San Antonio — The Progressive Retailers Organization was at the Westin La Cantera Hill Coun
Two months ago, Steve Cook joined Samsung Electronics America in the new position of senior VP/chief strategic marketing officer to head up marketing for the company's North American operations.
Besides a wealth of experience, he brings a fresh perspective to Samsung and the traditionally insular consumer electronics industry, having spent most of his 26-year career at packaged-goods marketing icons Coca-Cola and Procter & Gamble.
Recently TWICE sat down with Cook at Samsung's headquarters to share his first impressions of the CE business, how the industry could benefit from a packaged-goods approach and his game plan for the Samsung brand. Excerpts of the conversation follow. Also see www.TWICE.com for additional questions as well as video excerpts of this interview:
TWICE: What are your initial impressions of the consumer electronics industry?
Steve Cook: There is a greater need than ever to start to inject consumer packaged goods brand discipline. That means building brands, differentiating your offering, delivering on your promise, and connecting with consumers in new ways that have never been done before.
Some of the product segments that we compete in, such as mobile phones, are already consumer packaged goods [CPG]. So many of the "strategies and tactics" and ways of engaging with consumers in CPG can be applied in this industry as well.
TWICE: Samsung went from a Tier 2 brand to a premier name within an extremely short time frame. How was that achieved?
Cook: Samsung globally and domestically has had a very strategic focus on winning in the marketplace. Achieving No. 1 status in LCD and No. 2 status in mobile phones is testament to itself.
As I was doing research during the interviewing process, every time I looked around the corner I discovered, quite frankly, something I've never seen in my 26-year Proctor & Gamble and Coca-Cola career, which surprised and delighted me that. This company has focused on building strong relationships with its retailers, better than just about any relationships that I'd ever seen, and I've worked with many, many major retailers. It has very strong relationships, a strong commitment, and a deep, rich pipeline of technological innovation.
Our design philosophy is emerging and is very sophisticated. We know which consumer we're going after, and we're going to do additional segmentation to get an even sharper focus.
That's why there's been such a focus on bringing people in with strong consumer packaged goods experience. Bill Ogle, who is the CMO [chief marketing officer] of our handheld division, was brought in from Pizza Hut. He was CMO at Sarah Lee, and he also has a Proctor & Gamble foundation. Peggy Yang, vice president of our consumer electronics division, came from Discovery Channel with a strong consumer package mindset and media background. Before that she worked at Sony.
In our headquarters in Seoul there are people that are also coming in with classic packaged goods experience, and from some industries that might surprise people in the CE space. The senior VP brand manager there for handheld phones started her career at Unilever and worked at L'Oreal. I also worked in the cosmetics category running Cover Girl and Max Factor cosmetics in the U.S. and Europe.
You might ask what cosmetics have in common with consumer electronics other than starting with a "C," but they have a lot in common. It's about delivering the emotional connection to consumers. It's about having a design philosophy and delivering that in addition to the functional, rational benefits. I think as the industry evolves, and I look at advertising from other CE manufacturers, everybody is trying to find that emotional connection. It's not just about selling features anymore — that's actually been damaging to the industry. My personal belief, and my colleagues believe this as well, is that focusing just on rational benefits has commoditized the industry. That's not good for the suppliers and it's horrific for the retailers. It's eroding margin and that's not good for anybody. We need to find ways to add value, and we believe that building in emotional benefits to the specific lifestyles of our consumers by product category is the way to go.
TWICE: Is it possible to tailor your domestic marketing efforts to specific channels of distribution or even specific retailers?
Cook: Absolutely, and again I've seen this in the consumer packaged goods world. Channel segmentation is here to stay and it's growing at an ever-accelerating rate. Think about the dynamics in the retailing space. Retailers like Best Buy, Circuit City, Wal-Mart, and all of the wireless carriers have all grown larger and more important to suppliers like Samsung every day. They also have a mandate to grow their brands. The opportunity and the challenge is to deeply understand our retailers' unique positioning, and to work hand-in-hand with them to customize strategies and programs specific to their positioning and to their customers.
So channel strategies — and I would advocate retailer-specific strategies — are going to be the secret sauce that will be essential to winning in the future.
TWICE: How do you accomplish that without diluting Samsung's core brand message?
Cook: I showed our marketing teams a Venn diagram where, as Steven Covey would say, you "seek to understand" what that retailer is trying to accomplish, what we bring to the table, and then find the right marriage to appeal to the consumer. We need to have a consolidated message with our retail partner but at the same time not bastardize the Samsung promise. We have to find that happy marriage.
At the end of the day consumers don't think about Best Buy or Samsung. They're human beings. They don't dissect the buying process in their heads. They're simply going to a big box retailer to to buy a high definition TV.
TWICE: Is there an archetypal Samsung customer?
Cook: At a high level we're going after what we call the "high lifestyle seeker." Those are people that appreciate the value that we add in all of our products. Our goal is to be an upper tier brand, but not necessarily at the highest price. We deliver value, and we hope that consumer will see that value. It's aspirational value.
But we go after everybody, men, women. My 11-year-old son and 14-year-old daughter are Samsung consumers. We compete in so many CE spaces that I could spend an hour answering your question. The real answer is it depends on the product; the retailer; and what we're trying to do. We will have micro-segmentation.
TWICE: Will Samsung continue to pursue "big event" marketing programs like its Four Seasons of Hope and NFL efforts?
Cook: Absolutely. We have a very strong relationship with the NFL. In fact [sales and marketing executive VP] Tim Baxter and I are going to talk with their chief marketing officer in several weeks in order to figure out how we take it up to the next level.
The Four Seasons of Hope has also been highly successful and it's been building momentum. It got to the $10 million-mark this year, with $2.5 million raised this past year alone. We made a commitment to Joe Torre as he moves out to Los Angeles with the Dodgers to help him establish himself in the community in Southern California.
We are also looking at other opportunities. Samsung deeply believes at the global and a local level to do the right thing in the communities that we live and work in.
TWICE: Any plans to utilize the Internet?
Cook: The Internet is the enabler for having a richer dialogue with consumers and allowing them to participate in dialogue with us. It's not one-way, it's two-way. We are going to be investing a lot of time, resources and focus on being a leader in the Internet space.
TWICE: Where do you see Samsung in five years?
Cook: Today Samsung is the highest-ranking consumer electronics brand in the world. We are No. 20 on the BusinessWeek-Interbrand poll. Coca-Cola, ironically, is No. 1. I set the challenge with our team that within a definable period of time — I didn't put a specific date against it — my goal is to be No. 10. We are going to continue to ascend, in rapid order, by doing an even higher level of not only brand marketing, but integration into the business system.
What got Samsung to its present state are keepers. We're going to continue to do more of what got us here.What we're doing with all of the strategic hires from the consumer packaged goods space is adding layers. We're going to get closer to our consumer, we're going to understand their world, and that's how we're going to win.