VIDEOCON INDUSTRY
History of Videocon
Videocon founded in 1985, is one of India's youngest companies to touch a
turnover of Rs 50 billion.
Founder - Late Nandlal Madhavlal Dhoot
Sons envisioned Videocon International Ltd.
Competitors:-Whirlpool, LG, Samsung & other giants
Largest manufacturers of Colour Picture Tubes and Glass shells forming the
backbone of many Colour Television manufacturers around the world.
Videocon is an Indian multinational with interests in Consumer Electronics, Home
Appliances, Colour Picture Tube Glass, and Oil & Gas. Videocon was founded in 1987
by Nandlal Madhavlal Dhoot. At that time it used to manufacture TV and Washing
Machine. In 1989-90, Videocon started manufacturing Home Entertainment Systems,
Electric Motors & AC. Videocon entered Refrigerators and coolers segment in 1991. In
1995, Videocon started manufacturing Glass shells for CRT and in 1996 it ventured into
Kitchen appliances and crude oil segment. In 1998, Videocon started manufacturing
Compressors & Compressor Motors. In the year 2005, Videocon tookover Philips Color
TV Plant. In 2008, Videocon tookover 3 plants of Electrolux India and acquired
Thomson CPT. Today, it has evolved into a giant conglomerate with annual revenues of
over U$4.1 billion.
LOGO LOGIC
The new symbol of Videocon asserts its passion for global impact, and the two ‘E’s on
either side represent the Group’s wide spectrum of interests ranging from ‘Electronics to
Energy’. Along with the steely glint, this communicates the group's global ambition, its
strength, sterling credentials and innovative drive. A symbol that proclaims a paradigm
shift. A sign that represents the new force that is Videocon. Thus recapitulating our
principle of reaching out and touching the lives of millions of people Worldwide.
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VIDEOCON INDUSTRY
Business Environment
Consumer Electronics, Home Appliances & Compressor manufacturing in India
Videocon enjoys a pre-eminent position in terms of sales and customer satisfaction in
many of our consumer products like Color 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 our in-house compressor
manufacturing technology in Bangalore. Videocon has the largest distributed
manufacturing base across India – 12 facilities. It has the Capacity to manufacture 4
million CTVs, 2.5 lacs washing machines, 1 mn. DVD players, 4.8 mn refrigerators.
Display industry and its components
With the Thomson acquisition Videocon has emerged as one of the largest Color 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.
Color 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 of oil per day. The group has ambitious plans
for expansion in this sector globally.
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VIDEOCON INDUSTRY
2010 Road map
A newly formulated ‘2010 Road Map’ outlines the group’s broad strategy. Besides
aspiring to be among the top five in both branded consumer electronics and contract
manufacturing in the world by 2010, it also wants to control one-third of the branded
domestic market.
Strategic Alliances & Acquisition
Multibrand strategy- videocon/akai,1995
Electrolux Kelvinator, Videocon merger in 2006
Videocon: From market leadership to overall brand consolidation
Package from Airtel, Videocon, Alcatel
Videocon's global strategy
Competitive Advantage
Cost of production
Largest distributed manufacturing base across India - 12 facilities
Managing a complex supply chain
Backward integration
Taking advantage of policy-friendly locations
Wide product portfolio
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VIDEOCON INDUSTRY
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VIDEOCON INDUSTRY
COMPETITOR’S STRATEGIES
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 “Cineplus” and “Sampoorna” range for the rural markets.
* LG was the first brand to introduce gaming in CTVs. In continuation of its
association with cricket, LG introduced the cricket game in CTVs.
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
Onida’s differentiation strategy is based on its brand based advertising rather than feature
based advertising. They used its brand mascot ‘The Onida Devil’ and its punch line
“Neighbor’s Envy Owner’s 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.
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VIDEOCON INDUSTRY
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 Philips’s world, they are
trying to improve the consumer’s 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
Sony Positioned as a premium product giving the best quality to cater to the demands of
its high end customers.
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VIDEOCON INDUSTRY
AREA OF OPERATIONS AND BRANCHES
CAT’ A CAT’ B CAT’C CAT’D CAT’E
MUMBAI HYDRABAD AMBALA AHMEDNAGAR CUTTACK
NEW BANGLORE VADODARA AURANGABAD GWALIOR
DELHI
CHENNAI COCHIN COIMBATORE HUBLI JABALPUR
KOLKATA JAIPUR SURAT RANCHI RAIPUR
PUNE GUWAITI KOLHAPUR PARWANU
AHEMADABAD NAGPUR AGRA MALE
INDORE RAJKOT JODHPUR PONDICHORY
LUKHNOW NASHIK KANPUR
VIJAYWADA VARANASI
GAZIABAD JAMMU
ASANSOL
MANGLORE
SOLAPUR
SLIGURI
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VIDEOCON INDUSTRY
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 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 CTVs 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.
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VIDEOCON INDUSTRY
SEGMENTING, TARGETING AND 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.
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
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VIDEOCON INDUSTRY
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
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
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.
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.
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VIDEOCON INDUSTRY
Points-of-Difference (PODs) are attributes or benefits consumers strongly associates with
a brand, positively evaluate, and believe that they could not find to the same extent with a
competitive brand.
Videocon's POD is the quality product with low cost.
With the strong backward integration Videocon can provide the products with low cost.
Thus, Videocon is positioned itself as a reliable and value-for-money product.
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VIDEOCON INDUSTRY
RECOMMENDATIONS
1. Improve relationship with existing clients ; Use of Thomson’s 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. Leverage Slim product
offering.
4. Improve after sales service
5. Free service camp on the wheels.
6. Study unique product range / pro large to fill market gaps in markets such as Asia
and Eastern Europe / CIS / South America
7. Focus on reduction of costs through reduction of glass, shift to AK mask and
reduction of process rejection.
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