Analysis of Samsung Marketing and Brand Strategies

| December 12, 2012

 

Introduction:

In this report we have evaluated the literature and actual brand strategies used by Samsung. Samsung Electronics Company is worldwide leading consumer electronics brands which have very high opponents in the same business field like HTC, Sony, Panasonic, and Nokia. With the help of its creative products and services it is attracting lot of customers.

It was founded in 1938 by Lee Byung-chull as a trading company. In 1969 it establish and developed the different business to electronic market that make Samsung flourish into the world’s leading electronic brand. Samsung became the leading electronic manufacturers in Korea by catering to the international market. It makes Samsung to be a champion to international market with high-tech products. Later on in 1993 Samsung became the world’s best popular because of joined into the LCD industry.

Samsung set up its branding strategy by Chairman Kun Lee who planned to originate universal program to make Samsung to be an international brand in 1996. For increasing its brand awareness in the world, Samsung paid budget to the investment in marketing and branding and it’s about US 3 billion. (Business Week,2006)

In addition, Samsung has spend lot of money in sports for its brand image for example, for sponsoring in Olympic Games Sydney 2000, In Athens 2004 Olympic Games furthermore, Samsung also supported tools and distributed 14,000 cell phones during the games. Afterwards, Samsung has joined Yahoo Company in strategic marketing. In 2001, Samsung is to be voted to the number one in 100 brands by Business Week. To highlight on its brand awareness, Samsung encourage the official sponsor of Chelsea, the popular English Premier League football club in 2005. To continue to increase perception of brand Samsung became the official sponsor of 2010 Guangzhou Asian Game.

MEANING OF BRAND

Brand is the identity of a product, sign, symbol or design and how it describes to key points like customers, staff and partners etc.

Main goals which a good brand includes:

Conveys the message purely.

Convince the buyer.

Confirms credibility

For success in branding we have to concentrates on requirements and needs of customers. With the help of branding we can convince the customers to great extent.

Strategies of Branding

Developing a brand strategy can be one of the most challenging steps in marketing plan process. It plays a vital role in creation of company’s identity.

Brand Image of Samsung

Brand imaging is an essential tactic for company’s marketing plan and consumer behavior research (Dobni & Zinkhan, 1990). A clear image of a brand enables consumers to know about the brand, use the brand, and talk about the brand. All these factors are beneficial for the brand in identifying it from any rivals in the market. Good brand image strategies can lead to a good brand performance (Roth, 1995).

Brand image has three components:

  • Product Attributes
  • Customer’s benefit
  • Brand Personality

The first expansion of brand image of Samsung Electronics Company was started in 1993. Samsung Electronics Company has driven into a new corporate identity by changing its logo from the basic black bold type letters of the word Samsung with red star signs at the side into white Samsung word on a blue color background (Spaeth, 2007). The blue background was designed to be an elliptical shape which gives an impression of modernization and advance. It is determined to agree that Samsung has succeeded in the development of its brand logo.

Gardner and Levy (1955, as cited in Park, Jaworski, & Maclnnis, 1986) once stated that the brand will be successful in a long term could depend on a company’s strategies of choosing a brand image and to maintain the image over time.  Samsung has clearly proved that it has driven on the right track as the brand is now widely well known around the world with its reputation of global electronics brand

Character:

Its character obviously describes that it is a strong brand approximately innovation, cutting edge technology and world class design. To clear its brand image, it reinforces Samsung’s strong connection to the brand community to customer; besides, it reinforces its brand image of always being in leading position of innovation and design.

(Martin Roll,2006.The global bestseller Asian Brand Strategy (“Best Business Books 2006″ by Strategy Business magazine)

Another powerful development of brand image of Samsung was to design an impression of the brand with global sport events. Samsung became the official sponsor of the wireless technology in the Olympics when Seoul was hosted in 1998. By representing its brand into sport events, the brand will be greatly notice by lot of consumers. Nowadays also Samsung is using the same strategy. Samsung has decided to become an official sponsor for Chelsea football club since 2005/6 season and it was the second largest sponsorship signed by Samsung since the Olympics Games (Jones, 2005). By doing this Samsung logo is now appearing on every shirt of Chelsea players and it can be seen as an impressive way to maintain image of the brand.

Slogan of Samsung:

In this year, Samsung informed its all-new brand slogan “Turn on tomorrow”, to chase of a better future. This new slogan started from mid of July a series of promotions was showed to every customer to improve Samsung’s new brand strategy.

Country of Origin

Samsung has been involved to promote the country image of South Korea since Seoul Olympics in 1988 (Nebenzahl and Jaffe, 1991). The company image has to focus on the “country-of-origin” known as COO which is highlighted the impact of purchase behaviors (Martin and Eroglu, 1993). The perceptions of consumers on Korean products as overall image are still not considered as “high quality products” but known as a “good value products” (Nebenzahl and Jaffe, 1991).

Marketing Strategy

Samsung mission is to continue to become a world’s leader of digital convergence with the number one market share of most products segments. ( Ilse Jurrien, 2005). Samsung ambition is to boost sale volume in every segments of product.

In addition, Samsung objective is to stand on top of the world ranging electronic market; accordingly, it has team which is named as “Global marketing team”. This team separated from another part and divided in to three layers that are:

  • Product strategy team
  • Marketing strategy team
  • Regional strategy team.

Product strategy team

In Product strategy team managing market research , collection the information  and analysis data of competitors in daily task.

Marketing strategy team

Marketing Strategy team’s main responsibility is to expand global marketing strategy for example to present the core message that Samsung want to communicate to customer and every promotional activities to international-wise.

Regional strategy team

Regional strategy team’s main job is to move the task from Marketing strategy team and managing to different regional. One attempt that appropriate in the United States does not mean that it would success in other countries. Regional Strategy team’s duty is to recover strategy concerning in regional demographics.

Market Driven Change

In earlier days Samsung’s attempt was promoting in own way that resulted in confuse information and obscurity brand image that make consumer confused in company. Afterwards, the blockbuster launched movie called “The Matrix” and Samsung have the opinion of that it was a perfect time to improve brand image under slogan “Digital All-Everyone’s Invited”. Moreover, Samsung choose to corporate with Warner Brother for product placement at “The Matrix”. Samsung’s important place on customer’s insight to new product development method. (Kinda,2008)

Target Market

Samsung has changed and emphasizes on the high-end target group and business which means Samsung spend budget to promotional in niche market like the main competitor’s Sony. That directly affects the brand image in high-class value and to certify higher margins and efficiency. (Business weekly,2002)

Market Shares

Product

Samsung’s
global M/S

Competitors

M/S

Year

Source

DRAM

40.4%

Hynix

19.8%

Q3      2010

[69]

NAND Flash

40.4%

Toshiba

33.1%

Q2      2010

[70]

Large-size LCD Panel
(revenue)

26.0%

LG Display

25.9%

Q3      2010

[71]

Active-Matrix OLED

97%

LG Display, AUO

1~3%

2010

[72]

Lithium-ion battery

18.7%

Sanyo

19.4%

Q1      2010

[73]

LCD Monitor

18.0%

Dell

12.8%

2009

[74]

Hard disk drive

9%

Seagate
Technology

31%

Q4      2009

[75]

Television sets
(LDC, PDP, CRT, LED)

17.2%

LG Electronics

14.8%

Q3      2009

[76]

Mobile phone

21.0%

Nokia

32.4%

Q3      2010

[77]

Digital camera

11.8%

Sony

17.4%

2010

[78]

 

Meaning of Brand Value

The success of brand is the goal pursued of companies whose attempting to lead the market. Brand value is one of significant criteria that enhance branding of the company. The uniqueness of the brand is influenced consumers in both directly and indirectly, hereby improving the company value (Melewar and Karaosmanoglu, 2006). The strong and successful brand was able to dominate and persuade decision making of consumers.

Samsung ranks 19th in the Top 100 Global brands in 2009 to 2010. That shows Samsung brand value up 11 percent from year earlier, according to annual report by global branding inter brand.  The reason for this success is Samsung approach to develop in marketing strategy for different regions; moreover, to increase in perspective in brand, Samsung sponsored in Olympic Games and other sports such as sponsor Chelsea Football League in England, sponsored Texas motors speedway. (Interbrand,2010)

The growth of Samsung’s brand value is always put main emphasis to response demand and approach to experience in customers. Moreover the company focused on every detail of their brands, develop products, cohesive identities compatible in every products, every market round the world and every communicate to customers.(Business Week,2008)

To expand an integrated method to endeavors, the context of brand has to change to adopt culture, expertise and organizational systems include products, if senior management is using these assets and ability effectively (Doyle, 1998)

Strategies adopted by Samsung:

  • Creating Identity of the Brand.
  • Reaction from rival’s
  • Cost involved in repositioning of  brand
  • Research and development

 

Best global brands of 2010

16

16

France

Luxury

21,860

4%

17

20

United States

Electronics

21,143

37%

18

17

United States

Tobacco

19,961

5%

19

19

South Korea

Electronics

19,491

11%

20

18

Japan

Automotive

18,506

4%

21

21

Sweden

Apparel

16,136

5%

22

24

United States

Business Services

14,881

9%

23

23

United States

Beverages

14,061

3%

24

22

United States

Financial Services

13,944

-7%

25

26

United States

Sporting Goods

13,706

4%

26

27

Germany

Business Services

12,756

5%

27

25

Switzerland

Beverages

12,753

-4%

28

28

Sweden

Home Furnishings

12,487

4%

29

37

United States

Financial Services

12,314

29%

30

30

United States

Alcohol

12,252

4%

31

31

United States

Transportation

11,826

2%

32

32

United Kingdom

Financial Services

11,561

10%

33

33

Japan

Electronics

11,485

10%

34

29

Japan

Electronics

11,356

-5%

35

34

United States

FMCG

11,041

6%

According to the table of Brand Value in Global brands in 2010,

Samsung was stable in rank 19th in last year and current that show it can manage marketing strategy in good brand value in crisis economic situation. In term of Sony the main competitor, in the chart of Brand Value showed it rank is  up from 34th to 29th in 2010 ;nevertheless, Sony still stay behind of Samsung. And in Change of value Sony is -5percent and Samsung is 11 percent.

The reason of achievement to be in global brand of Samsung are many strategy that company chosen; for example, Samsung considered to customer experience that make it placed 2nd after Coca-Cola sponsorship in Olympic Games. Samsung assemble the organization for brand building and the key of brand building is employees and consumers. The employees received the emotional benefits from pride in being associated with the sponsorship and direct connection to the Olympic activities. In term of consumers, Samsung provided a new experience to the customers; for instance as a part of Samsung’s brand proximity program it put up in Olympic Rendezvous@ Samsung, The Athens Olympic Sports Complex located in a 1,064 square meter entertainment complex which was a central company place for athlete, their families and viewer coming to the Games. The OR@S give a wide range of activities; for example, the customers were received the opportunity to try out Samsung’s revolutionary products by themselves.

Brand Position

In term of Samsung company has position the brand position as innovation, cutting edge technology and high-class design. In marketing plan, Samsung created team of global marketing to develop to assign the identity of products. The design of product is the important part to attractive to consumer to purchase. Samsung present the different of leading of electronic to innovation, high-end and focus on niche market. In addition Sony focus on high-end and niche market according to, the group assessment that show in perceptual map.

In growing competition and more require consumer that CEOs facing these day, they have to know how to created more value into products and services because of nowadays, there are many competition, fast innovation and more demanding consumers. (Court et al.,1999)

According to, Samsung has developed technology to standing in leading of electronic market; for example, Samsung is the first brand of Thinnest Blue-ray player in 2009, Released the world’s first infrared video phone in 2009. That make Samsung is the No.1 in customer loyalty for 8 years in succession by Brand Keys of the USA

Brand Relationship

To created more value into Samsung product, the company chosen to communicated in campaign that satisfy with slogan; moreover, Samsung has joined the campaign with the movie call “The Matrix” to customer perspective in brand image is innovative and high technology. The company chooses the right time and right place to show the way of company.

The campaign in advertising, Samsung show the high-end and luxury design to the Television commercial. That makes customers absorb brand image of Samsung and effected to brand value in consumer’s mind.

Samsung continue to purchase budget to promote brand in advertising campaign and continue to sponsor in the Olympic Game. Samsung be concentrate in strong of brand image including selecting the distribution channel, to research and developing the products, creating the new technology to be the number one of the electronic world.

Customer Perspective

After evaluating the brand value, position and image the next step is the customer perspective of Samsung we get this information from different websites. The evidence shows that Samsung attracted lot of customers it creates a very good image in customer’s mind. In most of products and Brand value range confirms that the customer is trustworthy and satisfied with the brand. In eco-friendly blue earth phone are also embedded with solar panel which helps in making .Samsung growing up from 4th to 2th in mobile market share. The design of product of Samsung emphasis to approach the customer insight is very effective. Nowadays mobile phone is not used only for communicating purposes but also use as fashion accessories with latest models and technology. The customers require the mobile phone for self-image which includes design, function and reliable of product. Samsung come to stand in customer’s mind and gain more market share from its main competitor Nokia. (Business Time, 2010)

Strengths of Samsung

  • CDMA Handset market
  • Brand Position
  • Product Quality
  • Horizontal Integration
  • Core Competence
  • Distribution Network