As part of my studies, I had to make a pitch for the launch of a new product offering in the form of an executive presentation to the Senior Management Team of “SAMSUNG”. The aim of the Pitch is to help Senior Management to decide on its future Marketing Strategy in China.
2. TABLE OF CONTENTS
Project’s Description
Countries Comparison
Situation Analysis: China
Marketing Strategies
Financial Situation
International Marketing of the Product
Conclusions
References
3. DESCRIPTION OF THE
PROJECT
Wireless Ear Bud with automatic translation
« SAMSUNG UNIVERSAL EAR »
Our
Marketing
Concept
INNOVATION
Create a new market
and demand in a
saturated market
Competitive advantage
Good for the company
notoriety
STANDARDIZATION AND
INTERNATIONALIZATION
Contributor to the National and
International Economic Well-
Being
Increase our activity
Increase our portfolio
Comparative advantage
5. INNOVATIONS AND
OBJECTIVES
Identification of needs:
What is desirable to users?
What is possible with the technology?
What is viable in the market place?
PROBLEM OF COMMUNICATION BECAUSE OF
THE LANGUAGE BARRIERS
7. RESOURCES & CAPABILITIES
VRIO Framework V R I O Competitive implication
Strong corporate culture ✓ ✓ ✓ ✓
Sustainable competitive
advantage
Strong investment in R&D ✓ ✓ ✓ ✓
Temporary competitive
advantage
Human resources (management
team) ✓ ✓ ✓ ✓
Sustainable competitive
advantage
High qualified employees ✓ ✓ ✓ ✓
Sustainable competitve
advantage
Innovative and premium product ✓ ✓ ✓ ✓
Sustainable competitive
advantage
‘The VRIO Framework asks a set of four questions: whether firm’s resources are
valuable, rare, costly to imitate and exploited by the organization. It helps managers to
identify their firm’s core competencies and their firm’s competitive advantage.’ (Frynas
and Mellahi 2011)
SAMSUNG STRATEGIC CAPABILITIES
11. In 2014, the GDP in China was worth USD$10,360.10 billion, which represents
16.71% of the world economy.
Figure 1 : China’s
GDP Break-Up
WHY CHINA ?
In terms of Economy
12. Figure 2 : China
GDP PER
CAPITA
China could overtake the US if the GDP continues to increase
The GDP per capita was last recorded at 3865.88 US dollars (2014) which is
equivalent to 31% of the world’s average.
The world’s first exporter and holds foreing reserves in the world.
Exports : 1972.24 billion (November 2015)
Imports : 1431.14 billion (November 2015)
Inflation rate : 1.5 percent (November 2015)
(World Bank 2015)
13. Middle class growth, who consume more and more of imported product. (Over
the past 35 years, 600 millions Chinese have joined the consumer class).
The Chinese have a high level of involvement when they are buying products
for their social value.
The social significance of products is highly important, it allows to express their
status.
Self-esteem is very important to Chinese consumers and physiological needs
are less important.
WHY CHINA ?
In terms of Culture
(Doole and Lowe 2012: 74)
14. TRADE AREA
THE MAIN TRADING AREA :
MEMBER OF :
China has 13 free trade agreements
implemented, and 6 free trade agreements
under negotiation.
(Doole and Lowe 2012: 58)
15. SLEPTS ANALYSIS CHINA
S
- Population 1,367,820,387 of inhabitants in 2015
- China’s unemployment rate is around 4%
- Abundant and skilled labour
- Potential urban growth
- Rise of the middle class which change the social trends and cultural values
- Emphasize on education with over 90% of literacy rate
- 10% of the population lives with less than $1 per day
L
- Chinese regulatory and legal landscape constantly changing
- Over control by the government : Censor
- Modern legal system but suffer from corruption
E
- Significant growth over the past few year
- Formal member of the WTO
- Second largest economy after the US
- GDP USD$10,360.10 billion in 2014 : 16.71% of the world economy
P
- Communist party
- Part of the ASEAN
- No international conflict
- 2011-2015 plan initiated a quality driven local market Focus on innovation
T
- More than 720 million of Internet users (but internet access is controlled)
- About 15 billion YUAN of revenue in Telecommunication industry in 2015
- Deployment of 4G all over the country
- In 2009, 13,5 billion YUAN spent on R&D projects
S
- Largest emitter of CO2 in the world
- China focuses on green Energy, low carbon resources
16. SWOT ANALYSIS
STRENGTHS WEAKNESSES
- Strong market position
- Leader in the electronics industry
- Research and Development
Investment
- 2 production plants in China
- Brand value
- Know-How
- High prices of the products
- Patent litigations
- Dependence to Android
OPPORTUNITIES THREATS
- Low cost of labour
- Educated and skilled workforce
- Stable employment
- Most of the world’s trade and
economic activities are highly
dependent on the industries within
China
- Shanghai Free Zone
- ASEAN and WTO member
- Rise of China’s Middle Class
- Under-capitalized banks
- Weak round of economic data
- High inflation rate
- High property prices
- Corruption
- Protectionism
- High control of the government
(censure)
- Weak intellectual property protection
17. RISK EVALUATION
The four-risks matrix
It is important to measure the possible risks we would face in the chosen country.
Indeed, there are several types of risks which could be apparent in that market
(political, commercial, industrial, or financial). Therefore, we have to assess the
degree of thoses risks (Doole and Lowe 2012: 103).
Country: China
Risk
Level
Risk
type
Low Moderate Some Risky Very risky Dangerous
Political ✓
Commercial ✓
Industrial ✓
Financial ✓
(Doole and Lowe 2012: 103)
18. MARKETING BARRIERS
TARIFFS BARRIERS
Since WTO member Liberalized its
foreign trading system and reduce its
administrative barriers to trade.
According to WTO, China’s average
applied MFN tariff rate was 9.4% in
2013.
Corporate income tax is lowered of
25% (from 30%) for both domestic and
foreign-invested enterprises from
January 2008.
13 Free trade agreements
implemented, and 6 Free trade
agreements under negotiation.
NON-TARIFFS BARRIERS
Red tapes
Regulatory protection
Beijing also has the world’s most
extensive system of subsidies,
which block foreign access to the
Chinese market.
Insecure ownership of non-state
companies.
(Heritage 2012)
20. SEGMENTATION
Segmentation is the ‘partition of a market in submarkets in order to find in each
submarkets customers who share the same will and expectations’ (Doole and Lowe
2012)
Determine which part of the Chinese population can use this
product and afford it
Target different sectors :
- Trade
- Tourism
- Event
Target different types of employees in order for them to :
- Better perform in their work
- Improve their exchanges with their guests, customers, suppliers,
partners or shareholders
21. TARGETING
The aim is :
- To acquire customers and retain them
A target is someone or a group of potential buyers.
The targets will be :
- The Chinese upper class
- People who work in international companies
- People who work in the Tourism, Trade and Event sectors
- Political fields (political assembly and meeting as COP21 or
G20)
22. POSITIONNING
GLOBAL POSITIONNING STRATEGY
“Developing and maintaining a global brand name is one of the best ways for firms
to build global recognition”
(Cavusgil, Knight and Riesenberger 2012: 525)
Products are more valued by the customers
More confidence in buying them.
This strategy is efficient to :
to acquire and to retain customers
to gain brand loyalty
In China, Samsung is well-known and has a strong position in the market.
In addition, our business philosophy is to deliver premium products therefore our
product the ‘Samsung Universal Ear’ suits with our brand image
23. Product
UNIVERSAL
EAR (Wireless Ear
Bud Instateneous
Translator)
Laucnhing date:
10 January 2017
For the Chinese New
Year
Physical
Evidence
- Brand name and
reputation
Place
- Samsung’s
stores
- Websites (online
purchasing)
People
- Chinese upper-
middle class
- Multinational
companies
- Tourism sector
Politics
Promotion
Advertising, pull
marketing (media),
push marketing
(trade shows,
street marketing))
Price
249,99 EUR =
USD$273.163 =
1,801.06 KRW
24. POSITIONNING
China:
• Regional HQ (2)
• Production (13)
• Sales (2)
• Research (7)
• Design Center (1)
• Others (8)
• Staff 60,316
(Samsung Sustainability Report 2015)
25. POTENTIAL
COMPETITORS
SAMSUNG GLOBAL LEADER IN THE
ELECTRONICS INDUSTRY.
Main competitors : Apple, Huawei,
Xiaomi in China in the electronics
industry.
They probably would imitate or create
a similar product.
The launching of the wireless ear bud
will hit the market of translator
application It will maybe replace it,
since we will make a better service for
the customer.
Skype has developed an application
enabling an automatic translation (Le
Monde 2016) Fig 3 - Samsung Sustainability
Report (2015)
(Samsung Electronics Annual Report 2014)
26. COOPERATION AND
PARTNERSHIP
As we use Android as operating system, we will have
to make other partnerships with Google and work
together in order to make this new product viable and
acceptable for the customers and to limit the
competition.
28. CHINESE’S CONSUMERS FORECAST
New product on the market
Compare different products which are also
categorized as accessories or wearables
devices as the smartwatch « GEAR » and
headsets and headphones on the market.
Analyze these different markets to have a
basis of their sales to forecast the sales for our
new product.
Samsung Galaxy Gear –Smartwatch
- $350 (in China)
1.2 million sold worldwide
in 2014
180,000 sold in 8 hours in
China ≈ 500,000 sold in
2014 (based upon my critical
analysis)
Samsung Level U Wireless
Headphones – $69
Headsets + Headphones : 290.9 million
sold worldwide in 2014 (all brand combined)
40% of the overall earphone and
headphone market in 2014 in Asia = 116
million of unit (Japan excluded)
Samsung and Apple represent 62% of the
market = 72 million
Samsung is the leader, so the estimation
of its sales is 40 million unit sold
Estimation : the Chinese market absorbs
30% of the sales
Estimation of 12 million of headphones
and heasets sold in China in 2014
12 types for this range of product
available on Samsung website : 750
thousands of sales per product
(Android Authority 2015)
(Joshua Swingle 2015)
(Statista 2015)
(Strategy Analytics 2015)
29. Target Population Estimation Forecast
Outbound tourists 62 million 1/150 tourist 413,000
Chinese upper-middle class
(including the employees of
Chinese exports companies)
671 million - 150,000
CHINESE’S CONSUMPTION 5 YEARS FORECAST
Year % of increase Forecast
1st Year 563,000
2nd Year 10% 619,300
3rd Year 5% 650,265
4th Year 5% 682,778
5th Year 5% 716,916
Outbound tourists: Chinese upper-middle class:
(Press Hotels 2014) (Travel China Guide 2015) (Business Insider UK 2015) (Central Intelligence Agency 2015)
32. Price for the
final customer
Product sold
to distributors
Samsung’s
margin
(after deduction of the
production cost, R&D,
salaries and marketing
communications)
Production
costs
Net Profit for
one unit
$ 273,163 $ 150 30% $ 105 $ 45
ESTIMATION OF THE NET
PROFIT
34. INTERNATIONAL
MARKETING STRATEGY
CUSTOMER ACQUISITION
It is ‘the process of persuading a consumer to purchase a company’s
goods or services’ (Business Dictionary n.d).
METHODS TO DO THIS WITH OUR WIRELESS EAR BUD:
Use the product placement strategy in the clips and in many films
Integrate adverstising in the most read magazins
Use the sponsorship to create a link between the company and an event: Using
Luxurious Hôtel, Politics Area…
Be present in several shows in the country
Create a serious and seductive argumentative discourse to give a good brand
image to potential customers and remain in their minds.
35. INTERNATIONAL
MARKETING STRATEGY
CUSTOMER RETENTION
It is ‘the long term clients, the loyal customers’ (Business
Dictionary n.d).
METHODS TO RETAIN THEM WITH OUR WIRELESS EAR BUDD
Create Samsung’s events, where one can acquire the ear budd at the entrance
and can be used for free throughout the day. This will enable concumers to
familiarize themselves with the product and be convinced of its efficiency.
Do satisfaction surveys, to demonstrate a good after sales service.
Create a ear budd community: Active forum about a commited community is a
good way to build customer loyalty and long-term visitors.
Welcoming and congratulating, immediately after the purchasing with an
individual e-mail
36. Types of
advertising
mean
Advantages Disadvantages
Television Very efficiency: Dominance of TV Station Expensive: Price inflation
Press: Newspaper
and Magazines
Fashion magazines: rising affluence of
Chinese consumers
Wealthy consumers have more lifestyle and
leisure choices: Fashion magazines appeal
them
Not all the population have time to
sit and read a newspaper – price
of press remain high
Internet
Increase of the use of Social Networks and
Online Gaming : opportunity to make
association
No disadvantages
Outdoor advertising Public places: viewed all day Expensive
Mailing
Development phase – could attract customers
of Samsung
Not very used yet
ADVERTISING CAMPAIGN
We will mostly use the « Pull marketing » which means « pull » the
client to the product via mass media and advertising communication.
The aim is to « Catch the eye » of the consumer.
37. PRODUCT ADVERTISING
TELEVISION
95% of the Chinese population watches television the best way
to touch a maximum of consumer.
The main television stations and the most
viewed:
Anhui TV (AHTV) Broadcast
China Central Television (CCTV) News
Beijing TV (BTV) Broadcast
Sichuan TV Culture and entertainment
With your Samsung
Universal Ear, you are
going to love speaking
with your foreign
partners
(China Business Review 2010)
38. PRODUCT ADVERTISING
INTERNET: e-marketing, social media
Internet advertising is expected to surpass the newspaper
advertising. .
In 2014, China has around 591 million internet users (half of the population) and
91% of Chinese internet users have a social media account (Emoderation 2014)
The average Chinese internet user follows eight social networks, and 38% of
internet users make shopping choices based on recommendations they read on
social networks
Most of common social networks as Facebook
and YouTube are blocked by the government.
We have to use the local ones to engage
consumers.
(China Business Review 2010)
39. THE MOST POPULAR SOCIAL
NETWORKS IN CHINA
Sina Weibo
The most popular social network in
China, with around 280 million
active users and 500 million
registered users.
(Equivalent of Twitter)
Tencent Weibo
The third most popular social
network in China with more than 230
million active users.
(Equivalent of Twitter)
Qzone
The second most popular social
network in China, with between 240
million and 600 million monthly
active users.
(Equivalent of MySpace)
(Emoderation 2013)
40. PRODUCT ADVERTISING
PRESS
As we have to adapt our advertising campaign to the New Information
and Communication Technologies, we will use the magazines and
newspaper websites since as we saw Chinese are now online.
The most read newspapers and magazines have websites :
China Daily
Pekin Times
(China Daily 2015) (Pekin Times 2015)
42. CONCLUSION
Samsung had already created and sold Bluetooth headsets which are
connected to smartphone in order to have free hands.
The increasing of Chinese multinationals that will push European
countries to cooperate, in different languages.
Chinese culture based on self-esteem and they are willing to climb in the
social ladder.
Infatuation for automation and artificial intelligence
The emergence of new technologies allows the company to create this type
of product.
Good sales forecast and net profit
Therefore, the product will contribute to to the sustainability of the company.
With its strategic capabilities and competitive advantage, this project is
feasible for Samsung
43. THANK YOU VERY MUCH
FOR YOUR ATTENTION.
IF YOU HAVE ANY
QUESTIONS, PLEASE ASK.
44. REFERENCES
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45. REFERENCES
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46. REFERENCES
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47. REFERENCES
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Notas do Editor
$
CLARA :
Internet advertising is expected to surpass the newspaper advertising. Advertising through mobile phone and online advertising are increasing rapidly. In 2014, According to the wesbsite Emoderation, China has around 591 million internet users (half of the population) and 91% of Chinese internet users have a social media account. Moreover, The average Chinese internet user follows eight brands, and 38% of internet users make shopping choices based on recommendations they read on social networks. However, Most of common social networks as Facebook and YouTube are blocked by the government. We have to use the local ones to engage consumers.
CLARA :
Donner les most popular social networks
CLARA :
Faire une petite phrase:
Outdoor advertising : Transport, building façades,
Infatuation for automation and artificial intelligence.
