The Marketing Communications Strategy of Samsung Galaxy Note Brand - Research Paper Example

Marketing Communications Strategy for Galaxy by Samsung RABOSTIC framework analysis The paper provides a detailed analysis of the marketing communications strategy of Samsung Galaxy Note brand. For this analysis there is utilized the RABOSTIC planning model, comprised of 8critical elements, including: Research and Analysis, Analysis of Audiences, Budget, Objectives, Strategy, Tactics, Implementation and Control. There research indicates that marketing communication strategy implemented by Samsung for its Galaxy Note brand was very successful as the company’s sales and revenues have been continuously growing since the launch of the first device of this series. While there were identified marketing communication objectives, the measurement and control of achieving these objectives is limited due to lack of information and relevant data. Table of contents 1 Introduction…………………………………………………………………………….3 2 Research and analysis………………………………………………………………….4 2.1 Company analysis………………………………………………………………………4 2.2 Competitor analysis……………………………………………………………………5 2.3 Consumer analysis……………………………………………………………………..6 2.4 Market analysis………………………………………………………………………...7 2.5 Product analysis………………………………………………………………………..8 3 Analysis of Audience – Target Market Profile………………………………………….9 4 Budget…………………………………………………………………………………..9 5 Marketing Communications Objectives ………………………………………………..10 6 Strategy and Tactics…………………………………………………………………….11 7 Implementation…………………………………………………………………………11 8 Measurement and Control……………………………………………………………….15 9 Corporate Social Responsibility…………………………………………………………16 10 Conclusion ……………………………………………………………………………....17 11 References……………………………………………………………………………….18 1. Introduction The RABOSTIC planning model was designed to research, plan and implement marketing communication activities (Pickton and Broderick, 2005). This model is comprised of the 8 key elements, including the following: Research and Analysis, Analysis of Audiences, Budget, Objectives, Strategy, Tactics, Implementation and control. The remainder of this report provides a brief overview of each stage of the model, followed by the analysis and evaluation of the Samsung marketing communication strategy within the RABOSTC framework. The focus of the analysis is made on the 2014 marketing communication campaign of Samsung Galaxy Note 4. 2. Research and Analysis: overview of the current marketing environment of the brand An understanding of the brand’s current marketing communications environment needs to be understood before going on with the analysisof the brand’s marketing communications strategy. Research and Analysis is the first stage of the RABOSTIC framework as it provides background information necessary for identifying the company’s audience, budgets, objectives, strategy and tactics (Pickton and Broderick, 2005). This stage of the process concentrates on researching the current position of the organization answering the question “where the company is now” (Pickton and Broderick, 2005). In order to answer this question, it is necessary to answer a series of questions, including the following areas: company analysis; competitor analysis; consumer analysis; market analysis; and product analysis (Pickton and Broderick, 2005). Below is presented brief overview of the current marketing environment of the Samsung Galaxy Note based on the above listed categories. Company analysis The company has launched a Samsung Galaxy Series tablets and smartphones, and has established strong position on the market. Nowadays, the company is one of the leaders among the manufacturers of Android driven devices on the global market. The fact that the company’s operating profits has practically doubled from 2011 to 2012 (in 2011 was launched the first device of Samsung Galaxy Note) supports this statement (Mintel, 2014). In 2012, Samsung sold 213 million smartphone handsets, thus beating its key competitor, Apple (Mintel, 2013c). Sales of the Galaxy range of smartphones have contributed significantly to this boost of the operating profit (Mintel, 2013b). The revenue of the company generated by mobile segment has been also positively changing during the period from 2012 to 2013. Below are presented key financial data, which indicate that the previous company’s marketing communication efforts were not caviare. The experts believe, that Samsung’s strong performance within the smartphone market was supported by the revenue growth up to 18.8% from £18.8 billion to £20.4 billion by 2013 (Mintel, 2014). Year ended 31 December Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2012 -Q2 2013   £000 £000 £000 £000 % change Revenue 29,966,293 32,195,549 30,363,046 33,002,809 10.1 -ofwhichmobile 17,184,875 17,986,085 18,849,034 20,410,295 18.8 Operatingincome 4,666,150 4,795,595 5,042,192 5,473,633 17.3 Netincome 3,770,349 4,042,317 4,109,204 4,464,632 18 Table 1. Key financials, Samsung, Q3 2012-Q2 2013 (Source: Mintel, 2014). As it has been already mentioned, these results might be attributed to the company’s marketing communication campaign launched in 2012, where the company has become the second highest spender, and spent 58% more of the marketing budget than Apple did (Mintel, 2014). The major channels in 2012 and 2013 for tablet advertising were: TV, Outdoor, Press, Internet and Cinema (Mintel, 2014). Competitor analysis One of the key competitors of the Samsung Galaxy Note brand is the world known and well-established brand Apple, which produces both smartphones and tablets. Popularity and loyalty to this brand has been reflected in the Apple’s revenue, which rose by 45% in its fiscal year 2012 (Mintel, 2013c). The company continues to develop new smartphones, tablets and computer, and to spend significant sums for its ads campaigns in order to increase the desire of potential consumers to pay a premium for (Mintel, 2013c). Some other competitors of Samsung Galaxy Note brand (both direct and indirect) are: Google Nexus, Amazon Kindle Fire HD, Amazon Kindle Fire HDX, Microsoft Surface Tablet, Tesco Hudl Tablet, Toshiba Encore Tablet, and others. According to the Nielsen Media Research Mintel, total spend on Tablet computers has been continuously growing during the period from 2011 to 2013 (Mintel, 2014). As this case study focuses on the UK market as a geographical location, below is presented graphical illustration of the data for the UK market. Figure 1. Total spend on tablet computers, 2011-13 (Source: Nielsen Media Research Mintel, 2014) The total ad expenditure has increased from 2012 by 1.8% up to £9.83 million (Mintel, 2013a). It is worth to mention that affordability is recognized to be key driver for increased adoption of tablets in both mature and emerging markets (Lee and Caulgar-Pop, 2012). Below is presented a pie chart with the total ad spend on tablet computers, by brand/product in 2013. Figure 2.Total ad spend on tablet computers, by brand/product in 2013 (Source: Nielsen Media Research Mintel, 2014) Consumer analysis Mobile phones and tablets have been successfully integrated to the lives of the modern consumers in both mature and emerging markets (Shearman, 2013). Consumers of engage in with theirtablets/smartphones for the following key activities: e-mail, websites visiting, IM/Chat, Social networking, listening to music, playing games, reading e-books, watching videos, visiting websites (including e-commerce), reading newspapers and magazines (Kilger et al., 2012).However, with the continuous innovation and products’ improvement, user’s expectations and needs increase (Bosenick and Wildner, 2014). Samsungs Galaxy Note is a brand, which has found a balance between the two groups of consumers: older demographic who value good reputation and strong heritage, and the younger generation of 16-34-year-olds, who value a more stylish and innovative products and ‘cool’ image (Mintel, 2013c). The data below shows that Samsung is the most popular based on the ownership rate of technology brands, among all age categories as of April, 2012 (Mintel, 2013c). Figure 3.Current ownership of technology brands, by age, April 2012 (Source GMI/Mintel) (Mintel, 2013c) Market analysis According to Mintel research (2013c) the tablet market is well established. However, the market of smartphones is not as saturated amongst the older consumers. According to the forecasts, the greatest opportunity for tablet growth market is among the category of people over-65s (about 68%), Product analysis Samsung continuously introduces innovations of its Samsung Galaxy and Note series products. The company has launched the fourth-generation Galaxy S smartphone, with new features (dual camera, Samsung Smart Pause – feature enabling users to control the screen through eye contact; air gesture facility – where with a wave of hand user can scroll up and down a webpage, change a music track, or accept a call) (Mintel, 2013c). Analysis of Audiences The role of marketing communication strategy is to engage audiences (Fill 2013). Thus, prior to developing marketing communication strategy it is critical to identify who should be the target audience(s) of the company. In other words, to whom the marketing communication messages of the company/brand should talk to. Target audience can be comprised of many different categories among who are trade customers, media, government, end consumers, experts, influencers and other publics (Pickton and Broderick, 2005). Advertising enables companies to reach several audiences with simple messages (Fill, 2003). However, in order to create brand awareness, the company should clearly identify whom to engage by its messages. While analyzing the audience targeted by Samsung for advertising its Samsung Galaxy Note it is possible to suggest that end consumers, people who will potentially become owners of Samsung Galaxy Note products - is the main target audience of Samsung. The target audience based on the age factor is quite broad as it has been illustrated in the previous section of Consumer analysis. However, in addition to the end consumers, Samsung is more likely to target influencers and other decision making groups. Perception of the brand of the general public is also important for Samsung as it influences purchase decision of the potential consumers (prestige, “coolness”, etc.). As the company also focuses on Corporate Social Responsibility, the range of the target audience of Samsung Galaxy Note is expanded to government, general public, non-government organizations, etc. Budget Samsung Galaxy Note series represent a significant share of the total market spend. While there is no official data on the Samsung’s budget for promoting Samsung Galaxy Note, there are suggestions of some experts. Thus, for example, the estimated advertising budget of Samsung for the last year was $4.3 billion. The supposed marketing and advertising budget for this year is 14 billion, which is more than three times higher than it was in 2013 (Bhatnaturally, 2013; Mintel, 2014). According to the Mobile Phones Market Report (Hughes, 2014), Samsung has already exceeded its marketing expenditure budget comparing to the initial forecast. As of the end of March, 2014, the level of expenditure has accounted for a share of almost 25% of total expenditure on mobile phones, which is £28.7 (Hughes, 2014: 46). Marketing Communications Objectives Setting up marketing communications objectives is the fourth stage of the process, which requires answering the question of what the company is trying to achieve with its brand (Pickton and Broderick, 2005). The primary objective of the marketing campaign of the Samsung Galaxy Note is to differentiate it from its main competitor - iPhone (McDermott, 2012). Another objective of the Samsung Corporation in relation to its Samsung Galaxy Note brand could be formulated in a following way: “to educate as many consumers as possible about why the Samsung Galaxy Note series is the preferred choice for smartphone owners” (Marketing Weekly News, 2011: 674). As Todd Pendleton, the chief marketing officer at Samsung Mobile, said: "We want to let people know that there is a better choice out there when it comes to purchasing a smartphone. The next big thing is already here - you can have the latest, most innovative device without waiting in line" (Marketing Weekly News, 2011: 674). Thus, the company’s marketing communications objectives are concentrated on informing potential customers (users of smartphones) about the benefits of the Samsung Galaxy Note and facilitating purchase of Samsung Galaxy Note 4. According to the reports of Samsung, the company was planning to sell 15 million Galaxy Note 4 units in the first month of sales (Smith, 2014). Below are formulated four key objectives set for Samsung Galaxy Note. Objective 1 To differentiate it from iPhone Objective 2 To boost brand awareness (OReilly, 2012) Objective 3 To create intention to purchase Objective 4 To facilitate purchase Table 1. Samsung Galaxy Note: Marketing Communication Objectives Marketing Communications Strategy and Tactics Marketing communication strategy Strategy is the direction, which a company/organization is taking in order to achieve its objectives. For developing marketing communications strategy it is important to recognize what are the target audiences, what are the expectations of the campaign, and what the campaign can tell to its target audience(s) in order to influence their decision/actions/behavior (Pickton and Broderick, 2005). Samsung is continuously developing and innovating its Samsung Galaxy Note series and therefore, the core part of its marketing communication strategy is to inform its consumers and ensure competitive positioning on the market.It is worth to mention that the company’s digital marketing strategy is also built on innovation (McDermott, 2012). Samsung’s current marketing communication strategyalso focuses on making a brand a top five brand in the world by 2020 according to the Interbrand’s Best Global Brands scale. As of 2012, the company held 17th place, while its main competitor was on the 8th place. Thus, the company’s overall strategy is to reinvent Samsung as an aspirational brand (Chapman, 2012). Marketing communication tactics The tactics element is a process of defining specific events, measures and activities, which the company/organization is planning to undertake in order to implement its strategy and to achieve set objectives and goals (Pickton and Broderick, 2005). The tactics of Samsung to launch new product is based on utilizing the local media, newspapers, the electronic media, online marketing communications, and outdoor ads such as posters and hoardings in the major cities (Bhasin, 2014). Also, in order to promote the global appeal of the brand, the company invites sport celebrities (such as Amir, KhanDavid Backham, LeBron James,Usain Bolt, Maria Sharapovaand Li Na (Euromonitor International, 2014). The category of successful sportsmen is attractive to many fans worldwide. Therefore, Samsung uses all these sports celebrities for its marketing campaigns as they have “power” to positively influence consumers’ purchase decision (Lear, Runyan, & Whitaker, 2009). In addition to the above mentioned channels, Samsung uses public relations, writes articles for trade publications, places new releases tin order to support its promotional tactics (Bhasin, 2014). Branding through Storytelling Branding is a defined as “the process of developing a specific set of identifying marks, symbols, and perceptions to distinguish one product from competing products in the same market” (Key Concepts in Marketing, 2009, n.p.). Samsung Galaxy Note brand tends to use brand as a differentiating device (from iPhone), as a functional device, and as a symbolic device (Key Concepts in Marketing, 2009). Storytelling is used as both an operational communication tool and a strategic branding concept (Fog et al., 2010). The Samsung’s tactics is based on “storytelling that’s all about authenticity”, whereas the voice of the campaign has to be real (Precourt, 2014: 5). Marketing executives of Samsung strongly believe that authenticity is the factor which appeals to the target audience (Precourt, 2014: 4). However, the company’s branding strategy is also heavily dependent on storytelling, which is an effective tool for creating an entire brand concept (Fog et al., 2010). Thus, the core story is closely tied to the Samsung Galaxy Note brand. For operational communication purposes Samsung also uses different stories. Moreover, in June 2014 it has been announced about a new global partnership between Samsung Electronics and Marvel Entertainment. The companies are planning to integrate their brands and use Marvel’s visual storytelling to highlight Samsung’s technology and also to offer exclusive content (Samsung UK, 2014). Implementation Implementation also is an important element of the marketing communication strategy as it is actually the stage when the action should be undertaken. Previously developed plans and tactics become a reality or “operationalisation of what the plan intended to do when put into action” (Pickton and Broderick, 2005:301). Digital marketing Samsung is using data analytics capabilities in order to target its potential customers and advertise new Samsung Galaxy Note products (McDermott, 2012).Samsung has recognized the opportunity for the engagement of communities in the context of social media and focus on the social networking websites (Mosavi and Kenarehfard, 2013). The company has strong presence at all major social networking platforms. One of the main platforms is Facebook, which serves as the company’s social CRM channel (McDermott, 2012). In September 2013, Samsung has initiated an online marketing campaign to advertise the Samsung Galaxy S4 range. The company has utilized YouTube channel in order to place the series of videos entitled “Over To You”, which explained the potential of Samsung Galaxy devices to possible users (Mintel, 2014). Further, Samsung has implemented the TV and online campaign, entitled “The Next Big Thing is Already Here” (Tiltman, 2014). This campaign was aiming to educate consumers about the devices’ design, and other characteristics.Some of the latest series of advertisements also highlight Galaxy Note 4 features, such as the S-Pen, Photo Note, multitasking, and some screenshoot features (Tufts, 2014). Few days ago, Samsung has launched another campaign called "#NoteMyDay," showcasing the Galaxy Note 4. With a help of celebrities from Vine and Snapchat, Samsung has explained the “killer functionalities” of the Samsung Galaxy Note 4 (Rathinavel, 2014). These company’s messages promoting Samsung Galaxy could be referred to the category of ostensive communication, which is the explicit cues emphasizing the functional benefits of the brand (Lecture Notes, 2014; Hackley, 2005). Also, the company has uploaded several videos on its official channel on YouTube, where two young men play the role of Apple’s Genius Bar employees. With these series called “It Doesn’t Take a Genius”, Samsung has fired back at its main competitor (Bergen, 2014). This type of message can be characterized as the covert communication, as the intention of the communication is not as clear as it is in the ostensive messages (Hackley, 2005). Thus, by combining ostensive and covert communication, the company has made a focus on communicating its main competitive advantages contrasting with its main competitorApple. Sponsorship As Fill (2009) explained, sponsorship helps the brand to build awareness, improve the perception of the brand and to develop customer loyalty. Taking into consideration the company’s success of the sponsorship of the Games in Beijing in 2008 and the fact that the company’s share of the mobile market in China has grown by 10% (11% before and 21% after the Games) in result of its Beijingsponsorship (Chapman, 2012), it is possible to suggest that sponsorship is one of the most effective marketing communication tools utilized by Samsung. Samsung also has become an official 2012 Olympic sponsor and thus gained “carte blanch to advertise its products throughout the Games” (Chapman, 2012: 32). During the Olympic in UK, 100 Galaxy Notes were integrated into the storyline, defining parts of the experience (Carmichael, 2013:2). In 2014, Samsung also has taken active participation in the Olympics in Sochi, as it launched a multi-million dollar campaign, becoming the Worldwide Olympic and Paralympic Partner in the Wireless Communications Equipment category (Samsung.com, 2014).Unfortunately, no data (survey) is available on the other achievements in result of this specific marketing activity. However, it is possible to suggest that by its engagement with the Olympics, Samsung has managed to: explore product placement opportunities in venue; integrate social media campaigns effectively; and integrate mobile effectively into its activation strategy (Carmichael, 2013). Also Samsung supports major events as a sponsor (for example, IFA consumer electronics show) (Warc.com, 2013). Measurement and Control Each marketing communication tool utilized into marketing communication strategy by the company should be measured against set objectives and goals (Pickton and Broderick, 2005). For this purpose, the objectives set at the beginning should be SMARTT. While there are many different common measures of marketing communications effects, this case study is limited to direct sales data because of lack of publicly available primary researches. Also, it is possible to use the Hierarchy of Effects model in order to evaluate the effectiveness of implemented marketing/advertising strategy. The Hierarchy of Effects Model includes the following six stages: awareness increase; improve knowledge of the product; promote liking of the product; preference (disconnect from rival product (iPhone) and focus on their particular product); encourage conviction; and purchase of the product (Learnmarketing.net, n.d.). Figure: Hierarchy of Effects Model (Source: Lavidge & Steiner, 1961). Some of the measurement metrics that could be used by Samsung Galaxy Note include are identified and summarized below. Type of IMC Metrics to measure PR campaigns Level of brand awareness; number of media mentions; type and number of responses to press releases; Advertising Level of sales Recall Banner click throughs Visits to website Direct response to DR adverts through online or call centre enquiries Number of enquiries to intermediaries ( e.g. enquiries for a test drive following a TV or cinema ad Volume of sales through retailers following screening of advert Sponsorship levels of recall and awareness of sponsor measures through consumer research/surveys Online communications Cost per email Number of click throughs Number of visitors Time on site Page views Number of likes on Facebook (43 570 as of Dec 10th, 2014) Number of followers on Twitter Number of Youtube viewings Direct Marketing Number of vouchers redeemed as a result of mailings Volume of sales Volume of enquiries Cost per contact (TV, Radio, etc.) Table 2. Measurement of marketing campaign (Pickton& Broderick 2005, Fill 2013) Control is the final stage of the RABOSTIC process, which focuses on the mechanisms evaluating both effectiveness and efficiency of the marketing communication activities. Effectiveness in this model implies the productiveness of the campaign in terms of achieving what it was supposed to achieve and efficiency – the productiveness of the campaign in terms of providing value for money (Pickton and Broderick, 2005). Therefore, the results of the Samsung’s integrated marketing communication strategy could be measured via the company’s financial performance. At the end FY2014 the financial data will be available for further analysis and evaluation. Corporate Social Responsibility (CSR) The company has announced about its plans to work on its corporate and social reputation, thus focusing its strategy on sustainability (Mintel, 2013c). Samsung informs the target audience about its devotion to CSR and initiatives undertaken on the corporate website. Through this channel the company publishes information on the critical social and environmental issues its management faces with (Samsung.com, 2014). Moreover, the company also publishes CSR reports, thus informing the target audience about the progress and results of CSR activity (Samsung.com, 2014). CSR activity of Samsung Electronics can be divided into several subcategories, including the following: sustainable HR management (for example diversity management); development of Eco-Products; water conservation; supplier compliance management; conflict free sourcing initiative; product accessibility; and global social contribution (support of local communities around the globe) (Samsung CSR report, 2014). Conclusion Samsung Galaxy Note series is a successful brand on the global market of smarthphones and tablets. The company has utilized integrated marketing combining both traditional and online marketing channels in order to engage its potential consumers and facilitate purchase intention among its target audience(s). With the launch of new models/devices, Samsung makes a strong focus on advertising unique features and/or characteristics of its newly developed device and thus achieves one of its key objectives of informing and educating both current and potential users. Also, the company uses online marketing channels in order to mock one of its fierce competitors, Apple. Samsung Galaxy Note is aggressively marketing its new products, as it has ambitious sales plans to achieve. References: Bergen, M. (2014). See the Spots: Samsung Fires Back At Apple. [online] Adage.com. Available at: http://adage.com/article/see-the-spot/samsung-fires-back-apple-mocking-iphones-apple-watch/294916/ Bhasin, H. (2014). Marketing mix of Samsung galaxy, Samsung galaxy marketing mix. 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