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LG Consumer durables:Home appliances Marketing Analysis
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LG Consumer durables:Home appliances Marketing Analysis
- 1. LED I LCD| PLASMA | REFRIGERATOR | AC |WASHING MACHINE | HOME ENTERTAINMENT | SPEAKERS | MP3 PLAYERS |
- 2. What are ConsumerDurables ? • Mass market heavy goods intended to last three or more years • Also known as hard goods or durable goods- Classification as below WHITE GOODS •AIR CONDITIONERS •REFRIGERATORS •WASHING MACHINE •SEWING MACHINE •WATCHES AND CLOCKS •CLEANING EQUIPMENT •OTHER DOMESTIC APPLIANCES BROWN GOODS •MICROWAVE OVEN •COOKING RANGE •CHIMNEYS •MIXERS •GRINDERS •ELECTRONIC FANS •IRONS CONSUMER ELECTRONICS • TVs •AUDIO-VIDEO SYSTEMS •ELECTRONIC ACCESSORIES •PCs •MOBILE PHONES •DIGITAL CAMERAS •DVDs •CAMCORDERS CONSUMER DURABLES
- 3. INDUSTRY ANALYSIS •India fifth largest consumer durable Market • Market is expected to reach US $12.5 billion by FY 15 from US $7.3 billion in FY 12. • Urban and rural market growing at the rate of 15% on average • Urban growth driven by new technology innovative products • Rural market has recently shown a 30% growth rate in demand for home appliances • Demand likely to rise in the coming years- Government of India Investment in rural electrification 65% 35% SHARES IN THE CONSUMER DURABLES MARKET IN INDIA (FY 14) URBAN RURAL
- 4. SWOT ANALYSIS OFCONSUMER DURABLES HOME- APPLIANCES SECTOR: INDIA STRENGTH WEAKNESSES OPPURTUNITIES THREATS Presences of established distribution networks in both rural and urban areas Demand is seasonal and high during festive seasons Lower penetration level of White goods compared to other developing companies Higher import duties on raw materials imposed Presences of well known Brands Poor Government spending on infrastructure Rapid urbanization Cheap import from China Increase in market share by the organized sector visa vise the unorganized sector Low purchasing power of customer Increasing purchasing power of consumer and easy availability of Finance Poor infrastructure ; scarcity of power supply
- 5. MAJOR PLAYERS ININDIA
- 7. LG 1.Product •Product differentiation: AC and Microwave • Product localization: regional language menus • First to introduce gaming in TVs. 2. Price • Pricing strategy: cost + fixed markup
- 8. LG 3. PLACE Regional Distribution model in India Quicker rotation of stocks- strategy of stock rotation LG Electronics controls 114 local subsidiaries in India 4.PROMOTION LG promotes its products through Newspaper, T.V., Radio, hording and taking part in events . LG going beyond traditional routes of marketing campaigns by logging on social media platforms to tap young consumers. Sponsored 1999 Cricket World Cup as well as 2003
- 9. LG- STP Focus on the premium segment of the market-greater margin opposed to volumes SEGMENTATION TARGET POSITION •Consumer durables: Home appliances •Upper class segment •Consumer more concern of life style product. •Consumers who want quality product at the best price. • Consumers who are more concern of safety and health issues. •Now shifting to mid class segment-mass market product. •Tagline Life’s Good •Product with health benefits •Brand is young, vibrant and premium •Differentiated product using technology and health benefits.
- 10. • Refrigerator •AC • Microwave oven • Washing Machine • Vacuum Cleaner • Home entertainment • Camera • Monitor • Cell phone • Pen drive • Water purifier BCG Matrix Of LG
- 11. S W S.W.O.T.ANALYSIS OF LG O T I. Strong presence in LED segment (24.2%) II. Strong Distribution network (20,000 retail points) and after sales service III. Strong focus- technology and quality IV. High Advertising Budget (550- 600 Cr.) V. Good product features and value for money I. Low profit margins within the category II. Late entrant into audio market (17.3% MS) III. R&D challenges from Korean counterparts I. Fast growth rate of home appliances-emerging market II. Growing rural market (39.8%) III. Upgrade shift (from CRT-LCD; LED) I. Emerging domestic players in the market II. Highly competitive industry dynamics III. Substitutes (Laptops & Mobiles) IV. False green claims can erode brand value and consumer trust
- 12. FLAT PANEL TV 21% 22% 13% 21% 9% 14% LG SONY VIDEOCON PANASONIC OTHERS 28% 19% 21% 10% 23% AC LG SAMSUNG VOLTAS HITACHI OTHER REFRIGERATOR 23% 20% 16% 3% 18% 20% LG SAMSUNG OTHERS VIDEOCON GODREJ WHIRLPOOL MICROWAVE OVEN 29% 11% 17% 15% 27% LG SAMSUNG WHIRLPOOL GODREJ OTHERS Market Share
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- 15. Which company doyou feel is a strong competitor of LG ? -Samsung Which factor do you consider while purchasing a home appliance ? -Product features You came across LG from : -TV ads From where do you prefer shopping ? -Authorized dealers Rate LG products ? -Good