Head of Marketing | 16 Feb 2005
“I believe that marketing is beyond advertising and is beyond a 30-second ad. There are some companies which have a visibility issue, awareness issue, top-of-mind recall issue but when you reach a certain position, then your first priority is not visibility or awareness any more. I don’t think we need to run an advertising campaign saying that this is LG. People know LG the brand.”
Salil Kapoor joined LG Electronics in 1998. A mechanical engineer by profession, Kapoor has an additional degree in Business Administration from FMS, Delhi. At LG, he is currently heading the marketing function. He has been responsible for various assignments in LG Electronics India Ltd. like Marketing Support Manager, Zonal Head-Andhra Pradesh, Product Group Head for the air-conditioning business and finally Head of Marketing.
Kapoor has played a key role in the development and growth of the air-conditioning business making it the clear leader in the industry and sustaining its leadership position for the last two years. Under his stewardship, air-conditioners became the first LG category to establish industry leadership, with over 40% market share.
Prior to joining LGEIL, Kapoor was with Blue Star as Sales Head for water coolers and freezers in Delhi, and then he was with the marketing services division in the same company. He started his career with Fedders Lloyd as Sales Manager for air-conditioners. He spoke to Malini Menon of exchange4media on how LG has evolved as a brand and continues to establish its message of well being. Excerpts:
Q. Previously LG was very active in its advertising campaigns but lately there has been a lull in promotions. Don’t you think this affects the brand recall?
I don’t think that is totally true. Yes, we are not so visible in advertisements but we are very much visible in other areas. I believe that marketing is beyond advertising and is beyond a 30-second ad. There are some companies which have a visibility issue, awareness issue, top-of-mind recall issue but when you reach a certain position, then your first priority is not visibility or awareness any more. I don’t think we need to run an advertising campaign saying that this is LG. People know LG the brand. We have already spent a lot of money on advertising and awareness. On top-of-mind recall and awareness levels LG is at the highest level. So it is a conscious decision to move away from the 30-second space. We believe that there should be a 360-degree paradigm. In fact, in advertising we are taking a conscious decision that we will start looking at more avenues of consumer involvement than follow the typical ad spot way.
Q. But don’t you think that with the reduction of ads, the interaction with consumers has reduced?
No, it hasn’t. Actually, it has grown even more. We don’t want to spend more and more money. There is a global research which says that your mind switches off on a repeat exposure to any advertisement. You enter the minds of the consumer by exposure in the initial stage but after that you need to increase the level of involvement. So we are looking at increasing the number of ground events, in-film placements and more avenues where a consumer can be far more involved with the brand. So, we are consciously shifting this money to such activities rather than just putting them in advertising.
Q. What are the new initiatives that LG is taking up to increase the consumer interface?
We are putting in a lot of effort, time and money in improving the ultimate consumer interface. We believe that the moment of truth emerges when the customer goes out to buy the product; it is not when he spots the advertisement in a newspaper or television. The new initiatives are specialized stores that we have introduced. We have about 25 lifestyle shop outlets, and by the end of the first quarter, we are planning to expand to 75 such outlets. We have four X Canvas showrooms, where only plasma display panels, projection TVs and laptops are displayed, and will expand this to 25. Other than this, we are also planning to have specialized upmarket showrooms for the designer air-conditioners called Whisen, and Cyber Shoppe for IT and GSM products.
In all, the company has plans to focus on premium products and introduce 25 X Canvas, 15 Whisen and around 30 Cyber Shoppe outlets. These outlets will be present across the country and more prominently in the malls and the premium markets. In the existing showrooms, our effort is to refurbish the entire display with the latest state-of-art technology and latest designs. So, a lot of innovations are being done on point of sale branding and a lot of money is going to be spent around that.
Q. Will we get to see any new commercials from LG?
We are coming up with TVCs this month but then we stand by the fact that multiple exposures through ads do not translate to numbers. So we are going to have lesser number of spots but we would be making them differently. We are coming out with a new commercial for mobile phones. The campaign is based on the concept that it is better to be different than be better than others. The campaign has no human figures and we have used the theme innovatively. It depicts hands travelling through roads, stepping out of the car, going down the stairs, and proceeding towards LG outlets. Then the camera shows the hand jumping on to the stand and grabbing the LG handset. So the theme of the campaign is “Every hand wants one—LGH Mobile.”
There are more campaigns in the line-up. The washing machine campaign will be on air by February end, microwaves by the third week of February and the refrigerator campaign by 10th February.
Q. Despite three ad agencies, O&M, McCann and Lowe, being involved, why don’t we see any pathbreaking commercials from LG?
Every idea and every initiative has its time. I think the time has come now for all the pathbreaking ads to hit. There is no dearth of creativity in any of these three agencies. We now work with the three best agencies in the country. On the creative side, there is nobody who can come to the level of Piyush, Balki and Prasoon. I am sure that there will be a lot of pathbreaking commercials and the mobile campaign would be the first for this year.
Q. What really is LG’s positioning—is it health or family values?
LG continues to stand for health and wellness and everything associated with well-being. We have grown because of this. So, even the new campaigns that we are coming up with in air-conditioners talk about energy and wellness. Energy comes from health and it isn’t like we have changed the positioning; we have evolved in such a manner that the customer likes it and they keep us at the same ladder of evolution. It’s very tough to build positioning for brands but very easy to dilute them. It’s a tight rope and you have to walk the tight rope in such a manner that you get good exposure, the customer feels that you have evolved as a brand but at the same time there is no difficulty in his mind in placing you. So, LG’s positioning is a blend of health, well-being and family values.
Q. With Chinese players entering the market, do you think that there will be a change in price points?
I think the price points will stabilize for sometime until and unless there is a drastic price action that is taken by one of the new players. However, at the same time it will be very difficult for the established players to go for another price war because this industry has already seen a lot of price wars resulting in prices coming down. So, at the over all macro level, it is time for the industry to stabilize now.
Moreover, consumers nowadays will not go in for a product that is priced drastically low; he would rather go for quality. So the new players who have come in will have to price slightly higher or lower because if they make drastic changes then the consumers may reject them. Price is also in a way perception, so if you keep your prices very low, then there is a good chance of rejection.
Q. What is the kind of sales that have been generated from lgezybuy.com?
lgezybuy.com made around Rs 20 crore last year and this year we are looking at a five-fold growth. We are targeting Rs 100 crore. There is a lot of action happening on the e-commerce side. It’s very easy to just use a card and buy the products on the Net. This is really prevalent among the NRIs as there is a lot of gifting that takes place, especially from the US and the Gulf countries. Keeping this mind, we are projecting a growth of five times this year.
Q. Are you continuing with your strategy of targeting the B towns?
We are spreading even further. We are the only company that has 50 branches in he country. For instance, in Uttar Pradesh our competitors may have two branches, we have five branches—Lucknow, Varanasi, Dehradun, Ghaziabad and Agra. In Punjab, everybody operates with one branch. We have Chandigarh, Ludhiana, Jalandhar, Batinda and Jammu. If you go down to Tamil Nadu, everybody operates from just Chennai; we operate from Trichi, Coimbatore, Madurai and Chennai. So what it means is that you invest on infrastructure in all these branches and we have a branch manager and logistics team that interact with the customer, in turn penetrating the brand further. We will sustain more in the B and C class cities because we have a dedicated team working there. This investment has really proved beneficial for the customers, and for us it has been easier to grow in these markets.