Samsung marketing expenses not always the best use of its money

November 28, 2013
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It is no secret that Samsung spends a huge amount of its earnings in making sure that its brand is on every conspicuous location or show in the world. However, it may turn out that the billions that it spends on its marketing campaigns and stunts might not be giving it the best results for the price.

Samsung's marketing thrust is notoriously aggressive and it can hardly be blamed for doing so considering it has pitted itself against Apple, who has a longer and stronger foothold when it comes to brand recognition. However, in its attempts to gather the biggest wow's, it may have missed a few pointers that has sometimes made its name memorable for the wrong reasons. Consumers like product placement when done discreetly and tastefully, which is not the message that Samsung sent in its Sydney Opera House and X-Factor stunts. The company might have also failed to consider local or cultural sensitivities when it employed swim-suit dancers in an event in South Africa, or tried to reinforce a sexist stereotype in a New York launch event.

And it's not as if Samsung lacks the resources to do things right. Estimates put Samsung's advertising and marketing spending this year to $14 billion. It may not be that much compared to its $227 billion market value, but it is almost exponentially more than what Apple itself spends. According to Thomson Reuters data, the Korean company spends 5.4 percent of its annual revenue for this purpose alone, more than any of the world's top twenty companies. In contrast, Apple spends only 0.6 of its earnings.

Of course, Samsung defends its marketing strategy and expenses as part of its goal to be one of the world's leading brands. Some believe that this much spending is indeed necessary, at least at this point. Once the brand has been built, spending on that level will turn to be counterproductive. But probably what's more important is that Samsung stop for a while to see how consumers are reacting to their campaigns instead of just shoving the company's dreams down everyone's eyes.

SOURCE: Reuters


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  • http://mygpl.us/peksalvo Pek

    they should spend more on quality of their products

  • JayQ330

    If they did they wouldn’t be able to brag of how much more they made over apple :-), but here’s some sort of good news, a leaked image from a Samsung factory was posted… Their hopes are that it’s for the SG6. Could be or maybe isn’t. All I know is I’m not a fan of the hard home button on my sg4 & really hope that there aren’t even capacitive buttons, just the software pure android style buttons along with a screen with a resolution of 1080p with 10 extra pixels just for the soft buttons, like lg did in optimus g.

  • Seeder

    Even negative reception is buzz and gets more eyeballs on Samsung products. It’s deliberate and meant to raise awareness.

  • CatsCatsCats

    The terminology is very confusing and misleading when you compare Samsung revenue as a percentage of marketing expenses versus Apple earnings. Earnings implies profits. Revenue implies sales before any costs are factored in. Please clarify if you meant that Apple spends an amount equal to 0.6% of their revenue, of if they spend an amount equal to 0.6% of their profits.