Samsung Case Study

1. Introduction: Samsung Group is a South Korean multinational conglomerate headquartered in Samsung Town, Seoul. It comprises numerous subsidiaries and affiliatedbusinesses, most of them united under the Samsung brand, and is the largest South Korean company. Samsung Group formed several electronics-related divisions, such as Samsung Electronics Devices Co., Samsung Electro-Mechanics Co., Samsung Corning Co., and Samsung Semiconductor & Telecommunications Co., and grouped them together under Samsung Electronics Co., Ltd. and many more.

The group based on similar interest chose Samsung Electronics to analyze as brand of choice. Samsung Electronics was founded in 1969 in Suwon, South Korea as Samsung Electric Industries, originally manufacturing electronic appliances such as TVs, calculators, refrigerators, air conditioners and washers. Nowadays, Samsung products can also be found in Mobile phones, computer devices, cameras/camcorders and other home appliances. 3.1 Competition

As Samsung manufactures nearly every electrical device available in the market, it faces stiff competition from many other electrical manufacturers such as Panasonic, Toshiba, LG Electronics, Hitachi etc., for home appliances and Apple, Nokia, Sony Ericsson etc., for personal devices. However, in the Asia region, Samsung has a distinctive brand value which consumers and retailers recognize, keeping the company amongst the top electronic companies around the world. 3.1.1 Major competitor

Samsung’s biggest current competition in hand phone department is Apple. The two giants has been involved in many lawsuits since Samsung launched its’ Galaxy series. It has an identical user-interface to the Apple Iphone as well as similar functions, such as a fully functional touch screen and many programs or “Apps”. While Apple users can download from iTunes, Samsung users download from Google-Play, right on their mobile phones. Apple has also sued Samsung over Galaxy Tab, which is similar to the iPad, both being larger touch screens without the phone functionality where consumers can enjoy a larger screen for work or play purposes.

This lawsuit has caused Samsung to lose distributorship of the tab in several countries. Samsung’s biggest competitor for home appliances has been Panasonic for a long time, however in this tech savvy world, everybody has been turning to smart-phones for all their electronic needs and Samsung is no less.

They have been focusing on their mobile line. What Samsung smart-phones offer, is a handset with all the functionalities of an Apple iPhone, if not better, at an more affordable price, which is why it is no surprise that consumers have picked up the Galaxy series easily, over-riding Apple’s shipments of smart-phones and taking over the largest market share of smart-phones from Apple since the first quarter of 2012 source: http://www.pcworld.com/article/254766/idc_also_says_samsung_grabbed_the_biggest_smartphone_share_in_q1.html.

Samsung is an supplier as well as manufacturer, it is one of the biggest suppliers of Apple’s products strangely. According to this site, http://www.economist.com/blogs/dailychart/2011/08/apple-and-samsungs-symbiotic-relationship, 26% of an iPhone’s components come from Samsung.

And as the oligopolistic competition continues, Apple has been known to be dropping orders from Samsung and turning to other suppliers instead, and Samsung has chosen to stop supplying batteries to Apple for the iPad and Macbooks. Although Apple has won its lawsuit against Samsung for infringing its’ patents, Samsung remains the largest market share as well as number one for the most sold smart-phones across the world. 3.1.2 Product substitutes

There are many product substitutes for Samsung products as the electrical market is huge, with endless innovations or established brands. Here are a few top choices for substitutes of a Samsung product- 1. LG is one of the leading competitors for Samsung on HDTVs( high definition television) as well as smart-phones. Both companies boasts of large and slim liquid-crystal display(LCD) screens, first class technology 3D, internet on the television etc and similar pricings. LG smart-phones also uses Android operating system, which the consumers find, a convenient substitute for the Samsung Galaxy, as it too is equipped with a fully touch screen with impressive camera functions. 2. HTC is one of the pioneers for smart-phones.

Even though it never made it to the top, it makes a fine substitute with its range of smart-phones. It uses both Android and Windows OS, and it’s up to the consumer’s choice. The outlook is extremely similar to the Samsung Galaxy series; huge display screens along with impressive camera functions. HTC designs are however, thicker and heavier in build; a good substitute if the consumer dislikes the thin and plastic covers of Samsung’s Galaxy. 3. Sony has been a friendly competitor with Samsung for many years, from televisions to cameras to smart-phones.

Although with the rise of Samsung in the recent years, Sony seems to have fallen completely off the radar. Still, Sony has launched a new line of smart-phone from its Xperia series that could give the Samsung Galaxy a run for it’s money. The latest Xperia, like all the Android phone producers, boasts a huge screen with fantastic display as well as a camera which is better than the latest Galaxy, with 13MP and this smart-phone is also dust and water resistance. This Xperia is meant to rival the Samsung Galaxy 4, which is yet to be revealed.

3.2 Segmentation: 3.2.1 Segmentation variables: Segmentation variables may be used to divide the product-market into different groups with the same interest. Demographic and psychographic (lifestyle and personality) characteristics of buyers are of interest. The use situation variables consider how the buyer uses their product. Variables measuring buyer needs and preferences includes brand awareness, and brand preferences. The purpose of the segmentation is to ensure the elements of marketing mix (price, place, products and promotion) are designed to meet specific needs of different customer groups.

This allows the company to focus on particular customers’ needs in the most efficient way. 3.2.2 Demographic segmentation:

Demographic information helps to describe groups of buyers such as heavy users of a product or brand. Life style variables indicate what people do, their interests, their opinions and their buying behavior. Lifestyles characteristics extend beyond demographics and offer a more penetrating description of the consumer. Samsung has released many lines of mobile phones: for young age/ teenagers, young adults (30 years old and under), smart phone (for office workers), entertainment (music, video, internet).

Samsung did this to make sure every customer can find the right phone for them. This shows us that each Samsung’s phone is made for different kind of person this is also known as customization. Because people with different age, gender , occupation, education, income have different needs. 3.2.3 Psychographic segmentation:

3.2.4 Behavior: 3.2.5 Positioning: Positioning is what the customer believes about your product's value, features, and benefits; it is a comparison to the other available alternatives offered by the competition. These beliefs tend to based on customer experiences and evidence, rather than awareness created by advertising or promotion. For example: Some people will choose Samsung phone over other brand for some reasons below:

1. By use or application: The users of Apple iphone may have a lots of application in game, entertainment but lack application which support documents such as : Word documents, Power point… Some applications are support these files in Apple iphone but its more difficult to use than in Samsung phone which use Android OS. 2. By user: For those want bigger screen which can easy to find things/reading/watch video…. they also go for Samsung phone over others brand. Because Samsung phone has the bigger screen compared to others. 3. By product or service class: Samsung provide a wide-range of product for customer 4. By price: Compare to other phone with the same specification, Samsung phone always cheaper. 3.3 Marketing Mix:

3.3.1 Product- 3.3.3 Promotion- Samsungs brand equity has been good even after its legal tussle with Apple. The sales have risen and the advertisements have become much more aggressive since then. Advertising: Samsung advertisements usually consist of plain folks and dramatization majorly in its ad campaigns. Celebrity endorsements are also used while advertising Samsung products. Placement of Samsung products in movie franchises is also seen.eg- http://allthingsd.com/20120915/in-new-ad-campaign-samsung-tries-to-win-on-the-merits/ ttp://www.youtube.com/watch?v=nf5-Prx19ZM&feature=player_embedded Sales Promotions:

Samsung has sales promotion methods like contests and premiums which is a part of their packaging. Bundled offers with service providers like Starhub, Singtel in Singapore and Vodafone in India, too helps in attracting the customers, as the option of acquiring a high end product at a reasonable price with data-plans and other such offers, opens up to them. This helps in attracting potential customers and converting them to profitable customers.

Eg- http://blog.vodafone.com.au/wp-content/uploads/Search-the-GALAXY-Game-on-Vodafone-Australia-Facebook.jpg Giving out free trials to customers who haven’t made up their mind, can convert them into potential customers. Giving out free movie tickets in which the product was placed or featured; by entering and winning a contest as a part of the product launch can also be a part of sales promotion.

Public Relations: With the help of celebrity endorsements and placement of products in advertisements or movies can enhance the Image of the brand. Brand ambassadors can be appointed who will portray a good image in the eyes of the audience. By placing a product in a movie franchise, Samsung can give a first look of its newly launched products in a stylish way.

This will be included when a review of the movie will be written, thus the product getting publicity. Personal Selling doesn’t take happen actively, but can be driven through sales people at retail outlets. Distribution Strategy- Samsung uses the Profile Strategy of Distribution. It has Wholesaler and Retailer in its chain but they follow Specific Distribution to avoid dilution of brand name.

They give incentives to the chain to sell more (Push) while they attract customers directly by selling their products online (Pull). They use the Hybrid Distribution System by selling their products to businesses as well as customers just like Dell Computers. It can be their home appliances to a chain of Hotels or Computers and IT accessories to Corporate Businesses. 3.3.4 Place-

4.4 Recommendation to the brand:

Based on the analysis by the group; although Samsung is one of leading organization in the electrical industry, it lacks in direction as well as some innovative-ness. Samsung strategy is found to be lacking in innovative product lines, hence creating major competition which can take over its’ market-share. For example: Apple has sued Samsung for last few years in the