South Korea's Samsung Electronics said it would raise its marketing budget in 2003 in an attempt to strengthen its brand in the North American and European markets where it is lagging. Samsung, which makes products from semiconductors to Internet-connected fridges, said it would focus its strategy in those areas on flat televisions and mobile phones.
"This year we're spending over U.S. $400 million on marketing. Next year it will be more," executive vice president for Global Marketing Eric Kim said. He added the company could use its record profits this year, which are in sharp contrast to most rivals which are struggling with losses in the current economic growth slowdown.
Samsung is turning in profits from its memory chip and flat display components businesses, the world's largest with huge economies of scale. It is also the world's fastest growing and most profitable cellphone maker, with a focus on more expensive models which use the company's own components.
The consumer electronics unit, which makes TVs and DVD players and recorders, is marginally profitable, and Samsung comes out relatively weak in benchmark brand studies.
Mr. Kim said that the company's mobile phone unit received significant funding from the brand advertising budget. This will continue as Samsung focuses even more advertising on mobile phones and flat TVs, where it believes it has an edge, he said.
"Our brand is weaker in Europe and the U.S., but in cellphones we're pretty strong. In those regions we'll be even more focused. Wireless and digital TV are the two areas we'll focus on in Europea and the U.S.," he said. It hopes to mimic its success in the cellphone market, where it has climbed to the number three slot, in the market for flat TVs. It offers the largest screens but not necessarily with the best picture quality, according to trade magazines and market researchers. (Reuters)
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