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"In 2006, we are targeting revenues of Rs 9000 crore.Our focus in 2006 would be towards the High End products and the technologically advanced versions of existing models.
The focus this year would be on maintaining relations with the customer and being a part of his/her life. Our focus would definitely increase towards the Premium end of the product categories. The focus products in the consumer electronics category would be New Display Panels(NDP)-Plasma TV's, LCD TV's, DVD Players and Home Theatres is another area that would be on top priority."
K R Kim has been with LG since 1974 and has done various foreign assignments for the electronics major in Dubai, Chicago, New York, Panama, Dusseldorf prior to India. A graduate in law from the Seoul National University, Kim is fluent in English, Spanish, Japanese besides Korean. His contribution to the company has been immense and remarkable. He founded the Goldstar brand in the UAE for the first time, while in the US and Germany, he was involved in setting up the IT business. Kim was instrumental in making the Goldstar brand a leader in Latin America in the capacity of a Regional Director.
His greatest lessons in life have taught him truthfulness, hard work and determination, which always pay. His hobbies include playing golf and tennis. He also enjoys reading different historical books. With a work experience of over 25 years, Kim values health and feels a harmonious personality is the key asset of an individual.
In conversation with exchange4media's Pallavi Goorha, Kim talks about his vision, plans and strategies for 2006.
Q. Several hi-end products are being launched in India now, do you think India has that kind of spending power?
With double income families becoming the norm in India and disposable incomes going up, the high-end market is the next potential segment, which is expected to boom in India, and therefore, will be the focus of LGEIL. A host of high-end products will be developed by the R&D team based on market research and will be launched in the Indian market on a regular basis. Apart from just launching these products, LGEIL also plans to open exclusive showrooms to display these products and increase visibility.
Q. What are the plans and vision for LG Electronics India for 2006?
In 2006, we are targeting revenues of Rs 9,000 crore. Our focus in 2006 would be towards the high-end products and the technologically advanced versions of existing models.
The focus this year would be on maintaining relations with the customer and being a part of his/her life. Our focus would definitely be on the premium end of product categories. In the consumer electronics category the focus would be New Display Panels (NDP) – Plasma TVs, LCD TVs, and DVD players – home theatres are also top priority. In the GSM category we would be strengthening the portfolio by introducing new models with MP3 cameras, Bluetooth facilities, etc. The IT category would see laptops and My PC being upgraded and faster, secure models coming up. Media centre PC would be other main attraction. We will strengthen the home appliances portfolio by introducing latest technologies in almost all categories. Thus, premium range and technologically advanced products would roll out in 2006.
Q. What are the new product categories that will drive LG’s growth in India?
Laptops, media centre PCs, GSM mobile phones, DVD writers are some of the products in the IT and SM categories that are going to drive LGEIL’s growth in India. We have been the leader in the CRT and LCD monitor segment and in 2006 also we believe that it is going to be one of the key growth areas. In the consumer electronics category, New Display Panels would be the growth drivers, apart from flat TV range such as Slim Magic TV. In the home appliances category the high-end frost free refrigerators, convection and grill microwaves, front loading washing machines, apart from this the Whisen range of air-conditioners would also be major contributors in growth.
Q. Could you elaborate on the recently launched LG Dollar Varsha scheme for your channel partners?
LG Dollar Varsha is a unique scheme for channel partners. It’s strength lies in the fact that it is a paperless scheme, which ensures faster redemption. On every purchase of three units of 15-inch / 17-inch CRT monitors or two units of 17-inch Flatron CRT monitors or four units of Combo drives or three units DVD writers from LG regional distributors, channel partners qualify to get two “LG Dollars”. The partner can accrue these LG Dollars and redeem them for various gifts that include IT / CE / HA products. Moreover the company has also incorporated a concept of ‘Force Multiplier’ in this scheme, which multiplies the LG Dollars thus accrued, by 1.25 times and upwards on achieving various slabs of LG Dollars.
For example, if a partner from an ‘A’ category city reaches 200 ‘LG Dollars’, the Force Multiplier applicable will be 1.25, in which case the total accrued LG Dollars get multiplied by 1.25 times. Similarly, if a partner achieves 340 LG Dollars, the Force Multiplier applied will be 1.5 times. On slabs of 400 LG Dollars and above the Force Multiplier is kept as mystery.
Partners are eligible to win DVD writers, Flatron monitors, CTVs, music systems, washing machine and air-conditioners on redeeming the ‘LG Dollars’. The scheme is valid from Jan 1, 2006 to March 31, 2006, and the redemption can be availed at any of LG’s branch offices between April 5 and April 15, 2006. Salient features of this scheme are that there is no need for any registration process, no need to accumulate invoice copies, no lengthy claim processes, no waiting period for redemption and bonus through force multiplier.
Q. Could you elucidate some notable developments in the Indian consumer electronics market in the last five years?
In the last five years, the Indian consumer has become more technology conscious than price conscious. The demand of technologically advanced products is on the rise. There has been phasing out of certain products like normal TVs etc, which were in great demand. The requirement / demand for flat TVs has increased many folds. GSM camera phones, laptops, plasma display panels and LCD TVs have seen major growth and as a result of increase in dispensable incomes the demand for high-end products has seen an increase. First time purchase of high end products has increased as technology has become the mainstay.
Q. LG had achieved a landmark turnover of Rs 2,100 crore during the festive season in 2005. How did that come about?
LG Electronics has already achieved this major landmark by successfully launching globally competitive and innovative products equipped with cutting-edge futuristic technology. The company has achieved this by launching ‘MyHomnet’ – an integrated home entertainment system, 71 inch plasma display panel, 15 inch wireless LCD TV and NKS – Next Gen Karaoke system, wide screen Express Notebooks, M4410 car style phones and other 3G enabled GSM phones.
The launch of these products bears testimonial to LG’s commitment to premium products market in India, which is currently booming, and the same trend will be taken forward by the company in the coming years as well. The promotional offerings and unique advertising campaigns that LG keeps on coming up with is another reason that has led to our success.
Q. What is the biggest advantage that India has offered to LG?
LG as a company has managed to take advantage of that very aspect of the Indian market which poses the biggest threat to other MNCs entering India – the highly diversified nature of the Indian market. Every state in India has a totally different identity and the needs and preferences of customers from each state varies to a great extent. LG has managed to turn this formidable market situation to its benefit. Therefore, at LG, marketing strategies for each product category are devised after a careful SWOT analysis of each state’s market. This data is then used to determine the existing customers’ preferences, areas of improvement, strong and weak points of various products, etc. Based on this information, strategic R&D and marketing initiatives are planned out.
Also, LG was the first company in the industry to realise the hidden potential of India’s rural market and was fast to act on it. A distribution network was then laid accordingly, with the branch level employees going out to gather market intelligence and communicating them to LGEIL headquarters in Delhi. This information was used by the R&D team to develop products that would appeal to rural consumers.
All this has lead to LG having the widest distribution network in the industry (47 branches, 175 area offices and over 10,000 trade partners).
Q. You had recently said that next growth agenda for LG included capturing leadership positions in communication and IT products like mobile phones, laptops, PCs, monitors and other peripherals. How do you intend to go about that?
LG’s IT and GSM division is going to be of primal impetus in 2006. According to IDC, LG has become the No. 1 brand in the PC monitor market in 2005, both in the CRT and LCD segments. This year, it has also introduced the slimmest LCD monitor for the 17” and 19” categories. LG has also unveiled two premium state-of-the-art notebooks based on the latest Intel’s Napa platform, developed in India by Intel, which are a unique combination of design, performance, entertainment and security.
The company is also quite bullish about the notebook market in the country and today it has the advantage of being the only player that has the widest range of wide screen notebooks (12.1,14.1,15.4 and 17 inches). In 2006, we will be launching a range of new lifestyle notebooks, as we feel that the trend in catching up in India. We already have 81 Cyber Shoppes in A and B class cities and we would like to expand this to 150 in C and D class cities by mid-2006.
Q. What made you go for a consolidated approach of your consumer electronics and IT business categories?
As a major step towards consolidation, LG Electronics reviewed its CE and IT advertising accounts keeping in mind the communication requirement for 2006. This review was done to integrate our colour TV, flat panel displays, audios and IT categories.
Q. You recently gave your combined advertising account for consumer electronics and IT business categories to Lowe. What are your expectations from Lowe?
The strategic direction and the creative route required for 2006 was in sync with the creative directions presented by Lowe. We look forward to a productive relationship together.