Paper Example on Samsung Company: Global Economic Environment and Marketing

Published: 2021-07-26
1838 words
7 pages
16 min to read
University of California, Santa Barbara
Type of paper: 
Case study
This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

Samsung Mobile Company is one of the best mobile phone manufacturers in the world. The operation of the Company is influenced by various economic, environmental factors. Economic factors are essential in coming up with business strategies because of the inflation rate, the growth of the economy and economic cycle highly affected the profitability of the company (Ko, 2011). Increase in minimum wage and tax rate would also increase its operating cost thereby decreasing profitability. Appreciation of Korean won has proved to be having a detrimental effect on the profits of Samsung. For example, the global financial crisis of the year 2007, affected Samsungs profits decreasing from 2.07 to 1.01 trillion won (Ko, 2011). Recession around the globe is still ongoing and will have unfavorable effects on the purchasing power of the consumers as they may be reluctant to purchase the products of Samsung Company. The uncertainties of the value of the currency may lead to increased golds price. Also, a dramatic reduction in the prices of crude oil will lead to increased interest rates making the investment cost to rise. This means that the economic environment will be unfavorable for the Samsung to do its business. Unstable and unpredictable economic situation leads to higher risks in business leading to a stiff competition (Yeung, 2016).

Marketing strategies

Competitive advantage

Samsung Company has dominated the world in the production of electronic products due to various competitive advantage. First, it has embraced vertical integration starting from LCDs and semiconductors to consumer products. It deals with some products such as sensors, flat panels, gaming batteries, televisions, tablets, smartphones, and batteries. Second, a culture that adapts to cultural differences and embraces approaches that fit the local markets (Mishra, 2017).Third, it has a reputable brand across the globe, which took a lot of time and resources to build. The company is facing stiff competition from its major rivals such Apple, but Samsung is still controlling its logistical certainty differently from that of Apple. Before starting competing with Apple Company, it was over many other Japanese technology firms in the 1980s up to 1990s when it turned its attention to Apple. It spent billions on capital expenditures and research and development. This vast investment pays off in low- and mid-end markets, but the high-end wares keep on falling into large competitor which is Apple.

Fourth, the company is known for its expertise in manufacturing quality products at an affordable price as compared to its major rivals. The company is among the leaders in innovation in the sector of consumer electronics, offering a wide range of products that have shaped the world today. It sets itself from competitors in various ways such as dedicating itself to the production of new products. It strives for constant technological advancements, which assists it to manufacture products that are one of their kinds in the marketplace. Moreover, the company spends about 6 billion dollars on product research every year. Its primary objective is to deliver high-quality products with most of the emphasis being on design and performance. As a leader in electronic products, the Company has to stay innovative and always innovating new products for future generation (Mishra, 2017). Fifth, it has efficient distribution and supply chain as its retail outlet stores are located in different regions of the universe as well as offering online shopping platforms.

Market Segmentation

Market segmentation is one the oldest tricks in marketing and the Company is using it by dividing its clients into based on their needs, income, age, and education. The principal purpose of any business is to attract customers and to achieve this; it has to look at things from the customers perspective (Bhasin, 2017). This will help the company understand what consumers purchase and what they value in those products hence segment its market appropriately. First, the corporations geographic segmentation is all over the world as they sell their products in more than 61 different nations. The physical appearance of all its smartphones is universal, but the language used in marketing or promotion might vary slightly. Second, in age segmentation, the company is targeting young adults, teens, and adults in their mid-30s (Walter, 2017). The students are mostly technologically informed, and they are known to adopt new technologies more efficiently. They also help in promotion and recommending products to be consumed through social media platforms. Students also assist in the promotion of Samsung high products through seeking opinions from others which highly influences the purchasing behavior. Most teenagers and students have to seek a brand recommendation from others before making the final purchase. The young professionals are people who want high-quality products, and they have higher income compared to students hence they are willing to spend a large portion of their income. They have been known to be early adopters of new technology including digital or smart televisions, broadband, and smartphones (Bhasin, 2017). They are the target market for new products developed by Samsung as they are likely to buy them as soon as they have been released.

Samsung Company is targeting both middle and high-income class income earners.

The firm uses premium price in order to secure a stronger competitive advantage. This is achieved by adding value to their products through extra services or features. The high-income class and middle class may be willing to pay for extra cost due to the newly added features. Due to its innovative nature, more middle-class individuals are purchasing their products from all over the world.

Targeting and positioning

The company knows its target market and positions itself in strategic positions. The firm is dominating in tablet, computer, and smartphones markets and most of them are being sold online. It uses skimming price to obtain an upper hand compared to its competitors. For example, Galaxy S8 and S8 Edge are new products of the company claiming that these are the most beautiful smartphones ever manufactured on this planet. The company is also capitalizing on a strong presence in the major streets as well as goodwill. Most of the mobile network corporations such as fitness monitors and electronic stores are stocking their stores with innovative Samsung products. Samsung has also started producing medical monitoring equipment to be used in clinics and hospitals. The fitness monitor can also be added to the healthcare products too.


Samsung Galaxy is a brand name for some tablets and smartphones and sold by Samsung Electronics. The whole products line is diverse, and every product category caters to a given demographic profile. Samsung Galaxy brand has some smartphones designed and sold individually to customers with higher economic status while other models target budget-conscious or younger consumers (Jung, 2014). Some items appeal to people who prefer screens with a big display. Other products are made for individuals who are looking for top built quality products. Recently, the corporate has been diversifying goods under the Galaxy Watch product line. Samsung has been regularly releasing new products in the market making customers to have a wide range of products to choose from as it manufactures new tablet devices and smartphones under the brand name Samsung Galaxy. In some cases, the company employs repetitiveness in design and features in their products. For instances, Galaxy J line and Galaxy S line are the same in terms of features. They both share similar design aspects as they use AMOLED screen displays, which was initially for high-end products (Yeung, 2016).

Samsung has been the leading manufacturer of smartphones regarding unit sold since 2012. Product diversification is risky and costly. But, this product strategy offers a safety net when done in the right way. This is because concentrating on one or fewer products for a small market is risky for a company dealing with the volatile market because of the falling and rising demand. Samsung has mastered this strategy, and it has helped them to grow their enterprise. Product diversification strategy works well for firms that operate in a market consisting of customers from the different demographic background (Jung, 2014). The market for tablets and smartphones are both diverse and volatile. Peoples preferences depend on specification and features relative to the pricing. Some of the customers targeted by Samsung are willing and able to spend their fortune on expensive devices that of high-quality features. Others want to purchase devices that are within their budgets and have essential usable features. Others are neutral about the price but are very sensitive when it comes to design and hardware specifications.

Samsung Company uses product strategy by focusing on product diversification in order to cater for broader market for both tablets and smartphones. For instances, the Galaxy S products line are designed in order to cater for clients from high socioeconomic class. Moreover, the company has been able to import the similar user experience to middle-class consumers via the Galaxy J product line with some trade-offs like plastic form factor instead of glass and metal body and lower hardware specifications. Galaxy S- Galaxy A product line is slightly trimmed down, but it has same memory and processing specifications and metallic body (Dudovskiy, 2017). But it like features such as better camera optics, heartbeat sensors and fingerprint sensor found in Galaxy S. Samsung Company understands that consumers are not attached to any technology products, but they always strive to have the best in the market. Hence they are rapidly creating new gadgets to satisfy the needs of the customers, and they have never failed. People always want to use gadgets that make their lives comfortable and reduce time spent on unwanted or straightforward tasks. Samsung has excelled in terms of innovation because instead of satisfying the needs of people, they began creating the need for the society. It also has a range of interesting products such as tablets, laptops, smartphones, cameras, televisions, and refrigerators.

Potential impact on customer behavior

Samsung Company has gained the upper hand in the electronic products thus are likely to have a significant impact on the customer's behavior. The competitive advantage is not adequate alone, but it is an essential and distinctive product feature that influences consumer when deciding what to purchase (Marburger, 2012). The retailers will be completely connected to the consumers, and the firm will attract more clients. The customers are likely to be connected emotionally to the company that offers them more information about their products for free. The company is known for its massive advertisement that is carried before and after a new product is produced. Currently, the company has won the hearts of many people around the globe and are always waiting for a new product to be released to purchase it being among the first ones to use it. The information about Samsung products is readily available, and they do not have to struggle to acquire it from their various location. The quest for information about Samsung product is triggered by an internal cognitive process that assesses the mental information stored in the brain that assists in making a decision. Due to the massive advertisement and high-quality products from Samsung, consumers are likely to be loyal to the corporations products.

Market segmentation influences customers in deciding what to buy and what to forego. Samsung is targeting...

Request Removal

If you are the original author of this essay and no longer wish to have it published on the website, please click below to request its removal: