The Global Communications Industry

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<div class=WordSection1><pre><o:p> </o:p></pre><pre>The global communicatio ns industry has been changing during the past few years, and quite dramatically. Wireless communication, as a result, proves to be a hot area for telecom suppli ers. Accordingly, the demand for handset products, from businesses to consumers continues to rise. The question is how handset manufacturers have fit their glob al marketing strategies to win widespread acceptance as competition intensifies. Thus, this analysis highlights Samsung's recent success as a very typical case in point to the above question. In more focus, the purpose of this analysis is t o examine:</pre><pre>- Samsung handsets' approach to product, pricing, distribut ion and</pre><pre>promotion.</pre><pre>- Samsung handsets' future prospects in the context of the</pre><pre>increasing competition.</pre><pre>- Samsung handsets' practic es in Vietnam.</pre><pre>TABLE OF CONTENTS</pre><pre>CHAPTER 1 - THEORY OF GLOBAL MARKETING MIX</pre><pre>1.1. Pro duct decisions--------------------------------------------------5</pre><pre>1.2. Pricing decisions---------------------------------------------------8</pre><pre >1.3. Distribution channels---------------------------------------------10</pre> <pre>1.4. Promotion tools---------------------------------------------------14</ pre><pre>CHAPTER 2 - ANALYSIS OF SAMSUNG HANDSETS'</pre><pre>GLOBAL MARKETING ST RATEGY</pre><pre>2.1. Introduction to the company and its handset products-------17</pre><pre>2.1.1. Corporate overview-----------------------------------------------17</pre><pre>2.1.2. Why study Samsung handsets?-----------------------------------20</pre><pre>2.1.2.1. Glo bal handset market's situation----------------------------20</pre><pre>2.1.2.2. Samsung's changing position in the global</pre><pre>marketplace--------------------------------------------------21</pre><pre>2.2. Samsung's major competitors----------------------------------25</pre><pre>2.2.1. Nokia - Best of the rest -----------------------------25</pre><pre>2.2.2. Motorola - Recent decline-------------------------------------27</pre><pre>2.2. 3. Ericsson - Another year loser------------------------------29</pre><pre>2.2.4. Siemens - Pop larity in Europe------------------------------30</pre><pre>2.3. Samsung handsets ' global marketing strategy-----------------31</pre><pre>2.3.1. The effect of ne w categories of functionality and style----------31</pre><pre>2.3.2. Positioning its handsets as expensive phones</pre><pre>with high quality--------------------------------------------------35</pre><pre>2.3.3. Availability of Samsung in the global markets------------------38</pre><pre>2.3.4. Agrressive advertising strategy</pre><pre>"Holistic Bra nd Campaign"----------------------------------------41</pre><pre>CHAPTER 3 - EVALUATION AND RECOMMENDATION</pre><pre>3.1. Samsung practices in Vietnam-------------------------------------43</pre><pre>3.2. Will Samsung maintain and inc rease the success in its bid to</pre><pre>tighten the gap with Nokia and Motorola?-------------------------44</pre><pre>CONCLUSION------------------------------------------------------------49</pre><pre>REFERENCE -------------------------------------------------------------50</pre><pre>CHAPTER 1</pre><pre>THEORY OF GLOBAL MARKETING MIX<pre>Global marketing is becoming an important key term for the current marke tplace. There are many different definitions of global marketing. Consider the f ollowing definition by De Mooij , an American Economist.</pre><pre>"Global marketing refers to the integration of the international and multinational marketing approaches, where the objective is to create the greatest value for customers and the greatest competitive adva ntage for the company".</pre><pre>Today, this form of global marketing is r
eferred to as the hybrid strategic approach, or "globalization." The s trategic intent is to use a centralized strategic "footprint" to build global brand identity, while allowing country-specific flexibility in the execu tional or tactical and communication mix decisions. When determining what the st rategic implications are for global interactive advertising under this form of m arketing, one finds that the concepts of global marketing and global interactive advertising are no longer utilizing an ethnocentric perspective. Instead, globa l marketing should be considered polycentric or geocentric (outward looking). Gl obal marketing acknowledges and uses strategic intent to coordinate the combinat ion of centralized corporate or brand directives with more localized adaptations in interactive advertising placement and executional decision-making. Thus, glo bal marketing does suggest that reaching global consumers is a strategically int ended outcome of a hybrid strategic approach. In more details, four main factors included in the above-mentioned approach are product, price, place, and promoti on. In other words, when marketing their products, whether locally or globally, firms need to create a successful mix of:</pre><pre>* the right product</pre><pre>* sold at the right price</pre>* in the right place</pre><pre>* using the most suitable promot ion.</pre><pre>1. 1. Product decisions</pre><pre>A product is defined as: " Anything that is capable of satisfying customer needs". Then the product is the central point on which marketing energy must focus. Finding out how to make the product, setting up the production line, providing the finance and manufacturing the product are not the responsibility of the only marketing function. However, it is also concerned with what t he product means to the customer. Marketing therefore plays a key role in determ ining such aspects as:</pre><pre>* the appearance of the product - in line with the requirements of the market</pre><pre>* the function of the product - products must address the needs of customers as identified through market research.</pre><pre>Businesses need t o regularly develop new products and markets for future growth. A useful way of looking at growth opportunities is the</pre><pre>Ansoff Growth Matrix which suggests that there are four main ways in which gro wth can be achieved through a product strategy:</pre><pre>(1) Market penetration - Increase sales of an existing product in an existing market</pre><pre>(2) Pro duct development - Improve present products and/or develop new products for the current market</pre><pre>(3) Market development - Sell existing products into ne w markets (e.g. developing export sales)</pre><pre>(4) Diversification - Develop new products for new markets</pre><pre>One thing should be pointed out is how a product appears in relation to other products in the market, or how importance the brand of a product is. Brand is a mixture of tangible and intangible attribu tes symbolized in a trademark, which, if properly managed, permits a business to differentiate its products and services from those of its competitors, add extr a value for consumers who value the brand and improve profitability. Professor D avid Jober identifies seven main factors in building succe ssful brand:</pre><pre>Quality</pre><pre>Quality is a vital ingredient of a good brand. Remember the "core benefits" - the things consumers expect. Th ese must be delivered well, consistently, etc... Research confirms that, statist ically, higher quality brands achieve a higher market share and higher profitabi lity than their inferior competitors.</pre><pre>Positioning</pre><pre>Positionin g is about the position a brand occupies in a market in the minds of consumers. Strong brands have a clear, often unique position in the target market.</pre><pr e>Positioning can be achieved through several means, including brand name, image , service standards, product guarantees, packaging and the way in which it is de livered. In fact, successful positioning usually requires a combination of these things.</pre><pre>Repositioning</pre><pre>Repositioning occurs when a brand tri
es to change its market position to reflect a change in consumer's tastes. This is often required when a brand has become tired, perhaps because its original ma rket has matured or has gone into decline.</pre><pre>Communications</pre><pre>Co mmunications also play a key role in building a successful brand. We suggested t hat brand positioning is essentially about customer perceptions - with the objec tive to build a clearly defined position in the minds of the target audience. Al l elements of the promotional mix need to be used to develop and sustain custome r perceptions. Initially, the challenge is to build awareness, then to develop t he brand personality and reinforce the perception.</pre><pre>First-mover advanta ge</pre><pre>Business strategists often talk about first-mover advantage. In ter ms of brand development, by "first-mover" they mean that it is possibl e for the first successful brand in a market to create a clear positioning in th e minds of target customers before the competition enters the market. There is p lenty of evidence to support this. However, being first into a market does not n ecessarily guarantee long-term success. Competitors - drawn to the high growth a nd profit potential demonstrated by the "market-mover" - will enter th e market and copy the best elements of the leader's brand.</pre><pre>Long-term p erspective</pre><pre>This leads onto another important factor in brand-building: the need to invest in the brand over the long-term. Building customer awareness , communicating the brand's message and creating customer loyalty</pre><pre><spa n class=GramE>takes time. This means that management must "invest&quot ; in a brand, perhaps at the expense of short-term profitability.</pre><pre>Inte rnal marketing</pre><pre>Finally, management should ensure that the brand is mar keted "internally" as well as externally. By this we mean that the who le business should understand the brand values and positioning. This is particul arly important in service businesses where a critical part of the brand value is the type and quality of service that a customer receives.</pre><pre>1.2. Pricin g decisions</pre><pre>Setting the right price is an important part of effective marketing. It is the only element of the marketing mix that generates revenue (p roduct, place, and promotion are all about marketing costs). Put it simply, &quo t;Price is the amount of money for which a product is bought or sold".</pre ><pre>The factors that businesses must consider in determining pricing policy ca n be summarised in two categories - internal factors and external factors, in which the four most important elements are costs, competitors, cust omers and business objectives.</pre><pre>(1) Costs</pre><pre>In order to make a profit, a business should ensure that its products are priced above their total average cost. In the short-term, it may be acceptable to price below total cost if this price exceeds the marginal cost of production - so that the sale still p roduces a positive contribution to fixed costs.</pre><pre>(2) Competitors</pre>< pre>If the business is a monopolist, then it can set any price. At the other ext reme, if a firm operates under conditions of perfect competition, it has no choi ce and must accept the market price. The reality is usually somewhere in between . In such cases the chosen price needs to be very carefully considered relative to those of close competitors.</pre><pre>(3) Customers</pre><pre>Consideration o f customer expectations about price must be addressed. Ideally, a business shoul d attempt to quantify its demand curve to estimate what volume of sales will be achieved at given prices</pre><pre>(4) Business Objectives</pre><pre>Possible pr icing objectives include:</pre><pre>* To maximise profits</pre><pre>* To achieve a target return on i nvestment</pre><pre>* To achieve a target sales figure</pre><pre>* To achieve a target market share</pre><pre>* To match the competition, rather than lead the m arket</pre><pre>1.3. Distribution channels</pre><pre>Distribution (or Place) is the third element of the marketing mix. Most businesses use the third parties or intermediaries to bring their products to market. They select a distribution ch annel which can be defined as "All the organizations through which a produc t must pass between its point of production and consumption".</pre><pre>Why does a business give the job of selling its products to intermediaries? After a ll, using intermediaries mean giving up some control over how products are sold
and who they are sold to. The answer lies in efficiency of distribution costs. I ntermediaries are specialists in selling. They have the contacts, experience and scale of operation which means that greater sales can be achieved than if the p roducing business tried to run a sales operation itself.</pre><pre>Functions of a Distribution Channel</pre><pre>The main function of a distribution channel is to provide a link between production and consumption. Organisations that form any particular distribution channel perform many key functions:</pre><pre>Information: Gathering and distributing ma rket research and intelligence - important for marketing planning</pre><pre>Prom otion: Developing and spreading communications about offers</pre><pre>Contact: F inding and communicating with prospective buyers</pre><pre>Matching: Adjusting t he offer to fit a buyer's needs, including grading, assembling and packaging</pr e><pre>Negotiation: Reaching agreement on price and other terms of the offer</pr e><pre>Physical distribution: Transporting and storing goods</pre><pre>Financing : Acquiring and using funds to cover the costs of the distribution channel</pre> <pre>Risk taking: Assuming some commercial risks by operating the channel (e.g. holding stock)</pre><pre>All of the above functions need to be undertaken in any market. The question is - who performs them and how many levels there need to b e in the distribution channel in order to make it cost effective.</pre><pre>The choice of distribution method depends on a variety of factors:</pre><pre>Influen ce: Comments</pre><pre>Market factors: An important market factor is "buyer behaviour"; how do buyers want to purchase the product? Do they prefer to buy from retailers, locally, via mail order or perhaps over t he Internet? Another important factor is buyer needs for product information, in stallation and servicing. Which channels are best served to provide the customer with the information they need before buying? Does the product need specific te chnical assistance either to install or service a product? Intermediaries are of ten best placed to provide servicing rather than the original producer - for exa mple in the case of motor cars.</pre><pre>The willingness of channel intermediar ies to market product is also a factor. Retailers in particular invest heavily i n properties, shop fitting etc. They may decide not to support a particular prod uct if it requires too much investment (e.g. training, display equipment, wareho using).</pre><pre>Another important factor is intermediary cost. Intermediaries typically charge a "mark-up" or "commission" for participati ng in the channel. This might be deemed unacceptably high for the ultimate produ cer business.</pre><pre>Producer factors:</pre><pre>A key question is whether th e producer has the resources to perform the functions of the channel? For exampl e a producer may not have the resources to recruit, train and equip a sales team . If so, the only option may be to use agents and/or other distributors.</pre>Producers may also feel that they do not possess the customer-based skills to distribute their products. Many channel intermediaries focus heavily on the cus tomer interface as a way of creating competitive advantage and cementing the rel ationship with their supplying producers.</pre><pre>Another factor is the extent to which producers want to maintain control over how, to whom and at what price a product is sold. If a manufacturer sells via a retailer, they effective lose control over the final consumer price, since the retailer sets the price and any relevant discounts or promotional offers. Similarly, there is no guarantee for a producer that their product/(s) are actually been stocked by the retailer. Dir ect distribution gives a producer much more control over these issues.</pre><pre >Product factors:</pre><pre>Large complex products are often supplied direct to customers (e.g. complex medical equipment sold to hospitals). By contrast perish able products (such as frozen food, meat, bread) require relatively short distri bution channels - ideally suited to using intermediaries such as retailers.</pre ><pre>Distribution Intensity There are three broad options - intensive, selectiv e and exclusive distribution:</pre><pre>(1) Intensive distribution aims to provi de saturation coverage of the market by using all available outlets. For many pr oducts, total sales are directly linked to the number of outlets used (e.g. ciga rettes, beer). Intensive distribution is usually required where customers have a range of acceptable brands to choose from. In other words, if one brand is not
available, a customer will simply choose another.</pre><pre>(2) Selective distri bution involves a producer using a limited number of outlets in a geographical a rea to sell products. An advantage of this approach is that the producer can cho ose the most appropriate or best-performing outlets and focus effort (e.g. train ing) on them. Selective distribution works best when consumers are prepared to & quot;shop around" - in other words - they have a preference for a particula r brand or price and will search out the outlets that supply.</pre><pre>(3) Excl usive distribution is an extreme form of selective distribution in which only on e wholesaler, retailer or distributor is used in a specific geographical area.</ pre><pre>1.4. Promotion tools</pre><pre>It is not enough to have good products s old at attractive price in the right place. To generate sales and profits, the b enefits of products have to be communicated to customers. Therefore, "Promo tion is all about companies communicating with customers".</pre><pre>A busi ness's total marketing communications programme is called the promotional mix and consists of a bl end of advertising, personal selling, sales promotion and public relations tools :</pre><pre>Mix Element:Advantages/ Disadvantages</ pre><pre>Advertising:</pre><pre>Good for building awareness</pre><pre>Effective at reaching a wide audience</pre><pre>Repetition of main brand and product posit ioning helps build customer trust Impersonal - cannot answer all a customer's qu estions</pre><pre>Not good at getting customers to make a final purchasing decis ion</pre><pre>Personal Selling:</pre><pre>Highly interactive - lots of communica tion between the buyer and seller</pre><pre>Excellent for communicating complex / detailed product information and features</pre><pre>Relationships can be built up - important if closing the sale made take a long time Costly - employing a s ales force has many hidden costs in addition to wages</pre><pre>Not suitable if there are thousands of important buyers</pre><pre>Sales Promotion:</pre><pre>Can stimulate quick increases in sales by targeting promotional incentives on parti cular products</pre><pre>Good short term tactical tool. If used over the long-te rm, customers may get used to the effect</pre><pre>Too much promotion may damage the brand image</pre><pre>Public Relation:</pre><pre>Often seen as more "c redible" - since the message seems to be coming from a third party (e.g. ma gazine, newspaper)</pre><pre>Cheap way of reaching many customers - if the publi city is achieved through the right media Risk of losing control - cannot always control what other people write or say about your product</pre><pre>Each of the above components of the promotional mix has strengths and weaknesses. There are several factors that should be taken into account in deciding which, and how muc h of each tool to use in a promotional marketing campaign:</pre><pre>(1) Resourc e availability and the cost of each promotional tool</pre><pre>Advertising (part icularly on television and in the national newspapers can be very expensive). Th e overall resource budget for the promotional campaign will often determine whic h tools the business can afford to use.</pre><pre>(2) Market size and concentrat ion</pre><pre>If a market size is small and the number of potential buyers is sm all, then personal selling may be the most cost-effective promotional tool. A go od example of this would be businesses selling software systems designed for sup ermarket retailers. On the other hand, where markets are geographically disperse or, where there are substantial numbers of potential customers, advertising is usually the most effective.</pre><pre>(3) Customer information needs</pre><pre>S ome potential customers need to be provided with detailed, complex information t o help them evaluate a purchase (e.g. buyers of equipment for nuclear power stat ions, or health service managers investing in the latest medical technology). In this situation, personal selling is almost always required - often using sellin g teams rather than just one individual. By contrast, few consumers need much in formation about products such as baked beans or bread. Promotional tools such as brand advertising and sales promotion are much more effective in this case.</pr e><pre>CHAPTER 2 - ANALYSIS OF SAMSUNG HANDSETS' GLOBAL MARKETING STRATEGY</pre> <pre>2.1 Introduction to the company and its handset products</pre><pre>2.1.1 Co rporate overview</pre><pre>Ever since it was founded in 1938, SAMSUNG has contin ually refined its mission statement to respond both to change in itself and in t
he world: "Economic contribution to the nation," "Priority to hum an resources," "Pursuit of rationalism." Each slogan represents s ignificant moments in SAMSUNG's history, reflecting different stages of the comp any's growth from a domestic industrial leader into a global consumer electronic s powerhouse.</pre><pre>In the 1990's, Samsung once again acknowledged the need to transform our mission statement to keep pace with their growing global operat ions, rapid changes in the world economy, and escalating competition from well-e stablished rivals.</pre><pre>They will devote their human resources and technolo gy to create superior products and services, thereby contributing to a better gl obal society.</pre><pre>Their management philosophy represents our strong determ ination to contribute directly to the prosperity of people all over the world a single human society. Key to their efforts is their own people, whose talent a nd creativity are dedicated to doing their best at all times. Technology also pl ays an important role in making it possible to achieve higher standards of livin g. And superior products and services are what they are all about.</pre><pre>The y believe that the success of their contributions to society and to the mutual p rosperity of people across national boundaries truly depends on how they manage the company. Thus, they challenge the world to create the future with customers. Their determination is growth - a perpetual challenge - but always working with in the context of cooperation and inclusion of our customers.</pre><pre>To under stand where they are going, we have a look at some figures extracted from their annual report last year</pre><pre>Financial Overview (WON/DOLLARS/EURO)</pre><pr e>&lt;Tab/&gt;W ON<Tab/&gt;DOLLARS<Tab/&gt;EURO </pre><pre>Net Sales*&lt;Tab/>121,216.9 &lt;Tab/&gt;</pre><pre>101.7 &a mp;lt;Tab/&gt;</pre><pre>90.0</pre><pre>Total Assets&lt;Tab/>204,121.7 &lt;Tab/&gt;</pre><pre>170.4 &a mp;lt;Tab/&gt;</pre><pre>135.8</pre><pre>Total Liabilities&lt;Tab/>136, 388.0 &lt;Tab/&gt;</pre><pre>113.9 &a mp;lt;Tab/&gt;</pre><pre>90.8</pre><pre>Total Stockholder`s Equity&lt;Tab/>67,733.7 &lt;Tab/&gt;</pre><pre>45.8 &am p;lt;Tab/&gt;</pre><pre>48.0</pre><pre>Net Income*&lt;Tab/>6,728.3 &lt;Tab/&gt;</pre><pre>5.6 &amp ;lt;Tab/&gt;</pre><pre>8.4</pre><pre>* Won/U.S. Dollar Yearly Average Exchange Rate : 1,191.56/1<Tab/&gt;</pre><pre>* Won/Euro Yearly Average Exchange Rate : 1,347.32/1<Tab/&gt;</pre><pre>* Won/U.S. Dollar as of the Year End of December 31, 2003 : 1,197.80/1<Tab/&gt;</pre><pre>* Won/Euro as of the Year End of December 31, 2003 : 1,502.58/1<Tab/&gt;</pre><pre>2.1.2. Why study Samsung handsets</pre><pre>2.1.2.1. Global handset market's situation</pre><pre>According to In-Stat/MDR, a high-tech market resea rch firm , Nokia remained the number one cell phone manufacturer in the world in quarter 3, 2004. In the period ending September 30th, Nokia had 31.2% market share, virtually unchanged, but up slightly from the two previous q uarters. Nokia shipped 51.4 mln handsets in the quarter. Nokia was able to regain some l ost market share by sharply cutting handset prices. It paid off in Western Europ e, which showed substantial gains. In North America and Latin America, however, the company lost ground. At the same time, Samsung and LG made sizeable gains.</ pre><pre>Motorola held onto second place, but just barely. The US-based manufact urer shipped 23.3 mln units, giving it a 14.1% market share, up from 13.9% , b ut down sequentially from Q2. Close on Motorola's heels was South Korean maker S amsung, which shipped 22.7 mln units, or 13.8% market share. Samsung's share has been r ising steadily. A year ago, it was 10.3%. Over the course of a year, Samsung's s hare has grown 34%, thanks to its quick-to-market approach with mid-tier clamshe ll phones that feature color displays and integrated digital cameras.</pre><pre> The next three market leaders were: Siemens at number four with an estimated sha re of 7.3% (it reports earnings Nov. 11), LG number five (7.2%), and Sony Ericss on number six (6.5%). LG has enjoyed steady growth this year as well. The South Korean manufacturer leapfrogged London-based Sony Ericsson in the quarter as it shipped 11.8 mln phones. Sony Ericsson's shipments were up sequentially t o 10.7 mln units. LG's growth was attributed to strong sales of GSM and CDMA phones in North America, and an expanding WCDMA market in Europe. Tota l cell phone shipments for the quarter were 165 mln. For the full year, In-Stat/MDR forecasts global shipmen ts of 653 mln mobile phones, a 22% increase over last year. Next year will bring a slowdown, with growth between 7% and 9%, or roughly 705 mln units.</pre><pre>2.1.2.2. Samsung's changing position in the global< /pre><pre>The worldwide market for mobile phones slowed slightly recently due to expected seasonal effects, but still managed to post impressive growth year-onyear, according to IDC's Worldwide Mobile Phone QView. Worldwide mobile phone shipments decreased sequential ly by 5.9 percent in 1Q04 and increased by 29.3 percent year-over-year to 152.7 million units. Additionally, the nascent market for converged mobile devices, or "smartphones," posted a sequential decrease of 5.5 percent but a year -over-year increase of 85.8 percent.</pre><pre>Among the top vendors, Nokia expe rienced the sharpest sequential drop with a decrease of 19.2 percent resulting l argely from a lack of mid-range handsets. As carriers looked for alternative sou rces to fill consumer demand, vendors such as Motorola and Samsung were able to gain significant market share at Nokia's expense. However, despite the loss in m arket share, Nokia remains firmly positioned as the market leader in both the mo bile phone market and the converged mobile device market.</pre><pre>"Despit e the anticipated seasonal effects of the post-holiday first quarter, worldwide mobile phone manufacturers were able to produce significant year-on-year growth on the strength of mid-range handsets featuring color screens and cameras," said David Linsalata, analyst in IDC's Mobile Devices program. "Ad ditionally, the market for converged mobile devices, or 'smartphones," demo nstrated strong growth potential as both enterprises and consumers continue to s
how interest in improved devices combining data and telephony capabilities.&quot ;</pre><pre>With 1.5 billion wireless subscribers expected worldwide by the end of the year, IDC expects the worldwide mobile phone market to surpass 595 millio n units shipped in 2004. Through 2008, the market will continue to expand until it reaches nearly an all-replacement sales scenario towards the end of the decad e with over 800 million mobile phones shipping annually. According to IDC's Worl dwide Mobile Phone 2004-2008 Forecast and Analysis (IDC #31080, April 2004), sal es of 2.5G mobile phones will drive market growth for the next several years wit h sales of 3G mobile phones finally surpassing the 100 million annual unit mark in 2007. The converged mobile device market, surpassing 20 million units shipped worldwide in 2004, will be dominated throughout the decade by Symbian-powered d evices - Microsoft and PalmSource are expected to mount a long-term challenge, but will have greater difficulty gaining exposure to mainstream mobile phone market volume.</pre><pre>"A compelling case for 3G adoption by consumers has yet to be made. Simply put, there a re very few reasons to drive the vast majority of consumers to buy a new 3G mobi le phone," said Alex Slawsby, senior analyst in IDC's Mobile Devices program. &qu ot;As a result, we expect converged mobile devices, powered by Symbian and Micro soft, as well as 2.5G color screen and camera phones to be the core of the overa ll market for several years."</pre><pre>Vendor Highlights.</pre><pre>Nokia - Although Nokia was able to post 17.2 percent year-over-year growth, shipments dropped 19.2 percent sequentially, resulting in a drop in market share of 4.8 pe rcent to 29.3 percent. The decrease came as a result of a product mix weighted t owards entry-level phones and lacking in midrange color and camera phones, areas that proved to be growth catalysts for other companies. Nokia plans to regain i ts market share through a combination of price discounts and the launch of appro ximately 40 new handsets this year.</pre><pre>Motorola - Motorola posted record shipments in 1Q04, bringing its formerly slumping market share up 2.7 percent to 16.6 percent in 1Q04. On the strength of a 51.5 percent year-over-year shipme nt increase driven by sales of GSM camera phones, Motorola boosted its market sh are to 16.6 percent of the worldwide mobile phone market. Going forward, the com pany hopes to extend its recent momentum with a range of new mobile phones focus ing on mobile music, broadband, and productivity, scheduled to come to market th is year.</pre><pre>Samsung - Samsung continued its steady march to overtake Moto rola with a year-on-year shipment increase of 88 percent in 1Q04, increasing Sam sung's market share to 13.1 percent. Samsung's rise came on volume sales of its premium products such as its camera phones and camcorder phones.</pre><pre>Sieme ns - Despite a year-over-year shipment increase of 60 percent, Siemens fell 16 p ercent sequentially, resulting in a 1 percent drop in market share to 8.4 percen t.</pre><pre>Sony Ericsson - After two quarters at the number 6 position, Sony E ricsson re-entered the top 5 with a 63 percent year-over-year shipment increase on increasing momentum from its mid and entry level products. However, Sony Eric sson beat LG Electronics by only 250,000 units, and LG's increasing focus on GSM phones may threaten Sony Ericsson's stay in the top 5.</pre><pre>In 2004, Samsu ng sold 22.98 mln phones to consumers in Q3 2004, giving it a 13.8% market share, compared with sales of 22.39 mln cell phones by Motorola, which was 13.4% of the market. The market share of the world's biggest handset maker Nokia recovered to 30.9%, from 29.7% in Q2. Fourth-placed Siemens ended at 7.6%, up from 6.9%, despite a r ecall of its new 65 range of models which pushed the business into a loss in the quarter. LG climbed to a 6.7% market share, up from 6% in Q2, while Sony Ericss on slipped slightly to 6.4% in Q3 from 6.6%.</pre><pre>Also in this year, Samsun g Electronics Co. Ltd (005930.SE) gained market share at Sweden's largest indepe ndent mobile phone retailer. Samsung had three of the top 10 selling models at T he Phone House.</pre><pre>The Phone House is the Swedish unit of Carphone Warehouse Group Plc (CPW.
LN).</pre><pre>Sony Ericsson, a joint venture of Sony Corp. (SNE) and Telefon AB LM Ericsson (ERICY), continued to lead sales at T he Phone House with four of the top 10 best selling phones in April. Nokia Corp. (NOK) had two mode ls on the list and Siemens AG (SI) one model.</pre><pre>Samsung's gains came at the expense of Nokia</pre><pre>Top 5 Vendors, Worldwide Mobile Phone Shipments a nd Market Share, 1Q 2004 (Preliminary)</pre><pre>Rank&lt;Tab/&gt;Vendor<Tab/>1Q 2004 Market Share</pre><pre> 1<Tab/&gt;Nokia<Tab/>29.3%</pre><pre>2<Tab/&am p;gt;Motorola<Tab/>16.6%</pre><pre>3<Tab/ &gt;Samsung<Tab/>13.1%</pre><pre>4<Tab/& amp;gt;Siemens<Tab/>8.4%</pre><pre>5&lt;Tab/&gt;Sony Ericsson<Tab/>5.8%</pre><pre>&lt;Tab/&gt;Other<Tab/&a mp;gt;26.9%</pre><pre>&lt;Tab/&gt;Total<Tab/&a mp;gt;100.0%</pre><pre>2.2 Samsung's major competitors</pre><pre>2.2.1 Nokia - B est of the rest</pre><pre>Nokia is a world leader in mobile communications, driv ing the growth and sustainability of the broader mobility industry. Nokia connec ts people to each other and the information that matters to them with easy-to-us e and innovative products like mobile phones, devices and solutions for imaging, games, media and businesses. Nokia provides equipment, solutions and services f or network operators and corporations.</pre><pre>Quality is at the heart of ever ything at Nokia - it is the essence of their products, their brand, and their bu siness. It plays a crucial role in maintaining their competitive edge. It is <sp an class=GramE>key to pride, productivity and profitability. To Nokia, it do esn't matter how people say it - quality has to be expressed in every possible w ay and through every possible action.</pre><pre>Nokia firmly believe, to be able to sustain their competitiveness and maintain the leading position, they must m anage both quality and innovation in a balanced way.</pre><pre>Today, innovation has never played a more critical role for Nokia. However, at the same time, the importance of high-quality execution is also increasingly important. It is what truly successful innovation depends on. In addition, having a deep end-user und erstanding is an absolute prerequisite for innovation and quality as it provides continuous feedback for both.</pre><pre>These elements make up what they call t he "three dimensions of quality":</pre><pre>* quality in processes,</pre><pre>* products and</pre><pre>* management.</pre><pre>In each of these dimensions, quality ta kes on a different form - it is not a monolithic but rather a polytheistic appro ach to building a competitive edge.</pre><pre>Commitment to quality improvement is a continuous process - with measurable individual and team goals. With this i n mind it is essential for future competitiveness. It is both a business strateg y and a personal responsibility and it is a part of any company's culture. But a t the end of the day, quality improvement is much, much more than something they can quantify in words or pictures. It is an attitude - a mindset. Quite simply, it is a source of inspiration, energy and excitement.</pre><pre>Nokia's continu ous high investment in R&amp;D is one of our key succe ss factors. In 2004, Nokia's R&amp;D spending totalled EUR 3.7 billion or 12.8% of its net sales. Approxim ately 37% of our employees work in R&amp;D.</pre><pre>In short and medium term, Nokia researchers support the product development units to master key technologies and their evolution. This enables us to develop competitive pro ducts efficiently.</pre><pre>In long term, Research aims to disrupt the present. Research in different sciences with global participation is a prerequisite for creating these disruptions. Research also serves as an organizational pioneer. B y challenging the present working methods and technologies we keep the organizat ion moving. Our researchers are also encouraged to bring forth ideas for new bus iness development.</pre><pre>2.2.2 Motorola - Recent decline</pre><pre>Motorola is a Fortune 100 global communications leader that provides seamless mobility pr oducts and solutions across broadband, embedded systems and wireless networks.<s pan style='mso-spacerun:yes'> Seamless mobility means you can reach the pe ople, things and information you need in your home, auto, workplace and all spac es in between. Seamless mobility harnesses the power of technology convergence and enables smarter, faster, cost-effective and flexible communication. Motorola had sa les of US $31.3 billion in 2004.</pre><pre>Today, Motorola is comprised of four businesses: Connected Home Solutions, Gover nment & Enterprise Mobility Solutions, Mobile Devices and Networks.</pre ><pre>.Connected Home Solutions</pre><pre>Provides a scalable, integrated end-to-end system for the delivery o f broadband services that keeps consumers informed, entertained and connected. Its technology enables network operat ors and retailers to create and execute on new business opportunities by providi ng innovative products and services to the home.</pre><pre>.Government and Enter prise Mobility Solutions</pre><pre>A leading provider of integrated radio communications and informatio n solutions, with more than 65 years of experience in meeting the mission-critic al requirements of public safety, government and enterprise customers worldwide. It also designs, manufactures and s ells automotive and industrial electronics systems and telematics systems that e nable automated roadside assistance, navigation and advanced safety features for automobiles.</pre><pre>.Mobile Devices</pre><pre>Offers market-changing icons o f personal technology - transforming the device formerly known as the cell phone into a universal remote control for life. A leader in multi-mode, multi-band communications products and technologies, Mob ile Devices designs, manufactures, sells and services wireless subscriber and se rver equipment for cellular systems, portable energy storage products and system s, servers and software solutions and related software and accessory products.</ pre><pre>Networks</pre><pre>Delivers proven capabilities in cellular, wireless b roadband and wireline access technologies, with recognized leadership in integrating core networks through wireless IP, wireless softswitch and IP multimedia subsystems. The Networks group is advancing seamless mobility with innovat ive technology solutions, as well as a billion dollar services business with an expanded portfolio delivering support, integration, applications and management. </pre><pre>Motorola has already begun to look beyond traditional lines of busine ss for new opportunities. In fact, we have changed the very way we do business i n order to be ready to deliver the future to customers. Six formerly separate bu sinesses, with expertise in wireless broadband, network services, embedded compu ting, DSL, next generation wireline networking, and Voice over IP (VoIP), are now worki ng as a single Networks team.</pre><pre>2.2.3 Ericsson - Another year loser</pre ><pre>They are the largest supplier of mobile systems in the world and support a ll major standards for wireless communication. They drive the telecoms industry and are shaping the future. The world's 10 largest mobile operators are among th eir customers and some 40% of all mobile calls are made through their systems.</ pre><pre>They provide total solutions - from systems and applications to service s and core technology for mobile handsets. With Sony Ericsson they are also a to
p supplier of complete mobile multi-media products.</pre><pre>They have been act ive worldwide since 1876 and they are today present in more than 140 countries.< /pre><pre>Ericsson supplies operators and service providers around the world wit h end-to-end solutions, for all existing systems, in mobile and broadband Intern et. The solutions include network infrastructure, access equipment and terminals , application enablers and global services. They sell handsets to operators and retailers through Sony Ericsson, and they create revenue through our licensed so lutions and intellectual property rights.</pre><pre>Some 40% of all mobile calls are made through Ericsson systems. They are the only supplier to offer all 2G a nd 3G mobile standards, including all three major standards for next generation mobile networks: WCDMA, EDGE and CDMA2000. Their end-to-end solutions secure ope rators a smooth migration to 3G.</pre><pre>Solutions that help operators transfo rm existing networks, or build new multi-service networks, for phone calls, Inte rnet and multi-media. The ENGINE solution enables operators to provide a broad r ange of services to users. Multi-service backbone and optical networks support f ixed and mobile operators</pre><pre>2.2.4 Siemens - Popularity in Europe</pre>Siemens, headquartered in Berlin and Munich, is one of the world's largest el ectrical engineering and electronics companies. Siemens provides innovative tech nologies and comprehensive know-how to benefit customers in 190 countries. Found ed more than 150 years ago, the company is active in the areas of Information an d Communications, Automation and Control, Power, Transportation, Medical, and Li ghting</pre><pre>Adjusted for currency effects and portfolio activities, Siemens ' sales in fiscal 2004 climbed 3% to 75.2 billion. They <s pan class=GramE>totaled 17.1 billion in Germany, 13.6 billion in the U.S. and 9.3 billion in Asia-Pacific, where China alone a ccounted for 2.9 billion..</pre><pre>At the end of fiscal 2004, Siemens had 430,000 employees worldwide. Of this total, 62% (266,000) worked outside Germany. Germany accounted for 38% (164,000), the othe r European countries for 26% (110,000), the Americas for 22% (95,000), Asia-Paci fic for 12% (52,000), and Africa, the Middle East and the C.I.S. countries for a bout 2% (9,000).</pre><pre>They think their success depends on the success of ou r customers. Siemen provide customers with comprehensive experience and solution s so they can achieve their objectives fast and effectively.</pre><pre>2.3. Anal ysis of Samsung handsets' global marketing strategy</pre><pre>As previously ment ioned, the global handset market has experienced rapid growth over the past few years. Undeniably this is a tremendous growth, and this growth has created a fie rce competition among handset manufacturers as an inevitable and parallel tenden cy. The next parts of this analysis describe how Samsung's marketing strategy dr ive the company's actions in response to such competition to be recognized as on e of the leading global player in the handset industry.</pre><pre>2.3.1. The eff ect of new categories of functionality and style</pre><pre>Six years ago it was unthinkable that Samsung could pose any threat to leaders in the global electron ics as well as handset business. Its global reputation was based on manufacturin g memory chips and selling cheap, knock-off microwaves and TVs through discount retailers. What changed now? The roots of Samsung's transformation began in 1998 when Samsung chairman Kun-Hee Lee set out to reposition the company to sell superior q uality branded electronic products including handset at higher price points. To do that, he felt Samsung had to nurture a global design vision that would produc e products with greater international appeal. For the handset products only, the company has resegmented both its domestic and global market which targets the young generation, especially the females:</pre><pre>-high school bo ys and girls</pre><pre>-students in universities</pre><pre>-young businessmen<pre>As a result, Samsung has distinguished itself from competitors by its qu ick response to both technological improvements and demanding consumer tastes. W ith the launch of the new fashion phone T100, Samsung had an advantage and becam e the first company introduced a clamshell phone with a color internal display. T100 immediately attracted attention of both consumers and distributors. Large b udgets were spent to promote this model more than one year ago. In a year the pr ice for this phone was not greatly reduced, new models from Samsung were launche d but the phone has been sold without problems.</pre><pre>The company began to i ntroduce fashion for clamshell phones in Europe. The only rivals were clamshells from Motorola, but they were functional and not very attractive as fashion phon es. On the contrast, Samsung staked on design. The company chose this strategy because it understood that it couldn't reach other leading manufac turers by features during 1-2 years. Samsung staked on clamshells, though other models were produced as niche solutions.</pre><pre>Of course, the company had se veral failures. A reaction on the new product is not always understandable. One of such failures is N400, which has original design, and automatically moved ant enna, which is a unique features even today. An attempt to introduce functional business clamshells was not successful either, Q-series didn't become popular. At that time phones f rom Samsung were considered belong only to fashion class. Business users didn't think about them while purchasing a phone. Later the company refused to produce advanced phone immediately, it preferred to add new functions in existed models. </pre><pre>Under the rapidly digital-technological innovation and increasingly c hanging customers' demand, the next generation mobile communications internation al standard has come to market. Maybe the most intuitive way to see this new sta ndard is as the 3rd generation of mobile communication. The first was the analog ue systems and networks built in the 1980s, the second the digital technologies that enhanced the quality of transfer and security. The 3rd generation, or 3G, t akes the digital systems several steps further in terms of transfer rate and sec urity and most important of all includes ways of integrating the existing new st andards like CDMA 2000 and W-CDMA into one format. The mobile phones are now not simply a mean of communication, rather they are really a kind of multimedia, a pocket computer. Users are able to access to the Internet, watch movies, listen to MP3, etc. Samsung are not the outsider of this revolution. They are licensed by Microsoft to activate the handsets into very high-advanced products. They hav e developed and introduced the new range of fashion handsets with unique design and extra functionality rather than just telephony. These services add convenien ce and value to lifestyle like never before with data-base and entertainment pos sibilities. Users are able to access to the Internet, watch movies, listen to MP 3, etc. That's the main reason of Samsung handsets' success and its popularity. Especially, with the launch of SGH-D500 - winner of Best Phones Grand Prix of 20 04, a multipurpose, mega-pixel phone, Samsung further aims to consolidate and gr ow its global mobile phone market share in 2005.</pre><pre>2.3.2. Positioning it s handsets as expensive phones</pre><pre>with high quality</pre><pre>With increasing competition, subs cription prices and airtime charges are both decreasing. The figure below descri bes the scope of rate reduction in the global wire telecommunications in general and the handset industry in particular throughout the late 1990s and the early 2000s.</pre><pre>Source: The Leadership Connection TM interviews, Ernst &amp ; Young Analysis</pre><pre>(2000)</pre><pre>When Samsung made only first tries t o conquer global market, a theory that in order to attract new users a company s hould produce cheap phones (less than 100USD) was dominated in the world handset market. So, many manufacturers subsidized their phones themselves or with a hel p of operators. The main goal was to offer the best conditions for the user. The manufacturer hoped that many users would remain admirers of that trademark and next purchase would compensate their costs. In reality, many makers based on thi s idea partly cheapened their brand and turned into manufacturers of cheap devic es in users opinion. Another disadvantage is that it is very difficult to profit from cheap phones production, though value of service equipment, marketing and advertising costs are comparable wit h the products of high and middle class levels.</pre><pre>On the other hand, inv asion of the new company into a market of many serious rivals with expensive pho nes means that sales would be low and market share growth would be very slow. Th ere are some ways to stimulate sales:</pre><pre>Which way has Samsung chosen? Ac tually, the company adopted the third way - improve quality and increase price ( not reduce price or launch low-price "fighting brand" which others riv als such as Ericsson chose). Firstly, developing a collection of new-advanced pr oducts to satisfy the up-to-date market demand (i.g. mentioned in previous part), afterwards conducting acti ve advertising campaign for the new products (i.g. will be studied in the following part). The success of this policy proves that consumers not only like Samsung handsets' design and fun ctionality but also accept its price.</pre><pre>Consolidating its position in th e class of expensive fashion phones due to color screen and form-factor, in prod ucing new phone the company gained new market share. Samsung is unique company b ecause it conquers market from top segments. It is known that entry-level segmen t occupied about 45-50% of sales, though fashion segment - only 5-15%. A fashion solution is an engine which moves cheaper phones from Samsung.</pre><pre>Innova tions in the phones of the company are remained for a long time. The main compet itors are own phones. Reducing the prices for old handsets, the company avoids i t. Simultaneously it prolongs the life cycle of these models and reduces prime c osts.</pre><pre>For example, when the company tried to invade 150-200$ price ban d, it developed a new phone - C100, which is more functional than other phones i n this segment, there are only rivals in 250 USD price group. This phone will be successful, because none of the manufacturers could oppose a similar model in t he near future. Besides the company has been conducting large advertising campaign. Later the price for this phone will reduce and as a result it would be mo re and more popular. It would be profitable for the company.</pre><pre>In short, Samsung has adopted prestige pricing as its golden-rule pricing policy. Prestig e pricing refers to the practice of setting a high price for a product, througho ut its entire life cycle - as opposed to the short term "opportunistic&quot ;, high price of price "skimming". This is done in order to evoke perc eptions of quality and prestige with the product or service.</pre><pre>For produ cts for which prestige pricing may apply like Samsung handsets, the high price i s itself an important motivation for consumers. As incomes rise and consumers be come less price sensitive, the concepts of "quality" and "prestig e" can often assume greater importance as purchasing motivators. Thus adver tisements and promotional strategies focus attention on these aspects of a produ ct, and, not only can a prestige price be sustained, it also becomes self-sustai ning.</pre><pre>2.3.3. Availability of Samsung in the global market</pre><pre>Ho w to select an efficient distribution channel is a very important decision to bu sinesses in general and handset industry in particular. The below chart presents the proportion of Samsung handset sales volume sold by different channels in 2002 (data by June 2002).</pre><pre>There are mainly 3 categories of distribution channels operating in the handset market :</pre><pre>(1) Conventional handset distribution channels</pre><pre>This catego ry covers the first tier distributors, including handset retailers, specialist h andset distributors, specialist handset agents and operators outlets. They are act ing as main forces of handset distribution, amounting to total 82% of sales in 2 002. Most agents or distributors often handle more than one handset brand.</pre> <pre>(2) Conventional IT (Information Technology) distribution channels</pre><pr e>This category refers to the IT product distributors, who distribute all kind o f IT products, such as computors, printers, scanners, etc. These kinds of distribut ors have their systematic distribution channels.</pre><pre>(3) Household applian ces chains</pre><pre>This category, which has wide geographical coverage, can ho
ld large stock, operate flexibility, enjoy direct interface with end-users, and make flexible pricings. Thus they have been the emerging force in handset distri bution.</pre><pre>We can see that the handset retailers account for the largest shares (34%), followed by s pecialist handset agents and specialist handset distributors. Household applianc es chains only account for 4%. However, the trend is now changing and these chai ns are taking an important role in the distribution business.</pre><pre>Due to r egional differences in comsumption caused by the imbalanced of economic development , the characteristics of handset consumption are also different across regions. Manufacturers and general distributors use different strategies accordingly in t heir channel development. When penetrating into any foreign country, where there are great distinctions between major cities versus medium-to-small cities and u rban versus rural areas, Samsung classifies the geographical market to build a d istribution channel into 4 following categories. This classification is now gene rally adopted by many others international general distributors.</pre><pre>-The first category includes metropolitan such as Shanghai, New York, Hanoi, where ch ain retailing is well developed and the structure of distribution is very clear. In such areas, general distributors usually sell directly to the chain stores ( no second tier agents involved).</pre><pre>-The second category of areas include s provinces where population is large and there are over 10 big cities in each p rovince. Two third of these cities have significant sales volume. In these provi nces, there are no or very few powerful agents at province level, but strong loc al agents at city level. The general distributors deal with each city-level <spa n class=GramE>agents seperately.</pre><pre>-The t hird category refers to provinces where the sales volume is quite large but main ly concentrated in one or few big cities. General distributors normally use a fe w key agents in one or two key cities to cover the nearby market.</pre><pre>-The fourth category of areas covers those provinces with small sales amount and gre at geographical difficulties in distribution, e.g. Tibet in China. In such provi nces, general distributors usually use just one provincial agent.</pre><pre><spa n class=GramE>Generally. the harsh competition in global mobile phone market has promted has prompted manufacturers and distributors to seek a way of simplifying the channels. By classifying any national market into four main categories, Samsung has not only covered factors affecting the operation of its distribution channel but also enhanced the efficiency of</pre><pre>the whole distribution channel worldwide.</pre><pre>2.3.4. Ag gressive advertising and sponsorship strategy.</pre><pre>Samsung had one of the largest advertising budgets. It is corporate identity of the company, related no t only to handset products but to all products made by Samsung. Handsets attract ed primary attention due to large advertising campaigns. They are well-known on the market. Unique functions, mostly sound possibilities and color screens, avai lable in Samsung are also very important. Moreover, how to drive the buyer behaviours to be interested in the company's products among other exisiting similar poducts offered by a number of strong competitors and then make them choose Samsung products is much more important. It's the company aggressive advertising policy of transform ing itself into the global brand that makes the difference.</pre><pre>Samsung ha s adopted a holistic approach to global brand communications, implementing sever al independent regional strategies that are guided by a unified brand image. The dramatic growth in Samsung's brand reflects the company's continuing record inv estment in integrated global advertising and marketing initiatives, including it s continued partnership with the Olympic Games.</pre><pre>Certainly making a mor e appealing quality product is one way to change perception, but Samsung has cou pled this with a consistent and highly visible marketing and PR effort across ma
ny channels of communication. Kyung Suh, a manager at Samsung, emphasizes what he refers to as a "holistic brand campaign" strategy to reposition the brand in consume rs' minds. Samsung's mission is to associate its brand in consumers' minds with products that are beautiful, avant-garde and user-friendly.</pre><pre>Suh also cites Samsung's commitment to a single global adver tising agency, which allows it to control consistency and continuity in its comm unications across all markets. The brand owners have also made good use of Inter net advertising on heavily visited sites, sponsorship and product placement in m ovies such as the The Matrix: Reloaded, sponsorship of popular sporting events such as the Olympics, and new sponsor of Chelsea Footbal Club. The attention to entertainment marketing, espe cially the Hollywood penetration is seen as a way to "enhance brand familia rity".</pre><pre>Obviously, Samsung has marketed itself much more efficient ly. They are reaping the benefits of having set up a proper global marketing org anization. All those years they have spent much more and the visibility of Samsu ng is much bigger now. Two years ago they sponsored the Sydney Olympics; they ar e in the movies. All those things help to push the brand forward. Samsung intend s to concentrate on maximizing sponsorship of the Olympics in Athens 2004 to con tinue the global association with popular quality events.</pre><pre>Employing th e latest news on Samsung homepage, Chelsea have completed the biggest club spons orship deal in English football as they announced a five-year contract with elec tronics firm Samsung worth just over $50million. Under the deal, the logo " Samsung Mobile" will appear on shirts for the club's centenary season. With Chelsea's recently incredible success, Samsung can foresee an increase in its s ales volume in England, where Vodafone is popularity.</pre><pre>What is really i mpressive is the Samsung's aggressive penetration into Hollywood. Understanding the tremendous influences shaped by Hollywood celebrities on the young generatio n life (i.e. heavy targeted customers of the company), Samsung intended to marke t itself throughout Hollywood is a crucial road to success, and without any doub t, The Matrix: Reloaded has marked the starting point of Samsung ambitious plan' s sponsorship for Hollywood movies.</pre><pre>CHAPTER 3</pre><pre>EVALUATION AND RECOMMENDATION</pre><pre>3.1. Samsung practices in Vietnam</pre><pre>It seems t hat almost all well-known trademarks of mobile phones could be found in Vietnam. For 2004 Nokia occupies the leading position with</pre><pre>around 50% of the market share, while Samsung takes the secon d rank with around 34%. Other producers like Motorola, Siemens, Sony Ericsson, L G and Panasonic, etc. also mark their presence in this market.</pre><pre>Source: Strategy Analytics</pre><pre>Vietnam, a country of 81 million people with incre asing economy growth rate and cosumer purchasing power, provides excellent opportunities f or wireless services market including handset manufactures. Mobile phone manufacturer Samsung has stated that Vietnam is th e fastest-growing market for its products and services. The reason why Samsung h andsets are so interested in Vietnam is mainly rooted from many similarities bet ween Vietnamese and Korean culture. The Vietnameses, particularly young people, are much influenced by Korean movies in a number of ways. Thus, the popularity of Samsung in Vietnam is easy to understand.</pre><pre>Over the last few years, CDMA (Code Division M ultiple Access) cellular service in Vietnam is going to be significant with SK T elecom providing the technological expertise and Samsung and LG Electronics prov iding the marketing muscle. However, there is still a degree of unfair play as S K Telecom learned during its rollout of the CDMA S-Fone service due to the monopoly of the VNPT, which may pose an avoidable threat to Samsung. Also, the Vietnamese government has been seekin g the continued growth of mobile networks, especially expansion of network cover age to the poorer provinces. We would like to recommend that Samsung, with its s ystematic distribution channel, take this as a potential of development.</pre>3.2. Will Samsung maintain and increase the success in its bid to tighten the
gap with Nokia and Motorola?</pre><pre>Industry analysts say Samsung has been c losing the gap on both Nokia and Motorola recently. And there are many signs sho wing and proving that Samsung can maintain and increase the success in its bid t o tighten that gap</pre><pre>A senior Samsung Electronics official on Monday pre dicted the South Korean company will soon overtake Motorola as the world's secon d largest mobile phone vendor.</pre><pre>Just a few years after entering the wireless telecommunications mark et, the company - one of the sponsors of the Olympic Games - stands behind Finla nd's Nokia and U.S.-based Motorola in term of sales volume. Moreover, Sam sung is very strong in the CDMA market</pre><pre>CDMA, or code division multiple access, is widely used in North America, Japan, South Korea and China. Elsewher e, GSM, or global system for mobile communications, is popular, covering 70 perc ent of the world's wireless users. Samsung i s pushing consumers to view its mobile phones as a high-end luxury item, leaving the low- and mid-end phones to others.</pre><pre>Their market position, even in the GSM market, is getting better and better</pre><pre>Samsung's mobile phones symbolize a kind of luxury goods. That image "can easily be transferred ... to the total Samsung products" such as televisions, DVDs, refrigerators an d air conditioners.</pre><pre>"Mobile phones are a kind of flagship product for Samsung. That's the reason why we emphasize these mobile phones with such a great extent of sports marketing and other marketing programs," he said.</ pre><pre>Samsung recently introduced a three mega-pixel camera phone in South Ko rea, and plans to move it to GSM markets "sooner or later," he added.< /pre><pre>While the American and European markets are currently the biggest, the company sees its greatest growth potential in China and India, while Russia is also promising, he said.</pre><pre>"We have to adjust our strategy a little bit for the India market situation, because the income level is not so high as the Europeans or Americans, so they cannot buy lux ury phones," Chang said.</pre><pre>Samsung began sponsoring the Olympics wi th the 1998 winter games in Nagano. It has signed a contract with the Internatio nal Olympic Committee to continue through the Beijing games in 2008, and will li kely continue afterward</pre><pre>The marketing strategy using this Olympic spon sorship plays a very vital role in raising our brand awareness throughout the wo rld</pre><pre>Samsung will rock the boat in the global mobile phone industry by becoming more aggressive.</pre><pre>They have the plan to beat Nokia in the mark etplace but for now, they managed to overtake Motorola. Two different surveys of the handset market show growth in handset demand, but declines in market share of the Finnish vendor in the third quarter of this year.</pre><pre>Sony Ericsson and Motorola both reported strong fourth-quarter sales, while Samsung slowed up -- a development the company says is down to a strategy that should boost first -quarter figures.</pre><pre>In 2003, Sony Ericsson said Tuesday it turned a net profit of 55 million euros in the fourth quarter, nearly a 30% increase over 200 3, on a 40% rise in sales to 2 billion euros, while rival Motorola said its prof its jumped up more than 50 percent to $654 million, on sales of $8.84 billion, 2 7% higher than last year. Contrast these results with those reported by Samsung, when the company said falling handset prices helped push profits lower for the first time in six quarters, to 1.8 trillion won ($1.74 billion), from 1.9 trilli on a year earlier. Given Samsung's momentum going into the quarter -- the previo us quarter was the first time market watchers said it had passed Motorola as the second-biggest handset vendor -- and its strength in high-end phones, its slowd own was a bit surprising.</pre><pre>Samsung says the lower fourth-quarter sales were part of a strategy to grab share in the first quarter, a ploy that's worked the last two years. A spokesman for the company told The Wall Street Journal th at Samsung believes holiday shoppers are extremely price-sensitive, and won't be attracted to its pricey models. So it clears out existing inventory in the four th quarter, then boosts shipments in the first so as to maintain a high a verage selling price. Samsung says it can avoid having to slash first-quarter pr ices on unsold inventory this way -- even though its margins were squeezed in th e fourth quarter by price cuts to follow those enacted by Nokia.</pre><pre>It's
a wise strategy, from many angles. It could make sense that the company expects its rivals to be licking their wounds, so to speak, in the first quarter, so it can pounce then and steal share. But the whole strategy is predicated on the bel ief that high-priced phones don't sell well in the fourth quarter, something tha t Sony Ericsson and Motorola's results -- and even Samsung's sales of certain mo dels -- don't bear out.</pre><pre>Motorola saw very strong sales of its expensiv e, ultra-thin RAZR handset, an Sony Ericsson says its 3G devices and c ameraphones sold well, and its average selling price in the quarter incre ased. Meanwhile, Samsung's D500 model, which features a 1.3 megapixel came ra and a number of other advanced features, was a top seller in Europe for Chris tmas, and the company sold 40,000 units of a five-megapixel model at $1000 each in Korea in December alone. So there's no high-end demand?</pre><pre>Unsu rprisingly, Motorola executives say it increased its market share in the quarter , while Sony Ericsson says its held steady. It doesn't sound l ike Samsung will be surprised if its falls. Samsung is betting on a big first qu arter, but the mometum may have already swung back to Mot orola, and with a lot of share to be up for grabs in the coming year, Sam sung could be on the back foot.</pre><pre>Although some estimates are saying the number of mobile-phone users could hit 2 billion by year's end, most prediction s see handset sales growing by 10 percent or less. In 2004, the market grew by a round a third, with the final tally being something like 630-670 million, depend ing on which analyst you like. Toss in Siemens' possible exit from the market wi th that slowdown, and there could be a lot of movement in the market in terms of share this year.Samsung, day by day is proving that their marketing str ategy is going on the right track.</pre><pre>CONCLUSION.</pre><pre>Earlier this year, I nterbrand declared Samsung as the world's "fastest growing brand&quo t; for the second year in a row, ranking it as the 25th largest brand, up from 4 2nd place in 2001. The continuously strong rise of Samsung's brand value reflects the company's commitment to invest in its brand on a global scale and make brand value a key corporate target throughout the organization from including the CEO and all employees. Samsung has successfu lly made brand building the key focus of its marketing strategy including produc t development, selection of distribution channels, channel marketing as well as external and internal communications. Jan Lindemann, Global Managing Director of In terbrand said that "Samsung's key success factor is management's amb ition and determination to make Samsung the leading brand in its field and to pu t the required investments and organization behind the brand."</pre><pre>Re ferences:</pre><pre> De Mooij, M. (1994), Advertising Worldwide: Concepts, Theories and Practice of International, Multinational and Global Advertising (2nd Ed), Pr entice Hall International (UF) Ltd.: Redwood Books, Trowbrige, Wiltshire, Great Britain.</pre><pre> De Mooij, M. (1998), Global Marketing and Advertising: Understa nding Cultural Paradoxes, Sage Publications: Thousand Oaks, CA.</pre><pre>&# 61591; Ansoff (1995), Advertising Management (5th ed.), Prentice Ha ll, NJ: Upper Saddle River.</pre><pre> David Jober (2000), "The Globalization of Markets," Harv ard Business Reivew (61), May/June, pp. 92-102</pre><pre>http ://www.AsiaPacificRearchGroup/Vietnam_Mobile_Wireless_ Telecommunications_Research_Market_Korea.htm</pre><pre> ht
tp://www.brandchannel.com/Can Nokia be beat.htm</pre><pre> http://ww w.interbrand.com</pre><pre> http://www.businessweek.com</pre><pre>&a mp;#61591; http://www.Mobile-review.com</pre><pre> http://www.samsun ggroup.com</pre></div> </body> </html>

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