Before the liberalization of the Indian economy, only a few companies like Kelvinator, Godrej, Alwyn, and Voltas were the major players in the consumer durables market, accounting for no less than 90% of the market. Then, after the liberalization, foreign players like LG, Sony, Samsung, Whirlpool, Daewoo, and Aiwa came into the picture. Today, these players control the major share of the consumer durables market.
Consumer durables market is expected to grow at 10-15% in 2007-2008. It is growing very fast because of rise in living standards, easy access to consumer finance, and wide range of choice, as many foreign players are entering in the market With the increase in income levels, easy availability of finance, increase in consumer awareness, and introduction of new models, the demand for consumer durables has increased significantly. Products like washing machines, air conditioners, microwave ovens, color televisions (CTVs) are no longer considered luxury items.
However, there are still very few players in categories like vacuum cleaners, and dishwashers Consumer durables sector is characterized by the emergence of MNCs, exchange offers, discounts, and intense competition. The market share of MNCs in consumer durables sector is 65%. MNC's major target is the growing middle class of India . MNCs offer superior technology to the Consumers whereas the Indian companies compete on the basis of firm grasp of the local market, their well-acknowledged brands, and hold over wide distribution network. However, the penetration level of the consumer durables is still low in India .
The LG Group was a merger of two Korean companies, Lucky and Gold Star, from which the abbreviation of LG was derived. The current "Life's good" slogan is a backronym. Before the corporate Name change to LG, household products were sold under the Brand name of Lucky, while electronic products were sold under the brand name of Gold Star. The Gold Star brand is still perceived as a discount brand. In 1995, Gold Star was renamed LG Electronics, and acquired Zenith Electronics of the United States
Distribution and Marketing
The company has number of dealers and warehouses. They have LG exclusive shops. For the marketing of the products a number of activities are followed:
1. Exhibitions are conducted from time to time.
2. Society and college activities are conducted.
3. Hoarding, Posters, banners are used so as to grab the attention of the costumers.
4. Day to day advertisement in leading newspaper.
5. Discount at festival time.
6. For dealer relationship they arrange dealer meeting at several time in the year
7. LG divide dealer in gold silver etc. category to know the performance of the dealers.
8. They have their sales persons at various sub dealer store and at mordent trade store for particularly for the promotion of the LG product.
9. LG also uses the radio FM for the promotion activities.
10.Also provide capon and scratch card for festive season Logistics is the art and science of managing and controlling the flow of goods, energy, information, and other resources like products, services, and people, from the source of production to the marketplace. It is difficult to accomplish any marketing or manufacturing without logistical support. It involves the integration of information, transportation, inventory, warehousing, material handling, and packaging. The operating responsibility of logistics is the geographical repositioning of raw materials, work in process, and finished inventories where required at the lowest cost possible.
Logistics Management is that part of the supply chain, which plans, implements and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers' requirements.
5R's of Logistic followed by LG:
1. Right Time
2. Right Place
3. Right Condition
4. Right Cost
5. Right Handling
LG also had a big problem of after sale service in India . During the project we also came to know that after sale service becomes the big issue in the region. Customers as well as dealer were facing the problem of after sales service. Because of this problem many dealer in the region were not ready to sell LG product. So it becomes the big issue. But LG has taken some solid steps towards improving customer's perception and experience of after sales service. Because it very important in competitive market to provide the best service. L G Electronics has signed a memorandum of understanding with 23 Industrial Training Institutes to strengthen its after sales service in India .
The company aims to recruit 10,000 people by the end of this year as a part of its branding strategy to focus on service and move away from discounting. L G Electronics has identified eight states with high after sales service call rates to ink the deals with the ITI. Y V Verma, director HR and management system, LG Electronics said, "The Company was trying to find a solution for effective after sales service since last two years. There is a huge need of trained manpower for the after sales service to align with the company's expansion and focus on the GSM mobiles and the personal computer segments."
1. In the initial phase the company has entered into agreements with ITIs in the states like Maharashtra, Gujarat, Delhi , Punjab , Assam , and Karnataka and is in the last leg of signing with Uttar Pradesh.
2. L G Electronics, with 1200 service centers, has already recruited 300 students and plans to beef up the number to 10,000 by the year-end.
3. "The company has offered a scholarship to the selected students for the last six months of their training program,"
4. The company will invest Rs 8 crore (Rs 80 million) in employee development program this year with an aim to attain a 8 per cent attrition rate.
5. The company moved away from the discounting strategy since last year and is putting thrust on the quality and service in its brand communication to position LG as a premium consumer electronics brand.
6. At the top, the Service Division in Korea reports to the Global CMO. (as mentioned in Dermot's public interview in ET on Wednesday). This shows commitment that Service must be made into a marketing differentiator, and leveraged thus.
7. LG has the widest service network across the country; some estimates put it at a significant multiple of service-infrastructure from our nearest competitor. While the sale size may also be a nice multiple from nearest, it shows the company is ready to put our money where our mouth is.
8. The company has introduced a 211 service - once you register your complaint, we will call you back in 2 hours (hence 2), set up an appointment for the next convenient day for you (hence the first 1), and show up in the promised 1-hour slot (hence the second 1). If the next convenient day for you is the next day, that's great too. It's a disruptive action in an industry (including LG) having traditionally shied away from its service responsibilities, and thus not leveraging any mileage from it.
9. The company is promoting 211 through ATL, probably the first time after sales service is being communicated in this fashion by any product company. You may have seen the TV commercial or heard the radio advert or seen the newspaper ad or in-shop posters, both of which revolve around prompt response.