Samsung to wage price war with rivals

Chairman receives regular reports on Japan’s recovery

By Kim Yoo-chul

Staff reporter

Samsung Electronics is planning to undercut its rivals by offering more competitive prices.

The realignment in its marketing strategy comes at a time when its Japanese rivals are recovering fast.

Samsung executives told The Korea Times that their company will initiate what they say is a "pricing war," based on cash abundance.

"Leading Japanese consumer electronics companies including Sony and Panasonic have started to turn profits, after a years-long slump," a company executive said, Wednesday.

"A weak yen is one part of the story. It is also due to a more structural reason," the executive said.

"They have become confident thanks to massive restructuring amid last year's economic downturn."

Samsung Electronics competes with Sony and Panasonic in consumer electronics-related markets globally, while it also faces off with Toshiba in the flash-type memory chips, widely used in smartphones and other high-end digital devices.

Considering Samsung's cash-holdings, the Korean firm is confident to win a cash-based war with its Japanese rivals.

According to the data supplied by the Financial Supervisory Service (FSS), the nation's top financial regulator, Samsung’s cash-equivalent assets as of the end of the first quarter of 2010 reached 20.6 trillion won ($17 billion).

In the meantime, Samsung reported 4.4 trillion won in operating profit for the first three months of this year. Helped by healthy demand for consumer electronics products amid the economic recovery, its operating profit for the year is expected to reach over 15 trillion won.

A Samsung Electronics spokesman said the company will be more aggressive in global marketing to maintain its competitive edges in key markets, but declined to give more details over the ongoing strategy changes.

The company recently named Ralph Santana as senior vice president and chief marketing officer at its North American headquarters.

Santana joins Samsung after a 16-year career with Pepsi, where he was most recently vice president of marketing for the flagship Pepsi-Cola trademark.

In his new position, Santana will lead the North America Marketing organization, including the Brand Marketing, Digital Marketing, Market Intelligence, and Product Innovation teams. He will report directly to CS Choi, chief executive of Samsung Electronics America.

"The appointment of Ralph Santana is one good example of such corporate efforts by putting more focus on aggressiveness in marketing," another executive said.

North America is one of the critical spots for Samsung, as well as its Japanese competitors.

Samsung is the leader in the global flat-screen television industry after it passed Sony in in 2006. It is also the biggest supplier of memory chips, while the company only trails Finland-based handset giant Nokia in mobile phones.

Separately, Samsung held a strategy meeting for Southeast Asian companies with 60 of its key executives including the chief executive Choi Gee-sung.

Officials say the participants discussed ways to expand the sales of its 3D televisions and Galaxy S smartphones, while measures to strengthen distribution channels and to expand manufacturing facilities were also the top issues at the meeting held in Hanoi, Vietnam.

Japanese companies have deep roots in terms of sales channels and facilities in Southeast Asian countries.

Japan back on the rise

Representative Japanese electronics companies are becoming stronger. After restructuring, leading firms are revising up their sales targets and this year's capital expenditure plans.

Meanwhile, they are teaming up to expand in the global market. For instance, Fujitsu and Toshiba are in talks to merge their mobile phone businesses to better compete with Samsung and Nokia in the rapidly growing smartphone sector, where they are outmatched by the leaders, including Apple.

Sony is eating up more in the global 3D television markets with its edge in related content, while Toshiba posted the strongest performance among the top NAND flash suppliers in the first quarter, gaining 2.9 percentage points in the market share, compared to the fourth quarter of 2009. In contrast, longtime dominant market leader Samsung lost 1.3 points, data from market research firm iSuppli said.

"Samsung Japan has reported to Samsung Electronics Chairman Lee Kun-hee of the Japanese electronics makers' full recovery," a senior industry executive said. The Samsung spokesman declined to comment.

"Major Japanese firms were the role models for Samsung. Although the Korean company rose to the top in some areas by initially using business management and technologies from Japan, now Samsung's key decision makers want to completely pass over them from technologies to profit," he added.

삼성전자 '가격 전쟁' 예고

삼성전자가 하반기 글로벌 마케팅 전략을 다시 짠다.

특히 삼성전자는 경기회복세와 맞물려 소니, 파나소닉등 일본 주요 가전업체들의 반격이 거세짐에 따라 북미와 유럽등 주요 시장에서 보다 공격적인 마케팅을 펼친다는 구상이다.

업계 관계자는 ``올 1분기 말 현재 삼성전자의 현금성 자산은 20조6천억원에 육박한다’’며 ``과감한 마케팅 전략으로 핵심 사업에서 시장 지배적 위치를 강화할 수 있을 것’’이라고 말했다.

삼성전자는 1분기 4조4천100억원의 영업이익을 달성했으며 올해 총 영업이익은 15조원을 웃돌 것으로 시장에서는 내다보고 있다.

삼성전자는 최근 펩시 부사장 출신 랄프 산타나씨를 북미지역 최고마케팅책임자(CMO)로 영입했다.

특히 북미는 세계 최대 가전시장으로 삼성과 소니를 포함한 글로벌 가전 업체들이 격렬히 경쟁하는 전쟁터나 다름없는 곳이다.

산타나씨는 펩시에서 글로벌 마케팅을 지휘했으며 브랜드 전략과 제품 전략 등을 담당해왔다. 그는 또한 코카콜라와의 마케팅 전쟁에서 펩시를 승리로 이끈 주역으로 꼽힌다.

다른 업계 관계자는 ``산타나씨의 영입은 삼성의 공격적 마케팅 의지를 읽을 수 있는 좋은 예’’라며 핵심 시장에서 삼성전자의 공세가 더욱 거세지고 있다고 덧붙였다.

삼성은 또 베트남 하노이에서 `동남아지역 전략회의’를 개최했다. 이 전략회의에는 최지성 삼성전자 사장을 비롯해 지역법인장 등 60명이 참석했다.

삼성전자는 일본 업체들의 텃밭이나 다름없는 이 지역에서 생산. 물류거점을 강화해 차이를 좁힌다는 계획이다.

글로벌 경기침체에 따른 생산량 감축, 구조조정등으로 시름의 늪에 빠졌던 일본 가전업체들은 최근 경기상황이 다소 호전되면서 투자를 재개하고 적극적인 인수.합병에 나서고 있다.

후지쓰와 도시바는 핸드폰 사업부분 합병에 대한 논의를 진행중에 있으며 세계2위 낸드플래시 업체인 도시바는 이와 별도로 최근 대규모 투자계획을 발표했다.

소니 역시 3D 텔레비전에서 다시한번 `TV 왕국’ 으로의 재기를 꿈꾸고 있다.

또 다른 업계 관계자는 ``이건희 회장이 일본 업체들의 동향에 대해 정기적으로 보고를 받고 있는 것으로 안다’’며 ``과거 일본 전자회사들은 삼성전자의 롤모델이었지만 삼성 내부에서는 과감한 마케팅 전략으로 승기를 이어가야 한다는 목소리가 커지고 있다’’고 말했다.