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A Comparative Study.
The study is based on the comparison of marketing strategies applied in LG. and Dawlance. In this study, the main focus to see the effectiveness of the marketing strategies applied by both the companies — Dawlance and LG, for selling their products particularly Refrigerators. Just to understand the marketing strategies in general and refrigeration market in particular, one should know that what marketing strategies ought to be? Who are the main players in the market? What kind of other products do they produce? How do they promote and supply their products? What type of competition is going on in the market? And finally what are the marketing strategies being applied by both the companies? These are the questions to be addressed, but the main theme is the marketing strategies of Dawlance and LG Refrigerators. This paper is mainly divided in to four sections. The first section deals with the marketing strategies in general. The second section focuses on the main players of Refrigerators in the Pakistan market. The third section sheds light upon the marketing strategies of Dawlance and L.G. Though the marketing strategies of all the products may be the same. But mainly it has been focused on the refrigerator marketing strategies here. Finally, the paper is concluded in the last section. All the information that is presented in this paper has been acquired and extracted from various primary and secondary sources. In this study, best possible efforts have been made to collect the correct and uncovered information. For this, the information has been collected by both primary and secondary sources. Primary data is based on the interviews from the top officials of both the companies based on the semi-structured questionnaire. The secondary data is based on the published reports and Internet. 1. MARKETING STRATEGIES IN GENERAL Fluctuating customer requirements and competitive forces are putting more pressure on marketing and are demanding superior marketing strategy and tactical execution. The cycle time from product creation, to product launch, for a winning go-to-market strategy, leaves no margin for error. Marketing puts the customer at the center of the organization. The organizations, which do so, reap the profits. The idle marketing ought to be or the key steps to a successful strategy can be summarized as: 1.1 BE CLEAR ABOUT MISSION The common, customer-orientated thread running through all the activities of the organization and how we define the kind of market oriented organization we want to be. 1.2 MARKETING RESEARCH
behavior and their life styles? What can we offer them. • • • • • 1. and the point of excellence. Local Manufacturers of Refrigerators are: Dawlance. 2. 1. Waves.. preferences. .. the weak points.. These manufacturers roughly cater 80% need of the market. at a price. the fudges.4 Segment the Customers Consider groups who share a similar need and who will respond in a similar way.. that other companies do not? How do we perform in comparison to our competitors? How are we currently performing for our customers? Where are the gaps.3 Set Strategic Aims Market Penetration Market Development Product Development Entering new Market 1.5 Design a Marketing Strategy To achieve specific marketing objectives.g. Main Players of the Refrigerators in Pakistan Market Just to understand the refrigeration market.7 Monitor Progress MEASURE AGAINST STANDARDS AND CONTROL. based (e.In marketing strategy some one should do know about the marketing potential for his the product and should find out through research that: WHO ARE OUR CUSTOMERS? • • • • • • • • • • • • What do we really know about their needs.. the USPs (Unique Selling points)? How are we different? Why are we different? How can we better delight? How do we change? What do we change? How clever are we with our market intelligence? How well is our market research working? • • • • • • 1.. Budgets. 1. first of all we should know who the main players in the market are? Actually there are two types of marketers: those who manufacture refrigerators locally and those who import and market the same in Pakistan. Pel and Singer.6 Set Tactical Plans. Programs Assign individual responsibilities to achieve the objectives.) on the Marketing mix.
It is the Largest Company in Pakistan engaged in appliance business.1 PRODUCT STRATEGY The object of Dawlance is to provide refrigerator to all people who fall in lower middle. promotion). Chest Freezers nil. In-fact these all parties contribute only 20% of the market requirement. Super. first we will go through the profiles of the companies in brief. place/distribution. are durable enough and customer can keep on using them for quite many years without any problem. or value. Semins. which need in any such type of appliances. Washing Machines 35%. Marketing objectives of L. 3 years compressor guarantee and 1 year chest freezer. Dawlance believe that whatever they provide to their customers should be durable and reliable. LG is an importer of home appliances in Pakistan. Present Market Share of Dawlance product is: refrigerators 65%. LG has got around 300 dealers all over the country. Air Conditioners 25%. Washing Machines & Microwave Ovens from Korea and China. MARKETING STRATEGIES The marketing mix is the organization's overall offer.Imported Manufacturers of Refrigerators are: LG.1. Its refrigerator Factory is located in Hyderabad. Air Conditioners 15%. Microwave Oven 40%.1. Microwave Oven 3%.G. . 3. DAWLANCE: Dawlance United Refrigeration Industries Ltd. Indesit. 3. It imports Refrigerators. electronics. Air Conditioners. 'The basic marketing mix is often nick named "the 4Ps" (product. Haniska International is a multinational company. General. these are elements in the marketers armory — aspects that can be manipulated to keep ahead of the competition'. to the customer. Dawlance has got products. which Dawlance market. Parties import refrigerators from their principal and market the same in Pakistan. Dawlance stands for durable & reliable household appliances. Washing Machines 2%. The main Objectives are to provide dependable and reliable product at reasonable price to majority of Pakistanis and to enhance their quality of Life. Here I've explored the marketing strategies of Dawlance in terms of marketing mix have been explored. It provides its refrigerators. middle. located in Korea.G Refrigerator" Before discussing the marketing strategies of Dawlance and L. Present Market Share of L. 3. was established in 1980. Sam Sung. All the products.G. LG is an agent of Haniska International in Pakistan market. Hair.G are: to provide world class product to upper and upper middle class to enjoy real luxury in their life. Chest Freezers 45%. and free service in spare parts under normal use. and upper middle class in this country such that most of the families should have refrigerators in their home because they enhance better quality of life. which are as per international standards and carry all the basic features. "Marketing Strategies of Dawlance and L. L. The above all are direct competitors of Dawlance and LG.G product is: Refrigerators 4%. pricing.
Dawlance bear transportation charges and make the product available at cost price at dealer premises. Although for different product they have got different agent. Dawlance consider pricing as one of an important element of marketing mix. 3. Due to satellite transmission and having multi-channels. On promotion. They believe that print media and out door activity help them to reach to their target customer. Whereas the LG pricing strategy is cost + fixed mark up to cover their GP. Dawlance bear freight cost and make their product available to their dealers irrespective of where they are located. For mobile phone. five years compressor guarantee and one year free service in spare parts under normal use.75% of their turnover.2 PRICING STRATEGY Dawlance has got around 52 models in their refrigerator product line. In order to maintain a uniform price all over the country. 40% spending of their budget is Print Media. they have some selected range for upper class as well. Due to being a multinational company and as a part of their global Strategy they. Local Agent of LG simply gives advice and coordinate in its implementation. Further. Vision Computer. Since it pay them and there is direct relationship between sales and consumer. most of the time. it does not pay one unless you have very huge budget to spend on this media. Since LG is a multi-national brand. 20% goes on TV. it is being planned and executed by LG. It was not possible to get the exact advertising budget of LG.1. It believes that their retail prices should be uniform all over the country irrespective of whether customers buy from Peshawar or Karachi. As far as Advertising strategy of LG is concerned. However. It provides its refrigerators. their spending is more on consumer incentive schemes.Whereas. divert their funds from strong market and spend more on weak or under developed markets. it appears that they have position their product pricing in such a way that their main focus is middle and upper middle class.3 PROMOTION STRATEGY Dawlance promotion budget is around 1. Since LG is a Korean brand and being imported from Korea. which are normally demanded by in developed countries. 20% on Out door activity and balance 20% on Sales Promotion activity. but it appears from their spending and the figures collected from Pakistan Advertising Association and from some other sources that their spending is around 6/7 per cent of their sales in Pakistan territory. Dawlance has got a policy that their all product price should be the same in all cities and town in Pakistan market.1. LG's objective is to provide world class product to upper class and upper middle class to enjoy real luxury in their life. 3. Korea through their Pakistan Office keeping in view their global approach and theme line. they give uniform margin to their dealers irrespective of whether he is big or small. their spending on advertising is in such a way that their all product get promoted. Product-wise price list enclosed in appendix for reference. Since they cater to upper middle and upper class. From the price list and discussion had with their management. it gives customer a direct benefit in shape of price reduction. it has very advanced features. Product-wise price list enclosed in appendix for reference. For this. like for TV. LG also insures that whatever product they market should be durable enough which last quite many years and give trouble free service to their customers. . therefore their 90% dealers are in big cities only. New Electronics/Karachi. LG follows pricing policy in which their normal formula is import cost + reasonable gross profit to cover their marketing expenses and also give them reasonable profit. For computer monitor. Chimera.
Lahore and in Islamabad. They also have got a policy that retail price all over the country should be uniformed for the customers. In order to provide quick and timely delivery to their dealers: they have got big warehouses located in almost all big cities and towns. In case stock is not available in the warehouse then it is delivered directly from Hyderabad Factory. Whenever they get order from the dealer they try to provide supplies to their dealer from closest warehouse. They have got three big warehouses in Karachi. They have got 80% penetration in dealer sector.1. It has been noted that due to being import base product they are always high price vis-a-vis other brands in the market and it is one of the reason why they give so much emphasis on the motivation of dealers. who in return push their product among the customer and thus they get their desired volumes in Pakistan. Dawlance ensures that its refrigerators are available almost in all appliances markets of Pakistan. One can get very easily their product in any city or small town of Pakistan. Rather they believe in replenishment of dealer stock based on their sales.Further. It means dealers stock always remain in within a limit.5 PRODUCT LIFE CYCLE Dawlance is an ISO 9000 certified company and among its mission statement. they have only 300 dealers mostly in big cities and some in small towns. as far as Sales Promotion strategy is concerned. As it has already been stated in earlier that LG refrigerators are imported. Simply based on historical forecast and feedback of their dealer about the possible demand. Mostly they import from Korea and some of the models are imported from China as well. LG relatively don't maintain loose stock at their end. whether he/she buy from Karachi. However if supply is given from closest warehouse then hardly it takes 2-3 hours time. It is one of their missions to provide quality product to their customers. They are around 50% in total dealer and the rest are in best 25% of "C-class" dealers sell from 200 up to 399 units per year. Islamabad. timely delivery of their product to the dealer. The maximum delivery time incase stock is delivered from Hyderabad Factory is four (4) days. free from any defect is delivered to their customers. As mentioned above. They believe that. which is delivered from their factory. They also bear transportation cost and thus provide supplies at uniform rate to their dealers. 3. They offer very handsome incentives to their dealers. is one of an important element in their success in Pakistan. From these warehouses they feed their product to their dealers and thus they make their product available to them. 3. they import from their principal. or Peshawar. Around 25% of dealers are "A-class" dealers who sell over 1000 units and above per year. "B-class" dealers are those dealers who sell from 400 units up to 999 units per year. So that only perfect product. it is being designed and implemented by their respective agent of each product in Pakistan. Dawlance has got various types of dealers according to their potential. Therefore. Their major approach and emphasis on promotion through trade. For the promotion of Home Appliances products: Hanaska International designs their own strategy. doesn't exceed beyond 6 week level.4 DISTRIBUTION STRATEGY Dawlance has got around 800 dealers all over the country.1. They ask their dealer to maintain sufficient stock at-least 4-6 week at their end. they ensure that every product. must go through rigorous quality check. .
Dawlance has got the policy first of all to carryout repair. Since their product is 100% imported. CONCLUSION From the above information. they prepare job sheets and puts its record in computer and whenever at later date if complain is repeated. Relatively LG refrigerator's parts are expensive comparative to locally made because LG imports spare parts from Korea and various other LG production centers. 3. Therefore. there you'll find Dawlance workshop or either franchise workshop to take care of service need. These are service centers and franchise workshops cover almost 99% market of Pakistan. they have got 34 franchise workshops to cover remote areas. . There are several reasons behind it. they have got relatively lesser number of service centers as compared to Dawlance. In nutshell. it has been analyzed that there is no comparison between Dawlance and LG. the souring of spare parts is only import based. they can dig out from their computer record. if required at customer place.Since LG is an international name in home appliances. sales tax and other import cost. when it is delivered to the customer. Besides. Dawlance has got qualified foreign-trained engineers in its team of after sale service and also properly trained technicians and supervisors who look after service centers and provide reliable quality after sales service to its customers. From these service centers LG provides after sales service to each customers. Dawlance has got 17 its own service centers in different parts of country. Whenever they get any complain. As it has been mentioned earlier that LG has got market of refrigerators only in big cities and some of its big towns in Pakistan. Incase if refrigerator problem is not diagnosed at customer premises then it is taken to its workshop. Wherever Dawlance dealer is.1. where its service center doesn't exist. They also maintain spare parts of serviceable items. we can say that Dalliance's after sales service workshops are very well properly organized and they work according to international service standard. even these are available with franchise workshops. Dawlance ensures that in all of its service centers sufficient inventory of spare parts is maintained. Even after five years if you want to find out from Dawlance service center that how many times there refrigerators have been referred on account of technical problem to their center. therefore LG ensures that their product must meet their rigorous quality standard. We can say that LG also believe in quality. after sale service to its customers and also considers after sales service as one of the important element of marketing mix. So. As far as service charges are concerned Dawlance consider that it is not a profit center rather it's a support center for sales. In order to provide satisfactory after-sales service. One of the reasons for being these parts expensive is that LG's local agent has to pay almost 70% of the product cost towards import duty. For example: Dawlance is a big local manufacturer of refrigeration industry in Pakistan. It has got all engineering capabilities and very good finance and of course technical know-how to produce internationally accepted quality refrigerators locally. it must meet customer's expectations. At present LG has got only eight after sales service centers in Pakistan. in that case they also have a history with them of such product in their data bank.6 AFTER SALES SERVICES Dawlance believes that after sales service is one of the most important elements of marketing mix and thus give due emphasize in providing quality after sale service to its refrigerator customers.
On the other hand L. Dawlance is dominant in the Pakistan market because not of its marketing strategies but least competition by L. Hence people prefer to buy their products. US $ cost of import is going up and thus LG refrigerator is becoming costlier day by day. Present market share of Dawlance refrigerators is 65% while L. either local or from importers. Therefore. . lower prices. In the contrary L. All Dawlance products are made for middle. they have a big challenge before them to maintain their market share and also to maintain their reasonable growth against local manufacturers.G's present market share for refrigerators is 4%.G refrigerator is an import-based activity. due to its dominance in the market. etc.G is concerned. they don't feel any threat from any of their competitors. In the light of above evidences.G. it is not only the marketing strategies of any company which plays a dominant role but it the success of product lies in the marketing strategies as well as the policies of the Government i. It means. As far as the case of L.e favorable or unfavorable.G is a multinational company and has got different agents in some of the big cities of Pakistan. L. It is simply an importer and imports refrigerator from Korea and markets the same in Pakistan. Every year due to weakness of Pak Rupee. and availability of spare parts and after sale service. upper-middle and upper class. While LG products are made for upper-middle and upper class. it could be said that Dawlance is a leading company as compared to LG.G being a foreign company suffers because of government policies by paying heavy import taxes. Since Dawlance has very strong industrial base as well as deep-rooted marketing network in Pakistan. it is suggested that instead of depending on import it should install its plant in Pakistan so that it may lessen its burden on taxes.
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