The electronics sector in India has grown rapidly since the late 1980s with increasing private investment. It contributes significantly to the economy and employment. Major companies include LG, Sony, and Samsung. The sector faces moderate rivalry among firms. Changing lifestyles and increasing incomes are driving growth in the sector. Companies are shifting to more customer-oriented demand forecasting models to better understand market trends. The sector has immense potential for further expansion.
2. INTRODUCTION
• Until 1984, the electronics sector was primarily
government owned.
• The late 1984s witnessed a rapid growth of the
electronics industry
• In 1991, private investments - both foreign and
domestic - were encouraged.
6. Economic
• Globalization
• Consumers Disposable Income
• Exchange Rates
• Labor Costs
• Inflation Rate (Cost of Capital)
Political
• Government Type & Stability
• Corruption
• FDI Policy
7. Social
• Population Growth Rate
• Age Distribution
• Perception of Safety
• Health Consciousness
• Employment Patterns
• Corporate Social Responsibility (CSR)
Environmental
• Climatic Conditions
• Environmental Protection Agency of India
• E-Waste Management (Waste like Lead,
Cadmium, Mercury, etc.)
8. Technological
• Degree of Automation
• Emerging Technologies
• Impact of Internet
• Rate of Technological Change
• R&D Activity
Legal
• Tax Policies
• Labor Laws
• Trade Restrictions
• Government Acts (Ex: Environmental Protection
Act, 1986)
11. Pricing Strategies
• 1997 – Sold imported products that were priced
high, equivalent to Japanese products.
• Make local customers feel that LG products were
not inferior to Japanese products.
• 1998 – Launched Sampoorna, first low priced TV
for rural consumers.
• LG started introducing quality products in quality
range.
• For first few years, LG did not get into price wars.
12. Promotion
• 2004 – 5% of revenue spent towards
advertising.
• Similar to promotional activities of an FMCG
company.
• Unlike others, LG advertised all round the
year.
Pricing Strategies
• Believed in an “Honest Pricing Policy”.
• Message to customers - No scheme, no
gimmick, great products and honest prices.
15. Growth Drivers
Continued economic growth (9.5-10.5 % CAGR).
Favourable demographics.
Increasing Urbanization, nuclear families.
Increasing disposable incomes and affordability .
Availability of new products and technologies.
Increase in organized retail.
Targeting rural markets.
Zero interest EMI and credit card purchases.
Festival deals and discounts.
16. Demand Forecasting
Earlier LG Electronics' Demand forecasting
analysis model only included logistics, inventory
and production information for performing
analysis.
Shift of demand forecasting paradigm from
producer oriented to consumer oriented model in
2009.
Expansion of Business Intelligence (BI) from a
perspective of Market Sensing concept.
Now customer tendencies, market trends, real
economy and technology trends are also
included while demand forecasting analysis.
17. Demand Forecasting Methods
Opinion Poll methods
Expert opinion
Delphi Method
Market Studies and experiment
Statistical techniques
Extrapolation
Reference class forecasting
Time series projection methods
18. CONCLUSION :Conclusions
• Electronics sector has shifted from primarily
public sector to private sector and has immense
growth opportunities.
• Its total contribution to economy and sales is
ever increasing.
• Contribution in creating employment
opportunities.
• Rivalry among firms are moderate.
• Changing lifestyle and increasing income is a
stimuli for its growth.
19. Conclusions
• Big brands with greater market share include
Sony, whirlpool and Voltas.
• Entire sector is moving towards being more
and more customer oriented.
• New rural markets present huge potential for
growth.