Initiation for Increasing Brand value:

In the year of 1993, Samsung Electronics Company had taken “new management initiative” under the
chairmanship of Kun Hee Lee to remake the SEC as a global leader. Following activities had been initiated under
the “new management initiative”.
Vertical Integration:
SEC focused on manufacturing as a core competency and kept it as own right. Samsung also has a strong R&D
facilities, state- of- the – art manufacturing and supply chain activities. Samsung ensured that its plants remain
competitive by forcing them to compete with outside companies for getting internal business.
Cost cutting:
To keep production cost low, company operated 12 manufacturing plant in China by 2003. Similarly R&D
facilities were setup in India to take advantage of the country’s abundance of relatively low cost human capital,
especially in the technology sector.
Focus on hardware:
Samsung strategy was to focus on hardware; because due to intense competition hardware lifecycle were
becoming shorter rather Samsung had collaborated with content provider.
Product differentiation:
As a “new management initiative” SEC had given most priority towards product quality. Samsung also able
offered customized product with premium price due to their consistency reliable product and timely supply.
Product breadth: Samsung R&D and manufacturing spanned multiple categories and as a result Samsung has a
large diversified product portfolio. It gives the Samsung a competitive edge from their competitors.

Digital product innovation:

Under the “new management initiative” Samsung invested huge amount in R&D for digital technology. As a
result Samsung has brought to market a dazzling array of products that represent ‘world first’ in their respective
industries. In addition, these innovative products had helped Samsung to stay ahead technologically and also
setting new standard for quality performance and award winning design. Samsung had set an industry record to
move a concept from drawing board to commercialization in five months. This rare feat was possible due to
multiple technological capabilities of its designers, engineers, speed decision making process and fewer level of
organization bureaucracy. As a result Samsung could refresh its product line twice as often. All of these helped
Samsung to keep ahead of its competitors.
Digital convergence: By 2003 Samsung had brought a degree of convergence to many of its products, providing
ground breaking innovation in many areas. Being a leader in memory and display, components, wireless and
consumer electronics, Samsung was uniquely positioned to exploit the potential synergy of all of them.
Re positioning:
Samsung was able develop a strong brand power by transform from “cheap OEM” to “high value added
products provider”. Company had converted its product line from an emphasis on low end commodities to high
end premium goods. Samsung had built the corporate brand image globally.
All the above activities help the SEC to increase its brand value over the competitors.

Challenges of Eric:
In year 1999, Samsung recruited Eric Kim as executive vice president of global marketing. Before “new
management initiative” Samsung had been product driven company that focused on manufacturing existing
product at lower cost than competitors and thereby built market share through economy of scale. At that time
Samsung brand was not widely known outside Korea. Kim stressed the importance of viewing the brand as a
core strategic asset and it should be thought strategically and built over time. Though Kim had support from top
executives for brand building, but others managers were not understood the essence of the Samsung brand
name. Except top management the people of Samsung believed that good products sell themselves, that
marketing was nothing more than selling, and that selling was only needed when one had a bad product. Kim
had faced challenged to educate the mangers of the company about the role of marketing and the value
addition done by the marketing. Also Kim had to justify the effectiveness of their marketing expenditure and
how it will generate return. Kim had a challenge to elevate the perceived professional stature of marketing
within Samsung and develop a marketing career path to attract, train and retain top quality marketers who can
make the case of marketing expenditure to skeptical general manager. Kim had designed three communicable
words to educate the internal employee of Samsung about the marketing. Those three words were; “wow”,
“simple” and “inclusive”.

Global Marketing Organization and emerging of Samsung as a powerful Brand:

Samsung had established a Global marketing Operation (GMO) unit in 1999. GMO has three major teams; the
marketing strategy team, the regional strategy team and product strategy team each with different
responsibility. The objective of GMO was to create a global brand. Accordingly they had appointed single
advertising agency, Foote, Cone and Belding (FCB) for delivering a consistent brand message worldwide.GMO
developed worldwide guideline for their logo and for its presentation in all SEC communication from letterhead
to product packaging to billboards.FCB also developed a unique brand essence for Samsung to differentiate in
the marketplace and boost internal morale. Consolidated agency also helps to gradually strip the sub brands,
which had distracted management and diverted resources. GMO also restructure the marketing budget. SEC had
spent eighteen months for gathering data on Samsung sales, margin, market share and marketing expenditure
by country and by product category into a central database. Kim had purchased a computer program, M-Net, to
analyze the result of past marketing plans to recommend where marketing dollar to be spent by country and by
product category and also pricing adjustment were recommended. Kim had introduced a market driven change
(MDC) that is to inject a much greater focus on customer insight into the new product development process.
This help to identify the market segmented that are willing to pay higher prices for particular functional or
aesthetic innovation. MDC initiative revealed that the Samsung brand lacked stature and the brand image
lacked emotion and human face. Samsung had generated tremendous brand visibility and able to attract
emotion by their “DigitAll-Everyone’s invited” brand campaign. After the successful launch of the DigitAll
campaign, Samsung took its brand activities to the next level by launching a comarketing campaign with the
blockbuster science fiction movie ‘The Matrix Reloaded’. In that movie Samsung phone played a role as the
gateway between the physical and virtual worlds. In addition Samsung had signed an agreement with
International Olympic Association to be a worldwide sponsor in the wireless equipment category.
Samsung had over 50% market share in almost all its product markets and high repeat purchase rate.
Leveraging this dominant position SEC had implemented multibrand and multisegment strategy in domestic
market. For other international market, GMO had grouped them into three category based on how much local
adaptation of marketing and brand building communication strategies and tactics are required for those
countries. It helped GMO to developed country wise marketing plan. Samsung had done extensive consumer as
well as market research. FCB had developed a proprietary model the “relationship monitor” that involves asking
consumers to rate one or more brand on battery of attitude and opinion statement associated with 13 relational
dimension through which consumers connected. To secure a stronger brand relationship creating devotion and
trust are top most priority. Brand loyalty will be build along with creating bond with customers through
providing perfect fit and delighting them. FCB examined consumer’s relationship with Samsung and key
competitive brands in six country markets: Brazil, China, Germany, Hongkong, The United kingdom and The
United states. Based on all the survey data, customized plan for each country as well as each product had been
emphasized to broaden the market share.

Conclusion:
As per 2002 series of interview with industry experts in 11 countries, the following six consumer’s trends were
identified.
 Living on demand and in control
 From consumers to “experience”
 Technology has gone from “wow” to “oh”
 Living the converged life
 Milking the moment
 Moving by instinct
From the above trends of consumers, we may suggest following things to Samsung to improve the value of their
brand:

 Consumers prefer more customized products, so, Samsung will try to identify more numbers of
segments to serve the customers by changing product specification according their preference.
Company’s manufacturing facility shall be flexible enough to accommodate the change of product
specification.
 Continual technological innovation is the need of the hour.
 Continuous market survey to know about consumer’s aspiration about the product and design the
product accordingly.
 More focus in the CSR activities to enrich the brand value.
 Consumers total experience from pre-purchase to post-purchase to be addressed very well by designing
user friendly product and uploading details of using instruction in website and also reinforcing brand
value by providing state of the art customer service.