Samsung: Customer Loyalty Strategy in Malaysia and

Colombia
Evelyn Henao Ruiz1, Camilo Alberto Pérez Restrepo2, Carolina Ardila Lopez3,
Kalaaivahnny A/P Jegathesan4, Daisy Mui Hung Kee5, Kamalaswari A/P
Ganasan6, Kalaaiveyhny A/P Jegathesan7, Prasanthiney A/P Nageswara Rao8
EAFIT University1,2,3
Carrera 49, No 7 Sur 50, 7023 Medellín, Antioquia, Colombia
University Science Malaysia4,5,6,7,8
Jalan Sg.Dua 11800 Minden, Pulau Pinang, Malaysia
Correspondence Email: daisy@usm.my

ABSTRACT

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.

Keywords: Brand Loyalty, Customer Satisfaction, Long Term Loyalty, Samsung,

Strategy

INTRODUCTION

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

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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

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customer loyalty strategy which are demography, customer satisfaction, brand loyalty
and long-term loyalty.

RESULTS AND DISCUSSION

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 most-
mobile 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 Statcounter (2020) 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.

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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%) (Statcounter, 2020). 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%) (Statcounter, 2020). 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.

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Idea Application

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 1: Summary of respondents’ demographics (N=35)

Response Frequency Percentage (%)

Gender
Male 20 57.1%
Female 15 42.9%
Age
Below 18 3 8.6%
19-30 24 68.6%
31-50 8 22.9%
Above 50 0 0.0%

Table 1 shows demographic profiles of respondents. Refer to the table 1, most of the
respondents were male and at the age of 19-30.

Table 2: Summary of customer satisfaction towards Samsung

Response Frequency Percentage (%)
Meet Needs and Expectation:
Strongly Agree 11 13.4%
Agree 17 48.6%
Neutral 7 20.0%
Disagree 0 0.0%
Strongly Disagree 0 0.0%
Convenient Locations:
Strongly Agree 14 40.0%
Agree 14 40.0%

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Neutral 5 14.3%
Disagree 1 2.9%
Strongly Disagree 1 2.9%
Good Customer Service:
Strongly Agree 9 25.7%
Agree 14 40.0%
Neutral 11 13.4%
Disagree 1 2.9%
Strongly Disagree 0 0.0%
Good Quality Of Products:
Strongly Agree 10 28.6%
Agree 19 54.3%
Neutral 5 14.3%
Disagree 1 2.9%
Strongly Disagree 0 0.0%
Variety that is affordable:
Strongly Agree 12 34.3%
Agree 17 48.6%
Neutral 5 14.3%
Disagree 1 2.9%
Strongly Disagree 0 0%
Average percentage of respondent with strongly agree or agree for Content
category :78.29%

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 3: Summary of customer’s brand loyalty towards Samsung

Response Frequency Percentage (%)
Positive view than other brands:
Strongly Agree 9 25.7%
Agree 21 60.0%
Neutral 3 8.6%
Disagree 2 5.7%
Strongly Disagree 0 0.0%
I will recommend Samsung:
Strongly Agree 9 25.7%
Agree 14 40.0%
Neutral 8 22.9%
Disagree 3 8.6%
Strongly Disagree 1 2.9%
Samsung have better features:
Strongly Agree 5 14.3%
Agree 19 54.3%
Neutral 10 28.6%
Disagree 1 2.9%
Strongly Disagree 0 0.0%
I consider loyal to Samsung:
Strongly Agree 7 20.0%

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 Agree 16 45.7%
Neutral 7 20.0%
Disagree 5 14.3%
Strongly Disagree 0 0.0%
Average percentage of respondent with strongly agree or agree for Content
category :71.42%

Table 3 displays respondents’ brand loyalty toward Samsung Company which were
have positive view on Samsung than other brand, Samsung have better features and
consider loyal to Samsung.

Table 4: Summary of Samsung’s long-term loyalty

Response Frequency Percentage (%)

Battery Lasts for A Longer Time:
Strongly Agree 8 22.9%
Agree 21 57.1%
Neutral 6 17.1%
Disagree 1 52.9%
Strongly Disagree 0 0.0%
More Likely to Switch to Other:
Strongly Agree 9 25.7%
Agree 10 28.6%
Neutral 6 17.1%
Disagree 8 22.9%
Strongly Disagree 2 5.7%
Much Better in Quality:
Strongly Agree 4 11.4%
Agree 21 60.0%
Neutral 9 25.7%
Disagree 1 2.9%
Strongly Disagree 0 0.0%
Updates with The New Version:
Strongly Agree 12 34.3%
Agree 18 51.4%
Neutral 5 20.0%
Disagree 0 14.3%
Strongly Disagree 0 0.0%
Average percentage of respondent with strongly agree or agree for Content
category :73.05%

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.

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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.

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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 long-
term 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

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and inferring from that how closeness creates outcomes, and cooperation, expansion,
surely this would create identity, and eventually, loyalty.

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