Comparison between Two Companies

Marketing Mix
We are comparing two company’s marketing strategies. Which involves Dawlance and LG’s
refrigerator. Dawlance and LG are two brands which are involving many products but just to
understand marketing mix we are including particularly refrigerators.

1. Introduction of companies:
“Dawlance”
Dawlance United Refrigeration Industries Ltd. was established in 1980. It is the Largest
Company in Pakistan engaged in appliance business. Dawlance stands for durable & reliable
household appliances. Its refrigerator Factory is located in Hyderabad. The main Objectives are
to provide dependable and reliable product at reasonable price to majority of Pakistanis and to
enhance their quality of Life.

“L.G”
Haniska International is a multinational company, located in Korea. LG is an agent of Haniska
International in Pakistan market. LG is an importer of home appliances in Pakistan. It imports
Refrigerators, Air Conditioners, Washing Machines & Microwave Ovens from Korea and China.
LG has got around 300 dealers all over the country. Marketing objectives of L.G are: to provide
world class product to upper and upper middle class to enjoy real luxury in their life.

2. Marketing Mix:
It includes four P’s of companies’ strategies. We are discussing here four P’s which includes

i. Product
ii. Pricing
iii. Promotion
iv. Place
We comparatively study these four P’s of these organizations.

2.1. PRODUCT STRATEGY:

Dawlance
 It is a Pakistani company and it
develops the products for upper,
middle and lower classes. It contains
all basic features in its products. It’s an
international standard brand.
 Present Market Share of Dawlance
product is: refrigerators 65%, Washing
LG
 LG in Pakistan is a luxury brand which
produced products for upper class and
upper middle class to enjoy luxury
items. Because it’s a foreign company
in Pakistan and its items are from
Korea so it provide all basic and also
some advance features in its products.
 Machines 35%, Microwave Oven 40%,
Chest Freezers 45%, and Air
Conditioners 15%.
 Dawlance believes in durability and
reliability of product and it also gives
its customers the guarantee and
warranty services.
 It provides its refrigerators, five years
compressor guarantee and one year
free service in spare parts under normal
use.
2.2. PRICING STRATEGY
Dawlance LG
 Dawlance has got 52 models in
refrigerators line and it focuses on
upper class and middle upper class.
Product-wise price list enclosed in this
document.
 Dawlance believes that all products in
cities must be same and have same
price so, they have uniform pricing
margin in all cities for all dealers.
whether, it is small scale or not.
 For uniform pricing margin Dawlance
bears transportation expenses by its
self and make product available at
same price in all over country.
Pricing Lists
Few products pricing is discussed here in this list.
Dawlance
Model
Dawlance DW 550 GD Glass Door Digital Display 505L
Dawlance DW 600 Digital Display 560L
Dawlance DW 650 SBS Inverter Digital Display 640L
Dawlance DW 650 Inverter Digital Display 611L
Dawlance Mirror Glass Inverter 9175 WB 350L/12.4 cu ft.
Dawlance Mirror Glass Inverter 9188 WB 425L/15 cu ft.
Dawlance LVS Plus 9175 WB 350L/12.4 cu ft.
Dawlance Mirror Glass Inverter 91996 WB 525L/18.5 cu ft.
 Present Market Share of L.G product
is: Refrigerators 4%, washing
Machines 2%, Microwave Oven 3%,
Chest Freezers nil, Air Conditioners
25%.
 It also provide durability and reliability
of their product.
 It provides its refrigerators, five years
compressor guarantee and one year
free service in spare parts under normal
use.
 LG pricing strategy
Gross profit= cost+ fixed markup
 As LG is catering upper class so their
dealers are in big cities only. Product-
wise price list enclosed in this
document.
 Pricing policy of LG is which includes
normal formula
Marketing expenses= import cost +
reasonable gross profit
Which is to cover their expenses and
also give them reasonable profit.
Pricing
Rs. 58,500/-
Rs. 62,000/-
Rs. 75,000/-
Rs. 69,000/-
Rs. 49,500/-
Rs. 53,500/-
Rs. 42,000/-
Rs. 57,500/-
 LG
Model Pricing
LG GN-D722HLAL Door-in-Door Top Freezer Smart Inverter Rs. 145,500/-
LG GN-B722HSPL Top Freezer Smart Inverter Rs. 136,500/-
LG GN-M722HSHL Top Freezer Smart Inverter Rs. 138,000/-
LG GN-M722HLHL Top Freezer Smart Inverter Rs. 135,000/-
LG GN-B722HLCL Wide Top Freezer with Smart Inverter Rs. 134,000/-
LG GR-M782HSHL Top Freezer Smart Inverter Rs. 139,500/-
LG GR-M822HLHL Wide Top Freezer with Smart Inverter Rs. 145,900/-
LG GR-B822HSPL Top Freezer Smart Inverter Rs. 144,900/-
LG GR-M822HSHL Top Freezer Smart Inverter Rs. 148,900/-
LG GR-M782HLHL Wide Top Freezer with Smart Inverter Rs. 141,500/-

2.3. PROMOTION STRATEGY

Dawlance
 Dawlance promotion budget is around
1.75% of their turnover.
40% spending of their budget is Print
Media,
20% goes on TV,
20% on Outdoor activity and balance
20% on Sales Promotion activity.
 They believe Print media is one of the
best promotion strategy because it
mainly attract their customers.
 They pays less to promote their
products they have direct relations
between consumers and sales.
 They give direct advantage in terms of
price reduction to their customers.
LG
 LG is very concerned with promotion
strategy, their promotion strategy is
being much planned and executable.
They follow a global approach and
theme line through Korea to Pakistan.
 It is not possible to get through their
promotion budget but information is
collected Pakistan Advertising
Association and from some other
sources that their spending is around 6/7
per cent of their sales in Pakistan.
 As a multinational company they cut of
the budget from strong market
promotion strategies to weak market
promotion strategies.

Promotion graph Promotion Graph

Agents Agents
20% 15%
Print media Display
40%
54% 23%
20% Outdoor Friends
8%
20% Tv
Tv
2.4. Place strategies:
Dawlance
 800 dealers all over the country has
been worked for Dawlance. Almost all
markets of appliances has Dawlance
products in all over Pakistan. They
have got 80% penetration in dealer
sector. Customers can get their product
from any market of appliances.
 Dawlance has various types of dealers
in all over Pakistan.
"A-class" are about 25% they sell about
1000 units per year. "B-class" dealers
are 50% in total dealer, who sell from
400 units up to 999 units per year. "C-
class" dealers are about 25% who sell
from 200 up to 399 units per year.
 They also got their big warehouses in
all over Pakistan to provide quick and
timely delivery for delivery purposes.
LG
 As it is stated earlier that LG is
imported brand which imports
products from Korea and china as well.
 They import special products for their
special customers from their principle.
They import on the basis of their
customers feedback.
 They maintain their limited stock from
the replenishment of dealer stock based
on their sales which is six week level.
 They have only 300 dealers in all over
Pakistan in big cities and some in small
cities. They have a strategy of uniform
pricing in all over world.

3. Conclusion:
From the above comparative study we have concluded that there’s no comparison between LG
and Dawlance refrigerators. There are many reasons behind this. Dawlance is a big local
company which makes refrigerators. It has got all engineering capabilities and good finance. It
produces universal accepted product by quality. It also focuses on their quality. There’s no doubt
on their quality. On the other hand LG is a multinational company and have some of its agents in
big cities of Pakistan. It’s just an importer and imports products from Korea and markets its
product in Pakistan.
Dawlance have make their name by the good quality. Dawlance is reliable in the national level
and rest of its competitors are not yet come to its comparison. It don’t feel any threats from its
competitors and importers also. LG is an import-based activity, due to low value of rupee and
increase in US dollar makes LG expensive. So LG has a big challenge to maintain its value and
growth in the comparison of local manufacturing companies.
Dawlance has made products for middle, upper and lower class as well. But LG only imports
products for upper and upper middle classes. So present market share for Dawlance is 65% and
present market share of LG is 4%.
As from the above discussion Dawlance is a leading company as compared to LG because of its
low pricing, market share and availability of spare parts (maintenance). LG has many new
features but it’s not successful in Pakistan market because of its high pricing and high import
taxes. A company’s success and dominancy depends on the best strategic planning as well as
favor of government. So for LG it is suggested that LG should install its own plant in Pakistan so
the customers will be able to buy their product as reduction of import taxes.