product market strategy of lg
DESCRIPTION
Why at all a company like LG need a product strategy f or its operations. and what are the alternatives it consider while formulating the strategies.TRANSCRIPT
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!