Samsung’s 4Ps Strategy

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 Samsung is a South Korean Company that was founded in 1938 by Byung-Chull Lee.

The company was first established as a trading entity but it gradually evolved to become an

international amalgamation through numerous mergers and acquisitions. The Samsung

Electronics Industry started in 1969 and has seen it evolve to acquire over 200 auxiliaries across

the globe. The vision of the company is to top 5 global companies by the year 2020, and it

believes that innovation as well as value creation will see it emerge at the top. Samsung also

aspires to emerge as the top 10 world’s best working environments. The company electronics

industry offers a range of products such as televisions, mobile devices, home appliances, among

others to its customers. Samsung’s marketing mix assesses the company or brand using the 4Ps

strategy. The 4Ps include Product, Price, Place, and Promotion, and explain the overall marketing

strategy of Samsung. This paper examines the marketing strategy of Samsung using the 4Ps to

establish its position in the market.

Samsung was not as popular in the last decade as it is now because the company

struggled to catch up with the Smartphone market. However, over time, Samsung has evolved

tremendously that it has become the primary competitor of grand brands like Apple Inc and

Microsoft. Currently, Samsung is the largest technology business by revenue and it is rated as the

7th most valuable company.1 The marketing strategy that the company applied has helped the

company become a leading brand. Its marketing strategy is among the most effective strategies

because it enables a cost-oriented entity to transform its structure to become a leading brand.

What helped Samsung to become an industry leading Technology Company was the

marketing strategy they applied. The Samsung marketing strategy was one of the most effective

1 Bui, Quyen, and Fa Tran. "Planning and managing a corporate event: case: Event Activation Galaxy Studio
Samsung S7/S7 Edge." (2017).

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 strategies ever created because it helped a cost-driven company to change its structure and

become an authority manufacturer.2 As a results of ever-changing demands of consumers in the

technology sector, companies needed to pace up and offer innovative and progressive gadgets to

their target customers. Samsung therefore, had to change its operations to gain a competitive

edge on the market.

Product

Samsung places a lot of investment in research and development to deliver excellent products

and services to its customers. The company offers a wide array of products in different

categories. It diverse offerings stem from the company’s marketing mix. Samsung’s products can

be categorized in five classes:

Mobile devices: Smartphone such as Samsung Galaxy series, Tablets, Samsung Note series,

accessories, and other types of phones

Home Appliances: Refrigerators, Cooking appliances, Washing Machines, Vacuum cleaners, and

Air conditioners

TV/AV : Samsung Television, Video, Audio and, other accessories

Information Technology : Monitors, Laptops, and Printers

Memory/Storage: Portable SSD, SSD, Flash drives, and Memory cards

2 Sun, Yu. "A Smartphone Company's Innovative Marketing Strategy in the Chinese Market: A case study
of iPhone." (2014)

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 Samsung’s brand image driver is the range of Samsung smart phones such as the galaxy

series, and the note series. In terms of product loyalty, Samsung has a benefit as a result of the

trust that the company has created among its consumers. Samsung products have performed well

in the past few years and the quality of its products keeps getting better and better.3 Samsung has

become a brand name associated with quality and class and this attracts more customers.

Similarly, customers recognize the company’s quality of services. Customers are aware that

Samsung apt services for any of its products and customer service never disappoints the

customers.

Price

Samsung is a market authority and leader in smart phones and other grand products. It is

a dominant stakeholder in the market for home appliances and uses two pricing strategies to

serve its customers.

Skimming Price

In this strategy, companies give products higher prices so that they need fewer sales to

break even. It entails selling products at higher prices, sacrificing achieving high sales margins,

and therefore skimming the market segment. Although the business world sees skimming as a

strategy for early product adopters, Samsung has effectively managed to utilize this strategy. For

instance, when the company rolls out a new product with varying capacities of storage, it puts a

higher price tag on them.4 However, when other competitors roll out products with similar

characteristics, Samsung lowers its product prices to easily prevent a reduction in its market

3 Sun, Yu. "A Smartphone Company's Innovative Marketing Strategy in the Chinese Market: A
case study of iPhone." (2014)

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 share due to competition. The company tries to achieve high value at the start through skimming

and then later on drop the prices when new competitors try to enter the market.

Competitive pricing

Competitive pricing is a large part of Samsung’s marketing strategy. Samsung has not

been successful in becoming a power brand in other product categories. Although it is a

trustworthy brand, the home appliances category has not surpassed that of LG. Samsung

therefore uses competitive pricing to prevent attacks from its competitors in the market.5

Additionally, Samsung is not really fast-paced in the home appliances category and therefore it

has to use competitive pricing to defend its market positions. Samsung however does not use

penetrative pricing because it does not enter late into the market. In fact, the company is

currently present in many durable consumer segments in the market.

Place

Samsung recognizes the significance of being present in the market and the competitive

advantage it gains by being present. For this reason, Samsung has ensured its presence through

various market channels. It deals with the channel marketing concept which has three segments.

These segments are modern retail, distributors, and sales and service dealers. The modern retail

category includes popular retailers such as Hypercity, Croma, Vivek’s, Vijay Sales, as well as

other retailers who are present in the current electronic retain value chain. As a largely branded

4 Li,Lee, and Gongming Qian. "Strategic alliances in technology industries: a different

5 Fréry, Frédéric. "The fundamental dimensions of strategy." MIT Sloan management review 48, no. 1
(2016): 71

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 product, retailers may be optimistic to maintain Samsung as the primary product for their clients

or as an alternative brand.6 The sales and services segment involves dealers who are in charge of

corporate sales and who handle the company’s key accounts. The retail dealers may also be

responsible for opening the company’s showrooms. The distributor network is the most crucial

segment for Samsung. In many cities, Samsung has one distributor whom the company uses for

distribution services in specific territories.7 For example, in Mumbai China, Samsung has a

distributor called SSK who distributes all its products. 8 The distributor network has significant

investments in Samsung and their activities go hand in hand for sale of products. Therefore, a

single distributor will purchase Samsung products and they will in turn sell it to other local

retailers.

Promotion

Promotion is a key element in the marketing strategy of any company. Samsung believes

that product advertising strategies are the best forms of promotion to communicate and attract

customers and improve the brand’s image. The company applies multiple promotional strategies

to attract customers because it believes in enticing the customers not only through advertising but

also through strong tactics. The main form of advertising for the company is the use of visuals.

6 Hu, Hai-hua, Jun Lin, Yanjun Qian, and Jian Sun. "Strategies for new product diffusion: Whom and how to
target?." Journal of Business Research 83 (2018): 111-119.

7 Maier, Michl Sebastian. "Corporate diversification strategies and their effects on firm performance-the case of
Samsung's venture." Master's thesis, BI Norwegian Business School, 2017.

8 Lee, Woo-Chae. "An Assessment of Consumer Perception and Marketing Strategies of Major Korean Brands in
Mali: The Case of Hyundai, Kia, Samsung and LG." (2016).

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 Samsung has invested heavily in the use of visual forms such as television advertising,

billboards, posters, and social media advertising to promote its products.9 Similarly, the company

takes advantage of the huge numbers of celebrity followers and therefore uses celebrities as

brand ambassadors to attract their followers.

Besides advertising, Samsung also uses other promotional strategies to attract consumers.

For example, the company is known for promoting events and engaging in charitable endeavors

within its communities of operations. The company sponsors major events and festivals such as

the World Cup, Olympics, and others.10 The company also uses discounts and bonuses to attract

customers. For example, during festive seasons such as Christmas, Easter, and Idd, the company

offers huge discount margins to its customers or participates in entry promotions where winners

are rewarded with their home appliances. Lastly, Samsung uses incentives to attract customers

and sales.11 For example, the company offers substantial discounts to its trading partners to

motivate them to sale its products above those of competitors.

In conclusion, although Samsung may have started out as a small enterprise, it has

adopted an effective marketing strategy that has seen it evolve to become one of the largest

brands in the world. Through its diverse range of products, pricing strategies, presence in the

market, and promotional activities, the company has managed to attract many customers from all
9 Li, Lee, and Gongming Qian. "Strategic alliances in technology industries: a different rationale." Journal of
Business Strategy 39, no. 2 (2018): 3-11.

10 Bui, Quyen, and Fa Tran. "Planning and managing a corporate event: case: Event Activation Galaxy Studio
Samsung S7/S7 Edge." (2017).

11 Maier, Michl Sebastian. "Corporate diversification strategies and their effects on firm performance-the case of
Samsung's venture." Master's thesis, BI Norwegian Business School, 2017.

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https://www.coursehero.com/file/38657955/Samsung-4psdocx/
 around the world and has continued to sustain its image as a superior brand. Samsung’s

marketing mix is a lesson to all companies and marketers. Effective marketing strategies have

long term successful impacts on any business.

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 Bibliography

Bui, Quyen, and Fa Tran. "Planning and managing a corporate event: case: Event Activation
Galaxy Studio Samsung S7/S7 Edge." (2017).
Fréry, Frédéric. "The fundamental dimensions of strategy." MIT Sloan management review 48,
no. 1 (2016): 71.
Hu, Hai-hua, Jun Lin, Yanjun Qian, and Jian Sun. "Strategies for new product diffusion: Whom
and how to target?." Journal of Business Research 83 (2018): 111-119.
Lee, Woo-Chae. "An Assessment of Consumer Perception and Marketing Strategies of Major
Korean Brands in Mali: The Case of Hyundai, Kia, Samsung and LG." (2016).
Li, Lee, and Gongming Qian. "Strategic alliances in technology industries: a different rationale."
Journal of Business Strategy 39, no. 2 (2018): 3-11.
Li, Wei, and Jing Chen. "Pricing and quality competition in a brand-differentiated supply chain."
International Journal of Production Economics 202 (2018): 97-108.
Maier, Michl Sebastian. "Corporate diversification strategies and their effects on firm
performance-the case of Samsung's venture." Master's thesis, BI Norwegian Business
School, 2017.
Sun, Yu. "A Smartphone Company's Innovative Marketing Strategy in the Chinese Market: A
case study of iPhone." (2014).

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