PROJECT

ON

SAMSUNG SMARTPHONE MARKETING STRATEGIES

BECHELOR OF COMMERCE

Submitted By

BAISHAKHI NAIK

UNIVERSITY ROLL. NO. S07419COM002

REGISTRATION NO.

Under the guidance

Mr. DEEPAK KUMAR MEHER

BAMRA TRUST FUND COLLEGE

SAMSUNG SMARTPHONE MARKETING
STRATEGIES

Abstract

This thesis research is going to analyze the marketing strategy Samsung has used for
some of its smartphone devices in the Smartphone market. The thesis will look into
products introduced within the last two years. This approach seems reasonable due to
the rapid change of technology in high tech market and continuous introduction of new
innovative products within a short period of time. The research will start by
understanding the mission and goals of the company. Then it will continue in exploring
the internal and external environment of the company. The paper will present the
marketing mix of Samsung Smartphone's in their introduction stages, to have a deeper
understanding on how Samsung has differentiate itself using the four components of the
marketing mix to gain an advantage over its competitors. Further in the research we will
see how Samsung recognizes every need in the market and how it offers products for
different customer segment. The study will finalize by analyzing consumer perception
on the marketing strategy used by Samsung on its smartphone products.

KEYWORDS: Apps, Smartphone, Phablet, Flagship, Android, iOS, OS, Ad

 TABLE OF CONTENTS
1 INTRODUCTION.....................................................................................10

SCOPE 12
RESEARCH QUESTIONS 12

2 LITERATURE REVIEW........................................................................13

SAMSUNG MISSION AND VISION...................................................................................13

What are Samsung’s goals in the smartphone market, and
how does it want to achieve them?.......................................13
INTERNAL ANALYSIS 16
Overview of Samsung......................................................................16
MARKETING MIX 16
Product............................................................................................17
Promotion.......................................................................................17
Price 18
Place 18
STRATEGY ANALYSIS.......................................................................................................19
Porter's Generic Strategies..............................................................19
Lower Cost 20
Differentiation 20
Broad Target 20
Narrow Target 19
Smith’s Differentiation and Segmentation Strategies......................21
Segmentation strategy 22
Differentiation Strategy 22

3 METHODOLOGY..................................................................................25
 4 ANALYSIS OF SAMSUNG’S MARKETING STRATEGY..........................29

SWOT ANALYSIS 29
Strength 30
Weaknesses 31
Opportunities 32
Threats 33
INTRODUCTION STAGE MARKETING MIX OF SAMSUNGS SMARTPHONES..............................................................33
Product (Samsung Galaxy S series) Life Cycle........................................................................33
Product description 34
Packaging 34
Promotion 35
Price 37
Place 38
STRATEGY ANALYSIS FOR SMARTPHONES.................................................................................................................38
FINDINGS AND DISCUSSIONS 39
Marketing Mix Analysis (What are the consumer perceptions
to Samsung marketing strategies?.........................................41
Consumer perception to the product....................................................................................41
WHAT ARE THE MARKETING STRATEGIES OF SAMSUNG GALAXY DEVICES THAT MAY
HAVE CAUSED ITS GROWTH IN THE SMARTPHONE MARKET?................................46

CONCLUSION.........................................................................................48-51
Table Of Figures

Figure 1. Samsung three key strengths & Core Networks. (Samsung, 2013)
..........................................................................................................................14
Figure 2.Vision 2020 (Samsung, 2013)...........................................................15
Figure 3. Samsung and Giorgio Armani print Ad (Touch Puppet, N.D.).....20
Figure 4. Porter's Generic Strategies.............................................................22
Figure 5. Smith's Differentiation and Segmentation Curves.......................37
Figure 6. Respondent Age range....................................................................39
Figure 7. Brand of Smartphones Owned By Respondents..........................40
Figure 8. Reasons for purchasing Smartphones..........................................40
Figure 10. Characteristics of Samsung Smartphone that leads to
consumer purchasing it...................................................................................42
Figure 11. Scale on respondent purchasing power due to price................43
Figure 12. Percentage on respondents' knowledge about Samsung
Advertisement...................................................................................................45
Figure 13. Recommendation of Samsung advertisement............................45

Tables

Table 1.SWOT Analysis....................................................................................30

Abbreviation and Terms

Apps- These are program software for mobile phones. The programs are downloaded
in Smartphone's which enables the user to customize their device according to their
needs.

Smartphone- It's a mobile phone built on a mobile operating system, with advanced
computing capabilities and connectivity than a feature phone.

Phablet- This is a huge smartphone that looks like a tablet. E.g. Samsung Galaxy Note.

Flagship- The most important one out of related group or system.

Android- Operating system based on the Linux kernel and mainly designed for touch
screen smartphones and computer tablets.

iOS- Mobile operating system developed and distributed by Apple Inc.

OS- (Operating system) Collection of software that manages computer hardware

resources and provides a general service for computer programs.
E.g. Android

Ad- Advertising.
1 INTRODUCTION

Some years back, the mobile phone industry was led by Nokia and Motorola. They had
been in this position for quite some time. But things drastically changed; the story of
Samsung mobile in the mobile phone industry was one almost low profile company
with distinct products and low cost product portfolio. In less than a decade, they
managed to emerge the market leaders in the smartphone industry. So how did this
happen?

In this industry, of fierce competition, the companies have been forced to come up with
very creative technological innovation and winning marketing strategies. When iPhone
was launched by Apple Inc. in 2007, they created the Smartphone market for the
average consumers, before that the product was targeting only business users. From then
Apples' iPhone and Android phones, which are offered by Samsung, HTC and Nokia
have tried their best in competing in this ever changing high-tech market and so far
have qualified to be the big players in the Smartphone industry. In a fast growing
industry, time is everything and every company wants to possess most innovative
technology and products before its competitors.

Samsung is currently the top Smartphone manufacturer in Europe. At the end of 2012
Samsung had 32.3% share of the market according to the figures from Comscore (n.d).
Samsung overtook Nokia in April 2012 to claim the top spot, a position it had
maintained for long. Apple came second with 20.5% market share, followed by Nokia at
16.3% market share (Samsung dominates European Smartphone market, 2013). Being
the top selling Smartphone brand in Europe, Samsung has captured 45% share of the
European Smartphone market according to data from Kantar World panel Comtech
(n.d). As the worldwide Smartphone sales increased by 46.9% in 2012 and accounted
for 39.6% of total mobile sales, according to Gartner research (n.d), Samsung and
iPhone dominated the Smartphone market. Samsung mobile phone led with 98 million
units in Q3, commanding 32.5% of the global Smartphone market (Apple and Samsung
lead global Smartphone race, 2012) Samsung Galaxy
Smartphone's use Google's operating system Android. They introduced its first
Windows phone in 2012. They offer great variety of products that target a wide range of
customer segments in the market. Example is the, Galaxy Music, which are for music
lovers. It includes features like easy access to music and surrounds sound. For the
people who value innovative technology, they are offered Galaxy S3, which has also a
mini version for those who find it too big. (Samsung, Mobile devices, 2013) The prices
for these Smartphones vary greatly to meet different consumers’ needs. Some time
back, Samsung was struggling to catch up with big players like iPhone in the
Smartphone market. And now it is the leading company in the market with the addition
of being the largest technology company by revenue. With the introduction of Galaxy
S4 Smartphone, they have brought a whole new package of Smartphone with
impressive features. Samsung has always been under accusation of copying iPhone,
which got them into trouble by losing a high-profile case to Apple Inc. for imitating
Apples design. This was seen when a nine person Jury awarded Apple more than $1B,
when founded Samsung infringed Apples patent. The Jury found Samsung to have
infringed the Apple Utility, that is Design patents but not for all products. Damages
owed by Samsung was $1.05 billion (Lowensohn, 2012). Luckily for them this legal
and marketing warfare didn't slow its momentum nor dimmed its ambitions. Samsung
is focusing in increasing its annual revenue to about $400 billion in some few years
from now, which will see them in same heights with the likes of Wal-Mart Inc., who
are world's largest companies. Samsung still lags behind Apple even after its success in
the perception of most innovative company. The company leaders are now working
towards changing Samsung’s culture and strategy to be classified as an innovative
company and change its reputation of being a fast follower (O’Brien, 2013)
Scope

I chose to focus on the marketing strategy implemented by Samsung for its smartphone
products, because the purpose of marketing is to act in a way that a company delivers
products in the market that they correspond to demand. That it satisfy its customers’
needs and wants with significant and sustainable competitive advantage and profit as
noted with Samsung. Samsung’s success may be affected by factors outside the scope
of marketing strategy; these will be discussed briefly but are not included in the
analysis of this thesis. This research will consider only the marketing strategy factors,
affecting Samsung’s performance in the European market and global market at large.
This paper will discuss mainly the marketing decisions of the company in the
smartphone market not considering much the mobile market, as the mobile products is
sidelined due to changing customers’ needs. The study will concentrate on the consumer
perception regarding Samsung marketing strategy to structure the conclusion of the
studies.

Research Questions

The purpose for this research is to explore the marketing strategy of Samsung, and the
particular introduction decisions of the company when marketing its smartphone
products. The goal of this analysis is to understand whether there is evidence to
conclude that Samsung’s performance in the smartphone market has been positively
affected by the marketing strategy decisions and implementation. The research
questions are:

What are Samsung’s goals in the smartphone market, and how does it want to achieve
them?

What are consumer perceptions to Samsung marketing strategies?

What are the marketing strategies of Samsung Galaxy devices that may have caused its
growth in the smartphone market?
2 LITERATURE REVIEW

Samsung Mission and Vision

2.1.1 What are Samsung’s goals in the smartphone market, and how

does it want to achieve them?

In order to understand what Samsung wants to achieve in the smartphone market and
how, I will examine the company’s mission and vision statements. This process is
essential in understanding the underlying drivers for Samsung’s strategy decisions in the
smartphone market. The mission statement is the starting point for the strategies and
plans. (Drucker, 1973) He continues by saying the strategy formulation requires answer
to question “What our business is and what it should be.” And the answer should be
found in the mission statement. (Drucker, 1973, 57)

A company needs to answer five questions to define its mission statement. (Drucker,
1973). A company must know what kind of business they have and who their customers
are and what their customers’ value, as well as what and how the business should be. By
answering these questions, will determine the choice of strategy so that it leads to
accomplish the goals set in the mission statement. In their book “, Successful Marketing
Strategies for High-tech firms” Viardot (2004) stated that, a mission statement is
different kinds of statements of the dominant justification of an organization. The
mission is defined by the skills, market segments and the added value. E.g. what is the
business? Who are the customers? And what can the business do for the customer?
These statements are usually completed with an articulation of the company’s vision or
strategic intent, which express the aspiration of the company for a significant period of
time. They continue by urging that successful companies know their mission in
continuously changing environment, this knowledge will add them the discipline and
efficiency to focus their efforts on the primary task of correctly serving their customers
(Viardot, 2004).Samsung mission and vision is studied
this part of thesis in order to understand how Samsung is planning to achieve its goal in
the smartphone market, and know who are its customers and where it wants to be in the
smartphone market.

Figure 1. Samsung three key strengths & Core Networks. (Samsung, 2013)

“Inspire the world, create the future”, Is Samsung mission statement in its vision 2020.
With this new vision, Samsung commitment is to inspire its communities by taking
advantage of its key strength, creative solutions, innovative products and new
technology, as they continue to promote its new values for Samsung core networks. This
includes industry, partners and employees. Samsung hopes to contribute a better world
and rich experience for all, using this efforts. Also as part of its vision, Samsung has a
plan to reach $400 billion in revenue and be classified as worlds’ top five brands by
2020. So far, in its management, Samsung have established 3 strategic approaches that
include creativity, partnership and talent. Samsung dedication is to be a creative leader
in new markets and wants to become a No.1 business going forward (Samsung, 2013).
Figure 2.Vision 2020 (Samsung, 2013)

Samsung’s mission seems focused in building its brand and becoming a creative leader
in new markets. It looks like Samsung is set to change its reputation of being fast
followers, a company that succeeds through watching others pioneer new technologies
and markets and then rush in behind. This was seen when Samsung lost a high profile
case to iPhone after being accused of the company’s phones were iPhone’s rip-offs that
violated a number of patents.

In spite of its success, Samsung still lags behind Apple in terms of which is the most
innovative company. In its mission to capture the title of being creative leader in the
Smartphone market, Samsung leaders believe they must fundamentally transform the
company’s culture and strategies. By doing R&D, Samsung will be able to control its
destiny. For them to get the kind of growth they have in their mission, they have to
make the transition from being innovation follower to innovation leaders. (O’Brien,
2013)
Internal analysis

2.2.1 Overview of Samsung

Samsung was founded in 1938 by Lee-Byung-Chull and was originally called Samsung
Sanhoe. It started as a small export business within Korea that produced food and sugar.
It later joined electronic industry late 1960s. It went through a pioneer digital age from
2000-2010. This digital age was the time of revolutionary change. Samsung responded
well to this need in technology with competitive products and constant innovation by
releasing products like PDA phone, LCD TV, First Solar powered mobile phones and
created world's thinnest TV at 6.5 mm. They currently specialize in digital appliances,
media, phones, semiconductors etc. (Burge, 2012)

Marketing Mix

In order to find out which strategy Samsung used to achieve its leading position in the
smartphone market, I will take a look at its marketing mix. The marketing mix will
point out the strategic choices of the company. Marketing mix is referred to blend of
product, pricing, promotion distribution strategies made to produce a mutual satisfying
exchange with the target market (Hutchison, 2009). The marketing mix is a synonym of
4ps, which is made of the four relevant components of all product strategy. These are
Product, Promotion, Price and Place. They hold the opportunity for the company to
differentiate. (Borden, 1964). The four “P”s of product, price, promotion and place
constitute the offer that an organization offers to the business. If this offers suits well
the consumers’ needs, it should lead to sales. In addition, if it’s sufficiently managed,
these sales should add profit to the business. (McDonald, 2013) suppliers need to
understand the attributes and benefits the buyers’ value so that they customize each “P”
to their needs, and the mix of the elements that will be appealing to the buyers.
(Young, 2011).
Product

These are the goods and services that a company offers to the target market. Product is
the main thing that the marketing energy must focus. (Borden, 1964) Hutchison (2009)
defined products as goods or services designed to satisfy the customer’s need. He
continued by stating that the product in marketing refers to all activities relating to the
product development, keeping in mind that there is a market for the product, it has to be
appealing; it differentiates from other products existing in the market, and it can be
produced at an affordable competitive price.

Samsung’s smartphones evolve beyond its limitation in slim phones to embody the
perfect combination of comfort, simplicity and sophistication. All their unique
customized smartphones come with outstanding features. Products vary greatly in
Samsung’s phone department. They have a number of Galaxy smartphones, Galaxy S4
being their fourth generation. Samsung galaxy Series are Android based. These series
are recognized as follows:-

“S” (Super Smart/ Flagship) they are for flagship purposes such as their current fourth
generation galaxy S4.

“R” (Royal / Refined/ Premium) these models combine power, performance and
productivity.

“W”(Wonder/High Tier). This is for people who seek balance between style and
performance.

“Y” (Young”). This is for the young audience who are sensitive to price.

Promotion

These are all types of communications a marketer may use to give information to
different people about the product (Borden 1964). All the promotion activities are
designed to communicate with the market and thus promotes the sale of the products.
Promotion provides information that will assist customers in making a decision to
purchase a product. This includes: advertising. Public relations,
 personal selling and sales promotion. These are important tools that support positioning
within the various market a company wishes to address (McDonald, 2013). It is also
seen as informing, motivating the customers and reminding the consumers to purchase
the product (Hutchison, 2009). Promotion is an essential tool for solving organizational
problems like enhancing market position or persuading customers to behave in line with
the economic interest of the business (McDonald, 2013).

Samsung uses different promotional tools across different media platforms to promote
its smartphones. They use the television, print advertising, internet social media and
outdoor media.

Price

This is the amount for what the product is to be paid. (Borden, 1964). Hutchison (2009)
referred price as what customers will exchange for product. Among the four
components, price is determined as an important variable since it is one of the key
determinants of a product value. Price is thus one of the evaluative criteria used by
consumers, as are the cost incurred in buying and owning or using the product
(McDonald, 2013). He also noted that the price is very difficult aspect of the marketing
mix to manage. McDonald (2013) urges that to maintain the integrity of prices; the
company should implement a sound pricing strategy; this will support the company’s
overall marketing strategy and profitability. After manufacturing innovative and cost
effective phones worldwide for a long time, Samsung has been able to learn what is
required to stay on top of its industry. It has not allowed Apple Inc. to grow in markets
like Asia and developing countries like India due to its price policy. This is the results
of manufacturing wide range of products with different price range.

Place

Also known as distribution. This is to how the product finally reaches the consumer
(Borden, 1964). The distribution channels. Providing of products at a place where is
convenient for customers to access. This is how to deliver and
 distribute the product to the customer (Hutchison, 2009) From a consumer point of
view, the channel through which they purchase products provide the most direct
relationship with the supplier (McDonald, 2013). So the development of a strategy for
the channel is important for the relationship an organization has with its customer.
Many distribution systems are made up of channel intermediaries such as wholesalers
and retailers (Hutchison, 2009) According to McDonald (2013) a supplier must decide
where to focus marketing efforts. That is, on a push approach, whereby attention is
concentrated on the intermediary, to sell in more products, or on a pull approach where
the supplier emphasizes the creation of demand so that intermediaries are encouraged to
deal in that product. (McDonald, 2013).A marketer can use; intensive distribution,
selective distribution, exclusive distribution and franchising to complement the other
aspects of the marketing mix. Samsung uses variety of distribution channels. They
distribute to various telecommunication companies like mobile phone retailers, Internet
partners such as Amazon and other carriers. They also have Pop-up Samsung retail
stores.

Strategy Analysis

The thesis is set to explore two strategies models in the strategy analysis that is found
suitable for the introduction stage of a Smartphone. These are Smith's differentiation
and segmentation strategies and Porter's Generic strategies. These two strategy models
seem to suit well the strategic possibilities in the Smartphone market.

Porter's Generic Strategies

Porter's generic strategies are two by two matrices, which "juxtaposes low cost and
uniqueness with industry wide and narrow target segments" (Shaw, 2012, 43)
 Figure 3. Porter's Generic Strategies.

Lower Cost

This is focused in achieving the lowest cost possible within the industry. (Byron, 1991).
Competition is achieved by driving down costs. Porter notes that all the firms including
cost leaders have to manufacture products comparable to others in terms of product
features and quality. In other terms there is lower limits to features and benefits that
buyers are willing to accept.

Differentiation

The differentiation competitive advantage promotes a product that is perceived by the

consumer to differ on a physical or non-physical product features. According to
Dickson (1987) Differentiation in non-physical products features may be created by the
use, experience, word of mouth and promotion strategy. Physical difference is created
by the product features.

Broad Target

The broad target scope offers for the mass market. It is usually applied with low cost
competitive advantage, for big companies offering standardized products. (Shaw, 2012)
It can, however, be applied with differentiation, offering
 differentiated products to the mass market. Companies, who choose broad target,
usually use one marketing mix for their business. (Shaw, 2012)

Narrow Target

Porter’s narrow target is also referred to as market segmentation or niche scope. This is
suitable for small companies with small financial recourses. (Shaw. 2012) It can also be
used by big companies targeting multiple niche markets. It also involves dividing the
market into small markets and targeting the companies with products suitable for that
market segment.

Porter’s generic Strategies Critique

Porter’s matrix excludes cost as a differentiation strategy. This seems not realistic when
low cost price for the buyer compares to the other products on the market could also
be a differentiation strategy. (Shaw, 2012). For the business to gain competitive
advantage every component of the marketing mix should be differentiated that includes
the price.

At this point of my studies, I arrive at the conclusion that Samsung is using the
differentiation strategy with its Smartphone products. This is differentiation,
competitive advantage and broad target scope combined together. Differentiation occurs
in the product and price part of the marketing mix of Samsung smartphones.
Smartphones are differentiated from its rivals in the product part of the marketing mix
with its physical and non-physical characteristics. The differentiation is seen both
physical and non-physical. The phones designs, the possibilities of customization and
different colors offered can be classified as physical. The innovative technology and
features used in S4 can be classified as non-physical. It can be argued that Samsung is
also using segmentation strategy by taking into account their earlier Smartphone
products and current S4 devices, which are differentiated from each other in price and
features. I will continue to smith’s differentiation and segmentation strategy to find
whether I’ll come up with the same conclusion.
Smith’s Differentiation and Segmentation Strategies

Shaw (2012) noted that Porter’s generic strategies can also be derived from Smith’s
differentiation and segmentation strategies. Unlike Porter’s generic strategies, Smith
recognizes price as a differentiation strategy. Product differentiation and market
segmentation are all applicable in the framework of imperfect competition. (Smith,
1956) These strategies aim to shift or change the demand curve slope for the market
offering individual supplier.

Figure 4. Smith's Differentiation and Segmentation Curves

Segmentation strategy

Segmentation in the above right Segmentation figure focuses around demand side of the
market (Smith, 1956). Market segmentation determines target customer groups and their
needs (Hamper, 2013). This concept is apparent, in an environment that is intensely
competitive like the smartphone market; a company can succeed by creating products
for a specific segment. The company can target a specific group than going for the
whole market, by this it can achieve a higher rate of returns. This strategy recognizes
demand
 schedules when targeting the mass market or broad market. According to Smith (1956)
market segmentation, views one heterogeneous market as couple of homogeneous
market segments. It gives a better recognition of the customer’s desire and higher
satisfaction of the segment (Shaw, 2012). Using segmentation strategy, means
recognition of small market segments and targeting the products suitable for that
specific customer group.

Differentiation Strategy

In the above left differentiation figure, market differentiation aims to secure a share
comprehensive and generalized market. Smith (1956) noted that differentiation strategy
is recognized in securing a measure of control over demand for a product, through
heavy advertising. The idea in this strategy is to position the brand in the market as
different from its competition in the customers’ perspectives. Hamper (2013) defined
differentiation as making changes in the products characteristic that will attract new
customers or increase usage among existing customers. He also noted that product
differentiation is used to hold or capture more of a market that has already been defined
and penetrated as seen in the smartphone market environment. Just as Porter’s generic
strategies, the differentiation can be physical and non-physical. Physical cannot be
really based on the value as good image or logo but can be design, price and package.

Coherent to my previous analysis of Samsung using Porters matrix, I arrive at the same
conclusion that Samsung is using the differentiation strategy with its S4 flagship. The
differentiation is seen both physical and non-physical. The phones designs, the
possibilities of customization and different colors offered can be classified as physical.
The innovative technology and features used in S4 can be classified as non-physical.
The range of software features does standout with the Galaxy S4 smartphone. Samsung
has made use of its device sensors, including the new features like the usage of front and
rear camera together gives them an advantage by differentiation over its competitors. It
can be argued that Samsung also uses segmentation strategy by taking into account
their earlier galaxy series and current S4 devices, which are
differentiated from each other in price and features. The company can be seen to be
targeting two markets with these two models, higher to middle classes. The S4 is
targeted for high class and business personality since it came in high price compared to
galaxy version which are cheaper.
3 METHODOLOGY

The purpose for this study is to understand the consumer perception to the marketing
strategies used by Samsung in the smartphone market. In order to achieve this, the study
is positioned as both descriptive research and exploratory research. Descriptive
research (Saunders, 2009) objectives is to portray an accurate profile of a situation
(Robson, 2002) In this case, the study focuses on analyzing Samsung marketing strategy
that might have caused its success in the smartphone market. Exploratory research was
chosen as the instrument to collect primary data for this study. Exploratory research is
usually used to provide a better understanding of a situation. Though it is not designed
to come up with final answer or decisions. Through this research, this study is hoped to
produce hypotheses about what are the marketing strategy decisions that may have
caused the success of Samsung in the smartphone industry (Monroe, 2011). Survey
strategy is used in this study to collect data. With the survey, it is possible to collect
huge amount of data from a large population in a highly economical way (Saunders,
2009). This is was efficient for this research since it is focused in acquiring information
from random smartphone users. This is obtained by use of internet questionnaires that
will be administered via Facebook inbox and some through emails. The survey strategy
is seen as authoritative by people in general and is both comparatively easy to explain
and understand (Saunders, 2009). The survey strategy allows in collecting quantitative
data that can be analyzed quantitatively using descriptive statistics (Saunders, 2009).
The questionnaire will include all techniques of data collection in which persons are
asked to respond to the same set of questions that are established in advance. This may
include structured interviews, telephone questionnaires, and questions which are
answered without an interviewer being present. Questionnaire provides an efficient way
of acquiring data from a large sample prior quantitative analysis (Saunders, 2009). The
choice of the questionnaire was influenced by the research questions and objectives and
resources for this thesis. By using a questionnaire, I believed to obtain more primary
data, these are the information acquired through my research that can be compared to
the secondary data, and information collected
already by different authors and are referred during this thesis. Unstructured interviews
are informal and are used in exploring in depth general areas of interest (Saunders,
2009). The interviewees had the chance to talk freely about Samsung products. It is the
interviewee perception that guides the conducts of the interview when performing
unstructured interview. Usage of the unstructured interview assisted in explaining and
understand the consumer behavior through qualitative data collection. Since the study is
based on the consumer perception on Samsung marketing strategies, I thought its best to
interview the population of smartphone consumer. This will help to map up the
marketing strategy decisions made by Samsung. The target population for this survey
was in the 18 to 50 age group with at least college education, who are smartphone
owners. The intended group was a small random sample with 50 respondents. The
survey was based on formal, structured questionnaire that was emailed (Facebook
inbox) to the target group in an internet form that could be filled and the data was
collected back from respondents electronically. In order to reduce the limitations of the
quantitative study and gain more insight, the survey was designed to utilize closed and
open-ended questions together that were aimed at gathering qualitative data from the
respondents. The qualitative data can be useful to develop concepts and about the
purchase decision process. The survey was made up of parts aimed at gathering, product
attributes influencing the smartphone purchase decision, perception of product
promotion and other influencing factors that lead to customer purchasing decision. The
survey had 17 questions in total and collected data from 20 respondents. This will assist
in mapping the marketing strategy used by Samsung to reach out to its customers. The
survey was structured to know consumer perception about Samsung smartphone
marketing and thus obtaining their feedback and suggestions. An attempt was made to
understand whether Samsung smartphone has managed to cater for its consumer
demand. The sample size is very low and hence there maybe high probability of error.
The survey was constructed to study different variables such as quality of the product,
value of money, popularity of the brand, reviews from the smartphone users, etc. that
influence the purchase choices, the perceived superiority of
different smartphone brands in terms of innovation in the market and the effectiveness
of Samsung’s promotion strategy. The first part of the survey collected demographic
information such as age group and occupation (Q 1 and 2). The third and fourth
question focused on what mobile phone brand the respondent owns and what factors led
to the respondent buying decision. Collecting data on product attributes that influence
the purchase of a smartphone formed the second part of the survey (Q5 and 6)
Consumer opinion of the perceived product quality and technical specification of the
product value for the money. The next part of the survey, gathers data about consumers
perception on Samsung advertising strategy. This was done after studying product
attributes that lead to consumer perception of quality. Question 4 and 6 of the survey
ask the respondent the product qualities that lead to consumer buying decisions and
which brand one prefers between Samsung and Apple's smartphone. The following
questions ask the respondents about Samsung marketing campaigns. This section help
in understanding the consumer perception on Samsung promotion strategy. The next
section includes questions that collect data about why the respondent would purchase
Samsung smartphone due to its price range, how they view the value of Samsung
smartphone in the smartphone market. Qualitative data can be gathered from this
questions that can help better understand consumer perception on Samsung pricing
strategy and its effectiveness. The last question focuses on learning about the Samsung
smartphone users’ loyalty to the brand. The question is about further information the
respondent had about Samsung smartphone that they thought were related to the survey.
Copy of the original survey can be found in the Appendix part of this thesis.

The SWOT analysis is used to map the environment of Samsung. This method is
studied to explore the strengths, weakness, opportunities and threats for Samsung.
SWOT analysis will help understand whether Samsung has built its strategy using its
strength, working towards improving its weaknesses as it utilizes its opportunities in the
market and protects itself from the threats.
To understand which strategies are appropriate for the introduction stage of Galaxy
Smartphone, product life cycle concept was studied. The study explore two strategies
models in the strategy analysis that is found suitable for the introduction stage of a
Smartphone. These are Smith's differentiation and segmentation strategies and Porter's
Generic strategies.
 4 ANALYSIS OF SAMSUNG’S MARKETING STRATEGY

SWOT Analysis

I find it relevant to use SWOT analysis to map the environment of Samsung. This
method is the best in exploring the strengths, weakness, opportunities and threats for
Samsung. SWOT analysis will help in understanding whether Samsung has built its
strategy using its strength and protects itself from the threats in the market, and whether
it has worked to offset its weaknesses.

SWOT analysis is a way to monitor company's internal and external environment, the
overall evaluation of the strength, weaknesses, opportunities and threats, (Kotler and
Keller 2009, 101) When a company consider its strengths, and build its strategy and
utilizing them this will create a competitive advantage for them. Weaknesses and threats
are the factors that can affect the company in a negative way. By being aware of these,
Samsung can develop a strategy that will offset its weaknesses and protect them from
threats. Opportunities are used for the company to develop and grow in the market.

Strength Weaknesses
 Strong market position.  Patent infringement.

 Expanded Business portfolio.  Too low profit margin.

 Strong Top-line growth.  Less distinction with other

android smartphones.
 Innovation in design.
 Lack its own OS and Software.
 Low production cost.
 Opportunities Threats
 Wide range of phones.  Competition.

 Main manufacturers of  Availability of Substitute.

application processors.
 Rapid technology change.
 Growing mobile advertising
 Price wars.
industry.

 Great portfolio patent.

Table 1.SWOT Analysis

Strength

Samsung is focused on producing devices that can be connected with most of the
software android, OS. This gives them an edge over Apples’ devices.

Galaxy S4 is the biggest strength for Samsung’s Smartphone products. Its superior
technology allows Galaxy S4 to better meet the customers’ needs in a way the
competitors cannot imitate.

Samsung is the current market leader in the Smartphone, category accounting

35.8 % of the entire market share. It has sold a lot of phones globally compared to its
closest competitor, Apple Inc. The Galaxy S series are the main reason for gaining a
large market share over a 4 years’ time.

It can be argued that innovation can’t be classified as one of Samsung’s strength. But if
we take a look at its S4 flagship, this product stands out currently in the market and
listed as one of the best smartphones in the market (Eadicicco, 2013), with its many
innovative features that most of its big rivals lack, like feature-rich camera, useful
preloaded apps, gesture support, fast quad-core performance, removable battery and
micro SD card. Although Apples new flagship, iPhone 5S are known for its high
innovation, Samsung currently stands out with its S4 flagship in terms of innovation.
This is seen in the quality
 of the products. Comparing the two smartphones iPhone and Galaxy S4, in terms of
design and build, S4 stands out with its large screen compared to iPhone which is small.
S4 screen is big in resolution and pixel density than iPhone 5S that give it high display.
The camera on S4 is up to date the best seen on any smartphone in the current market
giving it an advantage over its competitors. This statement can be supported by the
responses collected in the survey, where one of the users mentioned Samsung
smartphone's cameras are great with good quality of pictures and fast. The software, on
the other hand, always brings huge differences. Even though Apple has a strong App
store, its iOS has different lack of customizability which is Androids major strong point.
This can be backed up with the responses collected from the survey where the
respondents listed the availability of the android application in Samsung smartphones as
easy to use and are offered free of charge. Innovation does stands as Samsung strength
under this terms. Samsung has production facilities in low cost countries, which
allows them to produce their products in low production cost. This benefits them as
they can offer a lower price and still earn higher margins.

Weaknesses

There are few differences between Samsung products and its competitors. Samsung
offers many smartphones, including Galaxy S line. These smartphones have been
criticized for being “evolutionary” as opposed to revolutionary and contain many
features that are used by many companies.

Samsung has been caught in cases of infringing Apples and some other firm’s patent,
thus destroying its reputation and made to pay handsomely for the damage.

The fact that Samsung is selling millions of mobile phones is a great achievement;
however, the major issues are that Samsung is not making a good margin on those
sales. The production of their products is highly fragmented as well, where they have
made many different types of handsets accommodate different prices points. This
might create mixed messages to
 investors who may find that streamlined products offering would better in the long term.

Samsung will be disadvantaged over its rivals if they lack strong software and OS.
Software and OS production have high profit margin, can increase integration of the
company’ products.

Opportunities

Samsung’s wide range of smartphones can attract different markets. Due to its
smartphone consistent quality, features and performance, many critics consider
Samsung the leading Android manufacturer. Most carriers use these features to
advertise for the phone and push sales.

Samsung is a leader in different forms of technology which can utilize the innovation of
new smartphones, such as using high definition technology from their television and
incorporate that into the screens.

One of Samsung innovation was the Galaxy Note. The first of Phablet (Phone/Tablet)
One of its kind. It is currently the only hybrid in the market and is rated well even on its
phone capability.

Samsung having a wide range of phones that can cater for a large market, and with the
strategic tie ups with google will help them rule electronic market.

Growing mobile advertising industry. Samsung can develop advertising platform for its
mobile devices and greatly benefit from this lucrative market.

The release of Galaxy S4 created new markets which allowed Samsung to improve their
business and diversify their portfolio.

Being the only main manufacturers of applicators processors for smartphones and
tablets, gives them a competitive advantage over their competitors. The increasing
demands for smartphones require best quality application processors that can only be
provided by Samsung.
 Great portfolio patent is another Samsung’s competitive advantage. They can only be
found by engaging in expensive R&D or through acquisition of other firms.

Threats

Apple is seen as the biggest Samsung threat especially in the launch of its new device
the budget iPhone 5C. The idea that a budget iPhone would allow Apple to sell in
emerging markets such as India would cut market shares for Samsung.

Availability of substitute products affects Samsung Galaxy ability to raise prices; this
might cause customers to switch to other products.

The significant problem by Samsung and other technology companies is the rapid
change in technology. Companies are under high pressure to release new products faster
and better than their competitors. This is always hard when a company wants to
introduce something new, innovative and successful.

Having very low gross margin in most of their products, and already selling some of
the products with significant price cuts, Samsung’s, competitor can follow price cutting
approach to and induce price wars.

Introduction Stage Marketing Mix Of Samsungs

Smartphones

Samsung is great in giving consumers what they need. This is seen by their strategy of
offering smartphones to suit all their customer’s requirements.

Product (Samsung Galaxy S series) Life Cycle

It’s approximately five months since the launch of Samsung galaxy S4 and has already
started its growth phase. It has become most well-known Samsung’s smartphone series
and publicized throughout its target, to market via successful aggressive advertisement
used by Samsung. Their advertisements have been
 seen almost everywhere in their target market. Samsung has exhausted almost all means
of advertising from TVs, Newspapers, Printable media such as billboards and bus
station walls. The knowledge of the product has already spread and most of the
customers already aware of its use. It might start its decline period probably when the
Next S series will be released provided there will be the same technological discoveries
as there have been in the past 3 years. This can be compared to Galaxy S2 and its
product life cycle.

Product description

The Galaxy S4 is the newest release in the Galaxy S series, and it’s made to connect to
2G, 3G and 4G networks. Samsung is seemed to have put all their efforts into this
product in order to realize their mission of becoming leading innovators in the
smartphone market. They have added features like Dual Shot function on its camera,
this feature, and many of it has set S4 unique selling point. The user can also work with
its file system easily making it appealing to people who are interested in technology. All
this features set them above.

Packaging

Samsung Galaxy S4 is packed in a box that looks like a wood surface. This appealing to
business people of high social class as it has a high quality look than the standard plastic
or cardboard cases. It is designed to make the user feel unique. The package can also be
recycled and be used as a pencil holder. They have been tremendous change in design of
S4 since the original version S1 was introduced. The thickness and weight have been
greatly reduced. This is great as it can fit well in pockets. They have increased the
width and its height that created a benefit of wide screen. The colors include the Black
Mist and White frost which are designed to match the users’ style, as they use the term
in their marketing of S4 to appeal fashionable and young millennial.

The flagship S which is considered a direct competitor to iPhone. Its I9000 Galaxy S
and S8500 Wave smartphones were the winners of the 2010 European EISA awards in
smartphone and social media phone categories. The
 I9000 galaxy S is known for superior-quality screen with a high connectivity, and the
S85000 Wave is for the Bada operating system with unparalleled social networking and
location based services. (All4cellular, n.d.) Most smartphone makers like iPhone tend to
concentrate on one or at most two operating system, but Samsung continues to support
different OS with its wide range of smartphone's in the market. Though the S4 adopts
Google Android as its primary OS, it also supports other competing OS like Symbian,
Microsoft Windows Phone, Linux-based LiMo and its own propriety Bada. Many
smartphone users have a need for extra storage, and Samsung smartphone offers this in
plenty compared to its competitors. HTC has 32GB and iPhone has 64GB as the
biggest while Samsung offers this storage capacity plus an extra memory card slot.
Samsung has differentiated itself in product part in terms of its storage options making
it a better option for many smartphone users.

Promotion

In its promotion component of the marketing mix, Samsung used Olympic Game
sponsorship. They used this as a platform to show new products and technology they are
offering. Publicity is the most powerful way to introduce new products and technology
to the market. They provided its wireless communication technology during the Sydney
2000 Olympic Games and was part of the mobile telecommunication equipment
category in salt Lake 2002 Olympic Winter Games. Also, in its sponsorship “in the
Golf game” contributed to its global branding. By sponsoring a great golfer like Seri
Park, just as her career was going well in the USA, they thought it would increase its
brand value and reputation. In addition to that, Samsung became the official sponsor of
the Samsung Ladies Professional Golfer Association World Championship. Movies
have also taken a major part in Samsung promotion strategies. Example, one, can come
across Samsung products especially their smartphones in many Hollywood movies and
series. Example is the “Matrix: Reloaded”. Samsung was an active participant in
developing the “Matrix Phone”.
Samsung uses aggressive methods in the promotion of their flagship smartphone Galaxy
S series. They have done this by offering unique points on their products that no other
company has done, and having an excellent brand image that comes from high quality
products. They advertise a lot, which has helped in their product image and market
share. They have made use of the internet technology very generally. They have made
various websites for their products along with contractual agreements with video
channel and social networking sites for advertising purposes. It is estimated that
Samsung marketing budget for the galaxy range of devices is one of the largest in the
world out spending companies like Apple and Microsoft. They have spent huge
amounts promoting the Galaxy devices focusing mainly on S3 and S4. (Spence E., How
much will Samsung’s Lower Marketing Spend Impact galaxy S4 sales during 2013?
2013) When S4 was launched it gave Samsung a high amount of media coverage unlike
the free airtime that is usually reserved for iPhone. This happened live in New York’s
iconic radio City Music Hall. The hour-long spectacle was broadcasted in Times
Square, and there was live stream of video at home. As well as about 462000 people
tuned in to watch the official stream on Samsung YouTube page. Samsung has recently
had much success with its commercial advertisement. One of the much talked about is
the one that had the slogan “The next big thing is already here” referring to the
Samsung Galaxy. These advertisements made fun of the “Apple fans” aspect. (Samsung
Galaxy S3 Ad, 2012) It showed that it was ridiculous to wait so long in line for a
smartphone based solely on its brand. The iPhone 4s was hyped so much by its fans, but
it was nearly a disappointment when it seemed closely related as its predecessor, the
iPhone 4. The international advertisement that they released earlier was the “tutting”
video. (Unleash Your Fingers, 2012) Tutting can be defined as dance moves made with
hands and arms to make geometric shapes that rhymes with the music. The slogan for
the tutting video is “Unleash your fingers” Another one of Samsung advertisement is
the elephant commercial where an elephant is seen playing with Galaxy Note (Elephant
Plays Galaxy Note, 2013). Samsung has gone to the extent of pairing with designer
Giorgio Armani for the Samsung S Captivate to promote its smartphone series. This ad
 shows a woman holding a Samsung smartphone next to her mouth, with the slogan that
says, “It speaks for you”. Apart from TV and magazines, Samsung is using, internet
through their websites which features all its Galaxy phones, it has a couple of
Facebook pages. Its Twitter page is just a general Samsung mobile page. It has also
played a major role through video sites such as YouTube.

Figure 5. Samsung and Giorgio Armani print Ad (Touch Puppet, N.D.)

Price

Samsung’s S4 are available as unlocked devices on some carrier websites like eBay for
$589.99, and at $199.99 with a contract extension in mobile retailers. The pricing of
Galaxy S4 is beyond most people disposable income. The price might not be a big
factor to wealthy people that Samsung seems to target with this smartphone, but it still
tops line, and it’s selling at that price. The high price mostly adds to the idea of
exclusivity of a product. If we take a look at the current launch of Apples flagship
iPhone 5C, the company places this product
 at a low price compared to its other devices in order to battle head on with Samsung’s
S4 in the smartphone market. The iPhone 5C is priced at $549. However, there has been
a decrease in price of Samsung Galaxy S4 after the announcement of the company’s
phablet Galaxy Note 3.

Place

Samsung mainly gets its products to the market through distributors. It sells its products
mainly through mobile operators and widely usage of internet by selling them online
and ship them direct to their customers.

Strategy Analysis for Smartphones

After understanding the marketing mix of products, I can continue fitting it into
marketing strategy. This study will assist me in determining whether the choice of
strategy used is correct and whether it’s implemented in the right way. The product’s
introduction stage, a business, can choose between niche strategy and penetration
strategy (Shaw, 2012). The penetration strategy should use aggressive marketing mix
such a low price, low service and high promotional expenditure (Shaw, 2012). He
further noted that the other option, which is the niche strategy, is good for small
companies that use high price and a product for a niche market. A view in the
smartphone industry at large, and putting into consideration that the price as a factor that
most consumers consider in the business, I will choose two different approaches. I
recommend that, in the introduction stage of a smartphone, a company can choose
between niche strategies, with the marketing mix suited for particular market segment.
This may include, low or high price, and can be used by big or small business. I also
find it appropriate to use the differentiation strategy instead of penetration strategy,
which is good for different business sizes and price levels. However, I recognized the
need in the smartphone market; a company needs to use the differentiation strategy with
aggressive marketing mix. This is because of the competition in the smartphone market
and strong trend of coping within the smartphone industry.
 As the strategy models available have been analyzed for the research, two models are
noted that suits best with this analysis. I have selected Porters’ Generic strategies and
Smith’s differentiation and segmentation strategies. According to my research, and by
examining the market situation, of the smartphone industry, these two strategies, fit well
my knowledge in strategic options, in the introduction stage of a smartphone in the
market. I settled with these two models since they are similar and will provide stronger
evidence the findings.

Findings and Discussions

The quantity of students dominates the research with a total of 11 students out of the 20
respondents. High number of respondents lay between the age of 26years and 40 years.

Figure 6. Respondent Age range

Mostly, they use Samsung smartphone with the percentage of 55%. Nokia comes
second with 30% and then iPhone with 15%.
Figure 7. Brand of Smartphones Owned By Respondents
Their reasons for buying a smartphone resulted with applications being highest with
68%, then price followed with 26%, and advertisement came last with 5%. Even though
the applications are the main reason for the respondents to buy a smartphone, according
to this analysis it seems that most of them don’t usually use all the applications offered.
The result of the data collected showed 26% of the respondents use all the applications
while 74% do not use the applications

Figure 8. Reasons for purchasing Smartphones

 Marketing Mix Analysis (What are the consumer perceptions to Samsung

marketing strategies?

Consumer perception to the product

Overall, the perception of the twenty respondents towards Samsung smartphone is

good. Fifteen of the twenty respondents said they would buy Samsung smartphone over
iPhone in the question on which smartphone, one prefers to buy between iPhone and
Samsung. Below are some of the reasons the respondents gave.

“I would go for the Samsung smartphones because they are more attractive, for
example, the galaxy. In addition, most of the applications on Samsung smartphones are
free, and I don't need to register my card to download them, compared to apple whose
applications are hard to access.”

“Samsung smartphones. They are easy to use, durable and uncomplicated”. “I

prefer Samsung since I’m used to them”

“I would still buy Samsung Smartphone because of its quality and the fact that the
size is big enough especially when I am checking emails and writing them”

“Samsung, availability of applications”

“Samsung Smartphone because it has good applications, takes good pictures and
quick”

“They are durable and innovative. The user interface is not my cup of tea
though”.

“I believe Samsung has the best quality, and I would buy a Samsung Smartphone
again and again. I trust the brand; it’s strong and very durable”.

“Easy to use, android operating system gives free applications”.

 Figure 9. Characteristics of Samsung Smartphone that leads to consumer
purchasing it.

It seems the introduction of Galaxy S series was the ultimate Samsung product to
compete in the smartphone market with its biggest rival Apples iPhone. They
capitalized on the flaws of their competitors, and made the model with a wider touch
screen and the best quality resolution, faster processor and was the thinnest smartphone
available in the market. It also allows the user to incorporate an external micro SD
memory and also supports a lot of multimedia formats that its competitors could not.
Just to mention a few of its outstanding characteristics that differentiate Samsung
products from its competitors. The product component of the marketing mix is well
differentiated as it offers very innovative technology and design that suits its
consumer’s needs as the data analysis has confirmed on the consumer perception about
Samsung smartphone's products. According to this findings and viewing the smartphone
market situation, this strategy choice seems to have helped in boosting Samsung’s
success in the market and was well implemented.

Consumer perception to the price

Overall, the perception of the respondents towards the price of Samsung smartphone
compared to iPhone is good. The total average percentage showed
from the respondent response; classified the pricing of Samsung smartphone as good.
Seems Samsung’s smartphones are well known for their economical pricing. Some of
the remarks on Samsung price from the respondents were;

“They are affordable”

“I would buy Samsung Smartphone because they have a bigger range of cheaper
and more expensive products”.

“Samsung Smartphone. They have a nice price and different features for everyone”.

“Samsung Smartphones have different price range that are suitable for anyone”. “They

are made for everyone”.

The charts below shows the rate at which respondents view Samsung smartphone
prices.

Figure 10. Scale on respondent purchasing power due to price.

This strategy of launching products with reasonable prices and innovative new phones
at the same time has made Samsung the successful brand it is now. This is another great
difference that seems to help Samsung achieve its leadership in terms of marketing,
the lower pricing strategy. The consumer
 perception on the price of Samsung smartphone is rated good. This strategy decision
seems to have made Samsung successful in different market segment and is well
implemented.

Consumer perception to the promotion

Overall, perception of the respondents towards the promotion of Samsung smartphone

is high. It seems Samsung has taken promotion as the most important variable to build
consumer brand awareness and to market their smartphone. According to the data
analysis the percentage of the respondents who have come across any Samsung
smartphone promotion is 95%. The following are answers the respondents gave after
being asked where they had seen any of Samsung’s advertisements: “Local TV,
Internet, Billboards, In Store, magazines, Newspapers, while using social media
(Facebook), and YouTube. 80% percent of the respondents said they could
recommend others to buy Samsung smartphone after watching the advertisement. It’s
also noted that Five percent of the respondents admit buying smartphone's products
because of the advertising. There is still coherence between the amount of people seeing
the advertisement and those who suggest it. Maybe here is also some study on how
often people accept that they buy products because of its advertising! If this is so, it
shows how effective advertisement can be in promoting Samsung products.

Some of the respondents’ opinions about Samsung’s advertisements were:

“The newest add has nice background music, it says about ruling your own life. I guess
it sends message that with their phones you can be ruler of your electronics, having apps
that you want.”

“The advertisement was easy to understand and connected with common people”.

“The way it was made, connects with people from different areas”.

“The clarity of the images, plus demonstrations on how to navigate phone”.

“Very colorful and smartly presented.”

“Products itself, they had given lots of room for that”.

“Samsung adverts are always colorful and eye catchy also because I already have a
Samsung note 2 I am always very interested in anything about it”.

Figure 11. Percentage on respondents' knowledge about Samsung

Advertisement.

Figure 12. Recommendation of Samsung advertisement

It seems Samsung has managed to achieve its ultimate goal to make galaxy series a
lifestyle. This means making the Galaxy products integrate into the life of its users.
Samsung has done this by promoting their products in a way it shows how the Galaxy
features can connect the users with their values by advertising how the smartphone
already fits in the consumer’s life and their core values. They have designed their
advertising message to maintain their loyal consumers who appreciate their smartphone
and powerful specifications. They have also managed to gain new consumers by
focusing on the multi attribute approach which features the attributes about the Galaxy
lines that fit its consumer’s lifestyle.

What are the marketing strategies of Samsung Galaxy devices

that may have caused its growth in the smartphone

market?

The concept of the marketing mix plays an important role in the success of Samsung in
the smartphone market. Out of the 4Ps, Price and Promotion mainly contributed to the
success of Samsung.

Samsung used differentiation strategy on its price component of 4Ps. Pricing strategy
has seemed to have played a major role in Samsung’s success “in the smartphone
market”. While Apple seemed focused more in innovation, Samsung mixed the cost
leadership with innovation as its competitive advantage. In the beginning of
smartphones by Apple Inc. in 2007, Smartphone was a luxurious phone afforded by
upper class segment in the market, but as time passed more people gained the desire to
have smartphones. Nokia was busy to position itself in the upper segment, Samsung
filled the gap perfectly with its Galaxy series. This made them penetrate the evolving
market of smartphones. Other competitors could not deliver such cutting edge
smartphones with low price range to compete with Samsung galaxy series. Samsung is
believed to provide products at reasonable prices to its consumers. Samsung is focused
in cost-cutting measures to maintain its price low. This helps in combating the discount
schemes of other brands. It might seem difficult to achieve this ambitious target keeping
in mind the pricing strategy of Samsung, But, Samsung believes that it takes time to
ensure the supremacy in the market share. Samsung managed to get its brand perception
right in its consumers mind as a brand that offers best technology and gives its
consumer value for their money, this resulted to its market share going up. Samsung is
aggressive in launching its new smartphone devices with the latest technology at an
economic cost globally. This is also evident with the data collected on consumer
perception to Samsung pricing strategy. The price was rated good compared to its
competitors. The review from the respondents shows how effective the pricing strategy
has been in the success of Samsung smartphone in the smartphone market.

Samsung success can also be connected with its aggressive marketing and advertising of
its products to develop the attitude, transmit information so that it gain response from
the target market and create awareness. Its initial advertisement communicated presence
of Samsung in the worldwide market and its dominance in those markets. They have
also used celebrity endorsement to create its brand awareness. They even focused in the
technological supremacy. In order to come up with promotional schemes that have
boosted its sales further leading to Samsung success. The effectiveness of this
aggressive promotion is felt in the data collection where many respondents claimed to
have come across Samsung advertisements. The communication strategy used by
Samsung is easily understood by many respondents.
CONCLUSION

For the conclusion of this research, Samsung is already seen as the current leader in the
smartphone market. This was due to its innovative products such as its flagship Galaxy
S4 and Note II, which was launched with a massive marketing spend of more than $4
billion USD in 2012. This is four times Apple’s budget. As it focuses on being an
aspirational brand to its target market of young consumers, they are seeking for this
generation Y, marketing using very high-profile partnerships with celebrities like
Giorgio Armani and LeBron James. Samsung is actually having great response from this
target market as noted earlier in the response of the data analysis, the highest number of
respondents owning Samsung smartphones are between the ages of 26 years to 40 years
who are known to be the generation Y. The Galaxy S4 is marketed as a “life companion;
that includes features like navigating without touching the screen and the built in health
monitoring. Samsung is literally evolving its brand, to not just innovate but by making it
live up to its mission on enhancing lives of its consumers.

To finish up with the strategy analysis section, I have come to my conclusion that the
marketing strategy choices Samsung makes affects its positive outcome in the
smartphone market. As we have seen earlier in my research on Samsung’s marketing
mix, the company has chosen to use well the differentiation strategy targeting a broad
market segment. The product as a component mix is differentiated well as it offers
different innovative features and design quality compared to its competitors. This can be
also seen on the research findings as respondents mention many times the availability of
applications. This proves that Samsung customers feel that they are offered innovative
solutions. The S4 device being their flagship smartphone possesses very innovative
technology that cannot be found in their rivals’ Apples iPhone 5. The price is quite high
that differentiate it from the rest of other smartphone products and positioning it in the
high end costly smartphone like iPhone. They also have a cheaper version to cater for
middle class consumers. According to
the analysis and considering the marketing situation this strategy choice of Samsung
indeed boost its positive performance in the smartphone market.

Samsung use of segmentation strategy by targeting different market segments is

working well for them too. To back up this statement is how I analyzed their products in
the marketing mix and found out how they realize every need in the market and offers
products for different customer segments. They have positioned their products well, and
they have let their customers know they are offering something for everyone. Samsung
has mastered the idea of creating products that are suitable for their chosen market
segments, and positioning itself clearly so that customers are aware they recognize their
needs. We can see this by how they advertise their products effectively in the market, by
clearly communicating how ordinary people can take advantage of the technology they
are offering. Most smartphone companies do not communicate the benefits clearly and
in a way an ordinary person can understand. Samsung communication strategy in its
promotion component of marketing mix shows exactly who they are targeting and what
they are offering to the targeted market.

Samsung’s customers are enjoying the touchscreen experience with its smartphone's
product lines. Fact that is also seen on the respondents’ opinions as they stated their
gratitude towards the size of screens and usability of the product. The slogan “Designed
for Humans” seems to have been received well by the people. The products are quite
well known for their economical pricing. This strategy of launching the product with
reasonable price range and powerful new innovative product and aggressive
promotional strategy is generating a lot buzz and success around Samsung Galaxy
series.

So, is Samsung on its way to be a market leader in creativity?

According to the respondents opinions we can say that Samsung is moving to the right
direction. Samsung gained points for the availability of applications and easy user
interface. The Android OS is also seen as a positive, innovative advantage among the
respondents in Samsung products. The S4, which is the current Samsung flagship, has
really shown how Samsung is working towards
achieving their goal for being creative leaders in this high competitive market. S4
carries amazing features that stand out from its competitors. Galaxy S4 has more power
and cutting edge features such as the face/eye tracking and gesture-based controls that
Apple flagship iPhone 5 current lack. The resolution of the 0.31 inch-thin Galaxy S4 is
higher than iPhone 5, and there is more screen real estate on the S4 display compared to
the 4inch one in iPhone.

If we compare Samsung’s S4 and Apples new iPhone 5c which both are plastic made,
something rather surprising for Apple to make a plastic smartphone from its usual more
sophisticated glass and aluminum phones we can find both smartphones comes in
different colors though 5c has many brighter colors that definitely stand out compared
to the darker toned hues that are available with Galaxy S4. Plastic isn’t the most
premium material used by smartphones nowadays, but between this two the 5C closed
design evokes the sturdier construction while the S4 has seams and hollowness
attached to it. At the end of the day, the two looks equally appealing to the eyes of the
beholder. However, if it weren’t for the bright color options with the 5C, it would have
come nothing more than bland in this comparison. Taking a look at their pricing, iPhone
5C come cheaper than Galaxy S4 with around $100 difference with a contract, it seems
as if iPhone wants to beat Samsung in their own game of differentiation strategy using
price component of its marketing mix by introducing a cheaper version of iPhone in the
market. But in the end the galaxy S4 gives a superior overall performance compared to
iPhone 5C in terms of performance and software features. S4 offers a wide range of
features in its operating system such as “Smart Scroll” and the “Air View”, just to
mention a few of the features. These are amazing features that the iPhone 5C currently
lack. With the Galaxy S4 outstanding performance, it seems Samsung is in its way to
achieve its mission of becoming leaders in innovation.

Also, by opening up a new innovation center in Menlo Park, California, planned

research and development lab in San Jose and one of its most daring undertaking, the
creation of a massive new semiconductor campus with distinctive design, Samsung is
seemed determined to compete with Apple in
becoming a creative leader in the smartphone market. This move in expanding its work
in Silicon Valley, it’s a sign of increase in its rivalry with Apple, since they are both
competing more directly for the same employees, investments and innovation.

Samsung runs a marketing innovation Fund to foster a creative culture in the business
that is designed to reward internal creativity in marketing ideas and executions. This
program enables Samsung to put together information and ideas from Samsung
subsidiaries that are aimed to change its brand knowledge. These products demonstrate
how Samsung is looking holistically at industry best practices to inform its marketing
execution. They also encourage new ideas on its enterprise, products and solutions as
they listen to and award employees with creative and innovative thinking. To add on
that they also have open innovation center and product innovation team that promotes
innovation within the business. All these sums up the reasons that Samsung is surely
on its way to be leaders in creativity.
Source material

Apple and Samsung lead global smartphone race, 2012,

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