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Samsung Marketing Strategy Case Analysis
Samsung Marketing Strategy Case Analysis
1. By 2002, Samsung was rated as one of the top 3 players in the global mobile handset market. Analysts attributed Samsungs success to its marketing initiatives. Discuss the role of marketing in Samsungs success. To establish itself as a major player in global mobile handset market, Samsung implemented different marketing strategies like innovative and technologically advanced products, people centric product designs which satisfied the needs of the consumers worldwide, partnering with local distributors and suppliers, exploring new market and consolidated marketing effort. Firstly, Samsung focused on its product to shed its OEM player. For this, the company started a restructuring process called New Management which focused on product quality, globalization and multifaceted integration. The company prioritized quality over quantity and implemented various quality initiatives like Six Sigma approach and assembly line manufacturing to ensure quality. To make products suitable to all, it established design institutes in Europe, US and Asia. Samsung separated a budget of $ 126 in a program for building complete global design. In already crowded electronics consumer goods sector, Samsung decided to launch products which were technologically advanced and innovative. With this, Samsung gained a competitive advantage among its competitors. It also established research facilities in California (United States) and Tokyo to improve its product line. Another marketing strategy that Samsung implemented was lifestyle targeting rather than technology targeting. Samsung identified that consumers bought goods that matched their lifestyle instead of the technological features. Therefore, Samsung positioned its products
to the Generation N and Generation Y consumers. This was possible due to the effective coordination of the activities of the companys geographically disposed design teams. Designing and developing products specific to a certain target group also gave the company a competitive advantage from its competitors. In the market that is already dominated by Nokia, Samsung focused on producing high end mobile phone handsets and targeted high end consumers. The Samsung mobile phones were priced more than the regular phones because of the value added features and advanced technology. Samsung also constantly innovated its mobile phones, in which it was the strongest, and hence was able to establish its supremacy. Therefore, Samsung is the biggest brand of smart phones in the world. Its products are expensive than others but yet come with many embedded features. Also, it produced different variants of smart phones to cater the needs of different consumer groups and made it available to everybody. This further strengthened its position as the market leader in smart phone manufacturer. Having a good product and good marketing plan is not enough if there is no visibility. Associating with a big and well known event can be fruitful to an emerging company in this case. Samsung became the official sponsor of wireless technology to the Seoul Olympics in 1998. This association gave Samsung the much needed exposure and boosted its image worldwide. In these ways, the marketing strategies implemented by Samsung boosted its image as a global brand and helped it establish as one of the top 3 players in mobile handset market.
2. Compared to established rivals like Sony, Matsushita and Nokia, Samsung was a late entrant in the global consumer electronics market. Comment on Samsungs brand building initiatives in the global consumer electronics market. Being a late entrant in global consumer electronics market, Samsung had to implement different approach than Sony, Nokia or Matsushita to establish itself in the market. For this, Samsung initiated various activities to gain customers by focusing on designing and developing innovative and high end products and implementing marketing activities worldwide to increase its visibility. As a part of marketing activities, Samsung sponsored the Seoul Olympics in 1998. This gave Samsung necessary visibility in worldwide and gave its image a major boost. Other initiatives that Samsung undertook to change its brand image was establishing design institutes in Seoul, Palo Alto (United States) and Middlesex (United Kingdom) which helped the company design products which appealed to the consumers all over the world. The company focused on quality and design rather than quantity to move away from its OEM image. The company based their design philosophy on the principle of Balance of Reason and Feeling, making the designs more balanced with technology and human adaptability. To meet this goal, the company set aside a budget of $126 billion for a program of building complete global design. We can now see the result of this effort as Samsung is taken as the producer of premium brand of electronics which are both beautiful and of high quality. Also, Samsung focused on building products for the internet generation and conducted research and market surveys to find out the consumer behavior of that generation. The
findings from these researches were later incorporated in the products and hence the internet generation could directly relate with these products. While Samsung constantly promoted its strong product categories like mobile phones, it also concentrated on its weak categories like digital TV. Another task that Samsung undertook to promote its position in the market was to create a partnership deal with local distributors like Best Buy and AOL to sell and promote their products and increase its market presence. This strategy helped Samsung to improve its brand image in the United States. Another than this, as an initiative to have a global presence, the company entered new markets like India, where Japanese products were considered to be of better quality, and depended heavily on corporate campaigns which highlighted the companys strengths. Entering a new market is always a challenge, especially when it is already dominated by a strong contender. To survive in such a market, one has to be able to create an image of oneself that is different from the leader. Samsung was able to do this by highlighting its strengths through its corporate campaigns. Samsung was able to identify the trend that digital products will be popular in the future and hence it branded all of its products as Samsung DigitAll which expressed the companys aim of providing only digital products. Identifying the trends in the market can help one to change the marketing mix which will be suitable for future. Samsung was able to do this and hence it was successful. Also, the advertisements created were focused on strengthening its image as a global brand. For example, Samsung signed an agreement with Nobel Prize foundation to
produce Nobel Prize Series advertisements which were aired in nine languages across Europe, the Middle East, South America and CIS countries. Building a strong brand is a very lengthy process, and yet to create and survive an image for oneself in a market where there are already leaders is a very difficult task. However, Samsung was able to enter this market and yet grow as a leading brand in a very short time. Samsung able to succeed in such a market because it was able to identify the changing consumer needs, provide technologically advanced and well designed products, made the brand visible and created presence in the whole world.
3. Which one of Samsungs marketing strategies was mainly responsible for its success as a global brand? In what way did it help Samsung? Discuss. Designing and development of innovative and technologically advanced products was mainly responsible for the success of Samsung as the global brand. Samsung had an image of OEM player and its products were associated with low end technologies. Consumers of the developed country didnt choose Samsung products as their first choice of purchase. Samsung had to change this perception in order to establish itself as the global market player. By designing and producing innovative, technologically advanced and high quality products, Samsung was able to target premium consumer sector in the market. Because of the advanced technology and features incorporated, its products were generally priced higher than the competitors price. Samsung used lifestyle segmentation instead of technology segmentation to market its products as consumers bought products which
reflected their lifestyle. Technologically advanced products helped Samsung to target premium section of the market and hence it was able to change its image into a producer of high quality consumer goods. It also helped Samsung to create promotional campaigns focusing on the advanced features that the products had. Samsung was able to identify the trend that the world is going to be digital, and hence it produced advertisements with focusing on this concept and conveyed the message that its products were all digital and they were suitable for everybody. With a superior product design and development, Samsung was able to devise a marketing plan focusing on the features that separated its products from others, and hence it was helpful on establishing Samsung as a global brand.
4. Analysts felt that it would not be easy for Samsung to beat Sony, which was known for technologically superior products like the Trinitron television, Playstation and Walkman. Do you think Samsung can beat Sonly only through aggressive marketing, without bringing out any technologically advanced products? asfasf