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Marketing strategies of Samsung in India Scenario in the consumers Durables sector:- Prior to liberalisation, the Consumer Durables sector in India was restricted to a handful of domestic players like Godrej, Allwyn, Kelvinator and Voltas. Together, they controlled nearly 90% of the market. They were first superceded by players like BPL and Videocon in the early 1990s, which invested in brand-building and in enhancing distribution and service channels. Then, with liberalisation came a spate of foreign players from Samsung to LG Electronics to Sony to Aiwa.
Both rising living standards, especially in urban India, and easy access to consumer finance have fuelled the demand for consumer durables in the country. Also, the entry of a large number of foreign players means the consumer is no longer starved for choice. But this has also resulted in an over-supply situation in recent times as growth levels have tapered off. Major players:- The major players in the consumer durables industry, operating in different sectors such as air conditioners, washing machines, refrigerators & television include: Blue Star Ltd. Mirc Electronics Ltd. , Whirlpool of India Ltd. , Philips (India) Ltd. , BPL Ltd. , Sony Corporation Ltd. , Samsung India Ltd. , LG Electronics India Ltd. , Videocon International Ltd. Entry of Samsung in India Emerging Markets (EMs) with large consumer bases and untapped demand constitute the major growth opportunities for the multinationalsand global companies. However, not all companies are successful in establishing a foothold, leave alone operating profitably, in such markets. For most, it takes years of struggle before they can even breakeven.
Marketing is difficult in such EMs because of little or no market data, non-existent or poorly developed distribution systems, lack of regulatory discipline, and where regulations exist, a propensity to change them frequently and unpredictably. Samsung entered India in December 1995 as a 51:49 joint venture with Reasonable Computer Solutions Pvt. Ltd (RCSPL), owned by Venugopal Dhoot of the Videocon group. In 1998, RCSPL diluted its stake in Samsung to 26% and in November 2002, the FIPB cleared Samsung’s proposal to buy RCSPL’s remaining (23%) stake.
With Samsung buying the total stake of RCSPL, it became a wholly-owned subsidiary of its South Korean parent company. In spite of being a latecomer to India, Samsung was able to become one of the top consumer electronic companies in India, an emerging market was due to a combination of several aspects: Product innovation, Promotion, Pricing, distribution and Positioning; wherein Samsung primarily focused at. The three-pronged objectives of Samsung are: – 1) Strengthening their channel relationships, 2) Enhancing their product portfolio and ) Creating the best service infrastructure, to gain more mindshare. ” Positioning:- Many multinational companies adopt a “less developed countries” mindset, assuming that these markets are at an earlier stage of the same development path followed by the developed countries. To take the example of the automobile industry, Ford and GM launched their outdated models like Ford Ikon and Opel Astra in the Indian market. When these models did not sell well, the companies changed course and decided to launch newer models in India.
In the case of Samsung, the company from the very beginning launched its whole range of high technology products, which included CTVs, audio and video products, information technology products, mobile phones and home appliances in India. It introduced products such as the ‘Bio’ range in CTVs, high-powered Woofer series of colour televisions in 21-inch and 29-inch conventional and 21-inch flat TV segments. And not to forget the lateset DNie television. By positioning itself on the technology platform, Samsung was able to differentiate itself from its competitors.
Differentiation today is the key for a brand to be preferred by the consumers, when there are so many other brands within the same product category. Without differentiation, its loyal customer base cannot be created or sustained. But to be a true differentiator, a company must provide features that are meaningful to customers. Which is what exactly Samsung has been doing. Products: – Samsung’s product range in India includes CTVs, video products, information technology products, mobile phones and home appliances.
Its product range covers all the categories in the consumer’s electronics and home appliances. According, to the analyst’s wide product range of Samsung is one of the main reasons for its success in the Indian market. The wide range products are as follows: – ??? Home appliances ??? Microwave Oven ??? Refrigerator ??? Air Conditioner ??? Washing Machine ??? TV, video & audio ??? TV ??? DVD Player ??? Camcorder ??? Audio ??? Home Theater ??? Digital Audio Player ??? Digital Still Camera ??? Mobile Phones ??? GSM ??? CDMA ??? Information technology products ??? Note PC ??? HDD CD Rom & DVD Rom Drive ??? CD & DVD Read & Write Solution ??? Monitors ??? Laser Printers & Laser Based MFPs ??? Fax Samsung by launching innovative products and using proprietory technology was able to gain market share. Samsung has therefore set up Samsung India Software Centre (SISC) and Samsung India Software operations unit (SISO) for software development at Noida and Bangalore respectively. While the Samsung India Software Centre in developing software solutions in Samsung’s global software requirements for hi-end television like Plasma and LCD TVs.
SISO is working on major projects for Samsung Electronics in the area of telecom: wireless terminals and infrastructure, Networking, SoC (System on Chip) Digital Printing and other multimedia/digital media as well as application software. In addition to working on global R&D projects, SISO is also helping Samung India’s CDMA business by focusing on product customization for the Indian market. Market Share: – |Products |Brand |2004 |2005 | |Refrigerator |LG |25. 6 |29. 4 | | |Whirlpool |21. 6 |23. 2 | | |Godrej |19. 8 |16. 3 | |Washing Machine |LG |31. 9 |35. 1 | | |Samsung |14. |13. 4 | | |Videocon |14. 8 |13. 9 | |TV |LG |24. 2 |26. 7 | | |Samsung |16. 4 |15. 4 | | |Videocon |10. |11. 00 | Product features: To sell a consumer durable product a company has to provide unique features i. e. features which other companies are not able to provide. Samsung has been using the same strategy to boost their sales. Samsung provides its consumers with wide range of products with unique features. For example, Samsung was the only company offering a 1000 watts PMPO sound output in the 21-inch flat TV segment. It also introduced a new 5. kg, top loading fully automatic washing machine with features like ‘saree course’ keeping in mind that the majority of the Indian women wear sarees. Refrigerator:- ??? Bio Ceramic Technology(Bio Fresh Refrigerators) BIO FRESH prevents evaporation of moisture, cell activation; supports antibacterial function and also prevent the alteration of proteins. This keeps the food fresher for a longer time. At the heart of Bio-Fresh refrigerators is Bio Ceramic technology. Ceramics form a part of the raw materials used in the manufacturing of the Vegetable compartment.
Ceramics have the unique property of emitting ‘Far Infrared Rays’ (FIR). The FIR helps retain the moisture content in the vegetables, fruits and other natural products as they are in the natural resonant frequency of water molecules. The ‘FIR’, in combination with technologies like the Bio-Deodorizer, Dynamic Super X Flow cooling system with i-cool and Humidity Controller makes the Samsung Bio-Fresh refrigerator one of the most unique products in the Indian market today. Bio-Vegetable Box is made of the newest Bio-Ceramic material.
Bio-Ceramic material radiates far-infrared rays, which help retain the moisture content in vegetables, fruits and other natural products, keeping them rich in nutrients and essential vitamins for a longer period of time. ??? Super X Flow technology The Samsung 250 NMB incorporates the Dynamic Super X Flow technology. This technology sets up a smart cold air distribution system to maintain an even temperature throughout the refrigerator! This effectively achieves three clear benefits: Even Temperature, Quick Cooling and Energy Savings. ??? Samsung’s Twin Cooling System
Samsung’s Twin Cooling System controls and generates cooling air for the refrigerator and freezer independently with two separate evaporators and precise electronic control, thus maintaining each compartment at their optimal cooling conditions. This results in a more efficient refrigerator with powerful performance! Electricity Consumption Comparison These features reduce energy consumption by 30%, compared to previous models, with a high efficiency compressor and better insulation (A class: ISO standard) Another Freezer in Refrigerator Compartment The Twin Cooling System allows the CoolSelect Zone to maintain -5?
C (Soft Freeze mode) in the refrigerator compartment. While food stored in the freezer is not easy to handle, the Soft Freeze mode sets the temperature low enough for easy slicing and allows medium-term storage. This is only possible by the Twin Cooling System. ??? i-cool TM The i-cool system is an intelligent cooling system with three cold air outlets-at the back, on the right and left sides of the refrigerator interior. Cold air is evenly distributed with multiple outlets on every shelf level. I-cool multi-flow has more air outlets than the general multi flow technologies.
This further ensures that as compared to conventional frost-free refrigerators the Samsung i-cool is more efficient both in terms of cooling and power consumption. With cold air flowing from three sources, the i-cool system cools 40% faster and 50% more improved even cooling than a conventional cooling system. Washing Machine:- ??????????????????? TORNADO PULSATOR:- SUPER DRY: -Samsung introduced India’s first Semi Automatic Washing machine with a SUPER DRY Feature. The SUPER DRY Feature provides a 10 minute Spin Dry Timer, which gives you the power to ensure that your clothes get the BEST POSSIBLE DRYING.
SUPER DRY is great value; especially for the Monsoon and winter months, when clothes don’t dry easily. This powerful feature is available on the latest models launched recently – WT9300, WT9200, and WT7800. While all other brands will provide the standard 5 minutes Spin Dry Timer, these models give you EXTRA DRYING for full 10 minutes. I-CONTROL SYSTEM:- The Samsung Washing technology is designed to put you in control of the washing process, and the machine action. Samsung Washing Machines are packed with an array of incredible features that come together to make the I – control system.
These include the ‘ECO Wash – that saves water and detergent’, ‘Child Lock – To limit small children with tampering settings and getting hurt’, ‘Auto Restart – that saves you the bother of restarting the washing machine each time the power fails’, ‘Memory backup- enables the washing machine to remember programmed wash cycles and settings’, ‘Delay Start- To enable you to time the washing machine with your water supply and other chores’ and ‘Fuzzy Logic – that makes the washing machine intelligent to adjust automatically to wash loads, water and detergent levels’ etc.
These 6 amazing technologies come together to put you in total control and command of the washing machine and the wash process ??????????????HYDROJET WASHING TECHNOLOYG: Samsung Hydrojet gives you a combination of three powerful washing actions: Waterfall Flow: Strong flow of water that streams down from the top. Pushing heavy and light clothes towards the pulsator. CentreJet: A strong gush of water formed right at the center of the washing machine, forcing the dirt out of clothes.
This also ensures that the clothes do not get entangled at the center. Water Pores:- Saves water and detergent and washes clothes from all sides. BIO WASH TECHNOLOYG: Clothes washed in Samsung Washing machines are not only dirt free, they are also ‘germ free’. Samsung has developed this unique Bio-Wash Technology to ensure just that. The Bio-Pulsator is made from some percentage of Bio – Resin, which destroys germs and keeps the environment inside the washing machines, pure and germ free, wash after wash. Air conditioners:- ???????????????? Turbo power: {BRINGS INSTANT RELIEF FROM HEAT} The Turbo function makes the AC operate under full power for 30 minutes, irrespective of the set temperature, which leads to quick change of the room temperature, instantly bringing the air-conditioning comfort in the room. Turbo operates faster than the conventional system. The new compact range of Samsung Window ACs not only occupies lesser window space but also are more aesthetically appealing. ??????????????????? Quick power optimizer: {ENSURES LOW ELECTRICITY BILLS} The Samsung Split Air conditioner’s 5-Step Heat Exchangers have 122% larger surface area.
Samsung Window Air conditioners are equipped with a 3-row cooling coil and L bent condenser coil that provide a larger surface area helping the refrigerant to dissipate heat faster. This results in faster chilling and lesser strain on the compressor resulting in lower electricity bills. Micro Oven:- Bio Ceramic Technology: Only Samsung Microwave Ovens come with a unique Bio Ceramic Enamel coating. Bio ceramic enamel produces less oxidation, which helps retain essential vitamins while cooking. The ceramic enamel retains 2. 5 times more heat than stainless steel, leading to faster cooking.
High scratch resistance: Bio Ceramic Enamel’s durability and protective qualities make it far more scratch resistant than other microwave interiors. When scratched with equal force, the roughness of the ceramic enamel surface increases only 7. 5% compared to 106% for the stainless steel. Higher nutrient retention: Food cooked in Bio Ceramic enamel cavity microwave ovens retains significantly greater amounts of vitamin C and F (an essential fatty acid that helps reduce cholesterol and blood pressure) than food cooked in conventional stainless steel cavity microwave ovens.
Exclusive Feature: 3D Showerwave Unlike other Microwave Ovens, only Samsung Microwave Ovens come with the unique 3D Showerwave System, which helps to distribute heat evenly, enabling uniform cooking horizontally and vertically. Television:- The Samsung 70-inch PDP TV (Plasma Display Panel) and at 54 inches is the world’s largest thin film transistor liquid crystal display (TFT-LCD) television and offers the highest picture resolution available anywhere in the world.
The 70-inch PDP delivers high-definition imaging from over two million pixels – a resolution twice the clarity of other models on the market today. Samsung has also applied its proprietary Digital Natural Image engine image-enhancement technology to ensure the highest quality possible image in terms of picture brightness and contrast. Samsung’s 54-inch TFT-LCD TV features a crisp, high-resolution image and excels in performance that ensures a smooth playback of the most action-packed visual content.
The 1920 x 1080 resolution and 16:9 aspect ratios can accommodate future changes in high definition broadcasting. These advanced features and unprecedented screen size, combined with inherent crisp display characteristics of TFT-LCD, make this 54-inch TFT-LCD TV one of the most advanced display products available today. India’s first wireless home theater (Bluetooth technology): Samsung India Electronics Ltd. has introduced India’ s first wireless home theater, Model No. HTDB390 in the Indian market.
The wireless Home Theater in Box (HTiB) uses bluetooth technology to provide a wireless connection to the rear speakers of the 5. 1 channel speaker setup – eliminating the need for rear wires, and giving the user total freedom to setup the rear speakers. Wireless HTiB – rear speakers totally remove the hassles of wiring up the home theater. Extremely convenient they embody the concept of HTiB (Home Theater In Box) – since a user can literally take the system out of the box and place the speakers around his/her room to create a Home Theater.
Add to the feature of “no-wires”, the Samsung exclusive sDSM feature that calibrates sound from each speaker at the touch of a button to give the best sweet spot – and this Home Theater provides a never-heard-before audio experience. DVD:- The highlight of the Samsung DVD Range is the Hypervision DVD, HD 938, which is the world’s first and only HDTV compliant DVD Player. The Hypervision DVD utilizes the world’s first digital visual interface (DVI) output to transmit uncompressed digital video signals without any analogue conversion, preventing image quality loss.
This results in viewers being able to enjoy high definition quality picture quality even for standard DVDs. Bio Colour Televisions:- Samsung India Electronics Ltd. has launched a new, advanced Bio Range of colour televisions in the Indian Market. Termed as the Only Healthy TV, the Samsung Bio TV has Samsung’s internationally patented Bio Ceramic Coating on the Picture tube that emits Far Infra Red rays when switched on. The FIR rays are known as “Light of Life”, since they have been used for centuries by medical practitioners for their therapeutic and curative properties.
The FIR Rays penetrate the skin of the viewer and get absorbed by the human body, leading to the release of body toxins, enhanced metabolization and increased micro blood circulation. Thereby, improving the immunity and protecting the entire body. The Bio TV has also been physiologically tested to increase alpha ray emission from the brain, which indicates a state of relaxation. The Health benefits of the Samsung Bio TVs have been certified by the Indian Board of Alternative Medicine. Silver Nano Technology:-:
Silver Nano has been developed by Samsung Electronics researchers who worked for three years to perfect the technology. With over US$10 million invested in R&D, Silver Nano is the first technology that combines the disinfectant and antibiotic properties of electrolytic silver nano-particles (Ag+) in washing machines to remove 99. 9% of bacteria. Set on “Silver Wash”, the washer’s sterilization system generates silver particles that kill off bacteria and mold in the laundry load without bringing the water to a boil. Thus, less electricity is needed to achieve a hygienic effect.
This process also treats the inside of the washing machine tub to kill bacteria and mold, suppressing the odor and contamination that accompanies their formation. When the machine is set on “Silver Sterilization” mode, the laundry load is covered with Silver Nano particles during the rinse cycle. After the washing is complete, the clothes have been found to be totally devoid of bacteria and will remain so for up to 30 days, earning the “Sterilization Mark” from the Korea Testing & Research Institute for the Chemical Industry.
Silver Nano is incorporated into refrigerators by coating the inner surface to keep germs from growing. By keeping the cooling environment germ-free, food stays fresher for up to 15 days longer and a Silver Nano deodorizer keeps bad odors from affecting food taste. Air conditioners have a Silver Nano filter that keeps germs from growing inside the machine and prevents allergy-causing bacteria from being blown into the air. Silver Nano coatings greatly reduce the presence of fungi and bacteria within five minutes of operation.
DNIe Technology:- Digital technology leader, Samsung India Electronics Ltd. today announced the launch of its revolutionary ‘Samsung DNIe Vision’ range of Flat colour televisions on 7th April, 2005. The Samsung ‘DNIe Vision’ range comprises of 15 new models in 15”, 21” and 29” size categories. The DNIe Vision Range from Samsung delivers performance that is much superior to conventional televisions on account of the DNIe technology. The new technology produces complete image quality; any signal input comes out cleaner and more natural.
DNIe can completely eliminate blurring from movement or image prolongation. A deep contrast can also be achieved. What is more, the finest detail appears sharp, while the vivid natural color is most pleasing to the eye. DNIe Technology in a Nutshell Samsung’s unique DNIe technology encompasses four functions that analyze all signal input, from analog to high definition, in stages. The volume of noise in the signal is detected and the signal level is classified according into analog, SD or HD and then optimized accordingly.
Motion Optimizer: Processes Noise More Completely than Ever Before This noise processing technology integrates temporal and spatial concepts to ensure clear images even when the motion is very fast. Contrast Enhancer: For a Deeper Contrast This technology employs a contrast ratio of one million or more and a new algorithm that can reproduce the optimal contrast to provide a deep and rich image quality. Detail Enhancer: Complete Images, True to the Finest Detail A vastly improved technology for automatically analyzing the picture signal reproduces images in amazing detail, resulting in more lifelike video.
Color Optimizer: Vivid, Natural Colors The video signals being generated are analyzed and the quantities of reds, greens and blues are calculated to provide the colors most natural to the human eye. After Sales Service :- Offering advanced technology products and positioning itself on the technology platform will not help a company sell its products if it fails to give proper after-sales-serfvice. With a focus on strengthening the satisfaction level of the consumer, Samsung India Electronics Ltd (SIEL) has launched its 3S ??? Speed, Smile and Sure ??? campaign.
As part of this customer service program, the company is working on a two-pronged strategy. This involves: one, improving the service infrastructure by setting up customer service plazas in key metro locations; and two, improving the skill levels of technicians by setting up a training school with a technical evaluation system for after sales service engineers. Till now, most of the players in the sector have been professing that it’s the relationship with the customer that matters. However, with the competition increasing, customer satisfaction is fast becoming a core issue,” an industry analyst pointed out.
He further stated that Samsung’s current effort “will also strengthen its customer base as most of the players claim that 60 per cent of their sales is repeat purchase. ” Promotion:- Offering advanced technology products and positioning itself on the technology platform will not help a company sell its products if it fails to communicate properly with the potential customers. To raise brand awareness and create strong, favorable and unique brand associations, Samsung adopted various marketing strategies like celebrity endorsements, corporate advertisements, highlighting its technological superior goods and many promotional schemes.
Advertising: – Samsung is involved in aggressive marketing and advertising of its product to develop attitudes, create awareness, and transmit information in order to gain a response from the target market. Their main advertising channels include ‘media’ such as newspapers (local, national, free, trade), magazines and journals, television (local and national) cinema, outdoors advertising (such as posters, bus sides). The initial advertisements communicated presence of Samsung in worldwide markets and its dominance in those markets.
To increase its brand awareness, Samsung went in for celebrity endorsements. Initially, the company signed Hindi film actress, Tabu, to endorse its brand. Till 2002, Samsung’s ads focused on the technological supremacy of its products. But by late 2002, in addition to the technology plank, the company started advertising on the plank of ‘passion for country’ and sports (cricket and football). Its latest ambassador is John Abraham for its mobile phone and Rahul Dravid for its Television range. Sales Promotion:
Along with advertisements, Samsung also focuses on promotional schemes to increase its sales. In October 2001, Samsung launched its highly successful promotional scheme, the Samsung Phod ke Dekho Offer. This offer instantly boosted the sales of the company generating sales of Rs. 2. 75 bn from this offer. The campaign was launched on an all India basis during the festival season. Under the scheme, consumers who bought any Samsung product were given a tamper proof plastic coconut with three coins in it. One out of every 10 coconuts had a lucky coin with a gift printed on it.
As a part of the campaign, Samsung’s brand ambassador, Tabu interacted with the customers and dealers of Samsung in Bangalore and Chennai and handed over the lucky coconuts to select Samsung customers. The prizes included products from the Samsung range. The Phod ke Dekho offer was followed by another promotion scheme in May 2002, Dabake Jeeto offer coinciding with the football World Cup. During the promotion every customer who purchased company’s electronics or home appliances product got plastic football with an alarm clock in it.
The customer had to press the football from the top, and was given the free etched on the tamper-proof anodized sticker. Under this campaign, Samsung gave out gifts worth Rs. 100 mn, which included Samsung digital flat TVs, frost free refrigerators, microwave ovens, Karisma washing machines, mobile phones, cameras and Soccer 2002 official licensed T-shirts from Adidas. This campaign notched up sales worth Rs. 310 Crores during the period of the Promotion. The next major promotional campaign was the Phir Se Phod Ke Dekho offer.
The offer was launched during October-November 2002 generating a sales of Rs. 380 crores. It was a repeat of the earlier ‘Phod Ke Dekho’ campaign. On March 20, 2003 Samsung Launched ‘Samsung Rang De Kismat Offer’ for Frost Free Refrigerators which entitled a customer to Lucky Gifts worth Rs 4 Crores, with the purchase of any Samsung Frost free Refrigerator. This Promotion derives its name from the ‘Rang de Kismat’ glass, which was handed over to a customer with the purchase of any Samsung Frost Free Refrigerator.
The Customer needed to pour chilled water into the glass and wait for the ‘Bio’ logo on the Glass to change colour to find out the gift won by him/her. There were Colour Codes for types of Gifts won by the Customer – For example, a Green ‘Bio’ entitled a customer to a Samsung Microwave oven while a Red ‘Bio’ gets the Lucky winner a Gift Voucher from Tanishq worth Rs 30,000. This offer was launched to capitalize on the sales of its Frost free refrigerators in the summer months. The Company’s market share went up to 21% in the Frost free refrigerator market after the offer.
Following its success with its ‘Samsung Rang De Kismat Offer’ Samsung India come up with another innovative Consumer Offer “Samsung’s Bundling Offer with Reliance IndiaMobile” for the buyers of its Consumer Electronics and Home Appliance Products in the Delhi and NCR Region on 25 July, 2003. A buyer of any Samsung Consumer Electronics or Home Appliance products gets the option of walking away with a sleek, advanced Samsung Mobile Phone N191 model along with a Reliance IndiaMobile connection, without having to pay any activation charges.
Furthermore, the user gets free talk time worth Rs. 600 over a 6-month period. All other payment terms are the standard billing terms and conditions offered by Reliance IndiaMobile depending on the package taken up by the customer. On 6 October 2003 Samsung India Electronics Ltd launched its mega festival promotion called ‘Samsung Pinning Toh Winning Offer’ on an all India basis. In this Promotion, where the consumer stood to win an assured gift on the purchase of any Samsung product, have gifts worth Rs. 100 crores to offer as prizes.
The offer entitled the buyer of a Samsung product, a card with a unique 16 digit alpha-numeric code. All the consumer had to do is SMS “SAM” followed by the 16 character code to 8888 and s/he would immediately get a message showing what gift has been won. The Gifts won in the Promotion include; Samsung Projection TVs, Samsung Mobile Phones, Samsung Yepp Disc Players, Samsung DVD players, Titan Fast Track Glares, Touch Screen Landline Phone, Trendy Portable Travel Iron and Britannica Encyclopedia 3 pack CDs. This offer was basically launched to maximize its sales during the festival season.
Following its success with its ‘Samsung Pinning Toh Winning Offer’ Samsung India Electronics Ltd launched ‘The $-DOLLAR Program’ for its IT Reseller and System Integrator fraternity on June9, 2004. The program meant for the System Integrators (SI) was applicable on Samsung monitors, Hard Disk Drives (HDD) and Optical Media Storage (OMS) products. Each time a SI/reseller purchases Samsung products from a Samsung Star Elite or Samsung Storage Preferred Partner (SSPP), the SI was issued a cheque. The cheque was of one of the four colors ??? White, Blue, Silver, Gold ??? depending upon the products bought.
Samsung believes that its SIs and re-sellers play a pivotal role in business growth. They are the ones who provide them the edge that they need in today’s competitive marketplace. This is why they have spearheaded revolutionary programs for them ensuring healthy growth in revenues and profitability. The last sales promotion offer was launched on Feb 3, 2005 called “Fastest Finger First” which was a nation wide contest to find India’s fastest SMSer. The message to be typed reads as follows: “The razor-toothed piranhas of the genera Serrasalmus and Pygocentrus are the most ferocious freshwater fish in the world.
In reality they seldom attack a human”. This SMS had to be typed on the cellphone keypad, complete with punctuation marks and lower & upper case. No predictive text (T9 Dictionary), QWERTY keyboards/ any keyboard was allowed. Sponsorship:- Samsung used sponsorship of events like Olympic series to boost its sales. Samsung was the global wireless communications sponsors at the Athens Olympics. Samsung used the strategy of relating itself directly with the values of the Olympic games, which included attributes like world class, global, excellence, fair competition and peace.
The Olympic series of August5, 2004 was Samsung’s salute to the Olympic values. Samsung was the sponsor of Lakme India Fashion Week held on April21, 2005. Team Samsung cricketers – Irfan Pathan, Mohd. Kaif and Virendra Sehwag launched the World’s Best Handset, Samsung D500 during the Samsung Show at the Lakme India Fashion Week. The theme for the Samsung Show was ‘The Best Thing Says Everything’ in keeping with the positioning of Samsung D500 – Samsung’s latest and path-breaking mobile phone which has been rated as the ‘World’s Best Mobile phone’ by the 3GSM Association World Congress held at Cannes in February 2005.
Samsung sponsored Samsung & MTV Youth Icon 2005 on June10, 2005. The idea behind the sponsorship was that the Samsung Mobiles were targeted at the fun loving, lifestyle oriented and trendy youth of today. By associating with the Samsung & MTV Youth Icon, they are seeking to further strengthen their relationship with the youth. Samsung mobiles make a style statement and by partnering with the Youth Icon, this positioning is further re-inforced. Samsung was even the sponsor of Samsung IIFA Awards held on June 13, 2005.
Popular film actress, Preity Zinta was awarded the ‘Samsung Diva’ award while Hrithik Roshan was conferred the prestigious ‘Samsung Style Icon’ award at the Samsung IIFA Awards 2005. Samsung India had carried out an online voting process on the Samsung India website between May 20th – June 5th 2005 for selecting the recipient of the ‘Samsung Style Icon’ and ‘Samsung Diva’ awards. The same was also promoted extensively on other sites like indya. com and msn. com as well. The Company received a phenomenal response to this online voting contest. The ‘Samsung Style Icon’ and ‘Samsung Diva’ awards which have been growing in popularity year on year, the company uses the response level received every year as its popularity indicator. Direct Mail:- Samsung even uses Direct Mail concept for its product promotion. Samsung sends mail to target consumers depending on the database i. e. the frequency of site visit and on their purchases. Samsung is very actively involved in e- commerce. Distribution Channels:- Samsung uses supply chain to enhance differentiation, increase sales and penetrate new markets and channels.
Its supply chain is beneficial in several ways. It helps the company to deliver products to the customer faster. It efficient supply chain is transparent, so that all the players in the supply chain have the right information at the right time about the movement of the products within the chain. This means lower inventories, elimination of waste, and reductions of costs. In addition to the intangible benefits like quick feedback from customers help in launching new products. Samsung has 24 state-level distribution offices and a direct dealer interface.
The direct dealer interface helps the company to get quick feedback from dealers, and enables it to launch products according to consumer needs. To minimize time overruns, Samsung delivered its products directly from its factories to its Regional Dispatch Centers (RDCs), and from there to dealers. Samsung has sales and service networks all over India and 650 service points. Samsung has implemented an innovative logistics system ??? Global Logistics Network Systems (GLONETS). GLONET application is used on the B2B i. e. Business to Business front for the vendors.
This involved linking the key vendors, which form the bulk of Samsung’s sourcing (26 domestic and 30 international) through Samsung’s GLONET. This system enables Samsung to connect its purchase department with the Samsung headquarters and international procurement offices through integrated ERP systems. The integrated ERP system enables Samsung to purchase its requirements from its international procurement offices and also from its Indian vendors. This application is also extended to order placement, production plan sharing and invoicing, resulting in shorter business cycles and reduced inventory levels and low waste.
In addition to GLONETS, Samsung also believes in JIT (Just-in-Time) concept to its dealers. To make delivery of products within 48 hours of the expected date of delivery, the company has setup four RDCs, one at each regional location of the country. The distribution channel is structured very systematically wherein all the transactions and business conducted is documented. The program is based on incentives so that dealer payments can be made on time. The Company supplies its goods to the Star Elite who supplies goods to the distributor who in urn sell the goods via their own channel of retailers and distributors. The Samsung Brand shop network complements the over 8500 retail points for Samsung products located across the length and breadth of the country. Samsung plans to continue enhancing its penetration levels in the country to reach out to more and more Indian consumers. They consider the Star Elite partner as their actual product champion as their link with the end customer. As, they have been adding value to the sale to the customer and guiding him to the right purchase decision at a fair price.
Shop-in-shop: Samsung is ensuring a presence in most big malls and multiplexes; even in the multi-brand outlets, as the focus there is to create a shop-in-shop atmosphere. The exclusive showrooms: Keeping its target customer to display Samsung products in a more lifestyle ambience and to communicate the product benefits in a more interactive manner, Samsung India has set up a widespread network of over 80 exclusive showrooms comprising Samsung Digital Zone (focusing on high-end digital audio-video products such as MP3 players, camcorders and LCD/plasma TVs).
The Samsung DigitAllhome goes beyond the concept of a Digital Plaza or a Brand Shop because in the DigitalAllhome, they are trying to create a more interactive environment and providing a more lifestyle orientation to the display, so that the customer can visualize the products in his/her own home settings. The Company plans to supplement its existing Samsung Digital Plazas’ (Brand Shops) by setting up ‘Samsung DigitAllhomes’ in select cities. The Company will also be creating exclusive Samsung corners in multibrand outlets this year. The demands and needs within the distribution channel lead to the establishment of MyMemoryStore. om. The site is more than an ordinary selling site, infact it is an industry portal that allows the business partner to come in and track the relevant industry information within the channel, meaning minimizing the inventory overhead. Samsung is also planning to invest over $1 million in setting up a chain of exclusive outlets called `Samsung Talkies’. The entire Samsung mobile range including the latest handsets will be displayed at the outlets, which will be set up in more than 10 cities across India, including Bangalore, Mumbai and Hyderabad. Distribution Channel in 2005:
Post VAT they have modified in their policies a bit. The most important step was to bring down channel inventory post the Budget impact and the VAT impact. They made a conscious decision to bring down channel inventory, which was at that point of time 60 days, today it is reduced to 11 days, which entails total inventory among dealers, distributors, star elite and SI. This has been done to ensure that the channel stays profitable. Samsung India tied up with PlanetM for displaying its new audio range at the PlanetM Outlets in Delhi, Mumbai, Kolkata, Pune, Chandigarh and Bangalore. Pricing:
Pricing also seemed to have played a significant role in Samsung’s success. Differentiation is the key for a brand to be preferred by consumers, when there are so many brands within the same product category. Samsung believes in providing good products at reasonable prices to its customers. Samsung’s technology plank communications helped the company to gain market share, even though it did not offers any discounts or exchange scheme when it entered India. Samsung focuses on cost-cutting measures to keep its price low which helps to combat the discount schemes of the local companies.
For e. g. – In 2001, due to high competition in the 20″CTV segment, Samsung had to resort to price cuts. The company said that value engineering, new product lines and new chassis development had contributing in combating price erosion. Samsung negotiated with its vendors to reduce costs on cabinets, plastics, speakers, harness coils, remote controls, etc. Samsung’s Brand image seemed to have helped it survive the price erosion. Dealers also agreed to lower margins owing to company’s brand image.
Samsung in the year 2002, drastically reduced its operational costs which enabled the company to keep low prices for certain products and extract higher profit margin from premium products. This helped Samsung to post a turnover of Rs. 30bn, a 2 growth from the year 2001. Samsung is very transparent in functioning. It has a fixed MoP (Marketing Operating Price) whereby the goods are sold to the distributors and to the customer’s at a fixed market price only. The focus of its competitors is to penetrate in the rural and semi-urban mass markets.
But Samsung insists that it’s a high end technology driven player. That’s why the urban areas are still a focus area for it and only 30 per cent of revenue comes from rural and semi-urban India. They have always been a hi-end technology driven player and want to keep that equity. Not surprisingly, the target customer for Samsung products won’t be found in the price-sensitive mass market. Adopting the lifestyle product platform, Samsung’s aiming for the high-end premium market. Hence Samsung has always been keeping premium prices.
Samsung claims it’s never been a price warrior ??? its focus has always been on the premium market, which is why it has remained a steady No. 2 or No. 3 player in most product categories. It is difficult to achieve the ambitious targets keeping in mind the pricing strategy of Samsung. But, they believe that it takes time to ensure your supremacy in market share. Once you get your brand perception right in the minds of the consumers as a brand that delivers the best technology and gives you value for money, then ultimately market share goes up.
Later on Samsung changed its policy a bit and instead of just remaining a high-end technology driven brand it tried to change its image to sell products to the huge number of middle income families in India. It started pricing its products on the “value for money” concept, keeping in mind the price sensitivity of Indian consumers. But still Samsung has the repute of being a premium brand, aggressive in launching newer models with the latest technology and at economic costs throughout the world Pricing Strategy Post VAT
Post Budget, they have ensured that there is no discounting in the market and also the prices of OMS had to be increased by 4 percent since price stability is of fundamental importance in channel business. This is the biggest marketing stand that the brand could have taken as the brand stands above individuals and the transactions that happen. Price range: – SAMSUNG LG ??? Mobile Phones:- GSM ??? 3,649-21,399 4,800-28,000 ??? TV, video & audio:- TV:- Projection TV
LCD Projection TV – 69,000- 109,000 89,990-99,990 Flat Panel Plasma 265,000- 9,0,000 2,95,000-7,50,000 LCD TV- 59,990- 265,000 75,000-1,69,900 Flat TV 29 inches- 19,990- 31,990 20,290-37,990 21 inches- 8,990- 17,690 9,190-11,990 15 inches- 6,890- 8190 7,990-10,500
Conventional TV 21 inches- 13490 7,990-8,990 20 inches- 7690- 8990 7,890-8,890 DVD Player:- 3,990 ??? 5,000 3,990-4,990 Audio:- VCD System – 9,900- 26,990 8,500-26,990 DVD System – 16,200- 25,990 13,990-29,990
Home Theater: – 12,990- 68,000 15,990-19,990 ??? Information technology products:- Note PC – 69,990- 159,990 79,500-1,70,000 CD Rom & DVD Rom Drive CD Rom Drives- 750 1,600 DVD Rom Drives- 1,600- 1,900 3,300 CD & DVD Read & Write Solution
CD Writers- 1,600 4,250 Combo Drives- 3,000-5,000 6,500 DVD Writers- 4,600 7,800 Monitors CRT Monitors 17″ magic Bright Range- 8,000 13,750 15″ Entry Level Range- 5,450 5,750 LCD Monitors – 15,000- 34,000 19,500-46,800 Home appliances Microwave Oven Solo – 4,990-6,990 5,490-7,990 Grill – 5,990- 10,590 6,990-13,990 Convection – 12,990- 15,590 12,990-18,990 Refrigerator:- Direct Cool – 7,500- 10,200 9,950-11,400 Frost Free Side by side system- 68,000- 1,20,000 69,000-1,25,000
Air Conditioner:- Insta Chill Window – 14,990- 23,990 15,490-20,990 Insta Chill Split – 24,790- 41,990 26,750-42,500 Washing Machine:- Front Loading – 6,690- 34,900 12,990-40,500 Top Loading – 11490- 25,900 12,790-18990 Semi Automatic – 6,990- 8,990 7,090-9,490 .
Future Prospects:- We have done a survey at retail outlets selling Samsung products and one thing that we found out common is that Samsung lacks in after sales service. The drawback in their after sales service strategy is that they have only one customer service centre throughout India which is situated in Delhi. When a customer has a complaint he approaches his retailer who in turn registers the complaint in the Delhi service centre from where the complaints are processed and replacements are made.
The presence of only one service centre makes it very difficult to give timely response as the complaints come throughout India. The complaints are not entertained for a period of 10 -15 days. Hence the customer is not satisfied with the after sales service of Samsung. Marketing Strategy:- Samsung has to improve its after sales service inorder to retain customer and create brand loyalty. The current policy adopted by Samsung is aggressive spending more on advertising and marketing and less on retaining customers that is after sales service.
So the corrective strategy to be adopted by Samsung must be to spend more on retaining customer rather than acquiring them as it costs 5 times more to the company to get to a new customer rather than pleasing existing ones. Moreover it costs 16 times to take the new customer to the loyalty stage. They should have regional service centres in North, South, East, West where the complaints can be received and processed quickly. Moreover they should employ and train the technicians to provide quality and timely sales service. Strategy To Expand Market Share:-
Currently Samsung ranks second in the Indian consumer durable market whereas LG ranks first. The problem with Samsung is that it is a premium brand and focuses only on urban and semi-urban markets whereas the rural market is neglected to a great extent which is why LG is dominating in that market. Samsung earns a revenue of only 30% from rural areas. India being a country of villages, Samsung should focus more in the rural market in order to increase its market share. Samsung should come out with new economic products like LG had taken out “Sampurna” television range aimed only for the rural market.
Hence Samsung could have come up with a conventional range of television models which although are no very technologically advanced but fulfills the basic needs. All these strategies are very practical promising higher gains with less cost pains. Questions for discussions:- 1) Samsungs success is mainly because of its aggressive marketing and advertising. analyze the role of marketing in Samsungs success in the crowded consumer durables market? Explanation:- Samsung not only launched innovative products but is also nvolved in aggressive marketing and advertising to develop attitude, create awareness and transmit information in order to gain response from the target market. The initial advertisement communicated presence of Samsung in the world wide market and its dominance in those markets. Samsung also went in for celebrity endorsement to create brand awareness. Samsung even focused on their technological supremacy to come up with promotional schemes which boosted the sales further leading to Samsungs success in the crowded consumer durable markets. ) Samsung positioned its products on the technology plank. However, as competition increased with most players introducing high technology products, how far do u think Samsungs technology positioning would help the company to gain the market share? Explanation:- Samsung product range covered all the categories in consumer electronics and home appliances which are one of the main reasons for its success in the Indian market. It launched the “BIO-RANGE” of home appliances, bio fresh refrigerator and bio-ceramic micro-ovens.
It also launched the DNIe technology and the Silver Nano technology because of which the demand for the Samsung products have increased by 40% according to our market survey. 3) The marketing mix of a company plays an important role in the success of the company. Discuss the role played by all the elements of marketing mix in Samsungs success. Which element contributed the most to its success? Explanation:- The concept of marketing mix consists of 4p’s (price,place,promotion and product). Out of these the “promotion” factor has mainly contributed to the success of Samsung.
YEAR STRATEGY SALES Oct 2001 “Phod ke dekho” offer Rs. 2. 75bn May 2002 “Dabake jeeto” offer Rs. 310cr Oct-Nov 2002 “Phir se phodke dekho” offer Rs. 380 cr March 2003 “Samsung rang de kismet” offer Oct 2003 “Pinning toh winning” offer June 2004 “The $-dollar programme” offer Feb 2005 “Faster finger first” offer