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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.
such as retail boom. Each of the questions was designed to satisfy at least one of the secondary objectives of the research. The exploratory findings helped me in determining the key factors which needed to be further explored for making the marketing strategy for my company. 4 . The industry has been witnessing significant growth in recent years due to several factors. To find out the reasons influencing the minds of the common man a marketing research was carried out by me. The response format was of a mixed variety which also helped in better determination of outcomes. on the back of rapid economic growth. 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. growing disposable income and availability of easy finance schemes. representing vast room for future growth. the consumer electronics goods. Keeping the above fact in mind. But still. This is attracting many foreign majors to the country. 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. has made the country’s consumer electronics industry highly dynamic. microwave and washing machines have low penetration in the country.EXECUTIVE SUMMARY India has an increasingly affluent middle class population that. like refrigerators. The survey was conducted by me by visiting 50 dealers of consumer electronics in North Delhi region. The exploratory research was carried out with 50 respondents with a set of 20 open and close ended questions.
1 1.3 2.4 4 5 6 7 7.3 1.2 1.CONTENTS Chapter No 1 S.6 2 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 .No 1.1 2.2 2.5 1.1 3.4 3 3.2 3.1 7.4 1.3 3.
video and information technology is a major reason.1 Worldwide Consumer Electronics Industry The consumer electronics industry is a global business. The convergence of digital-based audio. Consumer electronics appliances such as digital televisions. portable media players and educational toys are in a state of constant flux. products and markets. These changes began nearly two decades ago and have resulted in an avalanche of state of the art electronic devices in the 6 . It is ushering in a dawn of convergence. witnessing a phenomenal growth. the consumer electronics industry is in the midst of a new wave of change.CHAPTER .1 CONSUMER ELECTRONICS INDUSTRY 1. In recent years. of technologies.
incorporating both digital visual and digital MP3 capabilities.1 percent growth rates of the previous two years.4 percent in 2007. anytime will continue to drive innovation and CE sales. delivering new and exciting entertainment products that have changed the way we live. any growth is sure to be welcome. The computer industry has also benefited. Digitalization. DVD player/recorder. The CEA said that although mobile phone growth was expected to slow "the macro trend of work. Still with the economy in a downturn. miniaturization and mobility are the key elements for modern consumer electronic products. the CEA forecast. Digitalization transformed the consumer electronics sector. play and communicate anywhere.market. HDTV’s with VGA connections and SD/MMC card slots.7% to $694 billion in 2008. Mobile phones accounted for 26. down from the 10. Miniaturization also accelerates the growth of the consumer electronics industry. The demand for a multitude of portable.5 percent and 9. Mobile phone sales grew by 13 percent in 2008 and by 15. While sales grew 13. Microsoft-based Media Centre PCs have pushed the two industries even closer together than before. computer monitor and LCD TV. personal media players. still camera.6 percent in 2009 to 232 million units. growing by just 2." Television sales are expected to grow by 2. consumer confidence at lows and consumer electronics companies suffering. Global consumer electronic sales are expected to top $724 billion this year. according to the Consumer Electronics Association. “Liquid crystal displays will grow slower in 2009 but will still achieve double digit unit and 7 .1 percent this year over last year to 1. It has also witnessed the emergence of mobile telecommunications technology. from mobile phones to televisions to computers. making its way into the family living room. The slowdown in 2009 is expected to affect products virtually across the board. this year’s growth will only be 4. It paved the way for digital devices such as camcorders.7 percent of total revenue last year but sales are expected to slow in 2009.2 billion units.3%. in-home or in-car consumer electronic items with multiple functions has increased tremendously.
"Desktops will experience declines in both units and revenue. 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. "Unit sales of portable navigation grew 55 percent in 2008 and are expected to grow another 22 percent in 2009.4 percent in units and 1." the CEA said. the changes in the consumer electronics industry are not being driven by product evolution. but by fluctuations in the industry's business models. energy efficiency and recycling potential.2 percent over 2008 but still a significant drop from the 17. televisions. Consumer electronics companies producing computers. The CEA said MP3/digital media players were expected to generate "strong sales" in 2009 along with portable navigation GPS units. Companies that are capable of change and those that develop branding will be most successful. the CEA said. It said that in 2005.7 percent. the trade association said to expect products that were environmentally friendly in terms of the materials used. As for trends to watch this year. packaging. "Laptop PCs are expected to continue to generate double digit increases in units and revenue in 2009. The trade association said the trend towards "no strings attached" wireless devices would accelerate along with increased touch screen and voice activation technology. Blu-ray DVD sales were expected to nearly double in both unit sales and revenue in 2009.It said the game console market is expected to grow by 5." the CEA said. the ratio of desktop PC unit sales to laptop PC unit sales was 58 percent to 42 percent. the CEA said. with North America accounting for the largest percentage of Blu-ray sales followed by Western Europe and Japan.8 percent growth of last year. "Plasma displays are forecast to achieve positive unit growth and negative revenue growth." the CEA said.1 percent in revenue in 2009. DVD players and other household electronics face the same challenges as other consumer goods 8 .revenue growth worldwide. Fundamentally." The CEA's 2009 outlook for computer sales is somewhat better. with growth forecast at 8." 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. The CEA said emerging powers China.
a factor that makes demand. 4. Samsung can claim to be the world's fastest growing electronic company. pricing and promotions management even more challenging. The Asia Pacific region is the market leader wielding the biggest chunk of the market. on the back of rapid economic growth. has made the country’s consumer electronics industry highly dynamic. Innovation. 9 . 3. Expanding distribution networks. Easy financing schemes that are making purchases possible.companies. The growth is aided by a multitude of factors. World famous brands such as Sony. closely followed by Europe. Growing consumer confidence due to rising disposable incomes. Increased local manufacturing. Japanese companies have captured the consumer electronics market. The rapidly falling prices and improved functionality provided by convergence are influential forces behind the growing consumer demand for electronic items. Panasonic and Matsushita are all owned by these Japanese manufacturers.2 Indian Consumer Electronics Industry India has an increasingly affluent middle class population that. The lifecycle of consumer electronics products is shrinking along with severe price deflation. 2. 1. Korean companies such as Samsung and LG are all trying to join the Japanese bandwagon. 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. differentiation and flexibility are critical to a company’s survival in the consumer electronics market. including: 1.
availability of credit. Products like air conditioners are no longer perceived as luxury products.Growth of Consumer Electronics Production in India 18 16 14 12 10 8 6 4 2 0 15. This has not favoured durable companies till now.9 12.7 16. changing lifestyles. 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 2011.8 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. Any incremental spending in infrastructure and electrification programs could spur growth of the industry. 10 . increasing consumer awareness and introduction of new models. over the years. rural electrification programs have always lagged behind schedule. especially the rural electrification program. double-income families.8 11. Given the government's inclination to cut back spending.2 13. demand for consumer durables has increased with rising income levels.
predicts the Indian audio/video consumer electronics industry will grow to Rs. FPD remains a focus area. Several companies are conducting market research in order to understand the psyche of an Indian consumer. the consumer electronics industry in India is poised for strong growth in the years to come. 390 crore ($4.5 billion) in 2007. 897. With a market size of Rs. 931.13 crore ($6.13 crore ($3.89 billion) in 2006. ISuppli Corp. Most players in the consumer-electronics industry have introduced products in the FPD segment.59 billion) by 2011.26. 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. Companies are focusing on customizing products to suit Indian tastes.15. thereby creating a niche for themselves. The inputs from this research are determining product attributes and pricing and accordingly are achieving better acceptance among consumers. By conducting consumer research. thereby incorporating specific design elements into their products. especially the Korean chaebols.The consumer electronics market is one of the largest segments in the electronics industry in India. catering to a population of more than 100 crore people.18. For example.0 per cent from Rs. rising at a Compound Annual Growth Rate (CAGR) of 10. and for few companies. 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 . companies are trying to identify customer requirements.
sets. they are expected to show a preference for branded products. India also is assuming a significant place in the global plans of several major electronics manufacturers. although such relationships represent an extension of their global relationships. Due to the lower prices of unbranded products. the trend is gradually changing. Furthermore. However. rural consumers have been inclined to buy these products. As the awareness among rural consumers rises. 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. In order to tap semi-urban and rural demand. EMS and ODM companies in India have been associated with several design companies. rural consumers have not been as brandconscious as their urban counterparts. Domestic consumption is reaching significant size to trigger manufacturing in the electronics sector. The move has positively impacted sales for companies opting for rural expansion. This is in alignment with India figuring into the plans of several companies that want to cater to the domestic and export markets. Although electronics production has remained a miniscule portion of overall Indian manufacturing for a long time. This is reflected by the fact that established players are reporting years to come. such instances are few and far between. ISuppli expects domestic manufacturing to be a key characteristic of this growth in the 12 . although they often have poor quality. Currently. The government has been focusing increasingly on developing the manufacturing sector by developing infrastructure. higher sales of products in rural areas. As the local market gains size. such as Flextronics' deal with in Silica for the development of SOC devices. However. some local partnerships also are appearing. thereby positioning it also as an export base. these associations will become more common. companies are expanding their distribution networks in these areas. rationalizing duties and creating export-promotion zones.
audio/video appliances. offering 4year industry forecast.Air Conditioner .Microwave Oven . The report thoroughly analyzes the historic performance and future prospects.Washing Machines (Semi-automatic & Fully Automatic) .Digital Camera & Camcorder .Television . underlining the future potential areas and key issues crucial for the industry development.Set-top Box .Refrigerator (Frost-free & Direct Cool) . and PC market.MP3 Players . It briefly discusses about the current and emerging trends in the industry. mobile handsets. of following consumer electronics products: .Mobile Handsets . the markets for these products are shifting to the semi-urban and rural areas. 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.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. 'Booming Consumer Electronics Market in India” offers extensive research on various consumer electronics products that are broadly classified as home appliances. This analytical research thoroughly evaluates the Indian consumer electronics industry.PCs (Desktop & Notebook) 13 .1.
changing lifestyle and rapid urbanization. are anticipated to drive the Indian refrigerators market over the forecast period.Driven by young population. Currently. and the share of FPTV is projected to increase at robust rate in near future. . . the Indian consumer electronics industry is forecasted to grow at a rapid rate of 10% to 12% in the coming few years.Volume sales of washing machine will be driven by growth in fully automatic category during 2008-09 to 2011-12. the split between CRT and FPTV is around 97% and 3% respectively.The market for televisions in India is changing rapidly from the conventional CRT technology to Flat Panel Display Televisions (FPTV).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.Frost-free refrigerator sales. demand for MP3 players and digital video appliances are anticipated to surge at double-digit rate in near future. certainly growing at a much faster pace than the direct-cool category. . 14 .Key Research Findings: . .The AC market in India is projected to grow at 30% to 35% for the coming few years.
Samsung design centers are located in London. Shanghai and Romen.1. Laden and Ignis. Colour Monitors and Refrigerators are being exported to Middle East. Los Angeles. 1958 (As a private Company) and in 1959. Whirlpool is the most recognized brand in home appliances in India and holds a market share of over 25%. operating 77 subsidiaries around the world with over 72. Estate. Kitchen Aid. USA with a global presence in over 170 countries and manufacturing operation in 13 countries with 11 major brand names such as Whirlpool. San Francisco. near Delhi. Bauknecht. In the year ending in March '06. Pondicherry and Pune. Colour Monitors. with around 18% of its employees working in Research & Development.1. Samsung ‘Made in India’ products like Colour Televisions. the annual turnover of the company for its Indian enterprise was Rs. CIS and SAARC countries from its Noida manufacturing complex. LGE started manufacturing radios. Samsung India has its headquartered in New Delhi and has a network of 19 Branch Offices located all over the country. LG India LG Electronics was established on October 1. Tokyo.000 employees worldwide it is one of the major giants in the consumer durable 15 . According to IMRB surveys Whirlpool enjoys the status of the single largest refrigerator and second largest washing machine brand in India. The parent company is headquartered at Benton Harbor. Refrigerators and Washing Machines is located at Noida. The company owns three state-of-the-art manufacturing facilities at Faridabad. Today. 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. The Samsung manufacturing complex housing manufacturing facilities for Colour Televisions.4 Competition Overview Samsung India Samsung India commenced its operations in India in December 1995. Michigan. Roper. Samsung India currently employs over 1600 employees. today enjoys a sales turnover of over US$ 1 billion in just a decade of operations in the country. 375 crores.
The Company has Representative Offices in Sharjah (UAE). The combined Sales during the Fiscal Year ended March 31. more than 2. It's global leading products include residential air conditioners. Nairobi (Kenya). and more than 18. The name was changed to Kalyani Sharp India in 1986. under the Indian Companies Act. home theatre systems and optical storage systems. Colombo (Sri Lanka).000 Retail Outlets.a leading manufacturer of 16 . 1932. Riyadh (Saudi Arabia) and Guangzhou (China-PRC). 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. The company has as many as 27 R & D centers and 5 design centers. amounted to about Rs. Sharp India Ltd Sharp India ltd was incorporated in 1985 as Kalyani Telecommunications and Electronics Pvt Ltd.200 Wholesale Dealers. Sony India Sony Corporation. The company was entered into a joint venture with Sharp Corporation. Toshiba had a presence in India since 1985 and was represented in India through their Liaison Office. the Company was incorporated with limited liability on March 3. The Company has a network of 38 Company-owned Retail Stores. The Company is one of the largest privately-held diversified industrial corporations in India.domain worldwide. Japan.000 million (US$ 1. Godrej India Godrej India was established in 1897. The company also has presence across the country with 21 company owned and 172 authorized service centers. In India. established its India operations in November 1994. 1913. Japan . 58. DVD players. Sony has its distribution network comprising of over 7000 channel partners. the company was converted into a public limited company in the same year. CDMA handsets. 2006. 215 Sony World and Sony Exclusive outlets and 21 direct branch locations.270 million).
Some of HIL’s product range includes Semiconductors and Display Components.consumer electronic products to manufacture VCRs/VCPs/VTDMs. Air Conditioning & Refrigeration Equipment to International Procurement of software. The government. The company manufactures consumer electronic goods such as TVs. Sharp has a production base in 26 countries with 33 plants. Industrial Components & Equipment. Customs duty on Information Technology Agreement (ITA-1) items (217 items) has been abolished from March 2005.5 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. 17 . It also supports the sale of Plasma TVs. 1. EHTP benefits include export credits. VCPs and audio products. in an attempt to encourage manufacture of electronics in India has changed the tariff structure significantly. LCD Projectors. and an expedited import-export process. 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. The company was accredited with the ISO-9001 certification in the month of February. 2001. All goods required in the manufacture of ITA-1 items are exempt from customs duty. and its products are used in 133 countries. EHTP (Electronic Hardware Technology Park) is an initiative to provide benefits to companies that are replacing certain imports with local manufacturing. It is now possible to import duty-free all components and raw materials manufacture products and export it. The products were sold under the Optonica brand name. VCRs. materials and components. Smart Boards and DVD Camcorders. LCD TVs. business tax incentives. no duties on imported components or capital equipment.
layout designs of integrated circuits and undisclosed information. floppy disc drives and CD ROM drives continue to be exempt from excise duty. The Government of India has developed a robust IP act to facilitate innovation. the member nations are asked to modify their existing laws. and the protection of industrial designs. India is a party to the “Trade Related Aspects of the Intellectual Properties (TRIPs) Agreement” and has accordingly. 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 agreement on TRIPs takes care of the intellectual property rights by enforcing the patent rights. amended most of its IPR Acts and Rules to conform to the said Agreement. The Industrial Design Act 1911 was effectively replaced by The Design Act 2000. trade marks.. The country has already made several changes in its IP acts over the years. 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. Excise duty on computers has been removed. Accordingly. a new Designs Act and amendments to the Patents Act show India’s continued effort to protect IPR. a new Designs Act and amendments to the Patents Act show India’s desire to change and adapt. hard disc drives. 18 . In the current WTO regime. geographical indications. and the Layout Design of Semiconductor integrated Circuit Act 2000 was enacted. copy rights and related rights.Customs duty on specified raw materials / inputs used for manufacture of electronic components or optical fibers / cables has been removed. Microprocessor. creation of a new Trademark Act. Several amendments to the Copyright Act. Customs duty on specified capital goods used for manufacture of electronic goods have been abolished. The Indian Copyright Act 1957 was amended in 1999. creation of a new Trademark Act. 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.
becomes difficult. unauthorized use of the patented innovations. their entire requirements of capital goods. 2. 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. Deemed export benefits are available to suppliers of these goods from the Domestic Tariff Area (DTA). trade marks. 19 . During the same period the FDI inflow for electrical equipment (including computer software and electronics) was US$ 3.94 per cent of the total foreign direct investment (FDI) approved. which was 9. free of duty. The ITA-1 would result in intensifying competition as more imported products will be easily available at lower prices. etc. The FDI approval for electrical equipment (including computer software and electronics) from January 1991 to March 2004 was US$ 7. Foreign Investment Policy: FDI Foreign investment up to 100 per cent is allowed in Indian electronics industry set up exclusively for exports. In fact. Out of these 217 items. Regulations 1. office equipment etc. results in zero customs duty on imports of all telecom equipment. 217 IT/electronic items were covered under the Information Technology Agreement (ITA) of the WTO for complete customs tariff elimination by 2005.32 billion. Enforcement of the TRIPs agreement makes the production of any product possible either through internal innovation or through formal transfer of technologies.29 billion. several items were already at NIL customs duty. IT/electronics was the first sector in India to face complete customs tariff elimination. Free Trade Agreement WTO regime which came in force in 2005. The units set up under these programs are bonded factories eligible to import.Once these laws come into force. The consumer electronics and durables sector is expected to continue to benefit from supportive policies and become globally competitive. raw materials and components. spares and consumables.
Foreign technology induction is encouraged through FDI and foreign technology collaboration agreements.Resident Indians (NRIs) including Overseas Corporate Bodies (OCBs). 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. Approval for setting up export-oriented units (EOUs) outside the zones is given by the Ministry of Industry. FDI and foreign technology collaborations are approved through automatic route by the Reserve Bank of India 20 . Department of Information Technology. 4. predominantly owned by them. Proposals involving foreign direct investment not covered under the automatic route are considered by the Foreign Investment Promotion Board (FIPB). 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.3. FDI/ Foreign Technology Collaboration Agreement The government facilitates FDI and investment from Non. Procedure for approval Once the investment in equity has been approved. components and raw materials or the engagement of foreign technicians for short duration does not require any additional approvals. Approval of Ministry of Home Affairs is not needed for hiring foreign nationals holding valid employment visa. the import of capital goods.
but also spend on transportation for moving inventory. Creating awareness about new technologies and products 5. This India. foraying into these rural markets has a considerable cost component attached to it. have a direct presence only in 15. etc. Inverted duty structure 3. But that remains a major hiccup in India. power. Declining margins for many players 2. still buys black and white TVs and doesn't know what flat screens are.000 to 18. manpower. at least a large proportion of its constituents. ISuppli believes that there are still challenges facing the India consumer electronics industry as the sector tries to realize its full potential. Companies not only have to set up the basic infrastructure in terms of office space. Also. Regular power supply is imperative for any consumer electronics product. which are touted as having the largest distribution network in the country. whereas the corresponding tariffs in other Asian countries are between 7 and 17 percent.1.000 of the around 40.6 Challenges and Opportunities The Challenges Heavy taxation in the country is one of the challenges for the players. Even LG and Samsung.000 retail outlets (for consumer durables) in the country.) have hindered the reach of the distribution network in India 4. Expansion of distribution reach: Infrastructural bottlenecks (roads. At its present structure the total tax incidence in India even now stands at around 25-30 per cent. Poor infrastructure is another reason that seems to have held back the industry. These include: 1. Low affordability level of consumer products among the rural masses 21 . About 65 per cent of Indian population that lives in its villages still remains relevant for some consumer durables companies.
rural consumers should be provided with easily payable consumer finance schemes and basic services. power availability. And looking ahead. these challenges are gradually being addressed. voltage etc. 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. should be converted to routine regular feature from the seasonal character. While the consumer durables market is facing a slowdown due to saturation in the urban market. rural consumers purchase their durables from the nearest towns. improving lifestyles. Purchase necessarily done only during the harvest. and rise in temperatures. iSuppli believes that India will continue to grow as an important market for the global consumer electronics industry. low running cost. festive and wedding seasons — April to June and October to November in North India and October to February in the South. growth in disposable income. Opportunities The rising rate of growth of GDP. Currently. The future of India's market is indeed bright. after sales services to suit the infrastructure and the existing amenities like electricity. leading to increased expenses due to transportation. believed to be months `good for buying’. 22 . 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.However.
CHAPTER-2 Company Profile 2.1 Introduction 23 .
The product mix includes LCD TVs.K & H. The company has launched state-of-the-art wall mountable DVD Players with auto-sliding door facility. After-sales-service being the mantra of the brand. These features are not available in any other brand in the country. 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. Laptops. Sunil Gupta.SNR Electronics Ltd. USB Playability with facility to mount DVD Players on the wall to give a unique look.P. Air-Conditioners. the company has been able to make a pan India presence through a strong network of more than 100 Distributors. Washing Machines and Microwave Ovens. Home Theatre Systems. TFT Screens. 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. MARKSON is the long cherished dream of Mr. the company is in the process of opening more than 100 service outlets across the country. Quality and affordable prices are the hallmark of Markson. Parwanoo & Baddi in U. a Himachal Pradesh based firm. The company has also lined up Mobile Phones. Colour TVs. Set-top Boxes and Desktop computers. well supported by sales and service professionals of the company. Markson products are produced in most modern and state-of-the-art plant at Haridwar. DVD Players. Markson brand was launched in India in technical collaboration with the UK based company for designing and technical support of their products. which will be launched very shortly. launched the “Markson” brand of consumer electronics in January 2008. The company’s products range has been widely accepted meeting the international 24 . The company started operation in early 2008 and in a short period of one year only.
in order to facilitate and expedite the distribution of Markson’s products in India. Laptops. Home theatre systems. The Markson Computer TFT Screens have unique features and inbuilt speakers and with the aid of external TV Tuner can substitute a LCD TV. We at Markson believe that high quality innovation isn’t a privilege anymore. TFT screen & Set-top boxes. has opened 13 branches at state level along with extensive warehousing facilities at the branches. The company. AirConditioners. DVD players. and it’s your right! 2. Mr. his emphasis and special focus has been on trading of electronic components and assemblies. Every single product made at Markson is an epitome of precision and impeccable quality. Microwave Ovens and Mobile Phone sets. 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. He also plans to put more home products into the market by the end of the year like Washing Machines. Mr. Markson Mr. The LCD TV’s are having unique features like USB Playback and MMS Playback. He also plans to venture into the Hospitality sector around the same time. Color TV. it’s an asset. He has held coveted positions in numerous electronics associations like. 2. Desktop computers. For the last 26 years.2 Vision To reinvent the market trend by bringing in state-of-the-art quality products to consumers as they have always wanted it. Sunil Gupta is the CMD of Markson in India. Gupta has a hands down experience in electronics trade.standards in quality and packaging. Gupta is the promoter of Markson brand in India with focus on manufacturing & marketing of electronic goods like LCD TV. Sunil Gupta CMD. BETA (Bhagirath Electronics Traders Association) and 25 .3 Key People Mr. 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.
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. 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.000 crore by 2012 with the introduction of several low cost products. the CEO of Markson. a council promoted by the Ministry of Information Technology. He has also been actively involved in construction of several dharamshalas for the needy. The initial investment made was Rs 100 crore. Delhi and has been actively engaged in work since then. IIT. Gupta has done a lot of social service for the needy. Markson Sunil Wadhwani. CEAMA. Wadhwani has spent considerable time in understanding export and import and their intricate procedures under the Foreign Trade Law. Mr. helping them in whatever possible way. solely for the procurement of a spectrum of electronic components and goods.Central Radio & Electronics Merchant Association.Tech. namely.4 Future Goals Markson targets revenue of Rs 400 crore by the end of this fiscal and will increase it to Rs 1. in Mechanical Engineering from the coveted technical institute. has an impressive experience of 35 years in the electronics industry in international trading coupled with domestic marketing and production related factory processes. 26 . He has been an active member of several important electronic associations in India. Mr. 2. Mr. Wadhwani has travelled extensively all over the world. Being a philanthropist to the core. and also for the export of quality electronic goods from India keeping in view the international standard. Mr. and local Customs Advisory Committee in Delhi and Central Excise Committee in Noida. Sunil Wadhwani CEO. He received his B. He also has a sound knowledge of Customs and Central Excise Procedures prescribed under the Customs Act and Central Excise Act. ELCINA. He has also been an active member of ESC.
The company. a member of Consumer Electronics and Appliances Manufacturer Association (CEAMA). The company plans to launch washing machine. air-conditioners. The company.000 dealers and distributors across the country. will increase it to Rs 20 crore in the near future. the company targets to capture five cent of the television market in the country by the end of this fiscal.With 2. 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.
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 .
The 29 . creating a twisted structure with each layer aligned at a slightly different angle to the ones on either side. Each shutter–filter pair forms a single sub-pixel. the layer in contact will align itself with the grooves. Liquid crystals encompass a wide range of (typically) rod-shaped polymers that naturally form into thin layers. the pneumatic liquid crystals. open and close to allow a metered amount of the white light through. When placed on a director. and are available in much larger sizes as well. Some of these. the bulk material taking on the director's alignment. a pixel. as opposed to the more random alignment of a normal liquid. Normally light cannot travel through a pair of polarizers arranged in this fashion.similar display size. also show an alignment effect between the layers. On the bottom and top of the shutter are polarizer plates set at (typically) right angles. The shade of color is controlled by changing the relative intensity of the light passing through the sub-pixels. Description Basic LCD Concepts: LCD televisions produce a colored image by selectively filtering a white light. the individual colors blend together to produce a single spot of color. although some displays use white or colored LEDs instead. and as manufacturing costs fell their eventual dominance of the television market was all but guaranteed. This forces the layers to align themselves in two directions. Millions of individual LCD shutters arranged in a grid. and the layers above will subsequently align themselves with the layers below. green or blue (RGB) portion of the light from the original white source. In the case of an LCD. Each shutter is paired with a colored filter to remove all but the red. LCD shutters consist of a stack of three primary elements. This combination of features made LCDs more practical than CRTs for many roles. which is essentially a material with microscopic groves in it. The sub-pixels are so small that when the display is viewed from even a short distance. this effect is utilized by using two directors arranged at right angles and placed close together with the liquid crystal between them. and the display would be black. 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. The light is typically provided by a series of cold cathode fluorescent lamps (CCFLs) at the back of the screen.
Since addressing a single shutter requires power to be supplied to an entire row and column. some of the field always leaks out into the surrounding shutters. the other has vertical stripes that form columns. When this happens. which increases the force to re-align themselves with the directors when the field is turned off. By supplying voltage to one row and one column. a series of electrodes is deposited on the plates on either side of the liquid crystal. and can no longer pass through the front polarizer. destroying the twisted structure. Several other variations and modifications have been used in order to improve performance in certain applications. an electrical voltage is applied across it from front to back. LCDs use electrodes made of a transparent conductor. Addressing sub-pixels: In order to address a single shutter on the display. As the light flows out of the rear polarizer. LCDs are normally transparent.polarizers also carry the directors to create the twisted structure aligned with the polarizers on either side. The light no longer changes polarization as it flows through the liquid crystal. Liquid crystals 30 . Vertical Alignment (VA. it will naturally follow the liquid crystal's twist. In order to improve switching time. To turn a shutter off. Since a metal electrode would be opaque. IPS displays are used primarily for computer monitors. but are more difficult to construct and have slightly slower response times. the cells are placed under pressure. One side has horizontal stripes that form rows. exiting the front of the liquid crystal having been rotated through the correct angle that allows it to pass through the front polarizer. By controlling the voltage applied across the crystal. In general. typically indium tin oxide. In-Plane Switching displays (IPS and S-IPS) offer wider viewing angles and better color reproduction. a field will be generated at the point where they cross. S-PVA and MVA) offer higher contrast ratios and good response times. the amount of remaining twist can be finely selected. This allows the transparency or opacity of the shutter to be accurately controlled. but suffer from color shifting when viewed from the side. the rod-shaped molecules align themselves with the electric field instead of the directors. all of these displays work in a similar fashion by controlling the polarization of the light source.
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. Using a multistep construction process. modern LCDs use an active matrix design. is added as a separate switch for the transistors. The 31 . the gate line. and then the director. The rows and columns are addressed as before. so pulse code modulation is used to accurately control the overall flow. the active matrix components and addressing electrodes. In order to attack these problems. is attached to a common ground. For smaller display sizes (under 30 inches). On the rear. but that voltage was too low to make the crystals realign with reasonable performance. This resulted in slow response times and led to easily visible "ghosting" on these displays on fast-moving images. any leaked field is too small to switch the surrounding transistors. the glass sheet. A new addressing line. typically the front. one set. slowly leaking this through the crystal to the common ground. since the capacitor can be filled or drained quickly. The front sheet is similar. replacing those with the patterned color filters. The capacitor is charged up until it holds the correct control voltage. When switched on. Not only does this allow for very accurate control over the shutters. The rear sheet starts with a polarizing film. but lacks the active matrix components. Another problem in early LCD systems was the voltages needed to set the shutters to a particular twist was very low. each shutter is paired with a thin-film transistor that switches on in response to widely separated voltage levels. but the transistors ensure that only the single shutter at the crossing point is addressed. Instead of powering both electrodes. both sheets can be produced on the same assembly line.are quite sensitive. Even scrolling text often rendered as an unreadable blur. and even small amounts of leaked field will cause some level of switching to occur. but the response time of the shutter is dramatically improved as well. a constant and relatively high amount of charge flows from the source line through the transistor and into an associated capacitor. and the switching speed was far too slow to use as a useful television display. The current is very fast and not suitable for fine control of the resulting store charge. the glass sheets can be replaced with plastic. say 0 and +5 volts. like a mouse cursor on a computer screen. This partial switching of the surrounding shutters blurs the resulting image.
To produce a complete television. Achieving even lighting over the front of an entire display remains a challenge. and aimed at the proper location on the screen using electromagnets. Removing the need for heavy glass faces allows LCDs to be much lighter than other technologies. displays up to 40 inches were produced but weighed several hundred pounds. The number of discarded panels has a strong effect on the price of the resulting television sets. and televisions larger than this had to turn to other technologies like rearprojection. the entire tube has to be held in vacuum. but for larger displays a single lamp is not bright enough and the rear surface is instead covered with a number of separate lamps. The atmospheric force on the front face of the tube grows with the area. The backlight for small sets can be provided by a single lamp using a diffuser or frosted mirror to spread out the light. This limits practical CRTs to sizes around 30 inches. Comparison Packaging: In a CRT the electron beam is produced by heating a metal filament. and bright and dark spots are not uncommon. If there are enough broken pixels. the screen has to be discarded. there is a small amount of vacuum in sets using CCFL backlights. Since the electrons are easily deflected by gas molecules. which requires ever-thicker glass. which is why the back of a CRT-based television is hot. The electrons are then accelerated and focused in an electron gun. The critical step in the manufacturing process is the deposition of the active matrix components. which renders those pixels on the screen "always on".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. the shutter assembly is combined with control electronics and backlight. and the major downward fall in pricing between 2006 and 2008 was due mostly to improved processes. which "boils" electrons off its surface. but this is arranged in cylinders which are naturally stronger than large flat plates. like other flat panel 32 . LCD panels. These have a relatively high failure rate. The majority of the power budget of a CRT goes into heating the filament. The lack of vacuum in an LCD television is one of its advantages.
allowed that to be dramatically improved and.displays. in theory. from 14 to 30". each sub-pixel's color filter removes the majority of what is left to leave only the desired color. even the best CRTs are much deeper than LCDs. This system examines the image to find areas that are darker. late in their evolution. with production yields being the primary constraint. because the vast majority of light that is being produced at the back of the screen is blocked before it reaches the viewer. to 42". In early sets from the 1950s the angle was often as small as 35 degrees off-axis. In spite of using highly efficient CCFLs. Since the CRT can only bend the electron beam through a critical angle while still maintaining focus. As yields increased. but improvements. This makes the technique suitable only for particular types of images. on average. For these reasons the backlighting system has to be extremely powerful. be built at any size. are also much thinner than CRTs. folded. the rear polarizer filters out over half of the original unpolarized light. like the 33 . most sets use several hundred watts of power. Nevertheless. which removes another portion. or at least wide horizontal bands of it. 3M suggests that. This allowed LCDs to compete directly with most in-home projection television sets. Modern LCD sets have attempted to address the power use through a process known as "dynamic lighting" (originally introduced for other reasons. so this change can only be used to control the brightness of the screen as a whole. Finally. Efficiency: LCDs are relatively inefficient in terms of power use per display size. the light has to be further absorbed in the shutters. Examining the image above. To start with. the electron gun has to be located some distance from the front face of the television. and in comparison to those technologies direct-view LCDs have a better image quality. you can see that a good portion of the screen area is covered by the cell structure around the shutters. common LCD screen sizes grew. LCDs can. After that. and reduces the backlighting in those areas. especially computer assisted convergence. and 65" sets are now widely available. more than would be required to light an entire house with the same technology. As a result. see below). then 52". to control the color and luminance of a pixel as a whole. LCD televisions end up with overall power usage similar to a CRT of the same size. only 8 to 10% of the light being generated at the back of the set reaches the viewer. CCFLs are long cylinders that run the length of the screen.
Image Quality: Early LCD sets were widely derided for their poor overall image quality. One potential improvement is to use micro prisms or dichromic mirrors to split the light into R. G and B. typically a 16 by 16 patch. which made them useless for television. as did the active matrix techniques. poor contrast ratio. It’s the speed at which an LCD panels crystals “twist” to block and allow light to pass. A successful system would improve efficiency by three times. A number of companies are actively researching a variety of approaches.credits at the end of a movie. This allows them to dynamically adjust brightness of much smaller areas. and 3M currently sells several products that route leaked light back toward the front of the screen. instead of absorbing the unwanted colors in a filter. LCD panels with response times around 20 ms were relatively common in computer roles. common in North America. most notably the ghosting on fast-moving images. massive investment in LCD production and manufacturing has addressed many of these concerns. By 2000. In spite of many predictions that other technologies would always beat LCDs. Another would be to direct the light that would normally fall on opaque elements back into the transparent portion of the shutters. A combination of improvements in materials technology since the 1970s greatly improved this. 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. For 60 frames per second video. 34 . which is suitable for a much wider set of images. Sets using LEDs are more distributed. Think of it in relation to shutter speed on a camera. Early LCD displays had response times on the order of hundreds of milliseconds. with each LED lighting only a small number of pixels. each pixel is lit for 17 ms before it has to be re-drawn (20 ms in Europe). 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. and muddy colors. This was still not fast enough for television use.
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. pioneered by NEC. 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. This change. and then recharged to the new value with every refresh. which typically requires fewer charging pulses. By holding the before and after values in computer memory. Moreover the capacitors are not drained completely. Even in a fully switched-off state. 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. which was isolated to the driver electronics and inexpensive to implement. and then dropping back to normal levels to fill it to the required voltage. improved response times by about two times. Named "Overdrive" by NEC. the vast majority of the screen's image does not change from frame to frame. Together. the overall performance would be increased. liquid crystals allow some light to leak 35 . NEC noticed that liquid crystals take some time to start moving into their new orientation. led to the first practical LCD televisions. the technique is now widely used on almost all LCDs. but was not originally required in the computer monitor role that bootstrapped the LCD industry. NEC's solution was to boost the voltage during the "spin up period" when the capacitor is initially being charged. But even this is not really fast enough because the pixel will still be switching while the frame is being displayed. instead. delivering the same total amount of power. but halve the pulse width.A major improvement. their existing charge level is either increased or decreased to match the new value. but stop rapidly. But in most cases. response times fell from 20 ms in 2000 to about 2 ms in the best modern displays. If the initial movement could be accelerated. the amount of time spent charging and discharging the capacitors was reduced. comparing them. A common method is to double the voltage. In older displays the active matrix capacitors were first drained.
because each LED typically lights only a small patch of the screen. However. Since the total amount of light reaching the viewer is a combination of the backlighting and shuttering. If a particular area of the screen is dark. While the LCD shutters are capable of producing about 1000:1 contrast ratio. This lack of contrast is most noticeable in darker scenes. a conventional set will have to set its shutters close to opaque to cut down the light. the shuttering can be reduced by half. This allows the dynamic backlighting to be used on a much wider variety of images. mentioned earlier). the LCD shutters have to be turned to almost full opacity. this technique cannot be used successfully. which is why many reviews of LCD TV's mention the "shadow detail". CCFLs are thin tubes that light up many rows (or columns) across the entire screen at once. However. and that light is spread out with diffusers. often as few as 256 pixels in a square area. when measured using the ANSI measurement. The CCFL must be driven with enough power to light the brightest area of the portion of the image in front of it. so if the image is light on one side and dark on the other. modern sets can use "dynamic backlighting" to improve the contrast ratio and shadow detail. This limits their contrast ratios to about 1600:1 on the best modern sets. if the backlighting is reduced by half in that area. by adding 30 levels of dynamic backlighting this is improved to 30. This is the main reason high-end sets offer dynamic lighting (as opposed to power savings.000:1. and the number of available shuttering levels in the sub-pixels doubles. limiting the number of discrete colors they can display. Displays using LEDs have an advantage. 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. allowing the contrast ratio across the screen to be dramatically improved. The accuracy and quality of the resulting colors are thus dependent on the backlighting source and its ability 36 .through the shutters. in order to display a color close to black. This leads to "posterizing" effects and bands of discrete colors that become visible in shadows. it should be noted that the area of the screen that can be dynamically adjusted is a function of the backlighting source.
The CCFLs used in early LCD televisions were not particularly white. plasma displays never saw the massive scaling of economies that were expected. fitting into the low-end space that plasmas could not fill. At the same time. plasma displays were the primary high-definition display technology. ideally a CRT should be perfectly circular in order to best contain its internal vacuum. and sets commonly quote a color space covering about 75% of the NTSC 1953 color gamut. Initially produced at smaller sizes. and it was widely believed that the move to highdefinition would push it from the market entirely. LCD technologies like Overdrive started to address their ability to work at television speeds. Modern backlighting has improved this. However. and remained expensive. High definition: High-Definition Television (or HDTV) is a digital television broadcasting system with higher resolution than traditional television systems (standard-definition TV. and from the mid-1990s the plasma display was the only real offering in the high resolution space. Contrary to early optimism. This situation changed rapidly. It was the slow standardization of high definition television that first produced a market for new television technologies. or SDTV). however. the much higher resolutions these new formats offered were lost at smaller screen sizes. especially at higher resolutions. was widely considered to be unable to scale into the same space. meant that older technologies like CRTs maintained a footprint in spite of their disadvantages. their high cost. In particular. Through the halting introduction of HDTV in the mid-1990s into the early 2000s. Meanwhile. Using white LEDs as the backlight improves this further. LCDs started to experience the economies of scale that plasmas 37 . and tended to be strongest in greens. LCD. both manufacturing and on the street. the wider 16:9 aspect ratio of the new material was difficult to build using CRTs.to evenly produce white light. and as the aspect ratio becomes more rectangular it becomes more difficult to make the tubes. so CRTs faced the twin problems of becoming larger and more rectangular at the same time. LCDs of the era were still not able to cope with fast-moving images.
pundits were surprised to find that LCDs had not only outsold plasma. More critically. encroaching on plasma's only stronghold. and even a price advantage for sets at the critical 42" size and larger. 42" sets were becoming common. Plasmas and LCDs reached price parity in 2007. By 2004. Market Takeover Although plasmas continued to hold an obvious picture quality edge over LCDs. so many people have been working in this area. and in 2007 the last remaining consumer rear-projection systems were gone. and shut down the final plant in March 2008." When the sales figures for the 2007 Christmas season were finally tallied. 32" models were widely available. This was in spite of the fact that plasmas continued to hold an image quality advantage. at which point the LCD's higher resolution was a winning point for many sales. but as the president of Chunghwa Picture Tubes noted after shutting down their plasma production line. which made up for the price difference. on this product. covering both the high-end market for large 38 . so many companies. LCD prices started falling rapidly in 2006 while their screen sizes were increasing at a similarly furious rate. albeit at a price premium. "Globally. By late 2006. and much larger prototypes were being demonstrated. but also outsold CRTs during the same period. several vendors were offering 42" LCDs. The same was true for CRTs. which lasted only a few months longer. By late 2007. Predictions that prices for LCDs would drop rapidly through 2007 led to a "wait and see" attitude in the market. It was the only technology that could scale both up and down in size. LCDs offer higher resolutions and true 1080p support. LCD's dominance in the television market accelerated rapidly. So they can improve so quickly. 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. while plasmas were stuck at 720p.failed to achieve. Plasma had overtaken rear-projection systems in 2005. and sales of all large-screen televisions stagnated while customers watched to see if this would happen. it was clear that LCDs were going to outsell plasmas during the critical Christmas sales season. Sony ended sales of their famous Trinitron in most markets in 2007. This evolution drove competing large-screen systems from the market almost overnight. so many investments.
Promotion: Informing potential customers of the availability of the product. Product: The right product to satisfy the needs of your target customer. its price and its place. They are the four P’s of marketing. There are four critical elements in marketing your products and business. 39 . and its extensive half-life may make it a potentionally harmful contributor to global warming. the vast majority of NF3 is broken down during the cleaning processes. another powerful greenhouse gas. as well as customers looking to replace their existing smaller CRT sets in the 14 to 30" range. Place: The right product offered at the right price. Environmental effects The production of LCD screens uses nitrogen trifluoride (NF3) as an etching fluid during the production of the thin-film components.screens in the 40 to 50" class. Furthermore. The right product at the right price available in the right place to be bought by customer.2 Marketing Mix Marketing your business is about how you position it to satisfy your market’s needs. 2. As NF3 was not in widespread use at the time. 4. 3. perfluorocarbon. A report in Geophysical Research Letters suggested that its effects were theoretically much greater than better-known sources of greenhouse gasses like carbon dioxide. 1." Critics of the report point out that it assumes that all of the NF3 produced would be released to the atmosphere. two earlier studies found that only 2% to 3% of the gas escapes destruction after its use. NF3 is a potent greenhouse gas. of which anywhere from 30% to 70% escapes to the atmosphere in typical use. In reality. Price: 3. it was not made part of the Kyoto Protocols and has been deemed "the missing greenhouse gas. the report failed to compare NF3's effects with what it replaced. Building across these wide scales quickly pushed the prices down across the board.
one must think of what one can offer as a bundle of goods and services. and distribution methods. skills and equipment. Start-up businesses are most successful when they concentrate their efforts on one product or one market. Thus. Other important aspects of product may include an appropriate product range. For example. options. like a restaurant or a car service center does. 40 . features. Think long term about the venture by planning for the ways one can deepen and broaden the product bundle. with the business offering related products. which means one does not have to acquire new suppliers. production processes.The marketing mix should be something one has to pay careful attention to because the success of your business depends on it. For instance. Product “Product” refers to the goods and services you offer to your customers. and customer service. Other future growth may allow offering the product to different customers. The knowledge of the target market and the competitors will allow offering a product that will appeal to customers and avoid costly mistakes. packaging. Other product attributes include quality. Product’s appearance. function. and support make up what the customer is actually buying. warranties. there are elements associated with the product that customers may be attracted to. design. Apart from the physical product itself. and brand name. Product bundle should meet the needs of a particular target market. services. Successful managers pay close attention to the needs their product bundles address for customers. such as the way it is packaged. Offering a whole range of products is most successful if the raw materials.” while many basic products must be positioned for price conscious consumers. and distribution methods are similar. one may be able to take advantage of opportunities to add value through processing. a luxury product should create just the right image for “customers who have everything. warranties. A different type of growth would be a diversification of products. Customer research is a key element in building an effective marketing mix. Later growth may occur in the same location or may be in different geographic regions. or a brand name.
This pricing structure is relatively simple to follow because you maintain you price relative to your competitors’ prices. healthfulness. customers will select vendors based on bids submitted simultaneously. • Skimming: Involves the introduction of a product at a high price for affluent consumers. gathering information will be more difficult. • Competitive: Based on prices charged by competing firms for competing products. In the next column are eight common pricing strategies. Selection of a pricing strategy should be based on the product. The result should neither be greedy nor timid. the competitive environment. Accurately assessing fixed and variable costs is an important part of this pricing method. A coupon is an example of a discounted price. and the other products you will offer. 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. Determining the product’s price can be tricky and even frightening. 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. one can follow a number of alternative pricing strategies. In some cases.Price “Price” refers to how much you charge for your product or service. As a manager. • Discount: Based on a reduction in the advertised price. However. you can direct observe your competitors’ prices and respond to any price changes. • Cost-plus: Adds a standard percentage of profit above the cost of producing a product. the price is decreased as the market becomes saturated. In those cases. Later. So they begin their business by creating an impression of bargain pricing. 41 . Going-rate pricing is common in markets where most firms have little or no control over the market price. and prestige. In other cases. The buyer’s perception depends on all aspects of the product. Many small business owners feel they must absolutely have the lowest price around. including non-price factors such as quality. customer demand. • Going-rate: A price charged that is the common or going-rate in the marketplace. • Value-based: Based on the buyer’s perception of value (rather than on your costs). while others are intuitive judgments.
• 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. $4. • Price differences among geographic areas: Pricing variance among geographic regions. such as maintaining an in-store display. for example. • 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 amount of money actually received may be complicated by other pricing aspects that will decrease (or increase) the actual amount of money received. Whatever the price may be. • Price differences among target customer groups: Pricing variance among target markets. • Trade discounts (also called “functional discounts”): Payments to distribution channel members for performing some function such as warehousing and shelf stocking. • Allowance: Price reductions given when a retailer agrees to undertake some promotional activity for you. • Price flexibility: Ability of salesperson or reseller to modify price. 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. • Psychological: Based on a price that looks better. • Credit terms: Policies that allow customers to pay for products at a later date.99 per pound instead of $5. The research needed to understand the pricing along the distribution path will be more than worth the time it takes.• Loss-leader: Based on selling at a price lower than the cost of production to attract customers to the store to buy other products. • Volume discounts and wholesale pricing: Price reductions given for large purchases. contribute to the image by communicating the perceived value of the 42 . After deciding the pricing strategy. The options will vary depending on how one chooses to sell your product. ultimately it must cover costs.00 per pound.
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.
place. Selecting an effective mix for your market will take time and effort. Salespeople can tailor communication to customers and are very important in building relationships. beef. Important components of a good public relations program include being a good neighbor. and promotion—should work together in your marketing mix. generic advertising is commonly found for milk. and providing open house days. Password-protected areas allow users to more intimately interact with you. decisions on one element will influence the choices available in others. Direct e-mail contact is possible if you have collected detailed customer information. and pork. Promotions might include free samples. News stories. Final Comment The four P’s—product. being involved in the community. coupons.• Electronic: Company Web sites provide useful information to interested consumers and clients. can be good sources of publicity. • Word of Mouth: Word of mouth depends on satisfied customers (or dissatisfied customers) telling their acquaintances about the effectiveness of your products. but rather a whole industry is advertised. but these will 46 . Your target audience may be more receptive to one method than another. Additional sources of promotion may be attending or participating in trade shows. incentives. Advertisements allow broad promotion of your products. often initiated through press releases. and networking socially at civic and business organizations. loyalty programs. Personal selling focuses on the role of a salesperson in your communication plans. Often. setting up displays at public events. For instance. Other programs might focus on educating customers through seminars or reaching them through trade shows. price. contests. prizes. Public relations (PR) usually focus on creating a favorable business image. and rebates. Sales promotions are special offerings designed to encourage purchases. it is costly. While personal selling is an important tool. So you should make efforts to target personal selling carefully. • Generic: Generic promotion occurs when no specific brand of product is promoted.
emotional." When you think IBM. Powerful brands can drive success in competitive and financial markets. the functions." Or "Yeh Dil Mange More" of Pepsi. you might think "Big Blue. rational. and symbol. In functionality and contextually they are proprietary visual. 3. term. you might think of an advertising campaign prompting "Just Do It. or the essence of brand has changed. the definition. When you think Nike. 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. Understanding Branding What is a brand? Brands were originally developed as labels of ownership: name.3 Branding Process The Branding Process can be explained by dividing it into two parts namely. Marketers engaged in branding seek to develop or align the expectations behind the brand's experience. you might think safety. and cultural image that you associate with a company or a product. creating the impression 47 . 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. today it is what they do for people that matters much more. Understanding Branding and Building Brand. When you think Volvo. how they define their aspiration and enable them to do more. 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. and indeed become the organization's most valuable assets. design.pay off as you satisfy customers and create a profitable business. Once you have a good marketing mix—the right product at the right price. how they reflect and engage them. The worksheets that follow will help you construct your marketing plans. Marketing is a part of your venture that will never end. However. With time.
Brand Management A powerful tool like a brand cannot be created in a vacuum or from thin air. Brand management is a philosophy and a total approach to managing companies. This art of creating and maintaining a brand is called brand management. All these discussed issues make branding a real art. promoting and communicating the image to the targeted audiences. A brand is therefore becomes one of the most valuable elements in an advertising theme.that a brand associated with a product or service has certain qualities or characteristics that make it special or unique. logos. what business the company is in. A good brand name gives a good first impression and evokes positive associations with the brand. It requires to follow certain principles and should have a developed procedure along with wellsupplemented research base. and as such includes much about changing minds. It is something that influences all of us in several ways and leaves a deepening impact on all of us. positioning. visuals and even the appeal selected revolves around the image and helps in integrating. which uses well-defined and established principles but can be refined as well as mastered by practice. what benefits it provides and why it is better than the competition. 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. whereby the personality usually a celebrity or image is "branded" into the consciousness of consumers. and brand personality. brand associations. This starts with the leaders of the company who define the brand and control its management. Brand management performed to its full extent means starting and ending the management of the whole company through the brand. It is a comprehensive effort and requires commitment. 48 . What makes up a brand identity? Brand identity includes brand names. support and contribution from everybody in the company. in one sentence. A positioning statement tells. A brand image may be developed by attributing a "personality" to or associating an "image" with a product or service. One of the key tasks of Brand Management is development of brand's image. The personality and theme. Brand management starts with understanding what 'brand' really means.
McDonalds television commercials are a series of one brand association after another. an animal (the Merrill Lynch bull) or an image (Hum Hai Na . Brand associations are the attributes that customers think of when they hear or see the brand name. Then. a children's party. consistent food quality. 49 . For example. However. Ronald McDonald. The brand can add significant value when it is well recognized and has positive associations in the mind of the consumer.One way to measure brand equity is to determine the price premium that a brand commands over a generic product. What is Brand Equity? Brand equity is an intangible asset that depends on associations made by the consumer. How do we determine our brand identity? Brand has been called the most powerful idea in the commercial world.Brand personality adds emotion. customers will think of you and buy from you when they are deciding on whether to buy from you or your competitor.ICICI). There are at least three perspectives from which to view brand equity: Financial . yet few companies consciously create a brand identity. in communications with employees and in every sales call and media interview. etc. if consumers are willing to pay Rs. expenses such as promotional costs must be taken into account when using this method to measure brand equity. a family entering the restaurant. Happy Meal. starting with the yellow arches. a character (the Nirma Girl or Amul Girl). pound that message home in every ad. 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. kids. 100 more for a branded product over the unbranded product. this premium provides important information about the value of the brand. in every news release. It is advised to senior executives. lots of fun and following with associations of Good Quality reasonably priced Burgers. 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. By consistent repetition of the most persuasive selling messages.
Brand extensions . Continuous fall in sales is the biggest indication of negative brand equity. Brand Elements Brand elements are the components or constituents of brand that are designed and put together to strengthen brand's image. Brand equity is an asset that can be sold or leased. Attitude strength is built by experience with a product. Some brands acquire a bad reputation that results in negative brand equity. Furthermore. brand equity is not always positive in value. The consumer's awareness and associations lead to perceived quality. 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. This may happen due to out-dated product.A successful brand can be used as a platform to launch related products. and allowing premium pricing. poor image or communication and better brand and image of competitor's product. Increases cash flow by increasing market share.A strong brand increases the consumer's attitude strength toward the product associated with the brand. However. The benefits of brand extensions are the leveraging of existing brand awareness thus reducing advertising expenditures. Strong brand equity provides the following benefits: • • • Facilitates a more predictable income stream (higher profitability). Consumer-base . and a lower risk from the perspective of the consumer. low quality of product. and eventually. reducing promotional costs. appropriate brand extensions can enhance the core brand. 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 . brand loyalty. inferred attributes.
packaging. the transferability of brand elements 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. slogan all should be catchy and flexible over time. the brand stands for. all should be protected. Brand Attributes Brand attributes are functional or emotional associations that are assigned to a brand by its customers and prospects. • The logo. The elements should have adaptability and should be able to change as per demand of time and consumers. packaging indentations etc. They should not look time beaten neither they should be changed frequently. There should be some consistency and they should be used for several years before they are changed. • Brand name. • 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. symbols. and they should communicate a unified message that depicts or supports the brand image. use of registered trademark. It should be simple. Brand attributes can be either negative or positive and can have varying degrees of relevance and importance to different customer segments. • In addition. They should represent what the company. symbol.• The recall value of Brand name should be high. The brand name should also connote what does product stands for. Examples of Brand Attributes: • • • • • • • Influential Innovative Inclusive Relevant Connecting Leadership Humane Is branding just for large companies? 51 . logo. Intellectual property protection is the fifth criteria. It should create a connection between the need of the consumer and the product. easy to pronounce and easy to understand.
then. fancy packaging or public relations will help you achieve your sales goals. In short. lifestyle and status.NO! It is one of the myths that only large business house or the player in an industry with excess competition needs a brand. The Importance of Branding 52 . a brand represents many more intangible aspects of a product or service: a collection of feelings and perceptions about quality. which will fetch them hefty returns in long time frame. Branding is something that every one needs and can be applied to any business. Therefore. You might infer. 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." the new philosophy could be" Nothing happens until somebody brands something. a brand is a noun. 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. If the old marketing mantra was." Nothing happens until somebody sells something." In its simplest form. a brand offers the customer a guarantee and then delivers on it. 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. that if you build a powerful brand. However. can use this process rather they should do it and they should consider branding expenditure as longterm investment or a capital investment. Retailers. service businesses. successful branding programs begin with superior products and services. manufacturers and businesses of all types and sizes. Brand Building Overview Branding is more than just a business buzzword. no amount of advertising dollars. It is the name attached to a product or service. upon close inspection. image. you will in turn be able to create a powerful marketing program. backed by excellent customer service that permeates an entire organization. organization or product.
For example." says Kosgrove. can be quantified. Creating a strong brand identity will build mind share — one of the strongest competitive advantages imaginable. if you owned the Marlboro Company and wanted to sell it. Technology will change. they can steal.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. unlike other abstract marketing notions. The question then becomes. "The value of that brand is huge compared to those actual physical assets. Eventually. Likewise. And not only will they follow your lead. customers will think of your business first when they think of your product category. Brand equity. Stone and Briggs Advertising in Madison. you think of the Kleenex brand. It is often the brand that a business owner has to sell in such cases. more likely than not. The reason behind these strong brandproduct associations is that these companies have built rock solid brand identities. For instance." says Howard Kosgrove. when your child wants a hamburger. when you think of tissues. but they may also be able to do a better job or sell the product or service at a lower price. "A brand is the one thing that you can own that nobody can take away from you. When Should You Brand? 53 . machines and staff. you can be certain that somebody will copy it before long. vice principal of marketing at Lindsay. patents. your patents will expire. As a result." That value is often called brand equity. But your brand can go on and live. "What competitive edge do I have to offer that cannot be copied by anyone else?" The answer? Your brand. You would then identify the cost of the factories." They are worth a small fraction of what you can sell that brand for. Your physical plant will wear out. trucks. Scotch is the brand that springs to mind. If you have a great idea. Wis." 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. you would begin to value the firm by looking at the assets tied to the Marlboro brand. or the worth of the brand. They can steal your trade secrets. And when you're looking for tape to wrap a present. he will often say he wants to go to McDonald's. It creates a lasting value above and beyond all the other elements of your business. "Everything else.
This is why many brands broaden and widen their appeal by creating tertiary brands or line extenders. restaurants and consumer goods. Even industrial markets. a DuPont fiber. which were one of the last frontiers. where cost is usually more of a loyalty building factor. not every product needs its own stand-alone brand. On the contrary. By definition. Primary brands typically garner a large percentage of a company's revenue potential and therefore need to 54 . has seen brand names creep in. are being forced to continue to brand heavily — perhaps even more strategically than they ever have in the past. secondary and tertiary. no one brand is going to appeal to all customers. 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.Because of the competitive nature of business today. All of the traditionally brand-conscious industries. are even beginning to see the importance of branding by tagging banking packages and even mutual funds with catchy names. Primary Brands . Although most industries and products or services can benefit from a brand. improbably one of the best knew industrial branded products. 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. For example. nearly all industries can benefit from a branded product. Financial services. including fashion. Tyvek.This is a company's core brand or umbrella brand.
theta of branding is made easier. 55 .be given priority and have a sufficient amount of advertising in order to root them firmly. and Deep Sweep is the secondary brand. Tertiary brands . they sometimes don't sport registered brand names. but they contribute to the company's overall image in some way. a toothbrush called the Crest Deep Sweep. or "flankers. Secondary Brands . products that may be roughly equivalent in terms of their features need to have a brand identity that will impact consumer choice. Therefore.a component of value. it will be easy to manipulate customer attitudes. More often. For example. Secondary brands don't need to have their own name. but just descriptors.These are often line extenders. And if it doesn't. Therefore. higher prices may signify to consumers higher quality. Since there are no pre-existing biases toward the product or service. it probably soon will. Crest is the core brand. but it fills a need within a niche market so the company continues to manufacture it under the unregistered name Household Trash Bags." for a core brand. for instance.These brands typically have insignificant revenue potentials or expectations. Take. a garbage bag manufacturer may make a generic-brand bag in addition to its flagship brand. the generic line is considered a tertiary brand for this company. 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. usually a modifier to the brand name will suffice and strengthen the core brand. What Goes Into a Brand? If your product or service is new or unique. Brand identity is comprised of: Pricing . Therefore. and lower prices may suggest decreased value. your product or service will have been in existence for a while and have direct competition. The generic line may bring in minimal revenue for the company.
obviously. Preference . Quality . but 56 .consumers may equate certain positive and negative consequences with use of your product or service. often represented by qualities the consumer relates to. Presence . which are directly related to presence.prominence in the paid and unpaid media. the higher your offering's awareness.loyalty is built through long-term branding and close consumer contact.top-of-mind awareness.availability.enduring public opinion of brand character. which is built over time and difficult to change once established. Like reputation.increased market share is a direct result of a successful branding campaign. Positioning is not created by the marketer or the individual brand itself.Distribution . In fact. Benefits . Positioning salience . these may be warranted or unwarranted. What's in a Name? A. image is difficult to change once established. Image .a predisposition to buy displayed by consumers who are establishing brand loyalty. higher quality will translate to more satisfied customers who come back again and again to purchase your offerings. limited distribution of a product or service may imply exclusivity to discerning consumers. Customer commitment . Awareness .differentiation from the competition. 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. Share of market .which impacts satisfaction. residual awareness and recognition. Kosgrove says that the brand is not created by the marketer at all. which is established by a combination of all elements of the brand. the better your sales results will be. products or services with a highprofile market presence will lead to brand recognition and increased sales. but by how others perceive it.perceptions of brand traits or prototypical buyers. Reputation .
for instance? Because we believe in the brand's "revolutionary" Pro-V formula that leaves hairs strong and healthy. "Positioning studies identify the audience according to their needs. As you begin to understand the relationship that your customers have with your brand. the greater the chances are that the prospect will buy that product. Beer and cola. create trust in your brand. expectations and wants. Several characteristics can work in a positioning campaign. you will be able to more efficiently meet their needs. Why do we believe Secret antiperspirant will keep women smelling sweet? Because "it's pH balanced for a woman. they create the strategic and tactical suggestions to encourage the customer to accept a particular positioning in his or her mind. is how customers ultimately decide which brands to buy and which they will discard. you need to identify the key attributes or benefits that represent the value of your product or service. Those drivers then come into developing products and services that best fit those audiences' needs and wants. products or services have some formula or patent that is "unique" from all the other brands out there. Many times. are heavily branded product categories: Consumers have formed a relationship with and will search out their preferred brands. Marketers don't create the positioning. such as: Relevance to a customer's lifestyle . no company has found much success building brand equity." says Dettore. For instance. To position your offering properly. they usually choose what is on sale or what is available on their local grocer's shelves. That will. "Positioning is everything. Why do we trust Pantene shampoo. on the other hand. 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 . or the connection that the prospect has to the brand identity. Relevance. bread and milk are not branded items. in turn." While marketers do not literally position brands. they can have a significant influence on how they are positioned. When customers want either one of those staple items.Benefits need to be backed with some sort of persuasive reason to believe the product's hype. and not a man.The more apparent the connection is between the brand and the prospect's daily activities." 57 . and despite companies' push to try and brand the two products. rather.rather by the customer. wants and desires through your brand.
how can I change them to be more accurate? Message of the brand Is appropriate . 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. but told you nothing about the product or service." The copy line helps reinforce that this brand is the genuine article for that category of products. products and services? If not. 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.The Best a Man Can Get" or "Choosy Moms Choose Jif. rather than helping." "Coke Is It" and "Always Coca-Cola. the brand? Product Is the genuine article . Ask yourself: Are my advertising messages in line with the image I'm trying to convey about my company.No matter how brilliant a strategy you have. and it seemed inappropriate for what is being sold. could they be hurting. 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. The message that you send needs to be appropriate to the product or service you are trying to brand. For instance. you need to be clear about the message.Have you ever seen a commercial on TV that seems to come from left field? It grabbed your attention.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 . Some examples of crystal clear campaigns include "Gillette ." 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. Even service companies can make claims to being the real deal. Coke tells you that "It's the Real Thing. For instance. Pace Picante sauce tells you that they are not the brand from New York City.Many successful companies build customer trust by claiming to be the real McCoy. Types of Prompts in a Campaign 58 .
A brand can evoke several different types of prompts. for instance.' Look at the computer industry. Be aware. "If you look at the most profitable companies in the country.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. When you narrow a product's focus." says Kosgrove. Another way to build the perception of high quality is to simply attach a higher price tag to your brand. they have a very high perception of quality. and it may be different than measured quality. That's why it makes sense to look at alternative positioning types before deciding on which one you will attach to your brand.Once you determine the way in which you can reach your market. you become a specialist rather than a generalist. For example. 59 . 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. and you will succeed in creating a powerful brand. 1. lies in the mind of the buyer." Quality. or be of "higher quality" than a generalist. the next thing to look at is how you are going to lure your customer to try your brand." say the best way to increase perception of quality is to narrow the company's focus. they explain. "Somebody can come in and say. that positioning prompts are not verifiable scientific hypotheses. or the perception of quality. but you have to get people to believe in it. Most people think that they know a high quality product from another. Al Reis and Laura Reis. things are not always as they seem. But PC manufacturers will say that the PC is better because more people believe in it. People say that Apple is a better product [than the PC]. and a specialist is perceived to know more. authors of "The 22 Immutable Laws of Branding. Build a powerful perception of quality. but all of these brands carry a perception of higher quality because of their higher prices. 'My product is better. but in reality. You can talk about how your product or service is better. That method is called the "positioning prompt" of the brand. and there is a great deal of interpretation and high degree of risk that is involved in choosing one positioning over the other. Quality positioning .
Believe it or not. brands that are considered a value are rising in popularity amongst consumers. have found a strong market. items that were considered to be a good "value" meant that they were inexpensive. For instance. 4. 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. that stigma has fallen by the wayside.Although at one time. which introduced a breakfast cereal that aims at undercutting brands like Kellogg's or Post.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. Mont blanc has a fatter pen than Cross. 60 . not solely by what they sell. Private supermarket labels. feature-orientated stances are often rendered useless if the competition comes out with a faster or more advanced model. and the positioning will be credible if you stick to the facts about the product. which was down on its luck in the overall computer marketplace. Unfortunately." Jeep has created a car and branded apparel for rugged individualists. 3. packaged good brands. The advantage is that the message is clear. started asking computer users to liberate themselves from the PC camp and" Think Different. Feature-driven prompts -. the product or service does need to have some perk or difference to justify the higher price. Value positioning -. Apple computer. experienced a backlash when their prices rose too quickly. Calloway clubs have a bigger head than Titleist. Rolex makes a heavier watch than Timex. but they don't necessarily improve performance. high price is a benefit to some customers. most of the other major airlines have followed Southwest's lead by rolling out valuepriced flights under new. Each of these characteristics gives the perception of quality. In fact. co-branded names. Of course. as well as smart companies like Quaker. These brands have achieved positioning based on who buys what they sell. In fact. especially cereals. 2. For instance. Sketchers equates sneakers with cool and that characteristic passes to all who wear them. It allows the affluent consumer to obtain psychological satisfaction from the public purchase and consumption of a high end product. Relational prompts -.More marketers rely on product/service features to differentiate their brands than any other method. Today.
5. "Building Brand Identity: A Strategy for Success in a Hostile Marketplace. Packaged good brands tend to be the most frequent users of problem/solution prompts. In the book. which means that emotional or psychological approaches can oftentimes be very effective as positioning prompts. Therefore. 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. Other campaigns that challenge consumers to be the judge have cropped up between car companies. are constantly going head-to-head to prove which one has the most power to lift stains. Warm and fuzzy positioning -. For example. even between search engines on the Web." I am Superman. positioning deals with how one brand is thought of compared to its obvious competitors. garbage bags." author Lynn Upshaw writes. asking friends and family to "Reach Out and Touch Someone. Detergents and cleansers also make good use of these prompts. Rivalry-based positioning -. Discover credit card. for one. frozen meals cut meal preparation time to minutes." 9. Problem/solution prompts -." Need proof? AT&T's commercials are often tearjerkers. problem/solution prompts show the consumer how a sticky situation can be relieved quickly and easily with the brand or service. And a new campaign from IBM has random people exclaiming.As the name implies. Aspiration positioning -. or a person they might like to be. The now defunct Joe Camel mascot for Camel cigarettes infuriated parents. 6. 8. As such. many marketers play on our feelings. 7. we are still docile and emotional animals. Laundry detergents. "How people feel about a brand is oftentimes need. you are buying the only real way to "Drive Safely. they usually make up for in directness and credibility.Underneath our capitalist driven needs to consume.Other brands base their entire positioning on the fact that they give back to the consumer." Volvo hints that through purchasing their Swedish import cars.These are positioning prompts that offer prospects a place they might like to go. or a state of mind they might like to achieve.By definition. Benefit-driven positioning -." because they use a new version of the Lotus Notes software program. the idea of a rivalry-based position might seem redundant but many campaigns take this approach. for instance tells customers that "It 61 .or desire based. What problem/solution campaigns lack in imagination.
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 . be it frequent flier miles. for example. you maybe in the business of: • • • • Information Speed Convenience Technology If you sell travel packages. Determining Which Position Will Work for Your Brand To determine which position will work best for your company. To accomplish this. your marketing team should be able to describe a precise customer benefit that can be addressed in some way by the brand. Discover was among the first major credit cards companies to provide its users with a financial incentive for using their card. If you sell computers. discounts on gas or store purchases. ask yourself what business you are really in. Now nearly all credit cards offer some type or reward. focus on relevant reality-based customer benefits. C.Pays to Discover. Similarly." Use the card and get money back. After completing the necessary research and reviewing the relevant examples of positioning. you may be in the business of: • • • • Tourism Recreation Entertainment Stress-reduction Next. determine what the benefits are for your products and services. The team members must be clear on what customer benefits are being offered and how they are based on real life needs and desires.
who is best known for unorthodox marketing antics like shooting an underwear- 63 ." says Kosgrove. In matters of branding. good or bad. and the beliefs and experiences similar to a personality make a brand rise to a new level. it's hard not to like someone with a good personality. to a large extent. the brand will probably not be the favorite of a conservative investment banker. 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. reinforce the purchase decision." writes Upshaw. It's hard. After all. for an entrepreneur to create a brand that is a 180-degree turn against what the founder is like. and help forge an emotional link that binds the buyer to the brand for years to come." One entrepreneur whose personality permeates every aspect of his brand is Nicholas Graham. According to Kosgrove. 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. "you are more willing to overlook flaws and search for strengths. he says. An attractive brand personality can pre-sell the prospect before the purchase. founder of Joe Boxer. In such cases. how will we overcome them? • • • • Building Brand Personality Brands that carry with them a true persona. Therefore. a personality helps to humanize an otherwise inanimate object or service so that a prospect's defenses are lowered. humorous line of boxer shorts and loungewear that the company produces bears the distinctive image of the zany Graham himself. if the founder is a high adventure sports enthusiast. The off-beat. "A brand is everything that your customers know about you. An entrepreneur or founder.• Are there extension opportunities for these branded products or services? If so. small-company brands usually take on the personality of the entrepreneur who owns them. Every contact they have with you helps to build that brand.
As strange as it may sound.laden rocket into space and holding an undergarments "fashion show" on a transatlantic flight on Virgin Airways. Many companies with branded products geared toward Generation X and Y use this tactic.Other brands like to show that the people who use the brands are people that you could be friends with. particularly when there are few product or service features that are different between competing brands. Provider-driven . Brands that lean heavily on the provider image include insurance companies and financial institutions. A brand's personality can offer the single most important reason why one brand will be chosen over another. a practical prerequisite for success in an increasingly individual-driven marketplace. packaged products often take on a personality that consumers can relate to. is much more real than the other aspects of the brand because it is the outstretched hand that touches the customer as an individual. However. The personality gives the consumer something to relate to that can be more vivid than the perceived positioning of the brand. the Pillsbury Doughboy's laugh reinforces that the product will make your family feel good. Although a strong identifiable personality is not imperative.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. or want to be like." show that the brand is trustworthy and their brands reflect the same attitude. The personality. products come to life to give consumers more than just a brand to trust. Personality is usually shown in three ways. Whether through a mascot or an animated figurine. Image of the product or service . these generations are also skeptical of marketers and are keenly aware of when a brand is targeting them. 64 . Even more important. For instance. but also a face. it can make it easier for customers and prospects alike to understand what the marketer has to offer. a brand with a distinctive personality presents the would-be buyer with something he or she can relate to as an individual. in some ways. Prudential's "The Rock" and Allstate's "You're in good hands. Image of the user . relate to.
before you jump into a co-branded relationship. On the Web. or what is better known as strategic relationships. Instead. A slew of credit card companies has-been teaming up with retailers to offer co-branded items such as the L. The larger company receives the added benefits from the smaller company's product. Co-branding works because it creates new excitement for the brands involved. 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. co-branding. For instance. particularly for small companies that oftentimes get overshadowed by larger partners. Tropicana and Chiquita have made numerous fruit juice concoctions by blending their respective specialty flavors. are rampant. one partner in every co-branding partnership will receive more attention than its counterpart. And Betty Crocker uses real Hershey's chocolate in their brownie mix. Besides content swaps. For instance. Therefore.L. but the smaller company's brand doesn't really receive much attention. No two brands have exactly the same impact on the consumer. co-branding is a way for businesses to extend their brand's identity and cut expenses by partnering with compatible products and services. ask yourself if the excitement that the deal will bring will build the brand or sabotage it. Sometimes a co-branding strategy isn't as advantageous as it may seem. However. And financial companies have even jumped on the bandwagon. their question is. "Does it have Intel inside?" In fact. Check that your potential partner is not only compatible with your product but also that it won't eclipse your own brand. Co-Branding Although it has become somewhat of a fad amongst companies. 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.Strengthening Your Core Brand A. Bean credit card. One brand teams with another to offer a product with an enhanced (or seemingly so) benefit. If that risk 65 . companies invite branded products and services to be sold from their sites in what are known as affiliate programs.
For example. 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. if a software company comes up with a new version of one of its programs. opportunity to remind customer of upcoming sales. and in what way they are relevant to the realities of the consumer's everyday life." writes Upshaw. B. "It's the marketing team's job to prioritize identity contacts and to judge how they might contribute to the brand's identity. For example: • The product's packaging can be reprinted so that bursts highlighting a "New" or "Improved" version of the program. nearly all of the brand identity contacts can be manipulated to increase emphasis on the new functions of the software. • • • • Brand Pep Boys Example Brand Identity Contract Follow-up phone call after servicing the car. 66 . As you can imagine. Store salespeople can wear pins alerting customers to ask them about the new software features. 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. more can be done than just change a copy strategy and run new advertising. Identity Contact Identity contact is the sum total of all information and experiences that a customer or prospect has with a brand.is accurately assessed and accepted by the junior partner and it's still a net gain for its brand identity. A press release can be generated about how programs need to keep pace with the demands of the workplace and provide proper functionality. method to check up on efficiency/courtesy of service department. then the partnership is sound. Contribution to Brand Identity Reminder that the auto maintenance shop cares about customer service.
has led the way in sponsoring events that their younger customers care about. "They say 'We are a different kind of car company. RM houses remind parents of McDonalds' commitment to the American family. Vans. they give coffee and doughnuts to the people when they come in. not slick.. we are going to sell the company's brand. 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." The result." Saturn said. 'We are not going to sell the car. Advertisements with athletes of Olympic or star stature. Brand associated with the best athletes in their sport. and the showroom itself is clean and friendly. revisable numbers send signal that MCI is on top of what's happening in prices. MCI Nike Identity contacts are important because they can set a tone for subsequent contacts with the company and the brand. Close-up of Nike logo on shoes of player in NBA championship or on Tiger Woods in PGA Gold Tours.'" says Kosgrove. Grassroots Grassroots marketing is a form of branding that has really hit its stride in the last few years. In addition to its humanitarian value.McDonald's Ronald McDonald Houses for the families of seriously ill children. 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. reinforcement of superior quality or product and prestige of being worn by winners. When a customer enters the showroom. 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. a shoe company in Santa Fe Springs. and we are going to prove it. says Kosgrove. Electronic billboard tabulating how much MCI customers have saved by using its services. C. And when there is a service problem.' They do that by making sure that every point of contact with a customer is going to be completely different. The sneaker company has become synonymous 67 . reminder of savings positioned. they see people in matching polo shirts rather than suits. instead of being crabby with them and making them wait. Calif. Brand-name registration in compelling way.
rock climbers and BMX bikers. Last summer's roving tour featured punk and "ska" bands as well as pro demos from skateboarders. tune-up students' bicycles on a local college campus to get them ready for the back-and-forth trips from the dorms to classes. R. for instance. In past years." Smaller companies. an alternative music festival that combines other types of cutting-edge live entertainment. in-line skaters. "If you have a retail business in a neighborhood. 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. 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. East Providence Cycle. Nantucket Nectars has also garnered fame by using grassroots promotion strategies. "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.with alternative sports by hosting events in the skateboarding. a bike shop in East Providence. events where shoes are a prerequisite. The juice company sponsors two Winnebagos to roam the countryside and entice consumers to become "juice guys. Word of Mouth Whether it is planned or not.I. the company has done well stepping into other areas of their customers' lifestyles.." 68 . The business also sets up makeshift service shops off area bike paths on sunny summer days. your identity problems may be over. BMX biking and snow boarding categories." says Kosgrove. and how can I get involved in those things?" D. Besides just sporting events. "When your company is lucky enough to be the beneficiary of word of mouth. and your capacity problems may just be beginning. Vans sponsors the very popular alternative Warped Tour." writes Upshaw. "You want to look at what your customers care about. Ask yourself: What do my customers care about. the tour has also featured the Mega-Pump Climbing Wall Competition and Spike and Mike's Festival of Animation. word of mouth is well worth the effort it takes to generate it. can easily sponsor community events.
be it sun-brewed. ginsengfortified. People are going to tell other people. Sergeant Dave Hack. After the onslaught of the copycat brands. which sells genuine military jackets and gear. Ed Koch. It also doesn't hurt to have something extremely unique." While it is difficult to intentionally generate a positive word of mouth branding strategy. "It snowballs. 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. The founder. Snapple also hit it big when kids started passing the word about the delicious iced tea beverage. For instance. the ex-Mayor of New York City. For instance." For Web-based brands. the company has relied on word of mouth to promote its brand and Web site during its four-year history. the toy sensation of Christmas '98 that sent parents into shopping frenzies. word of mouth can work extremely well. and Tickle Me Elmo. 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 has been able to generate positive promotion on the Web. going out to ask people who wrote to the company if their passion for Snapple was really true. The company capitalized on that by highlighting the word of mouth phenomena in its television ads. says that by staying true to its mission. has never posted an advertisement online. or some other herbal concoction. the company US Wings. Competitors are also quick to duplicate the product or service being hyped. the company's earnings slid. Creating an Online Identity 69 . In one memorable ad." he says. 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.Some of the better known beneficiaries of word of mouth phenomena: Furby. and you end up with something that is very positive. be it the product or the promotional vehicle. spring-filtered. Instead. "We are selling something with quality and value. it can be done if you have the right product and the right strategy. the company needs to convert the brand into something that will sustain the hype. the hot toy in 1997.7 million. Snapple was smart to sell its brand to the Quaker Company in 1994 for $1. after Snapple's success.
there are four times as many online shoppers as purchasers." Still.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. 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. How much effort should they spend on e-branding initiatives — that is." he says.8 percent each Autos: Yahoo! ." Research shows the brand names of seven Internet companies are already recognized by more than 50 million U.S. giving them' mega-brand' status. "The Internet helps promote companies' products in a very efficient manner and especially to all audiences in all parts of the world.30 percent Computer Hardware: Dell . a debate rages in the business departments of many Internet companies over the importance of branding.20 percent Clothing: The Gap . only a percentage of them are actually buying online.Online companies are putting branding to work with remarkable success. Travelocity . "Whereas if you are fresh and new.12 percent Travel: AOL. Yahoo!." says Dettore. 10. 70 . "Typical advertising media hit only a segmented or regional strategy. "Any long established brand has had bad experiences. which offer tangible returns? Although people are shopping online.com .56 percent Music: CDNOW . so the Internet is one of the most cost effective ways to brand. According to a survey from Intelliquest. and there are mistakes that have been made in the past. building up an online brand? Wouldn't those resources be better spent promoting e-commerce efforts. According to Intelliquest. adults. you have a clean slate.24 percent Computer Software: Microsoft .000 Internet users associated the following Net names with the following products: • • • • • • • Books: Amazon.
"The World's Largest Bookstore." says Lynch. Once the information is entered into the database. a company can brand itself as more than just a dog food supplier." says Kosgrove. says Kosgrove." says Lynch. The Web allows companies to take on new edge or benefit that a company would not be able to use in the real world. answers are compressed.In short. 71 . selection and delivery are their brand. but nutritional care for your animal. but they can promise to ship you the book of your choice practically overnight. Selection and speed -. The site can walk visitors through a personalized analysis based on the animal's needs and activity level. "Then it isn't just a bag of dog food. That tactic is certainly true with large online stores such as Amazon.Online brands don't usually tout themselves as cheap. Prices are not as important. John Lynch. but rather as an animal nutrition expert." Some tactics to build an online brand include: 1. e-branding is very important and must be taken into consideration. 2. "Sites need to be branded so that the consumer can have confidence in the site and is willing to make a purchase there. however. friendly environment that Borders can. "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. "Then it isn't just a bag of dog food. Customization -. Online. and they will have a large selection. "Their brand is: you want it. but nutritional care for your animal. There is no way that a pet food company would be able to gain that brand identity in the real world.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." The company can't offer the warm. data is cross referenced. we got it and we will get it to you quick. The main benefit is that they are going to be fast. from Synnetry. and information telling you which formula of food your pet should be consuming is spit out. says Lynch. an online marketing firm says. service is not as important [at the moment]. Really. a pet food brand on the store shelf does not have many choices about the positioning of its product. For instance.
Customers. chat group. Unlike other media. Using Interactivity -. Luckily.Community is the other buzz online. they are allowed to create a better position for themselves than they could if they were going through regular distribution channels. Build a community -. the Web is the perfect place to do just that. "What pet store owner is going to carry that message for the pet food manufacturer to the pet food buyer?" asks Lynch. auction. For instance. which leads to many opportunities for community interaction. "Through the Internet. 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. 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. or join mailing lists or user groups 72 . online customers can interact with the brand and its identity in a way that no other medium can offer. prospects and critics of the brand have strong opinions about what they like and don't like. For a community to be successful. people seem to never tire about the wonders of the Apple computer." 3.Creating services that other Web companies don't have will ensure that your brand is stronger than the rest. Ways to increase contact and keep your brand in front of people include creating: • • • • • Newsletters Targeted emails Message boards Chat Advice columns 4.There is no way that a pet food company would be able to gain that brand identity in the real world. The company's brand is the focus of debates and discourses in the computer world. then it has a powerful ally.
it would be good to form a relationship with a store that sells shirts.com will also send a heads-up to subscribers telling them about movie promotions that Big Star is running exclusively for Women. 5. Both shipping companies invite companies to use their software to calculate shipping weights and secure deliveries to the purchaser's home. personalize user experience through interactivity with other members and develop opportunities for common leadership/ownership. "We advertise in their entertainment areas. "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. strategic partnerships between Web brands can help strengthen identity. Give members something to care about by establishing a clear economic or social benefit." Another way that E-retailers can create partnerships is by finding larger content sites to sell their wares." Besides that. enhance visibility and increase revenues for companies. says Williams. and we are often a featured vendor there. Big Star looks for companies that have an active relationship with their members and are willing to get Big Star involved. One of the best ways that an e-commerce site can partner with other sites is to embed themselves within another company's site. Anyone who buys a shirt is going to want to buy a tie." says Kosgrove. Form Strategic Alliances -. Women. It's important to find partners who are going to help promote our site. they are going to feel good about being on your site. chances are that you are also giving business to UPS or Federal Express. For instance. One way that synergistic sites can partner is by swapping banner ads. Encourage early and steady contributors. each time you purchase a package from an e-retailer.com members. "If someone comes to your site and sees you link with other people that they respect. Women.Like co-branding. We also have fitness videos in their health and wellness area and children's videos in their family areas. 73 .com is one site that fit the bill. Good alliances on the Web allow traffic to flow between sites that have a common interest. Williams says that when shopping for strategic partners. "Synergistic sites can swap banner ads usually without any fee being paid." says Lynch.
or were not accessible by email." says Kosgrove. So be sure you do your homework about what goes into a strong Web site. Despite that logic. It may look as if you are on Joe's Computer Shack Web site." says Lynch. 'I thought you were someone else but now I know who you really are'. 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. "You are not spending all the promotion money.Since competition is only a few clicks away. 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. people are going to say. partners with smaller computer dealers online to let customers configure their own computers. This is of the utmost importance when you are building a new brand or bringing a new brand to the online arena. but your Web sight is impossible to navigate and doesn't have an email response or is just kind of clunky. Dedication to Service . in terms of traffic and selling.Dell Computer Corp. the standard for customer support must be higher for the Web than it is in the off-line world. If your customer service skills aren't up to par. if applicable Quick server response 7. 74 . are the ones that you don't even know that you are going to. never replied.Online customers have little opportunity to see your brand's dedication to service. 6. "The best sites in the world. 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. but actually Dell has lent Joe software so customers can customize their PC. however. it's likely that a customer won't come back to interact with your brand or your site. 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. Building credibility -. "If your other communications look warm and friendly and you brand yourself as serviceoriented.
end-all of customer service. This definition clearly brings out that it is not just the buying of goods/services that receives attention in consumer behaviour but. extensive consumer research studies are being conducted. Companies that want to attach a sense of dedication to their brand should think about having a call center. While email is the primary communication tool. These researches try to find out: 75 . and then the post purchase behaviour which is also very important."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." says Ken Allard. the process starts much before the goods have been acquired or bought. because it gives a clue to the marketers whether his product has been a success or not. This leads to internal and external research. Then follows a process of decision-making for purchase and using the goods. 3. Yet companies that delay responses to user questions instantly lose a significant degree of credibility and user loyalty. group director of Jupiter's Site Operation Strategies. evaluating. and not responding perpetuates the consumer notion that using the Web site is not a reliable method of doing business with that company. using and disposing of goods and services.4 Consumer Decision Process Consumer behaviour can be defined as the decision-making process and physical activity involved in acquiring. support staff or other communication tools that will help strengthen the relationship between your brand and customer. "Answering thousands of questions per month is an enormous challenge for sites offering complex products and services." 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. especially if they never had a traditional call center. it is not the be-all. To understand the likes and dislikes of the consumer. which leads to the finding of alternatives between products that can be acquired with their relative advantages and disadvantages. A process of buying starts in the minds of the consumer.
values. the involvement of the buyer and the risk that is involved in deciding the product/service. 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. The figures show the consumer life style in the centre of the circle. The consumer and his life style are influenced by a number of factors shown all around the consumer. social status. reference groups. These are culture. multidimensional process. demographic factors. Fig. A simplified framework for studying consumer behaviour The process of decision-making varies with the value of the product. 76 . dynamic. subculture.
First of all. The constant use of the product leads to the satisfaction or dissatisfaction of the consumer. personality. For this. offers the best solution to the problem. and can take care of the problem suitably and adequately. All these factors lead to the formation of attitudes and needs of the consumer. is important for repeat purchase. This may be the problem of creating a cool atmosphere in your home. by an air-conditioner or. by a water-cooler. perception and learning. Sales are important and sales are likely to occur if the initial consumer analysis was correct and matches the consumer decision process. The marketing strategy is successful if consumers can see a need which a company’s product can solve and. Position the product according to the customers likes and dislikes. The decision-making process consists of a series of steps which the consumer undergoes. information search is carried out. The figure below gives an idea of the above discussion. Thereafter the purchase is made and the product is used by the consumer. For a successful strategy. rather than looking for new ones. Consumer is also influenced by the marketing activities and efforts of the marketer.household and also the internal make up of the consumer. or to the rejection of the product. the decision is made to solve a problem of any kind. Satisfaction of the consumer. after the sales have been affected. to find how the cool atmosphere can be provided. It is more profitable to retain existing customers. The brand which matches the desired image of a target market sells well. the marketer must lay emphasis on the product/brand image in the consumer’s mind. which leads to repeat purchases. This leads to the evaluation of alternatives and a cost benefit-analysis is made to decide which product and brand image will be suitable. which are consumer’s emotions. 77 . e. motives of buying.g.
Creating Satisfied Customers 78 . Decision Process Fig.Fig.
CHAPTER-4 Research Report TITLE: 79 .
Without a proper wellorganized research plan. Therefore. 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. To know the customers view towards LCD TV of different brands. RESEARCH METHODOLOGY: Research methodology is considered as the nerve of the project. OBJECTIVES OF THE PROJECT: • • • • To analyze the LCD TV Market of North Delhi. it is impossible to complete the project and reach to any conclusion. The project was based on the survey plan. research methodology is the way to systematically solve the research problem. which work as a base for drawing conclusion and getting result. 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. In the present Research data has been collected from 50 dealers.To study the “Advent of LCD TVs and their future prospects in India”. To formulate the marketing strategy for increasing the sales of LCD TV in the market. SAMPLE SIZE: 80 . 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. 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.
The dealers may be biased. Time was the major constraint. SAMPLING METHOD: Percentage Method. METHOD OF DATA COLLECTION: Questionnaire Method has been used.50 dealers. SAMPLING TECHNIQUE: Convenient Sampling Method. LIMITATIONS OF STUDY • • • • The respondents were limited and cannot be treated as the whole population. 81 . SOURCE OF INFORMATION: Primary Data is used. SAMPLING PROCEDURE: Open and Close Ended Questionnaire are used. The accuracy of indications given by the respondents may not be consider adequate.
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 .
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. 2.
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. 3.50% 84 .20% Share of Different size of LCD TV 26 inches 33% 32 inches 30.30% 40/42 inches 5. Percentage Share of Different sizes of LCD TVs in the market: Size 19/20 inches Percentage 31.
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.
5. 20 of the total dealers feel that customers buy a product keeping in mind some particular brand.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 .
6.80% 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.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% 87 .
15362 26 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. 14042 22 inches Rs. Most common size purchased by Upper Income Group = 32 inches. 8. 23274 88 . Most common size purchased by Middle Income Group = 26 inches. 7.Interpretation: The middle income group is the major buyer of LCD TVs in North Delhi.
23542 Rs. 19700 42 inches Rs. 27450 Rs. 22529 Rs. 34500 Rs. 12063 Rs. 54300 Rs. 14200 32 inches Rs. 55785 Rs. 28233 Rs. 30562 Rs. 13910 Rs. 29779 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. 60100 Rs 13900 Rs. 33131 Rs. 22340 Rs. 33712 Rs. 17800 Rs. 28320 Rs. 60426 Rs. 22000 Rs. 54990 89 . 29930 Rs. 22600 Rs. 15120 Rs. 14200 Rs. 13016 Rs. 20500 Rs. 53800 Rs. 24700 40 inches Rs. 57617 Rs. 36460 Rs. 14943 Rs. 29500 Rs. 12990 Rs. 9990 Rs. 33600 Rs.
Interpretation: Hyundai LCD TV is having the least price in the 19 inches range. Except Haier all other Brands have almost equal price for a 20 inch LCD TV. 91 . Only two companies are manufacturing 22 inches LCD TVs and LG’s LCD TV is cheaper in comparison with Samsung’s LCD TV.
Interpretation: The price range offered by Markson is least in case of a 26 inches LCD TV. 92 .
93 .Interpretation: Markson LCD TV is the cheapest in comparison with other LCD TV brands in 32 inches segment.
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
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.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 10.5 ms 130W 30W(RMS) 500cd/m2 No No No Markson HD ready 1 HDMI --8-bit Yes 10.000:1 16 ms 150W 30W(RMS) 500cd/m2 No No No Haier HD ready 3 HDMI ---Yes 15.000:1 6.000:1 8 ms 160W 20W(RMS) 450cd/m2 No No No Toshiba HD ready 2 HDMI 100 Hz Real Colour Algorithm 10-bit No 4. 97 .8 Billion Colours 8-bit No 33.000:1 8.500:1 8ms 140W 20W(RMS) 500cd/m2 No No No Philips HD ready 2 HDMI 100 Hz 29.
CHAPTER-6 Observations and Findings 98 .
Brand Loyalty plays a vital role among Indian customers while buying the LCD TV. HDMI ports. Image clarity is the major reason why people go for LCD TV instead of a CRT TV. Samsung is offering very good features at a very reasonable rate rite now. 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. Samsung has made a good name in case of sales of CRT TVs as well. Keeping there room size in mind. USB playback. 99 . 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. Price reduction and awareness campaigns can help a company to increase the demand of LCD TVs in the market. 26 inch LCD TV is most preferred by the Indian customers. Bluetooth connectivity and hard drive are the secondary features which the customers want to have in the LCD TV.Observations and Findings • • • • • • • • • • • • The market share of different LCD TVs indicate that Samsung is emerging as a great Brand in the Indian market. Markson is offering its LCD TVs at a very cheap rate in comparison with all other brands available in the market.
CHAPTER-7 Conclusion and Strategy 100 .
101 .000:1.1 Conclusion This project helped me tremendously in knowing how marketing activities are carried out in a real situation. Special additions on profits earned by distributors can be provided by the company to increase the sales of LCD TVs. Picture processing needs to be increased to 10-bit processing. I was able to understand only the theoretical work but now I have the practical experience about the marketing activities. 1. We need to have more distributors in North Delhi for LCD TVs. 6. 3. Launch 32 inches and 42 inches LCD TV with high resolution and Full HD specification. Response time needs to be decreased to 4-6 ms. Motion Flow and colour gamut specifications need to be displayed. The prospects of LCD TV market are quite bright in the near future. Increase the contrast ratio to about 35. The distributors need to be trained on how to market our LCD TVs. The following points need to be considered while deciding on the distribution network: 1. 5. 2. Increase its HDMI interface ports to two or three in number. Bluetooth. The proper selection of the marketing mix. 4. 3. In classroom lectures. Our old distributors do not have Markson LCD TV in their show rooms to sell. 7. FM radio and inbuilt Hard Drive option can also be added. And a proper marketing strategy can help a company to take the maximum advantage of this emerging trend. Branding strategy and study of Consumer Behaviour can take a company to the new heights. 7.7.2 Proposed Marketing Strategy The following changes in the product features can help Markson to improve its LCD TV sale in the market. 2.
No need to have actor/actress as a brand ambassador. 3. Select one or two models for these ad banners and pamphlets so as to target Young India. These types of colours hit the customers psychologically. I think that a 22 inches LCD TV can cater for both the income groups well. 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. Use fundamental colours like Black. Place the company ad banners at various metro stations and also in the metros as well. Now coming down to promoting. all of us know that advertising plays a vital role in creating awareness among the customers about the product. 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.4. So. 5. A combo offer or a discount offer for old colour TV can be of great help to increase the sale of LCD TV. So. Red and Blue while preparing the pamphlets and brochure. 2. I suggest that the company should launch a 22 inches LCD TV in market. 102 . 4. So I think that following points should be considered for advertising LCD TVs: 1. 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. Try to sponsor events such as annual functions of the companies and large gatherings.
So it is very important to develop the Brand Image in the market. The two suggested Logos by me are as follows: Observe carefully: The person is enjoying the music. I think that it is very difficult for Indian minds to adopt any product which is associated with British People. 103 . Brand Logo: I think that we need to change our Brand Logo from British Flag to something else. It can be done in the following way: 1. I also analyzed that Brand Loyalty is the main criteria among customers for choosing a particular brand of LCD TV.
B) Making life pleasant and enjoyable. 4. A Free Toll number also gives an indication of the brand. Two such slogans which can help the company are as follows: A) Selling satisfaction not products. This age group holds the maximum buying capacity. 104 . so choose a brand ambassador who represents the Image of Young India.Metallic M represents that our effect is everlasting. 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. Brand Slogan: Brand Slogan tells that what the company is aiming for. It gives a signal of good infrastructure of the company. 3. 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. C) Bringing colours of life together. It should be such that the customer feels that he is a part of the process.
CHAPTER-8 BIBLOGRAPHY 105 .
scribd.cci.en.emsnow.com www. http://www.markson.com www.kioskea.indianmba.htm www.rncos.in/pdf/surveys_reports/consumer-durables-sector.net http://www.in 106 .References: Marketing Management by Philip Kotler.wikipedia.com www.pdf www.com/npps/story.cfm?id=27593 www.com/Report/CP13_toc.
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