Principles of Marketing CZBK9004

ASSESSMENT (Individual Assignment) SAMSUNG ELECTRONIC

Words: 2588

Shafiera Humala Asaputri 003MG012 Bachelor of Commerce Majoring in Management

EXECUTIVE SUMMARY Samsung Electronic is one of the biggest electronic companies in the world, that compete each other with Apple, LG, SONY, HTC, and other electronic company in the world. Samsung Electronic is founded in 1969 in Suwon, South Korea. The Chief Executive Officer of Samsung Electronic now is Kwon Oh-Hyun. Samsung Electronic produce a lot of electronic products such as camera, television, smart phone, home appliance, PC, and printer. Samsung Electronic markets are people who have big income because the price of Samsungs products is not cheap, but the quality of the products is good. So people do not mind to buy the products. Samsung Electronic did a lot of charity or donated in event or program in the world. Such as donated for famous museums in the world, operating program for children that can not go to school because they do not have any money to go to school and many more. Samsung use social media, web sites and internal marketing for promote their product. Samsung Electronic revenue is increasing rapidly in 2012 because the sales of Galaxy Note II, Galaxy S III and television. Revenue Samsung Electronic in 2012 is US$ 186,101.3. Apple lost over Samsung because of these products in the end of 2012. Samsung Electronic has 221,726 employees in the end of 2011, not only in Korea but also globally. Samsung electronic products always has new technology and they always give new features and a lot of features for their product, it makes better than the old product. Because, the key sentences Samsung Electronic are New Technology, Innovative Products and Creative Solutions. In this report we can read about Samsung Electronic SWOT and PESTLE analysis. Strengths, weaknesses, opportunities and threats of Samsung Electronic. Political, economical, social, technological, legal and environmental factors of Samsung Electronics. SWOT and PESTLE analysis is very important for company because with these analysis help company to achieve their goals. In 2011 Apple suing Samsung Electronic about Apple trademarks, patent and copied iPad and iPhone. Samsung Electronic has to pay to Apple for US$ 1.05 billion. And in 2012 there is also labor issue in China that Samsung Electronic employs underage worker. Samsung Electronic marketing strategies is very good. The promotion strategies of Samsung Electronic is very good, they work with famous Korean artist such as Psy, Super Junior, Girls Generation, and other Korean artist. They work with

them to starring in the commercial film for advertise their new product and also they sponsored many Korean dramas.

CONTENTS

Executive Summary.................................................................................... ii 1.0 2.0 Introduction.. 1 Situation Analysis A. Internal Environment I. II. III. IV. B. Organization background... 2 Products 2 Financial and non-financial results 3 Channels... 4 Markets. 4 Competitive environment 4 Economic environment 5 Demographic environment.................................................. 6 Social and cultural environment 6 Political and legal environment.. 7 Technological environment. 7

External Environment I. II. III. IV. V. VI. VII.

C. D. 3.0 4.0

SWOT or PESTLE analysis 7 Critical issues 9

Marketing Objectives.. 9 Marketing Strategies A. B. C. D. E. Target markets. 10 Product strategies.10 Pricing strategies.. 10 Promotion strategies 10 Distribution strategies. 11

5.0

Recommendation for Change for improving the marketing of an organization. 11 Conclusion 11 References.. 12

6.0 7.0

1.0

INTRODUCTION Technology from time to time will continue to evolve and getting better. In the

old days, hand phone was very thick. We can only use it for call and send instant message (SMS). Now hand phone is very slim, easier to bring everywhere. Have a lot of features like camera, Internet, video chat and other features. Not only hand phone that evolve, but television too. In the old days, television has a big machine but the screen is very small. It was in black and white, not color. Now, television is very slim and has bigger screen than before. The image is very clear and clean like real. Can access Internet, has 3D feature and other features. Today, there is a lot of electronic company in the world. Several big names company is strongly compete with each other. They compete their quality, price and technology. Samsung Electronic is one of the biggest electronic companies in the world. Samsung electronic is South Korea Company that founded in 1969. Samsung Electronic is one of the subsidiary company of Samsung Group. Samsung Group is the largest company in South Korea. In this report, we will know about the environment of Samsung Electronic. Marketing strategies that Samsung Electronic operating in.

MISSION STATEMENT Samsung Electronic mission is to inspire its communities by following Samsungs 3 key strengths; New technology, Innovative products, Creative solutions, and promoting new value for Samsungs core networks: employees, partners, and industry. With these 3 key strengths Samsung hopes that they can make a better world and get a lot of experience for all.

2.0 A.

SITUATION ANALYSIS INTERNAL ENVIRONMENT

I.

SAMSUNG ELECTRONIC BACKGROUND Samsung Electronic is one of the biggest electronics company in South Korea.

Founded by Lee Byung Chull in 1969 Suwon, South Korea. Now, the Chief Executive Officer of Samsung Electronic is Oh-Hyun Kwon. Samsung Electronic is one of the subsidiary company of Samsung Group. Samsung Group is the largest company in South Korea. Samsung Electronic produces televisions, cameras, home appliances, mobile phones, and computers. But now, Samsung Electronic is worlds largest mobile phone maker by 2011 unit sales. And in 2012, Samsung Electronic became the company that gets the largest revenue wins over Apple. The key performer of Samsung Electronic in 2012 are Samsung Galaxy S III and Samsung Galaxy Note II. These products made Samsung Electronic got a lot of profit than before. Samsung Electronics new vision is Inspire the World, Create the Future.

II.

PRODUCTS

Television / Audio & Video Television; LED TV, LCD TV and Plasma TV. LED television is the best television by Samsung Electronic. LED television has a slim design, SMART television and 3D. SMART television is can access to Internet and deliver content from other computers or other network. We can plug in our disk drive. Has Smart interaction such as face recognition, motion control, voice control, and camera application. Blu-ray Player, DVD recorder & player, home entertainment system and wireless Audio with dock.

Camera / Camcorder SMART Camera, NX Camera, and GALAXY Camera. GALAXY camera use Android like smart phone.

Home Appliances Washing machine, refrigerator, air conditioner, vacuum cleaner, and microwave oven.

Mobile Devices Mobile phone, Smart Phone, tablet, and Galaxy Note. The most outstanding from mobile devices Samsung are Smart phone, tablet and Galaxy note.

PC / Peripherals & Printer Samsung PC are notebook PC and Smart PC. Printer/multifunction.

III.

FINANCIAL AND NON-FINANCIAL RESULTS

Financial Samsung Electronic result Samsung Electronics income increase rapidly in 2012 because the sales of Galaxy Note II and Galaxy S III.

Non-Financial Samsung Electronic result Samsung Electronic is helping hand to other country that need help. Samsung Electronic works with communities for helping other country. 1. In America made program Samsung Hope for Children. Has raised US$ 25million donated to several charitable. 2. In Europe 2010, Samsung Electronic organized the campaign Everyones Art collected around US$ 1.7 million for Pink Ribbon campaign; it is about to fight breast cancer. 3. Samsung donates products to some world famous art museums in Europe such as the Louvre, Pompidou, Osray and Rodin to support their activities. 4. In China, Samsung organizes One Heart One Village. 25,970 employees participated to supporting farming villages through improving education & modifying peoples mindset, renovating infrastructure in the farming villages and to increasing village income. 5. In Thailand, Samsung Community Center of Hope offers service such as healthy care, education and recreational for local resident. In Philippines,

Samsung help 55 students to continue their education for free. And donated Samsung products.

IV.

CHANNELS Samsung Electronic gives their information about their product through social

media and websites because a lot of people using social media in their daily life. It makes easier for everybody to get the information through social media and websites. Youtube is for promotional videos. Twitter for daily information and they can communicate with their consumers. Samsung Electronic gives employees discounts and coupon for purchasing Samsung products. The name of the program is the Samsung Mobile Friends and Family Employee Purchase.

B.

EXTERNAL ENVIRONMENT

I.

MARKETS Markets of Samsung Electronic are people that have big income, because the

price of Samsung Product is not cheap. But with the price that not cheap, they have good quality product, has a lot features and new design. So people want to buy it because it is worth it to spend with.

II.

COMPETITIVE ENVIRONMENT Samsung Electronic has a lot of competitor in every field. Competitors in

television and smart phone are very competitive. Competitors Samsung SMART TV are: SONY Sony BRAVIA TV 3D LED is the rival of Samsung SMART TV. It has same features and specs but it does not has Smart interaction like Samsung SMART TV.

LG Local competitor Samsung electronic. LG Smart TV 3D LED has same features and specs with Samsung SMART TV and also has smart interaction too.

Competitors Samsung in Smart Phone are: APPLE The biggest competitor for Samsung Electronic. From 2011 Apple and Samsung Electronic always compete each other in smart phone. iPhone versus Galaxy Note and Galaxy S

HTC The first company that produces phones with Android mobile device and the first company that produce first touch screen smart phones in the world. In the second quarter 2011, HTC become third largest smart phones company, after Apple and Samsung.

III.

ECONOMIC ENVIRONMENT

Currency in Millions of US Dollars TOTAL REVENUES GROSS PROFIT Dec 31 2009 125,595.00 38,444.70 Dec 31 2010 142,460.90 47,874.00 Dec 31 2011 152,016.10 48,696.80

Dec 31 2012 185,276.70 68,592.40

In 2012 total revenue Samsung Electronic rising rapidly to US$ 186,101.3 million with gross profit US$ 68,897.6 million. Samsung Electronic has been able to reduce expenses of good sold from 67.97% to 62.98%. This made Samsung to a bottom line growth from USD $12.4B to USD $22.1B. In 2010 Samsung Electronic spend around US$ 8,000 million for marketing expense. In 2012 they spend around US$ 12,000 million for marketing expenses. Sales promotion expenses they spend around US$ 4,000 million in 2011. Advertising in 2011 they spend US$ 3,500 million, in 2011 is US$ 4,000 million. Samsung Electronic spending a lot of money for marketing.

IV.

DEMOGRAPHIC ENVIRONMENT Samsung Electronic has 221,726 employees in the end of 2011 increased by

31,262 from 2010. Korea 2009 2010 2011 85,089 (53.9%) 95,662 (50.2%) 101,973 (46.0%) Overseas 72,612 (46.1%) 94,802 (49.8%) 119,753 (54.0%) TOTAL 157,701 190,464 221,726

It is because of the new production plants and expansion of existing plants in Southeast Asia and China. Overseas employee location are from Southeast Asia, China, Southwest Asia, South America, North America, Europe, CIS, Middle East, Africa and Japan. In Southeast Asia have 21,165 employees the biggest number among the others. 59.5% of employees are new graduates and 40.5% are experienced.

Age <30 30s >40

Employee 124,641 70,531 26,554

Samsung Electronic prefers young people because they have fresh idea and has full energy for work. 40% of Samsung electronic employees are female.

V.

SOCIAL AND CULTURAL ENVIRONMENT Samsung Electronics products not only for Korean market, the products are

for other country too. Because the product is appropriate for everybody from every country and every age. Mobile phone that uses Android is a trend now, and Samsung Electronic is following this trend.

VI.

POLITICAL AND LEGAL ENVIRONMENT Samsung Electronic paid taxes and dues to the South Korean and foreign

governments increased by 11.7% from 2010. In 2010 the total taxes and dues payments is KRW 3,809 billion. In 2011 is KRW 4,256 billion. Samsung is focus on leading edge, forward-thinking technologies, products and services that are compliant with government regulations. Samsung Electronic partner with authorized federal resellers to offer reliable solution to the federal government. The products are LCD monitors and data projectors. Discrimination forced labor and child labors are prohibited in Samsung Electronic.

VII.

TECHNOLOGICAL ENVIRONMENT Samsung Electronic product has high technology. Samsung always research

and makes for new features for the product. Every new product has new features, better than the old ones and good design. Like Samsung vision creative, innovative, and new technology. Samsung Electronics smart phone now is number one in th e world, with iPhone. SMART Television Samsung is the best television now. It has a lot of features such as 3D, SMART interaction, can access internet, can play games without controller, do not need remote anymore, and we can also use our smart phone (Samsung) to control television. Control our cars, but only Hyundai. We can turn it off and on the car.

C.

SWOT OR PESTLE ANALYSIS SWOT analysis is Strengths, Weaknesses, Opportunities and Threats. This is

help organization to achieve their goals. Strengths: what are the advantage of the company Weaknesses: what are the disadvantage of the company Opportunities: the project that could be advantage for company Threats: something that could cause any trouble for company or project SWOT analysis for Samsung Electronic: Strengths Good marketing strategy

Good quality products Strong hold in Consumer Electronic Has a lot of employee in local and global

Weaknesses Threats Intense competition Apple is biggest competitor for Samsung Electronic in smart phones category Poor pricing strategy High investment on research and development Have issue about the battery for smart phone

Opportunities Increasing on consumer market Increasing television mobile phone sales Growing global market

PESTLE

analysis

is

Political,

Economic,

Social,

Technological,

Environmental, and Legal factors. This is one of the important tools of business strategic Management to identifying the environment of the business operates.

Political Law about labor Goodwill for foreign nations Tax policy Services and goods provide by the government

Economic Inflation rate Income Revenue and profit Economic growth Interest rate

Social Legal Employment law Discrimination law Consumer law Health and safety law Age distribution Growth rate Culture of the society

Technological Costs and quality leads to innovations Research and development activity Better technology for new product

Environmental Place Ecofriendly product (problem of global warming)

D.

CRITICAL ISSUES In 2011, Apple was suing Samsung violated Apples trademarks, patents and

copied the iPhone & iPad. In the end of 2012 its said that Samsung should pay to Apple for US$ 1.05 billion for damages in an intellectual property lawsuit. In 2012, there is labor issue in China that Samsung Electronic employs underage workers. They employ 15 years old girl to works at the factory in China. In 2013, there was accident that leaks of hydrofluoric acid gas in plants, Seoul that killed one worker and injured 4 workers. They cover this fatal incident with lies.

3.0

MARKETING OBJECTIVES Marketing objectives is a group of goals of the company when they promote

their products or service to the consumers that can be achieved within a given time frame. Marketing objectives of company for a product include providing information about product features, reducing consumer to buy the product, and increasing product awareness among target market.

4.0 A.

MARKETING STRATEGIES TARGET MARKETS Target market Samsung Electronic is depends on the product. Television is

for people who can accept a new product idea, new features, and new technology. Because the price is not that cheap, the target market is people who have considerable income. Smart phone is everyone. Now almost all people use smart phone. But for the Galaxy Note II the target market is for businessman, designer, journalist and some kind profession like that. Because Galaxy Note II has features that make these professions easier to do their jobs just using this and Tablet. For other products the target is also the same, for people who can easily accept a new product, features and technology. And has big income.

B.

PRODUCT STRATEGIES Product is something that company produce and offer to the consumer that

might satisfy a need or want. Samsung Electronics always has new ideas for their new product. They make a new product a lot better than the old ones, so the consumers will not go to the other company. They make the new product has a lot of features, the design is better and slimmer than before it make very modern, and they good quality products.

C.

PRICING STRATEGIES Samsung Electronic produce goods that have good quality, always have new

and a lot features, unique, different from other company and make people want to buy it and spend their money on Samsung Electronic products because it is worth it to spend on. The price is very reasonable because with this price people can get good quality product. Even though it is expensive, but because it has a good quality the price is very reasonable for people.

D.

PROMOTION STRATEGIES Samsung Electronic Korea works with Korean celebrities like Psy, CN Blue,

Hyun Bin, Girls Generation and other celebrities for their Commercial Film and perform at the event. Samsung Electronic has sponsored a lot of Korean Dramas. It is

easier to promote their product because a lot of people watch Korean dramas, not only Korean people. But people in other countries in Asia also watch Korean Dramas. Media is a public relation way, Advertise their new product on newspaper and magazine. Give special price for first week since they launch the product. Sent direct email to their regular customer to give them the latest information. Internet marketing is like social media (Twitter & Facebook) and websites. Youtube is for video promotional.

E.

DISTRIBUTION STRATEGIES Samsung Electronic has a lot of retail store in each country. In Singapore,

Samsung Electronic has 14 official retail stores. In Pekanbaru (Indonesia), Samsung Electronic Indonesia opens Samsung Plaza that sale Samsung Electronic product such as television, smart phones, camera and home appliances. Not only official retail store but they also works with other cellular store in each country.

5.0

RECOMMENDATIONS FOR CHANGE FOR IMPROVING THE MARKETING OF AN ORGANIZATION Samsung Electronic should concentrate or focus on their quality and pricing

structure if they want to maintain their success. The quality of Samsung is already good. But they have to still improve their product. So, they can keep up with other company. The pricing structure has to balance with the quality. With that, Consumers wants to buy it. Always keep in touch with consumers, means of advertising, press releases and make them curious about the product specifications, new features and changes if there are any. Make them want to know a lot about the product.

6.0

CONCLUSION Samsung Electronic is one of the biggest electronic companies in the world

that has a big income than other country. This company has a good marketing strategies so they can attract many people too buy and focus on their products. Also they have good quality product with reasonable price. Even though Samsung has a lot of competitors, Samsung can still keep up with their product to compete each other. Samsung always consider their target markets.

7.0

REFERENCES

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