"Samsung", the South Korean Tech giant facing the low profits and cut in their market share due to new emerging companies and obviously due to "Apple". The biggest competitor of Samsung is Apple, both vendors face the real competition in the premium smartphone arena.
Samsung has a very vast product portfolio and its presence is in several different product categories like Tablets, Mobile phones - normal phones, smartphones, Televisions - LED, LCD, Plasma TV, Smart TV, HDTV, Camera and Camcorders, Refrigerators, Air Conditioners, Washing machine, Microwave ovens, Laptops, printers and accessories. We can say that product portfolio is one of the strongest point for Samsung, the company uses various pricing strategies like - skimming pricing and competitive pricing.
Samsung uses Skimming price for those products wherein it tries to get a high value in the start before competitors catch up. Once the model is old or any competitor has launched a similar product, Samsung immediately drops the price. Samsung keeps competitive pricing so as to beat the competitor. The company hardly uses the penetrative pricing because it doesn't enter late in the market. In fact, it is present in most consumer durable segments in the market.
If we see the current scenario Samsung has come under pressure in the smartphone business from Apple, Lenovo , Huawei and Xiaomi. Its strategy of building smartphones to cover every price is coming back to bite the company as it faces challenges on multiple fronts.
On the other hand Samsung's semiconductor arm is doing very well, it has earned profit of 8.78 trillion for 2014, a rise of 1.89 trillion won from previous year all due to high demand. For this the company strategy is to invest in bulk, last year it has announced a new $14 billion semiconductor plant that will be built in South
Korea. It is widely expected that it will increase the production rate of its
plant that produces 3D V-NANDs in China in 2015.
Samsung will now focus on LCD TV's due to the low demand season. The company has already realised SUHD TV's - the wide colour reproduction range and contrast effect. Samsung is expecting increase in sales of LCD TV's as it has sold around 16 million in the fourth quarter of 2014.
Samsung uses various channels in the market, its channel marketing concept is cool. It uses three segments - sales & service dealers, modern retail and distributors. The sales and service dealers handle key accounts for
Samsung and are involved in corporate sales. These dealers may also open
exclusive Samsung showrooms. The Modern retail segment includes large retailers
and others who are present in the modern electronic retail chain. Samsung being
such a branded product, the retailers are bound to keep Samsung as an
alternative for their customers. Samsung has a single distributor through whom they distribute throughout a territory.
Samsung uses both Push as well as Pull strategies simultaneously, one side - Samsung uses various marketing vehicles across the year
covering festive season as well as non festive time. On the other side, it
gives many offers and discounts to its trade partners to motivate them to sell
Samsung above competition.
Both the tech giants have followed the strategy of "If you can't beat 'em, copy 'em". Samsung and Apple, did this for their different handsets. If you read the previous articles and news Samsung has chided Apple for copying and Apple has chided Samsung. There are limits to this strategy, as Samsung uses Google's Android operating system but establishing an ecosystem within an ecosystem may help Samsung sell accessories and improve customer stickiness.
Samsung uses the negative marketing strategy, in MWC 2015 - live event, Samsung top executive compared Samsung camera and battery directly with iPhone. With this move the company depicted that Apple is the direct competition to it.
Samsung believes that business will grow if you have multiple products at once as all of these products can become revenue drivers for your company . Pull strategy, though expensive, but far more beneficial in the long run.
According to its new strategies Samsung is spending more money and generating smaller revenues. The company will now focus more on different price tiers instead of the high end. It will also reel back its smartphone ambitions and manufacture less devices each year. Samsung will now fundamentally reform their product portfolio.
In order to regain its market share now Samsung has decided to take a pause from the market and reassess its strategies. One of the top executive of the company said that "We've been introducing more devices than anybody else. It's time for us to pause. We want a more perfect product".
Samsung’s first product, the Galaxy Gear, felt rushed. It
was buggy and was light on functionality. It will be interesting to see what
lessons Samsung can learn during its pause.
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