【正文】 The Microwave oven market in China will continue its strong growth and should reach million units in 2023. Primary regions will be Central China, followed by South and Southwest China. Other regions should develop as ine grows. Computer grill and mechanical grill should further increase their share as prices decline. 182。9939。s DISCUSSION 182。To achieve the aspiration of being a profitable 1 Player in China, LG needs to launch 5 strategic initiatives: (1) launch a three step regional expansion, first from Beijing to Wuhan, (2) introduce entry products to cover all price points while continuing to introduce high end products to create margins, (3) improve channel coverage by increasing the distributor work and the sales force resources, (4) increase significantly advertising spending while optimizing media mix, (5) reduce aggressively cost by leveraging economies of scale. 2 010326SH_120703_085v5i TODAY39。s DISCUSSION 182。The Microwave oven market in China will continue its strong growth and should reach million units in 2023. Primary regions will be Central China, followed by South and Southwest China. Other regions should develop as ine grows. Computer grill and mechanical grill should further increase their share as prices decline. 182。0039。Four customer segments are found from market research: Premium buyers, basic brand buyers, rational technophile, and generic buyers. All segments, except premium buyers, are highly pricesensitive, thus skewing market demand towards lowend products. At the same time, reliable performance, ease of use, and good afterservice are important across segments. 182。s DISCUSSION 182。9839。t know * Part is subset of puter grill Source: AMI customer survey 20 010326SH_120703_085v5i TODAY39。LG has built a successful platform for growth, being 2 in China, although far behind Galanz, by focusing on premium products and in the Beijing area. Faced with the issue of further growth and improving profitability, LG now needs to choose between a high growth strategy, with the objective of being the leading player and to reach breakeven in 2023, or to remain a premium niche player for the foreseeable future. 182。The Microwave oven market in China will continue its strong growth and should reach million units in 2023. Primary regions will be central China, followed by South and Southwest China. Other regions should develop as ine grows. Computer grill and mechanical grill should further increase their share as prices decline. 182。Four customer segments are found from market research: Premium buyers, basic brand buyers, rational technophile, and generic buyers. All segments, except premium buyers, are highly pricesensitive, thus skewing market demand towards lowend products. At the same time, reliable performance, ease of use, and good afterservice are important across segments. 182。01JanMechanical grill Industry CAGR = 17% 03006009001 , 2 0 01 , 5 0 01 , 8 0 02 , 1 0 039。The petition in China is already intense and will continue to increase, as Galanz and Midea have huge ambitions in the market. In addition, the severe overcapacity (about 45%) will continue to force prices downwards thus threatening profitability for all but the lowest cost players. 182。s marginal profit Percent 5 years from now Single function 335 288 288 335 Mechanical grill 438 379 379 438 Computer grill*** 496 433 433 496 286 351 419 1 15 7 20 3 16 28 010326SH_120703_085v5i TODAY39。9739。To achieve the aspiration of being a profitable 1 Player in China, LG needs to launch 5 strategic initiatives: (1) launch a three step regional expansion, first from Beijing to Wuhan, (2) introduce entry products to cover all price points while continuing to introduce high end products to create margins, (3) improve channel coverage by increasing the distributor work and the sales force resources, (4) increase significantly advertising spending while optimizing media mix, (5) reduce aggressively cost by leveraging economies of scale. 16 010326SH_120703_085v5i MICROWAVE CONSUMER SURVEY DESIGN Geography coverage ? Urban area of Beijing, Shanghai, Guangzhou, Tianjin, Shenyang, Chengdu, Wuhan Sample size ? Total 875 samples in urban area who are decision makers in microwave ? In each location –In Beijing, Shanghai, Tianjin: 100 MWO owners, 50 MWO potential buyers (in next 12 months) each –In Guangzhou, Shenyang, Chengdu, Wuhan: 60 MWO owners, 40 MWO potential buyers (in next 12 months) each Methodology ? Doortodoor random sampling ? Facetoface interview Field period ? March 9 16, 2023 Detailed explanation 17 010326SH_120703_085v5i FOUR DISTINCTIVE CUSTOMER SEGMENTS ARE DERIVED FROM THEIR RESPECTIVE KEY BUYING FACTORS 25332021100% = 875 microwave oven owners plus potential buyers Price sensitive consumers take up more than half of the market Premium buyers ? Most care of performance, design and quality ? Least price sensitive and has highest incidence of using premium brands, ., National and sophisticated models, ., puter grill 1 Basic brand buyers ? Looking for reliable brand for quality assurance 2 Rational technophiles ? Knowledgeable buyers who understand what they need from a microwave oven ? Care less about brand, more price sensitive, requiring a lot of product information to make the purchase decision 3 Generic buyers ? Buyers who are nervous to handle the microwave oven ? Look for simple machine and need good aftersales support 4 Source: AMI customer survey 18 010326SH_120703_085v5i WHILE PRICE SENSITIVITY DIFFERS ACROSS SEGMENTS, RELIABLE PERORMACE, EASE OF USE, AND GOOD AFTERSALES SERVICE ARE KEY FOR EACH SEGMENT Ranking of KBFs 100256762627148