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    LG is targeting India's rural market with new products tailored for rural consumers. It has lowered prices of products by 7-20% through cost innovations without affecting profits. LG is setting up area offices across India and launching new products in states like Andhra Pradesh, Tamil Nadu, Punjab and Haryana to penetrate the rural market. It recognizes opportunities for growth but also faces threats from strong competitors in India.

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    LG is targeting India's rural market with new products tailored for rural consumers. It has lowered prices of products by 7-20% through cost innovations without affecting profits. LG is setting up area offices across India and launching new products in states like Andhra Pradesh, Tamil Nadu, Punjab and Haryana to penetrate the rural market. It recognizes opportunities for growth but also faces threats from strong competitors in India.

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    LG is targeting India's rural market with new products tailored for rural consumers. It has lowered prices of products by 7-20% through cost innovations without affecting profits. LG is setting up area offices across India and launching new products in states like Andhra Pradesh, Tamil Nadu, Punjab and Haryana to penetrate the rural market. It recognizes opportunities for growth but also faces threats from strong competitors in India.

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    Download as docx, pdf, or txt
    62 views5 pages

    C CCCCCCCCCCCCCCCCCCC C

    Uploaded by

    avi531
    LG is targeting India's rural market with new products tailored for rural consumers. It has lowered prices of products by 7-20% through cost innovations without affecting profits. LG is setting up area offices across India and launching new products in states like Andhra Pradesh, Tamil Nadu, Punjab and Haryana to penetrate the rural market. It recognizes opportunities for growth but also faces threats from strong competitors in India.

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    Download as docx, pdf, or txt
    of 5

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    The case is all about LG who is set to target rural market in India. The case throws light on
    overall position of the company in the industry emphasizing about its competitor, its pricing
    strategy, and product portfolio and promotional and distribution strategy. With the success of
    its products in urban and semi urban market, the company is excited and is embracing itself
    to invade the unexplored and currently the most sought ³Rural market´ in India. With its
    endeavour to be market leader in the rural segment the company has invested a lot in R&D
    especially in the areas of improving efficiencies, reducing design related frills as well as
    buying cheaper product thereby managed to cut consumer price from 7%-20% across all its
    product without much affecting its profit. Hence it has successfully executed the mantra of
    cost innovation.

    LG is characterised as an aggressive marketer and in accordance to maintain its character it


    has launched a new variety of its products especially suited for Indian rural market as a
    ³SAMPOORNA´ range and giving tough competition to its competitor like BPL,
    VIDEOCON etc.

    Distribution is always considered to be the critical factor for success in rural market and
    therefore LG is putting extra effort to improve it. They are going to set up area offices in 50
    plus regions across 83 territories. It has initiated steps in A.P., T.N., Punjab and Haryana by
    targeting rich and middle class of agriculture segment.

    SWOT ANALYSIS:

    STRENGTH:

    ‰c A well recognized multinational brand across the globe.


    ‰c Products are considered to be reliable and user friendly.
    ‰c A well dedicated R&D team.
    ‰c It is known for its innovative products.

    WEAKNESS:

    ‰c Lack of expert operators for complex machines due to illiteracy and lack of training in
    India.
    ‰c Its competitors are strong (like Samsung).

    OPPURTUNITIES:

    ‰c Growth opportunities in semi urban and rural market are tremendous.


    ‰c Because of its constant innovation it can attract potential buyer and also can retain
    existing customers.
    ‰c It can also expand its target market geographically and socially both by introducing
    new products in existing market and existing products in new markets.

    THEARTS:

    ‰c Competitors are coming as a strong player in the industry.


    ‰c LG is getting intense competition from several Indian and foreign brands

    Questions for discussion:

    1. Is LG over ambitious in its targets?

    Ans: No, LG is known for its aggressive orientation towards market. They because of their
    nature set the target high for themselves and also invade the market in such a way so that the
    competitors do not get much space in that market to operate comfortably.

    Also, they are capable enough of achieving the target they set for themselves and they have
    done it several times in the past. They are blessed with enough talent, required strategy and
    positive mindset needed to succeed. They have plenty of products to cater both the markets
    say urban and rural. And also they are improving their distribution network and are adopting
    innovative methods of promotion which certainly helps them in achieving their targets.
    Hence, LG cannot be referred to as over ambitious in its targets.
    2. Is there a market for LG product in rural areas?

    Ans: Yes, definitely there is a market for LG product in rural market because of the following
    reasons:

    LG is known for its reliable product and rural buyers are highly value sensitive i.e. they see
    what value they are getting for the price they are giving. LG in its ‘  range offers
    products which are value for money. Moreover, the rural population are now equipped with
    increased purchasing power and awareness about brand. Some reasons in support of the
    answers may be:

    ‰c Increasing literacy rate

    ‰c Awareness towards new innovative technology and quality realization

    ‰c Increasing incomes due to good monsoons and government initiatives and schemes

    ‰c Employment opportunities in infrastructure and industry projects across the country

    ‰c India¶s rural consumer durable market will witness an annual growth of 40 per cent in
    the next fiscal 2011-12, as against the current growth rate of 30 per cent owing to the
    change in lifestyle and higher disposable income of rural India.

    3. Develop a clear cut strategy for rural penetration.

    Ans. Rural market is totally different from urban market. The difference not only lies in the
    fact that, it requires attention of the marketers not only on the 4Ps but also on the 4As
    namely;

    Availability

    Accessibility

    Acceptability

    Awareness.

    Apart from these parameters the marketers have to bring those products in the market which
    satisfy the latent needs of the consumers like TV running with battery and others such mass
    customised products i.e. the company always has to innovate its products constantly to meet
    such un expressed demand. So the strategy for the rural penetration should be:

    1. Better distribution strategy.

    2. Offering better post sales services like regular check up once in a year free of cost.

    3. Products meeting their needs in a better way and at reasonable price.

    4. The promotion strategy should be more suitable to rural area like bill board or road show.

    5. Consumers should perceive that products they are buying is value for money.

    6. They should go for Re-engineering of products to better cater the needs of rural population.
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