While weak consumer demand, the falling rupee and inflation worry most companies in India, Sanjay Chitkara, Head, Corporate Marketing, LG Electronics India spots an opportunity in this economic uncertainty. He tells us that the company is not only launching new products, but also targeting 20% growth this year
Q] The Consumer Durable segment is a very competitive segment, how do you look to differentiate yourself from your competition?
Product is the key differentiator and we are constantly introducing flagship products across categories. We believe that the key ingredients of a successful brand are: a great product followed by strong distribution and marketing strategies. Our focus is to highlight the product features of each product to our consumers as LG products enhance consumer lifestyle. This year, we launched Powercut Evercool range of refrigerators, Inverter V range of Air Conditioners, Cinema 3D Smart TV and flagship mobile handsets, Optimus G and G Pro.
Q] What are the fundamental principles of your marketing strategy and would you be upping your marketing spends?
Our key focus is to position LG as a premium brand through strong marketing initiatives of our flagship products across categories. For the year 2013 (calendar year), our marketing spend is 15% higher than last year.
Q] How has LG’s association with Mallika-e-Kitchen benefited the company? Are you looking at more Advertiser-Funded-Programmes (AFPs)?
Mallika-e-Kitchen showcased LG’s commitment to promote tasty, healthy cooking and the response was tremendous. LG looks to be the master of Indian kitchens and cuisines and as a market leader, it’s our responsibility to educate consumers on the benefits of healthy cooking in a microwave. Our aim is to increase its penetration in the interiors of the country and activities like Mallikae-Kitchen play an important role in this endeavour. Our efforts will continue in the future as well and with such unique concepts, LG Electronics is bullish to further strengthen its presence in the Home Appliances segment.
Q] With TRAI’s recommendation of 10+2 ad cap applicable from October and broadcasters upping their ad rates, what will be LG’s strategy going ahead?
There is a lot of discussion on this subject and we are closely monitoring the situation. TV is an important medium for us.
Q] You have been pretty bullish on the digital space. What are your new initiatives in this space and are you looking to up your spends on this platform?
Digital Marketing is an integral part of the overall marketing strategy at LG and a considerable part of our marketing budget goes into establishing our presence as a brand in the Digital space. While our website acts as the hub of all product related information, we have built a strong social media environment over the last few years, for facilitating consumer engagement with the Brand. Our social brand assets are all high on constant engagement with over 2 million online friends. The spend and focus on a particular media vehicle is usually a function of the objective and the category in question.
We recently launched our latest mobile handset, LG Optimus G Pro, in media and in the blogger community. The launch was marked with huge activation and high consumer and blogger engagement in the social space. Our activity hashtag #ImaginationBegins, which is the communication thought of LG Optimus G Pro, trended in Twitter for three consecutive days in India, without any media buy.
Q] Being in a category which requires direct consumer engagement (in-store and others), what are the kind of on-ground activities taken up by the company to connect with the consumer?
We have an innovative approach towards designing our marketing campaigns to increase visibility through in-store branding and innovative BTL activations like LG Lifestyle and Service on Wheels. Designed as a direct-contact initiative for LG’s aspiring and lifestyle conscious consumers, the LG Bus showcases the company’s flagship products and is designed around the concept of a modern home that embodies technology & style. This campaign has covered 16 cities and five states, and we plan to cover 35 cities by the end of the year. More than 20,000 customers are engaged till date. The campaign provided users a first-hand experience of how LG can help simplify their lives and add a touch of style to their homes. We have other interesting campaigns like weekend carnivals, and various national and regional exhibitions.
Q] How have you leveraged your association with ICC as their global partner?
LG’s association with ICC began in 2009 and LG is the official global partner of ICC events (including ICC T20 World Cup and ICC Cricket World Cup) till 2015 and have launched several on-ground programmes as a part of this association. Our other initiative is ‘LG Lead 11’ where children get an opportunity to walk side by side the cricket heroes right before every match and stand alongside during the recital of the national anthem of the countries of competing teams. LG has also launched an online property called ‘LG My Cricket, My Voice’, a platform that LG has acquired a trademark for, allows consumers to interact with their favourite cricket personalities on LG India Twitter handle through this platform.
Q] LG recently hiked the prices of its products due to rupee weakening and rising input costs. With the rupee still not stabilizing, are there likely to be any more price hikes in the future?
We are closely monitoring the situation. If the rupee situation remains the same or further depreciates, it will definitely have an impact on pricing.
Q] What is your current turnover and what is the growth that you expect in this fiscal year?
Our current turnover is Rs 16,000 crore and we are targeting 20% growth this year.
Q] What is your market-share in your key verticals and how much of your revenue comes from rural markets?
Our market-share is 23% in AC and Panel TV space, 37% for refrigerator and washing machines. We account for 33% of 3D TV and 39% of the microwave market in India. Around 12-15% turnover contribution is from rural markets.
Q] High interest rates and sluggish consumer demand have hit consumer durable sales. What is your outlook for the industry for the year?
Consumer sentiment is a concern but we are very optimistic and are witnessing good growth in most categories. AC and flat panel businesses have grown by 20% and 40% respectively and we have seen good growth in refrigerators too.
Q] What are the challenges and opportunities you see in the Indian market?
India is an attractive but complex market and projected to house the world’s largest middle class consumer market by 2030 according to Deloitte. Indians are value conscious customers, ready to pay a premium if they believe and trust the value of product. However, infrastructure is a challenge and there is a lot of scope to improve the same.
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