Market segmentation and marketing mix of LG and SAMSUNG

September 26, 2017 September 2nd, 2019 Marketing

Definitions

Market cleavage

The dividing of all possible clients into groups based on their demands, age, income, instruction etc. ( Cambridge Business Dictionary, n.d. )

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Marketing mix

The combination of actions a company uses when selling a merchandise or service. These are frequently described as the four Postscript: Merchandise, monetary value, publicity and topographic point. ( Cambridge Business Dictionary n.d. )

Purposes

This piece of work purposes to analyze and measure the market cleavage and selling mix features of and possible for Samsung compared with LG. Due to the really wide market sectors and merchandise scopes of both companies, this study will concentrate on the comparatively new merchandise sector of fitness proctors when sing both market cleavage and mix. Interest in these merchandises has grown due to the handiness of ‘wearable devices’ and the suitableness of engineering, peculiarly Smartphone apps, to help in this chase. There has besides been increased consciousness and concerns about maintaining fit and healthy. Harmonizing to Vecchione ( 2012 ) the market for self-monitoring maps such as high blood force per unit area and blood glucose degrees utilizing radio wearable devices is turning faster than Telehealth ( the functionary NHS version of engineering to supervise patients remotely in their ain places ) . The proportion of radio devices used to supervise wellness conditions is predicted to increase from a low degree of 5 % in 2011 to every bit high as 80 % by 2016 ( Ibid ) , with the ensuing readings being stored and analysed on smart phones.

Company background

An Introduction to Samsung

Samsung was founded in Suwon, Korea in 1969. Its vision 2020 is stated as being “Inspire the universe, create the future” ( Samsung website, n.d. ) Samsung Electronics is a planetary leader in semiconducting materials, telecommunications and digital media engineerings with gross revenues of 143.1 billion U.S. dollars in 2011 and 221,730 employees spread across 72 states ( Ibid. ) Samsung has been the universe ‘s largest telecasting maker since 2006 and is the world’s largest manufacturer of LCD panels. The company besides has the greatest portion of the planetary market for memory french friess. With the debut of the Samsung Galaxy S Mobile, the company has taken the lead in planetary gross revenues figures for smart phones as of 2013. Samsung has besides established a outstanding place in the tablet computing machine market with the Android-powered Samsung Galaxy Tab offering strong competition against the iPad from Apple. The central office of Samsung Electronics Co. , Ltd. are situated in Suwon, South Korea and this is besides the flagship company of the Samsung Group. In 2013 the president of Samsung Electronics was Boo Keun Yoon ; and the ends of the company encompassed both quantitative ( $ 400billion planetary gross revenues and figure one topographic point in the planetary IT industry ) ; and qualitative ( design merchandises that enrich people’s lives and contribute to a socially responsible hereafter ) . This is a existent mark of the times as organisations progressively have to show corporate duty and part to societal or shared value, i.e. making good by making good ; an attack which can supply extra competitory advantage ( Kramer, 2011 ) . Roy ( 2013 ) explains this farther as being the following phase of concern thought, implanting parts to wider society as an built-in portion of corporate scheme.

Samsung operates in Western Europe, the Far East, and the United States ; increasing its portion of the nomadic phone market in Western Europe over the past three old ages at the disbursal of companies such as Apple and Nokia. In 2011, for illustration, Samsung had merely a 14 % market portion in Western Europe ( compared with Apple at 21 % Nokia at 20 % ) . By 2013, Samsung’s had increased its portion of the Western European market to 45 % ; Apple’s portion dropping to 20 % , and Nokia’s market portion plummeted to merely 5 % . Other rivals including Blackberry fared even worse, losing practically its 17 % market portion to Samsung and Apple. HTC’s Android smart phones besides struggle to vie with the two market giants, particularly Samsung, who managed to bring forth more income than Apple in 2013 ( delight see Figure 1 below ) .

Figure 1 – Samsung and Apple net incomes 2011-2013 ( $ billion )

Beginning: Statista

Thirteen Samsung merchandises have held the figure one topographic point for market portion including telecastings, semi-conductors ( the first merchandise which the house originally manufactured ) and nomadic phones ( Samsung, n.d. ) Samsung is go oning to research and develop new advanced merchandises such as LCDs and semi-conductors.

An debut to LG

There is some resonance in the LG narrative compared with Samsung: LG is besides a Korean company and it excessively was founded about half a century ago in 1958, originally known as Goldstar. It was founded on the ethos of making a happier, better life ( LG website, n.d. ) Since 1958 it has progressed into the digital age through technological development, originally of place contraptions such as rinsing machines and wirelesss.

Then in 1995 the company was renamed LG Electronics, geting the United States based company Zenith ( Ibid. ) , therefore opening up the huge American market. This was followed in 1997 by LG developing the first digital Mobile French telephone and being the first company to be certified for the production of digital telecasting sets. In 1998 the company developed the 60 inch plasma Television followed by a joint venture with Phillips to make LG Phillips LCD ( Ibid. )

2002 sees LG export GPRS1coloring material Mobile phones to Europe and in 2003 achieve monthly export volume of 2.5 million units. By 2005 LG had become the 4th largest provider of nomadic French telephones worldwide ; plus the house was the innovator of notebook computing machines ( LG website, n.d. ) 2008 sees the company launch a new planetary individuality: “stylish design and smart engineering, in merchandises that fit our consumers’ lives” ( LG website, n.d. ) . In 2009 LG becomes the 3rd largest provider of nomadic phone French telephones worldwide, and 2010 saw the company launch the world’s foremost 3D LED Television.

Harmonizing to their website LG trade name individuality focuses on ego look and a promise of satisfaction to its clients ; utilizing the phrase “delightfully smart” as its strapline. The LG logo itself is said by the company to stand for a circle around the client typifying the corporate value of set uping a lasting relationship with and accomplishing highest satisfaction for clients. This is the footing of relationship selling and is cardinal to pulling and retaining clients in a universe where consumers are bombarded with gross revenues messages.

Market cleavage

As Drucker neatly put it, “the intent of concern is to make customers” ( Swaim, 2010, p.14 ) and to make this requires looking from outside the company from the customer’s point of position and replying inquiries about market cleavage, including “what does the client buy” and “what is value to the customer” ?

Samsung and LG market cleavage

Information to steer cleavage can be collected through carefully planned market research ; and the analysis of questionnaire studies. Here are some market sections that will be most relevant to the fittingness proctor market:

Students

be given to be the most technology-literate and stand for a well defined section in footings of the early acceptance and usage of new engineerings. They besides assist in advancing and urging merchandises through the societal media methods ; plus can be helpful in co-production and the development of the merchandise. The importance of the usage of societal networking sites ( SNS ) in the consumer purchasing procedure must non be underestimated ; seeking sentiment from other consumers is now a pre-requisite of the purchase decision-making procedure. Interbrand ( 2012 ) suggests this may ever hold been the instance but a characteristic of the past few old ages is the addition in the velocity with which sentiments and consumer influence can be spread. Nielsen ( 2010 ) discovered that most internet users seek out reappraisals and see the trade name recommendations of fellow consumers before eventually make up one’s minding on a purchase ( Figure 2 ) . The graph illustrates that recommendations from friends and household are the chief beginning of information most trusted. A cardinal factor to observe here, nevertheless, is that official trade name web sites can be every bit influential as on-line consumer sentiments but they have to be more than merely promotional messages. In comparing, advertisement in newspapers and on wireless and Television are less sure by consumers. be given to be the most technology-literate and stand for a well defined section in footings of the early acceptance and usage of new engineerings. They besides assist in advancing and urging merchandises through the societal media methods ; plus can be helpful in co-production and the development of the merchandise. The importance of the usage of societal networking sites ( SNS ) in the consumer purchasing procedure must non be underestimated ; seeking sentiment from other consumers is now a pre-requisite of the purchase decision-making procedure. Interbrand ( 2012 ) suggests this may ever hold been the instance but a characteristic of the past few old ages is the addition in the velocity with which sentiments and consumer influence can be spread. Nielsen ( 2010 ) discovered that most internet users seek out reappraisals and see the trade name recommendations of fellow consumers before eventually make up one’s minding on a purchase ( Figure 2 ) . The graph illustrates that recommendations from friends and household are the chief beginning of information most trusted. A cardinal factor to observe here, nevertheless, is that official trade name web sites can be every bit influential as on-line consumer sentiments but they have to be more than merely promotional messages. In comparing, advertisement in newspapers and on wireless and Television are less sure by consumers.

Figure 2 – Percentage of consumers who have trust in different signifiers of advertisement

Beginning: Nielsen, 2010

Young professionals

are another market section for these types of merchandises ; the chief difference with the pupil sector is the well higher income and therefore greater willingness to pass more on the merchandise. This group is arguably transporting on the great tradition of early adoptive parents excessively ; the UK market has ever been at the head of following new engineering, including broadband, digital Television and Smartphone take-up ( Ofcom, 2010 ) . Wireless engineerings such as these fittingness proctors have been no exclusion with the digital age being to the full embraced by the early adoptive parents in the UK every bit shortly as the new merchandises have been released by the major makers including Samsung and LG. are another market section for these types of merchandises ; the chief difference with the pupil sector is the well higher income and therefore greater willingness to pass more on the merchandise. This group is arguably transporting on the great tradition of early adoptive parents excessively ; the UK market has ever been at the head of following new engineering, including broadband, digital Television and Smartphone take-up ( Ofcom, 2010 ) . Wireless engineerings such as these fittingness proctors have been no exclusion with the digital age being to the full embraced by the early adoptive parents in the UK every bit shortly as the new merchandises have been released by the major makers including Samsung and LG.

There is a 3rd cardinal market section for fittingness proctors revealed by research grounds and that is

immature adult females

who tend to be more interested in wellness and utilizing exercising as a manner to maintain slim every bit much as maintaining fit ( Clohessy, 2014 ) . The functionality of the new coevals of fitness proctors includes characteristics such as the figure of Calories being burnt off as exercising progresses, with different ingestion rates depending on the type and strength of activity. These last two market sections besides have the advantage of incorporating a greater proportion of working people who are accordingly much less influenced by the absolute monetary value of the merchandise. They are besides proactive Twitter and Facebook users and subscribers, reading reappraisals and supplying remark as portion of the consumer decision-making procedure. who tend to be more interested in wellness and utilizing exercising as a manner to maintain slim every bit much as maintaining fit ( Clohessy, 2014 ) . The functionality of the new coevals of fitness proctors includes characteristics such as the figure of Calories being burnt off as exercising progresses, with different ingestion rates depending on the type and strength of activity. These last two market sections besides have the advantage of incorporating a greater proportion of working people who are accordingly much less influenced by the absolute monetary value of the merchandise. They are besides proactive Twitter and Facebook users and subscribers, reading reappraisals and supplying remark as portion of the consumer decision-making procedure.

Marketing mix

The selling mix, or four Ps ( merchandise, monetary value, publicity and topographic point ) is a tool built-in to the development of selling scheme ; the specific tactics for the major parametric quantities of the merchandise or service can be defined. In more recent literature, the selling mix has been expanded to include the seven Ps ( Kotler, 2012, ) embracing more elements as shown below in Figure 3. The basic four mix elements remain but are joined by the new standards of ‘people’ , ‘physical evidence’ or ‘environment’ , and ‘process’ ; these are considered by some to better depict the market place influences. Kotler ( 2012.p.31 ) describes it as: ‘holistic marketing’ which “recognizes and reconciles the range and complexnesss of marketing activities” .

Figure 3 – the seven Ps of the Marketing Mix

Beginning: Kotler, 2012

However, this study will be concentrating on the four nucleus selling mix elements of merchandise, monetary value, publicity and topographic point.

Samsung selling mix

In the instance of Samsung, the tactics adopted to fulfill some of the selling mix elements might be considered to be:

Merchandise

– The Samsung fittingness proctor is called ‘Gear Fit’ ( Figure 4 ) and is designed for the carpus ; it has a curved show and several apps including a constitutional bosom rate proctor and work out direction system. – The Samsung fittingness proctor is called ‘Gear Fit’ ( Figure 4 ) and is designed for the carpus ; it has a curved show and several apps including a constitutional bosom rate proctor and work out direction system.

Promotion

– Celebrity indorsement is non a new construct and has a long history dating back to the early 1900s. For illustration, harmonizing to Ketcham ( 2001 ) , Buffalo Bill Cody was pictured on a trade card and supplied a testimony for the dorsum of the card, in which he praised the benefits of Kickapoo Indian Oil. Another trade card depicted the image and name of Sarah Bernhardt, linking her with Carters Liver Bitters ( Ibid. ) Samsung has already successfully used famous person indorsement to advance its merchandises, utilizing the sportswomans and adult females at the Sochi Winter Olympics ( Samsung, n.d. ) This doctrine can be extended to prosecute the younger sports-oriented consumer, with the careful choice of athleticss stars supplying a strong temptation for consumers to seek the merchandise. It might be a football player or tennis participant, possibly connected with a major featuring event. – Celebrity indorsement is non a new construct and has a long history dating back to the early 1900s. For illustration, harmonizing to Ketcham ( 2001 ) , Buffalo Bill Cody was pictured on a trade card and supplied a testimony for the dorsum of the card, in which he praised the benefits of Kickapoo Indian Oil. Another trade card depicted the image and name of Sarah Bernhardt, linking her with Carters Liver Bitters ( Ibid. ) Samsung has already successfully used famous person indorsement to advance its merchandises, utilizing the sportswomans and adult females at the Sochi Winter Olympics ( Samsung, n.d. ) This doctrine can be extended to prosecute the younger sports-oriented consumer, with the careful choice of athleticss stars supplying a strong temptation for consumers to seek the merchandise. It might be a football player or tennis participant, possibly connected with a major featuring event.

Monetary value

– If a premium monetary value is to be charged for the merchandise, Samsung needs to supply a strong competitory advantage for the Gear Fit over the competition, peculiarly LG. A good manner of procuring willingness to pay a higher monetary value for a merchandise is to add value through extra characteristics or excess services. Samsung is good regarded for its advanced merchandises and is figure one in the smart phone market presently. This praise will most likely rub off onto the fittingness proctor excessively provided the right attack is adopted in footings of prosecuting the consumer through the societal media concentrating on Facebook and Twitter. – If a premium monetary value is to be charged for the merchandise, Samsung needs to supply a strong competitory advantage for the Gear Fit over the competition, peculiarly LG. A good manner of procuring willingness to pay a higher monetary value for a merchandise is to add value through extra characteristics or excess services. Samsung is good regarded for its advanced merchandises and is figure one in the smart phone market presently. This praise will most likely rub off onto the fittingness proctor excessively provided the right attack is adopted in footings of prosecuting the consumer through the societal media concentrating on Facebook and Twitter.

Topographic point

– With its domination of the Smartphone and tablet computing machine markets, Samsung will be able to work non merely its online presence for gross revenues of the Gear Fit proctors but besides capitalise on the good will and really strong presence in the high street. All the nomadic phone web companies will be acute to stock the advanced Samsung merchandises including fittingness proctors, as will the supermarkets and electronics shops. Samsung already produces medical monitoring equipment for the infirmaries and clinics ; this fittingness proctor could be added to the merchandise scope for health care excessively. – With its domination of the Smartphone and tablet computing machine markets, Samsung will be able to work non merely its online presence for gross revenues of the Gear Fit proctors but besides capitalise on the good will and really strong presence in the high street. All the nomadic phone web companies will be acute to stock the advanced Samsung merchandises including fittingness proctors, as will the supermarkets and electronics shops. Samsung already produces medical monitoring equipment for the infirmaries and clinics ; this fittingness proctor could be added to the merchandise scope for health care excessively.

LG selling mix

The selling mix tactics adopted by LG could conceivably include:

Merchandise

– In footings of the fittingness proctor, LG has developed a twosome of complementary merchandises ; the Lifeband wristband ( Figure 5 ) , with a touch screen ; and the bosom rate earpiece proctor. The Lifeband plays music, receives calls and texts, has a three axis accelerometer and altimeter for entering exercising attempt, and can track the path of the wearer utilizing a Smartphone app. – In footings of the fittingness proctor, LG has developed a twosome of complementary merchandises ; the Lifeband wristband ( Figure 5 ) , with a touch screen ; and the bosom rate earpiece proctor. The Lifeband plays music, receives calls and texts, has a three axis accelerometer and altimeter for entering exercising attempt, and can track the path of the wearer utilizing a Smartphone app.

Promotion

– alining a trade name with major events to make and keep an identifiable profile is cardinal to the publicity strand of the selling mix. The natural mark events for the publicity of the Life set will include the London Marathon and the Great North Run ; supervising the bosom rate during a marathon event aids with tempo and avoids striving the bosom ( Sinha, 2014 ) . – alining a trade name with major events to make and keep an identifiable profile is cardinal to the publicity strand of the selling mix. The natural mark events for the publicity of the Life set will include the London Marathon and the Great North Run ; supervising the bosom rate during a marathon event aids with tempo and avoids striving the bosom ( Sinha, 2014 ) .

Monetary value

– keeping a premium pricing policy would be possible with such an spread outing market, but LG needs to guarantee the consumer is willing to go on to pay that premium through changeless merchandise sweetenings such as the music functionality and GPS capableness. These sweetenings need to be communicated and discussed with consumers through battle through societal media hopefully developing that relationship with the client cardinal to the LG ethos, as depicted in the encircling logo. – keeping a premium pricing policy would be possible with such an spread outing market, but LG needs to guarantee the consumer is willing to go on to pay that premium through changeless merchandise sweetenings such as the music functionality and GPS capableness. These sweetenings need to be communicated and discussed with consumers through battle through societal media hopefully developing that relationship with the client cardinal to the LG ethos, as depicted in the encircling logo.

Topographic point

–Apart from the company web site there must be considerable range for join forcesing with franchise/nationwide gyms ; and exert equipment companies to advance the LG Life set. There will besides be increasing possible in tendering for Clinical Commissioning Group contracts for Telehealth –Apart from the company web site there must be considerable range for join forcesing with franchise/nationwide gyms ; and exert equipment companies to advance the LG Life set. There will besides be increasing possible in tendering for Clinical Commissioning Group contracts for Telehealth2and telecare and telecare3merchandises ; the wearable fittingness proctor supplying a cost-efficient and simple to utilize manner for patients to supervise their ain status and experience more in control of their wellness. merchandises ; the wearable fittingness proctor supplying a cost-efficient and simple to utilize manner for patients to supervise their ain status and experience more in control of their wellness.

Decisions

* Both Samsung and LG Electronics have identified the fittingness proctor market as a possible country for considerable growing over the new few old ages.

* They have both developed attractive merchandises to advance to the peculiar market sections highlighted in this study, including pupils, adult females interested in remaining tantrum through Calorie numeration every bit good as exercising, and immature professionals.

* Pinkse and Slade ( 2004 ) remind us that competition is greatest amongst trade names that are most similar and it seems that these two big Korean electronics houses need to separate themselves from the other in order to make a alone merchandising proposition ( USP ) for their merchandise ( s ) and to bring forth a desire for the merchandise and administrations.

Recommendations

1. It would be good to take a longer term position of demographic tendencies, peculiarly in position of the ageing demographic, to foretell any alteration in the possible market for fitness proctors. Such information is supplied by the Office for National Statistics Census 2011 information and population projections ( ONS 2011 ) .

2. Exploiting the potency of societal media to advance the trade name individuality through taking advantage of the bombilation around the societal side of fittingness and exercising ; which exists peculiarly amongst younger mark market sections.

3. Celebrity indorsement is a truly effectual manner to advance merchandises that are the topic of civilization and desire, peculiarly amongst the young person and immature grownup market. Samsung used athleticss work forces and adult females at the Sochi Winter Olympics to advance their merchandises ( Samsung, n.d. ) ; possibly they can go on this and possibly LG could happen their ain set of famous person subscribers for their merchandises?

4. However, sing the increasing life anticipation combined with the ageing demographic ( a greater per centum of the population being aged over 55, 65 and peculiarly 75 there is a considerable untapped market for advancing fittingness proctors to this group of consumers. The drawn-out retirement periods experienced by many people presents provide considerable possible for advancing a regular exercising government to be built into their day-to-day modus operandi. The fittingness proctor is good suited as an assistance to a healthier old age as it is simple to utilize, portable and wearable, and can be promoted as positively cut downing the likeliness of long term unwellness or disablement. This is backed up by the grounds that high spots regular physical activity as the individual most of import lifestyle behavior alteration for maintaining healthy ( Colberg et al, 2010 ) forestalling type 2 diabetes, cut downing high blood force per unit area and immensely cut downing the hazard of cardiovascular disease and increased mortality.

5. Prosecuting the fittingness proctor market and spread outing it into the Telehealth sector will hold considerable possible excessively as the NHS and health care professionals are progressively encouraging people with long term conditions to be more proactive about self-care and direction. The Department of Health ( 2011 ) estimations there are around 15 million people in the UK with long term conditions ; and that every bit many as 80 % of these people could be supported to pull off their ain status including though the usage of effectual self-monitoring. Not merely will this cut down force per unit area and costs on NHS services, including maintaining people out of infirmary ; but there is grounds that outcomes for patients are improved excessively with people more confident and sing a better quality of life ( Challis, 2010 ) .

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1 GPRS ( General Packet Radio Service ) is a engineering enabling phones to reassign informations rapidly, whilst still leting telephone calls to be made.

2 Telehealth ( or telemedicine ) is defined as the distant monitoring of physiological maps including blood force per unit area, temperature and blood sugar degrees, peculiarly as an assistance to the self-management of long term conditions by patients in their ain places ( Beginning: RCN web site, n.d. )

3 Telecare covers a figure of systems of detectors and dismaies which monitor the safety of the life environment enabling people to stay life at place who otherwise would necessitate attention in a community infirmary or attention place. Examples of telecare devices include fall sensors, personal dismaies, inundation sensors and utmost temperature sensors ( Beginning: RCN web site, n.d. )

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