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Check out our essay sample if youre about to write a Samsungs marketing strategy analysis! Here, youll find Samsungs market situation, target market, marketing mix, external and internal environment, and other important information for your essay on Samsung marketing plan.
Introduction
The purpose of this report is to outline a marketing plan for a selected organisation and this paper will focus on Samsung Electronics. This marketing plan concentrated on the market situation, target market, marketing mix, external and internal environment of Samsung, and the influence of technology and new media on Samsungs future marketing plans, sustainability concerning the marketing strategy and how it might affect the reputation of Samsung in the future.
Overview of Samsung Electronics Inc
Samsung Electronics Inc is a South Korea based Multinational Corporation and one of the worlds largest cell phone and other diverse electronics manufacturing company, which is devoted to developing pioneering technologies and competent progressions that craft new markets, supplement peoples lives, and persist to work hard in making the brand a digital leader. Throughout 70 years of its operations, the company is carrying out successful businesses throughout the global market with 337 offices facilitating in 58 countries and employing about 222000 human resources internationally.
As the second-largest company of the world market, Samsung possesses a very impressive and strong financial position as compared to many other businesses. According to Samsung Electronics (2011), even though, because of the global financial crisis, the company has suffered significant losses in the 2008 and 2009 period, in 2010, it has observed rapid recovery in terms of the net incomes. The table below shows the financial overview of the company in 2010:
Samsungs Mission, Vision and Values
Vision of Samsung
From the very beginning, Samsung was regulated by its long term objectives and it has already fixed its vision 2020 that is Inspire the World, Create the Future (Samsung Electronics, 2011). Also, the main objectives of this company are to generate $400 billion in sales revenue by 2010, and listed the company in the top ten charts by this time. However, the following figure shows more elaborately
Mission of Samsung
Samsung Electronics performs according to prerequisite objectives and its present mission is to be the best digital-µCompany , therefore, human resources of this company always try to give innovative ideas to face new challenges by developing its products and services. According to the annual report of Samsung, it would like to be a profitable and responsible global corporation with capturing a market-leading position in the business segments. However, the following figure shows its mission
Value of Samsung
Samsung values its people as it believes that a company is its people and the employees give the best effort with endless passion and integrity to bring sufficient changes, introduce innovative products, take responsibilities.
Product situation and lifecycle
The following information is important to provide a clear perception of the product situation
The following graph will show the Position of products
The explanation for 2009
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Digital Media = 33%
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Semiconductor = 18%
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LCD = 15%
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Telecommunications = 28%
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Others = 6%
Product line
Kotler and Keller (2006) stated that the first element of marketing mix indicates a full description of the companys products and Samsungs product line includes Visual display (like TV, home AV, e-book, projector, monitor and so on), IT solution (like a netbook, laptop, laser printer and multimedia device) and digital appliance (like a refrigerator, washing machine, Air-conditioner and vacuum cleaner).
However, it also marketed Mobile Communications (full touch screen phone, eco-friendly mobile phone, smartphone, and MP3 player), LCD, Network (like Mobile WiMAX, LTE solution), DVD-Video players/recorders, and Digital-broadcasting receiving systems, audio/video/data recording media, and data recording systems etc. According to the sustainability reports 2010 of Samsung, it produces the following products
Target market
Samsungs has targeted different group for different items and the main target customers for its electronic items are upscale and middle- earning households, students and other retailers; however, it focused on the quality and technology to build strong brand image to the target customers.
Market segmentation
Stoner, Freeman & Gilbert (2006) pointed out that a company should decide first which segments offer the best opportunity for achieving its objectives to increase sales and net profits by creating long-run customer relationship and considering different needs, characteristics, or behaviour of the customers. However, Samsung can consider the following segments to go forward with a single or more market segment
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Customers who want luxurious products regardless of the price;
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Customers who only consider the price of the product;
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Customers who think to get high quality at a reasonable price;
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Customers who only consider brand name.
Market positioning
Samsung can position its products in a clear, distinctive and particular way to the target customers relative to the competitors by using perfect positioning module; so, it should express the distinct benefits and features of the electronic products in the target markets as the best quality and reliable appliances.
Price
Shuey (2010) stated that the motto of the pricing strategy of this company is to increase market share in the global market, which influences the company to ask reasonable and affordable price to attract target customers though the Semiconductor business division experienced rising market share and price hike with strong demand. However, effective pricing strategy plays a vital role to increase sales that means offering the right combination of quality and good service at a fair price may help to be market leader, for instance, its sales rose by KRW7.5 trillion because of the high demand of its premium mobile phones at low to mid-price.
Distribution outlets
According to the annual report 2009 of Samsung, this company is concentrating on synergies in sales and distribution by improving a programme and it is increasing the distribution of its Digital Presenter range with the appointment of six distributors in Europe, which gives exclusive channels for business partners.
Competitive situation
Hitt, Ireland & Hoskisson (2001) stated that competitive analysis is one of the most significant tasks as each competitor maintains a specific strategy and niche in the market. However, Samsung has different competitors in the different segment but its major competitors in the electronics markets are Sony, LG, Nokia, Aiwa, Panasonic, Sonic, Philips, and so on.
Advertising
Challenging spirit and fervour of this company for the future is conveyed to its customers by different marketing communication programs such as brand or product advertisements, promotions and sponsorships (Samsung Electronics (2010, p.84). However, Samsung is committed to following regulation those prohibits labelling or slandering competitors; so, it never undermines the credibility of the creditors by advertising;
Marketing research
In 2009, total R&D expenses of Samsung Electronics were KRW 248,103 because this company always concentrates more on the marketing research issue; as a result, it has separate research team and research centre for the development of different business units.
Brand positioning map
Samsung should prepare the perceptual positioning maps, which will show the customers perception of the relative brand versus competing products on important buying decision; however, it is shown as below
SWOT Analysis of Samsung Electronics Inc
Strengths
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The key strengths of Samsung Electronics are brand awareness of the company, distinctive competencies, unique customer care service, economy of scale and long experience, marketing activities, and so on;
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According to the annual report 2009 of Samsung, it always hires highly efficient engineers for the technological development of the company;
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Also, it spends more than KRW 2,760,997 million for research and development (Samsung Electronics, 2009);
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However, Samsung has coordinated excellent IT facilities with a mobile communication system such as it introduced the next-generation wireless communication method Mobile WiMAX (WiBro) in 2006.
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On addition, IT sector integration with 4G mobile communications, 30nm-class NAND Flash memory chip, 32/28nm high-k metal gate (HKMG), and the 2.5-inch, 250-gigabyte (GB) HDD, 1 GB DRAM, and 32 GB NAND also a one-step forward the strength of Samsung;
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It has a strong customer base, which inspires the company to expand its business.
Weaknesses
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Samsung experienced less growth rate in developed countries;
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Japanese first comers in China enjoyed more advantages than Samsung;
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The US companies like Motorola has already built a strong distribution channel, which is better than Samsungs would distribution channel;
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Also, it should require a more cost-effective solution to target all sorts of customers.
Opportunities
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Samsung provides six-sigma facility training to the employees, which would help the company to increase sales in the global financial crisis;
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It has a strong financial base to expand its business in the global market and develop supply chain management system in the local market;
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Administrative control, team spirit, innovative technology and commitment of the employees would bring success in the future;
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On the other hand, it has a huge opportunity to drive more seriously in the South Asian market as an Asian originated organization.
Threats
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Good corporate governance system may be hampered due to high remuneration of executives;
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Also, the global financial downturn is one of the burning challenges to this company as it would have to face if the recession long lasts then it will carry more market risk,
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Competitors are the major threats as it faces extreme competition in the global electronics market;
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On the other hand, net sales revenue from developing countries may decrease due to the high price of its products;
PEST Analysis of Samsung Electronics
Political Factors
Although Samsung is operating in many countries throughout the world and generating a significant amount of revenues, it is sometimes affected by the local rules and regulations, local stock exchange, taxation, and rate of exchange; moreover, in some instances, political instability and unrests creates some adverse situations over its operations and consequently lowers down its turnover as well.
Economic factors
During the recessional period, the profits and sales of the products of Samsung Electronics have reduced significantly than previous years; as a result, it had a great impact on the net profit; for example, from 2000 to 2007, its sales have noticed to increase gradually, but from 2008, its sales decreased dramatically which reached the worst situation during 2009. However, in 2010 onwards, the company has started to recover from such financial crises as the customers are gaining back their confidence.
Socio-cultural factors
Samsungs corporate-culture encourages the employees and focuses to make them feel like a part of the company; therefore, the specialists at different locations scrutinize the local-culture, lifestyles as well as business trends; additionally, to design the product according to the taste of the local customer, it maintains separate Corporate Design Centre to find out peoples requirements and demands.
Technological factors
Innovative technologies are changing the lifestyles of people; therefore, Samsung continues to advance its technology; for example, it uses advanced-technologies including next-generation Samsung mobile-phones to expand the initial 1GB-DRAM using 50-nanometer manufacture-processes and 32GB-NAND flash-memory through 40nm-processing; it is important to argue that technology was the only reason for which Samsungs net sales increased by 24% within last 11 years.
The organizational structure of Samsung
The following figure shows the organizational structure of Samsung electronics and this charts demonstrates that CEO of this company control and implement strategies of major segments such as Visual Display Division, IT Solution department, R&D structure configuration, Digital Appliance segment, LCD segment, Mobile communication segment and so on.
On the other hand, it has the opportunity to consider the multi-divisional structure As Samsung is highly differentiation oriented and the profit of this company does not depend on a single product. Also, this company would like to use the horizontal integration strategy to expand its business but it should have different raw materials supplier, technological platforms, strategic planning, corporate HR, Corporate marketing and different marketing plan.
Technology and medias influence on future marketing plans
In an industry that is constantly changing in terms of technology, it is arguable that Samsung is bringing its technology together with business unit product development parts, network technologies, information technology systems and Samsungs research laboratories; moreover, it is expecting to deliver the greatest technical support to customers by inspiring R&D, enhancing its relationship with technology-providers, and developing its IT platforms.
This signifies the fact that in a situation where a firm like Samsung needs to cope up with ongoing technological changes constantly when it would come to making future marketing plans, the potential technological advancements in terms of hi-tech advertising mediums are highly likely to significantly impact the entire planning process.
To elaborate, currently, while doing the marketing plans of the company, the policymakers try to provide a greater emphasise over the advertising mediums like print media, radio advertising, television advertising, outdoor promotion, demonstrations at fairs, concerts etc. by allocating a large amount of expenditure at the marketing budgets. However, it is arguable that the marketing budget allocations remain the lowest for most modern advertising mediums through the internet, like web marketing, including Search Engine Optimization (SEO), advertisement through social networking sites, website development, blogs, and e-mail.
In near future, it is very much possible that the customer dependency over the use of internet increases due to the rising number of people striving to buy things online through e-commerce websites, or more and more people joining the social networking websites where the advertisements can be made. The customer dependency over e-commerce websites and online buying would mean that less number of people will be visiting outside for shopping purposes reducing the necessity of the expenditure over outdoor advertising. On the other hand, spending more time chatting with friends online would mean that customers will spend less time watching television or listening to radios. This would mean more marketing budgets are needed to be allocated for internet-based advertisements and fewer budgets over television, radio, outdoor promotion, or print media.
Effect of sustainability management on Samsungs reputation
Samsung experienced the adverse impact of the global financial crisis in 2008, but the position of this company changed in 2009 while it captured the highest share of the global market for the first time (Samsung Electronics, 2009, p.17). Also, the positive news is that Samsung is one of the most demanded brands in the Asian market. However, Samsung has taken a few initiatives to change its strategies and goals that play a vital role to improve the financial position and build a positive image to the customers as well as stakeholders. Here, it is important to mention that sustainability issues might affect the reputation of Samsung Electronics in the future. However, the following figure shows the approach of Samsung to sustainability
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Samsung was committed to reducing greenhouse gas emissions from operations (like GHG generated from business premises and its products) by 45% from 2001 levels;
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This company will invest approximately KRW5.4 trillion as part of its Green Management Plan to control GHG1 by 50% from the 2008 levels and develop eco-products by 2013;
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However, the key objectives of Green Management Plan are addressing climate change, developing eco-products, promoting eco-friendly workplace, and green communication;
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To reach the stated goals, the Green Management Committee has already developed a particular action plans to build a prosperous society and protect the environment through business activities that give due respect to inhabitants and nature;
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It has collected almost 37,000 tons of e-waste, and recycled around 83% of it into valued resources including scrap iron, plastic and non-ferrous metals;
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In January 2009, this company established the CSR Liaison Office to develop communication with the Sustainability Management Committee and reports directly to the Chief Executive Officer for successful implementation of sustainability management;
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However, Global Harmony with People, Society and Environment is the sustainability management vision of the company;
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The main strategies of Green Management are installing equipment to lessen GHG emissions during the manufacturing procedure, implement an energy management system and install new equipment after obtaining in-house energy certification, amplify energy efficiency of products, and assists the business partners to establish GHG inventories
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Samsung Electronics (2011) reported that it designs most of electronics products considering environmental issue such as it introduces PC with a fuel cell that can to ultra-low energy refrigerators;
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The employees of this company always work hard to produce environmentally friendly products and increase the usage of recycled materials;
Organizational Culture
Samsung is a Korean company but it has employees from a different culture as it allows the global talents; as a result, this company uses English in speaking, documentation and the overall electronic communication though all the website run in three separate languages such as English, Italian and Chinese. However, Samsung has ensured the equal opportunity for all employees though only 40.1% of employees are female and 46% of employees recruited from the overseas market (Samsung Electronics (2010, p.29).
Conclusion
Fuelled by advances in information technology, the global infotainment environment is growing rapidly; consequently, Samsung foresees potential business opportunities in all sectors including environmental and energy solutions, which will envisage the company over the upcoming decade guided by experienced Business-Team, R&D-hubs, technology-centres and individual business-units, Samsung hopes to develop specific roadmaps that will turn these opportunities into reality.
Reference List
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2001) Strategic Management. 4th ed. South-Western Thomson Learning.
Kotler, P. & Armstrong, G. (2006) Principles of Marketing. 11th ed. London: Prentice-Hall
Kotler, P. & Keller, K. (2006) Marketing Management. 11th ed. London: Prentice-Hall.
Samsung Electronics (2009) Samsung Electronics Annual Report 2009. Web.
Samsung Electronics (2010) Financial Reports of Samsung. Web.
Samsung Electronics (2010) Sustainability Report 2009-2010 of Samsung: Global Harmony with People, Society & Environment. Web.
Samsung Electronics (2011) About Samsung: Our Sustainability Reports. Web.
Samsung Electronics (2011) About Samsung: Samsung Profile.
Samsung Electronics (2011) Mission of Samsung Electronics. Web.
Samsung Electronics (2011) Vision of Samsung Electronics. Web.
Shuey, S. (2010) Samsung pricing strategy aimed at increasing share. Web.
Stoner, J. A. F., Freeman, R. E., & Gilbert, D. R. (2006) Management. 6th ed. London: Prentice-Hall.
Footnotes
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Greenhouse gases.
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