Samsung's Competitive Strategies for Capturing Market Share

This assignment explores the strategies adopted by Samsung, Apple, and Xiao Mi in the tablet market. The key factors that contribute to their success include innovation, pricing, distribution channels, and marketing mix. Samsung's focus on constant innovation, Apple's emphasis on high-quality products with strong after-sales support, and Xiao Mi's competitive pricing and online presence are some of the strategies that have enabled them to maintain a strong market share.

1/1/2017
Done By: She Poh Tin, Magdalene Chiang Nga Mun, Jane Tan Zhen Jie
Rayna Chew Poh Geok, Jason Ong Bing Qi, Adriel Ang Beng San|
Marketing Samsung Tomorrow

Table of Contents
1. Company Background................................................................................................1
1.1 Samsung.....................................................................................................................1
1.2 Apple Inc....................................................................................................................1
1.3 Xiao Mi.......................................................................................................................2
2. Samsung Target Segment...........................................................................................4
2.1 Geographic Segmentation..........................................................................................4
2.2 Demographic Segmentation.......................................................................................4
2.3 Psychographic Segmentation......................................................................................5
2.4 Behavioral Segmentation............................................................................................5
3. Value proposition and positioning..............................................................................6
3.1 Product Specification..................................................................................................6
3.2 Perceptual Map...........................................................................................................9
3.3 Product Life Cycle....................................................................................................10
4. Pricing Strategy........................................................................................................12
4.1 Skimming Pricing – Samsung..................................................................................12
4.2 Prestige Pricing – Apple Inc.....................................................................................12
4.3 Penetration Pricing – Xiao Mi..................................................................................12
5. Promotion.................................................................................................................14
6. Place.........................................................................................................................15
7. Recommendation......................................................................................................18
8. Conclusion................................................................................................................19
Reference............................................................................................................................20
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1. Background of the Company
1.1 Samsung
Samsung is a multinational corporation of South Korea which is headquartered in town of
Samsung Seoul.
Samsung was started by Byung- Chull in 1938 and the main focus of his business was
mainly the trade export of products like Korean fishes, vegetable and fruit to Beijing. Slowly,
they expanded their business to include flour mills and confectionery machines. (Samsung, 2008)
During the 80s, they shifted their core business into technology and started to expand and
diversified significantly. Different entities were created to focus on different markets. Samsung
Aerospace industries was launched to develop aerospace capabilities. Samsung Data systems was
established in 1985 to focus on information technology services like system integration, system
management, consulting and networking services. (Samsung, 2008)
Today, they are considered as a conglomerate where they have diverse business spanning in
different industries like Petrochemical, medicine, finance, hotel and many more. Their flagship
business of Samsung Electronics lead the global market in high tech electronic manufacturing
and digital media. (Forbes, 2016)
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1.2 Apple Inc.
Apple Inc is a multinational company which create computer, consumer gadgets, server
and computer software. This company was created by Steve Jobs and Steve Wozinak on April
1 ,1976
In the early stage, Apple’s strength was in their personal computers, such as Apple II,
Macintosh and Power Mac line. They also faced setbacks during the 1990s because of the rocky
sales and low market share. In 1998, Steve Job introduced iMac which was a new product based
on the new corporate philosophy of having a recognizable products and simple design.
(Rawlinson, 2016)
Apple managed to establish itself as the leader in the consumer electronics and media sales
industries because of the success they have achieved with IPOD music player and also ITunes
store which sells content.
Apple’s worldwide annual revenue in 2012 was $156 billion and is now considered as the largest
publicly traded corporation in the world by market capitalization. (Rawlinson, 2016)
1.3 Xiao Mi
Xiaomi was co-found by 8 partners on 2010 and their first smart phone was released in
August 2011. It is a private held company and is the world’s 4th largest smart phone maker. Xiao
Mi has different types of product which includes smart phone, mobile apps, laptops and related
consumer electronics. (Xiaomi, 2016)
They gained a lot of market share in mainland China and was able to create more new consumer
electronics like the smart home devices. (Ahmad, 2014)
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Xiao Mi is the world’s 4th valuable technology start-up because of the US1.1billion funding
from investors which pushes the valuation to more than US$46billion. They had also started to
enter the Indian market in July 2014(Xiaomi, 2016)
Target Segment of Samsung
2.1 Geographic Segmentation
Products of Samsung can be found through 61 different nations in the world. They can be
found in 3 different regions, Northern, eastern and southern areas. Different market has a slight
variation; this will allow the product to be more user-friendly. Their products can be purchased
by the end-user through E-commerce platform such as their own websites. (Samsung, 2008).
2.2 Demographic Segmentation
Samsung demographic segmentation is based on several variation: Age range, Gender,
level of income, occupation and education.
 Age Range: Samsung targets on the consumers who are 13 years old and above.
 Gender: Samsung does not segment the market by gender, their product target on both
segments.
 Income Level: Samsung develops products for consumers of low-income level to those that
have high income level.
 Occupation: Samsung target consumers with various occupation, from students to CEO of
MNC companies.
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 Education: Samsung products were meant to target both educated and uneducated
consumers
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2.3 Psychographic Segmentation
Segmentation based on Psychographic dimensions divides the entire market into various
groups based on personality, lifestyles and social class. Consumers that have a higher social with
a higher social class tend to purchase Samsung. Both sports and outdoor oriented consumers will
prefer Samsung because they have water resistant tablet. Samsung’s product aim to be something
for every consumers.
2.4 Behavioral Segmentation
Consumers received their information on Samsung Product via advertisement which is on
the internet and social media platform. In the case of Samsung, the Galaxy Tab is one of the
creations which is responsible to influence how the consumers will behave in the present era.
Depending on what benefits the consumers are looking for, they are actually targeted
differently. In the case, whereby the consumers are looking high quality goods, there might be
others who are more interested in competitive pricing products or service-oriented product. There
are also cases where there are loyalty programs which entice consumers to buy solely on
Samsung products.
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1.Features Samsung Galaxy Tab
S 10.5 iPad Air 2 Mi Pad
2.Dimensions  240 x 169.5 x
7.5 mm
 247.3 x 177.3 x
6.6 mm
 200.4 x 132.6 x 7
mm
3.Weight  467 g  478 g  322 g
4.Material
Build  Plastic  Aluminum  Aluminum
5.Colors  Black, White  Black, Gray,
White, Gold
 White, Pink, Black,
Blue, Yellow,
Green
6.Display
(size)  10.5”  9.7”  7.9”
7.Display
(resolution)
 2560 x 1600
pixels 2048 x 1536 pixels  1536 x 2048 pixels
8.Display
(type)
 Super
AMOLED  IPS LCD
 IPS LCD
capacitive
touchscreen, 16M
colors
9.Fingerprint
Sensor  Swipe  Touch  Nil
2. Value proposition and positioning
3.1 Product Specification
Based on Design & Display Features
Samsung Tablet Rating:
iPad Rating:
9
63%
25%

Mi Pad Rating:
Features Samsung Galaxy Tab S
10.5 iPad Air 2 Mi Pad
1.Camera
(Back)  8 megapixels  5 megapixels  8 Megapixels
2.Camera
(Front)  2.1 megapixels  1.2 megapixels  2 Megapixels
3.Hardware
Feature
 Autofocus,
CMOS image
sensor
 Autofocus,
Back-
illuminated
sensor (BSI)
 Autofocus, Back-
illuminated
sensor (BSI)
4.Software
Feature
 Digital image
stabilization,
Digital zoom,
Geo tagging,
Self-timer
 Face detection,
Digital zoom,
Self-timer,
Digital image
stabilization,
Touch to
focus, Geo
tagging
 Face detection,
Digital zoom,
Geo tagging
5.Shooting
Mode
 Burst mode, High
Dynamic Range
mode (HDR),
Scenes, Effects
 High Dynamic
Range mode
(HDR)
-
6.Setting
 Exposure
compensation,
ISO control
 Exposure
compensation -
10
12%

Based on Camera & Video Features
Samsung Tablet Rating:
iPad Rating:
Mi Pad Rating:
11
16.7%
0%
83.3%

1.Features
Samsung Galaxy Tab
S 10.5 iPad Air 2 Mi Pad
2.RAM  3 GB  2 GB  2 GB
Processor  Octa-core, 1900
MHz, ARM
Cortex-A15 &
ARM Cortex-
A7
 Dual-core, 1400
MHz, Cyclone,
64-bit
 Quad-core, 2200
MHz, ARM
Cortex-A15
3.Split-screen
multitasking
 Multi Window
mode
 Single Window
mode
 Single Window
mode
4.Built-in
storage
 32 GB  128 GB  16 GB
5.Storage
expansion
 microSD,
microSDHC,
microSDXC up
to 128 GB
-  microSD,
microSDHC,
microSDXC up
to 128 GB
6.Battery
Capacity
 7900 mAh  8820 mAh  6700 mAh
Based on Hardware Features
Samsung Tablet Rating:
iPad Rating:
Mi Pad Rating:
12
58.3.5%
33.3%
8.4%

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3.2 Perceptual Map
Based on the Perceptual map in the above picture, we can deduce that Samsung Galaxy
tabs has an advantage in terms of the design and display features as compared to the other brands.
The lightweight Galaxy tab also allows the consumers to carry it easily making it suitable to use
it daily. Since the material is made of aluminum, consumers will not be afraid that it could be
damaged easily. Consumers can also enjoy its wider display size by using it for presentation or
simply an interface which is beneficial to the aging population who tends to have a weaker
eyesight.
We must not overlook that Samsung operates on Android Operating system, which allows
it to be compatible product which can be found easily in the market. This could be a competitive
advantage which Samsung has as compared to IOS which needs constant update and is
compatible only with mostly Apple Inc product.
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3.3 Product Life Cycle
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Samsung
Samsung has been increasing their market share in tablet products and as a result
overtaking Apple in terms of sales. (Forbes, 2014). The enhanced features of Samsung Galaxy
Tab S10.5, which include a better resolution, an increase in screen size, a bigger ram, and larger
pixel have helped Samsung earn better patrons. Although Apple is their biggest competitor,
Samsung captures a large share in the market, and is relentlessly developing itself to improve in
the versatile shopper market in preparation for more competitive years to come.
Apple
Apple tablet is in the mature Stage of the Product life cycle. They have to continuously
enhance their product feature to make it more appealing than competitors. Apple might also need
to lower their pricing because of the increased competition.
According to its annual report, there was not much increase in the amount of growth from
the iPad Mini to the iPad Air 2, which explained lackluster sales.
A likely explanation could be, it takes a longer time for consumers to have their tablet
replace and this has resulted in the decline on the requirements. (Forbes, 2014)
Mi Pad
Xiao mi is in the growth stage of the product life cycle. The strategy for Xiao mi is to
have stronger promotion at the wider audience to capture higher market share. They should also
increase their distribution channel to cope with demand.
Even though, the Pricing for Mi pad could be lower than both Samsung and Apple tablet,
consumers still take a look into the quality of the product. This has been reflected where
consumers are not keen to purchase Mi pad because of the software setup which is unreliable and
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unstable. With poor quality, it is natural that it takes a hit on the consumers’ confidence level
which lead to the weak competition in the tablet market (Marshall, 2016).
3. Pricing Strategy
4.1 Skimming Pricing – Samsung
Skimming pricing strategy was adopted by Samsung for their product. This strategy allows
them to sell the product at a high price during their newly launch product in the market. . Pricing
will gradually decrease as time goes by because the model is getting old and the competitors have
launched a similar or a better version of the product. Samsung has been successful in keeping
their competitors away and it could be the result of this strategy. (Bhasin, 2016).
4.2 Prestige Pricing – Apple Inc
Prestige pricing strategy is adopted by Apple for all of their products. Apple has a strong
followings of fans and consumers who are always supportive of their product and do not hesitate
to pay a high price for their products. They were able to position their products and the positive
association with its brand that the perceived value is much higher than the pricing that they had
set.
They are able to reach out to their target segment, which uses its products as status symbols of
wealth and prestige. Apple tend to not decrease the price over their product life cycle and they
seldom do promotion deal because they believe that it will have a negative impact on their
branding from which they get the most value out of it. (Nielson, 2014).
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4.3 Penetration Pricing – Xiao Mi
Penetration pricing strategy is used in Xiao Mi products as it is in an immensely competitive
market. They had understood that their target segments are consumers who might not be able
afford either Samsung or Apple Tablet. Therefore, their products are focus on having the basic
features. This in turn makes the pricing affordable for all the consumers.
The strategy to kill their competitors and to increase their market was to set an affordable
pricing to the consumers. They are also aware that they cannot produce tablet which are of low
quality because it is a critical component when the consumers are evaluating their options. This
will increase their chances of the consumers to switch them.
The companies do not spend heavily on marketing; instead they focus on the distribution
channel and the word of mouth. This strategy has proven to be working well and they might be
more product oriented once they have built a strong brand. (Kumar, 2014).
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5. Promotion
Samsung
Samsung design their promotion strategy in such a way always associated as a cool
branded product. They invest heavily on their promotional tool to create consumer awareness.
They are always actively involved in big sporting events in the entire world such as the FIFA
world cup, the Olympic Games. (Samsung Village, 2008)
In Korea, the idol culture is very strong which means that many fans will try to emulate their idol
in terms of what they wear and what they carry. This has resulted Samsung to get those famous
K-pop idols to front their advertising campaign. (Roose, 2013).
Samsung has also uses various social media platform to capture the younger target segment. They
will frequently update their social media platform sharing their latest product and how it will
benefit the consumers. (Bhasin, 2016).
Sometimes, the booths for Samsung can be seen around the malls offering many discounts
and offers to its trade partners or customer to boost its sales.
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Apple
Apple is always ahead of the trend; always bringing fresh ideas and making consumers interested
in the product.
One notable advertising campaign that Apple does during product launch was the Keynote event.
Each time, there is a new product launch, the CEO of the company will be presenting the new
product to all the excited. This creates a lot of buzz and excitement leading up the Keynote event.
Consumer will always be curious on the new specification, especially for those that are interested
in technology.
On top of those, Apple will also advertise the product through personal selling through their own
Distribution channel. (Greenspan, 2015)
Xiao Mi
Since Xiao Mi is an e-commerce company, their advertising is solely based on the internet.
Xiao Mi emphasis heavily on social media marketing channel such as Weibo, which is huge in
China.
They use giveaways and discounts to entice people to follow them in the first place. They had
allowed the fans to have a say on the development of new products to how is the products is
marketed. ( Android authority 2014)
One of the way Xiao Mi runs the social media campaign differently from their competitors is
that, every product has a Weibo account of its own. They have a strong online community which
allows them to share their knowledge on their product. (Millward, 2014).
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6. Place
Samsung
Samsung distribute their tablets via retail channel. They will engage with big distributors
who are prominent in the market. Big electronic retails such as Courts, Harvey Norman and EE
ming mobile are chosen because of physical stores that they have. It allows consumers to come
and feel the product.
In this digitial era, Consumers can also purchase online such as Amazon. Samsung has also tied
up with telecommunication companies to provide bundle deal to entice the consumers.
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Apple
Apple do not give access to any retailers who wants to carry Apple product in the shop.
Instead, they focus select a few distributors to distribute their products. Usually it will be either a
big retailer who provide electronic products or those that are dedicated in selling Apple product.
For those dedicated retail stores such as Nubox or Epi Centre, selling their Apple product, they
have a standardize layout to follow. This means that any consumers who walk into the Apple
store will have the same visual impact. Telecommunication companies like Singtel, Starhub and
M1 also sell Apple Tablets together with their data plans.
Apple also sell their products online, which allows them to bring convenience to consumer. They
have strong follow up process, letting the customer know real-time the status of the order.
Xiao Mi
Most of the customers that Xiao mi have are from China, partly because it is a China brand.
Currently, Xiao Mi is able to capture market share mainly from China, Malaysia and Singapore.
This is because their pricing is much more competitive than Samsung and Apple. There are no
physical store in Singpore where consumers can buy off the shelves.
However, consumers looking to purchase their product can find in our websites like Lazada or
Aliexpress. It is consider that their product are still easily accessible, which allows Xiao mi to be
competitive.
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7. Recommendation
Constant innovation will be the key success factor for Samsung. For example, Samsung
can introduce a wide range of color for the tablet instead of providing a few option to the
consumers. One of the features that can be improved will be the battery capacity. Consumers are
spending higher amount of time on the electronic products, it is essential not to neglect the basic
features which could improve consumers’ daily life. In addition, a larger storage space will also
be helpful to ensure that consumers do not have issue to find space to keep the items.
In term of features, Apple has an advantage because they do have a high storage capacity as
compared to Samsung. This will attract consumers who tend to store their data in the phone.
Samsung should also adopt penetration price strategy to attract more market share.
In terms of distribution channel, Samsung should create a powerful online shopping experiences
which allow the Samsung consumers to buy the product online, it can also be consider as a part of
the marketing strategy.
.
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8. Conclusion
Samsung’s advanced technology and innovative products which are easily integrated into
our daily lives, deserved to be the leader in the technology market. They managed to stay on top
of the game by adopting different polices such as the 1-to-1 exchange for a period of six months,
Samsung care centers and also after-sales policies. As long as Samsung does not neglect their
quality control and continue to innovate, it is very likely that Samsung will maintain its position
as a leader.
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