LG Balancing Urban& Rural segment

Ravisankar.S Riyas N

Introduction
LG Electronics India is the second largest LCD

television player in the country Industry growth is 4% in this category In 2009, LGs intention was to increase the market share from 27% to 30% Premium products are mainly focused on the urban markets LG altered the product mix, and the segments are represented by the entry level products.

Sales
40% 35% 37%

30%
25% 23%

20%
15%

10%
5%

0%
LG SAMSUNG SONY OTHERS

LGs Strategies
The company identified that, new products are

needed to lure the rural buyer The acceptability enhanced by a consumeroriented approach, innovations in products guided by value an by adopting the principles. Eg: LG also offered on-screen displays in five languages. The features were carefully chosen and adopted to appeal to Indian audiences. Eg: In the south-west region of India people prefer loud sounds and big bass outputs. Accordingly LG created Ballad, a flat screen with 2000 watt speakers.

 LG has been careful right from the beginning to

offer customers a Value- Plus proposition Eg: LG found that Indian consumers are very price sensitive. The want the best quality at reasonable price. Accordingly LG introduced its economy range and it was well- easy accepted. Availability leads to Profitability Eg: Earlier a single branch catered to Chandigrah, Jammu &Kashmir and Punjab generated Rs 180 million per month. Now with more branches, revenue in the same area has gone up to Rs 500 million per month.

LGs 4A frame of Marketing

Acceptability: Product and promotion location strategy,

Hindi and regional language menus on its TVs, tapped local forms of entertainment like annual haats and fairs Affordability: 1998, LG launched its first low priced TV for rural consumers-Sampoorna- Rs.3000-Cineplus- RS 4900 Availability: 65 remote area offices, 40 branch offices are empowered to directly link to the central billing system of orders. 230 service centers and 2600 mobile authorized service personal for village having less than 10,000 residents. Awareness: Mobile vans, exhibitions and road shows

New Product Launches

LG planned to develop 31 models with 100% Star

Rating by the end of 2009. The portfolio comprises 19 flat and 12 ultra slim TVs that conform to the BEE ( Bureau of Energy Efficiency)
Model Star rated 21 inches Flat Star rated 29 inches Flat Price 7300 14,9000

Star rated 21 inches ultra slim

Star rated 29 inches ultra slim

8,300
17,800

Competition
Mirc Electronics

Its selling their second string brand Igo that slightly cheaper than its Onida range. Both are selling well in the rural area.
Videocon

Its 40% of the products are sold in rural areas and expected to be increased up to 55%. 2. Videocon is not designing the new products for the rural customer. 3. Its entry level television product is 14-inch Videocon CTV worth Rs. 7,000 both in the cities and the villages.
1.

 SAMSUNG

The 30% of the companys revenue is comes from rural and semi-urban areas. 2. The key-driver of the company is their technology. 3. Samsung has looked at increasing awareness and penetration of its product in second-rung cities like Bhuj, Porbandar and Jalandhar. Godrej 1. It presents in 900 town, out of which 450 have the population above 100,000, and 250 are below. 2. To tackle the rural consumer mind they did the advertising on Doordarshan, before that they used to do only on cable television.
1.

Analysis part

 LG Electronics India is all set to reposition its

brand in the market from the present value-formoney plank to an aspirational brand by offering a range of differentiated products, rather than remaining in the me-too category. Choosing LG is a form of self expression and self satisfaction

 consumers generally rely on experience and their

long-held perception of a brand, the key to establish an aspirational brand is gaining customer loyalty. This is precisely where the need for rolling out innovative, easy-to-identify and differentiated products, which are of high quality, come into play.

 The perception of the Indian about the desired

product is changing. Now they know the difference between the products and the utilities derived out of it. As a rural Indian customer always wanted value for money with the changed perception, one can notice difference in current market scenario.

 The Indian consumer perceives LG as a value-

for-money brand. This is mainly due to mass market products In future, even our advertisements will not talk about the pricing of our products. Instead, they will talk about features, quality and our after-sales service support, said Mr Moon B. Shin, Managing Director of the company.

affordability
The customers want value for money. They do

not see any value in frills associated with the products. They aim for the basic functionality. How ever, if the seller provide frills free of cost they are happy with that. They are happy with such a high technology that can full their need.

 As "Motorola has launched, seven models of

Cellular Phones of high technology but none took off. On the other hand, "Nokia" has launched a simple product, which has captured the market

 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.

WHAT LG DID
Set up of a Life style Research Team which would

analyze the needs & preferences of the consumer , In-depth. Understand at length his comfort levels in terms of what they wants and what they would spend for what they wants. Make products and service available for him to suit his needs & Preferences. Have a deep pocket network to make products available for him at a close proximity from where they can access product easily

acceptability
Avoided replicating marketing Strategy Focused on trust and faith Product and promotion localization strategy

 Its advertising message was built round its

differentiated products due to their indian localization, ease of use and durability
LG advertised all round the year-high brand recall

and successful positioning

LG has used India brand name "Sampoorna" for its newly launched TV. The word is a part of the Bengali, Hindi, Marathi and Tamil tongue. In the past one year, LG has sold one lakh 20inch Sampoorna TVs, all in towns with a population of around 10,000. By the end of 1999, roughly 12Thats Rs 114 crore worth of TV sets sold in the villages in a year.

 LG India created Ballad, a flat screen television

model that sells only in the subcontinent and comes equipped with 2,000-watt speakers. Similarly, refrigerators in India have smaller freezers and big vegetable compartments -Indians prefer fresh food and a significant proportion are vegetarian. Colours, too, are chosen keeping market preferences in mind. White refrigerators, for instance, don't sell well in Kolkata and Punjab - while the sea air in Bengal corrodes the paint, the masalas used in Punjabi cooking discolour the fridge

awareness
Mobile vans-covering 5000 km every month

across India
It also tapped local forms of entertainment like

annual haats (40000)and fairs(20000) and made huge investments in infrastructure for distribution and marketing

availability
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

availability
LG India-tripled the number of its retail

& distributor outlets in rural areas from 2004 to2008.

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