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SAMSUNG Samsung Electronics Co., Ltd.

, is the chief subsidiary of South Korea's giant Samsung Group and one of the largest electronics producers in Asia. Products built by Samsung Electronics include televisions and many other kinds of home appliances, telecommunications equipment, and computers. Its most important product is semiconductors. Savvy management and heavy investment in research and development in the late 1980s and early 1990s were turning the company into a leading contender in the global electronics industry. Samsung Electronics was created in 1969 as a division of the mammoth Korean chaebol Samsung Group. The unit was established as a means of getting Samsung into the burgeoning television and consumer electronics industry. The division's first product was a small and simple black-and-white television that it began selling in the early 1970s. From that product, Samsung Electronics gradually developed a diverse line of consumer electronics that it first sold domestically, and later began exporting. The company also began branching out into color televisions, and later into a variety of consumer electronics and appliances. By the 1980s Samsung was manufacturing, shipping, and selling a wide range of appliances and electronic products throughout the world. Although the rapid growth of Samsung Electronics during the 1970s and early 1980s is impressive, it did not surprise observers who were familiar with the Samsung Group, which was founded in 1938 by Byung-Chull Lee, a celebrated Korean entrepreneur. Lee started a small trading company with a $2,000 nest egg and forty employees. He called it Samsung, which means "three stars" in Korean. The company enjoyed moderate growth before the Communist invasion in 1950 forced Lee to abandon his operations in Seoul. Looting soldiers and politicians on both sides of the conflict diminished his inventories to almost nothing. With savings contributed by one of his managers, Lee started over in 1951 and within one year had grown his company's assets twenty-fold. Lee established a sugar refinery in 1953, a move that was criticized at the time because sugar could be easily obtained through American aid. But for Lee the act was important because it was the first manufacturing facility built in South Korea after the Korean War. From sugar, wool, and other commodity businesses, Lee moved into heavier manufacturing. The company prospered under Lee's philosophy of making Samsung the leader in each industry he entered.

From manufacturing, Samsung moved into various service businesses during the 1960s, including insurance, broadcasting, securities, and even a department store. Lee experienced several major setbacks during the period. For example, in the late 1960s, shortly before Samsung Electronics was created, Lee was charged with an illegal sale of about $50,000 worth of goods. The charges turned out to be the fabrication of a disgruntled government official to whom Lee had refused to pay a bribe. Nevertheless, one of Lee's sons was arrested and Lee was forced to donate a fertilizer plant to the government to win his release. Despite that and other problems, Samsung continued to flourish. Shortly after Lee's son was arrested, Lee decided to break into the mass communication industry by launching a radio and television station, as well as by manufacturing televisions and electronic components through the Samsung Electronics division. The industry was dominated at the time by several U.S. and European manufacturers, and some Japanese companies were beginning to enter the industry. Nevertheless, Lee was confident that Samsung could stake its claim on the local market and eventually become a global contender. During the early 1970s the company invested heavily, borrowed and coaxed technology from foreign competitors, and drew on its business and political connections to begin carving out a niche in the consumer electronics industry. In addition to televisions, Samsung branched out into other consumer electronics products and appliances. Samsung Electronics's gains during the 1970s were achieved with the assistance of the national government. During the 1950s and 1960s Samsung and other Korean conglomerates struggled as the Rhee Sungman administration increasingly resorted to favoritism and corruption to maintain power. Student revolts in the 1960s finally forced Rhee into exile. The ruling party that emerged from the ensuing political fray was headed by military leader Park Chung-Hee.

Positioning: -Many multinational companies adopt a less developed countries mindset, assuming thatthese markets are at an earlier stage of the same development path followed by thedeveloped countries. To take the example of the automobile industry, Ford and GMlaunched their outdated models like Ford Ikon and Opel Astra in the Indian marke

t.When these models did not sell well, the companies changed course and decided tolaunch 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 homeappliances 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 theconsumers, 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 bea true differentiator, a company must provide features that are meaningful to customers.Which is what exactly Samsung has been doing. Samsungs






includes CTVs,



informationtechnology products, mobile phones and home appliances. Its product range covers all thecategories in the consumers electronics and home appliances. According, to the analystswide product range of Samsung is one of the main reasons for its success in the Indianmarket. H o m e M R i e c f r r o i The wide range products are as follows: -

a p p l i a n c e s w g a e v r e a t O o v r e n

A i r T V , D V

C o n d i t i o n e r M a c h i n e & a y a u d i o e r

W a s h i n g

v i d e o D P l

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 Noidaand Bangalore respectively. While the Samsung India Software Centre in developing software solutions in Samsungs 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 onChip) 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 Samsung Indias CDMA business by focusing on product customization for the Indian market.

Advertising: -Samsung is involved in aggressive marketing and advertising of its product to developattitudes, create awareness, and transmit information in order to gain a response from thetarget market. Their main advertising channels include 'media' such as newspapers (local,national, cinema,outdoors free, trade), magazines (such and journals, as posters, television bus (local sides). and The national) initial


advertisementscommunicated presence of Samsung in worldwide markets and its dominance in thos

emarkets. 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,Samsungs 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 JohnAbraham for its mobile phone and Rahul Dravid for its Television range.

Sales Promotion:Along with advertisements, Samsung also focuses on promotional schemes to increaseits 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 companygenerating sales of Rs. 2.75 bn from this offer. The campaign was launched on an allIndia basis during the festival season. Under the scheme, consumers who bought anySamsung 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, Samsungs brand ambassador, Tabu interacted with the customers and dealer sof 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 everycustomer who purchased companys electronics or home appliances product got plasticfootball 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 notchedup sales worth Rs.310 Crores during the period of the Promotion.

Sponsorship:-Samsung used sponsorship of events like Olympic series to boost its sales. Samsung wasthe global wireless communications sponsors at the Athens Olympics. Samsung used thestrategy of relating itself directly with the values of the Olympic games, which includedattributes like world class, global, excellence, fair competition and peace. The Olympicseries of August5, 2004 was Samsungs salute to the Olympic values.Samsung was the sponsor of Lakme India Fashion Week held on April21, 2005. TeamSamsung cricketers - Irfan Pathan, Mohd. Kaif and Virendra Sehwag launched theWorlds Best Handset, Samsung D500 during the Samsung Show at the Lakme IndiaFashion Week. The theme for the Samsung Show was The Best Thing Says Everythingin keeping with the positioning of Samsung D500 Samsungs latest and path-breakingmobile phone which has been rated as the Worlds Best Mobile phone by the 3GSMAssociation 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 Roshanwas conferred the prestigious Samsung Style Icon award at the Samsung IIFA Awards2005. Samsung India had carried out an online voting process on the Samsung Indiawebsite 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 another sites like and as well. The Company received a phenomenal response to this online voting contest. The Samsung Style Icon and Samsung Divaawards which have been growing in popularity year on year, the company uses the response level received every year as its popularity indicator.

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 in order 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 anew 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.