"We view the global economic downturn as an opportunity..."

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Woody Nam, President & CEO, LG Electronics Asia talks about recession tactics in this exclusive with B&E

B&E: Given the weak global sentiment (US recession), how does LG view its role in India’s development vis-à-vis the ongoing slowdown? WN: In these challenging economic times, we expect a shift in consumer mindset including Indian consumer market – away from high priced, high premium goods and services, and toward products that make a lot of sense price-performance wise. Consumers want better-looking, more feature-rich devices that perform better, but not necessarily costing much more.

With our vast manufacturing and design resources, LG has the ability to make available a wide range of product categories catering to the premium, mid-range, and value markets. We actively involve our customers in product development and feature plans (customer insight-based products and services) that match with customer and market demands of ensuring a more endearing consumer experience, and wider availability of popular LG products across the states.

B&E: LG went for a global repositioning exercise in 2007- 2008. But of lately, the company has shifted its strategy from premium to lower end products in rural areas? What is the rationale behind this move? WN: LG has not shifted its strategy but rather, we view today’s global economic downturn as an opportunity to increase our brand visibility and sales momentum. LG has the ability to make available a wide range of product categories catering to the premium, mid-range, and value markets according to target market needs. The company expects a 45% contribution to its 2009 turnover from demand of entry level products in the rural areas. Sound macroeconomic initiatives previously undertaken by rural municipalities have seen economic growth outstripping that of urban centres. The resulting increase in disposable incomes and purchasing power has led to continued and healthy demand for consumer durables. LG aims to continue its market development focus in rural areas, and increasing revenue contribution from booming rural markets. In the higher-end and premium product segment, LG will continue to focus on key urban markets in India.


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Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam Chaudhuri (Renowned Management Guru and Economist).


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