Last year, LG was unrecognisable from the company that had once got itself into double share figures with strong brands such as the Cookie and the Chocolate.
The Korean manufacturer had lost its way, producing affordable feature phones for a new generation gagging for high-tech smartphones. Meanwhile, RIM overtook LG as the fourth largest handset maker in terms of revenue.
In Q4 the company reported its biggest loss in two years as it continued to lag behind its market rivals.
But LG has begun the fight back, predicting an improved performance in 2011 as it rolls out its Android-powered Optimus smartphone range.
In November, the manufacturer announced that its flagship Optimus One was the company’s first smartphone to sell more than one million units, around 40 days after its debut.
In the UK, the Korean manufacturer has also launched a three-pronged strategy to grab share from its rivals.
LG head of marketing Alex Windle, who took on his role in September last year, is the first to admit that the company fell behind in 2010. He says: ‘Last year, we focused on affordable feature phones and we were late to enter the smartphone market. We are now coming back with a strategy to rectify that.’
In Europe and globally, LG has been a ‘classic electronics business’ with a classic structure. ‘Now we want to focus on the consumer not just the technology,’ he says.
So the business will be broken up. Jim Michel, who was confirmed as head of mobile for the UK in May, is attacking with renewed focus a strategy to ‘get the consumer at the heart’.
Then there is LG’s chemical business – ‘we are investing in batteries and screens’, says Windle.
He adds: ‘Our Europe strategy is based on five lead markets and the UK is one of them. So this gives us more autonomy and makes decision making quicker. It means we are free and nimble.’
LG has been beefing up the marketing team under Windle’s watch. ‘There is an internal marketing team of 10 and we outsource. Jim (Michel) has the sales team and the supply chain,’ he says.
The manufacturer has also spoken to customers [operators and retailers] and has spent the last six months building up its channel marketing. ‘Now we are going out to our customers, first with [halo brand] the Optimus,’ he adds.
There will be three strategies this year, says Windle.
The first will be to showcase LG’s tech leadership and its relevance to the consumer. ‘For example, we will push dual-core phones such as the Optimus, which is all about speed – but making that relevant. We will also promote the Optimus Black as lighter and brighter without draining battery,’ Windle says.
This will also build on LG’s quality screens and its reputation as a flat screen TV manufacturer.
Windle explains: ‘Last year we concentrated on the youth market and now we are going to broaden that to the people who buy our TVs. It’s the next phase of smartphone users.’
‘The gaming world will be part of the tech leadership world,’ says Windle, adding: ‘On top of these you will see some strong content partnership for gaming and two other areas. There will be a triple-pronged content strategy.’
The second tier of LG’s turnaround will focus on making technology accessible to the mass market – like it did with the Cookie handset, Windle says. ‘Internally, we brand ourselves as “the human face of technology”.
‘Our strategy is to focus on the next stage. What we began with Optimus is how we make that accessible.’
Meanwhile, LG’s third strategy is to sustain their momentum in the mid-range feature phone market, such as its handsets with QWERTY keyboards and access to Facebook. ‘We have a good brand there,’ says Windle.
He adds: ‘We are investing more in the mid to high tier. Last year, we focused on volume share but this year it will be value share. 2011 will be a very interesting year – we have highly successful brands.’
Windle says the challenge next year will be how to differentiate LG in the market.
He says: ‘It is a different message for a different audience. Once you can get the consumer in front of a 3D TV you’ve sold it. We will look for a similar approach – getting customers to look, feel and play with the phones so marketing won’t all be above the line.’
He adds: ‘There will be more marketing activity. The marketing spend is going to be built upwards.’
Windle predicts there will also be a battle in the convergence space, an area in which LG has a big part to play. The manufacturer plans to share content across its TVs and mobile devices using DLNA streaming technology. Its Optimus 2x is already DLNA-enabled.
‘There is going to be a real battle around it. You’ve got Sky and BT and Google as well,’ says Windle.
This convergence could see manufacturers selling TVs with phones. Windle suggests electronics stores with concessions such as Phones 4u in Dixons and Best Buy as potential options.
He says: ‘Q1 and Q2 are going to be exciting, plus there will be more stuff by the end of this year – watch this space.’
• In 2011 LG will bring out a range of new technologies to its mobile phones, confirming
it as a serious contender in the mobile market.
• The Optimus range will continue to be a focus for 2011 with several new products introduced.
• LG will introduce the first dual-core smartphone – offering users twice the power and speed previously available on a phone.
• By leveraging the assets that LG has within its own corporation and using that technology, LG Mobile plans to stay at the forefront of its competition – using LG Display, which creates display technology or LG Chem which improves battery technology.
• LG’s UK marketing strategy will focus on showcasing LG’s ‘technology’ leadership, mass market adoption of smartphones, and maintaining momentum in mass market touch and QWERTY.
Optimus 2X: The world’s first dual-core smartphone has unparalleled speed and enriched multimedia contents due to its full HD capability. Key benefits for this include speedy web browsing, multitasking, 1080p recording and playback, HDMI mirroring and DLNA.
Optimus Black: The lightest smartphone on the market for its size (109g) and one of the slimmest smartphones available. The Optimus Black features a four-inch LCD screen which can be seen in direct sunlight, Wi-Fi Direct and lower battery consumption.
LG will continue to bring out smartphones operating on the Android OS in 2011 and said it is committed to providing a market-leading mobile Android offering with a full line-up of Android devices.