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LG: Winning by Chaos?
- By Ikem Okuhu
- Published May 17th, 2010
- BrandWorld
- Unrated
There seems to be no stopping LG Electronics from dominating the Nigerian home appliances market but a couple of factors are just not right at the moment, writes IKEM OKUHU.
THERE is an appreciable degree of communication dissonance in its Nigerian (and who knows how many other countries) market but strangely this has not stopped Korean giants, LG Electronics from sustaining an increasingly widening leadership of the home appliances market. In marketing, market leaders often differ from category leaders. But not LG, which from our research, is the appliance you’d see at every corner of the home.
Just follow the numbers as our survey indicates and you’d appreciate why other players in the white goods market should be afraid of this Korean hydra that is holding unto market leadership like a birthright. More than 40 percent of all Nigerians in our survey who bought home appliances over the past two years went to an LG shop. In this survey include those replacing outmoded appliances as well as the young ones just starting out in life.
A category analyses even highlights this leadership further as over 70 percent of people in our survey that bought LCD televisions preferred LG. For home theatres, the figure was not far from this, standing at 69 percent. The story is the same for other home appliance categories like vacuum cleaners and washing machines. Although the brand was relegated to second place in the microwave oven, refrigerators and electric iron categories by Panasonic, Haier-Thermocool and Phillips respectively, it did not stop the brand from emerging overall leader in this survey.
Need we mention at this point that besides being a home appliance, LG is also a phone – mobile phone? Well, as far as the global market is concerned, LG is the number three phone maker, although the brand has tries in vain to make any reasonable impact in Nigeria, thanks to the flipside of brand=stretching and an uncoordinated marketing activity. But this would be discussed later.
Now why is LG such a runaway winner in a market where about ten years ago, it was virtually nonexistent? The answer can found in four critical places namely: Name, The Green Movement, Innovation and Tagline
What is in a name is a common saying but then in marketing, name may just be the difference between leaders and laggards. At the time of the merger that gave birth to what today is one of the world’s leading electronics companies, the challenge was how to pick a name that would connect as well as somehow retain the identities of the founding companies. On one hand was Lucky, a households products manufacturer while on the other was Goldstar, a company, established in 1958 with focus on Electronics. Thus, it seemed just easy to pick the “L” in Lucky and the “G” in Goldstar for the new corporate identity to birth.
The name was simple enough and in a market filled with scores of products battling for the small space in the consumer’s mind a simple is key to facilitating brand recall. Having achieved this, some guy got a brain wave to play with this simple name by extending it to a frontier that was then emerging in GMP (Good Manufacturing Practice). At the time the company was founded, environmental issues were not as critical as it is today. But managers of the company were that far-sighted. First, they knew that targeting the American market was key to conquering the world. Therefore something that connects in the English language might just work. Second, LG also thought that leveraging eco-friendliness would be important in marketing for the future. To relate with this, the company managed to orchestrate a CSR factor in their name by playing up its relationship with the Green Movement – the advocacy for environmental friendliness of products. An environmental action plan was therefore initiated with the theme, “Life’s Good When it’s Green.”
This did not just work for the brand in establishing it as one that is environmentally friendly, it also perfected the interpretation of the LG acronym and soon this became even the tagline, Life’s Good.
In the area of innovation, LG has also been scoring more than pass marks. Only recently, the company became the first to launch a borderless television brand that is currently the rave toy of most homes. With this innovation and first-to-the-market advantage, LG would remain the generic name for borderless television in Nigeria before competition makes any counter move.
And globally, the company has been gathering awards and accolades for its innovativeness. In 2008, LG won 35 awards for different design innovations and in one of them the company’s 50-inch PG6000 1080p Plasma HDTV was adjudged “Best of Video Display.”
In 2009 LG has won 15 Design & Technology honors including the ‘Best of Innovations’ in the Wireless Communications Category and Home Appliances Category. Driving most of these awards was the eco-friendliness of some of its brands washing machines.
Two LG washing machines and vacuum cleaners have also achieved Asthma and Allergy Friendly Certification based on the Allergiene Steam cycle. This certification Programme is a science-based certification mark that is awarded to products that are proven to be more suitable for those suffering from asthma and allergies.
Innovations like these conspired with what has been described as best-in-class supply chain management to propel LG into the Global Top 100 Companies list in 2006 and also earn it the status of the world’s seventh most innovative company for 2009. Leveraging this global high standing has in no small measure helped firm the company’s root as number one home appliance in Nigeria in terms of mind and market share.
The Distractions?
Being number one has its own headaches, especially in a global market where product preferences across geo-economic jurisdictions vary. Globally, LG has been ranked number three mobile phone maker and has also earned accolades for innovations in this area. But marketing experts, while applauding this, are looking at it with mixed feelings.
This is based on previous experiences of brands that put every foot in every market that ended up losing focus. In Nigeria, LG, which is essentially known for its home appliances has been trying and failing to market its mobile phones. The reason for this difficulty is not far-fetched. Most people who are looking for mobile phones go to the market, not with LG in mind because, for them, LG is not a phone. In a previous report, we had taken a position that this run-away winner should leave the mobile phones market to other players and concentrate on firming its foothold in the familiar home appliances turf to avoid dissipation of marketing energy by trying to be “everything for everyone” as marketing guru, Al Ries has always cautioned.
Accompanying this clear distraction is yet another one which comes in the guise of communication dissonance. LG’s marketing globally is primarily handled by global giant, Young & Rubicam. But there are rumours that there is a Korean agency that, from time to time, extends a hand of fellowship by doing some jobs, especially for emerging markets like Nigeria.
What this does is that it distorts the “look” and “feel” of the brand. In Nigeria, NovellPorta Y&R is the agency handling the LG account by virtue of its affiliation with the global agency.
What this means is that the Nigerian agency almost always has to accept the “spoon-feeds” from this Korean agency, a situation that has given rise to ads and messages of varying signature and tone. This is more obvious in the campaigns that have been attempting to drive the company’s mobile phones.
Are we correct? Leaders seldom listen. But will LG? As discussed. You are the editor, pls let’s work this out.
THERE is an appreciable degree of communication dissonance in its Nigerian (and who knows how many other countries) market but strangely this has not stopped Korean giants, LG Electronics from sustaining an increasingly widening leadership of the home appliances market. In marketing, market leaders often differ from category leaders. But not LG, which from our research, is the appliance you’d see at every corner of the home.
Just follow the numbers as our survey indicates and you’d appreciate why other players in the white goods market should be afraid of this Korean hydra that is holding unto market leadership like a birthright. More than 40 percent of all Nigerians in our survey who bought home appliances over the past two years went to an LG shop. In this survey include those replacing outmoded appliances as well as the young ones just starting out in life.
A category analyses even highlights this leadership further as over 70 percent of people in our survey that bought LCD televisions preferred LG. For home theatres, the figure was not far from this, standing at 69 percent. The story is the same for other home appliance categories like vacuum cleaners and washing machines. Although the brand was relegated to second place in the microwave oven, refrigerators and electric iron categories by Panasonic, Haier-Thermocool and Phillips respectively, it did not stop the brand from emerging overall leader in this survey.
Need we mention at this point that besides being a home appliance, LG is also a phone – mobile phone? Well, as far as the global market is concerned, LG is the number three phone maker, although the brand has tries in vain to make any reasonable impact in Nigeria, thanks to the flipside of brand=stretching and an uncoordinated marketing activity. But this would be discussed later.
Now why is LG such a runaway winner in a market where about ten years ago, it was virtually nonexistent? The answer can found in four critical places namely: Name, The Green Movement, Innovation and Tagline
What is in a name is a common saying but then in marketing, name may just be the difference between leaders and laggards. At the time of the merger that gave birth to what today is one of the world’s leading electronics companies, the challenge was how to pick a name that would connect as well as somehow retain the identities of the founding companies. On one hand was Lucky, a households products manufacturer while on the other was Goldstar, a company, established in 1958 with focus on Electronics. Thus, it seemed just easy to pick the “L” in Lucky and the “G” in Goldstar for the new corporate identity to birth.
The name was simple enough and in a market filled with scores of products battling for the small space in the consumer’s mind a simple is key to facilitating brand recall. Having achieved this, some guy got a brain wave to play with this simple name by extending it to a frontier that was then emerging in GMP (Good Manufacturing Practice). At the time the company was founded, environmental issues were not as critical as it is today. But managers of the company were that far-sighted. First, they knew that targeting the American market was key to conquering the world. Therefore something that connects in the English language might just work. Second, LG also thought that leveraging eco-friendliness would be important in marketing for the future. To relate with this, the company managed to orchestrate a CSR factor in their name by playing up its relationship with the Green Movement – the advocacy for environmental friendliness of products. An environmental action plan was therefore initiated with the theme, “Life’s Good When it’s Green.”
This did not just work for the brand in establishing it as one that is environmentally friendly, it also perfected the interpretation of the LG acronym and soon this became even the tagline, Life’s Good.
In the area of innovation, LG has also been scoring more than pass marks. Only recently, the company became the first to launch a borderless television brand that is currently the rave toy of most homes. With this innovation and first-to-the-market advantage, LG would remain the generic name for borderless television in Nigeria before competition makes any counter move.
And globally, the company has been gathering awards and accolades for its innovativeness. In 2008, LG won 35 awards for different design innovations and in one of them the company’s 50-inch PG6000 1080p Plasma HDTV was adjudged “Best of Video Display.”
In 2009 LG has won 15 Design & Technology honors including the ‘Best of Innovations’ in the Wireless Communications Category and Home Appliances Category. Driving most of these awards was the eco-friendliness of some of its brands washing machines.
Two LG washing machines and vacuum cleaners have also achieved Asthma and Allergy Friendly Certification based on the Allergiene Steam cycle. This certification Programme is a science-based certification mark that is awarded to products that are proven to be more suitable for those suffering from asthma and allergies.
Innovations like these conspired with what has been described as best-in-class supply chain management to propel LG into the Global Top 100 Companies list in 2006 and also earn it the status of the world’s seventh most innovative company for 2009. Leveraging this global high standing has in no small measure helped firm the company’s root as number one home appliance in Nigeria in terms of mind and market share.
The Distractions?
Being number one has its own headaches, especially in a global market where product preferences across geo-economic jurisdictions vary. Globally, LG has been ranked number three mobile phone maker and has also earned accolades for innovations in this area. But marketing experts, while applauding this, are looking at it with mixed feelings.
This is based on previous experiences of brands that put every foot in every market that ended up losing focus. In Nigeria, LG, which is essentially known for its home appliances has been trying and failing to market its mobile phones. The reason for this difficulty is not far-fetched. Most people who are looking for mobile phones go to the market, not with LG in mind because, for them, LG is not a phone. In a previous report, we had taken a position that this run-away winner should leave the mobile phones market to other players and concentrate on firming its foothold in the familiar home appliances turf to avoid dissipation of marketing energy by trying to be “everything for everyone” as marketing guru, Al Ries has always cautioned.
Accompanying this clear distraction is yet another one which comes in the guise of communication dissonance. LG’s marketing globally is primarily handled by global giant, Young & Rubicam. But there are rumours that there is a Korean agency that, from time to time, extends a hand of fellowship by doing some jobs, especially for emerging markets like Nigeria.
What this does is that it distorts the “look” and “feel” of the brand. In Nigeria, NovellPorta Y&R is the agency handling the LG account by virtue of its affiliation with the global agency.
What this means is that the Nigerian agency almost always has to accept the “spoon-feeds” from this Korean agency, a situation that has given rise to ads and messages of varying signature and tone. This is more obvious in the campaigns that have been attempting to drive the company’s mobile phones.
Are we correct? Leaders seldom listen. But will LG? As discussed. You are the editor, pls let’s work this out.
