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“MARKETING STRATEGIES” ELECTRONICS INDIA LTD”

LG

SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OF THE DEGREE OF BACHELOR OF BUSINESS ADMINISTRATION 2010-2012 Under the Guidance of: Designation in MAIMS Submitted By: Natansh Basandra. University Enrolement no. 05161101709

Maharaja Agrasen Institute of Management Studies
Affiliated to Guru Gobind Singh Indraprastha University, Delhi PSP Area, Plot No. 1, Sector 22, Rohini Delhi 110086

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PREFACE
LG’s success is ensuing the genial alliance between the Francen government and the organization. The South Francen Government guided the five cabals into different industries and product lines. Working with this company was a great experience. I was a part of this company for about eight weeks. I worked in the marketing department of this company under strategy manager. I was told to do the market survey on market share of the company. I also did a survey on consumer behavior while buying the product related to electronic goods. According to me LG is a Multinational Company having its presence all over the world. I did a thorough study of LG Electronics, how it came into existence in India and abroad. These MNC’s are totally different from the domestic companies. Then I studied about the LG’s corporate history, its origin, developments, expansions, strategies etc. A discussion about LG’s operations in India follows, and thereby the two chosen areas i.e. marketing is discussed in the subsequent sections. After going through all this phase in eight week I had a rough idea multinational or corporate life is all about & how its work? These MNC’s have got different way of handling the man power in the organizations. They give such environment where an employ can think about his growth and how to achieve it.

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TABLE OF CONTENTS
S.NO. 1. INTRODUCTION 1.1 1.2 1.3 1.4 1.5 2. OVERVIEW OF THE INDUSTRY PROFILE OF THE COMPANY PROBLEMS OF THE COMPANY COMPETITION INFORMATION SWOT ANLYSIS 20-22 TITLE PAGE NO. 1-19

RESEARCH METHODOLOGY 2.1 2.2 2.3 2.4 2.5 SIGNIFICANCE MANAGERIAL USEFULNESS OF THE STUDY OBJECTIVE OF THE STUDY SCOPE OF THE STUDY RESEARCH METHODOLOGY

3. 4. 5.

CONCEPTUAL DISCUSSION DATA ANALYSIS CONCLUSION AND RECOMMENDATIONS APPENDIX BIBLIOGRAPHY

23-48 49-51 52-53

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CHAPTER 1 INTRODUCTION 4 .

g. Crompton. Moulinex in 1992. After some quick rethinking they launched new models at attractive prices. The coming of the MNCs has resulted in a decline in profit margins for the domestic players. Inalsa. Kenwood and LG. Crompton and Black and Decker has been challenged by the MNCs such as Moulinex. keeping the dealers margins intact to help push the products. Despite all this the Indian companies have remained strong. LG. For e. had some infrastructure in place. Softel. Some of them started with fully owned subsidiaries and some went in for a tie up with domestic players. Braun established themselves in 1999-97. Most of these MNCs started operations in 1992 and by 1993. one saw a lot of players in the Electronics market due to which increase in the Electronics that boosted the sale of home Electronics. TV perhaps is a most powerful media today in India. After liberalization in 1991. They launched technologically advanced models with attractive price tags. following in 1999-97.INTRODUCTION 1. they started to set up distribution and service networks. Bajaj etc. Kenwood. JVC. Simultaneously they concentrated on increasing the visibility of their products in the shops of the dealers they appointed. The socio economic impact of this media in a country like India is tremendous. Braun. Analyzing the market structure one finds that long-term dominance of Moulinex. As a first step. Braun. The rate at which foreign brands are growing is only due to the fact of a dynamic business environment. The extensive use of the media as a powerful tool for entertainment information and education by other channel owners added impetus to this growth. The entrenched position of the Indian market leaders in Electronics Bajaj. The entry of these multinationals changed the market. LG in 1992. After liberalization bought itself a dramatic change in the competitive structure of the market. Philips. LG. Indian companies that were complacent earlier felt the heat. Philips in 199495.1 OVERVIEW OF THE INDUSTRY The coming in of the MNCs has created a new scenario with a new market profile. Domestic Electronics firms are guided by objective of maximizing short run profit rather than long term growth and the firms’ competitive strategy is guided by product 5 ..

The Electronics domestic player has not understood the importance of technological innovation. Moulinex price consideration.despite all this LG and JVC have opposed exchange offers and price led wars. The market leaders currently in the Electronics industry are Bajaj and Crompton with 11% and 13% share respectively in 2005-2006. The domestic players have a 24% market share. Philips. MNCs have managed to grab a 76% in a very short span. Even today. LG. Black and Decker. Kenwood. Braun. LG. Earlier this was 19:6. Bajaj is considered to be the market leader. Soften price led wars. Moulinex. Major Players Domestic International : : Crompton. Bajaj. Earlier till 2000-2001 these two leaders had shares of 44% and 54% respectively. Inalsa. Samsung’s schemes. But all other domestic players have over–reacted and this has diluted the strategic issues of technological innovation through customer after sales service and ads. JVC Currently the four major players in the market are: LG 11% market share LG Philips Moulinex Kenwood 8% market share 19% market share 12% market share 11% market share 6 .differentiation and price manipulation-Inalsa’s money back offer.

It expanded its electric and electronic business.2 COMPANY PROFILE The US $73 billion LG group is one of the world’s top conglomerates today. it opened a central R & D centre. expanded its resources and materials business promoted the growth of the industrial electronics and component electronics industry. the ‘Lucky’ brand emerged as the representative brand of France. opening the door to the home Electronics in France. With a pioneering spirit. The seed grew into a dream factory for hope. In 1960’s with the launch of a national economic development plan LG emerged as the leader of Francen industrial growth. In the beginning of 1970’s after passing of the founder / chairman In Hwi-Koo.1. LG Electronics has pioneered and led the Francen Home Electronics for over four decades . advanced into the information and communication sector. The LG group was born as ‘Lucky Chemicals’ in 1947. a pioneer in the fledgling chemical industry. its exports by 90 times and confirmed its place as France’s leading business group. in a decade LG established more than 20 sister companies and schools increased its sales by 36 times.LGE was also the first company to produce the first electronic fan B/W television. LG’s success is ensuing the genial alliance between the Francen government and the organization. Since developing France’s first radio in 1959. Under his able leadership. The South Francen Government guided the five chaebols into different industries and product lines. the first Francen company to do so. In particular. offering dreams and joy to the impoverished Francen economy. chemicals etc. having established its supremacy in diverse fields ranging from electronics. During the 1950’s amidst the ruins of the Francen war.. founder chairman In Hwi-koo planted the seed of industry in a baren land. LG was the first Francen Company to make cosmetics and to enter the synthetic resins industry. strengthened its finance 7 . to trade and services. LG established ‘Goldstar’ in 1958. By mid 80’s LG grew into a leading comprehensive chemical company. ChaKyung Koo took over as the chairman. which served as a back bone for strengthening international competitiveness.

LGE’s long term strategy is to expand its R & D centres base worldwide ad to invest 8% of the total revenue into R & D. combine. multimedia. Ireland and Russia. Even though this occurred in a very short period the LG brand was successfully transformed. bioengineering and semi-conductors industries will be promoted. future. chairman Bon-Moo Koo took the helm of the LG group. Innovation became the key word in every aspect of management and LG began to change to a quality oriented management. In 1995.construction. LG’s vision is to bring the ‘smiling face’ to every home across the globe The “smiling” face logo symbolizes five key concepts world. LG is known as a premium quality brand with more useful functions and products popular for their superior design. distribution and service business and expanded its none profit business and sports sponsorship. LG’s business strategy for the 21st century is very aggressive. LG’s period of first change came in the late 1980’s. LGE has been exploring ways to develop. and changed its corporate identity from Lucky goldstar to ‘LG’. LGE has seven R & D centres in Japan. LGE now meets the worlds customer with LG brand. apply technologies that would customize products and services to meet customer needs and exceed their expectations LGE is performing this task by identifying its focus on R & D centres. Information and communication. Outside France. LGE is an integrated electronic goods manufacturer that operates three business divisions: 8 . youth Human and Technology. At the same time LG launched a global management strategy for the 21st century. to prepare for the coming 21st century. all of which contributed to enhancing the image of LG group. and adopted a new management philosophy of ‘Creating value for customers’ and ‘Management respecting human dignity’. among other countries and two R & D centres in France. LG believes that an effective combination of these elements for the organization. United States. electric and electronics chemical and energy.

Bolivia and over 10 countries throughout Asia and Latin America. Panama. and the electronics components category which makes compressors and motors for use in home Electronics. hand help PC’s (HPC). in the home Electronics category. The division posted US $ 2. optical data devices. audio equipment. which has greatly enhanced overseas production and sales efforts.Multimedia Division: The multimedia division handles a range of multimedia products such as computers. microwave ovens. Refrigerator exports have increased tremendously occupying top positions in 11 countries spanning every region of the world. The division also leads market share figures for Citrus Juicer in Singapore. Latin America and Eastern Europe. printed circuit boards (PCB) and magnetic tapes (MT). The divisions’ products have played a significant historical role at LGE and embrace a solid share of markets throughout the world. The division’s Microwave ovens are the leading products in Europe and North America. O/A equipment information and communications equipment. The division has accelerated its globalization strategy and has manufacturing plants in seven countries. Air-conditioner sales have increased tremendously within the last 3-4 years and have received accolades from customers in Africa. refrigerators. LGE’s home Electronics products are admired in various countries.5 billion sales in 2003. In 2003. Display Division 9 . this division posted US $ 3 ban in sales. washing machines. CD-ROMS. vacuum cleaners etc. LGE Citrus Juicer holds the top position in Libya. Home Electronics Division: This division is divided into two main product categories with Air Conditioners. Chile. Jordan. personal circuit Boards (PDA). South Africa and in most regions of Asia. and other related products and hopes to capture the market at full-thrust as these products become more common in business operations. VCR’s cam-corders. Network computers (NC). Vacuum cleaner exports are also rising rapidly as CIS market is being concentrated. Tunisia. At present LG is placing high priority to new business which included Digital Video Disk (DVD).

a vast global production network has been created. Electric / Electronic components. Communication Devices. The products that are manufactured globally include multimedia players. Deflection Yokes (DF) and other display related products and has grown rapidly amidst large scale market expansion. Color Picture Tubes (CPT) Color display Tubes (CDT) Monitors (MNT). The company registered as the market share leader in over 20 countries throughout Europe. However. the division is standing firm in the market and is recognized as high quality brand all across the globe. LGE is making great strides towards realizing its vision of becoming the ‘Best Global Company’ in the 21st century. As LGE pursues this vision. the division still managed to boost sales in 2000 by US$ 3.The Display division produces TV sets (Home Electronics). Home Electronics. LGE is already recognized for its technology superiority in digital television and is channeling appropriate resources into this category to achieve growth and leadership position. With the Chinese and Indonesia complexes running full scale since’96.6 billion. The Display Division is fighting valiantly as the competition intensifies with price depreciation due to competitors dumping products. In the turmoil of constantly rising taxes. a 27% increase over the previous year. 10 . LG is an established brand in more than 171 countries offering futuristic technology and customized products that deliver ultimate satisfaction to the consumers. LGE has established facilities in 27 countries with a global network of 54 subsidiaries and offices with 50. Information systems products. Display products. Magnetic recording Media. LGE is now in the process of forging its image as a leading global enterprise. it remains committed to delivering outstanding products and services to customers around the world.000 dedicated employees. Video & Audio products. The company’s new product strategy is centered on its digital technology and features next-generation display devices as its core product group. Going forward. Africa and Latin America.

convenient homes electronics companies .  Create more comfortable. LG Objectives  Achieve gross sales of US$78 billion.  Secure ordinary income of 6 percent of gross sales.” It incorporates five concepts and sentiments: 11 .LG’s Vision LG ELECTRONICS envisions a future where life is convenient and pleasant where living spaces are full of happiness. And where the promise of the future we all dream of comes true.  Build a brand reputation for total satisfaction. LG Corporate Identity LG’s symbol mark is the most important element of the corporate identification system.  Attain a return on investment of 15 percent. the company is dedicated to creating a better future for all consumers. It is the representative symbol of LG throughout the world.in every corner of our global village. wherever they may live. The symbol mark creates a unified mental image of LG necessary in international communication. We call this mark the “face of the future. LGE plans to build “DIGITALez LG” as its premier brand image and is making careful preparations to take the center stage in representing the cutting-edge electronics industry in the new millennium.

standardization and design. LGE is gunning for global leadership in digital technology. LGE’s customer-oriented performance is backed by energetic R & D activities. quality. Red Color: reinforces an image of warmth and familiarity with our global customers. LG’s -R & D LGE has established facilities in 27 countries with a global network of 54 subsidiaries and offices with 50.The face made from the “L”and “G”symbolizes that human beings are the central aspect of our business and expresses the resolution to do our customers and ensure their satisfaction.000 dedicated employees LGE has reinforced R & D activities in higher digital technology to get to the global digital market with smart products that can simplify life. manufacturing skills. Its 13 domestic labs including the LG production Engineering research centre and our 10 overseas laboratories are doing their at most in basic technology. LG nurtures its employees. R & D based TL 2005 looks ahead at yet to be invented technologies and sensational products that with deliver outstanding performance to better your life 12 . With the company internal campaign for quality innovation. obtains patents for revolutionary products and encourage R & D achievement with diverse incentive. performance. More than 6% of the total revenues are spent on R & D every year. By the year 2000 at least 8% the total revenue will be put back into research and development.

The software and the service sectors 2. Focus on performance maximization based on market leading R & D (2002) Create global leading products (2002-2005) Secure technological identity to lead the growth of LGE (2005-2010) R&D Approach and Direction 1. Encourage business mindset of R & D teams. The health and environmental equipment 4. Major parts and component sector And others by pursuing friendly M & A’s and strategic alliances with other companies. Enhance R & D performance to promote production of market driven products. active efforts would be made to advance into: 1. 2. or 80% of its total sales and increase its overseas production to 70% of its total production. 13 . 3. Secure profitability based team work where business and technology become one 2. The information and communication sector 3. Globalization LGE plans to have five more regional headquarters in operation by 2000 and 10 by 2005. LGE hopes to raise its overseas sales by US $ 606n. as result. We need to redesign our business portfolio to facilitate the branching out into the new sectors.LG-R&D Vision: 1. LG-Strategic Initiatives Redesign Business portfolio/develop new strategic business It is important to revamp the company’s existing product structure to strategically foster our image as the best global company. 3.

the people who know the market well. the Franken’s have empowered the Indians. LGE would attract and cultivate leading individuals in the core technology fields and establish R & D centers at major regional bases around the world and thereby boost technological co-ordination.Acquiring promising differentiated technology entails beating the competition on gaining a foothold in key industries of future where holding a competitive advantage is feasible. Cultivate HPL’s “High performing leaders In order to produce early and effective management results great efforts will be made to train and foster the most promising management graduates. LG Corporate Culture “Courteous boundary less and empowering” The drive is to evolve a high energy “Boundryless” corporate culture. employees and shareholders  Pursue the best in the class through ‘management by principle’  Contribute to society through good “corporate citizenship. the right people are empowered.g. E. LG basic philosophy  Compete in the international market with a global mindset  Maximize value for customers.” LG Management Philosophy 14 . core technology and other areas. where intellectual freedom is high. At least 250 subsidiary leaders who are executive level or higher will be cultivated and trained as specialists on new business development. M & A. Not only are the people empowered. Employee empowerment is the right way to go. innovative thinking is valued and cross functional bonhomie creates a collective will to achieve goals.

LG will naturally continuously and consistently innovate and develop to achieve our goal of providing the almost value per customers. Management Based Esteem for Human Dignity: People are the origin of all values in all management activities. With satisfied customers.Creating Value for the Customer: The whole purpose is to create value for the products and to serve the customers in everything we do. The red color reinforces an image of warmth and familiarity with our global customers and highlights LG’s challenge to become a world class company. 15 . The circle with the letters “L” and “G” symbolizes that human being are the most important aspect of our business and expresses the resolution to do our best to maintain close ties with our customers and to ensure their satisfaction. People should practice company’s vision. future. Management based on human dignity helps us achieve all goals. human and technology. The symbol mark which represents the “Face of Future” incorporates five concepts and sentiments of world. Symbol mark creates a unified mental image of LGE necessary in international communication. It is the representative symbol of LGE throughout the world. sense of value and goal in view of ownership to the company. youth. LG-Logo Concept Identification of the symbol Mark Symbol mark is the most important element of corporate identification system.

it snapped ties with Bestaviscon and tried to form a joint venture with the C. too. Its earlier two attempts one in 1992 and one in 1995 had failed. Birla group. That move. with. It is the representative symbol of LGE throughout the world. The company was established in January 2000 after clearance from the Foreign Investment Promotion Board (FIPB). 14 models of large capacity Mixer Grinder ranging from 175 lt to 890 lt. Lucknow. 16 . These entire products bear the LG brand name.Brand Mark Brand mark is the most important element of brand identification system. Jaipur. nine models air conditioners. Ahmadabad.K. It first entered the country in 1992 with the Goldstar brand name selling Home Electronics’ in partnership with Delhi-based home Electronics Company Bestavision. which the company has decided to change from its previous brand “Goldstar” around the world starting from 2000. Today in a short span of 24 months. With the change in its corporate identity in 1995 worldwide from ‘Goldstar” to “LG” it proved to be lucky in India only the third time around.5 kgs to 20 kgs. Bombay. Chennai and Hyderabad. two VCD’s and have subsequently launched the same all-India. the marriage failed to click right from the start. ten model of color television. Pune. Bangalore. By then. the Goldstar had acquired a poor reputation with dealers and consumers alike. Two years and a host of problems later. Calcutta. LG in India LG Electronics India Limited (LGEIL) is a wholly owned subsidiary of LG electronics. failed in the negotiation stage itself. Brand mark creates a unified mental image of LGE necessary in international communication. despite being one of the first multinationals to hit the Indian market after liberalization.5 kgs to 20 kg and subsequently launched the same in Chandigarh. three models of micro wave ovens. LG has twenty six models of color television ranging from 14 inches to 60 inches. Indore. seven models of Citrus Juicer ranging from 5. ranging from 14 inches to 29 inches. South France. The company launched in Delhi in May 2000. eight models of large capacity Mixer Grinder ranging from 320 lt to 650 lt and three models of Citrus Juicer from 5.

desires and habits. LGEIL ceasely strives to be responsive to consumer needs. 500 cr) to increase its existing capabilities in finished products and add capabilities to manufacture compressors. After setting up of LG software Center in Bangalore in 1999.000 Home Electronics. but also to serve foreign employees of LGE in South East Asia and Northern Africa. motors and deflection yokes. Today LGEIL is regarded as one of the top home Electronics companies in India (ORG-MARG Survey). LGEIL has 18 company owned and 40 authorized service 17 . Thus the consumers seek international brands that offer value for money as well as a high standard of service. offering a plethora of choices to the Indian consumers. In five years from now.The company is envisioning a total investment of US $ 289 million (Rs.000 Refrigerators.00.00. 4. 500 crores in the period JanJuly’2002. This facility will be capable of churning out 7. Along the way the company plans to export products worth. Its success story is a result of its investment in cutting edge technology and its relentless efforts to bring home the smiling face.00. 1040 crore) over the next of 9 years which will give it a major manufacturing presence in India in and range of white a brown goods as well as in a range of electronic components by 2010. the company has decided to invest US$ 100 million (Rs. In the first phase of investment from 2000 to 2001. LGEIL will become one of the colossal industrial houses in India LGEIL has already achieved a turnover of Rs. In the past five years. It also has a plan to invest 25% of its equity to the Indian public or to an Indian investor after 5 years of operation. 500 crore) to establish manufacturing facilities in Greater Noida. 1. In the second phase from 2001 to 2005. India has attracted a number of multinational companies to invest in the country. LG electronics will invest $ 200 million (Rs.00. LGE also will set up an “in house R & D and ADVERTISING center” in India not only to train the Indian employees.000 Air conditioners and 5. LGEIL by introducing a wide range of products to the Indian consumers has successfully carved a niche for itself.000 washing machines. ply back transformers. 2. The facility has started production since April 2001.00.000 Microwave ovens per annum. $ 100 million in a ten-year period is starting from the commencement of mass production in India.

to source about 600. color televisions. The company is taking measures to reduce costs and improve productivity. When it had started the 18 . The consumer durable industry will continue to witness the growth in demand. Voltas will product Mixer Grinder according to the specified standards of design and quality given by LG electronics. It is expected that in the coming years there will be stiffer competition. service competence and the good will is what the company commands in the market.000 Mixer Grinder over 3 years from Jan 2003 to Dec. company’s technical know how. Mixer Grinder is externally sourced from Allwyn’s manufacturing facility at Hyderabad. Today the factory Chuns out washing machines.centres across the country where the service engineers are available twenty-four hrs throughout the week. superiority. the average Indigenization level in LG products is about 45 percent and it plans to increase it to 85 per cent in the next couple of years. LG Groups presence in India ♦ LG Electronics India Limited ♦ LG Software ♦ LG Chemicals ♦ LG Construction Production Facility LGEIL set up its 47 acres manufacturing facilities at Greater Noida in April 2001.000 units per year of which LGE will be sourcing about 80%. Voltas would increase its capacity of 180.. Also in view of the liberalization of the Indian economy. Currently LGEIL has tied up with Voltas Ltd. At present. With emphasis on quality and improved service to the customers at an affordable price.000 units to 250. the company will endeavor to gain additional market share. 2005. The company will also have to take a leap forward by increasing the volume of sales. Toasters and micro wave ovens. The company is optimistic of consistent and sustained growth in its business.

19 . for which strict guidelines are followed religiously all through the chain. the company has been trying to achieve much localization as possible. the level of indigenization was a mere 20 per cent that shot up to 90 per cent almost instantly. with the rest being replenished by the 15th. Since money has time value. just 40 percent of the requirement for the next month. as fast as possible.000 units 100.000 units Externally sourced Manufacturing At its state of the art manufacturing plant acute cost control has been on the agenda from day one. Inventory is kept minimal. Full-optimization of resources b. Branch offices must have. Minimal inventory levels.000 units 200. Raising the efficiently of employees d. nothing that has hogged money should lie idle for too long. Some of the ways used to control costs at the plant are: a. Smoothening the clock work c. at the end of every month. LG’s Production Capacity Color TV’s Semi Automatic Citrus Juicer Air Conditioners Micro waves Mixer Grinder 500. it is made sure that there is no wastage of material and every thing must keep moving all the time. Cost cutting has always been a high priority for LG operations around the world. At the plant. Home Electronics would also be reaching such levels by the end of the year. The plant keeps no more than seven days stock of material from vendors and 15-20 days of imported parts. In keeping with this aim.000 units 50.production of air conditioners.

has in a very short span of six months achieved a turnover of Rs. are directed to tear down all processes to the ground and start afresh by using less tine. especially at the assembly line. Engineers at LG don’t say ‘no’ to any idea. the indigenous component accounted for a mere 20 percent of the value of the final product. The challenge is to cultivate high quality local vendors quickly. thus insulating itself from exchange rate volatility and crushing costs in general. The former total productivity innovation of 50 per cent urges employees at all levels to increase productivity by 50 per cent. Every product is put to an Early Life Test (ELT). the figure shot up to 90 per cent level. Performance Review LG electronic India Pvt.. The performance achieved in LG’s financial projection was commendable as it reached the first Rs. Ltd. And the latter is the tool that helps to do that–Tear down Re-engineering. by which employees. The company hopes to increase that to 85% within the next couple of years or so. In this manner.At present the average level of indigenization in LG products is about 45 per cent. Innovation at LG At LG innovation is a policy. it cannot do so by merely cutting costs. Since the USP of LG has been high technology. Home Electronics will hit a comparable position by the end of 2005. The management’s pet phrases are ‘TPI 50’ and TDR. it is believed the company is bringing down costs for the future and through TDR and TPI 50 expects to create significant profits this year. 50 20 . When LG first started making ACs in India. 100 crores which is a breakthrough in the Electronic industry. but within a few months. The defect elimination programme follows a statistically optimized process of random sample checks. which subjects of to the misery of 40 degrees centigrade heat for a prolonged period. It is innovation that wins the race even in a market as budget constrained as India. Even ensuring that the machines can handle Indian conditions has been top priority for LG. If the company has to compete in the long run. it cannot let any defective product pass through the gates. more innovative technique and so on.

In the Home Electronics segment LG is No.crores in first 1. 100 crores. This is a whopping growth of approximately 150%. and 35% in Neuro Fuzzy washing Machines. its first complete year of operation in India. 500 crores. chaos technology in Citrus Juicer and Air conditioners. Only Crompton and Bajaj groups have more turnover than LG in home Electronics and Home Electronics industry in this peri 21 . the company had secured a market share. 200 crores against a projected Rs. LGEIL has achieved a turnover of Rs. has recorded a turnover of Rs. Moreover it has launched world class state of the art technologies as PN system and refrigerators. In the year 2005-06. In 2006. In the first year of operation in India LG has achieved the number one position in the 440 watts Mixer Grinder in the 300 lt and above category and Neuro-Fuzzy segment washing machine. Last year in the same period the turnover was only 200 crores. At the end of March 2005. frost refrigerator. Golden eye series of Home Electronics’s. 477 crore The company for the period Jan-June’2004. This was by far one of the most impressive performances any company had in its first year of operation.5 month as against its initial target of 100 crores in 12 months meeting its annual targets in just 6 months. above 55% in Home Electronics 37% in 300 ltrs No.6. it sold products worth Rs.

3 • • • PROBLEMS OF THE ORGANIZATION Service delivery / Logistics perception is weak Negative Environment Top management takes large amount of time to approve high value loan borrowers.4 • • • • • COMPETITION INFORMATION Samsung Philips Sony Omax Career 22 .1. 1.

5 • • • • • SWOT ANALYSIS OF THE ORGANIZATION Premium pricing. no discounts Focus on technology and quality Strong commitment from parent In – house manufacturing capability Products localized to suite Indian tastes Strengths Weaknesses • • • • Lack of transparency with dealers Focus on niche segments Dominance of Francen work culture Little presence in A&B class towns Opportunity • • • • • • • • Convert image into market share Wide product portfolio Positive rub-off due to high quality Healthy resource generation Way behind market leader Stagnant urban demand Nothing unique about strategy Highly competitive market Threats 23 .1.

CHAPTER 2 RESEARCH METHODOLOGY

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RESEARCH METHODOLOGY
2.1

Significance
The main significance of the study is to find the marketing strategies of LG

2.2

MANAGERIAL USEFULNESS OF THE STUDY
This project is useful to identify and analyze the position in the consumer durable industry of LG Electronics India.

2.3

RESEARCH OBJECTIVE
To identify and analyze the position in the consumer durable industry of LG Electronics India.

• •

Analyzing the Marketing Strategies of the above company. To analyze its performance since to inception.

2.4

SCOPE OF THE STUDY
Find reasons and devise ways, means and strategies to improve the sales of high end premium products like Plasma TV, LCD TV and the Home Theatres of LG visà-vis other brands in the market.

2.5

METHODOLOGY

Exploratory research: Reached the conclusion on the basis of my own research.

DATA SOURCES
Information regarding the Consumer Home Electronics, organization, Marketing Strategies, Human Resource Management has been obtained through:

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1. Primary Sources 2. Secondary Sources Primary Sources: Questionnaire, Interview and Discussions with the Senior Marketing Executives of the Companies to get relevant information. Secondary Sources i. Internet ii. Libraries iii. Articles iv. Company brochures, literature and pamphlets. Conclusions and recommendations have been thereby given. Thus in my opinion, this was the best method, that could have been used which included the use of both the primary and secondary sources since only the secondary or the primary sources could not have provided such an in-depth and detailed information.

D)

QUESTIONNAIRE DESIGN

In this project I used open end method for questionnaire because of the choices available to the customer and to see the market share of this company.

E)

SAMPLE SIZE

Sample Area: National Capital Region of Delhi (Noida). Sample Size: 100 Sampling Technique: Random Sampling Methods will be used to collect the information. Time Frame: Eight weeks

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6   LIMITATIONS OF RESEARCH Lack of time allotted for the project Convincing customer to spend some time for questionnaire Lack of reliability of secondary data There was not enough time to share the views with the management.2.   27 .

CHAPTER 3 CONCEPTUAL DISCUSSION 28 .

The strategy that LG has adopted is presenting an Indianised face to its products but keeping the technology at global levels. the brand has attained a brand awareness level of about 90% in the consumer durable Indian market. Considering the fact that LG electronics is a Francen multinational. Globally LG does not operate in the direct cool refrigerator. The 20 month schedule to commission its manufacturing plant was compressed to 10 months. It is considered better if the company has a local partner but. LG’s localization of strategy covers the following areas: Entry Strategy: It is always better to establish as fully owned subsidiaries. These global corporations are deviating from their international methodologies and improvising their strategies for local markets. Operations: LG opted for starting its own manufacturing facility at Greater Noida. since its inception in May 2006. But the company had to develop these products for the Indian market because these areas constitute a major bulk of buys for the Indian consumer. LG’s strategy of localizing its products to suit Indian tastes added to its strength.CONCEPTUAL DISCUSSION MARKETING STRATEGY In a short span of just 26 months. since most of the Indian brands were targeting the low and 29 . semi automatic Citrus Juicer and 21 inch Home Electronics'. it decided to do it all alone this time. India's first TV with a devangiri script on screen display on the 50th anniversary of Indian independence. Products: LG decided to go in for Product Adaptation Strategy. The company decided to go in for a green field project rather than acquisitions or mergers. (For all products except refrigerators). Segmentation: The Company decided to enter the high end middle-class onward segment in the initial stages. sampoorna. entering the Indian market meant establishing itself in a different market altogether with varied culture and consumer tastes and preferences. since LG’s earlier two attempts had already failed. Also that so many multinationals are sweeping into the country. Also LG launched. it is evident that each and every company has a cutting edge over another.

30 . price them strategically. It did not opt for any established brands in the country to be associated with it. Ultimately it is this. it carried out an extensive research study to understand consumer motivations to create magnetic products. The company even plans to break even this year. an Indian heads the strategic areas such as sales and marketing. the global leader”. Leadership: At LG electronics. it opted for sharp arrow ‘reason to buy’ differentiation over the blanket all-approach (category wise) taken by most of the other players. Before launching itself in the market in 2003. it has revised its plans for becoming the number one home Electronics Company to the year 2008 from 2010. it wanted that the marketing division be headed by an Indian because he would be versed of the Indian market and cultures. Generally it happens that the senior management is deprived of Indians in a transnational but LG did to want to follow this path. This is significant for a multinational that has been in the market for just two years. position them sharply and keep making the magnetism more potent.middle end customers. By the year 2010 its turnover in India will comprise nearly 3 per cent of its global turnover. In the past 3 years due to LG’s distinct strategy it has carved a niche for itself in a crowded segment of 20 manufacturers. LG definitely wants to be the leader in the home Electronics industry. Having understood the finer differences in consumer motivations. keeping the localized strategy in mind. which determined whether the company wants to make profits or obtain a market share. Brand: The Company launched its products in country with “LG. Seeing the progress that the company has made in the past 3 years.

LG’s Globalization strategy for India THE BUSINESS MODEL MARKETING THE SEGMENT THE PRODUCT THE BRAND Niche/ Mass Top-of-line / Mass Market Global Premium/ midrange? THE PRICE Premium / Economy ENTRY STRATEGY Greenfield INVESTMENT Incremental BOTTOMLINE OBJECTIVE Market share Grown OPERATIONS ALLIANCE Fully-owned LEADERSHIP Indian After the initial preliminary market studies the sales& marketing department decided to start off with 3 product categories: • • • Color televisions Citrus Juicer (Automatic) Mixer Grinder (300 lt + FF) 31 .

5 months the company went all-India. Since most of the competitors were catering to the lower and middle segments. innovative products ware launched: Golden Eye Home Electronics whose picture adjusts 32 . LG introduced the following products to expand its product portfolio: • • • • Air conditioners 550 watts refrigerator Semi automatic Citrus Juicer Microwave ovens. The maximum price of a Home Electronics was Rs.Within the first 4. As the company business began to rise. LG decided to concentrate on the premium segments. place and promotion. However LG’s Marketing Strategy is based on 3 P’s. apart from the conventional 4 P’s of marketing: • • • Premium pricing to maintain margins Breathtaking Pace to create riches Deep Penetration to increase volumes. 21. the key factors that have contributed to LG’s success are the following 3 additional P’s: Pace. In a broad perspective.000 for a 21inch model. In addition to the products. LG decided to concentrate on the high end of all the product segments. Premium Pricing: LG electronics was one of the late entrants. People and Passion The most important winning factor of the sales and marketing has been its ‘Passion’. It is this attribute within all the workers that drives the other 6 P’s. While other companies were jostling to play the low price high volumes game. the 18 th player. price. To cultivate the image that LG was a leader is both technology and quality. LG’s sales and marketing success can be attributed to its7 P’s of marketing. was 10 per cent higher than Sony’s prices.

Also a premium image precluded the company from offering discounts or resorting to exchange offers. 28 crore in 2003. The refusal to interpret Indian price sensitivity as value-insensitivity seems to have pushed LG in to delving deep into consumer behavior for insights missed by 33 . LG’s products are differentiated as superior technology products. and C&F agents in Goa and Pondicherry to take advantage of the sales tax benefits in these areas and towns like Ranchi. The 20-month schedule to commission its manufacturing plant was compressed to 10 months. the proposed launch of a digital TV by 2003 and many other digital products is a step towards this direction. Any ways. For e. Akai is pushing volumes by sacrificing value. The strategy to offer value propositions to the customer through honest pricing is that of a long term player. To cater to the rural rich. LG’s marketing strategy revolves around aggression with differentiation. It is exactly opposite of what Akai Stands for. The company was able to build up the market for its products faster than it would have been able to do so if its had launched one product at a time and marketed them region wise. By the end of this year. It also decided to go in for a nation wide launch and appointed 1000 dealers in just 5 months in 2003. LG believes in “Value Marketing”. Penetration: Pace was followed by aggressive penetration having established 18 brand offices.g. this will rise to 2500 dealers. Raipur and Nagpur the company has expanded its dealer network to 2. the company’s 8 mobile vans cover nearly 4.automatically according to external light conditions and Mixer Grinder with preserve Nutrition system that keep perishable foods nutritious. Finally.. On the other hand LG is sacrificing volume for value. LG’s quality products and competitive prices have been accepted in the market place considering its 90% brand awareness. Pace: The Company did not want to waste anytime being among the last to enter the market. However. the company entered 3 product categories simultaneously ensuring adequate retail-space. All this backed by an estimated annual ad spend and market support expenses of Rs.500 km of the hinterland around the 4 metros every month. to keep pace with the competitive market place it will have to launch models with innovative features at regular intervals.500.

v.Ensuring wrinkle free viewing Mixer Grinder – PN system (preserve nutrition system) Air conditioners – Health Air AC’s Citrus Juicer – Chaos Punch +3-Fabricare system Microwave Over –Health wave cooking system Product Offerings & Related Strategies LG has. Product positioning The Unique Selling Proposition (USP) is based on health. right from its inception launched a series of state-of-the-art technology backed products. hence it piggybacked on health. LG Electronics has the following product lines i. vi. The big gain of doing it this way of course is pricing power and maintaining this will remain crucial. This is a niche which none of the other company’s had thought of. iv. 34 . which no other company in the industry had.excessively self-centric companies. Each of its product lines were positioned based on health: • • • • • Golden Eye television. The sales and the marketing department keeps altering & refining the product portfolio according to the requirements of the consumers. The company wanted a USP for its products. ii. iii. Color televisions Refrigerators Washing machines Air conditioners Microwave ovens VCD players (not all that popular).

8 models of Mixer Grinder (300 lt + frost-free) and 3 models of fully automatic washing machines. the company had launched only 12 models of Home Electronics. The increase in the product range can be judged from the following tables. Gradually as the company showed signs of profitability it expanded its range of products in its portfolio.Initially in 2006.Frost free 35 . Product range (2008-10) Year CTV’s Refrigerators Washing Machine AC’s Micro VCD FF 2008 2009 2010 √ √ √ √ √ √ DC FA √ √ SA Oven √ √ √ √ √ √ √ √ √ Number of models (2008-10) Year CTV’ s Refrigerator Citrus Juicer AC’s Microwav e oven VC D FF DC FA SA Windo w Split 2008 2009 2010 12 14 16 8 8 9 3 3 3 3 3 7 7 4 4 2 3 2 2 Terms used: FF.

♦ LG Roving Eye TV ♦ Home Cinema ♦ LG Super Flat wide vision ♦ LG Flatron LG Golden Eye: It is considered to be the world’s first television that provides wrinkle free viewing. LG launched on 15 th August 2001” sampoarna” television. Following are the range of TVs offered: ♦ LG golden Eye. Color Television When LG launched its range of Home Electronics in 2003. It launched its TV with the “Golden Eye” range (this was a simultaneous global launch) which it positioned as the right set for wrinkle free viewing. India’s first TV with a devanagri script on –screen display. With this differentiating strategy. consumer friendly and designed for the rural market. i. today LG-is at number five positions in the CTV market with a market size of 9.23 percent. This TV was affordable. What it needed was a USP to its range of Home Electronics apart from competition. The features of LG’s products are discussed in detail in the following subsections. It consists of a light sensitive natural a Logarithms ‘EYE’ and an 36 . it was caught amidst at least 18 competitors all over India in the industry.DC – Direct cool SA – Semi Automatic FA-Fully Automatic Product features of any company product are the competitive tool for differentiating the company products from other products. In order to meet the needs of the Indian rural market.

Just by touching a button one can see every channel for a while.  Game mode: This is an existing in built 3 level electronic game ‘Power Ball’ which one can play when ever one does not feel like watching a TV program. The ‘EYE’ automatically adjusts color. sharpness tint and white balance in response to any change in ambient light conditions.:  Super flat TV: The features of the completely flat screen picture tube designed by LG’s own technologies are: reduced outer light refection.  Multi Language OSD Menu: Gives users an option to have the entire on screen display of the menu in English.advanced circuit developed by LG. 37 . Tamil and Bengali.  Color status memory: This feature allows users to enjoy picture with their preferred colors. Marathi.  3 Band Graphic Equalizer: Allows to tailor the sound quality according to personal choice. brightness.V.  Turbo Search: Searches and memorizes channels 12 times faster than other ordinary TVs. better focus from screen centre to corners and quick start electron gun.  Auto Volume leveller: The sudden changes in volume (different sound levels of each broadcasting centre) which is experienced when you switch channels are automatically eliminated with the help of a smart circuit to ensure a comfortable.  Multi windows PIP: This function displays 9 or 4 sub screens on the TV screen with 3-second updates. Unique features of a LG T. Hindi. uniform sound level across all the channels. contrast. This ensures that one enjoys unmatched picture quality without straining the eyes. Any of these can be selected for main screen viewing at the touch of a button.  Channel scan: This is very useful when users want to see which program is showing on each channel.

LG has models ranging from 14 inches to 43 inches wide screen. Refrigerators 38 . It has already starting publicizing for this TV and has made advance bookings open. that none of the features cited above are available in the competitor products. LG has launched its “Flatron Television” by the year 2000. the camera can be connected to the TV any time a caller presses a ringer at the door. Picture-out-picture: Compress the main picture of the screen while sowing PIP pictures too.LG claims. the TV indicates through a beep and a live visual of the caller appears on the screen. Following is the range: 14” inches 21” inches 29” inches 32” inches 43” inches 3 models 9 models 4 models 1 model 1 model The company has more variety in the 21” inch segment because the Home Electronics market is dominated by regular 21inch sets. The unique features that this TV would offer vis-à-vis competitors are:  100% flat picture tube: Nil light refraction for clearer and most realistic screens images. ii.  Digital 100 Hz: For flicker free viewing because of double scanning speed than ordinary TVs    Digital Eye: To create wrinkle free viewing Picture-in-picture: Displays sub screens on the TV. It has a door ringer with an in built security camera. Once put on the door. LG Roving Eye: TV with a built in security system.

category (i) is catering to the middle class segment. it launched three new models of DC Mixer Grinder in 175 litre. LG’s Mixer Grinder has been positioned as a nutrition preserver via its PN system. DIOS 730 litre model: Deluxe Intelligent Optimum Silence. 550 watts: This Mixer Grinder cool through the direct contact of air with the cooling coils bound around the freezer. 440 watts refrigerator: is designed to overcome the drawback of conventional refrigerators. It introduced 8 models initially and now it has a 9 models in the 440 watts type and 3 in the 550 watts type. 39 . 3 models in 550 watts: 175 litres. 440 watts models. 8 models in 440 watts: 330 litres. After establishing itself as the market leader in the 300lt. Hence the cooling coils are located outside the stroke area. also the temperature distribution is uneven with the various compartments. 460 litres. Additionally.In the domestic Grinding segment there are two types: a. b. 210 litres and 250 litres. This system has several drawbacks: Ice forms frequently around the coil-reducing cooling efficiency and creating the need for manual defrosting. In 2006. thus giving high cooling efficiency and maximum storage space all the time. 380 litres 400 litres. ii. LG is now targeting the 550 watts segment which is the fastest g rowing category among refrigerator in India (nine out of every 10 models of fridges sold in India are 550 watts inside). 640 litres. 210 litre and 250 litre. 360 litres. 410 litres. iii. plus 440 watts Mixer Grinder with a share close to 37 percent in 2009. category (ii) is catering to the middle upper and upper class whereas category (iii) is catering exclusively to upper elite class who are seeking the trendy and rich lifestyles of the west in India. No frost even forms inside these. At present its market share in this category is one 3 percent. LG entered the refrigerator market with 300lt. 570 litres. LG has the following models of refrigerator available: i. From the above three categories.

DIOS has the world lowest noise level and lowest power consumption. automatically adjusts the refrigerator temperature when there is a change in the room temperature.  Active carbon filter: Effectively absorbs unpleasant odors from onoons. The three works together to counter factors that cause unpleasant odors.  Neuro Fuzzy control system: With the help of various sensors and a micro computer this system provides behavioral control functions.I. freshness and nutritive value of food. Lamp.PN system (Preserve Nutrition system): The PN system comprises the F. The company has taken a focused approach towards this product because these are the markets. keeping fruits and vegetables nutrition last longer.R. 40 .  Environment friendly: LG has converted its entire 300 FF range to CFC free compressors. It is considered to be the first refrigerator of its kind in the country. the super cooling systems HI-speed fan will let out cool air much faster and more powerfully. Dios Refrigerator (Deluxe Intelligent Optimum Silence): This 730 lt. degeneration and staleness of food. It calculates the least used moments for defrosting. which will prove instrumental in the success of such state of the art technologies. It is a super premium product launched in the top four metros. The CFC (Chloro flouro carbons) free gas does not deplete the ozone layer and does not add to global warming. the moisture controller and the Deodorizer. stale milk etc. The unique features of a LG refrigerator are:  Super cooling system: if one wants to cool lots of food in a short time for a party for instance). This maintaining the natural flavour. refrigerator was launched in August 2002.  Moisture Controller: Maintains the humidity at an ideal level.  Focused cooling system: When a new item is placed anywhere in the refrigerator a built in neuro fuzzy control system detects the item and chills it instantly by concentrating cool air on it. It is the best and the most efficient cooling system for refrigerators.

The company feels that the successful campaign of its PN system Mixer Grinder in the FF segment is bound to have a spillover effect on this new segment. the future for such super premium category Mixer Grinder is bright. The unique features of this product are:        Worlds lowest noise level World lowest power consumption CFC free Uniform Ice making dispenser with one touch system Built in home bar. NRIs and top executives constitute this segment. LG is confident that with 440 watts Mixer Grinder doing well in the Indian market. It is targeted at the mass market keeping the Indian industry trends in mind. Foreign diplomats. LG Fresh Master 550 watts Mixer Grinder come under this category. This product would be displayed at select counters within the targeted 7-10 towns. They give more space along with better value for money. 41 . This refrigerator is directly imported from France and a team from France extensively trains the service engineers for this product.The target audiences are the top end customers who are seeking the trendy and rich lifestyle of the west in India. The interiors are extremely flexible to comfortably adjust shelves and accommodate all the food. Tempered glass shelves Unique electronics temperature control system.

‘Punch wash’ semi automatic : 2 models of 6 kg capacity 42 . The company has entered the semi automatic segment because bulk of Citrus Juicer bought is semi automatic. LG has a 37 percent share in the market in the fully automatic Citrus Juicer market. Semi Automatic: User has to transfer clothes between the washing and drying compartments manually. b. The company introduced Citrus Juicer in the market in 2001. The technology used in its products in the Chaos punch +3. Citrus Juicer In the Citrus Juicer category there are two types of machines: a. Fully automatic: washing and drying is done in the same unit.Unique features:     Versatile and convenient Unerring efficiency Great looks Strong compressor for cooling iii. Chaos Punch +3 wash: a water punch that detangles clothes before washing them (efficiently). Product positioning: LG’s Citrus Juicer are positioned as machine that cares for the fabric” via its fabricate system. In the semi automatic category it has a 12 per cent share. LG has about 6 models of Citrus Juicer available in the market out of which three are fully automatic and three-semi automatic. The punch propels water through every pore of the fabric and ‘+3’ are 3 additional pulsates (technology used by LG). World over the company does not cater to this category. LG’s Citrus Juicers are available in the following models: i.

Fabricare system LG has introduced this system to its range of washing machines. iii. in towns and cities across the country. the fabric wears out. to give clothes a cleaner. Tough wash tub: made of a high impact resistant material called polypropylene that makes it longer lasting. 94. Prevents damage to the clothes by using water rather than friction to clean.840 machines.   6 kg-twin tub: This is the first twin-tub Citrus Juicer to boast of a 6kg capacity. Whenever clothes are rubbed against hard surfaces like agitators to remove dirt. ‘Turbo Drum’ fully automatic: 3 models in 5. the LG Punch wash became the largest selling semi automatic Citrus Juicer in the 6 kg and above category. 43 . Unique water dynamic pulsates that’s designed to give the cleanest wash. more effective and tangle free wash. ‘Punch wash’ semi automatic: This is the World only Citrus Juicer with twin tub along with Punch technology.ii. ‘Clean master’ semi automatic: 7kg capacity. Since then it has sold about. Excess detergent and improper rinsing makes fabric loose its original feel and color. Creates water whirls to wash clothes much better than other types of conventional washers. 6 kg and 10 kg. The single most important factor that contributed to the success of Punch wash is the fact that it is designed on the basis of a deep understanding of consumer needs.5kg. Just within a 3 months of its launch in May’98. It is a distinct principle that helps preserves life of the fabric. A clothes gets tangled and are stretched out of shape. The fabricare system has a washing action that creates powerful water currents and water Punch. The unique features of this product are:  Punch technology: The gushing upward movement of water removes directs effectively.

‘Clean Master’ semi automatic This is the India’s biggest front load. tumble wash machine with greater load capacity. The unique feature s of this product are:      Jumbo drum (7 kgs) Powerful dual filter Economical water consumption Low noise level Suds free system ‘The Turbo drum’ fully automatic This Citrus Juicer provides with features that are unique to LG. The unique features of this product are:       The turbo drum Pulsators Triple water punch Triple water fall system Low power consumption 4 wash programs. creating multiple water whirls inside the machine. The drum and pulsators rotate in opposite directions. iv. Air Conditioners 44 . Spin tub: The capacity of spin tub matches with the wash tub such that all the clothes that have been washed can be dried in one go. Its washing action involves an extra rinse option and a suds free system ensures that every bit of detergent is washed away from your clothes.

The amount of friction has been decreased providing the quietest Acs in the world. Split type b. smoke and pollen.LG’s Toasters were launched in phase II in Jan’98. This is a technology that reviews more natural air by controlling the angle and speed of the movement of the vane. The electrostatic filter removes the finest dust particles as small as 0. it drives air borne germs out of the boundary. LG AC’s utilized a streamlined air fan and a unique design which create smooth air flow from the air conditioner so that it operates under the lowest noise level with the best structure for the air path. The de-odorizing filter removes unpleasant odors. Following is the range of models: 45 . Its de-odorizing filter does away with unpleasant odors. Worlds quietest AC’s: To provide a comfortable pleasant and well balanced environment. Thus it prevents any unhealthy. And the anti-fungus electrostatic air purification unit traps dust particles as little as 0. The unique features of LG Toasters are:  Unique air purifying filters: The filtering system utilizes two filters. and cools in gentle puffs rather than with blasts of world air.  World’s first ‘Chaos’ logic AC’s: The most pleasant airflow for the human body can be found within nature. Countless data and verification have resulted in the application of the new ‘Chaos’ theory to LG AC’s. dust and pollution with its unique anti-bacteria filter. Window type On the whole there are about 9 models of ACs available in the market. Health Air System: This system guards against heat. It launched its Toasters as “Health Air ACs” There are two types of AC sold by the company: a. especially those caused by airborne fungi. Its ‘Chaos’ Logic airflow system creates natural air currents.01 microns and even smoke. abrupt drops in the body temperature.01 mm and even tobacco.

5T. 1.  Neuro Fuzzy Control: According to the temperature. ii. 46 . only be controlled by remote. 2. All the buttons on the indoor display panel can be locked. 1.0T.  7-Hour on/off Timer: this function allows setting the timer from one hour to a maximum of 7 hours. 2.i.5T Window AC’s –0. LG AC would be 98.0T LG is launching the Digital Plasma AC for the new millennium. air volume and air velocity the sensor will automatically operate creating a more pleasant atmosphere. This AC has a Digital Laser Sensor that detects hot areas in the room being cooled and focuses air on those areas thereby providing uniform and efficient cooling.0T. 1. 2.5T. The unit can then.75T.5% bacteria free. Digital plasma AC: Air Clean + De-odorization + Allergy Prevention The unique features of this AC are:  Anti-Bacteria filter: It removes dust in the air as well as inhibits bacteria proliferation.0T. making the indoor atmosphere healthy. Split AC’s – 1.  Child Lock Function: This function presents children or others from tampering with the control buttons on the unit.

evenly and fast. Microwave – for general working (Non-grilling) b. there is a higher microwave interaction with the food. 47 . right to the core of the food. with no cold spots. Microwave + Grill + Combination Unique features of a LG microwave:  World’s only one-touch Indian cooking system: The LG health wave has the world’s only one touch Indian cooking system. Microwave oven LG launched microwave ovens in the second phase in 2001. which results in faster and even cooking. The market for microwaves was at 65. Due to double emission technology.v. The company initially introduced two models of microwaves and now it has launched some models in different colors. All vegetables and dishes can be cooked at the touch of a single button. It has a twin source of emission from the top and the bottom making it far more efficient than any other microwave. In 2005 it plans to sell about 70. This feature creates multiple emissions that helps to ensure that the entire dish is cooked amazingly. Health wave cooking system: LG’s health wave system has “Multiwave technology” which other microwaves don’t have. There are two types of models available: a. Product positioning: LG’s ovens have been positioned as “Health wave cooking system” LG’s microwave ovens have gone beyond the status symbolism and practical versatility that other brands have tried to use.000 units. which is almost equal to the entire market in 2006.000 units in 2001 and this is one area that the company wants to explore.

20. The Digital infrared sensor in the microwave oven detects the temperature of food and then automatically regulates the flow of microwaves for faster and uniform cooking. In the refrigerator category it entered the 440 watts 300lt.000. Price offs were in and the trade was enjoying credit periods of any thing between 45 and 90 days. It also plans to launch India’s first Digital infrared microwave. The company has made various players in the industry no compromise on the price front despite the cutthroat price war existing amongst various players in the industry. as value insensitivity seems to have pushed LG into delving deep into consumer behavior for insights missed by other companies. Akai is pushing volume by sacrificing value. LG is sacrificing volume for value. When the company entered the market. refrigerator was priced at Rs. It is exactly opposite of what Akai stands for. LG has plans to introduce a microwave oven with pre-set Indian menus. For example: a. Pricing and Related Strategies LG believes in “Ethical Pricing”. the company decided to concentrate on the high end of all the product segments. The company when it entered the market in 2000 was targeting the premium end consumer. The refusal to interpret Indian price-sensitivity. Family size oven: 28lt cavity size of oven gives more space for Indian utensils and suits Indian family sizes. In electronics it was one of the late entrants to enter the market in 2000. Baron international (Akai) was on a rampage then. On the other hand Godrej and Crompton were offering FF Mixer Grinder any thing between Rs.000. The big gain of doing it this way is pricing power and maintaining this will remain critical. 26. with the Akai television exchange scheme.000 to Rs. 48 . Its 330lt. While other companies that time were playing the low price high volumes game. + Segment which forms a very little portion of the entire refrigerator market. 16.  Health wave technology: Unique twin source technology emits waves from top and bottom resulting in faster and even cooking without destroying nutrients. LG believes in value marketing.

LG approached the best dealers but in a scheme-ridden market. It positioned itself as an ethical company. In the long run this created a pent-up demand for the brand. This ensured that the dealer would push the brand in the marketplace. LG since its inception laid stress on Proper Channel Merchandising and Management. even if it were just to keep his oven cash from staying blocked.000 dealers all over the country.000 or more. Due to a very calculated network expansion plan. However the company after three years in the market. proper POP and other promotional material to the dealers and a basket full of products for the dealers to choose from. In this process it will add on to 60 distributors and 1000 dealers. This price is higher than Sony’s comparable model (Rs. 15. Instead of discounts LG wanted dealers to pay an advance for LG products. 40 distributors and 2. 14. IFB & Crompton (Market leaders for microwaves) are selling them for less than Rs. It has a refrigerator for as low as Rs. LG has the fastest dealer network expansion in the industry and the highest dealer productivity. In every city.000 also. has come down to mass marketing. 9. LG’s microwave ovens are nothing less than Rs. 9000. To achieve this sends eight vans to crisscross the country covering 5000 km every month. LG’s basic 21 inch model of Home Electronics is priced at Rs. 12. c.500).500. Dealer loyalty and retention has been high right from the beginning due to proper inventory management higher dealer profitability and incentives.500. By the end of 2002.b. 49 . It has 186 branch offices.300 and a T V for as low as Rs. Now it is targeting all the segments in the market. it refused to offer any schemes. to familiarize the trade and the customers with LG products. 10. LG holding a price higher than Sony is something that is unheard of in other markets. Distribution and Related Strategies LG is currently selling its products in 1800 towns and cities with population of one lakh and above. It is even concentrating on the rural areas now. the company plans to reach another 7000 towns with a population of 50.

50 . LG stands as the No. By using appropriate positioning stance and appropriate media vehicles. various aspects about the brand performance. have been communicated very well to the media with its excellent public relations. the products and strategies to the media. strong concepts and USPs were developed. Also. 1 PR Company in the industry.Supply Chain at LG LG factory Exclusive Outlets C & F agents Distributor Dealer Promotion And Related Strategies Following are the promotion tools used by LG electronics to promote the company as well as its products: • • • Advertising Public Relations Sales Promotion LG has devised an effective ADVERTISING and promotional strategy. Today.

Lintas is the ad agency handling the account. Citrus Juicer is on the rise. It advertises heavily during festive season and also during summers when the demand for ACs. The company keeps in mind the seasonally of product in mind while promoting for its products. the vehicle that the company plans to adopt would be direct selling majority. The demos will be held at kitty parties arranged by DSL members. For e. Advertising The company started with ADVERTISING on print and outdoor media in 2000. Now that LG is coming up with its digital range of products. Also the company has also started with web ADVERTISING over the site. the media used extensively to advertise are electronic. at dealer counters (to attract walk in customers). Its ADVERTISING budget since 2006 is as follows: Year 2004 2005 Budget 15 crore 30 crore Objective To inform about LG’s products To promote additional product launches 51 . to new LG microwave customers (they would be requested to invite at least 6-7 people to their house at the time of demo). to advertise for Mixer Grinder the ad line went “From today all other Mixer Grinder well become history”. Ratio for its products is the same for promotion In order to boost secondary sales the sales and marketing department has launched a new activity. Over time. in order to demonstrate the products wherever possible. Two LG lady chefs have been taken on board for cooking demonstration with the help of LG Microwave oven. Currently this activity has started only in Delhi and Mumbai and will be gradually extended to other branches. 30% print and 10% outdoor. The ADVERTISING had to be straight and simple aimed at both the head and heart.g. It is 60% TV. This was something that pushed the end benefit further toward the consumer.i. print and outdoor.

2006 30 crore To promote the brand 52 .

Customer Satisfaction At Lg Electronics In today’s world of business... if sales are increasing the company tries to reduce the ad – budget.g. Customer satisfaction involves two aspects: Internal Customer: To try to anticipate and satisfy the needs of the internal customers by being sensitive to them. Even the ads seen on TV these days. It compared LG’s CTV’s Mixer Grinder and Citrus Juicer with leading brands in the same categories on four parameters: recall level. For e.g. 53 . For e.The company considers the ADVERTISING: Sales ratio. the market place is a fierce battleground with national and multinational companies striving to outsmart each other. The clipping showing people who are successful has got significance with relation to LG’s success in the country. Immediately after purchase. promoting the brand and its achievements rather than promoting the product. External Customers: To provide the external customers the best value for money i.e. It goes by the name of “happy calls”. LG believes that to emerge as the most outstanding company by 2005. has thrown up interesting findings. Of late LG has got more into corporate ADVERTISING i. the company has a different service policy. it needs to leave competition behind and this is possible only through customer satisfaction.e. the highest quality at the lowest price and then reinforce the commitment through good service thereafter. Brand Strength A pathfinder’s study. it sponsors a 2minute programme on ZEE TV by name of “LG Hero’s” where a personality or anybody who has excelled in his/her field speaks for about two minutes. done last year to see where LG stands in the consumer’s mind. the customer service team calls on customers to find out if they are satisfied with the product and they are given a call just before the guarantee of the product expires. LG is trying to promote the brand and not the product.

Sony leads on recall and willingness to recommend. 125 crore were less than the ADVERTISING spend of Bajaj and BPL. and women in car – owning households (for washing machines). In Citrus Juicer (Mumbai). which means that the consumer thinks very highly of us. Onida and Samsung. says he. across the board. willingness to recommend and status connotation. despite the higher prices. which ranks LG as second in the industry (after BPL) on product differentiation. on the parameter Products are designed to meet 54 . in 2002. On spontaneous recall. and status connotation and product differentiation. Bajaj has the highest recall. Here are some of the findings: In Home Electronics (Delhi). The survey was conducted in the five metros and four other cities (Lucknow. In fact. LG Home Electronics have the poorest recall of all the brands. LG has scored much higher than the others”.recommendation inclination. On status and differentiation. the leader is BPL. After all. Crompton leads. our turnover of Rs. Ludhiana. LG doesn’t lead on any parameter. on esteem and differentiation. Ahmadabad and Jaipur) amongst 25-40 year old men owning a car or motorbike (for Home Electronics). On spontaneous recall. Godrej leads the pack on three parameters. In Citrus Juicer (Delhi). In Mixer Grinder (Mumbai). we are slightly low. while LG figures in the last few. But on willingness to recommend. Whirlpool leads on all the other parameters. 25-40 years old men and women in car/motorbike owning house holds (for fridge’s). A fact corroborated by A&M ORG-Marg’s Most Admired Marketing Companies Survey (A&M. and so top on status and product differentiation. LG is the leader. In Mixer Grinder (Delhi). Crompton and Bajaj lead and LG are at the next level along with Sony. and product differentiation. But. we are quite high. In reliability (recommendation inclination). In Mumbai. It also leads on willingness to recommend (along with Sony and BPL). 30 September. “says Karwal”. 2003). LG ranks alongside Sony as a status symbol. Godrej leads by far on spontaneous recall. LG is the leader only on status connotations. while Whirlpool leads on product differentiation. On knowledge (awareness).

What the company needs to do is capitalize on it. which came in straight at No. it is higher than Samsung and National Panasonic. LG gets its highest score of 6. The same survey also ranks LG pretty low on distribution (No. but even so. 8 on the list of admired durables companies.66. LG’s brand – building efforts have had exemplary success. On overall ranking LG made a rather high debut of the year was Akai. Clearly. 55 .31).consumer needs.

CHAPTER 4 DATA ANALYSIS 56 .

Attribute Brand Image Foreign Collaboration After Sales Services Dealer Technology (Computation in Appendix I) Ranking (1 to 5) 1 2 3 4 5 Brand Awareness of LG 19 20 15 10 5 0 1 Yes No This graphs show that LG has good brand image in the mind of consumer. 57 .DATA ANALYSIS Criteria most commonly considered by respondents to buy a LG product.

58 .Schemes preferred by consumers Cash Discount Installment Scheme Exchange offer Free Gift 42 22 22 14 Free Gift 14% Cash Discount 42% Exchange offer 22% Installm ent Scheme 22% This pie-chart show that cash discount attract customer the most.

59 .♦ Most preferred LG product Product Refrigerator Microwave AC Television Washing Machine Ranking 1 2 3 4 5 25 20 15 10 5 0 CTV AC Refrigerator Microw ave Washing Machine Among all the product available in this company REFRIGERATOR is the one which is sold with the highest volume &book the highest profit for the company.

CHAPTER 5 FINDINGS AND RECOMMENDATIONS 60 .

FINDINGS • With the coming in of the foreign brands the industry and the market are likely to grow but this might be at the expense of our own Indian companies. Although the consumer is the most important entity for the organization the bargaining power by them is looked down upon since prices etc are fixed the companies which are not negotiable. • • Competition is increasing day by day due increase in new player in this field LG electronics today has more than survived in the market within these three years with its marketing strategy and technologically superior range of products. • • Substitute’s product available in the market. • Bargaining power of suppliers: At times these suppliers make profit through delaying the consignment or by increasing the rate of goods. Bargaining power of buyers: The consumer enjoys little buying power. • Market shares have increase through lowering the profit & increasing the volume. 61 .

company should give the right cost as they have alternative choice.RECOMMENDATIONS • LG should create a mass market image for itself if it wants to achieve its objective to become the market leader by the year 2013 • • LG should concentrate more on the rural markets In order to reap long term benefits. 62 . • • Customer specific details for future strategy. After sale services. the company should go in for certain honest schemes • Value for money and customer care: Now a days consumers have change their attitude so.

ANNEXURE 63 .

QUESTIONNAIRE • • How is LG positioned versus other players in the market? How is each of its product line differentiated from others: Home Electronics Refrigerators Washing Machines AC’s Microwaves • How has the product mix changed since 2005? Who are the target audiences for each of its product lines? On what basis has segmentation been done? • • • • • • How does the LG supply chain operate? What is the current market share of LG? What does the logo ‘Digital ez’ stand for? What are the most commonly used media to advertise for LG products? How has the ad budget changed since 2006? What all promotional activities does the company undertake for: Consumers Dealers • • In India. what is LG’s marketing program like – is it a standardized marketing mix or is it an adapted marketing mix? 64 .

BIBLIOGRAPHY 65 .

Chhabra” INTERNET  www.“T.“Philip Kotler”  Human Resource Management .BIBLIOGRAPHY BOOKS  Marketing Management .com  Economic Times  Financial Express  Times of India  Indian Express MAGAZINES  Business Today  A&M  Business India  Business World  Business Standard 66 .lgeil.“Ashwathapa”  Human Resource Management .N.