PRESENTATION CONTENT• INTRODUCTION• COMPANY’S HISTORY• VISION AND MISSION• BUSINESS DIVISION• MARKETING MIX• COMPETITVE ANALYSIS• MARKET SHARE• FACTORS FOR SUCCESS• S.W.O.T ANALYSIS• CONCLUSION
INTRODUCTION• The company was originally established in 1958 as Goldstar, producing radios, TVs, refrigerators, washing machines, and air conditioners.• The L.G group was a merger of two Korean companies Lucky and Goldstar.• Is the second largest producer of television and third largest producer of mobile phones.
HEAD-QUARTERLG Electronics Inc. CEO: LG Group ViceLG Twin Towers Chairman Yong Nam20, Yeouido-dong, Yeongdeungpo-gu, Tel: 82-2-3777-1114Seoul, Korea 150-721 Website: www.lge.com Seoul Yeouido South Korea
L.G 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
VISION AND MISSION• Vision LG’s Vision is to become a worldwide leader in digital that ensures customer satisfaction through innovative products and superior services.• Mission To create value for customers. To respect human dignity. To become best in its field.
BUSINESS DIVISIONS L.G. GROUPL.G. ELECTRONICS L.G.TELECOM L.G.CHEM MOBILE INFORMATION AND COMMUNICATIONS ELECTRONIC MATERIALS DIGITAL DISPLAY CHEMICAL AND POLYMERS DIGITAL MEDIA LG SOLAR ENERGY DIGITAL APPLIANCES INDUSTRIAL MATERIALS
LG ELECTRONICS• HOME ENTERTAINMENT• HOME APPLIANCES
• MOBILE COMMUNICATION• AIR CONDITIONS & ENERGY SOLUTIONS
MARKETING MIX Mobile Phones RS 1000-32000Vacuum Cleaners Cooking AppliancesRS1000-15000 RS 2000-20000 PRODUCT & PRICE TV / Audio / Video RS 4000-150000Air ConditionersRS-15000-80000 Washing Machines Refrigerators RS 5000-30000 RS 6000-35000
PLACE• LG product available in lg retail showroom, malls ,private retail shop.• The services of LG are available in more than 110 countries of the world.• LG Electronics controls 114 local subsidiaries in india. PROMOTION• LG promote its product s through Newspaper, T.V., Radio, hording and taking part in events etc.
MARKET SHARE MARKET SHARE INHOME ENTERTAINMENT ELECTRONICS LG 1.4 2.3 SAMSUNG5.3 4.4 6.2 SONY 21.69.6 PHILLIPS 24.6 SANSUI VEDIOCON 23.6 BPL IGO ONIDA
LG: LOOKING GREAT Category Market share in volume termsCATEGORY LG NO. 2 PLAYERREFRIGERATORS 27.2% 21.2 (Whirlpool)COLOUR TVs 25.5% 22% (Sony)MICROWAVE OVENS 41.4% 19.7 (Samsung)WASHING MACHINES 34% 13.8% (Whirlpool)
Factors for success REGIONAL CHANNEL STRATEGY AND WIDE DISTRIBUTION NETWORK• LG has adopted the regional distribution model in India. All the distributors work directly with the company.• This has resulted in quicker rotation of stocks, and better penetration into the B, C, and D class markets.• LG also follows the strategy of stock rotation, rather than dumping stocks on channel partners.• LG has over 46 branch offices and another 110 area offices across the country.• LG had set a target of developing 2,000 dealers in 2004, in addition to the existing 3,000 dealers all over India.
INNOVATIVE MARKETING STRATEGIES To make itself a known brand in the consumer electronics sector, LG has taken innovative marketing and promotional initiatives: • Launch of new technologies in consumer electronics and home appliances. • LG was the first brand to enter cricket in a bigway, by sponsoring the 1999 World Cup, and followed it up in 2003 as well. • LG brought in four captains of the Indian cricket team to endorse its products. LG invested more than US$8 million on advertising and marketing in this sport. • LG has differentiated its products using technology and health benefits. The CTV range has ‘Golden Eye’ technology, air-conditioners have the ‘Health Air System’ and microwave ovens have the ‘Health Wave System’.
LOCAL AND EFFICIENT MANUFACTURING TO REDUCE COST• To overcome high import duties, LG manufactures PC monitors and refrigerators in India at its manufacturing facility at Noida, Delhi.• LGEIL had already commissioned contract manufacturing at Mohali, Kolkata and Bhopal for CTVs. This has helped LGEI to reduce costs.• LGEIL is implementing a “digital manufacturing system” (DMS) as a cost-cutting innovation.• This system is a follow-up to the Six Sigma exercise LGEIL had initiated earlier.
PRODUCT LOCALISATION Product localisation is a key strategy used by LG. • LG came out with Hindi and regional language menus on its TV. • Introduced the low-priced “Cineplus” and “Sampoorna” range for the rural markets. • LG was the first brand to introduce gaming in CTVs. In continuation of its association with Cricket, LG introduced the cricket game in CTVs.
R&D POTENTIAL• LG has set up research and development facilities in India at Bangalore and is in the process of setting up another at Pune.• Both the units carry out R&D work for the domestic market as well as for the parent company. It also does customised R&D for specific countries to which it exports products.
CORPORATE SOCIAL RESPONSIBILITY• Global Take-Back Policy• Guidance on the Disposal of End-of-Life Products• Recycled Plastic Applications
FUTURE PLANS• LG has a positive perception of India and the Indian consumer.• LG is making a foray into the e-commerce market in India and has partnered with various local websites like fabmall.com, rediff.com, indiatimes.com, and indiaplaza.com.• LG is also planning to invest over US$ 208 million in India over the next three years to expand the business.• Mobile software development is also on LG’s agenda.
S.W.O.T. ANALYSIS STRENGTHS• Market leader in home appliances.• Has got manufacturing unit in tax incentive .• Wide range of products to serve all categories.• Widest distribution network in the industry(47 barnches,10000 trade partners).• Good after sales service offered. WEAKNESSES• Samsung being its competitor provides similar products.• Consumers compare L.G with Samsung its Korean rival not with other global companies.• Lack of expert operators for complex machines due to illiteracy and lack of training in India.
OPPORTUNITIES• Fast growth of the home appliances market• Shifting to rural areas• Thus maintaining control over the market and the highest share in home appliances market THREATS• Close competitors like Samsung are compared to it.• Price war with Samsung.• Competition from Indian brand and other foreign brands.
CONCLUSION• Mobile Phones Nokia is the market leader, followed by Sony Ericsson.• LG is an emerging player Direct competition with Samsung, owing to similar user perception• Refrigerators LG is the dominant player in the market Other Players have a segmented market share Unstructured Positioning of all other Players
• Air Conditioners LG is the dominant player in the market Closer user perception shared with Voltas LG rated low on Technological aspects like Noise Levels Hitachi was positioned high for producing low Noise Levels.• LCD Television Sony is the Market Leader in LCD TV segment. Samsung – LG, very similar user perception, directly competing with each other