Running head: SAMSUNG: 3D TELEVISION MARKETING PLAN

Samsung: 3D Television Marketing Plan Jackie Olney Managerial Marketing, BUS 620 Timothy Malone July 29, 2013

Samsung Abstract

The introduction of the Samsung line of 3D televisions (TVs) was complex. Before Samsung can effectively market their 3D TV over the already popular 2D TV they must develop an effective marketing plan. Samsungs founder Lee Byung-Chull could not have envisioned that in 1938 his life would change forever. Byung-Chull did not image that Samsung would go from exporting dried fish and flour to China to becoming a household name for many years. Samsung is a name to be reckoned with because of the vast array of products and services they provide. Samsung introduced the first black and white television in 1970 that was only the beginning. Samsungs objective is to enlighten the consumer about 3D television, reveal their affordability, and showcase the experience received from sitting at home watching movie theater quality movies. When Samsung implements their market strategies they have a projected sales growth of 17.5% within the next three years meaning more than $10 billion in profits. The market is diverse and contains many price segmentations. Samsung has done well to incorporate economic and personal income levels through the five series of 3D television systems. As shown the Samsung 3D IP television is the next innovated home entertainment business of the future.

Samsung Samsung: 3D television The introduction of the Samsung line of 3D televisions (TVs) is complex. Before Samsung can effectively market their 3D TV over the already popular 2D TV there must be a

marketing plan. The following evaluation highlights the strategies Samsung needs to accomplish their strategic plan of developing a successful home electronics business. The marketing concept emphasizes Samsungs promotion of 3D TV as innovative, groundbreaking technology that offers affordable pricing for consumers, and confirms their image as a market leader in the global home electronics business. The result of these strategies being implemented could result in an extension of the market size to more than 878.00 million households (planned) and a projected sales growth of 17.5% within the next three years, possibly yielding more than $10.0 billion in profits. This will allow Samsung to deliver service to customers worldwide in the 3D television market. There is a positive forecast for the sales of 3D television sets by NPD Display Search and it throws light on the projected demand for more 3D-ready devices ("As I Was Saying," 2012, para. 1). The 3D television business measure a companys success by the highest market share, typically the company holding 40% or more is the top position holder. Company description Samsungs founder Lee Byung-Chull started the company in 1938 in Taegu, Korea. The initial company was an exporter of dried fish and flour to China. The small company functioned with 40 employees. During the 1950s and 1960s Samsung was involved in other businesslike textiles and life insurance. The company ventured into the electronics market in 1969 with a range of electronics-based companies like Samsung Corning, Samsung electro-mechanics, Samsung semi-conductor, Samsung electronics devices, and telecommunication company. The first black and white TV using the first set of products was introduced in 1970.

Samsung Today, Seoul, Korea, is the headquarters for Samsung with includes more than 80 other global headquarters (About Samsung, 2013). Not only is the economic impact to Korea tremendous but political influences are also impacted. The Samsung group is diverse in its functions, containing entities like electronics, 2012 revenues revealed Samsung is fourth in market value; the heavy metal industry like ship building, Samsung is the second largest according to 2010 revenue. Samsungs life insurance company is the 14th largest carrier in the world; Samsungs engineering and C&T are the world 15th and 63rd largest construction companies in the world. Financial and medical services are additional products and services Samsung is developing. Samsungs revenue in 2009 was more than $172 billion. Fiscal year 2010 saw revenues of $258 billion and a profit of more than $27 billion. These figures do not include revenues of the group subsidiaries operating outside Korea. Product description Converting from 2D to 3D is a characteristic that Samsung has installed in all their TVs. Samsung offers cinematic 3D broadcasting in a persons home at a high definition (HD) resolution. This means a regular television program, movie, or show can be viewed from a persons couch in 3D. Slip on the 3D glasses that are active and lightweight, change the TV to 3D with the remote and experience the best 3D TV experience. 3D gives the person the feeling of being completely involved in the physical reality of the show (Murry, 2010). The latest

Samsung Plasma and LED televisions have the capability of 3D active TV. This is the feature for viewing programs in full HD resolution in 2D or 3D. Samsung products feature thin TV segments the come equipped with HD and 3D supported options that adjust to TVs from 51 to 75-inch screens. Prices range from $849.99 to more than $9,000 for ES 9000 75-inch screen. The release of the 3D televisions is to sustain their top position in the market with the

Samsung latest technology. Samsung is thriving to give consumers ultimate satisfaction by meeting their

expectations with the introduction of high tech and innovative products. Samsung is also striving to claim the majority share of the global 3D TV market with more than 40% of the shares. Industry Analysis and Trends Samsung has more than 35 products that support the 3D technology and 25 of those offer Internet connectivity. Samsung has made considerable investment in the IP and 3D segments. The IP for broadcasting 3D content has been developed and executed worldwide. The marketing and manufacturing activities of 3D devices are increasing with more expected in the future. Diego Gutierrez from the Graphics and Imaging Lab at the University of Saragossa in Spain states that there is a huge revolution that has taken over the 3D display segment (Lilly, 2012). Data on the 3D TV global sales in the consumer sector has shown that Samsung holds 26% of the market share. Other participants are LG, 14.6%; Sony, 9.4%; Sharp, 6.5%; Panasonic, 5.3%; whereas the remaining 38.3% belongs to other markets (home-entertainment-systems, 2013). Samsung continues to focus on expanding even though they have completely functioning sales channels in more than 61 countries. Americans typically buy a new television every seven years and each household owns two or more television. In 2011 there were more than $48 million in television sales. The NPD study highlighted that 3D units have the potential to increase from 50 million to more than 220 million units by 2019. Samsung is expected to increase their global 3D TV sales by 50% by 2019 (As I was saying, 2012, par. 8). After the introduction of 3D television in 2010 every television manufacturer has been fighting for a piece of this consumer base; however, some attempts have been improper, boarding on unethical. Meetings were conducted within the industry to showcase the innovation and features of 3D TVs but because of ineffective marketing sales were not as expected.

Samsung Another possibility for ineffective sales at the onset could have been because consumers did not

have enough knowledge or experience about 3D televisions to convince him or her to make such a large purchase. The values of the units were just not seen. With the aid of independent sales agencies Samsung recently began advertising their display models. Success happens when customers can completely understand 3D display devices. The initial marketing promotions gave consumers the idea that 3D televisions were too high when compared to the features and benefits. When consumers compared 3D TV to a regular 2D TV there was no justification for the higher price. Most of the market share is held by the top three brands; each product has similar functions and looks with minor differences to set them apart. The major difference is the selling price. Samsung has many manufacturing mediums for producing the 3D TV components. This allows them to produce the TVs at a lower price, outsell the competition, and have higher profit margins. SWOT analysis Strength. Samsung is a worldwide brand with exceptional customer respect, maintains a good supply chain, and the companys main components and accessories are for televisions. Their good branding has given them a competitive edge. They are already in operation worldwide eliminating the need to establish supply chains. Weakness. Consumers are not aware of the benefits to owning a 3D television. The price point is more than what some people can afford. Consumers do not want to wear 3D glasses to watch television in his or her home. Opportunities. Samsung is a global brand giving value to its name. They maintain positive purchase power over vendors. The 3D televisions have Internet capability allowing the consumer to download a movie from his or her home.

Samsung Threats. As with any company there is competition and 3D TV is the fastest growing market. A new company could grow to the extent of reducing the market share between existing companies. Those who do business internationally use that as a tool to increase visibility in the marketplace. There are also factors like pricing among competition and economic growth. Direct competition

The main competition to the 26% of the market share for the 3D TV products is LG with 14.6% and Sony holding 9.4%. These three companies maintain more than 50% of the global market share. The remaining balance is divided between many smaller companies that have not done well with research and development or are not able to compete in a global market with the top leaders. Even though Sony and LG have a piece of the market, they do not have the capability of squeezing Samsung out of the market with their products. Samsungs top position has been retained because of their diversity; this has the potential of helping them grab an even larger piece of the market share. Indirect competition Samsung has a variety of indirect competitors like cinema movies, personal computers, tablets, iPods, and the iPhone. However, some 3D television markets does offer Internet capability, competitive pricing, and the ability to enjoy the experience from the comfort of his or her home. Most manufacturers use the same vendor sources so if there are component shortages than production capacity and volumes can lessen. The Samsung subsidiary companies can produce parts when needed allowing Samsung to produce according to volume requirements. Objectives and strategies Market strategies focus on three areas to increase market shares. Samsung needs to establish consumer awareness of the latest 3D creative television product lines they offer.

Samsung Samsung must expand their brand value reach and increase the current market share of the 3D TV segment. They must also maintain their position as the market leader. As shown in the SWOT analyzes the top three 3D television competitors contain similar features and capabilities. The characteristics that separate the competition are screen size, service, and accessories. Samsungs enormous operations and economic strength require a marketing strategy that is as diverse as they are. The reduction in costs could be achieved by working on the economies of scale and accomplish curve efficiencies in production and

associated operational functions of the company (Finch, 2012). Samsung must promote their 3D TVs in countries where there is already service and contain enough income level for one of the five TV series methods. Segmentation and target market The market segmentation will depend largely on income levels of customers and prices for the 3D TVs. Samsung products are sold in 61 countries and have five categories available. The communities that contain greater economics would be provided a broader mix of products. Additional monitoring of trends would provide further product analysis for future trends. Samsung will focus on economic levels with a greater motivation on the LED 6000 and 8000 series TVs. Integrated marketing mix The ES and LED series televisions contain a wide range of sizes and prices. For example, the price of the 75-inch ES series television starts at $10,000 and the LED series range from $419.99 to 3,799.99, depending on the size. The prices are defined by sales regions relying on product demand, prices, and the ability to enter the market against strong competition. Samsung will be accountable for technical support and service, according to the terms and conditions of

Samsung warranties and agreements made at the time of sale. The intention of marketing promotions is to generate awareness of the 3D technology against the 2D televisions. Samsung also needs to show consumers that their product is better when compared to the indirect competition of the tablets and iPod. They need to use mediums like the Internet, television, tablets, and word of mouth to showcase the 3D experience. The impact of stereoscopic 3D advertising platform is more suitable for marketing effectively than

the flat 3D advertising mainly because of their capacity to extend the footing (Yim, Cicchirillo, & Drumwright, 2012, p. 113). Distribution will be done through established and professional supply chains. These supply chains will be developed for the sole purpose of providing the products required for television and electronic goods. Samsung can use licenses and sales partnerships they have in place in the 61 global countries the service. Prelaunch marketing strategy The reveal of the Samsung 3D televisions is set for April 2013, to coincide with tax time. In preparation of the product launch, Samsung has initiated planning sessions with all sales partners to discuss supply chain objectives, outline strategies, and application procedures. These sessions are set for the first week of March 2013. Final assessment with suppliers, discuss production numbers and ability to distribute first wave of 3D television units. Prior to March 15th the training of marketing staff in sales strategy and psychology tools. Offer unconditional support to the domestic and international retail and wholesale companies Post launch Weekly monitoring of cost considerations and efficiency ratios to ensure the market shares and revenues produced from sales are on track. Analysis the results and adjust where

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changes need to be met. Ensure that customers are satisfied with the product purchased; if there is dissatisfaction Samsung must understand why and do whatever is necessary to fix the issue. Most of the more important items are ensuring sales agencies and management continually provides training for marketing staff. This will ensure he or she have the latest information about all the products.

Samsung Conclusion Samsung holds a great deal of the global market for 3D television. A through and detailed

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analysis of the global 3D television market has been detailed by Samsung. The SWOT analysis reveals industry trends, the effects of competition, and outside threats. In addition, the analysis formulated Samsungs mission which allowed them to speculate the targeted performances and the strategy for the final marketing strategy. The market is divers and contains many price segmentations. Samsung has done well to incorporate all economic and personal income levels through the five series of 3D television systems. As shown the Samsung 3D IP television is the next innovated home entertainment system of the future.

Samsung References As I Was Saying [Journal issue]. (2012, Oct 1). Multichannel News. Retrieved from http://search.proquest.com Finch, J. (2012). Managerial Marketing (ed.). Retrieved from www.bridgepointeducation.com Home entertainment systems. (2013). Television. Retrieved from ttp://home-entertainmentsystems.com

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Lilly, P. (2012). MIT develops holographic, glasses-free 3D TV. ExtremeTech.Com. Retrieved from http://search.proquest.com Murry, M. (2010, Aug. 4). No I dont hate 3D. Extreme Tech.com. Retrieved from http://search.proquest.com Samsung. (2013). Corporate profile. Retrieved from http://www.samsung.com Yim, M., Cicchirillo, V., & Drumwright, M. (2012). The Impact of Stereoscopic 3D Advertising. Journal of Advertising, 41(2), 113-128. Retrieved from http://search.proquest.com