Now the dilemma comes when one has to place a bet on which of the two has crafted a better future for itself. In 2010, LG and Samsung collectively take up a lion’s share of almost 40% in the consumer durables market in India and have outclassed not only their Japanese cousins but also the Indian incumbents like Videcon, BPL and Onida. Interestingly, the entry strategy for LG on one hand was to establish its footprints into the interiors of the country and to play on volumes. Samsung, on the other hand, has always positioned itself as a premium player among the consumers. But today, the battle for the durables sector is completely paradoxical. In spite of the slowdown in 2009, the consumer durable industry grew by 20% and is still expected to reach a mark of $40 billion by 2012 at a CAGR of 11%. Having mentioned that, the moot question that arises now is - Who will win the race?
Off late, LG has been repositioning itself in India and harping on the strategy of aspirational branding from a functional perspective. Shin explains the logic behind this move as he shares, “The reason behind this step by the company is stiff price competition, which is taking place very fast and China made products are coming up. So we need to make products accordingly. We shouldn’t play in the red ocean and we should gradually get out of there (low priced products) so that things improve. The other rationale behind this move is that the resale values of LG products is high, the customer is always ready to pay more because of good quality. We have already experienced this from the mass marketing.” Samsung, on the contrary, is spreading out to price sensitive markets because of its low penetration levels. For instance, around 30-35% of company’s flat TV sales occur in Tier-II and Tier-III cities.
Besides the geographical dimension, another factor playing a crucial role in the cat-eat-cat competition among the two is the mobile phone category. As per an IDC report, out of the 100 million handsets sold in 2009 Samsung garnered the second slot with 7.7% of the entire pie while LG stuck to its third position at 5.4%. Clearly, Samsung has bolstered its position over the last two years by launching new products across all price segments and roping in a celebrity ambassador (Aamir Khan).
Another major differentiation between the two is their communication strategy. Vijay Uppal, CEO, Upfront Advertising puts forward the brand attributes as he exclaims, “In terms of the Brand attributes, I would say LG is more of a sales volume lead brand whereas Samsung is commanding a ‘qualitative feel’ in the customer’s mind. But both of these brands have been using a two track communication strategy. LG harps more on promotions, whereas Samsung is more attuned towards brand aspect.”
Off late, LG has been repositioning itself in India and harping on the strategy of aspirational branding from a functional perspective. Shin explains the logic behind this move as he shares, “The reason behind this step by the company is stiff price competition, which is taking place very fast and China made products are coming up. So we need to make products accordingly. We shouldn’t play in the red ocean and we should gradually get out of there (low priced products) so that things improve. The other rationale behind this move is that the resale values of LG products is high, the customer is always ready to pay more because of good quality. We have already experienced this from the mass marketing.” Samsung, on the contrary, is spreading out to price sensitive markets because of its low penetration levels. For instance, around 30-35% of company’s flat TV sales occur in Tier-II and Tier-III cities.
Besides the geographical dimension, another factor playing a crucial role in the cat-eat-cat competition among the two is the mobile phone category. As per an IDC report, out of the 100 million handsets sold in 2009 Samsung garnered the second slot with 7.7% of the entire pie while LG stuck to its third position at 5.4%. Clearly, Samsung has bolstered its position over the last two years by launching new products across all price segments and roping in a celebrity ambassador (Aamir Khan).
Another major differentiation between the two is their communication strategy. Vijay Uppal, CEO, Upfront Advertising puts forward the brand attributes as he exclaims, “In terms of the Brand attributes, I would say LG is more of a sales volume lead brand whereas Samsung is commanding a ‘qualitative feel’ in the customer’s mind. But both of these brands have been using a two track communication strategy. LG harps more on promotions, whereas Samsung is more attuned towards brand aspect.”
For more articles, Click on IIPM Article.
Source : IIPM Editorial, 2010.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
IIPM B-School Detail
IIPM makes business education truly global
IIPM’s Management Consulting Arm - Planman Consulting
Arindam Chaudhuri (IIPM Dean) – ‘Every human being is a diamond’
Arindam Chaudhuri – Everything is not in our hands
Planman Technologies – IT Solutions at your finger tips
Planman Consulting
Arindam Chaudhuri's Portfolio - he is at his candid best by Society Magazine
IIPM ranked No 1 B-School in India
domain-b.com : IIPM ranked ahead of IIMs
IIPM: Management Education India
Prof. Rajita Chaudhuri's Website
IIPM B-School
Arindam Chaudhuri
Rajita Chaudhuri
Planman Consulting
