Samsung in China

In: Business and Management

Submitted By blackcells13
Words 625
Pages 3
The main issue in this case pertains to the adoption of marketing strategy for Samsung color TVs in China. Samsung had to make a decision to either target the low or high end market segment (or both), as well as the product lines to focus on. The criteria for Samsung’s decision should be based on long-term sustainable growth and profit. Besides, prioritizing and portraying a premium brand image is in line with Samsung Group’s commitment to higher quality image. Therefore, an appropriate strategy would be targeting the high-end market segment with highly value-added and differentiated products from several specialized product lines.
As Samsung’s experience in the U.S. market had shown, its operating profit was much smaller than that of Panasonic because of intense competition in the low-end segment, in which products were not differentiated. Similar scenario would likely to happen if Samsung chose to target China’s low-end market. China had many domestic brands (exhibit 2) which had already targeted the low-end market segment. They were capable of competing with foreign firms in producing small and medium sized TVs because of low technological requirements and little product differentiation. Thus, it would be challenging for Samsung to establish high brand image and sales volume in the low-end segment. However, the Chinese TV manufacturers were less competitive in large screen color TVs because of their low technology, insufficient capital and lack of promotion. Since Samsung had high product quality and low price for its 27” color TVs (exhibit 7), it would be strategically viable for Samsung to make full use of this advantage in large screen color TVs to compete with Japanese producers in the high-end segment.
Although the urban market was highly penetrated and almost saturated with about 80% of urban household owning a color TV, the overall market was still…...

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