Samsung case study


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Samsung case study

  2. 2. TABLE OF CONTENTS1.1 Acknowledgment1.2 Introduction1.3 SWOT Analysis1.4 Segmentation strategy1.5 Market Targeting1.6 Positioning Strategy1.7 Product strategy1.8 Price strategy1.9 Value chain strategy1.10 Promotion strategy1.11 Financial status1.12 Recommendation to management1.13 Attachments of Samsung Products
  3. 3. ACKNOWLEDGEMENT Above all i would like to thank“ALMIGHTY ALLAH” whose guidance let me courageous atevery moment. I believe that he is the only sovereign authority who has the control of everything. I extend my humble and deepest appreciation to my Respected Instructor M.A. Buttfor thekeen interest taken by him in the completion of this report. He has been a constant source ofinspiration and great help to me. His precious advices, instructions and knowledge of subject helpedme immensely. I am highly thankful to The Authors of Strategic Marketing, David Cravens and NigelPiercywho were so helpful and provide me with necessary information and technical support whereever required in their text book.
  4. 4. INTRODUCTIONSamsung Electronics is a South Korean multinationalelectronics and information technologycompany headquartered in Samsung Town, Seoul.It is the flagship subsidiary of the Samsung Group. With assembly plants and sales networks in 61countries across the world, Samsung has approximately 160,000 employees.In 2009, the company took the position of the world’s biggest IT maker by surpassing the previousleader Hewlett-Packard.Its sales revenue in the areas of LCD and LED displays and memory chips is number one in theworld.In the TV segment, Samsung’s market position is dominant. For the five years since 2006, thecompany has been in the top spot in terms of the number of TVs sold, which is expected to continuein 2010 and beyond.In the global LCD panel market, the company has kept the leading position for eight years in a row.With the Galaxy S model mobile phone, Samsung’s smartphone lineup has retained the second-bestslot in the world market for some time. In competition to Apples iPad tablet, Samsung released theAndroid powered Samsung Galaxy Tablet.
  5. 5. SWOT ANALYSIS OF SAMSUNGSamsung Group is one of the largest industrial groups in South Korea, operating through a networkof subsidiaries world.The company interested in more than 20 affiliates, and focuses on electronics, finance and serviceactivities. Samsung electronics is one of the world’s largest manufacturers of random-accessmemory chip.STRENGTHSCustomers are loyal and appreciating the brand. Samsung is enjoying very good position against itscompetitors. The company is maintaining very good relationship with its suppliers. The company isalso maintaining with laborers.Samsung is a financial strong and Stable. The production processes and procedures of inventorymanagement are consistent with industrial standards.WEAKNESSESSamsung is facing hard competition. South Korea’s labor unions are strategically linked forcollective bargaining and negotiation.Samsung need improvements in defining the vision, mission and strategic corporate objectives.Marketing management needs improvement in all the facts of marketing.HRM also needs improvement in all the facts of human resources management.OPPORTUNITIESThe economic condition of South Korea seems favorable. Samsung is interiorizing the social shifts.It is having constant policy given by the government.Samsung is reasonable equipped to take care of technological changes.Samsung is maintaining good international relationship with other countries and the local.THREATSThe legislation has been passed frequently related to industry. Technological transformation takesplace in the industry was very high.Regulatory issues and safeguarding of property rights was main threats in legislations.
  6. 6. STRATEGIC OBJECTIVES OF SAMSUNG ELECTRONICSSEGMENTATION STRATEGYMarket segmentation has three levels including 1. Strategic Segmentation-vision, strategic intent and product benefits 2. Managerial Segmentation-resource allocation, alignment and planning 3. Operational Segmentation-Marketing programs such as advertising, sales and distributions.Segmentation in the market-driven strategy process is segments, value opportunities, new marketspace, matching value requirements with capabilities, market targeting and strategic positioning.Activities of market segmentation are: 1. Defining the market to be segmented. 2. Identifying market segments 3. Forming market segments 4. Finer segmentation strategies 5. Selecting the segmentation strategy MARKET TARGETING The market targeting options include a single segment, selective segments, or extensive segments. When segments are not clearly defined, product specialization or product variety strategies can be used. Market targeting decisions need to take into account product-market life cycle stage. In emerging market stage risk and uncertainty is too high, in growth stage benefits from prior experience but it is more intense than emerging stage, and in mature stage multiple targeting strategies can be done such as product variety or product specialization. POSITIONING STRATEGIES The concept to position the brand may be based on the functions provided by the product, the experience it offers or symbol it conveys. Developing positioning strategy requires integrating the product, price, value chain, and promotion strategy to focus them on the market target. The positioning strategy matches the firm’s capabilities with the buyer’s preferences.
  7. 7. Due to Samsung’s superiority in the general TV market, the threats as you can tellareminimal. However, in the strategies and opportunities sections you will find what we aredoing toreduce the risk of these threats having an affect on Samsung’s market share.Developing apartnership with Microsoft will be a vital component to developing the 3Dgaming contentavailability, which is the only relevant competitive advantage other thanpricing. As Samsungintroduces new 3D products to the market, the price of therecurrent products will drop, making themmore readily available to lower class consumersand expanding the target market for their 3Dproducts.4.6 Marketing MixProduct StrategySamsung offers the most diverse product mix in the 3D market, offering LED,LCD and Plasma 3DTVs. Samsung’s cash cow product in the 3D market however, isthe LED 9000 series.Features-55” or 46” class LED backlight display-.31” thin, the thinnest TV available-The mosttechnologically advanced television remote, with which,you can stream live television to if youleave the room of the maindisplay and view content directly on the LCD screen on the face of theremote Advantages-The distinct advantage to buying a Samsung 3D TV for theconsumer is the knowledge that theyhave bought the most cutting-edge, technologically advanced TV, in the 3D market.-The remote isthe only one of its kind, offering consumers a distinctfeature they cannot get from any of SE’scompetitors.-Samsung’s 9000 series is the thinnest TV ever produced.Samsung offers the best 3D packages, consisting of 3D starter kits, 3D home theater surround sound,3D capable blue rayplayers, and the highest quality 3D TVs.Benefits-Among the benefits of this product, the increase in customer satisfaction, due to the quality of theproduct, will be unmatched bycompetitors.Because Samsung produces such a diverse product mix,they can meet all theneeds of the 3D TV consumers with the products they offer, at a verycompetitive level.Price StrategyThe price of the 9000 series is $5,999. However, Samsung’s diverse product mixof 3D TVs rangesfrom $1,200-$7,000.
  8. 8. Promotion StrategySamsung has launched various advertising campaigns, spending billions of dollars across threecontinents, North America, Europe and Asia. Eight billion dollarshas been spent in Europealone, and three billion in Asia. Neither of which compare tothe twelve billion dollar campaignlaunched in the North America, predominantly the US,from where 66% of the 3D TV marketexists.They also have and will continue to use celebrities such as singing group, TheBlack EyedPeas, to promote their products. They use these celebritiesinadvertisements seen by the public, butalso at some of there biggest events in whichthey display the product and allow the consumers at theevents to experience Samsung.These products will be sold mostly online, where customers can find deals for free shipping and setup. This also offers consumers the opportunity to analyze reviewsand physically see features of ourproducts rather than hear them from a retail storeassociate.Samsung’s products will not be offered inwholesale stores or super centers likeWal-Mart or Target, but the consumer will have theopportunity to purchase them inspecialty electronics retail stores like Best Buy and HH Gregg.Market Research Findings1. Video Game MarketBecause we intend on entering into a partnership in the future with Microsoft todevelop a 3D gamingsystem, researching the gaming market was essential. Accordingto DMW Media, global video gamesales totaled 41.9 billion dollars in 2009 and areexpected to grow 10.3% to 68.3 billionin 2012. Game console sales are expected toreach 34.7 billion dollars in sales by 2012 with a 6.9%annual growth rate.2.What leads us to believe we can sell 3D TV’s in this market?According to FutureSource, 3D TV sales have been healthy and are beginning tosurpass HDTV salesat the same point in HDTV’s life. FutureSource also says that bythe end of 2010, 6.2 million 3DTV’s will have been sold worldwide, with 1.2 million of those being sold in Europe. 10 million areexpected to be sold in 2011, and 50 million bythe year 2015.3. Focus GroupTo gain a better idea understanding of the consumer market, we organized afocus group. The focusof the study was on what the current consumer felt about the 3Dproducts available, and whatimprovements could be made in the eyes of the consumer.The group consisted of 10 averageconsumers, 5 men and 5 women. 5 of the people inthe group had used our Samsung 9000 Series 3D1080p LED HDTV, while the other 5had never used a 3D TV and were simply asked what theythought about the idea of purchasing one and the overall concept of 3D TV’s.
  9. 9. Marketing Objectives 1. Enter into the 3D video Gaming Market through a partnership with microsoftIn order to capitalize on the growing video gaming market, we intend on enteringinto a partnershipwith Microsoft to develop a virtual gaming product. Short term, wewould like to couple 3D TVtechnology with a dominant video gaming console like theXBOX 360. By the year 2020 we intendon launching a virtual gaming product.2. Launch a comprehensive ad campaign that focuses on SE’s competitiveadvantage in 3D technology.An ad campaign focusing on our competitive advantage in technology would behighly effective inselling more 3D TV’s to developing market. We want to make it knownthat Samsung was the first topioneer this technology, therefore, they are getting themost advanced product in the market.Our goal is to increase TV sales by 5% in a 6-month period following the launch of the campaign.3. Maintain market dominance throughout the “Glasses” era and prepare themarket for a “glassless” 3DTV.Having already established a firm hold on the 3D market, we would like tomaintain our position asmarket leaders in 3D technology with the use of 3D glasses. Asthe market evolves closer toglasses free technology we would like to prepare themarket for our product release in 2014. Ourobjective is to see our market share remainat 88% until the release of our glasses-free product in2014.Financial Marketing PlanTo enter in to the gaming market with Microsoft, we plan on focusing our R&Dbudget (7 billion in 2010) solely on producing a virtual reality gaming platform. This budgetincludes the research necessary to develop the product. We would like another 20 billion to fundproduction, distribution, customer service, and market research.
  10. 10. An average ad during the super bowl is $1.1 million dollars for one 30-secondSpot. We would like a500 million dollar advertising budget to effectively advertise for a six-month period.This goal willbe achieved with the daily operating cost and should not increase the average spending per year.RECOMMENDATION TO MANAGEMENTI would like to recommend that Samsung should use its strengths to overcome its weaknesses anduse different strategies to catch opportunities and resist the threats coming from its competitors byhiring well experienced and talented marketing executives, officers, and managers.