14-04-2014, 03:11 PM
STUDYING THE MARKET FOR ONIDA WASHING MACHINES & MICROWAVE OVENS IN PUNE REGION & INVESTIGATING THE POSSIBILITIES FOR INCREASING THE MARKET SHARE
ABSTRACT
In light of the intense competition facing the consumer electronics industry, manufacturers are constantly engaged in the creation of new products and introducing new technologies that would hopefully win consumers' acceptance. However, against a backdrop of changing technology and sophisticated consumer wants, gaining customers’ acceptance and increasing market share for both existing and new products becomes an uphill task. MIRC Electronics offers a wide range of consumer durables, including C-TVs, LCD TVs, Air Conditioners, DVD Players, Microwave Ovens, Washing Machines, and Mobile Phones, under the brand name ONIDA. Although the brand has been performing extremely well in the TV, DVD, and AC categories, it is lagging behind LG, Samsung, Whirlpool, IFB, Kenstar, and other major players in the categories of washing machines and microwave ovens, with a market share of only 6% and 8% respectively. In Pune region, ONIDA washing machines and microwaves ovens share only 5% and 7% respectively. Moreover, in top-loading washing machines, which are now more in demand, the share by value and volume is just 3.3%. Besides, on analyzing the past 4 years’ sales data for different territories in the Pune region, it was analyzed that more than 40% of the dealers, especially in the Pune city, has stopped dealing with ONIDA washing machines and the sales of microwave ovens have also been declining at these counters. In FY 2009-2010, there has been an increase of only 0.9% in sale of washing machines over the past year, which is not a very encouraging figure
Therefore, the primary aim of this research is to study the current market for ONIDA Washing Machines & Microwave Ovens in the Pune Region, with emphasis on identifying factors affecting the sales of these two product categories. In order to improve the market share and increase the scope for repeated purchases and brand loyalty that eventually leads to optimum profitability, it is important for marketers to first understand the consumer’s buying behavior and his preferences and perceptions towards choosing the product. At the same time, after-sales service is equally important in satisfying consumer needs, an important factor in creating long term profitable relationship with the customer. According to Alexander et al, 2002, after-sales may generate more than three times the turnover of the original purchase during a given product’s life-cycle, and often provides profitability higher than product sales (Alexander et al., 2002).
Industry Size, Growth, Trends
The consumer durables market in India was estimated to be around US$ 5 billion in 2007-08. More than 7 million units of consumer durable appliances have been sold in the year 2006-07 with color televisions (CTV) forming the bulk of the sales with 30 per cent share of volumes. CTV, refrigerators and Air-conditioners together constitute more than 60 per cent of the sales in terms of the number of units sold. In the refrigerators market
Current and Future Scenario
In terms of Purchasing Power Parity (PPP), India is the 4th largest economy in the world and expected to overtake Japan in the near future to become the 3rd largest. Indian consumer goods market is expected to reach $400 billion by 2010. India has the youngest population amongst the major countries. There are a lot of young people in India in different income categories. Nearly two- thirds of its population is below the age of 35, and nearly 50 % is below 25. There are 56 million people in middle class, who are earning US$ 4,400- US$ 21,800 a year. And there are 6 million rich households in India. The upper-middle and high-income households in urban areas are expected to grow to 38.2 million in 2007 as against 14.6 million in 2000.
MARKET FOR MICROWAVE OVENS
Even as a host of electronic products made rapids inroads into Indian homes in the last decade, the microwave oven – an essential item in every kitchen in developed countries-did not. Homemakers preferred to make do with their gas stoves, Tawas and pressure cookers. Last year was different though. The microwave oven market jumped as much as 25 percent to about 2.4 Lakh units. This is still a fraction of the color television market, which stands at over 6 million units, but going by the current level of activity, microwaves in India appear set to go the global way.
A combination of factors has brought the market alive. Leading players like Samsung, LG, Whirlpool and Electrolux have introduced a range of models, with prices of entry level ones coming down to below Rs 6,000 last year. Many local players are sourcing products from China and selling it here at very attractive rates. LG, Samsung , Electrolux are also making determined efforts to get the homemaker to see the microwave as a cooking device, rather than as a mere reheating one, by holding country-wide cookery classes and home demonstrations. Some has also customized microwaves to Indian conditions—there are, for instance, Whirlpool microwaves that seek to replicate the tawa effect to make Indian items like parathas and crisp dosas, and those which enable steam cooking for items like idlis and dhoklas.
Innovations are also making the product look increasingly attractive. The longstanding concern that microwaves destroy a lot of valuable nutrients, far more than other forms of cooking, is being sought to be addressed technologically. Samsung claims its patented bio ceramic enamel coating helps retain essential vitamins while cooking. With the increased purchasing power of the younger generation and with more and more women balancing home and careers, any product that provide convenience and saves time will be well accepted in time to come. As for the companies, with competition heating up with increasing capacities and players, companies with the ability to cater the requirements of middle income households and with a certain level of indigenous know-how will emerge winners in this cluttered market.