Samsung Restructures Major Appliance Unit

By Alan Wolf On Feb 9 2004 - 8:00am




It's been nearly two years since Samsung caused industry jaws to drop by establishing itself in the U.S. majap market with a one-two punch of sleek, full-sized refrigerators and the backing of Best Buy.

Now, with the key Kitchen/Bath Industry Show (KBIS) fast approaching, the company's white goods wing has re-grouped and reorganized as it prepares the way for Samsung's next wave of market penetration.

Gone is former digital appliance network president Yong Oe Han, who has been reassigned since launching the line. Under the new structure, majaps were moved under the aegis of Samsung's Digital Consumer Electronics Division (DCED), and Han's responsibilities were assumed by J.T. Ahn.

Spearheading Phase II domestically is new director of home appliances Stephanie Kivett Ohnegian, a former Samsung strategic planner who succeeded marketing director Dan Baxley last summer. Supported by a new team of senior business managers, Ohnegian is charged with expanding Samsung's appliance beachhead here and broadening the portfolio beyond room air, microwave ovens and refrigeration with a more complete product offering.

TWICE recently spoke with Ohnegian about Samsung's place in the majap matrix, and her new role in white goods.

TWICE: Why the shakeup?

Ohnegian: We're a growing organization with lots of big plans, and we made the changes to better poise us for that growth. For us the market is still untapped.

TWICE: What do those plans entail?

Ohnegian: First we ramped up by hiring new talent with appliance industry experience on both the marketing and sales sides. Now that we have key people in place we can embark on a growth plan for which we've set ambitious goals. Our business is still in its infancy, but we've already proven ourselves by launching refrigerators with Best Buy in September 2002, which has helped improve their appliance business. Now we're ready to expand distribution.

TWICE: Where to?

Ohnegian: Where we can add value, specifically key regional dealers and the warehouse clubs.

TWICE: Why the warehouse clubs?

Ohnegian: Because they tend to sell more individual units rather than bundles of products. They also need differentiated products with a value proposition.

TWICE: Won't that, along with your position at Best Buy, create some consternation among the regionals?

Ohnegian: Samsung is experienced in channel management and managing models within a market. We're expanding SKUs to accommodate everyone and currently differentiate our refrigeration distribution by side-by-side or bottom mount configuration. We're sensitive to retailers' strengths, market positions and goals, and are selective in expanding our distribution channels. We look for synergies with our trade partners and are interested in developing long-term relationships, and we believe we have a better value-added offering than our competitors.

TWICE: When will Samsung be able to offer bundles of products as well?

Ohnegian: Obviously our business would be larger if we also offered laundry, dishwashers, ranges and over-the-range microwave ovens. To that end, we'll be expanding our portfolio over the next 12 to 18 months.

TWICE: Why does the appliance trade need another vendor?

Ohnegian: Samsung has established itself as a premier technology company in visual displays, and we can bring the same technological prowess to appliances. For the past twenty years the appliance industry has been stagnant and boring, and we see an opportunity to provide new technologies, form factors and colors to improve the look, feel and performance of these products. We've already demonstrated it with our refrigerators, which feature digital displays and twin cooling systems that chill each compartment separately.

Also, many retailers already have a relationship with the CE side of our company.

TWICE: Can we assume you'll be leveraging those relationships to help expand your white goods business?

Ohnegian: It wouldn't be friendly to leverage one buyer against another, although our imperative is to increase sales across all of our categories. So we will be drafting off the success of CE in multiple ways, such as allowing some sales people to sell electronics and appliances, and offering some discount programs across all Samsung lines. There won't be any explicit quotas, but we will offer attractive packages, as well as point-of-purchase and promotional marketing support.

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