SMARTPHONE INDUSTRY Halil Yildirim

TABLE OF CONTENT IntroductionMarket developmentFinancial positionsCompetitive advantageChanges and future of the industry

S-T-P strategies Porters’ 4P’s Recommendation Sources

INTRODUCTION South Korean, founded in 1938 Wide range of product categories:Smartphones, Tablets, Laptops, TV’s, Cameras, Office electronics (Printers, Hard Disks etc.), Home electronics (Refrigerators, microwaves etc.)

#1 in the smartphone market since 2012

American, founded in 1976 More narrow range of product categories:Smartphones, Tablets, Laptops, Computer, MP3 player, digital media player, OS,

#2 in the smartphone market Several lawsuits

MARKET SHARES Development in market sharesApple 18.8% (2011) to 11.7% (2014)Samsung 17% (2011) to 24.9% (2014)

Product launch parallels (top models):

* 2 in Q3 2014

Vendor 2011

2012

2013

2014

Apple 1 1 1 0*Samsung

2 3 4 4

FINANCIAL POSITION Share price: $118.93   0.07(0.06%) Volume: 24,814,402 52wk Range:70.51 - 119.75 Market Cap: 697.51B P/E ratio: 18.44 Revenue Growth: 21.80%

FINANCIAL POSITION Share price: $1155.38 Volume: 196,891 52wk range: $968 - $1349.160 Market capacity: 151.17 B P/E Ratio: 7.50 Revenue Growth: 13.60 %

COMPETITIVE ADVANTAGE Own chip manufacturer Control on manufacturing process Vertical integration Strict Software standards Closed eco system Easy sync Many suppliers (Hon Hai Precision, Pegatron Corp.)

COMPETITIVE ADVANTAGE Manufactures everything Bring products to the market faster Able to rapid change Pricing strategy Largest tech. Company because of the revenue No Suppliers

CHANGES AND FUTURE OF THE INDUSTRY

CHANGES AND FUTURE Disruptive innovation & Incremental innovation Updated software Mobile payment

SEGMENTATION Geographical: Global presence own retail stores, electronics stores

61 countries Demographical: Age: 16-29 students, young adults, business professionals

Income: Middle/high Psychographic: Technology enthusiasts Customization

Geographical: Global presence own retail stores, electronics stores

62 countries Demographical: Age: 14-55 students, young adults, business professionals

Income: High (/middle) Psychographic: Music/gamer, media/design enthusiasts Simplicity

TARGETING

Primary target groupUpper middle class professionals

Secondary target groupHigh school/college students

POSITIONING High quality Mass consumers Wide price range Feature oriented

Premium brand High quality High price Design and trend oriented

PRODUCT (4P’S) High-end: Galaxy S5, Galaxy Note 4 Mid-range: Galaxy S5 Mini Low/mid-range: Galaxy Ace 4

Premium: 6, 6 Plus, 5s Mid-range: 5C

PRICE (4P’S) Cost (Hungary): Galaxy Note 4 ~ $ 975 Galaxy S5 ~ $ 735 Galaxy S5 Mini ~ $ 490 Galaxy Ace 4 ~ $ 205

Strategy: Price skimmingCompetition pricing

Cost (Hungary): 6 Plus ~ $ 1 035 6 ~ $ 900 5S ~ $ 650 5C ~ $ 550

Strategy: Price skimming

PLACE (4P’S) Electronic retailers

PROMOTION (4P’S) Tradeshows, Flyers and Postcards Videos Workshops & Events Spent $ 14 billion on advertising in 2013

Cultivate an air of secrecy and intrigue to fuel speculation and buzz Create the illusion of scarcity to increase demand Focus on a "friendly" customer experience Wow customers through design and packaging Create a passionate brand community of fans who identity with Apple's brand values Spent $ 933 million on advertising in 2013

RECOMMENDATION & STRATEGİESMARKETING SPENDING OF APPLE AND

SAMSUNG

Below 42% of iPhone owners had owned an iPhone previously While 43% of Samsung owners had previously owned an Android phone. Apple does a better job of getting Android users to convert to iOS with about 20% of its customers coming from Android vs. only 7% of Samsung customers coming from iOS.

Apple has a bit higher retention rate at 42% vs. 38% for Samsung. Apple does a better job of switching Samsung customers at 19% vs. Samsung only converting 7% of its users from Apple.

RECOMMENDATION FOR SAMSUNG (MARKETING )

-Increasing Brand Loyalty. Not too focused on the features. -Creating own Ecosystem in order to differentiate itself from other Android Phones. It will increase its brand loyalty as well

-Marketing Activities of Samsung is quite promising both in digital and conventional media. (Buzz Marketing, Media Marketing, Sponsortships)

--Increasing the Loyalty! (Low compared to Apple) It’s more about positioning and bonding activities than simply adverising via Celebrities or Media. The Message , Contend is more important than the popularity itself.

-Ie: ‘Celebrity Packed Selfie’ on Oscar Show with Galaxy SIII--Company should more rely on TV Shows, appearence on the movies etc..-- Instead of following position , company should lead both in communication and production* (“The Next Big Thing is here”, ‘The Next Big Thing’

RECOMMENDATIONS FOR APPLE

-Apple’s main marketing strategies- create brand loyalty and excitement-“Apple lifestyle”. Their commercials are simple, yet elegant, and displays this “Apple lifestyle” to the consumer.

-product placement in movies- 30% of films from 2001 to 2011. From 2008 to 2011 Apple has reportedly spent $647 million on iPhone placement in movies

--Need to change its marketing strategy from overlaying on emotional evocative ads.

--Using of Buzz Marketin, using of Celebrities

SOURCES http://www.idc.com/prodserv/smartphone-market-share.jsp https://prezi.com/635kt-vpajlq/segmentation-strategies-used-by-apple-and-samsung/

http://stpsamsungmobiles.blogspot.hu/ https://prezi.com/9varrsfnvjfd/strategy-analysis-formulation-of-apple-inc/ http://www.slideshare.net/mandarghanekar/group-assignment-22 http://matiesmarketing244.com/2013/09/18/samsung-vs-apple-the-marketing-war/http://www.forbes.com/sites/chuckjones/2013/08/20/apple-and-samsung-who-could-win-the-smartphone-war/