Samsung is the story of a small South Korean family business, now in seventy years one of the largest conglomerates in the world. The success is phenomenal. In 2014, Samsung has generated more than 229 billion of which € 16.6 billion in profits (Sources: Samsung.com). Samsung is omnipresent : its several subsidiaries have operations in :
– Electronics → Samsung Electronics
– Heavy industry → Samsung Engineering
– Chemicals → Samsung Fine Chemicals
– Financial services → Samsung Venture Investment
– Commercial activities and services → Samsung C&T Resort & Construction Group
Samsung is the world leader in technology its mobile branch represents 53% of his turnover. Thereby, this report will focuses on Samsung Electronics, in particulary on their smartphones, its various strategy and marketing activities (France and International).
Executive summary
– Electronics → Samsung Electronics
– Heavy industry → Samsung Engineering
– Chemicals → Samsung Fine Chemicals
– Financial services → Samsung Venture Investment
– Commercial activities and services → Samsung C&T Resort & Construction Group
Samsung is the world leader in technology its mobile branch represents 53% of his turnover. Thereby, this report will focuses on Samsung Electronics, in particulary on their smartphones, its various strategy and marketing activities (France and International).
Executive summary
For Kotler, marketing is “the process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return” (2009 : 29).
Samsung Electronics is a subsidiary of Samsung Group, South Korea’s famous group. Samsung is present on many of the high tech markets such as cell phones, televisions, tablets, wearable tech, home theater and audio, digital cameras and camcorders, computing, memory and storage, home appliances, smart home, led lighting, accessories and finally security and monitoring.
The place of Samsung TV on the televisions market is very interesting.
1) At a local level
On the French television market, the Samsung brand represents best sellers among all retailers (cnetfrance.fr). The Samsung TV market share in 2014 in France is 32,4% (Samsung.com) which means that a TV on 3 sold in France is a Samsung TV.
Samsung TV market share in France for the year 2014
32,4%
2) At an international level
Globally, the TV market is also dominated by Samsung with a market share of 22.8 %. Samsung was also the television market leader in 2013 with a market share of 21 % (audiovideohd.fr). This therefore proves that Samsung is an inescapable company in the television sector and has a very good marketing strategy.
Samsung TV market share in France for the year 2013 Samsung TV market share in the world for the year 2014 Samsung TV market share growth rate between 2013 and 2014
21% 22,8% + 8,57%
II. MARKETING CONCEPTS AND APPROACHES
1) At a local level
Samsung electronics in France has a very strong image of quality and innovative company offering products at the cutting edge of technology. This reputation is due to the fact that Samsung electronics spending a huge budget in terms of advertising and marketing. The number of sales that the company realized in France is answering to its ambitions as it’s leading to sales LG and Sony. In 2000, the South Korean company had used visual effects stripped to the extreme with a meat slicer and a forest with trees cut net to promote printer debiting more than 16 pages per minute. In France, Samsung electronics has therefore a very high quality image (strategies.fr).
2) At an international level
Internationally, Samsung electronics therefore spends colossal sums in marketing and advertising, for example in 2013 when the company announced a record of $14 billion spent (france24.com). Moon Ji-hun, South Korean consultant specializing in new technology recognizes that for a company like Samsung electronics that offers so many products and is therefore present on many high tech market is a very good strategy to spend a lot of money in promoting its image because no matter the product, the brand is enough to imagine it’s a premium product with a very good quality (france24.com).
Other forces are present in the internal and external environment of Samsung electronics which are classified according to the Porter’s 5 forces analysis:
Competitive rivalry: Samsung electronics is engaged in a fierce rivalry with other multinationals such as LG, Sony, Nokia, Motorola and Apple. Competition is intense and margins are very small (lemonde.fr). For example in India, Samsung competes with a host of national and international rivals like Micromax who dethroned Samsung by offering cheap products in a country where ¼ of phones are sold at less than 100 dollars (lemonde.fr).
Threat of new entry: It is very difficult to get into emerging markets because it must take into account the establishment of distribution and supply chain. Samsung electronics has conquered many emerging markets by adopting a sensitive approach but also left because these markets were not gainful. A company like Samsung electronics has to be sure of the result before penetrating new markets.
Buyer power: Buyers must obtain supplies of spare parts and after-sales service in addition to the many products offered by Samsung electronics. Buyers have a huge power over companies such as Samsung because emerging markets consumers have a vast choice due to numerous competitors. This is why Samsung handsets must focus on attractive prices in an upscale image to convince buyers that their products are the best and they will sell easily.
Supplier power: In many markets in which Samsung Electronics is present, many suppliers are willing to offer their services at very attractive prices because they know that a contract with a big company like Samsung bring such large profits. However, suppliers have an important power because when supply chain is established, it would be very expensive to Samsung of destroying to rebuild another with other suppliers. This is why Samsung electronics must study the market through engineering firms before setting up shops in order to limit costs to maximum and continue to provide affordable prices.
Threat of substitution: The high tech markets are flooded with substitute products and this is why a very good marketing strategy is necessary for a company like Samsung electronics. Samsung offers products at various prices ranging from very affordable to very high prices to meet all incomes and beat the cheapest substitutes.
III. IMPLICATIONS OF SEGMENTATION, TARGETING AND POSITIONING ON INTERNATIONAL ORGANISATIONS
1) Segmentation
The Samsung electronics segmentation methods are geographic and demographic.
The geographical segmentation is divided into different regions with North America, South America, Asia, Europe and South Africa. These are the main areas of the world in which Samsung TVs are sold. Samsung electronics exports their TVs around the world.
The demographical segmentation is divided into 5 main factors which are age, education level, lifestyle, income and occupation:
For the age segmentation, Samsung electronics separates it into 3 portions that are teenagers, adults and the elderly.
For the education level segmentation, Samsung electronics separates it into 2 portions that are highly educated and poorly educated.
For the lifestyle segmentation, Samsung electronics separates it into 2 portions which are urban people and rural people.
For the income segmentation, Samsung electronics separates it into 2 portions which are high income and low income.
For the occupation segmentation, Samsung electronics separates it into 2 portions which are workers in office and outdoor workers.
2) Targeting
Samsung mainly targets teenagers with their smartphones, tablets, gaming PC or cameras, adults with their laptops for the business use and the elderly with their high definition TVs because they need a very clear vision interface. Samsung is the leader in the TV market because they have the best quality screen (Samsung.com).
Samsung’s offer is very diverse on the TV market, it goes cheap TVs like Samsung UE32J5100 with an average price of 258,99€ to luxury TVs like Samsung UE88JS9500 with an average price of 24 999,00€. Samsung electronics therefore targets both high incomes and modest incomes (Samsung.com).
They also target professionals like workers in office with personal computers and outdoor workers with laptops or tablets.
Finally, Samsung electronics company targets boys and girls separately with different designs, sizes or colors and using niche marketing strategy like in 2013 with the Samsung SCH-W2013 which is a flip smartphone for consumers who are interesting to flip phones particularly for the Asian market using Jackie Chan for the advertising because he is very famous in Asia and worldwide (Samsung.com).
(Picture: journaldugeek.com)
3) Positioning
Samsung electronics has a very strong product positioning with a focus on innovations in technology like the Samsung Curved TVs or the Samsung Galaxy S6 Edge with curved screen.
Samsung electronics is the first company who launched the Samsung Galaxy Round, “the world’s first curved smartphone, in South Korea” (uk.complex.com).
Samsung is positioned as an innovative company, offering products at the edge of technology and for every budget.
IV. IMPLICATIONS OF CUSTOMER ACQUISITION AND RETENTION ACTIVITIES ON THE ORGANISATION’S PERFORMANCE
1) Acquisition
2) Retention
V. IMPLICATIONS OF INNOVATIONS FOR PRODUCT/SERVICES AND FUTURE TRENDS ON MARKETING OBJECTIVES AND STRATEGIES FOR INTERNATIONAL ORGANISATIONS
1) Innovations on international strategy for product/services
The 3 elements of product or service graph show that for Samsung electronics benefits, attributes and marketing support services the link to specific factors that make the success of their products and services on which the marketing strategy of Samsung electronics is based:
Benefits: The Image and performance of Samsung’s products
Attributes: The quality, design and size and color variants of Samsung’s products and the brand name of Samsung
Marketing support services: The guarantees and after-sales service
Samsung electronics wants to create a “Strategy and Innovation Center” in Paris, this shows that Samsung has a strategy of continuous innovations and this is what makes them successful worldwide (usine-digitale.fr).
2) Future trends on marketing objectives for international organisations
For the year 2020, Samsung has 2 goals.
The quantitative objective is to reach $400 billion dollars and to be a predominant leader in the global IT industry and global top 5 (Samsung.com).
The qualitative objectives are: to be an innovative and respected company, to be a creative leader building new markets and global enterprise that attracts the world’s best talents, and to be in top 10 of world’s best workplaces (Samsung.com).
Samsung is working on 11K screen for smartphones, it’s a really big innovation and this kind of innovation contributes to fulfilling the objectives (digitaltrends.com).
3) Future trends on marketing strategies for international organisations
Marketing mix of Samsung electronics:
Product: Samsung electronics has an extensive product portfolio that is one of its strengths. Services are also very popular for customers including their after-sales service.
Price: Samsung electronics uses various pricing strategies. For smartphones, this is a skimming strategy with a high price when it’s launch to a low price when a competitor launches a similar product. For other products such as televisions, it’s a penetration strategy as they offer competitive prices that suit all incomes.
Place: Samsung uses specialist dealers for professionals and other specialist dealers for individuals. In several countries, Samsung has only one distributor that sells itself to retailers.
Promotion: Samsung electronics uses a lot of advertising but also offers a lot of sales promotions throughout the year which attracts many customers.
Samsung relies heavily on the future and innovations in its marketing strategy because they are very often the first to introduce new products as for curved screens on TVs market.
VI. SOCIAL, POLITICAL, ECONOMIC, LEGAL AND ECOLOGICAL ENVIRONMENT AT INTERNATIONAL LEVELS FOR THE ORGANISATION
1) Social environment
Strengths Weaknesses
– Popularity for mobile devices
– Big popularity for Android
– Social networks – Different cultures, lifestyles and preferences
– Demographic changes
– Different perceptions of the brand
2) Political environment
Strengths Weaknesses
– Political stability in most countries where Samsung is present
– – Difficult political climate between North Korea and South Korea
–
3) Economic environment
4) Legal and ecological environment
Samsung Electronics is a subsidiary of Samsung Group, South Korea’s famous group. Samsung is present on many of the high tech markets such as cell phones, televisions, tablets, wearable tech, home theater and audio, digital cameras and camcorders, computing, memory and storage, home appliances, smart home, led lighting, accessories and finally security and monitoring.
The place of Samsung TV on the televisions market is very interesting.
1) At a local level
On the French television market, the Samsung brand represents best sellers among all retailers (cnetfrance.fr). The Samsung TV market share in 2014 in France is 32,4% (Samsung.com) which means that a TV on 3 sold in France is a Samsung TV.
Samsung TV market share in France for the year 2014
32,4%
2) At an international level
Globally, the TV market is also dominated by Samsung with a market share of 22.8 %. Samsung was also the television market leader in 2013 with a market share of 21 % (audiovideohd.fr). This therefore proves that Samsung is an inescapable company in the television sector and has a very good marketing strategy.
Samsung TV market share in France for the year 2013 Samsung TV market share in the world for the year 2014 Samsung TV market share growth rate between 2013 and 2014
21% 22,8% + 8,57%
II. MARKETING CONCEPTS AND APPROACHES
1) At a local level
Samsung electronics in France has a very strong image of quality and innovative company offering products at the cutting edge of technology. This reputation is due to the fact that Samsung electronics spending a huge budget in terms of advertising and marketing. The number of sales that the company realized in France is answering to its ambitions as it’s leading to sales LG and Sony. In 2000, the South Korean company had used visual effects stripped to the extreme with a meat slicer and a forest with trees cut net to promote printer debiting more than 16 pages per minute. In France, Samsung electronics has therefore a very high quality image (strategies.fr).
2) At an international level
Internationally, Samsung electronics therefore spends colossal sums in marketing and advertising, for example in 2013 when the company announced a record of $14 billion spent (france24.com). Moon Ji-hun, South Korean consultant specializing in new technology recognizes that for a company like Samsung electronics that offers so many products and is therefore present on many high tech market is a very good strategy to spend a lot of money in promoting its image because no matter the product, the brand is enough to imagine it’s a premium product with a very good quality (france24.com).
Other forces are present in the internal and external environment of Samsung electronics which are classified according to the Porter’s 5 forces analysis:
Competitive rivalry: Samsung electronics is engaged in a fierce rivalry with other multinationals such as LG, Sony, Nokia, Motorola and Apple. Competition is intense and margins are very small (lemonde.fr). For example in India, Samsung competes with a host of national and international rivals like Micromax who dethroned Samsung by offering cheap products in a country where ¼ of phones are sold at less than 100 dollars (lemonde.fr).
Threat of new entry: It is very difficult to get into emerging markets because it must take into account the establishment of distribution and supply chain. Samsung electronics has conquered many emerging markets by adopting a sensitive approach but also left because these markets were not gainful. A company like Samsung electronics has to be sure of the result before penetrating new markets.
Buyer power: Buyers must obtain supplies of spare parts and after-sales service in addition to the many products offered by Samsung electronics. Buyers have a huge power over companies such as Samsung because emerging markets consumers have a vast choice due to numerous competitors. This is why Samsung handsets must focus on attractive prices in an upscale image to convince buyers that their products are the best and they will sell easily.
Supplier power: In many markets in which Samsung Electronics is present, many suppliers are willing to offer their services at very attractive prices because they know that a contract with a big company like Samsung bring such large profits. However, suppliers have an important power because when supply chain is established, it would be very expensive to Samsung of destroying to rebuild another with other suppliers. This is why Samsung electronics must study the market through engineering firms before setting up shops in order to limit costs to maximum and continue to provide affordable prices.
Threat of substitution: The high tech markets are flooded with substitute products and this is why a very good marketing strategy is necessary for a company like Samsung electronics. Samsung offers products at various prices ranging from very affordable to very high prices to meet all incomes and beat the cheapest substitutes.
III. IMPLICATIONS OF SEGMENTATION, TARGETING AND POSITIONING ON INTERNATIONAL ORGANISATIONS
1) Segmentation
The Samsung electronics segmentation methods are geographic and demographic.
The geographical segmentation is divided into different regions with North America, South America, Asia, Europe and South Africa. These are the main areas of the world in which Samsung TVs are sold. Samsung electronics exports their TVs around the world.
The demographical segmentation is divided into 5 main factors which are age, education level, lifestyle, income and occupation:
For the age segmentation, Samsung electronics separates it into 3 portions that are teenagers, adults and the elderly.
For the education level segmentation, Samsung electronics separates it into 2 portions that are highly educated and poorly educated.
For the lifestyle segmentation, Samsung electronics separates it into 2 portions which are urban people and rural people.
For the income segmentation, Samsung electronics separates it into 2 portions which are high income and low income.
For the occupation segmentation, Samsung electronics separates it into 2 portions which are workers in office and outdoor workers.
2) Targeting
Samsung mainly targets teenagers with their smartphones, tablets, gaming PC or cameras, adults with their laptops for the business use and the elderly with their high definition TVs because they need a very clear vision interface. Samsung is the leader in the TV market because they have the best quality screen (Samsung.com).
Samsung’s offer is very diverse on the TV market, it goes cheap TVs like Samsung UE32J5100 with an average price of 258,99€ to luxury TVs like Samsung UE88JS9500 with an average price of 24 999,00€. Samsung electronics therefore targets both high incomes and modest incomes (Samsung.com).
They also target professionals like workers in office with personal computers and outdoor workers with laptops or tablets.
Finally, Samsung electronics company targets boys and girls separately with different designs, sizes or colors and using niche marketing strategy like in 2013 with the Samsung SCH-W2013 which is a flip smartphone for consumers who are interesting to flip phones particularly for the Asian market using Jackie Chan for the advertising because he is very famous in Asia and worldwide (Samsung.com).
(Picture: journaldugeek.com)
3) Positioning
Samsung electronics has a very strong product positioning with a focus on innovations in technology like the Samsung Curved TVs or the Samsung Galaxy S6 Edge with curved screen.
Samsung electronics is the first company who launched the Samsung Galaxy Round, “the world’s first curved smartphone, in South Korea” (uk.complex.com).
Samsung is positioned as an innovative company, offering products at the edge of technology and for every budget.
IV. IMPLICATIONS OF CUSTOMER ACQUISITION AND RETENTION ACTIVITIES ON THE ORGANISATION’S PERFORMANCE
1) Acquisition
2) Retention
V. IMPLICATIONS OF INNOVATIONS FOR PRODUCT/SERVICES AND FUTURE TRENDS ON MARKETING OBJECTIVES AND STRATEGIES FOR INTERNATIONAL ORGANISATIONS
1) Innovations on international strategy for product/services
The 3 elements of product or service graph show that for Samsung electronics benefits, attributes and marketing support services the link to specific factors that make the success of their products and services on which the marketing strategy of Samsung electronics is based:
Benefits: The Image and performance of Samsung’s products
Attributes: The quality, design and size and color variants of Samsung’s products and the brand name of Samsung
Marketing support services: The guarantees and after-sales service
Samsung electronics wants to create a “Strategy and Innovation Center” in Paris, this shows that Samsung has a strategy of continuous innovations and this is what makes them successful worldwide (usine-digitale.fr).
2) Future trends on marketing objectives for international organisations
For the year 2020, Samsung has 2 goals.
The quantitative objective is to reach $400 billion dollars and to be a predominant leader in the global IT industry and global top 5 (Samsung.com).
The qualitative objectives are: to be an innovative and respected company, to be a creative leader building new markets and global enterprise that attracts the world’s best talents, and to be in top 10 of world’s best workplaces (Samsung.com).
Samsung is working on 11K screen for smartphones, it’s a really big innovation and this kind of innovation contributes to fulfilling the objectives (digitaltrends.com).
3) Future trends on marketing strategies for international organisations
Marketing mix of Samsung electronics:
Product: Samsung electronics has an extensive product portfolio that is one of its strengths. Services are also very popular for customers including their after-sales service.
Price: Samsung electronics uses various pricing strategies. For smartphones, this is a skimming strategy with a high price when it’s launch to a low price when a competitor launches a similar product. For other products such as televisions, it’s a penetration strategy as they offer competitive prices that suit all incomes.
Place: Samsung uses specialist dealers for professionals and other specialist dealers for individuals. In several countries, Samsung has only one distributor that sells itself to retailers.
Promotion: Samsung electronics uses a lot of advertising but also offers a lot of sales promotions throughout the year which attracts many customers.
Samsung relies heavily on the future and innovations in its marketing strategy because they are very often the first to introduce new products as for curved screens on TVs market.
VI. SOCIAL, POLITICAL, ECONOMIC, LEGAL AND ECOLOGICAL ENVIRONMENT AT INTERNATIONAL LEVELS FOR THE ORGANISATION
1) Social environment
Strengths Weaknesses
– Popularity for mobile devices
– Big popularity for Android
– Social networks – Different cultures, lifestyles and preferences
– Demographic changes
– Different perceptions of the brand
2) Political environment
Strengths Weaknesses
– Political stability in most countries where Samsung is present
– – Difficult political climate between North Korea and South Korea
–
3) Economic environment
4) Legal and ecological environment
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