LG Presentation | Sony | Brand

LG’s marketing strategies in India

Prepared by class 1 group 4: 1. 2. 3. 4. 5. Muhammad Sharif Aditya Inamdar Sahib Aliyev Artur Tkhya Assel Zhaxybayeva

“A company which is being driven by its sales targets rather than its market share”

“We have seen many Japanese and Chinese companies in India, but like other foreign owned businesses they typically put one foot in the water to see if it is warm or cold. They have doubts. They lack determination. What’s been different about us is that we made a full commitment – a very big investment – from the start, including setting up tow full scale manufacturing facilities” Managing Director, LG Electronics India

Introduction Differentiation Strategy. Superior Technology  The Rapid Growth . Customization.

3 Bn I R&D Major export to European countries .Introduction Overview of Expansion 1997 1998 2001 2004 2005 2010 2010 Entry in India First Plant in Uttar Pradesh Became fastest growing electronics. home appliances and computer peripherals 50m customers and more than Rs 60 b turn over GSM Mobile phone plant in Pune Planned to invest Rs 1.

Introduction LG products Golden Eye TV Health Air AC Sampoorna TV 1997 1998 1998 Chaoc Punch Washing Machine DIOS Refrigerators Linux Based PC late 1990 feb 2002 sep 2002 LG Mobile Phones Ballad – Flat TV late 2002 mid 2004 .

Network • Geographical layout of India • Distribution plans for each region • Remote Area Offices – Regional Sales Offices • Warehouses all over India – Quick move of goods • Non traditional distribution network • Website for the dealers – Connection with head office .Introduction Distribution .

Introduction Study parameters  A critical evaluation of the performance from marketing perspective  Identification of the marketing challenges facing the firm  Identification and evaluation of possible solutions  The Selection of the best solution  An out line of the way in which you would implement the solution .

Introduction Agenda  Introduction  Market assessment and PESTEL analysis  Competitor analysis  Pricing and promotion strategies analysis  SWOT and TOWS analysis  Recommendations .

Market assessment .

3 billion into R&D by 2010 to meet growing demand • Refrigerators .E. Asia • DVD writers : expected growth 33 mil units (2008) • To be made major export hub for European market • Mobile phones : planned investment of Rs. 1.Market assessment • Initially imported products from S. Televisions & Air-conditioners: positioning as “health” concerned brand (1997) .

Market assessment • Launched 45 new products (2001) • 60 new products launched (2002) • Launched Ballad-Flat TV for southwest India (2004) • My-PC – Linux based PC (2002) • Launch of CDMA phones (2002) .

Market assessment • Placed importance on good distribution network • No credit period given to dealers ( market trend was 45-90 days ) • LG dealers focused on volumes rather than margins • Aggressive promotional techniques • Higher profitability • Loyalty • Faster inventory rotation • Online platform to order products • Reduced inventory & procurement cycles • Exclusive PC outlets (2003) .

RSOs • Helped and nurtured newly opened outlets • Rural penetration increased market share .Market assessment • Developed regional strategies – CAOs. RAOs.

Market assessment • Honest Pricing Policy • Later adopted to aggressive pricing • Promotion was all year round • Repositioning as family brand • Cricket campaigns .

green technology used in manufacturing plants • Legal – patents. demographic • Technological – innovative products and alternatives. • Social – lifestyles and customer attitudes. inflation cycles. per capita income. copyrights . regulatory processes • Economic – economic growth. trade policies. maturity of technology • Environmental – recycled material usage in end products. market employment.PESTEL analysis • Political – Taxation system. licenses.

Competitor analysis .

Samsung posed the potential threat for LG India being fast emerging as the leading technology company in Asia. • Head quarter of Samsung India located in New Delhi.Competitor analysis Samsung India • LG’s key competitor in India is Samsung Electronics. • The company’s sales turnover exceeded US 1 billion by the end of March 2005. • Samsung outperforms LG globally and in South Korea. .

and compressors. glass. shells. . • In June 2005. Videocon acquired Electrolux and colour picture tube manufacturing business of Thomson.Competitor analysis Videocon International • Videocon International produced refrigerators. kitchen appliances. coolers.

DVD players.Competitor analysis SONY India • The company was set up by Sony Corporation Japan • Sony India competes with wide range of products: color televisions. walkmans. digital cameras. • The company sales turnover for the 2004-05 amounted to Rs. 8 billion . video recorders and mobile phone. music systems.

2 million color televisions per annum. DVDs.Competitor analysis MIRC Electronics • The local company produced quality color televisions with capacity of 1. plasma televisions and home theatre sets. . airconditioners. • MIRC Electronics also produced washing machines.

HCL Infosystems The company seized the 14.17 % of the PC market share.Competitor analysis NOKIA The company competed with LG India in GSM segment. Nokia dominated in the market with its 65 % in 2004. .

Competitor analysis Market share (2004) 60 50 40 LG Samsung Whirpool 30 20 Others 10 0 Rifregerators Color TVs Microwave Ovens Washing machines .

Promotion strategy .

Promotion strategy • When the company entered India in 1997. Panasonic. Samsung. BPL and Onida. LG as a brand was unknown in India. • By 1997 the Indian market had all the global consumer electronics companies such as Sony. Philips as well as local brands such as Videocon. .

5m. with a estimated turnover of US$1. in 2004. whereas in 1997 was only US$27.Promotion strategy • One of the key factors of promotion LG as a brand was a partnership with advertising agencies that knew the market well • This partnership ultimately led to the building of India’s top consumer durable brand.43bn. • Lowe was lead agency which was responsible overall corporate branding and premium products .

Promotion strategy • Focused to reach every consumer in India • Project LG as a true MNC and not as a Korean brand • Health positioning • Build the brand by associating with sporting event such as cricket and golf .

Pricing strategy .

.Pricing strategy • • In 1997. LG manufactures PC monitors and refrigerators in India at its manufacturing facility at Noida The first manufacturing plant was established in 1998 in Noida • • In 1998. To overcome high import duties.entering into India market. Selling imported products at high prices.launching first low priced TV for rural consumers.

Pricing strategy • In 2000. LG decreased prices by 5-15% relative to competitors.25 65.15 22.adopting new low price strategy.03 10.56 4.00 33. 2004 2003 45.85 1.16 19.00 2002 2001 2000 1999 1998 1997 .

SWOT and TOWS analysis .

Sampoorna TV for rural customers with menu in Hindi) 5. High brand recall as a result of huge promotion and advertising spending . “More for less” pricing strategy 8.SWOT analysis STRENGTHS 1. 105 new models launched in 2001-2010) 6.g. Differentiation strategy combined with customization (e.g. Focus on health of customers as USP 4. Huge manufacturing capacities 2. Consistent updating of the product lines (e. High dealers loyalty and retention 7. Market leader thanks to innovative and customer friendly products at competitive pricing and vast non-traditional distribution network 3.

Late entrance on the market of GSM mobile phones 4.SWOT analysis WEAKNESSES 1. Image of manufacturer of home appliances and consumer electronics and not IT products or mobile phones 2. Not very good image on the PCs market associated with failure of launch of PCs based on Linux operating system 3. Huge capex and current expenses (to support distribution and promotion) while low margins .

PCs and mobile phone markets 3. Growing demand as a result of increase of disposable income and growth of population Further penetration the home appliances market to gain and sustain position of a dominant player Entering high premium segment which will grow in line with Indian economy growth Increase market share on the PCs and mobile phones markets THREATS 1. 4. Fierce competition 2. 2. 3. Threat from Samsung especially on the TVs. Decrease of profitability .SWOT analysis OPPORTUNITIES 1.

e g sp oti TV sin ket om i rt ic pr  dve Cr OS a P    Customer solution for electronics and home appliances products only  Costs  Convenience gy te ra st g ) in rs ic le pr dea ” ss or le (f or ins e f rg o r ma “M ow L   wn St s.C on ve ni en t ly av ai la b le Marketing mix: 4C Vs 4P  co ns Fu an um ll r d er an h o h ge  me ealt of ap h t h M pli frie e in  ob an nd no ile ce ly va PC ph s pr elec tive s one odu tro an s ct nic d s ia ed m t in pr d an c p ni hi ro rs tc ct so s e le on on . or In  dia Pr sem es n es i.y e an u lin a in a tle e s n d th n d ts to na e ru in re v ca r f s y nt al ar ee ar -fl ns ea un of s g th e to  Consumers Dealers Areas for improvement: communication and customer solutions for mobiles and PCs  R s ea on ab s co le ts Tw Be st so lu t io n s Customers w o- ay m co m un at ic n io .an O arm enc urb d o n.

S5: O3) • Increase market share on the mobile phones and PCs market applying “shop in shop” concept throughout vast dealers network. O1) • To penetrate further the home appliances market consistently offering consumers new innovative products through vast distribution channels and high loyalty of dealers (S2. S5. differentiated and customized products at higher prices (comparatively to LG products for mass market) (S4. S7.TOWS analysis SO: “Maxi-Maxi” Strategy • To increase production volume to satisfy growing demand (S1. and Rich) by offering consumers highly innovative. Upper-Upper Middle. S8: O4) . S6. S8: O2) • Penetration the high premium segment (Upper Middle. especially in rural areas where competitors have poor presence and using “more for less” pricing strategy (S6.

T2) • To increase sales using all strengths to enjoy economy of scale (S1-S9: T3) .TOWS analysis ST: “Maxi-Mini” Strategy • To expand geographical coverage to the areas where competitors are not well presented using the vast nontraditional system of distribution while offering the products with more features at lower pricing (“more for less”) (S6. S7. S8: T1.

S7.TOWS analysis WO: “Mini-Maxi” Strategy • To launch the new products on IT and mobile phone markets with UCP under new brand name or with repositioning (W1. O2) WO: “Maxi-Mini” Strategy • To expand geographical coverage to the areas where competitors are not well presented using the vast nontraditional system of distribution while offering the products with more features at lower pricing (“more for less”) (S6. S8: T1. T2) • To increase sales using all strengths to enjoy economy of scale (S1-S9: T3) . W2: O4) • Increase sales catching the growing demand opportunities to enjoy economy of sсale (W4: O1.

Recommendations .

Recommendations  Strategic Directions  Targeting and Segmentation  Implementation through marketing mix .

Recommendations • Targeting segment Mass market: Low income. however its portion in national consumption will increase from 7% to 20 % by 2025 Area: rural and semi-urban areas. Upper-Upper Middle. and Rich Disposable income: above Rhs 1 000 000 a year Area: large cities Trends: This segment will not grow sharply as mass market segment. Middle Middle Disposable income: up to Rhs 1 000 000 a year Premium segment: Upper Middle. while the size of low income sub-segment will decrease to 26% of population . Lower Middle. cities Trends: Within this segment the size of middle class will increase to 41% of population by 2025.

notebooks and tablets Sales and after sales services Premium segment . reliable and relatively simple models PCs: Basic and affordable models of tablets. and netbooks Sales and after sales services Electronics: Highly innovative. PCs: Launch the new comprehensive and innovative models incl.Recommendations • Marketing mix for new strategy Product Mass market Electronics: Consistently updating product line to provide consumers with best solutions Mobile phones: Affordable. differentiated and customized products Mobile phones: Launch new products featuring more intellectual and innovative nature and based on newest technologies (android or analogous systems).

cricket sponsorship •Newspaper and Life style journals in English. then “more for less” strategy “more for more” (in comparison with mass market) Increase number of outlets to expand geographical coverage to the areas where competitors are not well presented Opening of exclusive LG concept stores (similar to Apple stores) and LG corners in big city stores (“shop in shop” concept) TV.Recommendations • Marketing mix for new strategy Price Mass market Keep “more for less” strategy“. Promotional pricing” during the new products launch period to create buyers’ excitement. •Advertisement in cinema •Sponsorship of charity events •Internet advertisement and social networks (Facebook) Premium Place Mass market Premium Promotio n Mass market Premium . radio.

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