Case study - LG

SUBMITTED TO:
Mrs. REKHA ATTRI

SUBMITTED BY: Dilip Singh Hada

ERP NO.CBS/2010-12/9

Q.1 Study the case and identify significant issue.

ANS. These are the main issues in the LG COMPANY SET UP IN 1997 - Company was set up in India in 1997. LG want to set up in India in 1990 but due to the rules it cant setup here as an independent venture. LGs MANAGING DIRCETOR Kwan-Ro Kim director of LG was so different person . He was of

insouciance nature means never take any type of tension even at the time of decline in market share in 2005. HALF HEARTED ADVERTISING POLICY- LG follows the advertising policy of 1990 time in which they advertise or push the product when the consumer entered the stor e. PYRAMIDAL SALES STRUCTER- Sales stricter of LG were also a main factor behind its success in Indian market because it helps it in reaching in every part of the country and achieving its goal. ECONOMY RANGE OF PRODUCTS- At that time LG was a dominant player in the white goods industry and it also know the basic characteristics of Indian consumers that they are very price sensitive so according to their need LG launch the economy range of their products for easy acceptance. LAUNCH OF SUPER PREMIUM PRODUCT S- launching of super premium products and opening of exclusive showroom especially for these products on the assumption of Highend products need high -end outlays

Q. 2 Conduct a SWOT analysis of LG.

ANS. - SWOT analysis of LG is as follows

STRENGHTS
WIDE RANGE OF PRODUCTS The main strengths of LG is that it deals in wide range of every and product. Because of this it is able to capture a large part of every type of market which helps it in getting profit from every market WIDE DISTRIBUTION NETWORK LG has a wide distribution network which includes 10000

trade partners, 51branch offices, 87central area offices (CAO) and 78 Remote area office (RAO) which helps it in distribution of its products in every part of country including small towns and villages. AFTER SALES SERVICES As the distribution area of LG is very wide so it is able to provide a

good quality of after sales services which increase the customer satisfaction and loyalty. MARKET LEADER IN HOME APPLIANCES - LG is a market leader in home appliances because it manufacture every product which comes in homes appliances category for ex. Refrigerators, colour TV, Microwave ovens, Washing machines ,Mobile phones, Air conditioning, Computer products.

WEAKNESSES
LOW SKILLED EMPLOYEE- the biggest weaknesses of LG is that it has very few skilled employees and for the rest there is no development and training programme. ADVERTISING POLICY the advertising policy followed by LG is not so good because it

advertise its product in old fashion means that they advertise the product or push it when the customer entered in the store.

OPPORTUNITIES
SHIFT TOWARDS RURAL MARKET- Rural market can be big opportunity for LG because till that time other manufactures of home appliances concentrating only on urban market no one think about the rural market. So LG can moves towards the untapped rural market and can gain a handsome profit. WHITE GOODS MARKET IN INDIA white goods market of India is increase day by day.

Demand for branded white goods also increasing so company can concentrate on building itself a premium brand. In that company can offer wall mounted AC (RS 50000 and above), Dios refrigerators (RS 65000 and above) and X -canvas plasma TVs (RS 1 laky and above). INNOVATION IN PRODUTS By innovating its existing products LG can attract more

customer as well as it also helps it in retaining the existing customer.

THREATS
CLOSE COMPETOTORS Samsung is the main competitor who also provides the similar

products as LG and also for some extent he is a dominant in the market. CONDITION OF ECONOMY the condition of economy is not good all around the world and

it affect the purchasing power of consumer and people feel difficulty in purchasing the white goods .so this situation can also affect the sales of company. PRICE WAR-price war between the LG and other competitors also result in loss of revenue and this can be a big problem in future because there are many local brands that are providing the white goods at very low price.

Q. 3 what market strategies did LG adopt to be so successful in India?

ANS. - Different market strategies was followed by LG in different parts of India according to type of consumers found in that region. y After getting permission to operate as a wholly subsidiary LG was one of most aggressive advertiser in white goods industry. At that LG spends 130 cores for its marketing activities which were 5% of its revenue. y A close tie up with leading Indian cricketers and apart from this LG also launched a cricket game on one of its television model y Break out chain of urban market dependency and move towards the rural market of India y To cover a large part of market LG open its branch offices in big cities and central area offices (CAO) in smaller town and in village s remote area offices (RAO). y In a small town of Utter Pradesh for the selected household they a 15 day free trial of a 50 inch flat screen TV during cricket season. y LG introduce its economy range of products in country because they know that the Indian consumers are very price sensitive and they always try to get the best quality at responsible price. y Offer customized product for ex. 2000 watt speaker watt TV for subcontinent people, bright colour refrigerators in Punjab and Calcutta. y To stay in Indian white goods industry for a longer per iod of time LG decide to lunch the super premium products and spend nearly Rs 20 crore for promoting them .

Reference: www.lgcorporation.org