Organizational Objectives - Samsung Company - Essay Example

?Introduction and historical background of Samsung “Enlightened marketing calls for building long term consumer loyalty and relationships by continually improving the value consumers receive from the firm’s market offering,” (Kotler & Armstrong, 619). As such, this paper seeks to evaluate the strategies employed by Samsung in order to deliver customer value. The paper starts by outlining the historical background of the company as well as its objectives. The main part of the paper will discuss such as brand and product portfolio of Samsung, objectives, pricing strategies, promotional mix and distribution strategies. The main points discussed in the paper will be summed up in the conclusion. Samsung Electronics is based in South Korea and it specialises in manufacturing and distributing a wide range of consumer electronic products. The company was founded in 1938 and it has been involved in business of manufacturing electronic products for quite a long time. The company also has many affiliates as well as subsidiaries that operate under its brand name. According to the company’s 2012 annual report, Samsung is the world’s largest mobile phone manufacturer as indicated by the unit sales of the products. The smart phones offered by the company are by far the best compared to other products offered by rival competitors. Currently, the company operates in more than 200 countries across the globe and it has its own retail stores as well as subsidiaries that distribute its products to different customers across the whole world. Organizational objectives The main objective of Samsung Company is to offer products that are of superior value to the customers. The company is guided by a simple philosophy, “strong values and high ethical standards that inform our work every day. In everything we do, we strive to help people live better lives” (Samsung). The company’s vision is: “Samsung is dedicated to developing innovative technologies and efficient processes that create new markets, enrich people's lives and continue to make Samsung a digital leader.” The other objective of the company is to continue inspiring the world through development of innovative products, new technologies as well as to create solutions for the customers. The company is committed to become a global leader in digital technology and it also aims to satisfy the needs of different people across the globe. The other objective of Samsung is to maintain market leadership and to increase market share through creating loyalty among the customers across the globe. The company also aims to invest in people as well as distribution systems with a long term view of building a strong customer base (Samsung). Product and brand portfolio Samsung offers a wide range of electronic products that include the following: IT and mobile communication technology, printers, televisions, radios, DVDs, CDs, health and medical equipment, washing machines, stoves, fridges, computers, home theatres, cameras, memory devices among other products. According to its Annual Report 2012, Samsung Electronics is the global leader in the mobile communication technology. Its Galaxy phone has given it a competitive advantage over other players in this field. The company has managed to attract millions of customers across the globe and it is also performing well in the area of televisions. Basically, the brand portfolio of Samsung Electronics is comprised of different state-of-the-art products that are valued by many customers. The brand name is very powerful and it is regarded as one of the best especially in mobile communication. Pricing strategies Attracting and retaining customers can be a difficult task given that they have a wide choice to make from the products offered in the market. In most cases, a customer buys from the firm that offers the highest customer perceived value especially on the basis of evaluating the difference between all benefits and costs of a market offering compared to those of competing products. The aspect of price of the product has a bearing on the way customers are likely to react to a market offering. Jungah Lee, Lulu Yilun Chen Seoul and Hong Kong state that “Samsung Electronics’ strategy of selling smartphones at every price point spurred record earnings at Asia’s biggest technology company and helped push Taiwanese competitor HTC to its first ever quarterly loss.” This entails that the company has different prices for its products. The same product can be highly priced or in some cases, it can have a low price. The products offered by Samsung Electronics are also determined by market value in different parts of the globe. Different countries use different currencies and these tend to fluctuate. Therefore, Samsung uses this information to set prices for its products. The company also take into consideration the economic conditions prevailing in a particular country before they set their prices. It can therefore be seen that the same galaxy phone might be priced different in different countries as a result of the economic conditions obtaining in that country. Mariel Grazela also states that the company uses price variety to cater for careful customers. The company caters for different segments of consumers and it tries to peg prices that are favourable to each segment. In some cases, premium prices are used for its tablets as well as smartphones and this strategy is meant to differentiate the brand from other products offered by rival competitors. In most cases, premium prices are used on valuable products and this strategy has significantly helped the company to gain a competitive advantage in its operations. Some products also have low prices and this mainly depends with their quality. Distribution strategies Distribution refers to the channels that are used to move the product to the final end user (Kotler, 79). These channels vary from place to place across the globe and they greatly contribute to the performance of the product. Samsung has different channels of distribution of its products across the whole globe. It uses its own shops as well as other subsidiaries to distribute its products. The products offered by Samsung are found almost everywhere and the company is also intending to set more offices in different countries. These offices will oversee the distribution of the products offered by Samsung. The company management in different parts of the globe is also responsible for carrying market research in order to establish the ideal channels of distributing its products. The company’s products are found in various retail stores as well as other shops that sell electronic products. The company also uses the strategy of catering for low end users especially in developing countries where it distributes its products through different channels. Max Nisen states that “the company also has a huge advantage in distribution. The company's new Galaxy S4 will be available on 36 percent more carriers and in 55 percent more countries than the iPhone 5.” Research has also shown that Samsung products are readily available in many parts of the globe and the company is geared towards increasing its distribution channels. The main aim of this strategy is to gain as much market share as possible. The consumers’ perceptions are likely to be influenced by the way they perceive a product in the market. If they have close contact with the product, they are likely to develop a positive attitude towards it. It has been observed that Samsung has more distribution channels than the rival competitor Apple. This has given it a competitive advantage since it is in a position to grab a large market share. In most cases, customers are forced to try a new product if they can readily access it. This will also help the customers to develop experience with the product and this can help them to develop a positive attitude towards the market offering. In other words, it can be seen that the distribution strategy adopted by Samsung has helped it to differentiate itself from other rival competitors in the market. The customers do not need to struggle to find the products of their choice and this has greatly helped the company to gain a large market share. Through offering its products in different places across the globe, Samsung is in a better position to generate more sales since this means that the customers will be able to readily access the product. Promotional mix Promotional mix involves the use of marketing strategies such as personal selling, direct marketing, advertising and promotion to the retailers and the consumers (Kotler and Armstrong, 437). . Samsung uses advertising to promote its products to different customers across the globe. It can be seen that different media are used for promoting the products that are offered by the company. The advertisements are designed in such a way that they provide as much information as possible to the customers about a particular product. Direct marketing is another strategy that is used by Samsung to promote its products. The marketers for instance interact directly with the customers and they try to entice them so that they can buy the products offered. Through direct marketing and personal selling, the company stands better chances of appealing to the interests of many people since they are in a position to provide the much needed information about a particular product. The other strategy that is used by the company is to lower prices for its products especially when it is penetrating the market. Some of the selected products can be lowered their prices so as to attract many buyers. According to its official website, prizes are offered to different customers who purchase particular products. For instance, this promotion states that “Purchase selected Samsung Smart LED or Plasma TVs and receive a $300 Video Hub Gift Card.” This promotion runs from 9th October to 8th December 2013. The main aim of this particular promotion is to attract as many customers as possible. It can be seen in the above promotion that the prize money is an incentive to appeal to the interests of the customers so that they can purchase the products offered by the company. This will help the company to generate more revenue since many people are likely to be attracted by the prize money such that they can purchase the products offered. Price discount is the other promotional strategy that is used by Samsung to promote its products. Selected products are often sold at discounted prices so as to attract many buyers. Loyalty programmes are also created through selling products at discounted prices. Customers usually want to buy products that have fair prices while at the same time retaining their value. The buying behaviour of the consumers is mainly influenced by the benefits they are likely to derive from using a certain product. When the buyers are given a discount for a certain product, they are likely to respond in a positive manner. The consumers can also refer their friends and relatives to buy the product if the price is discounted. This strategy significantly contributes to the performance of Samsung Electronic. Conclusion Strydom (234) posits to the effect that by creating value for consumers, the firm can capture the value for the consumers in return. As discussed above, it can be seen that the success of Samsung Electronics can be attributed to different strategies it use in order to create value for the customers. For instance, the company strongly relies on innovation and creativity in the development of its products. The company also uses a differentiation strategy to appeal to the interests of many customers. The company also capitalises on the aspect of setting different price points for its products in order to attract many customers. Promotion strategy is also used to attract many buyers. In order for the company to maintain its market dominance especially in mobile technology in future, it is imperative to continue carrying market research so as to be able to establish the needs and interests of the customers. The aspect of differentiation through the strategy of innovation and creativity in the manufacturing of the products will help it to operate viably in the future. Most customers prefer valuable products since they will obtain many benefits from using the products. Works cited Grazella Mariel. “Samsung offers price variety for careful customers.” The Jakarta Post. . Web 24 November 2013. Jungah Lee and Lulu Yilun Chen Seoul and Hong Kong. “Samsung strategy delivers, hits HTC.”. 7 October, 2013. Web. 23 November 2013. Kotler, Philip. & Armstrong, Gary. Principles of Marketing. SA: Person, 2010. Print Nisen Max. “Samsung Has A Totally Different Strategy From Apple, And It's Working Great.” . 15 March 2013. Web. 23 November 2013. Samsung Electronics. 2012 SAMSUNG ELECTRONICS ANNUAL REPORT Samsung.. 2013. Web 24 November 2013. Strydom, Joana. Marketing. CT: JUTA, 2004. Read More