Product Market Strategy Of Lg

PRODUCT MARKET STRATEGY

PREPARED BYSHRUTI SRIVASTAVA 139 BHAWANA MALLIK 154 BYAPTI BIRLIPTA 165 ANSULA MOHANTY 180

LG : OVERVIEW üThe LG Group : South Korea’s third largest conglomerate. üProduces electronics ,chemicals, and telecommunications products üOperates subsidiaries like LG Electronics, LG Telecom, Zenith Electronics and LG Chem in over 80 countries üLG Group sponsors the LG Cup Baduk Tournament.

WHY A PRODUCT STRATEGY ? üWhere are we headed? To lead consumer durables space .(Aspirational) üHow we will get there? The core strategy Customer target (premium customers) Competitive targets ( IT and PC’s, GSM) üWhat we will do? How to implement the core strategy?

BRAND LG üMay 1997 – Nationwide launch-22,300 crore business -2008

ü üTop line growth-50 cr – Rs 9500 cr in 2007.

ü üLeader in CE (11600 Cr.)and HA(10700 Cr)

ü üTo be an “aspirational brand”

NEED OF STRATEGY üInternal coordination üOptimize resource utilization üTo take on with competitors

SENSIBLE STRATEGY üWhat competitor cannot do. üCompetitor will choose not to do. üWill be at a disadvantage if they do it.

ELEMENTS OF A PRODUCT STRATEGY A statement of the objective's the product should attain. Selection of strategic alternatives Selection of target customers Statement of the core strategy Description of supporting marketing mix. Description of supporting functional programs

SETTING OBJECTIVES 

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Corporate Objectives

Corporate Strategies(premium and reliable customers) Divisional Objectives

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Divisional Strategies 

Brand Objective

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Brand Strategies Program

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Tactics

CORPORATE &DIVISIONAL OBJECTIVES To grow annually by 20% for 3 years Contribution to 10% from 4% 8% rev. target from GSM-2008 18% rev. target from IT &PC -2008 

5 million handsets –GSM 12 million handsets- CDMA 5% of PC market of 60 million mkt.- 2% 

BRAND OBJECTIVE To attain technology leadership 

MASS MARKETER IMAGE

PREMIUM/ASPIRATIONAL STATUS

CORPORATE STRATEGIES Premium and reliable customers. 380 cr. ad spends 120 cr R&D spend (5% of revenue on ad.) Support CSR

Divisional Objectives Rs 17000 cr sales in 2008 from GSM,PC, & IT

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Brand Objective Rand identity house. By separating mktg. from sales, concentrating on brand.

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SELECTION OF STRATEGIC ALTERNATIVES Long term profits

Growth in sales/mkt share

Mkt development New segments Convert non users

Efficiency short run profits

Mkt penetration

Existing customers

Competitors’s customers

SELECTION OF STRATEGIC ALTERNATIVES

New segments- Blue Ocean strategy

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Existing customers Analysis Competitors customers 

Need Gap

EFFICIENCY IN THE SHORT RUN/ PROFITS Decrease inputs

Reduce costs mix

Increase outputs

Improve asset utilization

Increase price

Improve sales

INCREASING SALES/MARKET SHARE 

Market Development Strategies Aimed at non customers Develop segments previously ignored.

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Market Penetration Strategies Increase the usage rate of the existing customers, ( larger pack size) Attract competitor’s customers

INCREASING PROFITABILITY 

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Decreasing Input Cost Reduction Improve asset utilization

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Increasing the Outputs Increase prices Improve the sales mix

SELECTION OF THE TARGET CUSTOMER § Choice of target customer § Choice of competition target § Positioning takes into account - The core strategy

POSITONING THE CORE STRATEGY

Cost /price strategy 

Non price strategy

COST/PRICE DIFFERENTIAL ADVANTAGE Very successful strategy in India. Not all companies can offer this strategy High volume may help achieve the strategy. More investment in facilities. Reduce overheads. Product manager has to work with supplies. Involves risks: Competitor may copy the technology, changing tastes, size of the price sensitive segment.

NON PRICE STRATEGY Attempt is made to create added value in the minds of the customer that helps marketer to charge higher price. Core product Basic product Expected product Augmented product change? Potential product

Where can you create

FIVE AREAS OF DIFFERENTIATION •Quality • Status and image • Branding • Convenience • Distribution Channels

ASSOCIATED MARKETING MIX & OTHER FUNCTIONAL PROGRAMS All the other P’s have to be planned accordingly Coordination will be required by other departments 

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