Global Marketing Plan for Samsung Mobile Phones - Case Study Example

Global Marketing Plan: Samsung Mobile Phones Table of Content Executive Summary 1 Introduction 2 Marketing Objectives 4 Target Markets 5 Middle and upper income consumers 6 Youth (18- 34 years) 7 Business proffessionals 8 Brand enthusiasts 10 Marketing Strategy 10 Product 11 Pricing 12 Placing 12 Promotion 13 Market Positioning 14 Implementation and Action Plan & Measurement and Controls 16 18 Conclusion 18 References 19 Executive Summary This report presents a marketing plan for Samsung mobile phone with reference to the findings of a previously conducted situation analysis. From the situation analysis it was established that, the European and United States markets present significant opportunities that Samsung mobile can capitalise on to develop its brand equity, increase its sales and overall profitability. This report begins by highlighting the key objectives of the marketing plan. The key objectives identified include; effectively targeting and positioning different Samsung mobile phone models based on the needs and demands of the targets market in both the European and United States markets, increasing distribution channels to facilitate easy and efficient access of Samsung mobile phone products, developing brand equity and increasing the sales of Samsung mobile phones. Secondly, this report identifies the key target markets for Samsung mobile phone in the European and United States markets as middle and high income consumers, young people between the ages of 18 to 34 years, business professionals and brand enthusiasts. Moreover, this report recommends that, in order for Samsung to realise positive outcomes in these target markets, the company should; effectively target its mobile phone products based on the needs and preferences of consumers in the market, employ a premium pricing strategy, broaden its distribution channels and use promotion strategies such as public relations, direct selling, advertising, sales promotion and celebrity endorsements to propel the company’s mobile phone brand in the European and United States markets. Introduction Currently, Samsung Electronics is among the world’s leading mobile phone manufacturers. For instance in 2012, Samsung realised a sale of 45million Smart phones in its first quarter, making it the world’s most successful mobile phone brand(Livbit 2010; India Times, 2012b; Samsung 2012). One of the key factors that has propelled Samsung to become a global leader is its design driven strategy. The company is continuously improving, reinventing and launching new brands in the market in order to meet the continuously changing needs and wants of consumers in the market (Mitchell 2011). However, in as much as Samsung mobile has witnessed significant success over the years, the mobile phone industry is increasingly becoming competitive. The existing competition in this market, poses a threat to Samsung competitive edge in the market. Competition in the mobile industry is in most cases marked by price wars and upgrade of new features and applications. Apple, Sony Erickson and Nokia are some of the key mobile phone brands that pose as great competition to Samsung (IDG 2009). These mobile phone companies have from time to time, tried to outdo each other by upgrading the designs, applications and features and using pricing strategies that entice more buyers. In addition to this, there is a strong saturation of mobile phone brands in the market that further threaten Samsung’s position in the market (Quinn, 2008). It is thus evident that, in order for Samsung mobile to enhance and maintain its competitive edge in the industry, the company should employ a highly effective marketing strategy that will enable it to gain a competitive advantage over rival companies. According to the previously conducted situation and opportunity analysis of Samsung mobile phone in the European and United States market, it became apparent that these markets presents significant opportunities that the company can capitalise on. The consumer purchasing power in these markets presents an opportunity that Samsung can capitalise on to optimize its brand equity and overall sales (Viardot, 2004). The key aim of this report is to present an effective marketing plan that Samsung can use to effectively market its brand in the European and United States market. Firstly, this report will outline the marketing objectives of Samsung in these markets. Secondly, it will examine the target market for Samsung in these markets particularly in relation to demographic, behavioural and psychographic factors. Thirdly, this report will highlight marketing strategies that the company can use to market its mobile brand with regards to different elements of the marketing mix. Furthermore, it will outline and discuss the marketing positioning that Samsung can use it the different target markets. Moreover, this report will evaluate Samsung’s strategic fit and business portfolio so as to establish whether the company can effectively cater to the identified target market in the United States and Europe. Lastly, this report will discuss how the presented marketing plan will be implemented, controlled and evaluated. Marketing Objectives In reference to the opportunities established through the situation analysis, the following will be some of the key marketing objectives of Samsung in the European and United States market; 1. Effectively target and position different Smartphone models based on the needs and demands of the targets market in both the European and United States markets. 2. Increase distribution channels in both the European and United States market so as to facilitate easy and efficient access of Samsung mobile phone products. 3. Increase the sales of Smartphones in both the European and United States market through the use of various promotion strategies that effectively communicate and appeal to consumers in the target markets. 4. Develop a strong brand equity through the use of marketing strategies that effectively communicate Samsung’s core brand message. Target Markets Establishing a target market is one of the initial steps that a company must take in order to realise success in its overall marketing strategy. A target market comprises of a group of consumers that a company has decided to focus its marketing efforts or strategies on in order to optimise the sale of its products or services. In most cases, a target market incorporates consumers with distinguishable characteristics that are likely to influence or promote a company’s success in the sale of its products or services. Some of the distinguishable characteristics of a target market may be based on geographical factors, behavioural factors, demographic factors or psychographic factors (Kurtz, 2010). Based on the opportunities identified from the previously conducted situation analysis, the key target markets for Samsung in the United States and the European markets will be based on demographic factors such as age income and occupation and behavioural factors such as degree of loyalty to the brand .Therefore, some of the key target markets for Samsung will include; middle and upper income consumers, Youth between the age of 18 to 34 years, business professionals and brand enthusiasts. Middle and upper income consumers The opportunities identified from the previously conducted situation analysis, point out to the middle and high income market segments as the most suitable market for Samsung mobile phones. The consumer purchasing power in these markets presents an opportunity that Samsung can capitalise on to optimize its brand equity and overall sales (Viardot, 2004). According to Viardot (2004), Samsung has over the years maintained its competitive edge in the market by focusing on the mid and upper market segments instead of focusing on low-end consumer market segments. Generally, Samsung utilises a premium pricing strategy since the average price of Samsung mobile phones is usually higher than that of similar mobile phone models. Gittings (2002) observes that, a premium pricing strategy is a practice that involves keeping the prices of a products and services higher than other similar products in order to gain favourable perceptions of the product or service from consumers. As a result, the company has been able to maintain high profit margin than other mobile phone manufactures (Mitchell, 2011). Due to the pricing strategy that the company uses, this marketing plan report suggests that Samsung should target middle and upper income consumers in both the European and United States market since they have a high purchasing power. Moreover, targeting this market segment will enable the company to optimise its sales and overall profitability in the industry. Some of the mobile phone models that Samsung can market in this target markets include; Samsung Galaxy SIII S3 i900 ($379-$840), Samsung Galaxy SII S2 i9100 ($ 339-$ 899), Samsung Galaxy Note II N7100 ($544-$899) and Samsung Galaxy Nexus I9250 ($304-$899) among many other models (myshopping.com, 2012). Youth (18- 34 years) In a recent news paper article authored by Weismann (2012) it was estabalished that, young people are increasingly ditching cars for smartphones. Weismann observes that, in the past years, youth culture was a car culture. Most young people fantasised about owning their own cars however, with time this has changed. Today, a significant number of young peope mainly fantasize and desire to own the lastest smartphone models. The love of technology among young people has grown significantly especially in the United States and European markets. In fact, studies shows that young people today are buying less cars than in the past years. Based on a CNW market research, it was established that, in 2010 young people in the United States between the ages of 21 to 34 years only bought 27% of new cars. When compared to sales in 1985, this is a 13 % decline. Furthermore, Weismann (2012) notes that , industry analysts have reported a 11% decline in the the rate of auto sales to young people between the ages of 18-34 years. This decline can be attributed to two factors. Firstly, the recession and slow recovery of the economy which has resulted to high gas prices and high rates of unemployment in both the States and European markets may have contributed to this decline. Secondly, the increasing love and preoccupation of young people with smartphones and technology in general may have caused young people to shift their attenntention for owning cars to owning latest smartphone models (Weismann , 2012). Based on these reasearch findings, it is evident that a target market comprising of young people between the ages of 18-34 years presents a viable option that Samsung can capitalise on in order to realise better sales outcomes. This is mainly because young people especially in the United States market are increasingly becoming preoccupied with smartphones. Business proffessionals A considerable number of consumers especially in mature markets buy mobile phones due to their functionality. The utility theory of consumer behaviour considers consumers as ‘rational economic beings” who prior to purchasing products or subscribing to services, engage in activities such as need recognition, information search and assessment of alternatives (Zinkhan 1992). Similarly, the Generic theory of buying behaviour asserts that, prior to most purchases, consumers often follow a generic model of decision-making which involves undergoing a decision making process. In most cases, a consumer will identify a need to make a purchase, subsequently; the consumer will initiate research a process to establish the quality, features, benefits or pricing of the purported product or service (Penn, 2012). According to these theories, it is evident that, the functionality features and benefits embedded in a product play a key role in influencing consumer buying behaviours. Business professionals are a good example of consumers who purchase mobile phones due to their functionality. For business professionals, mobile phones can act as versatile and valuable tools that can help individuals to increase their efficiency and productivity at work. Virtually, most business professionals use their mobile phones to communicate with their, offices, employers, partners, customers, suppliers or staff. Nevertheless, the use of mobile phones extends beyond making and receiving calls. With time, highly sophisticated hardware and software technologies have emerged, turning mobile phones into highly advanced communications devices with numerous functions that can aid in different business functions. For instance, basic mobile phones can be used as personal organisers, diaries, cameras, and address books, internet access devices, e-mailing devices and video conferencing or group call devices. Depending on how these platforms are used, they can offer business professionals benefits such as increased productivity, improved customer service, reduced downtime and improved communication with clients, staff, suppliers and employers (Curwen & Whalley, 2010; Is4profit.com, 2012). The European and United States markets have a wide base of business professionals who would significantly embrace the various applications and features offered by Samsung mobile phones since it would help to enhance efficiency and productivity in their various professional fields (Curwen & Whalley, 2010). For example, Samsung SGH-i780, Samsung Galaxy Note, Samsung Galaxy S2, Galaxy Ace Plus and Samsung Galaxy Tab among many other models incorporate a wide range of features and applications such as full touch screen, GPS, Gmail software, WIFI connectivity, mega-pixel camera, optical joystick and a Windows Mobile 6.0 packet PC device that can assist business professionals to communicate effectively and enhance their productivity (Esato 2012). As a result of these features, there is likely to be a high and sustainable demand of Smartphones among business professionals. Hence, it is crucial for Samsung to effectively target a market segment of business professionals in order to increase its sales. Brand enthusiasts Brand enthusiasts are a group of consumers who are ardent or devoted to a particular brand due to their relationship to the brand or the status attached to the brand. Just like other major mobile brands, Samsung has a strong following of brands devotees (See Appendix 1, 2, and 3 on Samsungs market share globally and in European and US markets). According to a study conducted by Business Insider, Samsung was ranked 4th out of 20 brands with the most loyal customers (Bhasin, 2011). Dick & Basu (1994) note that, consumer brand loyalty entails a strong commitment by consumers to repeatedly buy a particular brand or subscribe to a particular service. It also entails positive word of mouth advocacy. Boora & Singh (2011) note that, developing consumer brand loyalty is critical to the success of a business especially in a competitive market. Boora & Singh further observe that, it costs more to attract new customers than to retain the existing ones. Therefore, in order for Samsung to develop strong brand equity, it is crucial for the company to effectively target its brand enthusiasts in the United States and Europe. This will enable the company to enhance consumer brand loyalty thus leading to sustainable sales and profitability. Marketing Strategy This section of the report will focus on how Samsung mobile can utilize the 4p’s marketing mix to effectively market its mobile phones to the identified target markets in the European and United States markets. The 4p’s that will be discussed in this section include; product, price, placing and promotion. Product A product is one of the most important elements of a marketing mix that Samsung mobile can capitalise on in order to increase its sales and develop strong brand equity in both the European and United States markets. One of the key factors that differentiate Samsung from other major mobile phone manufacturers in the industry are its distinctive mobile phone designs. Samsung is well known for its design driven strategy which involves reinventing and upgrading its mobile brands in the market in order to meet the demands of its customers (Mitchell 2011). The company creates each of its mobile models with features and applications that meet the specific needs of its consumers. For instance, the company has mobile phone models that focus on consumers needs for entertainment, communication, internet browsing and photography. Some of the company’s well known mobile phone models include; Galaxy Ace Plus, Star 3 Duos, Galaxy Y Pro Duos, Omnia W , Samsung Galaxy Note, Samsung Galaxy Tab, Samsung Galaxy S and Samsung Galaxy S2 among many others (Esato 2012). These models are specifically designed to meet the specific needs of consumers especially when it comes to entertainment, communication, internet browsing and photography. The models incorporate features like full touch screen, GPS, Gmail software, WIFI connectivity, mega-pixel camera, optical joystick and a Windows Mobile 6.0 packet PC device that enable users to meet their leisure or business related needs(Esato 2012; Mitchell 2011). In order for Samsung to realise success in the European and United States markets, the company should effectively target its mobile products based on the needs of consumers in various target markets. For instance, in target markets comprising of business professionals, the company should saturate mobile phone models such as Galaxy Y Pro Duos, Omnia W, Samsung Galaxy Note, Samsung Galaxy Tab, Samsung Galaxy S and Samsung Galaxy S2 among many others that can enable this target market to use different applications and features for business related purposes. In target market comprising of young people between the ages of 18-34 years, the company can saturate mobile phone models such as Galaxy Ace Plus, Star 3 Duos, Galaxy Y Pro Duos, Omnia W and Samsung Galaxy S among many others (Esato 2012). These models incorporate applications and features that will enable this target market to entertain themselves, share videos, carryout internet browsing and take high definition picture and videos (Esato 2012; Mitchell 2011). Pricing Samsung will mainly target consumers in middle and upper income markets in both the European and United States markets since they have a high purchasing power. Thus the company should use a premium pricing strategy. A premium pricing strategy is a practice that involves keeping the prices of a products and services higher than other similar products in order to gain favourable perceptions of the product or service from consumers (Gittings, 2002). The use of a premium pricing strategy will enable the company to optimise its sales and overall profitability in the industry. Some of the mobile phone models that Samsung can market in this target market include; Samsung Galaxy SIII S3 i900 ($379-$840), Samsung Galaxy SII S2 i9100 ($ 339-$ 899), Samsung Galaxy Note II N7100 ($544-$899) and Samsung Galaxy Nexus I9250 ($304-$899) among many other models (myshopping.com, 2012). Placing The strategies and channels that Samsung will use in distributing and supplying its mobile phones will significantly determine the success of the company in both the European and United States markets. In order to realise success in these markets, the company should increase distribution channels so as to facilitate easy and efficient access of Samsung mobile phone products. In addition to this, it is crucial for the company to develop effective relationship with retail stores, supermarkets, general electronic stores so as to facilitate easy and efficient access of its products (Mitchell 2011). Promotion Promotion can be considered as a process that involves informing, persuading and reminding potential customers about the qualities, price, benefits or location of a particular product (Botten 2009). For any business to realise success, the use of effective promotion is crucial. Some of the promotional strategies that Samsung can employ so as to enhance its profitability and competitive edge in the market include; public relations, direct selling, advertising and sales promotion. These strategies can be tactfully directed to target the identified target market. For instance, when it comes to promoting Samsung mobile products in target markets comprising of young people, the company can use animated and lively advertisements to capture this audience. When promoting Samsung mobile products in target markets comprising of Samsung brand enthusiasts the company can use promotional strategies such as celebrity endorsements. Celebrity endorsements can be described as a marketing strategy that involves using a popular celebrity to promote or advocate for a product so as to obtain the attention and trust of consumers. A research study conducted by Taleja (2010) showed that eight out of ten television commercials with celebrity appearances have high viewing and responses from consumers (Taleja, 2010). This shows that celebrities have a strong influence on the perceptions of consumers. The use of such strategies by Samsung will enable the company to build a strong customer loyalty and brand equity in both the European and United States markets. Market Positioning According to Lamb, Fair & McDaniel (2011), positioning is a process that marketers use to create an image or an impression in the minds of consumers regarding a particular brand or product. In order for Samsung to be effective in the identified target markets, the company’s mobile products will be positioned in a way that consumers in these target markets can easily identify themselves with the Samsung brand and relate with the products. For instance, in target markets comprising of middle and upper income consumers, Samsung mobile phones will be positioned as a top-class and high quality product that incorporates high-tech features and applications for entertainment and communication. It is crucial to use this positioning in target markets comprising of middle and upper income consumers mainly because most consumers in these markets easily identify themselves and respond well to top-class products of high quality and reliable functionality (Chen & Green, 2011). In target markets comprising of business professionals, Samsung will be positioned as a high-tech brand with application and features that support business functionality. This is mainly because consumers in this market are mainly looking for mobile phone products that will aid in their day to day business operations. Most consumers in this market make their consumption decisions using a utility approach of decision making. Thus their purchase decisions are based on the functionality of a product to their needs (Zinkhan 1992). Young people between the ages of 18 to 34 years purchase mobile phones for varied reasons. A considerable number of young people base their decisions to purchase a particular mobile phone model due to the entertainment functionality and features that a model offers. Others base, their purchasing decisions on the currently trending models in the market. Therefore, in order for Samsung to effectively appeal to consumers in this target market, the company should position its mobile phones models as stylish and trendy products with high-tech entertainment features and applications. Moreover, in order to effectively appeal to target markets comprising of consumers who are brand enthusiasts, Samsung should position itself as a superior quality brand. Brand enthusiast tends to align or identify themselves with brands that stand out. Therefore, in this target market, the company should focus on positioning itself as a superior quality brand (Mitchell, 2011; Boora & Singh, 2011). Strategic Fit Evaluation and Business Portfolio Evaluation The European and United States markets present significant opportunities that Samsung mobile can capitalise on to develop its brand equity, increase its sales and overall profitability. Foremost, the middle and upper income target markets have a high purchasing power hence there is a high likelihood that if this market is effectively targeted, it could help increase the company’s sales. Secondly, the target market comprising of young people between the ages of 18-34 years presents a very viable market for Samsung mobile phones (Viardot, 2004; Mitchell, 2011). Young people in these markets are increasingly shifting from a preoccupation with cars to a preoccupation of Smartphone. Moreover, the European and United States markets have a wide market base of business professionals who are increasingly embracing the use of mobile phone technologies in their day to day business operations. It thus evident that the European and United States markets present significant opportunities that Samsung mobile can capitalise on to develop its brand equity, increase its sales and overall profitability(Mitchell, 2011). Nevertheless, in order for Samsung to effectively target these market segments, the company requires a significant amount resources and capabilities. Firstly, the company requires mobile phone models and designs that meet the needs of consumers in its target markets. Samsung has a wide and diverse product portfolio comprising of different mobile phone models specifically designed to meet the specific needs of consumers especially in relation to communication, entertainment, internet access and business related function. Secondly, in order for Samsung to realise success in the European and United States markets, the company requires a well spread and wide distribution channel that will facilitate easy and efficient access of Samsung mobile phone products. Over the years, Samsung has developed a wide distribution channels in the United States and European markets. As a result, Samsung mobile phones can be easily accessed in retail stores, mobile phone shops, supermarkets and general electronic stores among many other distribution channels (Mitchell, 2011). Implementation and Action Plan & Measurement and Controls Action Plan Title: Samsung Marketing Plan Marketing Goals: 1. Effectively target and position different Smartphone models based on the needs and demands of the targets market in both the European and United States market. 2. Increase distribution channels in both the European and United States market so as to facilitate easy and efficient access of Samsung mobile phone products. 3. Increase the sales of Smartphones in both the European and United States market through the use of various promotion strategies that effectively communicate and appeal to consumers in the target markets. 4. Develop strong brand equity through the use of marketing strategies that effectively communicate Samsung’s core brand message. Key performance indicators; 1. Increased sales 2. Increased distribution channels 3. Wide spread brand awareness 4. Market share index 5. Market demand Annual Objective Measure(s) of Success Activities Q1 Q2 Q3 Q4 Team Member Responsible Completion Date Wide spread brand awareness Increase in distribution channels Increase Market demand and sales Increased sales Increased market demand Market share index Regular quarterly audits P X C Conclusion This report has presented a marketing plan that Samsung can use to effectively market its brand in the European and United States market. The key objectives of this marketing plan established in this report include; effectively targeting and positioning different Smartphone models based on the needs and demands of the targets market in both the European and United States market, increasing distribution channels to facilitate easy and efficient access of Samsung mobile phone products, developing brand equity and increasing the sales of Smartphones. Moreover, the based on the findings of this report, the key target market for Samsung will include; middle and high income consumers, young people between the ages of 18 to 34 years, business professionals and brand enthusiasts. With regards to the opportunities identified in the various target markets, this report recommends that in order for Samsung to realise success in the European and United States mobile industry, the company should use a design driven strategy, employ a premium pricing strategy and use promotion strategies such as public relations, direct selling, advertising, sales promotion and celebrity endorsements. References Bhasin, K. (2011). “The 20 Brands with the Most Loyal Customers”. Business Insider, September 19, 2011. Boora, K. & Singh, H. (2011). “Customer Loyalty and its Antecedents: A Conceptual Framework”. Asia Pacific Journal of Research in Business Management 2(1): 151-164. Botten, N. (2009). CIMA Official Learning System Enterprise Strategy. Amsterdam: Elsevier, Chen, H. & Green, R. (2011). “Brand equity, marketing strategy, and consumer income: A hypermarket study”. Journal of Management and Marketing Research 8: 1-18 Curwen, P. & Whalley, J. (2010). 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Retrieved on November 14 2012 from Kurtz, D. (2010). Contemporary Marketing. Mason, OH: South-Western Cengage Learning Mitchell, A. (2011). Samsung Electronics and the struggle for leadership of the Electronic Industry. New York: John Wiley & Sons. Myshopping.com (2012). Samsung Mobile Phones. Retrieved on November 14 2012 from Penn, S. (2012). Business Theories of Buying Behaviour. Retrieved on November 14 2012 from Quinn, R. (2008). Cell Phone Market Nears Saturation. Retrieved on November 14 2012 from Samsung (2012). Samsung Electronics Sustainability Report 2012. Viewed on October 6, 2012 from Silicon Semiconductor (2012). Global sales of mobile phones slide 2 percent in Q1. Retrieved on November 14 2012 from The Guardian UK (2012). How Samsung is eating Western Europe's mobile phone market. Retrieved on November 14 2012 from Taleja, N. (2010).Impact of Celebrity Endorsements on Overall Brand. Retrieved on November 15, from 2012 from< http://www.coolavenues.com/mba-journal/marketing/impact- celebrity-endorsements-overall-brand-0?page=0,1> Viardot, E. (2004). Successful marketing strategy for High-Tech Firms. Norwood, MA: Artech House. Weismann, J. (2012). Why Are Young People Ditching Cars for Smartphones? The Atlantic August 7 2012 Zinkhan, G. M. (1992). “Human Nature and Models of Consumer Decision Making”. Journal of Advertising, 21, (4) :II-III. Appendix1: Samsung’s global market share 1st quarter of 2012 Silicon Semiconductor (2012). Global sales of mobile phones slide 2 percent in Q1. Retrieved on November 14 2012 from Appendix 2 : Samsung’s market share in Europe The Guardian UK (2012). How Samsung is eating Western Europe's mobile phone market. Retrieved on November 14 2012 from Appendix 3: Samsung’s Market Share in the United States Graziano, D. (2012). Apple Remains Top U.S Smartphone Vendor. Retrieved on November 14 2012 from Read More