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SamsungElectronicsCo.

MarketingPlan
ADominantForceintheElectronicsIndustry

TierraPrice&ErikJohnson

14June2015

EXECUTIVESUMMARY

SamsungElectronicsCo.isarenownedcorporation.Samsungisoneoftheworlds

largestsemiconductormanufacturersandSouthKoreastopelectronicscompanymaking

consumerdevicesfromhomeappliancestohandheldmobilephones.Nearlyhalfofsalescome

fromtheAsia/Pacificregion.Thecompanyisoperatedthroughindependentbusinessunits:

ConsumerElectronics(55%ofsales),ITMobileCommunications(20%ofsales),

Semiconductors(15%ofsales)andDisplayProducts(10%ofsales).Samsungisatruevertically

integratedcompanybeingaleaderinproducingthechipsandsoftwareattheheartofits

products.Furthermore,thecompanyhasbeentheleaderintheworldwidememorymarketfor

morethanadecadeandhasasignificantshareofglobalmarketforCMOSimagesensorsfor

mobilephones.Alltogether,Samsungsofficesarepresentin80countries.OutsideSouthKorea,
SamsunghasregionalheadquartersintheUS,Europe,Asia,Brazil,Russia,SouthAfrica,and

theUAE.40manufacturingplantsarelocatedincountriesacrosstheworld.Ofmarkets,

Americaisitssinglelargestmarketthataccountsfor30%ofsales.Thecompanyenjoyssteady

growthinbothitsnativeandU.S.dollars.Primarygrowthstrategiestosolidifymarket

leadershipconsistoffocusonproductdifferentiationineachbusinessunit,identifying

businessesofsustainablegrowthoverlongperiodsoftimeandmanagementpreparationsto

anticipateandrespondtobusinessriskswithglobalmarketuncertainties.Thecompanyshows

importanceincontinuinggrowthinkeyproductsareasthatconsumersdesiremost,suchas

phones,tablets,LCDpanels,flatpanelTVs,systemLSIchips,ITproductsandhomeappliances.

Additionally,Samsungispromotingfuturegrowtharoundsoftwareandserviceopportunities

continuingtolayafoundationforfuturebusinessopportunitieswithendeavorsinotherfields

likehealthandmedicalequipmentmarkets.SamsungElectronicsisinvestinginindustriesitis

nottraditionallyknownforwithagoaltogrowasahealthcaretechnologyplayer.Inaccordance

tosalesandmarketing,Samsungusesadirectsalesapproachthatoperatesfromofficeslocated

inmorethan50countries.Productsfortheconsumermarketaresoldthroughmajorretailers

worldwideandbyecommerce.Otherproducts,suchastheLCDandOLEDpanelsmadeby

SamsungDisplay,aresoldtoOEMs.ChipsmadebySamsungSemiconductoraresolddirectly

aswellasthroughdistributors.Samsungisverywellroundedwhenitcomestomarketing

managementandnothinglesswouldbeexpectedfromaglobalcorporation.Thecompany

marketsitsproductsthroughmanydifferentmediumsincludingbillboards,television

commercials,onlineadvertisementsandsweepstakes/awardsallowinginformationabouttheir

productstoreachavarietyofdifferentsubsetsofthepublic.Bydoingthistheyareabletoreach
amaximumcapacityofpotentialconsumersandlargestpossibleamountsofprofits.Samsung

ElectronicsCo.isalsoaleaderincustomersatisfactionwithintheirmarket.Inasurvey

consistingof70,000U.S.basedconsumersonarangeofproductsandservicesrespondentsgave

Samsungarespectablesatisfactionratingof81/100pointswhichincreasedfivepointsfromlast

yearandmostimportantly,istwopointaheadoftheirtopcompetitor,Apple.Samsungshowsa

greatunderstandingofofferingproductstomeetcustomerneedstoaccomplishcompanygoals.

Theyknowwhattheirconsumerswant,theycommunicatethebenefits,deliverproductsinaway

thatmakesitavailableforavarietyofconsumersandcreatecustomervalue.Samsungsimply

bringsmoretothetablethantheaverageelectriccompanyandthatisveryattractiveto

consumers.Sincethecompanysoffersaendlessselectionofelectronicproductsthathave

demonstratedoutstandingperformanceovertheyearsandcontinuetoimprove,theyshowgreat

valueincustomersatisfaction.Furthermore,Endeavoringinotherindustriestomeetthedemand

inhealthcaretechnologiesshowstheiragilityinmeetingtheneedsofconsumerswellbeyond

theirspecialty.Inreturn,customersofSamsunghavebecomeveryloyal,continuepurchasinga

varietyoftheirproducts,andchosethemoverothercompetitors.Thecompany'smarketingmix

isextremelydiverseinall4Psofmarketingwhichhasresultedinagreatlevelofcompetitive

advantage.SamsungsstrategiesforgrowthshowgreatattentioninTheMarketingConcepts

GuidesEthicsastheyfocusonfutureoutcomesandstrategiestohandleanysituationregarding

groupneedsandindividualneeds.SamsungElectronicsCo.becauseisverywellroundedinits

effortsandstrategiesofmarketingmanagement.

TABLEOFCONTENTS


1.CURRENTMARKETING
ENVIRONMENT.

1.1MARKET
SEGMENTS
..
1.2PRODUCT
ENVIRONMENT
.
1.3COMPETITIVE
ENVIRONMENT

1.4DISTRIBUTION
ENVIRONMENT
.
1.5MACROECONOMIC
ENVIRONMENT.
2.MARKETING
OBJECTIVES

3.MARKETING
STRATEGIES
.
3.1TARGET
MARKET

3.2PRODUCT
STRATEGIES

3.3PROMOTION
STRATEGIES

3.3.1CUSTOMER
SERVICE
3.3.2
ADVERTISING

3.3.3.PERSONAL
SELLING
3.3.4.SALES
PROMOTION

3.4.DISTRIBUTION
STRATEGIES

3.5.PRICING
STRATEGIES

4.
CONTROLS

APPENDIX


1ANALYSISOFCURRENTMARKETINGSITUATION

MarketSegments

SamsungElectronicsmarketsinglobalsegmentsbasedonlifestyleanddemographic
variables.OfitstoplevelsegmentarecountrieslikeNorthAmerica,CentralandSouthAmerica,
Europe,MiddleEast,SoutheastAsia,SouthwestAsia,ChinaandKorea.Thesegmentsdiffer
basedonlifestyleanddemographics,forexamplecultures,butSamsungisabletosegmentits
globalsegmentsintosegmentsofurbanandruralconsumers.Thesesegmentswilldiffermost
likelyinlifestyleevenfurther,income,andneedsandwants,yettheymaydesiretechnologyand
productsthatSamsunghastooffer.Forexample,urbandwellerswouldmostlikelydesire
somethinghightech,whileruralconsumersmaydesirebasichomeappliances.Theresisalsoa
secondlevelatwhichsamsungsegmentsitsproducts.Withinthemarketsegments,peopleprefer
highqualityproducts,athletics,technologyandconvenience.Businesspeople,innovative/
creativemindsandhighclassmiddleagedconsumersaremostlikelytopurchaseproductsof
Samsung

ProductEnvironment

Samsungoffersavarietyofproductswithinthemarket.Theyrangefromhome
appliances,tohealthcaretechnologies.Someexamplesofwhatkindofproductstheysellare
refrigerators,televisions,xraymachines,memorydisks,printersandmobilecellphones.
Collectivelytheseproductshaveaccumulatedtotalsalesof165,002to228,693from2011to
2013andprofitsof15,644to36,785from2011to2013inbillionsKRW.Productfeatures
consistofcurvedUHDTVs,worldslargestcapacityrefrigerator,multifunctionalAndroid
touchscreenallinoneprinter,wirelessdetectorandimageprocessingengineinxraymachines,
andhighqualitytouchdisplaymobiledevices,etc.Mobilephonesgenerate42%ofprofit,while
televisiongenerates30%.Specifically,wewouldliketofocusonhomeappliancesandcellular
devices.Forexample,cellphones,computers,televisionsandrefrigerators.Narrowingour
productenvironmenttoasmallerportionofproductsofSamsungwillallowourcompanyto
focusmoredirectlyonspecificgoodsandachievegreaterresultsfromourmarketingtothese
specificproduct.

CompetitiveEnvironment

SomemajorcompaniesthatareincompetitionwithSamsungElectronicsCo.intheir
mobiledepartmentareLG,Xiaomi,andAppleInc.
1. LG LGisanelectroniccompanythatisbigonresearchanddevelopmentjustlike
Samsung.SomestrengthsLGhasisitsknownglobally,theirproductsarereliable,itisa
leaderininnovation,anditisarapidlygrowingcompany.WeaknessesLGhasisitisnot
asbigassomeofitscompetitorsanddoesnothavethesamefinancialstrength.LG
currentlyalsohasasmallmarketshare.ThemarketsegmentsLGseemstofocusonis
thelowerincomeandtheyoungergeneration.
2. Xiaomi Xiaomiisaverynewelectronicscompanythatisemergingintothemarket
rapidly.SomestrengthsXiaomihasisitsabilitytomakehighenddevicesandsellthem
atcheaperpricesanditsrapidlyincreasingintothemobilemarket.RightnowinChina
theyarethebiggestcellphonedistributorcrushingSamsungandApple.Weaknesses
XiaomihasisitisnotintheU.S.yetandseemstocopyoffofalotoftheother
companies.ThiscouldbehinderingthemfromenteringtheU.S.market.Xiaomis
targetmarketisthelowerincomepopulation.Theyarereallybigaboutofferinghigh
qualityproductsforcheapprices.
3. Apple Appleisanelectronic/technologycompanythatmostlyfocusesonproductssuch
aslaptops,cellularphones,andtablets.SomestrengthsAppleInchasisitstotalcontrol
ofproducts,innovation,andfinancialstrength.AweaknessAppleInchasitspremium
pricingforproductsthatmaynotbeaspowerfulassomecompetitors.Anotherweakness
istheydonothaveavarietyofproducts.Instead,theyreallyonlyfocusonaselectfew
productsatatime.ThemarketsegmentsthatAppleseemstotargetingistheyounger
generationandbusinessprofessionals.

DistributionEnvironment

Productsarenormallydistributedtocustomersbyretailersbutstartatthemanufacturer.
Productsgofromthemanufacturer,tothedistributor/dealer,thentheretailer,andfinallythe
customer.ThedistributionenvironmentthatSamsungisassociatedwithismostlyamixofboth
corporateandcontractualchannelsystems.Mostcompaniesinthemobiledepartmentare
manufacturingtheirowndevices.Samsungdealswithcustomersindirectsalesandthrough
retailersorfranchises.Mostsalesfromthemobileindustrycomefromdealerswhofirstbuy
theirproductsandthenresellthemtothepublic.ExamplesofthisareVerizon,At&t,andSprint.
Thegrowthissellingtothedealersbecauseitischeaperforthecompaniestodoso.Itcostsalot
toopenandmaintainastoresoitmakesmoresensetohavethesedealersorfranchiseessell
productsforthem.Thesebigmanufacturingcompanieswillspendlesswiththedealersbecause
theyaregivingthemincentivestodoso.

MacroEconomicEnvironment

Thereareseveraleconomicfactors/trendsthatcouldimpacttheperformance.Onetrend
isthedecreaseofthemiddleclass.Withthemiddleclassdiminishingitwillbehardtosell
higherormidrangedproductsandwilldrivepriceslowerwhichwillcreateevenmore
competition.Anothereconomictrendistheriseofemergingmarkets.Somecountriesaround
theworldarerapidlydevelopingandcouldbringnewideasandcompetitiontothemarket.This
alsocouldcauseadecreaseinprofits.

Technologicalfactorsaretheconstantbattleforthebestandmostinnovativeproducton
themarket.Alltheelectroniccompaniesareconstantlyputtingtonsofmoneyintotheresearch
anddevelopmentareasoftheircompany.Thereasonforthisisbecausethereisalotofdemand
forinnovativeelectronicproductsaroundtheworld.Ifanelectroniccompanyfallsbehindinthe
technologicalaspect,thentheywillabsolutelyseeadeclineinsales.

2.MARKETINGOBJECTIVES

SamsungElectronicsisdeterminedtostayaheadofthecompetitionwithinnovationand
expertiseoftheelectronicindustry.Samsungwouldliketobuilditsbrandtoshowpeoplethe
continuedexcellenceoftheseproducts.Theobjectiveswemaywanttoconsiderarethe
following:
Generatenewideastopenetrateothermarketsorsegmentswithinthewireless
industry.Wewanttoachieveanother5%ofthemarketsharewithinthenext
year.
Continuetogrowanddevelop.Wewanttodecreasethecostinproductioninthe
wirelessindustrysowecanbemoreprofitable.Althoughnewtechnologycosts
moremoney,thereisalwaysawaytobemoreprofitable.Weshouldbeableto
cutproductioncostby20%inthenextthreeyears.
Spreadbrandnamebyattendingshowsandsponsoringevents.Marketingteam
needstohaveanappearanceatshowsandeventswherethereisalotofpeople
moreoften.Wewantbrandnewcustomernumberstoriseby5%withinthenext
twoyears.
Implementsurveysorotherexperimentstogaincustomerfeedbackandimprove
satisfaction.Givesurveystobefilledoutwitheverycustomerspurchase.We
wantatleasta95%satisfactionrateforthenext3years.

3.MARKETINGSTRATEGIES

3.1TargetMarket(s)

Thefirmsegmentsmainlyonlifestyleanddemographicvariables,butwesuggestlaying
moreemphasisonthechanginglifestylesoftheyounggenerationandcaterfortheirever
changingneedsastheyarebecomingincreasinglyadvancedintechnology.Thecompanycan
segmentthemarketintourbanandthenruralpeopletoregainmarketshare.Thegeneraltargeted
ageis1530inordertocompetefavorablywithcompetitivebrandsinthesamemarketsegment.
Thetargetedgroupofpeoplefocusesmainlyonmusic,leisureandhasaflairfornewgadgets.
Weintendmarketingtothesetargetsbecauseitisknownthatyoungergenerationsofpeopleare
moreadvancedwithtechnology,thereforeatwentyyearoldismorelikelytopurchaseanduse
ourproductthatasixtyfiveyearoldperson.Byfocusingontargetmarketswhereconsumersare
mostlikelytopurchaseourproducts,wecanmaximizeourprofits.Lastly,marketingtourban
andruralareaswillallowustotakefulladvantageofourconsumers.Wewillbeabletosell
cheaperproducttoconsumersinruralareasandourmoreexpensivehighqualityproductto
consumersinurbanareas.Doingthiswecantouchbasewithmoreofourconsumers.

3.2ProductStrategies

Samsunghasacombinedstrategyoflowcostanddifferentiation.Althoughtypically
difficulttoimplement,mycompanyssuccessinthisstrategyisduetosuccessfulcustomization
ofproductsaroundcoredesign,largeproductportfolioandcollectionofinternalconversation
amongengineerstodecreasetimetomarket,easyaccesstoAsianmarket,talentandavailability
ofcapital.Forexample,from1983to1985duringrecessionofsemiconductorindustry,Samsung
allocatedsignificantcapitaltobuildcapacity.Mycompanyhasacostadvantagewithcheap
labor,regulationandbettersourcingandmanufacturingaswellaslowerdepreciationcosts.
Wewillutilizetheselowcostanddifferentiationmovingforwardtogetaheadofthe
competition.Withtheproductssetwiththesestrategiesweshouldseeanincreaseinthemarket
share.

3.3.PromotionStrategies

Samsunghasamultitudeofpromotionstrategies.Ourcompanylikestopullcustomers
inwithadvertisingandpushproductsoncustomerswithspecialsalesandpromotions.Firstof
allSamsunggivesoffersanddiscountstoitstradepartnerstogetthemtopushSamsung
productsoverthecompetition.Thishelpsourcompanygetaheadofthecompetitioninsales.
Specificpromotionsmycompanywilluseforourwirelessdevicesispullincustomers
withcommercials,media,andpublicity.Thewaywepushproductsonpeopleistohavegreat
salespromotionslikediscountedpricingandrebates.

3.3.1.CustomerService

SecuringproductqualityisaprioritytaskatSamsungElectronics.Topromotequality
awarenessandinstillthisculturethroughoutourorganization,wenewlydeclaredourQuality
VisionandQualityPledgein2009.UnderthesloganPerfectioninQualitybeyondyour
Imagination,thevisionstatesthatthecompanyisprovidingqualityproductswhichcustomers
aroundtheworldcanhavefaithinandtakepridein,leadingtoultimatesatisfactionbyfulfilling
theirimmediateandpotentialneeds.Tothisend,thecompanyimplementedthefivepointCode
ofConduct.TheyareCustomercentricTruetobasics,Professionalism,Quality
workmanshipandCreatingcustomersforlife.Throughqualityaccountabilityandprompt
handlingofcustomerdemands,wewillcultivatelifelongcustomerloyalty.In2009,wereceived
atotalof49millioncustomerinquiriesandgrievances(Korea:19million,overseas:30million)
onproductpurchase,repair,usageandotherissues.Thatsabouta10%increasefrom2008
whenwereceived44millioninquires.SamsungElectronicstakesswiftactiontohandleinquiries
throughtheregionalcontactcenterorwebsite.InKorea,weobtainedCCMS(Customer
ComplaintsManagementSystem)accreditationfromtheFairTradeCommissionin2008.This
hasallowedustosecureasolidfoundationtohandlecustomercomplaintsinapromptmanner.
Ontheglobalfront,SamsungElectronicsrevampedthecustomerresponsesystembasedon
KoreasCCMSandcreatedastandardresponsesystemfor14majorsubsidiaries.Forsystematic
managementofcustomercomplaintsandinquiries,weestablishedanintegratedVOC
managementsystemforglobalcustomersin2009.Thesystemwillhelpusgainvaluableinsight
intocustomerneedsandofferinformationonproductplanning,development,salesandservice.
Inaddition,eachsubsidiaryisoperatingaresponsenetworktoaddresspossibleproductsafety
accidentsswiftlyandeffectively.Accidentsareimmediatelyreportedtorelevantdepartments
andtopexecutivestodeliverappropriatesolutions.

3.3.2.Advertising

Advertisingisahugefactorinourcompanyscommunicationstrategies.Samsungspent
about$14Bin2013onadvertisingandpromotionsalone.Thisnumberwasabout5.4%oftheir
annualrevenueandmorethananyofthecompetition.Samsungdoesthisbecausetheywould
liketobeseenasatopinnovatorandaworldknownbrand.Samsungusesadvertisingtotarget
thetechhappypeoplethatknowaboutallthehardwareandsoftware,aswellaspeoplewhobuy
justfortheimage.
OnemajorsalespromotionwewillreallybefocusingonhisTVcommercials.The
reasonforthisisbecauseitreallyreachesouttopeopleallovertheworld.Ifwecanreachmore
peoplethenwecanattractmore.Weshouldbeabletogaina5%marketshareincreaseafter2
years.

3.3.3.PersonalSelling

Personalsellingisofhugeimportancetoourcompanybecausemanytimes,thatsthe
mainwaypeoplegetSamsungproducts.Ifcustomerswanttoseetheproductinpersonorlearn
moreaboutitthentheyhaveseveralSamsungretailstoresthatarestandalonestoresoringiant
corporatestores.Samsungevensellstodealerswhoalsohavetheirownsalespeople.One
exampleisSamsungphones.SamsungsellstheirphonestoVerizon,At&t,Tmobile,etc.Then
thosedealersselltheirphonestotheircustomersaswell.Anincentiveprogramforour
salespeopleisthehighcommissionsoffofthephones.Generally,Samsungshavehigher
commissionsthaniphonesbecauseAppledoesnotrunpromotionsordropthepriceuntilthe
nextonecomesout.AnotherincentiveSamsungrunsisasalesbasedincentivewhereyoucan
getafreephone,tablet,etc.

3.3.4.SalesPromotion

Salespromotionisextremelyvitalinmycompanyandsomethingthatisnottaken
lightly.Samsungvaluesitscommunicationstrategiesspendingmorethan$18billionin2013
aloneonsalespromotionthatincludemarketingactivitiesaimedatboostingsalesbytheissuing
ofcouponsandprovidingrebatesamongotherfinancialincentivesgiventoconsumersand
retailers.ThistotalmorethanquadruplesthecombinedmarketingspendingofAppleand
Microsoftthepreviousyear.ThisistheheartandsoulofhowsalesofSamsungdeviceshave
continuedtoflourishamongfiercecompetitors.

3.4.DistributionStrategies

Samsungispresentinvariouschannelsinthemarketworkingonthechannelmarkings
conceptofthreesegments:Salesandservicedealers,ModernretailandDistributors.Sales
servicedealerscoordinatekeyaccountsforSamsunginvolvingcorporatesalesandalsoopen
exclusiveSamsungshowrooms.TheModernretailsegmententailslargeretailerslikeCroma,
Hypercity,Vijaysales,Viveksandothersinthemodernelectronicretailchain.Retailerskeep
Samsungasanoptionfortheircustomersbecauseitisahighlybrandedproduct.Inaplethoraof
cities,Samsunghasasingledistributorwhodistributesthroughoutaspecificterritory.An
examplecanbefoundinMumbaiwhereSamsunghasSSKdistributorsdistributingallSamsung
products.TheyhaveahugeinvestmentinSamsungproducts,henceallSamsungmaterialissold
toasingledistributorwhointurnsellsitforthtoretailers.Furthermore,Samsungproductsare
availablebyecommerce.OtherdistributorsincludeHHPDistributors,ConsumerElectronics
DistributorsandITDistributors.Mycompanyusesavariousandinterestingdistributionnetwork
inordertoreachitsvarietyofcustomersinwaysthatareconvenienttothem.Thisallowsfor
customerstoobtainSamsungproductsinmanydifferentways,bringingmanycustomersand
generatingprofit.

3.5.PricingStrategies

Pricingstrategiesmycompanyisusingisskimmingpricingandcompetitivepricing.
SkimmingpricingiswhenSamsungcomesoutwithanewproductitwaitsuntilacompetitor
comesoutwithasimilarproducttodropthepriceorrunapromotion.Weareusingthisbecause
theproductholdsahighervalueoverthecompetitorsuntilanothercompanymatchesordefeats
thatwhichwillgetcustomerstopayforthathigherpriceforacertainperiodoftimeandinturn,
achievemoreprofits.Theotherpricingstrategyiscompetitivepricing.Inmarketsotherthan
mobilephoneswereallyneedtoutilizecompetitivepricing.Thereasonforthisisbecausesome
companiesreallyfocusonjustonecertainareaandattimesactuallyhavebetterproductsthan
Samsung.Samsunghastohavepricesgenerallyloweroraboutequaltotheircompetitorsto
keepahighshareinthemarket.
Thepricingstrategythatwereallyshoulduseforourcompanymostofteniscompetitive
pricing.Ourmainfocusisthewirelessindustryandthereisalotofcompetitorsinthismarket.
Theyshouldusehigherpricingfortheirmoreinnovativephonesandlowerpricesfortheir
generalbasephonesaswellastheotherproducts.Thiswaywecanincreaseoursalesannually.

4.Controls

Controlswewilluseincludecustomerfeedback,targetmarketsales,budgetingand
marketshare.Sincemarketingisdesignedtopersuadecustomerstopurchaseourproducts,the
monitoringofcustomerfeedbackthroughpollsandsurveysiscrucialformonitoringmarketing
planprogress.Ourgeneratedprofitisimportantandwithourmarketingplanwesetoutto
determinetheeffectmadeonourtargetmarket.Thiscanbedoneagainthroughsurveysoratthe
pointofsalewiththeassistanceofretailpartners.Wewillcompareactualsalesinthetarget
markettomarketingplanprojectionsinordertomakethenecessaryadjustments.Next,
budgetingconsistofthebalancebetweencostsingeneratingadvertisementmaterialsand
revenuecreatedbythemarketingplan.Wewillmonitorprintandmultimediaadvertising
expenses,researchandothercoststominimizespendingandmaximizeprofitability.Thisway
wecanmaintainourbudgetandseeexactlywherespendingincreasescomefrom.Lastly,
marketingshareconsistsofthepercentageofconsumersalesdominatedbyourproducts.We
willmonitorourplaceinthemarketplacetomakesurethatwearemaintainingatthetopofour
specificmarketinpercentageofsalescomparedtoourcompetitors.

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