Introduction to Samsung
Samsung Company is a producer of electronic products which was started in the year 1938 in Korea. It was first started as Samsung General Stores” selling cheap TV’s and other small electronics with high discounts. Many efforts were made by Samsung to develop the overseas market of their products. After undertaking many innovative and efficient ideologies Samsung today became a group of companies which is constantly raising their challenges to the competitors in the range of industry and its performance.
Today’s success of the Samsung group is mainly due to their concentration on electronics, finance, trade and services. Samsung is spread over more than 46 countries and acts as a truly global company. Globalization allowed Samsung to earn more benefits from its new cultures and innovative ideas. Starting with the TV’s and small electronic goods, Samsung developed a wide range of their products like the digital appliances, digital Medias, semiconductors, telecommunication networks and the LCD’s.
The company is a helpful neighbor, good employer and contributes a large to the local economy. Samsung is forming alliances with the leading companies to share its vision, experience and knowledge. Driving factors for the Changes in the electronic marketing of Samsung over a decade Soon after the cold war ended, there started a fierce competition round the globe where the competence of a country was being determined by the development in its technological capability. Samsung was very late to found out the latest technological advancements and hence till 1990’s it remained as a cheap brand in the minds of the customers.
Even though some of the products functionality is same for Samsung and some other companies producing similar products, the Samsung electronics were sold at very lower price due to the cheap brand reputation. The Samsung Company changed its direction with the help of New Management Movement initiated by Kun- hee Lee, the Chairman of Samsung in 1994. He is the person who turned the position of the company. During the late 20th century Samsung developed many sub- brands in the American market such as the Yepp, Tantus, and Plano etc. this was done because the company believed that only the strong brand name reaches the customers effectively (O. C. Ferrell, Michael Hartline, 2010).
This philosophy of the company worked out and many developing companies are still following this technique of releasing sub brands. Under the leadership of their chairman kun- hee Lee, the company had undergone many changes internally and even externally. A marketing orientation was instilled in the company and various teams are formed to provide education and training to the employees and also to manage the marketing systematically.
As a part of this a marketing managing team was created by the company to check the overseas sales and marketing of the Samsung products along with the global marketing team which include the regional strategy team, brand strategy team and the product innovation team. This started a revolution in the brand image of the Samsung group. As a part of its marketing plan Samsung included about 50 sub brands under the brand name Samsung which raised the reputation of the company. The main secret of the Samsung’s success is that it maintained the production almost same but undertaken vast changes and developments in the marketing of their products.
Because of this Samsung is now standing in the top positions as a producer of various electronics. The changes implemented in the marketing of the Samsung increased the sales and profits and resulted in market capitalization. With this advancement in the early 21st century, the company started campaigns and overseas development. Due to globalization the company started its branches in about 46 countries and is successfully making profits (Tony Michell, 2010). Other than development in the marketing of the products, Samsung also implemented many other changes to increase the sales and consumer approach.
Previously the normal mobile phones and other electronics were used just to fulfill the particular needs. But later their usage became a fashion and for this reason Samsung started to produce its products which are highly innovative including the latest technology to attract the customers. Along with the advancement in the products technology, the Samsung Corporation increased the quality of the Samsung products to generate trust among the customers worldwide. Starting with ordinary mobile phones Samsung today is producing a range of varieties of electronics like the 3D TV’s, LCD’s with ultra modern technology and the mobile phones with efficient features.
The telecommunication network products of Samsung are used as a source to the company in reaching the customers efficiently as they became as a part of life. Along with these changes, the distribution channels were altered accordingly for the profit to the company. On an average Samsung implemented many new ideas in various departments of the company to increase its sales and succeeded in doing so. Marketing strategy
Before launching any of the company’s product into the market, first of all the position and range of the market is to be analyzed so as to avoid failure of the product. As the strategic business unit of the Samsung Company employs various strategies to face the competition in the market, the growth rates and threats are to be regularly checked for the maintenance of the company. Samsung also conducts the BCG analysis and ANSOFF matrix analysis for all its products to check the position of their particular product in the market such that if any drawback is found it can be solved to improve the efficiency. Boston Consulting Group’s Product Portfolio Analysis
For any company BCG analysis is very essential as it provides guidance for the resource allocation. The BCG matrix is generally defined as a general management system in a business strategy consulting. The variables of the BCG growth share matrix are the relative market share and the market growth. These two dimensional variables for the products of Samsung can be explained using four different factors like the question mark, star, cash cow and the dog.
Figure 1: calculation of the relative market share and market growth rate. Question marks: these are the products of Samsung which have not achieved a prominent market position. These products consume a large of cash inflow but the profit with these are very less as most of the customers are not aware of such product or may be not interested in purchasing. Samsung’s products like the 3D televisions and the ultra latest LCD’s are very costly and cannot be afforded by a middle class common man. Only the higher society can be able to purchase such products.
This causes low market growth of such products. So the products which are found to have low market growth can be made to reach most of the customers by making certain alterations like the reduction of the cost, providing lifetime free services etc. Stars: stars indicate the products with very high market growth. The products of the Samsung like the semiconductors, home appliances, and mp3 players are mostly sold in almost all the countries as they are feasible to the common man.
These products results in high profits to the company. Cash cows: these include the products that have a vast profitability and also require low investment compared to the other products. In Samsung the mobile phones and the telecommunication networking accessories are considered to be the cash cows as they require less investment and results in more profits. In fact Samsung occupies the second position in mobile market after Nokia.
Dogs: these products of Samsung like the TFT screens and the integrated systems come under this category as they have relatively very little market growth as well as profit to the company (BCG matrix, 2009) Figure 2: The BCG growth share matrix.
ANSOFF’s growth matrix Ansoff matrix of a company provides information regarding the market and the product choices available to the company and to achieve the growth objectives. This can also be called as product or market matrix in some cases. When the Samsung Company is about to launch a new product in a new area or existing area the market position should be analyzed such as to prevent any failures.
Figure 3: Ansoff matrix Market penetration: this indicates the feasibility and penetration of the Samsung products into the market with the existing products of the company. This analysis is conducted by the company to estimate the sales of their present products like the telecommunication network systems and to initiate the steps to further increase the sales of those products.
Market development: this is one of the important steps in the development of a company. Samsung always tries to attract more and new customers towards their products and this can be achieved by selling the existing products like the mobiles, mp3 players and laptops etc. in the international markets which may exploit new range of customers. Product development: this is the crucial step in the development of the company sales and marketing.
In Samsung, the R&D department always strives to develop new and innovative products with latest technology and economical to the buyers as well as sellers. Now a days Samsung is developing products which go green to protect the environment. Diversification: diversification indicates the movement of the movement of the company from its current place and current products (Ansoff analysis, 2009). Market segmentation
Samsung uses segment marketing which helps in designing their products in a better and efficient way and also delivering them properly to satisfy the needs of the customers. Samsung group always analyses the market segments which contains the consumers with similar set of requirements. The changes in needs of the users in the mobile technology occur often enough.
Samsung always tries to reorganize their products often so as to meet the demands of the customers. The market segmentation in Samsung is of three types based on customer characteristics and requirements. They are the geographic, demographic and psychographic segmentation. In the process of geographic segmentation, the mobile phones of Samsung are organized and marketed according to the geographical regions and global functions. The products of Samsung were sold only in some countries during the early 21st century.
But today they are sold over 46 countries round the globe. Samsung has good brand recognition even in rural areas. It has even developed the distribution and marketing to various geographical areas for further targeting of more and more customers. Samsung group intended to reach all the groups of the customers of all genders, ages, generations etc round the globe. These are considered as the demographic segments of the company.
Samsung divided the market into segments using the above techniques. They are: Social contact seekers: People who desire a mobile phone that provides the connectivity between the persons in the form of voice or text. Self-expressionists: People who desire a phone that shows their image or video according to their lifestyles.
High-flyers: This segment deals with the people of age group 25-45 who desire a mobile for business opportunities, emailing to improve work efficiency and performance. Furthermore by targeting the sales of the mobile phones in a particular local area Samsung is improving their sales effectively. With the help of market segmentation, the company can analyze the needs of the particular segments of the market such that they can be fulfilled easily. With the segmentation of the market, the marketing mix of the mobile phones is also estimated and managed.
The types of mobile phones which are mostly used for texting are available for fewer prices, at all places and need less promotion. The mobiles with high fly characters need more promotion with high price and the customer demand of such phones is comparatively less. Hence Samsung group is now in this top position with their continuous efforts and appropriate strategy in production and marketing.
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- Tony Michell (2010) Samsung electronics: And the struggle for leadership of the electronics industry, John Wiley and Sons Publishers, pp. 256