New Delhi, Aug 19: Having decided to aggressively target the rural and semi-urban market in India, Korean major LG Electronics has begun offering cheaper models of its products and customising these to maintain marketshare and beat competition. This strategy has seen the company setting up 59 remote area offices (RAOs), 31 branch offices and several central area offices (CAOs) over the last few months to be able to reach consumers in remote areas, smaller towns and districts over the last few months.
"In fact, we have also launched several economy models in these areas which have fewer features than the main models and hence cost less to the consumer. This helps to beat competition and gain mindshare," Head of Marketing at LG Electronics India (LGEIL) Anil Arora told here. Thus, the ‘232 GPE' frost free refrigerator model launched in Maharashtra and some parts of South India lacks the twister tray, FIR lamp and deodoriser, but then it costs up to Rs 1,000 less.
In colour televisions, the 14, 20 and 21 inch models for rural heartland do not contain four speakers (only two), back woofer or games and are thus priced at about Rs 1000 lower.

Arora said in the case of air conditioners, the company has decided to take on the local, unbranded manufacturers.

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"We have recently launched the 1.2 tonne model specifically for north and south of the country. Typically, people in western India are happier with a one tonne capacity. The heat in north and south demands a larger tonnage but 1.5 tonne becomes much more expensive," he said adding the 1.2 tonne model is about Rs 2,000 cheaper than the 1.5 tonne one.
For washing machines, the company has launched three models in the semi-automatic category, which cost up to Rs 800 less than the fully-automatic variant.

In microwaves, the company has used a strategy similar to ACs by launching a lower capacity model to target the booming market of oven toaster grills (OTGs), priced at a competitive Rs 5,990.

He said the company has invested significantly in putting up the branches, RAOs and CAOs and expects to reap dividends by focusing on the remote areas and smaller markets in the form of a healthier bottomline.
Bureau Report