LG Electronics Report

7/28/2019 LG Electronics Report

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MARKETING STRATEGIES OF

LG ELECTRONICS

SUBMITTED IN PARTIAL FULFILLMENT OF REQUIREMENT

OF BACHELOR OF BUSINESS ADMINISTRATIONGURU GOBIND SINGH INDRAPRASTHA UNIVERSITY, DELHI

PROJECT GUIDE: SUBMITTED BY:-

MS. A

N BBA

ENROLLMENT NO:

0051211708

SESSION-2010

D.A.V. INSTITUTE OF MANAGEMENT


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ACKNOWLEDGEMENT

All is well that ends well. Today I have reached the end of my project.

From the starting till the completion of this assignment there are many

people without whose assistance all my efforts would have been fruitless.

I, therefore acknowledge all who generously helped me by sharing their

time, experience and knowledge with me without which this project

would have never been accomplished.

I would like to express my sincere thanks to my internal guide Ms. ,

whose guidance was instrumental in helping me complete my project.


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PREFACE

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.


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TABLE OF CONTENTS

CHAPTER - 1. INTRODUCTION TO THE COMPANY

(a) OBJECTIVES OF STUDY

CHAPTER - 2. LITERATURE REVIEW

(a) INDUSTRIAL PROFILE

(b) COMPANY PROFILE

(c) PRODUCT PORTFOLIO

CHAPTER - 3. RESEARCH METHODOLOGY

(a) TITLE JUSTIFICATION

(b) OBJECTIVE

(c) SCOPE OF STUDY

(d) SIGNIFICANCE OF STUDY

(e) RESEARCH DESIGN

CHAPTER - 4. DATA ANALYSIS AND INTERPRETATION

CHAPTER - 5. SUMMARY

(a) FINDINGS AND OBSERVATIONS

(b) RECOMMENDATIONS

(c) LIMITATIONS OF STUDY

(d) CONCLUSION


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CHAPTER - 6. APPENDICES

(a) QUESTIONNAIRE

(b) BIBLIOGRAPHY


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CHAPTER 1

INTRODUCTION TO

THE COMPANY

(A)OBJECTIVES OF

THE STUDY

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INTRODUCTION TO THE

COMPANY

LONG TERM VISION:

LG Electronics pursues its 21st century vision of becoming a true

global digital leader who can make its customers worldwide

happy through its innovative digital products and services. LGElectronics sets its mid-term and long-term vision anew to rank

among the top 3 electronics, information, and

telecommunication firms in the world by the end of 2011.

STRATEGIC DEVELOPMENT:

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.

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LG THE GCCG WAY

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G ROWTH 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 andunveiling these 30% faster, technology development and establishment of

corporate value three years ahead of competitors.

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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: The Company foster a corporate culture whereby

we suggest an alternative before saying "no" and aggressively work

towards fulfilling our goal.

'We' not I: It pursue a corporate culture whereby we embrace a strong

teamwork.

Fun to work: It create a workplace where individuals' creativity and

freedom are respected and working is made fun.

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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.

Mission

LG Digital Design makes Customer's Dream True

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OJECTIVE OF THE STUDY

1. The major objective of my study is to check the

major marketing strategies laid down by the lg

electronics in the market.

2. I also studied how the company has managed to

rank itself among the top three firms in the market

from so many years.

3. It was also the objective of my study to find out in

what situations company introduces certain schemes

and discounts to increase its sales in the market.

4. Last, but not the least, I also studied how company

provide such an environment to its employees

where every employee works to his or her fullest.

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CHAPTER 2

LITERATURE REVIEW

(A)INDUSTRIAL PROFILE

(B) COMPANYS PROFILE

(C)PRODUCT PORTFOLIO

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INDUSTRIAL PROFILE

The world of consumer durable is becoming more and more

sophisticated, compared to what it was about 5 years back. Consumer

electronic goods are now going digital. Companies are coming out

with technologically advanced items researched in-house and being

launched in India more or less simultaneously with the rest of the

world. Some of the really high tech consumer durable to be seen in the

market are so very advanced that they seem to be from the futureworld

It is not necessary that the products that have been a great success

outside the country will continue to perform well on the Indian soil.

Indian consumer looks for value for money in these products apart

from some peculiar product attribute. Decline in the economic growth

of the country had a negative impact on almost all of the industries,

consumer durable was not an exemption. Majority of the wholly

owned MNCs which have come to Indian market in the last few years

are still in red

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Major Players

Domestic : BPL, Videocon, Philips, Crown, Onida,

Salora, Texla.

International : Akai, Daewoo, LG, Samsung, Sony,

Sharp, Sansui, Thomson. Konka (Latest

entrant)

Market shares in the 3,000,000 units market are:

10

LG

7%Onida

10%Sony

4%

BPL

21%

Thomson

3%Samsung

8%

Videocon

20%

Philips

6%

Akai

12%

Others

9%


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COMPANY PROFILE

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. Koo Bon Moo

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, PCBDigital 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 64,082(27,814 in Korea/ 36,268 overseas)

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http://www.lge.com/http://www.lge.com/


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Employees

Financial Highlights (in Millions )

2002 2003 2004 2005 2006 2007

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

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PRODUCT PORTFOLIO

1. TELEVISIONS

2. WASHING MACHINES

3. AIR CONDITIONERS

4. LCD PROJECTORS

5. PLASMA TELEVISIONS

6. AUDIO PLAYERS

7. DVD MOVIE STATIONS

8. VCD MOVIE STATIONS

9. REFRIGERATORS

10. MICROWAVES

11. HOME PC

12. MONITORS

13. GSM MOBILES

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CHAPTER 3

RESEARCH METHODOLOGY

(A)TITLE JUSTIFICATION

(B)OBJECTIVE

(C)SCOPE OF STUDY

(D)SIGNIFICANCE OF STUDY

(E)RESEARCH DESIGN

(F)SAMPLING

METHODOLOGY

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RESEARCH

METHODOLOGY

Methodology is the specification of the method for acquiring the

information needed to structure the study.

a) Title:

Marketing Strategy of LG Electronics

i. Title Justification

Globalization has affected todays market towards the competitiveness.

There are so many domestic and multinational companies growing up

rapidly. Survival is being the core concept of the companies.

Today the choice and preferences of consumer is also changing.

Customer is now aware about the products. Customer is better educated

more sophisticated. He is aggressive and critical who demands his

moneys worth and pays only for what he wants.

Dealers are the customers of the company and consumers are the main

source of the information. This project has certain objectives for which I

covered both dealers and consumers all over Delhi region.

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b) Objective:

Objective One: To find out whether CTV + DVD Scheme has helped

to increase the sale of the Dealers or not?

Objective Two: Whether this Scheme has helped to change the Brand

Loyalty of the Customers or not?

c) Scope of the Study:

This project may prove to be of immense use to the Marketing section as

well as Customer Care Department as it will help them to know the

problems of customers, reasons for their dissatisfaction and ways to

eliminate these problems.

d) Significance of the Study:

LG is one such company which has brought technologically advanced

products for its customers keeping in mind that todays customer are

placing greater weight on quality and value in making their purchase

decision. Dealers are also the customers of the company. They are the last

chain in the distribution channel of the company. They are the one who

directly deals with the consumers. If they are not satisfied with the

companys services the company cannot achieve Total Consumer

Satisfaction.

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Keeping this in mind, I have undertaken the project to find competitors

potential and customers preferences towards the products of LG. For

this, I prepared questionnaire for both dealers and customers. In the

current market scenario dealers play important role to create the image of

the company and the product.

e) Research Design:

i. This project is not have any probability

ii. Exploratory research will be taken for this project work

f) Sampling Methodology:

Methods for Collecting Secondary Data:

Secondary means of data collection involved searching for related theory

and cases in different magazines, journals and newspapers. An important

source of secondary information was also provided by the literature given

by the company, including its induction manual and other Pamphlets and

Brouchers.

i. Sampling chosen with the Random method

ii. Sampling Area would be North Delhi

iii. Sample Size: 150

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CHAPTER 4

FINDINGS

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FINDINGS

1.Maximum people are aware about he CTV and DVD scheme of LG i.e.

good sign of the LG to penetrate in Indian market. While few still doesnt

know about such kind of scheme.

2. Awareness about the different scheme Ads in Journals would be given

maximum priority while Ads on TV is and through the friends would be

given the second priority by the people. Some people suggested that they

got to know about such scheme through dealer and showroom.

3. About the scheme maximum people are agree that scheme is good

while minimum said average or few people suggested that the scheme is

very good

4.People satisfy with the scheme so people says that they are satisfy with

the scheme, while few people says there is need to correction on this

kind of scheme .

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5.Complained register about the High Price 70% while unclear

advertisement 10% of the complained while undelivered gifts would be

contributed also for the complain while others contributed less number by

the complained

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6. If you had to make improvements in this Scheme, what would they

be ?

(a) Less Price (b) Free Gift

(c) Others

60%

20%

10%

0%

10%

20%

30%

40%

50%

60%

Less Prices Free Gifts Others

Interpretation: Improvement about the scheme 60% of people suggested

that less price would be required by the LG while 20% people said free

gifts would be required for making successful scheme wile 10% said

other region like promotion etc required for that.

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DEALERS QUESTIONNAIRE

7. Whether CTV + DVD Scheme of LG attracted the customers?

(a) Yes (b) No

97%

3%

0%

20%

40%

60%

80%

100%

120%

YES NO

Interpretation: 97% dealers says about LG attracted most of the

customer through with the scheme, while 3% people said that there is

need to improvement required.

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8. What do you think about this Scheme / How will you rate it ?

(a) Average (b) Good (c) Very good

70%

10%20%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Average Good Very Good

Interpretation: About the scheme 70% dealers are agree that scheme is

good while 20% said average or 10% dealers suggested that the scheme

is very good.

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9. Whether the Scheme has helped to increase the sale ?

(a) Yes (b) No

YES, 90%

NO, 10%

Interpretation: 90 % dealers believe that this kind of scheme would

increase LG sales while 10% are till felt that it need to improve some

where.

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10. Are you satisfy with the promotional programs for the Scheme ?

(a) Yes (b) No

97%

3%0%

20%

40%

60%

80%

100%

120%

YES NO

Interpretation: Are you satisfy with the scheme 97% dealers says that

they are satisfy with the scheme, 3% dealers says there is need to

correction on this kind of scheme .

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11. Details of complaints?

(a) Insufficient POP (b) Display Trolley

(c) Others (d) No complaint

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Series1 2% 5% 3% 90%

Insufficient

POP

Display

TrollyOthers

No

Complaint

Interpretation: Complaint of the dealers would be 90% dealers saidthere is no complaint to retailers while 5% think Display trolley is not

available on their shop while 2% suggested that Insufficient POP is the

concern for LG.

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12. Your suggestions for further improvement of the Scheme?

(a) Less Prices (b) Exchange Offer

(c) Free Gifts (d)Enhanced Warranty Period

(e) Others

60%

20%

10% 8%2%

0%

10%

20%

30%

40%

50%

60%

70%

LessPrices

ExchangeOffer

FreeGifts

EnchancedWarrantyPeriod

Others

Interpretation: Suggestion for improving sales would be 60% think less

price is the only factor which is contributed most while 20% exchange

offer also increased the sales according to the retailers. Free gifts 10%

required to increase sales for dealers.

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CHAPTER 5

SUMMARY

(A)FACTS AND FINDINGS

(B)RECOMMENDATIONS

(C)LIMITATIONS OF

STUDY

(D)CONCLUSION

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FACTS AND FINDINGS

CUSTOMERS QUESTIONNAIRE

1. Do you own / aware of CTV + DVD Scheme of LG ?

(a) Yes (b) No

2. Where did you come to know about these Schemes from ?

(a) Ads on TV (b) Ads in magazine

(c) Through friends and family (d) At showroom / dealer

(e) Paper Insert

Ads on TV 15%

Ads in Journals 50%

Through friends and family 15%

At showroom / dealer 17%

Paper Insert 3%

Yes 97%

No 3%

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(a) Poor (b) Average (c) Good

(d) Very Good (e) Excellent

4. Are you satisfy with this Scheme?

(a) Yes (b) No

Yes 92%

No 8%

Average 20

Good 60

Very Good 20

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5. What kind of complaint, you registered ?

(a) High Prices (b) Unclear Advertisement

(c) Undelivered Gifts (d) Others

High Prices 75%

Unclear

Advertisement 10%

Undelivered Gifts 10%

Others 5%


be ?


(c) Others

DEALERS QUESTIONNAIRE

7. Whether CTV + DVD Scheme of LG attracted the customers ?

Less Prices 60%

Free Gifts 20%

Others 10%

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(a) Yes (b) No

Yes 97%

No 3%



Average 20%

Good 70%

Very Good 10%

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(a) Yes (b) No

Yes 90%

No 10%


(a) Yes (b) No

Yes 97%

No 3%

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Insufficient POP 2%

Display Trolley 5%

Others 3%

No Complaint 90%

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(c) Free Gifts (d) Enhanced Warranty Pd

(e) Others

Less Prices 60%

Exchange Offer 20%

Free Gifts 10%

Enhanced Warranty

Period 8%

Others 2%

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RECOMMENDATIONS

Managed to come out with new Schemes:

In the month of May and June, with innovation LG has managed to

come out with new Schemes at a much lesser cost taking it on an

express way to success.

Product differentiation has helped LG to make significant dent/

awareness in the mind of the Indian customers. All these factors

have gone a long way in promoting LGs acceptance, building its

image and finally making it more successful.

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Comparing the Status between Before & After

Scheme

In the month of May, before the scheme was launched, the sale of

Flat TVs was equals to nothing, but after the scheme (CTV+ DVD

combo) was launched the sale of Flat TVs has increased day by

day.

I observed that, the reasons were competitiveness among the

companies or may be Budget. Because everybody wants to buy at

low prices, it could be possible that peoples were waiting for the

Low Budget, so that they can buy Consumer Durable items at low

cost.

Finally in end, I observed that, LG has managed to keep it going by

continuously replenishing its product line, product innovation and

product differentiation, which have been on top priority. However

LG still needs more variants to fill in the many price gaps

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LIMITATIONS OF STUDY

In every Research process, there is chance of errors and errors lead to

uncertainty. Errors, which have affected the study, were:

1. Due to lack of time, I could not cover all over Delhi so that my study

was restricted to Faridabad City only.

2. Some time Co-operation from respondents was missing.

3. Most of the time respondents were not interested to answer the

question, taking it as ordinary matter of the company.

4. Most of the times respondents were biased and having shortage of

time.

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CONCLUSION

The result of success in todays highly charged competitive market

depends not only in product innovation and level of productivity but also

in hands of efficient service network with technological advancements

and more adaptability towards information edge.

It has been seen that companies are trying to lower the cost of production

and trying to give more emphasis in creating value added customer base

and customer service. It has lead to extreme innovation and cost reduction

to the marketer. It is also seen during last few years that the companies,

which have more, efficient, and meaningful service network and also the

companies who have controlled the cost of distribution have eventually

controlled the market. Companies are finding that they can attract more

customers by giving better service or lower prices through better physical

distribution. On the other hand, companies may lose customers when they

fail to provide service to its customers at the right time because a satisfied

customer brings five new customers while a dissatisfied customer takes

away fifty.

In order to multiply sales volume, only an efficient dealer and retail

network can widen the geographical reach of a companys products.

There is substantial over capacity in the industry. A shakeout is most

likely and survival will depend upon technology, pricing power, efficient

after sales service and to a limited extend branding power.

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Environmental Threats:

Competition- Indian market is becoming highly competitive after the

globalization, MNCs are giving very high competition to the Indian

domestic brands.

Value for money- Indian market is very price sensitive, customers

value for their money.

Distribution channel- Every company concentrates on its strong

distribution.

Check on unorganized market thriving- inputs that are imported

ones in at excise paid cost has no Modified Value Added Tax paid.

Customers now a days are very much aware about the products, so

companies work hard on providing information, offers, speciality of

their products to customers.

Every company stress on promotional based marketing.

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Environmental Opportunities:

Building Brand- Companys image and brand name plays a great role

in the purchasing behavior of consumers. Every company tries to

increase their brand name.

Untapped rural market- Certain market surveys show that market is

growing at the rate of around 25%, so companys like BPL, LG,

Samsung are ahead in this category and are trying to tap this big

market.

Technology- These days the customer preference are taking a shift to

technological awareness, they do not any more rely on the technology

heard, rather they have the potential to get aware, and analyze the

same and adapt them.

Socio Economic Condition is a major aspect which is giving a boomto the Consumer durable industry, the purchasing power and the

expenditure in entertainment of the customer is increasing day by day.

CRM- Customer Relation Management is another area where all

companies are trying to make their imprint.

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CHAPTER 6

APPENDICES

(A)QUESTIONNAIRE

(B)BIBLIOGRAPHY

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QUESTIONNAIRE

Customers Questionnaire

Name :

Add :

Contact :

1. Do you own / aware of CTV + DVD Scheme of LG ?

(a) Yes (b) No

2. Where did you come to know about these Schemes from ?

(a) Ads on TV (b) Ads in magazine

(c) Through friends and family (d) At showroom

(e) Paper Insert


(a) Poor (b) Average (c) Good

(d) Very Good (e) Excellent

4. Are you satisfy with this Scheme?

(a) Yes (b) No

5. What kind of complaint, you registered ?

(a) High Prices (b) Unclear Advertisement

(c) Undelivered Gifts (d) Others

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be ?


(c) Others

Dealers Questionnaire

Dealer Name :

Address :

Contact No :

1. Whether CTV + DVD Scheme of LG attracted the customers ?

(a) Yes (b) No




(a) Yes (b) No


(a) Yes (b) No

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(c) Free Gifts (e) Others

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BIBLIOGRAPHY

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BIBLIOGRAPHY

a) Books referred to:

1. Kotler Philip, "Marketing Management", Prentice Hall of India,

2004.

2. Wilson & Gilligan, "Strategic Marketing Management", Viva

Books Private Limited.

b. Journals referred to:

HBS (Harvard business review)

c. Magazines referred to:

1. LG Sansar Magazine, May 2010

2. Business Today

d. Internet referred to:

i. Sites

1. www.lge.com

2. www.lgezbuy.com

3. www.ask.com

4. www.domain-b.com

ii. Search Engines

LG Electronics Report

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