international marketing launch pitch
TRANSCRIPT
SAMSUNG ELECTRONICSEnd-of-module assignment CW2
Grade:70%
TABLE OF CONTENTS Project’s DescriptionCountries ComparisonSituation Analysis: ChinaMarketing Strategies
Financial SituationInternational Marketing of the ProductConclusionsReferences
DESCRIPTION OF THE PROJECT Wireless Ear Bud with automatic translation
« SAMSUNG UNIVERSAL EAR »
Our Marketin
g 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
New Product Category
Newness to market
Newn
ess t
o co
mpa
ny
New to the
world
(Doole and Lowe 2012)
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
PRODUCT LIFE CYCLE
Introduction stage
RESOURCES & CAPABILITIESVRIO 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
COUNTRIES COMPARISON
TURKEY CHINA BRAZIL SOUTH AFRICA
Population 79,414 thousands 1.3 billion 204,259,812
million53,675,565
millionOfficial mother tongue
Turkish Mandarin Portuguese English
GDP per captita (PPP)
USD$18,884.02 9,800 12,100 12,446.37
GDP growth 3.1% 7.4% 0.1% 0.7%
GNI per capita (USD$) 10,840 7,380 26,372 6,800
Literacy rate 95% 96% 88% 94%
Regional trading areas
Free Trade Agreements with EFTA
APECASEAN FTA MERCOSUR None
Outbound tourists 9,800,000 62,000,000 7,900,000 5,169,000
% of English speakers 17% 0,73% 5% 31%
References:
(The World Bank 2015)
(Trading Economics 2015)
(Statistiques mondiales 2015)
(Statista 2015)
(Export.gov 2015)
(Investopedia 2015)
(Coface 2015)
(European Comission 2015)
CO
NT
RIE
S
SITUATION ANALYSIS: CHINA
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
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)
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)
TRADE AREATHE MAIN TRADING AREA :
MEMBER OF :China has 13 free trade agreements
implemented, and 6 free trade agreements under negotiation.
(Doole and Lowe 2012: 58)
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- In 2009, USD$34.6 billion spent on the renewable energy sector
SWOT ANALYSISSTRENGTHS 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
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 LevelRisk type
Low Moderate Some Risky Very risky Dangerous
Political ✓Commercial ✓
Industrial ✓Financial ✓
(Doole and Lowe 2012: 103)
MARKETING BARRIERS TARIFFS BARRIERSSince 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 BARRIERSRed tapesRegulatory protectionBeijing 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)
MARKETING STRATEGIES
SEGMENTATIONSegmentation 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
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)
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
ProductUNIVERSAL EAR (Wireless
Ear Bud Instateneous Translator)
Laucnhing date: 10 January 2017For the Chinese
New YearPhysical Evidence
- Brand name and reputation
Place- Samsung’s
stores - Websites
(online purchasing)
People- Chinese upper-
middle class- Multinational
companies- Tourism sector
Politics
PromotionAdvertising, pull
marketing (media), push
marketing (trade shows,
street marketing))
MARKETING
MIX
Price249,99 EUR = USD$273.163 = 1,801.06
KRW
POSITIONNING
China:• Regional HQ (2)• Production (13)• Sales (2)• Research (7)• Design Center (1)• Others (8)• Staff 60,316
(Samsung Sustainability Report 2015)
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)
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.
FINANCIAL SITUATION
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)
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 Forecast1st Year 563,0002nd Year 10% 619,3003rd Year 5% 650,2654th Year 5% 682,7785th 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)
SALES AND REVENUES FORECAST
• Almost 0.1% of the global turnover
(Samsung Electronics Annual Report 2014)
MARKETING COMMUNICATIONS BUDGET
Marketing communications budget (advertising and promotion) represents 5,5% of the revenue(Samsung Electronics Annual Report 2014)
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
INTERNATIONAL MARKETING OF THE PRODUCT
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.
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
Types of advertising
meanAdvantages 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
InternetIncrease 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.
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)
PRODUCT ADVERTISINGINTERNET: 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)
THE MOST POPULAR SOCIAL NETWORKS IN CHINA
Sina WeiboThe most popular social network
in China, with around 280 million active users and 500
million registered users.(Equivalent of Twitter)
Tencent WeiboThe third most popular social
network in China with more than 230 million active users.
(Equivalent of Twitter)
QzoneThe second most popular social network in China, with between 240 million and 600 million
monthly active users.(Equivalent of MySpace)
(Emoderation 2013)
PRODUCT ADVERTISINGPRESS
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)
PRODUCT ADVERTISINGOutdoor advertising
(China Business Review 2010)
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
THANK YOU VERY MUCH FOR YOUR ATTENTION.
IF YOU HAVE ANY QUESTIONS, PLEASE ASK.
REFERENCES Android Authority (2015) Smartwatch sales estimate places Samsung
as No.1 [online] available from <http://www.androidauthority.com/samsung-no-1-smartwatch-sales-593790/ [9 January 2016]
Business Dictionary (n.d.) Customer acquisition [online] available from <http://www.businessdictionary.com/definition/customer-acquisition.html> [5 January 2016]
Business Financial Post (n.d.) [online] available from <http://business.financialpost.com/ > [21 December 2015]
Business Insider UK (2015) China's rising middle class will create opportunities the world has never seen before [online] available from <http://uk.businessinsider.com/chinas-rising-middle-class-will-create-opportunities-the-world-has-never-seen-before-2015-5> [8 January 2016]
Cavusgil, T., Knight, G., Riesenberger, J.R., (2012) International Business Strategy: The New Realities. 2nd edn. Upper Saddle River: Pearson Education
Central Intelligence Agency (2015) The world factbook [online] available from https://www.cia.gov/library/publications/the-world-factbook/fields/2212.html [8 January 2016]
REFERENCES China Business Review (2010) Advertising in a new age of media
[online] available from <http://www.chinabusinessreview.com/advertising-in-a-new-age-of-media/> [4 January 2016]
China Daily (2015) [online] available from <http://www.chinadaily.com.cn> [4 January 2016]
Coface (2015) [online] available from http://www.coface.com/fr [15 December 2016]
Doole, I., Lowe, R. (2012) International Marketing Strategy. 6th edn. Hampshire : Brendan George
Ec.europa.eurostat.eu (n.d.). [online] available from <http://ec.europa.eu/eurostat/> [23 December 2015]
Emoderation (2013) Social media fast facts China [online] available from <http://www.emoderation.com/social-media-fast-facts-china/> [6 January 2016]
European Comission (2015) Countries and regions [online] availble from http://ec.europa.eu/trade/policy/countries-and-regions/ [15 December 2015]
REFERENCES Export.gov (2015) [online] available from <
http://www.export.gov/turkey/doingbusinessinturkey/index.asp> [15 December 2015]
Frynas, G., Mellahi, K., (2011) ‘Managing the internationalization process’ in Global Strategic Management. 2nd edn. New-York : Oxford University Press
Heritage (2012) The most important Chinese trade barriers [online] available from <http://www.heritage.org/research/testimony/2012/07/the-most-important-chinese-trade-barriers> [21 December 2015]
Investopedia (2015) [online] available from <http://www.investopedia.com/> [22 December 2015]
Joshua Swingle (2015) Samsung sells 180,000 Gear S2 units in 8 hours in China [online] available from <http://joshuaswingle.com/2015/11/04/samsung-sells-180000-gear-s2-units-in-8-hours-in-china/> [9 January 2016]
Le Monde (2016) Skype intègre un outil de traduction en temps réel sur Windows [online] available from <http://www.lemonde.fr/pixels/article/2016/01/14/skype-integre-un-outil-de-traduction-en-temps-reel-sur-windows_4847218_4408996.html> [18 January 2016]
REFERENCES L’Usine Digitale (2015) Les 5 addictions du consommateur chinois
[online] available from <http://www.usine-digitale.fr/article/les-5-addictions-du-consommateur-chinois.N362384> [28 December 2015]
Press Hotels (2014) Chinese International Travel Monitor [online] available from https://press.hotels.com/content/themes/citm/assets/pdf/citm_uk_pdf_2014.pdf [5 January 2016]
Pekin Times (2015) [online] available from <http://www.pekintimes.com> [4 January 2016]
Samsung (2015) Samsung Sustainability Report 2015 [online] available from http://www.samsung.com/us/aboutsamsung/sustainability/sustainabilityreports/download/2015/SAMSUNG_SUSTAINABILITY_REPORT_2015_ENG.pdf
Samsung (2015) Samsung Electronics Annual Report 2014 [online] available from <http://www.samsung.com/us/aboutsamsung/investor_relations/financial_information/downloads/2015/SECAR2014_Eng_Final.pdf>
REFERENCES Statista (2015) [online] available from <http://www.statista.com/ >
21 December 2015]
Statista (2015) Global unit sales of headphones and headsets from 2010 to 2015 [online] available from <http://www.statista.com/statistics/327000/worldwide-sales-headphones-headsets/> [9 January 2016]
Statistiques mondiales (2015) [online] available from < http://www.statistiques-mondiales.com/turquie.htm [15 December 2015]
Strategy Analytics (2015) Handset Country Share [online] available from<https://www.strategyanalytics.com/strategy-analytics/blogs/devices/handset-country-share/handset-country-share/2015/12/18/apple-samsung-took-62-of-the-global-handset-revenues#.VpEuMdYU23V> [9 January 2016]
Trading Economics (2015) [online] available from <http://www.tradingeconomics.com/> [22 December 2015]
Travel China Guide (2015) China Outbound Tourism in 2015 [online] available from < http://www.travelchinaguide.com/tourism/> [5 January 2016]
REFERENCES The World Bank (2015) [online] available from
http://www.worldbank.org [15 December 2015]