Marketing

Plan: Samsung
Galaxy Note 2
Marketing Assignment
1.1

Group 3

Members :
Aditya Sood 2013PGP020
Nupur Sahni 2013PGP263
Salil Aggarwal 2013PGP338
Sruthi Thomas 2013PGP402
Sudhir Kumar Singh 2013PGP407
Vivek Devaraj 2013PGP450

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EXECUTIVE SUMMARY

Samsung Electronics is a South Korean multinational electronics and information technology

company. Its a flagship subsidiary of the Samsung Group. It offers a wide gamut of products
like semiconductors, chips, flash memory and hard drive devices

Currently, it stands as one of the world's largest vendors in the mobile phone and
Smartphone markets fuelled by the popularity of Samsung Galaxy Note. The product of South
Korean giant, Galaxy Note, is a hybrid of an Android Smartphone and tablet computer usually
referred to as Phablet.

Having understood the background of company as one the worlds largest cell phone maker
and the 2nd largest chip maker, we analyzed the business context in which Galaxy Note
operates.

The firm has a distinctive strength of low production cost clubbed with a strong brand image in
the eyes of target customer segment of Corporate and youngsters. Major competition is faced
from firms like Apple and Sony, who have been attempting to eat the market pie.

Weaknesses like lack of its own popular OS and software prevail but it doesnt stop it from
tapping the gazillion opportunities open in front of them.

The growing smart phone and tablet market in India displays immense opportunity to a
product like Galaxy Note that has the ability to cater to the needs of both the market segment in
a single product. As indicated by various reports, the phablet market is huge and growing. It has
been forecast that global phablet revenues will total $46 billion in 2013 and will constitute a
significant portion of global Smartphone shipments by 2018.

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SITUATION ANALYSIS

I. THE CUSTOMERS
People who are on the go are the high priority customers for phablets. This includes
people working in a corporate environment, government officials and leaders,
celebrities etc.
Next come the casual day-to-day users whose main consumption need are oriented
towards multimedia e.g. watching movies and reading the news. This segment
mainly consists of the demographic 18-40 and has a huge size, representing a huge
opportunity for phablet makers.

- In January 2013, analysts reported that 25.6 million phablet devices were sold in
2012 and estimated that these figures would grow to 60.4 million in 2013, and 146
million by 2016.
- The major growth driver is the increasing adoption of phablets in emerging markets
such as India that have huge potential for growth. As consumers in the emerging
countries in this region cannot afford both a smart phone and a tablet, they opt for
phablets.
- The phablet market in India is still highly untapped. With growing market need for
smart phones, Samsung Galaxy Note 2 has a lot of opportunity to grow further. Not
only can it take away much chunk of its competitors but with its unique design and
feature it can cater to different markets as well.

II. COMPETITORS
Apple After Samsung, Apple has the biggest market share in the market. Its main
offering to compete with the i-Pad mini. The reception of this product has been positive
and Apple also enjoys a huge brand name in the market. Apple products focus on value
more than price, as is the case with Samsung. Thus Apple is a competitor to watch out
for.
Sony - Sony is a world renowned brand and its entry in the phablet market is a threat
to Samsung as Sony is known for providing innovative solutions to multimedia needs of
the consumer.

Apart from these two companies, several others such as Dell, Asus are coming up with
cost-effective and budget solutions in the phablet area that might cannibalize of
Samsung Note sales in the emerging markets where consumers place more importance
on value-for-money solutions.

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III. COMPANY

Samsung Electronics Co., Ltd. is a South Korean multinational electronics and

information technology company which is headquartered in Suwon, South Korea. It has
assembly plants and sales networks in 61 countries and employs around 221,000
people.
Its the worlds largest mobile phone maker and worlds second-largest semiconductor
chip maker (after Intel Corporation). It has been the worlds largest television
manufacturer since 2006 and the worlds largest maker of LCD panels for eight
consecutive years.
With the introduction of the Samsung Galaxy S mobile phone and galaxy tablets and
now with Samsung note, the companys smart phone line-up was first place in terms of
global sales figures for 2011 and giving run for money to apple.

The values that drive Samsungs business are:

- Dignity-Respect-Empowerment-Teamwork and Entrepreneurial Spirit

- Career and Skill Development
- Social Responsibility
- Maintain Highest Ethical Standards

And its objectives include:

- Maintain market leadership and increase our market shares
- Loyalty and commitment to our Customers
- Build alliances with the leading manufacturers in the industries we serve
- Keep investing in People, Systems, Facilities and Distribution Systems with a long
term view

SWOT ANALYSIS

Strengths Weaknesses

Excellence in engineering and producing Patent infringement

hardware parts and consumer electronics Lack of its own popular OS and software
Innovation and Design Focus on too many products
Focus on environment Main competitors are also largest buyers
Low production Costs
Ability to market the brand

Opportunities Threats

Growing Indias smartphone market Saturated smart phone markets in developed

Growing mobile advertising industry countries
Growing demand for quality application Rapid technological change
processors Declining margin on hardware production
Growth of Tablet market Breached patents
Obtaining patents through acquisitions Price Wars

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IV. CONTEXT

We understood the context in which Samsungs Galaxy Note 2 operates using a PESTEL
analysis. The PESTEL analysis provides an insight into factors which will affect the industry
which in turn will also affect the companies that operate within the industry.

Political

Government instability, rules and regulations which business should follow restricts
free operation
The factors such as minimum wage, health and safety regulations will also impact the
operations.

Economical

The economic factors play a key role in the smart phone industry as the demand is fairly
elastic and it is mostly based on the consumer income.
The smart phone industry is expected to grow at a fairly steady pace and the developing
countries like India, China provides a good market to be tapped

Social

Better education system, better lifestyle and income levels have led to an increase in
the demand of tech-savvy products like smartphone in India.
Fast changing lifestyles are forcing Telecom companies to enlarge the breadth and
depth of their services.
Joint venture in the entertainment sector is going to add more services

Technological

Technological advances in the industry are vital to success of any new smartphone in
the market that is continually growing, as the level of competition is ever rising.
With functions such as camera, internet, social networking and email, Samsung will
have to differentiate itself in its offerings and stand out from its rivals.

Legal

Intellectual property is the key to any technological business and must be cared for and
protected to the fullest amount to ensure the business does not lose out to rivals.
It is vital to protect the rights to it through patents, copyright, trademarks or design to
ensure they are not stolen by their competitors.
It is extremely important that they abide by the laws and regulations set by the different
countries like employments laws, Health and Safety or even trade restrictions.

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MARKET OPPORTUNITIES AND ISSUES

- The market for Phablets in India is huge. Not only is there a huge existing demand in
the market, but also a major proportion of this demand remains largely untapped.
With the uses that Note 2 has to offer, and the brand value associated with Samsung,
the market for Note 2 in India is bound to keep growing. Note 2 as a product can be
widely used by people from the corporate world. With hi-tech features, they can
come up with power point presentations and word documents on the go. Because of
the big screen size and extra entertainment features, youngsters and teenagers have
a perfect product in Note 2. Since in India mobile phones are considered as a status
symbol, Note 2 with its large size and extravagant features completely stands out
and offers to the Indian audience just what they need. Note 2 also has the added
benefit that it can cater to a wider variety of markets. With its unique design and
features, and differentiation that is applied at almost all steps along the value chain,
Note 2 stands out as a product and would be effectively able to steal a large part of
the market away from its competitors and become the major player in the Indian
phablet market.

- The current market for Phablets is very promising. Phablets occupied a small share
in the global market, and accounted for a little over 12% value share of the overall
phablets and super phones market in 2012. In January 2013, IHS reported that 25.6
million phablet devices were sold in 2012. By August 2012, the Note had sold 10
million units worldwide.

- The future market for Phablets has even more exciting opportunities to offer. The
upshot is that the market for phablets that will quadruple in value to $135 billion
(103 billion) in three years, according to Barclays. Shipments of gadgets that are
five inches or bigger in screen size will surge by nearly nine-fold to 228 million
during the same period, though estimates vary. The Asia-Pacific is, and will remain,
the worlds biggest market for phablets, says ABIs Flood. In the Indian context
particularly, the emerging aspiration-filled neo-middle class will provide a huge
expansion opportunity for the phablet devices. Phablets are also proving popular in
emerging markets. A poll of nearly 5,000 readers of Yahoos Indonesian website
chose Samsungs Galaxy Note 2 as their favourite mobile phone of 2012, ahead of the
iPhone 5. Falling component prices will add to demand. The total cost of an upper-
end phablet, its bill of materials, will likely fall to 2,000 Yuan (247.7) this year, says
Gai from Barclays, and will halve within two years. Thus, the sales volume and lower
cost of manufacturing are sure to boost the profitability of the phablet segment in
the coming years.

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The main issues that the phablet market, and consequently the market for Note 2, would be
concerned with are that it would have to face major competition from smart phones as well as
tablets, in addition to the existing market players in phablets. It is also difficult to tap into the
market of consumers who already possess either of the two devices, because they would be
unwilling to spend a handsome amount on a new device when their existing device has a
majority of the functionalities that the new device has to offer. The challenges and issues that
Samsung would face here, in addition to its competitors, would be breaking people out of their
traditional mindsets, and convincing them about the handiness of a device that is both a phone
and a tablet and the extravagant features that it can offer.

OBJECTIVES

The objectives of Samsung behind launching Galaxy Note in the market were to:

To grab the market share of corporate, youngsters and high end customer
Help corporate customers do majority business related functions on the go; give
teenagers and youngsters a complete entertainment gadget with extravagant features
Give a large screen size to make this phone stand out and enhance its image as a status
symbol for customers who buy a phone for this purpose only
Target a market which was in between smart phones and tablets. Provide a large
enough screen size to fit inside pockets as well as give the fell of a tablet as well
To provide a product which was unique in terms of technology and design; a one of its
kind.

PORTERS GENERIC STRATEGIES

OVERALL COST LEADERSHIP:

Phablets occupied a small share in the global market, and accounted for a little over 12%
value share of the overall phablets and super phones market in 2012
In January 2013, IHS reported that 25.6 million phablet devices were sold in 2012.
By August 2012, the Note had sold 10 million units worldwide
The upshot is that the market for phablets that will quadruple in value to $135 billion (103
billion) in three years, according to Barclays
In the Indian context particularly, the emerging aspiration-filled neo-middle class will
provide a huge expansion opportunity for the phablet devices.

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 A poll of nearly 5,000 readers of Yahoos Indonesian website chose Samsungs Galaxy Note
2 as their favourite mobile phone of 2012, ahead of the iPhone 5.
Falling component prices will add to demand. The total cost of an upper-end phablet, its bill
of materials, will likely fall to 2,000 yuan (247.7) this year, says Gai from Barclays, and will
halve within two years.
Thus, the sales volume and lower cost of manufacturing are sure to boost the profitability of
the phablet segment in the coming years.

DIFFERENTIATION:

Technology:

Samsung invests heavily in R&D

They have ventured into country specific labs for the Indian market that specialises in
innovations that are adaptable to the markets in India.
Samsung uses a model that uses voice recognition technology to convert speech into
text messages
It invented the model that automatically scans business cards and inserts the details in
the users address book.
Samsung is also a leader in producing memory chips. It created the worlds first one-
megabit chip and the first chip that held 256 megabits

Design:

The work environment in Samsung encourages younger designers to

challenge their superiors when they come up with ideas for new products.
It invests in designer staff by sending them to work at furniture, fashion and
industrial design houses to keep abreast of the latest trends.
Camera Superior 8 MP camera and resolutions of 3264 x 2448. It also has
autofocus and LED flash and can record 1080p video at 30fps.
Battery life The enlarged size of the device ensures larger battery and
enhanced battery life.
Large screen - 5.5 inch Super AMOLED capacitive touchscreen, with a high
resolution (720x1280 pixels) that allows lots of information to be displayed.
16:9 ratio offers a perfect video viewing experience.
Phablet Since it can be used as both tablet and phone, it offers combined
features of both. The size is in between that of each, and hence offers more
clarity as well as handiness

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 Branding:

Samsung was principal sponsor of the 2004 Olympic games in Athens. The brand of
Samsung helped in promotion of all products including Note 2 that fall under the brands
umbrella
Tie up with LinkedIn to pitch the product to the business class
Disney serves as the creative partner for Samsung. Apart from utilising the creative help of
Disney, the partnership offered a new marketing avenue for the company

FOCUS:

Uses:

Note 2 as a product can be widely used by people from corporate world.

With hi-tech features they can up with power point presentations and word documents on the
go.
Because of the big screen size and extra entertainment features youngsters and teenagers
have a perfect product in note 2.
Since in India mobile phones are considered as a status symbol, note 2 with its large size and
extravagant features completely stands out.
Growing market: Smart phone market in India is still highly untapped.
With growing market need for smart phones, note 2 has a lot of opportunity to grow further.
Not only can it take away much chunk of its competitors but with its unique design and
feature it can cater to different markets as well.

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Sources and Reference

1) http://www.businesswire.com/news/home/20110214006051/en/Research-Markets-
Telecommunications-Industry-India---PEST
2) http://www.reuters.com/article/2012/01/17/idUS192454+17-Jan-2012+BW20120117
3) http://fearlessflyer.com/2013/05/are-phablets-the-future/
4) http://blog.broadcom.com/smartphones/is-bigger-better-hybrid-phablets-are-the-best-of-both-
worlds/
5) http://www.forbes.com/sites/petercohan/2013/06/13/can-apple-compete-with-samsung-in-46-
billion-phablet-market/
6) http://latino.foxnews.com/latino/money/2013/08/20/samsung-galaxy-mega-phone-big-enough-
for-new-phablet-market/

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