Strategic Marketing Plan for Samsung Electronics Company - Case Study Example

RUNNING HEAD: STRATEGIC MARKETING PLAN FOR SAMSUNG ELECTRONICS COMPANY FOR SAMSUNG GALAXY S4 NAME INSTITUTION DATE OF SUBMISSION Table of Contents Executive Summary………………………………………………………………………….2 Introduction…………………………………………………………………………………..3 Overview of the product……………………………………………………………………..3 Main objectives of the plan………………………………………………………………….4 Market strategy of Samsung Galaxy S4……………………………………………………4 Corporate strategy…………………………………………………………………...4 Business-level strategy……………………………………………………………….5 Functional strategy…………………………………………………………………..5 Industry analysis……………………………………………………………………………..5 Market research……………………………………………………………………………...7 Framework for assessing macro and micro level factors for addressing the strategic challenges……………………………………………………………………………………..8 Price, product, place and promotion policies……………………………………………….9 Segmentation and targeting………………………………………………………………….9 Differentiation and positioning…………………………………………………………….10 Conclusion…………………………………………………………………………………..10 Reference…………………………………………………………………………………....11 Executive Summary This is a strategic marketing plan of Samsung Electronics Company in offering Samsung Galaxy S4 to the market. Samsung Electronics Company has recently become the most and leading competitor in the world of electronics. The plan will define three main objectives the will guide the implementation of all strategy. Industry analysis is very important therefore analysis of the industry in which the firm operates is really important. The Porter’s five forces have been used to assess the industry. Among the rivalry in the market include Apple Family, Nokia and Sony. The plan also focuses of macro and micro-level analysis in identifying the strategic challenges the firm perhaps will face particularly during young stage of product in the market. Market research that will be used is qualitative research and surveys since the data is collected from stakeholders through questionnaires and analyzed. Policies affecting product distribution, price and promotion are as well discussed. S4 is a new product in the market with similar features with Apple phones. Therefore, the relevance of differentiation and positioning strategy as the components of competitive advantage is discussed. Introduction This marketing plan is for Samsung Galaxy S 4, a product from Samsung Electronics Company. The contemporary world is composed of customers with pronounced needs in the field of technology especially in telecommunications and this has stimulated the Samsung Group to focus much on how to produce products which will effectively serve these needs. It is a decade now and Samsung Galaxy S 4 has profoundly accelerated the growth rate of the company (Samsung Electronics Company) from the best sell of the product. In January 2013, the company had a market capitalization of more than $ 51 billion overtaking the main competitor in the market (Sony) (Samsung Marketing Strategy Report, 2013). Focusing on the overview of the market, Sony phone products perhaps may not be a threat to Galaxy S4. However, Apple family which produces phone products of similar features look to be a big threat in the market. Samsung Galaxy S4 is expected to be a primary generator of profit and cash for the company in the next generation. Since Samsung Electronics Company is a multiproduct business institution a corporate strategy that focuses on the coverage of the organization and how resources are invested is very important. As the product remain being supplied to the market, a focus on how to gain a sustainable competitive advantage is also important. Overview of the product Customers currently are concerned with the quality of a product, longevity, the price and the features it has (Høj & Wise, 2006). Samsung Galaxy S 4 phone is the current archetype of cell phone development manufactured by Samsung Electronics Company. Unlike other other phone products like Samsung Galaxy S III, Samsung Galaxy S 4 has differentiated features like optical image stabilizer, xenon flash and optical zoom with 10x. The launch of the product perhaps would receive positive reviews. For instance, one of the companies in USA (GigaOM’s Tofel) would recommend the phone (S4) without hesitation. Though Samsung Electronics Company is based on Asia, there is a support plan offered by T-Mobile Company in USA selecting Samsung Galaxy S 4 as a sample choice plan for the company. The start market price of Samsung Galaxy S 4 is $ 149.99. The Main Objectives To increase the sales volume of Samsung Galaxy S 4 by 50% by the end of 4th quarter of the financial year 2013. To increase the market share from $ 51 billion to $ 70 billion by the end of 4th quarter of the financial year 2013 by enhancing effective market access through incorporation with the major technology companies of the world. To increase the profit developed by the product by 60% by capitalizing the market of the product by the end of financial year 2013. Market Strategy of Samsung Galaxy S 4 The marketing strategy of S4 will be guided by the three main objective mentioned above. It will incorporate three main business level strategies; a) Corporate strategy A corporate strategy is ought to be developed in order to have an effective S4 supply to the market. A good example is the T-Mobile Company in United States which selected the product as a sample choice plan. Therefore, if the company (T-Mobile Company) and the likes of GigaOM’s Tofel endorse the product to be used for its services then a shared culture is developed. This is an example of small single-product-line company. The relevance of this corporate strategy is that S4 will have reliable commercial customers whereby the product is distributed on behalf of the company thus increasing the market share. b) Business-Level Strategy The Company needs to increase the profit margin by 60% out of the sale of S4. A business strategy needs to be accomplished since it is in the objectives (Lim, Acito and Rusetski, 2006). Normally corporate and business strategy tends to have the same aim therefore, merging with the likes of T-Mobile Company and GigaOm’s Tofel Company is also a part of business-level strategy. c) Functional Strategy The specified product market of S4 is not only within Asia but it moves across Africa to both South and North America. Therefore, effective market research (that will be discussed later), product promotion, market opportunity analysis and macro and micro level analysis-determining the attractiveness of S4 in the market, is well structured. Implementation and control of the strategy will be guided by the set main objectives (Sater & Olson, 2001). Industry Analysis 1. Threat of new entrants Apple family is of the example of a new entrant to the industry. According to Arons & Waalewijn (1999), normally an entry of a new competitor in the industry perhaps would reduce the number of customers purchasing the product. Also, the Trade Practice Act that was introduced in 1974 is still effective and it ensures that there is an international consolidation of the firms. A corporate strategy developed by the Samsung Electronics Company whereby it merges with technology companies has enhanced effective flow of the product in the industry. 2. Bargaining Power of Buyers The structure of market in which S4 operates is a perfect competition. This means both the buyer and the seller have perfect knowledge of the industry. Therefore, the concentration of buyers to S4 will be small since the product is new in the market and this leads to high bargaining power particularly on price thus reducing the target profit. T-Mobile Company will be of great help if they endorse the product (S4) for its services. This will fix price of the product thus reducing the bargaining power of the buyers. 2) Bargaining Power of Suppliers International taxes on electronics during exportation and importation perhaps will increase the cost of supply of the product. Therefore, the suppliers in this case will come in and request for an increase in supply charge. According to Jain (1990), the cost of changing the suppliers is high. The company in this case would negotiate on the satisfactory supply charge with the suppliers such that there will be fair benefits on both sides. 3) Rivalry among Existing Competitors in the Market Apple family is one of the competitors with almost the same investment intensity with the manufacture of S4. Similarity in features and application though difference in operating system of the products describes the kind close rivalry between the two companies. Also, the existence of Sony and Nokia in the industry poses some rivalry to the product. 4) Threat of Substitute Product Samsung Galaxy S3, Apple Phones, Nokia and Alcatel phones which have similar features of Samsung Galaxy S4 are the substitute products in the industry. These phones essentially perform the same function therefore they will put pressure on the sales volume of the company as well as the profitability since the customers can easily shift to the available substitutes in the market. Market Research According to Lim, Acito & Rusetski (2006) market research of the new product will be guided by the three ideologies namely; Challenges in estimating the market potential of the product, Challenges associated with the forecasting of sales and profit for the new product, and, The relevance of the market research and market decision-making. Consumer research is the most efficient and effective mode of forecasting methods when it comes to S4. The relevance of this is it gives a customer to review the product and rate it. The customer also will give the feedback on how the product is. Consumer research also involves market test. The market research team has to supply a number of S4 phones to the market and gather the response from the consumers to the product. The company will use Surveys and qualitative research. The strategy will involve four steps; 1) Designing/developing a questionnaire: NB: the questions are cross-sectional and these are the examples of the questions; 1) Are you aware of the new Samsung Galaxy S4 in the market? If yes, i) Are you sufficiently interested with the new product in the market? If yes ii) Do you use the product in boundless or limited basis If no, iii) Why? 2) How do you find the product features and applications? 3) Are there any challenges while using the product? (Perhaps he/she can state one or two challenges) 4) What do you say about the future of the product? 2) Data collection process: Research team has to go to the market and survey the stakeholders either directly or through phone and internet-communication. They collect data through consumers feeling their responses about the phone in the questionnaires. 3) All the questionnaires are returned and data analyzed to generate the information. 4) The information is reported circulated to all the relevant teams in the firm. Framework for Assessing Macro and Micro level factors for addressing the strategic challenges According to Sekarya (2006), challenges are normally experience by the firms as they grow. At macro level, most firms are unable to define the size of the market, the growth rate of the stakeholders as well as type of industry in which it operates. On the other side at micro level, the firm the firm lack proper identification of consumers’ needs poor target market segmentation and unclear target customer identification. Therefore, the relevant structure for overlaying these challenges is for the firm to come up with organized organizational processes with enough resources. This will make the firm stronger and reduce the imitation by the others. At the macro level, the firm should create a lot of attractive opportunities for its new product. Effective differentiation and positioning strategy is also part of settling these challenges. Price, product, place and promotion policies According to Chitale (2011), effective 4Ps’ policies support the development of a good product portfolio. Therefore, to develop the precise marketing mix, the firm has to meet the following principles; The product must have the correct features, The price must be applicable and accurate, The product must be in the right place at the right time, and The customers in the market need to be communicated to about the existence of the product in the market. Segmentation and Targeting The market will be segmented basing on; a) Demography descriptors: Normally people with high income tend to be the target customers for S4. b) Geographic location descriptors: Asia, Europe, Africa and America are the locations are S4 target customers. c) Behavioral descriptors: T-Mobile is an example of the stakeholder that will use the product frequently if it endorses it. The relevance of the segmentation descriptors is that the firm is able to identify customer specific needs in each segment, the purchase influence of each segment that definitely affect the sales volume of the product, customer interest is realized as well and helps in decision making process (Myers, 1996). Niche-market strategy is the most appropriate target marketing strategy for S4 since there is a substantial number of customers in the segments created and the sale of the product perhaps will be high. Differentiation and Positioning Differentiation is a powerful tactical marketing tool. Therefore, with the fair price of S4, better service offered by the phone and customer purchase decision, the stakeholders will keep on preferring S4 brand as opposed to others. Good differentiation therefore comes in as a competitive advantage tool when the differentiated product creates a pool of potential customers in the market whereby they prefer one brand as oppose to another. Other competing firms will be producing similar products but the potential customers will remain with the same brand they prefer. Conclusion New products in general needs a lot of ‘care’ from the time of introduction to the market until the firm gains a sustainable competitive advantage from the product. S4 phone may look more selective in terms of income of the customers. The rich and the companies are able to acquire them easily while low earners can take time to acquire the same phone. Samsung Company has had a great approach in incorporating micro analysis at the industry level as well as at the customer level into international micro-level analysis. Apparently, this has boosted the marketing of the Samsung Galaxy S4. Reference Arons, H. d., & Waalewijn, P. (1999). A knowledge base representing Porter's five forces model. Rotterdam: RIBES, Rotterdam Institute for Business Economic Studies. Chitale, A., K. (2011). Product policy and brand management. London: PHI Learning Pvt. Limited. Høj, J., & Wise, M. (2006). Product Market Competition and Economic Performance in France. Paris: OECD Publishing. Jain, S. C. (1990). Marketing planning & strategy (3rd ed.). Cincinnati, OH: South-Western Pub.. Lim, L. K., Acito, F., & Rusetski, A. (2006). Development Of Archetypes Of International Marketing Strategy. Journal of International Business Studies, 37(4), 499-524. Myers, J. H. (1996). Segmentation and positioning for strategic marketing decisions. Chicago: American Marketing Association. Samsung Marketin Strategy. (n.d.). Scribd. Retrieved March 30, 2013, from http://www.scribd.com/doc/25248905/Samsung-Marketin-Strategy Sarya, S. (2006). Market selection for international expansion. Assessing opportunities in emerging markets. International Marketing Review, vol. 24, vo. 2. Slater, S. F., & Olson, E. M. (2001). Marketing's Contribution To The Implementation Of Business Strategy: An Empirical Analysis. Strategic Management Journal, 22(11), 1055-1067. T-Mobile to Offer Samsung Galaxy S 4 at Exceptional Upfront Cost | Business Wire. (n.d.). Press release distribution, EDGAR filing, XBRL, regulatory filings | Business Wire. Retrieved August 7, 2013, from http://www.businesswire.com/news/home/20130417005503/en/T-Mobile-Offer-Samsung-Galaxy-4-Exceptional-Upfront Read More