TABLE OF CONTENTS

1 INTRODUCTION  .................................................................................... 81.1 S

COPE
  ........................................................................................... 101.2 R
ESEARCH
Q 
UESTIONS
  ......................................................................
102  LITERATURE  REVIEW  ......................................................................  112.1
 
S
AMSUNG
M
ISSION AND
V
ISION
  ...........................................................  11
2.1.1
 
What are Samsung’s goals in the smartphone market, andhow does it want to
achieve them? ................................................ 11
  2.2 I
NTERNAL ANALYSIS
  .......................................................................... 14
2.2.1
 
Overview of Samsung ........................................................... 14
  2.3 M
ARKETING
M
IX
  ............................................................................. 14
2.3.1
 
Product  ................................................................................. 15
 
2.3.2
 
Promotion ............................................................................ 15
 
2.3.3
 
Price ..................................................................................... 16
 
2.3.4
 
Place  .....................................................................................  16
  2.4 S
TRATEGY
A
NALYSIS
  ......................................................................... 17
2.4.1
 
Porter's Generic Strategies ................................................... 17 
  2.4.1.1  Lower  Cost  .....................................................................  182.4.1.2  Differentiation 
...............................................................  182.4.1.3  Broad  Target  ..............................................
....................  182.4.1.4  Narrow  Target  ................................................................  19
2.4.2
 
Smith’s Differentiation and Segmentation Strategies ........... 20 
  2.4.2.1  Segmentation  strategy  ...................................................
202.4.2.2  Differentiation  Strategy  .................................................  213
METHODOLOGY ................................................................................. 23
 
 
4  ANALYSIS  OF  SAMSUNG’S  MARKETING  STRATEGY  .........................  274.1
SWOT
 
A
NALYSIS
  ............................................................................. 27
4.1.1
 
Strength ............................................................................... 28 
 
4.1.2
 
Weaknesses  .......................................................................... 29
 
4.1.3
 
Opportunities ....................................................................... 30 
 
4.1.4
 
Threats ................................................................................. 31
  4.2 I
NTRODUCTION
S
TAGE
M
ARKETING
M
IX
O
F
S
AMSUNGS
S
MARTPHONES
  ........  31
4.2.1
 
Product (Samsung Galaxy S series) Life Cycle ........................ 31
  4.2.1.1  Product  description  ........................................................
324.2.1.2  Packaging  .......................................................................  32
4.2.2
 
Promotion ............................................................................ 33
 
4.2.3
 
Price ..................................................................................... 35
 
4.2.4
 
Place  .....................................................................................  36
  4.3 S
TRATEGY
A
NALYSIS FOR
S
MARTPHONES
  ............................................... 364.4 F
INDINGS AND
D
ISCUSSIONS
  ............................................................... 37
4.4.1
 
Marketing Mix Analysis (What are the consumer perceptionsto Samsung marketing
strategies? ................................................. 39
  4.4.1.1  Consumer  perception  to the  product  ............................. 394.5 W
HAT ARE THE MARKETING STRATEGIES OF
S
AMSUNG
G
ALAXY DEVICES THATMAY HAVE CAUSED ITS GROWTH IN THE SMARTPHONE
MARKET
?  .........................  44CONCLUSION ........................................................................................
46

 
47

 
10
1.1 Scope
I chose to focus on the marketing strategy implemented by Samsung for itssmartphone
products, because the purpose of marketing is to act in a way thata company delivers
products in the market that they correspond to demand.That it satisfy its customers’
needs and wants with significant and sustainablecompetitive advantage and profit as
noted with Samsung. Samsung’s successmay be affected by factors outside the scope
of marketing strategy; these willbe discussed briefly but are not included in the analysis
of this thesis. Thisresearch will consider only the marketing strategy factors, affecting
Samsung’sperformance in the European market and global market at large. This paper
willdiscuss mainly the marketing decisions of the company in the smartphonemarket not
considering much the mobile market, as the mobile products issidelined due to
changing customers’ needs. The study will concentrate on theconsumer perception
regarding Samsung marketing strategy to structure theconclusion of the studies.
1.2 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 itssmartphone
products. The goal of this analysis is to understand whether thereis evidence to
conclude that Samsung’s performance in the smartphone markethas been positively
affected by the marketing strategy decisions andimplementation. The research
questions are:What are Samsung’s goals in the smartphone market, and how does it
want toachieve them?What are consumer perceptions to Samsung marketing
strategies?What are the marketing strategies of Samsung Galaxy devices that may
havecaused its growth in the smartphone market?
 
11
2 LITERATURE REVIEW2.1 Samsung Mission and Vision
2.1.1 What are Samsung’s goals in the smartphone market, and howdoes it want
to achieve them?
In order to understand what Samsung wants to achieve in the smartphonemarket and
how, I will examine the company’s mission and vision statements.This process is
essential in understanding the underlying drivers for Samsung’sstrategy decisions in the
smartphone market. The mission statement is thestarting point for the strategies and
plans. (Drucker, 1973) He continues bysaying the strategy formulation requires answer
to question “What our businessis and what it should be.” And the answer should be
found in the missionstatement. (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 andwho their customers are and what their customers’
value, as well as what andhow the business should be. By answering these questions,
will determine thechoice of strategy so that it leads to accomplish the goals set in the
missionstatement. In their book “, Successful Marketing Strategies for High-tech
firms”Viardot (2004) stated that, a mission statement is different kinds of statementsof
the dominant justification of an organization. The mission is defined by theskills, market
segments and the added value. E.g. what is the business? Whoare the customers? And
what can the business do for the customer? Thesestatements are usually completed
with an articulation of the company’s vision orstrategic intent, which express the
aspiration of the company for a significantperiod of time. They continue by urging that
successful companies know theirmission in continuously changing environment, this
knowledge will add them thediscipline and efficiency to focus their efforts on the primary
task of correctlyserving their customers (Viardot, 2004).Samsung mission and vision is
studied
 
12this part of thesis in order to understand how Samsung is planning to achieve itsgoal
in the smartphone market, and know who are its customers and where itwants to be in
the smartphone market.

the analysis and considering the marketing situation this strategy choice ofSamsung
indeed boost its positive performance in the smartphone market.Samsung use of
segmentation strategy by targeting different market segmentsis working well for them
too. To back up this statement is how I analyzed theirproducts in the marketing mix and
found out how they realize every need in themarket and offers products for different
customer segments. They havepositioned their products well, and they have let their
customers know they areoffering something for everyone. Samsung has mastered the
idea of creatingproducts that are suitable for their chosen market segments, and
positioningitself clearly so that customers are aware they recognize their needs. We
cansee this by how they advertise their products effectively in the market, by
clearlycommunicating how ordinary people can take advantage of the technology
theyare offering. Most smartphone companies do not communicate the benefitsclearly
and in a way an ordinary person can understand. Samsungcommunication strategy in
its promotion component of marketing mix showsexactly who they are targeting and
what they are offering to the targeted market. “Inspire the world, create the future”, Is
Samsung mission statement in its vision2020. With this new vision, Samsung
commitment is to inspire its communitiesby taking advantage of its key strength,
creative solutions, innovative productsand new technology, as they continue to promote
its new values for Samsungcore networks. This includes industry, partners and
employees. Samsunghopes 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
revenueand 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
newmarkets and wants to become a No.1 business going forward (Samsung, 2013).
Samsung’s mission seems focused in building its brand and becoming acreative leader
in new markets. It looks like Samsung is set to change itsreputation of being fast
followers, a company that succeeds through watchingothers pioneer new technologies
and markets and then rush in behind. This wasseen when Samsung lost a high profile
case to iPhone after being accused ofthe 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 themost innovative company. In its mission to capture the title of being
creativeleader in the Smartphone market, Samsung leaders believe they
mustfundamentally 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 growththey
have in their mission, they have to make the transition from beinginnovation follower to
innovation leaders. (O’Brien, 2013).  
14
2.2 Internal analysis
2.2.1 Overview of Samsung
Samsung was founded in 1938 by Lee-Byung-Chull and was originally calledSamsung
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 ofrevolutionary 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'sthinnest TV at 6.5 mm. They currently specialize in digital
appliances, media,phones, semiconductors etc. (Burge, 2012)
2.3 Marketing Mix
In order to find out which strategy Samsung used to achieve its leading positionin the
smartphone market, I will take a look at its marketing mix. The marketingmix will point
out the strategic choices of the company. Marketing mix is referredto blend of product,
pricing, promotion distribution strategies made to produce amutual satisfying exchange
with the target market (Hutchison, 2009). Themarketing mix is a synonym of 4ps, which
is made of the four relevantcomponents of all product strategy. These are Product,
Promotion, Price andPlace. They hold the opportunity for the company to differentiate.
(Borden,1964). The four “P”s of product, price, promotion and place constitute the
offerthat an organization offers to the business. If this offers suits well theconsumers’
needs, it should lead to sales. In addition, if it’s sufficientlymanaged, 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 thatwill be appealing to the buyers. (Young, 2011)

 
Samsung’s customers are enjoying the touchscreen experience with itssmartphone's product
lines. Fact that is also seen on the respondents’ opinionsas they stated their gratitude towards
the size of screens and usability of theproduct. The slogan “Designed for Humans” seems to
have been received wellby the people. The products are quite well known for their economical
pricing.This strategy of launching the product with reasonable price range and powerfulnew
innovative product and aggressive promotional strategy is generating a lotbuzz and success
around Samsung Galaxy series.
2.3.1 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
thecustomer’s need. He continued by stating that the product in marketing refers toall
activities relating to the product development, keeping in mind that there is amarket for
the product, it has to be appealing; it differentiates from otherproducts existing in the
market, and it can be produced at an affordablecompetitive price.Samsung’s
smartphones evolve beyond its limitation in slim phones to embodythe perfect
combination of comfort, simplicity and sophistication. All their uniquecustomized
smartphones come with outstanding features. Products vary greatlyin Samsung’s phone
department. They have a number of Galaxy smartphones,Galaxy S4 being their fourth
generation. Samsung galaxy Series are Androidbased. These series are recognized as
follows:-“S” (Super Smart/ Flagship) they are for flagship purposes such as their
currentfourth generation galaxy S4.“R” (Royal / Refined/ Premium) these models
combine power, performance andproductivity.“W”(Wonder/High Tier). This is for people
who seek balance between style andperformance.“Y” (Young”). This is for the young
audience who are sensitive to price.
2.3.2 Promotion
These are all types of communications a marketer may use to give informationto
different people about the product (Borden 1964). All the promotion activitiesare
designed to communicate with the market and thus promotes the sale of theproducts.
Promotion provides information that will assist customers in making adecision to
purchase a product. This includes: advertising. Public relations,
 
16personal selling and sales promotion. These are important tools that
supportpositioning within the various market a company wishes to address
(McDonald,2013). It is also seen as informing, motivating the customers and reminding
theconsumers to purchase the product (Hutchison, 2009). Promotion is anessential tool
for solving organizational problems like enhancing market positionor persuading
customers to behave in line with the economic interest of thebusiness (McDonald,
2013).Samsung uses different promotional tools across different media platforms
topromote its smartphones. They use the television, print advertising, internetsocial
media and outdoor media.
2.3.3 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 thefour
components, price is determined as an important variable since it is one ofthe key
determinants of a product value. Price is thus one of the evaluativecriteria used by
consumers, as are the cost incurred in buying and owning orusing the product
(McDonald, 2013). He also noted that the price is very difficultaspect of the marketing
mix to manage. McDonald (2013) urges that to maintainthe integrity of prices; the
company should implement a sound pricing strategy;this will support the company’s
overall marketing strategy and profitability. Aftermanufacturing 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. Ithas not allowed Apple Inc. to grow in markets
like Asia and developingcountries like India due to its price policy. This is the results of
manufacturingwide range of products with different price range.
2.3.4 Place
Also known as distribution. This is to how the product finally reaches theconsumer
(Borden, 1964). The distribution channels. Providing of products at aplace where is
convenient for customers to access. This is how to deliver anddistribute the product to
the customer (Hutchison, 2009) From a consumer pointof view, the channel through
which they purchase products provide the mostdirect relationship with the supplier
(McDonald, 2013). So the development of astrategy for the channel is important for the
relationship an organization haswith its customer. Many distribution systems are made
up of channelintermediaries such as wholesalers and retailers (Hutchison, 2009)
According toMcDonald (2013) a supplier must decide where to focus marketing efforts.
Thatis, on a push approach, whereby attention is concentrated on the intermediary,to
sell in more products, or on a pull approach where the supplier emphasizesthe creation
of demand so that intermediaries are encouraged to deal in thatproduct. (McDonald,
2013).A marketer can use; intensive distribution, selectivedistribution, exclusive
distribution and franchising to complement the otheraspects of the marketing mix.
Samsung uses variety of distribution channels.They distribute to various
telecommunication companies like mobile phoneretailers, Internet partners such as
Amazon and other carriers. They also havePop-up Samsung retail stores.
2.4.1.3 Broad Target
The broad target scope offers for the mass market. It is usually applied with lowcost
competitive advantage, for big companies offering standardized products.(Shaw, 2012)
It can, however, be applied with differentiation, offeringdifferentiated products to the
mass market. Companies, who choose broadtarget, usually use one marketing mix
for their business. (Shaw, 2012)
2.4.1.4 Narrow Target
Porter’s narrow target is also referred to as market segmentation or nichescope. This is
suitable for small companies with small financial recourses.(Shaw. 2012) It can also be
used by big companies targeting multiple nichemarkets. It also involves dividing the
market into small markets and targetingthe companies with products suitable for that
market segment.
2.4.1.4.1 Porter’s generic Strategies Critique
Porter’s matrix excludes cost as a differentiation strategy. This seems notrealistic when
low cost price for the buyer compares to the other products onthe market could also be
a differentiation strategy. (Shaw, 2012). For thebusiness to gain competitive advantage
every component of the marketing mixshould be differentiated that includes the price.At
this point of my studies, I arrive at the conclusion that Samsung is using
thedifferentiation 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
ofSamsung smartphones. Smartphones are differentiated from its rivals in theproduct
part of the marketing mix with its physical and non-physicalcharacteristics. The
differentiation is seen both physical and non-physical. Thephones designs, the
possibilities of customization and different colors offeredcan be classified as physical.
The innovative technology and features used inS4 can be classified as non-physical. It
can be argued that Samsung is alsousing segmentation strategy by taking into account
their earlier Smartphoneproducts and current S4 devices, which are differentiated from
each other inprice and features. I will continue to smith’s differentiation and
segmentationstrategy to find whether I’ll come up with the same conclusion.
 
2.4.2.1 Segmentation strategy
Segmentation in the above right Segmentation figure focuses around demandside of the
market (Smith, 1956). Market segmentation determines targetcustomer groups and their
needs (Hamper, 2013). This concept is apparent, inan environment that is intensely
competitive like the smartphone market; acompany can succeed by creating products
for a specific segment. Thecompany can target a specific group than going for the
whole market, by this itcan achieve a higher rate of returns. This strategy recognizes
demand

2.4.2 Smith’s Differentiation and Segmentation Strategies
Shaw (2012) noted that Porter’s generic strategies can also be derived fromSmith’s
differentiation and segmentation strategies. Unlike Porter’s generic strategies, Smith
recognizes price as a differentiation strategy. Productdifferentiation and market
segmentation are all applicable in the framework ofimperfect competition. (Smith, 1956)
These strategies aim to shift or change thedemand curve slope for the market offering
individual schedules when targeting the mass market or broad market. According to
Smith(1956) market segmentation, views one heterogeneous market as couple
ofhomogeneous market segments. It gives a better recognition of the customer’sdesire
and higher satisfaction of the segment (Shaw, 2012). Usingsegmentation strategy,
means recognition of small market segments andtargeting the products suitable for that
specific customer group.  
21schedules when targeting the mass market or broad market. According to
Smith(1956) market segmentation, views one heterogeneous market as couple
ofhomogeneous market segments. It gives a better recognition of the customer’sdesire
and higher satisfaction of the segment (Shaw, 2012). Usingsegmentation strategy,
means recognition of small market segments andtargeting the products suitable for that
specific customer group.
2.4.2.2 Differentiation Strategy
In the above left differentiation figure, market differentiation aims to secure ashare
comprehensive and generalized market. Smith (1956) noted thatdifferentiation strategy
is recognized in securing a measure of control overdemand for a product, through
heavy advertising. The idea in this strategy is toposition the brand in the market as
different from its competition in thecustomers’ perspectives. Hamper (2013) defined
differentiation as makingchanges in the products characteristic that will attract new
customers orincrease usage among existing customers. He also noted that
productdifferentiation is used to hold or capture more of a market that has already
beendefined and penetrated as seen in the smartphone market environment. Just
asPorter’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
bedesign, price and package.Coherent to my previous analysis of Samsung using
Porters matrix, I arrive atthe same conclusion that Samsung is using the differentiation
strategy with itsS4 flagship. The differentiation is seen both physical and non-physical.
Thephones designs, the possibilities of customization and different colors offeredcan be
classified as physical. The innovative technology and features used inS4 can be
classified as non-physical. The range of software features doesstandout with the Galaxy
S4 smartphone. Samsung has made use of its devicesensors, including the new
features like the usage of front and rear cameratogether gives them an advantage by
differentiation over its competitors. It canbe argued that Samsung also uses
segmentation strategy by taking intoaccount their earlier galaxy series and current S4
devices, which are 22differentiated from each other in price and features. The company
can be seento 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
highprice compared to galaxy version which are cheaper.
3 METHODOLOGY
The purpose for this study is to understand the consumer perception to themarketing
strategies used by Samsung in the smartphone market. In order toachieve this, the
study is positioned as both descriptive research andexploratory research. Descriptive
research (Saunders, 2009) objectives is toportray an accurate profile of a situation
(Robson, 2002) In this case, the studyfocuses on analyzing Samsung marketing
strategy that might have caused itssuccess in the smartphone market. Exploratory
research was chosen as theinstrument to collect primary data for this study. Exploratory
research is usuallyused to provide a better understanding of a situation. Though it is not
designedto come up with final answer or decisions. Through this research, this study
ishoped to produce hypotheses about what are the marketing strategy decisionsthat
may have caused the success of Samsung in the smartphone industry(Monroe, 2011).
Survey strategy is used in this study to collect data. With thesurvey, it is possible to
collect huge amount of data from a large population in ahighly economical way
(Saunders, 2009). This is was efficient for this researchsince it is focused in acquiring
information from random smartphone users. Thisis obtained by use of internet
questionnaires that will be administered viaFacebook inbox and some through emails.
The survey strategy is seen asauthoritative by people in general and is both
comparatively easy to explain andunderstand (Saunders, 2009). The survey strategy
allows in collectingquantitative data that can be analyzed quantitatively using descriptive
statistics(Saunders, 2009). The questionnaire will include all techniques of
datacollection in which persons are asked to respond to the same set of questionsthat
are established in advance. This may include structured interviews,telephone
questionnaires, and questions which are answered without aninterviewer being present.
Questionnaire provides an efficient way of acquiringdata from a large sample prior
quantitative analysis (Saunders, 2009). Thechoice of the questionnaire was influenced
by the research questions andobjectives and resources for this thesis. By using a
questionnaire, I believed toobtain more primary data, these are the information acquired
through myresearch that can be compared to the secondary data, and information
collected
 
24already by different authors and are referred during this thesis.
Unstructuredinterviews are informal and are used in exploring in depth general areas
ofinterest (Saunders, 2009). The interviewees had the chance to talk freely
aboutSamsung products. It is the interviewee perception that guides the conducts ofthe
interview when performing unstructured interview. Usage of theunstructured interview
assisted in explaining and understand the consumerbehavior through qualitative data
collection. Since the study is based on theconsumer perception on Samsung marketing
strategies, I thought its best tointerview the population of smartphone consumer. This
will help to map up themarketing strategy decisions made by Samsung. The target
population for thissurvey was in the 18 to 50 age group with at least college education,
who aresmartphone owners. The intended group was a small random sample with
50respondents. The survey was based on formal, structured questionnaire thatwas
emailed (Facebook inbox) to the target group in an internet form that couldbe filled and
the data was collected back from respondents electronically. Inorder to reduce the
limitations of the quantitative study and gain more insight,the survey was designed to
utilize closed and open-ended questions togetherthat were aimed at gathering
qualitative data from the respondents. Thequalitative data can be useful to develop
concepts and about the purchasedecision process. The survey was made up of parts
aimed at gathering, productattributes influencing the smartphone purchase decision,
perception of productpromotion and other influencing factors that lead to customer
purchasingdecision. The survey had 17 questions in total and collected data from
20respondents. This will assist in mapping the marketing strategy used bySamsung to
reach out to its customers. The survey was structured to knowconsumer perception
about Samsung smartphone marketing and thus obtainingtheir feedback and
suggestions. An attempt was made to understand whetherSamsung smartphone has
managed to cater for its consumer demand. Thesample size is very low and hence
there maybe high probability of error. Thesurvey was constructed to study different
variables such as quality of theproduct, value of money, popularity of the brand, reviews
from the smartphoneusers, etc. that influence the purchase choices, the perceived
superiority of

 
30investors who may find that streamlined products offering would better in thelong
term.Samsung will be disadvantaged over its rivals if they lack strong software andOS.
Software and OS production have high profit margin, can increaseintegration of the
company’ products.
4.1.3 Opportunities
Samsung’s wide range of smartphones can attract different markets. Due to
itssmartphone consistent quality, features and performance, many critics
considerSamsung the leading Android manufacturer. Most carriers use these featuresto
advertise for the phone and push sales.Samsung is a leader in different forms of
technology which can utilize theinnovation of new smartphones, such as using high
definition technology fromtheir 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 israted well even on its phone
capability.Samsung having a wide range of phones that can cater for a large market,
andwith the strategic tie ups with google will help them rule electronic market.Growing
mobile advertising industry. Samsung can develop advertising platformfor its mobile
devices and greatly benefit from this lucrative market.The release of Galaxy S4 created
new markets which allowed Samsung toimprove their business and diversify their
portfolio.Being the only main manufacturers of applicators processors for
smartphonesand tablets, gives them a competitive advantage over their competitors.
Theincreasing demands for smartphones require best quality application processorsthat
can only be provided by Samsung.
 
31Great portfolio patent is another Samsung’s competitive advantage. They canonly be
found by engaging in expensive R&D or through acquisition of other firms.
4.1.4 Threats
Apple is seen as the biggest Samsung threat especially in the launch of its newdevice
the budget iPhone 5C. The idea that a budget iPhone would allow Appleto sell in
emerging markets such as India would cut market shares forSamsung.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 therapid change in technology. Companies are under high
pressure to release newproducts faster and better than their competitors. This is always
hard when acompany wants to introduce something new, innovative and
successful.Having very low gross margin in most of their products, and already
sellingsome of the products with significant price cuts, Samsung’s, competitor canfollow
price cutting approach to and induce price wars.

4.2 Introduction Stage Marketing Mix Of SamsungsSmartphones

Samsung is great in giving consumers what they need. This is seen by theirstrategy of
offering smartphones to suit all their customer’s requirements.
4.2.1 Product (Samsung Galaxy S series) Life Cycle
It’s approximately five months since the launch of Samsung galaxy S4 and hasalready
started its growth phase. It has become most well-known Samsung’ssmartphone series
and publicized throughout its target, to market via successfulaggressive advertisement
used by Samsung. Their advertisements have beenseen almost everywhere in their
target market. Samsung has exhausted almostall means of advertising from TVs,
Newspapers, Printable media such asbillboards and bus station walls. The knowledge
of the product has alreadyspread and most of the customers already aware of its use. It
might start itsdecline period probably when the Next S series will be released provided
therewill be the same technological discoveries as there have been in the past 3years.
This can be compared to Galaxy S2 and its product life cycle.
4.2.1.1 Product description
The Galaxy S4 is the newest release in the Galaxy S series, and it’s made toconnect to
2G, 3G and 4G networks. Samsung is seemed to have put all theirefforts into this
product in order to realize their mission of becoming leadinginnovators in the
smartphone market. They have added features like Dual Shotfunction on its camera,
this feature, and many of it has set S4 unique sellingpoint. The user can also work with
its file system easily making it appealing topeople who are interested in technology. All
this features set them above.
4.2.1.2 Packaging
Samsung Galaxy S4 is packed in a box that looks like a wood surface. Thisappealing to
business people of high social class as it has a high quality lookthan the standard
plastic or cardboard cases. It is designed to make the userfeel 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 versionS1 was introduced. The thickness and weight
have been greatly reduced. Thisis great as it can fit well in pockets. They have
increased the width and itsheight that created a benefit of wide screen. The colors
include the Black Mistand White frost which are designed to match the users’ style, as
they use theterm in their marketing of S4 to appeal fashionable and young
millennial.The flagship S which is considered a direct competitor to iPhone. Its
I9000Galaxy S and S8500 Wave smartphones were the winners of the 2010European
EISA awards in smartphone and social media phone categories. TheI9000 galaxy S is
known for superior-quality screen with a high connectivity, andthe S85000 Wave is for
the Bada operating system with unparalleled socialnetworking and location based
services. (All4cellular, n.d.) Most smartphonemakers like iPhone tend to concentrate on
one or at most two operating system,but Samsung continues to support different OS
with its wide range ofsmartphone's in the market. Though the S4 adopts Google
Android as itsprimary OS, it also supports other competing OS like Symbian,
MicrosoftWindows Phone, Linux-based LiMo and its own propriety Bada.
Manysmartphone users have a need for extra storage, and Samsung smartphoneoffers
this in plenty compared to its competitors. HTC has 32GB and iPhonehas 64GB as the
biggest while Samsung offers this storage capacity plus anextra memory card slot.
Samsung has differentiated itself in product part interms of its storage options making it
a better option for many smartphoneusers.
 
33I9000 galaxy S is known for superior-quality screen with a high connectivity, andthe
S85000 Wave is for the Bada operating system with unparalleled socialnetworking and
location based services. (All4cellular, n.d.) Most smartphonemakers like iPhone tend to
concentrate on one or at most two operating system,but Samsung continues to support
different OS with its wide range ofsmartphone's in the market. Though the S4
adopts Google Android as itsprimary OS, it also supports other competing OS like
Symbian, MicrosoftWindows Phone, Linux-based LiMo and its own propriety Bada.
Manysmartphone users have a need for extra storage, and Samsung smartphoneoffers
this in plenty compared to its competitors. HTC has 32GB and iPhonehas 64GB as the
biggest while Samsung offers this storage capacity plus anextra memory card slot.
Samsung has differentiated itself in product part interms of its storage options making it
a better option for many smartphoneusers.
4.2.2 Promotion
In its promotion component of the marketing mix, Samsung used OlympicGame
sponsorship. They used this as a platform to show new products andtechnology they
are offering. Publicity is the most powerful way to introducenew products and
technology to the market. They provided its wirelesscommunication technology during
the Sydney 2000 Olympic Games and waspart of the mobile telecommunication
equipment category in salt Lake 2002Olympic Winter Games. Also, in its sponsorship
“in the Golf game” contributedto its global branding. By sponsoring a great golfer like
Seri Park, just as hercareer was going well in the USA, they thought it would increase
its brand valueand reputation. In addition to that, Samsung became the official sponsor
of theSamsung Ladies Professional Golfer Association World Championship.
Movieshave also taken a major part in Samsung promotion strategies. Example,
one,can come across Samsung products especially their smartphones in
manyHollywood movies and series. Example is the “Matrix: Reloaded”. Samsung wasan
active participant in developing the “Matrix Phone”. Samsung uses aggressive methods
in the promotion of their flagshipsmartphone Galaxy S series. They have done this by
offering unique points ontheir products that no other company has done, and having an
excellent brandimage that comes from high quality products. They advertise a lot, which
hashelped in their product image and market share. They have made use of theinternet
technology very generally. They have made various websites for theirproducts along
with contractual agreements with video channel and socialnetworking sites for
advertising purposes. It is estimated that Samsungmarketing budget for the galaxy
range of devices is one of the largest in theworld out spending companies like Apple
and Microsoft. They have spent hugeamounts promoting the Galaxy devices focusing
mainly on S3 and S4. (SpenceE., How much will Samsung’s Lower Marketing Spend
Impact galaxy S4 salesduring 2013? 2013) When S4 was launched it gave Samsung a
high amount ofmedia coverage unlike the free airtime that is usually reserved for
iPhone. Thishappened live in New York’s iconic radio City Music Hall. The hour-
longspectacle was broadcasted in Times Square, and there was live stream of videoat
home. As well as about 462000 people tuned in to watch the official streamon Samsung
YouTube page. Samsung has recently had much success with itscommercial
advertisement. One of the much talked about is the one that hadthe slogan “The next
big thing is already here” referring to the Samsung Galaxy.These advertisements made
fun of the “Apple fans” aspect. (Samsung GalaxyS3 Ad, 2012) It showed that it
was ridiculous to wait so long in line for asmartphone based solely on its brand. The
iPhone 4s was hyped so much by itsfans, but it was nearly a disappointment when it
seemed closely related as itspredecessor, the iPhone 4. The international
advertisement that they releasedearlier was the “tutting” video. (Unleash Your Fingers,
2012) Tutting can bedefined as dance moves made with hands and arms to make
geometric shapesthat rhymes with the music. The slogan for the tutting video is
“Unleash yourfingers” Another one of Samsung advertisement is the elephant
commercialwhere an elephant is seen playing with Galaxy Note (Elephant Plays
GalaxyNote, 2013). Samsung has gone to the extent of pairing with designer
GiorgioArmani for the Samsung S Captivate to promote its smartphone series. This ad
 
35shows a woman holding a Samsung smartphone next to her mouth, with theslogan
that says, “It speaks for you”. Apart from TV and magazines, Samsung isusing, internet
through their websites which features all its Galaxy phones, ithas a couple of Facebook
pages. Its Twitter page is just a general Samsungmobile page. It has also played a
major role through video sites such asYouTube.
4.2.3 Price
Samsung’s S4 are available as unlocked devices on some carrier websites likeeBay 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 pricemight not be a big factor
to wealthy people that Samsung seems to target withthis smartphone, but it still tops
line, and it’s selling at that price. The high pricemostly adds to the idea of exclusivity of a
product. If we take a look at thecurrent launch of Apples flagship iPhone 5C, the
company places this product

 
4.2.4 Place
Samsung mainly gets its products to the market through distributors. It sells itsproducts
mainly through mobile operators and widely usage of internet byselling them online and
ship them direct to their customers.
 
36at a low price compared to its other devices in order to battle head on withSamsung’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 theannouncement of the
company’s phablet Galaxy Note 3.
4.3 Strategy Analysis for Smartphones
After understanding the marketing mix of products, I can continue fitting it intomarketing
strategy. This study will assist me in determining whether the choiceof strategy used is
correct and whether it’s implemented in the right way. Theproduct’s introduction stage, a
business, can choose between niche strategyand penetration strategy (Shaw, 2012).
The penetration strategy should useaggressive marketing mix such a low price, low
service and high promotionalexpenditure (Shaw, 2012). He further noted that the other
option, which is theniche strategy, is good for small companies that use high price and a
productfor a niche market. A view in the smartphone industry at large, and putting
intoconsideration that the price as a factor that most consumers consider in
thebusiness, I will choose two different approaches. I recommend that, in
theintroduction stage of a smartphone, a company can choose between nichestrategies,
with the marketing mix suited for particular market segment. Thismay include, low or
high price, and can be used by big or small business. I alsofind it appropriate to use the
differentiation strategy instead of penetrationstrategy, which is good for different
business sizes and price levels. However, Irecognized the need in the smartphone
market; a company needs to use thedifferentiation strategy with aggressive marketing
mix. This is because of thecompetition in the smartphone market and strong trend of
coping within thesmartphone industry. As the strategy models available have been
analyzed for the research, twomodels 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
thesmartphone industry, these two strategies, fit well my knowledge in strategicoptions,
in the introduction stage of a smartphone in the market. I settled withthese two models
since they are similar and will provide stronger evidence thefindings.
4.6 CONCLUSION
For the conclusion of this research, Samsung is already seen as the currentleader in the
smartphone market. This was due to its innovative products suchas its flagship Galaxy
S4 and Note II, which was launched with a massivemarketing spend of more than $4
billion USD in 2012. This is four times Apple’sbudget. As it focuses on being an
aspirational brand to its target market ofyoung consumers, they are seeking for this
generation Y, marketing using veryhigh-profile partnerships with celebrities like Giorgio
Armani and LeBron James.Samsung is actually having great response from this target
market as notedearlier in the response of the data analysis, the highest number of
respondentsowning Samsung smartphones are between the ages of 26 years to 40
yearswho are known to be the generation Y. The Galaxy S4 is marketed as a
“lifecompanion; that includes features like navigating without touching the screenand 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 itsconsume
rs.To finish up with the strategy analysis section, I have come to my conclusionthat the
marketing strategy choices Samsung makes affects its positiveoutcome in the
smartphone market. As we have seen earlier in my research onSamsung’s marketing
mix, the company has chosen to use well thedifferentiation strategy targeting a broad
market segment. The product as acomponent mix is differentiated well as it offers
different innovative features anddesign quality compared to its competitors. This can be
also seen on theresearch findings as respondents mention many times the availability
ofapplications. This proves that Samsung customers feel that they are offeredinnovative
solutions. The S4 device being their flagship smartphone possessesvery 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 smartphoneproducts and positioning it in the
high end costly smartphone like iPhone. Theyalso have a cheaper version to cater for
middle class consumers. According tothe analysis and considering the marketing
situation this strategy choice ofSamsung indeed boost its positive performance in the
smartphone market.Samsung use of segmentation strategy by targeting different market
segmentsis working well for them too. To back up this statement is how I analyzed
theirproducts in the marketing mix and found out how they realize every need in
themarket and offers products for different customer segments. They havepositioned
their products well, and they have let their customers know they areoffering something
for everyone. Samsung has mastered the idea of creatingproducts that are suitable for
their chosen market segments, and positioningitself clearly so that customers are aware
they recognize their needs. We cansee this by how they advertise their products
effectively in the market, by clearlycommunicating how ordinary people can take
advantage of the technology theyare offering. Most smartphone companies do not
communicate the benefitsclearly and in a way an ordinary person can understand.
Samsungcommunication strategy in its promotion component of marketing mix
showsexactly who they are targeting and what they are offering to the targetedmarket.
 
Samsung’s customers are enjoying the touchscreen experience with itssmartphone's
product lines. Fact that is also seen on the respondents’ opinionsas they stated their
gratitude towards the size of screens and usability of theproduct. The slogan “Designed
for Humans” seems to have been received wellby the people. The products are quite
well known for their economical pricing.This strategy of launching the product with
reasonable price range and powerfulnew innovative product and aggressive
promotional strategy is generating a lotbuzz and success around Samsung Galaxy
series.