Samsung Galaxy S4 - Strategic Programs for New Market Entry - Example

RUNNING HEAD: STRATEGIC MARKETING PLAN FOR SAMSUNG ELECTRONICS COMPANY FOR SAMSUNG GALAXY S4 NAME INSTITUTION DATE OF SUBMISSION Table of Contents Executive Summary……………………………………………………………………………...3 Introduction………………………………………………………………………………………4 Galaxy S4 Life Cycle……………………………………………………………………………..5 Introduction phase of Galaxy S4………………………………………………………..5 Growth Phase of Galaxy S4……………………………………………………………..5 Maturity Stage……………………………………………………………………………6 Decline Stage……………………………………………………………………………...6 Strategic Programs for new market entry……………………………………………………..7 Growth strategies………………………………………………………………………………...8 Strategic implications of Galaxy S4 life cycle in shake-out, mature and declining stages…11 Strategies to put in place in order to serve new economies effectively……………………...13 Organization Structure for Samsung Electronics Company………………………………..14 Marketing plans (SWORT Analysis)………………………………………………………….14 Marketing matrices and marketing audit……………………………………………………..15 Marketing Audit………………………………………………………………………………..15 Conclusion……………………………………………………………………………………....17 Executive summary This is a marketing plan for Samsung Galaxy S4 phone. Samsung Electronics Company has been recently recognized to be manufacturing high tech phones with outstanding applications and software. Google has been a close partner to Samsung Electronics Company. It provides the company with android operating system which supports several new applications for phones. Apparently, Samsung Company is a pioneer in manufacturing phones of high technology. This has eased the services in the world of telecommunication and information technology. The plan has focused on the product life cycle of galaxy S4 while discussing the look of the product when undergoing the five-stage cycle. The relevance of different growth strategies have been discussed having concentration on market expansion and flanker strategy. Galaxy S4 has not reached its maturity in the market since the cycle is not complete. Therefore, regular market audit will be expected from the marketing team. They should focus mainly on marketing environment and productivity analysis as the plan contain. Galaxy S4 has really taken attention of majority of segments in the existing economies and the consumers are anticipating high quality services from the phone. Introduction The market reach for Samsung Galaxy S4 is expected to be quicker than other brands of Samsung Electronics Company as compared to other brands. Reflecting on Samsung Marketing Strategy Report (2013), Galaxy S phones took about eight months to reach a target of 10 million units sales while Galaxy S III which was quite popular in most of the markets around the world reached a target of 10 million units sold in two months. With that trend therefore the new markets created for Galaxy S4 would roughly take not more than 20 days to meet the target of 10 million units to be sold. Australia and most part of Africa have emerged as the new market for the product. It is surprisingly noted that there are a lot of anxious customers in the region for the product and that would definitely accelerate or rather increase company’s sales on the new product (Samsung Galaxy S4). According to the report, 60 countries of the world are adequately served with Galaxy S4 phones. However, the avenue of exploring new markets, establishment effective product cycle and restructuring of organizational structure would positively shift the number of countries served with Galaxy S4 to about 150 within a very short span of time, 20 days at most. Objectives Three main objectives will guide the establishment of appropriate strategic programs as well as the design of the organizational structure the company is ought to exhibit in order to reach the prospective and desired main goal. The objectives include: To increase the sales volume to 20 million units which is equivalent to 50% increase in first month of the 4th quarter, To increase the market share by exploring new markets and working on a good strategy of being a market champion in product supply to the consumers, To invest on market capitalization that would lead to increase in profit by 60% in the first month of the 4th quarter in the financial year 2013. Galaxy S4 Life Cycle The current markets served with Galaxy S4 the product is selling well. This means that the life cycle of Galaxy S4 needs to be prolonged in order to enhance continuous product life in the market. According to Suttle and Media (2013), 95% of new products in the market fail each year due to poor strategies. However, the success of the product in cycle of four phases depends on key moves and strategies of competitive competence in most of the markets of operation. a) Introduction phase of Galaxy S4 The product was and still will be introduced to the new markets (customers) through prints and television ads. The pricing strategy falls in this phase whereby though $154 for Galaxy S4 perhaps may look higher, the hype and anticipation of new technology by the customers is also high. Since the product has completed full cycle, then anything would happen to the prince depending on the customers as well as the target profitability from the product. b) Growth Phase of Galaxy S4 An absolute figure of rise in sales as well as profit to Samsung Electronics Company is experienced at the moment. Apparently, this is an indication that the product (GS4) is well established in the market of operation as well as the new markets. Therefore, product quality in terms applications and inbuilt software should be maintained. When this is maintained eventually, the company will become a champion in the established markets like Australia (Jain, 1990). c) Maturity Stage Often when a business is successful inevitably it leads to increase in competition particularly in the market it operates (Suttle and Media, 2013). Apple family is a good example of a competitor who has produced similar phone specifications as Galaxy S4. It is good that the demand in the market for Galaxy S4 has picked. However, sales growth on the other hand will decline since some of the customers will go for apple family may be because of price for example. Differentiation as a matter of fact is very important and that is what company is expected to do in order to prosper. d) Decline Stage Sekarya (2006) stated that challenges are inevitable and are normally experience by the firms as they grow. Galaxy S4 is one of the current highest profit giving products for the company. It is developed from the world of new technology therefore it has not waned at any point. The company will maintain the product as well as harmonizing the prize in order to avoid decline stage and keep on challenging for the main targets as far as the three objectives are concerned. So selling the product directly to the consumers as well as technology companies like T-Mobile Company and GigaOM’s Tofel Company perhaps will extend the life of the product (Press release distribution report, 2013). The product life cycle of Galaxy S4 is to maturity since the signs of adoption rate has been seen but not well established. Though there is still competitive turbulence from Apple family it has not decreased growth rate to Samsung Electronics Company therefore the product is quite beyond third stage. Strategic Programs for new market entry According to Cherian et al (2010) companies vary in their way of entering new markets. Therefore, successful entrance normally depends on a conceptual framework which considers marketing strategic decisions and integrates prospector, defender and analyzer. This normally leads an organization to be a pioneer in demonstrating explicit entrepreneurial skills, instrument unique product lines (product development programs) and choose suitable performance measures of the product. Since Galaxy S4 is considered as a pioneer phone in terms of technology, strategy developed will consider the above aspects; a) As a prospector First, Samsung Electronics Company has responded to the market needs by providing high profiled phone to the new markets. At the same time it has remained as the champion in the current market. The breadth of product lines is continuing changing and growing. According to Lamkin (1988) targeting new customers and developing product lines to reach the customers is one way in which portrays the relevancy of mass market at the same time defines the strategy in which the company perhaps may withdraw from unsuccessful lines of the products. b) As a defender The Company needs to defend its Galaxy S4 in order to maintain its profit margin. Hart and Craig (1993) stated that defender will serve existing and the new markets with existing product lines thus skimming the kind of development programs that needs to be integrated. Galaxy S4 is pioneer product in terms of technology therefore integrating new development programs perhaps would limit withdrawal strategies that comes as a result of poor performance of the product in the market. c) As an Analyzer At the end of the day Samsung Electronics Company would like to remain as a market champion. Analyzers tend to target new customers both with existing product lines and new product lines (Terrill and Middlebrooks, 2000). Therefore, the company needs to be growth oriented, efficiency oriented as well as strategy oriented such that when exporting the product (Galaxy S4) the cost is manageable. On the other hand good strategy would make franchise business more successful. Growth strategies The big question is ‘if new markets are so appealing for the new products, why then on the other side do the companies struggle to market its new products?’ As a pioneer rather, it is important to track market share particularly by focusing on being a leader as well as market share maintenance, the kind of offer in terms of competitive advantage through position defense and acting as an analyzer by concentrating on withdrawal strategy (Ovcina, 2010). Market expansion Actually it is important to note that although the choice of entry is very essential for expansion, there is no guarantee for success whatsoever (Peng, 2006). A post entry strategy perhaps is of greater importance during market expansion. As a pioneer in terms of producing a phone with technology, Samsung Electronics Company has to penetrate the market through effective segmentation while defining the rules of the game later when it becomes a champion. Perhaps the penetration to both existing markets and new markets has been well achieved by the company by producing Galaxy S4 phones in which the current market demands. Actually the growing globalization, free trade agreements as well as increased corporation have led the companies rather to focus on internationalization (Dawson et al, 2006). Samsung Electronics Company needs to feature most when it comes to internationalization since as a pioneer in manufacturing high-tech phones, it needs to enter, grow and repositions both in the existing and new markets. That is where market expansion will be featured. Based on the market reaction in Australia, Africa and United States, continuation of large scale distribution is to be made. At this point the company will establish its position in the new markets and therefore is most likely to expand. The strengths as a pioneer with Samsung include: Economies of scale, Positive networks especially with those of other technology companies (T-mobile Company). Noble suppliers for the product (Galaxy S4). Flanker strategy Flanker strategy is suitable to integrate into the plan since Apple Company appears to be the main challenger in most of the markets Samsung is entering. Alexander and Dohetry (2009) found that challenger perhaps may choose to bypass the pioneer/leader especially in the markets segments the leader has not yet well establish. Apple Company and Sony Company are good examples of these competitors. It is good that the company (Samsung Company) has defended this by developing other brands before of high quality at the same time trading up with high prices particularly on prestige segment of the markets. However, this may not be the defender to Galaxy S4 in the new markets. Also the defense strategy is not used to secure the quality of the product but rather to compete in the segments both in the existing markets and new markets where other brands are more vulnerable. It is important to use this strategy since the Company at the moment has enough financial resources that can support more than one entry (Samsung Marketing Report, 2013). Samsung Electronics Company is currently enjoying economies of scale as well as experience in the market. At some point Samsung will define the rules of the game in most segments of the market. For instance, in United States, most of the segments have been championed by Galaxy S4 since it is the high-tech phone and serves the needs of the customers. Youthful population, working class people and companies use the services from Galaxy S4 to access their essentials wherever they are at any time. Strategic implications of Galaxy S4 life cycle in shake-out, mature and declining stages Shakeout Stage The very essential stage in product development is successful transitions that are exhibited from growth to maturity in the market (Fruin, 2013). These are the essential characteristics of shake-out stage that will be considered for the development of effective plan for Galaxy S4; Changes occur in the market as well as in the competitive environment, There is difficulty in maintaining product differentiation that leads to pressure on costs and profits, At this stage there are two strategies regarding the two characteristics mentioned to influence effective transition. They include; a) Share building Samsung Electronics Company is expected to survive shake-out stage since it has a relative strong share position in most of the markets (Samsung Marketing Strategy, 2013). The continuous use of fortress defense strategy definitely would continue to strengthen the position in the market. These are two marketing actions to be done at this stage; one is that the company needs to improve customer satisfaction and loyalty by continuous provision of quality high-tech phone (Galaxy S4) and choosing cost effective channels of distribution respectively. Two, the company (Samsung) should encourage simplified repeat purchasing both in the existing and new markets (Thorelli and Burnett, 1981). For example, if the company had established simple procedure of acquiring the product from the stores by customers then that procedure should be maintained at this stage. The following actions will enhance moderate returns (profits) from the investment as well as maintaining the development of the business. b) Competitive Advantage According to Lim, Acito and Rusetski (2006) both the defender and analyzer are concern in sustaining strong share positions in the new markets for the product. In this plan, analyzer will provide new applications from the research about how to become a champion in the new segments. On the other hand defenders will ensure that the existing markets of the product (Asia and Europe) are protected and strengthened and new line of extensions created. Mature stage Normally the maturity stage of a product life cycle is characterized by changes in market shares and steady price of leading competitors (Page, 1993). In regard to Galaxy S4, there is an anticipation of future greater growth therefore there is little need to further the investment but rather deal with the quality while the company enjoys high returns and positive cash. However, as the product (Galaxy S4) matures in the market, threat may disturb company’s profits. Product substitutes from Apple Company are an example. The success therefore in mature market will require two actions: 1) maintenance of competitive advantage through product differentiation. This allows more penetration into the segments. 2) Creation of flexible and innovative marketing programs. This will pursue expansion and profit avenues as the competitors increase in the specific segments (Sarya, 2006). Declining Stage Kikuchi (2010) stated that there is an eventual decline in demand of the product particularly when there is change in taste, lifestyle and substitutes in the market. In order for the profit to survive at this stage, the company will be expected to develop aggressive promotion policies that will drive out weaker competitors like Sony Company in the market segments in which Samsung Company is a champion. Harvesting strategy seems very important at this stage when it comes to Galaxy S4. Therefore, the company should need to have leading share position such that the profit will be considered still a return from the investment though low demand in the market. Galaxy S4 will not experience very many strong competitors thus adoption strategies perhaps will be quicker and the company will be back on truck. Strategies to put in place in order to serve new economies effectively According to Cherian et al (2010) companies face a substantial opportunities as well a material challenges especially in emerging economies. New economies come with new demands and therefore the market growth is affected in one way or another depending on the response of the consumers of the product. Emerging economies (for instance Australia) provide market growth rate of Galaxy S4 and it will exceed those of America, Europe and Asia. Samsung Marketing Report (2013) showed that the emerging economies include South American Countries, Africa and Australia. Availability of plentiful information on the product that is brought by new economies for example, female customers find the high Galaxy S4 to be large to carry. This needs an immediate response where a Galaxy S4 mini needs to be manufactured and supplied to them in order to maintain market share (Samsung Marketing Report, 2013). Secondly, social networking should be of high consideration as well since it enhances promotion as well easily gives a survey of how the product is perceived in the market (Høj and Wise, 2006). As far as this define digital economy, the technology within the phone perhaps make it easier to reach new markets since one product in the market can be used by more than one customers to check and may be order for one through online shopping. Organization Structure for Samsung Electronics Company Normally for a marketing plan to be successful it should be integrated to the overall plan of the company (Slater and Olson 2001). Certainly a new design of structure will be realized particularly on product management. Under product management, functional competencies and resource allocation are important strategies that will allow effective and efficient integration of the Galaxy S4 plan into the overall plan of the organization. The strategy plays a big role in assessing sales and product R&D which are critical to prospector success in shake-out stage. Secondly, the strategy enhances fixation of operating efficiency which harmonizes operating cost. This is very important to the defender stage since as the business continues to increase the market share on the other hand profits are not compromised in any case. Marketing plans (SWORT Analysis) The strengths of Galaxy S4 include there is a pricing power for galaxy S4 therefore it is hard to change the price, customer loyalty is high therefore the company needs to target new customers, strong brand name and it has a superior technology in the market. Weaknesses include lack of scale production means that cost per unit will be very high. Opportunities include new technology that serves current customer needs, new markets that will allow the product to flourish, emerging economies are growing fast therefore digital technology will grow fast with S4 and market fragmentation would provide many opportunities. Threats include competition from Apple Company and availability of substitute products in the market. From this analysis therefore, the product will be successful in the market (Fine, 2009). Marketing matrices and marketing audit The components of marketing matric are all relevant to the product. Setting performance standards is a roadway to successful strategy therefore it needs to e focused on. This component analyses profitability of the product, measures customer satisfaction, sets SMART objectives as well as analyzing the financial performance of the company in regards to sales of galaxy S4. A market capitalization of more than $ 51 billion is worth high returns in terms of profits that are expected particularly on the last quarter of the financial year 2013. Also due to new economies, the units of sales are expected to increase by 100% in the last quarter reflecting a shift from $ 10 million to $ 20 million per month. This is an outstanding avenue for profit increase (Samsung Marketing Report, 2013). It is therefore important to have performance standards since it helps in defining the strategic direction of the company especially when new product is brought to the market. Also, setting performance protects financial status of the company. Marketing Audit There will be two audits to be made as far as entry of galaxy S4 into the new markets. These include: a) Marketing environment audit In terms of technology, a statement regarding galaxy S4 from TCO on June 2013 states that Samsung Electronics Company has influence Information Communication Technology Industries to a more suitable direction. It has increased transparency and commitment particularly to socially responsible production practices (TCO Development Report, 2013). Innovations by Samsung are eco-friendly for instance one can reach any place in the world with high tech galaxy S4 without compromising any environmental aspect (Samsung Electronics Annual Report, 2012). Apparently, galaxy S4 is expected to address technical challenges in the environment. As market pioneer in technology, the phone is expected to provide users with continuous and smooth data communication without interruption which is very positive to the customers. In terms of economic environment, galaxy S4 will raise the living standards of people not only in South Korea but also around the globe through employment. A lot of franchises are expected to be developed and it will need sales people from around the globe (Samsung Financial Statements, 2013). New economies which need digital technology will be effectively served galaxy S4. Focusing on cultural environment, the product (galaxy S4) has and will still change customers’ lifestyle in various aspects. For example, accessing services like email messages directly from the phone. Apparently, as far as the product changes the values of a customer, at the end of the day the customer will demand more from the company in terms of applications and software for the phone. b) Marketing Productivity Audit The audit involves profit analysis and is guided by two aspects; I. Profitability analysis: Considering the emergence of new economies, galaxy S4 is expected to give double returns in terms of profits to the company. At the same time effective channel distribution on galaxy S4 would definitely maintain the cost of distribution thus increasing profits with respect to increased sales. The company also is expected to expand most of its segments in Asia and Japan while enter new markets in Australia and Africa. Perhaps this will raise the profit margin. II. Cost effective analysis Cost-reducing can be taken in the channel of distribution particularly on existing market. Also, the cost incurred in promotion in existing markets may be reduced thus raising the profits developed by galaxy S4 in these markets. Conclusion This marketing plan calls for emphasis on new economies and development of product in the existing markets. A lot of strategic roles have been discussed in the plan regarding product management at every stage of product life cycle. 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