From his 20th-floor office in downtown Seoul, Seung Soo Park, vice-president of the $30-billion Samsung Electronic's marketing strategy team for global marketing operations, sure has a great view. But his worldview stretches far beyond his office windows and even beyond South Korea. Says he: "We want to be viewed not as a Korean company but as a company that simply happens to be in Korea." A telling comment that highlights the Korean chaebol's dream that Samsung be seen as a true-blue multinational brand like its pet obsession, and acknowledged benchmark, Sony.
During the 1997 currency crisis, South Korea, like all other Asian tigers, suffered hugely. But Park, and Samsung, want to put the memory of those days far behind. Back on its feet and hoping to clock a $5 billion profit this year in spite of a global slowdown, Samsung clearly doesn't want to be spoken of in the same breath as other Korean companies, some of them still reeling under the financial meltdown. Says Park: "We'd like to distance ourselves from the crisis the country might be facing as a whole."
In April, Forbes carried a story headlined: "Watch out Sony, Samsung is here". "This sure means we are getting there," Park adds, his eyes beaming with pride and confidence. And to lift its brand equity, Samsung spends $1 billion a year on advertising alone—of this, as much as $800 million is outside Korea.
The company today has global leadership (24 per cent share) in the microwave ovens market. It figures on the top in the world colour monitor market (17 per cent). In the cdma mobile phone market, it's placed at number 4. And in the colour television sector, Samsung has a global share of 10 per cent. Asia and North America account for almost 60 per cent of Samsung's total revenues.
India, which it entered just five years ago, contributes two per cent to the total sales, a figure which Samsung hopes to increase to three by 2003. With the boom of a couple of years ago going to a near nosedive last year, the Rs 13,000 crore market for ctvs and home appliances stands stagnant today, with growth projections greatly petered down. "The outlook is not positive. There were projections that the market will grow between 15 and 20 per cent, but that will not happen. In fact, primary sales have seen a drop by about 15 per cent this year," says Ravinder Zutshi, vice-president sales, Samsung India Electronics Ltd.
And the nosedive has never pinched so much. The colour TV market, the face of the consumer electronics market, has grown by just 3.8 per cent in the first four months of this year. Yet Park intends to invest $215 million in India over the next four years in addition to the $64 million already spent.
The fresh funds will be used to increase ctv capacities (today Samsung figures at No. 4 in the Indian market with an 8.3 per cent share while Sony's clocking 3.1 per cent), setting up manufacturing capacities for air-conditioners, washing machines and refrigerators apart from its monitor production capacity. It has a 48 per cent marketshare in colour monitors and by 2003, Samsung hopes to raise sales from Rs 2,800 crore to Rs 5,000 crore.
Says Zutshi: "We have come to stay in India and are not looking at three-month market forecasts. We know that the country has the potential to emerge as a strong buying power like China." The argument is that if China can have a ctv market of over 25 million units, why not India? Today, though, the market is less than 5 million units.
To energise the tepid market and enthuse dealers and consumers, Samsung has been launching a new ctv model almost every month with zero per cent finance schemes and Channel V roadshows. And its biggest achievement: that the brand is being recalled together with the brand of brands, Sony. "It has become a top-of-the-mind brand, and awareness levels are 93 per cent," says Zutshi. The obsession continues.
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