LG Electronics drops C&W as handset sales stutter

LG Electronics has parted company with Cohn & Wolfe and is on the hunt for an agency to arrest its recent decline in the mobile handset market.

The South Korean firm launched the review of the £300,000-a-year consumer technology account as part of a rethink of its entire UK comms. The move follows a dramatic fall in group profits – LG is now fifth in the handset market share league, behind Sony Ericsson.

C&W director Charlotte Arrowsmith, who has led the account since the agency took the business from the then Herald Communications last year (PRWeek, 1 October 2004), insisted the parting from LG had been by 'mutual agreement'.

LG head of UK marketing Connie Park, who appointed C&W to position the company's UK brand and run its press office, did not return calls. But LG marketing intelligence manager Paul Dunn said the company was using two agencies on a trial basis and tendering the account. He declined to name the firms.

C&W was responsible for promoting LG's product launches and raising awareness of its sports sponsorship in cricket, motor racing, snooker and rugby.

As well as mobile phone handsets, LG makes white goods and household appliances, but has repositioned itself as a producer of higher tech products such as plasma and LCD screens and IT equipment.

In October, LG said group net profit for the quarter to 30 September had almost halved to £87m from £170m in 2004. It blamed lower
margins from mobile phones and other digital consumer products.
The global handset market is dominated by Nokia with 32.6 per cent and Motorola, which has 19 per cent.

Technology research firm Gartner's said LG's market share for the third quarter of 2005 had fallen to 6.5 per cent from 6.7 per cent in 2004.

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