Champaign Launching Marketing Plan

Table of Contents

1. Market Analysis
- Demand by Brand
- Channel by Brand
2. Go to market Strategy
- STP Analysis
- Product Strategy
- Price Strategy
- Channel Strategy
- Communication Strategy
* Appendix
- MCP Concept
- Product Comparison

29. JUN, 2007

Media Europe Gr.
Digital Media Company

LG Electronics Inc.
1. Market Analysis (HTS/ Worldwide) Global MS Brand

Global demand has been slightly declined. Marketshare of Chinese products is on the
downside and major top 5 manufacturers’ marketshare shows an upward tendency.

Market Share by Region Market Share by Brand

(Value, M$) (Value, M$)
CAGR CAGR
$4,400M
4,313$4,208M4,400$4,208M4,208 4,208 ▲ 1% $4,400M 4,313$4,208M4,400$4,208M4,208 4,208 ▲ 1%

40% 39%
37% 30% 30% ▲ 16%
Europe 39% Europe 42% Europe
50% ▲ 13% Others

20% 20% 2%
18%
Sony 18%
35% 37%
America 37% America 8% 11%
America 11% ▲ 6%
31% 13%
Panasonic12%
12% 15% 15% 21%
Bose 10%
12% 10%
CIS 10% CIS 15% 8% 8%
CIS 8% ▲ 3%
8% Philips 8%
7% ME & AF 8%
8% ME & AF 16% 7% 9%
ME & AF 9% 29%
6% LG 5%
6% 6% Asia
6% 6% Asia 1% Samsung 4% 6% Asia
7% 7% 27%
MS(%)
’05 ’04 ’06 ’05 ’07(exp.) ’06 ’07(exp.) ’05 ’04 ’06 ’05 ’07(exp.) ’06 ’07(exp.) ’06 Sales

* Source: GFK

Great Company Great People 2/19

1. Market Analysis (HTS/ Europe) MS by Brand

Although the market demand is slightly on the downside, marketshare of LGE, SS,
Bose has been continuously increased.

Market Demand Value Market Share by Brand

(M€, M unit) Volume (Value, M€)
CAGR
$4,400M 1,736
$4,208M $4,208M $4,400M $4,208M
1,736 $4,208M ▲ 1%
CAGR
1,433 1,433
1,313 1,313 1,313 1,313
Europe ▲ 13% Others
45% Europe
▲ 14% 39% ▲ 29%
30% 30%

Sony 16% 14% 14% ▲ 20%

America 15% America
5.2
4.4 3.9 Bose 21% 21% 27%
3.9 10% 16%
Philips 12% 11% 11% 11% ▲ 16%
CIS CIS ▲ 22%
Panasonic 10% 8% 8%
ME & AF 9% ME9%& AF
LG 6% 9% 23%
Asia Samsung 4% Asia 43%
3% 4% 7% 7%
MS(%)
’05 ’04 ’06 ’05 ’07(exp.) ’06 ’07(exp.) ’05 ’06
’04 ’07
’05(exp.) ’06 ’07(exp.) ’06 Sales
* Source: GFK

Great Company Great People 3/19

1. Market Analysis Brand Market Share by Price Seg

Competition in ‘Trendy’ Zone is comparatively less intense, and Sony is dominating this
zone.
Retail
Zone (EUR) 2006

(26%) 100%
Pride and Rich 999
(21%)
48% 12% 11% 14%
499

Trendy (8%) 8% 6% 19% 10%

399

(11%) 13% 21% 28% 16%

299
Practical Seeker
(17%) ★29% ★24% ★27% ★26%
199
Basic Satisfier
(18%) 2% 37% 15% 34%
Market
M/S (22%) (14%) (11%) (8%) (9%)
* Retail Zone & M/S : 2006 (GFK)
 : Highest portion ★:2 nd
Highest portion

Great Company Great People 4/19

1. Market Analysis Channel Status (Europe)

‘Trendy’ and ‘Practical Seeker’ customers usually purchase thru. Independent, Buying
Group, Chain store. Sony and Bose show their strength in these channels.

Volume/ % 333 Euro 1,716

411
Average Price 51% 320
4% 242
12% 309
10%
198 Euro
451Euro 14%
* Source: GFK
10% 586 Euro 25%
13%
7%
51% 9%
249 Euro
14% 11%
17% 1%
7%

Value/ % 50%
17%
14%
9%
18% 11%
9%
16% 15%
31%
14% 37%
40%
7% 15%
3%
1%
BU Y .G R P C H A I NS In de p MA S S M Others

Great Company Great People 5/19

2. Go to market Strategy Segmentation

‘Trendy’ customers are sensitive on product design and other sensation related features.
Demand from ‘Trendy’ customers is expected to grow in the future.

Segmentation Map Characteristic

High Pride • Want to keep dignity
Rich • Do not like ordinary product
Pride Rich
15% 18% Seek Quality

20% • Follow the latest fashions

Trendy
Trendy
22% • Trade up of consumption
Seek Fashion
Willing 37%
To 36% • Enjoy shopping but moderately
Pay Practical
Seeker constrained on budget
28% Practical
Seeker • Consider Value for money
24% Seek Value

Basic
Satisfier Basic • Highly price-sensitive
Satisfier • Require only basic function
Low
Seek Price
Convenient Buying Integrated
Attitude

Source: ’05 RI Research, ’07 PMS : Estimation to Y2010

Great Company Great People 6/19

2. Go to market strategy Targeting

‘Trendy’ customers have comparatively high acceptance behavior for New-Concept product.

Seg. Seg. Value LG Biz Target

Segment Implication
Size Potential Attitude Relevance

• LG : Sony : Bose = 5% : 21% : 29%

Pride
- High Brand Loyalty
Rich
- Important Segment for premium image
Grow (15%  18%)

• LG : Sony : Bose = 11% : 14% : 5%

Trendy • First to market is important
• Meaningful segment for new converged

Grow (20%  22%) product’s accommodation
• LG : Sony : Bose = 13% : 19% : 1%
Practical
Seeker
- Positive buying behavior for brand image
- Market size is big, however, competition is

Reduce (37%  36%) high for non-specific product

• LG : Sony : Bose = 15% : 1% : 0%

Basic - Price oriented, Low market investment
Satisfier - Marketing activities are less effective
Reduce (28%  24%) than other segment

Great Company Great People 7/19

2. Go to market strategy Targeting

‘Trendy’ customers attach importance to sensational design and New-in-Market features.

Segment Demographic KBF USP

Pride • Ages of 40 over (80%) • High Performance • High Fidelity Sound

• High income • Brand • Designed by premium material
Rich
Seek Quality

• Ages of 20 to 35 (80%) • Emotional Design • Stylish & Unique Design

Trendy • Unmarried Female (70%) • Latest Function • Mobile devices compatibility

Seek Fashion

Practical • Ages of 20 to 30 (75%) • Valuable Function • Connectivity to other Devices

Seeker • Unmarried Male (65%) • Usability • New media playability
• Easy Operation
Seek Value

Basic • Ages of 30 to 45 (70%) • Affordable Price • Durability

Satisfier • Married Female (75%) • Basic Function • Ordinary Design
Seek Price

Great Company Great People 8/19

2. Go to market strategy Positioning

New HTS with Champaign design will be positioned as leading product in trendy zone

Target Trendy Trendy & Practical seeker

Seg.

Positioning Qualified Stylish HTS with DTV matching design

Product  5.1ch with 4 Tall & 2+2 ch Models  2.1 ch with 2 Tall spk

Price  Compete with top tier brand  Compete with top tier brand

 B.G, Indep.
Place  Specialty channel
 Selective penetration in
Specialty channel

 Focus on PR activity  Focus on PR activity (Magazine Review)

Promotion  Shop Display Enhancement with TV  Kiosk, Endcap, TV package
 Experience Marketing
 Joint Promotion (Fashion, Furniture)

Great Company Great People 9/19

2. Go to market strategy Product Strategy

Main USP such as elegant design and HD features materializing 1080p will strongly attract
customers.
New Style & Easy Use
“Stylish Fashion” “Quality Picture & Sound”

Emotional Design 1080P Picture Quality

 Trend leading Design Real surround

 Value Creation Design
-Total 700W
 Emotional Interface
-XTS Pro Digital Amplifier
-HD AV Sync.
Easy & Friendly Design -V.S.M (Virtual 5.1Ch Sound)
-HDMI 1080p Up-Conversion
 Easy to Use / Simple / Distinctive -SIMPLINK (HDMI-CEC)
Design
 Maximize Convenience by Co-work -Progressive Scan
between GUI and UI -Maximum Playback Compatibility
-DivX / DVD±RW/R /WMA/MP3/JPEG
Fine Finishing Design -USB Plus

 Hi-Quality Design by Environment-

-Portable Audio In (3.5Φ Stereo In)
Friendly and highly efficient in
productivity material

Great Company Great People 10/19

2. Go to market strategy Price Strategy

Sony’s line-up concentrates in 399~699 Euro zone by targeting ‘Trendy’ and

‘Practical Seeker’ customers. Therefore, Sony will be the main competitor of LGE’s new
Champagne HTS.

€1399 €1299
3.2.1 SERIES II HT-TXQ120
€999 (1000W)
€999 3.2.1

€699 €699 DAV-DZ840

(1280W/ 5.1ch)
DAVX1G €599 HT762TZ
€599 (320W/ 2.1ch) (700W)

€449 €499 HT762PZ

€499 DAV-DZ630 (700W)
(850W)

€399 €399
DAV-DZ530 €399 €399 €399 HT462DZ
(850W) HT-X200 SCPT850
(100W) (400W)
(300W)
€299
SCPT550
(100W) Black : 4 Tall
Blue : 2 + 2
Red : 2.1 Ch

Great Company Great People 11/19

2. Go to market strategy Price Strategy
By unification of Initial Setting, the Line-up will take place in same time. Also, Product variation will be
expanded into 3 grade in order to fulfill the customer’s preference. ( 4 Tall 599, 2+2 499),
In the process of reviewing the line up for 2.1CH 2 tall 399Euro
→Flexibly respond to competitors’ price trend. Pricing Scenario

Models 07’ 4Q 1Q 2Q 3Q

SONY 699 Euro

(DAV-DZ840
1280W) 649 Euro
4TALL
599 Euro
LG
(HT762TZ) 549 Euro
499 Euro

SONY 549 Euro

(DAV-DZ630)
850W 499 Euro
2.2 CH
LG 449 Euro
(HT762PZ)

Great Company Great People 12/19

2. Go to market strategy Channel Strategy

Concentrating on penetration into Buying Group and Independent channel.

Strategic Task Execution Plan

B. G, Indep. • POP and Display Rack support for In-store PR intensification

Channel Penetration
• Offering yearly target incentive to top 20% dealers
Improvement
• Package Model with DTV
• Education for F/Salesman by Merchandiser program in each country

• Penetration Intensification thru offering exclusive model by grade

Chain Channel Regular Listing
Expansion for selective channel
• Co-promotion with channels for Sell-out growth

ex) DSGi, Fnac, KESA, El Corte Ingles

• Package Model with DTV

Strategic Partnership with another field companies such as

New B2B Biz
Home Deco, IKEA

Great Company Great People 13/19

2. Go to market strategy Communication Strategy

Stylish Design, High-Definition Picture, High quality Sound oriented product

Goal
communication strategy execution

Objectives Strategy
 Pre-Launch :
Targeting Customer interest and market  Pre-Launch :
reaction
Teaser AD and Customer participation PR
 Launch : Activity thru On and Off-line
Concentration on product display and product  Launch :
Awareness. Various PR activity under the Motto of “Taste
the style & See the sound”
 Post-Launch :
 Post-Launch:

Strengthening the Brand status thru Mass Improvement of Product awareness by

Marketing by newspaper and magazine product exposure on Off-line.

Great Company Great People 14/19

2. Go to market strategy Communication 전략

Stage Key Word Program Execution Guide Sept Oct Nov

1 2 3 4 1 2 3 4 1 2 3 4
Teaser
Release •Teaser AD on major press

• Press kit development

Encouragement IFA
of Customer - Product information, Feature & USPs
Pre curiosity and Exhibition
interest
• Co-work with the person which is very influential to Media
PR
and general public to promote the product

• Introduction of product and marketing strategy to Mass

PR Material Media and LG VIP
- Key Message, PR Guideline & FAQs, Designer Interview
Intensification of
Launch Product • “talk-of-the-town” event support (For Mass Media, Brand
Awareness
PR personnel, and Major Channel VIP)
Event •Appealing to customers’ sensation by Champagne Glass
shape design of HT762 ;.
- Launching Ceremony, Sponsorship, Roadshow etc.
Experience
Marketing • Experience program for potential customer

Site
Monitoring • Monitoring PR Activity and After-Use note on Website
Mass Target
Post Positioning
In-store • POP and Banner coordination which reminds the
Comm. Champagne Glass Design
Material
Great Company Great People 15/19
2. Go to market strategy Communication Strategy

Category Contents Execution

 Comm. Material  Planning : IMC Gr
: POP/ Leaflet/ Shop Display / X-banner etc.  Producing : IMC Gr
In-store  Distribution : IMC Gr
Communication  Application : Local
 Sales Man : Training Material  Media Europe Gr

 Magazine Ad  Creative Planning : IMC Gr

Media On-Line : UCC(ex. Youtube, Google Video)  Media Mix : Local

ATL
 Press Kit : IMC Gr
PR  Press Release, Press Kit, FAQ : Issue Making(Co-Marketing)  Press Release : Local

 IFA 2007
Exhibition  CES 2008 IMC Gr
 Furniture Fair (Co-Marketing)

 Launching Ceremony
Event - Dealer, Press
Local
BTL

 Theater Experience Zone  Fashion Brand Co-Marketing

 Shopping Mall Road Show  Home Deco Brand Co-Marketing
Customer Local
 Record Shop Co-Promotion : Experience Zone
 Rental DVD Package Leaflet

Great Company Great People 16/19

2. Go to market strategy Communication Strategy

June July August September October

Category
MP 8/30 Sell-in
10/ 10
Start
• Launching Plan Establishment • Launching Strategy Set-up • Workshop for Launching
- Concept,Line-Up,AD/PR,Product Training, and Report Strategy
Total POP,Cat’g,Competition,Channel,Price,SVC, - Launch schedule: Beginning of Aug. (3rd week of Sept.)
Sales Promotion, etc.

Production by Sales
PRINT Source completed Shipping Product AD
Subsidiary

A
T
Launching Event, Press
L PR Source completed Teaser Release (Conference, Interview)

Launching Local Dealer

Event Convention

B In-store POP, Sales Kit

Source completed Production Training
T Display
L
 Beginning of August : Launching Strategy Set-up
Meeting
 Beginning of September: Workshop for Launching Strategy

Great Company Great People 17/19

2. Go to market strategy Communication Strategy

Schedule July August September

8/20 Mass
Production
Action Item

Sample Working Samples 7/25 ~7/30

 40 SMPL Arrange (W/Wide)

 Catalogue
POP  Advertisement
Developing 8/30 Dispatch 9/10
Creative  Topper (MP)
 Sticker (MP)

POP Locally produced (4~5 wks ) 9/30

Production

Target as planned
P/R  Presentation Material
Developing 8/15 Dispatch 8/30  Press Release Material
Material
 Designer’s Note

Complete
Shop Display
Display 10/10
(w/TV Matching)

Great Company Great People 18/19

2. Go to market strategy Communication Strategy

Trendy

Stylish..
1080P Picture…Ultimate Sound

Taste style...
Feel the Sound

Great Company Great People 19/19

2. Go to market strategy Communication Strategy

Main concept

Dive into Champagne…

Emphasizing the sleek and stylish design by adopting
Champagne-glass concept, Teaser and Brand PR will be shown
as AD concept to public by design-motivation based on
symbolizing seduction for Champagne style with fascinating
graphic. Exposure on premium brand of the product will be
followed after “Seduction on Style” concept AD.

Great Company Great People 20/19

* Appendix. MCP Concept X-Banner ( 大 )

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* Appendix. MCP Concept Poster – Teaser 1

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* Appendix. MCP Concept Poster – Teaser 2

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* Appendix. MCP Concept Poster 1

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* Appendix. MCP Concept Poster 2

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* Appendix. MCP Concept Poster 3

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* Appendix. MCP Concept Magaine AD –Teaser 1

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* Appendix. MCP Concept Magaine AD – Launching 1

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* Appendix. MCP Concept X-Banner ( 小 )

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* Appendix. MCP Concept Home Theater 조성 A

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* Appendix. MCP Concept Topper – 스피커용

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* Appendix. MCP Concept Wobbler 1

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* Appendix. MCP Concept Sticker

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* Appendix. MCP Concept Mat

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* Appendix. MCP Concept USP Stand

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* Appendix. MCP Concept Leaflet - 내지

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* Appendix. MCP Concept Leaflet - 표지

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* Appendix. Product Comparison with Competitors 4 TALL

Brand LG SONY SS PANASONIC

Model HT762TZ (’07 Nov) DAVDZ840 HTTXQ120 SCPT850

Output (Watt) 700W 1280W 1000W 1000W

Picture

DVD-RAM/±RW/
DivX / DVD±RW/R DVD±RW/R/DivX DVD/±RW/R/DivX/ R/DivX
Playability
/WMA/MP3/JPEG /WMA/MP3/JPEG WMA/MP3/DVD-Audio WMA/MP3/DVD-
Audio
DCAC (Digital Cinema
Auto Calibration) Viera Link
V.S.M Anynet+ (=SIMPLINK)
Convenience A/V Sync. (=SIMPLINK)
HD A/V Sync. Auto Speaker Set-Up
Height Adjustable Auto Speaker Set-up
SPK
HDMI Out (1080p)
HDMI Out (1080i) HDMI Out (1080p)
USB Plus
Optical In HDMI In/Out (1080p) USB Plus
Interface Optical In
Digital Media Port USB Plus Music Port
Portable Audio In
(3.5mm Audio In) (3.5mm Audio In)
(3.5mm Audio In)

Price (¢) 599 699 1299 399

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* Appendix. Product Comparison with Competitors 2Tall + 2 Satellite

Brand LG SONY PANASONIC

Model HT762PZ (’07 Nov) DAVDZ630 (’07 Jun) SCPT550 (’07 Apr)

Output (Watt) 700W 850W 1000W

Picture

DivX / DVD±RW/R DivX /DVD±RW/R DVD-RAM/±RW/R

Playability
/WMA/MP3/JPEG /WMA/MP3/JPEG /WMA/MP3/DVD-Audio

DCAC (Digital Cinema

Auto Calibration) Viera Link
V.S.M
Convenience A/V Sync. (=SIMPLINK)
HD A/V Sync.
Height Adjustable Auto Speaker Set-up
SPK

HDMI Out (1080p)

HDMI Out (1080i)
USB Plus
Optical In Music Port
Interface Optical In
Digital Media Port (3.5mm Audio In)
Portable Audio In
(3.5mm Audio In)
(3.5mm Audio In)

Price (¢) 499 449 299

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* Appendix. Product Comparison with Competitors 2.1 ch

Brand LG BOSE SS PHILIPS SONY

Model HT462DZ (’07 Nov) 3.2.1 HTX200 (’07 Jun) HTS6600 (’07 Jun) DAVX1G (’06 Nov)

Output
400W TBD 300W TBD 320W
(Watt)

Picture

DivX / DivX / DivX / DVD±RW/R DivX / DVD±RW/R DivX / DVD±RW/R

Playability DVD±RW/R DVD±RW/R
/WMA/MP3/JPEG /WMA/MP3/JPEG /WMA/MP3/JPEG /WMA/MP3/JPEG /WMA/MP3/JPEG

Anynet+
Ambisound S-Force Pro Front
Convenienc V.S.M Acoustimass (SIMPLINK)
Smart Surround Surround
e HD A/V Sync. Truespace Wireless Ready
DoubleBASS A/V Sync.
(Card Slot Type)

HDMI Out (1080p) HDMI Out (1080i)

3 Coaxial in
USB Plus HDMI Out (1080i) USB Plus
1 Optical in Optical In
Interface Optical In USB Plus iPOD (w/Cradle)
Composite DV In
Portable Audio In MP3 Line-In
S-Video
(3.5mm Audio In) (3.5mm Audio In)

Price (¢) 399 999 449 549 ~ 599 699

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