Documente Academic
Documente Profesional
Documente Cultură
http://free-assignment-exchange.blogspot.com/
visit
http://free-assignment-exchange.blogspot.com/
ICLES
MOTILAL JHUNJHUNWALA COLLEGE
OF
ARTS, SCIENCE, COMMERCE
AND
MANAGEMENT STUDIES
CERTIFICATE
This to certify that
Mr./Ms.______________________________________________
_
Of BMS semester _______ has undertaken &
completed the project work
titled________________________________________________
__
During the academic year __________ under the
guidance of Mr./Ms. ___________________ submitted on
____________ to this college in fulfillment of the
curriculum of Bachelor of Management Studies,
University of Mumbai.
Research Design
The report is an outcome of primary data collection, secondary data collection
and analysis of the information received from these sources. The primary data collection
was done with the help of interviews with the personnel of LG and Hitachi, and
consumers. The secondary data collected, is from various websites, magazines,
newspapers and brochures.
Objective
Indian AC market is in its growing stage with many players flooding the market
after the relaxation in the exercise levels and import duties by the government. The
Indian AC market was basically governed by the central ACs and the room AC market
picked up only after the relaxation in duties . Earlier people were only interested in
buying unbranded ACs and no player in the global market thought of India as a big
market and the market had very limited players with Carrier Aircon ruling the roost for
almost ten years. LG came and revolutionerized the Indian room AC market by changing
the way people perceive the utility of an AC .They sold their ACs by positioning them as
the health air conditioners which along with cooling the air also purifies the air thus
giving cool, healthy and fresh air. This concept gelled with the Indian consumer and as a
result LG is the market leader in room ACs today.
Hitachi is also fast gaining the market share after the launch of its Logicool range
of air-conditioners this summer and is third in the room ac market behind Samsung.
People have been buying the Ac because of its smart positioning of perfection backed
with strong humour oriented advertising. The success of these players has attracted a lot
of other players in the market and suddenly the small room ac market which was worth
some Rs.500 crores in 1995 is valued at Rs.1800 crores today and continues to grow at
the rate of 20 % every year.
This project report aims to research why people are going for branded ACs in the
room sector and how the focus is shifting from positioning of product to the positioning
of brands. The report has also tried to trace the importance of positioning of a brand by
comparing the various aspects of brand positioning taking into consideration the
strategies of the two leading players LG and Hitachi.
Scope
. Consumers- The report can be of great help to any prospective buyer of an air
conditioner. The report will help him to have a look at the various players in the market
and what each one of them has to offer to the consumer. The consumer can directly refer
to the analysis of the print advertisements that will help him to identify what each brand
has to offer to its consumer. The consumer can also have a look at the market standings of
each brand with respect to the sales in the current year.
Executive summary:
The project is about the Indian Air Conditioning market. It covers both the
industries viz. CAC and RAC with respect to the trend in the market, market players,
price of the market, factors influencing the demand etc. The core focus has been on the
RAC market, which is one the, few sectors growing at a rate of more than 25% per year.
This is so because the market is in the growth stage whereby the penetration level is only
2%. As a result the room AC market is getting overcrowded with players from all over
the world with a view to capture the market share of this growing market. People are
going for the branded products rather than the unbranded ones.
The project highlights the aspect of branding and the benefits of branding of
products. It also deals with the positioning strategies being used by various brands to
occupy the perpetual space in the minds of the consumer. There is an analysis of the
positioning of the various brands with respect to print advertisements. Also a comparative
analysis has been done between LG and Hitachi, which are the leading players in the
market. In the concluding part of the project some suggestions have been offered with
respect to certain issues, which will govern the Products being launched by various
brands in the room AC market in the near future.
Chapter 1
Introduction
History Of Air-conditioner
This was a classic temperature and humidity control problem. Carrier then
invented the worlds first air-conditioning system. Carrier waited till 1906 before
patenting this contraption of his, loosely termed as an approach for treating air. It was
the beginning of bigger thing for carrier. He later went on to create the biggest air-
conditioning firm which now a days operates globally with name of Carrier Aircon and
has a market share of over the 40 % across the world.
Though now the market is flooded with a lot of players like National, LG,
Samsung, Daikin, Blue Star, etc. and the technology has increased tenfold, this American
giant MNC ( Carrier Aircon) and William Carrier will always be in the eyes of the world,
simply because they were the ones who gave the world an industry which is worth
billions over the global market and creates employment for millions of people.
Air-conditioner-The Product
Room air conditioners operate on electricity or gas and are enclosed in a single
cabinet. They blow the conditioned air directly into the room and do not have air ducts
leading to and from them.
Window air conditioners fit into the lower part of a window and can be moved
from window to window and thus the name, Window ACs
Central air conditioners use electricity or gas. They can supply conditioned air to
a number of rooms or to an entire building from one central source. Fans blow the
conditioned air through air ducts from the air conditioner to the rooms. Central
conditioners have a number of advantages over other kinds. For example, all the
equipment for air conditioning a large area is located in one place. This reduces the cost
of cleaning and repairing. Central conditioners can also be zoned i.e. they can supply air
of different temperature to different parts of a building.
These ACs are ideal for rooms with low heat loads. They are available in the
capacity range of 0.5 TR to 3 TR. The room AC sector caters to residential premises,
offices and small establishments. Split ACs are so named because the unit is 'split' into
two parts. The compressor and the condenser forming an outdoor unit and the cooling
coil remaining as an indoor unit. Split units can be with or without ducts. In PACs, the
unit is placed in a separate room and the cold air is carried through ducting to the
required areas. It is suited to those establishments that are not large enough to go in for a
central system. Ducted splits and PACs cater to segments requiring cooling capacity of
less than 15 TR. The central air-conditioning segment is more technology
intensive and project oriented. It caters mainly to institutional clients where capacity
requirements are usually 50 TR and upwards.
The demand for nonducted products grew steadily in the latter half of the
1990s.The demand for mini-spilt ACs has grown at a higher rate as against window ACs
mainly because of a lower base. The demand switch from mid sized ducted products,
such as packaged ACs or ducted splits to mini splits is also one of the larger growth rates
in the latter segment. The demand for non-ducted products i.e. the window air
conditioners & mini splits come from both households & corporate while the demand for
ducted products comprising of the central plants & packaged air conditioners & ducted
splits come only from corporate.
Chapter 2
Market Study
Industry Size
The air-conditioning market is one of the few segments that have been growing at
the rate of 20 per cent per annum since the last three-four years. The total air-
conditioning industry is estimated to be around Rs 3000 crores with central air-
conditioning including packaged and ducted air-conditioning systems estimated to be
around Rs. 1200 crore, and windows and mini split air-conditioners estimated at Rs 1800
crores.
Evolution
Since the early 90s, the structure of the air-conditioning industry has evolved quite
differently. Till '88-89 the industry used to be dominated by the unorganised sector with
70 per cent market share. With excise duty as high as Rs 9000-10,000 during those times
the gap was wider. The participation of the organised sector remained small till the year
1995. The reduction in excise levels from 110 per cent to 32 per cent and import duties on
components from 185 per cent to 30 per cent plus CVD has not only expanded the market
but also narrowed the price gap for branded ACs. The share of the organised sector is
now 80 per cent
while the unorganised sector constitutes a little over 20 per cent of the market.
.
Current scenario
The growth in the year 2000 was only 20 per cent, which was mainly driven by
segments such as software services, retailing, healthcare, entertainment, hospitality and
telecom. In the current year, the AC industry has recorded a 12 per cent growth in the first
six months of the current year.. The WAC growth is expected to be about 20 per cent this
fiscal.
Demand drivers
Inventory holding capacity is the key to success as demand for ACs is seasonal.
Income levels
With rising levels of disposable income and the attendant change in consumption
patterns, air-conditioners have become a thing of proud possession, especially for the
emerging middle class. The fastest growing and the most potential segment, namely,
middle class households, is expected to drive demand for ACs by leaps and bounds
due to growing pollution and more disposable income.
Low Penetration Levels
The industry has a major growth potential as the penetration rate is less
than one per cent The WAC market in China has grown from 1 million to 9 million in
the last decade. This represents a huge untapped market in India thus signifying a
tremendous growth potential. Computerisation in business and growth in service
industry will act as key drivers for commercial segment of air-conditioning. The
present penetration level in India for air-conditioners is a miniscule 1-2%. This figure
compares unfavorably to countries like the USA (35%) and Singapore (30%). In
addition, the penetration level is low as compared to other consumer durables --
refrigerators - 11%, TV's - 35%, Radio - 45% and Cars - 6%. The National Council
for Applied Economic Research (NCAER) conducted survey on "Indian Market
Demographics" has indicated that ACs, rank lower than even washing machines on
the priority list of purchases. Considering that washing machines have achieved a
penetration of only 2 million households, it is unlikely that households will be the
major demand drivers in the near future. This is especially true in the case of rural
households. One reason could be the high maintenance and operational costs
associated with owning an AC. People owning a car, usually get a sum as petrol/car
allowance along with their salaries, but their monthly electricity bills are hardly
reimbursed. With rural households, the problem is of frequent power cuts and low
voltage. Competition also comes from an altogether different product - desert coolers
- widely used in central and northern India. One thing is however clear, lower
penetration level is a pointer to the vast potential that lies ahead.In the future,
earnings will be driven by rising demand for consumer durables in general.
Once upon a time, ACs used to be a luxury but now they are a necessity. Of
course, this could also be attributed to the reduction in AC prices and the rising
disposable income of the Indian middle class. The hot summer of 2001 has persuaded
people to carry one home to cool themselves off.
The last few years have seen a spectacular demand for air conditioners rising from
the household sectors.
As per the National Sample Survey Organization report of "Use of durable goods
by Indian households", the per capita total expenditure on durable goods increased from
Rs112.89 in 1987-88 to Rs148.02 in 1993-94. Similarly, NCAER estimates point to the
fact that the number of households with monthly incomes above Rs10,000 in metros and
Rs5,000 in non-metros is expected to rise from 22.7 million in 1995-96 to a huge 57.2
million in 2005-06. This will mean that firstly, there will be a perceptible shift towards
branded products and secondly, the level of aspiration buying will increase. All this
should be good news for players in the AC market.
.Price
Environment
India is a country situated in the tropical zone with the weather being
warm to hot in most parts of the country. With surroundings in most of our urban
centers becoming increasingly polluted and awareness as regards the benefits of
working in a controlled environment on the rise, the demand for ACs can only grow.
Lowering of taxes will make ACs cross the threshold between necessity and
affordability. Once this happens air-conditioning will see geometric growth in
demand. In the past, the AC industry was labeled as a luxury industry making it
convenient for the government to extract revenues. This resulted in the unorganized
sector ruling the roost with a substantial market share in the window AC segment.
Individuals patronized the unorganized players because their prices were lower and
personalized after sales services were available. As the table below indicates, excise
duty rates were a high 60% for room ACs even until 1994-95. Couple this with the
fact that organized players also paid sales tax, octroi duty etc., their prices turned out
to be largely uncompetitive. Tax implementation is a very big obstacle in the healthy
growth of the consumer durables industry. The segment is heavily taxed both by the
central and state government. White goods manufacturers feel that the lower level of
duties and higher abatement on MRP-based products would push sales and drive
higher growth for the industry. On an average the duties are in the level of 20-25 per
cent but it becomes as high as 40 to 45 per cent in India, which puts Indian
manufacturers at a disadvantage. Reduction in sales tax and excise duty could
definitely spur demand.
Chapter 3
Central AC Market
Current Scenario
The Central AC (CAC) market has had a rough patch in the last two to three
years. Being dependent on user industries, it is highly susceptible to industrial growth
cycles. With new industrial activity coming to a grinding halt, demand for turnkey
central AC projects have dried up in last two years. Central AC segment is
controlled by big players like Blue Star that have the facilities, technology and
personnel required to execute turnkey projects.
Company % share
Blue star 41%
Voltas 22%
Carrier 12%
Thermax 06%
Suvidha 05%
Others 14%
Blue Star
The Rs 510 crore of annual turnover Blue Star is the market leader in central ACs.
The company leads the segment with a current market share of approximately 37 per
cent. According to It is also a leader in ducted systems or the packaged AC segment. With
an almost 40 per cent increase in order inflow during FY01, the company has
significantly improved its market share from 33 per cent to the current 37 per cent.
Around 92 per cent of the company's revenues comes from ACs and commercial
refrigeration equipment business. Of this, almost 85 per cent of the revenue is contributed
by the central and ducted AC systems. Of the remaining, 10 per cent comes from window
ACs and the rest from mini split ACs. While there is intense competition in the window
and split ACs, Blue Star enjoys a competitive advantage of having over 70 per cent of
corporate and commercial customers. Blue star has laumched new turbo rotary remote
acs and hi-wall split acs .
Blue star manufactures and markets wide range of Air- conditioning and
refrigeration
systems and products. These includes large central Air conditioning plants,
packaged
The Rs 385 crore Carrier Aircon was the market leader in the RAC segment with
a 21 per cent share in window ACs and 35 per cent share in split ACs. With the entry of
the various other multinational brands, there has been intense price-cutting, thus taking a
toll on Carriers performance for FY00.
However, for the first nine months of FY01, net sales at Rs 351 crore improved 21
per cent as compared to the corresponding previous period. Also, thanks to efforts at cost
cutting, total expenditure as a percentage of sales has reduced 300 basis points as
compared to FY00. Despite rising working capital requirements that has led to a 57 per
cent jump in interest at Rs 3.71 crore, net profit at Rs 16.76 crore is 83 per cent higher
than that for FY00. The improved performance is largely due to Carriers initiative at
adopting a different pricing strategy. From a distinct shift from marketing ACs only at the
premium end, Carrier started targeting the lower segments of the market. Consequently,
compared to previous price points of Rs 25,000 to Rs 32,000, it now caters to a price
range of Rs 18,500 to Rs 32,000. It marketed 41 new variants of window ACs during
FY01 as against 11 models in FY00. Also, while advertising budget has increased 60 per
cent at Rs 19 crore for FY01, the number of exclusive dealer outlets have also increased
from 414 to 1,200.
To compete with players such as National, in early 2001, Carrier launched seven
models of Toshiba RACs, three models of split ACs. Carrier envisages growing at 25 per
cent for FY02 as against the 16 per cent industry growth. Despite fierce competition,
Carriers dominant presence in the fast growing window AC segment bodes well for the
company.
Voltas
Voltas continues with its 15 % and 20% share in central acs and ducted system
respectively. The Rs 824 crore Voltas has interests in areas as diversified as engineering
products and projects, chemicals, cooling appliances and refrigerators and office
furniture. The company slipped into the red in FY97 and FY98, during which, it devised
various initiatives for a turnaround. This included stripping idle assets and hiving off loss
making subsidiaries. The efforts bore fruits as Voltas posted a net profit of Rs 12.79 crore
for FY99. However, for FY00, its topline dipped 16 per cent to Rs 824 crore. As the
company managed growth only in textile machinery, motors & modular ,furniture ,
business . the other divisions such as machine tools , fork lift trucks , air conditions ,
refrigerators ,and room air conditioners showed declining sales both in quality as well as
value terms .
Also, the net profit slid by 57 per cent to Rs 5.5 crore. According to the company,
the slowdown in the capital goods sector and engineering businesses are responsible for
the sluggish performance during FY00. However, its cooling appliances and refrigerator
businesses have also registered a near 26 per cent fall in FY00. Also, its contribution
towards total revenues have reduced from 61 per cent to 55 per cent in FY00.. Thanks to
innovative product launches and technological advancements, most of its products have
shown a healthy growth during FY01.
From the above table, it can be seen that during FY2000, the company managed
growth only in the textile machinery, hydraulic pumps, motors, and the modular furniture
business. The other divisions showed declining sales both in quantity as well as value
terms.
Company has shown an overall 64% increase in the order book position during
FY01The company has launched a new system called the Ozone Injection System, which
checks the sick building syndrome and prevents the circulation of unhealthy air.
Unhealthy air could be the cause of bad ventilation, bad air-conditioner, or poor
maintenance of air-conditioners. The new system is pioneered by Voltas in collaboration
with a Canadian company called Daks. The company expects its central AC segment to
pick up with the growing environmental concern in the coming years.
While Voltas continues with its 22 per cent market in the central AC and ducted
systems, respectively, its mini split ACs are also expected to add to the revenues of the
company.
Also, with the launch of its Verdant range of ACs, Voltas is further expected to
strengthen its room AC share. However, for FY01, 12 per cent of the revenues have come
from the retail segment with the rest coming from institutional sales. For the first nine
months of FY01, Voltas has registered a seven per cent rise in revenue.
.
Chapter 4
Room AC Market
The room AC segment comprises of window and split ACs. The market
has a size of Rs. 3800 crores in India. Window acs account for about 54% of the total
market for acs with an estimated market size of about 30 bn .
The room air-conditioning segment is characterised by large players like
Carrier Aircon, LG, Samsung, , Amtrex-Hitachi, etc. LG has been successful in
dethroning Carrier from No.1 position in the room AC segment, followed by Samsung
and Hitachi.. . Samsung, for instance, has captured a 15% share in room ACs since it
came here in May 1998. LG has wrested a creditable 19% share in less time .
A sales growth of 300 per cent in 2002 over 2003 (40,000 ACs sold in 2003 over the
10,000 in 2002) finds it talking very confidently.
It started importing in January 1998 but sensing the opportunities lying
ahead, built a plant near Delhi at Noida ,others like Hitachi, chose to pick up stake in
Amtrex. While some others have gone in for a technical arrangement (for eg. Blue Star
with York, USA). M/s. Trane of USA .
The room ac segment is having a close rat race as compared to the central ac
market. LG has emerged as the leading player with respect to its innovation in offering
superior products . It changed the definition of ACs by terming them as health air
systems.
LG has registered a growth of 110%yoy in the year 2000 against an overall
industrial growth of 30%. LGs market share jumped to 30% in 2000 from 19% in 1999.
LG now claims to be in the number 1 position in the RAC segment. LGs entry is already
taking a toll over established companies like Carrier Aircon and Hitachi.
Korean major Samsung and Hitachi are fighting a close battle for the second
place. Both are relying on strong innovation and marketing to increase their market
shares.
Carrier Aircon is second in the RAC race with a 21% share in window ACs. Its
market share in split ACs is about 35%. During the first 9 months of FY01, net sales
stood at Rs3.51bn (up by 21%). To compete with players it has launched models of
Toshiba.
\
Amtrex Hitachi is a joint venture with Hitachi Japan and has a 11% share in the
window AC segment and 15% share in the split AC segment. After going through some
stagnant period, the company is now ready to take on the competition with its new range
of products. After a successful comeback in FY00, the company slipped into red again
during the first nine months of FY01registering a net loss of Rs7.4mn against a gain of
Rs6.2mn last year. However, the topline has soared by 31% to Rs1.6bn during the said
period. The companys problem is that of falling operating margins due to rising total
expenditure. Amtrex has recently launched a new digital range of split &window ACs
called 'Logicool'
Its mini split ACs registered a 25% volume growth to improve its market share
from 20-25% in FY01. Also with its launch of Verdant range of ACs, Voltas registered a
28% volume growth improving its market share from 11% to 17%.
Delhi
20%
28% Mumbai
7%
Kolkatta
2%
Hyderabad
4% Bangalore
4% Chennai
35%
Others
The above figures explain that the sale of ACs is restricted to metros. This is so
because the ACs still have a very low penetration as compared to other durable goods.
They are last in the priority list after refrigerators , washing machines, vacuum cleaners,
microwave ovens. Also people dont have that much disposable income to operate and
maintain an AC. With increasing finance options the scenario is expected to improve but
it will take some time for ac as a product to really come into the reach of a middle class
consumer.
A notable feature of the reform period has been the coming of foreign players
into the Indian market Among the new brands jostling for space with the older players
this summer are: Electrolux-White Westinghouse and Whirlpool from the US, Fujitso
General Ltd and Daikin from Japan and TCL from China. Needless to say, the entry of a
host of new brands will impact the AC market in India dominated by players like Carrier
Aircon, LG, Samsung, Godrej, National, Blue Star, Voltas etc.
The reasons why more and more brands are entering the Indian market is that
the penetration level of ACs in India is barely 2 per cent and so the market is extremely
attractive. Secondly, the home segment witnessed an almost 30 percent growth in the last
two years compared to the commercial segment. This is because AC is no longer
perceived to be a luxury, and better distribution network, finance schemes and large scale
advertising have grown the market.
Small wonder, Daikin Shriram, the new 80:20 JV between $ 4.5 billion Japanese
company Daikin and the Siddharth Shriram group company Siel Ltd, aims to grab a 18
per cent share of the premium AC segment. A 0.75 tonne Daikin AC costs Rs 39,000.
Meanwhile, Electrolux India has brought in its world - renowned White Westinghouse
brand of AC which offer an attractive six year guarantee and hopes to capture
approximately five per cent market share.Having test-marketed its ACs last summer,
Whirlpool launched its products earlier this summer. The new Whirlpool AC Range is
targeted primarily at the house hold segment. They are offering a comprehensive range of
8 new world class models and hope to get a 10 per cent market share by 2003.The AC
market is currently witnessing a proliferation of brands. However, a shakeout is imminent
in the next 18-24 months. Secondly, branded players will gain market share at the
expense of the unorganised sector. If the unorganised versus organised sector marketshare
ratio was 60:40 in 1997-98, it changed to 30:70 in 2000-2001. The unorganised sector is
likely to lose another 10 per cent share this year, thanks to the new players coming in the
market.
Samsung
Korean major Samsung too has added two new models to its range and hiked its
spends on ACs by 15 per cent. It is also using the Internet for speedy order and delivery
of spare parts. It is offering a combination of better services, features and a zero per cent
finance schemes to garner more market share. To fortify their position the company plans
to expand their dealer network to 2000 from current 1500.
LG Electronics
Carrier Aircon
Hitachi
Hitachi is relying on its new range of Logicool air conditioners to increase its
market shares backed by strong promotional budget which has been increased from 8
crores last year to 20 crores for the year 2001-02.
Chapter 5
Analysis Of Room AC Market
The room AC market is very complex unlike central AC market because there are
lot of players which are targeting various consumer segments according to their specific
needs. In the central AC market the corporation is spending the money and the reasons
for buying an Ac are altogether different for buying an AC as compared to that for
personal use. Decisions are taken by corporate heads in case of central ACs and the
priority is given to factors such as cooling capacity, after sales service, safety, price etc.
The brand is not given much importance as far as the motives are being fulfilled. On the
other hand a room AC is purchased for the following reasons
1.To create a cool ambience
2.To provide clean and fresh air
3.Status symbol
4.To Provide aesthetics to the room.
1. Durability
2. After Sales Service
3. Finance Options
4. Less Power Consumption
5. Technology with respect to cooling, clean and fresh air and easy operations
6. Sleek looks
7. Suitable Price
8. Brand Image
Thus it is becoming more and more important for a company to establish its brand
rather the product alone. A consumer today looks to identify with the brand he is going to
own and therefore the players in the market are trying to establish their brands and
position them in such a manner that they are able to relate to the psychology of their
target and potential customer and provide him with a product which would be ideal for
him. In order to analyze the complexities in the Room AC market it is necessary to
understand certain terms and concepts related to brands , branding and brand positioning.
Also it is necessary to look understand what are the benefits and requirements for
developing these concepts.
Chapter 6
Branding
Branding is the art and corner stone of marketing. The American marketing
association defines a brand as: a name, sign, symbol, or design, or a combination of them,
intended to identify the goods and services of one seller or group of sellers and to
differentiate them from those of competitors. Thus a brand identifies the seller or maker.
Under trademark law, the seller is granted exclusive rights to the use of the brand name in
perpetuity. Brands differ from other assets such as patents and copyrights, which have
expiration dates.
Benefits: attributes must be translated into functional and emotional benefits. The
attribute durable could translate into the function benefit I wont have to buy another
car for several years. The attribute expensive translate into emotional benefit. the
car makes me feel important and admire.
Values: the brand also says something about producers values. Mercedes stands
for her performance, safety, and prestige.
Culture: The brand may represent a certain culture. The Mercedes represents a
Garman culture: organized, efficient, high quality.
Personality: the brand can project a certain personality. Mercedes may suggest a
no nonsense boss (person), or an austere palace (object).
User: The brand suggests the kind of consumers who buys or uses the product.
We would expect to see a fifty five year old top executive behind the wheel of a
Mercedes, not a twenty-year-old secretary.
The word "brand", when used as a noun, can refer to a company name, a product
name, or a unique identifier such as a logo or trademark. In a time before fences were
used in ranching to keep one's cattle separate from other people's cattle, ranch owners
branded, or marked, their cattle so they could later identify their herd as their own. The
concept of branding also developed through the practices of craftsmen who wanted to
place a mark or identifier on their work without detracting from the beauty of the piece.
These craftsmen used their initials, a symbol, or another unique mark to identify their
work.
Not too long afterwards, high quality cattle and art became identifiable in the
consumer's mind by particular symbols and marks. Consumers would actually seek out
certain marks because they had associated those marks in their minds with tastier beef,
higher quality pottery or furniture, sophisticated artwork, and overall better products. If
the producer differentiated their product as superior in the mind of the consumer, then
that producer's mark or brand came to represent superiority.
Today's modern concept of branding grew out of the consumer packaged goods
industry and the process of branding has come to include much, much more than just
creating a way to identify a product or company. Branding today is used to create
emotional attachment to products and companies. Branding efforts create a feeling of
involvement, a sense of higher quality, and an aura of intangible qualities that surround
the brand name, mark, or symbol.
A brand also stands for the immediate image, emotions, or message people
experience when they think of a company or product. A brand represents all the tangible
and intangible qualities and aspects of a product or service. A brand represents a
collection of feelings and perceptions about quality, image, lifestyle, and status. It is
precisely because brands represent intangible qualities that the term is often hard to
define. Intangible qualities, perceptions, and feelings are often hard to grasp and clearly
describe. Brands create a perception in the mind of the customer that there is no other
product or service on the market that is quite like theirs.. A brand promises to deliver
value upon which consumers and prospective purchasers can rely to be consistent over
long periods of time
Brand Positioning
The concept of perpetual space forms the theoretical basis for positioning . The
consumers mind is thought of as geometric space and brands are plotted in that space to
represent consumer judgments. This is done with the help of perpetual maps that helps a
marketer to see which brands are closer to his brand and that helps him to find out his
closest competitors. The task of the marketer is to mould consumer perceptions so as to
occupy the desired position for his brand. Some thoughts offered by various authors with
respect to Brand Positioning are as follows:
1)Subroto Sengupta gives a comprehensive three point definition for positioning.
According to him
a) The position of a brand is the perception it brings about in the minds of the
target consumer.
b) This perception reflects the essence of the brand in terms of its funcional and
non-functional benefits in the judgement of that consumer.
c) It is relative to the perceptions , held by that consumer, of competing brands ,
all of which can be represented as points or positions in his or her perpetual space and
together make up a product class.
3) Michael J Baker defines Brand Positioning as the policy used to ensure that
the brand has a distinctive position in the market place , identifiable by the consuming
public. Brand Positioning (has) to ensure the brand a distinct niche in the market .
4) Mittelstadt, Charles Positioning refers to how you want your brand thought
about in connection with competitors in its product category . Positioning needs to be
specific to your brand aimed at specific target audiences
The benefits of Branding and Brand Positioning
A well positioned brand influences the buying decision and shapes the ownership
experience.
A strong brand can command a premium price and maximize the number of units
that can be sold at that premium.
Branding helps make purchasing decisions easier. In this way, branding delivers a
very important benefit. In a commodity market where features and benefits are virtually
indistinguishable, a strong brand will help customers trust it and create a set of
expectations about its products without even knowing the specifics of product features.
Brand positioning help to "fence off" customers from the competition and protect
market share while building mind share. Once a brand has mind share, the customers will
automatically think of the brand first when they think of that particular brands product
category.
A brand is something that nobody can take away from anyone. Competitors may
be able to copy the products, the patents will someday expire, trade secrets will leak to
the competition, the proprietary manufacturing plant will eventually become obsolete, but
a strong brand will live on and continue to be unique. In fact, a strong brand name may be
the most valuable asset for any company.
A strong brand can make actual product features virtually insignificant. A solid
branding strategy communicates a strong, consistent message about the value of the
company. A strong brand helps to sell value and the intangibles that surround products.
A strongly positioned brand signals that it want to build customer loyalty, not just
sell product. A strong positioning campaign will also signal that a brand is serious about
marketing and that it intends to be around for a while. A well positioned brand impresses
a firm's identity upon potential customers, not necessarily to capture an immediate sale
but rather to build a lasting impression of itself and its products.
A brand helps to articulate a company's values and explain why they are
competing in your market.
People do not purchase based upon features and benefits. People do not make
rational decisions. They attach to a brand the same way they attach to each other.
Similarly, purchase decisions are made the same way, first instinctively and impulsively
and then those decisions are rationalized. A strong brand helps mold and shape that
emotional reaction in people, which is a very strong influencer in the purchasing
decisions they make. Once they have an emotional attachment to a brand, then they will
justify their purchase decision based upon product features and benefits.
Chapter 7
Brand Positioning Of Room ACs
Introduction
Strategies Of Positioning
Eg: Godrej is doing this by using the tag line nothing cools faster .
They are making this claim because their ACS are fitted with silent
energy efficient compressor and they have a very high cooling capacity
Components Of Positioning
The positioning strategies of all the AC brands in the market are based upon the
four basic components of positioning. They are as follows
1. Product Class-A product class or product market can be defined as the set of
products and brands which are perceived as substitutes to satisfy some specific consumer
need. The term, product category, is also used interchangeably with product class and
product market. A brand cannot decide upon its positioning unless it knows the structure
of the market and positioning of other brands so it can lodge itself accordingly in the
perpetual space of the consumer.
With respect to the AC market the knowledge of the market comprises of the
kinds of brands available namely Indian, Japanese, Korean , their market shares, the
capacity of ACs ranging from 1 to 3 tons, the technology being offered and at what
prices. Also the players have to consider the unorganized market and the substitutes like
coolers which have a sizeable demand in the northern region of India..
ACs are basically classified as the whitegoods which have a penetration as low as
2 % in a country like India. This is so because India is a developing country where
majority of the population is lower middle class. AC is targeted at the middle-middle
class and upper classes because of its high purchase price and also high operating cost.
According to the statistics given by Business World the middle income level group share
is going to increase by 2005 expanding the AC market. Already there are players such as
National, Hitachi that appeal to the middle income group because of their pricing which
ranges from 15,000 to 20,000 . There are players which target the niche market such as
LG, Samsung , Carrier and Hitachi with an average price of about 30,000. Then there are
players who are between the two markets such as Voltas, Godrej. In order to expand their
markets already brands like LG, Carrier , Hitachi have started offering various finance
options to their consumers.
In the AC market the general perception about the AC as a product was that it
was a cooling machine. In the middle nineties players of the market were basically
fighting on the grounds of technology ,prices offering varied features, designs , exchange
offers to lure the customers with American giant Carrier Aircon ruling the roost. Then
came a new breed of air conditioners lead by LG which gave a new dimension to the
industry by introducing health Air system air conditioners . Brands like Hitachi, Samsung
also came up with new technology and innovative products leaving players like Carrier,
Voltas, National far behind who had taken the Indian consumer for granted and never
bothered to bring new products until the entry of Korean and Japanese brands. These
brands have managed to make people believe that there is more to an air conditioner than
cooling. People now perceive brands differently and know what to expect from each
brand thanks to their unique positioning. They perceive LG as a Health focused brand,
Samsung as efficient and high-end technology brand, National as a low-end price brand
and Daikin as a low noise-creating brand. Thus the current breed of ACs are being
perceived by consumers in a different vein with respect to each AC thanks to aggressive
and distinct positioning.
The following Taglines are used by the brands in the market to occupy the desired
space in the minds of the consumer. They help the consumer to build their perception
about a particular brand:
Brand Tagline
Hitachi For those who seek perfection
Different Needs for Different
Carrier
People
Voltas Ache Achon ko Thanda Kar De
LG Purest Way to Breathe
Bluestar Breathe Easy
Samsung Ab Garmi Chu Mantar
Daikin If its National its Affordable
WhiteWestingH
Enjoy the Freshness
ouse (Electrolux)
Kenstar The Way the World Lives
General The Extreme Machine
Godrej Nothing Cools Faster
4. Benefits Offered By A Brand
The benefits offered by a brand form the final and the most important of the four
components of positioning. A consumer expects certain benefits from each product and
for reaping those benefits he pays a price which incidentally is the cost of the product
offered by he brand.. When a consumer is going in for a purchase he has only those
benefits in his mind which he feels he wants to reap and is on a look out for a brand
which can provide the desired benefits. It is very important for a brand to know which are
the ideal benefits a consumer is seeking and make sure that they are able to provide those
to the customer which in turn would grant them an immediate position in the mind of the
customer and would put them on the priority list of the customer amongst all others
because the consumer would be able to identify with it the most as the brand is giving
them what they expect from it.
Advertising is one of the most important modes which companies use to position
their brands. With the help of advertisements the consumers can be induced to buy the
brand by making them aware of the benefits of buying their brand over other brands. Like
all other markets Ac market is no different and here also the advertising is heavy but
seasonal. The peak period of ACs is March to May followed by a lull of about three
months before the sales pick up again in the month of September but that too for a couple
of months because then winter strikes most of the country. Also most of the players prefer
Print media as compared to Audio-Visual media due to cost factor as the demand is not
much. Also consumers like to know in detail about the features , prices, finance options
which can be expressed explicitly only in the print media. There are some big players like
LG, Hitachi, Carrier which advertise frequently on T.V during the season but otherwise
print media is the preferred medium. Taking these reasons into consideration the analysis
is based on the print adds for the months of March, April and May.
3) Verdant from Voltas: The ads have been stressing on features like pure and
healthy air, temperature adjustment, electricity savings. They also have icons to give
details regarding the features. But unlike Samsung they dont have any celebrity
promoting their products. The focus is on the model Verdant which they have placed as
the future high tech air conditioners. Some of the ads also focus on their cooling system
that suggests that the room will be cooled thoroughly irrespective of its placement.
4) Godrej Intelli- There has been only one ad talking about its ability to get
programmed to consume the units of electricity as desired by the consumer. It is this
feature that separates it from the other ACs but the advertising with respect to this is very
mild.
Godrej Smartcool: This add covered all the models [with photographs ] being
offered by Godrej and the various features such as energy saver, sleep mode, rotary
compressor etc. The punch line in this ad talks about taking the woollen clothes out
which suggests that AC might just be too cool for a person to be comfortable . The
function of an air conditioner is not all about creating a cold environment but to condition
the air in the environment and make it most suitable and comfortable for the person
sitting in the room. The ad might just give a wrong idea to any prospective customer.
5) General : They have also advertised just once in the last one month. They have
been trying to lure the customers by calling their AC as the most powerful AC with
respect to their cooling capacity and cooling speed. The ad is not effective as it does not
give any idea to the customer about the product features or other details such as price,
models etc.
6) Kenstar: There have been just 2 advertisements in the last couple of months.
The first one spoke about the price while the second one was also revolving around price
with the concept of exchange offer. Thus they are trying to lure the customers by offering
them price parity with respect to other ACs. One of their punch lines says Bring in the
winter which is trying to project that the ACs are all about cooling. In one particular ad
they have compared their features and price with other brands and showed their
superiority over them.
8) Fedders Lloyd : Their advertisements are also price oriented. They are trying
to persuade the consumers by printing the prices in bold and using punch lines such as
ACs for 19500.
11) Carrier: They are the market leaders in the AC market today. Their
advertising differs from product oriented where by they talk about the efficiency, low
noise creation, pure air etc to price oriented where by they offer various interest free
finance schemes.
12) Daikin: They have been targeting the customers with their catch line
complete silence. They have promoted their ACs as no noise polluting ACs. They have
not been speaking about other product features or price. The customer doesnt get a fair
idea about the product from their advertisements. The ads boast of it being the NO. 1 AC
of JAPAN.
13) Bluestar: They have also advertised heavily in the months of March and
April. Their advertisements have been focusing on the product features and prices. The
features promoted are same as other ACs namely pure and healthy air, sleep mode, power
saving compressor etc. they have used models in some ads to add value to the ads. .
Striking Points With Respect To Advertisements
1.Features: Almost all the brands have been talking about features that are
common to each other except for the features advertised by Godrej intelli of their power
controller. has launched its new range of EON air conditioners with a revolutionary
technology in split air conditioners for the first time in India.
These air conditioners are built with Godrejs advanced i-Sence Technology, which
ensures that the temperature around you is exactly what you wish to have in the room or
hall.
2.Warranty: Not everyone has been talking about the warranty period. But there are a
selected few like Kenstar, Fedders Lloyd, Voltas, LG which are offering a 3-5 year
warranty on the compressor.
3. After Sale Service: Every brand has given the list of their dealers and service
centres. But Fedders Lloyd have also focussed on their 24 hour service call stressing on
their dedication towards the consumer satisfaction. Voltas have also mentioned about
their customer care service that places these two brands as customer friendly in the minds
of the customer.
4.Icons: The icons are basically used by the brands to give an insight to the
consumer about the other features of the product other than USP of the product. Most of
the brands are effectively using the icons but for Godrej, Feddders Lloyd, National,
Carrrier , Amtrex Hitachi, Daikin, BlueStar. These brands have been focusing only on
their strengths and are not talking about features that are common to all.
5.Finance Options: Many brands offer easy finance options so as to make the
product available even to people who cannot afford to buy the AC buy paying the amount
at a stretch. This way the companies are able to target and tap a wider market. Brands like
National, Carrier, Samsung, LG are offering 0 percent interest finance option to
consumers making it easier for the consumers to buy their product. Also Voltas and
Hitachi have different finance schemes to attract the consumers towards their product.
Chapter 9
COMPARITIVE BRAND POSITIONING Of
LG ,GODREJ & Hitachi
A well-positioned brand is that which has been able to identify with the pulse of
the customers by being accepted by them. If one goes by statistics then LG is the market
leader in room AC segment followed by Samsung and Hitachi. They are the ones who
have been able to change the face of the Indian market by displacing Carrier Aircon who
has been ruling the roost for last ten odd years. Logically to compare the positioning
strategies of two brands LG and Samsung could have been chosen but then there are
reasons for choosing Hitachi over Samsung. Both LG and Samsung originate from Korea
with each owning a 100% subsidiary in India while Hitachi is a Japanese brand having a
joint venture with Amtrex . Both of them have a strong presence in India with respect to
other durables where as Hitachi is not strong in other durable markets. Also Hitachi has
been quiet innovative and aggressive in its positioning along with LG where as Samsung
has kept a low profile with respect to it positioning. Also Hitachi is expected to garner
more share in the coming period because of its new range of Logicool ACs which have
already become very popular and are expected to Hitachi in the second place ahead of
Samsung. All these make Hitachi a better proposition for comparison with LG which has
revolutionarized the market with their positioning.
The analysis is based on the information obtained with the help of dealer survey,
consumer survey and interviews with the personnel of LG and Hitachi.
Analysis is done on the basis of some aspects that form the basis of positioning.
1) Corporate Background
Godrej GE started its AC business five years ago in 1999. Their market share is
very low i.e. only 3%. They manufacture their ACs at BADDI in Rajasthan. At present
their turnover is 32 crores.
C) Amtrex-Hitachi : It is a joint venture between Hitachi Ltd, and the Japan a
Lalbhai Group, Amtrex Hitachi Appliances Ltd. centered in Ahmedabad with its
manufacturing facilities based at Kadi and Silvassa. The annual capacity of the company
is around 0.1 million per annum.
2) Branding
3) Brand Postioning:
B) positioning according to use: Positioning with respect to use : the people now
a days need things that can get the work done very fast because they have very less time
in their stressful and bussy life . so godrej has used the tagline nothing cools faster
which can attract such kind of people. Home segment is their target market . so if we look
at it from one angle then it has a better scope because if people come tired from their job
they have to wait after putting on ther AC so that it should give cool air .this creates
frustrations for them as they have to wait. So the people will be attracted towards godrej
as it is the fastest cooling AC people dont have to wait for it . this is the reason people go
in for buying godrej .moreover the people owing this AC feel proud in telling other
people who are having other AC that my AC is faster than yours . Thus the brand is
giving psychological satisfaction to the people .
C) User Driven Positioning- Hitachi has a devised a very catchy and focused tagline
for the brand For Those Who Seek Perfection which clearly classifies their positioning
as user driven. ACs are priced at upper middle class with the average income per month
exceeding Rs. 40,000. As their advertising campaign suggests they are targeting that
segment of consumers which are very particular about each and every thing they do be it
their work or the appliance they own. Thus if you look at it from one angle the
positioning seems to very limited in its scope because there are not many people who
have this kind of an attitude. But the other angle will suggest that the positioning is smart
because human nature is such that it craves to associate itself with the best in the business
and perfection is that trait which every individual would like to flaunt. Anyway owning
an AC itself is a status symbol and owning an AC that personifies itself as perfectionist
only adds value to the already hyped status of the owner. Thus the brand is playing with
the human psychology with respect to its positioning and has been largely successful in
their efforts.
Advertising& Publicity
It is very important for a brand to know its target market, the buying behaviour
and the pattern of consumer so that it can effectively formulate its advertising strategy to
position its brand. The peak sales period in the room AC market is from March to may
followed by a lull in the market and then sales pick up again in the month of October.
A) LG- LGs advertising account is handled by American MNC Lowe Lintas. The
annual advertising budget is around 93 crores for the year 2001-02. . LG has advertised
aggressively both in the print media as well as audio-visual media such as newspapers,
magazines, and T.V etc.during the months of March to may. The advertising has mainly
been mainly a mix of brand and product positioning. The initial ads showcased the story
of a senior citizen who wishes to go for a walk but is unable to do so because of rains and
then he is suggested by his daughter to take a walk in the house itself as the LG AC
would make sure that the air is fresh and healthy, with respect to its plasma filter
technology. The ad ends with the person walking on the exercising machine with a smile
on the face.
LG-Health and Happiness in every breath.
It advertisement features a small girl standing on feet of her father and father is
catching her hands and walking.
The other advertisement is father after playing with his child takes him in his
palms and starts walking because the child is tired. This shows the good health of the
father as he breath fresh air of LG Air-conditioner.
Its another advertisement featured that a father beats his son with a pillow before
going to sleep and then Childs mother and sister starts beating the father rescuing the
child. This shows their health and happiness
Then there was another Switzerland To Hai Right Idhar popular advertisement
where in a man is shown going to Switzerland where by he just moves from one room to
another one fitted with LG Plasma air conditioner, stating that thanks to the cool, pure
and healthy air pumped by LG Switzerlands ambience is created right in his bedroom.
They have now started advertising about the technology aspects of Plasma filters with
respect to the many Goalkeepers commercial and a lot of print ads. Another one of their
popular ads has been that of positioning their Brand as a tool to respire on land just as an
oxygen cylinder is required to breathe under water. Thus they have captured the health
category with respect to the concept of cool, clean and healthy air with smart and
innovate adverisements. Their advertisements also talk about their service that is perhaps
the best in the business and the 0% finance options available for the consumers. They
have also been using corporate advertising where by they advertise all the products under
the LG brand. This is generally done during their anniversaries or festive seasons or slack
periods to offer gifts, discounts etc.depending upon the need of the situation. They use
banners and billboards very selectively, mostly during festive seasons and off seasons to
promote sales and reduce the expenditure on advertising but at the same time be in the
eyes of the customer. They always try to be in the news by participating in exhibitions,
fairs , sponsorships etc. They have already been declared the N0.1 Brand in the room ac
segment where they have displaced the American MNC giant Carrier Aircon that was
ruling the roost for the last ten years. It has targeted mainly to the higher income group or
the double income families of the society.
Its advertisement features that all the family members were sitting for having
lunch . the members included grand father , grand mother , father , mother , and two
childrens . the childrens feel very cold because of godrej AC and they go and sit on the
laps of their grand parents .
Its second advertisement shows that all the family members are sitting on
different beds for watching television but as the godrej Ac gets on after few minutes the
family members start to shiver and come and sit on one bed by sticking each other.
Its third advertisement shows that corporate people had came to attend the
meeting but they go and sit by sticking each other on two-three chairs and leave other
chairs empty.
5) Brand Personality
B) Hitachi -Hitachi Brand has a tagline For Those who Seek Perfection which
itself underlines the personality of the brand. They have tried to personify their brand
with the help of their effective advertising campaign created by Orchard B. The series of
adds shown on T.V first developed the personality of the brand with the help of the bald
middle-aged male model who was shown to be seeking perfection in each and every work
he did. Gradually the adds shifted to the script which showed the man using a Hitachi AC
because it gives him all the benefits which he seeks like having the desired room
temperature when he returns from office in the evening thanks to the new Logicool range
of ACs from Hitachi.. It is the only brand that has used the concept of brand personality
so effectively. The adds with their humourous concept have managed to create the
personality of the brand. If only they could have managed to rope in Aamir Khan it
probably could have done wonders to the personality of the brand because he has such a
strong perfectionist image in the minds of the people that probably they wouldnt have
had to build the personality of the brand through initial adds as they had to in the case of
the current brand endorser. Also the sales would have got further boost as compared to
current sales that have put them in the third place in the room AC segment behind LG and
Samsung.
Brand Image
A) LG It has got the image of being the best brand in the market. Consumers
believe that it is the only brand that can do justice to the concept of cool, clean and
healthy air thanks to the Plasma filter technology. It also has the image of being the most
customer friendly brand with special emphasis being paid on the after sales service. At
LG they have a system of Happy Calls where by the consumer who has bought a LG AC
gets a call from their CRM department congratulating them on their purchase and
inquiring about the performance of the AC. Thus strong product concept along with
innovative positioning and able public relations has established LG as the most reliable
brand in the AC market.
B)GODREJ: It has got the image of growing and developing brand . according to
THOMSON ASSOCIATES product is more important as compared to its positioning . it
has the image of being the fastest cooling AC and so people are attracted towards it.
3) Hydrophilic Coating
Thanks to the hydrophilic coated aluminium fins, the angle of contact between
water droplets ( that form due to condensation of atmospheric moisture)and the fin is less
than 80 degrees as in the case for uncoated aluminium. This minimises air resistance and
ensures optimal cooling performance.
c) Anti-Bacteria Filter
This function is for quick cooling.In this mode , strong and cool.air is
blown at high speeds for 30 minutes until the temperature reaches 18 degrees celsius.
6) Auto Operation
It sets the temperature , swithches the fan speed, swings the vertical air
direction louvres up and down by a single selecton auto operation mode. All in
accordance with fuzzy logic, dependingg on the current temperature.
7) Sleep Mode Auto Control
A touch of the sleep mode button automatically programs the air conditioner
to turn off, controls the indoor fan speed and adjusts the setting temperature. Thus it
ensures a more comfortable sleep.
What is Plasma?
It is the 4th energy created by high voltage electricity (6,500 volts).It is pulse
energy which changes dust particles with positive(+) electrodes and cultivates the photo
and radical power to brake odour molecules.The air passes through the following channel
. Polluted Air--Plasma Ionizer-Case-Mesh-Dust Collector-Cover-Clean Air . Plasma
technology is the only and the most important superiority in these ACs above the simple
LG split air conditoners. All the other features are common amongst the two classes of
ACs including the fully operational remote control.
Its Window acs are having rotary compressor and have voltage range of
200-250 .it consumes 1300 watts of power and have synthetic filter.
Memory Back up :
This feature ensures that even after a power cut, Air-Conditioner
returns back to its original setting. So people don't need to reset it.
Dehumidifier:
Gives people that crisp hill-station cooling by removing excess moisture.
12 Hour-On-Off- Timer :
Allows people to turn ON or turn OFF the Air-Conditioner at any time
preset by them. So no hassles of constantly keeping track of the functioning of the Air-
Conditioner.
Kaimin Mode-It adjusts temperature to the body of the person in the night. This
helps to save power upto 34%.
Smart Sensor-It senses the temperature around the person and not around the AC
grille.
Auto Return-In the unlikely event of the power turning off, the Logicool
controller memorises the last settings to restart, on restoration of power.
Dialogue Window-It displays the selected mode perfectly for the convenience.
Detachable Grills-This arrangement helps to clean the ac and place them back
easily.
Hitachi Logicool Split Air-conditioners
1) Logicool - This helps to set the temperature required for a later period. It varies
fan speed automatically.
2) Remocon - It has got a full function remote which makes the operation easy.
7) Auto Dry - This removes excess humidit, to make the room more comfortable.
8) Dialogue Window - It displays the selected mode forthe convenience o the user.
9) Power Saver mode - It helps to save power upto 25%.
12) New Age Filament Filter - It cleans pollen and dust. It provides better indoor
air quality.
13) Auto Swing - It ensures optimum distribution of air flow in the room.
14) Koukin Filter - It is an anti bacteria filter which helps to purify the air.
Hitachi Logicool air-conditioners are also doing very well in the market. They
have helped the brand to increase its market share from 12% to 15% in the room AC
segment. Their use of technology is mainly restricted to make the operations easy and
convenient. They have not been able to provide any other path breaking service in
comparison to LG. The features offer only those benefits that are present in the other
brands also thus reducing the scope for individuality. Whatever features are different
from other ACs can also not act as the USP because they are not value driven and only
add glamour to the product
Chapter 10
Suggestions
.
The following suggestions have been offered to the brands in the
market regarding certain aspects that a consumer would look forward to from the brands
in the Indian AC industry. The suggestions are being offered taking into consideration the
analysis of the results of the consumer survey.
1) Environment Friendly Products: All the brands that are currently operating in
the market have launched the products that use CFCs in their compressors. The emissions
from CFCs are responsible for depletion of the Ozone layer. Ozone layer is responsible
for protecting the earth from the harmful ultraviolet rays of the sun Already ozone layer
has been depleted somewhat over the Antarctica region which has lead to people
suffering from diseases like Skin Cancer and Cataract .In the western market due to the
monetary protocol which calls for using of environment friendly goods brands like LG,
Carrier and Samsung have already started using HFCs in their ACs which do not harm
the environment in any manner. In the new millennium the brands will have to be careful
about the technology being offered in the Indian market. This is so because the Indian
consumer and the environmentalists wont tolerate the products that offer technology that
is responsible for degradation of the environment in which they live.
2) Technology- Technology is one aspect that changes very fast in todays world.
Almost all the players in the global market have been spending millions in research and
development to provide something extra than the other players in the market. LG has
been largely successful in creating the technology which all the brands in the market
envy. They have been able to incorporate the Plasma technology in their split air
conditioners that have redefined the image of air conditioners. This has also been the
reason for their success in India. The Indian customer would now expect more from the
brands. The players will have to launch their newer models very soon. They should soon
launch the air-conditioners that can be operated with the help of Blue booth technology
viz.. ACs that can be run through PCs or telephones etc .The players should also try to
incorporate some better technology for purification in the window AC just like Plasma is
being used for the split air conditioner. They should come out with smaller compressors
that will increase the efficiency of the air conditioners. Godrej has already introduced an
AC which can be programmed to consume only those many units of electricity as is
desired by the consumer. This kind of technology would be really of great help because it
will reduce the operating cost considerably which in turn would boost the sales. Many
people dont buy AC because of the high operating cost and this feature would induce
them to by the AC. They should also come up with in built stabilizers that will make sure
that the ACs are not getting damaged in case of severe voltage fluctuations.
I would like to take this opportunity to thank all the people without whose
support, this project report wouldnt have been possible. First of all, I would like to thank
our Principal Dr. S.N. SHETTY .I would also like to thank MR.ABHIJIT BAGADE,
Executive Sales and Marketing, LG Air-Conditioners ,MR. SANJAY PARULKAR
,Executive Sales and Marketing ,Hitachi Air-Conditioners and MR.HIMANSHU JAIN
GM instititutional sale , GODREJ for providing insight about the brand positioning
strategies of the respective brands.
I would surely like to thank the one person who has remained as the guiding force
and was there for me as a pillar of strength in my times of difficulty of formulating the
project. My Project Guide Mr. RAKESH YADAV is the person to whom I shall be ever
indebted to.
MEHUL JOSHI
TYBMS
Bibliography
Magazines
A& M
Business World
Business India
Business Today
Newspapers
TOI
Economic Times
Financial Express
Web sites
www.indiainfoline.com
www.lge.com
www.igindia.com
www.hitachiaircon.com
www.business-standard.com
www.catalogs.indiamart.com
www.indiatimes.com
www.godrej .com
Reference Books:
Annexure
3. According to you what are the aspects you considered or will consider in the
purchase of a branded AC?
Technology User convenience Price Market Standing Running Cost
4. Which of the ACs you think is the best with respect to the price and
performance?
LG Hitachi Samsung Voltas Carrier Aircon Blue Star Godrej
5. How many brands are you aware of, out of the following brands?
LG Samsung Hitachi Carrier Aircon Blue Star National
Daikin Godrej Voltas Fedders Lloyd Kenstar
White Westinghouse (Electrolux) All
6. Are you aware which of the following is most easily available through retailers
LG Samsung Hitachi Carrier Aircon Blue Star National
Daikin Godrej Voltas Fedders Lloyd Kenstar
White Westinghouse (Electrolux) All
7. Do you think ACs should also be sold like other durables and made available
for the consumers to see and feel the product:
Yes No
12. Are you aware of any brand offering finance options for the purchase of their
product?
13. What is the ideal price you are willing to pay for a 1.5 Ton window AC?
22-25 thousand 25-28 thousand 28-31 thousand
15. What aspects do you think will govern the AC market in the current
Millennium?
Price Technology Eco-Friendly Products After Sales Service
Maintenance And Running Cost
Index
UNIVERSITY OF MUMBAI
PROJECT REPORT ON
BRAND POSITIONING OF AIR-CONDITION
CERTIFIED MAIL
GODREJ
Corporate Personal & Administration Dept; Plant 11,Pirojshahnagar,Vikhroli,Mumbai-
400079
This is to confirm and certify that Mr. Mehul joshi had visited my office to collect
information on AC industry and to clarify his queries on the same. The information
provided by him is true and reliable. I am also happy to say that he has a good grasping
knowledge and had taken keen interest in learning about various aspects of marketing.
Regards
Himanshu Jain
http://free-assignment-exchange.blogspot.com/
visit
http://free-assignment-exchange.blogspot.com/