Marketing strategy of lg project

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MMAARRKKEETTIINNGG SSTTRRAATTEEGGIIEESS
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LLGG EELLEECCTTRROONNIICCSS IINNDDIIAA LLTTDD..
“PROJECT SUBMITTED FOR THE PARTIAL FULFILLMENT
TOWARDS
THE AWARD OF THE DEGREE OF MASTER OF BUSINESS
ADMINISTRATION IN APPLIED MANAGEMENT”
Under Supervision of: Submitted by:
Mr. Narendra Singh LALIT KUMAR YADAV
Enr. No.4740900063
DIRECTORATE OF DISTANCE EDUCATION,
ANNAMALAIUNIVERSITY,
2011

ii
FORM OF SUBMISSION OF PROJECT
Name of the student LALIT KUMAR YADAV
Enrolment number 4740900063
Program with subject MBA in Applied Management
(Customer Relationship management,Mercentile
And Commercial Law, Project Management,
Sales
Management, Product And Brand Management,
Marketing of Service )
Title of the project MARKETING STRATAGY OF ‘LG ’
ELCTRONICS
Period of study 2 Years
Address of the candidate LALIT KUMAR YADAV,
S/O SHRI RAGHUVEER SINGH YADAV,
MOH-: SHRI NAGAR, PIPAL CHOWK,
MATHURA ROAD, HATHRAS,
POST & DISTT- HATHRAS,
HATHRAS-204101 (U.P.)
Mb. +91 9259614295
Name of the guide Mr. NARENDRA SINGH
Designation with experience TERRITORY SALES OFFICER
MARKETING 5 YEARS
Address of the Guide SURABHI TRADING COMPANY
(OFFICIAL) 37/125, SARAN NAGAR, OPP. VITA
BREAD FACTORY NEAR RAJDEEP
APPARTMENT, NEW AGRA, DAYAL
BAGH, AGRA-282005
0562-4051943
(RESIDENTIAL) 35/60-2A NEW LASHKERPUR MUGHAL
ROAD, KAMLA NAGAR, AGRA-282005
09313017229
Date of submission of project
Place: Signature of the student……………
Date: Signature of the Guide……………..

iii
DECLARATION
I here by declare that the project report entitled “MARKETING
STRATEGIES OF L.G. ELECTRONICS”Submitted me as a part
Of My M.B.A. llnd year of master of Business Adminiatration
(Applied Management) To The NIS Academy,Agra.
( Annamalai University Chennai )
Lalit Kumar Yadav
Enr.No.4740900063
BATCH:2009 – 2011

iv
ACKNOWLEDGEMENT
This report bears the imprint of many persons who have helped
me in numerous ways in writing this report. It gives me great
pleasure in presenting this report to the “The NIS Academy”. I
would like to take this opportunity to exchange my heart full
gratitude to all those who helped me in presenting this report.
I would like to take this opportunity to thanks Mr. NARENDRA
SINGH for providing the attention, guidance, consistent,
encouragement and support I needed to complete this project. It
stipulated time with out his active guidance.
I would also like to take this opportunity to thanks all
teachers and faculty members specially for cooperating me a lot in
this project and for providing advice to make my project more
useful and impressive.
My overriding debt is to my parents who provided me moral
support & inspiration needed to prepare this report.
LALIT KUMAR YADAV
MBA(AM) llnd Year

v
CERTIFICATE
Certified that the “marketing strategy of L.G. electronics” Is
work done by Mr./Ms. LALIT KUMAR YADAV during the
period of his/her study under my guidance, and that the project
has not previously formed the basis for the award of any Degree,
Diploma, associate ship, fellowship or similar other titles and
that it is an independent work done by his/her.
Signature of the guide:
Place: Name:
Date: Official address with
seal:

vi
CERTIFICATE
This is certify that Mr.Lalit Kumar Yadad, a student of M.B.A.
(AM) llnd year has done this project under my (Narendra Singh)
supervision .The title of project is “Marketing strategies of L.G.
Electronics”.
To the best of my knowledge this is his original work and
has not been submitted for the award of any degree/diploma any
where he has been a science student of this institute. I wish him
all success in life.
DATE:
PLACE: Mr.Narendra Singh

vii
EXEXUTIVE SUMMARY
This report is an analysis of the Marketing Strategies of LG.
LG is a Multinational Company having its presence all over the world. A
thorough study of LG Electronics, how it came into existence & operations of
LG Electronics India, has been presented along with an Indian industry
analysis.
Analyzing the company in the backdrop of the Indian Home Electronics was
considered to be important because it is a highly competitive market and it is
very important to know where a company stands in this industry.
There after an intense study has been done into LG‟s corporate history, its
origin, developments, expansions, strategies etc. A discussion about LG‟s
operations in India follows, and thereby the two chosen areas i.e. Marketing is
discussed in the subsequent sections.
The four P‟s of marketing have been discussed in detail individually along with
the product‟s brand awareness under the marketing section.
Product: Highlights the addition and change in the product range of the
company and the significance of each of its product lines.
Pricing: The basis used for pricing and how the products have been priced.
Place: The kind of distribution network used to market its products.
Promotion: All the promotion activities to promote the company‟s brand and
its products in order its increase its market share.
Findings and recommendations have been drawn keeping the industry and
company analysis in mind. Graphs & Tables have been included in the data
analysis chapter.

viii
ACKNOWLEDGEMENT
Getting a project report ready requires the hard work and effort of many
people. First of all, I gratefully acknowledge the continuous assistance and
inspiration given to me by the Faculty of Rohini, JIMS.
Special thanks to ______________________ for her invaluable support and
guidance during my training period and supervising my work.
Also I would also like to thank all those who have contributed in completing
this project report.
Finally, I would like to thank my family for providing me monetary and non-
monetary support, as and when required, without which this project report
would not have been completed.

ix
TABLE OF CONTENTS
Chapter 1: Introduction 01-49
1.1 Overview of the Industry 01
1.2 Profile of the Organization 21
1.3 Problems of the Organization 42
1.4 Competition Information 44
1.5 S.W.O.T. Analysis of the Organization 48
Chapter 2: Objective & Methodology 50-53
2.1 Significance of the study 50
2.2 Managerial usefulness of the study 50
2.3 Objectives of the study 50
2.4 Scope of the study 51
2.5 Methodology 51
Limitation 53
Chapter 3: Conceptual Discussion 54-82
Chapter 4: Data Analysis 83-88
Chapter 5: Findings & Recommendations 89-94
Annexure 95-99
Bibliography 100
Synopsis

1
Chapter – 1 INTRODUCTION
1.1 A PREVIEW TO THE INDUSTRY
TV perhaps is a most powerful media today in India. The socio economic impact of
this media in a country like India is tremendous. The extensive use of the media as a
powerful tool for entertainment information and education by other channel owners
added impetus to this growth.
After liberalization in 1991, one saw a lot of players in the Electronics market due to
which increase in the Electronics that boosted the sale of home Electronics. After
liberalization bought itself a dramatic change in the competitive structure of the
market. Analyzing the market structure one finds that long-term dominance of
Moulinex, Braun, Philips, Crompton, Inalsa, Bajaj etc. The comings of the MNCs
have resulted in a decline in profit margins for the domestic players. Most of these
MNCs started operations in 1992 and by 1993, had some infrastructure in place.
Some of them started with fully owned subsidiaries and some went in for a tie up
with domestic players.
For e.g., Braun established themselves in 1999-97; Moulinex in 1992; Philips in
1994-95; Kenwood, LG, Softel, following in 1999-97; LG in 1992. The entry of these
multinationals changed the market. As a first step, they started to set up distribution
and service networks. Simultaneously they concentrated on increasing the visibility
of their products in the shops of the dealers they appointed. They launched
technologically advanced models with attractive price tags, keeping the dealers

2
margins intact to help push the products. Indian companies that were complacent
earlier, felt the heat. After some quick rethinking they launched new models at
attractive prices.
Despite all this the Indian companies have remained strong. The rate at which
foreign brands are growing is only due to the fact of a dynamic business
environment. Domestic Electronics firms are guided by objective of maximizing short
run profit rather than long term growth and the firms‟ competitive strategy is guided
by product differentiation and price manipulation-Inalsa‟s money back offer, Soften
price led wars, Moulinex price consideration, Samsung‟s schemes- despite all this
LG and JVC have opposed exchange offers and price led wars.
But all other domestic players have over–reacted and this has diluted the strategic
issues of technological innovation through customer after sales service and ads. The
Electronics domestic player has not understood the importance of technological
innovation.
The coming in of the MNCs has created a new scenario with a new market profile.
The entrenched position of the Indian market leaders in Electronics Bajaj, Crompton
and Black and Decker has been challenged by the MNCs such as Moulinex, Braun,
JVC, LG, Kenwood and LG.
The domestic players have a 24% market share. MNCs have managed to grab a
76% in a very short span. Earlier this was 19:6. The market leaders currently in the
Electronics industry are Bajaj and Crompton with 11% and 13% share respectively in

3
2008-2009. Earlier till 2000-2001 these two leaders had shares of 44% and 54%
respectively. Even today, Bajaj is considered to be the market leader.
Major Players
Domestic : Crompton, Bajaj, Philips, Black and Decker.
International : LG, Kenwood, Braun, Moulinex, LG, Inalsa,
JVC
Currently the four major players in the market are
BAJAJ 11% market share
LG 8% market share
Philips 19% market share
Moulinex 12% market share
Kenwood 11% market share
These Five players cover 61% of the market.

4
Market shares in the 3,000,000 units market (2009) are:
Current Scenario: The recent help age extempo has spurred a sudden growth in
the Juicer Mixer Grinder segment.
The segment grew by 44% in August 2009 over the same period last year. August
2009 also saw the highest sales during the one-year period April 2005 to August
2009. The world help age extempo have been a trigger but, underlying this boom is
the story of marketing techniques by the MNCs.
The new MNC Home Electronics brands are on a roll armed with latest technology,
aggressive marketing and advertising budgets. These companies are capturing a
significant share of the Indian Home Electronics market. In terms of sales and
market share Indian companies still occupy the top slots but MNCs are slowly
gaining ground.
Kenw ood
11%
Others
11%Black and
Decker
7%
Crom pton
9%
Sheffield
11%
LG
8%
electrolux
12%
Bajaj
11%
Philips
19%

5
These MNCs have positioned themselves by offering superior technology and
discounts, rather than old technology that the Indian companies failed to do
so.
Home Electronics market shares, May 2009 (Post extempo)
According the latest survey conducted by ORG-GEK for July 2005, the help age
extempo driven spurt in Home Electronics sales appears to have spilled over to
July‟09.
Top 3 brands for July’09 were
LG 27%
Philips 28%
Moulinex 17%
B ajaj
3.0%
Inalsa
12.0%
B raun
11.0%
Moulinex
14.0%
LG
5.0%
Philips
19.0%
C rom pton
5.0%
K enw ood
8.0%
O thers
13.0%
Sheffield
10.0%

6
Seeing the figures for May‟2009 LG was number 2 with 27%.
TV market shares – July‟09
Philips 16% Kenwood 7%
Moulinex 8% Inalsa 19%
LG 9% Crompton 4%
Bajaj 6.5% Others 12%
LG 9%
Braun 7%
TOSTERS
India has been one of the rapidly expanding markets for Toasters for the past couple
of years. The Indian market has considerable demand potential for this product.
This attracted most of the major multinational players. The entry of players such as
LG, Moulinex and Braun had the effect of galvanizing the industry. The industry
players as a consequence are gearing up for both the customers and the
competition.

7
The Toasters industry can be broadly classified into 4 segments:
a. Cool body c. Bag Body
b. Sheet metal d. Pop-up-toasters
Cool body, Bag body, Sheet Metal are Sandwich toasters and pop-up-toasters are
use for Crisping.
The Cool body and Pop-up-toasters segment is the largest in terms of value,
accounting for an estimated Rs.21 crores. This segment has been the fastest
growing amongst the lot, with a growth rate of 18% or so in 2009-10.
The world over, sale of Cool body dominates the total shipments. In India, however
the sale of pop-up-toasters accounts for a larger share.
However this phenomenon has been changing in the past couple of years. The
demand for pop-up-toasters and Sandwich toasters mainly comes from house holds.
House holds are estimated to account for around 82% of the total demand.
The demand from the hotel sector though it accounts for a smaller portion, is the
fastest growing segment. Also, a large portion of the demand from this segment-
around 16% relates to buyers of second units.
The demand for Toaster is generally restricted to major cities and towns. Eight cities
which include the four metros are estimated to account for 72% of the total
household demand. Delhi and Mumbai alone is estimated to account for one-third of
the total industry sale to households.

8
The major players in the market for Sandwich Toasters are Bajaj, Moulinex, Braun,
Philips, Kenwood, Inalsa, LG, Crompton. There are also a host of other smaller
players such as Black and Decker, Sujata, Usha etc.
The Sandwich toasters segment is however dominated by Usha, Laxman Slyvania
though LG is making a large headway into this segment too.
The Pop-up-toaster market is dominated by Philips.
Market shares in the 80,000 units market (Retail) 2009
WHITE GOODS (Mixer Grinder & Citrus Juicer): A PREVIEW OF THE INDUSTRY
The white goods industry is witnessing dynamic changes. Acquisitions of units by
some, exits by a few others, marketing tie-ups, capacity expansions, booming
Sheffield
6.1%
M oulinex
18.2%
Philips
28.5%
Braun
21.2%
Inalsa
12.7%
O thers
13.4%

9
volume growth in the first six month of 2009-10 all these changes are the
characteristics of the industry.
Mixer Grinder: Mixer Grinder accounts for the largest segment in the white goods
industry. It can be classified into:
a. Domestic Mixer Grinder i. Three attachment with 440 watts
b. Industrial Grinder i. Three attachment with 550 watts
Domestic grinder industry with a turnover of 40 crores is dominated by the organized
sector.
The size of the industry is about 2.5 mn units. This industry has benefited from the
consumers buying preferCreated by MAHAJAN GRAPHIC Sences. After a TV and
Toasters, the most likely product on the buying list would be a Mixer Grinder. This
has resulted in a higher penetration level for Mixer Grinder.
After a good year in 2008, the size of the Mixer Grinder segment contracted in 2001.
This trend has reversed in 2008-09. In the first six months of 2008-09, the volume
growth was in double digits i.e., 25%.
The Grinding market consist of 440 watts and 550 watts models which has the
following demand:
440 watts- 15% of the demand for refrigerators.
550 watts –85% of the demand for refrigerators.

10
The action is slowly moving towards 550 watts models of the grinding segment.
Companies are steadily upgrading the economy models capacity from 440 watts to
550 watts.
The 550 watts Mixer Grinder segment has been growing faster than the 440 watts
segment in recent past. The slower rate of growth of 440 watts models forced
Crompton to finally launch 550 watts models in Oct‟96. Both Usha and Philips made
significant inroads in 2007.
Philips and Inalsa continue to be the market leader in the 550 watts segment
although its market share has come down. In the 440 watts segment, Crompton
continues to be the leader.
However the year 2009 saw the entry of many France and Korean companies. All
these companies have entered in the 550 watts and above capacity niche segment
that can be imported in fully assembled form and where margins are higher. The
entry of these giants has opened up an entirely new and technically superior
segment comprising 440 watts Grinding. The global giants like Inalsa, Moulinex,
Braun, Philips, LG have entered the Indian market with their international range of
products.
There has been significant expansion in capacity in this industry. Inalsa, plants at
Haryana and Moulinex plants were commissioned recently with capacities of 30lacs
& 15 lacs units respectively.

11
The excess capacity in the Mixer Grinder industry has deterred players such as
Usha, Bajaj and LG from going ahead with their plans. This has led to certain
marketing tie-ups which Usha, Bajaj, Sujata and LG have taken advantage of. Both
LG are outsourcing Mixer Grinder from Polar manufacturing facility, while Moulinex
and Braun are sourcing Mixer Grinder and Citrus juicer from China respectively.
Market shares in the 80,000 units market (440 watts + 550 watts), in per cent
2009.
Citrus Juicer : The size of the Citrus Juicer industry is small compared to the Mixer
Grinder industry, at around 44,000 units.
The psyche of the consumer who looks at Citrus Juicer as a luxury product and the
infrastructural problems such as the non-availability of electricity has been the major
hindrances for the growth of the industry.
Bajaj
1.8%
sum eet
28.4%M oulinex
17.6%
Braun
12.3%
Kenw ood
11.4%
crom pton
8.8%
O thers
5.2%
Sheffield
8.8%
Usha
5.7%

12
After a good year in 2008, the size the Citrus Juicer segment contracted in 2009.
The trend has reversed in 2009-10. In the first six months of 2009-10, the volume
growth was in double digits i.e., growth of 26%.
There are two types of Citrus Juicer in this segment:
a. Half ltr
b. One ltr
Philips has market share of 55% in 2009, dominating the market. The demand for
the above types in the market is:
c. Half ltr 22%
d. One ltr 78%
Philips is the leader in both half and one ltr. Segments. The company‟s position in
the One ltr. segment is under serious attack by a range of technically superior
foreign models which are also available in large capacities. Currently almost all-
foreign companies are operating in large capacity one ltr segment.
Major contenders-LG, Moulinex, Braun, Kenwood.
Currently since the level of indeginisation is very low for the foreign machines, the
high price charged in a major stumbling block for the first time shoppers of Citrus
Juicer. As long as companies can not justify the premium pries to customers, low
prices of domestic brands of Citrus Juicer will continue to dictate the purchasing
decision of majority of buyers.

13
The capacity utilization levels are still quite low in the industry. The situation is
expected to improve significantly in the future, with the number of working women on
the rise and the difficulty in availability of domestic help the market is expected to
grow by over 30% in the next few years from the present growth rate of 6%.
Market share in the 44,000-unit market (half ltr + one ltr) in per cent (2009).
Jug Kettel: The size of the Jug Kettel is large compared to the Citrus Juicer industry,
at around 79,000 units.
The psyche of the consumer who looks at Jug Kettel as a luxury product and the
infrastructural merits such as the low consumption of electricity have been the major
advantages for the growth of the industry.
After a good year in 2005, the size the Jug Kettel segment inflated in 2009. The
trend has reversed in 2009-10. In the first six months of 2009-10, the volume growth
was in double digits i.e., growth of 28%.
Sheffield
6.3%
Philips
40.7%
Inalsa
19.2%
Kenw ood
3.6%
Braun
5.5%
Bajaj
3.6%
Others
6.5%
M oulinex
14.6%

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There are two types of Jug Kettel in this segment:
a. With cord
b. Cordless
c. With cord 12%
d. Cordless 88%
Philips is the leader in with cord and Cordless segments. The company‟s position in
cordless segment is under serious attack by a range of technically superior foreign
models, which are also available in large capacities. Currently almost all-foreign
companies are operating in large capacity cordless segment.
Major contenders-LG, Moulinex, Braun, Kenwood.
high price charged in a major stumbling block for the first time shoppers of jug Kettel.
As long as companies can not justify the premium pries to customers, low prices of
domestic brands of Jug Kettel will continue to dictate the purchasing decision of
majority of buyers.
expected to improve significantly in the future, with the number of working men and
women on the rise and the difficulty in availability of domestic help the market is

15
expected to grow by over 34% in the next few years from the present growth rate of
8%.
Market share in the 79,000 unit market (with cord + cordless) in per cent (2009)
Hair Dryers: The size of the Hair Dryers industry is higher compared to the Citrus
Juicer industry, at around 68,000 units.
The psyche of the consumer who looks at hair dryers as a luxury product and the
After a good year in 2008, the size the hair dryers segment inflated in 2005. The
trend has increased in 2009-10. In the first six months of 2009-10, the volume growth
was in triple digits i.e., growth of 52%.
There are two types of Hair dryers in this segment:
Sheffield
20.6%
Philips
28.9%
M oulinex
11.3%
Braun
11.3%
Black and
Decker
7.2%
O thers
3.1% Rem son
7.2%
Kenw ood
10.3%

16
a. Three K – More power
b. Four K – low power
National has market share of 48% in 2009, dominating the market. The demand for
c. Three K – More power 64%
d. Four K – Low power 36%
National is the leader in both Three K and Four K segments. The company‟s position
in the three K segment is under serious pressure by a range of technically superior
foreign models which are also available in large capacities. Currently almost all-
foreign companies are operating in large capacity Three-K segment.
Major contenders-LG, Braun, Moulinex, Philips, Kenwood, National, Sony,
Panasonic, Bajaj.
high price charged in a major stumbling block for the first time shoppers of Hair
Dryer. As long as companies can not justify the premium pries to customers, low
prices of domestic brands of Hair Dryer will continue to dictate the purchasing

17
Market share in the 68,000 unit market (Three K + Four K) in per cent (2009).
Iron: The size of the Iron industry is largest industry, at around 2 lacs units.
The psyche of the consumer who looks at Iron as a all class luxury product and the
After a good year in 2008, the size the Iron segment inflated in 2005. The trend has
increased in 2009-10. In the first six months of 2009-10, the volume growth was in
10 time‟s i.e., growth of 80%.
O thers
2.7%Philips
12%
Bajaj
5%
Kenw ood
6%
Braun
4%
Sony
8%
National
28%
Panasonic
4%
Sheffield
7%
M oulinex
6%

18
There are four types of Irons in this segment:
a. Steam Iron
b. Dry Iron
c. Light weight Iron
d. Heavy weight Iron
e. Steam Iron 52%
f. Dry Iron 24%
g. Light weight Iron 14%
h. Heavy weight Iron 10%
Philips and National are the leader in both Steam Iron and Dry Iron segments. The
company‟s position in the Dry Iron segment is under serious pressure by a range of
technically superior foreign models, which are also available in large capacities.
Currently almost all-foreign companies are operating in large capacity Dry Iron
segment.
Major contenders-LG, Braun, Moulinex, Philips, Kenwood, National, Bajaj, Usha,
Crompton and Kenstar.

19
high price charged in a major stumbling block for the first time shoppers of Hair Dry
Iron. As long as companies can not justify the premium pries to customers, low
prices of domestic brands of Dry Iron will continue to dictate the purchasing decision
of majority of buyers.
Stick Blender: The size of the stick Blender industry is medium industry, at around
28,000 units.
The psyche of the consumer who looks at Stick Blender as a all class luxury product
and the infrastructural merits such as the low consumption of electricity & high speed
work have been the major advantages for the growth of the industry.
After a good year in 2008, the size of the stick blender segment inflated in 2005. The
trend has increased in 2009-10. In the first six months of 2009-10, the volume growth
was in twice i.e., growth of 24%.
There are two types of stick blender in this segment:
i. With attachment – with chopper
ii. Without attachment –without chopper

20
Moulinex has market share of 38% in 2009, dominating the market. The demand for
the above types in the market is
i. With attachment
ii. Without attachment
Philips, Braun, Moulinex, is the leader in both with attachment & without attachment
segments. The company‟s position in the without attachment segment is under
serious pressure by a range of technically superior foreign models which are also
available in large capacities. Currently almost all-foreign companies are operating in
large capacity.
Major contenders-LG, Braun, Moulinex, Philips, Kenwood, National, Bajaj, Usha,
Crompton and Kenstar.
high price charged in a major stumbling block for the first time shoppers of stick
blender. As long as companies can not justify the premium pries to customers, low
prices of domestic brands of stick blender will continue to dictate the purchasing

21
Remarks: Domestic companies will have to gain access to latest technology from
outside, launch new products in quick succession, leverage their strong dealer
network and promote their products effectively to remain competitive in this
extremely competitive market. The strategy used by the MNCs is „technology‟ and
they have positioned themselves by offering superior technology, which the Indian
companies have failed to do so. Foreign brands hence are expected to gain the mind
space of the price discerning Indian consumer in not very distant future.
1.2 LG ELECTRONICS - CORPORATE PROFILE
The US $73 billion LG group is one of the world‟s top conglomerates today, having
established its supremacy in diverse fields ranging from electronics, chemicals etc.,
to trade and services.
The LG group was born as „Lucky Chemicals‟ in 1947, a pioneer in the fledgling
chemical industry. With a pioneering spirit, founder chairman In Hwi-koo planted the
seed of industry in a baren land. The seed grew into a dream factory for hope.
During the 1950‟s amidst the ruins of the Francen war, the „Lucky‟ brand emerged as
the representative brand of France, offering dreams and joy to the impoverished
Francen economy. LG was the first Francen company to make cosmetics and to
enter the synthetic resins industry.
LG established „Goldstar‟ in 1958, opening the door to the home Electronicsin
France. Since developing France‟s first radio in 1959, LG Electronics has pioneered

22
and led the Francen Home Electronicsfor over four decades .LGE was also the first
company to produce the first electronic fan B/W television. In 1960‟s with the launch
of a national economic development plan LG emerged as the leader of Francen
industrial growth.
LG‟s success is ensuing the genial alliance between the Francen government and
the organization. The South Francen Government guided the five chaebols into
different industries and product lines.
In the the beginning of 1970‟s after passing of the founder / chairman In-Hiwi Koo,
Cha-Kyung Koo took over as the chairman. Under his able leadership, in a decade
LG established more than 20 sister companies and schools increased its sales by 36
times, its exports by 90 times and confirmed its place as France‟s leading business
group. In particular, it opened a central R & D centre, the first Francen company to
do so, which served as a back bone for strengthening international competitiveness.
By mid 80‟s LG grew into a leading comprehensive chemical company. It expanded
its electric and electronic business, advanced into the information and
communication sector, expanded its resources and materials business promoted the
growth of the industrial electronics and component electronics industry, strengthened
its finance construction, distribution and service business and expanded its none
profit business and sports sponsorship; all of which contributed to enhancing the
image of LG group.
LG‟s period of first change came in the late 1980‟s. Innovation became the key word
in every aspect of management and LG began to change to a quality oriented

23
management, and adopted a new management philosophy of „Creating value for
customers‟ and „Management respecting human dignity‟.
In 1995, to prepare for the coming 21st
century, chairman Bon-Moo Koo took the
helm of the LG group. At the same time LG launched a global management
strategy for the 21st
century, and changed its corporate identity from Lucky
goldstar to „LG‟. Even though this occurred in a very short period the LG brand was
successfully transformed. LGE now meets the worlds customer with LG brand. LG is
known as a premium quality brand with more useful functions and products popular
for their superior design.
LG‟s vision is to bring the „smiling face‟ to every home cross the globe
The “smiling” face logo symbolizes five key concepts world, future, youth Human and
Technology. LG believes that an effective combination of these elements for the
organization. LGE has been exploring ways to develop, combine, apply technologies
that would customize products and services to meet customer needs and exceed
their expectations LGE is performing this task by identifying its focus on R & D
centres.
Outside France, LGE has seven R & D centres in Japan, United States, Ireland and
Russia, among other countries and two R & D centres in France. LGE‟s long term
strategy is to expand its R & D centrer base worldwide ad to invest 8% of the total
revenue into R & D.

24
LG‟s business strategy for the 21st
century is very aggressive. Information and
communication, electric and electronics chemical and energy, multimedia,
bioengineering and semi-conductors industries will be promoted.
LGE is an integrated electronic goods manufacturer that operates three
business divisions:
Multimedia Division:
The multimedia division handles a range of multimedia products such as computers,
CD-ROMS, O/A equipment information and communications equipment, optical data
devices, audio equipment, VCR‟s cam-corders, printed circuit boards (PCB) and
magnetic tapes (MT). At present LG is placing high priority to new business which
included Digital Video Disk (DVD), personal cricuit Boards (PDA), hand help PC‟s
(HPC), Network computers (NC), and other related products and hopes to capture
the market at full-thrust as these products become more common in business
operations. The division posted US $ 2.5 billion sales in 2003.
Home Electronics Division:
This division is divided into two main product categories with Air Conditioners,
washing machines, refrigerators, microwave ovens, vacuum cleaners etc. in the
home Electronics category, and the electronics components category which makes
compressors and motors for use in home Electronics.
In 2003, this division posted US $ 3 bn in sales. The divisions‟ products have played
a significant historical role at LGE and embrace a solid share of markets throughout

25
the world. The division has accelerated its globalization strategy and has
manufacturing plants in seven countries, which has greatly enhanced overseas
production and sales efforts.
LGE‟s home Electronics products are admired in various countries. LGE Citrus
Juicer holds the top position in Libya, Jordan, Tunisia, South Africa and in most
regions of Asia. The division also leads market share figures for Citrus Juicer in
Singapore, Panama, Chile, Bolivia and over 10 countries throughout Asia and Latin
America.
Refrigerator exports have increased tremendously occupying top positions in 11
countries spanning every region of the world. Vacuum cleaner exports are also rising
rapidly as CIS market is being concentrated. The division‟s Microwave ovens are the
leading products in Europe and North America. Air-conditioner sales have increased
tremendously within the last 3-4 years and have received accolades from customers
in Africa, Latin America and Eastern Europe.
Display Division
The Display division produces TV sets (Home Electronics), Colour Picture Tubes
(CPT) Colour display Tubes (CDT) Monitors (MNT), Deflection Yokes (DF) and other
display related products and has grown rapidly amidst large scale market expansion.
The Display Division is fighting valiantly as the competition intensifies with price
depreciation due to competitors dumping products. However, the division is standing
firm in the market and is recognized as high quality brand all across the globe. With
the Chinese and Indonesia complexes running full scale since‟96, a vast global

26
production network has been created. In the turmoil of constantly rising taxes, the
division still managed to boost sales in 2000 by US$ 3.6 billion, a 27% increase over
the previous year.
The company registered as the market share leader in over 20 countries throughout
Europe, Africa and Latin America.
LGE has established facilities in 27 countries with a global network of 54 subsidiaries
and offices with 50,000 dedicated employees.
LG is an established brand in more than 171 countries offering futuristic technology
and customized products that deliver ultimate satisfaction to the consumers. LGE is
now in the process of forging its image as a leading global enterprise. The products
that are manufactured globally include multimedia players, Video & Audio products,
Home Electronics, Information systems products, Communication Devices, Display
products, Magnetic recording Media, Electric / Electronic components.
The company‟s new product strategy is centered around its digital technology
and features next-generation display devices as its core product group. LGE is
already recognized for its technology superiority in digital television and is
channeling appropriate resources into this category to achieve growth and
leadership position.
Going forward, LGE is making great strides towards realizing its vision of
becoming the „Best Global Company‟ in the 21st
century. As LGE pursues this

27
vision, it remains committed to delivering outstanding products and services to
customers around the world.
LG‟s Vision
LG ELECTRONICS envisions a future where life is convenient and pleasant where
living spaces are full of happiness. And where the promise of the future we all dream
of comes true.
LG Objectives
 Achieve gross sales of US$78 billion.
 Secure ordinary income of 6 percent of gross sales.
 Attain a return on investment of 15 percent.
 Build a brand reputation for total satisfaction.
 Create more comfortable, convenient homes electronics companies .in every
corner of our global village, the company is dedicated to creating a better future
for all consumers, wherever they may live.

28
LGE plans to build “DIGITALez LG” as its premier brand image and is making
careful preparations to take the center stage in representing the cutting-edge
electronics industry in the new millennium.
LG Corporate Identity
LG‟s symbol mark is the most important element of the corporate identification
system. It is the representative symbol of LG throughout the world. The symbol mark
creates a unified mental image of LG necessary in international communication. We
call this mark the “face of the future.” It incorporates five concepts and sentiments:
The face made from the
“L”and “G”symbolizes that
human beings are the central
aspect of our business and
expresses the resolution to do
our customers and ensure
their satisfaction.
Red Color: reinforces an image of
warmth and familiarity with our global
customers.

29
LG‟s -R & D
LGE has established facilities in 27 countries with a global network of 54 subsidiaries
and offices with 50,000 dedicated employees LGE has reinforced R & D activities in
higher digital technology to get to the global digital market with smart products that
can simplify life. More than 6% of the total revenues are spent on R & D every
year. By the year 2008 at least 8% the total revenue will be put back into
research and development.
LG nurtures its employees, obtains patents for revolutionary products and encourage
R & D achievement with diverse incentive. It‟s 13 domestic labs including the LG
production Engineering research centre and our 10 overseas laboratories are doing
their at most in basic technology, manufacturing skills, quality, performance,
standardization and design. With the company internal campaign for quality
innovation, LGE is gunning for global leadership in digital technology. LGE‟s
customer-oriented performance is backed by energetic R & D activities. R & D based
TL 2005 looks ahead at yet to be invented technologies and sensational products
that with deliver outstanding performance to better your life
LG-R&D Vision:
1. Focus on performance maximization based on market leading R & D (2000)
2. Create global leading products (2000-2002)
3. Secure technological identity to lead the growth of LGE (2002-2005)

30
R&D Approach and direction
1. Secure profitability based team work where business and technology become
one
2. Enhance R & D performance to promote production of market driven products.
3. Encourage business mindset of R & D teams.
LG-Strategic Initiatives
 Redesign Business portfolio/develop new strategic business
It is important to revamp the company‟s existing product structure to strategically
foster our image as the best global company. We need to redesign our business
portfolio to facilitate the branching out into the new sectors, active efforts would be
made to advance into:
1. The software and the service sectors
2. The information and communication sector
3. The health and environmental equipment
4. Major parts and component sector
And others by pursuing friendly M & A‟s and strategic alliances with other
companies.

31
 Globalization
LGE plans to have five more regional headquarters in operation by 2000 and 10 by
2008, as result, LGE hopes to raise its overseas sales by US $ 606n, or 80% of its
total sales and increase its overseas production to 70% of its total production.
Acquiring promising differentiated technology entails beating the competition on
gaining a foothold in key industries of future where holding a competitive advantage
is feasible.
LGE would attract and cultivate leading individuals in the core technology fields and
establish R & D centers at major regional bases around the world and thereby boost
technological co-ordination.
 Cultivate HPL‟s “High performing leaders
In order to produce early and effective management results great efforts will be
made to train and foster the most promising management graduates. At least 250
subsidiary leaders who are executive level or higher will be cultivated and trained as
specialists on new business development, M & A, core technology and other areas.
LG Corporate Culture
“Courteous boundary less and empowering”
The drive is to evolve a highenergy “Boundryless” corporate culture, where
intellectual freedom is high,innovative thinking is valued and cross functional
bonhomie creates a collective will to achieve goals.

32
Employee empowerment is the right way to go. Not only are the people empowered,
the right people are empowered. E.g the Francens have empowered the Indians- the
people who know the market well.
LG basic philosophy
 Compete in the international market with a global mindset
 Maximize value for customers, employees and shareholders
 Pursue the best in the class through „management by principle‟
 Contribute to society through good “corporate citizenship.”
LG Management Philosophy

33
Creating Value for the Customer: The whole purpose is to create value for the
products and to serve the customers in every thing we do. With satisfied customers,
LG will naturally continuously and consistently innovate and develop to achieve our
goal of providing the almost value per customers.
Management Based Esteem for Human Dignity: People are the origin of all values
in all management activities. Management based on human dignity helps us achieve
all goals. People should practice company‟s vision, sense of value and goal in view
of ownership to the company.
LG-Logo Concept
LG - 3D LOGO CORPORATE LOGO
Identification of the symbol Mark
Symbol mark is the most important element of corporate identification system. It is
the representative symbol of LGE throughout the world. Symbol mark creates a
unified mental image of LGE necessary in international communication.

34
The symbol mark which represents the “Face of Future” incorporates five concepts
and sentiments of world, future, youth, human and technology.
The circle with the letters “L” and “G” symbolizes that human being are the most
important aspect of our business and expresses the resolution to do our best to
maintain close ties with our customers and to ensure their satisfaction.
The red color reinforces an image of warmth and familiarity with our global
customers and highlights LG‟s challenge to become a world class company.
Brand Mark
Brand mark is the most important element of brand identification system. It is the
representative symbol of LGE throughout the world. Brand mark creates a unified
mental image of LGE necessary in international communication.
LG in India
LG Electronics India Limited (LGEIL) is a wholly owned subsidiary of LG electronics,
South France. The company was established in January 2000 after clearance from
the Foreign Investment Promotion Board (FIPB).
Its earlier two attempts one in 1992 and one in 1995 had failed. It first entered the
country in 1992 with the Goldstar brand name selling Home Electronics‟s in
partnership with Delhi-based home Electronics company Bestavision, the marriage
failed to click right from the start. Two years and a host of problems later, it snapped
ties with Bestaviscon and tried to form a joint venture with the C.K. Birla group. That

35
move, too, failed in the negotiation stage itself. By then, the Goldstar had acquired a
poor reputation with dealers and consumers alike.
With the change in its corporate identity in 1995 worldwide from „Goldstar” to “LG” it
proved to be lucky in India only the third time around, despite being one of the first
multinationals to hit the Indian market after liberalization.
The company launched in Delhi in May 2000, with, ten model of colour television,
ranging from 14 inches to 29 inches; eight models of large capacity Mixer Grinder
ranging from 320 lt to 650 lt and three models of Citrus Juicer from 5.5 kgs to 20 kg
and subsequently launched the same in Chandigarh, Lucknow, Jaipur, Bombay,
Pune, Calcutta, Anmedabad, Indore, Bangalore, Chennai and Hyderabad .
These entire products bear the LG brand name, which the company has decided to
change from its previous brand “Goldstar” around the world starting from 2000.
Today in a short span of 24 months, LG has twenty six models of colour television
ranging from 14 inches to 60 inches; 14 models of large capacity Mixer Grinder
ranging from 175 lt to 890 lt; seven models of Citrus Juicer ranging from 5.5 kgs to
20 kgs; nine models air conditioners; three models of micro wave ovens; two VCD‟s
and have subsequently launched the same all-India.
The company is envisioning a total investment of US $ 289 million (Rs. 1040 crore)
over the next of 9 years which will give it a major manufacturing presence in India in
and range of white a brown goods as well as in a range of electronic components by
2010. Along the way the company plans to export products worth. $ 100 million in a

36
ten-year period is starting from the commencement of mass production in India. It
also has a plan to invest 25% of its equity to the Indian public or to an Indian investor
after 5 years of operation.
In the first phase of investment from 2000 to 2001, the company has decided to
invest US$ 100 million (Rs. 500 crore) to establish manufacturing facilities in Greater
Noida. This facility will be capable of churning out 7,00,000 Home Electronics,
4,00,000 Refrigerators, 2,00,000 washing machines, 1,00,000 Air conditioners and
5,00,000 Microwave ovens per annum. The facility has started production since April
2001.
In the second phase from 2001 to 2005, LG electronics will invest $ 200 million (Rs.
500 cr) to increase its existing capabilities in finished products and add capabilities to
manufacture compressors, ply back transformers, motors and deflection yokes.
After setting up of LG software Center in Bangalore in 1999, LGE also will set up an
“in house R & D and ADVERTISING center” in India not only to train the Indian
employees, but also to serve foreign employees of LGE in South East Asia and
Northern Africa.
In five years from now, LGEIL will become one of the colossal industrial
houses in India LGEIL has already achieved a turnover of Rs. 500 crores in the
period Jan-July‟2002. LGEIL by introducing a wide range of products to the Indian
consumers has successfully carved a niche for itself. Its success story is a result of
its investment in cutting edge technology and its relentless efforts to bring home the
smiling face.

37
In the past five years, India has attracted a number of multinational companies to
invest in the country, offering a plethora of choices to the Indian consumers. Thus
the consumers seek international brands that offer value for money as well as a high
standard of service. LGEIL ceasely strives to be responsive to consumer needs,
desires and habits.
Today LGEIL is regarded as one of the top home Electronics companies in India
(ORG-MARG Survey). LGEIL has 18 company owned and 40 authorized service
centres across the country where the service engineers are available twenty-four hrs
throughout the week.
The consumer durable industry will continue to witness the growth in demand. The
company will also have to take a leap forward by increasing the volume of sales. It is
expected that in the coming years there will be stiffer competition. The company is
taking measures to reduce costs and improve productivity. With emphasis on quality
and improved service to the customers at an affordable price, the company will
endeavor to gain additional market share. Also in view of the liberalization of the
Indian economy, company‟s technical know how, superiority, service competence
and the good will is what the company commands in the market. The company is
optimistic of consistent and sustained growth in its business.
LG Groups presence in India
LG Electronics India Limited
LG Software

38
LG Chemicals
LG Construction
Production Facility
LGEIL set up its 47 acres manufacturing facilities at Greater Noida in April 2001.
Today the factory chuns out washing machines, colour televisions, Toasters and
micro wave ovens.
Mixer Grinder is externally sourced from Allwyn‟s manufacturing facility at
Hyderabad. Currently LGEIL has tied up with Voltas Ltd., to source about 600,000
Mixer Grinder over 3 years from Jan 2003 to Dec. 2005.
Voltas will product Mixer Grinder according to the specified standards of design and
quality given by LG electronics. Voltas would increase its capacity of 180,000 units to
250,000 units per year of which LGE will be sourcing about 80%.
At present, the average Indigenisation level in LG products is about 45 percent and it
plans to increase it to 85 per cent in the next couple of years. When it had started the
production of air conditioners, the level of indigenisation was a mere 20 per cent that
shot up to 90 per cent almost instantly. Home Electronics would also be reaching
such levels by the end of the year.

39
LG‟s Production Capacity
Colur TV‟s 500,000 units
Semi Automatic Citrus Juicer 200,000 units
Air Conditioners 100,000 units
Micro waves 50,000 units
Mixer Grinder Externally sourced
Manufacturing
At its state of the art manufacturing plant acute cost control has been on the agenda
from day one. Some of the ways used to control costs at the plant are:
a. Full-optimization of resources
b. Smoothening the clock work
c. Raising the efficiently of employees
d. Minimal inventory levels.
At the plant, it is made sure that there is no wastage of material and every thing must
keep moving all the time. Since money has time value, nothing that has hogged
money should lie idle for too long.
Inventory is kept minimal, for which strict guidelines are followed religiously all
through the chain. The plant keeps no more than seven days stock of material from

40
vendors and 15-20 days of imported parts. Branch offices must have, at the end of
every month, just 40 percent of the requirement for the next month, with the rest
being replenished by the 15th
.
Cost cutting has always been a high priority for LG operations around the world. In
keeping with this aim, the company has been trying to achieve much localization as
possible, as fast as possible.
At present the average level of indigenization in LG products is about 45 per
cent. The company hopes to increase that to 85% within the next couple of years or
so, thus insulating itself from exchange rate volatility and crushing costs in general.
The challenge is to cultivate high quality local vendors quickly. When LG first started
making ACs in India, the indigenous component accounted for a mere 20 percent of
the value of the final product, but within a few months, the figure shot up to 90 per
cent level. Home Electronics will hit a comparable position by the end of 2005.
Since the USP of LG has been high technology, it cannot let any defective product
pass through the gates. Even ensuring that the machines can handle Indian
conditions has been top priority for LG. Every product is put to an Early Life Test
(ELT), which subjects of to the misery of 40 degrees centigrade heat for a prolonged
period. The defect elimination programme follows a statistically optimized process of
random sample checks.

41
Innovation at LG
At LG innovation is a policy. The management‟s pet phrases are „TPI 50‟ and TDR.
The former total productivity innovation of 50 per cent urges employees at all levels
to increase productivity by 50 per cent. And the latter is the tool that helps to do that–
Tear Down Re-engineering, by which employees, especially at the assembly line,
are directed to tear down all processes to the ground and start afresh by using less
tine, more innovative technique and so on. In this manner, it is believed the company
is bringing down costs for the future and through TDR and TPI 50 expects to create
significant profits this year.
Engineers at LG don‟t say „no‟ to any idea. If the company has to compete in the
long run, it cannot do so by merely cutting costs. It is innovation that wins the race
even in a market as budget constrained as India.
Performance Review
LG electronic India Pvt. Ltd., has in a very short span of six months achieved a
turnover of Rs. 100 crores which is a breakthrough in the Electronic industry. The
performance achieved in LG‟s financial projection was commendable as it reached
the first Rs. 50 crores in first 1.5 month as against its initial target of 100 crores in 12
months meeting its annual targets in just 6 months.
In the year 2009-10, LGEIL has achieved a turnover of Rs. 200 crores against a
projected Rs. 100 crores. In the first year of operation in India LG has achieved the
number one position in the 440 watts Mixer Grinder in the 300 lt and above category

42
and Neuro-Fuzzy segment washing machine. In the Home Electronics segment LG
is No.6. Moreover it has launched world class state of the art technologies as PN
system and refrigerators, Golden eye series of Home Electronics‟s, chaos
technology in Citrus Juicer and Air conditioners.
At the end of March 2008, the company had secured a market share, above 55% in
Home Electronics 37% in 300 ltrs No. frost refrigerator, and 35% in Neuro Fuzzy
washing Machines. This was by far one of the most impressive performance any
company had in its first year of operation.
In 2009, its first complete year of operation in India, it sold products worth Rs. 477
crore The company for the period Jan-June‟2008, has recorded a turnover of Rs.
500 crores. Last year in the same period the turnover was only 200 crores. This is a
whopping growth of approximately 150%. Only Crompton and Bajaj groups have
more turnover than LG in home Electronics and Home Electronics industry in this
period.
1.3 PROBLEMS OF THE ORGANISATION
Currently LG has a market share of 9%. It has sold 1,80,000 Home Electronics in
the first six month, till June‟02, making it the fifth largest players in the Home
Electronics market.
In the 440 watts refrigerator, 300 lt + category, LG is already the market leader with
almost 36% market share, it has sold 16,250 units against a market size of approx

43
45,000 units in the first 6 months of current calendar year. This is a growth of 31%
over last year corresponding period.
In the 550 watts refrigerator segment however the company has only 3% market
share because of capacity constraints due to out sourcing. It has sold 42,000 units in
the first six month, which is a growth of about 330% over last crores pounding
period.
In the fully automatic (Fuzzy Logic category) Citrus Juicer too LG is the market
leader with 37% market share. It sold about 6,600 units against the industry sale of
18,000 units in the first six months of current calendar year. This is a growth of 92%
over cost year corresponding period.
Overall in the semi automatic Citrus Juicer category the company has 12% market
share and a No. 4 ranking. It sold about 41,200 units against the industry sale of
3.45 lacs units in the first six month of current calendar year. This is a growth of
790% over last year corresponding period.
In the microwave oven segment company has a 21% market share and a No. 2
overall position. It sold about 7000 units against the industry sale of 33,000 units in
the first six months of current calendar year. This is a growth of 460% over last year
corresponding period.
In the Air Conditioner organized segment the company has a 17% market share and
a No. 2 position on overall basis. It sold about 24,200 units against the industry sale

44
of 1.45 lacs units in the first six month of current calendar year. This is a growth of
410% over last year corresponding period.
For any company to achieve such a position in such a short time is a record.
Amongst the MNCs in this industry LG now is the undisputed Numero Uno.
According to company sources, at LG it can be said with pride that in 26 months of
existence, LG stands at a level that many companies in this industry have attained in
26 years of their existence.
1.4 ABOUT LG‟S COMPETITORS
Philips India
Philips is one of the oldest multinationals to enter India nearly 60 years ago. Philips
has had a fairly successful run as a major player in the television market. The
company has identified domestic Electronics, personal computers and monitors,
software as its target business. In the year ending Dec‟98 Philips India has notched
up sales of Rs. 1483 crore.
Samsung Electronics
Samsung electronics, another France company launched about five years back
entered India with a stake of $ 5 million in the India subsidiary Samsung India
electronics Ltd., in which it holds a 51 per cent controlling share. The product

45
portfolio of Samsung Electrons ranges from Multimedia products, home Electronics
and telecommunication product systems.
In India the company has established a leadership position in the product categories
in Home Electronics‟s 440 watts Mixer Grinder CD based systems, washing
machines, microwave over and VCD‟s. In 2000 it had a market share of 8%. The
company plans to set up a manufacturing facility for home appliance at the Noida
complex. This facility for which the investment is estimated at around US $ 15-20
million will have a production capacity of 50,000 units each for refrigerator and
washing machines.
The company plans to set up four factories at the Noida complex by the year 2000
for Home Electronics‟s refrigerators, washing machine, microwave over and room
AC‟s with a total investment of Rs. 260 crore.
BPL
Crompton Ltd., the market leader in consumer electronics, the flagship company of
the Rs. 3000 crore Crompton group has turned in an improved performance in 2000-
98 over the previous year. The company‟s sales have risen 35.7 per cent to Rs.
1746 crore over the previous years.
The company is involved in the manufacturing of B & W, Home Electronics and
colour picture tubes; washing machine; microwave ovens; vacuum cleaners etc. in
order to fight the onslaught of the multinationals in the consumer electronic industry,
Crompton which is in technical collaboration with Sanyo is all set to unleash a host of

46
new products for the domestic consumer. In 2003 the company had market shares of
21% in Home Electronics; 6.2% in refrigerator 19.2% in washing machines; 44.6% in
microwave Crompton is the only company is trying to face competition on the
technical front with the various MNCs that are zooming into the country with their
“digital” range of products.
Whirlpool
This company invested in India in 1987 beginning with the venture with TVS private
limited. In 1994, TVS Whirlpool Ltd. changed its name to Whirlpool Citrus Juicer Ltd.
Its dominance is mainly in the white goods industry. It 1995 Whirlpool required
controlling interest in Kelvinators of India, one of country‟s largest manufacturing and
marketer of refrigerators. In 1999 the company is in the process of manufacturing
Global No. frost Mixer Grinder in the forthcoming project.
Its market shares in 2008 were; Mixer Grinder 19.3%; Citrus Juicer 14.6%.
IFB
IFB stands for Indian fine bank. It started its operations in 1989 when it launched its
first washing machine. It has a significant presence in the high end Citrus Juicer
market, with its fully automatic washing machine. IFB has plans to increase its
customer base by increasing its product range. Currently the company is into the
manufacture of microwave ovens, dishwashers and clothes dryers. Its market shares
in 2008 were; Citrus Juicer 6.5; microwave 22.4%.

47
Amtrex Hitachi
It has strategic alliance with Hitachi Ltd., of Japan. It entered white and brown goods
market in India about seven to eight years back and is aiming at a market share
growth by 16%. It is majority into the marketing of high end AC‟s each in split and
windows segment. Its market shares in 2008 were: air conditioner 21.2%.
Godrej GE Electronics
The company has posted a loss of Rs. 60 crore in 1999. It posted a 30 per cent
growth in sales volume in the refrigerator business during the six – month period
ended Dec‟97, higher than the industry average. Godrej is the market leader in the
refrigerator segment. In 2001, it recorded a market share of 31.1%. In the Citrus
Juicer segment it recorded a market share of 5.5%. It is the only national player in
the cooking range market in India. It is a also planning to venture into business like
water purifier systems in the near future, a strategy which has enabled it to become
a multi appliance company.
Electrolux
AB Electrolux, the world‟s largest manufacture of household Electronics, reached an
agreement to obtain majority ownership in an Indian Citrus Juicer manufacturer,
Intron Ltd. Electrolux invested US $ 2.4 million in the step to obtain 51% ownership
in Intron Ltd. In 1995 it took majority control of Maharaja Int‟l Ltd., an Indian
refrigerator manufacturer. With these two manufacturing bases it even has 40%
stake in Eureka Forbes Electrolux plans to launch a wide range of environment

48
friendly household Electronics in India. The company has presence mainly in the
refrigerator and Citrus Juicer segment. It has been launching world class products in
India at regular intervals. 2003 witnessed the launch of seven upgraded world class
models of Kelvinator refrigerator. In 2001 it launched premium Gold collection from
Kelvinator. Market shares in 2008 were: refrigerator 9.7%.
1.5 S.W.O.T. ANALYSIS OF THE ORGANIZATION
Strengths
Premium pricing, no discounts
Focus on technology and quality
Strong commitment from parent
In – house manufacturing capability
Products localized to suite Indian tastes
Weaknesses
Lack of transparency with dealers
Focus on niche segments
Dominance of Francen work culture
Little presence in A&B class towns

49
Opportunity
Convert image into market share
Wide product portfolio
Positive rub-off due to high quality
Healthy resource generation
Threats
Way behind market leader
Stagnant urban demand
Nothing unique about strategy
Highly competitive market

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Chapter – 2 OBJECTIVE & METHODOLOGY
2.1 SIGNIFICANCE
Considering the wide variety and availability of products in the category of home
Electronics as a industry only the five following products have been considered for
study: Juice Extractor, Sandwich Toaster, Popup Toaster, Hand Mixer, Stick
Blender, Hair Dryer, Jug Kettle, Steam Iron, Dry Iron, Heat Convector, Juicer Mixer
Grinder, Mixer Grinder, O.T.G., Light Weight Automatic Iron. LG being a company
having its operations in diversified areas, only LG electronics is a part of this study.
2.2 MANAGERIAL USEFULNESS OF THE STUDY
It will be very useful for the Managers to know the position, marketing strategies and
the performance of the LG Electronics India.
2.3 OBJECTIVES
To find out whether Scheme has helped to increase the sale of the Dealers or
not?
Whether this Scheme has helped to change the Brand Loyalty of the
Customers or not?
To find out the Overall Response of this Scheme?
To identify and analyse the position in the consumer durable industry of LG
Electronics India.
Analyzing the Marketing Strategies of the above company.
To analyze its performance since to inception.

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2.4 SCOPE OF THE STUDY
Identify and analyse the position of LG Electronics in the Consumer Durable Industry
and its performance since inception will help company to know where LG Electronics
stand in this competitive market.
2.5 METHODOLOGY
Information regarding the Consumer Home Electronics, organisation, Marketing
Strategies, Human Resource Management has been obtained through:
(a) Primary Sources
(b) Secondary Sources
Officers of the following departments were approached to obtain information about
the concerned subject.
Marketing
Human Resource Management
Primary Sources:
Questionnaire, Interview and Discussions with the Senior Marketing Executives of
the Companies to get relevant information.
Secondary Sources
(i) Internet

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(ii) Libraries
(iii) Articles
(iv) Company brochures, literature and pamphlets.
Conclusions and recommendations have been thereby given.
Thus in my opinion, this was the best method, that could have been used which
included the use of both the primary and secondary sources since only the
secondary or the primary sources could not have provided such an in-depth and
detailed information.

53
LIMITATIONS
In every Research process, there is chance of errors and errors lead to
uncertainity. Errors, which have affected the study, were:
 Due to lack of time, I could not cover all over Delhi so that my study
was restricted to North Delhi only.
 Some time Co-operation from respondents was missing.
 Most of the time respondents were not interested to answer the
question, taking it as ordinary matter of the company.
 Most of the times respondents were biased and having shortage of
time.

54
Chapter – 3 CONCEPTUAL DISCUSSION
Marketing Strategy
In a short span of just 26 months, since its inception in May 2009, the brand has
attained a brand awareness level of about 90% in the consumer durable Indian
market.
Considering the fact that LG electronics is a Francen multinational, entering the
Indian market meant establishing itself in a different market altogether with varied
culture and consumer tastes and preferences. Also that so many multinationals are
sweeping into the country, it is evident that each and every company has a cutting
edge over another. These global corporations are deviating from their
international methodologies and improvising their strategies for local markets.
LG‟s localization of strategy covers the following areas:
Entry Strategy: It is always better to establish as fully owned subsidiaries. It is
considered better if the company has a local partner but, since LG‟s earlier two
attempts had already failed, it decided to do it all alone this time. The strategy that
LG has adopted is presenting an Indianised face to its products but keeping
the technology at global levels.
Operations: LG opted for starting its own manufacturing facility at Greater Noida.
The 20 month schedule to commission its manufacturing plant was compressed to
10 months. The company decided to go in for a green field project rather than
acquisitions or mergers. (For all products except refrigerators).
Products: LG decided to go in for Product Adaptation Strategy. Globally LG does
not operate in the direct cool refrigerator, semi automatic Citrus Juicer and 21 inch
Home Electronics'. But the company had to develop these products for the Indian
market because these areas constitute a major bulk of buys for the Indian consumer.
Also LG launched, sampoorna, India's first TV with a devangiri script on screen

55
display on the 50th
anniversary of Indian independence. LG‟s strategy of localizing its
products to suit Indian tastes added to its strength.
Segmentation: The Company decided to enter the high end middle-class onward
segment in the initial stages, since most of the Indian brands were targeting the low
and middle end customers. In the past 3 years due to LG‟s distinct strategy it has
carved a niche for itself in a crowded segment of 20 manufacturers.
Brand: The company launched its products in country with “LG, the global leader ”. It
did not opt for any established brands in the country to be associated with it.
Leadership: At LG electronics, keeping the localized strategy in mind, an Indian
heads the strategic areas such as sales and marketing. Generally it happens that the
senior management is deprived of Indians in a transnational but LG did to want to
follow this path, it wanted that the marketing division be headed by an Indian
because he would be versed of the Indian market and cultures. Ultimately it is this,
which determined whether the company wants to make profits or obtain a market
share. LG definitely wants to be the leader in the home Electronics industry. Seeing
the progress that the company has made in the past 3 years, it has revised its plans
for becoming the number one home Electronics company to the year 2008 from
2009. The company even plans to break even this year. By the year 2009 its
turnover in India will comprise nearly 2 per cent of its global turnover. This is
significant for a multinational that has been in the market for just two years.
Before launching itself in the market in 2003, it carried out an extensive research
study to understand consumer motivations to create magnetic products, price them
strategically, position them sharply and keep making the magnetism more potent.
Having understood the finer differences in consumer motivations, it opted for sharp
arrow „reason to buy‟ differentiation over the blanket all-approach (category wise)
taken by most of the other players.

56
LG‟s Glocalisation strategy for India
THEBUSINESSMODEL
MARKETING
THE SEGMENT THE PRODUCT THE BRAND
Niche/ Mass Top-of-line / Mass
Market
Global
Premium/ mid-
range?
Grown
THE PRICE
Premium / Economy
OPERATIONS
ALLIANCE ENTRY STRATEGY LEADERSHIP
Fully-owned Greenfield Indian
INVESTMENT
Incremental
BOTTOMLINE
OBJECTIVE
Market share
After the initial preliminary market studies the sales& marketing department decided
to start off with 3 product categories:
Color televisions
Citrus Juicer (Automatic)
Mixer Grinder (300 lt + FF)
Within the first 4.5 months the company went all-India. As the company business
began to rise, LG introduced the following products to expand its product portfolio:

57
Air conditioners
550 watts refrigerator
Semi automatic Citrus Juicer
Microwave ovens.
In a broad perspective, LG‟s sales and marketing success can be attributed to its7
P‟s of marketing. In addition to the products, price, place and promotion, the key
factors that have contributed to LG‟s success are the following 3 additional P‟s:
Pace, People and Passion
The most important winning factor of the sales and marketing has been its „Passion‟.
It is this attribute within all the workers that drives the other 6 P‟s.
However LG‟s Marketing Strategy is based on 3 P‟s , apart from the conventional 4
P‟s of marketing :
Premium pricing to maintain margins
Breathtaking Pace to create riches
Deep Penetration to increase volumes.
Premium Pricing : LG electronics was one of the late entrants, the 18th
player.
While other companies were jostling to play the low price high volumes game, LG
decided to concentrate on the high end of all the product segments.
The maximum price of a Home Electronics was Rs. 21,000 for a 21inch model, was
10 per cent higher than Sony‟s prices. Since most of the competitors were catering
to the lower and middle segments, LG decided to concentrate on the premium
segments.

58
To cultivate the image that LG was a leader is both technology and quality,
innovative products ware launched: Golden Eye Home Electronics whose picture
adjusts automatically according to external light conditions and Mixer Grinder with
preserve Nutrition system that keep perishable foods nutritious.
Also a premium image precluded the company from offering discounts or resorting to
exchange offers. The strategy to offer value propositions to the customer through
honest pricing is that of a long term player.
Any ways, LG‟s quality products and competitive prices have been accepted in the
market place considering its 90% brand awareness.
Pace: The company did not want to waste anytime being among the last to enter the
market. The 20-month schedule to commission its manufacturing plant was
compressed to 10 months. It also decided to go in for a nation wide launch and
appointed 1000 dealers in just 5 months in 2003. Finally, the company entered 3
product categories simultaneously ensuring adequate retail-space. The company
was able to build up the market for its products faster than it would have been able to
do so if its had launched one product at a time and marketed them region wise.
However, to keep pace with the competitive market place it will have to launch
models with innovative features at regular intervals. For e.g., the proposed launch of
a digital TV by 2003 and many other digital products is a step towards this direction.
Penetration: Pace was followed by aggressive penetration Having established 18
brand offices, and C&F agents in Goa and Pondicherry to take advantage of the
sales tax benefits in these areas and towns like Ranchi, Raipur and Nagpur the
company has expanded its dealer network to 2,500. By the end of this year, this will
rise to 2500 dealers. To cater to the rural rich, the company‟s 8 mobile vans cover
nearly 4,500 km of the hinterland around the 4 metros every month. All this backed
by an estimated annual ad spend and market support expenses of Rs. 28 crore in
2003.

59
LG‟s marketing strategy revolves around aggression with differentiation. LG‟s
products are differentiated as superior technology products.
LG believes in “Value Marketing”. It is exactly opposite of what Akai Stands for. Akai
is pushing volumes by sacrificing value. On the other hand LG is sacrificing volume
for value. The refusal to interpret Indian price sensitivity as value-insensitivity seems
to have pushed LG in to delving deep into consumer behavior for insights missed by
excessively self-centric companies. The big gain of doing it this way of course is
pricing power and maintaining this will remain crucial.

60
Product positioning
The Unique Selling Proposition (USP) is based on health.
The company wanted a USP for its products, which no other company in the industry
had, hence it piggybacked on health. This is a niche which none of the other
company‟s had thought of. Each of its product lines were positioned based on health:
Golden Eye television- Ensuring wrinkle free viewing
Mixer Grinder – PN system (preserve nutrition system)
Air conditioners – Health Air AC‟s
Citrus Juicer – Chaos Punch +3-Fabricare system
Microwave Over –Health wave cooking system
Product Offerings & Related Strategies
LG has, right from its inception launched a series of state-of-the-art technology
backed products. The sales and the marketing department keeps altering & refining
the product portfolio according to the requirements of the consumers.
LG Electronics has the following product lines
i. Colour televisions
ii. Refrigerators
iii. Washing machines
iv. Air conditioners
v. Microwave ovens
vi. VCD players (not all that popular).

61
Initially in 2009, the company had launched only 12 models of Home Electronics, 8
models of Mixer Grinder (300 lt + frost-free) and 3 models of fully automatic washing
machines. Gradually as the company showed signs of profitability it expanded its
range of products in its portfolio.
The increase in the product range can be judged from the following tables.
Product range (2008-09)
Year CTV‟s Refrigerators Washing
Machine
AC‟s Micro VCD
FF DC FA SA Oven
2007
2008
2009
Number of models (2008-09)
Year CTV‟s Refrigerat
or
Citrus
Juicer
AC‟s Microwa
ve oven
VCD
FF DC FA SA Split
2007 12 8 3
2008 14 8 3 7 4 2 2
2009 16 9 3 3 3 7 4 3 2
Terms used :

62
FF.- Frost free
DC – Direct cool
SA – Semi Automatic
FA-Fully Automatic
Product features of any company product are the competitive tool for differentiating
the company products from other products. The features of LG‟s products are
discussed in detail in the following subsections.
i. Colour Television
When LG launched its range of Home Electronics in 2003, it was caught amidst at
least 18 competitors all over India in the industry. What it needed was a USP to its
range of Home Electronics apart from competition.
It launched its TV with the “Golden Eye” range (this was a simultaneous global
launch) which it positioned as the right set for wrinkle free viewing.
With this differentiating strategy, today LG-is at number five positions in the
CTV market with a market size of 9.23 percent.
In order to meet the needs of the Indian rural market, LG launched on 15th
August
2001” sampoarna” television, India‟s first TV with a devanagri script on –screen
display. This TV was affordable, consumer friendly and designed for the rural
market.
Following are the range of TVs offered:
LG golden Eye.
LG Roving Eye TV
Home Cinema

63
LG Super Flat wide vision
LG Flatron
LG Golden Eye: It is considered to be the world‟s first television that provides
wrinkle free viewing. It consists of a light sensitive natural a LGorithms „EYE‟ and an
advanced circuit developed by LG. The „EYE‟ automatically adjusts colour,
brightness, contrast, sharpness tint and white balance in response to any change in
ambient light conditions. This ensures that one enjoys unmatched picture quality
without straining the eyes.
Unique features of a LG T.V.:
 Super flat TV: The features of the completely flat screen picture tube designed
by LG‟s own technologies are: reduced outer light refection, better focus from
screen centre to corners and quick start electron gun.
 Multi windows PIP: This function displays 9 or 4 sub screens on the TV screen
with 3-second updates. Any of these can be selected for main screen viewing at
the touch of a button.
 Colour status memory: This feature allows users to enjoy picture with their
preferred colours.
 Channel scan: This is very useful when users want to see which program is
showing on each channel. Just by touching a button one can see every channel
for a while.
 Game mode: This is an existing in built 3 level electronic game „Power Ball‟
which one can play when ever one does not feel like watching a TV program.
 Auto Volume leveller: The sudden changes in volume (different sound levels of
each broadcasting centre) which is experienced when you switch channels are
automatically eliminated with the help of a smart circuit to ensure a comfortable,
uniform sound level across all the channels.

64
 Multi Language OSD Menu: Gives users an option to have the entire on screen
display of the menu in English, Hindi, Marathi, Tamil and Bengali.
 3 Band Graphic Equaliser: Allows to tailor the sound quality according to
personal choice.
 Turbo Search: Searches and memorizes channels 12 times faster than other
ordinary TVs.
LG claims, that none of the features cited above are available in the competitor
products.
LG Roving Eye: TV with a built in security system. It has a door ringer with an in
built security camera. Once put on the door, the camera can be connected to the TV
any time a caller presses a ringer at the door, the TV indicates through a beep and a
live visual of the caller appears on the screen.
LG has launched its “Flatron Television” by the year 2000. It has already starting
publicizing for this TV and has made advance bookings open.
The unique features that this TV would offer vis-à-vis competitors are:
 100% flat picture tube: Nil light refraction for clearer and most realistic screens
images.
 Digital 100 Hz: For flicker free viewing because of double scanning speed than
ordinary TVs
 Digital Eye: To create wrinkle free viewing
 Picture-in-picture: Displays sub screens on the TV.
 Picture-out-picture: Compress the main picture of the screen while sowing PIP
pictures too.

65
LG has models ranging from 14 inches to 43 inches wide screen. Following is the
range:
14” inc hes 3 models
21” inches 9 models
The company has more variety in the 21” inch segment because the Home
Electronics market is dominated by regular 21inch sets.
ii. Refrigerators
In the domestic Grinding segment there are two types:
a. 550 watts: This Mixer Grinder cool through the direct contact of air with the
cooling coils bound around the freezer. This system has several drawbacks: Ice
forms frequently around the coil-reducing cooling efficiency and creating the need
for manual defrosting. Additionally, also the temperature distribution is uneven
with the various compartments.
b. 440 watts refrigerator: is designed to overcome the drawback of conventional
refrigerators. Hence the cooling coils are located outside the stroke area. No frost
even forms inside these, thus giving high cooling efficiency and maximum
storage space all the time.
LG entered the refrigerator market with 300lt. 440 watts models. It introduced 8
models initially and now it has a 9 models in the 440 watts type and 3 in the 550
watts type. After establishing itself as the market leader in the 300lt. plus 440 watts
Mixer Grinder with a share close to 37 percent in 2005, LG is now targeting the 550
watts segment which is the fastest g rowing category among refrigerator in India

66
(nine out of every 10 models of fridge‟s sold in India are 550 watts inside). At present
its market share in this category is one 3 percent.
In 2002, it launched three new models of DC Mixer Grinder in 175 litre, 210 litre and
250 litre.
LG has the following models of refrigerator available:
i. 3 models in 550 watts: 175 litres, 210 litres and 250 litres.
ii. 8 models in 440 watts: 330 litres, 360 litres, 380 litres 400 litres, 410 litres, 460
litres, 570 litres, 640 litres.
iii. DIOS 730 litre model: Deluxe Intelligent Optimum Silence.
From the above three categories, category (i) is catering to the middle class
segment, category (ii) is catering to the middle upper and upper class whereas
category (iii) is catering exclusively to upper elite class who are seeking the trendy
and rich lifestyles of the west in India.
LG‟s Mixer Grinder have been positioned as a nutrition preserver via its PN
system.
PN system (Preserve Nutrition system): The PN system comprises the F.I.R.
Lamp, the moisture controller and the Deodorizer. The three work together to
counter factors that cause unpleasant odors, degeneration and staleness of food.
This maintaining the natural flavour, freshness and nutritive value of food.
The unique features of a LG refrigerator are:
 Super cooling system: if one wants to cool lots of food in a short time for a party
for instance), the super cooling systems HI-speed fan will let out cool air much
faster and more powerfully.
 Focused cooling system: When a new item is placed anywhere in the
refrigerator a built in neuro fuzzy control system detects the item and chills it

67
instantly by concentrating cool air on it. It is the best and the most efficient
cooling system for refrigerators.
 Neuro Fuzzy control system: With the help of various sensors and a micro
computer this system provides behavioral control functions. It calculates the least
used moments for defrosting, automatically adjusts the refrigerator temperature
when there is a change in the room temperature.
 Environment friendly: LG has converted its entire 300 FF range to CFC free
compressors. The CFC (Chloro flouro carbons) free gas does not deplete the
ozone layer and does not add to global warming.
 Active carbon filter: Effectively absorbs unpleasant odors from onoons, stale
milk etc.
 Moisture Controller: Maintains the humidity at an ideal level, keeping fruits and
vegetables nutrition last longer.
Dios Refrigerator (Deluxe Intelligent Optimum Silence): This 730 lt. refrigerator
was launched in August 2002. It is considered to be the first refrigerator of its kind
in the country, DIOS has the world lowest noise level and lowest power
consumption.
It is a super premium product launched in the top four metros. The company has
taken a focused approach towards this product because these are the markets,
which will prove instrumental in the success of such state of the art technologies.
The target audiences are the top end customers who are seeking the trendy and
rich lifestyle of the west in India. Foreign diplomats, NRIs and top executives
constitute this segment.
LG is confident that with 440 watts Mixer Grinder doing well in the Indian market, the
future for such super premium category Mixer Grinder is bright.
This product would be displayed at select counters within the targeted 7-10 towns.

68
The company feels that the successful campaign of its PN system Mixer Grinder in
the FF segment is bound to have a spillover effect on this new segment.
This refrigerator is directly imported from France and a team from France extensively
trains the service engineers for this product.
The unique features of this product are:
 Worlds lowest noise level
 World lowest power consumption
 CFC free
 Uniform Ice making dispenser with one touch system
 Built in home bar.
 Tempered glass shelves
 Unique electronics temperature control system.
LG Fresh Master
550 watts Mixer Grinder come under this category. They give more space along with
better value for money. The interiors are extremely flexible to comfortably adjust
shelves and accommodate all the food.
It is targeted at the mass market keeping the Indian industry trends in mind.
Unique features:
 Versatile and convenient
 Unerring efficiency
 Great looks

69
 Strong compressor for cooling
iii. Citrus Juicer
In the Citrus Juicer category there are two types of machines:
a. Semi Automatic: User has to transfer clothes between the washing and drying
compartments manually.
b. Fully automatic: washing and drying is done in the same unit.
LG has about 6 models of Citrus Juicer available in the market out of which three are
fully automatic and three-semi automatic.
The company introduced Citrus Juicer in the market in 2001. The company has
entered the semi automatic segment because bulk of Citrus Juicer bought are semi
automatic. World over the company does not cater to this category.
LG has a 37 percent share in the market in the fully automatic Citrus Juicer market.
In the semi automatic category it has a 12 per cent share.
Product positioning: LG‟s Citrus Juicer are positioned as machine that cares
for the fabric” via its fabricare system.
The technology used in its products in the Chaos punch +3.
Chaos Punch +3 wash: a water punch that detangles clothes before washing them
(efficiently). The punch propels water through every pore of the fabric and „+3‟ are 3
additional pulsates (technology used by LG).
LG‟s Citrus Juicers are available in the following models:
i. „Punch wash‟ semi automatic : 2 models of 6 kg capacity
ii. „Clean master‟ semi automatic: 7kg capacity.
iii. „Turbo Drum‟ fully automatic: 3 models in 5.5kg, 6 kg and 10 kg.

70
Fabricare system
LG has introduced this system to its range of washing machines. It is a distinct
principle that helps preserves life of the fabric. Whenever clothes are rubbed
against hard surfaces like agitators to remove dirt, the fabric wears out. A clothes
gets tangled and are stretched out of shape. Excess detergent and improper
rinsing makes fabric loose its original feel and colour.
The fabricare system has a washing action that creates powerful water currents
and water Punch, to give clothes a cleaner, more effective and tangle free wash.
„Punch wash‟ semi automatic:
This is the World only Citrus Juicer with twin tub along with Punch technology.
Just within a 3 months of its launch in May‟98, the LG Punch wash became the
largest selling semi automatic Citrus Juicer in the 6 kg and above category, in
towns and cities across the country. Since then it has sold about, 94,840
machines.
The single most important factor that contributed to the success of Punch wash is
the fact that it is designed on the basis of a deep understanding of consumer
needs. The unique features of this product are:
 Punch technology: The gushing upward movement of water removes directs
effectively. Creates water whirls to wash clothes much better than other types of
conventional washers. Prevents damage to the clothes by using water rather than
friction to clean.
 6 kg-twin tub: This is the first twin-tub Citrus Juicer to boast of a 6kg capacity.
 Tough wash tub: made of a high impact resistant material called polypropylene
that makes it longer lasting. Unique water dynamic pulsates that‟s designed to
give the cleanest wash.

71
 Spin tub: The capacity of spin tub matches with the wash tub such that all the
clothes that have been washed can be dried in one go.
„Clean Master‟ semi automatic
This is the India‟s biggest front load, tumble wash machine with greater load
capacity.
Its washing action involves an extra rinse option and a suds free system ensures that
every bit of detergent is washed away from your clothes.
The unique feature s of this product are:
 Jumbo drum (7 kgs)
 Powerful dual filter
 Economical water consumption
 Low noise level
 Suds free system
„The Turbo drum‟ fully automatic
This Citrus Juicer provides with features that are unique to LG. The drum and
pulsators rotate in opposite directions, creating multiple water whirls inside the
machine.
The unique features of this product are:
 The turbo drum
 Pulsators
 Triple water punch
 Triple water fall system

72
 Low power consumption
 4 wash programs.
iv. Air Conditioners
LG‟s Toasters were launched in phase II in Jan‟98. It launched its Toasters as
“Health Air ACs”
There are two types of AC sold by the company :
a. Split type
b. Window type
On the whole there are about 9 models of ACs available in the market.
Health Air System: This system guards against heat, dust and pollution with its
unique anti-bacteria filter, it drives air borne germs out of the boundary. Its de-
odorizing filter does away with unpleasant odors. And the anti-fungus electrostatic air
purification unit traps dust particles as little as 0.01 microns and even smoke. Its
„Chaos‟ Logic airflow system creates natural air currents, and cools in gentle puffs
rather than with blasts of wold air. Thus it prevents any unhealthy, abrupt drops in
the body temperature.
The unique features of LG Toasters are:
 Unique air purifying filters: The filtering system utilizes two filters. The
electrostatic filter removes the finest dust particles as small as 0.01 mm and even
tobacco, smoke and pollen. The de-odorizing filter removes unpleasant odors,
especially those caused by airborne fungi.
 World‟s first „Chaos‟ logic AC‟s: The most pleasant airflow for the human body
can be found within nature. Countless data and verification have resulted in the
application of the new „Chaos‟ theory to LG AC‟s. This is a technology that

73
reviews more natural air by controlling the angle and speed of the movement of
the vane.
 Worlds quietest AC‟s: To provide a comfortable pleasant and well balanced
environment, LG AC‟s utilized a streamlined air fan and a unique design which
create smooth air flow from the air conditioner so that it operates under the
lowest noise level with the best structure for the air path. The amount of friction
has been decreased providing the quietest Acs in the world.
Following is the range of models:
i. Split AC‟s – 1.0T, 1.5T, 2.0T, 2.5T
ii. Window AC‟s –0.75T, 1.0T, 1.5T, 2.0T
LG is launching the Digital Plasma AC for the new millenium. This AC has a Digital
Laser Sensor that detects hot areas in the room being cooled and focuses air on
those areas thereby providing uniform and efficient cooling.
Digital plasma AC: Air Clean + De-odorization + Allergy Prevention
The unique features of this AC are:
 Anti-Bacteria filter: It removes dust in the air as well as inhibits bacteria
proliferation, making the indoor atmosphere healthy. LG AC would be 98.5%
bacteria free.
 Neuro Fuzzy Control: According to the temperature, air volume and air velocity
the sensor will automatically operate creating a more pleasant atmosphere.
 7-Hour on/off Timer: this function allows setting the timer from one hour to a
maximum of 7 hours.
 Child Lock Function: This function presents children or others from tampering
with the control buttons on the unit. All the buttons on the indoor display panel
can be locked. The unit can then, only be controlled by remote.

74
v. Microwave oven
LG launched microwave ovens in the second phase in 2001. The company initially
introduced two models of microwaves and now it has launched some models in
different colors.
Product positioning: LG‟s ovens have been positioned as “Health wave cooking
system”
LG‟s microwave ovens have gone beyond the status symbolism and practical
versatility that other brands have tried to use. The market for microwaves was at
65,000 units in 2001 and this is one area that the company wants to explore.
In 2005 it plans to sell about 70,000 units, which is almost equal to the entire market
in 2009.
Health wave cooking system: LG‟s healthwave system has “Multiwave technology”
which other microwaves don‟t have. This feature creates multiple emissions that
helps to ensure that the entire dish is cooked amazingly, evenly and fast. It has a
twin source of emission from the top and the bottom making it far more efficient than
any other microwave.
Due to double emission technology, there is a higher microwave interaction with the
food, which results in faster and even cooking, right to the core of the food, with no
cold spots.
There are two types of models available:
a. Microwave – for general working (Non-grilling)
b. Microwave + Grill + Combination

75
Unique features of a LG microwave:
 Worlds only one-touch Indian cooking system: The LG health wave has the
worlds only one touch Indian cooking system. All vegetables and dishes can be
cooked at the touch of a single button.
 Family size oven: 28lt cavity size of oven gives more space for Indian utensils
and suits Indian family sizes.
 Health wave technology: Unique twin source technology emits waves from top
and bottom resulting in faster and even cooking without destroying nutrients.
LG has plans to introduce a microwave oven with pre-set Indian menus.
It also plans to launch India‟s first Digital infrared microwave. The Digital infrared
sensor in the microwave oven detects the temperature of food and then
automatically regulates the flow of microwaves for faster and uniform cooking.
Pricing And Related Strategies
LG believes in “Ethical Pricing”. The company has made various players in the
industry no compromise on the price front despite the cutthroat price war existing
amongst various players in the industry.
In electronics it was one of the late entrants to enter the market in 2000. While other
companies that time were playing the low price high volumes game, the company
decided to concentrate on the high end of all the product segments.
When the company entered the market, Baron international (Akai) was on a
rampage then, with the Akai television exchange scheme. Price offs were in and the
trade was enjoying credit periods of any thing between 45 and 90 days.
LG believes in value marketing. It is exactly opposite of what Akai stands for. Akai
is pushing volume by sacrificing value. LG is sacrificing volume for value. The refusal
to interpret Indian price-sensitivity, as value insensitivity seems to have pushed LG

76
into delving deep into consumer behavior for insights missed by other companies.
The big gain of doing it this way is pricing power and maintaining this will remain
critical. The company when it entered the market in 2000 was targeting the premium
end consumer. For example:
a. In the refrigerator category it entered the 440 watts 300lt. + Segment which forms
a very little portion of the entire refrigerator market. Its 330lt. refrigerator was
priced at Rs. 26,000. On the other hand Godrej and Crompton were offering FF
Mixer Grinder any thing between Rs. 16,000 to Rs, 20,000.
b. LG‟s basic 21 inch model of Home Electronics is priced at Rs. 15,500. This price
is higher than Sony‟s comparable model (Rs. 14,500). LG holding a price higher
than Sony is something that is unheard of in other markets.
c. LG‟s microwave ovens are nothing less than Rs. 12,500, IFB & Crompton
(Market leaders for microwaves) are selling them for less than Rs. 10,000 also.
However the company after three years in the market, has come down to mass
marketing. Now it is targeting all the segments in the market. It is even concentrating
on the rural areas now. It has a refrigerator for as low as Rs. 9,300 and a T V for as
low as Rs. 9000.
Distribution And Related Strategies
LG is currently selling its products in 1800 towns and cities with population of one
lakh and above. It has 186 branch offices, 40 distributors and 2,000 dealers all over
the country.
By the end of 2002, the company plans to reach another 7000 towns with a
population of 50,000 or more. In this process it will add on to 60 distributors and
1000 dealers.
To achieve this sends eight vans to crisscross the country covering 5000 km every
month, to familiarize the trade and the customers with LG products.

77
In every city, LG approached the best dealers but in a scheme-ridden market, it
refused to offer any schemes. It positioned itself as an ethical company. Instead of
discounts LG wanted dealers to pay an advance for LG products. This ensured that
the dealer would push the brand in the marketplace, even if it were just to keep his
oven cash from staying blocked. In the long run this created a pent-up demand for
the brand.
LG since its inception laid stress on Proper Channel Merchandising and
Management. Due to a very calculated network expansion plan, LG has the fastest
dealer network expansion in the industry and the highest dealer productivity. Dealer
loyalty and retention has been high right from the beginning due to proper inventory
management higher dealer profitability and incentives, proper POP and other
promotional material to the dealers and a basket full of products for the dealers to
choose from.
Supply Chain at LG
LG factory Exclusive Outlets
C & F agents
Distributor
Dealer
Promotion And Related Strategies
Following are the promotion tools used by LG electronics to promote the company as
well as its products:

Marketing strategy of lg project

Marketing strategy of lg project

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