LG's Growth Strategies in India

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Case Details:

Case Code : MKTG115
Case Length : 19 Pages
Period : 1998 - 2005
Pub Date : 2006
Teaching Note :Not Available
Organization : LG
Industry : Consumer Electronics
Countries : India

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts

LG's Product Line

Since its initial years in India, LG has focused on bringing out new models regularly in its product range. In its first year of operation in India, LG launched 70 models across a range of products. In 1997, it introduced its Golden Eye Technology TV, which had a light sensitive natural algorithm 'eye.'

The 'eye' responded to the changes in lighting in the room, accordingly and adjusted color sharpness, brightness, contrast, tint and balanced them automatically.

Thus, LG showed that it cared for customers' health through its products. LG's concern for health of customers was its unique selling proposition (USP) in the Indian consumer durables market.

Similarly, LG positioned its refrigerators as the 'preserve nutrition system' refrigerators. In 1998, the company launched air conditioners as Health Air ACs...

Computers and Mobile Phones

In September 2002, LG announced that it would launched Linux based PCs named 'My-PC' for the home segment. Industry analysts expressed concern that LG was taking a huge risk by opting for the lesser known Linux operating system. They said that even though Linux was being promoted by bigger companies aggressively, it was relatively less known than Windows in the desktop market...

Distribution

In its initial years in India, LG realized that it was important to have a good distribution network to reach far-flung towns and the semi-urban markets.

To increase brand awareness among consumers, LG sent vans across India covering a distance of 5000 km every month. The company focused on building a strong dealer network.

In the late 1990s, when the trend was to give a credit period of 45 to 90 days to dealers, LG did not offer any such schemes to attract dealers.

It instead asked them to pay in advance for its products. This ensured that the dealers pushed the brand in the market to keep their own cash from being blocked. At the retail and trade level, as the volumes grew faster, LG pushed its dealers towards selling products at lower margins and focusing on quick rotation of stocks...

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