36973807 Final Videocon Crt Tv Project

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Videocon Industries

Corporate Profile

Videocon is an industrial conglomerate with interests all over the

world and based in India. The group has 17 manufacturing sites in

India and plants in China, Poland, Italy and Mexico. It is also the third

largest picture tube manufacturer in the world.

The Videocon group has an annual turnover of US$ 4.1 billion, making

it one of the largest consumer electronic and home appliance

companies in India. Since 1998, it has expanded its operations

globally, especially in the Middle East.

In India the group sells consumer products like Colour Televisions,

Washing Machines, Air Conditioners, Refrigerators, Microwave ovens

and many other home appliances, selling them through a Multi-Brand

strategy with the largest sales and service network in India. Videocon

Group brands include Sansui, Toshiba, Electrolux, Kenstar, Next etc.

Videocon is one of the largest CPT Glass manufacturers in the world,

operating in Mexico, Italy, Poland and China.

On May 23, 2008, Videocon announced that it is studying an invitation

from General Electric (GE) to bid for its century-old appliances division,

, which it has put up for sale.

Today the group operates through 4 key sectors:

1. Consumer durable

2. Thomson CPT

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3. CRT glass

4. Oil and gas

Consumer Electronics, Home Appliances & Compressor

manufacturing in India

The company enjoy a pre-eminent position in terms of sales and

customer satisfaction in many of our consumer products like Colour

Televisions, Washing Machines, Air Conditioners, Refrigerators,

Microwave ovens and many other home appliances, selling them

through a Multi-Brand strategy with the largest sales and service

network in India. Refrigerator manufacturing is further supported by

inhouse compressor manufacturing technology in Bangalore.

Display industry and its components

With the Thomson acquisition Videocon has emerged as one of the

largest Colour Picture tube manufacturers in the world operating in

Mexico, Italy, Poland and China, continuing to lead through new

innovative technologies like slim CPT, extra slim CPT and High

Definition 16:9 format CPT.

Colour Picture Tube Glass

Videocon is one of the largest CPT Glass manufacturers in the world

with a high level of experience and technical expertise operating

through Poland and India. Videocon will leverage on this synergy after

the Thomson acquisition to internally source glass for its CPT

manufacturing increasing efficiencies and lowering costs.

Oil and Gas An important asset for the group is its Ravva oil field with

one of the lowest operating costs in the world producing 50,000 barrels

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of oil per day. The group has ambitious plans for expansion in this

sector globally.

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ABOUT CONSUMER ELECTRONICS INDUSTRY

1.History of consumer Electronics in India

The Electronics Industry in India took off around 1965 with an

orientation towards space and defense technologies. This was rigidly

controlled and initiated by the government. This was followed by

developments in consumer electronics mainly with transistor radios,

Black & White TV, Calculators and other audio products. Colour

Televisions soon followed. In 1982-a significant year in the history of

television in India the government allowed thousand of Colour TV sets

to be imported into the country to coincide with the broadcast of Asian

Games in New Delhi. 1985 saw the advent of Computers and

Telephone Exchanges, which were succeeded by Digital Exchanges in1988. The period between 1984 and 1990 was the golden period for

electronics during while the industry witnessed continuous and rapid

growth.

From 1991 onwards, there was first an economic crises triggered by

the Gulf War, which was followed by political and economic

uncertainties within the country. Pressure on the electronics industry

remained though growth and developments have continued with

digitalization in all sectors and more recently the trend towards

convergence of technologies.

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In recent years the electronic industry is growing at a brisk pace. It is

currently worth $ 10 Billion but according to estimates, has the

potential to reach $ 40 billion by 2010. The largest segment is the

consumer electronics segment. While is largest export segment is the

consumer electronics segment. While is largest export segment is of

components.

2. CURRENT SCENARIO

CRT-TV Falling as India Embraces LCDs

With Liquid Crystal Display-Television (LCD-TV) sales in India gaining

momentum quickly, 2010 will be the last year that Cathode Ray Tubes

(CRTs) can lay claim as the leading television display type in the

country on a revenue basis, according to iSuppli Corp.

India represents one of the last strongholds for CRT-TVs, withconsumers in other major economies having transitioned the majority

or nearly all of their television purchasing to LCD display technology in

recent years, said Riddhi Patel, director of television systems and

retail services for iSuppli. However, the allure and declining prices of

LCD-TVs, along with increased consumer awareness, have spurred

sales of the flat-panel televisionsand eroded the dominance of CRT

TVs. As a result, LCD-TV revenue in India will exceed that of CRT-TV

starting in 2011. LCD-TV shipments will catch up the year after,

exceeding those of CRT TVs starting in 2012.

CRT-TV revenue in India in 2011 will decline to $1.6 billion, down 32.3

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percent $2.3 billion in 2010. In contrast, LCD-TV revenue will rise to

$3.5 billion in 2011, up a stunning 94.3 percent from $1.8 billion in

2010.

Meanwhile, CRT-TV unit shipments will decline to 9.4 million in 2012,

down from 11.1 million in 2011 and from 15.7 million in 2010. At the

same time, LCD TV shipments will increase to 9.7 million units in 2012,

up from 6.6 million in 2011 and from 3.3 million in 2010.

QuickTime and adecompressor

are needed to see this picture.

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No Local Production: While demand for LCD-TVs in India will increase

rapidly over the next five years, LCD-TV growth still will not be enough

to compel TV manufacturers to open up local production plants for LCD

panels or modules in the country. Samsung, LG and Dixon are

increasing their presence in the country with final assembly plants, but

unless demand in India increases significantly, localized LCD-TV

production does not appear to be feasible, especially as Korean and

Chinese LCD-TV OEMs prefer to manufacture their products in their

own plants.

Assembly plants, on the other hand, are catching up in the country,

with key players either already possessing facilities or announcing

plans to invest in final-assembly plants in India. The Indian government

is also involved by reducing customs duties on important LCD panels.

Retail Expansion: While localized plants may not be a reality in the

near future, the increasing demand for LCD-TVs is putting increased

pressure on retailers in India to launch exclusive durable-only retail

outlets. Meanwhile, several players in the marketsuch as LG Display,

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Samsung Electronics Co. Ltd., Whirlpool Corp. and India-based

Videoconare busy forming relationships with retailers and other

large-format retail chains in order to develop the appropriate sales

channels to accommodate incoming demand for LCD-TVs.



Source: DisplaySearch India TV Market: TVs Emerging Land of Opportunity

The consumer durables market in India is valued at US $ 4.5 billions

currently. In 2008, microwave ovens and air conditioners registered a

growth of about 25%. Frost- free refrigerators have registered

significant growth as many urban families are replacing their old

refrigerators. . Washing machines, which have always seen poorgrowth, have seen reasonable growth in 2006. More and more Indians

are now buying electrical appliances due to change in electricity

scenario. The penetration level of color televisions (CTVs) is expected

to increase 3 times by 2008.

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On the brick of rapid economic growth, India has witnessed the

dynamic change in country's consumer electronics industry. In last few

years the industry has been witnessing significant changes in retail

boom, growing disposable income and availability of easy finance

schemes. One electronic gadget that has brought new revolution in

Indian Electronic Industry is Television Set. Today, India is fast

emerging as the key driver in the global television market both as a

manufacturer and consumer. In recent years, the market for

televisions in India has changed rapidly from the conventional CRT

technology to Flat Panel Display Televisions (FPTV).

Currently, the split between CRT and FPTV is around 97% and 3%

respectively. In addition to this, one of the most striking changes

sweeping across the colour television market in Indian market is the

exponential growth of the flat panel television (FPTV) market, in

common parlance called the liquid crystal display (LCD) and plasma

televisions. Moreover, as per recent research data available, the global

market for FPTV is expected to grow from 51 million units in 2006 to127 million by 2009.

Looking at the present scenario, over the last couple of years, the LCD

prices have even dropped by around 30 per cent annually. Some of the

important factors that boasted this growth also include the increasing

awareness of the advantages of LCD televisions, the growing

availability of the product across dealer counters and the Finance

schemes in the market. Besides this, as a manufacturing hub, the

television industry is improving more and more. There are many

domestic and MNC companies that have increased their production

bases in the country. Easy availability of low- cost skilled labor and the

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emergence of SEZs, which are tax-free zones are some of the key

factors that have resulted in growth of these manufacturing units. In

fact, encouraged by tax-breaks, new manufacturing units are coming

up in less-developed regions now.

Today, India is one of the few emerging countries to have an excellent

component supply base in terms of manufacturing facilities for glass

and color picture tubes, so it helps it a good choice for all those

companies who are looking to take benefit of this emerging market.

In present scenario top player for colour television are

LG

VIDEOCON

SAMSUNG

SONY

ONIDA

PHILLIPS

LG ELECTRONICSLG Electronics rightly understood the consumer motivations to create

magnetic products, price them strategically, position them sharply and

keep making the magnetism more potent. Having understood the finer

differences in consumer motivations, it opted for sharp- arrow

reasons-to-buy differentiation over the blanket-all approach taken by

most of the other players. It is an aggressive marketer. It focuses on

low and medium price products.

SAMSUNG

Initially the strategy of Samsung in India was to create premium image

by emphasising global brand. After facing stiff competition from

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another Korean major- LG, Samsung also started playing price game. In

2004 it reverted back to its premium positioning, although it resulted

in some loss of market share. In line with the Global Digital Initiative of

the Parent Company, Samsung India is seeking to acquire digital

leadership in India by introducing its digital ready televisions like the

40" LCD Projection TV, 43" Projection TV and the Plano series of Flat

Colour televisions.

ONIDA

Its popular devil ad although had engendered a strong emotional pull

towards the brand, technologically it represented no advancement.

The company plugged the gap by touting its digital technology. Like

Videocon, it has also been able to hold its market share. The world-

class quality of Onida has enabled the company to make a

breakthrough on the export front. It has technical tie- up with the Japan

Victor Company, better known as JVC. So focused is Onida on

positioning itself on the premium, high- tech plank that it is even

planning to push its own envelope on obsolescence, much. The

strategy is aimed at further broad basing the product offering of thecompany, which has largely dominated the top-end of the television

market, across multiple market segments.

VIDEOCON

Videocon has always been a price player and has an image of a low

price brand. This entails providing more features at a given price vis--

vis competitors. It has taken over multinational brands to cater to

unserved segments, like Sansui- to flank the flagship brand Videocon in

the low to mid priced segment, essentially to fight against brands like

BPL, Philips, Onida and taken over Akai- tail end brand for brands like

Aiwa.

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Videocon is one of the largest manufacturers of television and its

components in India and thus has advantages of economies of scale

and low cost due to indigenization. It has the widest distribution

network in India with more than 5000 dealers in the major cities. It also

has a strong base in the semi-urban and rural markets. Due to its

multi-brand strategy, it has at present multiple brands at the same

price point. This has led to a state of diffused positioning for its brands.

It has also led to a cannibalization of sales among these brands. The

flagship brand Videocon has lost market share due to the presence of

Sansui in the same segment. Because of reduction in import duties on

CPT the cost advantage of Videocon is also on the decline. Hence it is

facing rough weather and also trying to boost exports.

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PRODUCT LIFE CYCLE (PLC) OF CRT TV IN INDIA

The PLC for television has a SCALLOPED PATTERN

Introduction Stage (1982 1983) The CRT TV was introduced.

Growth Stage (1984 to 1986)-The industry was at the nascent stage

where the Black & White Television was pre-dominant. The sale of CRT

TV increased.

Maturity Stage (1986 to 1989)

The industry went into the maturity stage with lot of domestic

competition coming in the market.

Decline Stage (1989-1991)

Penetration levels into rural India were at low levels. Urban segmentpurely dominated CRT TV market while there was a huge untapped

market.

Re-introduction Stage: Entry of MNCs Introduction1992 to 1994.

The MNCs entered into India resulting in a greater degree of

penetration. They brought lot of products having a lot of features.

Growth (1995 to 1999) - The CRT TV Market grew at a very fast rate.

The demand for CRT TV s increased Manifold with aggressive

marketing techniques, resulting in increased penetration and cut

throat competition between domestic players and MNCs. The growing

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demand for flat CRT TVs was propelled by the declining price

differentials between FCTV and CCTV segments.

Maturity Stage (2000 to 2002-03) - The market of FCTV and CCTV

were consolidating. After 2002-03- Cycle Continues the Product Life

Cycle has been going through a lot of Stages where before the decline

of the product, a newer version has been launched in the market and

the PLC has gone through the phases again. These innovations include

LCD, Plasma in the past. Now HDTV has also been launched and that

has led to a rising PLC.

Decline Stage (2003- onwards): CRT TV manufacturing declining due

to new technology up-dation. Companies are lunching new products

like LED TV, LCD TV, DTH TV, that is main cause of declining of CRT TV

market.

Porters Model

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Suppliers(Supplier

Power)

Potential entrants

(Threat of

Entry)

Industry

Competetitors

(Segment rivalry)

Substitutes

(Threat of

substitutes)

Buyers(Buyer

Power)


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In order to understand the industry better, we analyze the industry

using Porters Five Force Model-

- Threat to entry

- Rivalry of among existing firms- Bargaining power of buyers

- Bargaining Power of Suppliers

- Threat of Substitutes

Threat to Entry-

- Entering the CRT TV market isnt very easy. One of the most

important features needed is a good distribution system which isnt

something that can be developed overnight and technology up-dation

in CRT TVs.

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- Also a television today is a style statement. Therefore the brand plays

an important role in influencing the purchase decision. For a new

company then entering this market, not having a recognized brand

name is a threat to entry.

Rivalry among existing firms-

- There is strong competition among the current players. The main

players being LG, Samsung, Onida, Videocon, Philips, Sansui. Some of

the regional players are Hyundai and Haier are new entrants in the CRT

TV space in addition to a number of small regional players.

- This increased competition has ensured that advertising costs are an

integral part of the players total cost. A lack of product differentiation

means that price is a competitive feature that intensifies rivalry. The

highest price reductions during 2002-03 to 2005-06 were in the 20inch

and 21inch CRT TV category.

- With the future being in LCDs, this market is likely to see price

reductions future.- It is expected that realizations will fall with increased competition.

Bargaining Power of Buyers-

- The TV market today is a consumers market where the consumer has

the upper hand with him having the power of choosing from a variety if

brands.

- This bargaining power of the buyer has forced the players to offer

credit facilities on sale, to provide lower EMIs and excellent after-sales

service.

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- The intense dealer competition also benefits the consumer in terms of

prices and offers available.

- Inventory carrying costs for television companies are high. This is a

boon for the consumers as it translates into higher bargaining power

for the consume

Threat of Substitutes-

- For a television, the substitute can only be a functional substitute.

The functional use of a television is to watch programs, live events etc.

This today can also be done on a computer.

- Theaters too can be a substitute to watching movies at home.

- Today with various multiplexes and theaters providing screenings of

live events such as sports telecasts etc along with the luxury of good

food and the opportunity to enjoy the event with a number of other

enthusiasts, the TV can be substituted if the TV is bought only to watch

certain events.

- However if the television on considered to be a style statement and a

lifestyle statement, then consumers will seek to keep upgrading the

type and the model of their television sets.

Bargaining Power of Suppliers-

- PCBs (Printed Circuit Boards) & CRTs (Cathode Ray Tube) are key raw

materials in the production of CTVs.

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- CRT accounts for 46-48 per cent of the total raw material costs of a

CTV. PCBs and housing components account for 33-39 per cent of total

raw material costs.

- Domestic CPTs prices tend to follow Global price trends. Therefore the

suppliers do not have much of bargaining power in this regard.

-Cabinets are sourced from plastic manufacturers and as these

manufacturers supply to different industries, they therefore do have a

bargaining power, especially in comparison to CRT suppliers.

VIDEOCON'S STRATEGIES

Multi-brand strategy

Videocon International was the first Indian company to adopt the

strategy of multi-brands. Apart from its mid-priced brand Videocon, the

company now hawks Toshiba, a premium brand, and the low-priced

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brands Akai and Sansui. The multi branding technology paid off as

Videocon managed to hold on to a combined market share of around

19.6 percent, with LG at 25.9 percent and Samsung at around 13.8

percent.

Overall, the shift in the power to trade is probably one of the defining

developments. It is important since the TV companies themselves have

taken it seriously and embarked on crafting longer-term strategies to

accommodate this development. The effectiveness of their strategy

and the responses of the other players promise to deliver a few more

years of enterprising developments in the Indian TV market.

Backward Integration

Videocon integrated backwards by getting into manufacture of

components such as electron guns, metal parts and deflection yokes

for TVs and compressors, and electric motors and plastic components

for households appliances such as washing machines, refrigerators and

Air conditioners. The group integrated further to get in to manufactureof glass panels and funnels, the key components for the manufacture

of color picture tubes.

Videocon enjoys a unique synergy in the global CTV business from

glass to CRT (Cathode Ray tubes) to CTVs. - (From Sand to CTV).

Together with other components for households appliances. This high

degree of backward integration bestows upon the company a unique

benefit over competition.

Videocon's revenue mix

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Performance Measures

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SEGMENTATION, TARGETING & POSITIONING (STP)

SEGMENTATION:

Market segmentation is the process in marketing of dividing a market

into distinct subsets (segments) that behave in the same way or have

similar needs. Because each segment is fairly homogeneous in their

needs and attitudes, they are likely to respond similarly to a given

marketing strategy. They are likely to have similar feelings and ideas

about a marketing mix comprised of a given product or service, sold at

a given price, distributed in a certain way and promoted in a certain

way.

The process of segmentation is distinct from targeting (choosing which

segments to address) and positioning (designing an appropriate

marketing mix for each segment). The overall intent is to identify

groups of similar customers and potential customers; to prioritize the

groups to address; to understand their behavior; and to respond with

appropriate marketing strategies that satisfy the different preferences

of each chosen segment.

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Segments based on Income

Plasma: Income group of more than 50,000

LCD: Income bracket of Rs 20,000 and above

Slim: Consumer in the income bracket of Rs 9000-15000

Flat: Consumer in the income bracket of 7000-12000

Conventional: income bracket of Rs 3000-6000

Segments based on social class

Plasma: rich class

LCD: upper middle class and rich class

Slim: middle class

Flat: middle and lower middle class

Conventional: lower economic class.

Benefit Segmentation:

Conventional, Flat screen Slim, LCD, and Plasma can also segmented

on the basis of benefits that an end consumer would receive fromthem.

User Status:

TV market can be classified into non users of TV and potential users in

term of graduating to a higher segment like slim, LCD,Plasma from

basic conventional TV

Loyalty status: On the basis of Loyalty status

Hardcore Loyal: brand loyal to Videocon for a long time in terms of

purchasing products of Videocon

Shifting Loyal: who shift loyalty from other brands to another

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Switchers: not loyal to any brands so attract them to Videocon and

convert they brand loyal.

TARGETING:

Once the firm has identified its marketing-segment opportunities, it

has to decide how many and which ones to target. Marketers are

increasingly combining several variables in an effort to identify smaller,

better-defined target groups.

The decisions involved in targeting strategy include:

* Which segments to target?

* How many products to offer

* Which products to offer in which segments

In premium segments like flat screens and FDPs the growth in sales

has been many times the industry growth. More importantly, high end

product sales are no longer restricted to metros. Consumer in tier-2

cities seems to be as evolved in lifestyle needs. The consumer profile,

too, has changed. Higher disposable incomes, greater aspirations and

younger demographic have increased demands for the technologies.And Videocon is targeting this segment.

POSITIONING

Positioning has come to mean the process by which marketers try to

create an image or identity in the minds of their target market for its

product, brand, or organization. It is the 'relative competitive

comparison' their product occupies in a given market as perceived by

the target market.

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Once the competitive frame of reference for positioning has been fixed

by defining the customer target market and nature of competition,

marketers can define the appropriate points-of-difference and points-of

parity associations.

Points of Parity (POPs) are associations that are not necessarily unique

to the brand but may infact be shared with other brands. They

represent necessary-but not necessarily sufficient-conditions for brand

choice.

Videocon's Points-of-Parity are good quality Picture and good sound.

Points-of-Difference (PODs) are attributes or benefits consumers

strongly associates with a brand, positively evaluate, and believe that

they could not find to the same extent with a competitive brand.

Videocon's POD is the quality product with low cost.

With the strong backward integration Videocon can provide the

products with low cost.

Thus, Videocon is positioned itself as a reliable and value-for-

money product.

4Ps

The 4Ps includes the Product, Price, Place and promotion.

Product Mix

Product mix is the set of all product and items a particular seller offers

for sale. Product mix consists of various product lines.

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The width of a product mix refers to how many different product lines

the company carries. The Videocon television has product mix width of

five lines. I.e. plasma, LCD, Slim, flat and Conventional.

The length of a product mix refers to the total number of items in the

mix.

I.e. for the line of LCD the length is 2 as it has two items 50 PDP and

42 PDP.

The depth of the product mix refers to how many variants are offered

of each product in the line.i.e. For LCD the depth will be 2. As Videocon

is offering only one product in 50 PDP and 42 PDP.

The three product-mix dimensions permit the company to expand its

business in three ways.

It can add new product lines, thus widening its product mix.

It can lengthen each product lines.

It can add more product variants to each product and deepen itsproduct mix.

Width, Length & Depth

Width = 5 (Plasma, LCD, Slim, Flat, Conventional)

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In the product mix of Videocon, it is having 37 different models, which

gives them their product line Depth.

PLASMA

Plasma television technology is similar to the technology used in a

fluorescent light bulb. The display itself consists of cells. Within each

cell two glass panels are separated by a narrow gap in which neon-

xenon gas is injected and sealed in plasma form during themanufacturing process.

The main advantage of Plasma over CRT technology is that, by utilizing

a sealed cell with charged plasma for each pixel, the need for a

scanning electron beam in eliminated, which, in turn, eliminates the

need for a large Cathode Ray Tube to produce video images. This is

why traditional televisions are shaped more like boxes and Plasma

televisions are thin and flat.

Advantages of Plasma Television:

Plasma LCD Slim Flat Conventional

50PDP 42 LCD 29 slim 29 flat 21 FFST

42PDP 32 LCD 21 slim 21 flat 20 conv

26 LCD 15 flat 14 conv

20 LCD

19 LCD

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Largest Screen Formats.

Superior Contrasts.

Versatile.

Capable Of Displaying Full HDTV & Dtv Signal.

Capable Of Displaying Xga, Svga & Vga Pc Signal.

Wide Viewing Angle.

Wide Rage Of Richer Color Over 16 Million.

Superb Realistic Images.

Less Expensive Than Lcds.

Life More Than 30,000 Hours.

Wide Screen Aspect Ratio around 16:9.

Perfect Flat Screen.

Uniform Screen Brightness.

Slim & Space Saving Design.

50" PDP

Integra 50

10000:1 Contrast Ratio3:2 & 2:2 Pull Down

HDMI Compatible

3-D Video Noise Reduction

PC Input

42" PDP

16.77 Million Color

10000:1 Contrast Ratio

3.2 & 2:2 Pull Down

1500cd/m2 Brightness

HDMI Compatible

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3-D Video Noise Reduction

LCD

The flabs are out and now technology has switched over to sleek and

slim products, LCD being the prominent amongst them. LCD

technology is the recent breakthrough in consumer electronics and

because of its esteemed advantages this segment is growing day by

day.

Videocon are launching this range under the sub brand Integra.

INTEGRA term indicates the integration of various systems

connectivity with LCDTV.

This is an integration of best sound quality and excellent picture

quality.

What is TFT-LCD?

Meaning of this term is Thin Film TransistorLiquid Crystal Display. TFT

technology used in this category offers the best image quality in flat

panels. This technology is also called as Active Matrix Technology.

40" LCD

32" LCD

26" LCD

20" LCD

19" LCD

Slim

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With Continuous Research & Development Videocon brings a

revolutionary advancement in physics & brings new Slim & Trim

Television.

The Most significant feature of the Slim & Trim Television is its one kind

of super slim picture tube technology. This has enables us to make the

TV 42% Slimmer.

Slim Picture tube is a product with reduced depth providing the TV and

monitor producers with opportunity to design Slim, flat and stylish TVs

comparable to plasma or LCD panels maintaining Good picture Quality

29" SLIM

21" SLIM

Flat

Videocon Bada Woofer with

Surrounds Bass Technology

Bass Amplification by Dynamic Alignment (BADA) woofer is a

revolutionary technology that offers a new sound to create anunbelievable sound space

Videocon unique Bazoomba Woofer Technology

Videocon's superior Bazoomba Woofer Technology incorporates a

unique conjugate arrangement of Woofer motors that ensures rich bass

reproduction.

The Bazoomba Woofer Technology

Enables the generation of the lowest bass frequencies from a small

enclosure (Bazoomba tube). Enables cleaner and tighter bass

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reproduction due to acoustic cancellation of distortion in the even

harmonics

29" TFT

21" TFT

15" TFT

Conventional TV

21" FFST

20" CONV

14" CONV

Pricing

The pricing of the Videocons various models is as following.

Plasma TV: Rs. 59,990 - 2, 40,000

LCD TV: Rs. 28,400 89,900

Slim TV : Rs. 10,400 18,900

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Flat TV : Rs. 5,500 18,400

Conventional TV : Rs. 4,600 - 9,500

Place

Videocon has its presence all throughout India.

They have their presence in 25 states and each state has at least 2

divisions per state. In total they are having 78 divisions.Videocon has

around 1800 dealers in India. They are having 96 service centers

across India.

Promotional Activities

Focusing on LCD, Plasma and 29 Flat TVs since 2006.

By institutional selling. Company used both TVC as well as print media

for promotion. The company is using outdoor media promotions in

hording and bus shelters to high light the feature packed advantages.

Major tie ups in the background IIT alumni/ Videocon Santos ham film

awards 2006 with ZEE and ICC Cricket champions trophy.

Seasonal offers

Trip to Germany during FIFA world cup

Videocon bonanza offer ( har din diwali) during diwali

Chance to win car, motor bike and LCD TV's.

Brand ambassador

Shahrukh Khan

M S Dhoni

Total spending of 80 crores in 2006 on advertisements.( 35 crores for

CTV)

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Sponsorship

Videocon is inspired heavily by the uplifting values perpetuated by

sports. Its ability to draw people together irrespective of differences in

race, gender, religion and country. Unity of spirit and purpose is

ultimately what builds bridges between diverse cultures. This is the

core belief of a group that today has operations spread over a cross-

cultural milieu worldwide. Also, at the heart of sports is fair play, a

virtue which enjoys exalted status among values cherished by

Videocon.

The group has been deeply involved in supporting sports. Its

sponsorship of cricketing events across the globe underlies its

commitment and passion for sports as well as its goal to connect with a

global audience.

It is a matter of pride that Videocon's Audio Visual products entertain

enthusiasts and fans passionate about watching sports worldwide.

A breakdown of the statement above reveals a means and endapproach, where the end is articulated at the beginning with the

means linked to it.

Their famous tag line

One of the only companies in the world to convert sand to TV

Competitors strategies

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Differentiation Strategy adopted by other players:

LEADER-LG

Product localization is a key strategy used by LG.

* LG came out with Hindi and regional language menus on its TV.

* Introduced the low-priced Cineplex and Sampoorna range for

the rural markets.

* LG was the first brand to introduce gaming in CRT TVs. In

continuation of its association with cricket, LG introduced the cricket

game in CRT TVs.

CHALLENGERS- SAMSUNG

Samsung considers After Sales Service as a key differentiator for

Samsung products. In order to deliver prompt and easily accessible

service, Samsung

India has set up a widespread network of company owned as well asAuthorized Service Centers to service its customers. The Samsung

Service Plazas, as the Company owned Service Centers are called, are

a first in the industry.

FOLLOWERS- ONIDA AND PHILIPS

Onida

Onidas differentiation strategy is based on its brand based advertising

rather than feature based advertising. They used its brand mascot The

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Onida Devil and its punch line Neighbors Envy Owners Pride to

create Brand awareness of their product.

Where its competitors were focusing on advertising of the features of

their products, Onida has concentrated only on their Brand. The Devil

helped Onida gain substantial market share and brand recall among

the customers.

Philips

Philips Differentiation Strategy is their Simplicity Led Design. Philips

believes in the unity of form and function. Their technology is easy to

use. In Philipss world, they are trying to improve the consumers life.

Philips is known for its consumer insight and empathy. Therefore, their

differentiation strategy includes making technology simple to use.

NICHER-SONY

Sony is focusing on providing quality products to its customers and

differentiating itself from the other players.

The positioning strategy adopted by other players:

Leader-LG

It is positioned as a premium brand that pioneers the most innovative

technologies in India.

Challengers - Samsung

Samsung has positioned itself as a brand that brings communication,

entertainment and information in easy to use digital device.

Nicher- Sony

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Sony Positioned as a premium product giving the best quality to cater

to the demands of its high end customers.

Recommendations (Strategies)

Product Strategy

1. Stop all curved CRT PT production

2. Shift focus to LCD CTVs; target: by December 2007.

3. Launch Slim 21 and focus Slim 29 immediately. Target is to

have almost all CRTs production shifted to Slim by 2007

4. Take full advantage of Digital and HDTV revolution, gain

leadership in HDTV Slim TV segment through OEM and model

mix worldwide strategy.

5. Study unique product range / pro large to fill market gaps in

markets such as Asia and Eastern Europe / CIS / South America

6. Focus on reduction of costs through reduction of glass, shift toAK mask and reduction of process rejection.

Sales Strategy

1. Improve relationship with existing clients ; Use of Thomsons

excellent relations as preferred supplier to maximize sales

2. Improve service and quality without putting pressure on price

structure

3. Fetch a better price and avoid crisis of huge stock.

4. Leverage Slim product offering

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5. Launch LCD panels assembly to be a major actor of the Flat

Panel Displays market (which is expected to account for 50% of

the market by 2012).

6. Benefit from OEM CTV business with the help of Videocons CTV

division, invest for new models, introduction of new technologies.

7. upgrade to LCD's schemes

easy EMI.

Re. 1 offer.

8. Improve after sales service

9. Free service camp on the wheels.

Industrial Strategy

1. Consider improvement in production lines set-up: investments,

line speed up / mergers? Target is to increase output and

decrease product costs by increasing productivity of existing

lines2. This will reduce manpower and overheads per picture tube by

30% that will be redeployed on new activities in the sites (new

technologies)

3. Improve the furnace output in the Poland Glass factory by

making some changes into furnaces including electrical boosting.

Consider increasing capacity through one more furnace.

4. t is envisaged that 100m will be invested in the next 2 years for

this purpose

5. Expand into LCD panels back-end assembly (from buying LCD

arrays from big suppliers like LG, SDI, CMO, AUO, Sharp)

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Cost Strategy

1. Leverage the strong base of Videocons glass business:

Thomson-Videocon partnership will have a very strong

negotiation position and can reduce impact of glass pricing

volatility

2. Reduce production cost by upgrading and improving the

production lines. Thomson-Videocon partnership will have its own

base of additional 4 million units CTV (other than India)

3. Necessary to rationalize R & D efforts, necessary to make its cost

below 1.5% of sales

Product Development

1. i-TV web enabled TV at the price of 13,900 with exchange offer

for an older version.

2. TVs With hard disk to store programs.

3. Wall mounted Flat CTVs at the price of 12,990.

4. Aimed at fulfilling needs of customer who can not buy LCDs but

prefer to do away with CTV models which occupy space in livingrooms.

5. CTVs with inbuilt set top box

6. Tie up with DTH player and provide annual subscription offer.

7. to provide Direct to home services.

8. Bluetooth enabled CTV.

New Product Line

Introduce CCTVs as it has the demand in several areas like restaurants,

airport, railways stations,banks, hospitals, shopping malls, company

offices.

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A lifestyle statement

People do not see the television as a mere electronic device providing

sight & sound. It has now become an entertainment experience and a

lifestyle statement that people are willing to pay for. Since consumers

are ready to shell out money for a lavish entertainment experience,

there is today no limit to the number facilities that a television can

envision of offering. From in built recording to internet facilities to

supreme sound etc. The opportunity for this industry lies in coming up

with new features to the conventional CTV. There is therefore lot of

scope for growth and innovation.

Documents

36973807 Final Videocon Crt Tv Project