6.

Market segmentation
One of the fundamental principles of marketing is the segmentation of the market. Segmentation
means the splitting of the market into groups of end users who are:
1. Maximum similarity within each group
2. Maximum difference between groups

Market segmentation allows marketers to target their promotional efforts to the various consumer
needs with greater precision. This helps decision makers to clearly define the marketing objectives
and resource allocation more efficiently. 2009). The most common ways to perform market
segmentation is through STP (Segmentation, Targeting and Positioning) process (Kotler, Marketing
Management 2003). The choice of the characteristics of segmentation is very important because the
incorrect segmentation can lead to a waste of resources and loss of profit opportunities. The
features that are most commonly used for segmentation are: behaviour; geography; demographics;
psychographics.

Samsung is doing business in one of the most difficult and competitive markets of the world.
Company introduces about 65 phones every year. Samsung traditionally had a conservative image
that focused on low-priced products with less features for the lower and middle level market. With
low Samsung was dominating the lower level market whereas in the upper level market it had lesser
penetration. To penetrate the upper level market Samsung introduced new products with high end
innovative features with high price.
6.1 Segmentation
Samsung is targeting the customer market by dividing it into different segments and offering each
segment different product based on their common characteristics




6.2 Bases for Segmenting Consumer Markets
Samsung products have been divided using four schemes of segmentation variables i.e. geographic,
demographic, psychographic and behavioural.


Dimensions of Market Segmentation (Kotler 2003)

6.3 Geographic Segmentation
Samsung has divided the Asian, European and US market into different geographical regions such as
northern, eastern and southern areas .countries like Korea, china and India are one of Samsungs
main targeting regions.

Samsung changes its product features with the region. The product launches in USA will have
different features compare to the product launches in Korea or china. Every product of Samsung is
made with the thought of local region for example- Samsung phones and T.V. have regional
language options just to make the local people feel more attached to the product.

Samsung also tries very hard to cater to the rural area with its low priced cell phones or televisions.
This can be seen India most where Samsung has launches a wide range of low end smartphones with
great features. The range of product and prices varies from country to country in Samsungs case.

6.4 Demographic Segmentation
6.4.1 Age
when it comes to age Samsung generally goes for all the age groups but with its current high end
products it is looking for the teens and adults i.e.- Generation Y. Samsung does not really
differentiate its product line up with age group.
6.4.2 Family size
Samsung Products are offered to families of sizes. There is not or any difference in the product with
respect to the size of the family.
6.4.3 Gender
Samsung targets both men and women. The products launched in pink colours are a good example
of that. Some of Samsungs products are meant to target men or women specifically. Some of
Samsungs high end smartphones are launched in pink colour so that girls could relate to it and buy
it. Samsung recently launched one of its smartphone with golden colour to attract women who are
fond of gold.
6.4.4 Income
One of the key factors in Samsungs success is that it also targets the lower class unlike most of its
competitors. Samsung is catering to all the income groups. Its products have great variety. The
features in the product changes with the price range. The product which is high priced generally has
more features compare to their low priced products.
6.4.5 Education
Samsung believe in making products that are not that complicated to use.
6.4.6 Race and ethnicity
Samsung does not differentiate among customers in regards to their race and ethnicity at all. The
same products are offered to all the race and community living in a particular area.

6.5 Psychographic Segmentation
Psychographic segmentation therefore divides people according to their attitudes, values, lifestyles,
interests and opinions (Pickton and Broderick, 2005: 377). Samsung mobile are for those customers
also who make every buying choice of according to the lifestyle they live. Samsung came with so
many varieties of mobile phones specially for girls and low price touch screen stylish phones so that
the lower class can also buy touch screen phones. Moreover Samsung is selling low prices
smartphones for the consumers who cannot buy high priced smartphones. Samsung hub is a great
example of this.

6.5.1 Lifestyle
Samsung has classified customers with the different life style they live. For example- i.e. culture
oriented, sports oriented, outdoor oriented. Customers with a high or elite class life style tends to
buy a product that matches with the way they live their life. Customers are differentiated on the
varying level of personality such as compulsive, ambitious. Samsung has introduced various online
groups for people of same interest. These people can share their views about the company and this
helps Samsung because people are talking about the company. Samsung has also provided online
clubs and groups for customers of same interest.

6.6 Behavioural Segmentation
Consumers are also targeted with response to their behaviour .i.e. - the benefit they are seeking
from the product. Segmenting the consumer on how they act, feel about or use the product.
6.6.1 Status symbol some people buy Samsung as a status symbol. They only use Samsung because
it reflects their class and status to which they belong.
6.6.2 Loyalty Status - Samsung also has consumer with different loyalty status and therefore
Samsung is targeting these customer differently based on their loyalty i.e., hard core loyal, split loyal,
shifting loyal, switchers.
6.6.3 Usage rate Samsung has divided its customer according to how much they use a
product. They are divided into groups of non-users, light, medium and heavy product users
and companies try to target few heavy users than many light users. (Armstrong and Kotler,
2005: 194). This is due to the fact that heavy user are less in numbers when it comes to
market share but still they provide more business to the company.(Gunter and Furnham,
1992: 20)
6.6.4 Targeting
The target market includes single, selective and extensive segments. When segments are not clearly
defined product speciality or product variety strategies can be used. Product life cycle is also very
important when you are targeting a segment.
Samsung target the upper, middle and some what the lower class employees. These usually have
busy schedules and hence need to communicate with their colleagues and families.
The secondary target market are the high school, college students .i.e.- generation Y who need
devices which are multifunctional and portable. The secondary target includes medium size
corporations and they aim to help managers and employees have crucial data access on the go.

6.6.5 Positioning
For positioning a product 4 p is the main factor that comes into play.
Product- what is the actual product.
Price- whats the price of the product.
Place (distribution)- Refers to providing the product at a place which is for
consumers to access
Promotion- how the product is promoted.

The concept of positioning the product is usually based on the function of the product or the
experience it offers to the consumers.
Developing a positioning strategy requires integrating the product, price, value chain, and
promotion strategy to focus them on the market target. The positioning strategy matches the
firms capabilities with the buyers preferences. The positioning strategy that the company uses
to market its products is the positioning of the product as a convenient value added device
which can be used for professional and personal use by young professionals. There is also focus
on convenience as it incorporates other features such as music, internet access, and laptops.

Samsung electronics cater to five categories.
TVs and video /audio players
Mobile phones
Computers
Cameras
Home appliances

6.6.6 TV and video/audio players-
Overall positioning: - latest features,3D TV, value for money, innovative products, better build quality
and design and latest softwares.
6.6.7 Home appliance-
Overall positioning: - innovative products with great features and energy efficient hence save a lot of
money. The products are also made in respect to health oriented features.
Cameras:-Samsung is not a very popular company in cameras segment but still its a popular brand.
Cameras segment include dslr, handy cams and digital cameras.
Mobile phones:-when it comes to mobile phones Samsung is the king of the market with its variety
of mobile phones. The phones are targeted to every segment of market with low price phone with
less features and high priced phone with innovative features. Samsung has the largest market share
in mobile phone market.
Laptops: - Samsung is an emerging player in laptops. Though it has its own chip but still it uses intel
chip to become par with competitors.
Overall positioning: - even though Samsung is fairly new in the market with its laptops still it has
given a fair bit of competition to the competitors.
Overall brand positioning of Samsung
Samsung product are very much focused on product features and benefits. The
company wants even the lower segment to enjoy product features at lower price.
The most important thing in samsungs devices are the use of balanced hardware and
software which is is the key to its success.
Samsung provides value for money when it comes to the price of their product.