Seminar assignments - Marketing plan, Samsung PDF

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Marketing Plan, 2014, samsung...

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Marketing Foundations Assessment 2: Marketing Plan

Executive Summary

The purpose of this marketing plan is to outline the marketing strategy that Samsung Electronics will implement for their new Galaxy Ring. Samsung Electronics introduced their largely successful Galaxy range of smart devices in 2009; now in 2014 the company is introducing the newest addition to the series, the Samsung Galaxy Ring. The marketing plan aims to initially examine the market for the Galaxy Ring by considering factors pertaining to competitor, PESTL, SWOT, and SMART analyses. The primary target market is university students, the secondary target market consists of two groups - business workers and the elderly. The marketing mix for each target market is explored, and a promotion budget for the Galaxy Ring has been developed. Recommendations for the marketing strategy have been identified and an evaluation of the strategy has been provided.

2.0 Overview

Founded in 1938, Samsung Group has grown from a simple exporter of produce and food goods into a multinational company spread across many industries. Samsung Electronics is one such subsidiary created in 1969; specialising in household electronic appliances such as TVs and microwaves. As the company began to grow rapidly, Samsung Electronics soon spread into other markets and has experienced exponential growth over the years; with the company currently sitting 14th on the global top 500 revenue list and 2nd on the global top 500 most valuable brand list. A popular product range introduced by Samsung Electronics in June 2009 was the Galaxy series. The Galaxy range introduced consumers to the first smartphones offered by Samsung, with the Galaxy S phones quickly becoming one of the most popular smartphones sold globally. As the Galaxy series obtained more followers, Samsung began to expand the product line, offering the market Galaxy tablets, phablets, smart cameras and more recently smart watches. A key selling point to this range was the ability to sync multiple devices and have them interact with each other at the touch of a finger; allowing users to incorporate technology effortlessly into their everyday lives. The Galaxy Ring is a new innovative product Samsung Electronics plans to introduce to the market that will add another element to the Galaxy range. The Galaxy Ring is the first of its kind and enables a user to control their environment wherever they are. The ring is worn on a user's finger and is able to connect to multiple smart devices, giving the wearer the ability to wirelessly control multiple devices with a simple gesture. The ring allows a user to do some of the following:  Create text messages by gesturing letters from an in-built alphabet  Control house appliances such as TV’s and lights  Create and program new gestures to control other appliances/smart devices  Open source software enables users to become developers for the new ‘ring store’ Samsung Electronics vision for the new decade is to “Inspire the World, Create the Future.” The Galaxy Ring aims to achieve this by introducing a new technology to the market; one that has the potential to grow into a great product, offering many benefits to multiple consumer groups.

3.0 Situational Analysis 3.1 Competitor Analysis

Electronic gadgets are available almost everywhere nowadays; therefore this market is very competitive. Samsung Electronics strong product which combines the possibility of all activities at the tip of your finger is a new and innovative idea. Hence, it is possible to achieve a monopolistic market at first as there are no other direct competitors. Other companies such as Apple and Nokia can potentially create similar types of products. Samsung Electronics has to keep on innovating the ring in order to stay on top of market and have the majority of market share, offering consumers more at the augmented level of the total product concept. Apple is a strong competitor as it currently holds the majority of the smart devices market share. If Apple were to develop a similar product to the Galaxy Ring in the future, Samsung Electronics will need to keep on innovating to maintain their market share. Samsung Electronics’ current advantage is that the company is launching the Galaxy Ring first in the market which will enable Samsung Electronics to gain more experience in this new area. Google Glasses are a strong competitor for the Galaxy Ring as it is a current motion sensitive gadget leader. Its major advantage is the product’s ability to inform the user of everything directly in their field of view. The Galaxy Ring will be more focused on hand movement, writing, and other controls related to hands. Since Samsung Electronics is also in cooperation with Google, it is recommended to form a partnership with Google; rather than competing with their product. In this way, the Galaxy Ring may be complemented by the gadgets that have already been developed to add a visual element to the Galaxy Ring. The primary target market competitors for Samsung’s Galaxy Ring are as follows: - Apple - Google Glasses - Leap Motion - HTC

3.2 Political, Economic, Sociocultural, Technological and Legal forces (PESTL)

Political and Legal Factors Political and legal factors such as political stability, government policy, laws, and regulations have an enormous impact on how companies such as Samsung Electronics carry out their business functions. Samsung Electronics is required by law to comply with regulations have been put in place pertaining to the maintenance of market efficiencies and the protection of consumer rights when implementing marketing strategies for the Galaxy Ring. Under the Trade Practices Act, Samsung Electronics is protected from negative publicity, expensive civil damage suits, and potential fines if the company complies with all relevant restrictions when developing the marketing strategy for the Galaxy Ring. Several laws exist in regards to proper advertising practices and the handling of disadvantaged consumers that Samsung Electronics must take into consideration when planning marketing strategies. Samsung Electronics is required to adapt their marketing strategy to comply with current and anticipated future laws and regulations. Economic Factors Interest rates, economic growth, inflation, and disposable income are a few economic factors that will have a significant impact on how profitable Samsung Electronics will be from the release of the Galaxy Ring. Macro-economic factors such as that of interest rate control and taxation policies aid governments in managing demand. Micro-economic factors such as disposable income and unemployment rates determine how companies and individual consumers will spend their incomes. It is essential for Samsung Electronics to monitor economic conditions and trends when planning the marketing strategy for the Galaxy Ring. The health of the economy will have either a positive or negative effect on the level of disposable income available to consumers and will therefore influence the price consumers are willing to pay for the Galaxy Ring. Sociocultural Factors The success of Samsung Electronics’ Galaxy Ring marketing strategy will be determined by how well it reflects the needs and desires of consumers. Environmental awareness, age distribution, career attitudes, and health consciousness are some sociocultural factors that Samsung Electronics must take into account when defining consumer needs and wants. A key sociocultural issue that has become increasingly relevant in the past few decades is the issue of environmental sustainability (Elliott, G. et al 2012). By understanding the importance of environmental sustainability and related issues, Samsung Electronics is able to implement a marketing strategy for the Galaxy Ring that will adequately respond to consumer concerns regarding this issue.

Technological Factors

Samsung Electronics must utilise modern technological advancements that have the capability to increase the effectiveness of the company’s Galaxy Ring marketing strategy. The adoption of new technologies allow Samsung Electronics to potentially develop and implement new methods of producing and distributing goods and services and new ways of communicating with targeted markets. These new methods of carrying out existing business processes will enable Samsung Electronics to create a business environment that thrives on efficiency and effectiveness.

3.3 SWOT Analysis Strengths

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Successful company with an excellent reputation Pre-established customer base The Galaxy range of products developed by Samsung Electronics have been well received by consumers The Galaxy Ring is a new and innovative product with a combination of unique features The Galaxy Ring is the only electronic device of its kind to implement open-source development capabilities

Weaknesses  Difficult for Samsung Electronics to execute a user-friendly design that incorporates high-levels of functionality with minimum expenditure  Sizing of the Galaxy Ring may potentially become an issue  Some existing Samsung customers that are reluctant to accept the Galaxy Ring as a viable investment as the product is a unique and revolutionary concept Opportunities  Open-source software development capabilities combined with the revolutionary Galaxy Ring have the potential to attract new customers to the market  Software developers are able to design brand new applications through the Ring Store  Developers are able to design applications that provide aid to the elderly or disabled  The Galaxy Ring will play an integral part in expanding the wearable electronics marketplace Threats  Negative criticism of the Galaxy Ring may result in a decrease in sales  Upon release of the Galaxy Ring, competition from equally successful companies (such as Apple) will arise.  Open-source software nature of the product may be at threat  Competitors may use the Galaxy Ring’s software in order to release similar products which will be in direct competition to the Galaxy Ring itself

4.0 SMART Objectives Specific: The initial objective was to get the Galaxy Ring funded, to enable production. With $250,000 being the initial goal, the concept of the Galaxy Ring was so popular that it raised

over $400,000 in the first 5 days of being released. The new objective is to complete the programming and hardware designs, before the Galaxy Ring is able to be mass-produced, and released to international consumer markets by July 2014. Samsung’s overarching goal is to make the Galaxy Ring an effectual and lucrative innovation. Measurable: In order for Samsung to determine whether the Galaxy Ring is worth investing resources in, Samsung has been able to use data from the concept release on ‘Kickstart’. Samsung has also been able to undergo product testing and the survey of customers’ satisfaction, providing important feedback on weaknesses and strengths of the product design. The information gathered is able to ultimately provide Samsung with a greater indication of how the Galaxy Ring will be received by the public and consequently, will determine whether the Galaxy Ring is worth investing in. Achievable: Due to the high levels of interest and funding indicated by ‘Kickstart’, it is obvious that the Galaxy Ring has potential to be a successful product. The Galaxy Ring could be identified as being desirable to the consumer market as it is: -Wearable Technology -Novel/innovative/creative -New and different -Makes mundane actions easier/ more interesting -Able to provide possible aid for the elderly or disabled The Galaxy Ring’s uniqueness is a critical component to its potential success and international attention. There is evidence to suggest that wearable technology has become a key technological trend of 2014, with wholesale revenues jumping to $18.5million. It would be rational to believe that the Galaxy Ring will have a major impact of the market and thus will achieve Samsung’s objectives. Realistic: The success of the product indicates that the production of the Galaxy Ring is indeed a realistic objective. Samsung Electronics is planning to release the Galaxy Ring at a price range starting at approximately $165 on first release, but hopefully moving down to the $100 mark to attract a larger number of buyers. This is known as price skimming. The Galaxy Ring being affordable to the general public makes it a more realistic product to achieve a greater sales velocity.

Time Specific: Samsung is hoping to introduce the Galaxy Ring to international stores by July 2014. With the introduction of the Galaxy Ring there will be a diffusion of innovation emerging throughout various cultures. Beginning with the innovators buying at the higher price ($165 roughly) for the new technology, moving through to early adopters, early majority, late

majority and finally laggards, where the Galaxy Ring is estimated to cost around the $100 mark. Time is an important factor to take into consideration when analysing a product’s return rate.

5.0 Target Market Samsung Electronics uses customer segmentation to identify the groups of consumers it markets its products to. This is chosen over the undifferentiated market approach (which targets products to the entire market) and the one-to-one market approach (which targets

products to individual customers) as the Galaxy Ring will not appeal to the entire market, and Samsung Electronics aims to appeal to groups of consumers, rather than individuals. Samsung Electronics will adopt a differentiated targeting strategy for the Galaxy Ring; which involves developing a different marketing mix for each target market segment. This strategy entails high costs and relies on a high market share and strong customer loyalty; both of which are currently present within the company.

5.1 Primary Target Market The primary target market is where most marketing resources will be directed; as it is in this consumer segment that a higher volume will be sold and a greater profit level achieved. The primary target market for the Galaxy Ring are 16-25 year old educated male/female students, with a male skew who are located in or near major cities. Young adults can use the ring as a device that will allow them to control their environment and encourage new skills to be learnt with the open source software. It will also encourage safer habits such as hands free car connectivity. Samsung Electronics vision of inspiring the world to create a better future can best be achieved by offering the latest technologies to the younger generation who are the future.

5.2 Secondary Target Market The secondary target market is another segment that Samsung Electronics has identified as a potential area where profit can be made. The Galaxy ring will also be marketed towards 30-45 year old business males/females who lead a busy lifestyle and currently own another business orientated Galaxy product (such as a Galaxy Note). The Galaxy Ring will be able to integrate into their daily lives; connecting to their current smart devices and allowing for quick and efficient replies to incoming messages. A final new potential target market identified by Samsung Electronics are males and females aged 65 and over who suffer from mobility issues, who could use the Galaxy Ring to control household appliances. With the ability to connect to smart power point adaptors, TV’s, lights and sound systems; the Galaxy Ring could be used by a member of this segment to gain control of their home environment without the need to move around. As this segment will not draw a large customer base, the marketing to this segment will be minimal and simply highlight the benefits of owning the Galaxy Ring.

6.0 Marketing Mix: Positioning To determine the most effective positioning for a product, the product’s current position must be understood, and an ideal position developed. However, given the Galaxy Ring is a new product; determining its current positioning is feasible only to the extent to which we measure the brand equity and loyalty inspired by Samsung itself. We can, however, influence the ring’s future positioning with respect to our target markets.

Our primary target market, as previously stated, is 16 to 25 year old educated students, located in or near major cities and with a male skew. Although we will undertake further qualitative research to understand this segment, we expect they will be technologically savvy, and particularly motivated by new trends and developments. The Galaxy Ring will be primarily marketed to this group as an innovation, appealing to their taste for new technological trends. The absence of competitors and initial exclusivity of the product will be emphasised heavily, and coupled with prestige pricing, a perception of innovation and originality will be cultivated. In turn, we expect this will influence the late adopters of the product (by which time we assume competition will exist) to choose Samsung’s Galaxy Ring over competing offers. With respect to our secondary target market, that of 30 to 45 year old businessmen and women owning a Galaxy product, we will market this product from the standpoint of enhanced functionality, control and efficiency in daily business life. By demonstrating the product’s ability to take notes in meetings, send messages quickly and other similarly timesaving uses, we aim to position the ring and Galaxy brand as synonymous with efficient business practice. With regard to future competitors, Samsung’s Galaxy Ring will be positioned through advertising and promotion as the pioneer in the new technology, allowing for price skimming strategies to be implemented successfully. For the elderly segment of the market, particularly those physically impaired or suffering from poor mobility, the Galaxy Ring is able to provide necessary assistance. Arising from the frequency it will be used, the technology must be reliable, and equally important from a marketing point of view, perceived as such. Consequently, advertising to this target segment will emphasise the reliability of the technology, and the product’s sale at reputable and well known retail stores such as David Jones and Myer complement its positioning as a reliable product. The product can also be trialled at nursing homes, with ensuing word of mouth advertising positioning the brand and product as a reliable and capable device.

7.0 Marketing Mix Strategy 7.1 Product The Samsung Galaxy Ring is a new and innovative product developed by Samsung Electronics that will add a new concept to the Galaxy series; creating a new link that is able to connect multiple smart devices, allowing a user to take full control of their environment.

In order for Samsung Electronics to have a successful product launch, marketers must be fully informed of the product and its benefits. The Samsung Galaxy Ring is a consumer product that will be purchased by individuals for their own private use; it is classified as a speciality product as it is a highly desired product with unique features that consumers will make considerable efforts to obtain. The product is currently in the introduction stage of the product life style and will be appearing in stores in the coming weeks. This is a difficult stage as their will be a lot of money invested into advertising the product to make consumers (specifically the target market) aware of the Galaxy Ring. It is not until the product reaches the growth stage that a large increase in sales will occur, resulting in profits being generated. In order to gain the attention of the primary target market, the Galaxy Ring needs to create interest within young adults and draw their attention to the product. Samsung Electronics will create advertisements through multiple media forms in order reach out to consumers. Samsung Electronics is already an established brand name and has a positive brand image with a strong customer following. With the correct marketing techniques implemented, the Galaxy Ring will be a successful product, aiding Samsung to obtain more market share.

7.2 Price The key to successful m...