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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.
on the back of rapid economic growth. 4 . Keeping the above fact in mind. has made the country’s consumer electronics industry highly dynamic. 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. microwave and washing machines have low penetration in the country. like refrigerators. such as retail boom. Each of the questions was designed to satisfy at least one of the secondary objectives of the research. 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. But still. The survey was conducted by me by visiting 50 dealers of consumer electronics in North Delhi region.EXECUTIVE SUMMARY India has an increasingly affluent middle class population that. representing vast room for future growth. The exploratory research was carried out with 50 respondents with a set of 20 open and close ended questions. The industry has been witnessing significant growth in recent years due to several factors. The exploratory findings helped me in determining the key factors which needed to be further explored for making the marketing strategy for my company. 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. the consumer electronics goods. This is attracting many foreign majors to the country.
1 3.6 2 2.2 1.2 2.4 1.5 1.2 3.3 2.3 1.1 1.No 1.4 4 5 6 7 7.1 2.2 8 9 Topic Consumer Electronics Industry Worldwide Consumer Electronics Industry Indian Consumer Electronics Industry Trends in Indian Consumer Electronics Industry Competition Overview Policy and Initiatives Challenges and Opportunities Company Profile Introduction Vision Key People Future Goals Essential Theory Liquid Crystal Display Television Marketing Mix Branding Process Consumer Decision Process Research Report Data Analysis and Interpretation Observations and Findings Conclusion and Strategy Conclusion Proposed Marketing Strategy Bibliography Annexure Page No 06 07 09 13 15 17 21 23 24 25 25 26 28 29 39 47 75 79 82 98 100 101 101 105 107 5 .1 7.4 3 3.3 3.CONTENTS Chapter No 1 S.
the consumer electronics industry is in the midst of a new wave of change. products and markets. of technologies. video and information technology is a major reason.1 CONSUMER ELECTRONICS INDUSTRY 1. The convergence of digital-based audio.1 Worldwide Consumer Electronics Industry The consumer electronics industry is a global business. In recent years. These changes began nearly two decades ago and have resulted in an avalanche of state of the art electronic devices in the 6 . Consumer electronics appliances such as digital televisions. It is ushering in a dawn of convergence. portable media players and educational toys are in a state of constant flux.CHAPTER . witnessing a phenomenal growth.
consumer confidence at lows and consumer electronics companies suffering. anytime will continue to drive innovation and CE sales. HDTV’s with VGA connections and SD/MMC card slots. personal media players.5 percent and 9. Mobile phone sales grew by 13 percent in 2008 and by 15. the CEA forecast. While sales grew 13. Global consumer electronic sales are expected to top $724 billion this year.6 percent in 2009 to 232 million units. “Liquid crystal displays will grow slower in 2009 but will still achieve double digit unit and 7 . Digitalization.7 percent of total revenue last year but sales are expected to slow in 2009. It paved the way for digital devices such as camcorders. from mobile phones to televisions to computers. The demand for a multitude of portable. still camera. The computer industry has also benefited.2 billion units. delivering new and exciting entertainment products that have changed the way we live. computer monitor and LCD TV. incorporating both digital visual and digital MP3 capabilities. The slowdown in 2009 is expected to affect products virtually across the board.1 percent growth rates of the previous two years. Still with the economy in a downturn. Digitalization transformed the consumer electronics sector. Mobile phones accounted for 26. growing by just 2. in-home or in-car consumer electronic items with multiple functions has increased tremendously. down from the 10. miniaturization and mobility are the key elements for modern consumer electronic products. making its way into the family living room.7% to $694 billion in 2008.market. Miniaturization also accelerates the growth of the consumer electronics industry. The CEA said that although mobile phone growth was expected to slow "the macro trend of work. according to the Consumer Electronics Association. play and communicate anywhere." Television sales are expected to grow by 2. this year’s growth will only be 4. DVD player/recorder. any growth is sure to be welcome.1 percent this year over last year to 1. It has also witnessed the emergence of mobile telecommunications technology.3%.4 percent in 2007. Microsoft-based Media Centre PCs have pushed the two industries even closer together than before.
the CEA said. the trade association said to expect products that were environmentally friendly in terms of the materials used.2 percent over 2008 but still a significant drop from the 17.4 percent in units and 1. energy efficiency and recycling potential." 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. with North America accounting for the largest percentage of Blu-ray sales followed by Western Europe and Japan." the CEA said. 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. but by fluctuations in the industry's business models. Consumer electronics companies producing computers. Fundamentally. the CEA said. "Laptop PCs are expected to continue to generate double digit increases in units and revenue in 2009. "Unit sales of portable navigation grew 55 percent in 2008 and are expected to grow another 22 percent in 2009. packaging. The CEA said MP3/digital media players were expected to generate "strong sales" in 2009 along with portable navigation GPS units.8 percent growth of last year. televisions." the CEA said.revenue growth worldwide.It said the game console market is expected to grow by 5. Blu-ray DVD sales were expected to nearly double in both unit sales and revenue in 2009.1 percent in revenue in 2009. The CEA said emerging powers China. Companies that are capable of change and those that develop branding will be most successful. "Desktops will experience declines in both units and revenue. "Plasma displays are forecast to achieve positive unit growth and negative revenue growth.7 percent. It said that in 2005. with growth forecast at 8. The trade association said the trend towards "no strings attached" wireless devices would accelerate along with increased touch screen and voice activation technology." The CEA's 2009 outlook for computer sales is somewhat better. DVD players and other household electronics face the same challenges as other consumer goods 8 . the ratio of desktop PC unit sales to laptop PC unit sales was 58 percent to 42 percent. Russia. the changes in the consumer electronics industry are not being driven by product evolution." the CEA said. As for trends to watch this year.
World famous brands such as Sony. Samsung can claim to be the world's fastest growing electronic company. including: 1. has made the country’s consumer electronics industry highly dynamic. Innovation. Easy financing schemes that are making purchases possible. The rapidly falling prices and improved functionality provided by convergence are influential forces behind the growing consumer demand for electronic items. Japanese companies have captured the consumer electronics market. The growth is aided by a multitude of factors. Increased local manufacturing. The lifecycle of consumer electronics products is shrinking along with severe price deflation.companies. Korean companies such as Samsung and LG are all trying to join the Japanese bandwagon. 1. 9 . 3. 2. The Asia Pacific region is the market leader wielding the biggest chunk of the market. 4. Panasonic and Matsushita are all owned by these Japanese manufacturers. closely followed by Europe. Growing consumer confidence due to rising disposable incomes. Expanding distribution networks. a factor that makes demand. 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. on the back of rapid economic growth. differentiation and flexibility are critical to a company’s survival in the consumer electronics market.2 Indian Consumer Electronics Industry India has an increasingly affluent middle class population that. pricing and promotions management even more challenging.
9 12. increasing consumer awareness and introduction of new models. especially the rural electrification program. double-income families. Products like air conditioners are no longer perceived as luxury products. 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. This has not favoured durable companies till now.7 16.8 18 Rs billion Rs billion 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 Year In consonance with the global trend.8 11.Growth of Consumer Electronics Production in India 18 16 14 12 10 8 6 4 2 0 15. rural electrification programs have always lagged behind schedule. availability of credit. demand for consumer durables has increased with rising income levels. Any incremental spending in infrastructure and electrification programs could spur growth of the industry.2 13. over the years. 10 . Given the government's inclination to cut back spending. One of the critical factors those influences durable demand is the government spending on infrastructure. changing lifestyles.
59 billion) by 2011.13 crore ($6. especially the Korean chaebols.26.5 billion) in 2007. Companies are focusing on customizing products to suit Indian tastes.15. With a market size of Rs. thereby incorporating specific design elements into their products. For example. ISuppli Corp.The consumer electronics market is one of the largest segments in the electronics industry in India. The inputs from this research are determining product attributes and pricing and accordingly are achieving better acceptance among consumers. 897. thereby creating a niche for themselves. 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 . FPD remains a focus area. predicts the Indian audio/video consumer electronics industry will grow to Rs.89 billion) in 2006.0 per cent from Rs. companies are trying to identify customer requirements. the consumer electronics industry in India is poised for strong growth in the years to come.18. Several companies are conducting market research in order to understand the psyche of an Indian consumer. catering to a population of more than 100 crore people. 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. and for few companies. 390 crore ($4. rising at a Compound Annual Growth Rate (CAGR) of 10. By conducting consumer research. Most players in the consumer-electronics industry have introduced products in the FPD segment.13 crore ($3. 931.
Currently. ISuppli expects domestic manufacturing to be a key characteristic of this growth in the 12 . Furthermore. However. higher sales of products in rural areas. thereby positioning it also as an export base. although such relationships represent an extension of their global relationships. Due to the lower prices of unbranded products. companies are expanding their distribution networks in these areas. The government has been focusing increasingly on developing the manufacturing sector by developing infrastructure. This is in alignment with India figuring into the plans of several companies that want to cater to the domestic and export markets. This is reflected by the fact that established players are reporting years to come. As the awareness among rural consumers rises. Domestic consumption is reaching significant size to trigger manufacturing in the electronics sector. they are expected to show a preference for branded products. rationalizing duties and creating export-promotion zones. Although electronics production has remained a miniscule portion of overall Indian manufacturing for a long time. the trend is gradually changing. As the local market gains size. India also is assuming a significant place in the global plans of several major electronics manufacturers. 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. The move has positively impacted sales for companies opting for rural expansion. rural consumers have been inclined to buy these products. EMS and ODM companies in India have been associated with several design companies. However. In order to tap semi-urban and rural demand.sets. such as Flextronics' deal with in Silica for the development of SOC devices. rural consumers have not been as brandconscious as their urban counterparts. such instances are few and far between. some local partnerships also are appearing. although they often have poor quality. these associations will become more common.
Air Conditioner .Set-top Box .Microwave Oven . mobile handsets. offering 4year industry forecast.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. of following consumer electronics products: . The report thoroughly analyzes the historic performance and future prospects.MP3 Players .Washing Machines (Semi-automatic & Fully Automatic) . audio/video appliances. This analytical research thoroughly evaluates the Indian consumer electronics industry.Television . underlining the future potential areas and key issues crucial for the industry development.Digital Camera & Camcorder .Mobile Handsets . 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.1. and PC market. 'Booming Consumer Electronics Market in India” offers extensive research on various consumer electronics products that are broadly classified as home appliances. the markets for these products are shifting to the semi-urban and rural areas.PCs (Desktop & Notebook) 13 .Refrigerator (Frost-free & Direct Cool) . It briefly discusses about the current and emerging trends in the industry.
the Indian consumer electronics industry is forecasted to grow at a rapid rate of 10% to 12% in the coming few years.Driven by young population. are anticipated to drive the Indian refrigerators market over the forecast period. demand for MP3 players and digital video appliances are anticipated to surge at double-digit rate in near future. and the share of FPTV is projected to increase at robust rate in near future. . . 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). . . changing lifestyle and rapid urbanization.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. 14 .Propelled by growing middle class population. .Volume sales of washing machine will be driven by growth in fully automatic category during 2008-09 to 2011-12.Key Research Findings: . .The AC market in India is projected to grow at 30% to 35% for the coming few years.Frost-free refrigerator sales. certainly growing at a much faster pace than the direct-cool category. Currently.
with around 18% of its employees working in Research & Development. Samsung India has its headquartered in New Delhi and has a network of 19 Branch Offices located all over the country. Laden and Ignis.000 employees worldwide it is one of the major giants in the consumer durable 15 . LG India LG Electronics was established on October 1. 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. near Delhi. Kitchen Aid. Roper. 1958 (As a private Company) and in 1959. The parent company is headquartered at Benton Harbor. Refrigerators and Washing Machines is located at Noida.1. USA with a global presence in over 170 countries and manufacturing operation in 13 countries with 11 major brand names such as Whirlpool. The Samsung manufacturing complex housing manufacturing facilities for Colour Televisions. today enjoys a sales turnover of over US$ 1 billion in just a decade of operations in the country. In the year ending in March '06. 375 crores. Today.1. Samsung design centers are located in London. Michigan. Colour Monitors and Refrigerators are being exported to Middle East. CIS and SAARC countries from its Noida manufacturing complex. The company owns three state-of-the-art manufacturing facilities at Faridabad. Shanghai and Romen. the annual turnover of the company for its Indian enterprise was Rs. San Francisco. Tokyo.4 Competition Overview Samsung India Samsung India commenced its operations in India in December 1995. Colour Monitors. LGE started manufacturing radios. Pondicherry and Pune. operating 77 subsidiaries around the world with over 72. Los Angeles. According to IMRB surveys Whirlpool enjoys the status of the single largest refrigerator and second largest washing machine brand in India. Whirlpool is the most recognized brand in home appliances in India and holds a market share of over 25%. Estate. Samsung India currently employs over 1600 employees. Bauknecht. Samsung ‘Made in India’ products like Colour Televisions.
270 million).200 Wholesale Dealers. the company was converted into a public limited company in the same year. Japan. The company also has presence across the country with 21 company owned and 172 authorized service centers. The company was entered into a joint venture with Sharp Corporation. home theatre systems and optical storage systems. CDMA handsets. The Company has Representative Offices in Sharjah (UAE).000 Retail Outlets. 58. the Company was incorporated with limited liability on March 3. 1932. Sony India Sony Corporation.domain worldwide. and more than 18. The Company has a network of 38 Company-owned Retail Stores. 1913. The Company is one of the largest privately-held diversified industrial corporations in India. amounted to about Rs. It's global leading products include residential air conditioners. The company has as many as 27 R & D centers and 5 design centers. 2006.000 million (US$ 1. Godrej India Godrej India was established in 1897. more than 2. In India. The name was changed to Kalyani Sharp India in 1986. under the Indian Companies Act. Sharp India Ltd Sharp India ltd was incorporated in 1985 as Kalyani Telecommunications and Electronics Pvt Ltd. Japan . established its India operations in November 1994. Nairobi (Kenya). Sony has its distribution network comprising of over 7000 channel partners. 215 Sony World and Sony Exclusive outlets and 21 direct branch locations. Riyadh (Saudi Arabia) and Guangzhou (China-PRC). The combined Sales during the Fiscal Year ended March 31. Toshiba had a presence in India since 1985 and was represented in India through their Liaison Office. 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.a leading manufacturer of 16 . Colombo (Sri Lanka). DVD players.
The company was accredited with the ISO-9001 certification in the month of February. 2001. Industrial Components & Equipment. and its products are used in 133 countries. no duties on imported components or capital equipment. VCRs. LCD Projectors. Some of HIL’s product range includes Semiconductors and Display Components. The company manufactures consumer electronic goods such as TVs. The government. All goods required in the manufacture of ITA-1 items are exempt from customs duty. 17 . in an attempt to encourage manufacture of electronics in India has changed the tariff structure significantly. VCPs and audio products. EHTP (Electronic Hardware Technology Park) is an initiative to provide benefits to companies that are replacing certain imports with local manufacturing.consumer electronic products to manufacture VCRs/VCPs/VTDMs. Smart Boards and DVD Camcorders. business tax incentives. materials and components. It is now possible to import duty-free all components and raw materials manufacture products and export it. It also supports the sale of Plasma TVs. LCD TVs. 1. The products were sold under the Optonica brand name. 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. EHTP benefits include export credits. Sharp has a production base in 26 countries with 33 plants. 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. and an expedited import-export process. Air Conditioning & Refrigeration Equipment to International Procurement of software.
geographical indications.Customs duty on specified raw materials / inputs used for manufacture of electronic components or optical fibers / cables has been removed. the member nations are asked to modify their existing laws. hard disc drives. creation of a new Trademark Act. trade marks. a new Designs Act and amendments to the Patents Act show India’s desire to change and adapt. copy rights and related rights. Microprocessor. the patent Act 1970 was amended in 1999 & 2003 and Trademarks and Merchandise Marks Act 1959 was overtaken by a new Trademark Act 1999. The Indian Copyright Act 1957 was amended in 1999. creation of a new Trademark Act. Several amendments to the Copyright Act. Accordingly. The country has already made several changes in its IP acts over the years. growth and development. In the current WTO regime. and the Layout Design of Semiconductor integrated Circuit Act 2000 was enacted. amended most of its IPR Acts and Rules to conform to the said Agreement.. The Government of India has developed a robust IP act to facilitate innovation. Several amendments to the Copyright Act. 18 . 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. The Industrial Design Act 1911 was effectively replaced by The Design Act 2000. India is a party to the “Trade Related Aspects of the Intellectual Properties (TRIPs) Agreement” and has accordingly. floppy disc drives and CD ROM drives continue to be exempt from excise duty. and the protection of industrial designs. The agreement on TRIPs takes care of the intellectual property rights by enforcing the patent rights. layout designs of integrated circuits and undisclosed information. a new Designs Act and amendments to the Patents Act show India’s continued effort to protect IPR. Customs duty on specified capital goods used for manufacture of electronic goods have been abolished. New acts have also been enacted to cover semiconductors and layout designs which will be of considerable importance to the electronic industry.
32 billion. 217 IT/electronic items were covered under the Information Technology Agreement (ITA) of the WTO for complete customs tariff elimination by 2005. etc.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. Free Trade Agreement WTO regime which came in force in 2005. raw materials and components. 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. In fact. their entire requirements of capital goods. IT/electronics was the first sector in India to face complete customs tariff elimination. spares and consumables. 19 .29 billion. The FDI approval for electrical equipment (including computer software and electronics) from January 1991 to March 2004 was US$ 7. office equipment etc. During the same period the FDI inflow for electrical equipment (including computer software and electronics) was US$ 3. becomes difficult. The ITA-1 would result in intensifying competition as more imported products will be easily available at lower prices. 2. results in zero customs duty on imports of all telecom equipment. free of duty. Regulations 1. The units set up under these programs are bonded factories eligible to import. Deemed export benefits are available to suppliers of these goods from the Domestic Tariff Area (DTA). several items were already at NIL customs duty. Out of these 217 items. which was 9. Enforcement of the TRIPs agreement makes the production of any product possible either through internal innovation or through formal transfer of technologies.94 per cent of the total foreign direct investment (FDI) approved. trade marks. Foreign Investment Policy: FDI Foreign investment up to 100 per cent is allowed in Indian electronics industry set up exclusively for exports. unauthorized use of the patented innovations.
Approval for setting up export-oriented units (EOUs) outside the zones is given by the Ministry of Industry. 4. Approval for setting up units in Export Processing Zones (EPZs) is given by the Board of Approvals in the Ministry of Commerce. Department of Information Technology. components and raw materials or the engagement of foreign technicians for short duration does not require any additional approvals. to complement and supplement domestic investment. Approval of Ministry of Home Affairs is not needed for hiring foreign nationals holding valid employment visa. Foreign technology induction is encouraged through FDI and foreign technology collaboration agreements. the import of capital goods.Resident Indians (NRIs) including Overseas Corporate Bodies (OCBs).3. 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. FDI/ Foreign Technology Collaboration Agreement The government facilitates FDI and investment from Non. predominantly owned by them. Proposals involving foreign direct investment not covered under the automatic route are considered by the Foreign Investment Promotion Board (FIPB). Procedure for approval Once the investment in equity has been approved. FDI and foreign technology collaborations are approved through automatic route by the Reserve Bank of India 20 .
Creating awareness about new technologies and products 5. whereas the corresponding tariffs in other Asian countries are between 7 and 17 percent. But that remains a major hiccup in India. These include: 1. but also spend on transportation for moving inventory. power. At its present structure the total tax incidence in India even now stands at around 25-30 per cent. manpower.1. Inverted duty structure 3.000 to 18. Companies not only have to set up the basic infrastructure in terms of office space. have a direct presence only in 15. still buys black and white TVs and doesn't know what flat screens are. Even LG and Samsung. Low affordability level of consumer products among the rural masses 21 . Expansion of distribution reach: Infrastructural bottlenecks (roads. at least a large proportion of its constituents.) have hindered the reach of the distribution network in India 4.6 Challenges and Opportunities The Challenges Heavy taxation in the country is one of the challenges for the players.000 of the around 40. Poor infrastructure is another reason that seems to have held back the industry. Declining margins for many players 2. foraying into these rural markets has a considerable cost component attached to it. ISuppli believes that there are still challenges facing the India consumer electronics industry as the sector tries to realize its full potential. This India. which are touted as having the largest distribution network in the country. About 65 per cent of Indian population that lives in its villages still remains relevant for some consumer durables companies. etc. Also. Regular power supply is imperative for any consumer electronics product.000 retail outlets (for consumer durables) in the country.
growth in disposable income. And looking ahead. after sales services to suit the infrastructure and the existing amenities like electricity. voltage etc. 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. While the consumer durables market is facing a slowdown due to saturation in the urban market. improving lifestyles. iSuppli believes that India will continue to grow as an important market for the global consumer electronics industry. The future of India's market is indeed bright. 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. Purchase necessarily done only during the harvest. believed to be months `good for buying’. rural consumers should be provided with easily payable consumer finance schemes and basic services. Currently. leading to increased expenses due to transportation. low running cost. and rise in temperatures. power availability. festive and wedding seasons — April to June and October to November in North India and October to February in the South. Opportunities The rising rate of growth of GDP. should be converted to routine regular feature from the seasonal character. these challenges are gradually being addressed.However. rural consumers purchase their durables from the nearest towns. 22 .
CHAPTER-2 Company Profile 2.1 Introduction 23 .
Markson products are produced in most modern and state-of-the-art plant at Haridwar. TFT Screens. a Himachal Pradesh based firm. Laptops. Colour TVs. Washing Machines and Microwave Ovens. The company started operation in early 2008 and in a short period of one year only. MARKSON is the long cherished dream of Mr. well supported by sales and service professionals of the company. The company has launched state-of-the-art wall mountable DVD Players with auto-sliding door facility. Home Theatre Systems. DVD Players. USB Playability with facility to mount DVD Players on the wall to give a unique look. The company’s products range has been widely accepted meeting the international 24 . launched the “Markson” brand of consumer electronics in January 2008.P. These features are not available in any other brand in the country. The company has also lined up Mobile Phones. 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. Quality and affordable prices are the hallmark of Markson. which will be launched very shortly. Set-top Boxes and Desktop computers. After-sales-service being the mantra of the brand. 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.SNR Electronics Ltd.K & H. Air-Conditioners. the company has been able to make a pan India presence through a strong network of more than 100 Distributors. Markson brand was launched in India in technical collaboration with the UK based company for designing and technical support of their products. Parwanoo & Baddi in U. Sunil Gupta. the company is in the process of opening more than 100 service outlets across the country. The product mix includes LCD TVs.
Mr. 2. The LCD TV’s are having unique features like USB Playback and MMS Playback. TFT screen & Set-top boxes. it’s an asset. Every single product made at Markson is an epitome of precision and impeccable quality. Gupta is the promoter of Markson brand in India with focus on manufacturing & marketing of electronic goods like LCD TV. Home theatre systems. in order to facilitate and expedite the distribution of Markson’s products in India. He has held coveted positions in numerous electronics associations like. AirConditioners. Desktop computers. For the last 26 years. 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. We at Markson believe that high quality innovation isn’t a privilege anymore.standards in quality and packaging. Mr.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. Color TV. and it’s your right! 2. 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. Laptops. Microwave Ovens and Mobile Phone sets. The Markson Computer TFT Screens have unique features and inbuilt speakers and with the aid of external TV Tuner can substitute a LCD TV. He also plans to venture into the Hospitality sector around the same time. DVD players. Gupta has a hands down experience in electronics trade. The company.3 Key People Mr. Markson Mr. He also plans to put more home products into the market by the end of the year like Washing Machines. his emphasis and special focus has been on trading of electronic components and assemblies. BETA (Bhagirath Electronics Traders Association) and 25 . has opened 13 branches at state level along with extensive warehousing facilities at the branches. Sunil Gupta CMD.
in Mechanical Engineering from the coveted technical institute. a council promoted by the Ministry of Information Technology. Mr. 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. and also for the export of quality electronic goods from India keeping in view the international standard. He has also been actively involved in construction of several dharamshalas for the needy. ELCINA.Tech. IIT. helping them in whatever possible way. Delhi and has been actively engaged in work since then. Mr. Mr. the CEO of Markson. namely. He also has a sound knowledge of Customs and Central Excise Procedures prescribed under the Customs Act and Central Excise Act. 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. CEAMA. Being a philanthropist to the core. Markson Sunil Wadhwani. The initial investment made was Rs 100 crore. Gupta has done a lot of social service for the needy. 2.4 Future Goals Markson targets revenue of Rs 400 crore by the end of this fiscal and will increase it to Rs 1.000 crore by 2012 with the introduction of several low cost products. has an impressive experience of 35 years in the electronics industry in international trading coupled with domestic marketing and production related factory processes. He received his B. Wadhwani has travelled extensively all over the world. Mr. and local Customs Advisory Committee in Delhi and Central Excise Committee in Noida. Sunil Wadhwani CEO. He has been an active member of several important electronic associations in India. He has also been an active member of ESC.Central Radio & Electronics Merchant Association. Wadhwani has spent considerable time in understanding export and import and their intricate procedures under the Foreign Trade Law. 26 . solely for the procurement of a spectrum of electronic components and goods.
With 2. The company. that has an initial advertising budget of Rs five crore. air-conditioners. will start registering profit after two years of this venture 27 . The company plans to launch washing machine. The company. refrigerators and microwave ovens in the next two months.000 dealers and distributors across the country. the company targets to capture five cent of the television market in the country by the end of this fiscal. will increase it to Rs 20 crore in the near future. a member of Consumer Electronics and Appliances Manufacturer Association (CEAMA).
1 Liquid Crystal Display Television Liquid-crystal display televisions (LCD TV) are color television sets that use LCD technology to produce images.3 Essential Theory 3. LCD televisions are thinner and lighter than CRTs of 28 .CHAPTER.
the individual colors blend together to produce a single spot of color. Normally light cannot travel through a pair of polarizers arranged in this fashion. The 29 . The sub-pixels are so small that when the display is viewed from even a short distance. This forces the layers to align themselves in two directions. Each shutter is paired with a colored filter to remove all but the red. Liquid crystals encompass a wide range of (typically) rod-shaped polymers that naturally form into thin layers. also show an alignment effect between the layers. although some displays use white or colored LEDs instead. This combination of features made LCDs more practical than CRTs for many roles. Some of these. The shade of color is controlled by changing the relative intensity of the light passing through the sub-pixels. The light is typically provided by a series of cold cathode fluorescent lamps (CCFLs) at the back of the screen. open and close to allow a metered amount of the white light through. and the layers above will subsequently align themselves with the layers below.similar display size. the layer in contact will align itself with the grooves. which is essentially a material with microscopic groves in it. green or blue (RGB) portion of the light from the original white source. When placed on a director. a pixel. Millions of individual LCD shutters arranged in a grid. Description Basic LCD Concepts: LCD televisions produce a colored image by selectively filtering a white light. 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. creating a twisted structure with each layer aligned at a slightly different angle to the ones on either side. this effect is utilized by using two directors arranged at right angles and placed close together with the liquid crystal between them. and are available in much larger sizes as well. Each shutter–filter pair forms a single sub-pixel. the bulk material taking on the director's alignment. On the bottom and top of the shutter are polarizer plates set at (typically) right angles. In the case of an LCD. LCD shutters consist of a stack of three primary elements. and as manufacturing costs fell their eventual dominance of the television market was all but guaranteed. the pneumatic liquid crystals. as opposed to the more random alignment of a normal liquid.
By controlling the voltage applied across the crystal. To turn a shutter off. a series of electrodes is deposited on the plates on either side of the liquid crystal.polarizers also carry the directors to create the twisted structure aligned with the polarizers on either side. but suffer from color shifting when viewed from the side. the amount of remaining twist can be finely selected. a field will be generated at the point where they cross. One side has horizontal stripes that form rows. IPS displays are used primarily for computer monitors. Since addressing a single shutter requires power to be supplied to an entire row and column. but are more difficult to construct and have slightly slower response times. all of these displays work in a similar fashion by controlling the polarization of the light source. the other has vertical stripes that form columns. Liquid crystals 30 . an electrical voltage is applied across it from front to back. This allows the transparency or opacity of the shutter to be accurately controlled. Vertical Alignment (VA. and can no longer pass through the front polarizer. exiting the front of the liquid crystal having been rotated through the correct angle that allows it to pass through the front polarizer. typically indium tin oxide. LCDs are normally transparent. S-PVA and MVA) offer higher contrast ratios and good response times. Addressing sub-pixels: In order to address a single shutter on the display. The light no longer changes polarization as it flows through the liquid crystal. As the light flows out of the rear polarizer. When this happens. the cells are placed under pressure. In-Plane Switching displays (IPS and S-IPS) offer wider viewing angles and better color reproduction. LCDs use electrodes made of a transparent conductor. In order to improve switching time. the rod-shaped molecules align themselves with the electric field instead of the directors. some of the field always leaks out into the surrounding shutters. By supplying voltage to one row and one column. Since a metal electrode would be opaque. which increases the force to re-align themselves with the directors when the field is turned off. In general. it will naturally follow the liquid crystal's twist. Several other variations and modifications have been used in order to improve performance in certain applications. destroying the twisted structure.
slowly leaking this through the crystal to the common ground. Another problem in early LCD systems was the voltages needed to set the shutters to a particular twist was very low. since the capacitor can be filled or drained quickly. like a mouse cursor on a computer screen. the glass sheet. but lacks the active matrix components. but the response time of the shutter is dramatically improved as well. Using a multistep construction process. one set. is attached to a common ground. but the transistors ensure that only the single shutter at the crossing point is addressed. This resulted in slow response times and led to easily visible "ghosting" on these displays on fast-moving images. but that voltage was too low to make the crystals realign with reasonable performance. 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. so pulse code modulation is used to accurately control the overall flow. the active matrix components and addressing electrodes. the gate line. is added as a separate switch for the transistors. a constant and relatively high amount of charge flows from the source line through the transistor and into an associated capacitor. This partial switching of the surrounding shutters blurs the resulting image. modern LCDs use an active matrix design.are quite sensitive. and even small amounts of leaked field will cause some level of switching to occur. say 0 and +5 volts. each shutter is paired with a thin-film transistor that switches on in response to widely separated voltage levels. In order to attack these problems. Not only does this allow for very accurate control over the shutters. The front sheet is similar. A new addressing line. the glass sheets can be replaced with plastic. typically the front. When switched on. The 31 . replacing those with the patterned color filters. The capacitor is charged up until it holds the correct control voltage. On the rear. The rows and columns are addressed as before. Instead of powering both electrodes. both sheets can be produced on the same assembly line. Even scrolling text often rendered as an unreadable blur. The rear sheet starts with a polarizing film. any leaked field is too small to switch the surrounding transistors. and then the director. For smaller display sizes (under 30 inches). 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.
which "boils" electrons off its surface. which renders those pixels on the screen "always on". 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. like other flat panel 32 . Comparison Packaging: In a CRT the electron beam is produced by heating a metal filament. the entire tube has to be held in vacuum. LCD panels. which requires ever-thicker glass. displays up to 40 inches were produced but weighed several hundred pounds. The critical step in the manufacturing process is the deposition of the active matrix components. If there are enough broken pixels. which is why the back of a CRT-based television is hot. The majority of the power budget of a CRT goes into heating the filament. The electrons are then accelerated and focused in an electron gun. The atmospheric force on the front face of the tube grows with the area. These have a relatively high failure rate. and aimed at the proper location on the screen using electromagnets. the screen has to be discarded. there is a small amount of vacuum in sets using CCFL backlights. the shutter assembly is combined with control electronics and backlight. Removing the need for heavy glass faces allows LCDs to be much lighter than other technologies. 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 backlight for small sets can be provided by a single lamp using a diffuser or frosted mirror to spread out the light. and bright and dark spots are not uncommon. Since the electrons are easily deflected by gas molecules. This limits practical CRTs to sizes around 30 inches. and the major downward fall in pricing between 2006 and 2008 was due mostly to improved processes.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 lack of vacuum in an LCD television is one of its advantages. To produce a complete television. but this is arranged in cylinders which are naturally stronger than large flat plates. Achieving even lighting over the front of an entire display remains a challenge.
only 8 to 10% of the light being generated at the back of the set reaches the viewer. to 42". from 14 to 30". To start with. are also much thinner than CRTs. LCD televisions end up with overall power usage similar to a CRT of the same size. In spite of using highly efficient CCFLs. Efficiency: LCDs are relatively inefficient in terms of power use per display size. This system examines the image to find areas that are darker. and 65" sets are now widely available. allowed that to be dramatically improved and. Finally. to control the color and luminance of a pixel as a whole. you can see that a good portion of the screen area is covered by the cell structure around the shutters. or at least wide horizontal bands of it. with production yields being the primary constraint. Since the CRT can only bend the electron beam through a critical angle while still maintaining focus. the light has to be further absorbed in the shutters. most sets use several hundred watts of power. Modern LCD sets have attempted to address the power use through a process known as "dynamic lighting" (originally introduced for other reasons. 3M suggests that. As a result. folded. each sub-pixel's color filter removes the majority of what is left to leave only the desired color. then 52". but improvements. and reduces the backlighting in those areas. This makes the technique suitable only for particular types of images. As yields increased. CCFLs are long cylinders that run the length of the screen. so this change can only be used to control the brightness of the screen as a whole. especially computer assisted convergence. on average. the electron gun has to be located some distance from the front face of the television. like the 33 . late in their evolution. in theory. Examining the image above. LCDs can. and in comparison to those technologies direct-view LCDs have a better image quality. more than would be required to light an entire house with the same technology. This allowed LCDs to compete directly with most in-home projection television sets. see below). In early sets from the 1950s the angle was often as small as 35 degrees off-axis. because the vast majority of light that is being produced at the back of the screen is blocked before it reaches the viewer. even the best CRTs are much deeper than LCDs. common LCD screen sizes grew. For these reasons the backlighting system has to be extremely powerful.displays. which removes another portion. be built at any size. After that. the rear polarizer filters out over half of the original unpolarized light. Nevertheless.
most notably the ghosting on fast-moving images. LCD panels with response times around 20 ms were relatively common in computer roles. typically a 16 by 16 patch. Think of it in relation to shutter speed on a camera. In spite of many predictions that other technologies would always beat LCDs. One potential improvement is to use micro prisms or dichromic mirrors to split the light into R. instead of absorbing the unwanted colors in a filter. By 2000. It’s the speed at which an LCD panels crystals “twist” to block and allow light to pass. Image Quality: Early LCD sets were widely derided for their poor overall image quality. common in North America. each pixel is lit for 17 ms before it has to be re-drawn (20 ms in Europe). Sets using LEDs are more distributed. 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. A successful system would improve efficiency by three times. A combination of improvements in materials technology since the 1970s greatly improved this. Early LCD displays had response times on the order of hundreds of milliseconds. with each LED lighting only a small number of pixels. which made them useless for television. 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. massive investment in LCD production and manufacturing has addressed many of these concerns. For 60 frames per second video.credits at the end of a movie. and muddy colors. A number of companies are actively researching a variety of approaches. as did the active matrix techniques. and 3M currently sells several products that route leaked light back toward the front of the screen. This allows them to dynamically adjust brightness of much smaller areas. which is suitable for a much wider set of images. G and B. 34 . Another would be to direct the light that would normally fall on opaque elements back into the transparent portion of the shutters. This was still not fast enough for television use. poor contrast ratio.
Named "Overdrive" by NEC. comparing them. By holding the before and after values in computer memory. which typically requires fewer charging pulses. NEC's solution was to boost the voltage during the "spin up period" when the capacitor is initially being charged. but stop rapidly. Even in a fully switched-off state. But even this is not really fast enough because the pixel will still be switching while the frame is being displayed. the amount of time spent charging and discharging the capacitors was reduced. Moreover the capacitors are not drained completely. pioneered by NEC. their existing charge level is either increased or decreased to match the new value. along with continued improvements in the liquid crystals themselves and by increasing refresh rates from 60 Hz to 120 and 240 Hz.A major improvement. the technique is now widely used on almost all LCDs. 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. liquid crystals allow some light to leak 35 . A common method is to double the voltage. improved response times by about two times. In older displays the active matrix capacitors were first drained. instead. and then recharged to the new value with every refresh. response times fell from 20 ms in 2000 to about 2 ms in the best modern displays. which was isolated to the driver electronics and inexpensive to implement. 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. NEC noticed that liquid crystals take some time to start moving into their new orientation. and then dropping back to normal levels to fill it to the required voltage. But in most cases. but was not originally required in the computer monitor role that bootstrapped the LCD industry. the overall performance would be increased. led to the first practical LCD televisions. the vast majority of the screen's image does not change from frame to frame. Together. delivering the same total amount of power. and only resetting those sub-pixels that actually changed. This change. but halve the pulse width. If the initial movement could be accelerated.
often as few as 256 pixels in a square area. This limits their contrast ratios to about 1600:1 on the best modern sets. The CCFL must be driven with enough power to light the brightest area of the portion of the image in front of it. limiting the number of discrete colors they can display. allowing the contrast ratio across the screen to be dramatically improved. when measured using the ANSI measurement. This allows the dynamic backlighting to be used on a much wider variety of images. While the LCD shutters are capable of producing about 1000:1 contrast ratio. 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. which is why many reviews of LCD TV's mention the "shadow detail". This lack of contrast is most noticeable in darker scenes. The accuracy and quality of the resulting colors are thus dependent on the backlighting source and its ability 36 . this technique cannot be used successfully. Displays using LEDs have an advantage.000:1. modern sets can use "dynamic backlighting" to improve the contrast ratio and shadow detail. This leads to "posterizing" effects and bands of discrete colors that become visible in shadows. if the backlighting is reduced by half in that area.through the shutters. it should be noted that the area of the screen that can be dynamically adjusted is a function of the backlighting source. by adding 30 levels of dynamic backlighting this is improved to 30. in order to display a color close to black. mentioned earlier). the LCD shutters have to be turned to almost full opacity. the shuttering can be reduced by half. because each LED typically lights only a small patch of the screen. However. and the number of available shuttering levels in the sub-pixels doubles. This is the main reason high-end sets offer dynamic lighting (as opposed to power savings. and that light is spread out with diffusers. CCFLs are thin tubes that light up many rows (or columns) across the entire screen at once. so if the image is light on one side and dark on the other. Since the total amount of light reaching the viewer is a combination of the backlighting and shuttering. However. a conventional set will have to set its shutters close to opaque to cut down the light. If a particular area of the screen is dark.
Through the halting introduction of HDTV in the mid-1990s into the early 2000s. so CRTs faced the twin problems of becoming larger and more rectangular at the same time. Using white LEDs as the backlight improves this further. Initially produced at smaller sizes. and sets commonly quote a color space covering about 75% of the NTSC 1953 color gamut. and it was widely believed that the move to highdefinition would push it from the market entirely. and from the mid-1990s the plasma display was the only real offering in the high resolution space. however. or SDTV). However. ideally a CRT should be perfectly circular in order to best contain its internal vacuum. LCDs of the era were still not able to cope with fast-moving images. the wider 16:9 aspect ratio of the new material was difficult to build using CRTs. Modern backlighting has improved this. the much higher resolutions these new formats offered were lost at smaller screen sizes. High definition: High-Definition Television (or HDTV) is a digital television broadcasting system with higher resolution than traditional television systems (standard-definition TV. LCD. and remained expensive. It was the slow standardization of high definition television that first produced a market for new television technologies. Meanwhile. The CCFLs used in early LCD televisions were not particularly white. and tended to be strongest in greens. plasma displays were the primary high-definition display technology. fitting into the low-end space that plasmas could not fill. and as the aspect ratio becomes more rectangular it becomes more difficult to make the tubes. especially at higher resolutions. Contrary to early optimism. both manufacturing and on the street. their high cost. At the same time. plasma displays never saw the massive scaling of economies that were expected. meant that older technologies like CRTs maintained a footprint in spite of their disadvantages.to evenly produce white light. LCD technologies like Overdrive started to address their ability to work at television speeds. LCDs started to experience the economies of scale that plasmas 37 . was widely considered to be unable to scale into the same space. In particular. This situation changed rapidly.
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. so many people have been working in this area. LCD's dominance in the television market accelerated rapidly. 32" models were widely available. so many companies. on this product. which lasted only a few months longer. This was in spite of the fact that plasmas continued to hold an image quality advantage. By 2004. encroaching on plasma's only stronghold. and even a price advantage for sets at the critical 42" size and larger. "Globally. So they can improve so quickly. covering both the high-end market for large 38 .failed to achieve. and in 2007 the last remaining consumer rear-projection systems were gone. pundits were surprised to find that LCDs had not only outsold plasma. Plasmas and LCDs reached price parity in 2007. The February 2009 announcement that Pioneer Electronics was ending production of the plasma screens was widely considered the tipping point in that technology's history as well. albeit at a price premium. so many investments." When the sales figures for the 2007 Christmas season were finally tallied. and sales of all large-screen televisions stagnated while customers watched to see if this would happen. while plasmas were stuck at 720p. The same was true for CRTs. By late 2006. Market Takeover Although plasmas continued to hold an obvious picture quality edge over LCDs. 42" sets were becoming common. Sony ended sales of their famous Trinitron in most markets in 2007. LCDs offer higher resolutions and true 1080p support. 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. and much larger prototypes were being demonstrated. several vendors were offering 42" LCDs. Plasma had overtaken rear-projection systems in 2005. More critically. By late 2007. This evolution drove competing large-screen systems from the market almost overnight. it was clear that LCDs were going to outsell plasmas during the critical Christmas sales season. and shut down the final plant in March 2008. LCD prices started falling rapidly in 2006 while their screen sizes were increasing at a similarly furious rate. but also outsold CRTs during the same period.
2. They are the four P’s of marketing. the vast majority of NF3 is broken down during the cleaning processes. There are four critical elements in marketing your products and business. 3. of which anywhere from 30% to 70% escapes to the atmosphere in typical use. another powerful greenhouse gas. 1.screens in the 40 to 50" class. Promotion: Informing potential customers of the availability of the product. NF3 is a potent greenhouse gas. Price: 3. Environmental effects The production of LCD screens uses nitrogen trifluoride (NF3) as an etching fluid during the production of the thin-film components. The right product at the right price available in the right place to be bought by customer. 39 . A report in Geophysical Research Letters suggested that its effects were theoretically much greater than better-known sources of greenhouse gasses like carbon dioxide. two earlier studies found that only 2% to 3% of the gas escapes destruction after its use. the report failed to compare NF3's effects with what it replaced. it was not made part of the Kyoto Protocols and has been deemed "the missing greenhouse gas. As NF3 was not in widespread use at the time. In reality.2 Marketing Mix Marketing your business is about how you position it to satisfy your market’s needs. its price and its place. perfluorocarbon. 4. Furthermore. Product: The right product to satisfy the needs of your target customer. as well as customers looking to replace their existing smaller CRT sets in the 14 to 30" range. Building across these wide scales quickly pushed the prices down across the board. and its extensive half-life may make it a potentionally harmful contributor to global warming. Place: The right product offered at the right price." Critics of the report point out that it assumes that all of the NF3 produced would be released to the atmosphere.
Apart from the physical product itself. Product’s appearance. and support make up what the customer is actually buying.The marketing mix should be something one has to pay careful attention to because the success of your business depends on it. there are elements associated with the product that customers may be attracted to. Customer research is a key element in building an effective marketing mix. Offering a whole range of products is most successful if the raw materials. warranties. A different type of growth would be a diversification of products. Product bundle should meet the needs of a particular target market.” while many basic products must be positioned for price conscious consumers. design. a luxury product should create just the right image for “customers who have everything. like a restaurant or a car service center does. skills and equipment. such as the way it is packaged. 40 . Product “Product” refers to the goods and services you offer to your customers. For instance. packaging. with the business offering related products. and distribution methods are similar. and customer service. services. and distribution methods. Other future growth may allow offering the product to different customers. production processes. or a brand name. one must think of what one can offer as a bundle of goods and services. Start-up businesses are most successful when they concentrate their efforts on one product or one market. options. Successful managers pay close attention to the needs their product bundles address for customers. Think long term about the venture by planning for the ways one can deepen and broaden the product bundle. which means one does not have to acquire new suppliers. Other product attributes include quality. function. and brand name. Thus. one may be able to take advantage of opportunities to add value through processing. The knowledge of the target market and the competitors will allow offering a product that will appeal to customers and avoid costly mistakes. features. Other important aspects of product may include an appropriate product range. warranties. Later growth may occur in the same location or may be in different geographic regions. For example.
The buyer’s perception depends on all aspects of the product. customer demand. So they begin their business by creating an impression of bargain pricing. one can follow a number of alternative pricing strategies. and prestige. In other cases. the competitive environment. Determining the product’s price can be tricky and even frightening. • Cost-plus: Adds a standard percentage of profit above the cost of producing a product. However. Going-rate pricing is common in markets where most firms have little or no control over the market price. Later. Accurately assessing fixed and variable costs is an important part of this pricing method. Many small business owners feel they must absolutely have the lowest price around. In the next column are eight common pricing strategies. customers will select vendors based on bids submitted simultaneously.Price “Price” refers to how much you charge for your product or service. Some price decisions may involve complex calculation methods. 41 . In those cases. gathering information will be more difficult. • Competitive: Based on prices charged by competing firms for competing products. • Value-based: Based on the buyer’s perception of value (rather than on your costs). Selection of a pricing strategy should be based on the product. including non-price factors such as quality. • Skimming: Involves the introduction of a product at a high price for affluent consumers. the price is decreased as the market becomes saturated. while others are intuitive judgments. 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. A coupon is an example of a discounted price. • Discount: Based on a reduction in the advertised price. The result should neither be greedy nor timid. healthfulness. this may be a signal of low quality and not part of the image you want to portray. • Going-rate: A price charged that is the common or going-rate in the marketplace. In some cases. you can direct observe your competitors’ prices and respond to any price changes. This pricing structure is relatively simple to follow because you maintain you price relative to your competitors’ prices. As a manager. and the other products you will offer.
ultimately it must cover costs. • Price differences among geographic areas: Pricing variance among geographic regions. Tracing the path of the product from production to final purchase is a useful exercise to discover this information. • Price flexibility: Ability of salesperson or reseller to modify price. contribute to the image by communicating the perceived value of the 42 .99 per pound instead of $5.00 per pound. • 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. $4. • Price differences among target customer groups: Pricing variance among target markets. • Psychological: Based on a price that looks better. such as maintaining an in-store display. the amount of money actually received may be complicated by other pricing aspects that will decrease (or increase) the actual amount of money received. • Allowance: Price reductions given when a retailer agrees to undertake some promotional activity for you. • Cash and early payment discounts: Policies to speed payment and thereby provide liquidity. • Volume discounts and wholesale pricing: Price reductions given for large purchases. One will also have to decide how to determine: • Payment period: Length of time before payment is received. • Credit terms: Policies that allow customers to pay for products at a later date.• Loss-leader: Based on selling at a price lower than the cost of production to attract customers to the store to buy other products. After deciding the pricing strategy. for example. • Trade discounts (also called “functional discounts”): Payments to distribution channel members for performing some function such as warehousing and shelf stocking. • Bundling of products/services: Offering an array of products together. The options will vary depending on how one chooses to sell your product. The research needed to understand the pricing along the distribution path will be more than worth the time it takes. The methods discussed here should be a base from which to construct your price. Whatever the price may be.
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.
coupons. Other programs might focus on educating customers through seminars or reaching them through trade shows. Advertisements allow broad promotion of your products. and promotion—should work together in your marketing mix. Salespeople can tailor communication to customers and are very important in building relationships. it is costly. price. often initiated through press releases. being involved in the community. Your target audience may be more receptive to one method than another. For instance. place. • Generic: Generic promotion occurs when no specific brand of product is promoted. beef. Personal selling focuses on the role of a salesperson in your communication plans. and rebates. loyalty programs. News stories. but these will 46 . Important components of a good public relations program include being a good neighbor. • Word of Mouth: Word of mouth depends on satisfied customers (or dissatisfied customers) telling their acquaintances about the effectiveness of your products. Final Comment The four P’s—product. Additional sources of promotion may be attending or participating in trade shows. generic advertising is commonly found for milk. Public relations (PR) usually focus on creating a favorable business image. contests. Promotions might include free samples.• Electronic: Company Web sites provide useful information to interested consumers and clients. Sales promotions are special offerings designed to encourage purchases. Often. decisions on one element will influence the choices available in others. but rather a whole industry is advertised. Password-protected areas allow users to more intimately interact with you. and pork. While personal selling is an important tool. and networking socially at civic and business organizations. incentives. can be good sources of publicity. So you should make efforts to target personal selling carefully. Direct e-mail contact is possible if you have collected detailed customer information. prizes. Selecting an effective mix for your market will take time and effort. and providing open house days. setting up displays at public events.
and cultural image that you associate with a company or a product. In functionality and contextually they are proprietary visual.3 Branding Process The Branding Process can be explained by dividing it into two parts namely. The worksheets that follow will help you construct your marketing plans. the functions.pay off as you satisfy customers and create a profitable business. and indeed become the organization's most valuable assets. you might think safety. When you think Volvo. Understanding Branding What is a brand? Brands were originally developed as labels of ownership: name." Or "Yeh Dil Mange More" of Pepsi. 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. 3. 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. emotional. Once you have a good marketing mix—the right product at the right price." When you think IBM. creating the impression 47 . how they define their aspiration and enable them to do more. Powerful brands can drive success in competitive and financial markets. you might think "Big Blue. With time. Marketers engaged in branding seek to develop or align the expectations behind the brand's experience. how they reflect and engage them. Understanding Branding and Building Brand. or the essence of brand has changed. rational. design. term. Marketing is a part of your venture that will never end. When you think Nike. 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. you might think of an advertising campaign prompting "Just Do It. today it is what they do for people that matters much more. and symbol. the definition. However.
It is a comprehensive effort and requires commitment. brand associations. 48 . in one sentence. It requires to follow certain principles and should have a developed procedure along with wellsupplemented research base. what benefits it provides and why it is better than the competition.that a brand associated with a product or service has certain qualities or characteristics that make it special or unique. Brand Management A powerful tool like a brand cannot be created in a vacuum or from thin air. which uses well-defined and established principles but can be refined as well as mastered by practice. Brand management performed to its full extent means starting and ending the management of the whole company through the brand. and as such includes much about changing minds. A brand is therefore becomes one of the most valuable elements in an advertising theme. positioning. This starts with the leaders of the company who define the brand and control its management. One of the key tasks of Brand Management is development of brand's image. This art of creating and maintaining a brand is called brand management. visuals and even the appeal selected revolves around the image and helps in integrating. promoting and communicating the image to the targeted audiences. What makes up a brand identity? Brand identity includes brand names. logos. what business the company is in. All these discussed issues make branding a real art. 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. It is something that influences all of us in several ways and leaves a deepening impact on all of us. Brand management starts with understanding what 'brand' really means. whereby the personality usually a celebrity or image is "branded" into the consciousness of consumers. The personality and theme. support and contribution from everybody in the company. A good brand name gives a good first impression and evokes positive associations with the brand. A brand image may be developed by attributing a "personality" to or associating an "image" with a product or service. Brand management is a philosophy and a total approach to managing companies. A positioning statement tells. and brand personality.
There are at least three perspectives from which to view brand equity: Financial .ICICI). Brand associations are the attributes that customers think of when they hear or see the brand name. customers will think of you and buy from you when they are deciding on whether to buy from you or your competitor. It is advised to senior executives. etc. kids.Brand personality adds emotion. yet few companies consciously create a brand identity. this premium provides important information about the value of the brand. However. 100 more for a branded product over the unbranded product. Happy Meal. culture and myth to the brand identity by the use of a famous spokesperson (Sharukh Khan – Hyundai Santro). 49 . How do we determine our brand identity? Brand has been called the most powerful idea in the commercial world. This concept is referred to as brand equity. consistent food quality. if consumers are willing to pay Rs. What is Brand Equity? Brand equity is an intangible asset that depends on associations made by the consumer. in communications with employees and in every sales call and media interview. in every news release. For example. a character (the Nirma Girl or Amul Girl). Then. a family entering the restaurant.One way to measure brand equity is to determine the price premium that a brand commands over a generic product. pound that message home in every ad. expenses such as promotional costs must be taken into account when using this method to measure brand equity. McDonalds television commercials are a series of one brand association after another. The brand can add significant value when it is well recognized and has positive associations in the mind of the consumer. 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. an animal (the Merrill Lynch bull) or an image (Hum Hai Na . a children's party. By consistent repetition of the most persuasive selling messages. starting with the yellow arches. Ronald McDonald. lots of fun and following with associations of Good Quality reasonably priced Burgers.
Increases cash flow by increasing market share. and a lower risk from the perspective of the consumer. Strong brand equity provides the following benefits: • • • Facilitates a more predictable income stream (higher profitability). The consumer's awareness and associations lead to perceived quality. Attitude strength is built by experience with a product.Brand extensions . inferred attributes. The benefits of brand extensions are the leveraging of existing brand awareness thus reducing advertising expenditures. low quality of product. brand equity is not always positive in value.A strong brand increases the consumer's attitude strength toward the product associated with the brand. brand loyalty. Brand equity is an asset that can be sold or leased. Consumer-base . Brand Elements Brand elements are the components or constituents of brand that are designed and put together to strengthen brand's image. Continuous fall in sales is the biggest indication of negative brand equity. 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 . 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.A successful brand can be used as a platform to launch related products. reducing promotional costs. poor image or communication and better brand and image of competitor's product. and eventually. Some brands acquire a bad reputation that results in negative brand equity. and allowing premium pricing. appropriate brand extensions can enhance the core brand. This may happen due to out-dated product. Furthermore. However.
They should represent what the company. • The logo. 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. easy to pronounce and easy to understand. and they should communicate a unified message that depicts or supports the brand image. • The symbol and character being used as brand elements should also gel well with product features and characteristics and they should be in good term to identify the product with. slogan all should be catchy and flexible over time. symbols. It should be simple. the brand stands for. The elements should have adaptability and should be able to change as per demand of time and consumers. There should be some consistency and they should be used for several years before they are changed. packaging indentations etc. Brand Attributes Brand attributes are functional or emotional associations that are assigned to a brand by its customers and prospects. all should be protected. the transferability of brand elements should be high. use of registered trademark. The brand name should also connote what does product stands for. They should not look time beaten neither they should be changed frequently. logo. Intellectual property protection is the fifth criteria. Examples of Brand Attributes: • • • • • • • Influential Innovative Inclusive Relevant Connecting Leadership Humane Is branding just for large companies? 51 . • Brand name. packaging. symbol. • In addition. It should create a connection between the need of the consumer and the product. Brand attributes can be either negative or positive and can have varying degrees of relevance and importance to different customer segments.• The recall value of Brand name should be high.
You might infer." In its simplest form. However. It is the name attached to a product or service. can use this process rather they should do it and they should consider branding expenditure as longterm investment or a capital investment. successful branding programs begin with superior products and services. If the old marketing mantra was. Therefore. 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 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. no amount of advertising dollars. manufacturers and businesses of all types and sizes. backed by excellent customer service that permeates an entire organization. service businesses. Retailers." Nothing happens until somebody sells something. It has become the crux of selling in the new economy. fancy packaging or public relations will help you achieve your sales goals. that if you build a powerful brand. However." the new philosophy could be" Nothing happens until somebody brands something. which will fetch them hefty returns in long time frame. Brand Building Overview Branding is more than just a business buzzword. a brand is a noun. organization or product. you will in turn be able to create a powerful marketing program. if you can't convince customers that your product is worthy of purchasing. image.NO! It is one of the myths that only large business house or the player in an industry with excess competition needs a brand. upon close inspection. a brand represents many more intangible aspects of a product or service: a collection of feelings and perceptions about quality. lifestyle and status. In short. then. The Importance of Branding 52 . Branding is something that every one needs and can be applied to any business. a brand offers the customer a guarantee and then delivers on it.
you would begin to value the firm by looking at the assets tied to the Marlboro brand. Creating a strong brand identity will build mind share — one of the strongest competitive advantages imaginable. "The value of that brand is huge compared to those actual physical assets. "A brand is the one thing that you can own that nobody can take away from you. And not only will they follow your lead. It is often the brand that a business owner has to sell in such cases. customers will think of your business first when they think of your product category. when you think of tissues. Scotch is the brand that springs to mind. vice principal of marketing at Lindsay. can be quantified." says Howard Kosgrove. "What competitive edge do I have to offer that cannot be copied by anyone else?" The answer? Your brand. unlike other abstract marketing notions. when your child wants a hamburger." They are worth a small fraction of what you can sell that brand for. And when you're looking for tape to wrap a present. trucks. but they may also be able to do a better job or sell the product or service at a lower price. The question then becomes. Wis. They can steal your trade secrets. But your brand can go on and live. As a result. they can steal. Eventually. It creates a lasting value above and beyond all the other elements of your business. Your physical plant will wear out. Stone and Briggs Advertising in Madison. Brand equity. your patents will expire." 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. Likewise. For instance. you think of the Kleenex brand. "Everything else. You would then identify the cost of the factories. you can be certain that somebody will copy it before long. if you owned the Marlboro Company and wanted to sell it." That value is often called brand equity. If you have a great idea. machines and staff. Technology will change.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. he will often say he wants to go to McDonald's. patents. or the worth of the brand. more likely than not. The reason behind these strong brandproduct associations is that these companies have built rock solid brand identities. When Should You Brand? 53 . For example." says Kosgrove.
On the contrary. Tyvek. has seen brand names creep in. a DuPont fiber. are even beginning to see the importance of branding by tagging banking packages and even mutual funds with catchy names. Although most industries and products or services can benefit from a brand. Other industries in which branding is a must include: • • • • • • • • • Fast food High-tech Beverages Packaged Goods Petroleum Entertainment Retail Auto Pharmaceutical Types of Brands A brand cannot be all things to all people. Primary Brands . For example. restaurants and consumer goods. which were one of the last frontiers. All of the traditionally brand-conscious industries.Because of the competitive nature of business today. Brands can be separated into three categories: primary.This is a company's core brand or umbrella brand. By definition. are being forced to continue to brand heavily — perhaps even more strategically than they ever have in the past. This is why many brands broaden and widen their appeal by creating tertiary brands or line extenders. Primary brands typically garner a large percentage of a company's revenue potential and therefore need to 54 . where cost is usually more of a loyalty building factor. not every product needs its own stand-alone brand. nearly all industries can benefit from a branded product. improbably one of the best knew industrial branded products. no one brand is going to appeal to all customers. including fashion. Even industrial markets. branding is based on the concept of singularity — targeting individuals in a personal manner— and therefore precludes the concept of universal appeal. secondary and tertiary. Financial services.
but just descriptors. it will be easy to manipulate customer attitudes. but they contribute to the company's overall image in some way. Take. Brand identity is comprised of: Pricing . your product or service will have been in existence for a while and have direct competition. For example. a garbage bag manufacturer may make a generic-brand bag in addition to its flagship brand. Therefore. And if it doesn't. Therefore. it probably soon will. theta of branding is made easier. Tertiary brands . What Goes Into a Brand? If your product or service is new or unique. a toothbrush called the Crest Deep Sweep.be given priority and have a sufficient amount of advertising in order to root them firmly. Crest is the core brand. for instance.a component of value. the generic line is considered a tertiary brand for this company. or "flankers. usually a modifier to the brand name will suffice and strengthen the core brand. 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. Secondary brands don't need to have their own name.These are often line extenders. 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. More often. but it fills a need within a niche market so the company continues to manufacture it under the unregistered name Household Trash Bags. Since there are no pre-existing biases toward the product or service. The generic line may bring in minimal revenue for the company. and Deep Sweep is the secondary brand. 55 . they sometimes don't sport registered brand names. higher prices may signify to consumers higher quality. and lower prices may suggest decreased value.These brands typically have insignificant revenue potentials or expectations." for a core brand.
increased market share is a direct result of a successful branding campaign.a predisposition to buy displayed by consumers who are establishing brand loyalty. but by how others perceive it. but 56 .consumers may equate certain positive and negative consequences with use of your product or service. image is difficult to change once established. products or services with a highprofile market presence will lead to brand recognition and increased sales. Share of market . which is built over time and difficult to change once established. limited distribution of a product or service may imply exclusivity to discerning consumers. Presence . often represented by qualities the consumer relates to. Image . Positioning salience . Customer commitment . the higher your offering's awareness. Kosgrove says that the brand is not created by the marketer at all. Quality . which are directly related to presence. Positioning is not created by the marketer or the individual brand itself.Distribution . In fact. Like reputation.prominence in the paid and unpaid media.enduring public opinion of brand character. Preference . obviously.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.loyalty is built through long-term branding and close consumer contact. the better your sales results will be. higher quality will translate to more satisfied customers who come back again and again to purchase your offerings. residual awareness and recognition.availability. these may be warranted or unwarranted. Awareness . which is established by a combination of all elements of the brand. Benefits .top-of-mind awareness. What's in a Name? A.which impacts satisfaction.perceptions of brand traits or prototypical buyers. Reputation .
Beer and cola." 57 . and despite companies' push to try and brand the two products. they create the strategic and tactical suggestions to encourage the customer to accept a particular positioning in his or her mind. create trust in your brand. That will. on the other hand. bread and milk are not branded items. To position your offering properly. for instance? Because we believe in the brand's "revolutionary" Pro-V formula that leaves hairs strong and healthy. they usually choose what is on sale or what is available on their local grocer's shelves. 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 . wants and desires through your brand. rather. Several characteristics can work in a positioning campaign. expectations and wants. Why do we believe Secret antiperspirant will keep women smelling sweet? Because "it's pH balanced for a woman.Benefits need to be backed with some sort of persuasive reason to believe the product's hype. Relevance. Many times.rather by the customer. no company has found much success building brand equity. are heavily branded product categories: Consumers have formed a relationship with and will search out their preferred brands. they can have a significant influence on how they are positioned. you will be able to more efficiently meet their needs. the greater the chances are that the prospect will buy that product. For instance." While marketers do not literally position brands. or the connection that the prospect has to the brand identity. you need to identify the key attributes or benefits that represent the value of your product or service. products or services have some formula or patent that is "unique" from all the other brands out there. such as: Relevance to a customer's lifestyle . "Positioning studies identify the audience according to their needs. Marketers don't create the positioning. and not a man." says Dettore. Why do we trust Pantene shampoo. When customers want either one of those staple items. in turn. "Positioning is everything. is how customers ultimately decide which brands to buy and which they will discard.The more apparent the connection is between the brand and the prospect's daily activities. As you begin to understand the relationship that your customers have with your brand. Those drivers then come into developing products and services that best fit those audiences' needs and wants.
but told you nothing about the product or service.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 . you need to be clear about the message." The copy line helps reinforce that this brand is the genuine article for that category of products.Have you ever seen a commercial on TV that seems to come from left field? It grabbed your attention. the brand? Product Is the genuine article . Even service companies can make claims to being the real deal. 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." 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.Many successful companies build customer trust by claiming to be the real McCoy." "Coke Is It" and "Always Coca-Cola. and it seemed inappropriate for what is being sold. 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. rather than helping. Some examples of crystal clear campaigns include "Gillette . products and services? If not. Coke tells you that "It's the Real Thing. how can I change them to be more accurate? Message of the brand Is appropriate .The Best a Man Can Get" or "Choosy Moms Choose Jif. For instance. Types of Prompts in a Campaign 58 . Ask yourself: In what ways are my products and services more "genuine" than my competitors'? How can I emphasize those elements to give the brand a competitive advantage? B. Ask yourself: Are my advertising messages in line with the image I'm trying to convey about my company. Pace Picante sauce tells you that they are not the brand from New York City. The message that you send needs to be appropriate to the product or service you are trying to brand.No matter how brilliant a strategy you have. For instance. could they be hurting.
and you will succeed in creating a powerful brand. Al Reis and Laura Reis. Most people think that they know a high quality product from another. lies in the mind of the buyer. things are not always as they seem. that positioning prompts are not verifiable scientific hypotheses. "If you look at the most profitable companies in the country. for instance. the next thing to look at is how you are going to lure your customer to try your brand. they have a very high perception of quality. When you narrow a product's focus. and there is a great deal of interpretation and high degree of risk that is involved in choosing one positioning over the other. 59 . however. authors of "The 22 Immutable Laws of Branding. they explain. but in reality. and a specialist is perceived to know more. or be of "higher quality" than a generalist. Another way to build the perception of high quality is to simply attach a higher price tag to your brand. For example. You can talk about how your product or service is better. and it may be different than measured quality. People say that Apple is a better product [than the PC]." say the best way to increase perception of quality is to narrow the company's focus. Be aware." says Kosgrove. or the perception of quality. 1. 'My product is better." Quality.' Look at the computer industry. Quality positioning .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. "Somebody can come in and say. That method is called the "positioning prompt" of the brand.Once you determine the way in which you can reach your market. Build a powerful perception of quality. 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. A brand can evoke several different types of prompts. That's why it makes sense to look at alternative positioning types before deciding on which one you will attach to your brand. but you have to get people to believe in it. you become a specialist rather than a generalist. But PC manufacturers will say that the PC is better because more people believe in it. but all of these brands carry a perception of higher quality because of their higher prices.
items that were considered to be a good "value" meant that they were inexpensive. 4. which introduced a breakfast cereal that aims at undercutting brands like Kellogg's or Post. brands that are considered a value are rising in popularity amongst consumers. experienced a backlash when their prices rose too quickly.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. as well as smart companies like Quaker. 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. It allows the affluent consumer to obtain psychological satisfaction from the public purchase and consumption of a high end product. 3. Unfortunately. co-branded names. Of course. 2. Rolex makes a heavier watch than Timex. Calloway clubs have a bigger head than Titleist. Each of these characteristics gives the perception of quality." Jeep has created a car and branded apparel for rugged individualists. In fact. especially cereals. have found a strong market. started asking computer users to liberate themselves from the PC camp and" Think Different. Apple computer. In fact. the product or service does need to have some perk or difference to justify the higher price. 60 . Relational prompts -. Private supermarket labels. not solely by what they sell. packaged good brands. Value positioning -. feature-orientated stances are often rendered useless if the competition comes out with a faster or more advanced model. Today. Feature-driven prompts -. Sketchers equates sneakers with cool and that characteristic passes to all who wear them.More marketers rely on product/service features to differentiate their brands than any other method. but they don't necessarily improve performance. The advantage is that the message is clear. high price is a benefit to some customers. Mont blanc has a fatter pen than Cross.Believe it or not. that stigma has fallen by the wayside. For instance. 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. For instance. most of the other major airlines have followed Southwest's lead by rolling out valuepriced flights under new. These brands have achieved positioning based on who buys what they sell.Although at one time.
asking friends and family to "Reach Out and Touch Someone. frozen meals cut meal preparation time to minutes. many marketers play on our feelings. Discover credit card. you are buying the only real way to "Drive Safely. Other campaigns that challenge consumers to be the judge have cropped up between car companies. In the book. or a person they might like to be.These are positioning prompts that offer prospects a place they might like to go. "Building Brand Identity: A Strategy for Success in a Hostile Marketplace. they usually make up for in directness and credibility. For example. 7. What problem/solution campaigns lack in imagination. positioning deals with how one brand is thought of compared to its obvious competitors.or desire based." Volvo hints that through purchasing their Swedish import cars.Other brands base their entire positioning on the fact that they give back to the consumer. Packaged good brands tend to be the most frequent users of problem/solution prompts. 8. 6.By definition.5. we are still docile and emotional animals. or a state of mind they might like to achieve. for one. garbage bags.As the name implies. "How people feel about a brand is oftentimes need." I am Superman." Need proof? AT&T's commercials are often tearjerkers.Underneath our capitalist driven needs to consume. which means that emotional or psychological approaches can oftentimes be very effective as positioning prompts. As such. And a new campaign from IBM has random people exclaiming." because they use a new version of the Lotus Notes software program. Laundry detergents. Warm and fuzzy positioning -. Problem/solution prompts -. Detergents and cleansers also make good use of these prompts. Rivalry-based positioning -. even between search engines on the Web. Therefore. Aspiration positioning -. the idea of a rivalry-based position might seem redundant but many campaigns take this approach." 9. are constantly going head-to-head to prove which one has the most power to lift stains. problem/solution prompts show the consumer how a sticky situation can be relieved quickly and easily with the brand or service. 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." author Lynn Upshaw writes. for instance tells customers that "It 61 . Benefit-driven positioning -. The now defunct Joe Camel mascot for Camel cigarettes infuriated parents.
C. If you sell computers. The team members must be clear on what customer benefits are being offered and how they are based on real life needs and desires. Now nearly all credit cards offer some type or reward. Discover was among the first major credit cards companies to provide its users with a financial incentive for using their card. determine what the benefits are for your products and services." Use the card and get money back. for example. ask yourself what business you are really in. Determining Which Position Will Work for Your Brand To determine which position will work best for your company.Pays to Discover. you may be in the business of: • • • • Tourism Recreation Entertainment Stress-reduction Next. you maybe in the business of: • • • • Information Speed Convenience Technology If you sell travel packages. Similarly. your marketing team should be able to describe a precise customer benefit that can be addressed in some way by the brand. 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 . After completing the necessary research and reviewing the relevant examples of positioning. be it frequent flier miles. To accomplish this. focus on relevant reality-based customer benefits. discounts on gas or store purchases.
After all. a personality helps to humanize an otherwise inanimate object or service so that a prospect's defenses are lowered. The off-beat. 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. if the founder is a high adventure sports enthusiast. to a large extent.• Are there extension opportunities for these branded products or services? If so. It's hard. small-company brands usually take on the personality of the entrepreneur who owns them." says Kosgrove. Every contact they have with you helps to build that brand. and help forge an emotional link that binds the buyer to the brand for years to come. An entrepreneur or founder." One entrepreneur whose personality permeates every aspect of his brand is Nicholas Graham. "you are more willing to overlook flaws and search for strengths. humorous line of boxer shorts and loungewear that the company produces bears the distinctive image of the zany Graham himself. the brand will probably not be the favorite of a conservative investment banker. how will we overcome them? • • • • Building Brand Personality Brands that carry with them a true persona. for an entrepreneur to create a brand that is a 180-degree turn against what the founder is like. Therefore. An attractive brand personality can pre-sell the prospect before the purchase. 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. it's hard not to like someone with a good personality. reinforce the purchase decision. In matters of branding. According to Kosgrove. and the beliefs and experiences similar to a personality make a brand rise to a new level. good or bad. "A brand is everything that your customers know about you. founder of Joe Boxer." writes Upshaw. In such cases. he says. who is best known for unorthodox marketing antics like shooting an underwear- 63 .
Whether through a mascot or an animated figurine. it can make it easier for customers and prospects alike to understand what the marketer has to offer. the Pillsbury Doughboy's laugh reinforces that the product will make your family feel good.laden rocket into space and holding an undergarments "fashion show" on a transatlantic flight on Virgin Airways. in some ways. Provider-driven . The personality gives the consumer something to relate to that can be more vivid than the perceived positioning of the brand. or want to be like. 64 . relate to. particularly when there are few product or service features that are different between competing brands. However. Image of the product or service . a brand with a distinctive personality presents the would-be buyer with something he or she can relate to as an individual. Personality is usually shown in three ways. these generations are also skeptical of marketers and are keenly aware of when a brand is targeting them.As strange as it may sound. Many companies with branded products geared toward Generation X and Y use this tactic. but also a face. A brand's personality can offer the single most important reason why one brand will be chosen over another.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. Image of the user . Even more important. packaged products often take on a personality that consumers can relate to." show that the brand is trustworthy and their brands reflect the same attitude. a practical prerequisite for success in an increasingly individual-driven marketplace. Although a strong identifiable personality is not imperative. The personality. For instance. Brands that lean heavily on the provider image include insurance companies and financial institutions.Other brands like to show that the people who use the brands are people that you could be friends with. is much more real than the other aspects of the brand because it is the outstretched hand that touches the customer as an individual. products come to life to give consumers more than just a brand to trust. Prudential's "The Rock" and Allstate's "You're in good hands.
Besides content swaps. 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. or what is better known as strategic relationships. And Betty Crocker uses real Hershey's chocolate in their brownie mix. before you jump into a co-branded relationship. "Does it have Intel inside?" In fact. Therefore.Strengthening Your Core Brand A. One brand teams with another to offer a product with an enhanced (or seemingly so) benefit. No two brands have exactly the same impact on the consumer. Bean credit card. are rampant. Check that your potential partner is not only compatible with your product but also that it won't eclipse your own brand. If that risk 65 . but the smaller company's brand doesn't really receive much attention. Sometimes a co-branding strategy isn't as advantageous as it may seem. one partner in every co-branding partnership will receive more attention than its counterpart. For instance. A slew of credit card companies has-been teaming up with retailers to offer co-branded items such as the L. Co-Branding Although it has become somewhat of a fad amongst companies. Tropicana and Chiquita have made numerous fruit juice concoctions by blending their respective specialty flavors. ask yourself if the excitement that the deal will bring will build the brand or sabotage it. Co-branding works because it creates new excitement for the brands involved. However. co-branding. And financial companies have even jumped on the bandwagon. their question is. co-branding is a way for businesses to extend their brand's identity and cut expenses by partnering with compatible products and services. 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. companies invite branded products and services to be sold from their sites in what are known as affiliate programs.L. particularly for small companies that oftentimes get overshadowed by larger partners. For instance. The larger company receives the added benefits from the smaller company's product. Instead. On the Web.
" writes Upshaw. B. more can be done than just change a copy strategy and run new advertising. The company can highlight the new product at trade shows or conventions. if a software company comes up with a new version of one of its programs. As you can imagine. and in what way they are relevant to the realities of the consumer's everyday life. 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. method to check up on efficiency/courtesy of service department. "It's the marketing team's job to prioritize identity contacts and to judge how they might contribute to the brand's identity. nearly all of the brand identity contacts can be manipulated to increase emphasis on the new functions of the software. Store salespeople can wear pins alerting customers to ask them about the new software features. 66 . 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. For example. • • • • Brand Pep Boys Example Brand Identity Contract Follow-up phone call after servicing the car. then the partnership is sound. For example: • The product's packaging can be reprinted so that bursts highlighting a "New" or "Improved" version of the program. Identity Contact Identity contact is the sum total of all information and experiences that a customer or prospect has with a brand. opportunity to remind customer of upcoming sales. Contribution to Brand Identity Reminder that the auto maintenance shop cares about customer service.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.
Close-up of Nike logo on shoes of player in NBA championship or on Tiger Woods in PGA Gold Tours. revisable numbers send signal that MCI is on top of what's happening in prices. When a customer enters the showroom. we are going to sell the company's brand.' They do that by making sure that every point of contact with a customer is going to be completely different.McDonald's Ronald McDonald Houses for the families of seriously ill children. 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. Vans. Calif. instead of being crabby with them and making them wait. 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. and the showroom itself is clean and friendly.. C. MCI Nike Identity contacts are important because they can set a tone for subsequent contacts with the company and the brand. And when there is a service problem. they see people in matching polo shirts rather than suits. has led the way in sponsoring events that their younger customers care about. reinforcement of superior quality or product and prestige of being worn by winners. In addition to its humanitarian value. Brand-name registration in compelling way. and we are going to prove it. says Kosgrove. Grassroots Grassroots marketing is a form of branding that has really hit its stride in the last few years.'" says Kosgrove. 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. 'We are not going to sell the car. "They say 'We are a different kind of car company. The sneaker company has become synonymous 67 . not slick. Brand associated with the best athletes in their sport. reminder of savings positioned. Electronic billboard tabulating how much MCI customers have saved by using its services." The result. RM houses remind parents of McDonalds' commitment to the American family. a shoe company in Santa Fe Springs." Saturn said. they give coffee and doughnuts to the people when they come in. Advertisements with athletes of Olympic or star stature.
Word of Mouth Whether it is planned or not. and your capacity problems may just be beginning. Ask yourself: What do my customers care about.I." 68 ." says Kosgrove. the tour has also featured the Mega-Pump Climbing Wall Competition and Spike and Mike's Festival of Animation. "If you have a retail business in a neighborhood. "You want to look at what your customers care about. in-line skaters. R. Last summer's roving tour featured punk and "ska" bands as well as pro demos from skateboarders. In past years. "When your company is lucky enough to be the beneficiary of word of mouth. The juice company sponsors two Winnebagos to roam the countryside and entice consumers to become "juice guys. the company has done well stepping into other areas of their customers' lifestyles. your identity problems may be over. Besides just sporting events. Vans sponsors the very popular alternative Warped Tour." writes Upshaw." Smaller companies. "Word of mouth is still considered the most potent marketing communication of all because it's dispensed by the most credible sources of all — ordinary citizens who don't carry a built-in bias of commercial sponsors. word of mouth is well worth the effort it takes to generate it. for instance. an alternative music festival that combines other types of cutting-edge live entertainment. a bike shop in East Providence. can easily sponsor community events.with alternative sports by hosting events in the skateboarding. The business also sets up makeshift service shops off area bike paths on sunny summer days. Nantucket Nectars has also garnered fame by using grassroots promotion strategies. tune-up students' bicycles on a local college campus to get them ready for the back-and-forth trips from the dorms to classes. and how can I get involved in those things?" D. 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. East Providence Cycle. BMX biking and snow boarding categories.. events where shoes are a prerequisite. 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. rock climbers and BMX bikers.
The founder. 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. Competitors are also quick to duplicate the product or service being hyped. ginsengfortified. says that by staying true to its mission. word of mouth can work extremely well. In one memorable ad. After the onslaught of the copycat brands. For instance. the company has relied on word of mouth to promote its brand and Web site during its four-year history. and you end up with something that is very positive." he says." While it is difficult to intentionally generate a positive word of mouth branding strategy. spring-filtered. it can be done if you have the right product and the right strategy. Once strong word of mouth is achieved. the toy sensation of Christmas '98 that sent parents into shopping frenzies. be it the product or the promotional vehicle. the company's earnings slid. Creating an Online Identity 69 . 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. "We are selling something with quality and value. Snapple was smart to sell its brand to the Quaker Company in 1994 for $1. the company needs to convert the brand into something that will sustain the hype." For Web-based brands. which sells genuine military jackets and gear. has never posted an advertisement online. or some other herbal concoction. the company has been able to generate positive promotion on the Web. after Snapple's success. nearly every beverage company came out with their own line of iced tea — each one with a different gimmick. People are going to tell other people. It also doesn't hurt to have something extremely unique. Snapple also hit it big when kids started passing the word about the delicious iced tea beverage. For instance. be it sun-brewed.7 million. and Tickle Me Elmo. Ed Koch. "It snowballs. the hot toy in 1997. Sergeant Dave Hack. Instead. the ex-Mayor of New York City. One word of caution: Brands that are propelled by word of mouth often run out of steam quickly since most tend to be just fads or trends. the company US Wings.Some of the better known beneficiaries of word of mouth phenomena: Furby.
building up an online brand? Wouldn't those resources be better spent promoting e-commerce efforts.000 Internet users associated the following Net names with the following products: • • • • • • • Books: Amazon. Travelocity .12 percent Travel: AOL.20 percent Clothing: The Gap . there are four times as many online shoppers as purchasers.S." he says. 70 ." Research shows the brand names of seven Internet companies are already recognized by more than 50 million U. "The Internet helps promote companies' products in a very efficient manner and especially to all audiences in all parts of the world. But it is always important to look toward the future. only a percentage of them are actually buying online. giving them' mega-brand' status.8 percent each Autos: Yahoo! ." Still. 10. adults.24 percent Computer Software: Microsoft . "Any long established brand has had bad experiences. a debate rages in the business departments of many Internet companies over the importance of branding. Companies that form strong associations between their name and their category now will be the ones who will capture future sales. According to a survey from Intelliquest. so the Internet is one of the most cost effective ways to brand." says Dettore.com . "Whereas if you are fresh and new. According to Intelliquest. "Typical advertising media hit only a segmented or regional strategy.30 percent Computer Hardware: Dell .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. Yahoo!.56 percent Music: CDNOW . How much effort should they spend on e-branding initiatives — that is. which offer tangible returns? Although people are shopping online. and there are mistakes that have been made in the past.Online companies are putting branding to work with remarkable success. you have a clean slate.
"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. Customization -. from Synnetry." says Lynch. data is cross referenced. "Sites need to be branded so that the consumer can have confidence in the site and is willing to make a purchase there. For instance. we got it and we will get it to you quick." The company can't offer the warm. says Kosgrove." says Lynch. selection and delivery are their brand. but nutritional care for your animal. a company can brand itself as more than just a dog food supplier. "Their brand is: you want it. Once the information is entered into the database. but they can promise to ship you the book of your choice practically overnight. That tactic is certainly true with large online stores such as Amazon. 2. an online marketing firm says." Some tactics to build an online brand include: 1. "Then it isn't just a bag of dog food. Selection and speed -. There is no way that a pet food company would be able to gain that brand identity in the real world. "The World's Largest Bookstore." says Kosgrove. but rather as an animal nutrition expert. and they will have a large selection. friendly environment that Borders can. The site can walk visitors through a personalized analysis based on the animal's needs and activity level. John Lynch. and information telling you which formula of food your pet should be consuming is spit out.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.In short. The main benefit is that they are going to be fast. but nutritional care for your animal. answers are compressed. "Then it isn't just a bag of dog food. a pet food brand on the store shelf does not have many choices about the positioning of its product. The Web allows companies to take on new edge or benefit that a company would not be able to use in the real world. 71 . however. Prices are not as important. service is not as important [at the moment]. says Lynch. Online.Online brands don't usually tout themselves as cheap. Really. e-branding is very important and must be taken into consideration.
Build a community -. 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. chat group. Ways to increase contact and keep your brand in front of people include creating: • • • • • Newsletters Targeted emails Message boards Chat Advice columns 4. "Through the Internet. people seem to never tire about the wonders of the Apple computer. the Web is the perfect place to do just that. If your brand can stimulate a community around it. The company's brand is the focus of debates and discourses in the computer world.Community is the other buzz online. or join mailing lists or user groups 72 . Customers. Using Interactivity -. Unlike other media. then it has a powerful ally. online customers can interact with the brand and its identity in a way that no other medium can offer.There is no way that a pet food company would be able to gain that brand identity in the real world. "What pet store owner is going to carry that message for the pet food manufacturer to the pet food buyer?" asks Lynch. For a community to be successful.Creating services that other Web companies don't have will ensure that your brand is stronger than the rest. prospects and critics of the brand have strong opinions about what they like and don't like. which leads to many opportunities for community interaction." 3. Luckily. For instance. auction. they are allowed to create a better position for themselves than they could if they were going through regular distribution channels. you need to have a category that will engage people and spur them to want to talk with one another.
" says Kosgrove. and we are often a featured vendor there. Women.com members. chances are that you are also giving business to UPS or Federal Express.com is one site that fit the bill. 5. "If someone comes to your site and sees you link with other people that they respect. Anyone who buys a shirt is going to want to buy a tie. enhance visibility and increase revenues for companies. Women. Federal Express also allows catalog companies like Lands End to move Federal Express data to their own Web sites so that Lands End customers can track their packages' progress. Both shipping companies invite companies to use their software to calculate shipping weights and secure deliveries to the purchaser's home. they are going to feel good about being on your site. "Synergistic sites can swap banner ads usually without any fee being paid. It's important to find partners who are going to help promote our site. "We advertise in their entertainment areas. 73 ." Besides that. personalize user experience through interactivity with other members and develop opportunities for common leadership/ownership. it would be good to form a relationship with a store that sells shirts. Good alliances on the Web allow traffic to flow between sites that have a common interest. Big Star looks for companies that have an active relationship with their members and are willing to get Big Star involved. Form Strategic Alliances -." Another way that E-retailers can create partnerships is by finding larger content sites to sell their wares. Encourage early and steady contributors. We also have fitness videos in their health and wellness area and children's videos in their family areas. Give members something to care about by establishing a clear economic or social benefit. says Williams." says Lynch.Like co-branding. Williams says that when shopping for strategic partners. One way that synergistic sites can partner is by swapping banner ads. "If your site sells ties.com will also send a heads-up to subscribers telling them about movie promotions that Big Star is running exclusively for Women. For instance. strategic partnerships between Web brands can help strengthen identity. each time you purchase a package from an e-retailer. One of the best ways that an e-commerce site can partner with other sites is to embed themselves within another company's site.
or were not accessible by email.Since competition is only a few clicks away. people are going to say. If your customer service skills aren't up to par. 74 . if applicable Quick server response 7. never replied. 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. It may look as if you are on Joe's Computer Shack Web site. the standard for customer support must be higher for the Web than it is in the off-line world. This is of the utmost importance when you are building a new brand or bringing a new brand to the online arena. 'I thought you were someone else but now I know who you really are'." says Kosgrove. partners with smaller computer dealers online to let customers configure their own computers. Building credibility -. "The best sites in the world. are the ones that you don't even know that you are going to.Dell Computer Corp. but actually Dell has lent Joe software so customers can customize their PC. however. 6. Despite that logic. it's likely that a customer won't come back to interact with your brand or your site. market watcher Jupiter Communications found that 42 percent of the top-ranked Web sites either took longer than five days to reply to customer email inquiries. "If your other communications look warm and friendly and you brand yourself as serviceoriented. Dedication to Service . 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. in terms of traffic and selling. "You are not spending all the promotion money. So be sure you do your homework about what goes into a strong Web site. but your Web sight is impossible to navigate and doesn't have an email response or is just kind of clunky." says Lynch.Online customers have little opportunity to see your brand's dedication to service. 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.
"Answering thousands of questions per month is an enormous challenge for sites offering complex products and services. support staff or other communication tools that will help strengthen the relationship between your brand and customer. end-all of customer service. 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. group director of Jupiter's Site Operation Strategies. This definition clearly brings out that it is not just the buying of goods/services that receives attention in consumer behaviour but. 3. Then follows a process of decision-making for purchase and using the goods. because it gives a clue to the marketers whether his product has been a success or not." One way to solve the email deluge is to take advantage of "auto-acknowledge" software that responds to all incoming requests stating that the question was received and estimates a time frame for how long it will take to respond to the question." says Ken Allard."This 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. especially if they never had a traditional call center. To understand the likes and dislikes of the consumer. These researches try to find out: 75 . This leads to internal and external research. While email is the primary communication tool. extensive consumer research studies are being conducted. Yet companies that delay responses to user questions instantly lose a significant degree of credibility and user loyalty. it is not the be-all. Companies that want to attach a sense of dedication to their brand should think about having a call center. A process of buying starts in the minds of the consumer. evaluating. which leads to the finding of alternatives between products that can be acquired with their relative advantages and disadvantages. the process starts much before the goods have been acquired or bought. and then the post purchase behaviour which is also very important.
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 consumer and his life style are influenced by a number of factors shown all around the consumer. The figures show the consumer life style in the centre of the circle. and all marketing decisions are based on assumptions about consumer behaviour. dynamic. subculture. values. These are culture. multidimensional process. demographic factors. the involvement of the buyer and the risk that is involved in deciding the product/service. reference groups. Fig. social status. 76 . A simplified framework for studying consumer behaviour The process of decision-making varies with the value of the product.
or to the rejection of the product. This may be the problem of creating a cool atmosphere in your home. Consumer is also influenced by the marketing activities and efforts of the marketer. after the sales have been affected. which are consumer’s emotions. and can take care of the problem suitably and adequately.g. For this. Thereafter the purchase is made and the product is used by the consumer. 77 . by a water-cooler. e. personality. First of all. is important for repeat purchase. The figure below gives an idea of the above discussion. This leads to the evaluation of alternatives and a cost benefit-analysis is made to decide which product and brand image will be suitable. For a successful strategy.household and also the internal make up of the consumer. which leads to repeat purchases. by an air-conditioner or. Sales are important and sales are likely to occur if the initial consumer analysis was correct and matches the consumer decision process. rather than looking for new ones. All these factors lead to the formation of attitudes and needs of the consumer. Satisfaction of the consumer. The decision-making process consists of a series of steps which the consumer undergoes. offers the best solution to the problem. It is more profitable to retain existing customers. The marketing strategy is successful if consumers can see a need which a company’s product can solve and. motives of buying. the decision is made to solve a problem of any kind. perception and learning. Position the product according to the customers likes and dislikes. information search is carried out. the marketer must lay emphasis on the product/brand image in the consumer’s mind. to find how the cool atmosphere can be provided. The brand which matches the desired image of a target market sells well. The constant use of the product leads to the satisfaction or dissatisfaction of the consumer.
Fig. Decision Process Fig. Creating Satisfied Customers 78 .
CHAPTER-4 Research Report TITLE: 79 .
To analyze the factors influencing the customers to choose a particular brand of LCD TV. TITLE JUSTIFICATION: The study mainly deals with studying the response of Indian market towards the introduction of LCD TVs. SAMPLE SIZE: 80 . In the present Research data has been collected from 50 dealers. To know the customers view towards LCD TV of different brands. it is impossible to complete the project and reach to any conclusion. RESEARCH METHODOLOGY: Research methodology is considered as the nerve of the project. To formulate the marketing strategy for increasing the sales of LCD TV in the market.To study the “Advent of LCD TVs and their future prospects in India”. research methodology is the way to systematically solve the research problem. which work as a base for drawing conclusion and getting result. Therefore. The project also deals with the future prospects of LCD TVs in India. The Research is Exploratory Research. 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. Without a proper wellorganized research plan. 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. OBJECTIVES OF THE PROJECT: • • • • To analyze the LCD TV Market of North Delhi. The project was based on the survey plan. The main objective of survey was to collect appropriate data.
The accuracy of indications given by the respondents may not be consider adequate. LIMITATIONS OF STUDY • • • • The respondents were limited and cannot be treated as the whole population.50 dealers. SAMPLING METHOD: Percentage Method. The dealers may be biased. Time was the major constraint. METHOD OF DATA COLLECTION: Questionnaire Method has been used. SAMPLING PROCEDURE: Open and Close Ended Questionnaire are used. SOURCE OF INFORMATION: Primary Data is used. SAMPLING TECHNIQUE: Convenient Sampling Method. 81 .
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.
30% 40/42 inches 5. Percentage Share of Different sizes of LCD TVs in the market: Size 19/20 inches Percentage 31.50% 84 . 3.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.20% Share of Different size of LCD TV 26 inches 33% 32 inches 30.
Interpretation: 26 inches LCD TV is most sold in North Delhi with around 33% of the total customers buying this size of LCD TV. 4. 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 .
20 of the total dealers feel that customers buy a product keeping in mind some particular brand. 5. 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 .TV Brand Loyalty Price Mixed Criteria Product Innovation 20 11 18 01 Interpretation: This chart shows that the Indian Customers are Brand Concious.
40% 49. 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 25.80% 87 .80% 24.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. 6.
14042 22 inches Rs. Most common size purchased by Lower Income Group = 20 inches. 23274 88 . 15362 26 inches Rs. 8. Most common size purchased by Middle Income Group = 26 inches. Most common size purchased by Upper Income Group = 32 inches. The price comparison of various Brands of LCD TVs available in the market is as follows: Brand Samsung 19 inches 20 inches Rs. 7.Interpretation: The middle income group is the major buyer of LCD TVs in North Delhi.
13016 Rs. 60426 Rs. 53800 Rs. 29930 Rs. 28320 Rs. 54300 Rs. 13910 Rs. 22600 Rs. 36460 Rs. 24700 40 inches Rs. 22340 Rs. 14200 32 inches Rs. 60100 Rs 13900 Rs. 14943 Rs. 57617 Rs. 9990 Rs. 22529 Rs. 19700 42 inches Rs. 20500 Rs. 28233 Rs. 30562 Rs. 33131 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. 33712 Rs. 33600 Rs. 34500 Rs. 15120 Rs. 29779 Rs. 17800 Rs. 29500 Rs. 27450 Rs. 55785 Rs. 23542 Rs. 12990 Rs. 22000 Rs. 14200 Rs. 54990 89 . 12063 Rs.
91 . Except Haier all other Brands have almost equal price for a 20 inch LCD TV.Interpretation: Hyundai LCD TV is having the least price in the 19 inches range. 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
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.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 10.500:1 8ms 140W 20W(RMS) 500cd/m2 No No No Philips HD ready 2 HDMI 100 Hz 29.000:1 8 ms 160W 20W(RMS) 450cd/m2 No No No Toshiba HD ready 2 HDMI 100 Hz Real Colour Algorithm 10-bit No 4.5 ms 130W 30W(RMS) 500cd/m2 No No No Markson HD ready 1 HDMI --8-bit Yes 10.8 Billion Colours 8-bit No 33. 97 .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.
CHAPTER-6 Observations and Findings 98 .
FM radio. USB playback. Brand Loyalty plays a vital role among Indian customers while buying the LCD TV. Keeping there room size in mind. The competition is only between LG and Samsung for a 22 inches LCD TV. 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. response time and power consumption are the primary specifications about which the customers ask for. 99 . Samsung has made a good name in case of sales of CRT TVs as well. HDMI ports. Bluetooth connectivity and hard drive are the secondary features which the customers want to have in the LCD TV. Markson is offering its LCD TVs at a very cheap rate in comparison with all other brands available in the market. 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. 26 inch LCD TV is most preferred by the Indian customers. contrast ratio. Price reduction and awareness campaigns can help a company to increase the demand of LCD TVs in the market.Observations and Findings • • • • • • • • • • • • The market share of different LCD TVs indicate that Samsung is emerging as a great Brand in the Indian market.
CHAPTER-7 Conclusion and Strategy 100 .
2 Proposed Marketing Strategy The following changes in the product features can help Markson to improve its LCD TV sale in the market. 2. Motion Flow and colour gamut specifications need to be displayed.000:1. And a proper marketing strategy can help a company to take the maximum advantage of this emerging trend. 3. Increase the contrast ratio to about 35. 101 . Response time needs to be decreased to 4-6 ms. We need to have more distributors in North Delhi for LCD TVs. In classroom lectures. Bluetooth. 6. 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. The distributors need to be trained on how to market our LCD TVs. 7. The following points need to be considered while deciding on the distribution network: 1. Branding strategy and study of Consumer Behaviour can take a company to the new heights. 4. The prospects of LCD TV market are quite bright in the near future.1 Conclusion This project helped me tremendously in knowing how marketing activities are carried out in a real situation. Our old distributors do not have Markson LCD TV in their show rooms to sell. Increase its HDMI interface ports to two or three in number. 1. Launch 32 inches and 42 inches LCD TV with high resolution and Full HD specification. FM radio and inbuilt Hard Drive option can also be added. The proper selection of the marketing mix. 3. 7. 5. 2.7.
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. As I surveyed through the market I found out that all dealers are expecting that prices of LCD TVs will continue to crash till Diwali so I think that we should reduce the prices of LCD TVs so as to remain competitive. I suggest that the company should launch a 22 inches LCD TV in market. Place the company ad banners at various metro stations and also in the metros as well. I think that a 22 inches LCD TV can cater for both the income groups well. So. 5. No need to have actor/actress as a brand ambassador. 3. Financial Schemes on LCD TVs can also help us to increase the sale of LCD TV as we do not have to reduce our profits and less cash flow will be needed by the customer. Now coming down to promoting. Use fundamental colours like Black. 4.4. So I think that following points should be considered for advertising LCD TVs: 1. Try to sponsor events such as annual functions of the companies and large gatherings. Red and Blue while preparing the pamphlets and brochure. 2. A combo offer or a discount offer for old colour TV can be of great help to increase the sale of LCD TV. 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. So. all of us know that advertising plays a vital role in creating awareness among the customers about the product. 102 .
103 . Brand Logo: I think that we need to change our Brand Logo from British Flag to something else. 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. It can be done in the following way: 1. So it is very important to develop the Brand Image in the market. I also analyzed that Brand Loyalty is the main criteria among customers for choosing a particular brand of LCD TV.
104 . B) Making life pleasant and enjoyable. Two such slogans which can help the company are as follows: A) Selling satisfaction not products. 4.Metallic M represents that our effect is everlasting. so choose a brand ambassador who represents the Image of Young India. C) Bringing colours of life together. It should be such that the customer feels that he is a part of the process. This age group holds the maximum buying capacity. Brand Personality: We should select a brand personality as such which hits the minds of the Young India (25-40 years of age group). It gives a signal of good infrastructure of the company. Brand Slogan: Brand Slogan tells that what the company is aiming for. A Free Toll number also gives an indication of the brand. 2. 3. 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.
CHAPTER-8 BIBLOGRAPHY 105 .
en.com/npps/story.htm www.com www.in/pdf/surveys_reports/consumer-durables-sector.cci.rncos.markson.in 106 .emsnow.com/Report/CP13_toc.cfm?id=27593 www. http://www.kioskea.pdf www.References: Marketing Management by Philip Kotler.net http://www.scribd.com www.wikipedia.indianmba.com www.
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