Multinational Electronic Gadget Producing Companies - Essay Example

Business Research Contents Introduction 3 Research Question 3 Research Objectives 3 Rationale 4 Literature Review 4 Research Methods 9 Findings 11 Discussion and Analysis 19 Conclusion 21 Recommendations 22 Reference List 23 Appendix 25 Introduction This business research report focuses on the business of two popular multinational electronic gadget producing companies, Apple Inc. and Samsung Electronics. The research will compare and analyse the different marketing strategies implemented by the two companies. Both the companies conduct trade within the same industry and experience monopolistic competition with each other. The research work will make use of qualitative and quantitative analysis tool to accomplish the desired research work. Through the analysis, the researcher will focus on the primary issues faced by both the companies and would provide specific recommendations through which these problems can be eradicated. Research Question Major: What are the primary factors determining the consumers purchasing intensions in the electronic goods industry? Minor: What is the difference between the marketing strategies implemented by Apple Inc. and Samsung? Minor: Which company (among the two) is performing better in the market? Research Objectives To analyze the differences in the marketing strategies of Apple Inc. and Samsung Electronics To estimate the primary factors that influences the consumers electronic goods purchasing intensions in the market To analyze which company (among the two) is performing better? Rationale The commercial success of giant multinational companies such as Apple and Samsung creates significant spill over effects in the international economic system. These effects are created in the form of increased employability, augmented consumers utility, greater innovation and better standard of living (New Page Publishers, 2010). This business research primarily aims to analyze the most important factors determining the consumers purchasing intensions in the global electronics industry (Georgi and Mink, 2012). It should be noted that positive purchasing perceptions of the buyers within an industry is directly proportional to the efficiency of the marketing activities conducted by each company (Bray, 2010). It is highly rational to conduct this research because it aims to first implicitly analyze the marketing strategies and business performances of Apple and Samsung. The research work will also conduct an empirical survey analysis about the consumer’s perceptions regarding the products and services of the two companies. At the end by combining the two research results, the paper will enumerate certain recommendations through which the two companies would be able to enhance its business perforce in the long run. Long run growth of such giant multinational companies would imply progress of the global economy. Literature Review Apple Inc. is a popular multinational company founded in 1976. The headquarters of the organization is located in Cupertino, California but it conducts business in almost all the prominent economies of the world (Apple Inc., 2012). Computer hardware, computer electronics, digital distribution and computer software are some popular products and services traded by Apple Inc. It is believed by the researchers that Apple Inc. has achieved multiplicative growth in business since its inception with the active contribution of its transformational leaders, Steve Jobs, Steve Woznaik and Ronald Wayne (Hughes, 2013). Differentiation, focussed differentiation and cost leadership are the three primary business level strategies of Apple Inc (Paczkowski, 2014). By implementing these strategies, the company tries to lower cost and make its products as well as services distinguished in the market. The company experiences a high brand value across the international market. It also owns a large strength of productive and efficient employees (Apple Inc., 2014). Moreover, it makes huge investments in research and development purposes. Since long, the organization has experienced good proporttion loyal customers only by selling high modern electronic gadgets of superior quality (Hennessey, 2004). Samsung Group is a well known multinational conglomerate based from Samsung Town, Seoul, South Korea (Samsung Group, 2014). The organization conducts business in numerous industries, apart from electronics. Samsung Electronics is experiencing rapid business growth in the recent era after the emergence of trade liberalization (Samsung Group, 2014). Researchers have stated that the primary business level strategies of Samsung are differentiation, price advantage and cost leadership. It is believed by some scholar’s that Samsung is winning over the business shares of Apple Inc. through price advantage strategy, under the regime of which the company aims to sell its products with prices lower than most of its business rivals (Hutt and Speh, 2013). It is also found that the extent of product diversity is greater in Samsung than Apple. The company also manufactures electronic products like home appliances, unlike Apple Inc. However, researchers believe that the company still lags behind in trading electric software products (Hutt and Speh, 2013). The software used in the products of the company is outsourced from external market suppliers. Moreover, the firm till date has primarily extended its internationalization process in its neighbouring economies such as China and India (Samsung Group, 2014). Researchers have stated that the requirement of marketing activities within the electronics industry has enhanced due to increased market competition within it. Figure 1: Rivalry within the Electronics Industry (Source: Zhang, 2013) The above graph shows the market positions of different firms (including Samsung and Apple) in the global electronics industry. Apple Inc. sells diversified products in the market to tap demand trends of different types. iMac, iPhone and iPad are some popular products of Apple Inc (Nair, 2014). The firm tries to maximize the impact of Veblen effect in business. Through which it tries to establish premium prices for its products for making consumers believe that they are of good quality (Nair, 2014). The company primarily utilizes the word of mouth promotional strategy in business. However, it also invests money for promoting its brand through different means of communication such as television, social media and newspapers. Samsung also tries to augment its brand value by implementing product diversification strategy in business. However, it aims to acquire demand from a wide base of customers in the market by establishing competitive prices within the industry. The promotional strategies of Apple Inc. and Samsung are almost similar to each other. Since the emergence of global financial crisis in 2008, the aggregate spending power of the individuals have fallen due to fall in employability and real income thresholds (Berglof, 2011). The rational consumers of the modern world are desire to purchase good quality products at relatively lower prices. Researchers state that all such external market factors are responsible for increasing profitability of Samsung and declining profit of Apple (Hutt and Speh, 2013). However, to sustain its dominant position in the market and rule over the existing threats, Apple Inc. has found to recently change its pricing and production strategy in business. The company is making more investments for research and development purposes, through which it would be able to make its products improved in terms of features, quality and durability. Figure 2: Improving Research and Development Investments in Apple Inc. (Source: Hughes, 2013) The above graph shows that the aggregate investments made by Apple Inc. are significantly increasing with time. The company is claimed to make increased innovation investments because it desires to augment the competitive power of its products in the market. Some researchers believe that increased investments made by the company for research and development purposes is increasing its operational cost and impeding its aggregate profit margin in business (Hutt and Speh, 2013). It is also found that the company is making changes in its pricing strategy in order to make products affordable to a wider base of customers. However, that the products of Apple Inc. are superior to that of Samsung because of its unique attributes and features. Samsung still lags behind Apple because its business internationalization process is still inadequate. Moreover, many consumers believe that the products of Apple Inc. are better than Samsung because of superior software features of the latter brand. Some research studies have stated that Samsung’s products are inferior to Apple because the degree of product specification of the latter is inferior to that of the former. Apple Inc. concentrates in the production and modification of only computer and mobile hardware as well as software products. On the other hand, Samsung concentrates on production of variety types of electronic products and hence it is able to invest relatively low in the qualitative modification process of only a single variation of product line. Moreover, the consumers of numerous markets in the Western countries find Samsung products to be less available or distributed in the market compared to that of Apple Inc. Even so, the store attractions and services of Apple are perceived to be better than Samsung. Some research studies have stated that Apple and Samsung are both popular multinational companies but consumers perceive that consuming products of Apple is a mark of status in the market. Thus, from the literature review it is proved that consumers purchasing intentions within the electronics industry depends on after and before sales service quality, product appearance, features, price and availability. Research Methods Philosophy The researcher had accomplished the entire research work on the basis of interpretive research philosophy. Interpretive research philosophy was the appropriate selected approach because the final results of the research work could not be procured in quantitative or numeric terms (Kothari, 2008). The business research analyzed the factors that influenced the consumers purchasing intensions between the products of Apple and Samsung. It also analyzed the different strategies adopted by the two companies for attracting more loyal customers. All such researchers could be procured in qualitative aspects. Approach The business research was conducted in the basis of inductive research approach. Under the regime of this process valuable data and information were first collected on the relevant topic and finally, at the end of the research analysis, productive theories and hypothesis were framed on the basis of the collected data and information (Kumar, 2011). Method The entire research was completed with the help of qualitative and quantitative research analysis tools. Qualitative The qualitative analysis of the business research was accomplished with the help of literature review and interviews. The literature review was prepared with the help of authentic secondary resources such as journals and books. The researcher had analyzed the information collected from these sources through naturalistic and interpretive skills (Kumar, 2011). The literature was gathered on longitudinal perspective. Under the regime of which, the researcher considered two cross sectional units (Samsung and Apple) and several time dimensions (Pannerselvam, 2004). On the other hand, the interviews involved 6 students of the university, out of which three were male students and three were women. There were 6 interviewing sessions, each session was conducted for a period of 10 minutes and it involved two parties, the interviewer and the interviewee. Quantitative The quantitative analysis was accomplished through a closed ended questionnaire survey. All together there were 13 questions and each contained multiple choices. The results of the closed ended survey were analyzed with the help of descriptive statistical analysis tools. Thus, each analysis aimed to estimate the characteristic features of the selected sample. Different types of graphs were the tools utilized for accomplishing the descriptive analysis. Data Collection and Sampling The population of the business research could be all the students’ university students but it was not feasible to conduct the research with the help of the entire population. For this purpose, the researcher had selected an appropriate sample for the analysis. For accomplishing the research work, the researcher had adopted purposive random sampling approach (Kumar, 2011). Thus, the sample included 50 male and 50 female students. The size of the closed ended survey sample was 100. On the other hand, the size of sample introduced for the interviewing session was only 6. Ethical Considerations The researcher had strictly followed all the ethical and moral norms of research. The conclusions of the qualitative analysis did not directly influence the results of the descriptive statistical analysis. Moreover, all the personal information about the respondents such as name and address were not disclosed by the researcher during and after the research work (Kumar, 2011). Limitations The information procured from the closed ended survey was limited. The researcher had artificially assumed that all respondents of the interview provided correct answers and the responses of the participants were accurately recorded (Kumar, 2011). If these assumptions are incorrect in reality, then the entire analysis of the business research can be wrong. Findings The sample selected for the closed ended survey included 50 male and 50 female respondents. Figure 3: Age Composition (Source: PPT) 50% of the respondents were students between the age group 19 to 25 years. However, from the age distribution pie diagram (above) it can be stated that majority of the respondents are young consumers of the market, below 32 years. Figure 4: Product Owning (Source: PPT) From the above bar graph it can be stated that majority of the young respondents were using electronic gadgets of Apple Inc, followed by Samsung products. Figure 5: Type of Products (Source: PPT) From the above graph it can be stated that the sales of Apple and Samsung Smartphones are moderately equal (only considering the sample). However, it is proved that the respondents are more familiar with usage of Apple tablets and laptops than that of Samsung. Figure 6: Knowledge about the Product (Source: PPT) From the above segmented bar graph it can be stated that majority of the respondents (between age group 19 to 25 years) can to know about the products of Apple and Samsung from advertisements. However, internet and magazine are also two other popular means of communication through which the respondents came to know about the products of the two companies. Figure 7: Important Product Feature (Source: PPT) From the above graph it can be stated that innovation, system stability, functionality and appearance are some aspects on the basis of which the respondents had finalized their electronic gadget purchasing decisions. Figure 8: New Product Preference (Source: PPT) From the above pie diagram it can be stated that majority of the respondents desired to purchase any new product introducced by Apple or Samsung in the market. Figure 9: New Product Expectation (Source: PPT) From the above graph it can be stated that majority of the respondents believed that any new product introduced by Apple or Samsung would be supportive to their requirements. Figure 10: Perceptions about Current Product (Source: PPT) The result of the above pie graph proves that 65% of the respondents were highly satisfied with the products of Apple or Samsung they were using. However, 34% among the result were moderately satisfied. Figure 11: Place of Purchase (Source: PPT) The results of the above pie graph shows that 50% of the respondents had purchased their electronic products from exclusive retailing outlets of Apple and Samsung. The rest make their purchase from online or other conventional retailing stores. Figure 12: Most important Service (Source: PPT) The above figure shows that the respondents considered all the three selected type of services to be important. However, after sales service was most valuable to them, among all three. Figure 13: Recommendations (Source: PPT) From the above figure it can be stated that majority of the respondents believed functionality as the most important aspect that can help to enhance the sales of the two companies. At the same time, the respondents claimed that innovation and good quality are the two factors that can help Apple and Samsung develop its business to a greater extent in the long run. Discussion and Analysis Electronic goods significantly affect the life of individuals in the contemporary world, especially the youth. Modern electronic gadgets such as laptops, tablets, Smartphones and desktops have substantially helped to improve the living standards of the individuals. However, increased demand for electronic products has augmented the degree of market rivalry, faced by the companies within the industry (Baker, 2010). From the results of the interviews and closed ended survey sessions it can be stated that companies such as Apple and Samsung experience cut throat competition with each other. However, the products of Apple Inc. are found to be more popular than that of Samsung. According the results of the closed ended survey Apple Inc.’s products are more popular than that of Samsung because the products of the organization are innovative and creative. However, when it comes to only Smartphones, then the products of Apple and Samsung are equally popular. This is because, the aggregate demand for Smartphones are increasing in a multiplicative manner. Many consumers perceive that Smartphone features are similar to many laptops, desktops and tablets. Figure 14: Growing popularity of Smartphones (Source: Shilov, 2011) The above graph shows the growing demand for Smartphones in U.K. Thus, the market shares of Smartphone sales are almost similar for both Apple and Samsung. It is also found that the owners of Apple iPhone are younger than the potential buyers of Samsung Smartphones. Other electronic products of Apple, such as laptops and tablets, are more popular than the products of Samsung. From the survey it is analyzed that the consumers make their electronic product purchasing decisions on grounds of product system stability, functionality, external appearance and innovativeness (Grover and Malhotra, 2003). This proves that increased differentiation is the primary factor that has helped to make the products of Apple Inc. popular than Samsung. Moreover, the social media and conventional advertisement activities of Apple Inc. is more efficient than that of Samsung. This is because most of the consumers become aware about the products of the company from these promotional means (Etherington, 2013). It is found from the survey that consumers primarily purchase the electronic gadgets of Apple and Samsung from the authentic retailing outlets of the companies itself. The aggregate sales generated by Apple are more than Samsung (as observed from the survey), it can be stated that the retailing outlets of Apple are more attractive and create greater sales than the outlets of Samsung. The store design, quality of in-store service and available product diversity in the retailing outlets of Apple Inc. are superior to that of Samsung. Moreover, it is also perceived that the services provided by the employees of the retiling outlets of Apple are superior to the services provided by the sales executives of Samsung (Peng and Litteljohn, 2001). This is because the respondents claimed that their product purchasing decisions was primarily dependent on the quality of after and before sales service (Homburg, Krohmer and Workman, 2004). Thus, from the entire analysis it can be stated that the marketing strategies of Apple Inc. are superior to that of Samsung. Conclusion I analyze that from the emergence of globalization and trade liberalization, business firms in each industry is exposed to extensive domestic as well as international market competition (Atikian, 2013). Moreover, the disposable income levels of the consumers across the major economies have enhanced and along with rise in discretionary spending power, the taste and preference pattern of the consumers have become highly volatile in nature (Madsen, Neergaard and Ulhøi, 2008). Thus, at this epoch commercial success of an organization in the current uncertain and competitive market is only feasible with the essence of effective marketing strategies. From the context of the business research I have understood that Apple Inc.’s marketing strategies are superior to that of Samsung. This is because, the aggregate sales generated by the former company is more than the latter (Heracleous, 2013). At the same time also feel that consumers purchase electronic products primarily on the basis of its functional features, external appearance, system stability, innovativeness and after sales services provided by the concerned company. If Apple or Samsung desires to improve business in the long run, then it should ensure that these factors related to its business are superior to the other rivals within the industry (Bidgoli, 2010). Recommendations The recommendations for Apple Inc. and Samsung: Both the companies can enhance profit and revenue in the long run, with increased investments in innovation purposes Augmented differentiation can help the two companies achieve a wider base of loyal customers in business The companies should improve the working efficiency of its employees through training and knowledge building sessions Apple should modify its premium pricing strategy for making its products more competitive Samsung should expand internationalization process in the western economies Increased investments made in advertisements and other promotional activities can help in making the products of both the companies popular in the market in future (Peng and Litteljohn, 2001) Reference List Apple Inc., 2012. Form 10-K. [pdf] Apple Inc. Available at: [Accessed 4 July 2014]. Apple Inc., 2014. Apple. Available at: < http://www.apple.com/> [Accessed 4 July 2014]. Atikian, J., 2013. Industrial shift: The structure of the new world economy. Basingstoke: Palgrave Macmillan. Baker, R. J., 2010. Pricing on purpose: Creating and capturing value. New Jersey: John Wiley & Sons. Berglof, E., 2011. A European Perspective on the Global Financial Crisis; Corporate Governance. International Review, 19(5), pp. 497-501. Bidgoli, H., 2010. The Handbook of Technology Management: Supply Chain Management, Marketing and Advertising, and Global Management. New Jersey: John Wiley & Sons. Bray, J., 2010. Consumer behaviour theory. [pdf] n.p. Available at: [Accessed 4 July 2014]. Etherington, D., 2013. Apple’s new product strategy. [online] Available at: [Accessed 4 July 2014]. Georgi, D. and Mink, M., 2012. The quality of electronic customer-to-customer interaction. Journal of Retailing and Consumer Services, 20, pp. 11–19. Grover, V. and Malhotra, V. K., 2003. A transaction cost framework in operations and supply chain management research: theory and measurement. 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International Journal of Entrepreneurial Behaviour & Research, 14(2), pp. 70 – 84. Nair, S., 2014. Apple’s premium pricing strategy and product differentiation. [online] Available at: [Accessed 30 May 2014]. New Page Publishers, 2010. Consumer behaviour. [pdf] New Page Publishers. Available at: http://www.newagepublishers.com/samplechapter/000160.pdf > [Accessed 19 June 2014]. Paczkowski, J., 2014. Breaking down Apple’s retail distribution strategy. [online] Available at: < http://allthingsd.com/20121003/apple-stores-get-the-glory-but-retail-partners-shoulder-load/> [Accessed 19 June 2014]. Pannerselvam, R., 2004. Research Methodology. New Delhi: PHI Learning Pvt. Ltd. Peng, W. and Litteljohn, D., 2001. Organisational Communication and Strategy Implementation-A Primary Inquiry. International Journal of Contemporary Hospitality, 13, pp. 360-363. Samsung Group, 2014. Samsung Group. [online] Available at: [Accessed 4 July 2014]. Shilov, A., 2011. Growing popularity of smartphones and tablets leave special-purpose devices out of picture. [online] Available at: http://www.xbitlabs.com/news/multimedia/display/20110726220951_Growing_Popularity_of_Smartphones_and_Tablets_Leave_Special_Purpose_Devices_Out_of_Picture.html> [Accessed 4 July 2014]. Zhang, C., 2013. Brand positioning strategies of the rising Chinese smartphone brands. [online] Available at: [Accessed 4 July 2014]. Appendix Female (50) Male (50) 1 What’s your age range? A 0-18 B 19-25 C 26-32 D 32- 2 Which company’s electric product you have now? A Apple B Samsung C Both D None 3 Which type of Apple products do you have now? A Laptop B Smartphone C iPod D None 4 Which type of Samsung products do you have now? A laptop B Smartphone C ipad D none 5 How did you know about the product that you owned? A newspaper B poster C magazine D TV advertisement E Internet 6 What kind of feature attracts you to choose your production? (1=bad 6=perfect) A stable system 1 2 3 4 5 6 B beautiful appearance 1 2 3 4 5 6 C high quality 1 2 3 4 5 6 D innovation 1 2 3 4 5 6 E portability 1 2 3 4 5 6 F functionality 1 2 3 4 5 6 7 Will you buy the product that new released in your chosen company? A yes B no 8 How do you think about the new production of your chosen company? A support as always B lack innovation, unwilling to support C no attraction, worse than expectation 9 Does the product you bought achieve the desired result? A yes B no 10 How did you buy your product? A online store B exclusive shop C other retail store 11 Which services you pay more attention on your chosen company? (1=bad 6=perfect) A information service 1 2 3 4 5 6 B sales services 1 2 3 4 5 6 C after-sales services 1 2 3 4 5 6 12 Which methods do you think are needed to improve the sale of products? 13 For development of Apple or Samsung in ten years, which one do you have more confidence? Read More