Lg_Rural_Strategy

LG – RURAL MARKETING STRATEGY LG Electronics India Pvt. Ltd. Is all set to be a market leader in technologically superior electronic products with focus on high end products and impetus on quality, service and value for products. The company is consciously targeting the quality market and the value market with specific products. TARGET MARKET The Indian rural market is growing at a very fast pace and LG targets it with high technology products at a reasonable price. It is also training its sights on the institutional and governmental segment anew. The idea is to grow sales from the institutional segment from 5% to 10% the next year. As part of its strategy to tap the rural markets, it has initiated steps in Andhra Pradesh, Tamil Nadu, Punjab and Haryana, mainly targeting the rich and the middle class of agricultural segment. COMPETITON Apart from the technology edge, LG is banking on its grassroots-level marketing to edge out competing heavyweights like BPL, Videocon, Samsung and Whirpool. According to Brand Scan 2001, a comprehensive study of consumer durable conducted by the Chennai based Francis Kanoi market research firm, whats worked in LG’s favor is its positive image on the technology platform. Among refrigerators, LG has outperformed other brands on the status parameter since 1999, acquiring the status of the fourth most favored brand in the country. It has also become the fourth most favored brand among intending buyers. On top-of-mind awareness, Kelvinator and LG are the only two brands that show an upward movement on top-of-mind awareness. LG’s penetration and perception is not restricted to just high-income segments, but villages and lower-income households too. It has also been the fastest growing CTV brand. PRODUCT Human touch is high on the company’s agenda and the product image is based on human aspects and health. There is the wrinkle free TV, The Golden Eye, which has colors changing according according to ambience. The ‘Preserve Nutrition System’ in LG’s refrigerators with a moisture controller and the plasma conditioners with special features such as bacterial filters in their ACs are dominating the rural market. Keeping in view the high electricity tariff rates, the focus has been to introduce energy saving and eco friendly products. To retain tight grip on the volume segment, the low-prices Sampoorna TV has been relaunched as Cine Plus at Rs. 5000-7000 tag and sub-300 litre refrigerators have also been rolled out. PRICE The newly defined mantra is cost-innovation – from implementing higher technology efficiencies, to reducing design-related frills, to purchasing cheaper components, to more effective HR policies. It requires a lot of skills to cut costs. Without denting profits significantly, LG has managed to cut consumer prices of air conditioners by 20% and of color televisions by 15%. On the immediate agenda is the commencement of its Digital Management System (DMS), a cost-cutting technique that would lead to shorter assemble lines, higher productivity and reduced manufacturing costs by 30%. Its implementation will result in an additional 5% reduction in prices across CTVs, refrigerators and washing machines. PLACE A recent move towards broadbasing penetration has been setting up area offices in 50-plus regions across 83 territories. Also, it has rolled out another 15 LG Shoppes, up from current 35. LG has quality marketing and swift after sales service. It respond to customer complaints within 24 hours in 95% of the cases. It already has about 100 service centres in the country to cater to the consumers and intends to open more. PROMOTION LG’s health-centered communication has been taken forward to give an eco-friendly tack. It is planning to reduce advertising and promotion budgets in the forthcoming months and concentrating more on grassroots-level marketing. It has also launched a series of 40 road shows in four southern states targeting small towns. The road shows showcase entire LG range of products and costs Rs. 3.5 lakh per town. This marketing initiative spans a period of 45 days.