Grading A Case
GL Part # 1: The A Team
1. The critical activity in the process of Samsung’s transformation into a world-beating developer of new cellphone handset design and other product design and other product line designs began in 1993 when Lee Kun Hee visited the U.S. He noticed how Sony’s design appeared to look better than Samsung. Realized that Samsung’s great design and innovation is needed to become that great global brand. Instead of hiring experienced and knowledgeable marketers. He hired many young hip designers. Sent them to go travel the world to see places like the museum, art galleries, ancient ruins, and illustrious modern architecture. That should be able to help the young designers with inspiring creative ideas for Samsung products. Also, using a laboratory in Downtown Seoul to check out the Samsung’s development process by seeing how consumers would react towards their product. Knowing how to use the product is the key to success for them. Paying attention to details that makes them want to be innovative in the most creative way possible to gain these consumers attention. Making sure that these products are easy for them to use rather than difficult.
2. For the company to provide the best product in the market the three competitive advantages they need are a simple product that is easy to use, a product that provides customers with the best quality product and they also need to receive feedback from customers promptly to improve the products. Samsung’s strategic approaches were to use the cost strategy and the differentiation strategy. The cost strategy is when a company markets their products based on affordability and provides their product at the lowest cost for consumers to boost their savings and preferring their products over other options. Samsung was able to cut down average product development time to five months. Time management is important to Samsung because this way they can cut down manufacturing costs and have a quicker time to market. Samsung also uses the differentiation strategy which is when the product has unique attributes that are valued by consumers. Samsung focuses many of its efforts on creating a simple design for consumers. They study how customers would use their products and have designers who travel all over the world to learn design techniques to create the simplest and best quality products for their customers.
3. “Yesterday’s best practice” in product development is considered an antiquated methodology that has been discontinued by successful global companies. Case 2 emphasized that yesterday’s best practices consisted of “layers bureaucracy, endless committees, staged review gauntlets, ritual presentations” and so forth. Companies with a lucrative following of devoted consumers have ditched the archaic methods of “producing” and embraced innovative working environments that work to inspire designers in creating products that are in tune with the needs of today’s consumer.
Moreover, product development entails a variety of steps. Steps such as locating a need in the market, imagining the final product, preparing the product journey, creating a minimum viable product, making this product available to users, and incorporating feedback to further develop the product. This is why Samsung believes “concurrent engineering and fast prototyping” are today’s practice when it comes to product development. It all goes back to creating “simple” products that are user friendly and relying on the feedback of its consumers.
4. The price strategy of Samsung for the United States is based on the competitive and skimming pricing strategies. It is competitive because the company enters in the price comparison with other companies, but also makes sure its prices are on average. For example, in terms of cell phone manufacturers, Samsung, within national territory, competes with companies such as Apple, and Huawei, so it makes the market a bit open and the company must set reasonable prices to be able to compete. Also, its strategy is skimming since most of the time Samsung is the company that first launches new products; into the skimming strategy, the company is able to manipulate prices when a new product is released. On the other hand, Samsung has an advantage over the other firms in South American countries such as Peru, Bolivia, and Chile. The company has less competition than in the U.S.; therefore, its pricing strategy is flexible.
When it comes to the promotion strategy in the U.S, Samsung involves the pull and push strategies. If the strategy is the push advertising method, Samsung allocates its products through rigorous sales and advertising campaigns that require a strong investment to strengthen the traditional advertising. Samsung focuses on spot placements on major events like the famous Super Bowl. In terms of the pull strategy, the company wants to show its presence through social media; in that way, Samsung is constantly building relationships, attracting new customers to its side. Compared to South America, the giant of the electronic promotes its name by offering accessibility to its products. Customers from the countries previously mentioned said that the company engaged them by listening and understanding what they suggest. It is important to mention that a strong tool of promotion for Samsung is its low and affordable prices in most of its products. A good way of thinking and considering customers’ preferences.
5. Samsung is a pretty popular brand in today’s market. They have been increasing sales as the years go by, by innovating new products and having better quality for each generation. This wasn’t always the case though. Before the popularity, Samsung would sell cheap electronics under other brands like Tantus and Yepp. It was smart of them to leave these brands and have their brand, which is the Samsung we know today. Samsung products would sit in the back of the stores because they weren’t selling as much. Back in the day, Sony was the top brand known for making electronics. That didn’t stop Lee Kun Hee, CEO of Samsung. He had a competitive strategy that will make Samsung as one of the best brands of electronics and make their products as good, or better than Sony. Mr. Hee’s goal was to develop and market high-level products but at the same time, make its brand image more stylish and high quality for an exceptional price point. His target market is more towards the younger audience that grew up with technology. Pretty smart of him to attract the younger generation to buy these products that look fashionable. Besides making their electronics better, they also had to make their brand known across the world. Many of their products were pulled out from these cheap stores and shipped them to bigger names like Best Buy and Amazon and consolidated their roster of advertising to one global advertising group which was WPP. WPP helped them with product placement, getting sponsors, and online advertising. Ever since then, its global value has increased tremendously. It surpassed Sony in sales. Besides having a war with Sony, Samsung also has another big competitor when it comes to phones. That will be Apple. With the Samsung Galaxy phones and the iPhones. Steve Jobs had an amazing idea of introducing the touch screen phone. It just had that sleek and futuristic image. I felt like at that time, Samsung had to kick it up a notch and tried to get the upper hand. Another big thing that they compete is what features they bring. For example, how Apple offers Siri and Samsung offers the “Hey Google”. Or the recent product that Apple created, Airpods. It did pretty good in sales so of course, Samsung also introduced wireless earphones, Galaxy Buds. Also, Apple users have Facetime and iOS updates that the Galaxy doesn’t provide. When it comes to phones, Apple has the upper hand with a lot more services that Samsung doesn’t offer.
6. The future of Samsung will be a direct result of the decisions made today, and this is where a bold decision might be necessary to maintain prosperity. As a group, our suggestions for the future of Samsung in the 4 Ps locally and internationally are following.
Product has always been and continues to be the buzzword for Samsung. One possibility for the future of Samsung is to focus exclusively on high-end products. In a sense, there is just no point in trying to pursue the low-end market. We suggest that Samsung must continue to innovate. Samsung cannot depend on semiconductors forever. What is clear is that Samsung needs to find its next “semiconductor” — whether that be one or a group of products that boost its profit margins.
We believe if Samsung wants to develop into the extreme poverty countries, it needs to lower its product price versus other companies. Samsung’s pricing strategy undertakes two components with the first being the skimming price and the second the competitive pricing. Pricing is very crucial for a firm as it ensures that the company communicates to the consumers the value which they attach to the product. This is particularly in cases where consumers use the price set to judge and decide on the value of a particular product. As such, pricing is a critical marketing element as it communicates the market and product value of the product being introduced in the firm. However, Samsung will need the market research team to research all areas to find out the most ideal product and price that fits in each society. If Samsung will set the price level of its product at a competitive rate will lead to success. Samsung has to have a close eye on the price of its rival organization and compete on it.
Our suggestion to Samsung is that Samsung should offer their products to more retailers. Also, Samsung will be known for a practical “purist approach” to retail with the experience centered around efficiently delivering products and services. Samsung should open its stores which can be found around the world. They must blend theatrics with good user experience and functionality. Experiential, tech-focused stores are tools that should help brands connect with many audiences, including those customers who would have never considered buying the products, loyal customers drawn to emerging technologies, and those who are most concerned about utility. At the stores, customers not only can buy the product that is sold but also feel the experience of the digital lifestyle.
Nowadays, Promotions are very important. A common feature of Samsung’s marketing strategy is promotion, one of the four Ps. Samsung promotes its products in a variety of ways ranging from attending the relevant trade fairs for each of its products to providing print brochures, posters, and specification sheets. Promotion involves marketing Samsung products to its possible consumers. Our suggestion for Samsung in terms of promotion is to target the hotel chains. Many hotels where most in-room technology needs to be updated and requires early replacement to retain the hotel’s competitive advantage. Samsung should take this opportunity to spread its brand name even further. Also, we would suggest that Samsung should hit hard on internet advertisements. It will have more success as Samsung will offer sales promotions to the customers during the festival time.