Samsung Electronics Global Marketing Operations

PRESENTED BY GROUP 6:
Akash Kedia A42 Neeraja Puranam D03

Aditya Kher
Nikhil Yadav Rohit Godbole Abhishek Narayan

A50 Sehar Khanna

B44 Akshay Heble

D05
D10 D11 D20 D48

Himanshu Chhikara A55 Rahul Singhai D01 Vidisha Sharma D02 Sourav Ganguly

Case Summary
SEC began operations in 1969 as a low cost manufacturer of black and white televisions
1970: Acquired semiconductor business beginning of turnaround phase 1980: Mass production became major supplier of commodity products Company focus: Manufacturing. Profits reinvested in R&D, manufacturing & supply chain activities

The Asian Financial Crisis

1997: Asian financial crisis
Negative Net Profit for SEC

Major restructuring: Dismissal of 29000 workers and sales of billions of assets

Result: Reduced their debt drastically from $15B to $4.6B Increased net margins from -3% to 13%

Taking Control
In 2002, posted Net profits of $5.9B (in sales of $44.6B)
2003: Most widely held stock among all emerging market companies Remained committed to core competence: MANUFACTURING 1998 2003: Invested $19B in Chip factories and $17B in manufacturing facilities for TFT-LCDs

Problem Statement
Brand Recognition: Sold products mainly to OEMs, so company had very little interest to work on the Samsung brand
Concept of Marketing: Managers perceived marketing as nothing more than selling; only required when product is weak

THREATS

OPPORTUNITIES

1. Unlike competition, avoided proprietary software and content as Movies, Music and Video Games 2. Some confusion within the organization on ROMI

1. Could commercialize a concept in 5 Months (Twice as fast as Japanese competitors)

2. R&D facilities established across geographies 3. Considered investment in R&D and Production as source of greater flexibility 4. Appreciates competition (Sony) and plans to excel by innovation

T.O.W.S.

1. Operating Profits dependent heavily on Semiconductors and Telecommunications business. (OPM low for Digital Media) 2. One Size Fits All approach to branding

1. Manufacturing remained a Core Competence 2. Ensured competitiveness of Plants by competition for Internal business 3. Samsungs product diversification differentiated the company from its competitors

WEAKNESSES

STRENGTHS

Accelerator Market Brazil

Brand Awareness

Relational Style
25% is Price Based forming the biggest segment Only 5% of the populace exhibits the Reliant behavioral Style

High Demand across all categories Repeat Purchase Brand Loyalty

STRENGTHS Existing Trust in the Brand can be leveraged Hi tech product portfolio compliments rapid mobile usage growth WEAKNESSES Need to upgrade Brand Image Fragmented retail distribution hampers volume growth

Portfolio Positioning
Current Positioning: Reliant It is in a Stuck in the middle brand position where it is neither a volume player nor a premium player

Competitor Positioning
Current Positioning: Perfect Fit Sony, the market leader is dominating the premium segment of the market

Turnaround Market USA

Brand Awareness High Demand across all categories Repeat Purchase Brand Loyalty
STRENGTHS Credibility among customers on the rise Improving relations with the channel partners WEAKNESSES Awareness & Loyalty still less than Sony Still perceived as a Value Brand

Relational Style
28% in Perfect Fit & Delights Me Segment 7% belong to Price Based Segment

Portfolio Positioning
Current Positioning: Price Based Overtly reliant on Low Margin Price Based Products

Competitor Positioning
Current Positioning: Reliability Orientation 17% of Client Base is uncommitted to our product line

Advanced Market China

Brand Awareness

Relational Style
25% of the customers exhibit affinity to Perfect Fit Products 8% of customers exhibit Delights Me style

High Demand across all categories Repeat Purchase Brand Loyalty

Portfolio Positioning
Current Positioning: Delights Me Currently lags Sony with a score of 109 (compared to 131) in the top end segment

STRENGTHS Perceived as a quality brand with high repeat purchase tendency Purchasing power focussed in major cities in line with our supply chain

WEAKNESSES High exposure to low margin segments Low volumes leading to lower profits

Competitor Positioning
Current Positioning: Perfect Fit Sony enjoys a strong dominance in the Delights Me & Perfect Fit Category

CURRENT SITUATION

Business Overview

News on the block

Top Global Smartphone Sales and Market Share in 2012: 213 million units of Samsung sold with best industry growth rate of 16% in Mobile PC Sales Samsung to develop new mobile office software by 2014 to reduce dependence on Microsoft for operating system and software

Apple Samsung legal battles continue over patent infringement

Samsung has become the world's biggest advertiser, spending $4.3 billion on ads in 2012, but its global brand value of $39.6 billion is less than half that of Apple, which spent only $1 billion on advertising The underlying problem is that Samsung has established itself as a dependable quality brand, not a differentiated or premium quality product, so it does best where it's not competing directly with Apple

To be known as innovative

Samsung Electronics pioneered the worlds first SMART camera. In 2012, anticipating rising interest in enjoying, editing and instant sharing of images after shooting, Samsung released GALAXY Camera Continuing innovation in the AV business, 2011 Samsung launched the worlds first wireless audio dock with a built in vacuum tube. In 2013, they employed a vacuum tube and wireless connection to TV to sound bar speakers AirTrack HW F750, ensuring lead in the global AV market with their new audio system Many innovative products in printing solutions and household appliances

Market Position

VERTICAL INTEGRATION

Manufacturing as a core competency Flexible plant locations and R&D facility

To avoid the commoditization trap SEC customized the production of its memory chips

HARDWARE FOCUS

Developing no proprietary software and content (music, movies and video games)

PRODUCT BREADTH

Samsungs product diversification differentiated the company from its competitors

Market Position
DIGITAL PRODUCT INNOVATION

Transition from Analog to Digital technology Propelled Sashimi Theory where new fresh technological products are sold at higher prices but decline later

DIGITAL CONVERGENCE

Merging of different technologies into one major product

AVAILABLE ALTERNATIVES

Advertise Less & Focus on R&D

Pros

Cons

Unique Products and Competitive advantage especially in a fast paced technology industry

Likely to get lost in the clutter of products in fragmented product lines Losing out on Youth

Long term Income

Uncertain outcomes
Different countries see Samsung as a different brand. Streamlining the Brand Identity becomes crucial to become a global brand which would be lost out

One size fits all Strategy: Advertise to the sensible brand buyer and dont follow a more complex segmentation strategy

Pros

Cons

No additional Investment in creating a new Brand Identity for Sub Brands Easier momentum to garner for one brand with certain amount of budgets Core essence of brand gets extended to all product lines Optimization of Spends Launching a new product under this strategy gains recognition easily

Since Samsung is using its M Net software to optimize spends penetrating culture of individual countries would be difficult

Product failures affect other brands as well

Premium positioning of brand affects lower range products Customization advantage of Samsung is lost

Complex segmentation: Newer sub brands other than Samsung brand name which cater to more niche segments
Pros

Cons

Branding and products suitable to each country can be highlighted without affecting parent brand image while leveraging the brand Samsung Customization can be highlighted Different features of product can be highlighted using new brand Easy to diversify (Organic growth)

Possibility of cannibalization

More investment
Difficult to convince line managers