CONTENTS
PREFACE ACKNOWLEDGEMENT CERTIFICATE DECLARATION 1.Chapter -1 a. b. c. d. e.
Introduction History Mission and Vision Brand Value Standing position of the company
2. Chapter-2 a. Objective of the study 3. Chapter-3 a. Research Methodology 4. Chapter -4 a. Products 5. Chapter -5 a. Market Analysis b. Marketing Strategies c. Marketing Mix 6. Chapter -6 a. About Competitors 7. Chapter – 7 a. Data Analysis and Interpretation 8. Limitation 9. Recommendation & Suggestions 10. Conclusion 11. Bibliography
INTRODUCTION
1
Before the liberalization of the Indian economy, only a few companies like Kelvinator, Godrej, Alwyn, and Voltas were the major players in the consumer durables market, accounting for no less than 90% of the market. Then, after the liberalization, foreign players like LG, Sony, Samsung, Whirlpool, Daewoo, and Aiwa came into the picture. Today, these players control the major share of the consumer durables market. Consumer durables market is expected to grow at 10-15% in 2007-2008. It is growing very fast because of rise in living standards, easy access to consumer finance, and wide range of choice, as many foreign players were entering in the market with the increase in income levels, easy availability of finance, increase in consumer awareness, and introduction of new models, the demand for consumer durables has increased significantly. Products like washing machines, air conditioners, microwave ovens, color televisions (C-TV) were no longer considered luxury items. However, there were still very few players in categories like vacuum cleaners, and dishwashers Consumer durables sector is characterized by the emergence of MNCs, exchange offers, discounts, and intense competition. The market share of MNCs in consumer durables sector is 65%. MNC's major target is the growing middle class of India. MNCs offer superior technology to the Consumers whereas the Indian companies compete on the basis of firm grasp of the local market, their well-acknowledged brands, and hold over wide distribution network. However, the penetration Level of the consumer durables is still low in India. Indian Consumer durables market sused to be dominated by few domestic players like Godrej, Voltas, Allwyn and Kelvinator. But post liberalization many foreign companies have entered into Indian market dethroning the Indian players and dominating Indian market the major categories being CTV, REFRIGRATOR, MICROWAVE OVEN and WASHING MACHINES.
2
INDUSTRY PROFILE The Consumer Durables industry consists of durable goods and appliances for domestic use such as televisions, refrigerators, air conditioners and washing machines. Instruments such as cell phones and kitchen appliances like microwave ovens were also included in this category. The sector has been witnessing significant growth in recent years, helped by several drivers such as the emerging retail boom, real estate and housing demand, greater disposable income and an overall increase in the level of affluence of a significant section of the population. The industry is represented by major international and local players such as BPL, Videocon, Voltas, Blue Star, MIRC Electronics, Titan, Whirlpool, etc. The consumer durables industry can be broadly classified into two segments: Consumer Electronics and Consumer Appliances. Consumer Appliances can be further categorized into Brown Goods and White Goods. The key product lines under each segment were as follows. Industry Size, Growth, Trends The consumer durables market in India was estimated to be around US$ 5 billion in 2007-08. More than 7 million units of consumer durable appliances have been sold in the year 2006-07 with colour televisions (CTV) forming the bulk of the sales with 30 per cent share of volumes. CTV, refrigerators and Air-conditioners together constitute more than 60 per cent of the sales in terms of the number of units sold. In the refrigerators market, the frost-free category has grown by 8.3 per cent while direct cool segment has grown by 9 per cent. Companies like LG, Whirlpool and Samsung have registered double-digit growth in the direct cool refrigerator market. In the case of washing machines, the semi-automatic category with a higher base and fullyautomatic categories have grown by 4 per cent to 526,000 units and by 8 per cent to 229,000 units, respectively. In the air-conditioners segment, the sales of window ACs have grown by 32 per cent and that of split ACs by 97 per cent.
3
Since the penetration in the urban areas for these products is already quite high, the markets for both C-TV and refrigerators were shifting to the semi-urban and rural areas. The growth across product categories in different segments is assessed in the following sections. Consumer Electronics The CTV production was 15.10 million units in 2007-08 and is expected to grow by at least 25 per cent. At the disaggregated level, conventional CTV volumes have been falling while flat TVs have grown strongly. Market sources indicate that most CTV majors have phased out conventional TVs and have been instead focusing more on flat TVs. The flat segment of CTVs now account for over60 per cent of the total domestic TV production and is likely to be around 65 per cent in 2007-08.High-end products such as liquid crystal display (LCD)and plasma display CTV grew by 400 per cent and 150 per
4
COMPANY PROFILE OF SAMSUNG ELECTRONICS Samsung
Electronics
Co.,
Ltd. is
a
South
Korean multinational
electronics company
headquartered in Suwon, South Korea.[2] It is the flagship subsidiary of the Samsung Group and the world's largest information technology company by revenues since 2009.[3] Samsung Electronics has assembly plants and sales networks in 61 countries and employs around 221,000 people.[4] Samsung Electronics is the world's largest mobile phone maker by 2011 unit sales and world's second-largest semiconductor chip maker by 2011 revenues (after Intel Corporation). It has been the world's largest television manufacturer since 2006 and the world's largest maker of LCD panels for eight consecutive years.[5] It has the largest market share worldwide in memory chips. [6]
The company was the world's largest vendor ofsmart phones in 2011.[7] Samsung has also
established a prominent position in the tablet computer market, with the release of the Androidpowered Samsung Galaxy Tab.
5
SAMSUNG HISTORY 1969 to 2000 Samsung Electric Industries was established as a subsidiary of Samsung Group in 1969 in Suwon, South Korea.[9] Its early products were electronic and electrical appliances including televisions, calculators, refrigerators, air conditioners and washing machines. In 1970, Samsung Group established another subsidiary, Samsung-NEC, jointly with Japan's NEC Corporation to manufacture home appliances and audiovisual devices. In 1974, the group expanded into the semiconductor business by acquiring Korea Semiconductor, one of the first chip-making facilities in the country at the time. The acquisition of Korea Telecommunications, an electronic switching system producer, was completed at the start of the next decade in 1980. By 1981, Samsung Electric Industries had manufactured over 10 million black-and-white televisions. In February 1983, Samsung's founder, Lee Byung-chull, made an announcement later dubbed the "Tokyo declaration," in which he declared that Samsung intended to become a DRAM (dynamic random access memory) vendor. One year later, Samsung became the third company in the world to develop a 64kb DRAM. In 1988, Samsung Electric Industries merged with Samsung Semiconductor & Communications to form Samsung Electronics. Samsung Electronics launched its first mobile phone in 1988, in the South Korean market. Sales were initially poor and by the early 1990s Motorola held a market share of over 60 percent in the country's mobile phone market compared to just 10 percent for Samsung. [10] Samsung's mobile phone division also struggled with poor quality and inferior products until the mid-1990s and exit from the sector was a frequent topic of discussion within the company. Samsung Electronics acquired a 40 percent stake in AST Research, a United States-based personal computer maker, for US$378 million in February 1995. In 1996, the company devised a plan to sponsor major sporting events, resulting in it becoming an official sponsor for the 1998 Winter Olympics held in Nagano, Japan.[12] In December 1998 Samsung Electronics agreed to sell its power-device division to Fairchild Semiconductor Corporation for US$455 million.
6
2000 to 2010
The Samsung display at the 2008 Internationale Funkausstellung in Berlin For four consecutive years, from 2000 to 2003, Samsung posted net earnings higher than fivepercent; this was at a time when 16 out of the 30 top South Korean companies ceased operating in the wake of the unprecedented crisis.[14][15] In 2005, Samsung Electronics surpassed Japanese rival, Sony, for the first time to become the world's twentieth-largest and most popular consumer brand, as measured byInterbrand. In 2007, Samsung Electronics became the world's second-largest mobile-phone maker, overtaking Motorola for the first time. In 2009, Samsung achieved total revenues of US$117.4 billion, overtaking Hewlett-Packard to become the world's largest technology company measured by sales. In 2009 and 2010, the US and EU fined the company, together with eight other memory chip makers, for its part in a price-fixing scheme that occurred between 1999 and 2010. Other companies fined included Infineon Technologies, Elpida Memory and Micron Technology. In December
2010,
the
EU
granted immunity to
Samsung
Electronics
for
acting
as
an informant during the investigation (LG Display, AU Optronics, Chimei InnoLux, Chunghwa Picture Tubes and HannStar Display were implicated as result of the company's intelligence). 2010 to present Despite consistent growth, Samsung, along with its chairman Lee Kun-hee, has developed a reputation for insecurity regarding its financial stability and the potential for future crises to arise. After returning from a temporary retirement period in March 2010, Kun-hee stated that "Samsung Electronics' future is not guaranteed because most of our flagship products will be obsolete in 10 years from now." 7
Samsung has emphasized innovation in its management strategy since the early 2000s and it again highlighted innovation as part of core strategies when it announced the Vision 2020 in which the company set an ambitious goal of reaching $400 billion in annual revenues within ten years. In order to cement its leadership in the areas of memory chip and television production, the company has invested aggressively in research and development. The company has 24 research-and-development centers around the world. In April 2011, Samsung Electronics sold its HDD commercial operations to Seagate Technology for approximately US$1.4 billion. The payment was composed of 45.2 million Seagate shares (9.6 percent of shares), worth US$687.5 million, and a cash sum for the remainder. In the first quarter of 2012, the company became the highest-selling mobile phone company when it overtook Nokia, selling 93.5 million units compared to Nokia's 82.7 million units. Samsung also became the largest smartphone vendor as a result of strong sales of its Galaxy SII and Galaxy Note devices.
8
VISSION AND MISSION
Our Vision Samsung is guided by a singular vision: to lead the digital convergence movement. We believe that through technology innovation today, we will find the solutions we need to address the challenges of tomorrow. From technology comes opportunity for businesses to grow, for citizens in emerging markets to prosper by tapping into the digital economy, and for people to invent new possibilities. It’s our aim to develop innovative technologies and efficient processes that create new markets, enrich people’s lives and continue to make Samsung a trusted market leader Our Mission Everything we do at Samsung is guided by our mission: to be the best “digital-Company”.
9
Samsung grew into a global corporation by facing challenges directly. In the years ahead, our dedicated people will continue to embrace many challenges and come up with creative ideas to develop products and services that lead in their markets. Their ingenuity will continue to chart Samsung’s course as a profitable, responsible global corporation.
10
BRAND VALUE At Samsung, we follow a simple business philosophy: to devote our talent and technology to creating superior products and services that contribute to a better global society. Every day, our people bring this philosophy to life. Our 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 our 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 is all about. Our Values 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.
11
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, anticipating market needs and demands so we can steer our company toward long-term 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.
12
STANDING POSITION OF THE COMPANY Samsung India aims to be the ‘Best Company’ in India by the Year 2011. ‘Best Company’ in terms of both the internal workplace environment as well as the external context in which the Company operates. Samsung aims to grow in India by contributing to the Indian economy and making the lives of its consumers simpler, easier and richer through its superior quality products. “Our aim is to gain technological leadership in the Indian marketplace even as our goal is to earn the love and respect of more and more of our Indian consumers.” Mr. S.H. Oh, President & CEO Samsung South-West Asia Regional Headquarters. 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 Colour Televisions, Colour Monitors, Refrigerators and Washing Machines is located at Noida, near Delhi. Samsung ‘Made in India’ products like Colour Televisions, Colour 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.
13
SAMSUNG GLOBAL The DNA of Digital Innovation Samsung Electronics is a global leader in semiconductors, telecommunications, digital media and digital convergence technologies with 2004 parent company sales of US$55.2Bn and net income of US$10.3Bn. Employing approx. 113,000 people in over 90 offices in 48 countries, the company has of 5 main business units: Digital Appliance Business, Digital Media Business, LCD Business, Semiconductor Business and Telecommunication Network Business. Recognized as one of the fastest growing global brands, Samsung Electronics Corporation is the world’s largest pro ducer of Colour Monitors, Colour TVs, Memory Chips and TFT LCD’s. Customized products for Indian Consumers Samsung understands the local cultural sensibilities to customize its products according to the Indian market. It has set up a “usability lab” at the Indian Institute of Technology in New Delhi to customize Samsung products to meet the specific needs of Indian consumers. This industryinstitute partnership is helping Samsung to study and analyze consumer response in aspects of product design, including aesthetics, ergonomics and interface. Through its research done on consumer preferences in India, Samsung has concluded that Indian consumers want more sound oriented products. Thus, the Samsung televisions for India have a higher sound capacity than their foreign counterparts. For the semi-automatic segment of Samsung washing machines, Samsung has introduced for the first time in India a feature called Super Dry. It is present in three of Samsung’s semi automatic models and dries the clothes better than the rest. Samsung washing machines have an additional menu that takes care of the local Indian wardrobes. They also have a ‘memory re-start’ that takes care of the frequent power failures in India.
14
OBJECTIVES OF THE PROJECT
To know about the marketing strategies of Samsung Electronics.
To know about the product and price of Samsung electronics.
To find number of brands of consumer durable in Sagar district.
To study brand preference of consumer for consumer durable goods..
To find most important parameter for selection of brand of Colour television, Refrigerators, Washing machine, DVD, Microwave oven.
To study profit margin of major brands in consumer durable.
15
RESEARCH METHODOLOGY
Research methodology is considered as the nerve of the project. Without a proper wellorganized research plan, it is impossible to complete the project and reach to any conclusion. The project was based on the survey plan. The main objective of survey was to collect appropriate data, which work as a base for drawing conclusion and getting result.
Therefore, research methodology is the way to systematically solve the research problem. Research methodology not only talks of the methods but also logic behind the methods used in the context of a research study and it explains why a particular method has been used in the preference of the other methods
Research design Research design is important primarily because of the increased complexity in the market as well as marketing approaches available to the researchers. In fact, it is the key to the evolution of successful marketing strategies and programmers. It is an important tool to study buyer’s behavior, consumption pattern, brand loyalty, and focus market changes. A research design specifies the methods and procedures for conducting a particular study. According to Kerlinger, “Research Design is a plan, conceptual structure, and strategy of investigation conceived as to obtain answers to research questions and to control variance.
Research design specifies methods and procedures for study. In this study the company was interested to know the demand of different consumer durable product, about competitors, and potential for SAMSUNG procedures to be used for the study among retailers/dealer and. However it was exclusively personal interview.
16
Data Collection: This report was prepared after collecting data from the retailers/ dealers and past data was arranged from the various studies conducted in last few years and various other records of company.
Primary Data: These data were collected by personal interview with retailers/ dealer. For this purpose questionnaires were prepared in such that all necessary data would be collected.
Secondary Data: Information regarding the project, secondary data was also required. These data were collected from various past studies and other sources of the company.
SAMPLING METHOD Random Sampling method
SAMPLE SIZE 100 Customers
Research tools: Questionnaires
RESEARCH AREA SAGAR DISTRICT
17
PRODUCT PROFILE
650 Series Full HD LC D TV Developed using our unique Crystal Design with a hint of rose-red color accentuating a traditional piano-black bezel frame, the 650 Series LCD TV features Auto Motion Plus 120Hz, an Ultra Clear Panel, DNIe Pro and Wide Color Enhancer Pro to provide perfect picture quality.
Wide Video MP3 Player (YP-P2) Equipped with Bluetooth and a touch screen interface, the YP-P2 lets consumers enjoy vivid videos on a 3-inch wide LCD screen. Samsung’s proprietary DNSe 2.0 technology with EmoTure™ UI enhances the ultimate multimedia experience.
18
VRT Front Loading Washer Designed with Vibration Reduction TechnologyTM (VRT), our washer dramatically reduces barrel vibration—even at the highest speed. It also reduces energy and water consumption to the world’s lowest levels. Further, we’ve enhanced washing performance and eco-friendly performance with a diamond-shaped embossing drum.
6-in-1 Steam Oven Simple, yet stylish, our 6-in-1 steam oven combines all of the features of a conventional oven with advanced steam cooking technology to stimulate healthier eating. Samsung’s versatile steam cooking solution adds a steam function to the conventional oven, grill and microwave, as well as dry heat and fermenting.
19
Haptic Touch Screen Phones (SC H-W420/W4200) Built with TouchWiz UI software, our Haptic model promises a unique user experience, one that touches all of the senses. The Samsung Haptic features one-touch access, a widget for creating customized desktops and a G sensor for automatic horizontal rotation of photos and videos. It is designed for the innovative, ‘on-the-go’ user who demands cutting-edge multimedia features, including a web browser.
Ultra-messaging BlackJack II (SG H-i617) Microsoft’s Windows Mobile software-enabled HSDPA smart phone boasts a bigger screen than the BlackJack I and includes a jog wheel. The phone also has cuttingedge features such as a touch screen, Bluetooth, GPS and wireless LAN
20
MARKET ANALYSIS Product Innovation Samsung's product range in India included CTVs, audio and video products, information technology products, mobile phones and home appliances (Refer Exhibit I). Its product range covered all the categories in the consumer electronics and home appliances. Analysts felt that the wide product range of Samsung was one of main reasons for its success in the Indian market. Samsung positioned itself on the technology platform... Pricing Pricing also seemed to have played a significant role in Samsung's success... Distribution Along with the launch of new products, Samsung also consolidated its distribution system. Samsung had 18 state-level distribution offices and a direct dealer interface. The direct dealer interface helped the company get quick feedback from dealers, and enabled it to launch products according to consumer needs... Advertising and Sales Promotion In 1995, when Samsung entered India, it realized that Indian consumers were not familiar with the company. So, in order to establish itself in the Indian consumers' mind, Samsung launched corporate advertisements highlighting its technologically superior goods... We are investing aggressively in marketing to transform our company to be truly market driven and to establish our Samsung brand as the most trusted and preferred brand in the market." -
Jong Yong Yun, vice-chairman & CEO, Samsung Electronics, in February 2003.
The "Team Samsung India First" Campaign
21
In August 2010, India's leading consumer electronics player, Samsung India Electronics Ltd. (Samsung) announced the signing on of seven celebrity cricketers - 'Team Samsung', as its brand ambassadors. In doing this, it aimed to cash in on the popularity of cricket in India. However, the company's hopes of celebrity endorsement received a setback due to anti-ambush marketing clauses 2, arising from
ICC's
agreement
with
some
other
companies.
In place of the ads featuring the cricketers, Samsung launched its - 'Team Samsung. India First' campaign all over the country in December 2010. Said Arun Mahajan of Mudra, Samsung's ad agency, "The focus has been to evolve concepts to do with the players, to promote the cause of cricket and patriotism.'' The copy of the print ad read, 'With Team Samsung, It's India First.'' Samsung - The Making of a Global Brand The Making of a Global Brand In 1993, as a first step in its globalization drive, Samsung acquired a new corporate identity. It changed its logo and that of the group. In the new logo, the words Samsung Electronics were written in white color on a blue color background to represent stability, reliability and warmth. The words Samsung Electronics were written in English so that they would be easy to read and remember worldwide. The logo was shaped elliptical representing a moving world - symbolizing advancement and change... Product Initiatives Samsung realized that to become a global brand, it had to change the perceptions of consumers who felt that it was an OEM player and associated its products with low technology. Generally, consumers in developed markets (such as the US) opted for Samsung when they could not afford brands such as Sony and Panasonic. To change consumer perceptions, Samsung decided to focus on product design and launch innovative products... 22
Consolidating Presence in Different Markets To change its brand image, Samsung decided to associate itself with global sport events. In 1998, when Seoul hosted the Olympics, Samsung became the official sponsor of the wireless technology to the games. This move helped it boost its image worldwide. In 1999, Erick Kim (Kim), a Korean American working with IBM, took over as the marketing head of Samsung. He focused on capturing the US retail market for consumer electronic goods, such as TVs, washing machines and microwave ovens, through partnerships with US retailing giants. Samsung entered into a partnership with Best Buy one of the top US retailers. Best Buy executives conducted customer research to analyze consumer-buying behavior... Advertising and Promotional Strategies In 1997, Samsung launched its first corporate advertising campaign - Nobel Prize Series. This ad was aired in nine languages across Europe, the Middle East, South America and CIS countries. The advertisement showed a man (representing a Nobel Prize Laureate) passing from one scene to another. As the man passes through different scenes, Samsung products transform into more advanced models. According to company sources, the idea was to convey the message that Samsung uses Nobel Prize Laureates' ideas for making its products... Beating Sony? In 2001, Samsung declared that it would beat Sony in the consumer electronics market by 2005. Kim said, "We want to beat Sony. Sony has the strongest brand awareness; we want to be stronger than Sony by 2005." However, analysts felt that it would be difficult for Samsung to beat Sony so soon as Samsung was regarded as an OEM player till the mid-1990s. In 20010, while Samsung was ranked 34th with a brand value of $8.1 billion, Sony was ranked 21st with an estimated brand value of $13.90 billion. However, while Samsung's rank had moved up from 42 in 2010, Sony's had slipped down from 20 th in 2010. In the third quarter of 2010, Samsung emerged as the world's number three player in the mobile market, beating Siemens and Ericsson, with a marketshare of 36.4%... 23
MARKETING STRATEGIES OF SAMSUNG Scenario in the consumers Durables sector:Prior to liberalisation, 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. 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. Entry of Samsung in India Emerging Markets (EMs) with large consumer bases and untapped demand constitute the major growth opportunities for the multinationalsand 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,
24
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 2010, 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 electronic 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."
MARKETING MIX OF SAMSUNG 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
25
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 appliances
Microwave Oven
Refrigerator
Air Conditioner
Washing Machine
TV, video & audio
TV
DVD Player
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Camcorder
Audio
Home Theater
Digital Audio Player
Digital Still Camera
Mobile Phones
GSM
CDMA
Information technology products
Note PC
HDD
CD Rom & DVD Rom Drive
CD & DVD Read & Write Solution
Monitors
Laser Printers & Laser Based MFPs
Fax
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. 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.
27
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 2010, Samsung’s ads focused on the technological supremacy of its products. But by late 2010, 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. 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 2010, 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 worth Rs. 100 mn, which included Samsung digital flat TVs, frost free refrigerators, microwave ovens, Karisma washing machines, mobile phones, cameras and Soccer 2010 official licensed T-shirts from Adidas. This campaign notched up sales worth Rs.310 Crores during the period of the Promotion.
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The next major promotional campaign was the Phir Se Phod Ke Dekho offer. The offer was launched during October-November 2010 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 the
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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 cellphone keypad, complete with punctuation marks and lower & upper case. No predictive text (T9 Dictionary), QWERTY keyboards/ any keyboard was allowed. 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
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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. Samsung in the year 2010, 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.
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ABOUT COMPETITORS 1. LG 2. PHILLIPS 1. LG
LG Corporation (Korean: LG 법인) is a SouthKorean multinational conglomeratecorporation. It is the second-largest company of its kind in South Korea, followingSamsung, and its headquarters are situated in the LG Twin Towers building in Yeouido-dong, Yeongdeungpogu, Seoul. LG makes electronics, chemicals, and telecom products and operates subsidiaries such as LG Electronics, Zenith, LG Display, LG Telecom and LG Chem in over 80 countries.
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2. PHILLIPS Philips India was incorporated in 1930 as a private limited company under the name Philips Electricals Company (India) by N V Philips Gloeilampenfabrieken, Eindhoven, the Netherlands. It acquired its present name in 1956, after privatisation and was converted into a public limited 33
company in 1957. Initially, the company commenced by trading in radios and subsequently, set up plants to manufacture consumer electronics, electronic components, industrial electronics and lighting. The company is also into office automation products. Its consumer electronic products are manufactured at its plants in Pimpri and Kolkatta. Electronic components, passive devices and printed circuit boards for consumer electronic products are manufactured at Loni, Pune. The company supplies components to other companies as well. The Kalwa (Thane) plant manufactures a range of lamps such as GLS lamps, fluorescent lamps, mercury vapour/sodium vapour lamps and their components such as glass shells, filament wires, etc. The company diversified into the telecommunications segment to manufacture two-way radios and pagers. It set up a joint venture project with Webel Telecommunications in Calcutta in which it has a 51% stake. It is acquiring a 4% stake in Punjab Anand Lamps and Industries from the co-promoters, Anand & Associates. Philips India has sold off its non-ceramic passive components business at Loni near Pune to the Netherlands-based B C Components International for Rs 32.5 cr. Also, the colour television factory at Salt Lake , Calcutta to the Videocone group. Currently, all the company's manufacturing facilities have been actively involved in the implementation of the Philips Global Environmental Policy and the Eco-Vision Programme. The parent company, Royal Philips Electronics N.V Netherlands, had made an open offer to buy Philips India's shares from the public at Rs 105. The offer ended on 12 Dec 2000. After the offer, the parent company has an 82.86% stake in the company now. The company's Lighting Division has maintained its contract record of being the preferred supplier of high quality lighting systems to prestigious projects like,the Pondicherry Cricket stadium,the Guru Nanak Stadium etc. The Amalgamation of
Philips
Glass
India
Ltd,Electric
Lamp
Manufacturers(India) Ltd and Punjab Anand Lamp Industries Ltd with the Company was sanctioned by the all the 3 states High Courts effective from 26th April,2003. The company introduced cost effective products like Juicer Mixer Grinder and DIVA range of lightweight dry irons and the same well accepted in the market. The company is expecting to register higher growth by the introudction of CAS a driving demand for set top boxes. The company was awarded The Most
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Respected Company in India in the Consumer Durables for 2002 by Businessworld Magazine. The Company is also divested to Communication, Security and Imaging (CSI) in January 2003.
DATA ANALYSIS AND INTERPRETATION Q.1 ARE YOU AWARE ABOUT SAMSUNG ELECTRONICS?
YES
NO
78%
22%
35
Q.2 ARE YOU AWARE ABOUIT THE PRODUCT AND PRICES OF SAMSUNG ELECTRONICS?
YES
NO
56%
44%
36
Q.3. WHICH PRODUCT OF SAMSUNG DO YOU LIKE MOST?
CTV
36%
MOBILE
44%
REFRIGERATOR
20%
37
Q.4. HAVE YOU PURCHASE ANY PRODUCT OF SAMSUNG?
YES
NO
54%
46%
38
Q.5. WHY WHICH SOURCE YOU COME TO KNOW ABOUT SAMSUNG?
T.V
38%
RADIO
10%
NEWSPAPER
21%
MAGAZINE
8%
MOUTH OF TONGUE
23%
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FINDING 1. We came to know while visiting the shop most of the dealers sold entire consumer durable product including C-TV, Refrigerator, Washing Machine, DVD, Microwave oven. 2. We know that during the survey in consumer durable industry in Nashik district and
rural
area of nashik district LG is leading in Colour television, Washing Machine, Refrigerator. 3. Study shows that quality is most important parameter for more sale of colour television and then price is considered by consumers. 4. Study shows that quality of the product is most important parameter for Refrigerator then price is considered by consumers. 5. While visiting the shop we came to know that quality is most important parameter which is affect on more sales of Washing Machine. 6. According to Survey, Philips is most popular brand for DVD.
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SUGGESTIONS &RECOMANDETION
Company should improve the after sales service of products as it is the main factor for the sales of consumer products.
If the SAMSUNG Ltd. reduces their product price like LG and VIDEOCON then SAMSUNG will take over the LG in all categories.
Company should distribute free key chain, calendar, t-shirts for making brand popular among people.
Company should introduce low price and low power consumption Refrigerator for acquiring the middle income group.
Dealer desire more advertisement to be done through local newspaper and cable TV ads. To make consumers aware about the product.
Prompt of service in time.
Advertisements of the company’s products should focus on quality rather then price.
Company should target upper middle class or premium class customers.
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LIMITATION OF STUDY Although I tried my best in preparation of this project, but this study has some limitation: 1. The period of the project was not sufficient to study all the factors in deep. 2. Visiting various places for the study consumed a lot of time. 3. We cannot say that what the consumer have revealed will be right for each and every situation because their perception is influenced by many factors. 4. Many consumer and dealers/retailers showed less interest in providing information and haven’t cooperated. 5. Some of confidential information viz. credit period, schemes, policies and sales figure were not disclosed by the competitors.
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CONCLUSION
With respect to the above study and the findings thereby, 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. This study highlighted that Sagar market is still a virgin market for SAMSUNGLCD TVs. Customers need to be made aware of the productive usages of these products if SAMSUNG want to target these untapped market segments of customers. Also SAMSUNG need to modify their advertising strategies in order to educate the target audience about the product. Hence SAMSUNG will be able to win a major between the competitors
43
BIBLIOGRAPHY 12345-
http://www.samsung.com/in/aboutsamsung/index.html http://www.samsung.com/in/aboutsamsung/corporateprofile/index.html http://www.samsung.com/in/aboutsamsung/corporateprofile/history.html http://www.samsung.com/in/aboutsamsung/corporateprofile/visionmission.html http://www.samsung.com/in/consumer/index.html
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QUESTIONNAIRE 1. NAME: …………………..
2. AGE: ……………………..
3. OCCUPATION:……………………
4. SEX:……………………..
1. ARE YOU AWRE ABOUT SAMSUNG? A. YES B. NO 2. ARE YOU AWARE ABOUT THE PRODUCT OF AND PRICES OF SAMSUNG? A. YES B. NO 3. DID YOU PURCHASE ANY PRODUCT OF SAMSUNG? A. Yes B. NO 4. WHICH PRODUCT DO YOU LIKE MOST OF SAMSUNG? A. CTV
B. MOBILES
C. REFRIGERATOR
5. WHY WHICH SOURCE YOU COME TO KNOW ABOUT SAMSUNG? A. T.V
B. RADIO
C. NEWSPAPER
E. MOUTH OF PUBLICITY
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D MAGAZINES
