LG plays pricing card for laptops

LG Electronics is hoping it will be second time lucky as far as laptops are concerned. Two years after withdrawing its laptop models from the Indian market, LG is back – but with a key change in its game plan.

Last time, LG was playing in the premium range only; the effort this time is to be in the affordable segment as well.

Consumer research found that Indian consumers look for affordable laptops with sleeker designs, and they do not want an overdose of extra features many of which they would not use.

For instance, the earlier models were powered with features such as blue core (blue tooth function), additional dual screen for viewing from both sides, additional number of USB ports etc.

Sanjoy Bhattacharya, product group marketing head-IT, LG Electronics, says the company will bank on its USP of offering value for money - that is all the key attributes of a 14 inch laptop in a 13.3 inches notebook.

"We aim to be among the top five players in three years," he says.

LG has re-entered the Indian market with 13 notebook models. Compared to the earlier pricing of Rs 32,000 and above at only a few price points, the strategy this time is to be present in the Rs 26,000 to Rs 66,780 at many price points.

For the affluent, it offers two 3D-enabled laptop models priced at Rs 66,000 and Rs 69,000, which the company says is much lower than competition.

LG hopes to have three per cent market share by the end of the next year. So its product differentiation involves models that are 50 per cent slimmer and 16 per cent lighter than those of competitors.

The

company is also getting its distribution act together. Initially, LG will place notebooks in 125 brand shops, 300 IT multi-brand outlets and 40 large format stores.

By the end of this year, the numbers will expand to 250, 600 and 40 respectively.

The long term plan is to offer notebooks at an attractive price point of about Rs 22,000. This is necessary as the mass segment products priced at Rs  25000-32000 account for 70 per cent of total laptop sales in India.

The laptops and notebooks market is estimated to rise to 4.4 million units by the end of this year, growing at an average of more than 20 per cent every year.

Since LG is still testing the waters, it has chosen the right time to launch notebooks just before the festive season.

In the first year of launch, LG will target home segment, students, professional and gamers.

It will opt for a lot of Below the Line (BTL) activities like on-ground activation and in-store merchandising.

Bhattacharya says, "This year, we are very careful about our advertising spends and marketing budget. In 2012, we plan to launch a full-fledged campaign with a lot of advertising spend in mass media as well as BTL activities."

Bhattacharya says LG will be very careful about its advertising and marketing spends on laptops and notebooks this year and will restrict it to Rs 5-6 crore (Rs 50-60 million).

Milan Sheth, partner-IT advisory, Ernst and Young, says, LG is a fairly known brand in India; so a decent market share in laptops should not be a problem.

However, the company needs to come out with newer models every year to compete with traditionally established players like HP, Acer, and Dell.