Global Marketing Strategy

Gregory Lee
Chief Marketing Officer

Contents

Marketing Performance Marketing Vision Marketing Strategies

Marketing Performance

Rapid Growth in Brand Value

2005 Interbrand Ranking
Rank
1. 2. 3. 6.

Rapid Growth in Brand Value

Company
Coca-Cola Microsoft IBM Nokia

Value
US $ billion 45.0 35.0

[US$ bil.]

67.5 59.9 53.3 26.4

25.0 15.0 13.9 35.0 30.0

29.4 26.4 24.0

NOKIA

20.
28. 73. 78.

Samsung
Sony Motorola Panasonic

14.9
15.0

13.2

12.812.6 10.7

14.9 SAMSUNG
SONY MOTOROLA PANASONIC

10.7
5.0

6.4

8.3

10.8

3.8 3.7
'01 '02 '03 '04 '05

Strength of Samsung Brand

Interbrands Brand Value

Net present value of the brands future earnings Assessment of business and brand strengths

Customer Brand Value Brand Attitude Survey Dealer Attitude Survey

Consumer attitudes from awareness to purchase intent to brand loyalty

Retail recommendations on marketing activities, product power, and brand preference

Brand Value According to Consumers

[Unit: %]

Unaided Awareness

Positive Opinion

84
75

46
31

2002

2005

2002

2005

Brand Value According to Dealers

Dealer Recommendation Rate
Color TV Mobile Phones

23.4 17.2 14.2

7.7

2002

2005

2002

2005

#1 Global Market Share Product

[Unit: 2004 Market Share]

DRAM

SRAM

MCP

NAND Flash

31.0%
LDI

34.0%
LCD

29.0%
Color Monitor

61.0%
CDMA

19.0%

22.1%

14.9%

20.6%

Market Shaping Premium Products

Mobile Phones

7 Megapixel Camera Phone

Satellite DMB Phone

MP3 + Camera Phone

Flat TVs

Plasma TV

LCD TV

DLP Projection TV

Premium Product Portfolio

Average Price Index
155 129 116
100

150

Color TV

Mobile Phone

Monitor

Refrigerator

Marketing Vision

Where We Are Headed Marketing Vision

SAMSUNG VISION

World Leading Company for Digital Convergence Revolution

- 2010 REVENUE $150B -

MARKETING VISION

= Icon Brand

Product Leadership CORE AREAS

Create PlatformBased Hit Products

Brand Leadership
Premium Brand Experience

Customer Leadership
Win-Win Partnership

Marketing Expertise & Organization Maximize Marketing Efficiency (Investment/System/Process)

Where We Are Headed Marketing Goals

Competitors 2004
Sony: 62 Nokia: 43 Sony : 39 Nokia : 31 N/A

Category
Unaided Awareness Icon Index* No. 1 M/S Products

Unit
% % EA

2005
44 23 8

2008
53 28 19

2010
60 32 23

Brand Leadership

Product Leadership
s-API Index 104 110 120 N/A

Customer Recommendation Leadership

Rate HHP % 25.7 28 30 Nokia : 28.8
*Purchase Intent

Dealer

CTV

13.5

22

26

Sony : 25.1

Changing Landscape of Market Environment

Increasing Smart customers who pursue intuitive simplicity

Technology is a given especially for young generation

Reduced importance of traditional mass media

Intense cross-industry and price competition (CE/IT/Entertainment)

Expansion of B2C & B2B channels across regions

Marketing Strategies

Evolution of Marketing Strategies

PAST
(Fast Follower) Good/reliable brand

NOW & BEYOND

(Industry Shaper) Premium brand Consistent identity Strong emotional bonding

Brand Leadership

Disparate identity Technology-centric

Product Leadership

Similar benefits with competitors Discrepancy in price status

Products meeting latent consumer needs Value-added, first-to-market launch

Customer Leadership

Optional relationship without continuity

Long-term customer centric partnership

Marketing Strategies

Build Most Preferred and Loved Brand

Introduce First-to-Market Products Reflecting Consumers Unmet Needs

Strengthen Partnerships by In-Depth Understanding of Customers & Channels

Advance Marketing Expertise and Investment Effectiveness

Single Master Brand

Brand Strategy Past & Present

1999~2004
Objective Awareness

2005 ~
Preference

Brand Target

Sensible Brand Buyers

High Life Seekers

Brand Essence

Wow, Simple, Inclusive

Designing Sensational Technology

Brand Positioning

Easier, richer & more enjoyable life through technology

Unlimited Living

Brand Target: High Life Seekers

Demographics
25 to 45 Male and female (male skewed) Mid to high income Educated Style conscious

Tech Attitude
Highest interest in CE Spend most money on CE Early adopter Tech in everyday lives

Primary Target: 17% (Spending on CE 28%) Extended Target: 34% (Spending on CE 50%)

Psychographics
Passionate, creative Appreciate excellence Crave things that give them a fuller, more engaged life

Lifestyle
Time-out Seek knowledge Seek community Work hard, play hard

New Brand Essence

Sensory Premium

Technology Leadership

Design Focus

2005 Global Brand Campaigns

Manifesto

LCD/PDP-TV

MP3 Player

Mobile Phone

Multi-Sensory Brand Experience

from Visual Identity to Sensory Identity

Advertising
Imagery, Color Scheme, Sound logo/Jingle

See
Visual

Hear
Auditory

Product
Design, Packaging, Sound Interface

Touch
Tactile

Smell
Olfactory

Environments
Multi-sensory Elements

Values of Sponsorship Marketing

Build premium brandship by leveraging first-class properties (global & local specific)
From building brand awareness to increasing brand preference

Deliver specific business goals

Strengthen and leverage channel relationships Contribute to sales by connecting sponsorship events with sales programs (promotions, etc.)

Sports

Arts

Entertainment

Cause Marketing

Events & Shows

Components of Sponsorship Activities

Sponsorship since 1996 Nagano to 2008 Beijing Games 2004 Athens Games
- Torch relay in 27 countries, 34 major cities, reached more than 50 million - Brand Awareness: 7% in Awareness, 15% in Purchase Intention

Awareness of Samsungs sponsorship in 2005 is one of the highest among European teams Media value to date estimated at US$ 32 Million

Cause marketing program for North America since 2001 Fund raising with key channel partners (Best Buy, Circuit City, etc.) and key celebrity foundations (Magic Johnson Foundation)

Worlds First-to-Market Products

Mobile Phones
2000 2004 2005

Dual Screen Phone

5 Mega Camera Phone Satellite DMB Phone

7 Mega Camera Phone

First-to-Market in Core Components

NAND Flash Memory Two fold increase every year in density

16Gb 50nm

64Gb 3xnm

1Gb 120nm

4Gb 70nm

01

03

05

07

Core Components in Premium Products

iPod Nano

Sony PlayStation Portable

Microsoft Xbox 360

Nintendo Revolution*
* Not yet in the market

Gizmondo

Leading the Field of Convergence in Products

Camcorder + TV

Portable Media Player + TV

Portable DVD Player + TV

Introduce Samsungs Signature Devices

Product Development Process

Development

Market Research/ Analysis

Ideation

Idea Screening

Conceptualization

Product Planning

Launching Plan

Areas of Improvement

Ways to Gather Customer Insight

Trend-Setter Hives
nt StrMain me ea lop m6 ve De

Creative User Group

Mania Group Dynamics

Mania
tive Interac ics m a n Dy

Under ground

mn A lu

Tech. S ports Fashion Enter . Music

MUSIC

Dis i trib ut ion

Samsung Team

Internal Workshop

Expert Group Seminar

New Market Opportunity

Consumer Needs Technology

Lifestyle

Capturing IT B2B Business Market Opportunity

Monitor
Total Market Size = $30B

Laser Beam Printer

Total Market Size = $60B

Consumer Market

Consumer Market

33% 67%

20% 80%

Commercial Market

Commercial Market
* Includes toner cartridges

IT B2B Business Strategies

Products
Differentiate line-up by channels Increase commercial market-oriented product development

Channel Development
Obtain sizeable & loyal reseller customer base Improve management of commercial channels (e.g. PRM system)

IT Brand
Improve brand awareness and perception in IT market Strengthen marketing for IT products (e.g. systematic reseller prgm.)

Organization
Increase synergy in IT-cluster by creating channel driven organization Increase expertise for IT market

Steering Market Driven Change in the Organization

MARKETING CAPABILITY

Marketing Capability

Increase marketing expertise Establish skills management tools

MARKET DRIVEN PROCESS

Strengthen marketing-NPD ties Improve coherence throughout the processes

MarketDriven Process

MarketDriven Culture

MARKET DRIVEN CULTURE

Strengthen HQ & local collaboration Ensure integration of Market Driven Culture in the organization

Strengthening Market Intelligence Capability

CIS

HQ (GBM/GMO)
North America

Europe China

MEA

SWAsia

SEAsia Latin America

91 MI personnel with specialties (05): Extend up to 150 MI personnel by 2007 Market Research Spending: 110% increase from 2004 to 2005

Marketing Spending 2002 ~ 2005

[US$ mil.]

2,046 1,466 1,103

33% 40%

2,358
15%

56%
SEC Mktg. Investment as % of sales*

54%

57%

56%

6.3% 2002

6.7% 2003

6.9% 2004

6.8% 2005
Short-term Sales Promotion

* Based on Samsung branded set product sales

Strategic Brand Building

Increasing Marketing Investment Effectiveness

Tools & Metrics
Develop impactful and scalable ME methodology, tools & templates

Process
Refine & apply optimal investment processes (planning, budgeting, execution and measurement)

Capabilities
Develop required ME capabilities (skills, resources) Continuous improvement of investment IT systems Expand data quality & coverage

Marketing Experts & Org.s Efficiency

Brand Management

Product Innovation B2B Mktg./Sales Expertise Market Intelligence

Most Preferred & Loved Brand