LG Electronics
Founded in 1947 as Korea's first chemical company, LG evolved into the nation's premier electronics manufacturer by 1958 with its foray into home appliances In 1995, the company rebranded from Lucky-Gold Star to LG, marking a new corporate identity With over 65 years of history, LG Electronics stands as a global leader and innovator in consumer electronics, employing more than 93,000 individuals across 120 operations worldwide The company generates annual revenues exceeding $49 billion and operates through five key business units: Home Entertainment, Home Appliance, Air Conditioning, Information Technology, and Mobile Communications.
LG Electronics Vietnam (LGEVN), a subsidiary of LG Electronics Global, was founded in 1995 and employs 850 staff across five locations: Hanoi, Ho Chi Minh City, Can Tho, Nha Trang, and Da Nang The company operates two factories in Hai Phong and Hung Yen and generates annual revenues exceeding $350 million USD.
+ Vision: Become TOP 1 Electronics companies in Vietnam
+ Objective:Achieve revenue 400 million USD in 2012 and Lead in Premium Segment for almost product (HA, HE, AC, IT, MC)
+ Mission: bring value to customer, share holder & people
LG laptop
LG laptops, originally launched in Korea in 2000 under the name Xnote, are now among the top 12 laptop brands globally, boasting a notable market share of 5-7% in Europe The brand has established a presence across various Asian countries, including Australia, India, Thailand, and Singapore, offering a comprehensive lineup that ranges from entry-level models to premium options like ultrabooks and 3D laptops In Vietnam, LG laptops are currently available through small IT shops and online platforms, often through unofficial channels However, LG Electronics Vietnam (LGEVN) is set to officially launch these products, aligning them with their monitor offerings under the same distribution system and development strategy within the IT division.
Note: Influence level from High to Low
LG organizes its marketing activities by division—Home Entertainment (HE), Home Appliances (HA), Air Conditioning (AC), Information Technology (IT), and Mobile Communications (MC)—rather than by specific activities such as media or promotions Consequently, the marketing strategy for the IT division is primarily guided by product management (PM) and heavily influenced by the sales team, with varying input from other departments Additionally, a Corporate Marketing team oversees the overall branding efforts for the LG brand.
Vision and Objective of the project
LGEVN aims to become the leading company in Vietnam by enhancing its sales performance across various product categories Currently, its IT sector is struggling due to a decline in desktop demand and a rising interest in laptops, yet there is no plan to introduce laptops This project focuses on developing a marketing strategy for launching LG laptops in Vietnam between 2012 and 2014, with goals to expand product offerings, achieve 5-7% of LGEVN's turnover, enhance brand awareness to 90%, and capture a 3-5% market share Key considerations for a successful launch include selecting between entry-level or premium models, identifying the target market (B2C or B2B), choosing target customers (such as professionals, entertainers, or students), and deciding whether to compete directly with Samsung or target a different competitor A thorough analysis of internal and external factors is essential to address these strategic questions.
Scope and Limitation of Project
The project aims to analyze the IT market and consumer behavior across Vietnam, with a particular focus on Ho Chi Minh City, which accounts for over 50% of the market in both quantity and value Conducted between 2012 and 2014, the study will specifically target laptops, excluding netbooks and tablets from its scope.
Methodology
To gain a comprehensive understanding of the laptop market, we will conduct desk research utilizing data from reputable sources like GFK, IDC, and Display Search This analysis will inform the development of a robust 360-degree marketing plan aimed at successfully introducing LG laptops into the Vietnamese market.
SITUATIONAL ANALYSIS
Environment analysis (PESTEL)
This is relating to government controlled elements, profound changes in political philosophy, laws, and taxes
Year 2012, no more support from Government for VAT (value added tax) like in
2009, VAT for IT products and accessories are now fixed at 10%
At this moment, VN are on the way set up the E-Government which has high demand about PC
The Vietnamese government acknowledges the significant threat corruption poses to its legitimacy and is actively working to combat graft within its ranks This commitment signals a positive shift towards reforming a market-oriented economy in Vietnam As a result of these efforts, average incomes are expected to rise, enabling consumers to access high-tech products more easily.
GDP growth rate in recent yearsis really unstable &have down trend especially in Q1&2 of 2011 under the influence of economy downturn
Figure 2.1: Vietnam – GDP Year-On-Year Growth
(Source: Vietnam Economic Times, 2009 estimate by Vietnam Government;
General Statistics Office of Vietnam)
Compare with other countries in Asia, Vietnam GDP is also down while these others have increased, 2010 & 2011 are really un-good years for VN
Figure 2.2: GDP Growth – Vietnam versus ASEAN countries
(Source: World Bank Report June 2011)
In February 2011, the banking interest rate experienced a sudden increase from 19,500 to 20,870 VND, surpassing 7%, which aligned with the floating interest rate This volatility posed significant challenges for IT companies that rely on importing 90% of their materials and accessories from overseas.
Table 2.1: Banking Interest Rate during 2011
(Source: Vietnam Eximbank, www.eximbank.com.vn)
Inflation is in same situationand reach 18.2 % in 2011 (details is in below tables)
Figure 2.3: Vietnam – Inflation Rate Evolution
(Source: World Bank, General Statistics Office& Ministry of Planning and Investment)
Consumer Confidence index 2011 is also down and down compare with 2010
(Source: MasterCard Worldwide Index of Consumer Confidence)
In 2011, IT companies faced significant challenges due to inflation, an economic downturn, and fluctuating prices of gold and the USD, leading to reduced consumer spending Despite these difficulties, the demand for laptops remained strong, particularly for budget models priced under 10 million VND, which saw a remarkable growth of 31% in quantity and 24% in value compared to 2010 (Source: GFK data Nov '11) Conversely, the desktop market experienced a substantial decline, with a 25% drop in quantity and 30% in value, largely due to decreased end-user demand and government budget cuts affecting public projects that traditionally favored desktops The market showed brief improvement during the Q3 back-to-school season, but was soon impacted by a severe shortage of hard disk drives (HDD) following devastating floods in Thailand, which disrupted production for major manufacturers like Western Digital and Seagate This led to a 5% increase in average laptop prices from October 2011, with prices rising by at least $25 in Vietnam While brands typically lower prices during the back-to-school season to attract customers, this year they were forced to increase prices, which may have affected consumer demand Experts predict that the situation may stabilize by Q2 of 2012.
Vietnam, with a population of approximately 89.5 million as of 2010, boasts a youthful demographic, where individuals aged 18 to 40 represent over 60% of the population (Source: General Statistic Office, website: www.gso.gov.vn) This emerging market presents significant opportunities for IT companies, as millions of young consumers are expected to enter the market in the coming years.
As of June 2010, internet usage in the region reached 24.3 million users, representing 27% of the population, and this demand is expected to grow rapidly in the coming years, creating significant opportunities for the IT market.
Table 2.2: Internet Usage and Population Statistics
(Source: Internet Usage Stats & Marketing Report, www.internetworldstats.com)
The latest innovations in technology have led to the development of ultra-slim laptops, such as ultrabooks, and 3D laptops that are free from glass components These advancements emphasize eco-friendly technology, which not only saves energy but also promotes environmental safety Moreover, cutting-edge technology is effectively narrowing the price gap between laptops and desktops, making high-performance computing more accessible to consumers.
Microsoft will launch Windows 8 in Quarter 4 of 2012 which can lead to many changes, revolution in PC field
Vietnamese consumers prioritize price over environmental and social responsibility when selecting laptops However, several IT companies are now focusing on eco-friendly technology, such as energy-saving features and environmentally safe materials For instance, LG has developed a laptop that utilizes a natural battery made from a mix of natural gas, methanol, and other liquids, along with an OLED screen that is environmentally friendly While this innovative product is ready for market launch, its price remains a significant concern for potential buyers.
Legal and laws are covered by the political environment Up to now, no any of special law for IT market in 2011& 2012 was announced.
IT market analysis
Market size: According to GFK report Nov’11, total market size of laptop is:
- Value: 630 Million USD (average unit price: 600 USD/ 1 laptop)
Laptop accounts for 56% of total IT market The market is on the way of developing with high growth rate in both quantity (31%) and value (24%)
Figure 2.5: Total laptop market size from Q1/2009~Q3/2011
Market players: All most famous IT players all around the world such as Dell, HP,
Sony, Acer, Asus, Samsung…join this market This is really a high competitive market Acer, Dell, HP are top 3 market leaders
Figure 2.6: Laptop market share between brands
The primary customers in the laptop market are students and white-collar workers seeking devices for studying and professional use This customer base is segmented into various categories: Premium seekers, who prefer laptops over $1,000 (7% market share), Entertainers, who opt for devices priced between $800 and $1,000 (16% market share), Bargainers, who look for laptops in the $600 to $800 range (20% market share), and Simple access users, who favor budget options under $600, dominating the market with a 54% share Price remains a crucial factor for consumers, with the low-price segment being the most appealing, capturing more than half of the overall market.
Channel: Laptop is now sold in three main channels They are:
Telecom retailer (TR) : this is the shop where mainly sell mobile phone (60%) such as Mobile World, Vien Thong A, Phuoc Lap…
A Consumer Electronics (CE) store primarily focuses on selling a wide range of CE products, accounting for approximately 90% of its inventory Popular items include televisions, washing machines, refrigerators, home theater systems, and air conditioners, with a smaller selection of IT products available Notable CE stores in the market include Nguyen Kim, Phan Khang, Cao Phong, and Pico.
Traditional IT shops, such as Phong Vu, Hoan Long, and Tran Anh, have long been the preferred choice for customers seeking IT products like laptops, desktops, and accessories due to their professionalism However, recent trends indicate a significant shift towards consumer electronics (CE) channels for purchasing these items To adapt to this changing landscape, it is crucial to consider building an effective distribution system that meets evolving customer preferences.
Figure 2.7: Laptop market channels (Source: GFK data)
Forecast from professional research companies GFK, IDC, Display Search, laptop market in 2012 will be as following:
- Market size: 1,250,000 laptops or more
In 2011, laptops emerged as the only IT product with a positive growth outlook, continuing to show promise in 2012 This market presents significant opportunities for industry players and remains appealing to consumers.
Figure 2.8: Growth rate of IT market from Jan ~ Nov’11
(Source: GFK Market Information (GMI) report)
Porter five forces model from Michael Porter will help us to understand more about current status of laptop market through analyzing 5 factors as below:
(Source: The Five competitive Forces that shape strategy” by Michael Porter,
The laptop market is highly competitive, with major players like HP, Dell, Sony, Toshiba, Samsung, Acer, Asus, and Lenovo vying for market share In this fierce environment, LG Electronics Vietnam (LGEVN) faces the significant challenge of differentiating its laptops from those of its rivals.
The threat of new entrants in the laptop market is low, as most players are well-established, despite the absence of significant barriers to entry While a few small companies, such as Fujitsu from Japan, Axioo from China, and Hanel from Vietnam, have attempted to enter the market, their low sales and margins make them unattractive to dealers and distributors Competing in this challenging market proves to be difficult for newcomers.
The bargaining power of suppliers in the IT market is limited due to minimal differences in material costs, design, quantity, and after-sale services among them Most suppliers focus on the low to middle price segments, offering acceptable quality, warranty, and after-sale support As demand for laptops continues to rise, IT manufacturers are consistently launching new models to attract a broader customer base.
Substitutes:In this part, we mention about other industries producing product covering the same need In this market, we see this need as desktop and tablet
- Desktop:Portion between Desktop and Laptop in 2011 is 56% vs.44%, in
By 2012, the forecast indicated a balanced market with 50% for desktops and 50% for laptops, but by 2013, laptops were expected to dominate with over 60% market share compared to less than 40% for desktops This trend highlights the increasing demand for laptops, which offer greater convenience and ease of upgrading to higher configurations with appealing designs With minimal differences in quality and price, laptops are poised to replace desktops in the near future.
In 2011, the tablet market size was approximately 70,000 units, representing 6.7% of the laptop market (Source: GFK 2011) Tablets are increasingly appealing to customers due to their portability, lightweight design, fashionable appearance, and multifunctionality However, their high price point limits them to the premium segment, primarily for entertainment purposes As a result, consumers remain hesitant to replace their desktops or laptops with tablets.
The bargaining power of customers in the laptop market is significant, with two primary groups: dealers (B2B) and end-users (B2C) The sheer volume of these customers amplifies their influence, especially as brand recognition plays a crucial role in negotiations Price sensitivity is particularly pronounced in the low to mid-range segments, where even a slight price difference can drive customers to competitors The rise of the internet has empowered consumers to easily access information, allowing them to compare brands and weigh their advantages and disadvantages To attract and retain customers, it is essential for brands to differentiate themselves in a crowded market.
2.2.3 Market trend and market demand:
There are some big trends for laptop market in 2012 as below:
The demand for affordable laptops with decent specifications is significant, particularly for those featuring a Core i3 processor, 2GB RAM, and a 500GB HDD This segment primarily targets students and pupils who require a reliable device for their educational needs.
Secondly, the market is really expecting for the launching of Ultrabook, a new
The Intel definition of an Ultrabook describes it as a lightweight, slim, and stylish laptop featuring high-performance configurations, enhanced responsiveness, extended battery life, and improved security, all at a competitive price point IT experts predict that by 2014, Ultrabooks will capture over 50% of the total laptop market.
Ultrabook will become trend in 2012
In the past, Ultrabooks were synonymous with high-end models from brands like MacBook Air, Sony Vaio Z, and Dell Adamo XPS, priced between $1,500 and $2,500 However, the landscape shifted in early 2012, when around 50 Ultrabook samples were showcased at the CES Exhibition in the USA The introduction of Intel's Ivy Bridge microprocessor and Microsoft's Windows 8 further propelled Ultrabooks into the spotlight, making them the hottest trend in the laptop market.
The Apple MacBook Air remains the leading ultrabook on the market, setting the standard for competitors As a result, many brands have developed their own ultrabooks specifically to rival the MacBook Air Here are the latest images and details of ultrabooks from various manufacturers.
Premium products featuring advanced technology, like 3D laptops with or without glass, consistently attract significant customer attention These innovative tools serve as excellent branding assets for companies aiming to establish themselves as market leaders.
Competitors’ analysis
Among many players of laptop market, should consider these four brands Acer, Dell, HP and Samsung as the potential competitors of LG Because:
- Acer, Dell, HP are now top 3 market leaders
- Samsung has same origin - Korean brand name- and is the main competitor of LG in monitor market (SS: 1 st position with 35% market share, LG: 2 nd position with 28% market share)
Figure 2.10: Laptop market - competitor analysis
Acer strategically targets the low segment of the market with competitive pricing, while HP and Dell maintain similar offerings across various aspects Samsung (SS) and LG share several characteristics, including reasonable pricing, elegant design, and satisfactory after-sale service, although LG's brand awareness is lower due to its recent entry into the market Therefore, LG should use Samsung as a benchmark to enhance its strategy for entering the Vietnamese market.
Samsung laptops have gained significant popularity globally, ranking among the top ten laptop brands since 2008 By 2010, they secured the fourth position in the Chinese market, praised for their appealing design, vibrant colors, and robust battery life Known primarily for their TVs, mobile phones, and monitors, Samsung officially entered the laptop market in early 2010 with four models from the N and R series, priced between 9 to 20 million VND As of November 2011, Samsung's laptop market share in Vietnam reached 7.1%, reflecting the company's strong commitment to succeeding in a competitive landscape For more information, visit Samsung's official website at www.samsung.com/vn.
+ Premium (Thin & light): Series 9 with 2 models: NP900X3A-B01VN 29.9M VND
The NP900X3A-A01VN, priced at 34.9M VND, features a super bright LED screen and a lightweight Duralumin design, making it both ultra-thin and ultra-portable With fast start technology and a compact design available in five vibrant colors (white, black, pink, orange, and blue), this laptop allows you to carry less while maximizing productivity.
+ Performance: 5 models of Series 3 NP300V4ZH/I with price from 11.9 M~15.4
These multimedia PCs, priced at M VND, are equipped with advanced graphics and cutting-edge processors, making them ideal for meeting all your entertainment needs while seamlessly accommodating a busy lifestyle.
Introducing Samsung's new entry-level laptops, including the Series 3 (NP), Series 4 (RV), and Series 5 (RV), priced between 9.9 million VND and 13 million VND These models feature a sleek design and basic configurations, making them ideal for everyday tasks, whether for work or play.
Review Samsung’s MKT activities from launching time up to now: a Above the line:
Upon its initial launch, Samsung heavily invested in media to boost brand awareness, executing frequent print advertisements and public relations campaigns in prominent IT newspapers and magazines like PC World, Dien Tu Tieu Dung, and Echip Over the years, Samsung has consistently maintained its position as the leading advertiser in the industry.
Figure 2.11: Budget for Media of 6 biggest Electronics brands (2008~2011)
(Source: TNS media/ TKL – Jan to Nov 2011)
SAMSUNG SONY PANASONIC TOSHIBA LG SHARP
Samsung enhances its brand awareness significantly through a strong focus on digital marketing strategies, including community microsites, online social games, contests, forums, and banner ads.
Besides that, they did sponsor for a lot of sport, social activities &joined to all most
IT exhibitions (VCEW, FECIT) to reach as much target customers as can b Below the line: Samsung focus on these main things
Floor salesmen (FSM) significantly impact consumer decisions, with research indicating that 40% of end-users are influenced by them in stores Understanding this, SS implements effective policies to support FSM, including gifts on special occasions, high incentives for popular models, and training courses Additionally, SS has established a product consultant system with promoters to directly engage customers and facilitate laptop sales, proving to be an effective strategy for promoting a new brand like SS.
Throughout the year, particularly during the Back to School season from August to October, we implement numerous promotional programs aimed at end-users These promotions are designed to be highly appealing, effectively driving sales and boosting product demand.
The role of dealers and distributors who directly supply products to end-users is crucial for enhancing brand familiarity Their ability to offer high margins, flexible policies, and consistent product availability significantly contributes to the growing recognition of the Samsung laptop brand among consumers.
Samsung successfully launched its laptops by implementing a strategic approach that prioritized above-the-line (ATL) marketing to capture end-user attention, followed by below-the-line (BTL) efforts to drive sales As a result, within two years, the company increased its market share to 7% while maintaining a strong presence and display status in key retail locations.
SS has heavily invested in branding and reduced product prices to meet targets, making profit and loss management challenging Currently, SS concentrates on key IT shops in three major cities: Ho Chi Minh City, Hanoi, and Da Nang To enhance growth and reach a larger customer base, SS should consider expanding into provincial areas and consumer electronics shops where there is significant demand.
& middle segment) Another thing, SS still lack of creative in-store communication material ¬ enough point of purchase (POP) all the time, all the place.
Company analysis
The value map outlines LG's market landscape, providing insight into the company's current position, including key stakeholders such as customers, clients, suppliers, and other essential parties like facilitators and distributors By analyzing the products and services exchanged, along with the flow of information, we can develop a comprehensive strategy that addresses all interconnected elements within the map.
Figure 2.12: Value map of LG
According to GFK, IT market includes laptop, desktop (monitor), printer, Multi- function Dev &Digital storage LG has No.2 M/S in MNT(28% after Samsung 35%)
&No.2 M/S in DS (30% after Asus 40%) but when LG in HQ take a survey to measure the brand awareness of total LG brand in VN, just 1% was contributed by
LG IT product This is the same for SS It doesn’t mean that brand awareness of
The current performance of SS laptops indicates that both LG and SS need to significantly enhance their focus on IT products, particularly laptops Despite this challenge, both companies possess a substantial competitive advantage due to their extensive experience in the industry.
LG is recognized as a leading brand in consumer electronics (CE), with 48% of potential customers identifying it as a top choice for home entertainment (HE) and 30% for home appliances (HA) This strong reputation presents an opportunity for LG laptops to capture consumer interest and enhance brand awareness.
Figure 2.13: Top of mind Survey for LG
(Base: Total of 999 respondents between the ages of 15-49)
(Source: BCR report of LG – 2H2011)
Base on above analysis about all external andinternal factors, we can summarize in a SWOT table as below:
High awareness (95%) for LG brand, top 2 brand in IT Field (M/S~30%) for
LG laptop has advance technology
(ultrabook, 3D) with standard global for quality, all laptop are produce in Korea, no sampling at any other countries
LG laptop panel is no.1 both for quality
&price cause it comes from LG Display
Low contribution ratio (1%) to LG brand, low awareness
Quality is acceptable but after sale service is not good
Price is not competitive & fail in control market price for previous IT product (Monitor & DS)
Company, one of LG sub-company All most TV/mobile/laptop producers buy panel from this company
Besides that, LG laptop has nice, elegant, colorful, slim design
Have available distribution system for each kind of product: CE (HE, HA, AC),
Mobile phone and IT Can utilize this for laptop
Current distribution system for IT product is just strong in IT traditional but weak in CES &TR
Lack of support from HQ about strategy, PRM, budget, guideline
Facing with newcomer’s difficulties: no support from IT platform manufacturers (Intel, Microsoft, Google)
Not deeply understand the end-users, no experiences in laptop field in VN
Potential market with young population:
Game Online develop very fast
Demand for laptop day by day increase compare with desktop: year 2012: desktop: laptop – 50%: 50%, year
Microsoft, Intel does very well the co- marketing with laptop producers
VN are on the way set up the E-
Government which has high demand about PC
Tech innovation brings to the market better product with lower price
Microsoft will launch Windows 8 in
Quarter 4 of 2012 which can lead to many changes, revolution in PC field
Fierce competition with many big competitors HP, Dell, Sony, Acer…
Main competitor Samsung is stronger in
IT field (M/S of Monitor 35%) and has launched laptop for 2 years with 7% M/S
The fluctuation of exchange rate (LG laptop: 100% import, not assembling in VN) make LG hard to control the price
GDP down, inflation up, consumer index down continue make a tough year for
VN economy so laptop market will increase but just equal or less than
Shortage of HDD -cause by flood in Thailand -can be solved up to Q2 of
2012 so LG will launch laptop in VN market after overcome this problem
Some non authority products are imported by smuggler
Tablet cannot replace but can take share from laptop
An effective strategy leverages opportunities by aligning them with strengths, while transforming weaknesses into strengths and threats into opportunities Key insights from the SWOT analysis can be utilized for this purpose.
- Use advance technology to develop new laptop with high configuration, new attractive function that can meet the requirement of the fast development of game online
- Focus more on young customers with brand advantages which make them your target customers
- Call for support, cooperation from IT platform manufacturers (Hardware: Intel, AMD…; Software: Microsoft, Google) and OEM vendors (Compal, Foxcon & WISTRON…)
- Strengthen after sale service to make it the strength to compete with others
- Invest more to the B2B segment, which is a very potential market with high demand and budget
To enhance the distribution of IT products such as monitors and laptops, it is essential to strengthen partnerships with consumer electronics stores and telecom retailers, leveraging the existing distribution systems used for other products like home appliances and air conditioning Additionally, it is crucial to eliminate the presence of unofficial laptops in the market to ensure product integrity and brand reliability.
- Utilize the economics of scale from LG Global network, get support from
HQ, and learn best practice from other countries in same region.
MARKETING STRATEGY
Segmentation
Market segmentation involves dividing a broad market into smaller groups of individuals with similar thoughts and preferences for specific products and brands For LG laptops, identifying the target market includes profiling customers who share common interests and inclinations towards technology and performance.
+ Student, pupil, white collar from 15~45 years old (focus more on female) whose top concern is elegant stylish design, following by price and benefits
LG initially aims to establish its presence in major cities such as Ho Chi Minh, Hanoi, Da Nang, Hai Phong, and Can Tho, targeting areas with a high concentration of potential customers The company plans to expand into other provinces once it has the necessary resources and capabilities.
Targeting
LG must develop a marketing strategy and promotional plan tailored to the preferences of the identified segment to effectively target its audience.
Positioning
Positioning enables organizations to shape how their products are perceived by the target audience Each brand effectively targets specific market segments, and LG is no exception The company diligently works to establish a strong image of its laptops in the minds of potential customers through strategic positioning.
LG want to position its laptop as Smart & Stylish: “Aspiration for Leap – Ahead”,
LG want to offer emotionally immersed and technologically amazing experience by providing smart technology and stylish design with reasonable price for those who have sophisticated tastes for their lifestyle
LG laptop is the harmony between smart technology and stylist design
- Mention about SMART COMPUTING, we think of these below key USPs:
LG is a global leader in 3D technology, renowned for its innovative 3D FPR technology, which has earned the distinction of being the first brand to launch a 3D FPR laptop worldwide This laptop boasts a flicker-free 3D certification from TUV Rhineland, a prominent authority in technical and safety certification Recently, LG has made significant strides by introducing a groundbreaking 3D laptop that operates without the need for glasses, marking a major advancement in technology.
Display Technology: with IPS panel, LG laptop provide prefect picture with 178 degree wide viewing angle with more brighter, higher color realization
Smart Applications: smart share with expandability user experience seamless, without hassle among DLNA certified devices (World’s first DLNA certified notebook)
- Mention about STYLIST DESIGN, we think of:
Super Compact with slim bezel, 8% more compact compare with Macbook Air
Super Slim body 14.9mm (Macbook Air 17.2mm, Asus Zenbook UX31 18mm) &
Super slim LCD, up to 35% slimmer than competitors (ex: HP DV6 9mm vs LG P530 4.7mm)
Super Light: 25% lighter than competitors
Minimalist Design: simple, clean & modern
Many of LG laptop wins the design award from IF, one of the most world renowned design awards.
MARKETING TACTICS (4Ps)
Product
LG in HQ develop 5 main laptop lines as below:
- The most premium laptop Z series -Super Ultrabook- with super slim, super light, elegant design, fast resume…
- The professional P series – Style meets Tech- with 3D tech and Smart share for working and also entertainment
- A series – Thrills by Tech- 3D laptop without glass, mainly for your gaming, entertainment
- S series – Smart for everyone- include entry models which are suitable for daily working, with acceptable configuration, nice design and reasonable price
Introducing the new V series all-in-one PC, designed to replace traditional desktop computers With its sleek, glossy, and modern aesthetic, this PC is perfect for those who prioritize style and design Additionally, it offers competitive pricing and impressive configurations to meet various user needs.
4.1.2 Product road map (PRM) for Vietnam market:
After considering internal and external factors, HQ’s guideline and main competitor’s product line up, LG decide to launch in Vietnam these below models:
- Companion (Z series): super ultrabook model name Z330
Experience the ultimate in portability with our super ultra-slim laptop, measuring just 14.9mm and weighing only 1.24kg The 13.3’’ display ensures a compact design, making it perfect for on-the-go use Stay connected effortlessly with an impressive battery life of 6 hours and instant resume in less than 2 seconds Enjoy seamless computing powered by a top-class Intel i7 processor, delivering 11 times faster multitasking capabilities with SSD SATA3 technology and 2.4 times quicker booting times, eliminating frustration and enhancing productivity.
- Gaming (A series – 3D without glass): just select 1 model A520 with 2 colors :
Black and red wine which are the hottest color and look of 2011
Experience cutting-edge 3D entertainment with Full HD FPR technology that reduces eye fatigue, enhanced by SRS Wide 3D sound and three times the advanced 3D graphics performance compared to Intel HD graphics Enjoy the power of the new Quad technology featuring a 50% faster 2nd Generation Intel Core i7 processor and high-performance NVIDIA GeForce GT540M graphics Plus, elevate your style with a premium brushed aluminum finish that complements a range of sophisticated color variations.
- Professional (P series, pet name: LG Blade): P430/ P530 with 2 colors black and silver
Experience the ultimate in sleek design with our super slim LCD at just 4.5mm, complemented by a 10mm bezel and a body thickness of only 23.8mm Weighing in at a mere 1.94kg for the P430 and 2.24kg for the P530, these models are the lightest in their class Crafted with a brushed aluminum finish and diamond cutting, our devices combine a slim profile with durable real metal covers, ensuring both elegance and resilience.
- Everyday (S series, pet name: Aurora): select 2 key models S430/ S530
Key USPs: Premium Crystalline Package Crystalline (Finish in Aurora Purple
The sleek and stylish design of the device features bold chamfering, while its next-generation performance is powered by a 2nd generation Intel Core i5 processor, offering 20% faster processing speeds and double the graphics performance Additionally, it enables seamless sharing of multimedia content, such as music, movies, and photos, among DLNA-enabled devices through LG Media Funtasia.
(Please see detailed configuration/ specification/ image in appendix)
Pricing is a crucial component of the marketing mix, directly influencing an organization's turnover, while the other three P's—product, place, and promotion—represent variable costs Effective pricing must align with these elements and reflect the supply and demand dynamics, as mispricing can lead to significant sales losses Key factors to consider in pricing include fixed and variable costs, competition, company objectives, positioning strategies, target audience, and their willingness to pay Organizations can implement various pricing strategies based on their objectives; for instance, LG targets increased brand awareness and market share by adopting distinct pricing approaches for its entry-level and premium models, positioning Samsung as its main competitor.
To effectively compete in the entry-level market, LG should set its prices at approximately 95% to 98% of Samsung's pricing for similar configurations If Samsung lowers its prices, LG can respond by adjusting its prices down to a minimum of 90% of Samsung's, ensuring competitiveness while considering cost factors.
- The key competitive models with LG laptop S series (S430/ S530) are Samsung laptop Series 4, 5 which price is from 9,9 M VND~13M VND so price LG will set for S series will be 9.5 M~12.5M VND
- P series P430/P530 will be set price from11.5M~15M depend on configuration compare with Series 3 NP300V4ZH/I of Samsung with price from 11.9 M~15.4 M VND
For premium model (ultrabook and 3D laptop): set the price high to reflect the exclusiveness of the product Details are:
The Ultrabook Z330 is priced between 30M and 37M VND, depending on the selected configuration Compared to the Samsung Series 9 NP900X3A-B01VN priced at 29.9M VND and the NP900X3A-A01VN at 34.9M VND, the Z330 offers a competitive price point, even with its premium pricing strategy.
- 3D laptop A520 without glass: price will be set around 30~35 M VND.
Place
According to GFK data, laptops are primarily sold through three channels: Telecom Retailers (8%), Consumer Electronics Stores (35%), and Traditional IT Shops (57%) While IT customers have traditionally favored purchasing from IT shops, there has been a notable shift towards Consumer Electronics Stores This change in consumer behavior should be taken into account when developing an effective distribution strategy for LG laptops.
Current distribution system for LG IT product (Monitor/DS):
- For premium models, LG sell directly to 4 big shops (Phong Vu, Tran Anh,
Nguyen Kim, Pico) where can easily sell out high price models
LG distributes its products through six major master dealers: IDC Sai Gon, IDC Ha Noi, Long Thanh, Dong Tam, Nguyen Khang, and Phung Vi IDC stands out as the largest dealer, accounting for 50% of total sales, primarily focusing on traditional markets These six master dealers supply products to approximately 1,300 resellers, with 75% specializing in IT and 25% in consumer electronics and telecommunications, ultimately reaching the end users.
- For B2B projects, LG can contact and sell directly Besides that, big shops and resellers can search and offer themselves
Figure 4.1: LG current distribution system for IT product (MNT/DS)
Evaluation: Good relationship with Master dealers, High coverage in big shop but weak in communication with B2B dealers so need to connect directly to them
FPT is the leading distributor in the laptop market, boasting nearly a decade of experience, followed by PSD with four years of expertise, and Digiworld (DGW) in third place These three master dealers are the primary channels through which most brands distribute their laptops to end-users.
- Samsung : DGW, FPT and Vinh Xuan
- Dell : DGW, FPT, PSD, Minh Thong
- Acer – No1 market share-: DGW, FPT, PSD, CMC
Figure 4.2: Portion in Acer’s distribution systems (2 nd haft of 2011)
(Source: Acer Mobile Computing team)
Based on the analysis of channel trends and the current state of the LG ITP team, as well as insights into the distribution systems of major competitors like Samsung, this article proposes enhancements to LG's laptop distribution strategy While maintaining the existing framework, it is essential to improve and expand certain elements to better compete in the market.
To effectively manage product stock and pricing, we sell premium models such as ultrabooks and 3D laptops directly to major resellers across three channels: TR, CE, and traditional retail, including Nguyen Kim, Phong Vu, and Mobile World.
- Utilize capability of old MD IDC to continue distribute for traditional IT channel and resellers in provinces
- Use new master dealers FPT and PSD to distribute LG laptop to potential channel CE store and TR
Establish a dedicated sales team focused exclusively on the B2B segment, such as laptops for education and healthcare Despite the relatively stable B2B demand in 2012 compared to 2011, largely due to government-controlled financial budgets, this segment continues to represent 25% of the total market.
LG must differentiate its laptops from competitors while effectively reaching end-users The primary goal during the launch phase is to capture market share, even at the expense of immediate profits To achieve this, it’s essential to familiarize end-users with LG laptops through incentives such as special pricing, increased margins for distributors, and attractive offers for resellers This strategy will enhance the appeal of LG laptops and promote wider distribution.
(Source: Internal data of ITP team)
Promotion
Promotion involves effectively communicating the benefits of a product or service to customers, rather than merely highlighting its features For a successful marketing strategy, a company must align its promotional efforts with its strategic goals During the initial launch phase from August to December 2012, LG aimed to enhance brand awareness among a broad audience through above-the-line (ATL) marketing activities In the subsequent phase starting in 2013, the focus shifted to increasing brand preference and sales volume by employing below-the-line (BTL) strategies targeted at young consumers who prioritize design, technology, and price The core message communicated during this campaign was "Smart Computing and Stylish Design."
To enhance brand awareness, companies often engage in various Above The Line (ATL) activities, including television commercials, public relations, sponsorships, exhibitions, print advertisements, and billboards However, in a competitive market characterized by intense rivalry and price wars, LG should prioritize cost-saving measures that deliver maximum value to consumers rather than over-investing in advertising Consequently, LG has opted to focus on public relations as its primary ATL strategy.
&digital MKT as the main tool -the most effective but less cost- as top priorities
Due to budget constraints, the TV commercial (TVC) will only be aired in cinemas (Megastar, Galaxy) and in office building elevators, rather than on traditional TV channels The campaign is set to launch in August and September, coinciding with the back-to-school season, and will run for two months Additionally, the TVC will be re-aired during the year-end holiday period, including Christmas and the Lunar New Year.
In today's digital age, print advertising has lost its effectiveness; therefore, it's essential to focus on key IT magazines and reputable newspapers like PCWorld, Echip, Stuff, Electronics World, and popular traditional outlets such as Thanh Nien and Tuoi Tre for launching new models and promoting any available promotional programs.
LG plans to limit its investment in out-of-home (OOH) advertising, opting for strategic placements rather than large-scale billboards The company will focus on eye-catching signboards near key retail locations where consumers purchase laptops, with an average cost ranging from $4,000 to $10,000 per board per year LG intends to utilize a maximum of 10 boards, allocating a total budget of $50,000 for this targeted advertising approach.
PR: to successfully PR for LG laptop, there’re 3 stages with continuous activities:
- Pre-launch stage: create buzz and excitement through not only PR writings
(advertorials, interviews, testimonials) but also combine PR, media, and online in order to maximize communication effectiveness
During the launching stage, LG aims to enhance brand awareness by inviting influential figures such as press representatives, brand ambassadors, celebrities, popular bloggers, and retail VIPs to the launch event This strategic approach aligns with the campaign slogan, “Smart and Style,” as these trendsetters can effectively sway public perception and establish the brand as a stylish choice.
LG should focus on enhancing its diversification strategy by integrating publicity efforts with PR writing and sponsorship activation A creative concept centered around innovative 3D technology—featuring a glass-free design and ultra-slim, lightweight, and compact features—will be collaboratively developed with a media agency to maximize communication impact and efficiency.
In the post-launch stage, LG focuses on enhancing consumer product trials and experiences to boost sales among diverse target groups The strategy includes maximizing product engagement through offline magazine tests, online articles, video reviews, and leveraging positive word of mouth from influential bloggers and social media activations.
Digital Marketing: this is the most effective way because all most of the target customers prefer searching information on the internet than the other ways
In 2011, LGEVN launched various digital initiatives, including Google AdWords and social media engagement, successfully establishing the customer interaction forum cuocsongtotdep.vn Additionally, they created micro-sites for new products, generating significant customer interest.
To elevate its digital marketing strategy for the new 3D laptop, LG should implement a comprehensive long-term corporate plan that integrates the launch of its 3D laptop alongside 3D TVs, mobile phones, and monitors This approach involves creating a unified marketing campaign that leverages both online channels and traditional media, while collaborating with retailers and shop websites to effectively disseminate product information and promotions By maximizing communication effectiveness and enhancing brand awareness through online engagement, LG can conduct surveys and discussions with end-users to gather valuable insights Additionally, crafting an engaging narrative around premium products like the Ultrabook and 3D laptop will allow customers to gradually immerse themselves in the LG laptop experience.
Another thing, use digital MKT to attract not only end-users but other B2B companies/ B2B project is also important
In the realm of IT exhibitions, significant events such as the Vietnam Computer & Electronics World in July, FECIT in November, and ECIT in December showcase leading brands unveiling their latest products and technologies to end-users LG should strategically choose the most relevant exhibition to participate in, ensuring maximum visibility and engagement with potential customers.
ATL communications target mass audiences through broadcast and published media, while BTL communications focus on niche markets Both strategies aim to build brand awareness, but BTL offers a more personalized messaging approach Unlike ATL promotions, which are challenging to measure, BTL promotions provide measurable insights that help companies assess their return on investment (ROI) These insights enable businesses to refine future BTL communications and tailor their messaging based on audience feedback.
In-store Communication: these are the most important activities to approach target customers at the place they see, touch, and buy the real product
Creating a dedicated private corner in retail shops is essential for showcasing LG laptops effectively; however, many IT shops are small and crowded To enhance first impressions for end-users, LG aims to secure a distinct space to display its laptops, allowing customers to touch and interact with the products If securing a private area is not feasible, LG should ensure its laptops are prominently featured in available shop displays that align with brand identity, while strictly adhering to display guidelines provided by headquarters.
Some laptop corner of brands at key IT shops
- Point of sale material (POSM):
These are standard POSM (poster, MAT, topper, wobblers, mini-banner, standee banner) developed from LG which help end-users to understand well the key
USPs and key message each model want to bring to them This is the cheapest but the most effective way to communicate with end-users in shops
Figure 4.3: LG’s standard POSM (Source: LG internal data)
Together with the display and POSM, LG should organize some small event at shop such as “Let’s discovery”, “3D Experience”…to let end-users trial the product
- Product consultant (PC)/promoter girl (PG)/ Floor salesman (FSM):
Many companies utilize direct Field Sales Management (FSM) in retail stores to effectively promote and sell their products to end-users For those with sufficient budgets, establishing a dedicated Product Creation (PC) team can further enhance their sales efforts Both FSM and PC are crucial in driving product sell-out.
Upon launch, the LG laptop team will choose the top 20 retail locations across the country and hire 40 sales representatives to operate in two shifts These representatives will be responsible for introducing, consulting, and selling LG products, as well as managing display areas and gathering market insights to report back to LG on a daily basis.
ACTION PLAN AND BUDGET PLAN
Action plan for period August ~December 2012
An action plan table summarizing all marketing activities provides a clear overview of our focus areas and necessary steps to achieve specific goals within a defined timeframe The following action plan pertains to the initial launch period from August to December 2012, while plans for 2013 and 2014 will be developed and adjusted based on real-world circumstances.
Budget plan
Figure 5.2: LG MKT expenses vs Sale revenue 2009~2011
(Source: LG budget planning -BP- department)
Over the past three years, LG has allocated a maximum of 6.2% of its sales revenue to marketing activities As previously noted, there is a critical need for the laptop segment to enhance brand awareness significantly.
From 2009 to 2011, LG allocated 10% of its sales revenue as the marketing budget for the first year The sales targets were set at 10,000 units for the latter half of 2012, increasing to 60,000 units in 2013, and reaching 120,000 units by the end of 2014.
Detailed action plan with budget
This comprehensive action plan outlines all activities along with a clear budget, detailing the ratio between Above The Line (ATL) and Below The Line (BTL) marketing strategies By utilizing this framework, we can assess the return on investment (ROI) for each activity and gather valuable insights for future initiatives.
Jul Aug Sep Oct Nov Dec
60 office elevators 60 6% 12 12 12 12 12 key IT Magazine (PC world) 15 3 3 3 3 3 monthly
Mass newspaper( Thanh Niên, Tuổi Trẻ) 60 20 20 20 launching time/ promotion time
3 OOH Signboard at key 10 key IT shops 40 4% 10 10 10 10 one month after launching time
Pre-launch 40 writings/ test lab
Post launch 20 20 offline club, sponsor, WOM
2 Shop décor private Conner, showcase 60 6% 10 10 10 10 10 10
Abroad trip 25 Korea tour for top 20 dealers
Table 5.2: LG laptop - detailed action plan with budget (Aug~Dec’12)
During 17 years with great effort, LG Electronics Vietnam becomes a familiar brand name, a beloved company with many Vietnam people LGEVN is still on the way of developing itself to become market leader by expanding its product line and offering more added value to its customers Come along with this strategy, LGEVN decide to launch new product – LG laptop- in Vietnam market in late of 2012
This project aims to develop a comprehensive marketing plan for introducing LG laptops to the Vietnamese market The plan is grounded in a thorough analysis of both internal and external factors, utilizing secondary data from LG's internal resources, reputable market research firms, and media agencies Additionally, insights were gathered through visits to retail shops and discussions with industry experts in the laptop sector.
LGEVN has established a two-phase strategy to effectively increase brand awareness and preference The initial phase, from August to December 2012, focuses on enhancing brand visibility among mass consumers through Above The Line (ATL) marketing activities In the subsequent phase, starting in 2013, the emphasis shifts to boosting brand preference and sales volume by prioritizing Below The Line (BTL) strategies aimed at young customers who value design, technology, and price The core communication message during this period will be “Smart Computing and Stylish Design.”
LG's strategic marketing plan emphasizes selective investment in market share during its opportunistic development phase, avoiding price cuts or low-end model launches that could harm brand image Instead, LG should focus on product line extensions, enhancing after-sales service, and setting competitive pricing against main competitors Aggressive marketing efforts, particularly in public relations, digital marketing, and in-store communication, are essential Additionally, investments in production, research and development, personnel, working capital, and distribution systems are crucial Consistency with the company's mission and vision is vital for success, positioning LG as a recognizable brand in the laptop market.
- William Cohen, The Marketing plan, 2nd Edition
- Philip Kotler – Gary Armstrong – John Saunders – Veronica Wong, Principle of Marketing, Third European Edition, Pearson Prentice Hall
- Malcolm McDonald , Marketing plans: How to prepare them – How to use them, Fifth edition – Elsevier
- Michael Porter, The Five competitive Forces that shape strategy, Harvard Business review, Jan 2008
- GFK - November 2011- PPC Quarterly Report
- GFK – November 2011- Market Information report
- Internet Usage Stats and Marketing Report 2010, www.internetworldstats.com
- LGEVN – Second Haft 2011- Vietnam BCR Report
- LG website: www.lge.com/vn
- TNS media/ TKL – Jan to Nov 2011
- Vietnam Economic Times, 2009 estimate by Vietnam Government; General Statistics Office of Vietnam
Product USPs and specification: c
APPENDIX1: Samsung ATL & BTL image (part 2.3 – Competitor Analysis)
APPENDIX 2: Product USPs and specification:
Display : 13.3-inch, HD LED Back-light LCD, 1366×768 px
CPU : Intel Core i7 2637M Processor, CPU Clock 1.7 GHz, Up to 2.8 GHz Turbo Boost, 4MB Cache Memory Memory : 4GB DDR3 1333 (4GB x 1)
Audio : SRS Sound Solutions, HD Audio, Stereo Speakers SSD : 256GB SATA 6Gbps
Network : Intel 802.11bgn/WIDI/LAN
Ports : HP Out, USB 3.0& 2.0, Internal Mic, HDMI, Mini RJ45 Color : Spin hair-line silver
Operating System : Genuine Windows® 7 Home Premium
Graphics Card : GF GT 540M 1GB
Audio : HD Audio, SRS WOW HD, SRS True Surround HD or SRS
Wide 3D Sound (3D Model Only) Multi-Media Card : 5-in-1(xD, MMC, SD, MS, MS Pro)
Input / Output Port : Headphone, Mic In, USB(x3), LED Finger Print, HDMI,
VGA, RJ45, DC-In Design : Real Brushed Aluminum with Wine Red
3 Professional (P series, pet name: LG Blade): P430/ P530
Operating System : Genuine Windows® 7 Home Premium
Graphics Card : GF GT 520M 1GB
Audio : HD Audio, SRS WOW HD, SRS True Surround HD
Multi-Media Card : 5-in-1(xD, MMC, SD, MS, MS Pro)
Input / Output Port : Headphone, Mic In, USB(x3), HDMI, VGA, RJ45, DC-In Design : Brushed Aluminum Finish in Titan Black
4 Every day (S series, pet name: Aurora) : S430/ S530
Operating System : Genuine Windows® 7 Home Basic
Display : 14”/ 15.6" HD (1366 x 768) or HD+ (1600 x 900) LED LCD
Multi-Media Card : 5-in-1(xD, MMC, SD, MS, MS Pro)
Input / Output Port : Headphone, Mic In, USB(x3), HDMI, VGA, RJ45, DC-In Design : Aurora Blue/Purple.