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SAMSUNG CHINA: THE INTRODUCTION OF COLOUR TV
When Korean companies began to make their way into China, their principle aim was to secure low cost manufacturing centres. ... They soon caught up with Korean counterparts, forcing Korean firms to alter their strategies and start viewing China as a strategic market rather than a production base. Korean firms started to advance to China following the normalization of diplomatic relationships between the two countries in 1992. In particular the signing of trade pact between China and Korea stimulated direct investment in China because it obviated the need for indirect trade through Hong Kong.
Samsung is a Korean firm. ... Chung Yong, president of Samsung China Headquarters was considering a recent meeting with the marketing director who was responsible for developing a marketing strategy for the entire China market. The topic at the meeting was the marketing strategy for colour TVs, which had been chosen as the flagship product for the China market. Samsung had to decide whether it should focus on the low or high-end market segment (or both), and whether to import or produce locally.
Critical Questions:
· Which market segment should Samsung China target: High-end or low end? ...
Analysis:
Samsung’s present market segment in China is low to medium-end products. ... Also the urban market for low-medium colour TV sets was nearing saturation. ... The colour TV market in China expanded rapidly from 12. ...
Another important dimension to the case is the consumer’s buying power in China. 60 Million Chinese had per capita purchasing power exceeding US$ 1,000, an income level above, which Chinese could start buying colour TVs. ... There were no housing mortgages in China. ... Knowing China’s size and scope pf scalability it would be impossible to succeed throughout China in all product sectors. Consumer’s Colour TV preferences in urban China areas were a deep contrast with the rural ones. City dwellers were more concerned about brand names and the functionality of the products, while consumers in rural markets preferred colour TVs with reasonable quality and lower prices. ... China’s excessively fragmented retailing sector is consolidating fast. By working closely with the rapidly emerging retail chains, Samsung can improve distribution efficiency and make sure superior product quality and performance are communicated effectively to end customers.
Approximate Word count = 1874
Approximate Pages = 7.5
(250 words per page double spaced)
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