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A
PROJECTREPORT
ON
“CUSTOMER SATISFACTION AT LG”
Submitted in partial fulfillment of the requirement for the award of degree of
Masters of Management Studies (MMS) under Mumbai University.
Submitted by
PRACHI R. NAGOTKAR
ROLL NO: 37
BATCH: 2009-2011
Under the guidance of
Mrs. YASHODHA DURGE
(FACULTY, BVIMSR)
Bharati Vidyapeeth’s Institute of Management Studies And Research
Sector NO 8, CBD Belapur, Navi Mumbai - 400 614

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CHAPTER 1: INTRODUCTION OF THE PROJECT

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1.1 CONCEPT& SIGNIFICANCE OF THE STUDY
A study of customer relationship management (CRM)and customer satisfaction level at LG.
It is a process or methodology used to learn more about customers' needs and behaviors in order
to develop stronger relationships with them. There are many technological components to CRM.
The more useful way to think about CRM is as a process that will help bring together lots of
pieces of information about customers, sales, marketing effectiveness, responsiveness and
market trends. CRM helps businesses use technology and human resources to gain insight into
the behavior of customers and the value of those customers.
Customer expectations can be identified using various methods such as
 Periodic Contract Reviews
 Market research
 Telephonic Interviews
 Personal visits
 Warranty records
 Informal discussions
 Satisfaction Surveys

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CUSTOMER SERVICE
Customer service is the provision of service to customers before, during and after a purchase.
Customer service plays an important role in an organization's ability to generate income and
revenue. From that perspective, customer service should be included as part of an overall
approach to systematic improvement. A customer service experience can change the entire
perception a customer has of the organization.
Classification of Service by Customer Experience.
The experience of the customer or the reason for which services are being sought can be broadly
divided into three categories.
This type of classification is important in order to understand the likely buyer behavior and then
devise and means to influence the buyers.
 Service Purchase Requiring Extensive Planning.
These services are usually expensive and are not purchased frequently. Customers are willing to
spend money and time in order to make the best choice.
 Service dependent on customerexperience.
A visit to a gymnasium or spa offering a workout, a massage or a sauna bath will be rated by the
customer according to the kind of feeling he or she experienced. Thus, customers tend to judge
these services by the experience they have had.

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 Service basedon trust.
when a patient is operated by a surgeon for appendectomy, he or she would not know whether
the appendix has actually been removed. Thus, the customer must have a feeling of trust agains
the company he or she is buying the product.
CUSTOMER SATISFACTION INDEX
All throughout our questionnaire we have subjected questions related to the calculation of CSI to
5 probable answers viz Excellent, Good, Fair, Poor and Very Poor. These have been assigned
ranking points ranging from 5 (Excellent) to 1 (Very Poor) respectively and the respondent has
to provide a unique answer to the questions posed to him by rating it in terms of these ranking
points. This CSI is calculated by multiplying the ranking point (Subject to the answers provided
by the respondent) by the number of respondents falling under that ranking point category and
then adding up all these products and finally multiplying the sum obtained by the parameter
weight age assigned to perception a customer has of the organization.
1.2:SCOPE OF THE STUDY
The scope of the study was to do a market research on the customer satisfaction level of LG
customers and understands their needs and expectations.
1.2 OBJECTIVESOF THE STUDY
 To analyse the customer satisfaction level of LG customers.
 Is Customer dissatisfaction the reason for the sales decline?
 Comparative study on other service provider, such as Sony.

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CHAPTER-2 INTRODUCTION OF THE
INDUSTRY

7. 11
The Electronics Industry in India took off around 1965 with an orientation towards space and
defence technologies. This was rigidly controlled and initiated by the government. This was
followed by developments in consumer electronics mainly with transistor radios, Black & White
TV, Calculators and other audio products. Colour Televisions soon followed. In 1982-a
significant year in the history of television in India - the government allowed thousands of colour
TV sets to be imported into the country to coincide with the broadcast of Asian Games in New
Delhi. 1985 saw the advent of Computers and Telephone exchanges, which were succeeded by
Digital Exchanges in 1988. The period between 1984 and 1990 was the golden period for
electronics during which the industry witnessed continuous and rapid growth.
From 1991 onwards, there was first an economic crises triggered by the Gulf War which was
followed by political and economic uncertainties within the country. Pressure on the electronics

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industry remained though growth and developments have continued with digitalisation in all
sectors, and more recently the trend towards convergence of technologies. After the software
boom in mid 1990s India's focus shifted to software. While the hardware sector was treated with
indifference by successive governments. Moreover the steep fall in custom tariffs made the
hardware sector suddenly vulnerable to international competition. In 1997 the ITA agreement
was signed at the WTO where India committed itself to total elimination of all customs duties on
IT hardware by 2005. In the subsequent years, a number of companies turned sick and had to be
closed down. At the same time companies like Moser Baer, Samtel Colour, Celetronix etc. have
made a mark globally.
The industry constitutes less than 1% of the global market. However, demand for these products
is growing rapidly and investments are flowing in to augment manufacturing capacity.
India remains a major importer of electronic materials, components and finished equipment
amounting to around $20 billion (Rs84,000 crore now) in 2011. The country imports electronic
goods mainly from China In the last four years, production of computers has grown at a
compounded annual growth rate (CAGR) of 31%, the highest among the various electronic
products in India. This has been followed by communication and broadcast equipment (25%),
strategic electronics (20%) and industrial electronics (17%).The consumer electronics segment,
which has grown at a CAGR of 10% in the last five years, includes a wide range of products
such as DVD, VCD/MP3 players, television sets and microwave ovens. The growth in demand
for telecom products has been high, with India adding two million mobile phone users every
month, which is one of the main reasons for the growth in production of electronic goods. This
growth is expected to continue over the next decade, too. The government has identified
electronics and IT hardware manufacturing as one of the thrust areas for development. A special
incentive package scheme (SIPS) was announced in March 2010 to attract investments for
semiconductor fabrication and other micro and nanotechnology manufacturing industries in
India. In the case of exports, the largest share was taken by electronic components, with 47% of
total electronic exports. Exports of electronic components have grown at a CAGR of 25% in the
last five years. India’s main destination for electronic goods is the US.
The growth in telecom products demand has been breathtaking and India is adding 2 million
mobile phone users every month! With telecom penetration of around 10 per cent, this growth is
expected to continue at least over the next decade. Penetration levels in other high growth
products are equally high and growth in demand for Computer/ IT products, auto electronics,
medical, industrial, as well as consumer electronics is equally brisk. Combined with low
penetration levels and the Indian economy growing at an impressive 7 per cent per annum, the
projection of a US$150 Billion+ market is quite realistic and offers an excellent opportunity to
electronics players worldwide.
This growth has attracted global players to India and leaders like Solectron, Flextronics, Jabil,
Nokia, Elcoteq and many more have made large investments to access the Indian market. In
consumer electronics Korean companies such as LG and Samsung have made commitments
by establishing large manufacturing facilities and now enjoy a significant share in the growing
market for products such as Televisions, CD/DVD Players, Audio equipment and other
entertainment products.

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The output of the Electronic Hardware Industry in India is worth US$11.6 Billion at present.
India is also an exporter of a vast range of electronic components and products for the
Following segments
 Display technologies
 Entertainment electronics
 Optical Storage devices
 Passive components
 Electromechanical components
 Telecom equipment
 Transmission & Signaling equipment
 Semiconductor designing
 Electronic Manufacturing Services (EMS)
The major players in consumer electronics are:
Personal Computers
Samsung, Wipro, HP, Compaq, Dell
VCD/DVDs
Sony, Panasonic, Pioneer, Toshiba
Hi-Fi/Music Systems
Samsung, Sony India, Thompson, BPL Sanyo Technologies, Videocon Industries, Mirc
Electronics, Philips India, Baron International, Eastern Micro Electronics, Matsushita Television
and Audio Ltd
Video Projectors
Phil Systems, Keltron Projectors, Birla 3M, Samrat Video Vision
Colour Television
LG Electronics, Philips, Sony; Sansui, Samsung, BPL, Videocon, Onida, Aiwa, Akai,
Thompson, Panasonic
Cameras/Camcorders
Sony, Canon, Olympus, Fuji film, Nikon

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CHAPTER-3 INTRODUCTION OF THE
COMPANY

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3.1 COMPANY HISTORY
LG's history dates back to 1947 when Lucky Chemical Industrial Company (LCIC), the first
chemical company in South Korea, was established. In 1958, LCIC started Goldstar Company to
manufacture consumer durables. Within a year of its inception, Goldstar manufactured Korea's
first radio called A 501.
In the 1960s, it started exporting radios to the US and Hong Kong and manufactured Korea's first
telephone, refrigerator and black & white television. With the consumer durables business
picking-up, LCIC changed its name to Lucky Goldstar. Since South Korea was a small market,
Lucky Goldstar expanded its operations to foreign countries and established its first overseas
branch in New York in 1968. In the same year, it manufactured Korea's first air conditioner. By
the 1970s, Lucky Goldstar became the first Korean consumer electronics company to get listed
on the Korean stock exchange and in 1977 its sales reached 100 billion won.
Since its initial years in India, LG has focused on bringing out new models regularly in its
product range. In its first year of operation in India, LG launched 70 models across a range of
products. In 1997, it introduced its Golden Eye Technology TV, which had a light sensitive
natural algorithm 'eye.'
The 'eye' responded to the changes in lighting in the room, accordingly and adjusted color
sharpness, brightness, contrast, tint and balanced them automatically.
Thus, LG showed that it cared for customers' health through its products. LG's concern for health of
customers was its unique selling proposition (USP) in the Indian consumer durables market.
Similarly, LG positioned its refrigerators as the 'preserve nutrition system' refrigerators. In 1998,
the company launched air conditioners as Health Air ACs...
When LG started its operations in 1997, it sold products that were imported. Hence, its products
were priced high and were equivalent to other foreign (Japanese) products. Industry analysts felt
that this strategy was adopted to make local consumers feel that LG products were by no means
inferior to Japanese products in performance or in quality.
However, in 1998, LG launched 'Sampoorna,' its first low priced TV for rural consumers, and
followed it with 'Cineplus.' According to Kim, as the Indian customers wanted the best products
at reasonable prices, LG started introducing quality products in the economy range.
In the first few years after its entry, LG did not get into price wars. Unlike other players, it did
not offer any exchange schemes or discounts.
LG officials said that they believed in an 'honest pricing policy' and its message to customers
read 'No scheme, no gimmick, great products and honest prices.'...
At LG, they believe that technological innovation is the key to success in the marketplace.
Founded in 1958, they’ve led the way in bringing advanced digital products and applied

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technologies to our customers. With their commitment to innovation and assertive global
business policies they aim to become a worldwide leader in advanced digital technology.
3.2 COMPANY PROFILE
Vision
LG’s vision is to deliver innovative digital products and services that make our customers’
lives better and easier—happier, even—through increased functionality and fun.
LG Electronics continues to pursue its 21st century vision of becoming a worldwide leader in
digital—ensuring customer satisfaction through innovative products and superior service while
aiming to rank among the world’s top three electronics, information, and telecommunications
firms by 2015. They hold tight to a philosophy of "Great Company, Great People," underscoring
their belief that only great people can create a great company.
LG strives for greatness in what they've identified as their three core capabilities: Product
Leadership, Market Leadership, and People Leadership—each strength a key part of realizing
our growth strategies for "fast innovation" and "fast growth".
LG Electronics is pursuing the vision of becoming a true global digital leader, attracting
customers worldwide through its innovative products and design.
CoreCapabilities
 Product leadership refers to the ability to develop creative, top-quality products, using
specialized new technologies.
 Market leadership refers to the ability to achieve top ranking, worldwide, thanks to a
formidable market presence in countries across the globe.
 People leadership refers to the market dominance achieved by selecting and nurturing
talented team players able to internalize and execute innovation across the board.
GrowthStrategies
Fast innovation calls for securing a competitive edge over the competition by setting—and
meeting—the highest of goals in all realms of innovation, by at least 30%. This applies to new-
product development and unveiling, innovation in design and technology—as well as product
sales, market share, and corporate value.
Fast growth is the result of implementing strategies designed to swiftly expand market size and
earnings, with and eye toward monetary growth.
CorporateCulture
Though a company can boast stellar management strategies and an outstanding and talented pool
of employees, it is still necessary to adopt a corporate culture that can fully unleash the power of
these capabilities.

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No to “No’s”
At LG, they try to meet every road block with an alternate route—brainstorming and working
harder before saying “no.”
‘We’ not ‘I’
LG’s embraces a code of strong teamwork—encouraging pride in achievement as goals are met
by many working together as one.
Fun Workplace
LG’s workplace is one where the individual’s creativity and freedom are respected, and work is
made fun.
Brand identity
The LG brand comprises four basic elements: values, Innovation, PEOPLE, and
PASSION.
Positioning Statement
LG strives to enhance the customer’s life (and lifestyle) with intelligent features, intuitive
functionality, and exceptional performance. Choosing LG is a form of self-expression and self-
satisfaction. Their customer take pride in owning the amazing and take comfort in knowing
he/she made a smart, informed decision.
Brand Platform
The LG brand is comprised of four basic elements: values, promise, benefits, and
personality.

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The meaning and inspiration behind LG’s logo design.
The letters “L” and “G” in a circle symbolize the world, future, youth, humanity, and technology.
Our philosophy is based on Humanity. Also, it represents LG’s efforts to keep close relationships
with our customers around the world.
The symbol consists of two elements: the LG logo in LG Grey and the stylized image of a human
face in the unique LG Red color. Red, the main color, represents our friendliness, and also gives
a strong impression of LG’s commitment to deliver the best. Therefore, the shape or the color of
this symbol must never be changed.
Face
The stylized image of a smiling face is meant to convey company friendliness and
approachability. That the portrait is one-eyed conveys LG’s profile as goal-oriented, focused,
and confident.
Circle
The circle represents the globe, symbolizing the world and all of humanity, as well as youth and
the future
Shape
The upper-right corner of the LG logo, intentionally left blank, makes the design distinctly
asymmetric—a nod to LG’s creativity and adaptability to change.
Colors
LG Red, the main color, symbolizes friendliness, and is also meant to convey LG’s commitment
to delivering the best. LG Gray represents technology and reliability.

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3.3 LG COMPETITORS
Samsung Electronics
Samsung Electronics, being reborn as the company responsible for the world's most innovative
digital convergence in 21st century, has adopted a new corporate brand slogan "SAMSUNG
DIGITall, everyone's invited."
Sony Corporation of America, based in New York City, is the U.S. subsidiary of Sony
Corporation, headquartered in Tokyo. Sony is a leading manufacturer of audio, video,
communications, and information technology products for the consumer and professional
markets. Its music, motion picture, television, computer entertainment, and online businesses
make Sony one of the most comprehensive entertainment companies in the world.
Toshiba Corporation, the Tokyo-based parent company, established American operations in
1965, through the incorporation of Toshiba America Inc. By 1989, Toshiba America had
achieved its current structure of several separate operating companies marketing a variety of
diversified electronics and high technology products.

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Philips Semiconductors, headquartered in Eindhoven, The Netherlands, employs over 32,000
employees in more than 50 countries. With sales of around $4.6 billion in 2002, Philips
Semiconductors is one of the world's top semiconductor suppliers. We want to be the leading
provider of semiconductor-based solutions for connected consumer and communications
applications.

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CHAPTER-4: RESEARCH METHODOLOGY

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Market research is the process of systematic gathering, recording and analyzing of data about
customers, competitors and the market. Market research can helps in create a business plan,
launch a new product or service, fine tune existing products and services, expand into new
markets etc. It can be used to determine which portion of the population will purchase the
product/service, based on variables like age, gender, location and income level. It can be found
out what market characteristics your target market has. With market research, companies can
learn more about current and potential customers. In total it helps to define the customer in a
given geographical region. The purpose of market research is to help companies make better
business decisions about the development and marketing of new products. Market research
represents the voice of the consumer in a company.
4.1 Steps involved in Market research
1. Establishing the objective
The objective of the researcher was:
To understand and to analyse the customer satisfaction level at LG.
Type of the Research: It is an Analytical type of research in which the researcher has to
use facts or information already available, and analyze these to make a critical evaluation
of the material.
2. Selecting the established research design
The researcher had given a questionnaire, to be filled up from all the LG customers who
had used the LG customer service in the last 6 months of the period.
3. Identify information types and resources
The questionnaire was based on the parameters such as
 Call center service
 Time frame
 Quality of service
 Number of days to complete the service.
4. Collection of data:
A specializes database depending on the type of the customers and their purchase date
were provided. The database included the date of purchase, the model number and the
name of the dealer or the supplier. The area of survey was Mumbai region. The number
of responded interviewed were 100. They were selected after screening 360 respondents.

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5. Approach :
It was a Field Research conducted through 2 means:
Telephone survey: Here the researcher had to call the customer and conduct the survey.
The call would consist of a series of questions, as well as open ended questions regarding
the service provided by the executive.
Personal interview: personal interview included, visiting the customer’s residence and
conducting the survey. The researcher had to understand and analyse the respondent’s
queries about the service provided by the LG servicing person.
6. Execution of the project:
The researcher had to see that the project is executed in a systematic and in time.
Before any interview a study had to be made of the respondent, its product purchased
and the person to be interviewed. After every interview a daily report was made and
submitted to the person in-charge.
7. Analysis of Data:
After the data have been collected, the researcher performs the task of analyzing them.
The analysis of data requires a number of closely related operations such as establishment
of categories, the applications of these categories to raw data through coding, tabulation
and then drawing statistical inference.
8. Interpretation :
It is the most important part in any research. The researcher has to Analyse and interpret
the data in such a manner that the hypothesis made by the researcher support or
contradict the situation. The process of interpretation may quite often trigger off new
questions which in turn may lead to further researches.

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CHAPTER-5 INTERPRETATION AND ANALYSIS

21. 25
The total numbers of respondents surveyed were 125, wherein approximately 100 respondents
were willing to share their experience and their level of satisfaction with LG service.
Q1: Have you repaired or serviced any LG electronics product in last 6 months?
a. Yes b. No
Yes 125
No -
Q2: Where did you contact first to launch the complaint?
a. Service center c. Call Center
b. Dealer
Service center 47
Dealer 20
Call center 33
Interpretations:
47% respondents have contacted the service center; reason is that many of the LG
products such as TV and A/Cs are repaired at the service centre. Dealers do not provide
any assistance for white goods products.
33% respondents access the call center service when they need require urgent
information or online help.
Q3: Ask if ‘a’ in Q.2, Where did you get the number from?
47
20
33
Service center
Dealer
Call center

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a. Manual c. Product
b. Dealer d. Other
Manual 36
Dealer 15
Product 44
Other 5
Interpretations:
44% respondents replied that they refer the product for the number as it is
accessible fast and dealers provide least assistance.
Q4: How many times did you call service center to register the complaint?
a. Once c. Twice
b. Thrice d. More than 4 times
Once 26
Twice 55
Thrice 12
More than 4 times 7
36
15
44
5
Manual
Dealer
Product
Other

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Interpretation:
Many respondents are unsatisfied by the service provided by the LG sales person. As
there are complaints that the call center people do not respond to their calls, or either
their phone is busy.
Q5: If more than once what was the reason to do so?
 Do not respond to calls
 Long waiting period
 Call gets disconnect
 Call representatives do not understand the problems
 Product Delivery is never on time.
Q6: Considering a scale of 1 to 10, how will you rank the overall quality provided by LG to you?
Below 5 More than 60%
Above 5 40%
Interpretation: The quality of service is satisfactory as there is a negative feedback from the
existing customer.
Q7: What is the reason for giving, ------- rating?
 No timely delivery of products.
26
55
12
7
Once
Twice
Thrice
More than 4 times

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 Spare parts too costly.
 Service representative are not equipped with the required tools when come for any repair
work.
Q8: How many times did the Service man visit your place to repair the product?
a. Once c. more than twice
b. Twice
Once 30
Twice 60
More than twice 10
Interpretation:In the first visit by the service representative they are not equipped with
the required tools, thus have to visit twice.
Q9: From the time you have launched the complaint, how many days did it took to complete the
work?
2-5 days 30%
More than 5 days 70%
30
60
10
Once
Twice
More than twice

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Interpretation: The spare parts of LG machine are not readily available and if available they are
priced at a high cost.
Q10: According to you how many days should it take?
 Most of the respondents want their complaints to be answered and solved within 24hs of
the complaint logged.
Q11: Any other suggestions you want to give?
 Must train the staff.
 Must improve the call center service.
 Provide some augmented service.
Customer satisfaction score(CSI):
Parameter Parameter
weight age
LG CSI Idle LG CSI
Quality of Demo 1 108 135
Product Quality 6 822 1110
Ease of use 3 453 355
Perceived
customization
2 266 370
Quality of After Sales
Service
4 712 960
Overall service
provided
5 685 925
Overall CSI 3046 4055
% 75.11 100
CSI = ( ∑ 𝑛
𝑖=𝑜 (Rankikng point (i) * No of respondents)) * Parameter weight age)
Where n: The maximum available rating point for the questions
i.e. considering the following respondentquestion and the rating points given to it
and also the parameter weight age assigned.
Here the CSI will be calculated based on the above formula as
follows:-

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CSI = ( Σn(Ranking point (i) * No of respondents)) * Parameter weight age)
Thus,
CSI - = ((1 * 0) + (2 * 0) + (3 * 5) + (4 * 24) + (5 * 8))) * 3 = 453

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CHAPTER-6: CONCLUSIONS AND
SUGGESTIONS
6.1 CONCLUSION
Thus the overall satisfaction of LG customer service is negative in nature in case of consumer
durables and mobile phones. They lack in the delivery time of the product as well as in logistics.
To improve in their services offered and to increase the sales they must incorporate new
techniques for customer satisfaction.
6.2 SUGGESTIONS
 Exceed customer satisfaction level.
 Instant feedback from the customers after the service provided.
 Increase efficiency in delivery timings.
 Employee Incentive Programs
 Suggestion Boxes
 Improved supervision

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ANNEXURE
Questionnaire
2. Have you repaired or serviced any LG electronics product in last 6 months?
a. Yes b. No
Continue if yes or else terminate
3. Where did you contact first to launch the complaint?
a. Service center c. Call Center
b. Dealer
4. Ask if ‘a’ in Q.2, Where did you get the number from?
a. Manual c. Product
b. Dealer d. Other
5. How many times did you call service center to register the complaint?
a. Once c. Twice
b. Thrice d. More than 4 times
6. If more than once what was the reason to do so?
7. Considering a scale of 1 to 10, how will you rank the overall quality provided by LG to
you?
8. What is the reason for giving, ------- rating?
9. How many times did the Service man visit your place to repair the product?
a. Once c. more than twice
b. Twice
10. From the time you have launched the complaint, how many days did it took to complete
the work?
11. According to you how many days should it take?
12. Any other suggestions you want to give?