Samsung Electronics is gearing up for a new marketing campaign targeted to push the South Korean firm into the elite ranks of global brands with premium prices, an executive said on Saturday.
"So far, we've built awareness. Seven years ago we weren't a very well known brand. Now we are, and now we have to build preference and emotional attachment," said David Steel, vice president marketing at Samsung's consumer electronics unit.
Samsung was the world's No 20 brand in 2005, taking over the position of Japanese rival Sony Corp, which fell to No 28, according to Interbrand.
Yet, Samsung feels it does not yet have the exclusive aura that makes consumers' hearts beat faster. "Five to 10 years ago we were a second tier brand. Now consumers say: 'I have a phone, or a TV, and it's fine. A few years ago it wasn't the right time to set our flat panel TVs as premium products, because they weren't," Steel said.
"We've got the right competitiveness of products now, and this is the time to position the brand as one with emotional attributes," Steel told Reuters on the sidelines of the IFA consumer electronics fair.
"I think of our brand direction as aspiration. Also when I look at other industries, like the car industry, the language is aspiration and prestige," he added.
Samsung is an integrated electronics company with products that range from chips and flat panel display components to finished goods such as cell phones and TVs, in which it has become a global top 3 player in terms of sales.
Most of its profits come from components and mobile phones, while the consumer electronics products are marginally profitable, much like those of its rivals such as Sony, Panasonic from Matsushita and Philips.
Its strategy is built on continued sales growth, and the new brand push is aimed to keep gaining share in a consumer electronics market which is relatively stable in revenue terms.
"The aim is that it will lead to premium pricing and more sales," Steel said. With a more exclusive image and pricing, Samsung's consumer electronics arm should be able to increase margins, Steel said. "Our aspiration is to reach high single digits (of profits as a percentage of sales)," he said.
Samsung has boosted its design efforts to make its products look sleeker than those of the low-cost producers from whose ranks it came. "But even if we would execute perfectly on our corporate strategy, unless we have the right channels to the market to bridge the last few meters to the consumer, it's all in vain," said Steel, stressing that Samsung aims to broaden and deepen its relations with retailers.
"Eight years ago we weren't seen as a core supplier to retailers of MP3 players, TVs and cell phones. Now we are, and we need to broaden that," Steel said.
But at the same time, Samsung recognises that it is pointless to try to create an exclusive brand image in some commoditised categories such as desktop personal computers.
Samsung, the world's top manufacturer of memory chips and flat screens, earned a 1.69 trillion won ($1.63 billion) net profit for the quarter to June, compared with a profit of 3.13 trillion won a year ago as price pressures hit earnings.
The firm is seen posting a 7.6 trillion won profit this year, down 30 percent from a record 10.8 trillion a year ago, according to Reuters Estimates.