Marketing and Distribution Management of Samsung Electronics - Essay Example

? Introduction Samsung Electronics Co., Ltd, having its base in Suwon, South Korea, is a multinational in the electronics industry. This company is a subsidiary the Samsung Group of Conglomerates and according to revenue is the largest technology company in the world since 2009. It is an industry leader when it comes to production of electronic equipment such as telecommunication electronics, consumer electronics, home appliances and semi conductors. Along with being the world’s second largest producer of semi conductor chips, Samsung is also the world’s largest producer and retailer of smart phones. Statistics for the company as per the year 2011 showed that the company has 221,726 employees and its assets total USD 135.131 billion. The company’s main areas of products are mobile phones, televisions, semiconductors along with LED and LCD panels. 1 b. Marketing and Selling Concept Marketing is a collective process through which Individuals and groups attain what they require and want by creating, offering and exchanging products and services which considered as valuable with others. The major concepts hold in this perspective is: Selling Concept This Inside-out perspective assumes that people must be sold whatever good or service the firm wants to offer. First it is decided what should be produced and then is selected a strategy to persuade people to buy the decided product. This approach implies that great deals of promotional or selling activities are needed to make the product move through the market to the consumers. The Selling Concept could be summarized as 1) Start with deciding what the firm wants to make; 2) Persuade the customers to buy the given product; and 3) It is aimed at ‘getting rid of what consumers have’. Marketing concept According to this concept, the achievement of organizational goals depends greatly on knowledge of needs and wants of the target markets. Also, these needs and wants have to be satisfied more efficiently than done by the competitors. The Marketing Concept could be summarized as 1) Start with the needs of the customers; 2) Develop the Four P’s of marketing in light of the customer needs; 3) It is about “Having what consumers can get rid of” In practice, Samsung followed the marketing concept after analyzing the needs of consumers who require smartphones at affordable costs with all advanced features. The changes in life styles of consumers are closely monitored and suitable applications are designed to match these needs in every new model. That is why the sales volume of smart phones reached about 40% of sales volume of the company mobile phones category in 2012. 1 b. Market Segmentation and Targeting The segmentation done at Samsung is mainly on the basis of demographics and psychographics. Youth and middle age cosmopolitan consumers of both genders are targeted who belong to middle and high income groups. Novelty seekers, fun loving, extroverts are major personality traits of company consumers segments. The target strategy applied by Samsung is the 'shotgun' strategy according to which a wide range of market segments are covered through creation of many models. In contrast, Apple, which itself is a competitor, offers only a small number of models which are high-profile. In the pursuit of market share, both the companies have managed to mark their geographical presence as well expand it. However, the two companies can possibly come in to conflict inevitably as both get in to the run of trying to generate additional gains. 1 c. Brand Positioning The main positioning strategy of Samsung is to stop consumers just thinking about the product instead start feeling it as part of their personality. Normally when brand is transitioned from the left side of the brain to the right side, its position becomes powerful. i) Samsung has a position of best alternative to Apple iPhone category at economical price. Recent court cases of both companies supported this position as Samsung trying to achieve the leading edge in smartphones market. The rise that Samsung has experienced in recent years has been driven by a mix of exquisite hardware designs, popular Android services and software, sub brands which are memorable and widespread distribution. ii) In my view, company should try to achieve a leading position by creating an innovator positioning in minds of consumers by creating models of their own perspective. The use of more stylish new technology with different applications will change the positioning of brand. The recent ad campaign launched by Samsung for its smart phones illustrates an attempt to move to the right side of the brain. A new lexicon has been introduced by the company which indicated that users or buyers of Apple who assume that an Apple phone is a representation of the latest technology advancement have been “Samsunged”. The point being made through this is that smart phones offered by Samsung do much more than the Apple phones for which people wait in long lines to purchase. iii) Apple and RIM must be outgunned as Samsung has achieved the leading position in innovation with Galaxy Note II in 2012. However, Samsung’s victory was short lived as the iPhone 5S made Apple regain its top spot by becoming the leading smart phone. 1. Marketing Mix The strengths and weaknesses of Samsung Galaxy Note II in marketing mix are discussed below: 2.1 Product The Galaxy Note II is inspired by the Galaxy S III, It is a sequel to The Galaxy note, the last year's business oriented, note taking master - and is back with greater power and more features. Comparing it internally, Galaxy Note II is like a mixed up version Galaxy S III, which in itself is a huge improvement if compared to the former Galaxy Note. The screen size is a whopping 5.5 inches with a1280 x 720 resolution, and it is glad to know that at this pixel density it is a non-PenTile Super AMOLED HD panel. Extra pieces of software that are not provided by Android through default are used by Samsung which improves its ability to compete with the iPhone. One example of such feature is the 'Blocking Mode' that is quite similar to the ‘Do not disturb’ mode used by Apple which mutes notifications when you want it to (Appendix A). 2.2 Pricing Companies like Apple, HTC and RIM have had only and only smart phones in their due to which their maximum pricing has been high consistently that is $750, $600 and $400m, in comparison with Galaxy Note II with maximum price $605. 2.3 Placement The Samsung brand has a great advantage of being the top brand in the world when it comes to televisions with ever-present distribution. However, in their attempt to capture the ‘emotional versus rational place’ in the consumer’s mind, it is dire for them to recognize who they are competing with. 2.4 Promotion A brilliant idea used by the company is promotion of a product feature through a creative campaign which in itself is an attempt at a world record. The promotion campaign promotes the creative image of the Galaxy Note II and its interesting features such as the Pen Stylus which make it possible for the users to let their artistry flow. The commercials appeared recently in Super bowl, the top rated media event of the year. Another good strategy practiced by the company is inviting consumers to come to any of the Samsung Digital Plazas, Samsung Smart phone Cafe’s and Samsung Experience Zones to become a part of the campaign, leading to greater customer participation. In the above discussed marketing mix of the company, the focus of 5C’s is obvious as they represent the elements of the marketing mix. which are i) Consumers: Remain the centre of attention in product designing and promotion strategies. ii) Context: Global contexts are used with stable economic conditions, modern life styles, and growing technology. iii) Convenience: Easily available through physical and online retail outlets around the world. Galaxy Note II size is big enough to handle with one hand but largest screen outweighs the handling inconvenience. iv) Convergence: Focus on latest technology and individual consumers needs have increased the success of this model. v) Community: This model has strong online communities on socialmedia with high proportion of youth and young executives. 3. Consumer Decision making process 3a. Decision making scenario The black box model is an attempt to explain the decision making process that’s the targeted customers go through in their mind. Hence, to make a more effective marketing campaign, the use of an accurate black box model can be made (Kotler and Keller 234). The black box model is used by effective marketers to gain greater insight regarding the customers they target. For instance, in case of Galaxy Note II, advertisement in super Bowl with ultimate sex appeal worked as a stimulus, the stimulus-response system of a viewer of this ad helps in analysis of the purchasing motive and attracts the buyer. In this case, large part of the customer buying decision is based on personal characteristics. These factors, present internally, have both conscious and subconscious effects to sway business decisions. Internal factors which can influence the buyer to decide whether to take an action or not can be: lifestyle, needs, education, core values, and personal beliefs. Although these factors vary person to person, they may generally be similar when considering a specific target consumer group. These similar internal factors can be addressed by the marketers so that a customer response that is more favorable can be generated. 3b. Samsung Strategy By studying its customers demographically, Samsung electronics was able to come up with many sales promotion methods for both its mobile phones and home appliances. These promotional sales methods included extended warranty and trading an old appliance for a new one; these offers were offered to extend the peace of mind for the consumer and reducing the purchasing cost for them. Another strategy known as ‘regional based selective product marketing’ is also practiced by the company. Under this strategy, the needs of the customers are determined on the basis on the demographic structure of the region. According to this it is decided whether a product should be heavily marketed or not whether it be home appliances or mobile phones. 4. Recommendations for the brand 4a. Reasons why Flagship Samsung Smartphones are a hit when it comes to production of Android smart phones, Samsung with the course of time has learned to excel in creating the best Android phone. Its Android smart phones have it all ranging from powerful hardware, regularly updated software and topped off with a little bit of hype which the media and fan boys can play with. In order to sustain the leading position, company is recommended the following strategies. i) Maintains The Hype - The hype created for Apple iPhone is quite correctly comparable to the hype created by Samsung flagship smart phones. Samsung has had an advantage in the past that it has been successful is saving itself from complete leaks, as they have controlled their testing devices along with the supply chain. On the other hand, this area has been a weakness for Apple as all three of the previous iPhone models had been leaked well before their release resulting in the hype around them winding down. ii) Good Hardware Always Helps Being Compatible With Latest OS Updates When it comes to the hardware, Samsung makes use of one of the most powerful hardware available in the market for its flagship phones. Furthermore, the processors used, Exynos, are also produced by Samsung itself. This results with the devices having compatibility with a lot of OS updates versions and hence user support is maximized. iii) Cheaper Price Than Competitors – As all the hardware components needed to build the devices are manufactured by Samsung themselves, this allows them to have cheaper prices than their competitors. An example of this could be represented by the price of one of their costly product, Galaxy Note 2, which is INR 33,900. This is quite low as compared to the Apple iPhone 5 which is priced around INR 43,250 for the 16 GB version. iv) Excellent Marketing With Product Differentiation – Unlike their counterparts Sony and HTC, Samsung continues to practice separate advertising for each of their devices. This lets people be more aware about the differences amongst the different devices that the audience intended for them. 4b. In view of the relatively new introduction and huge increase in sales of smart phones for Samsung, Apple, and HTC, it is evident that Galaxy Note II is in the growth phase of product life cycle (Appendix C). The market share of Galaxy S series and Note series has reached to about 40% of Samsung mobile phones. Works Cited Kotler, Philip, and Kevin L. Keller. Marketing Management. Upper Saddle River, N.J: Pearson Prentice Hall, 2009. Print. Appendix A- Model Specifications   Samsung Galaxy Note II Product Codes N7100 GSM Bands 850 / 900 / 1800 / 1900 3G/4G Bands HSPA 850 / 900 / 1900 / 2100 LTE 700 (some models) Display 5.5-inch Super AMOLED HD at 1280 x 720 267 ppi pixel density Corning Gorilla Glass 2 Processor Samsung Exynos 4 Quad 4412 1.6 GHz quad-core ARM Cortex-A9 CPU Graphics Mali-400 MP4 RAM 2 GB Storage 16/32/64 GB internal user storage microSDXC slot Connectivity Wi-Fi 802.11 a/b/g/n (dual-band) Bluetooth 4.0 A-GPS and GLONASS NFC DLNA/Wi-Fi Hotspot/Wi-Fi Direct Camera 8 MP rear camera with BSI sensor and LED flash 1.9 MP front camera 1080p/30 video recording (rear), 720p/30 recording (front) Slow-motion 480p/120 support Ports MicroUSB 3.5mm audio jack S-Pen slot Battery Li-ion 3,100 mAh removable Launch OS Android 4.1 "Jelly Bean" TouchWiz UX Launch Date September 2012 Size & Weight 80.5 x 151.1 x 9.4 mm 180 g Price Unlocked & Outright: $679 (16 GB) | Buy now! Appendix B- Consumer decision making process- Black Box Model Appendix C- Product Life Cycle Read More