Principles of Marketing: A Comparison of LG and Samsung's Strategies

This report analyzes and compares the marketing strategies of LG and Samsung, two major consumer electronics brands, focusing on their pricing and place (distribution) strategies within the Singapore market. The report examines LG's cost-plus markup and promotional pricing, and Samsung's skimming and competitive pricing strategies. It highlights the different distribution channels employed by both companies, including LG's direct distribution through distributors and Samsung's use of retailers. The analysis includes a comparison of TV pricing and market research, concluding that LG has applied its strategies more effectively in the Singapore market, particularly in terms of distribution, despite Samsung's competitive pricing. The report references several marketing principles and academic sources to support its findings, providing insights into the companies' marketing approaches and competitive positioning.

Principles of marketing
10/15/2018

Principles of Marketing 1
Part 4 Marketing Mix
Price
Price is considered as the important element in the marketing mix strategy that is adopted by the
business in the competitive environment. The price of the product is the amount that the
customer is willing to pay for availing the product or service.
LG Pricing strategy
 Cost plus mark up: - The pricing policy of LG electronics includes mainly cost plus
markup which means the cost of the product and reasonable profit of brand in the market
of Singapore. In most of the rural areas, the company generally follow the policy of price
competitiveness.
 Price competitiveness: - In price competitiveness, the company keep the prices of the
product after reviewing the competitor's prices in Singapore. Though, LG evaluates the
prices of the competitors with the customers thought for prices and after evaluating the
prices and cost it evaluated the actual cost of the model is determined by them.
Samsung pricing strategy
Samsung Electronics it follows different types of pricing strategies for their products.
 Skimming price strategy: - For the innovative products, Samsung generally asks for the
higher prices as it follows the skimming price strategy (Bhasin, 2018). In this strategy,
the marketers set high initial price for the products and then reduce the same with time in
the market of Singapore.

Principles of Marketing 2
 Competitive pricing strategy: - For the remaining products, it makes use of the
competitive pricing strategy which is required to beat the competitors that are present in
Singapore. This shows that the company can easily manage their profit out of the
products.
Current pricing and offering of Samsung: - The key competitors of the company include
Samsung, Sony, Panasonic and many others. Out of these, the major competitor of the company
is Samsung. The current pricing and offering of the products are generally less or equal to
competitors because it wants to earn high profit and goodwill in eyes of Singapore customers.
Research on TV in market: - Research on TV has been done which shows the prices
comparison of two products that is LG 43 LH576T 43 Inch LED Full HD TV and Samsung
UA32EH400 3R 32 inch LED HD-READY TV which is 37,199 and 21,990 respectively
(Gadgets Now, 2018).
Promotional pricing of LG Company: - LG Company makes use of the promotional pricing in
which the company reduce the prices for a short period of time. This generally takes place in the
lean season as to increase the sale of products. Though, on the other hand, Samsung electronics
doesn't make use of promotional pricing.
Comparing the strategies of both the brand, this has been found that LG Company has applied
the strategies effectively in selling the products in the market (Grant, 2016). The company has
balanced their profit by following the two strategies. Along with this, they have made their good
reputation and image in the market. This shows that in Singapore market LG company is
dominating the market than Samsung.

Principles of Marketing 3
Place
The place is the location or areas where the product is distributed from where the buyer can
access the products and services.
Distribution channel of LG
LG electronics serve their products in Singapore market and at different locations (Bhasin,
2018). The aim of the company is to achieve the rapid and fast growth due to which they sell it’s
by performing the tie-up with distributors. The distributors have given the responsibility of
distributing the LG HD TV efficiently and on time. This has been found that there are different
types of the channel of distribution which include: -
(Source: Armstrong, Adam, Denize and Kotler, 2014)
The above-given image reflects the channel structure and types that are generally present in
Singapore market. LG follow 4th distribution channels (producer-distributor-wholesaler-retailers-
customers) in which they distribute their products directly to their own distributors. Further, the
distributors ensure that they make the product available to the final customers in Singapore
(Armstrong, Adam, Denize and Kotler, 2014). This will further include numerous intermediaries

Principles of Marketing 4
such as wholesalers, retailers and finally to the end users. LG has approximately 46 branch
offices that perform the work on the field of distribution across the world.
Strategy of LG: - The strategy which is followed by the company is that they have their own
distributors which help the company to make the product easily available in malls and
supermarkets which enhance revenue in Singapore. Moreover, the products of the company are
available through online mode which helps them in generating high profit.
Distribution channel of Samsung
On the other, Samsung electronics competitor of LG makes the Samsung TV available through
channel marketing which includes: -
 Sales and service dealers
 Modern retail and distributors (Bhasin, 2018)
The company retailers make their products available through chains of the supermarket. This
reflects that it follows the 2nd method of distribution (producer-retailers-customers) and a unique
distribution channel which involve a single distributor.
Strategy of Samsung: - Company has a large number of retailers who make the products
available to customers and this strategy is followed to earn a maximum profit because fewer
intermediaries are available. This reflects that both the companies follow the unique strategies in
Singapore.
Comparing, the strategies, this has been found that the strategies of LG in Singapore market are
more effective than Samsung. This shows that LG is dominating in the market comparing it with
the other competitors.

Principles of Marketing 5
References
Armstrong, G., Adam, S., Denize, S. and Kotler, P. (2014) Principles of marketing. 6th edition.
Welbourne: Pearson Australia.
Baker, M. J. (2014). Marketing strategy and management. London: Palgrave Macmillan.
Bhasin, H. (2018) Marketing mix of LG – LG marketing mix [Online]. Available from:
https://www.marketing91.com/marketing-mix-of-lg/ [Accessed on 15th October 2018]
Bhasin, H. (2018) Marketing mix of Samsung – 4P of Samsung [Online]. Available from:
https://www.marketing91.com/marketing-mix-of-samsung/ [Accessed on 15th October 2018]
Gadgets Now (2018) Compare LG 43LH576T 43 inch LED Full HD TV vs Samsung
UA32EH4003R 32 inch LED HD-Ready TV [Online]. Available from:
https://www.gadgetsnow.com/compare-television/LG-43LH576T-43-inch-LED-Full-HD-TV-vs-
Samsung-UA32EH4003R-32-inch-LED-HD-Ready-TV?from=mdr [Accessed on 15th October
2018]
Grant, R.M. (2016) Contemporary strategy analysis: Text and cases edition. New Jersey: John
Wiley & Sons.