In the hot seat: Carving out new market segments

In the hot seat: Carving out new market segments

Four years into his time with Samsung Electronics, Scottish-born Alan Macdonald, marketing manager of the IT division, is set to ramp up business in the printer and notebook space - two relatively new market segments for the company. And while the company is successful in the monitor segment, he doesn't want to see it rest on its laurels. Instead, he's getting the channel in order by reassessing the distribution ranks and bringing on board a new crew.

What's your professional background?

Alan Macdonald (AM): I was a Lexmark product marketing manager for South Asia for three-and-a-half years. Before that, I was in the printing and publishing industry. My background is in photography. I was a product manager for a Danish company, selling high-end, pre-press equipment.

Did you always have aspirations to be in IT?

AM: Somebody told me a long time ago, back in the printing and publishing days, that the IT industry started from the printing industry, which always intrigued me. The printing industry embraced IT very early on. From a historical sense, it's very interesting to see the shift in the delivery of information and documents. It used to be a print and distribute model, but now it's the other way around.

What are some of the hats you've worn while at Samsung?

AM: I started off as product manager for print solutions, launching the Samsung range of laser printers. I then moved into the IT division as the marketing manager. I also had a sales management role in the notebook PC division because I have a reputation for being able to kickstart a new venture. We launched the notebook range this year.

What categories fall under the Samsung Electronics banner?

AM: We have three divisions: consumer electronics, telecommunications and IT. It's an interesting question because we talk about digital convergence as something that has been promising to happen. But it is actually happening, and it is getting harder and harder to define and differentiate between IT, CE and telco products. For example, with most of our monitors, you can buy optional TV tuners, so they can be used as a computer monitor or a TV. We are finding some models are being sold into both channels.

How is Samsung's channel structured?

AM: We have a channel-only structure with the exception of some retail accounts. As a major vendor of consumer electronics, we have direct relationships with some of the mass merchants. We also have about 12 distributors, down from the bad old days of 2001 when we had 135 direct accounts. It has been an ongoing reform process changing from a direct sales company to a channel one. We've got Ingram Micro, tier-one distribution, and other national distributors including Westan, Altech and Cellnet. We also have our regional distributors such as JMills and HiTech.

Did you have a hand to play in streamlining the distribution process?

AM: I have been involved in the process the whole way through. I don't want to come out with a threat, but there will be further reforms. We reassess the structure every January. There has generally been a cutting back of distribution. The interesting thing is, every time we cut back on the number of distributors, our sales go up. The whole landscape has changed dramatically.

What other channel plans do you have up your sleeve for next year?

AM: We put on two business development managers (BDMs) in July for the notebook side. We have started to go out and get hunters who can drive some business back into the channel. It has been a big success. More than half of our sales in the notebook space can be attributed to the BDMs.

We are now in the process of assessing how we will increase the number of BDMs across the whole division. Do we vertically align them, which is an idea I like, or do we make it geographic or by product? It will probably be a hybrid model. I suggest the focus next year will be notebooks and printers. And we'll look to have about four or five notebook/printer BDMs. So instead of having the one tier of sales people, which is the distribution account managers, we'll have BDMs feeding the channel. This concept has been accepted positively by the distributors.

How do you plan to rev up business in the printer and notebook markets?

AM: With monitors, from 17-inch up to 24-inch, we are the weapon of choice. Traditionally, though, we didn't have the printer or the notebook piece where a lot of our high-end display solutions went in. But now we have a high-end network laser printer, and we are also looking at bringing out high-speed single pass colour lasers early next year.

On the notebook side, we are offering retail and corporate models, and recruiting corporate resellers. We're getting lots of action from retail, but to hit critical mass, you need to go for the corporate sales.

Will the company go down the sub-$1000 notebook road?

AM: Our entry point is $1600. We don't go down to $899. Our value proposition is we have the thin and light story. We don't have the entry-level pricing, but the sweet spot for most retailers, as they tell us, is $1600. The sub-$1000 space has ratted the desktop market.

If you weren't in IT, what would be your second career choice?

AM: I'd be an IT anthropologist, tracing the history of IT through humankind.

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