A marketing channel is a system of distribution that allows the customer to choose the product and buy it. The creation of an efficient marketing channel is essential for the overall success of the marketing strategy of the company. Samsung is a global corporation, and it has numerous marketing channels. There are such marketing channels as: Samsung manufacturing unit –> C&F agent –>distributor –> small retailer –> customer. Also there is another one: Samsung manufacturing unit –> C&F agent –>franchised outlets –> digital plaza –> customer. However, Samsung does not have any direct marketing channels just like other multinational companies that produce customer electronics. Marketing channels are expected to provide numerous choices for the customers (Rosenbloom 6). Current marketing channels of the company were precisely planned, and current channel strategy is extremely effective.
Marketing channel strategy
Samsung uses all three types of the distribution for different electronic products. This corporation is extremely transparent with their marketing channel strategies. A company heavily relies on the intensive distribution. Products of the company can be seen in almost all of the electronics stores. Samsung opts for selective distribution when it comes to some models of the product. When such strategy is chosen, the company tries to focus on a particular demographics rather than overwhelming the customers with a number of products. The corporation often signs international exclusive distribution contracts that are often relatively short-term but provide benefits to both parties. E-marketing can now be called a part of the marketing channel strategy (Tamilarasan 5). Samsung is also extremely active when it comes to sales on the Internet. This company is able to utilize the advantages of all of the types of distribution to their full potential.
Value chain
The value chain is a series of processes that are performed to make sure that the product of high value is provided to the customers. Presutti, Jr. and Mawhinney state that “with the development of the concept of supply chain management over the decade, procurement, now more descriptively called supply management, is much more than a support activity” (149). This means that supply management is necessary for the success of marketing strategy. Samsung manufacturing unit is the most important part of the supply chain because it produces valuable electronic products that hold the most value for the customer. C&F agent sends the stored products upon request of distributors that offer a set of important services, help with promotion and deliver the product to retail stores. Retailers bring value to the customers by making special offers and discounts on the products.
Pricing strategy
Samsung currently uses the High-Value Strategy for flat-screen TVs. The quality of the products is extremely high, and they are not overpriced. Some competitors offer similar products that are much cheaper. However, those products do not possess the qualities that make Samsung products unique. The corporation also practices Superb Value Strategy with some models of the products. There are numerous ways to gain an advantage over competitors with different pricing methods. Increased price of a new product from the same company is a sign of a higher quality for the customers (Utaka 409). This means that a company may make newer models of the flat-screen TVs more expensive, even though they are not that better. Samsung could try out other strategies by producing other models of the product. However, the company does not want to ruin the reputation of a producer of high-quality electronics.
Works Cited
Presutti, Jr.William D., and John R. Mawhinney. “The Value Chain Revisited.” International Journal of Value Chain Management 3.2 (2009): 146-167.
Horizontal product differentiation is characterised by the tension between the desire to weaken price competition and increase market share. Product differentiation is a marketing strategy applied by many firms in the contemporary society. It is used to showcase the differences between various products. The strategy aims at making a certain good or service more attractive than others in the market. It makes the item appear better in eyes of the consumers by contrasting its unique qualities with those of the competitors. Horizontal and vertical are the two types of differentiation common in the global market.
In the former, the distinctions between products cannot be identified easily in terms of quality and taste. It means that two items may be of the same quality but the difference can be in the shape, the colour, or any other feature. Horizontal differentiation can help a company to capture a large market value. The reason is that products only vary marginally (Tremblay & Polasky 2002). Many firms report a tension between the desire to weaken price competition and increase their share in the market. Most of the horizontally differentiated products are associated with high competition in the market.
The reason is that all the items appear to have the same qualities to the consumer. It is up to the buyer to decide on the best product to take. Several things are taken into consideration when making a choice between such products. They include, among others, price. The pressure to weaken the prices of the items is aimed at reducing the level of competition in the market. In addition, a reduction in prices is aimed at increasing the market share. The reason is that many consumers will be attracted by the low value of the product.
With regards to horizontal product differentiation, it is important for managers to take into consideration different organisational costs. They should also consider how these costs affect the price of the final item. Organisational expenditures include those associated with production and administration. In most cases, horizontal differentiation is cheaper to the firms. In their attempts to reduce price competition, many business organisations discourage the improvement in the quality of their products. In horizontal product differentiation, addition of features is not necessary.
The only important this is to make sure that the appliance serves the recommended purpose. According to Melitz and Ottaviano (2008), advancements in quality may lead to a rise in the production costs. The firm may need to transfer such expenses to the consumer. As a result, the price of the commodity will increase, which is undesirable (Rosenkranz 2003). The reduction of the prices in horizontal differentiation is relatively small. Among other things, the manufacturers are aware of the fact that the reduction in prices is likely to attract many buyers. A rise in the number of buyers would translate to a higher market share.
As already indicated in this paper, horizontal product differentiation is based on the assumption that the reduction in price is likely to play a major role in increasing the market share of the firm. In this essay, the author will analyse the case of two companies involved in the production of electronic appliances in the global market. The two are Samsung and Life’s Good (LG).
The desire to weaken price competition and the aspiration to increase market share in horizontal product differentiation has implications on corporate decision-making processes. Most of these effects are associated with the specification of the products. According to Lee (2005), product specification critically analyses the information regarding an item. The details relate to, among others, the product’s application standards, its design requirements, images, and the manufacturer. Firms that employ horizontal product differentiation do not usually have middle managers (Melitz & Ottaviano 2008; Lee 2005). What this means is that all the operations regarding the entity and the production process are controlled by high-level managers.
The companies are also referred to as flat organisations. The firms have to cut administration costs by ensuring that the number of employees is minimised. Corporate decision-making happens at different levels of the entity. When it comes to differentiated goods and services, the right decisions need to be made with regards to product specification. The aim of such decisions is to properly guide the consumer. The economic theory argues that absolute price difference matters. According to the theoretical framework, relative prices are not that important. When making decisions, the management must taking into consideration consumer preferences. The preferences should be factored in before considering the change of prices.
Product specification must pay attention to consumer preferences. In light of this, the management has to communicate with the potential buyers to know what they want and how they want it. In horizontal product specification, the quality is not the major focus of the item. Some of the consumer preferences that should be given priority when manufacturing a product include its colour, design, and shape. The three items are related to fashion. Fashion entails the outer appearance of a product. It does not necessarily have to do with its quality. In context of the real world industry, Samsung and Life’s Good (LG) are two perfect examples to use (Lee 2005). The two companies are well-known in the production of different electronic appliances. For the purposes of this study, the focus is on the refrigerators distributed by the entities. The items are some of the products the two specialise in.
Both companies continue to use horizontal product differentiation to attract consumers. The improvements in the designs of the products by the two entities have played a role in increasing their market share over the years. A case in point is the prices of LG and Samsung refrigerators. Samsung 255 Litre fridge freezer costs $999. On its part, LG 240 Litre costs $749. The general difference can be seen in the price and the size of the products. However, there are other differences that include colour and shape (Armington, Emch & Heyer 2006).
The two companies are industry rivals who have created customised product specifications to ensure that their items suit the preferences of their customers. Some of the customised specifications include the inclusion of trays and small compartments inside the refrigerators. The addition of the new features could have made the companies incur additional charges in the production process. However, the main idea behind making these changes is to ensure that the consumers do not go far when trying to satisfy their needs. To reduce the competition in the market, the manufacturers lower their prices and improve the appearances of the products. For example, LG used to produce white refrigerators for the consumers.
However, after market research, the management noted that many people prefer other colours other than white to curb the dirt effect (Ando 2006). As a result, the company embarked on the distribution of products of different colours and designs. The move attracted a large market share. The increased share was mainly because the firm offered cheaper prices compared to other companies. The consequences of the corporate decision-making process prompted the company to update its products to match the prevailing trends. The move enhanced customer satisfaction. On its part, Samsung has features that are similar to those found in the products distributed by LG. However, the company does not command a large market share because of the high prices of its products.
The management of the two companies have been forced to employ marketing tactics that are aimed at helping them become famous to the public. The decision of making the electronic appliances available to consumers has played a role in increasing the market share enjoyed by the two firms. However, price has been the influencing factor. For example, LG has been able to minimise its operation, production, and administration costs with the aim of ensuring that it commands a large market share through reduced prices. Samsung, on the other hand, has also acted to minimise its costs. However, production cost still remains high, thus the higher prices (Fontagne, Freudenberg & Gaulier 2006).
To beat competition in the industry, decisions of reducing the costs associated with the manufacturing process have to be made. The management of LG has changed some specifications of the refrigerators to capture a large market share. Some of the new specifications include single door refrigerators, side by side products, and top mount coolers. On the other hand, Samsung has new specifications that include the French door and side-by-side. In addition, the company has a 4-door flex in its new products. The firm has also diversified the colour of its products to include stainless steel, stainless platinum, black, and white. However, some of the new specifications in Samsung, such as stainless platinum, have forced the company to increase the prices of the products.
The objective of such increases is to protect it from losses. The use of stainless steel in the production process does not affect the refrigeration properties of the company in any way. In the end, LG and Samsung companies provide the same refrigeration services. The only difference between them is the price of the products. Most consumers will prefer purchasing the cheaper items (Leahy & Montagna 2001). Horizontal product differentiation in LG and the desire to emasculate the price of its products has helped the company to beat competition in the industry. It has also helped the company to increase its market share in many regions of the world.
In conclusion, managers should consider the prices of items when making decisions regarding horizontal product differentiation. The reduction of administration and production costs can play a major role in reducing prices when compared to other companies in the same industry. Customer preferences must also be taken into consideration if a company wants to increase its market share. The specifications of a product arrived at by the management should cover the needs of the customers (Leahy & Montagna 2001). The inclusion of new conditions is expected to increase the market share. The new specifications should not lead to an increase in prices, making the product more expensive compared to similar items in the market.
References
Ando, M 2006, ‘Fragmentation and vertical intra-industry trade in East Asia’, The North American Journal of Economics and Finance, vol. 17, no. 3, pp. 257-281.
Armington, E, Emch, E & Heyer, K 2006, ‘The year in review: economics at the antitrust division, 2005-2006’, Review of Industrial Organisation, vol. 29, no. 4, pp. 305-326.
Fontagne, L, Freudenberg, M & Gaulier, G 2006, ‘A systematic decomposition of world trade into horizontal and vertical IIT’, Review of World Economics, vol. 142, no. 3, pp. 459-475.
Leahy, D & Montagna, C 2001, ‘Strategic trade policy with heterogeneous costs’, Bulletin of Economic Research, vol. 53, no. 3, pp. 177-182.
Lee, K 2005, ‘Making a technological catch‐up: barriers and opportunities’, Asian Journal of Technology Innovation, vol.13, no. 2, pp. 97-131.
Melitz, J & Ottaviano, I 2008, ‘Market size, trade, and productivity’, The Review of Economic Studies, vol. 75, no. 1, pp. 295-316.
Rosenkranz, S 2003, ‘Simultaneous choice of process and product innovation when consumers have a preference for product variety’, Journal of Economic Behavior & Organisation, vol. 50, no. 2, pp. 183-201.
Tremblay, J & Polasky, S 2002, ‘Advertising with subjective horizontal and vertical product differentiation’, Review of Industrial Organisation, vol. 20, no. 3, pp. 253-265.
In 1995, it was decided to create a single Samsung company in China, for previously, various operations were conducted separately by different Samsung units.
The Chinese market
The Chinese market was strategically important. At the time, China’s market was the third greatest in the world after NAFTA and EU in TV sales. This caused stiff competition. Sony and Matsushita dominated the high-end market; companies such as Sharp, Toshiba, Mitsubishi, JVC, Sanyo, and Hitachi were also influential. Furthermore, over 20 companies worked with the low-end market.
In 1995, China produced 16 million color TVs, and 2 million out of these were exported to other countries. The small (<17-inch) color TVs were becoming unpopular, whereas the demand for medium and large screen (18-21-inch) sets was rising; together, they accounted for 83% of sales in 1994.
In 1994, there were 80 million urban households in China; ≈80% had a color TV, so the urban market was almost saturated. Simultaneously, only 28% of the 220 million rural households had a color TV. It was predicted that there would be more than 200 million people whose official purchasing power was more than $1000 (i.e., who could afford such products as TVs and washing machines). Furthermore, many Chinese did not report their full income, so their purchasing power was even greater. And still, rural consumers preferred cheaper TVs with reasonable quality (mainly local manufacturers), whereas urban buyers preferred functionality and good brand names (e.g., Japanese products).
As for the market environment, the first mover enjoyed major advantages such as the loyalty of the customers in China; the first impression was long-lasting. Importantly, Japanese manufacturers of color TV received significant recognition in this market.
China also implemented a strong protectionism policy. The tariff for color TVs dropped from 100% to 50-65% in 1995. The rates were to be decreased further (to 36% in 1997, and to 15% in perspective), but in 1995 they still were high. In addition, the entry to the market was hindered by the product differentiation via the recognition of brand name; it was hard to establish a new brand name.
A crucial method for the competition was obtaining cost competitiveness via the economies of scale and the learning effect; before a firm gained such an advantage, the scale and learning effects were a barrier.
The situation at home
Simultaneously, in the 1990s, in Samsung’s “homeland” (South Korea) labor costs were rising, the government’s subsidies were cut, and the economy was being significantly restructured, which led to decreased competitiveness in low-end products at home. In addition, Korean market entry barriers were lifted, which increased the competitiveness of the internal market and forced firms such as Samsung to seek compensation for the competition abroad.
Samsung in the U.S.
Samsung entered the U.S. market in 1979, focusing on the low-end segment, using Korean advantage of low labor costs; it adopted the “buyer brand name” policy, simultaneously creating a strong image. In 1984, Samsung also created a subsidiary in the USA to address the trade barrier. By 1995, it became one of the top companies in the U.S., having ≈3% of the market share.
Samsung’s initial plans for the full-scale entry into China
Samsung first penetrated the Chinese market in 1985 (indirectly, via Hong Kong), but, due to governmental barriers, it only started moving there actively in 1992. In 1995, Samsung China Headquarters (SCH) was established to coordinate the dispersed operations of the company in this country. It is stated that SCH planned to become oriented to the high-end market, but Seoul was skeptical about this and proposed to aim at the low-end market and to employ a volume-oriented strategy.
Recommendations
Based on this information, it is possible to provide the following recommendations:
Endeavor to establish a strong brand name in China.
Focus on selling 18-21-inch TVs.
Focus on the high-end market initially, but diversify the products offered to cover the low-end market as well once the protectionism policy in China is lightened.
Modern technologies continue to revolutionize the manner in which business processes are done. The case “Samsung and the gamification of marketing research” reveals a number of issues surrounding the use of gaming to meet companies’ business needs. Analysts believe strongly that gamification is a win-win strategy for both customers and companies (Koenig-Lewis, Marquet, & Palmer, 2013). This is the case because more people who have a college education and live in urban areas have the potential to support this business model. Using the case of Samsung Group, this essay describes how gamification is changing the way companies engage and communicate with their customers.
SWOT Analysis, the 4 Ps, and Target Market
SWOT Analysis
Strengths
Companies that use gamification find it easy to engage their customers
The practice increases customer loyalty and trust
The practice presents timely market research data
Gamification of marketing process minimizes business costs
The approach influences consumer behaviors
Customer relationships are nurtured
The approach can support a company’s business model
Weaknesses
Gamification of marketing research is still in its infancy
Many customers still do not have access to the internet
The model will mainly target customers who play online games
The strategy might not deliver balanced information to the company
Opportunities
The current development of online games supports the approach
Many people are playing online games than ever before
The current 4G technology will support the model
Globalization is promoting the use of gamification
More people have access to the internet
Threats
Some customers might offer erroneous or false testimonies
Online-based applications or games can be easily affected by hackers
Some media platforms and online games can affect the future of gamification for market research
Individuals addicted to online games might not offer many benefits to the company’s marketing agenda
4Ps of Marketing
The 4Ps model of marketing focuses on the unique aspects that should be considered by companies that want to realize their business objectives. The first aspect of the 4Ps model is the product. Companies planning to achieve their goals must begin by manufacturing superior products that resonate with the changing needs of their customers (Boone, 2013). Samsung is one of the leading companies that embrace this aspect. The firm has gone further to come up with superior products in order to support the gamification of marketing research.
The second aspect focuses on place. The idea of using the internet is revolutionary for companies such as Samsung. This approach has attracted many customers who play online games. Incidentally, the process has made it easier for more people to analyze most of the products marketed by the company such as phones, television sets, refrigerators, and microwaves (Koenig-Lewis et al., 2013).
The third attribute of 4P is promotion. This aspect is what benefits the most from the gamification process. At Samsung, gamification has become a new strategy that engages more customers with a wide range of products. Samsung’s use of social media networks, websites, and gamification supports its promotional strategy (Boone, 2013). Consequently, more customers have been able to learn more about the firm’s products.
Price (or pricing) is the fourth aspect of the 4Ps model. Companies such as Samsung have understood the importance of competitive prices to market their products (Boone, 2013). The gamification of marketing research makes it easier for more people to be aware of unique products and their prices. This approach has supported the firm’s marketing and promotional strategies.
Target Market
A proper understanding of the target market is the first strategy that should be considered by companies that want to market their products successfully. The idea of gamification of marketing research is not appropriate for every target market or population. This is the case because not all people use the internet or visit the company’s website. Whenever identifying the right target market for the gamification approach, Samsung begins by focusing on more people living in urban areas. Individuals with sustainable income and living in urban areas are usually targeted. For instance, more women aged between 30 and 40 years have been attracted (Boone, 2013). The approach has made it possible for the company to get useful marketing information and use it to promote business performance.
Individuals who have a college education appear to form a bigger percentage of the targeted customers. These individuals have better incomes or salaries, live in urban areas, and embrace online games (Conaway & Garay, 2014). By so doing, Samsung Group has been able to collect adequate information that can be used to drive business performance (Koenig-Lewis et al., 2013). Future studies should focus on different market segments based on age and personal preferences. This knowledge will result in new games that can meet the needs of the targeted customers.
Analysis and Discussion Questions
The gamification of marketing research is a new process that can make it easier for more companies to build customer trust. Many companies have embraced the concept to develop positive customer relationships and gather useful marketing information. At Samsung, users who post numerous posts on the company’s website will be rewarded through the Samsung Nation program. This strategy has encouraged more people to share useful information with other social media users. By so doing, Samsung has been able to track the purchasing behaviors of its customers (Lucassen & Jansen, 2014).
With this kind of practice, Samsung has managed to analyze the unique behaviors and expectations of the customers. The collected information is eventually used to support the needs of every future customer. This objective is achieved by sharing the information with the research and development (R&D) department. The R&D department has found it easier to produce superior products and improve existing ones (Boone, 2013). This practice explains why Samsung remains a leader in the global technology industry.
When the targeted employees are rewarded, it becomes easier for them to share their knowledge with other users. Consequently, the company finds it easier to attract more customers. This kind of approach has led to online discussions that have the potential to promote business performance (Conaway & Garay, 2014). Nurtured client relationships encourage more people to purchase the company’s products. It is therefore acknowledgeable that companies that use the gamification strategy to target the right customers will find it easier to realize their business goals.
Conclusion
The gamification of marketing research is a new wave that cannot be underestimated. This is the case because the process is capable of influencing customer behaviors and promoting marketing processes. Companies that want to realize their goals must embrace the power of social media networks and gamification. This approach will guide companies to develop new models and products that resonate with the emerging needs of their customers (Lucassen & Jansen, 2014). A proper analysis of the target market can ensure to ensure the business model is implemented successfully. Finally, companies that fail to consider these new recommendations might lose their competitive edges.
Lucassen, G., & Jansen, S. (2014). Gamification in consumer marketing: Future or fallacy? Procedia – Social and Behavioral Sciences, 148(25), 194-202. Web.
This report provides credible information regarding quality provisions in Samsung Corporation. This organization manufactures and sells electronic products. It is important to adopt ‘quality electronic production techniques’ due to the sensitive nature of electronic gadgets. This forms the proposed program of this report. Samsung Corporation has various subsidiary units and assembly plants globally.
It manufactures electronic commodities including TV sets, LCD, computers, smartphones, and semiconductor chip equipment. The company has maintained its market dominance and was recognized as the global largest IT producer in 2009. Presently, the company faces stiff competition from other rivals; this has threatened its performance negatively. Accordingly, Samsung has registered low ratings on scientific, environmental, and social ratings despite credible advancements in technologies. Its score is below 10 according to the rating executed by GoodGuide (2012).
The methodology I developed helped to promote the success of this study. Initially, I developed a topic that identifies quality electronic production techniques in the company. A credible investigative technique was adopted where the purposive information gathering method was applied. Additionally, this report proposes the facilitation of Samsung Corporation’s growth and advancement in its competitiveness.
It also identifies quality parameters that should be integrated into the electronic processing and assembling system. Concurrently, the paper covers the establishment of quality aspects to ensure that the concerned products are of outright quality. To ensure that the report serves its purpose adequately and accurately, a comprehensive study was undertaken based on the topic. The study facilitated the provision of analyzed and authentic information that holds relevance.
Secondary techniques were used to aid in data gathering. Findings unveiled that the adoption of quality electronic production techniques is crucial in advancing people’s lifestyles. Analytically, the effective production of quality electronics requires proper planning and the use of non-defective materials. This is to; minimize possible operating defects that can impede an individual’s productive capacity and social integration (Lehman et al, 2010). It is recommendable for Samsung to implement quality electronic manufacturing techniques.
Introduction
This report will address growth-oriented and credible performance issues established to steer the production of electronic facilities (with functional value) in Samsung Corporation. Based on the executed research, this report will incorporate the identified problem, methodology used, results, analysis, and recommendations that can be adopted by the company to enhance its quality provisions.
The discussions will be based on the diverse subheadings set to improve service delivery in Samsung Company. It will be useful to use secondary data in this report based on their validity and relevancy in the provisions of quality improvement. The results depict the information as presented by the electronic data on the topic under discussion and the analyzed information from the secondary resources. Analytical aspects used in this study provided credible information on quality provisions in Samsung Corporation.
Consequently, recommendations will incorporate the proposals to be put in place to advance and eradicate possible defects that may compromise the quality of electronic items. It is imperative to agree that Samsung Corporation endeavors to grasp considerable market share globally; nonetheless, this can be achieved fully through establishment, ratification, and embracement to quality production processes.
Problem
According to GoodGuide (2012), the ratings of electronic and Smartphone institutions, especially Samsung (a Korean-based corporation) indicate low-performance rates. Samsung has registered low ratings on scientific, environmental, and social ratings despite credible advancements in technologies. It is required to score 10 out of the possible 10 due to the sensitive nature of its business. This is due to the production of items that do not entirely match the functional specifications required by consumers.
This has been hindering its performance in various aspects. Consequently, it has called for the need to present a report on the imperativeness of adopting quality techniques of manufacturing excellent software(s). The information is set to streamline operations at the institution by facilitating the adoption of probable manufacturing procedures and the integration of superior processes of electronic assembling.
Methodology Used
The report is provided after the execution of an extensive study through the application of clear guidelines and procedures from the initial stages to completion. Initially, I developed the topic to identify quality electronic production techniques in the company.
This is critical since the techniques are integral in enhancing communication and facilitating superior execution of activities (Kothari, 2005). Secondly, the recipients of the report were identified where the board members, administrators, employees, and consumers of Samsung Company are the probable beneficiaries. The information contained in the report is to enable them to craft more conventional electronic production techniques. It also seeks to enable them to integrate their systems to match the current needs of consumers.
A credible investigative technique was adopted where the purposive information gathering method was applied. The technique provided sufficient incentives that ensured the realization of superior findings. As a means of achieving the aspired results, data collection was effected from selected electronic resources that were relevant based on the researcher’s judgment (Dantzker & Hunter, 2012). This report adopted a purposive technique of data gathering that provided information based on purposive nature as specified. The technique helped in the realization of realistic, relevant, and accurate data that address the purpose of the study sufficiently.
Consequently, it helped in the identification of sample size and data collection techniques based on the investigator’s analysis of the suitability of various resources. This enables the identification of data collection techniques (DCT) that would purposely provide relevant information as required (Dantzker & Hunter, 2012). Consequently, it facilitated the identification of sample size and materials to be applied as appropriately identified.
Consequently, the report is to facilitate the development of viable performance strategies that are technologically informed and consumer-oriented (Gad, 2008). That is the policies that are developed should match and aim to meeting customer needs adequately (Chang, 2008). The stakeholders will use the report to shape their decision-making on diverse policies. In particular, the institution’s board who is mandated to develop operating policies and strategies that guide electronic products’ processing is to benefit from the information. The information will enhance their knowledge of effective electronic production techniques worth adopting.
Variably, it is set to boost their understanding of the institution’s capacity and evidence gaps. This is to enable them to develop policies that are sustainable and viable (Gad, 2008). The policies would also ensure that proper safety mechanisms and production sequences that ensure quality are adhered to with immense diligence.
Additionally, the potential resources that were used were identified. The secondary technique of information gathering was applicable to aid in the acquisition of reliable data. In particular, secondary research is the process of gathering pertinent information from the work of various scholars. The data collection technique accompanies other methods to ensure accuracy in the development of credible findings. The technique gives researchers a realistic basis and guidelines on which to improve on. Secondary sources of data gathering include electronic resources, books, journals, and appropriate publications.
The resources must hold relevant information to help in the realization of the report objectives (Lehman et al, 2010). Their identification is based on the investigator’s judgment on their reliability. In this report, the researcher identified four electronic resources to aid in data gathering. The identification of resources was through a systematic selection procedure sample (SSPS) that ensures the use of reliable resources. I chose the articles as secondary data gathering techniques (by the researcher) due to their relevance. They provide appropriate information developed after the performance of a systematic study.
The concerned study led to the identification of the significance of implementing viable electronic products’ processing strategies in fostering an individual’s well-being and growth. The resources especially the journals seek to enable the realization of valid and reliable results that hold the capacity to influence decision-making.
Findings
The adoption of quality electronic production techniques is crucial in advancing people’s lifestyles. Electronic assembling should follow due procedures to ensure that quality items with functional orientation are produced for usage. Institutions with strong aspirations to providing quality services to their customers are under obligation to streamline their processing procedures to advance the delivery of items with excellent value. Phones and computers are widely used by various individuals to enhance the communication and execution of commercial activities (Evans & Evans, 2008). This explains the reason why electronic gadgets should hold no defect that may present severe operating complications.
The realization of the quality production of electronic items is dependent on various factors that range from policies, production strategies, assembling procedures, and personnel literacy levels. Adherence to the quality electronic manufacturing tips that include management of assembling process with care, adherence to quality standards, and hiring of qualified personnel is also essential. The elements seek to ensure that Samsung Company that deals in electronic products manufacture items that conform to the required asset functional standards.
The standards ensure that the safety of consumers is not compromised. Indeed, the company deals in highly delicate products that require proper management and continuous maintenance.
The products also require timely supply and professional handling to facilitate their usage in a good time. This calls for proper planning and integration of processing equipment to enhance product assembling (Evans & Evans, 2008). This is fundamental since computers and other electronic equipment should undergo the prescribed assembling procedures to boost their operating capacity. Electronic hardware and software(s) should be of great functional value and conform to set safety standards to uplift output levels.
Functional value is an aspect that every company must exhibit to ensure that its consumers acquire quality products that hold the capacity to transforming their lifestyle positively.
Based on the findings, the managers of the company have the responsibility of designing performance policies to promote effective coordination of electronic assembling. The policies should address the evident bottlenecks that hold the capacity of stalling operations in the institution. The policies should foster superior identification of performance gaps and advance the establishment of relevant solutions that include the hiring of qualified personnel and eradication of the use of obsolete or reusable materials (Chang, 2008).
This is significant especially if the reusable materials would not be of material value. Consequently, the policies would ensure the realization of superior phones with diverse features. Inferior guidelines on the production of electronic machines lead to adverse effects that delimit an individual’s performance economically and socially.
From the sources reviewed, the managers and various business unit leaders of Samsung Corporation are to benefit from the information contained in the report. The information will help in their decision-making on various issues about daily operations and processing gaps. It will facilitate the identification of evidence gaps to ensure that its new inventions especially smartphone production conforms to set specifications. This is to advance the delivery of quality electronic products, for example, TVs, phones, and computers. The report is to enable consumers to make informed choices on the electronic products that they use (Gad, 2008).
It will enable them to understand the quality expectations and the complications that the electronic products may bring if inferior processing procedures are undertaken. It will enlighten their capacity of differentiating bad products and quality electronic items with key elements. In short, the report seeks to facilitate the production of quality electronic products in a company with an aim of satisfying consumer needs. It is also set to ensure the health issues of individuals are not compromised through the adoption of conventional production techniques.
The purpose of the report was followed where the need to provide insightful information based on electronic gadgets gained prominence. Ideally, the development of superior electronic manufacturing through the application of standardized and quality materials is critical.
Appropriate identification and assemblage of raw materials are crucial in ensuring that the products conform to set standards (Chitale & Gupta, 2007). It also ensures that the user’s safety is enhanced through the eradication of complications that may arise due to possible defects. The report seeks to give clear information with credible and factual relevance to various stakeholders of the company to facilitate policy formulation.
Additionally, I realized that there is to unveil the need to advance and adopt conventional electronic equipment manufacturing techniques that uphold quality standards (Chitale & Gupta, 2007) Institutions are under obligation to produce quality software(s) and hardware(s) that are of great value. The software(s) should also hold the potential enhancing individual’s communication and execution of diverse activities that require technological input. The gadgets should build individuals’ wellbeing and advance their capacity to exemplary performance.
This is to promote productivity and limit communication complications that are detrimental to economic growth. Companies with a strong focus on exemplary performance in the Smartphone industry should produce products with immense functional capacity. Samsung has been experiencing low performance due to intense competition (Samsung, 2012). Lack and high cost of acquiring raw materials are also hindering the quality of its products. This exposes the company to the reduced performance that may detrimental to its expansion plans.
The stakeholders in the institutions have been placing a strong emphasis on revenue collection and management with minimal attention to quality enhancement. Their strategy to maximize resources is not yielding the best results since it leads to the deterioration of the quality aspect of the products that it manufactures (Chitale & Gupta, 2007).
It is due to the inferior knowledge that the report is set to equip stakeholders in diverse institutions with pertinent information to facilitate the formulation and adoption of conventional electronic equipment production techniques. The report is also helpful since it is to equip them with the knowledge on the need and significance of employing a quality assurance officer to help in balancing the quality aspects that are recommended for various commodities. This occurs to ensure that the electronic items under production hold the requisite safety standards and boost the users’ welfare.
Analysis
The results based on the secondary resources used to facilitate this report stated that implementing quality production of electronics requires absolute dedication and determination of various stakeholders in institutions. Evans & Evans (2008) stated that the realization of highly functional electronic products that fosters an individual’s performance and communication requires the eradication of inconsistent manufacturing practices that may compromise quality.
Effective production of quality electronics requires proper planning and the use of non-defective materials. This is to; minimize possible operating defects that can impede an individual’s productive capacity and social integration. Institutions that seek to improve their performance should integrate their processing equipment and adopt relevant electronic quality assurance measures. This is to; ensure that software and hardware processing undergo all the credible steps that are crucial (Evans & Evans, 2008).
The institutions should also initiate proper supervisory measures and hire qualified Quality Assurance personnel to manage the assembling of electronic parts. The quality assurance official would be instrumental in monitoring the development of an effective electronic assembling process and usage to avert operating failure. This is vital since the unprofessional operation of electronic gadgets may be detrimental to users.
According to Chang (2008), administrators must ensure that the items produced conform to the required operating standards. This is to make certain that gadgets operate with limited defects due to their significance in enhancing the economic and social status of individuals. The establishment of a favorable hardware maintenance system is an essential aspect that contributes to product safety (Chang, 2008). Variably, knowledge on the maintenance of diverse electronic items is fundamental in ensuring the consumers use the products when in good condition.
It is significant for institutions to implement quality electronic manufacturing techniques. This occurs to assure the provision of quality gadgets that hold limited capacity in compromising the functional ability of individuals. Quality is a precious element in a product life that must be nurtured through systematic approaches. The approaches must be informed scientifically and technologically to avert possible complications.
Evans & Evans (2008) indicated that the institution should adopt favorable machine maintenance mechanisms and limit the use of obsolete materials in assembling various equipment. The use of obsolete raw materials is detrimental since the materials would limit the user’s security and safety when utilizing gadgets. It would also expose users to unwarranted accidents that may present severe effects. This is to; ensure that the electronic equipment that is processed is devoid of defects and guarantees the safety of users.
Regarding how quality can be enhanced to ensure the processing of excellent electronic items that conform to the relevant specifications, all the electronic resources presented various measures. In particular, the information contained cited eradication of the use of obsolete raw materials, hiring of qualified personnel, enhancement of the level of interaction between consumers and the workforce to establish their needs. Product quality tips were also highlighted where the need for employees to handle the product assembling process with care and hiring of quality assurance supervisor. Further, keeping the operating area clean and adherence to quality standards are crucial elements.
These elements contribute immensely to enhancing the economic status of individuals. They also facilitate the production of machines with absolute functional capacity. The resources made emphasize the idea of employing an experienced quality assurance team to guide the quality observation process to facilitate the effective balancing of major components that are used in the manufacturing sequence. This is to ensure that quality products that conform to favorable conditions with limited malfunctions and health issues are supplied to consumers.
From my analysis of the situation, there are several recommendations that the report proposes based on the findings and the results attained. The recommendations are set to enhance policy formulation and to ensure that relevant measures are undertaken by the company’s administration to streamline its production of electronic gadgets. This occurs to ensure that the products in supply are safe for human usage and development.
In particular, Samsung Company should eliminate the usage of obsolete raw materials and processes due to its adverse effects. They should use the recommended materials that are user-friendly. Proper planning and resource allocation are also essential in ensuring timely and quality processing of the products (Chang, 2008). Resource allocation facilitates the acquisition of relevant processing equipment and various incentives that are crucial in the realization of quality output.
Managers should strike a clear balance on resource allocation to ensure that there are adequate funds to facilitate the acquisition of the needed raw materials, the hiring of competent personnel, and the purchase of relevant equipment. Ideally, the development of pertinent safety policies is an element that the management should consider. The policies should be formulated to guard processing of the products, hiring of staff, for example, quality assurance specialized and identification of credible raw materials. The institution should also craft policies with the capacity to foster adherence to quality and safety standards by everyone participating in the processing sequence. This would facilitate the production of electronic gadgets with limited defects.
Conclusion
Quality observation is important to Samsung Company’s growth. Indeed, the ratings of Samsung (a Korean-based corporation) indicate low-performance rates on scientific, environmental, and social ratings despite credible advancements in technologies. On the methodology, I adopted a credible investigative technique and a purposive information gathering method. Based on the findings, the adoption of quality electronic production techniques is vital in advancing the company’s progression. The company has the responsibility of designing performance policies to promote effective coordination of electronic assembling.
Analytically, it is significant for institutions to implement quality electronic manufacturing techniques. This occurs to guarantee the production of quality gadgets that hold limited capacity in compromising the functional ability of individuals. Quality is a precious element in product life. Thus, it must be nurtured through systematic approaches. It is recommendable for Samsung to implement quality electronic manufacturing techniques.
References
Chang, S. (2008). Sony vs. Samsung: The inside story of the electronics giants’ battle for global supremacy. Singapore: Wiley.
Chitale, A. & Gupta, R. (2007). Product design and manufacturing. New Delhi: Prentice-Hall of India.
Dantzker, M. & Hunter, R. (2012). Research methods for criminology and criminal justice. Sudbury, MA: Jones & Bartlett Learning.
Evans, J. & Evans, J. (2008). Quality and performance excellence: Management, organization, and strategy. Mason, OH: Thomson Business and Economics.
Gad, S. (2008). Regulations and quality. Hoboken, N.J: Wiley.
Kothari, C. (2005). Research methodology: Methods & Techniques. New Delhi: New Age International (P) Ltd.
Lehman, C., DuFrene, D. & Jaffe, C. (2010). Professional communications: 2010 custom edition (2nd ed.) Mason, OH: Cengage Learning.
Locker, K. O., & Kaczmarek, S. K. (2007). Business communication: Building critical skills. Boston, MA: McGraw-Hill.
This justification report is written to provide pertinent information on the credible steps that Samsung Company can adopt to enhance its delivery of quality items. The report targets the board of directors and administration of the company (Luo, 2001). They make administrative decisions regarding quality products. The report sets to equip stakeholders with quality techniques that are viable in facilitating superior processing of electronic gadgets.
The topic of the report
The topic of the report is the “imperativeness of adopting quality electronic production techniques in Samsung Corporation”. Thus, the proposed program entails the adoption of quality electronic production techniques. The report is set to ensure that quality standards are upheld in the production of computers, phones, TVs, and semiconductor chip maker in the Samsung Company. This occurs to ensure that the company provides superior products that hold unquestionable satisfactory value to consumers. The topic is relevant, especially with the company’s current ambitious product expansion program.
Purpose of the report
The purpose of this report is to convince the board members of Samsung Company to adopt viable steps (emerging from researched information) to enhance the quality of the items the company manufactures (Tian, 2005). The report comes at the right time that the institution is facing stiff competition from its rivals. Its current position calls for radical transformation and integration of the superior processing chain that holds the capacity to propel its performance.
The issue addressed in the report
It addresses the significance of adopting quality electronic techniques in the Samsung Company (O’connor & Kleyner, 2012). It also discerns how quality can be enhanced to facilitate the production of electronic items concerning computers, TVs, smartphones, and LCD products. Concurrently, it addresses the relevance of employing quality assurance personnel to aid planning and guide the production of electronic products with high-performance capacity (Shelly & Rosenblatt, 2012). Lastly, it addresses the significance of electronic software(s) and hardware(s) in enhancing individuals’ satisfaction and productivity.
Potential resources
The use of electronic data and analysis of the secondary resources will be applicable as the data collection techniques. The techniques are chosen due to their appropriateness in driving studies of purposive nature. Consequently, they define the procedures that are to be undertaken to facilitate the realization of superior results. In this report, the researcher has identified four journals to aid data gathering.
Methods of gathering information and criteria used in evaluating information
The report will use secondary/electronic resources to gather credible information that would serve the purposive nature of the study. Electronic resources and materials hold in-depth studies on various issues regarding electronic appliances.
Criteria to be used to evaluate the information collected
To deliver judgments, statistics will be attained from the board of directors, management, employees, and customers of Samsung Corporation. This will incorporate the ideas of experts on quality provisions. It will be important to investigate the relevance and value of the information obtained when developing the report findings including recommendations (Tian, 2005).
References
Luo, Y. (2001). Strategy, structure, and performance of MNCs in China. Westport, CT: Quorum Books.
O’connor, P. & Kleyner, A. (2012). Practical reliability engineering. Hoboken, NJ: Wiley.
Shelly, G. & Rosenblatt, H. (2012). Systems analysis and design. Boston: Course Technology Cengage Learning.
Tian, J. (2005). Software quality engineering: Testing, quality assurance, and quantifiable improvement. Hoboken, NJ: Wiley.
Not so long ago, Samsung Electronics faced a crucial to their business issue, in the framework of which the company had to recall the whole product line twice. Needless to say that such a solution turned out to be extremely expensive and affected clients’ perception of Samsung Electronics adversely. The company lost more than $5 billion, so enormous attention was paid to the problem. Some of Note 7 products exploded and hurt their owners. Moreover, professionals who investigated this issue claimed that other devices of this type could unexpectedly explode as well.
Months of thorough work proved that the root causes were “design and manufacturing flaws associated with the lithium-ion batteries used in the phones, which were produced by Samsung’s battery suppliers” (Baig 2017, para. 1). These drawbacks were associated with two suppliers who were believed to be Samsung SDI and ATL. The batteries used in these devices were made from different materials that were not discussed along with other requirements.
The suppliers of Battery A failed to ensure enough space for electrodes, while the suppliers of Battery B committed an abnormal welding process and the absence of the isolation tape in some devices. As initially, the problem occurred only with Battery A, Samsung decided to change these phones for those with Battery B, which proves that they did not realize the necessity to check the parts provided by suppliers even after the incident. Thus, the absence of a timely safety check turned into another issue that affected the final quality of Note 7. In this way, even though the company put particular demands on suppliers, it did not ensure that they were met.
All in all, it can be stated that if Samsung Electronics improved its communication with suppliers, it could have avoided the occurrence of issues related to a battery explosion. Ineffective communication, in this situation, impacted both the quality of the product and the company’s performance. It prevented Samsung Electronics from receiving extended information regarding the product that was supplied, reduced checking options, and worsened the overall quality of a phone in this way.
Gambetti and Giovanardi (2013) state that communication is vital for successful cooperation between the parties of a supply chain. They emphasize the fact that it allows spreading values and increasing intellectual capital within an organization. As a result, the quality of provided services and products is expected to enhance. Proper communication between the members of a supply chain improves competitive performance dimensions.
It ensures the high quality of products, their timely provision, and practices alignment. Having homogenous values, a buyer and supplier are likely to have similar views towards a product, which makes it easier to meet demands. In addition to that, effective communication ensures that parties can clearly state the scope of their demands and opportunities. They can share detailed information that includes all those product peculiarities that can potentially affect their characteristics.
According to Jiang, Henneberg, and Naudé (2012), relations between a buyer and a supplier are to develop on the basis of mutual trust and dependence. Professionals believe that these two parties tend to work better if they realize that their actions can affect those they cooperate with, as well as the final quality of a product. However, it is significant to remember that interpersonal relations should not affect business ones adversely.
Even though they tend to make a company and its supplier understand one another better, it is significant to ensure that their business operations are not based only on trust. Standard tests and assessments should be used to make sure that all the demands are met, and a product is of high quality. In fact, interpersonal communication and trust that is revealed as a part of them are expected to increase the quality of product or service, providing buyers and their suppliers with an opportunity to share values and code of conduct. They enhance the efficiency and effectiveness of information exchanges but do not cancel any checking procedures.
Finally, Yam and Chan (2015) believe that knowledge sharing is vital for cooperating organizations because it provides them with a range of additional opportunities. They emphasize that a buyer-supplier collaboration can be improved as well as manufacturability if unique difficulties are considered along with commitment and trust between the partners. Realizing that they all are responsible for a product and issues related to it, they are expected to recheck everything several times.
Taking into consideration the information discussed previously, it can be recommended for Samsung Electronics to improve its communication with suppliers in order to obtain an opportunity to deliver higher quality products to clients. The company should share its values and main concerns with the other parties of its supply chain so that they share them and take into consideration when providing services. An assessment guideline should be developed to check the quality of products on a routines basis.
More attention should be paid to the characteristics of the received products. If the company faces quality issues once, it should recheck other products as well to ensure that no problems will be observed further.
Gambetti, R & Giovanardi, M 2013, ‘Re-visiting the supply chain: a communication perspective’, Corporate Communications, vol. 18, no. 4, pp. 390-416.
Jiang, Z, Henneberg, S & Naudé, P 2012, ‘Supplier relationship management in the construction industry: the effects of trust and dependence’, The Journal of Business & Industrial Marketing, vol. 27, no.1, pp. 3-15.
Yam, R & Chan, C 2015, ‘Knowledge sharing, commitment and opportunism in new product development’, International Journal of Operations & Production Management, vol. 35, no. 7, pp. 1056-1074.
The launch of a new product is a complicated and multi-level process that requires considering all the aspects of the market activity. While working on product development, a company necessarily carries out the relevant market research, targets its audience, works out SCM strategy, and evaluates potential risks. Product development always has some practical aims whether it is the sales’ increase or positions’ strengthening.
The paper at hand is devoted to the analysis of the launch of Samsung Gear VR from different perspectives: the product development model, the business analysis, its technical implementation, etc. The key focus is put on the potential outcomes that this implementation will have for the company’s performance in general.
Idea Generation and Screening
Every product that appears in the market is initially developed in response to the relevant demand. Thus, it is reasonable to assume that Samsung Gear VR was introduced to meet the demand of keen gamers and those who would spend hours playing the Sega VR in the early nineties.
It is essential to note that Samsung was not the first one to enter the VR market – by the time it appeared, such products as Oculus Rift, PlayStation VR, and HTC Vive had already occupied the niche (Lowe par.1).
Moreover, according to the latest annual report produced by Samsung, the innovative sphere is “critical for the company’s survival” (Samsung 6). The launch of the VR product is a successful attempt to support their innovative strategy. Hence, the prerequisites of Samsung Gear’s appearance are the following: the launch of the similar products developed by competitors, the need to introduce some innovations, and the intention to engage new clients.
Concept Development
While developing a product’s concept, it is critical to ensure that it possesses some unique characteristics that will guarantee a certain competitive advantage in the relevant market. In the case of Samsung Gear VR, its key distinguishing feature resides in the fact that it is the first time that the virtual reality option is available through a mobile device. As long as their product line already comprises different mobile versions – Galaxy S7, S6, etc. – it is only necessary to develop the relevant hardware. Hence, in terms of costs, the company managed to fit in a relatively moderate budget as there was no necessity to start from scratch.
The product engineering was carried out in close collaboration with Oculus, an experienced market player in the field of innovative technologies. It is essential to note that the company chose a highly beneficial strategy ensuring that the new product would be compatible with the most expensive products – Galaxy versions.
Business Analysis
The success of the company’s performance is based on an effective and consistent strategy. Thus, every product produced by the company is aimed at expanding the product line, the targeted audience, and the type of the occupied market niches. Moreover, the introduction of a new product is often determined by the increase in demand for the already existing items. As a result, before the concept of Samsung Gear VR was designed, it was essential to understand in what way it might contribute to the business’s development.
First and foremost, Samsung Gear VR is expected to assist in extending the targeted audience. Thus, gamers and high-tech lovers are likely to join the Samsung club. Also, the project was outsourced with the help of another professional in the relevant market. Hence, the cooperation with Oculus also opens new prospects in terms of the clients’ engagement – the loyal customers of the latter will necessarily get interested in the commonly produced innovation.
Moreover, according to the company’s forecast, their smartphone sales were about to fall in 2016 (McCormick par.5). Keeping in mind the fact that their innovation is compatible with smartphones only, it is rational to presume that product development is partially determined by the attempt to push up the smartphones’ sales.
Lastly, the environment within which Samsung has to operate is highly competitive. Thus, the gap between Samsung and its key rival, Apple, in terms of the market share is very insignificant (see Figure 1).
Figure 1 (“Marketing budget of Samsung Electronics and its major competitors for 2013”).
Therefore, to keep up with its competitors, the company is obliged to introduce some innovations once in a while. Otherwise stated, the appearance of Samsung Gear VR is a strategic trick aimed at strengthening the brand’s positions in the market.
Beta Testing and Marketing
Beta-testing and marketing testing are important stages in the process of a product launch as they allow eliminating some critical flaws that might hurt the product’s performance. The first pilot test carried out by Samsung and Oculus showed that the product had some disadvantages that would essentially impede its promotion. Thus, for instance, the first version of Samsung Gear VR was only compatible with Note 4.
Besides, the cost of the pilot variant was not competitive – thus, the customers were supposed to spend about 200 dollars on the innovation (Lee par.1). Taking into account the fact that a potential client might also have to purchase the relevant mobile phone, this price is excessive. As a consequence, Samsung and Oculus have incorporated the essential modifications so that the final version is compatible with a larger number of smartphone versions and its cost is twice lower.
Technical Implementation
Samsung has one of the most efficient Supply Chain Management (CSM) strategies in the relevant market. Thus, the company has developed a complex and multi-level chain that ensures a prompt and cost-effective operation. According to experts, Samsung relies on the principle of the so-called “six sigma” which implies extra effort in terms of the innovation activity (Emerald Management First 2).
From this perspective, the developed SCM strategy turned out to be highly assistive in the framework of promoting Samsung Gear VR. The company saw to the fact that their loyal clients were particularly encouraged to purchase the product by making it compatible with the largest number of Galaxy versions possible. Moreover, all the official distributors were engaged as soon as the so-called “clients version” appeared so that the product became immediately available both in the shops and at the online platforms.
Pricing
It is essential to note that the price of the product is highly competitive. Thus, in comparison to the products of a similar type, Samsung Gear VR is a low-cost innovation (see Table 1).
Company
Product Name
Price
Samsung
Samsung Gear VR
99$
Oculus
Oculus Rift
599$
HTC
HTC Vive
799$
Table 1 “Cost Comparison”.
Assuming that along with buying Samsung Gear VR one is also required to purchase the relevant Galaxy version, the price will turn out to be almost twice higher. In the meantime, even taking into account the extra expenses, this product remains the cheapest in this line.
Launch
The launch of the product was accompanied by a powerful advertising campaign. Thus, Samsung decided to introduce Samsung Gear VR on Christmas Eve; as a result, the first revenues were quite considerable. Further revenues depend largely on the competitive capacity of this product. At the current point, its key benefit resides in the low cost. However, if the quality parameters turn out to be lower than those of the rivals’ offers, the revenues are apt to fall by the second year of sales. According to experts’ forecasts, the general demand for VR products has been initially overestimated; thus, the revenues are expected to be gradually decreasing (Grubb par.1).
Conclusion
The analysis of the product development of Samsung Gear VR has shown that its launch is a perfect pitch in terms of marketing. Thus, first and foremost, the introduction of this product has assisted Samsung is strengthening its positions in the innovative sphere. Moreover, the company is likely to push up its smartphones’ sales as the owners of Gear VR will necessarily have to purchase some versions of the Galaxy mobile phone as well.
Also, the developed product possesses a consistent competitive advantage from the pricing standpoint. In case it manages to show good quality characteristics, it will remain the leader in the relevant niche.
From the revenue perspective, it is problematic to forecast the potential impact as the VR market is a relatively new field and, thus, it is highly difficult to make any predictions. In the meantime, an insignificant increase is likely to be seen in the course of the first two years.
Works Cited
Emerald Management First. Supply Chain Management Six Sigma at Samsung, 2007. Web.
The market principles are very complicated, but there are always rules according to which different generic marketing principles are formed. Pricing is one of the market principles, which is impossible to control absolutely (if it is not an absolute monopoly market) as there are always a lot of factors which influence the price construction. Samsung is one of the world famous brands, which offers its products according to the pricing policy which exists. The prices of the products are influenced by a lot of different factors, starting with direct and indirect costs and finishing with customer’s preferences and brand name.
Theoretical Foundations
In general, there are two main methods of pricing, which are used by all companies according to the basic article by Avlonitis and Indounas (2005). These methods of pricing are the cost-plus method and the pricing according to the market’s average prices. The names tell for themselves and these methods are the most convenient on the market price.
Research Findings
Samsung is the company which is famous for its electronic products, more over it is world brand, but the pricing policy of Samsung Company is influenced by other companies and the Samsung prices also influence the prices of other companies, as they are in constant interconnection. The example is the interconnection of Samsung and Sony prices may be suitable here. Samsung places the price of $150 for some item. Sony changes its price for $130 per unite. When Samsung changes its price, Sony will also make it higher. This is called the concept of maximization of profit (Jagpal & Jagpal, 2008, p. 377).
The other method, which is used by the Samsung Company, is the brand name usage. People mostly buy products of the companies with the brand name rather than the products of other unknown companies, especially in the field of electronics. People’s consideration is that brand companies can be trusted and the quality of them is higher. So, it may be said that brand name is one of the methods of companies’ pricing (McNeilly, 2008).
The customers’ likes and dislikes may also influence the pricing of Samsung Company as the named customer is customer led and the wishes and desires of the customers are followed. The customer interest in this or that model may be the factor whether to higher or lower the price, as well as to keep the price unchangeable (Kotler, 2006).
The main pricing method which is used by many companies, and Samsung Company is not the exception, is the quality characteristic products (Liegey & Shepler, 2000). The company takes into consideration the level of complexity while model manufacturing and its side appearance, that is the number of innovations which are inserted in the model. The new models cost higher as every innovation should be paid more, and when the model is for about half a year or a year old (we should not forget that we deal with electronics), so the price may be leveled to the cost-plus or according to the market’s average prices.
Conclusion
The pricing generic marketing principle of the market is one of the most flexible as it is closely connected with the manufacturing process and the economic relations with other countries. The innovations in this field occur frequently as the science develops and more and more new ideas are involved in the producing process. Samsung tries to provide such prices which could interest different layers of citizens, with different levels of income.
Reference List
Avlonitis, G. J., & Indounas, K. A. (2005) ‘Pricing objectives and pricing methods in the services sector’, The Journal of Services Marketing, 19 (1), pp. 47–57.
Jagpal, S, & Jagpal, S 2008, Fusion for Profit: How Marketing and Finance Can Work Together to Create Value, Oxford University Press
Samsung and Daewoo were regarded as two different legends in the same city of South Korea by the year 2000. On the one hand, Samsung Group showed revenue of more than $119 billion while on the other hand, Daewoo was being mandated by the Korean government to have a financial arrangement by the year 2001 (Sull, Park & Kim 95). The reflection of the Samsung history exhibits its survival, as powerful chaebols like Daewoo Group dithered.
The famous Asian Contagion (a financial crisis that had affected some Southeast Asian countries in 1997) made Samsung and Daewoo Groups take different approaches. These approaches had a positive and negative impact on Samsung and Daewoo respectively. Sull and colleagues state that the crisis forced foreign lenders to withdraw from issuing credit and replenishing long-term debt obligations as they matured. This led to the decline of the Korean won against the dollar (101). On the other hand, the International Monetary Fund (IMF) financially assisted the Bank of Korea with the promise that Korea would reform its economic and business policies. This deeply affected the chaebols (Samsung and Daewoo Groups) as their major assistance was being withdrawn.
Lee Kun-Hee, the chairman of Samsung Group took drastic measures in regard to the problem. First, he dispersed the secretary’s office and organized it again into a restructuring committee in 1998. The committee was charged with the mandate of improving the financial status of the group. The number of affiliates was decreased to 45 within a span of two years. Further, the employee number was also reduced sharply to 161,000, from 267,000 in 1999 (Sull et. al. 102). The above resources and capabilities used, among others, had a positive impact on the approach Lee took. This is evidently supported by the revenues Samsung acquired by the year 2000. Also, Samsung’s market value of its affiliates was more than the sum of all the affiliates of the other three major chaebols; Hyundai, Lucky Goldstar, and SK listed on the Korean Stock Exchange (Sull et. al. 102).
On the other hand, Kim Woo-Choong contributed to Daewoo’s downfall. Kim ignored advice to reduce Daewoo’s debts through the sale of assets but instead thought acquiring assets at a bargain price was the best opportunity. This made domestic banks to be unwilling to finance Daewoo diversification. Affiliate companies, therefore, were forced to acquire funds for expansion from corporate bonds and short-term commercial papers (CP). The issuing of CP and bonds made the debts from borrowing increase to 5.9 trillion won in 1998. This contributed to the collapse of Daewoo. Consequently, the approach Kim took to deal with the 1997 crisis held a negative impact on Daewoo Group.
The 1997 crisis -Asian Contagion- mentioned earlier has made South Korea be several steps backward. According to the writer’s opinion, South Korean firms do not have the possibility of competing in the world market. This is due to the fact that China has invaded massively into the market Korea once had and it is progressively moving up the technology ladder. Secondly, China has an advantage over Korea in terms of low prices and has made the Chinese market enlarge over the region and in the world. Thirdly, there is uncertainty as to how long the United States will continue to offer support to economic competitors in Asia, and especially Korea (Myers 14).
To conclude, the paper exhibits the effects of decisions made by leaders of two dynamic companies in South Korea; Samsung and Daewoo Groups. The happenings took place at the same time and the impact was totally opposite. This has been outlined by the 1997 financial crisis in Southeast Asian countries. The rule of law highlighted in South Korea in the early 50s had made South Korea partially close its borders for trade with the outside world. This in turn made South Korea lag behind in terms of technology and adoption to the changing business environments.
References
Myers, Robert. The faltering economic reforms of South Korea. San Francisco. 1998. Print.
Sull Donald, Park Choelsoon and Kim Seonghoon. Samsung and Daewoo: two tales of one city. Harvard: Harvard university press. 2004. Print.
