"MARKETING STRATEGY OF SAMSUNG IN INDIA"
SUBMITTED BY
Pratyush singhal
B.com (Hons.)IIISem
ENROLLMENT NO-A7004615105
Under guidance of:
Faculty Guide
DR. SACHIN SRIVASTAV
PROFESSOR
ABS, LUCKNOW
{SEMINAR PROJECT IN PRTIAL FULFILLMENT OF THE AWARD OF DEGREE OF BACHELOR OF COMMERCE(HONORS) 2015-18}
AMITY UNIVERSITY UTTAR PRADESH,
LUCKNOW
FACULTY CERTIFICATE
Forwarded here with a term paper report on "MARKETING STRATEGY OF SAMSUNG IN INDIA" submitted by pratyush singhal Enrolment NO. A7004615105 student of BCOM (Hons. ) III Sem (2015-18).
This project work is partial fulfillment of the requirement for the degree of Bachelor of commerce from Amity University Lucknow Campus, Uttar Pradesh.
Dr SACHIN SRIVASTAV
AMITY UNIVERSITY,
LUCKNOW CAMPUS
UTTAR PRADESH
STUDENT'S CERTIFICATE
Certified that this report is prepared based on internship undertaken by me in "MARKETING STRATEGY OF SAMSUNG IN INDIA , under the guidance of DR. SACHIN SRIVASTAV in partial fulfillment of the requirement for award of degree of Bachelor of Commerce (BCOM III SEM) from Amity University, Uttar Pradesh.
Date.______________
(SIGNATURE) (SIGNATURE) (SIGNATURE)
Pratyush singhal Dr SACHIN SRIVASTAV
Student Faculty Guide Director (ABS)
(ABS SCHOOL) (PROFESSOR)
DECLARATION
Title of project report" MARKETING STRATEGY OF SAMSUNG IN INDIA"
I understand what plagiarism is and am aware of the University's policy in this regard
I declare that
The work submitted by me in partial fulfillment of the requirement for the award of degree Bcom(Hons)assessment in this is my own; it has not previously been presented for another assessment.
I declare that MARKETING STRATEGY OF SAMSUNG IN INDIA" this is my original work. Wherever work form other source has been used, all debts (for words data, arguments and ideas) have been appropriately acknowledged and referenced in accordance with the requirements of NTCC Regulations and Guidelines.
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Date: ------------
Name of student- pratyush singhal
Enrollment no. A7004615105
B.com (H) 3rd semester
ACKNOWLEDGEMENT
I would like to express my special thanks of gratitude to my faculty guide Dr. SACHIN SRIVASTAV well as my area head Prof.R.P.Gupta who gave me the golden opportunity to do this wonderful project on the topic "The relationship between packaging characteristics and consumer brand preference" which also helped me in doing a lot of research and I came to know about so many new things ,I am really thankful to them.
Secondly, I would like to thank my parents and friends who helped me a lot in finalizing this project within the limited time frame.
MR. Pratyush singhal
TABLE OF CONTENT
Sl.no
Content
Page no.
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2.
3.
4.
5.
6.
7.
8.
9.
INTRODUCTION
COMPANY PROFILE
LITERATURE REVIEW
OBJECTIVES & METHODOLOGY
Findings
MARKETING STRATEGY
SAMSUNG SEGMENTING & TARGET MARKET
SALES PROMOTION TECHNIQUES
SWOT ANALYSIS
PORTERS 5 FORCE MODEL
CHANGES OVER DECADES
FINDINGS
SUGGESTIONS
Conclusion
Bibliography
1
1-2
2
2-3
3-16
17
18
19
20
INTRODUCTION
Samsung was founded by Lee Byung-chul in 1938 as a trading. Over the next three decades, the group diversified into areas including food processing, textiles, insurance, securities and retail. Samsung entered the electronics in the late 1960s and the construction and shipbuilding industries in the mid-1970s; these areas would drive its subsequent growth. Following Lee's death in 1987, Samsung was separated into four business groups – Samsung Group, Shinsegae Group, CJ Group and HansolGroup. Since 1990s, Samsung has increasingly globalized its activities and electronics, particularly mobile phones and semiconductors, have become its most important source of income.
Notable Samsung industrial subsidiaries include Samsung Electronics (the world's largest information technology company measured by 2012 revenues, and 4th in market value), Samsung Heavy Industries (the world's 2nd-largestshipbuilder measured by 2010 revenues), and Samsung Engineering and Samsung C&T (respectively the world's 13th and 36th-largest construction companies). Other notable subsidiaries include Samsung Life Insurance (the world's 14th-largest life insurance company), Samsung Everland(operator of Everland Resort, the oldest theme park in South Korea) and Cheil Worldwide (the world's 15th-largest advertising agency measured by 2012 revenues).
Samsung has a powerful influence on South Korea's economic development, politics, media and culture and has been a major driving force behind the "Miracle on the Han River". Its affiliate companies produce around a fifth of South Korea's total exports. Samsung's revenue was equal to 17% of South Korea's $1,082 billion GDP.
COMPANY PROFILE
Samsung Electronics commenced its operations in India in December 1995 and is today a leading provider of Consumer Electronics, IT and Telecom products in the Indian market. Samsung India is the Regional Headquarters for Samsung's Southwest Asia operations, which provides employment to over 45,000 employees with around 11,500 employees being involved in R&D.
Samsung began operations in India through its manufacturing complex located at Noida (UP), which today houses facilities for Colour Televisions (including 3D, LED and LCD Televisions), Mobile Phones, Refrigerators, Washing Machines and Split Air Conditioners categories. Samsung commenced operations of its second state-of-the-art manufacturing complex at Sriperumbudur, Tamil Nadu in November 2007. Today, the Sriperumbudur facility manufactures Colour Televisions, Fully Automatic Front Loading Washing Machines, Refrigerators and Split Air Conditioners. Samsung India has three R&D Centres in India–two in NCR and one in Bangalore. While the Noida R&D Centres develops software solutions for high-end televisions such as Plasma TVs, LCD TVs and Digital Media Products, the other Centre is engaged in R&D solutions for product hardware. The Bangalore R&D Centre works 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.
Samsung India is the Market leader in product categories like Mobile Phones, Smart Phones, Panel TVs, Side By Side Refrigerators, Frost Free Refrigerators, Microwaves and Inverter ACs.
Samsung India has won several awards and recognitions for both its corporate initiatives as well as its product innovations in Audio Visual, Home Appliance, IT and Telecom Product categories.
Apart from development of innovative technology, Samsung places great importance on acting as a responsible corporate citizen in the communities where it operates. Its CSR programs respond to the social and environmental needs and seek to give back to communities that support the company. In 2009, Samsung launched the company's Corporate Social Responsibility initiative 'Samsung Hope Project' with projects in the areas of education, culture, sports, social welfare and community development. Each programme, under the Hope Project, uniquely addresses the needs of individual communities while emphasizing on innovations for development of the community including education, technology, engineering and IT technical training.
The Company's CSR initiatives such as Samsung Smart Class and Samsung Technical Schools have been recognised by several reputed organisations, and the Company has won accolades from these projects aimed at giving back to the society.
LITERATURE REVIEW
In 2014, we invested KRW 15 trillion in R&D to lead industry innovation as we continued to expand global R&D centers and recruit top talent. Our New York and Silicon Valley-based Open Innovation Center extended our reach, enabling us to secure outside talent and technologies. Those forward-looking measures fueled remarkable performance and sparked superior technologies, including mass production of the world's first 20nm DRAM and V-NAND with 3-bit technology; the launch of a smartphone with the world's first curved display; wearable devices such as Samsung Gear S and Gear VR; and developing new IoT (Internet of Things) technology based on automatic ID technology that utilizes diverse sensors. We also reinforced the foundation of our technology leadership and sustained future growth by registering 4,952 US patents in 2014, the No. 2 world record. In addition, we maintained our profile as an innovative company with 36 CES 2015 Innovation Awards and with the No. 3 ranking on the Boston Consulting Group's list of The Most Innovative Companies 2014 around the world. Moreover, we were ranked No. 7 on Interbrand's The Best 100 Global Brands 2014, with an estimated brand value of USD 45.5 billion. Fortune listed Samsung Electronics as No. 13 on its list of the World's Most Admired Companies 2014.
Going forward, we anticipate lingering uncertainty in the world economy owing to an increase in US interest rates, economic recession in the Eurozone and financial risks in emerging countries because of the sharp drop in crude oil prices. Competition in the electronics industry will turn ever more fierce as growth continues to slow in our key product markets. Nevertheless, we are prepared. Our experienced sound management and unrivaled challenging spirit will enable us to effectively respond to the fast-changing business environment. First, we will strengthen our competitiveness and profit structures in existing business areas. In our core areas, including memory chips, TVs and mobile phones, we will hone our competitive advantages as we focus on developing premium products and strengthening technology leadership. Our top ranking in the Memory Business is fully supported by our superior technology. In TVs, we will highlight our premium brand power with a central focus on SUHD TVs. In the Mobile Communications Business, we will lead the premium market with the Galaxy S6 and Galaxy S6 edge, while also launching differentiated products for mid- and low-priced markets. That strategy will not only maintain our dominance in advanced markets but also fuel growth in emerging and low-priced markets. In addition, we will
OBJECTIVES AND METHODOLOGY
OBJECTIVE
Primary objective
To find the past sale growth and demand analysis
Secondary Objective
Market structure analysis
SWOT analysis
Competitor analysis
Performance evaluation
Methodology
In this project we have followed descriptive method of study.
Research instrument
Here project analysis is made by collecting secondary data from different websites, journals, etc.
Secondary data's are pre published and research data's collected from different websites, journals, newspapers, company research papers.
These documents and data's are very useful for the theoretical, conceptual and organizational background analysis.
Detailed analysis of data's is made by plotting different graphs and tables which can be easily understandable.
Then by observing these graphs we have made our conclusions and recommendations.
Samsung Marketing Strategy
Samsung has a vast product portfolio and its presence is in several different product categories. The brand image driver for Samsung are the Samsung Smartphone's such as the Samsung note series or the Samsung galaxy series. Overall, Samsung is present in the following product categories.
Products in the marketing mix of Samsung:-
1) Tablets
2) Televisions – LEDs, LCDs. Plasma TV, SMART TV, HDTV etc
3) Cameras and Camcorders
4) Refrigerators
5) Air conditioners
6) Washing machine
7) Microwave ovens
8) IT – Laptops, printers and accessories) Mobile phones – Smart phones, normal phones
The benefit of Samsung in terms of its product is that there is a trust on all Samsung products because of the way Samsung products have performed in the last few years. Problems with the products has been negligible. And with its Smart phones, Samsung has achieved a status symbol for its customers. At the same time, Samsung is known for its service and people know that Samsung gives a very fast service for any of its product. Thus in the marketing mix of Samsung, the product portfolio is one of the strongest point for Samsung.
Price in the marketing mix of Samsung – Because of its presence in different product categories, Samsung uses various pricing strategies. We can divide the pricing strategies and match it with the products that it is used for.
Skimming price – Samsung's smart phones are one of the best in the market and are the market leader in terms of the features and USP's that they provide. The recent Samsung Note 3 + Gear is another entrant in the market which is catching peoples eyes. Thus Samsung uses Skimming price for these products wherein it tries to get a high value in the start before competitors catch up. Once the model is old or any competitor has launched a similar product, Samsung immediately drops the price. Competitive pricing – For products other than smart phones, Samsung uses competitive pricing. Televisions, air conditioners, refrigerators and other products have competition in the form of Panasonic or LG. Samsung is known to be a great brand but it is not greater than LG for home appliances. In fact LG beats Samsung where home appliances are concerned. Similarly in Washing machines – Whirlpool, and in Cameras – Cannon, are the brands which are to be beaten. Thus in various categories, Samsung keeps competitive pricing so as to beat the competitor. Samsung as a brand hardly uses penetrative pricing because it doesn't enter late in the market. In fact, it is present in most consumer durable segments in the market.
Place in the marketing mix of Samsung – Samsung is present through various channels in the market. It works on the channel marketing concept wherein there are three segments. Sales and service dealers, Modern retail and Distributors. The sales and service dealers handle key accounts for Samsung and are involved in corporate sales. These dealers may also open exclusive Samsung showrooms. The Modern retail segment includes large retailers like Croma, Hypercity, Vijay sales, Vivek's and any others who are present in the modern electronic retail chain. Samsung being such a branded product, the retailers are bound to keep Samsung as an alternative for their customers.
The distribution network is the most interesting in the case of Samsung. In several cities, Samsung has a single distributor through whom they distribute throughout a territory. For example – In Mumbai, Samsung has SSK distributors who are distributors for all Samsung products. This distributor has a huge investment in Samsung and both, the distributor and the company, go hand in hand for the sale of Samsung's products. Thus all material of Samsung will be sold to a single distributor who in turn will sell it forward to retailers.
Promotions in the marketing mix of Samsung – Samsung uses multiple forms of promotions. Samsung as a company believes in pulling the customer to themselves through advertising but at the same time uses strong tactics to push the product to the customer through sales promotions. Thus on one hand, Samsung uses various marketing vehicles across the year covering festive season as well as non festive time. On the other hand, it gives many offers and discounts to its trade partners to motivate them to sell Samsung above competition. With such a strategy, Samsung's brand is on the rise so that both, the pull as well as push strategy is working simultaneously in Samsung.
The marketing mix of Samsung is a lesson to marketers in several points. First, Business will grow if you have multiple products at once as all of these products can become revenue drivers for your company. Second, Pull strategy, though expensive, is far more beneficial in the long time.
Advertising
Print and media advertising is one of the core elements of the marketing mix extensively utilized by Samsung Electronics. The most noteworthy media advertising campaigns include live commercials for Samsung Galaxy S 3 device on popular Jimmy Kimmel Live show in June 2012 and on Late Night With Jimmy Fallon on July and August of the same year. Moreover, partnership with Fox channel in the US to run four 30-second advertising clips during the National Football League, college football and World Series games in 2012 have been praised as efficient marketing campaigns.Samsung print advertising in popular newspapers, magazines and journals have previously included direct attacks on its major competitors, notably Apple. For example, a print ad campaign titled 'It doesn't take a genius' is a clever play of words on Apple's emphasize on genius branding. The print ad compares major functionalities of iPhone5 and Galaxy S III and illustrating the superiority of Samsung's product on several fronts.
Viral marketing is also extensively used by Samsung as one of the most effective advertising methods. For example, the latest 60-second viral marketing video titled "Anticipation" is a successful attempt to associate Samsung Galaxy S6 with excitement and a sense of achievement and recognition.
Sales Promotion
Samsung uses sales promotions as a marketing tool more extensively compared to the majority of its competitors. It has been estimated that the company had spent about USD 4.6 billion on sales promotions during 2013 alone globally, that included USD 888 million sales promotions budget on its home market in South Korea. It is important to clarify that this budget is separate from the marketing budget illustrated in Figure 3 above. Moreover, Samsung official website contains sales promotions announcements on mobile phones, accessories, cameras, back to school offers, as well as, bundle offers
Samsung Electronics Report contains more detailed analysis of Samsung marketing strategy covering issues of public relations, events and experiences and direct selling. The report also comprises application of SWOT, PESTEL, Porter's Five Forces and Value-Chain Analyses on Samsung, along with analysis of company's approach towards Corporate Social Responsibility (CSR).
BRAND POSITIONING
Samsung, once known to be the low-quality service provider of all time is now one of the leading mobile companies of the world. Having said that, we can see how it all comes down to proper brand positioning and innovation, which takes a brand to its zenith.
After having its share of booms and slumps, Samsung came up with new ideas to be more customer-focused and creative in order to establish a strong brand image in the global market. Rather than making normal or usual handset devices, they started to produce smartphones to catch up with their competitors. Their main strategy was to provide the best quality products in order to meet their customers' expectation.
They have been constantly redesigning and introducing new series of products, e.g. – Galaxy Series. Currently they are working on designing the lightest and slimmest phone of the world,along with an amazing powerful performance to gain an edge over their competitors. Samsung doesn't have any particular tagline/slogan for the company as a whole; they prefer to use unique taglines for each and every product. They tend to promote and position their mobile phones/note/tab at all the 3 different levels of positioning. Two promo links have been provided below of their Galaxy Note 4 and Galaxy S6, which specifies all the product attributes, values and benefits that customers might look out for, before they choose to buy it. Samsung doesn't target any specific segment of the market, but mostly seem to serve the high-end people of the society, for e.g. – business people, young adults.
Samsung Segmenting and Targeting Markets
Geographic Segmentation
Samsung geographic segmentation is world wide, they sell their phones in 61 different countries. They make slight variations in languages and applications but the physical appearance of their phones is universal.
Demographic Segmentation
Age Segmentation : Their target age segmentation is teens,young adults and adults in early and mid 30's.
Income Segmentation : Their target income segmentation is middle class and high class income.
Ethnic Segmentation : Since Samsung sells world wide, they don't have a specific ethic segmentation.
Family Life Cycle Segmentation : Their target family life cycle is young single, young married or divorced with or without children.
Gender Segmentation : Smartphones are not gender specific but since women shop more than men I would assume they have more women buying their phones than men.
Psycho graphic Segmentation
Samsung psycho graphic segmentation includes individuals from teens to mid 30's who like new technology, tech savvy and can afford to buy it.
Benefit Segmentation
When Samsung customers buy their phones the benefit they expect from it is simple appearance, new and updated features and reasonably priced.
Usage- Rate Segmentation
The smartphones market has a lot of heavy users because of the convenience of it, you can call, text, send pictures, play games, listen to music and surf the web all from a smartphone. Samsung as a large percentage of heavy users who buys all of their latest phones and with mobile service company offering upgrade plans it makes it easier to get the newest phones.There are people who goes from one smartphone brand like Apple to Samsung because they tired of it or they want to try another smartphone.
Samsung Innovation Strategy
Everyone has heard about the company named Samsung and the reason why they have heard of it is because of its innovation strategies. Innovation strategy at Samsung can be described as the way that made them a leading manufacturer in electronic industry as they keep the competitors at bay. In the present business environment, businesses of whatever size must face and defeat challenges which is posed by accelerated globalization and technological changes. It is not just innovative strategy that matters, but innovations that embed on themselves some strategies that are truly game changing.
The game changing innovation of Samsung encapsulates business models, business processes and manner of positioning themselves vis a vis their competitor. This is what has made them survive all these years.
It is a fact that there is a link between innovation and the economy of a country, the culture of its peoples and those businesses running on it. South Korea, where Samsung originated, is not rich when it comes to natural resources
Branding Strategy of Samsung
In the present day, the accomplishment of a business depends not just on the product quality rather on how efficiently and effectively the value of the product is presented to the clients at the last part. When it comes to this aspect, Samsung Company has taken big steps in its development, whether financially or operationally.
In order to improve the product value of the company, the following are some of the branding strategy of Samsung that other business owner must kept in mind:
Establishing identity on the product
Cost involved in the repositioning of the product
Reaction from opponents or competitors
Techniques adopted in costing
Research and development
When it comes to cost efficiency, it was taken care of which the rules adopted by company were not "cost prohibitive"
Also it was observed that company strengths leverage has lead in acceptable dividends and which it leads to "focused hard works."
Keeping a proper channel connection causes the results of sales to be relatively strong. The incremental sale also yields a strong return.
To put the company as a technology leader in the business world.
Result of Branding Strategy Samsung Adopted
Past few years, Samsung Company adopted a lot of measures in order to make its existence felt worldwide. Some of them include:
Sponsoring
One such significant instance was when Samsung sponsored the 1998 Seoul Olympics. Samsung had made an agreement together with the International Olympic Association.The business executives anticipated that through sponsoring special and worldwide events and by means of embracing different marketing methods as well as investments, the product of value of the company would be improved. Because of this the value of the product of the Company escalated by almost 200 percent, obtaining $8.3 billion in 2002 from 3.1 billion dollar in the year 1999. Valued through Interbrand Incorporation.The different measures obtain by the company didn't go in waste because Samsung was listed amidst the topmost products, the product being evaluated by the Interbrand Incorporation. Among the non Japanese products, Samsung Company was the only company from Asia.
Samsung focussing on its online sales strategy for the Indian market
Samsung has been facing fierce competition in the Indian smartphone segment from the likes of Xiaomi, Motorola, OnePlus, and ASUS, and some Indian brands, which are focussing on online sales. Now, Samsung has revealed that the company is focussing on and fine tuning its online sales strategy in the country. The company is also focussing on sales from the rural market, which has contributed significantly to sales.
According to sources within the company, the South Korean smartphone giant is looking to tap into the booming e-commerce market in India, and the company has even a separate team at its headquarters to plan online sales strategy. The company had to face revolt from offline retailers after online retailers started providing huge discounts and price cuts on Samsung devices.
When asked about the company's plan to tap into the e-commerce segment, Rushi Suri, Samsung India Director-Product Marketing Consumer Electronics, said, "For us the consumer is the key. Where the consumer would want us, we would be there and would be offering right kind of products at right price. In case of (consumer) electronics, the clear understanding with the management is where the consumer would want us, we would be there."
In terms of Samsung's strategy to drive overall sales, it is focussing on 'Made for India' products that have the right set of features for the right prices. The company recently announced, which have good value-for-money factor along with features such as 4G LTE and Ultra Data Saving mode that Indian consumers are demanding these days. However, the company's official declined to comment on the percentage of sales that the company is attracting from the online channels
SWOT ANALYSIS
Samsung Electronics Co. Limited (OTC: SSNLF) is actually the consumer electronics subsidiary of the Samsung Group, a conglomerate based in Suwon, South Korea. Outside of Korea, Samsung is best known as the world's largest manufacturer of mobile phones and smartphones, including the highly popular and successful Galaxy.
It is also the world's largest manufacturer of televisions and LCD panels. Thanks to its manufacturing and marketing expertise, Samsung is regarded as the world's second largest consumer electronics company. Only its American rival, Apple Inc. (NASDAQ: AAPL), reported larger revenues.
Unfortunately, it is difficult to determine exactly what Samsung's are because it is based in Korea and not covered by U.S. corporate reporting laws. Samsung did report an estimated TTM revenue of $42.35 billion for the second quarter of 2015. That figure is based on sales of 48 trillion Korean won.
Strengths
Samsung is the world's most successful electronics manufacturer. It is the world's largest manufacturer of television sets, liquid crystal display (LCD) panels, mobile phones and smartphones.
Samsung is the world's number one marketer of mobile phones with 21.4% of the world's largest market share in the second quarter of 2015. Apple is number two with 13.9%[2]
Samsung has impressive research and design capabilities. It was able to create and roll out Samsung Pay, a payment app with similar capabilities to Apple Pay, in less than a year. Samsung has been able to replicate many of the capabilities of both Apple Inc.'s phones and Google Inc.'s Android operating system for mobile devices.
Samsung has strong manufacturing and marketing capabilities.
Samsung has long-standing relationships with retailers in the United States and Europe that provide a steady sales channel for its products.
Weaknesses
Samsung has not been able to match Apple Inc.'s marketing capabilities for smartphones. Its share of the U.S. smartphone market fell by 2.3% between 2014 and 2015. In contrast, Apple's share price grew by 34.9%.
Some Chinese competitors are catching up to Samsung in the smartphone market. Between 2014 and 2015 Huawei's share grew by 48.1%, and Xiaomi's share grew by 29.4%.
Samsung is heavily dependent upon consumer electronics sales in markets with limited potential for growth, such as the United States and Europe, for much of its revenue.
Samsung's devices use the Google Android open source operating system. Many consumers seem to view Android as an inferior product to Apple's iOS. The public has not been as accepting of Android as the tech community has.
Some consumers view Apple products as more advanced and dependable than Samsung products.
Samsung's marketing efforts are not as sophisticated as Apple's.
Opportunities
Growing market for smartphones, tablets and other mobile devices, especially in developing regions such as Africa and India, where consumers are unfamiliar with PCs. Sales of tablets finally overtook sales of traditional personal computers in 2015.
Increased demand for tablet and smartphone-based solutions such as Samsung Pay
New technologies such as wearable tech
Growing middle class in developing world will increase market for consumer electronics.
Growing online market from sales channels such as Amazon.com
Threats:
Apple has emerged as the dominant smartphone and tablet brand in some markets, such as the United States. Samsung has not been able to overcome Apple's reputation for reliability.
Apple's reputation for quality, reliability and sophistication seems to be growing.
The Google Android operating system, which Galaxy devices depend upon, is not as popular with average people as iOS is.
Declining or stagnating middle-class incomes in North America and the United States could reduce consumer buying power in those key markets for Samsung.
Chinese manufacturers such as Huawei and Xiaomi could emerge as serious rivals to Samsung. These companies' share of the critical mobile device market is growing while Samsung's is falling.
Apple could enter more consumer products areas such as home appliances and cameras and directly compete with Samsung in those markets.
Samsung maintains impressive research, design and manufacturing capabilities, but it appears to have lost its edge in marketing. This company may need to revamp its smartphone marketing and perhaps design efforts in order to maintain market share in critical arenas like the U.S.
PORTERS 5 FORCES ANALYSIS
Introduction
Porter's Five Forces methodology is used in this article to analyze the business strategies of white goods makers like Samsung. This tool is a handy method to assess how each of the market drivers impact the companies like Samsung and then based on the analysis, suitable business strategies can be devised. Further, companies like Samsung are known to study the markets they want to approach thoroughly and deeply before they make a move and it is in this perspective that this analysis is undertaken.
Industry Rivalry
This element is especially significant for Samsung as the other White Goods multinationals like LG, Nokia, and Motorola not to mention Apple are engaged in fierce competitive rivalry. Indeed, Samsung cannot take its position in the market for granted as all these and other domestic white goods players operate in a market where margins are tight and the competition is intense. Apart from this, Samsung faces the equivalent of the "Cola Wars" (the legendary fight for dominance between Coke and Pepsi) in emerging markets like India where Samsung has to contend and compete with a multitude of players domestic and global. This has made the impact of this dimension especially strong for Samsung.
Barriers to Entry and Exit
The White Goods industry is characterized by high barriers to entry and low barriers to exit especially where global conglomerates like Samsung are concerned. Indeed, it is often very difficult to enter emerging markets because a host of factors have to be taken into consideration such as setting up the distribution network and the supply chain. However, global conglomerates can exit the emerging markets easily as all it takes is to handover and sell the business to a domestic or a foreign player in the case of declining or falling sales. This means that Samsung has entered many emerging markets through a step-by-step approach and has also exited the markets that have been found to be unprofitable. This is the reason why white goods multinationals like Samsung often do their due diligence before entering emerging markets.
Power of Buyers
The power of buyers for white goods makers like Samsung is somewhat of a mixed bag where though the buyers have a multitude of options to choose from and at the same time have to stick with the product since they cannot just dump the product, as it is a high value item. Further, the buyers would have to necessarily approach the companies for after sales service and for spare parts. Of course, this does not mean that the buyers are at the mercy of the companies. Far from that, they do have power over the companies, as most emerging market consumers are known to be finicky when deciding on the product to buy and explore all the options before reaching a decision. This means that both the buyers and the companies need each other just like the suppliers and the companies, as we shall discuss next.
Power of Suppliers
In many markets in which Samsung operates, there are many suppliers who are willing to offer their services at a discount since the ancillary sectors are very deep. However, this does not mean that the companies can exert undue force over the suppliers as once the supply chain is established; it takes a lot to undo it and build a new supply chain afresh. This is the reason why white goods makers like Samsung invariably study the markets before setting up shop and also take the help of consultancies in arriving at their decision.
Threat of Substitutes
This element is indeed high as the markets for white goods are flooded with many substitutes and given the fact that consumer durables are often longer term purchases, companies like Samsung have to be careful in deciding on the appropriate marketing strategy. This is also the reason why many multinationals like Samsung often adopt differential pricing so as to attract consumers from across the income pyramid to wean them away from cheaper substitutes. Further, this element also means that many emerging market consumers are yet to deepen their dependence on white goods and instead, prefer to the traditional forms of housework wherein they rely less on gadgets and appliances. However, this is rapidly changing as more women enter the workforce in these markets making it necessary for them to use gadgets and appliances.
Stakeholders
This is an added element for analysis as the increasing concern over social and environmentally conscious business practices means that companies like Samsung have to be careful in how they do business as well as project themselves to the consumers. For instance, white goods makers are known to decide after due deliberation on everything from choosing their brand ambassadors to publicizing their CSR (Corporate Social Responsibility) initiatives.
CHANGES OVER DECADES
In 2000, Samsung opened a computer programming laboratory in Warsaw, Poland. Its work began with set-top-box technology before moving into digital TV and smartphones. As of 2011, the Warsaw base is Samsung's most important R&D center in Europe, forecast to be recruiting 400 new-hires per year by the end of 2013.
The prominent Samsung sign in Times Square, New York City
In 2010, Samsung announced a ten-year growth strategy centered around five businesses.
In December 2011, Samsung Electronics sold its hard disk drive business to Seagate.
In first quarter of 2012, Samsung Electronics became the world's largest mobile phone maker by unit sales, overtaking Nokia, which had been the market leader since 1998. On 21 Augusts' edition of the Samsung confirmed plans to spend 3 to 4 billion dollars converting half of its Austin chip manufacturing plant to a more profitable chip. The conversion should start in early 2013 with production on line by the end of 2013. On 14 March 2013, Samsung unveiled the Galaxy S4.
On August 24, 2012, nine American jurors ruled that Samsung had to pay Apple $1.05 billion in damages for violating six of its patents on smartphone technology. The award was still less than the $2.5 billion requested by Apple. The decision also ruled that Apple did not violate five Samsung patents cited in the case. Samsung decried the decision saying that the move could harm innovation in the sector. It also followed a South Korean ruling stating that both companies were guilty of infringing on each other's intellectual property. In first trading after the ruling, Samsung shares on the Kospi index fell 7.7%, the largest fall since 24 October 2008, to 1,177,000 Korean won. Apple then sought to ban the sales of eight Samsung phones (Galaxy S 4G, Galaxy S2 AT&T, Galaxy S2 Skyrocket, Galaxy S2 T-Mobile, Galaxy S2 Epic 4G, Galaxy S Showcase, Droid Charge and Galaxy Prevail) in the United States which has been denied by the court.
On September 4, 2012, Samsung announced that it plans to examine all of its Chinese suppliers for possible violations of labour policies. The company said it will carry out audits of 250 Chinese companies that are its exclusive suppliers to see if children under the age of 16 are being used in their factories.
In 2013, a New Zealand news outlet reported a number of Samsung washing machines spontaneously catching on fire. The corporation is expected to spend $14 billion on advertising and marketing in 2013, with publicity appearing in TV and cinema ads, on billboards and at sports and arts events. In November 2013, the corporation was valued at $227 billion.
In May 2014, Samsung announced it will be shutting down its streaming service on 1 July 2014, also meaning the end of the Samsung Music Hub app that typically comes installed on its Android phones.
On September 3, 2014, Samsung announced Gear VR, a virtual reality device in collaboration with Oculus VR and developed for the Galaxy Note 4
In October 2014, Samsung announced a $14.7 billion investment to build a chip plant in South Korea. Construction will begin next year with production beginning in 2017. The company has not yet decided the type of chips to be produced.
In October 2014, Samsung also announced it would invest 633 billion South Korean won ($560 million USD) in the construction of a new 700,000 square metre production complex in Vietnam.
Samsung plans to launch a new set of services beginning early 2015. The goal of this new suite of business offerings, dubbed Samsung 360 Services, is to become a help desk of sorts for businesses IT departments. The customizable services range from technical support to security solutions for having a Samsung employee embedded in a client's business as an on-site support manager or technology consultant.
On December 2, 2014, Samsung announced it will sell Fiber Optics to U.S. speciality glass manufacturer Corning Inc.
Samsung Electronics Inc. is expanding in Silicon Valley with a $300 million facility in San Jose, California. The 10-story complex will include 1.1 million square feet of floor space, a clean room for semiconductors and a "fitness center in the sky". The facility will be split between semiconductor research and development and other sales and marketing functions. It will serve as the North America headquarters for semiconductor operations.
In 2015, Samsung has been granted more U.S. patents than any other company - including IBM, Google, Sony, Microsoft and Apple. The company received 7,679 utility patents through Dec. 11.
FINDINGS
Following Are The Findings Of the Study On The Topic MARKETING STRATEGIES OF SAMSUNG
With the passage of time use of sophisticated software tools- ERP, Trend Data, Qualitative field inputs will increase and as a result forecasting would be better.
One major finding is that, while branding differentiates the image of the product, the distribution will determine its success to a large extent.
Rural markets would be the cornerstones of all MARKETING strategies in the near future and this difficult markets will only be cracked by companies that form partnerships across their value and supply chains.
SAMSUNG companies are now realising that change will come faster and harsher than ever before, so why not change before change is thrust upon. Therefore, Distribution has suddenly emerged from the background of the business to the very forefront.
Last but definitely not the least with all attention now being centred on Supply chain and logistics specifically in marketing sector, this could well turn out to be the business to be in.
SUGGESTION
Looking ahead in 2015, Samsung is committed to social responsibility contributions, with a focus on education, job training and improving healthcare. Designed for corporate citizenship, our programs support local issues around the world. We are also leading the way in a range of green management and environmental activities, such as producing green products and workplaces and working to reduce greenhouse gas emissions. We strive to maintain safe environments in which our employees can work healthfully and live happily. As always, we support our partners worldwide and promote their success by forging win-win partnerships for shared and sustainable growth. For the past 46 years, Samsung Electronics has grown rapidly by surmounting many crises and difficulties. As we pursue our dream of making a better and brighter world for everyone, we will embrace and overcome new challenges. Today's complex business environment is pushing us to redouble efforts and increase innovation. We will steadily realize our dream by relying on our wisdom to overcome crisis, our courage to blaze new trails and our passion to serve our customers. We are grateful for your unwavering support and encouragement as we create the imaginative opportunities that will open doors to the future realize significant growth in sales and profits in our developing businesses, such as Digital Appliances, Printing Solutions, Networks, Health & Medical Equipment, System LSI and LED.
CONCLUSION
Samsung India ltd. Is a leading Electronic company in India and from last five consecutive years has shown accelerated growth in electronic portfolio. Customers in India are also spending more in electronics as their standard of living is growing. Samsung has placed itself successfully in the position of market leader in electronic products. Though there was some downfall in sales and profit of the company in the beginning of this decade but after that Samsung has shown considerable rise in both sales and profit. The future of the company is also looking bright as electronic market in India is still expanding and so we can safely conclude that Samsung will be able to secure its number one position in electronic product.
Samsung has also started project , that has provided it direct reach to rural market. This may be considered a revolutionary step since the urban market is reaching its saturation level and there is a huge scope exploring rural market. This will also be helpful not only increasing its market share but also fight competition
BIBLIOGRAPHY
In order to make this project we have taken the help of the following websites & books:
www.wikipedia.com
www.oppapers.com
www.samsung.co.in
www.scribd.com
Besides it various books are also consulted to prepare project report.
AUTHOR'S NAME BOOKS
AshishBenerjee Principle of economics
H.L. AhujaModern Microeconomics
Theory and Application
C.K.KothariResearch Methodology
