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
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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
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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
Reviewing the company’s distribution and channel strategies may help determine the appropriateness of the strategies in the current market and if the company needs to make adjustments to their strategies. Also determining Keurig Inc.’s pricing strategies for consumer sales and aids the business in determining if their pricing strategy is appropriate for the current market. Lastly, identifying promotions for consumer sales helps Lazaris and the other leaders of Keurig Inc. determine if they must change their promotions to obtain the maximum profit from at-home-market sales.
JB Hi-Fi’s current positioning in the whitegoods market is represented in Figure 6 below. By utilising effective marketing mix tactics, JB Hi-Fi can increase their market share and increase their likelihood of achieving the identified branding objective.
These products are marketed through a network marketing organization where independent distributors purchase products for resale not only for their own personal use, but also retail customers.
Distribution channels for when, how and where an organisation’s products are distributed to their consumers. [REFERENCE] The organisation needs to carefully place where they want to distribute their products. For instance, they may have an expensive handbag, so they it would make sense to place it in upmarket department stores and boutiques so that the product is seen as being more exclusive and it also makes it more difficult to obtain if they aren’t available everywhere. [REF] However, if the product is seen as too difficult to obtain, it could affect the overall opinion of the product, which could result in less sales as consumers in developing countries would not consider it a necessary purchase so may choose to go without it.
Samsung has the widest range of product portfolio that include: Mobile phones, home appliances, TV/Video/Audio, tablets, PCs, printer, camera, camcorder, periphe...
The pricing strategy will start out rather high for this product upon its release in order to draw a more selective crowd such as the upper class members of the urban society. Once the product has succeeded within this market there will be a development of additional variations of the product which will allow for certain models, with less features, to be sold at a lower price point in order to attract the members of society who are less willing to pay the high asking price for the top of the line version of the
Price strategy: This strategy includes the total costs that the audience will pay for adopting the desired behavior which will lead to potential
In this type of distribution channel the manufacturer can directly sell their products to the end customer. There is no other intermediaries in this distribution
Originated as low-cost manufacturer of black and white televisions in the year 1969, super sized with a semiconductor segment in 1970s, Samsung delivered massive volume of low-cost consumer electronics to domestic and OEM products to both domestic and global markets until 1993. Due to this fact, company didn’t develop global brand awareness until then. In the global arena, Samsung’s brand message was fragmented and its logo presentations were inconsistent.
A product is a service or item that is offered to the customer to fulfilled their requirements and needs. A brand portfolio is used to include all entities when a large organisation run under various and numerous brands, services and company. Typically, each of the brands possesses a separate trademark and manage as a single business entities. Samsung is a huge company and produce various products with creative and interesting design and sizes, therefore customer has numerous choices. Samsung brand portfolios is Samsung Electronics Co.Ltd, SDI Co.Ltd, Electro-Mechanics Co.Ltd, Techwin Co.Ltd, Heavy Industries Co.Ltd and Security Co.Ltd. All those products had been offered to the multinational company and the world. Every Samsung brand is regulated
Samsung achieved an almost 15 per cent price premium over (the weighted average price of) its competitors (comp. Tab.
· Use of social media for promotion- word of mouth and social media help to get the message across and promote the product efficiently
Promotion. Finally comes promotion - informing the customer on the qualities and advantages of the product so that the potential buyer learns about the product, prefers it to those of the competitors, and has an opportunity to buy it at some place.
The price skimming strategy is used as a means of competing with Apple who is its harshest rival. Samsung is able to use price skimming in the smart phone market because of the fact that it always has a product that has the latest and greatest technological features so people are willing to pay a premium for these mobile devices. So Samsung employs the price skimming strategy by charging a high price for its mobile devices before competitors are able to catch up. One competitors catch up Samsung will have another device that is of a higher quality that it can utilize with price skimming. For example currently Samsung has the Galaxy S7 and S7 Edge as its top handsets and they are extremely popular among consumers despite their premium price
Samsung is an innovative company that focus highly on quality and specialised products, they became an electronics company in 1969 and they released their very first mobile phone in 1988. In 2006, they became the global leading brand within the television market and in 2011, they became the latest smart phone provider in the world and their successful innovation is furthermore expanding. Today Samsung Electronics has proven to be one of the most successful global brands to follow.