I ask for his perception of the market at the beginning of what is forecasted as a very challenging year.

"The latest figures show that the overall DA market in the UK was down by 2.1% for 2007, and, in fact, the decline was greater during the last six months, at approximately 5%; with a 7% fall in December.  The market is inherently mature and has grown to the total level, including vacuum cleaners and microwaves, of 19-20 million units a year. However, given that we are a nation of 22 million households and most homes buy some sort of domestic appliance every year, it's a great opportunity for any of the branded players. I don't see any reason, therefore, to be overtly pessimistic over the current situation."

The differentiating features

What is LG's position in this market?

"LG is 50 years old this year, and the company is perceived as a modern brand, although this reputation came from the broader world of LG products, in particular, brown goods and telecommunication. In the white goods arena, the company has been making its name only during the last decade. Yet, we have a record of selling significant volume of products in the premium market.

"One of the challenges the company faces is being able to compete with the strongest brands operating in the European marketplace, and the UK is considered one of the toughest markets in Western Europe." 

So, how does Andy see his role in this situation?

"The challenge I face now is common to managers in the whole white goods industry. It is being able to communicate to the consumers and make them register the unique selling points of our brands. The current motto in the industry is selling on price. However, the real task is to take the unique features of the brand and deliver the premium against these features. For instance, I believe that Direct Drive is one of the most famous washing systems on the market - at both the trade and consumer level.  We are in the second phase of the laundry developments exploring the benefits of steam cleaning - in increasingly larger appliances. In March, we plan to launch a 9kg steam Direct Drive machine which will fit into a standard footprint.

"All our refrigeration appliances have the same design appeal and look. If you took off the brand badge, the customer would still recognise an LG fridge. The USP of our side-by-sides came with the removal of the ice and water dispenser from the freezer - freeing space there - and putting it into the door.

"Another great challenge that manufacturers are grappling with at present is that of delivering the products catering for the changing needs of the consumers, and delivering real value rather than value for money perceived as the lowest price."

How does LG plan to respond to these challenges? 

"Innovation and investment in the brand. For the consumer, the only 'touch point' with the brand is the product.  In 2008, we will be launching a number of products with innovative features and supporting this with strong communication in LG's core areas: refrigeration, laundry and floorcare.

LG's plans for indies

LG plans to develop a closer relationship with the independent channel.

"LG has recently separated its brown and white goods divisions. Now we are recruiting sales forces for both channels whose task would be to identify key accounts for whom we will prepare appropriate support packages and products. We are totally changing our approach to the independent channel. We are looking at products which they can sell, examining their markets and their customers' needs and expectations."

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