Marketing off the beaten path

By , agencyfaqs! | In | October 20, 2000
At the heart of Samsung's success is its willingness to try out new ideas that often run counter to conventional marketing wisdom

Sabil Francis
NEW DELHI, October 20

When it comes to marketing, Samsung usually has an ace or two up its sleeve. And a knack of pulling them out at the right time.

This year, innovative marketing strategies saw the Korean major seize an 8.5 per cent market share in the Indian colour TV market - a leap of 2.5 per cent in market share over August 1999, when Samsung's market share stood at 6 per cent. In a market that moved with the sluggishness of an overfed crocodile, Samsung scored on its swiftness.

One reason for the Korean major's marketing success has been the way in which it has tailored marketing strategy to adapt to the needs of the countries it has entered.

Blitzkrieg. That did the trick in India. The Indian market strategy, say officials, was crafted on the conviction that, despite the success of Akai and Baron International's pricing strategy, Indian consumers are willing to spend a little bit extra as long as they get a feature-rich, top quality product. The company held fast to this belief even when most of the other companies in the CTV sector were goaded into an aggressive pricing strategy as the Baron juggernaut rumbled on.

Samsung focused on a blend of product features, technology and aggressive marketing. Early this year, the company introduced new CTV ranges like the Plano and the Metallica series. Says R. Zutshi, vice-president, sales, Samsung India, "A clear sub-branding strategy detailing the USP of the product that the consumer could relate with, the incorporation of features that we felt the consumer needed, as well as a consistent pricing strategy helped us succeed."

Now, in another major marketing move, the company is targeting niche consumer groups such as newly-married couples. This is the logic behind the 'Samsung Shubh Wedding Bonanza' targeted at couples setting up home. Company officials say that the initial response to the special discount offer has been positive.

Aggression has also helped a lot. And coming in at the right time. All this without cutting price. When Onida, plagued by worker troubles in the mid-nineties, rolled back in the north moving on to the west, Samsung struck. Concentrating on Delhi and the north, where the departure of Onida had left the market wide open, Samsung seized 4.2 per cent of the stagnant two-million-per-year CTV market by December 1996. This was combined with an advertising blitz that emphasised quality over price, and strong after-sales service.

Such tactics enabled Samsung, which started production of CTVs in the country in May 1997, to reach the magic figure of one million CTV sets this year, becoming the first multinational to do so post liberalisation. Samsung India was also the first subsidiary outside Korea to attain such levels of productivity.

Samsung is confident that it will capture a 10 per cent share in the CTV market soon. And it just might work out. The figures are looking nice. Until August, the company had a turnover of Rs 700 crore. In the next three months, it is chasing a turnover of another Rs 500 crore.

The Korean company has followed other paths in other countries - but always staying away from the beaten track.

Digging in. That's what Samsung did in Vietnam, where even today, just over 25 per cent of the population watches TV. In the early nineties, Samsung, sensing future opportunity, quietly invested $36.5 million in a CTV plant in Vietnam. It then dug in and waited for a nascent market to emerge. Today the plant rolls out five lakh CTVs a year and Samsung is looking forward to a fall in TV prices in Vietnam. It also plans to push in surplus production into the competitive markets of Malaysia and Singapore.

Or tailoring. This was the strategy that the company followed in the Southeast Asian markets, where Samsung products were engineered for exceptional sound clarity after consumer surveys showed that this was what South East Asians looked for the most.

When it comes to sniffing out market opportunities, few can beat the Korean major. In the Sydney 2000 Olympics, Samsung Electronics provided approximately 25 thousand mobile phones and pagers. Market analysts at Samsung felt that the glory of the Olympics would rub off on the company.

Back home, in Korea, Samsung Electronics Co. posted the largest net income of 3.18 trillion won in the first half of the year 2000. In terms of turnover, Samsung Corp. topped the corporate chart with a sales volume of 19.06 trillion won.

For a company with 900 PhDs on its payrolls, capturing markets through innovative marketing may just become a habit.

© 2000 agencyfaqs!