Capital gains LG refrigerator account

Post an annual review of its communication strategy, LG Electronics India Ltd (LGEIL) has decided to move the Rs 15-crore advertising account of its refrigerator brands from Lowe Lintas, Delhi, to Capital Advertising, Delhi. Confirming the move, Ganesh Mahalingam, general manager, marketing, LGEIL, said, "We have aggressive plans for next year. We hope to capture 35 per cent share in the refrigerator market. As a first step in that direction we had asked both the roster agencies (Lowe Lintas, Delhi, and Capital Advertising, Delhi) to make presentations. Our decision has gone in favour of Capital."

Information available with agencyfaqs! indicates there was a third agency in the fray. Mahalingam, however, refused to comment on this. Post the move, LGEIL's agency alignment would be something like this. While Lowe Lintas would be responsible for LG television, washing machine, air conditioners and computer monitor advertising, Capital would handle vacuum cleaners, microwave ovens, refrigerators as well as LG's corporate advertising. Initiative Media would be the AOR (agency of record) of all LG brands.

It is obvious LG has big hopes for the Indian refrigerator market. For starters, besides the frost-free and direct cool refrigerators that are available currently, LGEIL plans to add a new product in its range of refrigerators. "We hope to launch a premium brand - the Dios side-by-side (with two doors that open like an almirah) refrigerator shortly," added Mahalingam.

The news of the agency realignment comes right after a very successful festive promotion offer run by the company in October. Initial reports indicate that the company registered a growth in sales to the tune of 43 per cent (in terms of value) during the festive season. According to company executives, against a target of Rs 225 crore, the company grossed Rs 297 crore. A major chunk of that came from CTVs, followed by frost-free refrigerators and washing machines.

In fact, the company claims it has seen "dramatic growth" in the last two years across all product categories despite the overall industry slump. While the consumer electronics and home appliances segments have grown by 8-10 per cent in the year 2000, LGEIL has grown by a phenomenal 80 per cent, taking its turnover to Rs 1,903 crore in the year 2000 from Rs 1,056 crore the previous year. The company has also indicated that it plans to divest 25 per cent stake in its Indian operations to the public and take its turnover up to Rs 2,500 crore by end December 2001.

© 2001 agencyfaqs!