LG Home Appliances invests Rs. 50 crore during festive season

LG India is on an aggressive marketing spree with Rs. 50 crore chalked out as marketing budget for this festive season; and innovations across its home appliances portfolio. For differentiation, the focus of the brand is on offering longer warranty periods and clearly steering away from discount. The brand is also focusing on a fresh line of communication for potential product categories and a host of experiential marketing activities. Experts opine that it is in fact the right time for LG Home Appliances to gear up to the growing competition and extend offerings that can guarantee a safety on investments. Pitch digs further into the company’s marketing plans.

Mapping their journey from 1997, when LG Home Appliances was introduced in the Indian market, this arm of LG Electronics India (LGEIL), as per company estimates, today stands at the podium with 37.7 per cent, 38 per cent and 39.5 per cent market shares in the washing machine, refrigerator and microwave oven categories, respectively. Logging a sales turnover of Rs. 16,200 crore in 2011, LG Home Appliances has been contributing as much as 45 per cent to the total turnover of LG Electronics in India.

Rajeev Jain, Business Head, LG Home AppliancesWith a recent focus on strengthening communications for the premium products, Rajeev Jain, Business Head of LG Home Appliances, says that when it comes to outlining communications for categories, front loading washing machines can be singled out as one demanding aggressive communication. “The reason being that front loading contributes to about 10 per cent of the industry sales in India. In developed countries, it contributes as high as 70 per cent to the total washing machine sales,” spells out Jain while marking the potential area. The price points for the front loading variety that LG hosts currently ranges from Rs. 33,000 to Rs. 1,24,000, assuring thereby, an availability for audience across segments.

All set for the festivities 
The brand is also fast gaining momentum for the upcoming festive season. Rajeev Jain reveals that LG Home Appliances is all set to almost Rs. 50 crore on marketing through different mediums. Straying from concentrating on print, Jain shares that on television alone, the spend is about Rs. 14.8 crore. “The expense on print is going to be very limited. We do feel that television is the most appropriate medium to communicate all aspects of technological innovation effectively.”

Harish Bijoor, CEO, Harish Bijoor Consults

Some of the latest innovations include the ‘6 Motion and Inverter Direct Drive Technology’ in the washing machine category and the ‘Charcoal Lighting Heater’ in the high end microwave ovens. Commenting specifically on pronouncing the innovation in their communication, Ramanujam Sridhar, Founder CEO at Brand Comm, feels that this is a good move for LG to reinstate and further, demonstrate the fact that they’re constantly reworking their technology which is in fact, the back bone of all their products. Additionally, Brand Expert, Harish Bijoor also remarks that for LG, which had taken a backseat on technology, this kind of showcasing is indispensable to recuperate that backseat.

LG Home Appliances has also categorically declared that it won’t be offering any discounts or freebies during the festive season. Stating the rationale behind this decision, Jain says, “While making a final decision for purchasing an appliance, the consumer looks forward to the longevity of the performance. Too add to the confidence of consumers about quality and reliability of our range, we are offering additional warranty on select models.” Jain confirms that the typical warranty, which usually extends upto two years, will now be available for as long as ten years.

Assessing this move, Sridhar feels that this is particularly interesting as a strategy for a brand to stand out in exclusivity particularly in multi brand stores where consumers usually get lost owing to the plethora of companies offering discounts. Bijoor reiterates Jain’s justification when he says that this is a clear reflection of the confidence that the brand has in its products’ ability and additional warranties can definitely be a positive trigger to purchase. “As far as consumer trends go, there is increased focus on the lifetime of products and what the consumer is also looking while making the purchase decision, is the ‘safety on investment’,” he adds.

Ramanujam Sridhar, Founder CEO, brand-commJain also puts under the spotlight the wobbling expectations of industry growth that were set at the beginning of the year. He says the while the prospect of the industry growing by 15 per cent was an estimation made for the period of January-September, it has only grown by a meager 5 per cent. “But, most companies do become bullish during these two months and we expect the industry to reach the 15 percent growth figure during this period,” says Jain. His optimism is also largely supported by the fact that the wedding season will follow soon after Diwali and going by the psychology of the Indian consumers, what could possibly hunt them down is that purchases during this time do not depend on affordability and are more compulsion driven.

Patting the Indian shoulder
Simultaneously, shielding the fact that the Indian consumer does not operate in a kitchen environment, which conventionally hosts technology, LG Home Appliances has been escorting its customers towards this kind of acclimatization. As a BTL activity, which was initiated four years back, LG announced the winner of Mallika-e-Kitchen Cooking Contest 2012 last week. This year’s edition of Mallika-e-Kitchen saw 5,000 contestants participating from almost 100 cities in the country to exhibit their culinary skills. However, Jain describes the crux of the this activity has been the initial endeavour of demonstrating to the Indian woman the usage of a microwave oven for Indian traditional cooking thus, going beyond just traditional reheating.

Product innovation has also been following a similar suit. “The Charcoal Lighting Heater technology is apt for diverse Indian cooking like naans, paranthas and tandoori items. It also has a 301 Auto Cook menu, which includes over 211 Indian dishes at the click of a button,” explains Jain.

When asked about competition in the Indian market, from both extant and new players, Jain confidently replies by saying that, “Brands who have just entered the Indian market have the task of building awareness ahead of them. While our focus and spend is on differentiating our products, the new entrants are currently where we were fourteen years ago. Besides that, there is no brand who we don’t consider competition.”

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