Series branding to drive LG's handset sales

After Chocolate, LG India is now pushing the Dynamite. Soon, it will sell the Pulse in the market. In an effort to cut the market clutter in mobile phones and beat the trend of serial numbers, consumer electronics market leader LG Electronics is sub-branding mobile phones according to their price segments. Company executives point out that this marketing strategy is helping them drive sales and gain recognition in a crowded marketplace.

After the "Chocolate" series which was priced in at around Rs 15,000, LG has launched "Dynamite" series with two handsets - KG 200 and KG 300 - priced between Rs 7,999 and Rs 9,999. It also plans another series launch in mid-November called the "Pulse" series that will be slated in the first step-up segment and be priced at between Rs 5,000 - 6,000.

"We are naming our phones with sub-brands so that they are easily identified by customers. This has helped set us apart and break the clutter in the crowded market place," said H S Bhatia, national product group head, GSM mobile phones.

"This strategy has given a big push to both image and awareness as customers were not too aware of our presence in the mobile phones business. An unusual name like Chocolate also creates curiosity and has become the USP."

The premium Chocolate series, which was launched a couple of months ago, has clocked sales of over 5 million sets on the global scene, but LG executives refused to furnish details on how many units have been sold in India. However, the company says that the Chocolate series has been a resounding success, driving sales growth by over 500 per cent in its category (over Rs 15,000). Prior to its launch, LG had two handset models in that category but the Chocolate series has already emerged as the bestseller.

LG is not the only handset manufacturer which has taken the series branding route. Nokia has met with success with its premium N-Series that is marketed as a must have for music lovers.

"People don't relate very easily to numbers. Just having numbers as model names does not help with identification and subsequently sales," Bhatia said.

LG has a current market share of about 4 per cent in the mobile phones market, while market leader Nokia has a astounding close to 80 per cent share. LG claims that it is on target to sell 1.4 million phones in 2006, at a sales growth of almost 300 per cent.