SWITCHING ON IN

RURAL MARKET- LG
Ruchi
Kapil
Sahil
Pankaj
‘Mansi
Shivani
Dhiraj
Saumya
Ashish
 LG- Vision
Rural pop is about 73% of the total pop
Total turnover of Rs.4500 Crore & share of 55 %
corporate houses perceived great opportunity
Urban – 4%, Rural – 11%
long thought luxury -become a household sight
With 128 million households, the rural population is
nearly three times the urban(MNC)
 4 A’s of Rural Marketing
• Availability
To tap these unexplored country markets, LG has set up 45 area offices and 59
rural/remote area offices. 230 service centres.

• Affordability
Cineplus- Rs 4900
Sampoorna- Rs 3000

• Acceptability
LG Electronics in 1998 developed a customised TV “Sampoorna” for the rural
market. It was a runway hit selling 100,000 sets in the very first year.

• Awareness-
Mobile Vans(Garam Garam Khana)
Exhibitions , Road Shows
 Reasons for growth
inc in income
growth in education
enlarged media reach
growing interaction with urban area
marketers ‘s effort to reach rural areas
 Rural market becomes
Attractive to corporate
The growing oppurtunity, one main driver
Heat of competition in the urban market
 Surprising Facts
Bihar - Horlick
Punjab - Washing Machine
 LG Company Profile
LG is a South Korean MNC
World’s 3rd largest appliance maker
LG electronics India was established in January 1997
LG India deals in many products
 AC
 Flat Panel Display
 Microwave Oven
 Contd…
 Refrigerator
 Television
 Vacuum Cleaner
 Washing Machine
 Mobile Phones
4 A’s of Rural Marketing
LG’s RURAL FORAY
• LG India- tripled the number of its
retail & distributor outlets in rural
areas from 2004 to 2008.
• The avg. price of its Sampoorna
range of CTVs came down to about
the price so competitive that, thereby
bridging the gap between CTVs and
other local B/W TVs.
• It also tapped local forms of
entertainment like annual haats and
fairs and made huge investments in
infrastructure for distribution and
marketing.
 1000 In Store
Demonstrators at
Dealer counters in
Rural Cities

Mobile Van at
Kasargod

Cookery Classes at
different locations
for
Rural Housewives

Promotion of
Sampoorna TV’s
 Mobile phone market
penetration strategies

•LG-BSNL –Reliance tie up for rural

market.

•Handsets which are cheap and with

offers are provided to the rural customers.
Marketing Key Success Factors
• Customization

• Positioning

• Innovative marketing

• Product localization - Product

localization is a key
strategy used by LG. It
came out with Hindi and
regional language menus
on its TV.
• Regional distribution model
- This has resulted in
quicker rotation of stocks
and better penetration into
the B, C and D class
Distribution of villages in India
Population Number of Villages % of
Total
Less than 200 114267 18%
200-499 155123 24.30%
500-999 159400 25.00%
1000-1999 125758 19.70%
2000-4999 69135 10.80%
5000-9999 11618 1.80%
10000 and above 3064 0.50%
Total 638365 100%
 FACTS CONTINUE…..
LG’s turnover 2002 - 60%
Today – 40% (urban)
Turnover of 10,750 crore (2008)
13,000 crore (2009)
Sales contribution – 35% (2008)
Manufacturing capacity – 30% by 2009
By 2009-10, urban – 4%
rural – 11%
SUGGESTIONS
 Suggestions
Giving Hindi names to the products
How have they reduced cost without affecting the
quality
Videos
Focus the Melas and focus them
Play with their emotions with Ads
Introduction of finance schemes
To roll out several new models in low-end segments
Colour televisions and audio systems will have a big
market due to their low pricing policy.
Schemes like giving trial of products, and making
them aware of usage of products
The main challenge is electricity or power making
that kind of products in which there is less usage of
power
Launch more models in their “Sampoorna television
range”.
Rural market is less affected than urban market in
slowdown. Then makes distribution network more
strong.
 Future Projects of LG
Invest $ 40 million in 2009
Expecting Rs 13,000 crore turnover in 2009
15% plus growth rate in rural marketing
Decided to double business by 2010
Launching 5 new Models in Flat Panel Display
Form new kitchen appliance business group
Focus on low-end products
 Contd…
Invest Rs 400 crore on Marketing this year compared
to Rs 350 crore in 2008
Launching 2 by 10 Blue Ocean Strategy