Samsung Smartphone Market Essay examples
1136 WordsAug 19th, 20135 Pages
Samsung Smartphone Market
J.L.D - Samsung Smartphone Market
Smartphones are on the cutting edge of current technology. Firms are constantly competing in an effort to corner this market. Creators and innovators such as: HTC, Apple, and Samsung appear to be paving the way as consumers grapple over which product suits them the best. These companies battle constantly for market share whether it is on the ground of the consumer’s desires or in the court system with lawsuits. These smartphones are rapidly evolving into one in all personal computers with seemingly unlimited communication and organizational capabilities. One of the companies that will be the main focus of this paper is Samsung.
Although Samsung has a grip in many…show more content…
Keeping these aspects in mind, how could Samsung increase their competitiveness and increase profits? There are three strategies that will help Samsung stay on high end of the smartphone slope: creating additional value in their product, raise the price of the product and monitor consumer’s reactions, and lower their prices without really lowering their prices (Colander, 2010).
By creating additional value in their smartphones, Samsung can entice more consumers and possibly lure them away from their original taste preferences. How is this possible? By teaming up with companies such as Dropbox, Evernote, and tech-magnate Google, Samsung has been able to mainstream smartphone efficiency. Keeping track of the current trends as well as up-and-coming technology software is what keeps companies alive today, especially in an oligopoly-monopolistic hybrid market. Acting too slow could result in the deterioration of the handle that Samsung currently has in this market. Some of the features that deter consumers from Apple are their limited storage capability, irreplaceable battery, and lack of user friendly buttons. If Samsung listens to the people on these issues and applies them to their products, they can easily earn consumers’ preference ("Gsmarena", 2013).
Raising the price of a product does not guarantee more profit. However, people are willing to pay more for a tool that has more
Samsung Galaxy is the brand name for a series of smartphones and tablets manufactured and marketed by Samsung Electronics. The entire product line is diverse and each product category caters to a particular demographic profile.
Under the Samsung Galaxy brand, there are smartphones designed and marketed specifically for consumers in higher economic status while there are also models targeted toward younger or budget-conscious consumers. Some appeal to consumers who prefer bigger display screens. Others appeal to those consumers in search for premium built quality. The same is true for the Galaxy tablets. The company has also been diversifying the products under the Galaxy Watch product line.
Product strategy through diverse product offering
Some would say that Samsung has been saturating the market and confusing consumers with the introduction of different smartphone and tablet devices under the Samsung Galaxy brand. There are also those who criticised the company for employing repetitiveness in feature and design considerations.
For example, the Galaxy S line of premium devices is essentially the same as the Galaxy J line of mid-entry devices in terms of form factor. Both share similarities in some design aspects. Furthermore, both also use AMOLED screen displays—a feature initially reserved for high-end Samsung products.
It is easy to assume that focusing on fewer products is more effective and efficient than manufacturing and marketing several and almost similar products. But product strategy through product diversification is actually central to the marketing strategy of Samsung. Data from market research firm IDC Research Inc. revealed that Samsung has been the leading smartphone manufacturer in terms of unit shipments since 2012.
Product diversification can be costly and risky. However, when done right, this product strategy provides a safety net against market downturns. Take note that concentrating heavily on a single or fewer products for a limited market exposes a company to risks associated with market volatility due to rising and falling demands.
It is also an effective strategy to grow a business. Product diversification works best for companies operating in a market populated by consumers from diverse demographic backgrounds and with different psychographics.
The market for smartphones and tablets are both volatile and diverse nonetheless. Consumer preferences are dependent on features and specifications relative to pricing points. Some consumers are willing to spend on an expensive device with high-end features. Others prefer buying a device that fits their budget and usability requirements. There are those who do not mind the price but are very particular when it comes to hardware and design specifications.
Through a product strategy that centres on product diversification, Samsung caters to a wider market for smartphones and tablets. For example, the Galaxy S product line caters primarily to consumers from high socioeconomic class. But the company has imported the same user experience to mid-entry consumers through the Galaxy J product line, albeit some trade-offs such as lower hardware specifications and a plastic form factor rather than a metal and glass body. Samsung has also manufactured a slightly trimmed down version of the Galaxy S product line—the Galaxy A. This product line has almost the same processing and memory specifications, as well as metallic body form factor minus premium features including heart rate sensors, better camera optics, and fingerprint sensor, among others.
Even Apple has recognised the importance of product diversification. Before, the marketing strategy of this company centres on limited product offering. Today, the company offers three categories under the iPhone product line and several more categories under the iPad product line. Apple has also introduced a phone with a large screen display and a tablet with smaller screen display—strategies that have been implemented by Samsung. Take note that Samsung has virtually created the market for large-display smartphones called phablets.
Technological innovation as part of the product strategy of Samsung
Through a diversified product portfolio under the Samsung Galaxy brand, Samsung has developed and implemented a product-oriented marketing strategy that acknowledges the existence of various segments within a particular market. But this strategy does not rest alone with product diversifications.
Samsung operates in an industry wherein technological progress or innovation is a key ingredient in building and maintaining competitive advantage. Throughout the years since the launch of the first Samsung Galaxy device, the company has introduced several innovations that influenced the direction of the market for smartphones and tablets.
The company has been attributed to popularising AMOLED display technology on smartphones and tablets. This display remains a viable alternative to IPS display technology commonly used by other manufacturers. Both AMOLED and IPS can have the same high pixel density and better colour reproduction. Some manufacturers such as LG and Lenovo are now using AMOLED in some of their mobile devices.
With the introduction of the Galaxy Note, Samsung created the specific market for phablets—an amalgamation of smartphone and table and a reference to devices with larger-than-average screen size for smartphones but smaller-than-average screen size for tablets. The Galaxy Note and the Galaxy Tab Note series have also reintroduced the use of stylus pens in mobile computing devices. This input feature stretches the capabilities of smartphones and tablets. Even companies such as LG and Apple have followed suit.
Then there are added features such as a heart rate sensor, finger print scanner, and fast charging capabilities, among others. While smartphones would still work without these features, they provide an added value for consumers. Take note that Samsung is not the forerunner for these features but they managed to integrate them within their premium smartphone devices.
It is important to note that through innovation, a company further promotes it leadership in the industry. The introduction of new technological features can have several benefits in the overall marketing initiative of a company. A new technology could create a market or a demand and as an innovator, a company will have an initial competitive advantage. Further introduction of novel features also helps in driving and leading market trends. As mentioned, an innovator will always have the competitive advantage, especially if there is a positive market reception for an innovation. Innovation also promotes differentiation—or something that competitors lack and consumers might find appealing due to novelty.
Promotional strategy to supplement the marketing strategy of Samsung
The marketing strategy for Samsung Galaxy products also involves heavy promotions using a combination of push and pull strategies.
In a push marketing strategy, a company “pushes” a product or idea through advertising and sales strategies. Samsung does this by investing heavily on traditional advertising just like companies such as Coca-Cola and Nike. This is evident from ads coursed through traditional mediums such as print and broadcast as well as new mediums including social media.
Samsung also does push marketing using celebrity endorsements and spot placements on major events including sports and entertainment shows. The company has also maintained accounts in social networking sites such as Facebook, Twitter, and YouTube to purchase ad spaces while also maintaining online presence.
Take note that Apple does not invest heavily on traditional advertising and other marketing communication channels. Instead, the company focuses more on pull marketing strategy in which consumers are pulled or drawn to Apple products. The idea behind a pull marketing strategy is the creation of a strong brand image and the establishment of loyal customer following.
Samsung also does some sort of pull marketing strategy. Using social media, the company tries to build and maintain relationship with consumers through an online presence. The social networking accounts of Samsung also serve as venue for discussions and announcements. Even advertisements also initiate a system for pull strategy.
The company also partners with retailers and network carriers in other countries to help them with the distribution of Samsung Galaxy products—especially through varied sales promotion strategy. Under the subsidy and contract arrangements of network carriers, consumers can purchase a Galaxy product at a cheaper or easy-to-afford deal. Samsung also offers discounts to trade partners to motivate them to distribute Galaxy products above competition.
Through relationships with carriers and distributors, Samsung ensures that the Galaxy products remain visible in the market, especially to the consumers. This could help in further pulling consumers to the product because of a sustained physical presence.
From the aforementioned, the push and pull marketing strategies work simultaneously for Samsung. These two are complementary. Whenever Samsung rolls out advertisements, the company pushes the Samsung Galaxy brand. Barraging the public with marketing messages will definitely stir interest until the company converts some portion of the general audience into loyal consumers—does creating a mechanism for supporting future pull marketing strategies.