LG Electronics India Ltd (LGEIL) has changed its brand strategy from being a mass brand to being a premium inspirational one. This is a step taken to enhance the brand communication and strengthen its product position, by delivering value through its quality and service to its consumers.
According to V Ramachandran, Director-Sales and Marketing, LGEIL, “We are known as mass consumer players in the consumer goods category, with strong brand equity in the eyes of our customers. But the Indian consumer is changing now. They are now seeking high-end world-class products, and have begun to move away from the savings-oriented mindset.”
LG Electronics entered the Indian market in 1997, and according to Ramachandran, the company became the number one brand in consumer durables in most of the categories such as CTVs, ACs, refrigerator, washing machine and micro waves, within a span of five years. Currently, the company has a 27 per cent share in the Indian consumer market. The company claims to have brought cutting-edge technologies to India, faster than anybody else, thus giving tough competition to all other brands.
LGEIL is also restructuring its marketing spends, resulting in a significant increase in its mass media expenditure for better brand visibility. The company had a marketing budget of Rs 320 crore in 2007, with a 60:40 split in favour of below-the-line activities. Next year, the company plans to increase the expenditure on mass media campaigns, even as overall marketing spends would be raised by about 10-15 per cent.
The company would also expand its product portfolio in India with focus on IT, flat panel display TVs and mobile phones. “We will also expand our home appliances segment with new products such as wine cellars and vacuum cleaners,” added Ramachandran.
He added that the products, especially the IT and GSM segment ones like laptops, would be youth-centric. The products would also cater to the Indian climatic conditions of dust and humidity, as well as power situations, something that the global products will not be able to cater to.
Ramachandran further said that the company would be revising the price of the products by two-five per cent, in relation to competition, product leadership and unique feature qualities of goods. “The new pricing structure is due to rising costs of inputs such as picture tubes for televisions, low profitability in refrigerators, and the overall strategy to reposition LG as a premium brand. And we are expecting a growth profit of about 20 per cent next year. We hope that the sales of our GSM and flat panel screens will increase by 20-30 percent.”