Chief Marketing Officer

Raising the Bar: How Does Samsung Showcase Its Commitment to Innovation?

Kurt Jovais, VP of Marketing for Home Appliances at Samsung, and Greg Kenepp, CMO for Hooklogic, discussed positioning the brand both online and in store and how word of mouth has become more important than online reviews.

Greg Kenepp: Can you start by telling us a little bit about Samsung and your role at the company?

Kurt Jovais: I started with an internal strategy consultancy group that was doing strategy work for all the affiliate companies. As Samsung is a giant conglomerate, it’s not just electronics, we do high-speed trains and hotels and fashion and all this. I started as the resident marketing expert working with different affiliate companies to try and fundamentally change the way that Samsung thought about marketing. It was always a manufacturing kind of company, and that’s where our key strengths were.

So coming out of the financial crisis, we recognized that we needed to drive upstream to hire design and innovation leadership; in essence, a leadership position rather than a fast-follower position, and this strategy was part of that desire to understand what was going on at our headquarters at the time. After my stint in Korea, I was spun out into Samsung Australia, which was great because now you have all the stuff that you’re talking about at our headquarters and implementing it in real time into a subsidiary. And my primary function actually going into Australia was Samsung, because it was a manufacturing-based company and very siloed by product. We had four distinct product groups sitting in even the smallest subsidiary. Australia was a medium-sized subsidiary but with four completely different marketing functions. So my initial task in going down there was basically to integrate marketing functions across these different product groups into a single voice to the consumer, with a single agency contact and a single strategy online. That was the first push toward trying to modernize Samsung to actually be a more relevant brand in the market.

How did that manifest itself in terms of the way you shaped your teams and the way you set priorities within the marketing department?

Even though we were building this integrated organization that was focused more on the consumer, to a certain extent, the power of the organization still sits with the product groups just in terms of a budgeting standpoint. It was a matter of creating an overarching group which would essentially function as a shared service between the different pieces of the organization. That way, we would at least be able to go to market with one voice so that the consumer wasn’t confused, even though internally, we still had a lot of that silo mentality that we had to get over.

“Once you raise the bar to what the possibilities are, people are a little bit more understanding of the possibilities of innovation.”

Transitioning to the home appliance category, how do you see those techniques and the innovation within that part of the organization?

There’s no question that Samsung is known as a television and mobile phone company, while home appliances are not as well known. There’s a balancing act between trying to leverage the benefits of the overall Samsung brand, because the core value of the Samsung home appliances is about innovation and design. So you want to be able to leverage that from both the phone and television side, but you still need to make it relevant to a more home-oriented environment. You’re speaking the same language but in a slightly different voice to the consumer so that you become more relevant. Especially on the AV side, our target customer board is much more mail than it is on a home appliance side. So you need to speak a slightly different language.

Do you see trends in where shopping is starting to take place online?

Online shopping for home appliances is fairly limited because it’s difficult to actually deliver and install. So only 10 to 12 percent of all home appliance purchases are online, and the vast majority of those are on the versions of brick-and-mortar stores.

Very few people actually ever purchase a home appliance without going into a showroom and opening and closing doors. It very much is a kick-the-tires kind of business, which is why winning on that retail floor and making sure the product is actually merchandised correctly is so important. That’s especially true when you’re getting into the space where our key differentiators are really about innovations that people haven’t thought about in home appliances. For instance, we have a refrigerator where you get sparkling water and has apps embedded into the screen. Or we’ve got a washing machine that has Wi-Fi connectivity so that you can start your wash remotely and get notifications while you’re on the phone. These are things that we need to be able to communicate to consumers to get them comfortable with the idea. They might not necessarily buy all the bells and whistles, but it shows that you can expect more from your home appliance; it’s not just a box that keeps your food cold or clothes clean.

Once you raise the bar to what the possibilities are, people are a little bit more understanding of the possibilities of innovation. Maybe they don’t need apps on their refrigerator, but now I can engage them in a more technical conversation about the cooling system that’s in there and why it’s superior to another cooling system. You’ve opened up their eyes to the fact that this a lot different than the last time they were in here eight years ago.

How has e-commerce shifted the way you interact with your products in the post-purchase period?

There’s not that much e-commerce in terms of the actual transaction happening in the category, but I would say there’s two big shifts that are going on right now. One is well established and one is happening right now. The first is the importance of social, especially in the target segment that we’re actually going after. Word-of-mouth recommendations are absolutely important, because it is amazing when you get deep into the blogosphere and see how recommendations from mommy bloggers or people on Facebook or Pinterest will actually drive people’s opinions of what they’re going to put into their consideration side.

“Very few people actually ever purchase a home appliance without going into a showroom and opening and closing doors. It very much a kick-the-tires kind of business, which is why winning on that retail floor and making sure the product is actually merchandised correctly is so important.”

With regards to mobile, how has your company done research on what people are doing on their phones? Because there’s the whole browsing or shopping experience prior to the in-store experience.

We don’t look at it strictly as a device to play; the device lengthens the portion of the consumer’s shopping experience that is digital. It used to be that you could do pre-research and then you’re off digital, and then you’re in store. Now you’ve got everything from the pre-research through finding it in store, from what am I finding, all the way through price comparison in the store. Can I schedule delivery? Can I check inventory levels when it’s arrived? Can I rate the service of my delivery person? If there’s a problem, can I get a live chat? Mobile just means that that entire shopping path is digital, with a longer and richer period.

So looking ahead to 2014, what are some trends that people should expect to see?

It’s an exciting time for us because with the economy coming back, we’re well positioned to take advantage of people getting back into activities like home remodeling. I think our key success factor for 2014 is really doubling down on some of the things that we were talking about earlier, such as making sure that we are driving that pre-store visit, trying to guide the conversation about recommendations that are out there and making sure that we are hitting that shopping path from soup to nuts with mobile and all the other digital channels we have. The other piece of it is making sure that we are well represented on the floor, because as I said, it’s a kick-the-tires kind of category.

Greg Kenepp

Greg brings HookLogic more than 20 years of international leadership experience in technology, software, finance and network services. Prior to joining HookLogic, Greg was the CMO at The Receivables Exchange, responsible for the SMB business unit. Before TRE, Greg was the CMO at IntraLinks, where he led strategic planning and global marketing and took the business through an LBO that led to a successful IPO. Before IntraLinks, Greg was the President and COO of IPC Systems a global provider of technology and services to financial services institutions. Greg holds a BS from Clarkson University and an MS from Stanford University.

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