Category: GECs

With the signing of Abhishek, LG is changing its strategy by moving away from relying only on cricket. What prompted this?

I won’t say that our strategy has changed. It has been enhanced. Quite a few people expect us to exit cricket. That is not the case. We realise though that two growth engines as far as the advertising fraternity is concerned will work. One is all around cricket and the stars. The other will revolve around entertainment.

We are going with a double engine effect. Cricket delivers numbers and reaches masses. It however alienates women. It does not address that gender with the same amount of passion. Cricket is better for a consumer electronics television oriented effort for the male audience. It also partially delivers in the air conditioner category as men to some extent make decisions for this product. But when it comes to pushing mobile phones, washing machines, microwave ovens, refrigerators it does not deliver the full impact.

We will be launching a mobile phone campaign later on. That TG is very young from the late teens. Our brand has to become younger, their generation brand. We do not want to become a brand that is for an older generation just because we have been around for several years. We have learnt from what Coke, Pepsi have done over the years to remain young. This will helps us address all sections of consumers. We want to become a consolidated consumer driven brand that also encompasses mobile and IT.

Could you talk about LG’s brand positioning in the market and how it allows for differentiation?

We are differentiated from the Indian and foreign brands. LG does not get classified as either. It is easy for Indians to relate to it. The brand has a multinational lineage while delivering what Indians require. We don’t show any foreign ads.

Our communication language is not that of a foreigner. Emotions work a lot in India. The warmth and affection that a brand showers upon its target audience will be reciprocated. A brand may be ranked higher but if it is not relatable then it will not do well.

Has this positioning been tweaked in any way recently?

I would not say so. In 1997 we were represented in high end markets. We were niche. Today we sell different TV sets, refrigerators. We don’t just have SEC A+ 35+. Our target is total. So our communication must address everybody. You cannot have one for the higher end and another for the lower end.

That is what we are looking to achieve with a celebrity. The sheer rub off of that celebrity will draw in masses for a high end product. It connects mind to mind. This is where a Saurav Ganguly works.

This is also what Abhishek Bachchan will do for us. Even in Allahabad, Benares it will work. At the same time we do not use a celebrity for everything. For television sets our positioning has been around the eyes. We used an average child.

Conventional wisdom says that television watching is bad as it causes strain. Our communication showed that with LG’s eye technology it is not harmful. The position was very different in that we showed that it will give the child a world of knowledge. The child plays a crucial role in terms of buying a TV set. We looked at the TV as being an infotainment medium and not entertainment.

Speaking of television what are the plans in the television manufacturing area and how challenging are price points as in consumers waiting for prices to fall and then buying TV sets?

In this area we are targeting a 100 per cent growth for flat panel displays year on year in terms of the number of units sold.

It is going to be interesting to see how we fare with little penetration of plasma sets and high acceptability of that category. People want a TV that can be hung from the ceiling or mounted on a wall. The big size experience at home is an aspirational product.

As far as pricing points are concerned I will give the example of mobile phones. Though prices will fall nobody waits. People cannot wait to upgrade and change. People accept that gadgets will not last a lifetime. They want what is the best option as long as the brand is delivering what it promises.

The consumer has become more experimental in nature. 35-37 per cent of revenue comes from television. Electronics along with IT contribute around 48 per cent of our revenues. Appliances contribute around 36 per cent.

In 1997 when we started our group turnover was Rs 125 crores (Rs 1.25 billion). In 1999 we crossed Rs 1000 crores. Last year it was Rs 7500 crores. We are looking to touch Rs 9000 crores this year.

What is a more powerful platform – Bollywood or cricket?

They complement each other. No brand in our position can afford to ignore one or the other. The cricketing calendar is limited. We take the time for which they are played. For a lot of the months we cannot device our season vis-a-vis the cricket calendar.

But with a film star we can plan better. A cricketer is only relevant when a game is being played. His performance affects how a brand that uses him is perceived to an extent.

Brands go through highs and lows. When a cricketer fails the public reacts badly to the ad featuring the cricketer. A Bollywood campaign though cannot only be attributed to the star involved. Actors do not always play themselves. They show more versatility in negative, positive roles. It offers a wider spectrum.

In what way has the brand communication for home appliances evolved and why choose Abhishek?

Till now the home appliances communication platform had the health message. Today that platform is being adopted by a lot of me too brands.

We felt that we therefore needed to break way from that by graduating to a Health Plus objective. From here came the idea of Intello. This means that the products are technologically intelligent and futuristic.

We want to position the brand as being young, vibrant and premium. So we picked Abhishek as he portrays Indian values. He also exudes an aura of aristocracy.

The signing of Abhishek marks the start of the second phase of our marketing strategy in India. It is the marketing of a leader phase.

Which are your key products that will be given a marketing thrust this year?

Mobile phones are key for us this year. Flat panel displays are also important. Laptops will be third in importance but from the long term point of view as in 2010 laptops will be second.

ACs have experienced good growth and the market shares are high. The aim is to sustain AC growth.

To what extent is the marketing budget going to rise this year? How much of this will go towards television?

The marketing budget will increase marginally compared to last year apart from cricket due to the Champions Trophy.

We expect our involvement with cricket to improve our market impact by 25-30 per cent. Media advertising constitutes 40 per cent of the marketing spend. Out of that 40 per cent is spent on television and print.

Does LG feel that there is scope for using television in a more interactive manner to reach consumers? By interactive I mean engaging the audiences in a more active manner.

This is going to be very important. Using a celebrity is a classical way to approach that. If you could increase market share by simply putting ads then there would be no need for marketing professionals.

Wittiness and innovation play a crucial role in breaking the clutter. It is not money versus money. It is not a question of Rs 250 crores versus Rs 280 crores. The content of communication and synergies created are what the focus should be on.

LG is one of the ICC’s official partners. How has this benefited the brand over the years?

When we associated with them in 1999 it was a big transitional phase. This was because it was our first attempt at national penetration and visibility. From 1997 till 1999 we did not have any television commercials. We were not represented among the masses in a true sense. We were just represented in towns through hoardings, newspapers.

The 1999 World Cup in England was our first mass awareness programme right from our carton boxes to communication. It became known to everyone. Subsequently the two Champions Trophies and the 2003 World Cup became a mainstay in our efforts to build the brand.

The ICC association has given us the stature of a mammoth brand. This would not have been possible through regular communication. The ICC association is more to do with the LG logo as a whole rather than with simply different parts of the company like a fridge or an AC. No other medium would have given us that.

How is LG looking to leverage the Champions Trophy which will be held in India?

What is interesting is that it is coinciding with Diwali. It will be from the second week of October to the second week of November. Diwali falls somewhere in between. We have to figure out how the two communications of Diwali and cricket can work together.

There will be two objectives to be achieved simultaneously. Can they be jelled to leverage the best out of the two? This is one of our biggest marketing challenges of the year.

LG and the other ICC partners met recently. What transpired?

There are two huge events coming up. It certainly required some getting together to figure how to leverage that.

LG, Hutch, Hero Honda and Pepsi met with the ICC to discuss how we can work together to maximise opportunities.

These are four large brands that do not compete or fight with each other. We discussed avenues that can be worked on together. How successful this is time will tell.

Are below the line activities and promotions growing in importance for the brand?

Significantly. 60 per cent of our budget is spent on these kinds of activities. It is crucial because no technology will work well until it is explained to the customer. At the ground level the product must be on display. The experience that a customer goes through on ground is equally important as using mass media.

The pre purchase and post purchase experience are important towards enhancing brand value. In the long term word of mouth publicity is key. We have around 1,150 in shop demonstrators and 1,000 counters across the country. This is a force and manpower that no other competing brand has. Exhibitions play a significant role across the country. The portfolio that we have cannot be addressed with just one showroom.

One showroom can only accommodate 30 per cent of our product line. Exhibitions give us the opportunity to display more products and do something meaningful. We concentrate on training our sales people and upgrading their sales skills.

Mobile vans and road shows will play a crucial role going forward. We are also using malls as a place for display as a lot of people visit them. In-house demonstrations of products after purchase are another area of focus. Cookery classes for our microwave ovens tells the customer that LG does not just sell microwaves. It is also teaching him how to cook.

Ladies come to learn cooking and they also learn about the other products available from the range. This activity will be strengthened over the years as India cannot be addressed by only going to 10 or 20 towns. The major growth will have in those middle markets.

As a marketing tool what potential do you feel the mobile has?

All our portfolio except for laptops and mobiles are in house. You can only see someone else’s Airconditioner by going to their living room. They remain inside. A mobile phone is flashed around as a personality trait. If you sell a LG phone to a school or college student you are preparing him/her to be a future LG television, washing machine, refrigerator customer.

So we are catching them young. The mobile phone in the future will be the first entry product into the customers home. After that will come television sets and washing machines.

It becomes a brand that a person is proud of. However we are staying away from SMS and MMS communication activities on ethical grounds.

Are you happy with how global sports organisers have combated the threat of ambush marketing?

I do not think that it is a very big issue. There are enough marketing opportunities for everyone.

I do not think that media alienation for a certain period of time makes a big difference.

There are lots of major sporting events this year. So how is LG splitting up its ad spend?

We are staying away from cricket apart from the Champions Trophy.

Every brand has limited resources and cricket is no longer an inexpensive proposition. Conserving of resources for better utilisation is what optimisation is all about. We will be doing activities around the Fifa World Cup though.

We are yet to roll out ideas at the storyboard level. This activity will be in select markets like Goa, West Bengal.

How do you work with your creative agencies?

It is a partnership right from the concept generation level to how it shapes out to seeing it delivered to the marketplace. We even address the media together.

The competitive business environment leaves little room for chance. It has to be a team effort.