Microeconomics in Real Life – Household TV

By: Varun Khandelwal

Indian Television Household industry is a great real life example of application of Microeconomics. Till late 80s, Indian Manufacturer like Crown, Salora, Texla, Oscar and Beltek were the market leader of Black & White TVs in India. However, advent of Color TV technology which was great substitutes of obsolete Black and White TV led new market leaders like Videocon, BPL and Onida emerge in TV market. This is a great example of Threat of Substitutes (Color TV overruling B&W TV market) and significant impact of Technology on firms.

Below is the industry analysis of the TV market incorporating Porter’s Five Forces model:

Till late 90s Videocon, BPL and Onida enjoyed leadership and apparent oligopoly in the TV market. However, advent of MNCs such as AIWA, Akai, LG, Philips and Samsung changed the landscape of TV industry. Especially Akai and AIWA which used to work upon procurement/assembly based model brought upon the cut-throat price war in TV market. For an instance, earlier prices of Color TVs used to be around Rs 20,000 for a 21’ TV. However, Akai and AIWA through its smart operations and marketing strategies brought down the same TV cost to almost half. Moreover, it brought concept of TV exchange for the upgraders and rebuyers leading to same TV cost mere Rs 5000. At the same time, world leaders like LG and Samsung started Sales on Volume strategy to push their quality product in Indian market.

From the above table it could easily be observed that with increase in demand the nominal price of TV has decreased significantly and hence obeying the Demand-Supply rule. New Technology advent and price war also led to significant shift in Demand and Supply curve many times. Another point to note is that demand of TV is highly seasonal in India. During festivals and marriage season, there is always a high demand for TV. TV market has become highly competitive market and the life cycle of any new TV has become too small. Currently, TV industry in India is undergoing tremendous changes in terms of Technology and customer segments. New augmented features in TV, becomes in expected and generic within months. New technology based television like HDTV, LCD are replacing traditional color TV very fast. The few important things TV manufacturing/marketing firms should keep in mind are:

1.       Research and Development and Innovation are the key to become successful in TV market.

2.       Quality and trustworthiness is important. TV is still bought by majority consumer for a long term basis so they want good quality.

3.       Smart Pricing strategy is required to have an edge among so many competitors and no product difference.

4.       Consumer Segmentation is important for every TV

5.       Increase in disposable income in India will lead to further increase in Demand of TV.

Hence, we can observe practical application of microeconomics in Household Television industry of India.

Great Lakes Term 2

Yet another term over within no time. A fair feedback.

Great Lakes Term 1 (22nd June to 7th August)
Course Name	Facilitator	Positives	Delta (No negatives)	Any Comments
Financial Management	Prof.  Narendar Rao, Professor of Finance, Northeastern Illinois University, Chicago, Illinois, USA	The course has been taken very systematically and in a well organized manner from the Prof. The slides are really useful. Prof Rao is also a great motivator and thinker of life. His inspirational thoughts were really good.	Most of students were just beginners in the finance. The lectures were too sleepy sometimes. Prof should have added some spices in the course to make it interesting.	I like the motivational style of the Prof. Especially, a very old song “Hum hindustani” played in the last lecture was just awesome. Hats off
Managerial Accounting	‘Padmashri’ Dr. Bala. V. Balachandran Professor Emeritus of Accounting Information & Management, Kellogg School of Management, Founder and Dean, Great Lakes Institute of Management	Who else could teach the course better than the Uncle Bala who is among the highest echelon of the Accounting. No more words.	Bigger class size	The energy level of Uncle Bala is just unmatchable. His each and every word motivates you to the core and puts so much confidence in you.
Marketing Management II	Dr Krishna Ram/ Prof Paul Prabhaker	Great course. Taught in a great way. Krishna Ram is just straight and he knows what should be relevant for the experienced people. Prof  Prabhakar is a genius of marketing fundas. The beauty of such Professor lie to create the interest for the course rather than just delivering the course.  Prof Prabhakar poured in amazing principles and new dimensions of thought which no book speaks about till now.	Bigger class size in Prof Prabhakar lectures	Great course and facilitator. Wished there could have been more time with you.
Micro Economics	Prof. Mankad/Dr. Rakesh Singh	Dr Mankad is has been the Prof of Economics for Dr Rakesh Sing. So anybody may understand the stature of the person. Each and every word out of him is like a pearl. Excellent speaker. http://kwlvarun.blogspot.com/2009/07/dr-harkant-mankad-economics-is-life.html Dr Rakesh Singh has been the facilitator in term 1 as well http://kwlvarun.blogspot.com/2009/06/dont-jump-to-conclusion-too-early.html	Bigger class size.	I perfectly enjoyed the classes. I remember that Micro Economics end term was with one more subject. I planned to give more time to other subject but end up in reading Economics just in the sheer urge of knowing more what have been taught in the class.
Operations Management I	Prof. Vaidy Jayaraman,  University of Miami, School of Business, Florida, USA	A great facilitator and a great actor. I loved his pedagogy and interest he developed among students. His tones changes, dashing style and teaching everything on board helped a lot to absorb most out of the course. I think if everyone teaches in his way then I am sure any course could be successful in giving most out of the sessions. Hats-off	Bigger class size	Great teacher. Best take away course of term 2.
Quantitative Methods	Prof. P K Vishwanathan	Lot of knowledge and practical insights of solving real world problems through statistics. Loved his funny style of teaching with lots of "Googlies"	Bigger class etc. Did not grasp very long and confusing sentences spoken to understand the concept by prof.	Fun to study. Would like to study the subject deeply.
Mandarin (Chinese)	Prof. Devakunjari	Great teacher. Should write a book - "Chinese made easy" from his written hand-outs. Lot of material collected to master Chinese anytime.	The course is slowly losing its charm because of study pressures of other subjects.	Teaching style is too motherly and caring. Highly lovable teacher.