The old target was to be number three in the world, but that is not exactly motivational. It is much better to say ‘let’s be number one’.” If anything holds back Dominic Chambers, the European marketing chief at LG Group, it won’t be a lack of ambition.

Evidently, this confidence is coursing right through the Korean electronic giant. In January, LG unveiled plans to invest 15 trillion won (€9bn) this year – 11.3 trillion won in facilities and 3.7 trillion won in R&D – a 28% increase on 2009. Tellingly, more than half of the facility spend involves fresh LCD lines and advanced goods such as solar batteries and mobile telecoms, while the R&D activity will focus on smart TVs and smartphones and other technology that can dominate the market five to 10 years from now.

At the International Consumer Electronics Show in Las Vegas, also in January, LG launched an avalanche of home entertainment goodies that it hopes will dazzle recession-jaded consumers in the coming year. The fanfare was loudest for three types of 3D-ready products: plasma and LCD TVs and projectors.

Already the world’s number two TV brand, the company aims to increase its global market share in LCD TVs to 15% this year. LG also aims to sell 140 million mobile phones this year – up 20% on 2009 – with a view to becoming the world’s second-largest handset maker by 2012. This would mean usurping compatriot and archrival Samsung, which shifted around 200 million phones in 2009.

It also means strengthening its presence in image-conscious Europe, which accounts for 20% of LG’s total revenues. Although it is currently the number three mobile phone seller and number two in the TV market, Chambers insists: “Europe is the area with the largest potential as our market shares are relatively low compared to elsewhere.”

Getting LG’s brand as buffed as its products though, he acknowledges, presents a sizable challenge. Chambers, was parachuted in from Vodafone 18 months ago as part of wider strategy to make Europe a test bed for its global marketing strategy. At the same time, LG pumped in an extra £75m to its European marketing budget and opened a design centre in London’s Covent Garden for regional R&D. It also opened a Learning Centre in Paris, and now employs 3,000 people across Europe, including at two new factories in Poland.

The LG brand is something of a late-starter in the European market, compared with household names such as Sony and Samsung. It was born in 1995 when the company – which had primarily made products for other firms, since 1958 – changed its name from GoldStar. Since then it has steadily gained share in all of its business areas, which range from phones and TVs to air-conditioning units and home appliances. LG’s Life’s Good slogan and brand identity have been in place since the company was renamed – a consistency that Chambers believes will work in its favour.

The company has continued to increase its European marketing budget year on year, with far slicker TV ads reflecting the new direction. Rather than trumpeting its technology and manufacturing, LG has attempted to follow Samsung and become associated with innovative design and fashion; it collaborated with Prada on what was the first modern touch-screen phone. The company LG is also attempting to become a lifestyle brand in its own right; it recently signed an eight-year sponsorship deal with the UK’s Birmingham’s NEC Arena, now the LG Arena, and became the title sponsor of the International Ski Federation’s Snow-board World Cup, broadcast in more than 80 countries. Other marketing activity has included the LG Style Icon competition, a search for aspiring models to star in an advert for its Secret handset. One initiative close to Chambers’ heart, as a keen fan of Formula One, is LG’s five-year sponsorship deal with the sport. He says F1 represents the peak of technological innovation and style.

Aside from Samsung, which has seduced consumers in recent years with its curvy TVs, LG must also compete with the long-established Sony brand, particularly in the TV market. But with Sony posting consecutive sets of poor results, Chambers thinks LG can make headway:“Sony still has a strong brand, but the industry would say that it has kind of tread water over the last three years or so in terms of innovation and investment into R&D. And its market share has gone backwards in that period.”

European practices are also shaping LG’s management style. Unlike Samsung, which tends to bring in Korean suits, LG has been through a period of building a European management base. “If you go back five years, there was almost no Western management in LG. Now there are six Westerners on the management board, and 13 chief operating officers in Europe,” says Chambers.

That is not to say LG wants to turn its back on its heritage. It is extremely proud of being one of the three exporting companies, along with Samsung and Hyundai, that helped build the Korean economy in a matter of decades. LG Group president Koo Bon Moo recently said LG’s investment in the future also signals the revival and restoration of the Korean economy. Life seems to be good in regards to the company’s balance sheet too. LG Group last year reported third quarter earnings of 13.9 trillion won (€8.7bn), the highest in its history, despite the worst global recession in recent memory.

Consumer electronics analysts believe the most challenging arena for LG in Europe will be the cutthroat mobile phone market. Even before Google enters the fray, market leader Nokia is engaged in a fierce battle with Apple’s iPhone, which has 24% of the smartphone market, compared to Nokia’s 46%, despite the iPhone only having been around for three years. Deepening competition in smartphones and the higher won currency means LG is expected to see its mobile phone operating profit margin dropping to around 2% in the fourth quarter from 8.8% in the third quarter, weighed down by marketing costs, inventory disposal and investments to beef up the smartphone business. LG said on 13 January that it sold about 33 million mobile phones in October– December versus 25.7 million a year earlier.

Kenny Fraser, partner and technology expert at PricewaterhouseCoopers, agrees that perception is a big hurdle for LG in Europe, particularly when it comes to mobile phones: “Their market position is as a slightly unreliable alternative to the other big brands. Nokia might be more expensive, but people are familiar with it and they do not necessarily have the confidence that everything will go smoothly if they buy an LG phone. It’s a challenge of reputation.”

Francisco Jeronimo, an analyst at market intelligence company IDC, acknowledges that LG has a tough battle ahead but feels the sheer number of smartphones it aims to launch – 13 in all – will help it to grow its overall share of the European mobile market from 11% to up to 14% by the year-end, consolidating its position as number three in the market. “They have already picked up some of the share that was Motorola’s and, with Sony Ericsson likely to continue losing money and share, there are opportunities for LG to grow in Europe,” he says.

More encouragingly, the TV set market is the only consumer electronics business predicted to actually grow this year, with 3D models expected to get a major bounce thanks to the decision by FIFA to film some of this summer’s World Cup tournament in 3D. The company also high hopes for its web-enabled TVs, which allow consumers to view video-on-demand on a big screen instead of their PCs. Also in the pipeline is a flexible electronic display, LG’s contribution to the next generation of e-readers.

“Marketers can get lost in data, and need to refocus on emotional attraction,” says Chambers. ”Great brands in the consumer space all have that.”