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LG plays it cool with kids' AC

21-May-2004
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LG plays it cool with kids' AC

To use kids as bait to attract consumers is an accepted phenomenon in the FMCG segment. Now joining the bandwagon are consumer durables and electronics players such as Voltas, with its Teenie Weenie range of refrigerators, and LG Electronics India Pvt Ltd (LGEIL), with air-conditioners for kids.

Initially, LG's Children AC would be available in the one-tonne capacity priced at Rs 22,000. The company plans to follow it up with a 1.5-tonne AC in the same category. "The product is meant for children in the age group of 3-12 years and will be rolled out in the market shortly," Mr Salil Kapoor, National Head (Room Air-Conditioner Division), LGEIL, said.

The product would be available in six shades, including lavender, green and blue. The Children AC would have pictures on the grills, which would glow at night. The company is working out specific promotional campaigns for the category, according to Mr Kapoor.

Is this move by the durables and electronics players a tactic to use pester power or is it just a positioning gimmick? Said Ms Rucheera Gumber, Senior Consultant, KSA-Technopak, "Today the marketing trend reveals that brand promotions have family orientation. Technology and pricing are not the main focus. Targeting kids is basically an extension of this family image."

In fact, it is just a "positioning gimmick" as far as the durables segment is concerned, she said, adding, "Kids are definitely a decision maker in the FMCG segment. However, they may not be a decision maker in the durables segment."

Commenting on this offering, Ms Radhecka Roy, National Head (Qualitative Research), TNS India, said, "The offering by LG for children would be targeted at the high-end segment. In particular affluent families who want to provide for their children and want to make up for probably what they missed out on."

Agreeing that with this new offering LG is targeting a niche market, Mr Kapoor said, in both the retail and home segment, the company is expanding its product portfolio. It has in the pipeline a range of over 30 new launches in the category this year, and LG Children AC is one such product. The company is looking at selling almost 15,000 units of Children AC.

Some of the other products in the category to be put in the market by the company will include a new designer range of ACs.

LG's AC division has recorded sales of three lakh units of ACs for 2003 up from two lakh units during the previous year, recording a growth of 50 per cent. The company plans to sell four lakh ACs in 2004, amounting to a turnover of Rs 850 crore in value terms. The AC division closed 2003 at Rs 500 crore, translating to a market share of 30 per cent.

In the split-AC category, LG has witnessed a 123 per cent unit growth, selling 70,000 units in 2003 up from 31,000 units during the previous year.

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