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SHRI CHINAI COLLEGE OF COMMERCE AND ECONOMICSANDHERI (EAST), MUMBAI-400 069
BACHLOR OF MANAGEMENT STUDIES
PROJECT REPORT ON
“MARKETING STRATEGY OF SAMSUNG”
SUBMITTED BY
PINAK VARU TYBMS B (SEM. VI)
UNDER THE GUIDANCE OFPROF.SHIBU SINGH
SUBMITTED TO
UNIVERSITY OF MUMBAIACADEMIC YEAR 2012-2013
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DECLARATION
I PINAK P VARU, a student of T.Y.BMS Semester VI, during the academic year 2012-2013 studying at SHRI CHINAI COLLEGE OF COMMERCE AND ECONOMICS, hereby declare that the work done on the project entitled “MARKETING STRATEGY OF SAMSUNG” is true and original to the best of my knowledge.
DATE:-___________ ___________________________ SIGNATURE OF THE STUDENT
CERTIFICATE
I Prof. SHIBU SINGH, hereby certify that PINAK VARU of SHRI CHINAI COLLEGE OF COMMERCE AND ECONOMICS, of TY BMS has completed his project on “MARKETING STRATEGY OF SAMSUNG” during the academic year 2012-2013. The information submitted is true and original to the best of his knowledge.
_______________________ SIGNATURE OF PROJECT GUIDE _________________________ SIGNATURE OF PRINCIPAL
_______________________SIGNATURE OF EXTERNAL EXAMINER
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ACKNOWLEDGEMENT
During the perseverance of this project, I was supported by different people, whose names if not mentioned would be inconsiderate on my part. I would like to extend my sincere gratitude and appreciation to Prof. SHIBU SINGH who initiated me into the study of “MARKETING STRATEGY OF SAMSUNG”.
It was indeed been a great experience working under her during the course of the project for her invaluable advice and guidance provided throughout this project. I also owe my sincere gratitude to Dr. Mrs. MALINI JOHRI, principal of our college.
I would also like to give my sincere gratitude to all my college librarian staff because of whom I am able to complete my dream project.
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INDEX
CONTENT PG.NO
COVER PAGE
DECLARATION
CERTIFICATE
ACKNOWLEDGEMENT
EXECUTIVE SUMMARY
I
II
II
III
IV
TABLE OF CONTENT
Chapter
No.
Particulars Page
No.1. INTRODUCTION 5-9
2. RESEARCH METHODOLOGY 10
3. COMPANY PROFILE 11-16
4. ABOUT SAMSUNG 17-46
5. AFTER SALES SERVICE AND FUTURE
PROSPECTS
47-59
6. FINDINGS AND SUGGESTIONS 60-65
7. CONCLUSION 66
8. QUESTIONNAIRE 67-68
9. BIBLOGRAPHY 69
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Chapter 1
INTRODUCTION
1.1 Definition
1.2 Developing Marketing Strategy
1.3 Types of strategies
1.4 Strategic Model
1.5 Real-Life Marketing
INTRODUCTION
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1.1 Definition
Marketing strategy is a process that can allow an organization to concentrate its limited
resources on the greatest opportunities to increase sales and achieve a sustainable
competitive advantage.
1.2 Developing a marketing strategy
Marketing strategies serve as the fundamental underpinning of marketing plans
designed to fill market needs and reach marketing objectives. Plans and objectives are
generally tested for measurable results. Commonly, marketing strategies are developed as
multi-year plans, with a tactical plan detailing specific actions to be accomplished in the
current year. Time horizons covered by the marketing plan vary by company, by industry,
and by nation, however, time horizons are becoming shorter as the speed of change in the
environment increases. Marketing strategies are dynamic and interactive. They are
partially planned and partially unplanned.
Marketing strategy involves careful scanning of the internal and external
environments. Internal environmental factors include the marketing mix, plus
performance analysis and strategic constraints. External environmental factors include
customer analysis, competitor analysis, target market analysis, as well as evaluation of
any elements of the technological, economic, cultural or political/legal environment likely
to impact success. A key component of marketing strategy is often to keep marketing in
line with a company's overarching mission statement. Besides SWOT analysis, portfolio
analyses such as the GE/McKinsey matrix or COPE analysis can be performed to
determine the strategic focus.
Once a thorough environmental scan is complete, a strategic plan can be constructed to
identify business alternatives, establish challenging goals, determine the optimal
marketing mix to attain these goals, and detail implementation. A final step in developing
a marketing strategy is to create a plan to monitor progress and a set of contingencies if
problems arise in the implementation of the plan.
1.3 Types of strategies
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Marketing strategies may differ depending on the unique situation of the individual
business. However there are a number of ways of categorizing some generic strategies. A
brief description of the most common categorizing schemes is presented below:
Strategies based on market dominance - In this scheme, firms are classified
based on their market share or dominance of an industry. Typically there are four
types of market dominance strategies:
o Leader
o Challenger
o Follower
o Nicher
Porter generic strategies - strategy on the dimensions of strategic scope and
strategic strength. Strategic scope refers to the market penetration while strategic
strength refers to the firm’s sustainable competitive advantage. The generic
strategy framework (porter 1984) comprises two alternatives each with two
alternative scopes. These are Differentiation and low-cost leadership each with a
dimension of Focus-broad or narrow.
o Product differentiation (broad)
o Cost leadership (broad)
o Market segmentation (narrow)
Innovation strategies - this deals with the firm's rate of the new product
development and business model innovation. It asks whether the company is on
the cutting edge of technology and business innovation. There are three types:
o Pioneers
o Close followers
o Late followers
Growth strategies — in this scheme we ask the question, “How should the firm
grow?” There are a number of different ways of answering that question, but the
most common gives four answers:
Horizontal integration
Vertical integration
Diversification
Intensification
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A more detailed scheme uses the categories
Prospector
Analyzer
Defender
Reactor
Marketing warfare strategies - This scheme draws parallels between marketing
strategies and military strategies.
1.4 Strategic models
Marketing participants often employ strategic models and tools to analyze marketing
decisions. When beginning a strategic analysis, the 3Cs can be employed to get a broad
understanding of the strategic environment. An Ansoff Matrix is also often used to
convey an organization's strategic positioning of their marketing mix. The 4Ps can then
be utilized to form a marketing plan to pursue a defined strategy.
There are many companies especially those in the Consumer Package Goods (CPG)
market that adopt the theory of running their business centered on Consumer, Shopper &
Retailer needs. Their Marketing departments spend quality time looking for "Growth
Opportunities" in their categories by identifying relevant insights (both mindsets and
behaviors) on their target Consumers, Shoppers and retail partners. These Growth
Opportunities emerge from changes in market trends, segment dynamics changing and
also internal brand or operational business challenges. The Marketing team can then
prioritize these Growth Opportunities and begin to develop strategies to exploit the
opportunities that could include new or adapted products, services as well as changes to
the 7Ps.
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1.5 Real-life marketing
Real-life marketing primarily revolves around the application of a great deal of common-
sense; dealing with a limited number of factors, in an environment of imperfect
information and limited resources complicated by uncertainty and tight timescales. Use of
classical marketing techniques, in these circumstances, is inevitably partial and uneven.
Thus, for example, many new products will emerge from irrational processes and the
rational development process may be used (if at all) to screen out the worst non-runners.
The design of the advertising, and the packaging, will be the output of the creative minds
employed; which management will then screen, often by 'gut-reaction', to ensure that it is
reasonable.
For most of their time, marketing managers use intuition and experience to analyze and
handle the complex, and unique, situations being faced; without easy reference to theory.
This will often be 'flying by the seat of the pants', or 'gut-reaction'; where the overall
strategy, coupled with the knowledge of the customer which has been absorbed almost by
a process of osmosis, will determine the quality of the marketing employed. This, almost
instinctive management, is what is sometimes called 'coarse marketing'; to distinguish it
from the refined, aesthetically pleasing, form favored by the theorists.
Chapter 2
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Research Methodology
Marketing Research
Marketing research is the function, which links the consumer, customer and public
to the marketer through information.
Information used to identified and define marketing opportunities and problems:
generate, refine and evaluate marketing action, monitor marketing performance, and
improve understanding of market as a process.
Marketing strategies of Samsung vary in their specific objectives. They may be
used to correct new customer, to reward loyal customer’s ad to increase the
repurchase rates of occasional users. Sales promotion usually targets brand switchers
because non-users of other brands do not always notice a promoting..
Sources of Data
In this study the for most data collection instrument used is the questioners method.
The questioner has been designed with both open ended and close ended questions. Apart
from this, the research instrument consists of primary and secondary data collected for the
study.
Primary DataHere first hand information is obtained by distributing printed questioners to
the marketing executives of the company. Data was also obtained from the observation
and interviews techniques adopted by the researchers. Moreover, information was
disseminated by the departmental heads.
Secondary Data Here the information is obtained from the brochure of Samsung group , books,
websites, newsletter, generals, magazines, newspaper, etc.
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Chapter 2
COMPANY PROFILE
2.1 The Samsung Philosophy
2.2 Mission of Company
2.3 Values
2.4 Vision 2020
2.5 Key Products
2.6 Competitors Of Samsung
COMPANY PROFILE
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2.1 The Samsung Philosophy
At Samsung, they follow a simple business philosophy: to devote their talent and
technology to creating superior products and services that contribute to a better global
society.
Every day, their people bring this philosophy to life. The leaders search for the brightest
talent from around the world, and give them the resources they need to be the best at what
they do. The result is that all of its products—from memory chips that help businesses
store vital knowledge to mobile phones that connect people across continents have the
power to enrich lives. And that’s what making a better global society all is about.
2.2 Mission of Company
“Everything we do at Samsung is guided by our mission: to be the best “digital-
company”.
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2.3 Values of Samsung
We believe that living by strong values is the key to good business. At Samsung, a
rigorous code of conduct and these core values are at the heart of every decision we
make.
People
Quite simply, a company is its people. At Samsung, we’re dedicated to giving our
people a wealth of opportunities to reach their full potential.
Excellence
Everything we do at Samsung is driven by an unyielding passion for excellence—and
an unfaltering commitment to develop the best products and services on the market.
Change
In today’s fast-paced global economy, change is constant and innovation is critical to
a company’s survival. As we have done for 70 years, we set our sights on the future,
anticipating market needs and demands so we can steer our company toward long-
term success.
Integrity
Operating in an ethical way is the foundation of our business. Everything we do is
guided by a moral compass that ensures fairness, respect for all stakeholders and
complete transparency.
Co-prosperity
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A business cannot be successful unless it creates prosperity and opportunity for
others. Samsung is dedicated to being a socially and environmentally responsible
corporate citizen in every community where we operate around the globe.
2.4 Vision 2020
As stated in its new motto, Samsung Electronics' vision for the new decade is, "Inspire the
World, Create the Future."
This new vision reflects Samsung Electronics’ commitment to inspiring its communities
by leveraging Samsung's three key strengths: “New Technology,” “Innovative Products,”
and “Creative Solutions.” -- And to promoting new value for Samsung's core networks --
Industry, Partners, and Employees. Through these efforts, Samsung hopes to contribute to
a better world and a richer experience for all.
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As part of this vision, Samsung has mapped out a specific plan of reaching $400
billion in revenue and becoming one of the world’s top five brands by 2020. To this
end, Samsung has also established three strategic approaches in its management:
“Creativity,” “Partnership,” and “Talent.”
Samsung is excited about the future. As we build on our previous accomplishments, we look
forward to exploring new territories, including health, medicine, and biotechnology. Samsung
is committed to being a creative leader in new markets and becoming a truly No. 1 business
going forward.
2.5 Key Products
o LED TV Premium Design Monitor
o NotePC SPH-M800 Instinct
o SGH-A867 Eternity SGH-A877 Impression
o HZ15W TL320
o Full HD Camcorder MP3 Player
o Color Laser Printer Microwave
o Refrigerator 8M-pixel CIS (CMOS Image Sensor)
o 800MHz Mobile AP Mobile DDISmart Card IC
o 2Gb DDR3 SDRAM 1Gb GDDR5 SDRAM
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2.6 Major Competitors Of Samsung
o LG
o VIDEOCON
o ONIDA
o SONY
o SANSUI
o PANASONIC
o THOMPSON
o WHIRLPOOL
o GODREJ
o DELL
o NOKIA
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Chapter 3
SAMSUNG
3.1 Samsung in India
3.2 Samsung the Future
3.3 Effective Advertisement
3.4 SWOT analysis
3.5 Marketing strategy of Samsung
3.6 After sales service
3.7 Future prospects
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3.1. Samsung in India
Samsung India is the hub for Samsung’s South West Asia Regional operations. The South
West Asia Regional Headquarters looks after the Samsung business in Nepal, Sri Lanka,
Bangladesh, Maldives and Bhutan besides India. Samsung India, which commenced its
operations in India in December 1995, today enjoys a sales turnover of over US$ 1Bn in just
a decade of operations in the country.
Headquartered in New Delhi, Samsung India has a network of 19 Branch Offices located all
over the country. The Samsung manufacturing complex housing manufacturing facilities for
Color Televisions, Color Monitors,
Refrigerators and Washing Machines is located at Noida, near Delhi. Samsung ‘Made in
India’ products like Color Televisions, Color Monitors and Refrigerators were being exported
to Middle East, CIS and SAARC countries from its Noida manufacturing complex. Samsung
India currently employs over 1600 employees, with around 18% of its employees working in
Research & Development.
3.2. SAMSUNG: The Future
From its inception as a small export business in Taegu, Korea, Samsung has grown to
become one of the world’s leading electronics companies and a leading global digital
technology brand. In 2009, Samsung made more than 100 trillion won in revenue and 10
trillion won in operating profit. Its steady ascent in brand value has placed Samsung shoulder
to shoulder with the most trusted global companies.
In 2010, Samsung achieved a remarkable 60 per cent growth rate here, reporting a sales
turnover of $3.5 billion, contributing to the company’s $135.8 billion in global revenues,
perhaps the most successful in Samsung’s history. As the current number 1 provider of LED
and LCD TVs, Samsung is challenging the lead position in vital categories such as mobile
phones and consumer durables etc., to emerge as a $10 billion player by 2013 in India.
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Samsung’s strategy hinges on growing and developing the market to increase its play across
segments and to emerge as the technological leader as well as the consumers' most preferred
brand. In this context the company has made strong investments in enhancing its
manufacturing presence with $325 million so far and plans to invest an additional Rs. 350
crore by 2015. The company is aiming a 40 per cent growth this year with profits of $4.9
billion.
They already have over 20 per cent market share in the net book category and are looking at
doubling it in the NotePC segment this year. Based on their balanced portfolio across our
consumer electronics and mobile and IT portfolios, they are looking at achieving a 40 per
cent sales growth over our sales of US$ 3.5 billion achieved last in 2010.Samsung is looking
to ramp up its India presence with increased manufacturing capacity, larger retail reach and
40-45 new models this year. Samsung entered the market with about 10 per cent market share
last year and ended the year at 22 per cent in terms of value. Samsung is looking at a similar
growth this year aided by our strategy to give consumers a choice in terms of new innovative
products.
On the R&D front, Samsung has a strong R&D presence – 18 R&D Centers, including two
dedicated R&D units in India, employing over 44000 people globally and investing over 8
per cent of global sales in R&D processes to foster innovation. Samsung has a key
commitment to spur R&D activities in India and in many cases India serves as the lab for
innovation of products and services for other global markets.
Samsung has inked pact with as many has 890 application development companies to grab a
40 per cent of the fast growing Smartphone market in India.
3.3 Effective Advertisement
3.3.1. Effective Advertisement and Consumer Attitude
The following model exemplifies the attitude or response of a consumer to an
advertisement and a glance through the following pictorial presentation would simplify
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Increase positive product attribute attitudeTransform use
experience
Advertising -EvokedPositiveAffectiveResponse
Increases Attitude towards the Advertisement
Increase Evaluation of Advertisement characteristics
Decreases amount of total thinking
Raises product attribute valuation Increases ratio of positive to negative thoughts
our understanding of the advertisement’s effects on thinking response and it also
magnifies the peripheral and associative effect of an advertisement.
A Model of the Feeling – Response to Advertisement
A rather simple explanation of how a feeling – response advertisement works is that
people like it or dislike it is an advertisement, and this attitude gets transformed to or
associated with the product in the advertisement. There is thus the potential for a
direct casual link between the attitude towards an advertisement and the attitude and
behavior towards a product. As noted in the diagram, feelings engendered by an
advertisement can create or influence an attitude towards the advertisement directly,
as well as indirectly, through assessment of the quality of the advertisement’s
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exceptional characteristics. In fact, some researchers believe that attitude to the
advertisement really has two different components; an effective one, reflecting the
direct effect of the feelings evoked by the advertisement, and a second more cognitive
one, reflecting how well is the advertisement made and how useful is the
advertisement.
It is important, in understanding how an advertisement ultimately affects consumer
attitude; to see what kind of attitude people develop toward the advertisement itself. If
the feeling that the advertisement creates are positive, and if the way the
advertisement is made is evaluated favorably, then the advertisement should elicit a
favorable attitude towards itself and vice-versa.
In respect of the viewers of the advertisement, the matter of concern is that, how far
does it influence them and how should it influence them in the right direction.
Viewers of advertisement, who are the mass, have got their own outlook and their
own way of understanding. The customers are to depend on the advertisements, only
till he gets the product. After buying and using the product for the first time, comes
the response to the advertisement. This can be in three different levels viz.
At the first level, when the consumers are fully satisfied, they will respond favorably
to use the product continuously, subject to the price and the availability of the
product. Continuous advertisement in various media further influences the listeners to
build up a positive attitude towards the product. This leads to the change in the
consumption behaviour of the society, which leads to a great level of social and
cultural change among the people in general.
The next level is the stage of getting dis-satisfaction by the consumers on the use of
the product, on persuasion by the advertisement. This will lead to consumer resistance
to the product. The dissatisfaction at this state means that the quality or the contents of
the utility value of the product might not have reached the height expectations created
by the advertisement. If the product or service at this stage is able to satisfy at least a
section of the people, then it can service higher and thus will serve as forbidding
factor. As far as the attitude formation is concerned, this stage can be considered as a
formative stage. But if the product fails to reach, not even a section of the society in
total, it will lead to the product withering away from the market in course of time.
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The third situation leads to a stage, when the viewers understanding that the
advertisement misguides them or giving a wrong information deliberately. Under this
situation the viewer loses confidence on the advertiser, producer and the seller. This
leads to a negative attitude on the marketing of the products of the company in
general. The defects are to be brought to the knowledge of the producer to give a
chance for him to correct the mistakes, if it is so. When there is no proper response for
this complaint, then it leads to earning discredit from the customers.
3.3.2. An Ideal Consumer Feeling
In order to ensure that the advertisements reach the target consumers in a most effective
way and begets right response from, it has to be ensuring that such advertisements are
presented in the right way. The following steps on the part of consumer may ensure that
the advertisements are on the right track.
Getting attracted towards the advertisements.
Listening and observing the contents of the advertisements in full.
Continuous watching of the same over a period.
Comparing the advertisements of similar products.
Learning more about the product, the producer and the advertiser.
Making a trail purchase as follow up activity.
Using the product as per the instructions.
Assessing the level of utility of the product individually.
Assessing the level of utility derived with other similar consumers.
Comparing the level of utility of the product with similar products.
Decision-making regarding the continuous use of the product, and to recommend to others, positively or negatively.
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If not satisfied with the product discrepancy regarding the quality and the characteristics of the product are to be taken to the knowledge of the producer and the advertiser.
3.4 SWOT ANALYSIS
o Strength
o Weakness
o Opportunity
o Threat
Strength
Accessory to necessary
Air-conditioner are no longer perceived to be a item of luxury
Advancement of technology which gives companies ability to
introduce new products and new product features
High growth key driver being urban and rural
Government policies in favor of infrastructure development and
reduction in excise duty and so on
Weakness
Supply continuous to outstrip demand.
Demand cyclical and seasonal
Volatile performance of the agricultural sector has negative impact on
demand. The sectors performance is highly dependent on monsoon
and reforms which has filled often.
Opportunity
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Diversification and Developing new products for new market.
Easy availability of finance has stimulated consumers to buy durables.
Changes in Consumer outlook from spend now-save later mentality
leading to high disposable income
Threat
Dozen companies operating in the white goods segment. Prices would
continue to remain depressed and margins will be under pressure.
Threats of cheaper imports from China and other South East Asian
countries
3.5 Marketing strategy of Samsung
3.5.1 Background
3.5.2 Current Scenario
3.5.3 Demand/Supply
3.5.4 Consumer Durable: Urban and rural India
3.5.5 Success Factor for Consumer Durable Industry
3.5.6 Consumer Outlook
3.5.7 Scenario in the Consumer Durable Sector
3.5.8 Major Players
3.5.9 Entry Of Samsung In India
3.5.10 Market Share
3.5.11 Marketing Strategy of Samsung Products
RefrigeratorWashing MachineAir Conditioners
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Micro-OvensTelevisionsDVDSamsung Mobiles
3.5.1 Background
Prior to liberalization, the consumer durable sector in India was restricted to a handful
of domestic players like Godrej, Alwyn, Kelvinator, Voltas. Together, they control
nearly 90% of the market. They were first superseded by the players like Videocon in
the early 1990, who invested in brand building and in enhancing distribution and
service channels. Then with the liberalization came aspect of foreign players from LG
Electronics to Sony to Aiwa.
Rs.23000cr consumer durable industry can be divided in to two types, consumer
electronics and consumer utilities. Consumer electronics is basically is entertained
system like Television, VCR’s, and Audio System and Home theater systems.
Consumer utilities are other household appliances like Refrigerator, Washing
Machine, Air-Conditioners, food processors, and vacuum cleaner. On most third
world countries, consumer durables like Refrigerator and Television are most popular.
Out of this, the television segment is undoubtedly the largest segment. Products in the
white good segments come next to the CTV’s in the purchasing hierarchy of the
Indian consumer.
Over the years demand of consumer durables has increased with rising income levels,
durable double income families, changing lifestyle, availability of credit, increasing
consumer awareness and introduction of new model. Products like Air-Conditioner
are no longer perceived as luxury product, while TV draws its share from both Urban
and Rural refrigerator and washing machine are still inclined towards Urban.
3.5.2 Current Scenario
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Most of the segments in this sector are characterized by intense competition,
emergence of companies (especially MNCs), introduction of state-of-the-art models,
price discounts and change schemes. MNCs continue to dominate the Indian
consumer durable segment, which is apparent from the fact that these companies
command more than 65% market share in the color television (CTV) segment. The
Indian television industry has a size of around Rs 96 billion, comprising color
television (CTV) of Rs 91 bn and B&W TV market of Rs 5 bn and other markets
(primarily video equipment) of Rs. 4-6 billion. In terms of volumes, the CTV market
was estimated at 9.05 million units and the B&W TV market at 2 million units during
calendar year 2011. Refrigerators constitute the second largest product segment
within the Indian consumer durables sector in India, with an estimated annual
turnover of Rs 39 bn during FY2011 with an estimated sale of 4.1m units. The size of
the room Air-conditioners industry is estimated at 1.1 m in volume terms, and Rs 24
bn in value terms. Washing machines sales in India aggregated an estimated 1.37m
during FY2013 or around Rs 11 bn in value terms
3.5.3 Demand/Supply
Supply growth is high across all the segments. But the organized sector has gained
substantial market share from the unorganized segment in recent years. However,
there are fewer players in segments like dishwashers and vacuum cleaners.
Cyclical and seasonal-Demand is high during festive season and is generally
dependent on good monsoons. There are certain factors in the consumer durables
industry, which are considered as demand drivers. They are:
o The degree of distribution network in the market.
o The advertising and marketing strategy adopted by the players in the industry.
o The brand image of the product as perceived by the consumer.
o The technology used by the company viz. state-of-art technology or an older
version.
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o The ability of the company to introduce newer products and newer product
features The capability of the company to service its products 'The discount
schemes and consumer finance facility available
o The market positioning of the product
o The cost competitiveness and pricing strategy of the company
o The financial strength of the players
3.5.4 Consumer Durable: Urban and rural India
In the top 5 million households, in affluence terms, 96 percent of households have
color televisions, 82 percent own refrigerators, and 44 percent own washing
machines.
In the next 7 million households, penetration of color TVs is 69 percent, 58
percent for refrigerators, and 19 percent for washing machines.
In the next tier of affluent households - numbering approximately 12 million - 50
percent own color TVs, 35 percent own refrigerators, and 8 percent own washing
machines.
Rural India too is set to see an increase in the number of high-income households. An
additional 4.6 million high-income households and 13 million middle-income
households by 2011 to 2012 will take the number of rural households from 122.8
million to 139 million. This constitutes a huge opportunity for marketers - 60 million
households or 300 million consumers with the capacity to buy consumer appliances
and other products is an attractive market for any global player. And it seems that
global appliance players who have established brands in the Indian market are likely
to benefit from this great big push towards consumerism.
3.5.5 Success Factor for Consumer Durable Industry
Indian consumer durables industry is going through a consolidation phase with MNC
companies going in for strategies to increase market share. Certain success factors for
this industry are identified follows:
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1. Technology: Rising competition has resulted in major competitors introducing
technologically superior products at competitive prices. This means the technology
input is gaining more and more importance. In this regard, the large MNC players
score over their Indian counterparts as they can always source technology from their
parents. On the other hand, Indian companies rely on the outside sources for their
technology requirements
2. Knowledge of the local market: Indian consumer durables market is different
from other markets. Hence understanding these peculiarities is important for the long-
term survival. For example, Samsung launched the 'Super Horn" brand after it
discovered that Indian consumers prefer loud noise. Indian companies are better
placed in this regard as they know the market pretty well.
3. Strong distribution network: Tough competition means that a proper mindshare
of the consumer has to be maintained and the product has to be made visible.
Volumes in this business are narrow and profitability comes from volumes. To
achieve volumes, deep penetration of the market is necessary. Indian companies score
a point here as being in the market for a longer time; they have developed strong
distribution channels.
4. Good brand image: Perception of a particular brand plays an important role in
purchase decision. A typical Indian consumer looks for value for money when he
makes purchase of white goods, as the price involved is significant and unlike
developed markets, Indians do not have the buy, use and throw mindset. Hence,
consumer also looks for reliability of the product. All this is conveyed through strong
brand awareness.
3.5.6 Consumer Outlook
The Change in Consumer 11 India is a country in a hurry - changing continuously and
also trying hard to keep pace with these changes. The 'me too' syndrome is no longer
valid as consumers seek customized products. 'The Indian consumer consumer's
evolution in the last decade has thrown up some interesting trends:
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Consumer base becoming younger. Nearly a third of the country's population is
under the age of 14 years.
Kids graduating from pester power to decision makers.
People with buying power living longer and developing distinct health needs.
Multi-tasking consumers fighting paucity of time and new consumer trends.
Huge increase in High Income Groups and spend now-save later mentality leading
to high disposable income.
Consume wants to be treated as an individual not as part of a large physical mass
and the consumer looks for a 'post buy' relationship to enhance the value of her
brand decision making.
3.5.7 Scenario in the consumers Durables sector
Prior to liberalization, the Consumer Durables sector in India was restricted to a
handful of domestic players like Godrej, Allwyn, Kelvinator and Voltas. Together,
they controlled nearly 90% of the market. They were first superceded by players like
BPL and Videocon in the early 1990s, which invested in brand-building and in
enhancing distribution and service channels. Then, with liberalisation came a spate of
foreign players from Samsung to LG Electronics to Sony to Aiwa.
Both rising living standards, especially in urban India, and easy access to consumer
finance have fuelled the demand for consumer durables in the country. Also, the entry
of a large number of foreign players means the consumer is no longer starved for
choice. But this has also resulted in an over-supply situation in recent times as growth
levels have tapered off.
3.5.8 Major players
The major players in the consumer durables industry, operating in different sectors
such as air conditioners, washing machines, refrigerators & television include:
Blue Star Ltd., Mirc Electronics Ltd., Whirlpool of India Ltd., Philips (India) Ltd.,
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BPL Ltd., Sony Corporation Ltd., Samsung India Ltd., LG Electronics India Ltd.,
Videocon International Ltd.
3.5.9 Entry of Samsung in India
Emerging Markets (EMs) with large consumer bases and untapped demand constitute
the major growth opportunities for the multinationals and global companies.
However, not all companies are successful in establishing a foothold, leave alone
operating profitably, in such markets. For most, it takes years of struggle before they
can even breakeven. Marketing is difficult in such EMs because of little or no market
data, non-existent or poorly developed distribution systems, lack of regulatory
discipline, and where regulations exist, a propensity to change them frequently and
unpredictably.
Samsung entered India in December 1995 as a 51:49 joint venture with Reasonable
Computer Solutions Pvt. Ltd (RCSPL), owned by Venugopal Dhoot of the Videocon
group. In 1998, RCSPL diluted its stake in Samsung to 26% and in November 2002,
the FIPB cleared Samsung's proposal to buy RCSPL's remaining (23%) stake. With
Samsung buying the total stake of RCSPL, it became a wholly-owned subsidiary of its
South Korean parent company. In spite of being a latecomer to India, Samsung was
able to become one of the top consumer electronics companies in India, an emerging
market was due to a combination of several aspects: Product innovation, Promotion,
Pricing, distribution and Positioning; wherein Samsung primarily focused at.
The three-pronged objectives of Samsung are: -
1) Strengthening their channel relationships,
2) Enhancing their product portfolio and
3) Creating the best service infrastructure, to gain more mindshare."
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Positioning
Many multinational companies adopt a “less developed countries” mindset, assuming
that these markets are at an earlier stage of the same development path followed by
the developed countries. To take the example of the automobile industry, Ford and
GM launched their outdated models like Ford Ikon and Opel Astra in the Indian
market. When these models did not sell well, the companies changed course and
decided to launch newer models in India. In the case of Samsung, the company from
the very beginning launched its whole range of high technology products, which
included CTVs, audio and video products, information technology products, mobile
phones and home appliances in India. It introduced products such as the ‘Bio’ range
in CTVs, high-powered Woofer series of colour televisions in 21-inch and 29-inch
conventional and 21-inch flat TV segments. And not to forget the lateset DNie
television.
By positioning itself on the technology platform, Samsung was able to differentiate
itself from its competitors. Differentiation today is the key for a brand to be preferred
by the consumers, when there are so many other brands within the same product
category. Without differentiation, its loyal customer base cannot be created or
sustained. But to be a true differentiator, a company must provide features that are
meaningful to customers. Which is what exactly Samsung has been doing.
Products
Samsung’s product range in India includes CTVs, video products, information technology
products, mobile phones and home appliances. Its product range covers all the categories
in the consumer’s electronics and home appliances. According, to the analyst’s wide
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product range of Samsung is one of the main reasons for its success in the Indian market.
The wide range products are as follows: -
Home appliance
Microwave Ove
Refrigerator
Air Conditioner
Washing Machine
TV, video & audio
DVD Player
Camcorder
Audio
Home Theater
Digital Audio Player
Digital Still Camera
Mobile Phones
Information technology products
Note PC
HDD
CD Rom & DVD Rom Drive
Monitors
Laser Printers & Laser Based MFPs
Samsung by launching innovative products and using proprietary technology was able to
gain market share. Samsung has therefore set up Samsung India Software Centre (SISC)
and Samsung India Software operations unit (SISO) for software development at Noida
and Bangalore respectively. While the Samsung India Software Centre in developing
software solutions in Samsung’s global software requirements for hi-end television like
Plasma and LCD TVs. SISO is working on major projects for Samsung Electronics in the
area of telecom: wireless terminals and infrastructure, Networking, SoC (System on Chip)
Digital Printing and other multimedia/digital media as well as application software. In
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addition to working on global R&D projects, SISO is also helping Samsung India’s
CDMA business by focusing on product customization for the Indian market.
3.5.10 Market share
Product Samsung's
global M/S
Competitors M/S Year
DRAM 40.4% Hynix 19.8% Q3 2010
NAND Flash 40.4% Toshiba 33.1% Q2 2010
Large-size LCD Panel
(revenue)
26.0% LG Display 25.9% Q3 2010
Active-Matrix OLED 97% LG Display, AUO 1~3% 2010
Lithium-ion battery 18.7% Sanyo 19.4% Q1 2010
LCD Monitor 18.0% Dell 12.8% 2009
Hard disk drive 9% Seagate
Technology
31% Q4 2009
Television sets
(LDC, PDP, CRT, LED)
17.2% LG Electronics 14.8% Q3 2009
Mobile phone 21.0% Nokia 23.4% Q3 2010
Digital camera 11.8% Sony 17.4% 2010
3.5.11 Marketing Strategy of Samsung Products
Product Features
To sell a consumer durable product a company has to provide unique features i.e. features
which other companies are not able to provide. Samsung has been using the same strategy
to boost their sales. Samsung provides its consumers with wide range of products with
unique features.
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For example, Samsung was the only company offering 1000 watts PMPO sound output in
the 21-inch flat TV segment. It also introduced a new 5.5 kg, top loading fully automatic
washing machine with features like ‘saree course’ keeping in mind that the majority of
the Indian women wear sarees.
Refrigerator
Bio Ceramic Technology (Bio Fresh Refrigerators)
BIO FRESH prevents evaporation of moisture, cell activation; supports antibacterial
function and also prevent the alteration of proteins. This keeps the food fresher for a
longer time. At the heart of Bio-Fresh refrigerators is Bio Ceramic technology.
Ceramics form a part of the raw materials used in the manufacturing of the Vegetable
compartment. Ceramics have the unique property of emitting 'Far Infrared Rays'
(FIR). The FIR helps retain the moisture content in the vegetables, fruits and other
natural products as they are in the natural resonant frequency of water molecules. The
'FIR', in combination with technologies like the Bio-Deodorizer, Dynamic Super X
Flow cooling system with i-cool and Humidity Controller makes the Samsung Bio-
Fresh refrigerator one of the most unique products in the Indian market today.
Bio-Vegetable Box is made of the newest Bio-Ceramic material. Bio-Ceramic
material radiates far-infrared rays, which help retain the moisture content in
vegetables, fruits and other natural products, keeping them rich in nutrients and
essential vitamins for a longer period of time.
Super X Flow technology
The Samsung 250 NMB incorporates the Dynamic Super X Flow technology. This
technology sets up a smart cold air distribution system to maintain an even
temperature throughout the refrigerator! This effectively achieves three clear benefits:
Even Temperature, Quick Cooling and Energy Savings.
Samsung's Twin Cooling System
Samsung's Twin Cooling System controls and generates cooling air for the
refrigerator and freezer independently with two separate evaporators and precise
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electronic control, thus maintaining each compartment at their optimal cooling
conditions.
This results in a more efficient refrigerator with powerful performance!
Electricity Consumption Comparison
These features reduce energy consumption by 30%, compared to previous models,
with a high efficiency compressor and better insulation (A class: ISO standard)
Another Freezer in Refrigerator Compartment
The Twin Cooling System allows the Cool Select Zone to maintain -5ºC (Soft Freeze
mode) in the refrigerator compartment. While food stored in the freezer is not easy to
handle, the Soft Freeze mode sets the temperature low enough for easy slicing and
allows medium-term storage. This is only possible by the Twin Cooling System.
Washing Machine
Torando Pulsator
SUPER DRY: -Samsung introduced India's first Semi Automatic Washing machine
with a SUPER DRY Feature. The SUPER DRY Feature provides a 10 minute Spin
Dry Timer, which gives you the power to ensure that your clothes get the BEST
POSSIBLE DRYING. SUPER DRY is great value; especially for the Monsoon and
winter months, when clothes don't dry easily. This powerful feature is available on the
latest models launched recently - WT9300, WT9200, and WT7800. While all other
brands will provide the standard 5 minutes Spin Dry Timer, these models give you
EXTRA DRYING for full 10 minutes.
I-CONTROL SYSTEM:- The Samsung Washing technology is designed to put you in
control of the washing process, and the machine action. Samsung Washing Machines
are packed with an array of incredible features that come together to make the I -
control system. These include the ‘ECO Wash - that saves water and detergent’,
‘Child Lock - To limit small children with tampering settings and getting hurt’, ‘Auto
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Restart - that saves you the bother of restarting the washing machine each time the
power fails’, ‘Memory backup- enables the washing machine to remember
programmed wash cycles and settings’, ‘Delay Start- To enable you to time the
washing machine with your water supply and other chores’ and ‘Fuzzy Logic - that
makes the washing machine intelligent to adjust automatically to wash loads, water
and detergent levels’ etc. These 6 amazing technologies come together to put you in
total control and command of the washing machine and the wash process
HYDROJET WASHING TECHNOLOYG: Samsung Hydrojet gives you a
combination of three powerful washing actions: 1) Waterfall Flow: Strong flow of
water that streams down from the top. Pushing heavy and light clothes towards the
pulsator. 2) Centre Jet: A strong gush of water formed right at the center of the
washing machine, forcing the dirt out of clothes. This also ensures that the clothes do
not get entangled at the center.3) Water Pores:- Saves water and detergent and washes
clothes from all sides.
BIO WASH TECHNOLOYG: Clothes washed in Samsung Washing machines are not
only dirt free, they are also 'germ free'. Samsung has developed this unique Bio-Wash
Technology to ensure just that. The Bio-Pulsator is made from some percentage of
Bio - Resin, which destroys germs and keeps the environment inside the washing
machines, pure and germ free, wash after wash.
Air conditioners
Turbo power: {BRINGS INSTANT RELIEF FROM HEAT}
The Turbo function makes the AC operate under full power for 30 minutes,
irrespective of the set temperature, which leads to quick change of the room
temperature, instantly bringing the air-conditioning comfort in the room. Turbo
operates faster than the conventional system. The new compact range of Samsung
Window ACs not only occupies lesser window space but also is more aesthetically
appealing.
Quick power optimizer: {ENSURES LOW ELECTRICITY BILLS}
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The Samsung Split Air conditioners 5-Step Heat Exchangers have 122% larger
surface area. Samsung Window Air conditioners are equipped with a 3-row cooling
coil and L bent condenser coil that provide a larger surface area helping the
refrigerant to dissipate heat faster. This results in faster chilling and lesser strain on
the compressor resulting in lower electricity bills.
Micro Oven
Bio Ceramic Technology: Only Samsung Microwave Ovens come with a unique Bio
Ceramic Enamel coating. Bio ceramic enamel produces less oxidation, which helps
retain essential vitamins while cooking. The ceramic enamel retains 2.5 times more
heat than stainless steel, leading to faster cooking.
High scratch resistance: Bio Ceramic Enamel’s durability and protective qualities
make it far more scratch resistant than other microwave interiors. When scratched
with equal force, the roughness of the ceramic enamel surface increases only 7.5%
compared to 106% for the stainless steel.
Higher nutrient retention: Food cooked in Bio Ceramic enamel cavity microwave
ovens retains significantly greater amounts of vitamin C and F (an essential fatty acid
that helps reduce cholesterol and blood pressure) than food cooked in conventional
stainless steel cavity microwave ovens.
Exclusive Feature: 3D Shower wave
Unlike other Microwave Ovens, only Samsung Microwave Ovens come with the
unique 3D Shower wave System, which helps to distribute heat evenly, enabling
uniform cooking horizontally and vertically.
Television
The Samsung 70-inch PDP TV (Plasma Display Panel) and at 54 inches is the world's
largest thin film transistor liquid crystal display (TFT-LCD) television and offers the
highest picture resolution available anywhere in the world.
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The 70-inch PDP delivers high-definition imaging from over two million pixels - a
resolution twice the clarity of other models on the market today. Samsung has also
applied its proprietary Digital Natural Image engine image-enhancement technology
to ensure the highest quality possible image in terms of picture brightness and
contrast.
Samsung's 54-inch TFT-LCD TV features a crisp, high-resolution image and excels in
performance that ensures a smooth playback of the most action-packed visual content.
The 1920 x 1080 resolution and 16:9 aspect ratios can accommodate future changes in
high definition broadcasting. These advanced features and unprecedented screen size,
combined with inherent crisp display characteristics of TFT-LCD, make this 54-inch
TFT-LCD TV one of the most advanced display products available today.
India’s first wireless home theater (Bluetooth technology): Samsung India
Electronics Ltd. has introduced India’ s first wireless home theater, Model No.
HTDB390 in the Indian market. The wireless Home Theater in Box (HTiB) uses
bluetooth technology to provide a wireless connection to the rear speakers of the 5.1
channel speaker setup - eliminating the need for rear wires, and giving the user total
freedom to setup the rear speakers.
Wireless HTiB - rear speakers totally remove the hassles of wiring up the home
theater. Extremely convenient they embody the concept of HTiB (Home Theater In
Box) - since a user can literally take the system out of the box and place the speakers
around his/her room to create a Home Theater. Add to the feature of "no-wires", the
Samsung exclusive SDSM feature that calibrates sound from each speaker at the
touch of a button to give the best sweet spot - and this Home Theater provides a
never-heard-before audio experience.
DVD
The highlight of the Samsung DVD Range is the Hypervision DVD, HD 938, which
is the world’s first and only HDTV compliant DVD Player. The Hypervision DVD
utilizes the world’s first digital visual interface (DVI) output to transmit
uncompressed digital video signals without any analogue conversion, preventing
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image quality loss. This results in viewers being able to enjoy high definition quality
picture quality even for standard DVDs.
Mobile Phones
India is one of the fastest growing mobile markets in the world, having more than
400+ million mobile subscribers. Currently in India 2.5G and 2.75G are in the
existence in GSM Technology. Whereas another technology is CDMA (code division
multiple access), 3G is coming into the existence.
As per as mobile market in India is concerned there are number of GSM service
provider such as:
o Airtel
o Vodafone
o Idea
o BSNL
o TATA DOCOMO etc.
Whereas in CDMA there are few number of player as compare to GSM mobile, such
as:
o TATA (TTSL/TTML)
o Reliance India mobile
o Virgin
o MTS.
.
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28%
72%
CDMA GSM
In this sector number of equipment manufacturer or mobile manufacturer presents such
as:
o Nokia
o Samsung
o LG
o Mototola
o Sony
o Haier
o HTC
o Chinese mobiles
Samsung India Mobile
Samsung India Mobile a telecom equipment manufacturer, head office in New Delhi and
country head Mr. Sunil Dutt. Samsung has divided the mobile business in to areas:
GSM Mobile Business.
CDMA Mobile Business.
Samsung CDMA Mobile Business
In CDMA segment Samsung is in market with two functional area that are:
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Operator handsets.
Open handsets
o Operator handsets are handsets manufacture by Samsung but it is collaborated with
any network operator.
Samsung india has collaboration with following telecom service provider in different
telecom circles.
TATA (TTSL / TTML)
MTS (SSTL)
Virgin Mobile (VMI)
o Open handsets are handsets manufacture by Samsung and handsets is compatible to
any CDMA network, there is no restriction of any specific CDMA network.
Availability of handsets in shops
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Direct Marketing Open Marketing
TATA (TTSL/TTML )
MTS (SSTL)
Virgin Mobile (VMI)
SAMSUNG CHANNEL / ND
North
EastSouth
West
SSK BP
Price : 1k – 2k Price : 3.5k – 14k
CDMA MOBILE
LGSp
ice
Samsu
ng
Micromax
Huawei ZT
ENokia
Haier
Other0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
93.39%
74.52%
95.28%
18.86%
63.65%
5.66% 9.43%
71.69%
25.47%
Handsets
Mob
ile re
tail
stor
es in
term
s of %
Above figure shows that Samsung is most preferred brand in CDMA mobile handsets
among all the brands.
LG is close competitor of Samsung with 93%+ availability in retail mobile stores.
The availability of Spice, Huawei and Haier is also good in CDMA market with
availability more than 50% mobile retail stores.
less then 20% 20% to less then 30%
30% to less then 40%
40% to less then 50%
50% to 50% +0
10
20
30
40
50
60
70
80Samsung LG Spice Haier
Market Shares in mobile stores
No
of m
obile
stor
es
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Samsungs market share is high among all the brands. In majority of mobile retail
stores Samsungs CDMA mobile market share is half or more than 50%.
In most of the mobile stores Samsungs CDMA mobile market share is 30% - 40%.
LG is close competitor of Samsung; in majority of mobile shops market share of both
of the brand is almost equal.
Comparative study of Market Share
1 8 15 22 29 36 43 50 57 64 71 78 85 92 99 1061131200%
20%
40%
60%
80%
100%
120%
LG
Samsung
Stores
Mar
ket S
hare
LG-Samsung Comperative Market Share
As per the above figure the market share of Samsung and LG are overlapping in some
of the stores. It mean where demand of both the brand is equal.
The above figure indicated that LG and Samsung are the close competitors.
Somewhere LG is leading in CDMA market share, somewhere Samsung is leading.
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1 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 960%
20%
40%
60%
80%
100%
120%
Spice
Samsung
Stores
Mar
ket S
hare
Spice-Samsung Comperative Market Share
Majority of availability of Spice mobile in retail stores is less than 20% of market
share.
Whereas almost Samsungs market share in mobile stores is more than 20%.
1 8 15 22 29 36 43 50 57 64 71 78 85 92 99 1061131201270%
20%
40%
60%
80%
100%
120%
Samsung
Haier
Stores
Mar
ket S
hare
Haier-Samsung Comperative Market Share
Sales of Haier mobile are very good in some of mobile stores because of low price of
handsets available in Haier.
In some of the stores Haier mobile market share is more than 40%.
But its market share is less as compare to Samsung.
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1 8 15 22 29 36 43 50 57 64 71 78 85 92 99 1061131201270%
20%
40%
60%
80%
100%
120%
Samsung
Haier
LG
Spice
Stores
Mar
ket S
hare
LG-Samsung-Spice-Haier Comperative Market Share
The above figure shows that Samsung is most preferred brand in the CDMA segment
by consumers.
Samsung has the direct competition with LG.
Comparative Study of Consumer demand:
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LG Spice Samsung Huawei Haier0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00Co
nsum
er d
eman
d in
term
s of
%
Above figure shows consumer demand of Samsung CDMA mobile is very high. In
61% of retail mobile stores consumer demand is very high.
Approximate in 10% of retail mobile stores Samsung consumer demand is extremely
high.
LG is close competitor of Samsung CDMA mobile, having 48% of very high
consumer demand.
Haier demand is also very good among the consumer because of low price handsets.
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Chapter 4
AFTER SALES SERVICE AND FUTURE PROSPECTS
4.1 After Sales Service
4.2 Promotion
4.3 Advertising
4.4 Sales promotion
4.5 Sponsorship
4.6 Direct mail
4.7 Distribution Channels
4. 8 Pricing
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4.1 After Sales Service
Offering advanced technology products and positioning itself on the technology platform will
not help a company sell its products if it fails to give proper after-sales-serfvice. With a focus
on strengthening the satisfaction level of the consumer, Samsung India Electronics Ltd
(SIEL) has launched its 3S — Speed, Smile and Sure — campaign.
As part of this customer service program, the company is working on a two-pronged strategy.
This involves: one, improving the service infrastructure by setting up customer service plazas
in key metro locations; and two, improving the skill levels of technicians by setting up a
training school with a technical evaluation system for after sales service engineers.
Till now, most of the players in the sector have been professing that it's the relationship with
the customer that matters. However, with the competition increasing, customer satisfaction is
fast becoming a core issue,'' an industry analyst pointed out. He further stated that Samsung's
current effort ``will also strengthen its customer base as most of the players claim that 60 per
cent of their sales is repeat purchase.''
4.2 Promotion
Offering advanced technology products and positioning itself on the technology platform will
not help a company sell its products if it fails to communicate properly with the potential
customers. To raise brand awareness and create strong, favorable and unique brand
associations, Samsung adopted various marketing strategies like celebrity endorsements,
corporate advertisements, highlighting its technological superior goods and many
promotional schemes.
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4.3 Advertising
Samsung is involved in aggressive marketing and advertising of its product to develop
attitudes, create awareness, and transmit information in order to gain a response from the
target market. Their main advertising channels include 'media' such as newspapers (local,
national, free, trade), magazines and journals, television (local and national) cinema, outdoors
advertising (such as posters, bus sides). The initial advertisements communicated presence of
Samsung in worldwide markets and its dominance in those markets. To increase its brand
awareness, Samsung went in for celebrity endorsements. Initially, the company signed Hindi
film actress, Tabu, to endorse its brand. Till 2002, Samsung’s ads focused on the
technological supremacy of its products. But by late 2002, in addition to the technology
plank, the company started advertising on the plank of ‘passion for country’ and sports
(cricket and football). Its latest ambassador is John Abraham for its mobile phone and Rahul
Dravid for its Television range.
4.4 Sales Promotion
Along with advertisements, Samsung also focuses on promotional schemes to increase its
sales. In October 2001, Samsung launched its highly successful promotional scheme, the
Samsung Phod ke Dekho Offer. This offer instantly boosted the sales of the company
generating sales of Rs. 2.75 bn from this offer. The campaign was launched on an all India
basis during the festival season. Under the scheme, consumers who bought any Samsung
product were given a tamper proof plastic coconut with three coins in it. One out of every 10
coconuts had a lucky coin with a gift printed on it. As a part of the campaign, Samsung’s
brand ambassador, Tabu interacted with the customers and dealers of Samsung in Bangalore
and Chennai and handed over the lucky coconuts to select Samsung customers. The prizes
included products from the Samsung range.
The Phod ke Dekho offer was followed by another promotion scheme in May 2002, Dabake
Jeeto offer coinciding with the football World Cup. During the promotion every customer
who purchased company’s electronics or home appliances product got plastic football with an
alarm clock in it. The customer had to press the football from the top, and was given the free
etched on the tamper-proof anodized sticker. Under this campaign, Samsung gave out gifts
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worth Rs. 100 mn, which included Samsung digital flat TVs, frost free refrigerators,
microwave ovens, Karisma washing machines, mobile phones, cameras and Soccer 2002
official licensed T-shirts from Adidas. This campaign notched up sales worth Rs.310 Crores
during the period of the Promotion.
The next major promotional campaign was the Phir Se Phod Ke Dekho offer. The offer was
launched during October-November 2002 generating a sales of Rs. 380 crores. It was a repeat
of the earlier ‘Phod Ke Dekho’ campaign.
On March 20, 2003 Samsung Launched 'Samsung Rang De Kismat Offer' for Frost Free
Refrigerators which entitled a customer to Lucky Gifts worth Rs 4 Crores, with the purchase
of any Samsung Frost free Refrigerator. This Promotion derives its name from the 'Rang de
Kismat' glass, which was handed over to a customer with the purchase of any Samsung Frost
Free Refrigerator. The Customer needed to pour chilled water into the glass and wait for the
'Bio' logo on the Glass to change colour to find out the gift won by him/her. There were
Colour Codes for types of Gifts won by the Customer - For example, a Green 'Bio' entitled a
customer to a Samsung Microwave oven while a Red 'Bio' gets the Lucky winner a Gift
Voucher from Tanishq worth Rs 30,000. This offer was launched to capitalize on the sales of
its Frost free refrigerators in the summer months. The Company’s market share went up to
21% in the Frost free refrigerator market after the offer.
Following its success with its 'Samsung Rang De Kismat Offer' Samsung India come up with
another innovative Consumer Offer “Samsung's Bundling Offer with Reliance IndiaMobile”
for the buyers of its Consumer Electronics and Home Appliance Products in the Delhi and
NCR Region on 25 July, 2003. A buyer of any Samsung Consumer Electronics or Home
Appliance products gets the option of walking away with a sleek, advanced Samsung Mobile
Phone N191 model along with a Reliance IndiaMobile connection, without having to pay any
activation charges. Furthermore, the user gets free talk time worth Rs.600 over a 6-month
period. All other payment terms are the standard billing terms and conditions offered by
Reliance IndiaMobile depending on the package taken up by the customer. On 6 October
2003 Samsung India Electronics Ltd launched its mega festival promotion called ‘Samsung
Pinning Toh Winning Offer’ on an all India basis. In this Promotion, where the consumer
stood to win an assured gift on the purchase of any Samsung product, have gifts worth Rs.
100 crores to offer as prizes. The offer entitled the buyer of a Samsung product, a card with a
unique 16 digit alpha-numeric code. All the consumer had to do is SMS “SAM” followed by
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the 16 character code to 8888 and s/he would immediately get a message showing what gift
has been won. The Gifts won in the Promotion include; Samsung Projection TVs, Samsung
Mobile Phones, Samsung Yepp Disc Players, Samsung DVD players, Titan Fast Track
Glares, Touch Screen Landline Phone, Trendy Portable Travel Iron and Britannica
Encyclopedia 3 pack CDs.This offer was basically launched to maximize its sales during the
festival season.
Following its success with its ‘Samsung Pinning Toh Winning Offer’ Samsung India
Electronics Ltd launched ‘The $-DOLLAR Program’ for its IT Reseller and System
Integrator fraternity on June9, 2004. The program meant for the System Integrators (SI) was
applicable on Samsung monitors, Hard Disk Drives (HDD) and Optical Media Storage
(OMS) products. Each time a SI/reseller purchases Samsung products from a Samsung Star
Elite or Samsung Storage Preferred Partner (SSPP), the SI was issued a cheque. The cheque
was of one of the four colors – White, Blue, Silver, Gold – depending upon the products
bought.
Samsung believes that its SIs and re-sellers play a pivotal role in business growth. They are
the ones who provide them the edge that they need in today’s competitive marketplace. This
is why they have spearheaded revolutionary programs for them ensuring healthy growth in
revenues and profitability.
The last sales promotion offer was launched on Feb 3, 2005 called “Fastest Finger First”
which was a nation wide contest to find India’s fastest SMSer. The message to be typed reads
as follows: “The razor-toothed piranhas of the genera Serrasalmus and Pygocentrus are the
most ferocious freshwater fish in the world. In reality they seldom attack a human". This
SMS had to be typed on the cell phone keypad, complete with punctuation marks and lower
& upper case. No predictive text (T9 Dictionary), QWERTY keyboards/ any keyboard was
allowed.
4.5 Sponsorship
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Samsung used sponsorship of events like Olympic series to boost its sales. Samsung was the
global wireless communications sponsors at the Athens Olympics. Samsung used the strategy
of relating itself directly with the values of the Olympic games, which included attributes like
world class, global, excellence, fair competition and peace. The Olympic series of August5,
2004 was Samsung’s salute to the Olympic values.
Samsung was the sponsor of Lakme India Fashion Week held on April21, 2005. Team
Samsung cricketers - Irfan Pathan, Mohd. Kaif and Virendra Sehwag launched the World’s
Best Handset, Samsung D500 during the Samsung Show at the Lakme India Fashion Week.
The theme for the Samsung Show was ‘The Best Thing Says Everything’ in keeping with the
positioning of Samsung D500 - Samsung’s latest and path-breaking mobile phone which has
been rated as the ‘World’s Best Mobile phone’ by the 3GSM Association World Congress
held at Cannes in February 2005.
Samsung sponsored Samsung & MTV Youth Icon 2005 on June10, 2005. The idea behind
the sponsorship was that the Samsung Mobiles were targeted at the fun loving, lifestyle
oriented and trendy youth of today. By associating with the Samsung & MTV Youth Icon,
they are seeking to further strengthen their relationship with the youth. Samsung mobiles
make a style statement and by partnering with the Youth Icon, this positioning is further re-
inforced.
Samsung was even the sponsor of Samsung IIFA Awards held on June 13, 2005. Popular film
actress, Preity Zinta was awarded the ‘Samsung Diva’ award while Hrithik Roshan was
conferred the prestigious ‘Samsung Style Icon’ award at the Samsung IIFA Awards 2005.
Samsung India had carried out an online voting process on the Samsung India website
between May 20th - June 5th 2005 for selecting the recipient of the ‘Samsung Style Icon’ and
‘Samsung Diva’ awards. The same was also promoted extensively on other sites like
indya.com and msn.com as well. The Company received a phenomenal response to this
online voting contest. “The ‘Samsung Style Icon’ and ‘Samsung Diva’ awards which have
been growing in popularity year on year, the company uses the response level received every
year as its popularity indicator.
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Samsung are passionate about football. That is based on the company-wide belief that sport
plays a unique role in unifying people. They have been connecting with sports fans the world
over by supporting sporting events including the Olympic Games, the Winter Olympic
Games, the Asian Games, the World Cyber Games, Samsung Super League (Equestrian) and
of course football. As well as being very proud sponsors of Chelsea since the 2005/6 season,
they support many teams across the globe. Samsung became the Official Club Sponsor of
Chelsea Football Club from 1 June 2005 in a five-year deal. The agreement was signed at
Stamford Bridge, Chelsea´s stadium, by In-Soo Kim, Samsung European President, and Peter
Kenyon, Chelsea FC's chief executive at the time. It was the biggest ever sponsorship deal
signed by Chelsea and the second largest by Samsung after its sponsorship of the Olympic
Games. The logo of ´Samsung´ now appears on the famous Chelsea shirts.
Peter Kenyon said at the time: “We are absolutely delighted to have Samsung as our new
official club sponsor. The company is one of the world´s largest brand names, and we are
excited about what it can offer Chelsea.”
'Samsung has a key part to play in the future global development of Chelsea and we believe
we can play a similar role for it in its strategic aims. There is a great synergy between the two
brands in terms of recent dramatic growth and success, levels of performance and market
targets.'
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4.6 Direct Mail
Samsung even uses Direct Mail concept for its product promotion. Samsung sends mail to
target consumers depending on the database i.e. the frequency of site visit and on their
purchases. Samsung is very actively involved in e- commerce.
4.7 Distribution Channels
Samsung uses supply chain to enhance differentiation, increase sales and penetrate new
markets and channels. Its supply chain is beneficial in several ways. It helps the company to
deliver products to the customer faster. It efficient supply chain is transparent, so that all the
players in the supply chain have the right information at the right time about the movement of
the products within the chain. This means lower inventories, elimination of waste, and
reductions of costs. In addition to the intangible benefits like quick feedback from customers
help in launching new products.
Samsung has 24 state-level distribution offices and a direct dealer interface. The direct dealer
interface helps the company to get quick feedback from dealers, and enables it to launch
products according to consumer needs. To minimize time overruns, Samsung delivered its
products directly from its factories to its Regional Dispatch Centers (RDCs), and from there
to dealers. Samsung has sales and service networks all over India and 650 service points.
Samsung has implemented an innovative logistics system – Global Logistics Network
Systems (GLONETS). GLONET application is used on the B2B i.e. Business to Business
front for the vendors. This involved linking the key vendors, which form the bulk of
Samsung’s sourcing (26 domestic and 30 international) through Samsung’s GLONET. This
system enables Samsung to connect its purchase department with the Samsung headquarters
and international procurement offices through integrated ERP systems. The integrated ERP
system enables Samsung to purchase its requirements from its international procurement
offices and also from its Indian vendors. This application is also extended to order placement,
production plan sharing and invoicing, resulting in shorter business cycles and reduced
inventory levels and low waste.
In addition to GLONETS, Samsung also believes in JIT (Just-in-Time) concept to its dealers.
To make delivery of products within 48 hours of the expected date of delivery, the company
has setup four RDCs, one at each regional location of the country.
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The distribution channel is structured very systematically wherein all the transactions and
business conducted is documented. The program is based on incentives so that dealer
payments can be made on time. The Company supplies its goods to the Star Elite who
supplies goods to the distributor who in turn sell the goods via their own channel of retailers
and distributors. The Samsung Brand shop network complements the over 8500 retail points
for Samsung products located across the length and breadth of the country. Samsung plans to
continue enhancing its penetration levels in the country to reach out to more and more Indian
consumers. They consider the Star Elite partner as their actual product champion as their link
with the end customer. As, they have been adding value to the sale to the customer and
guiding him to the right purchase decision at a fair price.
Shop-in-shop:
Samsung is ensuring a presence in most big malls and multiplexes; even in the multi-brand
outlets, as the focus there is to create a shop-in-shop atmosphere.
The exclusive showrooms:
Keeping its target customer to display Samsung products in a more lifestyle ambience and to
communicate the product benefits in a more interactive manner, Samsung India has set up a
widespread network of over 80 exclusive showrooms comprising Samsung Digital Zone
(focusing on high-end digital audio-video products such as MP3 players, camcorders and
LCD/plasma TVs). The Samsung DigitAllhome goes beyond the concept of a Digital Plaza or
a Brand Shop because in the DigitalAllhome, they are trying to create a more interactive
environment and providing a more lifestyle orientation to the display, so that the customer
can visualize the products in his/her own home settings. The Company plans to supplement
its existing Samsung Digital Plazas' (Brand Shops) by setting up 'Samsung DigitAllhomes' in
select cities. The Company will also be creating exclusive Samsung corners in multibrand
outlets this year.
The demands and needs within the distribution channel lead to the establishment of
MyMemoryStore.com. The site is more than an ordinary selling site, infact it is an industry
portal that allows the business partner to come in and track the relevant industry information
within the channel, meaning minimizing the inventory overhead.
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Samsung is also planning to invest over $1 million in setting up a chain of exclusive outlets
called `Samsung Talkies'. The entire Samsung mobile range including the latest handsets will
be displayed at the outlets, which will be set up in more than 10 cities across India, including
Bangalore, Mumbai and Hyderabad.
Post VAT they have modified in their policies a bit. The most important step was to bring
down channel inventory post the Budget impact and the VAT impact. They made a conscious
decision to bring down channel inventory, which was at that point of time 60 days, today it is
reduced to 11 days, which entails total inventory among dealers, distributors, star elite and SI.
This has been done to ensure that the channel stays profitable.
Samsung India tied up with PlanetM for displaying its new audio range at the PlanetM
Outlets in Delhi, Mumbai, Kolkata, Pune, Chandigarh and Bangalore.
4.8 Pricing
Pricing also seemed to have played a significant role in Samsung’s success. Differentiation is
the key for a brand to be preferred by consumers, when there are so many brands within the
same product category. Samsung believes in providing good products at reasonable prices to
its customers. Samsung’s technology plank communications helped the company to gain
market share, even though it did not offers any discounts or exchange scheme when it entered
India. Samsung focuses on cost-cutting measures to keep its price low which helps to combat
the discount schemes of the local companies.
For e.g.- In 2001, due to high competition in the 20”CTV segment, Samsung had to resort to
price cuts. The company said that value engineering, new product lines and new chassis
development had contributing in combating price erosion. Samsung negotiated with its
vendors to reduce costs on cabinets, plastics, speakers, harness coils, remote controls, etc.
Samsung’s Brand image seemed to have helped it survive the price erosion. Dealers also
agreed to lower margins owing to company’s brand image.
Samsung in the year 2002, drastically reduced its operational costs which enabled the
company to keep low prices for certain products and extract higher profit margin from
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premium products. This helped Samsung to post a turnover of Rs.30bn, a 2 growth from the
year 2001.
Samsung is very transparent in functioning. It has a fixed MoP (Marketing Operating Price)
whereby the goods are sold to the distributors and to the customer’s at a fixed market price
only.
The focus of its competitors is to penetrate in the rural and semi-urban mass markets. But
Samsung insists that it's a high end technology driven player. That's why the urban areas are
still a focus area for it and only 30 per cent of revenue comes from rural and semi-urban
India. They have always been a hi-end technology driven player and want to keep that equity.
Not surprisingly, the target customer for Samsung products won’t be found in the price-
sensitive mass market. Adopting the lifestyle product platform, Samsung’s aiming for the
high-end premium market. Hence Samsung has always been keeping premium prices.
Samsung claims it’s never been a price warrior — its focus has always been on the premium
market, which is why it has remained a steady No. 2 or No. 3 player in most product
categories.
It is difficult to achieve the ambitious targets keeping in mind the pricing strategy of
Samsung. But, they believe that it takes time to ensure your supremacy in market share. Once
you get your brand perception right in the minds of the consumers as a brand that delivers the
best technology and gives you value for money, then ultimately market share goes up.
Later on Samsung changed its policy a bit and instead of just remaining a high-end
technology driven brand it tried to change its image to sell products to the huge number of
middle income families in India. It started pricing its products on the “value for money”
concept, keeping in mind the price sensitivity of Indian consumers.
But still Samsung has the repute of being a premium brand, aggressive in launching newer
models with the latest technology and at economic costs throughout the world.
Future Prospects
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We have done a survey at retail outlets selling Samsung products and one thing that we found
out common is that Samsung lacks in after sales service. The drawback in their after sales
service strategy is that they have only one customer service centre throughout India which is
situated in Delhi. When a customer has a complaint he approaches his retailer who in turn
registers the complaint in the Delhi service centre from where the complaints are processed
and replacements are made.
The presence of only one service centre makes it very difficult to give timely response as the
complaints come throughout India. The complaints are not entertained for a period of 10 -15
days. Hence the customer is not satisfied with the after sales service of Samsung.
Marketing Strategy
Samsung has to improve its after sales service in order to retain customer and create brand
loyalty. The current policy adopted by Samsung is aggressive spending more on advertising
and marketing and less on retaining customers that is after sales service.
So the corrective strategy to be adopted by Samsung must be to spend more on retaining
customer rather than acquiring them as it costs 5 times more to the company to get to a new
customer rather than pleasing existing ones. Moreover it costs 16 times to take the new
customer to the loyalty stage.
They should have regional service centres in North, South, East, West where the complaints
can be received and processed quickly. Moreover they should employ and train the
technicians to provide quality and timely sales service.
Strategy to Expand Market Share
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Currently Samsung ranks second in the Indian consumer durable market whereas LG ranks
first.
The problem with Samsung is that it is a premium brand and focuses only on urban and semi-
urban markets whereas the rural market is neglected to a great extent which is why LG is
dominating in that market.
Samsung earns revenue of only 30% from rural areas.
India being a country of villages, Samsung should focus more in the rural market in order to
increase its market share. Samsung should come out with new economic products like LG
had taken out “Sampurna” television range aimed only for the rural market.
Hence Samsung could have come up with a conventional range of television models which
although are no very technologically advanced but fulfills the basic needs.
All these strategies are very practical promising higher gains with less cost pains.
FINDINGS AND SUGGESTIONS59 | P a g e
FINDINGS
Q.1 Are you user of SAMSUNG Home Product?
60%
40%YESNO
.
It shows that 60 % people are user of SAMSUNG home Products And
40% people don’t use SAMSUNG home products
Q. 2 By which Medium you come to know about SAMSUNG?
60%15%
20%5%
AdvertisementFamily MemberFriends/Relative/NeighbourOther Source
It shows that 60% of people know about SAMSUNG through
Advertisement,15% through Family Member ,20% through
Friends/Relative/Neighbors And 5% through Other Sources
Q. 3 Have you seen any SAMSUNG’s ad?
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90%
10%
YesNo
It shows that 90% of people have seen SAMSUNG Ad and 10% people
have not seen SAMSUNG Ad
Q. 4 Which advertisement feature influenced you most in a particular Ad?
30%
40%
20%
10%
Concept/MessageLogo/SloganPicturisationOverall
It shows that 30% people were influenced by Concept/Message,40%
people were influenced by Logo/Slogan ,20% people were influenced by
picturization and 10% people were influenced by the Overall ad.
Q. 5 How do you like of the marketing of SAMSUNG?
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40%
45%
15%
ImpressiveSatisfactoryUnsatisfactory
It shows that 40% people say Marketing of Samsung was Impressive,45%
said satisfactory and 15% said it unsatisfactory.
Q. 6 What makes you recall SAMSUNG ?
35%
30%
20%
15%
Logo/SloganMessagePresentation of AdModel/Celebrity
It shows that 35% of people recall SAMSUNG by its Logo/Slogan,30%
by Message,20% by Presentation of Ad and 15% by Model/Celebrity.
Q.7 Did you went to go exclusive SAMSUNG’s Showroom?
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65%
35%
YesNo
It shows that 65% of people went SAMSUNG showroom and 35% Dint
went to Showroom.
Q.8 Does the advertisement reflect actual product profile?
85%
15%
YesNo
It shows that 85% of people say that the advertisement reflect actual
product profile and 15% say No.
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Q. 9 Based on the price range what impression do you carry of SAMSUNG
product?
40%
30%
30%
EconomicalCostlyNeither Economical nor Costly
It shows that 40% people found the price range as Economical,30% found
it costly and 30% found it Neither Economical nor Costly
Q.10 Are you happy with After Sales Service of SAMSUNG?
80%
20%
YesNo
It shows that 80% of people are happy with the after sales service of
SAMSUNG and 20% people are Not happy
SUGGESTIONS
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Company should improve the after sales service of products as it is the main
factor for the sales of consumer products.
Company should constantly get innovative in advertising its products, mainly
focusing on Value it will bring to the customer after buying the product
Company can use some of the marketing tactics like distributing free key chain,
calendar, t-shirts for making brand popular among people
Company can introduce low price and low power consumption Refrigerator’s
for acquiring the lower middle income group to increase their market base
Dealer’s desire more advertisement to be done through local newspaper and
cable TV ads to make consumers aware about the product.
Advertisements of the company’s products should focus on quality and main
features.
Proper Segmentation should be done and accordingly marketing strategies
should be planned for premium products.
Welcome call as well as follow up call will help the company to maintain
customer relationship; hence the company should focus on such softer these
aspects.
Establish the service center as per taluka place for easy accessibility to
consumers.
Conclusion
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With respect to the above study and the findings thereby
are that the company has definitely entrenched into the
urban market.
With few more concerted efforts, the said organization
needs to enter the rural market in order to completely
establish itself all over.
Customer Service and Satisfaction are of utmost
important in this highly Competitive market
Value Proposition should be created in the eyes of the
customer to gain Loyalty which will in turn help to
sustain and be a Leader in the Market
Constant Investment in R&D will help an Organization
to get Innovative products in the market and in turn lead
to higher Customer Satisfaction.
Brand Recall is of utmost importance and the Company
should make efforts to increase the same
QUESTIONNAIRE
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PROJECT TOPIC: - “MARKETING STRATEGIES OF SAMSUNG”
RESPONDENT PROFILE
Name:-
Sex:- Male [ ], Female [ ]
Age Group:- 15 to 25 [ ], 25 to 35 [ ], 35 to 45 [ ]
45 to55 [ ], 55 and above [ ]
Q. 1 Are you user of SAMSUNG Home Product?
Yes [ ] No [ ]
Q. 2 By which Medium you come to know about SAMSUNG?
Advertisement [ ]
Family Member [ ]
Friends/Relative/Neighbour [ ]
Other Source [ ]
Q. 3 Have you seen any SAMSUNG’s ad?
Yes [ ], No [ ]
Q. 4 Which advertisement feature influenced you most in a particular Ad?
Concept/Message [ ]
Logo/Slogan [ ]
Picturisation [ ]
Overall [ ]
Q. 5 How do you like of the marketing of SAMSUNG?
Impressive [ ], Satisfactory [ ]
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Unsatisfactory [ ]
Q. 6 What makes you recall SAMSUNG ?
Logo/Slogan [ ]
Message [ ]
Presentation of Ad [ ]
Model/Celebrity [ ]
Q.7 Did you went to go exclusive SAMSUNG’s Showroom?
Yes [ ], No [ ]
Q. 8 Does the advertisement reflect actual product profile?
Yes [ ], No [ ]
Q. 9 Based on the price range what impression do you carry of SAMSUNG product?
Economical [ ], Costly [ ]
Neither Economical nor Costly [ ]
Q.10 Are you happy with After Sales Service of SAMSUNG?
Bibliography
Websites
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http://www.Exchangeformedia.com
http://www.Agencyfaqs.com
http://www.Magindia.com
http://www.Indiatelevision.com
http://www.Indiainfoline.com/bschool/biz.asp
http://www.samsung.com
Books
Principles of Marketing – Philip Kotler ( Vipul Prakshan )
Special Studies in Marketing- Romeo Mascarenhas ( Vipul Prakashan )
Magazines
Advertising and Promotion- Belch
Advertising today – Warren berger
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