Samsung Electronics
Samsung Electronics
Samsung Electronics Company Limited is a South Korean multinational company that is headquartered in Suwon, South Korea (Jang et al. 2019). The company has become one of the most familiar names in the technological world. Its parent company (Samsung) producers approximately a fifth of South Korea’s net exports. Samsung manufactures a wide array of consumer electronics products and services. It is the largest producer of smartphones and mobile phones (Jang et al. 2019). Currently, Samsung is popular for its Samsung Galaxy line of smartphone devices. The company also produces tablet computers, through its Samsung Galaxy Tab collection and Samsung Galaxy Note (phablet). Samsung is ranked first among largest television manufacturers across the world (Bondarenko 2020). Its television products are popular for their great design. The company also produces laptops and desktop computers. It produces major electronic parts such as flash memory devices, camera modules, image sensors, chips, semiconductors, and lithium-ion batteries for different clients including Nokia, HTC, Sony and Apple Inc. Samsung surpassed Intel in semiconductor chip production in 2017(Jang et al. 2019).
Evaluation of a Range of Products
The products, currently offered by Samsung Electronics, are in different stages of the product life cycle. Consistent with Cooper (2017),product life cycle refers the progression of a product through the four main phases of its period on the market. The four stages include: introduction, growth, maturity, and decline. Each Samsung product goes through the life cycle. However, the time spent at each phase varies from one product to another. Some products spent more time at one stage while others end up in the decline stage within the shortest period of time. According to Jang et al. (2019),the movement of Samsung products from one stage to another is affected by a number of factors including competition, changes in consumer needs and preferences, and market cannibalization among others.
Samsung Galaxy S series were introduced in 2010. The introduction of the S series gave Samsung an edge in the smartphone market. Globally, the company reported increased sales and profitability as a result of its introduction of the Galaxy S series products. The first products, including Samsung Galaxy S, Samsung SL, Samsung S2, Samsung S3, Samsung S4, and Samsung S5 have already entered the decline stage, The latest being Samsung S5. Others such as Samsung S8, and Samsung S9 are at the maturity stage. Samsung Galaxy S10 and Samsung S20 are in the growth stage.
Galaxy Note series products were first introduced in 2011. The first products to be introduced in this series have already entered the decline stage. These include the Galaxy Note (introduced announced in 2011), Galaxy Note II (introduced in 2012), Galaxy Note 3, Galaxy Note 3, Galaxy Note 3 Neo, Galaxy Note 4 (announced in 2014), Galaxy Note Edge, and Galaxy Note 5. Other products in these series are in the maturity stage including Galaxy Note 8 and Galaxy Note 9. Galaxy Note 10, on the other hand, are in the growth stage. Samsung continues to invest in this line of products as they have proved profitable.
Samsung Galaxy J and A series were introduced in 2013 and 2014 respectively. Smartphones products in these series including Samsung Galaxy Alpha, Samsung Galaxy A3, Samsung A7, Samsung Galaxy J, and Samsung Galaxy J3 are already in the decline stage. This means that the sales and profits from these products are considerably low (Brassington & Pettitt 2012). Samsung Galaxy J7 Pro, Samsung Galaxy J6, and Samsung Galaxy Duo are in the maturity stage, with some of these products soon to enter the decline stage. Samsung Galaxy A51, Samsung Galaxy A71, Samsung Galaxy A31 are in the growth stage.
Product Line Management Decision
This section of the report examines the product line management decisions for four Samsung Electronics products. These include Galaxy Note 9, Samsung Galaxy S5, Samsung Galaxy E7 and Samsung Galaxy A31.
The best product line management decision for Samsung Galaxy Note 9 is renovation. Product renovation entails making changes to an existing product with the aim of improving its functionality or usability. According to Cooper (2017),one of the main reasons as to why products enter the decline stage is new inventions and technological advancements. For example, technological advancements render existing products obsolete and results in consumers being attracted to new inventions (Kumara 2019). Samsung can take advantage of the technological advancements to introduce changes to Galaxy Note 9 and enhance its competitiveness in the market.
Innovation is the best course of action for Samsung Galaxy S5. Innovation entails the development of new products or improvement o established products (Gary Armstrong 2011). When the Samsung Galaxy S5 was introduced in the market, it boosted Samsung’s sales and profits tenth fold. However, this is no longer the case. Currently, the foregoing smartphone goes for less a fifth of its original price. As argued by Randazzo (2014)it does not make economic sense to continue producing a product that has suffered, significantly, in terms of low demand. Consequently, Samsung Galaxy S5 should be replaced with a newer version. Samsung Electronic did this in 2015 by introducing Galaxy S6.
Innovation is also the best product line management decision for Samsung Galaxy E7. This product was introduced in 2015. It quickly entered the decline stage and was soon replaced by the Galaxy A and C series. The management at Samsung made in informed decision to end the production of the E series after the realization that the product was underperforming. Quick replacement of old, underperforming products is essential to ensure a company maintains its edge in the market (Kotler et al. 2017). The contemporary consumer electronics market is very dynamic and competitive. Samsung could have easily lost its edge to the competition by failing to engage in the innovation of better products.
The Samsung Galaxy A31 was announced in March 2020 (Gsmarena 2020). The best product line management decision for this smartphone is adaptation. Product adaptation refers to the process of changing a prevailing product with the aim of ensuring that it is suitable for diverse markets or customer. This strategy is important to multinational corporations that export their goods and services. Adaptation enables them to ensure that their products meets the cultural and regulatory requirements of their target global markets (Gary Armstrong 2011). Samsung needs to ensure that the Galaxy A31 is adapted to different markets to increase sales and profitability. Failure to ensure the same can lead to the company failing to export the smartphone to some consumers in the global market.
Samsung Galaxy Note 9
The product for further analysis and the development of a marketing mix strategy is Galaxy Note 9.
Market Opportunity for Galaxy Note 9
Samsung Galaxy Note 9 was a success. Samsung Electronics sales increased following the announcement and introduction of the Galaxy Note 9 into the market. However, as discussed above this product as already reached maturity and may soon enter the decline stage. Through renovation, a company can extend the product’s time in the maturity stage (Gary Armstrong 2011). The management at Samsung Electronics must ensure that the changes reflect on the current consumer needs and preferences. For one, it must ensure that the resulting product features current technologies. It must also fix the deficiencies of the previous version. Doing so will ensure that the improved Galaxy Note 9 meets or exceeds consumer needs and expectations.
The demand for affordable high end tablet computers has been rising not only in the developed but also the developing world (Kumara 2019). By improving on the Galaxy Note 9, Samsung can take advantage of this market opportunity. The company has already reduced the offer price of the Galaxy Note 9 making it more affordable to consumers both from the middle and high classes in the society. Making improvements will increase customer value and the attractiveness of the product to the target consumers.
Financial Overview
Renovating the Galaxy Note 9 makes perfect sense as the product is still profitable. Newer versions of the Note Series are considerably expensive and hence can only be afforded by a few consumers in the market. An improved Note 9 will be a perfect alternative for Galaxy Note 10. This alternative will be cheaper but provide consumers with almost the same functionalities as Note 10. Samsung Electronics enjoys a strong financial position and has the resources required to make the changes to the product to enhance its design and functionality.
Market Analysis
SWOT analysis
Strengths
Samsung enjoys a number of strengths that it can take advantage of when making improvements and marketing the Samsung Galaxy Note 9. The company is among the heaviest investors into research and development (R&D). It has numerous R&D centers across the world. According to Glowik (2017),investment in R&D facilitates the renovation of products and services. Another strengths the company can use to renovate the Galaxy Note 9 is its product design and innovation capabilities. For many years, Samsung has been considered to be an innovative corporation, capable of producing well-designed products (Jang et al. 2019). Samsung also enjoys strong production and marketing capabilities. It can use its marketing capabilities to create awareness on the improved Samsung Galaxy Note 9 and attract target consumers. The company has also established strong relationships with retailers across the world including in the United States, Africa, Europe, and Asia. The company’s global presence also works at its advantage as it can easily market the improved version of Galaxy Note 9 to the consumers across the world.
Weaknesses
Samsung also has some weaknesses that can impact its ability to market the improved version of the Galaxy Note 9. One major weaknesses is its shrinking market share in some international markets such as China and India (Glowik 2017). Samsung faces stiff competition from these markets which makes it challenging for it to maintain a high market share. Market cannibalization is also a major challenge to the company. Its introduction of the Samsung Galaxy Note 10 may reduce the sales of the new version among the high class members of the society.
Opportunities
Samsung is also exposed to a number of market opportunities. It can further invest in research and development to come up with novel ideas on how to improve the design and functionality of the Galaxy Note 9. The company can also expand further in emerging markets. Improvements in the economic performance of these countries present numerous marketing opportunities for Samsung (Jang et al. 2019). For example, the company can take advantage of the increasing demand for affordable tablet computers in the developing world. Samsung Galaxy Note 9 is a phablet which is a growing market. Another marketing opportunity is the digital marketing (Kumara 2019). By increasing the use of digital platforms to market products, the company can reach out to more customers in the global market.
Threats
Samsung Electronics is exposed to a number of threats that impacts its survival in the market. Stiff competition is one of the major threats that the company faces. It not only faces competition from Chinese consumer electronics companies such as Huawei, Xiaomi, Vivo, Oppo, and Tecno Mobile but also global companies such as Apple Inc. and Google (Jang et al. 2019). Some of these competitors offers products at low prices and are able to attract many consumers in the developing markets. Samsung may struggle to compete with such companies based on prices. Product imitation is also a major threat to the company (Glowik 2017). Samsung has in the past filed lawsuits against other companies for infringing its property rights. This risk has not been mitigated. Basically, other companies can easily copy the improvements made on the Galaxy Note 9 and offer the products at a cheaper price.
Porter Five Forces Analysis
Consumer Power
Consumer power is high. Consumers in the electronics industry have access to quality information about companies’ products and services and, as such, are able to make informed decision on whether to purchase a certain product or not (Kumara 2019). This means that Samsung cannot manipulate them to purchase the Galaxy Note 9. Stiff competition among consumer electronics companies also gives consumers a bargaining power. Essentially, they can easily compare brands and select one that best serves their needs and preferences (Kumara 2019). Even though Samsung is a well-established brand that offers good quality products and services, other companies such as Apple can match or even exceed its quality.
Threat of New Entrants
The threat of new entrants is low. This is because the capital required to start a company that can successfully compete with a company such as Samsung is considerably high. Fundamentally, initial costs in areas such as human capital, production, marketing, and operations is substantial (Kumara 2019). Companies currently operating in the market are well-established and command a high market share. This also makes it hard for new entrants to enter the consumer electronics industry. Regulatory pressure is also a major impediment to new entrants. Companies such as Samsung must adhere to numerous rules and regulations failure to which they risk exiting the market.
Competitive Rivalry
Samsung faces stiff competition from consumer electronics companies across the world. Competitive rivalry is high. This is one of the reasons as to why new entrants find it challenging to enter the industry (Kumara 2019). Samsung cannot take its competition for granted. It needs to consider the impact competitors on its ability to improve and market the Galaxy Note 9. Competitors such as Xiaomi, Vivo, Oppo, and Tecno Mobile, and Apple Inc. have the ability to produce products that can successfully compete with the Galaxy Note 9. Some of the foregoing competitors can also copy or imitate the improvements made on the Galaxy Note 9. It is imperative for Samsung to mitigate these, among other risks to enhance its chances of success.
Supplier Power
Suppliers have low power. For one, there are many suppliers in the industry who are willing to do business with large and well-established companies such as Samsung. These suppliers are spread across the world. Samsung can easily switch suppliers whenever it is dissatisfied with the materials or services provided by the suppliers (Kumara 2019). On the other hand, Samsung’s suppliers cannot switch to other companies as Samsung is their major source of income. Basically, losing business with Samsung can result in great losses on the part of the suppliers. Samsung also sets the rules and guidelines that must adhere to (Kumara 2019). Generally, Samsung can get the materials and services required from supplier to make the improvements on Galaxy Note 9.
Threat of Substitutes
Substitute products are major threat to the competitiveness of Samsung’s products. Competitors offer substitutes to Samsung’s products and hence the high consumer power. Switching cost is also low (Kumara 2019). This implies that competitors are able to provide products that match or exceed the quality provided by Samsung. However, Samsung can take advantage of its technological innovation prowess and strong brand image to differentiate the Galaxy Note 9. Still, the company cannot afford the luxury of ignoring the threat posed by substitute products.
Marketing Mix
Product
When renovating or making changes to the Note 9, Samsung’s goal should be to differentiate it from what is offered by the competition. The phablet should meet or exceed consumer expectations. Investment in R&D will enable the company to make improvements that will enhance the product’s functionality and design. The company also needs to utilize consumer reviews when making improvements to Note 9. In the reviews, the management in the company will find information on the deficiencies of the existing product. As argued by Randazz (2014),addressing deficiencies in an existing product increases consumer satisfaction and enhances loyalty. The company also needs to use the positive reviews to further enhance the functionality of the product. For example, the phablet’s camera has received positive reviews. Enhancing the camera will result in even more positive reviews which will enhance the phablet’s sales.
Price
The company needs to price the phablet’s competitively. When the Galaxy Note 9 was introduced in the market, it could only be afforded by high class and middle class consumers. However, after hitting the maturity stage, the company started to reduce the price of the product to maintain its market share and to avoid a decline in sales. It is imperative that the improve Note 9 is priced competitively to avoid the loss of market share. As stated by Kotler et al. (2012),in the maturity stage, pricing a product competitively enhances a business’ ability to beat its competition. Failure to match the price offered by the competition increases the risk of a product entering the decline stage and a company losing its edge to the competition (Brassington & Pettitt 2012).
Place
Samsung needs to build an intensive distribution network to ensure that many customers can easily access the product. The Note 9 can be sold in Samsung’s store locations, through authorized sellers, company-owned website, telecommunication companies, and online stores. Consumers in the contemporary world like shopping at their convenience (Randazzo 2014). This trend has resulted in an increase in the number of online shoppers. Samsung needs to take advantage of this trend by increasing its online presence and, specifically, its use of online platforms to market the improved Note 9. The company must ensure that the product’s space on the shelves is maintained.
Promotion
The company needs to come up with a marketing message that will emphasize the new features of the improved Galaxy Note 9. The message should also stress the benefits of the improved product. According to Kotler et al. (2012),emphasizing the benefits of a product offered by a company in an advertisement encourage brand switching. This also gives consumers a reason to consume a particular product over others. Samsung also needs to take advantage of both traditional and digital marketing strategies. Traditional advertising platforms include the television, newspapers and magazines. Digital marketing include the use internet platforms to market products to the target consumer (Randazzo 2014). Samsung needs to use online platforms such as its own website and social media websites such as Facebook and Twitter to create awareness on the improvements made to the Galaxy Note 9.
People
The management at Samsung must ensure that it has the best people making the improvements on Note 9. It must also have people with the right marketing skills and abilities to successfully market the product. As argued by Randazzo (2014),a company can produce quality products but fail to market them successfully as a result of having poor marketers. Simple things such as providing excellent customer service can mean the difference between good and poor marketing. Excellent customer service coupled with quality products increases customer satisfaction (Cooper 2017). This also enhances loyalty. Loyal customers can, in turn, market the company’s products to their friends and family. Customer referrals will enable Samsung to market the improved Note 9 with ease.
Process
The processes of delivering products to customers play a significant role in improving customer experience. They can also increase customer satisfaction and improve the lifetime value of a business. Such processes can include, among others, website user experience, delivery time, in-store wait time, customer service, and delivery methods and services. The marketing managers at Samsung must ensure that the repeatedly good services to the target consumers. For example, when a customer makes an online order for the improved Note 9, the company must ensure that the customer receives exemplary services and that the product is delivered within the stipulated time. The company also needs to utilize the omnichannel marketing strategy. Basically, it needs to streamline the consumers’ shopping experience regardless of where they purchase the product including via a phone, desktop computer, or a brick-and-mortar store (Piotrowicz & Cuthbertson 2019). Integrating the customer experience enhances customer satisfaction. This in turn results in consumer loyalty.
Physical Evidence
Physical evidence represents what the consumer sees when interacting with a company (Gary Armstrong 2011). Samsung must ensure that the physical environments of stores are attractive to the target consumer. It also needs to ensure that the Note 9 is packaged in well-designed packages that will attract consumers. Sometimes, poor product packaging strategies can lead to a company losing an edge even when it provides the best quality products. The company also needs to ensure that it works with distributors who have a reputation of having good store environments. Improving the user interface on the company’s website is also important to ensure that consumers find it easy to navigate the website and purchase what they want, in this case the Galaxy Note 9.
Process Involved in New Product Development
The first process in new product strategy. At this stage, innovators define the goals and objectives pertaining to the new product (Annacchino 2011). In Samsung’s Galaxy Note 9 case, the main goals and objectives include improving the design and functionality of the product to enhance its competitiveness in the market.
New product strategy is then followed by idea generation. This stage involves innovators brainstorming and coming up with ideas on how the stated goals and objectives can be met. Sources of ideas can come from both internal and external sources. Internal sources include R&D and contributions from employees. External sources include suppliers, distributors, competitors, and customers (Annacchino 2011). Marketers at Samsung can brainstorm and collect ideas from similar sources. For example, the company can collect ideas from customer reviews and its R&D initiatives.
The third stage is screening the ideas. After collecting ideas from different sources, it is essential that these are screened with the aim of selecting the best ideas. Only ideas that have the potential to increase the profitability of a product are selected (Cooper 2017). Innovators at Samsung also need to drop poor ideas and focus only on the best ideas that will transform the marketability of the Galaxy Note 9.
Screening the ideas is then followed by concept testing. This stage involves the structuring of an idea into a detailed concept. In Samsung’s case, this stage can involve marketing, product development, finance, and product engineering personnel working together as a team to develop a detailed product concept that is stated in expressive consumer terms.
The next stage is business analysis. This entails the analysis and understanding of the costs and profits associated with the new product and determining whether they meet organizational objectives (Annacchino 2011). It is important for the management at Samsung to ascertain whether the proposed product improvements will facilitate the achievement of the company’s goals or not.
Business analysis is then followed by the actual product development (Cooper 2017). If the costs and profits that will result in the improvement of the Galaxy Note 9 facilitate the realization of Samsung Electronics’ goals, the company should go ahead and make the improvements.
After a product is produced, market testing is conducted to test the marketing mix. Carrying out a trial run helps in determining whether the product will penetrate the market or not (Annacchino 2011). The management at Samsung also needs to carry out a trial run after making the changes on the Galaxy Note 9.
Finally, the product is introduced into the market. At this stage, consumers start to purchase the new product. The company in question provides the technical support required to monitor the progress of the product (Annacchino 2011). Samsung also needs to introduce the improved product into the market. It also needs to refresh its advertisements to ensure that the target consumers are aware of it.
Effective Team Working Skills
Effective team working skills include, among others, communication, conflict resolution, rapport-building, problem solving, decision making, reliability, and creative thinking (West 2012). The fact that teams are made up of more than one person implies that one has to be an effective communicator to collaborate with others. Teams also encounter conflicts. Effective conflict management skills are essential as they help in mitigating the risks of a team failing to achieve its goals because of a conflict. Problem-solving skills are equal important for a member of a team to be able to handle their roles and responsibilities (West 2012). Creativity enables one to make good contributions to the team and, as a result, increases the team’s chances of success. Team members are also expected to make or take part in the decision making process. Thus, decision-making skills are essential to effective team working. A team member must also demonstrate reliability if they are to handle their roles and responsibilities effectively (West 2012).
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