Marketing Management Process
Sunday, December 23, 2012
Samsung Marketing Strategy
1:09 PM aaaa No comments
Section One
The Role of Marketing in Developing Successful Business Strategies
C HAPTER O NE
The Marketing Management Process
Samsung—Building a Global Brand 1
SAMSUNG ELECTRONICS is the largest component of South Korea’s largest chaebol —one of the giant family-controlled conglomerates that have been instrumental in building the country’s economy over the past half century. Samsung’s electronics unit started out in 1970 making cheap 12-inch television sets under the Sanyo label. Over time it morphedinto a technically innovative company, capturing the number one position in the global memory chip market and pioneering the development of flat-screen displays ,plasma TVs, multifunction cellphones, and other digital devices. But until the mid-1990s, Samsung Electronics competed primarily by ( a ) producing technical components or low-cost manufactured products for firms with better-known brands, like Dell,Hewlett-Packard, and General Electric; and ( b ) selling me-too consumer products—like TVs and microwave ovens—under the Samsung brand through discount chains like Wal-Mart at very low prices.
Samsung Electronics’ cost-driven competitive strategy worked well until 1996, but then several shocks in its market and competitive environments forced a major reevaluation. First, the global memory chip market went into a tailspin due to slackening demand and excess capacity. At about the same time, sales and profits of Samsung’s branded products were also softening. As Yun Jong-yong—a company veteran who was brought in as CEO of the electronics unit in 1996—complained, Samsung could build a TV that was technically just as good as one made by Sony, but because of the low-price, down-market image of the Samsung brand its sets sat at the back of the store or piled up in discount chains. Finally, the
Asian financial crisis in 1997 made a major strategic shift essential for
Samsung Marketing Strategy
1:09 PM aaaa No comments
Section One
The Role of Marketing in Developing Successful Business Strategies
C HAPTER O NE
The Marketing Management Process
Samsung—Building a Global Brand 1
SAMSUNG ELECTRONICS is the largest component of South Korea’s largest chaebol —one of the giant family-controlled conglomerates that have been instrumental in building the country’s economy over the past half century. Samsung’s electronics unit started out in 1970 making cheap 12-inch television sets under the Sanyo label. Over time it morphedinto a technically innovative company, capturing the number one position in the global memory chip market and pioneering the development of flat-screen displays ,plasma TVs, multifunction cellphones, and other digital devices. But until the mid-1990s, Samsung Electronics competed primarily by ( a ) producing technical components or low-cost manufactured products for firms with better-known brands, like Dell,Hewlett-Packard, and General Electric; and ( b ) selling me-too consumer products—like TVs and microwave ovens—under the Samsung brand through discount chains like Wal-Mart at very low prices.
Samsung Electronics’ cost-driven competitive strategy worked well until 1996, but then several shocks in its market and competitive environments forced a major reevaluation. First, the global memory chip market went into a tailspin due to slackening demand and excess capacity. At about the same time, sales and profits of Samsung’s branded products were also softening. As Yun Jong-yong—a company veteran who was brought in as CEO of the electronics unit in 1996—complained, Samsung could build a TV that was technically just as good as one made by Sony, but because of the low-price, down-market image of the Samsung brand its sets sat at the back of the store or piled up in discount chains. Finally, the
Asian financial crisis in 1997 made a major strategic shift essential for