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 1

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 2

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

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 in 1988. 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.

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, with consumers 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 5

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 a decompressor are needed to see this picture.

QuickTime and a decompressor are needed to see this picture.

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, 7

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.

QuickTime and a decompressor are needed to see this picture.

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 poor growth, 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. 8

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 to 127 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 9

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 ELECTRONICS LG 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 10

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 worldclass 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 the company, 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. 11

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.

12

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 segment purely 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 13

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.

Potential entrants (Threat of Entry)

Suppliers (Supplier Power) Porters Model

Industry Competetitors (Segment rivalry)

Buyers (Buyer Power)

14

Substitutes (Threat of substitutes)

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.

15

- 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.

16

- 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.

17

- 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 18

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 manufacture of 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

19

Performance Measures

20

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. 21

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 from them. 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 22

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.

23

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-formoney 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.

24

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 its product mix. Width, Length & Depth Width = 5 (Plasma, LCD, Slim, Flat, Conventional)

25

Plasma 50PDP 42PDP

LCD 42 LCD 32 LCD 26 LCD 20 LCD 19 LCD

Slim 29 slim 21 slim

Flat 29 flat 21 flat 15 flat

Conventional 21 FFST 20 conv 14 conv

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 neonxenon gas is injected and sealed in plasma form during the manufacturing 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: 26

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 Ratio 3:2 & 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 27

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

28

With

Continuous

Research

&

Development

Videocon

brings

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 an unbelievable 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

29

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: Slim TV Rs. 28,400 89,900 : Rs. 10,400 18,900 30

Flat TV

Rs. 5,500 18,400 Rs. 4,600 - 9,500

Conventional TV :

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) 31

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 crosscultural 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 end approach, 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 32

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 as Authorized 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

33

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

34

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 to AK 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

35

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 lines 2. 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)

36

Cost Strategy 1. Leverage the strong base of Videocons will have glass a business: strong Thomson-Videocon 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 partnership very

negotiation position and can reduce impact of glass pricing

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 living rooms. 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.

37

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.

38