Segmentation, Targeting, and Positioning Strategies of Samsung and Apple Products - Essay Example

Marketing Executive Summary A report is focused on the differences in the segmentation, targeting and positioning (STP) strategies of Samsung and Apple products in US market. It has also described the marketing mix strategies of both the organisation. The further discussion has enlightened the effect of product, price, place and promotional strategies in the formation of the STP strategies of both the leading electronic goods manufacturers and dealers of US market. This report has also shown a comparison between the different strategies followed by both the organisation to create a strong market in different parts of US. Table of Contents 1 1 1 1. Introduction and company background 4 2. Marketing Mix of Apple 4 2.1 Product 4 2.2 Price 4 2.3 Place 4 2.4 Promotion 4 3. Marketing Mix of Samsung 5 3.1 Product 5 3.2 Price 5 3.3 Place 5 3.4 Promotion 5 4. Segmentation comparison with the help of marketing mix strategies 5 4.1 Market segmentation of Samsung 5 4.2 Market segmentation of Apple 6 4.3 Critical comparison 6 5. Targeting comparison with the help of marketing mix strategies 7 5.1 Market Targeting of Samsung 7 5.2 Market targeting of Apple 7 5.3 Critical comparison 8 6. Positioning comparison with the help of marketing mix strategies 8 6.1 Market Positioning of Samsung 9 6.2 Market positioning of Apple 9 6.3 Critical comparison 9 7. Summary 10 1. Introduction and company background The report is based on the study of the segmentation, targeting and positioning (STP) analysis of Apple and Samsung in the US market. These two organisations are the leading electronic goods manufacturer and dealer all over the world. This analysis is also emphasises on the importance of marketing mix strategy while analysing the different stages of STP strategy (Wood, 2008). Apple Inc. is a multinational company headquartered in California. It was established in the year of 1976 by Steve Jobs and Ronald Wayne. Apple offers consumer electronics, personal computers, software and online services to its customers (Marketline, 2014). Samsung is the leading electronic consumer durable organisation founded by Lee Byung-chul in the year of 1938. It is headquartered in Seoul, South Korea (Mukit, 2014). 2. Marketing Mix of Apple 2.1 Product The product portfolio of Apple includes portable computers such as Macbook series, iPod, iPhone, iTune, printers, servers and wifi based stations. Apple MacBook and iPhones have created their status symbol. Their product category also includes different accessories and peripheral products such as printers, magic mouse and storage devices (Worstall, 2014). 2.2 Price Apple prefers to push their brands as premium products and does not prefer to compete on market price. Apple follows the premium pricing strategy for their Mcbook and iPhone series (Worstall, 2014). 2.3 Place The distribution channel of Apple includes technology consultant and independent service provider. They prefer to sale their product only through authorized resellers, retailers and distributors. They also promote and sale their products through Apple authorized franchisee stores (Paczkowski, 2012). 2.4 Promotion Apple is focused on promoting their products within students and professionals. Through their promotional activities they try to attract their customer’s attention towards the special features and benefits of their products. Their promotional procedure includes advertisement through all the possible media and sales promotions. 3. Marketing Mix of Samsung 3.1 Product Samsung has a wide product portfolio which includes Tablet, notebooks, printers, wide range of mobile phone and television, cameras, refrigerator, micro-wave oven and washing machines. The most successful brand of Samsung is their Smartphone range such as their note series and galaxy series. In the last few years the products of Samsung have shown a very good performance which has assisted the company to gain the trust from a wide range of consumers all over the world (Bhasin, 2014). 3.2 Price Their wide range of products influences them to use different pricing strategies. They generally use two types of pricing strategy such as price skimming and competitive pricing. To launch their new smartphone range they prefer to set a high price. They tend to lower the price down once the model is old or has many competitors in the market. For other product of Samsung they prefer to use competitive pricing strategy so that they can beat their competitors (Bhasin, 2014). 3.3 Place The product distribution channel of Samsung involves three main segments such as dealers, modern retailers and distributors. They are selling their product through multi-brand showroom, Samsung exclusive showrooms and third party online retailers (Samsung, 2014). 3.4 Promotion Samsung uses different forms of promotion for their diverse product categories. They believe in advertising products to attract customers. On the other hand they prefer to push the products towards customer through sales promotion. Their sales promotion procedures include festive season and non festive season promotions. Samsung is welcoming any Smartphone users to exchange their phone with a new Samsung Galaxy Smartphone in a discounted price (Statista, 2014). 4. Segmentation comparison with the help of marketing mix strategies Market segmentation helps any organisation to divide the market into subsets of business, customers and countries with similar needs and demands (Wedel, 2000). Product and pricing strategies of any organisation influence the segmentation strategy (Smith, 1956). 4.1 Market segmentation of Samsung The market segmentation procedure of Samsung depends on their product offering as well as pricing strategy. They are mainly trying to promote their smart phone and notebook series in the US market so they have followed three kinds of segmentation procedure. This segmentation procedure includes demographic segmentation, psychographic segmentation and family life cycle segmentation (Marketline, 2006). In the demographic segmentation they have divided the market between middle and upper middle class consumers. These segments of consumers have rising or high disposable income. They have also divided the consumers into 16 to 35 age category. In their psychographic segmentation they have subdivided the market as per the technological preference and higher lifestyle of the consumers. In the family life cycle segmentation, they have divided the consumers as per their family status such as single, married or divorced, family with or without children (MakTechBlog, 2014). 4.2 Market segmentation of Apple Apple has done the market segmentation as per the demand of their Macbook and iPhone (Worstall, 2014). The market segmentation procedure of Apple includes demographic, psychographic and benefit segmentation. Demographical segmentation has been done as per the age and income of the consumers. They have divided the consumers into 14 to 55 age category. Their market segmentation tends to target the higher income population as they are following premium pricing strategy for their products(Freisner, 2004). Their psychographic segmentation is based on the posh lifestyle of consumers. So, the market segmentation of US focused on the posh areas such as New York, California and San Francisco. The market segmentation procedure of Apple Inc. in USA also focuses on the benefits of the products. The organisation brings innovation and newness with all their products and they tend to target the consumers who are looking for updating their products with new features (USC Marshall, 2010). 4.3 Critical comparison According to researchers, the current Smartphone systems and applications are too complicated to use. Most of these smartphones are designed for tech savvy consumers. So, the manufacturers tend to target the young and middle aged population (Teh, Ahmed, Cheong and Yap, 2014). While segmenting the market Apple and Samsung prefer to choose teenagers or middle aged customers. Ranges of products help any organisation to target a wide range of market segmentation (Desislava, Budeva and Mullen, 2014). Samsung can successfully reach different market segments as their product strategy includes different ranges of products. One the other hand, the market segmentation of Apple is very limited due to the premium pricing and limited product category. As per the researchers, attitude towards the consumption of luxury goods are increasing as people are very inclined to display their wealth. This purchasing behaviour symbolizes their social class and identity (Bock, Eastman and McKay, 2014). Apple generally focuses on the premium segment of the market. Due to their product features and pricing strategy they only look for the market segment with high disposable income and desire for latest innovation (Worstall, 2014). Market segmentation of Samsung focuses on the wide range of economical classes of the community. Their range of products is suitable for middle to upper class people (MakTechBlog, 2014). 5. Targeting comparison with the help of marketing mix strategies After segmentation of the market the next essential step for any organisation is targeting the right segmentations that will ensure the demand of the product. Targeting the right market will help any organisation to decide on the distribution pattern of their products. It also helps them to finalize their pricing strategy as per the demand of their targeted market (Ferrell and Hartline, 2012). 5.1 Market Targeting of Samsung Their price skimming and competitive pricing strategies help them to target a wide range of consumers from different economic background in the US market. Samsung follows multi-segment targeting as they target two main segments of the market (Russell, 2013). Their professional product range in competitive pricing helps them to targets the professionals from the middle class and upper middle class segment. Their pricing strategy and product features are suitable for these economic classes as they are looking for affordable products with latest features and technologies. They also target the high school and college students who prefer multifunctional and portable devices with latest applications (Reisinger, 2014). 5.2 Market targeting of Apple Apple follows the premium pricing strategy for all its product categories. The pricing policy helps the business to create a luxury brand image for their products. Therefore, the target market is very limited for Apple devices (Lamido, 2014). Their primary target market is the upper class consumers who have high disposable income. Their products with high professional features influence consumers to create and maintain a status symbol. Therefore, the target group is designed as per the social status, occupation and income of the consumers (Marketline, 2014). Apple is targeting the high profile business personnel of the US market. Almost all the devices of Apple are designed with features which will be helpful for business professionals. This situation has narrowed down the target consumers for them. Apple is also targeting the teenagers and students from college and high schools. Young people are more curious about the latest technologies provided by Apple (Moorman, 2012). 5.3 Critical comparison Various studies have discussed different impact of pricing policies on the market target strategies of organisations. The pricing strategies of any product influences the organisation to select the right consumer section who can afford their product (Persaud and Azhar, 2012).The price skimming strategy has given Samsung a competitive advantage in terms of their market targeting strategies in the US. Their wide range of products with different pricing policies helps them to target a huge number of consumers from different economical backgrounds. On the other hand, the market targeting strategy of Apple is only limited to the upper class people with high income (Moorman, 2012). Both of them are targeting the young and student segment as they are more inclined towards purchasing the latest technologies. These studies have also shown that individuals prefer to purchase those products which indicate their social status and income (Langner, Hennigs and Wiedmann, 2013). As a developed country, the disposable income of the US consumers is high. People are trying to maintain a status by consuming luxury goods. The products of Samsung are affordable to different economical classes. This has reduced the uniqueness of their products. On the other hand Apple devices help the particular higher income section to maintain their status (Bhasin, 2014). 6. Positioning comparison with the help of marketing mix strategies Market positioning can be described as an effort made by any organisation to influence the perception of consumers towards a brand or product (James, 2014). The objective of market positioning is to create a unique and advantageous market reputation for the products. The pricing strategy, placement and promotional activity of any product play a very important role in creating a strong market position (Beamish and Ashford, 2007). 6.1 Market Positioning of Samsung All Samsung products focus on the value of money when they are positioning their brand. They design their positioning strategy with the help of their pricing strategy, promotional activities and distribution procedure. Their positioning strategy conveys the consumers that they can get more features and facilities on a competitive price. Samsung is one of the highest sellers of Smartphone in the US market (Zeman, 2013). Samsung follows all the possible distribution channels in the US to position their product. They utilize multi brand stores as well as company owned brand stores to sale their products (Zeman, 2013). Their promotional activities are designed to target the tech savvy middle class and upper middle class population of US (Zeman, 2013). 6.2 Market positioning of Apple Apple follows various promotional strategies to position them in the US market. This include various discount schemes to attract more customers. Online Apple store offers free shipping to its customers who purchase products over the price of $50. Apple provides special back-to-school offers to college student to increase the sale within the teenage consumers. They also provide special discounted offers on iPod Nano and iPod Tourch. All their products come with one year warranty to gain the trust of the consumers. Apple also provides near about $100 rebate on the online purchase of Mac series or printers in the US market (Apple Inc., 2015b). They have established training centres throughout the US to educate their customers about the proper usage of their products (Apple Inc., 2015a). Their premium pricing strategy helps them to position their product as a status symbol within the upper class community of US. 6.3 Critical comparison The study of market positioning theories convey that positioning of any product or services is a challenging decisions about how any organisation can make a stand out impression of their brand in comparison to its competitors. It also emphasises on how those products or services might be perceived as superior on a choice dimension (Urde and Koch, 2014). Various researches have shown that proper promotional strategies help any organisation to create a brand image on consumers mind. These promotional activities influence the sales of premium priced products over competitive priced products (Lowe, Yee and Yeow, 2014). Apple’s brand promotions influence its target customers to think differently and innovatively. Their promotional methods targeted the consumers who are looking for technologically innovative products. Conversely, Samsung focuses on the affordability of their products. The promotional activities of Samsung are focused on the consumers who are looking for advanced technologies in cheaper prices. Different studies have shown that different positioning strategies within organisations help in attitude formation among the targeted consumers. This attitude formation helps organisations to create brand loyal consumers (Singh, Kalafatis and Ledden, 2014). Apple’s training centres gives an added advantage to the product positioning in the US market. High quality products and premium pricing strategy have made Apple one of the highest acclaimed luxury brands in the USA (Apple Inc., 2015a). On the other hand, Samsung’s competitive pricing and technologically advanced product have created a competitive brand reputation among the middle and upper middle class consumers of various parts of the US market (Sylvia, 2014). 7. Summary The report has described different segmentation, targeting and positioning (STP) strategies of Apple and Samsung in the US market. It has also established the effect of marketing mix in the determination of the STP strategies of these organisations. The study conveys various similarities and differences in the strategic approaches followed by these two leading companies to create their strong market presence. Both of the organisations prefer to target similar age group of customers. They have also introduced professional devices with advanced technologies which are targeted to the business professionals of the US market. The distribution channels and product placement procedure are almost same for both the products. The segmentation, targeting and positioning strategies of Samsung follow the competitive pricing strategy. Their main target markets are middle class and upper middle class consumers. Their strategies have positioned them as a competitive and affordable product in the market. Samsung is catering to a wide segment of the US market. The market segmentation, target and positioning of Apple Inc. mainly follow the premium pricing and luxury brand promotion strategy. The organisation is focused on targeting consumers with high disposable income. Therefore, they have positioned themselves as a status symbol for targeted consumers. Reference List Apple Inc., 2015a. IT in classroom. [online] Available at [Accessed 6 January 2015]. Apple Inc., 2015b. 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