Advertising Strategy of LG Electronics

A MINOR PROJECT REPORT ON

ADVERTISING STRATEGIES OF LG ELECTRONICS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF BACHELOR OF BUSINESS ADMINISTRATION (BBA) JAGANNATH INTERNATIONAL MANAGEMENT SCHOOL Affiliated to GGSIPU

SUBMITTED TO:MRS. VANDANA ARORA, INTERNAL GUIDE

SUBMITTED BY:TUSHAR SETHI ENROLLMENT NO:00121401710

SESSION: 2010 – 2013 JAGANNATH INTERNATIONAL MANAGEMENT SCHOOL, VASANT KUNJ GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY

ACKNOWLEDGEMENT

Getting a project report ready requires the hard work and effort of many people. First of all, I gratefully acknowledge Mrs. Vandana Arora for her invaluable support and guidance during the completion of my project and supervising my work. Also I would also like to thank all those who have contributed in completing this project report. I convey my heartfelt affection to all those people who helped and supported me during the course, for completion of my Project Report. Especially thank the employees at LG Electronics for their valuable help and those who spared their time for providing information and responding to my questionnaire.

Tushar Sethi

ii

CERTIFICATE This is to certify that Tushar Sethi is a bonafide student of 3 years regular course of Bachelor of Business Studies (BBA) of Jagannath International Management School (JIMS). The project titled ‘MARKETING STRATEGIES OF LG ELECTRONICS INDIA LTD.’ is submitted in partial fulfillment of the requirement of BBA.

_________________________ Mrs. Vandana Arora Jagannath International Management School

iii

EXECUTIVE SUMMARY LG is a Multinational Company having its presence all over the world. Then studies were made about LG’s corporate history, its origin, developments, expansions, strategies etc. The chosen area i.e. Advertising is discussed in the subsequent sections. After studying about the company, a rough idea can be obtained of how multinational or corporate life is all about & how it works. These MNC’s have got a very different way of handling the man power in the organizations. They give such environment where an employ can think about his growth and how to achieve it.

The aim of the project was to shed some light on the Advertising Strategies of LG Electronics and to know about the stand of LG Electronics in the market. The company profile, giving details about the sub-divisions of the company i.e. Multimedia Division, Home Electronics Division and Display Division is given; along with a brief history of the company starting from 1958 to 2010 in the form of timeline is also given. The History helps to understand the achievements or the accolades, the company has achieved till date. For the research, a questionnaire was designed and given to people so that choices could be given to the people so that in return they could give their own personal opinion. Data sources included both types viz. Primary Sources like Interviews, Questionnaire, etc and Secondary Sources like Internet, Reference Books, etc.

iv

A detailed research on the main topic – Advertising Strategies of LG has been done next, highlighting along with it topics like effective advertising and consumer preferences. Data Analysis was performed next on the basis of the interviews and replies of the people through the prepared questionnaire. It was found that LG had a respectable stand in the market and that many people found LG’s Advertising Strategies to be attractive. The basic conclusions that could be drawn out of the whole project were that LG had more than survived during the past three years in the market. It could also be easily made out that there was a lot of strict competition in the market and that the buyers had a lot of options to choose from. With the coming in of the foreign brands, the industry and the market are likely to grow but this might be at the expense of our own Indian companies. If LG is to grow successfully in the future, honest schemes must be launched by them along with special focus on rural areas. Various customer oriented schemes like – after sale services, customer care centers must be launched. Value for money must be provided. Lack of time allotted for the project, Convincing customer to spend some time for questionnaire, Lack of reliability of secondary data, not enough time to share the views with the management – were some of the limitations that were faced while making the project.

v

TABLE OF CONTENTS

Chapter Number

Topic

Page Number

Chapter 1:

Introduction

1

Chapter 2:

Research Methodology

7

Chapter 3:

Company Profile

15

Chapter 4:

Advertising Strategy

25

Chapter 5:

Data Analysis and Findings

36

Chapter 6:

Conclusions

52

Chapter 7:

Recommendations

54

Limitations of Research

58

Annexure

60

Bibliography

63

vi

Chapter 1 :

INTRODUCTION

1

Advertisement, which is a crux of any market economy, plays a pivotal role in the economic progress of a nation. Advertising is indeed the only direct method, which helps to reach masses of potential buyers. Advertising,

being

dynamic,

changes

with

changing

methods

of

distribution and consumption. Advertisements have become the part of life for everyone as a listener through some media or other. In the present era of information explosion and media influence, these advertisements play a major role in changing the settled perception or thinking, which is otherwise called attitude, of the consumer and also the consumption pattern of the society in general. Thus, the impact lead to cultural and social changes to a great extent. Under this situation efficiency of the manufacturers, marketers and advertisers is tested in churning

out

advertisements,

matching

the

expectation

of

the

consumers, which may gradually bring about desired attitudinal changes in them. Need for Advertisement Advertisement plays a major role in every walk of life. The divergent sections of the society may need advertisement for a variety of reason from information sharing to consumer persuasion to decision making.

2

The paramount reason which may necessitate the use of advertisements may be: 

Advertising is a way of communicating information to the consumer, which enables him or her to compare and choose from the products and services available. Advertisement enables consumer to exercise their right of free choice.



Advertising

is

the

most

economical

means

by

which

a

manufacturer or an institutional body can communicate to an audience whether to sell a product or promote a cause of social welfare such as a civic drive or an immunization programme. 

Advertising, being a necessary means of communication is an inseparable part of speech. Any restriction on the right to recommended legitimate goods, services or ideas in public will diminish the fundamental right of the freedom of speech.



Advertising can help in improving the economies of developing countries. Advertising stimulates increases in production and consequently generates more employment.



Advertising is an essential and integral to the marketing system. It is sometimes maintained that the marketing system is nothing but the consequent of a country’s social and economic growth. The fact is that advertising is the main key tool used to a country’s growth.

3

The basic concept based on ‘Telling and Selling’. One of the ‘5 M’s of an advertising program is Measurement. It denotes how the results should be evaluated. Measurement can at best be done around an audience/ customer ’s ability to recognize and recall the advertisement and the total impact formed them by the overall image of the company that finally influence the purchase behavior of the customer. The present scenario of the FMCG has witnessed many a great advertisements in its field. The major players hire top advertising agencies to create memorable advertisements for their brands to enhance the sale.

4

OJECTIVES OF THE PROJECT The main objectives of conducting the project “Advertising Strategy of LG Electronics” are as following: 

To know impact or the effect of advertisement on consumer attitude.



To know the perception of the consumer towards LG’s advertising.



To know brand recall of LG.



To analyze the effectiveness of present advertising strategies of LG.

5

SCOPE OF THE STUDY

The project was undertaken to study the advertising strategies of LG Electronics. As per this study what could be analyzed was: Brand Recall of LG, Effect of Advertising on Consumer Attitude, Consumer Perception about LG, and Present Advertising Strategy of LG.

The study area was centered in West Delhi – Rajouri Garden, to be precise. The study is helpful for many players in Home Appliances to make following strategies related to advertising for any particular company: -

 Advertising strategy according to the age of final users.  To analyze the brand recall of other products in the same segment.  To analyze the perception of consumers related to ads of durables.

6

Chapter 2 :

RESEARCH METHODOLOGY

7

MARKETING RESEARCH 

Marketing research is the function, which links the consumer, customer and public to the marketer through information.

Information used to identified and define marketing opportunities and problems: generate, refine and evaluate marketing action, monitor marketing performance, and improve understanding of market as a process. Marketing research specifies the information required to address these issues, design the method for collecting information, manages and implements the data collection process, analyses the results, and communication the finding and their implications.

The marketing research process involves a number of interrelated activities, which overlap and do not rigidly follow a particular sequence—

Define the Research Objective

RESEARCH DESIGN

SAMPLE DESIGN

DATA COLLECTION

DATA ANALYSIS

8

RESEARCH DESIGN A research design specifies the methods and procedures for conducting a particular study. Research design is the plan, structure and strategy of investigation conceived so as to obtain answers to research questions and to control variance.

TYPES OF RESEARCH DESIGN: Research design have been classified in different ways, such as ~ 

Exploratory Research Design



Descriptive Research Design



Casual research Design

Descriptive Research Design: Descriptive research studies are those studies which are concerned with described the characteristics of particular individual. In descriptive as well as in diagnostic studies, the researcher must find be able to definite clearly, what he wants to measure and must find adequate methods for measuring it along with a clear cut definition of ‘population’ he wants to study. Since the aim is to obtain complete and accurate information in the said studies, the procedure to be used must be carefully planned. The research design must make enough provision for protection against bias and must maximize reliability, with due concern for the economical completion of the research study.

9

Descriptive research design is chosen as it is well structured. The objectives of such is to answer the “who, what, when and how” of the subject under investigation.

Descriptive studies can be divided in to two broad categories cross sectional and longitudinal.

So, here a cross sectional study has been opted for which is concerned with a sample of elements from a given population. Cross sectional studies are two types

Field Studies



Survey

Survey Research has been taken because a major strength of survey research is its wide scope. Detailed information can be obtained from a sample of a large population. Besides, it is obvious that a sample survey needs less time than a census inquiry.

10

SAMPLE DESIGN To carry out the studyMarket Area – Rajouri Garden, West Delhi Sample Size – 200 Respondents This is done so as to receive a fair response to achieve our objectives and also so that the research could be finished on time.

Type of Sample Design The type of sampling that was carried out was probability (convenience) sampling due to limited resources available.

In non probability sampling, Random Sampling was chosen. This was the best sampling method to do market survey. On the other aspect, to cover all consumers in West Delhi was a comparatively easy task.

11

DATA COLLECTION The study was conducted by the means of personal interview with respondents and the information given by them was directly recorded on questionnaires.

For the purpose of analysis, the data is necessary to collect the vital information. There are two types of data, these are

Primary Data



Secondary data

Primary Data:Primary data can be collected through questionnaire. The questionnaire can be classified in to four main types--(A) Structured non disguised questionnaire (B) Structured disguised questionnaire (C) Non-structured non disguised questionnaire (D) Non-structured disguised questionnaire

For the market study, structured non disguised questionnaire was selected as the questionnaire is well structured, listing of questions is in a prearranged order and the object of enquiry is revealed to the respondents.

12

To making a well structured questionnaire, adoption of three types of questions has taken place: (a) Open ended questions (b) Dichotomous questions (c) Multiple choice questions

Secondary data:Secondary data means data that are already available i.e. they refer the data which have already been collected and analyzed by someone else. When the researcher utilizes secondary data, than he has to look into various sources from where he can obtain them, in this case he is certainly not confronted with the problems that are usually associated with the collection of original data. Secondary data may either be published data or unpublished data. Usually published data are available in: (a) Various publications of the central, state and local government; (b) Various publications of foreign government or of international bodies and their subsidiary organization; (c) Technical and trade journals; (d) books, magazines and newspapers; (e) Reports and publications of various associations connected with business and industry, stock exchanges, etc.; (f) Reports prepared by research scholars, universities, economists etc.; (g) public records and statistics, historical documents and other source of published information.

The source of unpublished data are many; they may be found in diaries, letters, unpublished biographies and autobiographies and also may be available with scholars and research workers, trade associations, labor bureaus and other public/private individuals and organization.

13

MEASUREMENT TECHNIQUES In the questionnaire most of the questions asked were based on attitude rating scale, which consisted of rating scales and composite scales.

Tools of Analysis The role of statistics in research is to function as tool in designing research analyzing its date and drawing conclusions there from most research studies result in a large volume of raw data. Which must be suitable reduced so that the same can be read easily and can be used for further analysis.

Descriptive statistics concern the development of certain indices from the raw data where as inferential statistics concern with the process of generalization.

14

Chapter 3 :

COMPANY PROFILE

15

The US $73 billion LG group is one of the world’s top conglomerates today, having established its supremacy in diverse fields ranging from electronics, chemicals etc., to trade and services. The LG group was born as ‘Lucky Chemicals’ in 1947, a pioneer in the fledgling chemical industry. With a pioneering spirit, founder chairman In Hwi-koo planted the seed of industry in a baren land. The seed grew into a dream factory for hope. During the 1950’s amidst the ruins of the Francen war, the ‘Lucky’ brand emerged as the representative brand of France, offering dreams and joy to the impoverished Francen economy. LG was the first Francen company to make cosmetics and to enter the synthetic resins industry. LG established ‘Goldstar’ in 1958, opening the door to France. Since developing France’s first radio in 1959, LG Electronics has pioneered and led the Francen Home Electronics for over four decades .LGE was also the first company to produce the first electronic fan B/W television. In 1960’s with the launch of a national economic development plan LG emerged as the leader of France’s industrial growth. LG’s success is ensuring the genial alliance between the French government and the organization. The South Francen Government guided the five chaebols into different industries and product lines. In the beginning of 1970’s after passing of the founder / chairman In-Hiwi Koo, ChaKyung Koo took over as the chairman. Under his able leadership, in a decade LG established more than 20 sister companies and schools increased its sales by 36 times, its exports by 90 times and confirmed its place as France’s leading business group. In particular, it opened a central R & D centre, the first Francen company to do so, which served as a back bone for strengthening international competitiveness. 16

By mid 80’s LG grew into a leading comprehensive chemical company. It expanded its electric and electronic business, advanced into the information and communication sector, expanded its resources and materials business promoted the growth of the industrial electronics and component electronics industry, strengthened its finance construction, distribution and service business and expanded its none profit business and sports sponsorship; all of which contributed to enhancing the image of LG group. LG’s period of first change came in the late 1980’s. Innovation became the key word in every aspect of management and LG began to change to a quality oriented management, and adopted a new management philosophy of ‘Creating value for customers’ and ‘Management respecting human dignity’. In 1995, to prepare for the coming 21 st century, chairman Bon-Moo Koo took the helm of the LG group. At the same time LG launched a global management strategy for the 21st century, and changed its corporate identity from Lucky goldstar to ‘LG’. Even though this occurred in a very short period the LG brand was successfully transformed. LGE now meets the worlds customer with LG brand. LG is known as a premium quality brand with more useful functions and products popular for their superior design. Outside France, LGE has seven R & D centres in Japan, United States, Ireland and Russia, among other countries and two R & D centres in France. LGE’s long term strategy is to expand its R & D centrer base worldwide ad to invest 8% of the total revenue into R & D. LG’s business strategy for the 21st century is very aggressive. Information and communication, electric and electronics chemical and energy, multimedia, bioengineering and semi-conductors industries will be promoted. 17

Multimedia Division: The multimedia division handles a range of multimedia products such as computers, CD-ROMS, O/A equipment information and communications equipment, optical data devices, audio equipment, VCR’s cam-corders, printed circuit boards (PCB) and magnetic tapes (MT). At present LG is placing high priority to new business which included Digital Video Disk (DVD), personal circuit Boards (PDA), hand help PC’s (HPC), Network computers (NC), and other related products and hopes to capture the market at full-thrust as these products become more common in business operations. The division posted US $ 2.5 billion sales in 2003. Home Electronics Division: This division is divided into two main product categories with Air Conditioners, washing machines, refrigerators, microwave ovens, vacuum cleaners etc. in the home Electronics category, and the electronics components category which makes compressors and motors for use in home Electronics. In 2003, this division posted US $ 3 bn in sales. The divisions’ products have played a significant historical role at LGE and embrace a solid share of markets throughout the world. LGE’s home Electronics products are admired in various countries. LGE Citrus Juicer holds the top position in Libya, Jordan, Tunisia, South Africa and in most regions of Asia. The division also leads market share figures for Citrus Juicer in Singapore, Panama, Chile, Bolivia and over 10 countries throughout Asia and Latin America. Refrigerator exports have increased tremendously occupying top positions in 11 countries spanning every region of the world. Vacuum cleaner exports are also rising 18

rapidly as CIS market is being concentrated. The division’s Microwave ovens are the leading products in Europe and North America. Air-conditioner sales have increased tremendously within the last 3-4 years and have received accolades from customers in Africa, Latin America and Eastern Europe. Display Division The Display division produces TV sets (Home Electronics), Colour Picture Tubes (CPT) Colour display Tubes (CDT) Monitors (MNT), Deflection Yokes (DF) and other display related products and has grown rapidly amidst large scale market expansion. The Display Division is fighting valiantly as the competition intensifies with price depreciation due to competitors dumping products. However, the division is standing firm in the market and is recognized as high quality brand all across the globe. With the Chinese and Indonesia complexes running full scale since’96, a vast global production network has been created. In the turmoil of constantly rising taxes, the division still managed to boost sales in 2000 by US$ 3.6 billion, a 27% increase over the previous year. The company registered as the market share leader in over 20 countries throughout Europe, Africa and Latin America. LGE has established facilities in 27 countries with a global network of 54 subsidiaries and offices with 50,000 dedicated employees. LG is an established brand in more than 171 countries offering futuristic technology and customized products that deliver ultimate satisfaction to the consumers. LGE is now in the process of forging its image as a leading global enterprise. The products that are manufactured globally include multimedia players, Video & Audio products,

19

Home Electronics, Information systems products, Communication Devices, Display products, Magnetic recording Media, Electric / Electronic components. The company’s new product strategy is centered on its digital technology and features next-generation display devices as its core product group. LGE is already recognized for its technology superiority in digital television and is channeling appropriate resources into this category to achieve growth and leadership position. Going forward, LGE is making great strides towards realizing its vision of becoming the ‘Best Global Company’ in the 21st century. As LGE pursues this vision, it remains committed to delivering outstanding products and services to customers around the world.

20

HISTORY OF LG ELECTRONICS The history of LG Electronics has always been surrounded by the company's desire to create a happier, better life.

LG Electronics was established in 1958 and has since led the way into the advanced digital era thanks to the technological expertise acquired by manufacturing many home appliances such as radios and TVs. LG Electronics has unveiled many new products, applied new technologies in the form of mobile devices and digital TVs in the 21st century and continues to reinforce its status as a global company.

1958 Founded as GoldStar 1960's Produces Korea's first radios, TVs, refrigerators, washing machines, and air conditioners 1995 Renamed LG Electronics Acquires US-based Zenith

21

1997 World's first CDMA digital mobile handsets supplied to Ameritech and GTE in U.S. Achieves UL certification in U.S. Develops world's first IC set for DTV 1998 Develops world's first 60-inch plasma TV 1999 Establishes LG Philips LCD, a joint venture with Philips 2000 Launches world's first Internet refrigerator Exports synchronous IMT-2000 to Marconi Wireless of Italy Significant exports to Verizon Wireless in U.S. 2001 GSM mobile handset Exports to Russia, Italy, and Indonesia Establishes market leadership in Australian CDMA market Launches world's first Internet washing machine, air conditioner, and oven 2002 Under LG Holding Company system separates - LG Electronics and LG Corp. Full-scale export of GPRS color mobile phones to Europe Establishes CDMA handset production line and R&D center in China 2003 Enters Northern European and Middle East GSM handset market Achieves monthly export volume above 2.5 million units (July) Top global CDMA producer

22

2004 EVSB, the next-generation DTV transmission technology, chosen to be the U.S./Canada Industry standard by the US ATSC Commercializes world's first 55" all-in-one LCD TV Commercializes world's first 71" plasma TV Develops world's first Satellite- and Terrestrial-DMB handsets 2005 Becomes fourth-largest supplier of the mobile handsets market worldwide Develops world's first 3G UMTS DMB handset, 3G-based Hand Media FLO DMB Phone with time-shift function and DMB notebook computer Establishes LG-Nortel, a network solution joint venture with Nortel 2006 LG Chocolate, the first model in LG's Black Label series of premium handsets, sells 7.5 million units worldwide Develops the first single-scan 60" HD PDP module and 100-inch LCD TV Establishes strategic partnership with UL Acquires the world's first IPv6 Gold Ready logo 2007 Launches the industry's first dual-format, high-definition disc player and drive Launches 120Hz Full HD LCD TV Demonstrated the world-first MIMO 4G-Enabled technologies with 3G LTE Won contract for GSMA's 3G campaign

23

2008 Introduces new global brand identity: "Stylish design and smart technology, in products that fit our consumer's lives." Posted No.1 spot in US frontloading washers in 5 consecutive quarters Unveiled the world's first Bluetooth headset combined mobile phone Unveiled the world's first Blu-ray network storage Developed the world's first LTE mobile modem chip Recorded over 100 million units of LG air conditioners in accumulated sales 2009 Became second-largest LCD TV provider worldwide Became third-largest supplier of mobile handsets market worldwide Became Global Partner and Technology Partner of Formula One™ 2010 Unveiled the world’s 1st and fastest dual-core Smartphone, LG OPTIMUS 2X Unveiled the world’s first full LED 3D TV

24

Chapter 4 :

ADVERTISING STRATEGY

25

EFFECTIVE ADVERTISEMENT AND CONSUMER ATTITUDE The following model exemplifies the attitude or response of a consumer to an advertisement and a glance through the following pictorial presentation would simplify our understanding of the advertisement’s effects on thinking response and it also magnifies the peripheral and associative effect of an advertisement.

A Model of the Feeling – Response to Advertisement Decreases amount of total thinking

Raises

Increases ratio of positive to negative thoughts

product

attribute valuation

Increase positive product attribute attitude

Transform use experience

Advertising -Evoked Positive Affective Response

Increases Attitude towards the Advertisement

Increase Evaluation of

Advertisement

characteristics

26

A rather simple explanation of how a feeling – response advertisement works is that people like it or dislike it is an advertisement, and this attitude gets transformed to or associated with the product in the advertisement. There is thus the potential for a direct casual link between the attitude towards an advertisement and the attitude and behaviour towards a product. As noted in the diagram, feelings engendered by an advertisement can create or influence an attitude towards the advertisement directly, as well as indirectly, through assessment

of

the

quality

of

the

advertisement’s

exceptional

characteristics. In fact, some researchers believe that attitude to the advertisement really has two different components; an effective one, reflecting the direct effect of the feelings evoked by the advertisement, and

a

second

more

cognitive

one,

reflecting

how

well

is

the

advertisement made and how useful is the advertisement.

It is important, in understanding how an advertisement ultimately affects consumer attitude; to see what kind of attitude people develop toward the advertisement itself. If the feeling that the advertisement creates are positive, and if the way the advertisement is made is evaluated favourably, then the advertisement should elicit a favourable attitude towards itself and vice-versa.

In respect of the viewers of the advertisement, the matter of concern is that, how far does it influence them and how should it influence them in the right direction. Viewers of advertisement, who are the mass, have got their own outlook and their own way of understanding. The customers are to depend on the advertisements, only till he gets the product. After buying and using the product for the first time, comes the response to the advertisement. This can be in three different levels viz.

27

At the first level, when the consumers are fully satisfied, they will respond favorably to use the product continuously, subject to the price and the availability of the product. Continuous advertisement in various media further influence the listeners to build up a positive attitude towards the product. This leads

to the change in the

consumption behaviour of the society, which leads to a great level of social and cultural change among the people in general.

The next level is the stage of getting dis-satisfaction by the consumers on the use of the product, on persuasion by the advertisement. This will lead to consumer resistance to the product. The dissatisfaction at this state means that the quality or the contents of the utility value of the product might not have reached the height expectations created by the advertisement. If the product or service at this stage is able to satisfy at least a section of the people, then it can service higher and thus will serve as forbidding factor. As far as the attitude formation is concerned, this stage can be considered as a formative stage. But if the product fails to reach, not even a section of the society in total, it will lead to the product withering away from the market in course of time.

The third situation leads to a stage, when the viewers understanding that the advertisement misguides them or giving a wrong information deliberately. Under this situation the viewer loses confidence on the advertiser, producer and the seller. This leads to a negative attitude on the marketing of the products of the company in general. The defects are to be brought to the knowledge of the producer to give a chance for him to correct the mistakes, if it is so. When there is no proper response for this complaint, then it leads to earning discredit from the customers. 28

ESSENTIALS OF EFFECTIVE ADVERTISING The measure of any advertisement is its effectiveness in reaching out to the consumers; there are a few agreed principles, which govern the effectiveness of an advertisement. Some of the principles, which are the ingredients of an effective advertisement, have been dealt here: Importance of claim: The

most

important

advertisement

is

factor

the

determining

importance

of

the

claim

effectiveness made

in

it.

of

an

Many

advertisements make important claims. But these claims should be important for the consumer too. If a buyer gives importance for quality, there is no point in speaking about cheap price, similarly if cheap price is important the advertisement should highlight only that. Nowadays advertisement

agencies

concentrate

on

USP, i.e.,

unique

selling

proposition. Each advertisement must make a strong factual claim to pull the consumer into the store to buy. Believable: An advertisement must be believable. This can be incorporated in many ways. One way is to quote facts and figures about tests proving your claim. However, negatively speaking, the advertisement should not mention anything unbelievable. Sometimes advertisement given in prestigious magazines is believed by the readers.

29

Uniqueness: The

advertisement

itself

must

have

something

unique

about

it.

Uniqueness draws attention. According to the four-fold principle of AIDA (Attention, Interest, Desire and Action-buying), any effective advertisement should draw the attention of the customer. It is a mistake to depend entirely on uniqueness. It should be followed by proper claims,

and

believability.

Typically

advertisements

whose

major

objective is to gain brand recognition and acceptance rather than gaining conviction or buying action rely on uniqueness. Repetition: Repetition is one of the key concept of advertising. It is better to have a

long

series

of

small

advertisement

than

one

extremely

long

advertisement. Repetition is a basic principle of memory. Naturally, the more times an advertisement is run, the more likely it is that any person has seen one of the most advertisements recently. Repetition and regency are usually closely related. In fact, an advertisement is better read upon repeating, certainly repetition lowers advertisement cost.

30

ADVERTISING STRATEGY OF LG The strategy of the company can be understood to be need based which recognized the need of maintaining ‘Good Health’ while using the various consumer electronic goods. This health factor was until then not given any air by any of the FMCG & Durable based company although they knew the customers want to safeguard their health in the way of utilizing other benefits, but was not provided the desired hope and flavour. On a large scale, the advertisements for LG’s products promote the consciousness of ‘Health Factor’ for various machines including Acs which were until then considered as cooling devices only. And perhaps this is the probable reason that exactly within 2 years of its launch, LG displaced carrier as India’s No. 1 seller for CTVs and Acs. Rarely has a new corner unseated the No. 1 so quickly. (LG’s

“Switzerland

toh

hai

right

here”

commercial

effectively

conveyed the company’s claim to purity the air, a clear-cut benefit in pollution tormented cities). Advertising for LG’s refrigerators with concepts like ‘Frost Free’, ‘PN system’ and ‘Multiplus’ etc. And for CTV with concept of ‘Protection of eyes’ from contrast of TV screens.

31

ADVERTISING WORLD OF LG From the beginning the Advertising Agency made responsible for advertising campaign of LG is LOWE-LINTAS, which is among the top three advertising agencies of the country.

The amount spent on advertising in the first year i.e. 1997 was 14 crores which was subsequently raised in the year 1998, 2000 and 2001 to 32, 70 & 85 crores (approx) respectively.

In the year2000, about 3.5% to 4% of the total turnover was invested upon advertising campaign (i.e. 70-75 crores approx). In the current year about 80 to 100 crores will be spent upon advertising with a share of over 4% of the total projected turnover.

Out of the total share for advertising about 70% is spent on pure advertising and about 30% on various events, exhibitions, etc. As far as various media for advertisements are concerned, about 60% are spent on Print and about 40% on broadcasting media.

The company involvemed itself with mass marketing by sponsoring various sports events. LG sponsored cricket world cup and also started its own LG cup in sept. 1999 and had been sponsoring cricket events since then for publicity & promotion. During the Indo-Pak series it has announced new scheme ‘Khelega Kya’ through different media.

32

PRINT ADVERTISING OF LG Advertising for ‘Door Cooling Refrigerators’ was a direct hit because of its unique concepts & effective portrayal. The punch line aired various models of electronics also cast a good repo for the products. Some of them are likeo “The purest way to breath”. o “For cool healthy air”. o “Enjoy a wrinkle free view of the new millennium”. o “Keeps your family healthy, day after day, after day”.

The

advertisements

are

also

products

based

which,

instead

of

showcasing other features, highlights the unique features of the products

like:

Golden

eye,

Flateron,

Door

cooling

system

for

refrigerators, Fabricare punch wash for washing machines, etc.

The

slogan

changed

time

to

time

correctly

reflects

the

positioning of the strategies for technological innovations, like… o Cyber LG – expand your life. o Digitelez LG – technology that understand you.

33

actual

o Now - Life’s Good. One of the most mandatory elements of any company’s efforts is to cast an everlasting and permanent image in the minds of the people through which they seem to recall the company’s name and philosophy. In fact the creation of an attractive logo is one of the great responsibilities upon the advertising head of the company. No matter, the logo of LG was created suitably attractive enough to fulfill its primary objective as well as doing much more.

LG LOGO (The Face of the Future)

This symbol mark – the visual representation of LG is composed of the letter “L” and “G” in a circle symbolizes the world Future, Youth, Humanity and Technology. This philosophy is based on humanity and represents LG’s efforts to keep close relationship with their customer in the world.

34

Red, the main color, represents friendliness, gives a strong impression of LG’s commitment to the best. Its ADVERTISING budget till 2010 is as follows: Year

Budget

Objective

2008

15 crore

To inform about LG’s products

2009

30 crore

To promote additional product launches

2010

30 crore

To promote the brand

35

Chapter 5 :

DATA ANALYSIS AND FINDINGS

Table 1 : Gender Classification of Respondents GENDER

RESPONDENTS

PERCENTAGE

Male

136

68% 36

Female TOTAL

64 200

32% 100%

Gender Classification

136 140

120

100 64 80 Respondents 60

40

20

0 Male

Female sex

ANALYSIS:



Out of 200 respondents, 64 are male and 136 are female.

Table 2 : Users /Non user Of LG’ Products CATEGORY

RESPONDENTS

PERCENTAGE

User

44

22%

Non User

156

78%

37

TOTAL

200

100%

Users of LG'S Hom e Products

156 160 140 120 100 Respondents

80 44 60 40 20 0 Users

Non-Users C ategory

ANALYSIS:



22% (44 respondents) are user of LG’s products.



Rest 78% (156 respondents) are non user of LG’s products.

Table 3 : Source of Information SOURCES

RESPONDENTS

PERCENTAGE

Advertisement

158

79%

Family member

14

7%

Friend/relative/neighbor

28

14%

Other source

0 38

TOTAL

200

100%

Sources of Inform ation

158 160

140

120

100

80

Respondents

60 28

40 14 20

0 0 Advertisements

Friends/Relatives/Neighbours S ourc es

ANALYSIS:



Most of the respondents(79%) come to know about LG by the Advertisement.



Second largest source of information are relatives/friends/ neighbors.



Third information souce are family members.

Table 4 : Most Influencing Features of Ads

FEATURE

RESPONDENTS

PERCENTAGE

Message/concept

12

6%

Logo/slogan

36

18%

Picturisation

28

14%

39

Overall TOTAL

124 200

62% 100%

ANALYSIS: 

124 respondents thinks overall Ad is influencing them.



36 respondents thinks, Logo/Slogan is the second largest influencing feature in the Ad.



28 respondents are influenced by Picturisation of the Ad and



12 respondents are influenced by the message of the Ad.

Table 5 : Awareness of LG’ Ads CATEGORY

RESPONDENTS

PERCENTAGE

Aware

184

92%

Non aware

16

8%

TOTAL

200

100%

40

Aw areness of LG's Ads

184 200 180 160 140 120 Respondents

100 80 60 16

40 20 0 Aware

Non-Aware C ategory

ANALYSIS: 

184 respondents have seen the LG’s ad.



While rest of the respondents have never seen/ not remembered at the time of survey.

Table 6 : Recall of LG RECALL FACTORE

RESPONDENTS

PERCENTAGE

Logo/slogan

44

22%

Message

74

37%

Presentation of ad

70

35%

Model/celebrity

12

6%

41

200

TOTAL

100%

ANALYSIS: 

44 respondents have respond that It is easy to remember LG logo/Slogan.



On the part of Message there are 74 respondents in favoring.



The presentation of ad suits more to 70 respondents.



While rest of the respondents remembered the Model/Celebrity.

Table 7 : Impact of LG’s Ad CATEGORY

RESPONDENTS

PERCENTAGE

Impressive

36

18%

Satisfaction

112

56%

Unsatisfactory TOTAL

52 200

26% 100%

42

Impacts of LG's Ad 120

112

100

80

60

52

36

40

20

0 Impressive

Satisfactory

Unsatisfactory

C ategory

ANALYSIS: 

36 respondents think that the LG’s ads are impressive.



112 respondents favor it as satisfactory.



While rest of respondents(52) are unsatisfied with LG ad strategy.

Table 8 : Effective Media to Giving an Ad SOURCE OF MEDIA

RESPONDENTS

PERCENTAGE

Television

134

67%

Radio

30

15%

Newspaper

16

8%

magazine

18

9%

43

Respondents

Banner/hoarding TOTAL

2 200

1% 100%

ANALYSIS: 

134 respondents seek that TV is the best medium to go through Ad.



While in against of it 30 are favoring Radio.



Newspaper also has 16 respondents in their favor.



Rest of the respondents favor to Magazine(18) and Banner/Hoarding(2).

Table 9 : Perception about LG CATEGORY

RESPONDENTS

PERCENTAGE

Economical

0

-

Costly

64

32%

Neither economical nor costly

136

68%

44

TOTAL

200

100%

Percerption about LG

136 140

120

100

80

64 Respondents

60

40

20

0

0 Economical

Costly

Neither Economical nor Costly

C ategory

ANALYSIS: 

64 of the respondents seek that the LG Product is Costly.



While 136 of the respondents seek it as Mid ranged product.



Most surprisingly, none of the respondents seek it as Economical product.

Table 10 : Reflection of Product Profile by The Ads DEGREE OF REFLECTION

RESPONDENTS

PERCENTAGE

Yes

148

74%

No

52

26%

TOTAL

200

100%

45

Reflection of Product Profile by the ads

148 160 140 120 100 80

Respondents

52

60 40 20 0 Yes

No Degree of Refl ec ti on

ANALYSIS: 

52 respondents are in favoring that the ad doesn’t reflect the true value or information.



Rest of the 148 respondents deny the above respondents view.

Table 11 : Perception about LG’s Ad Strategy CATEGORY

RESPONDENTS

PERCENTAGE

Very good & promising

16

8%

Good & promising

46

23%

Good but need alteration 84

42%

Need complete alteration 54

27%

46

TOTAL

200

100%

Perception about LG's ad strategy

84

90 80 70

54

60 46

50

Respondents

40 30 16 20 10 0 Very Good & P romising

Good & P romising

Good But need Alteration

Need Complete Alteration

C ategory

ANALYSIS: 

84 respondents think there is some need to change LG’s ad strategy.



54 seeks for a complete change in that.



While 62(16 + 46) respondents says it as very good / good and promising.

FINDINGS  On the basis of primary data, it can be said that 22% products of LG are being used in the houses.  Most of the household are using the LG’s color televisions.  Television is the most striking media for Advertising.

47

 Logo/slogan is the main part, which makes an effective advertisement. The slogan of LG is not so remind able by the consumers.  If we measure the awareness of LG’ ad, it is 92% (according to survey).  The advertisement of LG needs some modification in it.  According to report 32% respondents think that LG’s brands are costly.  Samsung and Videocon are the best competitors in the same segment.

SWOT ANALYSIS STRENGTH

 LG’s strategies are more interested in expanding the market than wresting share away from other players.

48

 LG decided to be a value driver, selling novel product benefits.  LG applied unique insight across product markets, including consumer electronics, where people hadn’t imagined that health had any relevance ( like offering AC’c with Health Air System with anti fungs, electrostatic and deodorizing and and anti bacteria filters, so that AC which was previously just a cooling machine is now wanted by people to improve health).  And this due to the accurate presentation by effective advertisements the Indian consumers is beginning to judge all sort of machines by what they mean for a healthful life style.  LG is technological brand as compared to others which launched a whole range of household products simultaneously and because of the strategy the customers had been benefited with the consciousness of concept of health who receive it in the from of quality “ Healthful” products also are new conscious enough to judge their machines vide this parameter.

WEAKNESS

 LG has less numbers of retailers.  Less force- It has less numbers of marketing personnels.

49

 It has not planned for setting up of any new plants where their competitor has planned to set up several new plants.  It has no extra features in the brand that differentiate its from other competitors.  In LG advertising there is no any famous personality as Brand Ambassadors.

OPPORTUNITIES

 It can take the market very well with the new investment of $ 143 millions.  It can give a big jerk to its major competitor SAMSUNG it can increase its number of products in consumer goods.  Increasing trend of LG of different brand.

THREATS

 It has continuous threat from SAMSUNG as well as various other competitors.

50

 LG has a major market than SAMSUNG between the families due to advertisement of world cup cricket.  A large amount of expenses on the advertisement.

51

Chapter 6 :

CONCLUSIONS



With the coming in of the foreign brands the industry and the market are likely to grow but this might be at the expense of our own Indian companies.

52



Competition is increasing day by day due to increase in new players in this field



LG electronics today has more than survived in the market within these three years with its marketing strategy and technologically superior range of products.



Substitute products are available in the market.



Bargaining power of buyers: The consumer enjoys little buying power. Although the consumer is the most important entity for the organization the bargaining power by them is looked down upon since prices etc are fixed the companies which are not negotiable.



Bargaining power of suppliers: At times these suppliers make profit through delaying the consignment or by increasing the rate of goods.



Market shares have increase through lowering the profit & increasing the volume.

53

Chapter 7 :

RECOMMENDATIONS

Advertisements are made intended to accomplish the task of communicating effectively and properly, by communicating to the right person, by communicating the right message; put across through appearing and persuasive language, to positively 54

after the purchase behavior of the target audience. The role of advertisement is to provide the maximum economic returns to the company and fulfilling other social and informational objectives as well. When seen in the light of above, the advertising campaign of the company broadly seems to achieve the objectives.

When examined more closely, here and there some points need to be considered with more attention.

 Focus to be shifted towards major fraction of Indian society As reflected from the analysis, a major population is in the impression of the advertisements catering to the lives and needs of the richer society which themselves from only a fraction of the entire population of the country. Now at this point of time when the company has established itself as a major brand in the country the company should strive to engross itself deeper into the lives of the major fraction of the Indian society i.e. the rural and the semi-urban population.

 Use of better, catchy slogans

55

The successful advertisements of today have the element of effective slogans or punchlines as well. The slogans should be such that they are 'short and sweet' to be humble at the same time contributing cleverly to the overall objective of the advertisements. The recommendation of effective and catchy punchlines or slogans to be made a part of the advertisements of the company will definitely improve the present Impact. such slogans it incorporating regional sayings or slang might make them more easily understood and quick to repeat and sing.

 Showcasing of popular Stars/Models Another point that emerged from the analysis is regarding the showcasing of the favorite Models and stars in the advertisements of the company.

 Launching of Nationwide promotional schemes As the analysis reflected that it is the need of the hour to launch more attractive schemes country wide on the major festivals, seasonal events, etc. The company can go for some incentives schemes for its existing customers to create loyalty among them. It can be something like - Lucky Draw prizes, sending festival wishes, etc. It would help the company to create brand loyalty as well enhance the existing market share.

 Number of Hoardings/Banners to be increased 56

The detailed probing from the dealers and the customers revealed the fact that they have come across very few banners and hoarding of the company. The like in their number at the public places will enhance the brand awareness.

 Colored advertisements in print It is found out through the analysis that there appear advertisements of the company in print media but mostly in black and white. It is believed that the customers attach value to any brand through these small points, so in such cases brightly colored advertisements will enhance their attraction and will make them catchier.

 Comprehensive advertisement for the whole product line It would be a better idea to design more of comprehensive advertisements that showcase the whole product line under the umbrella brand of LG as the customers might not be aware of the whole range of the products and such a strategy will enhance the brand awareness and interest. Such advertisements can be promotional informational as well as increase the existing market share in a balanced way. The customers would not only buy routine products like CTV but also like to try products like MWO.

57

Chapter 8:

LIMITATIONS OF RESEARCH

 Due to time limitation, it was not possible to cover all areas of West Delhi. 58

 Scope of the study is limited, so it can not be said that it is true representation of whole nation.  On the basis of this data analysis, we can not assume the final situation of the market.  Sample size of 200 respondents is not enough to collect accurate information.  Lack of time allotted for the project  Convincing customer to spend some time for questionnaire  Lack of reliability of secondary data  There was not enough time to share the views with the management.  Due to limited time period and constrained working hours for most of the respondents, the answers at times were vague enough to be ignored.  As a lot of data was through secondary sources, chances of it being absolute accurate are comparatively less.

59

ANNEXURE

60

QUESTIONNAIRE Q. 1

Are you user of LG’s Home Product? Yes

Q. 2

Q. 3

Q. 4

Q. 5

],

No

[

]

If yes, Which Product are you Using? TV

[

],

Refrigerator

[

]

AC

[

],

Washing Machine

[

]

DVD/VCD

[

],

Microwave Oven

[

]

Vacuum Cleaner

[

]

By which Medium you come to know about LG? Advertisement

[

]

Family Member

[

]

Friends/Relative/Neighbor

[

]

Other Source

[

]

Which advertisement feature influenced you most in a particular Ad? Concept/Message

[

]

Logo/Slogan

[

]

Picturisation

[

]

[

]

Logo/Slogan

[

]

Message

[

]

Presentation of Ad

[

]

Model/Celebrity

[

]

Have you seen any LG’s ad? Yes

Q. 6

[

[

],

No

What makes you recall LG?

61

Q. 7

Q. 8

Q. 9

What do you like of the advertisement of LG? Impressive

[

],

Unsatisfactory

[

]

Satisfactory

[

]

What do you think about the most striking media to advertise LG? Television

[

],

Radio

[

]

Internet

[

],

Newspaper

[

]

Banner/Hoardings

[

],

Magazine

[

]

Based on the price range what impression do you carry of LG’s product? Economical

[

],

Costly

Neither Economical nor Costly

[

]

[

]

Q. 10 Does the advertisement reflect actual product profile? Yes

[

],

No

[

]

Very good & Promising

[

]

Good & Promising

[

]

Good but Need Alteration

[

]

Need complete Alteration

[

]

Q. 11 The advertising strategy of LG is

62

BIBLIOGRAPHY

63

BOOKS:  Kotler, Philip Marketing Management, Eleventh Edition JOURNALS/ MAGAZINES:  Indian Journal of Management – Volume xxxv (March 2008)  Survey of Indian Industries – The Hindu (2007)  Business Today NEWSPAPER:  Economic Times  Financial Express  Times of India WEB SITES:  www.lge.com  www.google.com INDUSTRY REPORTS  Investors Guide to Indian Industry 2010 COMPANY LITERATURE  “LG Parivar” the LG in-house magazine.

64

 “Global News” LG weekly news bulletin.

65