Samsung Galaxy S4 Marketing Plan - Case Study Example

 Reflective Essay: Samsung Galaxy S4 Marketing Plan Table of Contents Introduction 2 Target Market and Positioning 4 Geographic segmentation 6 Behavioural segmentation 6 Demographic segmentation 6 Marketing mix 7 Promotional strategies 7 Product Differentiation 7 Pricing 8 Links in the Marketing Plan Elements 8 Conclusion 9 References 9 Introduction Review of the smartphone market shows Samsung as a market leader with its flagship product Samsung Galaxy S4. In my opinion, although the company’s sale of high-end smartphones such as Samsung Galaxy S4 seemed to be slowing, the company was not hindered from growing its marketshare. Current statistics for the second quarter of 2013 shows Samsung as having a global smartphone market share of 52.3 percent (Lee). The report showed that the company made a record $6.9 billion in profit, from $51 billion revenue, shipping 72.4 million smartphones globally. Despite the high figures, I believe that since the company’s market share reduced from the initial 32.2 percent, smaller phone makers such as HTC, Nokia and LG are fast gaining the market share. At present, Samsungs Galaxy S4 series is its only smartphone that is currently ruling the market. Although this is so, it is in my view a precarious position since Samsung faces stiff competition from rivals Apple (Epstein; Osawa). Indeed, the Apple’s iPhone 5 series and Samsung Galaxy S4 series are presently the market leaders. Analysis of the market shows that the consumers are becoming more demanding and sensitive to pricing. Based on the market trend and the company’s situation, Samsung should consider making its pricing competitive. Samsung should also focus on product differentiation. Marketing Objectives In regards to the increasing competition and Samsung’s loss of market share to small players in the market, Samsung should come up with strategies that will enable it to increase its competiveness and to consolidate its market share (Schnaars 129). Towards this end, the company will need to operate in an ethical and profitable manner, strengthen its relationship with its customers, suppliers in a bid to drive sales. I propose that Samsun needs to: Revenue objective The company should aim to generate more revenue through sales and advertising techniques. For instance, the company should generate 5 percent increase in sales in the next 12 months. Objective Costs The company needs to project costs for the Smartphone Galaxy S4. The projected cost included the shipping costs and the distribution costs. These costs should be tracked and lowered to reduce the price of the phone. Advertising objectives The advertising costs should also be tracked in the next 12 months to find the best possible value for the Samsung Galaxy S4’s future marketing campaign. Analysis of Samsung’s report shows that the company has been putting more than $5.3 billion in to sales promotion (Schnaars 129-139). For instance, the company needs to focus on online advertising. Other objectives include Increase market share at an annual rate of 5 percent; Achieve strategic alliances or acquisitions of small smartphone companies to gain global expansion; Become the global smartphone market leader. Target Market and Positioning In my understanding, segmentation refers to the division of a market into smaller groups of customers with distinct behaviours, characteristics and needs that need certain products of marketing mix. Therefore, in using the marketing segmentation, Samsung should split its heterogenous markets into smaller homogenous market segment that can be accessed more successfully (Bhatnagar and Ghose 760-863). I believe that since customer needs in the smartphone market continues to be complex, the necessity to understand the consumer and to form an effective segmentation is critical. From analysis of the market for Samsung Galaxy S4, the target market mainly includes the youth aged between 18 and 34 years old, who appreciate the complexity of the phone (Howell 22-23). This should be further configured to a segmentation dimensions, or a set of characteristics or dimensions to assign them a potential market. The target market dimensions include behavioural, psychographic, geographic and demographic (Hamka 17-19). Figure 1: Target market dimensions (Kotler 2003) During our group discussion, we had observed that the market segmentation that Samsung could use include; finding particular sets of markets that each of its consumers have homogenous preferences this include; common characteristics, needs and behaviour. With this regard, I set out four sections for segmenting Samsung Galaxy s4’s market (Hamka 19). Figure 2: Summary of market segmentation Geographic segmentation Geographic segmentation requires splitting the market into distinct geographic units such as regions, nations, cities or neighbourhoods (Howell 22-23). I suggest that Samsung should focus its smartphone product in geographic regions were internet penetration is high and in cities where high-tech businesses are prevalent (Hamka 30-33). This smartphone features mostly use the internet, and are therefore marketable in regions with high internet penetration (Fig 2). In this segment, Samsung should pursue aggressive marketing through the internet. Behavioural segmentation It is in my opinion that through this segment, Samsung can split the market based on the behaviours of its customers or the market, as well as their response to the product. Under this segmentation, mobile customers are divided into distinct groups based on their lifestyles, values and personalities (Hinesly 29-30). Typically, people differ in interests, activities and attitudes, which affect the products they use. I am of the view that Samsung should target users who love networking and interaction, such as college and university students who are used to chatting or using phone-based social networking sites (Hinesly 30). Demographic segmentation Under this segmentation, Samsung should be split into different groups based on variables such as age, education and income (Meredith and Schewe 17). I believe that since Samsung is a high-end phone, it should be targeted at consumers of high income levels given its price range. Given the complexity of its features and apps, it should be focused on the elite and IT savvy customers aged between 18 and 35 years old (Hamka 17-19).. Marketing mix Based on the results of the SWOT analysis that we arrived at during the group work, it is in my view that Samsung’s marketing mix should be focused on creating competitive pricing and product differentiation. Promotional strategies Samsung’s advertisement strategies should aim to promote Samsung Galaxy s4’s distinct features that separate it from major competitors such as iPhone 4 series. Possible tools could include the internet, billboards and TV advertisement. This should be targeted for the next 12 months. With regard to discussions during the group meeting, we reached a conclusion that Samsung could seek three varied types of promotion (Moahana 176-180). First is selective, where Samsung can provide distribution of its products using specific intermediaries. Second is intensive, where Samsung should concentrate on having the largest presence of its products in retail selling. It should also focus on accessing the largest number of outlets possible, allowing it to sell to the mass markets. The third is exclusive, whereby Samsung would sell its products using a small number of intermediaries who target the luxury segment. Product Differentiation In my view, Samsung should focus on making its Galaxy s4 more innovative by integrating more mobile apps. Making the product more innovative will differentiate it from competitor brands. On reflection, our group was of the view that packaging could help foster differentiation (Naik et al 25-26). The group had discussed that Samsung could use a box that looks wooden to make the product more appealing to high-end consumers or the elite group. Further, such a package is recyclable and can be reused as a pencil holder or as container. Reducing its weight and thickness will also make Galaxy s4 to feel thinner for the pockets and is more practical to carry and use (Grankvist et al 6). Pricing Samsung should make the price for Galaxy s4 more competitive by making it comparatively cheaper. The cost of supply and distribution of the product can be checked to be reduced. This could later be applied to reduce the price of the phone. Currently, Samsung uses the market-based method, the result of considering the fact of being the leader and adding to that the psychological pricing to set up its prices. Links in the Marketing Plan Elements All the elements of the marketing mix share a common objective of ensuring that Samsung Galaxy s4 is strategically positioned in the market, by ensuring that Samsung employs competitive pricing and that the product is differentiated from that of the competitor. Simply explained, promotional strategies will ensure that the unique features of the product are publicized (Naik et al 26-27). This shows a link to the product differentiation. It will also publicize the price reduction of the product to the selected dimensions of the market segment (geographic, demographic and psychographic). This demonstrates a link with pricing. The elements of the marketing link (pricing, promotion and product differentiation) are also linked to the target market and position. This is since all the elements are aimed at the target segments. Conclusion In the smartphone market, Samsung’s flagship product Samsung Galaxy S4 is gradually losing its market share to almost similar products manufactured by Apple, HTC and Nokia. This means that the company should engage in product differentiation and competitive pricing to reposition the product as a market leader by regaining the market share. This marketing plan is targeted at these two key objectives. I expect that through an effective marketing mix and target marketing, Samsung will be able to increase its market share by 5 percent in the next 12 months. References Bhatnagar, A, and S. Ghose. "A latent class segmentation analysis of e-shoppers." Journal of Business Research 57 (2004): 758-767. Epstein, Zach. "Samsung smashes Apple as smartphone explosion continues in Q2." BGR, 2013. 12 Niv 2013, Grankvist, Anna, Carolina Kollberg & Anna Persson. Promotional Strategies for Banking Services. Lulea University of Technology, 2004. Hamka, Fadly. Smartphone’s Customer Segmentation and Targeting: Defining market segment for different type of mobile service providers. Delft University of Technology, 2012. 17 Hinesly, Mary. An Alternative Segmentation Approach: Anticipating Consumer Preferences Based On Early Cultural Experiences, 2012. 12 Nov 2013, Howell, Rebecca. Market Segmentation: the Importance of Age Cohorts." Business Journal Review, 2012. 12 Nov 2013, Lee, Liz. "Smartphone HTC to target 18-34 age." Asia News, 2013. 12 Nov 2013, Meredith, Geoffrey & Schewe Charles. Defining Markets, Defining Moments, 2007. 12 Nov 2013, Moahana, Rama. Services Marketing. Pearson Education India, 2011. Naik, Prasak, Kalyan Raman & Russel Winer. Planning Marketing-Mix Strategies in the Presence of Interaction Effects." Marketing Science 24.1 (2005): 25-34 Osawa, Juro. "Samsung Overpowers Smartphone Rivals in China." The Wall Street Journal, 2013. 12 Nov 2013, Schnaars, Steven. Marketing Strategy. The Free Press, Toronto, nd. 12 Nov 2013, Read More