Capital snatches LG's washing machine business from Lintas

By , agencyfaqs! | In | January 28, 2002
Within a month of taking LG Electronics' refrigerator account from Lowe Lintas, Delhi, Capital Advertising has won the Rs 7-crore account of LG's Fabricare washing machines - also from Lintas


For Delhi-based Capital Advertising, it's two in a row. The agency has netted the advertising account of LG Electronics India's (LGEIL) washing machine brand, Fabricare, its second consecutive LG gain from Lowe Lintas & Partners, Delhi. It may be recalled that late last month, LG had moved its Rs 15-crore refrigerator account out of Lintas to Capital.

Ganesh Mahalingam, general manager, marketing, LGEIL, has confirmed the movement of the Fabricare account. agencyfaqs! has learnt that both the roster agencies of the company, Capital and Lintas, were asked to make a creative-cum-strategic presentation on how to give a 'fresh impetus' to the Fabricare brand, which includes both fully- and semi-automatic washing machines. With the decision swinging in its favour, Capital has added billing by an estimated Rs 7 crore.

Talking about the movement, Mahalingam says, "Basically, what we are doing is aligning all the 'women' products with Capital. Washing machines are a 'woman' product - as are microwaves, refrigerators and vacuum cleaners. We are doing this because we feel Capital has a better understanding for such products. In fact, the team which would be working on washing machines is an all-woman team."

LG is certainly bullish on washing machines this year, and wants to make a splash in all segments of the product category. In the fully-automatic segment (which comprises top-loading and front-loading machines), the front-loading market is estimated at 80,000 units, and is expected to go up to 90,000 units by end 2002. LG sold 13,000 front-loading units in 2001, and plans to almost double the number to 25,000 in 2002. In the top-loading segment, estimated at 2.85 lakh units, LG sold 26,000 units last year. This year, this market is expected to grow to three lakh units. LG is targeting sales of 50,000 units.

In the nine-lakh-units (2001 market) semi-automatic washing machines market, LG is present only in the 6-kg segment. Despite its limited presence, the company managed selling two lakh units last year. And in a market expected to grow to 9.7-lakh units in 2002, LG is training its sight on a figure of 2.75 lakh units. To meet market demand, April onwards, local production of washing machines will begin at LG's Greater Noida (Uttar Pradesh) factory. However, till production begins at Greater Noida, the company will continue importing the full unit from Korea. Also, plans of launching more washing machine variants are underway.

Capital is, of course, riding high. The agency has consistently been picking up business from LG - at the cost of Lintas - for the past three months now. Prior to the refrigerator win, in October 2001, Capital had picked up the account for the 'Rs 5,000-crore LG Achievement Bash' campaign, which was estimated at Rs 8-crore. Though it was a limited-period promotional campaign, it would have given a big boost to Capital's confidence. As of now, Capital handles Rs 25 crore worth of LG business, which includes washing machines, refrigerators, microwave ovens and vacuum cleaners.

Despite the loss of the Fabricare account, Lintas retains a sizable portion of the LG business - accounts to the tune of Rs 40 crore, comprising consumer durables and IT products. Currently, Lintas has LG Flatron monitor, LG i-Monitor, LG Flatron colour TV, LG Plasma airconditioner, LG Maestro, Digital TV, LG Optical Disc Drives, DVD-ROM/CD-ROM/DVD-RAM, LG PC-Cam and PC Camera.
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