Marketing Strategy Of Samsung's Market Skimming Pricing Strategy

Market Skimming Pricing Strategy

This is a strategy that is executed when launching highly priced commodities. It is aimed at maximizing profits by charging a higher price initially to the first customers. With time the price is lowered gradually to attract more consumers to purchase it. Companies will use this strategy to capitalize on those consumers that have the will of spending on a product that has cutting edge technology.

Samsung products in the market are fairly competitive and are one of the best in the market. That being the case, Samsung uses a price skimming pricing strategy to get the best value for its products. In almost all cases, it is the first to launch new smart phone products. Samsung does this at an initial higher price

Samsung products are made available in the market through a varied means of distribution. Samsung executes the distribution by working on a concept of channel marketing with the following segments; sales and services dealers, modern retail and distributors (Kotler & Keller, 2012).

Soon after, the sales and service dealers get involved with the corporate sales. Samsung exclusive showrooms are used by retailers who choose to stock its products as an alternative due to Samsung high rating of its brands, as well as the good quality. Examples of these modern retailers are Vijay Sales, Hypercity, Croma, and Vivex’s. Samsung also has a unique scheme of distribution where it appoints a single distributor in a city. A classic example is in India where it has SSK distributors solely distributing Samsung products in Mumbai city (Jung, 2014).

In view of these distribution channels, we can conclude that Samsung uses a mix of different marketing strategies in regards to

Their policy will involve attracting the customers by using advertisements and at other times, push strategies are used for sales promotions. The new products that are launched are updated frequently in the media, such as newspapers and televisions, to increase the popularity of the newly introduced products. Samsung uses brand ambassadors, for instance, Amir Khan and Priyanka Chopra are celebrities who have been used by the Samsung Company. Amir Khan was present in Mumbai in the launch of the Galaxy S. The multinational company also uses press releases, newsletters, and public relations to promote its products. As a strategy, Samsung uses 5% of its sales on promotion (Jung, 2014).

Pricing Strategy

Since the target group is the younger population who mostly has a low income on average, it is recommended that the price penetration strategy would be best based on the research done by Kotler & Keller (2012). This strategy will involve initially introducing a lower price so to lure more youth to purchase and making it more affordable to this demographic.

Promotional Strategy

To create awareness over the Galaxy series, it is preferred to do a mix of promotional strategies by advertising on billboards and using both traditional media. However, internet marketing, mostly social media networks, as the youth spend most of their time on the social