6,50,000 Villages 850 mn consumers

Half of India’s Gross domestic GDP

Growing Size of the Consumer Durables Market,

Increasing Demand, Vast opportunities for MNCs

India is set to become 5th largest Consumer

Durable market & 3rd largest Television Industry

Better networking among rural consumers and their

tendency to proactively seek information via multitude

sources

Wider reach of media and telecommunication services has provided information to India’s

rural consumers and is influencing their purchase

decisions

Discretionary spending of a typical rural Indian household

rose from Rs.14,000 in 2004-05 to Rs.24,000 in 2009-10, growing

at about 11% every year, and faster than the inflation rate of

nearly 6% a year over that period

Rural consumers are particularly aspiring or striving to purchase branded, high quality products.

(3rd Edition of Accenture Research)

Positive Initiatives taken by Governments after

Liberalization period : Boost to manufacturing, Rural

Electrification

LG demonstrated that Rural Customers are not just price conscious, but are actually value conscious and are ready to pay reasonable premium if organization deliver solution to their long-standing problem.

Sampoorna CTV

The LG way of penetrating Rural Markets in India

Product Innovation

LG believed in holding the interest of its customers by bringing out new products regularly. In its first 03 year of operations(1998-2001), it launched 70 models across arange of products. During 2001-03, it launched 45 new models across its entire product range. LG started customized Consumer Product for Indian markets. Before developing products, LG conducted market research to ensure that its products met local requirements...

Price

Initially, when LG entered the Indian market, its products were priced high. This was because LG had to import products in the absence of a manufacturing facility in India. Thus, its products were priced as high as Japanese products. According to some analysts, this strategy was adopted to make local consumers feel that LG products were by no means inferior to Japanese products in performance or in quality. However, in 1998, LG launched 'Sampoorna,' a low priced TVaimed at rural consumers to become Mass Market Brand

‘Sampoorna’ : Complete solution to the needs of Rural Market.

The LG way of penetrating Rural Markets in India

Distribution

Soon after its entry into India, LG realized that it needed to be innovative to capture the market.LG expanded throughout the country to remoteTowns, rural areas and semi-urbanmarkets. It sent vans across the country, covering a distance of 5000 km every month, to increase brand awareness among the trade and the customers.

Promotion

Of all the elements of marketing mix, LG seemed to have put more emphasis on promotion and advertising. In 2002, it spent around 1.3 billion on advertising. An ad agency which handled the account of one of the LG's rivals, commented: "Communication creates a mind space among the consumers and LG has occupied that fairly well.“ Unlike many Indian brands which advertised seasonally i.e., (two – three months of the festival season), LG advertised all round the year. According to analysts, this resulted in high brand recall and successful positioning. In all the communications of LG, the USP remained the same for individual products. For refrigerators, it was "preserve nutrition;" for CTVs, it was "less strain on eyes;" for air conditioners, it was "healthy ambience and air quality;" for washing machines it was "fabric care;" and for microwave ovens it was "healthy cooking’’.

New Cheaper Products Increased Reach

Making the product Available & Affordable – Secrets of Conquering Rural Market

• Awareness• Acceptability

• Affordable• Available

65 Remote area offices, 2600 Dealerships & Service Centres, tied up with OEM

Sampoorna – INR 14,400

2,000 more than existing competitor

products

BTL Promotions‘LG Ki Dua, All

the Best’ to Indian Cricket

Team , Word of Mouth

Hindi & Regional Menu (21 lac spent) Gaming in TV (Cricket WC)

Localizing & Creating awareness for the mass – Secrets of Conquering Rural Market

Sold 1 lakh 20 inch Sampoorna in 1998-99. (All In villages of population around 10,000)

20 % overall revenue came from Rural Markets

By 1999, 12% of LG’s 950 cr turnover came from ‘Sampoorna’.

Increased Customer Loyalty & Brand positioning through Direct Engagement

Future Growth Opportunities

Key Areas to Look For:

Emerging e-commerce sector & growing Internet users in India

Expanding Mobile Advertising industry

Domestic outlets which appeals to growing Youth & Middle Age customer segments

Rapid urbanization & ease of financing

Omni channel distribution systems & IT

Thank You

Prepared & Presented By,

Group-01

Kashyap Shah

Anubhuti Gupta

Manali Kukreja