LG Smart TV in the Australian Market - Case Study Example

LG Smart TV Name: Institution: 29th August, 2013. LG Smart TV 1. Introduction The product that I chose to research and give a report on in the Australian Market is one of the most outgoing technologies by name LG Smart TV. A smart TV device, as described in the Australian Market, is either a TV set with included internet capabilities or a set-top box for television that provides more developed computing capacity and connectivity than a modern-day basic television set. This particular report illustrates the current market of LG smart TV’s that gives consumers the opportunity to search, share, browser, update, chat, download, amongst others, in the face of focus on experience design over the next several years with close consideration to the target market, the marketing mix, competitive advantages, and the successes of LG Electronics company. Figure 1. Source: http://www.lg.com/au/tvs/lg-60LA8600 According to an article by Pendlebury (2011), LG unveiled its smart TV models in 2011. However much it has been a trend for smart TV models to be unveiled at CES 2011, LG brought forth a difference and instead of coming up with the troubled Google TV model, it featured a platform that was developed in house (Pendlebury, 2011). Figure 2. Source: http://www.cnet.com.au/lg-unveils-smart-tv-models-339308335.htm This report therefore seeks to cover the details on the target market of LG Smart TV and similarly the market mix. Under the market mix, a close consideration would be given to the 4Ps that are fundamental to the market of Australia, the competitive advantages of LG smart TV and the success of LG Corporation respectively. In the Australian market, products of LG are directly handled by LG Electronics Australia. http://www.cnet.com.au/lg-unveils-smart-tv-models-339308335.htm 2. The target market in Australia In the technology or television industry, LG Electronics has had a good reputation in regard to producing household components such as refrigerators, televisions, mobile phones, amongst other electronic components. In this regard, LG Electronics has had a good history doing business in the Australian market. However, smart TVs are upcoming trends that were not in existence before in Australia but the current trend of different companies such as Samsung, Sony and many other companies associated with electronic components unveiling their smart TVs is closely tied to the changing trend in regard to (Barlett, 2012) the changing psychological behaviour of consumers, the feasibility of probable applications for smart TV in the consumer electronics market, and the integration of smart TV platforms with Integrated Circuit (IC) solutions. The smart TV industry indicates a multipurpose trend in providing services and can be categorised in various levels depending on use or application, technology, and geographical analysis. LG smart TV can be used a lot by all generations or age groups but because of its inclination towards utilizing advanced technologies, the current generation (Generation Y) that are technology oriented can make better use of it to satisfy their various needs. This is particularly because they have a tendency to do a lot of social networking and leisure or entertainments after and during work hours. It may be difficult for the baby boomers to use such technologies, not unless serious training or orientation is done to them. a) The market segment profile i) Demographic characteristics: Gender group: I did a detailed research in various stores in Australia, particularly Harvey Norman store and discovered that those who bought LG Smart TVs were of both sexes. However, there were a slightly larger number of males purchasing the TV than females. This could be attributed to the higher affinity of males to playing television games, a provision that this TV set has, as compared to their female counterparts. In addition, it is important to note that both females and males have equal attraction to social networking features on LG Smart TV. Age group: Since LG smart TVs are television sets that can be particularly used in home settings, office settings, and educational purposes, individuals fit to be parents, teachers or business persons would find it more convenient to buy. Therefore, I registered Australians between the age of 25 and 50 purchasing these TVs. However, there were more personalities between the age of 25 and 40 buying it either for their own use in regard to home entertainment or office entertainment. ii) Geographic characteristics This report is specifically illustrating an analysis of the Australian market and this gives a sense of the Australian region. Australia is a key market for LG Electronics Australia and up to about 40 % of their total TV sales is owed to this market (Budmar, 2013). There are other key markets such as Korea, Poland and Japan which account for the remaining percentage (marketsandmarkets.com, 2012). Its popularity in Australia could be attributed to the middle income earning capability of Australians, thus they are able to purchase the electronic and similarly the establishment of LG Electronics Australia in Australia which makes LG products readily available. iii) Psychographic characteristics A larger percentage of those categorised under the tag of generation Y in the world are TV fanatics, and Australia is no exception. In fact, approximately 80% of the population in Australia have television sets, most of which are LG products. The table below indicates that each year Australian video viewers access 151 clips of video every year and this qualifies them completely as serious viewers and similar characteristics are applicable in assessing the level of viewing that can be experienced in an LG Smart TV. (Figure 3.) http://www.marketingmag.com.au/tags/smart-tv/#.Uh854n_TpmY Since most Australian youths have adopted the propensity of playing games, watching movies and more so social networking via Facebook applications, YouTube and twitter, these applications are supported by the internet and LG smart TV is an exceptional technological advancement that can help attain this need. Since LG Smart TV is easy to use and it couples the best applications in TV technology and internet connectivity, it helps the generation Y group of the Australian market to bring home the next generation of entertainment while satisfying their urge to be entertained or being fanatics of movies and games. In addition, LG is a well established brand in Australia and many people have made it a lifestyle to buy their products. As such entertainment and social networking has become a lifestyle of Aussie. iv) Behavioural characteristics Benefit expectations: LG Smart TV is a TV set that combines the best of TV technology experience and connectivity to the internet while at the same time being easy to use (cnbc.com, 2011). This indicates that it is a TV that is highly advanced in regard to home entertainment and internet technology yet exceptionally simple to use or control. With it comes a range of features that include TV apps and quality content that gives it an opportunity to be the most intuitive, easy to use and accessible in the TV industry, and specifically in Australian market (cnbc.com, 2011). Model usage: LG Smart TV comes in very many models with different television apps and features for satisfying the various needs of the Australian market. Examples of LG Smart TV models include the PZ950 and PZ750 plasmas and LCD models such as the LW9700, LK530, LW7700, LW5600, LW9500, LV3700, LW6500, and LV5500 amongst others. They have various features and a model the models can be used depending on the functions that they are expected to be out into or the level of experience a customer would like to have (Simpson, 2012). However, it is important to note that all the LG Smart TV sets can be used in any setting as they serve the same purpose, not unless a unique type such as 84LM9600 that uses the remote voice control shown below is required (current.com.au, 2012). (Figure 4) Source: http://www.current.com.au/2012/12/20/article/LGs-new-Magic-Remote-an-impressive-addition-to-an-impressive-TV/TUNSFTKRQS.html 3. The Marketing Mix i. Product The product that is chosen for this study in order to come up with a reliable market analysis report is LG Smart TV product of LG Electronics Australia. This is a product line that has many other items under it which include, but not limited to LCD models such as LV3700, LW9700, LK530, LW5600, LW7700, LW6500, LV5500, LW9500 and plasma screens such as PZ750 and PZ950 (cnet.com.au, 2011). The LG Smart TVs are sleek, have clean styling, and therefore integrate beautifully with whatever design is in a client’s home. Similarly, they have patented technologies and innovative features that allow them deliver unbeatable details of the images, colour and clear contrast which are essential for providing high quality pictures with unbounded details (lg.com, 2013). Further, LG Smart TVs are key features which include full HD, cinema screen, LED plus, IPS and magic remote. The menu of the LG Smart TV is less complicated if compared to ones displayed by Samsung Smart TVs thereby appealing to many (Griffith, 2013). On it is displayed a menu arranged in form of hubs across the Smart TV screen which can be opened to full screen at will. Premium displays apps include ABC iView, SBS on Demand, BigPond TV and movies, Skype and YouTube (Griffith, 2013). (Figure 5) Source: http://www.lg.com/au/tvs/lg-60PH6700 Similarly, it has enhanced killer features such as “Dual play”, which was developed in 2012. This feature lets any two people playing a game while wearing advanced and modified 3D glasses to see two different views of the same game watched on the same screen (Griffith, 2013). Finally, LG Smart TV combines features that allow for internet browsing, DLNA support and video streaming in addition to having navigable series and featured applications stores. What makes it more convenient for use is the incorporation of a “Magic Motion remote” which makes use of Wii-like movement and enables mousing while navigating web pages (Pendlebury, 2011). LG Electronics Australia also offers Smart TV Up-grader for customers that would want to have the LG Smart TV functionality but are not interested in buying a new TV, and this up-grader is compatible with any other flat screen that has a HDMI port (Pandelbury).The combinational features that are mentioned above help meet certain needs in the Australian market. LG Smart TV specifically satisfies their desire for wonderful entertainment experience and internet connectivity, both on the same screen. In regard to categories, LG Smart TV is grouped under shopping products. This is applicable because it can be found in a majority of stores in the Australian market, such as, bigbrownbox, NAPF electronics, webprice.com.3G, VIDEPRO.com.au, Harvey Norman, appliancesonline, and xpertdigital, amongst others but a researcher is supposed to undertake an extra research to get information about them in order to make a decision on which one to purchase. The various features and prices have to be compared in order to identify which one satisfies a desire completely. The attributes of LG Smart TV that are most important to customers in Australia is its capacity to combine the best applications in TV technology and internet connectivity. In addition to this, the use of the magic motion remote control and cheaper 3D glasses similar to those used in any 3D cinema across the Australian market is encouraging to consumers (cnbc, 2011; Griffith, 2013). In fact, the new magic remote control that some of their models use has a microphone attached to it that provides the users an opportunity to search the web by using their voices, the cursor and gestures, which is particularly appealing to them. The dual play and the simple nature of its menu cannot go without mention as some of the key factors that users of the product look at in the Australian market (Griffith, 2013). The core product of LG Smart TV is that it makes use of some of the best television applications technology together with internet connectivity with a simple menu to display the apps store (cnbc, 2011). In this sense therefore, a typical LG Smart TV is expected to have a normal cinema screen with displays apps such as ABC iView, SBS on Demand, BigPond TV and movies, Skype and YouTube (Griffith, 2013). In essence, the actual product has a 3D screen and makes use of 3D glasses and ‘dual player’ applications whenever games in 2D and 3D are played by any two players. The augmented product, particularly LG 84LM9600, has an additional magic motion remote control that enables users to navigate the web while using sounds, gestures and cursors, which makes it extremely unique. The diagram below illustrates the various features of an LG Smart TV that includes a cinema screen, the simple menu and the magic motion remote for control purposes. (Figure 6) Source: http://www.lg.com/au/tvs/lg-60LA8600 LG Smart TV is an effective brand because LG Electronics Australia is an established company in the Australian market that has been in operation for years. However much LG Smart TV is a current innovation, to be precise a product introduced in the Australian market in 2011, the earlier establishment of LG Electronics Australia is a boost to its brand. As such, it can easily be identified, clearly distinguished from other similar products from competing firms such as Samsung. Of important note however, is the additional easy to pronounce and remember logo ‘LG’ meaning Life’s Good as shown below is in itself an attraction to customers in Australia because each of them would want to feel the good life. Image of LG Logo and Pink Colour Source: https://www.facebook.com/lgsmart.tv.ua?fref=ts Image of LG Cinema Screen http://www.lg.com/au/tvs/lg-60LA8600 Source: http://www.lg.com/au/tvs/lg-84LM9600 The additional pink colour that LG Electronics uses on their Smart TVs together with the logo, ‘LG’, helps customers to easily identify LG products. The product Life Cycle (PLC) of LG Smart TVs is the inception or introduction stage because it is barely half a decade since the product was introduced in the Australian market. To be precise, the product was introduced in Australia in 2011 and this makes it a product that is yet to reach the maturity stage. In fact, LG Electronics sells its LG Smart TV products at a price that is cheaper than what Samsung Smart TVs go for in the Australian market (Griffith, 2013). For instance, Samsung Smart TV series 7 & 8 sell at a price range of $4199 for a55-inch, to $9999 for a 75 inch while LG Smart TVs, LA premium series sell at a price range between $979 for a 32 inch to $4099 for a 60 inch television (Griffith, 2013). This indicates that LG Electronics is still struggling to woe customers to their LG Smart TVs by taking advantage of prices to beat its competitors for a common customer base. Its distribution in the few stores that are mentioned above, such as Harvey Norman, Xpert Digital and bigbrownbox, amongst others, indicates that it has not been widely distributed to many stores because it has just been introduced in the Australian market (getprice.com.au, n.d). Source: http://www.getprice.com.au/buy-best-lg-smart-tv-australia.htm ii. Promotion Since LG Smart TV was introduced in the Australian market in 2011, there are a lot of promotional activities that are undertaken by LG Electronics Australia to ensure that their product gets a good customer base. LG Electronics has CNBC real-time app installed on all its LG Smart TVs in 9 markets across Asia Pacific and these include Malaysia, India, Australia, New Zealand, Indonesia, Singapore, Vietnam, Philippines and Thailand (cnbc.com, 2011). This is an impersonal promotion activity, which helps LG Electronics Australia to offer high quality business news content and extraordinary access to C-level guests across various platforms through their LG Smart TVs. This partnership with CNBS helps most consumers of LG Smart TV product to enjoy easy access to premium or quality business news content and similarly enrich their home entertainment experiences, by keeping up to date with the latest of news headlines and stories across the Asia Pacific region in a very easy and smart way (cnbs.com, 2011). This is important in helping LG Electronics promote its product for Australians who are interested in the premium news content that CNBS offers. http://www.cnbc.com/id/42870674 LG Electronics Australia makes use of both online and direct communication to sell and promotes its products. For instance, Get Price website is used to promote and sell LG’s best Smart TVs in Australia (getprice.com, n.d). Source http://www.getprice.com.au/buy-best-lg-smart-tv-australia.htm Similarly, LG Electronics Australia makes use of individual promotions to sell their Smart TVs. For instance, there was an online promotion in which any Australian user that purchased any participating LG TV (a new Cinema 3D Smart TV) during the promotional period that ran from 1st of November 2012 to 31st December of 2012 was able to receive up to $1000^ in cinema tickets in addition to a chance to win $100, 000 as in the image below. This promotion was to be drawn in February 8, 2013 (ttmag.com.au, 2012). Image of LG Christmas Promotion Banner http://www.lg.com/au/tv-home-entertainment/xmaspromo/index.jsp LG giving away $100,000 and cinema tickets in Xmas TV promo Source: http://www.ttmag.com.au/2012/10/30/lg-giving-away-100000-and-cinema-tickets-in-xmas-tv-promo/ Further, there are LG Smart TV sales promotion that are run by LG Electronics Australia that include offering customers who purchase a new LG Smart TV $100 worth of LG Apps credit. The promotion is limited to customers, who buy LG Smart TV models, such as, LM 9600 (60 and 55 inches), LM8600 (47 and 55 inches), PM6700 (60 and 50 inches), amongst others (Rich, 2012). Source: http://www.theelectricdiscounter.com.au/blog/lg-smart-tv-sales-promotion/ LG Electronics Australia makes use of Facebook to promote their products. For instance, the Facebook page with the name LG Smart TV posts various details or information related to smart TVs for marketing purposes. Since it is a page that many can like and invite friends in to view, it helps sell and familiarise customers in Australia with LG Smart TV products. Images below are obtained from LG Smart TV Facebook page and they are easily identifiable to potential buyers. LG Smart TV Menu Source: https://www.facebook.com/lgsmart.tv.ua?fref=ts Image of a promotion meant for LG Cloud Source: https://www.facebook.com/lgsmart.tv.ua?fref=ts In this given context of promotion, it identifiable that LG Electronics Australia offers low prices and discounts or coupons in form of tickets and credits in specific stores to promote their products. As such, place, price and product brands are used as advantages in beating competitors. Since the information concerning promotions and new products are available online, they are easily accessible to consumers in Australia. The above promotional banners such as the Christmas promotional event mentioned above was available at Harvey Norman and appliance centre store in Australia (Get Price, n.d). These promotional strategies are essential for establishing a customer base in the introduction stage of LG Smart TV in the Australian market because they are attractive and would eventually win the trust of consumers. iii. Place LG Electronics Australia mainly distributes its Smart TVs to local stores in Australia, such as Harvey Norman Store. This indicates that a distribution strategy of providing goods to retailers directly is employed. However, it has more than one distribution strategy since information regarding its appliances are online and customers can view details and purchase on line and have their deliveries done by the company or individual stores. For instance, online view of product details and purchase can be done via JB HI-FI website http://www.jbhifi.com.au/tv-lcd-led-plasma/lg/ this strategy has been chosen because the Australian targeted market need products that are highly accessible. By availing LG Smart TV products in local stores and online websites, customers can easily view, make comparisons in prices and features, and settle on a product to buy at their own convenience. This saves time and makes easy the work of those that may not have time to window shop, thus the company makes use of online marketing to reach a large customer base that visits the internet pages such as their Facebook page LG Smart TV. The main retailers of LG Smart TVs include JB Hi-Fi Store, Apple Retail Store, and Jaycar Electronics. However, for my case, the report was specific on detailing information from JB Hi-Fi store that is in Canberra. Since JB Hi-Fi also operates an online store, it is convenient as customers can access the store in the city of Australia, Canberra, or alternatively order the LG Smart TV products after making online comparisons. These are advantages in regard to time management. Image of LG 60LA 8600 obtained from JB Hi-Fi Online store after making a visit Source: http://www.jbhifi.com.au/tv-lcd-led-plasma/lg/60-inch-full-hd-smart-3d-led-200hz-tv-sku-398667/ iv. Price Since LG Smart TVs have different features and have to be acquired from different zones, their prices have to vary. An example of a price comparison for LG Smart TVs in LG 60PH6700 is as below. Product Model and Size Price at price pirate Price at webprice.com.au Price at bigbrownbox LG 60PH6700 60 152CM FULL HD SMART 3D PLASMA TV $1,299.00 $1,378.00 $ 1,549.00 Price at Warehouse Sales Price at appliancesonline Magic Motion Remote for 2012 LG Smart TVs $75.00 $77.00 Since LG Smart TV products are shopping products, their prices have to vary as indicated in various stores and therefore customers in Australia must do some proper comparisons to make a choice of which product to buy. Source http://www.getprice.com.au/buy-best-lg-smart-tv-australia.htm The main competitor of LG Electronics Australia is Samsung’s LG Smart TVs. However, LG Smart TVs are sold at lower prices if compared to the latter’s pricing and this plays a vital role in wooing customers (Griffith, 2013). Product Models Price at Samsung Electronics Price at LG Electronics Samsung Smart TV series 7 & 8 price range $4199 for 55 inch to $9999 for a 75 Inch Television LG smart TVs: LA premium series price range $979 for a 32 inch TV to $4099 for a 60 inch television Source: http://www.theaustralian.com.au/australian-it/personal-tech/game-on-as-samsung-tv-gets-smarts-over-lg-latest/story-e6frgazf-1226636274127 This variation indicates that LG Electronics Australia is taking advantage of prices and woes its customers by offering relatively lower prices for products that have features that are almost, if not completely, similar. A price strategy is a very convenient and market based structure of winning a competitor’s customers. The prices that LG Electronics offers for their Smart TVs is convenient for the other 3 PS since the introduction stage for this product should promote the product as it is lower, and available in particular stores. The products are similarly widely available in various stores. 4. Competitive Advantage The LG Smart TVs are probably some of the greatest technological innovations that have ever existed in the Australian market. It has brought entertainment to several generations worldwide, and is continuing to do so through this product. The product is readily available in many stores, is available and promoted through both online and direct promotional activities, giving it an advantage over other major competitors. In particular, the magic motion remote is unique to LG Smart TV product and gives it a generally positive edge over competitors. The Success of the Firm LG is a vendor that has worked fast to get into the Smart TV bandwagon and has so far released various connected models of the same in Australia. Despite venturing into the Smart TV markets faster than its other main competitors, LG is itself an established brand that most Australian’s can easily identify with. The additional marketing strategies that the company uses are generally highly rated in the market. The use of social networks to promote its products is in fact a big boost to its continued performance and proper response to customer needs via online customer care services helps it maintain a good public image. Bibliography Bartlett, T. (2013, July 11). Review: LG55LA8600 LCD TV. Retrieved http://www.gadgetguy.com.au/product/lg-55la8600-lcd-tv/ Marketsand markets.com. (2012, January). Global Smart TV Market (2011-2016) Critical Capability, Use Case Analysis & Forecast By Accessories, Platforms, Middleware, Application & Geography. Retrieved http://www.marketsandmarkets.com/Market-Reports/smart-tv-market-455.html Budmar, P. (2013). Could 2013 be the year of the Smart TV? Retrieved http://www.arnnet.com.au/article/452554/could_2013_year_smart_tv_/ Simpson, C. (2012, December 04). The best TVs of 2012, and the year in review. 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