Case Study for Strategic

1. 2012
Samsung: Redefining The Brand- Case Analysis
Lecturer Name: Sim Lim
Guan
Jujhar Singh Sidhu
Student ID: 12667282

2. I. Current Background
Samsung Electronics part of “Samsung Group” is one of the most respected Industrial
Chaebols. Samsung was founded in 1938 and has been the most important player in the
industrial alteration in early 70’s and throughout 1980’s. Now Samsung is a power house
with 175,000 employees worldwide with operations in 67 countries. With sales of 116.8
billion in 2002 it exceeded Hyundai to become the top group in South Korea. Listed as 15 th in
Asia and 59th in world by fortune magazine Samsung indeed has come a long way.
Globally, Samsung Group concentrated on four core activities: finance, electronics, and
trade services, but Samsung Electronics is the flagship and largest business of Samsung
Group. Pat Button Vice-president, sales also said that domestically, they are the largest
electronics company in South Korea, with investment of 7% of revenue in R&D which
resulted in Samsung establishing itself as a reliableperformer by providing products that
range from mobile phones, high-definition TV’s to PDAs with front-line technology. To
increase brand awareness Samsunglaunched a very powerful campaign worldwide
“SAMSUNG Digitall – everyone’s invited”.
Canada’s consumer electronics market consisted of four apparatuses: business users,
young generation, high-income familiesand hobbyists. Consumer electronics in Canada were
sold only at large specialty stores like Wal-Mart and Future Shop in addition to online
stores.While the average per capita income of Canadians was less than Americans still they
were not hesitant to spend money. Samsung in Canada faced some issues like weather to give
extra budget for advertising, distribution, pricing in order to strengthen their position in
Canada.
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3. II. Case Issues
The challenges faced by Samsung was of suitably shifting their product line, evaluating
levels and distribution strategy, they also wanted to reposition their brand as a leading brand
for the Canadian market. The Swot analysis of Samsung Canada shows:
Strengths Weakness
• Product Innovation • Contempt certain product line due to
• Fast in making decisions regarding tremendous focus on already successful
processess product line
• Knowledge in digital electronics • Impact on revenue from sales after
• Variation in range of product giving retailers profit margain
• Powerfull marketing techniiques
• Huge R&D investments
SWOT Analyis
Opportunity Threats
• Less price penetrating • Supremacy from main competitor, Sony
• Return policies favourable • Attainment of future shop by best buy
• Request for good customer service • Opposition from
• Swift adoptation new technologies Chinese, Korea, Eurpean and Japanese
• Highly technically savvy electronics company
Figure 1. SWOT Analysis
Samsung Canada also faced problem with the promotional budget, whether to increase
the budget or not, but on the positive side SECA benefited from spill over of USA and other
global branding efforts. Another issue was SECA sold low-end products that were not going
toe to toe with companies new brand position, but these were the products that were
generating revenues and were a strong point of Samsung in Canada. J.S. Park, president of
SECA had to come up with a new emerging policy for starting Samsung as a premium
consumer brand in Canada. For a new strategy to work Park should decide whether or not to
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4. make changes on products, price and advertising budget including distribution strategy.
Therefore, problem here is to achieve redefining Samsung as a premium consumer brand
while not to have loss.
III. Analysis
The SWOT analysis shows that SECA wanted to increase the brand image in Canada
and also are careful that in doing so that they do not harm the company’s image.Opportunity
lies infavorable return policies, technology savvy and less price penetrating. In return,
maintaining strengths enable them to do product innovation and huge R&D investments.The
weaknesses needs to be short-lived and, SECA can do this by increasing the revenue by
increase in prices or generating new product line.
Porter Five Forces analysis shows that, SECA needs to be conscious on threat arising
frombuyers and suppliers. SECA needs to provide supplementary value on product and
service toprogress their value chain activity with this they also need to protect negotiating
power from supplier and buyer. Separating and continuingorigination and high quality
product will help company to survive in the market.
New Entrance – High Power of Buyer - Medium
• Company with strong financial support • Hard to satisfy customer
can enter. • Low cost switching to other brand
• Specialist knowledge
Industry Competitiveness –
High
More competitor in premium
range of electronics industry
High quality differentiation
Power of Supplier – Medium Substitute Product - High
• Samsung has own distributon channels • Not a unique product
• Lot depends upon Wal-Mart, Zellers & • More innovations but equally strong
Future Shops competition
• High performance in subtitute product
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5. Channel distribution have two ways through which they can distribute the products: direct
channel, IE: selling though wholly owned showrooms to customer, the other channel is
Indirect channel: selling through third-party arbitrators (Keller, 2008) like Future Shop, Best
Buy and Wal-Mart. Currently SECA is using both direct channel as well as indirect channel
to sell the products . SECA used to sell all the major products through retailers and SECA
also sold most of its products to high end chains. SECA also sold products through Wal-Mart,
Best Buy, and Future Shop. The main strategy used by SECA was to involve these big chains
in the partner like relationship and involve them in product development stage.
On the other hand, Samsung promotion was driven by Samsung activities in United
States, these things had both negative and positive effect, on positive side SECA was able to
access the promotional material and use it in the Canada market, but on negative side it
lowered the SECA ability to tailor the promotion in such a way that it is suitable for Canadian
market. SECA knew that if they are not careful in redefining their brand then they could have
increase in promotional expenses and decrease in revenues if product lines are
forewent.Aaker, in 1991 identifiedsome workings of brand equity that are brand loyalty,
brand awareness, perceived quality, brand association and some other brand assets. Brand
equity is a set of brand assets withaccountabilities that are linked to brand that can add value
from the product. This shows that it is important for Samsung and SECA to maintain their
brand equity so that they can create brand loyalty and they could add more value as their
competitive advantage (EURIB, 2009)
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6. Brand Equity Model-Aaker
Two pillars marketing strategy can be adopted by SECA.For SECA and Samsung
Group to be a premium brand, brand and its elements must play an important role. Samsung
has a very unique logo and one of the most recognised logo. The logo which is blue in colour
represents “trustworthiness, reliability and commitment in service.These brand elements
facilitate customersthinking patterns and it means a lot to the consumers what exactly does a
brand represent. SECA haseminent their product in term of quality and invention from its
competition in Canada. They are first in many things. To redefine their brand SECA needs to
retain the core value and come up with unique products and fresh ways to deliver products
and service so that they can they keep their policy of redefying their brand on track.
To sum, SECA, due to its enormous capital, needs to be careful on their expenditure
on promotional activities and maintain their core image and redefine the image at the same
go. Increase in sales volume without any good brand equity,and without any after sale
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7. service, the image of the SECA and Samsung would decline. On the other side, focusing their
brand equity will delaythe profits they are making now.
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8. IV. Formulation & Evaluation of Alternatives
Reject to increase the Budget Partially Accept (increase of budget
for redefine the image of and abolish of some high revenue
Full increase in Budget Samsung in Canada products)
Advantage Disadvantage Advantage Disadvantage Advantage Disadvantage
Will not be
Maintain the Concentrate more
Able to be Will lose able to touch Affect the overall
loyalty to on new products;
appealing and premium masses and revenue, popular
customer who develop the new
more recognized positioning and may not products will have
found the brand products into best
Brand in Canada uniqueness complete their a setback
unique. sellers.
Attribute mission
Increase in
Can maintain Will not be They can People associated
chance to get
Can lose loyal good consumer able to maintain quality with brand before
advertise more,
customer who relations, and strengthen the control, more hold redefine can
and will be able
wanted unique can maintain brand and over distribution possibly divert
Brand to have brand
their uniqueness redefine it of products from brand
Association identity
Brand Image will People who
Samsung can
Will help This will not be uplifted and thought that
Weaken because provide
redefine the help in people around Samsung is not for
customer emotional value
brand and expanding the will come to masses and
percieved are not and mental
increase brand brand in know more about specially for them
unique anymore image in
Brand knowledge Canada Samsung and they will wither
consumers mind
Image their mission away
Will Maintain
Can sell
It is will be Brand positioning
worldwide, help
distinctive and it around the globe
to achieve
will deliver and will
organizational
constant quality strengthen their
goal, boost up
Brand to customer footprints in
profit
Positioning Canada
Consumers will
Will be be able to relate Old consumers will
strengthen as more to the Loyalty will be leave and they wll
people will be brand and will increases many think that they are
able to relate stay loyal if it is people will join no longer
more to the able to project SECA important as it is
Brand brand itself in a good for the masses
Loyalty light
Help to
strengthen the
Samsung will
image of the
have higher brand
Redefining the brand and with
equity due to
brand will give launch of new
refining the brand
higher return to projects it is
and they will be
shareholders better for
able to sustain in
company to
a long run
Brand leave footprints
Equity in sand
Redefining the Well-known
Will be able to brand is a hard brand and with Problem would be
reach more work and require redefine of the Will be able to to sustain a long
consumers and loads of brand it will reach to more term commitment
Future company will be financing, this stay in hearts of customers and as new
Growth more immune to will have an people and target a large organizations are
and threats, higher impact on the SECA would be customer base coming up with
Potential sales volume finances of able to manage better prices
Problem Samsung it.
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9. V. Recommendation
The best alternative for SECA is to capitalize on its customer service rather than changing their
product line. They should also focus on customer satisfaction rather than bring changes in their price,
distribution and product line. Firstly the main challenge is to eliminate some products line because
though they are profitable products but still they are low-end line of stuffs which is inconsistentwith
Samsung’s strategy to reposition them. I can recommend that Samsung should not kill any of their
product line which is making money and generating revenue for the company so that they can rebuild
the brand name; there are other ways to do the same.
Another serious issue was pertaining to price of the products, which were already priced at a
low range and the pricing of these products might damage company’s determination to refurnish the
brand image. Contrariwise, raising prices for these products of Samsung might have negative impact
and consumers can be choosing other brands over Samsung as Canadian market is very price
sensitive. Raising price itself does not necessarily mean that the brand is the best or premium.
The features or the positive point that Samsung products different from other brands are the
after sale service and quality of the product is of high standard. Another high is that most of
Samsung’s products are sold in retail shops like Best buy, Future Shop, in addition to the products are
also sold by large merchants like Wal-Mart and Staples and they are all big organizations and with
good brand name.To remove these product ranges from Wal-Mart, Best Buy and other stores because
of their less pricing will weaken the company image and reduce sales volume and it is for sure that
nobody in the management would want the sales volumes to dip.
Lack of direct relationship between how the products are circulated with that image of Samsung is a
hindrance, because if customers are well-informed about the product range and about the brand they
will buy the products no matter where they are sold. To add more I believe that most of the consumers
are looking for suitability of finding products anywhere.
For the reasons shown above, I suggest SECA not to make any changes in these three areas. Instead,
SECA should invest in its customer service and focus on customer satisfaction because even though
the brand is premium, electronic products might still cause a problem. If the company immediately
solves any problems and satisfies customers’ wants and needs, they will become loyal to the brand
and make Samsung a premium brand.
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10. VI. Implementation
SECA can improve on few things so that its customer service is world class
Helpline URL menu should be made consumer friendlyso that it would be easy to reach the
specific department if that is their whole purpose. Step should be taken to reduce the wait
time on phone for people trying to reach technical support when customers have questions
about products, defective products should be replaced with temporary products till the time it
is being repaired and customers will not feel left out or their daily work is stopped.
Informing customers about the repairing process and letting them how long it will
take. Customers will be satisfied by implementing all of the above; they will know that
Samsung is taking care of their problems. This willeventually lead to a word of mouth and
will eventually help bring in more customers and will make Samsung the best brand in the
electronics consumer market and SECA would be very happy with all the transitions
happening. It is also a fact that when it comes to electronic market word of mouth travels
faster and people buy the products if recommended by friends or relatives.
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11. References
Samsung Logo. (2008, december 12). Retrieved from http://www.famouslogos.us/samsung-logo/
Mosley, R..(2008). The Employer Brand: Bringing the Best of Brand Management UK: John Wiley &
Sons
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