COMMENT: The exit of David Brand from LG Australia was well and truly on the cards when the company was exposed by Choice Australia for fudging the truth about their products.Now the Korean company, who is facing multimillion dollar fines, is undergoing a major shakeout and relaunching LG Australia, after the appointment of William Cho, the former President and CEO of LG Canada, as Chief Executive of LG Australia.
Cho, who was shipped into Australia days after LG Australia was found to have lied about the power performance of their refrigerators, is a tough performance-driven operator with a track record of success in the Canadian market where he headed the company’s operations.
In Australia, Cho has already taken action to fix the company’s endemic problems with the axing of several key managers. Its been suggested that this is only the start and that several other heads, including several in sales, will be axed as part of the restructure.
This could be a precarious exercise as the likes of Graeme Cunningham, the current sales director of LG Australia, has excellent contacts, is trusted by the retail channel and has often been the glue that has held the LG operation together in Australia.
Among those who have gone from the company since Cho’s appointment are David Brand, the former Marketing Director, Carli Wilson, the former Marketing Manager of the company’s struggling Communications Division, who late last month was still running what some observers described as “froth and bubble” marketing events for handsets that are going nowhere in the Australia market up against offerings from arch rivals like Samsung, HTC and Apple.
Cho has already started to stamp his own management style on the Australian operation with the appointment of Kim Barnes as marketing manager of consumer products. Barnes came from LG Canada. He has also hired former Coca Cola executive Mark Van Dyke. He is also on the lookout for a new Marketing Director who will be given a brief to basically relaunch the company.
During the past three years Brand has had one disaster after another from a Scarlet TV launch that went pear shaped, to multimillion dollar phone launches that did little to stimulate sales, to the exposure of LG as a serial offender in the appliance market which resulted in LG being nobbled three times by the Australian Competition and Consumer Commission for misleading consumers. There was also the issue of several recalls of LG air conditioners and appliances.
The LG slogan “Life’s Good” was well and truly on the nose.
Five years ago under the direction of Paul Reeves, LG’s former Marketing Director, the LG brand was hitting a sweet spot and the slogan Life’s Good really meant something with consumers because it was unique, locally developed and above all in touch with the Australian way of life.
Then along came Brand, who in reality was a puppet of what his Korean task masters wanted.
Killed off was the memorable local advertising. This was replaced with big budget International advertising that failed dismally. The big budget Scarlet TV campaign came and went along with several other International campaigns.
At one stage Brand was told by his corporate masters in Korea that he had to appoint WPP group agencies in Australia. This resulted in Mindshare taking responsibility for media planning and buying.
George Patterson Y&R was appointed to handle above-the-line advertising duties, while Publicis Mojo’s digital arm Publicis Digital, were appointed to manage website and digital marketing.
Brand was then forced to call a pitch for public relations. This resulted in several WPP owned PR companies fighting among themselves as to who would get the spoils.
The incumbent, Burson Marsteller, threw in the towel and WPP owned Pulse was appointed to set up a new operation called LG One. This operation was driven out of Korea, with the local management given little opportunity to build the local brand.
In reality LG is a dynamic company. Their display operation is among the best in world, even Steve Jobs at Apple gives them credit for that with the company tasked with the development of new AMOLED and OLED screens for several Apple products.
They also make great appliances.
After gaining popularity with their mobile phones in Australia, LG has failed to keep pace with offerings from Samsung, HTC and Apple. Big investments in fluff PR events using the likes of Chris Noth came to nothing.
What LG needs to do is invest in local marketing and not try and feed Australians on a diet of overseas marketing swill.
Their advertising needs to be locally relevant and focused, and this will only be achieved if they empower a local marketing director who is given the choice of either using an International campaign or a locally developed campaign.
The company also needs to talk more about the brand and stop dishing out boring product press release that are more product numbers and specs than brand substance.
They also need to develop their people to be brand ambassadors, talking about LG as a company.
Because, at the end of the day, a brand is remembered long after a product has become obsolete.