What you need to know:

• Samsung has all but neutered the role of its Corporate Marketing team, with its CMO, plus heads of media and partnerships and data and platforms all set to leave.
• The sudden changes have been under new Samsung Mobile unit president Brian Cha in what some say is tussle for power with the fast-growing Consumer Electronics unit. 
• The future of Samsung's consolidated push in 2019 for creative, media, customer and data under CHE Proximity is unknown. 

Samsung Australia has reversed a strategic move it made seven years ago to centralise the marketing function servicing its powerful mobile division and the consumer electronics unit.

The company’s top marketing executives, including CMO Josh Grace, are set to exit. 

Samsung confirmed the move to Mi3 in a brief statement: “Samsung Electronics Australia can confirm organisational changes within Corporate Marketing. The reorganisation follows an evolution in the roles required in the team." 

But it later added a further comment, disputing that Corporate Marketing has been sidelined: “Product marketing has been managed within the respective divisions for several years, which will continue. Corporate Marketing remains an important part of our business leading brand and reputation,” per the spokesperson.  

Beyond CMO Josh Grace, the exits include Samsung’s Head of Digital, Data and Platforms, Mick Armstrong, Head of Media and Partnerships, Beau Curtis and Media and Partnerships Manager, Rebecca Johnson

The changes have triggered growing industry speculation on the rationale for the sudden overhaul under new mobile divisional President, Brian Cha, who is said to be the architect of the changes. Louis Kim heads the Consumer Electronics division, which since Covid is understood to have “closed the gap” on sales revenues and growth versus its bigger mobile sibling. 

Samsung’s group sales in Australia is estimated at more than $3 billion with mobile accounting for perhaps $2 billion. Consumer electronics is said to be at least $1.2 billion.

Power shift

Samsung is Google’s biggest global customer and Australia is considered one of the leading sub-regions. That was partly a result of Samsung's central brand, customer and data strategy. But tension between the corporate marketing unit and the mobile and consumer electronics divisions has been a constant, according to former Samsung executives who spoke to Mi3 on the condition of anonymity.

“Whatever the reason, it won’t be triggered by local business performance,” said one former exec. “It’s been damn good. Particularly on the consumer electronics side. Mobile always used to question how much of the total corporate pie they were paying for. It wasn’t really a local decision. The budgets come down from Seoul. There’s always been a bit of tension about who’s driving the agenda between Mobile and CE [Consumer Electronics]. If you’ve got five key messages on the website home page, who has got the three, who’s got two. That sort of thing was pretty constant.”

Said another: “Samsung’s funny. It does one of these mass cleanouts now and again. We haven’t seen one for a few years. It’s never about the people. I think these are redundancies but they will be replacing that team in some way. It does feel like they’re dropping the ball.”

One of the new priorities appears to be Samsung’s booming e-commerce business, which is still lagging the 14-16 per cent average in Australia for total retail sales. Samsung is said to be catching up quickly but still in the 10-14 per cent range. 

It also faces a tricky path building its direct-to-consumer sales while placating powerful retailers like Harvey Norman, JB-HiFi and The Good Guys. If Samsung offers price parity in its DTC business, retailers threaten to shift their allegiance to rivals. Still, there is renewed focus on e-commerce which locally and globally is understood to have Accenture working on the strategy and tech.

Timing issues

The timing of Samsung’s marketing shakeup will prove challenging. 

It consolidated its entire creative, media and data business with CHE Proximity (CHEP) in 2019 and proceeded to build out a sweeping overhaul of its data and customer strategy and governance. 

But now some industry observers who are across the Samsung business say that as the corporate marketing function is absolved, the risks will rise for data governance and regulatory breaches and that brand and media synergies will dissipate. 

“It’s going to be a bit chaotic, I suspect,” said one observer. “Samsung doesn’t genuinely have local control over its data. These companies are not really understanding what the requirements are. GDPR is not even on their radar. They may get some rude shocks along the way from someone like the ACCC.”

Another former Samsung executive concurred. “That would fit with the general approach from Korean companies,” he said.

As for what next for CHEP’s broad remit? “They’re shitting themselves,” said one with knowledge of the current situation.