DESK RESEARCH ON STP AND CHANNEL DESIGN OF

LG

BY-SHAHBAAZ AHMEDSUNDRAM SINHASALONI RAMAN MISHRARAJNI VASHISHTSHRAVAN KUMAR SWATI SHARMA

INTRODUCTION1.MARKET LEADER OF CONSUMER DURABLES.

2.INNOVATOR IN IT AND MOBILE COMMUNICATIONS.

3.LG ELECTRONICS INDIA PVT. LTD., SUBSIDIARY OF LG ELECTRONICS, S. KOREA, ESTABLISHED IN 1997.

4.MERGER OF 2 KOREAN COMPANIES , LUCKY AND GOLDSTAR.

5.CEO- GROUP’S VICE CHAIRMAN YONG NAM.

INTRODUCTION6.STARTED THE PRODUCTION OF ECO-

FRIENDLY REFRIGERATORS AND ESTABLISHED ASSEMBLY LINE FOR ITS PC MONITORS AT G. NOIDA MANUFACTURING UNIT IN 2001.

7.2ND MANUFACTURING UNIT IN PUNE IN 2004.

HOME ENTERTAINMENT

HOME ENTERTAINMENT

• HOME APPLIANCES

MOBILE COMMUNICATION

• AIR CONDITIONS & ENERGY SOLUTIONS

SEGMENTATIONGEOGRAPHIC

• URBAN

• (TIER 1 TIER 2 CITIES)

• RURAL

DEMOGRAPHIC

• INCOME

• (HIGH, MIDDLE CLASS)

• AGE GROUP

• OCCUPATION

PSYCHOGRAPHIC

• LIFESTYLE

• PERSONALITY

BEHAVIORAL

• OCCASION

• BENEFITS

TARGETING ON THE BASIS OF THE PRODUCT THAT THEY ARE OFFERING TO THE CONSUMERS.

CONCERNED OF SPECIFIC LIFESTYLE PRODUCTS.PLASMA TV, LCD, TV DIOS RFRIGERATORS

UPPER CLASS WHO WANTS

QUALITY PRODUCT AT THE BEST PRICE

PREMIUM

CLASS

POSITIONING1.TAGLINE- “LIFE’S GOOD”.

2. DIFFERENCIATE THE PRODUCTS ON THE BASIS OF TECHNOLOGY WHICH APPEALED TO THE CONSUMER ON THE BASIS OF HEALTH BENEFITS.

3.CORPORATE PHILOSOPHY TO MAKE PEOPLE’S LIVES BETTER, CONVENIENT AND HEALTHIER.

4.YOUNG, VIBRANT AND PREMIUM. Eg- ABHISHEK AS BRAND AMBASSADOR, USE OF CHILD IN TV ADS.

POSITIONING1.“HEALTH” AD CAMPAIGNS

2.“GOLDEN EYE TELEVISIONS” TO REDUCE EYE STRAIN.

3.“HEALTH AIR AC’S” AS ANTIBACTERIAL FILTER.

4.“HEALTHWAVE SYSTEM” IN MICROWAVE OVENS.

5.SPONSORSHIP OF INDIAN CRICKET TEAM IN ICC WORLD CUP 2003.

6.DISCOUNTS DURING DIWAALI FESTIVAL.

CHANNEL DESIGN1.DIRECT DEALER CHANNEL-

2.SUB DEALER/ DISTRIBUTOR CHANNEL

DISTRIBUTION NETWORK1.REGIONAL DISTRIBUTION MODEL- ALL

DISTRIBUTORS WORK DIRECTLY WITH THE COMPANY.

2.46 Branch Offices and Another 110 Area Offices Across the Country.

MARKETING CHANNELManufacturer

Direct Channels Indirect Channels

DirectSales

OnlineMarketing

Telemarketing

Manufacturers’Representatives

IndustrialDistributors

Customer Segments

DIRECT CHANNEL1. STORES THAT DIRECTLY SELLS TO END CONSUMERS.

2. EXCLUSIVE STORES OR SHOWROOMS- MORE FOCUS FOR

PROFITABILITY AND LARGE VOLUMES.

3. MULTI BRAND SHOPS.

4. 34 % OF SALES .

ADVANTAGES-a)NO LOSS OF MARGINS THROUGH INTERMEDIARIES.

b)COMPLETE CONTROL OVER DISTRIBUTION PROCESS.

DISTRIBUTOR CHANNEL1.SMALL RETAILERS WHO LACKS CAPITAL TO BUY

DIRECTLY FROM LG.

2.DIRECT DEALERS HAVE ATLEAST ADDITIONAL 3 % MARGIN.

3.49% OF SALES.

ADVANTAGES-a) ALLOWS PENETRATION OF FRAGMENTED DISPERSED

MARKET.

b) EASES LOGISTICS FOR BUYERS WHO BUY DIFFERENT ITEMS.

PROCESS OF DISTRIBUTIONGOODS ARE DISPATCHED TO C/F’S ON CONSIGNMENT BASIS.

DISTRIBUTORS SOURCE THE ORDER OF GOODS FROM THE WAREHOUSES SERVED BY C/F’S

RETAILERS ORDER THEIR REQUIREMENT FROM DISTRIBUTORS.

GOODS ARE BOUGHT BY THE CUSTOMERS FROM RETAILERS.

MARKETING STRATEGY1.OBJECTIVE- FOCUS ON INNOVATION TO

ATTRACT MORE TECHNOLOGY SAVVY CONSUMERS. AND THE COMPANY IS ASPIRING FOR- KEEP INNOVATING.

2.SET ITS SHORT TERM AND LONG TERM TO RANK AMONG TOP 3 ELECTRONICS, INFORMATION AND TELECOM FIRMS IN THE WORLD.

E-CHANNELS1.SOCIAL NETWORKS

2.VIDEO CHANNELS- YOUTUBE.

3.MOBILE APPS AND WIDGETS.

COMPETITIVE ANALYSIS

MARKET SHARE

LG26%

SAMSUNG23%VIDEOCON

17%

ONIDA9%

OTHERS25%

Sales

LG SAMSUNG VIDEOCON ONIDA OTHERS

MARKET SHARE AS CATEGORIES

1. NO. 2 PLAYER IN MARKET SHARE (VOLUME TERMS)

2. SAMSUNG IS THE MAIN COMPETITOR OF LG ELECTRONICS IN INDIA.

3. SAME TARGET AUDIENCE AND PRODUCT CATEGORIES.

SWOT ANALYSIS

STRENGTH• WIDEST

DISTRIBUTION NETWORK.

• WIDE RANGE OF PRODUCT CATEGORIES

WEAKNESS• COMPARISON

WITH RIVAL COMPETITOR SAMSUNG .

• SIMILAR PRODUCT CATEGORIES AS COMPARED TO ITS COMPETITORS.

OPPORTUNITIES• SHIFT TO

RURAL MARKET

• GROWTH OF HOME APPLIANCES MARKET TO LAUNCH NEW PRODUCTS

THREATS• PRICE WAR

BETWEEN PRODUCTS.

• COMPETITION FROM NEW ENTRANTS.

BCG MATRIXQUESTION MARKS- LG COMPUTERS

STARS- LG LCD TELEVISION

CASH COW- WASHING MACHINES, REFRIGERATORS, MICROWAVE OVENS.

DOGS- LG MOBILE