MARKETING PRESENTATION

“You are what you think, speak and eat (Anonym)

SAMSUNG : FROM GALLOP TO RUN

CASE PRESENTATION OUTLINE

world’s largest tv

manufacturer

SAMSUNG : FROM GALLOP TO RUN

COMPANY BACKGROUND

Electronics global valuable

brand

Samsung Founder unveiled what he called “new management,” a top-

to-bottom strategy for the entire company

In 2009, Samsung rang up revenues of $117 billion with profits of $8.3

billion

Interbrand crowned Samsung as the world’s fastest growing brand

over the five-year period

Samsung Electronics, is now one of the world's leading developers

and producers of semiconductors, and was

listed in Fortune magazine's list of the 100 largest corporations in the

world in 2007

Q.1 How was Samsung able to go from copycat brand to product leader ?

What are the certain factors

that can make Samsung

move on from copycat brand

to be the product leader ?

THERE ARE THREE MAIN FACTORS THAT LEAD SAMSUNG TO BE CUTTING EDGE PRODUCT LEADER

Samsung then hired

a new group of young

designers who

creates sleek, bold,

innovative, and

stylish product

targeting high-end

users.

Lifestyle works of art

means that every new

Samsung products have

to pass ‘WOW” test. If it

didn’t get wow during

market testing, it must

go straight back to the

design studio

Samsung abandoned low-end

distributers, and they decide to

choose to work with specialty

retailers such as Best Buy and

Circuit City.

Samsung clearly shows that they

are no longer the cheap brand.

They revamped their strategy and

positioning along with developing

stylish and innovative products.

NEW PRODUCT

DEVELOPMENT

POSITIONING

COMMERZIALES

PRODUCT “TEST

MARKETING”

LEE’S TOP TO BOTTOM NEW MANAGEMENT

STRATEGY FOR SAMSUNG COMPANY

(Bringing Samsung Electronics in very ambitious new direction)

New Product Development Focus :

Hired a new crop of fresh, young designers who unleashed a torrent of new products

Not humdrum, me-too products but sleek, bold and beautiful products targeting high-end users (“lifestyle works of art”)

Samsung concentrates on the development of new products, product improvements, product modifications, and new brands through their R&D effort that let them

Samsung NEW PRODUCT DEVELOPMENT

Samsung Product “TEST MARKETING”

Samsung Product Test Marketing:

Every product had to pass the “Wow!” test, if it didn’t get a “Wow!” reaction during market testing, it went back to the design studio

Making Samsung conducts integrated test of product and its entire marketing program-targeting and positioning strategy, advertising, distribution, pricing, branding and packaging, and budget levels

Providing management the information needed to make a final decision about whether to launch the new product or going back to studio.

SAMSUNG’S PRODUCT POSITIONING AND COMMERCIALIZATION

Largest Consumer Electronics Company

in the worlds (sc 2005)

Samsung is not El Cheapo Product

Anymore

Working with specialty

Retailers such as Bestbuy And CircuitCity & also abandon Low end distributors like K-Mart

And Wall Mart

Revamping its Position to

create stylish and Innovative products

The Real Proofs that show Samsung become cutting edge product leader

Samsung Revenue (2009)

Rang up to $117 Billion

Samsung Profit (2009)

Reaching to $8.3 Billion .

Position of Global Brands

17th valuable global and also

the world’s fastest growing

brand (last 5 years) Sa

ms

un

g L

oft

y G

oa

ls

Sony Revenue (2009)

Decrease to $77 Billion

Sony Net Loss (2009)

Net Loss almost $1 Billion

Position of Global Brands

Fell to 29th position for

Valuable Global Brands

So

ny

Samsung Customer-Centered New Product Management

Customer Centered NPM:

Focuses on finding new ways to create more customer

satisfying experiences, new products are ones that are

differentiated, solve major customer problems, and offer a

compelling customer value proposition

Samsung Implementation of Customer Centered NPM as

follows :

1. It can be proved from Samsung revenue (2009) rang

up to $117 Billion with profits $8.3 Billion that resulted

from consumer satisfaction towards Samsung products.

2. Samsung differentiates their new innovative products to

some certain helpable high-end areas of electronic

devices such as Samsung Kiwi Laptop that are very light

and handy for user, Blue-Ray Sky Touch DVD player.

3. Samsung’ product had satisfied customers need by

providing high-end products such as Samsung Luxia

TV’s that has 55 inch size and 49 pounds weight to ease

the customer adjusting it wherever they want to move.

Samsung Team Based New Product Management

Team Based New Product Development Focus :

Focus : Samsung practices team-based new-product

development by developing new product in which every

departments work closely together in cross-functional teams,

to save time and increase effectiveness.

Aims : Instead of passing the new product from department

to department, the company assembles a team of people

from various departments that stay with the new product

from start to finish.

Samsung Implementation of Customer Centered NPM as

follows :

1. Samsung hired a group of experience and creative

designers to work close together and produce a new product

that will pass the “Wow!” test.

2. Companies that has TOP TO BOTTOM STRATEGY that

combine a customer-centered approach with team-based

new-product development gain a big competitive edge by

getting the right new products to market faster.

Corporate Strategy

Technology and ICT

Human Resource

Engineer and Experts

Sales and Distributions

Executive Committee

Marketing

Samsung Cross Functional Teams “Team Based New Products Management”

Operations and Policy

Products Designer

Samsung Systematic New Product Management

Systematic New Product Management:

The systematic innovation management system

approach yields two favorable outcomes. (1) It helps

create an innovation-oriented company culture. (2) It

will yield a larger number of new-product ideas,

among which will be found some especially good

ones.

Samsung Implementation of Systematic NPM as

follows :

1. The new-product development process should be

holistic and systematic rather than

compartmentalized and haphazard. Otherwise, few

new ideas will surface, and many good ideas will

sputter and die.

2. A company can install an innovation management

system can be used to collect, review, evaluate, and

manage new-product ideas, so that new ideas will

be encouraged and these ideas will not be lost.

Systematics New Product Development of SAMSUNG HIGH-END PRODUCTS OF Samsung’s High Techno

Samsung

“Touch of

Colour”

Kind : Blu-Ray

DVD Player.

Samsung

Luxia LED TV

Kind : High-

Technology

LED TV

Samsung YP S2

Pebble MP3

Player : Sporty

and Fashionable

Mp3 Player

Samsung Kiwi

Mini 10-inch

Note Book PC

(that is high

tech and

convenient)

SAMSUNG CURRENTS CONDITION :

Urgency : After 17 years remarkable success, Lee Byung-Chull admitted that the

world’s largest technology firm’s current main products may likely become

obsolete within next 10 years.

New Strategy: That forward thinking has him again in reform mode. So, he has

dubbed Samsung’s new strategy that is “mabuljungje” a Chinese axiom that

means “horse that does not stop.”

In a memo to Samsung employees, Lee said, “The ‘new management’ doctrine for

the past 17 years helped catapult the company into being one of the world’s best

electronics makers

Current Condition: Now is not a time to be complacent but a time to run.”

Samsung unveiled a $23billion investment plan, to ensure that it is the company

that develops high-tech products.

Challenges: Much of this year’s budget is earmarked for capital expenditures, new

equipment and plants to ensure that Samsung stays ahead for the high-tech

products.

Otherwise Samsung are doing research and development (R&D) to produce better

sound quality, sharper colors and unique features for their high-tech products.

Realizing their challenges by providing SAMSUNG New Strategy of MABULJUNGJE

Based on PLC-PRODUCT STAGE (1) Samsung Challenges to manage its high tech prod

• Product development stage begins when the

company finds and develops a new-product idea.

• During product development, sales are zero, and

the company’s investment costs mount but

Samsung hired a group of experience and creative

designers to create and produce a new product.

Every new Samsung’s product with new design has

to pass the “Wow!” test before released into the

market.

• Challenges : Samsung spends a lot of money in

investing in the new products because if the new

product with the new design failed the “Wow!”

test, it needs to be sent back to the design studio

for improvement, more cost of developing product

is needed. Therefore, the company’s investment

cost is very high.

Based on INTRODUCTION STAGE (2) Samsung Challenges to manage its high tech prod

Introduction stage starts when the new product is

first launched. Introduction takes time, and sales

growth is apt to be slow. In this stage, as

compared to other stages, profits are negative or

low because of the low sales and high distribution

and promotion expenses.

Challenges 1 : Much money is needed to attract

distributors and build their inventories. Promotion

spending is relatively high to inform consumers of

the new high tech product.

Challenges 2: Advertisements are very

important and compulsory for Samsung new

product. With advertisement, will more people

recognize about Samsung. Thus, this high-tech

products launched with highly cost.

Based on PLC-GROWTH STAGE (3) Samsung Challenges to manage its high tech prod

Growth stage occurs when sales starts climbing quickly.

The early adopters will continue to buy, and later buyers

will start following their lead, especially if they heard

favourable word of mouth. Attracted by the opportunities

for profit, new competitors enter the market.

The product’s price stability will determine the volume of

sales. Profit also increases in this stage. This is shown when

Samsung Electronics achieved its lofty goals in less than

two decades. In 2009, the company earned $117 billion of

revenues with profits of $8.3 billion. Since 2005,

Samsung is by far the largest consumer electronics

company in the world. It is the world’s largest TV

manufacturer and the second-largest cell phone producer.

Besides that, Samsung also has been awarded eight prizes

at the International Design Excellence Awards (IDEA).

Based on MATURITY STAGE (4) Samsung Challenges to manage its high tech prod

Maturity stage normally lasts longer than the previous stage, and

it poses strong challenges to marketing management. Maturity is

period of slowdown in sales growth because the product has

achieved acceptance by most potential buyers.

Profits level off or decline because of increased marketing outlays

to defend the product against competition. Samsung took home 8

prizes at International Design Excellence Awards (IDEA) where

entries are judged based on appearance, functionality and idea

behind the product. As cell phone industry moves from ‘dumb

phones’ to ‘smartphones’ and Samsung aims to double its market

share of the higher-end market from 5 to 10 percent.

Samsung also competes strongly in the markets for DVD players,

home theatres, digital cameras and camcorders, home appliances,

and laser printers because there are many producers out there who

offer the same products as Samsung. This lead to greater

competition and cause the profits level off or decline.

Based on DECLINE STAGE (4) Samsung Challenges to manage its high tech prod

Decline stage is the period when sales fall off and profits drop. Sales may plunge to zero, or

they may drop to a low level where they continue for many years. Samsung is now in this

stage of their high technology products and that is the reason why it needs to create

mabuljungje strategy.

There are many competitors that produces the same line of products, not just competitors

but the strong rivals such as Apple Inc (Smartphone) and Sony (Electrical appliances) had

lead the customer to a wider choice of product that they prefer to buy and it will lead to the

shifting in consumer taste whether in telecommunications components, mobile displays or

LED panel. Carrying a weak product can be very costly to the company, and not jus profit

terms.

Challenges 1 :There are many hidden costs. A weak product may take up too

much management time. It requires frequent price and inventory adjustments. It

also requires advertising and sales force attention that might be better used to make

“healthy” product more profitable. With advertising, it also can pull back the

product’s falling of reputation.

Challenges 2 : Samsung is investing heavily to ensure that it is Samsung itself that

develops the “newer high-tech” products instead of other companies like Sony.

Despite Samsung’s past success, the company will risk losing market share if it did

not completely rebuild its business model.

Q.4 Will Samsung likely achieve its goals in markets where it does not dominate, such as smartphones? Why or why not?

Do we believe that Samsung

is able to achieve its goals in

markets ? What is the reason

and the justification that

match to the today condition?

YES

Survey – high&increase % taking smartphones

Mabuljungje strategy – excellent result – goal

(create new high-tech product – to avoid a loss in

market share) eg.

Competitor (Samsung and Apple) – latest

system(Android 4.1 Jelly Bean)

• Samsung Price higher ( store market, trade number,

system) (system : android system for Samsung but

Apple Android system for Apple)

consumer behavior (cultural, social, personal and

psychological)

SAMSUNG ACHIEVING ITS GOALS BY MABULJUNGJE

VALUES: Samsung can achieve its goals in markets where it does not dominate

basically for instance smartphones because they does not claim to know what

will replace today’s products as they become obsolete.

ACTION: Samsung should take this golden opportunity to attract people and

win people’s attention that Samsung smartphones are the best smartphones than

other companies like Sony, Apples and the other prospective competitors.

MABULJUNGJE STRATEGY will surely bring out a special and excellent

result to the sales of Samsung products. Samsung continue to strive for

excellence in creating new high-tech products in order to avoid a loss in market

share in the future. Rather, it is investing heavily to ensure.

To cite a latest example, now Samsung just launched a new smartphone that is

Galaxy Note 2. This can show that Samsung are strive to attract people's

attention and therefore, win their attraction and heart. Moreover many people are

being the loyal user of Samsung Tab and Galaxy Note 2 because of its features.

SAMSUNG ACHIEVING ITS GOALS BY MABULJUNGJE

INTERACTIVITY President of Samsung Electronics America, as a major

pillar of mabuljungje, Samsung will capitalize on interactivity which as in

mobile smartphones with TVs and TVs with the internet. Through this,

Samsung’s future will bring many products that can communicate to each other

as they connect together. With all this, Samsung can definitely get on the

headline and successful to attract people attention and therefore, people will be

rushing to get the product from every outlet and will be dominating for the

market.

QUALITY :In addition, Samsung also take an opportunity to present

consumers with flashy hardware features. In the competition between Samsung

and Apple, Samsung know that it cannot thrive in the long term by merely

offering sharper colors or better sound quality

FEATURES AND PRICING: Pricing power comes only from unique features

and Samsung is putting plenty into discovering the unique features. Samsung,

it has announced its intention to unveil a tablet computer and an app store

similar to Apple’s that will give Samsung control over that content. Samsung

sees apps as the advertising vehicle of the future.

EXPECTATIONS AND AIMS :

In the future, Samsung will definitely produce many magnificent products that beyond your

imagination. Samsung smartphones will continue to launch new design with some special and

unique function. Samsung Electronics will generate the fantastic ideas and to innovate new

things continuously to convince customers that Samsung can dominate the market such as

Galaxy Note 2 and Samsung Galaxy Tab that can make the customer buy them

PRODUCT DECISIONS AND RESPONSIBILITY

Samsung would like to consider public policy issues and regulations regarding acquiring or

product quality and safety, and product warranties. Samsung also make sure the customers get

something that belong to them, for example customers get the warranty of smartphone if the

smartphone got any problems and is in the warranty time.

INTERNATIONAL PRODUCTS AND STANDARDIZED SYSTEM

International product and services marketing face special challenges. Samsung must decide

how much to standardize or adapt their products and services for whole market in whole

world. This make sure that the products are suitable in every country. Hence, the products

which are able to fulfill the needs and wants of consumers can easily be accepted and used by

all people. For example:

SAMSUNG ACHIEVING ITS GOALS BY MABULJUNGJE

The Logical Streamline (Simplicity Mode) Samsung is able to achieve its goals where it does not dominate, such as Smart-Phone

Samsung aims to

double its high end

market share from

5% to 10%

Releasing the Galaxy

S (latest high-tech

communication phone)

More than 100

mobile operators will

offer Galaxy S

For instance, we’d like to observe reasons why Smartphone Galaxy S can achieve it goals

Market Share

Increasing

High Tech

Comm Phone

Ease and Non-Exclusivity

• Winning Side from

Samsung

Smartphone

• Most of another top

smartphone are tied

exclusively to any

single carrier in the

market.

Competitive Features

Samsung may easily

meet its target market

since the hardware

and software features

are pretty competitive

in market.

• Winning Side

• Double market share

will let Samsung to

innovate and survive in

the market better, even

the products not

dominating

For example : Running on

Google New OS’System,

fHD Video Recorder, etc

As the effect of product

categories forward

movement

CONCLUSION

Jumping off from

COPYCAT brand to be the

cutting edge product

leader

Combinations of

Product

Development

Process

Strategy to

solve lots of

challenges in

managing high

tech products

Samsung will be

able to dominate

the market by

their products

development

Question and Answer Session (Q&A)