Presented By: Michael Baccus, Marcial De Castro, Judith Dupin, Monica O’Neil, and José Santillán Marketing Management- MAR 3023-P80
October 5, 2011
Samsung grew its brand equity by 186 percent in just five years from 2000 to 2005.
“Brand equity is the value of the brand name, its worth as an asset to the company.” (Marketing
Principles, 2011, Module 6 p. 1).When new management came into the South Korean based
firm, it scraped the all the various brand names that the company was selling low end electronics
under, and consolidated by branding all of the company’s products as Samsung. Ten years later,
Samsung is a force to be reckoned with to its competitors and a global brand name. However,
the decision to only use the brand name Samsung is not the critical key to its success. Samsung
has focused on innovation and product design to build its brand equity and it is working.
Samsung implemented different innovative ways to inspire and deliver great designs. The
former chairman hired hundreds of new designers, implemented usability laboratories, and
opened design centers around the world. The investment in product design, the
progressive culture, and Samsung’s ability to step outside the box has all been invaluable in
building a great brand.
The critical activity in the process of Samsung’s transformation into a world- beating
developer of new cell phone handset designs and other product line designs was its innovation
with investment in product design and quality. Samsung built its brand into a superior brand by
thinking and acting outside of the box. Instead of focusing on textbook product development
funnels, it focused on more cutting edge methods such as the implementation design centers
staffed with highly trained, creative, and skilled young designers and no bureaucracy to get in
the way of design and innovation. According to Roll (2011), “Samsung has created a strong
brand around innovation, cutting edge technology and world class design.” (para. 1).
Samsung Chairman Lee Kun Hee concluded that “great design and innovation would be the
way to build Samsung into a great global brand,” and he was correct (Marketing Principles,
Module 6, p.1). Instead of forming panels and hiring managers or more marketers to come up
with new gimmicks, he hired hundreds of designers. The designers were from prestigious
colleges of design and had an average age of just 33. The design force at Samsung multiplied
by over 400% to over 400 designers in 10 years. This out of the take on product development
allowed Samsung to transform its product line into world class. Competitors such as Sony have
also followed in Samsung’s footsteps.
According to Kunkel:
“With nearly 250 industrial designers; graphic, packaging, and logotype designers; user-
interface specialists and Web designers working in offices from Tokyo to San Francisco
to Cologne, the Sony Design Center is responsible for nearly 2,000 new products,
concepts, packaging schemes and design strategies every year, driving sales of products
and services totaling nearly $50 billion per year” (Product Description, para. 2).
Although Sony also employs a lot of designers, Samsung still leads the industry in allowing their
designs to inspire innovation.
Samsung’s progressive culture of effective, efficient, and fast implementation is part of
its advantage over competitors. According to the dynamic theory of competition presented in
Marketing Principles (2011): “Suppliers with an insatiable improvement drive are more
competitive.” “Suppliers who implement effectively, efficiently, and faster are more
competitive.” (Module 1 p.6)....