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Samsung vs LG

Samsung, LG

BIG AND BIGGER SALES Arabs love gadgets, that’s no scoop, and now more than ever, many have the cash to indulge their every whim. In 2007, 15 million Samsung mobile phones where sold in the region, against 8 million the previous year while on the TV category, and 600,000 flat-panel TVs were sold against 150,000 units in 2006. Samsung, the leading brand of LCD TVs in the region (where it operates 13 offices and enjoys a network of 140 distributors and a two decades presence), posted a 27.6 percent market share during the first 10 months of 2007, after it raked $2.6 billion in sales revenues in 2006.

For archrival LG Electronics, trading with 90 local agents in the region for 10 years, results are also quite satisfying: In 2006, Middle East sales accounted for about 3 percent of LG Electronics’ global revenues of $38.6 billion. LG’s sales of TVs and mobiles are growing by more than 30% every year and the brand expects the Arab market to be worth $40 billion in 2010. The two Korean powerhouses do have even bigger plans for the region and its petrodollars.

GRAB ATTENTION Dubai’s Gitex show is the time for showing the Arab world what the electronics market has to offer. Samsung showed over 200 of its products last September, including its new 70 inch LCD TV and the Ultra Edition II mobile phone. The implicit message that the Korean giant doesn’t plan to let one segment unattended. In fact, Samsung likes to play it big: it organized an exclusive fashion show only for princesses and VIPs of the UAE in 2003; it managed to lift the Dubai City ban on advertising to have 68 boards on the Al Maktoum Bridge in Dubai; it sponsored the 2006 Asian games and delivered relief supplies to earthquake victims in Iran, along with support for many other causes.

LG, in contrast, tends to prefer friendlier, smaller scale activities adhesive to local residents. The brand has organized a fashion show in Burj al Arab in partnership with designer Waleed Atallah, inviting well-heeled women; sponsored the Iraqi national football team for two years (for a bargain $1 million, give the team won the Asian Championships last year); and funds a free operation program for harelips and cataracts patients in various countries in the region.

THE RECIPE FOR SUCCESS The Korean powerhouses’ strategy - the so called “blue ocean strategy” - relies on a basic assessment: product’s competitiveness is everything, and it must be kept away from price wars. This translates not only in good pricing and technical quality, but also in symbolization work, packaging, identity. Samsung’s “Made in Korea by Samsung” mark not only focuses on the brand but the country of manufacture. The branding is two-fold.

This region-friendly philosophy also shows in LG’s will to cater to national lifestyles. Instead of competing on “me-too features”, LG attempts, where possible, to tailor products to local needs. “If people in Korea need ‘kimchi’ refrigerators, those in the Middle East need refrigerators containing jujubes and coconuts”, says Kim Ki-ho, executive director in charge of the Middle East and Asia of LG Electronics. Indeed, the brand developed products tailored to the culture of the local market: its Primian refrigerator includes a special compartment for storing dates (a fruit that spoils easily) and its Qiblah phone is equipped with embedded compass, direction indication and prayer time alarm, usable in 500 cities worldwide.

KEEP UP THE HYPE Both brands are attempting to balance entry-level products with a steady move up market - and without the need for a Lexus/Vertu-style sub-brand. Last January, Samsung launched its new line-up of three premium mobile smart phones (including the camera phone G800 and the dual SIM card D880 phone) that “will address the needs of a wide spectrum of consumers including young and old, men and women, businessmen and travelers”, says Sandeep Saihgal, general manager of hand held mobile phones at Samsung Gulf Electronics.

LG also aims to cater for everybody while preserving a high end image: its latest Viewty - an all-touchscreen camera phone - was launched in select stores for a handsome $560 and its Ultra Slim CRT TV will appeal to budget-minded customers with a soft $290 price. It created a buzz by introducing a jointly-developed phone with Prada (launched along with the Shine phone series, the second of the “Black Label” phones), and even more so with a gold-plated 71-inch flat-screen television that sells for $80,000.


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