Examining Relational Benefits Of Samsung: A Leading South Korean Conglomerate Company

About Samsung

Discuss About The Examining Relational Benefits Of Improved.

Samsung is a South Korean multi-national conglomerate company headquartered in Seoul. Samsung comprises of many certified businesses, all of those falls under the brand name of Samsung. Samsung is the largest conglomerate business in South Korea. Lee Byung-chul founded the company in 1938 as a South Korean trading company. Over the next few Samsung diversified its product in to insurance, textile, food processing and retail. In 1960’s the company entered into the electronics industry. In 1987 after Lee’s death, Samsung was divided into four business groups they are Samsung Group, CJ Group, Shinsegae Group and Hansol Group. Since early 90’s Samsung globalised its electronic products and have formed a huge amount of customer base in the market (Grobart, 2013). According to reports, Samsung is the sixth largest company in terms of brand value. Samsung has a huge number of products to offer to the customer- apparel, consumer electronics, medical equipment, automotive chemicals, electrical components, semiconductors, telecommunications equipment and so on. The company provides services like advertising, financial services, construction, hospitality, entertainment and so on. Samsung earned an annual revenue of 305billion US dollar in the year 2014 and the company also earned a net income of 22.1 billion US dollar. Samsung has a total asset which worth529.5 billion US dollar (Nicolas Marin Ximenez, 2014). Currently the company employs 489,000 employees in the organisation (Samsung.com, 2018).

Samsung target the consumer of age group from 20-50 or even older. Samsung target a wide range of customer, which ranges from industrial standards devices to regular usage devices (Glowik, 2016). The high-end devices target the customer with a higher income group, apart from that normal device can be affordable by both the middle and lower section of the society. Samsung provides devices, which gives full value for money; this helped them in capturing many market shares in the market. Samsung devices range from Java based technology to Android technology, which gives the consumer the right to choose, and it becomes affordable for the customer, as the price of the java devices is very low.

Market Segmentation is an important part of marketing. Market Segmentation is a process that divides the market of expected buyers into different segments based on income, age, or any another characteristics (Weinstein, 2013). The main reason for segmenting the market is to create personalised marketing mix for each group or segments accordingly. Market segmentation helps in targeting a particular group of customers and reduces the risks of failures or low revenue. It targets the market on the following basis:

• Gender: Segmenting the market is based on one of the simplest yet important factor that is gender. The wants, interest and needs between a male and female differ at many stages. Therefore, the managers highly focused on the different communication and marketing strategies for both male and female. The gender segmentation can be mostly seen in case of jewellery, clothing and cosmetics (Zhibin et al., 2013).
• Age group: Segmenting the marketing according to the age group of the consumer is very important. Different age group of people cannot use most of the products availbale in the market; this is why the customer segmentation according is important. Segmenting the market according to the age group helps in making the marketing and communication strategy more effective for the consumer (Chen, 2013).
• Income: Income is another important factor that to be considered while segmenting the market. Income helps in deciding the purchasing power of the target market. It helps the manager to market the product as a want, need or as a luxury. The income group can be divided into High-income group, Middle-income group and Low-income group (May, Peetz and Strachan, 2013).
• Place:Segmenting according to the place means targeting the target market where the potential buyers lives in abundance. It also means the group of customer, who will be highly affected by the products use.
• Occupation: The occupation affects the purchasing power of the buyer similarly like the income of the customer effects the purchasing power.
• Usage: Products usage acts as an important factor in segmenting the market for the product. A user can buy the product for heavy, medium or light usage. Product segmentation can also be used according to the product awareness.
• Lifestyle: Apart from physical factors, the managers also segment the market according to the lifestyle. The lifestyle includes interests, hobbies, marital status, vales, religion, society norms and other psychographic factors (Ramiz et al., 2014).

Samsung’s Diversified Products and Services

Segmenting the market generally consists of four different types:

• Demographic Segmentation: Demographic segmentation segments the market based on gender, age, marital status, income, family size, occupation etc. Demographic segmentation is one of the most common segmentation practise that the managers use. Demographic segmentation can be seen in all the industry for example, automobiles, mobile phones, beauty products etc. The customer’s buying behaviour is highly influenced by the demographical factors (Hamka et al., 2014).
• Geographical Segmentation: Segmenting the market according to the geographic condition is highly important for the mangers. The need and the wants of the customer differ from region to region. For example, the need of an ice cream is high on the desert areas that the mountain areas. The reason of using the product can also differ from region to region. Geographic segmentation helps the manager to create a different personalised marketing campaign for different customers.
• Behavioural Segmentation: Segmenting the market is also depends on the behaviour of the customer’s behaviour. The usage, preferences, decision-making and the choice all are taken into consideration while segmenting based on behaviour. The knowledge of the customer about the product and the usage affects the purchasing decision of the individual. The market can be segmented on the following basis:

Customer can be termed as brand loyal, brand-neutral or competitive loyal. They can also be termed according to their usage of the product for example, a sportsperson prefers an energy drink for its core purpose of getting enough energy but a non-sportsperson may prefer the product just because they like the tastes of the energy drinks (Wilson, Harper & Darling, 2013).

Psychographic Segmentation: Psychographic Segmentation is done based on lifestyle, attitude and personality of the consumer. Lifestyle and personality highly influence the buying decision and the buying habits of the customer.

• Focus of the organisation: Customer Segmentation helps in increasing the focus of the firm in the market segments. Better focus helps in increasing the revenue and the profit margin.
• Increasing competitiveness: Once the focus of the organisation increases, it will help the organisation in increasing the competitiveness in the market. For example if an organisation increases the focus on the youngsters, the brand recall and the equity among the youngsters will gradually increase.
• Market segmentation: Geographic segmentation helps in immediate expansion of the business. If marketing segmentation is done for one particular territory, it will also help in acquiring the nearby territory.
• Customer retention: By using the market segmentation strategy, Customer retention can be done through the life cycle of the buyer.

• Small segments- If the segment of the market is too small then the turnover of the company will be low, which will affect the profit margin of the company (Sharma & Suji 2016)
• Misinterpreting the consumer-It means bringing the right product in the market but for the wrong consumers
• Costing- Targeting the segment is an important factor but costing should also be considered. Costing means knowing how much to spend on a particular segment on the society.

Target market means breaking the customer market into groups or segments and then focusing on the marketing efforts on key groups or segments that consists of customers whose desires and needs are match with the products or services that is offered to them. Targeting the market can be a key to attract the customer, expanding the sales of the organisation and making the business a global success.The benefits of target marketing are that it makes the price, promotion and distribution of the particular products or services more cost-effective and easier. It helps in focusing ain all the marketing strategies and activities.

Samsung targets a wide range of customers in the market that ranges from industrial standard devices to regular day-to-day usage devices. The age group o people that Samsung normally targets are from 20 to 50 years of age or even elder than 50 years of age. Samsung is mostly into the electronic gadgets industry. The level of competition in the electronic industry is very high. Samsung is an organisation that offers a various range of Smartphone devices. Competitors like Apple, Sony mainly have a high range of devices that many of the customers cannot afford. Samsung provides them the opportunity to avoid the same devices with same features at a low price range so that everyone can afford. Thus, it is evident that Samsung is targeting the market with a low-income group or middle-income group. Samsung has also offered many high-end devices like Samsung galaxy note 8, which mainly targets the tech lovers and the high-income group people. Samsung is acquiring the market of all its competitors by targeting and bringing products of each and every age group of people.

On the age basis, Samsung is recently targeting the teenagers to early adults. This age group of people mainly are the consumers of the Samsung’s smart phones as they are mostly tech savvy people. This customer’s group is growing day by day and they have the huge spending power among all other customer group in the market. Adults between the ages 26-50 is the largest portion of customer for Samsung’s product. This age group of people have the highest potential of buying any products of Samsung.Samsung is targeting this age group of people by bringing Samsung’s Smartphone, cameras, s-mart-television etc and household products like vacuum cleaner or refrigerators. Samsung is expecting that this customer group will grow in future.

Samsung’s Target Market

Samsung’s devices are hard and durable and this helps Samsung in targeting the market of customers who uses the devices in a regular basis.

In terms of geographical locations, Samsung prefers to do its business in developed and developing economic nations. Samsung mainly operates it business in European and American countries. Samsung’s high-end devices are mainly sold in the European and the American countries. Samsung brought mid range devices for the Asian countries, where the sale for the mid-range devices are more than the sale of high-end devices.

Primary buyers- Most of the revenue of a commodity comes from the primary buyers. Primary buyers are the direct buyer of the commodity. These consumers account the highest revenue of sales, and they have a common behaviour and characteristics (Wang, Tai & Grover,  2013).

The primary buyer for Samsung device is the young generations who are purchasing the Samsung devices for daily usage. They have a huge brand loyalty for Samsung. Apart from young generation, the consumers who use Samsung’s household products are also the primary buyers for the Samsung devices.

Secondary buyers- The secondary buyers are the customers that are the probable future buyers of the products. Their buying behaviours and the characteristics differs from the primary buyers.

The secondary buyer of Samsung product is the referred customers or the family members of the primary buyers.

Brand positioning is a strategy that helps to position the brand in the market in such a way that it creates an impression in the consumer’s mind (Jalkata & Keranen, 2014). In today’s competitive world, brand positioning is an important factor that all the organisations should consider. Brand positioning contains certain factors:

• The product should be unique than what its competitors are offering.
• The product should be applicable to all the markets.
• The product should be encouraging and significant to the small markets.
• The product should be helping the organisation to expand.
• Theproduct should help the organisation to achieve the financial goals of the organisation.

            Samsung is a brand with high brand value and a well-established customer market. The pricing is done by taking the lower and the middle-income range people into consideration.  The unique selling proposition of the products is that the product is priced at a lower range by giving the features of high-end devices. Customer from different income level can afford the mid range devices of Samsung. The high-end devices are mostly for the people with higher income level.

The positioning of Samsung brands are done is such a way that the entire customer base can afford its product. The brand is durable and are full of high end features that many brands are not providing in such low costs.

Conclusion:

Samsung is a South Korean multi-national conglomerate company headquartered in Seoul. Segmenting the market is one of the main marketing tools, which help the manager to make a make a personalised marketing mix for each group or segments accordingly. Market can be segmented based on age, sex, occupation, usage, lifestyle and etc. The types of marketing segmentation are demographic segmentation, behavioural segmentation, psychographic Segmentation and demographic segmentation. Buyers are divided into two segments, primary buyer and secondary buyer. Primary buyers are the main customer and the secondary buyers are the referred customers. The positioning of Samsung brands are done is such a way that the entire customer base can afford its product. The brand is durable and is full of high-end features that many brands are not providing in such low costs

References:

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