MARKETING STRATEGIES OF DAWLANCE AND LG

The study is based on the comparison of marketing strategies applied in LG. and Dawlance. In this study, the main focus to see the effectiveness of the marketing strategies applied by both the companies Dawlance and LG, for selling their products particularly efrigerators. !ust to understand the marketing strategies in general and refrigeration market in particular, one should know that what marketing strategies ought to be" #ho are the main players in the market" #hat kind of other products do they produce" $ow do they promote and supply their products" #hat type of competition is going on in the market" %nd finally what are the marketing strategies being applied by both the companies" These are the &uestions to be addressed, but the main theme is the marketing strategies of Dawlance and LG efrigerators. This paper is mainly divided in to four sections. The first section deals with the marketing strategies in general. The second section focuses on the main players of efrigerators in the 'akistan market. The third section sheds light upon the marketing strategies of Dawlance and L.G. Though the marketing strategies of all the products may be the same. (ut mainly it has been focused on the refrigerator marketing strategies here. )inally, the paper is concluded in the last section. %ll the information that is presented in this paper has been ac&uired and e*tracted from various primary and secondary sources. In this study, best possible efforts have been made to collect the correct and uncovered information. )or this, the information has been collected by both primary and secondary sources. 'rimary data is based on the interviews from the top officials of both the companies based on the semi+structured &uestionnaire. The secondary data is based on the published reports and Internet. 1. MARKETING STRATEGIES IN GENERAL )luctuating customer re&uirements and competitive forces are putting more pressure on marketing and are demanding superior marketing strategy and tactical e*ecution. The cycle time from product creation, to product launch, for a winning go+to+market strategy, leaves no margin for error. ,arketing puts the customer at the center of the organi-ation. The organi-ations, which do so, reap the profits. The idle marketing ought to be or the key steps to a successful strategy can be summari-ed as. 1.1 BE CLEAR ABOUT MISSION The common, customer+orientated thread running through all the activities of the organi-ation and how we define the kind of market oriented organi-ation we want to be. 1.2 MARKETING RESEARCH In marketing strategy some one should do know about the marketing potential for his the product and should find out through research that. WHO ARE OUR CUSTOMERS?

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MEASURE AGAINST STAN4AR4S AN4 CONTROL. 2. Ma%" /la er& o) the Re)r%-erator& %" /a!%&ta" Mar!et !ust to understand the refrigeration market, first of all we should know who the main players in the market are" %ctually there are two types of marketers. those who manufacture refrigerators locally and those who import and market the same in 'akistan. Local ,anufacturers of efrigerators are. Dawlance, #aves, 'el and /inger. These manufacturers roughly cater 012 need of the market. Imported ,anufacturers of /emins, efrigerators are. LG, /uper, General, $air, /am /ung, Indesit,

'arties import refrigerators from their principal and market the same in 'akistan. In+fact these all parties contribute only 312 of the market re&uirement. The above all are direct competitors of Dawlance and LG. electronics. 4. 5,arketing /trategies of Dawlance and L.G efrigerator5

(efore discussing the marketing strategies of Dawlance and L.G, first we will go through the profiles of the companies in brief. 4AWLANCE: Dawlance 6nited efrigeration Industries Ltd. was established in 7801. It is the Largest 9ompany in 'akistan engaged in appliance business. Dawlance stands for durable : reliable household appliances. Its refrigerator )actory is located in $yderabad. The main ;b<ectives are to provide dependable and reliable product at reasonable price to ma<ority of 'akistanis and to enhance their &uality of Life. 'resent ,arket /hare of Dawlance product is. refrigerators =>2, #ashing ,achines 4>2, ,icrowave ;ven ?12, 9hest )ree-ers ?>2, %ir 9onditioners 7>2, L.G. $aniska International is a multinational company, located in @orea. LG is an agent of $aniska International in 'akistan market. LG is an importer of home appliances in 'akistan. It imports efrigerators, %ir 9onditioners, #ashing ,achines : ,icrowave ;vens from @orea and 9hina. LG has got around 411 dealers all over the country. ,arketing ob<ectives of L.G are. to provide world class product to upper and upper middle class to en<oy real lu*ury in their life. 'resent ,arket /hare of L.G product is. efrigerators ?2, #ashing ,achines 32, ,icrowave ;ven 42, 9hest )ree-ers nil, %ir 9onditioners 3>2. 3.1. MARKETING STRATEGIES The marketing mi* is the organi-ationAs overall offer, or value, to the customer. AThe basic marketing mi* is often nick named 5the ?'s5 Bproduct, placeCdistribution, pricing, promotionDE these are elements in the marketers armory aspects that can be manipulated to keep ahead of the competitionA. $ere IAve e*plored the marketing strategies of Dawlance in terms of marketing mi* have been e*plored.

3.1.1 /RO4UCT STRATEG; The ob<ect of Dawlance is to provide refrigerator to all people who fall in lower middle, middle, and upper middle class in this country such that most of the families should have refrigerators in their home because they enhance better &uality of life. Dawlance has got products, which are as per international standards and carry all the basic features, which need in any such type of appliances. Dawlance believe that whatever they provide to their customers should be durable and reliable. %ll the products, which Dawlance market, are durable enough and customer can keep on using them for &uite many years without any problem. It provides its refrigerators, 4 years compressor guarantee and 7 year chest free-er, and free service in spare parts under normal use. #hereas, LGAs ob<ective is to provide world class product to upper class and upper middle class to en<oy real lu*ury in their life. /ince LG is a @orean brand and being imported from @orea, it has very advanced features, which are normally demanded by in developed countries. LG also insures that whatever product they market should be durable enough which last &uite many years and give trouble free service to their customers. It provides its refrigerators, five years compressor guarantee and one year free service in spare parts under normal use. 3.1.2 /RICING STRATEG; Dawlance has got around >3 models in their refrigerator product line. )rom the price list and discussion had with their management, it appears that they have position their product pricing in such a way that their main focus is middle and upper middle class. $owever, they have some selected range for upper class as well. 'roduct+wise price list enclosed in appendi* for reference. Dawlance has got a policy that their all product price should be the same in all cities and town in 'akistan market. Dawlance bear freight cost and make their product available to their dealers irrespective of where they are located. )or this, they give uniform margin to their dealers irrespective of whether he is big or small. Dawlance consider pricing as one of an important element of marketing mi*. It believes that their retail prices should be uniform all over the country irrespective of whether customers buy from 'eshawar or @arachi. In order to maintain a uniform price all over the country, Dawlance bear transportation charges and make the product available at cost price at dealer premises. #hereas the LG pricing strategy is cost F fi*ed mark up to cover their G'. /ince they cater to upper middle and upper class, therefore their 812 dealers are in big cities only. 'roduct+wise price list enclosed in appendi* for reference. LG follows pricing policy in which their normal formula is import cost F reasonable gross profit to cover their marketing e*penses and also give them reasonable profit. 3.1.3 /ROMOTION STRATEG; Dawlance promotion budget is around 7.G>2 of their turnover. ?12 spending of their budget is 'rint ,edia, 312 goes on TH, 312 on ;ut door activity and balance 312 on /ales 'romotion activity. They believe that print media and out door activity help them to reach to their target customer. Due to satellite transmission and having multi+channels, it does not pay one unless you have very huge budget to spend on this media. ;n promotion, their spending is more on consumer incentive schemes. /ince it pay them and there is direct relationship between sales and consumer. )urther, it gives customer a direct benefit in shape of price reduction.

%s far as %dvertising strategy of LG is concerned, it is being planned and e*ecuted by LG, @orea through their 'akistan ;ffice keeping in view their global approach and theme line. Local %gent of LG simply gives advice and coordinate in its implementation. /ince LG is a multi+national brand, their spending on advertising is in such a way that their all product get promoted. %lthough for different product they have got different agentE like for TH, Iew JlectronicsC@arachi. )or computer monitor, Hision 9omputer. )or mobile phone, 9himera. It was not possible to get the e*act advertising budget of LG, but it appears from their spending and the figures collected from 'akistan %dvertising %ssociation and from some other sources that their spending is around =CG per cent of their sales in 'akistan territory. Due to being a multi+ national company and as a part of their global /trategy they, most of the time, divert their funds from strong market and spend more on weak or under developed markets. )urther, as far as /ales 'romotion strategy is concerned, it is being designed and implemented by their respective agent of each product in 'akistan. )or the promotion of $ome %ppliances products. $anaska International designs their own strategy. Their ma<or approach and emphasis on promotion through trade. They offer very handsome incentives to their dealers, who in return push their product among the customer and thus they get their desired volumes in 'akistan. It has been noted that due to being import base product they are always high price vis+a+vis other brands in the market and it is one of the reason why they give so much emphasis on the motivation of dealers. 3.1.5 4ISTRIBUTION STRATEG; Dawlance has got around 011 dealers all over the country. Dawlance ensures that its refrigerators are available almost in all appliances markets of 'akistan. They have got 012 penetration in dealer sector. ;ne can get very easily their product in any city or small town of 'akistan. Dawlance has got various types of dealers according to their potential. %round 3>2 of dealers are 5%+class5 dealers who sell over 7111 units and above per year. 5(+class5 dealers are those dealers who sell from ?11 units up to 888 units per year. They are around >12 in total dealer and the rest are in best 3>2 of 59+class5 dealers sell from 311 up to 488 units per year. In order to provide &uick and timely delivery to their dealers. they have got big warehouses located in almost all big cities and towns. #henever they get order from the dealer they try to provide supplies to their dealer from closest warehouse. In case stock is not available in the warehouse then it is delivered directly from $yderabad )actory. The ma*imum delivery time incase stock is delivered from $yderabad )actory is four B?D days. $owever if supply is given from closest warehouse then hardly it takes 3+4 hours time. They believe that, timely delivery of their product to the dealer, is one of an important element in their success in 'akistan. %s it has already been stated in earlier that LG refrigerators are imported. ,ostly they import from @orea and some of the models are imported from 9hina as well. LG relatively donAt maintain loose stock at their end. /imply based on historical forecast and feedback of their dealer about the possible demand, they import from their principal. They ask their dealer to maintain sufficient stock at+least ?+= week at their end. ather they believe in replenishment of dealer stock based on their sales. It means dealers stock always remain in within a limit, doesnAt e*ceed beyond = week level. %s mentioned above, they have only 411 dealers mostly in big cities and some in small towns. They also have got a policy that retail price all over the country should be uniformed for the customers, whether heCshe buy from @arachi, Islamabad, or 'eshawar.

They also bear transportation cost and thus provide supplies at uniform rate to their dealers. They have got three big warehouses in @arachi, Lahore and in Islamabad. )rom these warehouses they feed their product to their dealers and thus they make their product available to them. 3.1.6 /RO4UCT LI<E C;CLE Dawlance is an I/; 8111 certified company and among its mission statement. It is one of their missions to provide &uality product to their customers. Therefore, they ensure that every product, which is delivered from their factory, must go through rigorous &uality check. /o that only perfect product, free from any defect is delivered to their customers. /ince LG is an international name in home appliances, therefore LG ensures that their product must meet their rigorous &uality standard. /o, when it is delivered to the customer, it must meet customerAs e*pectations. 3.1.8 A<TER SALES SER=ICES Dawlance believes that after sales service is one of the most important elements of marketing mi* and thus give due emphasi-e in providing &uality after sale service to its refrigerator customers. Dawlance has got &ualified foreign+trained engineers in its team of after sale service and also properly trained technicians and supervisors who look after service centers and provide reliable &uality after sales service to its customers. Dawlance has got 7G its own service centers in different parts of country. (esides, they have got 4? franchise workshops to cover remote areas, where its service center doesnAt e*ist. These are service centers and franchise workshops cover almost 882 market of 'akistan. #herever Dawlance dealer is, there youAll find Dawlance workshop or either franchise workshop to take care of service need. In order to provide satisfactory after+sales service, Dawlance ensures that in all of its service centers sufficient inventory of spare parts is maintained, even these are available with franchise workshops. Dawlance has got the policy first of all to carryout repair, if re&uired at customer place. Incase if refrigerator problem is not diagnosed at customer premises then it is taken to its workshop. #henever they get any complain, they prepare <ob sheets and puts its record in computer and whenever at later date if complain is repeated, in that case they also have a history with them of such product in their data bank. Jven after five years if you want to find out from Dawlance service center that how many times there refrigerators have been referred on account of technical problem to their center, they can dig out from their computer record. In nutshell, we can say that DallianceAs after sales service workshops are very well properly organi-ed and they work according to international service standard. %s far as service charges are concerned Dawlance consider that it is not a profit center rather itAs a support center for sales. %s it has been mentioned earlier that LG has got market of refrigerators only in big cities and some of its big towns in 'akistan. Therefore, they have got relatively lesser number of service centers as compared to Dawlance. %t present LG has got only eight after sales service centers in 'akistan. )rom these service centers LG provides after sales service to each customers. They also maintain spare parts of serviceable items. /ince their product is 7112 imported, the souring of spare parts is only import based. elatively LG refrigeratorAs parts are e*pensive comparative to locally made because LG imports spare parts from @orea and various other LG production centers. ;ne of the reasons for being

these parts e*pensive is that LGAs local agent has to pay almost G12 of the product cost towards import duty, sales ta* and other import cost. #e can say that LG also believe in &uality, after sale service to its customers and also considers after sales service as one of the important element of marketing mi*. CONCLUSION )rom the above information, it has been analy-ed that there is no comparison between Dawlance and LG. There are several reasons behind it. )or e*ample. Dawlance is a big local manufacturer of refrigeration industry in 'akistan. It has got all engineering capabilities and very good finance and of course technical know+how to produce internationally accepted &uality refrigerators locally. ;n the other hand L.G is a multinational company and has got different agents in some of the big cities of 'akistan. It is simply an importer and imports refrigerator from @orea and markets the same in 'akistan. /ince Dawlance has very strong industrial base as well as deep+rooted marketing network in 'akistan, they donAt feel any threat from any of their competitors, either local or from importers. In the contrary L.G refrigerator is an import+based activity. Jvery year due to weakness of 'ak upee, 6/ K cost of import is going up and thus LG refrigerator is becoming costlier day by day. Therefore, they have a big challenge before them to maintain their market share and also to maintain their reasonable growth against local manufacturers. %ll Dawlance products are made for middle, upper+middle and upper class. #hile LG products are made for upper+middle and upper class. 'resent market share of Dawlance refrigerators is =>2 while L.GAs present market share for refrigerators is ?2. In the light of above evidences, it could be said that Dawlance is a leading company as compared to LG, due to its dominance in the market, lower prices, and availability of spare parts and after sale service, etc. $ence people prefer to buy their products. Dawlance is dominant in the 'akistan market because not of its marketing strategies but least competition by L.G. L.G being a foreign company suffers because of government policies by paying heavy import ta*es. It means, it is not only the marketing strategies of any company which plays a dominant role but it the success of product lies in the marketing strategies as well as the policies of the Government i.e favorable or unfavorable. %s far as the case of L.G is concerned, it is suggested that instead of depending on import it should install its plant in 'akistan so that it may lessen its burden on ta*es.