How has your performance last year been and what are your growth targets for this season?
Last year, we achieved a turnover of Rs.13,089 crores and this year, our target is Rs.19,000 crores. For the first quarter we have seen a 40% growth over last year.
What R&D investments are you making for this year?
To become a premium brand in the consumer durable industry, LG Electronics is firmly committed to investing in Research & Development to create products with the most highly valued technology and style. LG’s R&D is driven by the dreams of the customers. As technology innovation is the key to success, LG’s focus is on developing consumer centric products. At the same time, they seek to identify future growth opportunities in new business areas. This year our R&D investment would be around Rs.300 crores.
Which new products or product categories are you looking at aggressively for your future in the Indian market?
Currently, we are focusing on our Home Entertainment segment, which is our next big target after the launch of the Direct Cool Range in the Home Appliances category and the all new AC range for summer 2010. This month, LG will unveil a series of ultra-slim CTVs and full LEDs. We are now targeting the premium segment of consumers to give the company a premium image.
The penetration level of all consumer electronics and durables categories is still very low as government spending on infrastructure has not kept up pace with the demand. So what steps are you taking to increase the same?
At present, the penetration level is quite low. We are expanding our retail base in rural areas to extend our reach, because there is a huge potential for low end products in that market as most of people are first time buyers. With the changing lifestyles of consumers and rising incomes, the replacement cycle has reduced (for example, the replacement cycle for domestic appliances was 12 years earlier and has come down to 7-8 years). This eventually triggers the demand.
So how are you planning to leverage the opportunity?
With rising income levels and mounting living standards, the demand for products has increased, which is a good opportunity for us to cash in. People have more disposable income to splurge and they want to live a comfortable and luxurious life, for which the first step starts from home. Nowadays, people want to use devices which are technologically more advanced, make their life easy and consume less time.
What are your retail plans? Are there any specific promotions or incentives schemes for your dealers this season that you would like to mention?
MBS: Our trade partners play a major role in promoting our brand. We work very closely with them to serve the consumers. We will be increasing exclusive brand shoppes. The LG Brand Shoppe concept was established with the aim of creating a platform to communicate the LG identity. The objective was not just to attract the impulse buyer, but to also introduce an element of interactivity in the outlet while projecting the identities of LG products. The showrooms have been designed to allow customers to shop in comfort even during peak seasons such as festivals. There are several value-added services like dedicated service help desks, which will enhance the overall shopping experience.
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Source : IIPM Editorial, 2010.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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