Assignment Sample M26197 International Marketing

About the company

  1. LG is a South Korean multinational conglomerate engaged with manufacturing and its headquarters are in LG Twin Tower Building in Seoul, South Korea.
  2. The company has been operating since 1958.(com, 2022)
  3. The company originally started business in South Korea and later opened subsidiaries in different parts of the world.
  4. The company started high-incomewith its main services being chemicals, electronics, and telecommunications and further included technologies to improve their products through digitalization.(com, 2022)
  5. The name of the brand is LG. However, there are many subsidiaries such as LG Chem, LG Electronics, LG Uplus, Zenith, LG Energy solutions, LG Display, and others.(com, 2022)
  6. The country is already international. Among the countries the company operates in, India, Argentina, and Brazil are the three most important ones. (com, 2022).
  7. They serve both businesses and consumers.
  8. The profit of the company in 2018, 2019, 2020 was 15,336, 16,317, and 16,557 The turnover of the company in these three years was 15,081, 15,336, 16,317 billion Korean won respectively (Lg.com, 2021).
  9. The country is operating its international business with several countries. Some of the important ones include India, Brazil, and Mexico.(com, 2022)

About the selected product and services

  1. The product chosen is LG televisions, which is a product from the company’s line of electronic appliances.
  2. LG televisions have been an important home appliance for decades and are known for their advanced technological features as well as latest design. The selling point of this appliance is the high-quality resolution it provides with amazing sound quality. (com, 2022).
  3. The product is purchased mainly by consumers and also by businesses (com, (2022).
  4. The product is available in online as well as offline markets. It is sold in shops as well as through websites.
  5. The cost of the appliances ranges from $450 to $1250 and depends upon the size and latest features (Lg.com, 2021).
  6. The company sells directly through its websites and retail outlets as well as through online vendors and agents.
  7. Television has always been an important part of people’s lives through ages since its origin. LG Televisions manufacture their products with the aim to improve a user experience while incorporating the latest technology. Features like blue ray filter, Dolby sound support, and sleek bar-less design are the ones that make these televisions stand out (com, 2022).
  8. LG advertises using many taglines some of which include “future’s technology”, “life’s good”, “because one size doesn’t fit it all”(com, 2022).
  9. The target customers for LG TV are mostly the age group from 30 to 50 years. TV is the most used appliance by retired older people as the younger generation has access to the world’s whereabouts through smart phones. Although television is important for the daily news updates, entertainment as well as family gatherings on weekends.
  10. The revenue of the past three years that has been mentioned previously is seen to be rising (com, 2022).
  11. The product is being purchased by customers.
  12. No, this has not changed in the past five years.
  13. The quality and affordability of the product
Strengths Weakness
1.     Leading the market of home appliances(Lg.com, 2022).

2.     Has appliances priced for low to high-income groups.

3.     Units of manufacturing in areas allowing tax incentives

4.     Wide distribution network

 1.     Export-oriented(Lg.com, 2022).

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2.     Risk of exchange

3.     Relies heavily on debts that are short-term (Abs.gov, (2022).

 
Opportunities Threats
1.     The high growth of the home appliance market (Lg.com, 2022).

2.     Strategic alliance

3.     Technological advancements(Lg.com, 2022).

4.     News product launch scopes

 1.     Competition market (Comparably.com, (2022)

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2.     The similar price range with competitors

3.     Competitions with Chinese and Indian companies.

4.     Cyclicity and volatility exposure risks through subsidiaries such as LG display(Abs.gov, (2022)

About the country

  1. The country that has been chosen is Australia.
  2. The population is 2.57 corers as of 2021 and shows a rising trend (gov, (2022).
  3. The GDP of the country for 2017, 2018, 2019, 2020 was 2.30% ,2.95%, 2.16% and – 0.28% respectively (com, (2022).
  4. The demographic profile of Australia has changed over the last 3-5 years.
  5. The average household income in 2018 was $116,590 and the national average household net wealth was $1,022,220. The per capita income in 2016, 2017, 2018 and 2019 was $46,220, $47,160, $48,660 and $50,540 respectively (Idc.com, 2021).
  6. The country is a representative democracy.
  7. The main religions are Christianity, Catholicism, and Anglican.
  8. The country has political stability, with a federation of six states and two self-governing territories formed in 1901 under the name, Commonwealth of Australia. The three tiers of democracy include federal, state, and local governments (gov, (2022).
  9. Australia is technologically advanced with predictions on edge acceleration, infrastructure, and AI extension as the three major technologies that will be available by 2025(com, (2022).
  10. There is no restriction on the import or buying of the chosen product.
  11. No restrictions have been discussed.
  12. A goods and services tax of 10% is applied to imported products (Ato.gov.au., 2021).
  13. No rules are mandatory
  14. PESTLE ANALYSIS
Political ●      Politically stable nation(Dfat.gov, 2022).

●      Good foreign trade policies and relations with other nations

●      Governmental compliances on environment protection(Dfat.gov, 2022).
Economic ●      GDP was -0.28% in 2020 due to Covid (Abs.gov.au, 2021).

●      The inflation rate was 0.89% in 2020 (Rba.gov, 2022)
Social ●      Awareness of the technologically advanced features on television

●      The increasing rate of literacy for understanding the functioning of such advanced appliances(Ato.gov.au., 2021).
technological ●      Technological advancements in-home appliance sector

●      Advancements in including cloud storage options in televisions.
legal ●      Intellectual property is to be taken care of

●      Laws on environmental protection

●      Taxation laws due to heavy penalties(Ato.gov.au., 2021).
environmental ●      Replacement of plastic items and parts

●      Recycling

●      Reducing carbon footprints.

About the customer and consumer

The demographic characters of the target consumers of LG are low, medium, and high income groups of the society. The target customer includes both males as well as females of the age group from 30 to 50 years and above.

Customer persona

Name of customer William Smith
Background William is an educator who keeps himself updated on high-income appliances with implementations of the latest technological advancements. He is a science teacher at an institution in his locality. He has pursued his degree in technology and has a keen interest in the latest technologies available in the market. He spends his time after school watching TV, so he wants the watching experience to be comfortable and interesting.
Demography

 

 ●      Gender: male

●      Age: 35-36 years

●      Income rate :£26,000 to £35,000 per annum

●       Marital status: married

●      urban
Identifiers ●      Online shopper

●      Tech enthusiast

●      Multitasker

 
  • The affinity of customers and consumers towards social media is evident.
  • The consumers have individual preferences while buying the products. They prefer both e-commerce platforms as well as retail stores.
  • LG televisions focus on latest technology for manufacturing their electronic appliances specially TV. The features like sleek design, great picture quality and latest technologies are preferred by the target consumers.
  • According to Śniadkowski, (2021), the purchasing habits of consumers are changing as the competition in the market is increasing. More affordable variants with similar specifications are coming to the market everyday which is leading to this change in purchasing habits. The sales of the company have shown deviation from its records a few years ago. The company however still has the4 highest sales in the electronic market due to a loyal customer base.
  • The product is sold at a price which includes a portion of the GST imposed on the product trade. Thus selling the product in the Australian market at a price similar to the native market would make it cheap but is practically impossible.
  • There is a difference in customer and consumer of LG as the organisation manufactures both product and services. The customer base is focused on purchase of products while the consumers have selections on the provided services (Majchrowicz&Duch, 2021). Therefore variations in requirements are the reason why the customer and consumers of the organization are different.

Local culture

  1. Description of the Hofstede Australian culture

Australian marketing culture prefers individualism and long-term orientation planning policies. The power distance strategies of Australia are comparatively weaker than its indulgence strategies as it is constantly improving on its masculinity. The degree of interdependence and uncertainty avoidance ability of Australia is constantly improving in the last two to three years.

  1. Similarly and differences of its products

The country of origin of LG is South Korea in which long-term orientation and uncertainty avoidance scheme is comparatively strong that its power distance and individualism approach. However, South Korea is concentrated on implementing power distance and managerial approaches in the operational strategies of the organization.

Figure 1: Hofstede country comparison

(Source: Hofstede-insights, 2022)

3.Demographic factors

The two countries differ majorly in individualism and long tern orientation which impacts the outlook of both countries (Hofstede-insights, 2022). There is also a difference in masculinity with Australia taking the lead, which again decides the workforce gender bias in the country. The indulgence in Australia is more while South Korea has more power distance.

 

  1. Impact of selling LG product

An increase in the selling activities of the LG products helped in maintaining sustainable growth and improving sustainable performances in the operational activities of the country. Modified business approaches have been used in Australia to increase total selling products within the country.

  1. Discussion on the cultural or religious issues

The multicultural presence of people has been observed in Australia as its main focus is to maintain integrity in its domestic territory. Among the different cultures, Christianity religion of people is widely observed in Australia as they create certain problems with Anglican cultural people.

  1. Impact on marketing promotional techniques

One of the effective impacts of marketing promotional activities is to increase the business selling activities of the organization. However, increasing awareness and increasing brand loyalty promotional technologies helped in the operational activities of Australia.

Competitive landscape

  1. The major competitors of LG in Australia are Samsung and Sony
  2. The market share of Samsung was 17.8% in the year 2019 which is almost 6% greater than LG which had an 11% market share. The typical selling prices in televisions of Samsung and sony in Australia is $1350 and $1200 respectively
  3. The market shares are increasing as Samsung continues to add features that are affordable yet attractive. The case is different for Sony as the price range of the products is somewhat similar to LG.
  4. The Samsung televisions have been increasing their sales in the recent market owing to their high-quality features in an affordable price range. Both products being from the South Korean market, the sale of the product with the native market price range would not have been very different. However, the two companies’ approach towards improving the user experience makes the difference. Samsung focuses on the technologies that they use in their smart phones like screen casting from smart phones and wifi connection to relate Smartphone users and thus the customer base for these TVs keeps increasing (Irawan&Wahyuni, 2021). On the other hand, LG is more focused on improvising their technology in improving the traditional television features like screen and sound. Moreover, Samsung keeps its price range affordable with several new features which give it a competitive advantage in the Australian market.
  5. Samsung focuses on promoting its products to highlight its key features. The advertisements are made interesting and engaging which makes them more adaptable for all customers. The official website of Samsung is easy to access and thus more users can look through the latest products being introduced into the market.
  6. The key messages of the advertisements of Samsung television are “inspire the world, create the future”, “designed for humans”. They are different from LG advertisements. These advertisements highlight Samsung’s motives of emphasizing technology in their appliances and products (Irawan&Wahyuni 2021)
  7. The impacts are an increase in the competition within the home appliance market.
  8. Porter’s 5 force

Threats of new entrants: high

The threats of new entrances for LG are medium, as technological advancements are being implemented into the products rapidly, which is hindering the entrance of new companies.

Bargaining power of supplier’s: low

The suppliers ensure manufacturing and continuous supply of quality low-cost equipment for their products.Porter’s force shows that the bargaining power of suppliers is low as LG are shareholders of many of their supplier markets.

Bargaining power of buyers: high

However, the issue is the opposite in the case of the bargaining power of buyers as several variants within affordable price ranges are available in the market. However, owing to the pandemic situation there was an evident decrease in trade which has been an exception to this, as the power is now in the hands of retailers (Ibisworld.com, (2022)

Threats of substitute: low

The issue of threats of substitutes is low as some major electrical appliances of LG available in the market cannot be substituted.

Competitive rivalry: high

The competitive rivalry for LG is high, as the competition in the electronic appliance market is high. The latest technology, marketing gimmick, and interesting advertisements are some of the competitive aspects.

Figure 2: Porter’s five forces

(Source: Created by learner)

Marketing Mix

  1. The company follows an indirect route of supply of its products. Product is manufactured in the factory after which it is then supplied to the wholesalers. The wholesalers then send the ordered quantity to the retail shops where the customers can come and choose from the variety available.

Figure 3: Indirect rout of supply

(Source: Created by learner)

(Source: Created by learner)

  1. This does not need to change in the chosen country as their retail market is strong and customers frequently visit retail outlets for purchases.
  2. The 7p marketing strategy for LG is
  3. Product- the company should focus on additional benefits of the delivery, warranty, after-sales, and helpline services. Opportunities new on the market should be taken advantage of by the company. The testing of products before introduction to the market should be considered. The products should be launched through proper market analysis and researching on the development sector.
  4. Price- Allowancesdiscounts and psychological pricing should be given on newly launched products to increase the interest of the clients. Clever ways of pricing can improve the market value of the products and help the company use other opportunistic sectors like technology.
  5. Place- social media visibility should be improved and large retailers should be targeted to improve product availability for more consumers. The company should focus on opening company-related stores providing various services for all their products. The gender bias in the country should be considered while employing native people in the country and employees should be provided with proper training.
  6. Promotions- The Company should focus on hiring influencers and famous personals for promotion. They should undergo digital services to improve the issue of online traffic on their websites. The promotions can highlight the company motive to prioritize the customer’s needs rather than the innovations aspired by the company. Famous TV personalities and celebrities can broaden the effect from the advertisements to aid in sales in the country.
  7. People- training should be given to the new employees highlighting customer services and sales. Alongside proper training the employees should emphases on developing a good relation with the customers to validate brand loyalty.
  8. Process- computers should be used to improve efficiency and manage sales. Data’s and stats should be updated regularly and the maintenance of the systems is a priority.
  9. Physical evidence- the company should pay attention to customer feedback. Alongside customer feedback the company can rely on the motive of customers in buying a television.
  10. The product prices range from $450 to $1250 and do not need to be changed.
  11. The services of supply could make some improvements.
  12. The product is marketed on media and on e-commerce platforms. The website visibility through their official site can be improved.
  13. No, there are no restrictions on promotions in the chosen country.

Market entry

The international market selection process, this selection process follows a few parameters which include

  • Firm’s resources: the firm has well-trained customer-centric employees and tech experts to improve services which are important for market entry.
  • International environment: good international relations of the country are a main factor of it being an advantage for market entry.
  • Market situation: The Company has an 11% market share in the country and has a good place in the competitive market. This is advantageous in the market entry.
  • Nature of competition: the competitions are high with Samsung being an important one. This will help the company in improving their technology more to suit people’s needs and requirements.
  • Government policy- the government is stable and has good trade as well as environmental policies which are a positive factor for market entry.

Doole and Lowe marketing strategy

LG needs to be more customers centric in order to attract people to their products. It has been seen that there is an existence of LG in Australia but people in this country do not have an interest in LG products (Wiedmann&Lenzen, 2018). Thus, it can be highly recommended that being customer-centric can be the most effective market entry strategy for LG. According to Doole and Lowe, the most important international marketing strategy can be considered as the online marketing in recent days (Wu, Choi & Park, 2020). . LG needs to be focused on promoting their products in Australia.

 

 

References

Abs.gov, (2022).Statistics,  Retrieved on: 24th January 2022, from:https://www.abs.gov.au/statistics

Abs.gov.au. (2021). Consumer Price Index, Australia.  Retrieved on: 24th December 2021, from:  https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/latest-release

Ato.gov.au. (2021). Paying GST on imported goods. Retrieved on: 24th December 2021, from:  https://www.ato.gov.au/business/gst/in-detail/rules-for-specific-transactions/international-transactions/gst-and-imported-goods/#:~:text=The%20Department%20of%20Home%20Affairs,customs%20value%20of%20the%20goods

Comparably.com, (2022). Lg competitors, Retrieved on: 24th January 2022, from: https://www.comparably.com/companies/lg/competitors

Dfat.gov, (2022). About Australia,  Retrieved on: 24th January 2022, from:https://www.dfat.gov.au/about-australia

Hofstede-insights, (2022). Country comparison, Retrieved on: 24th January 2022, from: https://www.hofstede-insights.com/country-comparison/australia,south-korea/

Ibisworld.com, (2022). Consumer Goods Retailing in Australia industry outlook (2021-2026), Retrieved on: 24th January 2022, from:https://www.ibisworld.com/au/industry/consumer-goods-retailing/1720/

Idc.com, (2021). International Data Corporation (IDC) Australia/New Zealand. Retrieved on: 24th December 2021, from:  https://www.idc.com/anz

Irawan, Y., &Wahyuni, R. (2021, February). Electronic Equipment Control System for Households by using Android Based on IoT (Internet of Things). In Journal Of Physics: Conference Series (Vol. 1783, No. 1, p. 012094). IOP Publishing. Retrieved on: 24thDecember 2021, from:  https://iopscience.iop.org/article/10.1088/1742-6596/1783/1/012094/pdf

Irawan, Y., &Wahyuni, R. (2021, February). Electronic Equipment Control System for Households by using Android Based on IoT (Internet of Things). In Journal Of Physics: Conference Series (Vol. 1783, No. 1, p. 012094). IOP Publishing. Retrieved on: 24th December 2021, from:  https://iopscience.iop.org/article/10.1088/1742-6596/1783/1/012094/pdf

Lg.com, (2021). FINANCIAL INFORMATION.  Retrieved on: 24th December 2021, from:  https://www.lg.com/global/investor-relations-financial-info

Lg.com, (2021). Meet LG ThinQ. Retrieved on: 24th December 2021, from:  https://www.lg.com/global

Lg.com, (2021). REPORTS. Retrieved on: 24th December 2021, from:  https://www.lg.com/global/investor-relations-reports

Lg.com, (2022). Brand identity.Retrieved on: 24th January 2022, from:https://www.lg.com/global/about-lg-brand-identity#:~:text=LG%20is%20the%20brand%20that,of%20what%20we%20stand%20for

Lg.com, (2022). History.Retrieved on: 24thJanuary 2022, from: https://www.lg.com/global/about-our-brand#history

Lg.com, (2022). Overview. Retrieved on: 24th January 2022,from:https://www.lg.com/global/about-our-brand#overview

Majchrowicz, M. &Duch, P., (2021). Automatic Symbol Resolution on Embedded Platforms by the Example of Smart TV Device. Applied Sciences, 11(8), p.3674. Retrieved on: 24th December 2021, from:  https://www.mdpi.com/1424-8220/18/7/2156/pdf

Nelson, T., McCracken-Hewson, E., Whish-Wilson, P., & Bashir, S. (2018). Price dispersion in Australian retail electricity markets. Energy Economics, 70, 158-169. Retrieved on: 24th December 2021, from:  https://www.aemc.gov.au/sites/default/files/content/76b86f91-a7bc-443a-b6ab-7c987a545c99/MarketReview-Submission-EMO0032-AGL-171012.PDF

Rba.gov, (2022).Measures of Consumer Price Inflation,  Retrieved on: 24th January 2022, from:https://www.rba.gov.au/inflation/measures-cpi.html

Śniadkowski, M. (2021). Functionality of TV Control Applications. Advances in Science and Technology. Research Journal, 15(4). Retrieved on: 24th December 2021, from:  https://journals.sagepub.com/doi/pdf/10.1177/1354856517750365

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Statista.com, (2022). Total worldwide revenue of LG Electronics from 2009 to 2020 (in billion U.S. dollars)Retrieved on: 24th January 2022, from: https://www.statista.com/statistics/220847/revenues-of-lg-electronics-since-2005/.

Wiedmann, T., &Lenzen, M. (2018). Environmental and social footprints of international trade. Nature Geoscience, 11(5), 314-321. Retrieved on: 24th December 2021, from:  http://unsworks.unsw.edu.au/fapi/datastream/unsworks:50533/binf732827d-cef6-4000-a761-1f76f3c3c311?view=true&xy=01

Wu, X. X., Choi, W. J., & Park, J. (2020). “I” see Samsung, but “we” see Samsung and LG: The moderating role of consumers’ self-construals and perceived similarity in spillover effect of product-harm crisis. International Journal of Market Research, 62(1), 79-94. Retrieved on: 24th December 2021, from:  https://journals.sagepub.com/doi/pdf/10.1177/1470785319866404

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