Samsung: Innovation Sells in a Recession

The budding, 3D light-emitting diode (LED) TV category is about to get a blast of advertising from Samsung. The leading TV maker this week unveiled its largest marketing campaign for the launch of new 3D LED television sets. (Rival Panasonic rolls out a similar product this week.) Samsung’s ads, by CHI & Partners, London, will run globally. They show a street team installing TVs in unexpected public places, and consumers, as a result, cherishing the depictions of real life as they’re captured on the screens. The U.S. version of the campaign, via Leo Burnett, kicked off with a spot called “Wonder,” during Sunday’s Academy Awards. It shows a family bringing home the “wonder” of 3D entertainment. Brandweek chatted with Samsung CMO Sue Shim, who explained why a downturn is actually a good time to launch pricey, but innovative products. (Samsung’s 3D LED TVs start at $1,700.)  Excerpts from that conversation are below.

Brandweek: Samsung is rolling out new, global ads as part of its launch for the new, 3D LED TV next week. What’s the general theme/gist of the ads?
Sue Shim:
The set up of the advertising is that [it takes place] within a day. The 3D LED TV is the first to market in a city, so the filming in that city [the global spots, by CHI, London, were shot in two locations: Buenos Aires and at Iguazu Falls] takes place from dawn to evening. [The crew] is setting up Samsung 3D LED TVs in unexpected locations—on a tree or floor or the street—and they are showing how those 3D dimensions [capture] a real, life-like picture quality that can enrich people’s lives. Otherwise, it’s just a mundane life for consumers. We wanted to capture that wonder and excitement for the consumer.

BW: What kind of consumer are you targeting?
SS:
Our target consumer is someone who is looking for entertainment and [they’re deeply] immersed in the TV experience. They are early adopters of new technologies and innovations, and they’re considered thought or opinion leaders among their peers. They are very vocal about what they like and know, and they [in turn] spread that [knowledge] to their family, friends and peers. They like this kind of innovative stuff.

BW: So, the Samsung 3D LED TV starts at an average retail price of $1699. Do you think consumers are willing to pay up for that kind of value—and quality—in a downturn?
SS:
When we launched [our LED TVs] in 2009, our internal people in management, competitors and industry analysts were concerned about the launch of new, high-end TVs during an economic downturn. What we learned was that during an economic downturn, consumers are more concerned about value, [i.e.] what they are getting by paying that much money to buy [a particular] brand or product. So, if the value meets the consumers’ wants and needs, they are willing to pay for it. Another [insight is], consumers tend to spend more time at home in an economic downturn, so they are spending more [money] on home entertainment devices and products than before. So, combining those two [factors], we had a huge success with our LED TVs last year, and we expect it to continue with the launch of our 3D LED TVs [this year].


BW: Any interesting focus group of consumer market research insights/findings you can share—and that went into the making of this new campaign?
SS:
[What we found was true of the U.S., and other markets as well, was that] more than 90 percent of consumers are aware of 3D, but only one-third of them actually experience it in the theater. When we offered them [the chance to] actually experience 3D via our TVs, a very high percentage of consumers were willing to buy and pay for it. Some of the consumers during our focus group interviews said 3D TVs will help them strengthen the family [bond]. Family members [nowadays] can watch TV anywhere—kids, teenagers watch it on their computers—but they can’t have a 3D TV everywhere in the house, so [this product] brings the family together.

And, 3D also offers a surprising, new experience for consumers. They’ve been talking about 3D for the last 10 years, but no other manufacturer can really realize consumers’ dreams of experiencing their [favorite] TV programs on TV. When we asked consumers what was the ultimate viewing experience they expected from their TV or home entertainment device, they said they want to see things like they are in reality. They want to see the real world or as close to the real world [as they can get]. 3D is bringing that  [experience] closer to reality.

BW: How do you expect Samsung—and competitors’—launches to change the TV industry as we know it?
SS:
We are changing the TV industry completely. It is kind of like the transformation we brought to the TV industry in going from black and white to color. [Now], we’re changing the home entertainment experience from 2-D to 3D. That’s the kind of transformation we’re bringing to consumers, and we believe they will see the value of buying 3D LED TVs.

BW: How big of an opportunity is there in the 3D LED TV market?
SS:
We believe 3D will be the next big thing in the TV market. Everyone is entering the 3D market. But Samsung is the only manufacturer that offers the complete line of 3D solutions, including Blu-ray players and 3D glasses. This will change the consumer home entertainment experience quite substantially. [Our launch] will be followed by other competitors, but we’ll be a step ahead of them in terms of product performance and technologies and offerings like content, so our partnership with DreamWorks, [for instance], will continue.

BW: How do you think this will change the way the movie and television industry interact with each other?
SS:
There will be more collaborative partnerships between manufacturers like Samsung and movie studios. For the movie industry, the popularity of 3D will be a new, emerging business opportunity for them in [terms of the] current cinema and theater [landscape]. Movie studies have found it to be a new source of business for them, and partnerships with 3D manufacturers like Samsung will add value to those businesses. So, it’s a win-win for both of us.