LG's Product Line

Since its initial years in India, LG has focused on bringing out new models regularly in its product range. In its first year of operation in India, LG launched 70 models across a range of products. In 1997, it introduced its Golden Eye Technology TV, which had a light sensitive natural algorithm 'eye.' The 'eye' responded to the changes in lighting in the room, accordingly and adjusted color sharpness, brightness, contrast, tint and balanced them automatically. Thus, LG showed that it cared for customers' health through its products. LG's concern for health of customers was its unique selling proposition (USP) in the Indian consumer durables market. Similarly, LG positioned its refrigerators as the 'preserve nutrition system' refrigerators. In 1998, the company launched air conditioners as Health Air ACs...

Computers and Mobile Phones

In September 2002, LG announced that it would launched Linux based PCs named 'My-PC' for the home segment. Industry analysts expressed concern that LG was taking a huge risk by opting for the lesser known Linux operating system. They said that even though Linux was being promoted by bigger companies aggressively, it was relatively less known than Windows in the desktop market...

Distribution
In its initial years in India, LG realized that it was important to have a good distribution network to reach far-flung towns and the semi-urban markets. To increase brand awareness among consumers, LG sent vans across India covering a distance of 5000 km every month. The company focused on building a strong dealer network. In the late 1990s, when the trend was to give a credit period of 45 to 90 days to dealers, LG did not offer any such schemes to attract dealers. It instead asked them to pay in advance for its products. This ensured that the dealers pushed the brand in the market to keep their own cash from being blocked. At the retail and trade level, as the volumes grew faster, LG pushed its dealers towards selling products at lower margins and focusing on quick rotation of stocks...

Pricing Strategies

When LG started its operations in 1997, it sold products that were imported. Hence, its products were priced high and were equivalent to other foreign (Japanese) products. Industry analysts felt that this strategy was adopted to make local consumers feel that LG products were by no means inferior to Japanese products in performance or in quality. However, in 1998, LG launched 'Sampoorna,' its first low priced TV for rural consumers, and followed it with 'Cineplus.' According to Kim, as the Indian customers wanted the best products at reasonable prices, LG started introducing quality products in the economy range. In the first few years after its entry, LG did not get into price wars. Unlike other players, it did not offer any exchange schemes or discounts. LG officials said that they believed in an 'honest pricing policy' and its message to customers read 'No scheme, no gimmick, great products and honest prices.'...

Promotion
LG gave immense importance to its promotion and advertising activities. In 2004, the company spent nearly Rs. 1.3 billion (5% of its revenues) towards advertising. Analysts commented that LG's promotion and advertising of its durables segment were similar to that of an FMCG company. Unlike many Indian brands which advertised seasonally (2-3 months during the festival season i.e. September, October and November), LG advertised all round the year...

The Future
Analysts felt that there were other factors that had contributed to LG's success in India. The company imports only the basic technology from South Korea, while its own R&D facility in India, where LG has been investing Rs. 2 billion per annum, accounts for 90% of the innovations. The parent company gave its Indian subsidiary full independence of decision making. LG India had to consult its parent company only on major decisions like where to establish manufacturing plant. However, decisions regarding equipment required for the plant were taken by the Indian subsidiary itself...

Strengths
1. Presence of established distribution networks in both urban and rural areas 2. Presence of well-known brands 3. In recent years, organized sector has increased its share in the market vis a vis the unorganized sector.

Weaknesses
1. Demand is seasonal and is high during festive season 2. Demand is dependent on good monsoons 3. Poor government spending on infrastructure 4. Low purchasing power of consumers

Opportunities
1. In India, the penetration level of white goods is lower as compared to other developing countries. 2. Unexploited rural market 3. Rapid urbanization 4. Increase in income levels, i.e. increase in purchasing power of consumers 5. Easy availability of finance

Threats
1. Higher import duties on raw materials imposed in the Budget 2007-08 2. Cheap imports from Singapore, China and other Asian countrie

OVERVIEW OF INDIAN MARKET

Pre liberalization dominated by a few domestic players like Godrej, Allwyn, Kelvinator, and Voltas Post-liberalization many foreign companies have entered into India, dethroning the Indian players and dominating the market Consumer durables sector is one of the fastest growing industries in India

LG and Samsung, the two Korean companies have been maintaining the lead in the industry with LG being the leader in almost all the categories The rural market is growing faster than the urban markets but penetration level is very low CTV segment is expected to the largest contributing segment to the overall growth of the industry The rising income levels, double-income families and increasing consumer awareness are the main growth drivers of this industr

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Is there any upgraded version of the product available ?

What is the price of the product ?

Is there any free gift or discount available with the product ?

Is there an exchange offer ? Is it on a particular product ?

What about the product warranty ?

What are the after sales services of the product ?

Is there a home delivery service ?