LG in India: Reinventing the Brand
As LG Electronics India Limited’s (LGEIL) tenth birthday approached, the Indian subsidiary of Korean-based LG Electronics was taking stock of its achievements and the challenges that lay ahead. At its inception, LGEIL had been driven by two desires: to build a premium brand and to rank number one in market share in each and every category in which it operated, which included colour TVs, refrigerators, washing machines, microwave ovens, air conditioners and vacuum cleaners. It had reached and surpassed the latter benchmark three years ahead of schedule, having become the dominant player in all categories by 2004 – a remarkable achievement for a late entrant. However, it had also become a brand with mass appeal reinforcing the prevailing idea that Korean brands were cheap alternatives. The decision focus of this case is what should LG do to restore its original premium position while maintaining its appeal to the masses.
This is a complex and challenging case that works well with advanced MBA students as well as EMBA and executive participants. It can be used to address the central branding challenges facing LG while simultaneously exposing participants to both the opportunities and challenges of the Indian marketplace.
To address the branding challenge of reinventing itself as the premium brand it desired to be, while at the same time grabbing volume, the case discussion needs to consider three elements. First, what should LG’s positioning platform be? That is, what should be the key differentiating associations of the LG brand? This discussion needs to encompass the sub-issue of how should LGEIL harmonize between the needs of positioning in India with the corporate positioning mandate that it faced. Second what could the marketing team propose to take the LG brand where it needed to go in terms of tangible marketing actions?
This again has two key discussion areas. First, what role would PCs and mobile phones play in this endeavour? Second, how should LG manage its distribution, going forward. Both the product and distribution questions are key to the success of LG’s premiumization goal. Third, beyond addressing the issue of how to refurbish the image of the LG corporate brand, a second brand-related question was how LGEIL should manage the de facto portfolio of product brands that it had ended up creating?
Stated another way, LGEIl needed to create a harmonious brand architecture that would enable it to, on the one hand, move up-market with the corporate brand, while on the other, appeal to the mass segment to make volume gains.