Chapter 15 Samsung's rebranding approach

Today, as the main brand of Samsung, its main business scope includes semiconductors, digital media, communication networks and digital application businesses, and the Samsung brand has its own distinct product personality in various fields, gaining a foothold in the high-end market and leading fashion trend.From reshaping the Samsung brand image in the 1990s to launching first-class product brands, from a company that experienced the Asian financial crisis with debts of more than 17 billion US dollars and was on the verge of bankruptcy, by 2000, the brand value was 5.2 billion US dollars, ranking 43rd in the world ; Until October 27, 2005, the US "Business Weekly" published the brand value list, Samsung's brand value was 14.9 billion US dollars ranked 20th in the "2005 world's 100 most valuable brands", and for the first time It surpassed its long-standing rival Sony ($10.8 billion, No. 28).Samsung has blazed a new path to revive its brand in the electronics market, and through it it has become a world-renowned company.Samsung's brand value has increased by 186% in the past 6 years (as shown in the chart below), creating the fastest growth rate on record.

How did Samsung get out of the predicament and rapidly increase its brand value?What is the secret of its success?What enlightenment can we get from it?Aiming at these problems, this paper reveals the whole process of its rapid brand value promotion from the perspective of brand value for the first time through detailed research on Samsung. In the late 1980s and early 1990s, Samsung's microwave ovens piled up and had to be discounted. As a result, it lowered its brand reputation and left a second- or even third-rate brand impression in the minds of American consumers.As a result, Samsung represents "low price, low quality, imitation".

At the same time, Samsung's chaotic brand promotion has also led to its low popularity and weak product competitiveness.In the early 1990s, Samsung had selected 55 advertising agencies for brand promotion. The direct consequence of this practice was that Samsung lacked a unified, distinct and positive brand image, and it was difficult for Samsung to increase its popularity. , the company lacks core competitiveness, it is difficult to attract the attention of consumers, and a large number of products are unsalable, and Samsung has to resort to fire sales in order to sell products, which makes Samsung fall into a vicious circle that is difficult to get rid of among.At this time, reshaping the Samsung brand has become a top priority.

In order to change the image, enhance its brand value, and establish a high-end brand image, in May 1996, Samsung Group Chairman Lee Kun-hee proposed to upgrade the third-rate image of Samsung products to first-rate, hoping to create a well-known brand.At that time, it was facing the Asian financial crisis, and the company fell into a crisis because it could not operate effectively.The painful lesson made Samsung Group realize that the lack of a strong brand is the Achilles' heel of Samsung's development.Therefore, it was decided to reshape the Samsung brand and implement a brand value-added strategy.The road of Samsung's rebranding is sailing amidst twists and turns.

1. Repositioning the Samsung brand How to reshape the Samsung brand, make Samsung a first-class brand, and increase the value of the Samsung brand in the electronic market where there are disputes among various powers and fierce competition?Kevin Keller, a well-known brand asset management guru, believes that many fundamental changes are often required to reshape a brand.The method can be to change the elements of the brand, reposition the brand, and establish a more convincing point of difference—that is, to create a brand identity, so that the brand is more in line with modern trends, more in line with modern user psychology, or more modern brand personality.Enter new markets, win new customers, and use new marketing programs to improve the strength, recognition, and uniqueness of brand associations.Accordingly, in 1997, Samsung announced the creation of a global super brand, first decided to implement a single brand portfolio strategy, selected the brand name "Samsung", decisively dismounted some low-end products that were selling well, and had multiple sub-brands in the past, such as Plano , Tantus, Yepp, Wiseview, etc., implementing a single brand strategy.Thirdly, Samsung endowed the brand with the connotation of "a leader in digital technology, high value and fashion", positioned itself in a niche market with high prices and high profits, and implemented a differentiated pricing strategy.The target group is positioned as trend-seeking, fashion-conscious professionals and the younger generation.Therefore, Samsung has basically given up the low-end market. Samsung's various product lines - such as mobile phones, consumer electronics devices and memory chips - are all positioned in the mid-to-high-end market. This market positioning is the basis for Samsung to establish a noble brand image.This can be seen from the Chinese mobile phone market in 2003: Samsung mobile phones have an absolute advantage in China's mid-to-high-end mobile phone market. Relevant authoritative statistics show that as of October 2003, Samsung Electronics had a GSM and mobile phone market of more than 3,000 yuan in China. The market share of CDMA mobile phones is as high as 43.96% and 34.07% respectively.And Samsung has also determined that leading technology, rapid product innovation and unique and stylish design are the points of difference in the digital field.This is because Samsung realizes that in the future era when product technology is indistinguishable, consumers will meet increasing aesthetic and psychological needs through products, and design will become a hot spot and trend of global consumption.Facts have proved that this is correct. Samsung has captured the consumers of high-end products in the digital field with this unique point of difference, and has taken root in the high-end market. With huge profits, Samsung has enough funds to invest in the research and development department, so that Samsung can continue to innovate and lead the fashion trend in the digital field.It is this clear brand positioning that makes Samsung take the first step in the rebranding process steadily.

2. Adapt the organization to the needs of the rebrand Samsung is deeply aware that "the enemy we are fighting with is ourselves." David A. Aaker, a famous brand management guru, believes that when building a strong brand, we must follow the rules of the organization. Brand asset manager, series brand manager, global brand manager, CEO, brand pioneer, product category manager, brand committee or communicate with collaborators?Again, organizations should adapt appropriately to the needs of rebranding.To this end, Samsung reformed and adjusted its organization and system to meet the needs of rebranding.After establishing the implementation of the Samsung single brand strategy, the Samsung Group established a "Brand Committee" to manage the Samsung brand, stipulating that apart from Samsung, overseas branches are not allowed to use the "Samsung" brand without the group's permission. , you must obtain the consent of the Group's "Brand Committee" before it can be used.Samsung chose the "Brand Committee" instead of other people to manage the Samsung brand because the "Brand Committee" can formulate the identity positioning for Samsung, ensure that the positioning is effectively communicated, and can solve the cooperation between different businesses of Samsung. So as to achieve more effective cooperation and coordination in the rebranding activities.This is very important in the process of Samsung's rebranding, because a strong brand must first have a brand identity, and Samsung uses the organization "Brand Committee" to guarantee it.In order to be more complete in organization and better implement the marketing plan of rebranding, in 1999, Samsung set up a "Global Marketing Office" responsible for brand management, responsible for the implementation of Samsung's complete marketing plan for rebranding, and hired Kim Byung-guk (Deputy Prime Minister), an expert who graduated from Harvard University, is in charge.

Kevin Keller, a well-known brand asset management guru, believes that rebranding, establishing a new brand image, and a new marketing plan are essential to improving the strength, praise, and uniqueness of brand associations.For this reason, three months after Samsung established the brand strategy in September 1997, it came up with a complete set of implementation plans.The Samsung brand strategy is: resolutely implement the TOP-DOWN (top-down) approach, and take the high-end route.In order to implement Samsung's brand strategy, Samsung started from the theoretical framework of establishing a customer-oriented brand equity, and used it in four aspects around the marketing plan combination 4P - product, pricing, marketing channel, and communication (communication). A new set of marketing plans to execute the rebranding plan for Samsung.

The product itself is the core of brand equity, and designing a product that can fully meet the needs of consumers is the prerequisite for successful marketing.Products are designed, manufactured, marketed, sold, shipped and serviced with strong, powerful and unique brand associations that create a positive brand image.In particular, the perceived quality of a product is an extremely important brand association that often influences consumers' purchasing decisions.The product quality summarized in earlier surveys generally includes the following criteria: ◎Standard quality: the degree to which the product meets the specification and has no defects;

◎Reliable: the stability of product use over a period of time; ◎Durability: the expected economic life of the product; ◎Convenience: the convenience of using the product. Samsung requires itself to establish a brand of world-class products, and pays great attention to product quality, which is mainly reflected in the following three aspects. 1. High-quality products establish brand image and enhance brand value First-class brands need high-quality quality guarantees. Samsung’s leaders realized this very early. In 1992, Samsung Group Chairman Li Kunxi proposed the idea of ​​​​"new management", and Samsung began to focus on external "weight thinking" Shift to "Quality Thinking" that emphasizes quality and performance.Under the guidance of this concept, Samsung pays close attention to the quality of products.Take Samsung mobile phones as an example. In order to build a high-quality brand, there was a famous "mobile phone incident"-Samsung burned 150,000 substandard mobile phones.And in order to create excellent products and seize Motorola's market, Samsung mobile phones have undergone rigorous tests in various harsh environments, and named the product "Anycall", which means a mobile phone that can be used anywhere at any time.

2. Continuously carry out brand innovation, maintain brand image, and maintain brand vitality At the same time, Samsung realizes that a strong brand needs continuous product innovation to maintain the brand image, so as to maintain the vitality of the brand, make it enduring, and reflect the company's ability to establish a positive brand association.Therefore, Samsung places great emphasis on digital technology and technological innovation.This can be traced back to the early 1990s, when Samsung realized that technological innovation in digital communication would change the future competitive landscape, and invested heavily in digital electronic technology and increased investment in research and development.This is specifically reflected in the following: in 1996, research and development funds had exceeded 1 trillion won, and the number of researchers reached 10,000; from 1997 to 2001, Samsung Electronics invested more than 7% of its annual sales in research and development; In 2005, R&D funding increased to 8% of annual sales.Samsung's R&D investment in digital technology has achieved remarkable results, as shown in the table below.

Samsung's achievements in product innovation from 1997 to 2005 1997 Developed the first 30-inch TFI-LCD in the world 1998 Launched 1G SDRAM for the first time The world's first digital TV was successfully developed Year 1999 The world's first 1Gb flash memory chip was successfully developed The world's first IMT-2000 notebook computer, system and central semiconductor chip were successfully developed Successful development of watch mobile phones, TV mobile phones and wireless Internet mobile phones 2000 Announced to break through the 0.1micron limit technology The world's first 288MRDRAM was successfully developed Successful development of photography mobile phone 2001 Developed the world's largest 40-inch TFI-LCD year 2002 The world's first 1G NAND flash memory was successfully developed Year 2003 The industry's first and thinnest 9.8mm laptop unveiled year 2004 Launched the world's largest 63-inch PDP TV 2005 Introduced the world's largest bendable color LCD panel It is through continuous technological innovation and continuous launch of new products that Samsung has finally established itself as a high-end brand image leading the world trend in digital electronics. 3. Unique and fashionable product design, maintaining brand differences First-class products not only require excellent product performance, reliable quality, and continuous product innovation, but also need unique features in product style and design to attract consumers' attention.For this reason, Samsung pays special attention to product design, emphasizing innovation in design.This can be reflected in the following two aspects. (1) Invest heavily in design Samsung predicted the importance of product design very early. In 1996, Lee Kun-hee announced in his New Year speech that "in the 21st century, the key to success or failure lies in the software competitiveness of design." A revolution in design, Samsung has invested heavily in design.In 1996, Samsung hired five foreign professors and founded the Innovative Design Laboratory (IDS).In order to cultivate design innovation, Samsung also specially invited Tom Hartie, a design prodigy from IBM, to broaden the minds of Samsung's designers.Not only that, Samsung also created opportunities for the company's main designers to work with outstanding talents in the United States to broaden their horizons and keep up with the world's highest level.In order to ensure a steady stream of creative sources, Samsung has gathered talents. By 2004, the number of designers in Samsung's six design centers around the world had doubled to 470.Annual spending on the design department, since 2000, the company's design budget has been growing at a rate of 20-30% per year.To closely track trends in its most important markets, Samsung has opened design centers in London, Los Angeles, San Francisco and Tokyo, and in 2004 opened a new one in Shanghai.Samsung's huge investment has paid off. By 2004, Samsung had achieved the myth of the "king of innovation" in design: in the past 7 years, Samsung has won 18 IDEA awards (by the American Industrial Design Association and the US "Business Weekly") Awarded the Oscars in the industrial design industry), 26 IF awards (issued by the Hannover Industrial Design Forum in Germany), 27 G-Mark awards (excellent design awards issued by the Japan Industrial Design Promotion Organization). (2) Fashionable product design - "humanized" design concept, "personalized" appearance design A strong brand must not only conform to the psychology of modern users, have the personality of a modern brand, but also be more in line with modern trends.These requirements are mainly reflected in the design of the product.In order to be unique in design, Samsung products are designed from the perspective of consumer experience, emphasizing the "humanized" design concept and "personalized" appearance design.This is reflected in: in order to facilitate the daily operation of users, when Samsung designed a mobile phone with a camera function, it not only added a camera shortcut key on the side of the fuselage, but also pioneered the 180° flip double-rotation function; Samsung's LCD TV uses brightness sensing technology According to the brightness of the external environment, the automatic adjustment of the brightness of the screen is realized. Samsung product design not only has the above-mentioned "humanized" design concept and "personalized" appearance design, but also gives the product a "fashionable" spirit.Samsung strives to embody outstanding aesthetics and values ​​in the design of each series of products.This is reflected in: Samsung has spared no effort to innovate in the appearance and thinness of the LCD display, almost turning the display into a work of art in the study; Samsung has worked hard on the industrial design and functional configuration of the mobile phone. Samsung designed the first The first pearly white cell phone, the first cell phone to hang around the neck and the first cell phone to increase the body's circadian rhythms.Samsung's image as a "young", "popular" and "fashionable" digital pioneer continues to strengthen among consumers. The characteristics of "technology", "fashion" and "avant-garde" embodied in the products designed by Samsung, as well as the leading design concept have been recognized all over the world.This has made great contributions to establishing the image of Samsung's "coolest and most fashionable" digital electronic products. A brand's pricing policy can generate associations in consumers' minds.In setting product prices, a key issue in a successful value pricing strategy is understanding exactly how much value consumers perceive the brand to have, and how much premium they are willing to pay above the cost of the product.Because Samsung is positioned as a high-end product, its target group is young people such as professionals who pursue fashion, cool, and love digitalization.Consumers in these groups are willing to pay high prices for Samsung Electronics' stylish designs, and are also able to pay high prices for Samsung Electronics' stylish designs.From their point of view, the high price strategy of Samsung Electronics, which has a stylish design, is a matter of course.Samsung is effectively evaluating the premium that the target group is willing to pay for the unique and fashionable design of high-quality Samsung digital electronic products, and successfully adopted a high price premium strategy in product pricing.In the global market, Samsung's product pricing is relatively high among similar products.This can be seen from the pricing in the Chinese mobile phone market in 2003. The average price of Samsung mobile phones was basically around 2,700 yuan, which was about 500-1,000 yuan higher than Nokia and Motorola, which had leading market shares at that time.And in order to maintain Samsung's high-price strategy and establish a positive association of high-priced and high-quality products, Samsung pays more attention to publicity and promotion when doing promotions, and avoids activities such as big discounts and "buy one get one free" that are unfavorable to Samsung's high-priced pricing. . The high-price pricing strategy has created positive and positive brand associations for the Samsung brand—high price means high quality.This has played an important role in enhancing Samsung's brand image and increasing Samsung's brand value. Famous brand management guru David A.Aaker believes that a brand's channel strategy can have a profound impact on brand equity and ultimate sales success.Successfully designing and managing a brand's marketing channels builds brand awareness and enhances the strength, force, and uniqueness of brand associations.In the process of implementing the rebranding plan, Samsung's marketing channel strategy is reflected in the following two aspects. Strategy 1: Enter high-end sales channels, improve brand association, and enhance brand value A good horse is equipped with a good saddle, and high-end products should be sold in high-end places.In order to implement the rebranding strategy, Samsung Electronics selected some developed countries in the United States and Europe as the initial investment targets, and positively instilled Samsung's image as a digital company to achieve breakthroughs.Based on this concept, Samsung adjusted its brand marketing channels: In the US market, Samsung withdrew its products from some large chain stores, such as Wal-Mart and Kmart-because these chain stores use low prices as their "appeal". Customers who consume also value the price of the product more than the quality of the product.Then Samsung moved DVD players, TVs, computers, etc. to specialty stores like Best Buy, Sears, and Circuit City that cater to high-end consumers—because these stores value product quality and brand name. The change of the sales place changed Samsung's brand association among consumers from "low price" to "high quality", thus establishing a good brand association in the construction of Samsung's brand assets.Good brand association can strengthen brand awareness and enhance brand value. Strategy 2: The channel strategy of "move at the right time and move in accordance with the situation" "Who wins the channel wins the world", it can be seen that the channel has an important influence on a company's products, this is because the members in the channel have the most visible and direct influence on customers, and the behavior of channel members to store and sell products can completely strengthen and weaken brand equity.So how does Samsung manage the marketing channel and actively help channel members to add value to the producer's brand? Just as Lee Kun-hee, chairman of Samsung, said, "Except for his wife and children, everything else must be changed!", "Change in innovation" has become the soul of Samsung's corporate culture. develop.Samsung's channel strategy is also a strategy of seeking change in innovation, and gradually formed a channel strategy of "moving at the right time and moving in accordance with the situation".This can be seen from Samsung's channel strategy in China: Samsung entered the Chinese market with its own brand in August 2001, and its channel strategy has changed again and again.At the beginning of its involvement in the Chinese market, Samsung implemented a channel strategy of exclusive general agent, which laid a stable foundation for opening up the market. Management becomes more difficult.So, in 2002, Samsung adopted a "closed" channel management. In 2004, in order to better adapt to the development of the market, Samsung began the process of flattening channels: implementing the branch system throughout China, and subdividing the channels into large wholesalers, retail alliances, regional alliances, industry key customer departments and chain large Five categories of stores, and provide point-to-point support for different types of channels.In this way, the original channel dealers are promoted to change their roles, and the original channel agents are transformed into channel strategic alliance partners. On the premise of ensuring the channel dealers' maximum interests, the common development of channel dealers and Samsung is realized.As a result, Samsung has enhanced its grasp of the market, improved its competitiveness, and enhanced its brand value. Marketing communications are the "voice" of the brand, the means by which it talks and connects with consumers.In a consumer-centered brand equity model, marketing communications can build brand equity by creating strong, powerful, and unique brand associations in consumers' minds by building brand awareness.Therefore, design a comprehensive and comprehensive marketing communication plan, and make various communication means "match", so that they can strengthen each other, so that consumers can obtain information through marketing communication, strengthen purchase motivation, and increase consumers' chances of obtaining brand information. , It is very important to form a strong, good and unique brand association, accumulate brand equity, and enhance brand value.How did Samsung design its marketing communications as it executed its rebranding plan?Through the detailed research on Samsung, this paper finds out that in order to carry out the rebranding plan, Samsung Electronics implements a communication method that combines various marketing communications centered on the Olympic TOP plan, which is embodied in the following three aspects. 1. Unify the brand advertising media organization and carry out a series of effective advertising campaigns In order to reshape the brand image and change the chaotic situation in Samsung’s publicity before, Samsung first unified the brand media agency to enhance the brand image: it integrated more than 50 original global advertising agencies into one, and cooperated with the US Interpublic Group advertising company .Even the titles of the advertisements were integrated, which really launched the brand's advertising strategy.This simplifies and unifies Samsung's brand image, as well as making Samsung's advertising look more consistent.And carried out a series of effective advertising campaigns, in 1998 put forward the slogan: "Samsung Digital Everyone&aposs invited", that is, "Samsung Digital World welcomes you". In order to further enhance the brand status of Samsung Electronics and make the Samsung brand enter the ranks of the world's top brands, in 2001, Samsung launched a "Digital World, Everyone Shares" advertising campaign centered on the United States.This global integrated advertising campaign involved 30 countries and the advertising cost reached 400 million US dollars. This advertising campaign improved the Samsung brand in the eyes of consumers in western developed countries headed by the United States as a low-grade and mainland brand. Impression, whose brand value increased by US$1 billion within one year, became the second fastest-growing brand in the global brand value that year.Samsung took the opportunity to pursue the victory and continued to launch a new round of larger-scale advertising campaign with the theme of "digital experience" in 2002, making the brand value reach 8.6 billion US dollars in 2002, ranking 34th. 2. A variety of sports sponsorship activities centered on the Olympic TOP plan In order to enhance Samsung's reputation and make more people around the world know about Samsung and understand Samsung, Samsung Group insists on carrying out various sports sponsorship activities centered on the Olympic TOP plan to increase the exposure of Samsung brand.The table below lists the major sports events that Samsung has sponsored over the years. Samsung's various sports sponsorship activities centered on the Olympic TOP plan Sponsored the Seoul Asian Games in 1986 Sponsored the Winter Olympics for the first time in 1988 and became a world-class partner of the Winter Olympics in the field of wireless communication equipment Sponsored Beijing Asian Games in 1990 Sponsored the Hiroshima Asian Games in 1994 1996 Sponsored the exhibition during the Atlanta Olympic Games Sponsored the Bangkok Asian Games in 1998; sponsored the Nagano Winter Olympics In 2000, Samsung became the top sponsor of the Sydney Summer Olympics Sponsored Yancheng Winter Olympics in 2002; Sponsored Fushan Asian Games Sponsored the 22nd World University Games in 2003 Sponsored the Athens Olympic Games in 2004 Sponsored the Turin Winter Olympics in 2006 Will sponsor the Beijing Olympic Games in 2008 Samsung grasps the psychology of fashion people who love sports events, and through sponsoring major sports events, it has successfully enhanced the exposure of the Samsung brand, increased the popularity of the Samsung brand, and rapidly increased the value of the Samsung brand.However, the success of Samsung's various sports sponsorship activities centered on the Olympic TOP plan lies in the fact that Samsung Electronics' sports marketing is not limited to the form of sports sponsorship, but also integrates various means such as advertising, promotion, and public relations activities. marketing.For example: at the 2000 Sydney Olympic Games, Samsung launched the Olympic Covenant Plan with Samsung - built an athlete activity center called "Meet the Olympics" in the Olympic Park, using Samsung's cutting-edge communication products and the Internet, satellite and Wireless technology gives athletes a place to communicate with family and friends.In addition, Samsung also launched a special service of "Sharing Samsung Happy Moments", that is, Samsung provides athletes and spectators with the latest Samsung mobile phones, and they can make 3 minutes of free calls to their family and friends around the world to share their Olympic Games experiences and feelings.Samsung successfully used this high-tech public booth to showcase Samsung Electronics' current and future products.The program caught the attention of many and was relaunched in Salt Lake City due to its widespread reach. 3. Take the entertainment car, Samsung's fashion marketing Samsung has been very successful in integrated marketing communication, and it has successfully used various important marketing media tools. Especially in 2003, Samsung found a good opportunity to use entertainment, a fashion tool with global influence.In a short period of time, the strong digital technology strength of Samsung Electronics has been conveyed to the hearts of consumers around the world, and Samsung Digital technology has been integrated into people's lives.This is the Matrix Phone (SPH-N270) used by Samsung Electronics in cooperation with Warner Bros. in the United States in the film "The Matrix: Reloaded" in 2003, which is a mobile phone tailor-made by Samsung for the film.Samsung Electronics launched the hacker phone just in time for The Matrix after the film became popular, and the phone quickly attracted an enthusiastic audience of "The Matrix"-a group of trend-seeking, fashion-conscious professionals and younger generations-and quickly spread to 52 The national market has enabled Samsung Electronics to establish a "coolest" and "most fashionable" brand image and obtain good economic benefits.The Samsung brand is in full swing, the sound of the Samsung brand is heard all over the world, and the brand value is rising steadily, reaching 10.8 billion US dollars in 2003, and its position has risen to 25th. To sum up, the secret of Samsung's rapid rise in brand value in just 36 years is Samsung's successful rebranding and a full set of marketing plans to execute the rebranding plan.The success of Samsung's brand remodeling firstly lies in the fact that the leaders of Samsung Group timely chose the great strategic layout of Samsung's brand remodeling at the moment of Samsung's crisis. They correctly predicted the future development trend of the industry, invested heavily in the digital field, and created Brand identity with rapid technological innovation, constant launch of new products and unique, stylish product design, clear repositioning of the brand.And make organizational adjustments to adapt to the remodeling plan, set up a "brand committee" to ensure positioning communication and cooperation, and set up a "global marketing office" to plan marketing communication plans to implement Samsung's brand remodeling plan.In the end, Samsung successfully established a new brand image of "fashion, high-end, leading technology, and e-commerce".