I.

Positioning Statement

Samsung embodies style and technology for the young professional, with its cutting edge design and
superior connectivity features.

Samsung's positioning statement is one that asserts its differentiation vis-à-vis other mobile phone
providers. In the local market where myriad choices abound, Samsung's sleek exterior design,
accompanied by its selection of soft and hard features, render it an optimal purchase for the young,
technologically updated professional.

II. SWOT based on primary and secondary research

Strengths

 Strong global presence

 Diversified product line

 Technology

 Design Weaknesses

 Customer perception of weak product attributes like Durability

 Camera / Video quality, User friendliness

 Voice clarity, Value for money

 Incompatibility with different software platforms

Opportunities

 Increasing mobile market

 High % of Younger population

 Strong customer demand for innovative products & value-added features

 Low Landline penetration Threats

 Increasing competition

 Decreasing product margins

III. Prioritized Segments

Based on the output of our UAI and our research, we have deduced that the features which
distinguish Samsung from its competitors are primarily appreciated by young urban professionals.
This segment, consisting of emerging and experienced members of the working force, are versed in
new technology as they are constantly updated by colleagues and possess aspirations towards
advancing in their careers. They have been identified as the primary target market because of their
higher levels of disposable income as opposed to students who subsist on allowance.

Samsung's secondary market falls within the age range of 15 to 25. This age group consists of mid-
teens and new members of the workforce. The predisposition of the teenage segment to yearn for
the latest mobile phone models is driven by peer pressure and the desire to be identified as keeping
abreast with the latest trends.

A more detailed discussion on these two segments follows below:

Exhibit 1: Primary and Secondary Market Segments

IV. Profile behavior and decision making process

Visiting a Samsung concept store revealed some purchase habits of potential Samsung clientele.
Potential buyers who amble into the store are well researched and informed. This is evident in their
already having a selection of models in mind prior to store visit. This is also manifest in their verbal
request for specific features and for units falling within predetermined price ranges.

Cross-referencing overt behavior in the shop with data obtained from the UAI reveals three primary
sources of information in cellular phone selection. Television was noted as the primary
communication channel from which product knowledge was gained. In terms of purchase decision,
peers and colleagues advice was a primary influence.

Exhibit 2: Sources of Information and Key Influencers

Apart from the above data, interviews have allowed us to conclude that a considerable majority
begins their pre-purchase activities by comparing several brands in terms of desired and available
features, price, and point of purchase promotion.

V. Qualitative Value Proposition

Qualitative features aligned with Samsung's value-proposition are 1) Style/Design, 2) Technology,

3)Value for Money, 4) Durability, and 5) Usability/User-friendliness. Also gleaned from our FGD and
UAI are the aforementioned qualitative determinants of perception of value. These criteria were
ranked primary in terms of what would-be mobile phone buyers seek when they select an optimal
unit.

VI. Qualitative & Quantitative Marketing Objectives

Samsung's marketing efforts should be oriented towards increasing its market share and sales
volume of its mobile phones. 2007 data place Samsung as the third highest mobile company,
garnering 13% market size of 46M. This translates into 5.98M Samsung users, which we can aspire to
increase by 15%, given that the market is projected to increase at a rate of 10% per annum. Using
these figures, the 50.6M anticipated market should allow Samsung a projected 7.59M size in the
year 2008.

Aggressive and strategic marketing programs should be launched with the end goal of improving
brand recall. The conducted survey placed Samsung as either second or third in terms of brand
recall. These findings were present among 53% of the respondents. An increase in the marketing
budget, the proliferation of Samsung kiosks, as well as the introduction of two sub-brands should
heighten awareness, interest, and purchase intent, evidenced in subsequent surveys. Future surveys
should indicate an improvement, substantiated by shifts in ranking towards first or second with
brand awareness as the criteria.

VII. Product Strategy

In the Philippines, Samsung's brand equity is not particularly strong in terms of its promotion of its
cellular phone series, compared with Nokia, Sony Ericsson, and Motorola. The Nokia N-series is
geared at video and entertainment while Sony Ericsson's walkman-phone and Cybershot phone
series build on the Halo Effect of the original Sony Walkman and Sony Cybershot cameras,
respectively.

Samsung's website reads: 'groundbreaking mobiles with the slimmest profiles in the world that let
you live life to the fullest'. In this respect, the slimness of the handset is not tantamount to
differentiation, as it shares the market as the Motorola Razor series, which is more widely
recognized for its sleekness. On a model-to-model basis however, majority of Samsung phones will
trounce Motorola in terms of slimness, their marketing campaign and product differentiator remains
weak. On the physical aspect, Samsung has smoother curves on the edges compared with Motorola,
however, not many are aware of this distinctive feature. Samsung can be more aggressive in terms
of marketing the slimness of their units as well as the wireless capabilities. In addition, Samsung can
differentiate by niching on the Wi-Fi market as there is currently no brand that can claim market
leadership in this category. On the lower end segment, Samsung can push their products by
marketing its mobile phones as entertainment gadgets with the opportunity for membership in the
Samsung ‘in' club .

a. New or extension

It is recommended that new product lines be added in order to directly address the needs of the
primary and secondary market. Creating a series of cellular phones that exemplify style,
individuality, technology and professionalism is necessary in order to drive the sales of Samsung
cellular phones. By adding the two new segments/series: Executive Series and Entertainment
Series, higher retention and value addition will be ascertained.

Executive Series (For the Primary Target Market):

The executive series will be equipped with features suitable for professionals, such as Internet,
Bluetooth/Infrared, WAP, MS-Office Functions and Synchronization with computing / networking
devices. This series is aimed at providing executives the power of computing and networking
anywhere and everywhere.

The flagship of this executive series will be the Samsung Internet Phone eXtreme or Samsung IPX.
This revolutionary, stylish, and slim phone will satisfy all the mobile and connectivity needs. The
convergence of mobile phones and Wi-Fi technology signifies the creation of new programs and
streaming applications that take advantage of capabilities of the internet at broadband speed. This
‘mobile office' is packaged in a small handheld device that will not be limited to the downloading
speed of GPRS and EDGE technologies. This focus on the Wi-Fi and high-end networking will
provide Samsung a competitive edge as it addresses the connectivity and networking needs of its
primary target market.

The IPX edition will be marketed as the phone with limitless connectivity. The product will be
installed with Samsung's operating system software that is designed to enhance connectivity as well
as integrated productivity programs which are essential for professionals. IPX will however be relying
on the network capabilities of the mobile phone line carrier's other network technologies.

Samsung IPX will create an atmosphere of always on, always connected to the user by automatically
scanning and selecting the best connection source among different connectivity options available in
the location the user is in. These connection options include previous as well as the latest wireless
technologies such as WiMAX, WAP, GPRS, EDGE, HSDPA, and Wi-Fi (802.11n/g/b). Other non-
internet connectivity capabilities will include Bluetooth and Infrared. The sequence of connectivity
search will be based on the user's configured preference.

The IPX operating system will be based on open source architecture so as to entice the developers'
community and generate suitable software applications, thereby creating a limitless range of
software applications.

Mobile office applications will include a productivity suite to match the needs of the professionals on
the go. This suite will include "Mobile Mail," a real-time email application software that
automatically receives email messages, utilizing a format similar to the Microsoft Outlook email
application in computers. It will constantly check for new emails, depending on the user preferences
(e.g. every 2 mins, 5 mins). The application's user interface design will bear the look and feel of
personal computers, whose format is more familiar.

One of the distinct features of "Mobile Mail" is the calendar & scheduler. This application will allow
the user to block specific schedules, whether daily, weekly, or monthly. In addition, users with the
same "Mobile Mail" application can request for access to view the user's schedule. This will be a
benefit in an office setting, wherein a secretary schedules appointments as well as other activities for
his/her superior. The set-up facilitates scheduling for the IPX user, such that his/her assistant can
suggest appointments and activities within currently free time slots. Select users can also send
invitations for meetings or appointments, instantly receiving responses from the recipient (IPX user),
who will have the option of accepting or rejecting the invitation to add to his/her schedule.
Accepting the invitation will automatically update both users' calendars with the details of the
appointment. IPX users will again be notified about the appointment as the schedule date
approaches.

The productivity suite will also include a document reader (eg. PDF reader), as well as document
maker compatible with most of the widely accepted document formats such as MS word, MS excel.
This will allow them to create and read email document attachments. Moreover, since the phone
will have a regular keypad, a hidden USB port with an aesthetically pleasing cover located at the
bottom will be available to users who prefer the use of standard keypads so that they can connect
their preferred keyboard.

Since the IPX phone will have a touch screen feature, as well as a look and feel similar to the PC, a
user's browsing habits will not be compromised as the browser will allow him to tinker with the view
by zooming in and out through the webpage via his finger. This will allow users to view the page at
larger fonts and images, and scroll through other areas of the page and view them together with as
smaller ones. Web browsing will be made more convenient by allowing users to visit previous page
history by swiping their thumb on the screen, such that swiping it to the right will bring them to the
next page, and leftward to the previous page. In doing this, users can see all the pages in a tiled view
consisting of the previous 5 pages they visited.

To further enhance connectivity, IPX series will be launched with the "Skype Mobile" program, which
will be similar to the Skype available for PC. Bundling this application will allow users to maximize
their connectivity options and allow users to use Skype Mobile to connect to a Skype-installed PC
with Skype without extra charges. Users will be able to maximize their reach in connecting to other
countries, while minimizing cost. Users, however, will still have to pay for the connectivity services
(3G, HSDPA, WiMAX, etc) provided by mobile phone line carriers, unless they are connected to a free
Wi-Fi hotspot.

To support tie-ups with Napster or other online music vendors, bundled music player softwares will
be will be among the phone features. This software will allow users to directly connect to
Napsters'/music vendors' server and download music files directly.

One of the unique features of IPX is its security. Samsung will have a finger print reader and software
installed on a phone unit level instead of on the current SIM card level. This feature will prevent
other would-be users (apart from the owner) from using the phone, even if other SIM card is
inserted. This feature is aimed at preventing potential thieves from benefiting from stolen IPX
phones. In case the user cannot access the locked phone, he/she can request that the phone be
unlocked in any Samsung's service centers, with the condition that the user can prove that he/she is
the owner of the unit (e.g. by providing valid ID's and documents). IPX mobile phones will also have
an anti-virus installed for free. This will be updated real-time with the latest virus definitions and
patches.

Other features of the IPX include a five (5) megapixel digital video camera equipped, as well as
camera facing the user, enabling him/her to use 3G capabilities for video phone, and "Mobile
Meeting" and allow professionals to conduct and attend online video conferences.

Exhibit 3: Connectivity Model

Entertainment Series (For the Secondary Target Market):

Samsung Energy! or Samsung E! is a stylish and colorful slim phone for the fashionista preppies and
yuppies. Diverse colors will complement the user's; the mobile will be regarded as an accessory, on
top of its functionality. With either sophisticated or sporty designs, phones will be equipped with
features such as Bluetooth, games, music, camera, and video. The Samsung entertainment series will
provide users in the secondary target market "mobility with style".

Like the Samsung IPX series, Samsung E! will feature connectivity on its handsets, however, the
phone will not be equipped with a touch screen display as well as productivity suite. Instead, it will
have limitless gaming facilities. Since the phone will have a Samsung operating system be based in
open source architecture, game developers will be welcome to create mobile gaming programs in
line with the taste of the younger users.

E! series will also have access to online music/video vendor such as Napster to allow users in this
segment to directly connect online and downloading their choice of music. A five (5) megapixel
digital camera equipped with flash will be included to match this groups usage style. Furthermore,
an online application for chatting will be bundled to enable them to socialize and meet new people.

In order to adapt to changing trends, the E! series will have removable covers/casings to allow users
the option for different colors and styles which fit their tastes and personalities. Moreover, a
sophisticated built-in speaker and headphone will be included so as to satisfy the needs of the MP3-
loving younger segment.

b. Branding / Rebranding

For Samsung to boost its the corporate identity, we recommend the re-branding of mobile phones
under the umbrella brand, "Samsung." The concept is similar to that utilized by Motorola (Moto-
Razor, Moto-Flip, etc.). This strategy will help leverage upon the existing strong brand equity of
Samsung in the "appliance" industry, as well as its reputation for product innovation. We propose to
incorporate Samsung in the product nomenclature (e.g. Samsung Energy, Samsung IPX, Samsung
Life). This not only reinforces the existing brand awareness of Samsung but also tells customers
about what advantages Samsung mobile phones are capable of bringing to them.

We propose to establish strategic partnerships that will help Samsung reach the primary target
market as well as the secondary target market more effectively. This will help create a stronger
brand recall for Samsung mobile phones in each category. With the entertainment series, strategic
alliance with Napster will be forged so that music can be rented on the mobile for a monthly fee, or
a partnership with iTunes music store so that music can be bought. As for the executive series,
Samsung could form strategic alliance with manufacturers of designer business wear, business
accessories, premium products (e.g. Rolex, Mont Blanc pens), and prominent airlines frequented by
business people.

In addition, an elite club of Samsung mobile users and users of Samsung home appliances with cross-
product discounts, and membership perks in other establishments will be provided upon purchase of
the said appliances. For instance, a customer will be entitled to a certain number of credits which
may be used in purchasing a Samsung mobile phone when he purchases a television.

c. Packaging

1.) Executive Series: Wrapped in a black box with a see-through top, the words 'Samsung Executive
series phone' will be visible on the svelte black exterior. The phone will be bundled with a standard
charger and cradle, on which the mobile phone can be planted while charging at the office. It will
also be equipped with a built-in speaker to play mp3s as well as a portable "QWERTY" keyboard.

2) Entertainment Series: Wrapped in a clear, see-though plastic shaped like a ball or any similarly
popular object, the label will read, "Samsung E!" in its sexy and colorful elegance. The unit comes
with a standard charger and a colorful strap and/or holder to accentuate and flaunt this accessory.
Additional accessories include head phones, external speakers, and a music tune CD containing
games, ringers and wallpapers that are designed specifically for Samsung mobile phone models.

d. Warranty

Samsung units come with a standard 2-year warranty for parts and functionality. The warranty
excludes cosmetic damage whereas replacement casing may be purchased and then applied free of
charge in Samsung Repair Centers. For the holders of Samsung Elite, there is an option for upgraded
warranty by payment of a nominal charge.

e. Service Plus

Samsung should heighten its already excellent customer service to further differentiate it from
competitor brands. In order to align itself with the various needs of its clientele, there will be a
provision for different ‘Tiers of Service' for Samsung Elite Card holders - silver / gold / platinum. The
Elite Card tiering will be contingent on the points accumulated. Samsung customer care service
centers promise a one-day maximum period within which to respond to queries. Taking advantage
of the client contact which this entails, service representatives handling repairs may extend the
option of loaning temporary units at a nominal charge until the user's phone has been completely
repaired. Samsung will also provide assistance to clients who need to retrieve data or contact
numbers from damaged units.
f. Experience

For the executive series, IPX will provide an "always on, always connected" experience to the user,
building strong a connection with the primary target market. This will benefit them as information
will be sent and received real-time from the Internet, wherever they may be. It will likewise provide
them the option of privacy by turning off the automatic broadband connection. They will feel more
productive in terms of work output as the Samsung "productivity suite" will enable them to book
schedules for themselves as well as invite colleagues to meetings, sans a personal computer.
Moreover, since other people can send invites for meetings as well as view the user's schedules,
users such as executives would have an easier time managing their schedules as their personal
secretaries can book schedules for them at the same time and avoid possible schedule conflict.

On the other hand, the entertainment series (Samsung E!) will offer students and yuppies a hip look
as well as a sense of esprit de corps as they don the latest trends and fashions. This is primarily
because the product will boast a wide range of accessories such as different casings/covers, gadgets
and extensions. Likewise available will be a better performance camera and entertainment accessory
extension (e.g. different speaker models, wireless headphones). Moreover, it will promote Samsung
community through variety of games in the nature of "Multiplayer Online Role Playing Games" or
MORPG, which will further foster the virtual Samsung community.

g. Blue Ocean

To cater to our market of experienced and established professionals, we would like to introduce the
concept of a cellular phone having the features of an automobile remote, a laser pointer, and a flash
drive. Akin to the concept of a Swiss Army Knife containing a multiplicity of basic survival tools,
Samsung may differentiate itself from existing mobile phone providers by offering a selection of
devices which have professionals, rather than outdoorsmen in mind. Unlike presently offered
features which are easily associated with mobile phone technology, the accoutrements built in to
this phone are not bundled with connectivity products.

To illustrate the viability of these features for targeted professionals, the car key holders are made
less bulky by the remote control feature. Extremely mobile professionals who need to drive from
one place to another in order to attend meetings and other functions always have their phones on
hand in order to communicate with key contacts while they are in transit. That these individuals
have both cars and cellular phones suggests that linking features of both to create convenience will
be appreciated. That on-the-go professionals value the convenience of carrying fewer items suggests
a market for our blue ocean take on Samsung mobile phones.

Laser pointers that do not require battery change spare professionals the need for constantly
purchasing new batteries and from selecting incompatible models. Since these lasers are built into
the mobile units, routine recharging displaces the inconvenience of replacing expired batteries.

In line with Samsung's conveyed value of superior communication technology, the convenience of
an integrated flash drive will allow professionals to store data on their mobile phones for use during
presentations or discussions. Being built into the mobile phone ascertains that there is less likelihood
of this otherwise small unit being misplaced or forgotten.

VIII. Pricing Strategy

a. Objectives

In line with the overall marketing objective of increasing market share and sales volume of Samsung
mobile phones, we recommend the following pricing strategies for the two categories of mobile
phones targeted at primary market segment and secondary market segment.

Executive Series (IPX)

"Premium pricing" strategy will be used for this particular product category since professionals and
executives with sufficient disposable income are less sensitive to price shifts. The unique features of
the executive series (IPX) will give customers the incentive to buy the product while the price will
provide the perception of added exclusivity. In addition, advanced technology and features would
give Samsung product differentiation thereby allowing the company the opportunity to price IPX at a
premium level.

The objective of the "premium pricing" is to communicate the distinct features and advantages of
the IPX model to Samsung clientele; each convenience and benefit offered outweighs the relative
price difference. This pricing strategy promotes and sustains the Samsung brand image, which banks
on the perception of technological leadership and durability.

Entertainment Series (Samsung E!)

Since the competition in this market is more intense, using "penetration pricing" strategy for this
segment is more appropriate. In addition, students and yuppies tend to be more sensitive to price.
Hence, they would opt to buy products with comparable features if the price is lower.

Having several established mobile phone manufacturers focusing on providing products geared
towards satisfying the younger segment, Samsung's objective should be to penetrate this market
and gain sizeable share to improve its profitability.

b. Variables / Influencers of pricing

The pricing of Samsung mobile phone is determined by several factors. First, it is contingent on the
market demand for cell phones. The mobile phone market size in the Philippines has been growing
at a rate of 10% per annum. The competition amongst the players to gain larger share of this
growing market puts additional pressure on the pricing strategy. The second influencer of pricing is
the competition itself. Samsung currently ranks third in the Philippine market and is rapidly
progressing towards becoming the second mobile phone brand in the country. However, it faces stiff
competition against Nokia's executive series and Motorola. On the other hand, in the entertainment
series, Nokia, Motorola, Sony Ericsson, appear to have better brand recognition as evidenced by the
UAI. Since mobile phones are coveted products that are high on functional as well as aesthetic
features, strong brand awareness and image play a key role in influencing the buying behaviors. This
will require Samsung to allocate additional funds in marketing and price promotion in order to gain
an edge over the competition.

c. Pricing Methodology

Executive Series (IPX)

Pricing this particular product will be a compromise between "target return pricing" and
"psychological pricing". Since Samsung would have to invest a significant amount in research and
development to come up with the innovative product, it should take into consideration the time it
needs before a return on investment can be achieved, however, it also needs to consider the
features it offers will be perceived to be as value to the target segment, hence focusing on its unique
capabilities as a popular price points.

Entertainment Series (Samsung E!)

"Value-based pricing" will be used to achieve the target price objective for this product category.
Given that those mobile phones with features comparable to Samsung E! already exist in the market,
we propose to price this product competitively to ensure that the product gain market acceptance
attaining a sizeable market share.

d. Pricing Policies

A manufacturer's retail price will be issued to the distributors for strict implementation. A lower
price will be given to the distributors that will allow them to add margins upon passing it to the
retailers. Strict monitoring will be implemented to ensure that retailers would not dilute the brand
by selling it at a lower price.

XI. Distribution Strategy

a. Existing Distribution System

Samsung's current distribution system consists of one national supplier who acts as exclusive
distributor agent to the Philippines. This supplier distributes to:

1. 11 Concept Stores which are Samsung franchises and display ONLY Samsung phones.

2. Over 3,000 Authorized dealers which are multi-brand stores

The problem of ‘Grey market' is limited due to a centralized manufacturing system in which
dispatches originate solely from Korea. That there is only one national supplier also addresses this
otherwise present problem.

b. Channel Members: Proposed Distribution System

In order to increase sales volume and market share, the following alternate distribution model is
proposed:

Traditional Distribution Channels

Manufacturer – Distributor – Retailer / Manufacturer – Distributor - Consumer

We will retain the conventional distribution process whereby it utilizes a selection of distributors.
These distributors have the option of either a) reselling units to a network of retailers or b) vending
to consumers. The latter scenario applies to distributors who own shops in selected shopping
centers. Here, it is imperative that product pricing be comparable to the cellular phone model's
suggested retail price.

In order to optimize product exposure in the retail channels, Samsung can issue display racks to high-
volume retailers, gratis. It will be mandatory for distributors who own retail stores to maintain at
least one of these promotional racks in a visible area. Exclusive dealers will likewise be required to
utilize company-sponsored racks and follow Samsung's prescribed store layout.

Samsung Outlet Stores

Spurring from the utilization of this channel, Samsung should explore the possibility of establishing
company-owned outlets, whose product line consists exclusively of Samsung mobile phones and
paraphernalia. The availability of warranties for both parts and service differentiates these outlets
from independent vendors, whose warranties are confined to repairs. Repair provisions, however,
will not be limited to units within their prescriptive warranty, provided the customer is willing to
shoulder incidental costs.

Samsung's choice of location will be limited to upper scale malls and boulevards, and restricted to
areas mostly outside their retailers' scope of operations. Since Samsung exercises control over shop
design and layout, they could structure outlets in a manner that communicates the company's
distinct image.

Value-Added Resellers: Mobile Phone line Carrier

Another channel which Samsung can explore in terms of distribution is via value-added resellers or
phone line carriers. Globe, Smart, and Sun Cellular for instance, profit from a mutually beneficial
arrangement by which mobile services are bundled with cellular phones.

Non-Traditional Distribution Channels

Samsung Online
Given its target market of young professionals and executives, Samsung's distribution strategy
necessitates being selective in identifying avenues, which further enhance its image. In line with its
value proposition which is anchored on technological innovation, it is requisite for Samsung to make
use of e-commerce in its company website. Potential buyers who surf the website are offered a
selection of Samsung models, replete with product features and specifications. Upon deciding to
purchase, the consumer scrolls over an "add to cart feature" bearing the suggested retail price.
Clicking this icon prompts a "store locator", a selection of outlets from which the consumer could
opt to pick up his purchased unit. Because this arrangement promotes an exclusive network of
independent retailers, it is likely that some may offer delivery services, extending value to
consumers in the form of convenience while broadening Samsung's customer service at little or no
incremental cost.

In order for Samsung to plot site-related sales, it is the system that triggers the notification of
retailers regarding pick ups or deliveries. The set-up also requires that retailers have an information
system in place in order for Samsung to monitor and update inventory levels so as to offer
customers only merchants with available stock. Note that exact figures on inventory levels will be
visible only to Samsung administrators so as to prevent competition from formulating strategies
based on this information. Information to be made available on site appears on the chart below:

Exhibit 4: Content of Samsung Website

This Samsung online distribution channel functions primarily as a point of access which enables
consumers to purchase an array of products from retailers who have garnered Samsung's
endorsement, giving credence to the authenticity of their ware. Profits generated by online
transactions will be for the account of the retailers since Samsung profits from its distributors
instead. This arrangement mitigates otherwise possible conflicts arising between distributors and
retailers. By coursing sales through retailers instead of directly to the consumers, channel conflict is
likewise minimized.

Vehicle Manufacturer Tie-ups

Because of the impression of its mobile phones as costlier than other brands, Samsung will capitalize
on this perception by forging partnerships with midrange to premium car dealers (e.g. Camry,
Accord, BMW, and Mercedes-Benz). Vehicles classified as medium and large will be equipped with
phone docks, hands-free kits, and speakerphones, and Samsung mobile phones which will be sold
together with the automobile. Customization of phone specifications will be relative to each
manufacturer tie-up. These phones will consist of mid to upscale models and have provisions specific
to the topnotch automobiles that they will be associated with.

c. Factors Affecting Channel Decision

Each distribution channel addresses the needs and preferences of various Samsung client profiles.
Samsung online caters to the market segment which holds in esteem information provided in the
internet. They are consumers who value details not easily discernible (e.g. software specifications,
warranty service, coverage, accessories, model availability, and store location) when browsing in
retail centers.

Retailers, on the other hand, cater to conventional buyers. These habitual shoppers and high-
involvement shoppers are more inclined to survey malls and other areas of high foot traffic for
possible promotions. Their geographic preference as well as their numbers entitled Samsung to
wider market reach.

It must be noted that in selecting its network of distributors, it is recommended that Samsung
evaluate reputation given by years in trade as well as sales force capabilities in order to maximize
market reach while keeping the number of distributors to a minimum. Keeping the distributor
network lean will foster loyalty, lower delivery costs, and deter price wars which could dilute the
Samsung brand.

That distributors are willing to undergo training for repair of Samsung products is imperative. This
allows Samsung to ascertain that the quality of service to be rendered satisfies Samsung's standards.

Dealers should likewise be assessed in terms of store location, reputation, and customer target
segment. These standards are critical in the selection process as contracts with dealers mismatched
target markets risk rendering the partnership superfluous due to meager revenues.

Samsung outlet stores target the brand loyal segment. These are tech-savvy clientele who prefer
that their mobile phone accessories (e.g. Hands-free kits, camera plug-in features, car chargers) bear
authentic Samsung labels. Other would-be purchasers consist of Samsung subscribers who will opt
to pay more for the assurance that warranties for parts and labor will be attended to by none other
than Samsung professionals, utilizing authentic Samsung components.
Value-added resellers offer convenience to customers who can avail of bundled services such as
mobile phone connection, WAP, 3G capable networks, and other connectivity-related technologies.
Samsung may opt to forge contracts with these dealers and extend greater price markdowns (similar
or less than those given to distributors). They may also utilize this channel for disposal of older
models since network providers cater to a diversity of market segments.

d. Conflict and Control System

Occasional oculars inspections and surveys will be utilized in order to ascertain that distributors,
dealers and retailers are not unloading Samsung products at steep discounts. The underground
market is discouraged as it has the potential of diluting the Samsung brand.

Distributors found unloading the products at steep discounts will be issued warnings and penalized
on first offense and severed from the Samsung distribution system if the problem persists. These
measures will be enacted in order to deter distributors from unloading products to unauthorized
channels.

X. Promotion Strategy

a. Advertising

The aim of advertising strategy is to increase the brand-awareness and brand-recall. While Samsung
has been able to establish its name in the mobile phone market, it has not successfully implanted its
image in customers' minds as the first mobile phone of their choices. This is further proven in the
survey taken in which people think of Nokia, Sony Ericsson at their first brand-recall. The high
priority of advertising strategy is to be able to communicate Samsung's stance on giving its
customers the ultimate mobile phones equipped with functionality suitable for the professionals and
state of the art technology.

Executive Series (IPX)

The "professional edge" should be rooted in the heart of advertising campaign. The message to be
delivered through advertising and promotion strategies is "Be yourself! Be a Pro!". This is to take
into account that Samsung's primary target segment are young professionals in the age group of 25
to 40 years who have been able to prove themselves in their fields of work. They know who they are
and they are pleased with what they have achieved in their life so far. Their "centre of gravity" lies in
how they feel and how they look. They are confident, sure of themselves and know what they want
to look for in life. They accept themselves and are keenly interested in the "Pro world" but not
transform into someone else rather than themselves.

The story line for the advertisement should be as follows:

"There is a point in one's life when a working person discovers s/he belongs to the world of
professional and successful men/women, that is called PRO World. S/he stops the frantic search
and accepts himself/ herself, his/her achievements, personality, confidence. When s/he is guided
by what feels right to her, not by what feels right to others. The understanding comes to some
at 25, to others at 40, to some, never.

Our target is more mature, more pleased with himself/herself. That's not to say that s/he's perfect.
It just means s/he is more PRO-centered."

This advertisement should be featured on television between news or informative programs as

these are most watched by this target segment. In addition, it should be printed on magazines such
as Time Magazine, Business Week, as well as Newsweek which are of high interest to the target
segment. Internet advertisement is also highly recommended for this segment.

Strategic advertising partnership with other car manufacturers such as Mercedes, Camry and the like
are strongly encouraged so as to build a co-brand awareness and existence for both Samsung and
car manufacturers. This is made possible after the successful co-operation of Samsung with these
manufacturers in the distribution channel as well as co-advertising. The majority of this target
segment are existing car owners as well as professionals that will be seeking to own mid to high-end
cars once their incomes increase.

Entertainment Series (Samsung E!)

Samsung's secondary target segment is the urban population in the age group from 15 to 25. People
at this age group are seeking to find themselves and their places in the society. Their sense of
belonging is of significant importance. They yearn to belong to a certain group and are greatly
influenced by their friends/peers. It could be said that this group's behavior is entirely different from
that of the primary target segment. Besides the emotional aspect, they are looking for
entertainment features in mobile phones such as music, games. As such, there arises the need for a
different advertising strategy. Advertisements should focus on featuring Samsung mobile phones as
a way to connect friends and as a status symbol of being recognized as a member of a circle of
friends/peers. In addition, they can derive great music, and games out of Samsung mobile phones.
The tagline should be "Be entertained! Be a part of Samsung circle of friends".

Television still remains one of the choices of the media. However, cinema, billboard, internet and
radio advertising are also chosen for the main reason that this target segment spends much time for
these channels. These could prove to be highly effective advertising means.

As Samsung strives to be the second leader in the mobile phones market in the Philippines,
extensive advertising is considered to reinforce the image of Samsung. Samsung should set aside a
range of 8% to 10% of its sales revenue for advertising and promotion campaign. The effectiveness
of these strategies could be measured in terms of sales growth and customer awareness at the first
brand recall.

The two new series of Samsung should be launched through fashion show. This is suitable for both
two segments as fashion is one of the main concerns and is consistent with the image that Samsung
is projecting "the style".
Advertising budget breakdown decision was based on the UAI:

Exhibit 5: Ad Budget Breakdown

b. Sales Promotion

The objective of sales promotion is to induce purchase as well as to retain existing customers by
providing special incentives for Samsung customers.

It is specially encouraged that Samsung should tie-up with corporations to allow discounts for
employees. This promotion move will prove to be highly effective as the primary target segment is
the young working professionals. This is an ideal strategic tie-up as it will certainly generate sales
volume as well as brand awareness. There is no better advertising strategy than "word of mouth"
advertising. In addition, there will be strategic tie-ups with MTV, music stores. For example,
audience tuning to MTV programs answering questions correctly given after the end of the program
can get Samsung mobile phones as prizes. In turn, MTV will indirectly promote Samsung brand
awareness by mentioning the Samsung as prize-givers. For music stores: customers purchasing CDs,
VCDs, DVDs from music stores will get their points added in their Samsung Elite Cards. Kiosks located
in the business district will be geared at promoting the new line, Executive series. This will bring us
closer to our primary target segment.

Samsung Elite Club: Samsung Elite Club forges a community of Samsung customers. This club is not
only exclusively for Samsung mobile phone users but also for users of other Samsung products. It is
aimed at strengthening corporate identity. Based on the amount of purchase, there will be 4 tiers of
membership: 1) Regular, 2) Silver, 3) Gold & 4) Platinum. Promo mechanics will operate along the
lines of purchases entitling customers membership in Samsung Elite. In this system, customers may
earn loyalty points commensurate to the amount of their purchase. Upon accumulating a certain
number of points, their membership will be upgraded to Silver or Gold status, allowing them
increasing privileges.

Samsung Elite Club membership will provide customers many benefits. First, redemption of loyalty
points will be in the form of discounts among an extensive range of Samsung products. Depending
on level of membership, customers may avail of offers for extended warranties and product service.
Members may also earn points on the surrender or exchange of Samsung products which they
intend to replace. Replacements can then be purchased at a discount, using loyalty points as credit.
Special promotions and exclusive discounts will be exclusive to members of the Samsung Elite Club.

The Samsung Elite Club will be beneficial not only to customers, but to the company as well. The club
will create sustainable strong brand loyalty, promoting customer advocacy and stronger repeat
purchase due to perks and conveniences. The Samsung Elite Club will be an ambassador for
Corporate Social Responsibility, a medium for communicating Samsung's social responsiveness to
the public. Members will be made aware of Samsung's initiatives of proper disposal of hazardous
parts via notices which accompany promotional letters, emails, and text messages.
While Samsung has an existing tie-up with Giorgio Armani, their co-branded phone appears not to
have gained the targeted attention that this strategic partnership was projected to garner. Samsung
can, however, push the idea further by embarking on a partnership with Designer Labels to
manufacture high-end bags that complement the Samsung phones, and vice-versa. Imagine a
woman with a tiger skin motif Prada bag and she reaches inside her phone to take out her Samsung-
Prada phone which has the same tiger-skin motif on the exterior. This co-branding caters to that
segment of the market which values limited edition products which cannot be easily replicated
because of the seasonality of the design. Before would-be competitors are able to emulate designs
used, designs will be outdated.

c. Public Relations

Samsung embarks on the program "Batteries Return". Most of the time, when the battery is no
longer usable, customers will just throw away and therefore cause damage to the environment.
Samsung practices Corporate Social Responsibility by asking its customers to return its batteries and
to reproduce/or discard them so as not to damage the environment. In return, customers will be
able to add in Samsung points for their Samsung Elite Cards. Samsung will be projecting itself as
"environmentally friendly" corporation. Various press conferences will be launched explaining the
importance of reproducing/discarding batteries in a proper manner. In addition, this action plan will
no doubt be receiving coverage from media such as television/newspapers.

The ultimate aim of this action program is to project Samsung as a "green" corporation and that
people in the Samsung community care greatly about the environment.