Eureka Forbes Part a

Topics: Drinking water, Water purification, Water supply Pages: 30 (8511 words) Published: January 24, 2013
1.1 General Introduction:
India’s consumer market is riding the crest of the country’s economic boom. Driven by a young population with access to disposable incomes and easy finance options, the consumer market has been throwing up staggering figures. India officially classifies its population in five groups, based on annual household income (based on year 1995-96 indices). These groups are: Lower Income; three subgroups of Middle Income; and Higher Income. However, the rupee income classifications by themselves do not present a realistic picture of market potential for a foreign business enterprise, because of significant differences in purchase power parities of various currencies. In fact, the Indian rupee has a very high purchase power parity compared to its international exchange value. For instance, while the exchange rate of one US dollar is 48.50i Rupees, the domestic purchasing power of a US dollar in the US is closer to the purchasing power of Rs 6 in India, for equivalent needs and services. As a result, India ranks fifth in the world, on purchase power parity terms, despite being having low per capita national income (US$ 340 per capita). Consumer durables sector is characterized by the emergence of MNCs, exchange offers, discounts, and intense competition. The market share of MNCs in consumer durables sector is 65%. MNC's major target is the growing middle class of India. MNCs offer superior technology to the consumers with added services. 1.2 Industrial background of the study:

The Indian consumer durables segment can be segregated into consumer electronics (TVs, VCD players and audio systems etc.) and consumer appliances (also known as white goods) like refrigerators, washing machines, air conditioners (A/Cs), microwave ovens, vacuum cleaners and dishwashers. Most of the segments in this sector are characterized by intense competition, emergence of new companies and introduction of state-of-the-art models, price discounts and exchange schemes. MNCs continue to dominate the Indian consumer durable segment, which is apparent from the fact that these companies command more than 65 per cent market share in the color television segment. In consonance with the global trend, over the years, demand for consumer durables has increased with rising income levels, double-income families, changing lifestyles, availability of credit, increasing consumer awareness and introduction of new models.

1.3 Origin of the industry:
After independence, the government put emphasis on making the country self- sufficient through increased industrial growth. Emphasis was given on the improvement of life style of people through providing good quality products with affordable price. This really put a positive impact on the consumer appliance industry which resulted in better yields. In the 1960s, the government initiated the Green Revolution' movement to increase the food grain production. Before liberalization in the year 1991 the industry growth rate was very slow. Once the foreign companies entered the Indian market after the liberalization the industry started to reach heights. The market liberalization policies in the 1990s led to the favorable growth of the economy of India which also improved the consumer appliance industry in the country. Since then the consumer appliance industry has really developed to a great extent. Marketing and advertising have targeted the middle to upper income groups that have the disposable income to purchase durable goods and luxury items. More segments are coming up and also plenty of foreign companies are entering the Indian market. By 2013, the industry is estimated to be about $5.7billion. It is expected to grow at 20%.

1.4 Growth of the industry:
Indian consumer home appliances industry has witnessed a considerable change in the past few years. Changing lifestyle, higher disposable income coupled with greater affordability and a surge in advertising has been...
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