Introduction

“Samsung Group (Hangul: ??; Hanja: ??; Korean
pronunciation: sams??) is
a South Korean multinational conglomerate
headquartered in Samsung Town, Seoul. It comprises numerous affiliated
businesses, most of them united under the Samsung brand, and is the
largest South Korean chaebol (business
conglomerate).

Samsung
was founded by Lee Byung-chul in
1938 as a trading
company. Over the next three decades, the group diversified into
areas including food processing, textiles, insurance, securities and retail.
Samsung entered the electronics
industry in the late 1960s and the construction and
shipbuilding industries in
the mid-1970s; these areas would drive its subsequent growth. Following Lee’s
death in 1987, Samsung was separated into four business groups – Samsung
Group, Shinsegae Group, CJ Group and Hansol Group. Since 1990, Samsung has increasingly
globalised its activities and electronics; in particular, its mobile phones and
semiconductors have become its most important source of income. As of 2017,
Samsung has the 6th highest global brand value.

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Notable Samsung industrial
affiliates include Samsung
Electronics (the world’s 2nd largest information
technology company measured by 2015 revenues, and 5th in
market value), Samsung
Heavy Industries (the world’s 2nd largest shipbuilder measured
by 2010 revenues), and Samsung
Engineering and Samsung C(respectively
the world’s 13th and 36th largest construction companies). Other notable
subsidiaries include Samsung
Life Insurance (the world’s 14th largest life
insurance company), Samsung Everland(operator
of Everland Resort, the oldest theme park in
South Korea) and Cheil Worldwide (the
world’s 15th largest advertising agency measured by 2012 revenues).

Samsung has a powerful
influence on South Korea’s economic development, politics, media and culture and
has been a major driving force behind the “Miracle
on the Han River”. Its affiliate companies produce
around a fifth of South Korea’s total exports. Samsung’s revenue was equal to
17% of South Korea’s $1,082 billion GDP” 1

 

Product features

By
2004 Samsung was the world’s-largest manufacturer of OLEDs, with a 40 percent
market share worldwide, and as of 2018 has a 98% share of the global AMOLED market. The
company generated $100.2 million out of the total $475 million
revenues in the global OLED market in 2006. As of 2006, it held more than
600 American patents and more than 2,800 international patents, making it the
largest owner of AMOLED technology
patents.

Samsung’s current AMOLED smartphones
use its Super AMOLED trademark,
with the Samsung
Wave S8500 and Samsung
i9000 Galaxy S being launched in June 2010. In January
2011, it announced its Super AMOLED Plus displays– which offer several advances
over the older Super AMOLED displays
– real stripe matrix (50 percent more sub pixels), thinner form factor,
brighter image and an 18 percent reduction in energy consumption.

In October 2007, Samsung
introducing a ten-millimetre thick, 40-inch LCD television panel, followed in
October 2008 by the world’s first 7.9-mm panel. Samsung developed panels
for 24-inch LCD monitors (3.5 mm) and 12.1-inch laptops
(1.64 mm). In 2009, Samsung succeeded in developing a panel for forty-inch
LED televisions, with a thickness of 3.9 millimetres (0.15 inch). Dubbed
the “Needle Slim”, the panel is as thick (or thin) as two coins put
together. This is about a twelfth of the conventional LCD panel whose thickness
is approximately 50 millimetres (1.97 inches).

While reducing the thickness
substantially, the company maintained the performance of previous models,
including Full HD 1080p resolution, 120 Hz refresh rate, and 5000:1
contrast ratio. On 6 September 2013, Samsung launched its 55-inch curved OLED
TV (model KE55S9C) in the United Kingdom with John Lewis.

In October 2013, Samsung
disseminated a press release for its curved display technology with the Galaxy
Round smartphone model. The press release described the
product as the “world’s first commercialized full HD Super AMOLED flexible
display”. The manufacturer explains that users can check information such
as time and battery life when the home screen is off, and can receive
information from the screen by tilting the device. 2

 

Product Market

Product

Samsung
world market share

Leading
competitor

Market share

Year

Televisions
(LCD, PDP, CRT, LED)

24%

LG Electronics

14.7%

Q2 2010

NAND flash

41.6%

Toshiba

28.7%

Q2 2011

Mobile phones

34%

Apple Inc.

13.4%

Q3 2013

Lithium-ion
batteries

18%

Sanyo

20%

Q2 2010

LCD monitors

18%

LG Electronics

12.7%

2010

Large-size LCD
panels
(revenue)

20.2%

LG Display

26.7%

Q4 2013

Hard-disk drives

9%

Western Digital

31.3%

Q1 2010

DRAM

49.6%

SK Hynix

24.8%

Q2 2013

Digital cameras

11.8%

Sony

17.4%

2010

Application
processors

5.4%

Qualcomm

33.9%

Q3 2013

 

 

Porters Five forces Analysis

Industry
Rivalry

This
element is especially significant for Samsung as the other White Goods
multinationals like LG, Nokia, and Motorola not to mention Apple are engaged in
fierce competitive rivalry. Indeed, Samsung cannot take its position in the
market for granted as all these and other domestic white goods players operate
in a market where margins are tight and the competition is intense. Apart from
this, Samsung faces the equivalent of the “Cola Wars” (the legendary fight for
dominance between Coke and Pepsi) in emerging markets like India where Samsung
has to contend and compete with a multitude of players domestic and global.
This has made the impact of this dimension especially strong for Samsung.

Barriers
to Entry and Exit

The
White Goods industry is characterized by high barriers to entry and low
barriers to exit especially where global conglomerates like Samsung are
concerned. Indeed, it is often very difficult to enter emerging markets because
a host of factors have to be taken into consideration such as setting up the
distribution network and the supply chain. However, global conglomerates can
exit the emerging markets easily as all it takes is to handover and sell the
business to a domestic or a foreign player in the case of declining or falling
sales. This means that Samsung has entered many emerging markets through a
step-by-step approach and has also exited the markets that have been found to
be unprofitable. This is the reason why white goods multinationals like Samsung
often do their due diligence before entering emerging markets.

Power
of Buyers

The
power of buyers for white goods makers like Samsung is somewhat of a mixed bag
where though the buyers have a multitude of options to choose from and at the
same time have to stick with the product since they cannot just dump the
product, as it is a high value item. Further, the buyers would have to
necessarily approach the companies for after sales service and for spare parts.
Of course, this does not mean that the buyers are at the mercy of the
companies. Far from that, they do have power over the companies, as most
emerging market consumers are known to be finicky when deciding on the product
to buy and explore all the options before reaching a decision. This means that
both the buyers and the companies need each other just like the suppliers and
the companies, as we shall discuss next.

Power
of Suppliers

In
many markets in which Samsung operates, there are many suppliers who are
willing to offer their services at a discount since the ancillary sectors are
very deep. However, this does not mean that the companies can exert undue force
over the suppliers as once the supply chain is established; it takes a lot to
undo it and build a new supply chain afresh. This is the reason why white goods
makers like Samsung invariably study the markets before setting up shop and
also take the help of consultancies in arriving at their decision.

Threat
of Substitutes

This
element is indeed high as the markets for white goods are flooded with many
substitutes and given the fact that consumer durables are often longer term
purchases, companies like Samsung have to be careful in deciding on the
appropriate marketing strategy. This is also the reason why many multinationals
like Samsung often adopt differential pricing so as to attract consumers from
across the income pyramid to wean them away from cheaper substitutes. Further,
this element also means that many emerging market consumers are yet to deepen
their dependence on white goods and instead, prefer to the traditional forms of
housework wherein they rely less on gadgets and appliances. However, this is
rapidly changing as more women enter the workforce in these markets making it
necessary for them to use gadgets and appliances. 3

 

Customer
Needs

1.      Best
technology in market

2.      Updated
technology at lower rates

3.      Handy
smart-phones

4.      Give
extra than what competitors provide

5.      Easy
to use operating system

6.      Phones
should not hang.

 

Customer Segments

1.      Top-tier

2.      Middle-tier

3.      Lower-tier

 

Key Internal Factors

Strengths

weight

rating

Weighted score

1.       Decent
brand image of an enterprise

0.06

1

0.06

2.       Wide
range of product portfolio

0.07

2

0.14

3.       Product
recognition and standing

0.08

3

0.24

4.       Focus
on environment

0.06

2

0.12

5.       Low
production cost

0.07

2

0.14

6.       Innovation
of product and design abilities

0.09

4

0.36

7.       Massive
marketing budget and advertising

0.09

4

0.36

Weaknesses
 

 

 

 

1.       Patent
litigations with apple

0.09

3

0.27

2.       Comparatively
low return margin

0.08

3

0.24

3.       Low
price may reason low excellence

0.06

1

0.06

4.       Key
opponents are biggest buyers

0.07

2

0.14

5.       Focus
on too many smartphone prototype

0.08

3

0.24

6.       Too
many competitors have come up

0.10

4

0.40

                                                                                  Total              1.00                                             
0.277

Key External Factors

Opportunities

Weight

Rating

Weighted score

1.       Samsung
smartphone market is ultimately rising in India

0.07

2

0.14

2.       Advancement
of mobile promoting industry

0.06

1

0.06

3.       Gaining
patents through achievement

0.08

3

0.24

4.       Proposing
additional services to addition advantage

0.07

2

0.14

5.       New
technology as wearable tech

0.08

3

0.24

6.       Growing
online market such as amazon

0.09

4

0.36

7.       Increased
demand for tablet and smartphone-based solution such as Samsung Pay

0.09

4

0.36

Threats
 

 

 

 

1.       Speedy
technological variation

0.08

3

0.24

2.       The
usual selling value of smart TVs will drop

0.06

1

0.06

3.       Intensifying
rivalry in market

0.09

4

0.36

4.       Lawful
battle in contradiction of Apple

0.07

2

0.14

5.       Huge
cost opponents in China

0.09

4

0.36

6.       Patents
breaches resulting in poor company’s standing and damaging publicity

0.07

2

0.14

                                                         
                Total                     1.00                                                
0.284

 

Competitors

1.      Apple

2.      Vivo

3.      Oppo

4.      Sony

5.      Xiaomi

6.      Motorola

7.      L.G.

8.      Toshiba

9.      Reliance
Jio

 

Developing Market Strategy

Samsung has reached unbelievable heights with its smartphones, which
helped the brand to become a symbol of quality and reliability for its
consumers.  

Besides the product, Samsung is famous for its customer service (Samsung has one of the fastest product
services). Though, product variation is the most powerful aspect of the
marketing mix of Samsung.

Samsung Marketing Mix Pricing Strategy – Samsung marketing strategy involves
two pricing strategies and let’s see for what goals they are used.

·        
Skimming Price – Smartphones of Samsung are leading the market with Apple’s iPhone. As Apple, Samsung also uses skimming price to
gain the upper hand over their competitors. For instance, Galaxy S6 and S6 Edge
are the brands new products of Samsung carrying the slogan “Next is now” and
claiming that they are the most beautiful smartphones ever created.
Without a doubt, S6 Edge (64 GB) that costs 1 180$ will
brilliantly/smoothly sell around the globe. But, what will happen when other
competitors will launch a smartphone with identical features? Simple. Samsung
will lower the price and easily steal customers from the competitor.

·        
Competitive Pricing – One of my favourite parts of Samsung marketing strategy. Due to
the fact, that unlike smartphones, Samsung has difficulties in gaining an edge
over its competitors with other products (for example, Samsung has trouble
keeping up with robotic vacuums like the Roomba 650 and 880). Surely, Samsung is an
authentic brand, but in terms of home appliance, it can’t possibly surpass LG.
Furthermore, in Cameras Cannon and Nikon are leading the market. So, for
Samsung to withstand this fierce competition, it’s vital to
use competitive pricing. Also, Samsung never is a late comer in production
and non-innovative, but they are mostly the first ones to introduce a change.

Placing in Samsung Marketing Strategy – Samsung uses channel marketing in its
industry. And from this strategy, only service dealers are taken into account
for corporate sales.

Retailers who present the technology chain are bound to include Samsung
in their list, because of the firm being a world-famous brand and Samsung can
also serve as an alternative for the consumers.

The distribution is a compelling part of the Samsung marketing strategy.

In certain cities, Samsung has a contract with a single distribution
company that distributes the product throughout the city.

For instance, Mumbai is a great example of a city, where Samsung
distributes its product through a single company.

These reasons may vary, but some of them might be like less
concentration required for monitoring distribution channels or paying less to
distribution companies because while placing a large order, discounts are always
present.

Promotion in the 4Ps of Samsung – Samsung marketing strategy uses diverse
forms of promotion. As Coca-Cola and Nike, Samsung is convinced that
advertising is one of the best forms of promotion to engage potential
consumers.

Besides advertising, Samsung approaches different promotional tactics to
make customers buy the product.

For instance, quite often, Samsung introduces discounts, sponsors
events, engages with national and worldwide festivals, etc. 4

POSITIONING

 Positioning Statement Samsung embodies style and technology for the young
professional, with its cutting edge design and superior connectivity features.
Samsung’s positioning statement is one that asserts its differentiation from
other mobile phone providers. In the local market where myriad choices abound,
Samsung’s sleek exterior design, accompanied by its selection of soft and hard
features, render it an optimal purchase for the young, technologically updated
professional.

 

Samsung tries to cover whole mobile and smartphone
market and is now one of the leading mobile companies of the world. Today
company’s product lineup includes almost any possible smartphone or
mobile. Thereby the current positioning of Samsung Mobile is to be a
market leader in whole mobile and smartphone market. Samsung came up with new ideas to be
more customer-focused and creative in order to establish a strong brand image
in the global market.  Their main focus is to make handsets with the most
amazing and unique designs in order to meet their customers expectation.

 

 

Samsung
has long counted on its marketing and hardware prowess to attract customers
seeking an alternative to Apple’s iPhone. When
Samsung needs to churn out a hit, it turns to what it’s always done best:
hardware. Samsung has long been at the forefront of the
mobile market when it comes to the technology crammed into the devices. Its
phones tend to use the fastest processors and brightest screens, as well as
incorporate novel, high-tech features such as curved displays seen in S6.
                    

Samsung prefers to use different taglines for
their different products. This year Samsung launched S6 with
“Six Appeal” as the tagline. 

 

 

 

Galaxy S6 stands out for it’s high
end technologies used and features. This promo link of S6 shows all the product
attributes, values and benefits which makes it one of the most competitive
leading brands .               
                     
     

 

There
are critics of Samsung who argue that its success is mostly due to
copying and then tweaking the innovations of others like Apple, Sony HTC, etc.
Even if it’s true Samsung is still leading among the fierce competitors and
some people saySamsung
has managed to bring the heat over iphone6 (biggest rival). 

 This video shows how strong both the brands are and still Samsung manages
to bring the heat over iphone6! 

 

Point of parity: The constant innovation and high end technologies for the
features and designs. 

 

Point
of differentiation: Samsung tires to give humanized and
better personal experience, customer insight product and
innovative technology. Recently we have seen Samsung has launched
Galaxy S6 with a curved screen which is a completely new concept. 

Samsung leads 3rd among the top 10 innovative
companies. 

Samsung is going from strength to strength and has
been ranked 7th ‘Best Global Brand’ in the 2014, Interbrand report.

 

Improvements- Overall the performance of this brand seems to be very
impressive. Samsung should focus more on the specifications and the hardware
rather than the outlook design so that consumers don’t get the chance to switch
brands in the long run. 

 

 

 

References

1.       https://en.wikipedia.org/wiki/Samsung
accessed on 21jan 9 pm

2.       https://en.wikipedia.org/wiki/SamsungElectronics
accessed on 21jan 9 pm

3.       www.managementstudyguide.com/porters-five-forces-analysis-of-samsung.htm
accessed on 21jan 9 pm

4.       http://inevitablesteps.com/marketing/samsung-marketing-strategy/
accessed on 21jan 9 pm

5.        

6.        

http://marketingdawn.com/swot-analysis-of-samsung/

swot analysis accessed on 21 jan
9.00pm 

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