Samsung Electronics Company: Global Marketing Operations

Samsung History up to 1999Is a Korean firm born in 1938 as a company that

agricultural products.In 1969 Samsung Electronics Company was found.In 1970 it entered into semiconductor business.In 1980 Samsung Formed Television Division

Samsung History after 1999Mr. Eric Kim Become the executive Vice President of global

marketing.In 1999 Global Marketing Operation (GMO) headquarter in

Seoul , Korea was built.Between 1998 to 2003 about 36 billion dollar invested for

new chip factory and TFT-LCD.In 2005 Samsung became the worldwide investor in

semiconductor business.In 2006 formed a JV with Sony for LCD panel

Financials AchievementsIn 1997 Samsung debt was $15 billion but

they have managed it to reduce to $4.2 billion in 2002.

In 1999 Samsung’s net profit $2.8 billion on Total sales $28 billion while in 2002 net profit $5.9 billion over total sales $44.6 billion.

In 2002 Market capitalisation was around $41 billion while in 2012 same has crossed $200 billion mark.

Corporate Turnaround StrategyTo become a world known brand over their rivals Sony &

Apple.

Investing in R&D – Started 12 manufacturing units in China, R&D Center in India.

Main Emphasize on Core manufacturingUnlike Sony & Apple whose proprietary business was

Software, music, movies Samsung focused on hardware Innovation of new age digital technology

Corporate Turnaround StrategyNew customized product every year, product

diversification well differentiated over its competitors.

Market Driven Change-New initiatives –for focus on customer insight in development of new product rather than copying competitors products

StrategyDigital Vision: “A Company that leads the digital convergence

revolution”Brand power.

High-margin productsCreate value chain that integrates competencies of all areasCustomer and market oriented

Global network by functionPerformance evaluation and compensation system

Marketing ImplicationChange in internal perception about

marketingDivision of three strategy teams: marketing,

regional and productMDC: New initiative to develop new products

closer to customer.Increase effort for advertising campaign with

slogan of “DigitAll everyone is invited”Strong sponsorship activities(ie olympic

games, football teams and the matrix reloaded)

CMO’s RoleIn 1999 established Global Marketing Operations [GMO]

responsible for developing corporate marketing program for International Markets under leadership of Mr. Kim.

They have three major teams in GMO

1.Marketing Strategy Team

2.Regional Strategy Team

3.Product Strategy Team

CMO’s RoleEarlier Samsungs marketing budgets are

associated with their sales figure but Mr. Kim introduced M-Net. M-Net program is systematic approach for allocation marketing budgets to get higher investment returns.

In 2002 Mr. Kim launched “DigitAll” Campaign which has resulted tremendous Brand Visibility globally.

Under Mr. Kim’s leadership they have entered in new markets.

Product BreadthSamsung differentiates from its competitor by providing different product categories.

Semiconductors : DRAM, SDRAM, flash memory, and hard drivesDigital displays : LCD displays, Plasma displays, and OLED displaysHome Electronics : TVs, DVD players, Blu-ray players, home cinema systems, set-top boxes, and projectors

Product

Mobile devices : mobile phones, MP3 players, digital cameras, and camcorders

Computing products : monitors, laptops, UMPCs, CD and DVD drives, laser printers, and faxes machine; and

Home appliances : refrigerators, washing machines, microwaves, ovens, vacuum cleaners, and air conditioners.

Swot AnalysisStrength•Ability to refresh product line•Strong position in emerging markets•Hardware and mobile brand•Digital Convergence•Huge R&D Investment•Product Breadth

Threats•Obsolete Product•Risk of cannibalization•Patent loosening

Weakness•Weak customer perception in western world•Lack of deep customer segment•No Software and content oriented•Excessive vertical integration

Opportunity•Outsourcing of non core activities•Reallocation of marketing budget

CompetitorsSince Samsung was a pioneer in manufacturing TV

displays, in both LCD display and big-screen Tvs category the company is market leader

Samsung was the first mover in the LCD research field and it introduced 52 inch flat screen.

Samsung market Position by category

Threat of entry and substitutes

Barriers to entry in the digital industry are high since enormous initial investments are required particularly in R&D.

Analog technology is a substitute, ie much lower cost however now a days this has become obsolete.

Brand PositioningSamsung has changed from a cheap OEM to a “high

value added product provider.With this new market strategy, Samsung started to benefit

with higher margins and exploiting its brand name.

Brand Positioning

Country Brand PositioningUS Turning point stage

RUSSIA People’s Brand

CHINA Advanced stage

INDIA Very Strong

SOUTHERN EUROPE Strong

NOTHERN EUROPE Weak

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