Samsung's Marketing Strategy - Essay Example

? Samsung’s Marketing Strategy Outline I. Introduction Headquarters of Samsung Company Inception of Samsung Company Reasons why Samsung Company was chosen for the discussion II. History of Samsung When was Samsung founded How has its grown and developed since its inception III. Development of Samsung Samsung’s growth up to the recent times The challenges it faced as it grew and developed The devises that propelled it to great development IV. Samsung’s marketing strategy The four elements Samsung has used to market its products How Galaxy S2 promotes Samsung Company’s image and sales. How pricing improves sale of Samsung products How location improves sale of Samsung products V. Findings from the market research The importance of Samsung Mobile clinics in attracting its customers The use of simple and attractive Android operating system The valid warranties that saves customers from excessive spending VI. Recommendations Samsung to constantly unveil new products to suit market changes Samsung to continue producing smart phones with attractive features Samsung to learn from the failures of their competitors Introduction Samsung Group is a reputed global brand. It is headquartered in Samsung Town, South Korea. Samsung hailed from humble roots to where it is currently. At inception, in 1938, the company had only forty employees. Today, the company employs millions either directly or indirectly all over the world. The mobile phone subsidiary is doing extremely well; thus, it shall be at the core of this paper. Several reasons inform the choice of Samsung Telecommunications as the topic of this paper. However, the main ones are three. First, Samsung has recently overtaken Nokia to become the world’s largest cell phone manufacturer (Lunden 2011). The Finnish manufacturer had been at the helm for fourteen years. The question therefore arises. How did Samsung manage to break such a consistent trend? Let alone in the current deplorable global economy. The second reason informing my choice is the ongoing debate about the global balance of power. For a while now, there has been talk of a shift of economic power from the West to the East. Can such industrial shifts be trusted as credible proxies for much larger impending changes? Finally, and most relevant to this paper is Samsungs global Marketing Strategy. How has Samsung positioned itself to benefit where its competitors have failed? How much has the constant rollout of new products ensured that Samsung is an ever fresh brand? History of Samsung It has already been mentioned, the mobile phone arm of this global giant is a part of the much larger Samsung Group. The parent company was founded, in 1938, by Lee Byung–chull. It is currently a publicly listed company. At inception, the company dealt in groceries. Today, Samsung is a by-name for sleek electronics and heavy machinery. The company expanded and was moved to Seoul in 1947. However, the Korean War intervened and the company was closed. The founder later re-opened under the name Cheil Mojik. It was not dealing in groceries anymore. Instead, it dealt in woolen mill. It was the largest mill in South Korea at that time. The stage had been set for Samsung’s rich manufacturing heritage. The company diversified into several fields. The company always sought to be the leader in every market. Along the same vein, Samsung entered the electronics industry in the late 60s. Its first product was a black and white television set. Later on, in 1977, the company entered the telecommunications industry. By the end of 2011, Samsung had sold over 300 million mobile phone devices worldwide. By so doing, it overtook Nokia. However, the competition is not over. Smartphone’s are said to be the next frontier in global telephony. How Samsung approaches this market depends very much on the development strategy it has adapted till now. The current development strategy will be under review below. Development of Samsung Samsung Telecommunications is a fairly recent entrant compared to some of its main competitors. The business was founded in 1977, and has endured a steep climb to the top. The company launched the Telecommunications Network when it was founded. In 1986, Samsung unveiled its first telecommunications device, a car phone. Its quality was poor. The Research and Development department opted for a reverse innovation. Mobile phones were procured from already established brands. They were used as the standard against which Samsung was to manufacture its own mobile phones. The result of this massive undertaking was the first mobile phone to be manufactured in Korea (Nash 2000). The business still did not take off. Mobile phone sales were still in the low thousands. Quality was poor too. The company directors brought in a new management, and gave them a 1994 ultimatum. Within that time, they had to produce a mobile phone of equal or superior functionality to Motorola. In 1993, a vastly improved SH-700 was unveiled. This set in motion the quality drive we associate with Samsung today. Poor quality mobile phones were destroyed as a result. Lighter and slimmer products were unveiled year after year. This quality drive led Samsung to the top of the industry where it stands today. As we speak, the Samsung Galaxy is the best quality mobile phone in the market (Lunden 2011). Its demand has shot through the roof too. Samsung’s current marketing strategy Marketing entails balancing four key elements. These are product, price, promotion and place. How a company balances the four elements constitutes its marketing strategy. Samsung has been very shrewd in applying these principles. As regards the product, Samsung is continually rolling out new products. The company’s next product, the Galaxy S2, has been recently unveiled. This constant rollout ensures that customers are always saving for the next product. Improvements to the products are a huge selling point too. Long battery life, especially, is demanded by today’s gadget-addicted users (BBC News Technology 2012). Other improvements include; screen size, mobile trackers and high resolution screens. Price is the key especially in the biting economic environment. Samsung has flooded the market with affordable mobile phones, but with enhanced features. They have realized the enormous fortune that is existent at the bottom of the pyramid (Prahalad & Stuart 2012). However, this is not to the neglect of the high end market. Samsung is making huge inroads here too. The Samsung Galaxy Smartphone is currently the first among equals. Promotion can not be ignored either. The company adapts a subtle approach to its promotion. When selling the first mobile phones with enhanced voice detection, Samsung branded them as, ‘Strong in Small Sounds’. Its current product is marketed as the next Galaxy. Such appealing promotion naturally resonates with the buyer. Lastly, Samsung has also been shrewd with regard to the choice of location. The company has concentrated on the untapped emerging markets. This is where the battle for hearts and minds is currently being waged (BBC News Technology 2012). With its affordable devices, Samsung has been a winner here too. Generally, the company seems to be touching all the right buttons at present. However, times and demands change. Its marketing strategy will be judged depending on how it responds to those variables. Findings from the market research The overwhelming response among those captured in this survey was very favourable to Samsung. The brands efforts to find favour with the customer seem to be bearing a lot of fruit. Fifteen users of Samsungs mobile devices were interviewed. Seven men and eight women and interviewed. The first question relates to what they liked most about the Samsung brand. Generally, the usual answers came up. In consensus, they all cited three main issues. Top of the list were the Samsung Mobile Clinics. At these events, broken or worn out parts of their devices could be repaired or be replaced at minimal or no cost at all. Second, they cited the long and stable Samsung warranties. These are insurance against any defaults in the products that might have originated from the manufacturer. Thirdly, the interviewees’ liked the relationship between quality and cost of Samsung products. Samsung offers the best value for money proposition among all its competitors. Another issue that came up concerned the operating system. Samsung mobile phones use the Android operating system which is simple and easy to use, in the words of one interviewee. However, it should be recognized that this was cited by only three of the fifteen interviewees. They were also users of Samsungs high end products. The limited space allocated for consumers’ complaints about Samsung reflects the brands popularity on the ground. Twelve out of fifteen interviewees only had positive words for this brand. The three who deviated from this trend took issue with the scratch-able screens of their, high end products. Even fewer still, a paltry two, took issue with the poor designs of Samsungs mobile phones. One of them likened the situation to cooking good food, but serving it on a dirty plate. Overall, the brand has a lot going for it. It has served its magic portion, and customers are always asking for more. Recommendations Going forward, the company needs to embrace its current strategy even more. New products must be constantly unveiled to supply increasing demand. Their quality must be always on the rise too (Nash 2000). Functionality must be made even more superior to that provided by competitors. The prices must always be at a level reachable by the ordinary consumer, their main target. To sum it all up, Samsung’s current strategy should be retained in its entirety. On top of that, new markets should be explored. The Smartphone market is the next frontier in mobile phone telephony. Among the brands leading the way is Apple. It is a hugely lucrative business. A strategy to take on this global giant must be drafted. However, this new pursuit must not alienate Samsung from its core competence (Prahalad & Stuart 2012). The company must seek to learn from the failure of its competitors, especially Nokia. The latter was slow to embrace the Smartphone business. Above all, Samsung must always endeavour to be a market leader. The values that brought it into prominence must not be abandoned. They are the ones to take it to ‘the next Galaxy’. References BBC News Technology, 2012. ‘Samsung to launch next galaxy in London event,’ Retrieved on 3 May 2012 from www.bbc.co.uk/news/technology-17931797 Ferrell, O. & Lucas, G 2007, Marketing Strategy, New York: South Western College Publishers Hartley, M. 2012, ‘Samsung passes Nokia for title of worlds top mobile phone seller’, IDC Retrieved on May 3rd from www.financialpost.com/2012/05/01/samsung-passes-nokia-for-title-of-worlds-top-mobile-phone-seller-idc Lara, O 2012, ‘Samsung is the world’s largest phone maker’, Marketing Week, Accessed on 3 May from http://www.marketingweek.co.uk/news/samsung-is-worlds-biggest-phone-maker/4001381.article Lunden, I. 2011, Biting at Nokias’ Heels, Samsungs device sales In 2011 Pass 300 million’ Retrieved on 3 May 2012 from http://paidcontent.org/2011/12/12/419-biting-at-nikias-heels-samsung-devices-sales-2011-pass300-million/ Nash, E. 2000, Direct Marketing: Strategy, Planning, Execution, New York: Mc Graw Hill Prahalad, C & Stuart, L 2012, The Fortune at the Bottom of the Pyramid Retrieved on 3 May 2012 from www.csberkeley.edu/../Fortune-BoP.pdf Appendix Graphical Representation of the findings The pie chart below represents the order of priority for the customer’s interviewed. Before purchasing Samsung devices, their considerations range from the most important (Quality) to the least important (Customer care). Samsung Marketing Questionnaire Read More