South Korea’s Samsung Group holds the reputation of being the most successful globalizer of the previous generation. Only a two decades ago, very few would have imagined of a success story, which Samsung has created. It has been into a transition from being a low-cost original equipment manufacturer to a global leader in marketing, product design, R&D. The brand that is now more valuable than Nike, Pepsi, or American Express. Samsung kept on shining its Japanese system at the global or more specifically at the Western level in the last twenty years. It has done it with its traditional low-cost manufacturing efficiency to constantly produce high-quality products. The key to the success had been its constant focus on innovation. The fact gets revealed into a homogenous workforce. Samsung called outsiders who were not familiar with its culture and the language. Samsung introduced promotion, and merit pay to promote a few young and talented professionals over seniors. Despite all such valuable facts, Samsung like Haier in China, Koç in Turkey, and Infosys in India, face a paradox. Facts those have contributed to its success now requires to be reconsidered. The hybrid model that Samsung has been using now needs a transition to a model, which is rich in diversity and decentralization. It means Samsung now needs a more proliferation into the local culture to better understand the demand factor of the country (Harvard Business Review, 2018).
This report covers a marketing plan to advertise and facilitate the launch of Samsung’s latest version of galaxy phones namely Samsung Galaxy A7 (2018). The biggest attraction of this phone is three rear cameras, which collectively enables users to shoot pictures at maximum 37-megapixels. It additionally has a 24-megapixel front-facing camera. It comes in two versions such as 4GB and 6GB RAM. Users will get 64GB as internal storage and 512 as the expandable. As far as software is concerned, it comes with Android 8.0, which is one generation behind to the latest operating system version (NDTV Gadgets360, 2018). The reason for selecting this product for Malaysia are the facts that mostly drive sales of mobile phones in the country. In recent times, the proliferation of affordable and mid-range phones has increased. In addition, a decreased cost of service plans has further supported the growth of sales (Statista, 2018). Since Samsung is widely known for its capacity to produce quality phones at competitive prices, it should enjoy good sales in Malaysia (Statista, 2018). Additionally, Samsung already is amongst the top-selling mobile phone brands in Malaysia (Statista, 2018).
Figure 1: Number of smartphone users in Malaysia from 2015 to 2022 (in millions)
(Source: Statista, 2018)
The above figure of statistic shows the number of mobile phone users in millions in Malaysia from 2015 to 2022. It also shows a highly progressive trend for and a steady rise in mobile phone sales. This is one of the reasons to select Malaysia as one of the preferred markets for this marketing plan. Mid-range phones are liked and preferred by a larger population of mobile phone users in Malaysia. In addition, the cost of plans and schemes of mobile calls and internet packages have also dropped considerably (Statista, 2018). These facts have boosted the sales of mobile phones especially mid-range phones. Since Samsung arguably is one of the rarest companies to offer high-features phones in the budget range, it succeeded to receive a huge yes from the Malaysian people. Till the end of 2016, Samsung with 33% market shares was the leading smartphone brands in Malaysia (Statista, 2018).
All these pieces of information as being summed up in the above paragraph create enough reasons to select Malaysia as the target market for the Samsung Galaxy A7 latest version.
A theoretical way to the target market
Market segmentation is done based on a few factors. These are (Armstrong et al., 2014):
Geographic: It is actually a subset of demographic and is the easiest of all forms of a market segmentation. The needs and demands of customers vary from one region to another. It is, therefore, can be used to identify the target population.
Behavioral: In this, segmentation is done based on behaviors and decision-making pattern of consumers. Decision-making pattern may include like lifestyle, consumption, purchase, and usage.
Demographic: In this form of a market segmentation, demographic factors are considered like education, age, race, gender, family size, income, nationality, occupation, and more. It is one of the simplest and most commonly used segmentation factors in marketing.
Psychographic: It is very much similar to a behavioral form and considers personality traits, lifestyle, opinions, values, and interests of consumers to segment the market.
The selection of Malaysia as the target market for this marketing plan is constructed following the “Psychographic Segmentation”. The popularity of mid-range phones in Malaysia reflects that people are interested in, and gives values to such phones. There is fierce competition between different smartphone brands in Malaysia. Therefore, it is of key significance to understand the consumer behavior on purchasing a smartphone to be able to retain the competency. Smartphones are classified broadly as a lifestyle device rather than a necessity. It is, therefore, a handful approach to classify target market based on “Psychographic” as compared to the demographic, behavioral, and geographic forms of a market segmentation (Raj, 2015). Hence, this is how the theory of segmentation and facts of the smartphone industry in Malaysia has helped to arrive at the target market.
The chosen product is Samsung Galaxy A7, the latest version. The selection was made considering the interest for smartphones with rich features in Malaysian people. The reduced cost of calling and internet packages combined with affordable phones in recent times have boosted the sales. These facts clearly suggest that smartphones with good price value and rich features will most certainly perform well in Malaysia.
The reason to select Samsung as the smartphone brand is its popularity in Malaysia. Samsung has been leading the Malaysian market with largest market shares. It enjoyed an unrivaled competition until 2016 (Statista, 2018). However, it all started to change after budget phones from other brands have entered the market. In particular, it is receiving huge competition from Oppo, Huawei, Asus, and others. These brands are better at offering budget phones with high-end features as compared to Samsung. This has perhaps affected the growth of market shares of Samsung in recent times though it still holds the largest market shares in Malaysia (Leonidou et al., 2017).
The chosen product is expected to deliver on the latest trend for mid-priced phones with high-specs. For the proposed phone, Malaysian people will be needed to pay around 1376 RM. The price is high but still is fairly placed considering this offers three rear cameras, which no other brands do at this price range. This would be worth a buy because of its picture quality, screen resolution, RAM, and internal and expandable memory. The rarity of such phones at this price range has compelled to pick this one as the product of choice.
As stated above, customers will have to pay around 1376 RM. The price is a bit high for people falling in the middle-income bracket; however, they will still have reasons to buy this phone as it offers a high value to price. Huawei was the first to launch a phone with three cameras installed and inbuilt at its back; however, Samsung is cheaper as compared to the Huawei. Pricewise, this Samsung product should be the preferred phone and should also generate initial buzz among people. The first shipment should witness a good sale; however, things might be different and can also change from the second shipment if it fails to outperform Huawei and others in this war of camera quality (Leonidou et al., 2015). The camera quality will indeed be the prime attraction for customers.
In marketing, a place is referred to locations, which will be used to deliver products and services to consumers. Samsung Galaxy A7 2018 edition would be made available at different mobile phone stores in Malaysia as well as online. Few of such stores are as listed below (Stuff.tv, 2018):
Promotion is an essential part of a marketing plan without which it would be difficult to create the pre-launch hype for the product. It is necessary for the first shipment to get sold out in a less span of time. Promotions of a product can be done in various ways such as Online Advertisement through Internet, TV Ads, Paper and Electronic Media, PR, and a lot more (Petersen, Kushwaha & Kumar, 2015).
In context to the latest edition of Samsung Galaxy A7, the selection of platforms would be done according to their usage and viewership in Malaysia. Mobile internet usage has rapidly grown in Malaysia in recent times. The internet access market has grown since 2013 due to the constant development of network technologies in the form of 3G and LTE networks (Pwc, 2018). The number of mobile internet subscribers is expected to touch 25.1 million in 2019 (Pwc, 2018). Revenues from internet access will also grow from US$1.10 billion to US$2.62 billion at a CAGR of 19.0% (Pwc, 2018). Hence, one of the target platforms to promote Samsung’s A7 latest edition would be internet advertising considering the growing popularity of internet in Malaysia. Internet marketing would include communicating through social media sites like Twitter, Facebook, and YouTube, and providing information through the official site of Samsung.
Apart from internet advertising, some other platforms such as Newspaper advertisement, TV Ads, and Radio will also be used. Notably, “Newspaper” dominates the entire platform of advertisement with 59% shares of total spending in 2014 to 55% in 2019 (Pwc, 2018). Hence, of course, the product will be advertised across popular daily newspapers in Malaysia like The Star, Sin Chew Daily, China Press, Malay Mail, and others (Thestar, 2018). The product would also be promoted during popular daily soaps, and sporting events on the “Television”. Radio can also be used to advertise the product as it holds a healthy share of total spending after Television in Malaysia (Pwc, 2018).
Competition is huge amongst mobile phone brands in Malaysia. Samsung despite being the current leader still faces an increasingly growing competition from Oppo, Asus, Huawei, and Apple (Statista, 2018). Samsung will face fierce competition due to technological advancements of the Malaysian telecommunication industry. Malaysia ranked 2nd among emerging Southeast Asian countries in terms of penetration of smartphones in the market (Mobileecosystemforum, 2018). The percentage of users of smartphones stood at 80% in 2013, which is way much higher to feature phones (Mobileecosystemforum, 2018). It is because of the fact telecom service providers in Malaysia are competing for each other in terms of network quality, best calling and internet packages, and so. The result of such competition was the advent of 3G and LTE networks. It means mobile phone makers those with best network signal quality will be highly preferred by those who are concerned with the network.
In addition to the above fact, mobile phone brands are in constant competition for offering rich features at most competitive price ranges. Some of the areas of concerns with regard to technological advancements include, but is not limited to software, RAM size, internal and expandable memory, and screen resolution. It is quite possible to imitate features that are at this point in time is specific only to Huawei and Samsung.
The rise of the information age has made mobile phones a must have things for people. Some use it for business whereas most others use it for pleasure. The adoption rate for smartphones is steadily increasing. This is also why innovation is at full bloom in the making of phones with latest and upgraded features (Rahman et al., 2017).
Malaysia is a country of ethnic groups with Muslims being the dominating community. Hence, cultural and festive occasions can be utilized to facilitate selling in bulk. Mobile phone companies, in particular, can target those occasions to launch new models at attractive prices (Roseli et al., 2016).
Manufacturers of phones have been protective towards their intellectual properties. The use of a patent portfolio is on the rising, which is done to prevent competitors from copying the flagship model. It is now difficult for rival companies to gain larger market shares. Some of the infringements of patents include like Apple launched a lawsuit against Samsung in 2011 claiming that Samsung copied design features of the iPhone in its flagship Galaxy handsets (Saardchom, 2014). Smartphone makers face more legal barriers than just a patent war.
Malaysia’s economy is close to reaching a high-income status. Female participation rates are also better than most other Southeast Asian countries; however, there are still scopes to further boost the GDP (IMF, 2018). A growing economy is an indication of increased spending on needs and lifestyles. Since smartphones are like a lifestyle to people especially to Millennials, the industry will keep on witnessing innovative phones.
Strengths: The hardware is compatible with many open source OS and software. Low production costs are one of its assets. It holds the largest markets shares in the smartphone industry in Malaysia.
Weaknesses: Patent infringement is one of the challenges that the company has faced this decade. Profit margins have reduced due to huge market competition. Rival companies of Samsung also enjoy good sales in Malaysia. Samsung does not have its own software and OS. The product portfolio is too large to be effectively managed.
Opportunities: The Malaysian market is booming. Patents can be obtained through acquisitions. Sales of smartphones are constantly growing.
Threats: Rapid technological changes are a threat to Samsung. Price wars are a growing challenge, which creates pressure to go out of possibilities to reduce the profit margin.
Figure 2: Product Lifecycle
(Source: Zink et al., 2014)
Every single product that consumers consume follows a lifecycle usually denoting its existing position in the market. On a broader aspect, smartphones, when launched, are at the introductory stage. At this stage, these phones possess a huge popularity that goes on increasing with its performance. However, at some point in time, it also reaches to a point where it is no more available for sales. This stage is called the “decline” stage of a “product lifecycle”.
Samsung Galaxy A7 (new edition) is in the introduction stage. The lifecycle has an impact on strategy making for marketing mix. Samsung can afford to continue with the same introductory price till the product arrives at its maturity stage; however, needs to consider the pricing soon after being identified as going to the declining stage. Not only this, the declining stage can be utilized by including additional features to the phone and promoting it on a larger platform.
Conclusion
Therefore, it can be concluded that Samsung has more favorable than opposing circumstances in Malaysia. The concept is very new to the market and is also fairly priced. It should perform well considering the growing sales of smartphones in Malaysia in recent times. However, it needs to be careful with its strategy making at different stages of the product lifecycle of Samsung Galaxy A7 (2018 version).
References
Armstrong, G., Adam, S., Denize, S., & Kotler, P. (2014). Principles of marketing. Pearson Australia.
Harvard Business Review. (2018). The Globe: The Paradox of Samsung’s Rise. Retrieved from https://hbr.org/2011/07/the-globe-the-paradox-of-samsungs-rise
IMF. (2018). Malaysia’s Economy: Getting Closer to High-Income Status. Retrieved from https://www.imf.org/en/News/Articles/2018/03/07/NA030718-Malaysias-Economy-Getting-Closer-to-High-Income-Status
Leonidou, L. C., Christodoulides, P., Kyrgidou, L. P., & Palihawadana, D. (2017). Internal drivers and performance consequences of small firm green business strategy: The moderating role of external forces. Journal of Business Ethics, 140(3), 585-606.
Leonidou, L. C., Fotiadis, T. A., Christodoulides, P., Spyropoulou, S., & Katsikeas, C. S. (2015). Environmentally friendly export business strategy: Its determinants and effects on competitive advantage and performance. International Business Review, 24(5), 798-811.
Mobileecosystemforum. (2018). Understanding the Malaysian Mobile Industry – MEF. Retrieved from https://mobileecosystemforum.com/2014/07/11/understanding-the-malaysian-mobile-industry/
NDTV Gadgets360. (2018). Samsung Galaxy A7 (2018) price, specifications, features, comparison. Retrieved from https://gadgets.ndtv.com/samsung-galaxy-a7-2018-5658
Petersen, J. A., Kushwaha, T., & Kumar, V. (2015). Marketing communication strategies and consumer financial decision making: The role of national culture. Journal of Marketing, 79(1), 44-63.
Pwc. (2018). Retrieved from https://www.pwc.com/my/en/assets/publications/entertainment-media-outlook-2015.pdf
Rahman, M., Ismail, Y., Albaity, M., & Isa, C. R. (2017). Brands and Competing Factors in Purchasing Hand Phones in the Malaysian Market. The Journal of Asian Finance, Economics and Business, 4(2), 75-80.
Raj, P. M. (2015). Psychographic Profiling of Indian Young Adult Consumers of Smartphone: VALS Approach. Management Studies and Economic Systems, 54(2648), 1-8.
Roseli, N., Azhar, S., Samsudin, S., Johari, F., & Ismail, W. (2016). An Analysis on the Preferences of Smartphone that Affects Consumers Buying Decision in Selected Higher Education Institution in Malaysia. International Academic Research Journal of Business and Technology, 91-95.
Saardchom, N. (2014). Design patent war: Apple versus Samsung. South Asian Journal of Business and Management Cases, 3(2), 221-228.
Statista. (2018). Smartphone users in Malaysia 2015-2022 | Statistic. Retrieved from https://www.statista.com/statistics/494587/smartphone-users-in-malaysia/
Stuff.tv. (2018). Retrieved from https://www.stuff.tv/my/features/most-trusted-places-buy-tech-in-malaysia
Thestar. (2018). The Star is top circulated English daily – Nation | The Star Online. Retrieved from https://www.thestar.com.my/news/nation/2016/12/05/the-star-is-top-circulated-english-daily/
Zink, T., Maker, F., Geyer, R., Amirtharajah, R., & Akella, V. (2014). Comparative life cycle assessment of smartphone reuse: repurposing vs. refurbishment. The International Journal of Life Cycle Assessment, 19(5), 1099-1109.
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