Market Segmentation Market segmentat ion is one of two general approaches to market ing; theother is massmarketing.

In the mass-marketing approach, businesses look att h e t o t a l m a r k e t a s t h o u g h a l l o f i t s p a r t s w e r e t h e s a m e a n d m a r k e t a c c o r d i n g l y. I n t he m a r k e t s e g m e n t a t io n a p p r o a c h, t h e t o t a l m a r k e t i s viewed as being made up of several smaller segments, each different fro mt h e o t h e r . T h i s a p p r o a c h e n a b l e s b u s i n e s s e s t o i d e n t i f y o n e o r m o r e appealing segments to which they can profit ably target their products andmarketing efforts.The Market-Segmentation process involves mult iple steps. The first is todefine the mar ket in ter ms of the pr oduct's end users and their
needs. Thes e c o n d i s t o d i v i d e t h e m a r k e t i n t o g r o u p s o n t h e b a s i s o f t h e i r characteristics and buying behaviors.Possible bases for dividing a total market are different for consumer marketsthan for industrial markets. The most common elements used to separatec o n s u m er ma r k e t s a r e d e m o g r a p h i c f a c t o r s , c h a r a c t er i s t i c s , g e o g r a p h i c lo cation, and perceived product benefits.Demographic Segmentation involves dividing the mar ket on the basis of statistical differ ences in personal characteristics, such as age, gender, race,income, life stage, occupation, and education level. Clothing manufacturers,for example, segment on the basis of age groups such as teenagers, youngadults, and mature adults. Jewelers use gender to divide markets. Cosmeticsand hair care companies may use race as a factor; home builders, life stage; professional periodicals, occupation; and so on. Psychograp hic S egmentat ion is bas ed on tra its, att itu des, int er ests, or lifestyles of potential customer groups. Companies marketing new products,for instance, seek to identify customer groups that are positively disposed tonew ideas. Firms marketing environmentally friendly products would singleo u t s e g m e n t s w i t h e n v i r o n m e n t a l c o n c er n s . S o m e f i n a n c i a l i n s t i t u t i o n s atte mpt to isolate and tap into gr oups with a strong inter est in supportingt h e i r c o l l e g e , f a v o r i t e s p o r t s t ea m , o r p r o f e s s i o n a l o r g a n i z a t i o n t h r o u g h logged cr edit cards. Similarly, marketers of low-fat or low-calorie productstry to identify and match their products with portions of the market that arehealth-or weight-conscious.Geographic Segmentation entails dividing the market on the basis of where people live. Divisions may be in ter ms of neighbor hoods, cities, counties,s t a t es , r e g i o n s , o r e v e n c o u n t r i e s . C o n s i d er a t i o n s r e l a t e d t o g e o g r a p h i c grouping may include the makeup of the areas, that is, urban, suburban, or rural; size of the area; climate; or population. For example, manufacturers of snow-r emoval equipment focus on identifying potential user segments ina r e a s o f h e a v y s n o w a c c u m u l a t i o n . B e c a u s e m a n y r e t a i l c h a i n s a r e dependent on high-volume traffic, they search for, and will only locate in,areas with a certain number of people per square mile.Product Benefit Segmentation is based on the perceived value or advantageconsumers receive from a good or service over alter natives. Thus, marketsc a n b e p a r t i t i o n e d i n t er m s o f t h e q u a l i t y , p er f o r ma n c e , i m a g e, s er v i c e, s p e c i a l f e a t u r es , o r o t h er b e n e f i t s p r o s p e c t i v e c o n s u m e r s s e e k . A w i d e s pectrum of businessesfrom camera to Automobile Marketersr ely ont h i s t y p e o f

s e g m e n t a t i o n t o ma t c h u p w i t h c u s t o m e r s . M a n y c o m p a n i es even market similar products of different grades or different accompanyingservices to different groups on the basis of productbenefit preference.Factors used to segment industrial markets are grouped along different linesthan those used for consumer markets. Some are very differ ent; some aresimilar. Industrial mar kets are often divided on the basis of or ganizationalvariables, such as type of business, company size, geographic location, or technological base. In other instances, they are segmented along operationallines such as products made or sold, related processes used, volume used, or e n d u s er a p p l i c a t i o n s . I n s t i l l o t h er i n s t a n c es , d i f f er e n c e s i n p u r c h a s e p r a c t i c e s p r o v i d e t h e s e g m e n t a t i o n b a s e . T h e s e d i f f e r e n c e s i n c l u d e centralized versus decentralized purchasing; policy regarding number of v e n d o r s ; b u y er s e l l er r e l a t i o n s h i p s ; a n d s i m i l a r i t y o f q u a l i t y , s er v i c e , o r availability needs.Although demographic, geographic, and organizational differ ences enablemarketers to narrow their opportunities, they rarely provide enough specificinformation to make a decision on dividing the market. Psychographic data,o p e r a t i o n a l l i n e s , a n d , i n p a r t i c u l a r , p e r c e i v e d c o n s u m e r b e n e f i t s a n d pr eferr ed business practices are better at pinpointing buyer groupingsbutthey must be considered against the broader background. Thus, the key is togather information on and consider all segmentation bases before making adecision.Once potential market segments are identified, the third step in the process isto reduce the pool to those that are (1) large enough to be worth pursuing,(2) potentially profitable, (3) reachable, and (4) likely to be responsive. Thefourth step is to zero in on one or more segments that are the best targets for the company's product(s) or capacity to expand. After the selection is made,t h e b u s i n e s s c a n t h e n d e s i g n a s ep a r a t e ma r k e t i n g m i x f o r ea c h m a r k e t segment to be targeted.Adopting a market-segmentation approach can benefit a company in severals p e c i f i c a r e a s . F i r s t , i t c a n g i v e c u s t o m e r d r i v e n d i r e c t i o n t o t h e management of current products. Second, it can result in mor e efficient useo f ma r k e t i n g r es o u r c e s . T h i r d , i t c a n h e l p i d e n t i f y n e w o p p o r t u n i t i e s f o r growT h i r d , i t c a n h e l p i d e n t i f y n e w o p p o r t u n i t i e s f o r growth and expansion. At the same time, it can bring a company the br oad benefit of a competitive advantage.A company cannot serve all customers in a broad market such as computersor soft dr inks. The customers are too numer ous and diverse in their buyingrequirements. A company needs to identify the market segments it can servee f f e c t i v e l y . H e r e w e w i l l e x a m i n e l e v e l s o f s e g m e n t a t i o n , p a t t e r n s o f segmentation, market segment procedur es, bases for segmenting consumer and business mar kets, and requir ements for effective segmentation. Manyc o m p a n i e s a r e e m b r a c i n g t a r g e t ma r k e t i n g . H er e s e l l e r s d i s t i n g u i s h t h e maj or market segments, target one or mor e of these segments, and develop products and marketing programs tailored to each instead of scattering.Market segmentation is the process of identifying key gr oups or segmentswithin the general market that share specific characteristics and consumer habits. Once the mar ket is broken into segments, companies can developa d v er t i s i n g p r o g r a m s f o r ea c h s e g m e n t , f o c u s a d v er t i s i n g o n o n e o r t w o segments or niches, or develop new products to appeal to one or more of thesegments. Considerations for Market Segmentation

T o i d e n t i f y s e g m e n t s , ma r k e t er s e x a m i n e c o n s u m er s ' i n t er es t s , t a s t es , prefer ence s, and socioeconomic characteristics in or der to deter mine their patterns of consumption and how they will respond to various mar ketings t r a t e g i e s . T h e p r i m a r y i n f o r m a t i o n m a r k e t e r s s e e k i s w h y c o n s u m e r s purchase specific products or services but not others. Catalog retailers andd i r e c t marketing firms make up some of the key users of markets egmentation, although many other kinds of companies and organizationsuse this technique. To whom do you sell ando whom do you sell andhhow do you promote sales?ow do you promote sales? Market segmentation, however, works effectively only for certain kinds of Market segmentation, however, works effectively only for certain kinds of products and services. products and services.First, to determine whether to segment a market, marketers must find out if First, to deter mine whether to segment a market, marketers must find out if the market can be identified and measured, which entails determining whichthe market can be identified and measured, which entails determining which consumers belong to specific market segments.consumers belong to specific market segments.Second, marketers must determine if the segments are large enough to beSecond, marketers must deter mine if the segments are large enough to be profitable. While mar keters can easily divide the total market into smaller profitable. While mar keters can easily divide the total market into smaller groups, these groups might be so small that they do not justify the expensesgroups, these groups might be so small that they do not justify the expenses associated with market segmentation.associated with market segmentation.T h i r d , m a r k e t e r s m u s t b e a b l e t o r e a c h t h e s e g m e n t s t h rough their Third, marketers must be able to reach the segment s t h r o u g h t h e i r advertising. If the members of a particular segment do not share interest in aadvertising. If the members of a particular segment do not share interest in a common magazine or television show, for example, then marketers have nocommon magazine or television show, for example, then marketers have no way of reaching the segment and so the segment is superfluous.way of reaching the segment and so the segment is superfluous.

MMethodethodof of SSegmentationegmentation A company also may opt to target just one segment of the mar ket,e m p l o y i n g t h e m a r k e t s e g m e n t a t i o n m e t h o d o f c o n c e n t r a t i o n . A f t e r considering various segmentation bases and conducting research, a companymight find that its competitors are not r eaching specific segments and decideto target this segment or niche exclusively. A computer maker, for instance,could concentrate solely on the homeuser segment of the market and ignor ethe needs of the other segments. To do so, the computer maker would have too f f er p r o d u c t s t h a t m e e t h o m e - u s er n e e d s a t p r i c e s t h es e c o n s u m er s c o u l d afford. Since concentrated marketing costs less than differentiated marketing,it may appeal to small businesses in particular.After choosing a method of market segmentation, marketers must integratethe method into an overall marketing strategy. The mar keting strategy willtry to make the target product or service appeal to the target segment throughan advertising campaign developed based on segmentation information

sucha s a g e, g e n d er , o r l o c a t i o n . M a r k e t er s a l s o c o n s i d er w h a t a c o m p a n y ' s strateg ic position in a market ise.g., if it is a computer supplier to homeu s er s o r b u s i n e s s e s a n d c r ea t e s a ma r k et i n g p r o g r a m t h a t w i l l h e l p a c o m p a n y a c h i e v e s o r ma i n t a i n this p os it ion. I f t h e s e g m e n t i s p r o p er l y d e f i n e d f o r a s p e c i f i c p r o d u c t o r s er v i c e, t h e n d e v e l o p i n g p r o m o t i o n a l strategies and r eaching the target segment should be relatively easy. Theinfor mation used to help cr eate the mar ket segments should help marketerschoose among promotional techniques (e.g., dir ect marketing, advertising, p u b l i c i t y , a n d s a l e s p r o m o t i o n ) , p r i c i n g s t r a t e g i e s , a n d d i s t r ibution

Conclusion From the a bove pr oject I ha ve come to this conclusion that Nokia h a s implemented various segmentation strategies for its products on a largescale & becoming no.1 leader in the world of mobile phones. Nokias e g m e n t s i t s m a r k e t a c c o r d i n g t o v a r i o u s v a r i a b l e s . T h e m a i n segmentation is done on the basis of price. As per my opinion Nokiahad introduced various schemes to attract people & gain more goodwillinto mar ket. I would like to conclude that Nokia had been launchingvarious new products & strategies throughout the year but still it is theno.1 brand leader in mobile phones. Many people around the globe are purchasing Nokia phones, as they ar e ver y cheap, good & efficient too p e r a t e . N o k i a h a v e u s e d b e t t e r & e f f i c i e n t m a r k e t s e g m e n t a t i o n s t r a t e g i e s t o ma r k e t i t s p r o d u c t s a c c o r d i n g t o v a r i o u s s e g m e n t s o f customers in the mar ket. Nokia as such has used all moder n & goodtechniques to tackle problems of customers in market. Customer care &feedback is also given mor e importance. Better, efficient & advancedt e c h n i q u es a r e u s e d t o i n c r ea s e t h e s a l e s o f p r o d u c t . A l s o N o k i a i s largest manufacturer of mobile phones in India & also the no.1 leader in it. Various segmentation strategies are being enrolled into the marketto increase the sales of the products. New models & their strategies are being well utilized to enhance the product.

By most accounts, India is among the world's fastest-growing markets for mobile phones. The country has some 170 million subscribers and adds 6 million to 7 million more each month. (China, in contrast, adds 5 million subscribers, and the U.S. 2 million subscribers a month.) Recognizing this potential, several global telecom giants jumped into the fray when the Indian government first opened up the country's telecom market to private enterprise in 1994. Among them, one company -- Finland-based Nokia -- forged ahead of rivals and today commands a 58% market share for mobile phones (also called "handsets"). In specific segments, such as GSM telephony, Nokia's market share in India is as high as 70%. (GSM, which stands for Global System for Mobile, is the world's most popular standard for mobile communications.) How did Nokia take the lead in the Indian mobile phone market, ahead of companies such as Ericsson, Motorola, LG and Samsung? According to company executives and industry

experts, Nokia's strategy combined focusing on the mobile phone market, establishing crucial distribution partnerships, making early investments in manufacturing and brandbuilding, and developing innovative product features -- such as mobile phones that could double as flashlights. Ravi Bapna, professor of information systems at the Indian School of Business in Hyderabad, says, "As far as Nokia's India strategy is concerned, the numbers speak for themselves. The company is a key cog in India's wireless value chain, and it has used India as its emerging market lab." The Power of Focus D. Shivakumar, Nokia India's vice president and country manager, believes that focus played a key role in the company's growth in India. "If you look at the [mobile phone] landscape in 1995, anybody could have succeeded if they had done the same things as Nokia did," he says. "But all the other companies had something else to focus on, some other business. Nokia was completely focused on mobile phones; others had consumer electronics, home appliances, etc." Nokia's focus was not just on handsets, of course. The mobile infrastructure business -- then part of Nokia India -- was equally important. But, as of April 1, 2007, Nokia's joint venture with Siemens for mobile infrastructure has become an independent entity. Thus, Nokia India has become even more sharply focused. Being ahead of the curve was another component of Nokia's strategy. "We invested before everybody else -- in the brand, in people, in distribution," says Shivakumar. Adds Pankaj Mahendroo, president of the Indian Cellular Association: "Nokia invested in each vertical of the handset ecosystem -- manufacturing, distribution and design R&D." Nokia has invested more than $1 billion in India so far, and company headquarters at Helsinki has repeatedly said that more funds will be made available if required. The Indian company had revenues of more than $3.5 billion in 2006, which means there is also money to be reinvested. (The company does not disclose its profit numbers.) The Distribution Edge Investment in people is difficult to judge; every company claims to have the best talent in the business. But when it comes to distribution, Nokia's lead is clear. Today, India has some 95,000 outlets that sell mobile phones. "In 50,000 of them -- and that's a conservative estimate -- only one brand is available, Nokia," says Shivakumar. Nokia started distributing its phones through a partnership with HCL (formerly Hindustan Computers Ltd.), which had already built an extensive network for its own products. Recently, Nokia has decided to supplement that with its own distribution efforts. "Both companies realized that there was a tremendous growth opportunity and it was best that we utilized the resources of both organizations in an optimum manner," says Nokia India director of sales Sunil Dutt. "We decided that we would address some markets jointly, and that we would individually address some of the other markets." While Dutt does not spell out how the two partners will divide the markets, some clues exist in the way demand is shaping up. In the cities where the market is maturing, buyers are looking at more sophisticated mobile phones, such as Nokia's E-series phones (which serve business users) and the N-series (which have multimedia features). In rural India -- which constitutes 70% of the population -- affordability is an issue. So there is a different range for this constituency.

The price points sometimes dictate the type of outlet. "As the [telecom] operator footprint expands into different markets, all kinds of retail outlets get into selling mobile phones and airtime connections," says Dutt. "People who have been selling consumer electronics, STD booth owners and even cloth merchants get into this business." A stationery store stocks mobiles in a corner; a mom-and-pop grocery store moves beyond rice and lentils. "Then there are people with existing businesses who decide to set up a separate shop only for mobile phones," he continues. "And why do they feel the need to set up a different outlet? In this business, customer engagement requires a completely different approach. Even the retail outlets realize this and [have started] separating the two businesses." Dutt notes that in the mature urban markets, "such as the metros and Tier I towns where mobility has been around for a few years, customer expectations are more evolved, and are continuously evolving. Our task here is to provide our people with relevant competency and skills sets." Nokia has begun to set up concept stores -- seven so far -- in Indian cities. "At our concept stores, we have tried to bring to life all the experiences that we offer at Nokia experiential zones across the world," he adds. Investment in Manufacturing The other big investment area that has set Nokia apart from other telecom firms is manufacturing facilities and R&D. Nokia has several R&D centers and labs in India. More importantly, it established a $150 million handset manufacturing facility in Chennai in 2005. The total production at this unit has crossed 25 million handsets. "Some 30% of our production is being exported to neighboring countries," says Sachin Saxena, Nokia India director of operations in charge of the factory. Other companies, such as Motorola, LG and Samsung, have also lined up similar investments or are in the process of setting up manufacturing units, but Nokia has had a clear head start. Also, the Chennai factory is devoted to handsets, whereas other companies are planning to make a whole range of consumer electronics products. "Domestic manufacturing has worked to Nokia's advantage," says Ravinder Zutshi, deputy managing director, Samsung India Electronics. "Samsung India is looking at making its Chennai facility a global hub for its consumer electronics products." Industry analysts note that Nokia's strategy is potentially risky. When the going is good -as it is now -- the company can do well. But Samsung's approach is more flexible, these analysts note. If demand for mobile phones were to slump, Samsung could switch its manufacturing lines to other products. In contrast, Nokia India's focus on mobile phones mirrors the priorities of its parent company. Nokia traditionally was in a whole range of businesses -- from toilet paper to power. But in 1993, CEO Jorma Ollila decided to sell off everything else and concentrate on mobile telephony. Building the Brand Another crucial aspect of Nokia's investment strategy focused on building its brand. Here, the company ran into a problem. The Nokia range available in India extends from Rs 1,499 ($37) at the lower end to Rs 45,000 ($1,125) at the high end. Marketing theory says a brand cannot be all things to all people. This is the reason that Hindustan Unilever, with quality built around its brand, refused to match Nirma, which came out with a cheap detergent. This is also why Eveready, the battery manufacturer, refused to lower prices when faced with a Chinese challenger in the dry cell market.

But Nokia has a problem promoting other brands under its corporate umbrella. "Unlike the FMCG (fast-moving consumer goods) market -- where the product lifecycle is at least 10 and sometimes 50-100 years -- models have a lifespan of 15-24 months here," says Devinder Kishore, Nokia India's director of marketing. With such a lifecycle, promoting various models would mean watching money go down the drain in a couple of years. Instead, Nokia is promoting platforms -- music, for instance. With this approach, one model can replace another while the branding remains the same, or is extended slightly with the E series and N series. "Nokia has done well to focus on the 'mother' brand rather than on 'another' brand," says Jagdeep Kapoor, chairman and managing director of Samsika Marketing Consultants. Kapoor, who has written several books on brand management, says that Nokia has understood the Indian market by straddling all segments: the high, the middle and the low end. "The company has created a ladder for consumers to climb from the low end to the middle end to the high end, while being fully assured that they will be with the mother brand Nokia." Kapoor views the Nokia brand in terms of his proprietary "REAPS" model, which takes into account five needs -- rational, emotional, aspirational, physical and spiritual -- of the Indian consumer. "Nokia as a brand has been able to address all the five needs to various degrees at various stages," he says. "The rational need of quality versus price has been met across price segments with options. The emotional need of being able to keep in touch with near and dear ones during times of joy and sorrow is being adequately fulfilled. The aspirational need with the new models and features and the look-good approach has helped the brand become a sought-after, must-have brand. The physical need has been taken care of through size and comfort. And, finally, the spiritual need has been met through (local) languages and people --whether they are 18 or 80 -- being able to greet one another via SMS [text messages] during religious festivals." ISB's Bapna offers a prescription for Nokia. "Going forward with the premise that the mobile infrastructure will serve as India's information infrastructure -- given the lack of substitute physical and digital infrastructure -- I would encourage Nokia to take a more active role in nurturing content and application-creation communities that bring a range of services to all layers of the population," he says. "It's in [Nokia's] own interest to do so." Products for India The Nokia story in India has not been about grafting a model that has worked abroad. In fact some of its models -- the handsets, not the strategies -- are unique to India. Consider this example: It would probably be inconceivable to mobile phone users in the U.S. or Europe that their mobile phones should incorporate a flashlight, or torch. But in India -where large numbers of the rural population do not have electricity, and power cuts are commonplace even in the cities -- having a torch built into a mobile phone is a distinct and tangible benefit. The Nokia 1100, the first made-for-India phone, has been a runaway success. Manufactured at Chennai, it is also being exported. The 1100 incorporates a torch, an alarm clock and a radio. "Innovation is something which consumers reward in this market," says Shivakumar. Similar plans are in the works at Nokia's three India R&D labs, which employ 700 people. For obvious reasons, most of the activity is under wraps. Nokia is, however, willing to talk about the "shared" phone. This is, again, something that mobile phone users in affluent countries might find puzzling, but the concept is simple. For reasons of affordability, in rural areas a phone may be shared by several people. The models being launched to cater to this

need will have separate address books, individual billings and more. Will it work? People initially doubted the torch phone, too, but it became a popular product. Shivakumar offers some reasons to explain why he thinks the Indian market is different and needs out-of-the-box thinking. "Fundamental consumer differences exist between India and other countries," he says. "A cell phone is a huge style icon for the Indian masses: 62% of Indians buy a cell phone because of its looks. That is something that is not true anywhere else in the world. It's as huge a style statement as your watch, pen, cufflinks or bag. Hence, the brand matters quite a lot. "Second, it is a safety product for women in small towns, because with a cell phone you are in touch all the time; you're accessible. Next, it is a huge productivity vehicle. When somebody calls you, you do not need to take your bike out; you don't need to take your car out. You make a phone call and it's over. "It is also a driver of a lot of economic activity. If you go down the roads of Gurgaon and Delhi, you will find that lots of people have written their [mobile] phone numbers on the walls -- a plumber, an artisan, a carpenter, a tailor. I think the whole service sector has gotten a huge lift, thanks to this. This has killed the visiting card business. It is also the ultimate entertainment device. You have music on it now, in terms of radio and stored music. The day is not far when you will see movie clips and TV. One of our products has that, so that's TV on the go." An Expanding Market The Indian market for mobile phones, in addition to its base of 170 million subscribers, is also one of the most cost-effective in the world. Call rates in India are among the lowest anywhere -- making a mobile phone call costs two cents in India, compared with about four cents in China. The market also has tremendous growth potential. So far, most of the growth has been penetration-led, which means placing devices in consumers' hands. The bulk of the growth going forward will be replacement-led, where consumers come back for more. In India, consumers tend to change their phones faster than in most other places. And whenever they change their phone, 60% are willing to pay a higher price. Shivakumar offers examples of future services that might be delivered over cell phones. "The cell phone could be the future bank -- a full branch of the bank. You don't need 20 people, a security guard or a vault. This is a passbook plus bank rolled into one. It can be your payment system." Another possible use is navigation, where cell phones could be used to provide maps of an area where the user is based. Such services, whenever they are launched, could help Nokia keep going and growing in India.

Samsung

The

TOP

Brand

in

the

World

According to the global brand scoreboard of 2004 from Interbrand, Samsung, the Korean based electronics brand, has boosted its profile and being listed as 21st valuable brands in the world. Its brand value surged by 16% to 12.5 billion US dollars compared to the figure in 2003 which is 10.8 billion US dollar. (Simon, 2004) It becomes the worlds leading brand in electronics and digital industry. This achievement is closely related to its sponsorship strategies. Samsung associate its name to the TOP plan, which is The Olympic Partner plan. It is a plan which leads Samsung to be the top brand in the world. However, there are many other programs to support Samsungs sponsorship strategy. Without these strategies the TOP plan will not have such effectiveness and efficiency. Samsungs philosophy is devote our human resources and technology to create superior products and services, thereby contributing to a better global society. (www.samsung.com) Under this philosophy Samsung has adopted a sport-based strategy in building its brand. The multinational consumer electronics firm acknowledges the fundamental role played by sport and by the Olympic Games as a promoter of its brand. Vice president of corporate communication at Samsung, Il-Hyung Chang, rationalizes the important role of sport sponsorship by stating "sports sponsorship is a strategy that fits well within our operations at Samsung.its an integral part of our companys philosophy". Philip and David, 2003 Entering into the TOP plan propels Samsungs sponsorship to a new era. It has an opportunity to act on the same stage with the world top brand such as Coca Cola, IBM, and Visa, which greatly enhanced its brand image. The companys active and established role in the heart of the Olympic Movement has contributed to its brand value surge in recent years. Samsungs involvement with the Olympic movement began as a local sponsor for the Seoul 1988 Olympic Games. Then it became the TOP sponsor in the wireless telecommunications equipment category for the Nagano 1998 Olympic Winter Games, Sydney 2000 Olympic Games, Salt Lake 2002 Olympic Winter Games and Athens 2004 Olympic Games. This status as a global partner in the wireless telecommunications equipment category will be continuing in the Torino 2006 Olympic Winter Games and Beijing 2008 Olympic Games. Samsung have agreed to pay the huge amount for corporate sponsorship because they recognize the vital importance of sports marketing on their bottom line. The TOP plan helped Samsung increase its brand awareness and enhance market position considerably. Compared to the results of the survey held before the Sydney Olympic Games, the amount of consumers that became aware that Samsung Electronics was one of the 9 sponsors of the Games approximately tripled. Unaided awareness of Samsungs Olympic sponsorship was 6.0%, it placed 2nd after Coca Cola.

(www.samsung.com) Samsung want to accomplish two goals with all its sponsorship efforts. The first goal is to build brand awareness especially create higher level of awareness than its rival Sony. The effectiveness of Samsungs Sponsorship was shown at the ATHENS 2004 Olympic Games which had a positive impact on brand awareness, with an increase from 57% to 62%. (Samsung steps up Olympics marketing campaign, 2004) The second goal is to enhance the worldwide imagery and attitudes towards its brand. Samsung considered its commitment to the Olympic Movement is a key element in positioning and strategy. It contributes to the success of the Olympic Games and at the same time enhances Samsung brand image and its market position. Samsung ways. built its brand through sponsor Olympic Games in the following

Samsung mobilized the organization for brand building. Both the process and the result of a brand-building effort often have a key payoff internally to employees, as well as externally to consumers. Samsung sponsored ATHENS 2004 Olympic Torch Relay, which was the first truly journey of Olympic flame. 1,900 torchbearers were selected from over 40 countries including Samsungs employees. (www.sumsung.com) They received emotional benefits from pride in being associated with the sponsorship and have a direct link to the Olympic activities. Samsung provided an experience to the consumers. For example as a part of Samsungs brand presence program it set up Olympic Rendezvous @ Samsung, a 1,064 square meter entertainment complex, located within the Athens Olympic Sports Complex, which was a central gathering place for athletes, their families, and the spectators coming to the Games. The OR@S provided a wide range of activities. For instance consumers were provided with the opportunity to try out Samsungs revolutionary products for themselves. Fans are able to meet their national heroes, enjoy musical performances and special laser shows. During the Games Samsung has hosted a series of "National Days", which celebrate the many cultures of Olympic nations. In addition, OR@S provided free telephone and on-line services. Over 6,000 athletes from a huge number of the 202 competing countries have based themselves here and taken time out from the pressure of the Games to make contact with home. (Over 6,000 Olympic competitors make use of special facilities to contact loved ones, 2004). At the same time they are experiencing the convenience Samsung brought to them. Samsung used and technology. technology is more credible. technology during Olympic Games as a platform to demonstrate new products The most powerful way to introduce a new product and by publicity. It is not only cost-effective but also Samsung provided its latest wireless communications the Sydney 2000 Olympic Game. Focusing on the future

of wireless communications, Samsung launched futuristic products such as the mobile phone watch, the PDA-phone, the digital camera cum mobile phone, the MP3 mobile phone and the its latest model of 3G mobile phone. In addition, visitors are able to experience the future by experimenting with the various digital knick-knacks developed and on display by Samsung Electronics. Samsung boost its brand awareness at Olympic Games. Samsungs dedication in Olympic Games brings great success in elevating its brand awareness. Samsung's sponsorship of the Sydney Olympic Game in 2000 raised awareness of the brand by 5% to 16.2 %. The awareness rise leaded to the sales surge. The first year after the Sydney 2000 Olympic Games, sales of the telecommunications products have increased by 44%. Four years later in Athens, its brand awareness was raised to 62%. (Coca-cola and Samsung present the first international Athens 2004 Olympic Torch Relay, 2003) Develop brand association. The Olympic Games as the worlds biggest sports event requires enormous and sophisticated communication system. Samsung, an official sponsor in wireless communication equipment presented the Wireless Olympic Works (WOW), a communications system to support and guarantee the smooth and efficient running of the event. It also provided wireless communication devices to athletes, officials, media, staff and volunteers. Samsungs expertise in digital wireless communications equipment played a vital role in contributing to the successful operation of the Games. Besides the functional association, it enhanced its market leader image and revealed its status of a global organization through the prestigious Olympic Games. There is Samsungs sponsoring associated no doubt that Olympic sponsorship played an important role in brand building. However Samsung can not merely depend on Olympic Games to enhance its brand equity. It adopted many programs to support TOP plan.

Reposition of its products. In early 1990th Samsung was still perceived as a conservative manufacturer and always associated its brand with bargains. Samsung realized that low price is just a major means to compete in the lower-market whereas in upscale market technology and brand are competitive means. Samsung decided to penetrate the upscale market and gave up lower-market in order to exalt its brand image. It repositioned all series of its products such as mobile phone, consumer electronics and memory flash to upscale market. Correspond to Samsungs new position in the market it has relatively higher price in it category. To Samsung higher price would bring more profit and at the same time it is the better imply of good quality. The strategy of reposition helps Samsung starting to build its noblest image. Technology innovation. Samsung recognized that digital is the future

developing aspect of consumer electronics. They regard the digital age as having both incalculable potential and risks. It's a time of intense competition-fortunes can be made or lost in the blink of an eye. (Samsung group timeline and history, 2005) Samsung took this challenge as an opportunity. They switched their core competitive power from mass manufacture to its own brand which based on digital technology. It is well positioned as one of the world's recognized leaders in digital technology and eventually become the world top innovative company in technology. It starts to provide consumers with innovative and cutting edge products and rapidly become a huge player in electronics field competing toe to toe with another magnate Sony. Samsung launched an industry design revolution in order to get rid of its image of imitator. It employed world top designers to expand their thought and keep track on the world highest level. It achieved most of the Award of American Industry Design which is the most important award in industry design area on the global basis. Its brand was recognized by the consumers and specialists. The technology breakthroughs enhanced Samsungs brand image of young, fashionable and strong function. Demonstration of US market. Us market has a strong demonstration effect on the global market due to its leading status. To some extent, the brands should succeed in US market in order to become the top brand worldwide. Therefore Samsung regarded US market as its most important market and put great efforts on marketing in US market. SAMSUNG took part in the Salt Lake 2002 Olympic Winter Games in USA as the worldwide partner in the wireless telecommunications equipment category. Samsung carried out various advance public relation activities and programs centered on the PR pavilion to promote its image of a fist-class corporation. During the game consumers were provided with the opportunity to try out Samsungs revolutionary products for themselves. Samsung spent considerable funds to sponsor this winter game in USA. After few years management, Samsungs brand disengaged bargains and was regarded as high-class products by the American consumers. Samsungs success in US market plays an important role in its success in other markets. To summarize, the key to a successful sponsorship depends not only on the creative and crucial sponsorship itself but also rely on the supporting strategies. Samsung successfully integrated its product strategy, technology strategy and branding strategy into the TOP plan. The TOP plan provides Samsung a road to be the top brands in the world. Without the supporting strategies the TOP plan can not endow Samsungs brand with internal and rich meaning. The plan comprises huge risk because if the consumers attracted by the TOP plan perceive it as an ordinary product Samsungs brand would be damaged. Samsung has successfully and fully utilize the benefits of the Sponsorship and was rewarded for its commitment to Olympic Games and other sports activities.

The

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With the prevalence and development of internet, the Web reveals its important role in marketing communication. According to a global web-based survey by Interbrand, the Google brand had the most impact on people's lives in 2002. It beat established brands such as Coke and Apple. (Gerry McGovern, 2003) This reveals how Web builds you brands differently. In the coming digital age, the strong brands in this era will be those that utilize web as a building tool. Web became a It has unique advertising. new communication channel characteristics compared to between the brands most and consumers. traditional media

The web is interactive and involving. It provides an innovative way to build brand awareness. For example, when Visa organization plan to set up their long term branding tactic of focusing on young people, they chose MSN Site which is the world's most popular destination on the Web with enormous young users, as the hub of its promotional contest. It chose MSN to build and host the online hub for the promotional competition designed to build brand awareness of Ideas Happen among young consumers. The Ideas Happen campaign allows consumers ages 18 to 29 to submit ideas for businesses and other ventures and vote on the best submissions via a custom-designed site created by MSN. Over three months, more than 5 million unique users visited the site MSN created for the contest. The Ideas Happen campaign is an incredible example of how immediate and interactive of the online medium to make big results happen online. (MSN Again to Make Ideas Happen With Young Consumers, 2004) The campaign boosts Visa's image with target market. In addition to the increase in Visa's brand awareness among the 5 million unique users who visited the contest site, the heavy traffic helped build Visa's image among young adults who are still forging lifelong allegiances to consumer brands. According to polling conducted by market research agency Millward Brown, perceptions of Visa improved markedly after the Ideas Happen campaign. The number who deem Visa the best credit card overall increased by 13 percent, while those who agreed that Visa offers unique and different features jumped by 9 percent. In addition, 8 percent more of those polled said they consider Visa the most innovative and forward-thinking credit card company. (MSN Again to Make Ideas Happen With Young Consumers, 2004) Ideas Happen is more effective in reaching our target audience due to MSN. Teaming up with MSN has allowed us to realize the potential of online marketing and allowed MSN to stretch its own limits in terms of interactivity and engaging young consumers The can take web offers current, rich information. manage their Visa card account online. customers directly to their Visa On The card Visas website links on its issuer, which customers page can maintains

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Personalization. When customers enter Visas website they can select relevant content by choosing from the menu. There are three categories on Visa website which is personal, small business and merchants, corporate and government. People coming to it website with different purposes can simply choose corresponding category and go directly into that area to get the information their need. There is a calculator program in the website to help customers to plan their personal budget on Visas website. Moreover customers can order different information of discounts and financial tips through email on the personal basis. With these distinctive characteristics website can be a key part of a brand building program. It serves as a fantastic vehicle for distributing information, providing experiences, leveraging other brand building programs. It affects brand building from the following three aspects. Web can stretch the continuity and depth of the single sale channel, consequently expanding existing customers and increasing potential customers. Furthermore it can be taken as a market attempt, helping marketers to leverage marketing promotion programs in other medium. If use properly, website could effectively impel its offline products. For example there was a successful cooperation between Pepsi and Yahoo. Consumers could collect the number on the caps of Pepsi and Mountain Dew and change to credits on the websites of the two drinks. The credit can be used to exchange prizes or as cash for purchase and auction on Yahoo website. This campaign attracted 350 million people to anticipate. Pepsi increased it sale by 5% while the industry has little growth. (Lili, 2003) Pepsi did one similar attempt before without the help of web but failed eventually. Moreover, Pepsi can interpret the consumer behaviors through analysis of the data collected in the campaign and work out the relevant strategy. Website can improve the shopping experiences accordingly enhance the brand equity. On the website of Co-op bookstore, consumers can search the books they want, preview the abstracts and check whether they are available. Other information is provided to the consumers like breakdown of every shop throughout Australia. In the Co-op shop or at home consumers can order or reserve a book through the on-line bookstore. The interaction between online and offline greatly enrich the shopping experiences. Web as will helps to differentiate brand. Product differentiation was regarded magic weapon of powerful brand. Without the differentiation brand reduced to product, consumers can only choose products from

a be

the prices. New brand with high differentiation are usually popular although they do not have high brand prestige. On the contrast high prestige brand with little differentiation will be forgotten gradually by consumers. When product or services enter into the maturity stage, they will reveal commonness and hard to be differentiated. The typical way to be differentiated at that stage is adding new products or services. For example, the customers of FedEx can accurately locate their parcels via its website. This service was even extended to the PDA users. The additional and distinctive service help FedEx enhanced the service quality and relationship between brand and customers. Web provides a platform for the communication of programs in the companys overall brand-building strategy. Web could improve companys brand marketing and sales efforts from internal as well as external. Internally, web offer a special site that every brand-building efforts emerge there. It will help the management to leverage each brand-building project to fit the overall strategy and redress the deviation in time. Externally, a well-designed website could connect every distinct part of business. The website will integrate them to be a continued and correlative means of brand description. There are brand-building. A clear concept Companies elements identities several factors will contribute to the success of the web

brand and should onto need

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brand process. brand brand brand. growing attention should is in which will success.

Integration of web in whole brand-building strategy. The importance of web in building brand attracts more and more of companys management. To use web more effectively company integrate web into its whole strategy and make sure it conformity with other brand-building strategies. Companies leverage their resources between brand-building strategies achieve greater

Strategic alliance with other website or brand. Sometimes web allies can give your brand extraordinary success. Especially the alliance between powerful brands will make the cooperation more effective and cost-efficient. In the previous example Pepsi achieve great growth of sales in its cooperation with Yahoo. Yahoo brought Pepsis brand in front of large numbers of people which Pepsi can not access and the hit rate of Yahoo also surged during that period. Visa card attracted its target market of young people by allying MSN to offer MSN Titanium Visa Card. More and more brands become eager to develop alliances through which they benefit mutually and beat their competitors.

Loyalty .On the Web, brand loyalty is rooted in providing customers with an outstanding experience. (Gerry McGovern, 2003) To encourage customers visiting website regularly, websites are trying to build their loyalty through different ways. For example, commerce sites can offer a great selection, good prices, and a simple purchasing process while information sites can offer rich, relevant information in a format that is easy to read. With the help of outstanding experience provided by the websites companies draw their customers back again and again. In additional, companies can use email to offer their customers with opportunities or information which is tailored to their needs. For example a membership registration is provided on most websites. Then you can get more customized services by becoming a member of websites. Websites are building long-term relationship between customers and themselves. This relationship is essentially the loyalty. Websites will benefit from the loyalty their customers have, at the same time customers get their distinct needs and interests more satisfied by showing their loyalty. The important role of web in that had successfully built their leverage their resources to build should think of building their convenient alternative to consumers. their online editions in order providing huge exposure for brands. will achieve Brand architecture building brands suggests that companies brand offline should make sure to their brands on Web. Retail stores web-based shopping to provide a Magazines should start to device to attract more readers. Web is The brands which use them wisely tremendous advantage. art of L'Oreal

With the growing globalization of markets and competition, the brand architecture became a key component in international firms brand building strategy. It provides a framework to leverage strong brands into other markets, assimilate acquired brands, and rationalize the firm's international branding strategy. The key element contributes to a successful brand-building strategy is a harmonious and consistent brand architecture across countries and product lines. (Susan, Samuel and Edwin, 1999) L'Oreal, the world's leading cosmetics companies is an apotheosis in brand architecture. It managed very well of its wide range of products and many of them are the world's biggest beauty products. L'Oreal was the only company in its industry continually achieves a double-digit profit for 18 years. Moreover, it is a genuine international company which has operations in more than 130 countries in the world and over 80% of group sales are generated outside France. www.adbrands.net. The LOreal is known for its diverse brand house which includes brands like L'Oral Paris, Maybelline, Garnier, Soft Sheen Carson, Matrix, Redken, L'Oral Professional, Vichy, Lancme, Helena Rubinstein, Biotherm, Shu Uemura, Armani, Cacharel, Ralph Lauren and so on.

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luxury products division offers consumers top range of products Lancme, Helena Rubinstein, Biotherm, Shu Uemura and Kiehls. are premium products known for their innovation, performance and Some of the worlds top perfume brand like Giorgio Armani, Lauren was also included in this division. The distribution of these brands mainly through department stores, perfumeries, retail outlets, and the brands own boutiques. Customers will personalized advice at the point of sale, enabling them to the products best suited to their needs. (www.loreal.com)

The professional products division is designed to serve hairdressers worldwide. They provide products to meet the requirements of salon professionals salon customers with a wide range of innovative, high-performance products. The professional products division of LOreal is made up of four different brands: L'Oreal Professionnel, Krastase, Redken 5th Avenue NYC and Matrix. The consumer products high technology products division covered haircare, five major international New York, Softsheen.Carson are distributed In addition, LOreal care, sun care, includes three brands in pharmacies and proven safety and and division is dedicated to offering consumers its at competitive prices. The brands in this skincare, make-up and perfume products. The brands are L'Oreal Paris, Garnier, Maybelline and Le Club des Crateurs de Beaut. They through mass-market retailing channels. active cosmetics department offering skin and make-up products. The departments Roche Posay and innov. They are sold retailers. These products offer consumers supported by advice from pharmacists dermatologists.

has the hair care Vichy, La specialist effectiveness

L'Oreal used different product division to help it segment the market and form its band house. Brand architecture is the vehicle by which the brand team functions as a unit to create synergy, clarity and leverage. (Aaker and Joachimsthaler, 2002) We can start to learn the important role of brand architecture in companies brand building from the following aspects in L'Oreals example. Implement differentia of product and strengthen brand recognition. The consequence of differentia strategy of L'Oreal is that consumers from different income level or education background can find the product which is suitable to their own culture and taste. L'Oreal also focuses on continually strengthening the meanings of its brands and fully utilizes the advantages which are rooted from brand recognition. L'Oreal established very clear identity for each of its products. Each brand has its own image. For example, customers

associated Lancme with the image of stylish combination of elegance, charm and daring. Helena Rubinstein was perceived as a pioneer in cosmetic industry which provides cutting-edge science to the art of femininity and glamour. (www.loreal.com) It associates with high-performance and luxury as well. Its underlying brand Garnier represents natural beauty. Each brand has its unique symbol which creates a close relationship to its target market. Distribution based on brand differentia. L'Oreal uses different distribution channels according to the brand position in the market. The mass brand Maybelline promote its brand mainly through TV advertising and product prolocutor. La Roche-Posay, a brand positioned at solving skincare problem, is distributed by dermatologists, specialists of skincare and professional beauty salon. L'Oreal Paris relies on the public praise among professional cosmetic consultant. L'Oreal embodied culture flexibility. Many star brands in L'Oreals brand house are from different culture, but their original culture did not vanish because of being managed by a French company. When a lot of companies are trying to integrate different cultures, on the contrary L'Oreal tends to develop multi-culture in its underlying brands. This strategy proved to be very successful in reality and even played a key role in L'Oreals success. The most representative example is Maybelline New York. L'Oreal developed Maybellines brand culture instead of upsetting it after its acquisition of Maybelline. The sales figure dramatically rose after the acquisition and Maybelline product enter into more than 90 countries. Maybelline became a stylish global brand for all women all around the world from a merely regional brand. L'Oreal provides architecture. Every specialty of its brand a brands own platform target brand. for at At the the a brands under specific market and same time fit into its keep the brand the overall pyramid.

L'Oreals innovations always start from its luxury brands then penetrate to the brands in different price level and different markets eventually implemented in its consumer brands. The innovations based on the same technology platform will reduce the cost. The knack for L'Oreal to create the advantages is to spread around strategic investment by sharing the production of innovation between different product divisions. L'Oreal not only focuses on the single brand but also pays attention to the technology relevancy in the series of brands. For example, L'Oreal first introduced a breakthrough anti-aging composite by using Lancme brand. Subsequently, it was implemented in Vichy brand and brought into the consumer product division eventually. The broad distribution channel of consumer products was used to promote this technology at last. In term of same products in the different market, L'Oreal also exerts the technology platform to meet the specific needs of consumers. From L'Oreals

experiences, the core technology platform is a key component to the success of an international company with complicated brand house. Without leveraging the resources between brands, it will cause increase of operational cost and waste of resources and will be very hard to manage the L'Oreals sophisticated brand architecture. Other than building the brand structure according to the product identity, L'Oreal relied on distribution channel to carry out its strategy of brand structure. There are four product departments in L'Oreals structure. Every department has several brands and each brand has many names. They are conspicuously different in packages and with distinct image and advertising. The different brands share the resources of distribution channel and have high integration effect on management. The luxury brands of LOreal are sold in strictly selected distribution channel like department store, perfumeries and tax free shop. Professional products are provided to the hairdressers. Active cosmetic products are sold in pharmacists. The most important sector consumer products are distributed through mass consumption channel like department store and supermarket. L'Oreal has new brand resources in distribution formed a brand matrix with merged into the relevant existing channel as well channel by integrating great channel as power of integration. Any will fully utilize the expand L'Oreals whole its original channel.

The dissemination of brand will improve companys overall influential power. L'Oreal recognized the leverage effect of it brand and focus its propagandas on brand rather than propagandas on particular product. It is dedicated in building the relationship between its brand and the market. It aims to enhance brand power by maintaining the good image in publicities. L'Oreals efforts were also embodied on its marketing strategy. It always concentrates on supporting those brands which can mostly represent its advantages and leverage resources to those premium products. Firms that aim to expand internationally or strengthen market position tend to acquire new brand into the brand architecture. Acquiring influential and well positioned brand is an important strategy of L'Oreal in developing its brand architecture. It achieves rapid growth by acquiring brand in same or related business and is continually seeking these opportunities in the worldwide scope. L'Oreal expanded its brand architecture by acquiring Maybelline brand in 1996, which was a very successful transaction. The Maybellines image was enhanced by branded L'Oreal while L'Oreal got complementary in its brand architecture. Recent years in Asia, it acquired the third skincare brand Mininurse in China and Japanese top luxury brand Shu Uemura. These acquisitions represent L'Oreals ambition to Asian market. They have the same product business with L'Oreal. In China the acquisition will enhance L'Oreals market position in skincare and acquire

distribution channels Mininurse had. It is also a preparation for the future expansion in the most fast-growing market China. By acquiring Shu Uemura, L'Oreal want to use this Japanese brand to compete with SK-which was a competitor in the same level, in order to meet the trend of prevalence of Japanese cosmetic brand in Asia. This is considered to be an effective and cost-efficient strategy which is consistent with L'Oreals overall brand architecture. In summary, well-designed References companies will be more brand successful by constructing a architecture.