Samsung Electronics in the UK Market - Case Study Example

SAMSUNG MARKETING REPORT Table of contents Abstract……………………………………………………………………………..3 Introduction…………………………………………………………………………4 The significance of the UK market………………………………………………….4 Samsung Electronics summary of SWOT analysis………………………………….5 Internal strengths of Samsung Company…………………………………………….6 Internal weaknesses of Samsung Company………………………………………….7 External opportunities………………………………………………………………..7 External threats……………………………………………………………………….8 Samsung Marketing Mix……………………………………………………………..9 Recommendations for the company………………………………………………….13 Conclusion……………………………………………………………………………15 Bibliography…………………………………………………………………………..17 Appendix 1……………………………………………………………………………18 Abstract Samsung is popularly known as one of the top most electronic companies in the world. It has overtaken most of the companies in terms of mobile telephone sales and is currently the second largest mobile telephone seller after the Finnish company, Nokia. In order to understand the success of Samsung, this report details a theoretical framework that analyzes the company’s strategies for capturing the United Kingdom market. The report first explores the need for vigorous business presence in the market, internal and external situations as well as their stiff competitors. The second part of the report is solely devoted to analysing the company’s emerging strategies. The strategy suggestion is discussed in relation to the business environment and demographic trends of the United Kingdom consumer market. Marketing Report Introduction Since mobile telephones came into use, people have been so much thrilled by their easy usability and portability. Mobile telephony has over the past one and a half decades revolutionized communication. For many years, Samsung Electronics of Korea has been involved in the production of a range of electronic products, notably television sets, music systems and of recent past mobile telephones. The company has been outstanding due to the quality of its products that perfectly blends with current needs of modern consumers in regard to entertainment. The company’s products such as Galaxy Nexus mobile phone generally comes with so many unique features as well as trendy design. The significance of the UK market Several brands of high end mobile telephones have been introduced by Samsung Electronics to capture the growing and lucrative European market. The market is characterized by consumers who spend well on the state of the art mobile phones that can satisfy their growing needs of having so many applications in a handset. The high end mobile handsets have been introduced by the company to satisfy the desire by mobile users to have full control and be able to perform quite a number of things. Analysis carried out by the company’s marketing department showed majority of consumers were not satisfied with having a mobile handset that cannot take clear pictures, video as well as chatting; rather, they preferred a handset with many functions that would convenience them. Most of the people have no problem coughing out more cash to buy the gadgets so long as they satisfy their needs. Since the company started manufacturing such kind of mobile handsets not so long ago, the company has recorded tremendous increase in sales in the Asian and American market hence seizing reasonable proportion of the mobile telephony market from the traditional players such as Nokia and Motorola. In order to achieve good market expansion and appeal, many unique features have been introduced to the company’s products especially the 3G telephone brands, which include the Galaxy Nexus. Such phones have a relatively high rate of acceptance as the modern-day person has so many things to perform while walking or travelling. Such in-built accessories have added greater value to the usability and mobility of the company’s phones. By collaborating with some of the technology companies such as the Google, Samsung has been able to produce high quality products that go well with the consumers. The Samsung Electronics therefore provide the consumer with the rare ability to fully use a mobile phone in a unique way more than just traditional communication (Fan 2002, pp 180-192). Samsung Electronics summary of SWOT analysis Strengths and Weaknesses • It is one the of largest mobile phone manufacturers in the world and commands a large market share being positioned in over 61 countries globally. • High quality products and reliable image • The company has made it a priority to promote research and development hence scaling up innovation. • Goods are produced in time to avoid late deliveries • Paying attention to the needs of consumers hence very dynamic to address their demands • Efficient network of distribution • Efficient understanding of culture mix • The company produces trendy and very light phones compared to other mobile phone makers • A 22 percent market share in Europe as the company has a higher niche in Smartphone sales. Opportunities and Threats • The EU market has a lot of opportunities following removal of trade restrictions • The company is popular with the introduction of many mobile phone models • Aggressive launch of online business activities meant for good market positioning such as internet advertising and sales • The company stiff completion from other telephone makers for the lucrative European market • Rising costs of labour • Imposition of heavy taxation by the UK government on goods entering its territory Internal strengths of Samsung Company Samsung Electronics is a household brand in the Asian and American markets. Since the company has spread its mandate in terms of sales in over 61 nations, benefits are being reaped as far as economies of scale are concerned. The concept of being in time was actually a creation of the company. It ensures that the company responds in timely manner to its customers as well as reducing the operational costs that are normally incurred when goods are stored in warehouses. Samsung Electronics has also decided to invest a lot of resources on research and development hence has steadily increased its budget to cater for the same in its research stations globally. This makes the company to be among the few that invests and takes product and brand research very seriously. The ability of the company to mount vigorous campaigns over the recent past has given it an upper hand in terms of product innovation that ensures high quality products with higher competitive edge. Strength of the company is reliability and durability. Samsung Smartphones have over the recent past captured the global market as orders running into millions of handsets are processed annually to meet the growing demand in different locations of the world. Samsung has also diversified its range of products and is now engaged in the production of other items such as computers. Internal weaknesses of Samsung Company Samsung Company through its market research has become quite aware about the tastes and preferences of the European market that includes the United Kingdom. The company has become aware that its market dominance in Asia and Middle East cannot be assumed to encompass other buyers with different cultures. The company has therefore realized that reliability alone cannot be a good selling point as most European customers have the tendencies of expressing themselves based on the type of mobile phone one is owning thus higher levels of prestige when one has a latest brand of Smartphone. It should not be assumed that though trade restrictions were removed in the year 2000, the UK still impose some restrictions to cushion local manufactures from unfair competition thus elements of subsidies to many industries so as to lower the costs of their products and to support the initiatives of protecting domestic industries. Such hurdles as well as other business restrictions have made Samsung’s entry into the lucrative UK market face many challenges. External opportunities The European market was very hard to penetrate prior to removal of trade restrictions, but since the removal of the trade quotas in 2000, business opportunities have opened up for foreigners and foreign owned business entities. The removal of such quotas opened up the EU market for goods manufactured elsewhere in the world. The technological innovations being done by Samsung company is a clear indication that very many brands will be new technology of the company has proven to be very successful in Asia and Africa and as led to creation of numerous brand extensions. The company could hugely benefit based on its product diversity. The company may also benefit from rolling out new phone brands. The company is also going to benefit from the internet marketing that offers diverse opportunities for sufficient marketing of its brand in addition to improving communications and lowering operational costs. Online marketing such as online product booking, online product showroom as well as online purchasing comes in handy (Kotler & Kevin 2009, pp 43-51). External threats The most significant threats that Samsung will face in its bid to sell in the UK comes from the established indigenous and foreign owned mobile phone manufactures that have made long-lasting marks with consumers. Such established firms have for decades sold so many electronic equipments to consumers thus have become household brands that cannot be changed easily. Samsung should therefore do a lot of ground work so as to meaningfully the replace the kind of convenience and trust built by the well established firms. The company needs to take a different approach in marketing for all forms of advertising have been embraced by the competing companies. The company is seriously considering using the strategy of one on one and door to door campaign in the neighbourhoods. This is a good selling point that other companies have not realised. The policy of the government to offer incentives local companies make a new entrant in the already crowded market to incur a lot of expenses as such subsidies brings unfair competition. Samsung must therefore appeal to the locals that its products are of high standards and worth their money (Adcock & Al Halborg 2001, p 16). Samsung Marketing Mix Samsung marketing mix is the blend of the constituents of marketing with what functions each element plays in advancing its products as well as services along with delivering those merchandises and services to the company’s customers. In order to realize Samsung Company’s marketing mix elements we will consider the launching and subsequent market performance of the Samsung smart phones. Through such an examination, it will be possible to underscore the company’s ultimate marketing mix. Basically, Samsung Company embarked a holistic blend of marketing mix elements as its marketing strategy for the Samsung smartphones. As a result, the product has performed equally well in the market. Up to date Samsung smart phones continue to intrigue the market with speculation of a distinct marketing protocol by the mother company. Elements of the Marketing Mix Samsung Corporation has a dynamic marketing mix full of a blended content of marketing mix elements. Perhaps this is the reason behind the company’s robust performance with regard to its numerous products. A clear analysis of the performance of Samsung smart phones indicates a characteristic blend of marketing mix elements by the Samsung Company (Czinkota 2000, pp 55-57). What informs of such a gigantic manifestation is the fact that since the company launched its smart phones products, they have faired on well in the market. In essence, the elements of the marketing mix are as well known as the 5 P's of marketing. For years salespersons inferred to the 4 P's of marketing. Only of late has a fifth P been supplemented. Whether a company recognizes the assumption that there are four P's or five P's of promotion, this is basically referred to as the "marketing mix". The 4 P's of marketing mix are as illustrated below. At the heart of Samsung corporations marketing mix are the original 4 P's of marketing. These comprise of product, price, place and promotion. Product refers to the merchandises as well as services that are offered to clients by the corporation; their physical features, what they accomplish, the manner in which they differ with those of competing companies along with their advantages. In this case the product implies the Samsung smart phones, their attributes, distinctions, as well as advantages. Price on the other hand implies the manner in which the Smartphone are priced in a manner that guarantees competition and brings profit (Lamb et al, 2011 p 48-54). The third P implies place, the place that Samsung vends its Smartphone and the manner in which it obtains the merchandise to vend to the clients. The fourth P refers to promotion. This implies the mechanisms employed by Samsung Corporation to reach the potential clients regarding the characteristic and advantages of Samsung Smartphone. The Samsung Smartphone marketing mix concept is simple. It can be compared to any blending process where numerous additives are required for the full production of the product required. Therefore, the company’s marketing mix elements come together to define its overall marketing strategy. In essence, all the elements cannot be said to be of equal measure in their contribution to the overall mix. However, it is evident that each element in the marketing mix is of equal value. Just like there may require more of one additive to make the solution complete the measure of each depends on the relevance of the situation at hand. Hence, the marketing mix of Samsung Smartphone takes the same shape any solution requiring a blending of diverse parameters. The offer made to a customer can be changed by anecdotal of the mix elements. As a result, for a high silhouette brand, amplify the focus on promotion and desensitize the weight given to price. Another way to think regarding the marketing mix is to use the representation of a drawer's palette. The salesperson mixes the main colors (mix constituents) in diverse quantities to convey a meticulous final color. Each hand painted depiction is inventive in some manner, as is each marketing mix. If a company intends to have the marketing mix practiced to a real dealing - then get a glance at our Samsung Smartphone marketing mix. Some marketing experts have been of the opinion that the P’s of marketing go beyond four. Hence, there has been a bid to introduce a firth P of marketing to the existing four. Others have opined that in total the elements of marketing are seven in number that giving rise to the seven P’s of marketing. Other section of marketing expertise has concluded that a typical marketing mix includes ten P’s of marketing. Among the P’s incorporated in the additional include physical evidence, people, process, personality and perception among others (Michell, 2011 pp 28-31). In essence all these parameters have been inculcated into the comprehensive marketing strategy of Samsung smart phones. Therefore, without having to name the entire number of P’s involved in the constitution of the Samsung Smartphone marketing mix, the company’s mix is a model amalgamation of all the relevant parameters. As a matter of fact, the Samsung Smartphone marketing mix incorporates all the elements as envisaged in the connect of the ten P’s of marketing which represent the ten distinct elements of marketing that constitute a perfect blend of marketing strategy. Hence, the corporation’s, marketing mix considers all the relevant parameters that comprise a complete marketing strategy. These include; product, philosophy and ethos, price, personality, place, people, promotion, perception, performance and positioning. Philosophy and ethos refers to the principles and values that Samsung smart phone stands for. This also involves the manner in which the corporation undertakes its activities. Basically, this point at the ethical considerations that form the company’s marketing strategy. Personality on the other hand implies the inherent subcultures that prevail in the Samsung organisation. Most of these have a strong bearing on the nature of marketing strategy the company adopts. People are the lifeblood of the Samsung’s identity. Therefore, the aspect of people cannot be underestimated in the marketing mix. This symbolizes the significance of Samsung stakeholder groups in the merchandise and service quality. The product is the main aspect of the marketing mix, thus great attention is given to the Samsung smart phones as products; their quality and benefits to the client. Price denotes the company’s charges of the product. This should guarantee competitiveness and also bring profit to the company. Promotion sums up the methods used by the organization to reach the customers. Performance denotes the overall performance of Samsung Corporation as exposed by the philosophy of the organization. Perception denotes Samsung Company’s concerns regarding its corporate image. Positioning definitely relates to significant stakeholders, competing companies and the outside environment. In conclusion, the Samsung smart phone overall marketing strategy is informed by the relevant elements of marketing mix. Originally this stems from the four P’s of marketing, but the corporation has been dynamic enough to upgrade to suit upcoming elements of the marketing mix (Chekitan & Schultz 2005, pp 102-112). Recommendations for the company Situation Analysis The situation analysis for the UK market starts with a comprehensive preview of the market situation for the mobile telephones. Since Samsung Electronics will make mobile phones to penetrate an already saturated market with other high quality products from European Union such as Nokia from Finland, market information concerning other related brands is very critical. Samsung company generally boasts of a good global market share, thus has gained high degree of confidence as well as acceptance from diverse consumers with different tastes and preferences that range from teenagers to mature adults. As is the case in the European continent and in particular the United Kingdom, most consumers of trendy forms are teenagers in institution as of learning and young adults in employment or business. These segments of consumers have a target of many mobile phone makers because they are widely knowledgeable in regard to information technology in addition to their relative willingness to invest on state of the art phones. Many of them are in the younger ages of 18 to 32 and are very computer-literate who have the enthusiasm to spend on phones with many features to satisfy their youthful entertainment nature. The company is to make a thorough consumption trends analysis to have a good knowledge and understanding of consumers of how this important market segment make decisions in relation to mobile phones purchase. Samsung Electronics has over the past conducted so many researches to understand the nature of the complex United Kingdom market. Such studies have been based on finding information about the trends of trendy phones that supports the appetite of younger and college-educated persons as the main potential market for the company’s brands (Christensen 1997, pp 88-93). Measures to consider Since Samsung Electronics has good prospects to turn tables in the UK Smartphone market based on the proper identification of the market, it is imperative for it to lay focus on the fundamentals of communication as mentioned by Zook and Smith (2011, pp 12-24). As is the case of new products in any market, consumers are very cautious in gambling with their money hence potential customers need to be fully convinced with facts and not advertisements to see sense and seriousness in the company’s brand image as discussed by Wilson and McDonald (2011, pp 121-134). The company should therefore perform quite a number of things in order to beat competition in the lucrative UK market, these include: Building of brand and product awareness The company should consider aggressive branding to boost its international image for without being known it cannot attract customers even if the products are of very high quality. Stratification of image branding should take form of winning competitions and offers especially when people don’t have money such as mid-month. The company should therefore realise that entering such as sophisticated market requires building about 75 percent of image and brand awareness to the probable consumers within the first two years of doing business. Boosting consumers’ morale and interest Building of brand awareness goes along with the need of boosting the morale and drawing the interest of a consumer to like and purchase a brand. If the customer is not convinced to develop a liking for a certain brand of product then he or she may not develop an interest to sample a new offer. According to Moore(1991, pp 65-73) Market analysts have it that if about 50 percent of potential consumers can be potentially made aware of a new brand in the market; it is a general evaluation that almost the same proportion will demonstrate some good level of interest in the product. It is therefore the task of the company to see that the brands are conspicuous to appeal to the potential customers. The need for provision of conducive environment Given that the company has done enough to create brand awareness amongst the consumers, what comes next is the provision of a good environment to evaluate its activities. This should be done by comparing the levels of advertising and gains in sales with the competitors. This would provide insight in relation to the necessary adjustments that may be required to make the brand top in the consumers’ list (Wernick 1991, pp 25-31). Conclusion Entering a new market with a new product is a nightmare for all companies, but with good planning all the hurdles can be gradually overcome. In order for Samsung Company to prosper in the UK market it is imperative for the UK division to have a comprehensive plan that would call for frequent review meetings to ensure success of its brand positioning, image and sales. Good planning will be important in upholding business integrity and ethics. The company should carry its business with more objectivity to leave the consumers to make a choice in a free market. Bibliography Adcock, D & Al Halborg, C.R 2001, "Introduction". Marketing: principles and practice, Prentice Hall. Chekitan, S. D & Schultz E.D 2005, "In the Mix: A Customer-Focused Approach Can Bring the Current Marketing Mix into the 21st Century". Marketing Management 14 (1). Christensen, C.M 1997, The innovator's dilemma: when new technologies cause great firms to fail, Boston, Massachusetts, USA: Harvard Business School Press. Czinkota, M. 2000, Marketing: best practices. London: Dryden. Fan, Y 2002, “The National Image of Global Brands”, Journal of Brand Management, 9:3, 180- 192 Kotler, P & Kevin, L.K 2009, A Framework for Marketing Management (4thed.). Pearson Prentice Hall. Lamb et al. 2011, Essentials of Marketing. New York: Cengage Learning. Michell, A. 2011, Samsung Electronics and the Struggle for Leadership of the Electronics Industry. Washington: John Wiley and Sons. Moore, G 1991, Crossing the Chasm, HarperCollins Publishers. Wernick, A 1991, Promotional Culture: Advertising, Ideology and Symbolic Expression (Theory, Culture & Society S.), London: Sage Publications, Wilson, H. & McDonald, M 2011, Marketing Plans: How to Prepare Them, How to Use Them. Washington: John Wiley and Sons. Zook, Z. & Smith, P 2011, Marketing Communications: Integrating Offline and Online with Social Media. New York: Kogan Page Publishers. Appendix 1 A photograph of Samsung’s Galaxy Nexus that was developed in collaboration with Google Read More