Samsung Electronics: Global
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Transcript of Samsung Electronics: Global
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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