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RURAL MARKETING ACTIVITIES OF

INTRODUCTION
LG Corp.(Lucky-Goldstar) founded in 1947 is the second-largest South Korean conglomerate company following Samsung, and it is headquartered in the LG Twin Towers in, Seoul. LG produces electronics, chemicals, and telecommunications in over 80 countries.

SUBSIDIARIES
LG LG LG LG LG LG Electronics Chemicals Telecom Display Life Sciences Solar Energy

LG IN INDIA
LG Electronics India Pvt. Ltd., a wholly owned subsidiary of LG Electronics, South Korea was established in January, 1997 after clearance from the Foreign Investment Promotion Board (FIPB). LG set up a state-of-the art manufacturing facility at Greater Noida, near Delhi, in 1998, with an investment of Rs 500 Crores. In 2004, LGEIL also up its second Greenfield manufacturing unit in Pune, Maharashtra.LG plans to set up Rs 500-cr unit in South.

MAJOR LANDMARK OF LG IN INDIA


Feb97: Established LGEIL May97: Launched CTV, WM, REF. Jan98: Launched AC Apr98: Inaugurated Noida Plant-CTV, AC, WM May01: Started Monitor Prod. Jan04: Started PC Production Oct04: Inaugurated Pune Plant-CTV, REF Apr05: Started GSM Production (P) Jan07: Started TFT Monitor production Apr07: 5 Star Energy rating for products

VOYAGE THROUGH LGS RURAL ACTIVITIES

LG S PUSH INTO RURAL MARKETS


LG has increased its branch numbers to 23 in the year 2002 from 18 in the previous year. To further penetrate the rural market, it has posted 93 area managers across the country. In its bid to enter the rural market in a big way, LG launched a massive campaign in rural areas. These included road shows, society demonstrations, and localized shows in rural India.

The area managers have been delegated with more power to take fast decisions. LG has improved the interaction with the dealers.

RURAL MARKET PENETRATION


The company figured it needed new cheaper products to lure the rural buyer. It figured that more offices in smaller towns and cities were the need of the hour. LG moved quickly on both fronts. At one level, it has introduced cheaper products like it Sampoorna television range. At another it has gone on an office-opening spree in India's smaller towns.

Today the majority of LG's revenues are now coming from smaller towns like Hapur,Trichy, Jorhat and Asansol.

MARKETING STRATEGIES ADOPTED BY LG IN RURAL INDIA


Affordability

Availability

4 As

Acceptability

Awareness

THE 4A APPROACH
The rural market may be appealing but it is not without its problems: Low per capita disposable incomes that is half the urban disposable income; large number of daily wage earners, acute dependence on the vagaries of the monsoon; seasonal consumption linked to harvests and festivals and special occasions; poor roads; power problems; and inaccessibility to conventional advertising media. However, the rural consumer is not unlike his urban counterpart in many ways.

4 As of Rural Marketing
Availability

65 Remote Area Offices under the branch offices that are empowered to directly link to the central billing system for orders. 230 service centers. 2,600 mobile authorized service personnel for villages having below 10,000 residents.

Affordability

Reduce cost by replacing 4 speakers by 2. Sampoorna- Rs.3000. Cineplus- RS 4900.

4 As
Acceptability Awareness Product localization is the key strategy used by the LG Mobile Vans (Garam Garam Khana) LG came out with Hindi and regional language menus Exhibitions on its TVs. Introduced the low-priced Cineplus and sampooa Road Shows for the rural market.

A). AVAILABILITY - PLACE


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. The company has also taken initiatives like A) 65 Remote Area Offices under the branch offices that are empowered to directly link to the central billing system for orders. B) 230 service centers. C) 2,600 mobile authorized service personnel for villages having below 10,000 residents. All these moves are part of LG's efforts to push turnover.

B). AFFORDABILITY - PRICE


LG India has taken full advantage of a booming demand for color TVs in rural India by launching Sampoorna, a color TV whose operations booklet was in the Devnagari script. For this model, LG also introduced technology that provided better a reception in low signal locationswhich is a common problem in rural areas. Today, LG claims that Sampoorna series accounts for about 30 per cent of its color TV volumes. In 1998, LG launched its first low priced CTV for rural consumers ie. Sampoorna- Rs.3000 Cineplus- RS 4900

C). ACCEPTABILITY PRODUCT


There is a need to offer products that suit the rural market. Its product Sampoorna was a runway hit selling 100,000 sets in the very first year. 1. Product localization is the key strategy used by the LG 2. LG came out with Hindi and regional language menus on its TVs. 3. Introduced the low-priced Cineplus and sampooma for the rural market. 4. LG was the first brand to introduce gaming in TVs. in continuations of its association with cricket LG introduce cricket game in CTVs

D) AWARENESS- PROMOTION
The word of mouth is an important message carrier in rural areas. Awareness Mobile Vans (Garam Garam Khana) Road show van , Exhibition for TV sampoorna , Cookery classes as part of promotion. Company chose sports events as its medium to create awareness. During the 1999 World Cup Cricket, LG launched TVs that included cricket games. During the 2002 World Cup Soccer, the company launched TV, which was shaped like a football, and for World Cup Cricket 2003, the company introduced bat shaped remote controlled for its TVs.

1000 In Store Demonstrators at Dealer counters in Rural Cities

Promotion of Sampoorna TVs

ANALYSIS OF LG'S MARKETING STRATEGY


Based on Value creation and Delivery Sequence

CHOOSE THE VALUE

PROVIDE THE VALUE

DELIVER THE VALUE

COMMUNI CATE THE VALUE

1. CHOOSING THE VALUE


The company in order to have a Full Market Coverage, adopted the policy of Different Models Different Channels LG introduced its Economy range of products for rural market, and the stress was on reasonable products and not cheap products! For example, in the Urban Market, features like preserved nutrition, automatic systems, golden eye for CTVs etc were relevant and important, but, in terms of semi urban and Rural Markets, features like local language, low cost, simplicity, etc were important.

In fact, even for the products made for rural market customized products were customized according to Area Officers research and feedback, for example,

1. Features like twister trays and fir lamps in rural South India market were not considered important, so products at lower price were launched without these features. 2. Color televisions the 14, 20 and 21 inches models for rural markets came without four speakers (had only 2 speakers), back woofers and games and were launched at Rs. 1000 less. 3. Washing Machines under 3 new models, Popular, Delight and Dreams were launched in the rural market.

2 . PROVIDE THE VALUE


Instead of having a consumer-dealer-manufacturer distribution chain(as in the urban areas), LG used multiple channels and Intermediaries to enhance its reach . The company by the end of 2003, had 1000 to 1500 dealers and the number of sub dealers had climbed from 2,800 to 5000. LG also distributed its products to local FMCG distributors, which not only enhanced distribution of products but also was a cost effective way of reaching consumers.

3. DELIVERING VALUE
In terms of actual delivery of products to the customers, there were certain things that LG was doing different from its competitors: Unlike the competitors who were providing 45 to 60 days of Credit period, LG asked for advanced payments. LG was able to do so owing to the following reasons: 1. There were not much substitutes and existing players in the rural marketing, thus the bargaining power of the supplier, that is LG was high. 2. Thus there was a pull of LG products in the market, which made the dealers pay in advance. Also, due to this risk, dealers started pushing the brand aggressively.

4. COMMUNICATE THE VALUE:


The most important elements of Communicating the value are the Sales force, Sales Promotion and Advertising: Sales Force: LG set up 60 Central area office and 65 Remote area office in Class B and Class C towns respectively. Also, 23 Call Centers, 206 Service Centers, 1500 Engineers across 141 cities and 2600 mobile authorized service personnel for villages below 10000 people. ADVERTISING: The company increased its annual advertisement and promotion budget from Rs. 25 Crores in 2001, to Rs. 40 Crores in 2002.

1. Enhanced attention was worked upon by the following activities: a. Advertising Perennially: All the competitors were mainly promoting the product as per the seasonal requirements of the products, but LG made huge investments in Promotion, and advertised all through the year. b. Company chose sports events as its medium to create awareness. c. Most of the rural market has access to doordarshan channel only, so the company tied up with doordarshan in order to promote its products.

d. Also, the company used Local Language to promote its products, like, Hindi,Tamil,Marathi, etc. 2. Further Interest was developed amongst the people by, the use of hoardings, road shows and mobile vans for promotional activities. In February 2003, the company launched 40 road shows in the southern states targeting small towns. The road shows showcased the entire LG range of products and cost Rs 3.5 Lakhs per town 3. Increased desired to own the product by, launching appropriate products for the rural market, customized products for different regions, use of different languages for display like Hindi,Tamil,English, etc.

Conclusion
LG won over the Indian Market: It has introduced a separate line of economy class products for rural India like its Sampoorna television range. One thing that the company did was to make sure that they did not provide cheaper products for the rural customers. Instead they launched a new and a separate class of products targeting only the rural customers. Also they made sure that the new products that they launched were in accordance with the rural consumer. LG was known for its mass image and how soon it could sport a premium, ironic brand image was something to be watched out in the future against the other premium brands with long history of trust.