Case Study - III
Samsung – The Making of a Global Brand
Q. No 1. By 2002, Samsung was rated as one of the top 3 players in the global mobile handset market. Analysts attributed Samsung's success to its marketing initiatives. Discuss the role of marketing in Samsung's success. Answer:
Samsung's vision was to become the leader in the emerging digital convergence era, which is defined by two trends: combining different technologies in one product, and linking multiple technologies through one network. Samsung made a huge transition from being primarily a low-end hardware manufacturer, focused on the business-to-business market, to a high-end manufacturer focused mainly on the business-to-consumer market. Many consumers associated Samsung product with poor quality. To change this perception of its product the company initiated a process of restructuring with careful study and changes in the marketing mix as follows:
The company changed its strategy from lifestyle segmenting instead of technological segmentation. Samsung did an extensive market research and manufactured products that reflected their lifestyle instead of those that had specific technological features. Using lifestyle segmentation, the company divided the market and positioned its products. It carefully focused on the following attributes of product: Quality: Company emphasized in creating quality product to change the existing image of the product in the market. They implemented various quality initiatives such as Six Sigma and manufacturing initiatives such as assembly manufacturing to enhance output through optimal utilization of resources. New Product Development: Innovative and technologically superior products were introduced. It developed innovative products (considered fun and high end products) for the mobile phone sector in accordance with customer preferences in local market. Samsung also launched a 50-gram phone, which was said to be world’s lightest phone. It could be worn as a wristwatch and it had facility of giving voice commands. Analysts felt that though this kind of product did not generate volumes, it helped Samsung project itself as a high-technology company. Packaging: Samsung products were very stylish and also won Industrial Design Excellence award in 1996. Product Line: Samsung introduced wide range of product line in 17 different product categories Branding: Samsung changed its logo with the extensive study in choosing color and background to represent stability, reliability and warmth. The logo even symbolized advancement and change. Accordingly, it launched various brand strengthening strategies across the globe. One of Samsung’s major global branding strategies is Olympic sponsorship.
Samsung consolidated all advertising with a one agency to create a single worldwide image. Their strategy is a mix of a “pull” and “push” – communication and brand value induce the consumer to buy the products at the channels, and targeted promotions and incentives induce the channels to sell. Samsung Electronics Corporation (Samsung), entered into an agreement with the International Olympic Association to sponsor the 1998 Seoul Olympics. Samsung launched its first advertising campaign – Noble prize Series. This ad was aired in nine languages across Europe, the Middle East, South America and CIS countries. For effective global marketing and branding, Samsung established a new organization to deal with its integrated global marketing activities. Eric B Kim, who used to work at IBM, was recruited to lead the Global Marketing Department. One of his most important decisions was to cease all existing contracts with 55 advertising agencies and to sign a $400 million contract with one ad agency, FCB Worldwide. Since then, Samsung has unveiled a series of corporate branding campaigns and the slogan, “Samsung DIGITall: Everyone’s invited.” The campaigns were launched across all countries, which involved the sponsorship of events at...
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