LG Electronics India Pvt Ltd.

LG Electronics India Pvt. Ltd. is a wholly owned subsidiary of LG Electronics, which is headquartered
in South Korea. In January 1997, LG Electronics India Pvt. Ltd. was established. Greater Noida, Delhi,
and Pune are the locations of the company's manufacturing facilities.
LG Electronics employs around 72,000 people across the world. It has 77 subsidiaries all over the
world

Rural Market:
The rural market for electronic goods has a lot of untapped potential. Our specific focus on the rural
and semi-urban segments has enabled us to develop technologies that meet the needs of these
consumers, providing us a competitive advantage. We were able to access lower pricing points
targeted at the low-end customer in less than a year.
The entry-level CTV is now priced at Rs 5,650, down from Rs 9,000 before. Frost-free refrigerators
start at Rs 11,500, air conditioners at Rs 16,000, and microwave ovens at Rs 6,000.
Other initiatives include 65 Remote Area Offices under branch offices that are authorised to
immediately link to the central billing system for orders, 230 service centres, and 2,600 mobile
authorised service employees for communities with populations of less than 10,000 people.
Even items in the inverters & generator market have a lot of room for growth in rural areas.

Rural India – The LG Vision:

By using "Cutting Edge" initiatives, redefining the position of India's rural poor by expanding
the bounds of their activity (products and services).

Identification of the main issues:

 Threat of competition – Company started losing ground as other foreign brands like
Samsung and Sony have become more aggressive in the market.
 Low brand awareness in rural areas
 Price sensitive to rural consumers and seasonal demands.
 Transportation problems and Distribution problems: Transportation infrastructure is quite
poor in rural India. Nearly 80 percentages of villages in the country are not connected by
well-constructed roads. Marketing activities require transportation facilities. Due to poor
transportation facilities, farmers and marketers find it difficult to reach markets.
Analysis and evaluation of problems:

 One of the most issues is the intense competition in the market. LG looks to compete
with Samsung by providing lower priced products, however this is not always
possible due to competition. A company that has an effective marketing initiative is
also able to increase their sales. LG has not able to introduce new products over last 5
years which means that company needs to work on increasing their investment in
Research and Development if they want to stay competitive.
 Low brand awareness in rural areas- Most of the villagers are still illiterate and,
therefore, it is very difficult to convince them of the utility or usefulness of a product.
Advertisement through print media is of little use in rural areas.

 The demand for goods and services in rural India depends heavily on agriculture,
which accounts for more than 60’per cent of the rural income. Agriculture being
seasonal, demand for various goods and services is also seasonal, peaking at the end
of the two main harvests, vis. Kharif (October-November) and Rabi (March-April)
and falling to low levels during the remaining month of the year.
The peaks and the valleys in the demand-sender demand supply synchronisation by
marketer pose a difficult and uphill task.

 Supply of goods becomes difficult due to this. Retailers serving as distribution outlets
in the villages are unable to stock goods due to inadequate working capital and favor
those products on which they get higher margins. Moreover, retailing is only a side
business for many of them, who are moneylenders, beedi makers, bicycle mechanics
or farmers. Transportation is an important means in the process of movement of
products from urban production centers to remote villages. The Transportation
infrastructure is extremely poor in rural India. Due to this reason, most of the villages
are not accessible to the marketing men.

It is found that in this segment the important features considered by the customers while buying a
Electronics are mileage, price & maintenance.So manufacturer has to consider theseaspects to
attract and retain customers thus making an effort to build a good brand image.  Discount on
accessories and spare parts also act as influencing factors for purchase decision. So dealer can give
discounts on spare parts and accessories, after sales for a period of a year or two to stimulate the
customers.  Customers want service at their doorsteps but are unaware of the home delivery
facility provided by the dealers. So a measure has to be taken to create awareness in this direction.
 Most of the customers buy Electronics from bank loan rather than financial companies. So the
companies have to come up with attractive loan facilities to their customers.  Word of mouth is
effective media of communication. Hence the dealer should keep the existing customers happy by
providing good service and make customers talk good about their service provided.