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Samsung S4 Marketing Mix

An Excellence Level Year 11 NCEA L1 Economics Project

rowan mccomish

on 28 August 2013

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Transcript of Samsung S4 Marketing Mix

Samsung Galaxy

The Samsung S4 comes in a box that looks like it is made of wood. This will be to appealing to business people and people of a higher social class as it looks as though it is of a higher quality than just a plastic or cardboard case. It is designed to make the owner of the new phone feel special. It can also be recycled as a pencil holder and is in its self, fully recycled. The Samsung S4 has made great bounds in design since its original version- the S1 was introduced. The thickness has been greatly reduced which in turn reduced the weight. This is useful as it feels thinner in pants pockets and feels less of a burden. However, it has become taller and wider. This has the benefit of having a larger screen but it also takes up more room. The colors of the S4 (Black Mist and White Frost) are "designed to match your style". This phrase used in the marketing of the S4 appeals to the young and fashionable who care most about their image and social status.

Product Life Cycle
The Samsung S4 is starting into its growth phase. It has been approximately a month since the launch of the S4 and it has already become well known and publicized throughout its target market via successful advertising. Their advertisements can be seen almost everywhere their target market (18-35) frequents. They can be seen on TV, in the newspaper and on bus station walls. Knowledge of the product will have spread via these means and most of the prospective customers already know of the product. It will probably start its decline period when the S6 is released provided that there is the same increase in technological discoveries as there have been in the past 3 years. We can inference this from the Galaxy S2 and its product life cycle.
Handset- $1049

With Telecom XT network specific.

Noel Leeming- $999
Dick Smith- $999
The Warehouse- $949
Harvey Norman- $999
Expert Infotech - $869 (parallel importer)
Competitors Price Strategies
Nokia Lumia 920
The Lumia was released on the 2nd of November 2012. This means that it is at the end of its growth cycle and approaching maturity. Nokia will be aiming to maximize sales and as Nokia does not have the same brand image as Samsung they rely on cheaper prices for a very slightly lower quality in order to sell the product. The camera is 8.7MP as opposed to S4's 13MP. The Lumia is slightly more compact with a 4.5' screen- 0.5' smaller than the S4. The S4 has almost twice as much talk time as the Lumia at 16 and 9 hours respectively. The Lumia's maximum memory is 32GB- half of the S4's 64GB. Because of these differences the Lumia's target market would be late teenagers and people in early 20's rather than businessmen.
The One was released on the 22of march 2013 and so is at the end of its growth period. However, the One took 2 months to reach 5mill unit sales. Compared to the iPhone 5's 5 mill in 3 days and the S4's 10 mill in one month this is very slow.
this lack of growth can be associated with HTC's small market share and sparse advertising. Specification wise it is equal with the S4. the screen is almost identical in size to the S4 and it weighs just 13gm more. the internal memory is the same in both - 64GB but the One does not have any microSD card slot. the camera on the One is a lot better and so is the sound system with forward facing speakers. The Price means that the One will not appeal to the teenager market but more people in their late 20's.
Apple iPhone 5
The iPhone was released on the 30th of July 2012. It is now in early maturity stage. As Apple will lower the price over the next few months the number of purchases will also decrease. The screen size is only 4' but has a higher pixel density than the S4. it weighs almost 20g lighter which will be mostly due to it's smaller screen. the speakers and camera are slightly worse than the S4. Apple have changed all the connections with the iPhone 5 meaning that chargers for previous generations will no longer work. this is a very good ploy which forces all owners to but an entirely new set of cables, maximizing profit. All of Appple's products are marketed for any age but their high prices mean that not everyone can own one therefor making their target market the "upper class" of society
Samsung S3
The S3 was released on the 3rd of May 2012. this and the fact that a newer model is out means that it is in the middle of the maturity stage. the S4's screen size has increased slightly on the S3 and the weight has been reduced very slightly. the camera on the S4 has been upgraded but the memory is the same. The main upgrades on the S4 are programming wise. The target market is the same but as the S3 is a comparatively outdated version it is cheaper and therefor the target market will be people of a slightly lower socio-economic class.
Blackberry Z10
The Z10 was released on the 31st of January 2013 but its sales have never really picked up. this could be due to either the price being too high but more likely the advertising and Blackberrys market share are to blame. Blackberry was one of the forerunners in early phone technology but it has never really adapted to modern technology. the screen is smaller tha the S4 and the memory is a quarter of the size. the price is fitting then as it is several hundred dollars less. the target market of the Z10 is people wanting to upgradfe to a smartphone.
Pricing Strategy
iPhone Competition
One reason that the S4 has been priced lower than expected is competition by Apple. The new iPhone5S is rumored to be released cheap in order to attain market control. If Samsung does the same then a price war could ensue meaning that the profits of both companies would drop until one cut their losses and stopped. This would mean that the customer would enjoy a lot cheaper prices for good quality products.
Cost of S4 vs Price
The S4 costs Samsung approximately NZ$307 (IHS) to make. they are retailing the handset at $1049. That is a $742 profit. They are pricing it high to get the maximum amount of turnover for the highest price. the optimum trade off would have been found via lot of market research. This would have cost Samsung money but it would have payed off if they got their calculations right. The breakeven price would be about $400 when labor and other production costs are accounted for. A lower price would make a higher turnover but a lower profit due to the revenue barely outweighing the cost. A higher price would result in a much lower turnover which, in turn, would lead to low profit. This is because the revenue would not balance out the turnover. From this we can deduce that, assuming ceteris paribus, turnover is inversely proportional to price and their will, at some point be an optimum price. The price would be attained via researching the target markets disposable incomes and their preferences.
Effect of Target Market
The target market of the S4 is the wealthy business class and young socialite. It is considered a fashion statement and a "life companion". The design, status and features that comes with owning one is a perfect companpion to any fashionista or real-estate agent. Samsung have priced this to be beyond most peoples disposable income. The price isn't really a factor to a wealthy person but it is still top of the line and will sell at the price. This means that most people save for it in order to own one. The high price only adds to the sense of exclusivity that comes with it. On the other hand some people buy it for its features, of which could be very helpful to them or to make life more enjoyable.
S4 Channel Of Distribution
Once the S4 is in New Zealand the only channel of distribution for the S4 is via appliance or technology retailers. There are no shops in New Zealand that are Samsung only retailers. There was a shop like this in the Re:Start mall but it was removed after a short while. Noel Leeming, Harvey Norman and other tech shops are now the only retailers of this outside the internet. Consumers no longer have to use the conventional means of shopping thanks to the internet and the postal service. Obtaining a product this way or via a parallel importer will make the phone cheaper due to the lack of another set of costs to cover from another firm (wages, power etc). Internet shopping in this way could soon outnumber conventional stores due to the ease and cheaper prices. Phone providers also stock smartphones at a cheaper price because they are sold with plans. The decreased price of the phone is balanced by the cost of the plan that it is sold with. For example Telecom could provide the handset free if you signed up for a 24 month plan. To get to the retailer the S4 is either shipped or flown into NZ and driven to the retailer.
Competitor Channels of Distribution
Samsung's main competitor, Apple, has a chain of stores around new Zealand. YooBee only stocks Apple products. This has no effect on the price as the prices are the same as they are at Noel Leeming. The prices are the cheapest at parallel import stores rather than large corporations. Nokia does not have a store and neither does HTC. In terms of profit there is no benefit apart from impulse buys. When in YooBee the shopper is surrounded by Apple merchandize. It is one massive advertisement for customers who are in Apples corporate clutch- there is no other brands to select from and therefor a higher chance that they buy an apple product. the main reason that there are very little brand only shops in NZ is because our population is not enough to sustain the companies. The available range is also immense- if there weren't so many products appealing to the same target market then the possibility of one brand only shops would be a lot more feasible.
Other Channels of Distribution
The internet is one of the main channels of distribution for any product. If a product exists then it can be found and purchased anywhere on the internet. Most companies use this to their advantage by having a homepage that consumers can visit and purchase online. This is then delivered to the consumer via the mail service for a small fee. The main channels of distribution for a tech product are the internet and large chains of businesses. Of course the products are attainable in cheaper ways such as theft or dingy little copy shops but the majority of customers will choose the mainstream ways. Different channels of distribution also appeal to different target markets. Younger, more technologically savvy customers are more likely to purchase products via the internet whereas older customers are more likely to visit stores as it offers them another way to interact with other human beings as some elderly people can feel isolated because of their physical problems.
Target Market
The target market of the S4 is the wealthy,young business class who require it as a job tool and young socialites who have it to be fashionable. In short the 'millenials'- people born after 1980. They will all have either a medium disposable income to begin with or have enough income to be able to save up for the S4. They will mostly venture out into social environments, e.g malls, where there are lots of advertisements. The target market will also have a desire to use modern technology and be adept at it. Thanks to the Google play market there are many games, applications and music that can be downloaded- there will be something for everyone.
excellence please
Product Description
The Samsung Galaxy S4 is a smartphone made by Samsung in Korea. It can connect to 2G, 3G and 4G networks. It is the newest release in the Galaxy S series. Samsung have poured all of their effort into this product and concentrating on adding more features such as the Dual Shot function on the Camera (superimposing a photo from the camera on the other side of the phone in a corner of the main photo). This feature and many others like it are its main unique selling point. The consumer can also mess around with the file systems easily making it more appealing to people who are interested in technology. This sets them above Apple, whose products are designed for the technologically slow and who want a phone to work out of the box. It also makes it more like a hand held computer which is very handy to people who need a computer while out of the office. This phone is used by business people and wealthy youths both as a business aid and a fashion statement.
Promotion Strategy
Samsung's main advert concentrates on 4 main areas of life the S4 will improve - convenience, fun, relationship and care. The convenience section features a lady in her 30's- the age of the target market. one of the features Samsung mentioned was SmartPause. when the user looks away the video currently playing pauses itself and replays when the user looks back. this saves time for the user and allows the user to place it down and come back to it at their leisure. this appeals to people with a busy life- the businessy people in the target market. the phone can be paired with a Samsung TV to stream videos from the phone and play them on the TV. Under Fun Samsung shows Group Play. It features young adults. It involves playing music through several phones- one playing bass, one lyrics... etc. this will enhance the quality of sound and make listening to music social. In the relationships section it shows texting, that when received in a different language, automatically translates it. this makes communicating friends who speak different languages. This would be helpful for people who have just returned from their OE and who have made overseas friends- people in their early 20's. The care section includes an inbuilt and detailed fitness app. this will help any people who want to keep in shape. Overall the advertisements feature people in their 20's and early 30's and showcases the features that would appeal to the target market most.
Promotional Methods.
The main method Samsung uses is pull. They do this by offering unique points that no other brands have and by having an excellent brand image that comes from high quality products. They do not really provide any discounts as this would be up to the retailer and this can vary a lot depending on the number of stock and if it was parallel imported or not. They advertise a lot which is helped by their brand image and market share. Personal sales is only really applied by the retailer as customer service by employees. this, unless in an Samsung shop, in completely uncontrollable by Samsung. With smartphones, which are expensive products, competitions are unlikely to be profitable in the short term but may generate increased interest in the long term.
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