Samsung Marketing Report

Executive Summary

Samsung is a business conglomerate, comprised of more than 78 different companies in a wide range of businesses . Samsung started as a small export business in Taegu, Korea and has grown to become one of the world’s leading electronic companies, specializing in media and digital appliances, as well as semiconductors and system integration. With the composition of several electronics focused divisions, Samsung entered the electronics industry in the 1960’s . The initial electronic divisions included Samsung Electronic Devices, Samsung Electro- Mechanics, Samsung Corning, and Samsung Semiconductor & Telecommunications. Samsung is one of the largest businesses in Korea and accounts for nearly one fifth of the country’s total exports. Today, Samsung’s innovative and high-quality products and processes are recognized worldwide. With the release of every new smartphone, the competition rises steadily. Apple and Samsung, two of the smartphone leading enterprises, are losing shares to manufacturers in China and elsewhere. Samsung’s market share decreased by 7% from 2013 to 2014, while shares of other smartphone brands increase (Huawei, Xiaomi, etc.) .

For this project, we will focus primarily on Samsung’s smartphone division to identify consumers’ perceptions towards the brands smartphones, and on which areas they can improve, to stay competitive on the smartphone industry. Furthermore, our recommendations will also be given at the end of this report as well as the survey’s limitations we had to deal with.

1. Data Analysis

1.1 Qualitative Analysis

This Marketing Research project, conducted by our team, targets Samsung’s smartphone division compared to its main competitors in the smartphone industry. Our research objective is to try to identify the main customer-base, and to research which aspects of Samsung smartphones could be altered to increase overall sales in regards to the smartphone’s features, design, price, etc. In order to do so, we conducted a survey, targeting consumers with the age of 15 years and above. The survey was divided into three main sections asking about relevant aspects, in order to follow the research objectives. First, customer segmentation, which focuses on the characteristics of each segment, then product development, which identifies important attributes and features for the customer, and lastly the evaluation of the brand and product as well as the demographics. After conducting the survey, we have collected exactly 90 responses. Of the responses, 88 own a smartphone, which ensures the validity of the data. We excluded the two who do not own one, since we deemed them invalid.

First, a word association analysis was conducted to ascertain which words were associated with Samsung from our respondents’ point of view. The most popular word was thereby ‘Galaxy’, followed by ‘big’, ‘fast’ and ‘expensive’. Words like ‘cheap’, ‘popular’ or ‘reliable’ received a little less attention. Please see Appendix 1 for more details. We also asked the respondents to answer yes or no to whether they associated the following words with Samsung smartphones. The proportions of our findings and our results can be seen in Appendix 3. Especially the words ‘Powerful’ (79%) and ‘Young’ (75%) were associated with Samsung smartphones.

Secondly, a laddering analysis was conducted, where participants were questioned until their answers led to a value. The laddering analysis includes three major components, which are attributes, consequences and values. Our team asked about the importance of different attributes about Samsung. Out of the frequency of a given attribute could one conclude consequences, which are for example ‘respond to messages rapidly’, ‘I want to fit in’ or ‘all my friends have one’. These consequences led to the derivation of the following values; self esteem, impress others, better life and quality. Please find the detailed analysis in Appendix 2.

To sum up, the qualitative analysis revealed us many interesting insights about the perception some people have of Samsung smartphones.

1.2 Quantitative Analysis

In this next step, the research aimed to get insights into different user segments according to gender. The intention is to answer the question if different segments need different marketing strategies and therefore, the need for Samsung to revise its existing strategy.

An Independent Sample T-test was conducted in order to find out if men and women find the factor ‘quality’ equally important when choosing a smartphone. A null hypotheses and an alternative hypothesis were developed. Ho: Male = Female vs. H1: Male ≠ Female. The Independent Samples T-test revealed a p-value of 0.03, which leads to the conclusion that there is sufficient evidence to reject Ho and support H1, since the p-value is smaller than our significance level of α = 0.05. Thus, we can conclude that females weigh the importance of quality significantly more than males when buying a smartphone.

Furthermore, we conducted the same analysis on the attribute ‘price’. The question here is, whether males and females find the factor of price equally important when choosing a smartphone. Our developed hypotheses are as follows:

Ho: Male = Female vs. H1: Male ≠ Female

The p-value accounts to 0.160, which is larger than our significance level of α = 0.05. This leads to the conclusion that we cannot reject Ho and we cannot support H1. Subsequently, we can conclude that females and males do not significantly differ according to the importance of Price when buying a smartphone.

The same analysis goes for the third attribute, which is ‘popularity’. We try to find out if males and females find the factor popularity equally important when choosing a smartphone. Ho: Male = Female vs. H1: Male ≠ Female. The Independent Samples T-Test revealed a p-value of 0.896, which leads to the conclusion that one cannot reject Ho, since the p-value is larger than our significance level of α = 0.05. Thus, we can conclude that females and males do not significantly differ according to the importance of Popularity when buying a smartphone.

Another test was conducted to compare to independent means, in order to evaluate if the importance of variables differ by gender. The aim was to identify if males and females find the factor of ‘functions’ equally important when choosing a smartphone. Ho: Men = Women and H1: Men ≠ Women was stated. The test statistics revealed a result of t(86)= -0.330 and a p-value of 0.742. Since the p-value is larger than our significance level of α = 0.05, we cannot reject Ho and we cannot support H1. Hence, we can conclude that females and males do not significantly differ according to the importance of Functions when buying a smartphone.

Lastly, we did another Independent Samples T-test for the same reason. Our variable, which we were testing, was the design of a smartphone. Once again, H0: Male = Female vs. H1: Male ≠ Female were developed. The test statistic revealed a result of t(86)= 1.675 and a p-value of 0.098. Since the p-value is larger than the significance level of α = 0.05, it is not significant enough to reject Ho and we cannot support H1. Thus, we can conclude that there is no significant difference between males and females when it comes to the importance of the factor ‘design’.

Hereafter, a multiple regression analysis was conducted to analyze, whether self-esteem and disappointment affect price. We found it to be interesting to understand whether personality traits may be correlated to the price smartphone buyers are willing to pay.

A multiple regression analysis resulted in an R2 of 0.038, which indicates that only 3.8% variance of price can be explained by the relationship to the self-esteem and disappointment of the customer.

Furthermore, the ANOVA test statistic revealed a value of F(1.671) = 4.436 and a p-value of 0.194, which is larger than our significance level of α = 0.05. One can conclude that the model is not significant enough.

Moreover, the coefficient analysis disclosed that none of the coefficients is significant, since all p-values are larger than the significance level of α = 0.05. Thus, we cannot conclude that ‘High Self Esteem’ and ‘Easily Disappointed’ have a significant impact on the importance of price in regards to Samsung Smartphones. Thus, we cannot use the model Y=4.714-0.237X1-0085X2 to explain an exciting correlation between our two variables and the important of price.

We have also conducted a factor analysis in order to reduce the number of variables and explain whether the different personality traits within the respondents were related. We also wanted to detect whether there was a relationship between the personality traits and classify them accordingly. The six personality traits that we conducted the factor analysis on were: ‘Helping People’, ‘Meeting New People’, ‘High Self-Esteem’, ‘Easily Disappointed’, ‘Make Mistakes’ and ‘Repairing Things’.

We conducted a significance test shown below to find out whether a factor analysis was required. Our null and alternative hypotheses were as follows:

H0: No relationship