Analyis of the Marketing Strategy of LG
T his is a study to analyse the Marketing Strategy of LG, one of the most popular brands in Consumer Electronics, f ocusing specif ically on its Television Products. T his study f inds about the status of Consumer Electronic industry and its segmentation. T hen which part the industry the LG is targeting. Also some of the leading competitors of LG like Samsung and Sony were discussed. Further the study of f ers Porter’s 5-f orces and SWOT analysis. Finally a consumer survey was undertaken and based on its analysis and previous data some recommendations will be of f ered. Table of Contents
Business competition is getting tougher year af ter year due to increasing globalization and the progress of technology. T he world has now become a one huge market where you can buy and sell products all around it. Many companies try to properly satisf y their customers in order to sell their products. T hey f ocus on this because a satisf ied customer is a loyal customer who will continue to buy the product f rom the same company hence increasing the company sales and revenue. T hat is companies have to sell their products ef f ectively in order to get the necessary f inancial resource. Financial resource can be used to develop new products so companies can survive in competitive market and also expand their business. Marketing activities plays a very crucial role in helping companies sell their product. Philip Kotler states that “Marketing is the process of planning and executing the conception, pricing, promotions, and distribution of goods, services, and ideas to create exchanges with target groups that satisf y customer and organizational objectives”. Marketing activities can help companies to sell their products at the right time, the right place, the right price, and also appropriate with customer needs. Marketer’s f undamental aim is to satisf y and f orge good relationship with their customers (Kotler 1994, pp.13-14). T his report aims to critically analyse the Consumer Electronics industry primarily f ocusing on Television products and its key players especially LG (Lucky Gold star), South Korea’s 3rd largest conglomerate. Further the report then will analyse the LG’s Target Market f or Television& their Marketing Strategy especially in Singapore. In the last part, some recommendations will be of f ered f or the improvement of the LG’s marketing strategy.
1. Description of Industry Industry Structure
Consumer electronics are electronic products which are used by everyday people. Consumer electronics usually f ind application in entertainment, communications, and of f ice productivity.T he global consumer electronics industry is dominated by Japanese and Korean company. T he world consumer electronics market value f rom 2004 to 2008 can be seen in f igure 2.1 (Consumer Electronics, 2010). Figure 2.1 World Consumer Electronics Source: Enterprise One Business Inf ormation Services, 2009
LG’s Competitive Strategy
LG’s competitive strategies are (LG Electronics 50-Year History 2008, pp. 197-199): Focusing on boosting ROIC (Return on Investment Capital) instead of simple growth. LG targets to achieve ROIC 15%, it means company have to improve gross margin. LG will decrease indirect costs and switch to high-prof it products. Optimizing the portf olio. T he company increase its prof itability, strengthened its brand in the market, use external resources (alliances) to expand the business in order to optimize the portf olio. Counter measuring the market bipolarization. LG develops the products based on customer needs and identif y potential needs of the target segment based on ST P (Segmenting, Targeting, and Positioning) strategies. Technology innovation and design dif f erentiation. LG f ocus on technology innovation and design dif f erentiation...