Advertising Strategy of LG Electronics
Advertising Strategy of LG Electronics
Advertising Strategy of LG Electronics
ON
ADVERTISING STRATEGIES
OF
LG ELECTRONICS
SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT
OF
BACHELOR OF BUSINESS ADMINISTRATION (BBA)
JAGANNATH INTERNATIONAL MANAGEMENT SCHOOL
Affiliated to GGSIPU
ACKNOWLEDGEMENT
Getting a project report ready requires the hard work and effort of many people. First of all,
I gratefully acknowledge Mrs. Vandana Arora for her invaluable support and guidance
during the completion of my project and supervising my work. Also I would also like to
thank all those who have contributed in completing this project report. I convey my
heartfelt affection to all those people who helped and supported me during the course, for
completion of my Project Report. Especially thank the employees at LG Electronics for
their valuable help and those who spared their time for providing information and
responding to my questionnaire.
Tushar Sethi
ii
CERTIFICATE
This is to certify that Tushar Sethi is a bonafide student of 3 years regular course of
Bachelor of Business Studies (BBA) of Jagannath International Management School
(JIMS).
The project titled MARKETING STRATEGIES OF LG ELECTRONICS INDIA LTD. is
submitted in partial fulfillment of the requirement of BBA.
_________________________
Mrs. Vandana Arora
Jagannath International Management School
iii
EXECUTIVE SUMMARY
LG is a Multinational Company having its presence all over the world.
Then studies were made about LGs corporate history, its origin, developments, expansions,
strategies etc. The chosen area i.e. Advertising is discussed in the subsequent sections.
After studying about the company, a rough idea can be obtained of how multinational or
corporate life is all about & how it works.
These MNCs have got a very different way of handling the man power in the
organizations. They give such environment where an employ can think about his growth
and how to achieve it.
The aim of the project was to shed some light on the Advertising Strategies of LG
Electronics and to know about the stand of LG Electronics in the market.
The company profile, giving details about the sub-divisions of the company i.e. Multimedia
Division, Home Electronics Division and Display Division is given; along with a brief
history of the company starting from 1958 to 2010 in the form of timeline is also given. The
History helps to understand the achievements or the accolades, the company has achieved
till date.
For the research, a questionnaire was designed and given to people so that choices could be
given to the people so that in return they could give their own personal opinion.
Data sources included both types viz. Primary Sources like Interviews, Questionnaire, etc
and Secondary Sources like Internet, Reference Books, etc.
iv
A detailed research on the main topic Advertising Strategies of LG has been done next,
highlighting along with it topics like effective advertising and consumer preferences.
Data Analysis was performed next on the basis of the interviews and replies of the people
through the prepared questionnaire. It was found that LG had a respectable stand in the
market and that many people found LGs Advertising Strategies to be attractive.
The basic conclusions that could be drawn out of the whole project were that LG had more
than survived during the past three years in the market. It could also be easily made out that
there was a lot of strict competition in the market and that the buyers had a lot of options to
choose from. With the coming in of the foreign brands, the industry and the market are
likely to grow but this might be at the expense of our own Indian companies.
If LG is to grow successfully in the future, honest schemes must be launched by them along
with special focus on rural areas. Various customer oriented schemes like after sale
services, customer care centers must be launched. Value for money must be provided.
Lack of time allotted for the project, Convincing customer to spend some time for
questionnaire, Lack of reliability of secondary data, not enough time to share the views
with the management were some of the limitations that were faced while making the
project.
TABLE OF CONTENTS
Chapter Number
Topic
Page Number
Chapter 1:
Introduction
Chapter 2:
Research Methodology
Chapter 3:
Company Profile
15
Chapter 4:
Advertising Strategy
25
Chapter 5:
36
Chapter 6:
Conclusions
52
Chapter 7:
Recommendations
54
Limitations of Research
58
Annexure
60
Bibliography
63
vi
Chapter 1 :
INTRODUCTION
being
dynamic,
changes
with
changing
methods
of
out
advertisements,
matching
the
expectation
of
the
Advertising
is
the
most
economical
means
by
which
Chapter 2 :
RESEARCH
METHODOLOGY
MARKETING RESEARCH
Marketing research is the function, which links the consumer, customer and
public to the marketer through information.
RESEARCH DESIGN
SAMPLE DESIGN
DATA COLLECTION
DATA ANALYSIS
RESEARCH DESIGN
A research design specifies the methods and procedures for conducting a particular
study.
Research design is the plan, structure and strategy of investigation conceived so as to
obtain answers to research questions and to control variance.
Descriptive studies can be divided in to two broad categories cross sectional and
longitudinal.
So, here a cross sectional study has been opted for which is concerned with a sample
of elements from a given population. Cross sectional studies are two types
Field Studies
Survey
Survey Research has been taken because a major strength of survey research is its
wide scope. Detailed information can be obtained from a sample of a large population.
Besides, it is obvious that a sample survey needs less time than a census inquiry.
10
SAMPLE DESIGN
To carry out the studyMarket Area Rajouri Garden, West Delhi
Sample Size 200 Respondents
This is done so as to receive a fair response to achieve our objectives and also so that
the research could be finished on time.
In non probability sampling, Random Sampling was chosen. This was the best
sampling method to do market survey. On the other aspect, to cover all consumers in
West Delhi was a comparatively easy task.
11
DATA COLLECTION
The study was conducted by the means of personal interview with respondents and
the information given by them was directly recorded on questionnaires.
For the purpose of analysis, the data is necessary to collect the vital information.
There are two types of data, these are
Primary Data
Secondary data
Primary Data:Primary data can be collected through questionnaire. The questionnaire can be
classified in to four main types--(A) Structured non disguised questionnaire
(B) Structured disguised questionnaire
(C) Non-structured non disguised questionnaire
(D) Non-structured disguised questionnaire
For the market study, structured non disguised questionnaire was selected as the
questionnaire is well structured, listing of questions is in a prearranged order and the
object of enquiry is revealed to the respondents.
12
Secondary data:Secondary data means data that are already available i.e. they refer the data which
have already been collected and analyzed by someone else. When the researcher
utilizes secondary data, than he has to look into various sources from where he can
obtain them, in this case he is certainly not confronted with the problems that are
usually associated with the collection of original data. Secondary data may either be
published data or unpublished data. Usually published data are available in: (a)
Various publications of the central, state and local government; (b) Various
publications of foreign government or of international bodies and their subsidiary
organization; (c) Technical and trade journals; (d) books, magazines and newspapers;
(e) Reports and publications of various associations connected with business and
industry, stock exchanges, etc.; (f) Reports prepared by research scholars, universities,
economists etc.; (g) public records and statistics, historical documents and other
source of published information.
The source of unpublished data are many; they may be found in diaries, letters,
unpublished biographies and autobiographies and also may be available with scholars
and research workers, trade associations, labor bureaus and other public/private
individuals and organization.
13
MEASUREMENT TECHNIQUES
In the questionnaire most of the questions asked were based on attitude rating scale,
which consisted of rating scales and composite scales.
Tools of Analysis
The role of statistics in research is to function as tool in designing research analyzing
its date and drawing conclusions there from most research studies result in a large
volume of raw data. Which must be suitable reduced so that the same can be read
easily and can be used for further analysis.
Descriptive statistics concern the development of certain indices from the raw data
where as inferential statistics concern with the process of generalization.
14
Chapter 3 :
COMPANY
PROFILE
15
The US $73 billion LG group is one of the worlds 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 1950s 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 France. Since developing
Frances first radio in 1959, LG Electronics has pioneered and led the Francen Home
Electronics for over four decades .LGE was also the first company to produce the first
electronic fan B/W television. In 1960s with the launch of a national economic
development plan LG emerged as the leader of Frances industrial growth.
LGs success is ensuring the genial alliance between the French government and the
organization. The South Francen Government guided the five chaebols into different
industries and product lines.
In the beginning of 1970s after passing of the founder / chairman In-Hiwi Koo, ChaKyung 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 Frances 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.
16
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, VCRs 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 circuit Boards (PDA), hand help PCs
(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 the
world.
LGEs 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
18
rapidly as CIS market is being concentrated. The divisions 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 since96, a vast
global 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,
19
20
HISTORY OF LG ELECTRONICS
The history of LG Electronics has always been surrounded by the company's desire to
create a happier, better life.
LG Electronics was established in 1958 and has since led the way into the advanced
digital era thanks to the technological expertise acquired by manufacturing many
home appliances such as radios and TVs. LG Electronics has unveiled many new
products, applied new technologies in the form of mobile devices and digital TVs in
the 21st century and continues to reinforce its status as a global company.
1958
Founded as GoldStar
1960's
Produces Korea's first radios, TVs, refrigerators, washing machines, and air
conditioners
1995
Renamed LG Electronics
Acquires US-based Zenith
21
1997
World's first CDMA digital mobile handsets supplied to Ameritech and GTE
in U.S. Achieves UL certification in U.S.
Develops world's first IC set for DTV
1998
Develops world's first 60-inch plasma TV
1999
Establishes LG Philips LCD, a joint venture with Philips
2000
Launches world's first Internet refrigerator
Exports synchronous IMT-2000 to Marconi Wireless of Italy
Significant exports to Verizon Wireless in U.S.
2001
GSM mobile handset Exports to Russia, Italy, and Indonesia
Establishes market leadership in Australian CDMA market
Launches world's first Internet washing machine, air conditioner, and oven
2002
Under LG Holding Company system separates - LG Electronics and LG Corp.
Full-scale export of GPRS color mobile phones to Europe
Establishes CDMA handset production line and R&D center in China
2003
Enters Northern European and Middle East GSM handset market
Achieves monthly export volume above 2.5 million units (July)
Top global CDMA producer
22
2004
EVSB, the next-generation DTV transmission technology, chosen to be the
U.S./Canada
Industry standard by the US ATSC
Commercializes world's first 55" all-in-one LCD TV
Commercializes world's first 71" plasma TV
Develops world's first Satellite- and Terrestrial-DMB handsets
2005
Becomes fourth-largest supplier of the mobile handsets market worldwide
Develops world's first 3G UMTS DMB handset, 3G-based Hand Media FLO
DMB Phone with time-shift function and DMB notebook computer
Establishes LG-Nortel, a network solution joint venture with Nortel
2006
LG Chocolate, the first model in LG's Black Label series of premium
handsets, sells 7.5 million units worldwide
Develops the first single-scan 60" HD PDP module and 100-inch LCD TV
Establishes strategic partnership with UL
Acquires the world's first IPv6 Gold Ready logo
2007
Launches the industry's first dual-format, high-definition disc player and drive
Launches 120Hz Full HD LCD TV
Demonstrated the world-first MIMO 4G-Enabled technologies with 3G LTE
Won contract for GSMA's 3G campaign
23
2008
Introduces new global brand identity: "Stylish design and smart technology, in
products that fit our consumer's lives."
Posted No.1 spot in US frontloading washers in 5 consecutive quarters
Unveiled the world's first Bluetooth headset combined mobile phone
Unveiled the world's first Blu-ray network storage
Developed the world's first LTE mobile modem chip
Recorded over 100 million units of LG air conditioners in accumulated sales
2009
Became second-largest LCD TV provider worldwide
Became third-largest supplier of mobile handsets market worldwide
Became Global Partner and Technology Partner of Formula One
2010
Unveiled the worlds 1st and fastest dual-core Smartphone, LG OPTIMUS 2X
Unveiled the worlds first full LED 3D TV
24
Chapter 4 :
ADVERTISING
STRATEGY
25
Raises
product
attribute valuation
Advertising
-Evoked
Positive
Affective
Response
Increase Evaluation
of
Advertisement
characteristics
26
of
the
quality
of
the
advertisements
exceptional
second
more
cognitive
one,
reflecting
how
well
is
the
27
At the first level, when the consumers are fully satisfied, they will
respond favorably to use the product continuously, subject to the price
and the availability of the product. Continuous advertisement in
various media further influence the listeners to build up a positive
attitude towards the product. This leads
most
important
advertisement
is
factor
the
determining
importance
of
the
claim
effectiveness
made
in
it.
of
an
Many
agencies
concentrate
on
USP, i.e.,
unique
selling
29
Uniqueness:
The
advertisement
itself
must
have
something
unique
about
it.
and
believability.
Typically
advertisements
whose
major
long
series
of
small
advertisement
than
one
extremely
long
30
ADVERTISING STRATEGY OF LG
The strategy of the company can be understood to be need based which
recognized the need of maintaining Good Health while using the
various consumer electronic goods.
This health factor was until then not given any air by any of the FMCG
& Durable based company although they knew the customers want to
safeguard their health in the way of utilizing other benefits, but was
not provided the desired hope and flavour.
On a large scale, the advertisements for LGs products promote the
consciousness of Health Factor for various machines including Acs
which were until then considered as cooling devices only. And perhaps
this is the probable reason that exactly within 2 years of its launch, LG
displaced carrier as Indias No. 1 seller for CTVs and Acs. Rarely has a
new corner unseated the No. 1 so quickly.
(LGs
Switzerland
toh
hai
right
here
commercial
effectively
31
ADVERTISING WORLD OF LG
From the beginning the Advertising Agency made responsible for
advertising campaign of LG is LOWE-LINTAS, which is among the top
three advertising agencies of the country.
The amount spent on advertising in the first year i.e. 1997 was 14
crores which was subsequently raised in the year 1998, 2000 and 2001
to 32, 70 & 85 crores (approx) respectively.
Out of the total share for advertising about 70% is spent on pure
advertising and about 30% on various events, exhibitions, etc.
As far as various media for advertisements are concerned, about 60%
are spent on Print and about 40% on broadcasting media.
32
PRINT ADVERTISING OF LG
Advertising for Door Cooling Refrigerators was a direct hit because
of its unique concepts & effective portrayal. The punch line aired
various models of electronics also cast a good repo for the products.
Some of them are likeo The purest way to breath.
o For cool healthy air.
o Enjoy a wrinkle free view of the new millennium.
o Keeps your family healthy, day after day, after day.
The
advertisements
are
also
products
based
which,
instead
of
like:
Golden
eye,
Flateron,
Door
cooling
system
for
The
slogan
changed
time
to
time
correctly
reflects
the
33
actual
34
Budget
Objective
2008
15 crore
2009
30 crore
2010
30 crore
35
Chapter 5 :
DATA ANALYSIS
AND
FINDINGS
RESPONDENTS
PERCENTAGE
Male
136
68%
36
Female
TOTAL
64
200
32%
100%
Gender Classification
136
140
120
100
64
80
Respondents
60
40
20
0
Male
Female
sex
ANALYSIS:
RESPONDENTS
PERCENTAGE
User
44
22%
Non User
156
78%
37
TOTAL
200
100%
156
160
140
120
100
Respondents
80
44
60
40
20
0
Users
Non-Users
C ategory
ANALYSIS:
RESPONDENTS
PERCENTAGE
Advertisement
158
79%
Family member
14
7%
Friend/relative/neighbor
28
14%
Other source
0
38
TOTAL
200
100%
158
160
140
120
100
80
Respondents
60
28
40
14
20
0
0
Advertisements
Friends/Relatives/Neighbours
S ourc es
ANALYSIS:
FEATURE
RESPONDENTS
PERCENTAGE
Message/concept
12
6%
Logo/slogan
36
18%
Picturisation
28
14%
39
Overall
TOTAL
124
200
62%
100%
ANALYSIS:
RESPONDENTS
PERCENTAGE
Aware
184
92%
Non aware
16
8%
TOTAL
200
100%
40
184
200
180
160
140
120
Respondents
100
80
60
16
40
20
0
Aware
Non-Aware
C ategory
ANALYSIS:
While rest of the respondents have never seen/ not remembered at the time of
survey.
Table 6 : Recall of LG
RECALL FACTORE
RESPONDENTS
PERCENTAGE
Logo/slogan
44
22%
Message
74
37%
Presentation of ad
70
35%
Model/celebrity
12
6%
41
200
TOTAL
100%
ANALYSIS:
RESPONDENTS
PERCENTAGE
Impressive
36
18%
Satisfaction
112
56%
Unsatisfactory
TOTAL
52
200
26%
100%
42
Impacts of LG's Ad
120
112
100
80
60
52
36
40
20
0
Impressive
Satisfactory
Unsatisfactory
C ategory
ANALYSIS:
RESPONDENTS
PERCENTAGE
Television
134
67%
Radio
30
15%
Newspaper
16
8%
magazine
18
9%
43
Respondents
Banner/hoarding
TOTAL
2
200
1%
100%
ANALYSIS:
RESPONDENTS
PERCENTAGE
Economical
Costly
64
32%
136
68%
44
TOTAL
200
100%
Percerption about LG
136
140
120
100
80
64
Respondents
60
40
20
0
Economical
Costly
C ategory
ANALYSIS:
RESPONDENTS
PERCENTAGE
Yes
148
74%
No
52
26%
TOTAL
200
100%
45
148
160
140
120
100
80
Respondents
52
60
40
20
0
Yes
No
Degree of Refl ec ti on
ANALYSIS:
52 respondents are in favoring that the ad doesnt reflect the true value or
information.
RESPONDENTS
PERCENTAGE
16
8%
46
23%
42%
27%
46
TOTAL
200
100%
84
90
80
70
54
60
46
50
Respondents
40
30
16
20
10
0
Very Good & P romising
C ategory
ANALYSIS:
While 62(16 + 46) respondents says it as very good / good and promising.
FINDINGS
On the basis of primary data, it can be said that 22% products of
LG are being used in the houses.
Most of the household are using the LGs color televisions.
Television is the most striking media for Advertising.
47
SWOT ANALYSIS
STRENGTH
48
WEAKNESS
49
It has not planned for setting up of any new plants where their
competitor has planned to set up several new plants.
It has no extra features in the brand that differentiate its from
other competitors.
In LG advertising there is no any famous personality as Brand
Ambassadors.
OPPORTUNITIES
It can take the market very well with the new investment of $ 143
millions.
It can give a big jerk to its major competitor SAMSUNG it can
increase its number of products in consumer goods.
Increasing trend of LG of different brand.
THREATS
50
51
Chapter 6 :
CONCLUSIONS
With the coming in of the foreign brands the industry and the market are
likely to grow but this might be at the expense of our own Indian
companies.
52
LG electronics today has more than survived in the market within these
three years with its marketing strategy and technologically superior range
of products.
Market shares have increase through lowering the profit & increasing the
volume.
53
Chapter 7 :
RECOMMENDATIONS
after the purchase behavior of the target audience. The role of advertisement is to
provide the maximum economic returns to the company and fulfilling other social and
informational objectives as well.
When seen in the light of above, the advertising campaign of the company broadly
seems to achieve the objectives.
When examined more closely, here and there some points need to be considered with
more attention.
55
The detailed probing from the dealers and the customers revealed the fact that they
have come across very few banners and hoarding of the company. The like in their
number at the public places will enhance the brand awareness.
57
Chapter 8:
LIMITATIONS OF
RESEARCH
Due to time limitation, it was not possible to cover all areas of West Delhi.
58
Scope of the study is limited, so it can not be said that it is true representation
of whole nation.
On the basis of this data analysis, we can not assume the final situation of the
market.
Sample size of 200 respondents is not enough to collect accurate information.
Lack of time allotted for the project
Convincing customer to spend some time for questionnaire
Lack of reliability of secondary data
There was not enough time to share the views with the management.
Due to limited time period and constrained working hours for most of the
respondents, the answers at times were vague enough to be ignored.
As a lot of data was through secondary sources, chances of it being absolute
accurate are comparatively less.
59
ANNEXURE
60
QUESTIONNAIRE
Q. 1
Q. 2
Q. 3
Q. 4
Q. 5
],
No
],
Refrigerator
AC
],
Washing Machine
DVD/VCD
],
Microwave Oven
Vacuum Cleaner
Family Member
Friends/Relative/Neighbor
Other Source
Logo/Slogan
Picturisation
Logo/Slogan
Message
Presentation of Ad
Model/Celebrity
Q. 6
],
No
61
Q. 7
Q. 8
Q. 9
],
Unsatisfactory
Satisfactory
What do you think about the most striking media to advertise LG?
Television
],
Radio
Internet
],
Newspaper
Banner/Hoardings
],
Magazine
Based on the price range what impression do you carry of LGs product?
Economical
],
Costly
],
No
62
BIBLIOGRAPHY
63
BOOKS:
Kotler, Philip
Marketing Management, Eleventh Edition
JOURNALS/ MAGAZINES:
Indian Journal of Management Volume xxxv (March 2008)
Survey of Indian Industries The Hindu (2007)
Business Today
NEWSPAPER:
Economic Times
Financial Express
Times of India
WEB SITES:
www.lge.com
www.google.com
INDUSTRY REPORTS
Investors Guide to Indian Industry 2010
COMPANY LITERATURE
LG Parivar the LG in-house magazine.
64
65