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Samsung china case
 

Samsung china case

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http://ideassup.blogspot.kr/

http://ideassup.blogspot.kr/
http://blog.naver.com/supsupbee

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    Samsung china case Samsung china case Presentation Transcript

    • Questions for Samsung China Case Q1. Major problems Samsung faces as it tackles the television market in China? Q2. How would you segment the Chinese TV market? Q3. What should Samsung do in terms of STP Q4. Suggest Samsung to adopt?
    • Samsung China: The Introduction of Color TVInternational Marketing2008120000 Yi Yong Sup2008120000 Yi Yong Sup
    • 00 Contents Contents  Introduction  Problems  Segmentation  Strategy  Suggestion  Current Situation
    • Introduction
    • 01 Introduction Environment The Macro Environment  The Micro Environment • China is socialist state. • At 1995 China can produce 18,000,000 TV • Competition Among Governments • Prefer TV Size 18” 20” 21” : Self-Interest vs National Interest • Difference in Emphasis on Market Share Economic Profitability vs Social Profitability • The Over Employment problem 17" 29" 4% 2% 25" 11% 18" 23% 21" 36% 20" 24%
    • 01 Introduction Environment 250 200 1501994, China had 300millions households Population 100Just 41% of the households had color TV TV Owners80% of 80million urban households owned color TV 5028% of 220milion rural household own color TV 0 Rural Urban  Rural area mostly prefer(can afford) small TV sets 19” or 21”  First mover enjoy advantages Consumers had a tendency to be loyal to a first mover’s product  Cheap labor  Large market potential (rural area)
    • 01 IntroductionHistory of TV Braun tube TV (CTR) Cathode Ray Tube Shot Electron Beam to all screen Use lots of electricity LCD Liquid Crystal Display Lots of Liquid Crystal Open Close 4000 3500 3000 PDP 2500 Plasma Display Panel LED 2000 Lots of Liquid Crystal PDP Light Emitting Diode 1500 Turn on & off Use LED at the Back 1000 More Electricity LCD 500 But clear picture 0 2011 3/42011 1/22011 1/4 2010 2009 OLED Organic Light Emitting Diodes Change color it self AMOLED Active Matrix Organic Light Emitting Diodes Control OLED
    • Problems
    • 02 ProblemsMajor Problems Samsung faces as it tackles the television market in China?  Chinese Govt  Product differentiation brand recognition  Smuggling PiracyCompetition• Sony Matsushita (First mover) Brand recognition High-end consumer market share• Japanese firms expand production (19->30)• Late mover disadvantage (customer loyalty)• China indigenous firms focused on low-end market segment Market Share Others Sony&Matsushita 0 10 20 30 40 50 60 70 80
    • Segmentation
    • 03 SegmentationSegmentation • High-end: Japanese firms, especially Sony and Matsushita with market share of 75% combined. Sharp, Sanyo, Toshiba, Mitsubishi, JVC, and Hitachi had also established significant market share • Medium-end: Partly by multi national corporations and partly by local firms. • Low-end: More than 20 indigenous firms
    • 03 SegmentationTV Size Segmentation - 17~29 inch TVs were available - Demand for small size TVs were shrinking, while mid~large screen color TV market was growing rapidly - Together the 20-inch and 21-inch screen sizes represented 60 per cent of the total in 1994 - Chinese firms concentrated on the popular sizes (18~21) 17-inch or less 18-inch 20-inch 21-inch 25-inch0% 20% 40% 60% 80% 100% 29-inch
    • Strategy(STP)
    • 04 StrategyStrategySamsung China:- Should target high-end market- ”Premium” brand image- Aligns with Samsung’s commitments at the time Vs.Korean Headquarter:-China’s rapid growth-Hard to improvelow-end market started out with low-end from the beginning-Should target brand image when-per capita income is only $353-Must build competitive advantage over Japanese firms-Competition with local firms is easier-Need to increase marketing and R&D budget (Sony invests heavily on these)
    • 04 StrategyStrategy - Another plausible market: low~mid-end large screen TV - Chinese firms only have expertise in 19~21 inches TV sets - Samsung has technical advantage in large screen TV production
    • Suggestion
    • 05 SuggestionChina 1. Consumption of polarization 2. New Consumer group (want to show one’s power, money) 3. Rapid urbanization 4. Thirties led consumption of car, leisure, appliances 5. Twenties are interested in advanced tech, IT technology
    • 05 SuggestionChina Customers 1. Compare with neighborhood, keep face 2. Prefer quality guaranteed foreign products (High end products) 3. Before purchasing, there is on significant impact of reputation from others 4. Large regional differences (Income level, Cultural differences) 5. Quite sensitive to national pride 6. Sensitive to price (even if is low or high)
    • 05 SuggestionSamsung : Where should Samsung go? China (Low end) Japan (High end) Advantage Advantage High demand in rural areas Differentiation from local firms Fast cash conversion cycle Increasing purchasing power Existing production facilities High added-value per unit Loyalty of consumers in low-end market Samsung Electronics global awareness (Tend to keep buying from the same firm) economy of scale (Europe, North America) Disadvantage Disadvantage Low profit margin Loyalty to Japanese firms Market might change to high-end centered in the Replacement of production line long run High promotion cost expected (for brand image) Fast growth of state enterprises Collision with the Chinese government local firms have dominance in low-end markets (domestic market-centered vs export-centered)
    • 05 SuggestionBrand Repositioning : High end market  Follow the Trend Design  Product Advantage *(cell phones) High quality  Better technology (Develop New Tech : LCD) Low price quality ratio  Bigger size Ex) Samsung vs Sony Consideration Criteria at China Brand Quality China Company growth is so rapid Life Making New Single Brand Design Which target low end marketFunction To protect advanced image of Samsung Sound (Not just cheap product image fresh and easy brand) *(PUMA) Usage 0 10 20 30 40 50 60
    • 05 SuggestionMarketing : To make Positive Brand Awareness  Active support of cultural industries *(LG Concert) Cultural Marketing  Naming, designing (Orion, Whisen)  Logo, Slogan, Package  Contribution to society, build positive image  Localization of production personnel  Advertising should be attractive to customer - Loyal to specific brands - High Quality *(Korea Tire, Orion) - Chinese sense of pride feel proud to buy samsung - Using Celebrities *(Amore Pacific) - Holiday Labor day, Dano, Harvest fest, National day
    • Current Situation
    • 06 Current SituationCurrent Situation2005~2008 : First China Companies Cut price Market Share 80%Follow : Korea Japan companies Low price strategy (2005 Samsung 40” TV 24000yaun 5990yaun 70%) Market Share 50%~60%ButThe war of cutting price made hard time2007 Sony Samsung recorded deficit.
    • 06 Current Situation Change in TV TV Size 160 140 40"~ 120 100 30"~39" 80 60 2005 40 20"~29" 2004 20 0 10"~19" LCD TV PDP TV Projection TV 0 20 40 60 2004 20052008• LCD TV 85%• PDP TV 15% After 2008 Global Crisis China companies start to cut Price 30% decrease 2006년 China market share get over 50% 2009년 68% of the market share is China Company
    • 06 Current SituationRecent Market Size • 2012 4/4 China TV Market 12,690,000 12% increase from 2011 4/4 27% increase from 2012 ¾ 9,960,000 (Price cut) • 2012 More than 40,000,000 Color TV will be sale • LCD TV 89.5%
    • 06 Current Situation China Company World TV Market Share  Recently China Companies TCL 6 Hisense 8 Other Skyworth 10 14% Korea  Such are in Global Top 10 ChangHong 13 China 30% Konka 14 20% Japan  Low cost + China Market 36%  To become worlds top China Companies are entering new emerging market (India, Pakistan, Sri Lanka, the Philippines, South America, Egypt, Africa) KonkaChangHong Skyworth 2011 Hisense 2006 TCL 0 100 200 300 400 500 600 700 800
    • 06 Current Situation TV Sale 600 500 400 300 200 100 0 Hisense Skyworth TCL ChangHong Konka Haier Sharp Sony Samsung LG China TV Market is 20~25% of World TV Market Inside China Samsung has market share 3% CF) 42” LCD TV Price Samsung : 8000yuan (1,450,000won) vs China Firms : 500yuan (940,000won)
    • 06 Current SituationChinaChinaChina  China is still big market  New technology AMOLED  More Big Size  TV Technology Internet access, variety of contents, cloud computing, M2M communication  三罔融合 Fusion of 3 network (TV. Internet. Communication)  以舊換新 Buy new TV = Govt give 10% of price  Samsung is… Smart TV, 3D TV Also making low price model
    • Q&A
    • Thank You