PRODUCT MARKET STRATEGY

PREPARED BY-

SHRUTI SRIVASTAVA 139

BHAWANA MALLIK 154

BYAPTI BIRLIPTA 165

ANSULA MOHANTY 180

LG : OVERVIEW

The LG Group : South Korea’s third largest conglomerate.

Produces electronics ,chemicals, and telecommunications products

Operates subsidiaries like LG Electronics, LG Telecom, Zenith Electronics and LG Chem in over 80 countries

LG Group sponsors the LG Cup Baduk Tournament.

WHY A PRODUCT STRATEGY ?Where are we headed?

To lead consumer durables space .(Aspirational)

How we will get there? The core strategy

Customer target (premium customers)

Competitive targets ( IT and PC’s, GSM)

What we will do?

How to implement the core strategy?

BRAND LG

May 1997 – Nationwide launch-22,300 crore business -2008

Top line growth-50 cr – Rs 9500 cr in 2007.

Leader in CE (11600 Cr.)and HA(10700 Cr)

To be an “aspirational brand”

Shift from CE&HA to PC & Mobile player

NEED OF STRATEGY

Internal coordinationOptimize resource utilizationTo take on with competitors

SENSIBLE STRATEGY

What competitor cannot do.Competitor will choose not to do.Will be at a disadvantage if they do it.

ELEMENTS OF A PRODUCT STRATEGY

A statement of the objective's the product should attain.

Selection of strategic alternatives

Selection of target customers

Statement of the core strategy

Description of supporting marketing mix.

Description of supporting functional programs

SETTING OBJECTIVESCorporate Objectives

Corporate Strategies(premium and reliable customers)

Divisional Objectives

Divisional Strategies

Brand Objective

Brand Strategies

Program

Tactics

CORPORATE &DIVISIONAL OBJECTIVES

To grow annually by 20% for 3 years

Contribution to 10% from 4%

8% rev. target from GSM-2008

18% rev. target from IT &PC -2008

5 million handsets –GSM

12 million handsets- CDMA

5% of PC market of 60 million mkt.- 2%

BRAND OBJECTIVE

To attain technology leadership

MASS MARKETER IMAGE

PREMIUM/ASPIRATIONAL STATUS

CORPORATE STRATEGIESPremium and reliable customers.

380 cr. ad spends

120 cr R&D spend (5% of revenue on ad.)

Support CSR

Rs 17000 cr sales in 2008 from GSM,PC, & IT

Brand Objective

Rand identity house.

By separating mktg. from sales, concentrating on brand.

Divisional Objectives

SELECTION OF STRATEGIC

ALTERNATIVES

Long term profits

Growth in sales/mkt share

Efficiency short run profits

Mkt development Mkt penetration

New segments

Convert non users

Existing customers

Competitors’s customers

SELECTION OF STRATEGIC ALTERNATIVES

New segments- Blue Ocean strategy

Existing customers Need Gap Analysis

Competitors customers

EFFICIENCY IN THE SHORT RUN/

PROFITS

Decrease inputs Increase outputs

Reduce costs Improve asset utilization Increase price Improve sales mix

INCREASING SALES/MARKET SHARE

Market Development StrategiesAimed at non customers

Develop segments previously ignored.

Market Penetration StrategiesIncrease the usage rate of the existing customers, ( larger pack size)

Attract competitor’s customers

INCREASING PROFITABILITY

Decreasing Input

Cost Reduction

Improve asset utilization

Increasing the Outputs

Increase prices

Improve the sales mix

SELECTION OF THE TARGET CUSTOMER

Choice of target customer

Choice of competition target

Positioning takes into account - The core strategy

POSITONING THE CORE STRATEGY

Cost /price strategy

Non price strategy

COST/PRICE DIFFERENTIAL ADVANTAGE

Very successful strategy in India.

Not all companies can offer this strategy

High volume may help achieve the strategy.

More investment in facilities.

Reduce overheads.

Product manager has to work with supplies.

Involves risks: Competitor may copy the technology, changing tastes, size of the price sensitive segment.

NON PRICE STRATEGY

Attempt is made to create added value in the minds of the customer that helps marketer to charge higher price.

Core product

Basic product

Expected product

Augmented product Where can you create change?

Potential product

FIVE AREAS OF DIFFERENTIATION

• Quality

• Status and image

• Branding

• Convenience

• Distribution Channels

ASSOCIATED MARKETING MIX

& OTHER FUNCTIONAL

PROGRAMSAll the other P’s have to be planned accordingly

Coordination will be required by other departments

Thank you!