Samsung is a South Korean Company that was founded in 1938 by Byung-Chull Lee. The company started as a trading entity, but it gradually evolved to become an international amalgamation through numerous mergers and acquisitions. The Samsung Electronics Industry began in 1969 and had seen it grow to acquire over 200 auxiliaries across the globe. The vision of the company is to top 5 global companies by the year 2020, and it believes that innovation, as well as value creation, will see it emerge at the top. Samsung also aspires to appear as the top 10 world’s best working environments. The company electronics industry offers a range of products such as televisions, mobile devices, home appliances, among others to its customers. Samsung’s marketing mix assesses the company or brand using the 4Ps strategy. The 4Ps include Product, Price, Place, and Promotion, and explain the overall marketing strategy of Samsung. This paper examines the marketing strategy of Samsung using the 4Ps to establish its position in the market.

Samsung was not as popular in the last decade as it is now because the company struggled to catch up with the Smartphone market. However, over time, Samsung has evolved to become the primary competitor of grand brands like Apple Inc and Microsoft. Currently, Samsung is the most significant technology business by revenue, and it rates as the 7^th most valuable company.[1] The marketing strategy that the company applied has helped the company become a leading brand. Its marketing strategy is among the most effective approach because it enables a cost-oriented entity to transform its structure to become a leading brand.

What helped Samsung to become an industry leading Technology Company was the marketing strategy they applied. The Samsung marketing strategy was one of the most effective strategies ever created because it helped a cost-driven company to change its structure and become an authority manufacturer.[2] As a result of the ever-changing demands of consumers in the technology sector, companies needed to pace up and offer innovative and progressive gadgets to their target customers. Samsung, therefore, had to change its operations to gain a competitive edge on the market.

Product

Samsung places a lot of investment in research and development to deliver excellent products and services to its customers. The company offers a wide array of products in different categories. It diverse offerings stem from the company’s marketing mix. Samsung’s products can are in five categories

Mobile devices: Smartphone such as Samsung Galaxy series, Tablets, Samsung Note series, accessories, and other types of phones

Home Appliances: Refrigerators, Cooking appliances, Washing Machines, Vacuum cleaners, and Air conditioners

TV/AV: Samsung Television, Video, Audio and, other accessories

Information Technology: Monitors, Laptops, and Printers

Memory/Storage: Portable SSD, SSD, Flash drives, and Memory cards

Samsung’s brand image driver is the range of Samsung smartphones such as the Galaxy series, and the note series. In terms of product loyalty, Samsung has a benefit as a result of the trust that the company has created among its consumers. Samsung products have performed well in the past few years, and the quality of its products keeps getting better and better.[3] Samsung has become a brand name that people associate with quality and class. This brand of quality and level is attractive to many. Similarly, customers recognize the company’s variety of services. Customers are aware that Samsung apt services for any of its products and customer service never disappoint the customers.

Price

Samsung is a market authority and leader in smartphones and other brand products. It is a dominant stakeholder in the market for home appliances and uses two pricing strategies to serve its customers.

Skimming Price

In this strategy, companies give products higher prices so that they need fewer sales to break even. It entails selling products at higher rates, sacrificing achieving high sales margins, and therefore skimming the market segment. Although the business world sees skimming as a strategy for early product adopters, Samsung has effectively managed to utilize this strategy. For instance, when the company rolls out a new product with varying capacities of storage, it puts a higher price tag on them.[4] However, when other competitors roll out products with similar characteristics, Samsung lowers its product prices to easily prevent a reduction in its market share due to competition. The company tries to achieve high value at the start through skimming and then, later on, drop the prices when new competitors try to enter the market.

Competitive pricing

Competitive pricing is a large part of Samsung’s marketing strategy. Samsung has not been successful in becoming a power brand in other product categories. Although it is a trustworthy brand, the home appliances category has not surpassed that of LG. Samsung, therefore, uses competitive pricing to prevent attacks from its competitors in the market.[5] Additionally, Samsung is not fast-paced in the home appliances category, and therefore it has to use competitive pricing to defend its market positions. Samsung, however, does not use penetrative pricing because it does not enter late into the market. The company is currently present in many durable consumer segments in the market.

Place

Samsung recognizes the significance of being present in the market and the competitive advantage it gains by being present. For this reason, Samsung has ensured its presence through various market channels. It deals with the channel marketing concept which has three segments. These segments are modern retail, distributors, and sales and service dealers. The current retail category includes favorite retailers such as Hypercity, Croma, Vivek’s, Vijay Sales, as well as other retailers who are present in the current electronic retain value chain. As a primarily branded product, retailers may be optimistic to maintain Samsung as the primary product for their clients or as an alternative brand.[6] The sales and services segment involves dealers who are in charge of corporate sales and who handle the company’s key accounts. The retail dealers may also be responsible for opening the company’s showrooms. The distributor network is the most crucial segment for Samsung. In many cities, Samsung has one distributor whom the company uses for distribution services in specific territories.[7] For example, in Mumbai China, Samsung has a distributor called SSK who distributes all its products.[8] The distributor network has significant investments in Samsung, and their activities go hand in hand for the sale of products. Therefore, a single distributor will purchase Samsung products, and they will, in turn, sell it to other local retailers.

Promotion

Promotion is a critical element in the marketing strategy of any company. Samsung believes that product advertising strategies are the best forms of promotion to communicate and attract customers and improve the brand’s image. The company applies multiple promotional strategies to attract customers because it believes in enticing the customers not only through advertising but also through strong tactics. The main form of advertising for the company is the use of visuals. Samsung has invested heavily in the use of visual forms such as television advertising, billboards, posters, and social media advertising to promote its products.[9] Similarly, the company takes advantage of the vast numbers of celebrity followers and therefore uses celebrities as brand ambassadors to attract their followers.

Besides advertising, Samsung also uses other promotional strategies to attract consumers. For example, the company is known for promoting events and engaging in charitable endeavors within its communities of operations. The company sponsors significant events and festivals such as the World Cup, Olympics, and others.[10] The company also uses discounts and bonuses to attract customers. For example, during festive seasons such as Christmas, Easter, and Idd, the company offers substantial discount margins to its customers or participates in entry promotions where it rewards winners with their home appliances. Lastly, Samsung uses incentives to attract customers and sales.[11] For example, the company offers substantial discounts to its trading partners to motivate them to sell its products above those of competitors.

In conclusion, although Samsung may have started as a small enterprise, it has adopted an effective marketing strategy that has seen it evolve to become one of the largest brands in the world. Through its diverse range of products, pricing strategies, presence in the market, and promotional activities, the company has managed to attract many customers from all around the world and has continued to sustain its image as a superior brand. Samsung’s marketing mix is a lesson to all companies and marketers. Effective marketing strategies have long term strong impacts on any business.

Bibliography

Bui, Quyen, and Fa Tran. “Planning and managing a corporate event: case: Event Activation Galaxy Studio Samsung S7/S7 Edge.” (2017).

Fréry, Frédéric. “The fundamental dimensions of strategy.” MIT Sloan management review 48, no. 1 (2016): 71.

Hu, Hai-Hua, Jun Lin, Yanjun Qian, and Jian Sun. “Strategies for new product diffusion: Whom and how to target?.” Journal of Business Research 83 (2018): 111-119.

Lee, Woo-Chae. “An Assessment of Consumer Perception and Marketing Strategies of Major Korean Brands in Mali: The Case of Hyundai, Kia, Samsung, and LG.” (2016).

Li, Lee, and Gongming Qian. “Strategic alliances in technology industries: a different rationale.” Journal of Business Strategy 39, no. 2 (2018): 3-11.

Li, Wei, and Jing Chen. “Pricing and quality competition in a brand-differentiated supply chain.” International Journal of Production Economics 202 (2018): 97-108.

Maier, Michl Sebastian. “Corporate diversification strategies and their effects on the firm performance-the case of Samsung’s venture.” Master’s thesis, BI Norwegian Business School, 2017.

Sun, Yu. “A Smartphone Company’s Innovative Marketing Strategy in the Chinese Market: A case study of iPhone.” (2014).

[1] Bui, Quyen, and Fa Tran. “Planning and managing a corporate event: case: Event Activation Galaxy Studio Samsung S7/S7 Edge.” (2017).

[2] Sun, Yu. “A Smartphone Company’s Innovative Marketing Strategy in the Chinese Market: A case study of iPhone.” (2014)

[3] Sun, Yu. “A Smartphone Company’s Innovative Marketing Strategy in the Chinese Market: A case study of iPhone.” (2014)

[4] Li, Lee, and Gongming Qian. “Strategic alliances in technology industries: a different rationale.” Journal of Business Strategy 39, no. 2 (2018): 3-11.

[5] Fréry, Frédéric. “The fundamental dimensions of strategy.” MIT Sloan management review 48, no. 1 (2016): 71

[6] Hu, Hai-Hua, Jun Lin, Yanjun Qian, and Jian Sun. “Strategies for new product diffusion: Whom and how to target?.” Journal of Business Research 83 (2018): 111-119.

[7] Maier, Michl Sebastian. “Corporate diversification strategies and their effects on the firm performance-the case of Samsung’s venture.” Master’s thesis, BI Norwegian Business School, 2017.

[8] Lee, Woo-Chae. “An Assessment of Consumer Perception and Marketing Strategies of Major Korean Brands in Mali: The Case of Hyundai, Kia, Samsung, and LG.” (2016).

[9] Li, Lee, and Gongming Qian. “Strategic alliances in technology industries: a different rationale.” Journal of Business Strategy 39, no. 2 (2018): 3-11.

[10] Bui, Quyen, and Fa Tran. “Planning and managing a corporate event: case: Event Activation Galaxy Studio Samsung S7/S7 Edge.” (2017).

[11] Maier, Michl Sebastian. “Corporate diversification strategies and their effects on the firm performance-the case of Samsung’s venture.” Master’s thesis, BI Norwegian Business School, 2017.

 
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