MARKETING STRATEGIES OF LG ELECTRONICS

SUBMITTED IN PARTIAL FULFILLMENT OF REQUIREMENT OF BACHELOR OF BUSINESS ADMINISTRATION GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY, DELHI

PROJECT GUIDE: MS. A N

SUBMITTED BY:BBA ENROLLMENT NO: 0051211708

SESSION-2010 D.A.V. INSTITUTE OF MANAGEMENT

ACKNOWLEDGEMENT
All is well that ends well. Today I have reached the end of my project. From the starting till the completion of this assignment there are many people without whose assistance all my efforts would have been fruitless. I, therefore acknowledge all who generously helped me by sharing their time, experience and knowledge with me without which this project would have never been accomplished. I would like to express my sincere thanks to my internal guide Ms. , whose guidance was instrumental in helping me complete my project.

PREFACE
This study is divided into several parts. This project highlights the objective and aims of L.G Electronics sales promotion strategies and how successful these promotions have been. By Questionnaire- Survey, the preferences and purchase pattern of the consumers have been highlighted. This has helped significantly in determining what kind of promotional campaigns will be successful, what is lacking in current campaign and things to consider in future before making a promotional campaign. In the end, conclusion has been made regarding the whole analysis and several recommendations have been suggested, which could help in boosting the success rate of sales promotion by L.G Electronics.

TABLE OF CONTENTS
CHAPTER - 1. INTRODUCTION TO THE COMPANY
(a) OBJECTIVES OF STUDY

CHAPTER - 2. LITERATURE REVIEW

(a) INDUSTRIAL PROFILE (b) COMPANY PROFILE (c) PRODUCT PORTFOLIO

CHAPTER - 3. RESEARCH METHODOLOGY

(a) TITLE JUSTIFICATION (b) OBJECTIVE (c) SCOPE OF STUDY (d) SIGNIFICANCE OF STUDY (e) RESEARCH DESIGN

CHAPTER - 4. DATA ANALYSIS AND INTERPRETATION CHAPTER - 5. SUMMARY

(a) FINDINGS AND OBSERVATIONS (b) RECOMMENDATIONS (c) LIMITATIONS OF STUDY (d) CONCLUSION

CHAPTER - 6. APPENDICES
(a) QUESTIONNAIRE (b) BIBLIOGRAPHY

CHAPTER 1 INTRODUCTION TO THE COMPANY

(A)OBJECTIVES OF THE STUDY

INTRODUCTION TO THE COMPANY

LONG TERM VISION: LG Electronics pursues its 21st century vision of becoming a true global digital leader who can make its customers worldwide happy through its innovative digital products and services. LG Electronics sets its mid-term and long-term vision anew to rank among the top 3 electronics, information, and telecommunication firms in the world by the end of 2011. STRATEGIC DEVELOPMENT: As such, we embrace the philosophy of "Great Company, Great People," whereby only great people can create a great company, and pursue two growth strategies involving "fast innovation" and "fast growth." Likewise, we seek to secure three core capabilities: product leadership, market leadership, and peoplecentered leadership.

LG THE GCCG WAY

GROWTH STRATEGY
Fast Growth: Fast growth is the result of strategies designed to expand the market size and earnings quickly, in the process improving the growth rate in terms of monetary value rather than quantity.

Fast Innovation: Fast innovation involves setting extremely high innovation goals and securing a competitive edge, aiming for a target of 30% more than what our competitors can do. Fast innovation also means 30% more sales and improvement in our market share, new product development and unveiling these 30% faster, technology development and establishment of corporate value three years ahead of competitors.

Corporate Culture
Though a company implements perfect management strategies and boasts of outstanding and talented people, it should have an appropriate corporate culture to unleash the power of these capabilities. No 'No'- Challenge: The Company foster a corporate culture whereby we suggest an alternative before saying "no" and aggressively work towards fulfilling our goal. 'We' not I: It pursue a corporate culture whereby we embrace a strong teamwork. Fun to work: It create a workplace where individuals' creativity and freedom are respected and working is made fun.

Core Capabilities
Product Leadership: Refers to the ability to develop creative, premium products through specialized new technologies. Market Leadership: Refers to the ability to achieve the "LG brand is No. 1" goal backed by its formidable market presence worldwide. People Leadership: Refers to talented people who perform excellently by internalizing and practicing innovations. Mission LG Digital Design makes Customer's Dream True

OJECTIVE OF THE STUDY

1. The major objective of my study is to check the major marketing strategies laid down by the lg electronics in the market. 2. I also studied how the company has managed to rank itself among the top three firms in the market from so many years. 3. It was also the objective of my study to find out in what situations company introduces certain schemes and discounts to increase its sales in the market. 4. Last, but not the least, I also studied how company provide such an environment to its employees where every employee works to his or her fullest.

CHAPTER 2 LITERATURE REVIEW

(A)

INDUSTRIAL PROFILE COMPANYS PROFILE

(B)

(C)

PRODUCT PORTFOLIO

INDUSTRIAL PROFILE
The world of consumer durable is becoming more and more sophisticated, compared to what it was about 5 years back. Consumer electronic goods are now going digital. Companies are coming out with technologically advanced items researched in-house and being launched in India more or less simultaneously with the rest of the world. Some of the really high tech consumer durable to be seen in the market are so very advanced that they seem to be from the future world It is not necessary that the products that have been a great success outside the country will continue to perform well on the Indian soil. Indian consumer looks for value for money in these products apart from some peculiar product attribute. Decline in the economic growth of the country had a negative impact on almost all of the industries, consumer durable was not an exemption. Majority of the wholly owned MNCs which have come to Indian market in the last few years are still in red

Major Players
Domestic : BPL, Videocon, Philips, Crown, Onida, Salora, Texla. International : Akai, Daewoo, LG, Samsung, Sony, Sharp, Sansui, Thomson. Konka (Latest entrant) Market shares in the 3,000,000 units market are:

Akai 12% Philips 6%

Others 9%

LG 7%

Onida 10% Sony 4%

Videocon 20%

BPL 21% Samsung 8% Thomson 3%

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COMPANY PROFILE
Corporate Name Established Corporate Office LG Electronics Inc. October 1, 1958 (As a private Company) LG Twin Towers 20,Yoido-dong, Youngdungpo-gu Seoul, Korea Tel: URL: http://www.LGE.com Chairman & CEO Mr. Koo Bon Moo Business Area and Digital Display & Media Company Main Product Digital TV, PDP, Monitor, CD-ROM Drives, DVD-ROM Drives, CD Rewritable Recorder, VCR, DVD Player, Audio, Security System, Recording Media, Video Phone, PC Camera, Banking Automatic System, PCB Digital Appliance Company Air Conditioner, Refrigerator, Microwave Oven, Washing Machine, Vacuum Cleaner, Compressor for Air Conditioner, Compressor for Refrigerator Telecommunication Equipment & Handset Company TDX, STAREX, optical switching systems, Implementation of advanced IBS (Information Building System), System Integration (SI) service, etc. Implementation of advanced IBS (Information Building System), System Integration (SI) service, Handsets for satellite, mobile multimedia and IMT-2000 services, etc. Number of 64,082(27,814 in Korea/ 36,268 overseas)
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150-721 82-2-3777-1114

Employees

Financial Highlights (in Millions )

2002 SALES (Domestic) (Export) Ordinary Profit 9,852.8 2,569.8 7,283.0 167.1 2003 10,546.1 2,704.0 7,842.1 2,587.9 2004 14,835.7 4,881.2 9,954.5 728.5 2005 16,601.0 6,084.1 10,516.9 573.7 2006 18,602.9 6,654.9 11,948.0 675.2 2007 20,176.9 4,793.7 15,383.2 836.8

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PRODUCT PORTFOLIO
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. TELEVISIONS WASHING MACHINES AIR CONDITIONERS LCD PROJECTORS PLASMA TELEVISIONS AUDIO PLAYERS DVD MOVIE STATIONS VCD MOVIE STATIONS REFRIGERATORS MICROWAVES HOME PC MONITORS 13. GSM MOBILES

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CHAPTER 3
RESEARCH METHODOLOGY (A)TITLE JUSTIFICATION (B)OBJECTIVE (C)SCOPE OF STUDY (D)SIGNIFICANCE OF STUDY (E)RESEARCH DESIGN (F)SAMPLING METHODOLOGY

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RESEARCH METHODOLOGY
Methodology is the specification of the method for acquiring the information needed to structure the study. a) Title: Marketing Strategy of LG Electronics i. Title Justification Globalization has affected todays market towards the competitiveness. There are so many domestic and multinational companies growing up rapidly. Survival is being the core concept of the companies. Today the choice and preferences of consumer is also changing. Customer is now aware about the products. Customer is better educated more sophisticated. He is aggressive and critical who demands his moneys worth and pays only for what he wants. Dealers are the customers of the company and consumers are the main source of the information. This project has certain objectives for which I covered both dealers and consumers all over Delhi region.

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b) Objective:
Objective One: To find out whether CTV + DVD Scheme has helped to increase the sale of the Dealers or not? Objective Two: Whether this Scheme has helped to change the Brand Loyalty of the Customers or not?

c) Scope of the Study:

This project may prove to be of immense use to the Marketing section as well as Customer Care Department as it will help them to know the problems of customers, reasons for their dissatisfaction and ways to eliminate these problems.

d) Significance of the Study:

LG is one such company which has brought technologically advanced products for its customers keeping in mind that todays customer are placing greater weight on quality and value in making their purchase decision. Dealers are also the customers of the company. They are the last chain in the distribution channel of the company. They are the one who directly deals with the consumers. If they are not satisfied with the companys services the company cannot achieve Total Consumer Satisfaction.

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Keeping this in mind, I have undertaken the project to find competitors potential and customers preferences towards the products of LG. For this, I prepared questionnaire for both dealers and customers. In the current market scenario dealers play important role to create the image of the company and the product.

e) Research Design:
i. ii. This project is not have any probability Exploratory research will be taken for this project work

f) Sampling Methodology:

Methods for Collecting Secondary Data:

Secondary means of data collection involved searching for related theory and cases in different magazines, journals and newspapers. An important source of secondary information was also provided by the literature given by the company, including its induction manual and other Pamphlets and Brouchers. i. Sampling chosen with the Random method ii. Sampling Area would be North Delhi iii. Sample Size: 150

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CHAPTER 4 FINDINGS

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FINDINGS
1. Maximum people are aware about he CTV and DVD scheme of LG i.e. good sign of the LG to penetrate in Indian market. While few still doesnt know about such kind of scheme. 2. Awareness about the different scheme Ads in Journals would be given maximum priority while Ads on TV is and through the friends would be given the second priority by the people. Some people suggested that they got to know about such scheme through dealer and showroom. 3. About the scheme maximum people are agree that scheme is good while minimum said average or few people suggested that the scheme is very good 4.People satisfy with the scheme so people says that they are satisfy with the scheme, while few people says there is need to correction on this kind of scheme .

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5.Complained register about the High Price 70% while unclear advertisement 10% of the complained while undelivered gifts would be contributed also for the complain while others contributed less number by the complained

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6. be ?

If you had to make improvements in this Scheme, what would they

(a) Less Price (c) Others

(b) Free Gift

60% 60% 50% 40% 30% 20% 10% 0% Less Prices Free Gifts Others 20% 10%

Interpretation: Improvement about the scheme 60% of people suggested that less price would be required by the LG while 20% people said free gifts would be required for making successful scheme wile 10% said other region like promotion etc required for that.

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DEALERS QUESTIONNAIRE 7. Whether CTV + DVD Scheme of LG attracted the customers? (a) Yes (b) No

120% 100% 80% 60% 40% 20% 3% 0% YES NO 97%

Interpretation:

97% dealers says about LG attracted most of the

customer through with the scheme, while 3% people said that there is need to improvement required.

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8.

What do you think about this Scheme / How will you rate it ? (a) Average (b) Good (c) Very good

80% 70% 60% 50% 40% 70% 30% 20% 10% 20% Good

10% Very Good

0% Average

Interpretation: About the scheme 70% dealers are agree that scheme is good while 20% said average or 10% dealers suggested that the scheme is very good.

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9.

Whether the Scheme has helped to increase the sale ? (a) Yes (b) No

NO, 10%

YES, 90%

Interpretation: 90 % dealers believe that this kind of scheme would increase LG sales while 10% are till felt that it need to improve some where.

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10.

Are you satisfy with the promotional programs for the Scheme ? (a) Yes (b) No

120% 100% 80% 60% 40% 20% 0% YES NO 3% 97%

Interpretation: Are you satisfy with the scheme 97% dealers says that they are satisfy with the scheme, 3% dealers says there is need to correction on this kind of scheme .

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11.

Details of complaints? (a) Insufficient POP (c) Others (b) Display Trolley (d) No complaint

90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Insufficient POP 2% Display Trolly 5% Others 3% No Complaint 90%

Series1

Interpretation: Complaint of the dealers would be 90% dealers said there is no complaint to retailers while 5% think Display trolley is not available on their shop while 2% suggested that Insufficient POP is the concern for LG.

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12.

Your suggestions for further improvement of the Scheme? (a) Less Prices (c) Free Gifts (e) Others (b) Exchange Offer (d)Enhanced Warranty Period

70% 60% 50% 40% 30% 20% 10% 0%

60%

20% 10% 8% 2%

c i r P s e L

s t f i G e r F

Interpretation: Suggestion for improving sales would be 60% think less price is the only factor which is contributed most while 20% exchange offer also increased the sales according to the retailers. Free gifts 10% required to increase sales for dealers.

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d e a h c n E W d o i e P y t n r a

r f O e g n a h c x E

s r e h t O

CHAPTER 5 SUMMARY
(A)FACTS AND FINDINGS (B)RECOMMENDATIONS (C)LIMITATIONS OF STUDY (D)CONCLUSION

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FACTS AND FINDINGS

CUSTOMERS QUESTIONNAIRE 1. Do you own / aware of CTV + DVD Scheme of LG ? (a) Yes (b) No

Yes No

97% 3%

2.

Where did you come to know about these Schemes from ? (a) Ads on TV (c) Through friends and family (e) Paper Insert (b) Ads in magazine (d) At showroom / dealer

Ads on TV Ads in Journals

15% 50%

Through friends and family 15% At showroom / dealer Paper Insert 17% 3%

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3.

What do you think about this Scheme / How will you rate it ? (a) Poor (d) Very Good (b) Average (e) Excellent (c) Good

Average Good Very Good

20 60 20

4.

Are you satisfy with this Scheme? (a) Yes (b) No

Yes No

92% 8%

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5.

What kind of complaint, you registered ? (a) High Prices (c) Undelivered Gifts (b) Unclear Advertisement (d) Others

High Prices Unclear Advertisement Undelivered Gifts Others 6. be ? (a) Less Price (c) Others

75%

10% 10% 5%

If you had to make improvements in this Scheme, what would they (b) Free Gift

Less Prices Free Gifts Others

60% 20% 10%

DEALERS QUESTIONNAIRE 7. Whether CTV + DVD Scheme of LG attracted the customers ?

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(a) Yes

(b) No

Yes No

97% 3%

8.

What do you think about this Scheme / How will you rate it ? (a) Average (b) Good (c) Very good

Average Good

20% 70%

Very Good 10%

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9.

Whether the Scheme has helped to increase the sale ? (a) Yes (b) No

Yes No

90% 10%

10.

Are you satisfy with the promotional programs for the Scheme ? (a) Yes (b) No

Yes No

97% 3%

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11.

Details of complaints? (a) Insufficient POP (c) Others (b) Display Trolley (d) No complaint

Insufficient POP 2% Display Trolley Others No Complaint 5% 3% 90%

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12.

Your suggestions for further improvement of the Scheme? (a) Less Prices (c) Free Gifts (e) Others (b) Exchange Offer (d) Enhanced Warranty Pd

Less Prices Exchange Offer Free Gifts Enhanced Period Others

60% 20% 10% Warranty 8% 2%

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RECOMMENDATIONS
Managed to come out with new Schemes:

In the month of May and June, with innovation LG has managed to come out with new Schemes at a much lesser cost taking it on an express way to success.

Product differentiation has helped LG to make significant dent/ awareness in the mind of the Indian customers. All these factors have gone a long way in promoting LGs acceptance, building its image and finally making it more successful.

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Comparing the Status between Before & After Scheme

In the month of May, before the scheme was launched, the sale of Flat TVs was equals to nothing, but after the scheme (CTV+ DVD combo) was launched the sale of Flat TVs has increased day by day. I observed that, the reasons were competitiveness among the companies or may be Budget. Because everybody wants to buy at low prices, it could be possible that peoples were waiting for the Low Budget, so that they can buy Consumer Durable items at low cost. Finally in end, I observed that, LG has managed to keep it going by continuously replenishing its product line, product innovation and product differentiation, which have been on top priority. However LG still needs more variants to fill in the many price gaps

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LIMITATIONS OF STUDY
In every Research process, there is chance of errors and errors lead to uncertainty. Errors, which have affected the study, were: 1. Due to lack of time, I could not cover all over Delhi so that my study was restricted to Faridabad City only. 2. Some time Co-operation from respondents was missing. 3. Most of the time respondents were not interested to answer the question, taking it as ordinary matter of the company. 4. Most of the times respondents were biased and having shortage of time.

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CONCLUSION
The result of success in todays highly charged competitive market depends not only in product innovation and level of productivity but also in hands of efficient service network with technological advancements and more adaptability towards information edge. It has been seen that companies are trying to lower the cost of production and trying to give more emphasis in creating value added customer base and customer service. It has lead to extreme innovation and cost reduction to the marketer. It is also seen during last few years that the companies, which have more, efficient, and meaningful service network and also the companies who have controlled the cost of distribution have eventually controlled the market. Companies are finding that they can attract more customers by giving better service or lower prices through better physical distribution. On the other hand, companies may lose customers when they fail to provide service to its customers at the right time because a satisfied customer brings five new customers while a dissatisfied customer takes away fifty. In order to multiply sales volume, only an efficient dealer and retail network can widen the geographical reach of a companys products. There is substantial over capacity in the industry. A shakeout is most likely and survival will depend upon technology, pricing power, efficient after sales service and to a limited extend branding power.

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Environmental Threats:
Competition- Indian market is becoming highly competitive after the globalization, MNCs are giving very high competition to the Indian domestic brands. Value for money- Indian market is very price sensitive, customers value for their money. Distribution channel- Every company concentrates on its strong distribution. Check on unorganized market thriving- inputs that are imported ones in at excise paid cost has no Modified Value Added Tax paid. Customers now a days are very much aware about the products, so companies work hard on providing information, offers, speciality of their products to customers. Every company stress on promotional based marketing.

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Environmental Opportunities:

Building Brand- Companys image and brand name plays a great role in the purchasing behavior of consumers. Every company tries to increase their brand name. Untapped rural market- Certain market surveys show that market is growing at the rate of around 25%, so companys like BPL, LG, Samsung are ahead in this category and are trying to tap this big market. Technology- These days the customer preference are taking a shift to technological awareness, they do not any more rely on the technology heard, rather they have the potential to get aware, and analyze the same and adapt them. Socio Economic Condition is a major aspect which is giving a boom to the Consumer durable industry, the purchasing power and the expenditure in entertainment of the customer is increasing day by day. CRM- Customer Relation Management is another area where all companies are trying to make their imprint.

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CHAPTER 6 APPENDICES
(

A)QUESTIONNAIRE (B)BIBLIOGRAPHY

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QUESTIONNAIRE
Customers Questionnaire Name Add Contact 1. : : :

Do you own / aware of CTV + DVD Scheme of LG ? (a) Yes (b) No

2.

Where did you come to know about these Schemes from ? (a) Ads on TV (c) Through friends and family (e) Paper Insert (b) Ads in magazine (d) At showroom

3.

What do you think about this Scheme / How will you rate it ? (a) Poor (d) Very Good (b) Average (e) Excellent (c) Good

4.

Are you satisfy with this Scheme? (a) Yes (b) No

5.

What kind of complaint, you registered ? (a) High Prices (c) Undelivered Gifts (b) Unclear Advertisement (d) Others

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6. be ?

If you had to make improvements in this Scheme, what would they (a) Less Price (c) Others (b) Free Gift

Dealers Questionnaire Dealer Name Address Contact No 1. : : :

Whether CTV + DVD Scheme of LG attracted the customers ? (a) Yes (b) No

2. 3.

What do you think about this Scheme / How will you rate it ? (a) Average (a) Yes (b) Good (b) No (c) Very good Whether the Scheme has helped to increase the sale ?

4.

Are you satisfy with the promotional programs for the Scheme ? (a) Yes (b) No

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5.

Details of complaints? (a) Insufficient POP (c) Others (b) Display Trolley (d) No complaint

6.

Your suggestions for further improvement of the Scheme? (a) Less Prices (c) Free Gifts (b) Exchange Offer (e) Others

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BIBLIOGRAPHY

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BIBLIOGRAPHY
a) Books referred to: 1. Kotler Philip, "Marketing Management", Prentice Hall of India, 2004. 2. Wilson & Gilligan, "Strategic Marketing Management", Viva Books Private Limited. b. Journals referred to: HBS (Harvard business review) c. Magazines referred to: 1. LG Sansar Magazine, May 2010 2. Business Today d. Internet referred to: i. Sites 1. www.lge.com 2. www.lgezbuy.com 3. www.ask.com 4. www.domain-b.com ii. Search Engines 1. www.google.com 2. www.altavista.com
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