LG launches A One refrigerators; earmarks Rs 10 crore as ad budget

Close on the heels of the announcement by Samsung of its plans of setting up a refrigerator manufacturing facility in India, LG Electronics yesterday unveiled its newly set up refrigerator line for the direct cool segment. At a press conference in Delhi on Monday, the company also displayed A One, the first indigenously developed direct cool refrigerator. The company has earmarked a total investment of close to Rs 100 crore on the facility for the years 2002 to 2005.

A One will be available in the markets from January 2, 2003, in two capacities - 175 litre and 200 litre. To begin with, the two models will be available in three colours - red, sky blue and light grey.

The launch of A One will be supported by a Rs 10-crore multi-media campaign. The campaign created by Capital Advertising will be unveiled in the first week of January 2003. Alongside the A One campaign, the company plans to launch the campaigns for its frost-free refrigerators and the premium Dios range. Company officials are not ready to reveal the communication strategy at this point in time.

LG's mission for the next calendar year is to consolidate its position in the refrigerator market in India. The company has set a sales target of Rs 5.5 lakh units for the year 2003 and a turnover target of Rs 385 crore from the direct cool segment. The size of the Indian refrigerator market is 3.5 million, of which 2.7 million is accounted for by the sales of direct cool refrigerators and the rest by frost-free. While the frost-free segment is growing at a pace of 15-18 per cent, direct cool is growing marginally at 3-4 per cent. Despite the poor growth of the direct cool segment, LG officials are optimistic. "Though the direct cool segment is not growing, we are confident of growing our market share," says Ganesh Mahalingam, general manager marketing, LG.

The company's optimism is based on the competitive pricing of its direct cool refrigerators. "Right now we are priced Rs 1,200 higher than the leader in the direct cool segment, which is Whirlpool. After indigenisation, the A One range will be competitively priced. This will help push up our sales," opines Mahalingam.

Will the task be easy? The market leader in the direct cool, Whirlpool has a market share of 27 per cent. Ajay Bajaj, product head, direct cool refrigerators, LG, has his argument ready. "A One has the LG hallmark of quality and technology. With indigenisation our products will be cheaper. A combination of these factors will help us ramp up our market share to about 20 per cent, from the current 10 per cent," he says.

The A One brand will be sold through the company's distribution network of more than 2,200 retail outlets. The company hopes to sell 1million refrigerators (including direct cool) in 2003, and hopes to notch up turnover of Rs 1,000 crore. © 2002 agencyfaqs!