MKT203 Services Marketing | Specific Marketing Strategy

Firm Description, Target Market & Service Positioning – Samsung

The company was founded in 1969 in Suwon Korea. Samsung electronic products have grown into an information technology leader managing around 200 subsidiaries around the globe. Samsung has been affiliated the 2^nd world largest information technology in 2015 in term of revenue and 5^th in market value. The total revenue of the company is $174 billion with the profits of $19.32 billion along with the total assets of $217.07 billion. The company’s products can be categorized into two verticals home appliances and telecommunications. There are several products that company offer such as TVs, smartphones, tablets refrigerators, monitors and washing machines. The company has also introduced Samsung Pay which is an online transactional platform. The goal of the company is to inspire the world with new and innovative technologies that help in enriching the lives of people and community. The company aims to achieve around USD 400 billion annual sales by 2020. The three things that are the key strategic pillar of the company i.e. Creativity, Partnership and Great People. These strategic pillars have now become a part of the company (Kim, Jung, Suh, and Hwang,  2006 ; pp101-107).

Target Audience & Service Positioning

Target audience can be defined as the specific group of people to whom a product or a service is targeted. Since the products of the company are into telecom and household electronic therefore the target audience of the company can be the entire population. As the smartphones as of today is one of basic requirement. The segmentation that can be done based on the income level of the people. The people which high income level can targeted for the better phone with the advanced features and the people with low income level can be targeted with the basic feature phones (Lee, 2011).

7P’s of Marketing Mix

Product

Products in the service industry are intangible, heterogeneous and perishable. The services are referred as the products. The service can be consumed and in inseparable. Products like soaps, TV, phones can be measured but the services of the company cannot be measured. Therefore, services can be customized according to requirement of the customer. The services should not only be customized enough that can lower the standards of the services.

Samsung products can be segmented into four categories:

• IT Mobile Devices (SmartPhones, tablets & computers)
• Semi-conductors
• Household Electronics (Washing Machines, Refrigerators, Printers)
• LCD & OLED Panel (TV).

Samsung has also launched Samsung Pay recently worldwide. It is a secure wallet which is used to transact money digitally.   Samsung Pay is considered as a growth opportunity for the company for expands into the different vertical.

As of 2106, the company received maximum amount of revenues through the sales of Smartphones. Approximately, $48.2 billion is from IT/ Mobile sales and servicing and rest comes from the other vertical of the company.

The key for Samsung is to focus on all the elements of Product: Core Products, Actual Product and Augmented Product. For Samsung, this can be highlighted das:

Price

Pricing a service can be tough than pricing a product. While costing a service, there are factors that are taken into consideration. For example, for a restaurant owner, the customer will only pay the price of food that the restaurant is serving. But there are other factors such as who will pay for the ambiance or music or any other services that are offered by the restaurant.

Service pricing also includes labor cost, material cost and overhead costs. It also considers the profit margin as a factor while pricing a service.

Samsung pricing strategy is to ensure a competitive edge among all the competitors. The marketing strategy of the company has helped Samsung to be the market leader of the industry.  The two components that Samsung uses for its pricing strategy are Skimming price and the competitive pricing.

Skimming pricing is used the companies to compete with the other competitors such as the smartphone Galaxy S6 which is one of the product of Samsung and the company is doing the bests to promote their best product in the market. This pricing strategy helps the company to adjust and updates their prices with the increasing competitions which results in decreasing the price in order to attract more customers.

The other pricing model that is used by the company is Competitive Strategy. In order to distinguish and face the competitors, the company can conclude that the company has employed the use of competitive pricing.

Samsung is one of the late entrants in the market and has already become an established brand. The company has managed to build the trust among the people in the short amount of time.

Place

Place decides where the service offering or service products going to be located. Place is one of the important factor of a service industry. Service Provider Company has to ensure that the service that they offered to its customer should get the value of the price that they are paying.

Samsung uses channel market for the sales of the industry. According to this kind of marketing strategy only service dealers are taken into account for corporate sales.

Due to the popularity and trust factor that company has built over time; retailers are bound to keep the Samsung product in their stores and also give alternative option for the consumers. The distribution of the products is one of the compelling part of Samsung marketing strategy. In few areas, Samsung has contracted with single distribution company who is responsible to distribute the product in the entire city. There can be the several reasons of choosing a single distributors but it helps the company in concentration that is required by monitoring the distribution channels. The another reason could be that the company is paying less to the distribution companies as while placing the order there are good discount that are available.

Samsung products are also available online on different websites such as Amazon, Becextech, Kogan, Mobileciti and Samsung.com. Apart from selling the mobile phones the online websites also sell all the accessories related to mobile phones.

Promotion

Promotion is a process to create an image of a particular service or a product which can distinguish from one service offering to another. Most of the service providers with the same service offerings spend a large amount on the promotion of services. Promotion is a crucial factor of marketing mix. There are lots of companies of banking, airlines, telecoms and investment companies invest a huge amount to make their target audience aware about their services and their products.

For the promotion of the products Samsung uses diverse form of promotion. The company believes that advertising is one of the best forms of promotion which aims to engage their potential customers. Apart from advertising there are several other marketing techniques which Samsung uses such as offering discounts, sponsor events, engage with national and worldwide festivals etc.

Several marketing strategy also helps in the progress of the company in different aspects.

Sponsorship- Samsung is one of most famous for its product quality but apart from the gadgets Samsung is also known for being sponsor giant. There are several events that are associated with Samsung as a sponsorship brand such as Sydney Opera House, Australian Olympic Team, NSWIS Awards and Oceania Foundation etc.

Advertisements – Samsung doesn’t spend a huge amount on advertisement as compared to the other companies. The company ensures to promote their important products through advertisements. Samsung advertisement of Galaxy series and Gear VR has more than 50 million views which focuses on the capabilities of the products and also showcases the qualities of the product that company launched (Goi, 2009, pp2).

People

People are one of important factors of the service delivery process. Providing Service to the people is inseparable to the people. They are actually the defining factor in service delivery process. People or the customer of the company should be the top priority of the company. The company should ensure that all the needs of the customers are fulfilled on time with the provided products. Companies should also improve their customer service so that the customers feel that they are valued.   

Samsung belongs to telecom, household electronics and into digitally transactional money wallet.  

The company manufactures and delivery of the products worldwide. Samsung has wide range of product that are useful for everyone in their day-to-day lives. The company has products from mobile phone to TV sets and also Samsung pay wallet.

The target audience of the company is huge and it can only segment the people according to their income level. Samsung takes lot of efforts for their customer to engage with them in their marketing campaign. In the country like Australia, the potential market of digital living is huge both at home as well as in workplace.

People worldwide have developed the trust in the products and service of the company. Samsung is on second position in terms of user base. The company has ensure the products and service are useful for everyone. The company’s vision is to make people life easy through their innovative technology (Ivy, 2008; pp 288-299).

Process

Process is the way to decide a flow of a service which can be delivered to the end customers.

Process is the defining factors as it ensures that the service provider that standard of service should be delivered each time to the customers. The companies should have a blue print of the detailed process about their service deliver.

Samsung being one of most famous brand not only for its products but also for their user base, innovative technology and new & new products. The process of delivery for the company can start right from the manufacturing the product, promote their product, packaging of their product, features of the products as well as the sales of the product.

The Company has an organized and detailed process for all its stages that has made it possible for the organization to concentrate on every department of operations.

Physical Evidence

Physical Evidence is one of the last factors of service marketing mix. Physical Evidence can be used as one of the differentiator in service industry. All the things or the objects that recalls the brand in the mind of customer is physical evidence. The physical evidence of any service provider enhances the experience of customer.

Samsung spend a huge amount on their presence of their products through different channels. Samsung advertise highly through the print media as it is one of the most important channels of physical evidence.

In the retail stores of Samsung and all advertisement broadcasted through different channel is one of the examples of Physical evidence.

Brief to the Agency

Samsung ranks on 2^nd position on user base. Apple has the highest market value and Samsung ranks 2^nd after Apple. The company has believed to touch and make simpler life for every person through its innovative technology and inspire the people.

Samsung manufactures products for all the segments and it categorize its products in telecom industry and house hold electronics. Samsung electronics is smartphones market leader. Samsung is also one of most trusted brand for mobile phones worldwide. Samsung has also rose their profits from last quarter and it is due to high sales revenue which flow through the sales of mobile phones. Maximum amount of the revenue of the company flows from the sale of mobile phone.

Integrated Service Marketing Plan

Integrated service marketing communication is an idea to achieve the objective of marketing campaign through the different marketing strategies that are intended to reinforce each other.  It is designed specifically to ensure that all the messaging and communication strategies are unified across all the channels.The Integrated service marketing model consists of four elements and the organization to promote their brand across their target audience with the aim in increasing the sales of their product.

The model aims to deliver the right message to the right audience at the right time.

There are other marketing communication models through which promotional activities can take place such as Social Media. This area represents more opportunities for leveraging Integrated Marketing strategies (Schultz,1992 pp 99-104). For Samsung, it is recommended that it should have an increased budget on social media marketing platforms and it should have best in class process in place. The bottom line is that the consumer should get the best experiences through Samsung processes

Reference

Kim, S.Y., Jung, T.S., Suh, E.H. and Hwang, H.S., 2006. Customer segmentation and strategy development based on customer lifetime value: A case study. Expert systems with applications, 31(1), pp.101-107.

Lee, S.J., 2011. Dynamic Capabilities at Samsung Electronics: Analysis of its Growth Strategy in Semiconductors.

Moon, H.C. and Lee, D., 2004. The competitiveness of multinational firms: A case study of Samsung Electronics and Sony. Journal of International and Area Studies, pp.1-21.

Goi, C.L., 2009. A review of marketing mix: 4Ps or more?. International journal of marketing studies, 1(1), p.2.

Ivy, J., 2008. A new higher education marketing mix: the 7Ps for MBA marketing. International Journal of educational management, 22(4), pp.288-299.

Schultz, D.E., 1992. Integrated marketing communications. Journal of Promotion Management, 1(1), pp.99-104.