LG needs a young image.

Sandeep Tiwari, head of marketing, LG India, has been associated with the company since its inception in 1997. Back then, he was a fresher from Amity Business School and had joined LG India as a management trainee. Now, 10 years on, he is not just a 35-year-old LG employee, but also the youngest marketing head in the history of the company.

Tiwari started his journey from scratch and has climbed the ladder all the way. He proudly cites his example when you talk about job satisfaction. That is what has made him stick to his first job for more than 10 years, and he’s not done yet. On his journey to the top, he has collected many feathers for his cap, including youngest category head and youngest branch head.

Answering questions posed by Anoop Chugh and Rachit Vats of agencyfaqs!, Tiwari speaks of his first break at LG, his journey from the bottom to the top in the past 10 years, competition that made him even tougher, how LG derives inspiration from Nokia and HP, the road ahead and, of course, the possibility of an Abhi-Ash pairing for LG India...

Edited Excerpts

The brand LG was launched in India on May 12, 1997. Along with me, there are 35 other employees who will complete 10 years in this organisation.

The 10 years’ celebration is a psychological moment for us, and it’s very significant for all of us. Back in 1997, our vision was to become the No.1 consumer electronics company in India by 2007. But we managed to advance this success by five years. We took the leadership position in 2002, which is a commendable feat.

Having achieved that success, now we need not talk about leadership. The difference between ‘marketing to leadership’ and ‘leadership to marketing’ appears just a flip of words, but it is a very crucial element. We had set the top as a benchmark and the challenge was to reach there. Now, as leader, one has to take both routes: defend market shares, grow the market and, at the same time, ensure that the brand prospers because it’s the investment for the future.

See, this 10 years’ celebration is internal and only for us in the LG team. For a consumer, it makes hardly any difference.

Instead, we need to communicate to be known as a younger brand. What happened was that LG’s communication was generally around health, mother, child and family. That resulted in it being perceived as a middle aged brand. Besides, being a consumer electronics and home appliances brand, our core TG was always 35+ consumers.

Now, in only 10 years, we are known as a middle age brand, and this is shameful for us. Brands such as Pepsi or Coke, despite being over 100 years old, are still considered to be fresh and vibrant.

We need to change this perception. It’s also because 55 per cent of India’s population is below 30 years, and they perceive LG as a mom and pop brand. They want a brand from their generation, and we need to get into their league as they are the consumers of tomorrow. And I know it will be a great challenge for us.

Yes, signing Abhishek Bachchan as brand ambassador was a maiden attempt. The idea was that the junior AB would bring with him the image of youth – fashionable, vibrant, peppy, and all other attributes that a brand must have in today’s world.

In addition, it was to break the clutter. While all other consumer durable companies were using female models in their communication, we decided to use a male icon, who would connect with female consumers of all age groups, and also appeal to the youth.

First, I would like to state that decisions are not taken on the basis of personal alignments. Celebrities are used to break the clutter and if the celebrity starts endorsing multiple brands, he/she starts creating clutter for himself/herself.

Coming to Abhi-Ash, we believe that celebrity couples are very predictable, and there is no surprise element left in them.

For instance, I personally believe that the Devgan couple (Ajay and Kajol) have become very predictable, having endorsed three brands, Sangini, Whirlpool and Tata Indicom. So, instead of getting unique attributes for the brand, what one gets is clutter.

Any celebrity, be it a single or a couple, should fit into the brand objective, and brand owners who tend to use celebrities just because they can afford it, are considered losers.

In the home appliances sector, globally, we have a legacy of 60 years. LG was the first company to develop a refrigerator and a washing machine in Korea. In comparison, the legacy in the mobile handset sector is just a few years old.

Having said that, for the last two years, we have been a market leader in the CDMA category within the mobile handset space, with a market share of 60 per cent. In the CDMA category, we had the advantage of being bundled with service provider Reliance. It was not exactly a brand game. However, in the GSM category, we have to go independently as consumers can chose their handsets irrespective of the service provider. We will certainly take some time to take off in this sector. Even in this space, we are trying to create a differentiator by launching a one-hour service promise, which no other brand promises.

What we believe is that a product launch is to be followed by regular product developments, and this is what we are planning to do in the mobile handset category.

Currently, LG has captured roughly 2 per cent of the GSM share, and we are nearing the number three position. By the year end, we are looking at a clear number three position. We are aiming for three million plus units in the next three years, and if it turns out to be in our favour, we may even cross the four million mark.

Plus, we have to do a lot of groundwork. It is too early for us, and we have to learn from the existing players. We admire some of them, Nokia in particular, as a brand.

The best part about the brand Nokia is not its 70 per cent market share, which is a whopping figure by itself, but it being a great leveller. Nokia has products for everyone, be it a rickshaw puller or a guy owning a Merc. We are like a good student and want to learn from them.

The rationale was that we wanted to have a fresh perspective. Mobile is the first product that a person hooks onto, laptop follows. All the other portfolios have a slightly more mature audience vis-à-vis the mobile. We wanted to bring a consolidation factor to the extent that the brand, common direction and all our major businesses remain with Lowe. But for a new product category that requires specific focus, we had to move to a new agency. It’s like going to a specialist doctor to focus on any particular disease. And when we wanted to focus, we decided to bring in a new perspective – for that, we brought in a new agency that isn’t carrying baggage.

We owe the last 10 years of our success to Lowe. But we still felt the need for another agency that could focus on one particular product. It is not a question of a big or small agency. Although Innocean is not as big as Lowe, they met our requirements and have given us a fresh start in the mobile segment.

I don’t think so. Communication is a very local subject. Even at Innocean, the people who are working are all Indians. If I am representing LG here, I am an Indian and that is LG India. Moreover, LG has made a great effort in empowering the Indian counterpart and this is a hallmark. At LG, the degree of empowerment and the number of Indians in comparison to Koreans are much higher than any other MNC. With no exaggeration, LG India has made sure that Indians at a very young age are picking up huge portfolios. Hats off to that.

Within a short span of our association with Innocean, we have already launched Chocolate mobile phones, Dynamite mobile phones and the Pulse, which we didn’t communicate about much. And the fourth one, which we have just started campaigning about, Bullet, is targeted at the semi-urban and rural markets.

In a market where the game was all about numbers, say 3310, 6610, 8310, we gave a personality to a phone – Bullet, Chocolate, Dynamite and Pulse. We tried to innovate and the response has been tremendous. People can now recall our handsets easily, while they find it really difficult to recall the handsets that have numbers as their model names. Marketing is all about differentiation. What we are doing is to address the entire spectrum.

I am not worried at all. One or two months doesn’t make a difference because the channel is to be seen over a long period of time. The figures you are talking about are a mixture of two elements – one is primary and the other is secondary. There are brands that are able to push more because of channel domination, but it gets flushed out in subsequent months. So, even if the secondary elements are not happening, we are still well placed and prepared for the day. One or two months before the season, if there’s a lull, it shouldn’t bother marketers. It’s the lull before the storm and one should be prepared for it.

Moreover, if it is a slump in one or two particular months, then it is a slump for everyone, for all my competitors as well. I see this lull period as an opportunity to grab a bigger share of the market. Say, if out of every 100 customers, 33 are coming to buy an LG product, then during this pre-season period, I should convince at least two more customers to come and buy my products. So, when the season arrives, I have 35 customers buying my product instead of 33. In tough times, when it is tough for everyone, the wittiest is the toughest of them all. It’s a test and a strong company should survive this.

Long-term predictions are always based on market reality. Out of 15-20 crore households in the country, only 5 crore are urban. In non-urban households, there is no electrification or very little of it. So, our sales target is highly dependent on infrastructure, economic growth and agricultural prosperity, as we are still an agriculture driven economy. So, we draw projections with a very optimistic scenario, and realistic targets often fall short of the optimistic ones due to other elements that play an important role.

Our current revenue figure is Rs 9,000 crore, and if everything goes according to plan, we will cross Rs 10,000 crore by the end of this year. In terms of percentage, we should be growing by 25 per cent per annum by the year end.

Our brand objectives have changed. When we started off 10 years ago, people came and asked us what is LG? Is it a Delhi based company? So, our first objective was to spread awareness about the brand and inform people about what is LG. Today, with unaided awareness of 70 and top of mind recall of 24, the objective is not to tell what is LG, but what’s new with LG.

When we were new, we had to look for a common medium that would reach most Indians. Moreover, tell me what is common between India, Pakistan, Sri Lanka and Bangladesh? It’s cricket. It’s a common language used across the subcontinent, irrespective of the rich-poor divide, language divide, religion divide, colour divide. So, it was the only logical investment through which we could have reached our target audience.

But now LG’s focus is on laptops and LCDs, which are only bought in cities. So, our needs are also different. We are now targeting a very niche segment and, probably, television is not the answer. We need to reach a very specific customer base with a very specific medium.

Say, if we are offering a 42-inch LCD TV, we need to target our customers through newspaper advertising. That’s where we can inform them where they can find our dealers, which is impossible through television advertisement.

We still do see a future in cricket. In fact, it would be very foolish not to use cricket in a country like India. Cricket will be used as one of the media vehicles. But we don’t want to dominate cricket as we have done for the past few years. Now, the domination of cricket is impossible for any brand. For reaching the masses, surely cricket is the best vehicle, but for niche segments, we will use niche sports.

We can’t have an AK-47 (cricket) fired all over the place. For the high-end segment, communication needs a different and more specific route. That’s probably why we don’t see brands such as BMW advertising on cricket channels.

Despite cricket being at an all time low at the moment, we owe a lot to it. Most of our earlier marketing was woven around cricket. And this low is momentary. Wait for the next set of matches and the game will again be talked about and the most watched event in the country.

Our association with cricket will be at a local level now, rather than at the ICC level. Say, if some cricket series is happening around Diwali, we would surely associate with it, but not at every event ICC hosts.

I don’t agree that we ever were part of a price war. When we started, we positioned our television above Sony television. After that, instead of addressing a niche few, we targeted everyone. That’s why we introduced our Golden Eye technology in 14-inch CTVs, which was earlier available only in 21-inch and above categories. Secondly, prosperity and global economies of scale have to be shared with our customers.

As we had large scale production, we could pass on cost savings to our customers. As a global player, we were able to put money into advertising, into R&D and, as a result, we were there in all the categories. So, there were products available for all, depending on their tastes and budget. It isn’t a question of a price war, it is a question of reaching customers of all incomes.

Does Nokia enter a price war? No, because it is there in all segments. No brand can be built on price. Why should be anyone be deprived of buying an LG?

It’s easy to target a niche segment based in the city and provide them after sales service. But it’s tough to reach the grass roots and meet their requirements. We have invested a big chunk for our non-urban consumers and set up a service network that is unmatched by other consumer durables companies.

Today, we are proud of the fact that we are available across the country despite the rural-urban divide and we have our products in all segments.

Our biggest effort was that we broke paradigms. Most durables companies operated with 18 branch offices, but we operated with 40 branch offices. It is not a question of opening another office. There are many issues involved in this, cost implications, teams, etc. We didn’t stop there, we opened another 50 rural offices, where we stationed our engineers, accountants, sales managers and service team to meet our customers’ requirements. It was a remarkable achievement. That means we were addressing 90 cities sitting there. We sold our products in a come-see-feel-take home environment, getting closer to our customers. Now, we are planning the same model for our mobiles. You don’t need to go to a different shop to buy a mobile, you go to the same LG shop, where you get all LG products under one roof, and that too in smaller cities where no other consumer durables companies have dared open their offices. In a way, we localised our products to meet the specific requirements of buyers. We were the first to introduce on-screen displays in local languages.

We flaunted ‘Made in India’ all over the world. In a way, we are marketing India. In terms of export, we export a very small percentage of our total production in India, but we aim to increase our ‘Made in India’ export to 10 per cent of our total production. The world still isn’t confident about the ‘Made in India’ tag, but we are helping change this perception through our superior quality.

We have been number 2 as well. That’s what I was articulating earlier. Marketing to leadership and leadership to marketing, the stance has to change. We have the responsibility to grow the category. As the category grows, so does our slice of the pie. The focus on new areas is an inspiration in a way. It’s a question of vision being laid out, groundwork and a lot of hard work and connections with consumers.