Samsung Galaxy S7 Marketing - Case Study Example

Samsung Galaxy S7 Marketing Plan

Project overview and Rationale of the Plan

This paper provides a marketing plan of Samsung Galaxy s7, which is the newest product that Samsung has launched recently. The company was started by Lee and it is based in South Korea and its annual average earnings sum up to $300 billion US dollars (Samsung, 2016). The product is a mobile phone that has unique features such as being water resistant and having dual-pixel technology that enables it to shoot outstanding photos. The mobile phone has wireless means of charging and it is installed with Marshmallow Android that uses less power than the operating systems that were developed earlier. The plan aims at helping the organization to market the product in the African continent where it has low market share despite being the best-selling mobile company in the world in terms of global market share. According to IDC (2015), Samsung had a market share of 21.4%, which was the highest compared to other firms such as Apple that had 13.9% shares. In addition to mobile phones, the company produces other electronics such as computers and microwaves. The paper will provide a SWOT analysis of the company and then proceed to the marketing mix where the 4Ps will be described. The final part will discuss the technology that will be used to market the product in the target market.

The marketing plan is an essential tool for businesses because it helps in organizing thoughts and determining the strategies that the company will use to launch the product (Stevens, Loudon, Wrenn & Mansfield, 2013). The plan is also critical because it helps companies to identify the factors that affect the company. This is because these aspects may propel the firm to the achievement of its objectives; or they may hinder the success of the company (Dibb, Simkin, & Bradley, 2001). Therefore, this marketing plan is essential because it will help the company to discover the techniques to use in marketing the mobile phone given the internal and external environmental factors.

Evidence of the Need for the Product in the Target Market

This plan mainly targets the African market that is a major user of mobile phone and that has not been exploited fully by Samsung. The International Telecommunication Union indicates that between 2003 and 2008, users of mobile phones in Africa increased from 10 million to 400 million; and this changed to 500 million in 2015 (Ekins, Bradshaw & Watson, 2015). This justifies why the organization found out that at least 68% of the world users live outside Europe and America meaning that they are mainly from Africa, Middle East or Asia (Jin, 2011). This market also has a high need for mobile phones because of the need for communication between friends and family members who live in different regions.

Table 1 shows change in number of mobile phone users from 2003 to 2015

Year

Number of users

Percentage change

2003

8

-

2008

300

3650%

2915

500

67%

(Ekins, Bradshaw & Watson, 2015)

Figure 1 shows change in the number of users from 2003 to 2015

The above statistics indicate that the use of mobile phone in the market is growing at an accelerating rate and Samsung needs to take advantage of this by marketing the product to this region. The market is also increasing its use of mobile phones especially in South Africa, which is the most developing nation in the continent (Mutula, 2010). According to Villasenor, West and Lewis (2015), 90% of South African adults were using mobile phones by 2014 and if the statistics indicated above is to go by, it means this figure has increased since that time. These statistics therefore indicate that this market is emerging and it needs to be exploited by being provided with variety of products with Galaxy S7 being the newest in this market.

Problems Addressed by the Mobile Phone

Despite the increase in the use of mobile phones in Africa, the market lacks access to high quality products (UNDP, 2011). This is because the most common products in the region are from China, and they have been identified to be of low quality. In fact, countries like Kenya have banned Chinese mobile phones that do not meet the standards set by the Kenya Bureau of Standards (China, 2013). This further reduced the market’s access to mobile phones. Therefore, Samsung S7 will solve this problem because it is both high quality and it is from a trusted company from South Korea. The phone that has wireless charging technology also eliminates the problem of sitting in one place and waiting for it to charge. This is in addition to giving consumers a brand to identify with because of its aesthetic value and uniqueness. However, the product may be a bit more expensive meaning that it may be unaffordable to the low earning class in the society.

SWOT analysis of Samsung

Strengths

The organization has a variety of products that enable it to survive even if the sales of one product line decline (Senker, 2015). The products include mobile phones, television sets, computers and microwaves. All these products are market leaders compared to those of competitors; for example, mobile phones sell more than those of Apple. This enables the company to attract customers to purchase its products.

The organization has a global presence meaning it has created worldwide awareness for its brand (Schwartz, 2015). This means that the company does not have to spend a lot to create awareness. Instead, the firm may take advantage of this awareness to sell the new brand to the market.

Weaknesses

The company’s sales are unstable meaning that the firm may not be able to predict the returns it may expect from selling mobile phones in the market. The growth of the firm’s sales may be high in some years, for example, 31% in 2000 while it may be low in other years such as 7.6% in 2003 (Peng, 2014). The company’s capabilities are also not as developed as those of the major competitor that is Apple meaning that the rival may sell more units and earn a larger market share than Samsung.

Opportunities

Samsung has an opportunity to invest in upcoming regions such as Africa and Asia, which have high populations. The populations in these markets have a high interest in using mobile phones for communication. These markets are also not exploited as much as Europe and United States meaning that there is opportunity for the growth of companies.

The growing demand for 3G products worldwide has also created an opportunity for expansion for Samsung (Hart-Davis, 2012). The company also has developed numerous 3G products meaning that it has the potential to satisfy the huge demand for these electronics.

Threats

The organization faces high competition from competitors such as Apple and Chinese based firms such as Tecno, HTC, Itel and Huawei (Ungson, & Wong, 2015). These companies are developing more sophisticated products that are cheaper especially those made in China because of the low cost of production in the country. These competitors may reduce the market share of Samsung mainly because it incurs high cost of production and thus charges a higher price for its products. However, this may be overcome by shifting production to the low cost areas.

Strengths

Products that are market leaders

Global presence and awareness of the company’s brands

Weaknesses

Unstable sales

Under developed capabilities

Opportunities

New markets for mobile phones

Growing demand for 3G products worldwide

Threats

High competition

High cost of production

Marketing Plan Structure and Timeline

Action

Start time

End time

Writing up the marketing plan

April 2016

May 2016

Designing product for the market

May 2016

October 2016

Pricing

October 2016

October 2016

Promotion and distribution

November 2016

Endless

Evaluation

Every six months

-

The designing of the product will mainly involve researching the market to find out the features that it needs so that they may be added in the product. For example, the market may be interested in colors that are not available meaning that the company has to design new products with the demanded colors. The next section will involve pricing the product; this involves comparing the prices of similar products in the market and setting a similar cost, which is lower by a small margin to entice consumers to buy Samsung S7. After the pricing, promotion and distribution will take place at the same time and these involve creating awareness and making the product available to customers.

Characteristics of Customers and their Consumer Behavior

The targeted consumers are between 17 to 50 years because this is the main age set that has knowledge of using mobile phones; these target customers live in Africa. Consumers in this group also use the product for variety of functions. For example, these consumers use phones to do shopping, communicate with friends, browse the internet and play games (Yan, 2015). These consumers are interested in convenience meaning that they prefer products that make work easy; for example, banking, which is normally hectic, is convenient when done using the mobile phone (King, 2013). These consumers also have a high liking for durable products that have a long life because their incomes are not high enough to enable them replace spoiled products. The target market also prefers high end devices that enable them to browse social media sites such as Face book and Twitter (IRMA, 2015).

According to Yan (2015), mobile phone users in the African market purchase the product based on properties, price and aesthetics. The more the properties in a phone, the higher the price the consumers are willing to pay for it. However, if there are two or more products with similar properties, customers buy the one with a lower price, but they may be convinced by aesthetics such as color to pay a higher price even if there is another device that can perform similar functions (IRMA, 2015). The consumers also believe that the mobile phone is a necessity meaning once they lose it or it gets spoiled, they replace it immediately.

Reasons for using electronic media in advertising

• Consumers are in their middle ages meaning that they are interested in the developing innovations that make their life easier.
• Electronic platforms such as Face book will help the company to access numerous consumers simultaneously.
• It is cheaper to market using electronic media than using brick and mortar techniques.
• Electronic media provides feedback faster than traditional methods of advertising.
• Electronic media enables organizations to interact with consumers.
• Competitors use electronic media to advertise their products.

Market Segments

Segmentation basis

Characteristics of Consumers

Demographic

Consumers are both male and female

Customers include both the youth and the older adults, that is (17-34 years are youths) while 35-50 years are old

Consumers also include low, medium and high income earners (Taskiran & yilmaz, 2015)

Geographic

Customers live in all the 53 nations in Africa

They live both inland and on islands in the states where they are citizens

Consumers also live in both rural areas and towns (Boone, 2013)

Psychographic

Some consumers are employed while others are not

The customers also include innovators who prefer products with various characteristics and those who adopt whatever is made available (Mutula, 2010)

Behavior

The customers are divided into those who use mobile phones mainly for communication and those who use the products for entertainment

Customers are also made up of those who believe a higher price means high quality and those who associate quality with factors such as aesthetics and durability (Friend & Zehle, 2004)

Mass and Differentiated Marketing

Mass marketing is the one used by an organization that does not recognize the market segments that exist in the population. The company uses similar promotional messages and strategies and it produces one brand for all consumers (Kotler & Armstrong, 2016). However, differentiated marketing recognizes the segments in the market, for example, demographic and psychographic. A firm that uses this strategy customizes strategies used in each market because consumers are perceived to have different characteristics (Blythe, 2003). This plan aims at combining the two strategies whereby mass marketing will be used to standardize the product as Samsung does normally. Differentiated marketing will be used where the organization will use various distribution channels and different advertising methods based on the technique that is common in each country in the continent.

Brand Positioning

The plan aims at positioning Samsung S7 using a positioning message that creates an image of a powerful mobile phone in the minds of consumers. The message that Samsung uses will be applied in this case and it is, “The next big thing is here.” This message creates a mental image of a powerful tool in consumer minds. It also makes consumers to believe that the mobile phone is the best that they may get in the market (Boone, 2013). Therefore, numerous customers will be interested in trying out the product so that they may enjoy its unique features, which may not be found anywhere else in the market. This is similar to Apple’s positioning strategy that informs consumers that the iPhone is a premium brand hence making them to buy it at a premium price (Evans, 2013).

Marketing mix

Albaum (2010) borrows Philip Kotler’s definition of marketing mix as a set of controllable variable that can be adopted by an organization in order to influence their buyer’s response. The marketing mix is made up of the famous 4Ps which include: product, price, promotion and place/ distribution. The marketing function utilizes them as marketing strategies with each of the strategies formulated in consideration of the needs of the target customers. This means that this mix will also vary from organization to organization depending on the marketing objectives and the resources available to an organization.

Product

The product to be marketed is Samsung Galaxy S7 which was released in March of 2016. The product simply understands the needs of its target customers with its incredible slim design that can fit in the palm of the hand to enable them to keep the chat on without having to struggle on how to handle the phone in different situations. To keep up with their love for photography and the ‘selfie trend’, the S7 contains a 12MP back camera with a phase detection autofocus and led flash while it contains a 5MP front camera. No one should have a reason to miss a shot with the phone because it is the first phone to have a dual-pixel technology as it focuses better than the blink of an eye. The phone is suitable for all conditions and can also be depended on by those customers who are not all that careful with their phones as it contains a corning Gorilla glass that is both dust-proof and water resistant. Its storage capacity caters for the heavy users because it contains a 32GB internal memory and that is expandable up to 200GB. Power should never be an issue for those who love to constantly chat, listen to music or play games with phones because it contains a wireless charging system that enables the phone to be charged within no time. Finally the customers can be able to choose the Black Onyx and Gold platinum colors (Casterson, 2016).

A brand is simply a name, sign, design, term, symbol or a combination of those that is intended to identify the goods or services of a company in order to differentiate them from their competitors. A brand enables a company to gain a competitive advantage over their competitors through differentiating a product from the rest and informing their customers what to expect from a company’s product or services. Strategic branding enables a company to gain a strong brand equity, which helps add value to the company’s products and services and also increases customer loyalty. Once, registered the brand will also help in protecting the intellectual properties of the company (Kapoor & Kulshretha, 2012).

Samsung’s branding philosophy is based on innovation, world class designs such as the slim edge design in the S7, internal branding, cutting edge technology and recruiting of world’s best talents. From the definition of a brand, the name Samsung is a brand by itself with the brand name being embedded on top of the front screen of the phone and at the back cover of the phone. The name in itself represents innovation and state of the art technology, which is evidenced by their 15 R&D centers around the world. The brand name also helps it occupy a market position of latest trending product designs. The band name Samsung also represents world class quality products and innovation (Roll, 2006).

Price

The company will use a penetration pricing strategy when entering the African market. The strategy aims at charging low initial prices in order to create a new market or grab a market share of an existing competitor. The strategy has been adopted because the buyers in the target market are slightly price sensitive, to allow the product enough time to establish its price market segment and because the market is large enough to be sustained by a lower profit margin. The advantage of adopting the strategy in this market include: faster growth in customer base and revenue, increase the market appeal to a broader market therefore attracting more customers to purchase and introduce others to the product, it will help create a barrier to entry by the competitors and to be able to establish a viable business (Hirschey, 2009).

Since the brand is known for its quality and innovative products such as the S7, the price of the product will later be increased after it has fully established itself in the market. This will enable the target customers to associate the premium price attached to the product with its high quality. The target market for the company’s product is already known for this culture of attaching high prices to high quality product.

Payment policy entails the conditions and terms a seller will complete a sale. The terms will specify the period a buyer is allowed to pay off the amount due, the policy will also specify conditions when a payment should be made in advance and when it should be made on delivery. The policy is also supported by a payment system which involves the mechanisms that enables settlement and clearance of monetary and any other financial transactions (Lawrence, 2004).

The payment policy to be adopted will require that a customers pay on delivery if they purchase the phone from the physical stores to be located in different convenient locations. For those ordering their phones online, they will be required to pay in advance after placing the order and the wait for delivery. The payment methods available to the customers will include: cash, cheques, debit and credit cards, and mobile money. They can also make use of the electronic payment systems such as PayPal.

Promotion

The promotion mix includes the tools that the business will utilize to effectively communicate the benefits of their products and services to their target customers. The tools will be highly dependent on the characteristics of the target customers. The tools include advertising, public relations, social media, sales promotion and personal selling (Lamb, Hair & McDaniel, 2010).

Advertising

The company will engage in aggressive advertising to before the product enters the market and in the initial stages of market entry. The adverts will aim at creating awareness to the potential customers of the new product entering their market and also persuade them to buy the product. The advertisements will be targeting potential customers, who include the middle to high income earners that are mainly in the 17-50 years age bracket. Those from the 40- 50 years age group will include the customers who still want to keep up with the latest trends. The advertisement will be placed in the printed media in newspapers of national wide circulation and use of other Medias such as television, radios and bill boards placed at strategic points such as in estates where the target customer live. The company will also make use internet based advertisement media such as use of emails, blogs and websites including Samsung’s website. It will also depend on worldwide advertisements done by Samsung using celebrities such as Lionel Messi.

Sales promotion

These include short-term activities that aim at offering the customers something over and above what is usually provided to them. Business promotions will be achieved through sponsoring events in the continent such as sponsoring conservation events and events aimed at improving health conditions in the country. The company will also make use of sales personnel who will engage in direct marketing of the product during events where they can interact with the customers. The product will also be on display in the retail stores where customers will be able to go and preview the product with the assistance of the sales personnel.

Social media marketing

This will be the easiest form of online marketing tool the company will use. The advantage of using social media is the fact that most of the customers in the target market have a huge presence in the social media sites such as Facebook, Twitter, Instagram, Google+, LinkedIn, MySpace, and Pinterest. Webpages of the product will be created where customers can follow, comment and even offer assistance to others on how to use the product which will help increase brand awareness and attract more customers.

Place

This is concerned with means of getting the product or services through the various distribution channels to the final consumer. The strategy will be concerned with the business locations, location of the target market, warehouse and transportation of the products and means of reaching the target customers (Ritcher, 2012).

The company will make use of a selective distribution strategy where they will have a small number of retail outlets chosen to distribute the product. The company will also make use of the online platform through use of various e-commerce sites. The retail outlets will help establish good customer relations because customers will get an opportunity to interact with the sales personnel and learn more about the product. The retail outlets will be established in the major cities and towns for easier accessibility by the customers. The customers will also be afforded an opportunity to order and pay for the products using the online platforms and then the products will be delivered to their addresses using courier services such as G4S and DHL.

Customer Relationship Management

According to Kumar and Reinartz (2012), it is a business strategy that aims at attracting, development and retention of the right customers. Good customer service is built as a result of efficient coordination of information across the distribution channel. CRM focuses on profitability of the business and customers’ behavior.

The company aims at maintaining relationships with the customers through maintaining a constant communication with the customers. This will be achieved through inviting for feedback on the product either directly in the store or use of online tools such as the social media sites and email. They will also be receiving personalized messages from the company informing them about the product and also other messages such as during their birthdays. The company will also provide warranties on the product to avoid customer complaints. Adverts will also be used to keep in touch with the customers on a regular basis.