PRODUCT MARKET

STRATEGY

PREPARED BY-
SHRUTI SRIVASTAVA 139
BHAWANA MALLIK 154
BYAPTI BIRLIPTA 165
ANSULA MOHANTY 180
 LG : OVERVIEW
üThe LG Group : South Korea’s third largest
conglomerate.
üProduces electronics ,chemicals, and
telecommunications products
üOperates subsidiaries like LG Electronics, LG
Telecom, Zenith Electronics and LG Chem in over
80 countries
üLG Group sponsors the LG Cup Baduk
Tournament.
WHY A PRODUCT
STRATEGY ?
üWhere are we headed?
To lead consumer durables space .(Aspirational)
üHow we will get there? The core strategy
Customer target (premium customers)
Competitive targets ( IT and PC’s, GSM)
üWhat we will do?
How to implement the core strategy?
BRAND LG
üMay 1997 – Nationwide launch-22,300 crore
business -2008

ü
üTop line growth-50 cr – Rs 9500 cr in 2007.

ü
üLeader in CE (11600 Cr.)and HA(10700 Cr)

ü
üTo be an “aspirational brand”
NEED OF STRATEGY

üInternal coordination
üOptimize resource utilization
üTo take on with competitors
SENSIBLE STRATEGY
üWhat competitor cannot do.
üCompetitor will choose not to do.
üWill be at a disadvantage if they do
it.
ELEMENTS OF A PRODUCT
STRATEGY
A statement of the objective's the product should
attain.
Selection of strategic alternatives
Selection of target customers
Statement of the core strategy
Description of supporting marketing mix.
Description of supporting functional programs
 SETTING OBJECTIVES
 Corporate Objectives
 Corporate Strategies(premium and reliable customers)
 Divisional Objectives
 Divisional Strategies
 Brand Objective
 Brand Strategies
 Program
 Tactics
 CORPORATE &DIVISIONAL
OBJECTIVES
To grow annually by 20% for 3 years
Contribution to 10% from 4%
8% rev. target from GSM-2008
18% rev. target from IT &PC -2008


5 million handsets –GSM

12 million handsets- CDMA
5% of PC market of 60 million mkt.- 2%

 BRAND OBJECTIVE

To attain technology leadership

MASS MARKETER IMAGE PREMIUM/ASPIRATIONAL STATUS

CORPORATE STRATEGIES
Premium and reliable customers.
380 cr. ad spends
120 cr R&D spend (5% of revenue on ad.)
Support CSR
Divisional Objectives
Rs 17000 cr sales in 2008 from GSM,PC, & IT


 Brand Objective
Rand identity house.
By separating mktg. from sales, concentrating on
brand.

 SELECTION OF STRATEGIC
ALTERNATIVES

Long term profits

Growth in sales/mkt share Efficiency short run profits

Mkt development Mkt penetration

New segments Existing customers

Convert non users Competitors’s customers

 SELECTION OF STRATEGIC
ALTERNATIVES

New segments- Blue Ocean strategy



Existing customers Need Gap

Analysis
Competitors customers

 EFFICIENCY IN THE
SHORT RUN/
PROFITS

Decrease inputs Increase outputs

Reduce costs Improve asset utilization Increase price Improve sales

mix
 INCREASING
SALES/MARKET SHARE
 Market Development Strategies
Aimed at non customers
Develop segments previously ignored.
 Market Penetration Strategies
Increase the usage rate of the existing customers, ( larger pack
size)
Attract competitor’s customers
INCREASING PROFITABILITY


 Decreasing Input
Cost Reduction
Improve asset utilization

Increasing the Outputs
Increase prices
Improve the sales mix
SELECTION OF THE TARGET
CUSTOMER

§ Choice of target customer

§ Choice of competition target
§ Positioning takes into account - The core
strategy
 POSITONING THE CORE
STRATEGY

Cost /price strategy



Non price strategy

COST/PRICE DIFFERENTIAL
ADVANTAGE

Very successful strategy in India.

Not all companies can offer this strategy
High volume may help achieve the strategy.
More investment in facilities.
Reduce overheads.
Product manager has to work with supplies.
Involves risks: Competitor may copy the technology, changing
tastes, size of the price sensitive segment.
NON PRICE STRATEGY

Attempt is made to create added value in the minds of

the customer that helps marketer to charge higher price.
Core product
Basic product
Expected product
Augmented product Where can you create
change?
Potential product
FIVE AREAS OF
DIFFERENTIATION

•Quality
• Status and image
• Branding
• Convenience
• Distribution Channels
ASSOCIATED MARKETING MIX
&
OTHER FUNCTIONAL
PROGRAMS
All the other P’s have to be planned
accordingly
Coordination will be required by other
departments

Thank
you!