• Contractingbusiness 732 Kelly Cutchins

    LGCool Products Backed by a Powerful Brand

    Dec. 1, 2009
    LG is one of those two-letter brand names that consumers immediately recognize: from cell phones to kitchen appliances to flat-screen televisions. Today,

    LG is one of those two-letter brand names that consumers immediately recognize: from cell phones to kitchen appliances to flat-screen televisions. Today, consumers increasingly recognize LG for its air-conditioning products as the North American market becomes more comfortable with duct-free conditioning systems and energy efficiency emerges as an important selling point.

    LG has been in the HVACR business since 1958, when the South Korean company began manufacturing air-conditioners, washing machines, refrigerators and televisions. In fact, LG is known globally for its duct-free air-conditioning systems and is the world's leading manufacturer of air-conditioners. The company was absent from the United States, which had been a traditionally ducted market. That changed about five years ago.

    “This was the last market for LG to enter of what has been a traditionally ducted market,” says Kelly Cutchins, vice president of commercial air conditioning for LG Electronics USA Commercial Air Conditioning division. “We felt that there was enough technical advancement with duct-free systems to enter the U.S. market and this segment is growing significantly every year in the U.S.” Duct-free continues to become known among consumers and within the HVACR industry as a technology that, he says, is “innovative, space saving and flexible and there are a lot of features that come easier with duct-free versus ducted.”

    Despite a growing awareness of ductless technology in the U.S. market, LG recognized that it would have to aggressively market itself throughout the supply chain. LG started with enormous brand recognition and a reputation for quality products with sleek designs.

    They've built on this brand awareness by going to the key influencers: contractors, engineers and wholesale distributors through training programs and a marketing approach that focuses on what makes ductless so popular around the world: easy to use, easy to install and easy on energy.

    Training has been an important component of LG's approach and, its 16,000 square-foot, state-of-the-art LG Training Academy demonstrates this. Opened last December near its Atlanta headquarters, the academy has already trained more than 1,000 contractors, engineers, end users and distributors on its ductless systems. In addition to this impressive facility, LG representatives have worked with more than 1,000 others around the country. “We want to make sure that we have well-informed and well-trained potential customers,” Cutchins says.

    With LG one of the world's leading producers of flat-screen televisions, mobile phones and appliances, its commercial air-conditioner division can harness this brand awareness by partnering with these brands through other ways. “LG has a great brand name, and we're doing everything that we can to take advantage of that,” Cutchins says. This includes working closely with the other divisions on marketing opportunities and trade shows as diverse as HARDI, ComfortTech, ASHRAE and trade shows for the hotel and motel industries.

    For example, LG is the leading brand of hotel televisions, so LG representatives at shows can talk to customers about LG air conditioners. Synergies like these abound. LG also recently announced its corporate sponsorship of NCAA football. If college football fans are true to their respective schools, LG is hoping that they will be true to LG products as well.

    Marketing only takes a company so far, however, and LG is proud of its extensive product line that combines comfort, quality and style. “We've won a lot of awards in the last year, and that is something that has gained a lot of attention,” Cutchins says. From ceiling-mounted to floor-standing systems and from outdoor units to those that hang on the wall as pieces of art, LG boasts an extensive product line. LG also offers high-efficiency, mini-split systems with simultaneous heating and cooling.

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    LG's Art Cool has garnered much of the recent attention — for its capabilities as a ductless air conditioner as well as its originality. Available in a variety of sizes, Art Cool is a wall-mounted air-conditioner under the guise of art — customizable by the user. “It has really gained a lot of exposure and excitement,” Cutchins says of Art Cool. While air-conditioner manufacturers may like their products, market research showed LG that consumers preferred their units to be invisible. “Décor was more important than seeing the window units, and that planted the seed for R&D to start thinking outside the box,” says Jack Mourterot, marketing manager for LG's Electronics USA Commercial Air Conditioning division.

    Over the past year, LG has updated its product line with more energy-efficient products, including higher SEER ratings on its duct-free, multi-split models. “We go hand in hand with the push toward energy efficiency,” Cutchins says. “More and more people are embracing green technology.” Earlier in the year, LG introduced its duct-free, flex-multi model as part of its advanced zoning and climate control solutions for a variety of uses.

    While LG is relatively new in the air-conditioning market in the U.S., the company draws upon 50 years of experience in ductless systems around the world, notes Mourterot. Its air-conditioning division also shares research and development with other product divisions. The compressor technology it uses in air conditioning, for example, also appears in LG washer and dryers.

    LG's 25-story corporate design center in Seoul is the heart of LG's research and development — and it crosses all product lines. Cutchins says the process is akin to a giant funnel where concepts are developed and become refined. “There's a lot of depth there to make sure that we have the right ideas coming through,” Cutchins says. Reflecting the importance of R&D, LG also operates design research centers in Italy, China, the United States, Japan and India.

    LG is committed to its distribution network, and the company says there is a lot of excitement in the HVACR marketplace for its products. LG wants to keep this excitement alive for its distributors so that they feel connected with the products. They invite distributors to training sessions in Atlanta. LG's field representatives have also visited distributor branches around the country and ask the distributors to invite the customers in as well to see LG products and ask questions. Being active and visible with distributors is an important part of the company's strategy. “We're very focused on having our people in the field,” Cutchins says. Three LG regional operations set up around the country enable this high level of distributor support.

    LG recently rolled out a new program to enhance its technical support, ensuring that there is always an LG technical support team within a market area. LG also maintains a toll-free technical support number exclusively for distributors and contractors to connect with LG technical experts who are well-versed in the products. The products are even at the call center so technicians can more easily trouble-shoot and diagnose a problem. There is a separate toll-free number for consumers as well. LG's support of distributors after the sale is very important, Cutchins says. “That's vitally important in this business.”

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    As end users and contractors learn more about the benefits of duct-free systems, there has been an interest among distributors in carrying LG products. “We've seen a lot of excitement around LG, around the brand name,” Cutchins says. And what does LG look for in a wholesaler distributor? Distributors with reputations for adding value to what they sell — a high level of customer service and technical prowess, customer education programs and a commitment to keeping inventory as well as parts and supplies in stock. “We want distributors who are a reflection of what we do well,” he adds.

    LG also maintains three commitments that distributors and their customers can appreciate, and they can be found in any LG office: customer first, think differently and operate ethically. “Those are the three guidelines for LG, and that's how we're approaching the air- conditioning market,” Mourterot says.

    “People feel good about that,” Cutchins says. Especially in the HVACR business where relationships are still very important, LG fits right into a culture that values honesty and hard work. “It's more than having good products. You have to earn their business and do the right thing.”

    LG says duct-free systems are gaining bigger pieces of the market in different parts of the country and for different reasons. In New York City, for example, engineers and architects are increasingly recommending duct-free systems for retrofits and renovations. In California, energy efficiency is the major driver for choosing duct-free systems with utility company programs because of their savings. “We have a broad range of applications across all markets,” Cutchins says.

    Michael Maynard is a business writer based in Providence, RI. He writes frequently on HVACR, construction and architecture issues. Contact him at [email protected].

    LG at a Glance

    LG Electronics USA Commercial Air ConditioningPresident & CEO: Teddy Hwang, President, LG Electronics USA Kelly Cutchins, Vice President, Commercial Air Conditioning, LG Electronics USA Headquarters: Englewood Cliffs, NJ Training Academy: Alpharetta, GA Operations: The LG Electronics Air Conditioning Company is a leading player in the global air-conditioning market, manufacturing both commercial and residential air conditioners and providing total solutions such as home networking (HomNet) and building management solutions (BMS). From consumer and individual units to industrial and specialized air-conditioning systems, LG provides a wide range of products for heating, ventilating and air-conditioning. Through innovation in manufacturing, R&D and marketing, LG has broken its own sales record every year since 2000, securing its position as the No. 1 maker of air-conditioners in the world. CAC Employees: 19 (U.S.); 4,000 (global) Annual Sales: $3.2 billion (global) Major Product Lines: LG's broad CAC product line is lead by the Multi-V Commercial air-conditioning systems, which provide commercial-grade heating and cooling systems that combine high-energy efficiency with substantial installation-cost savings. LG's modern “Inverter Mirror” and “Picture” Art Cool product lines allow homeowners and commercial buildings to transform typical in-room or visible air-conditioning units into a decorative accent while Packaged Terminal Air-Conditioners (PTAC) systems provide ultra-quiet operation in an economical package. Website: www.LGhvac.com Year Founded: 2004

    Best Practice

    Definition and Example: Installation and engineering training for engineers, contractors and technicians on LG's Multi-V technology.

    Significance: LG is committed to providing useful leading-edge training for HVAC professionals. With the right blend of lecture, student interaction and hands-on lab activities, the training experience will prove to be enjoyable, informative and rewarding.

    Benefits: LG's training center enables us to educate hundreds of contractors, engineers, architects and technicians on LG's duct-free technology and variable refrigerant flow.

    Procedure: As part of our curriculum, we provide a variety of courses for engineers, contractors, technicians and air-conditioning sales managers. Attendees have the option of participating in one-day courses and more intensive two-day training sessions where we teach contractors how to install duct-free systems. The training provides hands-on experience with LG's products in diverse situations for full application training.

    People involved: LG training managers.

    Timing: Training programs are conducted year-round.

    Cost: Current courses are provided free of charge. Attendees are responsible for travel and lodging expenses. LG has negotiated some very attractive room rates near the training center. Instructions for accessing the LG rates are provided upon request. See www.LGhvac.com for more information.

    Other considerations: The U.S. market is the largest ducted market in the world. What we try to help contractors understand is how they can provide a very competitive installed offering versus a lot of the traditional types of equipment. We want to arm them with a different solution than what they might have had in the past.

    Contact: Don Fort, national training and quality manager, 678/328-6407; [email protected]