Samsung International

Presented to Asif Iqbal

Group Members:
Rameeza Khan - 63165
Ali Mazhar - 63788
Mubashir Ali - 63788
Khalid Ashraf – 61682
Table of Contents
Executive Summary.............................................................................................................4
1. Introduction:..............................................................................................................5
2. Samsung’s Background:............................................................................................5
3. Samsung’s External Environment:............................................................................5
3.1. PESTLE Analysis.....................................................................................................6
3.1.1. Political:.................................................................................................................6
3.1.2. Economic:..............................................................................................................6
3.1.3. Socio-Cultural:.......................................................................................................6
3.1.4. Technological:.......................................................................................................6
3.1.5. Legal:.................................................................................................................7
3.1.6. Environmental:..................................................................................................7
4. Industrial Environment:...................................................................................................7
4.1. Porter’s Five Forces Model:.....................................................................................7
5. Value Proposition:.....................................................................................................8
6. Market Size:...............................................................................................................8
7. Customer Analysis:....................................................................................................8
7.1. Market Segmentation:........................................................................................9
7.1.1. Demographic segmentation:...............................................................................9
7.1.2. Psychographic Segmentation:............................................................................9
7.1.3. Behavioral Segmentation:..................................................................................9
7.1.4. Geographic Segmentation:.................................................................................9
7.2. Target Market:....................................................................................................9
8. SWOT Analysis:......................................................................................................10
8.1. Strengths...........................................................................................................10
8.2. Weakness..........................................................................................................10
8.3. Opportunities....................................................................................................10
8.4. Threats..............................................................................................................10
9. Samsung Products and Industries:...........................................................................10
10. Samsung 4Ps of Marketing:.....................................................................................10
 10.1. Product Strategy:..............................................................................................10
10.2. Price Strategy:..................................................................................................11
10.3. Place Strategy:..................................................................................................11
10.4. Promotion Strategy:..........................................................................................11
11. Positioning:..............................................................................................................11
12. Competitive Analysis:.............................................................................................11
12.1. Samsung’s Competitors in Mobile Phone:.......................................................12
12.2. Samsung’s Competitors in Consumer Durable Segment:................................12
13. Samsung’s Competitive Strategies:.........................................................................13
14. Perceptual Mapping.................................................................................................13
14.1. Process of Perceptual Mapping:.......................................................................14
14.2. Use of Perceptual Mapping:.............................................................................14
15. Samsung – Apple Price Comparison.......................................................................15
16. Samsung Financials 2019-2020:..............................................................................15
17. Recommendations:..................................................................................................16
17.1. Vendor Specification and Competitive Advantage:.........................................16
17.2. Reducing Investment in India:.........................................................................16
17.3. Strategic Communication:................................................................................17
18. Conclusion:..............................................................................................................17
Executive Summary
The report entails a detailed marketing plan for Samsung Corporation. The report
includes a brief introduction about the company and its history; the beginning, the progression
and expansion; and current market standing. It also details the analysis for company’s macro and
micro environment; competitor analysis; 4Ps of marketing; market segmentation; products and
industries; company positioning; pricing comparison and strategy; perceptual mapping;
recommendation for the organization. Samsung is a world renowned smartphone brands
including having a name in other industries such as manufacturing, construction and shipping
markets.
1. Introduction:

Evolution of human kind would not be possible without curiosity and the ongoing
revolutionary process begins with the curiosity that gave birth to number of questions eventually
resulted in the advancement of humans with respect to their social, cultural, ecological, political,
and technological background subsequently followed by number of years. With this ongoing
process Samsung emerged as an electronic corporation in 1969 under the umbrella of Samsung
group and subsequently renamed in 1984 as Samsung Electronics. Since then the company
diversified into many businesses such as Televisions, home appliances, semi-conductors,
construction, telecommunication etc. transforming them into market leader with around 287,439
in 74 countries. In addition to selling millions of products they also established themselves as the
fastest growing distribution network with excellence in workforce.

2. Samsung’s Background:
The South Korean giant is the biggest producer of electronic products. Samsung
concentrates on producing multiple industry and consumer electronics; these are inclusive of
digital media, appliances, memory chips, semiconductors, integrated systems, and others.
Samsung is globally recognised and accounts for South Korea’s one fifth of total export.

In 1938, Samsung was founded by Lee Byung Chull as a grocery store. Lee started his
business as he traded noodles as well as other staple products and exported the items to China.
Lee expanded his business into the textile sector after the Korean War, as he opened Korea’s
largest woollen mill. Samsung invests in multiple industries and have different subsidiaries like
Samsung Shipbuilding, Samsung Heavy Industries, and Samsung Techwin.

The company entered the electronics market in 1969 and continued its global expansion
in the electronics market in 1990s. Samsung introduced its Galaxy Flagship line in the 2000s and
has been coming out with cutting edge technological breakthroughs to improve their media
devices.

3. Samsung’s External Environment:

There are multiple growth driving factors within the smartphone market, which are
inclusive of technological advancements, changing preferences of customers, as well as the
increase in online content that is easily accessible through smart devices.

The 5G services and devices introduction and the increasing demand within the third
world economics is playing a major role in the mobile market growth. Numerous variables
within the global market influence the development and demand of the mobile industry that are
inclusive but not limited to the political and economic influences.
3.1. PESTLE Analysis
3.1.1. Political:
Samsung, being a tech organization, must respond to pre-existing and current legal
requirements. In the case of political instability, revenue may decrease and costs may increase. In
some cases, variations can cause companies to withdraw their products from overseas markets.
The retroactive consequences can be devastating to a company's financial success. Interestingly,
by manipulation, Samsung has lost and has taken advantage of political instability at some
instances. Previously Samsung remained in the limelight for its affiliation with the political
parties and association with the female president garnered them negative response from general
public of South Korea.

3.1.2. Economic:
This is especially important for Samsung, as the company expanded its global presence
to 74 countries. Though, this is also a problem, as the international economic condition has
greatly reduced the customer’s purchasing power in numerous first-world countries, driving
Samsung to participate in business activities. Interest in emerging markets. In addition to that
company sets up different manufacturing facilities in various countries such as Noida, India in
2018 creating an employment opportunity for the residents of that country. Most importantly, the
macro environment where Samsung globally operates is fraught with volatility and instability,
forcing the company to adjust its strategy accordingly and continuously.

Samsung's wonder strategy for the company is that it has adapted very well and is
expanding into new and growing markets as consumer incomes in the industrial sector decline.
With that in mind, Samsung has launched an ambitious campaign in emerging markets to bridge
the sales gap in developed countries. In the current economic crisis caused by the coronavirus,
the company once again must adapt and develop strategies to minimize the negative impact on
its business.

3.1.3. Socio-Cultural:
Samsung is basically a South Korean family owned business. Despite having global
presence its Korean organization at its core. Throughout the years Samsung has occupied masses
and due to its global presence, there is strong need of adapting with the diverse culture and adjust
themselves according to the market of each country because the socio-cultural factors vary from
country to country.

3.1.4. Technological:
Samsung is one of the leading creative organization. This give them a favourable
position and they have been frontrunner to introduce new technologies to the market. But being
frontrunner is not enough. One must keep up with the competition right to stay relevant in the
market. But these technological advancements brought several issues to them such as battery
explosion of Galaxy Note 7 in 2016 resulted in 5.3billion loss to company.

3.1.5. Legal:
As referenced in the last segment, Samsung countered numerous allegations of
infringement for impersonating Apple especially with respect to similar features which
eventually resulted in $1.05 billion penalty. Despite of all these accusations it’s still one of the
bestselling brands and how they managed to keep their reputation is still a question mark.

3.1.6. Environmental:
Change in time brings change in consumer’s mindset and they seek those products
which could fulfil their social and environmental needs and cell phones became social symbol
now a days. Keeping in view these changes Samsung ensures that their brand should satisfy their
consumer from all aspects without undermining the internal environmental standards such as
salaries, organization culture etc.

4. Industrial Environment:
4.1. Porter’s Five Forces Model:
Throughout the years Samsung remained stand out among electronic items as
compare to other brands especially gained recognition because of its unique designed cell phones
and other gadgets creating a massive impact on the industry most notable innovations include
Galaxy series contributes mainly in the high profit in 2016 apart from that AI will remain the
differentiating factor.

Here we analyse the Porter’s 5 force model.

4.1.1. Bargaining power of suppliers:

Samsung has around 2500 suppliers around the world and has a strong hold among them
by because companies are at a risk of losing competitive edge due to high bargaining power of
suppliers. Due to many suppliers it’s easy to switch from one supplier to another that’s why
bargaining power of suppliers remain low in this case.

4.1.2. Bargaining power of customers:

There is a stiff competition which creates price wars between companies and provides
choice for consumers to switch from one brand to another that’s why buyer power remains high
in this scenario.

4.1.3. Threat from substitutes:

There is a high risk of substitutes due to the availability of many international and local
brands with the exception of computer chips in which it’s only rival is Intel.
4.1.4. The threat of new entrants:
Samsung made it a long way to succeed. It’s not easy to build such an exclusive brand as
Samsung because it requires huge investment and infrastructure. So it’s not easy for new comers
and threat remains low.

4.1.5. Level of Rivalry in the Industry:

There is intense rivalry among competitors because other brands also established
themselves with the passage of time and will likely to surpass Samsung in future.

5. Value Proposition:
In 2016 Samsung was widely recognized as market winner with respect to market share
capturing overall 22.3% all over the globe more than that of Apple which stood at 12.9%. Main
reasons behind its success were rising standards and excellence in innovation. Furthermore,
Samsung provided more advance features at cheapest price in comparison with Apple keeping in
view the unique design and external memory.

6. Market Size:
It is not easy to estimate the market size because of intense rivalry fluctuations can
evident from the image. But as we discussed earlier 22.3% market share in 2016 which was
mainly composed of cellphone market. Due to the increase in sales of 200million units as
compare to previous year company reached its maximum level of 24% in second quarter of 2017.

7. Customer Analysis:
Samsung is mainly known for its innovation and division of market according to different
class of customers such as launching Guru Series for rural people and Galaxy series for upper
class. Introducing VR to give better experience to their customers. Recently they have launched
Air buds in comparison with the Air Pods at comparatively cheaper rates.
7.1. Market Segmentation:
Geographic Segmentation: It refers to segmentation process based on regions such as
rural or urban. For example. Samsung Guru for rural residents.

7.1.1. Demographic segmentation:

Samsung aims at various age group or classes such as upper class, middle class, lower
middle class, and lower class. It has variety of cellphones suitable for every age.

7.1.2. Psychographic Segmentation:

Taking into account the market psychology how they will react towards particular
product

7.1.3. Behavioral Segmentation:

Focusing on how frequently consumer uses phone or which application are highly used.
Types of market segmentation.

7.1.4. Geographic Segmentation:

It refers to division of market on the basis of region such has Samsung guru launched for
rural residents.

7.2. Target Market:

Based upon the segmentation in which we have divided households into different
categories now what particular category should be target such Galaxy series for youth.

8. SWOT Analysis:
8.1. Strengths 8.2. Weakness
 Dominating the Mobile Market  Hereditary Leadership
 Research and Development  Dependent on American Market
 Award Winning Brand  Google’s Operating System
 Eco Friendly Innovations
8.3. Opportunities 8.4. Threats
 Proposition of Triple Protection  Economic Uncertainty
 Acquisition and Diversification  Upsurge in Counterfeiting
 5G Technology  Augmented Competition
 Innovative Products

9. Samsung Products and Industries:

Samsung offers the following product categories: consumer electronics (CE), mobile and
computing communications (IM), and device solutions (DS). Due to the division of product
classes, Samsung's organizational structure includes a decentralized model. The company
headquarter is a prime example of the structure as part of a decentralized architecture to maintain
business consistency and efficiency. This aspect of the organizational structure includes the
strategic focus of the overall strategy, as well as the command line that conveys the command's
strategic direction for day-to-day operations within departments and different processes.

Samsung operates these three companies in more than 74 countries worldwide. A

function field is a process or group of processes used to perform one or more activities.
Functional areas refer to specific sections and types of work. Samsung units vary depending on
the type of business. Offices, manufacturing, and retail are types of businesses with respective
divisions. These areas include manufacturing, operations, human resources, quality management,
innovation, administration and management, marketing, customer service, sales, accounting and
finance, sales, research and development, IT support, purchasing and legal.

10. Samsung 4Ps of Marketing:

10.1. Product Strategy:
Samsung Company offers a wide variety of product combinations in the market. It offers
3D LEDs, LCD and plasma TVs, mobile phones, and other electronic devices. Samsung's
product matches the revenue stream matrix. Samsung products have the thinnest TV technology
with live streaming and offer a wide variety of mobile phones. One of the benefits of the
Samsung Company is the purchase of Samsung 3D televisions for technologically developed
consumers. This mainly provides information about Samsung brand in the global market. Putting
different designs made into the product also allows the company to create a better image in its
marketing strategies.

10.2. Price Strategy:

Samsung prices range from $ 1,200 to $ 7,000. They offer different combinations of
products to divers, starting with mobile phones, televisions, and other electronic equipment. The
development of different prices for mobile phones affected the market and attracted different
groups of consumers to the market. The company was found to be focusing on a pricing strategy
in order to develop a better ability to dominate the market than its competitors.

10.3. Place Strategy:

Samsung Corporation believes in supplying its products worldwide, mainly in Europe &
North America. It also has share in the Asian market. Samsung is developing products for all age
groups and market segments. Therefore, the correct positioning of the product is fundamental to
market growth. In this context, it is important to develop a consistent point of sale ratio in the
target market. Samsung has maintained this exact attitude in every country.
10.4. Promotion Strategy:
Samsung is mainly focused on launching advertising campaigns, spending billions of
dollars inside and outside continents, such as North America and Asia. The company spends
more than $ 8 million to promote its products in Europe and $ 3 billion in Asia. They also use
celebrity endorsements to promote their newly launched products. In this sense, Samsung is
found to be focusing on the effects of digital media on properly promoting Samsung phones. As
mentioned above, Samsung spends a lot of money on advertising and the strong participation in
social networks is helping to develop ads tailored for Samsung products.

11. Positioning:
The term positioning implies placing of product according to consumer’s mindset so that
they can perceive easily. Practically choosing marketing mix which is best fit for targeted end
user. Samsung practices more than one segmentation approach which means offering variety of
product and services at the same time to different customers. In a nutshell, how consumer
perceive the comparison between products based on the point of differentiation. Their
positioning statement “look beyond the normal” is the projection of their vision and excellent
leadership.

12. Competitive Analysis:

Samsung has two categories of competitors

 In Mobile Phones
 Consumer Durable Segment

12.1. Samsung’s Competitors in Mobile Phone:

There is no hesitation in saying that Samsung is holding the leader’s position in
Smartphones. Collaborating with Android helped them gaining market share because it’s
comparatively more user friendly than IOS. Combination of features, design and OS
outnumbered many cell phones companies. Some notable series are Samsung Note, Samsung
Galaxy as well as Galaxy Edge series.

12.2. Samsung’s Competitors in Consumer Durable Segment:

Not only does Samsung exist in Smartphones, it exists in Consumer durable as well. Here
are some strong Samsung competitors in consumer durables which are mentioned below:

13. Samsung’s Competitive Strategies:

Samsung applies the broad differentiation generic competitive strategy. Based on
Michael E. Porter’s competitive strategy model, broad differentiation is done in a strategic way
in order to gain edge over the competitor by targeting every person or group through producing
distinctive products. This strategy serves as an intensive growth strategy for Samsung to sustain
in this heavily competitive environment because it mainly focuses on product development.

The basic strategy of Samsung’s Broad Differentiation is to invest in product

development which is also shown by Samsung’s product as they always have some new
innovations in them. For instance, expenditure on technological advancements by companies to
maintain the competitive edge in this field. In addition to that, Samsung also differentiate its
product by implying generic competitive strategy in collaboration with promotion mix and
tactics to produce unique and alternative products in response to competition. Together these
approaches create value chain network eventually satisfying end user needs.

Apart from that Samsung also adapt other strategies such as Cost Leadership,
Differentiation Focus and Cost Focus. By applying Cost Focus Samsung leads to the best cost
provider in some segments of the semiconductors and electronics components markets. Samsung
applies Cost Focus strategy with some innovation that reflects Samsung basic strategy of broad
differentiation. These strategies aligned with the company’s intensive growth strategies to
succeed in sustaining the technology firm’s competitive advantages.

14. Perceptual Mapping

A perceptual map is a visual representation in which the target customer is seen
competing with the alternatives of the nearest competitor representing the current market
situation. The perceptual map has several properties, which are explained below:

• The coupling gap between product alternatives shows closeness to the product,
especially in the consumer's mind.

• Vectors on the map show the fact that it provides the size and direction in the Euclidean
space. The vectors are mainly considered as identifiers of attributes with perceptual maps.

• The axes on the map show a set of special vectors that suggest basic dimensions that
characterize the customer to differentiate alternatives.
14.1. Process of Perceptual Mapping:
This is mainly explained when considering the suitability of objects and products for
Samsung company. This means that a wide range of products are selected from a range of
competing products in management decision-making.

There are three main viable methods to gather information about consumer perceptions of
products. The first approach illustrates a similarity-based approach using multidimensional
ratios. The second approach illustrates a classification-based approach that considers factor
analysis. The third method is to map the common space, adding elements of perception and
liking.

14.2. Use of Perceptual Mapping:

Customer analysis and competitor analysis - customer perceptions require an
understanding of the competitive structure of the market. It positions itself in terms of
competition and selection as a series of competitors that will compete soon. Demonstrates
customer perception of effective communication and discussion with Samsung management.

Products - New product awareness implies in existing brands in existing global markets.
15. Samsung – Apple Price Comparison

With the introduction of Samsung Galaxy, sales have reached $ 218 billion since 2018.
According to the website, Samsung is targeting $400 billion in revenue and setting the Samsung
Electronics brand value among the top 5 in the world by the end of 2020.

In addition, Samsung continues to lead the way in technology and product innovation.
For example, the launch of the Galaxy Z Flip and Galaxy Fold are two of Samsung's most recent
examples of ground-breaking innovation.

Samsung plays on two different pricing models, which it uses for more or less all of its
product and services.

Skimming pricing: Samsung has a skimming pricing strategy. For example, if Samsung
launches a new product with different types of storage capacity, that product will rate higher. If
other competitors launch a smartphone with the same functionality, Samsung will lower its price
and prevent its market share from falling due to competitor launch.

Competitive pricing: This pricing strategy is part of Samsung's marketing strategy.

Samsung was not able to become a leader in other product categories. Samsung is a trusted
brand, but has not yet beaten LG in the home appliance field. To avoid attacking market
competitors, Samsung uses competitive pricing. Samsung is also not a pioneer in these types of
products and must therefore defend its market position.

16. Samsung Financials 2019-2020:

For fiscal year 2019, Samsung posted annual sales of 230.4 trillion KRW and operating
profit of 27.8 trillion KRW. The company's revenue declined in 2019 compared to 2018,
generating 243.8 trillion won. In the fourth quarter of 2019, the company's operating profit
declined primarily due to the decline in the price of memory chips and weak screens. The overall
decline in sales and profits was partially offset by the growing demand for server memory chips
and mobile products, as well as the reliable sales of mainstream smartphones. While Samsung's
consumer and mobile communications businesses recorded total sales growth in 2019 compared
to the previous year, sales of other product categories declined.

The company's revenue in the mobile information and communications technology sector
was 107.3 trillion KRW, up from 100.7 trillion KRW in 2018. Electronics division Samsung's
Consumer Market generated 44.8 trillion KRW in 2019, compared with 42.1 trillion KRW in FY
2018.

Despite weaker smartphone sales in the first two quarters of fiscal 2020, Samsung
continues to maintain sufficient momentum for growth. Total revenue in the first quarter of 2020
was 7.6% lower than the last quarter of 2019, mainly due to the low seasonality of the display
and consumer electronics business and the impact of COVID-19. Sales declined toward the end
of the first quarter, Samsung's mobile communications division measured the increase based on
QOQ profits and the profit for first quarter of 2019 increase, thanks to the launch of the Galaxy S
20 and low marketing costs.

The company's quarterly operating profit increased in the second quarter compared to the
first quarter of 2020 and the second quarter of last year. While demand for chips and devices has
remained steady in Q2 2020, Samsung's display business also recorded strong revenue growth.
This resulted in a 26% increase in operating profit for the quarter, up 23% year-on-year.

As demand begins to increase globally since key economies reopened in May, some of
the effects of COVID-19 were offset. As a result, Samsung's profit increased faster than
expected. While the company's quarterly operating profit was KRW 8.15 trillion in Q2 2020,
while the having KRW 53 trillion in net sales.

17. Recommendations:
17.1. Vendor Specification and Competitive Advantage:
Samsung has depicted its brilliance within the area of supply chain and clearly have a
competitive advantage of it. If the company concentrates more towards its vendor specification it
can actively increase its development processes, which will ultimately have an impact on its
revenue streams.

17.2. Reducing Investment in India:

As a member of the emerging economy, India is characterized by its population. Total PC
sales fell by 6% since 2015. The government is no longer taking a step in issuing free laptops to
students. A lower unit price cannot improve market trends. In this scenario, the company should
not invest much in the Indian market.
17.3. Strategic Communication:
The presence of the brand forms the basis of a company's credibility to the greater
masses. This is where the importance of brand communication becomes relevant. Mass media
and advertising tools must be used in accordance with the business strategy to develop a public
response to products or services of international standards.

18. Conclusion:
Samsung has a its roots spread out in various industries and market areas, although the
most famous being the smartphones industry. The company itself spends a great deal on its
research and development to consistently upgrade its products. Samsung has always strived to
expanded into new areas of business. The company has diversified throughout its history, from
humble beginnings. It started as a small grocery store to commercial trading, and then went into
the telecommunications and consumer electronics industries. The company has diversified
significantly over the years and is not only the largest company in Korea today, but perhaps the
most diverse as well.