A. Target Market Definition
The process of selecting a target market is one of the most important decisions an
organization can make. Most organizations segment the entire population into groups
with homogeneous needs. For a market segment to be viable it must be measurable,
meaningful, and marketable. A segment is measurable if its size can be determined, its
purchasing power can be estimated, and other characteristics can be identified. It may
be difficult to segment on the basis of social class, but easy to segment along income
levels. A segment is meaningful when it is large enough to have sufficient sales and
growth potential to serve in the long run. A marketable segment is one that may be
reached and served efficiently. In general, a company wishes to serve the largest
possible homogeneous group that also seems to be most likely to be persuaded to buy
the product in your charge.
When companies write the marketing plan, defining the target market often proves to
be the most challenging aspect of the plan. However, if you do not choose the right
markets to target, you will often never achieve complete success. Too often, companies
see that their solution can serve the needs of multiple markets and they try to establish
multiple markets at the same time. Ultimately, this may lead to failure because they
overextended themselves and did not successfully meet the needs of any market. Choose
a well-defined market when you write your marketing plan and stick to it until the
market dictates a change.
Bases for segmenting consumer markets include demographic, benefit, psychographic,
and behavioral characteristics. Demographic segmentation includes the characteristics
of age, family size, family life cycle, gender, income, occupation, education, religion,
race, generation, nationality, and social class. Benefit segmentation describes why
consumers buy a product (e.g., makes me feel good, makes me feel useful, etc.).
Psychographic segmentation encompasses lifestyle (e.g., outdoors, athletic), and
personality (e.g., compulsive, gregarious). Behavioral characteristics include occasion
(e.g., Valentine�s Day, birthday), usage rate (e.g., light, medium or heavy users), or
attitude (loyalty).
Note: You do not have to use all of the above-listed bases for segmenting consumer
markets. However, demographic segmentation and benefit segmentation will always
have to be used. Follow the instructions below:
- Primary (and Only) Target Market
�Describe the primary target market in demographic terms (use the descriptors that
are most useful in terms of your charge).
�Describe the primary target market using benefits sought by that market.
�Describe the primary target market using one of the following bases: geographic,
psychographic, benefits sought, or usage (depends on your target and your charge).
�Estimate the number of customers in your primary market.
�Justify the choice of your primary target market (if applicable).
This section is very important. Do not take shortcuts.
B. Strategy Statement - Image/Market Position
Positioning is the act of designing the offering and its image so that both occupy a
meaningful and distinct competitive position in the minds of the target market.
What is the intended image you wish the product to portray? What is the position you
wish the product to obtain? - Value Proposition
Why should customers buy from the agency instead of its competitors?
Samsung Smartphones Marketing Plan 2
What does the agency have to offer to its customers that outperforms its competitors�
products?
Summary and Introduction
Samsung Electronics Co., Ltd, is a South Korean international electronics company
with its headquarters in Suwon, South Korea. It is a subsidiary of the Samsung Group, which
in 2012 accounted for 70% of the total group’s revenue (Pestle Analysis Contributor, 2015).
With a sales network in 80 countries, its market cap stood at US $372 billion. It mainly
engages in consumer electronics, mobile communications as well as information technology
with such products as Digital TVs, monitors, mobile phones, smartphones, printers, memory
and LSI products, accessories, computers (Samsung Electronics, n.d).
Issues Analysis
Samsung, as well as Apple, has been impacted by revenue slowdown since 2016. The
former’s revenue and operating profit for Q4 2015 declined by 15% affected by factors such
as the strengthening of the Korean won, increased competition (from Chinese smartphones
manufacturers whose product prices are low), overall industry sales slowdown (Tanner,
2015). Samsung has noted that the market values more the mid- and low-end smartphones
and hence decided to have a well-diversified product portfolio. In its strategy, Samsung plans
to transition to the 10 nm technology which would get back Apple to buy from it. Samsung
has significantly shortened the gap between scientific findings and new products. Samsung
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focuses on quality. Demand for more keyboards, split window, eye scrolling, reading mode,
chat on, story album, and music player with excellent equalizer settings keep the smartphones
market exciting. Samsung has launched Milk Music to compete against iTunes Radio and
Sportily. It spends $6 billion annually on research, and it has adopted a hybrid focus on high,
mid and low-end products. Something for everyone.
Samsung’s strategy would be to reduce its financial capital expenditure (CAPEX) by
15% to invest $3.5 billion on her large-scale integration business. However, Samsung’s
competitors, Intel and TSMC, in this business segment would be increasing CAPEX by 30%
and 17% respectively, but that is still significantly lower CAPEX amount compared to
Samsung’s.
Samsung enjoys a significant cash advantage of $ 59.4 billion compared to Intel’s and
TSMC’s $ 15.4 billion and $ 17.4 billion respectively in addition to a favorable debt burden
of $ 10.7 billion affording her enough headroom to withstand competitive activities (Samsung
Electronics, n.d). Apple is the market leader in high-end smartphones owing to market
perception on the quality of the phones and the iOS system compared to Samsung’s Android.
Samsung decided to focus more attention on the mid-end and low-end products as well as
significant investment in its profitable foundry and chip business. (Tanner, P., 2016).
Samsung needs to increase promotion and participate in high visibility events. The company
needs to improve on her promotional efforts to reach the market target (Varadarajan, 1996).
Thorough effective communication, the company should aim to increase the market
knowledge base. Given that a few believe that Samsung believes in imitation, it would be
essential to alter the target consumer belief systems. Samsung has to monitor threats to her
image continually. Samsung distribution channels work well, but there is need to invest
further in online shopping platform to create the superior customer experience. The pricing
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strategy is spot on, but the management needs to be entirely resolved to consider price
surveys proactively (Singh, 2013).
Goals and Objectives
- To Grow Market Share
(a) To grow the market share by 2.5% from 26.1% worldwide market share
(b) To increase sales from 318.4 units in 2014 to 480 million units in 2018
(c) To introduce Samsung’s products in 10 new markets (Countries) in 2018
(d) To create a new customer acquisition system by March 2018 - To change consumer belief of Android system
(a) Create educative ads
(b) Improve the system - To ensure customer retention
(a) To increase the number of price promotions to quarterly in 2018
(b) To improve the advanced system to track consumer purchase behavior by June,
2018. - To ensure competitive price positioning
(a) To conduct quarterly price surveys in all markets in 2018
(b) To position prices at number 3 from the top priced competition products
(c) To offer 10% volumes-based retroactive discounts to the various sales
channels - To have the most recognized and effective advertising campaigns in weaker performing
markets.
(a) Identify top 10 weak performing markets
(b) Conduct quarterly campaigns in the ten weaker performing markets
(c) Identify the best PR and Advertising Company by March 2018
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Marketing Strategies and Tactics
The below strategies seek to meet the goals and Objectives discussed above:
a) Change with the change strategy in a market where consumers have ever-
changing tastes for the best products and high affinity towards latest
technology
b) Invest in markets and consumer surveys to ascertain the changes
c) Create the need for consumers through investment in innovation
d) Build and maintain superior customer service with faster delivery times
e) Ensure a pricing strategy involving both skimming and competitive pricing
f) Create an impression of market leadership in innovation by being first
g) Ensure effective and efficient distribution channels that are responsive to the
consumer needs and reactions
h) Ensure varied promotional activities to engage potential and existing
customers that include periodic discounts, events sponsorships, participation in
national and international festivals among others.
Target Market Definition
Samsung has a history of targeting a wide range of consumers. Their primary target
age group ranges from the 20s to 50s. Samsung also targets age group of 14 to 25 with its
smartphones since the age band is the most tech savvy. Samsung also views this age group as
very important owing to their spending on disposable income and their future potentials.
Notably, Samsung’s main target market is between the ages 26 to 50 due to their high ability
to purchase all ranges of products Samsung offers (Kilany, 2015). This age group also has
potential to increase in number and grow economically. High School College and graduate
students need the products for various portable multifunctional uses. The company also
focuses on small and medium enterprises to facilitate the work of managers and employees.
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Samsung ensures to establish that the target market size is determined, that its purchasing
power is estimated, it is reachable, and other various characteristics are noted. (Duckler, n.d)
The primary target market shall be high school students and young tech-savvy professionals
of ages 14 to 35. These are the most appreciative of the latest and “coolest” Samsung
smartphones. The targets are high school and university students as well as you professionals
working in Small and Medium Enterprises. The target number is 200 million people. This
target market is very technology savvy and significantly appreciates the functionalities of the
latest smartphones. The product helps the target clients to use it for both entertainment and
work purposes. It is also a symbol of economic status.
Strategy Statement
Samsung’s strategy statement is usually informed by its philosophy and quoted as
follows: “At Samsung, we follow a simple business philosophy: to devote our talent and
technology to creating superior products and services that contribute to a better global
society.” (Samsung’s Philosophy and Goals, n.d). Samsung vision: Inspire the world, create
the future. Samsung’s core capabilities include product leadership, market leadership, and
People-centered leadership. Here is why the customers should adopt Samsung’s smartphones:
(a) The customers need to appreciate the greater vision of Samsung’s contribution to
innovation that makes work and life more comfortable, contribution to the
environmental safe world
(b) The statement offers a promise of the superior product, tapping of talent, the
growth of technology and general contribution to a better global community.
Samsung strongly participates in activities that support the community. It creates direct and
indirect employment to hundreds of thousands of people. Samsung contributes significantly
to the use of technology to make the world a better place to live in. By its leadership in
innovation, it continually seeks to find better ways of making life easier and convenient.
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Image/Market Position
Samsung prides itself on embracing of style and technology for the young
professionals with its cutting-edge designs and great connectivity features. Its positioning
statements seek to communicate its differentiation from other mobile phone players.
Samsung’s strength lies in its sleek and appealing exterior design as well as the options of soft
and hard features, which make it an excellent choice for the young and professionals who are
technology savvy. Samsung’s position is to be the global market leader in mobile
and smartphones business. Its ideas are customer-focused as well innovative to establish a
strong global brand image. All these seek to meet consumer’s expectations. In all its products,
it seeks to give each a tagline to excite the market, for example, the S6 with a tagline of “Six
Appeal.”
Value Proposition
Samsung adopted a resolute value proposition that comprised of quality, design, and
price. It has over the years built around itself trust and comfort for her customers. The agency
can offer superior customer services, efficient and effective deliveries as well as longer
product guarantee cushion against any risk.
SWOT Analysis for Samsung
Strengths
a) Large customer base
b) Strong brand name
c) Great diversification of product lines
d) Advancement in technology
e) Has strong channels relationship
Weaknesses
a) High cost of production
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b) Inability to beat Apple’s quality perceptions
c) Use of perceived inferior open source operating system compared
to Apple’s iOS
Opportunities
a) Growing market demand for mid and low-end smartphones
b) Increased demands for tablets
c) New technology like wearable tech
d) Growing population of middle class
e) Growing online market
Threats
a) High level of competition
b) Rapid change of technology
c) Apple’s perceived superiority
a) Threat of new competition from China
Communication Statement
The plan seeks to use TV ads, Twitter, Instagram and Facebook ad posts (to reach the
followers of the Samsung Electronics followers) as well as emails to existing customers as
well as radio ads. Billboards can be erected on highways leading to main universities and or
city.
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References
Duckler, M. (n.d) Crafting a Compelling and Unique Value Proposition.