A conversation with the Senior Vice President of Strategic Marketing for Samsung in North America.
Question: What is your job description?
David Steel: Yes. I'm responsible for Samsung's corporate marketing efforts in North America covering the U.S., Canada, Mexico, and then looking at all of their corporate marketing activities across all of their product lines.
Question: How did you rise to your current position?
David Steel: Sure. It probably sounds a lot more logical and a lot more rational looking back on things, but I grew up in England, went to school there and actually studied physics in college. I came to the States to get my PhD in physics, worked for three years doing federal government R&D, and then decided I was ready for a change. So, I went back to business school and then Samsung hired me. I moved to Korea where I spent the last ten years heading up marketing for consumer electronics globally and then just came to the U.S. about a year ago. So, it's been a strange mixture of some science and some business and lots of cultural issues mixed in, but it's been a great time.
Question: Based on your experience, what would you advise young people entering today’s business world?
David Steel: So, I think there's no substitute for real fundamentals. When I was taking physics, people used to question whether a science or a math would be useful for business or useful for a career outside science or math. Actually, it turns out to be very useful. Those sort of fundamental number skills and **** skills, problem solving, they are really important. So, first thing would say is go for a fundamental education. If it's science or if it's math, that will really help you later.
Probably the second thing would be, look for international opportunities. Business is becoming so global in nature that language skills and cross-cultural skills are becoming far more important. So, I would say, look for opportunities to work in different countries, to learn different languages, to understand how business is done in different countries. That would be important too.
Question: What key trends will drive the consumer electronics landscape in the year ahead?
David Steel: Consumer electronics has been an amazing growth industry for the last few years. We've seen this tremendous explosion in terms of digital TV's in people's homes and mobile devices. And now people with two or three cell phones and other types of mobile devices. We're seeing netbooks and so on.
So, there's been this big growth of devices out there and that's obviously been a big part of Samsung's rise, but now what we see is more of a transformation to consumer experience. So, it's less and less about the hardware itself. It's more about the emotional connection with it. It's about the experience of using the product so your user experience, URIUX that's becoming more important. The interface is much more significant than in the past. Design is a more important element, the look and feel, touch of products.
My favorite example is the TV. It used to be a big box you would hide away in the corner of the room. Now, it's something sleek, almost like a picture, you want to hang up on the wall. So, we're seeing that, we're seeing more applications coming, content and services delivered through devices. A cell phone started out being about just talking to people; now it's much more about the content and services that you can get through that device. So, that's really where we're going to see in 2010, I think, a big evolution which is now that all these devices are out there, we're going to see much more about the service and the experience that's delivered. Design will be more important, using more interface will be more important, and all the kind of content you can get through these various devices.
Question: How do you discover what customers want in order to strengthen their emotional connection with your product?
David Steel: That's right that the emotional feedback is becoming much more important. It used to be about a device for a device's sake. Now, it's much more about what you can do with that. So, what does it do for me as a consumer? We think about the experience of using that. So, that's why we do a lot of research now to really understand consumer needs and consumer tastes and unmet needs of consumers. We've really evolved in the consumer electronic space from being very technology driven to being almost like a consumer product or packaged goods industry where it's really about how we manage our brand and how we gain insights about consumers. So, we have a big effort in terms of market insights and consumer research, which I head up here in North America, to get out there and understand what consumers are looking for. What the unmet needs are.
I'll give you one example, which is to move content between different devices. I was out recently taking photos, family photos on vacation. We get back and I pull out the card, put it into my PC and we all stand around a 20 inch monitor looking at these photos in the room next door, there is a 55 inch TV. That's where I want to watch the photos. So, we need to make it much easier to move content between different devices; big screens for certain content, PC's for certain content, mobile phone for certain content.
So, those kind of insights that we can get from the way in which consumers use product and also the things they want to do with products, that's where we can really get benefit.
Question: At what point, if any, will computers and TVs become a single product?
David Steel: That's a really interesting question. We were in a discussion recently where we were talking about what the TV of the future might be like. And we said, well it's probably going to have a big screen and it may have a hard drive for storing content, and it may have a mouse so that you can actually access different widgets or different applications on the TV, maybe a keyboard so that you can actually type things in. And then, hey guess what? We've just reinvented the PC 30 or 40 years too late.
So, it's definitely that sense of convergences is happening, but even though we seek convergence, we also see that consumers buy products usually based on one thing. They're looking for some great performance in a particular aspect and they don't want to trade off too much. Look at cell phones, for example. How the performance of the camera on the cell phone has improved because people want that sort of feature. They want that function. In the case of TV's and PC's, we’ll continue to see the availability of content coming together, but when you look to buy a TV, the number one most important thing is picture quality. And Samsung now is number one in the U.S. market. So, we know a few things about selling TV's. More than 6 million this year. Picture quality is paramount.
Second is design. As I mentioned before, it's moved from being something you hid away in the corner of the room to something you put right in the center and you even hang it on the wall like a piece of fine art.
So, those sort of trends, yes, convergence is happening, but still we cannot compromise on product features and performance.
Question: How does Samsung brand itself, and does that branding change with each new product?
David Steel: We made a decision some years ago to really focus on the Samsung master brand. So, rather than going for multiple brands in every category, we want to build up the Samsung brand. We are now the 19th strongest brand in the world as measured by Interbrand. So, we've obviously come a long way in the last few years and we feel the brand now is beginning to build that strong emotional connection.
But, you're right. We cover so many products. We're number one in mobile phones here in the U.S., we're number one in TV's. How do we sustain such a huge business? And a lot of that is about making the brand relevant in each category. So, making sure that the brand is articulated in the right way. And it's all about what consumers can get from our products. What they can experience.
We want Samsung to be seen as a brand that really helps the experience for our consumers. It provides something valuable to them. It's not just a piece of hardware. It's a really cool experience. And that's where we are focusing the brand and keeping some consistency across all of that product categories, but still connecting within each one because the needs are different.
Question: Where in your product line and in the world do you see your biggest growth?
David Steel: So, the U.S. has been a very fast growing region for us in terms of digital products here. TV's just been a huge growth area for us, we're now number one by far in the U.S. market. So, that's been very strong. We are also now seeing a lot of growth in mobile phones with the move to so-called Smart Phones, but every phone is becoming smart. This distinction between smart and unsmart is really blurring now, much more functionality into all our phones and that's helped get us to a number one position in mobile phones as well. So, those areas we see growth.
We are now bringing in some newer product areas like home appliances. Home appliances were traditionally thought to be, again, a less interesting category, something not to get very excited about. But we brought the same kinds of characteristics that we brought to TV's to mobile phones, to home appliances; great design, some cool technology, energy efficiency from a sustainability perspective, and now we've got a very fast-growing home appliance business.
So, a lot of these categories where we think we can grow our business, we still see a lot of room to grow here in the U.S. Obviously emerging markets too. Where there's demand around the world from the transition from analog to digital technology and then from standard definition to high definition TV's, a lot of demand there. So, we see a great potential not only in our products, but also in what our products can do.
Question: How do you encourage innovation in your business on a daily basis?
David Steel: Innovation is really key to our industry because life cycles are so short and so much of the brand building comes through what's new, what's great, what's exciting. We have to foster that in the workplace, we have to have an environment that encourages creativity that encourages some idea generation.
So, one of the ways to do that is to really empower designers because usually a technology company like ours, we focus on R&D and we look at what's the next big thing. So, it’s kind of linear thinking about, we had this last year, what will we have next year? A great advantage of designers is, they can think across different disciplines. What if we take something from here with something from here? What if we look at the user interface from this category and put it together with the physical shape of this category?
So we've really empowered our designers. We set up design studios around the world so we can tap into local talent and we can also understand consumer tastes and preferences around the world, and empowering designers to bring together some of these discrete insights that view technology as a building block. Technology is not the end goal, but technology is what really facilitates the consumer experience. So, that's a large piece of how we've become more innovative, more creative.
Question: What’s been a successful marketing campaign for you, and how did you execute it from start to finish?
David Steel: So, what I think one of the marketing campaigns here in the U.S. that's been very successful for us has been around NFL sponsorship. So, we're the official HDTV of the NFL and that gives us, obviously, a good association with sports, which is a big passion point for consumers here. But we've really activated across a number of different ways, but the key there, I think, is all coming from the passion of consumers. So, we went out and we've done a lot of research over the years into why consumers buy TV's. And the number one, sort of purchase driver for TV is around sports. That's what people want to watch on the big screen TV, and it's very communal, you want to have your friends over and enjoy it together. And that's reflected in the way people buy TV's.
So, we've done a big campaign this year with large scale TV's so that you can really understand the benefits of watching those TV's to enjoy sports and bringing in the NFL and the football connection. So, we were written up recently in the New York Times for this as being an example of a very exciting marketing campaign that's brought together consumer passion points together with sort of multi-channel activation, really cool TV commercial, but all of it rooted in the insight from consumers that this is what is meaningful for them for watching TV.
Again, it's part of this change from just being a piece of hardware to being something that you enjoy, a really wonderful experience and sports now is just unbelievable in HD on a live screen.
Question: What lessons does that campaign hold for you and other industries?
David Steel: I think what it really says to us and probably as a technology company we need to learn this lesson more than any other, which is to focus on what really is a great experience for consumers. So, the technology companies like ours, it's always easy to just default to looking at the engineering side of things and this is cool, we can make it thinner and so on. But what is it that consumers really want and what is it that's going to be just this wonderful experience for them?
So, we spend a lot of money in Samsung now to look at that "Wow" experience and even looking at the way in which people unbox their products. There should be that "Wow" moment when you take the TV out of its box, when you take the mobile phone out of its box. Just that sense of excitement of emotion. So, it's really moving from technology to being about emotional connection, and that's where the marketing campaign comes in too.
Question: Have you ever successfully marketed a product without prior consumer demand or insight?
David Steel: You know, we had products a few years ago when I was working in Korea where it was really at the early stages of convergence. So, putting things together and saying, "Let's take a phone and let’s put a camera basically together with it." And that was like the first camera phone some years ago. And that notion of just putting things together really focused on technology and then pushing it into the market. Those things often didn't sell very well. Why? Because consumers didn't really see a need for them, and also because they sacrificed product, so we weren't getting the best product features and the best functions that consumers wanted.
So sometimes when technology isn't aligned with where consumers are, and it's just pushing a technology solution to a problem which they don't feel they have, then that's where I think we can get in trouble. But the more we are rooted in really understanding what people are buying, what their unmet needs are, what sort of goals they have really, from their products. That's where we can build successful marketing.
Question: What is the future of mobile phones?
David Steel: So, mobile phones have just been a tremendous industry and obviously a great business for Samsung. We are now number two globally and number one in the U.S. and the numbers are staggering. We'll sell more than 40 million mobile phones this year in the U.S. market. More than one very second is being sold with the Samsung brand name in the U.S. market. And globally, we are selling about five every second. So, the scale of this business is incredible. Globally also, one in five people will buy a mobile phone this year among all brands. One in five people on the planet will buy a mobile phone. So, that gives you a sense of the scale of the business.
So far, in many cases, it's been focused on voice communication. That is where it really started, as a way of people being able to talk to other people. But now we are in this amazing transition of going to so-called "Smart Phones." And like I said before, they've been regarded as a different category. Something separate. But we really see it all coming together now. Phones are, in general, becoming smarter and smarter, which means more functions, more features, more ways to enjoy exciting content. So, the phone is becoming a way to communicate with other people, social media can be build in, social networking, you can enjoy multi-media functions, GPS for navigation. So the whole gambit of content can be delivered through phones.
It is the most personal object we all have. We can leave home and leave our wallet behind, but if we leave home and we left our phone behind, chances are we're going to turn around and go back to pick it up. So, it's that sort of piece of who we are. That also connects to another trend that I've been talking about which is more about design and emotional connection because it really is such a piece of who we are. So when we are looking to buy a mobile phone, it's about the look of the product as it reflects our personality, what we are going to use it for. It is such a personal item for everyone.
So, that trend towards more content, services, really cool hardware that's exciting to use, great user interface going beyond just being a phone and being a really smart device that's something you will have with you all the time. You use it to help you with all sorts of situations and it really enriches your life because of the kind of content you can get through it.
Question: What has Samsung learned about mobile phone content, and how will it change in the future?
David Steel: One of the things we have been learning about content on the phone is it needs to be optimized for the phone. So, we're seeing much more about short form content that can be enjoyed on the phone. Like video clips and things like that but are really optimized for a smaller screen.
But it's not just about video, it's also about the way in which people are communicating. Look at the growth of social networking services. People wanting to exchange short messages with each other, like Twitter, or post **** social media sites. All of that now needs to be optimized into a mobile phone. It could have a physical keyboard, could have a touch screen. How do we really fit that into a device to make it easy to use? That's the big opportunity now.
Question: How is globalization currently affecting business, and how can businesses best adapt to this trend?
David Steel: I think it's very important that we all think about globalization in business. I know sometimes globalization has other meanings which can inspire more emotions, but just for business, we are in a global competitive landscape now. And so, as students who want to have a business career or as business executives think about their career, getting international experience and international understanding is very important.
I grew up in Europe; I came to the U.S., when I finished business school I really wanted to have experience in Asia. I worked for a bit in Japan, but Samsung gave me to opportunity to go to Korea and as it turned out, I spent 10 years there. That really gave me a great understanding in the need to manage multi-cultural, multi-national teams. So, more and more, we are looking to leverage the capability of teams and individuals in different places in the world looking for design expertise here, R&D expertise here, looking for marketing expertise locally in markets around the world. How do we build a very powerful organization that spans those very different countries and cultures? That's where I think experience in different regions is very, very important particularly with the growth in Asia. I mean, Asia is such an important region now, not only as a manufacturer and producer of product, but also as the source of great innovation and increasingly also as the source of great demand for product. So, having understanding of what Asia is all about and I'm even committing a big mistake there to say Asia, just like it's Europe. Recognizing all of the national differences, all the cultural norms within in Asia. Asia is such a varied place. So, understanding some of that and being able to implement it into your management skills so that you can build teams, you can manage effectively, and really set common goals but have everyone aligned to work towards them.
Question: What were the biggest challenges you faced while managing a team in South Korea?
David Steel: People ask me about challenges and the number one thing, which they usually expect is language. But language is usually the easiest to get over. I mean, the worse case, you have a translator, but increasingly companies like Samsung, English is becoming the de facto language of communication. So, language really isn't that. It’s more around understanding the cultural norms there. Korea is a country that is very much based on groups. The U.S., Europe, much more based on individuals. So, how do you understand the norms of the group culture and how you can manage in that environment. So, people say to me, "It must have been very difficult for me." I think, actually, it must have been more difficult for the people who worked for me because they probably thought they got this crazy boss who is marching to a different tune, who's got different ideas. But a lot of it though is just about give and take. So, I should respect the way they do things because it’s been very successful. Look at Samsung's performance, 19th strongest brand in the world, profitable, $100 billion market cap. This company has been extremely successful.
So, I have to respect those strengths, but I also have to try to bring my own understanding, my own expertise in how we might do things in a different way. How we can build a stronger global footprint for our business. So, that's where I think, really at the human level, it's so important you get to know the people you work with. Spend a little bit more time than perhaps you would in the U.S. or in Europe to build relationships to understand who people are and then really have that flexibility of give and take, trying to understand each other, communicating very openly, and really, as I said before, leveraging the strengths of each individual and of each national team.
Question: What separates business in South Korea from business elsewhere?
David Steel: Oh okay. I think if I had to pick out the one characteristic from Korean business that really separates it from other countries where I worked; it's about passion. So, it’s just this tremendous commitment, tremendous intensity, setting a goal and really aligning everyone with achieving that. When you think about Samsung, this company has been built on a dream in many ways. We just celebrated our 40th anniversary last month, so we are quite a young company in the technology space. But Samsung electronics has really distinguished itself by setting these crazy goals, these stretch goals that people said, "Wow, you know, that's so ambitious. That won't be possible. You don't have the capabilities, or expertise," or something like that, and then getting there.
So, 40 years ago when we started the TV business and we were, let's say, 20 years behind our competitors, who would have believed now we would be number one globally and really acknowledged as the leader in the TV industry. Same thing for mobile phones now at number one here in the U.S. market in selling mobiles.
So, that notion of setting an incredible goal and then the passion, the intensity, the commitment to making it happen. And I think that is something where, if you take it back to the underlying culture, that strong group orientation that Korea has, to set that sort of goal and to get everyone working towards it, that's just so very powerful. And I think that’s what has propelled us to where we are today. Now it's, how do we match that with some other characteristics that are really around the innovation and creativity and that's going to make just an amazingly strong company going forward.
Question: What qualities define a good business leader?
David Steel: We talk a lot internally about leadership in the Samsung context and I would pick out a few characteristics. Number one would be a vision. So, as a leader of any organization, whether it's one person or a hundred thousand people, setting a vision for that organization is the fundamental responsibility of the leader and it's also their challenge to really get people aligned and excited by that. So, I think vision is very important.
I think another thing is the follower-ship. You can only have leaders if you have followers. And that leader needs to really instill in all of the people working with him a sense of shared goals, of open communication, common responsibility. So, if you're a leader, what are your responsibilities to the people who are working with you in terms of open communication and so on?
And the third characteristic, I would say, it's back to the discussion about globalization, is you've got to have a global mindset. So, you've got to have the flexibility to understand different countries, different cultures, how you build your business across a global footprint.
I would say those are the sort of key elements of business leadership. But number one, easily, is vision.