CHAPTER 1 INTRODUCTION 1.1. Background
Samsung is one of the world’s premium electronics manufactures. manufactures. The The estimated e stimated value value of Samsun S amsung g brand had risen from US$6.37 billion b illion in 2001 to US$10.85 billion in 2003. 200 3. A major factor behind th this is impressive impressi ve growth had been Samsung’s effort to redefine itself i tself as a vendor of cutting-edge, cutting-edge, “gee“gee whiz” consumer technology. Samsung believed that repositioning the brand is a vital to the company’s future success. While the the Samsun S amsung g had become bec ome more familiar fami liar and more favorably regarded among consumers, it still carried many strong associations associ ations with the company’s company’s past, when Samsung’s Samsung’s consumer consumer product prod uct line consisted primarily of low-to mid-range products sold at affordable prices via a hodgepodge of retail channels. Largely for this reason, many North American and European consumers still saw the company as a follower follower rather than than a leader lea der in i n bringing new consumer consumer technologie technologies s to market. So that that senior executives executives in i n Samsung’s Samsung’s head office believed b elieved that much much work remained to be done in their their effort to redefine redefi ne their their brand. 1.2. Business/Industry Situati S ituation on
Internal : What’s Samsung facing today is how to increase the level of quality brands of Samsung, including the the prices p rices and products, and the best distribution dis tribution that that can help brand-building of the the company c ompany.. Now Samsung faced sev se veral situ si tuations ations in i n order to enh e nhance ance brand-building, especially especi ally in Canada. Samsung has has been be en known known as a big b ig electronics company, company, has a reliable relia ble quality product at an affordable price pri ce for the the low-to mid-range so society ciety.. Why Samsung Samsung chose to expand into Canada? Because Beca use Canadian Canadia n market was highly highly fragmented fragmented and a nd the the buyers buyers were price pri ce sensitive. sensiti ve. Canadian electronic buyers buyers also placed a great deal de al of emphasis on good customer service service and favorable favorable return return policies. policie s. External : In the 1990s, the consumer electronics industry was rapidly and dramatically transformed by the emergence of digi d igital tal technology technology.. Digital Di gital products p roducts tended tended to produce higher quality sound sound and pictures enabled convenient interfacing with personal computers and the Internet. By the turn of millenniu millennium, m, a barrage of digital di gital consumer product were were being be ing introduced, including including MP3 audio players, digital cameras, PDAs, digital mobile phones, HDTV sets, DVRs and LCD computer monitors. 1.3. Competition Situation
From the 1960s 19 60s until until the early 1990s, consumer consumer electronics were generally analog, a mature technology that was characterized by a steady flow of minor, incremental innovations. These were usually usually introduced by Japanese companies, such s uch as Matsushita Matsushita Electric (Panasonic), Sony S ony Corporation, Corpo ration, Toshiba Toshiba Corporatio C orporation, n, Japan Victor Corporati C orporation on (JVC) and Hitachi. Of these, these, Sony S ony was generally viewed as the most successful, and was recognized as having the most valuable consumer electronics brand in the world. In addition additi on to lacking a strong competitive competi tive edge in designing desi gning and manuf manufacturin acturing g digital di gital products, these these firms fi rms also lacked some s ome usual usual marketing advantages. advantages. Most early e arly adopters adop ters of digital di gital products were teenagers and a nd youn young g adul ad ults ts in their 20s – a group that was was often o ften skeptical of large corporations corporati ons and receptive recep tive to products pro ducts from nontraditio nontraditional nal brands. Samsung Samsung management, which which had first begun beg un to market consumer electronics electronics under under its i ts own brand in the the mid-1990s, mid -1990s, percei p erceiv ved a golden opportu oppo rtunity nity,, and resolved to become be come the leading leadi ng global provider of next next generation
consumer electronics products. Samsung have made good progress but their unaided awareness and brand loyalty are still below Sony. 1.4. Problem Definition
Samsung wants to become as strong market leader. It means that they want to establish Samsung as a premier consumer brand. To achieve this there would be many obstacles such as: How Samsung reposition their brand to become a market leader? What changes should be made to Samsung’s marketing mix?
CHAPTER 2 THEORETICAL BASED
1.1 Marketing Mix Theory
Marketing mix" is a general phrase used to describe the different kinds of choices organizations have to make in the whole process of bringing a product or service to market. Marketing mix" is a general phrase used to describe the different kinds of choices organizations have to make in the whole process of bringing a product or service to market. The 4Ps are: Product (or Service) Place Price Promotion A good way to understand the 4 Ps is by the questions that you need to ask to define you marketing mix. Here are some questions that will help you understand and define each of the four elements: 2.1 Segmenting, Targeting, and Positioning
Segmenting, Targeting, and Positioning are one of fundamental things in marketing. Segmenting, Targeting, and Positioning is: • Segmentation: grouping consumers by some criteria, such that those within a group will respond similarly to a marketing action and those in a different group will respond differently. • Targeting: choosing which group(s) to sell to • Positioning: select the marketing mix most appropriate for the target segment(s)
CHAPTER 3 SAMSUNG ELECTRONICS 3.1. Company Profile
Samsung Electronics is owned by the Samsung Group, one of Korea’s largest and most respected “chaebols”, or industrial conglomerates. Samsung was ranked 59 th in Fortune magazine’s list of the world’s 500 largest companies and 15 th in its Asia Top 50. Samsung founded in 1938 as a small trading company and had been a key player in the industrial transformation of Korea in the 1970s and 1980s, eventually evolving into economic powerhouse that boasted 175.000 employees worldwide and operations in 67 countries. 3.2. Product Information
The Samsung Group operated a broad range of business, but emphasized the three main core activities, such as: electronics, finance, and services. From the three main activities, Samsung Electronics is the one that can compete with other leading brands. Initially that making Samsung’s products are on the rise is the development of 256K dynamic random access memory (DRAM) computer chip and a VLSI (very large scale integration) version of the 64K DRAM chip. By the turn of the millennium, the company’s successful introduction of leading-edge products such as mobile phones, MP3 players, digital televisions and personal digital assistants (PDAs). In SECA, products marketed fell into two broad categories: consumer electronics and appliances, and information technology. CDMA mobile phones is highly successful products that were sold by SECA. The company also sold high-end televisions such as plasma and digital light processing (DLP) that enjoyed healthy contributions margins and strong outlook for growth. In the information technology division, Samsung’s LCD computer monitor was becoming a star performer of the company. The Samsung’s laser printers had also begun to establish a strong market share in Canada. After all, sales volumes for the products were good, research and development costs were virtually zero, and the lines were profitable for SECA.
CHAPTER 4 ANALYSIS 4.1. Marketing Mix & STP
Samsung had their own Marketing Mix strategy, and also they had their own Segmenting Targeting, and Positioning. Existing Samsung’s marketing mix and STP are: Product :
Low- mid class of Electronics Place : In this case, they just mention the place that they are focus in is in Asia, USA, and Canada. Promotion : In 1999, the company launched a worldwide campaign using the tag line : “SAMSUNG DIGITall – everyone’s invited” Rollout of the new campaign coincided with consolidation of responsibility for Samsung’s global advertising from 54 different ad agencies to single agency of record : Foote, Cone & Belding. Moved into high profile sponsorship such as Sydney Olimpic Games The company paid to have its mobile phones prominently featured in popular science fiction films, The Matrix. Price : Samsung Electronics Products has wide prices range, some of products was categorized as a premium product. Segmenting : In Canada, Samsung management divided the consumer electronics market into four segments, high income family, the young generation, business users and hobbyists. Targeting : Expand their market target in America and Europe. Positioning : As a provider of innovative digital consumer electronics that were also easy to use. As one of the world’s premium electronics manufactures.
4.2. Formula Alternatives
Before formulating alternative, we should make SWOT analysis to know the Samsung strength, weakness, opportunity, and threats better. Here are the SWOT analysis. Strength : 1. 2. 3. 4. 5. 6.
Trend setter/pioneer in electronics technology Have a more advanced R&D program in their company that produce a sophisticated product Innovative marketing strategy Have a partnership with Sony, which is their main competitor in technology The Samsung’s technology is adaptable to use Have a various range price of product
Weakness : 1. Limited budget for promotion, especially in Canada 2. Samsung sold a number of low-end items that were not especially compatible with the
3. Do not have a courage to take a risk to build their own store 4. The lack of Samsung’s brand awareness of American and European (American and European assumed that Samsung is just a follower, not a trendsetter)
Opportunity : 1. Increasing demand of consumer for electronics devices 2. Globalization that makes expand the target market around the world
Threat : 1. Emergence of new product that provide more quallity and cheaper product than Samsung 2. Emergence of new innovative products from other companies 3. Because they are trendsetter in technology as a result there will be a follower that copy their product.
From the SWOT analysis we can formulate the alternatives to solve the problem : Maintaining their product quality Hired young people who have competence in their ability Optimizing their investment in their Research and Development Keep developing innovative marketing strategy Improve their internal marketing in the company to hiring, training and motivating employees who want to serve customers well. Build partnerships with well-known companies to prepare for globalization
4. Alternatives Analysis Problem Solutions
Adavantages & Disadvantages Positive :
Before investing their money into promotion program they need to maintain their high Maintaining their product quality quality product. So maintaining the product quality is needed. Negative :
They still need much fund in R&D Positive :
Hired young people who have competence in their ability and fired unproductive employees
Hired fresh graduate with low salary in order to minimize operation budget Have youthful perspective to making the company attuned to global markets Negative :
Lack of working experience The company need to invest in their
training Positive :
Optimizing their investment in their Research and Development
Developing innovation in their technology to create new products Increase budget for others department, such as promotion department Negative :
Decreasing their advanced innovation technology Positive :
to attract new costumer and increase brand awareness of Samsung.
Keep developing innovative marketing strategy
Negative :
The company need to invest in their promotion Positive :
The company can maintain the relationship with customer, such as giving costumer excellent service.
Improve their internal marketing in the company to hiring, training and motivating employees who Negative : want to serve customers well.
The company need to invest in their training Posibility to pay higher salary for employees Positive :
Expand their opportunities to reach larger market Techonology exchange Reducing the R&D fund, because of the partnership
Build partnerships with wellknown companies to prepare for globalization
Negative :
Posibility of company’s secrets are treathen
4. Solution & Contingency Plan To keep Samsung as strong market leader in the technology industries, the most feasible solution is: Optimizing their investment in their Research and Development. So they can hired young people who have competence in their ability and can develop their innovative marketing
strategy and also build partnership with well-known companies to prepare for globalization. These solutions have some risks and impacts such as decreasing their advanced innovation technology. This issue can be solved by observe new employees with high competence and low salary. Besides, Samsung sold a number of low-end items that were not especially compatible with the company’s new positioning, so the company should have change their marketing mix strategy in place section, especially how their distribute the products. Samsung should have their own store for upgrade their brand quality, but the company still sold the products in some retails.
