samsung marketing analysis

Samsung MarketingGhasem AzadMarketing Management

KHU, April 2017

FIFA World Cup2002

Final Match

2-0

2002FIFA World Cup Champions

Brazil

Who is the REAL winner?

Ronaldo

Oliver Kahn

Cafú

Luiz Felipe Scolari

The Real Champions

What happened after World Cup?

• Sustainable Development in both countries

• $ 3.2B of net profit

• Cultural exchange and cultural development

• Improve quality of residents’ life

• New international image of the host community

• Enlarge the industry of Korean products

Korean Improvement

Automotive Industry

Korean Improvement

Electronics Industry

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Korean Automotive Industry Improvement speed

Hyundai all models U.S. sale since 1985

Huge marketing on FIFA world cup

• Founded on 1938, 79 years old

• Entered the electronics industry in the late 1960s

• World’s 2nd. Largest IT company* (2016)

• World’s 7th most valuable brand (2016)

• “Fortune 500” Global Rank: 13 (2015)

• World's #1 manufacturer of mobile phones since 2011

• World's largest television manufacturer since 2006

• Comprised of more than 78 different companies

*: World’s ranking based on net revenue by Fortune 500

Samsung Electronics in numbers*

319,000Employees

*: Numbers are according to 2015 reports of Samsung Electronics

$ 177BRevenues

$ 16.5BProfits

$ 206.6BNet Asset Value

Others87%

Samsung13%

Samsungvs.

Korea GDP*

*: Korea GDP extracted from World Bank Data is USD 1377.8B

Samsung and advertisement

#1Biggest Marketing Budget in History

(USD 14,000,000,000 for 2013)

Samsung and advertisement

#13World’s Top Advertising Budget for 2016

(USD 3.3bn)

About Samsung

Lee Byung-chulFounder(Died on 1987)

About

Samsung Electronics

Dr. Kwon Oh-hyunVice Chairman & CEO(since 2012)

About

Samsung Electronics

Lee Kun-heeChairman(since 2010)

Tablets

Wearable Tech

TVs

Cell Phones

Home Appliances

Memory & Storage

Home Theater & Audio

Computing

Security & Monitoring

Smart Home

Management ideology at a glance

Management Ideology

Values:

Philosophy

To devote our human resource and technologyto create superior products and services

thereby contributing to a better global society

Management Ideology

• We comply with laws and ethical standards

• We maintain a clean organizational culture

• We respect customers, shareholders, and employees

• We care for the environment, safety, and health

• We are a socially responsible corporate citizen

Principles

Advertisements & Sponsorship

• Samsung realized that success lies in brand visibility

• Sponsorship increased brand awareness, very well!

• Samsung own many professional & amateur teams.

• Samsung is a sponsorship of many national teams.

• Team Korea

• Team USA

• Team GB

• Team Singapore

• Italia Team

• Sweden Olympic Team

• Belgium Olympic Team

• Australia Olympic Team

• Jordan Olympic Team

• Hong Kong Olympic Team

• Brazil national football team

• England national football team

• Austria national football team

• Olympic Games

• Paralympic Games

• Youth Olympic Games

• IAAF World Championships in Athletics

• FIVB Volleyball Men's World Championship

• FIVB Volleyball World League

• AFC Asian Cup

And many other competition, organization, teams and …

Rio 2016The Olympic Partners (TOP)

TOP totally paid $1.022bn to International Olympic Committee (IOC) for sponsoring!

Samsung war against Apple!

1.Series of ongoing lawsuits between Apple Inc. and Samsung Electronics.

2.Samsung’s anti-Apple marketing campaign!

Advertisement against Apple!Commercial Ad for Galaxy S2

Advertisement against Apple!Commercial Ad for Galaxy Note 3

Advertisement against Apple!

Commercial Ad for Galaxy S3

Samsung vs. AppleMarketing Mix Analysis

Marketing Mix

Overview

#1

• Apple has continued to expand its products

• Apple products started with “Mac”.

• Main product lines: Mac, iPad, iPhone, Watch, TV, Music.

• Product variety but not such a product range

• Samsung is comprised of more than 78 different companies.

• Main product lines: Galaxy, Gear, TV , Home Appliances,...

• Product variety and product range to address all needs.

• Many more expanded products than Apple!

#2

• Apple uses a premium pricing strategy.

• Apple’s pricing involves relatively high prices.

• The pricing helps maintain the high-end image of products.

• But Apple products attract a smaller market share.

• Just middle and upper classes can buy Apple products!

• Samsung uses various pricing because of its different categories

• Samsung usually use competitive pricing strategy.

• Skimming pricing cause a high value in the start before others!

• Competitive pricing use for products that face more competition.

#3

• Apple uses a selective distribution strategy.

• Mostly in the following places:

• Apple Stores.

• Online Apple Store & App Store (also on Amazon & eBay)

• Authorized retailers such as: Walmart, Target, Best Buy.

• Samsung uses a intense distribution concept.

• 3 Main Segments:

• Sales

• Service dealers

• Modern retail & distributors

• Sales and service dealers also open exclusive Samsung showrooms

#4

• Apple emphasizes the premium image and quality of products.

• Apple’s promotion includes the following elements:

• Advertising (on Apple.com, App Stores and other firms)

• Personal Selling (such as Apple Store employees who provide the product)

• Sales Promotion (such as exchange offer and modified payment plans)

• Public Relations (such as Apple events)

• Samsung believes that success lies in brand visibility (Huge ads).

• Samsung’s promotion include the following elements:

• Advertising (on Samsung.com, stores, IT news sites, Instagram, etc.)

• Personal Selling (Help the visitors to make a purchase by employees)

• Sales Promotion (Reduction the price by time, modified payment plans)

Brief Comparison

• High price vs. Reasonable price.

• Better design vs. Wide range and variety

• Global network vs. Availability

• Fixed Price vs. Flexible in pricing

• High-end materials vs. High volume

• Higher brand image vs. More promotional activities

• Patent war vs. Price war

Galaxy Note 7 Issue

August 19th.

Officially Released

September 2nd.

Suspended sales by Samsung

September 15th.

Formal U.S. recall was announced

October 10th.

Worldwide recall & ceased productionafter reporting fire on replacement phones

January 23th.Reporting the results of researchBatteries had suffered from a manufacturing defect in weldingprocess

Galaxy Note 7 Fail

Consequences

33%Samsung’s Operating Profits down!

in comparison to the previous quarter

Galaxy Note 7 Fail

Consequences

$17 bn.Estimating the lost revenue*

Because of production & recall

*: Predicted by Credit Suisse analysts

Galaxy Note 7 Fail

Consequences

HurtRecall effect on Samsung’s brand

Cause company lose its market share

We are sincerely sorry!

“First of all, I deeply apologize to all of our customers, carriers, retail, and distribution partners.”

DJ Koh., Head of mobile division

• Described about:

• What happened

• Our investigation

• Why it won’t happen again

• “Committed to Quality” as main title

• 96% of Galaxy Note 7s have been returned

• Exchange Program Choices:

• Exchange with another Samsung smartphone

• Obtain a refund at point of purchase

• Eliminates Note 7 ability to work as mobile phone!*

Note 7 Issue Page

*: Because of a released update for customer’s safety!

Maybe Sweet

“Galaxy S8”Will Make You Forget About Galaxy Note 7!

Huge Ads & MarketingBecause of an important product

• Advertisement on Internet

• SWOT Analysis

• Patent Fight

• Social Networks

• Korean Brand

• Financial Situation

• Samsung in Iran

Remaining Issues