SAMSUNG: REDEFINING A BRAND
Fan Ye and Christian Kim prepared this case under the supervision of Professor Robin Ritchie solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality.
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J. S. Park sat back in his chair and contemplated the challenge ahead. As president of Mississauga, Ontario-based Samsung Electronics Canada (SECA), he had been charged with developing a strategy for managing the evolution of the Samsung brand in the Canadian market. Initially, he had felt that this would be little more than a matter of reallocating promotional dollars and updating the company’s advertising messages. Recently, however, he had begun to wonder whether changes might also be needed to the company’s product line, pricing levels and distribution strategy. It was late October 2003, and the December fiscal year-end was fast approaching. Park knew he would need to have to have a complete plan in place well before then.
SAMSUNG: A VALUABLE BRAND
Samsung’s emergence as a leading global consumer brand was regarded as one of the great success stories of the past decade. Samsung had been named the world’s fastest growing brand by consulting firm Interbrand in each of the last two years. During that period, the estimated value of the Samsung brand had risen from US$6.37 billion in 2001 to US$10.85 billion in 2003 (see Exhibit 1). A major factor behind this impressive growth had been Samsung’s effort to redefine itself as a vendor of cutting-edge, “gee whiz” consumer technology. This
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brand repositioning was seen as vital to the company’s future success, and remained a key corporate objective.
Despite this success, senior executives in Samsung’s head office in Seoul, Korea, believed that much work remained to be done in their effort to redefine their brand. While the Samsung name had become more familiar and more favorably regarded among consumers, it still carried many strong associations with the company’s past, when Samsung’s consumer product line consisted primarily of low- to midrange products sold at affordable prices via a hodgepodge of retail channels. Largely for this reason, many North American and European consumers still saw the company as a follower rather than a leader in bringing new consumer technologies to market.
To overcome this problem, Samsung executives had directed country managers, such as Park, to “take the necessary steps to establish Samsung as a premier consumer brand” in each of their respective markets. Park knew that there would be many obstacles to achieving this, and was concerned about a number of issues: How much would this brand repositioning cost? What changes should be made to Samsung’s marketing mix? How might Samsung’s distributors, competitors and existing customers react to this attempt to move the brand further upscale? THE SAMSUNG GROUP OF COMPANIES
Samsung Electronics Canada was a wholly owned operating subsidiary of Samsung Electronics, which was itself part of the Samsung Group, one of Korea’s largest and most respected “chaebols,” or industrial conglomerates. Founded in 1938 as a small trading company, Samsung had...