lg electronics watch phone essay
The buyer electronics sector is connected with rapid development, leaps in innovation and fierce competition. LG’s try to release their particular latest technology, this timepiece Phone, is essential in order to protected their current position as one of the dominant marketplace leaders. Using a well-integrated and effective marketing plan, LG has the probability of change the marketplace with a item that is similar to a sophisticated timepiece beyond the full functionality of a smartphone. After previously having launched the product in Europe, LG ELECTRONICS is now facing the task of expanding the device’s market to include Canada.
Having identified a target market, the promotional plan will concentrate on first raising awareness of this new product inside the Canadian marketplace. With significant financial resources to get a large promoting budget, all of us recommend a number of forms of traditional means of advertising and marketing as well as joint advertising with telecommunications companies. The product must be conveying a picture of a elegant luxury good for young well-off professionals.
Furthermore, pricing decisions echo a skimming strategy plus the product will be distributed with the “big 3 telecommunications companies in Canada.
Through an analysis with the internal and external environment as well as hazards and options facing LG ELECTRONICS, we are self-confident that the firm is ready for success in achieving substantive sales within the profitable marketplace we have discovered. We approximate justifying each of our budget with 25, 1000 units sold and a profit margin of 25%. Ultimately, we want to attain robust earnings for each of our shareholders and capitalize about this opportunity to help to make LG the main household company for consumer electronics. The Canadian Market Launch
The LG Watch Telephone is a innovative new product in the consumer electronics market making its way to Canada initially since its initial launch in Europe a year ago. As this is a brand new product in a segment of its own, creating this product as being a success in the volatile technology industry will probably be largely caused by the actions LG’s advertising team features the period prior to the kick off. Our work is to develop a comprehensive promoting plan that could present the value of this product to the target market and be sure that this product will be successful in the Canadian market in the next launched.
Having completed a thorough analysis of the external environment, our internal competencies and the needs of today’s customers, we can identify a target market, a positioning approach, and an advertising mix that will create popular in the market, bringing about an overall lucrative launch and sustained support life cycle. Research External Impact on One of the major options for LG Electronics is the fact that that the portable consumer electronics sector is exhibiting the highest growth in comparison to in-home and in-car electronic goods ” in 2008 this segment captured 46. 8% of the total consumer electronics industry.
In United states, mobile phone goods are in greatest require, recently accounting for 18. 5% of consumer electronics sales. Additionally , professionals observe that the industry is actually not negatively impacted by the economic crisis and the prices for these gadgets remain stable. Furthermore, the portable consumer electronics market at the moment demands regular product miniaturization and integrating multiple efficient features and multimedia inside the device, which bodes very well for LG’s Watch Telephone. With this gadget, LG goes one stage further, launching the first wearable mobile phone ever made.
This product is definitely something that has great potential to catch about with the marketplace. In terms of opportunities that are distinctive to the Canadian market, it is crucial to mention that LG continues to be successful in Canada for many years and has established relationships with the telecommunications providers and other members from the distribution network. Finally, there is the opportunity to work with Canada because the ‘test’ market, implementing the marketing plan and making the mandatory adjustments before a future launch into the United States as a result of similarities among these two markets.
However , LG’s path to achievement in Canadian market is filled with dangers. Firstly, although the industry made it the financial disaster without being significantly impacted, it is unknown whether the prices pertaining to consumer electronics will not decrease in the near future. Moreover, that still has to be proven the general public is usually ready for mass commercialization of wearable cell phones. Specific to Canadian industry, the major threat is the intense competition. Albeit no competition has the same product, the large players in the market have much lower prices compared to the Watch Phone’s European providing in their merchandise.
In comparison with telephones ranging from $0 to $199. 99 on contracts and from $110. 00 to $699. ninety five without this, LG’s Euro price of $1, 290. 00 on the 12-to-24 month contract appears enormous. There exists a threat that the customer will not be willing to part with such cash for the significance that the LG ELECTRONICS Watch Cellphone provides associated with. Internal Expertise and Deficiencies LG currently offers a variety of different products readily available through various sources. Goods are available at many main merchants including Foreseeable future Shop, A few days ago, and Rogers.
Within the consumer electronics industry, LG ELECTRONICS produces cellphones, televisions, and home appliances that happen to be made to be seen as superior products. With all the premium positioning of their products comes higher prices generally compared to rivals. LG generally incorporates tv and print ads because of their new product lines, which follows the industry specifications. In addition to traditional promoting LG have been involved in marketing campaigns with both Avatar and Transformer remanufacture. Strengths:
LG ELECTRONICS is the fourth largest South Korean international conglomerate firm as they are suffering from a strong manufacturer identity and reputation of being an innovative head in the electronics industry. The business is currently the 3rd largest cellphone maker in the world with a large market share inside the mobile phone industry. Their business in the electronics industry is 5 percent, which can be comparable to market leaders. This is certainly accomplished by always introducing industry leading products by utilizing high quality components in their creation.
Also, LG has a significant amount of economic resources designed for funding of promotional campaigns. In addition , LG has the advantage in development scalability coming from consistently delivering and producing a variety of trusted products from previous encounter. Weaknesses: To the disadvantages, LG looks the biggest trouble of being fresh to the Canadian Market. LG ELECTRONICS is a company which includes never experienced the market of producing wristwatches. Watch enthusiasts may have got doubts whether or not LG is familiar with the watch sector.
They also like variety and quite often like to have on different wristwatches for different occasions. There are at present numerous fresh functionalities to get a watch and there may be worries of this merchandise being able to adapt to them. This timepiece Phone is quite expensive at the current selling price of $1290 on a doze to twenty-four month contract in the UK and so the price is high compared to competitors. Consequently , consumers should be enticed to leave their particular existing phone contracts to change over. The Watch Phone can also be seen as annoying due to its size of being too bulky.
The Young, Rich Professional We certainly have decided to target men within their 20’s to the age of forty, who have been university or college educated and are also classified as “young professionals in today’s demographic segments. This market internally focuses on the importance of stylish however functional goods that deliver a pronounced impression of achievement and convey the individual’s sophisticated taste inside the newest fashions and technical advances. Geographically, the consumers are urban/suburban users of densely populated towns in Canada.
In the business world, a wrist watch is regarded as a great accessory to demonstrate wealth and power aside from the obvious function of informing time. Therefore we are looking to specifically goal university informed men using a medium to high profits level and who have a desire to go after further monetary success. This age group is definitely targeted because of Generation Times and Sumado a characteristics that will make the group more attracted to the Watch Telephone. Both Technology X and Y are favorable potential consumers in the Watch Telephone because of their employ and acknowledgement of technology.
More specifically, Style X provides the spending power while Gen Y provides a strong love for digital electronics just like cellphones, digital music players and digicams. Based on the widely used psychographic system of VALS, the main behavioural segments we all aim to focus on are the innovators, achievers, strivers and experiencers. The pioneers are characterized as powerful, sophisticated transform leaders who are energetic consumers and also make purchases that reflect a taste to get finer points. Similarly, achievers are also active consumers whom favour respect products that demonstrate their particular success in addition to the value in functional rewards.
Thus a novelty merchandise that incorporates the capability of a watch and a mobile phone together together with a stylish charm that can convey success can cater to the tastes and preferences of those two VALS segments. The lifestyle of strivers involves getting trendy, fashionable and presenting status. The experiencers spend high helpings of their cash flow on becoming fashionable and acquiring the most recent in any pattern. Another big advantage that the enjoy phone provides is the capacity to satisfy customers who will be active in sports. While using surge of mobile devices, folks are increasingly trying to incorporate the usage of them in their daily athletics.
Similar to the adjustable rate mortgage band strap of mp3 format players utilized by runners, the Watch Phone facilitates the use of technology while working out, providing great value to working pros who are also health conscious and therefore are actively attempting to stay fit (no pun intended). Decision Requirements The decision all of us make has to be made to make sure that a few key criteria happen to be met: 1 ) Our activities create popular demand for the LG view phone in the Canadian industry 2 . The activities guarantee profitability in the short term as the technology sector is speedily evolving 3.
Any decisions we produce must parallel the quest and ideals of LG Electronics, Incorporation. An Integrated Marketing strategy To be able to phone the LG ELECTRONICS Watch Telephone a success in the Canadian market proceeding the upcoming kick off, we need to put in motion a complete advertising campaign which will introduce industry to our groundbreaking new product. This kind of LG Enjoy Phone will probably be portrayed as the latest and greatest in the consumer electronics sector; this is a tool that easily simplifies everyday life if it is attached to your wrist all the time.
The LG Watch Mobile phone will get common media attention through a number of promotional mediums including tv set, magazines, and the Internet. This system will be listed as a high quality product and can target those young pros who business lead a busy life and have a purpose to stay within the leading edge of technological innovation. By making use of advertising methods aimed at straight targeting the young, well-off professional, all of us put yourself in a good position to get a successful launch inside the Canadian marketplace. Marketing Strategy
A differentiated segmentation strategy will make the most feeling for a item of this nature. Like various major cellphone releases, you will discover often several specifications to pick from and could be distinguished through variety in data storage area size, design (ex. shade and size), screen resolution and most importantly price. Additional, service carriers in Canada will give you major discounts on the selling price with the phone if you decide to purchase a 3-year plan combined with the phone. Customers have the option of choosing between paying out full price or a discounted price having a contract by carrier.
Providers also provide a variety of plans to choose from that allow each price part a different giving. Experienced experts most likely pay full price tag price or perhaps sign which has a plan. The very best positioning technique would be to focus on product attributes that are most critical to the target market. Due to the novelty and impressive appeal of the combination of a watch and a phone, the merchandise largely echoes for alone. It makes sense for the product to focus on leadership, putting importance about dimensions of innovation, quality performance, design and stability (See Demonstrate A).
Based on this strategy each of our positioning statement is as follows: “For youthful, affluent experts who are searching for a sleek, stylish, cellphone, the Watch Cellphone is a revolutionary smartphone that combines the convenience of a enjoy with the technology of a mobile phone unlike virtually any traditional mobile phone. Customers will look at this product as you that will satisfy a internal need. A lot of people in our target market will have equally a cellphone and a watch, but a product that will integrate two essential products in a young male’s life will be very attractive to that each.
The price will be set at a premium, meaning that once they realize and enthusiastic about the LG watch phone through each of our promotional advertising campaign, they will make a change by making a complex purchase decision in which a complete information search will take place. This means that it is truly essential that the information on the product can easily be bought to all potential consumers. Advertising Mix Item The LG ELECTRONICS Watch Cellphone is the first of its kind with a wristwatch format with both the dual functions of a phone watching. LG contains a first ocasionar advantage because of this.
Rewards include features such as a touchscreen, 3G connectivity, Bluetooth, net browsing, diary, waterproof supplies and a speakerphone. The Watch phone offers the convenience of hands-free features and text-to-speech. All of us will marketplace the LG Watch Telephone as a specialty product. As a result of growing competition in the gadgets industry, customers have a variety of choices when considering a new mobile phone purchase. This environment induce consumers being highly involved in the purchase simply by comparing distinct brands/models when it comes to their order.
The product usage cycle to get the Watch Mobile phone should be comparatively quick, due to relative benefits, compatibility, observability, and trialability. The LG ELECTRONICS Watch Mobile phone is consistent with consumers past need for mobiles in this marketplace with further advantages just like being lightweight, stylish, and convenient. Buyers will have the ability to test and see the phone at several different vendors. It should be seen as an “fashion statement and as a standing symbol. Today’s consumer provides a high cast for brandnames.
The “Watch Phone brand should be associated with the LG product and have LG’s premium merchandise status in the next launched. Circulation Channels LG ELECTRONICS currently has the option to disperse through multiple carriers or possibly a single company. It is best to stay consistent with LG’s current distribution model, with the Watch Cellphone available by using a variety of systems. The Watch Mobile phone will have a selective circulation strategy throughout the 3 primary carriers: Rogers, Bell, and Telus. These types of three maintain 95 percent of the Canadian market share.
Koodoo and Virgin also not in favor of our product’s core values by advertising and marketing low cost telephones with inexpensive plans. Rogers, Bell, and Telus are all well known to transport more expensive cell phones with high end plans. Prices Strategy Because the Watch Phone operates in the very unpredictable, fast moving technology sector, our main objective is to adopt a profit orientation to ensure LG profits as much as possible using this product ahead of trends in the market diminish the need for the watch phone. This can be a luxury merchandise, meaning that with regard to the watch cellphone will be inelastic when factoring in the price.
Also, since there is no genuine comparison towards the product available in the market ” our company is the first-mover. This will allow us to set the cost in a way that demonstrates the inelasticity of this industry segment The Watch Phone are operating in a grey industry. On one aspect, the watch marketplace is very monopolistic. The touch screen phone market on the reverse side is monopolistic as well, by key players such as Apple, Samsung, Blackberry, etc . The LG Enjoy Phone operates in a market of its own. This can be a merger of the smartphone and watch markets ” a market we all call the “SmartWatch market ” the monopoly.
Therefore there is no price competition ” at least until others start production their own performance of a watch-phone. To take advantage of this kind of, we will implement a price-skimming strategy. We can set the cost high in the beginning to capture huge margins from your innovators and early adopters, who are going to pay the purchase price premium as a swap for being major to own this kind of a revolutionary product. This strategy is very important to be able to restore the costs linked to R&D.
Once competitors enter the market, competition will power LG to lower the price on the product, which is in line with each of our initial value skimming technique. This will get the rest of the market who were awaiting a more inexpensive time to buy. As the European Kick off had the phone at above $1, two hundred USD, we feel that while using traction the item has on the market, we can be flexible and drop the retail price down to $799 for the Canadian release. Promotional Technique As LG ELECTRONICS has a huge budget for advertising and promo, having to determine our plan of attack with regards to promoting becomes quite easy.
We can use an objective and task technique wherein the budget is reflective of all advertising activities LG deems necessary to create a with regard to the product. To produce the demand that people are looking for, we will use numerous various mediums to pull our target market to the merchandise: 1) Tv set Usage of 30 second television set spots during evening primary time and sports will allow all of us to reach each of our target market, who also are likely to be watching the news at nighttime and their favourite sports groups otherwise. ) Magazines We will be promoting the Watch Phone in gossip columns such as Forbes and Wired. These journals epitomize the kind of consumer our company is targeting, and portray the professional and tech savvy lifestyles our target market grows in. With approximately $600, 000 in magazine spending budget, we should all of us able to acquire 4 total page ads throughout the year in Forbes and Wired (see Exhibit E) 3) Net Since this is LG’s groundbreaking new product, the watch-phone could make a big presence on LG’s website.
LG’s website could have a “composer tool that will allow the consumer to “build and price all their product picking from the several features available. We will make use of the interactive mother nature of the internet to create excitement through social websites (including Facebook, Twitter, and YouTube), as well as show some of the finer details of the product to portray the quality of the LG ELECTRONICS Watch Cellphone. Using a mixture of rational and emotional charm in our advertising and marketing efforts will make sure success just for this product.
Allowing for consumers to find out all of the recently unmet demands which can be hit with this product, along with resulting in the sense of luxury, uniqueness and a way statement can help drive the demand for the Watch Phone. We now have recommended an advertising budget for the Canadian industry of $5 million. In 2007, LG spent roughly $9 million on the advertising of their cool product, the “LG Chocolate. Considering the fact that this was in the usa, we foresee a $5 million finances to be affordable for the size of the Canadian Market.
One of them will be a $2 million endorsement deal with Canadian born Sidney Crosby. Sidney is an ideal decision for our celebrity validation as he can be described as Canadian icon who meets the explanation of our target market. He will help to make appearances in our commercials and portraits on our site. Our spending budget will be divided into 3 main groups based on a $3 , 000, 000 allocation after our celeb endorsement spending, as illustrated in Demonstrate C. Expected Results
All of us did some calculations to be able to predict the sales to get the first 3 years following your release with the phone in Canadian market. We know that in 2008 buyer electronic product sales in America totaled $515 million. Furthermore, we know that cell phones constituted 18. 5% of overall buyer electronic revenue. For the growth rate for worldwide gadgets sales we used is 8% last year and 10% in 2010. Fairly low growth rates are being used because of doubt instilled by recent economic crisis.
Also we introduce a “Watch Mobile phone restrictive factor that reduces the expected sales because of uncertainty with the real capacity of such a uniqueness gadget to achieve the necessary grip in the market. With the proportion of Canadian population to the total North American population, the LG’s market share inside the consumer electronics market, and the percentage of LG’s cell phone sales in Canadian market that LG’s Watch Phone is going to account for, we are able to produce a fairly conservative outlook that nonetheless allow LG to break even and make a reasonable revenue.
Looking at Demonstrate B, the vertical axis represents the projected Enjoy Phone product sales in Canada (in thousands of dollars). Then, the differently colored bars stand for projections for various Enjoy Phone product sales percentages pertaining to total LG cell phone sales in the Canadian market (these are indicated on the right; each color corresponds to a percentage of LG’s phone sales for 3 years after launch; 2009-2011) (Exhibit F).
Using a profit margin of approximately 25%, our $5 million advertising budget is validated with 25, 000 units sold in Canada. On the chart, we can see that only in the worst case (blue bar) intended for 2009 can we not cover our marketing budget getting 1 . a few thousand products short of the specified amount. Nevertheless , in subsequent years we feel that we could now not only cover the marketing price range, but also generate solid profit.