Now marketing 5 a samsung final_1

SAMSUNG : FROM GALLOP TO RUN
CASE PRESENTATION OUTLINE

“You are what you think, speak and eat (Anonym)

SAMSUNG : FROM GALLOP TO RUN
COMPANY BACKGROUND

world’s
largest tv
manufacturer

Electronics
global valuable
brand

 Samsung Founder unveiled what he called “new management,” a top-
to-bottom strategy for the entire company
 In 2009, Samsung rang up revenues of $117 billion with profits of $8.3
billion
 Interbrand crowned Samsung as the world’s fastest growing brand
over the five-year period
 Samsung Electronics, is now one of the world's leading developers
and producers of semiconductors, and was
 listed in Fortune magazine's list of the 100 largest corporations in the
world in 2007

Q.1 How was Samsung able to go from copycat
brand to product leader ?

 What are the certain factors
that can make Samsung
move on from copycat brand
to be the product leader ?

THERE ARE THREE MAIN FACTORS THAT LEAD
SAMSUNG TO BE CUTTING EDGE PRODUCT LEADER

LEE’S TOP TO BOTTOM NEW MANAGEMENT
STRATEGY FOR SAMSUNG COMPANY
(Bringing Samsung Electronics in very ambitious new direction)

NEW PRODUCT PRODUCT “TEST POSITIONING
DEVELOPMENT MARKETING” COMMERZIALES
 Lifestyle works of art  Samsung abandoned low-end
 Samsung then hired distributers, and they decide to
means that every new
a new group of young choose to work with specialty
Samsung products have
designers who to pass ‘WOW” test. If it retailers such as Best Buy and
creates sleek, bold, didn’t get wow during Circuit City.
innovative, and market testing, it must  Samsung clearly shows that they
stylish product go straight back to the are no longer the cheap brand.
design studio  They revamped their strategy and
targeting high-end
positioning along with developing
users. stylish and innovative products.

Samsung
NEW PRODUCT DEVELOPMENT

New Product Development Focus :
 Hired a new crop of fresh, young
designers who unleashed a torrent of
new products
 Not humdrum, me-too products but
sleek, bold and beautiful products
targeting high-end users (“lifestyle
works of art”)
 Samsung concentrates on the
development of new products,
product improvements, product
modifications, and new brands
through their R&D effort that let them

Samsung
Product “TEST MARKETING”

Samsung Product Test Marketing:
 Every product had to pass the
“Wow!” test, if it didn’t get a “Wow!”
reaction during market testing, it
went back to the design studio
 Making Samsung conducts
integrated test of product and its
entire marketing program-targeting
and positioning strategy, advertising,
distribution, pricing, branding and
packaging, and budget levels
 Providing management the
information needed to make a final
decision about whether to launch the
new product or going back to studio.

SAMSUNG’S PRODUCT
POSITIONING AND COMMERCIALIZATION

Largest Consumer Samsung is not El
Electronics Company Cheapo Product
in the worlds (sc 2005) Anymore

Working with specialty
Revamping its
Retailers such as Bestbuy
Position to
And CircuitCity & also abandon
create stylish and
Low end distributors like K-Mart
Innovative products
And Wall Mart

The Real Proofs that show
Samsung become cutting edge product leader

Sony Revenue (2009)

Sony
Decrease to $77 Billion

Samsung Revenue (2009) Sony Net Loss (2009)
Rang up to $117 Billion Net Loss almost $1 Billion
Samsung Lofty Goals

Position of Global Brands
Samsung Profit (2009)
Fell to 29th position for
Reaching to $8.3 Billion .
Valuable Global Brands

Position of Global Brands
17th valuable global and also
the world’s fastest growing
brand (last 5 years)

Samsung
Customer-Centered New Product Management
Customer Centered NPM:
 Focuses on finding new ways to create more customer
satisfying experiences, new products are ones that are
differentiated, solve major customer problems, and offer a
compelling customer value proposition

Samsung Implementation of Customer Centered NPM as
follows :
1. It can be proved from Samsung revenue (2009) rang
up to $117 Billion with profits $8.3 Billion that resulted
from consumer satisfaction towards Samsung products.
2. Samsung differentiates their new innovative products to
some certain helpable high-end areas of electronic
devices such as Samsung Kiwi Laptop that are very light
and handy for user, Blue-Ray Sky Touch DVD player.
3. Samsung’ product had satisfied customers need by
providing high-end products such as Samsung Luxia
TV’s that has 55 inch size and 49 pounds weight to ease
the customer adjusting it wherever they want to move.

Samsung
Team Based New Product Management

Team Based New Product Development Focus :
 Focus : Samsung practices team-based new-product
development by developing new product in which every
departments work closely together in cross-functional teams,
to save time and increase effectiveness.
 Aims : Instead of passing the new product from department
to department, the company assembles a team of people
from various departments that stay with the new product
from start to finish.
Samsung Implementation of Customer Centered NPM as
follows :
1. Samsung hired a group of experience and creative
designers to work close together and produce a new product
that will pass the “Wow!” test.
2. Companies that has TOP TO BOTTOM STRATEGY that
combine a customer-centered approach with team-based
new-product development gain a big competitive edge by
getting the right new products to market faster.

Samsung Cross Functional Teams
“Team Based New Products Management”

Marketing
Sales and Distributions Corporate Strategy

Operations and Policy

Engineer and Experts

Human Resource

Executive Committee
Products Designer
Technology and ICT

Samsung
Systematic New Product Management

Systematic New Product Management:
 The systematic innovation management system
approach yields two favorable outcomes. (1) It helps
create an innovation-oriented company culture. (2) It
will yield a larger number of new-product ideas,
among which will be found some especially good
ones.
Samsung Implementation of Systematic NPM as
follows :
1. The new-product development process should be
holistic and systematic rather than
compartmentalized and haphazard. Otherwise, few
new ideas will surface, and many good ideas will
sputter and die.
2. A company can install an innovation management
system can be used to collect, review, evaluate, and
manage new-product ideas, so that new ideas will
be encouraged and these ideas will not be lost.

Systematics New Product Development of SAMSUNG
HIGH-END PRODUCTS OF Samsung’s High Techno

Samsung Samsung Samsung YP S2 Samsung Kiwi
“Touch of Luxia LED TV Pebble MP3 Mini 10-inch
Colour” Player : Sporty
Kind : High- Note Book PC
Kind : Blu-Ray and Fashionable
DVD Player. Technology Mp3 Player (that is high
LED TV tech and
convenient)

Realizing their challenges by providing
SAMSUNG New Strategy of MABULJUNGJE
SAMSUNG CURRENTS CONDITION :
 Urgency : After 17 years remarkable success, Lee Byung-Chull admitted that the
world’s largest technology firm’s current main products may likely become
obsolete within next 10 years.
 New Strategy: That forward thinking has him again in reform mode. So, he has
dubbed Samsung’s new strategy that is “mabuljungje” a Chinese axiom that
means “horse that does not stop.”
 In a memo to Samsung employees, Lee said, “The ‘new management’ doctrine for
the past 17 years helped catapult the company into being one of the world’s best
electronics makers
 Current Condition: Now is not a time to be complacent but a time to run.”
Samsung unveiled a $23billion investment plan, to ensure that it is the company
that develops high-tech products.
 Challenges: Much of this year’s budget is earmarked for capital expenditures, new
equipment and plants to ensure that Samsung stays ahead for the high-tech
products.
 Otherwise Samsung are doing research and development (R&D) to produce better
sound quality, sharper colors and unique features for their high-tech products.

Based on PLC-PRODUCT STAGE (1)
Samsung Challenges to manage its high tech prod

• Product development stage begins when the
company finds and develops a new-product idea.
• During product development, sales are zero, and
the company’s investment costs mount but
Samsung hired a group of experience and creative
designers to create and produce a new product.
Every new Samsung’s product with new design has
to pass the “Wow!” test before released into the
market.
• Challenges : Samsung spends a lot of money in
investing in the new products because if the new
product with the new design failed the “Wow!”
test, it needs to be sent back to the design studio
for improvement, more cost of developing product
is needed. Therefore, the company’s investment
cost is very high.

Based on INTRODUCTION STAGE (2)

 Introduction stage starts when the new product is
first launched. Introduction takes time, and sales
growth is apt to be slow. In this stage, as
compared to other stages, profits are negative or
low because of the low sales and high distribution
and promotion expenses.
 Challenges 1 : Much money is needed to attract
distributors and build their inventories. Promotion
spending is relatively high to inform consumers of
the new high tech product.
 Challenges 2: Advertisements are very
important and compulsory for Samsung new
product. With advertisement, will more people
recognize about Samsung. Thus, this high-tech
products launched with highly cost.

Based on PLC-GROWTH STAGE (3)

 Growth stage occurs when sales starts climbing quickly.
The early adopters will continue to buy, and later buyers
will start following their lead, especially if they heard
favourable word of mouth. Attracted by the opportunities
for profit, new competitors enter the market.

 The product’s price stability will determine the volume of
sales. Profit also increases in this stage. This is shown when
Samsung Electronics achieved its lofty goals in less than
two decades. In 2009, the company earned $117 billion of
revenues with profits of $8.3 billion. Since 2005,

 Samsung is by far the largest consumer electronics
company in the world. It is the world’s largest TV
manufacturer and the second-largest cell phone producer.
Besides that, Samsung also has been awarded eight prizes
at the International Design Excellence Awards (IDEA).

Based on MATURITY STAGE (4)

 Maturity stage normally lasts longer than the previous stage, and
it poses strong challenges to marketing management. Maturity is
period of slowdown in sales growth because the product has
achieved acceptance by most potential buyers.
 Profits level off or decline because of increased marketing outlays
to defend the product against competition. Samsung took home 8
prizes at International Design Excellence Awards (IDEA) where
entries are judged based on appearance, functionality and idea
behind the product. As cell phone industry moves from ‘dumb
phones’ to ‘smartphones’ and Samsung aims to double its market
share of the higher-end market from 5 to 10 percent.
 Samsung also competes strongly in the markets for DVD players,
home theatres, digital cameras and camcorders, home appliances,
and laser printers because there are many producers out there who
offer the same products as Samsung. This lead to greater
competition and cause the profits level off or decline.

Based on DECLINE STAGE (4)
 Decline stage is the period when sales fall off and profits drop. Sales may plunge to zero, or
they may drop to a low level where they continue for many years. Samsung is now in this
stage of their high technology products and that is the reason why it needs to create
mabuljungje strategy.
 There are many competitors that produces the same line of products, not just competitors
but the strong rivals such as Apple Inc (Smartphone) and Sony (Electrical appliances) had
lead the customer to a wider choice of product that they prefer to buy and it will lead to the
shifting in consumer taste whether in telecommunications components, mobile displays or
LED panel. Carrying a weak product can be very costly to the company, and not jus profit
terms.
 Challenges 1 :There are many hidden costs. A weak product may take up too
much management time. It requires frequent price and inventory adjustments. It
also requires advertising and sales force attention that might be better used to make
“healthy” product more profitable. With advertising, it also can pull back the
product’s falling of reputation.
 Challenges 2 : Samsung is investing heavily to ensure that it is Samsung itself that
develops the “newer high-tech” products instead of other companies like Sony.
Despite Samsung’s past success, the company will risk losing market share if it did
not completely rebuild its business model.

Q.4 Will Samsung likely achieve its goals in markets where it
does not dominate, such as smartphones? Why or why not?

 Do we believe that Samsung
is able to achieve its goals in
markets ? What is the reason
and the justification that
match to the today condition?

YES
 Survey – high&increase % taking smartphones
 Mabuljungje strategy – excellent result – goal
(create new high-tech product – to avoid a loss in
market share) eg.
 Competitor (Samsung and Apple) – latest
system(Android 4.1 Jelly Bean)
• Samsung Price higher ( store market, trade number,
system) (system : android system for Samsung but
Apple Android system for Apple)
 consumer behavior (cultural, social, personal and
psychological)

SAMSUNG
ACHIEVING ITS GOALS BY MABULJUNGJE

 VALUES: Samsung can achieve its goals in markets where it does not dominate
basically for instance smartphones because they does not claim to know what
will replace today’s products as they become obsolete.
 ACTION: Samsung should take this golden opportunity to attract people and
win people’s attention that Samsung smartphones are the best smartphones than
other companies like Sony, Apples and the other prospective competitors.

 MABULJUNGJE STRATEGY will surely bring out a special and excellent
result to the sales of Samsung products. Samsung continue to strive for
excellence in creating new high-tech products in order to avoid a loss in market
share in the future. Rather, it is investing heavily to ensure.
 To cite a latest example, now Samsung just launched a new smartphone that is
Galaxy Note 2. This can show that Samsung are strive to attract people's
attention and therefore, win their attraction and heart. Moreover many people are
being the loyal user of Samsung Tab and Galaxy Note 2 because of its features.

SAMSUNG
 INTERACTIVITY President of Samsung Electronics America, as a major
pillar of mabuljungje, Samsung will capitalize on interactivity which as in
mobile smartphones with TVs and TVs with the internet. Through this,
Samsung’s future will bring many products that can communicate to each other
as they connect together. With all this, Samsung can definitely get on the
headline and successful to attract people attention and therefore, people will be
rushing to get the product from every outlet and will be dominating for the
market.
 QUALITY :In addition, Samsung also take an opportunity to present
consumers with flashy hardware features. In the competition between Samsung
and Apple, Samsung know that it cannot thrive in the long term by merely
offering sharper colors or better sound quality
 FEATURES AND PRICING: Pricing power comes only from unique features
and Samsung is putting plenty into discovering the unique features. Samsung,
it has announced its intention to unveil a tablet computer and an app store
similar to Apple’s that will give Samsung control over that content. Samsung
sees apps as the advertising vehicle of the future.

SAMSUNG
EXPECTATIONS AND AIMS :
 In the future, Samsung will definitely produce many magnificent products that beyond your
imagination. Samsung smartphones will continue to launch new design with some special and
unique function. Samsung Electronics will generate the fantastic ideas and to innovate new
things continuously to convince customers that Samsung can dominate the market such as
Galaxy Note 2 and Samsung Galaxy Tab that can make the customer buy them

PRODUCT DECISIONS AND RESPONSIBILITY
 Samsung would like to consider public policy issues and regulations regarding acquiring or
product quality and safety, and product warranties. Samsung also make sure the customers get
something that belong to them, for example customers get the warranty of smartphone if the
smartphone got any problems and is in the warranty time.

INTERNATIONAL PRODUCTS AND STANDARDIZED SYSTEM
 International product and services marketing face special challenges. Samsung must decide
how much to standardize or adapt their products and services for whole market in whole
world. This make sure that the products are suitable in every country. Hence, the products
which are able to fulfill the needs and wants of consumers can easily be accepted and used by
all people. For example:

The Logical Streamline (Simplicity Mode)
Samsung is able to achieve its goals where it does not dominate,
such as Smart-Phone

For instance, we’d like to observe reasons why Smartphone Galaxy S can achieve it goals

Market Share High Tech Ease and Non-
Increasing Comm Phone Exclusivity
Samsung aims to More than 100
Releasing the Galaxy
double its high end mobile operators will
S (latest high-tech
market share from offer Galaxy S
communication phone)
5% to 10%
• Winning Side Competitive Features • Winning Side from
• Double market share Samsung may easily Samsung
will let Samsung to meet its target market Smartphone
innovate and survive in since the hardware
• Most of another top
the market better, even and software features
smartphone are tied
the products not are pretty competitive
exclusively to any
dominating in market.
single carrier in the
As the effect of product For example : Running on market.
categories forward Google New OS’System,
movement fHD Video Recorder, etc

CONCLUSION
Strategy to
solve lots of Samsung will be
Combinations of
challenges in able to dominate
Product
managing high the market by
Development
their products
Process tech products
development

Jumping off from
COPYCAT brand to be the
cutting edge product
leader

Question and Answer Session (Q&A)

Now marketing 5 a samsung final_1

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