Mobiles

A Study on Market Segmentation of Samsung Electronics Ltd. with Special Reference to Mobile Phones

Market segmentation refers to dividing a broad target market into consumers occupations, or countries that have, or are perceived to have, common needs, interests and preferences, and then designing and implementing marketing strategies to target them. Samsung is one of the top players when it comes to mobile phones. Samsung Electronics company offers a wide range of products for all sections of the society in most of counries of the world. Its focus is on the middle class section of the society, giving them a strong position in the Indian market, which is also one of the reasons for its high sales. According to the researcher after looking at the results it was established that the focus of Samsung is on the middle class of the society and the consumers themselves want mobile phones to be at affordable rates that suit their pockets. In this research the researcher has collected data from students and this research is based on the opinion of the students.

Introduction

Market segmentation is a marketing strategy that involves dividing a broad target market into sub-groups of consumers, businesses or countries that have, or are perceived to have, common needs, interests and preferences, and then designing and implementing strategies to target them. In today’s scenario there is a wide range of mobile phones available in the market. According to Counterpoint Research, despite increasing competition, Samsung has managed to maintain its position as the number one smartphone manufacturer in India. The Samsung brand becomes the best selling company when it comes to mobile phones. They offer a wide range of products for all sections of the society. Their focus on the middle class segment has given them a strong position in the Indian market which is also a reason for their high sales. The methodology adopted is empirical and theoretical. The problem is analyzed in the light of social issues; the method of research is deductive as opposed to exploratory or formulaic design. Data is collected based on practice research through questionnaires.

The purpose of market segmentation is to reduce the risk in deciding where, when, how and to whom a product service or brand will be marketed. You can use market segmentation to increase the efficiency and effectiveness of your marketing initiatives by identifying strategic marketing goals and dividing mass markets into groups of consumers who have clearly expressed common needs. This type of strategic approach lets you leverage your marketing efforts to achieve better performance while minimizing promotional costs for those who are not interested in your products.

The aim of the research is to analyze the segmentation of markets for Samsung mobile phones and also to analyze the appropriate market segmentation for the same.

The Samsung brand becomes the best selling company when it comes to mobile phones. They offer a wide range of products for all sections of the society. Their focus on the middle class segment has given them a strong position in the Indian market which is also one of the reasons for their high sales.

The scope of this research is aimed at analyzing the sales volume of Samsung mobile phones in the context of the Indian market.

The methodology adopted is empirical and theoretical. The problem is analyzed in the light of social issues; the method of research is deductive as opposed to exploratory or formulaic design. Data is collected based on Samsung mobile phone customer through question.

As Philip Kotler further explains, market segmentation divides the market into homogeneous subgroups of people who hence have something in common. This division allows an enterprise to focus its marketing efforts on specific target audiences, whose needs it is able to satisfy more effectively. with a differentiated marketing mix. Market segmentation is the first step in defining and selecting target markets to pursue. Basically, market segmentation action is the process of dividing an overall market into two or more groups of consumers. Each group (or market segment) should be similar in terms of certain characteristics or product requirements. Market segmentation is the identification of parts of the market that differ from one another in whole world.

Segmentation allows the firm to better meet the needs of its potential customers. Market segmentation is a marketing term that refers to the aggregation of potential buyers into groups or segments that have common needs and respond similarly to marketing action. Market segmentation enables all total types of companies in whole world to target different-different categories of consumers who perceive the full value of certain products and services differently from one anotherMarket segmentation is the process of dividing the entire market into different customer segments. Targeting or target marketing involves deciding which potential customer segments a company will focus on. Marketing segmentation differentiates a market into distinct groups, while targeting means the choice of segments to be addressed. Both are very crucial in marketing: the former for allowing insight into the audience and the latter for the proper exploitation of resources and messaging. This would be much more efficient marketing and better customer satisfaction.

Samsung Electronics started its operations in India in December 1995 and today is a leading provider of consumer electronics, IT and telecommunication products in the Indian market. Samsung India is the regional headquarters for Samsung’s South-West Asia operations, employing over 45,000 employees and approximately 11,500 employees are involved in R&D.

Samsung began operations in India through its manufacturing complex in Noida (UP), which today has facilities for colour televisions (including 3D, LED and LCD televisions), mobile phones, refrigerators, washing machines and split air conditioners categories. In November 2007, Samsung added a second state-of-the-art manufacturing facility at Sriperumbudur, Tamil Nadu, and further scaled up production to position itself at the very forefront of India’s increasingly burgeoning electronics manufacturing sector. Today, the Sriperumbudur facility manufactures various types of colour televisions, various types of fully automatic front loading washing machines, digital refrigerators and digital split air conditioners. Samsung India has three R&D centres in India – two in NCR and one in Bangalore. While the Noida R&D center develops software solutions for high-end televisions such as plasma TVs, LCD TVs and digital media products, the other center is engaged in R&D solutions for product hardware. The Bangalore R&D center works on key projects for Samsung Electronics in the fields of telecommunications, wireless terminals and infrastructure, networking, social (system on chip) digital printing and other multimedia/digital media as well as application software.

Samsung India is the market leader in various types of top branding product categories such as different-different types of mobile phones, different-different smart phones, digital panel TVs, side by side digital refrigerators, frost free refrigerators, different-different microwaves and inverter ACs.
Samsung India has won numerous awards and recognitions for its corporate initiatives as well as its product innovations in audio visual, home appliances, IT and telecommunications product categories.

In addition to developing innovative technology, Samsung attaches great importance to acting as a responsible corporate citizen in the communities where it operates. Its CSR programs respond to social and environmental needs and seek to give back to the communities that support the company.In 2009, Samsung launched the corporate social responsibility activity called the ‘Samsung Hope Project,’ involving education, culture, sports, social welfare, and community building. Its object is to improve the livelihood in the community through various programs by supporting growth and changes for the better in various social sectors of many parts of the world. Each programme under the Hope Project uniquely addresses the needs of individual communities, emphasizing innovations for community development, including education, technology, engineering and IT technical training.

The company’s CSR initiatives such as Samsung Smart Class and Samsung Technical Schools have been recognized by several prestigious organizations, and the company has won accolades from these projects aimed at giving back to society. Samsung Electronics (Mobile Division) operates in one of the most competitive markets in the world. According to the US Federal Communications Commission, 67 new smartphone devices are introduced each year. Samsung traditionally had a conservative image focusing on low-priced products for the lower end of the market. With low prices it was able to compete in the lower market while its penetration in the upper market was low. Samsung moved up the value chain and away from the bottom-end market, emphasizing the need to innovate and create strong brand equity. With this strategy, the company could compete with top brands, offering value-added products with advanced technology, hence placing it in an elite position. The following is a stage analysis of Samsung Mobile.

One of the fundamental principles of marketing is market segmentation. Segmentation means dividing the market into groups of end users that have:

1. Maximum similarity within each group
2. Maximum difference between the groups.

The current segmentation strategy at Samsung focuses on behavioral and psychographic segmentations. It targets customers with a certain lifestyle, purchase habits, brand loyalty, and usage of the product. Through the identification of various customer behaviors and psychographic characteristics, Samsung develops marketing initiatives that precisely meet the needs and desires of these diverse customer groups, enabling the company to establish better engagement and satisfaction for them.

Types of Market Segmentation

1. Geographic

It enables Samsung to provide the Guru segment, basically keeping in mind the affordability and simplicity factors for rural areas, while its Galaxy segment targets urban users with advanced features and state-of-the-art technology for premium smartphone experiences. Samsung is one of the largest manufacturers of mobile phones and has something for everyone.
Demographic

Samsung has mobile phones for youth aged 16-29 years, businessmen etc. For middle class youth it has Samsung Guru which is for government. Lower class workers as well. Guru has many variants; it is also coming in 3G. If you want to get a cheap 3G handset then this is a good option. Samsung Galaxy is a good choice for the youth as it has many attractive features like Wi-Fi, 4G. Galaxy is also for the businessman. Samsung Galaxy S II is enterprise-ready, ensuring security with Exchange ActiveSync features. Partnering with the best class enables Samsung to provide end-to-end mobile solutions that perfectly fit business needs. Equipped with advanced security features, Galaxy S II ensures truly secure communication and management of data; this is why professionals who take business seriously can confidently opt for it.

2. Psychographics

Samsung mobiles are also available for customers whose choices are based on their lifestyle. Samsung has come up with some fancy mobile phones especially for girls and cheap touch screen stylish phones so that everyone can enjoy touch screen like a normal mobile. Samsung mobile phones range from 1200 to 50,000+.

3. Targeting

After segmenting the market on the basis of different groups and classes, targets need to be chosen. Samsung mobile phones company have the following target customers:

• Fashionable young people.
• Professionals.
• Big businesses.
• Normal cellular phone users.
• Organizations such as: public safety, government, and services for both utility and manufacturing enterprises.
• Institutional sales for colleges.
• The goal is not only numbers based, but also about acquiring and retaining customers.

4. Positioning

Positioning is about the customer’s perception of the brand as different from other brands on specific dimensions including product attributes.

The strategies adopted by Samsung to establish its position in the mobile phone market are as follows:

• It focused more on the realized margins that come from the mid-to-high-end segments
• Samsung Concept Stores
• Market creation and category building in smaller towns
• Extensive care network
• Access to Samsung Care Line
• Pioneer in the 3G segment of mobile phones.
• Branded itself as a synonym for quality.
• Created a unique brand image for itself as a high value driven brand.

Market segmentation involves identifying a sufficient number of common buyers. This enables the total demand for a product to be divided into economically viable segments. The segments fall between the two extremes of total homogeneity and total heterogeneity. Segments benefit marketers in several ways which may be discussed under four headings:

1. Proper selection of target market
2. Tapping a particular market
3. Efficient and economical marketing efforts;and
4. Benefits to customers.

1. Proper selection of target market: The market for any product is made up of many segments. The market is the aggregate of consumers of a given product. Consumers are not a homogeneous group. They differ greatly in their character and buying behaviour. Thus, many different segments exist in a market. Market segmentation helps marketers to divide the heterogeneous market. It is possible to differentiate one customer group from another.

2. Tapping a particular market: Segmentation enables marketers to understand the needs of customers and serve them well. Forecasting the likely response from each segment is possible. With similar responses from each segment, marketers find it easier to develop suitable marketing programmers. By tailoring marketing programmers to suit different market segments, marketers perform their functions effectively.

3. Efficient and economical marketing efforts: Segmentation makes marketing efforts both efficient and economical. Marketers divide the market and try to satisfy the needs of that segment. It helps in designing those types of promotional tools which are effective from the customers point of view. Marketing efforts are focused on the specific needs of the segment. Thus, the marketing efforts made by the marketer become more productive. They help the marketer in evaluating the results of his marketing programmers. The best time to introduce new products, advertising, etc. can be determined easily.

4. Benefits to the Customer: Segmentation benefits not only the marketer but also the customer. It differentiates one customer group from another in a given market. It helps the marketer to concentrate on meeting the specific needs of the specific segment. Nowadays, segmentation has attained a high level of sophistication. Some of the advantages of market segmentation turn out to be a costly proposition. Different marketing mixes for different segments are difficult to create because a marketer is faced by an increase in complexity. Also, the cost of producing a wide range of products is greater compared to mass production, which is cost-efficient since it focuses on one product, thus making the task of marketing even more difficult.

Even major players like Bata have made mistakes in market segmentation. In the early 1990s, Bata introduced several high-priced brands of footwear targeted at top tiers of the Indian market. The company attempted to spread and expand its product lines to reach classes of affluent consumers. This segment was not big enough for Bata. The share of this segment in the Indian footwear market is merely 5-10 per cent. The trend of sales was not sufficient to justify large-scale production since the level of demand reached a scale that would substantiate expanding the manufacturing process to fulfill the potential demands of the end consumer. After suffering losses in the high-end segment, Bata returned to the mass segment.

Promotional expenses, cost of keeping adequate inventory of each type of goods, etc. also increase, reducing profitability. Administrative expenses increase since marketers have to apply different marketing programmers for different segments.

Advantages of Market Segmentation

• Samsung determines market opportunities
• Samsung makes adjustments in marketing appeals
• Samsung develops marketing programmers
• Samsung designs its own products
• Samsung makes efficient use of resources
• Samsung provides better service to customers

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