international marketing analysis of samsung

Benjamin L’Hermitte 307 LON Assignment CW1 – SID : 6850399 - Main body word count : 2675

307 Assignment 1 Benjamin L’Hermitte 2

Executive Summary

In this international marketing analysis of Samsung, we will introduce the Samsung Company

before focus our analysis in one category of product: the touch pads.

Firstly, we will study the business environment of Samsung in France (local level). Secondly,

we will analyze the Macro-environment with the marketing strategy of Samsung in

international level in four big country categories:

- CHINA AND REST OF ASIA

- MIDDLE EAST AND AFRICA

- EUROPE

- AMERICA

To begin, we will do a SWOT analysis of Samsung. We will use also other tools such as a

positioning map, for instance, which will represent the positioning of Samsung and its

competitors.

Then we will study the targeting, the segmentation, and the positioning (STP process). We will

finish by a PESTLE analysis of the international market of Samsung for those 4 country’s

categories, its competitors for the Macro-environment as well as the trends, objectives and

innovation’s impact.

Finally, we will conclude with some recommendations for Samsung Electronics Company.


Table of contents

Executive Summary ........................................................................................................... 2

Introduction ...................................................................................................................... 4

1) Samsung Groups ........................................................................................................ 4

2) Samsung Electronics ................................................................................................... 4

I. Nature and Role of Marketing .................................................................................... 6

1) Concepts, Nature and Role of Marketing at Local Level ............................................... 6

2) Concepts, Nature and Role of Marketing at International Level .................................. 6

II. Business Environment: FRANCE .................................................................................. 7

1) SWOT analysis ........................................................................................................... 7

2) The competitors ......................................................................................................... 8

3) Segmentation .......................................................................................................... 10

4) Targeting ................................................................................................................. 10

5) Positioning ............................................................................................................... 12

6) Customer relationship .............................................................................................. 12

III. Macro-Environment: the International Marketing ................................................. 13

1) PESTLE Analysis ........................................................................................................ 13

2) The Competitors ....................................................................................................... 14

IV. The trends, objectives and innovation: the impact ................................................. 15

1) The trends ................................................................................................................ 15

2) The objectives .......................................................................................................... 15

3) The innovation ......................................................................................................... 16

Conclusion and recommendation .................................................................................... 16

References ...................................................................................................................... 17

Appendices ..................................................................................................................... 21


Introduction

1) Samsung Groups

Samsung (name meaning’s “three stars”) was founded in 1938 by the Korean Lee Byung Chull.

Initially, it was a local export business selling fish, vegetable, and fruits in China. It counts today

more than 324 000 employees in 84 countries. The CEO of Samsung Group is Lee Kun-Hee. It’s

a worldwide company which is present in many business sectors. In fact, mainly 4 sectors with

many subsidiaries (we will quote only one subsidiary by sector) but also many other sectors:

- Electronics ( Samsung Electronics)

- Heavy Industry (Samsung C&T Engineering & Construction Group)

- Chemical Industries (Samsung Fine Chemicals)

- Financial Services (Samsung Life Insurance)

- Other sectors with Other Affiliated Companies: Medical (Samsung Medical Center),

Hospitality (Hotel Shilla), biology and pharmaceutical sector (Samsung Biologics,

Samsung Bioepis) and even amusement parks (Samsung C&T Resort & Construction

Group)

2) Samsung Electronics

We are going to be interested more particularly in Samsung Electronics because of our choice

of products: the touch tablets. It was created in 1969 and became quickly a major

manufacturer in the Korean market. It counted more than 105 000 employees in 2014.

Nowadays, the Korean subsidiary is directed by Jong-Kyun Shin and reached a turnover more

than 195 882 million dollars in 2014 (exhibit appendix 3). It’s the main competitor of Apple

(the main challenger).

Source : <http://www.sgm2i.com/images/marques/ samsung_big.png>

http://www.secc.co.kr/eng/html/index.asp

http://www.sfc.samsung.co.kr/en/main/main.asp

http://www.samsunglife.com/companyeng/index.html

http://www.samsunghospital.com/global/eng/main/main.do

http://www.hotelshilla.net/kr/index.jsp

https://www.samsungbiologics.com/index.do

http://www.samsungbioepis.com/

http://www.rnc.samsungcnt.com/eng

http://www.rnc.samsungcnt.com/eng


It offers a wide range of products with home appliance such as refrigerators, TVs, washing

machines, monitors, printers, but also digital camera, smartphones, touch pads, printers, and

even medical materials for instance. Since 2013, Samsung Electronics was reorganized into 3

main divisions which are:

- Consumer electronic (ex : printer)

- IT and Mobile communication (ex : smartphone)

- Device Solutions (ex : Memory Business, LED business)

History of Samsung Electronics Technology Innovation

The motto of Samsung’s vision 2020 is “inspire the world, create the future”. Samsung has a

very strong investment in the R&D, the sustainability, and in its employees. It’s a very big

distinguishing sign of its corporate culture. Indeed, according to the Samsung sustainability

report 2015, it’s their corporate mission:

“To devote our human resource and technology to create superior products and services,

thereby contributing to a better global society.”

Now, we are going to study Samsung environment and more specifically focus our report in

one category of products: the touch pads.

Samsung logo’s evolution since its creation.

Samsung sustainability Report 2015 p.93

Source: < http://www.samsung.com/common/aboutsamsung/download/companyreports/2015_Sustainability_Report.pdf>


I. Nature and Role of Marketing

1) Concepts, Nature and Role of Marketing at Local Level

According to the Chartered Institute of Marketing, the marketing is the “Management process

responsible for identifying, anticipating and satisfying Customer requirements profitably”. According

to Isobel Doole & Robin Lowe in International Marketing Strategy sixth edition it involves: “the

company manipulating a series of controllable variables such as price, advertising, and the

product/service”. Thus, Companies have a goal: analyze the needs of the customers and take

advantage of them.

In France, Samsung has a strong presence with its range of tablets in the French market.

According to the ANSOFF’s Matrix (exhibit appendix 1) Samsung adopts a market penetration

strategy.

Existing Products New products

Existing Market Market penetration strategy Product development strategy

New Market Market development strategy Diversification strategy

Tablets’ market is today very present and very competitive. To be competitive, Samsung has

to innovate constantly and invest in R&D to be at the top of technology and always find or

create new needs within the customer.

Now, we are going to identify the marketing mix elements for Samsung in the French market:

2) Concepts, Nature and Role of Marketing at International Level

According to (1st quote) Isobel Doole & Robin Lowe:

“The key difference between domestic marketing and marketing on an

international scale is the multidimensionality and complexity of the many foreign

country markets a company may operate in.” According to them too, the

international marketing involves “operating across a number foreign country

markets […] uncontrollable variables differ significantly between one market and

another.”

Thus, to operate in international markets, Samsung have to study their environment by

country, the culture, the incomes, the GDP for instance and adapt their offers.


II. Business Environment: FRANCE

1) SWOT analysis

Samsung knows switch some threats to its advantage and use the opportunities. For instance,

it takes advantage of the sustainability awareness emergence and focus it. Every year, they

write a sustainability report about their actions, their investment and the sustainability

(exhibit appendix 2). They talk about their “green management” and some products with

biodegradable plastic packaging. Besides, Samsung knows how to integrate itself in a very

competitive market with a strong R&D investment, a constant innovation and many patents.

STRENGHTS WEAKNESSES

- Focus on sustainability - Low productions costs - Capability to market the brand - Ability to innovate - Samsung has many patents - High investment in R&D - Samsung’s a very big empire, so it has a very big

bargaining power with its suppliers.

- Its offering has too many products, so Samsung isn’t specialize on tablets, it could be worse than competitors which could be specialize

- Patents are often breached by the competitors

OPPORTUNITIES THREATS

Political - Taxes are high in France - Some Terrorism’s

consequences

Economical - The need of standardization - Growth of tablets’ market

- A lot of competitors - the reducing of product’s life

cycle - Price war - Rising raw materials prices

Social

- The growth of the video games market, social network and cloud

- The appeal of the consumers for High-Tech, the news emerging markets

- Changing customers’ habits

- The cyber criminality

Technological - Emergence of hybrid products

laptop/tablet

- The fast evolution of technology

- High investment required in R&D

Legal - Obtaining patents through

acquisitions

- Stricter Laws regulating environment pollution

- Data protection regulation

Environmental - Awareness of the customers for

sustainability - Regulations against pollution

and sustainability


2) The competitors

However, even if Samsung knew how to integrate itself, lots of competitors have a strong

presence in the tablets’ market. In fact, Samsung is better in the TV or smartphones’ markets

(exactly number one and number two in the world) rather than the tablets. What is the

Samsung’s performance in this market? We are going to analyze the competitive environment

of Samsung.

Since 2013, the tablets’ market decrease around 8 % sales. Consequently, because of the

strong competition the price tablets decrease (see the chart at the bottom of the page). It

could have several reasons, the economic crisis, the market which could be saturated, and

there is now a strong competition with other products’ category such as smartphone which

are more and more powerful. Could they replace in a future day the tablets?

However, even if some very big companies see their sales decrease (- 17, 9 % for Apple and -

12 % for Samsung according to a newspaper from “Lefigaro.fr”), other firms boosted their

sales such as LG (+246

%!) or Huawei (+103 %).

It shows these firms

know worked with niche

products which are not

exploited through Apple

and Samsung. For

instance, some products

like tablets with a bigger

screen or touch tabs

which could switch to

the laptop.

Samsung has a lot of competitors in the tablets’ market such as Apple, Microsoft, Asus, Acer,

Amazon, Google, Sony, Toshiba, HP, and Lenovo for example. We will study the positioning of

Samsung and its competitors with a positioning map in our part “positioning”.

Source: <http://www.zdnet.fr/actualites/chiffres-cles-le-marche-des-tablettes-39789571.htm>

Source: <http://www.zdnet.fr/actualites/chiffres-cles-le-marche-des-tablettes-39789571.htm>


We are going to analyze the competitive environment of Samsung with the 5 Porter’s

competitive forces. We will assess the power of each stakeholders from “+” for weak to “+++”

for a strong power and we will explain why.

We saw the Samsung’s competitive environment. What about the Samsung’s segmentation?

+++

Competitive rivalry : there are

many competitors in the market such as Apple, Microsoft, Asus and more, so the

rivalry is very strong.

++

Power of buyers :

They have not a direct power, but because of

the strong competition their

decision influence the market and the price

decrease (see the chart p.8)

+

Power of suppliers : Samsung is a very big empire, so it has a very big bargaining

power on its suppliers. Besides, it creates some components

itself such as screen.

+++

Threat of subtitutes : There are a lot of

similar products which could substitute

tablets. An innovative market could bring surprises. We see

previously the danger of smartphone

tablets. Warning that it doesn't come to

substitute one day the tablets.

++

Threat of new entrants : warning to

Chinese competitors (Lenovo, Huawei). Besides, the key is to

be innovative. If a firm is innovative, it will success.

Previously, we talk about some firms such as LG and Huawei which exploit a niche market.

However, we put only 2+. Indeed, some know-how is

required and there are already a lot of company in the market.


3) Segmentation

According to (2nd quote) Isobel Doole & Robin Lowe in: International Marketing Strategy sixth

edition, the market segmentation is:

“The strategy by which a firm partitions a market into submarkets or segments

likely to manifest similar responses to marketing inputs.”

The Samsung’s segmentation is essentially divided by:

- Geographic segmentation (in an international context so we don’t talk about it)

- Age (essentially young people who are appeal by new technology, but people will be

never older to get tablets).

- Social Class (low, middle and high class income segments)

- The kind of customers: are they professional or not?

These two segments are mainly the segments of the Samsung’s strategy.

4) Targeting

According to the business dictionary the targeting is:

“The selection of potential customers to whom a business wishes to sell

products or services. The targeting strategy involves segmenting the

market, choosing which segments of the market are appropriate, and

determining the products that will be offered in each segment.”

Samsung has to adapt its offers to the specific needs of each segment (we quote only one

product by segment):

- Professional segment : with the Samsung Galaxy Note Pro 12.2 with a bigger screen

and a better range of powerful processors and a range price from 550 € to 1500 €

according to the processor and the memory

Source: <http://www.test-mobile.fr/actualites/samsung-galaxy-note-pro-une-tablette-12-2-pouces-en-fuite-7851-2013-12-20/>

Samsung Galaxy Note Pro 12.2

http://www.businessdictionary.com/definition/selection.html

http://www.businessdictionary.com/definition/customer.html

http://www.businessdictionary.com/definition/business.html

http://www.businessdictionary.com/definition/sell.html

http://www.businessdictionary.com/definition/product.html

http://www.businessdictionary.com/definition/services.html

http://www.businessdictionary.com/definition/segment.html


- High class income, current customer: the Galaxy Tab S is a “hybrid”, it’s positioned

between the pro segment and the current customer segment. It’s a high-end tablet.

Its range price is from 399 € to 649 €.

- Middle class income, current customer: With the Galaxy Tab 4 Samsung target middle

range with a price from 200 € to 350 €

- Low class income, current customer: For the lower income with a price between 100

€ and 200 € some products such as the Galaxy Tab 3 or the Galaxy Tab E is more

adapted.

Samsung Galaxy Tab S

Samsung Galaxy Tab 4

Samsung Galaxy Tab E

Source: <http://www.fnac.com/Tablette-Samsung-Galaxy-Tab-S-10-5-Wifi-16G-Blanc/>

Source: <http://www.plusdebonsplans.com/remboursement-samsung-galaxy-tab-4.html>

Source: <http://www.bgr.in/gadgets/mobile-phones/samsung/galaxy-tab-e>


5) Positioning

According to (3rd quote) Isobel Doole & Robin Lowe in: International Marketing Strategy sixth

edition the positioning is:

“The customers’ perceptions of the products or service offer that will indirectly

confirm the positioning, and so determine its success.”

We are going to make a positioning map which will represent the overall positioning of

Samsung and its competitors:

It’s difficult to establish a global positioning for Samsung. Indeed, unlike Apple, Samsung

creates many tablets for many segments and is too widened itself by multiplying its model and

its range of products. Because of that, the positioning of Samsung is not clear, pretty blurred

and it lost market shares face to apple.

6) Customer relationship

Concerning the implications of customer acquisition activities, the Samsung’s strategy about

customer acquisition is a strong investment on marketing and communication. Indeed,

Samsung invests more than 14 billion $ in marketing budget in the world (against only 1 billion

for Apple). Samsung France invested more than 115.6 million in French communication whose

38.1 % on T.V.

Concerning the implications of customer retention activities, Samsung bet on technological

innovation, customers’ habits (it keeps its “home button” do not disturb the customers’ habits

for instance), but also on the sustainability emergence with its “green management” political.

QU

ALI

TY

PRICE

Positioning Map


III. Macro-Environment: the International Marketing

1) PESTLE Analysis

AMERICA EUROPE MIDDLE EAST AND

AFRICA CHINA AND REST OF ASIA

Political

- Tax Policy - Tariffs - Competition Regulation

- Tariffs - High Taxes - Competition Regulation

- Politic environment’s instability

- The bigger countries have a collectivist dimension ( Hofstede’s value item) - Tensions with North Korea

Economical

- inflation rate - economic recession - average high GDP (broadly except a middle GDP in Mexico or brazil for instance but the average is correct)

- first trade power in the world (40% of world trade). - inflation rate - economic recession - average high GDP

- low purchasing power - broadly low GDP

- GDP growth rates - Potential urban growth - High inflation rate - exportation rate growth - very big market with billions people

Social

- emergence for new technology’s taste - lack of qualified labor for some country and late on the education system. - more than 450 million internet users

- inequality of the employment (low female, young or old employment rates, according to the country) - emergence for new technology’s taste

- Socials risks (crime) - poverty, inequality - unemployment high - Very few online users

- more than 800 million internet users - Chinese often buy online

Technological

- Technological environment very competitive and saturated

- Technological environment very competitive and saturated

- Big market potential and not exploited yet

- Growth of appeal’s customers for new technology

Legal

- USA anti-trust law - Data protection, Regulation - Sustainability Regulation

- Data protection, Regulation - Sustainability Regulation

- Legal system provides protection for investors

- Few, even no ( essentially for collectivistic countries) regulation about the protection of property rights, consumers’ rights

Environmental - Awareness of environment protection

- Awareness of environment protection

- Broadly a weak impact, those countries don’t consider or very few the sustainability

- Awareness of environment protection


2) The Competitors

With the informations from <http://www.statista.com/statistics> I did the following pie charts:

We can see that the environment is more and more competitive and there are more and more

competitors. The decrease of Apple’s market share is because of those new entrants. Despite

this, Samsung won market share between 2011 and 2015 because of its innovation strategy.

However, we have to be careful about the Samsung’s risks.

First risk is the forbidden of Samsung’s Galaxy Tab in Germany because of a lawsuit from Apple

for products imitation.

The last risk is that (we saw previously in the positioning), Samsung lose market shares (17%

today against 21.6% in 2014) because of its very big range of product. So sometimes, its

positioning isn’t very clear in the customer’s mind.

Apple61%Samsung

7%

The Others24%

Acer5%

Asus3%

WorldWide Tablets Market Share 2011

Apple24%

Samsung17%

Huawei4%Lenovo

6%

LG4%

The Others45%

WorldWide Tablets Market Share 2015


IV. The trends, objectives and innovation: the impact

1) The trends

In a constantly changing market, it’s important for Samsung to anticipate it and adapt itself.

Concerning the sustainability trends, Samsung is very implicated with its “green management”

(exhibit appendix 2). Previously, we talk about “products with biodegradable plastic

packaging” for instance (p.7) and made from recycled materials.

Another trend concerning the products is the “prosumer” trend. It’s the characteristics in only

one product, for professional and personal use. Samsung created the Galaxy Tab S with this

trend (p.11).

2) The objectives

Concerning the objectives, not to mention the implication and investment of Samsung about

sustainability (see Samsung’s vision of Green Management, bottom of the page), Samsung has

a 2020 vision:

“Inspire the world, create the future!”

A vision which is linked to their corporate mission, according to the Samsung sustainability

report 2015:

“To devote our human resource and technology to create superior products and

services thereby contributing to a better global society.”

Thus, the Samsung ideology is to push the limits of technology and innovation to create

“superior products and services”.

Samsung's vision of Green Management

Source: <https://www.samsungdisplay.com/eng/intro/green_policy.jsp>


3) The innovation

Concerning the innovation, it’s the main strength of Samsung. Indeed, each year Samsung

invests more than 10 % of its turnover for R&D against only 1% or 2% for its competitors.

Although, very soon Samsung will build a “Strategy and Innovation

Center” in Paris about “open-cloud” project. The research subject is

about the cloud, big data (innovation area: Data center) and the

internet of things (another innovation area about connecting home

experiences).

Besides, Samsung has other innovation areas whose digital health

(concerning personal health technology) and human computer

interface (products (in our case: tablets) smarter platform).

Conclusion and recommendation

To conclude, we saw some points about Samsung’s Strategy:

Marketing penetration strategy

Samsung bet on marketing (big investment on promotion more than 14billions $ in

2013)

Samsung is strong in innovation with R&D

A very competitive market with new entrants risk

Market shares decrease since 2014

Samsung targets many segments with too much broad range products

Positioning a little blurred in the mind’s customer

We could give some recommendations to Samsung Electronics. It could reduce its range of

products in order to have a clear positioning in the customer’s mind. Or it could adopt a price

strategy more clearly with a big range of price between its different categories. Indeed, many

products, whereas they don’t have same positioning, have their price pretty close. It could for

example, create some low-cost tablets around 50-100 € a middle range around 350 € and its

professional range between 700-900 €.

With a clear positioning high-end product Apple, even if sometimes it lost market share, today

the Apple strategy is effective.

With a changing of positioning strategy and adopting a positioning more clearly for the

customer, Samsung could it regain market shares?


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SGM2I (n.d) [online] available from <http://www.sgm2i.com/images/marques/ samsung_big.png>

[5 November 2015]

ZDNet.fr redaction (2015) « Les tablettes dans le monde/ Les tablettes en France » ZDnet [online]

available from <http://www.zdnet.fr/actualites/chiffres-cles-le-marche-des-tablettes-39789571.htm>

[8 November 2015]

Sonia (2013) « Samsung Galaxy Note Pro, une tablette 12.2 pouces en fuite » test-mobile.fr [online]

available from <http://www.test-mobile.fr/actualites/samsung-galaxy-note-pro-une-tablette-12-2-

pouces-en-fuite-7851-2013-12-20/> [13 November 2015]

La Fnac (n.d) [online] available from <http://www.fnac.com/Tablette-Samsung-Galaxy-Tab-S-10-5-Wifi-

16G-Blanc/> [13 November 2015]

Nivelet, S. (2014) « ODR Samsung Galaxy Tab 4 remboursement de 30 €» plusdebonsplans.com [online]

available from <http://www.plusdebonsplans.com/remboursement-samsung-galaxy-tab-4.html> [13

November 2015]

BGR (n.d) [online] available from <http://www.bgr.in/gadgets/mobile-phones/samsung/galaxy-tab-e>

[13 November 2015]


Appendices

The ANSOFF’s Matrix

1) Source: < http://marketingmixhub.com/product-market-growth-matrix/>


History of Green management

2) Source: < http://www.samsung.com/uk/aboutsamsung/samsungelectronics/companyReports/companyreports.html>

Samsung sustainability Report 2015 p.111


3) Source: < http://www.samsung.com/uk/aboutsamsung/samsungelectronics/companyReports/companyreports.html>

Samsung annual report 2014 p.44

international marketing analysis of samsung

Documents