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Samsung’s Han: Creating A Majap State Of Mind

7/03/2003 09:44:00 AM Eastern

Orlando, Fla. - It was just over a year ago at the Kitchen/Bath Industry Show in Chicago when Samsung, a name long associated with consumer electronics and small appliances, set tongues wagging by throwing its hat into the full-size refrigeration ring.

Despite an already oversupplied market, which became even more contentious with the recent additions of LG and Haier, Samsung sailed full-speed ahead into the rancorous majap waters — and within five months landed the coveted Best Buy business.

Steering the course for Samsung’s lesser-known divison is Yong Oe Han, a 19-year company veteran who was named president of its digital appliance network in 2001.

To get Samsung white goods on the American — and worldwide — maps, he consolidated its various product lines under a single brand, opened factories and R&D centers globally, and set as his goal nothing less than establishing Samsung as the world’s leading home appliance brand.

To help meet that objective, he established a five-point plan that calls for the pursuit of new enterprise and strategic business; the development of core competencies; the positive promotion of strategic affiliation; optimization of global chain networking; and the application of market-driven change (MDC).

In the course of a year, those efforts have yielded an expanded refrigeration line that now boasts full-size built-ins, the ability to cross-promote its brown and white goods, and sales that have far exceeded Samsung’s initial expectations.

TWICE recently spoke with Han [through an interpreter], who shared his vision for a marketplace in which Samsung washing machines will soon be as commonplace as its branded TVs.

TWICE: Your first full-size refrigerator account was quite a coup.

Han: The deal was not only good for Samsung but was also good for Best Buy.

TWICE: Are any other refrigeration placements forthcoming?

Han: We cannot name names, but we are working on two, maybe three new customers that we will announce mid-year.

TWICE: The U.S. majap market is already quite crowded, and business is slow. Why did you feel the need to add Samsung appliances to the pot?

Han: The U.S. market is of great importance. It represents 70 to 75 percent of world demand for side-by-side refrigerators alone. If we can succeed here, it means we can succeed anywhere in the world.

TWICE: How much do you leverage the CE side of Samsung in your major appliance dealings?

Han: It depends on the retail channel, but in general the negotiations are separate. We have been pretty successful in CE and we think the major appliance side can be a similar success.

TWICE: How much do you leverage the CE side in your majap marketing?

Han: There are minor differences, but the overall brand campaign is the same. We want to benefit from the brand recognition that’s been built up in the U.S. It’s also important to have a uniform message in our marketing and branding. We’re still a division of the same company, and it’s desirable to build brand equity under a single name. We want to build an image of Samsung as an innovator in technology and design, and to associate the brand with advanced technology and uniqueness.

TWICE: Where is Samsung positioned along the price spectrum?

Han: It is a mid- to high-price point line. Eventually the Samsung brand will be aimed at the high-end market, and we may introduce a second sub-brand.

TWICE: A lot has happened since you introduced your first full-size refrigerators at the Kitchen/Bath Industry Show (K/BIS) over a year ago.

Han: We’ve made a big advance in one year. We’re only in our second year now, and we’ve added built-in appliances, convection microwave ovens, a full range of side-by-side refrigerators, various slide-in models and over-the-range microwave ovens.

TWICE: Are you considering other categories as well?

Han: Yes, the laundry market. We have successfully launched a front loading washer in Korea, and may introduce an electric laundry pair here either later this year or in the first quarter of 2004.

TWICE: According to some reports, GE is looking for a buyer for its appliance business, and Samsung is one of the names that has surfaced. Any comment?

Han: [laughter] We have no such plans. We have maintained a mutually beneficial relationship with GE for 20 years, producing microwave ovens, room air and over-the-range microwaves under their brand, and we are now exploring other product possibilities. It is our hope to maintain this relationship in the future.

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