- Research and explain the channel structure of Samsung Canada. (Please include traditional, on-line, mobile, licensed and other channels)
Why did Samsung get into the Ecommerce business and what effects has it had on their channels strategy and members.
3.. How has the Samsung brand evolved throughout the years and what impact has it had on their channel strategy?
***Please include references
The Channel Structure of Samsung Canada
The Samsung Group is a multinational founded in 1938 by Byung-Chull Lee as a trade export company. The company started expanding into other industries in 1958. Although the Samsung Group operates in four industries, the company’s major focus is electronics (Jung, 2017). In 2011, the company was position 22 among Fortune 500 companies.
The construction of the premises for Samsung Canada began in 2012 in Burnaby, B.C. The move to Canada was part of a strategy to provide Canadian consumers with a retail location where they could interact with the company’s electronic products. Also, Samsung Canada was part of the Group’s ongoing mission to promote innovation which has earned the company its place as a leading electronics brand. Samsung Canada caters to four groups of people; youth, wealthy families, business users and hobbyists. The company uses both direct and indirect channels to distribute its products; it mostly sells its products online and at large stores such as Future Shop and Walmart. Samsung Canada also has licensed retailers who they have partnered with to market and sell Samsung electronics.
Initially, Samsung Canada majorly sold its products through retailers and high-end chains such as Walmart. This meant that the company had to involve these third parties in product development. The company also relied heavily on the USA subsidiary for promotional strategies. While this gave them access to tested promotional material, it limited the company’s ability to develop content appropriate for the Canadian market. In order to strengthen their brand, Samsung Canada had to shift from the more traditional feature-centered marketing.
For a long time, the company’s strategy revolved around technology and all communication was based on their technological capabilities. This worked well enough particularly for the Canadian Market where 1 in 10 households owned a Samsung television. Nonetheless, many Canadians did not consider Samsung their go-to brand. The Samsung team had to reinvent their strategy to focus more on building an emotional connection with customers. This shift morphed Samsung Canada into a consumer brand as that valued consumer feedback. In a nutshell, the company’s strategy shifted from a feature-oriented approach to a customer-insights approach. Samsung Canada has learnt to sell to people by appealing to their passions rather than just offering specifications and speeds.
Today, Samsung Canada still uses traditional channels to sell its products but has incorporated the internet into its channel structure. The shift came with some changes in the general way of doing things, of course. For instance, Samsung Canada partnered with North Strategic (PR), Starcom MediaVest Group Canada and Cheil Canada to create a single creative force. These three agencies assist the company with the execution of new ideas as per their specialization. Starcom handles issues to do with social media; Cheil executes all matters advertising and North Strategic handles issues to do with PR and events. This collaborative system is not without its challenges because agencies are generally territorial. However, the arrangement has propelled the company to great success in the Canadian market.
The company is also maximizing on its online presence as a channel for distribution. For instance, Samsung Canada is upgraded to align it with the growing brand. The company also maintains an active Facebook page. To support this, the company has a social media team. The Samsung Passion Fund, launched in 2012, is part of a strategy to provide Samsung users with a support platform where they can share ideas and tips on how to use their products.
In 2016, Samsung announced their expansion into ecommerce. The decision to provide a person with an online payment option was motivated by the need to expand Samsung Pay. The move was bound to happen as Samsung Pay could already work with both NFC and swipe-based card readers. Ecommerce provided Samsung with a great opportunity to grow its brand as many people today would rather make purchases and payments online than go to the shop. The company’s ecommerce system is built on communication, content, commerce, collaboration and customization. The move to expand into ecommerce has increased Samsung’s reach globally.
Samsung has positioned itself as a leading producer of hip gadgets for the young generation and as such the brand has evolved in a bid to have some control over what users are accessing on the internet (Jamali & Khan, 2018). The company has also shifted focus from basic TVs to high end devices such as smart phones. It also helps that the company sponsors major events such as the Olympics. The company has built an extensive web presence and works with many consultants to develop sustainable marketing strategies (Mosca & Civera, 2017).
Jung, S. C. (2014). The analysis of strategic management of Samsung Electronics Company through the generic value chain model. International Journal of Software Engineering and Its Applications, 8(12).
Mosca, F., & Civera, C. (2017). Digital channels and social media management in luxury markets (Vol. 1. pp. 1-200). London: Routledge.
Jamali, M., & Khan, R. (2018). THE IMPACT OF CONSUMER INTERACTION ON SOCIAL MEDIA ON BRAND AWARENESS AND PURCHASE INTENTION! CASE STUDY OF SAMSUNG. Journal of Marketing, 114.