Consumer Behaviour Analysis of Samsung Smartphone Industry

This case study talks about the consumer behaviour with respect to the Samsung smartphone industry. It discusses the marketing concept in relation to Samsung smartphones and elaborates on the marketing strategy of Samsung smartphones. It also states the recommendations that can help the company in making profits.

Samsung Company
EXECUTIVE SUMMARY
Samsung was founded by Byung-Chull-Lee in the year 1938 began as a trade export, selling
fish and vegetables. Now the company has grown to be an emerging global organisation. For
more than 70 years. Samsung has worked on manufacturing diverse and high-tech electronic
concept products that lead in the global market today. The recent series of Galaxy S series
has tremendously increased the market share of Samsung. This case study talks about the
consumer behaviour with respect to the Samsung smartphone industry. Since Samsung caters
to a variety of customers and deals with the global rage of customers, they must analyse the
customer preferences based on various demographic factors. Samsung is now in the maturity
stage of the product life cycle and is facing a very strong competition from local brands in
certain geographical locations as they offer similar features at a cheaper price. Samsung has
to consider the consumer reviews and try to continue improving its market position and
quality products. They also have to work on building brand loyalty and reputation. This
report discusses about the marketing concept in relation to Samsung smartphones. It
elaborates on the marketing strategy of Samsung smartphones and it states the
recommendations that can help the company in making profits.
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INTRODUCTION
The purpose of this case study is to analyse the consumer behaviour specific to Samsung
smart phone market. For this case study, we will discuss about the consumer behaviours that
affect the smart phone industry. The report begins with the information about the history and
growth of Samsung Electronics Industry Co Ltd followed by the background of the company.
The background of the company discusses about the major target audience of the Samsung
industry specific to mobile phones, industry and the competitors and the emerging trends in
the industry. It later moves and to the consumer behaviour analysis, reason for Samsung’s
success and recommendation. The case study concludes with the professional reflection.
BACKGROUND
History
Samsung Electronics Industry Co Ltd was established in the year 1969 in Suwon, South
Korea as Samsung-Sanyo Electronics. They began as a home electronics business and
quickly became a major manufacturer in the Korean market. Despite the 1977 financial crisis,
Samsung Electronics was one of the very few Korean companies that continued growing.
Samsung has now been recognised as an industrial leader in technology and now ranked as
top 10 global brand (Samsung, n.d.)
Industry and competitive market
The mobile phone technology first began in 1983 by Motorola when they launched a cellular
portable phone for commercial purposes. The first ever smartphone was created by IBM
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called the Simon Personal Communicator with the functions of a cell phone and PDA
(Twedie, 2015)
In 2002, Nokia and Motorola shared over 50% of the mobile market. The industry has a lot of
competitors such as Sony, HTC, Xiaomi, Huwaei, Nokia, Apple to name a few. Samsung
surpassed all the brands as now has the largest market share in the world in terms of number
of units sold.
Target audience
Samsung targets a rage of age groups from seniors to centennials by providing them with
products usable on a daily basis as well as products for industrial purpose. Unlike Apple,
Samsung target audience expand from young generation to consumers with lower salaries
(Manoa, 2014).
Current and emerging trends
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In order to be competitive, smartphone industry has to adopt to the constantly emerging
trends and consumer requirements and embrace advanced technology. Currently most of the
consumers see for smartphones with good cameras, fast processors, good memory, durable
battery life and sleek body. Smartphones now are definitive gadgets that combine the features
of a TV, Camera, gaming systems, video player, mp3, instant messaging services etc. The
smartphone industry is extremely dynamic even though the market is in the hands of very few
players.
CONSUMER BEHAVIOUR ANAYSIS
1. Social Influence:
Different products are perceived to be appropriate to specific social classes by customers.
Phone is necessity, but is more of a luxury product that customers hold. They prefer latest
models and top most brand depicting a form of status consumption. Most of the consumers
highly depend on their social circle in order to purchase a smartphone (Castaldi, Addeo,
Massaro, & Mazzoni, 2011).
2. Consumer Diversity:
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The Samsung smartphones are targeted for both female and male customers aged between 14
to 55. The primary purpose of the different age groups differs.
3. Physiographic factors (values and lifestyle)
The younger group of customers see smartphones as an entertainment device that includes
features like video games, social media platforms such as Facebook, Instagram for
networking. This category of customers generally does not mind paying extra to keep
themselves entertained (Garg, 2013).
MARKETING IMPLICATIONS
Samsung holds the major share of the work market in smartphone industry in terms of
number of units sold. However, in April 2018, Apple had a market share of 53.9 percent,
while Samsung had a market share of 22.27 percent. Samsung has to understand the
consumer behaviour specifically in Australia and analyse the consumer behaviour trends to
increase their share in the Aussie market by providing advantages that will allow the
customers to try a product different from their devoted brand (Jones & Lee, 2006). They
should also invest in brand loyalty to retain the past and current consumers. Samsung
partnered with Google for their android and play store while its rival group has its own
operating system. Samsung must constantly work on both software and hardware to gain a
competitive advantage in the market (Choi, Kim, & Yoon, 2014).
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However, Samsung grew such a high share on the smartphone market by offering the
customers products with exceeding features and quality at affordable prices when compared
to its competitor Apple. Samsung is now focusing on improving the design to compete with
iPhone’s elegance and casing (Lee & Lee, 2004). They are also focusing on features such as
adaptability, Camera, battery life, memory storage and other characteristics that customers
are looking for. They are surpassing all the expectations of the customers to satisfy their
requirements (Akim & Tielung, 2014).
Marketing Concept
Social identity theory states that the people define self-concept with the help of
connection with the social groups. The social identity theory can be utilised in the marketing
of Samsung mobile that can help the company in the aspect of organizational identification.
The marketing of Samsung mobile lays stress on interacting with the customers so that they
can identify with the brand. It can be said that stress is laid on collective or public self that
refers to self within the collective. The social identity theory of Samsung mobile for creation
of a healthy brand that can put the company at an advantageous position. Perceived value acts
as a significant predictor in relation to brand loyalty. The human beings in the society
undergo changes with the help of interaction with other people (Menon et al., 2015). The
identity of a person does not develop in vacuum but it occurs with the help of interaction with
societal members. The individuals in the society can be said to be members of various groups
based on gender, race and skill sets (Solomon et al., 2014).The marketing concept that is used
by Samsung mobile in their marketing approach is that the possession of the smart phone will
help in raising the self-esteem of the people in the society. The marketing concept employed
by Samsung mobile acts as a positive reinforcement for the individuals in the society.
Samsung Smartphone can raise the status of the people having it and this is made use of by
the company for selling the brand in the market.
Justification
The modern age is advertisement-driven where the behaviour of the individuals is
regulated with the help of inter-personal relationships. Advertisements help in marketing
lifestyle to the consumers. The social identity approach of marketing of Samsung mobile is
aimed at increasing self-esteem of the people. Advertisements helps in targeting members
belonging to a particular group (Baker, 2014). Self-identity of an individual can develop in
response to the other members of a group to which the individual belongs. The individuals in
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the society adopt the behaviour so that they can become members of a significant group. The
marketing of Samsung smartphone affects the identity of an individual along with the group.
Marketing employed by Samsung smart phone can change the self-concept of the individuals
belonging to a particular group. The marketing of Samsung smartphone provides opportunity
to the people in deciding whether they want to identify with that of a particular group. The
members present in an organization can define them in relation to one-ness with the
organization (Armstrong et al., 2015). The members of a specific community can engage in
particular behaviours on that of a collective basis owing to their attachment to the particular
brand. The marketing of Samsung smart phone can help the individual consumers in
modifying self-identity and they can make use of brand for defining themselves.
Marketing Strategy
Samsung has brought into the Australian market Samsung Galaxy Series smartphones
along with tablets that has helped in broadening the consumer base. Samsung smartphone
makes use of innovation that has helped it in bringing many galaxy products within the
market like Note, Y, S and the tab series.
Samsung makes use of skimming price for gaining upper hand over that of the
competitors. The smartphones of Samsung are the best within the market and they are market
leader from the point of view of the features that are provided by them. Samsung smartphone
uses skimming price that helps them in getting high value in relation to the competitors
(Lusch & Vargo, 2014). In the event of any Samsung model becoming old or competitor
launching a similar product Samsung in Australia drops prices that helps them in catering to a
large number of consumers within Australia.
Samsung makes use of channel marketing in Australia that makes the service dealers
in Australia to take into account the aspect of corporate sales. The retailers in Australia
include Samsung within the list that helps them in reaching out to a large number of
consumers in Australia. Samsung smartphone in Australia has three segments in relation to
channel marketing that is sales, distributors along with service dealers. Service dealers of
Samsung handle the main accounts and they deal with corporate sales. The dealers are
instrumental in opening exclusive Samsung showroom in Australia. Samsung is branded
product and the retailers keep Samsung like an alternative for the customers.
Samsung makes use of promotional tactics in Australia that attracts the customers for
buying the smartphone. Samsung makes use of discounts, sponsors, events and festivals for
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engaging with the consumers in Australia. Samsung takes recourse to strong tactics for
pushing product to consumer with the help of sales promotion. Samsung smart phone
provides discounts to the trade partners that motivates them in selling Samsung above the
competition. Samsung Australia makes use of push along with pull strategy so that it can
cater to the needs of the customers (Menon et al., 2015). Print along with media advertising
can be used by Samsung Australia that can help them in drawing the attention of a large
number of consumers in Australia. Samsung smartphones in Australia makes use of sales
promotions for gaining attention of people in Australia.
Samsung makes use of new ideas so that it can stay customer-focussed that helps it in
the creation of a strong brand image. Samsung provides smartphones of the best quality that
helps in meeting the expectation of the customers. Samsung indulges itself in redesigning and
it introduces new series in relation to the products as a marketing strategy. They design slim
phones that cater to the taste of the modern day consumer (Armstrong et al., 2015). Samsung
is not instrumental in targeting any particular segment of market but mainly serves high-end
people in the society like business people along with the young adults. The marketing
strategy of Samsung includes public relations and direct marketing that helps the common
people in Australia in knowing about the exclusive features in relation to Samsung mobile.
There are R & D centres in Australia that helps in developing the brand of Samsung.
Recommendations
The evolution of technology has made it necessary that companies should make use of
it so that it can thrive within the industry of consumer electronics. Samsung can use social
media that can help it in maintaining relationship with the consumers. The online presence
can help the consumers in gathering unique information about the smartphones of Samsung
that can help it increasing the profit of the company. The company can partner with the
network carriers in the other countries that can help in the aspect of distribution of the
products of Samsung. Samsung should offer discount to the trade partners that can provide
them with motivation in relation to distribution of the smartphones of Samsung. This can help
the consumers in buyig the product at a cheaper price.
PROFESSIONAL IMPLICATION
The aspects of marketing a product have evolved through an arduous process spanning
decades involving understanding the consumer behaviour and assessing their choice. Prior to
my engagement with the learnings of this course I had always analysed the market through a
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restricted means. But by gaining more insight into the various influencing factors over the
decision-making process of consumers, I have become more aware. The nature of human
beings is highly based on their social spheres and interactions that occur frequently. The
market research undertaken by brands globally have common grounds that are conducted
keeping the consumer at the core. The individual decision making of any consumer can have
far reaching effects on the global market and a have a turning tide effect on the value of
products and brands.
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