Case Study 3: Samsung Electronics

A case analysis submitted to

Ms. Regina C. Dy, PhD

Contributors:
Aquino, Tonilyn
Estacio, Imelda
Felix, Rizzie Ann
Gimeno, LadyLou
Sandejas, Benedict

In Partial Fulfillment of the Requirements of

Marketing Management (MKT535M)

February 6, 2017

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Contents

I. Statement of the Problem.........................................................................................................3

II. Point of View............................................................................................................................3
III. Scope and Limitation...............................................................................................................3
IV. Objectives.................................................................................................................................3
V. Areas of Consideration / Major Assumptions..........................................................................3
VI. SWOT Analysis........................................................................................................................4
VII. Theoretical Framework............................................................................................................7
A. Four Ps of Marketing...........................................................................................................8
B. Customer Based Brand Equity (CBBE) Model..................................................................10
VIII.Segment / Target / Positioning...............................................................................................12
IX. Alternative Courses of Action................................................................................................13
X. Recommendation....................................................................................................................15
XI. Implementation Plan...............................................................................................................18
VII. References..............................................................................................................................19

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 I. Statement of the Problem

Focusing on long term goals, how can Samsung continue to be a brand leader?

II. Point of View

For this case, the group would be taking the point of view of Jay Y. Lee, who was named

president and successor of his father and Chairman, Kun-hee Lee. The group assessed that Jay

Lee would be responsible for most of the companys plans and reformation of organizational

culture and structure. Since Jay Lee would be the successor, most projects would go through his

authority and has power on deciding matters over new product releases and ideas.

III. Scope and Limitation

The case analysis only scopes the facts and timeline presented in the case.

IV. Objectives

To serve as a guide throughout the analysis of Samsungs case, the group prepared the

below objectives set to be presented and discussed in the course of the groups analysis:

1. To grow the company

2. To protect their brand standing

3. To grow customer base

4. To continue to produce innovative products

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 V. Areas of Consideration / Major Assumptions

Samsung as one of the worlds leading brand has grown to be a producer of consumer

electronics. Through the years, Samsung dedicated time to know what product to produce before

customers know what they want it. Samsungs strong design team has proven their competitive

advantage in providing designs that will cater different taste and culture. In the case, they have

been labelled as a poster child in using design to increase brand value and market share.

Samsung proving its worth as producer and designer of electronics and appliances faces

challenges in consumer electronics. The industry is said to have falling prices, thin margin, fast

product cycles and fickle customers. Despite of its large market share and revenue to the said

industry, Samsung risk its potentials in investing to energy and environment, solar and led, and

medical device businesses.

The main consideration is for Samsung to retain and make its market share and revenue

grow further. Samsung must also continue to establish greater brand identity in designs. Lastly,

for Samsung to take advantage of their fast follower characteristic as a brand and to succeed to

the risk in diversification of their product.

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VI. SWOT Analysis
Strengths
Strong organizational structure-
Pipeline to the top management and
Confucian hierarchy.
Focused training and development
Back to school programs-
Samsung Design Lab.
Designers exposure to different
countries such as Egypt, India,
Paris, Frankfurt, New York, and
Washington.
Vision to be Fast follower and
receptor of all things.
Quality designs with innovative and
egalitarian approach - Samsung has
emphasis in design. Established
reputation and earned recognition in
product designs.
Product reputation- Samsung a trusted
brand in LCD technology and high-end
televisions market. An expert producer
of semiconductor, flat screen, gadget
batteries. The flash technology has
Weaknesses
According to Jim Wicks, Samsung
has improved, but I dont see an
identity in their design that really
speaks to consumers.
Lack of new skills, sales channel,
and customers in new business such
as green technology and health
business.
The Samsung group has no legal
identity. The 83 firms only sit under
the umbrella of company called
Everland.
Samsung has mixture of implicitly
subsidized capital, weak shareholder
pressure and family control. This
made them stick too long
with dodgy decisions.
Samsung being a supplier of parts
and materials in electronic industry
such as smart-phones and tablet
markets. - The flash memory is a
weakness also since Apple uses the
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 been started of Samsung which made said technology and is considered

iPhone and iPad a reality and became the biggest competitor of Samsung

Apples biggest supplier. in terms of hardware components.

Excellent human resource- solid

collaboration of designers and engineers.

Experienced designers and adaptive

engineers. Growing design staff all over

the globe.
Strong financials - Increasing budget in

design and innovations. Billions of

sales. The businesses such as solar

panels and led lighting, biotech drugs, e-

vehicle batteries, and medical devices

requires big capital investment making it

difficult for Samsung rivals to keep up.

Global reach - Samsung has a foot both

in industrialized and developing country.

Continuous research and

development- Beyond hardware

approach. Samsung studies how

consumers actually use products.

Opportunities Threat

Falling prices, thin margin, fast

Green technology is vital to give product cycle, and fickle customer

society a much broader use in of consumer electronics industry.

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 technology. It is also an opportunity to The similar industries in South

drive down the cost of zero-carbon Korea succumbs to endemic

power. corruption and economic structures

Rising importance of environmental
that border on the feudal.
awareness. Similarity of electronic devices
Medical devices and health businesses
design, feel, and features could be an
can reach poor countries and rural areas
intellectual property of others,
with medical equipments and
resulting in litigation and
technologies such as telemedicine and x-
compensation for damages.
rays with less radiation. The business The businesses such as solar panels

can also give drugs destitute countries and led lighting, biotech drugs, e-

cannot afford. vehicle batteries, and medical

Biotechnology is now being used to
devices are promising but also risky.
develop much needed vaccines, new
It can entail threats such as
drugs to combat tough illnesses.
Similar industries in South Korea have oversupply, price erosion, etc.
Presence of cheaper alternatives to
implicit government policies that
consumer electronics (lower class
guarantee big business to tap cheap
and lower quality) but provides
financing from bank sectors.
similar usage but not guaranteed to
Economic growth that increases the
stay at a longer time.
buying power of consumers.

VII. Theoretical Framework

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 A. Four Ps of Marketing

The marketing mix deals with the way in which a business uses place, price and

promotion to market and sell its product.

Product

Samsung has a vast product portfolio and its presence is in several different product

categories. Product categories of Samsung includes- Tablets, Mobile phones (Smart phones,

normal phones), Televisions (LEDs, LCDs. Plasma TV, SMART TV, HDTV etc.), Cameras and

Camcorders, Refrigerators, Air conditioners, Washing machine, Microwave ovens, IT (Laptops,

printers and accessories). Samsung is seemed to have put all their efforts into their products in

order to realize their mission of becoming leading innovators in the smartphone market. They

have added various distinct features to give their products unique selling points, making it

appealing to people who are interested in technology.

Price

Samsung uses various pricing strategies such as skimming price and competitive pricing

because of its presence in different product categories.

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 Samsung uses skimming price for its smartphones wherein it tries to get a high value in

the start before competitors catch up. Once the model is old or any competitor has launched a

similar product, Samsung immediately drops the price.

The price might not be a big factor to wealthy people that Samsung seems to target for its

smartphones, but it still tops line, and its selling at that price. The high price mostly adds to the

idea of exclusivity of a product.

For products, other than smartphones, Samsung uses competitive pricing wherein

Samsung keeps competitive pricing so as to withstand fierce competition.

Place

Samsung is present through various channels in the market. It works on the channel

marketing concept wherein there are three segments. Sales and service dealers, modern retail and

distributors. The sales and service dealers handle key accounts for Samsung and are involved in

corporate sales. These dealers may also open exclusive Samsung showrooms.

Samsung places their products in the best retail seller locations in each of the countries

where they operate. Samsung mainly gets its products to the market through distributors. It sells

its products mainly through mobile operators and widely usage of internet by selling them online

and ship them direct to their customers.

Promotion

Samsung uses diverse forms of promotion in order to maintain its competitive edge over

the other industry leaders. In addition to advertising, Samsung introduces discounts, sponsor

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events, engage with national and worldwide festivals to help the organization progress in

different aspects.

Samsung uses multiple forms of promotions. Samsung as a company believes in pulling

the customer to themselves through advertising but at the same time uses strong tactics to push

the product to the customer through sales promotions.

Thus, on one hand, Samsung uses various marketing vehicles across the year covering

festive season as well as non-festive time. On the other hand, it gives many offers and discounts

to its trade partners to motivate them to sell Samsung above competition. With such a strategy,

Samsungs brand is on the rise so that both, the pull as well as push strategy is working

simultaneously in Samsung.

Samsungs communication strategy in its promotion component of marketing mix shows

exactly who they are targeting and what they are offering to the targeted market.

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 B. Customer Based Brand Equity (CBBE) Model

Building a strong brand has been shown to provide numerous financial rewards to

companies, and has become a top priority of the organizations. Keller outlines the CBBE model

to assist the management in brand-building efforts as well as a guide for marketing research

initiatives.

According to the model, building a strong brand involves four steps:

1. Salience Who are you

Establishing the proper brand identity by establishing breadth and depth of brand

awareness. Samsung is aware that there are many products and services in the market that

are highly competitive market. It is difficult for consumers to distinguish one from

another. But by branding it can help consumers recognize their product, that is why, robust

amount of investment is put into R&D to come up with a distinct product that is unique for

Samsung.

2. Performance/ Imagery - What are you

Creating the appropriate brand meaning through strong, favorable, and unique brand

associations. Samsungs brand performance demonstrates through quality and reliability;

people know that their products are well-designed and stylish, and that they won't let

them down. Samsung engineers are very keen into details to come up with a distinct

feature like sound and usability. They even spent various investments like sending their

designer to an exhibit, opera, and furniture shop in the hope to gain a different

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 perspective in coming up fresh ideas. Meaning to say, that Samsung is serious in

delivering what they promise to their customer by demonstrating strong passion and

commitment.

3. Judgment/ Feeling - What about you

Eliciting positive, accessible brand responses. Samsung puts great deal of effort in

winning customers satisfaction. They will not give a second though if action like global

recall is necessary for the situation, showing customer safety as highest priority over sales

and production.

4. Resonance - What about you and me

Building brand relationships with customers that are characterized by intense, active

loyalty. Brand loyalty means customer loyalty and repeat purchase of a product or

services. When customer is loyal to the brand, they purchase and promote that specific

brand which results to a higher market growth and probability. Recognizing that Apple

core strength is customer loyalty, Samsung is doing the best to build something similar.

Samsung are doing their best to offer best content and services to customer by partnering

with leading global developers to collaborate with content and application development.

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VIII. Segment / Target / Positioning

Segment

Location: Nationwide

Gender: Male and Female

Socio -economic classes: Classes A, B and Upper C

Education and Occupation: College students and Working class

Target

All income segments in the country, young professionals, trendy electronic and gadget

lovers.

Positioning

Samsung Electronics is a firm that provides electronic goods that satisfy all consumers

explicit and implicit needs more than consumer's expectations. Unlike other electronic firms, its

products are innovative and at the same time provides maximum value. As a whole, it has

positioned itself as an affordable luxury.

Samsung, once known to be the low-quality service provider of all time is now one of the

leading mobile companies of the world. Having said that, we can see how it all comes down to

proper brand positioning and innovation, which takes a brand to its zenith.

Samsung doesnt have any particular tagline or slogan for the company as a whole; they

prefer to use unique taglines for each and every product.

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 Through constant innovation and introduction of new technologies, Samsung has been

trying to establish their point of parity. The features of their mobile phone are the crucial part of

their parity.

IX. Alternative Courses of Action

ACA #1: Focus their resources on expanding their product lines in order to capture additional

markets

Advantages Disadvantages

Samsung is already facing stiff As more competitors offer similar

competition from other companies like high quality products, profit and

Sony who learned from what Samsung market share may shrink in the long

did. run

They already have a culture where they

can create products which people may

want

ACA #2: Protect their dominance in their current markets where they are the top brand

Advantages Disadvantages

Losing the top spot for Companies in other markets can use this

certain markets can opportunity to learn from Samsung and develop

snowball and affect its quality products that customers want in other

dominance in other markets. markets

Samsung has to defend o Samsung will have to play catch up to

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 where it is these companies

ACA #3: Protect their dominance in current markets as well as expand to other ventures where

they can also develop products and services.

Advantages Disadvantages

Samsung has to continue being a The cost for R&D in other markets is

leader in their current markets high.

since it affects the publics As more technology developers match the

perception. designs of Samsung, Samsung will have

Expanding to other markets to spend more to predict what customers

equates to growth may want and design for it.

Samsung has the IP and influence

to expand. They can simply share

IP to their other subsidiaries

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 X. Recommendation

Criteria

The group developed a criterion which can be used as a basis in determining our course of

action.

1. Compliance with legal requirements (25)

Being compliant with relevant legislations and other applicable regulations is the absolute

minimum standard that organizations must achieve. The course of action must provide a

rationale as to what organizations should do more than the minimum that is compliant

with the legal provisions of the jurisdiction where it operates.

2. Promotes Customer Satisfaction (25)

The course of action must provide action that establish processes and practices that

encourage customer loyalty and satisfaction.

3. Drives Competitive Advantage (25)

The course of action must support the organization in identifying areas for improvement

and improve strengths to ensure dominance in the market.

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 4. Build organizational effectiveness (25)

The course of action must make a demonstrable commitment to excellence and in

allocating organizational resources that ensure corporate policies are in line with its goals

and objective.

Alternative Compliance Promotes Drive Build TOTAL

Courses of Action with Legal Customer Competitive Organizational SCORE
Requirements Satisfaction Advantage Effectiveness

ACA #1 - Focus 24 23 23 22 92
their resources on
expanding their
product lines in
order to capture
additional markets

ACA #2 - Protect 24 23 23 22 92
their dominance in
their current
markets where
they are the top
brand

ACA #3 - Protect 24 24 24 23 95
their dominance in
current markets as
well as expand to
other ventures
where they can
also develop
products and

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services.

Analysis

Based on the result of our analysis, ACA #3, Protect their dominance in current

markets as well as expand to other ventures where they can also develop products and

services would be the best choice.

With the fast-paced technological advancements, it is important that an organization takes

advantage of the wide opportunities they can get from their investment in technology

development and infrastructure. In the case of Samsung Electronics Co, this is evident on their

efforts of continuous improvement and new endeavor like green technology and health business

expansion. The said undertaking is in line with the companys strategic objectives of making

Samsung a finely tuned receptor of all things that makes its products must-haves in an increasing

competitive marketplace.

Moreover, Samsung Electronics should concentrate on its quality and pricing structure if

it wants to maintain its success. Samsung knew that they should not be complacent to where they

are right now that is why robust amount of investment are put into research and development to

come up with a unique product that would catapult Samsung to the top ranks of global brands.

The quality of Samsung is already good. But it still has to improve its products in order to keep

up with other competitors. The pricing structure has to balance with the quality. With that,

consumers would continue to patronize in buying it. Samsung should always keep in touch with

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consumers, their means of advertising and press releases. It should make the customers always

curious about the product specifications, new features and changes if there are any.

XI. Implementation Plan

WHAT WHO WHEN RESOURCE

REQUIREMENT

Revisit the demographic trends Management/ Human Month 1-2 Manpower and

and buying behavior of Resource/Marketing Financial Resources

Samsung audiences for the past Department

years.

Increase R&D budget in R&D Department/ Finance Months 2-12 Manpower and

coming up with unique product Department Financial Resources

that would catapult Samsung to

the top ranks of global brands.

Aggressive in launching its new R&D Department/ Finance Months 12-18 Manpower and

smartphone devices with the Department/ Marketing Financial Resources

latest technology at an

economic cost globally

Attack the lower end of the Marketing Department/ Months 18-36 Manpower and

market without hurting its Finance Department/ Financial Resources

brand as a high-end vendor.

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Continue to be aggressive in Management/ Marketing Continuous Manpower and

marketing and advertising of its Department Financial Resources

products to develop the attitude

and transmit information so that

it gains response from the target

market and create awareness

VII. References

Four Ps. (n.d.). Retrieved from Investopedia: http://www.investopedia.com/terms/f/four-ps.asp

Keller's Brand Equity Model. (n.d.). Building a Powerful Brand.

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