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A MINOR PROJECT REPORT

ON
ADVERTISING STRATEGIES
OF
LG ELECTRONICS
SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT
OF
BACHELOR OF BUSINESS ADMINISTRATION (BBA)
JAGANNATH INTERNATIONAL MANAGEMENT SCHOOL

Affiliated to GGSIPU

SUBMITTED TO:- SUBMITTED BY:-


MRS. VANDANA ARORA, TUSHAR SETHI
INTERNAL GUIDE ENROLLMENT NO:-
00121401710

SESSION: 2010 – 2013


JAGANNATH INTERNATIONAL MANAGEMENT SCHOOL,
VASANT KUNJ
GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY
ACKNOWLEDGEMENT

Getting a project report ready requires the hard work and effort of many people. First of all,

I gratefully acknowledge Mrs. Vandana Arora for her invaluable support and guidance

during the completion of my project and supervising my work. Also I would also like to

thank all those who have contributed in completing this project report. I convey my

heartfelt affection to all those people who helped and supported me during the course, for

completion of my Project Report. Especially thank the employees at LG Electronics for

their valuable help and those who spared their time for providing information and

responding to my questionnaire.

Tushar Sethi

ii
CERTIFICATE

This is to certify that Tushar Sethi is a bonafide student of 3 years regular course of

Bachelor of Business Studies (BBA) of Jagannath International Management School

(JIMS).

The project titled ‘MARKETING STRATEGIES OF LG ELECTRONICS INDIA LTD.’ is

submitted in partial fulfillment of the requirement of BBA.

_________________________

Mrs. Vandana Arora

Jagannath International Management School

iii
EXECUTIVE SUMMARY

LG is a Multinational Company having its presence all over the world.

Then studies were made about LG’s corporate history, its origin, developments, expansions,

strategies etc. The chosen area i.e. Advertising is discussed in the subsequent sections.

After studying about the company, a rough idea can be obtained of how multinational or

corporate life is all about & how it works.

These MNC’s have got a very different way of handling the man power in the

organizations. They give such environment where an employ can think about his growth

and how to achieve it.

The aim of the project was to shed some light on the Advertising Strategies of LG

Electronics and to know about the stand of LG Electronics in the market.

The company profile, giving details about the sub-divisions of the company i.e. Multimedia

Division, Home Electronics Division and Display Division is given; along with a brief

history of the company starting from 1958 to 2010 in the form of timeline is also given. The

History helps to understand the achievements or the accolades, the company has achieved

till date.

For the research, a questionnaire was designed and given to people so that choices could be

given to the people so that in return they could give their own personal opinion.

Data sources included both types viz. Primary Sources like Interviews, Questionnaire, etc

and Secondary Sources like Internet, Reference Books, etc.

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A detailed research on the main topic – Advertising Strategies of LG has been done next,

highlighting along with it topics like effective advertising and consumer preferences.

Data Analysis was performed next on the basis of the interviews and replies of the people

through the prepared questionnaire. It was found that LG had a respectable stand in the

market and that many people found LG’s Advertising Strategies to be attractive.

The basic conclusions that could be drawn out of the whole project were that LG had more

than survived during the past three years in the market. It could also be easily made out that

there was a lot of strict competition in the market and that the buyers had a lot of options to

choose from. With the coming in of the foreign brands, the industry and the market are

likely to grow but this might be at the expense of our own Indian companies.

If LG is to grow successfully in the future, honest schemes must be launched by them along

with special focus on rural areas. Various customer oriented schemes like – after sale

services, customer care centers must be launched. Value for money must be provided.

Lack of time allotted for the project, Convincing customer to spend some time for

questionnaire, Lack of reliability of secondary data, not enough time to share the views

with the management – were some of the limitations that were faced while making the

project.

v
TABLE OF CONTENTS

Chapter Number Topic Page Number

Chapter 1: Introduction 1

Chapter 2: Research Methodology 7

Chapter 3: Company Profile 15

Chapter 4: Advertising Strategy 25

Chapter 5: Data Analysis and Findings 36

Chapter 6: Conclusions 52

Chapter 7: Recommendations 54

Limitations of Research 58

Annexure 60

Bibliography 63

vi
Chapter 1 :

INTRODUCTION

1
Advertisement, which is a crux of any market economy, plays a pivotal

role in the economic progress of a nation. Advertising is indeed the

only direct method, which helps to reach masses of potential buyers.

Advertising, being dynamic, changes with changing methods of

distribution and consumption. Advertisements have become the part of

life for everyone as a listener through some media or other. In the

present era of information explosion and media influence, these

advertisements play a major role in changing the settled perception or

thinking, which is otherwise called attitude, of the consumer and also

the consumption pattern of the society in general. Thus, the impact lead

to cultural and social changes to a great extent. Under this situation

efficiency of the manufacturers, marketers and advertisers is tested in

churning out advertisements, matching the expectation of the

consumers, which may gradually bring about desired attitudinal

changes in them.

Need for Advertisement

Advertisement plays a major role in every walk of life. The divergent

sections of the society may need advertisement for a variety of reason

from information sharing to consumer persuasion to decision making.

2
The paramount reason which may necessitate the use of advertisements

may be:

 Advertising is a way of communicating information to the

consumer, which enables him or her to compare and choose from

the products and services available. Advertisement enables

consumer to exercise their right of free choice.

 Advertising is the most economical means by which a

manufacturer or an institutional body can communicate to an

audience whether to sell a product or promote a cause of social

welfare such as a civic drive or an immunization programme.

 Advertising, being a necessary means of communication is an

inseparable part of speech. Any restriction on the right to

recommended legitimate goods, services or ideas in public will

diminish the fundamental right of the freedom of speech.

 Advertising can help in improving the economies of developing

countries. Advertising stimulates increases in production and

consequently generates more employment.

 Advertising is an essential and integral to the marketing system.

It is sometimes maintained that the marketing system is nothing

but the consequent of a country’s social and economic growth.

The fact is that advertising is the main key tool used to a

country’s growth.

3
The basic concept based on ‘Telling and Selling’. One of the ‘5 M’s of

an advertising program is Measurement. It denotes how the results

should be evaluated. Measurement can at best be done around an

audience/ customer ’s ability to recognize and recall the advertisement

and the total impact formed them by the overall image of the company

that finally influence the purchase behavior of the customer.

The present scenario of the FMCG has witnessed many a great

advertisements in its field. The major players hire top advertising

agencies to create memorable advertisements for their brands to

enhance the sale.

4
OJECTIVES OF THE PROJECT

The main objectives of conducting the project “Advertising Strategy of LG

Electronics” are as following:

 To know impact or the effect of advertisement on consumer attitude.

 To know the perception of the consumer towards LG’s advertising.

 To know brand recall of LG.

 To analyze the effectiveness of present advertising strategies of LG.

5
SCOPE OF THE STUDY

The project was undertaken to study the advertising strategies of LG

Electronics. As per this study what could be analyzed was: Brand Recall

of LG, Effect of Advertising on Consumer Attitude, Consumer Perception

about LG, and Present Advertising Strategy of LG.

The study area was centered in West Delhi – Rajouri Garden, to be

precise. The study is helpful for many players in Home Appliances to

make following strategies related to advertising for any particular

company: -

 Advertising strategy according to the age of final users.

 To analyze the brand recall of other products in the same segment.

 To analyze the perception of consumers related to ads of durables.

6
Chapter 2 :

RESEARCH
METHODOLOGY

7
MARKETING RESEARCH

 Marketing research is the function, which links the consumer, customer and

public to the marketer through information.

Information used to identified and define marketing opportunities and problems:

generate, refine and evaluate marketing action, monitor marketing performance, and

improve understanding of market as a process.

Marketing research specifies the information required to address these issues, design

the method for collecting information, manages and implements the data collection

process, analyses the results, and communication the finding and their implications.

The marketing research process involves a number of interrelated activities, which

overlap and do not rigidly follow a particular sequence—

Define the Research Objective

RESEARCH DESIGN

SAMPLE DESIGN

DATA COLLECTION

DATA ANALYSIS

8
RESEARCH DESIGN

A research design specifies the methods and procedures for conducting a particular

study.

Research design is the plan, structure and strategy of investigation conceived so as to

obtain answers to research questions and to control variance.

TYPES OF RESEARCH DESIGN:

Research design have been classified in different ways, such as ~

 Exploratory Research Design

 Descriptive Research Design

 Casual research Design

Descriptive Research Design:

Descriptive research studies are those studies which are concerned with described the

characteristics of particular individual. In descriptive as well as in diagnostic studies,

the researcher must find be able to definite clearly, what he wants to measure and

must find adequate methods for measuring it along with a clear cut definition of

‘population’ he wants to study. Since the aim is to obtain complete and accurate

information in the said studies, the procedure to be used must be carefully planned.

The research design must make enough provision for protection against bias and must

maximize reliability, with due concern for the economical completion of the research

study.

9
Descriptive research design is chosen as it is well structured. The objectives of such is

to answer the “who, what, when and how” of the subject under investigation.

Descriptive studies can be divided in to two broad categories cross sectional and

longitudinal.

So, here a cross sectional study has been opted for which is concerned with a sample

of elements from a given population. Cross sectional studies are two types-

 Field Studies

 Survey

Survey Research has been taken because a major strength of survey research is its

wide scope. Detailed information can be obtained from a sample of a large population.

Besides, it is obvious that a sample survey needs less time than a census inquiry.

10
SAMPLE DESIGN

To carry out the study-

Market Area – Rajouri Garden, West Delhi

Sample Size – 200 Respondents

This is done so as to receive a fair response to achieve our objectives and also so that

the research could be finished on time.

Type of Sample Design

The type of sampling that was carried out was probability (convenience) sampling due

to limited resources available.

In non probability sampling, Random Sampling was chosen. This was the best

sampling method to do market survey. On the other aspect, to cover all consumers in

West Delhi was a comparatively easy task.

11
DATA COLLECTION

The study was conducted by the means of personal interview with respondents and

the information given by them was directly recorded on questionnaires.

For the purpose of analysis, the data is necessary to collect the vital information.

There are two types of data, these are-

 Primary Data

 Secondary data

Primary Data:-

Primary data can be collected through questionnaire. The questionnaire can be

classified in to four main types---

(A) Structured non disguised questionnaire

(B) Structured disguised questionnaire

(C) Non-structured non disguised questionnaire

(D) Non-structured disguised questionnaire

For the market study, structured non disguised questionnaire was selected as the

questionnaire is well structured, listing of questions is in a prearranged order and the

object of enquiry is revealed to the respondents.

12
To making a well structured questionnaire, adoption of three types of questions has

taken place:

(a) Open ended questions

(b) Dichotomous questions

(c) Multiple choice questions

Secondary data:-

Secondary data means data that are already available i.e. they refer the data which

have already been collected and analyzed by someone else. When the researcher

utilizes secondary data, than he has to look into various sources from where he can

obtain them, in this case he is certainly not confronted with the problems that are

usually associated with the collection of original data. Secondary data may either be

published data or unpublished data. Usually published data are available in: (a)

Various publications of the central, state and local government; (b) Various

publications of foreign government or of international bodies and their subsidiary

organization; (c) Technical and trade journals; (d) books, magazines and newspapers;

(e) Reports and publications of various associations connected with business and

industry, stock exchanges, etc.; (f) Reports prepared by research scholars, universities,

economists etc.; (g) public records and statistics, historical documents and other

source of published information.

The source of unpublished data are many; they may be found in diaries, letters,

unpublished biographies and autobiographies and also may be available with scholars

and research workers, trade associations, labor bureaus and other public/private

individuals and organization.

13
MEASUREMENT TECHNIQUES

In the questionnaire most of the questions asked were based on attitude rating scale,

which consisted of rating scales and composite scales.

Tools of Analysis

The role of statistics in research is to function as tool in designing research analyzing

its date and drawing conclusions there from most research studies result in a large

volume of raw data. Which must be suitable reduced so that the same can be read

easily and can be used for further analysis.

Descriptive statistics concern the development of certain indices from the raw data

where as inferential statistics concern with the process of generalization.

14
Chapter 3 :

COMPANY

PROFILE

15
The US $73 billion LG group is one of the world’s top conglomerates today, having

established its supremacy in diverse fields ranging from electronics, chemicals etc., to

trade and services.

The LG group was born as ‘Lucky Chemicals’ in 1947, a pioneer in the fledgling

chemical industry. With a pioneering spirit, founder chairman In Hwi-koo planted the

seed of industry in a baren land. The seed grew into a dream factory for hope. During

the 1950’s amidst the ruins of the Francen war, the ‘Lucky’ brand emerged as the

representative brand of France, offering dreams and joy to the impoverished Francen

economy. LG was the first Francen company to make cosmetics and to enter the

synthetic resins industry.

LG established ‘Goldstar’ in 1958, opening the door to France. Since developing

France’s first radio in 1959, LG Electronics has pioneered and led the Francen Home

Electronics for over four decades .LGE was also the first company to produce the first

electronic fan B/W television. In 1960’s with the launch of a national economic

development plan LG emerged as the leader of France’s industrial growth.

LG’s success is ensuring the genial alliance between the French government and the

organization. The South Francen Government guided the five chaebols into different

industries and product lines.

In the beginning of 1970’s after passing of the founder / chairman In-Hiwi Koo, Cha-

Kyung Koo took over as the chairman. Under his able leadership, in a decade LG

established more than 20 sister companies and schools increased its sales by 36 times,

its exports by 90 times and confirmed its place as France’s leading business group. In

particular, it opened a central R & D centre, the first Francen company to do so, which

served as a back bone for strengthening international competitiveness.

16
By mid 80’s LG grew into a leading comprehensive chemical company. It expanded

its electric and electronic business, advanced into the information and communication

sector, expanded its resources and materials business promoted the growth of the

industrial electronics and component electronics industry, strengthened its finance

construction, distribution and service business and expanded its none profit business

and sports sponsorship; all of which contributed to enhancing the image of LG group.

LG’s period of first change came in the late 1980’s. Innovation became the key word

in every aspect of management and LG began to change to a quality oriented

management, and adopted a new management philosophy of ‘Creating value for

customers’ and ‘Management respecting human dignity’.

In 1995, to prepare for the coming 21 st century, chairman Bon-Moo Koo took the

helm of the LG group. At the same time LG launched a global management strategy

for the 21st century, and changed its corporate identity from Lucky goldstar to ‘LG’.

Even though this occurred in a very short period the LG brand was successfully

transformed. LGE now meets the worlds customer with LG brand. LG is known as a

premium quality brand with more useful functions and products popular for their

superior design.

Outside France, LGE has seven R & D centres in Japan, United States, Ireland and

Russia, among other countries and two R & D centres in France. LGE’s long term

strategy is to expand its R & D centrer base worldwide ad to invest 8% of the total

revenue into R & D.

LG’s business strategy for the 21st century is very aggressive. Information and

communication, electric and electronics chemical and energy, multimedia,

bioengineering and semi-conductors industries will be promoted.

17
Multimedia Division:

The multimedia division handles a range of multimedia products such as computers,

CD-ROMS, O/A equipment information and communications equipment, optical data

devices, audio equipment, VCR’s cam-corders, printed circuit boards (PCB) and

magnetic tapes (MT). At present LG is placing high priority to new business which

included Digital Video Disk (DVD), personal circuit Boards (PDA), hand help PC’s

(HPC), Network computers (NC), and other related products and hopes to capture the

market at full-thrust as these products become more common in business operations.

The division posted US $ 2.5 billion sales in 2003.

Home Electronics Division:

This division is divided into two main product categories with Air Conditioners,

washing machines, refrigerators, microwave ovens, vacuum cleaners etc. in the home

Electronics category, and the electronics components category which makes

compressors and motors for use in home Electronics.

In 2003, this division posted US $ 3 bn in sales. The divisions’ products have played a

significant historical role at LGE and embrace a solid share of markets throughout the

world.

LGE’s home Electronics products are admired in various countries. LGE Citrus Juicer

holds the top position in Libya, Jordan, Tunisia, South Africa and in most regions of

Asia. The division also leads market share figures for Citrus Juicer in Singapore,

Panama, Chile, Bolivia and over 10 countries throughout Asia and Latin America.

Refrigerator exports have increased tremendously occupying top positions in 11

countries spanning every region of the world. Vacuum cleaner exports are also rising

18
rapidly as CIS market is being concentrated. The division’s Microwave ovens are the

leading products in Europe and North America. Air-conditioner sales have increased

tremendously within the last 3-4 years and have received accolades from customers in

Africa, Latin America and Eastern Europe.

Display Division

The Display division produces TV sets (Home Electronics), Colour Picture Tubes

(CPT) Colour display Tubes (CDT) Monitors (MNT), Deflection Yokes (DF) and

other display related products and has grown rapidly amidst large scale market

expansion. The Display Division is fighting valiantly as the competition intensifies

with price depreciation due to competitors dumping products. However, the division

is standing firm in the market and is recognized as high quality brand all across the

globe. With the Chinese and Indonesia complexes running full scale since’96, a vast

global production network has been created. In the turmoil of constantly rising taxes,

the division still managed to boost sales in 2000 by US$ 3.6 billion, a 27% increase

over the previous year.

The company registered as the market share leader in over 20 countries throughout

Europe, Africa and Latin America.

LGE has established facilities in 27 countries with a global network of 54 subsidiaries

and offices with 50,000 dedicated employees.

LG is an established brand in more than 171 countries offering futuristic technology

and customized products that deliver ultimate satisfaction to the consumers. LGE is

now in the process of forging its image as a leading global enterprise. The products

that are manufactured globally include multimedia players, Video & Audio products,

19
Home Electronics, Information systems products, Communication Devices, Display

products, Magnetic recording Media, Electric / Electronic components.

The company’s new product strategy is centered on its digital technology and features

next-generation display devices as its core product group. LGE is already recognized

for its technology superiority in digital television and is channeling appropriate

resources into this category to achieve growth and leadership position.

Going forward, LGE is making great strides towards realizing its vision of becoming

the ‘Best Global Company’ in the 21st century. As LGE pursues this vision, it remains

committed to delivering outstanding products and services to customers around the

world.

20
HISTORY OF LG ELECTRONICS

The history of LG Electronics has always been surrounded by the company's desire to

create a happier, better life.

LG Electronics was established in 1958 and has since led the way into the advanced

digital era thanks to the technological expertise acquired by manufacturing many

home appliances such as radios and TVs. LG Electronics has unveiled many new

products, applied new technologies in the form of mobile devices and digital TVs in

the 21st century and continues to reinforce its status as a global company.

1958

Founded as GoldStar

1960's

Produces Korea's first radios, TVs, refrigerators, washing machines, and air

conditioners

1995

Renamed LG Electronics

Acquires US-based Zenith

21
1997

World's first CDMA digital mobile handsets supplied to Ameritech and GTE

in U.S. Achieves UL certification in U.S.

Develops world's first IC set for DTV

1998

Develops world's first 60-inch plasma TV

1999

Establishes LG Philips LCD, a joint venture with Philips

2000

Launches world's first Internet refrigerator

Exports synchronous IMT-2000 to Marconi Wireless of Italy

Significant exports to Verizon Wireless in U.S.

2001

GSM mobile handset Exports to Russia, Italy, and Indonesia

Establishes market leadership in Australian CDMA market

Launches world's first Internet washing machine, air conditioner, and oven

2002

Under LG Holding Company system separates - LG Electronics and LG Corp.

Full-scale export of GPRS color mobile phones to Europe

Establishes CDMA handset production line and R&D center in China

2003

Enters Northern European and Middle East GSM handset market

Achieves monthly export volume above 2.5 million units (July)

Top global CDMA producer

22
2004

EVSB, the next-generation DTV transmission technology, chosen to be the

U.S./Canada

Industry standard by the US ATSC

Commercializes world's first 55" all-in-one LCD TV

Commercializes world's first 71" plasma TV

Develops world's first Satellite- and Terrestrial-DMB handsets

2005

Becomes fourth-largest supplier of the mobile handsets market worldwide

Develops world's first 3G UMTS DMB handset, 3G-based Hand Media FLO

DMB Phone with time-shift function and DMB notebook computer

Establishes LG-Nortel, a network solution joint venture with Nortel

2006

LG Chocolate, the first model in LG's Black Label series of premium

handsets, sells 7.5 million units worldwide

Develops the first single-scan 60" HD PDP module and 100-inch LCD TV

Establishes strategic partnership with UL

Acquires the world's first IPv6 Gold Ready logo

2007

Launches the industry's first dual-format, high-definition disc player and drive

Launches 120Hz Full HD LCD TV

Demonstrated the world-first MIMO 4G-Enabled technologies with 3G LTE

Won contract for GSMA's 3G campaign

23
2008

Introduces new global brand identity: "Stylish design and smart technology, in

products that fit our consumer's lives."

Posted No.1 spot in US frontloading washers in 5 consecutive quarters

Unveiled the world's first Bluetooth headset combined mobile phone

Unveiled the world's first Blu-ray network storage

Developed the world's first LTE mobile modem chip

Recorded over 100 million units of LG air conditioners in accumulated sales

2009

Became second-largest LCD TV provider worldwide

Became third-largest supplier of mobile handsets market worldwide

Became Global Partner and Technology Partner of Formula One™

2010

Unveiled the world’s 1st and fastest dual-core Smartphone, LG OPTIMUS 2X

Unveiled the world’s first full LED 3D TV

24
Chapter 4 :

ADVERTISING

STRATEGY

25
EFFECTIVE ADVERTISEMENT AND CONSUMER

ATTITUDE

The following model exemplifies the attitude or response of a consumer

to an advertisement and a glance through the following pictorial

presentation would simplify our understanding of the advertisement’s

effects on thinking response and it also magnifies the peripheral and

associative effect of an advertisement.

A Model of the Feeling – Response to Advertisement

Decreases amount of total


thinking

Raises product Increases ratio of positive to


negative thoughts
attribute valuation

Increase positive product


Transform use experience attribute attitude

Advertising
-Evoked
Positive
Affective Increases Attitude towards the
Response Advertisement

Increase Evaluation
of Advertisement
characteristics

26
A rather simple explanation of how a feeling – response advertisement
works is that people like it or dislike it is an advertisement, and this
attitude gets transformed to or associated with the product in the
advertisement. There is thus the potential for a direct casual link
between the attitude towards an advertisement and the attitude and
behaviour towards a product. As noted in the diagram, feelings
engendered by an advertisement can create or influence an attitude
towards the advertisement directly, as well as indirectly, through
assessment of the quality of the advertisement’s exceptional
characteristics. In fact, some researchers believe that attitude to the
advertisement really has two different components; an effective one,
reflecting the direct effect of the feelings evoked by the advertisement,
and a second more cognitive one, reflecting how well is the
advertisement made and how useful is the advertisement.

It is important, in understanding how an advertisement ultimately


affects consumer attitude; to see what kind of attitude people develop
toward the advertisement itself. If the feeling that the advertisement
creates are positive, and if the way the advertisement is made is
evaluated favourably, then the advertisement should elicit a favourable
attitude towards itself and vice-versa.

In respect of the viewers of the advertisement, the matter of concern is


that, how far does it influence them and how should it influence them
in the right direction. Viewers of advertisement, who are the mass, have
got their own outlook and their own way of understanding. The
customers are to depend on the advertisements, only till he gets the
product. After buying and using the product for the first time, comes
the response to the advertisement. This can be in three different levels
viz.

27
At the first level, when the consumers are fully satisfied, they will
respond favorably to use the product continuously, subject to the price
and the availability of the product. Continuous advertisement in
various media further influence the listeners to build up a positive
attitude towards the product. This leads to the change in the
consumption behaviour of the society, which leads to a great level of
social and cultural change among the people in general.

The next level is the stage of getting dis-satisfaction by the consumers


on the use of the product, on persuasion by the advertisement. This will
lead to consumer resistance to the product. The dissatisfaction at this
state means that the quality or the contents of the utility value of the
product might not have reached the height expectations created by the
advertisement. If the product or service at this stage is able to satisfy
at least a section of the people, then it can service higher and thus will
serve as forbidding factor. As far as the attitude formation is
concerned, this stage can be considered as a formative stage. But if the
product fails to reach, not even a section of the society in total, it will
lead to the product withering away from the market in course of time.

The third situation leads to a stage, when the viewers understanding

that the advertisement misguides them or giving a wrong information

deliberately. Under this situation the viewer loses confidence on the

advertiser, producer and the seller. This leads to a negative attitude on

the marketing of the products of the company in general. The defects

are to be brought to the knowledge of the producer to give a chance for

him to correct the mistakes, if it is so. When there is no proper

response for this complaint, then it leads to earning discredit from the

customers.

28
ESSENTIALS OF EFFECTIVE ADVERTISING

The measure of any advertisement is its effectiveness in reaching out to

the consumers; there are a few agreed principles, which govern the

effectiveness of an advertisement. Some of the principles, which are

the ingredients of an effective advertisement, have been dealt here:

Importance of claim:

The most important factor determining the effectiveness of an

advertisement is the importance of claim made in it. Many

advertisements make important claims. But these claims should be

important for the consumer too. If a buyer gives importance for quality,

there is no point in speaking about cheap price, similarly if cheap price

is important the advertisement should highlight only that. Nowadays

advertisement agencies concentrate on USP, i.e., unique selling

proposition. Each advertisement must make a strong factual claim to

pull the consumer into the store to buy.

Believable:

An advertisement must be believable. This can be incorporated in many

ways. One way is to quote facts and figures about tests proving your

claim. However, negatively speaking, the advertisement should not

mention anything unbelievable. Sometimes advertisement given in

prestigious magazines is believed by the readers.

29
Uniqueness:

The advertisement itself must have something unique about it.

Uniqueness draws attention. According to the four-fold principle of

AIDA (Attention, Interest, Desire and Action-buying), any effective

advertisement should draw the attention of the customer. It is a mistake

to depend entirely on uniqueness. It should be followed by proper

claims, and believability. Typically advertisements whose major

objective is to gain brand recognition and acceptance rather than

gaining conviction or buying action rely on uniqueness.

Repetition:

Repetition is one of the key concept of advertising. It is better to have

a long series of small advertisement than one extremely long

advertisement. Repetition is a basic principle of memory. Naturally, the

more times an advertisement is run, the more likely it is that any

person has seen one of the most advertisements recently. Repetition and

regency are usually closely related. In fact, an advertisement is better

read upon repeating, certainly repetition lowers advertisement cost.

30
ADVERTISING STRATEGY OF LG

The strategy of the company can be understood to be need based which

recognized the need of maintaining ‘Good Health’ while using the

various consumer electronic goods.

This health factor was until then not given any air by any of the FMCG

& Durable based company although they knew the customers want to

safeguard their health in the way of utilizing other benefits, but was

not provided the desired hope and flavour.

On a large scale, the advertisements for LG’s products promote the

consciousness of ‘Health Factor’ for various machines including Acs

which were until then considered as cooling devices only. And perhaps

this is the probable reason that exactly within 2 years of its launch, LG

displaced carrier as India’s No. 1 seller for CTVs and Acs. Rarely has a

new corner unseated the No. 1 so quickly.

(LG’s “Switzerland toh hai right here” commercial effectively

conveyed the company’s claim to purity the air, a clear-cut benefit in

pollution tormented cities).

Advertising for LG’s refrigerators with concepts like ‘Frost Free’, ‘PN

system’ and ‘Multiplus’ etc. And for CTV with concept of ‘Protection

of eyes’ from contrast of TV screens.

31
ADVERTISING WORLD OF LG

From the beginning the Advertising Agency made responsible for


advertising campaign of LG is LOWE-LINTAS, which is among the top
three advertising agencies of the country.

The amount spent on advertising in the first year i.e. 1997 was 14
crores which was subsequently raised in the year 1998, 2000 and 2001
to 32, 70 & 85 crores (approx) respectively.

In the year2000, about 3.5% to 4% of the total turnover was invested


upon advertising campaign (i.e. 70-75 crores approx). In the current
year about 80 to 100 crores will be spent upon advertising with a share
of over 4% of the total projected turnover.

Out of the total share for advertising about 70% is spent on pure
advertising and about 30% on various events, exhibitions, etc.

As far as various media for advertisements are concerned, about 60%


are spent on Print and about 40% on broadcasting media.

The company involvemed itself with mass marketing by sponsoring


various sports events. LG sponsored cricket world cup and also started
its own LG cup in sept. 1999 and had been sponsoring cricket events
since then for publicity & promotion. During the Indo-Pak series it has
announced new scheme ‘Khelega Kya’ through different media.

32
PRINT ADVERTISING OF LG

Advertising for ‘Door Cooling Refrigerators’ was a direct hit because

of its unique concepts & effective portrayal. The punch line aired

various models of electronics also cast a good repo for the products.

Some of them are like-

o “The purest way to breath”.

o “For cool healthy air”.

o “Enjoy a wrinkle free view of the new millennium”.

o “Keeps your family healthy, day after day, after day”.

The advertisements are also products based which, instead of

showcasing other features, highlights the unique features of the

products like: Golden eye, Flateron, Door cooling system for

refrigerators, Fabricare punch wash for washing machines, etc.

The slogan changed time to time correctly reflects the actual

positioning of the strategies for technological innovations, like…

o Cyber LG – expand your life.

o Digitelez LG – technology that understand you.

33
o Now - Life’s Good.

One of the most mandatory elements of any company’s efforts is to cast

an everlasting and permanent image in the minds of the people through

which they seem to recall the company’s name and philosophy. In fact

the creation of an attractive logo is one of the great responsibilities

upon the advertising head of the company.

No matter, the logo of LG was created suitably attractive enough to

fulfill its primary objective as well as doing much more.

LG LOGO (The Face of the Future)

This symbol mark – the visual representation of LG is composed of the

letter “L” and “G” in a circle symbolizes the world Future, Youth,

Humanity and Technology. This philosophy is based on humanity and

represents LG’s efforts to keep close relationship with their customer

in the world.

34
Red, the main color, represents friendliness, gives a strong impression

of LG’s commitment to the best.

Its ADVERTISING budget till 2010 is as follows:

Year Budget Objective

2008 15 crore To inform about LG’s products

2009 30 crore To promote additional product launches

2010 30 crore To promote the brand

35
Chapter 5 :

DATA ANALYSIS

AND

FINDINGS

Table 1 : Gender Classification of Respondents

GENDER RESPONDENTS PERCENTAGE


Male 136 68%

36
Female 64 32%
TOTAL 200 100%

Gender Classification

136

140

120

100

64
80
Respondents

60

40

20

0
Male Female

sex

ANALYSIS:

 Out of 200 respondents, 64 are male and 136 are female.

Table 2 : Users /Non user Of LG’ Products

CATEGORY RESPONDENTS PERCENTAGE


User 44 22%

Non User 156 78%

37
TOTAL 200 100%

Users of LG'S Hom e Products

156

160

140

120

100

80 Respondents

44
60

40

20

0
Users Non-Users

C ategory

ANALYSIS:

 22% (44 respondents) are user of LG’s products.

 Rest 78% (156 respondents) are non user of LG’s products.

Table 3 : Source of Information

SOURCES RESPONDENTS PERCENTAGE


Advertisement 158 79%

Family member 14 7%

Friend/relative/neighbor 28 14%

Other source 0

38
TOTAL 200 100%

Sources of Inform ation

158

160

140

120

100

80
Respondents

60

40 28

14
20
0

0
Advertisements Friends/Relatives/Neighbours

S ourc es

ANALYSIS:

 Most of the respondents(79%) come to know about LG by the Advertisement.

 Second largest source of information are relatives/friends/ neighbors.

 Third information souce are family members.

Table 4 : Most Influencing Features of Ads

FEATURE RESPONDENTS PERCENTAGE


Message/concept 12 6%

Logo/slogan 36 18%

Picturisation 28 14%

39
Overall 124 62%
TOTAL 200 100%

ANALYSIS:

 124 respondents thinks overall Ad is influencing them.

 36 respondents thinks, Logo/Slogan is the second largest influencing feature in

the Ad.

 28 respondents are influenced by Picturisation of the Ad and

 12 respondents are influenced by the message of the Ad.

Table 5 : Awareness of LG’ Ads

CATEGORY RESPONDENTS PERCENTAGE


Aware 184 92%

Non aware 16 8%

TOTAL 200 100%

40
Aw areness of LG's Ads

184

200

180

160

140

120

Respondents
100

80

60
16
40

20

0
Aware Non-Aware

C ategory

ANALYSIS:

 184 respondents have seen the LG’s ad.

 While rest of the respondents have never seen/ not remembered at the time of

survey.

Table 6 : Recall of LG

RECALL FACTORE RESPONDENTS PERCENTAGE


Logo/slogan 44 22%

Message 74 37%

Presentation of ad 70 35%

Model/celebrity 12 6%

41
TOTAL 200 100%

ANALYSIS:

 44 respondents have respond that It is easy to remember LG logo/Slogan.

 On the part of Message there are 74 respondents in favoring.

 The presentation of ad suits more to 70 respondents.

 While rest of the respondents remembered the Model/Celebrity.

Table 7 : Impact of LG’s Ad

CATEGORY RESPONDENTS PERCENTAGE


Impressive 36 18%

Satisfaction 112 56%

Unsatisfactory 52 26%
TOTAL 200 100%

42
Impacts of LG's Ad

120
112

100

80

60 Respondents
52

40 36

20

0
Impressive Satisfactory Unsatisfactory

C ategory

ANALYSIS:

 36 respondents think that the LG’s ads are impressive.

 112 respondents favor it as satisfactory.

 While rest of respondents(52) are unsatisfied with LG ad strategy.

Table 8 : Effective Media to Giving an Ad

SOURCE OF MEDIA RESPONDENTS PERCENTAGE


Television 134 67%

Radio 30 15%

Newspaper 16 8%

magazine 18 9%

43
Banner/hoarding 2 1%
TOTAL 200 100%

ANALYSIS:

 134 respondents seek that TV is the best medium to go through Ad.

 While in against of it 30 are favoring Radio.

 Newspaper also has 16 respondents in their favor.

 Rest of the respondents favor to Magazine(18) and Banner/Hoarding(2).

Table 9 : Perception about LG

CATEGORY RESPONDENTS PERCENTAGE


Economical 0 -

Costly 64 32%

Neither economical nor costly 136 68%

44
TOTAL 200 100%

Percerption about LG

136

140

120

100

80 64

Respondents
60

40

20
0

0
Economical Costly Neither Economical nor Costly

C ategory

ANALYSIS:

 64 of the respondents seek that the LG Product is Costly.

 While 136 of the respondents seek it as Mid ranged product.

 Most surprisingly, none of the respondents seek it as Economical product.

Table 10 : Reflection of Product Profile by The Ads

DEGREE OF REFLECTION RESPONDENTS PERCENTAGE


Yes 148 74%

No 52 26%

TOTAL 200 100%

45
Reflection of Product Profile by the ads

148

160

140

120

100

Respondents
80 52

60

40

20

0
Yes No

Degree of Refl ec ti on

ANALYSIS:

 52 respondents are in favoring that the ad doesn’t reflect the true value or

information.

 Rest of the 148 respondents deny the above respondents view.

Table 11 : Perception about LG’s Ad Strategy

CATEGORY RESPONDENTS PERCENTAGE


Very good & promising 16 8%

Good & promising 46 23%

Good but need alteration 84 42%

Need complete alteration 54 27%

46
TOTAL 200 100%

Perception about LG's ad strategy

84
90

80

70

60 54

46
50

Respondents
40

30

16
20

10

0
Very Good & P romising Good & P romising Good But need Alteration Need Complete Alteration

C ategory

ANALYSIS:

 84 respondents think there is some need to change LG’s ad strategy.

 54 seeks for a complete change in that.

 While 62(16 + 46) respondents says it as very good / good and promising.

FINDINGS

 On the basis of primary data, it can be said that 22% products of

LG are being used in the houses.

 Most of the household are using the LG’s color televisions.

 Television is the most striking media for Advertising.

47
 Logo/slogan is the main part, which makes an effective

advertisement. The slogan of LG is not so remind able by the

consumers.

 If we measure the awareness of LG’ ad, it is 92% (according to

survey).

 The advertisement of LG needs some modification in it.

 According to report 32% respondents think that LG’s brands are

costly.

 Samsung and Videocon are the best competitors in the same

segment.

SWOT ANALYSIS

STRENGTH

 LG’s strategies are more interested in expanding the market than

wresting share away from other players.

48
 LG decided to be a value driver, selling novel product benefits.

 LG applied unique insight across product markets, including

consumer electronics, where people hadn’t imagined that health

had any relevance ( like offering AC’c with Health Air System with

anti fungs, electrostatic and deodorizing and and anti bacteria

filters, so that AC which was previously just a cooling machine is

now wanted by people to improve health).

 And this due to the accurate presentation by effective

advertisements the Indian consumers is beginning to judge all sort

of machines by what they mean for a healthful life style.

 LG is technological brand as compared to others which launched a

whole range of household products simultaneously and because of

the strategy the customers had been benefited with the

consciousness of concept of health who receive it in the from of

quality “ Healthful” products also are new conscious enough to

judge their machines vide this parameter.

WEAKNESS

 LG has less numbers of retailers.

 Less force- It has less numbers of marketing personnels.

49
 It has not planned for setting up of any new plants where their

competitor has planned to set up several new plants.

 It has no extra features in the brand that differentiate its from

other competitors.

 In LG advertising there is no any famous personality as Brand

Ambassadors.

OPPORTUNITIES

 It can take the market very well with the new investment of $ 143

millions.

 It can give a big jerk to its major competitor SAMSUNG it can

increase its number of products in consumer goods.

 Increasing trend of LG of different brand.

THREATS

 It has continuous threat from SAMSUNG as well as various other

competitors.

50
 LG has a major market than SAMSUNG between the families due

to advertisement of world cup cricket.

 A large amount of expenses on the advertisement.

51
Chapter 6 :

CONCLUSIONS

 With the coming in of the foreign brands the industry and the market are

likely to grow but this might be at the expense of our own Indian

companies.

52
 Competition is increasing day by day due to increase in new players in this

field

 LG electronics today has more than survived in the market within these

three years with its marketing strategy and technologically superior range

of products.

 Substitute products are available in the market.

 Bargaining power of buyers: The consumer enjoys little buying power.

Although the consumer is the most important entity for the organization

the bargaining power by them is looked down upon since prices etc are

fixed the companies which are not negotiable.

 Bargaining power of suppliers: At times these suppliers make profit

through delaying the consignment or by increasing the rate of goods.

 Market shares have increase through lowering the profit & increasing the

volume.

53
Chapter 7 :

RECOMMENDATIONS

Advertisements are made intended to accomplish the task of communicating

effectively and properly, by communicating to the right person, by communicating the

right message; put across through appearing and persuasive language, to positively

54
after the purchase behavior of the target audience. The role of advertisement is to

provide the maximum economic returns to the company and fulfilling other social and

informational objectives as well.

When seen in the light of above, the advertising campaign of the company broadly

seems to achieve the objectives.

When examined more closely, here and there some points need to be considered with

more attention.

 Focus to be shifted towards major fraction of Indian

society

As reflected from the analysis, a major population is in the impression of the

advertisements catering to the lives and needs of the richer society which themselves

from only a fraction of the entire population of the country. Now at this point of time

when the company has established itself as a major brand in the country the company

should strive to engross itself deeper into the lives of the major fraction of the Indian

society i.e. the rural and the semi-urban population.

 Use of better, catchy slogans

55
The successful advertisements of today have the element of effective slogans or

punchlines as well. The slogans should be such that they are 'short and sweet' to be

humble at the same time contributing cleverly to the overall objective of the

advertisements.

The recommendation of effective and catchy punchlines or slogans to be made a part

of the advertisements of the company will definitely improve the present Impact. such

slogans it incorporating regional sayings or slang might make them more easily

understood and quick to repeat and sing.

 Showcasing of popular Stars/Models

Another point that emerged from the analysis is regarding the showcasing of the

favorite Models and stars in the advertisements of the company.

 Launching of Nationwide promotional schemes

As the analysis reflected that it is the need of the hour to launch more attractive

schemes country wide on the major festivals, seasonal events, etc. The company can

go for some incentives schemes for its existing customers to create loyalty among

them. It can be something like - Lucky Draw prizes, sending festival wishes, etc. It

would help the company to create brand loyalty as well enhance the existing market

share.

 Number of Hoardings/Banners to be increased

56
The detailed probing from the dealers and the customers revealed the fact that they

have come across very few banners and hoarding of the company. The like in their

number at the public places will enhance the brand awareness.

 Colored advertisements in print

It is found out through the analysis that there appear advertisements of the company in

print media but mostly in black and white. It is believed that the customers attach

value to any brand through these small points, so in such cases brightly colored

advertisements will enhance their attraction and will make them catchier.

 Comprehensive advertisement for the whole product

line

It would be a better idea to design more of comprehensive advertisements that

showcase the whole product line under the umbrella brand of LG as the customers

might not be aware of the whole range of the products and such a strategy will

enhance the brand awareness and interest. Such advertisements can be promotional

informational as well as increase the existing market share in a balanced way. The

customers would not only buy routine products like CTV but also like to try products

like MWO.

57
Chapter 8:

LIMITATIONS OF

RESEARCH

 Due to time limitation, it was not possible to cover all areas of West Delhi.

58
 Scope of the study is limited, so it can not be said that it is true representation

of whole nation.

 On the basis of this data analysis, we can not assume the final situation of the

market.

 Sample size of 200 respondents is not enough to collect accurate information.

 Lack of time allotted for the project

 Convincing customer to spend some time for questionnaire

 Lack of reliability of secondary data

 There was not enough time to share the views with the management.

 Due to limited time period and constrained working hours for most of the

respondents, the answers at times were vague enough to be ignored.

 As a lot of data was through secondary sources, chances of it being absolute

accurate are comparatively less.

59
ANNEXURE

60
QUESTIONNAIRE

Q. 1 Are you user of LG’s Home Product?


Yes [ ], No [ ]

Q. 2 If yes, Which Product are you Using?


TV [ ], Refrigerator [ ]
AC [ ], Washing Machine [ ]
DVD/VCD [ ], Microwave Oven [ ]
Vacuum Cleaner [ ]

Q. 3 By which Medium you come to know about LG?


Advertisement [ ]
Family Member [ ]
Friends/Relative/Neighbor [ ]
Other Source [ ]

Q. 4 Which advertisement feature influenced you most in a particular Ad?


Concept/Message [ ]
Logo/Slogan [ ]
Picturisation [ ]

Q. 5 Have you seen any LG’s ad?


Yes [ ], No [ ]

Q. 6 What makes you recall LG?


Logo/Slogan [ ]
Message [ ]
Presentation of Ad [ ]
Model/Celebrity [ ]

61
Q. 7 What do you like of the advertisement of LG?
Impressive [ ], Satisfactory [ ]
Unsatisfactory [ ]

Q. 8 What do you think about the most striking media to advertise LG?
Television [ ], Radio [ ]
Internet [ ], Newspaper [ ]
Banner/Hoardings [ ], Magazine [ ]

Q. 9 Based on the price range what impression do you carry of LG’s product?
Economical [ ], Costly [ ]
Neither Economical nor Costly [ ]

Q. 10 Does the advertisement reflect actual product profile?


Yes [ ], No [ ]

Q. 11 The advertising strategy of LG is


Very good & Promising [ ]
Good & Promising [ ]
Good but Need Alteration [ ]
Need complete Alteration [ ]

62
BIBLIOGRAPHY

63
BOOKS:

 Kotler, Philip

Marketing Management, Eleventh Edition

JOURNALS/ MAGAZINES:

 Indian Journal of Management – Volume xxxv (March 2008)

 Survey of Indian Industries – The Hindu (2007)

 Business Today

NEWSPAPER:

 Economic Times

 Financial Express

 Times of India

WEB SITES:

 www.lge.com

 www.google.com

INDUSTRY REPORTS

 Investors Guide to Indian Industry 2010

COMPANY LITERATURE

 “LG Parivar” the LG in-house magazine.

64
 “Global News” LG weekly news bulletin.

65

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