Samsung Overview and Global Presence - Research Paper Example

Samsung Overview and Global Presence Samsung is an electronic company that has been in existence for over six decades. Samsung electronics was established in the late years of the 1960s. In its early years, the company sold its products in its local market around South Korea. The company decided to start investment on research and in development in the years preceding the 1980s. This effort on research led to formation of products that had huge sales. The company joined the global market in the 1990s. Sale of Samsung products, on an international level has helped the company to grow rapidly and be able to compete with big players in the electronic industry. Diversification of the company’s products has enabled it to become a global leader in the electronics industry. The company produces display devices, television sets, digital cameras and mobile phones. However, the company has ventured in the tablets market and has already become a major player in this division. Global Marketing Strategy A robust marketing has enabled Samsung electronics to stay ahead of its competition. The current business environment for electronics dictates that companies become customer-centric. This is whereby companies have to put customer needs first as they develop products or services. This has called for customization of products to the end user specifications or needs. However, the use of customization as a global marketing mix strategy comes into conflict with standardization. In Global marketing, a company needs to try to balance between these two strategies of marketing mix so as to remain relevant and stay ahead of competition (Armstrong and Kotler 35). Globalization has for years been a disputed phenomenon in various ways including in definition, magnitude and effects. Thus a company should come up with most appropriate measure to handle it. A. Marketing Mix a) Product i. Standardization vs. Customization Standardization as a global marketing mix strategy implies an organizational design that is centralized. A company that adopts this strategy trades its products in one form. Benefits of adoption of this strategy include low operational costs and thus better economies of scale and uniformity of products. However, standardization has drawbacks of lack of competitive edge on products and is heavily reliant on economies of scale for profit margins. Customization on the other hand is a marketing mix strategy that implies an organizational design that is decentralized (Birnik and Bowman 70). This strategy is customer centered and considers needs of customers as per their location and needs. A company that adopts this strategy in its marketing mix benefits in an increase in its revenues since their products will have more appeal to customers. Disadvantages of this strategy include lack of benefit on economies of scale by a company and lack of uniformity in the global image of a company. Samsung Electronics has been successful in maintaining a trade-off between customization and standardization strategies with the help of the internet. According to Hadjinicola and Kumar there should be a combination of these strategies because it maximizes performance of an organization (62). The company has established divisions depending with regions and continents where they are able to customize their products to needs of locals while at the same time availing some non-localized products in these markets. The company has also placed applications for the devices they sell on the internet with and option of individual customization. Using these ways the company has been able to cater for traveling customers and well as local residents in a market. A level of cooperation between the subsidiary products and the parent product optimizes the performance of company products in the market. ii. Cultural Factors Culture of people in a region plays a very key role in determination of a company’s strategic approach in international markets. This is a very vital consideration especially in product advertising and marketing. The language used in marketing a product may be relevant and resonate well in one market, but be considered non-coherent or even offensive in another. In instances where cultural values are considered an integral part in everyday living customization or localization is important. This is especially in Arab countries where the company has resorted to customization of products as per the laws and social values of these countries. Heerden and Barter posit that it is very crucial for companies to understand cultures in order for them to be successful in their international marketing schemes (70). b) Price management Commodities pricing is affected by various factors including; costs that have been incurred in entry into a market, shipping and freight costs, location of production plants and competition pricing. Thus, a company has to put all these factors into consideration then come up with pricing that will enable it to return profits while at the same time is attractive to the customers of a product. Pricing is not just about placing of prices on goods (Armstrong and Kotler, 110).Samsung has been able to navigate between profits versus attractive prices by offering quality products with competitive pricing. The company has also established various platforms for purchase of products with local currencies and hence has been able to make massive sales in international markets. The company maintains different price structures for distributors and single device purchasers. c) Promotional Strategies and Tactics Promotion is a key factor of marketing mix that can attract new customers and maintain customer’s loyalty to products (Lim and Rusetski 70). Samsung has implemented very successful product promotion tactics that have attracted new consumers in large numbers. These tactics follow an approach that integrates communication marketing. One such tactic of promotion has been by holding constant events to promote their products especially through trade fairs and university shows. Another means that the company has used for promotion is through sponsoring especially in social events for example during the Olympics of Seoul in 1988. Advertising is also a means that has enabled the company’s products to earn popularity (Mintzberg, Ahlstrand, Lampel, and H.Mintzberg 30). This advertising has been through mass media like the television and through social media by way of internet advertising. Use of billboard has also been a common way for outdoor advertising used by the company. d) Approach to distribution Place or location, is the fourth element of marketing mix after price, product and promotion. This element of marketing mix is concerned with how products by a company reach the customer. This means establishing of a channel within which goods can be moved from the manufacturer and stored until they are able to get to the customer. Perreault states that this element of market mix deals with decisions of how a right product will get to its target market location (60). Samsung uses different channels to move its products depending on the nature and depth of a market. To get products to non-urban areas the company can uses distributers and retailers while in urban areas sales are normally done directly from the company branches to customers (Johnson, Debra, and Turner 55). This direct mode of sale to customers has given the company an advantage and increased sales in urban areas over its competitors since most of those competitors use distributors even in urban areas. The company ships products from its factories in South Korea to its various international markets. The shipping is then complemented by freight services that transport the products to warehouses where they are stored in readiness for sale. However, in markets that are established the company has production facilities to satisfy local markets in those locations. An example is in the case of USA where the company has setup a manufacturing plant for its chips. Samsung electronics has been a prominent player in the technology industry has modes of sale online that allow purchase of its products online. Opinion on Brand Management and Global Marketing Samsung electronics products have been able to withstand competition from other major players in the electronics business like Sony and LG. This has been attributed to good strategies employed by the company’s management in marketing of its products. It is essential for the management to have the ability to set assets held by a company adjacent to the environment in order for the company to have competitive advantage. The company has also continuously developed new products as a result of years of huge investment on research. These new products have propelled the company’s reputation to the top over its competition and have earned it multiple awards globally. The company was rated as the second-largest producer of mobile-phones in the world in the year 2007 and the largest producer of liquid crystal display televisions in the year 2011. The company has fused its innovation with its marketing strategy with an aim of increasing its revenues. It has set a goal of making $400billion each year in revenue within a period of the next ten years. Samsung electronics gadgets today come with feature that support a green environment. This is a major stand that the company has decided to take in order to keep the environment clean. This move has played a role in increasing sales in markets that have been advocating for better and safer environments. The company’s advocacy for use of solar and other energy sources that are conservative of the environment has also been a selling point for its products especially in the African continent. Such an approach can help a company address limitations that come with adopting traditional marketing strategies (Heerden and Barter 72). Therefore, it is evident that the marketing strategies employed by the company have been efficient and effective to help it counter effects of globalization. Recommendation It is worrying that the company’s focus has mostly been on short-term goals in terms of revenue and development of products. This means that the sustainability of the company is at risk. My advice to the company would be that the company should come up with innovations and strategies of marketing that are long-term. This would help it remain a key player in the electronics industry for a longer time. The company should also aim at producing software so as to increase customers’ brand loyalty and help in sales even in volatile times. The segmentation of the company is also wanting. Market segmentation should be defined clearly when applying a hybrid marketing mix strategy (Souiden, 19). Conclusion Samsung electronics has risen to become a very reputable company by virtual of the quality of its products and sales. The company should aim to remain competitive and a producer of solutions that help their customers in their daily lives. As aforementioned in the introduction, the Sale of Samsung products, on a global level have increased dramatically. As a result, this promoted the company to grow rapidly. This has as a result helped it to improve on its competition strategies. Hence, customer relations and operation delivery must also be improved frequently. Works Cited Armstrong, Gary, and Philip Kotler. Marketing: An Introduction. Harlow: Pearson Education, 2005. Print Birnik, Andreas, and Cliff Bowman. "Marketing Mix Standardization in Multinational Corporations: a Review of the Evidence." International Journal of Management Reviews. (2007). 67-89. Hadjinicola, George and Ravi Kumar. "Modeling Manufacturing and Marketing Options in International Operations." International Journal of Production Economics. 75.3 (2002): 60-145. Johnson, Debra, and Colin Turner. International Business: Themes and Issues in the Modern Global Economy. London: Routledge, 2003. Print Lim, L K. S, F Acito, and A Rusetski. "Development of Archetypes of International Marketing Strategy." Journal of International Business Studies. (2006). 45-86. Mintzberg, Henry, Bruce Ahlstrand, Joseph Lampel, and Henry Mintzberg. Strategy Bites Back: It Is Far More, and Less, Than You Ever Imagined. New York: Prentice Hall, 2006. Print. Perreault, William D, and E J. McCarthy. Basic Marketing: A Global-Managerial Approach. Boston: McGraw-Hill, 2002. Print. Souiden, Nizar. "Segmenting the Arab Markets on the Basis of Marketing Stimuli." International Marketing Review journal. (2002). Print. Subramaniam, Mohan, and Kelly Hewett. "Balancing Standardization and Adaptation for Product Performance in International Markets: Journal of Management International Review. (2004). 35-55. Heerden Van and Barter. "The Role of Culture in the Determination of a Standardized or Localized Marketing Strategy." South African Journal of Business Management. (2008). 68-90. Read More