Cultivating more consumers who buy more, more often, & tell their friends!
As mentioned in my last blog, Samsung is reevaluating its smartphone business on the heels of disappointing Galaxy S5 sales and profits. The Wall St. Journal summarized their problem by writing that Samsung “lost ground to low-cost Chinese smartphone makers”. In my opinion, Chinese competition is not the issue itself, but actually a reflection of a broader business problem. Samsung’s smartphone shortcomings are really due to a weak, underdeveloped brand. Samsung lacks a compelling brand positioning and identity, without which they haven’t been able to establish a strong, emotionally resonant relationship with consumers. As a result, in an extremely competitive market, even though they sell more smartphones than any other company, Samsung finds that it can’t adequately compete.
For perspective, in 2013 Samsung spent $14B in marketing. Nevertheless, because there wasn't a compelling brand positioning to strategically direct that spend around a common identity or message, consumers have no clear idea who Samsung is, who it’s for, how its special and different etc. It sounds almost unbelievable that a company can spend that much money and still not have a strong brand. It underscores the critical nature of defining yourself in the marketplace - beyond mere features and functionality - in a way that consumers feel emotionally connected to. It’s not enough to merely proclaim what you’re selling and what your products do. You’ve got to engage with consumers in a way that makes them feel good about having a relationship with you.
Consumer product companies know that the effectiveness of their product development work comes and goes. Sometimes products are stronger/better/more innovative/higher performing than others. But, as is evident with the iPhone business now, it is brand strength that smooths out those ups and downs in a way that can sustain consumer confidence and sales.
For Samsung, a weak brand hurts them in competition both on the premium and price conscious ends of the market. Against Apple, with little brand/emotional benefit to complement their product’s functionality, Samsung can’t consistently compete against the iPhone’s overwhelming combination of brand strength and product performance. Even though Samsung now, arguably, offers even better head-to-head features versus the iPhone 6, many millions of consumers simply waited for the new iPhone 6 - in large part simply because the brand means so much to them. They would rather have the new iPhone than merely a collection of features and benefits with a less valuable name attached to it.
Down market, Xiaomi is a Chinese price brand that threatens Samsung with less expensive full featured phones. As a result, Samsung is caught in the middle of a competitive crossfire - getting attacked from both directions. Samsung’s smartphone features aren’t enough to overcome the overall value proposition of the Apple and iPhone brands. As well, the Samsung name isn’t strong enough to protect them from cheaper alternatives with comparable features. So, caught in the middle, their business suffers.
To maximize their investment in R&D and product development, Samsung has no choice but to do what’s necessary to create a strong brand; to envelope the Samsung name with a compelling, emotional benefit that enhances the overall consumer experience.
Since every consumer touch point is an opportunity to put a more strategic foot forward, here’s how to fix the situation:
Learn everything you can about smartphone consumers. Samsung, no doubt, already has reams of research, but it is imperative to really understand as much as possible about all aspects of consumer - smartphone interaction. Beyond the physical interaction, Samsung must understand the deeper, emotional role that they play in consumers’ lives; what emotional purpose they serve, etc. I’d also want to dive into this issue competitively; understanding what emotional space other brands occupy - particularly Apple.
Understand current consumer perception of Samsung. What are their current perceptions and feelings about the brand? Strengths? Weaknesses? What emotional territory, if any, does the brand currently hold? Etc. Understanding current perception is critical to establishing a compelling strategic plan for the future. To be credible, a new positioning must be reasonably connected to current consumer perception.
Learn what non-smartphone Samsung consumers (i.e. cameras, tv’s, laptops, etc.) think about the Samsung brand. Does this generally line up with smartphone consumer perception?
Develop a strategic positioning for the Samsung brand. At the intersection of points 1, 2, and 3, craft an identity that consumers globally can believe in, is emotionally compelling (that is, makes consumers feel good about their association with Samsung), and is strategic competitively. Smartphones are veritable badges, making strong public statements about their owners. Taking into consideration the competitive landscape, Samsung needs to define itself in a way that differentiates them and is aspirational but also believable. At the end of the day, the Samsung brand has to confer real emotional benefits to its consumers. It’s got to make them feel good about themselves! While Apple is extremely strong, it’s strength also makes them a difficult, but obvious target. An identity that adopts some kind of ‘counter positioning’ against Apple could perhaps be effective. This could take the form of a 21st century “Avis: We Try Harder” approach - but shaped to better fit Samsung’s marketplace and consumers. (There’s so much I could say about this I could write a book about it. Oh, that’s right. I did!)
Develop an integrated brand campaign. Flowing directly from the positioning, create an integrated marketing campaign to articulate the positioning, messaging, and feeling of the Samsung brand.
Create a consistent media schedule of brand advertising - across all platforms/mediums - throughout the year that tells the world who Samsung is, why its special, who its for, and why consumers should buy!!
Intersperse product ads and more brand focused communications. During product launches, I’d of course include compelling information about top features in TV advertising, but I’d generally rely more heavily on public relations, print, web and social media to communicate the details of features/benefits etc. Give those who want to dive into the technical details ample opportunity to do so, but also leverage product information to burnish the brand story. Further, in product driven advertising, I’d ensure that the communication was of course still consistent with brand messaging, and also included any other relevant brand ID - taglines, logos, music/sounds, looks/feels etc. to reinforce brand advertising.
Ensure that every consumer touch point is consistent with the brand positioning - from the product, to advertising, to all marketing, to social media presence, to customer support, to pricing, to every way that the company interacts with consumers. They all must deliver precisely the same message and in the same tone and feeling.
Beyond the above, there are some critical executional details to consider.
Focus on internalizing the brand positioning into the company culture. Those companies with the strongest brands are typically those where the very essence of the brand is tightly infused in the DNA of the company and its culture. At companies like Apple, Nike, Patagonia, Red Bull etc., the brands are so strong - in large part - because everyone in the company actually LIVES the brand. This ensures that every consumer touch point is strategic, on message, and true. Samsung must actively infuse a new brand positioning into the culture in a way that employees embrace and can therefore deliver over and over again - with passion and integrity.
Consider moving to one global advertising agency - at least while seeding the message around the world. This is to increase the probability of the exact same message, look/feel being articulated all over the world. It will be enough to manage a variety of agency offices all over the world in creating local advertising. It would seem that at least if they were from the same company, all reporting to the same senior management, that it would be a bit easier to manage.
Ensure that marketing leadership really “gets” brand strategy. They must understand the concept of brand positioning and the power of connecting with consumers emotionally. Many in the technology space don’t. It will be critically important to have senior marketing staff who do!
Samsung is a great name that has the ability to create a great - and leading - brand. They’ve proven they can create great product. Now all they have to do is focus their marketing investment around brand strategy that nurtures the creation of meaningful brand connections around what they’ve already built. Easier said than done, for sure, but my money says they can do it. :-)