05-11-2016, 02:56 PM
A Study to Increase Penetration Level & Brand Loyalty amongexisting consumers of Samsung India Electronics Ltd.
1465379790-AStudytoIncreasePenetrationLevelan.docx (Size: 116.47 KB / Downloads: 5)
SUMMARY
The main objective of doing this project is to understand, the overall BRANDING of SAMSUNG Electronics and to compare it will the India market with regards to its brand building in terms of advertising, marketing, market share with the Indian competitors.
The American Marketing Association (AMA) defines a brand as a "name, term, sign, symbol or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of other sellers.
The objectives that a good brand will achieve include:
• Deliver the message clearly
• Confirms your credibility
• Connects your target prospects emotionally
• Motivates the buyer
• Concrete User Loyalty
Consumption of manufactured consumer goods is recognized as one of most widely accepted measures of standard of living and quality of life. Consumer goods manufacturing industry provides the driving force for stimulating rapid economic growth. The major players are Blue Star Ltd., Mirc Electronics Ltd., Whirlpool of India Ltd., Philips (India) Ltd., BPL Ltd., Sony Corporation Ltd., Samsung India Ltd., SAMSUNG Electronics India Ltd., Videocon International Ltd., Thomson Ltd. & Daewoo Ltd
SAMSUNG Electronics India Pvt. Ltd., a wholly owned subsidiary of SAMSUNG Electronics, South Korea was established in January, 1997 after clearance from the Foreign Investment Promotion Board (FIPB).
SAMSUNG Electronics India is the fastest growing company in the consumer electronics, home appliances and computer peripherals industry today. SAMSUNG Electronics is continually providing superior technology products & value for money to more than 50 lakh households in India. On January 1,1995 the group formally changed its name to SAMSUNG Group from the original name Lucky-GoldStar and embarked on a new corporate identity program. The new 'face of the future' logo symbolized the five concepts of world, future, youth, humans and technology, which the group believed were significant elements for growth and development.
BRAND IDENTITY: Delightfully smart
The SAMSUNG brand is composed of four basic elements:
The Values, The Promise, The Benefits, and The Personality
The SAMSUNG Electronics logo uses the SAMSUNG Group master brand as the primary identifier of all SAMSUNG
Electronics products.
Understanding of the Indian consumer helped SAMSUNG in achieving its marketing objectives.
Growth drivers:
¾ Distribution
channel
¾ Research and development:
¾ The retail way
¾ Local
manufacturing
¾ Innovative marketing and promotions
¾ Brand-building efforts has focused on usurping the health platform
¾ Advertising
Bollywood Icon Abhishek Bachchan to be ‘The Face of Home Appliances’ At SAMSUNG
The Rang De Basanti-SAMSUNG association
SAMSUNG – TV commercial featuring James Bond
Capturing the rural market. The rural market in India with its size and demand base offers many opportunities to marketers. Two-thirds of the country's consumers live in rural and semi-urban areas and almost half of the national income is generated there. One reason for SAMSUNG to enter the rural market is that SAMSUNG have products at prices that can address these markets.
Competitors: BPL Ltd, Videocon Industries, Mirc Electronics, Godrej Appliances.
Market share of SAMSUNG compared with other competitors, on basis of colour televisions, washing machines, refrigerators, microwaves ovens, DVD players.
Facts and figures for SAMSUNG Electronics India, in terms of its recent and expected turnover and growth
OBJECTIVE:
The main objective of doing this project is to comprehend, the overall Increase Penetration Level & Brand Loyalty among existing consumers of Samsung India Electronics Ltd.
and to understand what are the brand building exercises undertaken in the India market, and to compare the same with the Indian competitors.
BRANDING
The American Marketing Association (AMA) defines a brand as a "name, term, sign, symbol or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of other sellers.
Therefore it makes sense to understand that branding is not about getting your target market to choose you over the competition, but it is about getting your prospects to see you as the only one that provides a solution to their problem.
The objectives that a good brand will achieve include:
• Deliver the message clearly
• Confirms your credibility
• Connects your target prospects emotionally
• Motivates the buyer
• Concrete User Loyalty
To succeed in branding you must understand the needs and wants of your customers and prospects.
A strong brand is invaluable as the battle for customers intensifies day by day. It's important to spend time investing in researching, defining, and building your brand. After all; your brand is the source of a promise to your consumer. It's a foundational piece in your marketing communication and one you do not want to be without.
2.1 Brand Personality:
Based on the premise that brands can have personalities in much the same way as humans, Brand Personality describes brands in terms of human characteristics. Brand personality is seen as a valuable factor in increasing brand engagement and brand attachment, in much the same way as people relate and bind to other people. Much of the work in the area of brand personality is based on translated theories of human personality and using similar measures of personality attributes and factors.
2.2 Brand Image:
Like brand personality, brand image is not something you have or you don't! A brand is unlikely to have one brand image, but several, though one or two may predominate. The key in brand image research is to identify or develop the most powerful images and reinforce them through subsequent brand communications. The term "brand image" gained popularity as evidence began to grow that the feelings and images associated with a brand were powerful purchase influencers, though brand recognition, recall and brand identity. It is based on the proposition that consumers buy not only a product (commodity), but also the image associations of the product, such as power, wealth, sophistication, and most importantly identification and association with other users of the brand. In a consumer led world, people tend to define themselves and their Jungian "persona" by their possessions. According to Sigmund Freud, the ego and superego control to a large extent the image and personality that people would like others to have of them.
Good brand images are instantly evoked, are positive, and are almost always unique among competitive brands. Brand image can be reinforced by brand communications such as packaging,
advertising, promotion, customer service, word-of-mouth and other aspects of the brand experience.
Brand images are usually evoked by asking consumers the first words/images that come to their mind when a certain brand is mentioned (sometimes called "top of mind"). When responses are highly variable, non-forthcoming, or refer to non-image attributes such as cost, it is an indicator of a weak brand image
3. TEN CRUCIAL STEPS A SUCCESSFUL CORPORATE BRANDING
STRATEGY, ENTAILS SERVING AS A USEFUL GUIDE FOR ANY
CORPORATE BRANDING PROJECT.
1. The CEO needs to lead the brand strategy work: The starting point for corporate branding must be in the board room, which also serves as the most important check-point during the project. The CEO must be personally involved in the brand strategy work he/she must be passionate and fully buy into the idea of branding. To ensure success, despite the daily and stressful routine involving multiple duties. The CEO must be backed by a strong brand management team of senior contributors, who can facilitate continuous development and integration of the new strategy.
2. Build your own model as not every model suits all: All companies have their own specific requirements, their own set of business values, and a unique way of doing things.
Therefore, even the best and most comprehensive branding models have to be tailored to meet these needs and requirements. Often, important adjustments are required to align them with other similar business models and strategies in the company to create a simplified toolbox. Remember that branding is the face of a business strategy so these two areas must go hand in hand.
3. Involve your stakeholders including customers: Who knows more about your company than your customers, employees and various other stakeholders? This is common sense, but many companies these simple and easily accessible sources in providing valuable information for the branding strategy. A simple rule is to use 5% of the marketing budget on research and at least obtain a fair picture of the current business landscape including the current brand image among stakeholders, brand positioning and also any critical paths ahead. Put simply, do not forget the valuable voice of your customers in this process.
4. Advance the corporate vision: The corporate branding strategy is an excellent channel for advancing the corporate vision throughout the company. It allows management to involve,
educate and align everyone around the corporate objectives, values and future pathway. It provides a guiding star and leads everyone in the same direction. (The internal efforts count towards least 50% of making a corporate branding strategy successful).
5. Exploit new technology: Modern technology should play a part in a successful corporate branding strategy. Technology contributes to improving effectiveness and improving the competitive edge of the corporation. A well-designed and fully updated Intranet is a must in today's working environment which has become increasingly virtual, with employees working from home, from other locations and traveling across the globe. An Extranet can facilitate more seamless integration with strategic partners, suppliers and customers, avoiding time consuming paper work and manual handling of many issues. A company website is not only a must, but rather a crucial channel for any modern corporation regardless of size. If the corporation is not accessible on the Internet, it does not exist! The more professional the website is, the better the perception among the Internet savvy modern customer. Gone are the days where corporations could get along with a business card portrayed on the Internet.
6. Empower people to become brand ambassadors: The most important asset in any organization is people. They interact every day with colleagues, customers, suppliers, competitors and industry experts. As well as interacting with an impressive number of people totally disconnected to the corporation in the form of family members, friends, former colleagues and many others. Hence they serve as the corporations most important brand ambassador as word-of-mouth can be extremely valuable and have a great impact on the overall corporate brand image. The most effective way to turn employees into brand ambassadors is to train everyone adequately in the corporate brand strategy (vision, values and personality etc.) making sure they fully understand - and believe! - What exactly the corporation aims to be in the minds of its customers and stakeholders. Nike is a brand which is known for their efforts in educating and empowering everyone employed by the company to be strong brand ambassadors.
7. Create the right delivery system: The corporate brand is the face of the business strategy and basically it promises what all stakeholders should expect from the corporation. Therefore, the delivery of the right products and services should be carefully scrutinized and evaluated on performance before any corporation starts a corporate branding project. Think of the cradle to grave concept, of a lifelong customer and the value he/she will provide in such a time span. Make sure he/she is handled with outstanding care according to internal specifications and outside expectations. The moment of truth is when the corporate brand promise is delivered well - and it
does not hurt if the corporation exceeds the customer expectation. Singapore Airlines runs a very rigid, detailed and in-depth description of any customer touch point with the corporation.
Resources are spent on making sure it actually does happen every time to every customer. All employees regardless of title and rank from Singapore Airlines spend a significant amount of workdays being trained every year.
8. Communicate!: To bring the corporate brand to life one needs to implement a range of well-planned, well-executed marketing activities, ensuring the overall messages are consistent, clear and relevant to the target audiences. Making sure the various messages are concise and easy to comprehend. Do not try to communicate every single point from the corporate branding strategy.
Instead, use a selective approach, will make much more impact using the same resources.
9. Measure the brand performance: A brand is accountable and so too should a corporate brand. How much value does it provide to the corporation and how instrumental is the brand in securing competitiveness? These are some of the questions which need to be answered and which the CEO will automatically seek as part of his/her commitment to run the strategy successfully. The brand equity consists of various individually tailor-made key performance indicators (including the financial brand value) needs to be tracked regularly. A brand score card can help facilitate an overview of the brand equity and which gauge progress as the strategy is implemented.
10. Adjust relentlessly and be ready to raise your own bar all the times: The business landscape is changing almost every day in every industry. Hence the corporation needs to evaluate and possibly adjust the corporate branding strategy on a regular basis. Obviously, a corporate brand should stay relevant, differentiated and consistent throughout time, so it is a crucial balance. The basic parts of the corporate branding strategy like vision, identity, personality and values are not to be changed often as they are the basic components. The changes are rather small and involve the thousands of daily actions and interpersonal behaviors, which the corporations employ as part of the brand marketing efforts. But make sure complacency does not take root in the organization and affect goal setting. The strongest brands are the ones which are driven forward by owners whom never get tired of raising their own bar. They become their own change agents - and brand champions for great brands.
4. INTRODUCTION TO CONSUMER DURABLES INDUSTRY
With Indian economy increasingly witnessing structural transformation from a rural, agricultural one to more urban industrialized one, consumer durable goods sector is fast emerging as an important segment of the economy.
Consumption of manufactured consumer goods is recognized as one of most widely accepted measures of standard of living and quality of life. Consumer goods manufacturing industry provides the driving force for stimulating rapid economic growth. The growth rate of manufacturing and consumer goods industry normally surpasses that of agriculture and service sectors. It is for this reason that the manufacturing and consumer goods durable industry is considered the backbone of economy
4.1 Background
Prior to liberalization, the Consumer Durables sector in India was restricted to a handful of domestic players like Godrej, Allwyn, Kelvinator and Voltas. Together, they controlled nearly 90% of the market.
They were first superceded by players like BPL and Videocon in the early 1990s, who invested in brand-building and in enhancing distribution and service channels. Then, with liberalization came a spate of foreign players from SAMSUNG Electronics to Sony to Aiwa.
Rs 23,000-crore consumer durables industry can be divided into two types: consumer electronics and consumer utilities. Consumer electronics is basically entertainment systems like television, VCRs, audio systems and home theater systems. Consumer utilities are other household appliances like refrigerators, washing machines, air conditioners, food processors, and vacuum cleaners. On most third world countries, consumer durables like the refrigerator and television are most popular. Out of these, the television segment is undoubtedly the largest segment. Products in the white goods segment come next to the CTVs in the purchasing hierarchy of the Indian consumer.
Over the years, demand for consumer durables has increased with rising income levels, double-income families, changing lifestyles, availability of credit, increasing consumer awareness and introduction of new models. Products like air conditioners are no longer perceived as luxury products
4.2 Current Scenario
Most of the segments in this sector are characterized by intense competition, emergence of new companies (especially MNCs), introduction of state-of-the-art models, price discounts and exchange schemes. MNCs continue to dominate the Indian consumer durable segment, which is apparent from the fact that these companies command more than 65% market share in the colour television (CTV) segment.
4.3 Major Players
The major players in the consumer durables industry, operating in different sectors such as air conditioners, washing machines, refrigerators & television: Blue Star Ltd., Mirc Electronics Ltd., Whirlpool of India Ltd., Philips (India) Ltd., BPL Ltd., Sony Corporation Ltd., Samsung India Ltd., SAMSUNG
Electronics India Ltd., Videocon International Ltd., Thomson Ltd. & Daewoo Ltd.
4.4 Demand/Supply
Supply growth is high across all the segments. But the organized sector has gained substantial market share from the unorganized segment in recent years. However, there are fewer players in segments like dishwashers and vacuum cleaners. Cyclical and seasonal demand is high during festive season and is generally dependent on good monsoons. There are certain factors in the consumer durables industry, which are considered as demand drivers.
They are:
1. The degree of distribution network in the market
2. The advertising and marketing strategy adopted by the players in the industry.
3. The brand image of the product as perceived by the consumer.
4. The technology used by the company viz. state-of-art technology or an older version.
5. The ability of the company to introduce newer products and newer product features.
6. The capability of the company to service its products 'The discount schemes and consumer finance facility available.
7. The market positioning of the product.
8. The cost competitiveness and pricing strategy of the company.
9. The financial strength of the players.
SUCCESS FACTORS FOR CONSUMER DURABLE INDUSTRY
Indian consumer durables industry is going through a consolidation phase with MNC
companies going in for strategies to increase market share. Certain success factors for this industry are identified as follows:
5.1 Technology:
Rising competition has resulted in major competitors introducing technologically superior products at competitive prices. This means the technology input is gaining more and more importance. In this regard, the large MNC players score over their Indian counterparts as they can always source technology from their parents. On the other hand, Indian companies rely on the outside sources for their technology requirements.
5.2 Knowledge of the local market:
Indian consumer durables market is different from other markets. Hence understanding these peculiarities is important for the long-term survival. For example, Samsung launched the “Super Horn”
brand after it discovered that Indian consumers prefer loud noise. Indian companies are better placed in this regard as they know the market pretty well.
5.3 Strong distribution network:
Tough competition means that a proper mindshare of the consumer has to be maintained and the product has to be made visible. Volumes in this business are narrow and profitability comes from volumes. To achieve volumes, deep penetration of the market is necessary. Indian companies score a point here as being in the market for a longer time; they have developed strong distribution channels.
5.4 Good brand image:
Perception of a particular brand plays an important role in purchase decision. A typical Indian consumer looks for value for money when he makes purchase of white goods, as the price involved is significant and unlike developed markets, Indians do not have the buy, use and throw mindset.
Hence, consumer also looks for reliability of the product. All this is conveyed through strong brand awareness.
6. SWOT ANALYSIS: CONSUMER DURABLE INDUSTRY
STRENGTH WEAKNESS
1. Accessory to Necessary ”Air-
1. Supply continues to outstrip conditioners” are no longer perceived to Demand. Demand Cyclical and be an item of luxury. seasonal.
2. Advancement of technology which
2. Volatile performance of the gives the companies ability to introduce agricultural sector has a negative new products and new product features impact on demand. The sector's performance is highly dependent on
3. High Growth. Key drivers being monsoon and reforms, which has failed Urban and Rural.often.
4. Government Policies in favour of Industry includes infrastructure development, reduction in excise duty and so on
OPPORTUNITY THREAT
1. Diversification. Developing new
1. Dozen companies operating in the
products for new market
white goods segment. Prices would
continue to remain depressed and
2. Easy availability of finance has
margins will be under pressure.
stimulated consumers to buy durables.
2. Threats of cheaper imports from
China and other South East Asian
countries
7. FUTURE SCENARIO
Rising rate of growth of GDP, growth in disposable income, improved lifestyles, rising purchasing power of people with higher propensity to consume with preference for sophisticated brands would provide constant impetus to growth of white goods industry segment makes future of consumer durable industry beneficial will rise the expectation of consumer durable industry, While the consumer durable market is
facing a slowdown due to saturation in the urban market, rural consumers should be provided with easily payable consumer finances schemes.
Rural India, which accounts for nearly 70 per cent of the total number of households, has a two per cent penetration in case of refrigerators and 0.5 per cent for washing machines, offers plenty of scope and opportunities for the white goods industry. By the industry itself the rural market is growing faster than the urban India now. The urban market is a replacement and up-gradation market now.
7.1 Conclusion and Recommendation
It Contributes more than 5.5% to index of Industrial Production and provides jobs to lakhs of professionals, Skilled, Semi Skilled and unskilled workers, particularly women. It improves the quality of life of people by providing Entertainment / information / education / comfort and helps reduce daily chores, particularly for housewives. But the importance of the sector in National Economy remains unnoticed.
"Low Penetration means opportunity: The consumer electronic and home appliance which forms the part of consumer durable industry is categorized by low penetration. Television, Refrigerator and Air-conditioner have penetration of 24%, 13% & 2% respectively. This means huge opportunity and untapped market.
7.2 Problem Areas: Some Of The Reason Attributable To Industry Are As
Follows-
Ø Inadequate stress on R&D
Ø Quality - Yet an issue
Ø After Sale Service & Customer Satisfaction
7.3 Action for Industry for Growth
Ø Commit sufficient resources for R&D
Ø Need to be more quality conscious
Ø Need to improve After Sales Services
Samsung today owes much of its success to its Value Innovation Programme. With 6 design labs staffed by 450 people it is serious about understanding what it is consumers need long before considering the technologies required to deliver them. It believes (and, to be fair, evidence suggests) that success in consumer electronics can only ever be short term and there is therefore a pressing need for continuous innovation in order to develop new technology platforms and create products that are first of its kind in the marketplace.
Samsung spends more than $6bn on research annually. It recognises that many of its products, such as semiconductors and flat-screens, are now basic commodities, and its focus is on producing iconic devices for the next generation as Sony’s Walkman was in the ’80s and the iPod is today. Samsung’s innovation focus is therefore set firmly on design and, most specifically, on the design of digital TVs. Samsung launched the R7 LCD TV in 2005 which paved the way for the 2007 “Bordeaux”, a flat screen television with contours reminiscent of a wine glass. This is Samsung’s first LCD television to sell more than 1m units.
Samsung has also turned its hand to designing slick mobile phones, teaming up with Bang & Olufsen to produce the Serene, and most recently the Serenata handset. Described by FHM as “cooler than an Eskimo in an Armani anorak” it is certainly giving its peers a run for their money. In the third quarter of 2007 Samsung’s mobile phone division overtook Motorola to gain second place in the market and has again seen growth in handset sales reaching 14% share. Although still far behind Nokia, with the increased demand for 3G handsets and its strong position in emerging markets, Samsung expects a further growth.
However, it is not all flash and glamour: Up until recently Samsung’s memory division was responsible for 70% of the profit but overcapacity has led to an industry wide decline. Undaunted however, Samsung, which often makes big investments during downturns so that it can increase its market share and make bigger profits when the industry cycle picks up, is raising its capital investment in this division. As peers cut back this is a bold move that signals a strong confidence in the eventual upturn of the memory market. With a brand value now greater than Sony, it is clear that Samsung’s strategy of delivering high quality products with an emphasis on design is paying off and the company is confident of its future performance. Time and again Samsung has proved it is able to look into the future and create what’s just around the corner for the rest of us.