LG Dials Up Mid-Market Strategy

As a lot of attention falls on high-end smartphones, LG is focusing where much of the volume is -- the middle of the market -- with a promotional plan that calls for more spending and celeb endorsements.First up is a push for its Chocolate Touch phone in conjunction with Verizon that includes a campaign featuring popular R&B artist Ciara ("Like a Boy") to serve as the face of a major multimedia ad campaign. Young & Rubicam, New York, handles.The Chocolate Touch is aimed at teens and young adults for whom music is a high priority and a lifestyle statement, said Tim O’Brien, senior director of marketing communications for LG Mobile Phones. The handset features an FM radio, a high-tech Dolby Mobile equalizer that promises enhanced sound and clarity, and a “Join the Band” function that lets users play along with songs on a virtual 88-key piano keyboard. “This device is about connecting, and the best way is to connect is on a shared passion -- something they love, which is music. It’s also a very stylish, fashion-conscious device,” said O’Brien. The hope is that the Chocolate Touch’s music will resonate with fans of Ciara, who since breaking out five years ago has generated a spate of Billboard-charting singles.The use of Ciara in LG’s campaign comes on the heels of an announcement made a few weeks ago by CMO Dermot J.M. Boden that the company would significantly up its marketing budget in the coming year and employ more celebrities in its advertising. “One of the biggest challenges we have as a brand is getting noticed, since consumers have so many choices,” said O’Brien -- who pointed to a previous campaign aimed at sci-fi fans that leveraged the Transformers movie franchise. “Essentially we are connecting our brand to other brands.”Carolina Milanesi, research director, mobile devices, technology & service provider research, Gartner, believes the celebrity strategy is a wise move for LG, which could use a jolt of star power to elevate its reputation as a value brand. “I think that LG needs to continue to build its brand and more importantly moving it away from being perceived only as good value for money,” she said. “Celebrities will help it gain in status.”Milanesi recalled a campaign that LG ran in Europe a few years ago during which it associated the brand with Prada. “That was a turning point for the brand. LG needs to move it up a notch and work on consolidating and possibly growing its second position in the North American market,” she siad.However, the Chocolate Touch’s $79.99 price tag (after a $50 rebate) places it squarely in the middle of a market that is increasingly defined by extremes: high-end smartphones that retail for up to hundreds of dollars and prepaid wireless plans geared for budget consumers. According to Gartner, though the segment grew 27 percent year-over-year, smartphones now make up just 7 percent of the worldwide market with 40 million units out of 286.1 million in the second quarter. LG’s share of the overall market was 10.7 percent. But O’Brien sees that as an opportunity. “This is a mass device,” he said. “But what’s interesting is that the term smartphone can mean many different things. This device may be technically in the middle -- but for music lovers this is the epitome of smart. We think its one of those devices that transcends category.”See also: "Verizon/Droid Big D"

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LG Dials Up Mid-Market Strategy

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