Rural

Marketing
Chetan Kumar Bhartia
MBA (MARKETING)
MBA17G17
Company Background:

 LG Electronics Inc. is a South Korean multinational electronics company headquartered

in Seoul, South Korea, and is part of LG Corporation
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, Refrigerator,
Television ,Vacuum Cleaner ,Washing Machine ,Mobile Phones
Business Portfolio:
Market Analysis - Competitors
 RURAL MARKET - INDIA

 The Indian rural consumer lives in over 600,000 villages across the country, accounting
over 70% of the population of the country
For several product categories, rural markets account for well over 60 percent of the
national demand
 LG -VISION

 Rural population is about 70% of the total population

Total Turnover of Rs.4500 Crore & share 55%
Corporate houses perceived great opportunity
Urban- 4%, Rural - 11%
Long thought luxury - becomes a household sight
With 128 million households, the rural population is nearly three times the urban
 UNDERSTANDING THE RURAL
MARKET
 Increased branch member in the Rural Market
Posted around 100 area managers across the country in Rural areas
Delegating more power to Area Managers

LG , making dealings with the dealers with more transparent

Publicity by means of Road Shows, Society Demonstrations & Localized shows in Rural
India
RURAL MARKETING - 4A APPROACH

AVAILABILITY AFFORDABILITY

4A

ACCEPTABILITY AWARENESS
 RURAL MARKETING - 4A APPROACH

AVAILABILITY : PLACE
To tap these unexplored markets, LG has set up -
45 Area Offices
59 Rural/Remote area Offices
230 Service Centres
2,600 mobile authorized service personnel

AFFORDABILITY: PRICE
Cineplus - Rs 4900
Sampoorna - Rs 3000
 RURAL MARKETING - 4A APPROACH
ACCEPTABILITY: PRODUCT
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.
LG came out with Hindi & regional language menus on its TVs.
LG was the first brand to introduce gaming in TVs in
communications of its association with Cricket.

AWARENESS: PROMOTION
Supporting India Cricket Team- “LG ki Dua, all the best”
Direct Engagement with Customers
Mobile Vans(Garam Garam Khana) Exhibitions
Road Show
 REASONS FOR GROWTH

Increase in Income

Growth in Education

Enlarged Media Reach

Growing interaction with Urban Area

Marketer’s effort to reach Rural Areas

 LG’s RURAL FORAY

 LG India- tripled the number of its retail & distributor outlets in rural
areas
 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
 Implications of Rural Market Approach

Result Implication

 20% of the company’s  Company started losing

revenue comes from rural ground , as other foreign
India companies like Samsung
and Sony have bcome
 Largest Market Share in more aggresive
Colour Television
 LG ignored the growing-
 Positive Customer untapped-potential ‘VIP
Perception Buyers’
 FUTURE OF LG
 Invest $ 40 million in 2017 which is increased in 2019
 Expecting Rs 13000 crore turnover in 2019
 15% plus growth rate in rural marketing
 Deciding to double business by 2019
 Launching 5 new models in flat plane display
 Form new kitchen appliance business group
 Focus on low-end products
 Invets 400 crore on Marketing this year from 350 crore as
compared to 2018
 Launching 2 by 10 Blue Ocean Strategy
THANK YOU