SWITCHING ON IN RURAL MARKET- LG

Ruchi Kapil Sahil

Pankaj‘Mansi

ShivaniDhiraj

SaumyaAshish

LG- Vision

Rural pop is about 73% of the total pop Total turnover of Rs.4500 Crore & share of 55 % corporate houses perceived great opportunity Urban – 4%, Rural – 11% long thought luxury -become a household sight With 128 million households, the rural population is

nearly three times the urban(MNC)

4 A’s of Rural Marketing

• Availability

To tap these unexplored country markets, LG has set up 45 area offices and 59 rural/remote area offices. 230 service centres.

• Affordability

Cineplus- Rs 4900

Sampoorna- Rs 3000

• Acceptability

LG Electronics in 1998 developed a customised TV “Sampoorna” for the rural market. It was a runway hit selling 100,000 sets in the very first year.

• Awareness-

Mobile Vans(Garam Garam Khana)

Exhibitions , Road Shows

Reasons for growth

inc in income growth in education enlarged media reach growing interaction with urban area marketers ‘s effort to reach rural areas

Rural market becomes Attractive to corporate

The growing oppurtunity, one main driver Heat of competition in the urban market

Surprising Facts

Bihar - Horlick Punjab - Washing Machine

LG Company Profile

LG is a South Korean MNC World’s 3rd largest appliance maker LG electronics India was established in January

1997 LG India deals in many products

AC Flat Panel Display Microwave Oven

Contd…

Refrigerator Television Vacuum Cleaner Washing Machine Mobile Phones

4 A’s of Rural Marketing

LG’s RURAL FORAY

• LG India- tripled the number of its retail & distributor outlets in rural areas from 2004 to 2008.• The avg. price of its Sampoorna range of CTVs came down to about the price so competitive that, thereby bridging the gap between CTVs and other local B/W TVs.• It also tapped local forms of entertainment like annual haats and fairs and made huge investments in infrastructure for distribution and marketing.

Mobile Van at Kasargod

1000 In Store Demonstrators at Dealer counters in

Rural Cities

Promotion of Sampoorna TV’s

Cookery Classes atdifferent locations forRural Housewives

Mobile phone market penetration strategies

•LG-BSNL –Reliance tie up for rural market.

•Handsets which are cheap and with offers are provided to the rural customers.

Marketing Key Success Factors

• Customization

• Positioning

• Innovative marketing

• Product localization - Product localization is a key strategy used by LG. It came out with Hindi and regional language menus on its TV.

• Regional distribution model - This has resulted in quicker rotation of stocks and better penetration into the B, C and D class markets.

Distribution of villages in India

Population Number of Villages % of Total Less than 200 114267 18% 200-499 155123 24.30% 500-999 159400 25.00% 1000-1999 125758 19.70% 2000-4999 69135 10.80% 5000-9999 11618 1.80% 10000 and above 3064 0.50% Total 638365 100%

FACTS CONTINUE….. LG’s turnover 2002 - 60% Today – 40% (urban) Turnover of 10,750 crore (2008) 13,000 crore (2009) Sales contribution – 35% (2008) Manufacturing capacity – 30% by 2009 By 2009-10, urban – 4% rural – 11%

SUGGESTIONS

Suggestions

Giving Hindi names to the products How have they reduced cost without affecting the

quality Videos Focus the Melas and focus them Play with their emotions with Ads

Introduction of finance schemes To roll out several new models in low-end

segments Colour televisions and audio systems will have a

big market due to their low pricing policy. Schemes like giving trial of products, and making

them aware of usage of products The main challenge is electricity or power making

that kind of products in which there is less usage of power

Launch more models in their “Sampoorna television range”.

Rural market is less affected than urban market in slowdown. Then makes distribution network more strong.

Future Projects of LG

Invest $ 40 million in 2009 Expecting Rs 13,000 crore turnover in 2009 15% plus growth rate in rural marketing Decided to double business by 2010 Launching 5 new Models in Flat Panel Display Form new kitchen appliance business group Focus on low-end products

Contd…

Invest Rs 400 crore on Marketing this year compared to Rs 350 crore in 2008

Launching 2 by 10 Blue Ocean Strategy