Case study analysis

on
Lifes good for LG

Submitted To:

Submitted By:

Mrs.Rekha Attri

Uday Jat

Q.NO.1 Study the case and identify significant issue.

Ans : -

LG company was comes in India in the early 1990. It was established in

1997 and the managing director of company is Kwang-Ro Kim.

1. LG company Indias share dropped in January 2005 that time its market share in
refrigerators fell fractionally from 28.6 % the previous month to 28.1%.
2. In 1990 that time the rules didnt permit foreign companies to start independent
ventures. So Lucky Goldstar took on not one, but two joint venture partners .The
first partnership ended acrimoniously while the second one never got off the
ground.
3. It was set up its own factory to make washing machines and refrigerators and in
2004 LG set up a second manufacturing facility at Ranjangaon,

near Pune

which makes white goods as well as cellular handset phones the first GSM
handset manufacturing facility in India.
4. Re-christened LG Electronics, the new company a100% subsidiary of the Korean
chaebol swung into action and set up a state of - the art manufacturing
facility at Greater Noida, UP.
5. When the customers did not accept the product LG did aggressive advertising in
the white goods industry.
6. It did a close tie up with cricket ensured the brand building exercise.
7. The managing director of company Kwang-Row Kim isnt worried.

Q. NO 2. What marketing strategies did LG adopt to be so successful in India.

Ans : - Following strategies used by LG company for adopt Indian market
1. Company was set up a state-of- the-art manufacturing facility at grater Noida, UP.
2. LG is one of the most aggressive advertisers in the white goods industry .it was
spending 5% of its revenue on the marketing activities .
3. Company was tie up with cricket ensured the brand buildings exercise would
score well on consumer recall apart from singing and leading Indian cricketers .
4.One of the other more important strategies of LG company was that it used
penetrative distribution strategy ensured that products were available even in smaller
towns and cities, breaking the chain of urban dependency that plagues most white
goods manufacturers and it was also used rural marketing.

5. LG reaches into the hinterland through a pyramidal sales structure.

6. It set up branch offices in larger cities and central area offices in smaller towns.
Through remote area offices its turn reach out to even smaller town and villages. It
was set up 51b ranch offices, 87 CAO and 78 RAOs. Each RAO has servicing,
marketing and sales teams at its disposal and an individual budget for marketing
activities in its territory.
7. It was used free trial method for attracting people

Q2. Conduct a SWOT analysis of LG.

Ans : Strength:1. High market share in white goods
2. It makes different type of all white goods in wide range
3. Advertising power is very high and most aggressive

in the

white goods industry

4. LG is a company which has multinational market and branches
are set up in all over India
5. Brand value is very high in white goods
6. Servicing, marketing, sales and financial power is strong
7. It used V-SAT and Internet technology to connected RAOs and
CAO
Weaknesses:1. Lack of strong team and operators: Due to the lack of skilled
employees it is so hard to move on in the Indian markets
2. It produce same product which makes by samsung

Opportunities:1.
2.
3.
4.

Fast and furious growth in India

Shifting maximum market in rural area
Advancement in technology
Increase market share in home appliance product

Threats:1. Price inflation: as per Indian market is more price sensitive so it is a

big fear of LG company
2. There are big competitor of LG like Samsung and Whirlpool
Company they were making same product
3. Local branded companies of India

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