Smartphone industry analysis taking Samsung's galaxy S series into consideration.

1. Smartphone Industry Analysis:
Samsung Galaxy S Series
Presented by :
Pritom Gogoi

2. SMARTPHONE MARKET
• The worldwide smartphone market
grew 25.3% year over year in the
second quarter of 2014 (2014Q2).1
• Total mobile phone shipments in
2013 reached 1.83 billion units
globally, a year-on-year increase of
6 percent from 1.73 billion units in
2012.2
• Smartphone sales in India have
grown 65% to 23.5 million units in
the third quarter of 2014.3
SOURCE: 1 Smartphone Vendor Market Share, Q2 2014
2 CCS Insight Report: Global Smartphone Market Analysis and Outlook
3 Smartphone sales in India up 65% in Q3: Report

3. GLOBAL MARKET SHARE 2013 - 2014

4. GLOBAL MARKET SHARE
COMPARISON 2011 - 2014

5. INDIAN MARKET SHARE

6. • Growing popularity of large display mobiles.1
• Trend of Android Mobile phones – Android OS Market Share: More
than 50%.2
• Rise of Phablets (5.0 – 6.8 inches) – Nokia XL, Samsung Note 4,
Samsung Galaxy S5.3
• Rise of dual Sim phones.4
• Multi core processors- Better speed and Reliability.5
SOURCE: 1,2 & 3 ERICSSON Consumer Lab Report 2014
4,5 KPCB Internet Trends 2014
TRENDS

7. • Significantly decrease in Mobile prices.1
• Increasing usage of Mobile Internet.2
• Increasing standard of living and buying power of consumers.
• Low cost Smartphones - Micromax, Karbonn, Lava, etc.
• Multiple and Innovative features- Latest OS, high end graphics.
KEY DRIVERS
SOURCE: 1,2 IHS QUARTERLY The Future of Smart Phones

8. • One device for all of your electronic needs.1
• Ease of use and security.2
• Advancement in digital health market.3
• Smartphone manufacturers are diligently trying to find
permanent solution to increase battery life, one of which is
to have the smartphone generate its own power.4
FUTURE PROJECTIONS
SOURCE: 1,2 IHS WEARABLE
3,4 Ricknas,Mikael ., CITEWORLD

9. SAMSUNG
• In 1983, Samsung jumped into mobile phone business.
• Samsung launched its first Samsung Galaxy Phone in June 2009,
and it offered a good number of features as compared to any
other phones.
• The success is entirely built on Samsung’s Galaxy brand which
has encompassed over 50 separate devices.
SOURCE: http://www.samsung.com

10. • Samsung has largest market share of 24.3% followed by Nokia,
Apple, LG, Sony and HTC which have market shares of 13.6%,
8.4%, 3.7%, 2.1% and 1.3%.1
• In smartphone segment also Samsung is leader having market
share of 30% followed by Apple which has market share of
14.9%.2
SOURCE: CCS Insight Report, Global Smartphone Market analysis.
SAMSUNG MARKET SHARE

11. YEAR MODEL
June 2010 Galaxy S1
May 2011 Galaxy S2
May 2012 Galaxy S3
April 2013 Galaxy S4
April 2014 Galaxy S5
SOURCE: http://www.samsung.com
SAMSUNG GALAXY S SERIES

12. Units Shipped Worldwide
SOURCE: CCS Insight Report, Global Smartphone Market analysis.

13. Indian Market Share
• Samsung Electronics has surpassed Nokia in
overall Mobile shipments in India during the
1st quarter of this calendar year.1
• Samsung achieved No. 1 ranking in sales
revenue and market share in mobile phone
market.2
SOURCE: 1 IDC Asia Pacific Mobile phone tracker, 2013 Q1.
2 SAMSUNG ELECTRONICS ANNUAL REPORT 2013.

14. Segmentation refers to a process of bifurcating or dividing a large unit into
various small units which have more or less similar or related characteristics.1
SEGMENTATION
Steps for Market Segmentation
• Identifying product-related need sets.2
• Grouping customers with similar need sets.3
• Describing each group.4
• Selecting an attractive segments to serve.5
SOURCE: 1 MSG Market Segmentation
2,3,4,5 Consumer Behavior, Del l .Hawkins

15. Major Segmentation – SAMSUNG
DEMOGRAPHC BEHAVIORALPSYCHOGRAPHIC
•Age
•Family size
•Gender
•Income
•Occupation
•Lifestyle
•Personality
•Values
•Occasions
•Benifits
•User status
•Usage rate
•Loyality status
Source: European Journal of Business and Management Vol 3, No.9, 2011

16. TARGETING
• Samsung has adopted a multi-segment target strategy.
• Samsung is targeting and selecting target segments which are more profitably and
able to generate higher sales and profits.
• Samsung targets teenagers or young people with products which are more
innovative.
• Samsung also using niche marketing strategy because Samsung has recognized a
niche market for flip smart phone.
Source: FlyTXt

17.  “But positioning is not what you do to a product. Positioning is what you do
to the mind of the prospect.”1
 Samsung came up with AMOLED, which stands for Active Matrix OLED, is a
hybrid display technology that pairs the active matrix backplane from a
traditional TFT display with an OLED display.2
 Samsung used Gorilla glass technology developed by Corning Incorporated
in Grand series, S series and Note series.3
POSITIONING
SOURCE: 1 Ries Al, Trout Jack (1982) Positioning: The Battle for Your Mind
2 Owano Nancy, Phys.org
3 Corning Gorilla Glass Technical Materials

18. CONSUMER BEHAVIOR
• Consumer behavior is the study of how
people buy, what they buy, when they buy and
why they buy.1
• It is an attempt to understand human actions
in the buying role.
Source: 1Kotler, P. and Keller, K. (2011) “Marketing Management”(14th edition),
London: Pearson Education

19. HOWARD-SHETH MODEL
• Howard-Sheth model of buyer behavior, was developed in 1969. It highlights the
importance of inputs to the consumer buying process and suggests ways in which
the consumer orders these inputs before making a final decision.1
• The Howard-Sheth model is not perfect as it does not explain all buyer behavior; it
is however, a comprehensive theory of buyer behavior that has been developed as
a result of empirical research (Horton, 1984).2
Source:1,2 Consumer buying decisions models: A descriptive study International Journal of
Innovation and Applied Studies; ISSN 2028-9324 Vol. 6 No. 3 July 2014, pp. 335-351
© 2014 Innovative Space of Scientific Research Journals

20. HOWARD-SHETH MODEL
Suggests three levels of decision making:
1. Extensive problem solving: At this level the consumer does not have any basic information
or knowledge about the brand and he does not have any preferences for any product. In this
situation, the consumer will seek information about all the different brands in the market
before purchasing.1
2. Limited problem solving: This situation exists for consumers who have little knowledge
about the market, or partial knowledge about what they want to purchase. In order to arrive
at a brand preference some comparative brand information is sought.2
SOURCE: 1,2 Consumer buying decisions models: A descriptive study
International Journal of Innovation and Applied Studies; ISSN 2028-9324 Vol. 6 No. 3 July 2014, pp. 335-351
© 2014 Innovative Space of Scientific Research Journals

21. 3. Habitual response behavior: In this level the consumer knows very well about the
different brands and he can differentiate between the different characteristics of each
product, and he already decides to purchase a particular product.1
According to the Howard-Sheth model there are four major sets of variables; namely:
 Inputs
 Perceptual and Learning Constructs
 Outputs
 Exogenous (External) variables
SOURCE: 1 Consumer buying decisions models: A descriptive study
International Journal of Innovation and Applied Studies; ISSN 2028-9324 Vol. 6 No. 3 July 2014, pp. 335-351
© 2014 Innovative Space of Scientific Research Journals

22. Simplified description of the Theory of buyer behavior

23. Major set of variables in Samsung
 Inputs
Quality: Samsung has led the industry in quality standards for the semiconductor
industry since 1993 when the company first received top-level (ISO9001) certification of
its plants in Korea. Samsung has satisfied consumer requirements through its broad
range of quality management system achievements like the ISO9000, TL9000 and the
QS9000.1
Service: Samsung attentively listens to customers' voice and performs various technical
and quality support like Qualification Support, Quality Improvement, Problem and
Requirement Management.2
Source: 1 http://www.samsung.com/global/business/semiconductor/support/quality-assurance/quality-management/certification
2 http://www.samsung.com/global/business/semiconductor/support/quality-assurance/customer-service

24. Availability: All Samsung products are easily available globally.
Price: Skimming price – Samsung smart phones are one of the best in the market leader in
terms of the features and USP’s that they provide. The Samsung Note 3 + Gear is another
entrant in the market which has grabbed attention of people. Thus Samsung uses Skimming
price for these products wherein it tries to get a high value in the start before competitors
catch up. Once the model is old Samsung immediately drops the price.1
Social contribution activities: The social contribution activity promoted by Samsung
Electronics is divided into 4 types of social welfare, academic/culture, global interchange
and environment preservation based on the classification standard of Samsung social
volunteer organization.2
Source: 1 http://www.marketing91.com/marketing-mix-of-samsung/
2http://www.samsung.com/us/aboutsamsung/corpcitizenship/environmentsocialreport/environmentsocialreport_SocialContributionActivities.html

25. Analyzing the Howard Sheth model keeping Samsung in mind
Brand Image of Samsung
Good brand image strategies can lead to a good brand performance .
Brand image has three components:
 Product Attributes
 Customer’s benefit
 Brand Personality
Samsung Logo:
 The first expansion of brand image of Samsung Electronics Company was started in 1993.
 Samsung Electronics Company has driven into a new corporate identity by changing its logo from the
basic black bold type letters of the word Samsung with red star signs at the side into white Samsung
word on a blue color background .
 The blue background was designed to be an elliptical shape which gives an impression of
modernization and advance. It is determined to agree that Samsung has succeeded in the
development of its brand logo.
 Samsung has clearly proved that it has driven on the right track as the brand is now widely well
known around the world with its reputation of global electronics brand
Source: Rodrigo, Analysis of Samsung’s marketing and brand strategies[ 12 December, 2012]

26. Character:
 Its character obviously describes that it is a strong brand approximately innovation, cutting edge
technology and world class design.
 To clear its brand image, it reinforces Samsung’s strong connection to the brand community to customer;
besides, it reinforces its brand image of always being in leading position of innovation and design.
 Another powerful development of brand image of Samsung was to design an impression of the brand
with global sport events. Samsung became the official sponsor of the wireless technology in the
Olympics when Seoul was hosted in 1998. By representing its brand into sport events, the brand will be
greatly notice by lot of consumers.
 Samsung has decided to become an official sponsor for Chelsea football club since 2005/6 season and it
was the second largest sponsorship signed by Samsung since the Olympics Games (Jones, 2005). By
doing this Samsung logo is now appearing on every shirt of Chelsea players and it can be seen as an
impressive way to maintain image of the brand.
Slogan of Samsung:
From 2012 Samsung started its new slogan “ Turn on tomorrow” which adds a all new taste to new brand
strategy.
Source: Rodrigo, Analysis of Samsung’s marketing and brand strategies[ 12 December, 2012]

27. Customer Satisfaction
For the customer satisfaction, Samsung
attentively listens to customers' voice and
performs various technical and quality
support like Qualification Support, Quality
Improvement, Problem and Requirement
Management.
With the new Quality Concept of Back to
Basic in mind, Samsung would do their best
to provide the Highest Quality of Customer
Service.
Source: http://www.samsung.com/global/business/semiconductor/support/quality-assurance/customer-service

28.  The HOWARD-SHETH MODEL is an integrative model that incorporates many of
the aspects of consumer behavior; it links together the various
constructs/variables which may influence the decision making process and
explains their relationship that leads to a purchase decision.1
 It highlights the importance of inputs to the consumer buying process.2
 It was one of the first models to divulge as to what constitutes loyalty towards a
specific product. It helped gain insights in to the processes as to how consumer
process information.3
Source: 1,2,3 Consumer buying decisions models: A descriptive study
International Journal of Innovation and Applied Studies; ISSN 2028-9324 Vol. 6 No. 3 July 2014, pp. 335-351
© 2014 Innovative Space of Scientific Research Journals

29. Factors affecting consumer behavior
 Price factors
 Social factors
 Durability
 Brand name
 Product features
 After sales
Source: Mediterranean Journal of Social Sciences; MCSER Publishing, Rome-Italy
Volume 4 No 12, October 2013

30. Distribution network of Samsung in India
• The national distributor of Samsung in India is Savex Computers
Limited.1
• Savex has been distributing IT and Telecom products for Samsung since
1996.2
• It has got 41 branches across the country with its headquarter in
Mumbai.3
• The distribution structure in Samsung is decentralized.4
• They have zonal distributor in each zone of the country and the
dedicated national distributor to organize retail business to drive
efficiently.5
SOURCE: 1,2,3 http://www.savex.org/
4,5 ET Samsung Mobile revamps sales and distribution in India

31. • Samsung now has two sales verticals-one selling products to distributors,
stand-alone multi-brand outlets and Samsung brand stores, and other
focusing only on national and regional retail chains.6
• They have re-organized their business around the sales channel with
dedicated team for channel management and products.7
• At the regional level, there are be two branch heads for the products to grow
the business in multi-brand outlets under the regional manager who reports
to the head of the distributor head.8
• There will also be key account managers at the region and branch level who
will push sales to the national and regional retail chains under the head of the
retail chain management.9
Source: ET Samsung adopts mobile phone business strategy for consumer durables

32. Source: Samsung.com
Samsung’s Distribution Network diagram

33. APPLE
Strengths Weaknesses
Marketing and
Advertising
capabilities1
Dependence on
iPhone and iPad
sales2
Strong distribution
channels in US3
Weak distribution
channels in India and
China4
Brand awareness and
reputation5
Incompatibility with
other OS6
Source: Counterpoint Technology Market Research
SOURCE: 1,2,3,4,5,6 Apple SWOT Analysis 2014
COMPETITOR ANALYSIS

34. Samsung vs Apple Advertisement
• Samsung released many ads to mock Apple iPhone 6 Plus during Note
IV release.1
• Samsung also attacked iPhone 5 due to its lack of features as
compared to Galaxy Note III.2
• Apple iPhone 4 was also criticized because of its antenna issues during
Galaxy S release.3
SOURCE: 1,2,3 Kastrenakes, Jacob., A brief history of Samsung mocking Apple announcements

36. SONY
Strengths Weaknesses
Creation and
Innovation1
Less effective
Distribution Channels2
Attractive and
Innovative Global Brand3
Less importance for
Promotional activities4
Diversity among
products5
Lack of user centred
designs6
Source: 1,2,3,4,5,6, SWOT Analysis of SONY Source: IDC, The Wall Street Journal
COMPETITOR ANALYSIS

37. Samsung vs Sony
• Sony is behind Samsung in terms of both launching phones with
the latest version of Android, and updating them to the next
version as and when it’s launched.1
• Sony’s software has its own upside when compared to the often
criticised, overwhelming Touchwiz deployed by Samsung.2
• If Sony can address the complaints on software updates and
increase the life span of its products, then Sony smartphones can
better compete with Samsung’s army of Galaxies.3
Source: 1,2,3 D, Danny., Round 2014 – Samsung vs. Sony

38. Unit Shipments

39. HTC
Strengths
1.Known for best overlay of Android
OS with HTC interface
2.High product quality
3.Highly popular in the urban market
Weakness
1.Mostly Touch phones
2.Limited of advertising and
marketing
3.High price
•HTC, tweeted : "Buyer's
remorse: Coming soon to S5
owners. March 25.“
•Competitors of Samsung: Nokia
and HTC mocks Samsung Galaxy
S-5 for it’s resemblance to
previous model S-4.1
SOURCE: 1 NDTV correspondent, Nokia, HTC mock Samsung Galaxy S5
COMPETITOR ANALYSIS

40. Mobile industry scenario during the launch of Samsung Galaxy S1
1. S1 was launched in June 2010. It was the first Android phone of the S family.1
2. At that time Nokia was the market leader with market share of 34%.2
3. However, the market share reduced from 40% in 2009 to 34% in the next year.3
SOURCE: 1,2,5 ABI research
3,4 Nokiausers.net
5
4 Nokia in 2009

41. Launch of N95 in 2007, the flagship of Nokia
1. Nokia launched N95 in 2007 which was a major revolution in the mobile industry.1
2. It had various features which were mostly absent in other phones at that time.2
3 4
SOURCE: 1,2,3,4 Nokia’s decline in figures –
Disruptiveinnovation.com

42. Symbian OS: One of the most successful failures in Tech history
• It is the oldest smartphone software platform.1
• The topmost operating system till the first quarter of 2010.2
• It is not an OS for internet phones.3
• The browser was a second class citizen. It was from a third party owner
called Opera.4
SOURCE: 1,2,3,4 Techcrunch.com

43. Market shares: Nokia slips, Samsung fast catches up
Source: Marketsandmarkets.com

44. The Critical success factors of S series
Success factors for Galaxy S in 2010: 1 million galaxy smartphone sold in 45 days in US
• In US AT&T and T- mobiles advertise their Galaxy S smartphones for $200
with plan.1
• Galaxy S devices were also available with Sprint, Verizon wireless and US
cellular and cellular South.2
• Samsung Galaxy S was also a sponsor of X Games 16, which was held in
downtown Los Angeles from July 29 to August 1 2010.3
• Samsung adopted Social media campaign including Facebook promotion
and sharing content in Samsung mobile’s social media channels.4
• Samsung in 19 days sold a million of the Android powered galaxy devices
before it came to US market.5
SOURCE: 1,2,3,4,5 Jhonston, Casey; The rise of Samsung’s Galactic Empire.
The Way Forward for Samsung, and Innovation, Harvard Business Review.

45. • The Galaxy S2 had been the best smartphone in the range of top
smartphones. It had generated 20 million sales in the first 12 months.6
• Another major success factor of Galaxy S series smartphone is its unique
blending of hardware and software features. Whether its an app like S
Health, or a feature like AirView; the features of Galaxy S smartphones are
awesome and easy to use.7
• According to earlier reports in IBTimes UK, Samsung Electronics had
received nine million pre-orders for the Galaxy S3 worldwide.8
SOURCE: 6 Thenewstribe.com
7 Gigaom.com
8 Ibtimes.com
The Globe: The Paradox of Samsung’s Rise, Harvard Business Review.

46. Growth rate of Samsung
Source: Marketsandmarkets.com

47. SWOT ANALYSIS - SAMSUNG
Strengths
-Strong Brand Value
-Innovation & Design
-High Market Share
-Diversified Product Line
-Financial Stability
Weaknesses
-Patent Infringement
-Less Profit Margin
-Product cannibalization
-Own OS is unpopular
Opportunities
-Growing Smartphone
Market
-Mobile Industry
Advertising
-Obtaining Patents through
Acquisitions
Threats
-Low cost Chinese products
-Rapid Technological
change
-Price wars
Source: DATAMONITOR Ref code: 1453

48. PEST ANALYSIS - SAMSUNG
Political
-Samsung has been
subjected to copyright law
suit.
Economical
-Recession in America in
2007
-Fluctuating dollar rates
-Market Changes1
Social
-Trend that Samsung
produces best smart
phones
-Consumers influenced
Technological
-One of the most
innovative company
Source: Team FME Pestle Analysis ISBN 978-1-62620-998-5
1Optimal Marketing, Harvard Business Review.

49. MICHAEL PORTER’S FIVE FORCES MODEL

50. Threat of New Entrants – LOW
-Technology investments needed – Large Capital
-New entrants could find difficult to compete
and gain economies in market share against
major brand players
Threat of Substitute Products – LOW
-Multiple features in Smartphone – Camera,
Document editors
-Chinese Products
-Tablets
Bargaining Power of Buyers – Medium
-Wide variety of choices
-Pricing – Consumer based
Bargaining Power of Suppliers – Medium
-Manufacturers rely on Suppliers for quality
components/ parts at competitive prices
-OS:Android is open source
-Difficult to switch in B2B market
Rivalry Among Existing Firms – HIGH
Many players in Market – Apple, Sony
Competition among players is high – Pricing, Advertising
Firms coming with new technologies, innovations – attracting
consumers
Source: Team FME Porter’s Five Forces ISBN 978-1-62620-999-2,
How Samsung Gets Innovations to Market, Harvard Business Review

51. VALUE CHAIN
Porter, Michael E., "Competitive Advantage". 1985, Ch. 1, pp 11-15. The Free Press. New York.

52. Products
Markets
Existing
Existing New
New
Market
Penetration
Market
Development
Product
Development
Diversification
ANSOFF’S MATRIX
Souce: Team FME Ansoff Matrix ISBN 978-1-62620-950-3

53. PRODUCT LIFE CYCLE
Source: Productlifecyclestages.com

54. BCG MATRIX
Source: Henderson, Bruce., The Boston Consultancy Group

55. BIBLIOGRAPHY
1. Silva, M. (2013), How Advertisers Can Maximize Mobile Conversions, Harvard Business Review.
2. Thomas, W. & Miller, P. (2014), How Samsung Gets Innovations to Market, Harvard Business
Review.
3. Corstjens, M. & Merrihue, J. (2003), Optimal Marketing, Harvard Business Review.
4. Khanna, T. & Song, J. (2011), The Globe: The Paradox of Samsung’s Rise, Harvard Business
Review.
5. Vossoughi, S. (2012), The Way Forward for Samsung, and Innovation, Harvard Business Review.
6. HIS Whitepaper (2013), Wearable Technology, IHS Electronics & Media.
7. Meeker, Jacob. (2014), INTERNET TRENDS 2014, CODE CONFERENCE.
8. Ericsson, 10 Hot Consumer Trends, Consumer Labs.
9. Global Smartphone Market analysis (2014), CCS Insight Report.
10. Samsung Electronics Annual Report (2013), Samsung.

56. 11. Technical Materials (2008), Corning Gorilla Glass.
12. Consumer buying decisions models: A descriptive study International Journal of
Innovation and Applied Studies, ISSN 2028-9324, Vol. 6 No. 3 July 2014.
13. Mediterranean Journal of Social Sciences, MCSER Publishing, Italy, Vol. 4 No 12,
October 2013 .
14. Data Monitor(2005), Samsung Electronics Co. Ltd., Ref Code: 1453.
Books
1. Kotler, P. and Keller, K. (2011) “Marketing Management”(14th edition),
London: Pearson Education.
2. Porter, Michael E.(1985), "Competitive Advantage", pp 11-15, New York: The
Free Press.

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