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SAMSUNG ELECTRONICS: Global Marketing Operations

Group 4:Alok GuptaModak PriySatendar TokasSudeep Kumar KunduVineet Dixit

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INTRODUCTION1938 : Samsung conglomerate was founded and produced agricultural

products

1969 : Samsung Electronics Co.( SEC) was founded as a low cost manufacturer of black and white televisions.

1970: Samsung acquired semiconductor business thereby setting a stage for future growth in Electronics.

1980: Samsung became a more comprehensive electronics company– Started producing commodity products like TVs , VCRs and

Microwave Ovens.– Sold their products to OEMs.– The mission at this time was to pay emphasis on “Manufacturing

Quality and Technical Leadership”.

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1993 : Samsung started its first imitative of building a Brand Name as a long term goal towards profitability by introducing the “New

Management Initiative”.

– Major focus: To revamp the initial image of the company from “a cheap OEM” to “a high value added product provider” focussing on Innovation, Premium Product and Brand Value.

2002 : The company recorded net profits of $5.9 billion on sales of $44.6 billion.

2003 : The company was one of the most widely held stocks among all emerging market companies.

Mission And Objective:

“The companies mission at this point of time was to become one of the top 10 global brands by 2005 contemplating the companies transformation from an Also-run into a Blockbuster Brand.”

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Products ( in 2003)Home Multimedia Mobile Multimedia

Personal Multimedia Core Components

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Question 1

What are the ingredients of SEC’s corporate turnaround strategy? What is the implication for marketing?

Answer 1

Ingredients of SEC’s corporate turnaround strategy :

VERTICAL INTEGRATION :

-Manufacturing as a core competency

-To make the plants competitive by forcing them to compete with outside companies for internal business

-To cut the cost to its minimum

-Flexible plant locations and R&D facility

-To avoid the commoditization trap SEC customized the production of its memory chips which resulted in the increase of its average prices 17% above industry levels

HARDWARE FOCUS:

-Developing no proprietary software and content (music, movies and video games) unlike its rivals Apple and Sony

-Major focus was on hardware and collaboration with the content providers.

PRODUCT BREADTH:

-Samsung’s product diversification differentiated the company from its competitors.

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Product Range

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1113.9

3.84.8

Semiconductor Telecommunications

Digital Media Digital Appliances

Other

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DIGITAL PRODUCT INNOVATION :-Transition from Analog to Digital technology- New innovative products - Setting new standards for quality performance and award-winning design-Propelled “Sashimi Theory” where new fresh technological products are sold at higher prices but decline later

DIGITAL CONVERGENCE :- Merging of different technologies into one major product- Multiple technologies linked by one major network

IMPLICATIONS FOR MARKETINGMarket Segmentation-Samsung segmented its products to all ranges from middle segment to higher classes with a goal to reach the target in all product lines

Product Differentiation- Samsung launched wide range of new innovative products catering to its varied segments

Technology Competence- Samsung focussed on Digital technology as its core competence.

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Question 2 How strong is the Samsung brand?  Can Samsung pass Sony and become a top ten global brand?

Answer 2 Samsung brand was at different stages of development in different country market :

COUNTRY WISE SPECIFICATION

USA : Here the Brand was at a turning point stage where Awareness and Brand Loyalty were still below those of the first tier brands like Sony .

Consumers viewed the brand as a Reliable, Upcoming and Credible w.r.t. Sony that had an image of being an Established and a Matured Brand.

Europe : Brand was stronger in Southern part as compared to Northern part .Europeans were loyal towards their own Brands and fragmentation of retail distribution made the situation more worse for Samsung to generate

profitability.

Russia : Samsung had an image of being “Peoples Brand” but the motive of building a product innovator and market leader was still a distance away.

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China : Brand image of Samsung in China was into a transition phase heading towards the advanced stage. Samsung had captured one third of the Chinese market but profit margins were slim.

India : India was an upcoming market opportunity with immense potential in value added reselling of software products. The company became a major supplier of Software products and had a Brand recognition better than Inteland Microsoft.

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FCBs STUDY : STRENGTH AND WEEKNESS OF SAMSUNG BRAND

COUNTRY STRENGTH WEAKNESS

China Delights Me Perfect fit

USA Price Based ,Cell phone category

Perfect fit ,delights me

UK follows the leader Perfect fit ,delights me

Hong Kong follows the leader Perfect fit ,delights me

Germany Follow the Leader Perfect fit, delights me

Brazil Reliant, delights me and caring

Perfect fit

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PRODUCT CATEGORY WISE POSITION OF SAMSUNG

Category Global Market Share

Samsung Rank Competitors

Big Screen TVs 32% 1 Sony(25%),

Mitsubishi(25%)

Cell Phones 10% 3 Nokia(36%),Motorola(15%)

Flash Memory 14% 2 Intel(27%),Toshiba (11%)

LCD Display 18% 1 LGPhillips(17%)

MP3 Player 13% 3 Sonicblue(18%), Apple(17%)

DRAM Chip 32% 1 Micron(17%)

DVD Player 11% 3 Toshiba(15%), Sony(14%)

Microwave Oven 25% 1 LG(22%), Galanz(19%)

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SONY VS SAMSUNG:COUNTRY WISE COMPARISON

BRAZIL CHINA GERMANY

ATTRIBUTE

SAMSUNG

SONY

Perfect Fit 95 127

Delights Me 102 92

Caring 103 94

Reliant 127 48

Follow the Leader

100 109

Price Based 86 81

Non-Committal

101 79

ATTRIBUTE

SAMSUNG

SONY

Perfect Fit 109 131

Delights Me 150 153

Caring 79 73

Reliant 86 132

Follow the Leader

67 64

Price Based 98 131

Non-Committal

131 64

ATTRIBUTE

SAMSUNG

SONY

Perfect Fit 35 137

Delights Me 96 94

Caring 43 59

Reliant 91 123

Follow the Leader

220 91

Price Based 29 110

Non-Committal

150 89

Exhibit 14 A, B, C

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From the above Exhibits and the Business Week ranking it can be concluded that

– There is an opportunity for Samsung to increase its brand name and beat Sony.

– But to become a Top 10 global brand in the next two years still much more has to be done.

CONCLUSION

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Question 3 As Chief Marketing Officer, what are Kim’s role and responsibilities? How has he built his influence?

Answer 3

Kim’s Roles & Responsibilities :

– To build the Global Corporate Brand image for Samsung across 200 country markets and SEC’s 17 product-focussed business units

– To educate the respective Divisional Managers on the role of marketing and the value of developing and communicating superior solutions for the target customers

– To make all the people in the company understand the essence of the Samsung brand by the use of three words – WOW , SIMPLE & INCLUSIVE

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Kim’s Achievements :

(1) Marketing Organization:

– Kim headed the corporate Global Marketing Operations (GMO) which developed a corporate marketing program for Samsung brand outside Korea. There were three major teams in the GMO - Marketing Strategy Team, Regional Strategy Team and Product Strategy Team each with different responsibilities

– In 2001, under Kim’s leadership, the GMO implemented the initiative to consolidate SEC advertising with a single global agency, Foote, Cone & Belding(FCB) to deliver a consistent brand message worldwide.

(2) Allocation of Marketing Resources –

– GMO recommended to priorities and allocate funds by country and by product category .

– Developed a computer program M-Net to help determine where funds could reap the highest returns

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(3) Market Driven Change ( MDC ) –

– MDC has put greater focus on customer insight into the new product development process.

– MDC initiative revealed that the Samsung brand lacked stature

– With FCB’s help, a new umbrella campaign was launched in 2002 – “DigitAll – Everyone’s Invited” which generated tremendous brand visibility for Samsung

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