Marketing Strategies Used by Samsung - Case Study Example

Running Header: Samsung Student’s Name: Name of Institution: Instructor’s Name: Course Code: Date of Submission: Table of Contents 1. Executive Summary……………………………………………………………..3 2. Introduction……………………………………………………………………...4 3. Basic Background Information on Samsung…………………………………….5 4. Objectives of this Report………………………………………………………...6 5. Data Analysis on Marketing Issues……………………………………………...7 6. Practical Strategies for Future Plans….………………………………………....10 7. Recommendations…………………………………………………………….....12 8. Conclusions……………………………………………………………………...13 9. References……………………………………………………………………….14 Executive Summary Many companies and businesses today are facing new pressure from the newly global well driven economy. The new global economy is characterized by high competition and globalisation which has led many business organizations to come up with survival strategies that will help them to thrive in the global market. An example of such a strategy is the strategic marketing management which is aimed at ensuring customer-centric/focused marketing strategies. Such a strategy requires these businesses to come up with objectives, properly designed and thought out market plans that will help them realize their marketing objectives. The Samsung Group is one such company that has undertaken several measures and strategies to ensure that it remains a market leader in its core business activities and dealings. This report contains findings of a study done on the Samsung Group so as to find out the marketing strategies that are currently used by the firm. This report further gives recommendations concerning new strategies that can be used by Samsung to market its products. The report contains brief and basic background information on Samsung which helps in understanding the core purpose, mission, vision, goals and objectives of the company. Introduction The report aims to identify the current marketing strategies that are employed at the Samsung Corporation. This is in relation to the efficiency and effectiveness of its strategies to the overall profits experienced at Samsung. The report aims to understand the coordination of activities in terms of the prices and the communication that ensures that the company is able to maintain its current ratings or improve them. This is in light of the very many firms that are offering very stiff competition to the company. The competition is also being exerted by the global economy which continuously demands the creation of goods and services that are in sync with the global trends on quality. The report also aims to further dissect the marketing issues and apply them in respect to future expectations. This is in relation to what can be done to ensure that the future of this brand continues to grow in all sectors all over the world. Surveys done at some major corporations reveal that most of these companies heavily rely on just one, two or three marketing strategies to ensure that they thrive in the market. Business experts, through the diverse business literature, recommend that there is a multitude of strategies that businesses can use to attract and retain new customers. There are other companies that spend millions of dollars in trying to advertise and market themselves. However, some of these companies are still not able to venture into the market and make the expected profits. Their products and services do not bring in as much money as they used in advertising promotion and marketing. That is why marketing should be done strategically and should involve a lot of research, analysis and planning before venturing into it (Doyle 2006). The Samsung Group has been in operation for very close to seven decades now. The group has been manufacturing and selling a variety of products that will be discussed in this paper. For the better part of this duration, the group has managed to remain successful and thrive in the global market despite the many challenges that it has been faced with. This paper reviews some of the ways that the Samsung Group has used to ensure that it continues to thrive amidst the stiff competition it gets from other top notch companies that produce similar products. The paper also gives recommendations that the Samsung Group can use to ensure that it performs even better than it is at the moment. Over the past decade, Samsung has been determined to ensure that it remains at the top of it league in the sector that it is concerned in. In fact, Samsung dubbed it the decade of determination and it has been involved in numerous projects and ventures to ensure that it maintains its brand name (Flynn 2006). Basic Background Information on Samsung The Samsung Group is an internationally recognized multinational conglomerate corporation that has its headquarters in South Korea, Samsung Town, and Seoul. The Samsung Group of Companies is made up of other numerous international affiliates and businesses. Most of these international affiliate businesses are united under the “Samsung” brand and they include Samsung Electronics, Samsung Heavy Industries, Samsung Engineering, Samsung C & T, Samsung Life Insurance, and Samsung Everland. It is the duty and role of Cheil Worldwide to act as a general subsidiary to the overall Samsung Group. Samsung Electronics is the largest technology company in the world by sales. The second largest shipbuilder is the Samsung Heavy Industries. The history of Samsung dates back to 1938 (Michell 2010). The overall Samsung brand is as a result of the ingenuity of a man named Lee Byung-Chull. He is said to have created the first successful chain of the future Samsung brand by his first company that concentrated mainly on the production of noodles. His company had an estimate of about 40 employees and their activities and the growth of the company was roughly cut off during the period of the war. He however picked up the company in Daegu and diversified in the options that the industries had to offer. He catered for all sectors of the economy by ensuring that the Samsung brand gained as much popularity as possible in their generation of products and services that were to be consumed locally and abroad (Gladwell 2000). It is these diversifications of the Samsung products in the 1960’s that has seen the overall growth of the Samsung brand to date. It has continued to diversify in its overall products and services on offer both to local and international consumers. It has received accolades for being the best producer of goods and services in several capacities. It is also highly ranked amongst the chief domestic producers. In relation to the process of exporting, the group has been ranked highest in the exporting of its products outside Korea. In many instances the general GPD of Samsung has been ranked highest even as compared to that of some countries in the world. It is a huge employer with many of the companies that are spread all over the world. This contributes to their overall growth in relation to expansion and generation of profits (Michell 2010) Objectives of this Report To study the current marketing strategies at Samsung Corporation To investigate on the effectiveness of these strategies at Samsung Corporation To analyse the data presented in line with observed marketing issues To recommend on the basic ways to improve the marketing strategies that are currently in use at the Samsung Corporation To study the background of the Samsung Group with the aim of understanding how the company operates Data Analysis on Marketing Issues (e.g. Current Brands, New Product Development, Distribution Strategies etc) There is no doubt that Samsung does all that it can to ensure that they have the most current brands. This is in relation to the goods and services that they produce. Samsung electronics provide a wide range of electronics for their many clients all over the world. For example, laptops, mobile phones and their accessories and many other items that caters for the needs of many diverse peoples all around the world. In relation to the mobile phones for example, the company has come up with varied products for its varied clientele. In the case of the Samsung galaxy, it has a specific group of people that find this type of phone very appealing while there is the other much simpler phone that can be used by a certain group of individuals. In the different variations of laptops, there are also specific clients who prefer laptops with complex specifications while there are those with the need for laptops with simple specifications. Samsung therefore has helped with the introduction of such goods into the market. This in turn has helped Samsung as a brand, become a household name globally (Moore 2000). Samsung has ensured that it has developed products that appeal to the general public all over the world. From the young to the old, everyone appreciates a Samsung product. This has helped the Samsung Corporation stay afloat in the competitive world of business with the different corporations that are also involved in the same business venture. After the products mentioned reach their final stages of production and everything goes as is planned, Samsung is known to have perfected the art of distribution of all its products all around the world with the setting up of different distribution points for these products all over the world. Such distribution points have enabled Samsung reach all of its clients globally and this in turn has enabled the Corporation attain its highest number of clientele than any other Corporation. In this day and age of competitive brands and corporations, Samsung can boast for having the ability to capitalise on the available market. Due to its different variety of products that range from fridges to the smallest memory chips that are so largely common in this modern day, Samsung has been ranked number 19 as one of the most popular electronic brands after overtaking Sony. In the world, Samsung is ranked second after apple for being the largest, by volume, in the production of smart phones (McLoughlin & Aaker 2010). As noted, the Samsung Group has a wide range of diverse products ranging from fridges, microwave, television sets, radios, mobile phones, computers, computer accessories, washing machines, MP3 players, DVD players, mobile accessories among other numerous products. The Samsung Group therefore has to employ different strategies to market all its products successful because all these products are meant for different functions and are used by different people. The Samsung Group has been on record as having spent hundreds of millions of dollars in trying to improve the feel and look of every product that it manufactures (Moore 2000). The company has also been engaged in doing a lot of research to find out the needs of customers and how it can satisfy those needs. For example, Lee and Choi have been undertaking a lot of research to try and identify the need of their customers. The research has entailed finding out what the customers need and what is more likely to sell even before the consumers themselves are aware of it or know that they want it. These efforts have been continuously paying off. In fact, thanks to such initiatives and ventures, Samsung has grown and has been able to become one of the leading brand names in the manufacture of electronics, appliances and other products (McLoughlin & Aaker 2010). Another way to prove that Samsung is growing has been through the awards that it has been receiving. For example, the company won more than five awards during the same year in the Industrial Design Excellence Awards (IDEA). It became the first Asian company to beat the famous European and American Companies that have always won such awards. Since the year 2000, Samsung has won a total of 100 citations at the top design contests in Asia, United States and Europe. The Hyundai securities firm expects the Samsung Group to earn up to $ 10.3 billion in sales, up from $ 5.2 billion the previous year. This is because the company’s sales statistics have always been on an upward trend. According to Patrick Whitney, the Director at the Institute of Design at the Illinois Institute of Technology, Samsung has been using design to increase its market share and brand value. This change in design is said to have began in 1993. The Samsung chairman, Lee Kun Hee visited major retail outlets in Los Angeles and saw that the Samsung products were the least popular among the other products. They did not stand out as expected because there were other products that were better than them in terms of design. The other products therefore seemed to attract more buyers than the products of Samsung. H noted that products from the Sony Corporation and a few other brands stood out in the crowd. When the Chairman went back to his country, he ordered his managers to stop concentrating on reduction of production costs and start focusing on coming up with more unique products that can stand out from the rest. Things have not been the same from then. In fact, it is these great designs that have catapulted Samsung to be among the top ranks in global brands (McLoughlin & Aaker 2010). The first step towards design improvement was seen when the company moved its design centre from Suwon to Seoul. This was in 1994 and during the same year, Samsung hired IDEO, a United States based Design Company meant to help in the developing of a computer monitor. In 1995, Samsung set up the Innovative Design School of Samsung. This was an in house school that offered training to promising designers. The Art Centre College of Design in Pasadena, a top design school in the United States, offered experts who would be responsible for training the promising experts. Upon the completion of their training, the company would then dispatch these trained designers to other regions such as Egypt, Paris, India, Washington, New York and Frankfurt to tour museums of design there, visit popular ruin sites and interact with the icons of modern architecture so as to improve their design skills. It has continued these efforts by adding the number of staff members to its design team. The company also spends a lot of money in ensuring that its designs are top notch. Data from the Samsung Group shows that the number of designers hired by the Samsung Group has been ever increasing annually from 1998. Practical Strategies for Future Plans Despite the fact that Samsung is well known, not everyone gets to see all of the benefits that are brought about by such a Corporation. This is due to the fact that some of the products produced by Samsung are not relatively cheap for many people to afford some of its much needed products. The Corporation should check into this issue so that to ensure that not only a handful of people can appreciate and use their products and services. They should also ensure that their distribution labels are well situated so as to enable everyone get to their products. For example, mostly in the developed world, one will find well developed Samsung bases that are fully functional and operational. In the developing world, the Samsung brand is only seen as that, a brand. When some of their products are not up to standard, many at times their warranties do not hold up leading to very many displeased parties (Moncrieff 2006). The Samsung Corporation should also not shy away from expanding their base. This means that other smaller corporations should conform to the otherwise well established Samsung Corporation so as to better some of the products they make and also get a chance to grow. This in turn could help Samsung develop not only in terms of size, but also in terms of innovativeness seeing as the smaller based company could come up with ideas on how to better the Organisation as a whole. Moreover, Samsung should also invest largely on production of newer and brighter ideas. This could help them stay abreast when it comes to their customer wants and needs. Research that may be carried out on the various customer needs may lead Samsung to ensure overall customer satisfaction that may use their products and with customer satisfaction, comes great returns in the form of profits to the Corporation and overall excellence business wise (McLoughlin & Aaker 2010). As part of its continued efforts to ensure that it continues to thrive in the market, Samsung has continued to ensure that it is engaged in more marketing strategies. For example, the Samsung Group has doubled the number of its design staff to 470 in the past four years so as to ensure that it has a competent design team in future. In the past 12 months, it added a further 120 personnel to its design team. Since the year 2000, the company began a plan to ensure that its design budget increases by between 20% and 30% annually. The following are some of the plans that Samsung has been involved in to ensure that the future looks brighter. Samsung has come up with a system and pipeline to ensure that their best designers are propelled to the top. Designers who come up with new and captivating designs can now be propelled to top management positions. This ensures that the quality of the designs is upheld and continuous in future. This promotes innovativeness and encourages the design team to ensure that it continues to be creative with its designs. Samsung is now using design-led information. Young designers are now encouraged to question authority when they feel that they are wrong. When young designers feel the need to change something in the operations of the company, they can now question the authority because their ideas are now respected by the company. Samsung is continuously sending its designers back to school so that they can work at fashion, furniture and industrial design houses so that they can keep in touch with the current trends in the market. Samsung is also expanding its global reach by opening up and expanding to new centres across the world to help it be accessible throughout the entire globe. Recommendations As part of its efforts to penetrate the global market, the Samsung Group can still do more in terms of growth and development. It is recommendable that the company embraces networking more often. This entails teaming up with other companies so as to do business together for the overall good of each company. The company should also try to increase its web presence and provide as much information about it as possible so that people can know more about it and go for its products (Nag, Hambrick & Chen 2011). The Samsung Group should also ensure that its distribution labels are well cited so as to enable everyone access their products. In the developed world for example, one will find well developed Samsung centres that are fully functional and operational. In the developing world, the Samsung brand is only seen as that, a brand. When some of their products are not up to standard, many at times their warranties do not hold up leading to very many displeased parties (Pine & Gilmore 1999). The Samsung Corporation should also seek to expand it base. This means that other smaller corporations should conform to the otherwise well established Samsung Corporation so as to better some of the products they make and also get a chance to grow. It can corporate with other smaller corporations to ensure that it grows further while helping them to grow more. This in turn could help Samsung develop not only in terms of size, but also in terms of innovativeness seeing as the smaller based company could come up with ideas on how to better the Organisation as a whole (Kotler 2005). Conclusion In conclusion, the Samsung Group has continued to face challenges in the global business environment ranging from competition to the global economic crisis. The company has however continued to thrive despite the challenges that are there in the global business environment. The company has geared itself up by taking all the possible steps to ensure that it remains competitive and successful. The current marketing strategies that it has been applying have proven to be fruitful but it still needs to do more because other competitors are emerging and also thriving in the market. The Samsung Group has put in strategies ranging from increasing financing, improving decision making and training its personnel among other tactful strategies. These have been done with the overall aim of making Samsung a finely tuned receptor of almost everything so that its products become must-haves in this highly competitive marketplace and global economy. References Doyle, P 2006, Marketing management and strategy, Pearson Higher Education, Chicago. Flynn, LJ 2006, ‘3 to Plead Guilty in Samsung Price-Fixing Case’, New York Times, p.12. Gladwell, M 2000, The tipping point, Little Brown, New York. Kotler, P 2005, Marketing Management, Pearson Higher Education, Chicago. McLoughlin, D & Aaker, DA 2010, Strategic market management: global perspectives, John Wiley and Sons, New York. Michell, T 2010, Samsung electronics: and the struggle for leadership of the electronics industry, John Wiley and Sons, Singapore. Moncrieff, J 2006, ‘Is strategy making a difference?’, Long Range Planning Review, vol. 32, no. 2, pp. 273–276. Moore, MH 2000, Creating Public Value: Strategic Management in Government, Harvard University Press, Cambridge. Nag, R, Hambrick, DC & Chen, MJ, 2011, ‘What is strategic management, really? Inductive derivation of a consensus definition of the field’, Strategic Management Journal, vol. 28, no. 9, pp. 935–955. Pine, J & Gilmore, J 1999, The Experience Economy, Harvard Business School Press, Boston. Read More