Samsung´s Marketing Story

How an exporter of dried fish became one of the top ten international brands


Term Paper, 2014

11 Pages


Excerpt

Table of Contents

1. INTRODUCTION

2. SAMSUNG ELECTRONICS – A BRIEF HISTORY

3. SAMSUNG’S APPROACH TO MARKETING
3.1 THE EARLY MARKETING STRATEGIES
3.2 SAMSUNG’S RETAIL MARKETING TECHNIQUES

4. SAMSUNG’S AGGRESSIVE MARKETING TECHNIQUES
4.1 IMPROVEMENT OF BRAND POSITION THROUGH PRODUCT
DEVELOPMENT
4.2 SAMSUNG BECOMES AGGRESSIVE

5. CONCLUSION

REFERENCES

1. INTRODUCTION

Marketing is undoubtedly one of the most important activities of a company, especially in today’s competition driven scenario. According to the American marketing Association (AMA, 2014), marketing could be defined as “The activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large”. AMA actually updates its definitions for marketing quite often, and that indicates the fact that marketing activities, methods and strategies change with respect to the current trend; social media, for instance. A previous definition of marketing by AMA in 2004 defined marketing activity in terms of its function and uses (Burns and Bush, 2007).

Researchers have defined marketing as an art, a technique or a strategy aimed at attracting potential customers from the target group. However, there is no perfect definition of marketing till date and different researchers have only portrayed their own views of marketing and have also justified it (Learnmarketing.net, 2014). It is a well-known fact that there are various marketing strategies followed by different companies and 52 types of marketing strategies are in use as of date (The Cult Branding Company, 2013). The most famous companies which have already earned a name for themselves tend to spend a meagre amount of their profits on marketing; in most cases it is less than one percent. On the other hand, startups and middle range firms spend much on marketing to get to the top. Of all the other companies, Samsung Electronics made a breakthrough after it realized the importance of marketing in every aspect. It is one of the companies that spend a huge amount of their profits as a reinvestment on marketing. This research paper is written with the aim of exploring Samsung’s aggressive marketing strategy: what sparked it, how it became a fire and how it kept the company’s engine running.

2. SAMSUNG ELECTRONICS – A BRIEF HISTORY

Samsung Electronics is currently one of the most famous names in the Information Technology Sector, but the company has a huge history behind it. It traces back to March 1, 1938, when Samsung was actually an exporter of food products like dry fish and flour to China. Byung-Chull Lee was the pioneer behind the firm and he invested 30,000 Korean won for the firm. After a few years, the company became stable and earned constant profits, thereby increasing its confidence and Samsung expanded into other business such as life insurance and textiles (Business Insider, 2014).

illustration not visible in this excerpt

Figure 2.1: Production of the P3202 black and white television

Source: Samsung (2014)

The first product manufactured was Samsung was the P3202 black and white television in a joint venture with Sanyo. Later on in 1970, Samsung expanded further into manufacturing many other products like washing machines, refrigerators and petrochemicals. In 1976, the company produced its one millionth black and white TV. Further diversification of the company took place in 1977 when Samsung Construction and Samsung Fine Chemicals were established. Later, Samsung also began export of its TVs to North America. This was the company’s first international venture. In the 1980s, Samsung started to produce computer components and moved to produce mobile phones in the 1990s, thereby creating a wide range of merchandise with its brand name (Samsung, 2014). Today, Samsung operates in various countries and has achieved many milestones, and is one of the fastest growing firms in the world.

3. SAMSUNG’S APPROACH TO MARKETING

3.1 THE EARLY MARKETING STRATEGIES

Samsung’s history reveals the roots of the company as an exporter of dried fish and that could be one of the most important reasons why it did not pay importance to marketing in the beginning. Also, being a Korean firm, the company’s products could have been the only ones that the local population could afford to buy. But Samsung realized the need for marketing only when it began to sell its products overseas in the USA and a few European countries. On the other hand, Samsung’s products were considered to be cheap and void of quality over the other brands in the international market. In 1994, Samsung Chairman Kun-hee Lee realized this when he visited the American stores and understood the very poor brand position of Samsung. But, elevating Samsung’s brand position was not a very easy task. The company spent 400 million US Dollars as an initial investment which was aimed at adding value to the brand. A Samsung employee remarked that ‘Good products sell themselves’ and that was the main idea behind the company’s first marketing venture. Kwang Ho- Kim was one of Samsung’s former CEOs who first initialized this marketing campaign. Since Samsung was previously dominated by engineers and financial controllers, marketing people did not seem to be given much importance. Samsung started to calculate its brand value and estimated it to be $5.3 billion. It popularized the idea among its employees that the ‘Samsung’ brand was an asset and not just a promotional instrument (Chang, 2011).

Samsung’s marketing mix was very evident from the fact that it sold its products under different sub brands in the USA, unlike Korea, where it sold its products under the single brand name ‘Samsung’. Plano, Tantus, Yepp and Wiseview were some of the brand names that were used by the company in the USA and none of them looked or sounded like Korean. However, this strategy was only adopted in the early 1990s and it did not seem to be very successful. In 1996, Samsung decided to establish itself as a single ‘premium brands’ and cut of all its 50 other brand names. The company drew its inspiration from BMW and wanted to make Samsung an ‘iconic’ brand (Michell, 2010). The Asian Financial Crisis doomed many Asian companies in 1997, out of which Samsung was also affected. But Samsung remained undeterred, kept investing constantly in R&D and still marketed its products efficiently. This was a very important move for the company since its efforts later proved to be fruitful(Mohr, Sengupta and Slater, 2010).

3.2 SAMSUNG’S RETAIL MARKETING TECHNIQUES

After the Asian economic crisis, Samsung’s sales did not continue as expected and in the early 2000s, companies like Apple were making a comeback. Samsung’s resellers were facing a few problems during this period and this was a big issue for the company. Following this, the company planned to restructure its reseller network (Fill, 2012). Samsung concentrated on its retail marketing strategies to improve its sales and that was one of the reasons why it succeeded in being one of the companies whose products were selling as fast as possible. Adaptability of a business to its environment is one of the most important elements of retail marketing and Samsung made use of the best of these opportunities to market its products. It spent 10% of its budget on internet advertising in 2002, which was ten times more than the budget of the previous fiscal. The company believed that reaching 1000 people through the internet was 50% cheaper than reaching the same amount of people through television (Viardot, 2004).

Like many other firms, Samsung always wanted to create a good rapport among its customers. It was one of the first companies to make use of QR codes by printing them on the T-shirts of employees who worked in retail outlets, so that they could be scanned by customers who liked their service. Samsung also makes the best use of events like Olympic Games and locations like shopping malls to attract a decent population (Yi, 2014). Samsung also followed the ‘right price positioning system’ for its products in order to market them directly. Pricing is one of the elements of the marketing mix, and Samsung managed to price its products accordingly so that it could develop better marketing techniques. Experts coin this as the market driven approach (Capon, 2007). These examples are the best of many, which Samsung followed to get its products from its stores to its customers.

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Excerpt out of 11 pages

Details

Title
Samsung´s Marketing Story
Subtitle
How an exporter of dried fish became one of the top ten international brands
Author
Year
2014
Pages
11
Catalog Number
V280486
ISBN (eBook)
9783656746171
ISBN (Book)
9783656746096
File size
765 KB
Language
English
Tags
Samsung Marketing, marketing in samsung, Marketing case studies
Quote paper
Kemmy Jose (Author), 2014, Samsung´s Marketing Story, Munich, GRIN Verlag, https://www.grin.com/document/280486

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