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With LG, “Life’s Good” :By-V. Ramachandran Director – Sales & Marketing, LGEIL

by VARINDIA 2010-04-02

One of the most premium brands, LG Electronics India Ltd. (LGEIL) is today the country’s most respected brand in the Indian consumer durable industry. LG’s rise in its revenues and brand values has reinforced its credentials as a customer-centric organization. Established in 1997, LG Electronics India Pvt. Ltd. is a wholly-owned subsidiary of LG Electronics, South Korea.

In India, for a decade now, LG is the market leader in consumer durables and recognized as a leading technology innovator in the information technology and mobile communications business. It is the acknowledged trendsetter for the consumer durable industry in India with the fastest-ever nationwide reach, latest global technology and product innovation.

During its ten years of existence in the country, it has managed to capture a premium brand positioning in the market through its integrity, dynamism and innovation, making it a symbol of trust and quality.

Corporate Identity

The LG brand comprises four basic elements: values, innovation, people and passion.

LG strives to enhance the customer’s life (and lifestyle) with intelligent features, intuitive functionality, and exceptional performance. The “Life’s Good” slogan represents LG’s determination to provide delightfully smart products that will make customer’s life good.

Its slogan “Life’s Good” best expresses its brand’s values, promises, benefits and personality. It is an ultimate expression for what the brand stands for and what they strive to deliver continuously.

The Beginning

The trend of beating industry norms started with the fastest-ever nationwide launch by LG in a period of four-and-a-half months with the commencement of operations in May 1997. LG set up a state-of-the-art manufacturing facility at Greater Noida, near Delhi, in 1998, with an investment of Rs.500 crore. This facility manufactures colour televisions, washing machines, air-conditioners and microwave ovens.

During the year 2001, LG also commenced home production of its eco-friendly refrigerators and established its assembly line for PC monitors at its Greater Noida manufacturing unit. The beginning of 2003 saw the rolling out of the first locally manufactured Direct Cool Refrigerator from the plant at Greater Noida.

In 2004, LGEIL also set up its second greenfield manufacturing unit in Pune (Maharashtra) that commenced operations in October 2004. Spread over an area of 50 acres, the facility manufactures LCD TVs, GSM phones, colour televisions, air-conditioners, refrigerators, microwave ovens and colour monitors.

Product Offerings

LGEIL has an impressive portfolio of consumer electronics, home appliances, GSM mobile phones and IT products. It is one of the first companies which has recognized the emerging changes in consumer needs and decided to differentiate its products on the basis of technology, with health benefits.

V. Ramachandran, Director – Sales & Marketing, LGEIL, said, “Consumer looks forward for quality, technology, reliability and after-sales service from a brand name. Addressing the change in consumer needs, LG has adopted a new communications strategy of being rational rather than emotional. The new communications strategy emphasizes on core technology and the benefits that our unique product technologies offer.”

Its vision to become a “Health Partner” for its consumers worldwide led it to develop patented technologies such as”“Golden Eye” technology in colour televisions and “PN System” in refrigerators. Similarly, microwave ovens have the “Health Wave System”; air-conditioners are equipped with the”“Health Air System’, while washing machines have the “Fabricare System”. All these unique technologies offer to give customers a healthier environment to live in.

Manufacturing Facilities

LG‘s Greater Noida plant is the real state-of-the-art manufacturing facility set up in 1998 with an investment of Rs.500 crore. Spread over 47 acres, this standout symbol of Korean engineering is representative of more than just that: it is another example of the LG vision; it is a story of pluck, skill and discipline; and, crucially, it is about people rather than machines.

This facility manufactures colour televisions, refrigerators, washing machines, air-conditioners, microwave ovens, monitors, Personal Computers and compressors. The Greater Noida manufacturing unit line has been designed with the latest technologies at par with the international standards at Korea and is one of the most eco-friendly units amongst all LG manufacturing plants in the world. The plant at Greater Noida is India’s most productive and automated compressor plant with an investment of Rs.80 crore. This investment includes setting up the assembly line, oil charging, vacuumization paint shop and machine shop with world-class technology. The total area of the plant is 3.4 acres with a capacity of 2.2 million units. LG compressors have the highest EER, i.e. energy efficiency ratio up to 4:4.

With excellent commitments to quality and Six Sigma concepts, LG has also set up a very high precision lab with world-class product performance and reliability test facilities, sophisticated noise room and chemical lab. LG will be manufacturing the reciprocating compressors in this plant. These will be used for both the Direct Cool and the Frost Free Refrigerators. LG Electronics is known worldwide as inventors of Linear Compression Technology, a patent of LG. Other than India, LG has compressor plants in Korea and China and has a rich experience of 25 years in making compressors.

LG Electronics’ Second Production Facility: Ranjangaon, Pune

LGEIL set up its second greenfield manufacturing unit in Pune that commenced operations in October 2004. The facility had an initial investment of Rs.150 crore. Set up over an area of 50 acres, the facility manufactures GSM mobile phones, optical storage devices, colour televisions, LCD TVs, air-conditioners, refrigerators, washing machines, microwave ovens and colour monitors.

In addition to its current manufacturing facility at Greater Noida (on the outskirts of Delhi), the new plant enables the company to expand its consumer reach and ensure better supply chain management that would translate into a faster response time.

Product Quality

Since LG is the leader in the consumer durable industry, quality and product standards are given the first priority, and special emphasis is laid on ensuring that all the LG products meet the most stringent quality checks. LG’s manufacturing units, R&D labs and products are designed with the latest technologies and quality standards at par with international standards at Korea. In keeping with the globalization of the Indian economy and the liberalization policies initiated by the Government in reducing trade barriers and providing greater thrust to exports, LG has continuously endeavoured and ensured that their laboratories and units match the international levels of competence.

Both the Indian manufacturing units have been designed with the latest technologies at par with the international standards and are one of the most eco-friendly units amongst all the LG manufacturing plants in the world.

The IT Division:&n bsp;

LG has a complete range of Laptop, Personal Computer, LCD monitor, CRT monitor, Optical Storage Devices and Tablet PCs to tap the ever increasing IT industry.

Its product range includes Flatron Monitors, StudioWorks Monitors, LCD Monitors, Flat Panel Displays, Optical Storage Devices (DVD-Writer, CD-RW, DVD-ROM, CD-RW, CD-ROM, Combo), MY PC Desktop Computer and LG X-Note Tablet PC etc.

LG entered the color monitor business as late as March 2000 and has done better than expected. It started monitor production in India, in the year 2001 and in the last five years, the production capacity has been continuously increased to a current capacity of 1.4 million per year.

LG CRT Monitors have unique features such as 180-degree swivel base, user defined color temperature settings. The user defined color temperature setting allows the customer to individually adjust the basic colours like Red / Yellow and Blue. LCD offers highest Digital Fine contrast ratio and fast response time. Backed with LG’s unique f-engine, an embedded picture correction technology the LG LCD monitor is a technology marvel. The real spice added is that f-engine feature is available from the entry-level 15” LCD monitor to all higher sizes. This product can offer very rich multimedia experience on pictures / movies / Games, Engineering Design drawings etc.

LG has pioneered in glass- free 3D viewing in India with the launch of India’s first 3D LCD monitor. It has also to its credit India’s first Notebook with Auxiliary Display and the path breaking “Desk Note” and also India’s first ever Desktop PC with Finger Print Security which is a unique blend of design, performance and security.

After spotting the new trend towards flat, be it for PC or TV monitors, LG quickly introduced flat screen IT products. Over the years it has been able to make a considerable mark through its Flatron monitors. MY PC has been the company’s first initiative to enter the branded customised PC market. Also significant is the choice of Linux and other free software in MY PC units.

Be it the regional distribution model, the opening of exclusive IT retail shops, or the launch of innovative products, LG India has always been known for scaling uncharted heights and reaping success in return. By expanding its IT peripherals portfolio & reseller business, and by targeting the upcountry market, the Korean major seems to be moving in the right direction.

While on one side LG has been taking the channel route, on the other side it has also opted for the retail route. Understanding the reach and scope of retailing, the company started its retail experience in 2001. In the year 2006, LGEIL achieved a turnover of Rs 8250 crores out of which 13 percent came from IT division. The vendor also achieved sales of 1 million monitor sales in 2006.

LG has also announced new aggressive plans to make its Notebook Business as one of the growth engines for the company. The LG IT Division plans to grow by 30 percent in volume terms and 20 percent in revenue terms by end of year 2007.

Channel Initiative

LG has eight regional offices and around ten thousand dealers, which include sub- dealers and resellers. LG has always been a channel-friendly company with dedicated efforts towards channel health and profitability. “We have always taken lead in quicker settlement of channel schemes. We realize that partners are today looking at vendors who can enhance their profitability and LG’s channel schemes are perfect examples of that. Channel empowerment is one of the most crucial components of our distribution business. An extensive and strong dealer network is the backbone of any organization’s success and a definitive way to increase brand value and market share,” Ramachandran informed.

Giving due credit to valued dealers and setting a landmark in the consumer durable space, LG has come up with the unique Club 100 concept. An effective Dealer Relationship Management programme, Club 100 is an endeavour to recognize and reward dealers by adding value to existing relationships.

Adds Ramachandran, “Club 100, as the name suggests, is an exclusive LG club for 100 select top performing dealers across the country that have been consistent in their sales and commitment to the brand. Club 100 is specifically designed for Multi Brand Outlet dealers, since they continually need to be inspired and motivated to keep the high ground and faith for LG in the coming years.”

Under this concept, the select 100 dealers will get priority allotment of all new products introduced by the organization. They will be entitled to Great Incentive Programmes where they will be getting exciting rewards on stock purchases. These Multi Brand Outlets will also be spruced up with LG’s very best and latest in-store and out-store display decoration. A separate kiosk for service support will be set up offering live net connection and on-the-spot customer solution. Most importantly, the kiosks will be manned by LGEIL’s own manpower, thus ensuring lesser turnaround time and customer satisfaction.

These select multi brand outlets will also be recognized as authorized LG First Redemption Outlets, and will have a separate Elite identity. In addition, the dealers will also receive monthly rewards and recognition.

Service Support

Service is the key to success of any company. “LG endeavours to bring the best in customer support. In totality, Customer Support is one of the vital functions within LG and a whole lot of importance is attached to the same,” informs Ramachandran.

Future Plans…

In ten years, LG has been able to carve out a premium brand positioning in the Indian market and is today the most preferred brand in the segment. LG Electronics is pursuing the vision of becoming a true global digital leader, attracting customers worldwide through its innovative products and design. It plans to continue to strengthen its existing product brands. The Flat Panel Display (FPD) and GSM are essentially growth drivers for LG. The FPD segment is growing at 514 per cent, whereas GSM is growing at 300 per cent. The company’s goal is to rank among the top three consumer electronics and telecommunications companies in the world by 2010. “To achieve this, we have embraced the idea of ‘Great Company, Great People’, recognizing that only great people can create a great company,” concluded a confident Ramachandran.

The company is expecting an overall growth rate of 15 per cent this year.

Some unique features of LG’s Noida production facility are:

Digital Manufacturing System: LG is the only manufacturer to follow this technology, which makes the lines flexible, thus enabling production of various products on the same line. For example, on the monitor line, CTVs, in addition to microwave ovens, can also be produced, as and when required. This enables LG to cater to the seasonality factor, which is very prominent in this industry. Thus, when it is off-season for ACs, AC lines are utilized to produce alternate products.

Quality is LG’s Prime Focus: For this, LG monitors the service call rate on a regular basis. LG’s target is to reduce these service call rates by 30 per cent less. Other than these products at the manufacturing lines, every product passes through stringent qual ity checks before being packed and sealed.

Minimum Development Cycle: Research and development is one of the most emphasized activities at LG’s production facility. The company is known for launching new products that are both consumer-friendly and have state-of-the-art technology. Moreover, LG’s R&D team keeps a constant vigil at the market requirements and develops the models accordingly in the minimum time possible.