SAMASUNG ELECTRONICS

Samasung Electronics Case Study



Samsung Electronics Case Study

The marketing strategies use by samsung

Samsung's marketing techniques minimized the necessity of channels, as their approach was to provide a lower cost product which would appeal to buyers. Samsung's strategy differs from those in the marketing industry which is specific to a target market and subsequently reliant upon proper channel techniques and marketing strategies. Furthermore, cultural aspects favor producers in some countries, as opposed to other countries. Thus, it can be theorized that the success or failure of marketing channels can be attributed in some ways to the existence of cultural distance. For instance, the U.S., has less difficulty establishing marketing channels in Canada, a country in close geographical proximity with few language or political barriers, than in Iran, a country with significant cultural differences as well as geographical, political, and language barriers.

Samsung Electronics Corporation aggressively developed an export market from the beginning. Exporting comes forth as the necessary vehicle for Samsung to overcome the growth limit constrained by the limited domestic market. It has traditionally accounted for around 60 percent of total revenues (Khanna, Song & Lee, 2011). This proportion, however, has fluctuated since the introduction of semiconductors to as much as 69 percent in 1994 and 1995 and down to 55 percent in 1997. Initially, exports were carded out predominantly using OEM (original-equipment manufacture) agreements.

As internalization of product technologies was achieved, however; Samsung engineers began to design their personalized products, gradually replacing OEM with the ODM (own-design and manufacture) products. Most ODM products were also exported under the buyers' brand name. A serious effort to export Samsung's own-brand name (OBN), although attempted earnestly from the early 1980s, took off only in the late 1980s, as Samsung's technological prowess and image became recognized in the world market.

Supported by the export of memory chips, the ratio of OBN increased to 55 and 69 percent, respectively, in 1993 and 1995. Growth path: Competitive advantage Samsung's competitive advantages represent a culmination of various strategic processes, including the four growth paths previously discussed. The company's focal point for competitive advantages has shifted over time (Salmon, 2011). During the 1970s, Samsung attempted to win the market by the best pricing strategy, which was feasible only by realizing the lowest costs in the industry. As Samsung became competent in manufacturing, the focal point for building competitive advantages shifted in the 1980s to quality. Continued advancement on the technology ladder enabled Samsung in the 1990s to emphasize technology and innovation as the source of competitive advantage. Although the focus has shifted from cost to quality and then to technology, throughout Samsung Electronics Corporation's history, price has remained the most powerful tool to keep the company's competitive edge in the market.

In fact, one of the most important strategies to which the entire Samsung Group subscribes is the principle of survival inequality, which means that cost should always be lower than price, which in turn should always be smaller than product ...