LG Elextronis Essay Sample

LG Elextronis Pages
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The most promising action plan for the launch of the new watch phone in Canada is alternative 1 in the section below. The plan is to use penetration pricing with the two major telecommunications carriers in Canada; Rogers and Bell. The price point can be adjusted with a 12-24 month contract similar to the European launch and include bundles with our HDTVs. Wal-Mart and BestBuy in addition to Rogers and Bell can bundle the watch phone as a great incentive for the Canadian consumers. We will communicate with marketing mediums such as television, radio, webpages, newspapers, and magazines to help attract all consumers within Canada. We are looking to launch as soon as possible several months before Christmas time as it is the most ideal time. This action plan is surely to generate revenue and place the watch phone as a new competitor to the smart phone market in Canada. A: Defining the Issue (s):

Construct and execute a marketing strategy for LG Electronics to launch and promote their new watch phone into the Canadian market. B: Analyzing Case Data:
* Majority of the growth in the consumer electronics industry was attributed to the portable sector of the market and to the increasing popularity of product miniaturization * Products have been driven by consumers demands to listen to music, watch video, play games, and communicate anywhere and anytime * Top brand manufacturers are Nokia, Motorola, Samsung, Sony, LG, and Apple * In north America, high definition televisions (HDTV), mobile phones and laptop computers were in greatest demand * Wal-Mart and Best Buy were he largest North American sellers of consumer electronics * The watch phone is a wearable phone loaded with all the latest features including, 3G capabilities, a touch screen interface, an MP3 player and video calling.

* Was first launched in Europe in August 2009 and then proceeded to investigate ways to expand into the North American market * The watch phone is the first wearable handset available to consumers * Touch screen face of the watch measured at 3.63 centimeters long * Canadian carriers or carrier for the watch phone needed to be determined, specifically between Rogers, Bell, Telus, Koodoo and Virgin Mobile * Needed to determine whether it would be purchased on a contract or pay-as-you-go * Canadian price was not yet established however, in Europe it was priced at approximately $1,290 when a 12 or 24 month contract was signed ( $107.5/m and $53.75m) * LG would have to choose between a skimming pricing strategy and a penetrating pricing strategy * Competition would influence the pricing decision

* Need to determine how to entice customers to switch from their current handsets to the Watch Phone * Needed a significant amount of promotion to raise awareness in addition to determine the target market based on gender, age, location, income, education level, and/or occupation * Should it stress on the functionality or develop a catchy slogan? * Needed to determine the promotional medium whether it be television, radio, newspaper, billboards, or internet * Joint marketing with carrier or promotion available through carriers? C: Generation Alternatives

1. Execute a penetration pricing strategy with carriers Rogers and Bell by pricing the watch phone on either a 12 or 24 month contract and promoting bundle packages with HDTVs and cable services through television, radio, internet, newspapers, and magazines targeting both men and women of all ages and incomes levels.

Pros| Cons|
* A penetration strategy allows LG to cut into sales of competitors * A contract will lower the price point of the watch phone relative to a pay-as-you-go basis * LG can take advantage of its successful HDTV market by bundling it with the watch phone to make it more appealing * Both Rogers and Bell are the only carriers that provide services for cable, internet, and mobile phones * By only using the two major cable, internet, and mobile phone carriers a more exclusive deal can be cut lowing price point * No specific market to maximize consumer interest| * Penetration strategy cuts into revenue * By using only 2 major carriers as opposed to all Canadian carriers lowers product distribution * High cost of investment and uncertain consumer response to bundle packages|

2. Execute a skimming price strategy with all major carriers and pricing the watch phone on either a 12 or 24 month contract and marketing it through television, radio, internet, newspapers, and magazines targeting both men and women of all ages and incomes levels.

Pros| Cons|
* Skimming strategy allows LG to attract optimum profit by attracting people of medium to high income * A contract will lower the price point of the watch phone relative to a pay-as-you-go basis * By using all major carriers allows more a greater range in product distribution * No specific market to maximize consumer interest| * By pricing the phone high it may hinder sales * Using all major carriers may pose a higher price point|

3. Execute a penetration pricing strategy with carriers Rogers and Bell by pricing the watch phone on either a 12 or 24 month contract and promoting bundle packages with HDTVs and cable services through television, radio, internet, newspapers, and magazines targeting specifically male tech-savvy teens and young adults ages 15-30.

Pros| Cons|
* A penetration strategy allows LG to cut into sales of competitors * A contract will lower the price point of the watch phone relative to a pay-as-you-go basis * LG can take advantage of its successful HDTV market by bundling it with the watch phone to make it more appealing * By only using the two major cable, internet, and mobile phone carriers a more exclusive deal can be cut lowing price point * Both Rogers and Bell are the only carriers that provide services for cable, internet, and mobile phones * Niche marketing will target a focused consumer group * Predictable consumer response| * Penetration strategy cuts into revenue * By using only 2 major carriers as opposed to all Canadian carriers lowers product distribution * Lower sales from women and non-targeted groups * High cost of investment and uncertain consumer response to bundle packages| D: Selecting Decision Criteria

* Selecting a strategy that will allow LG to introduce its new product into an already saturated market. This strategy will ultimately be the success or failure for the LGs watch phone entering the Canadian market. * Ensuring that the watch phone is distributed through the major players in the telecommunications market who can provide the best service at lowest cost. This is a key decision as the distribution of the watch phone needs to be widespread, and seen by every Canadian on a wireless service contract. * Ensuring that the watch phone is priced competitively on either a 12 or 24 month contract for a competitive price point. This will ultimately determine the pricing for the phone and allow customers of all income levels to purchase the watch phone. * Promotion of the phone must meet the needs of every consumer in order to maximize profit and stay competitive.

The phone must be promoted with incentives to attract the Canadian market and ultimately give attention to the watch phone. * The marketing strategy must be placed on all media mediums in order to market the phone throughout Canada. Canadians are likely to hear about electronics through radio, television, and other mediums so it is key to market a strategy to that be attractive and informative. * Must include incentives as the watch phone is a very new innovation in the Canadian market. This is important because the watch phone is a new contender in a mostly smartphone dominated market. The watch phones needs to give consumers incentive to switch over to the new watch phone. E: Assessing Alternatives

1. Execute a penetration pricing strategy with carriers Rogers and Bell by pricing the watch phone on either a 12 or 24 month contract and promoting bundle packages with HDTVs and cable services through television, radio, internet, newspapers, and magazines targeting both men and women of all ages and incomes levels.| Strengths: Priced low so that it can enter into the smart phone market as a cheaper alternative for people of lower to middle incomes. Is very flexible for customers to be able to choose either a 12 or 24 month contract which ultimately allows people of all income levels to buy the watch phone. Bundling with LG’s HDTVs allow for better sales and a broader consumer market. Marketed on mediums that all consumers actively respond to. Weaknesses: Very high cost in order to bundle packages, market through all major mediums and sell through two major carriers. Unpredictable market response to bundling a watch phone with HDTVs.

Opportunities: By entering the watch phone through this alternative it can ease the Canadian market over to the more iconic watch phone.Threats: It can be looked as overzealous and very risky to attempt to convince Canadian consumers to stray away from the smart phone. In addition, there is a very saturated market with trusted brands that have already established customer loyalty.| 2. Execute a skimming price strategy with all major carriers and pricing the watch phone on either a 12 or 24 month contract and marketing it through television, radio, internet, newspapers, and magazines targeting both men and women of all ages and incomes levels.| Strengths: Uses a skimming price strategy to price the phone high to appeal to medium to high income consumers that can generate a lot of revenue for consumers who are looking for a more excusive phone. Very flexible for customers to be able to choose either a 12 or 24 month contract which ultimately allows people of all income levels to buy the watch phone.

Marketed on mediums that all consumers actively respond to. Relatively lower cost strategy.Weaknesses: By appealing more towards the higher income consumers it may hinder sales as is it more exclusive.Opportunities: The watch phone may be able to make optimum profit while there’s little competition in the higher price point for phones.Threats: It can be looked as overzealous and very risky to attempt to convince Canadian consumers to stray away from the smart phone. In addition, there is a very saturated market with trusted brands that have already established customer loyalty. Pricing the phone at such a high initial cost may be less appealing to consumers of a mainly smart phone market.| 3. Execute a penetration pricing strategy with carriers Rogers and Bell by pricing the watch phone on either a 12 or 24 month contract and promoting bundle packages with HDTVs and cable services through television, radio, internet, newspapers, and magazines targeting specifically male tech-savvy teens and young adults ages 15-30.| Strengths: Priced low so that it can enter into the smart phone market as a cheaper alternative for people of lower to middle incomes.

Is very flexible for customers to be able to choose either a 12 or 24 month contract which ultimately allows people of all income levels to buy the watch phone. Bundling with LG’s HDTVs allow for better sales and a broader consumer market. Marketed on mediums that all consumers actively respond to. Targeted specifically towards males who are more likely to find the watch phone attractive due to its sci-fi look and could like the inventive of buying it with a HDTV bundle package. A more predictable consumer market that can be targeted and isolated for greater revenue.Weaknesses: Very high cost in order to bundle packages, market through all major mediums and sell through two major carriers. Loses much of the Canadian consumer market by only targeting a specific groupOpportunities: By entering the watch phone through this alternative it can ease the Canadian market over to the more iconic watch phone specifically targeting the male tech savvy market.Threats: It can be looked as overzealous and very risky to attempt to convince Canadian consumers to stray away from the smart phone. In addition, there is a very saturated market with trusted brands that have already established customer loyalty. Targeting a specific target market be isolate sales too much and hinder sales.

F: Selecting the Preferred Alternative
LG Electronics is a widely known consumer electronics giant for mainly their HDTVs at 20.6% and 18.5% respectively for mobile phones in overall electronic sales. In order to successfully enter a mainly smartphone used country such as Canada; LG should use all of its advantages while exercising a strategy that will allow them to enter the market at a less dominated price point. As a result, alternative 1 is the ideal strategy for implementation as it allows the watch phone to be entered at a lower price point which will appeal to all income level consumers. In addition to the penetration strategy, the major carriers will be Rogers and Bell; the two telecommunications leaders in Canada. This will allow the watch phone to be distributed through their vast network of consumers. In addition to this, bundle packages will allow LG to take advantage of their success in the HDTV market and sell them together with the watch phone.

Rogers and Bell are ideal for this because they are the sole providers of internet and television in addition to telephone services. Wal-Mart and BestBuy are also large players in the electronic consumer market that can be a key partner in the sales of the watch phone. The media services will include television, radio, internet, newspapers, and magazines as they are widely known as what consumers see and listen to on a daily basis. This will allow LG to attract both men and women of all ages and income levels. This strategy is also ideal because in order for a new product to be introduced into a market, it needs to become widespread very quickly and appeal to all consumers. Cost must not be an issue because of the heavily saturated smartphone market and heavy competition with mobile smartphone giants. G: Developing an Action & Implementation Plan:

LG Electronics top management team needs to implement plan 1 ideally several months before Christmas time preferably in June when consumers will get a chance to see the product and take advantage of the high spending season. As a result of the implementation of the plan, the management team needs to look to connect with Rogers and Bell, as well as top consumer electronic businesses like Wal-Mart and BestBuy to negotiate the sales of the new watch phone. By doing so, it will allow LG electronics to enter the watch phone in into the Canadian market and ultimately gain revenue.

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