The High-Quality Low-Price Business Strategy of Samsung Mobile in Penetrating Competitive Market of India1 Deepesh Singh
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Research Paper for Business Statistics and Research Methodology 2012
ABSTRACT This paper studies about the marketing strategies of Samsung. India is a potential market for mobile phone industry. Every mobile company sees India as 900 million mobile customers. But Indian per capita is very low. So the company manufacturing, low cost mobile with various features can only dominate the market. Indian people want to pay less for high quality. The studies focus on the quality, features and price of Samsung and Nokia and compare among them. Further through the secondary data it has been found that Samsung is leading in the mobile market. Samsung’s revenue has increased and market share as well. This will help Samsung to be the next leader in mobile industry. Keywords: Samsung, Nokia, Marketing, Indian telecom sector
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The paper is inspired from Chang, Huai-Chi, Horng, Der-Juinn, Taiwan paper titled The High-Quality Low-Price Strategy in Penetrating Emerging Market: A Case of Nokia’s Business Strategy in China, 2010
Electronic copy available at: http://ssrn.com/abstract=2198366
INTRODUCTION India has the world's second-largest mobile phone users. Nearly 929 million are using mobile phones. So every mobile company wants to enter into the market of India. As India is among the developing countries and as capita of an Indian as much low, low most mobiles are more suitable for Indian. In last two decade, Nokia was influencing the market. The company was leading in number of sales and subscriber. But in last 5 years, few other companies are also struggling to make their position in Indian market. There is a lot of example like Motorola, Sony, Samsung, Spice, and Micromax. But an Indian customer needs a mobile with in his/her price. So the low price but high quality mobiles can only replace Nokia, which Samsung did. We have studied the performance of various mobile companies in recent years. The components are their revenue and market share. We have gathered secondary data from various survey and research papers and online. We collected primary data also though questionnaire. According to the result we have compared the hypothesis with that. LITERATURE REVIEW Literature review is an important part of any research. This gives guidelines about our work Hart (1998). Reviewing any literature developed a fundamental and tells us what to do. It basically tells draw a rough sketch of our work: what work has already been done and what we have to do. We will define a framework with the ideas and work done by earlier researchers. Boon-Young Lee & Seung-JooLee (2004), in their work discuss about the history and growth of Samsung Mobile. Their work shows how Samsung faced the challenges at the earlier stages. How they improved and solved their problem. Basically, Boon-Young Lee & SeungJooLee (2004) divided the era of Samsung into 4 parts. A Humble Decade (1984~1993), A Remarkable Turnaround: “New Management” (1993~1996), Pioneering the CDMA Era (1996~1998), Globalization (1998~ present). They also talked about the innovative model and design, Samsung mobile introduced. They claimed that one of successes factor of Samsung mobile is innovative design and user friendly model. They were first of their kind, first in the world. These features impressed the consumers and finally Samsung Mobile was successful to become a brand. The paper later discussed about the challenges that Samsung Mobile has to face to keep of momentum of the growth. One is ‘Competition in Market’ and
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Electronic copy available at: http://ssrn.com/abstract=2198366
another is ‘Sustainability of high end strategy’. The paper also identified India, as the emerging market for mobile phones and it would be crucial for Samsung Mobile also. Mort & Duncan (2000), identify the effect of 'Country of Origin'. They define the term COO as the effect generated by a product’s origin on consumer and their purchasing behavior. It is a general tendency of consumer that they first see the ‘Manufacturing date and the origin’ like ‘Made in India or Made in China’. In Indian market ‘Made in Korea’ is more preferable than ‘Made in China’. This is a psychological factor, which consumers create based on their purchasing behavior, experienced design and quality, (Kinra 2006). We have a number of duplicate or replica of every brand like Nokia, Sony or Samsung in Indian Market, which come from China Market. In all over the world Chinese products have made an impression ‘Use & Throw’. They do not guaranty of their product. So it brings a bad impression to ‘Made in China’ tag. Dr. Gillian Sullivan Mort and Matthew Duncan (2000) say, “Country of Origin of a product influences the perception of a product to the consumers.” Iyer and Kalita (1997) suggest that both ‘Country of Origin’ as well as ‘Country of Manufacturing’ affect the perception of consumers (Hulland, John S. 1999). Whenever we buy any electronics in India, the first thing comes into mind the Country of Origin. But in most of the package, the Country of Manufacturing is given not the Country of Origin. It is written like ‘Made in China by Sony Corporation Japan’ for Sony digital camera. Such products are called Hybrid product, manufactured in manufactured in one country and branded by another country's company (Richard Ettenson, Gary Gaeth, 1991). ‘Brand Equity’ is another factor which affects consumer purchasing behavior. Aaker, David A. (1991) find that brand equity consist brand image, brand awareness, provided services, quality and brand loyalty. According to Holder (1992), when consumers have a greater brand choice probability and they are willingly pay a high price, brand equity arises. Before buying any product in the market, we first look for a brand. And we are buying any a new product; we investigate about the brand and then either refuse to take or accept to test. Brand loyalty provides less options to consumers to search among alternatives (Uncles and Dowling, 1998). Solomon (1992) says that loyalty may become a habitual in nature and this may be a result of satisfaction. Juthamard Sirapracha and Gerard Tocquer (2012) establish a relation between customer experience, customer loyalty and brand image. Customer experience is the outcome of customer's interaction with the company and with the product, staff and services. It’s a 2
matter of fact that the more the consumers are satisfied, the more our brand image or value will increase. Every company tries to earn a brand value and tries to make their product branded. For that purpose they advertise their product either on TV or with some kind of holding. They use celebrity for the advertisements. They sponsors various events and put their advertisement. They sponsor players and put their tag on their jersey or kits. These are done just to make awareness about their product. Rajeev (2009) finds that 24% of people influenced by advertise in purchasing decision making followed while 44% influenced by Emotional experience i.e. Consumer experience. Price and Distribution are another factors. Price is something that has to been returned by the customers in order to get any product or services. Every company always tries to provide a quality product within reasonable price because customers are more price sensitive, they do want to pay as much less as they can. So it is company duty to satisfy the consumers with the quality as well as with the price. Chang, Huai-Chi and Horng, Der-Juinn (2010) discuss about the strategies adopted by Nokia to penetrate the Chinese market. They say that almost 75% of Chinese population use low cost mobile. So Nokia invested a lot of money behind R&D to develop handset for these low end markets. In case of apparel, it is observed that higher cost means higher quality. Consumers carry such perception. But in case of electronics, the quality reflects itself. Users can easily distinguish between a low cost mobile and a higher cost handset. So it’s a big challenge for the company to build a high quality mobile with a reasonable price. So that they can target a large population in Indian market. Distribution defines how easily the product is available in the market. Most of time consumers do not bother about the quality or the brand. They buy whatever it is available at that time. Suppose we are travelling by a train and we are dying of heat. Then if a guy carry water bottle to sell, we do not bother about the brand or quality. We quickly buy and satisfy out soul. The product gets sold not because of advertisement or quality. It is just because of ‘Availability’. Out of total 919.17 million mobile users in India 323.27 million belong to rural areas. So if we want to increase our sell, we have to reach to the end users where they are.
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INDUSTRY ANALYSIS INTRODUCTION Mobile industry in India started in 1995 with Nokia. Nokia launched their first handset 2110. Kolkata was the first metro to have a cellular network. Initially Government of India was not too much supportive. They took less interest in communication. The call rates, tax and services charges were so much high that a few part of our population could only afford mobile. The license charge hike forced vanished the private sector interest in telecom. No domestic private player took risk to jump into telecom sector. In 1997, TRAI (Telecom Regulatory Authority of India) India was set up. It regulates the policies of DoT (Department of Telecommunication) and monitor licenses. Apart from these two departments, there are Telecom Dispute Settlement Appellate Tribunal (TDSAT) and Wireless Planning and Coordination Wing (WPC) which take care of consumers and licensees and allocate spectrum. It was 1999, when Government of India led by Mr. Atal Bihari Vajpayee, reformed the policies and brought a great change in telecommunication. The government introduced better liberalization and split DoT into two parts. One part of DoT makes policies and another part provide services, later became BSNL. In 2002, the industry got a blow when the incoming calls were made free. These made people to keep mobiles with them. Consumers were demanding low cost calls and it brought a struggle in the industry. The call rates were reduced. So 2002-05 were the golden era for the telecom industry. It took 7 years (1995-2002) to reach 10 million subscribers. But next 45 million users join in just 3 years. At the end of 2005, India had 55 million of subscribers (Nikunj, 2007). It drew the attention of foreign investors as well as domestic. Many service providers like Airtel, idea, Hutch and many more came into the market. Today India has more than 920 million subscribers and 8 million subscribers are joining each month. 65% users belong to urban areas where 35% belong to rural India (TRAI Annual report 2012).
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Figure 1: Growing Rural-Urban Divide and Slow-down in Growth in Rural Mobile Connections
250%
156%
200%
150%
111%
100%
66% 39%
50%
35%
21% 1% Dec_01
38%
21%
12% 0%
162%
2% Dec_03
2%
9%
Dec_05
Dec_07
Urban Teledensity
Dec_09
Jun_11
Mar_12
Rural Teledensity
Source: TRAI. PwC Mobile Broadband Outlook 2010. PwC Analysis. Above chart suggests that urban markets are almost saturated. The teledensity is much higher, whereas the rural markets need to have some investment. The rural India has the teledensity of 38%, increased by just 3%. It is due to network availability. ABOUT SAMSUNG MOBILE HISTORY OF SAMSUNG MOBILE Samsung Electronics was established in 1969 to boost the Samsung group. They put their leg into Mobile industry in 1984. Boon-Young Lee (2004), as written above divided the era of Samsung mobile into four parts. First era starts with the very first thought of Samsung mobile in 1984 and lasted 1993. 1983, a team of 40 people were brought together for the development of mobile. The team was called “Wireless Development Team”. After years of research, the team was successful to develop a car phone named SC-100. But the result was not optimum. It brought disaster to the company. A number of users complained about the product and Samsung failed to make a good image even in the domestic market, South Korea. The team was so depressed that they almost forgot about the development of mobile phone. But they struggled back. They bought 10 models from Motorola worth 2 million dollars. It was a high risk job because a lot of investment was put into the project. They disassembled 5
the model and reassembled. They did it 100 of times and then tested several aspects like connectivity and quality. Finally they launched their second model, named SH-100 in 1998. It did not bring a lot of change. Still Motorola was dominating the market. But Samsung mobile did not pull their leg back. They launched a new model each year. 2nd era, A Remarkable Turnaround: “New Management”, starts with 1993. Earlier days Samsung mobiles were facing a problem regarding network connectivity, which was observed in 1993. And then after a lot of research resolved the problem. They got a breakthrough. Samsung mobile now becoming popular in the market. They made innovative design. Most of the Samsung model launched with some features, which were first of their kind. In 1994, Kum Hee Lee, the then Chairman of Samsung group called a meeting and discussed about the future technology and design. A number of designer proposed their design and technician presented their techniques to improve the brand. Till 1995, it was era of change, change in every terms: Management, Technology and Design. Then comes ‘Pioneering the CDMA Era (1996~1998)’. In Korea CDMA was introduced in 1996. Samsung Mobile launched its first CDMA mobile in 1996, SCH-100. The main challenge was to influence the youth because they are the lead consumers. Samsung Mobile add various kind of features like Voice Recognition. It achieved 57% of CMDA market share in just one year. Samsung Mobile was doing well in PCS market also. To enhance their business, Samsung came out of its den. The first export was to Hong Kong 1997 then Brazil 1998. Here starts another era, Globalization. Just after one year, in 1999 Samsung became worldwide leader in CDMA market share. It had 50% market share. Then Samsung turned to GSM mobile, which was acquiring 70% of total mobiles at that time. Samsung Mobile had 3 big competitor at that time: Nokia, Ericsson and Sony. These companies were making GSM mobiles from a long time. Samsung was doing great in CDMA sector in every country but it was struggling in GSM sector. The road ahead was so smooth. But Samsung did it. It took time to settle down in Europe. Samsung is growing rapidly and its market share was 2.6% in 2000, 4.9% in 2001, 9.9% in 2002, 15% in 2003 and currently Samsung Mobile's market share in 25.7% in Europe ahead of Nokia (23.1%) and Apple (7.2%). In 2012, Samsung Mobile awarded “Best Manufacturer Award” from “Mobile News Award” and “Best Device Manufacturer Award from “Global Mobile Awards.” Samsung early won 6
the title from “Mobile News Award London” in 2002, 2003, 2007, 2008 and 2011. In 2004 Samsung Mobile became the top ranker in mobile sales market in Russia. In the 2nd quarter of 2012, Samsung beat Nokia SWOT ANALYSIS SWOT analysis of a company defines the strength, weakness, opportunity and threats, it has. Strength and Weakness are the internal factors where opportunity and threat are the external factors. It defines the overall strategy of the business and the nature of the environment. In brief, we can say that it is the study of the internal and external factor which are going to affect our business. STRENGTH It is capability of team or the organization, which is very useful to accomplish the goal. They are internal factors means ‘Strength’ will include team work, management, product, services, brand equity and resources. Samsung Mobile, after spending decade of struggling, is now standing at a point of advantages. They have succeed to make a brand and well established all across the world. Few notable points are: INNOVATIVE TECHNOLOGY AND DESIGN Samsung Mobile, throughout its history it has launched a number of unique design phones. Earlier it had replaced the ‘END’ and ‘SEND’ button for the convenient use. They put the buttons at the bottom of the screen, so that people can use one hand to hold the phone as well as to use these buttons. Later it launched ‘dual-folder’ phone with external display (Boon, Seung 2004). Now recently it has brought Samsung Galaxy, with a number of features. The product gives full feature for art & drawing with its S Pen. In India, Samsung Mobile launched the world’s first solar chargeable phone. It can be charged for 8 minutes in 1 hour and the price is also very affordable, 1650 INR only. The solar powered phone, Blue Earth phone will be a low-end-handset. Indian village people, where there is scarcity of electricity can be benefited by this technology. This technology will enable village people to keep mobile without any tension of charging. Samsung has launched 43 models in India, whose cost vary from 990 INR to 37,990 INR. It has 5 models which cost less than 2500 INR with every essential requirements. Nokia 7
has 51 models (3 yet to come) in India markets. Nokia phone starts from 1059 INR and goes up to 25,000 INR If we compare the features of both company’s handset they have almost same features with in the same price range. But if we talk about the design at the low price, Samsung is much better.
In 2012 IDC (International Data Collection) reported that Samsung shipped 42.2 million smartphone in the first quarter of 2011, which is much higher than Apple, which has sold only 35.1 million units. Nokia reported that it has sold around 11 million units.
Figure2: Global Smartphone vendor Shipments: Samsung, Apple, And Nokia
Source: Strategy Analytics (Oct 2011)
The report highlights that the annual growth of Samsung is 267% where except Apple other vendors were trashed. They suffered a lot. Nokia witnessed a decline of 50.8% in its first quarter. Samsung shares 29.1% of Smartphone market, followed by Apple (24.2%). Nokia shares only 8.2% of the market. Current news says that Samsung shipped 56.3 million units in the 3rd quarter of 2012.
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Table 1: Top Five Worldwide Smartphone Vendors, Shipments, and Market Share, Q1 2012 (Units in Millions)
Vendor
1Q12 Unit
1Q12
1Q11 Unit
1Q11
Year-
Shipments
Market
Shipments
Market
over-year
Share
change
Share Samsung
42.2
29.1%
11.5
11.3%
267.0%
Apple
35.1
24.2%
18.6
18.3%
88.7%
Nokia
11.9
8.2%
24.2
23.8%
-50.8%
Research
9.7
6.7%
13.8
13.6%
-29.7%
HTC
6.9
4.8%
9.0
8.9%
-23.3%
Others
39.1
27.0%
24.5
24.1%
59.6%
Total
144.9
100.0%
101.7
100%
42.5%
in Motion
Source: IDC, 2012
Samsung electronics sells a variety of products like Mobile, Tablet, TV, PC, Camera/Camcorder, Home Appliances and Memory cards. These all products are easily available in our market. The sale of these products make Samsung a brand. People who are using Samsung TV or Notebook, and have trust on the brand will surely look for Samsung Mobile also. But in case of Nokia, they only build Mobile. So they have less number of consumers than Samsung. Samsung can target its users to buy mobile, with various kind of offers and promotional pack. Table 2 shows the upward trend of Samsung Mobile. Its market share has increased from 17% to 23% and revenue is increased by 38%. While Nokia has seen lose in this fiscal year. They have lost 1% of their market share also and revenue by 8%. Another companies except Karbonn and HTC have not done much good. They have all lost their revenue comparison to the previous year.
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Table 2: Top 10 Mobile Phone Makers (FY2011-12) in India Rank
Revenue
Revenue
% Change Market Share
(2011-12)
(2010-11)
(Revenue)
2011-12
2010-11
1
Nokia
11925
12929
-8
38.2
39
2
Samsung
7891
5720
38
23.3
17.2
3
Micromax
1978
2289
-14
6.3
6.9
4
Blackberry 1460
1950
-25
4.7
5.9
5
Karbonn
1327
1004
32
4.3
5.5
6
HTC
923
450
105
3
4
7
Spice
790
920
-14
2.5
3
8
LG
780
1834
-57
2.5
2.8
9
Huawei
750
626
-20
2.4
2.2
10
G’five
670
1326
-49
2.1
2.1
Total
31,215
33,031
-5
100
100
Source: Cybermedia's Voice & Data Annual survey of the industry 2012
Recently Samsung launched its first solar chargeable mobile in India named Samsung E1107 Solar Guru. This invention can help those people who has scarcity of electricity. 8 hours can run the mobile for more than 1 hour. The phone will cost 2500-3000 INR. The other specifications are FM radio, Mobile Tracker, 1.52" 65K CSTN display, a 800 mAh battery, flashlight, dual-band GSM and MP3 ringtones. If Samsung keeps such performance for at least 4 years, we can expect that Samsung could be the next mobile market leader in India. WEAKNESS Samsung is newer than Nokia to the Indian market. It will take time to get a position in the market. As far as other companies are concerned Samsung Mobiles are doing much better. But everyone has own weakness.
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Samsung’s major weakness it the market share and consumer’s trust. It will take time to win their trust and to make a brand image. Nokia is the first company that launched mobile phones in the Indian markets. So it has won the trust of the Indian consumers. Another weakness is advertisement. Nokia has tied up with Kolkata IPL Team. Shahrukh khan and Priyanka Chopra are the brand ambassadors. All these give Nokia a large platform and huge crowd for advertisement. Where Samsung Mobile is promoting its brand with Aamir Khan only. They should advertise their product more aggressively. Indian customers buy what they see in TV or with celebrities. Launch of windows phone can affect the market of Android phones. As most of the Samsung smartphones are Android based and Nokia has ties up with Microsoft and launched a number of products with Windows 8 platform. OPPORTUNITY India has more than 900 million mobile customers and on an average 8 million users are added daily. So every mobile companies can see India as the best mobile market. The income of Indian are increasing and the need of communication as well. As most of the Indian customers belong to middle class family. They need a mobile device under 5000 INR with all necessary features. Samsung can produce and can meet their need. The most common features that customers want are Dual sim, MP3 player, Camera, Internet and Long Battery life. Samsung can assume it as an opportunity and should produce mobiles accordingly. As the call rates in India is the cheaper than any another country, the potential of Mobile phones Industry is high. People prefer mobile phone calls than STD. THREATS The major threats to any company is another company in the industry. Samsung’s major rival is Nokia. Nokia is at the top position and most of the customers prefer to have Nokia phone. So Samsung has to win their trust by producing better quality. Apart from Nokia, Chinese mobiles are the most threating component to mobile industry. They product too much low cost mobiles with various features. Indian with low income
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prefer to have those mobiles. They compromise with quality. They only prefer to have various features. As India has a huge potential for mobiles markets, possibility of entry of a new foreign or domestic company is very high. All want to earn profit and always look for a better market. So the new entry can also be threat to Samsung Mobiles. Samsung is producing various kind of products. They vary from Computer to Home Appliances. The failure of one product line can affect the market of another product line. So failure of Samsung Computer will always be threat to Samsung Mobiles. METHODOLOGY AND ANALYSIS Analysis of the data for any research is very important. We collected the data through questionnaire. We have taken a sample of 97 students. The questionnaire has been distributed online. The age group of the sample is 18-23 Years. Then we imported the data into SPSS and analyzed the data according to our hypothesis. People, in the sample gave their answers according to their preferences and understanding. We are trying to understand the purchasing behavior of Indian and perception regarding Samsung and Nokia on the basis of the data obtained. So result may deviate from the real one. To analysis the data we have used SPSS software and applied frequency test and factor analysis. We have tried to test our hypothesis with the result obtained. We have tried to coefficient of factors affecting the purchasing behavior of Indian consumers. Our Hypothesis are: Hypothesis 1: Samsung Mobile is becoming more affordable and favorable mobile phone to Indian consumers. Hypothesis 2: Purchasing behavior for a mobile does varies according to gender. Hypothesis 3: Another appliances from Samsung affect the consumer’s perception for a brand.
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Hypothesis 1: Samsung Mobile is becoming more affordable and favorable mobile phone to Indian consumers.
As per our first hypothesis, we have considered that Samsung is more favorable choice to the Indian customers. In our survey we have found that 63% of the sample agree with this hypothesis. They are considering that Samsung is better than Nokia. The result may be considered that in somehow Samsung can lead Nokia in near future. Table3: Samsung is better than Nokia Cumulative
Valid
Frequency
Percent
Valid Percent
Percent
Yes
61
62.9
62.9
62.9
No
36
37.1
37.1
100.0
Total
97
100.0
100.0
Source: Primary Data In our sample we have found that 24% people are using Nokia and 31% are using Samsung. The result shows clearly that Nokia and Samsung is leading the Indian market. They are considered to be market leader of Indian Mobile Phone. Most of people use Samsung mobile because Samsung provides a wide range of varieties and features in low cost. Table4: Mobile Currently Using Cumulative
Valid
Frequency
Percent
Valid Percent
Percent
Nokia
24
24.7
24.7
24.7
Samsung
31
32.0
32.0
56.7
Motorola
8
8.2
8.2
64.9
Micromax
10
10.3
10.3
75.3
Sony
4
4.1
4.1
79.4
LG
4
4.1
4.1
83.5
Blackberry
6
6.2
6.2
89.7
HTC
4
4.1
4.1
93.8
Chinese
4
4.1
4.1
97.9
Other
2
2.1
2.1
100.0
Total
97
100.0
100.0
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Source: Primary Data To know the current features, quality and services of a brand, we have given a question in our survey. We have asked them to give marks to these following factors (Brand Value, Price, Quality, Service, Design, Availability, Design, and Features) with reference to their current handset. In the following we are considering Nokia and Samsung only. The table only includes those person who are using either Nokia or Samsung. In the following table the extraction varies from 0 to 1. Marks above .5 shows high satisfaction level and below .5 shows high dissatisfaction level. Table 5: Consumer’s Review
Extraction Factor
Initial
Samsung
Nokia
Brand Value
1.000
.708
.794
Price
1.000
.521
.379
Quality
1.000
.700
.768
Service
1.000
.829
.658
Design
1.000
.631
.862
Availability
1.000
.663
.712
Features
1.000
.788
.639
Ads
1.000
.456
.808
Source: Primary Data We can find that in case of Brand value and Quality both companies are doing great. Customers of both brands are satisfied with quality. The differences come in case of Price, Service, Features and Design. Samsung is producing low cost mobiles than Nokia and Pricing for the Samsung mobiles are justifies. Samsung Mobile customers are satisfied with the price they have paid. Samsung is also providing better services than Nokia. But in case of Design and Availability Nokia is far ahead than Samsung. Samsung needs to pay attention towards these factors. Nokia handsets are more attractive than Samsung handset. If we compare recent handsets from Nokia and Samsung, I think Nokia handsets are more attractive. Next factor that is also an important part is ‘Advertisement’. In India the brand ambassadors of Nokia are Shahrukh Khan and Priyanka Chopra. Nokia has collaboration with Airtel also. So we can see Nokia handsets in Airtel’s ads also. But in case of Samsung mobile Aamir Khan is alone standing by. So this affects the perceptions of Indian consumers. For better 14
sells and brand value we need to do advertisement as much as possible. Nokia is far ahead in this race.
Figure 3: Samsung vs. Nokia
1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0
Samsung
Nokia
Source: Primary Data
Hypothesis 2: Purchasing behavior for a mobile does varies according to gender. Through this hypothesis we want to convey that the purchasing behavior of Male is different from Female. Male wants quality where Female pays more attention to the design. Our results is shown in table 3. The result shows that females are conscious about the design of the mobile. The mean of ‘Model Design’ for ‘Female’ is 4.2 where for ‘Male’, it is 3.5. Similarly others options also support the hypothesis. ‘Availability in Market’ is another factor that affects the purchasing behavior. Sometimes we visit market to buy a mobile phone. But at the shop we get a mobile that has more number of features and had better quality and it costs as much as we expected. So definitely we will purchase that mobile. We compromise with the brand. In our result, we have found that such factor affects females the most.
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Price, Quality and Features all affect behavior of a consumer to a great extent. Advertisement enables a brand to make its image in consumer’s mind so that whenever consumers go for purchasing a mobile this brand image strikes his choice. It can change the perception also.
Table 3: Purchasing Behavior
Price
Quality
Service
Design
Availability
Features
Ads
gender
N
Mean
Std. Deviation
Std. Error Mean
Male
78
3.3205
1.13382
.12838
Female
19
3.7368
1.04574
.23991
Male
78
3.4872
1.15931
.13127
Female
19
4.0000
.88192
.20233
Male
78
3.5513
1.15823
.13114
Female
19
3.7895
.85498
.19615
Male
78
3.5000
1.30683
.14797
Female
19
4.2105
.97633
.22399
Male
78
3.6795
1.41874
.16064
Female
19
4.1579
1.06787
.24499
Male
78
3.6154
1.38855
.15722
Female
19
3.8947
1.14962
.26374
Male
78
3.6410
1.37675
.15589
Female
19
4.2105
.78733
.18063
Females are more concern about advertisements while men pay little bit attention. For both the parties Features are well enough important.
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Hypothesis 3: Another appliances from Samsung affect the consumer’s perception for a brand. The result found from the analysis support this hypothesis. We have found that 66% people agree with the statement. Other appliances from Samsung affect the mobile market. These products help Samsung to make a brand image in customer’s mind. So next time customer goes to purchase another product, it can trust Samsung. Table 5: Consumer’s perception regarding a brand affected by another product
Cumulative Frequency Valid
Percent
Valid Percent
Percent
Yes
64
66.0
66.0
66.0
No
33
34.0
34.0
100.0
Total
97
100.0
100.0
Source: Primary Data
CONCLUSION The aim of this study is to analyze the marketing strategy of Samsung Mobile and future scope for the company. We have gathered data from various sources and primary data though questionnaire. We have analyzed the secondary data and found that Samsung Mobile’s market share is constantly growing from 17% to 23% where Nokia market share has dropped by 1% and revenue by 8%. Samsung revenue has increased by 38%. No other company could achieve such level of success except HTC, whose revenue is much less than Samsung. Samsung produces other appliances like Computer, Camera and Home appliances. These products also affect the mobile market. Our survey shows that 60% of Indian consumer’s perception regarding brand is affected by all these products. India is developing and number of mobile consumers as well. India has more than 900 million mobile phones users, which provides a better platform for each mobile phone vendors.
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Some mobiles have started giving their features in Hindi also. It attracts those customers who has not any knowledge of English. They can also run the device and can handle it. Nokia and Samsung are among them. The features and quality of Samsung Mobiles are as good as Nokia, but to increase its sells, Samsung has to do more advertisement in India. Nokia took the sponsorship of IPL team, which gives them a huge platform. Samsung should also do such kind of campaign. Our study also suggests that the main rival to Indian Mobile Market is Chinese mobiles. They are so cheap and contains a number of features. According to a survey it is found that Chinese mobiles give those features in 3000 INR which would cost 15000 INR for Nokia or Samsung. So why not Chinese? Some Indian company has tied up with Chinese manufacturer. They import mobile phones from China and sell them under Indian brand name. So to overcome this situation Samsung has to produce low cost mobile with various features. REFERENCES Aaker, David A. (1991). Managing Brand Equity, New York, NY: The Free Press. Arun Kumar (2012), SWOT analysis of Samsung, Marketing91.com Boon-Young Lee, Seung-JooLee (May 2004). Case Study of Samsung’s Mobile Phone Business. KDI School of Public Policy and Management Chang, Huai-Chi, Horng, Der-Juinn, Taiwan (August 2010). The High-Quality Low-Price Strategy in Penetrating Emerging Market: A Case of Nokia’s Business Strategy in China. The Journal of International Management Studies, Volume 5 Fitzsimons, Grainne M., Tanya L. Chartrand and Gavan J. Fitzsimons (2008). Automatic Effects of Brand Exposure on Motivated Behavior: How Apple Makes You ‘Think Different’. Journal of Consumer Research, 35 (June), 21–35. Hsieh, M. H., Pan, S. L., &Setiono, R. (2004). Product-, Corporate-, and Country.Image Dimensions and Purchase Behavior: A Multicountry Analysis. Journal of the Academyof Marketing Science, 32(3), 251–270.
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