CHAPTER 1

CONCEPT OF PROMOTION MIX

1.1 PROMOTION

Promotion is one of the market mix elements or features, and a term used frequently

in marketing. The marketing mix includes the four P's: price, product, promotion, and

place. Promotion refers to raising customer awareness of a product or brand, generating sales,

and creating brand loyalty. Promotion is also found in the specification of five promotional

mix or promotional plan. These elements are personal selling, advertising, sales

promotion, direct marketing, and publicity. A promotional mix specifies how much attention

to pay to each of the five subcategories, and how much money to budget for each. A

promotional plan can have a wide range of objectives, including: sales increases, new product

acceptance, creation of brand equity, positioning, competitive retaliations, or creation of

a corporate image. Fundamentally, there are three basic objectives of promotion. These are:

1. To present information to consumers as well as others.

2. To increase demand.

3. To differentiate a product.

(Figure 1 )

1

1.2 INTRODUCTION TO PROMOTION MIX

In the current era of modern marketing, it is not enough for a business to have good products

sold at attractive prices. Inorder to generate sales and profits, the benefits of products have to

be communicated to the present and potential stakeholders, and the general public. In

marketing, this is commonly known as ‘promotion’.

Promotion is all about companies communicating with the customers.

A business’ total marketing communication programme is called the ‘Promotion Mix’. The

different elements of this mix are:

(Figure 2)

Advertising

Sales Promotion

Publicity

Personal Selling

Public Relations

Direct Marketing

2

Not each element is helpful or effective in all product market situations. For example, while

advertising is known to deliver results in the soft drinks industry, personal selling is found to

be effective in selling personal computers and software. Thus, while in consumer non-

durables, advertising has a bigger role to play, personal selling is of significant importance in

consumer durables, industrial products and services marketing. Sales promotion and publicity

have an equal significance in all types of products.

The following figure illustrates the importance of each of these elements of the promotion

mix in different product groups.

(Figure 3)

The factors that guide a marketer’s decision in selecting a promotion mix are:

a) Nature of the product market: That is whether it is a consumer or industrial product.

3

Consumer goods Industrial goods

Advertising

Sales promotion

Personal selling

Public relations

b) Overall marketing strategy: That is, whether the firm wishes to “push” the product or

create a “pull” for the product. The “push” refers to selling the product through the

marketing network and hence involves the critical function of managing distribution

channels. In this strategy the emphasis is on personal selling and trade promotion. But

in the “pull” strategy the firm creates consumer demand for its product or brand such

that the consumer demands the brand at the retail outlet. Advertising and consumer

promotion go a long way in creating the desired pull for the brand.

c) Buyer readiness stage: The choice of different elements of the promotion mix is also

dependent on the buyer’s readiness and awareness of the brand. The promotion mix

can be assembled depending on where the buyer is in the hierarchy of response

models. Like advertising will play a major role in creating awareness, demonstration

and samples will help bring about a change at the affective and behavioural levels.

d) Product life cycle stage: This will also play a role in deciding on the promotion mix.

For example, in the introduction stage, advertising and publicity are found to have a

significant role, and are cost effective, in creating awareness, desire and finally the

trial. Even samples play a key promotional role in industrial products. But in the

maturity stage, sales promotion and personal selling help make the product steer

through the competition maze. Thus it is important to know where the product is in its

life cycle.

4

CHAPTER 02

PROMOTION MIX STATEGIES

Promotion mix strategies to get your product or service to market can be roughly divided into

two separate camps:

PULL Strategy

PUSH Strategy

2.1 PULL STRATEGY:

A pull strategy involves motivating customers to seek out your brand in an active process.

"Getting the customer to come to you"

'Pull strategy' refers to the customer actively seeking out the product and retailers placing

orders for stock due to direct consumer demand. A pull strategy requires a highly visible

brand which can be developed through mass media advertising or similar tactics. If customers

want a product, the retailers will stock it - supply and demand in its purest form, and this is

the basis of a pull strategy. Create the demand, and the supply channels will almost look after

themselves.

EXAMPLES OF PULL TACTICS

Advertising and mass media promotion

Word of mouth referrals

Customer relationship management

Sales promotions and discounts

5

2.2 PUSH STRATEGY:

A push promotional strategy involves taking the product directly to the customer via

whatever means, ensuring the customer is aware of your brand at the point of purchase.

"Taking the product to the customer"

The term 'push strategy' describes the work a manufacturer of a product needs to perform to

get the product to the customer. This may involve setting up distribution channels and

persuading middle men and retailers to stock your product. The push technique can work

particularly well for lower value items such as fast moving consumer goods (FMCGs), when

customers are standing at the shelf ready to drop an item into their baskets and are ready to

make their decision on the spot. This term now broadly encompasses most direct promotional

techniques such as encouraging retailers to stock your product, designing point of sale

materials or even selling face to face. New businesses often adopt a push strategy for their

products in order to generate exposure and a retail channel. Once the brand has been

established, this can be integrated with a pull strategy.

EXAMPLES OF PUSH TACTICS

Trade show promotions to encourage retailer demand

Direct selling to customers in showrooms or face to face

Negotiation with retailers to stock your product

Efficient supply chain allowing retailers an efficient supply

Packaging design to encourage purchase

Point of sale displays

6

working of pull and push strategy

(Figure 4)

A successful strategy will usually have elements of both the push and pull promotional

methods. If one is starting a new business and intends to sell a product through retailers, he

will almost certainly need to persuade outlets to purchase and stock your product. He will

also need to raise brand awareness and start building valuable word of mouth referrals. If he

has designed a product around the customer and has considered all elements of the marketing

mix, both of these aspects should be achievable.

7

CHAPTER 03

ELEMENTS OF PROMOTION MIX

There are sixmain elements in a promotional mix.  They are:

Advertising

Personal selling

Sales promotion

Publicity

Direct marketing

Public Relations

(Figure 5)

Integration of all the elements of promotion mix is necessary to meet the information

requirements of all target customers.  This simply means that the promotion mix is not

8

designed to satisfy only the prospective buyer or only the regular buyer.  Some elements of

the mix may be aimed at the target customer who is unaware of the product, while others may

be aimed at potential customers who are fully aware of the product and are likely to purchase

it.  Suppose a customer is interested in buying a personal computer.  Because of his interest in

the product, he starts paying attention to computer advertisements in newspapers and

magazines. He may even read the media reports on personal computers by experts. He also

may participate in training programmes or demonstrations. He may also contact the sales

persons of different computers and find out the features and relative merits.  Based on all this

information he may then purchase a specific brand.

Therefore, to get better response from the target customers, one has to adopt all the different

components of the promotion mix. However, one should note that the elements of the

promotion mix must be coordinated and integrated so that they reinforce and complement

each other to create a blend that helps in achieving the promotional objectives of the

organization.

3.1 ADVERTISING:

(Figure 6)

Any paid form of non-personal communication through mass media about a service or

product or an idea by a sponsor is called advertising.  It is done through non personal

9

channels or media.   Print advertisements, advertisements in Television, Radio, Billboard,

Brochures and Catalogues, Direct mails, In-store display, motion pictures, emails, banner

ads, web pages and posters are some of the examples of advertising.  Paid promotion and

presentation of goods, services, ideas by a sponsor comes under the advertisement.

Advertising plays a significant role in awareness creation and attitude formation. It can

even generate a trial and purchase response as long as all other elements of marketing mix

play a contributory role.

Advertisers include not only business firms but also museums, charitable organisations

and government agencies that direct messages to target public. Advertisements are a cost-

effective way to disseminate messages, whether to build brand preference or to educate

people. Organisations handle their advertising in different ways. In small companies,

advertising is handled by someone in the sales or marketing department, who works with

an advertising agency. A large company will often set-up its own advertising department.

Most companies use an outside agency to help create advertising campaigns and to select

and purchase media.

Advertising objectives are as follows:

Informative advertising figures heavily in the pioneering stage of a product

category, where the objective is to build primary demand. Thus the yogurt

industry initially had to inform consumers of yogurt’s nutritional benefits.

Persuasive advertising becomes important in the competitive stage, where a

company’s objective is to build selective demand for a particular brand. For

example, Chivas Regal attempts to persuade customers that it delivers more taste

and status than other brands of scotch whiskey.

10

Reminder advertising is important with mature products. Expensive four-colour

Coca-Cola ads in magazines are intended to remind people to purchase Coca-

Cola. A related form of advertising is reinforcement advertising, which seeks to

assure current purchasers that they have made the right choice. Automobile ads

often depict satisfied customers enjoying special features of their new car.

11

(Source: The Economic Times for the year 2013)

(Figure 7)

3.2 PERSONAL SELLING

(Figure 8)

This is a process by which a person persuades the buyer to accept a product or a point of view

or convince the buyer to take specific course of action through face to face contact.  It is an

act of helping and persuading through the use of oral presentation of products or services.  

Target audience may vary from product to product and situation to situation. In other words

personal selling is a person to person process by which the seller learns about the prospective

buyer's wants and seeks to satisfy them by making a sale.  Examples: Sales Meetings, sales

presentations, sales training and incentive programs for intermediary sales people, samples

and telemarketing etc.  It can be of face-to-face or through telephone contact. 

12

Personal selling has three distinctive qualities:

Personal confrontation: Personal selling involves an immediate and interactive

relationship between two or more persons. Each party is able to observe the other’s

reaction at close hand.

Cultivation: Personal selling permits all kinds of relationships to spring up, ranging

from a matter-of-fact selling relationship to a deep personal friendship. Sales

representatives will normally have customers’ best interests at heart

Response: Personal selling makes the buyer feel under some obligation for having

listened to the sales talk.

PROCESS OF PERSONAL SELLING:

1. Pre-sale preparation: The first step in personal selling is the selection, training and

motivation of salespersons. The salespersons must be fully familiar with the product, the

firm, the market and the selling techniques. They should be well-informed about the

competitor's products and the degree of competition. They should also be acquainted with

the motives and behaviour of prospective buyers.

2. Prospecting: It refers to locating or searching out prospective buyers who have the

need for the product and the ability to buy it. Potential customers may be spotted through

observation, enquiry and analysis of records of existing customers. Social contacts,

business associations and dealers can be helpful in the identification of potential buyers.

3. Approaching: Before calling on the prospects, the salesperson should fully learn their

number, needs, habits, spending capacity, motives, etc. Such knowledge helps in selecting

the right sales appeal. After such learning, the salesperson should approach the customer

in a polite and dignified way. He should introduce himself and his product to the

13

customer. He should greet the customer with a smile and make him feel at home. He

should introduce himself and his product to the customer. In case he is busy with some

other customer, he should assure the new customer that he would be attended very soon.

The salesperson has to be very careful in his approach as the first impression is the last

impression.

4. Presentation: For this purpose, the salesperson has to present the product and describe

its features in brief. The presentation should be matched with the attitude of the prospect

so that the salesman can continuously hold his attention and create interest in the product.

5. Demonstration: In order to maintain customer's interest and to arouse his desire, the

sales-person must display and demonstrate the product. He has to explain the utility and

distinctive qualities of the product so that the prospect realizes the need for the product to

satisfy his wants. He should not be in a hurry to impress the customer and should avoid

controversy. He may suggest uses of the product and may create an impulsive urge to

possess the article by appealing to human instincts.

6. Handling objections: A sale cannot be achieved simply by creating interest and desire.

Every customer wants to make the best bargain for the money he is spending.

Presentation and demonstration of the product are likely to create doubts and questions in

his mind. The salesman should clear all doubts and objections without entering into a

controversy and without losing his temper. Testimonials, money-back guarantee, tact and

patience are popular means of winning over s hesitant buyers. The salesman should

convince the customer that he is making the best use of his money by purchasing the

product. For this purpose, the salesman should prove the superiority of his product over

the competitive products. He should not lose patience if the customer puts too many

queries and takes time in arriving at any decision. If the customer does not buy even after

14

meeting rejections, the salesman should let him go without showing temper. He must

believe in the universal rule that the customer is always right.

7. Closing the sale: This is the climax or critical point in the personal selling process.

Completing the sale seems to be an easy task but inappropriate handling of the customer

can result in loss of sale. The salesman should not force the deal but let the customer feel

that he has made the final decision. He should guide the customer in making the choice

without imposing his own view. Some adjustment in price or other concession may

sometimes be necessary for a successful closing. The salesman should show the same

interest in the customer which he exhibited during approach stage. Sales should be closed

in a cordial manner so that the customer feels inclined to visit the shop again. In closing

the sale, the article should be packed properly and handed over to the customer with

speed and accuracy. Once the customer has purchased the article, the salesman should

show and suggest an allied product. For instance, he may suggest socks, ties,

handkerchiefs, vests, etc., to a customer purchasing a shirt. This is known as additional

sales and requires great skill and tact.

8. Post-sale follow-up: It refers to the activities undertaken to ensure that the customer is

satisfied with the article and the firm. These activities include installation of the products,

checking and ensuring its smooth performance, maintenance and after-sale service. It

helps to secure repeat sales identify additional prospects and to evaluate salesman's

effectiveness.

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3.3 SALES PROMOTION

(Figure 9)

Sales promotion is any activity that offers an incentive for a limited period to obtain a

desired response from the target audience or intermediaries which includes wholesalers

and retailers. It stimulates consumer demand, market demand and improve product

availability.  Examples: Contests, product samples, Coupons, sweepstakes, rebates, tie-

ins, self-liquidating premiums, trade shows, trade-ins, and exhibitions.

Sales promotion offers three distinctive benefits:

Communication: They gain attention and usually provide information that may

lead the consumer to the product.

16

Incentive: They incorporate some concession, inducement, or contribution that

gives value to the customer.

Invitation: They include a distinct invitation to engage in the transaction now.

Companies use sales promotion tools to draw a stronger and quicker buyer response. Sales

promotion can be used for short-run effects such as to dramatize product offers and boost

sagging sales.

3.4 PUBLICITY

(Figure 10)

Non-personal stimulation of demand for a product, service or business unit by generating

commercially significant news about it in published media or obtaining favourable

presentation of it on radio, television or stage.  Unlike advertising, this form of promotion is

not paid for by the sponsor.  Thus, publicity is news carried in the mass media about an

organization, its products, policies, actions, personnel etc.   It can originate with the media or

the marketer, and is published or broadcast at no charge for media space and time.  Examples:

Magazine and Newspaper articles/reports, radio and television presentations, charitable

17

contributions, speeches, issue advertising, and seminars.  Publicity can be favourable

(positive) or unfavourable (Negative).  The message is in the hands of media and not

controlled by the organization/firm. 

The appeal of publicity is based on three distinctive qualities:

High credibility: News stories and features are more authentic and credible to readers

than advertisements.

Ability to catch buyers off guard: Publicity can reach prospects who prefer to avoid

salespeople and advertisements.

Dramatization: Publicity has the potential for dramatizing a company or product.

Marketers tend to underuse publicity; yet a well-thought-out program coordinated with the

other promotion mix elements can be extremely effective.

3.5 DIRECT MARKETING

(Figure 11)

18

Direct Marketing is reaching the customer without using the traditional channels of

advertising such as radio, newspaper, television etc.  This type of marketing reaches the

targeted consumers with techniques such as promotional letters, street advertising, catalogue

distribution, fliers etc.

Direct marketing has four distinctive characteristics. Direct marketing is:

Non-public: The message is normally addressed to a specific person which leads to

higher satisfaction.

Customised: The message can be prepared to appeal to the addressed individual.

Up-to-date: A message can be prepared on the spot and very quickly.

Interactive: The message can be changed depending on the person’s response.

3.6 PUBLIC RELATIONS

(Figure 12)

Public Relationsis the practice of managing the spread of information between an

individual or an organization and the public.Public relations may include an

organization or individual gaining exposure to their audiences using topics of public

interest and news items that do not require direct payment. The aim of public relations

by a company often is to persuade the public, investors, partners, employees, and

19

other stakeholders to maintain a certain point of view about it, its leadership, products,

or of political decisions. Common activities include speaking at conferences, winning

industry awards, working with the press, and employee communication.

"Public relations is a strategic communication process that builds mutually beneficial

relationships between organizations and their publics."

CHAPTER 04

LITERATURE REVIEW

PROMOTION MIX

Pheng low (1995) in defining promotion mix states, promotion involves any ways of

providing information and persuasion and reminding consumers of marketing mix of

products, goods or services. ohHyunjoo (2009) believes promotion results in increase

of sales and profit and also develops the tendency toward the brand finally brings

about increase in sales. Understanding consumers' reaction to promotion in supplying

useful approaches is very important both for increasing sales and other components of

marketing mix, because these factors are deeply interrelated; in fact components of

sales promotion can serve as significant factors in deriving consumers (Banerjee,

2009). In other words, promotion consists of providing direct or indirect ways of

communication with people, groups or organizations in order to inform and persuade

them on the way to purchase products and services (Rezvani, 2008). Promotion mix

tools most applied in this industry include: Sales promotion, advertising, personal

selling and direct marketing.According to Kotler et al.(2010) advertising is part of

promotional mix which also consists of public relations, direct marketing, sales

20

promotion and personal selling. Advertising and public relations are mass-promotion

tools which are used by companies to inform consumers about a new product or

service whereas others mentioned have a more personal and direct way of

communicating. Companies use paid media to inform, persuade and

remind consumers. When firms create their promotional mix they can choose from

two strategies: push or pull strategy. Through push strategy the companies are

‘’pushing’’ their product forward through distribution channels towards e.g.

wholesalers and retailers. The main emphasis on the promotional mix is usually sales

promotion and personal selling. Pull strategy tries to influence the consumers and

thereby increase the demand. Advertising and sales promotion have greater emphasis

on the pull strategy. According to the standards of Finnish Consumer Agency, advert

should clearly demonstrate who the advertiser is and also follow the codes of good

practice (Consumer Agency 2011).

ADVERTISING

Advertising has been designed to direct views also make change in behaviour easy

and may present the most convincing sale messages with most accurate perspective of

products or services without much cost (Celeb, 2007). Until 1989, advertising in

eastern and central Europe had carried a negative implication and been considered as

a tool to spread Capitalism, but gradually advertisement have been designed which

had informative aspects and because of its significance in informing upon new

products and services it turned to be generally accepted(Petrovici, 2007). Indeed

advertisement is one of the primary communication link with consumers, hence

consumers' desired image and language along with culture, economy and commercial

changes should be kept in mind (Wang, 2009) and in order to bring about the best

21

influence, the message type should accord with the product, that is logical messages

are more useful for consumer products whereas emotional messages fit with value

based and empirical products (Mortimer, 2008). If the content of the message and the

way it's represented convey association of an specific desired brand for

people, they get more information on it which results in positive reaction toward the

product (Praxmarer,2009). With respect to the variety of advertising media, three

public ones are studied which are most applied in this industry: television, radio and

magazine.

SALES PROMOTION

Defining the term sales promotion is rather difficult for the presence of multiple

relating techniques and tactics and that sales promotion is a tool to achieve company's

marketing communication objectives and an essential element in planning marketing

(Blattberg, 1990). Sales promotion is a short term strategy to derive demand and also

and especial marketing offer which provides more profit than what consumers receive

from the sale position of a product and also has sharper influence on sales (Banerjee,

2009). This tool has the ability to attract and keep loyal customers and is an excellent

what to persuade them build viable link with the organization and involves all motifs

applied by the producer to persuade trade with members of a channel (Ndubisi, 2006).

Among various tools of sales promotion, four ( free sample, advertising gifts, coupon

and discount) have more influence in the industry.

PERSONAL SELLING

Personal selling is the executive wing of organizations to attract customers and

increase sale of products and services. All efforts in organizations' different

departments result in the performance of Personal selling(Azizi, 2009), since it is

informed of the rival companies and market changes sooner than other

22

departments(Storbacka, 2009). In fact, they act as private link between company and

customer and from consumers' point of view represent the company, bring value for it

and so need information on the consumer (Moghareh Abed, 2009) and in order to be

successful in sales process, having information on marketing, financial issues and

activities are essential (Storbacka, 2009). Trust between the seller and the buyer is

important which has been vastly discussed in marketing literature and researches

show that more trust results in more effective performance (Dawes, 2006).

DIRECT MARKETING

Direct Marketing Association defines Direct Marketing as follows: Direct Marketing

is an interactive marketing system which uses one or more advertising media to

provide a measurable reaction or trade in every level (Kotler, 2006). This represents a

flexible method which can deliver the message and target especial group of customers

in an effective way (Hayter, 2005). Direct Marketing is one of the most important

elements of marketing mix in most successful companies. The more competition in

market and customers surrounded by messages and information on the products, the

clearer boundaries of marketing environment become and more potential channels for

most traditional companies are provided (Duffy, 2005).

Among various direct marketing methods, four main ones i.e. sale through catalogue,

email, telephone and S.M.S are the most commonly used methods.

PUBLIC RELATIONS / PUBLICITY

23

Fiske (1980) defined public relations as a form of communication management that

seeks to influence the image of an organization and its products and services. Public

relations usually focus on communicating positive aspect of the business.

This involves a company to use publicity tools like news release whereby the

company informs a newspaper, radio station or other media of an idea for a story.

The firm can also use news conference in which the representatives of the media are

all invited to an information meeting and advance materials regarding the content are

sent.

Kotler (2000) noted that non-profit organizations rely heavily on Public Service

Announcements (PSAs), which are free space or time donated by the media. Non-

profit organizations also use high visibility individuals as publicity tools to create

visibility for their companies, their products and themselves.

The publicity efforts are coordinated with news releases, conferences, advertising,

donations to charities, volunteer activities endorsements and any other activities that

may have impact on public perceptions.

24

CHAPTER 05

ABOUT SAMSUNG

5.1 AN OVERVIEW

The Samsung Group is a multinational conglomerate corporation headquartered in

Samsung Town, Seoul, South Korea. It is the world's largest conglomerate by revenue

with annual revenue of US$268.8 billion in 2012 and is South Korea's largest chaebol.

The meaning of the Korean word Samsung is "Tri-Star" or "three stars". The Samsung

Group is composed of numerous international affiliated businesses, most of them

united under the Samsung brand including Samsung Electronics, the world's largest

electronics company, Samsung Heavy Industries, the world's second largest

25

shipbuilder and Samsung C&T, a major global construction company. Samsung has

been the world's most popular consumer electronics brand since 2005and 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.

5.2 HISTORY

In 1938, Lee Byung-Chull founded Samsung, a small trading company with forty

employees located in Daegu. The company prospered until the Communist invasion in

1950 when he was forced to leave Seoul and start over in Busan. During the war,

Samsung's businesses flourished and its assets grew twenty-fold. In 1953, Lee started

a sugar refinery. The company diversified into many areas such as insurance,

securities, and retail. In the early 1970s, Lee borrowed heavily from foreign interests

and launched a radio and television station.

Samsung Group later formed several electronics-related divisions, such as Samsung

Electronics Devices Co., Samsung Electro-Mechanics Co., Samsung Corning Co., and

Samsung Semiconductor & Telecommunications Co., and grouped them together

under Samsung Electronics Co., Ltd. in 1980s. Its first product was a black-and-white

television set. In the late 1980s and early 1990s, Samsung Electronics invested

heavily in research and development, investments that were pivotal in pushing the

company to therefore front of the global electronics industry. “By the 1980s Samsung

was manufacturing, shipping, and selling a wide range of appliances and electronic

products throughout the world”. In 1982, it built a television assembly plant in

Portugal; in 1984, it built a $25 million plant in New York; and in 1987, it built

another $25 million facility in England. The 1990s saw Samsung rise as an

26

international corporation. Samsung's construction branch was awarded a contract to

build one of the two Petronas Towers in Malaysia, Taipei, 101 in Taiwan and the

BurjKhalifa in United Arab Emirates, which is the tallest structure ever constructed.

In 1993 and in order to change the strategy sold off ten of Samsung Group's

subsidiaries, downsized the company, and merged other operations to concentrate on

three industries: electronics, engineering, and chemicals. In 1996, the Samsung Group

reacquired the Sungkyunkwan University foundation. Samsung survived the Asian

financial crisis of 1997-98 relatively unharmed. However, Samsung Motor, a $5

billion venture was sold to Renault at a significant loss. Additionally, Samsung

manufactured a range of aircraft from 1980 to 1990s.Most importantly, Samsung

Electronics (SEC) has since come to dominate the group and the worldwide

semiconductor business, even surpassing worldwide leader Intel in investments for

the 2005 fiscal year. Samsung's brand strength has greatly improved in the last few

years.

Samsung became the largest producer of memory chips in the world in 1992, and is

the world's second-largest chipmaker after Intel. In 1995, it built its first liquid-crystal

display screen. Ten years later, Samsung grew to be the world's largest manufacturer

of liquid-crystal display panels. In 2006, S-LCD was established as a joint venture

between Samsung and Sony in order to provide a stable supply of LCD panels for

both manufacturers. Samsung Electronics, which saw record profits and revenue in

2004 and 2005, overtook Sony as one of the world's most popular consumer

electronics brands, and is now ranked #19 in the world overall. Behind, Nokia,

Samsung is the world's largest by volume producer of cell phones with a leading

market share in the North America and Western Europe and Asia.

27

5.3 ABOUT SAMSUNGELECTRONICS

Founded in 1969 in Suwon, Gyeonggi-do, Korea, Samsung Electronics Co., Ltd.

manufactures and sells a wide variety of electronic products, communication devices,

and semiconductors. In January 2009, we restructured our organizational structure to

better reflect the respective characteristics of each business sector and the common

technology, market and customer base denominators within its businesses, thereby

creating synergies. The previous six division-based system was separated into a

Digital Media & Communications (DMC) business unit and a Device Solution (DS)

business unit.

Today, its global presence includes a total of 111 subsidiaries in the form of

production subsidiaries, sales subsidiaries, distribution subsidiaries, research

laboratories and eight overseas business divisions representing North America,

Europe, China, Southeast Asia, Southwest Asia, Central and South America, CIS, the

Middle East and Africa.

2012 FINANCIAL HIGHLIGHTS (Amounts in billions)

Won Dollars Euros

Net Sales* 302,939.5 268.8 208.4

Total Assets 503,677.1 470.2 356.2

Total Liabilities 279,298.0 260.8 197.5

Total Stockholders' Equity 224,379.1 209.5 158.7

Net Income* 29,537.0 26.2 20.3

28

Exchange rate information

Won/U.S. Dollar yearly average exchange rate : 1,126.88/1$. Won/Euro: 1,453.68/1€

Won/U.S. Dollar as of the end of December 31, 2012 : 1,071.10/1$.

Won/Euro: 1,413.85/1€

(Figure 13)

.

5.4 MISSION AND VISION STATEMENT

VISION STATEMENT

Samsung is guided by a singular vision: to lead the digital convergence movement.

SAMSUNG believe that through technology innovation today, SAMSUNG will find

the solutions they need to address the challenges of tomorrow. Fromtechnology comes

opportunity for businesses to grow, for citizens in emerging marketsto prosper by

tapping into the digital economy, and for people to invent newpossibilities.

SAMSUNG’s aim is to develop innovative technologies and efficientprocesses that

create new markets, enrich people’s lives and continue to makeSamsung a trusted

market leader.

MISSION STATEMENT

Everything done in Samsung is guided by the mission: to be the best “digital-

Company”.

29

Source: Samsung Website

(Figure 14)

Samsung grew into a global corporation by facing challenges directly. In the years

ahead, our dedicated people will continue to embrace many challenges and come up

with creative ideas to develop products and services that lead in their markets.

5.5 ORGANISATION STRUCTURE

(Figure 15)

30

5.6 MARKET SHARE OF SAMSUNG INDIA

(Figure 16)

Overall Television Market Share

31

(Figure 17)

5.7 PRODUCTS

32

5.8 HIGHLIGHTS OF SAMSUNG INDIA

33

2012

Mr. B D Park appointed Regional President & CEO for Samsung South West Asia

Operations

2011

Samsung creates a new mobile category in the Indian market by launching its

revolutionary Galaxy Note with the market's largest HD Super AMOLED display,

supreme portability and advanced Smart Pen feature to meet the consumers' creativity

and productivity needs

Samsung India strengthened its operations in the country by stepping up its

investments in its mobile manufacturing facility at Noida. The Company brought in

investments of over US$ 70 million towards tripling the mobile manufacturing

capacity at Noida.

Samsung South West Asia organised its first regional forum held under the theme of

"Smarter Life". Announced Samsung's Smarter Life philosophy: Smart Design, Smart

Experiences and Smart Connections.

2010

Brought the Nobel Museum's traveling exhibition “Alfred Nobel – Networks of

Innovation” exhibition to India. The exhibition presents the entrepreneur and

innovator Alfred Nobel's life through the latest technology, developed in collaboration

with Samsung Electronics.

Samsung India's state- of- the art refrigerator manufacturing facility at

Sriperumbudur, Chennai was inaugurated on site by Dr. M.K Stalin, the Hon'ble

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Deputy Chief Minister of Tamil Nadu and H.E Mr Kim JoongKeun, Ambassador of

the Republic of Korea to India along with Mr J S Shin, President & CEO, Samsung

South West Asia.

The First Company to launch Tablets in the Indian market, with the Galaxy tab 7”

Samsung Electronics proposed a CDM project in India with government,

environmental agencies and vendors to respond to climate change.

Launches the first of its kind Samsung Takeback and Recycle (STAR) Program in

India aimed at generating awareness and educating consumers on the importance of

recycling e-waste

2009

Mr J S Shin appointed Regional President & CEO for Samsung South West Asia

Operations

2007

Samsung Manufacturing Facility at Sriperumbudur inaugurated by the Hon'ble Chief

Minister of Tamil Nadu, Dr Kalaignar M Karunanidhi and Samsung Vice Chairman

& CEO, Mr Jong Yong Yun

Samsung India Software Centre (SISC) made the Global Hub for Software

development for Samsung's worldwide requirements for Digital Media products

Mr H B Lee appointed as the President & CEO of Samsung South West Asia

Headquarters.

2006

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MoU signed with Tamil Nadu Government for setting up a second manufacturing

Complex at Sriperumbudur, near Chennai

Samsung commences manufacture of LCD TVs in India

2005

Samsung awarded as the Best Retailer of the year 2005 in the consumer Durables

category by the India Retail Forum.

Mr S H Oh appointed as President & CEO of Samsung India Electronics Pvt. Ltd.

2004

Samsung received the Golden Peacock Special commendation Certificate for

Corporate Social Responsibility (Private Sector) for the year 2004 from Mr.

ShivrajPatil, Union Home Minister.

India made regional headquarters for Samsung Southwest Asia.

2003

Inauguration Samsung's new, High-Tech, advanced Refrigerator facility.

Commencement of production at refrigerator facility in Noida.

Software technology park set up at Noida

2002

Construction commences for 5,000,000 refrigerator plant in Noida

2001

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Samsung India wins the Rajiv Gandhi National Quality Commendation Certificate for

Best Quality in the Electrical and Electronics Industry for the Year 1999

Samsung India begins the domestic production of Fully automatic washing machines

at its Noida facility.

Samsung's seventh Colour Monitor Plant in the world and the First Colour Monitor

Plant in India commences production. Plant Capacity: 1.5 million units

Colour monitor plant set up

Mr. K S Kim, MD of Samsung India between September 1998 - March 2001 returns

to Korea as Sr. Vice President, Global Display Division, Samsung Electronics Co.

Ltd.

Mr. S S Lee takes over charge as Managing Director, Samsung India. Mr. Lee was

MD of Samsung's subsidiary in Vietnam between January 1995 and March 2001.

Samsung India announces its Corporate Initiative for the Year 2001 -To be a Digital

E-Company

2000

On December 2, 2000, Samsung India completed 5 Years of Operations in the

country.

Vice Chairman & CEO, Samsung Electronics, Mr. Jong Yong Yun visits India

Announces fresh investments of US$10 million for setting up a high tech, state-of-

the-art Colour Monitor Plant in India.

Samsung India commences exports of 'Made in India' Colour televisions to Western

Europe Samsung sponsors the Indian Olympic Team to the 2000 Sydney Olympics

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Samsung India produces its One Millionth Colour television in India - The first MNC

to achieve this milestone in India

Launch of Samsung Electronics India (P) Ltd - Samsung's 100 per cent subsidiary for

IT and Telecom products in the country

Sets up a Hardware R & D Centre for Colour Television at Noida.998

Samsung Running Festival held at New Delhi. Part of Samsung's Bangkok Asian

Games Programme, it drew participation from around 8000 people from all walks of

life.Samsung awarded 'SAP Star Award' by SAP AG

Mr. K. S. Kim appointed as the new Managing Director of Samsung India. Took

charge from Mr. B. M. Park who was MD, Samsung India between August 1995-

September.

1998

All India operations with launch in East

1997

Sponsorship of the lighting of the Permanent Asian Games Flame Ceremony at the

National Stadium, New Delhi.

Sponsorship of Indian Contingent to 13th Asian Games in Bangkok.

CTV Factory Inaugurated with Initial Plant Capacity of 400,000 units per annum

1996

Foundation Stone laid for CTV Factory at Noida, Uttar Pradesh.

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Launch in South Home Appliances Launch

1995

Samsung India Electronics (SIEL) products launched in India.

Certificate for commencement of business received by Samsung India.

5.9 AWARDS WON BY SAMSUNG INDIA

Samsung India has won several awards and recognitions for both its corporate initiatives as

well as its product innovations in audio visual, home appliance, IT and telecom product

categories.

2012

Samsung was presented with the Golden Peacock Award for the most innovative

product for the year 2011 for the MV800 digital still camera.

Samsung‘s MV800 digital still camera bagged the Asian Photography ‘Best

Innovation in Camera Technology’ award for 2011.

Samsung awarded as the Consumer Durable Company of the year at the 2011 NDTV

Profit Business Leadership Awards in recognition for its initiatives and innovations

taken up to respond and adapt to the ever changing business scenario as well as

exceptional ability in business performance fuelling the Indian economy.

2011

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Samsung emerged as the Most Aspirational Brand of the Year 2011 in the Best

Brands Survey 2011 conducted by Financial Express and market research agency

Synovate. Samsung was ranked high for its 'Flaunt Factor' linked to its attributes like

quality, brand reputation and imagery. Samsung also ranked amongst the top 3 brands

in the Overall Ranking of the Top Brands of 2011 and the Most Visible Brand of 2011

list.

Mr. JS Shin, President & CEO, Samsung South West Asia was awarded the

prestigious “MAN OF ELECTRONICS AWARD 2011” by Consumer Electronics

and Appliance Manufacturers Association for his exceptional all round contribution to

the Indian Electronics and Appliances Industry. Shri. Rajeev Shukla, Hon'ble Minister

of State for Parliamentary Affairs handed over the award to Mr. J.S. Shin.

Samsung Electronics was awarded the best Manufacturer of BEE Star Labeled

Appliances in the Air Conditioner category by the Hon'ble Union Minister for Power,

Shri SushilkumarShinde. The Function was presided over by the Hon'ble Prime

Minister of India, Shri Manmohan Singh. Samsung won the Award based on criteria

like the number of star labeled products sold, the energy savings achieved thanks to

its technology and the growth in sales of energy efficient products over the previous

year.

While Samsung ranked 27th in Economic Times‘ annual Survey on the Top 100

trusted brands in India, it emerged as the most Trusted Consumer Durable brand in

India, while maintaining its position as No. 2 company in the mobile phone category.

Samsung was awarded as the ‘Tablet Company of the Year’ by Voice & Data at the

V&D 100 Awards.

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Samsung was awarded the Golden Peacock Awards (GPA) For Corporate Social

Responsibility for its Corporate Citizenship and Community Affairs initiatives that

address education, sports, culture and environment management programs

Samsung won 3 much coveted awards at the NDTV Gadget Guru Awards 2011 that

honour innovation and products that truly make a difference in the world of

technology.

o Design of the Year - 3D LED TV UA55C9000

o TV of the Year - 3D LED TV UA46C8000

o Smartphone of the Year - Galaxy S

2010

Samsung India won the 'Golden Peacock Eco-Innovation for the year 2010 for its for

LED TV ranked as the most innovative product that shows the maximum customer

satisfaction at minimum cost as determined by customers.

Samsung won 3 awards at the NDTV Tech Life Awards 2010 to honour the year‘s

coolest gadgets and the best technological innovations.

o Best Budget Mobile of the Year: Samsung Corby

o Best Television Display of the Year: Samsung 3D LED TV UA46B7000

o NDTV Gadget of the Year: (decided by the eminent jury panel and also by vie

wer's choice through public voting) Samsung LED 3D TV

CHAPTER 06

PROMOTION MIX STRATEGIES ADOPTED BY SAMSUNG

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Samsung offers advanced technology products, therefore positioning itself on the

technological platform is not enough for the company to sell its products, It has to

communicate with the potential customers properly to make its market presence. To raise the

brand awareness and highlight the technological superiority of its goods, Samsung has

adopted various promotional strategies.

The promotion mix strategies used by Samsung are different for different product types:

6.1 MOBILE PHONES:

Samsung tries to use a mix of both ‘push’ and ‘pull’ strategy for promoting its range of

mobile phones. Samsung incurs a huge advertisement expenditure for creating awareness

about the latest technology used by the company in creating these phones, therefore

advertisement creates product awareness, thereby creating a ‘pull’ for the product.

Samsung also uses sales promotion techniques such as heavy discounts, exchange offers, 0%

finance options, cash back offers, etc. to promote the mobile phones and create a ‘pull’ for

the product.

6.2 TELEVISIONS:

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A large amount of expenditure is incurred in the Research and Development of the televisions

as these are huge investment projects. The product awareness of the televisions are created by

way of publicity and public relations, the media tries to create awareness about these products

by discussing about them in their tech-shows and in the new inventions column in the daily.

The company itself holds press conferences in order to make the people aware about the

product.

Advertisement and other sales promotion techniques such as discounts, coupons, and combo

offers are used to boost the sales of the products. These techniques help the product to gain a

significant market share in the competitive market.

6.3 AUDIO / VIDEO GADGETS:

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Samsung does not use intensive advertising campaigns for promoting these gadgets as these

do not incur high R&D expenditure and are not new inventions, instead these products are

promoted through personal selling and sales promotion strategies. These products are usually

promoted by using the ‘push’ strategy.

6.4 CAMERAS:

The major revolution in the cameras segment was seen when the digital cameras were

introduced in the market. At that time a huge amount was spent on television advertisements,

but in the current scenario the cameras are promoted using direct marketing, sales promotion

and personal selling.

6.5 REFRIGERATORS:

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The refrigerators are high investment ventures and require a huge amount of Research and

Development in their production. These products are launched in the market by creating

awareness through advertisements on televisions, distribution of pamphlets and direct

marketing by way of demonstrations. The company tries to create a ‘pull’ for the product.

The conventional refrigerators available in the market are promoted by using sales promotion

techniques such as discounts, 0% finance schemes, exchange offers, etc. Here the company

tries to create a ‘push’ for the product.

6.6 OTHER HOME APPLIANCES:

Home appliances such as washing machines, microwave ovens, air-conditioners, smart-

ovens, etc. are promoted by using a small proportion of television and radio advertisements

and majorly by using direct marketing by distributing brochures, demonstration and different

sales promotion techniques. The home appliances are usually demanded by mostly all the

households, therefore their promotions are done by keeping in view the needs of all the

interest groups.

The sales promotion techniques are extensively used in promoting these products. Since these

products are demanded by different income groups therefore the cost of the products are

shown reduced by way of discounts, cash-backs and various exchange offers. Hence, a ‘push’

is created for these products.

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6.7 PC / PERIPHERALS / PRINTERS:

The PC’s and printers used for personal use are promoted by using sales promotion and a

little bit of advertising but those which are used for industrial purposes are promoted majorly

by direct marketing as the sales executives brief the prospective buyers about the technical

benefits of the product and try to convince them about the long-term benefits of the product.

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CHAPTER 07

CONCLUSION

This study highlights the benefit of promotion mix in the sale of the products. It is seen that

only manufacturing a particular product is not enough for a brand to make its market

presence, instead a good promotion strategy helps in making a product successful in the

market. It is also seen that there is no perfect promotion mix, each product and its market

require their own type of promotion mix. For example, consumer products are effectively

promoted by way of advertising and at the same time industrial products are promoted by

using direct marketing and personal selling.

Samsung as a company is also seen using different types of promotion mix for promoting

their products. Each promotion mix is seen having its own essence in making a product

successful in the market. The extent to which a particular promotion element is to be used in

a promotion mix also depends on the nature of the product.

It is also seen that Samsung as a company has changed the promotion mix for the same

product on the basis of the life stage of the product. If a product has just been launched, the

promotion mix will focus more on making the product popular by way of advertising and if

the product is already matured, the promotion mix will focus more on boosting its sales by

using sales promotion techniques, etc.

The promotion strategies i.e. ‘pull’ and ‘push’ strategies are also designed as per a particular

product and its prospective market.

Hence, it can be concluded that a promotion mix is product specific and also product market

specific, this is evident in the way Samsung has promoted its different product types.

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