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Case Analysis - The LG WatchPhone

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by

Andrew Yanofsky

on 16 February 2011

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Transcript of Case Analysis - The LG WatchPhone

Case Analysis- The LG Watch Phone

Adam Caplan
David Di Guglielmo
Lyla Foxen-Craft
Nyv Segev
Andrew Yanofsky
Anamaria Zamit
Agenda

LG Company Background
Marketing Problem
Decision Factors
SWOT Analysis
Quantitative Analysis
Recommendation
"How can Carson tailor a coherent and memorable marketing plan for the LG Watch Phone?" 2008 Global brand identity: "Stylish design and smart technology in products that fit out consumer's lives" Stylish
Metal Casing
Touch Screen
Text to speech
Waterproof protection
Alarm calendar
3G capabilities
Voice recognition
Bluetooth
Speakerphone $1290 w/ a 1 or 2 year contract- why so costly?

Flexibility due to traction in the market

Strenghts
Brand image
Big market share
Top quality material
High profits allows for large advertising budget Weaknesses
LG has never sold a watch; watch lovers might wonder if they are familiar with the industry style and wants
High price
Numerous functionality concerns
Consumers need to be enticed away from their existing cell phone contracts
Watch wearers often like variety
Opportunities
First product of it's kind/ first mover advantage
46.8% of consumer electronics expenditures in 2008 were alloted to the portable sector
Consumers are constantly searching for the newest, most innovative gadget available


Threats
Faces stiff competition from 2 different markets
Canadian mobile phone competitors all offer products with similar functionality, must separate the product from this view and focus on its uniqueness. SWOT Analysis Marketing Mix/Decision Factors Product Price Promotion Place Target Market Pull strategy
Television spots
Celebrity endorsements
Billboards Controllable Factors Uncontrollable Factors Market Size Market Structure Competitors 2008:
Asia sold 1.13 billion units
Europe sold 700 million units
North America sold 515 million units
Of which mobile phones represents 18.5% volume share (95,275,000 units) Top Consumer Electronics Brands
LG commands 5% of the market structure, tied for 4th largest among competitors.

Competitors
Market Size: competing to gain customers from both the Cellular Phone market as well as the Watch market
Blackberry, Motorola, Nokia, Samsung
Technologically-affluent, high income, male consumers

How can we broaden our market and attract female consumers as well?
S W T O Quantitative Analysis Future market size: Consumer Electronics 2008:
Sales: 2.7 Billion Units
Of which, 515 Million sold in North America = 19% of the industry
Sales: $739 Billion
Of which, North American sales (19% of industry) =$140.41 Billion
Mobile Phones represented 18.5% of all North American consumer electronics =$25.97 Billion

Forecasting for 2009:
Average Industry Growth Rate =11.3%
Increasing projected '09 sales to $822.5 Billion
Of which, North American sales (19% of industry) =$156.28 Billion
Mobile Phones represent 18.5% of all North American consumer electronics =$28.9 Billion Our Recommendation Alternative 1:
Market Watch Phone as is, towards high-income, tech-savvy, male consumers (More Conservative - Niche Market)
Price: lower to compete with other cell phone producers
Advertise cautiously, as launching mass advertising campaigns towards a small demographic would be an unnecessary use of funds.

NOT A VIABLE OPTION

Alternative 2: THE PLAN
We must broaden our consumer horizon, escape the niche mentality, and make our product a must-have fashion statement for all. How?
Establish partnerships with the likes of high-end leaders from a variety of industries.
Restyle watch to attract a greater market segment (Gucci, Louis Vuitton, Ferrari, Porsche, etc... wrist bands).
Price: leave price high - cost justified.
Advetisement: With great new innovative product, we now have reason to launch mass advertisement campaign.

This will help LG in their attempt to establish their new global brand identity: "Stylish design and smart technology in products that fit our consumer's lives."
vs. "How can we pitch an effective campaign to LG for their new Watch Phone?"
Full transcript