SALES AND DISTRIBUTION MANAGEMENT

NCP-3 REPORT

DISTRIBUTION CHANNELS

( Samsung company)

Submitted

To

Dr. Radhakrishna B

Assistant professor of marketing management

IBS Hyderabad , India

SUBMITTED BY

AKSHARA D N S - 21FMUCHH010634

N. HARITHWEJ-21FMUCHH010372

SHASHIKANTH DEVARAKONDA-21FMUCHH010504

SRI HARSHA-21FMUCHH010248

PARNEM MEGHANA REDDY-21FMUCHH010406

KANISHK AGARWAL-21FMUCHH010861

GOLI KRISHNA CHAITANYA-21FMUCHH010691

 CONTENT

EXECUTIVE SUMMARY……………………………………………………

INTRODUCTION………………………………………………………………

DISTRIBUTION CHANNEL NETWORK……………………………………

MERITS AND DEMERITS OF THE CHANNEL…………………………………………………

POTENTIAL CHANNEL CONFLICTS………………………………………

RECOMMENDED CHANGES TO IMPROVE THE CURRENT DISTRIBUTION NETWORK

 EXECUTIVE SUMMARY

Samsung leverages a multi-layered distribution network to ensure its smartphones reach a vast
audience across India. This network involves distributors, retailers (including exclusive Samsung
Experience Stores), online marketplaces, and even mobile network operators. This approach
offers wide reach and caters to diverse customer preferences.

However, potential channel conflicts can arise due to price discrepancies, product availability
differences, and inconsistent customer service. To address this, Samsung can implement clear
channel policies, improve communication, and ensure fair profit margins for all partners.

Here are key recommendations to further optimize Samsung's mobile distribution in India:

Tier 2 & 3 City Focus: Partner with regional distributors, explore franchise models for Samsung
Experience Stores, and incentivize independent mobile stores in these areas.

Omnichannel Strategy: Create a seamless experience where customers can browse online and
buy in-store or vice versa.

Service and Training: Standardize customer service and invest in training programs for all
channel partners.

Strategic Partnerships: Collaborate with mobile network operators and potentially local
manufacturers for better deals and cost optimization.

Embrace New Technologies: Implement AR/VR experiences and explore AI-powered chatbots
for enhanced customer service.

By implementing these recommendations, Samsung can strengthen its distribution network,

improve market reach, enhance customer experience, and ultimately solidify its position in the
Indian mobile phone market.
 INTRODUCTION

Samsung Group is a massive South Korean conglomerate made up of numerous subsidiaries and
affiliated businesses tied together under the Samsung brand. It comprises over 60 publicly traded
companies as well as private firms spanning industries like electronics, financial services,
shipbuilding, construction, entertainment and more.

Samsung Electronics is the flagship subsidiary and accounts for a major portion of the group's
revenue and profits. As one of the world's largest technology companies, it is a dominant player
in semiconductors, smartphones, TVs, appliances, and other consumer electronics categories
globally.

Some key facts about Samsung:

History

➢ Founded in 1938 as a trading company by Lee Byung-chull in Seoul

➢ Entered electronics in 1960s, shipbuilding & construction in 1970s
➢ Major push into semiconductors, telecommunications in late 1980s/1990s
➢ Rise as global technology powerhouse in 2000s under chairman Lee Kun-hee

Business Areas

➢ Electronics (smartphones, TVs, appliances, semiconductors, displays)

 ➢ Information Technology & Mobile Communications
➢ Device Solutions (memory, system LSI, LED, etc.)
➢ Financial services through Samsung subsidiaries
➢ Construction and engineering through Samsung C&T and affiliates
➢ Other operations span chemicals, trading, entertainment, and more

Financials

➢ Total global revenue of $197 billion in 2022

➢ Employs over 320,000 people across 200+ subsidiaries
➢ Spends $18+ billion annually on R&D, among the highest globally
➢ Known for vertical integration from components to finished products

Samsung is one of the world's most recognizable brands, symbolized by its ubiquitous Galaxy
smartphones and curved neo-QLED TVs. With major investments in cutting-edge technologies
like AI, 5G, automotive electronics and more, it aims to lead innovations of the future.
 DISTRIBUTION CHANNEL NETWORK

Deep Dive into Samsung Mobile Distribution Channel Network in India

Samsung's mobile distribution network in India is a complex and well-oiled machine, ensuring
their smartphones reach a massive audience. Let's delve deeper into each player and channel:

Players:

Samsung India:

Responsible for: Importing/manufacturing smartphones, setting product strategy & pricing for
India, managing marketing & promotional activities.

They directly interact with distributors and might have sales teams working with larger retail
chains.

Distributors:

Typically large companies with strong logistics networks across India.

Examples: Ingram Micro, Redington India.

Responsibilities:
 ➢ Purchase smartphones in bulk directly from Samsung India or its manufacturing partners.
➢ Store the phones securely in warehouses strategically located across the country.
➢ Manage inventory levels based on market demand and forecasts provided by Samsung
India.
➢ Distribute smartphones to various retailers based on pre-determined agreements and sales
targets.

Retailers:

Multi-Brand Retailers (e.g., Croma, Reliance Digital, Vijay Sales):

➢ • Large retail chains offering a wide variety of electronics brands, including Samsung.
➢ • Typically have dedicated sections for smartphones with trained staff to assist customers.
➢ • May negotiate special pricing or promotional offers with Samsung India or distributors.
➢ Electronics Stores (e.g., Poorvika Mobiles, Univercell):
➢ • Stores specializing in electronics, often with a strong focus on smartphones.
➢ • May stock a wider range of Samsung phone models compared to multi-brand retailers.
➢ • Sales staff might receive specific training on Samsung products from company
representatives.

Samsung Experience Stores:

➢ • Exclusive retail stores operated by Samsung India.

➢ • Offer the entire Samsung mobile range, allowing customers to experience the latest
technology and get expert advice from Samsung-trained staff.
➢ • Play a crucial role in showcasing Samsung's brand image and providing a premium
buying experience.
➢ Independent Mobile Stores:
➢ • Smaller, independent stores primarily focused on selling mobile phones from various
brands.
➢ • May purchase smartphones directly from distributors or even larger independent mobile
stores.
➢ • Play a vital role in reaching customers in smaller towns and cities.

Carriers:

➢ Mobile network operators like Airtel, Jio, or Vodafone Idea.

➢ In some cases, partner with Samsung to offer bundled deals where smartphones are sold
with service plans at a discounted price.
➢ This provides a convenient one-stop shop for customers seeking a new phone and mobile
service.
Channels:

Direct Sales:

Samsung India operates its own online store (https://www.samsung.com/in/smartphones/).

Customers can browse the entire Samsung smartphone range, compare features, and make secure
online purchases.

This channel offers convenience and potentially exclusive deals directly from Samsung.

Indirect Sales (most common channel)

Distributor to Retailer:

Distributors play a critical role in bridging the gap between Samsung and retailers.

They deliver smartphones in bulk to multi-brand retailers, electronics stores, and independent
mobile stores based on purchase orders and pre-agreed upon terms.

Distributor to Samsung Experience Stores:

In some cases, distributors might supply smartphones directly to Samsung Experience Stores,
ensuring these exclusive stores have sufficient stock.

Additional Considerations:

Online Marketplaces:

Major online retailers like Flipkart and Amazon are crucial partners for Samsung.

These platforms allow Samsung to reach a wider online audience and compete effectively in the
ever-growing e-commerce space in India.

Samsung might have dedicated online stores within these marketplaces with special features and
promotions.

Regional Variations:

The specific mix of channels used might vary depending on the region within India.

Tier 1 cities (metros) might have a higher concentration of exclusive Samsung Experience Stores
offering a premium buying experience.
Tier 2 and 3 cities might rely more on distributors and multi-brand retailers to ensure wider
smartphone availability.

MERITS AND DEMERITS OF THE CHANNELS

Merits and Demerits of Samsung Mobile Distribution Channels in India

Channels:

Direct Sales (Samsung Online Store):

Merits:

➢ • Control and Brand Image: Samsung controls the entire customer experience,
showcasing their brand directly.
➢ • Potentially Exclusive Deals: May offer exclusive deals or bundles not available through
other channels.
➢ • Data Collection: Gathers valuable customer data and buying habits directly.

Demerits:

➢ • Limited Reach: Online store might not reach customers in regions with poor internet
connectivity or those who prefer physical stores.
➢ • Touch and Try Limitation: Customers cannot physically interact with the phones before
buying.
 ➢ • Logistics and after-sales: Samsung might need to manage a separate logistics and
after-sales service network.

Indirect Sales (Distributor to Retailer):

Merits:

➢ • Wide Reach: Distributors can efficiently deliver smartphones to a vast network of

retailers across the country.
➢ • Established Relationships: Retailers might have established relationships with
distributors, leading to smoother transactions.
➢ • Retailer Expertise: Retail staff can provide customer service and product knowledge.
➢

Demerits:

➢ • Loss of Control: Samsung has less control over product presentation, pricing, and
customer experience at retail stores.
➢ • Profit Sharing: Profits are shared between distributors and retailers, reducing margins
for Samsung.
➢ • Slower Response Time: Reaching and implementing changes across a large network
can be slower.

Indirect Sales (Distributor to Samsung Experience Stores):

Merits:

➢ • Brand Control: Samsung maintains complete control over product presentation, pricing,
and customer experience.
➢ • Premium Experience: Provides a premium buying experience with trained staff and the
latest technology on display.
➢ • Data Collection: Gathers valuable customer data and buying habits directly in their
stores.

Demerits:

➢ • Limited Reach: Samsung Experience Stores are concentrated in major cities, limiting
accessibility for some customers.
➢ • Higher Costs: Maintaining exclusive stores can be expensive compared to utilizing
existing retail infrastructure.
➢ • Cannibalization of Sales: Exclusive stores might compete with sales from other retail
channels.
Online Marketplaces (Flipkart, Amazon):

Merits:

➢ • Massive Reach: Taps into a vast online audience and allows customers to compare
prices easily.
➢ • Marketing and Promotions: Leverages established marketing channels and promotional
tools of online marketplaces.
➢ • Cost-Effective: Selling through online marketplaces eliminates the need for managing
physical stores.

Demerits:

➢ • Competition: Faces competition from other smartphone brands on the same platform.
➢ • Less Control: Less control over product presentation and customer service compared to
their own online store.
➢ • Commission Fees: Online marketplaces charge commission fees on every sale.
➢

Samsung's multi-channel approach offers both advantages and disadvantages. The benefits of
wider reach and established networks need to be balanced against the potential loss of control
and profit margins.

By carefully considering the merits and demerits of each channel, Samsung can optimize its
distribution network for the Indian market. They can allocate resources strategically, ensure
product availability across regions, and cater to the diverse needs of Indian consumers, both
online and offline.
 POTENTIAL CHANNEL CONFLICTS

Potential Channel Conflicts for Samsung Mobile Distribution in India

While Samsung's multi-channel distribution network offers advantages, it can also lead to
channel conflicts. These conflicts arise when different channels selling the same product compete
with each other, creating friction and potentially harming overall sales. Here are some potential
conflicts Samsung might face in the Indian market:

1. Price Discrepancies:

➢ Scenario: Samsung might offer exclusive deals or lower prices on its online store
compared to what's available through distributors and retailers.
➢ Conflict: Retailers might feel undercut, leading to reduced motivation to promote
Samsung phones and potentially stocking fewer models.

2. Product Availability:

➢ Scenario: New or high-demand Samsung phones might be prioritized for Samsung

Experience Stores, delaying availability in other channels.
➢ Conflict: Distributors and retailers might become frustrated with unequal access to new
products, impacting sales and customer satisfaction.

3. Customer Service Discrepancies:

➢ Scenario: Customer service experiences might differ between channels. Samsung

Experience Stores might offer a premium service, while smaller retailers might have
limited expertise.
➢ Conflict: Inconsistent customer service can create confusion and frustration, potentially
damaging Samsung's brand image.

4. Marketing and Promotional Conflicts:

 ➢ Scenario: Promotional offers and marketing messages might vary across channels,
creating confusion for customers.
➢ Conflict: Mixed messaging can dilute the impact of marketing campaigns and make it
difficult for customers to understand the best deals available.

5. Inventory Management Issues:

➢ Scenario: Inaccurate sales forecasts or poor communication between channels can lead to
overstocking in some areas and stockouts in others.
➢ Conflict: Excess inventory ties up capital for retailers, while stockouts lead to lost sales
opportunities.

Strategies to Mitigate Channel Conflict:

Clear Channel Policies: Establish clear guidelines on pricing, product allocation, marketing
messages, and customer service standards for each channel.

Open Communication: Maintain open communication with distributors and retailers, keeping
them informed about upcoming promotions, new product launches, and inventory levels.

Profit Sharing and Margins: Ensure all channels have a fair profit margin to incentivize them to
promote Samsung products effectively.

Training and Support: Provide training and support to retailers and distributors to ensure
consistent customer service and product knowledge across all channels.

Data Sharing and Collaboration: Share sales data and collaborate with channel partners to
improve inventory management and forecasting.

By proactively addressing these potential conflicts, Samsung can create a win-win situation for
itself and its channel partners. A harmonious distribution network ensures a smooth flow of
products, maximizes sales potential, and ultimately leads to a stronger brand presence in the
Indian mobile phone market.
 RECOMMENDATIONS

Samsung's current multi-channel network offers wide reach, but there's always room for
improvement. Here are some recommendations to further optimize their distribution strategy in
the Indian market:

Focus on Tier 2 & 3 Cities:Partner with regional distributors to improve reach and product
availability in Tier 2 and 3 cities.

Explore franchise models for Samsung Experience Stores in these regions to expand brand
presence with a lower investment.

Train and incentivize independent mobile stores in these areas to effectively promote and sell
Samsung phones.

Omnichannel Strategy:

Create a seamless omnichannel experience where customers can browse online, research
in-store, and potentially complete purchases through either channel.

Offer options for online purchases with in-store pickup or click-and-collect services for added
convenience.

Service and Training:

Standardize customer service experiences across all channels.

Invest in training programs for distributors, retailers, and Samsung Experience Store staff to
ensure in-depth product knowledge and exceptional customer service.

Partnerships and Collaborations:

Explore strategic partnerships with mobile network operators (carriers) to offer bundled deals
with data plans, especially targeting budget-conscious customers.
Collaborate with local manufacturers to potentially reduce production costs and cater to specific
market demands within India.

Embrace New Technologies:

Implement tools like augmented reality (AR) in Samsung Experience Stores and online platforms
to allow customers to virtually experience products before purchase.

Explore the potential of artificial intelligence (AI) powered chatbots for 24/7 customer support
across all channels.

By implementing these recommendations, Samsung can strengthen its distribution network in

India. This will lead to improved reach, a more competitive online presence, enhanced customer
experiences, and ultimately, stronger sales and market share.

BIBLIOGRAPHY

➢ https://ilide.info/doc-viewer-v2#google_vignette

➢ https://www.fortuneindia.com/enterprise/samsung-india-the-bigger-picture/102822#
:~:text=As%20of%20now%2C%20Samsung%20has,available%20in%2030%2C00
0%20retail%20stores.

➢ https://medium.com/@pasilapraveen/changes-in-the-distribution-channels-of-samsu
ng-mobiles-in-india-5c08a1667bf6

➢ https://www.scribd.com/document/425233640/Samsung-Distribution-Channel-Proje
ct