How effective are samsung and apple attracting customers - Assignment Example

? HOW EFFECTIVE ARE SAMSUNG AND APPLE ATTRACTING S Attracting new s is a vital task for an organization. The process of attracting new customers is complex and at the same time also consumes huge amount of resources. In this study, the effectiveness of Samsung and Apple’s customer attracting strategy has been evaluated. The key findings of the study was that majority of the companies try to maintain a balance between the spending used for attracting a new customer and retaining an existing customer. However, strategic differences are evident with Samsung and Apple’s approach to attract new customer. The study also found that Samsung uses a variety of technique to promote their products whereas Apple relies on marketing techniques such as word-of-mouth promotion and relationship marketing to generate hype for their products. CHAPTER I – Introduction Background In this age of cutthroat competition, a business greatly relies on its existing customers to sustain and survive. The purpose of a business is to fulfil the demands of consumers and in turn the customers make it possible for the business houses to achieve its aims and objectives. Customers are therefore adjudged as the most important stakeholders of a business (Clifton, 2012). A business does not operate in vacuum and therefore it is impossible for an organization to function without having any customer (Adler, 2010). Hence, it is obvious that customers are the resources upon which the sustainability and success of a firm depends. A number of scholars have argued that to acquire and maintain a competitive edge over the rivals, organizations should try developing long term relationship with the existing customers. However, along the same line it is also imperative that a company should attract new customers to increase the volume of business. Thus, the existing customers are the backbone of a company and the new customers take the company forward and help in achieving new heights (Cherunilam, 2010). Attracting new customers has always been a challenging task for the companies and those succeeded in achieving it have flourished. This piece of study is meant for analysing the significance of customer attraction in the welfare of a firm. In addition, the strategies adopted by firms in achieving high rate of customer attraction will be also evaluated. However, for this study Samsung and Apple have been chosen to analyse the effectiveness of their strategies in attracting new customers. Research Objectives The research objectives are as follows: - To identify the significance of attracting new customers for a business. To assess the effectiveness of Apple and Samsung’s strategy of attracting new consumers. Research Questions On the basis of the objectives of the research, the following are the research questions: - Q1. What is the importance of attracting new customers for a business? Q2. What is the level of effectiveness of the strategies pursued by Apple and Samsung in attracting new consumers? Limitations of the Study A study is always coupled by certain limitations and it is characterized by the factors that impact a study negatively. The following are the limitations for this study: - The study will involve assessment of Samsung and Apple’s strategy only and hence drawing a generalized picture is not possible. Due to limitation of resources and time, the study will not be able to carry out certain activities that might have increased the overall credibility of the report. CHAPTER II - Literature Review The literature review of a study holds a vital position in a research paper. It encompasses an in-depth discussion of the published information about the topic of concern. In addition, the literature review of the study will also take into consideration the theories stated by the authors previous and an evaluation will be made about its effectiveness in the present context. For example, an author might have portrayed a certain theory which was relevant for that particular era, but the same theory might not be relevant in the present context. Hence, a critical review of literature helps us understand the gaps. The literature review will be mostly based on secondary research and the sources to be used are printed journals, articles, newspapers, books and authentic electronic sources. Significance of Customer Attraction A business can only experience growth if has been able to successfully attract new customers. New customers give new dimension and perspectives to a business. Irrespective of the nature and type of business a company in involved into, a business will ultimately fail if it fails to attract new customer base. Therefore it is extremely important to retain the existing customers and attract new customers. According to Wilson (2010), the key to increase the sales and the business volume in this crowded market place is to understand the needs of customers and deliver the exact products. Understanding the need from a general perspective is more important as it is the only viable tool by which companies develop products and target new customers. Studies have suggested that acquiring a new customer is extremely valuable for a firm. It not increases the business volume, but at the same time allows the company to spread its wings. However, scholars such as Lawfer (2004) argue that the price of attracting new customer is much more than retaining a new customer. The author further argues that it is easier to satisfy an existing customer and the value provided by this customer is much more than a new customer. The author refers to the case of General Motors; where the company spends millions of dollars attract a new customer. However, in comparison only 20% of the total amount is spend on the retention of existing customers. Ironically, while attaining new customers the company has to lose most of its profits. Hence, from this discussion it is evident that technically it will be wise decision to cater to the existing customer base rather than attracting new customers. Yet, there is question which has remained unanswered which group is more valuable: existing customers or new customers? Despite large number of debates about whether it is better to target new customers or cater to the existing ones, companies around the world have taken a consolidated approach. Nowadays, understanding the turbulent situation of the business environment companies maintain a balance between retention and attracting new clients. Some of the evident strategies used by the companies are directly influencing existing customers to refer others thereby making them a word-of-mouth promoter, adverting in such a manner that both existing and potential clients are influenced and using contemporary forms of marketing. In the next section, a discussion will be made about the marketing strategies of Apple and Samsung. Along with that, the study will also try to frame a comparison between their strategies. The market size and share will also be evaluated and this will give a fair idea of the effectiveness of the strategies. Marketing strategy of Apple Apple is best known for the innovative products and services. The company generally offers high end phones and target customers who belongs to the higher income group. As a result of that the target market for the company is small. The company rely heavily on public relations strategies to create hype for their products. In addition to this, the company uses effective advertisements to target the intended customer group (Onkvisit and Shaw, 2004) A number of customers have mentioned that the operating system (iOS) is difficult to use. Getting aware of these facts the company has now modified its advertising strategy in which they portray the basic features of the phone. This is also a strategy to attract new customers. Apart from portraying basic feature to target new customers, the company has also experimented with pricing and product features to tap new customer segment. For example, the company is planning to launch mid ranged i-Phones and dual SIM phones (Holmquist, 2012). This will allow the company to target middle income group customers as well. Hence, from the above discussion it is evident that the company almost uses all the factors of marketing mix to tap new customer segments (Linder, 2006). Marketing Strategy of Samsung Samsung with its recent offerings such as Galaxy series, Note series and Ace series has been able to create a buzz in the market. The company is best known for price affordability and elegant design. The company specializes in almost every department of consumer electronics. The mobile division however offers the company with the highest revenue. One of the reasons behind the colossal success of Samsung’s mobile division is the availability of wide range of phones and this allowed the company to target customers from every section of the society (Pride and Ferrell, 2004). The pricing strategy of the company seems that it played a significant role in targeting diversified customer base. Furthermore, the advertisement and sales promotion of the firm also played crucial roles in targeting new customer base (Samsung, 2013). The company did not limit itself with only traditional marketing forms; rather it has always pursued a strategy, which is a combination of contemporary and traditional forms. For example, the use of sponsorship techniques, direct mailing and social media has allowed the company to target new customer bases (Wilson, 2010). Another medium that allows the company to target new customer or tap new geographical boundaries is the use of distribution channels. Samsung has hardly used selective distribution channels to distribute products, rather intensive distribution has always been followed by the company. Most interestingly, the company uses different strategies for targeting the rural population. With its low end phones, the company is active even in the rural places. Therefore from the above discussion, it is evident that the company uses diversified techniques to target and attract new customer base. Market Size/Share The market size and share acts as a key indicator to the effectiveness of the strategies of a company. Below are the data of the market share and market size of the companies: - Figure 1- Samsung & Apple Market Share (Source: Hill, 2012) (Figure 2– Worldwide Mobile Phone Market Share Growth) (Source: Mobicourse, 2012) The above figures clearly indicate that Samsung is the Market leader with a staggering 26% share of the overall market. Interestingly, the growth rate of the company is also among the highest. The growth of a mobile phone company is dependent upon the new sales because only a slight portion of the overall revenue is generated from the service division. Another inference that can be drawn from the study is that Samsung has been greatly successful in attracting new customers. Thus the strategy employed is highly effective. On the contrary, Apple holds 7% of the overall market share. The growth rate is less than Samsung. However, give the target market of the company, it can be said that the strategies adopted are not doing wonders, but providing good results. Comparison of the marketing strategies Apple Samsung Marketing Strategy Apple mainly relies on the design and innovation of its products. The marketing efforts of the company are also somewhat innovative in nature. Unlike other companies, Apple does not depend upon common advertisements forms, rather the company relies on public relation campaigns to create a hype for their products. The availability of wide range of phones and elegant design are the two pillars of Samsung’s marketing efforts. The company also uses various techniques of marketing and promotion to target new customers. Some of the common techniques are sponsorship, television and social media advertisements etc. CHAPTER III – Methodology Justification of the Methodology Both Apple and Samsung are top notch companies in the Smartphone industry. Apple’s USP is its innovative design and ability to present out of the box products, while Samsung offers elegance and variety. This research paper will be examining the effectiveness of these marketing strategies of Apple and Samsung, through collecting raw data from the respondents who are actually using the products. This will provide first hand information to the researcher regarding the actual result of the policy implementation. Since the objective in this case is to scrutinise the effect and significance of the strategies on and for the customers, so a qualitative analysis would be preferred. This is because the numbers of users are not the deciding parameter, when it comes to choosing the most effective strategy. Qualitative analysis offers solution for complex issues unlike quantitative analysis. Sampling Sampling is the process by which a subset of the overall population is selected in order to represent the whole population (Wilson, 2010). The sample size is 10 in this research and the respondents would be randomly selected. However, in order to maintain balance and an unbiased outlook, 5 respondents would be Apple users and 5 would be Samsung users. In case of selection of respondents, no discrimination would be done on the basis of age or gender because generally the Apple users are High net worth (HNI) individuals, young professionals and wealthy middle aged or old people because Apple sells expensive products. On the other hand Samsung offers products to middle income to high income group. So bifurcating on the basis of age or income level is not a good idea in this case. Data Collection Instrument The best data collection instrument that can be availed for this study is survey questionnaire because questionnaire will assist in deriving information from the respondents. The questionnaire will contain both open ended as well as close ended questions because through open ended questions, many significant information are gathered, which the respondents willing reveal on their own. For example, if Apple’s strategy is innovation, then the customer might reveal is the innovative feature in an Apple Iphone is actually innovative or not. Similarly, in case of Samsung, the open-ended questions will reveal whether Samsung actually offers variety or just the same in different package. Ethics The significance of ethical guidelines in a research project has increased tremendously since the last few decades. One of the major reasons for this is the outbreak of several cases pertaining to the violation of ethical guideline. However, this research paper will try to comply with the ethical principles. Hence, the following guidelines will be followed for the study: - 1. The study will ensure none of the respondents are physically or emotionally hurt during the research process. 2. The respondents are allowed to leave the process at any moment of time. 3. The study will not interfere in one’s personal interest. Conclusion The research paper is based on analysing the effectiveness of the strategies of Apple and Samsung. Both the companies have specific competitive advantage in the industry and unique selling proposition for which they are well know. However, just seeking the statistics of users does not prove the effectiveness of company’s strategies. It is the users who confirm the fact through their feedback and user experience. So in this research study, a questionnaire survey would be conducted among a sample of 10 respondents. This will assist the researcher in not only fulfilling his/her objective of conducting the research, but also answer the research questions. Reference List Adler, M., 2010. A Study of Marketing and Online Marketing Tools Which Improve Online Success. Munich: GRIN Verlag. Cherunilam, F., 2010. International Business: Text and Cases. New Delhi: PHI Learning Clifton, B., 2012. Advanced Web Metrics with Google Analytics. 3rd ed. New Jersey: Wiley Publishing. Hill, S., 2012. Samsung, Nokia, and Apple dominate phone sales in spring 2012. [online] Available at: [Accessed 04 November 2013]. Holmquist, L. E., 2012. Grounded Innovation: Strategies for Creating Digital Products. Massachusetts: Elsevier. Lawfer, M. R., 2004. Why Customers Come Back: How to Create Lasting Customer Loyalty. California: Career Press. Linder, J. C., 2006. Does innovation drive profitable growth? New metrics for a complete picture. Journal of Business Strategy, 27 (5), 38 – 44. Mobicourse., 2012. Developing Visual Interfaces for Mobile Devices. [online] Available at: [Accessed 04 November 2013]. Onkvisit, S., and Shaw, J. J., 2004. International Marketing: Analysis and Strategy. 4th ed. London: Routledge. Pride, W. M., and Ferrell, O. C., 2004. Marketing: Concepts & Strategies. 12th ed. Daryaganj: Dreamtech Press. Samsung, 2013. About Samsung. [online] Available at: [Accessed 16 September 2013]. Wilson, J., 2010. Essentials of Business Research. London: SAGE. Appendix Questionnaire Q1. What is more important according to you? a. Attract new customers’ b. Retain old customer’s c. A combination of both Q2. Kindly comment on the strategies pursued by the firm to attract new customers Q3. What is the promotional mode on which your company relies to tap new customer segment. a. Broadcasting and online Media b. Print Media c. Other Traditional Forms Q4. What are the assessment techniques you use for measuring the effectiveness of the strategies? Q5. Kindly comment about the company’s plans regarding the way by which it intends to target new customers Read More