BRIEF HISTORYYEAR TURNING POINTS

Late 1960s B&W TV Transmission1982 Import of Colour TV sets (coinciding with the broadcast of

Asian Games)1992 Liberalization Process initiated1993-94 Dismantling of controls such as licenses, use of foreign

Brand Names etc.1994-95 Entry of MNCs – Panasonic, Sony, LG, Samsung etc.

Lowering of Import duties.Cable TV Started

1995- Till Date Entry of Many MNCs & Rapid Growth2001 Non Tariff Barriers on Imports removed.2004 Free Trade Agreement with Thailand implemented,

resulting in reduction of import duties on ColourTelevision sets, Colour Picture Tubes, Refrigeratorsand Air Conditioners, thus more competition.

INDIAN TV INDUSTRY-FACTSHEET• India is one of the largest TV markets in terms of viewership• Technology driven industry- Companies need to constantly improvise,

innovate & customize their products• Television is the mainstay of the consumer electronics industry in India.

CTV production expected to grow at 10% as healthy demand projected during 2010-11: CMIE

INDIAN TV INDUSTRY-FACTSHEET …contd.• Quantitative & qualitative change in TV technology and

software • With the advent of several local and foreign satellite

channels, demand for CTVs has seen a rise.• Shift from joint family system to that of nuclear families.

• Sale of TVs also tends to be event driven (the Cricket World Cup in 1999, CTV sales recorded a phenomenal rise of 40-50%)

• Strong brand differentiation and prices (industry has products available at different price points at all levels)

• MNCs & domestic companies are now making India as a manufacturing centre (Low cost skilled labour, tax free zones i.e. SEZs, Qualified workforce)

Major market players

LG electronicsPositioned itself as a frontrunner by developing groundbreaking products such as LCD & Plasma TVs with built-in DVR.

Samsung•Strategy of Samsung in India to create premium image had failed.•Competition with LG has led Samsung to play price game•Seeking for digital leadership in India by introducing its digital ready televisions like the 40" LCD Projection TV, 43" Projection TV and the Plano series of Flat Color televisions.

Onida• Failure of devil ad in revitalizing its position• Technical tie up with JVC(Japan victor company)• Requires more strategy to compete with the market

Sony7000 channel partners, 215 Sony world and Sony 21 branchLocations

PhilipsOperates in Medium and high range price

VideoconPrice player and image as a low price brand

Market Leader- Videocon• Videocon, an Indian multinational, is the market

leader in television industry.• An annual turnover of US$ 4.1 billion, making it

one of the largest consumer electronics

Market Share

• Market share, in strategic management and marketing is, according to Carlton O'Neal, the percentage or proportion of the total available market or market segment that is being serviced by a company. It can be expressed as a company's sales revenue (from that market) divided by the total sales revenue available in that market.

Videocon Industries; 36.02

LG Electronics; 18.38

Samsung India Electronics;

15.86

Mirc Electron-ics; 5.3

Philips Elec-tronics India;

2.32

Panasonic; 1.5

Others; 22

Market Share Of Individual Firm’s In Television Industry

Degree Of Concentration for Television Industry• Herfindahl Index (H) is the method of estimating the degree of

concentration in an industry.• The HHI potentially reflects both the number of firms in the

market and their relative size• (H) is the sum of the squared values of the market shares of all

the firms in the Industry.• HHI lies between 0 and 1.• Higher the Herfindahl Index , the greater is the degree of

concentration in the industry• Herfindahl Index Of Concentration for Television Industry is

0.193• Perfect competition has the value zero, while monopoly has the

value one

Hirschman-Herfindahl Index

2010

The value of HHI in Television industry is less than 0.25 for all the years. In earlier decades, competition was fierce, while now, market structure is more of competitive in nature. However , competitive market structure is hard to find in its true sense. Thus, we consider Television market to be monopolistically competitive market structure.

Market StructureDue to few major market players, and HHI ( Herfindahl Index of Concentration ) index lower than 0.25 (0.193) Indian market for CTV (color television) is Monopolistic Competitive in nature.

Monopolistic Competitive in nature, characteristics of CTV Market

Market is dominated by a small number of participants who are able to collectively exert control over supply and market prices.

The sellers are the price makers and not price takers, since the few sellers mutually dominate the pricing decisions.

Firms are interdependent for decision making.

Short-run equilibriumMR = MC

Long-run equilibrium

Under monopolistic competition

Segment StructureThe colour television market in India is divided majorly into 5 segments: LED/ Plasma Ranging from 42 to 56 inches on average, consume more power than

LCD televisions of the same size Price ranging from 50,000-4,00,000 only Luxury nature.

LCD Sizes from 15 to 55 inches. With lower costs and a wide array of sizes. Price ranging from 15,000-125000 only Lower Price band is normal and Upper price band is luxury

Ultra slim Compact CRT, which make it 20% slimmer than conventional. Price ranging from 7,000-15000 only Normal Price band

Flat Suits the budget, and a conventional with feel of elegancy due

to flat screen Price ranging from 6,000-10000 only Normal Price band

Conventional Normal TV Price ranging from 5,000-8000 only Inferior Price band

Segment Structure continued…..

2005 2006 2007 2008 2009 20100

2000

4000

6000

8000

10000

12000

14000

88679436

10029

1065511204

11795

Units Sold

Units SoldLinear (Units Sold)

Facts on growth of TV Industry

Forces acting on TV Industry

Buyers Analysis THE UPGRADERS Upgraded from Black and White TV to Color television Constitutes approximately 62% of the market

FIRST TIME BUYERS Comprise 18 per cent of the market. Primarily belong to nuclear families. The structure of these families is either DINK or SINK

MULTIPLE SET PURCHASERS Comprise the lowest share of the market in terms of volume with just 8% set.

REPLACEMENT PURCHASERS This segment usually trades in its old CTV for the new models. Around 12% of the market Holds immense potential in the future. Replacement demand is expected to account for 55-57 per cent of total CTV

sales by 2010-11 ( Technology change)

CHALLENGESHeavy taxation in the country ( 25-30 %) , whereas the corresponding tariffs in other Asian countries are between 7 -17 %.

65%of Indian population that lives in its villages (still conventional CTVs and doesn't know what flat screens are)

Poor infrastructure , Regular power supply is imperative for any consumer electronics product. But that remains a major hiccup in India.

PROBLEM AREAS

Inadequate stress on R&D

Quality - Yet an issue

After Sale Service & Customer Satisfaction

Fragmentation of Capacity - not able to achieve economies of scale

Action Points for Industry for Growth

Commit sufficient resources for R&D

Need to be more quality conscious

Need to improve After Sales Services

Need to Build economies of Scale

Explore exports as a viable option.

More emphasis to develop Rural Market.

THANK YOU