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Advertising Strategy of LG Electronics
Advertising Strategy of LG Electronics
Advertising Strategy of LG Electronics
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
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
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
(JIMS).
_________________________
iii
EXECUTIVE SUMMARY
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
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
The aim of the project was to shed some light on the Advertising Strategies of LG
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
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 1: Introduction 1
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
the consumption pattern of the society in general. Thus, the impact lead
changes in them.
2
The paramount reason which may necessitate the use of advertisements
may be:
country’s growth.
3
The basic concept based on ‘Telling and Selling’. One of the ‘5 M’s of
and the total impact formed them by the overall image of the company
4
OJECTIVES OF THE PROJECT
5
SCOPE OF THE STUDY
Electronics. As per this study what could be analyzed was: Brand Recall
company: -
6
Chapter 2 :
RESEARCH
METHODOLOGY
7
MARKETING RESEARCH
Marketing research is the function, which links the consumer, customer and
generate, refine and evaluate marketing action, monitor marketing performance, and
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.
RESEARCH DESIGN
SAMPLE DESIGN
DATA COLLECTION
DATA ANALYSIS
8
RESEARCH DESIGN
A research design specifies the methods and procedures for conducting a particular
study.
Descriptive research studies are those studies which are concerned with described the
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
population. Besides, it is obvious that a sample survey needs less time than a census
inquiry.
10
SAMPLE DESIGN
This is done so as to receive a fair response to achieve our objectives and also so that
The type of sampling that was carried out was probability (convenience) sampling due
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
11
DATA COLLECTION
The study was conducted by the means of personal interview with respondents and
For the purpose of analysis, the data is necessary to collect the vital information.
Primary Data
Secondary data
Primary Data:-
For the market study, structured non disguised questionnaire was selected as the
12
To making a well structured questionnaire, adoption of three types of questions has
taken place:
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
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
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
13
MEASUREMENT TECHNIQUES
In the questionnaire most of the questions asked were based on attitude rating scale,
Tools of Analysis
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
Descriptive statistics concern the development of certain indices from the raw data
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
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
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
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
In the beginning of 1970’s after passing of the founder / chairman In-Hiwi Koo, Cha-
Kyung 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,
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
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 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
LG’s business strategy for the 21st century is very aggressive. Information and
17
Multimedia Division:
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
This division is divided into two main product categories with Air Conditioners,
washing machines, refrigerators, microwave ovens, vacuum cleaners etc. in the home
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.
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
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
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
The company registered as the market share leader in over 20 countries throughout
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
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
Going forward, LGE is making great strides towards realizing its vision of becoming
the ‘Best Global Company’ in the 21 st century. As LGE pursues this vision, it remains
world.
20
HISTORY OF LG ELECTRONICS
The history of LG Electronics has always been surrounded by the company's desire to
LG Electronics was established in 1958 and has since led the way into the advanced
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
21
1997
World's first CDMA digital mobile handsets supplied to Ameritech and GTE
1998
1999
2000
2001
Launches world's first Internet washing machine, air conditioner, and oven
2002
2003
22
2004
U.S./Canada
2005
Develops world's first 3G UMTS DMB handset, 3G-based Hand Media FLO
2006
Develops the first single-scan 60" HD PDP module and 100-inch LCD TV
2007
Launches the industry's first dual-format, high-definition disc player and drive
23
2008
Introduces new global brand identity: "Stylish design and smart technology, in
2009
2010
24
Chapter 4 :
ADVERTISING
STRATEGY
25
EFFECTIVE ADVERTISEMENT AND CONSUMER
ATTITUDE
Advertising
-Evoked
Positive
Affective Increases Attitude towards the
Response 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.
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.
response for this complaint, then it leads to earning discredit from the
customers.
28
ESSENTIALS OF EFFECTIVE ADVERTISING
the consumers; there are a few agreed principles, which govern the
Importance of claim:
important for the consumer too. If a buyer gives importance for quality,
Believable:
ways. One way is to quote facts and figures about tests proving your
29
Uniqueness:
Repetition:
cost.
30
ADVERTISING STRATEGY OF LG
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
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
Advertising for LG’s refrigerators with concepts like ‘Frost Free’, ‘PN
system’ and ‘Multiplus’ etc. And for CTV with concept of ‘Protection
31
ADVERTISING WORLD OF LG
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.
Out of the total share for advertising about 70% is spent on pure
advertising and about 30% on various events, exhibitions, etc.
32
PRINT ADVERTISING OF LG
of its unique concepts & effective portrayal. The punch line aired
various models of electronics also cast a good repo for the products.
33
o Now - Life’s Good.
which they seem to recall the company’s name and philosophy. In fact
letter “L” and “G” in a circle symbolizes the world Future, Youth,
in the world.
34
Red, the main color, represents friendliness, gives a strong impression
35
Chapter 5 :
DATA ANALYSIS
AND
FINDINGS
36
Female 64 32%
TOTAL 200 100%
Gender Classification
136
140
120
100
64
80
Respondents
60
40
20
0
Male Female
sex
ANALYSIS:
37
TOTAL 200 100%
156
160
140
120
100
80 Respondents
44
60
40
20
0
Users Non-Users
C ategory
ANALYSIS:
Family member 14 7%
Friend/relative/neighbor 28 14%
Other source 0
TOTAL 200 100%
38
Sources of Information
158
160
140
120
100
80
Respondents
60
40 28
14
20
0
0
Advertisements Friends/Relatives/Neighbours
S ourc es
ANALYSIS:
Logo/slogan 36 18%
Picturisation 28 14%
39
Most Influencing Featuers of Ads
140
120
100
80
Respondents
60
40
20
ANALYSIS:
the Ad.
Non aware 16 8%
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:
While rest of the respondents have never seen/ not remembered at the time of
survey.
Table 6 : Recall of LG
Message 74 37%
Presentation of ad 70 35%
Model/celebrity 12 6%
41
TOTAL 200 100%
Recall of LG
80 74
70
70
60
50 44
40
Respondents
30
20 12
10
ANALYSIS:
Unsatisfactory 52 26%
TOTAL 200 100%
42
Im pacts of LG's Ad
120
112
100
80
60 Respondents
52
40 36
20
0
Impressive Satisfactory Unsatisfactory
C ategory
ANALYSIS:
Radio 30 15%
Newspaper 16 8%
magazine 18 9%
43
Banner/hoarding 2 1%
TOTAL 200 100%
Effective Media
134
140
120
100
80
Respondents
60
40 30
16 18
20
2
ANALYSIS:
Costly 64 32%
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:
No 52 26%
45
Reflection of Product Profile by the ads
148
160
140
120
100
Respondents
80 52
60
40
20
0
Yes No
ANALYSIS:
52 respondents are in favoring that the ad doesn’t reflect the true value or
information.
46
TOTAL 200 100%
84
90
80
70
60 54
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:
While 62(16 + 46) respondents says it as very good / good and promising.
FINDINGS
47
Logo/slogan is the main part, which makes an effective
consumers.
survey).
costly.
segment.
SWOT ANALYSIS
STRENGTH
48
LG decided to be a value driver, selling novel product benefits.
had any relevance ( like offering AC’c with Health Air System
with anti fungs, electrostatic and deodorizing and and anti bacteria
WEAKNESS
49
It has not planned for setting up of any new plants where their
other competitors.
Ambassadors.
OPPORTUNITIES
It can take the market very well with the new investment of $ 143
millions.
THREATS
competitors.
50
LG has a major market than SAMSUNG between the families due
51
Chapter 6 :
CONCLUSIONS
52
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.
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.
Although the consumer is the most important entity for the organization
the bargaining power by them is looked down upon since prices etc are
Market shares have increase through lowering the profit & increasing the
volume.
53
Chapter 7 :
RECOMMENDATIONS
54
Advertisements are made intended to accomplish the task of communicating
right message; put across through appearing and persuasive language, to positively
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
When seen in the light of above, the advertising campaign of the company broadly
When examined more closely, here and there some points need to be considered with
more attention.
society
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
55
Use of better, catchy slogans
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.
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
Another point that emerged from the analysis is regarding the showcasing of the
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.
56
Number of Hoardings/Banners to be increased
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
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.
line
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
58
Due to time limitation, it was not possible to cover all areas of West Delhi.
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.
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
59
ANNEXURE
60
QUESTIONNAIRE
61
Q. 7 What do you like of the advertisement of LG?
Impressive [ ], Satisfactory [ ]
Unsatisfactory [ ]
Q. 8 What do you think about the most striking media to advertise LG?
Television [ ], Radio [ ]
Internet [ ], Newspaper [ ]
Banner/Hoardings [ ], Magazine [ ]
Q. 9 Based on the price range what impression do you carry of LG’s product?
Economical [ ], Costly [ ]
Neither Economical nor Costly [ ]
62
BIBLIOGRAPHY
63
BOOKS:
Kotler, Philip
JOURNALS/ MAGAZINES:
Business Today
NEWSPAPER:
Economic Times
Financial Express
Times of India
WEB SITES:
www.lge.com
www.google.com
INDUSTRY REPORTS
COMPANY LITERATURE
64