Marketing plan of samsung telecommunication

By 2015, Samsung Mobile Phone Samsung in short hereby is the second largest information technology company measured by revenues, behind only Apple Inc., and 5 th in market value, behind

HANOI UNIVERSITY FACULTY OF MANAGEMENT AND TOURISM

-oOo -Marketing Plan of Samsung Telecommunication

Students’ names:

Dao Thi Quynh Hoa Bui Diem Huong Nguyen Quynh Chau 1504000007 Tran Thi Hang

Dang Nhat Minh Subject: Principle of Marketing Tutorial class: Tut 1 – BA15 Tutor’s name: Le Minh Hang

Table of Contents

Executive Summary 4

1 Current situation 5

1.1 Microenvironment 5

1.1.1Company 5

1.1.2 Suppliers 6

1.1.3 Competitors 7

1.1.4 Marketing intermediaries 7

1.1.5 Customers 8

1.1.6 Publics 9

1.2 Macroenvironment 9

1.2.1 Demographic 9

1.2.2 Economic 10

1.2.3 Technological 10

2 SWOT analysis 11

3 Objectives 12

4 Strategy 12

4.1 Product 12

4.2 Promotion 13

4.3 Price 13

4.4 Place 14

14

5.1 Product 14

5.2 Promotion 15

5.2.1 Public relations 15

5.2.2 Advertisement 16

5.3 Price 17

5.4 Place 17

6 Conclusion and Recommendations 18

6.1 Conclusion 18

6.2 Recommendations 18

References 19

Samsung in the future development All of the findings focus on microenvironment and macroenvironment factors around Note 7 disaster and the way Samsung address

communication crisis problem In addition, Samsung marketing strategy is to

emphasize on new product – the key factor to save their brand image

1 Current situation

1.1 Microenvironment

1.1.1Company

Samsung Telecommunication is one of the five divisions of Samsung Electronics, belonging

to the Samsung Group, a South Korean multinational conglomerate By 2015, Samsung

Mobile Phone (Samsung in short hereby) is the second largest information technology company

measured by revenues, behind only Apple Inc., and 5 th in market value, behind Apple,

Alphabet, Microsoft and Facebook Notably, Samsung is the largest Google Android running devices manufacturer by 2012

Before the Note 7 incident, Samsung was having their best time since 2014 According to the 2nd

Quarter financial report of 2016, their profit reached $7 billion, higher than the previously projected level of $6.8 billion and almost reached their all-time best of $7.4 billion in 2014 In terms of revenue, Samsung’s figure rose to $43.3 billion from $42 billion of the first quarter However, it hadn’t reached the analysts’ expected number of $44.1 billion After the report was announced, the company’s stock price increased by 13%, their best margin in the previous 4 years The reason for their 2nd Quarter success was credited to the Galaxy S7 duo, including their

2 flagship models at the time, the Galaxy S7 and the Galaxy S7 Edge Analysts supposed that 15 million units had been sold at the time, a 50% increase in comparison with the 10 million figure

of the previous 3 months They also predicted that Samsung’s operating profit would be able to increase by 53% this quarter, equal to $3.7 billion

Samsung’s marvelous figure of Q2 2016 set the bar really high for the third one, which would see the official debut of the South Korean colossus’s next flagship model, the Galaxy Note 7 The unprecedented expectation for the new phablet was partly due to the arguably unimpressive introduction of its biggest rival, the Apple iPhone 7, in July 2016, an event at which will be discussed later in this paper With a handful of leaked information regarding the look,

specification, packaging and other aspects, the new Galaxy smartphone was widely expected by the media to be the best device had ever been introduced

On August 2, 2016, in their Galaxy UNPACKED event held in New York City, Samsung officially unveiled the Galaxy Note 7 Marketed as the Samsung Galaxy Note7, the new device was nothing short of

an amazement, despite many leaked information prior to the main event Although it was the

6th installment of the Galaxy Note line, Samsung decided to brand it as the “7” instead as an attempt toprevent the consumers from perceiving it as the inferior selection to the S7 duo Note 7 was a bomb at the time, receiving attention from all around the technology world The new device, as predicted by many, was not a leap in terms of innovation or ground breaking by any means, but a pinnacle in user experience instead Note 7 inherited many of the S7’s components and improvements, expendable storage, IP68 water resistance, dual-sided curve screen and HDR color support to name a few The demand for Samsung’s next best thing was higher than expected, even breaking pre-order record in several markets The delivery of Note 7 was even delayed due to shortage of supply Following such successful introduction was stellar reviews from technology sites and journals Galaxy Note 7’s was thought to be the best mobile device launch in history.

Precisely one month later, Samsung announced that the sales of the Galaxy Note 7 were

suspended and there would be an informal product recall Since the debut event in August,

Samsung had received 92 reports of battery overheating, including 26 reports of fire in the U.S From here, things started to go downhill for the South Korean company, the worst

communication crisis in the technology world history started

incident There was a critical flaw in Note 7’s battery design, which was not designed with enough

space for the battery to expand when heated in the charging process, resulting in a short fuse occurred inside the battery and makes the battery overheat and light up However, the problem did not stop there for Samsung Another battery supplier of the company (which was not named directly) made another critical

mistake in the manufacturing process of the battery for replacement units Under the time pressure of the

replacements manufacturing, mistakes occurred in the welding process and battery short fusing happened again Since the announcement, measures had been carried out in an attempt

to prevent similar incidents from happening again

of the awe factor However, Note 7’s recall delivered a critical hit to Samsung’s ambition The

consumers could not buy the newest and greatest Android device, they opted for Apple’s familiar offer instead Opposed to speculations, iPhone 7 and 7 Plus helped Apple set a new record Tim Cook’s company announced in their late 2017 financial report that they sold 78.29 million

smartphone units, a new record in the company’s history

1.1.4 Marketing intermediaries

Marketing intermediaries help Samsung to promote, sell and distribute their goods, including wholesalers and retailers These two are a critical part of the supply chain for any technology manufacturer, as they are the ones who bring the products to end-consumers, apart from the

manufacturer itself In Vietnam, Samsung has two major wholesale partners, Viettel Group

and Phu Thai Group Phu Thai is one of the biggest electronic wholesalers in Vietnam, with

30 subsidiaries, 8 main storages and 5 sub-storages nationwide The partnership with Phu Thai,

which started in February 2009, strengthened Samsung’s availability and supplying capability, a premise for Samsung’s dominating status later on

Regarding retail, Samsung products were sold in almost every retailers in Vietnam, the biggest of

which are Thegioididong, FPT Shop, Viettel Store, VienthongA, etc Samsung had a very strong

relationship with major retailers, they had a seperate booth in every stores and their products were

marketed and advertised with great effort by these retailers For example, on August 11, 2016 in Ho Chi Minh City, Thegioididong held a pool party solely for the introduction of the Note 7 with the presence of several celebrities and over 200 customers These retailers’ effort in presenting the Note

7 was also a reason why the device broke the record on pre-orders Thegioididong had over 4400 pre-order, FPT Shop had 5000 and VienthongA had over 1000 pre-order after only 24 hours

However, on September 3, all 3 major retailers issued products recall for the Note 7

following Samsung’s announcement a day before In general, all retailers handled the recall

similarly, they offered 100% refund for the product and let the customers keep their pre-order

presents, which were of great value, some of which cost roughly 25% of the device’s MSRP These retailers also stopped taking pre-order right after Samsung’s recall announcement

In terms of high-end products, the majority of customers had long been perceiving the S line as the only worthy contender to the insanely popular and favored iPhone and the Note line to the bigger screen iPhone Plus in terms of user experience and imagery value It was no surprise when it was reported that the Galaxy S7 and S7 Edge reached 55 million units sold in May 2017.Customers loved it If you want a high-end, well-built, well-designed product with butter-

smooth experience and powerful specs without and Apple on the back, there was almost no other choice apart from the Galaxy S

However, as we all know, the Note line hit a major bump, even a wall to some people, when the 6thinstallment came out The early staggering number of pre-order sent out a loud signal of success for the South Koreans Customers were blown away by the Note 7, it had everything a person would wantfrom a smartphone in a big chassis Numbers don’t lie and a 450% increase in pre-order compared to the Note 5 indeed didn’t Then the problems started to appear after the first units were delivered to the customers on August 20 Some users in Vietnam reported a multiple of issues with their devices, including overheating, rebooting, no charging, idling, etc When the recall was issued, customers responded in different ways Some were frightened by the incidents and immediately sent back the devices to the retailers, others tried to keep their phones as the Note 7 was inherently a great

product However, 90% of returned products’ owners agreed to wait for the replacement

Note 7 instead of taking refunds or choosing other products.

1.1.6 Publics

It was widely agreed that the Note 7 incident was the worst communication crisis in the

technology world history When the phablet was introduced in New York, it was believed to be the best smartphone ever made Every technology websites reported on the debut event and everytiniest bit of information about Samsung’s new smartphone The keyword “Note 7”’s interest on Google increase by 400% from July 30 to August 6, 2016 Technology reviews churned in several days after the launch event and they were incredible Most reviewers ranked Note 7 at thetop of their 2016 best devices lists TechRadar have it a 4.5 out of 5 rating, TrustedReview gave

it a 9 and so did engadget

After the first overheating reports came in, they were everywhere on the internet, both on formal and informal news outlets and were taken with great interest Images of burnt Note 7 circulated on social media faster than a cat video, mostly on Facebook and Twitter

Every news website reported in the incidents with countless number of speculation about the reason of the overheating

1.2 Macroenvironment

1.2.1 Demographic

Samsung’s demographic is rather diverse, even though some parties are quite dominant in

comparison to others In terms of gender, Samsung has more male customers than female ones by about

30% Regarding age, the group that buys Samsung products the most are people younger than 24, which accounts for over 20% of their sales number, following by people from 55 to 64 and from 25 to 34, accounting for 17.7% and 17.1% respectively Asian and Hispanic buy Samsung smartphone the most among race groups Furthermore, more people with no kids are Samsung’s customers than parents Finally, people with $125,000+ income are most prone to buy a Samsung device, followed up by those who earn from $100,000 to $125,000, which are the two highest income groups there are, signaling that Samsung’s high-end devices attract high income buyers the most However, the third most spending income group for Samsung is the $20,000 - $40,000 ones This can be seen as a success of Samsung in marketing their low-end products.

1.2.2 Economic

The world economy is still recovering from the devastating 2008 financial crisis However, people’s spending on electronics had gone up gradually over the past 5 years In Vietnam, GDP growth rate had been increasing from 5.03% in 2012 to 6.58% in 2015 However, the figure in

2016 only reached 6.21%, lower than the projected 6.7% Despite this slight dip, the economy still held on well and people’s spending did not seem to lose its momentum

Nevertheless, the Note 7 incident delivered a critical blow to Vietnam’s economy since

Samsung takes a too critical role in the economy In 2015, Samsung’s Bac Ninh factory producedroughly 100,000,000 products, equals to $13.56 billion in revenue, which accounted for 11% of entire Vietnam’s export revenue The recall caused the country’s export revenue to decrease by 6.8% compared to last year’s figure

1.2.3 Technological

Samsung is one of the leading companies in terms of technological innovation Their products

are built with the best and newest improvements For instance, Samsung was the first when it comes to curved screen smartphones On March 1, 2016 during the Samsung Unpacked 2015 event held at the Mobile World Congress, Samsung shocked the world by presenting the Galaxy S6 duo Although the S6 was a great phone, all spotlight was on its sibling, the curved screen S6 Edge Since then, every installment in the flagship S line had a curved version The unlucky Note

7 had a curve screen, too Samsung actually put its very best in the Note 7; a powerful

specification that could handle any kind of application with ease, a tried and true spectacular camera taken from the S7, a beautifully sexy curved screen and an extremely useful stylus,

dubbed the S pen, the Galaxy Note 7 had it all Appraisal aside, Samsung may have spent too

much attention on jam-packing features and improvements into the Note 7 that the battery was not sufficiently designed According to Samsung’s official announcement on the cause of

the incident, the battery cell outer shell was not big enough for the core to expand upon heating upduring recharging They tried to put a battery too big for the device and short fuse ignited the device, turning the potentially greatest phone ever into an unprecedented failure

2 SWOT analysis

From all the above findings on the internal and external environment, a SWOT analysis can

be displayed in this following table

Strengths

-Strong market position and global

brand recognition

- Note7’s impressive design

-Has a strong relationship with major

wholesalers and retailers

- Has a wide range of customers in terms of

- negligence when producing note7

- lacking of its own operating system

Threats

- Apple is the biggest competitor

- Spread of information through media and social networks

- create domino effect due to a default product

- First of all, Samsung Telecommunication is the second biggest information technology company in

the world behind Apple Inc., 5th in market value and largest Google Android running devices manufacturer Therefore, Samsung Mobile Phone has powerful market position and global brand recognition However, with that fame, it is easier to be center of attraction by public and media because all what the company does can be shown on newspaper or social networks in very fast way

- In terms of customers, Samsung has a wide range of consumers in demographic segmentation

By developing various smartphone lines, Samsung can attract different types of customers with different demand from high-end to mid-end and low-end devices When Note7’s recalling

happened, 90% of returned products’ owners agreed to wait for the replacement Note 7 instead of taking refunds or choosing other products That is the reason why customers’ loyalty is one of the potential opportunities of Samsung