SHRI CHINAI COLLEGE OF COMMERCE AND ECONOMICS ANDHERI (EAST), MUMBAI-400 069 BACHLOR OF MANAGEMENT STUDIES
PROJECT REPORT ON “MARKETING STRATEGY OF SAMSUNG”
SUBMITTED BY PINAK VARU TYBMS B (SEM. VI)
UNDER THE GUIDANCE OF PROF.SHIBU SINGH
SUBMITTED TO UNIVERSITY OF MUMBAI ACADEMIC YEAR 2012-2013
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DECLARATION I PINAK P VARU, a student of T.Y.BMS Semester VI, during the academic year 2012-2013 studying at SHRI CHINAI COLLEGE OF COMMERCE AND ECONOMICS, hereby declare that the work done on the project entitled ―MARKETING STRATEGY OF SAMSUNG‖ is true and original to the best of my knowledge.
DATE:-___________
___________________________ SIGNATURE OF THE STUDENT
CERTIFICATE I Prof. SHIBU SINGH, hereby certify that PINAK VARU of SHRI CHINAI COLLEGE OF COMMERCE AND ECONOMICS, of TY BMS has completed his project on ―MARKETING STRATEGY OF SAMSUNG‖ during the academic year 2012-2013. The information submitted is true and original to the best of his his knowledge. knowledge.
____________ __________________ ___________ _____ SIGNATURE OF PROJECT GUIDE
_________________________ SIGNATURE OF PRINCIPAL
_____________ ___________________ __________ ____ SIGNATURE OF EXTERNAL EXAMINER
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ACKNOWLEDGEMENT During the perseverance of this project, I was supported by different people, whose names if not mentioned would be inconsiderate on my part. I would like to extend my sincere gratitude and appreciation to Prof. SHIBU SINGH who initiated me into the study of ―MARKETING STRATEGY OF SAMSUNG‖. It was indeed been a great experience working under her during the course of the project for her invaluable advice and guidance provided throughout this project. I also owe my sincere gratitude to Dr. Mrs. MALINI JOHRI, principal of our college. I would also like to give my sincere gratitude to all my college librarian staff because of whom I am able to complete my dream project.
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INDEX
CONTENT
PG.NO
COVER PAGE
I
DECLARATION
II
CERTIFICATE
II
ACKNOWLEDGEMENT
III
EXECUTIVE SUMMARY
IV
TABLE OF CONTENT Chapter
Particulars
No.
Page No.
1.
INTRODUCTION
5-9
2.
RESEARCH METHODOLOGY
10
3.
COMPANY PROFILE
11-16
4.
ABOUT SAMSUNG
17-46
5.
AFTER SALES SERVICE AND FUTURE
47-59
PROSPECTS 6.
FINDINGS AND SUGGESTIONS
7.
CONCLUSION
8.
QUESTIONNAIRE
9.
BIBLOGRAPHY
60-65
66 67-68 69
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Chapter 1 INTRODUCTION
1.1
Definition
1.2
Developing Marketing Strategy
1.3
Types of strategies
1.4
Strategic Model
1.5
Real-Life Marketing
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INTRODUCTION 1.1 Definition Marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage.
1.2 Developing a marketing strategy Marketing strategies serve as the fundamental underpinning of marketing plans designed to fill market needs and reach marketing objectives. Plans and objectives are generally tested for measurable results. Commonly, marketing strategies are developed as multi-year plans, with a tactical plan detailing specific actions to be accomplished in the current year. Time horizons covered by the marketing plan vary by company, by industry, and by nation, however, time horizons are becoming shorter as the speed of change in the environment increases. Marketing strategies are dynamic and interactive. They are partially planned and partially unplanned. Marketing strategy involves careful scanning of the internal and external environments. Internal environmental factors include the marketing mix, plus performance analysis and strategic constraints. External environmental factors include customer analysis, competitor analysis, target market analysis, as well as evaluation of any elements of the technological, economic, cultural or political/legal environment likely to impact success. A key component of marketing strategy is often to keep marketing in line with a company's overarching mission statement. Besides SWOT analysis, portfolio analyses such as the GE/McKinsey matrix or COPE analysis can be performed to determine the strategic focus. Once a thorough environmental scan is complete, a strategic plan can be constructed to identify business alternatives, establish challenging goals, determine the optimal marketing mix to attain these goals, and detail implementation. A final step in developing a marketing strategy is to create a plan to monitor progress and a set of contingencies if problems arise in the implementation of the plan.
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1.3
Types of strategies
Marketing strategies may differ depending on the unique situation of the individual business. However there are a number of ways of categorizing some generic strategies. A brief description of the most common categorizing schemes is presented below:
Strategies based on market dominance - In this scheme, firms are classified
based on their market share or dominance of an industry. Typically there are four types of market dominance strategies: o
Leader
o
Challenger
o
Follower
o
Nicher
Porter generic strategies - strategy on the dimensions of strategic scope and
strategic strength. Strategic scope refers to the market penetration while strategic strength refer s to the firm‘s sustainable competitive advantage. The generic strategy framework (porter 1984) comprises two alternatives each with two alternative scopes. These are Differentiation and low-cost leadership each with a dimension of Focus-broad or narrow.
o
Product differentiation (broad)
o
Cost leadership (broad)
o
Market segmentation (narrow)
Innovation strategies - this deals with the firm's rate of the new product
development and business model innovation. It asks whether the company is on the cutting edge of technology and business innovation. There are three types:
o
Pioneers
o
Close followers
o
Late followers
Growth strategies — in this scheme we ask the question, ―How should the firm
grow?‖ There are a number of different ways of answering that question, but the most common gives four answers:
Horizontal integration
Vertical integration
Diversification 7|Page
Intensification
A more detailed scheme uses the categories
Prospector
Analyzer
Defender
Reactor
Marketing warfare strategies - This scheme draws parallels between marketing strategies and military strategies.
1.4
Strategic models
Marketing participants often employ strategic models and tools to analyze marketing decisions. When beginning a strategic analysis, the 3Cs can be employed to get a broad understanding of the strategic environment. An Ansoff Matrix is also often used to convey an organization's strategic positioning of their marketing mix. The 4Ps can then be utilized to form a marketing plan to pursue a defined strategy.
There are many companies especially those in the Consumer Package Goods (CPG) market that adopt the theory of running their business centered on Consumer, Shopper & Retailer needs. Their Marketing departments spend quality time looking for "Growth Opportunities" in their categories by identifying relevant insights (both mindsets and behaviors) on their target Consumers, Shoppers and retail partners. These Growth Opportunities emerge from changes in market trends, segment dynamics changing and also internal brand or operational business challenges. The Marketing team can then prioritize these Growth Opportunities and begin to develop strategies to exploit the opportunities that could include new or adapted products, services as well as changes to the 7Ps.
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1.5
Real-life marketing
Real-life marketing primarily revolves around the application of a great deal of commonsense; dealing with a limited number of factors, in an environment of imperfect information and limited resources complicated by uncertainty and tight timescales. Use of classical marketing techniques, in these circumstances, is inevitably partial and uneven. Thus, for example, many new products will emerge from irrational processes and the rational development process may be used (if at all) to screen out the worst non-runners. The design of the advertising, and the packaging, will be the output of the creative minds employed; which management will then screen, often by 'gut-reaction', to ensure that it is reasonable. For most of their time, marketing managers use intuition and experience to analyze and handle the complex, and unique, situations being faced; without easy reference to theory. This will often be 'flying by the seat of the pants', or 'gut-reaction'; where the overall strategy, coupled with the knowledge of the customer which has been absorbed almost by a process of osmosis, will determine the quality of the marketing employed. This, almost instinctive management, is what is sometimes called 'coarse marketing'; to distinguish it from the refined, aesthetically pleasing, form favored by the theorists.
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Chapter 2 Research Methodology Marketing Research
Marketing research is the function, which links the consumer, customer and public to the marketer through information. Information used to identified and define marketing opportunities and problems: generate, refine and evaluate marketing action, monitor marketing performance, and improve understanding of market as a process. Marketing strategies of Samsung vary in their specific objectives. They may be used to correct new customer, to reward loyal customer‘s ad to increase the repurchase rates of occasional users. Sales promotion usually targets brand switchers because non-users of other brands do not always notice a promoting.. Sources of Data
In this study the for most data collection instrument used is the questioners method. The questioner has been designed with both open ended and close ended questions. Apart from this, the research instrument consists of primary and secondary data collected for the study. Primary Data Here first hand information is obtained by distributing printed questioners to
the marketing executives of the company. Data was also obtained from the observation and interviews techniques adopted by the researchers. Moreover, information was disseminated by the departmental heads.
Secondary Data Here the information is obtained from the brochure of Samsung group , books,
websites, newsletter, generals, magazines, newspaper, etc.
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Chapter 2 COMPANY PROFILE 2.1
The Samsung Philosophy
2.2
Mission of Company
2.3
Values
2.4
Vision 2020
2.5
Key Products
2.6
Competitors Of Samsung
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COMPANY PROFILE
2.1 The Samsung Philosophy At Samsung, they follow a simple business philosophy: to devote their talent and technology to creating superior products and services that contribute to a better global society. Every day, their people bring this philosophy to life. The leaders search for the brightest talent from around the world, and give them the resources they need to be the best at what they do. The result is that all of its products — from memory chips that help businesses store vital knowledge to mobile phones that connect people across continents have the power to enrich lives. And that‘s what making a better global society all is about.
2.2 Mission of Company ―Everything we do at Samsung is guided by our mission: to be the best ―digitalcompany‖.
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2.3 Values of Samsung We believe that living by strong values is the key to good business. At Samsung, a rigorous code of conduct and these core values are at the heart of every decision we make. People
Quite simply, a company is its people. At Samsung, we‘re dedicated to giving our people a wealth of opportunities to reach their full potential. Excellence
Everything we do at Samsung is driven by an unyielding passion for excellence — and an unfaltering commitment to develop the best products and services on the market. Change
In today‘s fast-paced global economy, change is constant and innovation is critical to a company‘s survival. As we have done for 70 years, we set our sights on the future, 13 | P a g e
anticipating market needs and demands so we can steer our company toward longterm success. Integrity
Operating in an ethical way is the foundation of our business. Everything we do is guided by a moral compass that ensures fairness, respect for all stakeholders and complete transparency. Co-prosperity
A business cannot be successful unless it creates prosperity and opportunity for others. Samsung is dedicated to being a socially and environmentally responsible corporate citizen in every community where we operate around the globe.
2.4 Vision 2020 As stated in its new motto, Samsung Electronics' vision for the new decade is, "Inspire the World, Create the Future." This new vision reflects Samsung Electronics‘ commitment to inspiring its communities by leveraging Samsung's three key strengths: ―New Technology,‖ ―Innovative Products,‖ and ―Creative Solutions.‖ -- And to promoting new value for Samsung's core networks -Industry, Partners, and Employees. Through these efforts, Samsung hopes to contribute to a better world and a richer experience for all.
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As part of this vision, Samsung has mapped out a specific plan of reaching $400 billion in revenue and becoming one of the world‘s top five brands by 2020. To this end, Samsung has also established three strategic approaches in its management: ―Creativity,‖ ―Partnership,‖ and ―Talent.‖ Samsung is excited about the future. As we build on our previous accomplishments, we look forward to exploring new territories, including health, medicine, and biotechnology. Samsung is committed to being a creative leader in new markets and becoming a truly No. 1 business going forward.
2.5 Key Products o
o
LED TV
Premium Design Monitor
NotePC
SPH-M800 Instinct
o
SGH-A867 Eternity
SGH-A877 Impression
o
HZ15W
TL320
o
Full HD Camcorder
MP3 Player
o
Color Laser Printer
Microwave
o
Refrigerator
8M-pixel CIS (CMOS Image Sensor)
o
800MHz Mobile AP
Mobile DDISmart Card IC
o
2Gb DDR3 SDRAM
1Gb GDDR5 SDRAM
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2.6 Major Competitors Of Samsung
o
LG
o
VIDEOCON
o
ONIDA
o
SONY
o
SANSUI
o
PANASONIC
o
THOMPSON
o
WHIRLPOOL
o
GODREJ
o
DELL
o
NOKIA
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Chapter 3 SAMSUNG
3.1
Samsung in India
3.2
Samsung the Future
3.3
Effective Advertisement
3.4
SWOT analysis
3.5
Marketing strategy of Samsung
3.6
After sales service
3.7
Future prospects
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3.1. Samsung in India Samsung India is the hub for Samsung‘s South West Asia Regional operations. The South West Asia Regional Headquarters looks after the Samsung business in Nepal, Sri Lanka, Bangladesh, Maldives and Bhutan besides India. Samsung India, which commenced its operations in India in December 1995, today enjoys a sales turnover of over US$ 1Bn in just a decade of operations in the country. Headquartered in New Delhi, Samsung India has a network of 19 Branch Offices located all over the country. The Samsung manufacturing complex housing manufacturing facilities for Color Televisions, Color Monitors, Refrigerators and Washing Machines is located at Noida, near Delhi. Samsung ‗Made in India‘ products like Color Televisions, Color Monitors and Refrigerators were being exported to Middle East, CIS and SAARC countries from its Noida manufacturing complex. Samsung India currently employs over 1600 employees, with around 18% of its employees working in Research & Development.
3.2. SAMSUNG: The Future
From its inception as a small export business in Taegu, Korea, Samsung has grown to become one of the world‘s leading electronics companies and a leading global digital technology brand. In 2009, Samsung made more than 100 trillion won in revenue and 10 trillion won in operating profit. Its steady ascent in brand value has placed Samsung shoulder to shoulder with the most trusted global companies. In 2010, Samsung achieved a remarkable 60 per cent growth rate here, reporting a sales turnover of $3.5 billion, contributing to the company‘s $135.8 billion in global revenues, perhaps the most successful in Samsung‘s history. As the current number 1 provider of LED and LCD TVs, Samsung is challenging the lead position in vital categories such as mobile phones and consumer durables etc., to emerge as a $10 billion player by 2013 in India.
Samsung‘s strategy hinges on growing and developing the market to increase its play across segments and to emerge as the technological leader as well as the consumers' most preferred brand. In this context the company has made strong investments in enhancing its 18 | P a g e
manufacturing presence with $325 million so far and plans to invest an additional Rs. 350 crore by 2015. The company is aiming a 40 per cent growth this year with profits of $4.9 billion.
They already have over 20 per cent market share in the net book category and are looking at doubling it in the NotePC segment this year. Based on their balanced portfolio across our consumer electronics and mobile and IT portfolios, they are looking at achieving a 40 per cent sales growth over our sales of US$ 3.5 billion achieved last in 2010.Samsung is looking to ramp up its India presence with increased manufacturing capacity, larger retail reach and 40-45 new models this year. Samsung entered the market with about 10 per cent market share last year and ended the year at 22 per cent in terms of value. Samsung is looking at a similar growth this year aided by our strategy to give consumers a choice in terms of new innovative products.
On the R&D front, Samsung has a strong R&D presence – 18 R&D Centers, including two dedicated R&D units in India, employing over 44000 people globally and investing over 8 per cent of global sales in R&D processes to foster innovation. Samsung has a key commitment to spur R&D activities in India and in many cases India serves as the lab for innovation of products and services for other global markets.
Samsung has inked pact with as many has 890 application development companies to grab a 40 per cent of the fast growing Smartphone market in India.
3.3 Effective Advertisement
3.3.1. Effective Advertisement and Consumer Attitude The following model exemplifies the attitude or response of a consumer to an advertisement and a glance through the following pictorial presentation would simplify our understanding of the advertisement‘s effects on thinking response and it also magnifies the peripheral and associative effect of an advertisement.
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A Model of the Feeling – Response to Advertisement
Decreases amount of total thinking
Raises product attribute valuation
Transform use
Advertising -Evoked Positive Affective
Increases ratio of positive to negative thoughts
Increase positive product attribute attitude
Increases Attitude towards the Advertisement
Increase Evaluation of Advertisement characteristics
A rather simple explanation of how a feeling – response advertisement works is that people like it or dislike it is an advertisement, and this attitude gets transformed to or associated with the product in the advertisement. There is thus the potential for a direct casual link between the attitude towards an advertisement and the attitude and behavior towards a product. As noted in the diagram, feelings engendered by an advertisement can create or influence an attitude towards the advertisement directly, as well as indirectly, through assessment of the quality of the advertisement‘s exceptional characteristics. In fact, some researchers believe that attitude to the advertisement really has two different components; an effective one, reflecting the direct effect of the feelings evoked by the advertisement, and a second more cognitive 20 | P a g e
one, reflecting how well is the advertisement made and how useful is the advertisement. It is important, in understanding how an advertisement ultimately affects consumer attitude; to see what kind of attitude people develop toward the advertisement itself. If the feeling that the advertisement creates are positive, and if the way the advertisement is made is evaluated favorably, then the advertisement should elicit a favorable attitude towards itself and vice-versa.
In respect of the viewers of the advertisement, the matter of concern is that, how far does it influence them and how should it influence them in the right direction. Viewers of advertisement, who are the mass, have got their own outlook and their own way of understanding. The customers are to depend on the advertisements, only till he gets the product. After buying and using the product for the first time, comes the response to the advertisement. This can be in three different levels viz.
At the first level, when the consumers are fully satisfied, they will respond favorably to use the product continuously, subject to the price and the availability of the product. Continuous advertisement in various media further influences the listeners to build up a positive attitude towards the product. This leads to the change in the consumption behaviour of the society, which leads to a great level of social and cultural change among the people in general.
The next level is the stage of getting dis-satisfaction by the consumers on the use of the product, on persuasion by the advertisement. This will lead to consumer resistance to the product. The dissatisfaction at this state means that the quality or the contents of the utility value of the product might not have reached the height expectations created by the advertisement. If the product or service at this stage is able to satisfy at least a section of the people, then it can service higher and thus will serve as forbidding factor. As far as the attitude formation is concerned, this stage can be considered as a formative stage. But if the product fails to reach, not even a section of the society in total, it will lead to the product withering away from the market in course of time.
The third situation leads to a stage, when the viewers understanding that the advertisement misguides them or giving a wrong information deliberately. Under this 21 | P a g e
situation the viewer loses confidence on the advertiser, producer and the seller. This leads to a negative attitude on the marketing of the products of the company in general. The defects are to be brought to the knowledge of the producer to give a chance for him to correct the mistakes, if it is so. When there is no proper response for this complaint, then it leads to earning discredit from the customers.
3.3.2. An Ideal Consumer Feeling
In order to ensure that the advertisements reach the target consumers in a most effective way and begets right response from, it has to be ensuring that such advertisements are presented in the right way. The following steps on the part of consumer may ensure that the advertisements are on the right track.
Getting attracted towards the advertisements.
Listening and observing the contents of the advertisements in full.
Continuous watching of the same over a period.
Comparing the advertisements of similar products.
Learning more about the product, the producer and the advertiser.
Making a trail purchase as follow up activity.
Using the product as per the instructions.
Assessing the level of utility of the product individually.
Assessing the level of utility derived with other similar consumers.
Comparing the level of utility of the product with similar products.
Decision-making regarding the continuous use of the product, and to recommend to others, positively or negatively. If not satisfied with the product discrepancy regarding the quality and the characteristics of the product are to be taken to the knowledge of the producer and the advertiser.
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3.4 SWOT ANALYSIS
o
Strength
o
Weakness
o
Opportunity
o
Threat
Strength
Accessory to necessary
Air-conditioner are no longer perceived to be a item of luxury
Advancement of technology which gives companies ability to introduce new products and new product features
High growth key driver being urban and rural
Government policies in favor of infrastructure development and reduction in excise duty and so on
Weakness
Supply continuous to outstrip demand.
Demand cyclical and seasonal
Volatile performance of the agricultural sector has negative impact on demand. The sectors performance is highly dependent on monsoon and reforms which has filled often.
Opportunity
Diversification and Developing new products for new market.
Easy availability of finance has stimulated consumers to buy durables.
Changes in Consumer outlook from spend now-save later mentality leading to high disposable income 23 | P a g e
Threat
Dozen companies operating in the white goods segment. Prices would continue to remain depressed and margins will be under pressure.
Threats of cheaper imports from China and other South East Asian countries
3.5 Marketing strategy of Samsung
3.5.1 Background
3.5.2 Current Scenario
3.5.3 Demand/Supply
3.5.4 Consumer Durable: Urban and rural India
3.5.5 Success Factor for Consumer Durable Industry
3.5.6 Consumer Outlook
3.5.7 Scenario in the Consumer Durable Sector
3.5.8 Major Players
3.5.9 Entry Of Samsung In India
3.5.10 Market Share
3.5.11 Marketing Strategy of Samsung Products Refrigerator Washing Machine Air Conditioners Micro-Ovens Televisions DVD Samsung Mobiles 24 | P a g e
3.5.1 Background
Prior to liberalization, the consumer durable sector in India was restricted to a handful of domestic players like Godrej, Alwyn, Kelvinator, Voltas. Together, they control nearly 90% of the market. They were first superseded by the players like Videocon in the early 1990, who invested in brand building and in enhancing distribution and service channels. Then with the liberalization came aspect of foreign players from LG Electronics to Sony to Aiwa.
Rs.23000cr consumer durable industry can be divided in to two types, consumer electronics and consumer utilities. Consumer electronics is basically is entertained system like Television, VCR‘s, and Audio System and Home theater systems. Consumer utilities are other household appliances like Refrigerator, Washing Machine, Air-Conditioners, food processors, and vacuum cleaner. On most third world countries, consumer durables like Refrigerator and Television are most popular. Out of this, the television segment is undoubtedly the largest segment. Products in the white good segments come next to the CTV‘s in the purchasing hierarchy of the Indian consumer.
Over the years demand of consumer durables has increased with rising income levels, durable double income families, changing lifestyle, availability of credit, increasing consumer awareness and introduction of new model. Products like Air-Conditioner are no longer perceived as luxury product, while TV draws its share from both Urban and Rural refrigerator and washing machine are still inclined towards Urban.
3.5.2 Current Scenario
Most of the segments in this sector
are characterized by intense competition,
emergence of companies (especially MNCs), introduction of state-of-the-art models, price discounts and change schemes. MNCs continue to dominate the Indian consumer durable segment, which is apparent from the fact that these companies 25 | P a g e
command more than 65% market share in the color television (CTV) segment. The Indian television industry has a size of around Rs 96 billion, comprising color television (CTV) of Rs 91 bn and B&W TV market of Rs 5 bn and other markets (primarily video equipment) of Rs. 4-6 billion. In terms of volumes, the CTV market was estimated at 9.05 million units and the B&W TV market at 2 million units during calendar year 2011. Refrigerators constitute the second largest product segment within the Indian consumer durables sector in India, with an estimated annual turnover of Rs 39 bn during FY2011 with an estimated sale of 4.1m units. The size of the room Air-conditioners industry is estimated at 1.1 m in volume terms, and Rs 24 bn in value terms. Washing machines sales in India aggregated an estimated 1.37m during FY2013 or around Rs 11 bn in value terms
3.5.3 Demand/Supply
Supply growth is high across all the segments. But the organized sector has gained substantial market share from the unorganized segment in recent years. However, there are fewer players in segments like dishwashers and vacuum cleaners.
Cyclical and seasonal-Demand is high during festive season and is generally dependent on good monsoons. There are certain factors in the consumer durables industry, which are considered as demand drivers. They are:
o
The degree of distribution network in the market.
o
The advertising and marketing strategy adopted by the players in the industry.
o
The brand image of the product as perceived by the consumer.
o
The technology used by the company viz. state-of-art technology or an older version.
o
The ability of the company to introduce newer products and newer product features The capability of the company to service its products 'The discount schemes and consumer finance facility available
o
The market positioning of the product
o
The cost competitiveness and pricing strategy of the company
o
The financial strength of the players 26 | P a g e
3.5.4 Consumer Durable: Urban and rural India
In the top 5 million households, in affluence terms, 96 percent of households have color televisions, 82 percent own refrigerators, and 44 percent own washing machines.
In the next 7 million households, penetration of color TVs is 69 percent, 58 percent for refrigerators, and 19 percent for washing machines.
In the next tier of affluent households - numbering approximately 12 million - 50 percent own color TVs, 35 percent own refrigerators, and 8 percent own washing machines.
Rural India too is set to see an increase in the number of high-income households. An additional 4.6 million high-income households and 13 million middle-income households by 2011 to 2012 will take the number of rural households from 122.8 million to 139 million. This constitutes a huge opportunity for marketers - 60 million households or 300 million consumers with the capacity to buy consumer appliances and other products is an attractive market for any global player. And it seems that global appliance players who have established brands in the Indian market are likely to benefit from this great big push towards consumerism.
3.5.5 Success Factor for Consumer Durable Industry
Indian consumer durables industry is going through a consolidation phase with MNC companies going in for strategies to increase market share. Certain success factors for this industry are identified follows:
1. Technology: Rising competition has resulted in major competitors introducing
technologically superior products at competitive prices. This means the technology input is gaining more and more importance. In this regard, the large MNC players score over their Indian counterparts as they can always source technology from their parents. On the other hand, Indian companies rely on the outside sources for their technology requirements 27 | P a g e
2. Knowledge of the local market: Indian consumer durables market is different
from other markets. Hence understanding these peculiarities is important for the longterm survival. For example, Samsung launched the 'Super Horn" brand after it discovered that Indian consumers prefer loud noise. Indian companies are better placed in this regard as they know the market pretty well.
3. Strong distribution network: Tough competition means that a proper mindshare
of the consumer has to be maintained and the product has to be made visible. Volumes in this business are narrow and profitability comes from volumes. To achieve volumes, deep penetration of the market is necessary. Indian companies score a point here as being in the market for a longer time; they have developed strong distribution channels.
4. Good brand image: Perception of a particular brand plays an important role in
purchase decision. A typical Indian consumer looks for value for money when he makes purchase of white goods, as the price involved is significant and unlike developed markets, Indians do not have the buy, use and throw mindset. Hence, consumer also looks for reliability of the product. All this is conveyed through strong brand awareness.
3.5.6 Consumer Outlook
The Change in Consumer 11 India is a country in a hurry - changing continuously and also trying hard to keep pace with these changes. The 'me too' syndrome is no longer valid as consumers seek customized products. 'The Indian consumer consumer's evolution in the last decade has thrown up some interesting trends:
Consumer base becoming younger. Nearly a third of the country's population is under the age of 14 years.
Kids graduating from pester power to decision makers.
People with buying power living longer and developing distinct health needs.
Multi-tasking consumers fighting paucity of time and new consumer trends. 28 | P a g e
Huge increase in High Income Groups and spend now-save later mentality leading to high disposable income.
Consume wants to be treated as an individual not as part of a large physical mass and the consumer looks for a 'post buy' relationship to enhance the value of her brand decision making.
3.5.7 Scenario in the consumers Durables sector
Prior to liberalization, the Consumer Durables sector in India was restricted to a handful of domestic players like Godrej, Allwyn, Kelvinator and Voltas. Together, they controlled nearly 90% of the market. They were first superceded by players like BPL and Videocon in the early 1990s, which invested in brand-building and in enhancing distribution and service channels. Then, with liberalisation came a spate of foreign players from Samsung to LG Electronics to Sony to Aiwa. Both rising living standards, especially in urban India, and easy access to consumer finance have fuelled the demand for consumer durables in the country. Also, the entry of a large number of foreign players means the consumer is no longer starved for choice. But this has also resulted in an over-supply situation in recent times as growth levels have tapered off.
3.5.8 Major players
The major players in the consumer durables industry, operating in different sectors such as air conditioners, washing machines, refrigerators & television include: Blue Star Ltd., Mirc Electronics Ltd., Whirlpool of India Ltd., Philips (India) Ltd., BPL Ltd., Sony Corporation Ltd., Samsung India Ltd., LG Electronics India Ltd., Videocon International Ltd.
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3.5.9 Entry of Samsung in India
Emerging Markets (EMs) with large consumer bases and untapped demand constitute the major growth opportunities for the multinationals and global companies. However, not all companies are successful in establishing a foothold, leave alone operating profitably, in such markets. For most, it takes years of struggle before they can even breakeven. Marketing is difficult in such EMs because of little or no market data, non-existent or poorly developed distribution systems, lack of regulatory discipline, and where regulations exist, a propensity to change them frequently and unpredictably.
Samsung entered India in December 1995 as a 51:49 joint venture with Reasonable Computer Solutions Pvt. Ltd (RCSPL), owned by Venugopal Dhoot of the Videocon group. In 1998, RCSPL diluted its stake in Samsung to 26% and in November 2002, the FIPB cleared Samsung's proposal to buy RCSPL's remaining (23%) stake. With Samsung buying the total stake of RCSPL, it became a wholly-owned subsidiary of its South Korean parent company. In spite of being a latecomer to India, Samsung was able to become one of the top consumer electronics companies in India, an emerging market was due to a combination of several aspects: Product innovation, Promotion, Pricing, distribution and Positioning; wherein Samsung primarily focused at. The three-pronged objectives of Samsung are: -
1) Strengthening their channel relationships, 2) Enhancing their product portfolio and 3) Creating the best service infrastructure, to gain more mindshare."
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Positioning Many multinational companies adopt a ―less developed countries‖ mindset, assuming that these markets are at an earlier stage of the same development path followed by the developed countries. To take the example of the automobile industry, Ford and GM launched their outdated models like Ford Ikon and Opel Astra in the Indian market. When these models did not sell well, the companies changed course and decided to launch newer models in India. In the case of Samsung, the company from the very beginning launched its whole range of high technology products, which included CTVs, audio and video products, information technology products, mobile phones and home appliances in India. It introduced products such as the ‗Bio‘ range in CTVs, high-powered Woofer series of colour televisions in 21-inch and 29-inch conventional and 21-inch flat TV segments. And not to forget the lateset DNie television.
By positioning itself on the technology platform, Samsung was able to differentiate itself from its competitors. Differentiation today is the key for a brand to be preferred by the consumers, when there are so many other brands within the same product category. Without differentiation, its loyal customer base cannot be created or sustained. But to be a true differentiator, a company must provide features that are meaningful to customers. Which is what exactly Samsung has been doing.
Products Samsung‘s product range in India includes CTVs, video products, information technology products, mobile phones and home appliances. Its product range covers all the categories in the consumer‘s electronics and home appliances. According, to the analyst‘s wide product range of Samsung is one of the main reasons for its success in the Indian market. The wide range products are as follows: -
Home appliance
Microwave Ove 31 | P a g e
Refrigerator
Air Conditioner
Washing Machine
TV, video & audio
DVD Player
Camcorder
Audio
Home Theater
Digital Audio Player
Digital Still Camera
Mobile Phones
Information technology products
Note PC
HDD
CD Rom & DVD Rom Drive
Monitors
Laser Printers & Laser Based MFPs
Samsung by launching innovative products and using proprietary technology was able to gain market share. Samsung has therefore set up Samsung India Software Centre (SISC) and Samsung India Software operations unit (SISO) for software development at Noida and Bangalore respectively. While the Samsung India Software Centre in developing software solutions in Samsung‘s global software requirements for hi-end television like Plasma and LCD TVs. SISO is working on major projects for Samsung Electronics in the area of telecom: wireless terminals and infrastructure, Networking, SoC (System on Chip) Digital Printing and other multimedia/digital media as well as application software. In addition to working on global R&D projects, SISO is also helping Samsung India‘s CDMA business by focusing on product customization for the Indian market.
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3.5.10 Market share Product
Samsung's
Competitors
M/S
Year
global M/S DRAM
40.4%
Hynix
19.8%
Q3 2010
NAND Flash
40.4%
Toshiba
33.1%
Q2 2010
LG Display
25.9%
Q3 2010
Large-size
LCD
Panel 26.0%
(revenue) Active-Matrix OLED
97%
LG Display, AUO
1~3%
2010
Lithium-ion battery
18.7%
Sanyo
19.4%
Q1 2010
LCD Monitor
18.0%
Dell
12.8%
2009
Hard disk drive
9%
Seagate
31%
Q4 2009
LG Electronics
14.8%
Q3 2009
Technology Television
sets 17.2%
(LDC, PDP, CRT, LED) Mobile phone
21.0%
Nokia
23.4%
Q3 2010
Digital camera
11.8%
Sony
17.4%
2010
3.5.11 Marketing Strategy of Samsung Products Product Features
To sell a consumer durable product a company has to provide unique features i.e. features which other companies are not able to provide. Samsung has been using the same strategy to boost their sales. Samsung provides its consumers with wide range of products with unique features. For example, Samsung was the only company offering 1000 watts PMPO sound output in the 21-inch flat TV segment. It also introduced a new 5.5 kg, top loading fully automatic washing machine with features like ‗saree course‘ keeping in mind that the majority of the Indian women wear sarees. Refrigerator
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Bio Ceramic Technology (Bio Fresh Refrigerators)
BIO FRESH prevents evaporation of moisture, cell activation; supports antibacterial function and also prevent the alteration of proteins. This keeps the food fresher for a longer time. At the heart of Bio-Fresh refrigerators is Bio Ceramic technology. Ceramics form a part of the raw materials used in the manufacturing of the Vegetable compartment. Ceramics have the unique property of emitting 'Far Infrared Rays' (FIR). The FIR helps retain the moisture content in the vegetables, fruits and other natural products as they are in the natural resonant frequency of water molecules. The 'FIR', in combination with technologies like the Bio-Deodorizer, Dynamic Super X Flow cooling system with i-cool and Humidity Controller makes the Samsung BioFresh refrigerator one of the most unique products in the Indian market today. Bio-Vegetable Box is made of the newest Bio-Ceramic material. Bio-Ceramic material radiates far-infrared rays, which help retain the moisture content in vegetables, fruits and other natural products, keeping them rich in nutrients and essential vitamins for a longer period of time. Super X Flow technology
The Samsung 250 NMB incorporates the Dynamic Super X Flow technology. This technology sets up a smart cold air distribution system to maintain an even temperature throughout the refrigerator! This effectively achieves three clear benefits: Even Temperature, Quick Cooling and Energy Savings. Samsung's Twin Cooling System
Samsung's Twin Cooling System controls and generates cooling air for the refrigerator and freezer independently with two separate evaporators and precise electronic control, thus maintaining each compartment at their optimal cooling conditions. This results in a more efficient refrigerator with powerful performance!
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Electricity Consumption Comparison
These features reduce energy consumption by 30%, compared to previous models, with a high efficiency compressor and better insulation (A class: ISO standard) Another Freezer in Refrigerator Compartment
The Twin Cooling System allows the Cool Select Zone to maintain -5ºC (Soft Freeze mode) in the refrigerator compartment. While food stored in the freezer is not easy to handle, the Soft Freeze mode sets the temperature low enough for easy slicing and allows medium-term storage. This is only possible by the Twin Cooling System.
Washing Machine Torando Pulsator
SUPER DRY: -Samsung introduced India's first Semi Automatic Washing machine with a SUPER DRY Feature. The SUPER DRY Feature provides a 10 minute Spin Dry Timer, which gives you the power to ensure that your clothes get the BEST POSSIBLE DRYING. SUPER DRY is great value; especially for the Monsoon and winter months, when clothes don't dry easily. This powerful feature is available on the latest models launched recently - WT9300, WT9200, and WT7800. While all other brands will provide the standard 5 minutes Spin Dry Timer, these models give you EXTRA DRYING for full 10 minutes. I-CONTROL SYSTEM:- The Samsung Washing technology is designed to put you in control of the washing process, and the machine action. Samsung Washing Machines are packed with an array of incredible features that come together to make the I control system. These include the ‗ECO Wash - that saves water and detergent‘, ‗Child Lock - To limit small children with tampering settings and getting hurt‘, ‗Auto Restart - that saves you the bother of restarting the washing machine each time the power fails‘, ‗Memory backup- enables the washing machine to remember programmed wash cycles and settings‘, ‗Delay Start- To enable you to time the washing machine with your water supply and other chores‘ and ‗Fuzzy Logic - that makes the washing machine intelligent to adjust automatically to wash loads, water
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and detergent levels‘ etc. These 6 amazing technologies come together to put you in total control and command of the washing machine and the wash process HYDROJET WASHING TECHNOLOYG: Samsung Hydrojet gives you a combination of three powerful washing actions: 1) Waterfall Flow: Strong flow of water that streams down from the top. Pushing heavy and light clothes towards the pulsator. 2) Centre Jet: A strong gush of water formed right at the center of the washing machine, forcing the dirt out of clothes. This also ensures that the clothes do not get entangled at the center.3) Water Pores:- Saves water and detergent and washes clothes from all sides. BIO WASH TECHNOLOYG: Clothes washed in Samsung Washing machines are not only dirt free, they are also 'germ free'. Samsung has developed this unique Bio-Wash Technology to ensure just that. The Bio-Pulsator is made from some percentage of Bio - Resin, which destroys germs and keeps the environment inside the washing machines, pure and germ free, wash after wash. Air conditioners
Turbo power: {BRINGS INSTANT RELIEF FROM HEAT} The Turbo function makes the AC operate under full power for 30 minutes, irrespective of the set temperature, which leads to quick change of the room temperature, instantly bringing the air-conditioning comfort in the room. Turbo operates faster than the conventional system. The new compact range of Samsung Window ACs not only occupies lesser window space but also is more aesthetically appealing. Quick power optimizer: {ENSURES LOW ELECTRICITY BILLS} The Samsung Split Air conditioners 5-Step Heat Exchangers have 122% larger surface area. Samsung Window Air conditioners are equipped with a 3-row cooling coil and L bent condenser coil that provide a larger surface area helping the refrigerant to dissipate heat faster. This results in faster chilling and lesser strain on the compressor resulting in lower electricity bills.
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Micro Oven
Bio Ceramic Technology: Only Samsung Microwave Ovens come with a unique Bio Ceramic Enamel coating. Bio ceramic enamel produces less oxidation, which helps retain essential vitamins while cooking. The ceramic enamel retains 2.5 times more heat than stainless steel, leading to faster cooking. High scratch resistance: Bio Ceramic Enamel‘s durability and protective qualities make it far more scratch resistant than other microwave interiors. When scratched with equal force, the roughness of the ceramic enamel surface increases only 7.5% compared to 106% for the stainless steel. Higher nutrient retention: Food cooked in Bio Ceramic enamel cavity microwave ovens retains significantly greater amounts of vitamin C and F (an essential fatty acid that helps reduce cholesterol and blood pressure) than food cooked in conventional stainless steel cavity microwave ovens. Exclusive Feature: 3D Shower wave Unlike other Microwave Ovens, only Samsung Microwave Ovens come with the unique 3D Shower wave System, which helps to distribute heat evenly, enabling uniform cooking horizontally and vertically.
Television
The Samsung 70-inch PDP TV (Plasma Display Panel) and at 54 inches is the world's largest thin film transistor liquid crystal display (TFT-LCD) television and offers the highest picture resolution available anywhere in the world. The 70-inch PDP delivers high-definition imaging from over two million pixels - a resolution twice the clarity of other models on the market today. Samsung has also applied its proprietary Digital Natural Image engine image-enhancement technology to ensure the highest quality possible image in terms of picture brightness and contrast.
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Samsung's 54-inch TFT-LCD TV features a crisp, high-resolution image and excels in performance that ensures a smooth playback of the most action-packed visual content. The 1920 x 1080 resolution and 16:9 aspect ratios can accommodate future changes in high definition broadcasting. These advanced features and unprecedented screen size, combined with inherent crisp display characteristics of TFT-LCD, make this 54-inch TFT-LCD TV one of the most advanced display products available today. India‘s first wireless home theater (Bluetooth technology):
Samsung India
Electronics Ltd. has introduced India‘ s first wireless home theater, Model No. HTDB390 in the Indian market. The wireless Home Theater in Box (HTiB) uses bluetooth technology to provide a wireless connection to the rear speakers of the 5.1 channel speaker setup - eliminating the need for rear wires, and giving the user total freedom to setup the rear speakers. Wireless HTiB - rear speakers totally remove the hassles of wiring up the home theater. Extremely convenient they embody the concept of HTiB (Home Theater In Box) - since a user can literally take the system out of the box and place the speakers around his/her room to create a Home Theater. Add to the feature of "no-wires", the Samsung exclusive SDSM feature that calibrates sound from each speaker at the touch of a button to give the best sweet spot - and this Home Theater provides a never-heard-before audio experience.
DVD
The highlight of the Samsung DVD Range is the Hypervision DVD, HD 938, which is the world‘s first and only HDTV compliant DVD Player. The Hypervision DVD utilizes the world‘s first digital visual interface (DVI) output to transmit uncompressed digital video signals without any analogue conversion, preventing image quality loss. This results in viewers being able to enjoy high definition quality picture quality even for standard DVDs.
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Mobile Phones
India is one of the fastest growing mobile markets in the world, having more than 400+ million mobile subscribers. Currently in India 2.5G and 2.75G are in the existence in GSM Technology. Whereas another technology is CDMA (code division multiple access), 3G is coming into the existence.
As per as mobile market in India is concerned there are number of GSM service provider such as: o
Airtel
o
Vodafone
o
Idea
o
BSNL
o
TATA DOCOMO etc.
Whereas in CDMA there are few number of player as compare to GSM mobile, such as: o
TATA (TTSL/TTML)
o
Reliance India mobile
o
Virgin
o
MTS.
.
CDMA
GSM
28%
72%
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In this sector number of equipment manufacturer or mobile manufacturer presents such as: o
Nokia
o
Samsung
o
LG
o
Mototola
o
Sony
o
Haier
o
HTC
o
Chinese mobiles
Samsung India Mobile Samsung India Mobile a telecom equipment manufacturer, head office in New Delhi and country head Mr. Sunil Dutt. Samsung has divided the mobile business in to areas:
GSM Mobile Business.
CDMA Mobile Business.
Samsung CDMA Mobile Business In CDMA segment Samsung is in market with two functional area that are:
Operator handsets.
Open handsets
o
Operator handsets are handsets manufacture by Samsung but it is collaborated with any network operator. Samsung india has collaboration with following telecom service provider in different telecom circles.
TATA (TTSL / TTML)
MTS (SSTL) 40 | P a g e
o
Virgin Mobile (VMI)
Open handsets are handsets manufacture by Samsung and handsets is compatible to any CDMA network, there is no restriction of any specific CDMA network.
Availability of handsets in shops
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120.00% % f o 100.00% s m r e t 80.00% n i s e r 60.00% o t s l i a t 40.00% e r e l i b 20.00% o M
93.39%
95.28% 74.52%
71.69%
63.65%
25.47%
18.86% 5.66%
9.43%
0.00%
Handsets
Above figure shows that Samsung is most preferred brand in CDMA mobile handsets among all the brands.
LG is close competitor of Samsung with 93%+ availability in retail mobile stores.
The availability of Spice, Huawei and Haier is also good in CDMA market with availability more than 50% mobile retail stores. Samsung
LG
Spice
Haier
80 70 s 60 e r o t s 50 e l i b 40 o m f 30 o o N20
10 0 less then 20% 20% to less then 30% to less then 40% to less then 50% to 50% + 30% 40% 50% Market Shares in mobile stores
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Samsungs market share is high among all the brands. In majority of mobile retail stores Samsungs CDMA mobile market share is half or more than 50%.
In most of the mobile stores Samsungs CDMA mobile market share is 30% - 40%.
LG is close competitor of Samsung; in majority of mobile shops market share of both of the brand is almost equal.
Comparative study of Market Share 120%
LG-Samsung Comperative Market Share
100% LG Samsung
e r80% a h S t 60% e k r a M
40% 20% 0% 1
7 3 9 5 1 7 3 9 5 1 7 3 9 5 1 7 3 9 5 1 7 1 1 2 3 3 4 4 5 6 6 7 7 8 9 9 0 0 1 2 2 1 1 1 1 1
Stores
As per the above figure the market share of Samsung and LG are overlapping in some of the stores. It mean where demand of both the brand is equal.
The above figure indicated that LG and Samsung are the close competitors.
Somewhere LG is leading in CDMA market share, somewhere Samsung is leading.
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120%
Spice-Samsung Comperative Market Share
100% Spice 80%
Samsung
e r a h S t 60% e k r a M
40%
20%
0% 1
7 3 9 5 1 7 3 9 5 1 7 3 9 5 1 7 3 9 5 1 7 1 1 2 3 3 4 4 5 6 6 7 7 8 9 9 0 0 1 2 2 1 1 1 1 1
Stores
Majority of availability of Spice mobile in retail stores is less than 20% of market share.
Whereas almost Samsungs market share in mobile stores is more than 20%.
120%
Haier-Samsung Comperative Market Share
100% Samsung Haier
80% e r a h S t 60% e k r a M 40% 20% 0% 1
7 3 9 5 1 7 3 9 5 1 7 3 9 5 1 7 3 9 5 1 7 1 1 2 3 3 4 4 5 6 6 7 7 8 9 9 0 0 1 2 2 1 1 1 1 1
Stores
Sales of Haier mobile are very good in some of mobile stores because of low price of handsets available in Haier.
In some of the stores Haier mobile market share is more than 40%.
But its market share is less as compare to Samsung.
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120%
LG-Samsung-Spice-Haier Comperative Market Share
100% Samsung Haier
80% e r a h S t 60% e k r a M
LG Spice
40% 20% 0% 1
7 3 9 5 1 7 3 9 5 1 7 3 9 5 1 7 3 9 5 1 7 1 1 2 3 3 4 4 5 6 6 7 7 8 9 9 0 0 1 2 2 1 1 1 1 1
Stores
The above figure shows that Samsung is most preferred brand in the CDMA segment by consumers.
Samsung has the direct competition with LG.
Comparative Study of Consumer demand:
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70.00 60.00
% f o s 50.00 m r e t n i 40.00 d n a m 30.00 e d r e m 20.00 u s n o C 10.00
0.00 LG
Spice
Samsung
Huawei
Haier
Above figure shows consumer demand of Samsung CDMA mobile is very high. In 61% of retail mobile stores consumer demand is very high.
Approximate in 10% of retail mobile stores Samsung consumer demand is extremely high.
LG is close competitor of Samsung CDMA mobile, having 48% of very high consumer demand.
Haier demand is also very good among the consumer because of low price handsets.
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Chapter 4 AFTER SALES SERVICE AND FUTURE PROSPECTS 4.1 After Sales Service 4.2
Promotion
4.3 Advertising 4.4 Sales
promotion
4.5
Sponsorship
4.6
Direct mail
4.7 Distribution Channels 4.
8 Pricing
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4.1 After Sales Service Offering advanced technology products and positioning itself on the technology platform will not help a company sell its products if it fails to give proper after-sales-serfvice. With a focus on strengthening the satisfaction level of the consumer, Samsung India Electronics Ltd (SIEL)
has
launched
its
3S
—
Speed,
Smile
and
Sure
—
campaign.
As part of this customer service program, the company is working on a two-pronged strategy. This involves: one, improving the service infrastructure by setting up customer service plazas in key metro locations; and two, improving the skill levels of technicians by setting up a training school with a technical evaluation system for after sales service engineers.
Till now, most of the players in the sector have been professing that it's the relationship with the customer that matters. However, with the competition increasing, customer satisfaction is fast becoming a core issue,'' an industry analyst pointed out. He further stated that Samsung's current effort ``will also strengthen its customer base as most of the players claim that 60 per cent of their sales is repeat purchase.''
4.2 Promotion Offering advanced technology products and positioning itself on the technology platform will not help a company sell its products if it fails to communicate properly with the potential customers. To raise brand awareness and create strong, favorable and unique brand associations, Samsung adopted various marketing strategies like celebrity endorsements, corporate advertisements, highlighting its technological superior goods and many promotional schemes.
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4.3 Advertising Samsung is involved in aggressive marketing and advertising of its product to develop attitudes, create awareness, and transmit information in order to gain a response from the target market. Their main advertising channels include 'media' such as newspapers (local, national, free, trade), magazines and journals, television (local and national) cinema, outdoors advertising (such as posters, bus sides). The initial advertisements communicated presence of Samsung in worldwide markets and its dominance in those markets. To increase its brand awareness, Samsung went in for celebrity endorsements. Initially, the company signed Hindi film actress, Tabu, to endorse its brand. Till 2002, Samsung‘s ads focused on the technological supremacy of its products. But by late 2002, in addition to the technology plank, the company started advertising on the plank of ‗passion for country‘ and sports (cricket and football). Its latest ambassador is John Abraham for its mobile phone and Rahul Dravid for its Television range.
4.4 Sales Promotion Along with advertisements, Samsung also focuses on promotional schemes to increase its sales. In October 2001, Samsung launched its highly successful promotional scheme, the Samsung Phod ke Dekho Offer. This offer instantly boosted the sales of the company generating sales of Rs. 2.75 bn from this offer. The campaign was launched on an all India basis during the festival season. Under the scheme, consumers who bought any Samsung product were given a tamper proof plastic coconut with three coins in it. One out of every 10 coconuts had a lucky coin with a gift printed on it. As a part of the campaign, Samsung‘s brand ambassador, Tabu interacted with the customers and dealers of Samsung in Bangalore and Chennai and handed over the lucky coconuts to select Samsung customers. The prizes included products from the Samsung range.
The Phod ke Dekho offer was followed by another promotion scheme in May 2002, Dabake Jeeto offer coinciding with the football World Cup. During the promotion every customer who purchased company‘s electronics or home appliances product got plastic football with an alarm clock in it. The customer had to press the football from the top, and was given the free etched on the tamper-proof anodized sticker. Under this campaign, Samsung gave out gifts
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worth Rs. 100 mn, which included Samsung digital flat TVs, frost free refrigerators, microwave ovens, Karisma washing machines, mobile phones, cameras and Soccer 2002 official licensed T-shirts from Adidas. This campaign notched up sales worth Rs.310 Crores during the period of the Promotion.
The next major promotional campaign was the Phir Se Phod Ke Dekho offer. The offer was launched during October-November 2002 generating a sales of Rs. 380 crores. It was a repeat of the earlier ‗Phod Ke Dekho‘ campaign. On March 20, 2003 Samsung Launched 'Samsung Rang De Kismat Offer' for Frost Free Refrigerators which entitled a customer to Lucky Gifts worth Rs 4 Crores, with the purchase of any Samsung Frost free Refrigerator. This Promotion derives its name from the 'Rang de Kismat' glass, which was handed over to a customer with the purchase of any Samsung Frost Free Refrigerator. The Customer needed to pour chilled water into the glass and wait for the 'Bio' logo on the Glass to change colour to find out the gift won by him/her. There were Colour Codes for types of Gifts won by the Customer - For example, a Green 'Bio' entitled a customer to a Samsung Microwave oven while a Red 'Bio' gets the Lucky winner a Gift Voucher from Tanishq worth Rs 30,000. This offer was launched to capitalize on the sales of its Frost free refrigerators in the summer months. The Company‘s market share went up to 21% in the Frost free refrigerator market after the offer.
Following its success with its 'Samsung Rang De Kismat Offer' Samsung India come up with another innovative Consumer Offer ―Samsung's Bundling Offer with Reliance IndiaMobile‖ for the buyers of its Consumer Electronics and Home Appliance Products in the Delhi and NCR Region on 25 July, 2003. A buyer of any Samsung Consumer Electronics or Home Appliance products gets the option of walking away with a sleek, advanced Samsung Mobile Phone N191 model along with a Reliance IndiaMobile connection, without having to pay any activation charges. Furthermore, the user gets free talk time worth Rs.600 over a 6-month period. All other payment terms are the standard billing terms and conditions offered by Reliance IndiaMobile depending on the package taken up by the customer. On 6 October 2003 Samsung India Electronics Ltd launched its mega festival promotion called ‗Samsung Pinning Toh Winning Offer‘ on an all India basis. In this Promotion, where the consumer stood to win an assured gift on the purchase of any Samsung product, have gifts worth Rs. 100 crores to offer as prizes. The offer entitled the buyer of a Samsung product, a card with a unique 16 digit alpha-numeric code. All the consumer had to do is SMS ―SAM‖ followed by 50 | P a g e
the 16 character code to 8888 and s/he would immediately get a message showing what gift has been won. The Gifts won in the Promotion include; Samsung Projection TVs, Samsung Mobile Phones, Samsung Yepp Disc Players, Samsung DVD players, Titan Fast Track Glares, Touch Screen Landline Phone, Trendy Portable Travel Iron and Britannica Encyclopedia 3 pack CDs.This offer was basically launched to maximize its sales during the festival season.
Following its success with its ‗Samsung Pinning Toh Winning Offer‘ Samsung India Electronics Ltd launched ‗The $-DOLLAR Program‘ for its IT Reseller and System Integrator fraternity on June9, 2004. The program meant for the System Integrators (SI) was applicable on Samsung monitors, Hard Disk Drives (HDD) and Optical Media Storage (OMS) products. Each time a SI/reseller purchases Samsung products from a Samsung Star Elite or Samsung Storage Preferred Partner (SSPP), the SI was issued a cheque. The cheque was of one of the four colors – White, Blue, Silver, Gold – depending upon the products bought.
Samsung believes that its SIs and re-sellers play a pivotal role in business growth. They are the ones who provide them the edge that they need in today‘s competitive marketplace. This is why they have spearheaded revolutionary programs for them ensuring healthy growth in revenues and profitability.
The last sales promotion offer was launched on Feb 3, 2005 called ―Fastest Finger First‖ which was a nation wide contest to find India‘s fastest SMSer. The message to be typed reads as follows: ―The razor -toothed piranhas of the genera Serrasalmus and Pygocentrus are the most ferocious freshwater fish in the world. In reality they seldom attack a human". This SMS had to be typed on the cell phone keypad, complete with punctuation marks and lower & upper case. No predictive text (T9 Dictionary), QWERTY keyboards/ any keyboard was allowed.
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4.5 Sponsorship Samsung used sponsorship of events like Olympic series to boost its sales. Samsung was the global wireless communications sponsors at the Athens Olympics. Samsung used the strategy of relating itself directly with the values of the Olympic games, which included attributes like world class, global, excellence, fair competition and peace. The Olympic series of August5, 2004 was Samsung‘s salute to the Olympic values. Samsung was the sponsor of Lakme India Fashion Week held on April21, 2005. Team Samsung cricketers - Irfan Pathan, Mohd. Kaif and Virendra Sehwag launched the World‘s Best Handset, Samsung D500 during the Samsung Show at the Lakme India Fashion Week. The theme for the Samsung Show was ‗The Best Thing Says Everything‘ in keeping with the positioning of Samsung D500 - Samsung‘s latest and path-breaking mobile phone which has been rated as the ‗World‘s Best Mobile phone‘ by the 3GSM Association World Congress held at Cannes in February 2005. Samsung sponsored Samsung & MTV Youth Icon 2005 on June10, 2005. The idea behind the sponsorship was that the Samsung Mobiles were targeted at the fun loving, lifestyle oriented and trendy youth of today. By associating with the Samsung & MTV Youth Icon, they are seeking to further strengthen their relationship with the youth. Samsung mobiles make a style statement and by partnering with the Youth Icon, this positioning is further reinforced. Samsung was even the sponsor of Samsung IIFA Awards held on June 13, 2005. Popular film actress, Preity Zinta was awarded the ‗Samsung Diva‘ award while Hrithik Roshan was conferred the prestigious ‗Samsung Style Icon‘ award at the Samsung IIFA Awards 2005. Samsung India had carried out an online voting process on the Samsung India website between May 20th - June 5th 2005 for selecting the recipient of the ‗Samsung Style Icon‘ and ‗Samsung Diva‘ awards. The same was also promoted extensively on other sites like indya.com and msn.com as well. The Company received a phenomenal response to this online voting contest. ―The ‗Samsung Style Icon‘ and ‗Samsung Diva‘ awards which have been growing in popularity year on year, the company uses the response level received every year as its popularity indicator.
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Samsung are passionate about football. That is based on the company-wide belief that sport plays a unique role in unifying people. They have been connecting with sports fans the world over by supporting sporting events including the Olympic Games, the Winter Olympic Games, the Asian Games, the World Cyber Games, Samsung Super League (Equestrian) and of course football. As well as being very proud sponsors of Chelsea since the 2005/6 season, they support many teams across the globe. Samsung became the Official Club Sponsor of Chelsea Football Club from 1 June 2005 in a five-year deal. The agreement was signed at Stamford Bridge, Chelsea´s stadium, by In-Soo Kim, Samsung European President, and Peter Kenyon, Chelsea FC's chief executive at the time. It was the biggest ever sponsorship deal signed by Chelsea and the second largest by Samsung after its sponsorship of the Olympic Games. The logo of ´Samsung´ now appears on the famous Chelsea shirts. Peter Kenyon said at the time: ―We are absolutely delighted to have Samsung as our new official club sponsor. The company is one of the world´s largest brand names, and we are excited about what it can offer Chelsea.‖ 'Samsung has a key part to play in the future global development of Chelsea and we believe we can play a similar role for it in its strategic aims. There is a great synergy between the two brands in terms of recent dramatic growth and success, levels of performance and market targets.'
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4.6 Direct Mail Samsung even uses Direct Mail concept for its product promotion. Samsung sends mail to target consumers depending on the database i.e. the frequency of site visit and on their purchases. Samsung is very actively involved in e- commerce.
4.7 Distribution Channels Samsung uses supply chain to enhance differentiation, increase sales and penetrate new markets and channels. Its supply chain is beneficial in several ways. It helps the company to deliver products to the customer faster. It efficient supply chain is transparent, so that all the players in the supply chain have the right information at the right time about the movement of the products within the chain. This means lower inventories, elimination of waste, and reductions of costs. In addition to the intangible benefits like quick feedback from customers help in launching new products. Samsung has 24 state-level distribution offices and a direct dealer interface. The direct dealer interface helps the company to get quick feedback from dealers, and enables it to launch products according to consumer needs. To minimize time overruns, Samsung delivered its products directly from its factories to its Regional Dispatch Centers (RDCs), and from there to dealers. Samsung has sales and service networks all over India and 650 service points. Samsung has implemented an innovative logistics system – Global Logistics Network Systems (GLONETS). GLONET application is used on the B2B i.e. Business to Business front for the vendors. This involved linking the key vendors, which form the bulk of Samsung‘s sourcing (26 domestic and 30 international) through Samsung‘s GLONET. This system enables Samsung to connect its purchase department with the Samsung headquarters and international procurement offices through integrated ERP systems. The integrated ERP system enables Samsung to purchase its requirements from its international procurement offices and also from its Indian vendors. This application is also extended to order placement, production plan sharing and invoicing, resulting in shorter business cycles and reduced inventory levels and low waste.
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In addition to GLONETS, Samsung also believes in JIT (Just-in-Time) concept to its dealers. To make delivery of products within 48 hours of the expected date of delivery, the company has setup four RDCs, one at each regional location of the country. The distribution channel is structured very systematically wherein all the transactions and business conducted is documented. The program is based on incentives so that dealer payments can be made on time. The Company supplies its goods to the Star Elite who supplies goods to the distributor who in turn sell the goods via their own channel of retailers and distributors. The Samsung Brand shop network complements the over 8500 retail points for Samsung products located across the length and breadth of the country. Samsung plans to continue enhancing its penetration levels in the country to reach out to more and more Indian consumers. They consider the Star Elite partner as their actual product champion as their link with the end customer. As, they have been adding value to the sale to the customer and guiding him to the right purchase decision at a fair price.
Shop-in-shop:
Samsung is ensuring a presence in most big malls and multiplexes; even in the multi-brand outlets, as the focus there is to create a shop-in-shop atmosphere.
The exclusive showrooms:
Keeping its target customer to display Samsung products in a more lifestyle ambience and to communicate the product benefits in a more interactive manner, Samsung India has set up a widespread network of over 80 exclusive showrooms comprising Samsung Digital Zone (focusing on high-end digital audio-video products such as MP3 players, camcorders and LCD/plasma TVs). The Samsung DigitAllhome goes beyond the concept of a Digital Plaza or a Brand Shop because in the DigitalAllhome, they are trying to create a more interactive environment and providing a more lifestyle orientation to the display, so that the customer can visualize the products in his/her own home settings. The Company plans to supplement its existing Samsung Digital Plazas' (Brand Shops) by setting up 'Samsung DigitAllhomes' in select cities. The Company will also be creating exclusive Samsung corners in multibrand outlets this year.
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The demands and needs within the distribution channel lead to the establishment of MyMemoryStore.com. The site is more than an ordinary selling site, infact it is an industry portal that allows the business partner to come in and track the relevant industry information within the channel, meaning minimizing the inventory overhead.
Samsung is also planning to invest over $1 million in setting up a chain of exclusive outlets called `Samsung Talkies'. The entire Samsung mobile range including the latest handsets will be displayed at the outlets, which will be set up in more than 10 cities across India, including Bangalore, Mumbai and Hyderabad. Post VAT they have modified in their policies a bit. The most important step was to bring down channel inventory post the Budget impact and the VAT impact. They made a conscious decision to bring down channel inventory, which was at that point of time 60 days, today it is reduced to 11 days, which entails total inventory among dealers, distributors, star elite and SI. This has been done to ensure that the channel stays profitable.
Samsung India tied up with PlanetM for displaying its new audio range at the PlanetM Outlets in Delhi, Mumbai, Kolkata, Pune, Chandigarh and Bangalore.
4.8 Pricing Pricing also seemed to have played a significant role in Samsung‘s success. Differentiation is the key for a brand to be preferred by consumers, when there are so many brands within the same product category. Samsung believes in providing good products at reasonable prices to its customers. Samsung‘s technology plank communications helped the company to gain market share, even though it did not offers any discounts or exchange scheme when it entered India. Samsung focuses on cost-cutting measures to keep its price low which helps to combat the discount schemes of the local companies. For e.g.- In 2001, due to high competition in the 20‖CTV segment, Samsung had to resort to price cuts. The company said that value engineering, new product lines and new chassis development had contributing in combating price erosion. Samsung negotiated with its vendors to reduce costs on cabinets, plastics, speakers, harness coils, remote controls, etc. Samsung‘s Brand image seemed to have helped it survive the price erosion. Dealers also agreed to lower margins owing to company‘s brand image. 56 | P a g e
Samsung in the year 2002, drastically reduced its operational costs which enabled the company to keep low prices for certain products and extract higher profit margin from premium products. This helped Samsung to post a turnover of Rs.30bn, a 2 growth from the year 2001. Samsung is very transparent in functioning. It has a fixed MoP (Marketing Operating Price) whereby the goods are sold to the distributors and to the customer‘s at a fixed market price only.
The focus of its competitors is to penetrate in the rural and semi-urban mass markets. But Samsung insists that it's a high end technology driven player. That's why the urban areas are still a focus area for it and only 30 per cent of revenue comes from rural and semi-urban India. They have always been a hi-end technology driven player and want to keep that equity.
Not surprisingly, the target customer for Samsung products won‘t be found in the pricesensitive mass market. Adopting the lifestyle product platform, Samsung‘s aiming for the high-end premium market. Hence Samsung has always been keeping premium prices. Samsung claims it‘s never been a price warrior — its focus has always been on the premium market, which is why it has remained a steady No. 2 or No. 3 player in most product categories.
It is difficult to achieve the ambitious targets keeping in mind the pricing strategy of Samsung. But, they believe that it takes time to ensure your supremacy in market share. Once you get your brand perception right in the minds of the consumers as a brand that delivers the best technology and gives you value for money, then ultimately market share goes up.
Later on Samsung changed its policy a bit and instead of just remaining a high-end technology driven brand it tried to change its image to sell products to the huge number of middle income families in India. It started pricing its products on the ―value for money‖ concept, keeping in mind the price sensitivity of Indian consumers.
But still Samsung has the repute of being a premium brand, aggressive in launching newer models with the latest technology and at economic costs throughout the world.
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Future Prospects We have done a survey at retail outlets selling Samsung products and one thing that we found out common is that Samsung lacks in after sales service. The drawback in their after sales service strategy is that they have only one customer service centre throughout India which is situated in Delhi. When a customer has a complaint he approaches his retailer who in turn registers the complaint in the Delhi service centre from where the complaints are processed and replacements are made.
The presence of only one service centre makes it very difficult to give timely response as the complaints come throughout India. The complaints are not entertained for a period of 10 -15 days. Hence the customer is not satisfied with the after sales service of Samsung.
Marketing Strategy Samsung has to improve its after sales service in order to retain customer and create brand loyalty. The current policy adopted by Samsung is aggressive spending more on advertising and marketing and less on retaining customers that is after sales service.
So the corrective strategy to be adopted by Samsung must be to spend more on retaining customer rather than acquiring them as it costs 5 times more to the company to get to a new customer rather than pleasing existing ones. Moreover it costs 16 times to take the new customer to the loyalty stage. They should have regional service centres in North, South, East, East, West where the complaints can be received and processed quickly. Moreover they should employ and train the technicians to provide quality and timely sales service.
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Strategy to Expand Market Share Currently Samsung ranks second in the Indian consumer durable market whereas LG ranks first. The problem with Samsung is that it is a premium brand and focuses only on urban and semiurban markets whereas the rural market is neglected to a great extent which is why LG is dominating in that market. Samsung earns revenue of only 30% from rural areas. India being a country of villages, Samsung should focus more in the rural market in order to increase its market share. Samsung should come out with new economic products like LG had taken out ―Sampurna‖ television range aimed only for the rural market. Hence Samsung could have come up with a conventional range of television models which although are no very technologically advanced but fulfills the basic needs. All these strategies are very practical promising higher gains with less cost pains.
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FINDINGS AND SUGGESTIONS FINDINGS Q.1 Are you user of SAMSUNG Home Product?
60% YES 40%
NO
.
It shows that 60 % people are user of SAMSUNG home Products And 40% people don‘t use SAMSUNG home products
Q. 2 By which Medium you come to know about SAMSUNG? 5% 20% Advertisement Family Member
60%
15%
Friends/Relative/Neighbour Other Source
It
shows
that
60%
of
people
know
about
SAMSUNG
through
Advertisement,15% through Family Member ,20% through Friends/Relative/Neighbors And 5% through Other Sources 60 | P a g e
Q. 3 Have you seen any SAMSUNG‘s ad?
10%
Yes No 90%
It shows that 90% of people have seen SAMSUNG Ad and 10% people have not seen SAMSUNG Ad
Q. 4 Which advertisement feature influenced you most in a particular Ad?
10% 30%
20%
Concept/Message Logo/Slogan Picturisation Overall 40%
It shows that 30% people were influenced by Concept/Message,40% people were influenced by Logo/Slogan ,20% people were influenced by picturization and 10% people were influenced by the Overall ad.
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Q. 5 How do you like of the marketing of SAMSUNG?
15% 40% Impressive Satisfactory 45%
Unsatisfactory
It shows that 40% people say Marketing of Samsung was Impressive,45% said satisfactory and 15% said it unsatisfactory.
Q. 6 What makes you recall SAMSUNG ?
15% 35% Logo/Slogan
20%
Message Presentation of Ad 30%
Model/Celebrity
It shows that 35% of people recall SAMSUNG by its Logo/Slogan,30% by Message,20% by Presentation of Ad and 15% by Model/Celebrity.
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Q.7 Did you went to go exclusive SAMSUNG‘s Showroom?
35%
Yes 65%
No
It shows that 65% of people went SAMSUNG showroom and 35% Dint went to Showroom.
Q.8 Does the advertisement reflect actual product profile?
15%
Yes No 85%
It shows that 85% of people say that the advertisement reflect actual product profile and 15% say No.
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Q. 9 Based on the price range what impression do you carry of SAMSUNG
product?
30%
40% Economical Costly Neither Economical nor Costly
30%
It shows that 40% people found the price range as Economical,30% found it costly and 30% found it Neither Economical nor Costly Q.10 Are you happy with After Sales Service of SAMSUNG?
80%
Yes No 20%
It shows that 80% of people are happy with the after sales service of SAMSUNG and 20% people are Not happy
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SUGGESTIONS
Company should improve the after sales service of products as it is the main factor for the sales of consumer products.
Company should constantly get innovative in advertising its products, mainly focusing on Value it will bring to the customer after buying the product
Company can use some of the marketing tactics like distributing free key chain, calendar, t-shirts for making brand popular among people
Company can introduce low price and low power consumption Refrigerator‘s for acquiring the lower middle income group to increase their market base
Dealer‘s desire more advertisement to be done through local newspaper and cable TV ads to make consumers aware about the product.
Advertisements of the company‘s products should focus on quality and main features.
Proper Segmentation should be done and accordingly marketing strategies should be planned for premium products.
Welcome call as well as follow up call will help the company to maintain customer relationship; hence the company should focus on such softer these aspects.
Establish the service center as per taluka place for easy accessibility to consumers.
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Conclusion
With respect to the above study and the findings thereby are that the company has definitely entrenched into the urban market.
With few more concerted efforts, the said organization needs to enter the rural market in order to completely establish itself all over.
Customer Service and Satisfaction are of utmost important in this highly Competitive market
Value Proposition should be created in the eyes of the customer to gain Loyalty which will in turn help to sustain and be a Leader in the Market
Constant Investment in R&D will help an Organization to get Innovative products in the market and in turn lead to higher Customer Satisfaction.
Brand Recall is of utmost importance and the Company should make efforts to increase the same
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QUESTIONNAIRE PROJECT TOPIC: - ―MARKETING STRATEGIES OF SAMSUNG‖
RESPONDENT PROFILE
Name:Sex:-
Male
[
],
Female [
]
Age Group:-
15 to 25 [
],
25 to 35 [
],
45 to55 [
],
55 and above
Q. 1
Q. 3
[
]
[
]
No
[
]
By which Medium you come to know about SAMSUNG? Advertisement
[
]
Family Member
[
]
Friends/Relative/Neighbour
[
]
Other Source
[
]
Have you seen any SAMSUNG‘s ad? Yes
Q. 4
]
Are you user of SAMSUNG Home Product? Yes
Q. 2
35 to 45 [
[
],
No
[
]
Which advertisement feature influenced you most in a particular Ad? Concept/Message
[
]
Logo/Slogan
[
]
Picturisation
[
]
Overall
[
]
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Q. 5
Q. 6
Q.7
How do you like of the marketing of SAMSUNG? Impressive
[
],
Unsatisfactory
[
]
[
]
Logo/Slogan
[
]
Message
[
]
Presentation of Ad
[
]
Model/Celebrity
[
]
What makes you recall SAMSUNG ?
Did you went to go exclusive SAMSUNG‘s Showroom? Yes
Q. 8
[
],
No
[
]
Does the advertisement reflect actual product profile? Yes
Q. 9
Satisfactory
[
],
No
[
]
Based on the price range what impression do you carry of SAMSUNG product? Economical
[
],
Neither Economical nor Costly
Costly
[
]
[
]
Q.10 Are you happy with After Sales Service of SAMSUNG?
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