A

PROJECT REPORT ON

LG

SUBMITTED BY-

HIMANSHU TULSHYAN(11BSUHH010021)

Executive summary
Indian Consumer durables market used to be dominated by few domestic players like godrej Voltas allwyn and kalvinater. But post liberalization much foreign company have entered into Indian market dethroning the Indian player and dominating Indian market the major categories in the market CTV, REFRIGRATOR, AIR CONDTIONERS AND WASHING MACHINE India being the second largest growing economy with huge consumer class has resulted in consumer durables as the fastest growing industries in India LG, SAMSUNG the two Korean companies has been maintaining the lead in the industries with LG being leader in almost all the categories. The rural market is growing faster than the urban market, although the penetration level is much lower .The CTV segment is expected to the largest contributing segment to the overall growth the industry. The rising income levels double-income families and consumer awareness are the main growth drivers of the industries. Consumer durables major LG Electronics India Pvt Ltd (LGEIL) will invest nearly Rs 500 crore in India this year in research and development, brandbuilding and other marketing initiatives. The company, having a turnover of Rs 9,500 crore and market share of 26 per cent, is investing Rs 360 crore on brand-building and other marketing initiatives and around Rs 140 crore on research and development, besides launching new platforms in information technology and related areas,

LGs innovative 211 campaign to provide quality after-sales service, will also be expanded from the existing 22 to 40 cities by next month, The campaign, for which IT infrastructure has been set up, includes the companys response to customer complaint within two hours. The fixing time for complaints varies from one hour to a maximum of 24 hours.

INTRODUCTION
Before the liberalization of the Indian economy, only a few companies like Kelvinator, Godrej, Allwyn, and Voltas were the major players in the consumer durables market, accounting for no less than 90% of the market. Then, after the liberalization, foreign players like LG, Sony, Samsung, Whirlpool, Daewoo, and Aiwa came into the picture. Today, these players control the major share of the consumer durables market. Consumer durables market is expected to grow at 10-15% in 2007-2008. It is growing very fast because of rise in living standards, easy access to consumer finance, and wide range of choice, as many foreign players are entering in the market With the increase in income levels, easy availability of finance, increase in consumer awareness, and introduction of new models, the demand for consumer durables has increased significantly. Products like washing machines, air conditioners, microwave ovens, color televisions (CTVs) are no longer considered luxury items. However, there are still very few players in categories like vacuum cleaners, and dishwashers Consumer durables sector is characterized by the emergence of MNCs, exchange offers, discounts, and intense competition. The market share of MNCs in consumer durables sector is 65%. MNC's major target is the growing middle class of India. MNCs offer superior technology to the Consumers whereas the Indian companies compete on the basis of firm grasp of the local market, their well-acknowledged brands, and hold over wide distribution network. However, the penetration level of the consumer durables is still low in India.
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History of company The company was originally established in 1958 as Gold Star, producing radios, TVs, refrigerators, washing machines, and air conditioners. The LG Group was a merger of two Korean companies, Lucky and Gold Star, from which the abbreviation of LG was derived. The current "Life's good" slogan is a backronym. Before the corporate Name change to LG, household products were sold under the Brand name of Lucky, while electronic products were sold under the brand name of Gold Star. The Gold Star brand is still perceived as a discount brand. In 1995, Gold Star was renamed LG Electronics, and acquired Zenith Electronics of the United States. ECONOMIC ACTIVITY LG Electronics is playing an active role in the world market with its assertive global business policy. As a result, LG Electronics controls 110 local subsidiaries in the world with around 82,000 executive and employees.

LG Group 1. LG.Philips LCD 2. LG Chemical 3. LG Telecom 4. LG Powercom 5. LG Twins

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6. LG Dacom PRODUCT DETERMINANTS &STRATEGIES Mobile communications (a) CDMA Handsets, (b) GSM Handsets, (c) 3G Handsets, (d) Cellular Phones Digital appliance a) Air Conditioners, b) Refrigerators, c) Microwave Ovens, d) Washing Machines,
e) Vacuum Cleaners,

f) Home Net, g) Compressors for Air Conditioners and Refrigerators

Digital display a) Plasma TVs,

b) LCD TVs,
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c) Micro Display Panel TVs, d) Monitors, e) PDP Modules, f) OLED Panels, g) USB Memory, h) Flat Panel Computer Monitors

Digital media a) Home Theater Systems,

b) DVD Recorders,

c) Super Multi DVD Rewriters, d) CDRW, e) Notebook PCs, f) Desktop PCs, g) PDAs, h) PDA Phones,
i) MP3 Players,

j) New Karaoke Systems, k) Car Infotainment

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STRATEGIC ALLIANCE
LG Electronics is making technical advances and identifying business opportunities through various associative relationships with some of the world's leading companies. LG Electronics is striving to become number one in the world by mingling in various business and technological fields and making strategic alliances with world famous companies. "Strategic association between corporations," in which companies with different infrastructures cooperate in the fast-developing 21st century business field, is of key significance in terms of strengthening the existing industry and creating a new one. LG Electronics will do its best to create new products and services with an open mind, while developing new technologies and business fields through various associations with some of the world's most successful companies. 1. 3M
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2. SUN 3. YAHOO 4. PHILLIPS 5. TOYOTA 6. MICROSOFT 7. HP 8. GOOGLE 9. GE 10.INTEL 11.NORTEL 12.HITACHI 13.PRADA 14.RENESAS 15.TOSHIBA 16.BESTBUY And the number follows many more..

In Feb. 2007 LG Electronics and Yahoo formed a strategic alliance. Yahoo mobile services will be available from LG mobile. This service is targeting 10 million LG mobile phones in over 70 countries. In Mar. 2007 LG Electronics and Google formed a strategic alliance. Both companies will work together to release, market, and offer LG mobile phones with Google services (search engine, map, email, and blogs.)

MARKETING DETERMINANTS & STRATEGIES

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1. Innovative marketing - LG was the first brand to enter cricket in a big way, by sponsoring the 1999 World Cup and followed it up in 2003 as well. 2. Local and efficient manufacturing to reduce cost - To overcome high import duties, LG manufactures PC monitors and refrigerators in India at its manufacturing facility at Noida, Delhi. 3. Commissioned contract manufacturing at Mohali, Kolkata and Bhopal for CTVs. 4. Product localization - Product localization is a key strategy used by LG. It came out with Hindi and regional language menus on its TV. 5. Regional distribution model - This has resulted in quicker rotation of stocks and better penetration into the B, C and D class markets. 6. Leveraging Indias IT advantage - LG Electronics has awarded a contract to develop IT solutions to LG Soft India (LGSI). The project involves development and support for ERP, SCM, CRM and IT-enabled services for LG.

Strategies adopted by the organization

LG follows 10 commandments which are as follows. 1. Foster working environment-5S Environment 2. Fast execution is key to success 3. Transparent and fast communication-open communication 4. Update market -knowledge Demographics
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5. Win Win relationship with the trade partners 6. Customer is the king 7. Even Billing Road to ach supplier A 8. Be in touch with the market (70% Market, 30% Office). 9. Plan and Execute annual marketing Calendar-Time to market 10.Display share of 50% -to get 50% consumer share.

GLOBAL SHARE AND REACH

LG Electronics plays an active role in world markets with its assertive global business policy. As a result, LG Electronics controls 114 local subsidiaries worldwide, with roughly 82,000 executives and employees .

ASIA & PACIFIC

LG Electronics Australia Pty, Ltd. Marketing 2 Wonderland Drive Eastern Creek NSW 2766, Australia 61 2 8805 4000 61 2 8805 4201 Plot No. 51, Udyog Vihar, Surajpur-Kasna Road, Greater Noida - 201 306 (U.P.) 91 120 2560 900 / 940 91 120 2560 956 (i) Factory 1 (Mail Receipt) : Block -G , MM2100 Industrial Town, Cikarang Barat, Bekasi 17520 , Jawa Barat - Indonesia 62 21 2930 4000 62 21 5797 3103
Japan

Australia

India

LG Electronics India Pvt. Ltd. Marketing & Production

Indonesia

P.T. LG Electronics Indonesia Marketing & Production

LG Electroics Japan co., LTD

Hon-Kan9F, Akasaka Twin Tower2-17-22

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Akasak,Minato-Ku, Tokyo 1078512-,Japan Marketing 81 3 3588 1911 81 3 3586 3984 Twin Tower 128, Yeoui-daero, Yeongdeungpo-gu, Seoul, Korea 82-2-3777-1114 77, Heungan-daero 81beon-gil, Dongangu, Anyang-si, Gyeonggi-do, Korea 82-31-450-7083

Korea

LG Electroics Headquarters

Korea

LG Electroics Anyang Institute

EUROPE
Office Campus Gasometer Guglgasse 15/4A (Grd Flr, 5th & 6th Flr),A-1110, Vienna, Austria 43 1 74015 4015 43 1 74015 2020 Zlaty Andel, Nadrazni 23/344, 151 34 Praha 5, Czech Republic 42 0234 094 600 42 0234 094611 Paris Nord-117 Avenue des Nations BP 59372 Villepinte 95942 Roissy CDG Cedex 33 1 4989 8949 33 1 4989 8809 Berliner Str 93, 40880 Ratingen, Germany 49 210 2700 80 49 210 2700 8777

Austria

LG Electronics Austria GmbH Marketing

Czech Republic

LG ELECTRONICS CZ, s.r.o. Marketing

France

LG Electronics France S.A.S Marketing

Germany

LG Electronics Deutschland GmbH Marketing

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Greece

LG Electronics Hellas S.A. Marketing

1. Ethnarhou Makariou str., Delta Palaio Faliro, PO Box 77331, 175-01, Faleo Paliro, Athens, Greece 30 210 4800 500 30 210 4800 510 H-1097, Budapest Konyves Kalman krt 3/a Hungary 36 1 455 6060 36 1 455 6066 Via Dell'Unione Europea, 6 20097 San Donato Milanese (MI), Italia 39 02 51801 1 39 02 51801 500 Krijgsman 1, 1186 DM Amstelveen , The Netherlands 31 20 456 3100 31 20 456 3299 Krijgsman 1, 1186 DM Amstelveen , The Netherlands 31 (0) 20 456 3100 31 (0) 20 456 3292 Lilleakerveien 8, 0283 Oslo, Norway 47 67 11 10 90 47 67 11 10 99 ul. LG Electronics 7, 06-500 Mlawa, Poland 23 6547 417 48 23 654 3259 LG Electronics Polska Sp. z o. o., Mokotow Nova, ul.Woloska 22, 02-675 Warsaw, Poland 48 22 481 7100 48 22 481 7888

Hungary

LG Electronics Magyar KFT Marketing

Italy

LG Electronics Italia S.p.A. Marketing

Netherlands

LG Electronics Benelux Sales BV Marketing

Netherlands

LG Electronics European Shared Service Center B.V. Shared Service Center

Norway

LG Electronics Norway AS Marketing

Poland

LG Electronics Mlawa Sp. z o.o. Production

Poland

LG Electronics Polska Sp. z o.o. Marketing

Poland

LG Electronics Wroclaw Sp.z.o.o. Production

ul LG Electronics 1-2 Biskupice Podgorne, 55-040 Kobierzyce, Poland 48 71 792 9400

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48 71 792 9405 Quinta da Fonte - Edificio D. Amelia Rua Vitor Camara, No. 2, Piso 2 2770-229 Paco d'Arcos (Oeiras), Portugal 351 21 120 2200 351 21 120 2240 17-21 Bucuresti-Ploiesti Baneasa Center, 5th Floor, Bucharest, Romania 40 21 233 2491 40 21 233 2478 C/ Chile 1, 28290 Las Rozas - Madrid, Spain 34 91 211 2200 34 91 211 2209 Esbogatan 18 Akalla P.O.Box 83 SE-164 94 KISTA, Sweden 46 8 5664 1500 46 8 5664 1599 (i) Legal Address : Krijgsman 1, 1186 DM LG Electronics European Holdings B.V. Amstelveen , The Netherlands Holdings 31 (0) 20 456 3100 31 (0) 20 456 3292 Gebze Organize Sanayi Blgesi Ihsan Dede Cad. No :139 41480 Gebze / Kocaeli, Turkey 90 262 678 7703 90 262 678 7879 LG House, 250~ 252 Bath Road, Slough, Berkshire SL1 4DX, United Kingdom 44 1753 491 500 44 1753 491 500

Portugal

LG Electronics Portugal S.A. Marketing

Romania

LG Electronics Romania S.R.L. Marketing

Spain

LG Electronics Espana S.A Marketing

Sweden

LG Electronics Nordic AB Marketing

The Netherlands

Turkey

Arcelik-LG Klima Sanayi ve Ticaret A.S. Production

United Kingdom

LG Electronics United Kingdom Ltd. Marketing

NORTH AMERICA
Canada

LG Electronics Canada, Inc.

20 Norelco Drive, North York, Ontario M9L 2X6 Canada

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Marketing

647-253-6300 647-253-6399 Calle Orbita #36, Parque Industrial Mexicali ,Mexicali, B.C.C.P. 21600 MEXICO 52 686 561 1339 Sor Juana Ines De La Cruz No. 555 Co. San Lorenzo Tlanepantla Estado De Mexico, C.P. 54033 52 55 5321 1900 52 55 5321 1960

Mexico

LG Electronics Mexicalli S.A.DE C.V. Production

Mexico

LG Electronics Mexico S.A.DE C.V. Marketing

Mexico

LG Electronics Monterrey Mexico S.A. de C.V Production

Av. Industrias 180, Parque Industrial Pimsa, Apodaca Nuevo Leon 8196 5500 CARRETERA A MATAMOROS BRECHA E99 PARQUE INDUSTRIAL REYNOSA, REYNOSA, TAMAULIPAS, CP 88780 52 899 921 6200 10225 Willow Creek Road, San Diego CA 92131, U.S.A. 858 635 5300 1 858 805 6668

Mexico

LG Electronics Reynosa S.A.DE C.V. Production

USA

LG Electronics Mobile Research. U.S.A., L.L.C R&D

USA

Zenith Electronics Corporation of Pennsylvania Production 2000 Millbrook Drive, Lincolnshire, IL 60069, U.S.A. 1 847 941 8000 1 847 941 8877 P.O.Box 240007, 201 James Record Road, Huntsville, Alabama 35824, U.S.A. 256-772-8860 256-772-6129 1000 Sylvan Avenue Englewood Cliffs, LG Electronics Mobilecomm U.S.A.,Inc. New Jersey, U.S.A. 07632, U.S.A. Marketing 201 816 2000 201 816 0742

USA

Zenith Electronics LLC R&D

United States

LG Electronics Alabama Inc. SVC

United States

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United States

LG Electronics U.S.A., Inc. Marketing

1000 Sylvan Avenue Englewood Cliffs, New Jersey, U.S.A. 07632, U.S.A. 201 816 2000 201 816 0742

LG ELECTRONICS HOLD 22% MARKET SHARE.

PROFITS AND REVENUES

Revenue

US$ 48.976 billion (2012)[1]

Net income

US$ -423.9 million (2012)[1]

Total assets

US$ 28.356 billion (2012)[1]

Total equity

US$ 11.195 billion (2012)[1]

Employees

91,045 (2012)[1]

The logistics (Supply Chain Management) Logistics is the art and science of managing and controlling the flow of goods, energy, information, and other resources like products, services, and people, from the source of production to the marketplace. It is difficult to accomplish any marketing or manufacturing without logistical support. It involves the integration of information, transportation, inventory, warehousing, material
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handling, and packaging. The operating responsibility of logistics is the geographical repositioning of raw materials, work in process, and finished inventories where required at the lowest cost possible. Logistics Management is that part of the supply chain, which plans, implements and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers' requirements. 5Rs of Logistic followed by LG: 1. Right Time 2. Right Place 3. Right Condition 4. Right Cost 5. Right Handling

Equipments

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WAREHOUSE WITH THE EQUIPMENT.

WAREHOUSE: REFRIGERATOR AND CTV SECTION

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LG also had a big problem of after sale service in India. But LG has taken some solid steps towards improving customers perception and experience of after sales service. Because it very important in competitive market to provide the best service. L G Electronics has signed a memorandum of understanding with 23 Industrial Training Institutes to strengthen its after sales service in India. The company aims to recruit 10,000 people by the end of this year as a part of its branding strategy to focus on service and move away from discounting. L G Electronics has identified eight states with high after sales service call rates to ink the deals with the ITI. Y V Verma, director HR and management system, LG Electronics said, "The Company was trying to find a solution for effective after sales service since last two years. There is a huge need of trained manpower for the after sales service to align with the company's expansion and focus on the GSM mobiles and the personal computer segments."

1. In the initial phase the company has entered into agreements with ITIs in the states like Maharashtra, Gujarat, Delhi, Punjab, Assam, and Karnataka and is in the last leg of signing with Uttar Pradesh. 2. L G Electronics, with 1200 service centers, has already recruited 300 students and plans to beef up the number to 10,000 by the year-end.
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3. "The company has offered a scholarship to the selected students for the last six months of their training programme," 4. The company will invest Rs 8 crore (Rs 80 million) in employee development programme this year with an aim to attain a 8 per cent attrition rate. 5. The company moved away from the discounting strategy since last year and is putting thrust on the quality and service in its brand communication to position LG as a premium consumer electronics brand. 6. At the top, the Service Division in Korea reports to the Global CMO. (as mentioned in Dermots public interview in ET on Wednesday). This shows commitment that Service must be made into a marketing differentiator, and leveraged thus. 7. LG has the widest service network across the country; some estimates put it at a significant multiple of service-infrastructure from our nearest competitor. While the sale size may also be a nice multiple from nearest, it shows the company is ready to put our money where our mouth is.

8. The company has introduced a 211 service - once you register your complaint, we will call you back in 2 hours (hence 2), set up an appointment for the next convenient day for you (hence the first 1), and show up in the promised 1-hour slot (hence the second 1). If the next
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convenient day for you is the next day, thats great too. Its a disruptive action in an industry (including LG) having traditionally shied away from its service responsibilities, and thus not leveraging any mileage from it. 9. The company is promoting 211 through ATL, probably the first time after-sales service is being communicated in this fashion by any product company. You may have seen the TV commercial or heard the radio advert or seen the newspaper ad or in-shop posters, both of which revolve around prompt response. 10.The first LG-owned service centre opened in Gurgaon. (Service in India generally works through authorized service centers, in LGs case they work exclusively for LG.) A company-owned service centre tries that much harder, knows things better, and can even contribute as a revenue center.

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