LG has a high-end game plan

To boost sales of premium products; hikes ad spend

NEW DELHI: Consumer durables market leader LG Electronics is reworking its strategy for the Indian market.

The company, which is present in almost every segment of the durables space, wants to  increase its focus on the premium end of each product category.

And towards this end, it has already hiked its marketing and advertising spend to Rs 350 crore this year from Rs 150 crore in 2006 and this could go up to Rs 500 crore next year.

“We want to make LG a premium, aspirational brand. As of now, 20-22% of our sales happen in the premium end of the market but next year itself, this ratio would increase to beyond 30%. We are charting out a detailed product roadmap for this purpose,” V Ramachandran, the newly appointed director (marketing & sales), LG India, told DNA Money.

Does this mean LG would cease to be a mass brand, available across all price bands? “No, we will continue to address the masses.

But the focus on high-end products in each segment is being enhanced,” he said.

LG is likely to launch a ‘Steam Trom’ (high-end washing machine), plasma and LCD televisions, DIOS refrigerators and more split air-conditioners.

On whether the company is looking to manufacture these high-end products in India as well (currently many of these products are imported from the home market of South Korea or from neighbouring Thailand), Ramachandran said manufacturing would be considered once a product category achieves economies of scale.

He cited the example of flat-panel televisions (including LCDs) for which LG has already established a manufacturing facility.

“All frost-free refrigerators from South Korea now but this could change once we achieve scale.”

LG claims 17% value growth in January-July 2007. It is targeting sales turnover of Rs 9,500 crore in this calendar year compared with Rs 8,250 crore a year ago.