Designing communication programs for LG shine in Vietnam

MINISTRY OF EDUCATION and TRAINING UNIVERSITEÙ LIBRE DE BRUXELLES HO CHI MINH CITY OPEN UNIVERSITY SOLVAY BUSINESS SCHOOL MBMM PROGRAM BUØI MINH TUAÁN Topic: DESIGNING COMMUNICATION PROGRAMS FOR LG SHINE IN VIETNAM Tutor: NGUYEÃN THÒ MAI TRANG FINAL PROJECT MASTER IN BUSINESS and MARKETING MANAGEMENT Ho Chi Minh City 2007 TABLE OF CONTENTS Executive summary No Content Page Executive summary Part I Introduction 1 Part II Situational analysis 2 2.1 Macro Marketing environment 2 2.1.1 Industry trend 2 2.1.2 Political environment 2 2.1.3 Economic 2 2.1.4 Socio cultural 3 2.2 Micro Marketing environment 3 2.2.1 Company analysis 3 2.2.2 Competitors analysis 4 2.2.2.1 NOKIA 4 2.2.2.2 Samsung 5 2.2.2.3 Motorola 5 2.2.2.4 SONY Erickson 5 2.2.3 Consumers’ analysis 6 2.3 SWOT analysis 6 2.4 Target market 7 2.4.1 Segmentation 7 2.4.2 Targeting 7 2.4.3 Positioning 9 2.5 Marketing objectives 9 Part III Designing a communication program for LG Shine 10 3.1 ATL 12 3.1.1 TVC 12 3.1.2 Print advertisement 13 3.1.3 OOH 14 3.2 BTL 15 3.2.1 PR/Event 15 3.2.2 In store communication 16 Part IV Recommendations & conclusions 18 LIST OF TABLES and FIGURES 1. Figure 1: Total market by brand share Page 4 2. Table 1: Market share by phone type 6 3. Figure 2: Total market by price band analysis by brand 7 4. Table 2: Shine communication structure 10 5. Figure 3: Overall implementation plan 11 6. Table 3: Estimated airing schedule 12 7. Table 4: Estimated printing schedule 13 8. Figure 4: Pre launch stage programs 15 9. Figure 5: Post launch stage programs 16 EXECUTIVE SUMMARY LG Electronics Vietnam is the electronics company that its main products are home appliances, digital display and media devices. Its sales performance of mobile phones is very poor. In the very competitive market of mobile phones, there are many top players like NOKIA, Samsung, and Motorola… LG seems to be a late comer with 2% of market share. In June 2007, LG launches new model called LG Shine, which is a full metal body slider phone, wide screen TFT LCD and rolling keys. LG select the high price model market for this model. This model is hoped to be a milestone for LG conquer Vietnam market. Besides other business strategies, this project focuses on designing a communication program for Shine in Vietnam market. The communication program includes two main parts called Above the line and Below the line activities. In the first part, LG aims to remind consumers remind its product concept is “Styled in Metal” with the main theme “Born to Shine”. Through media advertising, LG wants to establish quick and high awareness of the product and uplift the brand image. In the later part, it insists on the in – store communication through display, POSM and PR/Events as well. The key successful factor of this communication program is to implement all of activities synchronized and integrated. LG can maximize the effectiveness of this program to increase its sales performance and increase its brand awareness in mobile market. - 1 - Part I: INTRODUCTION With a 60-year history, LG Group has pioneered many business areas such as the energy industry, and is well – known for its commitment to corporate governance and transparency. At present, LG Corporation is a holding company for 31 companies including LG Electronics (LGE), LG Chemicals, and LG Telecom. In Vietnam, LGE established LGE Vietnam (LGEVN), which its main business domain is home appliances, digital display, digital media and mobile communication (MC) products, as its subsidiary. Being No.1 company in Vietnam by achieving sales amount $200M with annual growth rate is 50,4% through LGEVN Way, which is Creating value, Change Management, Clean and Clear, team work and global standard, is LGEVN’s vision and mission. In order to achieving the company mission and vision, LGEVN should maximize its sales performance of all kind of product category. However, its MC business is very weak and has no brand reputation due to lack of brand communication program. It is one of the reasons that LGEVN’s mobile sales amount is extremely low among its product categories. The objective of this project is to design a communication program for LG Shine, launched in Vietnam in June’07, to make an improvement in its mobile business in Vietnam. The following parts will present the market situation, marketing objectives, marketing program and implementation plan of designing a communication program for LG Shine in Vietnam. - 2 - Part II: SITUATIONAL ANALYSIS 2.1. Macro Marketing environment 2.1.1 Industry trend: There will be a fierce competition between GSM Operators for obtaining more subscribers (Calling fees …). As a result, operators, like Mobile Phone, Vinaphone, Viettel, will jump into handset business. This trend is a positive impact to a market demand due to consumers has many choices for owning their mobile phones. 2.1.2 Political environment The Vietnamese government tries its best to build a market – oriented economy in order to double 2000’s GDP by 2010 as targeted. Moreover, relations with the US are improving, following the full restoration of diplomatic relations in 1995, the normalization of trading relations in 2001 and the trade agreement in May 2006. In addition, the Vietnamese government recognizes the threat that corruption presents to its legitimacy, and has acted to clamp down on graft among party officials. Above all, it shows a good signal for reforming a market – oriented economy in Vietnam. 2.1.3 Economic: Vietnam began its program of economic renovation in 1986. While reform has been gradual, the country will continue to experience strong economic growth, driven in most part by the dynamic private sector. Entry to the WTO is expected to boost export levels. In addition, WTO memberships will give Vietnam access to both foreign markets and capital, while making Vietnamese enterprises stronger through increased competition. Next, in preparation for membership, the government has spurred forward Vietnam’s transition from a centrally planned economy to a market-orientated one. Moreover, Vietnam continues to keep the - 3 - high GDP growth rate and double the GDP per capita in 10 years’ time from USD 620 in 2006 to USD 1,450 in 2016. GDP grows steadily to guarantee high purchasing power. 2.1.4 Socio cultural: The total population of Vietnam is approximately 84 million. The average household size is 4.8. It is forecasted that the total population will reach 100 million in 2016. It is estimated that the working age population in Vietnam is 42, 1 million people, approximately 61% of the total. An estimated 10, 2 million live in urban areas, with the remaining 31, 9 million in rural areas. “Technically skilled workers” form an estimated force of 8,84 million, accounting for 20.99% of the total. The south east region has the highest rate of skilled workers (30.13%), followed by the Red River Delta (27.99%) and Coastal South Central (20.85%). The lowest rate was reported in the north-west region. Concerning education level, the adult male illiteracy rate was estimated at 4% in 2000 and 9% for females, with the youth illiteracy rate 3% for both genders. 2.2. Micro Marketing environment 2.2.1 Company analysis: The disadvantage of the company is low market share with around 2%. - 4 - Figure 1: Total market by brand share 18 22 21 20 20 20 21 22 20 19 20 19 18 17 19 52 50 51 50 50 50 51 50 51 52 52 52 52 53 52 1 1 19 18 19 19 20 21 20 20 20 19 18 18 18 19 18 2 2 2 2 2 2 2 2 2 1 1 1 1 2 1 4 3 4 4 4 4 4 4 5 6 7 7 7 4 7 3 3 2 3 2 2 2 2 2 2 2 2 2 3 2 0% 20% 40% 60% 80% 100% Feb 06 Mar 06 Apr 06 M ay 06 Jun 06 Jul 06 Aug 06 Sep 06 Oct 06 Nov 06 Dec 06 Jan 07 Feb 07 YTD 06 YTD 07 OTHERS BENQ- SIEM ENS SONY ERICSSON SIEMENS SA MSUNG PA NTECH PA NA S ONIC NOKIA MOTOROLA LG Source: GfK Asia – 2/2007 Therefore, the company has started to invest strongly in Mobile business from the end of 2006. The brand image and awareness of the company are still strange to customers. In addition, lacking of model line up lessens the competitive ability of company. However, Black Label series category is rather successful with Chocolate phone KG800 in Vietnam. It is very strange that most of consumers know Chocolate pet name of LG Mobile phone rather than LG Mobile brand. Furthermore, the company can utilize advantages from consumer electronics products because LG has experience and well reputation from consumer electronics products, especially air conditioner and TV. 2.2.2 Competitors analysis LG has many competitors in the market such as NOKIA, Samsung, Motorola, and Sony Erickson…The following is some analysis of their competitive advantages 2.2.2.1 NOKIA: - 5 - It is the market leader (52% of market share) with successful “Pull Strategy”. It has a strong brand communication: “Connecting people”. NOKIA is popular because it has a full line-up with various models from low tier to top tier and its policy starts focusing on the low tier to keep its market share. NOKIA N series and E series are very successful in Vietnam market as hi – tech and luxury brand. They have very clear image to consumers that they are for stylish and successful businessmen. 2.2.2.2 SAMSUNG It holds the market share of 19% and has big investment in ATL (Above the line) for Ultra collection. Its policy is focusing on Premium Tier with ultra series. However, it has difficulty in low tier models (<70 $). In 2007, it changes into C140 model… Samsung Ultra collection with the outstanding model D900i is the main competitor of LG Shine. 2.2.2.3 MOTOROLA The market share of Motorola is 19%. It has a simple slogan “Hello Moto” and applies Bi-polar Strategy. The company focuses on the low tier with cheap price. Motorola has Rocker E6, which is deeply impression to consumers through its design, function and competitive price. 2.2.2.4 SONY ERICKSON Its market share is 7%. The company has had a big investment in ATL since the fourth quarter of 2006. At present, it is developing low-end models: J100i. It focuses on music and entertainment phone. Shop-board installment has been deploying since the fourth quarter of 2006. Sony Erickson builds its brand image as the excellent in music functions with the pioneered model K790i [...]... the end of 2008 - 10 - Part III: DESIGNING A COMMUNICATION PROGRAM FOR LG SHINE LGEVN focuses on advertising, especially Brand Communication for booming sales in Vietnam In order to achieve Shine s marketing objective, it is important to ignite interest and curiosity of Shine core target at early stages of marketing To do this, all communication activities during the initial stages of the campaign should... Communication Concept Product Centric >>Born to Shine Emotional touch >>Shining Moment Shine Shine Main Theme Main Theme Born to Shine Born to Shine TV // Cinema TV Cinema Objective How to Key Idea Print // OOH Print OOH POP POP Online Online PR // Event PR Event Create Awareness & Curiosity Reminder & Create Preference Making Product Distinctive Specific Info Create WOM Create Awareness & WOM Product... Moreover, Shine is a perfect balance of design and technology Shine s unique look and feel introduces a new experience and creates new values for mobile phones 2.5 Marketing objectives In order to make a successful business in Vietnam in 2007, LG sets up two shortterm targets: - LG sales targeting for Shine is 12K sets from June’07 ~ March’08 - Achieving brand awareness of LG Shine from brand new to 40% in. .. new market entry In the scope of this project, I cannot mention everything that make LGEVN mobile business be more successful in Vietnam I just focus on designing program of the communication for launching Shine in Vietnam It comprises two main parts that are ATL and BTL activities - Concerning ATL activities, they include advertising and printing advertisement and outdoor advertising It should be... print advertisement for outdoor advertising in order to announce to public that Shine arrives 3.2 Below the line (BTL) 3.2.1 PR/Event In this part, LGEVN focuses on three stages with continuously activities In the pre – launch stage, LGEVN wants to create buzz and excitement behind the launch of second handset within LG BLS, pet – named LG Shine The detail of program is illustrated in this chart: Figure... main theme of communication is “Born to Shine which compact expression of Shine is an existence that makes you shine that simultaneously delivers Shine s products and emotional value The following chart shows the communication structure of this campaign: Table 2: Shine communication structure - 11 - Product Concept Product Concept Styled in Metal Styled in Metal Communication Concept Communication. .. use in press material and websites Next, in the launching stage, the objective is to maximize brand awareness of the launch of second handset within LG BLS, pet – named LG Shine LGEVN will organizes and executes a launch event in linkage with the campaign slogan, “Born to Shine , together with the product launch of LG Shine They will organize a creative “talk – of – the – town” launch party to invite... exposure Stimulating user participation Introduce shining moment The moment that you hold the Shine can turn the night into day Product centric under Shine concept Product centric with iconic symbol Product Centric under emotional & Tech based concept Connect Consumer’s shining moment with Celebrity’s The overall picture of launching Shine and its activities are shown in Figure 3 We divide in three stages,... - In order to make strong impression to target consumers with Shine product centric, LGEVN uses this Marquette for all newspapers and magazines With the black background, Shine will be outstanding appeared as the movie star 3.1.3 Out of home (OOH) This alternative medium communicates Shine at areas where TV and Print advertisement cannot be reached Why? Awareness of Outdoor Advertising is increasing... communicate LG Shine launch and "born to Shine" campaign messages - 17 - It is the main part of in- store brand exposure LGEVN will maximize their brand awareness in mobile shops through LG mobile corners display, shop window displays, POSM… Herein are some examples - Window display and shop display corner: - POSM [Key Visual (Poster)] [Press kit folder] [X-banner] [Sticker] [Wobbler] [Leaflet] [Shopping bag] . present, LG Corporation is a holding company for 31 companies including LG Electronics (LGE), LG Chemicals, and LG Telecom. In Vietnam, LGE established LGE Vietnam (LGEVN), which its main business. exposure Stimulating user participation Styled in Metal Styled in Metal Communication Concept Communication Concept Shine Shine Main Theme Main Theme Born to Shine Born to Shine Product centric under Shine . LG Shine from brand new to 40% in the end of 2008. - 10 - Part III: DESIGNING A COMMUNICATION PROGRAM FOR LG SHINE LGEVN focuses on advertising, especially Brand Communication for booming