SAMSUNG’S MARKETING

STRATEGY IN INDIA

Marketing strategies of Samsung in India (consumer

durables)

Scenario in the consumers Durables sector:-

Prior to liberalisation, the Consumer Durables sector in India was restricted to a handful of
domestic players like Godrej, Allwyn, Kelvinator and Voltas. Together, they controlled
nearly 90% of the market. They were first superceded by players like BPL and Videocon
in the early 1990s, which invested in brand-building and in enhancing distribution and
service channels. Then, with liberalisation came a spate of foreign players from Samsung
to LG Electronics to Sony to Aiwa.

Both rising living standards, especially in urban India, and easy access to consumer
finance have fuelled the demand for consumer durables in the country. Also, the entry of a
large number of foreign players means the consumer is no longer starved for choice. But
this has also resulted in an over-supply situation in recent times as growth levels have
tapered off.

Major players:-
The major players in the consumer durables industry, operating in different sectors such as
air conditioners, washing machines, refrigerators & television include:
Blue Star Ltd., Mirc Electronics Ltd., Whirlpool of India Ltd., Philips (India) Ltd., BPL
Ltd., Sony Corporation Ltd., Samsung India Ltd., LG Electronics India Ltd., Videocon
International Ltd.

Entry of Samsung in India

Emerging Markets (EMs) with large consumer bases and untapped demand constitute the
major growth opportunities for the multinationals and global companies. However, not all
companies are successful in establishing a foothold, leave alone operating profitably, in
such markets. For most, it takes years of struggle before they can even breakeven.
Marketing is difficult in such EMs because of little or no market data, non-existent or
poorly developed distribution systems, lack of regulatory discipline, and where regulations
exist, a propensity to change them frequently and unpredictably.

Samsung entered India in December 1995 as a 51:49 joint venture with Reasonable
Computer Solutions Pvt. Ltd (RCSPL), owned by Venugopal Dhoot of the Videocon
group. In 1998, RCSPL diluted its stake in Samsung to 26% and in November 2002, the
FIPB cleared Samsung's proposal to buy RCSPL's remaining (23%) stake. With Samsung
buying the total stake of RCSPL, it became a wholly-owned subsidiary of its South Korean
parent company. In spite of being a latecomer to India, Samsung was able to become one
of the top consumer electronic companies in India, an emerging market was due to a
combination of several aspects: Product innovation, Promotion, Pricing, distribution and
Positioning; wherein Samsung primarily focused at.

The three-pronged objectives of Samsung are: -

1) Strengthening their channel relationships,
2) Enhancing their product portfolio and
3) Creating the best service infrastructure, to gain more mindshare."

A. Positioning:-
Many multinational companies adopt a “less developed countries” mindset, assuming that
these markets are at an earlier stage of the same development path followed by the
developed countries.

• Sport-based strategy (A major sponseror of Olympics):

Entering into the “TOP” plan propels Samsung’s sponsorship to a new era. It has an opportunity to
act on the same stage with the world top brand such as Coca Cola, IBM, and Visa, which greatly
enhanced its brand image. The company’s active and established role in the heart of the Olympic
Movement has contributed to its brand value surge in recent years.
Samsung have agreed to pay the hugeamount for corporate sponsorship because they
recognize the vital importance of sports marketing on their bottom line. The TOP plan helped
Samsung increase its brand awareness and enhance market position considerably. Compared to the
results of the survey held before the Sydney Olympic Games, the amount of consumers that
became aware that Samsung Electronics was one of the 9 sponsors of the Games approximately
tripled. Unaided awareness of Samsung’s “Olympic sponsorship” was 6.0%, it placed 2nd after
Coca Cola

Samsung want to accomplish two goals with all its sponsorship efforts:
 To build brand awareness especially create higher level of awareness than its rival
Sony. (The effectiveness of Samsung’s Sponsorship was shown at the ATHENS 2004
Olympic Games which had a positive impact on brand awareness, with an increase
from 57% to 62%.)
 The second goal is to enhance the worldwide imagery and attitudes towards its
brand.

Samsung considered its commitment to the Olympic Movement is a key

element in positioning and strategy

Few Brand building efforts at the olympics:

1.Athens torch:

Samsung first started this trend of sports brand by sponsoring ATHENS 2004 Olympic Torch
Relay, which was the first truly journey of Olympic flame. 1,900 torchbearers were selected from
over 40 countries including Samsung’s employees.They received emotional benefits from pride in
being associated with the sponsorship and have a direct link to the Olympic activities.

2. OR@S:

As a part of Samsung’s brand presence program it set up Olympic Rendezvous @ Samsung, a

1,064 square meter entertainment complex, located within the Athens Olympic Sports Complex,
which was a central gathering place for athletes, their families, and the spectators coming to the
Games. The OR@S provided a wide range of activities. For instance consumers were provided
with the opportunity to try out Samsung’s revolutionary products for themselves. Fans are able to
meet their national heroes, enjoy musical performances and special laser shows. During the Games
Samsung has hosted a series of "National Days", which celebrate themany cultures of Olympic
nations. In addition, OR@S provided free telephone and on-line services. Over 6,000 athletes
from a huge number of the 202 competing countries have based themselves here and taken time
out from the pressure of the Games to make contact with home. (Over 6,000 Olympic competitors
make use of special facilities to contact loved ones, 2004). At the same time they are experiencing
the convenience Samsung brought to them.

3. Creating Brand association:

The Olympic Games as the world’s biggest sports event requires enormous and sophisticated
communication system. Samsung, an official sponsor in wireless communication equipment
presented the Wireless Olympic Works (WOW), a communications system to support and
guarantee the smooth and efficient running of the event. It also provided wireless communication
devices to athletes, officials, media, staff and volunteers. Samsung’s expertise in digital wireless
communications equipment played a vital role in contributing to the successful operation of the
Games. Besides the functional association, it enhanced its market leader image and revealed its
status of a global organization through the prestigious Olympic Games

• Technology innovation:

In the case of Samsung, the company from the very beginning launched its whole range of
high technology products, which included CTVs, audio and video products, information
technology products, mobile phones and home appliances in India. It introduced products
such as the ‘Bio’ range in CTVs, high-powered Woofer series of colour televisions in 21-
inch and 29-inch conventional and 21-inch flat TV segments. And not to forget the lateset
DNie television.

By positioning itself on the technology platform, Samsung was able to differentiate itself
from its competitors. Differentiation today is the key for a brand to be preferred by the
consumers, when there are so many other brands within the same product category.
Without differentiation, its loyal customer base cannot be created or sustained. But to be a
true differentiator, a company must provide features that are meaningful to customers.
Which is what exactly Samsung has been doing.

B. Products: -
According to Samsung India Deputy Managing Director, Ravinder Zutshi,

“The current strategy is to gain greater reach

among the masses - not through pricing, he insists,
but through product innovation and at the same
time build brand support. We are providing
superior technology and differentiated products
even for the mass market with quality promotion.”

Samsung’s product range in India includes CTVs, video products, information technology
products, mobile phones and home appliances. Its product range covers all the categories
in the consumer’s electronics and home appliances. According, to the analyst’s wide
product range of Samsung is one of the main reasons for its success in the Indian market.
The wide range products are as follows: -

• Home appliances
• Microwave Oven
• Refrigerator
 • Air Conditioner
• Washing Machine

• TV, video & audio

• TV
• DVD Player
• Camcorder
• Audio
• Home Theater
• Digital Audio Player
• Digital Still Camera

• Mobile Phones
• GSM
• CDMA

• Information technology products

• Note PC
• HDD
• CD Rom & DVD Rom Drive
• CD & DVD Read & Write Solution
• Monitors
• Laser Printers & Laser Based MFPs
• Fax

Samsung by launching innovative products and using proprietory technology was able to
gain market share. Samsung has therefore set up Samsung India Software Centre (SISC)
and Samsung India Software operations unit (SISO) for software development at Noida
and Bangalore respectively. While the Samsung India Software Centre in developing
software solutions in Samsung’s global software requirements for hi-end television like
Plasma and LCD TVs. SISO is working on major projects for Samsung Electronics in the
area of telecom: wireless terminals and infrastructure, Networking, SoC (System on Chip)
Digital Printing and other multimedia/digital media as well as application software. In
addition to working on global R&D projects, SISO is also helping Samung India’s CDMA
business by focusing on product customization for the Indian market.
Market Share: -
Products Brand 2004 2005

Washing LG 31.9 35.1

Machine Samsung 14.6 13.4
Videocon 14.8 13.9
TV LG 24.2 26.7
Samsung 16.4 15.4
Videocon 10.1 11.00

• Washing machine :

30
25
20
LG
15
Samsung
10
Videocon
5
0
2004 2005

• Television:
40
35
30
25
LG
20
Samsung
15
Videocon
10
5
0
2004 2005

Product features:
To sell a consumer durable product a company has to provide unique features i.e. features
which other companies are not able to provide. Samsung has been using the same strategy
to boost their sales. Samsung provides its consumers with wide range of products with
unique features.
For example, Samsung was the only company offering a 1000 watts PMPO sound output
in the 21-inch flat TV segment. It also introduced a new 5.5 kg, top loading fully automatic
washing machine with features like ‘saree course’ keeping in mind that the majority of the
Indian women wear sarees.

Refrigerator:-
• Bio Ceramic Technology(Bio Fresh Refrigerators)

BIO FRESH prevents evaporation of moisture, cell activation; supports antibacterial

function and also prevent the alteration of proteins. This keeps the food fresher for a longer
time. At the heart of Bio-Fresh refrigerators is Bio Ceramic technology. Ceramics form a
part of the raw materials used in the manufacturing of the Vegetable compartment.
Ceramics have the unique property of emitting 'Far Infrared Rays' (FIR). The FIR helps
retain the moisture content in the vegetables, fruits and other natural products as they are in
the natural resonant frequency of water molecules. The 'FIR', in combination with
technologies like the Bio-Deodorizer, Dynamic Super X Flow cooling system with i-cool
and Humidity Controller makes the Samsung Bio-Fresh refrigerator one of the most unique
products in the Indian market today.
Bio-Vegetable Box is made of the newest Bio-Ceramic material. Bio-Ceramic material
radiates far-infrared rays, which help retain the moisture content in vegetables, fruits and
other natural products, keeping them rich in nutrients and essential vitamins for a longer
period of time.

• Super X Flow technology

The Samsung 250 NMB incorporates the Dynamic Super X Flow technology. This
technology sets up a smart cold air distribution system to maintain an even temperature
throughout the refrigerator! This effectively achieves three clear benefits: Even
Temperature, Quick Cooling and Energy Savings.

• Samsung's Twin Cooling System

Samsung's Twin Cooling System controls and generates cooling air for the refrigerator and
freezer independently with two separate evaporators and precise electronic control, thus
maintaining each compartment at their optimal cooling conditions.
This results in a more efficient refrigerator with powerful performance!
 Electricity Consumption Comparison

These features reduce energy consumption by 30%, compared to previous models, with a
high efficiency compressor and better insulation (A class: ISO standard)

Another Freezer in Refrigerator Compartment

The Twin Cooling System allows the CoolSelect Zone to maintain -5ºC (Soft Freeze
mode) in the refrigerator compartment. While food stored in the freezer is not easy to
handle, the Soft Freeze mode sets the temperature low enough for easy slicing and allows
medium-term storage. This is only possible by the Twin Cooling System.

• i-cool TM

The i-cool system is an intelligent cooling system with three cold air outlets-at the back, on
the right and left sides of the refrigerator interior. Cold air is evenly distributed with
multiple outlets on every shelf level. I-cool multi-flow has more air outlets than the general
multi flow technologies. This further ensures that as compared to conventional frost-free
refrigerators the Samsung i-cool is more efficient both in terms of cooling and power
consumption. With cold air flowing from three sources, the i-cool system cools 40% faster
and 50% more improved even cooling than a conventional cooling system.

Washing Machine:-
• TORNADO PULSATOR:-

SUPER DRY: -Samsung introduced India's first Semi Automatic Washing machine
with a SUPER DRY Feature. The SUPER DRY Feature provides a 10 minute Spin Dry
Timer, which gives you the power to ensure that your clothes get the BEST POSSIBLE
DRYING. SUPER DRY is great value; especially for the Monsoon and winter months,
when clothes don't dry easily. This powerful feature is available on the latest models
launched recently - WT9300, WT9200, and WT7800. While all other brands will provide
the standard 5 minutes Spin Dry Timer, these models give you EXTRA DRYING for full
10 minutes.

I-CONTROL SYSTEM:- The Samsung Washing technology is designed to put you in

control of the washing process, and the machine action. Samsung Washing Machines are
packed with an array of incredible features that come together to make the I - control
system. These include the ‘ECO Wash - that saves water and detergent’, ‘Child Lock -
To limit small children with tampering settings and getting hurt’, ‘Auto Restart - that
saves you the bother of restarting the washing machine each time the power fails’,
‘Memory backup- enables the washing machine to remember programmed wash cycles
and settings’, ‘Delay Start- To enable you to time the washing machine with your water
 supply and other chores’ and ‘Fuzzy Logic - that makes the washing machine intelligent to
adjust automatically to wash loads, water and detergent levels’ etc. These 6 amazing
technologies come together to put you in total control and command of the washing
machine and the wash process

HYDROJET WASHING TECHNOLOYG: Samsung Hydrojet gives you a combination

of three powerful washing actions:
Waterfall Flow: Strong flow of water that streams down from the top. Pushing heavy and
light clothes towards the pulsator.
CentreJet: A strong gush of water formed right at the center of the washing machine,
forcing the dirt out of clothes. This also ensures that the clothes do not get entangled at the
center.
Water Pores:- Saves water and detergent and washes clothes from all sides.

BIO WASH TECHNOLOYG: Clothes washed in Samsung Washing machines are not only dirt
free, they are also 'germ free'. Samsung has developed this unique Bio-Wash Technology to ensure
just that. The Bio-Pulsator is made from some percentage of Bio - Resin, which destroys germs
and keeps the environment inside the washing machines, pure and germ free, wash after wash.

Air conditioners:-
• Turbo power: {BRINGS INSTANT RELIEF FROM HEAT}

The Turbo function makes the AC operate under full power for 30 minutes, irrespective of
the set temperature, which leads to quick change of the room temperature, instantly
bringing the air-conditioning comfort in the room. Turbo operates faster than the
conventional system. The new compact range of Samsung Window ACs not only occupies
lesser window space but also are more aesthetically appealing.

• Quick power optimizer: {ENSURES LOW ELECTRICITY BILLS}

The Samsung Split Air conditioner’s 5-Step Heat Exchangers have 122% larger surface area.
Samsung Window Air conditioners are equipped with a 3-row cooling coil and L bent condenser
coil that provide a larger surface area helping the refrigerant to dissipate heat faster. This results in
faster chilling and lesser strain on the compressor resulting in lower electricity bills.

Micro Oven:-
Bio Ceramic Technology: Only Samsung Microwave Ovens come with a unique Bio
Ceramic Enamel coating. Bio ceramic enamel produces less oxidation, which helps retain
essential vitamins while cooking. The ceramic enamel retains 2.5 times more heat than
stainless steel, leading to faster cooking.

High scratch resistance: Bio Ceramic Enamel’s durability and protective qualities make
it far more scratch resistant than other microwave interiors. When scratched with equal
force, the roughness of the ceramic enamel surface increases only 7.5% compared to 106%
for the stainless steel.

Higher nutrient retention: Food cooked in Bio Ceramic enamel cavity microwave ovens
retains significantly greater amounts of vitamin C and F (an essential fatty acid that helps
reduce cholesterol and blood pressure) than food cooked in conventional stainless steel
cavity microwave ovens.

Exclusive Feature: 3D Showerwave

Unlike other Microwave Ovens, only Samsung Microwave Ovens come with the unique
3D Showerwave System, which helps to distribute heat evenly, enabling uniform cooking
horizontally and vertically.

Television:-
The Samsung 70-inch PDP TV (Plasma Display Panel) and at 54 inches is the world's
largest thin film transistor liquid crystal display (TFT-LCD) television and offers the
highest picture resolution available anywhere in the world.

The 70-inch PDP delivers high-definition imaging from over two million pixels - a
resolution twice the clarity of other models on the market today. Samsung has also applied
its proprietary Digital Natural Image engine image-enhancement technology to ensure the
highest quality possible image in terms of picture brightness and contrast.

Samsung's 54-inch TFT-LCD TV features a crisp, high-resolution image and excels in

performance that ensures a smooth playback of the most action-packed visual content. The
1920 x 1080 resolution and 16:9 aspect ratios can accommodate future changes in high
definition broadcasting. These advanced features and unprecedented screen size, combined
with inherent crisp display characteristics of TFT-LCD, make this 54-inch TFT-LCD TV
one of the most advanced display products available today.
India’s first wireless home theater (Bluetooth technology):

Samsung India Electronics Ltd. has introduced India’ s first wireless home theater, Model
No. HTDB390 in the Indian market. The wireless Home Theater in Box (HTiB) uses
bluetooth technology to provide a wireless connection to the rear speakers of the 5.1
channel speaker setup - eliminating the need for rear wires, and giving the user total
freedom to setup the rear speakers.

Wireless HTiB - rear speakers totally remove the hassles of wiring up the home theater.
Extremely convenient they embody the concept of HTiB (Home Theater In Box) - since a
user can literally take the system out of the box and place the speakers around his/her room
to create a Home Theater. Add to the feature of "no-wires", the Samsung exclusive sDSM
feature that calibrates sound from each speaker at the touch of a button to give the best
sweet spot - and this Home Theater provides a never-heard-before audio experience.

DVD:-
The highlight of the Samsung DVD Range is the Hypervision DVD, HD 938, which is the
world’s first and only HDTV compliant DVD Player. The Hypervision DVD utilizes the
world’s first digital visual interface (DVI) output to transmit uncompressed digital video
signals without any analogue conversion, preventing image quality loss. This results in
viewers being able to enjoy high definition quality picture quality even for standard DVDs.

Bio Colour Televisions:-

Samsung India Electronics Ltd. has launched a new, advanced Bio Range of colour
televisions in the Indian Market. Termed as the Only Healthy TV, the Samsung Bio TV
has Samsung's internationally patented Bio Ceramic Coating on the Picture tube that emits
Far Infra Red rays when switched on. The FIR rays are known as "Light of Life", since
they have been used for centuries by medical practitioners for their therapeutic and
curative properties. The FIR Rays penetrate the skin of the viewer and get absorbed by the
human body, leading to the release of body toxins, enhanced metabolization and increased
micro blood circulation. Thereby, improving the immunity and protecting the entire body.

The Bio TV has also been physiologically tested to increase alpha ray emission from the
brain, which indicates a state of relaxation. The Health benefits of the Samsung Bio TVs
have been certified by the Indian Board of Alternative Medicine.

Silver Nano Technology:-:

Silver Nano has been developed by Samsung Electronics researchers who worked for three
years to perfect the technology. With over US$10 million invested in R&D, Silver Nano is
the first technology that combines the disinfectant and antibiotic properties of electrolytic
silver nano-particles (Ag+) in washing machines to remove 99.9% of bacteria.

Set on "Silver Wash", the washer's sterilization system generates silver particles that kill
off bacteria and mold in the laundry load without bringing the water to a boil. Thus, less
electricity is needed to achieve a hygienic effect. This process also treats the inside of the
washing machine tub to kill bacteria and mold, suppressing the odor and contamination
that accompanies their formation.

When the machine is set on "Silver Sterilization" mode, the laundry load is covered with
Silver Nano particles during the rinse cycle. After the washing is complete, the clothes
have been found to be totally devoid of bacteria and will remain so for up to 30 days,
earning the "Sterilization Mark" from the Korea Testing & Research Institute for the
Chemical Industry.

Silver Nano is incorporated into refrigerators by coating the inner surface to keep germs
from growing. By keeping the cooling environment germ-free, food stays fresher for up to
15 days longer and a Silver Nano deodorizer keeps bad odors from affecting food taste.

Air conditioners have a Silver Nano filter that keeps germs from growing inside the
machine and prevents allergy-causing bacteria from being blown into the air. Silver Nano
coatings greatly reduce the presence of fungi and bacteria within five minutes of operation.

DNIe Technology:-
Digital technology leader, Samsung India Electronics Ltd. today announced the launch of its
revolutionary ‘Samsung DNIe Vision’ range of Flat colour televisions on 7th April, 2005. The
Samsung ‘DNIe Vision’ range comprises of 15 new models in 15’’, 21’’ and 29’’ size categories.
The DNIe Vision Range from Samsung delivers performance that is much superior to
conventional televisions on account of the DNIe technology. The new technology produces
complete image quality; any signal input comes out cleaner and more natural. DNIe can
completely eliminate blurring from movement or image prolongation. A deep contrast can also be
achieved. What is more, the finest detail appears sharp, while the vivid natural color is most
pleasing to the eye.

DNIe Technology in a Nutshell

Samsung’s unique DNIe technology encompasses four functions that analyze all
signal input, from analog to high definition, in stages. The volume of noise in the
signal is detected and the signal level is classified according into analog, SD or HD
and then optimized accordingly.
Motion Optimizer: Processes Noise More Completely than Ever Before
This noise processing technology integrates temporal and spatial concepts to ensure
clear images even when the motion is very fast.

Contrast Enhancer: For a Deeper Contrast

This technology employs a contrast ratio of one million or more and a new algorithm
that can reproduce the optimal contrast to provide a deep and rich image quality.

Detail Enhancer: Complete Images, True to the Finest Detail

A vastly improved technology for automatically analyzing the picture signal
reproduces images in amazing detail, resulting in more lifelike video.

Color Optimizer: Vivid, Natural Colors

The video signals being generated are analyzed and the quantities of reds, greens
and blues are calculated to provide the colors most natural to the human eye.

C. After Sales Service :-

Offering advanced technology products and positioning itself on the technology platform will not
help a company sell its products if it fails to give proper after-sales-serfvice. With a focus on
strengthening the satisfaction level of the consumer, Samsung India Electronics Ltd (SIEL) has
launched its 3S — Speed, Smile and Sure — campaign.

As part of this customer service program, the company is working on a two-pronged strategy. This
involves: one, improving the service infrastructure by setting up customer service plazas in key
metro locations; and two, improving the skill levels of technicians by setting up a training school
with a technical evaluation system for after sales service engineers.

Till now, most of the players in the sector have been professing that it's the relationship with the
customer that matters. However, with the competition increasing, customer satisfaction is fast
becoming a core issue,'' an industry analyst pointed out. He further stated that Samsung's current
effort ``will also strengthen its customer base as most of the players claim that 60 per cent of their
sales is repeat purchase.''
D. Promotion:-
Offering advanced technology products and positioning itself on the technology platform
will not help a company sell its products if it fails to communicate properly with
the potential customers. To raise brand awareness and create strong, favorable
and unique brand associations, Samsung adopted various marketing strategies
like celebrity endorsements, corporate advertisements, highlighting its
technological superior goods and many promotional schemes.

E. Advertising: -
Samsung is involved in aggressive marketing and advertising of its product to develop
attitudes, create awareness, and transmit information in order to gain a response from the
target market. Their main advertising channels include 'media' such as newspapers (local,
national, free, trade), magazines and journals, television (local and national) cinema,
outdoors advertising (such as posters, bus sides). The initial advertisements communicated
presence of Samsung in worldwide markets and its dominance in those markets. To
increase its brand awareness, Samsung went in for celebrity endorsements. Initially, the
company signed Hindi film actress, Tabu, to endorse its brand. Till 2002, Samsung’s ads
focused on the technological supremacy of its products. But by late 2002, in addition to the
technology plank, the company started advertising on the plank of ‘passion for country’
and sports (cricket and football). Its latest ambassador is John Abraham for its mobile
phone and Rahul Dravid for its Television range.

F. Sales Promotion:

Along with advertisements, Samsung also focuses on promotional schemes to increase its
sales. In October 2001, Samsung launched its highly successful promotional scheme, the
Samsung Phod ke Dekho Offer. This offer instantly boosted the sales of the company
generating sales of Rs. 2.75 bn from this offer. The campaign was launched on an all India
basis during the festival season. Under the scheme, consumers who bought any Samsung
product were given a tamper proof plastic coconut with three coins in it. One out of every
10 coconuts had a lucky coin with a gift printed on it. As a part of the campaign,
Samsung’s brand ambassador, Tabu interacted with the customers and dealers of Samsung
in Bangalore and Chennai and handed over the lucky coconuts to select Samsung
customers. The prizes included products from the Samsung range.

The Phod ke Dekho offer was followed by another promotion scheme in May 2002,
Dabake Jeeto offer coinciding with the football World Cup. During the promotion every
customer who purchased company’s electronics or home appliances product got plastic
football with an alarm clock in it. The customer had to press the football from the top, and
was given the free etched on the tamper-proof anodized sticker. Under this campaign,
Samsung gave out gifts worth Rs. 100 mn, which included Samsung digital flat TVs, frost
free refrigerators, microwave ovens, Karisma washing machines, mobile phones, cameras
and Soccer 2002 official licensed T-shirts from Adidas. This campaign notched up sales
worth Rs.310 Crores during the period of the Promotion.

The next major promotional campaign was the Phir Se Phod Ke Dekho offer. The offer
was launched during October-November 2002 generating a sales of Rs. 380 crores. It was
a repeat of the earlier ‘Phod Ke Dekho’ campaign.

On March 20, 2003 Samsung Launched 'Samsung Rang De Kismat Offer' for Frost Free
Refrigerators which entitled a customer to Lucky Gifts worth Rs 4 Crores, with the
purchase of any Samsung Frost free Refrigerator. This Promotion derives its name from
the 'Rang de Kismat' glass, which was handed over to a customer with the purchase of any
Samsung Frost Free Refrigerator. The Customer needed to pour chilled water into the glass
and wait for the 'Bio' logo on the Glass to change colour to find out the gift won by
him/her. There were Colour Codes for types of Gifts won by the Customer - For example,
a Green 'Bio' entitled a customer to a Samsung Microwave oven while a Red 'Bio' gets the
Lucky winner a Gift Voucher from Tanishq worth Rs 30,000. This offer was launched to
capitalize on the sales of its Frost free refrigerators in the summer months. The Company’s
market share went up to 21% in the Frost free refrigerator market after the offer.

Following its success with its 'Samsung Rang De Kismat Offer' Samsung India come up
with another innovative Consumer Offer “Samsung's Bundling Offer with Reliance
IndiaMobile” for the buyers of its Consumer Electronics and Home Appliance Products in
the Delhi and NCR Region on 25 July, 2003. A buyer of any Samsung Consumer
Electronics or Home Appliance products gets the option of walking away with a sleek,
advanced Samsung Mobile Phone N191 model along with a Reliance IndiaMobile
connection, without having to pay any activation charges. Furthermore, the user gets free
talk time worth Rs.600 over a 6-month period. All other payment terms are the standard
billing terms and conditions offered by Reliance IndiaMobile depending on the package
taken up by the customer.

On 6 October 2003 Samsung India Electronics Ltd launched its mega festival promotion
called ‘Samsung Pinning Toh Winning Offer’ on an all India basis. In this Promotion,
where the consumer stood to win an assured gift on the purchase of any Samsung product,
have gifts worth Rs. 100 crores to offer as prizes. The offer entitled the buyer of a
Samsung product, a card with a unique 16 digit alpha-numeric code. All the consumer had
to do is SMS “SAM” followed by the 16 character code to 8888 and s/he would
immediately get a message showing what gift has been won. The Gifts won in the
Promotion include; Samsung Projection TVs, Samsung Mobile Phones, Samsung Yepp
Disc Players, Samsung DVD players, Titan Fast Track Glares, Touch Screen Landline
Phone, Trendy Portable Travel Iron and Britannica Encyclopedia 3 pack CDs.This offer
was basically launched to maximize its sales during the festival season.

Following its success with its ‘Samsung Pinning Toh Winning Offer’ Samsung India
Electronics Ltd launched ‘The $-DOLLAR Program’ for its IT Reseller and System
Integrator fraternity on June9, 2004. The program meant for the System Integrators (SI)
was applicable on Samsung monitors, Hard Disk Drives (HDD) and Optical Media Storage
(OMS) products. Each time a SI/reseller purchases Samsung products from a Samsung
Star Elite or Samsung Storage Preferred Partner (SSPP), the SI was issued a cheque. The
cheque was of one of the four colors – White, Blue, Silver, Gold – depending upon the
products bought.

Samsung believes that its SIs and re-sellers play a pivotal role in business growth. They
are the ones who provide them the edge that they need in today’s competitive marketplace.
This is why they have spearheaded revolutionary programs for them ensuring healthy
growth in revenues and profitability.

The last sales promotion offer was launched on Feb 3, 2005 called “Fastest Finger First”
which was a nation wide contest to find India’s fastest SMSer. The message to be typed
reads as follows: “The razor-toothed piranhas of the genera Serrasalmus and Pygocentrus
are the most ferocious freshwater fish in the world. In reality they seldom attack a human".
This SMS had to be typed on the cellphone keypad, complete with punctuation marks and
lower & upper case. No predictive text (T9 Dictionary), QWERTY keyboards/ any
keyboard was allowed.

 A summary of the various promotion schemes taken up :

YEAR STRATEGY SALES

Oct 2001 “Phod ke dekho” offer Rs.2.75bn

May 2002 “Dabake jeeto” offer Rs.310cr
Oct-Nov 2002 “Phir se phodke dekho” offer Rs.380 cr
March 2003 “Samsung rang de kismet” offer
Oct 2003 “Pinning toh winning” offer
June 2004 “The $-dollar programme” offer
Feb 2005 “Faster finger first” offer

G. Sponsorship:-
Apart from the Olympics series of MAJOR sponsorships, Samsung was the sponsor of
Lakme India Fashion Week held on April21, 2005. Team Samsung cricketers - Irfan
Pathan, Mohd. Kaif and Virendra Sehwag launched the World’s Best Handset, Samsung
D500 during the Samsung Show at the Lakme India Fashion Week. The theme for the
Samsung Show was ‘The Best Thing Says Everything’ in keeping with the positioning of
Samsung D500 - Samsung’s latest and path-breaking mobile phone which has been rated
as the ‘World’s Best Mobile phone’ by the 3GSM Association World Congress held at
Cannes in February 2005.

Samsung sponsored Samsung & MTV Youth Icon 2005 on June10, 2005. The idea
behind the sponsorship was that the Samsung Mobiles were targeted at the fun loving,
lifestyle oriented and trendy youth of today. By associating with the Samsung & MTV
Youth Icon, they are seeking to further strengthen their relationship with the youth.
Samsung mobiles make a style statement and by partnering with the Youth Icon, this
positioning is further re-inforced.

Samsung was even the sponsor of Samsung IIFA Awards held on June 13, 2005. Popular
film actress, Preity Zinta was awarded the ‘Samsung Diva’ award while Hrithik Roshan
was conferred the prestigious ‘Samsung Style Icon’ award at the Samsung IIFA Awards
2005. Samsung India had carried out an online voting process on the Samsung India
website between May 20th - June 5th 2005 for selecting the recipient of the ‘Samsung
Style Icon’ and ‘Samsung Diva’ awards. The same was also promoted extensively on other
sites like indya.com and msn.com as well. The Company received a phenomenal response
to this online voting contest. “The ‘Samsung Style Icon’ and ‘Samsung Diva’ awards
which have been growing in popularity year on year, the company uses the response level
received every year as its popularity indicator.

Direct Mail:-

Samsung even uses Direct Mail concept for its product promotion. Samsung sends mail to
target consumers depending on the database i.e. the frequency of site visit and on their
purchases. Samsung is very actively involved in e- commerce.

Distribution Channels:-
Recently , 17 new sales offices have been opened at various places all over India to look after satisfying the expectations of the customers
Samsung uses supply chain to enhance differentiation, increase sales and penetrate new
markets and channels. Its supply chain is beneficial in several ways. It helps the company
to deliver products to the customer faster. It efficient supply chain is transparent, so that all
the players in the supply chain have the right information at the right time about the
movement of the products within the chain. This means lower inventories, elimination of
waste, and reductions of costs. In addition to the intangible benefits like quick feedback
from customers help in launching new products.

Samsung has 24 state-level distribution offices and a direct dealer interface. The direct
dealer interface helps the company to get quick feedback from dealers, and enables it to
launch products according to consumer needs. To minimize time overruns, Samsung
delivered its products directly from its factories to its Regional Dispatch Centers (RDCs),
and from there to dealers. Samsung has sales and service networks all over India and 650
service points.

Samsung has implemented an innovative logistics system – Global Logistics Network

Systems (GLONETS). GLONET application is used on the B2B i.e. Business to
Business front for the vendors. This involved linking the key vendors, which form the bulk
of Samsung’s sourcing (26 domestic and 30 international) through Samsung’s GLONET.
This system enables Samsung to connect its purchase department with the Samsung
headquarters and international procurement offices through integrated ERP systems. The
integrated ERP system enables Samsung to purchase its requirements from its international
procurement offices and also from its Indian vendors. This application is also extended to
order placement, production plan sharing and invoicing, resulting in shorter business
cycles and reduced inventory levels and low waste.

In addition to GLONETS, Samsung also believes in JIT (Just-in-Time) concept to its

dealers. To make delivery of products within 48 hours of the expected date of delivery, the
company has setup four RDCs, one at each regional location of the country.

The distribution channel is structured very systematically wherein all the transactions and
business conducted is documented. The program is based on incentives so that dealer
payments can be made on time. The Company supplies its goods to the Star Elite who
supplies goods to the distributor who in turn sell the goods via their own channel of
retailers and distributors. The Samsung Brand shop network complements the over 8500
retail points for Samsung products located across the length and breadth of the country.
Samsung plans to continue enhancing its penetration levels in the country to reach out to
more and more Indian consumers. They consider the Star Elite partner as their actual
product champion as their link with the end customer. As, they have been adding value to
the sale to the customer and guiding him to the right purchase decision at a fair price.
Shop-in-shop: Samsung is ensuring a presence in most big malls and multiplexes; even in
the multi-brand outlets, as the focus there is to create a shop-in-shop atmosphere.

The exclusive showrooms:

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.Keeping its target customer to display
Samsung products in a more lifestyle ambience and to communicate the product benefits in
a more interactive manner, Samsung India has set up a widespread network of exclusive
showrooms comprising Samsung Digital Zone (focusing on high-end digital audio-video
products such as MP3 players, camcorders and LCD/plasma TVs). They are trying to
create a more interactive environment and providing a more lifestyle orientation to the
display, so that the customer can visualize the products in his/her own home settings.
The demands and needs within the distribution channel lead to the establishment of
MyMemoryStore.com. The site is more than an ordinary selling site, infact it is an industry
portal that allows the business partner to come in and track the relevant industry
information within the channel, meaning minimizing the inventory overhead.

Samsung is also planning to invest over $1 million in setting up a chain of exclusive

outlets called `Samsung Talkies'. The entire Samsung mobile range including the latest
handsets will be displayed at the outlets, which will be set up in more than 10 cities across
India, including Bangalore, Mumbai and Hyderabad.

Distribution Channel in 2005:

Post VAT they have modified in their policies a bit.

The most important step was to bring down channel inventory post the Budget impact and
the VAT impact. They made a conscious decision to bring down channel inventory, which
was at that point of time 60 days, today it is reduced to 11 days, which entails total
inventory among dealers, distributors, star elite and SI. This has been done to ensure that
the channel stays profitable.
Samsung India tied up with PlanetM for displaying its new audio range at the PlanetM
Outlets in Delhi, Mumbai, Kolkata, Pune, Chandigarh and Bangalore.

Pricing:
Pricing also seemed to have played a significant role in Samsung’s success. Differentiation
is the key for a brand to be preferred by consumers, when there are so many brands within
the same product category. Samsung believes in providing good products at reasonable
prices to its customers. Samsung’s technology plank communications helped the company
to gain market share, even though it did not offers any discounts or exchange scheme when
it entered India. Samsung focuses on cost-cutting measures to keep its price low which
helps to combat the discount schemes of the local companies.

For e.g.- In 2001, due to high competition in the 20”CTV segment, Samsung had to resort
to price cuts. The company said that value engineering, new product lines and new chassis
development had contributing in combating price erosion. Samsung negotiated with its
vendors to reduce costs on cabinets, plastics, speakers, harness coils, remote controls, etc.
Samsung’s Brand image seemed to have helped it survive the price erosion. Dealers also
agreed to lower margins owing to company’s brand image.

Samsung in the year 2002, drastically reduced its operational costs which enabled the
company to keep low prices for certain products and extract higher profit margin from
premium products. This helped Samsung to post a turnover of Rs.30bn, a 2 growth from
the year 2001.

Samsung is very transparent in functioning. It has a fixed MoP (Marketing Operating

Price) whereby the goods are sold to the distributors and to the customer’s at a fixed
market price only.

The focus of its competitors is to penetrate in the rural and semi-urban mass markets. But
Samsung insists that it's a high end technology driven player. That's why the urban areas
are still a focus area for it and only 30 per cent of revenue comes from rural and semi-
urban India. They have always been a hi-end technology driven player and want to keep
that equity.

Not surprisingly, the target customer for Samsung products won’t be found in the price-
sensitive mass market. Adopting the lifestyle product platform, Samsung’s aiming for the
high-end premium market. Hence Samsung has always been keeping premium prices.
Samsung claims it’s never been a price warrior — its focus has always been on the
premium market, which is why it has remained a steady No. 2 or No. 3 player in most
product categories.
It is difficult to achieve the ambitious targets keeping in mind the pricing strategy of
Samsung. But, they believe that it takes time to ensure your supremacy in market share.
Once you get your brand perception right in the minds of the consumers as a brand that
delivers the best technology and gives you value for money, then ultimately market share
goes up.

Later on Samsung changed its policy a bit and instead of just remaining a high-end
technology driven brand it tried to change its image to sell products to the huge number of
middle income families in India. It started pricing its products on the “value for money”
concept, keeping in mind the price sensitivity of Indian consumers.

But still Samsung has the repute of being a premium brand, aggressive in launching newer
models with the latest technology and at economic costs throughout the world

Pricing Strategy Post VAT

Post Budget, they have ensured that there is no discounting in the market and also the
prices of OMS had to be increased by 4 percent since price stability is of fundamental
importance in channel business. This is the biggest marketing stand that the brand could
have taken as the brand stands above individuals and the transactions that happen.

Price range: -

SAMSUNG LG
• Mobile Phones:-
GSM – 3,649-21,399 4,800-28,000

• TV, video & audio:-

TV:-
Projection TV
LCD Projection TV - 69,000- 109,000 89,990-99,990

Flat Panel
Plasma 265,000- 9,0,000 2,95,000-7,50,000
LCD TV- 59,990- 265,000 75,000-1,69,900

Flat TV
29 inches- 19,990- 31,990 20,290-37,990
21 inches- 8,990- 17,690 9,190-11,990
15 inches- 6,890- 8190 7,990-10,500
 Conventional TV
21 inches- 13490 7,990-8,990
20 inches- 7690- 8990 7,890-8,890

DVD Player:- 3,990 – 5,000 3,990-4,990

Audio:-
VCD System - 9,900- 26,990 8,500-26,990

DVD System - 16,200- 25,990 13,990-29,990

Home Theater: - 12,990- 68,000 15,990-19,990

• Information technology products:-

Note PC - 69,990- 159,990 79,500-1,70,000

CD Rom & DVD Rom Drive

CD Rom Drives- 750 1,600
DVD Rom Drives- 1,600- 1,900 3,300

CD & DVD Read & Write Solution

CD Writers- 1,600 4,250
Combo Drives- 3,000-5,000 6,500
DVD Writers- 4,600 7,800

Monitors
CRT Monitors
17” magic Bright Range- 8,000 13,750
15” Entry Level Range- 5,450 5,750

LCD Monitors - 15,000- 34,000 19,500-46,800

• Home appliances
 Microwave Oven

Solo - 4,990-6,990 5,490-7,990

Grill - 5,990- 10,590 6,990-13,990
Convection - 12,990- 15,590 12,990-18,990

Refrigerator:-

Direct Cool - 7,500- 10,200 9,950-11,400

Frost Free
Side by side system- 68,000- 1,20,000 69,000-1,25,000

Air Conditioner:-

Insta Chill Window - 14,990- 23,990 15,490-20,990

Insta Chill Split - 24,790- 41,990 26,750-42,500

Washing Machine:-

Front Loading - 6,690- 34,900 12,990-40,500

Top Loading - 11490- 25,900 12,790-18990
Semi Automatic - 6,990- 8,990 7,090-9,490
.

Thus, Samsung has successfully integrated technology strategy,

branding strategy as also strengthening it’s distribution channels to
grab a huge chunk of the current market share as also customer loyalty
in the market.