To ensure that consumers upgrade to higher end durables at a faster pace, market leader LG Electronics is launching an initiative soon.
Titled LG First, the company will announce a buyback offer of existing durables products from households. After evaluating the value of the pre-owned product, the company will issue a coupon that can be redeemed on any of LG’s products.
The company hopes that the initiative will develop brand loyalty and induce consumers in upgrading to high-end products, thus increasing market share.
Sandeep Tiwari, head marketing, told Business Standard, “In future the durable and electronics market would be driven by innovative products like LCDs, plasmas, split airconditoners and frost free refrigerators. According to our survey, almost 10 per cent people owning electronic goods are reluctant to change old products. The company has created a channel to instigate the customers to upgrade immediately and move up the value chain.”
Apart from attracting new customers, LG is also eyeing the professionals who migrate or are transferred from one city to another. The company is optimistic that the brand loyalty programme would help in boosting the company’s market share.
“ On an average LG enjoys about 30 per cent market share across all product categories. This programme will help in boosting the sales of high end products and also retain the customers who might upgrade in next 3-4 years,” said Tiwari. He further mentioned that the LG First would leverage the company in establishing brand loyalty and bonding with the customers.
Under the programme the customers would have to contact the LG First call centre when they wish to upgrade the products.
The company has tied up with preferred dealers and offered additional incentives like warranty extension and discount on annual maintenance contract to lure the non-LG customers. Initially the company intends to implement the programme in the NCR region and gradually roll out in top ten cities by October 2007.
In 2007, LG Electronics, 100 per cent subsidiary of South Korea’s LG Electronics, is eyeing 15 per cent sales growth in India. In 2006 the company reported 10 per cent increase in sales at Rs 8,250 crore.