An Interesting Case Of Samsung Marketing Essay

Published Date: 23 Mar 2015

Introduction

It is an interesting case of Samsung; to reposition its brand in the Canada market. The task was given to J.S Park, a president of Samsung Electronics for Canada division to come up with the unique and concrete strategy to establish Samsung as a premium brand for the targeted high-end customers in Canada. The challenge was to reposition Samsung from the brand of low-to-mid market consumer electronics and IT products into a high-premium-edge electronics with its innovation towards digital technology. In order to decide on the right strategy, he needs to decide on the changes to be made in the company's pricing, advertising and promotion, product line and distribution channels; with implications of changing various areas.

There are lot many challenges that Park has to face to transform the brand positioning (CUSTOMER-FOCUSED BRAND POSITIONING, 2006) of Samsung, while not causing the declining in sales of low-end products and also without affecting the losses in existing marketing mix of the company. Although the company has spent million dollars in the aggressive promotion to launch high-end products, consumers still perceive as and relate to the old brand of Samsung. J.S. Park, president of Samsung, Canada needed to develop an effective branding strategy to reinforce the presence of 'Samsung redefined brand' into the premium group of customer electronics.  

SITUATION ANALYSIS

The analysis will give the direction as to what right strategy should be used in order to reposition the brand in Canadian Market.

SWOT describes the strengths and weaknesses within the company and opportunities and threats in the external environment of target market.

Strengths

Samsung has an efficient R&D department employing 17,000 researchers. The company invests 7% of its revenue in R&D.

It has a wide variety of product lines to serve the market at every level.

The company's strength lies in its continuous innovations; which gives way to developing leading technologies in the electronics market.

It has a unique expertise in the areas of memory chips and visual displays over its competitors; which costs 90% of the most digital devices in the market.

The brand offers a wide range of products; giving consumers no option to switch to other brands for the related products.

The effective and lean decision- making process of Samsung gives it an advantage of first mover to launch its product extensions in no time. This is because of fast approvals on the new products to be launched, budget allocation, marketing plans.

The effective marketing strategies of Samsung make it a known brand in a shorter timeframe in the market.

Weaknesses

Samsung is swinging in confusion with its brand image not yet clear for premium and low end products.

The margin to retailers on sales is quite high which further affect the revenue of the company.

The consumers still associate Samsung to its low-end product line.

The brand has not been able to encash on its subsidiaries; the focus is majorly on electronics and information technology product line.

Excessive dependence of Samsung on its extensions: electronics, finance and trade & services.

Opportunities

The brand could be established dramatically for "digital technology", which is the expertise of Samsung over others.

The market is open in terms of no leader as such in the Canadian market of consumer electronics. So Samsung stands a better chance if they grab the opportunity and come up with innovative high-end products.

The target market of Canada is less price-sensitive and admires high-end technological products even if they have to pay more for it.

The market could be captured widely by servicing the clients well and assisting them in terms of after-sales service.

They demand for the complimentary return policies on the purchased products.

The third highest broadband usage is in the target market of Canada and consumers are greatly tech-savvy.

Threats

The biggest threat to the company is from well-established giant, "Sony" in the Canada market.

The decision of Best Buy to acquire Future Buy gives a new threat from the local retail brand of Canada.

The image of the mass vendors of providing heavy discounts could hamper Samsung premium positioning of its products in the market.

The competition from other electronic brands; like Korean, Chinese, Japanese and European products are also available at a much cheaper price and at easy availability on local retail shops.

Customer Analysis

The buyers in the market are less sensitive to pricing and take high price synonymous with high quality products. They associate brand with better after-sales service and favourable return policies. With the high education rate, people are tech-savvy and adapt quickly to innovations and new technologies.

The Canada market is divided into four customer groups: high income families, young generation, business users and hobbyists; on the basis of variation in their brand association with respect to their respective usage and benefits that these different groups perceive from the brand.

Competitor Analysis

Sony possesses a strong brand existence and recognition in Canada (Harris, 2012); brings a strong competition to Samsung in the Canadian market. The competition for the company also comes from the various speciality retail stores in Canada dealing into consumer electronics. These include Future Shop, 2001 Audio video, A & B sound and London Drugs, the Bay, Sears and Wal-Mart. These retail brands are popular with various localities in various locations of their operation.

Brand offerings

Samsung products are broadly categorized into 2 categories: consumer electronics and appliances, and information technology. The company has been popular with the electronic appliances (DVD player, plasma TV, MP3 player) market but with its continuous R&D and innovations making its brand existence felt into IT products (CRT monitors, HDD, optical disk drives) as well.

Issues

What does the brand stand for in the minds of the customers? Can the firm deliver on the promise of the brand idea? How to build brand equity and what would be the right brand elements for repositioning the brand. (Brown, 2010)

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(BALAKRISHNAN, 2012)

The major issue was the perception of the consumers in North America and European market for the Samsung brand. Their insight to brand was of a follower rather than a leader in its innovation for new technologies in the market. This further raised a number of issues to the management in order to launch the high-end product line to the consumers.

In order to deal with this issue, the company had to think on solving a number of related issues; how much is this brand positioning going to cost the company because of the stable market of Sony, Philips and Nokia with the approx. brand value of 13.90, 4.56 and 29.97 respectively.

What changes are required to be made in the marketing mix of the company? (the marketing process, 2010) The Samsung could not stop from selling low-end items which generated marginal revenue for the brand but was acting as a block to repositioning shift to high-end products. The total annual sales figures of 2002 shows that the products like Data storage, conventional television, appliances had average SECA margin of 2-5%, 5-10% and 2-5% respectively. So it was beneficial for the company to get continue with these lines from revenue perspective but threat to the brand repositioning in the long run.

The distribution strategies of brand involved the issue of choosing the online or the traditional retail chain to market and sell the brand in the market.

"Often the brand is perceived less valuable with its reduced cost" was the idea behind raising the prices in the Canada market after the R&D of the marketers, in order to reposition the products to premium category. On the contrary the price increase estimate by 5% and 10% shows decline in the sales volume for different products. (Digital Televisions: -5 (5%); -15 (10%)). These contradictory perceptions of the consumers for the low and high-end products in the same market of Canada gave rise to the "pricing" issue for the product line of the brand Samsung.

Does the brand need an increased promotional budget and by what amount? With the established market of Sony and the other giant retailers, the issue was the appropriate promotional budget in order to increase brand awareness in the market.

The apprehension about the reaction of competitors, existing customers and the distribution channels on the upgraded product line was a big issue for the Brand to deal with and accordingly be prepared with the action plan for the same.

Recommendations

In order to resolve the issues related to repositioning of the brand in Canada, the brand needs to enhance the brand value by creating its brand identity. The Samsung needs to redefine its brand to achieve the focal position as set by the company for its brand.

This could be done through establishing an effective brand strategy. Samsung should pay more attention to the establishment of a better image for its high end products in terms of quality, design and innovation. Brand assessment should be used as a tool to measure the strength of the brand followed by brand assessment reporting to the stakeholders of the company (Roberts, 2011). And on the basis of the reporting, brand research should be carried out. The exploration will give acumens into brand Naming and Brand Architecture to be used by Samsung; and then the Brand Positioning for Samsung should be taken care thereafter. The company should focus primarily on the major high-end brand and detach from the other brands considering the long run benefits than the current marginal revenues through these product lines.

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The elements of Brand Identity should be stabled. Typography, Logo Design, colour palettes and Imagery should all be well defined in a Brand Identity Manual. Samsung can standardize its caller tune and tones for all the telecommunication product lines, which could be useful for the brand identity. The association of the brand as innovative, music and movies, reliable, premium category is important for its repositioning strategy (McLaughlin, 2011).

The company should go on Brand indemnities. This includes brochures, magazines, signage, presentations, and case studies to acknowledge their performance among the target audience.

The company should then focus on the brand promotions; launch of the product in the market via press release and banners across Canada. Sales promotions could be used at the initial stage to boost up the sales of newly launched product. The company needs to understand the importance of brand asset management by the internal as well the external people who are involved in the creation and management of the brand.

Brand valuation and brand Protection are two important aspects that are need to be taken care of, by the company in order to have the right strategy implemented in a long run. So it's necessary to evaluate the brand time to time via survey to maintain the competitiveness and protect the brand in terms of its logo, name, and trademark from the competitors. Brand training could also be an effective to tool for the employees to understand and respect the brand identity. This would ultimately help in efficient and effective working towards building of the brand in the market.

The promotional budget should be increased enabling the company to get popular Canadian athletes to do the promotions and advertisements for the product.

The prices for the premium or the high-end products should be increased while sticking to the low pricing strategy for low-end products. The company needs to decide and accordingly serve the segmented market accordingly.

Implementation

The team under JS Park would be responsible to implement the suggested elements in the Canadian market. They need to coordinate with the marketing and finance department in order to decide on the promotion budget and then the allocation of the same to the various promotional tools.

The company to follow the traditional retail distribution channel and also launch its own online website to market and distribute its brands in the market.

The suggested changes and additions to products, price, promotion and distribution channels to be implemented in another 8 months from the date of its proposal.

The measurement of the implementation will be based on the rankings as conducted by business week magazine and other recognized online polls for the Canadian market.