Introduction
Having developed form a trading company in South Korea, Samsung has emerged as one of the largest and influential companies around the globe. Though the company has a number of businesses, ranging from trading to insurance, Samsung Electronics is the most successful ranch in the group. Over the years, Samsung has been labeled as the fastest growing brands in the world. The company has achieved through this through redefining its products and the great marketing strategies that the company uses. In the present, the advancement in the technology calls for quick adaption to the technological changes, and Samsung has used this to advance its brands. This paper discusses the marketing management strategies that Samsung has applied over the years, and those that they are using at the moment, and the results of these strategies.
Question one: How Samsung achieved successful brand identity
Answer: For any company to succeed and achieve its goals, the marketing strategies used have to be in line with the company’s goals and be strong enough to withstand the market competition. Most of the marketing decisions that are successful involve four variables; product, price, promotion and place (Dogra, 2010). This mix of variables, commonly referred to as the 4p’s of marketing requires the marketing manager and the marketing team to make decisions after assigning a value to each variable under it (Jobber & Lancaster, 2003). The marketing strategies used by Samsung over the recent decade, making it one of the most successful company stories in history, involve the marketing mix of the 4p’s.The first P in the marketing mix concerns the pricing strategies used by the company. The pricing strategy that a company adapts has to include the price level of their products, credit terms, price changes and discount (Dogra, 2010). For Samsung, the pricing strategy that they adopted played a big role in determining the success of the company. Their main aim is providing good products to their consumers, at a reasonable price. One of the main focuses of the company is cost-cutting, which has helped in keeping the prices of their products lower than those of the competitors and combating the discount schemes of local companies. For example, in 2002, Samsung reduced its operational costs drastically, enabling the company to keep low prices for certain products. With this strategy, the company managed to extract higher profit margins from the premium products, enabling the company to post a higher turnover than what they had posted in 2001. Another pricing strategy that the company has in place is a Mixed Operating Price (MOP). Through this strategy, Samsung sells its products to the distributors and consumers at a fixed market price only. The strategy has paid off because the distributors or retailers do not hike the prices of the products to benefit from the price differences that they might charge the consumers. Samsung changed its pricing strategy in the past few years.
Question two: Segments for the target market
Answer: Samsung used to target high-end markets thus keeping premium prices. Through this strategy, Samsung remained at number two and three in most of its product categories. When the company changed its pricing strategy to target the middle class folk rather than just targeting the high-end market, the company has increased the number of sales. Samsung has managed to keep lower price than its major competitors in its products, and still keeping up with the advancing technologies. Due to this, the market share of the company has increased, together with the sales margin of the products, especially smart phones. The second P that covers product requires the marketing team and the managers to focus on the features, packaging, quality and the range of their products (Dogra, 2010). The innovative designs and the functionality of their product is another reason why the company has emerged as one of the best companies around the globe. Samsung has overtime developed unique but user-friendly designs that are closely integrated with the recent innovative product concepts, especially in electronics. The emphasis that Samsung has laid on its innovation and R&D has helped in giving it a competitive edge in the market. One example of the recent innovations especially in the smart phone world is the wide range of Samsung Galaxy phones, with the recent one in the market being Galaxy S5.
The wide range of innovations is good as it helps the consumers to have a wide range of products to choose form, and Samsung has achieved this, making it a household name. The third P in the marketing mix is promotion, which include publicity, advertising, sales promotion and personal selling (Dogra, 2010). When it comes to promotion, Samsung has used a number of strategies to help promote their products, such as corporate advertisements, celebrity endorsements (Didier Drogba) among many others. The advertising strategies of Samsung are very aggressive, with their main channels of advertising being the media; print media, outdoor advertising, televisions and the recent being the use of social media. Apart from advertising, Samsung has used sales promotion to market their products. In 2001, Samsung used this strategy in India, a strategy they named ‘phodkeDekho Offer’ (Chauhan, 2013). The strategy saw the company increase its sales level and the profit margin in the Indian sector and the whole of Samsung in general. Finally, Samsung has used the fourth P of place in its marketing, and it has contributed to the success of the company. Place in the marketing mix allows the company tom concentrate of the distribution channels and the number of intermediaries (Godra, 2010). Samsung has a number of intermediaries all over the globe and many distribution channels. The company has branches in more than 60 countries worldwide, thus enabling the company to tap into many markets.
When a company segments it market, it is in a position of helping the marketers define the needs of the consumers. Through this, the company can develop its products on a basis that meets the needs of its consumers (Cant, Strydom & Plessis, 2007). Samsung has adopted a segmentation strategy in which it targets the high-end and the middles classes. One of these segments is the Samsung Galaxy series of phones in the smart phone market. The series of phones has placed the company in a very good competitive edge, and the company is among the best smart phone dealers worldwide after Apple. The segmentation is good for the company as it allows them to tap into the middle class market and the high-end market. Through this, Samsung increases its market share and sales margin. Through their segmentation, Samsung offers budget friendly products, especially mobile phones and products that include the latest technology (MarkTechBlog, 2014).
Question three: Sales volume to profit margin
Answer: In the recent years, Samsung has focused on increasing its sales margin rather than the profit margin. The pricing strategy of a company depending on its sales can impact on the sales volumes of the company (Dunn, Roeser & Valente, 2000). The sales strategy that Samsung is using is very effective for the company. The strategy is a long term strategy and the company can keep increasing its sales and also increase the profit margins along the way, if they keep using the same strategy. As long as increasing the sales volume can help them, the company has a lot of competition especially from Apple. The only way that Samsung can use its sales strategy to also increase their profit margin is by ensuring that they keep producing high quality products, services and delivery. However, the sales margin strategy is not always good for long term strategies. Samsung needs to come up with a plan or strategy that focuses on the profit margin that they make instead of their sales volumes. At some point, the sales volume may be high but they might end up making losses or not breaking even. With the ongoing war that Samsung has with Apple, their sales volumes decrease. If this happens, the company will lose a big market share and their strategy will hit the rocks making them make losses. For a long term strategy, Samsung should start adopting a better strategy that will still include their sales margin, but focus solely on their profits.
Question four: Challenges and how they should be addressed
Answer: Every company faces challenges in their daily operations, and Samsung is no exemption. One of the challenges that Samsung has faced in the marketing is great competition. The Android market that mostly entails smart phones has become the biggest industry in mobile phones and has a lot of competition. Being one of the major users of Android in their products, Samsung has faced competition from some companies such as Apple. The competition with Apple has even led to a court battle, where Apple has sued Samsung for infringing on their patents. Rom this challenge that has rocked Samsung’s boat for a couple of years now, the management should start coming up with innovations and designs that are different from Apple or any other mobile manufacturers around. With greater and new innovations, the company will be in a position to become more successful and will have a competitive edge against its main competitors including Apple. The other challenge that has faced Samsung is selling their phones to businesses. As much as the company is biggest smart phone seller globally, they have had problems winning over the corporate sector. Their biggest challenge in this sector was building a customer-service network that worked with enterprises and the robust security system forum that met the world’s most- security conscious managers (Connors & Cheng, 2013). In 2013, the company’s security system for mobile devices by the name Knox, had delays and programming bugs thus frustrating clients such as the U.S Defense Department. A strategy should be improvised where a certain range of product that is specifically for businesses purposes are developed, and equipped with different elements from those of consumers to ensure the safety of business information transferred by companies through electronic devises.
Conclusion
Samsung has adopted a number of strategies that have seen it develop over the years to be the leading electronics companies in the world. Decision such as laying their focus on the middle-income population rather than the high-end market only, is one of the reasons why their products are affordable to almost every individual and the success of the company. Despite being successful, the company has faced challenges along the way, some of which it has triumphed over and managed to be very successful.
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