LG Rural Marketing Sufiyan

7/28/2019 LG Rural Marketing Sufiyan

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Sufiyan Alsulkar

Prashant Bansode

Lalit DixitArchana Kane

Akbar Khan

Arif KhanZameer Alam Khan


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Deals with delivering manufactured goods/services to

rural producers

Involves an urban to rural activity

Not much developed in India


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Motor dealers to set up compact F1outlets for Nano

August 2008, Kolkata

* Will opt for a hub and spoke model to marketNano inRural Areas

* Smaller showroom to set up in surburbs and Rural Areas

* Sources stated some dealers already acquired space in

these areas

* Company believes : Majority sales would come from

Rural India


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Airtel promoting mobile telephony in rural markets6th August 2008, Chennai

* New Scheme, Grameen Mobile Puratchi

announced topromote mobile telephony in rural market of TamilNadu

* Will offer customised services to target the farmers* Airtel connection will provide agricultural

information* Other services would offer : weather report, farming

techniques, rural health initiatives, animal husbandry,etc


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Santro launches new initiative to tap rural market

July 2008

* Launched a marketing initiative: Ghar Ghar kiPehchaan,

(Valid till 31st July 2008) for tapping rural market

* Rolled out special scheme for government employees in

ruralIndia on purchase of the car

* Planned to touch 58% of Indian villages

* Promoted the scheme through road shows, posters, etc


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Himalaya gets ready for Rural Play

June 2008, Bangalore

* Launched SBU for expanding into smaller towns andhinter

land districts

* Rural share of Indiaspharma market rose from 18% to21%

* Survey stated, rural market would contribute as much as

metros

* The districts covered up would rise to 400 from 250


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Maruti to focus on Rural Areas to gear up car salesJune 2008, New Delhi

* Launched a PAN India campaign to tap the vast potential

ofthe Rural market

* Conducted a 6month pilot project to increase sales

* Aimed to position itself as the first mover in villages

* Maruti roped in large number of rural banks to increasethe

finance penetration

* Offered cash discounts and other promotional schemes


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Pharma firms see big gains in small towns6th June 2008, Ahemdabad

* Lack of infrastructure helped to expand their network

* Challenges in rural areas : inadequate infrastructure,connectivity

problem, unavailability of stockists, reaching the ruralcustomers,

accessibility of doctors, etc* Focus of Rural Marketing : U.P, M.P, Maharashtra, andNorthern

and Southern region


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LGs Rural thirst helps drive salesJuly 13, New Delhi

* Company registered a little growth from the rural markets

* Moved its focus to interior of India after establishing inurban

market

* Focuses to penetrate into deeper India after establishing

inurban area

* Rural thrust was strong with Sampoorna T.V

* Geographical reach of the company helped matters


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Rural pop is about 73% of the total pop

Total turnover of Rs.4500 Crore & share of 55 %

corporate houses perceived great opportunity

Urban4%, Rural11%

long thought luxury -become a household sight

With 128 million households, the rural population is

nearly three times the urban(MNC)


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Increase in income

Growth in education

Enlarged media reach

Growing interaction with urban area

Marketers s effort to reach rural areas


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The growing oppurtunity, one main driver

Heat of competition in the urban market


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Bihar - Horlick

Punjab - Washing Machine


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LG is a South Korean MNC

Worlds 3rd largest appliance maker

LG electronics India was established in January

1997

LG India deals in many products

AC

Flat Panel Display

Microwave Oven


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Refrigerator

Television

Vacuum Cleaner

Washing Machine Mobile Phones


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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 andother 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.


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Mobile Van at Kasargod

1000 In StoreDemonstrators at Dealercounters in Rural Cities

Promotion ofSampoorna TVs

Cookery Classes at

different locations forRural Housewives


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Mobile phone market

penetration strategies

LG-BSNLReliance tie up for rural

market.

Handsets which are cheap and with offers

are provided to the rural customers.


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Customization

Positioning

Innovative marketing

Product localization - Productlocalization is a key strategyused by LG. It came out withHindi and regional languagemenus on its TV.

Regional distribution model -This has resulted in quickerrotation of stocks and betterpenetration into the B, C andD class markets.


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Population Number of Villages % of Total

Less than 200 114267 18.00%

200-499 155123 24.30%

500-999 159400 25.00%

1000-1999 125758 19.70%

2000-4999 69135 10.80%

5000-9999 11618 01.80% 10000 and above 3064 00.50%

Total 638365 100%


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LGs 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%


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Political Factor High Import Duty Plants in tax- Incenticve areas like greater noida

and pune. Export promotion schemes of the Indian Govt

like EPCG(Export Promotion Capital goodsscheme) and EOU (Export Oriented Unit) status.

Economic Factor Increase in per capita income Growing GDP high disposable income Increase in Spending Power


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Socio Cultural Factor

They are manufacturing Eco friendlyProducts.

Increased Life Style.Technological Factor.

Improvement in Technology made the

electronic product cheaper. Quality of product has been increased


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Strenght Market leader in home appliances segment. Manufacturing unit in tax incentive areas. Wide range of products categories to tap the consumer of

middle class, Upper Middle Class and High Class. LG, having the widest distribution network in the

industry (47 branches, 175 area offices and over 10,000trade Partners).

Shifting to Rural Market.Weakness Consumer Compare LG products with its competitor

Samsung, not with other foreign brand. Similar Product Categories are compare to its close

competitors Samsung.


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Opportunity:

Shifting to rural Market

Control over the white goods market, as we knowhighest market share in home appliance market

Home Appliance Market is growing very fast, sothere is a opportunity for LG to launch new products.

Threat:

The Closest Competitor Samsung is also from south

Korea and consumer compare LG to Samsung Price war with its closest Competitor, Samsung.

Competitions from Indian Brand and From newEntrants.


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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


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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 makingthat kind of products in which there is less usage of

power


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Launch more models in their Sampoorna television

range.

Rural market is less affected than urban market in

slowdown. Then makes distribution network morestrong.


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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


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Invest Rs 400 crore on Marketing this year

compared to Rs 350 crore in 2008

Launching 2 by 10 Blue Ocean Strategy

LG Rural Marketing Sufiyan

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