Satisfaction profit chain of Samsung 1

GURUNANAK SCHOOL
OF BUSINESS

ASSIGNMENT
SATISFACTION PROFIT CHAIN OF SAMSUNG

SUBMITTED TO
PROF.PAVAN

SUBMITTED BY

ANVESH MINENI

MAY 24, 2017

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Introduction to the company :(Samsung)

Since its founding in Suwon, Korea in 1969, Samsung Electronics has grown into a global
information technology leader, managing more than 200 subsidiaries around the world.
The companys offerings include home appliances such as TVs, monitors, refrigerators, and
washing machines as well as key mobile telecommunications products like smartphones and
tablets. Samsung also continues to be a trusted provider of key electronic components like DRAM
and non-memory semiconductors.
Samsung pledges to create and deliver quality products and services that enhance convenience
and foster smarter lifestyles for its customers around the world. Samsung is dedicated to
improving the global community through its constant pursuit of groundbreaking innovations and
value creation.

This vision is at the very core of our commitment to lead innovations in technology, products and
solutions that inspire communities around the world to join our aspiration for creating a better
world full of richer digital experiences. As we recognise our responsibility as a creative leader in
the global society, we also dedicate our efforts and resources to offering new values to the
industry and customers while fulfilling shared values of our employees and partners. At Samsung
Electronics, we want to create a future that is exciting and promising for all together.

As a guide to common understanding and measurable goal, a set of specific objectives is

incorporated into our vision. By 2020, we seek to achieve annual sales of USD 400 billion while
placing Samsung Electronics overall brand value among the global top 5. Three key strategic
pillars that are now part of our culture, business operation and management describe the
governing initiatives to this end: Creativity , Partnership and Great People.

We pride ourselves on delivering the worlds best products through operational excellence and
innovation prowess. As we look forward to exploring new business areas including healthcare
and biotechnology, we are excited for new challenges and opportunities ahead. Samsung
Electronics will continue to build on top of its current achievements new capacity and expertise to
further its competitiveness and its history of innovation.

Satisfaction profit chain:

The Satisfaction Profit Chain (SPC) is a theoretical framework that helps link attribute-level
perceptions, overall customer satisfaction, customer intentions/behaviors, and financial
outcomes. This chapter reviews existing empirical research in this area and provides guidance
and recommendations for future research. It is intended to be helpful to managers and academics
who are interested in understanding how customer satisfaction -- a focal construct -- is embedded
in the context of its antecedents and consequences.it considers 3 components ,customer
satisfaction, customer loyalty and business performance.

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Customer satisfaction:
Customer satisfaction is a term frequently used in marketing. It is a measure of how products and
services supplied by a company meet or surpass customer expectation. Customer satisfaction is
defined as "the number of customers, or percentage of total customers, whose reported
experience with a firm, its products, or its services (ratings) exceeds specified satisfaction goals.

Customer satisfaction is so important because without a high degree of it, profits can be lower
and harder to generate. A satisfied customer is likely to send more business back to the company,
while an unsatisfied customer may be more opposite to prevent the business from soaring.
Negative reviews from customers can have more of an impact on business than owners may
think. While the customer may not always be right, they need to be satisfied to the best of every
company ability.

Tele Analysis, published Customer Satisfaction Survey 2016 for the Indian smartphone industry
recently. According to the survey, Samsung has emerged as the most preferred smartphone
brand in terms of product quality and services among Indian customers. Since the industry is
highly contested and filled with many players, product quality and features, pricing and service
support have become the key factors of differentiation for smartphone vendors. According to the
survey, Samsung tops the list in terms of consumer satisfaction. The Korean company also
ranked high in terms of having best after sales service.

One of the senior manager at Samsung said that We combine global leadership in mobile and
fixed network infrastructure, with the software, services, and advanced technologies to transform
how smart devices and sensors tap the power of connectivity. With state-of-the-art software,
hardware and services for any type of network, Samsung is uniquely positioned to help
communication service providers, governments, and large enterprises deliver on the promise of
5G, the Cloud and the Internet of Things.

Serving customers in over 100 countries across the world, Samsung is driving the transition to
smart, virtual networks and seamless connectivity by creating one, single network for all services,
converging mobile and fixed broadband, IP routing and optical networks, with the software and
services to manage them seamlessly. Our research scientists and engineers continue to invent
and accelerate new technologies that will increasingly transform the way respondent and things
communicate and connect: 5G, ultra-broadband access, IP and software define networking,
Cloud applications, IoT and security platforms, data analytics, as well as sensors and imaging.
With the combined strengths of Samsung and Alcatel-Lucent, we are an innovation leader in the
technologies that connect respondent and things.

Newest Samsung Technologies practice will introduce groundbreaking new products like galaxy
gear, the extraordinary VR camera designed and built specifically for professional content
creators. Additionally, this focus area includes license offerings to be integrated into other
companies products and services.

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For example, we can take the Samsung smart phones, after Nokia exited the market Samsung
became the top player in smart phone industry but with the entry of china companies Samsung is
phasing competition.

Factors influencing on consumer satisfaction towards Samsung smart phones:

The several factors are influencing on customer satisfaction towards Samsung smartphones.
These are the following factors are more influencing on customer satisfaction towards Samsung
smartphone.

Price

Quality

Battery durability

Brand image

Availability of different colors

Availability of different sizes

Guarantee and after sales maintenance service.

Samsung retained its number one position in the worldwide smartphone market with a 21% share
in 2016Q3. This retention of position comes in the midst of the Galaxy Note 7 recall, thanks to the
continued success of the Galaxy S7 and S7 Edge devices. Samsung's streamlined portfolio of
devices, including the affordable J-series, proved successful in many mid-tier markets that were
typically dominated by local brands. How fast Samsung recovers from the damage to its brand,
remains to be seen.

The Samsung provides qualitative products to the customers. Most of the customers are satisfied
with the price, brand image and quality. The various factors are influencing on consumer
satisfaction towards customer satisfaction. The Samsung has been influencing these all above
factors to fulfill the customer needs and they are become loyal customers to the Samsung
smartphone.

Customer loyalty:
Customer loyalty a deep and permanent commitment to maintenance and repurchasing a specific
product or service in the future, thereby the same brand is re-purchased.

Loyalty to the brand and trade name, which for a long time is considered as one of the main
structures of marketing, is often the center of the brand name special value. If customers be
apathetic to the brand name, in fact, they do shopping according to the features, price and

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product-related facilities and almost regardless to its brand name. In this case, probably brand
special value is very low. But if customers continue to purchase from a specific brand, in the case
that competitors provide better characteristics, price or more appropriate facilities, that brand has
significant values.

In order to satisfy loyal customers companies needed to go beyond their expectations; otherwise
customers may tend to another supplier and probably based on the quality of products and
services received from competitors they can change the opinion of the other customers.

Many factors are contributing to customer loyalty. We have seen some factors which contributing
to customer satisfaction, some of them are responsible for brand loyalty. Samsung has always
had a strong showing in the annual measurement of brand loyalty by category, the brand is
now a leader across several consumer electronics categories, including smartphones, laptop
computers.

Samsungs advertising strategy over the past year is responsible for some of the positive
buzz around the brand, with the brand focusing on positioning itself to as a technology
innovator for young, tech savvy consumers.

According to the 2016 Brand Keys Customer Loyalty Engagement Index, consumers have
increased expectations when it comes to personalization and a sense of personal productivity
in the smartphone category, which contributed to Samsungs triumph over Apple. The results
suggest that Apple is no longer seen as the innovator in smartphones and tablets that it once
was . this is a positive point for Samsung, company with its innovative product is able to
maintain its customer base.

But in middle Samsung has phased some problems in customer loyalty due to smartphones
like galaxy note 7 recall. according to the survey. Consider that 34% of current Samsung
customers indicated they wont buy another smartphone from the brand. Of these customers,
81% have always owned a Samsung or Android smartphone.

Customers who exchanged a Note7 device also received a $25 gift card, in-store credit, in-store
accessory credit, or bill credit from select carrier retail outlets. This program help Samsung to maintain
positive image.

Samsung's decision to offer a larger credit to those who stick to its brand is likely an attempt to
offset customer losses. By offering four times the amount customers would get if they chose to
switch to an iPhone, for instance, Samsung hopes to convince more users to continue trusting
the Samsung brand despite the Note 7 disaster.

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Here are some key survey findings:

Of the Samsung customers that will stay loyal to the brand, 77% said its because they dont want to
learn a new phone. Other reasons Samsung customers cited for staying loyal with the brand
include:

Style (52%)

Options to customize experience (44%)

Battery life (39%)

Cost (35%)

Dislike of other smartphone brands (28%)

People will not be loyal to brand just because the product is good ,services also contributes to
customer loyalty. In smartphone market to service companies need to come up with new
technologies and innovative features. Samsung with its services like my galaxy service, My
Galaxy app gives you a unique all-in-one experience thats sure to delight you with amazing
content, unparalleled convenience and expert care. You also get personalized coupons and offers
on leading brands for the most commonly used categories like cabs, movies, travel, recharge &
bill payments.

Samsung Pay is one of the most widely accepted mobile payment systems in the world. Since
its conception in 2015, the app has evolved to accommodate every form of payment, including
gift cards and most recently loyalty cards. However, the most exciting development is
undoubtedly Samsung Rewards: the worlds first mobile payment loyalty program.

shoppers no longer have to carry wallets stuffed with debit, credit, loyalty, and gift cards because
apps like Samsung Pay allow customers to load all of these cards onto their phone. All they have
to do is open the app, scan their fingerprint, select the card they want, and presto! Theyve
completed their payment all without fumbling for their debit card.

Samsung Rewards was developed as a response to the high level of competition, and is being
used to overcome it with engagement, advocacy, and delivering great customer experience.
Before Samsung Rewards was released, mobile payment apps were all operating at the same
level with the same acquisition and encourages engagement with customer tiers. Their customer
count was purely based on how well customers understood the way the app functions and whether
they liked the interface. Now, customers are going to begin to expect additional benefits and
rewards as Samsungs loyalty strategy becomes the norm.

This leaves Samsung in an excellent position. As the innovator, theyve established themselves
as a forward-thinking brand with customer experience and value at the heart of their
business. Competitors, on the other hand, will be forced to come up with something new and

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exciting to set their brand apart. Moving forward it wont be enough to copy the existing
model. Customers will be looking for something fresh and new, and wont be interested in
anything less.

Business performance:
Business performance can be measured in many ways. The recent trend has been away from
simple short term finical measures such as quarterly profit or earnings per share. Leading
companies are moving towards a more rounded set of performance indicators, such as
represented by the balance score card.

Balance score card includes key performance indicators(KPI) like customer satisfaction levels,
customer retention rate, customer acquisition rate, average customer tenure. A CRM Key
Performance Indicator (KPI) is a standard measurement used to evaluate the process of
delivering satisfaction to all of the customer needs from your organization. KPIs can be set up
across key activities that are critical to the satisfaction of the customer. When performance falls
below a required level, management can begin the process of analyzing the cause and taking
corrective action. Since the customer decides who to do business with, these KPIs become
imperative to retaining the customer.

Customer Satisfaction The Most Important KPI.

A business that does not measure its success in each aspect of its customer deliverables
is just asking to fail. You may have a vision of excellent customer service, but one rude
customer support agent, or a botched product installation can mean the end of a lifetime
relationship. And if you dont even know where the customer disappointment occurs, the
problems will never be solved.

A business that does not measure its success in each aspect of its customer deliverables
is just asking to fail. You may have a vision of excellent customer service, but one rude
customer support agent, or a botched product installation can mean the end of a lifetime
relationship. And if you dont even know where the customer disappointment occurs, the
problems will never be solved.

Samsungs net sales have risen from 158.9 billion in 2016 to 220.1 billion in 2014. Their total
assets grew from 280.8 billion in 2016 to 343.7 billion in 2014. Unfortunately, their total liabilities
went from 181.7 billion in 2016 to 202.6 billion in 2014. Stockholders equity almost doubled from
80.8 billion in 2016 to 141.1 billion in 2014. Samsungs net income also increased from 12.9 billion
in 2016 to 21.2 billion in 2014.

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Its also not strange to see their employee base increase due to their explosive growth over this
five-year time span. They had 254,000 employees in 2016 and now have over 344,000 employees
in 2014. Their electronics division has 190,500 employees at the end of 2011.With respect to the
Smartphone business unit out of the 1.5 billion mobile phones sold worldwide in 2011, Samsung
accounted for 330 million of those units. Their Galaxy S6 sold more than 20 million units since its
launch in 2015.

Samsung not only makes smartphones, but also, they create components like displays, integrated
circuits which goes into competitors products, Samsung exclusively uses Googles android OS
for their phones, that have different software platforms but they are in stiffer competition with other
companies which use android.

Strategic measures taken for the learning and growth perspective are important. Samsung have
a more social media presence than its competitors but there is always a room for improvement.
With respect to internal process Samsung invested 8 billion USD in R&D for innovation. Customer
satisfaction is never perfect in any organization, thus leaving room for improvement.

Some of the products shows the learning of the Samsung are Samsung UD590 UHD Monitor is
everything youd expect it to be- 4 times the resolution and pixels of FHD is very pleasantly
overwhelming. Samsung Gear Fit, Samsungs new smart fitness band, equipped with various
specialized functionalities. Samsung Soccer Panel will aggregate and show Contents of your
Favorite Soccer Team.