In a few weeks, Samsung will unveil the new ‘Sleek’, its third flagship phone of the year, laying down the gauntlet for rival manufacturers for what looks like a determined push for the second half of the year.
The Sleek will pick up the baton from the Samsung Tocco and Soul, and will be splashed over billboards, bus stops and in magazines and newspapers.
Fuelled by a £4m campaign conceived specifically for the UK market, the Sleek will support the growing arsenal of handsets that Samsung hopes will take its share of the market closer to Nokia.
The Sleek is a bar-style music phone with a 3.2-megapixel camera, HSDPA, and will be keenly priced.
It follows Samsung’s recent similar £5m UK marketing push on the Soul that has provided a shot in the arm for the manufacturer. Some were questioning Samsung’s appetite in a market where Nokia is pulling away, Sony Ericsson has taken the number two mantle over the last year, and Korean rival LG is snapping at Samsung’s heels with what appears to be a ‘me-too-but-cheaper’ strategy.
Samsung also unveiled the Tocco at the end of last month, giving it a push with £4.5m of marketing spend. The Tocco has impressed many retailers and operators with its iPhone-like looks, strong build and ease of use. ‘Tocco’ is a name conceived by UK VP Mark Mitchinson specifically for the UK market (the Sleek is also a UK-only name).
Mitchinson said Samsung would spend between two-and-a-half to three times as much on advertising this year as it did in 2007. Twenty-five million pounds is due to be spent before the end of this year alone.
Samsung has already seen a positive response to the campaigns. The Soul is currently sitting at the top of Mobile’s tracker, which monitors contract sales in Carphone Warehouse and Phones 4u, and the Tocco is also in third place. The biggest challenger to the Soul’s number one spot could come in the unlikely form of the LG KF750 Secret – which is being given an even bigger £5.5m marketing push. LG is upping its budget as well as improving its handset range, and has drafted in marketing director Andrew Warner this week in what looks set to be a fascinating battle this year.
LG has already said that it wants 10% of the UK market this year, and given the style of its phones, the bulk of that 10% will be fought with Samsung.
Mitchinson has bolstered the UK team with three new executives, and more arrivals are expected in the coming months. ‘There is an aspiration for high-calibre leaders in our business.’
The changes and the lift in marketing spend are the start of a new phase for Samsung. Some of Samsung’s customers believe the company could have performed stronger, been more competitive on price, had phones on prepay and not produced disappointing handsets such as the clunky G800.
Mitchinson is putting together a new battle plan that he believes will make Samsung the number one UK manufacturer within five to 10 years.
‘This is a new phase of growth. Last year we exceeded our targets, and we are already indexing above last year, but we are not complacent. We have a lot of ambition,’ he said. Industry figures show Samsung had its best ever market share in the UK last week.
Mitchinson has been with Samsung nine years next month. ‘I haven’t ever enjoyed myself in the industry as much as I have at Samsung, but I came in when Samsung were literally nowhere. I won’t rest until we are number one.’
The plan is to move into prepay, smartphones and leverage other Samsung products in a move to capitalise on the convergence strategies of operators and retailers.
Mitchinson says: ‘We’ve been very competitive with pricing in the past, but in the second half of this year we will be ultra competitive on price. We have no hang-ups over pricing – there is no issue. Prepay is also an area that we are looking to compete more aggressively on.
‘We are growing a business now. We are hunting in new segments, there’s no complacency.’
Industry watchers noted how LG dominated the fashion end of the prepay market in the run-up to Christmas. Samsung insiders have previously said the company should have produced a rival to LG’s £60 Chocolate phone to deny the Korean rival market share.
Mitchinson says: ‘We’ve got aggressive plans to increase our penetration in the prepay end at Christmas. It is something we haven’t deemed necessary in previous years.’
Mitchinson is being tight-lipped but says he is excited by the moves of Carphone and BestBuy, and also wants to take his convergence strategy to the mass merchandisers like Tesco and Argos.
‘In the next few months, we will build on the perception of Samsung from the traditional retailers that it is best placed in terms of the core competencies to recognise our full range of devices.’
Elsewhere, Samsung is making a concerted push at the smartphone market, and has already drafted in former Azzuri man Carl Borraman to be head of smartphones.
Mitchinson says: ‘In terms of our focus for the future, we know what we’re good at and we know the areas we’re not so strong. The multimedia and business areas are being addressed but we will always focus on style – it’s at the forefront of everything we do.
‘I want to carve out the opportunities around converged products. Laptops have become smaller and mobile phones have become more capable and that gap is being bridged.’
Samsung is also close to breaking the utterly bizarre pact that saw Samsung not supplying 3 in exchange for Vodafone not buying from LG. A number of Samsung devices will appear on 3 in the coming weeks, with the Samsung Soul expected as the first device.
Samsung appears to have a clear strategy on new areas of the market to build share, but the real test will be if it can bring back the magic around its hero products.
Samsung's new team
Derek Williamson will join from T-Mobile to become general manager on 1 July, stepping into Mark Mitchinson’s shoes, who has become Samsung UK VP.
Meanwhile, James King left Motorola to become the company’s new UK head of marketing and will report to Williamson when he starts. Matthew Brum joined from Sony Ericsson to become head of product management and Jon French was promoted to general manager for sales.
Williamson will have King, Borraman, the training department and content business reporting into him. Newly-promoted general manager for sales Jon French will have the sales team under his domain. Both French and Williamson will report to Mitchinson in the new structure.
Retailers on Samsung
Kay Patel, Phone Nation: ‘Samsung is going in the right direction at the moment. They are bringing out more high-end phones that look like they’re designed to compete with the iPhone. We have had a lot of people asking for the Soul but I still think the advertising could be more imaginative.’
Phil Kane, Think Phones, Leeds: ‘Samsung is very popular at the minute. They offer better five-megapixel camera phones than anyone else and are matching Nokia. Everyone I deal with wants the Soul – they are really taking off.’
Navaid Afzal, Delta Communications, Oldham: ‘Samsung has picked up quite a lot recently and has definitely become more popular. Their technology is getting better, especially when it comes to touch-screens. But generally they are still not in the same league as Nokia.’
Chris Baker, TMTI, Wiltshire: ‘I wouldn’t have bought a Samsung two y