Principles of MarketingCZBK9004

ASSESSMENT(Individual Assignment)

SAMSUNG ELECTRONIC

Words: 2588

Shafiera Humala Asaputri 003MG012

Bachelor of Commerce – Majoring in Management

EXECUTIVE SUMMARY

Samsung Electronic is one of the biggest electronic companies in the world,

that compete each other with Apple, LG, SONY, HTC, and other electronic company

in the world. Samsung Electronic is founded in 1969 in Suwon, South Korea. The

Chief Executive Officer of Samsung Electronic now is Kwon Oh-Hyun. Samsung

Electronic produce a lot of electronic products such as camera, television, smart

phone, home appliance, PC, and printer. Samsung Electronic markets are people who

have big income because the price of Samsung’s products is not cheap, but the quality

of the products is good. So people do not mind to buy the products. Samsung

Electronic did a lot of charity or donated in event or program in the world. Such as

donated for famous museums in the world, operating program for children that can

not go to school because they do not have any money to go to school and many more.

Samsung use social media, web sites and internal marketing for promote their

product.

Samsung Electronic revenue is increasing rapidly in 2012 because the sales of

Galaxy Note II, Galaxy S III and television. Revenue Samsung Electronic in 2012 is

US$ 186,101.3. Apple lost over Samsung because of these products in the end of

2012. Samsung Electronic has 221,726 employees in the end of 2011, not only in

Korea but also globally. Samsung electronic products always has new technology and

they always give new features and a lot of features for their product, it makes better

than the old product. Because, the key sentences Samsung Electronic are “New

Technology”, “Innovative Products” and “Creative Solutions”.

In this report we can read about Samsung Electronic SWOT and PESTLE

analysis. Strengths, weaknesses, opportunities and threats of Samsung Electronic.

Political, economical, social, technological, legal and environmental factors of

Samsung Electronics. SWOT and PESTLE analysis is very important for company

because with these analysis’ help company to achieve their goals. In 2011 Apple

suing Samsung Electronic about Apple trademarks, patent and copied iPad and

iPhone. Samsung Electronic has to pay to Apple for US$ 1.05 billion. And in 2012

there is also labor issue in China that Samsung Electronic employs underage worker.

Samsung Electronic marketing strategies is very good. The promotion

strategies of Samsung Electronic is very good, they work with famous Korean artist

such as Psy, Super Junior, Girls Generation, and other Korean artist. They work with

them to starring in the commercial film for advertise their new product and also they

sponsored many Korean dramas.

CONTENTS

Executive Summary.................................................................................... ii

1.0 Introduction………………………………………………………………..1

2.0 Situation Analysis

A. Internal Environment

I. Organization background………………………………... 2

II. Products…………………………………………………… 2

III. Financial and non-financial results……………………… 3

IV. Channels…………………………………………………... 4

B. External Environment

I. Markets……………………………………………………. 4

II. Competitive environment…………………………………4

III. Economic environment……………………………………5

IV. Demographic environment..................................................6

V. Social and cultural environment………………………… 6

VI. Political and legal environment………………………….. 7

VII. Technological environment……………………………….7

C. SWOT or PESTLE analysis………………………………………7

D. Critical issues………………………………………………………9

3.0 Marketing Objectives…………………………………………………….. 9

4.0 Marketing Strategies

A. Target markets…………………………………………………….10

B. Product strategies………………………………………………….

10

C. Pricing strategies…………………………………………………..10

D. Promotion strategies……………………………………………… 10

E. Distribution strategies……………………………………………. 11

5.0 Recommendation for Change for improving the marketing of an

organization………………………………………………………………. 11

6.0 Conclusion………………………………………………………………… 11

7.0 References……………………………………………………………….. 12

1.0 INTRODUCTION

Technology from time to time will continue to evolve and getting better. In the

old days, hand phone was very thick. We can only use it for call and send instant

message (SMS). Now hand phone is very slim, easier to bring everywhere. Have a lot

of features like camera, Internet, video chat and other features. Not only hand phone

that evolve, but television too. In the old days, television has a big machine but the

screen is very small. It was in black and white, not color. Now, television is very slim

and has bigger screen than before. The image is very clear and clean like real. Can

access Internet, has 3D feature and other features.

Today, there is a lot of electronic company in the world. Several big names

company is strongly compete with each other. They compete their quality, price and

technology. Samsung Electronic is one of the biggest electronic companies in the

world. Samsung electronic is South Korea Company that founded in 1969. Samsung

Electronic is one of the subsidiary company of Samsung Group. Samsung Group is

the largest company in South Korea.

In this report, we will know about the environment of Samsung Electronic.

Marketing strategies that Samsung Electronic operating in.

MISSION STATEMENT

Samsung Electronic mission is to inspire its communities by following

Samsung’s 3 key strengths; New technology, Innovative products, Creative solutions,

and promoting new value for Samsung’s core networks: employees, partners, and

industry. With these 3 key strengths Samsung hopes that they can make a better world

and get a lot of experience for all.

2.0 SITUATION ANALYSIS

A. INTERNAL ENVIRONMENT

I. SAMSUNG ELECTRONIC BACKGROUND

Samsung Electronic is one of the biggest electronics company in South Korea.

Founded by Lee Byung Chull in 1969 Suwon, South Korea. Now, the Chief Executive

Officer of Samsung Electronic is Oh-Hyun Kwon. Samsung Electronic is one of the

subsidiary company of Samsung Group. Samsung Group is the largest company in

South Korea. Samsung Electronic produces televisions, cameras, home appliances,

mobile phones, and computers. But now, Samsung Electronic is world’s largest

mobile phone maker by 2011 unit sales. And in 2012, Samsung Electronic became the

company that gets the largest revenue wins over Apple. The key performer of

Samsung Electronic in 2012 are Samsung Galaxy S III and Samsung Galaxy Note II.

These products made Samsung Electronic got a lot of profit than before. Samsung

Electronics’ new vision is “Inspire the World, Create the Future”.

II. PRODUCTS

Television / Audio & Video

Television; LED TV, LCD TV and Plasma TV. LED television is the best

television by Samsung Electronic. LED television has a slim design, SMART

television and 3D. SMART television is can access to Internet and deliver content

from other computers or other network. We can plug in our disk drive. Has Smart

interaction such as face recognition, motion control, voice control, and camera

application.

Blu-ray Player, DVD recorder & player, home entertainment system and

wireless Audio with dock.

Camera / Camcorder

SMART Camera, NX Camera, and GALAXY Camera. GALAXY camera use

Android like smart phone.

Home Appliances

Washing machine, refrigerator, air conditioner, vacuum cleaner, and

microwave oven.

Mobile Devices

Mobile phone, Smart Phone, tablet, and Galaxy Note. The most outstanding

from mobile devices Samsung are Smart phone, tablet and Galaxy note.

PC / Peripherals & Printer

Samsung PC are notebook PC and Smart PC. Printer/multifunction.

III. FINANCIAL AND NON-FINANCIAL RESULTS

Financial Samsung Electronic result

Samsung Electronics income increase rapidly in 2012 because the sales of

Galaxy Note II and Galaxy S III.

Non-Financial Samsung Electronic result

Samsung Electronic is helping hand to other country that need help. Samsung

Electronic works with communities for helping other country.

1. In America made program “Samsung Hope for Children”. Has raised US$

25million donated to several charitable.

2. In Europe 2010, Samsung Electronic organized the campaign “Everyone’s

Art” collected around US$ 1.7 million for Pink Ribbon campaign; it is about

to fight breast cancer.

3. Samsung donates products to some world famous art museums in Europe such

as the Louvre, Pompidou, Osray and Rodin to support their activities.

4. In China, Samsung organizes “One Heart One Village”. 25,970 employees

participated to supporting farming villages through improving education &

modifying people’s mindset, renovating infrastructure in the farming villages

and to increasing village income.

5. In Thailand, Samsung Community Center of Hope offers service such as

healthy care, education and recreational for local resident. In Philippines,

Samsung help 55 students to continue their education for free. And donated

Samsung products.

IV. CHANNELS

Samsung Electronic gives their information about their product through social

media and websites because a lot of people using social media in their daily life. It

makes easier for everybody to get the information through social media and websites.

Youtube is for promotional videos. Twitter for daily information and they can

communicate with their consumers. Samsung Electronic gives employees discounts

and coupon for purchasing Samsung products. The name of the program is “the

Samsung Mobile Friends and Family Employee Purchase”.

B. EXTERNAL ENVIRONMENT

I. MARKETS

Markets of Samsung Electronic are people that have big income, because the

price of Samsung Product is not cheap. But with the price that not cheap, they have

good quality product, has a lot features and new design. So people want to buy it

because it is worth it to spend with.

II. COMPETITIVE ENVIRONMENT

Samsung Electronic has a lot of competitor in every field. Competitors in

television and smart phone are very competitive. Competitors Samsung SMART TV

are:

SONY

Sony BRAVIA TV 3D LED is the rival of Samsung SMART TV. It

has same features and specs but it does not has Smart interaction like

Samsung SMART TV.

LG

Local competitor Samsung electronic. LG Smart TV 3D LED has same

features and specs with Samsung SMART TV and also has smart

interaction too.

Competitors Samsung in Smart Phone are:

APPLE

The biggest competitor for Samsung Electronic. From 2011 Apple and

Samsung Electronic always compete each other in smart phone. iPhone

versus Galaxy Note and Galaxy S

HTC

The first company that produces phones with Android mobile device

and the first company that produce first touch screen smart phones in

the world. In the second quarter 2011, HTC become third largest smart

phones company, after Apple and Samsung.

III. ECONOMIC ENVIRONMENT

Currency in Millions of US

Dollars Dec 31 2009 Dec 31 2010 Dec 31 2011

Dec 31

2012

TOTAL REVENUES 125,595.00 142,460.90 152,016.10 185,276.70

GROSS PROFIT 38,444.70 47,874.00 48,696.80 68,592.40

In 2012 total revenue Samsung Electronic rising rapidly to US$ 186,101.3

million with gross profit US$ 68,897.6 million. Samsung Electronic has been able to

reduce expenses of good sold from 67.97% to 62.98%. This made Samsung to a

bottom line growth from USD $12.4B to USD $22.1B.

In 2010 Samsung Electronic spend around US$ 8,000 million for marketing

expense. In 2012 they spend around US$ 12,000 million for marketing expenses.

Sales promotion expenses they spend around US$ 4,000 million in 2011. Advertising

in 2011 they spend US$ 3,500 million, in 2011 is US$ 4,000 million. Samsung

Electronic spending a lot of money for marketing.

IV. DEMOGRAPHIC ENVIRONMENT

Samsung Electronic has 221,726 employees in the end of 2011 increased by

31,262 from 2010.

Korea Overseas TOTAL

2009 85,089 (53.9%) 72,612 (46.1%) 157,701

2010 95,662 (50.2%) 94,802 (49.8%) 190,464

2011 101,973 (46.0%) 119,753 (54.0%) 221,726

It is because of the new production plants and expansion of existing plants in

Southeast Asia and China.

Overseas employee location are from Southeast Asia, China, Southwest Asia,

South America, North America, Europe, CIS, Middle East, Africa and Japan. In

Southeast Asia have 21,165 employees the biggest number among the others. 59.5%

of employees are new graduates and 40.5% are experienced.

Samsung Electronic prefers young people because they have fresh idea and

has full energy for work. 40% of Samsung electronic employees are female.

V. SOCIAL AND CULTURAL ENVIRONMENT

Samsung Electronics’ products not only for Korean market, the products are

for other country too. Because the product is appropriate for everybody from every

country and every age. Mobile phone that uses Android is a trend now, and Samsung

Electronic is following this trend.

VI. POLITICAL AND LEGAL ENVIRONMENT

Samsung Electronic paid taxes and dues to the South Korean and foreign

governments increased by 11.7% from 2010. In 2010 the total taxes and dues

payments is KRW 3,809 billion. In 2011 is KRW 4,256 billion. Samsung is focus on

Age Employee

<30 124,641

30s 70,531

>40 26,554

leading edge, forward-thinking technologies, products and services that are compliant

with government regulations. Samsung Electronic partner with authorized federal

resellers to offer reliable solution to the federal government. The products are LCD

monitors and data projectors. Discrimination forced labor and child labors are

prohibited in Samsung Electronic.

VII. TECHNOLOGICAL ENVIRONMENT

Samsung Electronic product has high technology. Samsung always research

and makes for new features for the product. Every new product has new features,

better than the old ones and good design. Like Samsung vision creative, innovative,

and new technology. Samsung Electronics’ smart phone now is number one in the

world, with iPhone.

SMART Television Samsung is the best television now. It has a lot of features

such as 3D, SMART interaction, can access internet, can play games without

controller, do not need remote anymore, and we can also use our smart phone

(Samsung) to control television. Control our cars, but only Hyundai. We can turn it

off and on the car.

C. SWOT OR PESTLE ANALYSIS

SWOT analysis is Strengths, Weaknesses, Opportunities and Threats. This is

help organization to achieve their goals.

Strengths: what are the advantage of the company

Weaknesses: what are the disadvantage of the company

Opportunities: the project that could be advantage for company

Threats: something that could cause any trouble for company or project

SWOT analysis for Samsung Electronic:

Strengths

Good marketing strategy

Good quality products

Strong hold in Consumer Electronic

Has a lot of employee in local and global

Weaknesses

Poor pricing strategy

High investment on research and development

Have issue about the battery for smart phone

Opportunities

Increasing on consumer market

Increasing television mobile phone sales

Growing global market

Threats

Intense competition

Apple is biggest competitor for Samsung Electronic in smart phones

category

PESTLE analysis is Political, Economic, Social, Technological,

Environmental, and Legal factors. This is one of the important tools of business

strategic Management to identifying the environment of the business operates.

Political

Law about labor

Goodwill for foreign nations

Tax policy

Services and goods provide by the government

Economic

Inflation rate

Income

Revenue and profit

Economic growth

Interest rate

Social

Age distribution

Growth rate

Culture of the society

Technological

Costs and quality leads to innovations

Research and development activity

Better technology for new product

Legal

Employment law

Discrimination law

Consumer law

Health and safety law

Environmental

Place

Ecofriendly product (problem of global warming)

D. CRITICAL ISSUES

In 2011, Apple was suing Samsung violated Apple’s trademarks, patents and

copied the iPhone & iPad. In the end of 2012 it’s said that Samsung should pay to

Apple for US$ 1.05 billion for damages in an intellectual property lawsuit.

In 2012, there is labor issue in China that Samsung Electronic employs

underage workers. They employ 15 years old girl to works at the factory in China. In

2013, there was accident that leaks of hydrofluoric acid gas in plants, Seoul that killed

one worker and injured 4 workers. They cover this fatal incident with lies.

3.0 MARKETING OBJECTIVES

Marketing objectives is a group of goals of the company when they promote

their products or service to the consumers that can be achieved within a given time

frame. Marketing objectives of company for a product include providing information

about product features, reducing consumer to buy the product, and increasing product

awareness among target market.

4.0 MARKETING STRATEGIES

A. TARGET MARKETS

Target market Samsung Electronic is depends on the product. Television is

for people who can accept a new product idea, new features, and new technology.

Because the price is not that cheap, the target market is people who have considerable

income.

Smart phone is everyone. Now almost all people use smart phone. But for the

Galaxy Note II the target market is for businessman, designer, journalist and some

kind profession like that. Because Galaxy Note II has features that make these

professions easier to do their jobs just using this and Tablet.

For other products the target is also the same, for people who can easily accept

a new product, features and technology. And has big income.

B. PRODUCT STRATEGIES

Product is something that company produce and offer to the consumer that

might satisfy a need or want. Samsung Electronics’ always has new ideas for their

new product. They make a new product a lot better than the old ones, so the

consumers will not go to the other company. They make the new product has a lot of

features, the design is better and slimmer than before it make very modern, and they

good quality products.

C. PRICING STRATEGIES

Samsung Electronic produce goods that have good quality, always have new

and a lot features, unique, different from other company and make people want to buy

it and spend their money on Samsung Electronic products because it is worth it to

spend on. The price is very reasonable because with this price people can get good

quality product. Even though it is expensive, but because it has a good quality the

price is very reasonable for people.

D. PROMOTION STRATEGIES

Samsung Electronic Korea works with Korean celebrities like Psy, CN Blue,

Hyun Bin, Girls’ Generation and other celebrities for their Commercial Film and

perform at the event. Samsung Electronic has sponsored a lot of Korean Dramas. It is

easier to promote their product because a lot of people watch Korean dramas, not only

Korean people. But people in other countries in Asia also watch Korean Dramas.

Media is a public relation way, Advertise their new product on newspaper and

magazine. Give special price for first week since they launch the product. Sent direct

email to their regular customer to give them the latest information. Internet marketing

is like social media (Twitter & Facebook) and websites. Youtube is for video

promotional.

E. DISTRIBUTION STRATEGIES

Samsung Electronic has a lot of retail store in each country. In Singapore,

Samsung Electronic has 14 official retail stores. In Pekanbaru (Indonesia), Samsung

Electronic Indonesia opens Samsung Plaza that sale Samsung Electronic product such

as television, smart phones, camera and home appliances. Not only official retail store

but they also works with other cellular store in each country.

5.0 RECOMMENDATIONS FOR CHANGE FOR IMPROVING THE

MARKETING OF AN ORGANIZATION

Samsung Electronic should concentrate or focus on their quality and pricing

structure if they want to maintain their success. The quality of Samsung is already

good. But they have to still improve their product. So, they can keep up with other

company. The pricing structure has to balance with the quality. With that, Consumers

wants to buy it.

Always keep in touch with consumers, means of advertising, press releases

and make them curious about the product specifications, new features and changes if

there are any. Make them want to know a lot about the product.

6.0 CONCLUSION

Samsung Electronic is one of the biggest electronic companies in the world

that has a big income than other country. This company has a good marketing

strategies so they can attract many people too buy and focus on their products. Also

they have good quality product with reasonable price. Even though Samsung has a lot

of competitors, Samsung can still keep up with their product to compete each other.

Samsung always consider their target markets.

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