Samsung is an amazing corporate study. In just over the span of one generation, the company went from selling agricultural products to being on the forefront of global technological advances as it relates to consumer electronic products. This transformation was achieved from multiple tipping points which shaped the next level of expansion. A key transition point was the acquisition of a semiconductor business launching the company on its current technological trajectory. The company continued its growth which can be seen on Exhibit 1 in the case study. This growth did not come without some significant obstacles. Various issues externally and internally needed to be addressed, such as the Asian financial crisis in 1997 and decisions to make manufacturing a core competence.
However, these challenges just set the platform for the next major hurdle for the company. It had solidified itself as a player on the world stage but had not yet harvested the hearts and minds of consumers, establish its true identity, define its value proposition and build its brand equity with consumers. The company had done significant work on identifying segments and filling niches in various pockets around the globe but its brand equity was fragmented globally and at various stages of development without there being a standardized global marketing framework. The company had experience much short-term success, but understood short-term strategies could not continue and would jeopardize long-term viability. Internally this was well know and in 1999, as a direct tactical move, to address much needed global repositioning Samsung recruited a new global marketing executive. The mission was to build the “corporate brand image” globally. Work was done around the value proposition, category membership, analyzing competitors, identifying points-of-difference & parity. They were also keen to critically link the product life cycle of their products to an industry advantage where they were able to bring products to market twice as fast as rivals in the region. This played into strategic pricing advantages where prices declined for newer technology faster than competitors could even bring products to market. The “Sashimi Theory” was born - sell at higher prices when new products are “fresh” to market and fall dramatically soon after. The insight to reposition the company and focusing on global marketing initiatives came at a critical junction in the consumer products landscape with the change to digital technology from analog. This change was a massive opportunity which would produce the global consumer product leaders. The question for Samsung was - will we be that leader?
In early 1990’s the Samsung brand was not widely known outside Korea. The company sold its products primarily to original equipment manufacturers (OEM’s) rather than to consumers. During this time there was very little interest in developing the Samsung brand image globally. Around the world Samsung’s brand message was fragmented and its logo and presentation were inconsistent. Marketing budgets, controlled by product managers, were allocated to “below the line” price promotions designed to meet short term sales targets, rather than to long term “above the line” brand building.
In 1993 a new management initiative was issued by Chairman Lee to transform Samsung from a cheap brand to a high value brand. It was planned that once costs were brought under control and new products begin to come out of Samsung’s research and development, it was obvious that Samsung had the potential to generate higher revenues by going to the market under its own brand name. In 1997 Vice Chairman Yun led the company wide effort to convert the company’s product line towards high-end premium goods.
In 1999, newly appointed executive vice president