Samsung boosts marketing efforts in Indonesia

Samsung boosts marketing efforts in Indonesia

Johannes Simbolon, The Jakarta Post, Istambul

PT Samsung Electronics Indonesia has increased its marketing
budget to promote its products in the local market, as it is
striving to become the top brand here for electronics and
information technology products.

While in the past the firm focused on the export market, the
firm is now focusing greater attention on the local market on
optimism that local demand will pick up this year thanks to the
government's supportive fiscal policy and the country's improved
economic performance.

"Our revenue target for this year is fifty-fifty from export
and local markets," marketing director Lee Kang Hyun said in a
recent annual meeting of Samsung worldwide producers and vendors
in Istanbul, Turkey.

In 2002, Samsung Electronics Indonesia, which operates a huge
factory here, exported US$800 million-worth of products and
booked $300 million in sales on the local market. Last year,
export revenue was targeted at $850 million.

Lee said that the company had allocated $23 million in
marketing budget for this year, up from $20 million last year.

Thanks to a successful marketing campaign, Samsung managed to
strengthen its foothold in the local market over the past few
years, while other firms struggled to cope with the impact of the
lingering economic crisis. For instance, in 2002, when Japanese
giant electronic maker Sony Corp., which for decades had
dominated the country's electronic market, decided to close down
its manufacturing plant in Indonesia, Samsung reported an
increased investment to meet growing demand on the export and
local markets.

According to Lee, Samsung is now the top brand for computer
monitors, CD-Roms, washing machines and DVDs in the country,
while for color TVs, cell phones and freezers it ranks second in
terms of sales.

In the past, Samsung focused its marketing campaign on cell
phone and information technology products. This year, Lee said,
most of the marketing budget would be spent on promoting consumer
electronics as part of the company's ambition to reach the top
position in the country's color TV market, and further strengthen
its base in the freezer and washing machine markets.

Samsung, a global leader in the electronic chip industry, is
known for its advanced, high-end digital products, including
plasma TVs. But in order to boost its sales of color TVs in the
domestic market, the company decided last year to enter the
middle and low-end market segment by importing 15,000
conventional TVs from its manufacturing plant in India to
Indonesia. The products, now being sold under the brand name
Kibas, were equipped with a sound system capable of blaring out
"powerful sound", which, Lee said, appealed to most Indonesians.

According to Lee, Samsung controlled 15 percent of the
country's color TV market last year with total sales of 400,000
units. This year, sales are expected to increase to 450,000
units, which will enable Samsung to topple Sharp from its current
No. 1 position.

Like other cell phone producers, Samsung finds Indonesia a
very attractive market, given that of its 215 million population,
fewer than 20 million already have cell phones.

Samsung entered the country's cell phone market in 1999,
relatively late when compared with other brands. But within four
years, due to intensive marketing campaigns, Samsung claimed to
have reached second position in terms of sales last year, with
total sales of 300,000 units. Above all, the firm has
successfully created a brand image that Samsung is a premium
product by releasing to the market expensive and technologically
advanced products.

Late last year, Samsung introduced its latest handsets, the
SGH E700 and SGH X600, which are equipped with digital cameras.

Budiarto Tanojohardjo, sales and marketing manager of PT
Selular Nusantara Pratama, the sole distributor of Samsung
handsets in Indonesia, said he was optimistic of increasing
Samsung handset sales by 20 percent this year as Samsung had
allocated $8 million in budget for their promotion.