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SEMINAR- REPORT

MARKETING STRATEGIES OF LG

Submitted By: ARUN V


137W1E00B0
MBA II year
SMIC

Faculty:

Head of Department:

INTRODUCTION
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 the home Electronicsin
France. Since developing Frances first radio in 1959, LG Electronics has pioneered
and led the Francen Home Electronicsfor 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 Francen
industrial growth.
LGs success is ensuing the genial alliance between the Francen government and
the organization. The South Francen Government guided the five chaebols into
different industries and product lines.
In the the beginning of 1970s after passing of the founder / chairman In-Hiwi Koo,
Cha-Kyung 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.
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

Organization Structure
Traditionally LG was primarily a marketing driven company and HR department
which was earlier dominant has gained importance over the last 2 years. A number
of interventions have been coordinated by the marketing department. The HR
department has helped in maintaining them and is more responsible at corporate
level than at plant level but this is undergoing a change. The HR dept. has a
conveyor chain setup.
V.P. (HR)

D.G.M. (HRM)

(Senior Personnel Manager Plants)

Senior Personnel Manager (Sales & Marketing)


.

LGs 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.

LG Objectives
Achieve gross sales of US$78 billion.
Secure ordinary income of 6 percent of gross sales.
Attain a return on investment of 15 percent.
Build a brand reputation for total satisfaction.
Create more comfortable, convenient homes electronics companies .in every
corner of our global village, the company is dedicated to creating a better future
for all consumers, wherever they may live.

LGE plans to build DIGITAL 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.
LGs RESEARCH & DEVELOPMENT
LGE has established facilities in 27 countries with a global network of 54 subsidiaries
and offices with 50,000 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. More than 6% of the total revenues are spent on R & D every
year. By the year 2013 at least 8% the total revenue will be put back into
research and development.
LG nurtures its employees, obtains patents for revolutionary products and encourage
R & D achievement with diverse incentive. Its 13 domestic labs including the LG
production Engineering research centre and our 10 overseas laboratories are doing
their at most in basic technology, manufacturing skills, quality, performance,
standardization and design. With the company internal campaign for quality
innovation, LGE is gunning for global leadership in digital technology. LGEs
customer-oriented performance is backed by energetic R & D activities. 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
LG-R&D Vision:
1. Focus on performance maximization based on market leading R & D
2. Create global leading products
3. Secure technological identity to lead the growth of LGE

Innovation at LG
At LG innovation is a policy. The managements pet phrases are TPI 50 and TDR.
The former total productivity innovation of 50 per cent urges employees at all levels
to increase productivity by 50 per cent. And the latter is the tool that helps to do that
Tear down Re-engineering, by which employees, especially at the assembly line, is
directed to tear down all processes to the ground and start afresh by using less tine,
more innovative technique and so on. In this manner, 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.
Engineers at LG dont say no to any idea. If the company has to compete in the long
run, it cannot do so by merely cutting costs. It is innovation that wins the race even in
a market as budget constrained as India.
Performance Review
LG electronic India Pvt. Ltd., has in a very short span of six months achieved a
turnover of Rs. 400 crores which is a breakthrough in the Electronic industry. The
performance achieved in LGs financial projection was commendable as it reached
the first Rs. 50 crores in first 1.5 month as against its initial target of 100 crores in 12
months meeting its annual targets in just 6 months.
In the year 2013-14, LGEIL has achieved a turnover of Rs. 800 crores against a
projected Rs. 400 crores. In the first year of operation in India LG has achieved the
number one position in the 440 watts Mixer Grinder in the 300 lit and above category
and Neuro-Fuzzy segment washing machine. In the Home Electronics segment LG
is No.6. Moreover it has launched world class state of the art technologies as PN
system and refrigerators, Golden eye series of Home Electronics, chaos technology
in Citrus Juicer and Air conditioners.
At the end of March 2014, the company had secured a market share, above 68% in
Home Electronics 43% in 300 ltrs No. frost refrigerator, and 35% in Neuro Fuzzy
washing Machines. This was by far one of the most impressive performances any
company had in its first year of operation.
In 2014, its first complete year of operation in India, it sold products worth Rs. 677
crore. The company for the period Jan-June2013, has recorded a turnover of Rs.
500 crores. Last year in the same period the turnover was only 200 crores. This is a
whopping growth of approximately 150%. Only Crompton and Bajaj groups have
more turnover than LG in home Electronics and Home Electronics industry in this
period.

S.W.O.T. ANALYSIS OF THE ORGANIZATION


Strengths

Premium pricing, no discounts

Focus on technology and quality

Strong commitment from parent

In house manufacturing capability

Products localized to suite Indian tastes

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

Threats

Way behind market leader

Stagnant urban deman

MARKETING STRATEGY
In a short span of just 26 months, since its inception in May 2010, 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, entering the
Indian market meant establishing itself in a different market altogether with varied
culture and consumer tastes and preferences. Also that so many multinationals are
sweeping into the country, it is evident that each and every company has a cutting

edge over another. These global corporations are deviating from their
international methodologies and improvising their strategies for local markets.
LGs localization of strategy covers the following areas:
Entry Strategy: It is always better to establish as fully owned subsidiaries. It is
considered better if the company has a local partner but, since LGs earlier two
attempts had already failed, it decided to do it all alone this time. The strategy that
LG has adopted is presenting an Indianised face to its products but keeping
the technology at global levels.
Operations: LG opted for starting its own manufacturing facility at Greater Noida.
The 20 month schedule to commission its manufacturing plant was compressed to
10 months. The company decided to go in for a green field project rather than
acquisitions or mergers. (For all products except refrigerators).
Products: LG decided to go in for Product Adaptation Strategy. Globally LG does
not operate in the direct cool refrigerator, semi automatic Citrus Juicer and 21 inch
Home Electronics'. 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.
Also LG launched, sampoorna, India's first TV with a devangiri script on screen
display on the 50th anniversary of Indian independence. LGs strategy of localizing its
products to suit Indian tastes added to its strength.
Segmentation: The Company decided to enter the high end middle-class onward
segment in the initial stages, since most of the Indian brands were targeting the low
and middle end customers. In the past 3 years due to LGs distinct strategy it has
carved a niche for itself in a crowded segment of 20 manufacturers.
Brand: The company launched its products in country with LG, the global leader . It
did not opt for any established brands in the country to be associated with it.
Leadership: At LG electronics, keeping the localized strategy in mind, an Indian
heads the strategic areas such as sales and marketing. Generally it happens that the
senior management is deprived of Indians in a transnational but LG did to want to
follow this path, it wanted that the marketing division be headed by an Indian
because he would be versed of the Indian market and cultures. Ultimately it is this,
which determined whether the company wants to make profits or obtain a market
share. LG definitely wants to be the leader in the home Electronics industry. Seeing
the progress that the company has made in the past 3 years, it has revised its plans
for becoming the number one home Electronics Company to the year 2013 from
2014. The company even plans to break even this year. By the year 2014 its
turnover in India will comprise nearly 2 per cent of its global turnover. This is
significant for a multinational that has been in the market for just two years.

Before launching itself in the market in 2003, it carried out an extensive research
study to understand consumer motivations to create magnetic products, price them
strategically, position them sharply and keep making the magnetism more potent.
Having understood the finer differences in consumer motivations, it opted for sharp
arrow reason to buy differentiation over the blanket all-approach (category wise)
taken by most of the other players.

MARKETING

THE SEGMENT

THE PRODUCT

THE BRAND

Niche/ Mass

Top-of-line / Mass
Market

Global

Premium/ midrange?

Grown
THE PRICE
Premium / Economy

ALLIANCE

ENTRY STRATEGY

LEADERSHIP

Fully-owned

Greenfield

Indian

OPERATIONS

THE BUSINESS MODEL

LGs Globalization strategy for India

INVESTMENT
Incremental
BOTTOMLINE
OBJECTIVE
Market share

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)

Within the first 4.5 months the company went all-India. As the company business
began to rise, LG introduced the following products to expand its product portfolio:

Air conditioners

550 watts refrigerator

Semi automatic Citrus Juicer

Microwave ovens.

In a broad perspective, LGs sales and marketing success can be attributed to its7
Ps of marketing. In addition to the products, price, place and promotion, the key
factors that have contributed to LGs success are the following 3 additional Ps:

Pace, 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 Ps.
However LGs Marketing Strategy is based on 3 Ps , apart from the conventional 4
Ps of marketing :

Premium pricing to maintain margins

Breathtaking Pace to create riches

Deep Penetration to increase volumes.

Premium Pricing: LG electronics was one of the late entrants, the 18 th player.
While other companies were jostling to play the low price high volumes game, LG
decided to concentrate on the high end of all the product segments.
The maximum price of a Home Electronics was Rs. 21,000 for a 21inch model, was
10 per cent higher than Sonys prices. Since most of the competitors were catering
to the lower and middle segments, LG decided to concentrate on the premium
segments.
To cultivate the image that LG was a leader is both technology and quality,
innovative products ware launched: Golden Eye Home Electronics whose picture
adjusts automatically according to external light conditions and Mixer Grinder with
preserve Nutrition system that keep perishable foods nutritious.
Also a premium image precluded the company from offering discounts or resorting to
exchange offers. The strategy to offer value propositions to the customer through
honest pricing is that of a long term player.
Any ways, LGs 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. The 20-month schedule to commission its manufacturing plant was
compressed to 10 months. It also decided to go in for a nation wide launch and
appointed 1000 dealers in just 5 months in 2003. Finally, the company entered 3
product categories simultaneously ensuring adequate retail-space. 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.
However, to keep pace with the competitive market place it will have to launch
models with innovative features at regular intervals. For e.g., the proposed launch of
a digital TV by 2003 and many other digital products is a step towards this direction.
Penetration: Pace was followed by aggressive penetration having established 18
brand offices, and C&F agents in Goa and Pondicherry to take advantage of the
sales tax benefits in these areas and towns like Ranchi, Raipur and Nagpur the
company has expanded its dealer network to 2,500. By the end of this year, this will
rise to 2500 dealers. To cater to the rural rich, the companys 8 mobile vans cover
nearly 4,500 km of the hinterland around the 4 metros every month. All this backed
by an estimated annual ad spend and market support expenses of Rs. 28 crore in
2003.
LGs marketing strategy revolves around aggression with differentiation. LGs
products are differentiated as superior technology products.
LG believes in Value Marketing. It is exactly opposite of what Akai Stands for. Akai
is pushing volumes by sacrificing value. On the other hand LG is sacrificing volume
for value. 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
excessively self-centric companies. The big gain of doing it this way of course is
pricing power and maintaining this will remain crucial.

Product positioning
The Unique Selling Proposition (USP) is based on health.
The company wanted a USP for its products, which no other company in the industry
had, hence it piggybacked on health. This is a niche which none of the other
companys had thought of. Each of its product lines were positioned based on health:

LCD, LED, Plasma Television

Mixer Grinder PN system (preserve nutrition system)

Air conditioners Health Air ACs

Citrus Juicer Chaos Punch +3-Fabricare system

Microwave Over Health wave cooking system

Product Offerings & Related Strategies


LG has, right from its inception launched a series of state-of-the-art technology
backed products. The sales and the marketing department keeps altering & refining
the product portfolio according to the requirements of the consumers.
LG Electronics has the following product lines
i.

Colour televisions (LCD, LED, Plasma)

ii.

Refrigerators

iii.

Washing machines

iv.

Air conditioners

v.

Microwave ovens

vi.

VCD players

In every city, LG approached the best dealers but in a scheme-ridden market, it


refused to offer any schemes. It positioned itself as an ethical company. Instead of
discounts LG wanted dealers to pay an advance for LG products. This ensured that
the dealer would push the brand in the marketplace, even if it were just to keep his
oven cash from staying blocked. In the long run this created a pent-up demand for
the brand.

LG since its inception laid stress on Proper Channel Merchandising and


Management. Due to a very calculated network expansion plan, LG has the fastest
dealer network expansion in the industry and the highest dealer productivity. Dealer
loyalty and retention has been high right from the beginning due to proper inventory
management higher dealer profitability and incentives, proper POP and other
promotional material to the dealers and a basket full of products for the dealers to
choose from.
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. By using


appropriate positioning stance and appropriate media vehicles, strong concepts and
USPs were developed.
Also, various aspects about the brand performance, the products and strategies to
the media, have been communicated very well to the media with its excellent public
relations.
Today, LG stands as the No. 1 PR Company in the industry.

Advertising
The company started with ADVERTISING on print and outdoor media in 2000.
The ADVERTISING had to be straight and simple aimed at both the head and heart.

For e.g. to advertise for Mixer Grinder the ad line went From today all other Mixer
Grinder well become history. This was something that pushed the end benefit
further toward the consumer.
Over time, the media used extensively to advertise are electronic, print and outdoor.
It is 60% TV, 30% print and 10% outdoor. Also the company has also started with
web ADVERTISING over the site.
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. Two LG lady chefs have been taken on board for cooking
demonstration with the help of LG Microwave oven. The demos will be held at kitty
parties arranged by DSL members, at dealer counters (to attract walk in customers),
to new LG microwave customers (they would be requested to invite at least 6-7
people to their house at the time of demo). Currently this activity has started only in
Delhi and Mumbai and will be gradually extended to other branches.
Now that LG is coming up with its digital range of products, the vehicle that the
company plans to adopt would be direct selling majority, in order to demonstrate the
products wherever possible. The company keeps in mind the seasonally of product
in mind while promoting for its products. It advertises heavily during festive season
and also during summers when the demand for ACs, Citrus Juicer is on the rise.
Lintas is the ad agency handling the account.
Its ADVERTISING budget since 2014 is as follows:
Year

Budget

Objective

2014

30 crore

To inform about LGs products

2013

40 crore

To promote additional product launches

2012

52 crore

To promote the brand

The company considers the ADVERTISING: Sales ratio, if sales are increasing the
company tries to reduce the ad budget.
Of late LG has got more into corporate ADVERTISING i.e. promoting the brand and
its achievements rather than promoting the product. Even the ads seen on TV these
days, LG is trying to promote the brand and not the product. For e.g. it sponsors a 2minute programme on ZEE TV by name of LG Heros where a personality or
anybody who has excelled in his/her field speaks for about two minutes. The clipping
showing people who are successful has got significance with relation to LGs
success
- 15 -Customer Satisfaction at Lg Electronics

In todays world of business, the market place is a fierce battleground with national
and multinational companies striving to outsmart each other. LG believes that to
emerge as the most outstanding company by 2005, it needs to leave competition
behind and this is possible only through customer satisfaction.
Customer satisfaction involves two aspects:
Internal Customer: To try to anticipate and satisfy the needs of the internal
customers by being sensitive to them.
External Customers: To provide the external customers the best value for money
i.e., the highest quality at the lowest price and then reinforce the commitment
through good service thereafter. For e.g., the company has a different service policy.
It goes by the name of happy calls.
Immediately after purchase, 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.

Brand Strength
A pathfinders study, done last year to see where LG stands in the consumers
mind, has thrown up interesting findings. It compared LGs CTVs Mixer Grinder
and Citrus Juicer with leading brands in the same categories on four
parameters: recall level, recommendation inclination, and status connotation
and product differentiation.
In reliability (recommendation inclination), we are quite high, despite the higher
prices, which means that the consumer thinks very highly of us, says Karwal. On
knowledge (awareness), we are slightly low. After all, in 2002, our turnover of Rs.
125 crore were less than the ADVERTISING spend of Bajaj and BPL. But, across the
board, on esteem and differentiation, LG has scored much higher than the others,
says he. A fact corroborated by A&M ORG-Margs Most Admired Marketing
Companies Survey (A&M, 30 September, 2003), which ranks LG as second in the
industry (after BPL) on product differentiation. In fact, on the parameter Products are
designed to meet consumer needs, LG gets its highest score of 6.66. The same
survey also ranks LG pretty low on distribution (No.31), but even so, it is higher than
Samsung and National Panasonic. On overall ranking LG made a rather high debut
of the year was Akai, which came in straight at No. 8 on the list of admired durables
companies.
Clearly, LGs brand building efforts have had exemplary success. What the
company needs to do is capitalize on it.

Conclusions
(I) Based on Marketing: It is no doubt about the fact that LG is considered to be A
huge marketing success. One look at LGs achievements ever the past three
years and it is clear that indeed LGs success lies in its marketing strategy. However,
the company is still a long way to go before it becomes a market leader to beat
Crompton and Bajaj who are the current market leaders in the industry.
(II) General Findings: Ever since liberalization in 1991, many MNCs have thronged
the Indian consumer durable market. Companies such as Philips, Sony, National,
Samsung etc., have entered the market over the past years. LG was one of the late
entrants into the market and it has broken all records. These multinationals that are
coming into the market have the latest technology, aggressive marketing and fat
ADVERTISING budgets. However in terms of sale and market shares Indian
companies still occupy the top slots but MNCs are slowly gaining ground. LG is one
company that plans to become No.1 in this industry by the year 2014. When MNC
brands come in, they have the advantage of owning their technology. Indian brands
face problems when it comes to additional features because they have to buy from
other sources and this makes their products move expensive vis--vis the MNC
brand.
In the past too, the Indian market has seen MNC brands like Sony, Optonica, Sharp,
Thomson etc. but none of these companies have performed well. Reason being that
these brands could not establish themselves hence there were no lasting
impressions. Now, the trend is slowly catching up in favor of MNCs who are offering
technologically superior products. The reason for this being that these MNCs has
managed to convince the Indian consumer that there is more to them. Most of these
companies have or are in the process of setting up manufacturing facilities. This
gives the consumer a feeling of security that they are here to stay. Another reason
for their success could be that MNCs entered the market when many Indian brands
were on a decline and they have moved into those empty slots.
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.
The attractiveness of LG Electronics India in the consumer durable industry can be
judged from the following FIVE-FACTOR INDUSTRY ANALYSIS MODEL

Existing Competition: At least 20 manufacturers or even more than those today


flanks the consumer durable market. When LG entered the market it had competition
from 18 companies. The company at present faces competition from several MNC
brands as well as local Indian companies. Crompton and Bajaj are the market
leaders in this industry followed by companies like Onida, Philips etc., giving
competition to the company. Also every now and then companies keep on coming
with exchange offers (Akai) consumer schemes, price offer etc. LG is one company
which believes in No scheme, no scheming. Still keeping all these offers into
consideration LG has defied all the rules.
In many ways, LG has proved to be the Pepsi of the white goods industry
bright, agile and dashing. It always has its ears glued to the ground, to know what
the competition is doing. For e.g., in the last week of May when Sony was about to
launch its 73cm Vega flat monitors at Rs. 56,950, directly taking on LGs Flatron
monitor priced at Rs. 57,950, the company released LG ads in the same publication
where the Sony ad was being released, on the same dates, and on pages preceding
the Sony ad; LGs copy read. Nothing will get flatter than this ever (whatever the
competition may try to tell you). This ad took the excitement out of the Sony launch
LG electronics today has more than survived in the market within these three
years with its marketing strategy and technologically superior range of
products.
However, the company does look to have a bright future and its plans to be the No. 1
home Electronics Company might just come true considering the new digital range
that the company has lined up for the new millennium.

Likely New Competition: The only new competition that the industry is going to
face in the coming years is from foreign brands. Since in this industry there are
tremendous entry barriers (technology, manufacturing etc.) only a foreign brand can
pose threat to the company. Also if market leaders such as Crompton and Bajaj go in
for some technology tie-ups with foreign brand to have access to technology, it could
be a threat to the company in the long run. These companies are considered to be
the market leaders and if they start coming up with products similar to what LG are
offering it could pose a serious threat to the company. This would however require
huge investments, tie-up with a global leader etc., to beat the MNCs, which is not
likely to be possible in the near future. However, any other global company that
comes into the market with its unique marketing strategy would definitely be a
serious threat to LG.
Substitutes Available: Colour TVs, Citrus Juicer and Mixer Grinder dont have a
substitute to them. But however a cooler could be a substitute to an AC or an oven
could be a substitute to a microwave Anyway these two substitutes are not very
significant hence the industry is attractive to stay in.
Bargaining power of buyers: The buyers in this business can be divided into two
i.e. the dealers and the consumer. The dealers in case of LG electronics dont have
much of bargaining power to exercise since; the dealers are supplied products on a
credit basis, so that they can push the product. Such a strategy was never heard of
earlier in the market. Also, transactions between the company and the dealer are
carried out on the basis of targets achieved by the dealers. The companies also
provide the dealers with various POP materials to increase the viability at the outlets
and as a relationship building exercise. The consumer however enjoys negligible
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 company which is not negotiable.
Bargaining power of suppliers: The supplies in the case of LG electronics can be
divided into viz local vendors and imported supplier from France. The company has
greater control over the supplies from France. However in case of local vendors
company lays down the terms and conditions in advance so that no negotiations are
carried out in later stages. The level of indigenization in LG products in about 45
percent. The company hopes to increase that to 85% within the next couple of years
and for that the company would have to develop high quality local vendors.
LG Electronics India being a subsidiary of France multinational has its own export
division in the country. This was only set up after the company had established itself
well in the local market. Its export operations were started in Jan 2002.
The company plans to export in 2003, US $ 3.8 million worth of goods to the
exporting countries. By the year 2007 it plans to export US $ 7.6 million worth of

goods and by 2014 US $ 100 million worth of goods. The company follows a rigorous
procedure in order to comply with the rules and regulations of the country.
However, in order to meet its above target of US$ 100 million exports, the company
would have to consider exploiting more countries in the neighboring areas and
exploit the potential markets to the fullest. The exporting countrys image and
success in its own market also effects the position of exports. Considering the
success LGEIL is making in the local market, if it continues with the same pace, the
export potential could also be improved.
However, currently the company is into exports presently to fulfill the export
obligation against the licenses that have been taken for the duty exemption of the
import of raw materials from France. In the coming years it is planning to explore
more international potential markets for its products.

REFERENCES
INTERNET
www.lgeil.com
www.google.com

NEWS PAPERS

Economic Times
Financial Express
Times of India
Indian Express

MAGAZINES

Business Today
A&M
Business India
Business World
Business Standard

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