With Rs 35 crore already in the kitty for this year, LG is now aggressively stepping up its institutional sales activity, led by brand promotions, retail and trade schemes, to meet the target. Says Priya Gupta, manager, Institutional Sales, LG: ``Next year, we plan to increase our target for institutional sales to 10 per cent of overall projected sales (Rs 1,500 crore).''

LG has honed its institutional sales strategy by identifying and proactively targeting five different channels to push the LG range: brand promotions; the welfare segment (factory workers and office staff); government sector; direct users (hospitals, hotels); and the canteen stores departments (CSD) of the armed forces. Says Rajeev Karwal, vice-president, sales & marketing: ``Of the Rs 35 crore garnered from these segments so far, brand promotions have accounted for 30 per cent, welfare 30 per cent, CSD 20 per cent, hotels 15 per cent and the govt sector 5 per cent.''

A distinct strategy has been tailored for each of the five channels. In brand promotions for example, it is the perceived value of the products given as gifts that is important, whereas for the welfare segment aspirational value, convenience and easy financing are prime factors. Meanwhile, hotels represent a price-sensitive segment requiring specially-customised products.

Brand promotions: LG has been proactively approaching companies to design their promotional schemes, PoP material and advertising. ``We were the first to take up brand promotions as a special activity in a bid to enlarge the market through relationship marketing. Not only do we suggest an idea, but also help execute it,'' says Gupta. LG sent out mailers to 500 companies in January 1999 offering joint promotions and `mutually beneficial annual tie-ups.' It went on to offer the services of its dedicated institutional and logistics departments to `plan brand promotions and facilitate distribution of products.'

It offers a complete package deal to interested companies: framing a promotional programme for them down to the smallest detail after studying their needs. This includes retail promotions, dealer promotions, dealer strategies-how to plan them, communicate with dealers, display contests and loyalty programmes. The most recent example is the current Shakti Bhog atta Lucky draw scheme, which has been entirely designed and executed by LG.

``In retail schemes, the advantages are many: The LG brand has a large range of products and it offers good after-sales service. Besides, the perceived value of goods is very important in a brand promotion. Since we do not offer discounts on our products in the open market, so in any brand promotion the perceived value of our products is higher, making it an attractive deal,''explains Gupta. Some of LG's promotion `customers' include Sahara Airlines, (a coupon scheme offering 20 per cent discount on select items), Escotel (Onam offer), Airtel, Reliance Mobile, Pepsi (the under-the-crown scheme during the World Cup), Indo Mobil, Wheel etc. It has also tied up with over 100 companies for dealer schemes--like top-retailer awards for meeting targets (Goodricke, Annapoorna, Tata Salt, Amul, Mother Diary) and display contests (Revive, Brittania).

Welfare: In this segment, LG is targeting a consumer base--the aspirational consumer, mostly factory staff--that most companies ignore, but which has considerable clout in terms of generating volumes. This segment is being targeted on the convenience and easy finance platform: LG has just tied up with Birla Global Finance Ltd, part of the Aditya Birla group, for the purpose. Under the tie-up, LG will cover all the Birla companies unit-wise. This amounts to over two lakh employees.

This is a lucrative segment, claims LG, because of the high hit-rate: Out of a potential base of 1,000 factory workers, there is an assured sale of at least 10 to 20 per cent, says Gupta. The key contributor to success: the aspirational consumer electronics are brought within easy reach through simple financing schemes. Workers and factory staff are happy to pick up new products as the installment payment is made through monthly salary deductions without the hassles of cheque payments and salary verifications. CTVs, and semi automatic washing machines have been the most popular items in this segment.

Says Gupta: ``For us this is a planned activity. Usually dealers, looking for secondary sales, initiate such factory sales. Companies rarely bother to push such sales in an organised way.'' In order to avoid stepping on anyone's toes, LG takes care to go through the workers unions and is also careful not to sell products to rival companies. Recently, for example, it sold over 400 CTVs each at the Carrier and Whirlpool factories, but its ACs and fridges/washing machines respectively were not on offer.

Hotel segment: In this segment, LG is targeting the five-star and middle level hotels (50-100 rooms) by offering customised products. For example, LG offers a special `hotel-mode TV' model with an auto-volume leveller, which ensures that other guests are not disturbed. Says Gupta: ``Another attraction for hotels is the cricket game TV model that would also prove to be popular and an interactive option with Internet, video/audio or room service menu facilities.''

LG claims to have sent out mailers to 1,200 hotels-and bagged at least 100 orders, besides the Palace on Wheels luxury train, for providing TV setsin its 52 cabins. Now LG is readying a range of interactive televisions for this segment, offering remote-controlled features like: the hotel menu, local facilities, billing, room service, video on demand, Internet, multi-lingual options.

Canteens and the government sector: Says Gupta: ``We are perhaps the only company offering our entire range of products in CSD canteens.'' In the government sector, which operates through tenders, significant orders so far included an order for 200 TVs for Himachal Tourism bungalows in the state and over 2,000 TVs for primary schools in rural areas in Maharashtra.

The company has a five-member Institutional Sales division, with each devoted exclusively to one segment. It has 50 institutional sales dealers and a ring of sales representatives who interact with the dealers and conduct demonstrations when needed. Its infrastructure consists of 20 mobile vans with glass windows to display the product range, that cover at least 500 km every month in both rural and urban markets. The division has an operational budget of 4.5 per cent of institutional sales turnover. It operates on the basis of an exhaustive database of companies, societies, hotels and hospitals. The price deals offered are flexible, depending on the size of the orders.