Branding Strategy of Samsung - Essay Example

Branding strategy of Samsung Executive summary Branding is an extremely important element in the marketing strategies of companies. Effective branding strategies help companies to market their products properly in the market. Modern customers give more importance to brand value rather than the features of a product while taking purchasing decisions. Good quality products from cheaper brands may fail in the market whereas cheaper quality products from better brands may excel in the product. That is why all companies are giving more importance to branding while they formulate marketing strategies. This report explores the importance of branding strategies in marketing, taking Samsung as an example. Table of Contents Executive summary 2 Introduction 4 Branding strategies of Samsung 4 Conclusion 8 References 10 Introduction to be completed by you Branding strategies of Samsung “Samsung has adopted an aggressive branding and advertising strategy to transform the company from the manufacturer of cheaper Japanese brands products to a global brand known for innovations, cutting edge technology and leading design” (Farhoomand, 2013, p.13). Consumer preferences and loyalty are essential for the development of a brand. As per the views of marketing experts, strong brands can capture consumer preferences and loyalty. Samsung is a stronger brand since it is able to offer different products such as mobile phones, televisions, computers, washing machines, Fridge, air conditioners, semi-conductor devises etc. Moreover, Samsung has stronger presences in most of the continents. Even though American company, Apple Inc. is one of the strongest competitors of Samsung, the company is able to penetrate deep into American market also. In fact Samsung is using diversified products as a mean to establish its brand in different continents and markets. Creation of emotional attachment is an effective branding strategies used by many companies. Samsung is one among such companies. Globally, Samsung is a trusted brand and many people, especially the consumers in Asia, have some kind of emotional attachments to it. For example, many of Samsung smartphone users are eagerly waiting for the arrival of new smartphones from Samsung all the time. They know very well that the ability of Samsung in incorporating new features to its new products is outstanding. The recently introduced Galaxy S6 edge is an example of Samsung abilities to make use of cutting edge technologies such as curved display (Samsung, 2015). All new products from Samsung offer some kind of surprise elements for the consumers. As a result of that, the emotional attachment towards Samsung brand among the consumers is growing. In order to create emotional attachment, Samsung makes use of different visible and invisible elements of brand building. For example, pricing and advertising are two of the major visible elements of brand building. According to Porter, “cost leadership, differentiation through quality and service and focus on ‘niche’ markets are the three basic elements which determine the competitive power of an organization” (Golding, 2012, p.41). Samsung products are comparatively cheaper in all markets. Apple’s iPhones and iPads are expensive compared to Samsung’s smartphones and tablets of similar ranges. For example, at the time of introduction in 2014, iPhone 5 price in UK market was £700 whereas that of Galaxy S5 was around £550 (Egan, 2014). Advertising is another area through which Samsung is able to build its brand. Samsung uses pictures, visuals and captions cleverly in all its ads to catch the attention of the people. The slogans such as “Seeing is believing” and “actions speak louder than words” are some of the most popular slogans used by Samsung in its ads for enhancing the visual presentation (Schoultz, 2015). Naming is another area through which Samsung develops its brand. For example, Samsung smartphones come under the brand name “Galaxy”. It should be noted that the name “Galaxy” means a system of stars. Samsung try to promote all its smartphones as a star in the market. The company claims that all Galaxy products have the ability to shine better than competitor products. Moreover, the name ‘Galaxy” gives a more integrated or global look to Samsung’s smartphones. Sponsorship of sports events is another area through which Samsung builds its brand. For example, Samsung was one among the many sponsors of London Olympics. They used this sponsorship for the promotion of its smartphone galaxy S3. Supply chain management is an invisible element of brand building. Efficient supply chain management helps Samsung to build its brand further. Samsung’s In Transit Tracking System helps the company to track the delivery of items from the factory to the ordering party worldwide (Farhoomand, 2013). None of the competitor companies have such efficient supply chain management system as possessed by Samsung. “Marketing innovation in Samsung is meant for creating fresh approaches at every level of customer contact and to drive sales” (Wolf et al. 2006, p.6). Samsung knows the importance of servicing new customers as well as old customers. Samsung’s efficient supply chain system makes sure that none of its new and old customers struggle to get its products and services in time. After sales service is another area through which Samsung builds its reputation and brand. Complaints from the customers were solved as quickly as possible by Samsung in order to keep the brand image in a better position. Moreover, Samsung is keen on providing many useful applications to its customers through its web store. Samsung has recently established Samsung store for the above purpose (Boulton, 2011). Brand positioning is another area in which Samsung push its competitors yards behind. Competitiveness, clarity and credibility are some of the essential elements of brand positioning. Samsung is able to beat its competitors in terms of price and quality of its products. As mentioned earlier, Samsung has introduced Galaxy S6 phone with curved display recently. No other smartphone manufacturers in the world were able to develop this technology so far. One of the surprising facts is that the arch rival and world’s most valuable technology company, Apple Inc. and many other competitor companies such as Sony, Dell and Hewlett Packard are purchasing electronic components such as DRAM, NAND Flash, LCD panels, AP Mobile processor, Lithium Ion batteries etc from Samsung (Farhoomand, 2013, p.13). In other words, majority of Samsung’s competitors are depending them in one way or another for the product development. The reliability of competitor companies on Samsung helps the company to build its brand further. The credibility of Samsung brand is well established since competitor companies lacks the capabilities of Samsung in many areas. Samsung brand is currently known as a leader brand rather than follower brand because of the reliance of other companies on Samsung for different electronic components. Thus the company was able to change its brand image from a Korean company to a Global company now. “It is widely believed that Samsung Electronics is best positioned for the new developments in the smartphone market and will continue to expand its leadership in memory, as well as new components like AMOLED and Mobile AP” (Samsung Electronics: The Jewel of the Samsung Empire — Secrets of Success and Future Growth Engines, 2011, p.151). Brand revitalizing is another marketing strategy used by Samsung in global market. Gaining sales volume by expanding the market, Enter new markets, and Exploit new market segments are some of the brand revitalizing strategies used by prominent companies in order to gain competitive advantages in the market. It should be noted that Samsung is a Korean company. Therefore, it can grow easily in Asian continent since it needs no introduction in this continent. Moreover, Asia is currently developing much rapidly than other continents. Above all, Asia is the most heavily populated continent in the world. All these factors motivate Samsung to concentrate more on Asian market at present. China and India are two Asian countries in which Samsung is currently trying to stretch its brand further. Corporate social responsibility and sustainable development are two of the most popular concepts in the modern business world. Samsung uses these concepts very well for the promotion of its brand. Samsung believes that it is their duty to provide something to the community in which they operate since the company is exploiting many community resources. Samsung Hope for Children (an initiative designed to help under-privileged children through e-learning centers), Innovations for development of the community (a partnership between Samsung and various educational and media agencies to support grassroots innovations), Hope for Culture (tribute to cultural heritage) and Sports etc (Samsung in India, 2015) are some of the programs introduced by the company recently for showing its commitment towards the society and to build its brand. Samsung earns competitive power and better brand image in international market using six types of innovations: product innovation, technology innovation, cost innovation, marketing innovation, organizational culture innovation, and global management innovation (Wolf et al. 2016). For Samsung Product innovation refers to the delivery of a continual stream of stylish and innovative products such as galaxy series of smartphones including the latest curved display phones, LED and LCD TVs, and several other consumer electronics goods. Technology innovation refers the ability to quickly develop and retain key technologies and core R&D investments that separate the company from its competitors (Wolf et al., 2006). For example, “Samsung’s TouchWiz user interface allows seven applications to be easily managed from a bottom tray on the main screen. Users can also customize their home screens using Samsung’s Live Panel” (Boulton, 2012, p. 34). Marketing innovation refers to the ability of a company to introduce innovative marketing strategies. For example, Samsung uses Indian celebrities as the brand ambassador for Indian market and Chinese celebrities as the brand ambassador for Chinese market because of their awareness that the services of local celebrities are necessary for the brand building in a particular market. Management innovation of Samsung can be identified from the following facts. Samsung has restructured its electronics and appliances business to create two sales verticals in a bid to replicate its mobile phone success in the Indian consumer durables market. Samsung Electronics India now has two sales verticals - one selling products to distributors, stand-alone multi-brand outlets and Samsung brand stores, and other focusing only on national and regional retail chains (Mukherjee, 2012). At the same time, there are some limitations also as far as Samsung’s branding strategy is concerned. The legal battle with Apple Inc. is currently causing many concerns to Samsung. Apple Inc. has accused that Samsung has violated copy right laws and imitated some of the designs of Apple products. Apple has won its case against Samsung and an American court asked Samsung to pay a huge amount as compensation to Apple inc. This accusation has caused severe damages to Samsung’s brand image. Another limitation of Samsung’s marketing strategy in terms of branding is its inability to develop an OS for its mobile phones. Currently Samsung is using Google’s Android OS in all its smartphones and tablets. On the other hand, its major competitor Apple Inc is using its OS for its smartphones and computers. Conclusion to be completed by you References Boulton, C. 2011. Samsung Galaxy Tab 7.0 Plus: From T-Mobile Costs $249.99. eWEEK News. December 5, 2011. Egan, M. 2014. Galaxy S5 vs iPhone 5S comparison review: big, bold Android vs slight, beautiful iPhone - which one are you? [Online] Available at: http://www.pcadvisor.co.uk/reviews/mobile-phone/3504991/galaxy-s5-vs-iphone-5s-smartphone-comparison-review/ [Accessed 26 April 2015] Farhoomand, A. 2013. Samsung electronics: Managing innovations in an economic downtown. Asia case research centre. Hong Kong. Golding, N. 2012. Strategic Human Resource Management. [Online] Available at: ftp://ftp.pearsoned-ema.com/Longacre/SampleChaps/FTPH/0273679112.pdf[Accessed 26 April 2015] Mukherjee, W. 2012. Samsung Replicates Mobile Business Model For Consumer Durables. [Online] Available at: http://articles.timesofindia.indiatimes.com/2012-07-28/strategy/32906342_1_mahesh-krishnan-samsung-electronics-raj-kumar-rishi [Accessed 26 April 2015] Samsung Electronics: The Jewel of the Samsung Empire — Secrets of Success and Future Growth Engines. 2011. Bernstein Black Book - The Best of Bernstein: European & Emerging Markets Edition (Fourth-Quarter 2011). Date: October 1, 2011. Samsung, 2015. Next is Now. [Online] Available at http://www.samsung.com/uk/galaxys6/[Accessed 26 April 2015] Schoultz, M. 2015. 8 Awesome Commercials That Employ Emotional Appeal [Online] Available at http://www.digitalsparkmarketing.com/creative-marketing/advertising/emotional-appeal/ [Accessed 26 April 2015] Samsung in India, 2015 Social contribution. [Online] Available at http://www.samsung.com/in/aboutsamsung/samsungelectronics/india/socialcontribution.html [Accessed 26 April 2015] Wolff, M. F, Jones, T and Lee, D. 2006. Samsung, Others Adopting Value Innovation. 2006. Research Technology Management. Sep/Oct2006, Vol. 49 Issue 5, p5-7. Read More