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1- SHIPPING: THE LOOMING CRISIS
2- LG & CRICKET WORLD CUP
3-
NEW DEVELOPMENT IN TAP GAS-PIPE PROJECT
4- MUTUAL FUNDS RIDING IN
5-
EVA SUPPLEMENT
6- STANDARD CHARTERED: ANNUAL RESULTS

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LG ELECTRONICS AND CRICKET WORLD CUP 2003

 

Excerpts from an exclusive interview with James Chun, General Manager, Karachi Liaison Office, LG Electronics, Korea

 

   By SHABBIR H. KAZMI
Mar 03 - 09, 2003
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LG has signed the global partnership agreement with the ICC. It is among the four sponsors of Cricket World Cup 2003 currently being held at South Africa. It will also be the lead sponsor of World Cup and Champions Trophy to be held from 2003 to 2007. We are proud to be partners in such mega events, but our real pride is in being Aapka Dost. Our mission is to let the public know that LG is sign of caring and sharing.

Our moto is to be a responsible corporate citizen. While we make the best efforts to maximise our business, we also make substantial investment to improve the living conditions of the people of the area from where we generate business. We want to share their happiness and sorrows. We sponsors National Games in 1997 and since then have been sponsoring other sports events. LG sponsored a Musical Show to raise funds. When the war broke out in Afghanistan in late 2001, we made a substantial contribution for Afghans through the legendary figure of Pakistan, Abdul Sattar Edhi. One of our latest community services was the arrangement of clif-lip surgeries in Karachi.

We are paying special attention to the patients. Since it was possible to serve the all we chose Civil Hospital Karachi, to start with. One of the key problems faced by the patients admitted in the various wards of this hospital was, supply of quality food for them. With the help of our partners in Pakistan arrangements have been made for the distribution of 1,500 meals per day. To ensure distribution of quality food, the money is not given to hospital management, a contractor has been appointed. The staff of our local partners also oversees quality of food to ensure timely service of food.

Prior to making any business commitment towards Pakistan, LG Electronics studied the local market extensively market size and potential growth, product preference, prices and the level of customer support. Pakistan was found to have very large demand growth rate but inadequate customer support. It was also found that local manufacturers were facing tough competition due to large scale smuggling of televisions, mainly due to high cost of locally assembled products. LG having strongly belief in its quality and price competitiveness took the challenge to beat the competition, particularly the smuggled products.

 

 

LG initially appointed a local distributor to sell CBUs and managed to sell over 35,000 televisions in six months. The market feedback was encouraging and LG entered into an agreement to the assembly of televisions in Pakistan. It managed to sell over 220,000 televisions during the first year of commencement of assembly in Pakistan. It emerged to enjoy the largest market share. The customer preferred LG mainly for a number of reasons, mainly quality, price and after sales support. As the customers got quality product at competitive prices that were well supported by after sales services, quantum of smuggling is gradually reducing. We believe that we are capable of providing the latest technology at affordable price.

I have no hesitation in saying that LG could have not acquired such a market share without the support of its local partners, Allied Electronics, the Government of Pakistan (GoP) and above all without the dedicated efforts of people working at the assembly plant. The GoP policy to protect the local industries, reduction of import duties on CKD kits and components, enables the local assemblers to beat the competition. As the assemblers attain higher capacity utilisation they are able to offer products at competitive prices.

LG has an ambitious programme to undertake assembly of more products in Pakistan. We encourage and support the local partner to undertake assembly of all the fast moving models of televisions. After taking into account the fast growth of information technology, we want to assemble monitors in Pakistan. We also have a plan to start assembling of split type airconditioners in Pakistan. LG's local partner has started export of locally assembled television from Pakistan, with the first shipment to Afghanistan.

As stated earlier, one of the factors contributing to LG's success in Pakistan is the superior level of customer support. LG's over 40 service centres are already operating in major cities. It also has over 25 authorised service centres in small cities. LG offers convenience because the field staff handles 80 to 85 per cent complaints. Only the remaining complaints require brining of sets to repair shops. We have fully computerised service facility and as soon as the compliant is lodged and till the job is over, its status is been monitored. As soon as the job is completed, the customer gets a confirmation, we call it 'happy call'.