Scenario in the consumers Durables sector:-
Prior to liberalisation, the Consumer Durables sector in India was restricted to a handful of domestic players like Godrej, Allwyn, Kelvinator and Voltas. Together, they controlled nearly 90% of the market. They were first superceded by players like BPL and Videocon in the early 1990s, which invested in brand-building and in enhancing distribution and service channels. Then, with liberalisation came a spate of foreign players from Samsung to LG Electronics to Sony to Aiwa. Both rising living standards, especially in urban India, and easy access to consumer finance have fuelled the demand for consumer durables in the country. Also, the entry of a large number of foreign players means the consumer is no longer starved for choice. But this has also resulted in an over-supply situation in recent times as growth levels have tapered off.
The major players in the consumer durables industry, operating in different sectors such as air conditioners, washing machines, refrigerators & television include: Blue Star Ltd., Mirc Electronics Ltd., Whirlpool of India Ltd., Philips (India) Ltd., BPL Ltd., Sony Corporation Ltd., Samsung India Ltd., LG Electronics India Ltd., Videocon International Ltd.
Entry of Samsung in India
Emerging Markets (EMs) with large consumer bases and untapped demand constitute the major growth opportunities for the multinationalsand global companies. However, not all companies are successful in establishing a foothold, leave alone operating profitably, in such markets. For most, it takes years of struggle before they can even breakeven. Marketing is difficult in such EMs because of little or no market data, non-existent or poorly developed distribution systems, lack of regulatory discipline, and where regulations exist, a propensity to change them frequently and unpredictably.
Samsung entered India in December 1995 as a 51:49 joint venture with Reasonable Computer Solutions Pvt. Ltd (RCSPL), owned by Venugopal Dhoot of the Videocon group. In 1998, RCSPL diluted its stake in Samsung to 26% and in November 2002, the FIPB cleared Samsung's proposal to buy RCSPL's remaining (23%) stake. With Samsung buying the total stake of RCSPL, it became a wholly-owned subsidiary of its South Korean parent company. In spite of being a latecomer to India, Samsung was able to become one of the top consumer electronic companies in India, an emerging market was due to a combination of several aspects: Product innovation, Promotion, Pricing, distribution and Positioning; wherein Samsung primarily focused at.
The three-pronged objectives of Samsung are: -
1) Strengthening their channel relationships,
2) Enhancing their product portfolio and
3) Creating the best service infrastructure, to gain more mindshare."
Many multinational companies adopt a “less developed countries” mindset, assuming that these markets are at an earlier stage of the same development path followed by the developed countries. To take the example of the automobile industry, Ford and GM launched their outdated models like Ford Ikon and Opel Astra in the Indian market. When these models did not sell well, the companies changed course and decided to launch newer models in India. In the case of Samsung, the company from the very beginning launched its whole range of high technology products, which included CTVs, audio and video products, information technology products, mobile phones and home appliances in India. It introduced products such as the ‘Bio’ range in CTVs, high-powered Woofer series of colour televisions in 21-inch and 29-inch conventional and 21-inch flat TV segments. And not to forget the lateset DNie television.
By positioning itself on the technology platform, Samsung was able to differentiate itself from its competitors. Differentiation today is the key for a brand to be preferred by the consumers, when...