LG ELECTRONICS CANADA, INC.

THE WATCH PHONE

Submitted By:
CABAYACRUZ, Jamie Bernadette C.
CARPITANOS, Joyce Sophia R.
TAN, Krystal Joy, D
TAN, Neil Matthew L.
ZOZOBRADO, Bethle May M.

Submitted to:
Mr. Francis Arroyo

Date:
August 27, 2015

LG Electronics Canada, Inc. The Watch Phone

Problem Statement
How can LG generate an effective and efficient marketing strategy to launch their
GD910 watch phone into the jam-packed, sophisticated, and dynamic North American
market of smart phones?
Objective
The objective for the LG Electronics Canada, Inc. is to generate an effective and
efficient marketing strategy by strengthening the product image and name as well as
reconstructing some of their strategies to be able to have an easy access or launching
to the vast and fast-paced growing smart phones industry in the North America.
Brief Description of the Case
Yearly, the Consumer Electronics Association held an International Consumer
Electronics Show in Las Vegas. They present a variety of new products every time this
event is held. In 2009, Consumer Electronics Show introduced their new product, The
Watch Phone, which had much attention from the media and society for being the first
touch watch phone in the world. The Watch Phone is a wearable phone installed with
all the latest features like 3G capabilities, touch screen interface, an MP3 player, and
video calling. In August 2009, LG launched the Watch Phone in Europe and started to
investigate ways on how to expand the devices market to include North America.
The GD910 Watch Phone would be the first ever wearable handset in the world
of advanced technology. This device has these top quality materials to manufacture the
metal casing for a high-end timepiece. Consumers must be comfortable wearing this
device. Even though it has a small design, it is still at the lead of innovation. The device
offers voice commands and recognition, waterproof protection, Bluetooth and 3G
connectivity, speakers, alarm, and calendar.
Moreover, LG currently has the variety of networks in different places, but LG had
not yet chosen its Canadian carriers for the Watch Phone. LG needs to decide whether

Watch Phone has to be exclusive to one carrier or available through different carriers.
One of their competitors, Apple, made their products available only through Rogers, and
other competitors offered their products through different carriers. When consumers buy
the product, they have the decision to choose their own carrier or acquire the pay-asyou-go basis. In their European launch, they offered the product in only one carrier,
Orange, for a 12- or 24-month contract.
The

consumer

electronics

industry

consist

companies

that

designed,

manufactured or marketed consumer electronics. Consumer electronics represented

three parts of products: in-home consumer electronics, in-car consumer electronics and
portable consumer electronics. The majority of the growth on the consumer electronics
industry was attributed to the portable sector of the market and to the increasing
popularity of product miniaturization. This portable electronic market was characterized
by technological convergence. Although the majority of new consumer electronics were
manufactured in the Asian market, they were distributed around the globe.
LG designed and manufactured consumer electronics, home appliances and
mobile communication devices. The company originated as GoldStar in Korea in 1958.
In 1995, the company was renamed LG Electronics, Inc. and also acquired an American
company, Zenith. In 2008, LG established a new global brand identity: Stylish design
and smart technology in products that fit our consumers lives.
Alex Carson, a fourth-year business student who received a phone call from LG
Electronics Canada Inc.s recruitment specialist, had his hopes set on securing the
assistant marketing manager position with LG, and he wanted to impress the interview
panel. During Carsons research he had read about the watch phone and its recent
introduction into new markets and his strategy was to prepare a thorough marketing
plan for this new products Canadian launch. Carsons research had uncovered much
information about LGs watch phone.
The Watch Phone Canada has no price yet. But when the product was launched
in the Europe it became their basis on how to price the watch phone the moment it'll be
launched. Its price reflected many capabilities of the phone and its vital use. With many

devices available in the market, LG needs to choose a pricing strategy either skimming
strategy or penetration strategy. So that when the product would be launched the pricing
point would be appropriate to its specifications and capabilities.
LG need to advertise their new product whenever it is launched in the Canadian
market. However, LG was undecided on how to advertise their new product. They need
to consider its target market and decide on the message they wanted to convey to the
consumer. They need to choose an appropriate advertising form. LG have the
opportunity to enter joint marketing means of advertising or try other marketing tactics to
advertise.
In conclusion, LG's marketing plans should be developed so that it would be
successful. Implications from analysis of the industry should be identified; LG's strength
weakness, competition and its target market should help the product (Watch Phone) to
be launched successfully.
Areas of Consideration
Strength

LG has already established its brand name and image.

LG offers only the best and top quality materials for their products to be able to

fully satisfy their valued customers.

The GD910 Watch phone is the first one of its kind. LG is the first company to

produce a product with smart phone features on a wrist watch device.

LG as a company has a big market share.

Weaknesses
Since its the first product of the company, users might not get attracted to the
product at first because they are not used to it. Consumers need to be enticed

first.
The price of the watch phone is very high compare to its competitors.
LG has never sold a watch; watch lovers might wonder if they are familiar with

the industry style and wants.

Since it is a smart phone and a watch combine it may have a numerous
functionality concerns.

Opportunities
Since it is in the 21 st century, also known the technology era, technologies are

already vast, changing and dynamic thus this gadget might be trending.
The company generates high profits which allow them to cover a large amount

for advertising budget.

The popularity of product miniaturization is growing in the portable sector of
electronics; this might enlarge the target market to which the marketing strategy

is addressed.
LG has an influence all over the world; therefore the new product will be able to
attain more people.

Threats
LG detains only 5% of the market share of the top consumer electronics brand;

the electronics industry is really concentrated.

LG is confronted with stiff competition from two different markets.
Brands like Nokia are much respected due to the high quality of the materials

used for their cell phones. This could be a threat for LG.
Canadian mobile phones competitors all offer products with similar functionality;
most separate the product from this view and focus on its uniqueness.

Alternative Courses of Action

ACA1: Develop Pricing Strategy

The Company should establish the Watch Phones Canadian price by choosing

between a skimming pricing strategy and a penetration pricing strategy so that when
the new product of LG will be launched the price point would be proportionate to the
specifications of the product and to be affordable.
Advantages:
Economical: The cost will depend on the company itself because the company
would rely on certain grounds for them to be able to achieve and select the right
pricing strategy for the launching of the product itself. They could apply or work on
certain aspects wherein they would be able to control their costs to be lesser.

Political: It depends on the laws implemented and applied in the state where the
marketing and advertising plan will be enforced.
Psychological: This would have a positive effect to the persons involved because
these would create good communication and analytical skills for them while selecting
the best pricing strategy for the company.
Social: This is acceptable to the community because they would have the
assurance that the price of the product being introduced to them would be
reasonable considering that they have researched the right pricing strategy to be
used.

ACA2: Start-off Scheme for Advertising

LG should be able to select the most effective way of improving its promotion and

advertising plan to raise awareness of the new product to the North American
Market. LG could either collaborate with carriers that are common in the industry or
have promotions available through the carrier. In this alternative they might also
promote their product by making up marketing ideas to obtain exposure of their new
product.

Advantages:
Economical: The company had significant financial resources and was willing to
establish a large marketing budget if confident in the proposed promotional
advertising plan.
Political: It depends on the laws implemented and applied in the state where the
marketing and advertising plan will be enforced.

Psychological: This has a positive effect to the company because this has great
possibility that the new product which is the GD910 watch phone will have its big
break to the North American smart phone market through this promotional or
advertising plan.
Social: It will be acceptable to the community because they will be fully aware of the
new product being presented to them and it does not violate or cross over any status
of a given individual or entity

ACA 3: Reconstruct Pricing and Promotion into a 4Ps Strategy

Since LG considers pricing and promotion, there is a greater chance to launch

their product in an effective and efficient way by reconstructing the 2Ps (Pricing and
Promotion) strategy into a 4Ps strategy which includes pricing, promotion, product,
and place. Instead on just focusing on pricing and promotion, LG should also
concentrate on how their product relates to the users needs and wants. LG should
also consider the place wherein theyll be able to distribute their products properly to
be easily sold.

Advantages:
Economical: This would be costly because reconstructing the 2Ps strategy into a
4Ps strategy requires the company to start from scratch considering that they need
to revise everything. However this will depend on the approach of revision that they
would be applying.
Political: This does not violate any law.
Psychological: This would have a positive effect to the persons involve in the
reconstructing of the strategy because they would be able to share new and great

ideas for the success of the launching of the product. This would create good
camaraderie for them because they are after one goal as a company.
Social: This is acceptable to the community because they would have the
assurance that the product being introduced to them has undergone due process to
be able to reach and fulfill customers need and wants.
Recommendation
The recommendation advised by the researchers is to reconstruct LSs pricing
and promotion into a 4Ps strategy. It is recommended to also consider product and
place in their P strategy. Products are the goods and services that your business
provides for sale to your target market. When developing a product you should consider
quality, design, features, money dollars covering costs expenses packaging, customer
service and any subsequent after-sales service. Promotion refers to the act of
communicating the benefits and value of your product to consumers. It then involves
persuading general consumers to become customers of your business using methods
such as advertising, direct marketing, personal selling and sales promotion

Action Plan
Activity/Pla

Implementin

Monitoring

Person(s)

g Scheme

Scheme

Responsibl

Target Date

Budget/Resource
s Needed

e
Choosing

By having a

-Decision on

-Research

Within 5

It will either be

between

meeting for

what pricing

and

months only

costly or not

skimming

the company

strategy will

development

because

because it depends

pricing

to be able to

the company

department

pricing a

on what approach

strategy or

choose the

use

-Marketing

product is a

will they be using

penetration

right pricing

department

difficult

concerning about

pricing

strategy

-Budget and

decision to

the pricing strategy

strategy

towards

Financing

make for you

that will be

when they

earning high

Department

have to

implemented.

will be

profits

including

considers

accountants

several

launching the possible in the

GD910

shortest

watch phone.

amount of

-CEO

factors.

time and also

through
research
since you
need to
consider
some factors.

Activity/Plan

Implementin
g Scheme

Monitoring
Scheme

Person(s)
Responsible

Target Date

Budget/Resources
Needed

Conduct a

By compiling

-Copy of the

-Marketing

Within only

It would either be

research

the records of

performance

and

one year for

costly or not

regarding the

the company

of the LG

advertising

them to be

depending on the

scheme that

and the

electronics

department

able to run

company on how

they will be

strategy they

Canada, Inc.

using to

used during

in prior years

-CEO

their industry

they will do it but LG

improve their

the prior years

-Research

smoothly

had significant

-List of ways

when it comes

financial resources

promotion

to know how

on how can

and

to

and they are willing

and

or where to

they attract

development

competition.

to establish a large

advertising

improve in the

the attention

Team

plan to

promotion and

of the people

marketing budget if
confident in the

advertising

increase
awareness
of the new

proposed

plan to lure

promotional

the attention

advertising plan.

of the people

product to

in the North

the North

American

American

Market.

Market.

Activity/Plan

Implementin
g Scheme

Monitoring
Scheme

Person(s)
Responsible

Target Date

Budget/Resources
Needed

Make a

By gathering

-Certain

- Marketing

Within only

It would cost the

marketing plan

certain people

reference or

and

one year for

LG electronics

for the new

to be part of

documents

advertising

them to be

Canada, Inc. a

product named

the making of

from given

Department

able to

large amount of

GD910 watch

this marketing

sources to be

- CEO

used

release the

money since they

phone.

plan.

- External

product

will start from

consultants

successfully

scratch

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in the market

considering that

and

as early as

they need to

Development

possible.

revise everything

Department

Conclusion
In conclusion to this recommendation mentioned above, these two additional
factors will improve their strategy in entering the market of North America. They have a
strong and solid strategy in pricing and promotion, why not add the two more Ps? This

will be a great advantage to them since they already have a firm run in the business, but
in the world of business, every entity must not stop in improving, innovating, and
competing in the global market because the main point of having a business is to earn
profit and give the best service and offer to the market in the entire global market.