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A dossier on the brand Samsung

Product : Samsung Mobile

Submitted to Prof Srinivas Govindrajan on 10-Aug-2013

Prepared by

Anirban Ghose (A13001)

Ayan Das (A13005)

Debayan Datta (A13006)

Saunak Basu (A13015)

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What it includes

Sl. No.

Topics Page No.

1 Early history of the brand and its evolution over time 3

2 Initial positioning and subsequent repositioning 7

3 Advertising, sales promotion and segmentation

strategy followed by the brand

10

4 Analysis of product and generic competition to the

brand

15

5 Strategies adopted over time by the brand to tackle

competition or prime market expansion

17

6 Distribution strategy followed by the brand 23

7 Conclusions regarding the future directions for the

brand

25

8 Bibliography 26

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[ 1 ] Early history of the brand and its evolution over time

From its inception as a small export business in Daegu, Korea, Samsung has grown to become one of the leading electronics

companies of our planet, specialising in a wide range of digital applications. Today Samsung's innovative and top quality products and

processes are world recognised. Let us see how Samsung managed to

get up there. Let us have a journey through time.

Samsung’s Beginnings (1938-1969)

On March 1, 1938, founding chairman Byung-Chull Lee started a business in Taegu, Korea, with 30,000 won

Diversifying in Industries and Electronics (1970-1979)

In the 1970s, Samsung laid the strategic foundations for its future growth by investing in the heavy, chemical and petrochemical industries

Entering the Global Marketplace (1980-1989)

Samsung's core technology businesses diversified and expanded globally during the late 1970s and early 1980s

Competing in a Changing Tech World (1990-1993)

The early 1990s presented tremendous challenges for high-tech businesses

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Becoming a Global Force (1994-1996)

In the mid-1990s, Samsung revolutionised its business through a dedication to making world-class products, providing total customer satisfaction and being a good corporate citizen – all under the vision of 'quality first.'

Advancing the Digital Frontier (1997-1999)

Despite the 1997 financial crisis that affected nearly all Korean businesses, Samsung was one of few companies that continued

growing, thanks to its leadership in digital and network technologies and its steady concentration on electronics, finances and related services

Pioneering the Digital Age (2000-Present)

The digital age has brought revolutionary change – and opportunity – to global business and Samsung has responded with advanced technologies, competitive products and constant innovation

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Below are some of the statistics about the phones produced back then

in regard to the ones from today through Infographics.

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[ 2 ] Initial positioning and subsequent repositioning

It does not require the genius of a rocket scientist to recognize that

branding is the lifeblood of any corporation. Samsung’s association

with the Olympics helped the company increase its brand visibility and

brand recall among its consumers worldwide. The company was ranked

as the fastest-growing brand in the world by Interbrand.

Samsung’s approach is holistic reaching the world customer. It created

its branding in multiple ways, ranging from traditional adds to

billboards, racing, Olympic games, cricket matches, marathons. In

short, wherever it saw the crowd, it communicated Samsung message

by presenting itself as a leader of innovation with affordable price.

Successful branding is all about establishing a long-term vision and

crafting the company’s operations to meet that objective. The words

“Samsung Electronics” were written in English so that it would be easy

to read and remember worldwide. The logo was shaped elliptical

representing a moving world– symbolizing advancement and change. It

was this sort of huge investment where millions saw the Samsung’s

message. Their brand remained in the forefront of millions of people

giving them an edge over its competitors. It is no surprise that

Samsung’s brand building strategy overtook its competitors in less

than the expected time.

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Strategies Adopted

Changing Brand image

Tacking brand repositioning cost as long term investment

Proactive measures from reactions from competitors

Renewed pricing strategies

Focus on R&D and innovation

Extensive market study and Data Analysis

Positioning attributes

1. Preferred good internet access

2. Long battery life

3. Ease of user

4. Camera and touchscreen

5. Fast and good speakers

Brand Communications

Mass media advertising, multidimensional event sponsorships, product

placement and the Samsung experience Gallery

Positioning Statement

To cater mobile professionals who need to be always turned with the

ever changing technology and style, Samsung is the ultimate solution

that gives you user friendly, cost effective, stylish and innovative

products to stay connected with the fast moving world.

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Vision 2020 of Samsung

As part of this vision, Samsung has already mapped out a plan for

reaching $400 billion in revenue and becoming one of the world’s top

five brands by the year 2020. To this end, Samsung has also

established three strategic approaches in its managements :

CREATIVITY

PARTNERSHIP

TALENT

Brand Association

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[ 3 ] Advertising, sales promotion and segmentation

strategy followed by the brand

Advertising is intrinsic to a product whereas Sales Promotion is not.

Samsung carried out a vast plethora of advertising and sales

promotion by taking up the following initiatives:

Launch of Team Samsung campaign. Also brought about the

Samsung Cup to showcase the biggest cricketing spectacle

involving India and Pakistan in 2004

Apart from cricket, Samsung sponsored the Indian contingent for

both the Olympics and the Asian games. It also ran training

programs for a lot of Indian upcoming athletes under the Olympic

Ratna banner.

Samsung helped in bringing the Olympic torch relay to India, an

initiative for the first time

The World Cyber Games, regarded as the Olympics of the cyber

world, is also brought about by Samsung, a yearly event

Considering a series of innovative below the line activities,

Samsung collaborated with noted painter Satish Gujral, for his

paintings to be available as downloads on Samsung mobile

phones.

Product placement was carried out in popular television soaps

like Jassi where Samsung products were set in lifestyle

environments

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Samsung ran a Kitchen On Wheels program where

demonstrations were carried out with regards to microwave

cooking and its advantages

Samsung branded its products as superior technology and

environment friendly ones specially after their launch of “Bio”

range of products and “Silver Nano Health System” for electronic

appliances like refrigerators and air-conditioners

Launched a marketing campaign for Flat televisions, “Duniya Hain

Gol, TV Flat” along with attractive exchange offers

Product Customization for India

Keeping into account the Indian market, Samsung took a few steps in

further customizing their products. They are as follows:

Samsung set up a “usability lab” at the Indian Institute of

Technology in Delhi, to customize some of their products to meet

the specific needs of Indian consumers. This industry-institute

partnership is helping Samsung to analyze and study customer

response in aspects of product design, including aesthetics,

ergonomics and interface.

Through its research done on consumer preferences in India,

Samsung concluded that Indian consumers want more sound

oriented products. Thus, Samsung televisions in India have a

higher sound capacity than their foreign counterparts

For the semi- automatic segment of Samsung washing machines,

Samsung introduced a feature called “Super Dry”, an initiative for

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the first time in India. This probably took into account the general

humidity levels of the Indian subcontinent

They also have a “memory restart” that takes care of the

frequent power failures in India

Promotion Tools

The main consumer promotion tools are as follows

Samples They are offers of a trial amount of a product. It consists of

inviting prospective purchasers to try the product without cost or at a

lower cost in the hope that they will buy the product. Samples may be free or discounted.

Coupons

Coupons are certificates that give buyers a saving when they purchase a specified product. Coupons can be mailed, placed in advertisements or included with other products

Rebate

Rebate is also known as cash refund offers. Rebates are offers to refund part of the purchase price of a product to its customers who send a proof of purchase to the manufacturer. These are like

coupons except that the price reduction occurs after the purchase and

not at the point of sale.

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Price packs

Cents-off deals or price packs offer consumers savings by way of

reducing prices that are marked by the producer directly on the

package.

Premiums

These are the goods offered either free or at a low cost as an incentive

to buy a product. Premiums may be in-pack or on-pack (outside the

pack).

Prizes

They are offers of chance to win something such as cash, trips or

goods by luck or through extra efforts. Contests of talent and

sweepstakes or draws the most popular prize offering promotions.

Tie-in promotions

Tie-in promotions involve two or more brands or companies that team

upon coupons, refunds or contests to increase their pulling powers.

Cross promotions

Cross promotions involve using one brand to advertise non-competing

brand.

Advertising Specialities

These are useful articles imprinted with an advertiser’s name, given as

gifts to consumers

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Patronage Rewards

They are cash or other awards for the regular use of company’s

products or services. They are values (in cash otherwise) that are

proportional to one’s patronage of a certain vendor or a group of

vendors. They aim at building brand loyalty.

PoP Promotions

Point of purchase (PoP) includes displays and demonstrations that take

place at the point of purchase or sale.

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[ 4 ] Analysis of product and generic competition to the

brand

Samsung Mobile Phones SWOT Analysis 2013

STRENGTHES

1. Hardware integration with many open source OS and

software

2. Ability to market the brand through Innovation, Design and

multiple Sponsorships

3. High Market Share in mobile phones and its continual

Growth ( 2nd place in smartphones sales )

4. Excellence in Engineering and producing hardware parts

and consumer electronics

5. Well Diversified and Differentiated product line to meet

changing customer needs

6. Practice the Good Leadership Theory

WEAKNESS

1. Patent infringement

2. Too low profit margin

3. Main competitors are also largest buyers

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OPPORTUNITIES

1. Growing India’s smartphone market

2. Growing mobile advertising industry

3. Growing demand for quality application processors

4. Growth of tablets market

5. Product variation in existing product line

6. User friendly technology

THREATS

1. Rapid technological change

2. Price wars

3. Saturated smartphone markets in developed countries

4. Declining margins on hardware production

5. Macroeconomic issues

6. Low cost competitors in the great China ( Emulation mobile

phones )

7. Legal war with Apple, Nokia

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[ 5 ] Strategies adopted over time by the brand to tackle

competition or prime market expansion

The Generic competitors of Samsung mobile phone are Sony, Nokia, LG

etc.

In 2009, the market share of Samsung was 14%.But in 2012,it was

26%.So It increased by 12 percentage point whereas Nokia had almost

70% share in 2009.But in 2012.it was 23% only.

Samsung’s Key Issues

Though Samsung has continued its success in the mobile phone

business, it faces a number of challenges to keep the growth

momentum in the future. First, competition in the mobile phone market

will become more intense. Lower entry barriers will bring in more

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competitors to the market, and the “digital convergence” will

accelerate the competition even further.

Second, the sustainability of Samsung’s high-end strategy, which was

attributed to Samsung’s brand building, may be in question. Samsung

has achieved high profit margin, which is comparable to that of Nokia,

mainly based on its high price, while Nokia has done so based on its

cost dynamics.

Third, Samsung is highly dependent on foreign companies for core

technologies and modules. For example, it sources core CDMA base-

band chips from Qualcomm and sophisticated camera-phone modules

from Japanese firms.

Fourth, Samsung needs to strengthen its product portfolio in next

generation phones

Strategies Adopted over time by Samsung to tackle competition

The launch of Galaxy 3 smartphone is based on the success of the

Galaxy S II which contributed significantly to Samsung global sales and

making them the largest Smartphone producer today. Samsung made

the best Android phones on the market. From the screen to the

camera to battery life, the Galaxy S3 bested its competitors before

even getting to the litany of software features and customizations.

Samsung's impossibly powerful marketing arm then took those

advantages and trumpeted them on every surface and airwave

possible, and the phone took over the industry. The point to note is the

impact of consumer marketing approach used and an effective tactical

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move to penetrate the mass market with (by right) and very much

niche market of smartphone. The company has significantly changed

the platform of competition in smartphone market, which has been

earlier dominated by Apple and HTC, not to forget the historical

Windows phone like Dopod, HP, Palm, O2 and some others like Nokia,

Sony, Motorola, etc. Samsung crafted their own path which lead to the

indisputable No.1 in smartphone.

They have combined the niche and the mass to formulate the hybrid of

segments which are so resilient in consuming a phone, or perhaps a

tablet. Yes, it is the intelligent and prospector approach in taking such

risk to offer various models as compared to the strategic competitors:

Apple and HTC. This has given the options for consumer to compare

and find the best model to suit their needs and wants. As such, this has

also transformed into a threat to the competitors, not because they

have more models for the consumers, but the delay of purchasing the

competitors' products.

Normally, consumer will have to go through 5 simple stages in

purchasing decision.

1. Identifying the need

2. Searching for information

3. Evaluate the products

4. Purchase decision and lastly

5. Post-purchase evaluation

Samsung strategy is to mainly speculate stage (2), and (3) consumer

purchase decision. Changing Consumer Attitude; the more models with

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similar specifications there are in the market, consumer tends to take

longer time to evaluate the products, due to more information provided

by the producers. If you realize, most models will have pros and cons in

comparing to each other. That way, consumer will try to identify the

'Just-noticeable-differentiation' (JND) of each of the interested

products. Consumer will then notice that many products from different

brands in the market trends to have some form of weaknesses. Brand

will also be associated with such weaknesses or vice versa (similar to

strengths as it would reflect the uniqueness of a particular brand).

When Samsung provide so many models and each tends to show little

differences in terms of specification, consumer would then identify the

JND within the brand, and not towards other brands (because it is

enough for a consumer to read and play with each models within the

Galaxy family). Subsequently, consumer will unconsciously compare the

various Galaxy models and not with other brand.

Recently Samsung seems to have adopted a trend of offering numerous

side models to accompany a new release, such as the Mini, Active, and

Google Edition Galaxy S4s. But what if I told you that the company was

about to take this even further? Samsung Electronics is gearing up for

a change in its smartphone marketing strategy. The technology giant is

actually planning to sell even more models than it currently does, in a

bid to appeal to a broader consumer base. So, the rumours that we’ve

heard about four, or possibly eight, different versions of the upcoming

Galaxy Note 3 appears to be the first of many future ranges which will

offer consumers a broader choice of options within each product line.

But is this really such a good idea considering that the smartphone

market is already ultra-competitive? Do we really need any more

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choice? Samsung certainly seems to think so. Well that’s actually the

point, according to Samsung. The smartphone market is already so

heavily saturated with products, smartphone penetration has already

surpassed 70% in North America, Europe and East Asia, that

manufacturers need to look further afield in order to find new business

opportunities. Emerging markets like South America and Africa are

areas which Samsung would love to break into, but the company

currently can’t compete with the price point of cheaper products

coming from China. To combat this growing problem, Samsung

supposedly intends to attract budget orientate consumers through

product diversification and customized services. In other words,

Samsung wants to offer consumers more choice, and products that fit

with the particular type of market. Their strategy is to maximize the

market share with a number of small hit models, not one single mega

hit model.

Thus Samsung has communicated to the mass that smartphone is not

only for the niche. Now, everyone can be 'Smart', as long as you are

within Samsung "Galaxy".

Samsung’s competitive advantage over its competitors

Technology driven niche products

Strong infrastructure

High investment for Research & Development

Wide range of products

High brand value

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Higher economic scale and scope

Horizontal and vertical integration

Higher yields than most competitors

R&D facility at one single location thus exercising absolute quality

control

Untraditional human resource practices based on meritocracy

and not on seniority

Attractive organizational hierarchy in terms of pay scale,

bonuses and incentives yielding better output

Financially strong, large resources at disposal

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[ 6 ] Distribution strategy followed by the brand

Samsung is so much more than a smartphone-maker. It is a

conglomerate, a manufacturer, and the world's largest chip-maker.

It makes many of the components that go into its smartphones giving it

a cost advantage and allowing it to be much more flexible in terms of

what it produces and when.

There exist various Samsung Enterprise Alliance Distributor programs

that offers

Assistance in training sub channel partners

Provision of sales and marketing collaterals

Technical support and training

Logo for accreditation as Samsung Authorized Sales Partner

(subject to meeting criteria)

Assistance in developing business plans and joint go-to-market

strategies (subject to Samsung subsidiary)

Distribution Channels

Samsung have state-level distribution offices and direct dealer

interfaces which helps the company to launch products as per

consumers’ needs or wants.

Efficient, optimized supply chain partners armed at the right time

with right information adding to the total yield

Samsung has sales and services network all over India and has

more than 650 service points

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Samsung uses innovative logistics solution GLONETS ( Global

Logistics Network Systems ) coupled with ERP systems resulting in

shorter business cycles, reduced inventory levels, low waste and

hence reduces cost

Samsung uses JIT( Just in Time ) approach with 4 RDC( Regional

Dispatch Centre ) installed at India

Samsung has many exclusive showrooms, Shop-in-shops as well as

online purchasing options

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[ 7 ] Conclusions regarding the future directions for the brand

Although Samsung has captured the highest market share in Indian

market, the company had to face a lot of problems. An example in

this case would be the Apple Samsung conflict where Apple accused

Samsung of copying their designs and features. This blame damaged

the reputation of the brand all over the world but still Samsung is

India’s favourite brand whether it is electronic consumer goods or

smartphones. It means despite of problems, Samsung has

successfully positioned itself as a quality brand in the mind of their

consumers.

So what is Samsung’s Future?

To survive in the market she needs

1. Time

2. Resources

Apple and Samsung are involved in ongoing copyright disputes in 10

countries, as competitions in the smartphone sectors grows even

more intense.

If the injunction of Samsung products could not be lifted, it may create

a significant impact on its earnings.

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[ 8 ] Bibliography

http://www.google.co.in

http://www.scribd.com/doc/29594373/Project-on-Samsung

http://www.scribd.com/doc/36506933/Final-Report-Samsung-

Mobiles

http://www.slideshare.net/vvikaschauhan/marketing-strategy-

of-samsung-in-india

http://www.slideshare.net/vvikaschauhan/marketing-strategy-

of-samsung-in-india

http://www.varindia.com/Jan_BrandBuilding.htm

http://www.businesswire.com/news/home/20120528005124/e

n/Research-Markets-Analysis-Samsungs-Competitiveness-2012

http://www.slideshare.net/gaurav127/samsung-mobile-

competitor-s-analysis

http://www.slideshare.net/zesale/samsung-re-positioning-

strategy

http://www.samsung.com/uk/aboutsamsung/corporateprofile/

history.html

http://www.slideshare.net/tiniljoseph/samsung-mobiles-and-

its-history

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