David Brand, the embattled marketing director of LG Australia was last night forced to defend the marketing actions of LG Australia, who was recently exposed by Choice Australia, for making false marketing claims about the power performance of their appliances.Brand who refuses to do interviews with appliance or consumer technology, channel media on this issue, or any other issue, despite repeated requests, was last night apologising to consumers on the ABC program PM, for his Companies “shocking” track record which has resulted in the Company being fined millions for false marketing claims.
Currently under investigation by the Australian Competition and Consumer Commission, LG Australia is facing further fines for misleading consumers after consumer watchdog Choice claimed that LG Electronics has duped consumers by using an illegal device within some fridges to make them appear more energy efficient.
They have also made claims over false labelling.
Choice, said that they had recently discovered a banned circumvention device within two LG fridges which overestimates the energy efficiency of the product. Choice reported the problem to the Australian Competition and Consumer Commission.
For several weeks ChannelNews has been chasing Brand, to explain how LG Australia only managed to make $13K profit on a turnover of close to $1 Billion dollars. We have also sought an explanation as to why in the 2008 to 2009 year when Brand was in control of the Korean Companies marketing did LG Australia revenues decline by $152 million from $1.12 billion in 2007 to $968 million in 2008.
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|David Brand LG’s embattled Marketing Director seen far left in happier days with the Cronulla Sharks.|
Documents obtained by ChannelNews also reveal that in the 2007/2008 financial year, LG Australia only had profits of $17,228 despite revenues of $1.12 Billion.
Brand who joined the Company in early 2008 was the former marketing director at spirit and wine distributor Maxxium Australia. In his role at LG he has direct responsibility for all marketing activities as well as direct responsibility for advertising agency management and media.
Prior to working at Maxxium, Brand was marketing director Burger King Asia Pacific and marketing director Tourism Tasmania. He had no prior technology or appliance industry marketing expertise prior to joining LG.
Last week the Stan Bilinski the Marketing Manager of LG’s consumer AV division quit the Company only days out from the launch of a major new range of 40 LG TV’s.
Shortly after joining LG, Brand spearheaded the Australian marketing launch of LG’s “Scarlet” LCD TV, complete with celebrities and footballers and a high profile TV campaign.
Despite the marketing hype the product was a disaster and was quickly pulled from the market after consumers shunned the red back TV.
Early in 2008, Brand was told by his corporate masters in Korea that he had to appoint WPP group agencies in Australia. This resulted in Mindshare taking responsibility for media planning and buying, George Patterson Y&R were appointed to handle above-the-line advertising duties, while Publicis Mojo’s digital arm Publicis Digital, were appointed to manage website and digital marketing.
The global realignment saw Singleton Ogilvy & Mather which had LG’s account for 10 years dumped.
In December Brand was forced to dump PR Company Burson Marsteller in favour of a new agency called LG One which was run by a consortium between Ogilvy PR Worldwide and Hill and Knowlton.
In May 2009 Brand terminated the sponsorship of the Cronulla Sharks at the time he refused to comment on the issue.
In 2008, Brand also refused to comment when LG was fined $3M dollars for making false marketing claims re the energy efficiency rating of five LG air conditioners.
In his appearance last night on PM Brand, who appears to have no problems fronting high profile mass media opportunities said that consumers were set to be compensated by LG for dodgy marketing claims that were made by LG under Brands supervision.
Consumer watchdog Choice blew the whistle on LG when routine testing found the fridges needed 20 per cent more power to run than their advertised levels.
Until the end of last year, LG was selling two fridge models in Australia which did not do what the electronics company said they would do.
The fridges also slipped into energy-saving mode when they were not meant to.
Choice spokeswoman Elise Davidson told the ABC, that shoppers buy expensive items such as white goods for all sorts of reasons.
“Choice did quite a wide study on consumers’ buying priorities a couple of years ago and found that good performance is of course at the top,” she said.
“Number two is price and then not too far after those are low energy use and low water using if they apply, especially in relation to these sorts of white good products.
“They’re products that you have for a really long time. You hope they’re going to last for about 10 years. So the cost of actually running them and the environmental costs as well is quite significant it’s about 75 to 80 per cent of the product’s total impact on the environment” she said.
A Burson Marsteller executive told ChannelNews “we have tried on many occasions to get brand to talk to the media about LG products, strategy and marketing activities. He won’t. We don’t know what his problem is”.