MARKETING MANAGEMENT

CASE – 1 GROUP 06

Samsung Electronics was founded in 1969 in Suwon, South Korea as Samsung Electric Industries originally manufacturing electronic appliances such as TVs, calculators, refrigerators, air conditioners and washers.

Today, Samsung brand is the best known South Korean brand in the world and in 2008.

Business week rated Samsung as 21st on the Top 100 Best Global Brands 2008. Samsung overtook Japanese rival Sony as the world's leading consumer electronics brand.

history

PRODUCT

PROMOTION

PricePrice

4P’s IN MARKETING

PlacePlace

In 1970, Samsung Electronics made cheap 12-inch television sets under Sanyo label.

Now, capturing the number one position in the global memory chip market and pioneering the development of flat-screen displays, plasma TVs, multifunction cellphones, and other digital devices.

Product

Semiconductors : DRAM, SDRAM, flash memory, and hard drivesDigital displays : LCD displays, Plasma displays, and OLED displaysHome Electronics : TVs, DVD players, Blu-ray players, home cinema systems, set-top boxes, and projectorsMobile devices : mobile phones, MP3 players, digital cameras, and camcordersComputing products : monitors, laptops, UMPCs, CD and DVD drives, laser printers, and faxes machine; andHome appliances : refrigerators, washing machines, microwaves, ovens, vacuum cleaners, and air conditioners.

Product

Samsung invested a lot of money in research and development, in order to meet what customers needs and wants.Samsung spent about 9% of revenue, amounting to around $5billion, in 2005 in research and development.

product

“design awakeness all your senses”.

United States Top 5 Innovators 2008

Rank

# of Records

Company Country of Origins

1 7404 SAMSUNG ELECTRONICS

KOREA

2 6576 IBM UNITED STATES

3 2931 MICROSOFT UNITED STATES

4 2421 TOSHIBA JAPAN

5 2019 CANON JAPAN

Europe Top 5 Innovators 2008

Rank

# of Records

Company Country of Origins

1 2753 SIEMENS GERMANY

2 2619 BOSCH GERMANY

3 1475 SAMSUNG ELECTRONICS

KOREA

4 1250 DAIMLER GERMANY

5 905 RENAULT FRANCE

These rankings comes from IP Solutions, part of Thomson Reuters : The world’s leading source of intelligent information for businesses and professionals.

Samsung sells product with price that worthed, if we compared it with the functions, benefits and technology.

Samsung is in the process of building an image as “a stylish, high quality brand commanding a premium price”

Samsung has its own stores which can be found around the world. Not only in Asia, but also in America, Europe, Australia, and Africa. At the stores, we not only can buy the product that sold, but also feel the experience of digital lifestyle.

PLACE

One of Samsung’s store in America

Samsung also has other distribution channels: Best Buy and Circuit City, who known as quality-oriented electronics speciality stores.

Bell Microproducts, who known as one of the world's largest storage-centric value-added distributors.

PLACE

Product placements

Internet advertising

Sponsorships

Hotel chains (such as Hilton), where most in-room technology was now dated and required early replacement to retain competitive advantage.

The Summer and Winter olympics games

Chelsea FC shirt sponsorship deal Horse jumping (Samsung Superleague).

In 2005 ,the firm devoted nearly 15 % of its media budget allocated to page -topping banner ads on over 400 Internet sites

Link to mainstream entertainment : Fox’s movies Fantastic Four

Display in the film

Existing knowledge and experience of electronics market

Strong global presence with strong brand and customer base, in 2009 according to Interbrand Global value of Samsung’s brand is US$ 17,518 million compare its competitor, Sony, which is US$ 11,953 million.

2009 2008 Brand Country of Origin Sector Brand

Rank Rank

Value Value Value

Well diversified and differentiated product line, to meet changing customer needs. Samsung electronics has 4 business areas to cover customer electronic needs.

Design with an attractive styling that catching the pulse of customer, as the result of the development of Samsung‘s new products that involve team of product designers.

Market share: Global market share of mobile phone increase from 18% in 2004 to 19.1% in 2009. Memory chip Industry is 27% in 2009 compare with 21% at the end of 2008.

It is the biggest manufacturer of liquid-crystal display panels with 23% share in 2005, increase to 26.2% in Q1 of 2009. 2009 Figures

Loyal customer & customer satisfaction: Samsung Electronics reports that its “Anycall” mobile phone topped the American Customer Satisfaction Index (ACSI) (2005)

Cost Competitiveness by mass Production

Samsung Electronics expanded production dramatically to become the world's largest manufacturer of DRAM chips, flash memory, optical storage drives

TechnologyWith an excellent research and development capabilities, they spend a high percentage of revenue on R&D. It resulted in global leadership in the television segment, and in improving its position from the third to second player in mobile phones with their innovative products.

Customer perception of weak product attributes like Durability

Different perception on “worth the price” product on each person that difficult to cover.

Not pro-active coming out with unique and leading model

Focus on mass market instead of niche market

Huge investment on Research & Development

Consolidated Financial Statement years ended Dec 31, 2007 and 2006 (audited report)

1 US$ = 938 Won

2007 (Mill won)

2006 (Mill won)

Sales 98,507,817 85,834,604

Research expenses 2,353,844 2,252,848

Ordinary development expenses

3, 720, 115

3,461, 914

Total R&D 6,073, 959

5,714,762

R&D/Sales 6.17 % 6.66%

Increasing on electronics consumer market Strong customer demand for innovative products

& value-added features High % of Younger population, which can be

expand a new market now and in the futurePopulation by Age and Sex, More Developed Countries: 2009

Increasing competitionDRAM (Q1-2009)

Rank

Company Market Share

1 Samsung 34.3%

2 Hynix 21.6%

3 Micron Technology 14.6%

4 Elpida Memory 14.2%

5 Qimonda 4.8%

Increasing competitionLCD TV (Q3-2008)

Rank

Company Market Share

1 Samsung 20.2%

2 Sony 13.8%

3 Sharp Corporation 10.2%

4 LG 9.3 %

5 Phillips 7 %

Increasing competitionMobile phone (Q1-2009)

Rank

Company Market Share

1 Nokia 36.2%

2 Samsung 19.1%

3 LG 9.9 %

4 Motorola 6.2 %

5 Phillips 5.4 %

Decreasing Operating profit margins

Consolidated Financial Statement years ended Dec 31, 2007 and 2006 (audited report)

1 US$ = 938 Won

2007 (Thousand US$)

2006 (Thousand

US$)

Sales 105,018,995 91,508,107

Cost of Sales 75,566,005 64,025,507

Gross Profit 29,452,990 27,482,600

Selling, General and Adm exp

19,886,587 17,750,164

Operating Profit 9,566,403 9,732,436

Gross Profit Margin 28.05 % 30.03 %

Operating Profit Margin 9.1% 10.6 %

Economic Slowdown, makes demand for electronics product weaken.

The conclusions drawn from the SWOT analysis were that Samsung’s strengths carry more weight than its weaknesses. If Samsung can properly exploited opportunities that exist, it will navigate the threats with no significant difficulties.

Yanni PutriM987Z255

Octawati BuntaranM987Z249

Phailin ThampramuanM987Z216

Nguyen Pham Nhut ThienM987Z240

Nong Hong SaM987Z231

Rahul KohliM987Z207