LG Refrigerator:

Successfully marketing the LG Side-by-Side Refrigerator with 15″ LCD TV with remote control to the Australian market


LG electronics is a global leader in making long term serving home appliances. LG is a huge conglomerate corporation which was founded in 1947 in South Korea. It was originally called ‘Lucky Goldstar’.The LG refrigerator is actually made by the LG electronics division of the LG group as are of all the major appliances. LG electronics was considered as a discounted alternative to some of the major brands like Whirlpool. In 1995 when the company changed its brand name from Lucky Goldstar to LG, they not only rewrote the face of the brand, but the level of the quality it represents. It’s dedicated in enhancing customer lifestyle through its stylish and advanced products. It has innovative digital appliances e.g. refrigerators with built in internet and TV illustrates LG’s commitment to digital convergence.

Market positioning strategies.

LG’s new strategy aims to focus on the premium segment of the market that fetches more margins as opposed to volumes. The company claims that this will benefit the consumers, channel partners and its stakeholders as it focuses on products that drive rapid growth and lead in their brand category to create value for customers. LG have also gone an extra mile in researching about the much needed products from LG electronics and realized that the demand for consumer luxury goods in the Middle East is on the rise as a result of high per capital income and quality savvy consumers with increased purchasing power. In Australia, LG enjoys high brand recognition and its goal is to become the world’s number one brand in the home appliances sector. They also need to fine tune there marketing strategy and focus on premium products.

To succeed in its marketing premium efforts, LG has always been concentrating on staying ahead of the technology curve and developing products that deliver high value to the consumer. The side- by –side refrigerator15” LCD TV with remote control is one of their ever changing technology.  It has a web pad that is detachably mounted on the outer surface of the refrigerator and television antenna module that is provided to receive a television signal and wirelessly transmit the received signal to the web pad, thereby removing a need for wiring to provide a wired connection of the refrigerator with the television antenna terminal. They have introduced a new strategy of rewarding its distributors and build on its channel success. LG company has introduces a new CRM program called the ‘Diamond Club’ aiming to drive the sale of their premium products. Maintaining and sustaining one market price in all stores, always making sure that the price gap with the competitors is maintained and achieved to retain a premium image, unique promotions for target customers and well-trained customer care executives.

They have also invested in marketing and training resources to educate thee channel on the benefits of delivering cutting-edge mobility, digital convergence and appliance to customers in the market.

Social consumer behavior.

The transformation technology has enables people to form communities and relationships in many new ways. More than two billion people now use cell phones. LG electronics have given the consumers another way of locking them in their products. They have manufactured mobile phones and they do nowadays merge a phone and a refrigerator in order to entice and have more customers. On the other hand, having a side- by –side refrigerator 15” LCD TV with remote control makes the social life of people very easy and convenient. You just cook in the kitchen as well as watching your favorite television channel. They have gone an extra mile in conducting interviews and giving out questionnaires to their customers. The reason for this is for them to know what their customers preferences, needs and views, then they go ahead and manufacture.

Cultural consumer behavior.

Most of the consumers like to follow the changing trend of technology.  When a product is new in the market, most of the consumers tend to go for it. It becomes a culture for the consumers to go for the product. Everyone wants to have what the others don’t have so this helps the LG electronics to go for more advanced products that will satisfy the consumers.

Psychological consumer behavior.

The psychological variables like emotions associated with the brand image constitute the personality of a brand. Information inflow on brands and outflow through inter-personal communication may act as a device to coordinate consumer expectations of the purchasing decisions of other consumers in markets with consumption externalities. The belief that individual difference in brand preference or choice behavior are caused by personality differences has not always been supported by empirical research.  Consumers are seeking novelty and unexpectedness in a brand that they have not bought before; their purchase will be selective. The perceptions on brand name in reference to brand risk and brand differences have been the prime factors in making buying decision for new brands among the consumers. Consumers also ascertain the brand name associated with the unfamiliar brands as they feel high risk averse and entangle in decision making with perceived brand differences. The brand name LG is well known outside there so customers do have some believe that anything that comes from LG is a genuine product. The side-by-side refrigerator with 15” LCD TV has been absorbed by many consumers. It’s just a feeling that one should also own a refrigerator with 15” LCD TV. On the hand, it’s being received as a stylish product that’s flooded the market hence so many people go for it.

Product strategies.

LG have invested mostly in innovations. Value innovation is created in the region where a company’s action favorably affects both its cost structure and its value prepositions to buyers. Cost savings are made by eliminating and reducing the factors that the industry competes on. Buying value is lifted by raising and creating elements that LG has never offered. Over time, costs are reduced further as scale economics kick in due to the high sales volume that superior values generates (W.Chan Kim, pp. 16).

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To break the trade-off between differentiation and low cost and to create a new value curve, there are four questions that guide LG electronics in order to achieve their strategic models.

Which of the factors that the industry takes for granted should be eliminated?
Which factors should be reduced well below the company standard?
Which factors should be raised well above company standard?
Which factors should be created that the company has never offered?
The first question forces the LG electronics to eliminate all those products that they have long competed on. These values don’t even have value hence being taken for granted. Sometimes theirs fundamental change in what the buyers value, but company’s like LG that are focused on benchmarking one another do not perceive the change.

The second one forces LG electronics to determine whether the products have been overdesigned in the race to match and beat the competition. The company overserve customers, increasing their cost structure for no gain.

The third pushes LG to uncover and eliminate the compromises the company forces the customers to make. The fourth one helps the company to discover new sources of value to their consumers and to create new demand and shift the strategic pricing of the LG electronics e.g. the introduction of side-by -side refrigerator with 15” LCD TV, whereby the consumers don’t really look at the cost of the product but its value.


The LG refrigerator with LCD TV is a sight to behold. Whether you are looking for snacks or evening news, you’ll find everything that you need in one convenient place.

Research has shown that most of the Australian families do spent most of their time in the kitchen. Even after they finish cooking, it’s become a norm to eat in the kitchen other than that dining room. This made the LG Company to come up with a side-by- side refrigerator with 15 LCD TV. LG didn’t overlook at the refrigerator either, it has a combining innovative structure that squeezes the most out of every square inch of space, and convenience features like water and ice dispenser on the front of the unit, integrated water filter, and electronic temperature controls, hence convincing people to go for it. This is a great addition to our homes, very convenient and allows more families to spent time in the kitchen. One of the consumers did post a review saying that buying a side-by-side refrigerator with 15” LCD TV is a investment that he doesn’t regret at all.


The Mc Kinsey Global Survey of Business Executives, July 2005.

W. Chan Kim, Renée Mauborgne, How to Create Uncontested Market Space and Make the Competition Irrelevant. Blue Ocean Strategy, 16, 29-30.

www.geocities.com/prof_rajagopal/homepage.html; – Influence of Advertising Variability, Brand Extension Effects, Brand Name, Variety Seeking Behavior and Customer Value on Buying Decisions: A Multi-experiment Analysis.

Young H.R, Jung H. K, Jin C. C, Jae W. C, Sang H. K, Sang M. K, Pan S.K – Television-watchable refrigerator system and method for operating the same, (Issue date Aug 28, 2007)



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