LITERATURE REVIEW The Indian Cellular Market is entering a boom period after years of quasistagnation.

Gartner estimates that by 2005, cellular subscribers in the country will number 30.9 million, up form 6.4 million at the end of March 2002. By then, India will be the fastest growing cellular market in Asia Pacific (in 2000, it was the Philippines and China) with 36 percent growth over the previous year Mobile operators will provide an estimated 45 per cent of additional telephone connections during the year. Cellular subscribers are expected to grow 80 per cent by the end of financial year 2003 to touch 1.15 crore, up from 64 lakh subscribers in fiscal 2002, according to an ICRA report on telecom industry. This would mean that cellular telephones would account for 20.5 per cent of the total telephone connections in India compared to 14.4 per cent last year. However, the cellular density would still remain a low 1.1 per cent compared to the fixed teledensity of 4.3 per cent. However, the report points out that, growth in cellular telephony could vastly exceed these projections, if the system of calling party pays is implemented. Doing some more crystal ball gazing, the ICRA report points out that the cellular subscriber figure is expected to touch three crore by 2005. At the same time, the fixed line network is expected to expand to about six crore by 2005 from 3.84 crore lines by 2002.Revenue growth, however, will lag the growth in subscriptions. Such is the massive demand for SMS globally that the GSM Association's, a wireless and cell-phone organization envious forecast of 10 Billion messages a month by end

2000 was achieved during September - three months earlier than predicted. The Association has now revised its year-end forecast for December to 15 Billion messages per month. According to the GSM Association, text messages sent across the world hit a staggering 50 billion in Q1 this year. This represents an impressive rise. During the same period in 1999 there were only 3 billion text messages sent, Q1 _____________________________________________________________________ M P Birla Institute of Management, Bangalore Page 19 of 80 2000 saw around 10 billion, and now there's five times that figure being sent across more than 500 million global GSM users. In India also, Mumbaites are also sending more than 28 Lakh SMS messages per day. SMS reached its peak on New Year's Day (2000) when cell phone users were flooded with New Year greetings. The AirTel network in New Delhi handles around 6 Lakh SMS messages on an average. Just before the arrival of the New Year, the network handled more than 74,000 calls between 11 p.m. (31 Dec 2000) and 1 a.m. (1 Jan 2001). Essar Cell phone claims that it handled more than 9 Lakh SMS messages on that day. In Mumbai on New years day over 15 Lakh SMS Messages were sent between 10pm and 3am. On Valentines day 9 Lakh messages were sent. Over weekends, BPL and Orange witness traffic to the extent of eight Lakh messages daily, with the number peaking in the evening. Of an average traffics of 60 Lakh cellular calls a day, SMS accounts for 5 Lakh messages a day. 60,000 messages flow down the AirTel channel and another 65,000 gets

processed through Spice Telecom. In short, it is rush hour for SMS traffic in Karnataka. In Manipal, SMS is believed to be doing roaring business as some 80 per cent of cellular users in the town are students. When AirTel launched SMS in April 2000, the initial average response was around 18,000 messages. Similarly, when Spice Telecom had carried out a study two months ago it was found that 37,000 SMS messages were received per day. The big jump has happened over the last couple of months. And emoticons - those symbol denoting emotions - have helped. BPL Mobile which conducted a consumer research survey across its Kerala circle found that 75 per cent of its total subscriber base used SMS as a frequent mode _____________________________________________________________________ M P Birla Institute of Management, Bangalore Page 20 of 80 of communication. It was found that 35 per cent of the users were youngsters, and that 50 per cent of them used the facility for romance. BPL Mobile today clocks 7 lakh messages a day across all its circles. Shopping is moving to the mobile world, giving everybody with a mobile phone access to a real-time shopping experience, regardless of his or her location. But there's much more to mobile e-commerce than just on-line shopping. It presents a new way to compare deals; pick-up impulse purchases and reaches the consumer wherever they are making their buying decision, be that, in the local high street, on the bus, at a friend's home with a catalogue in hand. For operators and mobile portals

advancing the boundaries of mobile internet services the search is on to create innovative new sources of revenue. Mobile Marketing and Advertising is the way to invest money today, and is projected as the optimum source of high growth revenue combined with high appeal to users. The current competitive business environment has lead to a growing demand for mobility, and for 24/7 access to information and services. Organizations which capitalize on this demand will be leaders in the Internet market of the future. Indus Mobile is proven wireless solutions for business can gain your organization that competitive advantage. Mobile Strategy Capture maximum telecommunications revenue potential with minimum geographical coverage to maximize its revenues and margins. Build high quality mobile networks by deploying state-of-the-art technology to offer superior services. Use the experience it has gained from operating its existing mobile networks to develop and operate other mobile networks in India and to share the expertise across all of its existing and new circles. _____________________________________________________________________ M P Birla Institute of Management, Bangalore Page 21 of 80 Attract and retain high revenue generating consumers by providing competitive tariffs, offering high quality consumer support, proactive retention

programs and roaming packages across all of its mobile circles. Provide affordable tariff plans to suit each segment of the market with a view to expand the reach, thereby increasing the mobile consumer base rapidly. DOMESTIC SCENARIO South Korea's Samsung and LG, already challenging top handset maker Nokia in the world's biggest markets, are taking the fight to the fastest-growing market, offering fancy phones and aggressive marketing in India. Rock bottom tariffs, a room-to-boom phone ownership rate of just four in 100 people and galloping demand have attracted global players such as Nokia, Motorola, Samsung Electronics and LG Electronics to India's $2.5 billion market. The Indian market is growing rapidly and the mobile penetration rate is still low. It's got great potential. India is a market that Samsung and LG really care about because of the sheer volume that's involved. About 1.6 million users sign up each month, and the 45-million subscriber base is forecast to more than double by December 2005, with call rates as low as 2 U.S. cents a minute. Song estimates more than 37 million mobile phones will be sold in India in 2005, with the annual number likely to rise to 50 million by 2008. Korean firms entered India late, but Samsung quickly built market share with stylish phones and color screens aimed at the high-margin sector, while LG aimed for the low- to middle range. Nokia's offerings cross the spectrum, but it has stuck mainly to low- to medium-priced bar phones.

_____________________________________________________________________ M P Birla Institute of Management, Bangalore Page 22 of 80 The Koreans are very serious contenders for the leadership position in India as they have demonstrated the ability to take share away in an exploding market. FANCY PHONES SELL Analysts say Samsung and LG have won a following by aggressively hawking flip-tops and clamshells with polyphonic ring tones and color screens. Both have a lot more advertising and marketing spend compared to other players. No precise market data is available, but analysts say Nokia, with an estimated 45 percent share, is still leading. Even so, Samsung is the largest player in the color screens and photo-snapping handset niche, selling 100,000 units a month. With more than half of India's billionplus population below age 25, the market is ripe for experimentation and new technologies. The future is color and cameras. Mobile phones are now a tool for entertainment as well as connectivity in terms of voice and data. Over the past two years, the Korean firms have piggybacked on a huge expansion drive by Reliance Infocomm Ltd., the CDMA-based mobile services arm of the Reliance group that tops the Indian market. Reliance, which has more than 10 million users, is expanding its network to 5,000 towns from 1,100 at present, and analysts say half the firm's CDMA handset purchases are through LG. LG first shipped CDMA handsets to India in late 2002, followed by color

handsets in April 2003 and camera phones in January 2004. By March it had over half of India's CDMA market. LG aims to sell 3 million handsets in India in 2004, or about 7 percent of its global volume sales, said a spokeswoman. _____________________________________________________________________ M P Birla Institute of Management, Bangalore Page 23 of 80 Samsung India expects to sell 2.8 million mobile phones in 2004, up from 2.5 million last year. Analysts expect handset revenue to rise 16.6 percent on the year to about $350 million. Nokia has fought back by entering the CDMA market and also by offering a larger menu of low-priced mobile phones in a market where more than 60 percent of phones sell for about $70. Samsung, the third-largest mobile phone maker after Nokia and Motorola, raised its global market share to 13.5 percent in the third quarter from 11.2 percent a year ago, according to Strategy Analytics. LG, meanwhile, overtook JapaneseSwedish joint venture Sony Ericsson as the fifth largest. Its share rose to 7 percent from 5.7 percent. SALES NETWORK ADVANTAGE The South Korean firms enjoy another edge -- their nationwide distributor and retail presence in the domestic consumer durables market. South Korean firms with leadership positions in the $4 billion consumer electronics market have changed the dynamics of the booming sector.

Both companies are now setting up plants to manufacture phones in India. Although Samsung's investment plans are not known, LG will plough $60 million into a mobile phone plant that will make 20 million GSM and CDMA phones a year by 2010. Half of those would be earmarked for export. There is the huge domestic market to cater to and in the longer run; the opportunity to address the needs of the global market is there. MOTOROLA TAKES AWAY MARKET SHARE FROMNOKIA Nokia is the world leader when it comes to mobile phones. However, they are continuing to lose this advantage to competition as Motorola chips away some of their _____________________________________________________________________ M P Birla Institute of Management, Bangalore Page 24 of 80 market share in the last couple of months. Finland based Nokia saw their market share fell to 30.4% during the first three months of the current year. This is a drop from 33% market share they had at the end of last year. The report was released by the market analysts Garner Incorporation. On the other hand, Motorola witnessed a growth in their market share as they now have captured 16.8% of the mobile market. This share is up from 16.3% at the beginning of the year. Samsung also did good as they now rule 13.3% of the market up from 12.2%. The market is continuing to see aggressive pricing from the various companies trying to woo the consumers away from each other. Nokia itself has taken a lot of measures to cut costs and lower the prices of their models.

Some of the plans include opening manufacturing units in Asian countries to manufacture cheaper mobile phones. One of the major markets where they fail to penetrate is the North America and they would love to expand their range in the US to entice more consumers. Their long-term goal is to achieve a market dominance of 40%, which looks like a tough deal now.

CONSUMER A consumer is an individual who purchase or has the capacity to purchase goods and services offered for sale by marketing institutions in order to satisfy personal or household needs, wants or desires. According to a statement made by Mahatma Gandhi, consumer refers to the following, A consumer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an outsider to our business. He is part of it. We are not doing him a favour by serving him. He is doing us a favour by giving us an opportunity to do so. So consumer is like the bl ood of our business and also a satisfied customer is a word of mouth advertisement of a product / services.

Consumer Durables goods:

Consumer durables involve any type of products purchased by consumers that are manufactured for long-term use. As opposed to many goods that are intended for consumption in the short term, consumer durable are intended to endure regular usage for several years or longer before replacement of the consumer product is required. Just about every household will contain at least a few items that may be properly considered to be of a consumer durable nature. One of the most common of all consumer durables would be the furniture found in the home. This would include items such as sofas, chairs, tables, bed frames, and storage pieces such as chests of drawers and bookshelf units. While once thought to be limited to only items made of sturdy metal or wood, any type of furniture today that is intended for use over the period of at least a few years can rightly be classified as consumer durables. Another common example of customer durables in the possession of most households is appliances. These items may include ovens, refrigerators, toasters, and gas or electric water heaters. Consumer durables of this type are intended for use on a continuing basis, and often are sold with some type of warranty or service contract that helps to ensure the appliance will continue working for an appreciable period of time. The family car is also understood to be among the various consumer durables owned by many households. Considered a major investment by many consumers, the expectation is

that the vehicle will remain operational for at least the amount of time it takes for the consumer to pay off any loans associated with the acquisition. Further, consumers anticipate that the vehicle can be utilized on a regular basis without fear of being destroyed by the frequent usage.

CONSUMER PREFERENCE

All marketing starts with the consumer. So consumer is a very important person to a marketer. Consumer decides what to purchase, for whom to purchase, why to purchase, from where to purchase, and how much to purchase. In order to become a successful marketer, he must know the liking or disliking of the customers. He must also know the time and the quantity of goods and services, a consumer may purchase, so that he may store the goods or provide the services according to the likings of the consumers. Now the whole concept of consumers sovereignty prevails. The manufacturers produce and the sellers sell whatever the consumer likes. In this sense, consumer is the supreme in the market. As consumers, we play a very vital role in the health of the economy local, national or international. The decision we make concerning our consumption behavior affect the demand for the basic raw materials, for the transportation, for the banking, for the production; they affect the employment of workers and deployment of resources and success of some industries and failures of others. Thus marketer must understand this.

Preference (or "taste") is a concept, used in the social sciences, particularly economics. It assumes a real or imagined "choice" between alternatives and the possibility of rank ordering of these alternatives, based on happiness, satisfaction, gratification, enjoyment, utility they

provide. More generally, it can be seen as a source of motivation. In cognitive sciences, individual preferences enable choice of objectives/goals.

The study of the consumer preference not only focuses on how and why consumers make buying decision, but also focuses on how and why consumers make choice of the goods they buy and their evaluation of these goods after use. So for success of any company or product promotion it is very necessary to depart its concentration towards consumer preference.

Consumer Acceptance Acceptance describes consumer willingness to receive and/ to tolerate. For example, a customer might accept the occurrence of a certain number of yearly supply interruptions given a certain price. Weighing needs or preferences against provided product or service attributes results in the balance of satisfaction pointing in a negative or positive direction, depending on whether interests are conflicting or corresponding. This determines the way in which people evaluate companies or utilities performance. Only when a consumers needs for a stated good or service are met, i.e. when the service provided corresponds with their preferences, will they feel satisfied.

Acceptance is also used in the literature to mean an affirmative answer to a proposal. The distinction is subtle but there are occasions where consumers might not agree to a proposal yet accept the subsequent service in the sense of tolerating it.

IMPORTANCE OF ADVERTISEMENT Generally, advertising is a relatively low-cost method of conveying selling messages to numerous prospective customers. It can secure leads for salesmen and middlemen by convincing readers to request more information and by identifying outlets handling the product. It can force middlemen to stock the product by building consumer interest. It can help trait dealers salesmen in product uses and applications. It can build dealer and consumer confidence in the company and its products by building familiarity. Advertising is to stimulate market demand. While sometimes advertising alone may succeed in achieving buyer acceptance, preference, or even demand for the product, it is seldom solely relied upon. Advertising is efficiently used with at least one other sales method, such as personal selling or point-of-purchase display, to directly move customers to buying action. Advertising has become increasingly important to business enterprises both large and small. Outlay on advertising certainly is the voucher. Non-business enterprises have also recognized the importance of advertising. The attempt by army recruitment is bases on a substantial advertising campaign, stressing the advantages of a military career. The health department popularizes family planning through advertising Labour organizations have also used advertising to make their viewpoints known to the public at large. Advertising assumes real economic importance too. Advertising strategies that increase the number of units sold stimulate economies in the production process. The production cost per unit of output is lowered. It in turn leads to lower prices. Lower consumer prices then allow these products to become available to more people. Similarly, the price of newspapers, professional sports,

radio and TV programmes, and the like might be prohibitive without advertising. In short, advertising pays for many of the enjoyable entertainment and educational aspects of contemporary life. Advertising has become an important factor in the campaigns to achieve such societal-oriented objectives such as the discontinuance of smoking, family planning, physical fitness, and the elimination of drug abuse. Though in India, advertising was accepted as a potent and recognized means of promotion only 25 years ago, its growing productive capacity and output necessitates the finding of consumers and advertising plays an important role in this process. Advertising helps to increase mass marketing while helping the consumer to choose from amongst the variety of products offered for his selection. In India, advertising as a profession is in its infancy. Because of this fact, there is a tremendous scope for development so that it may be productively used for the benefit of producers, traders, consumers, and the countrys economy. Everyday consumers are exposed to thousands of voices and images in magazines, newspapers, and on billboards, websites, radio and television. Every brand attempts to steal at least a fraction of a persons time to inform him or her of the amazing and different attributes of the product at hand. The challenge of the marketer is to find a hook that will hold the subjects attention. In helping to achieve this, use of celebrity endorsers is a widely used marketing strategy

VISION OF THE COMPANY Leading the digital convergence revolution GROWING TO BE THE BEST As a part of vision Samsung has mapped out a specific plan of reaching $400 billion in revenue & becoming one of the worlds top 5 brands by 2020

MISSION OF THE COMPANY DIGITAL E COMPANY excited about future to serve better services to the people in the market of telecommunications

THE SAMSUNG PHILOSOPHY At Samsung we follow a simple business philosophy to devote our talent and technology to creating superior products and services that contribute to a better global society. Every day our people bring this philosophy to life . our leaders search for the brightest talent from around the world ,and give them the resources they need to be the best at what they do . the result is that all of our products from memory chips that help business store

vital knowledge to mobile phones that connect people across continents have the power to enrich lives and thats what making a better global society is all about.

OUR VALUES We believe that by living by strong values is the key to business. At Samsung a rigorous code of conduct and these core values are at the heart of every decision we make .

PEOPLE Quite simply, a company its people. At Samsung ,we are dedicated to giving our people a wealth of opportunities to reach their full potential

EXCELLENCE Everything we do at Samsung is driven by an unyielding passion for excellence and an unfaltering commitment to develop the best products and services on the market.

CHANGE In todays fast paced global economy, change is constant and innovation is critical to a companys survival. As we have done for 70 years, we set our sights on the future ,anticipating market needs and demands so we can steer our company towards long term success .

INTIGRITY

Operating in an ethical way is the foundation of our business .everything we do is guided by a moral compass that ensures fairness respect for all stakeholders and complete transparency .

CO-PROSPERITY A business cannot be successful unless it creates prosperity and opportunity for others .Samsung is dedicated to being a socially and environmentally responsible corporate citizen in every community where we operate around the globe.

PRINCIPLES OF THE COMPANY

We comply with laws and ethical standards. We respect customers, shareholders and employees. We are socially responsible corporate citizen. We care for the environment health and safety. We maintain a clean environmental culture.

SAMSUNG COMPETITORS

PRODUCTS

Samsungs global m/s

competitors

M/S

year

source

DRAM NAND flash Large size LCD panel Active matrix OLED Lithium iron battery LCD monitor Hard disk drive

34.3% 40.4% 26.2%

Hynix Toshiba LG display

21.6% 2009 26 28.1% 2008 27 25.8% 2009 28

90.0%

LG display

2008 29

19% 16.1% 9.5%

Sanyo Dell Seagate technology

20%

2009 30

14.6% 2008 31 34.9% 2007 32

Multifunction printer 16.4% Television sets(LCD,PDP,CRT) Mobile phones PDP panel 30.5% 21% 23%

HP LG electronics Nokia LG display

19.2% 2009 33 13.7% 2009 34

37.8% 2009 35 34.8% 2008 37

MARKETING STRATEGY OF SAMSUNG

Aggressively hawking flips tops and clamshells with polyphonic ring tones and color screen. Nationwide distributer and retail presence in the consumer durable market. Samsung has been associated with the Lakme India fashion week for its mobile phones the company used the LIFW 2005 as a platform to launch D-500,worlds best mobile phone in the Indian market. Set up a hand set manufacturing facility in India

S.W.O.T ANALYSIS OF THE COMPANY

STRENGTH New product concept to rollout in five month. Catching the pulse of the consumer offering design & understanding emotions. Heavy investments in technology. Focus on innovative products.

WEAKNESS Not proactively coming out with newer mobiles. Lack in product differentiation. Different models at different price points. Focus on mass market. not very user friendly designs

OPPORTUNITIES Distinguish its service from competitors offer product variation. Demand for cell phones driven by the servers providers or carriers. Tie up with service providers lowering the price of the phone just by $20. Motorolas dominance in the US the European market controlling more than world market. Aggressive competitors including Sony Erikson, Siemens eating into its share. Not keeping track of the new trends in the market. Not an accessory and fashion statement