The document discusses LG Electronics' strategy for tapping the rural Indian market. It highlights that rural India accounts for over 70% of the population and presents a large business opportunity. LG customized its products and marketing for rural consumers by developing affordable TV models priced at Rs. 3000-4900, establishing extensive distribution networks, and using mobile vans and local events to create awareness. LG also localized its products and menus to rural needs and preferences. This comprehensive rural strategy helped LG increase its rural sales contribution and emerge as a leader in the Indian consumer durables market.

1. Ruchi
Kapil
Sahil
Pankaj
‘Mansi
Shivani
Dhiraj
Saumya
Ashish

2. Rural pop is about 73% of the total pop

Total turnover of Rs.4500 Crore & share of 55 %

corporate houses perceived great opportunity

Urban – 4%, Rural – 11%

long thought luxury -become a household sight

With 128 million households, the rural population is

nearly three times the urban(MNC)

3. Availability
•
To tap these unexplored country markets, LG has set up 45 area offices and 59
rural/remote area offices. 230 service centres.
Affordability
•
Cineplus- Rs 4900
Sampoorna- Rs 3000
Acceptability
•
LG Electronics in 1998 developed a customised TV “Sampoorna” for the rural
market. It was a runway hit selling 100,000 sets in the very first year.
Awareness-
•
Mobile Vans(Garam Garam Khana)
Exhibitions , Road Shows

4. inc in income

growth in education

enlarged media reach

growing interaction with urban area

marketers „s effort to reach rural areas


5. The growing oppurtunity, one main driver

Heat of competition in the urban market


6. Bihar - Horlick

Punjab - Washing Machine


7. LG is a South Korean MNC

World‟s 3rd largest appliance maker

LG electronics India was established in January

1997
LG India deals in many products

AC

Flat Panel Display

Microwave Oven


8. Refrigerator

Television

Vacuum Cleaner

Washing Machine

Mobile Phones


11. • LG India- tripled the number of its
retail & distributor outlets in rural
areas from 2004 to 2008.
• 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.

12. 1000 In Store
Demonstrators at Dealer
counters in Rural Cities
Mobile Van at Kasargod
Cookery Classes at
different locations for
Rural Housewives
Promotion of
Sampoorna TV’s

13. Mobile phone market
penetration strategies
• LG-BSNL –Reliance tie up for rural
market.
• Handsets which are cheap and with offers
are provided to the rural customers.

14. Customization
•
Positioning
•
Innovative marketing
•
Product localization - Product
•
localization is a key strategy
used by LG. It came out with
Hindi and regional language
menus on its TV.
• Regional distribution model -
This has resulted in quicker
rotation of stocks and better
penetration into the B, C and
D class markets.

15. Population Number of Villages % of

Total
Less than 200 114267 18%

200-499 155123 24.30%

500-999 159400 25.00%

1000-1999 125758 19.70%

2000-4999 69135 10.80%

5000-9999 11618 1.80%

10000 and above 3064 0.50%

Total 638365 100%


19. LG’s turnover 2002 - 60%

Today – 40% (urban)
Turnover of 10,750 crore (2008)

13,000 crore (2009)
Sales contribution – 35% (2008)

Manufacturing capacity – 30% by 2009

By 2009-10, urban – 4%

rural – 11%

21. Giving Hindi names to the products

How have they reduced cost without affecting the

quality
Videos

Focus the Melas and focus them

Play with their emotions with Ads


22. Introduction of finance schemes

To roll out several new models in low-end segments

Colour televisions and audio systems will have a

big market due to their low pricing policy.
Schemes like giving trial of products, and making

them aware of usage of products
The main challenge is electricity or power making

that kind of products in which there is less usage of
power

23. Launch more models in their “Sampoorna television

range”.
Rural market is less affected than urban market in

slowdown. Then makes distribution network more
strong.

24. Invest $ 40 million in 2009

Expecting Rs 13,000 crore turnover in 2009

15% plus growth rate in rural marketing

Decided to double business by 2010

Launching 5 new Models in Flat Panel Display

Form new kitchen appliance business group

Focus on low-end products


25. Invest Rs 400 crore on Marketing this year

compared to Rs 350 crore in 2008
Launching 2 by 10 Blue Ocean Strategy
