Introduction:

Haniska International is a multinational company, located in Korea. LG is an agent of

Haniska International in Pakistan market. LG is an importer of home appliances in
Pakistan. It imports Refrigerators, Air Conditioners, Washing Machines & Microwave
Ovens from Korea and China. LG has got around 300 dealers all over the country.
Marketing objectives of L.G are: to provide world class product to upper and upper
middle class to enjoy real luxury in their life. Present Market Share of L.G product is:
Refrigerators 4%, Washing Machines 2%, Microwave Oven 3%, Chest Freezers nil, Air
Conditioners 25%.

LG Electronics Inc. headquartered in Yeouido-dong, Seoul, South Korea.

LG Electronics is part of the fourth-largest industrial network in South Korea and in 2014
global sales reached $55.91 billion, LG comprises four business units:
1. Home Entertainment.
2. Mobile Communications.
3. Home Appliances & Air Solutions, and
4. Vehicle Components.
With Starion India as its main production vendor for refrigeration and washing machines
in the Indian sub-continent. LG Electronics owns Zenith and controls 37.9 percent of LG
Display and since 2008, LG Electronics remains the world's second-largest
LCD television manufacturer. The company has 128 operations worldwide, employing
83,000 people.

Slogans:

 "We put people first" (1997–1999)

 "Digitally Yours" (1999–2004)
 "Life's Good" (2004–present)

Main Electronics players in Pakistan:

Before we discuss about LG’s working & strategies in Pakistan we have to know about
its main competitors.
Local Manufacturers of Refrigerators are: Dawlance, Waves, PEL and Singer. These
manufacturers roughly cater 80% need of the market.

Imported Manufacturers of Refrigerators are: LG, Super, General, Hair, Sam Sung,
Indesit, Semins,

Parties import product from their principal and market the same in Pakistan. In-fact
these all parties contribute only 20% of the market requirement. The above all are direct
competitors of LG. electronics.

LG Pakistan:

LG Electronics has taken Pakistani home appliances market more seriously and started
its production in Pakistan in 2016. The Korean consumer electronics company has
decided to establish a network of premium brand shops as well as building a
manufacturing facility in the country with the contribution of its local distributer, Momin
Group which also manages the Dubai region for former as its distributor.

LG which is not included in the list of top sellers of home appliances in Pakistan has
started focusing Pakistani consumer market which is growing steadily and offering a
vast potential to global brands.

Product strategy:

LG's objective is to provide world class product to upper class and upper middle class to
enjoy real luxury in their life. Since LG is a Korean brand and being imported from
Korea, it has very advanced features as compared to local brands in Pakistan, which
are normally demanded by in developed countries.

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. It provides its
refrigerators, five years compressor guarantee and one year free service in spare parts
under normal use.

After sale services in Pakistan:

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. Therefore, they have got relatively lesser number
of service centers as compared to Dawlance. At present LG has got only eight after
sales service centers in Pakistan. From these service centers LG provides after sales
service to each customers. They also maintain spare parts of serviceable items. Since
their products are 90% imported, the souring of spare parts is mostly import based.

Relatively LG refrigerator's parts are expensive comparative to locally made because

LG imports spare parts from Korea and various other LG production centers. 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, sales tax and other import cost.

Distribution strategy:

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. Simply based on historical
forecast and feedback of their dealer about the possible demand, they import from their
principal.

They ask their dealer to maintain sufficient stock at-least 4-6 week at their end. Rather
they believe in replenishment of dealer stock based on their sales. It means dealers
stock always remain in within a limit, doesn't exceed beyond 6 week level.

As mentioned above, they have only 300 dealers mostly in big cities and some in small
towns. They also have got a policy that retail price all over the country should be
uniformed for the customers, whether he/she buy from Karachi, Islamabad, or
Peshawar.

They also bear transportation cost and thus provide supplies at uniform rate to their
dealers. They have got three big warehouses in Karachi, Lahore and in Islamabad.
From these warehouses they feed their product to their dealers and thus they make
their product available to them.

Marketing strategy:

As far as Advertising strategy of LG is concerned, it is being planned and executed by

LG, Korea through their Pakistan Office keeping in view their global approach and
theme line. Local Agent of LG simply gives advice and coordinate in its implementation.
Since LG is a multi-national brand, their spending on advertising is in such a way that
their all product get promoted. Although for different product they have got different
agent; like for TV, New Electronics/Karachi. For computer monitor, Vision Computer.
For mobile phone, Chimera.
It was not possible to get the exact advertising budget of LG, 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. Due to being a multi-national company and as a part of their global Strategy
they, most of the time, divert their funds from strong market and spend more on weak or
under developed markets.

Further, as far as Sales Promotion strategy is concerned, it is being designed and

implemented by their respective agent of each product in Pakistan. For the promotion of
Home Appliances products: Hanaska International designs their own strategy. Their
major approach and emphasis on promotion through trade. They offer very handsome
incentives to their dealers, who in return push their product among the customer and
thus they get their desired volumes in Pakistan. 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.