No letup for Samsung

More advertising and lots of products planned as the Korean giant targets $2.7 billion in 2004 sales.

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By  David Ingham Published  May 31, 2004

After topping the two billion dollar mark in Mid East and Africa sales in 2003, there will be no letup in 2004 for Samsung. This year’s sales target is set at $2.7 billion, but B W Lee, regional president, says he want to get back to the 40% growth rate of earlier years, which would push sales to $2.8 billion. Lee is a man who clearly likes statistics. “We sold 6.2 million units of GSM [in 2003], not just at the low end, but mainly medium range and high end models,” he enthuses. “We don’t even have a low end model. Our average selling price is quite high. The year before [2002], we sold 4.5 [million GSM units], so it’s quite a jump, and this year we expect to sell 8 million.” Lee tells us to expect more product innovation, continued investment in marketing and a push into new product areas this year and next. One of those new product areas will be the unglamorous world of air conditioners. “We want to be number one in number of units,” he says. A plan to introduce notebooks into the local market last year has had to be delayed, but Lee says he still wants that to happen. The holdup has apparently been caused by the need to put in place the necessary infrastructure, including a call centre, which was due to be up and running in June. “It’s a very expensive machine and sometimes the user doesn’t understand the hardware and thinks it’s a software problem,” explains Lee. “Unless we have the call centre, we could end up with a bad image simply because of the notebook PC.” Launching notebooks will also require a lot of advertising, he says, and the competition will be fierce. For that reason, their introduction will be gradual. “At the beginning, we are not going to sell them in every market. It will be UAE, Kuwait and Saudi Arabia, and then we will see,” says Lee. Uncharacteristically, he concedes that Samsung will not take the number one spot straight away. “Our target would be second position after three years. That’s possible,” Lee explains. In the area of GSM phones, expect to see sliding keyboards, camcorder functionality and a PDA/phone hybrid. Flat screen TVs are also likely to keep on increasing in size and Samsung will be keen to push the virtues of digital video cameras that use hard disks for storage over conventional ones. Marketing and brand development are something in which Samsung invests heavily. Its print and outdoor advertising are everywhere, and this year promises to be more of the same. When pushed, Lee reveals that the Middle East & Africa office spent the equivalent of 4% of turnover on advertising and marketing in 2003. A quick calculation reveals that to be around $80 million. “Marketing is an investment. We have to do it,” says Lee. “The outdoor, especially, is very expensive. Initially, it was not, but month by month it goes up. That’s because now everybody is copying us.”

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