Question

For Samsung mobile phone:

a) Describe total product (core product , actual product , augmented product).

b) Describe product strategy and concept.

c) Type of consumer product.

d) Evaluate brand name.

d) Stage of product life cycle and why.

Please use the keyboard not handwriting.

Answer 1

Samsung Mobile phone

1. Total product

Total product is the total volume or amount of final output produced by a firm using given inputs in a given period of time.

The three levels of product

• Core Product:

Core product is not the product in itself. Core product is a concept that describes the utility that a consumer derives by using the product. It is the main need that is satisfied for which the product was made.

Originally, the telephone was only used as a mode of voice communication. Over the years, technology has made so much advancement that a mobile phone can be almost everywhere and for everything. But the core product in a mobile phone is the ease of communication. The utility derived from being able to communicate with speed and efficiency is the core product.

So, as you can see, the core product comprises of the main “utility” it provides to the consumer. It is the main function of the product. Whatever extra features or benefits the product might have, can be classified as actual product or augmented product.

• Actual Product:

The second one of the three levels of product is the actual product. Marketers should turn the core benefit, the core customer value they identified into an actual product. This involves developing product features, design, a quality level, a brand name and even a packaging. The smartphone you buy is the actual product. You buy the phone, the packaging, the functionality and so on. All these factors at the second one of the levels of product relate to the core customer value. This reveals that the levels of product build up on each other. The smartphone’s name, parts, styling, features, packaging and other attributes all have been carefully combined to deliver the core customer value of staying connected.

• Augmented product:

The augmented product is any non-physical parts of the product. Typically, the augmented product includes such things as warranty and customer service. The augmented product can be an important way to tailor your product to meet the needs of specific customers.

Looking at our phone example once more, the augmented product could include a 12-month warranty for all customers. Business customers may additionally receive a 24-hour replacement service for broken phones.

Adjusting the augmented product is a great way to add value to a product. It is very common to see product advertising campaigns focusing on the augmented product. This is because its one area where its possible to be different from your competitors, which helps you to stand out in the marketplace.

2. Product Strategy:

A product strategy is a high level plan describing what a business hopes to accomplish with its product and how it plans to do so. Some methods of product strategy are:

Samsung’s strategic management revolves around creativity, partnership and talent. The same strategy is

• Product Strategy Through Diverse Product Offering:

It is easy to assume that focusing on fewer products is more effective and efficient than manufacturing and marketing several and almost similar products. But product strategy through product diversification is actually central to the marketing strategy of Samsung. Data from market research firm IDC Research Inc. revealed that Samsung has been the leading smartphone manufacturer in terms of unit shipments since 2012.

Product diversification can be costly and risky. However, when done right, this product strategy provides a safety net against market downturns. Take note that concentrating heavily on a single or fewer products for a limited market exposes a company to risks associated with market volatility due to rising and falling demands.

It is also an effective strategy to grow a business. Product diversification works best for companies operating in a market populated by consumers from diverse demographic backgrounds and with different psychographics.

The market for smartphones and tablets are both volatile and diverse nonetheless. Consumer preferences are dependent on features and specifications relative to pricing points. Some consumers are willing to spend on an expensive device with high-end features. Others prefer buying a device that fits their budget and usability requirements. There are those who do not mind the price but are very particular when it comes to hardware and design specifications.

Through a product strategy that centres on product diversification, Samsung caters to a wider market for smartphones and tablets. For example, the Galaxy S product line caters primarily to consumers from high socioeconomic class. But the company has imported the same user experience to mid-entry consumers through the Galaxy J product line, albeit some trade-offs such as lower hardware specifications and a plastic form factor rather than a metal and glass body. Samsung has also manufactured a slightly trimmed down version of the Galaxy S product line—the Galaxy A. This product line has almost the same processing and memory specifications, as well as metallic body form factor minus premium features including heart rate sensors, better camera optics, and fingerprint sensor, among others.

• Technological Innovation as Part of the Product Strategy of Samsung:  

Samsung operates in an industry wherein technological progress or innovation is a key ingredient in building and maintaining competitive advantage. Throughout the years since the launch of the first Samsung Galaxy device, the company has introduced several innovations that influenced the direction of the market for smartphones and tablets.

The company has been attributed to popularising AMOLED display technology on smartphones and tablets. This display remains a viable alternative to IPS display technology commonly used by other manufacturers. Both AMOLED and IPS can have the same high pixel density and better colour reproduction. Some manufacturers such as LG and Lenovo are now using AMOLED in some of their mobile devices.

With the introduction of the Galaxy Note, Samsung created the specific market for phablets—an amalgamation of smartphone and table and a reference to devices with larger-than-average screen size for smartphones but smaller-than-average screen size for tablets. The Galaxy Note and the Galaxy Tab Note series have also reintroduced the use of stylus pens in mobile computing devices. This input feature stretches the capabilities of smartphones and tablets. Even companies such as LG and Apple have followed suit.

Then there are added features such as a heart rate sensor, finger print scanner, and fast charging capabilities, among others. While smartphones would still work without these features, they provide an added value for consumers. Take note that Samsung is not the forerunner for these features but they managed to integrate them within their premium smartphone devices.

• Promotional Strategy to Supplement the Product Strategy of Samsung:

The product strategy for Samsung Galaxy products also involves heavy promotions using a combination of push and pull strategies.

In a push marketing strategy, a company “pushes” a product or idea through advertising and sales strategies. Samsung does this by investing heavily on traditional advertising just like companies such as Coca-Cola and Nike. This is evident from ads coursed through traditional mediums such as print and broadcast as well as new mediums including social media.

Samsung also does push marketing using celebrity endorsements and spot placements on major events including sports and entertainment shows. The company has also maintained accounts in social networking sites such as Facebook, Twitter etc to purchase ad spaces while also maintaining online presence.

The idea behind a pull marketing strategy is the creation of a strong brand image and the establishment of loyal customer following.

Samsung also does some sort of pull marketing strategy. Using social media, the company tries to build and maintain relationship with consumers through an online presence. The social networking accounts of Samsung also serve as venue for discussions and announcements. Even advertisements also initiate a system for pull strategy.

From the aforementioned, the push and pull marketing strategies work simultaneously for Samsung. These two are complementary. Whenever Samsung rolls out advertisements, the company pushes the Samsung Galaxy brand. Barraging the public with marketing messages will definitely stir interest until the company converts some portion of the general audience into loyal consumers does creating a mechanism for supporting future pull marketing strategies.

3. Consumer Products:

Consumers are speaking, and Samsung is listening. Focused on consumer-centric innovations, Samsung in the mobile phone category has pushed the technology limits and set impeccable standards thus creating deeper, stronger and resilient consumer bonds.

The various consumer products are smart phones, tablets, phablets, smart TV, laptop, home appliances etc.

4. Evaluation of Brand name:

A quick internet search tells us that Samsung was founded in 1938 by Lee Byund-Chull as a medium-sized business exporting dried fish and other foodstuffs to China. Samsung literally means a “Three Stars” in Korean. The symbol of three stars is, in Korean culture, called a “hanja”, the significance of this symbol within Korean culture means “big, powerful, and numerous”.

Think of any high-end consumer durable like a camera, MP3 player, integrated mobile phone, plasma television, or even camcorders, and it is only natural that Samsung comes to mind. Samsung, the South Korean behemoth, was ranked the 6th most valuable global brand in 2017, with a brand value of USD 56.2 billion, by Inter brand, an international brand valuation firm, in its annual ranking of the world’s top 100 brands. Samsung has a diversified empire with interests in electronics, heavy industries, financial services and trading. Envisioning itself as a global leader in most industries, Samsung booked record profits of over USD 26 billion in 2016, on revenues of USD 180 billion.

These achievements are outstanding testimonials to Samsung chairman Lee Kun-Hee’s vision of taking Samsung from a manufacturer of cheap versions of Japanese products to a global digital leader. With a business strategy spun around building a top-notch brand, the company invested billions to reposition itself as a respectable brand, with innovation, cutting-edge technology and world-class design as trademark characteristics. From being on the verge of bankruptcy during the 1997 Asian financial crisis, Samsung has become a truly world-class business empire.

5. The Product Life Cycle

The product life cycle is the process in which the product has to go through various stages, first, the product is introduced in the market until it declines and then after getting declined, it removed from the market.

Stages of The Product Life Cycle:

• Introduction

The first step is the introduction that it needs to go into the market because there is no product that can come to the market without its introduction. If we talk about the smartphone life cycle analysis then there are various promotions and marketing going on in advance before the smartphone introduction in the market. It is not necessary that the companies get to know whether the product will make or break in the market in the introduction phase. They just rely on the product’s demand and analyses its life cycle. During this introduction phase, the promotions and marketing of the product are very high.

Mostly companies invest so much in marketing and they make the people aware of this new smartphone or product so that consumers get their hands on this brand new and latest smartphone. In this stage, the companies get an idea of how will the consumers respond to this product and they promote and market their products according to the response of the consumers. If the consumers like it then how successful will the product be? Also called a heavy spending phase for the companies because they spend so much on promoting and marketing the product. There is no guarantee of the product in this period that it will pay itself through sales or not.

Costs are very high in this stage and the competition is not that high in this stage. Companies need to make some goals in this stage that how can they increase the demand for the product, how can they reduced the competition in the market, and how can they increase the sales of the product. These are some goals that the company wants to achieve.

• Growth

Growth means that the consumer is already taking the product, buying it and the demand for the product is increasing. The demand is increasing that’s why the product is becoming more popular in this stage. Almost all the companies in the market become aware of the product and the product start beginning to draw attention. It also generates very high revenue from the market. It stands out of the crowd and almost all the consumers buying it instead of the other product. If by chance, there is more competition in the market of this product then the company has to invest heavily in the advertising and marketing of the product to beat their competition out of the market.

When the product starts growing the market of the product itself stars growing. As there is a heavy demand for the product in the market and the sales touching the sky then the other competitions may reduce the prices of their products so that people can buy their product. But you need to follow some strategies to keep your sales and demand high in this period of time.

• Maturity

When a product reaches the maturity stage, its sales become down or it becomes a saturation point of the product in the market. In this stage, sales can also start reducing. Because of the high price, the demand is reducing, the sales are also reducing in this phase. Companies reduce their product price because there are various other and latest technology products launched in the market and that too at the same price. So no one willing to buy this product because of its price and old features of the product. For instance, if there are two companies that are selling their smartphones, one launched 6 months earlier and one launched yesterday and both are of the same prices. So yesterday one has the best features and it has the latest technology in it. So consumers will buy the latest and fancy ones.

The price is also not different so why the consumers will buy the old featured smartphone. They will use the new and latest one. So in this stage, the saturation point comes off the product and the sales volume of the product maxed out. In this stage, companies tend to innovate or maintain their product to increase their product’s demand and sales, they also introduced some new technologies in this old product just to increase its demand.

• Decline

Although all companies tend to keep their product alive in the maturity stage as long as possible but declining for every product is inevitable. Each product that is introduced in the market has to decline. In this stage the sales of the product decline significantly. The behavior of the consumer may be changed in this stage as there is less demand for the product. The company loses all its shares in the market of the product and because of competition, sales deteriorate. There is no marketing or minimal marketing at this stage. The prices are also get reduced by the product in the declining stage. Eventually, the product is just retired in this stage.

The life cycle of any product always carries it from its introduction phase to the decline phase. The life cycle of all the products is the same.