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Posted: October 25th, 2020
Samsung started off in the year 1938 by Byung-Chull Lee as a small company that started their exporting business in Korea They had exporting of fish, vegetables and fruit to China. It wasn’t long before Samsung made their presence in flour mills as well as confectionary machines. After many years of striving there company decided for as a cooperation company in the year 1951. It was then they rapidly grew placing foot in various diversified businesses from heavy, chemical and petrochemical industries in 1958 which then led them to enter into Electronics in 1969. Samsung has now transformed into a one of the Leader’s today in the Digital Electronics industry. They have Headquarter in the Samsung Town a town in Seoul, South Korea.
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Samsung had majorly influenced in the South Korean market and effected the various sectors i.e from economic growth, politics, media as well as the culture. Samsung is responsible for almost 20% of South Korea’s exports and revenues. They have grabbed a sort of monopoly place in the South Korean companies. Samsung has set a benchmark in international businesses today and is considered as a role model.
Apple Inc. was formed in the year 1976 by Steve Jobs, Ronald Wayne and Steve Wozniak. They began business selling computers, Apple I personal computer kit. Apple is an American based company that has focussed there entire business in the designing, manufacturing and selling various electronic devices, computer software and personal computers. There headquarters is in a suburban city called Cupertino located in California.
The company deals in the Macintosh line of computers which are the initial successful hardware products, the iPod, iPhone, iPad. Apple operating system the Mac OS X operating system; the iTunes media browser; iLife is the suite required for multimedia and creativity software. Apple recently considered as one of the prime company in view of market capitalization, and the leading company in terms of technology in the world. Apple was stated as the admired company that was published by Fortune magazine 2011.
The state of the art design and innovation in features was what made Apple to reach heights even without much of investments into advertisements, Apple had achieved a top solo grade in the consumer electronics industry which completely boosted its brand image to heights never attained by any other.. This gained them a devoted customer base that are die heart Apple brand, especially in the USA.
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During Q2 of 2011 they had sales of 428.7 million units in the international sales of mobile devices to end users. A direct 16.5 percent increase from the second quarter of the previous year 2010 according to Gartner Inc. as shown in Table 1.1. Smartphones sales were up 74 percent year-on-year and accounted for 25 percent of overall sales in the second quarter of 2011, up from 17 percent in the second quarter of 2010.
Consumers in developed markets are purchases midrange Android smartphones over feature phones, mainly seen due to carriers and manufacturers’ promotions. 1(Gatner)
Since we are focussing on the smart-phone segment, we have considered companies such as Nokia, Samsung, Apple & RIM.
Nokia is still leads in market share in the overall industry. But we can see that in smartphone segment the sales is low due to the highly competitive market that reduced the customer demand towards Symbian.
Samsung, attained a rapid growth in the Smartphone segment during the recent years. Galaxy-S2 sold about nearly 10milion units by end of November. The strong performance in smartphones helped in achieving a good crunch of market share to become the third best vendor in this segment.
Apple, iphone 4S received a overwhelming response from the consumers as it had 4 million pre- orders. The growth mainly came from 42 new carriers and 15 New countries in Q2 2011. Total Apple sales coverage is in around 100 countries.
RIM, market share in smart phone declined by 12% by Q2 2011. It had lost its position No.5 in the international mobile device to a Chinese vendor called ZTE.
Among all the smart-phone segments our major focus is between iphone (4/4S) and Samsung Galaxy S2. From the below table of SWOT analysis it is seen that both have a threat of intense competition and highly developed market. Apple iphone(4/4S) is having a advantage of first mover. Samsung Galaxy S2 is considered to be a price-value product which is its major strength but lacks the Brand value in comparison to the Apple iphone.
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Samsung Galaxy S2
Strengths
Price-value product
Good Distribution channels
Variety in Product Line for all segments
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4G is available in S2
Rich User Interface
Wide Screen, Gorilla glass
Looks not impressive
Lacks Brand value
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Intense competition
Highly Developed Market
Apple iphone 4
Strengths
First Mover
Style/ Brand
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Rich User Interface
User Base
Hype
Opportunities
Existing Applications
Loyal customer base
Distribute itune content
Siri
Apple has already established a place in the minds of the people that it is a very high value product and is portrayed as a sign of perfection. Apple iphone quickly jumped the starting phase and straight away went to growth by their rising sales, growing number of competitors and strong awareness. This is made possible only by understanding the unrealized needs, design and ability to operate with any computer operating system. After the launch of iphone a new era of touch was created that made the other competitors to launch similar kind of product in this segment. Samsung being one of the major player introduced Corby which became a hit among the value consumers, and then in order to gain market share of the high end consumers they launched the Galaxy series.
Targeting the females Samsung had launched Galaxy S2 in Pink colour which also gained a lot of new customers for them.
In Q2 & Q3 Apple had a sale of 38million worldwide whereas then Samsung had a sale of 10 million in the same quarters.
Company Focussed
Competition Focussed
Pushes the Boundaries
Leader: Apple
Challenger: Samsung
Stays within the Boundaries
Niche: Lava/Spice
Follower: LG/Motorola/HTC
Prelaunch Strategy
Public Relations
Blogs
Sneak Peak on R&D info
Buzz & Viral marketing
Launch Strategy
Print Media
TV
Outdoor Media
Social Media
Apple.com
Post Launch Strategy
Carrier handled advertisement
Apple.com
Independent review websites
Digital Campaigns
Samsung also have push & pull strategy for the product launches and promotion of the products. Compare to Apple, Samsung creates buzz among the consumers by showcasing their products in trade shows & exhibitions. Samsung also launches the teaser videos and print media information to promote the product before the launch. In Dubai there are no banners or print media advertisements for Apple, however there are many banners available for Galaxy S2 at different places. Samsung have many official You Tube channels for the different geographic locations. To compete with Apple in USA Samsung launched an official signup page for Galaxy S2 where potential buyers can login to understand the various features of the phone and chat with the official customer support centre. As a challenger strategy Samsung is into aggressive advertisement against the Apple with series of new advertisement especially for US market in which they have shown the new technology innovation of 4G which is currently not supported by any iPhone.
Prelaunch Strategy
Public Relations
Exhibitions & Trade shows
Teaser Videos
Print Media
You Tube Videos
Launch Strategy
Print Media
You Tube Videos
Intense TV Advertising
Outdoor Media
Social Media
Samsung.com
Post Launch Strategy
Banners
Promoters
Dealer Advertisements & Offers
Independent review websites
Trade shows/Exhibitions
iPhone is available in three different versions of Phone memory: 16GB, 32GB, 64GB whereas Samsung is only available in 16GB only. Both are available in Locked and unlocked versions. Locked versions are normally available in 2years contract in USA (ATt&T), UAE (Etisalat & du), India (Airtel & Aircel).
The below table gives the pricing of the two smart-phone giants in three different regions:
In terms of pricing Apple has come up with many following strategies:
To reach out to the Maximum consumers they have launched locked and unlocked versions with significant price differences in some countries.
Their pricing differs depending on country to country & in Asian countries they have positioned as a Luxury product.
Prices are higher than their competitors because of people perceive them as the state of the art technology.
Apple has fixed pricing strategy, changes in pricing occurs only when a newer version of the product is launched.
In terms of pricing Samsung has come up with many following strategies:
To reach out to the Maximum consumers they have launched locked and unlocked versions with significant price differences in some countries.
Samsung provides a normal pricing structure irrespective of the geographical location.
Samsung maintains prices at a competitive price with their competitors.
Samsung is now gradually reducing prices in order to maximize sales and attract new customers to improve their market penetration.
We have conducted the consumer behaviour survey by framing a questionnaire and distributed it to the users of iPhone & Samsung Galaxy S2 in DIAC(Dubai International Academic city). We have considered a sample size of 40 constituting of 20 Samsung Galaxy S2 users and 20 Apple iPhone 4 users(as iPhone 4S has not been officially launched in Dubai yet). With the feedback we have received through our survey we are conducting our statistical analysis and the results are as given below:
The two main objectives of this survey was to understand the decision process of the consumer before purchasing the phone. The 2nd objective is to measure the level of consumer satisfaction among the two smartphone users.
The three basic attributes which came as an important factor after analyzing the data are Brand value, Performance & Features/Specifications.
Brand Value is very important among the consumers of both Galaxy S2 & iPhone4. It has been seen in our survey 59% were Apple users who got more influenced by Apple Brand to purchase their phone compared to Samsung that is 41%.
Performance is an extremely important factor for both iPhone as well as Galaxy users. As shown in the piechart the S2 users were more influenced by performance of the phone as this one of the attribute that led them to prefer Samsung smartphones to the iPhone.
Features/Specifications is an extremely important influential factor for purchasing phone for the users of iPhone and Galaxy S2. For Galaxy S2 it is inferred that 54% users were influenced by this to purchase the phone compared to iPhone which is just 46%.
This is to understand the various medium which has played a important role to facilitate the decision process. In both Samsung Galaxy S2 and iPhone4 word of mouth and advertising played a crucial role where as industrial publications and trade show events were not that impactful.
As seen in the pie chart Samsung has 64% and iPhone 4 has just 36%. Being a challenger Galaxy S2 and shown above having high influence for its performance and specifications word of mouth has become an important factor.
Samsung has been more influential with its advertisements compared to Apple as seen in the chart towards the left. They used Teaser videos and was more aggressive in their Advertising strategy for Galaxy S2.
There were certain attributes shown in the Ad for the two products. After watching the Ads consumers had perceived that these attributes, Product is of High Quality, Brand Awareness, Were the Claims made believable are important than other attributes.
Inspite of the aggressive advertisements strategy that Samsung had shown, Apple still managed to portray their product as a High Quality product from very few of their official advertisements.
As we have seen the Brand value is a high influential factor while purchasing iPhone. This must have been generated through brand awareness in which advertisement is one of the factors.
As we have seen from the Unique selling proposition, Apple had always shown advertisements stressing more upon their Applications. This claim made by them is more believable, as seen from the pie chart.
It is seen from the people we surveyed that there are high number of people who use Internet to understand the overall specifications of the phone. From this we can infer that Internet is a major factor for making their decision for the product.
From the results we derived it’s been seen that Review websites played a major role in the customers who bought Samsung Galaxy S2 whereas You Tube and Company websites were most influenced in the buying process of iPhone4 users.
It’s quite clear from the chart that most of these two smartphone users have experienced the phone prior to purchase.
From the bar chart we interpret that the highest number of people using the Samsung Galaxy S2 got inspired by using their friends phone which led them to the purchase of the same. However, in the case of iPhone both friend’s phone and company showroom both play a vital role. As the major dealers like Sharaf DG and Jumbo they have a exclusive section for iPhone.
It’s clear from the bar charts that majority of iPhone users are all Die-Heart fans whereas Galaxy S2 users are all Inspired users who experienced the phone and then decided to have it. In this we can see that Apple has a strong Brand Loyal customer Base.
From the Survey we inferred that majority of the users in both the brand smartphones are very` satisfied and agreeing that the phone is fun and easy to use. However, the iPhone4 had a higher count in the number of people who found it more fun and easy.
We inferred from the pie chart that majority of the users of Galaxy S2 as well as iPhone4 were Very satisfied about the Quality made of the phone. However, the iPhone4 had a higher count in the number of people who had said has a better quality make of the case.
The majority of consumers were very satisfied with the features which were suiting there need in both the smart phone as we can see from the graph. However, the Galaxy S2 had a higher count in the number of people who had the opinion that it suited their needs.
The internet experience is having more satisfied consumer for iphone compare to Samsung galaxy S2. Nonetheless majority of the mobile users were very satisfied about their Internet access experience.
When it comes to application majority of the two phone users were very satisfied with what their phone provided them. But then when we compare between the two phones we see that iPhone4 had more number of people who were very satisfied with their online Application store as they have an app for almost anything.
Both the phone users had majority users who were “very satisfied” with the photo and video clarity their phone had, but comparing between the two phones its seen in the piechart, iPhone has more very satisfied customers in respect to Photo and camera clarity.
Sound Performance was ranked “very satisfied” for both the phone user in majority, Galaxy S2 has more “very satisfied” customers compared to iPhone4 as we can see from the pie chart.
Clearly from the bar chart its visible that iPhone users are not happy with the Battery Backup the phone provides, whereas for Galaxy S2 its having an uneven distribution so what we understand is the phone gives different battery backup depending on the purpose of what the user does the most.
On the basis of our consumer behaviour survey we have redefined our SWOT Analysis
Apple iPhone 4
Strengths
First Mover
Brand of High Quality& Awareness
Loyal User Base
Photo & Video Clarity
Application store Use
Internet Access Experience
Limited Distribution channels
Less Advertisement
Less Word of Mouth
Opportunities
Existing Applications
Loyal customer base
Gorilla Attack
Intense competition
Highly Developed Market
Samsung Galaxy S2
Strengths
Feature/Specification
Performance
Good Distribution channels
Sound Performance
Suiting Customer Needs
Battery Backup Satisfaction
Opportunities
Word of Mouth
Advertisement
Samsung should focus on brand building strategies.
Samsung should tactically plan and rectify, to create a feeling among the customers that Galaxy S2 is a reliable product of high quality.
That company needs to focus on to influence people to opt their product in the coming future through internet and social media.
Apple should focus more on advertisements.
Apple should make their product available by opening more company stores.
Apple should focus on the product availability on the global scale after the product launch.
It is seen from our studies that this industry is having a strong competitive scenario and technologically innovative segment. Due to its high aggressive nature there is a constant change in the innovation of the products within less span of time.
In both the product Galaxy S2 & iPhone4 having an edge over each other in some or the other attributes for e.g. Apple is known for its brand value where as Samsung is known for its performance. Samsung being a challenger is more aggressive towards its marketing strategy and in recent times they have started Gorilla attacks especially in American & European Markets. Compare to Apple Samsung have wide range of distribution across worldwide which is their major strength. The major strength for Apple is its large loyal customer base without any effective marketing they are able to maintain it.
There is a belief that the challenger may soon will become the leader in this segment but as we have seen in past that Apple has always brought innovation in their product and with this they have gain first mover advantage and able to capture high market share. So in future we believe that there will be a fierce competition in the smart phone segment not only between these two companies but with other companies coming in the picture to gain significant market share.
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