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Instituto Tecnológico Autónomo de México

Departamento de Administración
Global Strategy
Prof. María Novales-Flamarique

SAMSUNG ELECTRONICS COMPANY: GLOBAL MARKETING

OPERATIONS

1. Introduction
First founded in 1969 as a low-quality black-and-white TV manufacturer, Samsung
Electronics Company (SEC) has been successfully transformed from a third-tier
commodity to a global brand knocking on the door of the premier league, powered by its
efficient vertical integration led by Chairman Kun-Hee Lee. In 2003, the company was
ranked the 25th most valuable brand of the world.

2. Problem Statement
Eric Kim, Samsung's global marketing director, is assessing how to further upgrade the
firm’s worldwide brand reputation and reach the top 10 by 2005. Samsung is trying to
create a corporate marketing strategy that will effectively catapult the brand to the
forefront of the global electronics industry. The goal is to surpass Sony and to become a
premium global brand where consumers consistently view Samsung as a must-have
valuable brand.

3. Analysis
3.1 What are the ingredients of SEC’s turnaround strategy? What are the implications for marketing?
d
3.2 How strong is the Samsung brand? Can Samsung pass Sony and become a top ten global brand?

d
3.3 As Chief Marketing Officer, what are Kim’s roles and responsibilities? How has he built his
influence?
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4. Recommendations
Advertising Campaign. It is wise to administer both a global campaign and a segmented one.
The DigitAll global advertising campaign doesn’t seem to be enough to effectively increase
market share. It is the kind of campaign that doesn’t necessarily make sales increase, but simply
increases awareness. Instead, Samsung needs to create a campaign that educates consumers of
what the brand stands for and represents. The marketing message should emphasize the
company’s values on quality, innovation, and linkage of all of Samsung’s offerings. Quality within
the Samsung products needs to be advertised giving proof of high consumer reports, product
comparisons, and expert reviews. Print campaigns could highlight the fact that the company puts
a large majority of its resources on its human capital and their ability to innovate. This makes
the company a desirable place to work for and puts a higher value on the brand name.

* Low prices shouldn’t be a part of the promotion campaign. The price will be shown on the shelf,
and serves as a low-risk invite for a first-time buyer. Although in a down economy, lower prices
attract more sales, a low price is sometime associated with bad quality. The company is aiming
to be seen as a premium-brand, where the brand’s value is the desire and the price is worth it.
Sony is able to charge a higher price because of its high brand equity.

a. However, in certain industries like cell phones, price promotions drive consumers to at least
inquire and also to purchase. This doesn’t mean a low original retail price, but instead, contracts
with cell phone companies that create price cut illusions that boost sales.

* The electronics entertainment industry demands frequent introduction of new products. The
company should consistently be conducting trend analysis and when a new product is discovered
internally and finds positive results in test markets, marketing campaigns for its introduction
into public should be especially strong.

* Samsung should also accentuate links between products in their marketing efforts. The
different Samsung products are specially designed to link together, as Apple has successfully
done, and successfully marketing this linkage factor will boost lifelong sales.

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Based on the case article, Kim believes that Samsung Electronics Company has a couple issues
that need to be dealt with to accomplish the goal

1) Market Position: Though it varies in each market region, SEC is usually considered somewhat
performance-based, price- efficient brand appealing to “sensible brand buyer”. However, the
demand for more personalized, high-quality devices are becoming increasingly important. It is
required for the firm to differentiate its market segments and introduce respective advertising
campaigns.

2) However, such campaigns are challenged by a majority of SEC’s human resources who find
the concept of marketing doubtful and firmly believe that products should speak themselves by
its performance. Their concerns regarding the marketing campaigns’ cost efficiency might even
blur the aforementioned motifs for establishing the company’s brand image.

Settling down its brand image as number one global firm, Samsung Electronics needed to
implement marketing strategies that made consumers realize its brand values. In advertising, the
company would make advertisement like TV commercial or newspaper ads in a different way
from product-focused ads to customer-focused ads. In fact, for the SAMSUNG, they are in the
Post-Consumer Era, which means that consumers already had what they need and they are
asking themselves whether do they really need more or not. Usually consumers are in the stage
of moderate consumption, however by influencing decisions with advertisements, customers
behave more socially conscious. Therefore, to stimulating ads would relate to the consumers’
casual life style, signaling a message that its product would enhance their well-being and
happiness. Also, Samsung would achieve great consumer awareness through supporting
significant events like Olympics or FIFA World Cup. It would give the company the brand
image of a global electronics, approaching customers directly and closer. In addition, like co-
marketing with the Matrix movie, further cooperation with media contents business would raise
its brand image, capturing culturally united world.

Expanding R&D Investment to Future Technology, LCD

Now there are many competitors which have more brand awareness than Samsung Electronics.
Sony and Panasonic in TV industry and Nokia and Motorola in cell phone industry. They have
accumulated source technologies which make them as market leader at this point. However, the
technology is always progressing. Braun ray tube TV will be substituted with LCD panel or by
further innovative panel. By using LCD panel, cell phone will display more information on its
screen. In this situation, the technological advantages of competitors will not be valid any more.
Furthermore, if the panel is transparent so that can be seen from the both side of the display, it
has various usages with those characteristics. For example, transparent panel can substitute the
mirror and even can present dots and color on them. This can be used on the door of the
refrigerator that doesn’t have to open to check the things placed inside, large advertisement panel
on the subway station, or filming studio and other many more application is available. If
Samsung Electronics can make LCD panel with low cost and cut the prices of its products, its
product can be the dominant design in future market. Moreover, there is still huge amount of
market size with high potential to the next level of the technology so in order to keep the first
place of the electronic manufacturer, put some more effort to get a result.

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■ Decision Making

If Samsung Electronics is small and startup business or its financial status is not stable, it is
desirable to select one specific alternative that has high cost-effectiveness. However, the firm is
already recognized as chaebol which targets global market. The firm is able to perform multiple
alternatives at the same time. The industry which Samsung Electronics is placed requires cutting
edge technologies and has a short product development period. In this situation, if the firm
concentrate only one alternative, marketing or R&D, it can face a difficulties of losing either
customer awareness or technology competitiveness. For example, when PDA was first
introduced to market, it was expected as the product which leads ubiquitous environment.
However, this product was failed to cross chasm because it did not meet customer needs. The
providers did not offer the reason why their technologies were valuable to customers’ life. On the
other hand, the case of Nokia shows the importance of proper R&D investment. Nokia invested a
lot of money in R&D part. Actually it spent more than twice of money compare to Apple until
2012. Nevertheless, the wrong direction of investment caused the collapse of Nokia. By
analyzing these cases, the team concluded that Samsung electronics should apply not only
emotional marketing strategy but also R&D investment to future technology.