Project Report
OnI NTERNATIONAL
MARKETING STRATEGIES OF
BACHELOR OF BUSINESS ADMINISTRATION BACHELOR OF BUSINESS ADMINISTRATION ofof
GURU GOBIND SINGH UNIVERSITYGURU GOBIND SINGH UNIVERSITY,,
NEW DELHI INSTITUTE OF MA
PREFACE
I, student of RAI UNIVERSITY am pursuing a MBA course and towards the
partial fulfillment of it have undergone a project. I have put my sincere efforts
to accomplish my objectives within the stipulated time.
Despite all the limitations, obstacles, hurdles and hindrances, I have toiled
and worked to my optimum potential to achieve the desire goal. Being
neophytes in the highly competitive world of business, I came across some
difficulties to make my objectives a reality. Anyhow, with the kind help and
genuine interest of one and all and formally supported by the guidance of my
guide, I am presenting this hand carved effort in colored. I tried my level best
to conduct a research to gain a thorough knowledge about the project in my
topic “ International Marketing strategies of LG Electronics” I have put the best
of my efforts and have also tried to do justice with the available. If anywhere
something is found unacceptable or unnecessary to the theme, you are
welcome with your valuable suggestions.
CONTENTS
Abstract
Preface
Industry Prospects
Vision
Industry Overview
History
Future Prospects
Product Profile
HR System
Social Commitments
Strategic Alliances
Objective
Methodology
Findings and Analysis
Limitations
Conclusion and Recommendations
Bibliography
CHAPTER-1
ABSTRACT
This study is divided into several parts. This project highlights the objective
and aims of L.G Electronics sales promotion strategies and how successful
these promotions have been.
By “Questionnaire- Survey”, the preferences and purchase pattern of the
consumers have been highlighted. This has helped significantly in determining
what kind of promotional campaigns will be successful, what is lacking in
current campaign and things to consider in future before making a
promotional campaign.
In the end, conclusion has been made regarding the whole analysis and
several recommendations have been suggested, which could help in boosting
the success rate of sales promotion by L.G Electronics.
CHAPTER-2
INDUSTRY OVERVIEW
The consumer durable goods industry is a highly growth oriented Industry,
which is seeing high net growth inspite of the recession which has gripped the
major industries worldwide. In 2003, despite the various global difficulties, the
industry achieved higher yearly Sales growth over the previous year. But 2004
will bring great challenges for the industry as uncertainty in global business
and continued weakness in the world markets carries over from the previous
year. But the Indian market has been able to post robust growth in this
industry inspite of the recession in the world markets. The reason, which has
helped this industry, is the desire of the Indian people to acquire the latest that
the technology and the companies have to offer in the product portfolio
ranging from CTV’s & their higher end versions of plasma & projection Tv’s,
Airconditioners, Refrigerators, Washing machines, Cellphones, Microwave
Ovens etc.
This desire stems from the fact that people have money at their disposal and
want to spend it only on the Products, which give them, value for money. This
is because after a hard days work people want to relax for which they
purchase products that help them to do so. For example: washing machines
that require only the clothes be put into it, air conditioners which provide relief
from extreme hot and cold weather, Cellphones that help in connectivity and
other similar products with their associated features that help in making life
smooth for the people. Companies are cashing on this aspect to fuel their
growth and are even succeeding in their efforts if they provide good quality
products. This industry is also witnessing growth because the companies are
concentrating on strengthening the R&D and expanding investments in home
& overseas market and by also developing core technologies. They are
working hard to expand their market position by producing innovative products
as well as improving product quality and cost competitiveness.
CHAPTER-3
COMPANY PROFILE
Global Top 3 By 2010
LG Electronics pursues its 21 st century vision of becoming a true
global digital leader who can make its customers worldwide happy
through its innovative digital products and services.
LG Electronics sets its mid-term and long-term vision anew to rank
among the top 3 electronics, information, and telecommunication
firms in the world by 2010.
As such, we embrace the philosophy of "Great Company, Great
People," whereby only great people can create a great company,
and pursue two growth strategies involving "fast innovation" and
"fast growth." Likewise, we seek to secure three core capabilities:
product leadership, market leadership, and people-centered
leadership.
Growth Strategy
Fast Growth:
Fast growth is the result of strategies designed to expand the market
size and earnings quickly, in the process improving the growth rate
in terms of monetary value rather than quantity.
Fast Innovation:
Fast innovation involves setting extremely high innovation goals and
securing a competitive edge, aiming for a target of 30% more than
what our competitors can do. Fast innovation also means 30% more
sales and improvement in our market share, new product
development and unveiling these 30% faster, technology
development and establishment of corporate value three years
ahead of competitors.
Core Capabilities
Product Leadership:
Refers to the ability to develop creative, premium products through
specialized new technologies.
Market Leadership:
Refers to the ability to achieve the "LG brand is No. 1" goal backed
by its formidable market presence worldwide.
People Leadership:
Refers to talented people who perform excellently by internalizing
and practicing innovations.
Corporate Culture
Though a company implements perfect management strategies and
boasts of outstanding and talented people, it should have an
appropriate corporate culture to unleash the power of these
capabilities.
No 'No'- Challenge: We foster a corporate culture whereby we
suggest an alternative before saying "no" and aggressively work
towards fulfilling our goal.
'We' not ‘I’: We pursue a corporate culture whereby we embrace a
strong teamwork.
Fun to work: We create a workplace where individuals' creativity and
freedom are respected and working is made fun.
MISSION
LG Digital Design makes Customer's Dream True
INDUSTRY OVERVIEW
Overview
LG Electronics, Inc. (Korea Stock Exchange: 6657.KS) was
established in 1958 as the pioneer in the Korean consumer
electronics market. The company is a major global force in
electronics and information and communications products with more
than 64,000 employees working in 76 overseas subsidiaries and
marketing units around the world. With annual total revenues of
more than US $16.9 billion (non-consolidated), LG Electronics
comprises three main business companies : Digital Display & Media,
Digital Appliance, Telecommunication Equipment & Handset.
LG Electronics' goal is to enable the intelligent networking of digital
products that will make consumers' lives better than ever.
Corporate Name LG Electronics Inc.
Established October 1, 1958 (As a private Company)
Corporate Office LG Twin Towers 20,Yoido-dong, Youngdungpo-gu
Seoul, Korea 150-721
Tel: 82-2-3777-1114
URL: http://www.LGE.com
Chairman & CEO Mr. S.S.Kim
Business Area
and
Main Product
Digital Display & Media Company
Digital TV, PDP, Monitor, CD-ROM Drives, DVD-ROM
Drives, CD Rewritable Recorder, VCR, DVD Player,
Audio, Security System, Recording Media, Video
Phone, PC Camera, Banking Automatic System, PCB
Digital Appliance Company
Air Conditioner, Refrigerator, Microwave Oven,
Washing Machine, Vacuum Cleaner, Compressor for
Air Conditioner, Compressor for Refrigerator
Telecommunication Equipment & Handset Company
TDX, STAREX, optical switching systems,
Implementation of advanced IBS (Information Building
System), System Integration (SI) service, etc.
Implementation of advanced IBS (Information Building
System), System Integration (SI) service, Handsets for
satellite, mobile multimedia and IMT-2000 services,
etc.
Number of
Employees
64,082(27,814 in Korea/ 36,268 overseas)
Financial Highlights (in Millions )
1999 2000 2001 2002 2003 2004
SALES 9,852.8 10,546.1 14,835.7 16,601.0 18,602.9 20,176.9
(Domestic) 2,569.8 2,704.0 4,881.2 6,084.1 6,654.9 4,793.7
(Export) 7,283.0 7,842.1 9,954.5 10,516.9 11,948.0 15,383.2
Ordinary
Profit
167.1 2,587.9 728.5 573.7 675.2 836.8
HISTORY
The 1950's
1958 Gold Star (today's LG Electronics) established
1959 Korea's first radio produced
The 1960's
1962 Radio exported to the US and Hong Kong as Korea's first
1965 Korea's first refrigerator produced
1966 Korea's first black & white TV produced
1968 Korea's first air conditioner produced
1969 Korea's first washing machine produced
The 1970's
1974 Gold Star Communication went public
1977 Color TV produced
1978Exports surpassed US$100 million as Korea's first in the
electronics industry
The 1980's
1980 First EU sales subsidiary in Germany (LGEWG) established
1982 Color TV plant in Huntsville in the US established
1984 Sales surpassed 1 trillion Won
1986 European-standard VCR plant in Germany established
1989Sales subsidiary and a joint production subsidiary in Thailand
established
The 1990's
1990 Ireland-based design technology center established
1993With the establishment of Huizhou subsidiary, China,
marketing in China begun full swing
1995Company name changed to LG Electronics and the US-based
Zenith acquired
199740-inch PDP TV and the world's first IC set for DTVs
developed; India production subsidiary (LGEIL) established
1998 World's first 60-inch PDP TV developed
1999 LG-Philips LCD, a joint venture with Philips, established
The 2000's
2000
LG Information & Communications merged, the word's first
Internet-enabled refrigerator launched; global sales of
refrigerators reached the number one position
2001
Asynchronous IMT-2000 equipment commercialized; the
world's first Internet-enabled washing machine, air
conditioner, and microwave oven launched; LG-Philips CRT, a
joint venture with Philips established
2002
Under the LG Holding Company system, the Company spun
off to LG Electronics (LGE) and LG Electronics Investment
(LGEI); the first home networking system commercialized in
the global market
2003
World's first synchronous-asynchronous IMT-2000 mobile
phone developed; the world's largest 76-inch PDP TV
developed; CDMA mobile handsets took the largest share in
the US CDMA market
MANAGEMENT STRUCTURE
BOARD OF DIRECTORS
STANDING
Name
BOD Title
Current Position
S. S. Kim
Representative Director
Chief Executive Officer
Young Soo Kwon
Director
Chief Financial Officer
NON - STANDING
Name
BOD Title
Current Position
Yu Sig Kang
BOD Chairman
Vice Chairman, LG Corp.
Suk Jean Kang
Outside Director
President, CEO Consulting Group
Il Sup Kim*
Outside Director
Professor, Ewha Women’s University
Nyum Jin*
Outside Director
Professor, Sogang University
Sung Won Hong*
Outside Director
Chairman, G-Mobile
AUDIT COMMITTEE
Name
Title
Current Position
Note
Suk Jean Kang*
Outside Director
Chairman, CEO Consulting Group
Advisor
Il Sup Kim*
Outside Director
Professor, Ewha Women’s University
Advisor
Nyum Jin*
Outside Director
Professor, Sogang University
Advisor
SENIOR CORPORATE OFFICERS
Name
Title
Current Position
S. S. Kim
Vice Chairman
Chief Executive Officer
Woo Hyun Paik
President
Chief Technology Officer
Jong Eun Kim
President
Head of European Headquarters
Nam Kyun Woo
President
Head of Digital Display & Media Company
Hee Gook Lee
President
Chief of LG Electronics Institute of Technology
Mun Hwa Park
President
Head of Telecommunication Equipment & Handset Company
Jin Bang Son
President
Head of LGE China Holding Company
Ju Ik Song
Executive Vice President
Chief of Korea Marketing Operation
Myeong Kyu Ahn
Executive Vice President
Head of North American Headquarters
Young Ki Kim
Executive Vice President
Chief of Human Resources
FUTURE PROSPECTS
LG Electronics India Pvt. Ltd., a wholly owned subsidiary of LG Electronics,
South Korea was established in January, 1997 after clearance from the
Foreign Investment Promotion Board (FIPB). The trend of beating industry
norms started with the fastest ever-nationwide launch by LG in a period of 4
years with the commencement of operations in May 1997. LG set up a state-
of-the art manufacturing facility at Greater Noida, near Delhi, in 1998, with an
investment of Rs 500 Crores. This facility manufactured Color Televisions,
Washing Machines, Air-Conditioners and Microwave Ovens. During the year
2001, LG also commenced the home production for its eco-friendly
Refrigerators and established its assembly line for its PC Monitors at its
Greater Noida manufacturing unit. The beginning of 2003 saw the rolling out
of the first locally manufactured Direct Cool Refrigerator from the plant at
Greater Noida.
Financial Performance:
Turnover for 1997 : Rs. 125 Crores
Turnover for 1998 : Rs. 485 Crores
Turnover for 1999 : Rs. 1056 Crores
Turnover for 2000 : Rs. 1903 Crores
Turnover for 2001 : Rs. 2216 Crores
Turnover for 2002 : Crossed Rs. 3000 Crores
Turnover for 2003 : Clocking a turnover of Rs. 4,500 Crores
The Greater Noida manufacturing unit line has been designed with the latest
technologies at par with international standards at Korea and is one of the
most Eco-friendly units amongst all LG manufacturing plants in the world. LG
has been able to craft out in five years, a premium brand positioning in the
Indian market and is today the most preferred brand in the segment
Various studies have shown that the consumer is well informed on the health
awareness front. LG was one of the first companies who recognized the
emerging change in consumer needs and decided to differentiate their
products on the basis of technology, which appealed to the consumer on the
basis of health benefits. Its vision was to become a 'Health Partner' for its
consumers worldwide and therefore formulated its corporate philosophy to
make peoples' lives better, convenient and healthier.
For example: The CTV range offered by LG has 'Golden Eye' technology,
which senses the light levels in the room and adjusts the picture to make it
more comfortable for the eyes. The entire range of LG air-conditioners have
'Health Air System', which not just cools, but keeps pollution out. Similarly,
microwave ovens have the 'Health Wave System', refrigerators have the 'PN
System', which preserve the nutrition in food and washing machines have
'Fabricare System', which takes the health factor down to ones clothes. All the
products offered by the company have unique technologies, developed by its
R&D departments that give customers a healthier environment to live-in.
The year 2001 witnessed LG becoming the fastest growing company in the
consumer electronics, home appliances and computer peripherals industry.
The company had till the month of October 2001 achieved a cumulative
turnover of Rs 5000 Crores in India since its inception in 1997, making it the
fastest ever Rs 5000 Crores clocked by any company in the Indian consumer
electronics and home appliances industry. Having achieved this milestone, LG
achieved another benchmark with the first ever sales of One Lakh ACs
(Windows and Splits) in a calendar year. LG is poised to surpass its turnover
target of Rs. 2700 Crores this year and clock a turnover of Rs. 3000 Crores.
This year, LG has emerged as the leader in Color Televisions, Semi
Automatic Washing Machines, Air Conditioners, Frost-Free Refrigerators and
Microwaves Ovens. In Color Televisions having set the sales target of one
million units of Color Televisions for 2002, LG has already achieved the one
million mark in the month ahead of its target.
LG Electronics India is the fastest growing company in the consumer
electronics, home appliances and computer peripherals industry today.
LG Electronics is continually providing superior technology products & value
for money to over 50 Lakh households in India. LG Electronics already have
various ranges of products & Planning to more with all their variants and
deviants.
LG’s Marketing Network is also big as enough, company is planning to
increase it more. LG Electronics currently has 65 Regional Area Offices, 60
Central Area Offices with 40 branches all over India.
So, the future prospect of LG Electronics in India seems to be very bright.
PRODUCT PORTFOLIO
TELEVISIONS
PROJECTORS
LCD Projector
PLASMA TV’S
AUDIO PLAYERS
DVD MOVIE STATION
VCD MOVIE STATION
REFERIGERATORS
WASHING MACHINES (FULLY AUTOMATIC)
AIR CONDITIONERS
MULTI SPLIT AC’S
MICROWAVE
CONVECTION RANGE
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