By Kim Yoo-chul
Staff Reporter
LG Electronics, the world’s third-biggest flat panel maker behind Samsung Electronics and Sony, has raised its yearly marketing budget for the strategic ``Scarlet’’ flat-screen TV to $100 million.
The figure represents an increase of nearly 40 percent from last year’s $62 million. LG allocated $47 million for promotions in 2006.
``Capitalizing on the key North American and European markets, we will pour massive amounts of fresh capital into promoting our Scarlet liquid crystal display (LCD) television,’’ Kang Shin-ik, head of LG’s display division, said Thursday.
``LG will introduce the next section of the `scarlet' TV ad series,’’ he said. LG aims to sell 10 million sets in 2008 including 5 million in Europe and 2.8 million in North America.
The advertising plan came after the South Korean electronics maker fooled everyone with its ``Scarlet’’ campaign. For three months, the company made readers and TV viewers believe that a new movie starring Norwegian model and actress Natassia Scarlet Malthe and produced by David Nutter ― of the hit show ``The Sopranos’’ ― was in the making.
From billboards in Paris, Los Angeles to online banners, Malthe made public appearances at film premiers in support of her fictitious role, while the ad copy offered no hint of LG.
``To spend money without letting people know about our brand is really risky. But that’s the punch line of this campaign. It will change the rules of the game,’’ Lee Kwan-sup, vice president of LG’s Digital Display Global Brand Marketing Team, said, adding his company can’t match its bigger rivals on media spending.
``What we really want is to increase our brand recognition. Strengthening consumers’ emotional attachment to that brand is the key to long-term success,’’ Lee said.
LG expects LCD TV pricing to be ``very stable’’ in the second quarter due to healthy demand for flat-screen televisions.
But the company is hedging its bets on price stability in North America on worries over ``ripple effects,’’ spurred by Sony’s aggressive price-cuts throughout its larger distribution channels.
During the January-March period, the company’s LCD TV sales jumped 82 percent, while plasma TV sales saw more modest growth of 18 percent.