YORK, Pa. (AdAge.com) -- When Kwan Sup (K.S.) Lee joined LG Electronics in 2007, he was greeted with the marketing wariness typical of a technology business. Executives at the company formerly known as Lucky Goldstar were more familiar with the old ways of doing things, despite the manufacturer's transition to the more premium LG -- as in "Life's Good" -- branding in the U.S. in 2004. Those outside the marketing department frequently asked him how much new marketing ideas would cost.
Instead of appeasing them with a price tag, Mr. Lee, VP-global brand marketing, LG Electronics home entertainment, offered insight. He told them to think about the strategy behind the marketing before worrying about cost.
"I said, 'Before we talk about the money, let's talk about the concept and the idea and that this is the right thing to do for the long term. Let's calculate how much risk we have to take in terms of spending and in terms of investment.'" Few people understood what he was talking about, he admits. Three years later, things are different.
"Back then, some people would say things like, 'Marketing is just burning the money.' But people change. They see the returns. It's not a change overnight, but it is changing," said Mr. Lee, who reports to Simon Kang, CEO-president, home entertainment at LG. "Today there are a lot more people at LG who understand the need for investment in the brand and marketing."
Mr. Lee, who started his career at Procter & Gamble and was CMO at Pizza Hut Korea for four years prior to joining LG, is leveraging that growing trust in marketing and refashioning LG as a lifestyle brand, complete with aggressive product category pushes. 3-D TV, for instance, is a key focus for LG right now and with Young & Rubicam, New York, the company recently launched a new series of ads for its Infinia brand, part of an estimated annual $100 million effort.
But while 3-D TV gets a lot of media ink, it's a much harder sell for manufacturers, who not only have to persuade consumers to buy TV sets and glasses, but also must encourage content providers and producers to create more 3-D content and reluctant service providers to make equipment upgrades to handle 3-D.
We spoke with Mr. Lee recently about LG's 3-D efforts, as well as his role at LG, the aggressively competitive electronics market, and LG's brand strategy development.
Ad Age: There are people who just bought an LG high-definition TV a few years ago and are still happy with it, but now you're saying to them, "Hey, go out and buy another TV because 3-D TV is even better?"
Mr. Lee: In reality, if you really want to have the latest of any technology, it will only happen if you buy it on the last day of your life. Right now this is more for the people who really want to experience 3-D TV now. What I can tell you now that is this is just the beginning of 3-D TV though; eventually we will be able to add 3-D into regular TV [without glasses]. The key barrier now is glasses. Many manufacturers are really working hard to reduce the cost and improve the quality, making them weigh less, and fix other issues, even in terms of style. In the second half of the year, we'll have some that you can also use as sunglasses.
Ad Age: How do you see the 3-D market growing and developing?
Mr. Lee: The 3-D market will grow fast, but at the early stage the growth will be driven by content. And that will get us to a tipping point. The more content available in 3-D picture, then the faster the market will grow. My personal forecast is that 3-D will be like full HD function. Today we're selling more than 40% of our TVs with the HD function, but full HD content is not so much available at this point. People buy full HD TVs expecting that it will come someday. TVs are a large purchase and so people need a kind of future-proof function so they invest in the future technology today. Next year, more than 20% of the market will be 3-D-ready TV. That's big, and most of the time you will use your 3-D-ready TV for 2-D content. But whenever you want to experience 3-D picture quality for movies, for sports or for some type of spectacular event, then you need that function.
Ad Age: LG has been described as a scrappy upstart in the consumer-electronics market. How do you position against the better established players like Sony and Samsung?
Mr. Lee: Our first focus is on product leadership. We cannot win without great products. But now it has been a few years and we have proven ourselves to be in the major leagues with Sony and Samsung. The TV market has become a commodity -- we can catch up to them, but they can catch up as well. Although we don't spend as much as Samsung or have the brand heritage that Sony has, there is a good opportunity for the LG brand. We are addressing the market with a different strategy with an emotional approach, instead of focusing on picture quality or this function or that function.
Ad Age: The LG brand covers products from household goods to TVs to microwaves. How do you tie the brand together over that broad portfolio?
Mr. Lee: Even inside the company there are different points of view. But the idea is one brand strategy for everything from mobile phones to TVs to DVD players, and down to even vacuum cleaners. Our strategy is to portray our product portfolio as a strength -- not as hardware manufacturers, but as a lifestyle company, and we have many household devices and home electronics and personal-communication devices that are lifestyle devices. LG is talking about "Life's Good," freedom and infinite possibilities -- all those kind of emotional attributes -- for a broad range of products.
Ad Age: How do you divide marketing dollars and talent among the most important product categories?
Mr. Lee: We have five different divisions in LG Electronics [mobile communications, home entertainment, home appliance, air conditioning and business solutions], and probably some people in other divisions may [disagree], but this is the reality: The key priorities are two things: one, LCD and LED TV, and two, the mobile-phone business. The others are profitable, sustainable and stable, and form the base of the company, but to grow further and faster, we have to win in the home entertainment and mobile divisions.
Ad Age: What do you bring from your past posts at P&G and Pizza Hut?
Mr. Lee: The P&G company culture is very strong and I respect that. I try to develop that level of culture in this company as much as I can. Pizza is a retail business so I learned the different marketing strategies and techniques in the retail industry. Pizza Hut is not selling pizza, it's selling happiness -- that's the hospitality business. All those are very different from technology, but for me it's about understanding the fundamentals of marketing, understanding the consumer, and trying to develop your brand.
Ad Age: Your background isn't in tech, so do you consider that when hiring for LG marketing?
Mr. Lee: I tend to look for new blood from different industries. However, one condition is there: Although you are coming from other industries, you should be interested in technology. If you are dumb about these machines, it's going to be very difficult to work at this company.
Ad Age: Where does LG go next?
Mr. Lee: We are only a 15-year-old boy now, with a promising future. The other competitor like Sony is probably like a 45-year-old man. Samsung is, let's say, a 28-year-old man. We cannot win against that muscular man right now, but as time goes by, we'll grow older and stronger.