Mobile Marketing of Samsung - Case Study Example

Samsung Mobile Marketing Report Table of Contents Introduction 2 Samsung’s macro and competitive environment 2 Technological environment 2 Socio-cultural environment 3 Environmental factors 4 Samsung’s marketing programme elements 5 The TOP (The Olympic Partner) Plan 5 Product mix (diversification) and design 6 Green initiative 6 Promotion through Online marketing 7 Corporate social responsibility (CSR) 8 Recommendations 8 3D game application 8 Lower prices 9 Sustainable and comprehensive campaigns 9 High quality products 9 Conclusion 10 References 12 Introduction The mobile technology industry has become very competitive due to the emerging new technologies, which have introduced mobile phones, which are more than just communication tools. Today’s mobile phones are more of a PC since one can receive and send emails as well as visit other websites in search of information. These phones also serve as entertainment gadgets where users store music and videos as well as use other entertainment applications such as games. In addition, these phones have become important business tools with many firms preferring to use such gadgets as Samsung, BlackBerry and Apple smart phones to do important business transactions such as emailing and online marketing. Due to this increased competition in the mobile industry, the marketing departments of mobile brands have been pressured to become aggressive in their marketing strategies to attract and maintain customers. Samsung Electronics has identified several marketing strategies such as adopting green technologies, being socially responsible as well as product diversification. It is also worth noting that since its entry in the UK market in 1984, Samsung electronics has become a popular and well-respected brand due to the use of effective promotional strategies. Samsung’s macro and competitive environment The mobile phone industry has become very competitive since the introduction of the smart phone. The key players in the smart phone arena include Apple, BlackBerry, Samsung and Nokia. Each of these mobile phone brands have been designed with technologically advanced features to have a competitive advantage over the rivals and also attract and maintain customers. Therefore, creativity and innovativeness are two important aspects that are employed in the smart phone industry. Technological environment According to Brassington & Pettitt (2003) as discussed in Ijaz (n.d), the technological environment creates opportunities to come up with new products. Technology is the driving force behind the creation of smart phones where each brand is striving on producing a more technologically advanced smart phone than that of its rivals. As mentioned before, mobile phones have recently become important business tools that are used in business communication such as sending and receiving emails. All smart phones are internet enabled and hence are used by businesses to transact online activities such as advertising, purchasing as well as communication in general. For populations that are interested in social media as well as entertainment, smart phones also offer that option whereby there are diverse choices of applications available for users. Firstly, the design of the smart phones has a great influence on the demand of the phone by consumers. For example, Samsung’s Galaxy S2 has a very slim body measuring 8.49mm giving it a competitive advantage over the other smart phones such as the Apple’s iPhone and BlackBerry’s Storm (Westaway 2011). This slim design is very attractive and hence catches the attention of any potential buyers. Secondly, the operating system of the phone has an influence on the demand in the market. The Samsung Galaxy S2’s operating system is Android which gives the user the ability to perform actions such as e-commerce but this has been beaten by Apple’s iPhone 4S which runs on iOS 5 that is simpler and easier to use (Westaway 2011). Apple’s operating system also allows easier navigation for users making it easy to access new games and tools. Moreover, Samsung Galaxy S2’s screen resolution is very high and has Super AMOLED Plus display that makes images clear and bright (Westaway 2011). However, there is a very stiff competition from Apple whose iPhone 4S’s screen resolution is higher and makes things look razor sharp (Westaway 2011). It is therefore, important that Samsung remains very creative in creating a phone with a technologically advanced screen. In general, technology has played a very important role in creating a very competitive environment for Samsung mobile. Creativity is at centre stage when coming up with a mobile phone that will survive in the current competitive market. It is evident that Samsung mobile has been technology- oriented in the creation of its products so as to remain relevant in today’s mobile phone market. Socio-cultural environment Today’s world is characterized by use of technology in sharing information across the globe and the growth of the mobile phone industry has played a major role in facilitating this. UK’s population is composed of people from different socio-cultural backgrounds. Samsung has responded to this population’s demands and tastes by manufacturing a phone that serves both as a business and as entertainment tool. Most businesses are using smart phones to transact activities such as advertising, sending and receiving emails as well as data storage. E-commerce has been made possible by the use of smart hones that are web enabled and it is not surprising that people are now purchasing goods online using their phones. The use of smart phones among the young population especially for entertainment purposes has increased tremendously. Sharing of information in social sites such as Facebook has been made easier by the use of web-enabled phones. Samsung has strived to make phones with good quality cameras so as to attract young customers. The use of mobile phones has also increased in learning institutions as students use phones to search for information online. Environmental factors Globally, environmental pollution is a growing concern and is in most cases associated with industrial growth. Environmentalists are pointing accusing fingers to industries with ICT industries not being an exception. It has been found that most manufacturing companies do not manage their waste and e-waste has been on the increase. For mobile phone manufacturers, there is the challenge of managing wastes such as faulty batteries and phones that have completed their life cycle. Policies have been put in place so as to ensure that mobile phone companies dispose off their products in the right way so as to cause minimal harm to the environment. Samsung has been influenced by this growing environmental awareness wave to manufacture products that re environment friendly. The company has also adopted waste minimization strategies such as re-using and recycling of products. Additionally, the use of green technologies has also been adopted by Samsung through the manufacturing of solar mobile phones (Samsung Electronics Co., Ltd 2011). Samsung’s green management initiative has made it gain a competitive advantage over its rivals since most customers prefer products that are from a company that cares for the environment. It is evident that the growing environmental concerns have affected the production of goods by Samsung as well as its marketing environment. Samsung’s marketing programme elements In 2004, Samsung was ranked as the 21st valuable brands globally by Interbrand and is the globe’s “leading brand in electronics and digital industry” (123HelpMe.com). This success has been attributed to its aggressive marketing strategies that focus on people, environment and product quality. The TOP (The Olympic Partner) Plan In order to market its products, Samsung Electronics Company came up with a sponsorship strategy, which mainly targeted the Olympics (123HelpMe.com). This sport sponsorship strategy began in 1988 when Samsung decided to sponsor the Seoul 1988 Olympic Games and in latter years has continued to so through the provision of wireless telecommunication equipment in Olympic games (123HelpMe.com). Through the sponsorship programmes, Samsung is aiming at building brand awareness globally as well as promote positive attitudes of potential customers towards its products (123HelpMe.com). In this sponsorship programme, Samsung gives fans the opportunity to meet their heroes by organizing various social events during the Olympics. In addition, participants in the Olympics are also given communication gadgets by Samsung so as to be able to communicate with family and friends hence creating a ‘feel at home feeling’ to those who are far from home. This encouraged potential customers to buy Samsung products. Furthermore, this strategy gives Samsung an opportunity to show their new products and technology (123HelpMe.com). Publicity is an important method of creating brand awareness and it is through this that Samsung has been able to advertise its products to the world since the Olympics are global events. For instance, it is through the Olympic Games that Samsung has to launch its new products such as the latest 3G mobile, PDA- phone, digital camera cum phone as well as the MP3 mobile phone among other products. Moreover, the Olympic Games boost Samsung’s brand awareness since more people will become aware of Samsung products through watching or participating in the games. Product mix (diversification) and design Samsung Electronics Company is a manufacturer of Visual Display products such as televisions and monitors, IT products such as Laptops, PCs and printers, digital appliances such as refrigerators, washing machines and air conditioners, and mobile communication gadgets such as smart phones, feature phone and MP3 players (Samsung Electronics Co., Ltd 2011). This diversification strategy boosts brand awareness since when a potential customer buys for example a Samsung washing machine and finds that it is very effective, he will also prefer to buy other Samsung products. Therefore, product diversification is a marketing strategy that increases the sales of a company. Apart from diversification, products should also be well designed so as to attract more customers. Samsung has been innovative and creative when it comes to manufacturing of products so as to gain a competitive advantage against its rivals. In 2011, 37 Samsung products including mobile phones, home appliances, semiconductors and LCD products received Innovation Awards at the Consumer Electronics Show (Samsung Electronics Co., Ltd 2011). The design of products affects their demand in the market since customers are attracted to products that have a design that is not only attractive but also easy to use. Design of products is influenced by technology and Samsung Electronics Company has not been left behind in creating products that are technologically advanced. According to the Forbes magazine, Samsung Galaxy S was the biggest technology hit of 2010 (Samsung Electronics Co., Ltd 2011) and was leading in the market of Android smart phones. This shows that technology plays a big role in determining the market share of products. Through technology, Samsung has also created the Mobile WiMAX, which is a mobile broadband that apart from being cheaper has high speed, which reduces churn (Samsung Electronics Co., Ltd 2008). This mobile service application has improved Samsung’s mobile market share. Green initiative Due to the growing concern for the environment, businesses are adopting environment friendly technologies so as to market themselves since most people prefer buying products from companies that have proven that they care for the environment. Samsung Electronics has been in the frontline in manufacturing eco-friendly products such as solar cells. According to its 2011 Sustainability Report, Samsung has been recognized globally for its environment friendly products with an example being Blue Earth, a solar powered mobile phone. These green products, which amount to 2,210, have earned Samsung international environmental marks, which have in turn increased the company’s sales due to its green strategy. Additionally, Samsung has cut down on greenhouse gas emissions and has put in place a project that will reduce carbon emissions for the next 10 years (Samsung Electronics Co., Ltd 2011). In fact, in 2010, the company cut down greenhouse gas emissions by 31%, which led to an increase in sales (Samsung Electronics Co., Ltd 2011). To make this initiative sustainable, Samsung created an inventory control system for calculating the amount of greenhouse gas emissions in the atmosphere. The company is also establishing green partnerships with its associates with the aim of helping its global partners in setting up greenhouse gas inventories by 2013 (Samsung Electronics Co., Ltd 2011). Moreover, the company has adopted waste reduction strategies such as recycling and re-using of products (Samsung Electronics Co., Ltd 2011). It is also working on building a global environmental management system that will promote sustainable development activities. Promotion through Online marketing As part of its marketing strategy, Samsung has adopted digital direct marketing that is aimed at improving email deliverability, increasing brand awareness as well as increasing sales and attracting more customers (eCircle Ltd 2007). According to Samsung’s online marketing manager, Nick Turner- Samuels, the use of email is an important part in Samsung’s marketing strategy as it is used to inform customers on the latest handsets as well as other activities that may be of interest to them (eCircle Ltd 2007). For example, Samsung has partnered with eCircle, a European digital direct marketing company dealing with email campaigns. This partnership has been used in creating awareness of Samsung products through email campaigns. Online marketing reaches a large group of potential consumers especially the youth who do not read newspapers but prefer online articles. Most people are also opting to read articles online and hence online articles will be an effective method of creating brand awareness. Corporate social responsibility (CSR) Samsung Electronics Company strongly believes in integrating corporate social responsibility initiatives in its activities so as to ensure sustainable growth (Samsung Electronics Co., Ltd 2011). A CSR Liaison office was created in 2009 for the purpose of addressing and resolving CSR issues brought up by external stakeholders. This is a reflection of the company’s devotion to protect the interests of its stakeholders while at the same time executing the company’s vision and mission. Samsung Electronics Company also ensures that transparency and timeliness are promoted and that all its stakeholders including customers, shareholders, business partners as well as employees are informed of the company’s activities (Samsung Electronics Co., Ltd 2011). CSR initiatives ensure good relations between the company and all its stakeholders hence creating a positive image of the company. This means that people will be attracted to buy products from Samsung due to its good relations with the communities around them. Good customer relations also win customers’ loyalty hence they will be retained. Being environmentally responsible through proper waste disposal is also part of corporate responsibility (Laric & Lynagh 2010). Samsung has proven to be environment friendly through its green management initiatives that have been discussed in the green initiative section above. Recommendations Although Samsung Electronics has been very aggressive in its marketing strategies, there are several recommendations that if adopted can increase the market share as well as the profit margins of the company. 3D game application In order to beat the competition from its rivals (iPhone and BlackBerry), Samsung mobile should establish partnerships with 3D game providers such as Microsoft. 3D game applications will attract customers to buy Samsung mobile phones and hence this will increase the general profits of the company. It is evident that current mobile phone users want phones that are more than just communication tools; they want entertainment gadgets that are web enabled and with a wide range of applications. Lower prices The price of a product usually has an impact on the demand of that product in the market. Though some customers especially those that are concerned more with quality than price will purchase the products, most customers prefer cheaper goods and will in most cases turn to the cheaper alternatives. Therefore, it is advisable for Samsung to lower the prices of its mobile phones so as to attract and maintain customers. Reduced prices will attract customers from all social classes and hence increase both the market share and profit margins of the company. Sustainable and comprehensive campaigns In the growing market, it is important for Samsung mobile to advertise its mobile phones through putting emphasis on the technological features. When selling the products, it will be more advantageous if the products’ features such as camera, screen resolution, operating system as well as design are highlighted so as to make the potential consumers aware that they are buying a technologically advanced tool. Pointing out the weaknesses of other brands will be more of marketing the rivals’ brand; therefore, it is advisable to highlight Samsung mobile’s features. High quality products Samsung Electronics should ensure sustainable production of high quality products such as HDTVs and mobile phones so as to maintain its customers. In order to remain relevant in the field of technology and innovation, Samsung should enter into deals with other leading technology companies such as Toshiba so as to be able to create products with advanced features that will offer several choices to customers. According to the Samsung Marketing Plan available at (Samsung, 2010) the making of alliances with technology-oriented companies will not only boost Samsung’s market share but also increase company revenues. People will be compelled to buy Samsung products due to quality and will not mind the price since quality is the driving force. Conclusion The mobile phone industry has become very competitive especially with the introduction of the smart phones. Samsung’s smart phones are facing stiff rivalry from mobile giants like Apple and BlackBerry. These rivals have smart phones with technologically advanced features such as high screen resolution and easy to use operating systems. Other macro environment factors affecting Samsung mobile market share include environmental factors such as waste management and corporate social responsibility as well as socio-cultural factors such as age. However, Samsung Electronics Company has come up with several marketing strategies that are aimed at beating the competition in the market. The first strategy is the sports sponsorship initiative whereby Samsung is usually the official sponsor of the Olympic Games. This initiative creates publicity hence boosting the brand awareness globally. Secondly, the company produces diverse products so as to promote its brand as well as increase its revenues. Another strategy is the adoption of green technologies such as manufacture of solar powered mobile phones. Through its green initiative, Samsung has been able to ensure the sustainable production methods that are less harmful to the environment. Moreover, Samsung markets its brand through aggressive promotion and has recently adopted online advertising, which has proved to be more effective since most people prefer to read online articles. Additionally, through its corporate social responsibility policy, Samsung has ensured transparency and accountability to all its stakeholders and associates. The company has maintained good social ties with the communities surrounding it as well as its employees. However, there are several strategies that if well implemented will further stretch the market and revenues of the company. These strategies include investment in 3D mobile game applications, lowering of prices, comprehensive campaigns and consistent production of high quality products. References 123HelpMe.com 2000-2011. Samsung- the TOP brand in the world. Available at   http://www.123HelpMe.com/view.asp?id=47241 [Accessed on 31 January, 2012] eCircle Ltd. 2007. Case study: Samsung creates sparks with unique digital direct marketing. Available at www.ecircle.com [Accessed 1 February 2012] Ijaz, A n.d. Marketing environment: A report on GlaxoSmithKline (GSK’s) marketing environment with recommendations made for future product and marketing development. Available at http://a.ijaz.angelfire.com/MarketingEnvironment.pdf [Accessed 5 February 2012] Laric, M.V & Lynagh, P.M. 2010. The role of integrated marketing communication in sustainability marketing. Proceedings of ASBBS, vol. 17, no. 1. Samsung 2010. 2010. Marketing Plan. Available at http://www.scribd.com/doc/48355873/Samsung-Marketing-Plan [Accessed 4 February 2012] Samsung Electronics Co., Ltd. 2008. Samsung mobile WiMAX solution. Available at www.samsungNetwork.com [Accessed 1 February 2012] Samsung Electronics Co., Ltd. 2010. 2010 Samsung Electronics annual report. Available at www.samsung.com [Accessed 3 February 2012] Samsung Electronics Co., Ltd. 2011. 2011 Sustainability report: Global harmony with people, society and environment. Gee-Sung Choi. Westaway, L. 2011. Apple iphone 4S vs Samsung Galaxy S2. Available at www.crave.cnet.co.uk\mobiles\apple-iphone-4s-vs-samsung-galaxy-s2-50005518 [Accessed 6 February 2012] Read More