Samsung: Customer Loyalty Strategy in Malaysia and Colombia

Brand loyalty is one of the key elements of success in any organization, in the context of high international competition and consumer awareness. The objective of this research is to study the factors that affect customer’s loyalty towards Samsung over the long term and propose certain strategies to increase loyalty in Malaysia and Colombia. First, the company’s background is explained, followed by the research problem and the research method. By comparing these two markets, possible loyalty approaches that could be useful for each market were identified, taking into account that Samsung is the leading company in both countries, in terms of market share. Finally, concluding with the findings and limitations of the research.


Company Background
Samsung is a multinational company from South Korea, with its headquarters located in Samsung Town, Seoul. The company consists of several business units, most of them united under the Samsung brand.
Samsung company was founded in 1938 by Lee Byung-chui as a trading company. In the next three decades, the company expanded its business into many different areas which included food processing, textiles, insurance, securities, and retail. In the late 1960s, Samsung Company started to enter into the electronic industry and in the mid-1970s, Samsung entered into the construction and shipbuilding industry. The diversification of business areas caused the company to grow successfully. After the death of its founder, in 1987, Samsung separated its business into four business groups: Samsung Group, Shinsegae Group, CJ Group and Hansol Group. Samsung's main source of income was from mobile phones and semiconductors and today, Samsung is the largest South Korean company (Samsung Newsroom, 2015).
Samsung's corporate mission, "We will devote our human resources and technology to form superior products and services, thereby contributing to a much better global society" has resonated among international consumers. In its mission statement, Samsung identifies human resources and technology as the main assets to pursue its purpose and strategic objectives in global industries. Samsung's corporate vision, "Inspire the planet with our Innovative technologies, products and style that enrich people's lives and contribute to social prosperity by creating a brand-new future" is also key to the brand image. This corporate vision implies that the corporation sees itself as a mover and major contributor to the world's improvement through consumer electronics, semiconductors, and other products that add value to people's lives and society in general (Victoria Martin,2019).
Even though Samsung is a leading producer in the mobile phone and semiconductors industry, the market is saturated, and competition is stiff, specifically, direct competitors including Apple, Huawei, Oppo, Vivo, Song among others. In order to maintain market share and retain consumers, customer loyalty results in a key component of Samsung branding strategy. (Hitech Bargin,2018)

Problem explanation and idea justification
Brand loyalty is key for the enhancement of customer relationship and increase in profitability. Samsung must look to break discount expectations early in the product life cycle and engage customers through alternative and innovative strategies to deliver a better brand experience.
According to some authors, modern marketing practices are integrating consumer centricity, relationship marketing and marketing communication. Besides, consumer loyalty and satisfaction are inextricably related (Firnd, 2015). Extensive literature demonstrates that there are many factors affecting brand loyalty such as brand name, brand design, perceived quality, price and promotion (Lee, Imrie & Grigorious, n.d).
According to the Global Web Index, as for February 2018, the brand consideration and loyalty among Samsung Owners as the percentage of people who say that the brand will be a top choice when next upgrading or purchasing a new mobile phone showed that 70% would consider Samsung in the Asia Pacific region and 86% for Latin America (Compared to 38% and 35% that would consider iPhone, respectively) (Valentine, 2018).
Even though statistics show their willingness to keep buying from the brand, competition is stiff and iPhone users remain as loyal as ever, with surveys finding that 90.5% of current iPhone owners plan to stick with Apple the next time they upgrade, meanwhile 86% of Samsung users plan to stick with the brand (Heisler, 2019). The problem faced is, how will Samsung engage those customers and make them identify with the brand over the long-term? Therefore, the creation of an innovative, all-in one strategy that allows consumers to easily engage in timely information and that offers added value to the buying and engaging experience with the brand is certainly vital to retain Samsung community.

RESEARCH METHOD
This paper will take an approach of a mixed research method, including quantitative data collection and qualitative data analysis, based on secondary information and data gathering, as well as primary information through a survey carried out by Samsung users in Malaysia and Colombia. This approach will allow the information to be closer to a general perspective and a regional perspective on loyalty, giving the readers the tools to better understand the challenge of brand loyalty faced by Samsung, in this case, specifically in Malaysia and Colombia. In this survey there are four items to measure customer loyalty strategy which are demography, customer satisfaction, brand loyalty and long-term loyalty.

Idea Background Customer Loyalty Strategy
Content is an important part of the Samsung ecosystem, and this creates demands for Samsung Products (Marketing Interactive, 2015). Nicholas Wodtke, VP of Samsung Asia's Media Solutions Centre in 2015, stated that purchasing patterns of consumers are staged in three main points: pre-sale; retail; and post-sale, being the last stage the most important one, stage in which Samsung engages closely with consumers and engage in a conversation with them (Marketing Interactive, 2015). Samsung's objective is to bring hardware with software to increase loyalty and continue building Samsung Brand, Wodtke affirmed.

The Cases of Asia -Malaysia
During recent years, Chinese mobile phones have become strong competitors for Samsung. This is mainly due that during the past decade, China has been producing higher-end smartphones, fueled by a rise in national pride of "China Brand" (Agence France-Presse, 2016). Samsung's approach to customers is by offering innovative products and different smartphone options, in shapes, sizes and operating systems. Some examples are; the development of the S Pen to launch the Air Command features like Action Memo, so Asian customers could write in their own language, and Screen Writer, easing customer's convenience (Anh, Quang & Thang, n.d.). Therefore, Samsung's strategy has been to increase sales in volume, by targeting different customer segments and different income levels, so customers can find the product that fits their needs (Anh, Quang & Thang, n.d.). This strategy has been attractive over a long time, and it still works for various markets. Furthermore, customer awareness and high expectations have put the market at a very competitive stage. Still in Asia, Samsung keeps on leading the charts and is number one across six categories, including the mostmobile friendly brand, the strongest local brand and the brand with the values that best aligns consumers. According to Superunion Asia chief executive Benedict Gordon, Samsung's dominance comes down to three aspects: global resonance, a broad portfolio and product innovation (Goodfellow, 2019). This innovation has been displayed in the newest line, consisting of three models, the Samsung Galaxy S20, the Galaxy S20+, and the Galaxy S20 Ultra 5G. All three phones are available with support for 5G (Retail Asia, 2020). In Asia, the strongest markets include Hong Kong, Malaysia and Indonesia. In the case of Malaysia, Samsung Pay is one of the most widely accepted mobile payment system. With the latter, Samsung Rewards has become the world's first mobile payment loyalty program (Burkard, 2016). The strategy is that each time a customer completes a purchase with Samsung Pay, they earn 10 point that can be redeemed for a variety of gift cards, Samsung products among others. This loyalty strategy makes customers more easily to continue purchasing, keeping them coming back to the brand and forming more brand awareness. This innovative strategy is also important when it comes to loyalty competition. According to  in Malaysia, Samsung has a 20.56% of market share, followed by competitors such as Huawei (19.78%) and Apple (19.52%). Samsung is aware of the importance of social listening as well as post-purchase follow up, offering product help and support (Samsung Members) and most strongly through Samsung Rewards.

The Case of Latin America -Colombia
Samsung presence in the region is strong, with 47.8% of market share in South America, followed by Motorola (16.7%), Apple (10.4%), Huawei (9.2%), Xiaomi (5.4%) and LG (5.4%) . As aforementioned, Samsung is always looking for innovative ways to attract and retain customers. In Latin America, one example is the first Samsung House that opened in Argentina in 2018. This experience offers customers the possibility to experience the latest products and consult with experts on how to use Samsung's technologies. This bring up the brand even closer to the Latin American society. Besides offering specialized guide and follow up, it offers activities and events, including photography classes, lectures on fashion trends and others. Visitors can also participate in Galaxy School and learn how to get the most of their devices. Furthermore, Samsung mobile users can receive personal attention, device diagnosis and optimization, data transfer, customized configuration and software updates, as well as 24-hour repair services (Samsung Newsroom, 2018).This exemplifies the continue efforts to support customers in pre-sale, retail, and post-sale, being the last one, the most important. In the case of Colombia, the smartphone market is expected to keep growing as the Colombian Ministry of Information, Communication & Technology has launched the "Vive Digital" (Live Digital), with the purpose of developing a nationwide digital ecosystem (Kim & Chao, 2018).As for Samsung is concerned, the company is again, at the top of mobile phone market share, accounting for 34.7%, followed by Huawei (23.9%), Motorola (15.9%) and Apple (10.31%) . Competition among these brands is fierce. According to an online survey conducted in Colombia with 315 participants, found that country of origin affects the perceived quality and Brand awareness, which at the same time are determinants of consumer's Brand Loyalty. Because of this chain of relationships, the "Hallyu" or Korean wave, has been highly benefited Brand Loyalty, in general terms, even though for Colombia, consumers' purchase intention is more affected by perceived quality rather than brand awareness (Kim & Chao, 2018). According to the retailing store, there are promotions and sales for Samsung products, that in general are very attractive for the public. Samsung Colombia is very committed to Customer Service, as key loyalty strategy in the country, such it has been, that Samsung Electronics Colombia was recognized as the best company in the category of Customer Service at the Annual Portfolio Awards in 2019, highlighting the company's efforts to provide quality support to its users (Samsung Newsroom Colombia, 2019). There are many ways in which customer needs are addressed. Users can communicate with the hotlines as well as on digital channels, or live chat. There are also virtual consulting services available without leaving your home. Something that has been implemented is a space "Connected Living" in which users can experience a smart home with Samsung products, which closed in 2019 with 9 experience stores (Samsung Newsroom Colombia, 2019). In a quest to bring customers closer to the business experience and seek to strengthen ties of loyalty with their customers. Samsung members also provides self-management tools and allows you to find news and tips on how to use your equipment. Samsung also includes 24/7 Call Center, 24/7 Chat, Video Chat, and Remote Support (Samsung Newsroom Colombia, 2019). Still, there is no clear loyalty strategy (besides the traditional established ones of customer support and assistance, guarantee, maintenance among others) that can be called as innovative in the Colombian market.

Survey Findings
This survey was carried out through Google docs and shared by using social media sites like Facebook and WhatsApp, and only Samsung users in Malaysia and Colombia filled the questionnaire. The latter was created using a five-point scale (`strongly agree', 'agree', 'neutral', 'disagree', 'strongly disagree').
The purpose of the survey was to take a closer look at the factors that affect Samsung Users loyalty towards the brand. These were the main findings: In total, 35 people filled in the questionnaire (57.1% male and 42.9% female), with 68.6% from 19-30 years old, making up a young market ( Table 1). Most of them agreed that Samsung satisfies their needs and expectations, having convenient locations, with good quality products and customer services, besides offering a wide range of products that are affordable according to the economic capacity of consumers (Table 2). Also, most respondents agreed they often have a positive view of Samsung than other brands, they would recommend Samsung, they consider themselves loyal to Samsung and think the brand has better features than others. In the last three variables, more than 20% of people responded "neutral", which sparks an idea that the company is still the company is vulnerable for people to switch to other brands (Table 3).Lastly, even though most of Samsung users consider the battery to last longer, have good quality and like the updates, as aforementioned, they are still likely to switch to other brands (Table 4).   Table 2 shows customer satisfaction toward Samsung. The survey above clearly shows that most of them agree that Samsung product were good quality, convenient location, customer service and variety that is affordable.   Table 4 shows customers long term loyalty toward Samsung. The survey above clearly shows that majority of respondent agree that Samsung product's battery last longer, better quality.
In conclusion, for both cases (Malaysia and Colombia), price and quality are very important variables when considering purchasing Samsung Smartphones. Still, loyalty is not that strong as for assuring that customers will stay and get closer to the brand, and Brand Loyalty remains a challenge that must be tackled from different angles, perspective and a long-term vision.

Proposition
As previously explained, the loyalty strategy in Malaysia and Samsung is still very importance since it can assure market share and leading mobile phone sector. From this perspective, competition is stiff and the best way to gain loyalty is by expanding the cake through cooperation. Nowadays, consumers are not only buying products but experiences. Discount strategies can be helpful in the short-term but does not guarantee loyalty, since competitors with better prices, and quality can arrive and threaten stability. Furthermore, Samsung needs to focus even more strongly in innovation in both countries, especially in Colombia, in which the technological apparatus is not as developed as Malaysia, but that presents an opportunity to enter in everyday lives of consumers. Other models include exclusive and additional services such as 24-hour delivery, no shipping charges, discount book, discounts on the next purchase, access to VIP room or private sale. Still, innovation is key.

Loyalty Strategy
Since Samsung is having multiple loyalty channels and all of them are somehow dispersed, integration in one (accompanied with alliances and cooperation) platforms can offer a better system for consumers to get closer to the brand. One of the best examples, even one of the most common ones, is a loyalty strategy based on mobile apps, conventionally, companies introduce loyalty cards, such as the case of Starbucks mobile application, that was a differentiating factor for a decisive victory in the eyes of consumers. Customers could collect stars or points through purchases from the mobile application and get a free drink through the rewards obtained. It is well known that digitalization is becoming even more relevant and consumers usually expect not only receive rewards from the company itself but to access additional benefits they enjoy the most.
The strategy would work the following • Creation of a special "Samsungme!" App • This App will allow users to create an account and personalize their experience with the contacts, client service centers, video chat and remote support according to the area/city the consumer is based on (using BigData technology) • Through this app selling activities can take place and consumer would always be informed of Samsung sales promotions in their area, besides getting the opportunity to be informed on-time. • Creation of a point system, by each purchase of any Samsung Product, points will be added to the personal accounts that could then be redeemable with other Samsung product. • Up-selling strategy to keep consumers updated in the next product arrivals must be implemented.
Using "Simple" yet integrated loyalty communication channel with consumers, the possibilities of turning themselves into advocates for the brand can be a powerful asset.
As it is well known by the Pareto Law commonly mentioned in more than one occasion: 20% of customers generate 80% of purchases. That 20% is the key because, at the end of the day, "The best publicity is that which satisfied customers do", Philip Kotler.

Scope and Limitations
One of the most important factors is the creation of positive experiences for the consumer and the surprise factor. In this way, customers will be retained for the business and turned into repeat buyers. However, it is necessary to have a trial-and-error approach and take risks to achieve that initial goal. Some of the initial benefits in that such actions through the ease of access to information by the customer will create a more active target and predisposed to purchase, by having Samsung at the top of the mind. Also, by offering personalized attention and service that exceeds user expectations and a more successful strategy translates into a better shopping experience, and a better experience satisfies and builds customer loyalty. This proposal is not based on metrics and primary source analysis to verify its scope. However, considering the contexts of future development and the challenges that will be presented to companies as consumers become much more aware and harder to reach in their long-term prospects, the integration of communication and value-added customization approach can provide a first step in exploring opportunities in the consumer's everyday life. Therefore, further study must be done to better understand the scope and the feasibility of the proposal, since this paper focuses on the context of Malaysia and Colombia, and recommended a possible strategy, yet needed for further analysis.

Recommendations
During this research, it has been possible to find a gap between the loyalty strategies implemented in Malaysia and Colombia and the vulnerabilities if further strategies are not implemented. Because Samsung has a meaningful portion of the market in both countries, still competition is increasing, and the real variable to analyze if the influence and power of the company is that strong, should be made through the lenses of longterm loyalty by Samsung consumers. Because the strategy in Colombia is not clearly defined, and still market share is higher than in Malaysia, the vulnerabilities can be even more stiff. Inferring from the previously described situations, the case of Malaysia and Samsung Pay (that operates in several countries) along with Samsung Rewards, displays how a loyalty strategy can be introduced in a day-by-day basis of clients' lives, as part of a routine and how it is possible to turn it in favor of the clients and eventually, the company, through loyalty. This is the gap or the breach from Malaysia and Colombia that the numbers do not really portray. Therefore, a day-to-day basis companion that reminds customer that Samsung is there for them, can offer the company a closer approach to consumers and become their top of mind.

CONCLUSIONS
Samsung is one of the leading brands in the mobile phone market. Most of youngster and young adult are users of Samsung, being a brand that in general terms, meet customer's expectation in price and quality and offer post-purchase support in the way of client service, guarantee and maintenance. Samsung still faces a challenge of implementing brand loyalty in everyday basis for consumers. Loyalty in this case, goes beyond support and enters the field of added value for consumers to stick with the brand over the long-term. The relationship between the effects of Samsung Rewards over the increase in sales in Malaysia and the reasons of the high market share of Samsung in Colombia, even with a lack of innovative Loyalty strategy must be analyzed in further researches that could give an insight of other possible variables that are involved in the reasons for customer's preference for Samsung. From the insight given in this paper, if Samsung incurs into analyzing different patterns of consumer behavior between nations and inferring from that how closeness creates outcomes, and cooperation, expansion, surely this would create identity, and eventually, loyalty.