Overview of companyCompany was started in 1952.Lucky chemicalindustrial corporation plastic industry in KOREA.The company moved into electronics with a newbrand name in 1958. In 1959, the company produced South Koreas LGElectronics was established in 1958 as Gold Star. It was a manufacturer of refrigerators, TVs, airconditioners and washing machines. LG Group is the merger of Lucky and GoldStar, two Korean companies first radio.
• L is taken from Lucky and G from GoldStar whichformed LG Group.• "Lifes Good" is the slogan of the LG Electronics.• Before the name of LG Electronics, Electronic goodswere sold under the name of Lucky and similarlyhome appliances were sold under the name of GoldStar.• Gold star produces Interactive Multiplayer whichwas costly but it was very successful.• In 1995 Gold Star was renamed as LG Electronicsand owned Zenith Electronics of USA.• LG Electronics sponsors sports in different fieldssuch as football, cricket and racing etc
• LG comprises five business units. Home appliances,mobile communication, homeentertainment,airconditioning,and business solutions.• . The mobiles of LG are becoming popular in thetelecommunication market due to its quality andadvance features.• The division of home appliances manufacturesproducts such as air conditioners, refrigerators, ovensand washing machines for home users.• North America is the larges market for homeappliances division of the company.• There are more than 75 subsidiaries of the company inthe world which designs, manufactures, market andsells televisions, different electronic products, homeappliances and telecommunication devices.
• LG Electronics is the owner of ZenithElectronics and have a joint venture with PhilipsElectronics under the name of LG Display. Boththe companies are putting their effort inmanufacturing and developing the quality oftheir products. Some important subsidiaries ofLG Group are LG Electronics, LG Telecom, LGChem and Zenith Electronics in more than 80countries.• LG is one of the most aggressive advertisers inthe white goods industry, spending close to 5 percent of its revenue on marketing activities --thats Rs 130 crore (Rs 1.3 billion) last year.
• A close tie up with cricket ensured the brandbuilding exercise would score well on consumerrecall -- apart from signing on leading Indiancricketers, LG also launched a cricket game onone of its television models.• Point of sales promotions were also extensivelyadvertised to ensure customers were tempted tovisit the stores.• For customers, though, the direct approach ispreferred. The advantage of an extendeddistribution network is that marketingexecutives can keep a finger on the pulse of themarket. Promotions and finance schemes aredesigned to suit the needs of local customers.
• LG has been careful right from the start to offercustomers a "value-plus" proposition.• The company was ready to do battle on two flanks:it offered modern, features-packed products, at thesame time keeping its margins wafer-thin. Evencompetitors accept the merit of the tactic.• 70 per cent of its product line is produced locally,with the rest imported from China, Korea andTaiwan. In refrigerators, 95 per cent of thecomponents are localized. All of which also helpkeep prices down.• Flexibility and adaptability have provedindispensable for LG Electronics, whether in theshowrooms or on the shop floor.
• Multi-product lines ensure that in-demand productscan be given priority.• multi-product lines come with their set ofproblems, but LG encourages the shop floor workersto seek solutions at their level.• when the line is switched from TV sets tomicrowave ovens. All fittings on the TV are donefrom the back, while a microwave requires workfrom the front.• When the lines are switched -- the process takes lessthan 10 minutes -- the workers dont move to theother side. Instead, theyve placed mirrorsstrategically so that they can continue working onthe same side, looking at the reflection.
MAIN PRODUCTS OF LG• Home entertainment:-LCD TV, plasma TV,vedio,audio,optical storage.• Mobile communications:-mobile handset(CDMA,GSM,3G),mobileaccessory, will• Home appliances:-refrigerator, washing machine, cookingappliances,vaccum cleaners• Air conditioning:-residential airconditioners,commercialconditioners, home sollutions,compressors
• Business solutions:-Monitors, commercial displays, carinfotainment, security business
MISSION OF THE COMPANY• LG’S mission is to be recognized as the leader indevelopment of global communicationsproducts, and to sustain their leadership position inKorea’s telecommunications market• To create value to customers.• To respect human dignity.Our mission is to be recognized as the leader in development of global communications products, and to sustain our leadership position in Korea’s t
VISION OF LG• Its vision is to becoming world wide leader in digitaland ensuring customer satisfaction throughinnovative products and superior services whileaiming to rank among the worlds top in three caseelectronics, information and telecommunicationfirm.• They hold the tight philosophy of “GREATCOMPANY GREAT PEOPLE”.• LG pursue the vision of becoming a true globalleader attracting customers world wide through itsinnovative products and design.
Product strategy• Provide world class products to middleclass andupper-class to enjoy luxury in their life.• LG also ensures that whatever product they marketshould be durable enough which quite last manyyears and give free services to their customers.• In case of refrigerator they provide five yearscompressor guarantee and one year free services inspare parts.
PRICING STRATEGY• LG follows pricing policy in which their formulais import cost reasonable gross profit to covertheir market expenses and also give themreasonable profit.
PROMOTION STRATEGY• Sales promotion strategy concerned it is beingdesigned and implemented by their respective agentof their each products.• They offer very handsome incentive to theirdealers, who in return push their products amongthe customer and thus they get their desiredvolumes.• Due to being a multinational company and as part oftheir global strategy ,most of the time divert theirfunds from strong market and spend more on weakor underdeveloped markets.
LG NEW MARKETING STRATEGY• Global and regional digital leader, LG Electronics, hasannounced a new marketing initiative to ensure its homeappliance business rakes in USD14 billion in global salesby 2007 to become the worlds largest appliancemanufacturer.• LGs new strategy aims to focus on the premiumsegment of the market that fetches greater margins asopposed to volumes.• . LG enjoys high brand recognition in the region, it is thesecond most recognized electronics brand with 55.7 percent unaided brand awareness according to the 2004Gallup brand equity index survey, which represents highpurchasing probability for its premium products.
• LG is already the worlds top selling brand in termsof air conditioners, microwave ovens and canistervacuum cleaners.• The goal of LGs Digital Appliance Company is tobecome the number one brand worldwide in thehome appliance sector by 2007 and increase globalsales to US$ 14 billion.• They are focusing our production and marketingefforts on high end products in the appliancesmarket. To keep pace with our growth, we now needto fine tune our marketing strategy and focus onpremium products,"
• To succeed in its premium marketing efforts, Parksaid LG would concentrate on staying ahead of thetechnology curve and develop products that deliverhigh value to consumers.• LG has developed a CRM program called theDiamond Club to drive the sales of premiumproducts. Sustaining one market price in allstores, maintaining a price gap with maincompetitors to retain a premium image, uniquepromotions for target customers and well-trainedcustomer care executives are features of this channelinitiative.
GROWTH STRATEGY• According to South Korean LG’s own website, LG isin pursuit of becoming a Top 3 electronics andtelecommunications company by the year 2010.• They are doing using two growth strategies:• “Fast growth”• “Fast innovation”
BRAND MANAGEMENT STRATEGY• The company will work closely with its global networksto present the brand campaign direction for eachsubsidiary besides sharing and benchmarking marketingsuccesses to improve global brand campaigns.• LG has also set up a management system, to manage itsglobal brand campaigns in real time and has rolled outan integrated Brand Communications Guideline andslogan, Lifes Good.• They aim to be among the top three consumerelectronics manufactures in the world LG ElectronicsMiddle East and Africa Operations. Their global publicrelations mission is to empower the LG brand; they willimplement strategies to increase brand recognition andposition LG Electronics as a digital convergence leader.
• LG is a responsible corporate citizen and they willcontinue to undertake activities that promotesustained exchanges with regional communities.
SUPPLY CHAIN MANAGEMENT SYSTEM• LG Electronics is one of the company which tries toreduce fraud and mis-handling of inventoryproblems in its global operations system.• According to Korea Times, the worlds No. 3 flat-screen TV and No. 4 handset maker, is determinedto implement a global supply chain planning systemin place to achieve its goals.• LG can increase the productivity by 10 percent bycutting inventory levels and lead times, and to checkthe current status of product shipments in real-time.