Stephen Gater, LG’s consumer marketing director, describes himself as a straight talking Northerner and he is characteristically honest about the challenges facing the company. He says LG needs to work hard in 2012 to rebuild its confidence and credibility among operators, retailers and consumers, and views the task ahead as a ‘rebirth’.
But Gater is also confident this process will be successful. He says: ‘The plan is clear. There’s a big market of people in the United Kingdom who will move from a feature phone to a smartphone during the next 12 months. Within that there are different segments. Some will decide to start paying £40 per month but a lot of people will not have the means to do that, particularly young people. They seek the functionality of a smartphone but don’t want to pay £40 per month for the privilege. So they will seek alternatives that gives them functionality and design but at a price that is affordable.’
First on the launch pad is LG’s new L-Style range, backed by a £4m ad campaign across print, digital and sponsorship that will use LG’s ‘Life’s Good’ strapline. ‘They are a range of what we believe to be stylishly designed phones. The look and feel is fantastic and they are ergonomically designed.’
Next will be a £1m-backed campaign for the 4X HD, which Gater says will use LG’s Formula One partnership to target early adopters. ‘If you look at Formula One, it stands for cutting edge technology, high speeds, glamour and performance, and that’s exactly the kind of message that we want to get across with our phones.’ It is unclear how LG’s rumoured rival to Samsung’s Galaxy S III, the D1L, will fit into the 2012 portfolio, if at all.
Branded phones, like its recent Prada partnership, also have merit but Gater says it is unfair to measure their success in pure sales. He says: ‘We never expected it to sell millions. In the Far East, Prada is an aspirational brand and it did much better. We hadn’t done anything with the brand during the past two to three years so it was an opportunity to legitimise our phones as stylishly designed. I do think branded phones can work and it has great potential.’
Just over 12 months ago LG was equally optimistic about the year ahead, with a number of high profile launches mooted. Then the business lost two heads of mobile in just six months, with Jim Michel and more recently Warren Lewis exiting the business. LG may have a strong portfolio of devices, but it also has to contend with dominant players like Apple and Samsung, as well as the resurgent Sony and HTC.
Gater is frank about where the business went wrong – ‘we didn’t see the smartphone revolution happening’ – and at one point during the interview he turns to a notepad, where he has written down the six suggestions Mobile made for LG after Lewis’ departure in February (see Mobile, 24 February). He says the forthcoming L-Style ad campaign will help rebuild its brand. ‘Do we need more autonomy? Yes, I’d agree with that, but we are creating our own ad campaign and investing significantly more than we have in the past. We’ve shown it is possible to do that and it’s something we should be doing.’
Criticisms that the business sits too firmly in the middle ground are misguided, says Gater: ‘LG is known for good quality mid-range products. We didn’t have the right product roadmap in place, but now we do and that is something that comforts me.’
He adds: ‘Over time we need to move the product mix in a more premium direction. But you can’t go from selling feature phones to high-end devices overnight. We need to build commercial direction and scale.’
One other suggestion was that LG should take cues from its Korean rival Samsung on how to build a successful mobile phone company. Gater says: ‘They have a lot more money to play with and I’m not sure how that works. They have high levels of marketing investment and we can learn from that. They certainly seem to invest, which has a brand-building effect and that is very important.’
One encouraging sign for LG, says Gater, is that the recent exits have not impacted its attempts to rebuild the team. He says the business is on the lookout for another three staff to work in the mobile team.
‘People want to join our business and that includes people within mobile. What people say is we have seen LG go through a tough time but we think you are up for the challenge. People generally want to come and work for us. Yes, we have gone through a period of fairly high turnover but people still want to join us. There is still something very positive about the brand. We have to put Jim Michel behind us and accept Warren Lewis left for personal reasons, which was unfortunate but that’s the way it is. We are rebuilding our confidence.’