A PROJECT REPORT ON
BRANDING STRATEGIES OF SAMSUNG MOBILE PHONES IN PARTIAL FULFILMENT OF THE REQUIREMENT OF MBA PROGRAMME OF AMITY SCHOOL OF DISTANCE LEARNING
SUBMITTED BY: ROLL NO-
UNDER THE GUIDANCE OF: MR.
AMITY SCHOOL OF DISTANCE LEARNING
NOIDA (U.P.)
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DECLARATION I, Rajat Madaan, certify that the Project Report entitled “BRANDING STRATEGIES OF SAMSUNG MOBILE PHONES” is an original one and has not been submitted to any other Institution for the fulfillment of the requirement of a course of Bachelor Programme (BBA).
Place: Date:
Roll No. A1833313052
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CERTIFICATE
This is to certify that the Project Work entitled “BRANDING STRATEGIES OF SAMSUNG MOBILE PHONES” is a record bonafide work carried out by Rajat Madaan under my supervision towards partial fulfillment for the award of the “BACHELOR’S DEGREE IN BUSINESS ADMINISTRATION”
Place: Date:
Project Guide Ms. Deepa Mavinkurve
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ACKNOWLEDGEMENT
In pursuing and completion of my MBA and other commitments, I undertook the task of completing my project on “BRANDING STRATEGIES OF SAMSUNG MOBILE PHONES”. I am fortunate in having sought and secured valuable guidance, continuous encouragement and
strong
support
at
every
stage
of
my
guide
and
supervisor
Prof. ___________ and am deeply grateful to him. I want to acknowledge the help provided by guide and friends. The precious inputs provided by them have helped in compiling this report. As well as I want to thank my friends and colleagues who helped me in this working. I express my deep-hearted thanks and gratitude to all of those who helped me in this Project.
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TABLE OF CONTENTS Content
Page No.
Declaration
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Certificate
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Acknowledgement
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Abstract
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1. 2. 3. 4. 5. 6. 7. 8.
1 4 29 30 31 54 64 69 70 71
Introduction Company Profile Objective and scope Research Methodology Literature review Findings and Analysis Recommendation Conclusion References Questionnaire
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EXECUTIVE SUMMARY
Samsung Mobile’s line-up of galaxy phones and tablets has helped the handset maker rally a significant share in a market that is largely dominated by Nokia. Samsung sold 12.6 million galaxy phones in the quarter ended March 2011, boosting its global galaxy phones market share by 7.4 percentage points from the previous year to 12.2 per cent. It now ranks fourth after Nokia, Apple and Research in Motion (RIM). Samsung is only 1.2 percentage points behind RIM and is expected to grab the number three spot in 2011 if it maintains its current growth rate. Advance orders for Samsung’s Galaxy S2, which was released in April 2011, surpassed 3 million units within a week of the launch, posing a threat even to Apple. At this rate, its sales are expected to top 14 million units in the current quarter. India is the fastest growing telecom market in the world and presents an attractive opportunity for handset makers like Samsung. As per a GFK Nielson report, the Indian mobile handset market was pegged at around 155 million units in 2010. With the country adding 20 million mobile customers every month, the mobile device market is expected to grow at over 16 per cent year-on-year. Driven by the launch of 3G services, the galaxy phones market alone is likely to grow at over 50 per cent per annum for the next two years. The Korean handset maker’s galaxy phones strategy has clicked well in the Indian handset space. The company opened its galaxy phones account in India in June 2010 with the launch of its Galaxy S and Wave models, and now has over 12 galaxy phones on almost all the popular platforms including Android, Windows and its internally developed software, Bada. Samsung had a share of 10-15 per cent in the galaxy phones market as of January 2011, and is aiming to notch it up to 40 per cent by end-2011. According to company officials, in 2011, Samsung’s mobile handset division will be driven by two key factors – touch screens and galaxy phones. In this segment, the company has also launched its tablet PCs. Thanks to the hugely positive response that the Tab has received across India, Samsung is targeting a 50 per cent share of the Indian vii
tablet market in 2011. While tablet PCs are still a niche segment in the country, if Samsung positions its products well, it could well succeed in meeting its targets. A key area of focus for Samsung will be the enterprise segment, which is showing an increased demand for such devices. In all, Samsung has over 50 handset models in India, ranging from entry-level to mid-range and high-end galaxy phones. According to a GFK Nielsen report, the company’s overall market share stands at around 23 per cent of the Indian mobile market in value terms.
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CHAPTER-1 INTRODUCTION
In late 2008, Samsung emerged as the number one player in the US cell phone market by snatching the crown from Motorola. It also emerged as the world leader in the memory chip market In 2007, Samsung spent more on R&D than IBM. The company has jumped to the second place in the number of patents granted by America’s patent office (just behind IBM). As a result of its commitment to innovation and unique design, SEA was ranked #6 in the electronics industry segment in the Fortune magazine’s “Most Admired Companies 2008”, and named as one of Fast Company’s “Fast 50 Most Innovative Companies of 2008”. Among popular Business Week rankings, SEC ranked #26 in the publication’s “Most Innovative Companies of 2008” and #21 in the “100 Best Global Brands” for 2007. SEC is also a top patent holder, ranking second overall in the U.S. in 2007. According to industry experts, the reason for these earnings over the years is Samsung’s holistic approach to develop several strategies for different regions, but guided by one unified Samsung brand image building strategy.
Samsung’s branding strategy was launched by its Chairman Kun Lee in 1996. It was a coordinated global program to make Samsung an international brand. Over the last one decade, Samsung has executed its comprehensive brand building strategy. The company’s annual investment in branding and marketing is about US$3 billion, which has been spent to increase its brand awareness around the world. For any new company, when it makes its entry into the market, there are two ways to stimulate growth: intensive advertising
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campaign, and product offerings with unique functions. Samsung recognized the potential of both. “In terms of products, Samsung introduced its leading-technology display products as well as printers in the Indian market and carried out SI meets all over the country to educate the channel community on its new products.
However, the power of brand building exercise was not lost on the company. In fact, Samsung tilted more towards advertising and brand-making strategy – creating awareness of its name by investing large amounts of money in million-dollar brand- making campaigns. In India, Samsung, in order to create its brand awareness, signed seven cricket celebrities and in doing this it aimed to cash in on the popularity of cricket in India which is considered a religion in India. Instead of just ads featuring cricketers, Samsung launched its “Team Samsung India” campaign all over India. The focus of this concept was to create patriotism through cricketers, but under the Samsung brand name the banner reads “With Team Samsung”. The campaign was a huge success and it enabled Samsung to increase awareness of its brand.
As a result, it began to make impressive growth in India. “In India, Samsung’s investment on branding has spanned our brand building and corporate initiatives, product investments and investments in the channel. In the year 2008, Samsung supported the Olympics cause in India by way of sponsorship of the Indian team, the support for select members of the Indian team. The company also organized the biggest-ever national level school quiz on Olympics for school children. Consequently, its Olympic-related advertising campaign brought the company’s brand closer to customers.
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Company overview: Samsung Group The Samsung Group is a multinational conglomerate corporation headquartered in Samsung Town, Seoul, South Korea. It is the world's largest conglomerate by revenue with an annual revenue of US $173.4 billion in 2008 and is South Korea's largest chaebol. The meaning of the Korean hanja word Samsung is "tristar" or "three stars". The Samsung Group is composed of numerous international affiliated businesses, most of them united under the Samsung brand including Samsung Electronics, the world's largest electronics company, Samsung Heavy Industries, the world's second largest shipbuilder and Samsung C&T, a major global construction company. Samsung has been the world's most popular consumer electronics brand since 2005 and is the best known South Korean brand in the world. Samsung Group accounts for more than 20% of South Korea's total exports and is the leader in many domestic industries, such as the financial, chemical, retail and entertainment industries. The company's strong influence in South Korea is visible throughout the nation, which has been referred to as the "Republic of Samsung". The Samsung Philosophy: At Samsung, they follow a simple business philosophy: to devote their talent and technology to creating superior products and services that contribute to a better global society. Every day, their people bring this philosophy to life. Their leaders search for the brightest talent from around the world, and give them the resources they need to be the best at what they do. The result is that all of their products—from memory chips that help
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businesses store vital knowledge to mobile phones that connect people across continents — have the power to enrich lives. And that’s what making a better global society all is about. Their Values They believe that living by strong values is the key to good business. At Samsung, a rigorous code of conduct and these core values are at the heart of every decision we make. People Quite simply, a company is its people. At Samsung, we’re dedicated to giving our people a wealth of opportunities to reach their full potential. Excellence Everything we do at Samsung is driven by an unyielding passion for excellence—and an unfaltering commitment to develop the best products and services on the market. Change In today’s fast-paced global economy, change is constant and innovation is critical to a company’s survival. As we have done for 70 years, we set our sights on the future, anticipating market needs and demands so we can steer our company toward long-term success.
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Samsung Telecommunication:
Samsung Telecommunications is one of five business units within Samsung Electronics, belonging to the Samsung Group, and consists of the Mobile Communications Division, Telecommunication Systems Division, Computer Division, MP3 Business Team, Mobile Solution Centre and Telecommunication R&D Centre. Telecommunication Business produces a full spectrum of products from mobiles and other mobile devices such as MP3 players and laptop computers to telecommunication network infrastructure. Headquarters is located in Suwon, South Korea.
In 2007 Samsung Telecommunication Business reported over 40% growth and became the second largest mobile device manufacturer in the world. Its market share was 14% in Q4 2007, growing up form 11.3% in Q4 2006. At the end of November 2011, Samsung sold more than 300 million mobile devices and set still in second after Nokia with 300.6 million mobile devices sold in the first three quarter of 2011. 5
Our Culture: At Samsung, we follow a simple business philosophy: to devote our talent and technology to creating superior products and services that contribute to a better global society. Every day, our people bring this philosophy to life. Our leaders search for the brightest talent from around the world and give them the resources they need to be the best at what they do.
The result is that all of our products – from memory chips that help businesses store vital knowledge to mobile phones that connect people across continents – have the power to enrich lives. That's what making a better global society is all about. We believe that living by strong values is the key to good business.Samsung encourages leadership; assisting children in low-income families by supporting educational infrastructure, supporting outstanding students and supporting programs that encourage family well-being. We also carry out programs in these areas at each of our eight volunteer centers.
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Corporate Responsibility: Samsung recognizes that your choice of workplace is affected by more than benefits and compensation.
Many in the workforce want to work for an employer who will value them and help them reach their fullest potential, while preserving work-life balance. Others are also concerned by what their employer is doing to help the environment and those in need. Samsung's commitment to sustainability and good corporate citizenship is strong. Here are some examples of how Samsung Mobile is not just a great place to work, but how we're also doing our part and giving bac Samsung Galaxy Smartphones: Intuitive, stylish and simple to use, the Samsung Galaxy smartphone delivers a personalized, seamless mobile experience that helps your day run smoothly—whether it's time for work, family or play.
List of Samsung Galaxy Series: Now in India Samsung is the King of Mobiles. Galaxy series mobiles are very hot these days because of cool design, features, large display and attractive prices. Also these
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comes with Most powerful and popular android Operating system. Samsung improving galaxy series by adding more mobiles in the galaxy brigade.Samsung give the names to their galxy series mobile phones such as Galaxy y,Galaxy Ace,Galaxy Grand etc..
Figure No.-5:Samsung Galaxy Phones The Galaxy phones has enhanced features that both you and your contacts will enjoy. It’s designed to make sharing easy and more direct so your friends and family can experience every moment with you, regardless of your location.
Connect through touch: With S Beam, just place two Galaxy S III phones back-to-back and you can transfer photos, videos, documents and more. In just three minutes you can 8
successfully share a 1GB video file—it's fast, easy, and you don't even need a Wi-Fi® or cellular signal. Send pictures in a flash: Thanks to Buddy Photo Share, the Galaxy S III recognizes the faces of your friends, so it can share photos with them right away. And with Share Shot,
Take multitasking to a whole new level The Samsung Galaxy S® III runs on Android™ 4.0 operating system Built with a 1.5GHz dual-core processor, you can play a video on the go, while simultaneously running other tasks, eliminating the need to close and restart videos when checking new emails or surfing the Web. You can even share content to other devices faster with S Beam. It's an intuitive smartphone that works the way you think and quickly displays the information
DESIGN See to believe Get the big-screen experience in the palm of your hand. With a 4.8" HD Super AMOLED display, the Galaxy S III offers a large and crisp picture. The Samsung screen even enhances to HD and 16:9 wider viewing angles that are perfect for e-books, games, video, and more. Plus with eye-tracking technology you can keep your screen . CAMERA Snapshot satisfaction Capture amazing pictures with zero shutter lag using the 8MP camera and Best Photo option. Using the burst shot option, the camera takes 3.3 shots per second.
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OBJECTIVE AND SCOPE OF THE STUDY Objectives: The aim of this study is to identify the branding strategies of Samsung Mobile Phones for boosting up the sales. The research objectives are:
To study the different branding strategies adopted by competitors in the Galaxy series of the smart phone industry
To study the entry and profile of the company in India
To explore the customer choices with reference to Samsung mobile phones (Galaxy Series)
Scope: It has been suggested that loyalty includes some degree of pre-dispositional commitment toward a brand. Brand loyalty is viewed as multidimensional construct. It is determined by several distinct psychological processes and it entails multivariate measurements. Customers' perceived value, brand trust, customers' satisfaction, repeat purchase behavior, and commitment are found to be the key influencing factors of brand loyalty. Commitment and repeated purchase behavior are considered as necessary conditions for brand loyalty followed by perceived value, satisfaction, and brand trust. Fred Reichheld one of the most influential writers on brand loyalty, claimed that enhancing customer loyalty could have dramatic effects on profitability. Among the benefits from brand loyalty — specifically, longer tenure or staying as a customer for longer — was said to be lower sensitivity to price. This claim had not been empirically tested until recently. Recent research found evidence that longer-term customers were indeed less sensitive to price increases. This work will help us to better understand the concept of branding and how it is effective for Samsung mobile phones.
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CHAPTER-2 RESEARCH METHODOLOGY
Research has a special significance in solving various operational and planning problems of business and industry. Research methodology is a systematic way to solve the research problem. The Research that has been used is primary and secondary in this report.
DATA COLLECTION PRIMARY DATA: Primary data will be collected through questionnaire method. We will take the interview of users of Samsung mobiles
SAMPLE SIZE 100 people were questioned….
SECONDARY DATA: This data will be collected through magazines, journals, newspapers and articles
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The Success Secret: Being ahead of the competition is the mantra of Samsung’s success. In business, it always pays to reduce the lead-time, as being late in business means business is over, which happened in the case of many big brands and competitors. For instance, the most advanced mobile phone has only two-mega pixel camera, but Samsung offered 5-mg phone in 2005. Samsung is offering new products lower than the market price. Yet, the company has been able to retain its standard and quality. However, part of this success was also Samsung’s openness. The company opened up and recruited employees from a global pool of talent bringing in talent from various countries, making these people work together at one table designing the best product. This trend boosted the company’s perception and made it a global brand among the consumers. The strategy paid off and in the past five years, it has achieved the biggest gain among major brands, even surpassing Sony. Samsung’s approach is holistic reaching the world customer. It created its branding in multiple ways, ranging from traditional adds to billboards, racing, Olympic games, cricket matches, marathons. In short, wherever it saw the crowd, it communicated Samsung message by presenting itself as a leader of innovation with affordable price. In the year 2009, Samsung India is looking at strengthening both the product portfolio and the channel. The company will be tapping our existing brand shops as well as Large Format retail stores for our IT products.” We have just launched our comprehensive range of Notebook PCs and the ‘Live 360’ campaign for Notebook PCs. In the year 2009, we will be expanding our portfolio in Notebook PCs, Display products as well as our Printer range,” says Mr. Yadav. Samsung India will be continuing with its channel expansion in
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the year 2009 as well. We will be strengthening the corporate sales business based on our enhanced lineup. “Market will see the introduction of new technologies in the marketplace and some of the trends that we saw in the year 2008 will get more pronounced. Thus, I expect the LCD Monitor category to dominate the market completely, even as the transition from Desk Top PCs to Notebook PCs and Netbooks will continue. The Widescreen format will continue to dominate in LCD monitors. Similarly, the 17” and 19” monitors will continue to dominate in terms of screen sizes. With the introduction of new technology and convergence products, the Large Format Retail will continue to be a significant channel for selling IT products.
Successful branding is all about establishing a long-term vision and crafting the company’s operations to meet that objective.’ In 1993, as a first step in its globalization drive, Samsung acquired a new corporate identity. The company changed its logo and that of the group. In the new logo, the words “Samsung Electronics” were written in white color on a blue color background to represent stability, reliability and warmth. The words” “Samsung Electronics” was written in English so that it would be easy to read and remember worldwide. The logo was shaped elliptical representing a moving world”– symbolizing advancement and change, it was this sort of huge investment where millions saw the Samsung’s message. Their brand remained in the forefront of millions of people giving them an edge over its competitors. It is no surprise that Samsung’s brand building strategy overtook its competitors in less than the expected time.
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Branding in the World of Samsung Galaxys: The word “Colossus” is defined as something giant, abnormally large, or powerful. This is probably why the first computer created was given this title. The Colossus, built in the 1940’s, was the first electronic computer made. It took up nearly 1800 square feet of room and weighed in at more than one ton. Since the Colossus, we have seen the dimensions of our computers drastically reduce in size, from modern PCs that fit comfortably on a small desk, to laptops that are portable and can easily be carried in a shoulder bag. Recently, the miniature Samsung Galaxy has replaced many PCs and laptops through its pocket-sized convenience and at-yourfingertips accessibility to the internet. Recent surveys show that nearly half of the people in the United States use a Samsung Galaxy while one in five people access the internet daily through mobile web browsers. How can we tailor our branding towards consumers who have adopted this new, easily accessible tool? Branding to Samsung Galaxy Users: There are some websites that have been designed so effectively that they catch our attention as soon as we open the page, and there are others that we may give very little attention to due to how bland or dull they seem at first glance. When viewing a webpage on a smaller screen like that of a Samsung Galaxy, the design and layout of the page is crucial. The visitor’s interest needs to be caught immediately within that cramped eight square inch screen so they will give the site a chance and look into it further. By using easy to read fonts, and dressing up a page with colors and pictures, short paragraphs, and catchy titles, we can be certain that visitors don’t get bored of a website too quickly. As a
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result, they may take the time to look into it further, exploring more and seeking more information available on the website. This brings us to the next important accommodation needed for a Samsung Galaxy browser. Navigation of a site can be the key that makes or breaks the chances of a page visitor continuing to browse the website or getting frustrated and leaving. When a page adjusts to fit a smaller screen, it limits the amount of zooming in and out that can make navigation difficult and nearly impossible to have patience with. Some sites tailor to the Samsung Galaxy user and automatically open a mobile view rather than the full site view for larger computers. Here, only the most important information should be viewed by the consumer. This means the remaining information that is not immediately needed must be omitted. However, text and most pictures comfortably format to the smaller screen with minimal or no resizing needed. By having the page adapt to the size of the screen used, you can be assured that the website guest will not lose patience with navigation and may step into the full view to research the site further. Don’t Forget the Apps! Along with easy web browsing, Samsung Galaxys are created for various apps and use in the social networking world. Some phones come with apps already installed like that of Facebook and Twitter. Recent studies show that nearly half of adults and a larger percentage of teens and young adults use these social networks. Within that number, the percentage of those using mobile devices is greater than those using desktop computers. If we increase our branding on social network sites and related apps that are readily available to this growing number of Samsung Galaxy users, we will tremendously increase the amount of people viewing our website. Technology is getting smarter, faster
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and smaller. Having a website that grows with the times is just as important as simply owning a website once was when web browsing first began. A couple of decades ago, companies that led the way through branching out online have been shown to have grown more than companies that didn’t make use of the new technology. In present day, those that fail to reach out to the mobile world will also miss a great opportunity. If we properly set up a web page so that it’s easy to navigate and small screen friendly, it will accommodate the growing number of Samsung Galaxy users. By designing your website accordingly for the Samsung Galaxy user, you will have greater confidence that your company will continue to prosper in these new and changing times.
Market research firm IDC predicts that the Samsung Galaxy market will grow 49.2% in 2011, due to an increasing number of users who will replace feature phones with Samsung Galaxys. The report goes hand in hand with a recent study, also by IDC, which predicts that the number of mobile app downloads will grow from 10.9 billion in 2010 to 76.9 billion in 2014.
While the growth of the Samsung Galaxy market is fairly easy to predict, IDC also makes predictions about the market share of Samsung Galaxy platforms in 2015, and we’re far more skeptical about those. Android, IDC predicts, will have 45.4% market share by that time, while BlackBerry will be at 13.7% and iOS at 15.3%. Symbian, recently dropped from Samsung Galaxy’s long-term plans, is predicted to drop to 0.2%, and Windows Phone 7 is predicted to grab an impressive 20.9% market share, which would propel it into second place by a large margin. It’s definitely possible, but even though Microsoft’s
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partnership with Samsung Galaxy is a strong foundation for success, we can easily see bumps in the road (such as Samsung Galaxy’s integration of WP7 going slower than planned) that could impede such stellar growth for WP7. What do you think about these predictions by IDC? Can Windows Phone 7 reach second place on the market by 2015? Please, share your opinions in the comments.
Sales of Samsung Galaxys will increase in 2012:
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Samsung Galaxys went from being a luxury and became an everyday tool for executives, students, employees and even for those who do not need even 50% of the capacity of these magnificent examples phones. Thus, thanks to overcrowding and the entry into force of Google’s Android operating system, 27% of cell phones on the market in 2011 will be Samsung Galaxys.
The study by Telecom & Media, says it will sell at least 342 million such phones next year, and will be effective – inter alia – by overcrowding and good reception have been had on the audience for its low price and almost no competition they have against traditional phones do not pose a challenge not as economically practical nor necessary. Mobile Internet service will be other great deals take a lot more momentum than it has so far shown, so the same study finds that it would be prudent for operators associated with brands like Google and Facebook to the mobile business in Internet.
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When asked what consumers do with Samsung Galaxys? The study found that most prefer them for their applications such as games, music, sports, social networks and also by the ease of access to information that is available on the Internet. Although the mobile advertising market is not as extensive, with the rise of Samsung Galaxys is expected to grow exponentially, and these are the terminals where they can leverage the best technology available at the time of establishing a strategy for presentation at the mobile browsing. Interestingly consumers do not see it as “intrusive” a notice when it is offering any discounts, so that mobile branding will need to adjust some things and build on the momentum of technology, as well as the tendency for users.
We have seen that the mobile industry is on a fast-track, with massive growth in mobile branding, advertising and paid-content for users. But what is really leading this growth is the increase in quality devices and fast, affordable data. While Samsung Galaxy ownership was once just a business tool, more consumers than ever are using Samsung Galaxys in their everyday lives, in the past year alone, the total number of Samsung Galaxy subscribers increased 72% quarter-over-quarter, growing from 15 million subscribers in Q2 2008 to 26 million in Q2 2009. While the penetration level of Samsung Galaxy users is still fairly low – nearly 17% in Q2 2009 – they make up half of the mobile Web audience.
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Samsung Galaxy Gender Gap Continues: With the continued expansion of Samsung Galaxy ownership in the U.S. and the availability of more affordable devices, the market is opening up to a wider range of consumers. However, we continue to see similar demographic profiles for Samsung Galaxy owners as we did a year ago. While Samsung Galaxy usage is shifting from purely business use to both personal and business use, owners are still more than two times as likely to own a Samsung Galaxy for business usage only. Samsung Galaxy owners continue to be predominantly male, are 65% more likely than the average mobile subscriber to be between the ages of 25 and 34, and nearly two times as likely to make more than $100,000 a year.
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Samsung Galaxy: Branding Strategy The most important factor is the branding strategy deployed by giants Samsung Galaxys companies, to attract and retain their clients, building long-life relationships with customers. Apple does not pursue the small business or Samsung Galaxy market, it is just too small. The only market big enough is the mainstream market, and thus Apple is aiming the iPhone at the millions of iPod-toting technophobes. The Mac customers who seek tech support every time their precious Mac will have a small problem is the target for the iPhone; provide them with a cool status symbol that they can use every day to take calls and they will be pleased. At the other end of the table, to make the BlackBerry more appealing to consumers, RIM has begun releasing devices that offer more than just wireless e-mail, including features 21
such as a media player, camera, overall sleeker design, resulting in an enthusiastic response from consumers that ended up quickly snapping these new BlackBerry devices. One way in which RIM has been trying to be more competitive with Apple is with its offering of applications. Blackberry's App World has doubled its options to around 2,000 applications, however, still far behind the 50,000 that Apple has, but constantly gaining more confidence. As of July 2009, these applications are available in the U.S., U.K., Canada, Italy, France, Germany, and Spain and soon to be offered in Brazil and India. HTC has recently implemented a new "global advertising campaign that is based on HTC's 'Quietly Brilliant' brand positioning. As HTC's first global advertising campaign, the YOU campaign is being rolled out across 20 countries and features the tagline, 'You don't need to get a phone. You need a phone that gets you.' This represents HTC's commitment to focus on people (you), making a big propaganda within the city centres, with a mix of traditional advertising and guerrilla advertising techniques, such as television, fliers, posters on buses and stickers on urban stairways. HTC has truly blanketed the market with these 60-second ads, focusing their attention on quantity rather than a whole storyline portraying the phone throughout a journey. In addition, more ads of shorter duration increase the likelihood of someone seeing at least one of them. This, in turn will build some Brand Recognition for "HTC," and thus a lack of specific phone detail is understandable. Most people carry a various devices manufactured by the company, such as Fuze or Cingular 8125, yet when they hear something mentioned about their phone being an HTC, the response is completely blank. Therefore, it seems it would be a good strategy for HTC to build some name recognition; 22
however, the trick will be in transferring that to individual models / carriers, in comparison with Apple, which has only 2 models to consider. On the pro side, BlackBerry's target market is premium users, and there are a lot of things you can do with apps designed for BlackBerry, such as enrich productivity. On the con side, there is not the critical mass with the general consumer compared to the iPhone. However, in order to be really successful and the real market leader, you have to play in both consumer and enterprise markets. People use Samsung Galaxys for both pleasure and business, and this holds true from teens to adults. Riza Luiza has been writing articles online for nearly 1years now. Not only does this author specializes in life insurance, finance and geography, you can also check out his latest website on snowboards packages which reviews and lists what to choose for winter fun, adventure and passion. One of the most important branding strategies for iPhone is intended market for which it is made. In the past years, highly advanced technological gadgets were a reserve of the young who are still exploring the world. However, the newly innovated iPhone contains diverse features which are useful to the younger generation as well as those who are already settled. Similarly, the aging have found solace in the gadget since they are able to conduct video calling with their relatives who are miles away without having to travel. The other element involves the many features which are contained in the iPhone which are not present in other competitive brands.
These features increase the efficiency of the product such that individuals who are looking for products which will meet all their needs are more likely to purchase. Business
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people find such products being equally essential especially those who indulge in a lot of conference calling, multi-tasking and virtual businesses. The other branding strategy element is increased consumption of technologically enhanced devices which are more efficient and applicable in various day-to-day activities. This element may be a weakness as well as strength since individuals seeking equally modified devices which are low priced may end up purchasing fake iPhones which are counterfeited. Availability of the iPhones in the various country outlets as well as the online store gives Apple Inc. a better opportunity of reaping more sales due to increased coverage of their products as well as increased clientele. The online sales could result into high proceeds as in the recent past more people are making their transactions via the internet due to limited time as well as availability of more information concerning the product. Although most electronic gadgets which are marketed by various companies are fitted with moisture sensors, the location of the sensor in the iPhone has presented a weakness in the market of this product. Most consumers will argue that detection of moisture from a distance is not the best situation for the iPhones.
This increases the chances of damage due to the vicinity of the sensor. Thus, the element of making the gadget oversensitive reduces its branding ability. The compatibility of the iPhone with the App store created bigger advantage for users who could download any form of documents and files from either location. This feature increased the rate at which internet connections and downloads were obtained.
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Samsung Galaxy Swot Analysis: Strengths:
Innovative product- The touch screen is patented and very unique compared to all other mobile products. It also has features from all other mobile products combined into the Samsung Galaxy.
Compatible- The phone is very compatible and versatile and is able to work well with other parent products of Apple such as the iTunes and the Mac Computer and the Mac T. It is also compatible with many other software products and there is no limit into how far the upgrading can go. The new features that are compatible with Apple are limitless.
Easy To Use- The brand new innovative touch is state of the art technology that is very easy to use. The touch features on the Samsung Galaxy is different than other touch products and is an upgrade compared to other products.
Brand Image- Apple is a well known brand and is known for its other innovative products such as the iPod and the Mac Computer.
Good Price- for $350 it has all of the combined smart phones into the Samsung Galaxy plus it has all the latest features and is more easy and accessible than other smart phones out there. It is a good value for the current price they are offering.
Weaknesses:
Corporate Brand Image- The apple brand is not as receptive towards business people. It does not have a strong reputation such as the BlackBerry does.
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Price Variety- The Samsung Galaxy only has one set price and does not vary for other consumers in the market
Using Touch Features- Long usage of the Samsung Galaxy has known to have caused “gorilla arm” which results in uncomfortable mobility while using the Samsung Galaxy
Opportunities:
Increase in Demand and Expansion into New Target Segment- Apple will continue to target various markets that enjoy the use of an all in one easy accessible phone. As time passes, Apple will convert the iPod consumers into upgrading into the Samsung Galaxy
Upgrading- New innovative technology can always be added to the software and the new features will continue to update into the latest technology. New features will also be upgradeable and the cycle will continue
Partnership- Apple can combine with other mobile phone companies and flood the market with Samsung Galaxys. This will reduce the costs of marketing and will increase revenue with the company.
Threats:
Competition- Increased competition continues to flood the market. The amount of smart phones on the market is higher because they are easier to make than they ever were before. More companies are entering into the market and are working around the patents that Apple currently has.
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Difficulty Expanding into Asian Market- There is not much interest for Samsung Galaxys in the Asian market. Many smart phones are already used and prefer other products instead.
RIM has a strong customer base from professionals, whereas Apple attracts many average users. RIM has a good reputation in the smart phone business. Apple is new to the smart phone business, but with its strong electronic history and reputation, its sales and market share of the smart phone business are growing rapidly. Apple tends to target its phones to people who seek for media. Also, Apple has stronger foundation and capital to support its after-sale services. The prices for the new Blackberry and new Samsung Galaxys are very close, but Apple is willing to drop Samsung Galaxys’ price in order to increase its sale and market domination. If RIM follows, its profit will reduce, and it does not have as many other products as Apple to compensate the loss of profit. Target Market in India for Samsung Galaxy: Students
Email is helpful, but they also like phone & music in one device
Teenagers want newest & coolest.
Video Game players
Applications of video games on the go
Apple brand loyal customers Not as much targeted for business professionals
No office options
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Cannot download third party programs
Rogers & Fido customers
Mostly
consumer
based
as
shown
by
looks,
available
application
and
marketing/advertising Marketing Mix for Samsung Galaxy: When the marketing mix – price, product, place, promotion and by extension people, process and physical evidence – is considered against the current level of market concentration ratios there are a lot of opportunities on the marketing front available to the average mobile telephone service provider in Trinidad and Tobago (Freeman, 2006). However the existing brand loyalties might curtail the degree of freedom enjoyed by each seller because super market chains stock a variety of products with identical labels from different sellers. This development has a very significant impact on the organization’s marketing goals too. A conceptual framework for a uniquely propositioned marketing strategy depends on the viability and logicality of these outcomes. Assuming that a good marketing plan once put in place would take care of the 7 Ps above, there is very little else to accomplish in order to maintain a good cash flow and ensure positive and constant returns over the life cycle of each product – launch, growth, maturity and decline. Price of the product is essentially a reference to the larger context of the company’s pricing strategy and especially in the current competitive environment there is very little liberty if any available to the firm to adopt a pricing policy of its choice. In fact market penetration would seem to be the most ideal pricing strategy for Galaxy phone. Product characteristics include those tangible and intangible benefits for the customer. A typical
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cross section of youth and professionals would be inclined to buy Galaxy phone since its promotion strategy places emphasis on Galaxy phone’s super brand image. In other words the seventh P “Physical evidence” of the product carries much weight as in sensory marketing. Place again imposes some limitations on the firm’s ability to exploit broader marketing principles. Market segmentation strategy of SAMSUNG GALAXY is exclusively intended for the creation of brand dependency and therefore there is a drawback associated with its geography. For example SAMSUNG GALAXY which markets Galaxy phone, has a huge network of stores in almost every nook and corner in Trinidad and Tobago. Along with a proper promotion policy, an ideal people-oriented marketing strategy ought to be put in place. Customer-centric product promotion is nothing new in the industry though product promotion campaigns are less likely to be determined by any other factors than the strengths of the product. While the emphasis might be placed on the overall promotion strategy to attract as many potential customers as possible there won’t be any strategic advantage in the long term if the company concentrates too much on its strengths only. This is a strategic shortcoming in the continual development process. Product- SAMSUNG GALAXY has the capacity to adopt both wireless and fiber optic networks that enable it to deliver multimedia, voice and data services to its customers. Galaxy phone has been in great demand ever since it was launched. Its software is highly sophisticated. Its service delivery platform consists of a user friendly interface and the latest features. SAMSUNG GALAXY is constantly in the process of improving and improvising its existing products to suit the needs of its customers and to stay ahead of its
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competitors. Galaxy phone sets are of high quality thus customers are enticed to buy them even by paying a higher price. Price- From a price point of view the download of the interface is free of charge. Even though the profit margin for each song was only about 10%, the iTunes aim is to be the center of a user’s digital world. Promotion- Most of the retailers are more than glad to promote the idea of a more powerful and versatile Galaxy phone because its super brand image is compatible with their brand image. Without restricting themselves to advertising on the television and radio, a mobile based marketing drive such as sending of messages can be used. Viral marketing techniques such as the sending of multiple e-mails could be used. Viral marketing techniques are more cost effective than for example advertising on the television or radio. Place- Since Galaxy phone phones are available online they are available anywhere and anytime. Distribution cost can be curtailed. People- SAMSUNG GALAXY has to establish meaningful people’s relations such as with customers, employees and others. Process- It refers to paraphernalia that assist in the marketing efforts of the products. Callers on mobiles might text each other and become effective promoters. Physical environment- SAMSUNG GALAXY has a highly substantial physical environment related set of services, including technological superiority, for example on
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the mobile phone digital music file sharing was never so sophisticated before the launch of digital mobile telephony services.
Price discrimination on the basis of market segment
Number of factors would have to be considered by the firm in determining the market price for each segment. For example the firm had a virtually monopoly position in Trinidad and Tobago in the past though its ability to act as the ‘price maker’ was limited by a number of factors such as the ease with which competitors can enter the market and supply constraints. The absence of monopoly power of SAMSUNG is there though it cannot be taken for granted in deciding on the price. Thus the price determination process gives less freedom to the supplier. For instance the price is determined in the mobile
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telephony market by the possibility of other firms responding to the unfolding market developments there. When adequate infrastructure develops in the market newcomers would have a tendency to enter with ease and not to leave even in the face of rising costs. Further supply constraints as in the case of natural monopolies like power supply can be taken into consideration in determining the price. As the above diagram illustrates the supplier here acts like a monopolist because of his capacity and capability in price discriminating behavior. He sells the quantity Q at the price of P2 and makes a monopoly profit equal to the amount shown by the rectangle P1, P2, X and Y. This surplus profit would not last long if competitors are able to enter the market with ease. He maximizes profits at the point E where Marginal Cost (MC) is equal to Marginal Revenue (MR). Thus he is a ‘price maker’. His Average Cost (AC) and Average Revenue (AR) remain at a point higher than the equilibrium point when he maximizes profits. In fact he can sell to the right of the point E but he doesn’t. However it’s obvious that depending on the nature of demand for BlackBerry the firm is able to price discriminate and therefore at least in the short run competitors are less likely to enter the market. Thus at least in the short run this firm acts as a ‘price maker’ and not a ‘price taker’ as in perfect competition.
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CHAPTER-3 DATA PRESENTATION AND ANALYSIS Q1. What all brands do you sell?
35% respondents replied that they sell Samsung brand and 25% respondents replied that they sell blackberry brand
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Q2. Among all brands which one is more demanding in the market?
35% respondents replied that Samsung brand is more demanding but 31% respondents replied that blackberry brand is more demanding
Q3. Which brand is good in quality in comparison with others?
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32% respondents replied that Samsung brand is good in quality but 31% respondents replied that blackberry brand is good in quality Q4. Which brand is good in case of its availability?
34% respondents replied that Samsung brand is good in case of its availability but 25% respondents replied that blackberry brand is good in case of its availability Q5. Which brand is good in case of providing the services on time?
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32% respondents replied that Samsung brand is good in case of providing the services on time but 28% respondents replied that blackberry brand is good in case of providing the services on Q6. Which brand has a reasonable pricing strategy?
39% respondents replied that Samsung brand has a reasonable pricing strategy but 26% respondents replied that blackberry brand has a reasonable pricing strategy Q7. Which brand do you sell more than others?
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29% respondents replied that they sell Samsung brand more than others but 24% respondents replied that they sell Blackberry brand more than other Q8. Which brand is more profitable for you?
33% respondents replied that Samsung brand is more profitable for them but 29% respondents replied that blackberry brand is more profitable for them Q9. Which brand has an effective marketing and promotional strategy?
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28% respondents replied that Samsung brand has an effective marketing and promotional strategy but 27% respondents replied that blackberry brand has an effective marketing and promotional strategy Q10. Which brand do you recommend while customers visit your shop?
43% respondents replied that they recommend Samsung brand to sell but 23% respondents replied that they recommend blackberry brand to sell
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CHAPTER-4 SUMMARY AND CONCLUSION Results of the study Our first recommendation is that Samsung Galaxy resist commoditization. While the commoditization of the handset may be an undeniable, inexorable process, we recommend that Samsung Galaxy make attempts to slow the process down. Samsung Galaxy’s brand equity stands as one if its strongest competitive advantages. By continuing to build its brand, Samsung Galaxy will be able to leverage that brand in short term handset sales as well as in future long-term dealings with other entities in the value chain for telecommunications services.
Samsung Galaxy should strengthen its brand through both pus h and pull marketing; push marketing is the targeting of the next link in the value chain, while pull marketing is the
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targeting of end-users in such a way that they ultimately “pull” the product through the value chain. As described earlier, Samsung Galaxy’s current position as a handset maker in the value chain is weak. With a direct line to customers, it is the service operators (e.g., AT&T, Verizon, Sprint PCS, and Cingular) who wield the most power in deciding what customers see with respect to the marketing mix: product, price, place, and promotion. In fact, handset makers in Japan are relegated to a single- letter designation on the handset. A Fujitsu phone, for example, simply shows “F” on the phone accompanied by a model number. Service providers want customers to see the names of their respective companies, not those of the handset makers.
Samsung Galaxy should take steps to ensure that the U.S. market does not follow the same path as the Japanese market with respect to the name on the handset. One way to do this is to ask the service providers to sign a long-term contract, such as a ten-year agreement, stipulating that the brand name “Samsung Galaxy” remain on the phone. If Samsung Galaxy is ever going to siphon power away from the service providers, now is the time. Service providers are facing intense competition and Samsung Galaxy has built such a strong brand that customers are asking for Samsung Galaxy phones. Service providers are already leveraging the Samsung Galaxy brand to attract customers. For example, Sprint PCS currently has a promotion specifically touting a Samsung Galaxy phone as a sign- up incentive for its service. On the pull side, to encourage customers to purchase its phones, Samsung Galaxy should continue with direct-to-consumer advertising, including sponsorships and product placements.
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Samsung Galaxy has an advantage over service providers in using product placements because it is able to show a tangible product that people would want to purchase 14. Samsung Galaxy is currently sponsoring television shows such as “Alias” and has strategically placed its products in movies such as The Matrix. Samsung Galaxy may achieve something similar in some ways to what Intel has done with the chip with “branding the ingredient” and branding to the end-user, such that the handset brand factors into the customer’s decision of service providers. In the short-term, with Samsung Galaxy’s handsets positioned as “stylish” and “cutting edge,” customers will continue to pay for the perceived added value of the brand. In the long-term, as Samsung Galaxy transitions from handsets into other markets, such as networking and Internet services, it will be able to leverage its brand; customers will have positive associations with the name and Samsung Galaxy’s designs may provide a sense of not only being “hip” but innovative.
SUGGESTIONS Focus on Replacement Market: With mobile handset penetrating through the mass market, it is becoming increasingly difficult for handset makers to sell additional mobile phones and sustain growth. This is especially true for a market leader like Samsung Galaxy. By the end of the year 2000, approximately 58% of Europeans and nearly 40% of Americans carried cell phones, according to Herschel Shosteck, president and CEO of the international wireless consulting firm Herschel Shosteck Associates. With the market approaching saturation, the only viable source of growth for the mobile handset industry is the replacement marke t. Figure 4 in the Appendix shows the global trend of the
41
handset replacement market. Samsung Galaxy has fully recognized the potential of the replacement market. “Our firm opinion continues to be that the replacement will continue to grow and the share of replacements in the total market will grow,” Matti Alahuhta, president of Samsung Galaxy’s mobile phone division, told Reuters The replacement market customers will be pickier about their next handset and will demand data services (MP3 player, GPS, Mobile Vending Machine, just to name a few) in addition to voice communications from their mobile handset. Therefore, Samsung Galaxy must concentrate its efforts on convincing existing users of the need to purchase the next generation of handsets.
One way to effectively achieve this goal is to segment the existing customers into different groups based on their collective characteristics and employ different marketing strategies to the different target groups. Two groups of customers naturally come to mind for the replacement market, youth and professional users. For the youth market, the handset should add services with an emphasis on entertainment. For instance, MP3 players, short message services, chatting, and mobile gaming are some promising examples. Also for the youth market, careful attention should be paid to the design of the handset. Teenagers and young adults simply won’t buy if the new handset does not look “cool” or “hip.” For professional users, Samsung Galaxy should provide the ability to remotely access their data and files through the handset. Calendars, conference schedules, e-mails, PowerPoint presentations, spreadsheet, and word processing documents should be obtained with the touch of a button, at least in the corporate site, if not nationally. Due to the limited memory capacity available to handsets, Samsung Galaxy should also provide the means to transfer information from the handset to a computer or PDA. 42
Professional users are known to pay premium prices for convenience; Samsung Galaxy will see huge margins for its new handsets if they can provide seamless data access services. Enable Data-Driven Services: One way Samsung Galaxy may capture the replacement market is by working with content providers and enabling the delivery of compelling data content. With the emergence of 3G, data communications are finally ready to be deployed for the mobile handset. As a handset manufacturer, Samsung Galaxy does not have core competence in the data content area, so key alliances with data content providers will be beneficial in terms of delivering innovative services to customers through Samsung Galaxy’s handset. Samsung Galaxy also needs to establish strategic partnerships with mobile software developers so that new data services can be launched without glitches. To avoid repeating the dot-com experience, Samsung Galaxy needs to carefully consider the kind of data services it will offer to customers. For example, motorists will certainly value GPS and E-911 services more than, say, mobile purchasing capabilities. Samsung Galaxy needs to obtain the first-mover advantage by successfully launching at least one type of data service before its competitors. If Samsung Galaxy succeeds in this attempt, it would further establish the Samsung Galaxy brand by associating innovative data services with its line of handsets; this would likely encourage consumers to consider Samsung Galaxy when the time comes to replace their mobile phones. Focus on the CDMA market: Over the last twelve years, Samsung Galaxy has done many things right to establish market leadership. It was one of the first companies to develop a GSM phone in 1992, and since then it has been leading the market in TDMA
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technology, of which GSM is a specific standard. Its U.S. market share for TDMA/ GSM phones is around 64.4%. However, one of the challenges Samsung Galaxy faces is to maintain its dominance as the technology evolves to 2.5G and onward to 3G. Although the standards evolution process is not totally clear, it seems like CDMA will be the technology of choice in the U.S. in the future. And Samsung Galaxy has a big problem in that its market share for CDMA is a paltry 2.9%. Currently, CDMA and TDMA have roughly equal presence within the U.S., with CDMA gaining a slight edge in 2001. Verizon and Sprint PCS are the two major carriers who have all digital CDMA networks. On the other hand, AT&T and Cingular use TDMA/GSM technology in their networks. higher data rate; however, in the long run, 3G would probably be deployed which is primarily based on CDMA technology. Carriers are now starting to deploy 2.5G networks, which would continue with current standards.
Traditionally, Samsung Galaxy has been extremely good at capturing market share when the technology changes. During the transition from analog to digital networks, Samsung Galaxy managed to displace then market leader Motorola, which was slow to catch on. Until the year 2000, it looked like the current CDMA standard, IS-95, would migrate to cdma2000 and becomes the dominant standard for 3G systems in the U.S. In late 2000, however, AT&T completed a deal with NTT DoCoMo of Japan to migrate to GSM networks and provide new services in the United States. This implies that W-CDMA (which is the 3G evolution of GSM) might be the preferred evolutionary path for 3G rather than cdma2000. This uncertainty in future standards is a hurdle as Samsung Galaxy will be hard-pressed to achieve dominance in both markets. But in any case, we feel that Samsung Galaxy has to develop more handsets that are based on CDMA so that it does 44
not lag behind in the technology. Since its strength is in GSM, it should develop phones for the W-CDMA standard and then move on to cdma2000. Samsung Galaxy should not allow itself to stumble on technology in the future. In contrast to our previous recommendations, this is a longer-term issue Samsung Galaxy must address.
CONCLUSION As we have shown, Samsung Galaxy must rethink its strategies if it is to remain successful. The recent economic slowdown coupled with impending market saturation and the demand for increased functionality, is beginning to dramatically change the handset market. Samsung Galaxy should take aggressive measures to resist commoditization if it is to grow and continue being profitable. We have outlined some ways that it can accomplish this. Its brand has proven to be one of its most valuable assets, and Samsung Galaxy should continue building it. Samsung Galaxy must also thoroughly research evolving customer needs and provide a positive impetus for brand differentiation. Finally, by forming strategic alliances with industry and service providers, Samsung Galaxy can ensure and maximize its visibility to the end- user. Samsung Galaxy also needs to bring new products to market, and, as the market is showing signs of saturation, shift its focus onto the replacement market. This means developing datadriven services and appropriate partnerships with content providers. There simply needs
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to be an incentive for existing handset owners to purchase a new Samsung Galaxy handset. Finally, Samsung Galaxy should secure its long-term position by placing more R&D and marketing emphasis on CDMA, as opposed to its current core market of TDMA. CDMA will form the basis of third-generation mobile technology, and it would be an advantage to be seen as an a priori leader in this domain. While Samsung Galaxy’s future – and indeed that of the entire mobile communications industry – is growing more uncertain, Samsung Galaxy is not doomed yet. As long as Samsung Galaxy is open to reworking its marketing strategies
REFERENCES
“Letting Your Future Go” (Ziff Davis Smart Business PCCG) Ziff-Davis Wire September 12, 2001.
“Samsung Galaxy expects to meet estimates” CNET Tech Sites: By Reuters, September 12, 2001. “Samsung Galaxy in the hot seat,” by Rex Crum, Hoover’s Online, August 22, 2001.
“Samsung Galaxy Targets Handset Replacement Market With New Product Features”, Carolyn Koo, Staff Reporter, TheStreet.com, Nov. 26, 2000.
“Telecoms Industries Around the World Face Unfamiliar Challenges From U.S. Downturn”, Bhawani Shankar, Gartner, April 3, 2001.
“What Will The Telecommunications Marketplace of Tomorrow Look Like?”, Telcordia Technologies, www.ITPapers.com
“IDC
Spots
Wireless
Handset
Sales
wireless.newsfactor.com, Aug. 28, 2001.
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Slump”,
Brian
McDonough,
“Samsung Galaxy says 40%-plus handset market share possible”, Paul de Bendern, infoworld.com, May 4, 2001.
Wireless Subscriber And Handset Update—Equity Research Notes, US Bancorp Piper Jaffray, Sep. 24, 2001.
“Smart Phones – From Luxury Item to Lifestyle Necessity”, Karen Parnell, Perspective Wireless Communications.
“Data Access Fosters Growth in Cellular Handset Market”, Kristen Skedd, instat.com, July 25, 2000.
ANNEXURE QUESTIONNNAIRE
Q1. What all brands do you sell?
Nokia Sony Samsung Blackberry LG Others
Q2. Among all brands which one is more demanding in the market?
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Nokia Sony Samsung Blackberry LG Others
Q3. Which brand is good in quality in comparison with others?
Nokia Sony Samsung Blackberry LG Others
Q4. Which brand is good in case of its availability?
Nokia Sony Samsung
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Blackberry LG Others
Q5. Which brand is good in case of providing the services on time? Nokia Sony Samsung Blackberry LG Others
Q6. Which brand has a reasonable pricing strategy?
Nokia Sony Samsung Blackberry LG Others
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Q7. Which brand do you sell more than others?
Nokia Sony Samsung Blackberry LG Others
Q8. Which brand is more profitable for you?
Nokia Sony Samsung Blackberry LG Others
Q9. Which brand has an effective marketing and promotional strategy?
Nokia
50
Sony Samsung Blackberry LG Others
Q10. Which brand do you recommend while customers visit your shop?
Nokia Sony Samsung Blackberry LG Others
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