Samsung and Effective Competition in the Smart Phone Market

Samsung competes in a market that is now becoming more commoditized. The overall smart phone market is entering its mature phase. As is characteristic of many firms in this phase, competitors will attempt to steal market share from each other. This occurs because industry growth is slow, and the only way to stay profitable is to take customers from other consumers. Marketing has a very integral role as it relates to consumer preferences and behaviors.

In particular, Samsung must differentiate itself among a litany of similar product offerings in the market (Cho, 2009). Currently, Samsung is unique in its ability to garner a loyal and profitable following. Much like its competitor, Apple, participants who enter the Samsung ecosystem usually stay within it. The familiarity, efficiencies and convenience of the ecosystem make switching to other brands costly for consumers. For example, an Android user, switching to Apple would need to learn an entirely new operating system, menus, and overall functionality.

In addition, Samsung has been known to provide a much higher value proposition for consumers looking to purchase a smart phone. Apple tends to target the premium consumer with its iPhone, iPad, and iPod product offerings. They are often much more expensive and thus warrant a premium value (Dylan, 2011). Samsung, with its products, are more focused on value. In many instances Samsung can perform better or just as well as Apple in many key operating metrics.

Aspects such as screen size, battery life, and applications between the two companies are nearly identical. However, through marketing, one is perceived to be of higher value even though in reality it is not. This perception is an intangible element to the overall value proposition of competitors versus Samsung. The Samsung product lineup is seen as a more value oriented, cheaper solution for consumers. The company has been very aggressive of targeting the low, middle and high end consumer with its products.

Apple, Samsung's primary competitor has remained relatively focused on the high and middle class consumer. As a result, the total costs of ownership for Samsung products are much lower than that of Apple. First, the phone is much cheaper. Second, the overall maintenance of the phone is much lower as it is less fragile than the corresponding Apple phone. Finally, replacement costs in the event that the phone is damaged are much lower for Samsung.

Due in part to the ability of Samsung to cater to all consumers, customers can elect to trade down to a cheaper, more reliable phone. Apple customers do not have this luxury. Samsung's product offering occupy the specialty type, within the Consumer and Services of marketing. Although phones are becoming commoditized, Samsung offers a unique suit of products that are differentiated and provide a special value for consumers. Items include Smart Television, Smart Watches, and other unique electronics.

In each case, Samsung has an offering that is unique relative to peers in certain respects. In regards to marketing, we will be highlighting these differentiated factors to drive adoption and sales growth. For example, consumer reports often show Samsung products far ahead of peers with respect to quality and overall value. The marketing strategy for focus on the compelling value proposition the firm offers relative to peers Unfortunately, all of Samsung's products will need to be modified and continually advanced.

It is the nature of the technology sector to continually innovate. As a result, an incumbent can easily be replaced by another competitor who is often more forward thinking and innovative. Product extensions and new product development provide an ecosystem by which Samsung can utilize. As oppose to marketing a particular product, the company can instead market it's entirely lineup of products. Unlike competitors, Samsung has a full assortment of product in multiple product categories and in multiple value ranges.

By marketing this variety and choice, consumers can easily adopt the Samsung brand irrespective of price. Examples included the Samsung Smart Watch, which can be used in conjunction with both the phone and television also provided by Samsung. The actually phone and television however, can range from as low as $200 to as high as $6,000. The consumer in this example has a choice in which offering to purchase and what value they believe is correct.