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K Giriprakash

New practices to handle dealerships also in place

Bangalore , May 16

White goods company, LG Electronics is making several changes to its product portfolio so that it can stand out among a clutter of products.

For example, LG Electronics has phased out 23 frost-free refrigerator models replacing them with eye-catching models that have newer features.

"The new models are designed to grab the attention of the customers," LG Electronics' National Head for frost-free refrigerators, Mr Prashant Das told Business Line.

Mr Das said the company expects to increase its share in frost-free refrigerator category to 40 per cent from 33 per cent by the end of this year. As per ORG figures, LG has a 33 per cent share as of March, 2006.

Frost-free refrigerators contribute 10-12 per cent of the total revenue of the company. During 2005, LG's total revenue was around Rs 7,500 crore and is expected to rise to Rs 9,000 crore this year.

The market size of frost-free refrigerators is around 6.5 lakh units. It is expected to grow 20 per cent this calendar year compared with 15 per cent growth last year. Mr Das said the company had lined up models at every price point in the segment with prices ranging from Rs 12,500 to Rs 1.25 lakh for capacities between 230 litres and 700 litres. Models with capacities higher than 400 litres are imported.

Mr Das said LG had put in place several new practices to handle dealerships across the country. "Our focus is on daily sales instead of monthly sales which is followed by a few others," he said. "The shelf life of LG products is very low. This ensures that the dealers get back their money faster," he said. The marketing budget is on a "sell and spend" basis, which means that the marketing budget is carved out of the revenue from actual sales and no fresh funds are invested into marketing and advertising. LG has 46 branches across the country. It has a factory each in Greater Noida, near Delhi and in Pune. The Pune plant also caters to the export market.

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