Marketing Mix of Samsung Galaxy S4 Smartphone in Australia - Case Study Example

Student: Tutor: Course: Institutional affiliation: Semester: Date: Table of Contents Marketing mix of Samsung Galaxy S4 in Australia Market 1 Introduction The product I researched in the Australian market is Samsung Galaxy S4 Smartphone. I have researched about the performance of this product in the Australian market. Samsung is a leading brand name in the Australian market with phones and other consumer products like TVs and other home appliances. The Smartphone market in Australia is very competitive after the development and licensing of android operating system which Samsung and other manufacturers use as in their gadgets (Tech-Thoughts , 2013). Samsung Galaxy S4 Smartphone was officially launched in the Australian market in April 2013. It is a successor of the hugely successful Samsung Galaxy S3 Smartphone (Sadauskas, 2012). Samsung Galaxy S4 Smartphone was designed to be as close as possible to its users as it can be. Its features are meant to bring simplicity and fun in the user’s daily life, the manufacturer actually calls it a life companion (Samsung Electronics Australia, 2013). Samsung Galaxy S4 Smartphone is manufactured by Samsung electronics Co Ltd. It is a subsidiary of Samsung group. Samsung electronics is the world largest information technology company basing on revenues. Samsung is headquartered in Seoul South-Korea (Michell, 2011). 2 Target market Samsung Galaxy S4 Smartphone is the flagship android based Smartphone for Samsung in 2013. The android market recently acquired a 62% market share as compared to other Smartphone operating system such as Windows and Apple’s iOS (Sadauskas, 2012; Tech-Thoughts , 2013). The trend is still the same in the global level as well as apple and blackberry shed dominance in the Smartphone market to android gadgets controlling more than 80% of the market in the first quarter of 2013 (Tech-Thoughts , 2013). Samsung Galaxy S4 Smartphone is a high end market smart phone designed to give users an exceptional experience to match what is being offered by rivals such as Nokia’s Lumia and apple’s iPhone 5. Samsung Galaxy S4 Smartphone market could be divided into the following segments: Demographic characteristics: Gender: Samsung Galaxy S4 Smartphone can be used by both males and females in the Australian market. It does not have strikingly unique features that can be associated to members of a particular gender. However as it is the characteristic of many electronic gadgets, males are usually keener to try out new technology (Slater & Sengupta, 2009). Samsung Galaxy S4 Smartphone however suits both genders and as such expects to sell to both. Age: the expected target market which is the middle class and above in the Australian market is about the age of 25 and above. This market segment according to Slater & Sengupta (2009) is usually ready to adopt new technology and prefers revolutionary features offered by Samsung Galaxy S4 Smartphone. A large percentage of Australians beyond the age of 50 may however not be a key segment since according to May’s (2012) view, they take new technology and trends as “complicated”. Ethnicity: Samsung Galaxy S4 Smartphone is not associated with any ethnic group since it’s a consumer technology product which pleases everyone from any background. Knowledge of languages: the product instructions and navigation features can be set to any major language in the world (Samsung, 2013).Australia is predominantly an English speaking nation which is obviously available with Samsung Galaxy S4 Smartphone. Other users who don’t speak English can set it to their preferred language for example French, German, Japanese, Chinese and others. Behavioral characteristics: Benefits expectations: consumers buy a product with certain expectations as regards the needs fulfillment (Blackwell, 2003).Samsung Galaxy S4 Smartphone is a high end market Smartphone with new cutting edge technology and features. Users of such gadgets expect to benefit from high performance network abilities, operating speed, hardware stability (May, 2012). Users also expect special personalized features to make the experience of using the phone simpler, fun and full of options. The Smartphone market is full of competition with manufacturers adding just prestige features that users rarely need but are actually a competitive edge since buyers look for them even though they don’t fully utilize the phone’s features and capacity (May, 2012). Geographic characteristics: Samsung is a global brand. Its Samsung Galaxy S4 Smartphone is available in all the major global economies such as US, UAE, UK Australia and other global markets (Samsung Electronics Australia, 2013). Samsung Galaxy S4 Smartphone was launched in April 2013 to take advantage of the huge market for android based Smartphone in Australia (Samsung Electronics Australia, 2013). Psychographic characteristics: Lifestyle: Samsung Galaxy S4 Smartphone is not only a phone sought after due to its exceptionally advanced technological features, it is also a prestige commodity. Newly released and advanced technology in telecommunications gadgets give the impression of sophistication by the device user (Erasmus, 2002). It is the same with Samsung Galaxy S4 Smartphone which was introduced into the market to rival barands such apples iphone 5 and nokia’s Lumia smart phone brand. 3 Marketing mix 3.1 Product The product I chose is Samsung Galaxy Smartphone S4 Smartphone; the product is basically a mobile communication gadget operating on android 4.2.2 (Jelly Bean) system. The phone has enhanced features and functions such as Octa Core Processor, 1.6GHz Quad + 1.2GHz Quad CPU Speed, 5.0" Display Size display, and 13 megapixels dual camera. Wi-FI connectivity and many other high end features (Samsung, 2013).Samsung Galaxy Smartphone S4 Smartphone can be classified as a luxury shopping product. The reason for placing it under this category is its current price in stores and online shops; it is going for an average of $ 799 in Australia. JB HI-FI, an online shop is selling the phone at $798 (JB HI-FI, 2013). This is a considerably high price which will be costly to many middle class Australians. What consumers in the smart phone market are looking for is top performance, personalized features, fun, simplicity, convenience, beauty and prestige all rolled into a single product. The consumers are also looking for brands that have proved their technology prowess by producing high quality globally respected products (Himmelsbach, 2012). Samsung Galaxy S4 Smartphone has strived to meet these specific market needs with the Samsung Galaxy S4 Smartphone Smartphone. Samsung Galaxy Smartphone S4 Smartphone core product is a communication gadget that utilizes wireless technology to communicate with other mobile phones and devices. Samsung Galaxy S4 Smartphone is a strong brand building on the success of its predecessor Samsung Galaxy S3 Smartphone (Hamblen, 2013). Samsung has distinguished itself as a manufacturer of top quality goods and is actually challenging the Smartphone market which has been previously dominated by apple’s iPhone brand. Samsung is the largest electronics manufacturer in the world basing on revenues realized. It is also the second largest phone manufacturer in the world (Himmelsbach, 2012). Samsung Galaxy S4 Smartphone is packaged as a high performance product which is designed to make life easier, rich and fun for its users through its features such as enhanced photo taking capabilities with dual 13 megapixels camera. This positioning places Samsung Galaxy S4 Smartphone at the class of prestigious high performance Smartphone that are the choice for many middle class Australians. The special description and features of the phone differentiates it from the rest in the market by giving it a more “human” touch positioning it a gadget that is easy to use and “designed for humans” as its manufacturer states . Samsung Galaxy Smartphone S4 Smartphone is at the introductory stage of its life cycle having only been released in April 2013. However it can as well be argued the brand Galaxy is at the maturity stage and the manufacturer is simply repackaging and improving existing product to release a product with slightly enhanced features to make it remain relevant in the industry. Its predecessor was Samsung Galaxy S3 which is not so different from its successor. 3.2 Promotion Galaxy is an already established brand in the Australian market. However the new release Samsung Galaxy S4 Smartphone is quite new in the market and as such the company needs to put in a lot of effort to market it considering the extent of rivalry in the Smartphone market in Australia. Since the launch of Samsung Galaxy S4 Smartphone in the Australian market, sales have been increasing and in fact the global demand for the product meant shortage in some global markets including Australia (Hamblen, 2013,). This can attributed to the launching event in Australia in April which was highly hyped. Samsung has also run three visual advertisements online and in television programming in major Australian networks such as Austar and Tasmanian digital television during prime time at around 7 pm and 10 Pm when many people in the working class watch television programs. The three adverts are; “dinner party”, “boom” and “everyone changing”. They tell a funny story of Damian being amazed by everything changing around him associated with Samsung Galaxy S4 Smartphone. The theme of the advert is “it’s time to change” perhaps consumers to switch to the new Galax as it has amazing features. This choice of advertising is very effective since the combination of the audio and visual brings out the real benefits brought by Samsung Galaxy S4 Smartphone in users’ social lives (Applegoss, 2013). (Screen shot from “dinner party advert”. Source: applegoss.com) The fact that the videos are available online on YouTube and on the Samsung website means that they are readily available for people to enjoy and get influenced to switch to the brand. The online platform on Twitter (@GalaxyS4) helps the brand increase its visibility, run promotions such as #Yummyfoodspic, #causewearegirlspics where users retweet and share the said photos to win phones (Galaxy S4/Twitter, 2013). The platform is also used to gauge public response on Samsung Galaxy S4 Smartphone and respond to clients complaints. Currently Samsung is running the Samsung Strand and Seek promotion, where people attending the “evening with designers” event can take creative pictures of designers and using the hashtag #samsungstrandandseek, upload them to their Instagram and follow entry procedure after to win a VIP experience outing and a galaxy camera (SAMSUNG, 2013). These promotions increase the brand presence to fight off competition from other Smartphone manufacturers. The Samsung Galaxy S4 Smartphone is building on the sustained advertisement campaign of the galaxy brand by Samsung. This means the product does not have to engage in extensive product promotional activities but rather increase awareness of the new release of the product. Price sensitivity for such products is not much an issue on the advertising campaigns since the product is a high end market Smartphone where the target market is not very much sensitive when it comes to pricing (Munusamy, Lim, & r Chellia, 2010). 3.3 Place Samsung Galaxy S4 Smartphone is distributed through stockists and carriers in the Australian market (Samsung Electronics Australia, 2013). The stockists get their supply of the product from Samsung Australia. This means that consumers can buy the product directly from stockists and also from carriers at affordable prices. Other retailers can also buy their supply of the product from carriers and stockists at wholesale prices. The benefit of having such a distribution channel is that, Samsung does not have to incur high costs of building its own distribution infrastructure in Australia. It may also be limited in the sense that some stockists have occupied highly valued real estate spaces where they are at a better position to serve the target market and as such the company cannot easily penetrate without them. The stockists and carriers have over the years developed efficient distribution infrastructure which Samsung can rely on to distribute its products including Samsung Galaxy S4 Smartphone to save on costs and inefficiencies in the supply chain. In Australia, some of the carriers mandated to getting the product to consumers and other retailers are Virgin mobile Australia, Vodafone Australia, and Yes Optus. Stockists in the market include Dick Smith, JB HI-FI, Harvey Norman, Telechoice (Samsung Electronics Australia, 2013). Dick smith has stores in all major Australian cities and suburbs including Canberra where they have a store at a Canberra center and at Canberra airport (Dick Smith Electronics, 2013). All the other stores as well are conveniently placed all around Australia to reach a wider market as possible. The stores also sell Samsung Galaxy S4 Smartphone online though their online shopping websites. The online sales are an opportunity to reach markets in Australia without them having to physically accessing the stores. The carriers as well as the stockists run promotions to attract more customers and ensures that as many consumers as possible are reached by the product. Slater & Sengupta (2009) contend that this strategy is quite effective for the introductory stage of the product since the product is very new and exciting to consumers and what they need is a reliable distribution channel that is going to take advantage of the excitement and demand in the market to make as much sales as possible. If Samsung takes it upon itself to market, distribute and sell the product, it may result in inefficiencies in the distribution process. The result of this is that the product will not make as much sales as expected when the hype and excitement about the product falls as the product moves to the maturity stage. Firms should always ensure they take advantage of high demand to cater for the next stage of product development which is more demanding in a market that is already familiar with it (May, 2012). This distribution plan also is appropriate in dealing with competition from other players since the experienced distributors work had in hand with Samsung to channel consumer concerns and suggest measures to increase efficiencies. 3.4 Price From the research I conducted, Samsung Galaxy S4 Smartphone is priced at a relatively higher price than the average phone but this is understandable since the phone’s features give value for money to the target market consumers. It is also intended to be a luxury consumer electronic good and as such the pricing is reflective of the position. At the Harvey Norman Samsung Galaxy S4 Smartphone is going for $768 (Harvey Norman Australia, 2013), at JB HIFI it’s going for $798. At JB HIFI apple’s iPhone 5 is going for $788 while Nokia’s Lumia925 is going for $648 (JB HI-FI, 2013). Harvey Norman is selling HTC One 64Gb Smartphone at $786 (JB HI-FI, 2013). As it can be seen from the above prices, Samsung Galaxy S4 Smartphone is priced at a relatively competitive price considering the prices don’t have huge disparity apart from Nokia’s Lumia brand which runs on windows operating system which is not as popular as apple’s iOS and android used by iPhone 5 and Samsung Galaxy S4 Smartphone respectively. The pricing strategy being adopted by Samsung is a market based pricing judging from the prices of similar products in the market. This strategy is also advised by the strong brand salience of Samsung as a manufacturer of high quality and trendy consumer electronics. Samsung is also using skimming strategy since it has priced the gadget at a high price as compared to other new brands such as Lumia and HTC One. This strategy is very well placed with the product stage as Samsung has maintained a high price anticipating making profits in the short run before competition sets in. Going forward it is poised to fall by 25 percent as the company tries to adjust to reducing excitement about the product in the market (Hamblen, 2013). 4 Competitive advantage Samsung Galaxy S4 Smartphone has very interesting features such as 5” Full HD Super AMOLED screen, 13 Megapixel Camera with Dual Shot, S Translator to translate major world languages for users in text and speech, Air View and Air Gesture which allows control without touching. NAVIGON which is a voice guided navigation system preloaded with digital Australian map (Samsung, 2013). With these and many more features, Samsung Galaxy S4 Smartphone has been able to provide a high quality, trendy and fashionable gadget that is appealing to the target market. The pricing of the product is well within the range of similar products in the market. There is no large disparity between the prices of q and apple’s iPhone 5 and Nokia’s Lumia920. This means that consumers can enjoy the relatively moderate pricing model. The distribution strategy ensures the product reaches the target market well within time. The strategy also ensures that the stockists and carriers offer promotional products together with the product to boost sales. This is beneficial both to the consumers and the manufacturer as well since Samsung does not incur distribution sales and can transfer lower operating costs to the final price of the product. Consumers also get other benefits apart from just buying the phone such as convenient delivery process through online shopping and other benefits such as free talk time, data and SMSs plans. Promotional activities and advertising on the online platform and television ensures the brand visibility is enhanced. Samsung gives away Samsung Galaxy S4 Smartphone to users through social networking sites and promotional events it organizes and this goes a long way in encouraging brand loyalty amongst consumers. The fact that Samsung is strong global bean recognized for high quality electronic gadgets means that consumers view the galaxy as a product that will live up to their expectation of high quality and up to date with revolutionary technology just like Samsung cameras, TVs and computers. The previous releases under the Galaxy brand line have been successful and as such consumers expect same quality and exciting product when they buy the S4 giving it a competitive advantage over new comers such as Lumia from Nokia. 5 Success of the firm Samsung electronics has developed a product and created a marketing mix that is capable of meeting the needs of the target market as highlighted in the competitive advantage section. Samsung Galaxy S4 Smartphone target market is interested in prestigious cutting edge technology delivered in a smart, simple and fun way to add value to their social lives. Samsung galaxy S4 has been able to deliver these product features to the target market. The distribution strategy adopted is capable of ensuring the product reaches the client in time and also with other products and services emended on it to add value. Promotional methods also enhance the brand visibility of the product and position it as a high performance gadget which is what consumers in the target segment are looking for. The pricing too is not very exorbitant for such a high quality product it reflects the quality in the product. This mix has been well orchestrated by the marketing concern of the company in Australia to deliver value to the consumers. The market mix items complement each other to ensure high product sales and delivery of value to consumers. The brands success and in extension that of the company will therefore not be realized in satisfying consumer needs only but also in profitability of the business in the act of fulfilling the needs. Appendices A. Android growing market share in the world B. 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