LG who are currently seen as a value brand in Australia is set to chase the premium end of the consumer electronics market with the struggling Sony well and truly in their sights. Among their new premium offerings is new plasma and LCD TV’s, Blu ray players and wireless home theatre systems.
They are also set to launch several new phone models and new appliances.
Stan Bilinski a Senior Category Marketing Manager who is one of the new breed of marketing executives at LG Australia believes that the Sony brand is in trouble and that there are opportunities for LG to take market share away from them as they wallow under a mountain of losses.
“Sony is losing premium market share and LG is gaining premium market share. We are moving closer to the premium market as Sony is sliding away from it” said Bilinski who joined LG 4 months ago from the pharmaceutical industry.
“We are moving away from being just a value brand to being more of a premium brand and our marketing and products will reflect that this year” he said.
LG is also confident that they can increase their share of several consumer electronic categories including the Blu ray market, which is currently dominated by both Sony and Panasonic. He is also confident that that LG will not be hurt by new low cost Blu ray player from China that is set to enter the market later this year.
“The Blu ray market is growing at around 15 to 20 percent and this presents us with the opportunity to grow our share of this market” said Bilinski who yesterday introduced a new $449 YouTube Blu player along with a smart new wireless home theatre system. (See separate story to be posted later today).
In Australia, to help with brand awareness, LG will shortly impliment the “LG Studio” – a 44 foot shipping container set up to present their new premium product range. The idea is to put all the products in one place so that journalists and retail partners will be able to get an overview of the product range in one location. “We are moving the brand up market and over the next few months you will see extensive marketing for our premium products across consumer electronics, appliances and mobile phones.”
Globally LG consumer electronics is doing considerably better than Sony who on May 14th is tipped to announce losses in excess of $3B.
Late last night LG Electronics reported a loss of only $148.5 million for the first quarter from a net profit a year earlier. Excluding overseas subsidiaries, sales rose 2.1%. However analysts are tipping a 40% increase in TV sales and a profitable second quarter.
On a global basis, which includes the performance of overseas subsidiaries such as LG Australia, sales rose 15% and profits jumped $47M.
LG said sales will probably rise more than 10 percent in the second quarter from the previous three months as the company introduces new products and wins market share.
Bloomberg reported “I see a better picture for the second quarter as mobile phones are set to grab more share, TV sales are in good shape on lower prices and as home appliances enter a busy season,” Lee Jin Woo, a fund manager at KTB Asset Management Co., which oversees $7.4 billion in assets. “We’re seeing some signs of improvement in consumer sentiment, which makes me a little bit more positive on the demand-side boost.”
LG’s home-entertainment division posted a profit of 14.8 million dollars (AU), compared with a 13.9 million dollar loss a year earlier. Sales at the home-entertainment business, which was formed in December by combining the display and media product divisions, rose 19 percent to 4.3 trillion won, LG said. The won is the currency of LG’s native home of Korea.
Shipments of LG’s televisions will increase 40 percent this year, compared with the 20 percent growth for the global market, Nomura’s Kim said.
