Scope of the Project

This project was undertaken to show a companies marketing mix and actually how they employ the 4P strategies- Product, Place, Price and Promotion in real world scenario. The project provides us a great exposure to the consumer durable market in India which is one of the most promising segments in India today. For the purpose of the project we studied the strategies employed by LG Electronics India Limited and what made it the market leader. LG has a very diverse portfolio in consumer durable market. For the purpose of the project we concentrated on selected segments, namely, consumer electronics and white goods.

Introduction
Before liberalization of the Indian economy, only a few companies like Kelvinator, Godrej, Alwyn and Voltas were major players in the consumer durables market, accounting for no less than 90% of the market. Then, after the liberalization, foreign players like LG, Samsung, Whirlpool, and Phillips entered into India dethroning the Indian players and dominating the market. Today these players control the major share of the consumer durable market. The market share of MNCs in consumer durable segment is about 65%. Consumer durable market is growing at 10-15% annually for the past few years and this trend is expected to be followed for a few years to come. The reasons for its steep growth are rise in living standards, easy access to consumer finance, and wide range of choice, as many foreign players are entering in the market compounded with entry of heavyweight retail players like Croma , Ezone to name a few. With the rise in income level, easy availability of finance, increase in consumer awareness and introduction of new models, increasing share of organized retail, the demand for consumer durables has increased significantly. Products like washing machine, air conditioner, microwave oven, colour television are no longer considered luxury items. Consumer durable sector is characterized by emergence of MNCs, innovating marketing strategies and intense competition. MNCs major target is the growing middle

class as well as the emerging and largely untapped rural market of India. The urban market is growing at the annual rate of 7-10%, where as rural market of India is growing at the annual rate of 25%. Of all the MNCs present in India today, the two Korean companies LG Electronics and Samsung have been maintaining the lead in the industry with LG being the leader in almost all the categories. LG Electronics India Ltd., a wholly owned subsidiary of LG Electronics, South Korea, was established in 1997 after clearance from the Foreign Investment Promotion Board (FIPB). LG set up a state of art manufacturing facility at Greater Noida, near New Delhi in 1998. In 2004, LGEIL also set up its second Green field manufacturing unit in Pune, Maharashtra. Both the Indian manufacturing units has been designed with the latest technologies at par with international standards at South Korea and are one of the most Eco-friendly units amongst all LG manufacturing plants in the world. In the first year of its inception in India, i.e. in 1997, LG recorded a turnover of Rs. 125 crores. Its turnover gradually increased to Rs. 1, 056 crores by 1999 and by the year 2008 its turnover touched Rs.10, 700 crores. The home appliances and GSM categories have also posted the highest turnover ever with Rs 700 crore and Rs 70 crore respectively. LGEIs sales are increasing with a CAGR of 40 per cent over the past five years. The company is targeting a turnover of Rs 18, 000 crore by 2010 in India, accounting for about 10 per cent of the companys global sales, besides developing the country as an export hub.

Classification of Consumer Durable Sector

Consumer Electronic include colour television, home theatre, vcd/dvd, music player, still photo camera, camcorder, portable audio system, etc. White Goods include air conditioner, heater, washing machine, dish washer, refrigerator, vacuum cleaner, microwave oven, kitchen appliances, non-kitchen appliances, personal care product, etc.

Moulded Items include plastic luggage. Clocks and watches. Mobile phone sets.

Brands in Consumer Durable Sector

Multinational Companies LG Electronics, Samsung, National Companies Onida, Videocon, BPL, Godrej, Voltas, Bluestar. Regional Companies Bush, Crown, Salora, T-Series, Weston, Beltak, Oskar. Hyundai (Korean), TCL, Haier (China), Panasonic, Sharp, Hitachi, Sansui, Akai (Japan), Whirlpool, Electrolux.

Scope of Indian Market

In terms of Purchasing Power Parity (PPP), India is the 4th largest economy in the world and is expected to overtake Japan in the near future to come 3rd. Indian consumer durable market is expected to reach $400 billion by 2010. India has the youngest population amongst the major countries. There are lots of people in different income categories. Nearly two third of the population is below the age of 35 years, and nearly 50% below 25.

There are 56 million people in the middle class, who are earning $4,400-$21,800 a year.

LGs Product Line

Since its initial years in India, LG has focused on bringing out new models regularly in its product range. In the first year of its operation in India LG launched 70 models across a range of products. In 2001 alone LG launched 45 new models across its product lines and followed this with another 60 launches in 2002. This simply meant that in two years there was, on an average, at least one new LG model being launched every single week. Today it offers no less than 400 models under various product types in its product range. Some of its focus area segments are as follows: TelevisionIndia is emerging as a major force in the global television market in terms of domestic consumption as well as in production of sets. Indias television market is set to grow to 18.7 million units by 2011, expanding at a CAGR of 9 percent. On the revenue side, overall television sales will reach $4 billion by 2011, rising at a CAGR of 9.6 percent. LG is one of the market leaders as far as television segment of Indian market is concerned. LG has a market share of around 35% in the television segment which includes LCD TV, Plasma TV, Ultra Slim TV, as well as Flat TV. It offers nearly 40 different models in the television segment. Digital Audio VideoAs is the case with all other segments of Consumer Durables, audio-video segment is also showing huge promise in the near future for the Indian market. This has come about due to the wide range of products available in the market, progress in technology, local manufacturing and expanding dealer network. This segment is currently about $5 billion and is expected to grow up to $10 billion by 2013 showing a double digit CAGR.

LG has one of the widest product portfolios in audio segment. It has a comprehensive line up of 17 products to offer to its consumers. Further, it understands the market dynamics and the growth potential of the market. It is planning to enhance its portfolio with a slew of futuristic launches. LG is focusing on developing new technology and providing cutting edge technology at competitive prices. RefrigeratorIndian refrigerator market is valued at Rs 4000 crore. Refrigerators hold only 16% of consumer durable market that is valued at around Rs. 20,000-25,000 crore in India. Its market is growing at the rate of 7-8% annually. Despite the fact that refrigerators have immense utility to housewives and provide a solution to avoid food wastage, the penetration level is still below 20% and its market is growing at a very small pace. LG has come up a big way in this segment. Although companies like Whirlpool and Samsung are providing a stiff competition to it in this segment, LG is set to beat the competitions by bringing in technology in play. Recently LG launched worlds first TV Refrigerator TV DIOS. The company has also launched an exhaustive range of frost-free and direct cool refrigerators with different capacities targeting various demographic segments. Today the company offers nearly 40 different products in the segment. Washing MachineThe washing machine market is valued at Rs. 1500 crore. The fully automatic and semi-automatic sub category is growing at the rate of 40% and 17% respectively. Washing machine sales is cyclical in nature and its sales commences with the onset of monsoon. The major players in this segment are LG, Whirlpool and Samsung. LG is the leader in this segment with a market share of 27% and beats the nearest rival Whirpool having a market share of 17%. LG offers numerous variants in the product line comprising of Top Load, Front Load, Semi Automatic, and Steam Washer machines. Airconditioner-

ACs still remains a third priority purchase when compared with refrigerators and televisions. However the sales have been boosted by the increasing demand in the middle- income group and small offices home-office segments. Air-conditioning industry is growing at a hectic pace and is providing a huge opportunity for all the players. The market has overall done well. The increasing affordability levels and the high ambient temperatures experienced in the summer months have been key demand drivers. The industry is expected to grow at about 20 per cent per annum for the next two to three years. LG took the lion's share of the market with 35% market share with a quantity turnover of over 5.5 lakhs and value turnover of over Rs.1000 Crores, LG aims to achieve a quantity and value turnover of 6.5 lakhs plus & Rs. 1300 Crores respectively.

LGs Product Strategy

1. Vast Product Range Since its initial years in India, LG has focused on bringing out new models regularly in its product range. LGEIL has always had a close ear to the market, developing customized products for the Indian consumer with rapid regularity. In its first year of operation in India, LG launched 70 models across a range of products. Today its offering nearly 400 models in consumer durable market in India. The benefit of having such a vast array of products is that even if one or two segments are not performing well in the market, they can bank upon other segments. 2. Product Differentiation a. Health Benefits in TechnologyFrom very early on LG differentiated its products based on health benefits. When LG first came to India, it had poor brand recognition among the masses. At that time, the competition was based on price and features the consumer durable companies were offering. To beat the competition, the company focused on

environment-friendly technologies along with products oriented toward a healthier lifestyle. LG used this strategy to win the trust of the customers and become their preferred brand. LG have launched Golden Eye Technology in colour television segment, used Health Air System in air conditioners and Health Wave System in their microwave range. Other home appliances such as washing machines and refrigerators are also being designed and marketed in line with the companys health-conscious strategy. They added features such as steam technology and detergent-free cleaning to ensure hygiene. LG has also introduced Green Iron Door Cooling a revolutionary new technology in refrigerator segment that uses non-toxic substance called Catechin, extracted from green tea leaf to prevent bacteria, mold and unpleasant bad odor from entering the refrigerator. b. InnovationInnovation has been a corner stone as far as LGs marketing strategy goes. LG has setup its R&D facilities in India which is responsible for 90% of product innovation in India. They spent nearly Rs 400 crore in year 2008 on R&D. In the Indian household scenario where space is a major constraint, LG has come up with an innovative solution by way of Worlds slimmest Flat CRT TV, Slimagic. Cutting Edge Technology such as Image Stick minimization, Orbiter, Whitewash, Flexi PIP, Double Window Screen are some of the features LG is providing in its Plasma Display Panels. Product localization is a key strategy used by LG. As India is a country of varied cultural diversity, LG used this constraint for a great advantage. LG came out with Hindi and regional language menus on its TV. To address the needs of convenient & comfortable cooling, LG has launched the indigenously developed Advanced sensor based Intelloeye Technology for their ACs. LG is also the first to successfully launch Colored ACs in India. LG India launched the Worlds First TV Refrigerator. By doing this LG addressed the space constraint in Indian household plus they provided a novel product to the

Indian customers who are looking forward to enhance their lifestyle and are attracted to such product innovations.

3. Services Differentiation As in many industries, in consumer electronics and home appliances, the after-sales service market has ballooned to four to five times the size of the original equipment business. Thus it has not only become a means of providing customer satisfaction, but also a revenue generator. The best and biggest international brands are operating in India today. After-sales-service has become an integral part of a brand as well as a critical part for its success. LG has the widest service network across the country. Some estimates put it at a significant multiple of service-infrastructure from their nearest rival. In fact LG moved away from Discounting Strategy since 2007 and is putting thrust on the quality and service in its brand communication to position LG as a premium consumer electronics brand in India. The company has 1200 service centers as of now across the country and are looking forward to increase their number of service personals to 10, 000 by the year end.

LG PLACE STRATEGY
Channel Network:

It hasnt been very long since this Korean electronics and home appliance giant came to India to sell colour TVs and other white goods. No sooner did the company enter India than it found this to be a large market for its IT products as well. LGs experiments may have resulted in some initial snarls, but the company is now successful in terms of both market penetration and presence. Year-on-year LG is registering tremendous growth in its PC components business. How has this been possible? Not that the company didnt face any competition when it came here, but LG has fought well to get where it has today.

This growth has been possible due to a focused channel strategy. By and large, the channel too seems to have found LG business to be profitable. Channel sales is the underlined parameter for LG to beat competition The company believes in stock rotation, and not in dumping stocks on its channel partners. LG provide stocks of LG products and simultaneously create the pull factor. Thus, the stock that the company sends to its channel partners is sold in three to four days. At any given point of time stock held by the channel doesnt remain there for more than a week. Channels therefore are kept happy because their cash flow is rotated fast. As a result, there is no price undercutting. In the whole chain, the channel fraternity feels that prices are stable and do not fluctuate because of overstocking and understocking. This simply translates into a scenario where everybody involved in the channel makes money. There is no excess inventory, which means no flab on the channels belly. It is done in a cyclic parameter. They start with an increased pull. That pull is generated that the company carries out for sales promotion are interlinked. The IT distribution process involves multiple tiers, unlike any other industry. In other segments like electronics and home appliances, there is a maximum of two tiers in the channelfrom the vendor it goes to a dealer and finally to a customer. But in IT the product goes from the vendor to the distributor to a master reseller to a smaller reseller or a system assembler/consumer. Thus, the company feels it is essential to energise all the tiers involved in selling an LG product. The entire hierarchy of this channel has to be incentivised. For end-user pull the company suggests many bundling propositions. When all these schemes are put together, the company gets the pull factor activated for its products. This results in greater push for LG products as compared to others. To top it all, supplies are very consistent in the market because the company operates on a cash-and-carry basis, unlike other players.

To enhance the pull factor, LG has been announcing a lot of schemes from time to time. They have a unique point-based incentive scheme for the channels on a very large scale. The way it is administered is unique to LG. It has virtually forced other market players to consider similar deals. Distribution Model: LG is the only company to successfully introduce and run a regional distribution model in India. Regional distribution means there is no national distributor and thus no monopolistic attitude. The model has worked to the advantage of the company. There is quicker rotation of stocks, and better penetration into B-, C-, and D-class markets. LG has distributors representing geographies like Dibrugarh in Assam. These distributors work directly with the company. The products have also become very competitive since the company has cut many tiers and introduced value additions to fill the gap. Compare this to the practices of many other firms in India. A credit line is established by the national distributor. People get credit for a certain period, which drives them to overstock. This results in overtrading, which gives birth to price undercutting. Ultimately there is a sharp decline in profits for the entire channel fraternity. On one side LG is proud to be associated with the channel fraternity, which has made it a strong player in India. On the other hand LG is planning to launch its own exclusive retail outlets. All their retail initiatives will involve channels in one way or the other. For example, in the case of components, channels have a role to play in terms of valueaddition, like assembling a PC. The channel thus stands to get more benefits, and once the strategy is in place, people will understand how it works. They are spreading even further. LG is the only company that has 50 branches in the country. For instance, in Uttar Pradesh, its competitors may have two branches, LG has five branchesLucknow, Varanasi, Dehradun, Ghaziabad and Agra. In Punjab, Other companies operates with one branch.LG operates from Chandigarh, Ludhiana, Jalandhar, Batinda and Jammu. If we go down to Tamil Nadu, everybody operates from just

Chennai; LG operates from Trichi, Coimbatore, Madurai and Chennai. turn penetrating thse brand further.

In all these

branches LG has a branch manager and logistics team that interact with the customer, in

LG will sustain more in the B and C class cities because it has a dedicated team working there. This investment has really proved beneficial for the customers, and for LG it has been easier to grow in these markets. Strategic Partnerships: LG believe in partnership and that's the way they have grown. They have opted for different partners for different services, e.g., for national long distance They have partnered with Bharti and BSNL, for VSAT They have chosen Tata Indicom and Bharti, VPN is through HCL Infinet, and IPLC has been subscribed through MCI and Equant. E-business: LG has been early adapter of e-biz in India. The dealer network is around 5,000 of which a majority are being connected to lgdealernet.com, a B2B site for all LG dealers. The site helps in easy monthly reconciliation of accounts and provides an interactive platform for sharing information with all the dealers. Presently, around 75 percent of LG's turnover is through this channel. The channel is also useful in imparting education so that dealers can increase productivity and reduce on staff cost. On the supply side we have lgesource.com for domestic vendors and lgimports.com for overseas vendors for maintaining inventory status. On the B2C side, lgezbuy.com is for establishing strong customer relationship, besides creating an additional revenue channel. Even for customer service, LG has created lgcsnet.com where service is outsourced to service franchisee (around 800). An SMS interface with lgcsnet.com application has been developed where calls are mapped to zip code and service franchisee gets alerts for different request that LG receives from the customer.

Lgezybuy.com made around Rs 20 crore last year (2008) and this year they are looking at a five-fold growth. They are targeting Rs 100 crore. There is a lot of action happening on the e-commerce side. Its very easy to just use a card and buy the products on the Net. This is really prevalent among the NRIs as there is a lot of gifting that takes place, especially from the US and the Gulf countries. Keeping this mind, they are projecting a growth of five times this year (2009). Push strategy: LGs penetrative distribution strategy ensured that products are available even in smaller towns and cities, breaking the chain of urban dependency that plagues most white goods manufacturers. Rural markets accounts for a remarkable 30 per cent of total sales and it's clear that LG's strategy is working. It adopts push the rural marketing, LG reaches into the hinterland through a pyramidal sales structure. Branch offices in larger cities set up central area offices in smaller towns; these in turn reach out to even smaller towns and villages through remote area offices - at last count, the company had 51 branch offices, 87 CAOs (Circle Area Officers) and 78 RAOs (Remote Area Officers). Each RAO has servicing, marketing and sales teams at its disposal and an individual budget for marketing activities in its territory. The executive in charge has independent decision-making powers -- he can decide the tenor and scale of brand promotions in his area, without having to cross check every little detail from the head office. Technology, too, is being used to the hilt to ease their jobs. The RAOs and CAOs are all electronically connected through a V-SAT and Intranet network. And where earlier decisions about putting up large hoardings could be approved only after a visit from the head office, LG has provided all its branch managers digital cameras -now they just click images of suitable locations and get them approved electronically.

Rural Market Penetration: The rural market is going to be the main focus of LG .Since it intend to be very active in the rural market, They have set a target of 70% value growth. So the target is Rs. 7,000crores. The rural activities include marketing activities and other initiatives in the form of surveys and the like. So for that, we are opening many more branches across the country. In September 02. They had only eighteen branches; now we have for sixty branches. Additionally, 112 area offices more , which were not there at all last year; these area offices have been opened in the district-level areas. Below these area offices, they have remote area offices, which are called as RAOs. Currently they have eighty RAOs, which they are planning to expand so that they can reach out to the rural market in a better way and feel the pulse of all the consumers and the dealers there. LGs Rural Foray: > LG India- tripled the number of its retail & distributor outlets in rural areas from 2004 to 2006. >The avg. price of its Sampoorna range of CTVs came down to about the price so competitive that, thereby bridging the gap between CTVs and other local B/W TVs. > It also tapped local forms of entertainment like annual haats and fairs and made huge investments in infrastructure for distribution and marketing. Result: > The rural market accounts for 60 per cent of new CTV buyers for LG. >The rural market for LG grew at 25 per cent over the last year, against a 15 per cent growth in urban areas. >Sampoorna TVs sold in the Indian heartland and the semi urban belts, enforced a strong connection with India for LG. > It connected very well with down the pop strata.

Pricing Strategies
Initial Stage: When LG started its operations in 1997, it sold products that were imported. Hence, its products were priced high and were equivalent to other foreign (Japanese) products. Industry analysts felt that this strategy was adopted to make local consumers feel that LG products were by no means inferior to Japanese products in performance or in quality. LG had competition from local players and multinational companies. LGEIL understood the price sensitive mentality of Indian consumers. So, to overcome the high pricing of products and high import duties, LG starts manufacturing its products in India and they implemented Digital manufacturing system. They focused on commencement of its digital management system (DMS), a cost-cutting technique that would lead to shorter assembly lines, higher productivity, and reduced manufacturing costs by 30 percent. The implementation of DMS resulted in an additional five per cent reduction in prices across

CTVs, refrigerators and washing machines. This helped LG to reduce the price their products thereby providing quality product at competitive prices. In 1998, LG launched 'Sampoorna', its first low priced CTV (colour TV) for rural consumers, and followed it with 'Cineplus' having multi-language options for display. LG
understood that Indian customers wanted the best products at reasonable prices

(SampoornaRs.3000 and CineplusRs.4900). LG started introducing quality products in the economy range. In the first few years after its entry, LG did not get into price wars. Unlike other players, it did not offer any exchange schemes or discounts. The LGIEL concept of premium marketing to the masses and was communicated to the customers in the form of a strong marketing campaign- more value at much less than the price. With this strategy some competitors reacted and announced their price cuts, not realising that LGEIL was not only just cutting price and also focusing on the cost innovation. These made LG more profitable than the competitors. Also they varied price strategies from state to state that kept competition guessing away. LGEI had been managing its value and, within a very short time, it established itself as a brand associated with value. Its innovative features, feature-price combination method and communication are the factors which have been instrumental in brand acceptance. Realising the need to higher end market, LG introduced several premium products with premium prices. Refrigerator-with-TV at Rs 65000, television sets at Rs. 100000 and Airconditioners at Rs.50000 are some of the products. LG introduced a few strategies which are crucial in the marketing of such premium durable categories in market like India, where high-end consumers will have to perceive value with regard to brands offerings. "Economy" and "value-for-money" are no longer going to be the cornerstones of LG's India strategy. They concentrated on building itself as a premium brand, targeting 10 per cent of its earnings from super-premium products. That includes products like the Whisen range of wall-mounted air-conditioners (Rs 50,000 and above), Dios refrigerators (Rs 65,000 and above) and X-canvas plasma TVs (Rs 100,000 and above).

Aggressive Pricing Strategy:

In 2004, the aggressive pricing strategy adopted initially actually knocked the competition off its feet. In particular, LG's products were about 5-15 per cent lesser than the competition. Resultantly, the price erosion in the CTV in particular averaged about 10 percent and in Refrigerator category they dropped prices Rs.25000 per piece to Rs.15000 per piece leads their market share jumped from 10% to 35% within one year driving many competitors into the red. This leads to price wars from the competitors like Samsung, BPL and Videocon. The price points will stabilize for some time until and unless there is a drastic price action that is taken by one of the new players. However, at the same time it will be very difficult for the competitors to go for another price war because this industry has already seen a lot of price wars resulting in prices coming down. So, at the overall macro level, it is time for the industry to stabilize now.

Honest Pricing Policy: LG noted that any pricing strategy will have to be supported appropriately by other elements of marketing mix and the consumers will perceive a synergy among them. Pricing and combination with other marketing are critical as consumers associate value with price, and price always figures in the consideration set, especially from premium offerings. LG officials said that they believed in an 'honest pricing policy' and its message to customers read 'No scheme, no gimmick, great products and honest prices.'...

Promotion Strategy
For the marketing of products LG follows following activities: 1. Exhibitions are conducted from time to time. 2. Societies and college activities are conducted. 3. Hoardings, posters banners are used so as to grab the attention of the customers. 4. Day to day advertisements in leading news papers. 5. Discount at festival times. 6. For dealer relationship they arrange dealer meeting at several time in a year.

7. LG divides dealers in gold, silver etc. Category to know the performance of the dealer. 8. They have their sales persons at various sub dealer store and at mordant trade stores for particularly for the promotion of the LG products. 9. LG also uses radio FM for promotional activities. 10. LG also provides coupon and scratch cards for festive season. Focused Campaigns LG aims to be recognised as not just a leading consumer durable brand but also as a brand which provides complete healthcare solution to its consumers. The company recently unveiled its new Health+ campaign under which it would introduce products aimed at helping consumers maintain healthier homes for the family household. LG rolled out the Health campaign in India as it believes healthy lifestyles starts at home. Advertising LG had been very active in its advertising campaigns its promotion and advertising activities. In 2004, the company spent nearly Rs. 1.3 billion (5% of its revenues) towards advertising. Analysts commented that LG's promotion and advertising of its durables segment were similar to that of an FMCG company. Unlike many Indian brands which advertised seasonally (2-3 months during the festival season i.e. September, October and November), LG advertised all round the year. But lately there has been a lull in advertising promotions: LG is not so visible in advertisements but it is very much visible in other areas. LG believes that marketing is beyond advertising and is beyond a 30-second ad. They have already spent a lot of money on advertising and awareness. On top-of-mind recall and awareness levels LG is at the highest level. So it is a conscious decision to move away from the 30-second space. LG believes that there should be a 360-degree paradigm. Going forward LG is thinking of setting up an institute in India to study and review the future of Indias economy, which will help the brand in formulating their plans for the market here; the research will help LG know where India is heading.

Offer for Channel Partners: LG Electronics India brings out new schemes for its channel partners very frequently. The 'channel scheme for desktop' the channel handshake incentive -- is focussed on roping in new partners. On buying minimum six desktop PCs (any mix), the channel partner will get LG external DVD writer with Light Scribe technology. With the increase in number of units, the gifts too get more exciting. The 'growth base LG PC reseller scheme' concentrates on the existing partners. In case, a channel partner gets 25 per cent of growth over monthly average, he gets a DVD writer with Light Scribe technology. But the reseller must sell at least eight units of desktop PC. With 35 per cent growth and minimum 14 units sold, the reseller gets a 17inch Flatron CRT monitor. A 0.6 ton Window AC is gifted to the reseller showing 45 per cent growth (minimum 20 units sold). Festive Offer: True to the market trend, LG Electronics India brings out numerous offers at festive season to tap into the feel good factor among masses. Promotion campaigns like "World Cup Pass Chahiye" offer were among LGs most successful ones. The company had earmarked a budget of Rs 35 Crore for the campaign running from January 5 till February 28, 2003. The month long World Cup Cricket Promotion invited consumers to participate in a contest and win prizes ranging from a Gold Pass and 600 Silver Passes for the World Cup matches and 100 limited edition LG products, besides assured gifts with every purchase. The Gold Pass would entitle the winner for an opportunity to attend all the World Cup matches in South Africa along with a friend. The Silver Pass, on the other hand, would enable its winner to watch an individual match during the World Cup matches. This event has been conceptualised to generate excitement amongst the consumers and enhance consumer interest in LG. This resulted in achieving a sales turnover of Rs 920 crore in the period (January to March 2003) which will amount to a 60 per cent growth over the same period last year."

Communication Strategy: As a marketer, LG innovates its communication strategy and offers spectrum of products to attract the customer. The idea is to communicate the developments to its consumer so that it benefits from the same. In order to increase its reach, LG has set an ambitious retail vision of being present in every state, city and town in the country over the coming years, thus, boosting both product reach and sales growth.

Opinion Leader: There are several cues in the environment such as advertisements and personal sources of information. Consumers get used to advertisements and obtain word-of-mouth opinion on brands and product categories from opinion leaders who may be from their circle of friends or acquaintances. LG also makes people aware with the help of opinion leader advice. As Ajay Devgan and Kajol comes for LG appliances. Consumers have associated a significant degree of credibility to the opinion leaders and see them as a consumer who has knowledge of and expertise/experience about a specific product category. T Persuade Customer: his helped LG in increasing its market share. LG Electronics reengineered its TV product specifications in order to develop three offerings specifically for India, including a no-frills one to expand the market at the low end and a premium 21-inch flat TV for the middle segment. By keeping the price of the latter offering to within 10 percent of the price of TVs with conventional screens, LG persuaded many consumers to buy it.

Relationship marketing: LG sends greeting cards to the premium customer customers on their birthdays to have good relationship. They organise parties and invite the valuable consumers. These activities makes LGs strong relationship with the consumers and it also attracts many others consumers through word of mouth.

Tapping Rural Market: LG Electronics defines all cities and towns other than the seven metros cities as rural and semi-urban market. To tap these unexplored country markets, LG has set up 45 area offices and 59 rural/remote area offices. LG has gained the acceptability by offering the products that suit the rural market. It reaped rich dividends by doing so, is LG Electronics. In 1998, it developed a customised TV for the rural market and christened it Sampoorna. It was a runway hit selling 100,000 sets in the very first year. It was followed by another successful model Cineplus.

Mobile Van in Rural Areas

With the reduction of ads, the interaction with consumers has not reduced: Actually, it has grown even more. There is a global research which says that consumers mind switches off on a repeat exposure to any advertisement. A company enters the minds of the consumer by exposure in the initial stage but after that they need to increase the level of involvement. LG does not believe in excessive advertising. So they are looking at increasing the number of ground events, in-film placements and more avenues where a consumer can be far more involved with the brand. So, they are consciously shifting this money to such activities rather than just putting them in advertising.

New Initiative that LG is looking up to increase consumer interface: LG is putting in a lot of effort, time and money in improving the ultimate consumer interface. It believes that the moment of truth emerges when the customer goes out to buy the product; it is not when he spots the advertisement in a newspaper or television. The new initiatives are specialized stores that they have introduced. They have about 25 lifestyle shop outlets, and by the end of the first quarter, they are planning to expand to 75 such outlets. They have four X Canvas showrooms, where only plasma display panels, projection TVs and laptops are displayed, and will expand this to 25. Other than this, they are also planning to have specialized upmarket showrooms for the designer airconditioners called Whisen, and Cyber Shoppe for IT and GSM products. In all, the company has plans to focus on premium products and introduce 25 X Canvas, 15 Whisen and around 30 Cyber Shoppe outlets. These outlets will be present across the country and more prominently in the malls and the premium markets. In the existing showrooms, Their effort is to refurbish the entire display with the latest state-of-art technology and latest designs. So, a lot of innovations are being done on point of sale branding and a lot of money is going to be spent around that.

LG Stall at an Exhibition New Commercial from LG: LG is coming up with new TV commercials but then they stand by the fact that multiple exposures through ads do not translate to numbers. So they are going to have lesser number of spots but they would be making them differently. They are coming out with a new commercial for mobile phones. The campaign is based on the concept that it is better to be different than be better than others. The campaign has no human figures and they have used the theme innovatively. It depicts hands travelling through roads, stepping out of the car, going down the stairs, and proceeding towards LG outlets. Then the camera shows the hand jumping on to the stand and grabbing the LG handset. There are more campaigns in the line-up. The washing machine campaign will be on air by February end, microwaves by the third week of February and the refrigerator campaign.

LGs Positioning: LG continues to stand for health and wellness and everything associated with well-being. It has grown because of this. So, even the new campaigns that they are coming up with in air-conditioners talk about energy and wellness. Energy comes from health and it isnt like they have changed the positioning; They have evolved in such a manner that the customer likes it and they keep us at the same ladder of evolution. Its very tough to build positioning for brands but very easy to dilute them. But the customer feels that LG has evolved as a brand but at the same time there is no difficulty in their mind in placing it. So, LGs positioning is a blend of health, well-being and family values.

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