Samsung - Marketing Plan - Academic Assignment - Top Grade Papers

Samsung –Marketing Plan

1. The Company

Samsung has been known amongst the world leaders in the global electronics market. Samsung Electronics,

with its head quarters in South Korea, is the largest manufacturer of electronics in the region and an important

subsidiary of the parent Samsung group. With its LCDs, Set Top Boxes, Cell Phones, cameras, camcorders

various other products, Samsung electronics was able to beat its Japanese rival Sony in 2005, by taking the

position of the most popular brand. Later, the take-over of its American rival Motorola in 2007 made it the

second largest mobile phone maker and enabled it to dramatically increase its sales globally.

The company’s major strength lies in its innovative products, its global network, brand value and the high value

technology incorporated in its products. Its recent quality accolades give it an edge over many of its competitors

as well.(Wikipedia, 2010)

2. Market Trends

2.1. Global

The global slump of the economy in the 2000s has affected more or less each and every industry worldwide.

This has been especially true for the luxury items, financial markets and general investment sector. Initiated by

the liquidity shortfall originated from USA, the financial crunch caused the value of securities linked to housing

finance to go down by a stark change which in turn badly affected the real estate market too. This caused the

governments to adopt expansionary monetary policies and bailouts on an institutional basis. The sub-prime

lending further aggravated the situation by ensuring not way out of the crunch in the short term. Even the largest

of economies experienced a downward pressure on the GDP including an 7.4% and 15.2% decrease in the GDP

in 2009 in UK and Japan correspondingly.

The worst hit sector was, of course, banking and financial services followed by a negative impact on all other

industries as well. This was especially prominent through the massive lay-offs that took place globally.

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2.2. Hong Kong Market

Along with Singapore and Taiwan, Hong Kong is known for commendable manufacturing skills even in

electronics. However, it is known more for its flexible small businesses that are able to respond quickly to

changes in products demanded in the market. This essentially point out a serious threat to any other global

brand of being hit by the problem of imitators very quickly. However, due to the use of simpler technology and

no great value of the local brands as such does open a gate for the world renowned brands to enter the region

and offer products high in quality and innovative in terms of the technology used. Also, the presence of only a

few big players such as Philips, Motorola and DEC give an indication of a large chunk of untapped market

potential.

3. Competitive Environment

3.1. Market Share

On an overall basis, the major competition faced by Samsung is from Sony, Philips, Nokia & LG amongst its

biggest competitors. However, Samsung is a large group operating various divisions and businesses including

those for the cell phones, monitors, digital media devices and 3D appliances. Although it has a pioneering

competitive position with reference to consumer 3D televisions, it has had fierce competition with its rivals in

all other categories. Consider for instance, the market for LCD monitors where Samsung held 16.1% if the total

market share rivaled by Dell with its immediate competitor with a market share of 14.6% (2008 est.) Similarly,

with LG as its major competitor for television sets in LCD, PDP & CRT category and market share 13.7%,

Samsung has led the market with a share of 23% (2009 est.). Table 1, details the competitive environment in

terms of the market share in the electronics industry.

However, in 2005, Samsung earned acclaim when it had left Sony behind in terms of its popularity (Fortune

500, 2009). Later take-over of Motorola in 2007 gave it a competitive edge in mobile phone making thereby

also reducing the competitive pressure.



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3.2. Comparing the Marketing Mix

If we are to consider the marketing mix used by its rivals like Sony for instance, it would be quite evident that it

too uses advertising, personal selling and massive public relations campaigns to leverage its brand in order to

secure profits. Just as Samsung associated with The Olympics, Sony associates itself with various sports series

and other public events to gain maximum consumer awareness. In the promotional arena, the approach is pretty

much the same since it too offers discounts and ‘buy-this-get-this-free’ with its products just as Samsung, for

example, offered a 3D starter kit on purchase of 3D TV or Blue Ray purchase. However, the pricing for both the

brands is at a higher end. While Sony does so by offering value through style, quality, purpose and performance

of the product, Samsung does the same through its technologically advanced offerings high in quality and

innovation.

It is important to note that while most of its rivals in the industry, such as Nokia and Siemens promote their

products mainly through advertising and direct selling, Samsung has had a long history of its association with

sports which has created a positive brand image along with high customer recall.

3.3. Profitability

Fortune 500’s ranking and data about the major electronics companies (Table 2) shows the performance of these

companies in terms of their profitability in 2005. While Samsung made $78,717s million in revenues, the competing firms

such as Siemens made $100,099 million, Sony- $66,026 million, LG- $60, 574 million and Toshiba made $ 56, 028

million as its revenues in the same year. It is quite evident that in this year, Samsung outperformed its biggest rivals Sony

& LG despite an approximate 21% dip in the profits relative to that in 2004.

Samsung, however, has been projected to experience massive profits by the end of 2010. These may be further enhanced

by the exploring the Asia Pacific market which is expected to grow too along with the more developed countries primarily

because of the increasing expected demand for 3D televisions and related devices.



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4. Industry analysis

4.1. Structure & Current Performance

Earlier on, the global electronics industry was mainly about the electricity based products that could perform the

very basic functions. However, now the utility of the product is just not enough. With an increasing

globalization and thus greater exposure to technologically advanced possibilities, there is greater demand for

providing the same products as before with a technology-intensive added value. This makes competition in the

market fiercer as a technology becomes redundant as soon as more and more rivals imitate it and start offering it

at a lower price. This pushes the companies in the electronics business to continuously innovate and upgrade

their products with the latest technology. This would however mean higher costs. Yet, if the value addition is

significant, it may justify a premium price for the technologically advanced product and allow positive returns

despite increase in cost.

4.2. Future trends

Generally and despite the economic down turn which too is expected to undergo a turn- around situation, the

consumer electronics market in the Asia Pacific region is the one likely to exhibit large growth trends

(RNCOS E-Services Private Limited, June 2007). Additionally, China shall be following some big players in

terms of the consumer electronic market growth and is showing signs of expansion already due to economic

development and possibility of low cost production. The 3D technology too would soon become a part of home

theatres thereby allowing the same experience to movie watchers at home, as is available to those visiting

cinemas for the purpose.

As a whole, the global electronics market grew by 4% in 2008, reaching a value of $267. 2 billion and is

expected to grow further by roughly 14% relative to 2008 reaching $306.1 billion in value. However, it must be

noted that countries including Singapore, Taiwan and Hong Kong are progressive with reference to the same

industry but the three countries possess excellent skills in manufacturing while lagging far behind in keeping up

with the quality standards and necessary R&D efforts to in order to continuously innovate and improve to some

sustained advantage (Tilley et. al, 1994). With the introduction of the 3D LED television sets through the



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retailer shelves, for instance, would expose the consumer to a new experience thereby also putting some

pressure on the non-3D TV prices to be brought down.

5. Company’s resource analysis

Samsung has held a leading position in the electronics market worldwide. More than 80, 500 employees (2005

est.) are taken to be an asset for the company and are valued to be the most important value. Tae-Gyun Shin, the

company’s managing director explained Samsung’s HR development to be based on three factors. He said in an

interview,

“Samsung’s HR development is based on three key words: Value, Leadership, and Global competence.“Value”

means value sharing programs which bring together all Samsung employees under one banner. “Leadership”

refers to development programs that systematically identify and develop next-generation leaders. “Global”

means enhancing our employees’ global competencies by developing their global business and foreign

language skills.”(Tae-Gyun Shin, 2007)

This very clearly points towards the company’s commitment to ensuring the personal development of its

employees that in turn ensures maximum productivity and work quality while they work with it. Not just this,

Samsung is strong an organization from the point of view of financial assets as well. In 2006 for instance, it

accumulated $ 78,716.6 million worth of revenues while making a profit of $7,458.8 million. Although this was

nearly a 21% decrease in profits comparative to 2004. The situation by 2009 had improved greatly with the

profits for Q4 2009 recorded to be $3.3 billion. 2010 is expected to be the year of high profits where the

analysts are projecting profits of $16 trillion at year end driven mainly by increased revenues from memory

chips, handsets and flat screen televisions. This has been a result of its innovative and technology intensive

products and the current financial situation and the expected growth in the Asia Pacific region is sure to enable

it to invest more in R&D.

Samsung’s repute as a pioneer in introducing technology intensive products can be well understood from the

event of January 2010 when it announced to become the first mass producer of panels for 3D LED & LCD TVs.

It has successfully been able to reduce the response time of the LED screens such that the 3D images are seem

more natural. According to a research carried out by a related firm, the 3D display market is expected to grow

dramatically to $22 billion by 2018 from $ 902 million in 2008. With this, the expected sale of 64 million units

by 2018 comparative to 200,000 units in 2009 essentially points to the revenues and profits, this company

would be making.



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Tables

Table 1: Competitive Environment W.R.T market share

Source: http://en.wikipedia.org/wiki/Samsung_Group



http://en.wikipedia.org/wiki/Samsung_Group

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Table 2: Fortune 500 Ranking (2005 est.)

Source: Fortune Global 500 (http://money.cnn.com/magazines/fortune/global500/2006/snapshots/1171.html)



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References

RNCOS E Services Pvt. Ltd., June 2007. Consumer Electronics Market Worldwide (2007).

Available at: http://www.researchandmarkets.com/reportinfo.asp?report_id=480997

[Accessed: April 12, 2010]

Chip Chick Team, March 9, 2010. Samsung to Offer 3D Starter Kit with Every 3D TV or Blu-Ray

Purchase. [Online]

Available at: http://www.chipchick.com/2010/03/samsung-3d-starter-kit.html [Accessed: April 13, 2010]

Electronics.ca publications, 2010. Electronics Industry in Hong Kong.

Available at: http://www.electronics.ca/publications/products/Electronics-Industry-in-Hong-Kong.html [Accessed: April 13, 2010]

Tehraninasr, A., Tabrizi, R., Ansari, P., (n.d.). Savvy entrepreneurial firm [PowerPoint Slides].

Available at: http://www.slideshare.net/rezatabrizi/electronics-industry-analysissony


Psysorg.com Team, January 7, 2010. S.Korea's Samsung sees 3.3 billion dollar profit in Q4.

Available at: http://www.physorg.com/news182109978.html [Accessed: April 14, 2010]

Tilley, K., Conway, P., Williams, D., 1994. Hong Kong, Singapore & Taiwan- Electronic industry

capabilities. A view from the United Kingdom

Bromberg. C. & Shin, T., Spring 2007. Unleashing the unlimited [Interview Transcript].

Available at:

http://www.samsung.com/Features/BrandMagazine/magazinedigitall/2007_spring/interface.htm




http://www.researchandmarkets.com/reportinfo.asp?report_id=480997

http://www.chipchick.com/2010/03/samsung-3d-starter-kit.html



http://www.electronics.ca/publications/products/Electronics-Industry-in-Hong-Kong.html

http://www.slideshare.net/rezatabrizi/electronics-industry-analysissony

http://www.physorg.com/news182109978.html

http://www.samsung.com/Features/BrandMagazine/magazinedigitall/2007_spring/interface.htm

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Comments:

1- Future trends

Generally and despite the economic down turn which too is expected to undergo a turn- around situation, the

consumer electronics market in the Asia Pacific region is the one likely to exhibit large growth trends. (where do

you know that? Maybe need to explain a little more or put reference??) Additionally, USA shall be followed by China in terms of the

consumer electronic market growth which is showing signs of expansion already due to economic development and possibility of low

cost production. (why involves USA in this sentence? I maybe misunderstand the meaning of words?) The 3D technology too would

soon become a part of home theatres along with the same experience available to those visiting cinemas for the purpose.

2- references:

Use Harvard style in references and 3 out of 7 from your references are invisible.

You need to add some references after any information you added



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Samsung - Marketing Plan - Academic Assignment - Top Grade Papers