The words ‘middle class’ have become synonymous with another two words, ‘emerging markets’. According to industry experts, in the next 10-20 years, this group will probably take from where India is today to becoming the largest consumer markets.
The Challenge
The challenge for Samsung was to tap into this lucrative section of society with premium imagery and optimise its market share in the electronics market in India.
The Strategy
With the launch of Galaxy Tab, Samsung introduced the Indian market to the new category of tablets while still expanding its share in the category of smart phones and flat screen televisions. Product innovation has been one of the key strategies for Samsung. The demand for better lifestyle alternatives by the middle class is being answered by products which have changed the grammar and design quotient of the category. Pricing is another significant factor that Samsung is playing with. The philosophy of Samsung has been to offer a smart phone for everyone. By offering products at a range of prices, Samsung is simultaneously targeting the masses as well as the top end.
Being innovative at the advertising and retail front is further helping Samsung connect with consumers. Also, Samsung has positioned itself as a brand that offers the consumers a range of choices, in terms of price, product design and available user interfaces. For the flat panel business, distribution, expansion and access have been an important part of the strategy as well. Apart from this, customising to the needs of the local consumer has also been of key importance to Samsung.
Elkana Ezekiel, CMO, Samsung India
The Implementation
In an attempt to change the definition of white goods as goods that are white in colour, Samsung aims to innovate with products and product design as well. It recently came up with a light laptop which was made with Duralumin which has also been pioneered by Samsung. The brand also collaborated with an Italian designer to come up with a range of designer refrigerators which could become a part of the consumer’s home décor. Same was the case with air-conditioners and flat televisions. Through these attempts, Samsung aims to differentiate its products from other players.
Samsung made a foray into the Smartphone market in June 2010 when it launched Galaxy S (Android platform) and Wave (Samsung’s proprietary Bada platform). These two products fuelled the Smartphone revolution in the country and expanded the category. Samsung stuck to its Smartphone Philosophy, ‘Smartphone for Everyone’. One and a half years after the launch of Samsung smart phones in India, there is a portfolio of 13-14 Smart phones in the Indian market across three user interfaces- Android, Bada and Windows 7.5. On offering all the three platforms, Elkana Ezekiel, CMO, Samsung India says, “Consumers don’t always know what platform they want.
Different people have a different perspective while buying a phone, so we want to provide them the choice.” The Smartphone portfolio covers price points between Rs 6,600 and Rs 32,890.
In terms of advertising, Samsung believes in bringing experience to life. This can be seen in various campaigns that Samsung has initiated. However, while advertising makes people inquisitive about the product, the real test is the touch-point, when consumers actually go to buy a phone. Thus, Samsung has initiated the concept of Samsung Smartphone Cafes in mobile handset retailing to give emphasis to user experience at the retail level. The Smartphone Cafes exclusively retail tablets, smart phones and laptops. The advertising strategy helps the brand create awareness about itself. Creation of a physical space like a Smartphone Café also offers further credibility to the brand. Samsung has also come up with applications which appeal to the local tastes of consumers, thus customising the product.
To establish leadership in the flat panel business, Samsung launched Smart TV in the top eight cities of the country. The objective was to establish Samsung technology leadership by owning “Smart TV” territory in consumer’s mind. The ATL Strategy involved announcement of Smart TV at various platforms while BTL Strategy aimed at reinforcing the image by creating premium Smart TV touch and feel experience. The online strategy was focused on creating interactive virtual Smart TV experience thus taking brand leadership forward. For rest of India, distribution, expansion and access were the major highlights of the strategy. The aim was to create a strong premium product image with local communication appeal.
To customise to local tastes, Samsung has also focused on working on developing India relevant applications for Smart TV. The major focus for these applications has been on five genres – games, lifestyle, information, video and music.
What Samsung is doing in terms of the top end, is tapping into the aspirational value. Over a period of time, this aspirational value gets converted into purchasing of more affordable products which are driven through accessible price points and wider distribution.
Results
Courtesy the marketing initiatives, Samsung has managed to double its market-share from 12.3 per cent in December 2010 to 27.3 per cent in September 2011 in the smart phone category.
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