- Confidential -

Air Conditioner

EU Launching Master Plan

2007. 11. 30

Digital Appliance Division

Strategic Marketing Team

Air Conditioner

Confidential -

Contents

I. Market Analysis

1. Market Situation

2. Competitor Analysis

3. Consumer Analysis

II. Offering Strategy

III. Offering Review

IV. IMC Strategy

1. Communication Theme

2. Campaign Strategy

3. IMC Mix

4. IMC Material Output

- Appendix- EU Marketing Calendar

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I. Market Analysis

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1. Market Situation - Overview

TrendTrend

Issue in 2007Issue in 2007

Inverter & Multi

demand ↑

Severe EER competition

Art Cool design well

received

Inverter noise problem

Lack of Samsung A/C

identity

Cost competitiveness

Demand Forecast

3,537

K

59%

39%

56%

42%

51%

47%

44%

54%

3,744

K

3,964

K

4,197

K

CAGR5.9%

-3.7%

17.9%

EU

Inverte

r

On-Off WAC

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1. Market Situation - Brand Image

DaikinSamsun

gMitsu-bishi

LG Haier

Reliable 65.8 41.5 50.3 50.8 7.8

Popular 46.5 48.5 41.0 47.8 4.8

Best quality 51.0 30.8 39.8 40.5 5.3

Various functions 49.8 40.5 42.8 45.5 6.5

Best design/exterior 48.0 30.5 29.5 39.5 3.8

Value for money 43.0 26.8 27.3 41.0 5.5

Product variety 45.8 40.5 39.8 35.5 7.0

Ease of buying 49.5 44.0 40.8 45.0 5.5

Recommended by salesman 52.3 29.5 35.5 35.3 3.8

Product display 45.3 32.8 28.5 40.8 4.5

Advanced tech 52.3 38.3 46.8 44.0 7.5

A/S / Warranty 46.5 29.3 33.8 34.8 5.0

Promotion activity 46.8 32.0 27.5 32.3 3.0

Advertising 51.5 33.0 31.3 34.3 3.5

Recommended by others 48.3 27.8 33.5 37.0 2.8

Most preferred 42.5 26.3 26.8 34.8 2.8

(n=400, %)

Imagewise, Daikin outscores other brands for all the attributes and LG seems to be the next highest

Samsung generally has low score especially in terms of ‘high quality’, ‘value for money’ and ‘recommended by salesperson’

▣ Reliable

▣ Popular

▣

▣ Function variety

▣ Best design/exterior

▣ Value for money

▣ Product variety

▣ Ease of buying

▣ Recommended by salesperson

▣ Product display

▣ Advanced tech

▣ A/S / Warranty

▣ PR activity

▣ Advertising

▣ Recommended by others

▣

● Daikin

● Samsung

● Mitsubishi

● LG

● Haier

Best quality

Most preferred

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1. Market Situation - Key Success Factors

: Top 5 Priorities

Achieve Top 2 M/S Leadership

• Designs fitting to local specifics (regulations, customer taste towards aesthetics/fashion, etc.)

• Full lineup with flexible indoor System AC unit configurations

• Differentiated product lines for retail and professional channels to avoid price conflict

Logistics and Services

• Solid after-sales service infrastructure (e.g. prominent service centers) for commitment and branding to customers

• Program of training, technical support, spare parts supplies for professional channels

• Logistics efficiency to channels, especially during peak seasons

• Penetrate professional channels via installers and specialized distributors

• Build network of loyal channel partners via competitive incentive policies, technical support, and marketing support

Branding and Sales capabilities

• ATL critical to generate ‘pull’ from end users (Daikin’s “camel in uniform” campaign)

• Dedicated sales force with industry-leading incentive structures

• Specific marketing programs (tradeshows, seminars, brochures, forums) for professional channel partners

ChannelsProducts

Source : Mckinsey Recommendation

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2. Competitor Analysis

StrategyNorth

AmericaSouth

America EU CISS/EAsia

China JapanMiddleEast

LGIncreasing Plants (Poland/KSA)Focus on System A/C

WAC Brazil

P’sonicFocus on Japan domestic MS No1DC Inverter in Chinese market

Priority 2Priority 1

(DC Inverter, China

Daikin

Focus on Japan domestic MS No1 (enhancing Heating COP) Increasing plants(Czech, Belgium)M&A OYL (Entering N.America)

Focus onEntering

Priority 1(Inverter/ HP)

Priority 2(인버터 )

MelcoFocus on EUComp Reactor Change (Cu→Al)

FujitsuBest Heating COP N.America, E/W EU

Mini split EU(Australia

)General

Focus on increasing profit with maximizing System A/C revenue (Daikin / LG) Japanese focus on Inverter, differentiating from Korean & Chinese, trying to enter N.American & N. EU market

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2. Competitor Analysis – Products & Technology

DESIGN DEPTH EER/COP

Daikin 150mm 4.03/ 4.15

P’sonic 139mm 4.48/ 4.26

Melco 198mm 4.20/ 4.35

- Fujitsu General “ Nocria (8.5Kw), Daikin “Ururu Salala (COP 5.14 )

- Stronger Low Ambient C/O (-10 ~46 ℃) / H/P (-15 ~24 ℃)

- Premium with differentiated Tech. & USP Standard with price competitiveness Deluxe with Standard + 1 USP

- Diminishing On-off Lines

DaikinUruru Salala (De-/Humidifying) Siesta (IT) Specialized in Certain Channel

P’sonic Air purifying USP

Patrol Sensor (Premium)

Toshiba Daiseikai (Flagship) Energy saving / Air Purifying

Compact Design & Diverse Color Flagship with outstanding USP

Penetrating New Market with Hi-COP Enhancing INV Lines (Prm/ Dlx/ Std)

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3. Consumer Analysis - Key Buying Factors

Basic KBF Energy efficiency is considered more importantly

than actual price

Total ITALY SPAIN KSA IRAN

(n) (1613) (400) (400) (408) (405)Cooling

performance 61.7 53.5 58.0 77.7 57.5

Economical 57.4 76.3 63.8 33.6 56.5

Noise of indoor unit 21.3 19.0 29.3 9.6 27.7

Air purification 20.6 28.8 8.5 32.1 12.8

Brand 15.7 8.3 14.3 14.7 25.4

Design 4.8 4.3 4.0 7.1 3.7

Convenience 4.2 2.8 7.8 2.9 3.5

Factors needs to be developed 1 Noiseless cannot be differentiated point

due to advance technical development Relatively latent needs are found towards

air purification The importance is actually ranked low,

but includes attributes from other area

Factors needs to be developed 2 Considered as relatively less important factor,

but can be visible differentiated point → Currently the design of RAC’s are very similar

Cooling performance and economical factors are mentioned as basic attributes, followed by noise and air purification

Rank 1+2, %

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3. Consumer Analysis - Information Source

Sales repfrom store

Real product from store

WOM

Promotion from manufacturer/

distributor

Internet

Advertisement

Article

43.8

43.5

42.5

27.8

13.8

9.5

7.5

(n=400, Rank1+2, %)

Italy

50.2

40.4

50.8

13.4

14.0

19.9

6.2

(n=307, Rank1+2, %)

Spain

16.7

35.6

66.9

20.2

4.2

22.6

30.6

(n=402, Rank1+2, %)

Iran

26.2

37.3

42.7

46.6

4.9

33.8

8.6

(n=408, Rank1+2, %)

KSA

The importance of WOM is found in all countries,and Europe shows relatively high importance of stores than Middle East

However, the influence rate of sales rep is relatively low in Middle East, whereas promotion & advertisement is considered as relatively important in KSA

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3. Consumer Analysis - Segmentation

By analyzing market according to consumers’ perception structure,

following segments are drivenAttribute Consequence Value

Price

Additional Function

• Most importantly considercooling performance

• Prefer premium brandsPower-cool

15.2%

Noise-zero 7.0%

• More importantly consider additional functions related to health/hygiene

Trend-buy27.2%

Puri-tech9.4%

Value-Cool 27.9%

Wise-buy

13.3%

• More importantly considerNoiseless factor

• Other factors are less concerned • Prefer Japanese especially

Fujitsu

Note) It is only a Perceptual Map based on quantitative study

• Compare priceand energy efficiency

• Follow the trend in terms of design/function

• Prefer secure brands

• Less concerned• Consider only basic

cooling performance

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3. Consumer Analysis - Targeting

It is found that our design has relative competitiveness at current price,Power-cool & Puri-tech can be the target

Power-cool

14.5%

Trend-buy

28.9%Value-Cool 20.8%

Wise-buy

17.0%

Noise-zero 7.5% Puri-tech

11.3%

Montblanc

Additional Function

Pri

ce

Note) Above is a Perceptual Map based on quantitative study

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II. Offering Strategy

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1. Product Strategy

Dominate Market Premium - Compete with Japanese - Against Art-Cool diversity

Pursue Best Performance - The Best EER/ Noise - Competitive USPs vs. Others

Enhance Design Identity - Recognizable at a glance

Compact Technology - Slim Solution (Downsizing)

Pursue Global Top

Class!!

20072007

20082008

20092009

New USP Launching - MPI zone - Good’sleep

Enhance Premium - Mont Blanc - USP (Auto Roof Shutter) - Unique Design

Improve Performance - Noise Quality - High EER (4.31)

Compact type models Enhance Mid & Low - New Vivaldi New USP Launching More Compact models

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2. RAC Line-up

2007 20082008

INVERTER

NonInverte

r

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3. Price Positioning (EU)

2008Samsung

Daikin

€ 400

€ 600

€ 800

€ 1,000

€ 1,200

2007Samsung

LG

On off On off

On offOn off

Panasonic

On off

On off

(9K, Prices in EU)

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4. Design Strategy

Soft Minimal High-tech & Smart

Simple

Complex

Reason Feeling

SAMSUNG

JAPAN Brand

LG

Trend

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5. Features in RAC

AutoRoof

Shutter

MPI

zone

Good

Sleep II

DNA &Deodorizin

g

Filter

Cathchine &Deodorizing

Filter

Silver Coated Pre-filter

Silver Coated

Eva.

(9/12K)

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6. USP Competitiveness

BEST

USPWHY

BEST USP?

Cleaning/

Maintenance

Auto Roof Shutter

EZ take out Filter

AC RobotAuto Roof Shutter

Affordable Tangible Harmonious Design with function

Air Purifying/

Health

MPI zone

DNA Filter

Neo Plasma

Triple Filter

e-ionAllerubuster

MPI zone

Performance Visibility (MPI lamp)

Comfort Good’sleep Sleep Good’sleep Algorithm Upgrade, Extension

SensingSensor

Intelligente-ion

Sensor Intelligent

Convince Energy saving

We have 3 best USPs

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III. Offering Review

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1. New RAC Projects

• New premium line

• Unique aesthetics with Auto Roof Shutter & MPI lamp

• High EER & Quiet Operation

• Modified sub premium line

• New Reddish Black Mirror & Dark Gray Thin trim

• Improved Outdoor noise

• Modified standard line

• Upgrade Grille with Silver Decoration Band

• Improved Outdoor noise

Mont blancMont blanc

Vivace ’08 Vivace ’08

Neo ForteNeo Forte

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2. New RAC Introduction (Mont Blanc I)

Dust Free - Auto Roof Shutter

Fresh Air - MPI zone (MPI Lamp) - DNA Filter

ConceptConcept

Auto Roof Shutter

DNA Filter

Good’sleep II

MPI Zone

NewNewNewNew

NewNewNewNew

Selling PointsSelling Points

UpgradeUpgradeUpgradeUpgrade

’07 vs. ’08’07 vs. ’08

9K Inv’07 ’08

EERC 4.10 4.31

H 4.10 4.31

Noise 21dB 20dB

On-offLow

Ambient

C : 21~43℃

H : 0~24 ℃

C : 15~43℃H : -5~24

℃

First Model RTS : Jan 30th 2008

9/12K

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2. New RAC Introduction (Neo Vivace)

ConceptConcept

Selling PointSelling Point

Mirror

- Shadow Mirror - Auto Tilting Grille - Hidden Display

MPI Zone

Good’sleep II

Shadow Mirror

Catechine Filter

’07 vs. ’08’07 vs. ’08

’07 ’08

Design Black Mirror

ReddishBlack Mirror

Gray Thin Trim

First Model RTS : Jan 20th 2008

Trimless Reddish Black

Improved Inverter Noise Quality

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2. New RAC Introduction (Neo Forte)

ConceptConcept

Value Cool - Silver Spray Deco-band - Flat Grille - Different from Forte

Selling PointSelling Point

Good’sleep II

Stylish Flat Panel

Catechine Filter

Neo Forte InvNeo Forte Inv

First Model RTS : Jan 20th 2008

2 different Spec. - High EER model with Mont Blanc Outdoor Unit - Normal model with WW Outdoor

9K Inv’07 Normal Hi EER

EER

C 3.4 3.4 4.08

H 3.6 3.6 3.65

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2. New RAC Introduction (Forte Smart)

ConceptConcept

Selling PointSelling Point

Slim Solution

- Compact Type 9K - Family looking with Forte

Good’sleep II Installation Efficiency - Light Weight - Small dimension Loading Saving Ratio - 13% Loading Q’↑ (276 Unit / 40ft)

9K On Off’07 ’08

EERC 2.81 2.81

H 3.22 3.22

Noise 24dB 25dB

40feet(W/O Pipe)

240 276

First Model RTS : Feb 20th 2008

’07 vs. ’08’07 vs. ’08

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III. IMC Strategies

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Healthy LifeHealthy Life DesignDesign

Dust Free (Auto Roof shutter, EZ Filter)

MPI Zone

DNA Filter

Good Sleep II

Auto Roof-Shutter

High Glossy panel color

Blue LED MPI Lamp

Rounded body shape

Strengthening Health Features Design uniqueness

VS

1. Communication Theme Development (1)

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Need to divide the communication message to

Main & Supporting theme.

Healthy LifeHealthy Life DesignDesignoror

1. Communication Theme Development (2)

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Samsung AC’s design fit into your premium living area.

“THE NEW SAMSUNG AIR CONDITIONER

FITS INTO YOUR PREMIUM LIVING AREA & LIFE STYLE”

Fit into your life style.Fit into your premium living area.

( Superb Design)

1. Communication Theme – Stylish Design

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Samsung Split A/C offers new solutions for indoor air quality you living in.

“THE NEW SAMSUNG AIR CONDITIONER LINEUPS

GUARANTEE YOUR HEALTHY LIVING WITH MPI & MULTIPLE AIR PURIFING SYSTEM.

1. Communication Theme – Healthy Life

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Main MKT concept

Supporting concept

DesignDesign Healthy Life

Healthy Life

2. Campaign Strategy

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DesignDesign Healthy Life

Healthy Life

Look Feel&&

2. Campaign Strategy - Concept

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1. Divided two categories.

Category 1. Look: Talk about MB’s superb design.

Look Superb Samsung AC’s Design. Category 2. Feel : Telling the Samsung’s unique & innovative technologies.

Feel true refreshment with Samsung innovative technologies. 2. Matching all of marcom material’s tone & Manner: Look & Feel

2. Campaign Strategy

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Materials Detail Activity IMC mix selection guideline

Initiatives

HQ LocalHQ+

Local

Ads

TV Commercial

Draw customer’s attention and enhance brand awareness O

Print Ads- Printed advertisement material for lifestyle, interior, design Magazine

O

Outdoor- Outdoor banner at place with high traffic of Target segment.

- Concentrate on initial launching stage. O

PR

PR Film - Educational, promotional film for variety of events and shop demo.

O

Press Release

- Press kit develop and release.

- Generate customers’ interest mostly at initial launching stage through active Press launching event.

O

3. IMC Mix (1)

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Materials Detail Activity IMC mix selection guideline

Initiatives

HQLoca

l

HQ

+Local

BTL

Catalog/Leaflet

- Brochure or leaflet with product info. Such as Specification and features.

- Originally provided by HQ, localized and modified by local.

O

Sales Guide- Sales guide and learning materials for product education and presentation, with basic contents and animated movies.

O

POP/Demo Display

- POP provided from HQ (Factory side) for the first 3-6 months.

- Demo display or demo kit to highlight USP. O

Floor Salesman Education

- Floor salesmen training.

- Support buyers’ own training program (online & offline)O

On-line/

PVI

Microsite - A dedicated micro website for promotion (and events). O

PVI - Product basic information on HQ and local systems. O

Event

Sponsorship - Allied promotion with recognized place, house builders and so on. O

Trade Show / Road Show

- Dealer event or road show to draw initial attention from buyers’ side.

O

3. IMC Mix (2)

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Activities Delivery Date Deliverables Responsible Deadline Local

Customization

ATL

TV-CF - - Local - -

Printed Ad Early Oct Source CD HQ/Local Completed

Y

Outdoor - - Local - -

Pr film Early Nov Web/Source CD HQ Complete

d -

BTL

Sales Guide Early Oct E-mail / Web HQ Completed Y

Leaflet Early Oct E-mail / Web HQ/Local Completed Y

Catalog Early Oct Source CD/ Web HQ/Local Complete

d Y

PR Press Release - - Local - Y

3. IMC Mix (3)

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item Images Remark

Global Catalog Light Version

Completed

Full version

On Creation

Leaflets completed

Pocket Sales guide

completed

Print AD

Posters

completed

4. IMC Materials Output (1)

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item Images Remark

Global Sales Guide PPT

+

Package

Completed

POP On creation

Shop display Production

in progress

4. IMC Materials Output (2)

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item Images Remark

MB Catalog

Pocket Sales guide

Print AD

Data CD

(Floor Sales men training material

include)+

4. IMC Materials Output – Mont Blanc

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Appendix : Marketing Calendar

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EU Marketing Activity Calendar

Dec Jan Feb Mar April May June

ATL

BTL

Event

Training Floor Salesman, Promoter

ThemeSetting

Strategy & Making; Media plan, Budget,

Effect

TV, Radio, Printing

MakingPlan & Tool

Road Show

Shop Display

Dealer, Agent, Salesman

Send to Subsidiary Planning Tactics

November Pan Europe- Delegation Event → Dec / Jan Installer , Dealer Convention

Nov

A/CDeleg-ation

Dealer Invitation

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End of Document