TVs and doesn't know what flat screens are. whereas the corresponding tariffs in other Asian countries are between 7 and 17 percent. Regular power supply is imperative for any consumer electronics product. This India. Creating awareness about new technologies and products 5. Low affordability level of consumer products among the rural masses 21 . Also. Expansion of distribution reach: Infrastructural bottlenecks (roads. power. which are touted as having the largest distribution network in the country. Inverted duty structure 3. etc. Even LG and Samsung. ISuppli believes that there are still challenges facing the India consumer electronics industry as the sector tries to realize its full potential.
rising purchasing power of people with higher propensity to consume with preference for sophisticated brands would provide constant impetus to growth of white goods industry segment. low running cost. improving lifestyles. The future of India's market is indeed bright. While the consumer durables market is facing a slowdown due to saturation in the urban market. 22 . Currently. and rise in temperatures.However. iSuppli believes that India will continue to grow as an important market for the global consumer electronics industry. rural consumers should be provided with easily payable consumer finance schemes and basic services. voltage etc. should be converted to routine regular feature from the seasonal character. And looking ahead. rural consumers purchase their durables from the nearest towns. Penetration of consumer durables would be deeper in rural India if banks and financial institutions come out with liberal incentive schemes for the white goods industry segment. leading to increased expenses due to transportation. believed to be months `good for buying’. after sales services to suit the infrastructure and the existing amenities like electricity. Opportunities The rising rate of growth of GDP. Purchase necessarily done only during the harvest. these challenges are gradually being addressed. growth in disposable income. festive and wedding seasons — April to June and October to November in North India and October to February in the South. power availability.
CHAPTER-2 Company Profile 2.1 Introduction 23 .
DVD Players. a Himachal Pradesh based firm. well supported by sales and service professionals of the company. The company started operation in early 2008 and in a short period of one year only. These features are not available in any other brand in the country. Colour TVs.P. Home Theatre Systems. the company has been able to make a pan India presence through a strong network of more than 100 Distributors.K & H. The company has launched state-of-the-art wall mountable DVD Players with auto-sliding door facility. a dream of reaching out to the teeming millions and providing them the fruits of modern technology for their education and entertainment – manufacturing the state-of-the-art electronics products in India for providing world class quality at affordable prices for the masses. the company is in the process of opening more than 100 service outlets across the country. After-sales-service being the mantra of the brand. launched the “Markson” brand of consumer electronics in January 2008. Parwanoo & Baddi in U. The company has also lined up Mobile Phones. USB Playability with facility to mount DVD Players on the wall to give a unique look. Washing Machines and Microwave Ovens. Markson brand was launched in India in technical collaboration with the UK based company for designing and technical support of their products.SNR Electronics Ltd. Sunil Gupta. The company is headed by highly experienced team of professionals from the electronics industry who have hands-down experience in the electronics industry and enjoy a high degree of honesty and reliability among the trade. Laptops. which will be launched very shortly. Air-Conditioners. Set-top Boxes and Desktop computers. TFT Screens. Markson products are produced in most modern and state-of-the-art plant at Haridwar. Quality and affordable prices are the hallmark of Markson. The company’s products range has been widely accepted meeting the international 24 . The product mix includes LCD TVs. MARKSON is the long cherished dream of Mr.
AirConditioners. Mr. 2. it’s an asset. We at Markson believe that high quality innovation isn’t a privilege anymore. Laptops. For the last 26 years. and it’s your right! 2.2 Vision To reinvent the market trend by bringing in state-of-the-art quality products to consumers as they have always wanted it. BETA (Bhagirath Electronics Traders Association) and 25 . He has held coveted positions in numerous electronics associations like. Gupta has a hands down experience in electronics trade. LCD TV’s particularly of 26” (66 cms) and 32” (82 cms) size have been sold more than the expectation leading to a virtual shortage in the market. Color TV. Mr. Microwave Ovens and Mobile Phone sets.standards in quality and packaging. He also plans to put more home products into the market by the end of the year like Washing Machines. The company. Sunil Gupta CMD. DVD players. TFT screen & Set-top boxes. Home theatre systems. Sunil Gupta is the CMD of Markson in India. his emphasis and special focus has been on trading of electronic components and assemblies. Desktop computers. has opened 13 branches at state level along with extensive warehousing facilities at the branches. The LCD TV’s are having unique features like USB Playback and MMS Playback. in order to facilitate and expedite the distribution of Markson’s products in India. The Markson Computer TFT Screens have unique features and inbuilt speakers and with the aid of external TV Tuner can substitute a LCD TV. Markson Mr. Every single product made at Markson is an epitome of precision and impeccable quality. Since then he has been actively engaged in arranging and collaborating resources for many wholesale retail outlets in Delhi which happens to be Asia’s largest electronics trading market.3 Key People Mr. He also plans to venture into the Hospitality sector around the same time. Gupta is the promoter of Markson brand in India with focus on manufacturing & marketing of electronic goods like LCD TV.
4 Future Goals Markson targets revenue of Rs 400 crore by the end of this fiscal and will increase it to Rs 1. He received his B. Mr.000 crore by 2012 with the introduction of several low cost products. Sunil Wadhwani CEO. He also has a sound knowledge of Customs and Central Excise Procedures prescribed under the Customs Act and Central Excise Act. 26 . solely for the procurement of a spectrum of electronic components and goods. 2. the CEO of Markson. Markson is able to provide the products at cheaper rates as the facilities are located under the excise free zone and the same are passed on to the end consumers.Central Radio & Electronics Merchant Association. a council promoted by the Ministry of Information Technology. Gupta has done a lot of social service for the needy. has an impressive experience of 35 years in the electronics industry in international trading coupled with domestic marketing and production related factory processes. The initial investment made was Rs 100 crore. helping them in whatever possible way. The company's prime focus will be on Northern and Eastern regions first and then move on to the Central and Southern regions of the country.Tech. Being a philanthropist to the core. He has also been an active member of ESC. and also for the export of quality electronic goods from India keeping in view the international standard. Wadhwani has travelled extensively all over the world. He has also been actively involved in construction of several dharamshalas for the needy. Mr. Markson Sunil Wadhwani. Wadhwani has spent considerable time in understanding export and import and their intricate procedures under the Foreign Trade Law. Mr. IIT. Mr. ELCINA. in Mechanical Engineering from the coveted technical institute. He has been an active member of several important electronic associations in India. and local Customs Advisory Committee in Delhi and Central Excise Committee in Noida. namely. Delhi and has been actively engaged in work since then. CEAMA.
The company. the company targets to capture five cent of the television market in the country by the end of this fiscal. will start registering profit after two years of this venture 27 . refrigerators and microwave ovens in the next two months. that has an initial advertising budget of Rs five crore. a member of Consumer Electronics and Appliances Manufacturer Association (CEAMA).000 dealers and distributors across the country.With 2. The company plans to launch washing machine. will increase it to Rs 20 crore in the near future. The company. air-conditioners.
CHAPTER.3 Essential Theory 3.1 Liquid Crystal Display Television Liquid-crystal display televisions (LCD TV) are color television sets that use LCD technology to produce images. LCD televisions are thinner and lighter than CRTs of 28 .
Liquid crystals encompass a wide range of (typically) rod-shaped polymers that naturally form into thin layers. Millions of individual LCD shutters arranged in a grid. the layer in contact will align itself with the grooves. the bulk material taking on the director's alignment. as opposed to the more random alignment of a normal liquid. creating a twisted structure with each layer aligned at a slightly different angle to the ones on either side. and the display would be black. and as manufacturing costs fell their eventual dominance of the television market was all but guaranteed. also show an alignment effect between the layers. The shade of color is controlled by changing the relative intensity of the light passing through the sub-pixels. When placed on a director. Some of these. This forces the layers to align themselves in two directions. The 29 . a pixel. On the bottom and top of the shutter are polarizer plates set at (typically) right angles. In the case of an LCD. which is essentially a material with microscopic groves in it. Normally light cannot travel through a pair of polarizers arranged in this fashion. green or blue (RGB) portion of the light from the original white source. LCD shutters consist of a stack of three primary elements. open and close to allow a metered amount of the white light through. this effect is utilized by using two directors arranged at right angles and placed close together with the liquid crystal between them. The light is typically provided by a series of cold cathode fluorescent lamps (CCFLs) at the back of the screen. and the layers above will subsequently align themselves with the layers below. Each shutter is paired with a colored filter to remove all but the red. The particular direction of the alignment of a pneumatic liquid crystal can be set by placing it in contact with an alignment layer or director. This combination of features made LCDs more practical than CRTs for many roles. the individual colors blend together to produce a single spot of color. Description Basic LCD Concepts: LCD televisions produce a colored image by selectively filtering a white light. the pneumatic liquid crystals. although some displays use white or colored LEDs instead. and are available in much larger sizes as well. The sub-pixels are so small that when the display is viewed from even a short distance. Each shutter–filter pair forms a single sub-pixel.similar display size.
polarizers also carry the directors to create the twisted structure aligned with the polarizers on either side. exiting the front of the liquid crystal having been rotated through the correct angle that allows it to pass through the front polarizer. IPS displays are used primarily for computer monitors. the amount of remaining twist can be finely selected. S-PVA and MVA) offer higher contrast ratios and good response times. One side has horizontal stripes that form rows. Liquid crystals 30 . it will naturally follow the liquid crystal's twist. The light no longer changes polarization as it flows through the liquid crystal. This allows the transparency or opacity of the shutter to be accurately controlled. but suffer from color shifting when viewed from the side. LCDs are normally transparent. a field will be generated at the point where they cross. By supplying voltage to one row and one column. destroying the twisted structure. a series of electrodes is deposited on the plates on either side of the liquid crystal. To turn a shutter off. the other has vertical stripes that form columns. and can no longer pass through the front polarizer. an electrical voltage is applied across it from front to back. Since a metal electrode would be opaque. Vertical Alignment (VA. As the light flows out of the rear polarizer. In-Plane Switching displays (IPS and S-IPS) offer wider viewing angles and better color reproduction. LCDs use electrodes made of a transparent conductor. but are more difficult to construct and have slightly slower response times. In order to improve switching time. the cells are placed under pressure. When this happens. some of the field always leaks out into the surrounding shutters. which increases the force to re-align themselves with the directors when the field is turned off. Since addressing a single shutter requires power to be supplied to an entire row and column. In general. Several other variations and modifications have been used in order to improve performance in certain applications. typically indium tin oxide. Addressing sub-pixels: In order to address a single shutter on the display. all of these displays work in a similar fashion by controlling the polarization of the light source. the rod-shaped molecules align themselves with the electric field instead of the directors. By controlling the voltage applied across the crystal.
replacing those with the patterned color filters. any leaked field is too small to switch the surrounding transistors. is added as a separate switch for the transistors. modern LCDs use an active matrix design. The rear sheet starts with a polarizing film. A new addressing line. On the rear. both sheets can be produced on the same assembly line. This partial switching of the surrounding shutters blurs the resulting image.are quite sensitive. slowly leaking this through the crystal to the common ground. The front sheet is similar. For smaller display sizes (under 30 inches). Not only does this allow for very accurate control over the shutters. since the capacitor can be filled or drained quickly. so pulse code modulation is used to accurately control the overall flow. and then the director. is attached to a common ground. When switched on. The 31 . each shutter is paired with a thin-film transistor that switches on in response to widely separated voltage levels. the glass sheet. Using a multistep construction process. typically the front. say 0 and +5 volts. a constant and relatively high amount of charge flows from the source line through the transistor and into an associated capacitor. but the transistors ensure that only the single shutter at the crossing point is addressed. Building a display: A typical shutter assembly consists of a sandwich of several layers deposited on two thin glass sheets forming the front and back of the display. and even small amounts of leaked field will cause some level of switching to occur. the glass sheets can be replaced with plastic. like a mouse cursor on a computer screen. The current is very fast and not suitable for fine control of the resulting store charge. the gate line. The rows and columns are addressed as before. Instead of powering both electrodes. but that voltage was too low to make the crystals realign with reasonable performance. Even scrolling text often rendered as an unreadable blur. The capacitor is charged up until it holds the correct control voltage. Another problem in early LCD systems was the voltages needed to set the shutters to a particular twist was very low. This resulted in slow response times and led to easily visible "ghosting" on these displays on fast-moving images. the active matrix components and addressing electrodes. but the response time of the shutter is dramatically improved as well. one set. but lacks the active matrix components. In order to attack these problems. and the switching speed was far too slow to use as a useful television display.
Since the electrons are easily deflected by gas molecules. If there are enough broken pixels. LCD panels. but this is arranged in cylinders which are naturally stronger than large flat plates. These have a relatively high failure rate. This limits practical CRTs to sizes around 30 inches. and televisions larger than this had to turn to other technologies like rearprojection. The critical step in the manufacturing process is the deposition of the active matrix components. and the major downward fall in pricing between 2006 and 2008 was due mostly to improved processes. To produce a complete television. and aimed at the proper location on the screen using electromagnets. the entire tube has to be held in vacuum.liquid crystal is placed between the two sheets in a patterned plastic sheet that divides the liquid into individual shutters and keeps the sheets at a precise distance from each other. and bright and dark spots are not uncommon. The majority of the power budget of a CRT goes into heating the filament. there is a small amount of vacuum in sets using CCFL backlights. The lack of vacuum in an LCD television is one of its advantages. the screen has to be discarded. but for larger displays a single lamp is not bright enough and the rear surface is instead covered with a number of separate lamps. Achieving even lighting over the front of an entire display remains a challenge. which is why the back of a CRT-based television is hot. which requires ever-thicker glass. which renders those pixels on the screen "always on". The backlight for small sets can be provided by a single lamp using a diffuser or frosted mirror to spread out the light. The electrons are then accelerated and focused in an electron gun. displays up to 40 inches were produced but weighed several hundred pounds. like other flat panel 32 . Removing the need for heavy glass faces allows LCDs to be much lighter than other technologies. which "boils" electrons off its surface. the shutter assembly is combined with control electronics and backlight. The atmospheric force on the front face of the tube grows with the area. Comparison Packaging: In a CRT the electron beam is produced by heating a metal filament. The number of discarded panels has a strong effect on the price of the resulting television sets.
late in their evolution. on average. because the vast majority of light that is being produced at the back of the screen is blocked before it reaches the viewer. especially computer assisted convergence. with production yields being the primary constraint. so this change can only be used to control the brightness of the screen as a whole. even the best CRTs are much deeper than LCDs. like the 33 . which removes another portion. and in comparison to those technologies direct-view LCDs have a better image quality. In spite of using highly efficient CCFLs. Nevertheless. As a result.displays. to control the color and luminance of a pixel as a whole. to 42". Examining the image above. the electron gun has to be located some distance from the front face of the television. only 8 to 10% of the light being generated at the back of the set reaches the viewer. or at least wide horizontal bands of it. CCFLs are long cylinders that run the length of the screen. As yields increased. but improvements. the light has to be further absorbed in the shutters. from 14 to 30". each sub-pixel's color filter removes the majority of what is left to leave only the desired color. most sets use several hundred watts of power. Modern LCD sets have attempted to address the power use through a process known as "dynamic lighting" (originally introduced for other reasons. Finally. Since the CRT can only bend the electron beam through a critical angle while still maintaining focus. To start with. folded. This allowed LCDs to compete directly with most in-home projection television sets. This makes the technique suitable only for particular types of images. LCDs can. After that. and 65" sets are now widely available. This system examines the image to find areas that are darker. see below). For these reasons the backlighting system has to be extremely powerful. common LCD screen sizes grew. are also much thinner than CRTs. be built at any size. In early sets from the 1950s the angle was often as small as 35 degrees off-axis. and reduces the backlighting in those areas. 3M suggests that. in theory. allowed that to be dramatically improved and. then 52". you can see that a good portion of the screen area is covered by the cell structure around the shutters. the rear polarizer filters out over half of the original unpolarized light. more than would be required to light an entire house with the same technology. LCD televisions end up with overall power usage similar to a CRT of the same size. Efficiency: LCDs are relatively inefficient in terms of power use per display size.
This allows them to dynamically adjust brightness of much smaller areas. A successful system would improve efficiency by three times. which made them useless for television. Another would be to direct the light that would normally fall on opaque elements back into the transparent portion of the shutters. Another ongoing area of research is to use materials that optically route light in order to re-use as much of the signal as possible. By 2000. as did the active matrix techniques. This was still not fast enough for television use.credits at the end of a movie. A combination of improvements in materials technology since the 1970s greatly improved this. with each LED lighting only a small number of pixels. common in North America. Think of it in relation to shutter speed on a camera. massive investment in LCD production and manufacturing has addressed many of these concerns. Response Time: This important specification represents the amount of time it takes for one pixel to go from active (black) to inactive (white) and back to black again. G and B. 34 . Image Quality: Early LCD sets were widely derided for their poor overall image quality. LCD panels with response times around 20 ms were relatively common in computer roles. and muddy colors. which is suitable for a much wider set of images. Early LCD displays had response times on the order of hundreds of milliseconds. most notably the ghosting on fast-moving images. typically a 16 by 16 patch. instead of absorbing the unwanted colors in a filter. In spite of many predictions that other technologies would always beat LCDs. It’s the speed at which an LCD panels crystals “twist” to block and allow light to pass. For 60 frames per second video. and 3M currently sells several products that route leaked light back toward the front of the screen. poor contrast ratio. One potential improvement is to use micro prisms or dichromic mirrors to split the light into R. A number of companies are actively researching a variety of approaches. each pixel is lit for 17 ms before it has to be re-drawn (20 ms in Europe). Sets using LEDs are more distributed.
Together. response times fell from 20 ms in 2000 to about 2 ms in the best modern displays. But even this is not really fast enough because the pixel will still be switching while the frame is being displayed. Named "Overdrive" by NEC. comparing them. In older displays the active matrix capacitors were first drained. their existing charge level is either increased or decreased to match the new value. but was not originally required in the computer monitor role that bootstrapped the LCD industry. If the initial movement could be accelerated. the overall performance would be increased. pioneered by NEC. Contrast Ratio: The contrast ratio measures the capacity of a display device to produce the brightest colour and the darkest colour and it is usually expressed as a ratio of their light intensities. But in most cases. This change.A major improvement. NEC noticed that liquid crystals take some time to start moving into their new orientation. the vast majority of the screen's image does not change from frame to frame. which typically requires fewer charging pulses. Another major improvement in response time was achieved by adding memory to hold the contents of the display – something that a television needs to do anyway. and then dropping back to normal levels to fill it to the required voltage. the amount of time spent charging and discharging the capacitors was reduced. delivering the same total amount of power. liquid crystals allow some light to leak 35 . Moreover the capacitors are not drained completely. led to the first practical LCD televisions. A common method is to double the voltage. and only resetting those sub-pixels that actually changed. along with continued improvements in the liquid crystals themselves and by increasing refresh rates from 60 Hz to 120 and 240 Hz. which was isolated to the driver electronics and inexpensive to implement. but stop rapidly. and then recharged to the new value with every refresh. Even in a fully switched-off state. the technique is now widely used on almost all LCDs. NEC's solution was to boost the voltage during the "spin up period" when the capacitor is initially being charged. instead. but halve the pulse width. improved response times by about two times. By holding the before and after values in computer memory.
If a particular area of the screen is dark. Displays using LEDs have an advantage. so if the image is light on one side and dark on the other. The CCFL must be driven with enough power to light the brightest area of the portion of the image in front of it. and the number of available shuttering levels in the sub-pixels doubles. This is the main reason high-end sets offer dynamic lighting (as opposed to power savings. a conventional set will have to set its shutters close to opaque to cut down the light. the LCD shutters have to be turned to almost full opacity. the shuttering can be reduced by half. this technique cannot be used successfully. mentioned earlier).000:1. often as few as 256 pixels in a square area. in order to display a color close to black. Since the total amount of light reaching the viewer is a combination of the backlighting and shuttering. However. modern sets can use "dynamic backlighting" to improve the contrast ratio and shadow detail. it should be noted that the area of the screen that can be dynamically adjusted is a function of the backlighting source. which is why many reviews of LCD TV's mention the "shadow detail". This leads to "posterizing" effects and bands of discrete colors that become visible in shadows. CCFLs are thin tubes that light up many rows (or columns) across the entire screen at once. Color gamut: Color on an LCD television is produced by filtering down a white source and then selectively shuttering the three primary colors relative to each other. if the backlighting is reduced by half in that area.through the shutters. This limits their contrast ratios to about 1600:1 on the best modern sets. While the LCD shutters are capable of producing about 1000:1 contrast ratio. However. when measured using the ANSI measurement. allowing the contrast ratio across the screen to be dramatically improved. and that light is spread out with diffusers. by adding 30 levels of dynamic backlighting this is improved to 30. limiting the number of discrete colors they can display. This allows the dynamic backlighting to be used on a much wider variety of images. The accuracy and quality of the resulting colors are thus dependent on the backlighting source and its ability 36 . because each LED typically lights only a small patch of the screen. This lack of contrast is most noticeable in darker scenes.
and it was widely believed that the move to highdefinition would push it from the market entirely. especially at higher resolutions. meant that older technologies like CRTs maintained a footprint in spite of their disadvantages. and as the aspect ratio becomes more rectangular it becomes more difficult to make the tubes. and tended to be strongest in greens. Meanwhile. the wider 16:9 aspect ratio of the new material was difficult to build using CRTs. both manufacturing and on the street. LCDs of the era were still not able to cope with fast-moving images. High definition: High-Definition Television (or HDTV) is a digital television broadcasting system with higher resolution than traditional television systems (standard-definition TV. so CRTs faced the twin problems of becoming larger and more rectangular at the same time. In particular. Through the halting introduction of HDTV in the mid-1990s into the early 2000s. At the same time. and remained expensive. fitting into the low-end space that plasmas could not fill. or SDTV). LCD technologies like Overdrive started to address their ability to work at television speeds. This situation changed rapidly. However. plasma displays were the primary high-definition display technology. LCD.to evenly produce white light. the much higher resolutions these new formats offered were lost at smaller screen sizes. ideally a CRT should be perfectly circular in order to best contain its internal vacuum. LCDs started to experience the economies of scale that plasmas 37 . plasma displays never saw the massive scaling of economies that were expected. It was the slow standardization of high definition television that first produced a market for new television technologies. Initially produced at smaller sizes. however. Contrary to early optimism. was widely considered to be unable to scale into the same space. and sets commonly quote a color space covering about 75% of the NTSC 1953 color gamut. their high cost. Modern backlighting has improved this. and from the mid-1990s the plasma display was the only real offering in the high resolution space. Using white LEDs as the backlight improves this further. The CCFLs used in early LCD televisions were not particularly white.
which made up for the price difference. LCD prices started falling rapidly in 2006 while their screen sizes were increasing at a similarly furious rate. albeit at a price premium. By 2004. Market Takeover Although plasmas continued to hold an obvious picture quality edge over LCDs. By late 2007. it was clear that LCDs were going to outsell plasmas during the critical Christmas sales season. LCDs offer higher resolutions and true 1080p support. So they can improve so quickly. "Globally. and even a price advantage for sets at the critical 42" size and larger. and in 2007 the last remaining consumer rear-projection systems were gone. Plasma had overtaken rear-projection systems in 2005. but as the president of Chunghwa Picture Tubes noted after shutting down their plasma production line. which lasted only a few months longer. and much larger prototypes were being demonstrated. It was the only technology that could scale both up and down in size. This evolution drove competing large-screen systems from the market almost overnight. Plasmas and LCDs reached price parity in 2007. on this product. Sony ended sales of their famous Trinitron in most markets in 2007. The February 2009 announcement that Pioneer Electronics was ending production of the plasma screens was widely considered the tipping point in that technology's history as well. so many investments.failed to achieve. so many people have been working in this area. LCD's dominance in the television market accelerated rapidly. at which point the LCD's higher resolution was a winning point for many sales. and sales of all large-screen televisions stagnated while customers watched to see if this would happen. By late 2006. while plasmas were stuck at 720p. several vendors were offering 42" LCDs. More critically. and shut down the final plant in March 2008. so many companies. 42" sets were becoming common. but also outsold CRTs during the same period. encroaching on plasma's only stronghold. covering both the high-end market for large 38 ." When the sales figures for the 2007 Christmas season were finally tallied. 32" models were widely available. pundits were surprised to find that LCDs had not only outsold plasma. This was in spite of the fact that plasmas continued to hold an image quality advantage. The same was true for CRTs. Predictions that prices for LCDs would drop rapidly through 2007 led to a "wait and see" attitude in the market.
1. 39 . Environmental effects The production of LCD screens uses nitrogen trifluoride (NF3) as an etching fluid during the production of the thin-film components. two earlier studies found that only 2% to 3% of the gas escapes destruction after its use.screens in the 40 to 50" class. Promotion: Informing potential customers of the availability of the product. In reality. There are four critical elements in marketing your products and business. A report in Geophysical Research Letters suggested that its effects were theoretically much greater than better-known sources of greenhouse gasses like carbon dioxide. of which anywhere from 30% to 70% escapes to the atmosphere in typical use. and its extensive half-life may make it a potentionally harmful contributor to global warming. Furthermore. Product: The right product to satisfy the needs of your target customer. 4. as well as customers looking to replace their existing smaller CRT sets in the 14 to 30" range. it was not made part of the Kyoto Protocols and has been deemed "the missing greenhouse gas. The right product at the right price available in the right place to be bought by customer. the report failed to compare NF3's effects with what it replaced. They are the four P’s of marketing." Critics of the report point out that it assumes that all of the NF3 produced would be released to the atmosphere. 2. its price and its place.2 Marketing Mix Marketing your business is about how you position it to satisfy your market’s needs. another powerful greenhouse gas. Price: 3. As NF3 was not in widespread use at the time. perfluorocarbon. the vast majority of NF3 is broken down during the cleaning processes. 3. Building across these wide scales quickly pushed the prices down across the board. NF3 is a potent greenhouse gas. Place: The right product offered at the right price.
services. Other important aspects of product may include an appropriate product range.The marketing mix should be something one has to pay careful attention to because the success of your business depends on it. warranties. Product bundle should meet the needs of a particular target market. warranties. and distribution methods are similar. which means one does not have to acquire new suppliers. packaging. Thus. 40 . function. Other product attributes include quality. A different type of growth would be a diversification of products. one must think of what one can offer as a bundle of goods and services. Successful managers pay close attention to the needs their product bundles address for customers.” while many basic products must be positioned for price conscious consumers. Later growth may occur in the same location or may be in different geographic regions. Other future growth may allow offering the product to different customers. production processes. and distribution methods. or a brand name. For instance. Start-up businesses are most successful when they concentrate their efforts on one product or one market. such as the way it is packaged. Apart from the physical product itself. one may be able to take advantage of opportunities to add value through processing. skills and equipment. Product “Product” refers to the goods and services you offer to your customers. Product’s appearance. Think long term about the venture by planning for the ways one can deepen and broaden the product bundle. For example. The knowledge of the target market and the competitors will allow offering a product that will appeal to customers and avoid costly mistakes. Customer research is a key element in building an effective marketing mix. with the business offering related products. a luxury product should create just the right image for “customers who have everything. like a restaurant or a car service center does. options. and support make up what the customer is actually buying. features. and customer service. design. Offering a whole range of products is most successful if the raw materials. there are elements associated with the product that customers may be attracted to. and brand name.
As a manager. and prestige. So they begin their business by creating an impression of bargain pricing. gathering information will be more difficult. customers will select vendors based on bids submitted simultaneously. one can follow a number of alternative pricing strategies. Determining the product’s price can be tricky and even frightening. healthfulness. this may be a signal of low quality and not part of the image you want to portray. Some price decisions may involve complex calculation methods. A coupon is an example of a discounted price. Selection of a pricing strategy should be based on the product. including non-price factors such as quality. In those cases. • Cost-plus: Adds a standard percentage of profit above the cost of producing a product. • Discount: Based on a reduction in the advertised price. Accurately assessing fixed and variable costs is an important part of this pricing method. the competitive environment. • Value-based: Based on the buyer’s perception of value (rather than on your costs). you can direct observe your competitors’ prices and respond to any price changes. the price is decreased as the market becomes saturated.Price “Price” refers to how much you charge for your product or service. customer demand. Many small business owners feel they must absolutely have the lowest price around. • Going-rate: A price charged that is the common or going-rate in the marketplace. The result should neither be greedy nor timid. Pricing approach should reflect the appropriate positioning of the product in the market and result in a price that covers the cost per item and includes a profit margin. • Skimming: Involves the introduction of a product at a high price for affluent consumers. Going-rate pricing is common in markets where most firms have little or no control over the market price. while others are intuitive judgments. In other cases. • Competitive: Based on prices charged by competing firms for competing products. This pricing structure is relatively simple to follow because you maintain you price relative to your competitors’ prices. However. 41 . Later. The buyer’s perception depends on all aspects of the product. In the next column are eight common pricing strategies. and the other products you will offer. In some cases.
$4. After deciding the pricing strategy. ultimately it must cover costs. Whatever the price may be. • Psychological: Based on a price that looks better. the amount of money actually received may be complicated by other pricing aspects that will decrease (or increase) the actual amount of money received. The methods discussed here should be a base from which to construct your price. One will also have to decide how to determine: • Payment period: Length of time before payment is received. • Volume discounts and wholesale pricing: Price reductions given for large purchases. contribute to the image by communicating the perceived value of the 42 . • Trade discounts (also called “functional discounts”): Payments to distribution channel members for performing some function such as warehousing and shelf stocking. such as maintaining an in-store display. • Allowance: Price reductions given when a retailer agrees to undertake some promotional activity for you. The research needed to understand the pricing along the distribution path will be more than worth the time it takes. • Credit terms: Policies that allow customers to pay for products at a later date.00 per pound.99 per pound instead of $5.• Loss-leader: Based on selling at a price lower than the cost of production to attract customers to the store to buy other products. • Seasonal allowances: Reductions given when an order is placed during seasons that typically have low sales volumes to entice customers to buy during slow times. • Cash and early payment discounts: Policies to speed payment and thereby provide liquidity. The options will vary depending on how one chooses to sell your product. • Price differences among target customer groups: Pricing variance among target markets. • Bundling of products/services: Offering an array of products together. Tracing the path of the product from production to final purchase is a useful exercise to discover this information. • Price flexibility: Ability of salesperson or reseller to modify price. for example. • Price differences among geographic areas: Pricing variance among geographic regions.
product, counter the competition’s offer, and avoid deadly price wars. Remember, price is the one “P” that generates revenue, while the other three “P’s” incur costs. Effective pricing is important to the success of the business. Place “Place” refers to the distribution channels used to get the product to the customers. What the product is will greatly influence how to distribute it. If, for example, one owns a small retail store or offer a service to the local community, then one is at the end of the distribution chain, and so one will be supplying directly to the customer. Businesses that create or assemble a product will have two options: selling directly to consumers or selling to a vendor. Direct Sales As a producer, one must decide if supplying direct is appropriate for the product, whether it be sales through retail, door to- door, mail order, e-commerce, on-site, or some other method. An advantage of direct sales would be the contact one gains by meeting customers face to face. With this contact one can easily detect market changes that occur and adapt to them. One also have complete control over the product range, how it is sold, and at what price. Direct sales may be a good place to start when the supply of the product is limited or seasonal. For example, direct sales for many home-produced products can occur through home based sales, markets, and stands. However, direct sales require that you have an effective retail interface with the customers, which may be in person or electronic. If developing and maintaining this retail interface is not of interest to you or you are not good at it, you should consider selling through an intermediary. Reseller Sales Instead of selling directly to the consumer, one may decide to sell through an intermediary such as a wholesaler or retailer who will resell the product. Doing this may provide with a wider distribution than selling direct while decreasing the pressure of managing own distribution system. Additionally, one may also reduce the storage space necessary for inventory. One of the most important reasons for selling through an
intermediary is access to customers. In many situations, wholesalers and retailers have customer connections that would not be possible to obtain on your own. However, in selling to a reseller one may lose contact with your end consumer. In some cases, one may also lose some of your company identity. For example, your distributor may request that your product be sold under the reseller’s brand name. One factor that may influence whether you can find an intermediary to handle your product is production flow. Wholesalers want a steady year-round supply of product to distribute. If you can deliver a steady year-round supply that is of consistent quality, then selling through an intermediary may be a good strategy for you.
Market Coverage No matter whether you sell your product direct or through a reseller, you must decide what your coverage will be in distributing your product. Will you pursue intensive, selective, or exclusive coverage? Intensive distribution is widespread placement in as many places as possible, often at low prices. Large businesses often market on a nationwide level with this method. Convenience products—ones that consumer buy regularly and spend little time shopping for, like chewing gum—do better with intensive (widespread) distribution. Selective distribution narrows distribution to a few businesses. Often, upscale products are sold through retailers that only sell high-quality products. With this option, it may be easier to establish relationships with customers. Products that people shop around for sell better with selective distribution. Exclusive distribution restricts distribution to a single reseller. You may become the sole supplier to a reseller who, in turn, might sell only your product. You may be able to promote your product as prestigious with this method, though you might sacrifice sales volume. Specialty products tend to perform better with exclusive distribution. Other Place Decision Product characteristics and your sales volumes will dictate what inventories to maintain and how best to transport your products. Additionally, the logistics associated with acquiring raw materials and ensuring that your final product is in the right place at the
right time for the right customers can comprise a large percentage of your total costs and needs careful monitoring. You may decide to have a combination of all the distribution methods. Whatever you decide, choose the method which you believe will work best for you. Promotion “Promotion” refers to the advertising and selling part of marketing. It is how you let people know what you’ve got for sale. The purpose of promotion is to get people to understand what your product is, what they can use it for, and why they should want it. You want the customers who are looking for a product to know that your product satisfies their needs. To be effective, your promotional efforts should contain a clear message targeted to a specific audience reached via an appropriate channel. Your target audience will be the people who use or influence the purchase of your product. You should focus your market research efforts on identifying these individuals. Your message must be consistent with your overall marketing image, get your target audience’s attention, and elicit the response you desire, whether it is to purchase your product or to form an opinion. The channel you select for your message will likely involve use of a few key marketing channels. Promotion may involve advertising, public relations, personal selling, and sales promotions. A key channel is advertising. Advertising methods to promote your product or service include the following. • Radio: Radio advertisements are relatively inexpensive ways to inform potential local customers about your business. Mid-to-late week is generally the best time to run your radio ad. • Television: Television allows access to regional or national audiences, but may be more expensive than other options. • Print: Direct mail and printed materials, including newspapers, consumer and trade magazines, flyers, and a logo, allow you to explain what, when, where, and why people should buy from you. You can send letters, fact sheets, contests, coupons, and brochures directly to new or old customers on local, regional, or national levels.
Selecting an effective mix for your market will take time and effort. • Generic: Generic promotion occurs when no specific brand of product is promoted. decisions on one element will influence the choices available in others. being involved in the community. setting up displays at public events. and providing open house days. loyalty programs. beef. price. and rebates. For instance. often initiated through press releases. • Word of Mouth: Word of mouth depends on satisfied customers (or dissatisfied customers) telling their acquaintances about the effectiveness of your products. Sales promotions are special offerings designed to encourage purchases.• Electronic: Company Web sites provide useful information to interested consumers and clients. Direct e-mail contact is possible if you have collected detailed customer information. Additional sources of promotion may be attending or participating in trade shows. and networking socially at civic and business organizations. Advertisements allow broad promotion of your products. Often. Password-protected areas allow users to more intimately interact with you. but these will 46 . and pork. generic advertising is commonly found for milk. Public relations (PR) usually focus on creating a favorable business image. can be good sources of publicity. prizes. News stories. it is costly. contests. Final Comment The four P’s—product. Your target audience may be more receptive to one method than another. Promotions might include free samples. but rather a whole industry is advertised. and promotion—should work together in your marketing mix. incentives. While personal selling is an important tool. place. Salespeople can tailor communication to customers and are very important in building relationships. So you should make efforts to target personal selling carefully. Personal selling focuses on the role of a salesperson in your communication plans. coupons. Other programs might focus on educating customers through seminars or reaching them through trade shows. Important components of a good public relations program include being a good neighbor.
When you think Volvo." When you think IBM. offered in the right place and promoted in the right way—you will need to continue to stay on top of market changes and adopt your marketing mix as necessary. the definition. Marketing is a part of your venture that will never end. the functions. The worksheets that follow will help you construct your marketing plans. creating the impression 47 . Marketers engaged in branding seek to develop or align the expectations behind the brand's experience. design. how they reflect and engage them. The fact that you remember the brand name and have positive associations with that brand makes your product selection easier and enhances the value and satisfaction you get from the product. In functionality and contextually they are proprietary visual. Powerful brands can drive success in competitive and financial markets. and cultural image that you associate with a company or a product. how they define their aspiration and enable them to do more. and symbol. or the essence of brand has changed.pay off as you satisfy customers and create a profitable business." Or "Yeh Dil Mange More" of Pepsi. rational. Understanding Branding What is a brand? Brands were originally developed as labels of ownership: name. term. When you think Nike. and indeed become the organization's most valuable assets. The objective of brand has become more of emotional and psychological than that of mere recognition and differentiation for which the concept of brand came into existence. today it is what they do for people that matters much more. Once you have a good marketing mix—the right product at the right price. you might think "Big Blue. you might think of an advertising campaign prompting "Just Do It. However. 3. emotional. Understanding Branding and Building Brand. you might think safety. With time.3 Branding Process The Branding Process can be explained by dividing it into two parts namely.
One of the key tasks of Brand Management is development of brand's image. whereby the personality usually a celebrity or image is "branded" into the consciousness of consumers. 48 . promoting and communicating the image to the targeted audiences. Brand management performed to its full extent means starting and ending the management of the whole company through the brand.that a brand associated with a product or service has certain qualities or characteristics that make it special or unique. This art of creating and maintaining a brand is called brand management. A good brand name gives a good first impression and evokes positive associations with the brand. It is something that influences all of us in several ways and leaves a deepening impact on all of us. Brand management starts with understanding what 'brand' really means. and brand personality. in one sentence. Brand management is a philosophy and a total approach to managing companies. The personality and theme. what benefits it provides and why it is better than the competition. support and contribution from everybody in the company. It also reaches all the way down the company and especially to the people who interface with customers or who create the products that customers use. brand associations. All these discussed issues make branding a real art. logos. and as such includes much about changing minds. A brand image may be developed by attributing a "personality" to or associating an "image" with a product or service. A brand is therefore becomes one of the most valuable elements in an advertising theme. Brand Management A powerful tool like a brand cannot be created in a vacuum or from thin air. It is a comprehensive effort and requires commitment. what business the company is in. which uses well-defined and established principles but can be refined as well as mastered by practice. This starts with the leaders of the company who define the brand and control its management. A positioning statement tells. positioning. visuals and even the appeal selected revolves around the image and helps in integrating. It requires to follow certain principles and should have a developed procedure along with wellsupplemented research base. What makes up a brand identity? Brand identity includes brand names.
this premium provides important information about the value of the brand. 100 more for a branded product over the unbranded product. consistent food quality. pound that message home in every ad. 49 . culture and myth to the brand identity by the use of a famous spokesperson (Sharukh Khan – Hyundai Santro). This concept is referred to as brand equity. CEOs and small-scale enterprise owners to research their customers and find the top ranked reasons due to which customers buy their products rather than their competitors. Happy Meal. a children's party. etc. lots of fun and following with associations of Good Quality reasonably priced Burgers. By consistent repetition of the most persuasive selling messages. For example. Brand associations are the attributes that customers think of when they hear or see the brand name. expenses such as promotional costs must be taken into account when using this method to measure brand equity. starting with the yellow arches. customers will think of you and buy from you when they are deciding on whether to buy from you or your competitor. What is Brand Equity? Brand equity is an intangible asset that depends on associations made by the consumer. in communications with employees and in every sales call and media interview. There are at least three perspectives from which to view brand equity: Financial .One way to measure brand equity is to determine the price premium that a brand commands over a generic product. Ronald McDonald. a family entering the restaurant. McDonalds television commercials are a series of one brand association after another. a character (the Nirma Girl or Amul Girl). yet few companies consciously create a brand identity. It is advised to senior executives.Brand personality adds emotion. if consumers are willing to pay Rs. an animal (the Merrill Lynch bull) or an image (Hum Hai Na .ICICI). Then. in every news release. The brand can add significant value when it is well recognized and has positive associations in the mind of the consumer. How do we determine our brand identity? Brand has been called the most powerful idea in the commercial world. However. kids.
Continuous fall in sales is the biggest indication of negative brand equity. brand equity is not always positive in value. and a lower risk from the perspective of the consumer. Brand Elements Brand elements are the components or constituents of brand that are designed and put together to strengthen brand's image. Any brand will consists of following elements: • • • • Brand name and logo Symbol and character Packaging Slogan There are five criteria to judge whether these are good brand elements: 50 . Increases cash flow by increasing market share. low quality of product. The consumer's awareness and associations lead to perceived quality. inferred attributes. Strong brand equity provides the following benefits: • • • Facilitates a more predictable income stream (higher profitability). However. and allowing premium pricing. Brand equity is an asset that can be sold or leased.A successful brand can be used as a platform to launch related products. brand loyalty. Attitude strength is built by experience with a product.Brand extensions .A strong brand increases the consumer's attitude strength toward the product associated with the brand. Consumer-base . The benefits of brand extensions are the leveraging of existing brand awareness thus reducing advertising expenditures. Furthermore. and eventually. Some brands acquire a bad reputation that results in negative brand equity. This may happen due to out-dated product. reducing promotional costs. poor image or communication and better brand and image of competitor's product. appropriate brand extensions can enhance the core brand. Negative brand equity can be measured by surveys in which consumers indicate that a discount is needed to purchase the brand over an unbranded product.
Brand attributes can be either negative or positive and can have varying degrees of relevance and importance to different customer segments. packaging indentations etc. and they should communicate a unified message that depicts or supports the brand image. • In addition. symbols.• The recall value of Brand name should be high. It should provide company with a viable option to create brand extension or brand line expansion or it should generate sufficient recognition for the company. Intellectual property protection is the fifth criteria. Examples of Brand Attributes: • • • • • • • Influential Innovative Inclusive Relevant Connecting Leadership Humane Is branding just for large companies? 51 . the transferability of brand elements should be high. They should represent what the company. Brand Attributes Brand attributes are functional or emotional associations that are assigned to a brand by its customers and prospects. packaging. They should not look time beaten neither they should be changed frequently. the brand stands for. • Brand name. use of registered trademark. • The logo. • The symbol and character being used as brand elements should also gel well with product features and characteristics and they should be in good term to identify the product with. slogan all should be catchy and flexible over time. It should be simple. easy to pronounce and easy to understand. all should be protected. The elements should have adaptability and should be able to change as per demand of time and consumers. There should be some consistency and they should be used for several years before they are changed. logo. The brand name should also connote what does product stands for. It should create a connection between the need of the consumer and the product. symbol.
You might infer. manufacturers and businesses of all types and sizes. In short. It creates in the mind of customers and prospects the perception that there is no product or service on the market that is quite like yours.NO! It is one of the myths that only large business house or the player in an industry with excess competition needs a brand." In its simplest form. successful branding programs begin with superior products and services. fancy packaging or public relations will help you achieve your sales goals. upon close inspection. Branding is something that every one needs and can be applied to any business. you will in turn be able to create a powerful marketing program. image. lifestyle and status. Brand Building Overview Branding is more than just a business buzzword. service businesses. If the old marketing mantra was. Retailers. which will fetch them hefty returns in long time frame. backed by excellent customer service that permeates an entire organization. that if you build a powerful brand. then. The Importance of Branding 52 . if you can't convince customers that your product is worthy of purchasing. It has become the crux of selling in the new economy. However. a brand represents many more intangible aspects of a product or service: a collection of feelings and perceptions about quality. The techniques of branding have been kept secret for many years because it provided a competitive advantage to those companies that used it or devoted regular cash flow streams towards this effort. It is the name attached to a product or service. a brand is a noun. Therefore. no amount of advertising dollars." Nothing happens until somebody sells something. a brand offers the customer a guarantee and then delivers on it. can use this process rather they should do it and they should consider branding expenditure as longterm investment or a capital investment. However." the new philosophy could be" Nothing happens until somebody brands something. organization or product.
For instance. Creating a strong brand identity will build mind share — one of the strongest competitive advantages imaginable. "Everything else. they can steal. As a result. or the worth of the brand." The importance and value of branding becomes apparent when an entrepreneur wants to sell his or her company or take it to Wall Street for a public offering or other infusion of capital. unlike other abstract marketing notions. when your child wants a hamburger. you can be certain that somebody will copy it before long. if you owned the Marlboro Company and wanted to sell it. It creates a lasting value above and beyond all the other elements of your business. The question then becomes. And not only will they follow your lead." They are worth a small fraction of what you can sell that brand for. can be quantified. "What competitive edge do I have to offer that cannot be copied by anyone else?" The answer? Your brand. It is often the brand that a business owner has to sell in such cases. Wis. They can steal your trade secrets. Technology will change. customers will think of your business first when they think of your product category. he will often say he wants to go to McDonald's. trucks. Eventually. Scotch is the brand that springs to mind. Stone and Briggs Advertising in Madison. more likely than not." says Kosgrove. Brand equity. The reason behind these strong brandproduct associations is that these companies have built rock solid brand identities. when you think of tissues. For example. If you have a great idea. Likewise. You would then identify the cost of the factories. you would begin to value the firm by looking at the assets tied to the Marlboro brand. And when you're looking for tape to wrap a present. patents. Your physical plant will wear out. When Should You Brand? 53 . you think of the Kleenex brand." That value is often called brand equity. But your brand can go on and live.One of the truths of modern business is that there is almost nothing that your competitors can't duplicate in a matter of weeks or months. machines and staff. but they may also be able to do a better job or sell the product or service at a lower price. "The value of that brand is huge compared to those actual physical assets." says Howard Kosgrove. your patents will expire. vice principal of marketing at Lindsay. "A brand is the one thing that you can own that nobody can take away from you.
where cost is usually more of a loyalty building factor. For example. nearly all industries can benefit from a branded product. Financial services. Primary Brands . are even beginning to see the importance of branding by tagging banking packages and even mutual funds with catchy names. Tyvek. Brands can be separated into three categories: primary. branding is based on the concept of singularity — targeting individuals in a personal manner— and therefore precludes the concept of universal appeal. which were one of the last frontiers. This is why many brands broaden and widen their appeal by creating tertiary brands or line extenders.Because of the competitive nature of business today. are being forced to continue to brand heavily — perhaps even more strategically than they ever have in the past. not every product needs its own stand-alone brand. By definition. improbably one of the best knew industrial branded products. including fashion. On the contrary. restaurants and consumer goods. no one brand is going to appeal to all customers. has seen brand names creep in. a DuPont fiber. Other industries in which branding is a must include: • • • • • • • • • Fast food High-tech Beverages Packaged Goods Petroleum Entertainment Retail Auto Pharmaceutical Types of Brands A brand cannot be all things to all people. Primary brands typically garner a large percentage of a company's revenue potential and therefore need to 54 . Although most industries and products or services can benefit from a brand. All of the traditionally brand-conscious industries. secondary and tertiary.This is a company's core brand or umbrella brand. Even industrial markets.
but they contribute to the company's overall image in some way. Secondary brands don't need to have their own name. and Deep Sweep is the secondary brand. but it fills a need within a niche market so the company continues to manufacture it under the unregistered name Household Trash Bags. What Goes Into a Brand? If your product or service is new or unique. but just descriptors. the generic line is considered a tertiary brand for this company. Take. Since there are no pre-existing biases toward the product or service. or "flankers." for a core brand.These are often line extenders. Therefore. Line extenders are characterized by having a descriptive term that allows the base brand to be the true selling proposition and the flanker to really designate to the audience what that particular product's key feature or benefits are. it probably soon will.be given priority and have a sufficient amount of advertising in order to root them firmly. Brand identity is comprised of: Pricing . Tertiary brands . they sometimes don't sport registered brand names. usually a modifier to the brand name will suffice and strengthen the core brand. a garbage bag manufacturer may make a generic-brand bag in addition to its flagship brand. Therefore. it will be easy to manipulate customer attitudes. Crest is the core brand. The generic line may bring in minimal revenue for the company. 55 . Therefore. and lower prices may suggest decreased value. higher prices may signify to consumers higher quality. a toothbrush called the Crest Deep Sweep.a component of value. products that may be roughly equivalent in terms of their features need to have a brand identity that will impact consumer choice. theta of branding is made easier. for instance. Secondary Brands . More often. And if it doesn't. For example.These brands typically have insignificant revenue potentials or expectations. your product or service will have been in existence for a while and have direct competition.
image is difficult to change once established. Share of market . which is built over time and difficult to change once established.availability. Characteristics of the Campaign Positioning is the art of creating a brand that can persuade and realistically demonstrate its relevance to a customer's daily life to become his or her regular choice. Benefits . Awareness . the higher your offering's awareness. these may be warranted or unwarranted. the better your sales results will be. which are directly related to presence. Reputation . Quality . but 56 .Distribution . limited distribution of a product or service may imply exclusivity to discerning consumers. but by how others perceive it. often represented by qualities the consumer relates to.enduring public opinion of brand character.consumers may equate certain positive and negative consequences with use of your product or service.perceptions of brand traits or prototypical buyers. higher quality will translate to more satisfied customers who come back again and again to purchase your offerings. Customer commitment . What's in a Name? A. Kosgrove says that the brand is not created by the marketer at all. Preference .which impacts satisfaction.prominence in the paid and unpaid media. Presence . In fact. Positioning salience . which is established by a combination of all elements of the brand.loyalty is built through long-term branding and close consumer contact. Image .top-of-mind awareness. Positioning is not created by the marketer or the individual brand itself. Like reputation. obviously.a predisposition to buy displayed by consumers who are establishing brand loyalty.differentiation from the competition.increased market share is a direct result of a successful branding campaign. products or services with a highprofile market presence will lead to brand recognition and increased sales. residual awareness and recognition.
Why do we believe Secret antiperspirant will keep women smelling sweet? Because "it's pH balanced for a woman. the greater the chances are that the prospect will buy that product. Ask yourself: Is the identity of the brand too young for my target market? Is it too old? Is it too upscale? Promises backed by support . Why do we trust Pantene shampoo. no company has found much success building brand equity. bread and milk are not branded items. wants and desires through your brand. and despite companies' push to try and brand the two products. To position your offering properly.Benefits need to be backed with some sort of persuasive reason to believe the product's hype. Many times. Marketers don't create the positioning. in turn. expectations and wants. they create the strategic and tactical suggestions to encourage the customer to accept a particular positioning in his or her mind.rather by the customer. That will. they can have a significant influence on how they are positioned. you will be able to more efficiently meet their needs. Relevance. Beer and cola. for instance? Because we believe in the brand's "revolutionary" Pro-V formula that leaves hairs strong and healthy." says Dettore. As you begin to understand the relationship that your customers have with your brand. Those drivers then come into developing products and services that best fit those audiences' needs and wants. on the other hand. Several characteristics can work in a positioning campaign.The more apparent the connection is between the brand and the prospect's daily activities. For instance." 57 . you need to identify the key attributes or benefits that represent the value of your product or service. they usually choose what is on sale or what is available on their local grocer's shelves. rather." While marketers do not literally position brands. or the connection that the prospect has to the brand identity. create trust in your brand. are heavily branded product categories: Consumers have formed a relationship with and will search out their preferred brands. When customers want either one of those staple items. such as: Relevance to a customer's lifestyle . and not a man. "Positioning studies identify the audience according to their needs. products or services have some formula or patent that is "unique" from all the other brands out there. "Positioning is everything. is how customers ultimately decide which brands to buy and which they will discard.
Types of Prompts in a Campaign 58 . the brand? Product Is the genuine article . could they be hurting.The Best a Man Can Get" or "Choosy Moms Choose Jif. Even service companies can make claims to being the real deal. Some examples of crystal clear campaigns include "Gillette .No matter how brilliant a strategy you have. how can I change them to be more accurate? Message of the brand Is appropriate .Have you ever seen a commercial on TV that seems to come from left field? It grabbed your attention. The message that you send needs to be appropriate to the product or service you are trying to brand. For instance. products and services? If not. Coke tells you that "It's the Real Thing. and it seemed inappropriate for what is being sold. rather than helping." The copy line helps reinforce that this brand is the genuine article for that category of products. financial institutions can't effectively work humor into their ads because the preconceived notion is that banks are not supposed to be fun or entertaining. Ask yourself: In what ways are my products and services more "genuine" than my competitors'? How can I emphasize those elements to give the brand a competitive advantage? B.Ask yourself: What promises are you making about your brand? Can my products or services follow through on those promises? Message of the brand Is clear and focused ." "Coke Is It" and "Always Coca-Cola. you need to be clear about the message. Ask yourself: Are my advertising messages in line with the image I'm trying to convey about my company. but told you nothing about the product or service. Pace Picante sauce tells you that they are not the brand from New York City." Ask yourself: Are my messages in line with what I want to convey about my products and services? Are there messages that can be misconstrued? If so. AT&T's True Voice lets its customers know that they are receiving a level of clarity above what other telecommunication companies carry through their fiber optic lines. For instance.Many successful companies build customer trust by claiming to be the real McCoy.
and it may be different than measured quality. or be of "higher quality" than a generalist. "If you look at the most profitable companies in the country. but you have to get people to believe in it. and a specialist is perceived to know more. For example." say the best way to increase perception of quality is to narrow the company's focus.' Look at the computer industry. "Somebody can come in and say. 59 . Quality positioning . That's why it makes sense to look at alternative positioning types before deciding on which one you will attach to your brand. You can talk about how your product or service is better. but all of these brands carry a perception of higher quality because of their higher prices. But PC manufacturers will say that the PC is better because more people believe in it. Another way to build the perception of high quality is to simply attach a higher price tag to your brand. or the perception of quality. they explain. however. does a Rolex really keep better time than a Timex? Does a Mont blanc pen write better than a Cross? Do Sony radios get better reception that Sanyo's? Do Calloway Clubs really improve your golf game? Not really. Be aware. Al Reis and Laura Reis. A brand can evoke several different types of prompts." Quality.Once you determine the way in which you can reach your market. the next thing to look at is how you are going to lure your customer to try your brand. lies in the mind of the buyer. things are not always as they seem. People say that Apple is a better product [than the PC]. Most people think that they know a high quality product from another.Perception of quality is probably one of the most important elements for a brand to have and can be combined with any of the other prompts below." says Kosgrove. they have a very high perception of quality. and you will succeed in creating a powerful brand. Build a powerful perception of quality. When you narrow a product's focus. that positioning prompts are not verifiable scientific hypotheses. but in reality. 1. 'My product is better. you become a specialist rather than a generalist. for instance. and there is a great deal of interpretation and high degree of risk that is involved in choosing one positioning over the other. authors of "The 22 Immutable Laws of Branding. That method is called the "positioning prompt" of the brand.
Of course.More marketers rely on product/service features to differentiate their brands than any other method. Mont blanc has a fatter pen than Cross. started asking computer users to liberate themselves from the PC camp and" Think Different. items that were considered to be a good "value" meant that they were inexpensive. have found a strong market.Believe it or not. which introduced a breakfast cereal that aims at undercutting brands like Kellogg's or Post. Feature-driven prompts -. 3. which was down on its luck in the overall computer marketplace. 2. In fact. co-branded names. Sketchers equates sneakers with cool and that characteristic passes to all who wear them. For instance. 60 . as well as smart companies like Quaker. Apple computer. Southwest Airlines is probably the best example of how a company has been able to offer discount prices and still keep a strong brand identity. high price is a benefit to some customers. Relational prompts -. and the positioning will be credible if you stick to the facts about the product. 4. packaged good brands." Jeep has created a car and branded apparel for rugged individualists. For instance. Unfortunately. Rolex makes a heavier watch than Timex. that stigma has fallen by the wayside. most of the other major airlines have followed Southwest's lead by rolling out valuepriced flights under new. but they don't necessarily improve performance. Value positioning -. not solely by what they sell. Private supermarket labels. brands that are considered a value are rising in popularity amongst consumers. These brands have achieved positioning based on who buys what they sell.One of the most effective ways to create interest in a brand is to send out a positioning prompt that resonates well with potential buyers. Today. the product or service does need to have some perk or difference to justify the higher price. The advantage is that the message is clear. Each of these characteristics gives the perception of quality.Although at one time. especially cereals. feature-orientated stances are often rendered useless if the competition comes out with a faster or more advanced model. experienced a backlash when their prices rose too quickly. Calloway clubs have a bigger head than Titleist. It allows the affluent consumer to obtain psychological satisfaction from the public purchase and consumption of a high end product. In fact.
5. And a new campaign from IBM has random people exclaiming. even between search engines on the Web. "How people feel about a brand is oftentimes need.Underneath our capitalist driven needs to consume.By definition. positioning deals with how one brand is thought of compared to its obvious competitors. Warm and fuzzy positioning -." because they use a new version of the Lotus Notes software program. you are buying the only real way to "Drive Safely." Need proof? AT&T's commercials are often tearjerkers. they usually make up for in directness and credibility. for instance tells customers that "It 61 . Rivalry-based positioning -. Other campaigns that challenge consumers to be the judge have cropped up between car companies. frozen meals cut meal preparation time to minutes.As the name implies. 7. anti-smoking lobbyists and the federal government for promoting an identity of cool that young people could aspire to and achieve through smoking their cigarettes. In the book." author Lynn Upshaw writes. Detergents and cleansers also make good use of these prompts. for one." I am Superman. problem/solution prompts show the consumer how a sticky situation can be relieved quickly and easily with the brand or service. asking friends and family to "Reach Out and Touch Someone. or a state of mind they might like to achieve. 8. which means that emotional or psychological approaches can oftentimes be very effective as positioning prompts. the idea of a rivalry-based position might seem redundant but many campaigns take this approach." 9. "Building Brand Identity: A Strategy for Success in a Hostile Marketplace. The now defunct Joe Camel mascot for Camel cigarettes infuriated parents. As such. we are still docile and emotional animals. Benefit-driven positioning -.or desire based.Other brands base their entire positioning on the fact that they give back to the consumer. Packaged good brands tend to be the most frequent users of problem/solution prompts. or a person they might like to be. many marketers play on our feelings. For example. 6.These are positioning prompts that offer prospects a place they might like to go. Aspiration positioning -. Discover credit card. garbage bags. are constantly going head-to-head to prove which one has the most power to lift stains." Volvo hints that through purchasing their Swedish import cars. What problem/solution campaigns lack in imagination. Therefore. Problem/solution prompts -. Laundry detergents.
If you sell computers. Similarly. Determining Which Position Will Work for Your Brand To determine which position will work best for your company. your marketing team should be able to describe a precise customer benefit that can be addressed in some way by the brand. for example. After completing the necessary research and reviewing the relevant examples of positioning. The team members must be clear on what customer benefits are being offered and how they are based on real life needs and desires. Now nearly all credit cards offer some type or reward. be it frequent flier miles. ask yourself what business you are really in. focus on relevant reality-based customer benefits. To accomplish this. have them answer the following questions: • • • • • Who are your competitors and how are they positioning their brands? What can you offer that is different? Who would buy our product or service? What markets should we target with our brand? Do we need to register trademarks for our products or services? 62 . you maybe in the business of: • • • • Information Speed Convenience Technology If you sell travel packages. discounts on gas or store purchases. C. you may be in the business of: • • • • Tourism Recreation Entertainment Stress-reduction Next. Discover was among the first major credit cards companies to provide its users with a financial incentive for using their card.Pays to Discover. determine what the benefits are for your products and services." Use the card and get money back.
It's hard. "you are more willing to overlook flaws and search for strengths. who is best known for unorthodox marketing antics like shooting an underwear- 63 . is the brand because the personality and the interest of the founder is going to have a lot to do with the way that the company is perceived by others. and the beliefs and experiences similar to a personality make a brand rise to a new level. reinforce the purchase decision. An attractive brand personality can pre-sell the prospect before the purchase. if the founder is a high adventure sports enthusiast. In such cases. good or bad. he says. An entrepreneur or founder. how will we overcome them? • • • • Building Brand Personality Brands that carry with them a true persona. to a large extent. founder of Joe Boxer. humorous line of boxer shorts and loungewear that the company produces bears the distinctive image of the zany Graham himself. a personality helps to humanize an otherwise inanimate object or service so that a prospect's defenses are lowered. In matters of branding. Every contact they have with you helps to build that brand. According to Kosgrove. small-company brands usually take on the personality of the entrepreneur who owns them. After all. for an entrepreneur to create a brand that is a 180-degree turn against what the founder is like. it's hard not to like someone with a good personality." says Kosgrove.• Are there extension opportunities for these branded products or services? If so. and help forge an emotional link that binds the buyer to the brand for years to come. "A brand is everything that your customers know about you. the brand will probably not be the favorite of a conservative investment banker." One entrepreneur whose personality permeates every aspect of his brand is Nicholas Graham. Therefore. The off-beat." writes Upshaw. what are they? How much advertising support are we going to need for the brand and how much will it cost? Does our budget allow for those costs? How descriptive is the brand? Are there ways that it can be improved? Can the brand name be pronounced easily? Does it translate well into other languages? Are there regulatory issues? If so.
but also a face. relate to. in some ways. a brand with a distinctive personality presents the would-be buyer with something he or she can relate to as an individual.Provider-driven images are popular with services because there is a greater need to build confidence between the provider and seller since there is usually an intangible product on the table. it can make it easier for customers and prospects alike to understand what the marketer has to offer. these generations are also skeptical of marketers and are keenly aware of when a brand is targeting them. Prudential's "The Rock" and Allstate's "You're in good hands.laden rocket into space and holding an undergarments "fashion show" on a transatlantic flight on Virgin Airways. A brand's personality can offer the single most important reason why one brand will be chosen over another. 64 . the Pillsbury Doughboy's laugh reinforces that the product will make your family feel good.Other brands like to show that the people who use the brands are people that you could be friends with. Provider-driven . packaged products often take on a personality that consumers can relate to. Image of the user . products come to life to give consumers more than just a brand to trust. Although a strong identifiable personality is not imperative. Many companies with branded products geared toward Generation X and Y use this tactic.As strange as it may sound. Whether through a mascot or an animated figurine. For instance. particularly when there are few product or service features that are different between competing brands. or want to be like. Brands that lean heavily on the provider image include insurance companies and financial institutions. The personality gives the consumer something to relate to that can be more vivid than the perceived positioning of the brand. Personality is usually shown in three ways. However. is much more real than the other aspects of the brand because it is the outstretched hand that touches the customer as an individual. The personality. Image of the product or service ." show that the brand is trustworthy and their brands reflect the same attitude. a practical prerequisite for success in an increasingly individual-driven marketplace. Even more important.
The larger company receives the added benefits from the smaller company's product. For instance. "Does it have Intel inside?" In fact.Strengthening Your Core Brand A. Tropicana and Chiquita have made numerous fruit juice concoctions by blending their respective specialty flavors. co-branding. one partner in every co-branding partnership will receive more attention than its counterpart. Intel's Pentium Processor campaign has-been so successful that many computer buyers don't care whether they have an IBM or Hewlett-Packard or Dell computer. Instead. particularly for small companies that oftentimes get overshadowed by larger partners. Check that your potential partner is not only compatible with your product but also that it won't eclipse your own brand. their question is. No two brands have exactly the same impact on the consumer.L. Co-branding works because it creates new excitement for the brands involved. On the Web. However. And Betty Crocker uses real Hershey's chocolate in their brownie mix. For instance. ask yourself if the excitement that the deal will bring will build the brand or sabotage it. are rampant. A slew of credit card companies has-been teaming up with retailers to offer co-branded items such as the L. If that risk 65 . Besides content swaps. Therefore. One brand teams with another to offer a product with an enhanced (or seemingly so) benefit. Intel has been so successful at marketing their brand that the industry now benchmarks the performance of other semiconductor chips based on Pentium by calling them Pentium-like Processors. And financial companies have even jumped on the bandwagon. before you jump into a co-branded relationship. Co-Branding Although it has become somewhat of a fad amongst companies. Sometimes a co-branding strategy isn't as advantageous as it may seem. Bean credit card. companies invite branded products and services to be sold from their sites in what are known as affiliate programs. co-branding is a way for businesses to extend their brand's identity and cut expenses by partnering with compatible products and services. but the smaller company's brand doesn't really receive much attention. or what is better known as strategic relationships.
is accurately assessed and accepted by the junior partner and it's still a net gain for its brand identity. 66 ." writes Upshaw. For example: • The product's packaging can be reprinted so that bursts highlighting a "New" or "Improved" version of the program. opportunity to remind customer of upcoming sales. Store salespeople can wear pins alerting customers to ask them about the new software features. For example. then the partnership is sound. method to check up on efficiency/courtesy of service department. B. As you can imagine. and in what way they are relevant to the realities of the consumer's everyday life. if a software company comes up with a new version of one of its programs. The company can highlight the new product at trade shows or conventions. there are many different ways that a customer can have contact with a brand in such a way that it communicates his or her identity. A press release can be generated about how programs need to keep pace with the demands of the workplace and provide proper functionality. • • • • Brand Pep Boys Example Brand Identity Contract Follow-up phone call after servicing the car. nearly all of the brand identity contacts can be manipulated to increase emphasis on the new functions of the software. Support staff can tell current users that there is a new version available when they call for help or service on the older version of the software. Identity Contact Identity contact is the sum total of all information and experiences that a customer or prospect has with a brand. "It's the marketing team's job to prioritize identity contacts and to judge how they might contribute to the brand's identity. more can be done than just change a copy strategy and run new advertising. Contribution to Brand Identity Reminder that the auto maintenance shop cares about customer service.
Vans." The result. Advertisements with athletes of Olympic or star stature.'" says Kosgrove. has led the way in sponsoring events that their younger customers care about." Saturn said. Close-up of Nike logo on shoes of player in NBA championship or on Tiger Woods in PGA Gold Tours.. we are going to sell the company's brand. instead of being crabby with them and making them wait. The sneaker company has become synonymous 67 . they see people in matching polo shirts rather than suits. And when there is a service problem. 'We are not going to sell the car.' They do that by making sure that every point of contact with a customer is going to be completely different. a shoe company in Santa Fe Springs. and we are going to prove it. not slick. In addition to its humanitarian value. is that the brand is known as just what they said it was — "A Different Kind of Car Company"— even though they are still selling the same products that every other car company is.McDonald's Ronald McDonald Houses for the families of seriously ill children. MCI Nike Identity contacts are important because they can set a tone for subsequent contacts with the company and the brand. reinforcement of superior quality or product and prestige of being worn by winners. GM's Saturn is one brand that has been able to establish the commitment of the brand before a customer even walks into the showroom. Brand-name registration in compelling way. When a customer enters the showroom. "They say 'We are a different kind of car company. Grassroots Grassroots marketing is a form of branding that has really hit its stride in the last few years. reminder of savings positioned. and the showroom itself is clean and friendly. says Kosgrove. Sponsorships of everything from local baseball teams to non-mainstream musical events have been sought by marketers looking to carry their brands into the customer's backyard. Calif. C. they give coffee and doughnuts to the people when they come in. Electronic billboard tabulating how much MCI customers have saved by using its services. revisable numbers send signal that MCI is on top of what's happening in prices. Brand associated with the best athletes in their sport. RM houses remind parents of McDonalds' commitment to the American family.
can easily sponsor community events. while they may not have the budget to get involved with paying the gas and living expenses of sending two employees on a cross-country jaunt to spread the word about their brand." says Kosgrove. and how can I get involved in those things?" D. your identity problems may be over. an alternative music festival that combines other types of cutting-edge live entertainment. BMX biking and snow boarding categories." writes Upshaw. R. in-line skaters. the tour has also featured the Mega-Pump Climbing Wall Competition and Spike and Mike's Festival of Animation. In past years. Vans sponsors the very popular alternative Warped Tour. and your capacity problems may just be beginning. East Providence Cycle. Besides just sporting events.." 68 . The juice company sponsors two Winnebagos to roam the countryside and entice consumers to become "juice guys. Last summer's roving tour featured punk and "ska" bands as well as pro demos from skateboarders. Ask yourself: What do my customers care about. The business also sets up makeshift service shops off area bike paths on sunny summer days. "If you have a retail business in a neighborhood. "You want to look at what your customers care about. tune-up students' bicycles on a local college campus to get them ready for the back-and-forth trips from the dorms to classes. "When your company is lucky enough to be the beneficiary of word of mouth. Nantucket Nectars has also garnered fame by using grassroots promotion strategies. a bike shop in East Providence. rock climbers and BMX bikers.with alternative sports by hosting events in the skateboarding. for instance. the company has done well stepping into other areas of their customers' lifestyles.I. events where shoes are a prerequisite. "Word of mouth is still considered the most potent marketing communication of all because it's dispensed by the most credible sources of all — ordinary citizens who don't carry a built-in bias of commercial sponsors. word of mouth is well worth the effort it takes to generate it. you may want to focus on a charitable or community organization in your neighborhood and make a commitment to it so people understand that you are committed to the community. Word of Mouth Whether it is planned or not." Smaller companies.
nearly every beverage company came out with their own line of iced tea — each one with a different gimmick. Once strong word of mouth is achieved." For Web-based brands. which sells genuine military jackets and gear. going out to ask people who wrote to the company if their passion for Snapple was really true. Snapple was smart to sell its brand to the Quaker Company in 1994 for $1. the company's earnings slid." While it is difficult to intentionally generate a positive word of mouth branding strategy. says that by staying true to its mission. Ed Koch. One word of caution: Brands that are propelled by word of mouth often run out of steam quickly since most tend to be just fads or trends. the company US Wings. "It snowballs. spring-filtered. Creating an Online Identity 69 .Some of the better known beneficiaries of word of mouth phenomena: Furby.7 million. Competitors are also quick to duplicate the product or service being hyped. be it sun-brewed. the toy sensation of Christmas '98 that sent parents into shopping frenzies. and Tickle Me Elmo. the company has been able to generate positive promotion on the Web. "We are selling something with quality and value. the company has relied on word of mouth to promote its brand and Web site during its four-year history. After the onslaught of the copycat brands. Instead. has never posted an advertisement online. the hot toy in 1997. The founder. Sergeant Dave Hack." he says. For instance. People are going to tell other people. For instance. In one memorable ad. The company capitalized on that by highlighting the word of mouth phenomena in its television ads. word of mouth can work extremely well. after Snapple's success. and you end up with something that is very positive. or some other herbal concoction. the ex-Mayor of New York City. the company needs to convert the brand into something that will sustain the hype. Snapple also hit it big when kids started passing the word about the delicious iced tea beverage. visits a young fan from the Midwest to ask if he really believes that" Snapple is the only good thing to have come out of New York. be it the product or the promotional vehicle. ginsengfortified. it can be done if you have the right product and the right strategy. It also doesn't hurt to have something extremely unique.
Yahoo!." Research shows the brand names of seven Internet companies are already recognized by more than 50 million U." Still. According to Intelliquest. But it is always important to look toward the future. Companies that form strong associations between their name and their category now will be the ones who will capture future sales. only a percentage of them are actually buying online. so the Internet is one of the most cost effective ways to brand. "Any long established brand has had bad experiences. 10.6 percent Kosgrove says that companies that want to build their brand online may actually have an advantage over brands in the physical world since there is the opportunity to start freehand has new associations. How much effort should they spend on e-branding initiatives — that is. you have a clean slate. and there are mistakes that have been made in the past. which offer tangible returns? Although people are shopping online. According to a survey from Intelliquest.Online companies are putting branding to work with remarkable success. adults." he says.24 percent Computer Software: Microsoft . 70 .com .56 percent Music: CDNOW .30 percent Computer Hardware: Dell . "The Internet helps promote companies' products in a very efficient manner and especially to all audiences in all parts of the world.12 percent Travel: AOL.S.8 percent each Autos: Yahoo! . giving them' mega-brand' status.20 percent Clothing: The Gap ." says Dettore.000 Internet users associated the following Net names with the following products: • • • • • • • Books: Amazon. there are four times as many online shoppers as purchasers. Travelocity . "Whereas if you are fresh and new. "Typical advertising media hit only a segmented or regional strategy. a debate rages in the business departments of many Internet companies over the importance of branding. building up an online brand? Wouldn't those resources be better spent promoting e-commerce efforts.
Selection and speed -. "The World's Largest Bookstore. service is not as important [at the moment]. There is no way that a pet food company would be able to gain that brand identity in the real world. but rather as an animal nutrition expert. "Their brand is: you want it. but nutritional care for your animal. but they can promise to ship you the book of your choice practically overnight. That tactic is certainly true with large online stores such as Amazon. a pet food brand on the store shelf does not have many choices about the positioning of its product. Really." The company can't offer the warm. 2. The Web allows companies to take on new edge or benefit that a company would not be able to use in the real world. says Lynch. Once the information is entered into the database. "Then it isn't just a bag of dog food. we got it and we will get it to you quick.In short." says Lynch.Another way that brands can differentiate themselves is by providing online customized solutions and products for visitors based on information that they plug into registration forms.Online brands don't usually tout themselves as cheap. however. The site can walk visitors through a personalized analysis based on the animal's needs and activity level. John Lynch. an online marketing firm says. from Synnetry. and information telling you which formula of food your pet should be consuming is spit out. Customization -." Some tactics to build an online brand include: 1. data is cross referenced. "Sites need to be branded so that the consumer can have confidence in the site and is willing to make a purchase there. but nutritional care for your animal. selection and delivery are their brand. The main benefit is that they are going to be fast. For instance. 71 ." says Lynch. a company can brand itself as more than just a dog food supplier." says Kosgrove. Online. friendly environment that Borders can. e-branding is very important and must be taken into consideration. says Kosgrove. Prices are not as important. "What pet store owner is going to carry that message for the ped information telling you which formula of food your pet should be consuming is spit out. answers are compressed. and they will have a large selection. "Then it isn't just a bag of dog food.
There is no way that a pet food company would be able to gain that brand identity in the real world. people seem to never tire about the wonders of the Apple computer. Customers. auction. Unlike other media. Some other points to keep in mind when building an online community include: Members must share common interests and get satisfaction from connecting with others Members should be able to participate in something such as a forum. prospects and critics of the brand have strong opinions about what they like and don't like. or join mailing lists or user groups 72 . If your brand can stimulate a community around it. you need to have a category that will engage people and spur them to want to talk with one another. For a community to be successful. Build a community -. Ways to increase contact and keep your brand in front of people include creating: • • • • • Newsletters Targeted emails Message boards Chat Advice columns 4." 3. Using Interactivity -.Creating services that other Web companies don't have will ensure that your brand is stronger than the rest. which leads to many opportunities for community interaction. For instance. chat group. Luckily.Community is the other buzz online. the Web is the perfect place to do just that. online customers can interact with the brand and its identity in a way that no other medium can offer. then it has a powerful ally. "Through the Internet. The company's brand is the focus of debates and discourses in the computer world. they are allowed to create a better position for themselves than they could if they were going through regular distribution channels. "What pet store owner is going to carry that message for the pet food manufacturer to the pet food buyer?" asks Lynch.
Williams says that when shopping for strategic partners. Anyone who buys a shirt is going to want to buy a tie. "Synergistic sites can swap banner ads usually without any fee being paid. enhance visibility and increase revenues for companies. It's important to find partners who are going to help promote our site. says Williams. each time you purchase a package from an e-retailer." says Kosgrove. For instance. "If your site sells ties. Federal Express also allows catalog companies like Lands End to move Federal Express data to their own Web sites so that Lands End customers can track their packages' progress. Both shipping companies invite companies to use their software to calculate shipping weights and secure deliveries to the purchaser's home." says Lynch. Good alliances on the Web allow traffic to flow between sites that have a common interest. One way that synergistic sites can partner is by swapping banner ads. One of the best ways that an e-commerce site can partner with other sites is to embed themselves within another company's site.com will also send a heads-up to subscribers telling them about movie promotions that Big Star is running exclusively for Women.com is one site that fit the bill. We also have fitness videos in their health and wellness area and children's videos in their family areas. Women. personalize user experience through interactivity with other members and develop opportunities for common leadership/ownership. "We advertise in their entertainment areas. Form Strategic Alliances -. chances are that you are also giving business to UPS or Federal Express. 5.Like co-branding. Women. "If someone comes to your site and sees you link with other people that they respect. 73 . they are going to feel good about being on your site. and we are often a featured vendor there. it would be good to form a relationship with a store that sells shirts.com members. strategic partnerships between Web brands can help strengthen identity." Besides that. Big Star looks for companies that have an active relationship with their members and are willing to get Big Star involved. Encourage early and steady contributors." Another way that E-retailers can create partnerships is by finding larger content sites to sell their wares. Give members something to care about by establishing a clear economic or social benefit.
the standard for customer support must be higher for the Web than it is in the off-line world. never replied. Dedication to Service . or were not accessible by email. Some of the basics that your Web site should have include: • • • • • Personal Domain Name Contact Information Simple site design and navigation Easy to identify prices.Since competition is only a few clicks away. are the ones that you don't even know that you are going to. The most essential aspect of customer support on Web sites is to respond to every request for information with accurate answers or corrective actions within competitive time frames. partners with smaller computer dealers online to let customers configure their own computers." says Kosgrove. in terms of traffic and selling. and you are multiplying your promotional money by many times because you have other people who are trying to get people to go to their site who in turn are at your site. it's likely that a customer won't come back to interact with your brand or your site. but actually Dell has lent Joe software so customers can customize their PC. if applicable Quick server response 7. Despite that logic. It may look as if you are on Joe's Computer Shack Web site." says Lynch. "You are not spending all the promotion money. This is of the utmost importance when you are building a new brand or bringing a new brand to the online arena. people are going to say. Building credibility -. but your Web sight is impossible to navigate and doesn't have an email response or is just kind of clunky. "If your other communications look warm and friendly and you brand yourself as serviceoriented. however. If your customer service skills aren't up to par. 'I thought you were someone else but now I know who you really are'.Dell Computer Corp. 74 .Online customers have little opportunity to see your brand's dedication to service. "The best sites in the world. 6. So be sure you do your homework about what goes into a strong Web site. market watcher Jupiter Communications found that 42 percent of the top-ranked Web sites either took longer than five days to reply to customer email inquiries.
"Answering thousands of questions per month is an enormous challenge for sites offering complex products and services. which leads to the finding of alternatives between products that can be acquired with their relative advantages and disadvantages. These researches try to find out: 75 . A process of buying starts in the minds of the consumer. it is not the be-all. Then follows a process of decision-making for purchase and using the goods.4 Consumer Decision Process Consumer behaviour can be defined as the decision-making process and physical activity involved in acquiring. extensive consumer research studies are being conducted." One way to solve the email deluge is to take advantage of "auto-acknowledge" software that responds to all incoming requests stating that the question was received and estimates a time frame for how long it will take to respond to the question." says Ken Allard. This leads to internal and external research. end-all of customer service. using and disposing of goods and services. To understand the likes and dislikes of the consumer. and then the post purchase behaviour which is also very important. While email is the primary communication tool."This effort illustrates that many Web sites have been unable or unprepared to respond to the flood of user questions that come in via email from their sites. 3. because it gives a clue to the marketers whether his product has been a success or not. evaluating. support staff or other communication tools that will help strengthen the relationship between your brand and customer. especially if they never had a traditional call center. Yet companies that delay responses to user questions instantly lose a significant degree of credibility and user loyalty. This definition clearly brings out that it is not just the buying of goods/services that receives attention in consumer behaviour but. and not responding perpetuates the consumer notion that using the Web site is not a reliable method of doing business with that company. group director of Jupiter's Site Operation Strategies. the process starts much before the goods have been acquired or bought. Companies that want to attach a sense of dedication to their brand should think about having a call center.
The consumer and his life style are influenced by a number of factors shown all around the consumer. and all marketing decisions are based on assumptions about consumer behaviour. What the consumer thinks of the company’s products and those of its competitors? How can the product be improved in their opinion? How the customers use the product? What is the customer’s attitude towards the product and its advertising? What is the role of the customer in his family? Consumer behaviour is a complex. Fig. subculture. values. reference groups. 76 . dynamic. These are culture. demographic factors. social status. the involvement of the buyer and the risk that is involved in deciding the product/service. A simplified framework for studying consumer behaviour The process of decision-making varies with the value of the product. multidimensional process. The figures show the consumer life style in the centre of the circle.
All these factors lead to the formation of attitudes and needs of the consumer. which are consumer’s emotions. to find how the cool atmosphere can be provided. Thereafter the purchase is made and the product is used by the consumer. by an air-conditioner or. The constant use of the product leads to the satisfaction or dissatisfaction of the consumer. The marketing strategy is successful if consumers can see a need which a company’s product can solve and. The figure below gives an idea of the above discussion. This may be the problem of creating a cool atmosphere in your home. or to the rejection of the product. Position the product according to the customers likes and dislikes. First of all. rather than looking for new ones. Consumer is also influenced by the marketing activities and efforts of the marketer. It is more profitable to retain existing customers.household and also the internal make up of the consumer. motives of buying. by a water-cooler. personality. The decision-making process consists of a series of steps which the consumer undergoes. For a successful strategy. information search is carried out. 77 . which leads to repeat purchases. the marketer must lay emphasis on the product/brand image in the consumer’s mind. For this. perception and learning. Satisfaction of the consumer. The brand which matches the desired image of a target market sells well. after the sales have been affected. offers the best solution to the problem. and can take care of the problem suitably and adequately. is important for repeat purchase.g. the decision is made to solve a problem of any kind. This leads to the evaluation of alternatives and a cost benefit-analysis is made to decide which product and brand image will be suitable. Sales are important and sales are likely to occur if the initial consumer analysis was correct and matches the consumer decision process. e.
Fig. Decision Process Fig. Creating Satisfied Customers 78 .
CHAPTER-4 Research Report TITLE: 79 .
RESEARCH METHODOLOGY: Research methodology is considered as the nerve of the project. On the basis of the study we can formulate the marketing strategy that can be implemented to increase the demand and sales of LCD TVs in the market. it is impossible to complete the project and reach to any conclusion. The project also deals with the future prospects of LCD TVs in India. The Research is Exploratory Research. The main objective of survey was to collect appropriate data. Without a proper wellorganized research plan.To study the “Advent of LCD TVs and their future prospects in India”. SAMPLE SIZE: 80 . Research methodology not only talks of the methods but also logic behind the methods used in the context of a research study and it explains why a particular method has been used in the preference of the other methods. In the present Research data has been collected from 50 dealers. To formulate the marketing strategy for increasing the sales of LCD TV in the market. Therefore. which work as a base for drawing conclusion and getting result. research methodology is the way to systematically solve the research problem. TITLE JUSTIFICATION: The study mainly deals with studying the response of Indian market towards the introduction of LCD TVs. To analyze the factors influencing the customers to choose a particular brand of LCD TV. OBJECTIVES OF THE PROJECT: • • • • To analyze the LCD TV Market of North Delhi. The project was based on the survey plan. To know the customers view towards LCD TV of different brands.
The accuracy of indications given by the respondents may not be consider adequate. SAMPLING METHOD: Percentage Method. Time was the major constraint. SOURCE OF INFORMATION: Primary Data is used. SAMPLING PROCEDURE: Open and Close Ended Questionnaire are used. The dealers may be biased. SAMPLING TECHNIQUE: Convenient Sampling Method.50 dealers. LIMITATIONS OF STUDY • • • • The respondents were limited and cannot be treated as the whole population. 81 . METHOD OF DATA COLLECTION: Questionnaire Method has been used.
CHAPTER-5 Data Analysis and Interpretation On the basis of the survey conducted in North Delhi on LCD TV the following analysis and interpretation has been obtained: 1. Market Share of different Brands of LCD TVs in North Delhi: 82 .
2. Market Share of Different Brands of Colour Televisions in North Delhi: Brand Samsung LG Share 46% 28% 83 .Brand Samsung LG Sony Sansui Panasonic Videocon Haier Philips Share 36% 20% 16% 6% 6% 10% 2% 4% Interpretation: Samsung is having the maximum market share in North Delhi in case of LCD TVs.
20% Share of Different size of LCD TV 26 inches 33% 32 inches 30. 3. Percentage Share of Different sizes of LCD TVs in the market: Size 19/20 inches Percentage 31.Sony Sansui Panasonic Videocon Markson Philips 4% 2% 2% 12% 2% 4% Interpretation: Samsung has the highest market share in North Delhi in case of CRT TVs.30% 40/42 inches 5.50% 84 .
Various Criteria for choosing a particular Brand of LCD TV by the customer: Criteria for choosing a particular Brand of LCD Number of Dealers 85 . 4.Interpretation: 26 inches LCD TV is most sold in North Delhi with around 33% of the total customers buying this size of LCD TV.
20 of the total dealers feel that customers buy a product keeping in mind some particular brand. 5.TV Brand Loyalty Price Mixed Criteria Product Innovation 20 11 18 01 Interpretation: This chart shows that the Indian Customers are Brand Concious. Factors governing the demand of LCD TVs in the market: Factors governing the demand of LCD Percentage TVs Price Reduction 62% Awareness Campaigns 28% 86 .
80% 87 .Advertising Technical Advantages 8% 2% Interpretation: A major portion feel that price reduction will help companies to increase there sales of LCD TVs in the market.40% 49.80% 24. Share of different customers according to the income group they belong to: Income Group Share Percentage Lower Income Middle Income Upper Income Group Group Group 25. 6.
15362 26 inches Rs.Interpretation: The middle income group is the major buyer of LCD TVs in North Delhi. 8. 23274 88 . Most common size purchased by Middle Income Group = 26 inches. Most common size purchased by Upper Income Group = 32 inches. 7. 14042 22 inches Rs. The price comparison of various Brands of LCD TVs available in the market is as follows: Brand Samsung 19 inches 20 inches Rs. Most common size purchased by Lower Income Group = 20 inches.
9990 Rs. 13910 Rs. 33712 Rs. 14200 32 inches Rs. 53800 Rs. 29930 Rs. 29779 Rs. 24700 40 inches Rs. 15120 Rs. 14200 Rs. 55785 Rs. 22529 Rs. 33600 Rs.LG Sony Haier Panasonic Sansui Philips Toshiba Onida Videocon Hyundai Markson Brand Samsung LG Sony Haier Panasonic Sansui Philips Toshiba Onida Videocon Hyundai Markson Rs. 19700 42 inches Rs. 12063 Rs. 54990 89 . 28233 Rs. 57617 Rs. 30562 Rs. 60100 Rs 13900 Rs. 13016 Rs. 22600 Rs. 28320 Rs. 54300 Rs. 12990 Rs. 17800 Rs. 20500 Rs. 27450 Rs. 14943 Rs. 34500 Rs. 36460 Rs. 23542 Rs. 22000 Rs. 22340 Rs. 60426 Rs. 29500 Rs. 33131 Rs.
Interpretation: Hyundai LCD TV is having the least price in the 19 inches range. 91 . Only two companies are manufacturing 22 inches LCD TVs and LG’s LCD TV is cheaper in comparison with Samsung’s LCD TV. Except Haier all other Brands have almost equal price for a 20 inch LCD TV.
92 .Interpretation: The price range offered by Markson is least in case of a 26 inches LCD TV.
Interpretation: Markson LCD TV is the cheapest in comparison with other LCD TV brands in 32 inches segment. 93 .
Interpretation: Videocon is offering its 40 inches LCD TV at the least rate in comparison with others.
Interpretation: Markson’s LCD TV is very cheap in comparison with LG in 42 inches LCD TV segment.
9. Various advantages because of which customers choose LCD TV over CRT TV: Main Advantage of LCD TV Image Clarity Multi functionality Easy to handle Share 88% 8% 4%
Interpretation: Image Clarity is major advantage which people consider while buying a LCD TV.
10. The features available in various brands of LCD TV( size=32 inches) are as follows: Features Full HD/HD ready HDMI Motion Flow Colour Picture Processing USB Playback Contrast Ratio Response Time Power Consumption Audio Output Brightness FM Radio Bluetooth Connectivity Hard Drive Features Full HD/HD ready HDMI Motion Flow Colour Picture Processing USB Playback Contrast Ratio Response Time Power Consumption Audio Output Brightness FM Radio Bluetooth Connectivity Hard Drive Samsung Both models available 4 HDMI 100 Hz Wide Colour Enhancer 10-bit Yes(JPEG only) 50,000:1 to 1,00,000:1 2.4 ms to 4 ms 150- 180W 24-30W(RMS) 500cd/m2 Yes No No Onida HD ready 2 HDMI ---No 30,000:1 8 ms 180W 400W(PMPO) 500cd/m2 No No No LG Both models available 2 HDMI 100 Hz 1.3 Deep Colour 10-bit Yes(DivX only) 60,000:1 to 80,000:1 4 to 5 ms 125-150W 24W(RMS) 500cd/m2 No Yes No Videocon Both Models available 2 HDMI -16.7 million display colours -No 30,000:1 to 50,000:1 5 ms 160W 20W(RMS) 480cd/m2 No No Yes Sony Both models available 4 HDMI 100 Hz Live Colour 10-bit Yes(some models) 20,000:1(stopped displaying) 4 ms 115-145W 20W(RMS) 500cd/m2 Yes No No Sansui HD ready 2 HDMI -16.7 million display colours -No 30,000:1 6.5 ms 160W 20W(RMS) 500cd/m2 No No No
500:1 8ms 140W 20W(RMS) 500cd/m2 No No No Philips HD ready 2 HDMI 100 Hz 29.Features Full HD/HD ready HDMI Motion Flow Colour Picture Processing USB Playback Contrast Ratio Response Time Power Consumption Audio Output Brightness FM Radio Bluetooth Connectivity Hard Drive Features Full HD/HD ready HDMI Motion Flow Colour Picture Processing USB Playback Contrast Ratio Response Time Power Consumption Audio Output Brightness FM Radio Bluetooth Connectivity Hard Drive Interpretation: Panasonic HD ready 2 HDMI 100 Hz --SD card slot 10. 97 .000:1 16 ms 150W 30W(RMS) 500cd/m2 No No No Haier HD ready 3 HDMI ---Yes 15.000:1 6.8 Billion Colours 8-bit No 33.5 ms 130W 30W(RMS) 500cd/m2 No No No Markson HD ready 1 HDMI --8-bit Yes 10.5 ms 160W 20W(RMS) 450cd/m2 No No No The comparison suggests that Markson needs to enhance its features to beat the competitors in the market.000:1 8 ms 160W 20W(RMS) 450cd/m2 No No No Toshiba HD ready 2 HDMI 100 Hz Real Colour Algorithm 10-bit No 4.000:1 8.
CHAPTER-6 Observations and Findings 98 .
FM radio. Around 50% of the total sale of LCD TV is because of the middle income group and they usually purchase a 26 inches LCD TV. Brand Loyalty plays a vital role among Indian customers while buying the LCD TV. Samsung has made a good name in case of sales of CRT TVs as well. Samsung is offering very good features at a very reasonable rate rite now. Image clarity is the major reason why people go for LCD TV instead of a CRT TV. Keeping there room size in mind. The competition is only between LG and Samsung for a 22 inches LCD TV. response time and power consumption are the primary specifications about which the customers ask for. contrast ratio. USB playback. 26 inch LCD TV is most preferred by the Indian customers. Markson is offering its LCD TVs at a very cheap rate in comparison with all other brands available in the market. 99 . Bluetooth connectivity and hard drive are the secondary features which the customers want to have in the LCD TV. Price reduction and awareness campaigns can help a company to increase the demand of LCD TVs in the market.Observations and Findings • • • • • • • • • • • • The market share of different LCD TVs indicate that Samsung is emerging as a great Brand in the Indian market. HDMI ports.
CHAPTER-7 Conclusion and Strategy 100 .
Response time needs to be decreased to 4-6 ms. Our old distributors do not have Markson LCD TV in their show rooms to sell. Branding strategy and study of Consumer Behaviour can take a company to the new heights. 2.1 Conclusion This project helped me tremendously in knowing how marketing activities are carried out in a real situation. Motion Flow and colour gamut specifications need to be displayed. 7. Picture processing needs to be increased to 10-bit processing. Increase the contrast ratio to about 35. 6. Increase its HDMI interface ports to two or three in number. We need to have more distributors in North Delhi for LCD TVs. FM radio and inbuilt Hard Drive option can also be added. Launch 32 inches and 42 inches LCD TV with high resolution and Full HD specification. And a proper marketing strategy can help a company to take the maximum advantage of this emerging trend. I was able to understand only the theoretical work but now I have the practical experience about the marketing activities. 4. 7. Bluetooth.000:1. Special additions on profits earned by distributors can be provided by the company to increase the sales of LCD TVs. 3. The proper selection of the marketing mix. 3. 5. The following points need to be considered while deciding on the distribution network: 1.2 Proposed Marketing Strategy The following changes in the product features can help Markson to improve its LCD TV sale in the market. The prospects of LCD TV market are quite bright in the near future. 2. The distributors need to be trained on how to market our LCD TVs. 1. In classroom lectures. 101 .7.
4. 5. Red and Blue while preparing the pamphlets and brochure. As I surveyed through the market I found out that all dealers are expecting that prices of LCD TVs will continue to crash till Diwali so I think that we should reduce the prices of LCD TVs so as to remain competitive. I think that a 22 inches LCD TV can cater for both the income groups well. 2. 102 . So I think that following points should be considered for advertising LCD TVs: 1. A combo offer or a discount offer for old colour TV can be of great help to increase the sale of LCD TV. Try to sponsor events such as annual functions of the companies and large gatherings. 3. Place the company ad banners at various metro stations and also in the metros as well. No need to have actor/actress as a brand ambassador. I suggest that the company should launch a 22 inches LCD TV in market. Use fundamental colours like Black. Almost 50% of LCD TVs are purchased by customers belonging to middle income group and 26 inches LCD TV is commonly bought by them and 25% of LCD TVs are bought by lower income group of 19/20 inches in size. all of us know that advertising plays a vital role in creating awareness among the customers about the product. So.4. These types of colours hit the customers psychologically. Financial Schemes on LCD TVs can also help us to increase the sale of LCD TV as we do not have to reduce our profits and less cash flow will be needed by the customer. Now coming down to promoting. Select one or two models for these ad banners and pamphlets so as to target Young India. So.
It can be done in the following way: 1. I think that it is very difficult for Indian minds to adopt any product which is associated with British People. The two suggested Logos by me are as follows: Observe carefully: The person is enjoying the music. So it is very important to develop the Brand Image in the market. I also analyzed that Brand Loyalty is the main criteria among customers for choosing a particular brand of LCD TV. 103 . Brand Logo: I think that we need to change our Brand Logo from British Flag to something else.
B) Making life pleasant and enjoyable. C) Bringing colours of life together. A Free Toll number also gives an indication of the brand. 4. so choose a brand ambassador who represents the Image of Young India. Brand Slogan: Brand Slogan tells that what the company is aiming for. It gives a signal of good infrastructure of the company. Brand Personality: We should select a brand personality as such which hits the minds of the Young India (25-40 years of age group). 2. It should be such that the customer feels that he is a part of the process. I think that if we will adopt this kind of marketing strategy for LCD TVs then we will definitely be able to capture a significant part of Market Share in the near future. This age group holds the maximum buying capacity.Metallic M represents that our effect is everlasting. 104 . 3. Two such slogans which can help the company are as follows: A) Selling satisfaction not products.
CHAPTER-8 BIBLOGRAPHY 105 .
net http://www.com/Report/CP13_toc. http://www.indianmba.cci.rncos.com www.wikipedia.in/pdf/surveys_reports/consumer-durables-sector.com www.en.kioskea.cfm?id=27593 www.scribd.com www.markson.pdf www.References: Marketing Management by Philip Kotler.emsnow.htm www.com/npps/story.in 106 .
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