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TCS: Biggest & Best, Getting Bigger

- by Eldos Mathew Punnoose * Previous Page 2 The company should effectively harness its human capital by making the necessary modifications in its HR practices from time to time The HR practices should be in alignment with the overall strategy and processes for the company to keep going in the rat and mouse game T!" has been thriving for this many years in a big way# and it becomes evident that HRM is in line with the strategy $n fact# T!" was the %live case study% that capped off a si&-day %strategic leadershiptraining program% organi'ed by the (ll-$ndia Management (ssociation and conducted by faculty from the Harvard )usiness "chool at the Tata Management Training !entre# Pune The strategists speak volumes about the company (ppreciating the fact that# T!" was a role model# how about the torrential times ahead* The company is getting bigger and the competition more heated up Hats off to T!" HR strategies till date $t is not the past but the future that counts The company is assured of a bright future if it frames the HR strategies that is really becoming# as it has done in the past +eeping the tempo going# but modifications and interventions at the right time in the proper way will keep its position intact Easier said than done The big H - H,-* Thus strategic HRM comes to the forefront submerging HRM The following discussion sheds light into the techni.ues of HRM adopted by T!" that enabled smooth functioning and growth in the global scenario

Human Resource or HR, as it is popularly known, highlights the contribution of workers behind the functioning of an organization. Here the term worker signifies all the classes of workers irrespective of their skill set or educational background. Human resource planning is now a very important issue as every business house is bound to plan a prosperous future for all its employees. The HR processes information and delegates it to the various organs of the organization for the smooth and efficient functioning. enlists top five Indian websites which discusses the popular Human resource issues and practices.

Samsung - The TOP Brand in the World

According to the global brand scoreboard of 2004 from Interbrand,

Samsung, the Korean based electronics brand, has boosted its profile and being listed as 21st valuable brands in the world. Its brand value surged by 16% to 12.5 billion US dollars compared to the figure in 2003 which is 10.8 billion US dollar. (Simon, 2004) It becomes the worlds leading brand in electronics and digital industry. This achievement is closely related to its sponsorship strategies. Samsung associate its name to the TOP plan, which is The Olympic Partner plan. It is a plan which leads Samsung to be the top brand in the world. However, there are many other programs to support Samsungs sponsorship strategy. Without these strategies the TOP plan will not have such effectiveness and efficiency. Samsungs philosophy is devote our human resources and technology to create superior products and services, thereby contributing to a better global society. ( Under this philosophy Samsung has adopted a sport-based strategy in building its brand. The multinational consumer electronics firm acknowledges the fundamental role played by sport and by the Olympic Games as a promoter of its brand. Vice president of corporate communication at Samsung, Il-Hyung Chang, rationalizes the important role of sport sponsorship by stating "sports sponsorship is a strategy that fits well within our operations at Samsung.its an integral part of our companys philosophy". Philip and David, 2003 Entering into the TOP plan propels Samsungs sponsorship to a new era. It has an opportunity to act on the same stage with the world top brand such as Coca Cola, IBM, and Visa, which greatly enhanced its brand image. The companys active and established role in the heart of the Olympic Movement has contributed to its brand value surge in recent years. Samsungs involvement with the Olympic movement began as a local sponsor for the Seoul 1988 Olympic Games. Then it became the TOP sponsor in the wireless telecommunications equipment category for the Nagano 1998 Olympic Winter Games, Sydney 2000 Olympic Games, Salt Lake 2002 Olympic Winter Games and Athens 2004 Olympic Games. This status as a global partner in the wireless telecommunications equipment category will be continuing in the Torino 2006 Olympic Winter Games and Beijing 2008 Olympic Games. Samsung have agreed to pay the huge amount for corporate sponsorship because they recognize the vital importance of sports marketing on their bottom line. The TOP plan helped Samsung increase its brand awareness and enhance market position considerably. Compared to the results of the survey held before the Sydney Olympic Games, the amount of consumers that became aware that Samsung Electronics was one of the 9 sponsors of the Games approximately tripled. Unaided awareness of Samsungs Olympic sponsorship was 6.0%, it placed 2nd after Coca Cola. ( Samsung want to accomplish two goals with all its sponsorship efforts. The first goal is to build brand awareness especially create higher level of awareness than its rival Sony. The effectiveness of Samsungs Sponsorship was shown at the ATHENS 2004 Olympic Games which had a positive impact on brand awareness, with an increase from 57% to 62%. (Samsung steps up Olympics marketing campaign, 2004) The second goal is to enhance the worldwide imagery and attitudes towards its brand. Samsung considered its commitment to the Olympic Movement is a key element in positioning and strategy. It contributes to the success of

the Olympic Games and at the same time enhances Samsung brand image and its market position. Samsung built its brand through sponsor Olympic Games in the following ways. Samsung mobilized the organization for brand building. Both the process and the result of a brand-building effort often have a key payoff internally to employees, as well as externally to consumers. Samsung sponsored ATHENS 2004 Olympic Torch Relay, which was the first truly journey of Olympic flame. 1,900 torchbearers were selected from over 40 countries including Samsungs employees. ( They received emotional benefits from pride in being associated with the sponsorship and have a direct link to the Olympic activities. Samsung provided an experience to the consumers. For example as a part of Samsungs brand presence program it set up Olympic Rendezvous @ Samsung, a 1,064 square meter entertainment complex, located within the Athens Olympic Sports Complex, which was a central gathering place for athletes, their families, and the spectators coming to the Games. The OR@S provided a wide range of activities. For instance consumers were provided with the opportunity to try out Samsungs revolutionary products for themselves. Fans are able to meet their national heroes, enjoy musical performances and special laser shows. During the Games Samsung has hosted a series of "National Days", which celebrate the many cultures of Olympic nations. In addition, OR@S provided free telephone and on-line services. Over 6,000 athletes from a huge number of the 202 competing countries have based themselves here and taken time out from the pressure of the Games to make contact with home. (Over 6,000 Olympic competitors make use of special facilities to contact loved ones, 2004). At the same time they are experiencing the convenience Samsung brought to them. Samsung used Olympic Games as a platform to demonstrate new products and technology. The most powerful way to introduce a new product and technology is by publicity. It is not only cost-effective but also more credible. Samsung provided its latest wireless communications technology during the Sydney 2000 Olympic Game. Focusing on the future of wireless communications, Samsung launched futuristic products such as the mobile phone watch, the PDA-phone, the digital camera cum mobile phone, the MP3 mobile phone and the its latest model of 3G mobile phone. In addition, visitors are able to experience the future by experimenting with the various digital knick-knacks developed and on display by Samsung Electronics. Samsung boost its brand awareness at Olympic Games. Samsungs dedication in Olympic Games brings great success in elevating its brand awareness. Samsung's sponsorship of the Sydney Olympic Game in 2000 raised awareness of the brand by 5% to 16.2 %. The awareness rise leaded to the sales surge. The first year after the Sydney 2000 Olympic Games, sales of the telecommunications products have increased by 44%. Four years later in Athens, its brand awareness was raised to 62%. (Coca-cola and Samsung present the first international Athens 2004 Olympic Torch Relay, 2003) Develop brand association. The Olympic Games as the worlds biggest

sports event requires enormous and sophisticated communication system. Samsung, an official sponsor in wireless communication equipment presented the Wireless Olympic Works (WOW), a communications system to support and guarantee the smooth and efficient running of the event. It also provided wireless communication devices to athletes, officials, media, staff and volunteers. Samsungs expertise in digital wireless communications equipment played a vital role in contributing to the successful operation of the Games. Besides the functional association, it enhanced its market leader image and revealed its status of a global organization through the prestigious Olympic Games. There is no doubt that Olympic sponsorship played an important role in Samsungs brand building. However Samsung can not merely depend on sponsoring Olympic Games to enhance its brand equity. It adopted many associated programs to support TOP plan. Reposition of its products. In early 1990th Samsung was still perceived as a conservative manufacturer and always associated its brand with bargains. Samsung realized that low price is just a major means to compete in the lower-market whereas in upscale market technology and brand are competitive means. Samsung decided to penetrate the upscale market and gave up lower-market in order to exalt its brand image. It repositioned all series of its products such as mobile phone, consumer electronics and memory flash to upscale market. Correspond to Samsungs new position in the market it has relatively higher price in it category. To Samsung higher price would bring more profit and at the same time it is the better imply of good quality. The strategy of reposition helps Samsung starting to build its noblest image. Technology innovation. Samsung recognized that digital is the future developing aspect of consumer electronics. They regard the digital age as having both incalculable potential and risks. It's a time of intense competition-fortunes can be made or lost in the blink of an eye. (Samsung group timeline and history, 2005) Samsung took this challenge as an opportunity. They switched their core competitive power from mass manufacture to its own brand which based on digital technology. It is well positioned as one of the world's recognized leaders in digital technology and eventually become the world top innovative company in technology. It starts to provide consumers with innovative and cutting edge products and rapidly become a huge player in electronics field competing toe to toe with another magnate Sony. Samsung launched an industry design revolution in order to get rid of its image of imitator. It employed world top designers to expand their thought and keep track on the world highest level. It achieved most of the Award of American Industry Design which is the most important award in industry design area on the global basis. Its brand was recognized by the consumers and specialists. The technology breakthroughs enhanced Samsungs brand image of young, fashionable and strong function. Demonstration of US market. Us market has a strong demonstration effect on the global market due to its leading status. To some extent, the brands should succeed in US market in order to become the top brand worldwide. Therefore Samsung regarded US market as its most important market and put great efforts on marketing in US market.

SAMSUNG took part in the Salt Lake 2002 Olympic Winter Games in USA as the worldwide partner in the wireless telecommunications equipment category. Samsung carried out various advance public relation activities and programs centered on the PR pavilion to promote its image of a fist-class corporation. During the game consumers were provided with the opportunity to try out Samsungs revolutionary products for themselves. Samsung spent considerable funds to sponsor this winter game in USA. After few years management, Samsungs brand disengaged bargains and was regarded as high-class products by the American consumers. Samsungs success in US market plays an important role in its success in other markets. To summarize, the key to a successful sponsorship depends not only on the creative and crucial sponsorship itself but also rely on the supporting strategies. Samsung successfully integrated its product strategy, technology strategy and branding strategy into the TOP plan. The TOP plan provides Samsung a road to be the top brands in the world. Without the supporting strategies the TOP plan can not endow Samsungs brand with internal and rich meaning. The plan comprises huge risk because if the consumers attracted by the TOP plan perceive it as an ordinary product Samsungs brand would be damaged. Samsung has successfully and fully utilize the benefits of the Sponsorship and was rewarded for its commitment to Olympic Games and other sports activities. The webs role in building brand With the prevalence and development of internet, the Web reveals its important role in marketing communication. According to a global web-based survey by Interbrand, the Google brand had the most impact on people's lives in 2002. It beat established brands such as Coke and Apple. (Gerry McGovern, 2003) This reveals how Web builds you brands differently. In the coming digital age, the strong brands in this era will be those that utilize web as a building tool. Web became a new communication channel between brands and consumers. It has unique characteristics compared to the most traditional media advertising. The web is interactive and involving. It provides an innovative way to build brand awareness. For example, when Visa organization plan to set up their long term branding tactic of focusing on young people, they chose MSN Site which is the world's most popular destination on the Web with enormous young users, as the hub of its promotional contest. It chose MSN to build and host the online hub for the promotional competition designed to build brand awareness of Ideas Happen among young consumers. The Ideas Happen campaign allows consumers ages 18 to 29 to submit ideas for businesses and other ventures and vote on the best submissions via a custom-designed site created by MSN. Over three months, more than 5 million unique users visited the site MSN created for the contest. The Ideas Happen campaign is an incredible example of how immediate and interactive of the online medium to make big results happen online. (MSN Again to Make Ideas Happen With Young Consumers, 2004) The campaign boosts Visa's image with target market. In addition to the increase in Visa's brand awareness among the 5 million unique users who visited the contest site, the heavy traffic helped build

Visa's image among young adults who are still forging lifelong allegiances to consumer brands. According to polling conducted by market research agency Millward Brown, perceptions of Visa improved markedly after the Ideas Happen campaign. The number who deem Visa the best credit card overall increased by 13 percent, while those who agreed that Visa offers unique and different features jumped by 9 percent. In addition, 8 percent more of those polled said they consider Visa the most innovative and forward-thinking credit card company. (MSN Again to Make Ideas Happen With Young Consumers, 2004) Ideas Happen is more effective in reaching our target audience due to MSN. Teaming up with MSN has allowed us to realize the potential of online marketing and allowed MSN to stretch its own limits in terms of interactivity and engaging young consumers The web offers current, rich information. On Visas website customers can manage their Visa card account online. The links on its page can take customers directly to their Visa card issuer, which maintains their personal, secure account information. By providing the current information of account, websites can let consumers to track their transactions on the spot. In addition, Visa introduces its various cards in detail on the website. Personalization. When customers enter Visas website they can select relevant content by choosing from the menu. There are three categories on Visa website which is personal, small business and merchants, corporate and government. People coming to it website with different purposes can simply choose corresponding category and go directly into that area to get the information their need. There is a calculator program in the website to help customers to plan their personal budget on Visas website. Moreover customers can order different information of discounts and financial tips through email on the personal basis. With these distinctive characteristics website can be a key part of a brand building program. It serves as a fantastic vehicle for distributing information, providing experiences, leveraging other brand building programs. It affects brand building from the following three aspects. Web can stretch the continuity and depth of the single sale channel, consequently expanding existing customers and increasing potential customers. Furthermore it can be taken as a market attempt, helping marketers to leverage marketing promotion programs in other medium. If use properly, website could effectively impel its offline products. For example there was a successful cooperation between Pepsi and Yahoo. Consumers could collect the number on the caps of Pepsi and Mountain Dew and change to credits on the websites of the two drinks. The credit can be used to exchange prizes or as cash for purchase and auction on Yahoo website. This campaign attracted 350 million people to anticipate. Pepsi increased it sale by 5% while the industry has little growth. (Lili, 2003) Pepsi did one similar attempt before without the help of web but failed eventually. Moreover, Pepsi can interpret the consumer behaviors through analysis of the data collected in the campaign and work out the relevant strategy. Website can improve the shopping experiences accordingly enhance the brand equity. On the website of Co-op bookstore, consumers can search

the books they want, preview the abstracts and check whether they are available. Other information is provided to the consumers like breakdown of every shop throughout Australia. In the Co-op shop or at home consumers can order or reserve a book through the on-line bookstore. The interaction between online and offline greatly enrich the shopping experiences. Web helps to differentiate brand. Product differentiation was regarded as a magic weapon of powerful brand. Without the differentiation brand will be reduced to product, consumers can only choose products from the prices. New brand with high differentiation are usually popular although they do not have high brand prestige. On the contrast high prestige brand with little differentiation will be forgotten gradually by consumers. When product or services enter into the maturity stage, they will reveal commonness and hard to be differentiated. The typical way to be differentiated at that stage is adding new products or services. For example, the customers of FedEx can accurately locate their parcels via its website. This service was even extended to the PDA users. The additional and distinctive service help FedEx enhanced the service quality and relationship between brand and customers. Web provides a platform for the communication of programs in the companys overall brand-building strategy. Web could improve companys brand marketing and sales efforts from internal as well as external. Internally, web offer a special site that every brand-building efforts emerge there. It will help the management to leverage each brand-building project to fit the overall strategy and redress the deviation in time. Externally, a well-designed website could connect every distinct part of business. The website will integrate them to be a continued and correlative means of brand description. There are several factors will contribute to the success of the web brand-building. A clear brand concept and position in the market. A clear brand concept and position will impel companys brand-building process. Companies should make sure to bring their brand identity or core brand elements onto the Web. The integral part of their offline brand identities need to be delivered to the online brand. Integration of web in whole brand-building strategy. The growing importance of web in building brand attracts more and more attention of companys management. To use web more effectively company should integrate web into its whole strategy and make sure it is in conformity with other brand-building strategies. Companies which leverage their resources between brand-building strategies will achieve greater success. Strategic alliance with other website or brand. Sometimes web allies can give your brand extraordinary success. Especially the alliance between powerful brands will make the cooperation more effective and cost-efficient. In the previous example Pepsi achieve great growth of sales in its cooperation with Yahoo. Yahoo brought Pepsis brand in front of large numbers of people which Pepsi can not access and the hit rate of Yahoo also surged during that period. Visa card attracted its target market of young people by allying MSN to offer MSN Titanium

Visa Card. More and more brands become eager to develop alliances through which they benefit mutually and beat their competitors. Loyalty .On the Web, brand loyalty is rooted in providing customers with an outstanding experience. (Gerry McGovern, 2003) To encourage customers visiting website regularly, websites are trying to build their loyalty through different ways. For example, commerce sites can offer a great selection, good prices, and a simple purchasing process while information sites can offer rich, relevant information in a format that is easy to read. With the help of outstanding experience provided by the websites companies draw their customers back again and again. In additional, companies can use email to offer their customers with opportunities or information which is tailored to their needs. For example a membership registration is provided on most websites. Then you can get more customized services by becoming a member of websites. Websites are building long-term relationship between customers and themselves. This relationship is essentially the loyalty. Websites will benefit from the loyalty their customers have, at the same time customers get their distinct needs and interests more satisfied by showing their loyalty. The important role of web in building brands suggests that companies that had successfully built their brand offline should make sure to leverage their resources to build their brands on Web. Retail stores should think of building their web-based shopping to provide a convenient alternative to consumers. Magazines should start to device their online editions in order to attract more readers. Web is providing huge exposure for brands. The brands which use them wisely will achieve tremendous advantage. Brand architecture art of L'Oreal With the growing globalization of markets and competition, the brand architecture became a key component in international firms brand building strategy. It provides a framework to leverage strong brands into other markets, assimilate acquired brands, and rationalize the firm's international branding strategy. The key element contributes to a successful brand-building strategy is a harmonious and consistent brand architecture across countries and product lines. (Susan, Samuel and Edwin, 1999) L'Oreal, the world's leading cosmetics companies is an apotheosis in brand architecture. It managed very well of its wide range of products and many of them are the world's biggest beauty products. L'Oreal was the only company in its industry continually achieves a double-digit profit for 18 years. Moreover, it is a genuine international company which has operations in more than 130 countries in the world and over 80% of group sales are generated outside France. The LOreal is known for its diverse brand house which includes brands like L'Oral Paris, Maybelline, Garnier, Soft Sheen Carson, Matrix, Redken, L'Oral Professional, Vichy, Lancme, Helena Rubinstein, Biotherm, Shu Uemura, Armani, Cacharel, Ralph Lauren and so on. LOreals brand architecture is like a brand pyramid which is used to target different group or level of people. The luxury products division offers consumers top range of products

like Lancme, Helena Rubinstein, Biotherm, Shu Uemura and Kiehls. These are premium products known for their innovation, performance and quality. Some of the worlds top perfume brand like Giorgio Armani, Ralph Lauren was also included in this division. The distribution channel of these brands mainly through department stores, perfumeries, travel retail outlets, and the brands own boutiques. Customers will receive personalized advice at the point of sale, enabling them to choose the products best suited to their needs. ( The professional products division is designed to serve hairdressers worldwide. They provide products to meet the requirements of salon professionals salon customers with a wide range of innovative, high-performance products. The professional products division of LOreal is made up of four different brands: L'Oreal Professionnel, Krastase, Redken 5th Avenue NYC and Matrix. The consumer products division is dedicated to offering consumers its high technology products at competitive prices. The brands in this division covered haircare, skincare, make-up and perfume products. The five major international brands are L'Oreal Paris, Garnier, Maybelline New York, Softsheen.Carson and Le Club des Crateurs de Beaut. They are distributed through mass-market retailing channels. In addition, LOreal has the active cosmetics department offering skin care, sun care, hair care and make-up products. The departments includes three brands Vichy, La Roche Posay and innov. They are sold in pharmacies and specialist retailers. These products offer consumers proven safety and effectiveness supported by advice from pharmacists and dermatologists. L'Oreal used different product division to help it segment the market and form its band house. Brand architecture is the vehicle by which the brand team functions as a unit to create synergy, clarity and leverage. (Aaker and Joachimsthaler, 2002) We can start to learn the important role of brand architecture in companies brand building from the following aspects in L'Oreals example. Implement differentia of product and strengthen brand recognition. The consequence of differentia strategy of L'Oreal is that consumers from different income level or education background can find the product which is suitable to their own culture and taste. L'Oreal also focuses on continually strengthening the meanings of its brands and fully utilizes the advantages which are rooted from brand recognition. L'Oreal established very clear identity for each of its products. Each brand has its own image. For example, customers associated Lancme with the image of stylish combination of elegance, charm and daring. Helena Rubinstein was perceived as a pioneer in cosmetic industry which provides cutting-edge science to the art of femininity and glamour. ( It associates with high-performance and luxury as well. Its underlying brand Garnier represents natural beauty. Each brand has its unique symbol which creates a close relationship to its target market. Distribution based on brand differentia. L'Oreal uses different distribution channels according to the brand position in the market. The mass brand Maybelline promote its brand mainly through TV

advertising and product prolocutor. La Roche-Posay, a brand positioned at solving skincare problem, is distributed by dermatologists, specialists of skincare and professional beauty salon. L'Oreal Paris relies on the public praise among professional cosmetic consultant. L'Oreal embodied culture flexibility. Many star brands in L'Oreals brand house are from different culture, but their original culture did not vanish because of being managed by a French company. When a lot of companies are trying to integrate different cultures, on the contrary L'Oreal tends to develop multi-culture in its underlying brands. This strategy proved to be very successful in reality and even played a key role in L'Oreals success. The most representative example is Maybelline New York. L'Oreal developed Maybellines brand culture instead of upsetting it after its acquisition of Maybelline. The sales figure dramatically rose after the acquisition and Maybelline product enter into more than 90 countries. Maybelline became a stylish global brand for all women all around the world from a merely regional brand. L'Oreal provides a platform for the brands under its brand architecture. Every brands target at a specific market and keep the specialty of its own brand. At the same time fit into the overall brand pyramid. L'Oreals innovations always start from its luxury brands then penetrate to the brands in different price level and different markets eventually implemented in its consumer brands. The innovations based on the same technology platform will reduce the cost. The knack for L'Oreal to create the advantages is to spread around strategic investment by sharing the production of innovation between different product divisions. L'Oreal not only focuses on the single brand but also pays attention to the technology relevancy in the series of brands. For example, L'Oreal first introduced a breakthrough anti-aging composite by using Lancme brand. Subsequently, it was implemented in Vichy brand and brought into the consumer product division eventually. The broad distribution channel of consumer products was used to promote this technology at last. In term of same products in the different market, L'Oreal also exerts the technology platform to meet the specific needs of consumers. From L'Oreals experiences, the core technology platform is a key component to the success of an international company with complicated brand house. Without leveraging the resources between brands, it will cause increase of operational cost and waste of resources and will be very hard to manage the L'Oreals sophisticated brand architecture. Other than building the brand structure according to the product identity, L'Oreal relied on distribution channel to carry out its strategy of brand structure. There are four product departments in L'Oreals structure. Every department has several brands and each brand has many names. They are conspicuously different in packages and with distinct image and advertising. The different brands share the resources of distribution channel and have high integration effect on management. The luxury brands of LOreal are sold in strictly selected distribution channel like department store, perfumeries and tax free shop. Professional products are provided to the hairdressers. Active cosmetic products are sold in pharmacists. The most important sector consumer products are distributed through mass consumption channel

like department store and supermarket. L'Oreal has formed a brand matrix with great power of integration. Any new brand merged into the relevant channel will fully utilize the resources in existing channel as well as expand L'Oreals whole distribution channel by integrating its original channel. The dissemination of brand will improve companys overall influential power. L'Oreal recognized the leverage effect of it brand and focus its propagandas on brand rather than propagandas on particular product. It is dedicated in building the relationship between its brand and the market. It aims to enhance brand power by maintaining the good image in publicities. L'Oreals efforts were also embodied on its marketing strategy. It always concentrates on supporting those brands which can mostly represent its advantages and leverage resources to those premium products. Firms that aim to expand internationally or strengthen market position tend to acquire new brand into the brand architecture. Acquiring influential and well positioned brand is an important strategy of L'Oreal in developing its brand architecture. It achieves rapid growth by acquiring brand in same or related business and is continually seeking these opportunities in the worldwide scope. L'Oreal expanded its brand architecture by acquiring Maybelline brand in 1996, which was a very successful transaction. The Maybellines image was enhanced by branded L'Oreal while L'Oreal got complementary in its brand architecture. Recent years in Asia, it acquired the third skincare brand Mininurse in China and Japanese top luxury brand Shu Uemura. These acquisitions represent L'Oreals ambition to Asian market. They have the same product business with L'Oreal. In China the acquisition will enhance L'Oreals market position in skincare and acquire distribution channels Mininurse had. It is also a preparation for the future expansion in the most fast-growing market China. By acquiring Shu Uemura, L'Oreal want to use this Japanese brand to compete with SK-which was a competitor in the same level, in order to meet the trend of prevalence of Japanese cosmetic brand in Asia. This is considered to be an effective and cost-efficient strategy which is consistent with L'Oreals overall brand architecture.

e are highlighting the main points on !amsung "ompany. #ur report will surely be fruitful for the marketing strategy of !amsung. !amsung intends to earn world leadership and secure overwhelming competitive strength. It is synchronizing product development, sales, manufacturing, marketing and design. !amsung$%s slogan $&everyone$%s invited$' describes its broad target market strategy, with a vast line of products. (ccording to our analysis, !amsung$%s main strengths are its )lobal Business *etwork, Brand *ame "redibility, +,R- technology, T.T /"0s, innovative changes and new styles in .latron and specially the 1uality awards that it has won since last two years continuously are positive points for !amsung. !amsung$%s !ales and !ervice centers are in 2 different countries, with vertical sort of distribution system. !amsung can use its strengths as threats for other companies. It can easily raise its image by its 1uality products and promotional advertisements. ,romotional activities can play a key role in capturing the market share for !amsung.

This report highlights four ma3or points and is further sub4divided into parts, which is preceded by a brief abstract of its contents. ,art I presents the introduction and brief History of !amsung5 ,art II e6plains the main !trengths, eaknesses, #pportunities and Threats of the "ompany5 ,art III shows the Target +arket of !amsung5 ,art I7 presents the +arketing +i6 of the "ompany5 ,art 7 gives the #bservations and Recommendations. (ll the things have been discussed according to !amsung$%s presence )lobally and particularly in accordance to ,akistan. Introduction 8stablished in 9:;:, !amsung 8lectronics has emerged as a ma3or player in the world electronics industry. The company consists of 2 main business units< the 0igital +edia Business, !emiconductor Business, Information = "ommunications Business and Home (ppliances Business. It employs over ;;,>>> people in some ?> countries worldwide. !amsung 8lectronics is ranked 9@9st on the )lobal .ortune ?>> /ist !amsung is best known for the success it has had in the memory semiconductor industry. .rom 9::-, !amsung 8lectronics is positioned at the top of the 0R(+, semiconductor market. !ince then, it has diversified its financial structure and is considered the number 9 company in market share for memory semiconductor chips, T.T4/"0s, "0+( mobile phones and computer monitors. It is also ranked number 2 by sales in the semiconductor industry and number ; by units in the mobile phone industry. /ooking ahead, !amsungAs vision is to become a leading company of the digital convergence revolution. The -9st century will be a time where the Internet, wireless communications, networked systems and contents will be united. 7arious forms of convergence technology that link conventional stand4alone appliances through networks will be developed. In the new digital convergence age, core competitiveness will be determined by how companies develop networks from components to digital products. .ew companies have the business structure to form this network in4house. !amsung, however, is ready to lead in this (ge as it will use its strengths in semiconductor, telecommunications and consumer electronics technology to develop innovative multi4capable products and create powerful networks that will empower the user for anytime, anywhere communications and a higher 1uality of life.

Samsung: Building brand equity through brand community

Samsung has created a strong brand around innovation, cutting edge technology and world class design. True to its brand image, Samsung resorted to a design competition to excite customers and involve the brand's community about its upcoming M ! range o" electronic gadgets. To boost the Samsung brand's hip image amongst the younger crowd, Samsung as#ed students to o""er their concepts "or a M ! design. The idea resonated strongly among the student community to such an extent that Samsung received a whopping $%%% designs "or this contest. Samsung, by resorting to such activities achieves two main bene"its. &irstly, it rein"orces Samsung's strong connection to the brand community by hoo#ing up youngsters early on to the brand to create brand excitement. Secondly, Samsung rein"orces its brand image o" always being on the "ore"ront o" innovation and design. 'n a cut(throat mar#et o" branded consumer electronics, these innovative mar#eting methods to involve the brand community o""er great leverage to sustain long(term brand equity. The Samsung design contest drives home the point that a strong brand always involves the community in its brand building e""orts to strengthen brand equity beyond traditional brand communication and media channels.


The economic fallout of "eptember // has forced most companies# large and small# to reevaluate their marketing strategy The bottom line .uestions everyone asks are 0/1 How do $ get people to buy in this time of uncertainty* 021 How do $ get them to buy from me* ,ur company is in the business of u!er se"u#tion$ Every day we%re developing psychological strategies to help clients answer those two .uestions (nd we%re struggling with the answers# too $n a recession# people hunker down# conserve their money# and wait for a better day That means no matter what magic you might have in your marketing messages# fewer people will respond than in good times "o what can you do* Here are a few ideas %$ Re&e& er t'at (eo()e sti)) *ant t'e (ro"u#ts or servi#es !ou are se))ing$ )uying is always a matter of degree of persuasion $n 3ohn%s mind# there is always a war between 4$ want it4 and 4-hy shouldn%t $ buy it*4 -hen the scale is tipped the slightest bit toward 4$ want it#4 3ohn reaches for his wallet )ecause of the times# there%s 5ust more weight on the 4-hy shouldn%t $ buy it*4 side now -hile all customers may appear to be 45ust looking#4 in fact# a lot of them are 5ust a nudge away from becoming buyers "o don%t despair# give everyone you can that little nudge and you%ll be surprised how many will respond to a small discount# a freebie# or some additional customer services 2$ +se Positioning to get #usto&ers to u! ,ro& !ou$ The truth is there will be fewer customers to sell# no matter what you might do short of giving it away - so you must sell a higher percentage of those who do show up This means you must focus on Positioning your company in relation to your competitors (fter all# customers whose mental scale tips over to 4$ want it4 are# by definition# buyers They%re ready to buy from someone )ut they will also be careful shoppers They%ll wonder if there%s a better deal down the street How do you position your company* 6ou must know what your competition is doing -here are the holes in their offer that you can e&ploit* -hat are they doing or not doing that you can use to make your company# product# offer# etc look more appealing* -hen there are only a few scraps of bread laying on the ground# the winners are usually those who keep one eye on the bread and the other on their competitors

6our marketing messages - advertising# in-store displays# direct mail# promotions - should be designed not only to sell your product# but to make your company seem like the best place to buy it Marketing messages which sell the product in someone else%s store are less than worthless -$ Se))ing .,eatures. is not enoug', es(e#ia))! no*$ Most companies emphasi'e the features of their product or service $t%s natural# especially for small companies The e&ecutives are in love with their 4baby#4 and like any proud mother they want to show it off to other people -e%ve all been on the other side of the baby carriage# saying things like# 4That%s the most beautiful baby $%ve ever seen4 while thinking 4-hat%s the big deal with )illy*4 Right* 7or most people# babies are babies unless they%re yours -e%ll# that%s the way your customers think about your product or service# too8 6our great leather sofa from "pain or new type of insurance policy may be magic to you# but it isn%t to most customers# whether they%re consumers or other businesses They know of several other places they can get something similar 9o matter who you are selling to# the fundamental principle of Psychological Marketing is this: 4People do not want what you are selling 4 $nstead# they want to satisfy a personal set of comple& buying motivations# some logical and some emotional That%s why they buy 6our product or service is 5ust a means to get that satisfaction 7or e&ample# people don%t want to buy a car radio# they want the entertainment and news it will give them (nd they don%t pay ;<=#=== to own a noisy# cramped Porsche )o&ster sports car They pay for the opportunity to go fast# look cool# and appear rich while having fun behind the wheel -hile features are important# they%re primarily important as a way to convince buyers the product or service will be able to deliver the benefits they really want $n hard times# the companies that know what their customers RE(>>6 want to buy# and then promise to sell it to them are the ones who survive They don%t emphasi'e marginal features 5ust because they love their %baby % +eep that in mind while you%re planning your marketing messages /$ Treat #usto&ers )i0e ,rien"s$ "everal recent columns have focused on the importance of great customer service That is critical in hard times because it can provide the nudge that makes customers buy from you instead of a competitor $t also provides repeat sales and .uality referrals )y treating customers like friends# you can also gain another important advantage for hard times information Most of us deal with customers in a traditional manner - 4Hi# what are you after* This is what $%ve got that fits that bill Here%s the price (re you interested*4 That%s the way you treat a stranger# not a friend Talking to customers like friends means taking the time to find out more about what they want# why they want it# what they liked and didn%t like about other places they%ve looked# what little e&tras they think would be nice in a deal# etc -hen you talk to people like

friends# they see you in a different way# and they want to do business with you a little more That right there is sometimes enough of a nudge to get the sale )ut even more valuable is the information you learn about how to sell them and others like them Treat customers like friends and they%ll respond in kind They%ll help you look out through their eyes and understand their heart%s desires $ts an a&iom in the car business that if you let a customer talk long enough he%ll tell you how to sell him )ut customers won%t open up if they believe you%re a phony who doesn%t have a personal interest in them# rather than in 5ust their money $n hard times# we all draw inward )ut this is a time which re.uires your marketing to reach out# to get inside your customers% minds and promise to satisfy the inner needs# wants# fears and desires that drive their buying decision 6ou can only do that by opening yourself up to new thinking# new ideas# and new approaches to marketing (lso see 42= Tips for Marketing in Hard Times4

9ike produces a wide range of sports e.uipment Their first products were track running shoes They currently also make shoes# 5erseys# shorts# baselayers etc for a wide range of sports including track ? field# baseball# ice hockey# tennis# (ssociation football# lacrosse# basketball and cricket 9ike (ir Ma& is a line of shoes first released by 9ike# $nc in /@AB The most recent additions to their line are the 9ike C =# 9ike 96D# and 9ike ") shoes# designed for skateboarding 9ike has recently introduced cricket shoes# called (ir Eoom 6orker# designed to be F=G lighter than their competitors% H/BI $n 2==A# 9ike introduced the (ir 3ordan DDF# a high performance basketball shoe designed with the environment in mind 9ike sells an assortment of products# including shoes and apparel for sports activities like association football#H/AI basketball# running# combat sports# tennis# (merican football# athletics# golf and cross training for men# women# and children 9ike also sells shoes for outdoor activities such as tennis# golf# skateboarding# association football# baseball# (merican football# cycling# volleyball# wrestling# cheerleading# a.uatic activities# auto racing and other athletic and recreational uses 9ike is well known and popular in youth culture# chav culture and hip hop culture as they supply urban fashion clothing 9ike recently teamed up with (pple $nc to produce the 9ikeJ product which monitors a runner%s performance via a radio device in the shoe which links to the iPod nano -hile the product generates useful statistics# it has been critici'ed by researchers who were able to identify users% R7$K devices from C= feet 0/A m1 away using small# concealable intelligence motes in a wireless sensor network H/@IH2=I $n 2==L# they launched the "P(RM Training ProgramNKivision Hcitation neededI "ome of 9ike%s newest shoes contain 7lywire and >unarlite 7oam These are materials used to reduce the weight of many types of shoes H2/I

9ike%s world head.uarters are surrounded by the city of )eaverton# but are within unincorporated -ashington !ounty The city attempted to forcibly anne& 9ike%s head.uarters# which led to a lawsuit by 9ike# and lobbying by the company that ultimately ended in ,regon "enate )ill AAB of 2==< Onder that bill%s terms# )eaverton is specifically barred from forcibly anne&ing the land that 9ike and !olumbia "portswear occupy in unincorporated -ashington !ounty for F< years# while Electro "cientific $ndustries and Tektroni& get that same protection for F= years H22I

9ike has contracted with more than B== shops around the world and has offices located in L< countries outside the Onited "tates H2FI Most of the factories are located in (sia# including $ndonesia# !hina# Taiwan# $ndia# Thailand# Pietnam# Pakistan# Philippines# and Malaysia H2LI 9ike is hesitant to disclose information about the contract companies it works with However# due to harsh criticism from some organi'ations like !orp-atch# 9ike has disclosed information about its contract factories in its !orporate Qovernance Report

Human rights concerns

9ike has been critici'ed for contracting with factories in countries such as !hina# Pietnam# $ndonesia and Me&ico Pietnam >abour -atch# an activist group# has documented that factories contracted by 9ike have violated minimum wage and overtime laws in Pietnam as late as /@@C# although 9ike claims that this practice has been halted H2<I The company has been sub5ect to much critical coverage of the often poor working conditions and e&ploitation of cheap overseas labor employed in the free trade 'ones where their goods are typically manufactured "ources of this criticism include 9aomi +lein%s book No Logo and Michael Moore%s documentaries 9ike has been critici'ed about ads which referred to empowering women in the O " while engaging in practices in East (sian factories which some felt disempowered women H2CI Kuring the /@@=s# 9ike faced criticism for use of child labor in !ambodia and Pakistan in factories it contracted to manufacture soccer balls (lthough 9ike took action to curb or at least reduce the practice of child labor# they continue to contract their production to companies that operate in areas where inade.uate regulation and monitoring make it hard to ensure that child labor is not being used H2BI $n 2==/ a ))! documentary uncovered occurrences of child labor and poor working conditions in a !ambodian factory used by 9ike H2AI $n the documentary# si& girls were focused on# all of whom worked seven days a week# often /C hours a day

!ampaigns have been taken up by many colleges and universities# especially anti-globalisation groups as well as several anti-sweatshop groups such as the Onited "tudents (gainst "weatshops H2@I Kespite these campaigns# however# 9ike%s annual revenues have increased from ;C L billion in /@@C to nearly ;/B billion in 2==B# according to the company%s annual reports ( 3uly 2==A investigation by (ustralian !hannel B 9ews found a large number of cases involving forced labour in one of the biggest 9ike apparel factories The factory located in Malaysia was filmed by an undercover crew who found instances of s.ualid living conditions and forced labour 9ike have since stated that they will take corrective action to ensure the continued abuse does not occur HF=I 9ike also caused controversy during the 2==A ,lympics in )ei5ing# !hina# when their sponsored !hinese athlete# >iu Diang# withdrew from the ,lympic //= metre hurdles# leaving the track after a false start by another competitor >ui claimed that he withdrew due an ankle in5ury HF/I However# an anonymous message was posted on the internet# purportedly from a source close to 9ike# claiming that the corporation had forced >iu to withdraw as he was unlikely to win# thereby tarnishing their image 9ike responded by announcing that 4we have immediately asked relevant H!hineseI government departments to investigate those that started the rumour4 HF2I

Environmental record
The consistently growing te&tile industry often negatively impacts the environment )ecause 9ike is a large participant in this manufacturing# many of their processes negatively contribute to the environment ,ne way the e&panding te&tile industry affects the environment is by increasing its water deficit# climate change# pollution# and fossil fuel and raw material consumption $n addition to this# today%s electronic te&tile plants spend significant amounts of energy# while also producing a throw-away mindset due to trends founded upon fast fashion and cheap clothing HFFI (lthough these combined effects can negatively alter the environment# 9ike tries to counteract their influence with different pro5ects (ccording to a 9ew England-based environmental organisation !lean (ir-!ool Planet# 9ike ranks among the top F companies 0out of <C1 on a survey conducted about climate-friendly companies HFLI 9ike has also been praised for its 9ike Qrind program 0which closes the product lifecycle1 by groups like !limate !ounts HF<I $n addition to this# one campaign that 9ike began for Earth Kay 2==A was a commercial that featured "teve 9ash wearing 9ike%s Trash Talk "hoe# a shoe that had been constructed in 7ebruary 2==A from pieces of leather and synthetic leather waste that derived from the factory floor The Trash Talk "hoe also featured a sole composed of ground-up rubber from a shoe recycling program 9ike claims this is the first performance basketball shoe that has been created from manufacturing waste# but it only produced <#=== pairs for sale HFCI (nother pro5ect 9ike has begun is called 9ike%s Reuse-(-"hoe program This program# started in /@@F# is 9ike%s longestrunning program that benefits both the environment and the community by collecting old athletic shoes of any type in order to process and recycle them The material that is created from the recycled shoes is then used to help create sports surfaces# such as basketball courts# running tracks# and playgrounds HFBI ( pro5ect through O9! found worker e&posure to to&ic isocyanates and other chemicals in footwear factories in Thailand $n addition to inhalation# dermal e&posure was the biggest problem found This could result in allergic reactions including asthmatic reactions HFAIHF@I

Marketing strategy
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9ike%s marketing strategy is an important component of the company%s success 9ike is positioned as a premium-brand# selling well-designed and e&pensive products 9ike lures customers with a marketing strategy centering around a brand image which is attained by distinctive logo and the advertising slogan: 43ust do it4 HL=I 9ike promotes its products by sponsorship agreements with celebrity athletes# professional teams and college athletic teams However# 9ike%s marketing mi& contains many elements besides promotion These are summarised below


$n /@A2# 9ike aired its first national television ads# created by newly formed ad agency -iedenJ+ennedy# during the 9ew 6ork Marathon This was the beginning of a successful partnership between 9ike and -J+ that remains intact today The !annes (dvertising 7estival has named 9ike its %advertiser of the year% on two separate occasions# the first and only company to receive that honor twice 0/@@L# 2==F1 HL/I 9ike also has earned the Emmy (ward for best commercial twice since the award was first created in the /@@=s The first was for 4The Morning (fter#4 a satirical look at what a runner might face on the morning of 3anuary /# 2=== if every dire prediction about 62+ came to fruition HL2I The second Emmy for advertising earned by 9ike was for a 2==2 spot called 4Move#4 which featured a series of famous and everyday athletes in a stream of athletic pursuits HLFI $n addition to garnering awards# 9ike advertising has generated its fair share of controversy:

Beatles song
9ike was the focus of criticism for its use of the )eatles song 4Revolution4 in a /@AB commercial# against the wishes of (pple Records# the )eatles% recording company 9ike paid ;2<=#=== to !apitol Records $nc # which held the 9orth (merican licensing rights to the )eatles% recordings# for the right to use the )eatles% rendition for a year (pple sued 9ike $nc # !apitol Records $nc # EM$ Records $nc and -iedenJ+ennedy advertising agency for ;/< million HLLI !apitol-EM$ countered by saying the lawsuit was %groundless% because !apitol had licensed the use of 4Revolution4 with the 4active support and encouragement of 6oko ,no >ennon# a shareholder and director of (pple 4 (ccording to a 9ovember @# /@A@ article in the Los Angeles Daily News# 4a tangle of lawsuits between the )eatles and their (merican and )ritish record companies has been settled 4 ,ne condition of the out-of-court settlement was that terms of the agreement would be kept secret The settlement was reached among the three parties involved: Qeorge Harrison# Paul Mc!artney# Ringo "tarrR 6oko ,noR and (pple# EM$ and !apitol Records ( spokesman for 6oko ,no noted# 4$t%s such a confusing myriad of issues that even people who have been close to the principals have a difficult time grasping it (ttorneys on both sides of the (tlantic have probably put their children through college on this 4 9ike discontinued airing ads featuring 4Revolution4 in March /@AA 6oko ,no later gave permission to 9ike to use 3ohn >ennon%s 4$nstant +arma4 in another ad

Minor Threat ad
$n late 3une 2==<# 9ike received criticism from $an Mac+aye# owner of Kischord Records# guitaristNvocalist for 7uga'i ? The Evens# and front-man of defunct punk band Minor Threat# for appropriating imagery and te&t from Minor Threat%s /@A/ self-titled album%s cover art in a flyer promoting 9ike "kateboarding%s 2==< East !oast demo tour ,n 3une 2B# 9ike "kateboarding%s website issued an apology to Kischord# Minor Threat# and fans of both and announced that they tried to remove and dispose of all flyers They state that the people who designed it were skateboarders and Minor Threat fans themselves who created the ad out of respect and appreciation for the band HL<I The dispute was eventually settled out of court between 9ike ? Minor Threat The e&act details of the settlement have never been disclosed

Chinese themed ad
$n 2==L# an ad about >e)ron 3ames beating cartoon martial arts masters and slaying a !hinese dragon in martial arts offended !hinese authorities# who called the ad blasphemous and insulting to national dignity and the dragon The ad was later banned in !hina $n early 2==B the ad was reinstated in !hina for unknown reasons HLCI


Niketown at Oxford Street !ondon "ain article# Nike sponsorships

9ike pays top athletes in many different sports to use their products and promoteNadvertise their technology and design 9ike%s first professional athlete endorser was Romanian tennis player $lie 9Sstase# and the company%s first track endorser was distance running legend "teve Prefontaine Prefontaine was the pri'ed pupil of the company%s co-founder )ill )owerman while he coached at the Oniversity of ,regon Today# the "teve Prefontaine )uilding is named in his honor at 9ike%s corporate head.uarters )esides Prefontaine# 9ike has sponsored many other successful track ? field athletes over the years such as !arl >ewis# 3ackie 3oyner-+ersee and "ebastian !oe However# it was the signing of basketball player Michael 3ordan in /@AL# with his subse.uent promotion of 9ike over the course of his storied career with "pike >ee as Mars )lackmon# that proved to be one of the biggest boosts to 9ike%s publicity and sales Kuring the past 2= years especially# 9ike has been one of the ma5or clothingNfootwear sponsors for leading tennis players "ome of the more successful tennis players currently or formerly sponsored by 9ike include: 3ames )lake# 3im !ourier# Roger 7ederer# >leyton Hewitt# 3uan MartTn del Potro# (ndre (gassi# Rafael 9adal# Pete "ampras# Marion )artoli# >indsay Kavenport# Kaniela HantuchovU# Mary Pierce# Maria "harapova# "erena -illiams 9ike is also the official kit sponsor for the $ndian cricket team for < years# from 2==C till end of 2=/= 9ike beat (didas and Puma by bidding highest 0O";LF Million total1 9ike also sponsors some of the leading clubs in world football# such as the )ra'il 9ational Team# Portugal 9ational Team# 9etherlands 9ational Team# O" 9ational Team# Manchester Onited# (rsenal# 7! )arcelona# $nter Milan# 3uventus# "hakhtar# Porto# "teaua# Red "tar# !orinthians# !lub (mVrica# (ston Pilla# !eltic and P"P Eindhoven 9ike will also sponsor Kundee Onited from summer 2==@ 9ike sponsors several of the world%s top golf players# including Tiger -oods# Trevor $mmelman and Paul !asey 9ike also sponsors various minor events including Hoop $t Op 0high school basketball1 and The Qolden -est $nvitational 0high school track and field1 9ike uses web sites as a promotional tool to cover these events 9ike also has several websites for individual sports# including nikebasketball com# nikefootball com# and nikerunning com


Review of the project

(fter publishing posts during B weeks, our school pro3ect is now over. This pro3ect was very innovative. I find interesting the idea of creating a web page on a precise marketing topic. +oreover, we had the opportunity of chosing the sub3ect, which was very rewarding. .irst of all, I learnt a lot of information about the sponsorship of *ike from my blog. But a blog has to be updated regurlarly. ThatAs the ma3or difficulty< you have to organise yourself and to publish posts as soon as possible. If a blog always contains new posts, people will often visit it. I think that this pro3ect is a good idea because it allows students to develop topics theyAre familiar with. It can also help students who are not familiar with Internet too. To conclude, I think that this pro3ect has to be continued but it would be better if all students post more comments on blogs. I hope you en3oyed my blog CCC DErFme

hile *ike is the industry leader in athletic foot ware on both a national and a global basis, the companyAs performance has been less than spectacular over the past two years GHooverAs, Inc. 9H. Three areas of particular concern to the company in relation to the refinement of its marketing strategy to improve the companyAs performance are GaH the dispute between *ike and .oot /ocker Ga leading athletic shoe retailerH, GbH *ikeAs strategies for dealing with outlets Gthe companyAs own *ike

Town stores and retail eb outlet, as well as discount outlet retailersH, and GcH the companyAs overall retail strategy Gproduct and target market issues concerning an athletic emphasis versus a fashion emphasis, as well as similar issues affecting the retail marketing of its productsH. The three areas of concerns described above re1uire the development of strategic responses by the company. Thus, each of the three areas defines an ob3ective for *ikeAs marketing strategy plan. This current research developed two suggested marketing strategy options in relation to each of the three ob3ectives for the company to consider for inclusion in its marketing strategy plan. In the *ike, Inc. G2H .orm 9>4I filed with the !ecurities and 86change "ommission reporting on *ikeAs .iscal ->>- Gclosed @9 +ay ->>-H results, the company revealed that it anticipated substantially lower order levels from its largest customer during the remainder of ca

Red )ull# (ustria%s biggest e&port since (rnold "chwar'enegger# has methodically created and dominated the energy drink category much in the way players of the board game Risk would defeat their opponents Kietrich Mateschit'# the owner of Red )ull $nternational# created the highly caffeinated beverage in /@AB 7ive years later# the drink spread into neighboring countries like Hungary and "lovenia# followed by Qermany and "wit'erland $n /@@B# Red )ull prepared to storm the O " market

More Articles of Interest

$ed %ull &nergi'es "arketing ( %rief )rticle $ed %ull plans to double sales by *+,+ sees no stock market entry "onster vs. $ed %ull $ed %ull -mb. "arket gets a boost from energy drinks# alternatives to sports drinks are...

Today# the slinky A-F-,E can has completed its invasion into nearly every cold bo& in the Onited "tates 0,hio# Tennessee and the Kakotas are among the few states without it 1 $n less than three years# Red )ull singlehandedly established and then lifted the booming energy drink category from a base of ;/2 million in 0wholesale1 dollar sales to ;L2 million in /@@A and ;B< million in /@@@# per )everage Marketing !orp ,thers soon followed# building energy drinks to a ;/F= million business 9ow !oke 0+MD1 and (nheuser-)usch 0/A=1 are 5umping in >ast year# Red )ull%s market share stood at C<G# while the company reportedly pulled in a cool ;/ billion in worldwide sales 3ust how Red )ull managed to accomplish so much# so .uickly has become the stuff of mythology "ome have written off the product by calling it a 4flash in the pan4 or derisively note that its handlers 4got lucky4 ( closer investigation of the company%s strategy however# reveals that luck had little to do with Red )ull%s success

The company/s consistent battle plan has been to 0open up0 a market by securing unusual distribution. 1hen $ed %ull initially set up camp in Santa "onica 2alif. it piggybacked on established distributors. Typically distributors will deliver a number of brands3 a Pepsi house will handle Pepsi 4iet Pepsi and "ountain 4ew and may even pick up a non( competing rival like 4r Pepper. Sales reps even greased the wheels by paying for their accounts/ promotional advertising and sampling costs for three months. %ut as the drink caught on the company began taking a more narrow approach. Now a $ed %ull sales rep will contact a small distributor and insist that he or she sell only $ed %ull. Otherwise $ed %ull will set up a warehouse and hire kids to load up the vans and deliver product. These start(up distributors can focus their entire energies on getting $ed %ull fully stocked in stores with prominent shelf placement. They generally break even within three months and are profitable within six. 0They buy direct from $ed %ull. There/s enough margin and volume to make it work 0 said one Northeastern distributor. 05 wish they/d give it to me but they have the kids with

the vans doing it. 5/m looking forward to getting Snapple/s 6enom 7a new energy drink launching 8une ,9: so 5 can compete with them.0 Next the sales team visits key on(premise accounts# hot clubs and trendy bars. 1hen owners begin buying a few cases they receive a $ed %ull branded cooler and other POP items. 0That/s when we start doing business officially 0 said "arkus Pichler evp(strategic planning $ed %ull North )merica. 01e go to on(premise accounts 7vs. retailers: first because the product gets a lot of visibility and attention. 5t goes faster to deal with individual accounts not big chains and their authori'ation process.0 Plus on(premise provides fertile ground for new drink trends. 05n clubs people are open to new things 0 said Pichler. 0The most important thing about 7$ed %ull: is it/s working. 5f you had a tough week and want to dance the product works.0 Perhaps a bit too well. ;ueling $ed %ull/s growth is a mysti<ue created by outlandish rumors about its contents# it is 0li<uid 6iagra03 its secret ingredient is bull/s testicles3 someone overdosed from the drink because it has drugs in it. =The company shoots down these and other myths in an ;)> section on $ Pichler wouldn/t talk about $ed %ull/s natural fit with the 0speed0 crowd that fre<uents raves taking designer drugs to stay awake for days at a time. Nor does the company endorse the mixing of $ed %ull with vodka 8agermeister or te<uila(a ubi<uitous bar call whose roots can be traced to &urope. 0;rom a sales perspective 0 Pichler acknowledged 07the mixability: is a nice side effect.0 There/s more to the guerrilla strategy than building bu'' at clubs. Sales teams will open off(premise accounts at convenience stores near colleges gyms health(food stores and supermarkets. The company has divided the U.S. into eight decentrali'ed sales units each of which is handled on a city(by(city basis. One regional office in New @ork for example services "aryland New 8ersey Pennsylvania and 6irginia. The %oston office handles the New &ngland states and upstate New @ork. &ach unit is responsible for creating distribution making sales calls and developing targeted marketing plans. The mission# to find out where the target demo =men and women age ,A(*B? hangs out and what interests them. 5t/s their Cob to get the message out to the right clubs and at the right events.


3anuary =C# 2=/=

No sign o, "e&an" re#over! in "eve)o(e" nations

$ want to begin by wishing everyone a Happy 9ew 6ear and e&pressing my heartfelt thanks for your ongoing support of 6amaha Motor !o # >td >ast year# 6amaha Motor suffered the biggest losses in its history (lthough we have overcome a number of difficulties in the past# no business environment has been more severe than the one we face today $n retrospect# it seems that the impact of past crises# while significant# was still relatively limited in scope E&amples include failures in model development in the /@B=s and an e&cessive battle for market share with our leading competitor in the 3apanese market during the /@A=s However# the current economic collapse is unprecedented !onsumption and demand dropped sharply in 3apan# 9orth (merica# Europe and all the other developed nations around the worldWall at the same time -hat is worse# there is no sign of recovery on the hori'on Perhaps the greatest challenge of all is that the problems are so widespread thatWat least in the developed nationsWthere is no single area where we can focus our efforts The fall in demand has been particularly severe for motorcycles and other leisure vehiclesWour mainstay productsand $ don%t believe that 5ust introducing new products such as hybrid vehicles with attractive environmental features at affordable prices will be enough to boost sales again "ome may e&pect demand to return as the economy recovers# but $ remain pessimistic about our future sales as long as we continue developing products based on our old business model (dding functionality# improving .uality and then raising prices in line with the increased value has been a successful paradigm in the past# but now the economic crisis has changed the consumer%s interpretation of 4value 4 The economy will likely recover to a certain degree# but consumers will probably continue to steer away from e&pensive products# regardless of what value the manufacturer believes 5ustifies the price

Dra&ati#a))! in#rease essentia) ,un#tions, "rasti#a))! re"u#e #osts

Qiven all these obstacles# there are two directions we will pursue in order to successfully address the challenges of the future 7irst# we will dramatically improve the essential functions of our products Enhancing these core functions will make the products more attractive to our customers

in a new way# yet without any increase in price !ustomers may e&claim# 4-ow# how can this new product perform this well*4 or 4-hy has it improved this much*4 -ith this aim in mind# our people in all areas of the product development process are working hard and creatively with innovative approaches "econdly# we need to reduce product prices while maintaining e&cellent performance# so our customers find themselves tempted for the purchase "ignificantly reducing costs means developing innovative cost-cutting measures# not only in manufacturing but across business sectors and processes# from product planning to design# testing and prototype production# and from procurement through pre-production# manufacture# logistics# sales and service

A(()!ing t'eoreti#a) va)ue1 ase" (rin#i()es to a)) as(e#ts o, our usiness

$n discussing 4essential functions#4 $ have been referring to products# but of course there are essential functions in the work we do as well (t 6amaha Motor# we have already spent years identifying the essential functions of factory work# striving to improve and restructure work processes in order to eliminate as much superfluous effort as possible -e call this 4theoretical value-based production 4 $t is a type of engineering analysis that identifies which work creates value and which should be done away with $n short# it helps narrow factory work down to its value-creating processes# which in our terminology we call 4essential functions 4 9ow our aim will be to apply this approach to not only manufacturing but to all aspects of our business (t times like these when we are suffering from a deep slump in sales# the redundancy in our related businesses becomes an increasingly serious burden Restructuring is unavoidable# and it means a painful downsi'ing of these operations However# we know that this is a process that we cannot avoid if we are going to move forward in today%s new business environment# and $ am determined to pursue this task with strong resolve in order to get 6amaha Motor back on track toward profitability as .uickly as possible $n closing# $ would like to ask everyone for your continued support of our company and the 6amaha brand

6amaha Motor !o # >td President# !hief E&ecutive ,fficer and Representative Kirector Tsune5i Togami 03anuary =C# 2=/=1