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