Marketing Mix of LG and 4Ps

The Marketing mix of LG analyses the 4Ps of LG, which includes the Product, Price, Place, and Promotion of LG. LG Electronics is a multinational company in South Korea that deals in electronic goods. This Global Company has spread its network all over the world, with its headquarters in Seoul. It was founded in 1958 to rebuild its nation with domestic consumer goods. It has come a long way from being a national company to an international business company. Currently, LG Electronics has become the second-largest television manufacturer in the world. It also ranks among the top hundred brand names in the world. Some of its chief competitors in the world market are as follows –

• Samsung
• Sony
• Videocon

About LG

• Type: Multinational conglomerate
• Industry: Electronics, chemicals, and telecommunications
• Founded: 1947
• Founders: Koo In-hwoi
• Headquarters: Seoul, South Korea
• Area served: Worldwide
• Current CEO: Koo Kwang-mo
• Number of employees: Over 74,000
• Major products: TVs, smartphones, home appliances, and batteries

LG Product Strategy

LG Electronics deals in various electronic industries like vehicle components, mobile devices, consumer goods, and home appliances. The company is the first to make CDMA mobile digital handsets and develop a plasma TV of 60-inch. LG Electronics is also the largest manufacturer of LCD panels in the world. In 2010, the company took initial steps in the smartphone industry. Its products include-

Television –

1. 55-inch OLED TV
2. 65-inch and 77-inch OLED TV
3. LG Smart TV
4. Plasma TV

 Smart Devices and Mobile Phones – A varied range of tablet devices and smartphones, like

1. G3,
2. G Flex
3. G2
4. A smartwatch that is based on Android wear

Home Entertainment

1. Music Systems
2. Home Theatre Systems
3. BLU Ray Players
4. DVD Players

Computer products like monitors

Home appliances

1. Refrigerators
2. Dishwashers
3. Microwave Ovens
4. Vacuum Cleaners
5. Washing machines
6. Water Purifiers
7. Air conditioners

LG gives tough competition to Samsung and other top brand companies due to its ability to have a complete chain of products. If you look at LG’s product range, it is second to none. Thus, in LG’s marketing mix, you will find that the product is the brand’s topmost competitive advantage.

LG Corporation, a South Korean conglomerate, has a diverse product mix that spans several industries.

The product mix of LG in 2023 is as follows (Source)

1. Home Entertainment: LG is renowned for its innovative products. This includes televisions, OLEDs, LEDs, Smart TVs, and audio and video equipment like soundbars, speakers, and Blu-ray players.
2. Home Appliances: LG offers a wide range of household appliances. Refrigerators: Featuring advanced technologies like InstaView Door-in-Door® and intelligent connectivity. Washing Machines: Including front-load, top-load, and combo washer-dryer models. Air Conditioners: Both residential and commercial models. Microwave ovens, dishwashers, and vacuum cleaners cover a broad spectrum of home needs.
3. Mobile Communications: Although LG announced in 2021 that they would be exiting the smartphone business, their product portfolio up to that point included Smartphones Featuring models from the LG G series, LG V series, and more. Tablets: For consumer and business use. Smartwatches and Accessories: These include wearables integrated with health and fitness features.
4. Vehicle Components Solutions: LG is actively involved in the automotive component sector, focusing on Electric Vehicle Components, Such as batteries and infotainment systems. Advanced Driver Assistance Systems (ADAS): Enhancing vehicle safety and convenience.
5. Business Solutions: Catering to business and industrial needs. Commercial Displays: Including digital signage and commercial TVs. Solar Panels: Focusing on renewable energy solutions. Security Solutions: CCTV and surveillance products. IT Products: Like monitors, cloud storage solutions, and more.
6. Life Sciences: A relatively newer venture for LG, focusing on health, beauty, and medical devices.
7. Energy Solutions: Concentrating marketing efforts on energy storage and management systems.

LG’s product mix showcases its commitment to innovation and technology across various sectors, from consumer electronics to industrial solutions.

LG Place Strategy

LG Electronics serves a worldwide market with five business units in nearly a hundred and ten locations. Its aim is rapid and fast growth, which globalization can only achieve. It started its overseas operation in the USA. To sell its products, LG has tied up with several distributors responsible for distributing them efficiently and timely with minimum fuss. In India, the company realized it had to be innovative to capture the market share. Therefore, it sent vans with company logos to every part of the country, sometimes covering a distance of 5000km in a month, to increase awareness about its brand.

Next, it opened manufacturing units in places like Noida, Bhopal, etc. The company tied up with retailers for the direct sales of its products and distributors for the channel sales. LG has 46 branch offices that work directly with every field of distribution. A policy of regional distribution is maintained, and they follow the policy of stock rotation. LG products are available very easily at all the malls and supermarkets. The company has its well-maintained showrooms to provide every service to its customers. Online shopping for LG products is also possible at every shopping site. LG’s exclusive showrooms are known to be the most profitable for retailers because of LG’s product depth. Excellent distributors and the company’s focus on the supply chain are the two reasons for the success of the place element in LG’s marketing mix.

LG’s place strategy is as follows:

1. Global Manufacturing and Assembly Plants: LG operates a network of manufacturing and assembly plants worldwide, enabling efficient production and distribution of products in key markets, such as South Korea, China, the United States, and Europe.
2. Strategic Location of Facilities: The company strategically locates its facilities close to major markets and suppliers, reducing transportation costs and time and enhancing supply chain efficiency.
3. Extensive Distribution Networks: LG utilizes a vast network of distributors and retailers, including online platforms, ensuring wide availability and accessibility of their products to consumers globally.
4. Partnerships with Local Entities: In various regions, LG partners with local entities for better market penetration, understanding local consumer preferences, and complying with regional regulations and standards.
5. Investment in Logistics and Supply Chain Technology: LG invests in advanced logistics and supply chain technologies, such as smart technology, automation, and AI, to optimize inventory management, delivery speed, and overall operational efficiency.

LG Pricing Strategy

LG’s pricing policy consists of “cost plus fixed markup.” It means that the pricing policy consists of the product’s cost and a reasonable profit. A special team has been appointed to research the global market in detail. Here, the prices of its competitors are collected along with the consumers’ thoughts through extensive research. Every factor is thoroughly analyzed, and after evaluating its cost and the market research, the actual price of a product is determined. When the company launched its products in India for the first time, they were all of high range, but later, as the company opened its manufacturing units, it was able to lower the prices of the products.

LG Electronics has decided to follow a policy of price competitiveness for the rural areas. To reach out to the rural base in every nook and corner, it has decided to reduce the prices as an increase in volume will result in huge revenues and profits.

LG’s pricing strategy demonstrates its nuanced understanding of market dynamics and consumer behavior:

1. Value-Based Pricing: LG employs a value-based pricing strategy, setting prices primarily based on the perceived value of its products to the consumer. This approach is evident in their premium offerings, like OLED TVs, where pricing reflects cutting-edge technology and superior quality.
2. Competitive Pricing: In highly competitive segments like smartphones and home appliances, LG strategically prices its products to be competitive with other major brands. This involves balancing product features, innovation, and cost to offer consumers compelling value without a price war.
3. Skimming Strategy for New Technologies: LG often adopts a price skimming strategy for new and innovative products. This means they initially set higher prices to a target audience of early adopters willing to pay a premium for the latest technology, subsequently lowering prices over time as the product becomes more mainstream.
4. Psychological Pricing: LG also employs psychological pricing tactics to attract customers and make their products more attractive. For instance, pricing a product at $999 instead of $1000 can significantly influence consumer perception and boost sales, capitalizing on the psychological impact of price points.
5. Promotional and Seasonal Pricing: LG frequently uses promotional pricing strategies, such as discounts, bundling offers, and seasonal sales, to drive short-term demand and clear inventory. This is especially prevalent during holiday seasons and major sales events.
6. Dynamic Pricing: In certain categories, LG leverages dynamic pricing, where prices are adjusted based on market demand, competition, and other external factors. This approach helps them stay competitive, gain market share, and maximize profit margins.

Overall, LG’s pricing and marketing strategy is a sophisticated blend of market-driven and consumer-centric approaches to establish a strong market position while maximizing profitability. They continuously monitor market trends and consumer preferences to adjust their pricing strategies accordingly.

LG Promotion Strategy

LG Electronics has always believed in the concept of promotional advertisement. Direct communication with the consumer is necessary to sell its products. Hence, its advertisements can be seen throughout the year on television, magazines, newspapers, and the Internet. The brand also discounts retailers and distributors who advertise regularly and open exclusive shops for LG. Advertising is the maximum for newly introduced products and those with a high turnover, like panels and refrigerators.

To maintain its brand name, the company is accustomed to inviting famous personalities from the entertainment field and sports TV commercials. For example, Kim Tae-Hee, a famous actor in China, is its brand ambassador, whereas in India, Akshay Kumar, a famous Bollywood actor, has acted in LG commercials. LG became the first brand to sponsor the 1999 and 2003 cricket World Cup. LG has also sponsored the ICC Awards and Formula-One from 2009 to 2013 for five years.

LG’s promotion strategy is as follows:

1. Integrated Marketing Communications: LG utilizes a mix of advertising, public relations, and digital marketing strategies, leveraging both traditional media and online platforms to reach a diverse global audience effectively.
2. Sponsorships and Partnerships: They engage in strategic sponsorships and partnerships, particularly in sports and entertainment, to enhance brand visibility and connect with consumers on a more personal level.
3. Product Demonstrations and Consumer Engagement: LG focuses on interactive product demonstrations and consumer engagement activities, such as sporting events, experiential marketing, and social media campaigns, to showcase its innovation and build brand loyalty.

Some Recent Video ads and Print ads of LG are:

https://www.youtube.com/watch?v=mWkmI9RfxrI

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