Calling All Cell-Phone Shoppers

Whether you're an established business executive, a tech-savvy teen or a proud grandparent, chances are you own a cell phone. In fact, 90% of people who are capable of owning a mobile phone currently do, according to Carl Brown, director of trade marketing at LG Electronics MobileComm U.S.A. in San Diego. While the popularity and necessity of cell phones is good news for manufacturers, they still must help shoppers overcome numerous purchase barriers to ensure they go home with the phone that's right for them. "Our shopping cycle has more steps than someone who's buying soap or baby formula," Brown says. "Our consumers are doing their research prior to walking into the store. They're asking a lot of questions; they're selecting and deselecting vs. what they see in stores and the feedback that they're getting from retail salespeople; and pricing plays an important role."There's also a little more apprehension because of the contract they have to sign," he continues. "That presents a tougher buying decision, similar to buying an automobile. That's the pressure they're under."To help make this process as easy as possible, Brown and the rest of LG Mobile's integrated marketing department conduct extensive consumer research and create support materials for more than 30 new cell phones every year -- not to mention the close to 30 other product launches that range from Bluetooth headsets to netbooks. "We're looking two years out on trends, what's happening and what we can expect," Brown says. "Part of marketing is also innovation, so we're constantly looking at improving the innovation of the products that are on the market and anticipating the needs of the consumers before they know they have those needs."A division of LG Electronics (the U.S. consumer electronics and appliance divisions are based in Englewood Cliffs, N.J.), LG Mobile sold its first phone in 1998. Because all of the divisions' products are sold in many of the same retailers (Best Buy, Walmart, Sears, etc.), they are able to do cross promotions and leverage their unified brand identity. At LG Mobile's headquarters in San Diego, Brown reports to Tim O'Brien, associate vice president, consumer trade and insights marketing, who reports to vice president, marketing and innovation Ehtisham Rabbani. President Jeff Hwang oversees the entire mobile division.Knowing the LG Mobile ShopperAmy Clendening, senior manager of insights marketing, and Adam Noar, senior market research analyst, are part of LG Mobile's insights marketing team, which supports the research needs of trade marketing, consumer marketing and product strategy. These four areas make up the company's marketing department. The insights team talks to consumers on a weekly basis, which adds up to tens of thousands of consumers every year, Clendening says. Research methods include quantitative surveys as well as one-on-one and group discussions to understand how consumers shop, what product features they're interested in and where they get their information about mobile phones. When preparing to launch a new product, the research team does usability and design concept testing early in the process. "We go into extensive usability testing where we're able to understand the key pain points that consumers are going through with a handset so we can make necessary changes," Noar says. Later on, the phones are evaluated for color. "We often present anywhere from eight to 11 different color variations for a given handset," he adds. While some research activities are tailored to specific campaigns or product launches, others identify trends in the mobile industry as a whole. "We not only talk to consumers, we talk to retail participants and we do tracking over time to see how the landscape is changing to stay ahead of the game," Clendening says.One key insight the marketing department must always keep in mind is that "the consumer often has a heavy influence on what the shopper is purchasing," she says. For this reason, LG Mobile focuses on the consumer rather than the shopper. Although this can be the same person, in many cases, "The only reason [the shopper] is there is to sign the contract," says Louise Jones, trade marketing specialist - in-store. "It's already been picked out by the kid or teenager, or even the adult or partner."Meanwhile, the cell phone market continues to trend younger as well as older, as older adults who didn't understand the need for a mobile phone have realized the benefits of having one. In terms of product features, even the most basic phones today have cameras, and text messaging has become more popular for all ages."There's less phone calling done by the younger consumers and more texting," Clendening says. "What we've heard from consumers and a lot of parents is that's the only means that they can communicate with their kids, so text messaging and being able to communicate in that way has become increasingly important." LG Mobile is the leading manufacturer of QWERTY (meaning full keyboard) handsets, which makes text messaging much easier than using a number pad.Reaching Shopper SegmentsWith such a large consumer base, LG Mobile needs to segment those consumers into smaller, like-minded groups. Although the company does not disclose how many or what types of segments it has, it does position its phones with specific target consumers in mind. "We have an algorithm that we use to classify who our segments are," Noar says. "We have research based on specific segments for certain handsets, so that way we can be much more targeted in our approach for how we're analyzing the results of the research and the implications that come from the segment.""It changes over time as technology changes, as features change, and it changes by segment," Clendening adds. "There are definitely more tech-savvy segments and more basic segments that are looking for less in their phone."Consumers also vary by whether they have mobile service with Sprint, Verizon, AT&T or another carrier. LG Mobile works collaboratively with the carriers -- which often have their own shopper segments -- to see where there may be overlap. "We try to garner insights about what is a Verizon shopper like, what is a Sprint shopper, and how are they different?" Brown says.This spring's campaign with Sprint, which features Eva Longoria Parker and Victoria Beckham, specifically targets two of that carrier's fashionable shopper segments. Promoting the Rumor Touch and the Lotus Elite, the Rumor Touch is designed to reach those with more classic style (like Eva), while the Lotus Elite has an edgier look (like Victoria). "They're both touchscreen, they're both QWERTY keypad devices, but they couldn't look more different," Brown says. "It's about which style best fits your life."The campaign is somewhat of a departure from LG Mobile's traditional marketing, which usually focuses on a single product. Marketing elements include broadcast, print, online, a fashion event and a consumer promotion, which will be communicated in-store. "The in-store piece of it is really promoting the consumer promotion, but it's also bringing in the elements, the design, the customization of those products themselves into the in-store environment," Brown says. Thriving at RetailSince Brown was brought on to lead LG Mobile's trade marketing group in 2004, the company's in-store budget has increased every year, with a significant increase between 2009 and 2010. While not every product receives advertising support, each one does need support at retail. The trade marketing team has also expanded, thanks to more retail partners, more product launches and a greater emphasis on the store."We have a two-pronged strategy of how we approach in-store marketing," Brown says. "One is to build credibility and also build affinity for the LG brand through the retail salespeople, but also to support the point of sale with literature, with P-O-P materials, and even human resource support in order to help the sell-through process."LG Mobile's retail partners range from big box stores like Best Buy to freestanding carrier stores to mall kiosks. In many of these locations, particularly the independent stores, consumers "had to make a purchase decision and sign a two-year contract based on interaction with a dummy phone," Brown says. The solution was a new LG "play land," where shoppers can "interact with live product, learn about the product and be able to make a better purchase decision without that frustration of not being able to touch the phone."Now in 125 independent AT&T and Verizon stores, the "play land" includes a large wall unit and an island display, both of which merchandise live phones and play videos that describe product features. The units are fully customizable and regularly updated to support new products. The AT&T units have red headers and white side panels to match their color scheme, while the Verizon units feature black headers and red side panels."You could go into one store and go into the next store a mile away and they could be totally different. It's based on what's in that store," Jones says. The units are provided at no cost to the stores, and LG product specialists -- along with installers from Cicero, Ill.-based AMD Industries, which produced the displays -- train the salespeople to maintain and update them. "Most people just give them the display and it's over," Brown says. "We want a continuous, ongoing relationship."Video screens on the wall units are triggered when a phone is picked up to play content related to that phone, while the island units play a video loop. The result: A store-within-a-store that separates LG Mobile from the competition."Obviously we've seen LG sales increase, but what makes us most happy is we've seen the overall sales of those stores increase," Brown says. "More people are making that purchase due to the fact that they have this display." The company is currently testing the concept on endcaps in three Fry's stores to see how it works within a national retailer.For stores that can't support such a large display, LG Mobile uses various pieces from temporary counter cards to updatable floorstands. Another recent in-store initiative, produced by Palo Alto, Calif.-based Concept Designs, features countertop phone glorifiers that come in two heights and can be displayed individually or grouped in a branded tray. The units are designed to support any of LG's handsets and are displayed alongside mounted cards that explain the phones' key features. Stores can choose how many of each piece they want, and an optional riser allows them to be merchandised on the counter or attached to a slatwall.The company has also used touchscreen technology, in-store videos, sound chips and motion sensors to draw attention to its phones at retail. In addition to AMD and Concept Designs, the company works with Rapid Displays, Chicago and Union City, Calif., for temporary and permanent displays; Daehan A&C USA, Gardena, Calif.; and United Displaycraft, Des Plaines, Ill., for permanent P-O-P.In collaboration with its vendors, LG Mobile tries to limit the size of packaging and use more sustainable materials and inks on its displays. The company attends trade shows to stay educated on the latest advancements in this area. "We base the materials on how long the life of the piece is instead of just making it beautiful," Jones says. "We rely on our partners to come up with the new technologies and the new available products."