Executive Summary and Introduction
Samsung, The South Korean based electronic devices business, is presenting a new line of Hd tvs, the Smart TV line of LED, Plasma and 3D with Smart TELEVISION technology. Prior marketing prepare for the Smart TV have actually determined the marketplace requires and prospective market growth, the target markets and segmentation, the benefits of the Smart TV over rivals’ items, and how Samsung can position itself at the head of the brand-new interactive tv landscape.
The list below recommendations were made to help Samsung in becoming the Smart TV leader.
These suggestions are: 1. Market Needs – With tvs remaining in the norm, consumers want and also have flat screens, hd, and web capabilities on their TVs (Stein, 2014). 2. Market Growth – In 2014 the shipments of Smart Televisions has increased from the 84 million in 2012 to 123 million (DeMers, 2013). 3. Competitors– the main competitors are Sony and LG. Sony will use the biggest competitive obstacle in the worldwide market, specifically in its primary market of Japan.
4. Product Distinction – Samsung now uses several tvs in their product offering mix which include the Smart TV feature which are: UHD 4K TELEVISION providing 4X the details of Full Hd, Plasma TV supplying amazing contrast and clearness, OLED TV providing True-to-life color and picture quality, and lastly LED TELEVISION providing superior color, brightness, and slimness, (Samsung Electronic Devices America, 2014).
5. Target Market – Early Adopters/Innovators, upper middle class to high income male, with an education. Early adopters are looking for products that will have a lasting value beyond the initial marketed value – for a Smart TV they may want it to be more than an Internet ready television and have 3D capability, synchronicity with other technologies and the ability to view multiple screens on one device. 6. Product Benefits – numerous online applications to use through the Smart TV’s. Television that learns about its users’ preferences – the televisions off a recommended selection of material that is based on the shows that the viewers watch. These recommendations, along with the following analysis of the Samsung Smart TV brand and the financial benefits of actively promoting this product in the United States and in Japan will support the need for intensive marketing to both the domestic and foreign audience. This compete marketing plan will explore the above recommendations in further detail and suggest ways for Samsung to become the leader in the Smart TV universe.
Samsung Consumer Electronics (CE) division is leading the global digital era through continuous new product offerings with innovative technology, unique design, and value. Consumer TVs is the core product of the CE. The Company has maintained its market leadership position for the past 8 consecutive years through competitive advantage in hardware products such as LCD and LED TVS as well as software driven product features such as SMART TV (Samsung Inc., 2014). The Company led the smart TV market in 2011 through launching smart TVs with various smart hub based Apps and implementing a premium category sales strategy. In 2012, the Company introduced a new market trend with the introduction of the Smart Interaction system based on voice and gesture commands for convenient interaction with devices.
In 2013, the Company introduced a system that recommends TV programs based on the user’s viewing history. In 2014, the company plans to enhance usability through innovation, secure various video contents, and strengthen its platform in order to maximize viewing experience (Samsung Inc., 2014). Lastly, Samsung needs to focus on thinking as a global company but also acting as a global company looking to expand to emerging markets.
Market Growth Potential
Annual TV demand in 2014 is expected to be up 0.3% from the previous year, reaching 222.6 million units shipped. LCD TV (including LED TV) demand is expected to increase 4.5% Year over Year to 217.11 million units shipped (Samsung Inc., 2014). The market growth for Smart TVs looks good for the future as long as consumers will be able to have their needs and wants met. In 2014 the shipments of Smart TVs has risen from the 84 million in 2012 to 123 million (DeMers, 2013). In fact many consumers already have a smart TV in their homes. About 25% of the broadband consumers own at least one smart TV (Lee, 2013). In 2011 there were only about 12% of the broadband users who had a smart TV (Lee, 2013).
This is a 13% increase in one year, which more than doubled. Smart TVs market is increasing and more consumers will want to have one or more in their homes and offices. Focusing on penetrating high consuming markets and new emerging global markets should be high on Samsung’s targets. 20% of all TVs shipped worldwide were smart TVs, the highest being in Japan with 36%, with China a close runner-up with 30%. The SMART TV feature was also strong in Western Europe, over 29% and North America at 18% (Displaysearch.com, 2014).
The trend towards large size and high resolution screens that have SMART TV capabilities is accelerating due to intensified competition between manufacturers. Accordingly, market share of major manufacturers with high quality products and brand power is increasing (Samsung Inc., 2014). With the creation and sale of any product, the potential for competition is great and can be quite costly and problematic. The technological field is full of products that are similar in their functions and prices yet are all from differing companies. So it’s no surprise that there are quite a few competitors to rival Samsung’s new 2014 Smart TV.
Sony and Samsung have all released similar items that tout different features and ones that are the same. Sony does not offer live streaming to other televisions in the home or other devices so Samsung is ahead of the curve with their product having the capability to stream shows to any device. Essentially, the market is full of various Smart TVs that all have similar and different features. Samsung needs to advertise for the distinct features that it employs for this particular product and perhaps the exclusive factor of owning a Samsung television.
Segmentation, Target Market, & Positioning,
Segmentation, targeting, and positioning make up a three stage marketing process to determine how a company can suitably attack the market they are conducting business in. First Samsung needs to determine which kinds of customers exist. Second Samsung needs to select which customers they are best off trying to target. Finally Samsung needs to implement segmentation by optimizing its Smart TV’s for that particular Target market for that segment and communicating the way the company would like to distinguish itself from the rest of the industry.
Samsung SMART TV is a specialty product that not all consumers can afford. The market segmentation Of Samsung Smart TV consists of three types: LCD, LED, and Plasma TVs. There are some variances to products a consumer can pick which are size, style, speed, quality, and features that each TV provides. With each added feature price of the items can change.
The key target market demographic for the Samsung Smart TV Line is the 25-40 year old, middle class to high income male, with an education. Considered Early Adopters or Innovators, this target market likes to try new products when they first appear, and often can be the consumer group that may find the defects or flaws in the product. As mentioned in Morgan Gerard’s article, “Innovation & Early Adopters”, early adopters gravitate toward new and innovative products for myriad reasons. Some of generic reasons of early adopters have to do with if the product is new and sexy, they can set word of mouth on a product – if the product satisfies their needs, the opinions are positive. If there is a flaw or recognizable defect, then positive opinion can quickly turn sour.
Early adopters are looking for products that will have a lasting value beyond the initial marketed value – for a Smart TV they may want it to be more than an Internet ready television and have 3D capability, synchronicity with other technologies and the ability to view multiple screens on one device. This target market also makes their buying decisions based on if the product appeals to their sense of creativity, play, and mastery. “Their drive to push the boundaries of an innovation is driven by the personal and the public: early adopters tend to be curious and adventurous people; many derive great pleasure and personal satisfaction from displaying the knowledge and status that comes with mastering a new product.” (Gerard, 2014). The below table outlines Samsung’s target consumer:
Focusing on early adopters in global markets such as the US, Japan and other emerging countries is where Samsung needs to focus the company’s attention. Approximately 27% of TV sets shipped worldwide had internet connectivity, led by Japan, where 46% of sets had networking capability (Displaysearch.com, 2014). Samsung is the #1 TV brand worldwide, in every region except for Japan and China. Thus, if Samsung returns to compete in the Japanese TV market and competes with the domestic brands, it would be sign of a true global leader, increasing the overall Samsung brand value within the region (Displaysearchblog.com, 2014).
Ease of use is another area where Samsung needs to focus its attention. It can only continue to be a brand leader if it listens to his consumer base. Currently the reviews for similar products from LG have rated them to be the easiest to understand and use. “It doesn’t have the most extensive choice of apps, but LG’s Smart TV platform succeeds on ease of use – and spectacularly so. This is connected TV at it user-friendly best” (TechRadar, 2014). Having a simplistic model that its consumers can navigate is imperative to market adoption when expanding into new markets.
Pricing and Distribution Strategies
There are four pricing strategies the company can choose from when deciding on how to price and distribute their product. The strategies are cost-plus pricing, markup pricing, demand pricing, and competitive pricing. In cost-plus pricing a set profit margin is add to the total cost (Lovering, 2014). When a percentage is added to the product’s wholesale cost, this is called markup pricing (Lovering, 2014). In demand pricing the price is determined by the ideal relationship between volume and profit (Lovering, 2014). The competitive pricing strategy is the best strategy to use for Samsung’s Smart TV. Competitive pricing is used when there are various competitors in the market. In competitive pricing, the price is set in comparison to other brands of the same product in the market (Lovering, 2014).
Samsung has a good Brand name, but there are many consumers who will want to pay a competitive price for the product. Even though the company wants to stay competitive they need to ensure the price will cover production costs, overhead, and will still give a profit (Lovering, 2014). After setting the price the company should then also monitor sales to ensure that competitive pricing strategy works. Pricing in Japan is also important, because there is a market in the country for Smart TVs. In fact in 2011 59% of all TVs sold in Japan were Smart TVs (TekCarta, 2013). Samsung will need to use the same competitive pricing strategy in Japan since there are competitors in the Japanese market.
Samsung manufactures the Smart TV and then distributes the product to authorized dealers. The authorized dealers then will sell the products to the end users known as consumers. The consumers are not only people, but companies as well. Many companies will use the smart TVs in their businesses to attract more consumers into their businesses. For example many hotels may want to offer the use of smart TVs in their rooms so consumers can use the internet on.
Marketing Communication Plan
Without the right marketing communication plan a company may not succeed. The most important aspect of the right communication plan is conveying the right message to consumers at the right place and time (RDmarketing, 2011). Samsung will use an integrated marketing communication plan so consumers can hear their message about the company’s Smart TV. Integrated marketing strategies is using a variety of methods to communicate the company’s product, but those methods must also work together (RDmarketing, 2011). Samsung will ensure that all marketing communication has the same message so that the consumer will understand the message. By giving the same message and visuals the company will build their brand with consumers (RDmarketing, 2011).
Samsung plans on using their website to advertise and sell their products as well as build their brand. The company will also use television, radio, and online commercials as well as print ads to get information to consumers about the product. Online marketing will incorporate the use of social media and opt in email marketing. By incorporating all of these various communication avenues the company not only can build the product and brand domestically but also worldwide and in their target market in Japan.
Samsung is a global, highly successful brand that is not struggling financially. With the launch of any new product however, steps need to be taken to ensure financial losses do not occur or that at least do not affect the business negatively. One of the biggest concerns for the company is to accurately determine supply and demand so as to not waste resources or lose potential sales. “Holistic marketers recognize that the marketing environment is constantly presenting new opportunities and threats, and they understand the importance of continuously monitoring, forecasting, and adapting to that environment” (Kotler & Keller, 2012, p. 67). The Smart TV has many reasonably priced models that have not cost the company much in manufacturing but rather in marketing. Understanding the best place to sell these products and knowing how many to have in stock is the best hope for securing financial success.
More financial incentives need to be added to the marketing sections that have not seen a large number of customers who have become loyal and in those markets that have been competitive. “Sales forecasts prepared by marketing are used by finance to raise cash for investment and operations; by manufacturing to establish capacity and output; by purchasing to acquire the right amount of supplies; and by human resources to hire the needed workers” (Kotler & Keller, 2012, p. 85). Essentially, in order for Samsung to retain a positive financial status, the launch of this new product needs to stay on track, and errors in determining market needs should be limited. Intended Marketing Objectives – Y1, Y2, and Y3
The marketing objectives for the Samsung Smart TV both domestically and globally include a variety of steps that will be utilized during the next three years. During the first year, the company needs to ensure that it has accurately assessed the target audience’s needs and wants in order to produce and sell a product that is desirable. Ultimately, “the customer will judge the offering by three basic elements: product features and quality, services mix and quality, and price” (Kotler & Keller, 2012, p. 325). Samsung needs to ensure that any products it produces is directed at the right group and offers a product that is set apart from the competition. During the second year, the marketing objective would be to foster and create customer loyalty so that the brand remains strong and successf
ul. Building solid customer relationships is imperative when there are so many other companies that offer similar products. One way Samsung will build loyalty relationships is by providing customer support and technical assistance for any problems associated with the new Smart TV; “extended warranties and service contracts can be extremely lucrative for manufacturers and retailers” (Kotler & Keller, 2012, p. 350). Year three will see a continuation of this marketing tool with the hope that new customers will be attracted to the brand by word of mouth and by having a product that is solid and able to keep up with market trends.
“Marketing implementation is the process that turns marketing plans into action assignments and ensures they accomplish the plan’s stated objectives” (Kotler & Keller, 2012, pg. 640). Understanding that the SmartTV profitability has grown Samsung has to capitalize on it with the introduction of its idealized version (DeMers, 2013). With that said in order for Samsung to ensure that the goals set out are reached they need to keep a pulse on their consumer base. They can do this by surveys or asking for reviews. This will allow for Samsung to obtain the knowledge and understanding of knowing where their SmartTV stands in the market.
From the surveys and reviews they should be trying to see where consumers are ranking their product in relationship to their competitors. In year two, Samsung would need use the information captured to implement updates. By doing this it shows Samsung’s consumers that the company is listening to them and that this venture in technology is a partnership. It promotes key functions in encouraging marketing excellence. In year three, the culmination of the previous years should be fruitful allowing for new consumers.
Evaluation and Control Metrics and Methodology
Kotler and Keller (2012) define marketing metrics as “the set of measures that help them qualify, compare and interpret their marketing performance” (pg. 114). Samsung has decided to test market their SmartTV. Test market is when “the company chooses a few representative cities and puts on ta full marketing communication campaign, and the sales force tries to sell the trade on carrying the product and giving it good self-exposure” (Kotler & Keller, 2012, pg. 587). Samsung did this by introducing its new take on the SmartTV to different countries. It was first announced to the US in 2013 (“World: Smart TVs getting smarter,” 2013). Since its introduction in 2013 to the US it has also been introduced internationally, customizing the apps to suite the country in which it is being sold in.
In staggering the introduction of the product, Samsung was able to ensure that their claims to set this SmartTV apart from others would be true. These claims were such as “using multiple screens for TV, tablet, notebook or smartphone are driving the explosion in content” (“World: Smart TVs getting smarter,” 2013). They were able to make adjustments prior to launching it in other countries. As well as upgrade the components that were not functioning to their full potential in the countries that it has already been introduced in.
In launching any successful new product most companies to have established a contingency plan to be used when issues arise with the product. These issues can vary from consumer error to defect of the product. Samsung has spent time creating a platform that empowers its consumers in the usage of their products. The SmartTV has numerous avenues that the consumer can rely on if an issue were to arise; such as an introduction tutorial, customer support and a warranty program. The introduction tutorial can be found on ‘Samsung TV Portal’. The consumer is asked to identify the type of television that they purchased. Once the consumer has done this it suggests other accessories that might be needed; leading up to completing the setup of your SmartTV. Samsung has also created an extensive library of ‘Getting Started’ video tutorials on YouTube for consumers to view and use to setup their televisions (“Samsung TV”, n.d.).
They range from the standard setup of the consumer’s television to setting up apps and preferences (“Samsung TV”, n.d.). There are multiple ways to get in touch with customer service this is because “on average 40 percent of who suffer through a bad service experience stop doing business with the company” (Kotler & Keller, 2012, pg. 368). Samsung has made is a product consumer is able to call, email, and contact Samsung directly through their SmartTV. By doing this it allows for consumers to obtain the help they need in the most convenient way for them. Kotler and Keller (2012) define a warranty as “formal statements of expected product performance by the manufacturer” (pg. 349).
As for a warranty, all Samsung products come with a standard warrantee guarantying full functionality of the product. “Products under warranty can be returned to the manufacturer or designated repair center for repair, replacement, or refund” (Kotler & Keller, 2012, pg. 349). Samsung covers all parts of their SmartTV that is damaged as a result of “defect in material, design and workmanship” for on (1) year after purchase (“Samsung Warranty Information”, n.d.).
Samsung has remained one of the top market leaders for their products over the decades by focusing on three things – innovation, quality and reliability. Innovation in that the company’s products are some of the first of its kind, and introduce new technologies to the consumers. Quality in respect that Samsung’s products have the reputation of delivering on what they advertise and last through the years. Reliability is seen in the ability of easy upgrading, full warranty protection and fulfilling all consumer entertainment needs. The Samsung SmartTV encompasses all of these and integrates entertainment, interconnectivity and convenience all in one product.
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Cite this essay
Samsung: New Product Marketing Launch. (2016, Jun 02). Retrieved from https://studymoose.com/samsung-new-product-marketing-launch-essay