Laurie Kevorkian

Tho Billet
Edouard Homasson
Clara Lippi
Anne Mignire

SAMSUNG CASE

Samsung Electronics Company (SEC) began doing business in 1969

as a low-cost manufacturer of black and white televisions. In 1970,
Samsung acquired a semiconductor business which would be a
milestone that initiated the future for SEC. In 1980, SEC showed the
market its ability to mass-produce. SEC became a major supplier of
commodity products in massive quantities to well known original
equipment manufacturers (OEMs). For this reason, Samsung was able to
easily transition into a major player in the electronic products and home
appliances market. SEC was mainly focused in manufacturing : profits that
SEC received were soon reinvested into Research & Development,
manufacturing, and supply chain activities. Nowadays, Samsung has
massively invested in the digital transformation and was able to create an
endless amount of digital products, due to its fast decision-making process
and focus on a digital future.
There were two major ingredients to SECs corporate turnaround strategy.
The first was when the top management decided to transform Samsung
from a cheap OEM to a high value-added products provider in 1993.
The second was when Samsung transitioned into a digital technology
manufacturer and focused its 17,000 scientists, engineers and designers
who worked in Samsungs R&D centers.
The implications for marketing were that it needed to put together a
powerful and decisive marketing strategy team to make the Samsung
brand competitive at a global scale. Additionally, Samsung needed to
know where it stood regionally all over the globe in order to determine a
marketing strategy in any global region.
A major challenge SEC had to overcome was brand recognition since it was
selling its products mainly to OEMs; therefore, the company had very little
interest in working on the Samsung brand. Another challenge was with
SECs managers concept of marketing as the managers perceived
marketing as nothing more than selling. So, they had to be educated on
the real benefits of the marketing for the business.
As stated in the case study, Samsungs branding was focused in neither
the message nor the logo that was used. The marketing budget was
focused more on short-term results versus long term branding creation.
Since the marketing was focused on cheap OEM, Samsung was not able
to develop effective branding. Branding is essentially creating a difference
from one product to another. A lack of brand knowledge was also a factor
in Samsungs weak brand name since the message or the logo was not the
same everywhere. Since there were no campaigns related to brand
knowledge, Samsung was not able to create a unique brand association
with customers.

Another problem was the managers ability to appreciate the value of

marketing or in the current case branding. The root of this problem was
that managers perceived marketing as being equal to selling. Again,
Samsungs top executives were on a mission to change from cheap OEM
manufacturer to a top of the line product.
As for the main individual actions that were crucial in the main brand
strategy of SEC we can focus on some key points:
Appointment of Eric Kim as a CMO thus confirming the brand
building strategy of SEC. Kim was a well renowned general manager
in the technology sector.
Implementation of a global marketing strategy, to cut from the local
promotion based strategies.
Externalization of the advertising by hiring a global agency, FCB, to
work on the brand image
Change in financing from a regional to global scale
Change in the way they allocated their marketing budgets
Launch of digital campaign to promote the brand shift to a more
digital product focused company
Investment on CRM tools such as software and on market research
to improve the market research and refine the segmentation.
Internal Formation of the SEC employees in order to educate about
the differences between merchandising/promotion and marketing.
But also to show the importance of marketing as a brand strategy
tool.
SEC has climbed from 42 in 2001 to 25 in 2003. Samsungs position, at 25,
shows that its brand has gathered momentum against its major
competitors. It is currently the third largest electronics maker in the world,
behind Sony and Matsushita. Consumers appear to take Samsung
seriously as a quality brand of VCRs and TVs, and even consider it a
superior brand in areas like mobile phones where it competes with Nokia,
Motorola and Sony-Ericsson. Samsung may eventually become a top ten
global brand, it should continue to focus on quality, introduce cutting edge
technology and focus on more segmented and personalized products.