Positioning Strategy of Samsung Mobiles in India(4)

POSITIONING STRATEGY OF SAMSUNG MOBILES IN INDIA

Sunil Dutt (Dutt), country head (mobile business), Samsung India, said, "We are looking at doubling our market share to 15 per cent in 2008, which at present is around 7-8 per cent. T company will make required investments in building the brand, expanding channels and roll 1 out new models."

Samsung India, the 100 percent subsidiary of Samsung Electronics Co. Ltd. (Samsung), had manufacturing unit at Noida and also imported high-end mobile phones from the parent company. Samsung, which had firmly established itself as the No.2 player in the global aren 3 2007 with a 14.3 percent market share, trailed Nokia, Motorola, and Sony Ericsson in India. 2

With Nokia's market share dropping from 78 percent in 2005 to 48 percent in 2007 and its stranglehold on the Indian market loosening, its rivals including Samsung were gearing up t 4 boost their market share further.

Analysts expected fierce competition in this market as all the companies viewed India, which 5 had emerged as the world's fastest growing mobile phone market, as a key market.

Earlier in 2006, Samsung India had planned to increase its market share to 20 percent by 2 6 7 focusing primarily on the mobile phone replacement market . With this in mind, the company had discontinued its cheaper monochrome-screen models and focused on offering sleek and stylish mobile phones.

Its slim phones, in particular, were popular with a segment of the youth population. However market share continued to hover at around 10 percent. In March 2008, Samsung India strengthened its distribution network. It signed an exclusive agreement with some 40 distributors who had earlier been working with the market leader 8 Nokia. With the addition of SSK and Link to its two existing regional distributors Telemart and 9 United Telelinks, it had four distributors operating on a regional basis.

SSK and Link were to act as the regional distributors for the Western and Eastern region of country respectively. "We have initiated a market-mapping exercise to get into our fold distributors who have relevant knowledge of the market, credibility, a good distribution netw 10 and will therefore contribute in strengthening Samsung's reach in the market," said Dutt. According to him, the new distribution strategy would take its penetration level in the marke from the current 55 percent to 85 percent by the end of the year.

On the retail front, it was taking initiatives to increase the number of retailers enrolled as Samsung Mobile Privilege Partners (SMPPs) from around 100 in 2007 to around 400 by the e of the year. According to Dutt, many single and multi-brand retailers had shown interest in becoming an SMPP.

In the same month, the company launched five new mobile phone models and said that it wo launch another 13 by the middle of the year. The models that were launched included multim phones, phones for corporate customers, and a comparatively lower priced model aimed at a bigger chunk of the market.

The company said that as of early 2008, its mobile phones were priced between Rs. 1,700 an Rs. 28,000, but that the company would launch more expensive mobile phones in the future.

The company also announced its new positioning with the new pay-off line 'Next is What?' an that it had roped in a leading actor of the Indian film industry Aamir Khan (Aamir) as its bra ambassador. Aamir would also feature in its new ads.

Announcing the major celebrity endorsement for the brand, HB Lee, president and CEO, Samsung (South-West Asia), said, "The Samsung brand stands for qualities of innovation, change, discovery, self-expression, and excellence in performance. And these very same qualities are epitomized by Aamir Khan, whose quality and depth of work as well as versatili as an actor, have made him a much loved and respected actor in India today. We are indeed 12 proud and privileged to have him as our brand ambassador."

With Aamir's endorsement of Samsung, the fight for the mobile phone market had also becom four-way battle with other leading actors endorsing the rival brands - Shah Rukh Khan endor Nokia, Abhishek Bachchan endorsing Motorola, and, Hrithik Roshan endorsing Sony Ericss

According to Samsung, the mobile phone market in India would be 100 million units in 2008 With all these new initiatives, Samsung was confident of achieving its objective of cornering 15 percent market share in the country.

The company said that it had the necessary infrastructure to ramp up its production capacity manufacturing unit at Noida from the current 6 million units per annum, depending on the 15 demand.

Volumes do matter

In 2005, Samsung introduced over 100 new products that were sold on the lifestyle platform. These included flat panel, LCD and plasma TVs [ Get Quote ], top-end refrigerators, home

theatre systems, digital cameras and camcorders, MP3 players, notebook computers and mobile phones. At the time, sceptics argued that growth targets based on premium products rather than on India's voluminous price sensitive mass market were tough to achieve. More than two years later, Samsung isn't complaining about the progress of its lifestyle portfolio (even though it has turned turtle on that strategy). It is the market leader in LCD televisions and super-premium, side-by-side refrigerators and claims respectable market share figures in other product categories as well. In the IT segment, Samsung is the leading LCD monitor brand. And turnover in the past one year has grown 20 per cent to cross $1.3 billion. "India has been identified as one of the top strategic markets for Samsung," says Lee. Still, focusing on the premium customer will get you only so far - India is still a market powered by volume-growth. Which is why, points out Zutshi, the current strategy is to gain greater reach among the masses - not through pricing, he insists, but through product innovation. "We are providing superior technology and differentiated products even for the mass market. We are aiming at market leadership not only in the premium category of products but also mass categories like flat televisions," says Zutshi. In other words, innovation is no longer confined to top-end products. Instead, Samsung is rolling out its technological improvements even in mass, volume-driven categories. For instance, last year, the company also introduced in-built voltage stabilisers in its direct-cool refrigerators - a feature earlier found only in frost-free models. Keeping in mind the thrifty middle-income consumer, many refrigerator models are being promoted on the power-saving platform - complete with three- and four-star ratings from the Bureau of Energy Efficiency. Yet others are equipped with strengthened glass shelves and cool packs in the freezer compartment that ensure freezing even during prolonged power cuts. "Most Indian cities have poor power supply, so these products have done well," says Zutshi. Then, ahead of the festival season, Samsung launched two semi-automatic washing machines with anti-bacterial Silver Nano [ Images ] technology that, until now, had been available only in fully automatic washing machines. It also introduced the Easy View feature - a top-end feature developed for the Indian market, which allows multiple windows on the same screen - in conventional flat TVs. This isn't the first time Samsung has adapted products for the Indian market. Washing machines with special sari rounds were introduced several years ago

In the past three years or so, Samsung has expanded its Indian R&D operations considerably, employing over 2,000 people across all divisions of the company. Many products sold locally have been customised for Indian conditions by the company's Hardware R&D Centre, making them more acceptable to Indian consumers. "The idea behind the strategy is to carry product innovation to the mass categories and build support for the Samsung brand, not only at the premium end but also in the large-volume categories," says Lee. The reasons behind the frenetic activity are not hard to fathom. Clearly, as competition intensifies, there is pressure to build differentiated products to capture marketshare. Especially in a slow-growing market - Zutshi estimates consumer durables is growing at 6 to 7 per cent a year, while colour TVs are twice that. Meanwhile, the industry itself is changing. "Players want to move up the value chain and offer superior technology, at the same time ensuring that consumers consider them affordable," says a Mumbai-based marketing consultant. But if top-end brands become affordable, can they still claim the premium they charge for their brand names? "The premium for top-end brands will come not from their brand names, but from product innovation," the consultant declares. M ass

reach

Samsung officials say home appliances sales during the festive season saw a 30 per cent increase. This can be taken as vindication of the company's trickle-down innovation strategy. But that's a seasonal spike. The company needs to now work hard to ensure its expanded product portfolio is available across the country - and that target customers are made aware of the brand. The latter task is actually not that difficult. Samsung India has been around for a while now, and its close association with Indian cricket - team and tournament sponsorships and so on - has meant brand recall rates are pretty high. The core of Samsung's new strategy, therefore, has been to reach out to a bigger base of consumers, both in the metros and non-metro markets through its products and marketing/communication strategies. To tap the non-metros and semi-urban markets, last year Samsung conducted over 100 road shows in class B and C towns. "The Digital Home Road shows were meant to showcase our full range of products to customers in towns like Meerut, Saharanpur or, say, a small town in Tamil Nadu," says Zutshi. The

success of the road shows was measured in terms of the number of people who visited these stalls and any bookings made with the local dealer. And the focus on small towns doesn't mean the metros can be overlooked. There's a growing market for replacements as well as an increasing number of homes wanting multiple television sets. The growth of modern retail and the expansion of large-format electronics stores like Croma, Jumbo and E-Zones add to the opportunity. "Our aim is to achieve deeper penetration into the Indian market - be it the metros or smaller cities. Today, it is important to understand modern retail as well in order to accomplish our targets," says Zutshi. Meanwhile, company-owned outlets remain a key strategic tool - Samsung will add another 30 showrooms to its existing 100-odd this year. But, with a difference. Over the next few months, the existing Samsung Digitall Homes will all be rebranded Samsung Plaza, in keeping with the global practice. Until now, India was the only market where Samsung followed a dual showroom strategy larger (2,500 sq ft and more) outlets were dubbed Samsung Digitall Home, while smaller showrooms were called Samsung Plaza. It is not just about a name change, though. Samsung India also wants uniformity in appearance and sales experience at each of these showrooms that means an emphasis on product demonstration, not just display. S ame

game, new rules

Samsung's biggest rival, of course, remains LG Electronics. The other Korean giant has maintained its volume lead in colour TVs, washing machines, frost-free refrigerators and airconditioners. While Samsung built its premium brand image and customer base, LG was busy seeking a wide reach and extensive distribution network that would help build volumes. Now, though, marketing experts believe the chaebols are mirroring each other's strategies. LG Electronics Chief Marketing Officer, L K Gupta, denies copying Samsung but does admit there's been a shift in strategy. "We do not wish to push sales but create a pull or demand. Our marketing will focus on higher brand value - aspirational and premium. The focus will be on consumer benefit and not price discounts," he explains. The marketplace is very competitive and unlike in the FMCG sector, margins in the consumer electronics business are not very high. "Technologies change and there is price erosion in the market. There is pressure to generate more profits. We want a better price for a better brand," says Gupta.

Will Samsung be able to beat LG at its own game, especially now, when LG is busy building brand equity? "Samsung has always been the No. 1 technology brand. We have the conviction and capability of following our own approach and this is giving us a strong and consistent growth in the market," says Lee confidently. Durables industry veteran Rajeev Karwal believes both biggies will create distinct niches for themselves. "Consumer electronics marketing is no longer complex - most products are available everywhere in the world. Only appliances require some regional tweaks. There is no threat to LG and Samsung in India. They are entrenched players and LG's distribution is not easy to match." But will volumes follow, considering Samsung is making a big effort to reach out to the masses? Zutshi believes so. "We have the brand equity, marketshare will follow," he says. What, then, is Samsung's biggest challenge in 2008? "It's the customer - the challenge is to keep him happy and meet his aspirations," says Zutshi. Once that happens, Lee can finally take a break. Shuchi Bansal Source:

In preparing for your marketing campaigns to define the basic focus of your marketing strategy by determining why you market. In addition to basic numbers alone to define the goals you want to achieve your marketing efforts. Have a clear understanding of why companies in marketing and establishing a criteria for your own campaigns. Focus # 1: To attract new customers. This is something you should always try to do. It is important to your product or service to an ever-new base of people who have to sell your product the best qualified and want. Every marketing effort, you should focus on the acquisition of new customers. Why? Because your existing customers will eventually cease to exist. And of course, the companies are growing not only on existing customers. Here are some basic rules: * Make sure the customers can add that to the wayside and unproductive. * Make sure you always looking for new business. * Make your marketing research efforts to win new markets and new customers aggressively. Focus # 2: To the existing customer market. Their goal is to more of the same or another product for people who have bought from you before selling. It is easier and cheaper to market to your existing customers than it is to acquire new ones. Example: If you use direct mail, it's cheaper to market to your existing customers, because you already have the mailing list. If you are looking for new customers, you need to buy or rent a list elsewhere. The customers who are already in the database are the gems that will build your business. They grow and cultivate them, and your business will grow. Keep your customers informed, active, passionate and interested in your product. One very effective way to keep customers in line with developments in your company, the

mobile marketing build-up connection. With more than 255 million mobile phone users in the U.S. right now, the mobile phone their most personal communication device. Take advantage of this valuable tool through the use of various mobile marketing techniques to keep customers current with sales calls, promotions, events, discounts and much more. Focus # 3: To increase the overall value of the company. Some marketing investments may not be immediately measurable at the checkout. For example, many companies are investing U.S. dollars marketing to build brand reputation and brings the value of their shares. After afford a clear understanding of your marketing objectives, it is easier for you to sketch out specific, measurable goals that you want to achieve in your marketing efforts. Ben Deleon is President of the Brandel, an innovative publishing company specializing in design and development of software and Internet-based businesses. Brandel offers several mobile marketing products. Visit http://www. brandelinc. com, call 954-583-9000 or e-mail ben @ brandelinc. com.

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Samsung launches its dazzling Samsung OMNIA

HD

in India

- World·s first HD Recording handset with the World·s largest 9.4 cm AMOLED Touchscreen - Strengthens the Omnia line-up with the launch of Omnia P R O M umbai,

August 12, 2009 ± Samsung Electronics Co. Ltd., a leading mobile phone provider, toda

strengthened its OMNIA series with the introduction of its multimedia powerhouse with HD brilliance, O M N I AH D in the Indian market.O M N I A H D is the World¶s first full-touch handset featuring 720P

HD

video recording on mobile, as well as the world¶s largest 9.4 cm

AM OLE D screen on mobile. With its 1 Ghz Processor,

S amsung

O M N I AH D is a high

performance full-touch screen phone that incorporates the latest multimedia features and

fastest

data

communication,

to

offer

a

complete

multimedia

solution

for

consumers. The Company today also announced the launch of its Personal Assistant Perfected -

Omnia PRO B7320 in the Indian market. Powered by Windows Mobile 6.1, the Samsung Omnia PRO ,

with its compact design and ergonomic QWERTY keypad ,offers complete excellence at work.

Based on Symbian platform, Samsung O M N I AH D is the Company¶s newest, high performance fulltouch screen phone that brings together style, multimedia and business performance in one device. The mobile follows on from the phenomenal success and heritage of the O M N I A last year and extends Samsung¶s market leadership of all-in-one full-touch phones. Samsung O M N I AH D has a

stunning design with a sleek finish and delivers the ultimate in digital entertainment thanks to its HD capability and 9.4cm AMOLED screen. The Active Matrix Organic Light Emitting Diode (AMOLED) touch screen offers unrivalled sharpness of tone, vivid colours and greater clarity in direct sunlight as well as consumes less power. Announcing the launch, stated

M r.

S unil

D utt,

Country

H ead

±

M obile

Business,

said, ³Samsung O M N I AH D exemplifies our Vision of providing premium phones consumers who desire functionality, style, usability and entertainment in one innovative device.

S amsung I ndia

Samsung OMNIA series keeps the consumers at the forefront of work and play, staying connected , anytime, anywhere.´ Brilliant

HD

Quality with A M OLE D

The HD video recording feature enables users to capture precious moments in HD (720p) quality, enjoy HD content on HD TV via DLNA technology. The 16: 9 screen of QHD display with 16M colour and dual stereo speaker reveal a whole new world of mobile multimedia experiences on the move, enabling users to enjoy SD (Standard Definition) /HD (High Definition) videos in cinema-scale quality. B r illiant

Touch Expe r ience With its easy to use and intuitive 3D interface, OMNIAHD offers effortless and convenient viewing, allowing users to move around and multi-task seamlessly. Motion-enabled features including 3D games make it intuitive and exciting to enjoy the best ever mobile multimedia experiences.

Moreover, Samsung Mobile Widget delivers up-to-date information of your choice with just one touch, creating a personalized interface with which to access the infinite wealth of web content. Brilliant

M

ultimedia Companion

With its 1G H z Processor,

S amsung

OM N I A

HD

is a true multi tasking phone with the capability

of running several applications simultaneously. Samsung OMNIA

HD

ensures you capture the

life-like photographs of your friends and family through the dedicated 8MP camera which allows you take digital camera-quality photographs on your phone. Users can enjoy and share these images and videos through a super-fast internet access of HSUPA 5.76Mbps and HSDPA 7.2Mbps. Users can also enjoy PC-like web-surfing on the phone¶s 9.4 cm Auto-Rotating Display. GPS with integrated compass makes OMNIAHD suitable for both pedestrians and drivers, and the navigation

touch control and voice guidance via dual stereo speaker provide drivers with easy and safe navigation. The mammoth 16GB internal memory expandable to another 32GB, allows users to store up to 48GB of data. Samsung now has a series of nine full touch screen phones ranging from the Samsung Star to the just launched Samsung OMNIAHD. The Company has introduced seven full touch screen models within this Year and expects its touch screen range to contribute around 10% of its mobile volumes in this Year. The Samsung OMNIA HD is priced at Rs. 33,990/-

SAMSUNG OMNIA PRO With its compact design and ergonomic QWERTY keypad, the Samsung Omnia PRO B7320 is a portable messaging centre which lets users carry their inbox with them wherever they go, with corporate push email support .

Excellent

B usiness

Integr ation

Based on the Windows Mobile 6.1 operating system, Samsung Omnia-Pro gives users a mobile extension to their PC experience, with access to MS Office documents such as PowerPoint, Excel and Word. Users can also send and receive email and manage their appointments in Outlook while on the go. The Windows Mobile 6.1 operating system means users can download additional programs as they would on their PC and customize it for their individual needs. With corporate push email support users can easily stay in touch with their mails and the support for key enterprise wireless e mail solutions including Microsoft Exchange ActiveSync and IBM Lotus Notes Domino, keeps them connected with their business at all times. Excellent µWork & Play¶ Convergence :

For those who value networking and maintaining relationships, the OmniaPRO B7320 boasts social networking applications like Facebook as well as instant messaging support for MSN. Google Talk and Yahoo Chat are downloadable on this phone.

Additionally, features such as a 3-megapixel camera, FM radio with RDS and Wi-Fi also enable users to be entertained wherever they go. Samsung O M N I APRO is priced at Rs.16,500/In addition to the OMNIA HD , the other touch screen phones in the Company¶s portfolio include the Samsung UltraTouch, the world¶s first 8MP Camera phone with AMOLED screen, Samsung Pixon (M8800), the highly popular Samsung Star & Star 3G , Samsung BeatDJ ,Samsung TouchWiz (F480), and Samsung OMNIA (I900). The Samsung touch screen portfolio is priced in the range

between Rs. 11,100/- to Rs. 33,990/-. ³Our full touch screen handset range is garnering a strong consumer acceptance based on the large full touch screen display, stylish form factor as well as the precision and ease with which the touch applications work on the phones ³states Mr. Dutt. About

S amsung

Electronics

Samsung Electronics Co, Ltd. is a global leader in semiconductor, telecommunication, digital media and digital convergence technologies with 2008 consolidated sales of US$96 billion. Employing approximately 150,000 people in 134 offices in 62 countries, the company consists of two business units: Digital Media & Communications and Device Solutions. Recognized as one of the fastest growing global brands, Samsung Electronics is a leading producer of digital TVs, memory chips, mobile phones and TFT-LCDs. For more information, please visit www.samsung.com. For Fu r ther Infor mation Please Contact: Ruchika Batra GM- Corporate Communications Samsung India Electronics Pvt. Ltd. Email: [email protected] Phone: 011-41511234

Neha Shah Integral PR Services Mobile: 9769397011 Email: [email protected]