LG Electronics steps up to become leading global corporate brand

LG Electronics (LG), a global leader and technology innovator in consumer electronics, has announced its ambitious plans to become one of the world’s leading corporate brands, which will include additional marketing investment, business reorganization and system improvements, and global standardization.

“LG aims to become the best corporate brand with topnotch marketing capabilities in each of the 140 countries where we currently operate.

We want to make it completely unimportant to consumers where LG is headquartered; all that will matter is how they feel about our products,” said Jeff Hong, president and chief executive officer of LG Electronics Philippines, Inc.

“This will be possible only through deep understanding of what today’s global consumers really want and by making strategic marketing investments.

Being alert to consumers’ needs, both practically and emotionally, is critical to survival today, especially as product lifecycles are getting shorter and shorter,” added Hong.

To become a truly multinational, marketing-driven company, LG aims to elevate its marketing capabilities both through its unique combination of advanced technology and stylish design as well as advanced marketing practices.

To enhance its brand, LG has increased its marketing investment by $400 million last year, complemented by unique, aggressive campaigns to increase consumer recognition and understanding of LG’s brand identity as a sophisticated brand that sits at the intersection of function and form.

LG’s focus on marketing investment has already begun to yield results, as the company’s brand awareness in the United States market has increased from 65 percent in 2005, to 83 percent in 2007, according research conducted by LG.

This wider recognition has resulted in improved profits in North America.    

As part of its efforts to be a highly profitable organization, LG also plans to improve its business portfolio in the next five years, which will include reorganizing business units and divisions, expanding outsourcing and participating in new businesses such as energy, B2B solutions, and healthcare.

Through its reorganization, LG expects to achieve at least 10 percent sales growth, six percent profit margin, four times asset turnover ratio, and 20 percent ROIC.

The company aims to increase its ROIC from 10 percent in 2007 to 15 percent this year, with the target ROIC in 2010 at more than 20 percent.

LG also looks at improving its cash flow, recognizing that it is one of the most critical elements of a company’s financial structure.

LG also aims to achieve global standard by enhancing its management structure through the appointment of Reginald J. Bull as chief human resources officer, an executive vice president-level position, recently.

Bull will direct all aspects of ensuring LG’s HR policies and systems are at par with global standards.

To enhance its position as a global brand and boost performance, LG has also been filling C-suite positions with non-Korean global leaders who are overseeing marketing, supply chain, and procurement.

Last year, the company appointed Dermot Boden, formerly of Pfizer, as chief marketing officer; Thomas K. Linton from IBM as chief procurement officer; and Didier Chenneveau from Hewlett-Packard as chief supply chain officer.

With these investments and initiatives, LG expects to achieve its business goals this year — improving both growth and profit — as well as position itself as a truly global brand.