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“LG”s experience in Rural marketing

Presented By:
Raveendhar.k
IIPM, Bangalore.

LG Electronics
India Ltd.
LG’s Rural Foray
 LG India- tripled the number of its
retail & distributor outlets in rural
areas from 2004 to 2008.

 The avg. price of its Sampoorna range


of CTVs came down to about the price
so competitive that, thereby bridging
the gap between CTVs and other local
B/W TVs.

 It also tapped local forms of


entertainment like annual haats and
fairs and made huge investments in
infrastructure for distribution and
marketing.
Rural India: The Challenges
 Electricity Shortage – Sporadic Power
Supply
 Acute Water Shortage.
 Poor Transportation availability.
 Consumer Finance Options.

üCan LG make energy saving


products??
üCan LG give him a washing machine
which consumes less water??
üCan LG give him access to buying
products near by his location??
The Solution
ü Set up of a Life style Research Team which
would analyze the needs & preferences of the
consumer , In-depth..

ü Understand at length his comfort levels in


terms of what they wants and what they
would spend for what they wants..

ü Make products and service available for him to


suit his needs & Preferences..

ü Have a deep pocket network to make products


available for him at a close proximity from
where they can access product easily..
4 A’s of Rural Marketing
Network/Channel Development – The key to improving
Rural reach
Increased Channel
Networking which Resulted
Market

▷ Regional approach in marketing is


Purchasing power by

1. Market is

Consumer Behavior
- S/W : Shift to Mid-High Segment
NORTH
Traditional Split A/C, FTV, W/M
Market Agriculture base
LG Extreme Temp. - N/E : Conservative,
Win.A/C, 2Tub W/M, 1Dr Ref

EAST 2. Different culture, life


Market
LG 8% Diversity in lifestyle
WEST
- Food Habits / Clothing
Market 25% Conservative - Language :18 official
LG 24% Poor Region - Customs/Religion
Humid
Cosmopolitan
Commercial
Modern Trade
SOUTH High Literacy
Market
Industrial Zone
LG 28% Modern Trade

D
BEST PRACTICE – DISTRICT NETWORKING(Example

B.O (Branch

- Profit
RAO -Heading & supporting
Population - 21 -Equipped with Stock point,
72 % -Equipped with Functional

RAO (Remote Area


- Sales & A/R
RAO - Enhance mkt penetration
-Enhance Relationship
--Accounting Solutions
Equipped with Infrastructure
& Manpower
BO
RSO (Remote Sales

-Covers Sub-Dealer
Network. -PR & Motivation
of
- SD.
Enhance penetration &
Sales & Service

Rural focus through excellent Reach


Jammu
Branch Off : 40
RAO : 63
Chandigarh
Jalandhar
Ludhiana Dehradun
Kundli Ghaziabad
Gurgaon Delhi(2 Guwahati Rural Sales Channel
Patna
Lucknow
Varanasi Dealers/SD : 9000
Jodhpur
Jaipur Asansol BANGL
Ranchi D Distributors : 1100
Ahemedabad Kolkata
Bhopal
Surat Bhubaneshwer
Thane
Indore
Channel
Mumbai
Raipur ASC : 1
Pune Nagpur
Hyderabad SSD : 600
Goa
Hubli ASP : 590
Bangalore
Chennai Statistics
Kozikode
Coimbatore
• ASC - Authorised Svc Centers MW : 5
• ASP -- Authorized Svc Provider Cochin Stock Point : 46
• SSD - Sales and Svc Dealers Br Warehouse : 36
• MW - Motherware House
SRI LANKA
Rural Marketing - Promotion Support initiative

LG Mobile Van at

Exhibition
Exhibition at
Kasargod Rajamundry

Cookery Classes at
different locations
for Rural
Rural Marketing - Promotion Support initiatives

1000 In Store Demonstrators

at Dealer counters in
Rural Cities
Road show
Road Show at
Findings…
“Improving the lives of the
billions of people at the bottom
of the economic pyramid is a
noble endeavour. It can also be a
lucrative one”
- C.K Prahlad