Samsung Marketing Manager Kim Tae-Joon realizes his company needs all the positive spin it can get to successfully launch a Samsung automobile-a market challenge that compares to Japan's automotive invasion in the U.S. some 30 years ago, when Japanese-made products were frowned upon as cheap imitations.
GENERATING GOOD WILL
That's why even a powerhouse like Samsung, which sells everything from electronics to construction cranes, is getting a very early start in generating good will about its new top-secret car. The car won't be on Samsung dealer lots for two years-in fact there aren't even Samsung dealers yet-but already Samsung is on the marketing circuit with its first global corporate image campaign and a hard-to-resist credit card come-on in Korea.
During the Summer Olympics in Atlanta, Samsung in-house ad agency, Cheil Communications, broke the $26 million global image campaign, "The World Inspires Us." To prove how inspired Samsung can be, creative for the ads was filmed and photographed in the African plains, the Utah desert, urban Hong Kong and an Arctic glacier, showcasing Samsung's diverse products, from flat-screen displays to multimedia PCs to financial services.
"Even though brand awareness and perception differ from one market to the next, to underscore the global nature and orientation of Samsung, this ad carries a single message for our global audience," said J.H. Lee, Samsung's VP-corporate affairs.
"It was the first time that Samsung has done a global campaign," said Jeff Vogt, partner at Vogt/Wein, Westport, Conn., which was hired by Cheil's U.S. office in New Jersey to handle creative work on the campaign.
The ads, translated into 28 languages, are transmitted on CNN International and Eurosport, the pan-European sports network. Outdoor and print, including the Financial Times and The Economist, supplement Samsung's first use of TV. The campaign is being advertised heavily not only in the U.S. and Europe, but also in such emerging markets as Latin America, said Oh Seung-Jae, senior account director at Cheil in London.
Getting into the automotive business was a life-long ambition of Lee Byung-Chul, the late chairman and father of Chairman Lee Kun-Hee. Although Lee Byung-Chul thought it would be one of the most profitable businesses, he did not accomplish his dream because the government banned Samsung from entering the automotive business to prevent fierce competition in the industry.
Now his wish is about to be fulfilled. Samsung intends to sell the majority of its cars abroad, bypassing for the most part the slow-growing $27 billion Korean automotive market and aiming for a slice of the faster-growing market for Korean cars abroad. Last year, Korean car sales abroad rose by 17% to 730,000 units.
Samsung hasn't hinted at which international markets it will concentrate on, though it will do test marketing in the U.S. and Europe by 1998. In a departure from the global campaign, the auto marketing pitch, which began last May, is domestic. The slogan, created by Cheil, is a little dull -"Samsung will roll out its first car in 1998"-but the response hasn't been.
CREDIT CARD IS A HIT
The Korean-language ads running in newspapers, magazines, radio and TV until the end of the year, offer Korean consumers a Samsung credit card which allows charges up to a total of $1,250 over five years toward a new Samsung car. The credit card, the first of its kind in South Korea, is attracting 3,500 people a day.
"I have no idea what Samsung's car will be like, but I think it's a hell of a bargain," said Sohn Hee Shik, 27, a banker who got one of the credit cards after he saw the ad.
All this excitement is over a car Samsung Motors hasn't even described or named yet, except to say that it will probably be a compact and cheaper than its competitors.
"It's pretty smart to attract consumers at this stage," said Park Jae Sok, an auto analyst at LG Securities Co. "Samsung is a company with deep pockets and it will do almost everything to make its debut successful."
Deep pockets is an understatement. Samsung Motors, established in March 1995, plans to spend as much as $1.2 billion to design, market and engineer the car, and build a factory in Pusan to turn out 500,000 cars per year. By 2010, Samsung aims to produce 1.5 million cars annually and be one of the world's top 10 automakers.
That may not be an unrealistic goal considering Samsung's vast resources. The South Korean economy is run by conglomerates like Samsung, which together account for sales that equal the country's total gross domestic product. Even second-ranked Korean conglomerate Hyundai Group, with revenues of $60 billion, doesn't compare to Samsung's market heft.
With 230,000 staff worldwide, Samsung maintains a worldwide presence, serving markets in 65 countries from North America to Southeast Asia with production facilities ranging from Tijuana, Mexico to Wynyard in northern England. In 1995, the group established five regional headquarters based in Beijing, New Jersey, London, Singapore and Tokyo to manage businesses in those market areas.
LONG LIST OF COMPANIES
In Korea, just to name a few of its businesses, Samsung owns the Westin Chosun Hotel, one of South Korea's top five-star hotels; the Shinsege Department Store in downtown Seoul; newspaper company Joong Ang Ilbo; and Everland, Korea's largest amusement park-not to mention Samsung's Cheil Communications, the largest ad agency in South Korea with 1995 billings of $775 million.
Cheil, established in 1973 to coordinate campaigns by local agencies around the world, has more global experience than other Korean agencies-largely because of Samsung's vast cross-border reach. The agency handles 150 accounts exclusively for Samsung products and companies, including appliances, cameras, computers, electronics, refrigerators, semiconductors and washing machines.
In markets where its own presence is limited, Cheil relies on other ad agencies. Saatchi & Saatchi Worldwide, London, which has been with Samsung for three years, has worked with the advertiser's electronics division in Europe as well as Asia. McCann-Erickson Worldwide has worked with Samsung in some South American markets.
AUTO ACCOUNT IS A FIRST
While Cheil is experienced globally, the agency has never handled an automotive account. But that doesn't seem to be a deterrent. Already, the credit card campaign Cheil developed to launch the car has caused competitive Korean carmakers to become defensive and issue their own credit cards.
Of South Korea's three major automakers, Hyundai Motor Co. and Daewoo Motors Corp. followed with their own cards, and Kia Motors is about to issue one.
By mid-1997, Samsung will shift gears and run a pre-launch campaign for the car's debut in March 1998. Samsung will make sure that the car ads imitate the global campaign's emphasis on quality.
"Some kind of cheaper car image is the last thing we want," said Samsung's Mr. Tae-Joon.M
Contributing: Juliana Koranteng, London; Rebecca A. Fannin, New York.