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LG reworks strategy for microwave ovens market

LG reworks strategy for microwave ovens market

Author | exchange4media News Service | Tuesday, Sep 14,2004 8:25 AM

LG reworks strategy for microwave ovens market

Mothers in Bangalore buy them to sterilise feeding bottles for babies. Punjabi families want the gadget for their tandoori chicken. Families in upmarket colonies just have to buy one or no maid will work for them. Microwave ovens are finding some pretty interesting uses in India these days, apart from being used for actual cooking instead of mere reheating devices.

LG, the diversified South Korean major that claims to be the market leader, is betting its sales growth on a strategy that highlights the functionality of its microwaves. At the same time, it is lowering the entry-price barrier. Product group head for microwaves and vacuum cleaners Pushp Saurabh Baishakhia says that LG’s campaign will dwell on the theme “imagine the possibilities.” The aim: to expand the market without limiting use.

“We sell over a 100 units a month in Bangalore just to young working mothers who find microwaves a fast and convenient way to sterilise feeding bottles,” he adds.

Mr Baishakhia was in Kolkata on an important mission: an appointment with a doctor who has apparently figured out a way to make puris in microwaves without using a sea of oil.

That brings him to LG’s strategy of using cookery classes conducted by no-nonsense chefs to lure new customers as well as give first-time buyers tips on using microwaves for proper cooking.

“We are into wife marketing” says Mr Baishakhia pointing out that “wife” in this case is an acronym—‘‘W” is for word-of-mouth, “I” for in-shop marketing, “F” for good-old “feet marketing” and “E” for experiential or the cookery classes part.

Mr Baishakhia says he is on track for unit sales of 1,75,000 in the current calendar year, against around 1,00,000 in 2003 and around 55,000 the previous year. While highlighting the functionality of microwaves, LG is also launching feature-based models. “We launched a grill microwave last year. There’s even one model with a built-in toaster,” he adds.

The focus is on driving down prices. “Against prices of Rs 12,000-Rs 14,000 a year ago, we have an entry-level model for Rs 5,990,” he says.

Mr Baishakhia, an electronics engineer with a marketing tag, says there are mainly three types of microwave ovens. First is the solo or basic, which uses only microwave technology. This serves for reheating and “cooking” in the true sense. But no “browning” or crisping—so tandoori chicken would look white even after cooking.

Then comes the model with the grill function, to give food a “cooked” look. Starting price: Rs 6,990. The convection model, priced at nearly Rs 15,000, has a fan that circulates the heat evenly. This one is for baking and crisping. “We have reduced the price of this model to around Rs 10,000,” Mr Baishakhi says.

“Globally, you find microwave ovens selling for Rs 2,000 to Rs 3,000, and we are aiming for this entry level,” he says. The main issue here is the big impact of various taxes on the final price. Levies ranging from customs duty (on the magnetron) to sales tax, excise and now the cess account for nearly 40-50 per cent of maximum retail price.

Mr Baishakhia cited ORG-GFK retail figures to claim a market share of 44.2 per cent for LG. The number 2 in the market, Samsung has 25.8 per cent while Kenstar comes a distant third with 9.6 per cent.

Tags: e4m

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