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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.
microwave and washing machines have low penetration in the country. 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. like refrigerators. 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. Keeping the above fact in mind. The industry has been witnessing significant growth in recent years due to several factors. The response format was of a mixed variety which also helped in better determination of outcomes. such as retail boom. 4 . But still. To find out the reasons influencing the minds of the common man a marketing research was carried out by me. representing vast room for future growth. This is attracting many foreign majors to the country. on the back of rapid economic growth. 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. growing disposable income and availability of easy finance schemes. The exploratory research was carried out with 50 respondents with a set of 20 open and close ended questions. has made the country’s consumer electronics industry highly dynamic. the consumer electronics goods. The exploratory findings helped me in determining the key factors which needed to be further explored for making the marketing strategy for my company. Each of the questions was designed to satisfy at least one of the secondary objectives of the research.
2 2.2 1.4 3 3.3 1.1 3.3 3.CONTENTS Chapter No 1 S.4 4 5 6 7 7.6 2 2.5 1.No 1.3 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 .2 3.1 2.1 1.1 7.4 1.
witnessing a phenomenal growth. These changes began nearly two decades ago and have resulted in an avalanche of state of the art electronic devices in the 6 . portable media players and educational toys are in a state of constant flux. Consumer electronics appliances such as digital televisions. The convergence of digital-based audio. the consumer electronics industry is in the midst of a new wave of change. In recent years. products and markets. It is ushering in a dawn of convergence.1 Worldwide Consumer Electronics Industry The consumer electronics industry is a global business. of technologies.CHAPTER . video and information technology is a major reason.1 CONSUMER ELECTRONICS INDUSTRY 1.
“Liquid crystal displays will grow slower in 2009 but will still achieve double digit unit and 7 . Global consumer electronic sales are expected to top $724 billion this year. The CEA said that although mobile phone growth was expected to slow "the macro trend of work.3%. play and communicate anywhere. Digitalization transformed the consumer electronics sector.market.1 percent this year over last year to 1. Digitalization. While sales grew 13. personal media players. according to the Consumer Electronics Association. the CEA forecast. Mobile phones accounted for 26. growing by just 2." Television sales are expected to grow by 2. DVD player/recorder. making its way into the family living room. HDTV’s with VGA connections and SD/MMC card slots. It paved the way for digital devices such as camcorders. Microsoft-based Media Centre PCs have pushed the two industries even closer together than before. incorporating both digital visual and digital MP3 capabilities. still camera. anytime will continue to drive innovation and CE sales. delivering new and exciting entertainment products that have changed the way we live.5 percent and 9.2 billion units. in-home or in-car consumer electronic items with multiple functions has increased tremendously. this year’s growth will only be 4. down from the 10. miniaturization and mobility are the key elements for modern consumer electronic products. Still with the economy in a downturn. The computer industry has also benefited.7 percent of total revenue last year but sales are expected to slow in 2009.4 percent in 2007. Miniaturization also accelerates the growth of the consumer electronics industry.1 percent growth rates of the previous two years. computer monitor and LCD TV.7% to $694 billion in 2008. consumer confidence at lows and consumer electronics companies suffering. any growth is sure to be welcome. The demand for a multitude of portable.6 percent in 2009 to 232 million units. The slowdown in 2009 is expected to affect products virtually across the board. from mobile phones to televisions to computers. Mobile phone sales grew by 13 percent in 2008 and by 15. It has also witnessed the emergence of mobile telecommunications technology.
"Desktops will experience declines in both units and revenue.7 percent." The CEA's 2009 outlook for computer sales is somewhat better. The CEA said MP3/digital media players were expected to generate "strong sales" in 2009 along with portable navigation GPS units. packaging. The trade association said the trend towards "no strings attached" wireless devices would accelerate along with increased touch screen and voice activation technology. Blu-ray DVD sales were expected to nearly double in both unit sales and revenue in 2009. "Unit sales of portable navigation grew 55 percent in 2008 and are expected to grow another 22 percent in 2009. Consumer electronics companies producing computers." the CEA said. DVD players and other household electronics face the same challenges as other consumer goods 8 ." The ratio of laptop PC sales to desktop PC sales is expected to continue to widen this year with 63 percent of the computers sold in 2009 expected to be laptops. the CEA said.8 percent growth of last year. Fundamentally. Companies that are capable of change and those that develop branding will be most successful. Russia. As for trends to watch this year.2 percent over 2008 but still a significant drop from the 17.It said the game console market is expected to grow by 5. the ratio of desktop PC unit sales to laptop PC unit sales was 58 percent to 42 percent. the changes in the consumer electronics industry are not being driven by product evolution.1 percent in revenue in 2009. with growth forecast at 8. "Laptop PCs are expected to continue to generate double digit increases in units and revenue in 2009. It said that in 2005. with North America accounting for the largest percentage of Blu-ray sales followed by Western Europe and Japan. the CEA said. televisions.4 percent in units and 1. but by fluctuations in the industry's business models. "Plasma displays are forecast to achieve positive unit growth and negative revenue growth.revenue growth worldwide. energy efficiency and recycling potential." the CEA said." the CEA said. the trade association said to expect products that were environmentally friendly in terms of the materials used. 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. The CEA said emerging powers China.
on the back of rapid economic growth. Increased local manufacturing. The Asia Pacific region is the market leader wielding the biggest chunk of the market. pricing and promotions management even more challenging. 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. 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.2 Indian Consumer Electronics Industry India has an increasingly affluent middle class population that. 9 . has made the country’s consumer electronics industry highly dynamic. 4. 1. Korean companies such as Samsung and LG are all trying to join the Japanese bandwagon. differentiation and flexibility are critical to a company’s survival in the consumer electronics market. Expanding distribution networks. The lifecycle of consumer electronics products is shrinking along with severe price deflation. 3. closely followed by Europe. Panasonic and Matsushita are all owned by these Japanese manufacturers. Samsung can claim to be the world's fastest growing electronic company. The growth is aided by a multitude of factors.companies. Growing consumer confidence due to rising disposable incomes. a factor that makes demand. Japanese companies have captured the consumer electronics market. Innovation. World famous brands such as Sony. 2. including: 1.
over the years.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. Products like air conditioners are no longer perceived as luxury products. rural electrification programs have always lagged behind schedule. changing lifestyles.8 11. increasing consumer awareness and introduction of new models. 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.Growth of Consumer Electronics Production in India 18 16 14 12 10 8 6 4 2 0 15. This has not favoured durable companies till now. especially the rural electrification program. double-income families.9 12. demand for consumer durables has increased with rising income levels. Given the government's inclination to cut back spending.2 13. One of the critical factors those influences durable demand is the government spending on infrastructure. 10 .7 16. Any incremental spending in infrastructure and electrification programs could spur growth of the industry. availability of credit.
The consumer electronics market is one of the largest segments in the electronics industry in India.89 billion) in 2006. 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. With a market size of Rs. especially the Korean chaebols.0 per cent from Rs. Companies are focusing on customizing products to suit Indian tastes. 897.13 crore ($3. catering to a population of more than 100 crore people. thereby incorporating specific design elements into their products. 931.5 billion) in 2007. companies are trying to identify customer requirements.26. and for few companies.15. For example.59 billion) by 2011. thereby creating a niche for themselves. the consumer electronics industry in India is poised for strong growth in the years to come. The inputs from this research are determining product attributes and pricing and accordingly are achieving better acceptance among consumers. By conducting consumer research.13 crore ($6.18. ISuppli Corp. Most players in the consumer-electronics industry have introduced products in the FPD segment. predicts the Indian audio/video consumer electronics industry will grow to Rs. LG in 2006 launched a range of TVs from 21 inches to 29 inches in size that were designed based on the company's research on consumer preferences for television 11 . rising at a Compound Annual Growth Rate (CAGR) of 10. FPD remains a focus area. 390 crore ($4. Several companies are conducting market research in order to understand the psyche of an Indian consumer.
the trend is gradually changing. Furthermore. they are expected to show a preference for branded products. The move has positively impacted sales for companies opting for rural expansion. such instances are few and far between. such as Flextronics' deal with in Silica for the development of SOC devices. This is reflected by the fact that established players are reporting years to come. EMS and ODM companies in India have been associated with several design companies. rural consumers have been inclined to buy these products. Currently. ISuppli expects domestic manufacturing to be a key characteristic of this growth in the 12 . higher sales of products in rural areas. Due to the lower prices of unbranded products. although they often have poor quality. This is in alignment with India figuring into the plans of several companies that want to cater to the domestic and export markets. However. companies are expanding their distribution networks in these areas. some local partnerships also are appearing. In order to tap semi-urban and rural demand. Domestic consumption is reaching significant size to trigger manufacturing in the electronics sector. 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 government has been focusing increasingly on developing the manufacturing sector by developing infrastructure.sets. these associations will become more common. As the local market gains size. rural consumers have not been as brandconscious as their urban counterparts. India also is assuming a significant place in the global plans of several major electronics manufacturers. although such relationships represent an extension of their global relationships. However. Although electronics production has remained a miniscule portion of overall Indian manufacturing for a long time. rationalizing duties and creating export-promotion zones. thereby positioning it also as an export base. As the awareness among rural consumers rises.
Washing Machines (Semi-automatic & Fully Automatic) . The report thoroughly analyzes the historic performance and future prospects.Television . offering 4year industry forecast. 'Booming Consumer Electronics Market in India” offers extensive research on various consumer electronics products that are broadly classified as home appliances. underlining the future potential areas and key issues crucial for the industry development. of following consumer electronics products: .3 Trends in Indian Consumer Electronics Industry RNCOS research report finds that since the penetration of several products like TVs and refrigerators are reaching saturation in the urban areas.PCs (Desktop & Notebook) 13 .Microwave Oven .Air Conditioner . the markets for these products are shifting to the semi-urban and rural areas. It provides an insight into the emerging and potential future trend in all the categories and highlights the key strategies that need to be worked upon to get success in the highly competitive industry. This analytical research thoroughly evaluates the Indian consumer electronics industry.Refrigerator (Frost-free & Direct Cool) .Digital Camera & Camcorder .Set-top Box . mobile handsets.MP3 Players . audio/video appliances.Mobile Handsets .1. It briefly discusses about the current and emerging trends in the industry. and PC market.
. . . and the share of FPTV is projected to increase at robust rate in near future.Driven by young population.The market for televisions in India is changing rapidly from the conventional CRT technology to Flat Panel Display Televisions (FPTV). demand for MP3 players and digital video appliances are anticipated to surge at double-digit rate in near future. . . the Indian consumer electronics industry is forecasted to grow at a rapid rate of 10% to 12% in the coming few years. changing lifestyle and rapid urbanization. the split between CRT and FPTV is around 97% and 3% respectively.Propelled by growing middle class population.The low penetration level of consumer electronics goods coupled with increasing preference for comfort and luxurious goods are widely attracting the foreign as well as domestic players to the industry. are anticipated to drive the Indian refrigerators market over the forecast period.Volume sales of washing machine will be driven by growth in fully automatic category during 2008-09 to 2011-12.Key Research Findings: . . certainly growing at a much faster pace than the direct-cool category. Currently.The AC market in India is projected to grow at 30% to 35% for the coming few years. 14 .Frost-free refrigerator sales.
today enjoys a sales turnover of over US$ 1 billion in just a decade of operations in the country. with around 18% of its employees working in Research & Development. San Francisco. Samsung India has its headquartered in New Delhi and has a network of 19 Branch Offices located all over the country. 375 crores. The Samsung manufacturing complex housing manufacturing facilities for Colour Televisions. Estate. Today.000 employees worldwide it is one of the major giants in the consumer durable 15 . Pondicherry and Pune.1. Kitchen Aid. near Delhi.4 Competition Overview Samsung India Samsung India commenced its operations in India in December 1995. LGE started manufacturing radios. Samsung ‘Made in India’ products like Colour Televisions. The parent company is headquartered at Benton Harbor. The company owns three state-of-the-art manufacturing facilities at Faridabad. 1958 (As a private Company) and in 1959. operating 77 subsidiaries around the world with over 72. Roper. Whirlpool is the most recognized brand in home appliances in India and holds a market share of over 25%. Los Angeles. Bauknecht. USA with a global presence in over 170 countries and manufacturing operation in 13 countries with 11 major brand names such as Whirlpool. Refrigerators and Washing Machines is located at Noida.1. Samsung India currently employs over 1600 employees. CIS and SAARC countries from its Noida manufacturing complex. Shanghai and Romen. Colour Monitors. Samsung design centers are located in London. Colour Monitors and Refrigerators are being exported to Middle East. Michigan. LG India LG Electronics was established on October 1. In the year ending in March '06. 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. According to IMRB surveys Whirlpool enjoys the status of the single largest refrigerator and second largest washing machine brand in India. the annual turnover of the company for its Indian enterprise was Rs. Tokyo. Laden and Ignis.
000 million (US$ 1. Nairobi (Kenya). The Company has Representative Offices in Sharjah (UAE). amounted to about Rs. Sony has its distribution network comprising of over 7000 channel partners. 1932. more than 2. 2006. established its India operations in November 1994. the company was converted into a public limited company in the same year. In India. DVD players.000 Retail Outlets. Colombo (Sri Lanka). the Company was incorporated with limited liability on March 3. It's global leading products include residential air conditioners. The combined Sales during the Fiscal Year ended March 31. and more than 18. The company has as many as 27 R & D centers and 5 design centers. CDMA handsets. 215 Sony World and Sony Exclusive outlets and 21 direct branch locations. 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. Sony India Sony Corporation. 58. The company also has presence across the country with 21 company owned and 172 authorized service centers. 1913.270 million).a leading manufacturer of 16 . home theatre systems and optical storage systems. Toshiba had a presence in India since 1985 and was represented in India through their Liaison Office. under the Indian Companies Act. Godrej India Godrej India was established in 1897. Japan . The company was entered into a joint venture with Sharp Corporation. The name was changed to Kalyani Sharp India in 1986. The Company is one of the largest privately-held diversified industrial corporations in India.domain worldwide. Riyadh (Saudi Arabia) and Guangzhou (China-PRC). The Company has a network of 38 Company-owned Retail Stores.200 Wholesale Dealers. Sharp India Ltd Sharp India ltd was incorporated in 1985 as Kalyani Telecommunications and Electronics Pvt Ltd. Japan.
17 . The company manufactures consumer electronic goods such as TVs. LCD TVs. The company was accredited with the ISO-9001 certification in the month of February. Air Conditioning & Refrigeration Equipment to International Procurement of software.consumer electronic products to manufacture VCRs/VCPs/VTDMs. VCRs. Industrial Components & Equipment. and an expedited import-export process. It is now possible to import duty-free all components and raw materials manufacture products and export it. Smart Boards and DVD Camcorders. LCD Projectors. and its products are used in 133 countries. Customs duty on Information Technology Agreement (ITA-1) items (217 items) has been abolished from March 2005. no duties on imported components or capital equipment. business tax incentives. EHTP (Electronic Hardware Technology Park) is an initiative to provide benefits to companies that are replacing certain imports with local manufacturing. The government. Sharp has a production base in 26 countries with 33 plants. Some of HIL’s product range includes Semiconductors and Display Components. EHTP benefits include export credits. All goods required in the manufacture of ITA-1 items are exempt from customs duty. 1. It also supports the sale of Plasma TVs. VCPs and audio products. The products were sold under the Optonica brand name.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. 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. 2001. materials and components. in an attempt to encourage manufacture of electronics in India has changed the tariff structure significantly.
creation of a new Trademark Act. a new Designs Act and amendments to the Patents Act show India’s continued effort to protect IPR. creation of a new Trademark Act. Customs duty on specified capital goods used for manufacture of electronic goods have been abolished. 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. the member nations are asked to modify their existing laws. The Indian Copyright Act 1957 was amended in 1999. Excise duty on computers has been removed. The Industrial Design Act 1911 was effectively replaced by The Design Act 2000. New acts have also been enacted to cover semiconductors and layout designs which will be of considerable importance to the electronic industry. a new Designs Act and amendments to the Patents Act show India’s desire to change and adapt..Customs duty on specified raw materials / inputs used for manufacture of electronic components or optical fibers / cables has been removed. The Government of India has developed a robust IP act to facilitate innovation. amended most of its IPR Acts and Rules to conform to the said Agreement. Several amendments to the Copyright Act. The country has already made several changes in its IP acts over the years. growth and development. and the Layout Design of Semiconductor integrated Circuit Act 2000 was enacted. The agreement on TRIPs takes care of the intellectual property rights by enforcing the patent rights. and the protection of industrial designs. 18 . geographical indications. floppy disc drives and CD ROM drives continue to be exempt from excise duty. Accordingly. the patent Act 1970 was amended in 1999 & 2003 and Trademarks and Merchandise Marks Act 1959 was overtaken by a new Trademark Act 1999. layout designs of integrated circuits and undisclosed information. hard disc drives. In the current WTO regime. trade marks. Several amendments to the Copyright Act. copy rights and related rights. Microprocessor. India is a party to the “Trade Related Aspects of the Intellectual Properties (TRIPs) Agreement” and has accordingly.
The ITA-1 would result in intensifying competition as more imported products will be easily available at lower prices. which was 9. etc. Free Trade Agreement WTO regime which came in force in 2005. During the same period the FDI inflow for electrical equipment (including computer software and electronics) was US$ 3. 2. free of duty. results in zero customs duty on imports of all telecom equipment. 217 IT/electronic items were covered under the Information Technology Agreement (ITA) of the WTO for complete customs tariff elimination by 2005. raw materials and components. Foreign Investment Policy: FDI Foreign investment up to 100 per cent is allowed in Indian electronics industry set up exclusively for exports. several items were already at NIL customs duty.94 per cent of the total foreign direct investment (FDI) approved. spares and consumables. becomes difficult. Enforcement of the TRIPs agreement makes the production of any product possible either through internal innovation or through formal transfer of technologies.29 billion. The FDI approval for electrical equipment (including computer software and electronics) from January 1991 to March 2004 was US$ 7. their entire requirements of capital goods.Once these laws come into force. unauthorized use of the patented innovations. 19 . The consumer electronics and durables sector is expected to continue to benefit from supportive policies and become globally competitive. trade marks. IT/electronics was the first sector in India to face complete customs tariff elimination. In fact. Deemed export benefits are available to suppliers of these goods from the Domestic Tariff Area (DTA). Out of these 217 items. office equipment etc. Regulations 1. The units set up under these programs are bonded factories eligible to import.32 billion. 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.
Resident Indians (NRIs) including Overseas Corporate Bodies (OCBs). Approval for setting up units in Export Processing Zones (EPZs) is given by the Board of Approvals in the Ministry of Commerce. predominantly owned by them. Department of Information Technology. 4. components and raw materials or the engagement of foreign technicians for short duration does not require any additional approvals. Approval of Ministry of Home Affairs is not needed for hiring foreign nationals holding valid employment visa. FDI and foreign technology collaborations are approved through automatic route by the Reserve Bank of India 20 . to complement and supplement domestic investment. Proposals involving foreign direct investment not covered under the automatic route are considered by the Foreign Investment Promotion Board (FIPB). 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. Foreign technology induction is encouraged through FDI and foreign technology collaboration agreements. the import of capital goods.3. Procedure for approval Once the investment in equity has been approved. Approval for setting up export-oriented units (EOUs) outside the zones is given by the Ministry of Industry. FDI/ Foreign Technology Collaboration Agreement The government facilitates FDI and investment from Non.
000 of the around 40. at least a large proportion of its constituents. etc. Declining margins for many players 2. This India. At its present structure the total tax incidence in India even now stands at around 25-30 per cent.) have hindered the reach of the distribution network in India 4. Low affordability level of consumer products among the rural masses 21 . whereas the corresponding tariffs in other Asian countries are between 7 and 17 percent. Inverted duty structure 3. but also spend on transportation for moving inventory. which are touted as having the largest distribution network in the country. Regular power supply is imperative for any consumer electronics product.000 to 18.6 Challenges and Opportunities The Challenges Heavy taxation in the country is one of the challenges for the players. These include: 1. About 65 per cent of Indian population that lives in its villages still remains relevant for some consumer durables companies. have a direct presence only in 15. Expansion of distribution reach: Infrastructural bottlenecks (roads. Also. Poor infrastructure is another reason that seems to have held back the industry. still buys black and white TVs and doesn't know what flat screens are. Creating awareness about new technologies and products 5. manpower. Companies not only have to set up the basic infrastructure in terms of office space. Even LG and Samsung. 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. power.1. But that remains a major hiccup in India.000 retail outlets (for consumer durables) in the country.
these challenges are gradually being addressed. 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. growth in disposable income. leading to increased expenses due to transportation. and rise in temperatures. Purchase necessarily done only during the harvest. While the consumer durables market is facing a slowdown due to saturation in the urban market. after sales services to suit the infrastructure and the existing amenities like electricity. Opportunities The rising rate of growth of GDP. 22 . rural consumers purchase their durables from the nearest towns. improving lifestyles. iSuppli believes that India will continue to grow as an important market for the global consumer electronics industry. And looking ahead. festive and wedding seasons — April to June and October to November in North India and October to February in the South. believed to be months `good for buying’. low running cost. Currently. should be converted to routine regular feature from the seasonal character. rural consumers should be provided with easily payable consumer finance schemes and basic services.However. power availability. The future of India's market is indeed bright. 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.
1 Introduction 23 .CHAPTER-2 Company Profile 2.
These features are not available in any other brand in the country. the company has been able to make a pan India presence through a strong network of more than 100 Distributors. The company has launched state-of-the-art wall mountable DVD Players with auto-sliding door facility. MARKSON is the long cherished dream of Mr.SNR Electronics Ltd. a Himachal Pradesh based firm. DVD Players. TFT Screens. Colour TVs. Laptops. The company started operation in early 2008 and in a short period of one year only. Set-top Boxes and Desktop computers. USB Playability with facility to mount DVD Players on the wall to give a unique look. The product mix includes LCD TVs. Washing Machines and Microwave Ovens.P. Sunil Gupta. The company is headed by highly experienced team of professionals from the electronics industry who have hands-down experience in the electronics industry and enjoy a high degree of honesty and reliability among the trade. Air-Conditioners. Markson products are produced in most modern and state-of-the-art plant at Haridwar. Markson brand was launched in India in technical collaboration with the UK based company for designing and technical support of their products. well supported by sales and service professionals of the company. The company’s products range has been widely accepted meeting the international 24 . launched the “Markson” brand of consumer electronics in January 2008. Parwanoo & Baddi in U. 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. Home Theatre Systems. The company has also lined up Mobile Phones. the company is in the process of opening more than 100 service outlets across the country. which will be launched very shortly. After-sales-service being the mantra of the brand.K & H.
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.2 Vision To reinvent the market trend by bringing in state-of-the-art quality products to consumers as they have always wanted it. 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. 2. Sunil Gupta CMD. AirConditioners. DVD players. Gupta is the promoter of Markson brand in India with focus on manufacturing & marketing of electronic goods like LCD TV.3 Key People Mr. The company. For the last 26 years. Gupta has a hands down experience in electronics trade. Desktop computers.standards in quality and packaging. The LCD TV’s are having unique features like USB Playback and MMS Playback. Mr. He also plans to put more home products into the market by the end of the year like Washing Machines. in order to facilitate and expedite the distribution of Markson’s products in India. Microwave Ovens and Mobile Phone sets. BETA (Bhagirath Electronics Traders Association) and 25 . Mr. Markson Mr. He has held coveted positions in numerous electronics associations like. He also plans to venture into the Hospitality sector around the same time. and it’s your right! 2. his emphasis and special focus has been on trading of electronic components and assemblies. The Markson Computer TFT Screens have unique features and inbuilt speakers and with the aid of external TV Tuner can substitute a LCD TV. Sunil Gupta is the CMD of Markson in India. Color TV. We at Markson believe that high quality innovation isn’t a privilege anymore. Every single product made at Markson is an epitome of precision and impeccable quality. Home theatre systems. it’s an asset. Laptops. TFT screen & Set-top boxes. has opened 13 branches at state level along with extensive warehousing facilities at the branches.
has an impressive experience of 35 years in the electronics industry in international trading coupled with domestic marketing and production related factory processes. Gupta has done a lot of social service for the needy. Mr. He has also been actively involved in construction of several dharamshalas for the needy. CEAMA. Markson Sunil Wadhwani.4 Future Goals Markson targets revenue of Rs 400 crore by the end of this fiscal and will increase it to Rs 1. He has been an active member of several important electronic associations in India. 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. IIT. He received his B. Wadhwani has spent considerable time in understanding export and import and their intricate procedures under the Foreign Trade Law. Sunil Wadhwani CEO. namely.000 crore by 2012 with the introduction of several low cost products.Tech. ELCINA. Being a philanthropist to the core. and local Customs Advisory Committee in Delhi and Central Excise Committee in Noida.Central Radio & Electronics Merchant Association. in Mechanical Engineering from the coveted technical institute. Mr. The initial investment made was Rs 100 crore. Wadhwani has travelled extensively all over the world. Mr. Delhi and has been actively engaged in work since then. helping them in whatever possible way. and also for the export of quality electronic goods from India keeping in view the international standard. the CEO of Markson. a council promoted by the Ministry of Information Technology. solely for the procurement of a spectrum of electronic components and goods. Mr. 26 . He also has a sound knowledge of Customs and Central Excise Procedures prescribed under the Customs Act and Central Excise Act. He has also been an active member of ESC. 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. 2.
refrigerators and microwave ovens in the next two months. The company. will start registering profit after two years of this venture 27 . The company plans to launch washing machine. that has an initial advertising budget of Rs five crore. a member of Consumer Electronics and Appliances Manufacturer Association (CEAMA). will increase it to Rs 20 crore in the near future. the company targets to capture five cent of the television market in the country by the end of this fiscal.With 2. The company.000 dealers and distributors across the country. air-conditioners.
3 Essential Theory 3.CHAPTER.1 Liquid Crystal Display Television Liquid-crystal display televisions (LCD TV) are color television sets that use LCD technology to produce images. LCD televisions are thinner and lighter than CRTs of 28 .
The particular direction of the alignment of a pneumatic liquid crystal can be set by placing it in contact with an alignment layer or director. the individual colors blend together to produce a single spot of color. On the bottom and top of the shutter are polarizer plates set at (typically) right angles. Description Basic LCD Concepts: LCD televisions produce a colored image by selectively filtering a white light. although some displays use white or colored LEDs instead. This forces the layers to align themselves in two directions. also show an alignment effect between the layers. and are available in much larger sizes as well. Liquid crystals encompass a wide range of (typically) rod-shaped polymers that naturally form into thin layers. LCD shutters consist of a stack of three primary elements. Some of these. as opposed to the more random alignment of a normal liquid. and the layers above will subsequently align themselves with the layers below. Each shutter is paired with a colored filter to remove all but the red. When placed on a director. The 29 . this effect is utilized by using two directors arranged at right angles and placed close together with the liquid crystal between them. and as manufacturing costs fell their eventual dominance of the television market was all but guaranteed. open and close to allow a metered amount of the white light through. which is essentially a material with microscopic groves in it. Normally light cannot travel through a pair of polarizers arranged in this fashion. Each shutter–filter pair forms a single sub-pixel. The sub-pixels are so small that when the display is viewed from even a short distance. The light is typically provided by a series of cold cathode fluorescent lamps (CCFLs) at the back of the screen. the bulk material taking on the director's alignment. The shade of color is controlled by changing the relative intensity of the light passing through the sub-pixels. a pixel.similar display size. the pneumatic liquid crystals. Millions of individual LCD shutters arranged in a grid. This combination of features made LCDs more practical than CRTs for many roles. In the case of an LCD. and the display would be black. the layer in contact will align itself with the grooves. green or blue (RGB) portion of the light from the original white source. creating a twisted structure with each layer aligned at a slightly different angle to the ones on either side.
Addressing sub-pixels: In order to address a single shutter on the display. but are more difficult to construct and have slightly slower response times. One side has horizontal stripes that form rows. When this happens. To turn a shutter off. In general. an electrical voltage is applied across it from front to back.polarizers also carry the directors to create the twisted structure aligned with the polarizers on either side. Vertical Alignment (VA. which increases the force to re-align themselves with the directors when the field is turned off. In-Plane Switching displays (IPS and S-IPS) offer wider viewing angles and better color reproduction. LCDs are normally transparent. Several other variations and modifications have been used in order to improve performance in certain applications. S-PVA and MVA) offer higher contrast ratios and good response times. the cells are placed under pressure. some of the field always leaks out into the surrounding shutters. LCDs use electrodes made of a transparent conductor. IPS displays are used primarily for computer monitors. This allows the transparency or opacity of the shutter to be accurately controlled. it will naturally follow the liquid crystal's twist. the rod-shaped molecules align themselves with the electric field instead of the directors. and can no longer pass through the front polarizer. the amount of remaining twist can be finely selected. the other has vertical stripes that form columns. a field will be generated at the point where they cross. By supplying voltage to one row and one column. Since a metal electrode would be opaque. typically indium tin oxide. but suffer from color shifting when viewed from the side. exiting the front of the liquid crystal having been rotated through the correct angle that allows it to pass through the front polarizer. all of these displays work in a similar fashion by controlling the polarization of the light source. destroying the twisted structure. a series of electrodes is deposited on the plates on either side of the liquid crystal. Liquid crystals 30 . In order to improve switching time. The light no longer changes polarization as it flows through the liquid crystal. Since addressing a single shutter requires power to be supplied to an entire row and column. As the light flows out of the rear polarizer. By controlling the voltage applied across the crystal.
The capacitor is charged up until it holds the correct control voltage. Not only does this allow for very accurate control over the shutters.are quite sensitive. and the switching speed was far too slow to use as a useful television display. each shutter is paired with a thin-film transistor that switches on in response to widely separated voltage levels. Instead of powering both electrodes. and then the director. Another problem in early LCD systems was the voltages needed to set the shutters to a particular twist was very low. say 0 and +5 volts. the glass sheets can be replaced with plastic. one set. The rows and columns are addressed as before. and even small amounts of leaked field will cause some level of switching to occur. the active matrix components and addressing electrodes. On the rear. since the capacitor can be filled or drained quickly. typically the front. but the transistors ensure that only the single shutter at the crossing point is addressed. Building a display: A typical shutter assembly consists of a sandwich of several layers deposited on two thin glass sheets forming the front and back of the display. so pulse code modulation is used to accurately control the overall flow. Using a multistep construction process. The 31 . the glass sheet. is attached to a common ground. slowly leaking this through the crystal to the common ground. but the response time of the shutter is dramatically improved as well. The current is very fast and not suitable for fine control of the resulting store charge. The rear sheet starts with a polarizing film. A new addressing line. but that voltage was too low to make the crystals realign with reasonable performance. a constant and relatively high amount of charge flows from the source line through the transistor and into an associated capacitor. The front sheet is similar. modern LCDs use an active matrix design. is added as a separate switch for the transistors. For smaller display sizes (under 30 inches). Even scrolling text often rendered as an unreadable blur. both sheets can be produced on the same assembly line. like a mouse cursor on a computer screen. This partial switching of the surrounding shutters blurs the resulting image. This resulted in slow response times and led to easily visible "ghosting" on these displays on fast-moving images. When switched on. any leaked field is too small to switch the surrounding transistors. but lacks the active matrix components. replacing those with the patterned color filters. the gate line. In order to attack these problems.
Since the electrons are easily deflected by gas molecules. The backlight for small sets can be provided by a single lamp using a diffuser or frosted mirror to spread out the light. which requires ever-thicker glass. Comparison Packaging: In a CRT the electron beam is produced by heating a metal filament. and bright and dark spots are not uncommon. LCD panels. The critical step in the manufacturing process is the deposition of the active matrix components. but this is arranged in cylinders which are naturally stronger than large flat plates. the shutter assembly is combined with control electronics and backlight. This limits practical CRTs to sizes around 30 inches. the entire tube has to be held in vacuum. which renders those pixels on the screen "always on". Achieving even lighting over the front of an entire display remains a challenge. which is why the back of a CRT-based television is hot. the screen has to be discarded. there is a small amount of vacuum in sets using CCFL backlights. The lack of vacuum in an LCD television is one of its advantages. The number of discarded panels has a strong effect on the price of the resulting television sets. but for larger displays a single lamp is not bright enough and the rear surface is instead covered with a number of separate lamps.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. Removing the need for heavy glass faces allows LCDs to be much lighter than other technologies. and aimed at the proper location on the screen using electromagnets. and televisions larger than this had to turn to other technologies like rearprojection. The atmospheric force on the front face of the tube grows with the area. If there are enough broken pixels. like other flat panel 32 . These have a relatively high failure rate. which "boils" electrons off its surface. and the major downward fall in pricing between 2006 and 2008 was due mostly to improved processes. The majority of the power budget of a CRT goes into heating the filament. To produce a complete television. The electrons are then accelerated and focused in an electron gun. displays up to 40 inches were produced but weighed several hundred pounds.
but improvements. In early sets from the 1950s the angle was often as small as 35 degrees off-axis. or at least wide horizontal bands of it. As a result. on average. more than would be required to light an entire house with the same technology. late in their evolution. To start with. you can see that a good portion of the screen area is covered by the cell structure around the shutters. in theory. This allowed LCDs to compete directly with most in-home projection television sets. are also much thinner than CRTs. only 8 to 10% of the light being generated at the back of the set reaches the viewer. with production yields being the primary constraint. to control the color and luminance of a pixel as a whole. see below).displays. like the 33 . the rear polarizer filters out over half of the original unpolarized light. even the best CRTs are much deeper than LCDs. In spite of using highly efficient CCFLs. allowed that to be dramatically improved and. folded. Modern LCD sets have attempted to address the power use through a process known as "dynamic lighting" (originally introduced for other reasons. the electron gun has to be located some distance from the front face of the television. LCD televisions end up with overall power usage similar to a CRT of the same size. the light has to be further absorbed in the shutters. each sub-pixel's color filter removes the majority of what is left to leave only the desired color. This system examines the image to find areas that are darker. because the vast majority of light that is being produced at the back of the screen is blocked before it reaches the viewer. and reduces the backlighting in those areas. CCFLs are long cylinders that run the length of the screen. and 65" sets are now widely available. then 52". This makes the technique suitable only for particular types of images. After that. Since the CRT can only bend the electron beam through a critical angle while still maintaining focus. to 42". Nevertheless. so this change can only be used to control the brightness of the screen as a whole. As yields increased. Finally. from 14 to 30". most sets use several hundred watts of power. be built at any size. common LCD screen sizes grew. LCDs can. Examining the image above. For these reasons the backlighting system has to be extremely powerful. 3M suggests that. and in comparison to those technologies direct-view LCDs have a better image quality. Efficiency: LCDs are relatively inefficient in terms of power use per display size. especially computer assisted convergence. which removes another portion.
Image Quality: Early LCD sets were widely derided for their poor overall image quality. In spite of many predictions that other technologies would always beat LCDs. most notably the ghosting on fast-moving images. One potential improvement is to use micro prisms or dichromic mirrors to split the light into R. A successful system would improve efficiency by three times. 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. Think of it in relation to shutter speed on a camera. instead of absorbing the unwanted colors in a filter. 34 . It’s the speed at which an LCD panels crystals “twist” to block and allow light to pass. as did the active matrix techniques. This allows them to dynamically adjust brightness of much smaller areas. Early LCD displays had response times on the order of hundreds of milliseconds. massive investment in LCD production and manufacturing has addressed many of these concerns.credits at the end of a movie. Sets using LEDs are more distributed. with each LED lighting only a small number of pixels. which is suitable for a much wider set of images. each pixel is lit for 17 ms before it has to be re-drawn (20 ms in Europe). 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. and 3M currently sells several products that route leaked light back toward the front of the screen. This was still not fast enough for television use. Another would be to direct the light that would normally fall on opaque elements back into the transparent portion of the shutters. For 60 frames per second video. which made them useless for television. and muddy colors. common in North America. G and B. poor contrast ratio. typically a 16 by 16 patch. By 2000. LCD panels with response times around 20 ms were relatively common in computer roles. A number of companies are actively researching a variety of approaches. A combination of improvements in materials technology since the 1970s greatly improved this.
but halve the pulse width. but stop rapidly. but was not originally required in the computer monitor role that bootstrapped the LCD industry. 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. Together. Even in a fully switched-off state. A common method is to double the voltage. But even this is not really fast enough because the pixel will still be switching while the frame is being displayed. By holding the before and after values in computer memory. NEC's solution was to boost the voltage during the "spin up period" when the capacitor is initially being charged.A major improvement. along with continued improvements in the liquid crystals themselves and by increasing refresh rates from 60 Hz to 120 and 240 Hz. improved response times by about two times. which typically requires fewer charging pulses. comparing them. led to the first practical LCD televisions. instead. 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. Moreover the capacitors are not drained completely. liquid crystals allow some light to leak 35 . But in most cases. which was isolated to the driver electronics and inexpensive to implement. and then recharged to the new value with every refresh. their existing charge level is either increased or decreased to match the new value. In older displays the active matrix capacitors were first drained. the amount of time spent charging and discharging the capacitors was reduced. and only resetting those sub-pixels that actually changed. pioneered by NEC. the vast majority of the screen's image does not change from frame to frame. and then dropping back to normal levels to fill it to the required voltage. Named "Overdrive" by NEC. This change. the technique is now widely used on almost all LCDs. NEC noticed that liquid crystals take some time to start moving into their new orientation. the overall performance would be increased. delivering the same total amount of power. response times fell from 20 ms in 2000 to about 2 ms in the best modern displays. If the initial movement could be accelerated.
and that light is spread out with diffusers. so if the image is light on one side and dark on the other. modern sets can use "dynamic backlighting" to improve the contrast ratio and shadow detail. mentioned earlier). it should be noted that the area of the screen that can be dynamically adjusted is a function of the backlighting source. in order to display a color close to black. 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. the LCD shutters have to be turned to almost full opacity. Displays using LEDs have an advantage. However. this technique cannot be used successfully.through the shutters. by adding 30 levels of dynamic backlighting this is improved to 30. The accuracy and quality of the resulting colors are thus dependent on the backlighting source and its ability 36 . a conventional set will have to set its shutters close to opaque to cut down the light. The CCFL must be driven with enough power to light the brightest area of the portion of the image in front of it. because each LED typically lights only a small patch of the screen. which is why many reviews of LCD TV's mention the "shadow detail". This lack of contrast is most noticeable in darker scenes. CCFLs are thin tubes that light up many rows (or columns) across the entire screen at once. If a particular area of the screen is dark. This allows the dynamic backlighting to be used on a much wider variety of images. and the number of available shuttering levels in the sub-pixels doubles. Since the total amount of light reaching the viewer is a combination of the backlighting and shuttering. the shuttering can be reduced by half. This leads to "posterizing" effects and bands of discrete colors that become visible in shadows. This limits their contrast ratios to about 1600:1 on the best modern sets. often as few as 256 pixels in a square area. when measured using the ANSI measurement.000:1. However. allowing the contrast ratio across the screen to be dramatically improved. This is the main reason high-end sets offer dynamic lighting (as opposed to power savings. limiting the number of discrete colors they can display. if the backlighting is reduced by half in that area. While the LCD shutters are capable of producing about 1000:1 contrast ratio.
LCDs of the era were still not able to cope with fast-moving images. However. LCD technologies like Overdrive started to address their ability to work at television speeds. their high cost. especially at higher resolutions. At the same time. both manufacturing and on the street. was widely considered to be unable to scale into the same space. and sets commonly quote a color space covering about 75% of the NTSC 1953 color gamut. ideally a CRT should be perfectly circular in order to best contain its internal vacuum. High definition: High-Definition Television (or HDTV) is a digital television broadcasting system with higher resolution than traditional television systems (standard-definition TV. the much higher resolutions these new formats offered were lost at smaller screen sizes. the wider 16:9 aspect ratio of the new material was difficult to build using CRTs. and remained expensive. meant that older technologies like CRTs maintained a footprint in spite of their disadvantages.to evenly produce white light. plasma displays never saw the massive scaling of economies that were expected. and tended to be strongest in greens. fitting into the low-end space that plasmas could not fill. plasma displays were the primary high-definition display technology. Modern backlighting has improved this. Meanwhile. however. LCD. It was the slow standardization of high definition television that first produced a market for new television technologies. LCDs started to experience the economies of scale that plasmas 37 . or SDTV). 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. The CCFLs used in early LCD televisions were not particularly white. Initially produced at smaller sizes. Contrary to early optimism. and as the aspect ratio becomes more rectangular it becomes more difficult to make the tubes. In particular. Through the halting introduction of HDTV in the mid-1990s into the early 2000s. 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. This situation changed rapidly.
The same was true for CRTs. and much larger prototypes were being demonstrated. "Globally. LCD prices started falling rapidly in 2006 while their screen sizes were increasing at a similarly furious rate. Market Takeover Although plasmas continued to hold an obvious picture quality edge over LCDs. LCD's dominance in the television market accelerated rapidly. It was the only technology that could scale both up and down in size. while plasmas were stuck at 720p.failed to achieve. at which point the LCD's higher resolution was a winning point for many sales. encroaching on plasma's only stronghold. so many people have been working in this area. Predictions that prices for LCDs would drop rapidly through 2007 led to a "wait and see" attitude in the market. Plasma had overtaken rear-projection systems in 2005. and even a price advantage for sets at the critical 42" size and larger. Sony ended sales of their famous Trinitron in most markets in 2007. LCDs offer higher resolutions and true 1080p support. and shut down the final plant in March 2008. This evolution drove competing large-screen systems from the market almost overnight. More critically. so many investments. So they can improve so quickly. and in 2007 the last remaining consumer rear-projection systems were gone. which lasted only a few months longer. By late 2006. 32" models were widely available. covering both the high-end market for large 38 . but also outsold CRTs during the same period. 42" sets were becoming common. but as the president of Chunghwa Picture Tubes noted after shutting down their plasma production line. several vendors were offering 42" LCDs. which made up for the price difference. This was in spite of the fact that plasmas continued to hold an image quality advantage. By late 2007. it was clear that LCDs were going to outsell plasmas during the critical Christmas sales season. pundits were surprised to find that LCDs had not only outsold plasma. on this product. albeit at a price premium. By 2004. 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." When the sales figures for the 2007 Christmas season were finally tallied. so many companies. Plasmas and LCDs reached price parity in 2007. and sales of all large-screen televisions stagnated while customers watched to see if this would happen.
Price: 3. its price and its place. They are the four P’s of marketing. Building across these wide scales quickly pushed the prices down across the board. There are four critical elements in marketing your products and business. Environmental effects The production of LCD screens uses nitrogen trifluoride (NF3) as an etching fluid during the production of the thin-film components. As NF3 was not in widespread use at the time. as well as customers looking to replace their existing smaller CRT sets in the 14 to 30" range. In reality. 39 . NF3 is a potent greenhouse gas. the report failed to compare NF3's effects with what it replaced. two earlier studies found that only 2% to 3% of the gas escapes destruction after its use.2 Marketing Mix Marketing your business is about how you position it to satisfy your market’s needs. Furthermore. Place: The right product offered at the right price. 4. and its extensive half-life may make it a potentionally harmful contributor to global warming. 1. 3. A report in Geophysical Research Letters suggested that its effects were theoretically much greater than better-known sources of greenhouse gasses like carbon dioxide. Product: The right product to satisfy the needs of your target customer. The right product at the right price available in the right place to be bought by customer.screens in the 40 to 50" class. another powerful greenhouse gas. perfluorocarbon. of which anywhere from 30% to 70% escapes to the atmosphere in typical use. 2. it was not made part of the Kyoto Protocols and has been deemed "the missing greenhouse gas. the vast majority of NF3 is broken down during the cleaning processes." Critics of the report point out that it assumes that all of the NF3 produced would be released to the atmosphere. Promotion: Informing potential customers of the availability of the product.
and customer service. and distribution methods. For example. Later growth may occur in the same location or may be in different geographic regions.” while many basic products must be positioned for price conscious consumers. Successful managers pay close attention to the needs their product bundles address for customers. and distribution methods are similar. such as the way it is packaged. Other future growth may allow offering the product to different customers. Other product attributes include quality. Other important aspects of product may include an appropriate product range. a luxury product should create just the right image for “customers who have everything. Offering a whole range of products is most successful if the raw materials. Start-up businesses are most successful when they concentrate their efforts on one product or one market. with the business offering related products. Product bundle should meet the needs of a particular target market. like a restaurant or a car service center does. function. 40 . services. The knowledge of the target market and the competitors will allow offering a product that will appeal to customers and avoid costly mistakes. one may be able to take advantage of opportunities to add value through processing. Apart from the physical product itself. Product’s appearance. For instance. Thus. warranties. Product “Product” refers to the goods and services you offer to your customers. design. there are elements associated with the product that customers may be attracted to.The marketing mix should be something one has to pay careful attention to because the success of your business depends on it. production processes. and support make up what the customer is actually buying. and brand name. which means one does not have to acquire new suppliers. Customer research is a key element in building an effective marketing mix. skills and equipment. A different type of growth would be a diversification of products. packaging. Think long term about the venture by planning for the ways one can deepen and broaden the product bundle. or a brand name. warranties. options. features. one must think of what one can offer as a bundle of goods and services.
41 . • Competitive: Based on prices charged by competing firms for competing products. The result should neither be greedy nor timid. Pricing approach should reflect the appropriate positioning of the product in the market and result in a price that covers the cost per item and includes a profit margin. • Value-based: Based on the buyer’s perception of value (rather than on your costs). gathering information will be more difficult. Later. A coupon is an example of a discounted price. Accurately assessing fixed and variable costs is an important part of this pricing method. customers will select vendors based on bids submitted simultaneously. • Cost-plus: Adds a standard percentage of profit above the cost of producing a product. healthfulness. Going-rate pricing is common in markets where most firms have little or no control over the market price. In other cases. However. The buyer’s perception depends on all aspects of the product. In some cases. this may be a signal of low quality and not part of the image you want to portray. • Discount: Based on a reduction in the advertised price. • Skimming: Involves the introduction of a product at a high price for affluent consumers. you can direct observe your competitors’ prices and respond to any price changes. and prestige. while others are intuitive judgments. the price is decreased as the market becomes saturated. So they begin their business by creating an impression of bargain pricing. Some price decisions may involve complex calculation methods. • Going-rate: A price charged that is the common or going-rate in the marketplace. As a manager. one can follow a number of alternative pricing strategies. Selection of a pricing strategy should be based on the product. In the next column are eight common pricing strategies. Determining the product’s price can be tricky and even frightening. In those cases. the competitive environment. This pricing structure is relatively simple to follow because you maintain you price relative to your competitors’ prices. and the other products you will offer. customer demand. including non-price factors such as quality. Many small business owners feel they must absolutely have the lowest price around.Price “Price” refers to how much you charge for your product or service.
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. • 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. The methods discussed here should be a base from which to construct your price. • Psychological: Based on a price that looks better. • Cash and early payment discounts: Policies to speed payment and thereby provide liquidity. for example. $4. • Trade discounts (also called “functional discounts”): Payments to distribution channel members for performing some function such as warehousing and shelf stocking. Whatever the price may be. • 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. After deciding the pricing strategy. • Price flexibility: Ability of salesperson or reseller to modify price.99 per pound instead of $5. such as maintaining an in-store display.• Loss-leader: Based on selling at a price lower than the cost of production to attract customers to the store to buy other products.00 per pound. • Allowance: Price reductions given when a retailer agrees to undertake some promotional activity for you. the amount of money actually received may be complicated by other pricing aspects that will decrease (or increase) the actual amount of money received. • Price differences among target customer groups: Pricing variance among target markets. • Volume discounts and wholesale pricing: Price reductions given for large purchases. ultimately it must cover costs. contribute to the image by communicating the perceived value of the 42 . 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. • Bundling of products/services: Offering an array of products together.
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.
often initiated through press releases. Often. decisions on one element will influence the choices available in others. Final Comment The four P’s—product. News stories. Advertisements allow broad promotion of your products. Direct e-mail contact is possible if you have collected detailed customer information. can be good sources of publicity. Your target audience may be more receptive to one method than another. Selecting an effective mix for your market will take time and effort. being involved in the community. Additional sources of promotion may be attending or participating in trade shows. So you should make efforts to target personal selling carefully. generic advertising is commonly found for milk. and networking socially at civic and business organizations. Personal selling focuses on the role of a salesperson in your communication plans. incentives. • Generic: Generic promotion occurs when no specific brand of product is promoted. setting up displays at public events. coupons. and rebates. Other programs might focus on educating customers through seminars or reaching them through trade shows. For instance. beef.• Electronic: Company Web sites provide useful information to interested consumers and clients. • Word of Mouth: Word of mouth depends on satisfied customers (or dissatisfied customers) telling their acquaintances about the effectiveness of your products. and providing open house days. but rather a whole industry is advertised. Sales promotions are special offerings designed to encourage purchases. Important components of a good public relations program include being a good neighbor. Salespeople can tailor communication to customers and are very important in building relationships. but these will 46 . While personal selling is an important tool. Password-protected areas allow users to more intimately interact with you. place. and pork. and promotion—should work together in your marketing mix. price. Promotions might include free samples. it is costly. contests. Public relations (PR) usually focus on creating a favorable business image. loyalty programs. prizes.
The worksheets that follow will help you construct your marketing plans. and symbol. 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. When you think Volvo. and indeed become the organization's most valuable assets. With time.3 Branding Process The Branding Process can be explained by dividing it into two parts namely. term. However. creating the impression 47 . The fact that you remember the brand name and have positive associations with that brand makes your product selection easier and enhances the value and satisfaction you get from the product. the definition. 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.pay off as you satisfy customers and create a profitable business. Once you have a good marketing mix—the right product at the right price. Powerful brands can drive success in competitive and financial markets. 3. today it is what they do for people that matters much more. you might think "Big Blue. In functionality and contextually they are proprietary visual. rational. the functions. how they reflect and engage them. you might think safety." Or "Yeh Dil Mange More" of Pepsi. When you think Nike. Understanding Branding and Building Brand. or the essence of brand has changed. you might think of an advertising campaign prompting "Just Do It." When you think IBM. Marketing is a part of your venture that will never end. design. Understanding Branding What is a brand? Brands were originally developed as labels of ownership: name. how they define their aspiration and enable them to do more. and cultural image that you associate with a company or a product. Marketers engaged in branding seek to develop or align the expectations behind the brand's experience.
This art of creating and maintaining a brand is called brand management. Brand management performed to its full extent means starting and ending the management of the whole company through the brand. Brand Management A powerful tool like a brand cannot be created in a vacuum or from thin air. logos. It is a comprehensive effort and requires commitment. A good brand name gives a good first impression and evokes positive associations with the brand. Brand management is a philosophy and a total approach to managing companies.that a brand associated with a product or service has certain qualities or characteristics that make it special or unique. 48 . and brand personality. and as such includes much about changing minds. It is something that influences all of us in several ways and leaves a deepening impact on all of us. support and contribution from everybody in the company. What makes up a brand identity? Brand identity includes brand names. One of the key tasks of Brand Management is development of brand's image. A brand is therefore becomes one of the most valuable elements in an advertising theme. 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. in one sentence. what business the company is in. This starts with the leaders of the company who define the brand and control its management. A positioning statement tells. All these discussed issues make branding a real art. what benefits it provides and why it is better than the competition. positioning. which uses well-defined and established principles but can be refined as well as mastered by practice. whereby the personality usually a celebrity or image is "branded" into the consciousness of consumers. visuals and even the appeal selected revolves around the image and helps in integrating. The personality and theme. A brand image may be developed by attributing a "personality" to or associating an "image" with a product or service. Brand management starts with understanding what 'brand' really means. promoting and communicating the image to the targeted audiences. brand associations. It requires to follow certain principles and should have a developed procedure along with wellsupplemented research base.
For example.Brand personality adds emotion. expenses such as promotional costs must be taken into account when using this method to measure brand equity. There are at least three perspectives from which to view brand equity: Financial . a children's party. this premium provides important information about the value of the brand. Brand associations are the attributes that customers think of when they hear or see the brand name.ICICI). lots of fun and following with associations of Good Quality reasonably priced Burgers. an animal (the Merrill Lynch bull) or an image (Hum Hai Na . How do we determine our brand identity? Brand has been called the most powerful idea in the commercial world. 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.One way to measure brand equity is to determine the price premium that a brand commands over a generic product. in communications with employees and in every sales call and media interview. This concept is referred to as brand equity. pound that message home in every ad. consistent food quality. yet few companies consciously create a brand identity. a family entering the restaurant. It is advised to senior executives. By consistent repetition of the most persuasive selling messages. culture and myth to the brand identity by the use of a famous spokesperson (Sharukh Khan – Hyundai Santro). However. The brand can add significant value when it is well recognized and has positive associations in the mind of the consumer. What is Brand Equity? Brand equity is an intangible asset that depends on associations made by the consumer. a character (the Nirma Girl or Amul Girl). 100 more for a branded product over the unbranded product. if consumers are willing to pay Rs. McDonalds television commercials are a series of one brand association after another. 49 . Ronald McDonald. Then. in every news release. customers will think of you and buy from you when they are deciding on whether to buy from you or your competitor. etc. kids. Happy Meal. starting with the yellow arches.
Brand extensions . appropriate brand extensions can enhance the core brand. Strong brand equity provides the following benefits: • • • Facilitates a more predictable income stream (higher profitability). and a lower risk from the perspective of the consumer. This may happen due to out-dated product. The consumer's awareness and associations lead to perceived quality. and allowing premium pricing. and eventually. Brand equity is an asset that can be sold or leased.A strong brand increases the consumer's attitude strength toward the product associated with the brand. Attitude strength is built by experience with a product. Consumer-base . reducing promotional costs. inferred attributes. 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 . poor image or communication and better brand and image of competitor's product. Furthermore. However. low quality of product. 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. Some brands acquire a bad reputation that results in negative brand equity.A successful brand can be used as a platform to launch related products. brand equity is not always positive in value. The benefits of brand extensions are the leveraging of existing brand awareness thus reducing advertising expenditures. Brand Elements Brand elements are the components or constituents of brand that are designed and put together to strengthen brand's image. Increases cash flow by increasing market share. brand loyalty. Continuous fall in sales is the biggest indication of negative brand equity.
and they should communicate a unified message that depicts or supports the brand image. • Brand name. logo. packaging indentations etc. the transferability of brand elements should be high. symbols. packaging. They should not look time beaten neither they should be changed frequently. easy to pronounce and easy to understand. all should be protected. Examples of Brand Attributes: • • • • • • • Influential Innovative Inclusive Relevant Connecting Leadership Humane Is branding just for large companies? 51 . slogan all should be catchy and flexible over time. the brand stands for. • The logo. It should create a connection between the need of the consumer and the product.• The recall value of Brand name should be high. • 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. They should represent what the company. 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. It should be simple. The brand name should also connote what does product stands for. There should be some consistency and they should be used for several years before they are changed. use of registered trademark. Intellectual property protection is the fifth criteria. • In addition. Brand Attributes Brand attributes are functional or emotional associations that are assigned to a brand by its customers and prospects. symbol. The elements should have adaptability and should be able to change as per demand of time and consumers. Brand attributes can be either negative or positive and can have varying degrees of relevance and importance to different customer segments.
service businesses. which will fetch them hefty returns in long time frame. organization or product." In its simplest form. backed by excellent customer service that permeates an entire organization. successful branding programs begin with superior products and services. In short. can use this process rather they should do it and they should consider branding expenditure as longterm investment or a capital investment. However. The Importance of Branding 52 . It has become the crux of selling in the new economy. fancy packaging or public relations will help you achieve your sales goals. Therefore. then. manufacturers and businesses of all types and sizes. you will in turn be able to create a powerful marketing program. Branding is something that every one needs and can be applied to any business. lifestyle and status. 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. Brand Building Overview Branding is more than just a business buzzword. a brand represents many more intangible aspects of a product or service: a collection of feelings and perceptions about quality. However. image. if you can't convince customers that your product is worthy of purchasing. You might infer." the new philosophy could be" Nothing happens until somebody brands something. a brand is a noun. a brand offers the customer a guarantee and then delivers on it." Nothing happens until somebody sells something. If the old marketing mantra was. 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. that if you build a powerful brand. Retailers. no amount of advertising dollars. It is the name attached to a product or service. upon close inspection.NO! It is one of the myths that only large business house or the player in an industry with excess competition needs a brand.
machines and staff. unlike other abstract marketing notions. They can steal your trade secrets. If you have a great idea. trucks. It is often the brand that a business owner has to sell in such cases. "What competitive edge do I have to offer that cannot be copied by anyone else?" The answer? Your brand. vice principal of marketing at Lindsay. But your brand can go on and live. you can be certain that somebody will copy it before long. For example. "The value of that brand is huge compared to those actual physical assets. patents." That value is often called brand equity." 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.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. they can steal. Your physical plant will wear out. can be quantified. As a result. When Should You Brand? 53 . you would begin to value the firm by looking at the assets tied to the Marlboro brand. 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. Stone and Briggs Advertising in Madison. It creates a lasting value above and beyond all the other elements of your business. And when you're looking for tape to wrap a present. You would then identify the cost of the factories. more likely than not. your patents will expire. For instance." They are worth a small fraction of what you can sell that brand for. And not only will they follow your lead. The reason behind these strong brandproduct associations is that these companies have built rock solid brand identities. if you owned the Marlboro Company and wanted to sell it. Eventually. Scotch is the brand that springs to mind. you think of the Kleenex brand. or the worth of the brand. Technology will change. Likewise. "A brand is the one thing that you can own that nobody can take away from you. Brand equity. customers will think of your business first when they think of your product category. when your child wants a hamburger. when you think of tissues. Wis. Creating a strong brand identity will build mind share — one of the strongest competitive advantages imaginable." says Howard Kosgrove. "Everything else." says Kosgrove. he will often say he wants to go to McDonald's.
which were one of the last frontiers. a DuPont fiber. secondary and tertiary. Although most industries and products or services can benefit from a brand. are even beginning to see the importance of branding by tagging banking packages and even mutual funds with catchy names. Primary brands typically garner a large percentage of a company's revenue potential and therefore need to 54 . restaurants and consumer goods. Tyvek. nearly all industries can benefit from a branded product. no one brand is going to appeal to all customers. has seen brand names creep in. Financial services. All of the traditionally brand-conscious industries.Because of the competitive nature of business today. For example. branding is based on the concept of singularity — targeting individuals in a personal manner— and therefore precludes the concept of universal appeal. not every product needs its own stand-alone brand. where cost is usually more of a loyalty building factor. By definition. Even industrial markets. improbably one of the best knew industrial branded products. including fashion.This is a company's core brand or umbrella 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. Brands can be separated into three categories: primary. On the contrary. Primary Brands . This is why many brands broaden and widen their appeal by creating tertiary brands or line extenders. are being forced to continue to brand heavily — perhaps even more strategically than they ever have in the past.
Crest is the core brand.These are often line extenders. and Deep Sweep is the secondary brand. or "flankers. it probably soon will. products that may be roughly equivalent in terms of their features need to have a brand identity that will impact consumer choice. usually a modifier to the brand name will suffice and strengthen the core brand. Secondary brands don't need to have their own name. it will be easy to manipulate customer attitudes. a toothbrush called the Crest Deep Sweep. What Goes Into a Brand? If your product or service is new or unique. For example. but it fills a need within a niche market so the company continues to manufacture it under the unregistered name Household Trash Bags. Therefore. Therefore.a component of value. higher prices may signify to consumers higher quality. your product or service will have been in existence for a while and have direct competition. the generic line is considered a tertiary brand for this company. Line extenders are characterized by having a descriptive term that allows the base brand to be the true selling proposition and the flanker to really designate to the audience what that particular product's key feature or benefits are. And if it doesn't. Tertiary brands .These brands typically have insignificant revenue potentials or expectations." for a core brand. but just descriptors.be given priority and have a sufficient amount of advertising in order to root them firmly. for instance. Therefore. but they contribute to the company's overall image in some way. Since there are no pre-existing biases toward the product or service. Brand identity is comprised of: Pricing . Secondary Brands . they sometimes don't sport registered brand names. Take. theta of branding is made easier. a garbage bag manufacturer may make a generic-brand bag in addition to its flagship brand. 55 . and lower prices may suggest decreased value. More often. The generic line may bring in minimal revenue for the company.
Awareness . Customer commitment . 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.Distribution . the higher your offering's awareness. In fact. Quality . What's in a Name? A. Image .enduring public opinion of brand character. Like reputation. often represented by qualities the consumer relates to. the better your sales results will be. Benefits . these may be warranted or unwarranted. but 56 . higher quality will translate to more satisfied customers who come back again and again to purchase your offerings. which is established by a combination of all elements of the brand.consumers may equate certain positive and negative consequences with use of your product or service. image is difficult to change once established. but by how others perceive it. Positioning is not created by the marketer or the individual brand itself. which is built over time and difficult to change once established.perceptions of brand traits or prototypical buyers. Presence .increased market share is a direct result of a successful branding campaign. residual awareness and recognition.which impacts satisfaction. limited distribution of a product or service may imply exclusivity to discerning consumers. products or services with a highprofile market presence will lead to brand recognition and increased sales. Preference .loyalty is built through long-term branding and close consumer contact.differentiation from the competition. obviously.availability.prominence in the paid and unpaid media. Share of market . Kosgrove says that the brand is not created by the marketer at all. Reputation . Positioning salience . which are directly related to presence.top-of-mind awareness.a predisposition to buy displayed by consumers who are establishing brand loyalty.
Those drivers then come into developing products and services that best fit those audiences' needs and wants. for instance? Because we believe in the brand's "revolutionary" Pro-V formula that leaves hairs strong and healthy. 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 .Benefits need to be backed with some sort of persuasive reason to believe the product's hype. in turn. they usually choose what is on sale or what is available on their local grocer's shelves. and despite companies' push to try and brand the two products. and not a man. Relevance. no company has found much success building brand equity.rather by the customer. Why do we believe Secret antiperspirant will keep women smelling sweet? Because "it's pH balanced for a woman. is how customers ultimately decide which brands to buy and which they will discard. Several characteristics can work in a positioning campaign. they create the strategic and tactical suggestions to encourage the customer to accept a particular positioning in his or her mind." While marketers do not literally position brands. That will. "Positioning studies identify the audience according to their needs. rather. "Positioning is everything. For instance. wants and desires through your brand. you need to identify the key attributes or benefits that represent the value of your product or service. the greater the chances are that the prospect will buy that product. Marketers don't create the positioning. are heavily branded product categories: Consumers have formed a relationship with and will search out their preferred brands. create trust in your brand." says Dettore. expectations and wants. or the connection that the prospect has to the brand identity. Ask yourself: Is the identity of the brand too young for my target market? Is it too old? Is it too upscale? Promises backed by support . Why do we trust Pantene shampoo.The more apparent the connection is between the brand and the prospect's daily activities. To position your offering properly. Beer and cola. they can have a significant influence on how they are positioned. bread and milk are not branded items." 57 . As you begin to understand the relationship that your customers have with your brand. you will be able to more efficiently meet their needs. on the other hand. When customers want either one of those staple items. Many times.
Types of Prompts in a Campaign 58 . For instance. Some examples of crystal clear campaigns include "Gillette . but told you nothing about the product or service. 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.No matter how brilliant a strategy you have." "Coke Is It" and "Always Coca-Cola." 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. could they be hurting.Many successful companies build customer trust by claiming to be the real McCoy. Pace Picante sauce tells you that they are not the brand from New York City. and it seemed inappropriate for what is being sold. Coke tells you that "It's the Real Thing. products and services? If not." The copy line helps reinforce that this brand is the genuine article for that category of products. rather than helping. Ask yourself: In what ways are my products and services more "genuine" than my competitors'? How can I emphasize those elements to give the brand a competitive advantage? B. the brand? Product Is the genuine article .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 . Ask yourself: Are my advertising messages in line with the image I'm trying to convey about my company. 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.Have you ever seen a commercial on TV that seems to come from left field? It grabbed your attention. Even service companies can make claims to being the real deal. The message that you send needs to be appropriate to the product or service you are trying to brand. how can I change them to be more accurate? Message of the brand Is appropriate . you need to be clear about the message.The Best a Man Can Get" or "Choosy Moms Choose Jif. For instance.
' Look at the computer industry. but you have to get people to believe in it. however. and you will succeed in creating a powerful brand. 'My product is better. Al Reis and Laura Reis. the next thing to look at is how you are going to lure your customer to try your brand. "If you look at the most profitable companies in the country. For example. 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. but all of these brands carry a perception of higher quality because of their higher prices. That method is called the "positioning prompt" of the brand. When you narrow a product's focus.Once you determine the way in which you can reach your market. for instance. Quality positioning . and there is a great deal of interpretation and high degree of risk that is involved in choosing one positioning over the other. 1. that positioning prompts are not verifiable scientific hypotheses. You can talk about how your product or service is better. authors of "The 22 Immutable Laws of Branding. A brand can evoke several different types of prompts. they have a very high perception of quality. you become a specialist rather than a generalist. Build a powerful perception of quality." Quality. That's why it makes sense to look at alternative positioning types before deciding on which one you will attach to your brand. and a specialist is perceived to know more. Another way to build the perception of high quality is to simply attach a higher price tag to your brand. and it may be different than measured quality. but in reality. "Somebody can come in and say. or the perception of quality. they explain. Most people think that they know a high quality product from another. lies in the mind of the buyer.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. 59 . things are not always as they seem. or be of "higher quality" than a generalist. But PC manufacturers will say that the PC is better because more people believe in it. People say that Apple is a better product [than the PC]. Be aware." say the best way to increase perception of quality is to narrow the company's focus." says Kosgrove.
These brands have achieved positioning based on who buys what they sell. Sketchers equates sneakers with cool and that characteristic passes to all who wear them. especially cereals. not solely by what they sell. Each of these characteristics gives the perception of quality. started asking computer users to liberate themselves from the PC camp and" Think Different. In fact. experienced a backlash when their prices rose too quickly.Although at one time. brands that are considered a value are rising in popularity amongst consumers. For instance. and the positioning will be credible if you stick to the facts about the product.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. Value positioning -. It allows the affluent consumer to obtain psychological satisfaction from the public purchase and consumption of a high end product. but they don't necessarily improve performance. Relational prompts -. co-branded names. items that were considered to be a good "value" meant that they were inexpensive. Southwest Airlines is probably the best example of how a company has been able to offer discount prices and still keep a strong brand identity. that stigma has fallen by the wayside. Feature-driven prompts -. the product or service does need to have some perk or difference to justify the higher price. packaged good brands. Today.Believe it or not. 3. Mont blanc has a fatter pen than Cross. Rolex makes a heavier watch than Timex. Private supermarket labels. 60 . Calloway clubs have a bigger head than Titleist. 2." Jeep has created a car and branded apparel for rugged individualists. In fact. feature-orientated stances are often rendered useless if the competition comes out with a faster or more advanced model. which was down on its luck in the overall computer marketplace. most of the other major airlines have followed Southwest's lead by rolling out valuepriced flights under new. Unfortunately. Of course. The advantage is that the message is clear. have found a strong market. high price is a benefit to some customers. which introduced a breakfast cereal that aims at undercutting brands like Kellogg's or Post. as well as smart companies like Quaker. For instance. 4. Apple computer.More marketers rely on product/service features to differentiate their brands than any other method.
are constantly going head-to-head to prove which one has the most power to lift stains. or a state of mind they might like to achieve. 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." I am Superman.These are positioning prompts that offer prospects a place they might like to go. Detergents and cleansers also make good use of these prompts. As such. For example." 9. Packaged good brands tend to be the most frequent users of problem/solution prompts. 7. Laundry detergents. they usually make up for in directness and credibility. Other campaigns that challenge consumers to be the judge have cropped up between car companies.By definition. or a person they might like to be. for instance tells customers that "It 61 . Benefit-driven positioning -. problem/solution prompts show the consumer how a sticky situation can be relieved quickly and easily with the brand or service. frozen meals cut meal preparation time to minutes. "Building Brand Identity: A Strategy for Success in a Hostile Marketplace. you are buying the only real way to "Drive Safely.or desire based. many marketers play on our feelings. for one. The now defunct Joe Camel mascot for Camel cigarettes infuriated parents." because they use a new version of the Lotus Notes software program. What problem/solution campaigns lack in imagination. which means that emotional or psychological approaches can oftentimes be very effective as positioning prompts.As the name implies. the idea of a rivalry-based position might seem redundant but many campaigns take this approach. Therefore. And a new campaign from IBM has random people exclaiming. Aspiration positioning -. In the book. "How people feel about a brand is oftentimes need. Warm and fuzzy positioning -. Discover credit card." Volvo hints that through purchasing their Swedish import cars.5. Problem/solution prompts -. asking friends and family to "Reach Out and Touch Someone. 8.Underneath our capitalist driven needs to consume." Need proof? AT&T's commercials are often tearjerkers. 6. Rivalry-based positioning -. we are still docile and emotional animals.Other brands base their entire positioning on the fact that they give back to the consumer. positioning deals with how one brand is thought of compared to its obvious competitors. even between search engines on the Web." author Lynn Upshaw writes. garbage bags.
discounts on gas or store purchases. Now nearly all credit cards offer some type or reward. for example.Pays to Discover. The team members must be clear on what customer benefits are being offered and how they are based on real life needs and desires. you may be in the business of: • • • • Tourism Recreation Entertainment Stress-reduction Next. 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 . determine what the benefits are for your products and services. be it frequent flier miles. C. 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." Use the card and get money back. Determining Which Position Will Work for Your Brand To determine which position will work best for your company. To accomplish this. If you sell computers. Discover was among the first major credit cards companies to provide its users with a financial incentive for using their card. ask yourself what business you are really in. After completing the necessary research and reviewing the relevant examples of positioning. focus on relevant reality-based customer benefits.
he says. In matters of branding. Therefore. Every contact they have with you helps to build that brand. small-company brands usually take on the personality of the entrepreneur who owns them. 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." writes Upshaw. if the founder is a high adventure sports enthusiast. "A brand is everything that your customers know about you. to a large extent. how will we overcome them? • • • • Building Brand Personality Brands that carry with them a true persona. and the beliefs and experiences similar to a personality make a brand rise to a new level. According to Kosgrove. the brand will probably not be the favorite of a conservative investment banker. is the brand because the personality and the interest of the founder is going to have a lot to do with the way that the company is perceived by others. it's hard not to like someone with a good personality. The off-beat. An entrepreneur or founder. and help forge an emotional link that binds the buyer to the brand for years to come." says Kosgrove. a personality helps to humanize an otherwise inanimate object or service so that a prospect's defenses are lowered. In such cases. reinforce the purchase decision.• Are there extension opportunities for these branded products or services? If so. for an entrepreneur to create a brand that is a 180-degree turn against what the founder is like. "you are more willing to overlook flaws and search for strengths. After all. founder of Joe Boxer. An attractive brand personality can pre-sell the prospect before the purchase. who is best known for unorthodox marketing antics like shooting an underwear- 63 ." One entrepreneur whose personality permeates every aspect of his brand is Nicholas Graham. It's hard. good or bad. humorous line of boxer shorts and loungewear that the company produces bears the distinctive image of the zany Graham himself.
particularly when there are few product or service features that are different between competing brands. relate to. A brand's personality can offer the single most important reason why one brand will be chosen over another. it can make it easier for customers and prospects alike to understand what the marketer has to offer. Provider-driven . Brands that lean heavily on the provider image include insurance companies and financial institutions. is much more real than the other aspects of the brand because it is the outstretched hand that touches the customer as an individual. Image of the user . Although a strong identifiable personality is not imperative. Whether through a mascot or an animated figurine. 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. The personality gives the consumer something to relate to that can be more vivid than the perceived positioning of the brand. but also a face. 64 . The personality.As strange as it may sound. For instance. However. Even more important. products come to life to give consumers more than just a brand to trust." show that the brand is trustworthy and their brands reflect the same attitude. these generations are also skeptical of marketers and are keenly aware of when a brand is targeting them.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. packaged products often take on a personality that consumers can relate to.laden rocket into space and holding an undergarments "fashion show" on a transatlantic flight on Virgin Airways. Many companies with branded products geared toward Generation X and Y use this tactic.Other brands like to show that the people who use the brands are people that you could be friends with. in some ways. Prudential's "The Rock" and Allstate's "You're in good hands. a practical prerequisite for success in an increasingly individual-driven marketplace. the Pillsbury Doughboy's laugh reinforces that the product will make your family feel good. or want to be like. Personality is usually shown in three ways.
Co-branding works because it creates new excitement for the brands involved. For instance. Tropicana and Chiquita have made numerous fruit juice concoctions by blending their respective specialty flavors. co-branding is a way for businesses to extend their brand's identity and cut expenses by partnering with compatible products and services. A slew of credit card companies has-been teaming up with retailers to offer co-branded items such as the L. No two brands have exactly the same impact on the consumer. co-branding. However. particularly for small companies that oftentimes get overshadowed by larger partners. but the smaller company's brand doesn't really receive much attention. Intel's Pentium Processor campaign has-been so successful that many computer buyers don't care whether they have an IBM or Hewlett-Packard or Dell computer. Instead. or what is better known as strategic relationships. Sometimes a co-branding strategy isn't as advantageous as it may seem. ask yourself if the excitement that the deal will bring will build the brand or sabotage it. "Does it have Intel inside?" In fact. And financial companies have even jumped on the bandwagon. Check that your potential partner is not only compatible with your product but also that it won't eclipse your own brand. companies invite branded products and services to be sold from their sites in what are known as affiliate programs. are rampant. their question is. On the Web. Bean credit card. If that risk 65 . 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.L.Strengthening Your Core Brand A. One brand teams with another to offer a product with an enhanced (or seemingly so) benefit. Co-Branding Although it has become somewhat of a fad amongst companies. For instance. before you jump into a co-branded relationship. Therefore. The larger company receives the added benefits from the smaller company's product. Besides content swaps. And Betty Crocker uses real Hershey's chocolate in their brownie mix. one partner in every co-branding partnership will receive more attention than its counterpart.
" writes Upshaw. For example. B. "It's the marketing team's job to prioritize identity contacts and to judge how they might contribute to the brand's identity. 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. Store salespeople can wear pins alerting customers to ask them about the new software features. As you can imagine. 66 . and in what way they are relevant to the realities of the consumer's everyday life. Identity Contact Identity contact is the sum total of all information and experiences that a customer or prospect has with a brand. • • • • Brand Pep Boys Example Brand Identity Contract Follow-up phone call after servicing the car. opportunity to remind customer of upcoming sales. more can be done than just change a copy strategy and run new advertising. then the partnership is sound. if a software company comes up with a new version of one of its programs. method to check up on efficiency/courtesy of service department. The company can highlight the new product at trade shows or conventions. 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.is accurately assessed and accepted by the junior partner and it's still a net gain for its brand identity. Contribution to Brand Identity Reminder that the auto maintenance shop cares about customer service. For example: • The product's packaging can be reprinted so that bursts highlighting a "New" or "Improved" version of the program. A press release can be generated about how programs need to keep pace with the demands of the workplace and provide proper functionality. nearly all of the brand identity contacts can be manipulated to increase emphasis on the new functions of the software.
Advertisements with athletes of Olympic or star stature. Close-up of Nike logo on shoes of player in NBA championship or on Tiger Woods in PGA Gold Tours. says Kosgrove. And when there is a service problem. revisable numbers send signal that MCI is on top of what's happening in prices. and we are going to prove it.' They do that by making sure that every point of contact with a customer is going to be completely different. Brand associated with the best athletes in their sport. reinforcement of superior quality or product and prestige of being worn by winners. and the showroom itself is clean and friendly. instead of being crabby with them and making them wait. 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." Saturn said.McDonald's Ronald McDonald Houses for the families of seriously ill children. 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.'" says Kosgrove. When a customer enters the showroom. Electronic billboard tabulating how much MCI customers have saved by using its services. they give coffee and doughnuts to the people when they come in. C. "They say 'We are a different kind of car company. In addition to its humanitarian value. a shoe company in Santa Fe Springs." The result. MCI Nike Identity contacts are important because they can set a tone for subsequent contacts with the company and the brand. The sneaker company has become synonymous 67 . Grassroots Grassroots marketing is a form of branding that has really hit its stride in the last few years. we are going to sell the company's brand. they see people in matching polo shirts rather than suits. 'We are not going to sell the car. Vans. Brand-name registration in compelling way. reminder of savings positioned. has led the way in sponsoring events that their younger customers care about.. not slick. RM houses remind parents of McDonalds' commitment to the American family. Calif. 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.
"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.. 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. The business also sets up makeshift service shops off area bike paths on sunny summer days.I. The juice company sponsors two Winnebagos to roam the countryside and entice consumers to become "juice guys. "You want to look at what your customers care about. Ask yourself: What do my customers care about. Last summer's roving tour featured punk and "ska" bands as well as pro demos from skateboarders. events where shoes are a prerequisite. BMX biking and snow boarding categories. and how can I get involved in those things?" D. the tour has also featured the Mega-Pump Climbing Wall Competition and Spike and Mike's Festival of Animation." writes Upshaw. an alternative music festival that combines other types of cutting-edge live entertainment. Vans sponsors the very popular alternative Warped Tour." says Kosgrove. in-line skaters." Smaller companies. East Providence Cycle. your identity problems may be over. and your capacity problems may just be beginning. a bike shop in East Providence. rock climbers and BMX bikers. 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. "If you have a retail business in a neighborhood.with alternative sports by hosting events in the skateboarding. word of mouth is well worth the effort it takes to generate it. can easily sponsor community events. In past years. R." 68 . for instance. the company has done well stepping into other areas of their customers' lifestyles. 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. "When your company is lucky enough to be the beneficiary of word of mouth. Besides just sporting events. Word of Mouth Whether it is planned or not.
nearly every beverage company came out with their own line of iced tea — each one with a different gimmick. says that by staying true to its mission.Some of the better known beneficiaries of word of mouth phenomena: Furby. has never posted an advertisement online." For Web-based brands. the company has relied on word of mouth to promote its brand and Web site during its four-year history. In one memorable ad.7 million. and you end up with something that is very positive. Ed Koch. after Snapple's success. the company US Wings." he says. The founder. be it the product or the promotional vehicle. the company needs to convert the brand into something that will sustain the hype. or some other herbal concoction. word of mouth can work extremely well. "We are selling something with quality and value." While it is difficult to intentionally generate a positive word of mouth branding strategy. Snapple also hit it big when kids started passing the word about the delicious iced tea beverage. The company capitalized on that by highlighting the word of mouth phenomena in its television ads. Sergeant Dave Hack. the company's earnings slid. "It snowballs. 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. For instance. the hot toy in 1997. For instance. going out to ask people who wrote to the company if their passion for Snapple was really true. it can be done if you have the right product and the right strategy. 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. which sells genuine military jackets and gear. Competitors are also quick to duplicate the product or service being hyped. ginsengfortified. Creating an Online Identity 69 . the company has been able to generate positive promotion on the Web. Once strong word of mouth is achieved. and Tickle Me Elmo. Instead. be it sun-brewed. After the onslaught of the copycat brands. the ex-Mayor of New York City. People are going to tell other people. spring-filtered. the toy sensation of Christmas '98 that sent parents into shopping frenzies. It also doesn't hurt to have something extremely unique. Snapple was smart to sell its brand to the Quaker Company in 1994 for $1.
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.000 Internet users associated the following Net names with the following products: • • • • • • • Books: Amazon. "Whereas if you are fresh and new.12 percent Travel: AOL. "The Internet helps promote companies' products in a very efficient manner and especially to all audiences in all parts of the world. giving them' mega-brand' status. adults. only a percentage of them are actually buying online. "Typical advertising media hit only a segmented or regional strategy. so the Internet is one of the most cost effective ways to brand." Research shows the brand names of seven Internet companies are already recognized by more than 50 million U. a debate rages in the business departments of many Internet companies over the importance of branding. 10.Online companies are putting branding to work with remarkable success.56 percent Music: CDNOW .S.30 percent Computer Hardware: Dell . which offer tangible returns? Although people are shopping online." says Dettore." Still. Yahoo!. But it is always important to look toward the future. According to Intelliquest.8 percent each Autos: Yahoo! . building up an online brand? Wouldn't those resources be better spent promoting e-commerce efforts." he says. there are four times as many online shoppers as purchasers. According to a survey from Intelliquest.24 percent Computer Software: Microsoft . Travelocity . and there are mistakes that have been made in the past. 70 .20 percent Clothing: The Gap . you have a clean slate.com . How much effort should they spend on e-branding initiatives — that is. "Any long established brand has had bad experiences. Companies that form strong associations between their name and their category now will be the ones who will capture future sales.
we got it and we will get it to you quick. "The World's Largest Bookstore. but nutritional care for your animal. selection and delivery are their brand. The main benefit is that they are going to be fast.In short. a pet food brand on the store shelf does not have many choices about the positioning of its product. "Their brand is: you want it. and they will have a large selection." says Kosgrove. from Synnetry. Selection and speed -. but they can promise to ship you the book of your choice practically overnight. a company can brand itself as more than just a dog food supplier. but rather as an animal nutrition expert. 71 ." The company can't offer the warm. "Sites need to be branded so that the consumer can have confidence in the site and is willing to make a purchase there. Really. 2. The Web allows companies to take on new edge or benefit that a company would not be able to use in the real world. "Then it isn't just a bag of dog food. service is not as important [at the moment]. John Lynch. an online marketing firm says. friendly environment that Borders can. That tactic is certainly true with large online stores such as Amazon. e-branding is very important and must be taken into consideration. data is cross referenced. says Kosgrove. "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. The site can walk visitors through a personalized analysis based on the animal's needs and activity level. Customization -. There is no way that a pet food company would be able to gain that brand identity in the real world. Once the information is entered into the database. says Lynch. Online.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." says Lynch." says Lynch. but nutritional care for your animal. "Then it isn't just a bag of dog food. For instance. answers are compressed. however. and information telling you which formula of food your pet should be consuming is spit out.Online brands don't usually tout themselves as cheap. Prices are not as important." Some tactics to build an online brand include: 1.
" 3. Build a community -. auction.Creating services that other Web companies don't have will ensure that your brand is stronger than the rest. Using Interactivity -. For instance. If your brand can stimulate a community around it. Luckily.There is no way that a pet food company would be able to gain that brand identity in the real world. you need to have a category that will engage people and spur them to want to talk with one another. Ways to increase contact and keep your brand in front of people include creating: • • • • • Newsletters Targeted emails Message boards Chat Advice columns 4. The company's brand is the focus of debates and discourses in the computer world. "Through the Internet. For a community to be successful. Unlike other media. "What pet store owner is going to carry that message for the pet food manufacturer to the pet food buyer?" asks Lynch. chat group. then it has a powerful ally. they are allowed to create a better position for themselves than they could if they were going through regular distribution channels. online customers can interact with the brand and its identity in a way that no other medium can offer. people seem to never tire about the wonders of the Apple computer. which leads to many opportunities for community interaction. or join mailing lists or user groups 72 . prospects and critics of the brand have strong opinions about what they like and don't like. the Web is the perfect place to do just that. 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.Community is the other buzz online. Customers.
Big Star looks for companies that have an active relationship with their members and are willing to get Big Star involved. "We advertise in their entertainment areas. Both shipping companies invite companies to use their software to calculate shipping weights and secure deliveries to the purchaser's home. "Synergistic sites can swap banner ads usually without any fee being paid. 73 . Women." Another way that E-retailers can create partnerships is by finding larger content sites to sell their wares. chances are that you are also giving business to UPS or Federal Express. Women.com members. they are going to feel good about being on your site. Give members something to care about by establishing a clear economic or social benefit." says Lynch.com is one site that fit the bill.Like co-branding. For instance. We also have fitness videos in their health and wellness area and children's videos in their family areas. Encourage early and steady contributors. "If someone comes to your site and sees you link with other people that they respect. Williams says that when shopping for strategic partners. enhance visibility and increase revenues for companies. One of the best ways that an e-commerce site can partner with other sites is to embed themselves within another company's site. and we are often a featured vendor there." Besides that. 5. Form Strategic Alliances -." says Kosgrove. Anyone who buys a shirt is going to want to buy a tie.com will also send a heads-up to subscribers telling them about movie promotions that Big Star is running exclusively for Women. "If your site sells ties. It's important to find partners who are going to help promote our site. it would be good to form a relationship with a store that sells shirts. each time you purchase a package from an e-retailer. 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. personalize user experience through interactivity with other members and develop opportunities for common leadership/ownership. One way that synergistic sites can partner is by swapping banner ads. says Williams. strategic partnerships between Web brands can help strengthen identity. Good alliances on the Web allow traffic to flow between sites that have a common interest.
Online customers have little opportunity to see your brand's dedication to service. 74 . This is of the utmost importance when you are building a new brand or bringing a new brand to the online arena. It may look as if you are on Joe's Computer Shack Web site. it's likely that a customer won't come back to interact with your brand or your site. 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.Dell Computer Corp." says Lynch. people are going to say. 'I thought you were someone else but now I know who you really are'. are the ones that you don't even know that you are going to. If your customer service skills aren't up to par. however. 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. or were not accessible by email. never replied.Since competition is only a few clicks away. but actually Dell has lent Joe software so customers can customize their PC. "If your other communications look warm and friendly and you brand yourself as serviceoriented. 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. Dedication to Service . 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. "The best sites in the world. Despite that logic. if applicable Quick server response 7. "You are not spending all the promotion money." says Kosgrove. partners with smaller computer dealers online to let customers configure their own computers. Building credibility -. but your Web sight is impossible to navigate and doesn't have an email response or is just kind of clunky. in terms of traffic and selling. 6. So be sure you do your homework about what goes into a strong Web site. the standard for customer support must be higher for the Web than it is in the off-line world.
A process of buying starts in the minds of the consumer. 3. support staff or other communication tools that will help strengthen the relationship between your brand and customer. Yet companies that delay responses to user questions instantly lose a significant degree of credibility and user loyalty. To understand the likes and dislikes of the consumer." says Ken Allard. extensive consumer research studies are being conducted. 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. This leads to internal and external research. "Answering thousands of questions per month is an enormous challenge for sites offering complex products and services.4 Consumer Decision Process Consumer behaviour can be defined as the decision-making process and physical activity involved in acquiring. and then the post purchase behaviour which is also very important. While email is the primary communication tool. and not responding perpetuates the consumer notion that using the Web site is not a reliable method of doing business with that company." 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. the process starts much before the goods have been acquired or bought. 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. which leads to the finding of alternatives between products that can be acquired with their relative advantages and disadvantages. evaluating. end-all of customer service. using and disposing of goods and services. especially if they never had a traditional call center. Then follows a process of decision-making for purchase and using the goods."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. These researches try to find out: 75 . because it gives a clue to the marketers whether his product has been a success or not.
social status. reference groups. multidimensional process. 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. dynamic. 76 . Fig. the involvement of the buyer and the risk that is involved in deciding the product/service. The figures show the consumer life style in the centre of the circle. values. and all marketing decisions are based on assumptions about consumer behaviour. These are culture. subculture. A simplified framework for studying consumer behaviour The process of decision-making varies with the value of the product. demographic factors.
the marketer must lay emphasis on the product/brand image in the consumer’s mind.household and also the internal make up of the consumer. after the sales have been affected. perception and learning. For this. All these factors lead to the formation of attitudes and needs of the consumer. by an air-conditioner or. and can take care of the problem suitably and adequately. The brand which matches the desired image of a target market sells well. offers the best solution to the problem. The decision-making process consists of a series of steps which the consumer undergoes. rather than looking for new ones. by a water-cooler. is important for repeat purchase. Satisfaction of the consumer. This may be the problem of creating a cool atmosphere in your home. information search is carried out. personality. to find how the cool atmosphere can be provided. which are consumer’s emotions. Thereafter the purchase is made and the product is used by the consumer. Sales are important and sales are likely to occur if the initial consumer analysis was correct and matches the consumer decision process.g. The marketing strategy is successful if consumers can see a need which a company’s product can solve and. It is more profitable to retain existing customers. The figure below gives an idea of the above discussion. motives of buying. Position the product according to the customers likes and dislikes. e. The constant use of the product leads to the satisfaction or dissatisfaction of the consumer. which leads to repeat purchases. or to the rejection of the product. the decision is made to solve a problem of any kind. Consumer is also influenced by the marketing activities and efforts of the marketer. For a successful strategy. This leads to the evaluation of alternatives and a cost benefit-analysis is made to decide which product and brand image will be suitable. 77 . First of all.
Decision Process Fig.Fig. Creating Satisfied Customers 78 .
CHAPTER-4 Research Report TITLE: 79 .
To formulate the marketing strategy for increasing the sales of LCD TV in the market. The project was based on the survey plan. research methodology is the way to systematically solve the research problem.To study the “Advent of LCD TVs and their future prospects in India”. TITLE JUSTIFICATION: The study mainly deals with studying the response of Indian market towards the introduction of LCD TVs. To analyze the factors influencing the customers to choose a particular brand of LCD TV. SAMPLE SIZE: 80 . Therefore. which work as a base for drawing conclusion and getting result. it is impossible to complete the project and reach to any conclusion. 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. 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. Without a proper wellorganized research plan. In the present Research data has been collected from 50 dealers. RESEARCH METHODOLOGY: Research methodology is considered as the nerve of the project. To know the customers view towards LCD TV of different brands. The project also deals with the future prospects of LCD TVs in India. The Research is Exploratory Research. OBJECTIVES OF THE PROJECT: • • • • To analyze the LCD TV Market of North Delhi. The main objective of survey was to collect appropriate data.
SAMPLING METHOD: Percentage Method. Time was the major constraint. The dealers may be biased. METHOD OF DATA COLLECTION: Questionnaire Method has been used. The accuracy of indications given by the respondents may not be consider adequate. SAMPLING PROCEDURE: Open and Close Ended Questionnaire are used. LIMITATIONS OF STUDY • • • • The respondents were limited and cannot be treated as the whole population.50 dealers. SOURCE OF INFORMATION: Primary Data is used. 81 . SAMPLING TECHNIQUE: Convenient Sampling Method.
Market Share of different Brands of LCD TVs in North Delhi: 82 .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 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.
Percentage Share of Different sizes of LCD TVs in the market: Size 19/20 inches Percentage 31.30% 40/42 inches 5.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. 3.50% 84 .
Interpretation: 26 inches LCD TV is most sold in North Delhi with around 33% of the total customers buying this size of LCD TV. Various Criteria for choosing a particular Brand of LCD TV by the customer: Criteria for choosing a particular Brand of LCD Number of Dealers 85 . 4.
5.TV Brand Loyalty Price Mixed Criteria Product Innovation 20 11 18 01 Interpretation: This chart shows that the Indian Customers are Brand Concious. 20 of the total dealers feel that customers buy a product keeping in mind some particular brand. 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 .
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 .40% 49.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.80% 24. 6.
Most common size purchased by Upper Income Group = 32 inches. 23274 88 . 15362 26 inches Rs. Most common size purchased by Middle Income Group = 26 inches. The price comparison of various Brands of LCD TVs available in the market is as follows: Brand Samsung 19 inches 20 inches Rs. 14042 22 inches Rs. 7. 8. Most common size purchased by Lower Income Group = 20 inches.Interpretation: The middle income group is the major buyer of LCD TVs in North Delhi.
19700 42 inches Rs. 9990 Rs. 12063 Rs. 14200 32 inches Rs. 24700 40 inches Rs. 60426 Rs. 29779 Rs. 54990 89 . 55785 Rs. 20500 Rs. 14943 Rs. 60100 Rs 13900 Rs. 54300 Rs. 17800 Rs. 12990 Rs. 15120 Rs. 53800 Rs. 29930 Rs. 22529 Rs. 33600 Rs. 34500 Rs. 27450 Rs. 29500 Rs. 22600 Rs. 14200 Rs. 23542 Rs. 22340 Rs. 22000 Rs. 13910 Rs. 33712 Rs. 13016 Rs. 57617 Rs. 28233 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. 33131 Rs. 36460 Rs. 28320 Rs. 30562 Rs.
91 .Interpretation: Hyundai LCD TV is having the least price in the 19 inches range. Except Haier all other Brands have almost equal price for a 20 inch LCD TV. Only two companies are manufacturing 22 inches LCD TVs and LG’s LCD TV is cheaper in comparison with Samsung’s LCD TV.
92 .Interpretation: The price range offered by Markson is least in case of a 26 inches LCD TV.
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 6.000:1 8 ms 160W 20W(RMS) 450cd/m2 No No No Toshiba HD ready 2 HDMI 100 Hz Real Colour Algorithm 10-bit No 4.5 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.8 Billion Colours 8-bit No 33. 97 .500:1 8ms 140W 20W(RMS) 500cd/m2 No No No Philips HD ready 2 HDMI 100 Hz 29.000:1 8.000:1 16 ms 150W 30W(RMS) 500cd/m2 No No No Haier HD ready 3 HDMI ---Yes 15.5 ms 130W 30W(RMS) 500cd/m2 No No No Markson HD ready 1 HDMI --8-bit Yes 10.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.
CHAPTER-6 Observations and Findings 98 .
99 . 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.Observations and Findings • • • • • • • • • • • • The market share of different LCD TVs indicate that Samsung is emerging as a great Brand in the Indian market. HDMI ports. Around 50% of the total sale of LCD TV is because of the middle income group and they usually purchase a 26 inches LCD TV. Brand Loyalty plays a vital role among Indian customers while buying the LCD TV. Samsung has made a good name in case of sales of CRT TVs as well. FM radio. Keeping there room size in mind. 26 inch LCD TV is most preferred by the Indian customers. Markson is offering its LCD TVs at a very cheap rate in comparison with all other brands available in the market. contrast ratio. Bluetooth connectivity and hard drive are the secondary features which the customers want to have in the LCD TV. The competition is only between LG and Samsung for a 22 inches LCD TV. Price reduction and awareness campaigns can help a company to increase the demand of LCD TVs in the market. Image clarity is the major reason why people go for LCD TV instead of a CRT TV. USB playback.
CHAPTER-7 Conclusion and Strategy 100 .
The prospects of LCD TV market are quite bright in the near future. 2. 5. 1.2 Proposed Marketing Strategy The following changes in the product features can help Markson to improve its LCD TV sale in the market. Special additions on profits earned by distributors can be provided by the company to increase the sales of LCD TVs. FM radio and inbuilt Hard Drive option can also be added. 7. Bluetooth. The distributors need to be trained on how to market our LCD TVs. 3. 4. We need to have more distributors in North Delhi for LCD TVs.7. In classroom lectures. The proper selection of the marketing mix. The following points need to be considered while deciding on the distribution network: 1. And a proper marketing strategy can help a company to take the maximum advantage of this emerging trend. 6. Picture processing needs to be increased to 10-bit processing.1 Conclusion This project helped me tremendously in knowing how marketing activities are carried out in a real situation. Motion Flow and colour gamut specifications need to be displayed. Launch 32 inches and 42 inches LCD TV with high resolution and Full HD specification. 3. Our old distributors do not have Markson LCD TV in their show rooms to sell. 7. Increase its HDMI interface ports to two or three in number. 2. Increase the contrast ratio to about 35. 101 .000:1. I was able to understand only the theoretical work but now I have the practical experience about the marketing activities. Branding strategy and study of Consumer Behaviour can take a company to the new heights. Response time needs to be decreased to 4-6 ms.
A combo offer or a discount offer for old colour TV can be of great help to increase the sale of LCD TV. 2. Red and Blue while preparing the pamphlets and brochure. As I surveyed through the market I found out that all dealers are expecting that prices of LCD TVs will continue to crash till Diwali so I think that we should reduce the prices of LCD TVs so as to remain competitive. So. Select one or two models for these ad banners and pamphlets so as to target Young India. 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. Place the company ad banners at various metro stations and also in the metros as well. Financial Schemes on LCD TVs can also help us to increase the sale of LCD TV as we do not have to reduce our profits and less cash flow will be needed by the customer.4. all of us know that advertising plays a vital role in creating awareness among the customers about the product. I suggest that the company should launch a 22 inches LCD TV in market. Use fundamental colours like Black. 3. I think that a 22 inches LCD TV can cater for both the income groups well. These types of colours hit the customers psychologically. 102 . Now coming down to promoting. Try to sponsor events such as annual functions of the companies and large gatherings. So. So I think that following points should be considered for advertising LCD TVs: 1. 5. 4. No need to have actor/actress as a brand ambassador.
103 . So it is very important to develop the Brand Image in the market. 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. The two suggested Logos by me are as follows: Observe carefully: The person is enjoying the music. Brand Logo: I think that we need to change our Brand Logo from British Flag to something else. I also analyzed that Brand Loyalty is the main criteria among customers for choosing a particular brand of LCD TV.
C) Bringing colours of life together. 4. B) Making life pleasant and enjoyable. Brand Slogan: Brand Slogan tells that what the company is aiming for. Brand Personality: We should select a brand personality as such which hits the minds of the Young India (25-40 years of age group).Metallic M represents that our effect is everlasting. 104 . Two such slogans which can help the company are as follows: A) Selling satisfaction not products. 2. so choose a brand ambassador who represents the Image of Young India. 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. It should be such that the customer feels that he is a part of the process. 3. It gives a signal of good infrastructure of the company. A Free Toll number also gives an indication of the brand. This age group holds the maximum buying capacity.
CHAPTER-8 BIBLOGRAPHY 105 .
pdf www.scribd.References: Marketing Management by Philip Kotler.markson.com/npps/story.emsnow. http://www.rncos.htm www.com www.com www.in/pdf/surveys_reports/consumer-durables-sector.com/Report/CP13_toc.net http://www.kioskea.en.indianmba.com www.cci.cfm?id=27593 www.wikipedia.in 106 .