Marketing Principles of Samsung: Analytical Essay

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Marketing Principles of Samsung: Analytical Essay

Executive Summary

This report was written to show what is Samsung’s marketing strategy and how do they promote their phones using different marketing mixes. This report draws attention to the fact that Samsung is leading the market share against Apple and other brands in the last year at 26.15%. Thus, the report shows how Samsung stays at the top while knowing its positioning in the market. Samsung also have specific target customers, so it can focus its products to be more eye-catching to the customers. Thus, they have profiled their target customers and foresee those potential customers in the future. It also shows marketing mix considerations that Samsung takes to promote their products and how are the products promoted such as through advertisement, billboards and social media. Additionally, Samsung also faced some social and ethical issues as they promote their smartphones such as environmental, health and safety issues. Lastly, the report also shows an example of a marketing plan for the product chosen.

1. Introduction

Samsung is one of the world’s largest producers of electronic devices. It has become one of the most recognizable names in technology. First released in July 2009, the first Samsung Galaxy really put Samsung at the forefront of people’s minds when it came to Android. Samsung has been dominating and price ranges of the Android market from the Galaxy S series of phones. In the first quarter of 2012, Samsung became the world’s largest mobile phone maker by unit sales. Currently, Samsung has launched many different Samsung Galaxy Series, which have been very well-known in the market. Samsung Galaxy smartphone series not only became the company’s most admired product but also often topped lists of the best-selling smartphones in the world annually.

1.1. Product Description

Samsung Galaxy S9

Samsung Galaxy S9 comes with a 5.8 inches LCD screen, Android 8.0, and Octa-core. It is dual sim compatible and allows a microSD card. It has an internal memory of up to 256GB with a 4GB ram. The back camera is 12 megapixels while the front camera is 8 megapixels. The phone comes with a fingerprint scanner, facial recognition, and iris scanner as different features to unlock the phone. The battery is a Li-Ion 3000mAh battery that allows wireless charging.

1.2. Projected Sales Revenue

Samsung’s difficulties in the mobile market have been worsened by its lack of innovation to improve the sales of its premium Galaxy series smartphones. The mobile business billed 2.7 trillion won ($3.25billion SGD) in quarterly operating profit. There is a drop of 34 percent from the previous quarter.

1.3. Potential Market Share

Mobile Vendor Market Share Singapore from Jan 2018- Jan 2019

Samsung has had a little over one-fourth of the mobile market share in Singapore in the last year. Compared to their competitors Apple and Xiaomi, that has only 13-14% of the market share. This shows that Samsung has double the market share of its competitors.

2. Key Marketing Concepts & Principles

2.1. Positioning in the market

Samsung delivers cheap and innovative products without an emphasis on design. This is an important factor where Apple’s success won Samsung. It was the design on its iPhone. Now Samsung puts more focus on design so that they are able to compete with Apple in a more effective way.

Oppo
Xiaomi
Samsung
Apple
Perceptual Mapping for Samsung and Competitors

2.2. Types of Segmentation

Samsung’s geographical segmentation targets 80 Countries Worldwide. While their demographic segmentation targets both males and females from the age of 18 to 65. Most of the consumers are probably students and working adults. Samsung’s behavioral segmentation targets consumers based on what benefits they are searching for such as excellent quality and beautiful design. While their psychographic segmentation targets middle- and upper-class people, based on their lifestyle and personality.

2.3. Profile of target market

Samsung mobile targets a huge range of consumers. The target age of customers ranged from the early 20s to the 60s. Thus, if a person can afford to buy and use the product, Samsung has products for them.

Teenagers to young adults aged 18 to late 20s. This age group of customers is Samsung’s mobile main target customers as they are mostly technology savvy. This group of customers is increasing as Samsung foresees that this group has better spending power in the future.

Adults were aged 30 to 65 and above. This specific group of targets, the biggest portion of Samsung’s target market. This group of consumers has the most capability to purchase any of Samsung’s products in the market. This group of customers will continue to increase in future years.

3. Marketing Mix Considerations

3.1. Product

Samsung Galaxy series are among the most innovative presently out there in the market. The whole series consists of various models, and most of them acquired more fame than expected. S9 and S9+ are two well-known models whose main feature is the innovative camera that acquired its admiration from famous media brands. Samsung has included extra features to make the phone more attractive such as exclusive rewards for using Samsung pay. Data security has become a huge problem. Thus, Knox-like features are important for smartphones to ensure that your data is kept safe and confidential. Additionally, the S9 and S9+ come with facial recognition features. Samsung has always done its best in providing its users with an immersive experience.

3.2. Place

Samsung products are sold in the market through different channels such as sales and service dealers, local retailers, and distributors. Samsung retailers sell products through multiple third-party dealers concentrating on the demand and opportunities. In Singapore, there are many retailers and distributors selling Samsung products. Some such as Singtel, Starhub, and M1. Samsung also has its own stores in Singapore to cater to sales and service. However, a huge part of sales now takes place online. Galaxy phones and accessories are also available at other e-retailers like Lazada and Zalora.

3.3. Price

Samsung has different pricing methods. Some limited-edition products, which are only found in certain countries, are generally more expensive to meet the demands and use skimming prices. Samsung uses the skimming price technique, whereby they get a high price for their own product before their competitors enter the market. However, if the product becomes old or overtaken by others, Samsung decreases its price. In some cases, Samsung also uses competitive pricing schemes to be able to surpass the competitors in the market.

3.4. Promotion

Digital channels are the primary promotions of Galaxy S9 such as social media, technology blogs, and paid advertising. The phone has earned great levels of coverage in media owing to attractions like its impressive camera and facial recognition features. Tech blogs have reviews and more information on its specifications and pricing. E-retail brands that sell Galaxy smartphones played a huge role in the promotion of the S9. Famed celebrities are made as its brand ambassador to support the promotion of their smartphones and their brand. Samsung’s strategy is to use part of its revenue produced from sales to use for promoting its product.

4. Socially Responsible and Ethical Issues

4.1. Ethics

Health and safety risk poses a threat to consumers as the phone may emit strong radiation. For example, Samsung released the Galaxy S7 in 2016, which exploded due to battery problems. The cause of the explosion was Samsung’s failure to check the safety of the phone due to the rush for the release date. Many consumers were victims of the situation, and Samsung was unable to recall the phone in time. Due to this many consumers lost trust in Samsung. Therefore, Samsung compensated consumers with refunds or another model of Samsung phone.

Environmental problems are caused by producing smartphones. The impact of smartphones on human lives isn’t as simple as it is. Once they are spoilt, thrown away or recycled, smartphones will find themselves in e-waste dumps in China and low-income countries. Only 10% of the smartphone is recycled, workers would salvage valuable materials and metals. The rest of the parts are then tossed into the e-waste dumps. Workers will burn the e-waste causing pollutants into the surrounding environment and to workers themselves.

4.2. Social

Privacy can be another issue of ethics in society. Most of the world currently carries a smartphone with them everywhere. Thus, smartphones are a way for people to keep data that are confidential for easy access. This can be a huge problem as hackers can easily invade one’s data and gather information quickly. Thus, many companies, for example, Samsung is trying to improve the security in their smartphone to prevent the invasion of privacy and stealing of data.

Smartphone overuse is a problem to the current society as people are consuming most of their time on their smartphones to an extent that it affects their life negatively. Smartphone addiction is a form where people cannot stay away from their phones and many issues arise from this addiction. Due to the extensive impact on our everyday life, people become unaware of their surroundings and unable to communicate face to face properly. The overuse of smartphones caused society to have more physical problems such as neck pains and bad eyesight. This caused society to also have a weaker interpersonal relationships with others.

5. Information Communication Technologies

5.1. Place – Social Media

Samsung Mobile is solely used for promoting of Samsung smartphones on Twitter. It updates news related to upcoming Galaxy models regularly. Besides Twitter, other social media websites are used to promote its products and engage its customers. YouTube is the most reliable website for video promotion. They have a larger and wider audience. Samsung has made many magnificent videos to advertise its Galaxy smartphones. In this way, Samsung has used many different channels including social media to promote its Galaxy S9 and S9+.

5.2. Promotion – Digital Marketing

Samsung relies a lot on digital technology for the marketing of its products. Firstly, Samsung promotes its Galaxy smartphone through its website. Furthermore, Samsung uses many types of media to promote its smartphones. S9 was also promoted through events so that the product could be exposed to the public swiftly. A huge population of people can be found online as smartphones are designed to help us stay connected. Thus, this allows people to know about Samsung’s new product rapidly. Samsung adopts digital marketing techniques that include paid commercials, video marketing, brand website, and social media. However, once their product has been known in the market, it is easy to reach out to potential customers as Google will do the rest of the job. Any search for Samsung Galaxy S9 results from Lazada and other e-retailers will be shown at the top and websites including Samsung’s own website.

6. Marketing Plan

The objective and goal of Samsung is to generate sales profit from promoting and selling of the Samsung Galaxy S9. Thus, they must find a way to be able to win the competition against Apple and other brands. Therefore, Samsung will have to promote the innovative features of the Samsung Galaxy S9 which is the camera and the facial recognition feature.

The strengths of Samsung are that they are innovative, great with design, low-cost production, and a large market share. The weaknesses of Samsung are that they have very strong competitors, low-profit margins and products may not always be user-friendly. The opportunities for Samsung are they can improve in the quality of their products and take advantage of the raising smartphone market. Some threats that Samsung are facing are more competition in the market with new brands, a slow market for developed countries and a rapid change in technology. Samsung will plan to promote its new Samsung Galaxy S9 through every type of social media. As currently, almost everyone is always connected to the internet. Samsung will implement things such as pre-ordering of the phone and promotions to get regular customers to upgrade or buy the phone. Such as pre-ordering the Samsung Galaxy S9 will be given a free Samsung wireless charging pad and free screen protector. This will boost the sales of the phone as it sounds like a good deal for customers. Some resources that Samsung needs to promote the Samsung Galaxy S9 is that they need material such as advertisements, social media, and retailers to get the word out to the public. They also can run events to further promote to the public through the physical product itself. All the events require manpower thus they need to hire people to help support their promotion.

7. Reference

Specifications | Samsung Galaxy S9 and S9 | Samsung Singapore. (2018, June 21). Retrieved from https://www.samsung.com/sg/smartphones/galaxy-s9/specs
Bhasin, H., Prateek, Bhasin, H., Modi, A., & Bhasin, H. (2018, January 09). Marketing mix of Samsung galaxy, Samsung galaxy marketing mix. Retrieved from https://www.marketing91.com/marketing-mix-samsung-galaxy/
Telecomlead. (2018, July 31). Samsung revenue dips 4% to $52.28 bn as Galaxy S9 sales drop. Retrieved from https://www.telecomlead.com/smart-phone/samsung-revenue-dips-4-to-52-28-bn-as-phone-sales-drop-85603
Mobile Vendor Market Share Singapore. (n.d.). Retrieved from http://gs.statcounter.com/vendor-market-share/mobile/singapore/#monthly-201801-201901-bar
Bondarenko, P. (2018, October 24). Samsung. Retrieved from https://www.britannica.com/topic/Samsung-Electronics
Pratap, A. (2018, November 15). Marketing Mix and Marketing Strategy of Samsung Galaxy S9. Retrieved from https://www.cheshnotes.com/2018/07/marketing-mix-and-marketing-strategy-of-samsung-galaxy-s9/
Samsung Segmentation, Targeting and Positioning: Multi-segment, imitative and anticipatory. (2017, October 12). Retrieved from https://research-methodology.net/samsung-segmentation-targeting-positioning-multi-segment-imitative-anticipatory/
Davis, M. (2018, October 05). To make a smartphone, lose your ethics. Retrieved from https://bigthink.com/matt-davis/to-make-a-smartphone-lose-your-ethics
Smartphone Overuse – A Growing Public Health Issue. (2017, February 28). Retrieved from https://www.omicsonline.org/open-access/smartphone-overuse–a-growing-public-health-issue-2161-0487-1000289.php?aid=86257
Singh, S. (2017, November 09). Is Samsung an Ethical Company? Retrieved from https://soapboxie.com/social-issues/Is-Samsung-An-Ethical-Company
A brief history of Samsung phones – the past, present and future. (2019, February 15). Retrieved from http://www.three.co.uk/hub/brief-history-samsung-phones/