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ASSIGNMENT

OF

PRODUCT MANAGEMENT
ON

SAMSUMG
REFRIGERATORS

SUBMITTED TO:

SUBMITTED BY:

DR. T. GHOSAL

SRISHTI GOEL

PROFESSOR
CENTRAL UNIVERSITY OF JHARKHAND

IMBA (VI SEMESTER)


CUJ/I/2012/MBA/33

SAMSUNG REFRIGERATOR
ABOUT THE INDUSTRY:
Refrigerators have been manufactured in India since 1950s.
Till the 1980s, players like Godrej, Kelvinator, Allwyn
and Voltas controlled almost 90% of the market. Earlier,
the white goods sector was categorized as a luxury
goods industry and was subject to oppressive taxation
and licensing. The situation changed after the
liberalization of the Indian economy in the early 1990s.
The government removed all restrictions, and now there
is no restriction on foreign investment, and licenses are
no longer required. Post-liberalization, a number of
foreign companies entered the market and many
domestic players also diversified into refrigerators. BPL
and Videocon who already had a presence in the
consumer electronics market, leveraged their strengths to
enter the durables sector.
In India, refrigerators have the highest aspirational value of all consumer durables,
with the exception of televisions. This accounts for the high growth rate of
the refrigerator market.
The refrigerator market has been growing at a rate of about 15% per year, while the
consumer durables industry as a whole has grown at almost 8%. The size of the
refrigerator market is estimated to be 3.5- 4 million units approximately, valued at Rs
50 billion. The domestic penetration rate of refrigerators is about 9%. The penetration
of refrigerators is considerably higher in urban areas, which account for 75% of the
demand, with rural areas constituting the other 25%. The demand is also higher in the
northern and western parts of the country than in the east. The south also has high
demand as the warmer weather of the south requires a refrigerator running throughout
the year.

SAMSUNG GROUP:
The Samsung Group was founded in 1938 by Lee Byung-chul (1910-1987).
It was incorporated in 1951 as Samsung Corporation. The meaning of the Korean
word Samsung is & quot;Tri-Star & quot; or & quot ;three stars".

Samsung Electronics was founded in 1969 in Suwon City South Korea as Samsung
Electric Industries originally manufacturing electronic appliances such as TVs,
calculators, refrigerators, air conditioners and washers.
CORE VALUES :In everything we do, we strive to help people live better lives.
VISSION AND MISSION: SAMSUNG is dedicated to developing innovative
technologies and efficient processes that create new markets, enrich people's lives, and
continue to make Samsung a digital leader.

MARKET ANALYSIS
Volume growth in refrigeration appliances is expected to improve from 2% in 2013 to
3% in 2015. It is expected that the Indian economy will improve over the forecast
period because it is strong fundamentally as India is a young country with rising
disposable income. Moreover, consumers, especially in parts of India with high per
capita incomes, are gradually moving towards high-end, value-added products.
Indian Refrigerator Market:

Estimated mainly at Rs.2750 cr


Catered by mainly 10 Brands
Annual Capacity estimated around 4.15 million units
Running head of demand of 1.5 million
MAJOR PLAYERS:
LG: The market share of L.G refrigerators is 61% in the all over market in the world
and if we talk about the Indian market it is 36% which is a big market share right now.
SAMSUNG: Born in 1996, Samsung, with 22% global market share has the second
largest market share in the refrigeration industry. It enjoys 33% market share all over
India in its appliances and in its refrigeration. The bestselling model being frost free
refrigerator its one of the best quality and bestselling product in the market.
Target Market Segment: The marketing strategy of Samsung refrigerators was to
come up with a fresh product targeting the middle class audience and also targeting
the lower middle class who do not have refrigerators in their homes or flats etc. With
building a team called Samsung India refrigeration team it targets and sells its
products in the market.
WHIRLPOOL:- The third most eminent player in the market and being the best
player in the market and having the third largest share in the Indian and the world with
12% all over the world and in India 31% .
Target Market Segment: It follows full market coverage with its frost free and defrost fridges in the market. It target premium segment conscious about their life style
and also the middle class and the lower middle class consumers present in the market.
Whirlpool a German based company was born in 1997.
GODREJ: Being the fourth largest player in the Indian market, it has 12% market
share in India and 4% across the globe.
Target Market Segment: Godrej targets the middle class and the lower middle class
people. It drives its products in the way that the target consumer buys its products and
also the consumers gets what is needed by him. The company is an Indian based
company and was born on 1998.

CUSTOMER ANALYSIS: The first and foremost reason why the company operates
is to earn profit and the way they can earn profit is through customers. Their ultimate
aim at the end of the day is to either create or gain customers and keep them until they
are profitable to the company.
To do that the companies try to produce the products or offerings that people want and
value them at prices that are more attractive than the competiton.
Samsung mainly operates in the upper and middle segment of Socio- economic
classification of the customers which includes the upper class and middle class.
In the recent years Samsung has come up with different variants in the Direct cool
refrigerators, Forst free referigerator, Side by side, French Door for the Upper middle
class and upper class section people.
MARKET POTENTIAL:

DATA FROM 2001 TO 2006


From the over analysis its visible that WHIRLPOOL was the market leader from 2001
2004 but by that time LG was gaining the market and hence from then onwards LG is the
market leader in Refrigerator segment.

DATA OF 2013
The refrigerator industry is dominated by LG goods since last 10 years but the most
noticeable thing is the growth of Samsung and Godrej to be on number 2 and 3.

DATA OF 2015
As of now even consumers are most satisfied with LG alone. LG is having a niche market
which is differentiated and always ahead from its competitors.

KEY GROWTH DRIVERS


Economic drivers:
Increasing presence of organised retail
The Indian retail market is currently worth USD396 billion and is likely to expand at a
CAGR of 12.0 per cent to USD574 billion by 2015 end.
The penetration of modern retail is 12.0 per cent in consumer durables segment
Increase demand in rural sectors
The Indian rural untapped market now even has huge demand and due to this the market
share of the refrigerator sector has increased in these areas.
100% FDI in electronic Home appliances.

Social Drivers:
Brand image
Samsung has a huge reputation in the white goods market its having the 2nd most market
share as in relation with its competitors.
Focus on energy efficient and environment-friendly products
Samsung have introduced star-rated, energy-efficient refrigerators
Companies also plan to increase the use of environment-friendly components and reduce ewaste by promoting product recycling
Increased affordability of products
Earlier only refrigerators with direct cooling feature were available but with the entry of
frost free, side by side, French door, double triple door facility the market size has increased
as well as the demand in the market.

SEGMENTATION

DEMOGRAPHIC SEGMENTATION:
1.) INCOME:

LOWER: Direct cool


MIDDLE: Frost free and Side by Side
UPPER: French door and Food showcase

2.) OCCUPATION:
For working women and men using side by side or French door is good and it provides with
quick cooling and keeping things fresh for long.

GEOGRAPHIC SEGMENTATION:
1.) RURAL AREA: for rural area Direct cool refrigerators with less cost effective and power
saving.
2.) URBAN AREA: All the type of fridge with all categories cater to the needs of the people
having different expectations and usage.

PHYSIOGRAPHIC SEGMENTATION:
1.) LIFESTYLE: As per the modern customers and their diverse needs FRENCH DOOR
with 4 door feature can be best suited.
2.) PERSONALITY: double door, triple door of four doors

BEHAVIOURAL SEGMENTATION:
1.) VALUE: Direct cool as well as frost free comes under this.
2.) BENEFIT SOUGHT: Samsungs frost free model was maximum sold and has maximum
benefits from its competitors.

POSITIONING
Continuing to focus on freshness, Samsung is now using the thought of
'Frrrunch' to position itself with a promise to keep vegetables fresh and
crunchy in an attempt to make the positioning younger and livelier for its
target audience
Samsung is going all out to drive home the positioning of the brand. Close on the heels of
unveiling its new corporate tagline, Turn on tomorrow, Samsung Refrigerators has been
repositioned with the thought 'Frrrunch', continuing its focus on freshness.
Frrrunch, a marriage of the words 'fresh' and 'crunchy', is the new umbrella campaign that
shall be used across Samsung's three categories of refrigerators - single door, double door and
side by side. Each category will have one key feature that will help keep food fresh for long.
In its new television commercial, the brand introduces the new feature of Unique Moisture
Control (available in select models) in its refrigerators, which retains moisture and keeps
fruits and vegetables fresh in the 'Frrrunch Box'.
"Every refrigerator talks about keeping food (namely fruits and vegetables) fresh. With
Frrrrunch, we gave it a measure to quantify. It is a promise to keep fruits and vegetables
'FResh' and 'crUNCHy'. In fact, that natural freshness can be felt with the first bite."
Freshness has always been the positioning platform for Samsung refrigerators, which has
earlier used concepts such as 'Bio Fresh', 'Silver Fresh', 'Fresh Tech' and 'Fresh Tech Ultima',
each attributing to a unique technical feature in the product.

TARGETING
SAMSUNG Vision 2020 -As stated in its new motto, Samsung Electronics' vision for the new
decade is, "Inspire the World, and Create the Future." This new vision reflects Samsung
Electronics commitment to inspiring its communities by leveraging Samsung's three key
strengths: New Technology, Innovative Products and Creative Solutions. -- and to
promoting new value for Samsung's core networks -- Industry, Partners, and Employees.
Through these efforts, Samsung hopes to contribute to a better world and a richer experience
for all. As part of this vision, Samsung has mapped out a specific plan of reaching $400
billion in revenue and becoming one of the worlds top five brands by 2020.
To this end, Samsung has also established three strategic approaches in its management:
Creativity, Partnership and Talent. Samsung is excited about the future. Samsung launched
green management initiative that is intended to make Samsung a leading eco-friendly
company by 2013. The 'Eco-Management 2013' plan seeks to reduce greenhouse gas
emissions from manufacturing facilities by 50 percent, and to reduce indirect greenhouse gas
emissions from all products by 84 million tons over five years.

Samsung focused on creating a premium brand image by emphasising on the design and
technology aspects of its higher-priced products and targeting a more affluent customer base.
After 2005, the two have expanded the scope of their target markets and offer both functional
and high-end products.
Product innovation, heavy investment in R&D, and customer preferences have been the key
factors behind the success of the Korean giant.

STRATEGIC BRANDING
Energy management strategy: Samsung Home Appliances has adopted various measures
such as high-efficiency facilities, energy management systems and training programs for
employees to reduce energy consumption across all operations. Company has introduced an
energy certification program for new facilities and buildings from 2010. The company
established a working group for energy management which meets every two months to share
best practices for energy saving and management throughout all business divisions. These
activities encourage facilities to set up highly energy efficient equipment and technologies;
low-power vacuum pump technology, energy efficient water humidification systems, and
energy efficient process optimization, etc. Company is also committed to enhancing
employees' awareness through diverse training, promotions and incentive programs to
facilitate energy saving activities at workplaces.
Compliance Management Strategy: Samsung has established a new compliance system to
prevent and minimize business risks associated with issues such as collusion and violation of
intellectual property rights. They have instituted a compliance program that includes preemptive and year-round training, control and supervision in order to ensure adherence to
pertinent laws by the company and all employees and mitigate risks related to violation of
laws and regulations. Their compliance activities are broadly classified into prevention,
monitoring and follow-up processes. Prevention activities include employee education,
distribution of manuals on compliance, system-based self-inspections, and operation of a help
desk to respond to questions on compliance matters. We also keep up to date with the
introduction and revision of various laws and regulations. There is a separate team dedicated
to monitoring activities. After dealing with a compliance issue, we analyse the related process
and outcome to find the fundamental cause and pursue improvement measures. Real life
examples are used in training programs as a way of preventing recurrence of any compliance
problems that arise.
Climate Strategy: Samsung has been establishing corporate-level strategies to address its
direct and indirect impact on climate change. Through this, Samsung strives to reduce direct
and indirect emissions of greenhouse gases and prevent potential risks by carrying out
initiatives in voluntary GHG reduction and the development of an inventory.
Design strategy Design strategy is a discipline which helps firms determine what to make
and do, why do it and how to innovate contextually, both immediately and over the long term.
This process involves the interplay between design and business strategy, forming a
systematic approach integrating holistic-thinking, research methods used to inform business
strategy and strategic planning which provides a context for design. While not always
required, design strategy often uses social research methods to help ground the results and
mitigate the risk of any course of action. The approach has proved useful for companies in a
variety of strategic scenarios.

PRODUCT MARKET ANALYSIS


PRODUCT LIFE CYCLE

Samsung Refrigerators:
Introduction: Samsung FRENCH DOOR refrigerator
Its new in the market and basically targets upper segments for industry, hotels usage.

Growth: FOOD SHOW CASE & SIDE BY SIDE refrigerators


Its growing at a very fast rate covering those segments which earlier were targeted
through frost free refrigerators.

Maturity: FROST FREE refrigerators


Its in the maturity stage as frost free exist since ages and is now towards decline as
new featured products has captured the market

Decline: DIRECT COOL refrigerators


Its one of the very first and very basic model that in now vanishing because of the
drawbacks it had.

Features in Samsung Refrigerators:


1. Stylishly unique design
Has a truly distinctive design that is available in a choice of varous colours. Its softly curved,
round-top shape and clean lines, without any extra doors, add a sleek and elegant look your
kitchen.
2. Keeps it cool without power
The Cool pack feature in the freezer of this Samsung refrigerator comes to the rescue during
power outages. It keeps food frozen up to 9 hours, maintaining a temperature below 0 C.
3. BEE certified energy efficiency
High energy efficiency certified by BEE, so it saves 2000 INR a year by using less
electricity* without sacrificing performance. Its BEE 5 star rating makes it one of the most
energy efficient refrigerators available.
4. Clearly see inside and save
The first single door refrigerator in India to use high efficiency LED lighting, which is
slimmer, brighter and more power-efficient than conventional lighting, so its much easier to
find what youre looking for.
5. Protection from voltage fluctuation
Its Stabiliser Free Operation means it works very steadily and reliably and prevents electrical
damage or shorting if there are any voltage fluctuations.* If it increases too much it
automatically cuts the power.
6. Safer and more durable shelves
Has toughened glass shelves that are designed and tested to hold a weight of up to 150 kg
safely. So even large vegetables, like marrows, or dishes prepared in heavy pots and pans can
be kept cool and fresh.

7. Some other features:


Anti-Bacteria Protector
Automatic Ice Maker
Cool Pack
Digital Inverter Compressor
Easy Access Dispenser
Easy Slide
Moist Fresh Zone
Movable Vegetable Box
LED lights

MARKETING STRATEGY
Products length & width:
SAMSUNG has 5 categories in refrigerators:
1. FOOD SHOWCASE (2 models):
RH80H8130WZ - MRP Rs. 151,000/-*
RH77H90507H - MRP Rs. 210,000/-*
2. FROST FREE (40 models): Some are

RT33JSRFESL - MRP Rs. 35,700/-*


RT33JSRYESA - MRP Rs. 34,200/-*
RT29JAMSERZ - MRP Rs. 32,250/-*
RT33JSMFESZ - MRP Rs. 36,200/-*
3. FRENCH DOOR (1 model):

RF858QALAX3 MRP Rs. 210,000/-*


4. DIRECT COOL (26 models): Some are

RR21J2835PX - MRP Rs. 15,800/-*


RR19H1784UT - MRP Rs. 14,800/-*
RR19J2784NT - MRP Rs. 15,800/-*
RR19H1784NT - MRP Rs. 15,800/-*
5. SIDE BY SIDE (6 models)

S552RAUA7E - MRP Rs. 87,000/-*


RS21HSTWA1 - MRP Rs. 84,000/-*
RS554NRAU1J - MRP Rs. 96,000/-*
RS21HZLMR - MRP Rs. 121,000/-*
RS21HSTPN - MRP Rs. 81,000/-*
RS21HUTPN - MRP Rs. 96,000/-*

MARKETING MIX
PRODUCT:
1. DIRECT COOL & FROST FREE: Traditionally the most popular style (largely due to
its economical price), this is likely the refrigerator configuration you grew up with. The
freezer compartment is positioned atop the fresh-foods compartment and typically claims
about a third of the unit's total volume.
Advantages: Familiar design; lower price than more feature-rich styles.
Disadvantages: Among the least flexible configurations (along with bottom-freezer); items in
back of freezer may be difficult to reach for children and shorter adults; requires wide, deep
space to allow doors to swing fully open.
2. SIDE BY SIDE: In this style, the refrigerator and freezer compartments are more equal in
size, with each taking up the full height of the refrigerator. The compartments are narrower,
as a result, so are the doors. Adjustable shelves are a must for optimal flexibility. Some
models offer amenities like through-the-door ice and water dispensers.
Advantages: Convenient access to both fresh and frozen foods; abundant freezer capacity;
ideal for narrow or galley-style kitchens because less space is required for door swing than
with full-width-door models.
Disadvantages: Narrower refrigerator compartment may not easily accommodate large
platters; less overall fresh-food space than top- and bottom-freezer designs; pricier than topand bottom-freezer models.
3. FRENCH DOOR: This style combines the advantages of side-by-side and bottom-freezer
configurations. The French doors at the top open to reveal a spacious, full-width fresh-foods
compartment that easily accommodates large platters of hors d'oevres, pizzas and the like. 3door models sport a bottom-mounted freezer compartment; 4-door models are also available
that offer dual freezer compartments, and advanced models offer a bottom-mounted freezer
and a second, counter-height drawer that's temperature- and humidity-adjustable to
accommodate changing needs. Through-the-door ice and water dispensers are offered on
most French door refrigerators.
Advantages: Elegant aesthetic and functional design; highly versatile to efficiently hold a
wide variety of different types of foods; narrow refrigerator doors allow more flexible
installation; advanced 4-door models deliver variable cooling zones for optimal food
freshness.
Disadvantages: Great looks and versatility come at a price.

PRICE: 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.
1. Competitive pricing: For products other than smart phones, Samsung uses competitive
pricing. 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. Thus in various
categories, Samsung keeps competitive pricing so as to beat the competitor. Samsung as a
brand hardly uses penetrative pricing because it doesnt enter late in the market. In fact, it is
present in most consumer durable segments in the market.
2. Skimming pricing: Samsung has skimmed its price in the French door segment and hence
has the niche advantage.
3. Penetration pricing: Samsung has even kept prices low as 12,000 to penetrate in the
market and capture lower segment as well.

PLACE: 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, Viveks 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 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

PROMOTION: 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,
Samsungs brand is on the rise so that both, the pull as well as push strategy is working
simultaneously in Samsung.
TAG LINE: Create wonders

SWOT ANALYSIS OF SAMSUNG


STRENGTHS:
Customers are loyal and appreciating the brand. Samsung is enjoying very good
position against its competitors. The company is maintaining very good relationship
with its suppliers. The company is also maintaining with labourers. Samsung is a
financial strong and Stable. The production processes and procedures of inventory
management are consistent with industrial standards.

WEAKNESSES:
Samsung is facing hard competition. South Koreas labour unions are strategically
linked for collective bargaining and negotiation. Samsung need improvements in
defining the vision, mission and strategic corporate objectives. Marketing
management needs improvement in all the facts of marketing. HRM also needs
improvement in all the facts of human resources management.

OPPORTUNITIES:
The economic condition of South Korea seems favourable. Samsung is interiorizing
the social shifts. It is having constant policy given by the government. Samsung is
reasonable equipped to take care of technological changes. Samsung is maintaining
good international relationship with other countries and the local.

THREATS:
The legislation has been passed frequently related to industry. Technological
transformation takes place in the industry was very high. Regulatory issues and
safeguarding of property rights was main threats in legislations.

PORTERS FIVE FORCE ANALYSIS


Threats of new entrants:

There is huge scope of new developments innovations and strategies that is the reason why
Godrej which once used to be market leader is now no. 4 in refrigerator sector. L.G. has
gained the customers and is the winner in terms of technology and newness.

Threats of substitute product or services:

Despite the fact that refrigerators have immense utility to housewives and provide a solution
to avoid food wastage, the penetration level is still below 20% and its market is growing at a
very small pace. This may be because:
People in small towns and rural areas do not consider it as a necessary product and are
unaware of its utility value. Non-availability of power.
Latest technological advancements and different pricing strategies.

Bargaining power of customers: Customers have huge choices in each segmentLower segment: Samsung v/s Godrej
Middle segment: Samsung v/s Whirlpool
Upper segment: Samsung v/s L.G.

Bargaining power of supplier:

Samsung services has made it unique

Samsung considers 'After Sales Service' as a key differentiator for Samsung products. The
Samsung Service Plazas, as the Company owned Service Centres are called, are a first in the
industry.

The Samsung Service Plazas serve as a one-stop shop for Samsungs walk in customers.
Customers also get a chance to see the Samsung range of products and interact with Samsung
product specialists to know more about the companys products and services.
After Sales Service:
Speed, Smile, Sure is the motto for Samsung Service, as the Company seeks to satisfy more
and more of its customers with prompt and accurate service. A Service Helpline number gives
access to Samsung Service throughout the country. Samsung India organises a Free Service
Camp on an All India basis, every year, for proactively reaching out to customers and
servicing their Samsung products.
10 second to lose a customer, 10 years to gain them back forms the guiding principle for
Samsung Service Team as it strives to satisfy the growing expectations of Indian customers.

Intensity of competitive rivalry:


Intense competition exist in this sector as the demand is not so high but supply is, so the
company with the competitive edge can win this situation well.