Global and regional digital leader, LG Electronics, has announced a new marketing initiative to ensure its home appliance business rakes in US $14 billion in global sales by 2007 to become the world’s largest appliance manufacturer.
LG’s new strategy aims to focus on the premium segment of the market that fetches greater margins as opposed to volumes. The company claims this will benefit its consumers, channel partners and stakeholders as it focuses on products that drive rapid growth and lead in their brand category to create value for customers. Market studies indicate the demand for luxury consumer goods in the Middle East is burgeoning as a result of the high per capita income and quality savvy consumers with increased purchasing power. LG enjoys high brand recognition in the region, it is the second most recognised electronics brand with 55.7 per cent unaided brand awareness according to the 2004 Gallup brand equity index survey, which represents high purchasing probability for its premium products.
“Even though LG has strong brand awareness in the region, the sales of our premium products in the Middle East need a boost. LG is already the world’s top selling brand in terms of air conditioners, microwave ovens and canister vacuum cleaners. The goal of LG’s Digital Appliance Company is to become the number one brand worldwide in the home appliance sector by 2007 and increase global sales to US$ 14 billion. We are focusing our production and marketing efforts on high end products in the appliances market. To keep pace with our growth, we now need to fine tune our marketing strategy and focus on premium products,” said David Park, vice president and head of overseas sales and marketing, LG Digital Appliance Company.
To succeed in its premium marketing efforts, Park said LG would concentrate on staying ahead of the technology curve and develop products that deliver high value to consumers. Park also announced a new channel marketing strategy to reward its distributors and build on its channel successes in the region. LG has developed a CRM program called the ‘Diamond Club’ to drive the sales of premium products. Sustaining one market price in all stores, maintaining a price gap with main competitors to retain a premium image, unique promotions for target customers and well-trained customer care executives are features of this channel initiative.
“We are committed to investing marketing and training resources to educate the channel on the benefits of delivering cutting-edge mobility, digital convergence and appliances to customers in these markets,” said Park.
Focusing on the premium segment in the appliances market will help LG overtake competitors such as Whirlpool of the USA and Sweden-based Electrolux. In the Middle East, LG is aiming for overall regional sales of US$ r2.8 billion this year, a 34 per cent growth over 2004. Since 1999, LG’s Digital Appliance Company has been posting over 20 per cent growth in sales every year compared to the four to five per cent average growth rate in the global home appliances industry.
“To date, our major revenue earners have been commercial and residential air conditioners, microwave ovens, refrigerators, washing machines and vacuum cleaners. We intend to continue to build on these core product categories as well as to focus on future sources of growth in areas such as central air conditioners (CAC’s), built-in appliances, ovens, dishwashers, and plasma lighting systems,” Park added.
Around 48 representatives from LG’s regional distribution network in the UAE, Qatar, Bahrain, Oman, Kuwait, Yemen, KSA, Iran and Turkey participated in the forum.
bout LG Electronics, Inc.
LG Electronics, Inc. (Korea Stock Exchange: 066570.KR) was established in 1958 as the pioneer in the Korean consumer electronics market. The company is a major global force in electronics and information and communications products with more than 64,000 employees working in 76 overseas subsidiaries and marketing units around the world. With annual total revenues of more than US $16.9 billion (non-consolidated), LG Electronics conducts its business in three main areas: Digital Display & Media, Digital Appliances, and Telecommunications Equipment & Handsets.
The LG Digital Appliance Company is fast becoming the leader of the global home appliances industry, ranking No.1 in sales of air conditioners, microwave ovens, and canister vacuum cleaners. LG Electronics was the first company to commercialize a full line of Web-enabled home network appliances including refrigerators, washing machines, microwave ovens, and air conditioners, and is increasingly seen as a leader in premium appliances.
LG Electronics’ goal is to enable the intelligent networking of digital products that will make consumers’ lives better than ever. For more information, please visit www.lge.com
