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A MINOR PROJECT REPORT

ON

ADVERTISING STRATEGIES
OF
LG ELECTRONICS
SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT
OF
BACHELOR OF BUSINESS ADMINISTRATION (BBA)
JAGANNATH INTERNATIONAL MANAGEMENT SCHOOL
Affiliated to GGSIPU

SUBMITTED TO:MRS. VANDANA ARORA,


INTERNAL GUIDE

SUBMITTED BY:TUSHAR SETHI


ENROLLMENT NO:00121401710

SESSION: 2010 2013


JAGANNATH INTERNATIONAL MANAGEMENT SCHOOL,
VASANT KUNJ
GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY

ACKNOWLEDGEMENT

Getting a project report ready requires the hard work and effort of many people. First of all,
I gratefully acknowledge Mrs. Vandana Arora for her invaluable support and guidance
during the completion of my project and supervising my work. Also I would also like to
thank all those who have contributed in completing this project report. I convey my
heartfelt affection to all those people who helped and supported me during the course, for
completion of my Project Report. Especially thank the employees at LG Electronics for
their valuable help and those who spared their time for providing information and
responding to my questionnaire.

Tushar Sethi

ii

CERTIFICATE
This is to certify that Tushar Sethi is a bonafide student of 3 years regular course of
Bachelor of Business Studies (BBA) of Jagannath International Management School
(JIMS).
The project titled MARKETING STRATEGIES OF LG ELECTRONICS INDIA LTD. is
submitted in partial fulfillment of the requirement of BBA.

_________________________
Mrs. Vandana Arora
Jagannath International Management School

iii

EXECUTIVE SUMMARY
LG is a Multinational Company having its presence all over the world.
Then studies were made about LGs corporate history, its origin, developments, expansions,
strategies etc. The chosen area i.e. Advertising is discussed in the subsequent sections.
After studying about the company, a rough idea can be obtained of how multinational or
corporate life is all about & how it works.
These MNCs have got a very 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.

The aim of the project was to shed some light on the Advertising Strategies of LG
Electronics and to know about the stand of LG Electronics in the market.
The company profile, giving details about the sub-divisions of the company i.e. Multimedia
Division, Home Electronics Division and Display Division is given; along with a brief
history of the company starting from 1958 to 2010 in the form of timeline is also given. The
History helps to understand the achievements or the accolades, the company has achieved
till date.
For the research, a questionnaire was designed and given to people so that choices could be
given to the people so that in return they could give their own personal opinion.
Data sources included both types viz. Primary Sources like Interviews, Questionnaire, etc
and Secondary Sources like Internet, Reference Books, etc.

iv

A detailed research on the main topic Advertising Strategies of LG has been done next,
highlighting along with it topics like effective advertising and consumer preferences.
Data Analysis was performed next on the basis of the interviews and replies of the people
through the prepared questionnaire. It was found that LG had a respectable stand in the
market and that many people found LGs Advertising Strategies to be attractive.
The basic conclusions that could be drawn out of the whole project were that LG had more
than survived during the past three years in the market. It could also be easily made out that
there was a lot of strict competition in the market and that the buyers had a lot of options to
choose from. 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.
If LG is to grow successfully in the future, honest schemes must be launched by them along
with special focus on rural areas. Various customer oriented schemes like after sale
services, customer care centers must be launched. Value for money must be provided.
Lack of time allotted for the project, Convincing customer to spend some time for
questionnaire, Lack of reliability of secondary data, not enough time to share the views
with the management were some of the limitations that were faced while making the
project.

TABLE OF CONTENTS

Chapter Number

Topic

Page Number

Chapter 1:

Introduction

Chapter 2:

Research Methodology

Chapter 3:

Company Profile

15

Chapter 4:

Advertising Strategy

25

Chapter 5:

Data Analysis and Findings

36

Chapter 6:

Conclusions

52

Chapter 7:

Recommendations

54

Limitations of Research

58

Annexure

60

Bibliography

63

vi

Chapter 1 :

INTRODUCTION

Advertisement, which is a crux of any market economy, plays a pivotal


role in the economic progress of a nation. Advertising is indeed the
only direct method, which helps to reach masses of potential buyers.
Advertising,

being

dynamic,

changes

with

changing

methods

of

distribution and consumption. Advertisements have become the part of


life for everyone as a listener through some media or other. In the
present era of information explosion and media influence, these
advertisements play a major role in changing the settled perception or
thinking, which is otherwise called attitude, of the consumer and also
the consumption pattern of the society in general. Thus, the impact lead
to cultural and social changes to a great extent. Under this situation
efficiency of the manufacturers, marketers and advertisers is tested in
churning

out

advertisements,

matching

the

expectation

of

the

consumers, which may gradually bring about desired attitudinal


changes in them.
Need for Advertisement
Advertisement plays a major role in every walk of life. The divergent
sections of the society may need advertisement for a variety of reason
from information sharing to consumer persuasion to decision making.

The paramount reason which may necessitate the use of advertisements


may be:

Advertising is a way of communicating information to the


consumer, which enables him or her to compare and choose from
the products and services available. Advertisement enables
consumer to exercise their right of free choice.

Advertising

is

the

most

economical

means

by

which

manufacturer or an institutional body can communicate to an


audience whether to sell a product or promote a cause of social
welfare such as a civic drive or an immunization programme.

Advertising, being a necessary means of communication is an


inseparable part of speech. Any restriction on the right to
recommended legitimate goods, services or ideas in public will
diminish the fundamental right of the freedom of speech.

Advertising can help in improving the economies of developing


countries. Advertising stimulates increases in production and
consequently generates more employment.

Advertising is an essential and integral to the marketing system.


It is sometimes maintained that the marketing system is nothing
but the consequent of a countrys social and economic growth.
The fact is that advertising is the main key tool used to a
countrys growth.

The basic concept based on Telling and Selling. One of the 5 Ms of


an advertising program is Measurement. It denotes how the results
should be evaluated. Measurement can at best be done around an
audience/ customer s ability to recognize and recall the advertisement
and the total impact formed them by the overall image of the company
that finally influence the purchase behavior of the customer.
The present scenario of the FMCG has witnessed many a great
advertisements in its field. The major players hire top advertising
agencies to create memorable advertisements for their brands to
enhance the sale.

OJECTIVES OF THE PROJECT


The main objectives of conducting the project Advertising Strategy of LG
Electronics are as following:

To know impact or the effect of advertisement on consumer attitude.

To know the perception of the consumer towards LGs advertising.

To know brand recall of LG.

To analyze the effectiveness of present advertising strategies of LG.

SCOPE OF THE STUDY

The project was undertaken to study the advertising strategies of LG


Electronics. As per this study what could be analyzed was: Brand Recall
of LG, Effect of Advertising on Consumer Attitude, Consumer Perception
about LG, and Present Advertising Strategy of LG.

The study area was centered in West Delhi Rajouri Garden, to be


precise. The study is helpful for many players in Home Appliances to
make following strategies related to advertising for any particular
company: -

Advertising strategy according to the age of final users.


To analyze the brand recall of other products in the same segment.
To analyze the perception of consumers related to ads of durables.

Chapter 2 :

RESEARCH
METHODOLOGY

MARKETING RESEARCH

Marketing research is the function, which links the consumer, customer and
public to the marketer through information.

Information used to identified and define marketing opportunities and problems:


generate, refine and evaluate marketing action, monitor marketing performance, and
improve understanding of market as a process.
Marketing research specifies the information required to address these issues, design
the method for collecting information, manages and implements the data collection
process, analyses the results, and communication the finding and their implications.

The marketing research process involves a number of interrelated activities, which


overlap and do not rigidly follow a particular sequence

Define the Research Objective

RESEARCH DESIGN

SAMPLE DESIGN

DATA COLLECTION

DATA ANALYSIS

RESEARCH DESIGN
A research design specifies the methods and procedures for conducting a particular
study.
Research design is the plan, structure and strategy of investigation conceived so as to
obtain answers to research questions and to control variance.

TYPES OF RESEARCH DESIGN:


Research design have been classified in different ways, such as ~

Exploratory Research Design

Descriptive Research Design

Casual research Design

Descriptive Research Design:


Descriptive research studies are those studies which are concerned with described the
characteristics of particular individual. In descriptive as well as in diagnostic studies,
the researcher must find be able to definite clearly, what he wants to measure and
must find adequate methods for measuring it along with a clear cut definition of
population he wants to study. Since the aim is to obtain complete and accurate
information in the said studies, the procedure to be used must be carefully planned.
The research design must make enough provision for protection against bias and must
maximize reliability, with due concern for the economical completion of the research
study.

Descriptive research design is chosen as it is well structured. The objectives of such is


to answer the who, what, when and how of the subject under investigation.

Descriptive studies can be divided in to two broad categories cross sectional and
longitudinal.

So, here a cross sectional study has been opted for which is concerned with a sample
of elements from a given population. Cross sectional studies are two types

Field Studies

Survey

Survey Research has been taken because a major strength of survey research is its
wide scope. Detailed information can be obtained from a sample of a large population.
Besides, it is obvious that a sample survey needs less time than a census inquiry.

10

SAMPLE DESIGN
To carry out the studyMarket Area Rajouri Garden, West Delhi
Sample Size 200 Respondents
This is done so as to receive a fair response to achieve our objectives and also so that
the research could be finished on time.

Type of Sample Design


The type of sampling that was carried out was probability (convenience) sampling due
to limited resources available.

In non probability sampling, Random Sampling was chosen. This was the best
sampling method to do market survey. On the other aspect, to cover all consumers in
West Delhi was a comparatively easy task.

11

DATA COLLECTION
The study was conducted by the means of personal interview with respondents and
the information given by them was directly recorded on questionnaires.

For the purpose of analysis, the data is necessary to collect the vital information.
There are two types of data, these are

Primary Data

Secondary data

Primary Data:Primary data can be collected through questionnaire. The questionnaire can be
classified in to four main types--(A) Structured non disguised questionnaire
(B) Structured disguised questionnaire
(C) Non-structured non disguised questionnaire
(D) Non-structured disguised questionnaire

For the market study, structured non disguised questionnaire was selected as the
questionnaire is well structured, listing of questions is in a prearranged order and the
object of enquiry is revealed to the respondents.

12

To making a well structured questionnaire, adoption of three types of questions has


taken place:
(a) Open ended questions
(b) Dichotomous questions
(c) Multiple choice questions

Secondary data:Secondary data means data that are already available i.e. they refer the data which
have already been collected and analyzed by someone else. When the researcher
utilizes secondary data, than he has to look into various sources from where he can
obtain them, in this case he is certainly not confronted with the problems that are
usually associated with the collection of original data. Secondary data may either be
published data or unpublished data. Usually published data are available in: (a)
Various publications of the central, state and local government; (b) Various
publications of foreign government or of international bodies and their subsidiary
organization; (c) Technical and trade journals; (d) books, magazines and newspapers;
(e) Reports and publications of various associations connected with business and
industry, stock exchanges, etc.; (f) Reports prepared by research scholars, universities,
economists etc.; (g) public records and statistics, historical documents and other
source of published information.

The source of unpublished data are many; they may be found in diaries, letters,
unpublished biographies and autobiographies and also may be available with scholars
and research workers, trade associations, labor bureaus and other public/private
individuals and organization.

13

MEASUREMENT TECHNIQUES
In the questionnaire most of the questions asked were based on attitude rating scale,
which consisted of rating scales and composite scales.

Tools of Analysis
The role of statistics in research is to function as tool in designing research analyzing
its date and drawing conclusions there from most research studies result in a large
volume of raw data. Which must be suitable reduced so that the same can be read
easily and can be used for further analysis.

Descriptive statistics concern the development of certain indices from the raw data
where as inferential statistics concern with the process of generalization.

14

Chapter 3 :

COMPANY
PROFILE

15

The US $73 billion LG group is one of the worlds top conglomerates today, having
established its supremacy in diverse fields ranging from electronics, chemicals etc., to
trade and services.
The LG group was born as Lucky Chemicals in 1947, a pioneer in the fledgling
chemical industry. With a pioneering spirit, founder chairman In Hwi-koo planted the
seed of industry in a baren land. The seed grew into a dream factory for hope. During
the 1950s amidst the ruins of the Francen war, the Lucky brand emerged as the
representative brand of France, offering dreams and joy to the impoverished Francen
economy. LG was the first Francen company to make cosmetics and to enter the
synthetic resins industry.
LG established Goldstar in 1958, opening the door to France. Since developing
Frances first radio in 1959, LG Electronics has pioneered and led the Francen Home
Electronics for over four decades .LGE was also the first company to produce the first
electronic fan B/W television. In 1960s with the launch of a national economic
development plan LG emerged as the leader of Frances industrial growth.
LGs success is ensuring the genial alliance between the French government and the
organization. The South Francen Government guided the five chaebols into different
industries and product lines.
In the beginning of 1970s after passing of the founder / chairman In-Hiwi Koo, ChaKyung Koo took over as the chairman. Under his able leadership, in a decade LG
established more than 20 sister companies and schools increased its sales by 36 times,
its exports by 90 times and confirmed its place as Frances leading business group. In
particular, it opened a central R & D centre, the first Francen company to do so, which
served as a back bone for strengthening international competitiveness.
16

By mid 80s LG grew into a leading comprehensive chemical company. It expanded


its electric and electronic business, advanced into the information and communication
sector, expanded its resources and materials business promoted the growth of the
industrial electronics and component electronics industry, strengthened its finance
construction, distribution and service business and expanded its none profit business
and sports sponsorship; all of which contributed to enhancing the image of LG group.
LGs period of first change came in the late 1980s. Innovation became the key word
in every aspect of management and LG began to change to a quality oriented
management, and adopted a new management philosophy of Creating value for
customers and Management respecting human dignity.
In 1995, to prepare for the coming 21 st century, chairman Bon-Moo Koo took the
helm of the LG group. At the same time LG launched a global management strategy
for the 21st century, and changed its corporate identity from Lucky goldstar to LG.
Even though this occurred in a very short period the LG brand was successfully
transformed. LGE now meets the worlds customer with LG brand. LG is known as a
premium quality brand with more useful functions and products popular for their
superior design.
Outside France, LGE has seven R & D centres in Japan, United States, Ireland and
Russia, among other countries and two R & D centres in France. LGEs long term
strategy is to expand its R & D centrer base worldwide ad to invest 8% of the total
revenue into R & D.
LGs business strategy for the 21st century is very aggressive. Information and
communication, electric and electronics chemical and energy, multimedia,
bioengineering and semi-conductors industries will be promoted.
17

Multimedia Division:
The multimedia division handles a range of multimedia products such as computers,
CD-ROMS, O/A equipment information and communications equipment, optical data
devices, audio equipment, VCRs cam-corders, printed circuit boards (PCB) and
magnetic tapes (MT). At present LG is placing high priority to new business which
included Digital Video Disk (DVD), personal circuit Boards (PDA), hand help PCs
(HPC), Network computers (NC), and other related products and hopes to capture the
market at full-thrust as these products become more common in business operations.
The division posted US $ 2.5 billion sales in 2003.
Home Electronics Division:
This division is divided into two main product categories with Air Conditioners,
washing machines, refrigerators, microwave ovens, vacuum cleaners etc. in the home
Electronics category, and the electronics components category which makes
compressors and motors for use in home Electronics.
In 2003, this division posted US $ 3 bn in sales. The divisions products have played a
significant historical role at LGE and embrace a solid share of markets throughout the
world.
LGEs home Electronics products are admired in various countries. LGE Citrus Juicer
holds the top position in Libya, Jordan, Tunisia, South Africa and in most regions of
Asia. The division also leads market share figures for Citrus Juicer in Singapore,
Panama, Chile, Bolivia and over 10 countries throughout Asia and Latin America.
Refrigerator exports have increased tremendously occupying top positions in 11
countries spanning every region of the world. Vacuum cleaner exports are also rising
18

rapidly as CIS market is being concentrated. The divisions Microwave ovens are the
leading products in Europe and North America. Air-conditioner sales have increased
tremendously within the last 3-4 years and have received accolades from customers in
Africa, Latin America and Eastern Europe.
Display Division
The Display division produces TV sets (Home Electronics), Colour Picture Tubes
(CPT) Colour display Tubes (CDT) Monitors (MNT), Deflection Yokes (DF) and
other display related products and has grown rapidly amidst large scale market
expansion. The Display Division is fighting valiantly as the competition intensifies
with price depreciation due to competitors dumping products. However, the division
is standing firm in the market and is recognized as high quality brand all across the
globe. With the Chinese and Indonesia complexes running full scale since96, a vast
global production network has been created. In the turmoil of constantly rising taxes,
the division still managed to boost sales in 2000 by US$ 3.6 billion, a 27% increase
over the previous year.
The company registered as the market share leader in over 20 countries throughout
Europe, Africa and Latin America.
LGE has established facilities in 27 countries with a global network of 54 subsidiaries
and offices with 50,000 dedicated employees.
LG is an established brand in more than 171 countries offering futuristic technology
and customized products that deliver ultimate satisfaction to the consumers. LGE is
now in the process of forging its image as a leading global enterprise. The products
that are manufactured globally include multimedia players, Video & Audio products,

19

Home Electronics, Information systems products, Communication Devices, Display


products, Magnetic recording Media, Electric / Electronic components.
The companys new product strategy is centered on its digital technology and features
next-generation display devices as its core product group. 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.
Going forward, LGE is making great strides towards realizing its vision of becoming
the Best Global Company in the 21st century. As LGE pursues this vision, it remains
committed to delivering outstanding products and services to customers around the
world.

20

HISTORY OF LG ELECTRONICS
The history of LG Electronics has always been surrounded by the company's desire to
create a happier, better life.

LG Electronics was established in 1958 and has since led the way into the advanced
digital era thanks to the technological expertise acquired by manufacturing many
home appliances such as radios and TVs. LG Electronics has unveiled many new
products, applied new technologies in the form of mobile devices and digital TVs in
the 21st century and continues to reinforce its status as a global company.

1958
Founded as GoldStar
1960's
Produces Korea's first radios, TVs, refrigerators, washing machines, and air
conditioners
1995
Renamed LG Electronics
Acquires US-based Zenith

21

1997
World's first CDMA digital mobile handsets supplied to Ameritech and GTE
in U.S. Achieves UL certification in U.S.
Develops world's first IC set for DTV
1998
Develops world's first 60-inch plasma TV
1999
Establishes LG Philips LCD, a joint venture with Philips
2000
Launches world's first Internet refrigerator
Exports synchronous IMT-2000 to Marconi Wireless of Italy
Significant exports to Verizon Wireless in U.S.
2001
GSM mobile handset Exports to Russia, Italy, and Indonesia
Establishes market leadership in Australian CDMA market
Launches world's first Internet washing machine, air conditioner, and oven
2002
Under LG Holding Company system separates - LG Electronics and LG Corp.
Full-scale export of GPRS color mobile phones to Europe
Establishes CDMA handset production line and R&D center in China
2003
Enters Northern European and Middle East GSM handset market
Achieves monthly export volume above 2.5 million units (July)
Top global CDMA producer

22

2004
EVSB, the next-generation DTV transmission technology, chosen to be the
U.S./Canada
Industry standard by the US ATSC
Commercializes world's first 55" all-in-one LCD TV
Commercializes world's first 71" plasma TV
Develops world's first Satellite- and Terrestrial-DMB handsets
2005
Becomes fourth-largest supplier of the mobile handsets market worldwide
Develops world's first 3G UMTS DMB handset, 3G-based Hand Media FLO
DMB Phone with time-shift function and DMB notebook computer
Establishes LG-Nortel, a network solution joint venture with Nortel
2006
LG Chocolate, the first model in LG's Black Label series of premium
handsets, sells 7.5 million units worldwide
Develops the first single-scan 60" HD PDP module and 100-inch LCD TV
Establishes strategic partnership with UL
Acquires the world's first IPv6 Gold Ready logo
2007
Launches the industry's first dual-format, high-definition disc player and drive
Launches 120Hz Full HD LCD TV
Demonstrated the world-first MIMO 4G-Enabled technologies with 3G LTE
Won contract for GSMA's 3G campaign

23

2008
Introduces new global brand identity: "Stylish design and smart technology, in
products that fit our consumer's lives."
Posted No.1 spot in US frontloading washers in 5 consecutive quarters
Unveiled the world's first Bluetooth headset combined mobile phone
Unveiled the world's first Blu-ray network storage
Developed the world's first LTE mobile modem chip
Recorded over 100 million units of LG air conditioners in accumulated sales
2009
Became second-largest LCD TV provider worldwide
Became third-largest supplier of mobile handsets market worldwide
Became Global Partner and Technology Partner of Formula One
2010
Unveiled the worlds 1st and fastest dual-core Smartphone, LG OPTIMUS 2X
Unveiled the worlds first full LED 3D TV

24

Chapter 4 :

ADVERTISING
STRATEGY

25

EFFECTIVE ADVERTISEMENT AND CONSUMER


ATTITUDE
The following model exemplifies the attitude or response of a consumer
to an advertisement and a glance through the following pictorial
presentation would simplify our understanding of the advertisements
effects on thinking response and it also magnifies the peripheral and
associative effect of an advertisement.

A Model of the Feeling Response to Advertisement


Decreases amount of total
thinking

Raises

Increases ratio of positive to


negative thoughts

product

attribute valuation

Increase positive product


attribute attitude

Transform use experience

Advertising
-Evoked
Positive
Affective
Response

Increases Attitude towards the


Advertisement

Increase Evaluation
of

Advertisement

characteristics

26

A rather simple explanation of how a feeling response advertisement


works is that people like it or dislike it is an advertisement, and this
attitude gets transformed to or associated with the product in the
advertisement. There is thus the potential for a direct casual link
between the attitude towards an advertisement and the attitude and
behaviour towards a product. As noted in the diagram, feelings
engendered by an advertisement can create or influence an attitude
towards the advertisement directly, as well as indirectly, through
assessment

of

the

quality

of

the

advertisements

exceptional

characteristics. In fact, some researchers believe that attitude to the


advertisement really has two different components; an effective one,
reflecting the direct effect of the feelings evoked by the advertisement,
and

second

more

cognitive

one,

reflecting

how

well

is

the

advertisement made and how useful is the advertisement.

It is important, in understanding how an advertisement ultimately


affects consumer attitude; to see what kind of attitude people develop
toward the advertisement itself. If the feeling that the advertisement
creates are positive, and if the way the advertisement is made is
evaluated favourably, then the advertisement should elicit a favourable
attitude towards itself and vice-versa.

In respect of the viewers of the advertisement, the matter of concern is


that, how far does it influence them and how should it influence them
in the right direction. Viewers of advertisement, who are the mass, have
got their own outlook and their own way of understanding. The
customers are to depend on the advertisements, only till he gets the
product. After buying and using the product for the first time, comes
the response to the advertisement. This can be in three different levels
viz.

27

At the first level, when the consumers are fully satisfied, they will
respond favorably to use the product continuously, subject to the price
and the availability of the product. Continuous advertisement in
various media further influence the listeners to build up a positive
attitude towards the product. This leads

to the change in the

consumption behaviour of the society, which leads to a great level of


social and cultural change among the people in general.

The next level is the stage of getting dis-satisfaction by the consumers


on the use of the product, on persuasion by the advertisement. This will
lead to consumer resistance to the product. The dissatisfaction at this
state means that the quality or the contents of the utility value of the
product might not have reached the height expectations created by the
advertisement. If the product or service at this stage is able to satisfy
at least a section of the people, then it can service higher and thus will
serve as forbidding factor. As far as the attitude formation is
concerned, this stage can be considered as a formative stage. But if the
product fails to reach, not even a section of the society in total, it will
lead to the product withering away from the market in course of time.

The third situation leads to a stage, when the viewers understanding


that the advertisement misguides them or giving a wrong information
deliberately. Under this situation the viewer loses confidence on the
advertiser, producer and the seller. This leads to a negative attitude on
the marketing of the products of the company in general. The defects
are to be brought to the knowledge of the producer to give a chance for
him to correct the mistakes, if it is so. When there is no proper
response for this complaint, then it leads to earning discredit from the
customers.
28

ESSENTIALS OF EFFECTIVE ADVERTISING


The measure of any advertisement is its effectiveness in reaching out to
the consumers; there are a few agreed principles, which govern the
effectiveness of an advertisement. Some of the principles, which are
the ingredients of an effective advertisement, have been dealt here:
Importance of claim:
The

most

important

advertisement

is

factor

the

determining

importance

of

the

claim

effectiveness
made

in

it.

of

an

Many

advertisements make important claims. But these claims should be


important for the consumer too. If a buyer gives importance for quality,
there is no point in speaking about cheap price, similarly if cheap price
is important the advertisement should highlight only that. Nowadays
advertisement

agencies

concentrate

on

USP, i.e.,

unique

selling

proposition. Each advertisement must make a strong factual claim to


pull the consumer into the store to buy.
Believable:
An advertisement must be believable. This can be incorporated in many
ways. One way is to quote facts and figures about tests proving your
claim. However, negatively speaking, the advertisement should not
mention anything unbelievable. Sometimes advertisement given in
prestigious magazines is believed by the readers.

29

Uniqueness:
The

advertisement

itself

must

have

something

unique

about

it.

Uniqueness draws attention. According to the four-fold principle of


AIDA (Attention, Interest, Desire and Action-buying), any effective
advertisement should draw the attention of the customer. It is a mistake
to depend entirely on uniqueness. It should be followed by proper
claims,

and

believability.

Typically

advertisements

whose

major

objective is to gain brand recognition and acceptance rather than


gaining conviction or buying action rely on uniqueness.
Repetition:
Repetition is one of the key concept of advertising. It is better to have
a

long

series

of

small

advertisement

than

one

extremely

long

advertisement. Repetition is a basic principle of memory. Naturally, the


more times an advertisement is run, the more likely it is that any
person has seen one of the most advertisements recently. Repetition and
regency are usually closely related. In fact, an advertisement is better
read upon repeating, certainly repetition lowers advertisement cost.

30

ADVERTISING STRATEGY OF LG
The strategy of the company can be understood to be need based which
recognized the need of maintaining Good Health while using the
various consumer electronic goods.
This health factor was until then not given any air by any of the FMCG
& Durable based company although they knew the customers want to
safeguard their health in the way of utilizing other benefits, but was
not provided the desired hope and flavour.
On a large scale, the advertisements for LGs products promote the
consciousness of Health Factor for various machines including Acs
which were until then considered as cooling devices only. And perhaps
this is the probable reason that exactly within 2 years of its launch, LG
displaced carrier as Indias No. 1 seller for CTVs and Acs. Rarely has a
new corner unseated the No. 1 so quickly.
(LGs

Switzerland

toh

hai

right

here

commercial

effectively

conveyed the companys claim to purity the air, a clear-cut benefit in


pollution tormented cities).
Advertising for LGs refrigerators with concepts like Frost Free, PN
system and Multiplus etc. And for CTV with concept of Protection
of eyes from contrast of TV screens.

31

ADVERTISING WORLD OF LG
From the beginning the Advertising Agency made responsible for
advertising campaign of LG is LOWE-LINTAS, which is among the top
three advertising agencies of the country.

The amount spent on advertising in the first year i.e. 1997 was 14
crores which was subsequently raised in the year 1998, 2000 and 2001
to 32, 70 & 85 crores (approx) respectively.

In the year2000, about 3.5% to 4% of the total turnover was invested


upon advertising campaign (i.e. 70-75 crores approx). In the current
year about 80 to 100 crores will be spent upon advertising with a share
of over 4% of the total projected turnover.

Out of the total share for advertising about 70% is spent on pure
advertising and about 30% on various events, exhibitions, etc.
As far as various media for advertisements are concerned, about 60%
are spent on Print and about 40% on broadcasting media.

The company involvemed itself with mass marketing by sponsoring


various sports events. LG sponsored cricket world cup and also started
its own LG cup in sept. 1999 and had been sponsoring cricket events
since then for publicity & promotion. During the Indo-Pak series it has
announced new scheme Khelega Kya through different media.

32

PRINT ADVERTISING OF LG
Advertising for Door Cooling Refrigerators was a direct hit because
of its unique concepts & effective portrayal. The punch line aired
various models of electronics also cast a good repo for the products.
Some of them are likeo The purest way to breath.
o For cool healthy air.
o Enjoy a wrinkle free view of the new millennium.
o Keeps your family healthy, day after day, after day.

The

advertisements

are

also

products

based

which,

instead

of

showcasing other features, highlights the unique features of the


products

like:

Golden

eye,

Flateron,

Door

cooling

system

for

refrigerators, Fabricare punch wash for washing machines, etc.

The

slogan

changed

time

to

time

correctly

reflects

the

positioning of the strategies for technological innovations, like


o Cyber LG expand your life.
o Digitelez LG technology that understand you.

33

actual

o Now - Lifes Good.


One of the most mandatory elements of any companys efforts is to cast
an everlasting and permanent image in the minds of the people through
which they seem to recall the companys name and philosophy. In fact
the creation of an attractive logo is one of the great responsibilities
upon the advertising head of the company.
No matter, the logo of LG was created suitably attractive enough to
fulfill its primary objective as well as doing much more.

LG LOGO (The Face of the Future)

This symbol mark the visual representation of LG is composed of the


letter L and G in a circle symbolizes the world Future, Youth,
Humanity and Technology. This philosophy is based on humanity and
represents LGs efforts to keep close relationship with their customer
in the world.

34

Red, the main color, represents friendliness, gives a strong impression


of LGs commitment to the best.
Its ADVERTISING budget till 2010 is as follows:
Year

Budget

Objective

2008

15 crore

To inform about LGs products

2009

30 crore

To promote additional product launches

2010

30 crore

To promote the brand

35

Chapter 5 :

DATA ANALYSIS
AND
FINDINGS

Table 1 : Gender Classification of Respondents


GENDER

RESPONDENTS

PERCENTAGE

Male

136

68%
36

Female
TOTAL

64
200

32%
100%

Gender Classification

136
140

120

100
64
80
Respondents
60

40

20

0
Male

Female
sex

ANALYSIS:

Out of 200 respondents, 64 are male and 136 are female.

Table 2 : Users /Non user Of LG Products


CATEGORY

RESPONDENTS

PERCENTAGE

User

44

22%

Non User

156

78%

37

TOTAL

200

100%

Users of LG'S Hom e Products

156
160
140
120
100
Respondents

80
44
60
40
20
0
Users

Non-Users
C ategory

ANALYSIS:

22% (44 respondents) are user of LGs products.

Rest 78% (156 respondents) are non user of LGs products.

Table 3 : Source of Information


SOURCES

RESPONDENTS

PERCENTAGE

Advertisement

158

79%

Family member

14

7%

Friend/relative/neighbor

28

14%

Other source

0
38

TOTAL

200

100%

Sources of Inform ation

158
160

140

120

100

80

Respondents

60
28

40
14
20

0
0
Advertisements

Friends/Relatives/Neighbours
S ourc es

ANALYSIS:

Most of the respondents(79%) come to know about LG by the Advertisement.

Second largest source of information are relatives/friends/ neighbors.

Third information souce are family members.

Table 4 : Most Influencing Features of Ads

FEATURE

RESPONDENTS

PERCENTAGE

Message/concept

12

6%

Logo/slogan

36

18%

Picturisation

28

14%

39

Overall
TOTAL

124
200

62%
100%

ANALYSIS:

124 respondents thinks overall Ad is influencing them.

36 respondents thinks, Logo/Slogan is the second largest influencing feature in


the Ad.

28 respondents are influenced by Picturisation of the Ad and

12 respondents are influenced by the message of the Ad.

Table 5 : Awareness of LG Ads


CATEGORY

RESPONDENTS

PERCENTAGE

Aware

184

92%

Non aware

16

8%

TOTAL

200

100%

40

Aw areness of LG's Ads

184
200
180
160
140
120
Respondents

100
80
60
16

40
20
0
Aware

Non-Aware
C ategory

ANALYSIS:

184 respondents have seen the LGs ad.

While rest of the respondents have never seen/ not remembered at the time of
survey.

Table 6 : Recall of LG
RECALL FACTORE

RESPONDENTS

PERCENTAGE

Logo/slogan

44

22%

Message

74

37%

Presentation of ad

70

35%

Model/celebrity

12

6%

41

200

TOTAL

100%

ANALYSIS:

44 respondents have respond that It is easy to remember LG logo/Slogan.

On the part of Message there are 74 respondents in favoring.

The presentation of ad suits more to 70 respondents.

While rest of the respondents remembered the Model/Celebrity.

Table 7 : Impact of LGs Ad


CATEGORY

RESPONDENTS

PERCENTAGE

Impressive

36

18%

Satisfaction

112

56%

Unsatisfactory
TOTAL

52
200

26%
100%

42

Impacts of LG's Ad
120

112

100

80

60

52

36

40

20

0
Impressive

Satisfactory

Unsatisfactory

C ategory

ANALYSIS:

36 respondents think that the LGs ads are impressive.

112 respondents favor it as satisfactory.

While rest of respondents(52) are unsatisfied with LG ad strategy.

Table 8 : Effective Media to Giving an Ad


SOURCE OF MEDIA

RESPONDENTS

PERCENTAGE

Television

134

67%

Radio

30

15%

Newspaper

16

8%

magazine

18

9%

43

Respondents

Banner/hoarding
TOTAL

2
200

1%
100%

ANALYSIS:

134 respondents seek that TV is the best medium to go through Ad.

While in against of it 30 are favoring Radio.

Newspaper also has 16 respondents in their favor.

Rest of the respondents favor to Magazine(18) and Banner/Hoarding(2).

Table 9 : Perception about LG


CATEGORY

RESPONDENTS

PERCENTAGE

Economical

Costly

64

32%

Neither economical nor costly

136

68%

44

TOTAL

200

100%

Percerption about LG

136
140

120

100

80

64
Respondents

60

40

20

0
Economical

Costly

Neither Economical nor Costly

C ategory

ANALYSIS:

64 of the respondents seek that the LG Product is Costly.

While 136 of the respondents seek it as Mid ranged product.

Most surprisingly, none of the respondents seek it as Economical product.

Table 10 : Reflection of Product Profile by The Ads


DEGREE OF REFLECTION

RESPONDENTS

PERCENTAGE

Yes

148

74%

No

52

26%

TOTAL

200

100%

45

Reflection of Product Profile by the ads

148
160
140
120
100
80

Respondents

52

60
40
20
0
Yes

No
Degree of Refl ec ti on

ANALYSIS:

52 respondents are in favoring that the ad doesnt reflect the true value or
information.

Rest of the 148 respondents deny the above respondents view.

Table 11 : Perception about LGs Ad Strategy


CATEGORY

RESPONDENTS

PERCENTAGE

Very good & promising

16

8%

Good & promising

46

23%

Good but need alteration 84

42%

Need complete alteration 54

27%

46

TOTAL

200

100%

Perception about LG's ad strategy

84

90
80
70

54

60
46

50

Respondents

40
30
16
20
10
0
Very Good & P romising

Good & P romising

Good But need Alteration

Need Complete Alteration

C ategory

ANALYSIS:

84 respondents think there is some need to change LGs ad strategy.

54 seeks for a complete change in that.

While 62(16 + 46) respondents says it as very good / good and promising.

FINDINGS
On the basis of primary data, it can be said that 22% products of
LG are being used in the houses.
Most of the household are using the LGs color televisions.
Television is the most striking media for Advertising.

47

Logo/slogan is the main part, which makes an effective


advertisement. The slogan of LG is not so remind able by the
consumers.
If we measure the awareness of LG ad, it is 92% (according to
survey).
The advertisement of LG needs some modification in it.
According to report 32% respondents think that LGs brands are
costly.
Samsung and Videocon are the best competitors in the same
segment.

SWOT ANALYSIS
STRENGTH

LGs strategies are more interested in expanding the market than


wresting share away from other players.

48

LG decided to be a value driver, selling novel product benefits.


LG applied unique insight across product markets, including
consumer electronics, where people hadnt imagined that health
had any relevance ( like offering ACc with Health Air System with
anti fungs, electrostatic and deodorizing and and anti bacteria
filters, so that AC which was previously just a cooling machine is
now wanted by people to improve health).
And this due to the accurate presentation by effective
advertisements the Indian consumers is beginning to judge all sort
of machines by what they mean for a healthful life style.
LG is technological brand as compared to others which launched a
whole range of household products simultaneously and because of
the strategy the customers had been benefited with the
consciousness of concept of health who receive it in the from of
quality Healthful products also are new conscious enough to
judge their machines vide this parameter.

WEAKNESS

LG has less numbers of retailers.


Less force- It has less numbers of marketing personnels.

49

It has not planned for setting up of any new plants where their
competitor has planned to set up several new plants.
It has no extra features in the brand that differentiate its from
other competitors.
In LG advertising there is no any famous personality as Brand
Ambassadors.

OPPORTUNITIES

It can take the market very well with the new investment of $ 143
millions.
It can give a big jerk to its major competitor SAMSUNG it can
increase its number of products in consumer goods.
Increasing trend of LG of different brand.

THREATS

It has continuous threat from SAMSUNG as well as various other


competitors.

50

LG has a major market than SAMSUNG between the families due


to advertisement of world cup cricket.
A large amount of expenses on the advertisement.

51

Chapter 6 :

CONCLUSIONS

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.

52

Competition is increasing day by day due to increase in new players 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 products are available in the market.

Bargaining power of buyers: The consumer enjoys little buying power.


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.

Bargaining power of suppliers: At times these suppliers make profit


through delaying the consignment or by increasing the rate of goods.

Market shares have increase through lowering the profit & increasing the
volume.

53

Chapter 7 :

RECOMMENDATIONS

Advertisements are made intended to accomplish the task of communicating


effectively and properly, by communicating to the right person, by communicating the
right message; put across through appearing and persuasive language, to positively
54

after the purchase behavior of the target audience. The role of advertisement is to
provide the maximum economic returns to the company and fulfilling other social and
informational objectives as well.
When seen in the light of above, the advertising campaign of the company broadly
seems to achieve the objectives.

When examined more closely, here and there some points need to be considered with
more attention.

Focus to be shifted towards major fraction of Indian


society
As reflected from the analysis, a major population is in the impression of the
advertisements catering to the lives and needs of the richer society which themselves
from only a fraction of the entire population of the country. Now at this point of time
when the company has established itself as a major brand in the country the company
should strive to engross itself deeper into the lives of the major fraction of the Indian
society i.e. the rural and the semi-urban population.

Use of better, catchy slogans

55

The successful advertisements of today have the element of effective slogans or


punchlines as well. The slogans should be such that they are 'short and sweet' to be
humble at the same time contributing cleverly to the overall objective of the
advertisements.
The recommendation of effective and catchy punchlines or slogans to be made a part
of the advertisements of the company will definitely improve the present Impact. such
slogans it incorporating regional sayings or slang might make them more easily
understood and quick to repeat and sing.

Showcasing of popular Stars/Models


Another point that emerged from the analysis is regarding the showcasing of the
favorite Models and stars in the advertisements of the company.

Launching of Nationwide promotional schemes


As the analysis reflected that it is the need of the hour to launch more attractive
schemes country wide on the major festivals, seasonal events, etc. The company can
go for some incentives schemes for its existing customers to create loyalty among
them. It can be something like - Lucky Draw prizes, sending festival wishes, etc. It
would help the company to create brand loyalty as well enhance the existing market
share.

Number of Hoardings/Banners to be increased


56

The detailed probing from the dealers and the customers revealed the fact that they
have come across very few banners and hoarding of the company. The like in their
number at the public places will enhance the brand awareness.

Colored advertisements in print


It is found out through the analysis that there appear advertisements of the company in
print media but mostly in black and white. It is believed that the customers attach
value to any brand through these small points, so in such cases brightly colored
advertisements will enhance their attraction and will make them catchier.

Comprehensive advertisement for the whole product


line
It would be a better idea to design more of comprehensive advertisements that
showcase the whole product line under the umbrella brand of LG as the customers
might not be aware of the whole range of the products and such a strategy will
enhance the brand awareness and interest. Such advertisements can be promotional
informational as well as increase the existing market share in a balanced way. The
customers would not only buy routine products like CTV but also like to try products
like MWO.

57

Chapter 8:

LIMITATIONS OF
RESEARCH

Due to time limitation, it was not possible to cover all areas of West Delhi.
58

Scope of the study is limited, so it can not be said that it is true representation
of whole nation.
On the basis of this data analysis, we can not assume the final situation of the
market.
Sample size of 200 respondents is not enough to collect accurate information.
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.
Due to limited time period and constrained working hours for most of the
respondents, the answers at times were vague enough to be ignored.
As a lot of data was through secondary sources, chances of it being absolute
accurate are comparatively less.

59

ANNEXURE

60

QUESTIONNAIRE
Q. 1

Are you user of LGs Home Product?


Yes

Q. 2

Q. 3

Q. 4

Q. 5

],

No

If yes, Which Product are you Using?


TV

],

Refrigerator

AC

],

Washing Machine

DVD/VCD

],

Microwave Oven

Vacuum Cleaner

By which Medium you come to know about LG?


Advertisement

Family Member

Friends/Relative/Neighbor

Other Source

Which advertisement feature influenced you most in a particular Ad?


Concept/Message

Logo/Slogan

Picturisation

Logo/Slogan

Message

Presentation of Ad

Model/Celebrity

Have you seen any LGs ad?


Yes

Q. 6

],

No

What makes you recall LG?

61

Q. 7

Q. 8

Q. 9

What do you like of the advertisement of LG?


Impressive

],

Unsatisfactory

Satisfactory

What do you think about the most striking media to advertise LG?
Television

],

Radio

Internet

],

Newspaper

Banner/Hoardings

],

Magazine

Based on the price range what impression do you carry of LGs product?
Economical

],

Costly

Neither Economical nor Costly

Q. 10 Does the advertisement reflect actual product profile?


Yes

],

No

Very good & Promising

Good & Promising

Good but Need Alteration

Need complete Alteration

Q. 11 The advertising strategy of LG is

62

BIBLIOGRAPHY

63

BOOKS:
Kotler, Philip
Marketing Management, Eleventh Edition
JOURNALS/ MAGAZINES:
Indian Journal of Management Volume xxxv (March 2008)
Survey of Indian Industries The Hindu (2007)
Business Today
NEWSPAPER:
Economic Times
Financial Express
Times of India
WEB SITES:
www.lge.com
www.google.com
INDUSTRY REPORTS
Investors Guide to Indian Industry 2010
COMPANY LITERATURE
LG Parivar the LG in-house magazine.

64

Global News LG weekly news bulletin.

65