July 09, 2008


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Increasing competition creates stress on marketing managers
By  : Mrs. Rumi Dasgupta

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In December 2002, Samsung reported a sales turnover of Rs 30 billion with a growth rate of 20% (Refer Table I). Aggressive marketing had clearly contributed to Samsung's success. Said Rajeev Karwal, chairman and managing director, Electrolux Kelvinator Ltd, "Samsung's success is the result of a variety of factors such as competitive pricing, aggressive advertising and a tightly-run administration."


According to Samsung's former vice-president marketing, S.S. Lee: "The Team Samsung theme will be leveraged right through the year, with a concentrated burst in the first quarter to coincide with their place of the ads featuring the cricketers, Samsung launched its - 'Team Samsung. India First' campaign all over the country in December 2002. Said Arun Mahajan of Mudra, Samsung's ad agency, "The focus has been to evolve concepts to do with the players, to promote the cause of cr
icket and patriotism.'' The copy of the print ad read, 'With Team Samsung, It's India First.''


According to Samsung's former vice-president marketing, S.S. Lee: "The Team Samsung theme will be leveraged right through the year, with a concentrated burst in the first quarter to coincide with the World Cup. Analysts felt that the ad campaign would enable Samsung to effectively leverage the cricket craze in the country, and increase awareness of its brand. In December 2002, Samsung reported a sales turnover of Rs. 30 billion with a growth rate of 20%. Aggressive marketing had clearly contributed to Samsung's success. Rajeev Karwal, chairman and managing director, Electrolux Kelvinator Ltd, said "Samsung's success is the result of a variety of factors such as competitive pricing, aggressive advertising and a tightly-run administration."


1)       LGs Marketing Strategies in India:-


The case examines the marketing strategy of LG Electronics in the Indian market. It provides a detailed account of LGs strategies for gaining market share by examining its approach to product, pricing, distribution and promotion. The case also provides insights into the future prospects of the company in light of the increase in competition and the slowdown in the consumer electronics market.


In December 2002, the Managing Director of Francis Kanoi Marketing Services, Francis Xavier stated "LG's success is more related to marketing than technological superiority."


In November 2002, LG Electronics India (LG), one of the leading consumer durables companies in India, launched advertising campaigns featuring cricketers. LG announced that it would release 22 ad films featuring world-class cricketers to strengthen its association with cricket (Refer Exhibit I). The campaign, 'Cricket First,' which featured captains of the 14 teams participating in World Cup 2003, highlighted the spirit of cricket with a tagline, 'Captains of Cricket World, for the Captain of Consumer Electronics and Home Appliances.' The company announced that it would spend around Rs. 400-500 million on advertising during the World Cup. Analysts felt that LG might reap rich benefits by associating itself with cricket in a cricket crazy country like India. Analysts felt that LG was able to achieve a leadership position in all these segments because of its aggressive marketing strategy in India.. Since 1997, when LG entered India, it has emphasized on marketing. Analysts felt that LG was trying to sell a brand of consumer durables using an FMCG marketing model, and was trying to create a mass market for a brand, which had a premium image. Like the marketing of FMCG products, marketing was heavily dependent on advertising. Its advertisement spends to sales ratio at 5-6% of sales was very close to that of FMCG giant HLL. LG's use of the FMCG model was not limited marketing alone. Even at the retail and trade level, LG followed the strategies of FMCG companies.


By 2002, LG was the market leader in Colour Televisions (CTVs), air conditioners, microwave ovens, semi automatic washing machines and frost-free refrigerators


2)       Nokia's marketing strategy: A need for change


NO DOUBT THAT the products from the Finnish company, Nokia, are some of the very best in the world, but the company still hasnt found a profitable way to market its goods. The very reason that other mobile phone companies are fast eating up Nokias market share is their superior (yet simple) marketing practices.


Motorola and Samsung must now be in the FUW (frequently used words) list in Nokias board meetings. These companies have made Nokia pay dearly for its rudimentary approach in marketing its phones. The aggressive marketing practices followed by Motorola have hit Nokia very hard and it is losing very crucial global market share every month to its American competitor.


 

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