The Marketing Analysis of Samsung Motion Sync Pet Vacuum Cleaners - Report Example

Marketing analysis of Vacuum cleaner Executive Summary The following report highlights the marketing analysis of Samsung Motion Sync Pet vacuum cleaners. The macro and micro environment is explained in the context of marketing. The macro environment is elaborated with the help of PEST analysis, Porter’s Five Forces and consumer behaviour. The issues and critical criteria before buying a vacuum cleaner have also been explained. STP (Segmentation Targeting and Positioning) concept is also used for demonstrating the marketing concept used by Samsung Motion Sync Pet vacuum cleaners. However, the marketing mix highlights essential parts pertaining to marketing of Samsung Motion Sync Pet vacuum cleaners. . Table of Contents 1.0 Introduction 4 2.0 Micro Environment 4 2.1 Customers 5 2.2 Green Issues 6 2.3 Competitive Environment 7 3.0 Macro Environment 7 3.1 Political 8 3.2 Economical 8 3.3 Social 9 3.4 Technological 9 4.0 Issues in the market 10 4.1 Key Issues 10 5.0 Porter’s Five Forces 11 5.1 Samsung’s Five Forces 11 6.0 Analysis of Buyer’s Behaviour 12 6.1 Purchasing criteria of a Vacuum Cleaner 12 6.2 Factors Affecting the Buying Process 13 6.3 Members of Decision Making Unit 13 6.4 The Buying Process 13 7.0 Segmentation, Targeting and Positioning 14 7.1 Market Segmentation for Samsung 14 7.2 Targeting Application on Samsung 15 7.3 Positioning application on Samsung 15 8.0 Marketing Mix and Recommendations 16 8.1.0 Product 16 8.1.1 Product Life Cycle 16 8.1.3. BCG Matrix 17 8.2.0 Price 17 8.3.0 Place 17 8.4.0 Promotion 17 9.0 Conclusion 18 10.0 Bibliography 19 Task: Individual Poster 21 1.0 Introduction In this competitive world of business, it is important to understand the needs and wants of customers. The wants and desires of individuals vary to a great extent, which is why companies implement different marketing activities for attracting these customers. In order to understand these needs, business reports are generated by companies by studying the macro and micro environments. This particular report gives emphasis on critical analysis and evaluation of the marketing strategies of Samsung Motion Sync Pet vacuum cleaner. The macro and micro environment is highlighted in this report, along with other features like, competition, analysis of buyer’s behaviour, key issues affecting the marketing activities of vacuum cleaner and associated segmentation, targeting as well as positioning strategies. The range of marketing mix is recommended for segmentation and marketing of the product in United Kingdom (UK). Samsung Motion Sync vacuum cleaner is a series of vacuum cleaner from Samsung, featuring a revolutionary Motion Sync Design. It has an elegant look, a twisting body detached by wheels. It has a very swift motion allowing easy movement. The curved wheels support body of the vacuum cleaner and also ensure a more static motion without risk of misbalancing. The wheels are deep and hollow, which enables smooth motion. The motion of the vacuum cleaner is steady and minimum effort is needed during cleaning. The vacuum cleaner is ideal for households as it holds on to dirty and adhesive particles along the brush area. In addition, it is very useful for those households who have pets. The best part of the vacuum cleaner is that there is no need to replace bags as it is a self-sustaining product (Samsung, 2014a). 2.0 Micro Environment Micro environment is also known as task environment and often brings challenges for the daily operation of a business. Changes in the micro environment have immediate effect on the business and thus, organisations closely monitor and analyse every element of the microenvironment. The monitoring in needed for adapting to rapid changes that are taking place at a regular basis as well as staying competitive in the market (Adler, 2010). The different elements of the micro environment are customers, employees, suppliers, shareholders and competitors. 2.1 Customers Peter Drucker had stated that customers are vital to any business as they occupy central position in the marketing environment. The marketers have to closely study and monitor the tastes and preferences of customers so that they can meet them and capture higher wider markets. The buying habits of customers should be identified so as to anticipate future position of the organisation (Ahlstrom and Burton, 2009). The people of the UK are very particular regarding outlook of their houses; as a result, they are very conscious about cleaning and decoration. Majority of the houses in the UK have carpet flooring and it is observed that almost every house uses vacuum cleaner for cleaning the carpets. They desire to avail best quality products, but at a reasonable rate. It is observed that due to high inflation, people in the UK had to encounter several challenges while spending. The disposable income of households in the UK fell by 2.7% in 2010, which was the biggest drop since 1977 (Kirkup, 2011). Hence, the consumer spending as well as standard of living had lowered. So, people are reluctant to buy new vacuum cleaner every year. They prefer to use the product for longer than a year, but a household with more than 4 members has to purchase one after a year. Figure 1: Families and households (Source: Office of National Statistics, 2013) From the figure given above, it can be stated that each family in the UK has less than 4 members as majority of the households have independent children who do not live with their parents. Thus, number of families increases due to independent mentality of the mass; every household needs to own a vacuum cleaner, which boosts the sales of vacuum cleaner even during inflation (Office of National Statistics, 2013). 2.2 Green Issues Currently, consumers are very conscious regarding using environmental friendly products. While taking decision regarding buying any product, they always consider the green issue. The green issues are mostly common in the electronic industry. This has forced retailers and manufacturers of the product to follow rules and regulation pertaining to green issues. It is their responsibility to make consumers aware about the fact that they should use eco-friendly products and dispose wastes in such a way that environment is not harmed. The manufacturer has, thus, concentrated on producing environment friendly products. From the above figure, it is evident that usage of environmental friendly products is high in Europe. Consequently, vacuum cleaner companies should focus on this issue and manufacture their products accordingly. 2.3 Competitive Environment The competitive environment does not only refer to competition among the companies, but also challenges that have affected customers and companies to a great extent. The purchasing power of mass in the UK declined during the recession, dragging down the sales of household appliances as people focused on saving more and spending less. This has affected the market for vacuum cleaner to a considerable level. The household appliances market in the UK is underdeveloped as compared to the United States. Hence, growth of appliance industry in the UK was not up to the mark as in the United States, which has reduced sales. The UK appliance market could have concentrated on innovation of online marketing. . 3.0 Macro Environment An organisation operates in a large macro-environment, which poses challenges as well as provides good opportunities. The uncontrollable and external factors that affect decision making of the organisation are demographic changes, legal, political pressure, social and technological changes. These external elements greatly influence performance of companies and also determine ability of a company to compete in the marketplace. It can even affect the relationship between an organisation and its valued customers. Therefore, these forces are referred to external marketing environment. 3.1 Political It is known that marketing decisions are strongly affected by the changes in political environment. The political environment consists of the governmental agencies and pressure from individual groups that are prominent in the society. It also incorporates the relationship between political parties and government agencies (Campbell, 2009). The business activities of an organisation are monitored accordingly. In 2009, the UK had to encounter a number of uncertainties because of rise in tax payments and increase in VAT, compelling consumers to cut down on their spending. However, it has been noticed that the UK had managed to overcome the effects of recession. The slow economic recovery had threatened job market in the UK and confidence of consumers. In 2010, imposition of tax by Con-Lib government had been severe for the companies as tax payments rose to great extent. All these factors have affected consumer spending in the UK and it will invariably affect the household appliances market as sales associated is dependent on the demand of consumers (Campbell, 2009). 3.2 Economical The economic factors that dominate a particular market are spending and purchasing powers of the consumers. The spending and purchasing power of customers are dependent on the economy as sudden uncertainties like, recession and inflation, can lead to decline in consumer spending. The marketers need to understand consumer trends in an economy such as, spending capacity and changes in income. These changes are very important for an organisation since they can greatly affect and as a consequence, the marketers should consider these factors and adapt to the changes for establishing a good relationship with consumers (Cherunilam, 2010). In 2007, with fall in house price and ill effects of financial crisis, the UK entered into a bad phase, which not only affected consumer spending, but also sale of the company. The fall in disposable income has forced the mass in UK to lower their spending and increase savings. They had also become conscious regarding the payments of debts so that they have sufficient cash for their personal uses. 3.3 Social The social facets in a marketing environment indicate the values of people and their corresponding perceptions. The customers take central position in the business environment and thus, it is evident that organisations should maintain a good relationship with them as well as respect social and cultural values that they follow. The technological development has led to a rise in usage of electronic items. The average usage level of vacuum cleaners has increased over five years in the UK. Affluent people were observed to own multiple vacuum cleaners, which had given rise to the sales of vacuum cleaners. With increase in employment level in the UK, consumers’ spending level also heightened, which improved the sales of vacuum cleaners. Even so, sales of vacuum cleansers are not limited to rich classes of the society. Currently, almost every house owns a vacuum cleaners and wishes to avail a better one (Cohen, 2004). 3.4 Technological Technological environment is regarded as the most dramatic force of the environment. It plays an important role in daily life of an individual. The technological changes have, however, affected companies worldwide. Consequently, it is important for the organisation to adapt to technological advancements taking place in the society. Competition is also a driving factor for embracing the technological advancement. It is observed that technological progress pertaining to vacuum cleaners is underdeveloped in the UK as compared to that in the US. In the UK, majority of the sales of vacuum cleaner are done through individual stores. Online platforms are not used extensively for selling these products. Hence, it can be stated that UK retailers can use technologies in order to attract more customers (Pride and Ferrell, 2004). 4.0 Issues in the market Due to several issues in the market, sales of the vacuum cleaners had fallen to a great extent over the past seven years. The issues included recession, low inline sales and various economic down turns. 4.1 Key Issues The main issues related to decline in the sales of vacuum cleaners are as follows: 1) Recession is the most important factor that had badly hit the sales of vacuum cleaner in the UK market. Recession has forced the people to cut down their spending so as to save for their daily requirements. The inflation was simply an addition to the worsening situation. Both recession and inflation had affected the sales of vacuum cleaner in the UK to such an extent that the companies were forced to lower the pricing, which adversely impacted their profit. 2) The new trend of flooring individual houses has influenced the sale of vacuum cleaner in the UK market. 3) The issues pertaining to online sales have also lowered the sales of vacuum cleaners in the UK. 5.0 Porter’s Five Forces The Porter’s Five Force model is a very powerful tool for accessing the power of individual business in the industry. This helps an individual organisation to understand its current strength and weakness in the competitive industry. The model aims at elaborating on the concept of five forces, which ascertains competitive attractiveness and intensity of a market. The five forces effectively identify the power of a particular business situation. Figure 2: Porters Five Forces (Source: Porter, 2008) The figure presented above highlights the five forces that are important for every organisation. 5.1 Samsung’s Five Forces 1. Power of Suppliers: Samsung has numerable number of suppliers of raw materials and possess minimal power to bargain with the company. 2. Power of Buyers: The bargaining power of the consumers is higher for this product as there are a number of brands in the market who markets same products. 3. Threat of new entrants: The entry barriers in this type of industry are low as big brands buy and sell in bulk. 4. Threat of substitutes: There is no direct substitute for vacuum cleaners in the UK. However, people can use brooms for cleaning purposes also. 5. Competitive Rivalry: The threat for competitive rivalry in the industry is high as there are a number of big brands, which market these products with same features and specifications. 6.0 Analysis of Buyer’s Behaviour The main aim of the organisation is to analyse behaviour of the buyers so as to determine whether their products are meeting market needs. When sales of the products increase, it is evident that customers have liked the products and a fall in sales indicates that their taste and preferences have substantially changed. 6.1 Purchasing criteria of a Vacuum Cleaner A particular consumer considers the following criteria when he/she purchases vacuum cleaner: 1) The buyers desires for vacuum cleaners, which are easily accessible and portable. 2) Consumers prefer such vacuum cleaners, which are able to clean dirt in the canisters and the filter has a long sustenance period. 3) The vacuum cleaners are expected to have indicators, which will notify when the dirt taking capacity is full. 4) Advanced technologies are universally desired by customers. It is generally observed that buyers follow particular steps for making a purchase. This process can take a short or long time period for affecting the decision making process of buyers. 6.2 Factors Affecting the Buying Process There are several factors that affect the buying process of a consumer: 1) Firstly, the buying process can be harmed due to interpersonal factors arising from obstacles such as, income of the buyer and colour specifications. 2) Secondly, the external factors also affect buying process of a consumer. 3) Thirdly, reputation of an organisation often harms the buying process. For example, if image of an organisation is poor, then buyers will refuse to buy its product. 4) The specification depends on individual choices; so, individual factor plays a determining role in the buying process (Schultz and Gordon, 2011). 6.3 Members of Decision Making Unit According to Witcher and Chau (2010), purchase decision is influenced by a number of individuals. An organisation needs to identify those influencers and then make appropriate strategies to promote the products. The influential individuals are as follows: Initiators: They play the role model in the buying process as without their initiation, the purchase need cannot be identified. Influencers: Influence can be from direct friends, relatives, colleagues and parents as well as personalities with whom there is no direct connection. Deciders: This people are main deciders who take the decision on behalf of the purchaser. Buyers: The buyers are those who purchase the products in reality. Users: They are the end user of the product. These particular individuals may not have taken the decision of purchasing, but enjoys benefits of the product nevertheless (Witcher and Chau, 2010). 6.4 The Buying Process Buying process comprises important steps, which direct a customer to purchase a product. There are five steps that follow consecutively: 1. Need Recognition: The need for product is to be recognised at the first step. The need arises from an urge to have the product. 2. Information Search: After the need has been recognised, information search is a highly required step. It is when the buyer search for product specification and price. 3. Evaluation of Alternatives: Alternatives are needed so as to meet specific demands if the actual product is unavailable in the market or is too expensive. 4. Purchase Decision: The purchase decision is taken by the buyer who will enjoy benefit of the end product. 5. Evaluation after the purchase: There should not be any post-purchase dissonance. This is an important aspect to be considered by the sellers. The seller has to satisfy the customer by providing him/her with the exact post-purchase promotional activities (Rugman, 2009). 7.0 Segmentation, Targeting and Positioning 7.1 Market Segmentation for Samsung For marketing the Samsung vacuum cleaner, the market should be divided into groups such as, age and family. The description of the family includes first, second or third generation or even those retired. Different generations are fond of dissimilar product specifications. The young generation does not have adequate time to take care of their family, given that they are mostly involved in their work. However, retired persons have sufficient time to pay attention towards cleaning and maintaining the house. They are aged, which requires them to use a light weighted vacuum cleaner. This is why Samsung vacuum cleaner is appropriate for them (Priem and Butler, 2001). The customers can be segmented according to their income and buying behaviours. The lower income group desires to purchase a low priced product that offers long lasting usage. In this manner, Samsung vacuum cleaner will fulfil their needs as it is reasonably priced and long sustenance capability. 7.2 Targeting Application on Samsung Samsung vacuum cleaner should target the household segment. It is observed that currently, every household in the UK has access to a vacuum cleaner and this helps the company to recognise their exact need and serve appropriately. The different generations demand specific product features, which are to be considered by the companies. Samsung should target each generation, promote the products accordingly and demonstrate ways to use (Stacey, 2007). 7.3 Positioning application on Samsung In order to earn recognition in the market, company needs to differentiate their products. The following figure elaborates on the product positioning: Figure 3: Positioning of Samsung (Source: Adler, 2010) 8.0 Marketing Mix and Recommendations 8.1.0 Product Samsung Motion Sync vacuum cleaner is a series of vacuum cleaner from Samsung, featuring a revolutionary Motion Sync Design. It has an elegant outlook with a twisting body detached by wheels. It has a very swift motion that facilitates swift movement. The curved wheels support the body of the vacuum cleaner as well as ensure a more static motion without falling over. The wheels are deep and hollow, which enables smooth motion. The motion of the vacuum cleaner is steady and requires minimum effort while cleaning. The vacuum cleaner is ideal for households as it holds on to dirty and adhesive particles along the brush area. As a result, it is very useful for those households who have a pet. The best part of the vacuum cleaner is that there is no requirement of replacing bags as it is a self-sustaining product (Samsung, 2014a; Wheelen and Hunger, 2011; Freeman, 2010). 8.1.1 Product Life Cycle The product goes through four main stages introduction, growth, maturity and decline. Each of the stages in a life cycle is very vital for a product. Introduction defines whether or not the product will be a success. Growth as a stage signifies whether the sales have increased or not. Maturity stage defines that consumers are satisfied, thereby bringing about an increase in demand and sales of products. 8.1.3. BCG Matrix Samsung Vacuum cleaners are in a cash cow situation, which has moderate market share, but reflects small growth. 8.2.0 Price The price of the product is kept reasonable so general mass can afford it. Samsung has also invented a new range of products directed at high-end customers who have the ability to buy high value products (Williams and Cutis, 2012). 8.3.0 Place Samsung should sales its products through multiple channels. The distributors help the company to channelize product to the retailers and big retailers. The company sells its product in showrooms. 8.4.0 Promotion Samsung should promote the products and its specifications over television and radios so that adequate number of customers is attracted. The advertisements should also be placed in the newspapers so that general mass is aware about the products offerings (Wilson, 2010; DeWit and Meyer, 2004). 9.0 Conclusion It can be concluded that this report highlights upon the market environment analysis of Samsung Vacuum cleaner along with a detailed discussion on consumer behaviour and marketing mix. The 4Ps and the Five Forces are thoroughly elaborated in order to clearly portray the marketing situation of Samsung vacuum cleaners. 10.0 Bibliography Adler, M., 2010. A study of marketing and online marketing tools which improve online success. Munich: GRIN Verlag. Ahlstrom, D. and Burton, G. D., 2009. International management: Strategy and culture in the emerging world. Connecticut: Cengage Learning. Campbell, D., 2009. International joint ventures. Aan Den Rijn: Kluwer Law International. Cherunilam, F., 2010. International business: Text and Cases. New Delhi: PHI Learning. Cohen, W. A., 2004. The art of the strategist: 10 essential principles for leading your company to victory. New York: AMACOM Div American Mgmt Assn. DeWit, B. and Meyer, R., 2004. Strategy: Process, Content, Context: an international perspective. Connecticut: Thomson Learning. Freeman, R. E., 2010. Strategic management: A stakeholder approach. Cambridge: Cambridge University Press. Kirkup, J., 2011. Household Spending Power Suffers Biggest Drop in 34 Years. [online] Available at: < http://www.telegraph.co.uk/finance/personalfinance/8604540/Household-spending-power-suffers-biggest-drop-in-34-years.html > [Accessed 14 June 2014]. Office of National Statistics, 2013. Families and Households, 2013. [pdf] Statistical Bulletin. Available at: < http://www.ons.gov.uk/ons/dcp171778_332633.pdf > [Accessed 14 June 2014]. Porter, M. E., 2008. The five competitive forces that shape strategy. Harvard Business Review, 86(1), pp. 78-93. Pride, W. M. and Ferrell, O. C., 2004. Marketing: Concepts & strategies. Daryaganj: Dreamtech Press. Priem, R. L. and Butler, J. E., 2001. Is the resource-based “view” a useful perspective for strategic management research? Academy of management review, 26(1), pp. 22-40. Rugman, A. M., 2009. The oxford handbook of international business. Oxford: Oxford Handbooks Online. Samsung, 2014a. Product. [online] Available at: < http://www.samsung.com/uk/consumer/home-appliances/vacuum-cleaner/cylinders/VC20F70HDFN/EU > [Accessed 14 June 2014]. Schultz, H. and Gordon, J., 2011. Onward: How Starbucks fought for its life without losing its soul. New York: Rodale. Stacey, R. D., 2007. Strategic management and organisational dynamics: The challenge of complexity to ways of thinking about organisations. New Jersey: Pearson Education. Wheelen, T. L. and Hunger, J. D., 2011. Concepts in strategic management and business policy. New Jersey: Pearson Education. Williams, J. and Cutis, T., 2012. CIM coursebook 06/07 marketing management in practice. London: Routledge. Wilson, J., 2010. Essentials of business research. London: SAGE Publications. Witcher, B. J. and Chau, V. S., 2010. Strategic management: Principles and practice. Connecticut: Cengage Learning. Task: Individual Poster Read More