Background Information
Electronics , belonging Samsung Telecommunications is one of five business units within Samsung Electronics, to the Samsung Group, Group, and consists of the Mobile Communications Division, Telecommunication Systems Division, Computer Division, MP3 Business Team, Mobile Solution Centre and Telecommunication R&D Centre. Telecommunication Business produces a full spectrum of products from mobiles and other mobile devices such as MP3 players and laptop computers to telecommunication network infrastructure. Headquarters is located in Suwon Suwon,, South Korea. Korea. Location in Singapore Southeast Asia
Samsung Electronics Southeast Asia & Oceania Headquarters Samsung Asia Pte Ltd, 3 Church Street, #26-01 Samsung Hub, Singapore 049483, Singapore Products and Services Provided by Samsung Telecommunications
-
Products Mobile Phones o Smartphones o Laptop Computers o
a. Customer Analysis and Segmentation of Samsung Telecommunications
Samsung Telecommunications offers a wide variety of products that suit different needs of their consumers.
-
Mobile Phones
Mobile phones are designed to be cheap and convenient to use as they do not have many functions as compared to smartphones. Samsung mobile phones target customers who do not require or afford a smartphone. These customers include those who are less educated, live in rural areas or stay in military restricted areas that do not allow the use of smartphones.
-
Smartphones (From: Samsung – What makes smartphone smart?)
Smartphones are cell phones that have the functions of a miniature computer which allow the phone to run applications aka apps. They are more complex to learn as compared to mobile phones and relatively more expensive. Samsung smartphones target customers who are educated, wealthy and technology-savvy. These customers include younger generation and professionals.
-
Laptop and Computer
Samsung Telecommunications also releases different variety of laptops and computers to suit the unique needs of different customers. Samsung high-performance laptops and computers target customers who require laptops or computers with high processing power. Their products also include ultra-light laptops to satisfy the customers who prefer carrying a light laptop to move around. b. Marketing Objective of Samsung Telecommunications
c. Marketing Strategy and Marketing Mixes of Samsung Telecommunications Marketing mix 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: Samsung by launching innovative products and using proprietary technology was able to gain market share. Samsung has therefore set up Samsung India Software Centre (SISC) and Samsung India Software operations unit (SISO) for software development at Noida and Bangalore respectively. While the Samsung India Software Centre in developing software solutions in Samsung‘s global software requirements for hi-end television like Plasma and LCD TVs. SISO is working on major projects for Samsung Electronics in the area of telecom: wireless terminals and infrastructure, Networking, SoC (System on Chip) Digital Printing and other multimedia/digital media as well as application software. In addition to working on global R&D projects, SISO is also helping Samsung India‘s CDMA business by focusing on product customization for the Indian market. Product features: To sell a consumer durable product a company has to provide unique features i.e. features which other companies are not able to provide. Samsung has been using the same strategy to boost their sales. Samsung provides its consumers with wide range of products with unique features 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, favourable 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 de velop attitudes, create awareness, and transmit information in order to gain a response from the target market. Their main advertising channels include 'media' such as newspapers (local, national, free, trade), magazines and journals, television (local and national) cinema, outdoors advertising (such as posters, bus sides). The initial advertisements communicated presence of Samsung in worldwide markets and its dominance in those markets. To increase its brand awareness, Samsung went in for celebrity endorsements. Initially, the company signed Hindi film actress, Tabu, to endorse its brand. Till 2002, Samsung‘s ads focused on the technological supremacy of its products. But by late 2002, in addition to the technology plank, the company started advertising on the plank of ‗passion for country‘ and sports (cricket and football). Its latest ambassador is John Abraham for its mobile phone and Rahul Dravid for its Television range. 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.
Sponsorship:-Samsung used sponsorship of events like Olympic series to boost its sales. Samsung was the global wireless communications sponsors at the Athens Olympics. Samsung used the strategy of relating itself directly with the values of the Olympic Games, which included attributes like world class, global, excellence, fair competition and peace. The Olympic series of August5, 2004 was Samsung‘s salute to the Olympic values. Samsung was the sponsor of Lakme India Fashion Week held on April21, 2005. Team Samsung cricketers - Irfan Pathan, Mohd. Kaif and Virendra Sehwag launched the World‘s Best Handset, Samsung D500 during the Samsung Show at the Lakme India Fashion Week. The theme for the Samsung Show was ‗The Best Thing Says Everything‘ in keeping with the positioning of Samsung D500 - Samsung‘s latest and path-breaking mobile phone which has been rated as the ‗World‘s Best Mobile phone‘ by the 3GSM Association World Congress
held at Cannes in February 2005.Samsung sponsored Samsung & MTV Youth Icon 2005 on June10, 2005. The idea behind the sponsorship was that the Samsung Mobiles were targeted at the fun loving, lifestyle oriented and trendy youth of today. By associating with the Samsung & MTV Youth Icon, they are seeking to further strengthen their relationship with the youth. Samsung mobiles make a style statement and by partnering with the Youth Icon, this positioning is further reinforced. Samsung was even the sponsor of Samsung IIFA Awards held on June 13, 2005.Popular film actress, Preity Zinta was awarded the ‗Samsung Diva‘ award while Hrithik Roshan was conferred the prestigious ‗Samsung Style Icon‘ award at the Samsung IIFA Awards 2005. Samsung India had carried out an online voting process on the Samsung India website between May 20th - June 5th 2005 for selecting the recipient of the ‗Samsung Style Icon‘ and ‗Samsung Diva‘ awards. The same was also promoted extensively on other sites like indya.com and msn.com as well. The Company received a phenomenal response to this online voting contest. ―The ‗Samsung Style Icon‘ and ‗Samsung Diva‘ awards which have been growing in popularity year on year, the company uses the
response level received every year as its popularity indicator. Direct Mail:-Samsung even uses Direct Mail concept for its product promotion. Samsung sends mail to target consumers depending on the database i.e. the frequency of site visit and on their purchases. Samsung is very actively involved in e- commerce.
Distribution Channels:-Samsung uses supply chain to enhance differentiation, increase sales and
penetrate new markets and channels. Its supply chain is beneficial in several ways. It helps the company to deliver products to the customer faster. It efficient supply chain is transparent, so that all the players in the supply chain have the right information at the right time about the movement of the products within the chain. This means lower inventories, elimination of waste, and reductions of costs. In addition to the intangible benefits like quick feedback from customers help in launching new products. Samsung has 24 state-level distribution offices and a direct dealer interface. The direct dealer interface helps the company to get quick feedback from dealers, and enables it to launch products according to consumer needs. To minimize time overruns, Samsung delivered its products directly from its factories to its Regional Dispatch Centres (RDCs) and from there to dealers. Samsung has sales and service networks all over India and 650 service points. Samsung has implemented an innovative logistics system – Global Logistics Network Systems (GLONETS). GLONET application is used on the B2B i.e. Business to Business front for the vendors. This involved linking the key vendors, which form the bulk of Samsung‘s sourcing (26 domestic and 30 international) through Samsung‘s GLONET. This system enables Samsung to connect its purchase department with the Samsung headquarters and international procurement offices through integrated ERP systems. The integrated ERP system enables Samsung to purchase its requirements from its international procurement offices and also from its Indian vendors. This application is also extended to order placement, production plan sharing and invoicing, resulting in shorter business cycles and reduced inventory levels and low waste. In addition to GLONETS, Samsung also believes in JIT (Justin-Time) concept to its dealers. To make delivery of products within 48 hours of the expected date of delivery, the company has setup four RDCs, one at each regional location of the country. The
distribution channel is structured very systematically wherein all the transactions and business conducted is documented. The program is based on incentives so that dealer payments can be made on time. The Company supplies its goods to the Star Elite who supplies goods to the distributor who in turn sell the goods via their own channel of retailers and distributors. The Samsung Brand shop network complements the over 8500 retail points for Samsung products located across the length and breadth of the country. Samsung plans to continue enhancing its penetration levels in the country to reach out to more and more Indian consumers. They consider the Star Elite partner as their actual product champion as their link with the end customer. As, they have been adding value to the sale to the customer and guiding him to the right purchase decision at a fair price. Shop-in-shop: Samsung is ensuring a presence in most big malls and multiplexes; even in the multibrand outlets, as the focus there is to create a shop-in-shop atmosphere. The exclusive showrooms: Keeping its target customer to display Samsung products in a more lifestyle ambience and to communicate the product benefits in a more interactive manner, Samsung India has set up a widespread network of over 80exclusive showrooms comprising Samsung Digital Zone (focusing on high-end digital audio-video products such as MP3 players, camcorders and LCD/plasma TVs). The Samsung DigitAllhome goes beyond the concept of a Digital Plaza or a BrandShop because in the DigitalAllhome, they are trying to create a more interactive environment and providing a more lifestyle orientation to the display, so that the customer can visualize the products in his/her own home settings. The Company plans to supplement its existing Samsung Digital Plazas' (Brand Shops) by setting up 'Samsung DigitAllhomes' in select cities. The Company will also be creating exclusive Samsung corners in multi-brand outlets this year. The demands and needs within the distribution channel lead to the establishment of MyMemoryStore.com. The site is more than an ordinary selling site, in fact it is an industry portal that allows the business partner to come in and track the relevant industry information within the channel, meaning minimizing the inventory overhead. Samsung is also planning to invest over $1 million in setting up a chain of exclusive outlets called `Samsung Talkies'. The entire Samsung mobile range including the latest handsets will be displayed at the outlets, which will be set up in more than 10cities across India, including Bangalore, Mumbai and Hyderabad. Pricing: Pricing also seemed to have played a significant role in Samsung‘s success. Differentiation
is the key for a brand to be preferred by consumers, when there are so many brands within the same product category. Samsung believes in providing good products at reasonable prices to its customers. Samsung‘s technology plank communications helped the company to gain market share, even though it did not offers any discounts or exchange scheme when it entered India. Samsung focuses on cost-cutting measures to keep its price low which helps to combat the discount schemes of the local companies. For e.g. - In 2001, due to high competition in the 20‖CTV segment, Samsung had to resort to price cuts. The company said that value engineering, new product lines and new chassis development had contributing in combating price erosion. Samsung negotiated with its vendors to reduce costs on cabinets, plastics, speakers, harness coils, remote controls, etc. Sams ung‘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 2002 drastically reduced its operational costs which enabled the company to keep low prices for certain products and extract higher profit margin from premium products. This helped Samsung to post a turnover of Rs.30bn, a 2 growth from the year 2001.Samsung is very transparent in functioning. It has a fixed MoP (Marketing Operating Price) whereby the goods are sold to the distributors and to the customer‘s at a fixed market price only. The focus of its competitors is to penetrate in the rural and semi-urban mass markets. But Samsung insists that it's a high end technology driven player. That's why the urban areas are still a focus area for it and only 30 per cent of revenue comes from rural and semi-urban India. They have always been a hi-end technology driven player and want to keep that equity. Not surprisingly, the target customer
for Samsung product s won‘t be found in the price-sensitive mass market. Adopting the lifestyle product platform, Samsung‘s aiming for the high-end premium market. Hence Samsung has always been keeping premium prices. Samsung claims it‘s never been a price warrior — its focus has always been on the premium market, which is why it has remained a steady No. 2or No. 3 player in most product categories. It is difficult to achieve the ambitious targets keeping in mind the pricing strategy of Samsung. But, they believe that it takes time to ensure your supremacy in market share. Once you get your brand perception right in the minds of the consumers as a brand that delivers the best technology and gives you value for money, then ultimately market share goes up. Later on Samsung changed its policy a bit and instead of just remaining a high-end technology driven brand it tried to change its image to sell products to the huge number of middle income families in India. It started pricing its products on the ―value for money‖ concept, keeping in mind the price sensitivity of Indian consumers. But still Samsung has the repute of being a premium brand, aggressive in launching newer models with the latest technology and at economic costs throughout the world.
