Channel And Market Share Analysis Of Samsung

As active socio economic changes sweep across India, the country is attending the creation of many new markets and further development of existing ones. Indias end user market is riding the crown of the country’s economic boom. The Indian consumer durable industry has attended a tremendous adjustment in the past. According to the research conducted by FICCI on the Indian consumer durable industry, a shift in consumer desire towards above-boundary, high-tech advanced approved products has been quite discoverable. The shift has also been activated by the availability of the foreign branded products in India.

Segmentation of the consumer durable industry

The consumer durable industry rest of durable goods and appliances of domestic use. The industry can be broadly classified as the:

Consumer electronics

Consumer appliances

Consumer appliances can again classified as white and brown goods.

CONSUMER DURABLES

CONSUMER APPLIANCES CONSUMER

ELECTRONICS

WHITE GOODS

Brown Goods

•€ TELEVISIONS

•€ MP3 PLAYERS

•€ DVD PLAYERS

•€ VCD PLAYERS

•€ REFRIGERATORS

•€ WASHING

MACHINES

•€ AIR CONDITIONERS

•€ SPEAKERS AND

AUDIO

EQUIPMENTS

Source: India Brand Equity Foundation report

The key drivers behind the growth

The sector has been proof expressive growth in recent years, helped by several handlers such as developing retail, real estate and housing demand, greater disposable income and a overall increase in the level of the prosperity section of the population.

Source: India Brand Equity Foundation report

Need for the study

The basic idea of taking up attention is to analyze the market share of SAMSUNG LCD TV in sub dealer market. At the same time an experiment was made to understand the distribution channel relationship and problem faced by the dealers.

Objective of study

Primary objective

The primary objective of the study is to division the market share and understands the distribution channel relationship with reference to SAMSUNG ELECTRONICS INDIA PVT LTD.

SECONDARY OBJECTIVES

To find out the counter share of SAMSUNG LCD TVs.

To find out the counter size of the dealer as well as the different brands kept by different dealers.

To record who are the major players of LCD TVs

To find out which is the largest selling model among all the segments?

To know whether the dealer is aware of current pricelist.

To find out whether the dealer is having brochure of the product.

To know what benefits a dealer wants so that he is satisfied in selling the products.

RESEARCH METHODOLOGY

The essential part of any report is research approach. The field study was conducted to analyze the market share and understand the distribution channel relationship.

COLLECTION OF DATA

Data used of this report is mainly primary data, which are collected first hand by

Survey in the field. In some area secondary data may also be taken into consideration.

COLLECTION OF PRIMARY DATA

The data was collected through the primary source by survey method using structured questionnaire and taking respondent’s personal interview.

COLLECTION OF SECONDARY DATA

The data collected from text books, journals and internet.

Samsung-An Overview

The Samsung Group is a multinational syndicate corporation headquartered in Samsung Town, Seoul, South Korea. It is the world’s largest conglomerate by revenue with annual revenue of US$173.4 billion in 2008. The meaning of the Korean word Samsung is “Tri-Star” or “three stars”.

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Samsung has been the world’s most popular consumer electronics brand since 2005 and is the best known South Korean brand in the world. Samsung Group accounts for more than 20% of South Korea’s total exports and is the leader in many domestic industries, such as the financial, chemical, retail and entertainment industries.

History

Unlike other electronic companies Samsung base were not involving electronics but other products.

In 1938 the Samsung’s founder Byung-Chull Lee set up a trade export company in Korea, selling fish, vegetables, and fruit to China. Within a decade Samusng had flour mills and confectionary machines and became a co-operation in 1951.

From 1958 onwards Samsung began to expand into other industries such as financial, media, chemicals and ship building throughout the 1970’s. In 1969, Samsung Electronics was established producing what Samsung is most famous for, Televisions, Mobile Phones (throughout 90’s), Radio’s, Computer components and other electronics devices.

1987 founder and chairman, Byung-Chull Lee passed away and Kun-Hee Lee took over as chairman. In the 1990’s Samsung began to expand globally building factories in the US, Britain, Germany, Thailand, Mexico, Spain and China until 1997.

In 1997 nearly all Korean businesses shrunk in size and Samsung was no exception. They sold businesses to relieve debt and cut employees down lowering personnel by 50,000. But thanks to the electronic industry they managed to curb this and continue to grow.

The history of Samsung and mobile phones stretches back to over 10 years. In 1993 Samsung developed the ‘lightest’ mobile phone of its era. The SCH-800 and it was available on CDMA networks.

Then they developed smart phones and a phone combined mp3 player towards the end of the 20th century. To this date Samsung are dedicated to the 3G industry. Making video,camera phones at a speed to keep up with consumer demand. Samsung has made steady growth in the mobile industry and are currently second but competitor Nokia is ahead with more than 100% increase in shares.

Mission statement

Is to be best “digital company”

Source: Samsung Electronics website

Samsung Electronics in India

Samsung Electonics India Private Limited is the Indian addtition of the US $ 55.2 billion Samsung Electronics Cooperation headquarter in South Korea. In india it is headquarter in New Delhi, it has widespread network of sales offices in all over country. Samsung India is the hub of Samsung South West Asia Regional operations.

Product Portfolio Of SIEL

Samsung India have segmented there products into five categories:

MOBILE PHONE

TV/AUDIO/VIDEO

CAMERA/CAMCORDER

HOME APPLIANCES

PC/PERIPHERALS/PRINTERS

Indan Consumer Electronic Industry

The consumer electronic industry has been seeing growth in few years. This growth can be due to revolutionary in the technological development taking place in consumer electronic industry. The

revolution brought by the digital technology has enabled the consumer electronics sector to profit.

India’s consumer electronics devices market, defined as the addressable market for computing devices, mobile handsets and AV products, is projected at around US$28.6bn. This is expected to increase to US$45.7bn by 2014, forced by rising incomes and growing affordability by the peoples.

Emerging LCD TV Market

India market and predicts that by 2013, LCD TV shipments will cross those of CRT TVs in India. India has the second largest population in the world and an annual GDP growth rate of more than 8% from 2002 to 2012. CRT TV accounts for 92.9% of those units in 2008, followed by LCD TV with 6.6% and PDP TV with 0.5%.

Source: Display search India

Theoritical Background Of the Study

Marketing involves satisfying customer needs and wants. The aim of any business is to get customers happy and deliver value at profit. Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stake holders- Philip Kotler (http://www.marketingpower.com/aboutama/pages/definitionofmarketing.aspx)

The Role of Marketing Channels

Blooming value creation brings blooming valye delivery. Marketers are

increasingly taking a value network view of their businesses. The marketing channel deals with moving of goods from producer to consumer. Intermediaries

normally achieve superior efficiency in making goods widely available and accessible to target markets. Through their contacts, experience, specialization, and scale of operation, intermediaries usually offer the firm more than it can achieve on its own. Roles performed by channel partners:

gather information about customers.

Develop pervasive communications to stimulate purchasing.

Place orders with manufactures.

Oversee actual transfer of ownership form one to another.

These channel functions have 3 things in common:they use scarse resources; they can often be performed through specialization and they can be shifted among channel members.

Levels of Marketing Segmentation

Markets are not homogenous. A company cannot connect with all the customers. Customers can very on different mindsets and can be grouped together according to there characterstics.

Segmentation Marketing

Segmentation marketing means mass marketing. In mass marketing,

the seller engages in the mass production, mass distribution, and mass promotion of one product for all buyers. The argument for mass marketing is that it creates the largest potential market, which leads to the lowest costs, which in turn can lead to lower prices or higher margins.

Target Marketing

Once the firm has identified its market-segment opportunities, it has to decide how many and which ones to target. Marketers are increasingly combining several variables in an effort to identify smaller, better-defined target groups. Effective target marketing requires that marketers:

Identify and profile distinct groups of buyers who differ in their needs and

preferences (market segmentation) .

26

Select one or more market segments to enter (market targeting).

For each target segment , establish and communicate the distinctive benefits) of the company’s market offering (market positioning) .

Distribution Channel Map of SIEL

The manufacturer and the end user are the part of every channel. These channels are different levels. A one-level channel contains one selling intermediary, such as a retailer. A two-level channel contains two intermediaries. In consumer markets, these are typically a wholesaler and a retailer. A three-level channel contains three intermediaries. In the meatpacking industry, wholesalers sell to jobbers, who sell to small retailers. From the producer’s point of view, obtaining information about end users and exercising control becomes more difficult as the number of channel levels increases.

Data Interpretation and Analysis

Table showing the counter share of SAMSUNG LCD TV

particulars

No. of dealers

percentage

Less than 30%

10

15

Between 30%-50%

25

57

Between 51%-70%

11

20

Gerater than 70%

4

8

INTERPRETATION:

From the above table, it can be observed that 57% of the dealers are

having counter share of SAMSUNG LCD is between 30%-50%, where as 20% of the

dealers are having counter share of SAMSUNG LCD is between 51%-70%, 15% of

the dealers are having counter share of SAMSUNG LCD is less than 30% and only 8% of the are having more than 75% counter share.

Table of largest selling models of all the models

particulars

No. of repondents

percentage

22 inch

15

40

26 inch

15

40

32 inch

5

10

40 inch

8

5

Above 40 inch

7

5

INTERPRETATION:

From the above table it can be found that 40% of respondents finds

22″ is the largest selling model in their counter, followed by 26” which is the largest selling model in 40% counters, where as only 10% finds 32″ is the largest selling model in their counter.

Limitations

During the dealer study, some of the dealers did not give the exact information

about number of products sold by them in a month.

The market size of SAMSUNG LCD TVs achieved is exclusive of B2C market.

This study does not take into account the market as whole, but only 50 dealers.

Study was conducted with dealers selling mostly Samsung products, with most of them selling LG, SONY etc. products in lower quantities. Therefore, this might skew the results a bit.

The period of the project was not sufficient to study all the factors in deep.

Many consumer and dealers/retailers showed less interest in providing information and haven’t cooperated.

Findings

Majority of the dealers i.e. 57% are having counter share of SAMSUNG LCD is between 30%-50%. It shows that Samsung has got strong grip in the market.

54% of the dealers are having counter size between 0-19 units per month. It shows that majority of the dealers need to improve their counter size in order to expand the market.

From the study, it is revealed that 62% of the dealers don’t have any LCD display stand in their counter.

Samsung is having healthy display share (between 55% to 75%) in 18% dealers rather than i.e. it shows that many of the dealers are keeping Samsung in the display. Different contest for displaying the LCD brings a new perspective in this context.

Among the different models like 22 inch, 26 inch, 40 inch, above 40 inch,

majority of the dealers (40%) finds 22″ is the largest selling model in their

counter.

Suggestions

SAMSUNG should redress the grievance of the dealers.

The company should relook at some of the models as these models don’t have any

output connection specially the 22″ model as it is the largest selling model in

most of the counters

s

Dealers don’t have enough space to display LCD in their counter.

Company should customize the display stand so that it can be easily fix in the

wall, in this way SAMSUNG can improve the display share as SAMSUNG also

believes that ” JO DIKHTA HAI WO BIKTA HAI”.

The rural counters are not getting the current price list of the product as sales

persons are visiting less in these counters company should focus on that matter

seriously.

Company should introduce low cost products to satisfy the needs of the low or

middle class as SONY is having 19″ model in this segment.

Branding and promotional activities should be done effectively as it creates a

long lasting image in the mind of the customers.

As there is a bottle neck competition between SAMSUNG and LG, it is

necessary to take major steps to overcome the area of downfall in SAMSUNG with respect to LG.