PROJECT ON “COMPARATIVE MARKETING STRATEGIES OF APPLE AND SAMSUNG”
SUBMITTED BY: LEENA SACHDEVA ADARSH RAJ NITESH MANN
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ACKNOWLEDGEMENT
Though every day of life teaches something or the other, but the knowledge and experience gained while working in “APPLE AND SAMSUNG” on “COMPETITIVE MARKETING STRATEGIES” project is something which I would always remember.
This project was like a challenge, which took thirty days for completion regardless of our immense labour. This project helped me to understand the way market works. How to study and analyze the market properly?
I would like to thank Ms. Priyanka Garg my research report guide a lot because he was always there to help me regardless of his hectic schedule and who always gave me the support and guidance for the completion of this project.
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INTRODUCTION
Samsung and Apple are part of the biggest tech trials in the US history. They have been presenting their final arguments in this trial. As this case slowly comes to an end, people realize that it was extremely complex. Basically, this case entails claims of all sizes and shapes (standards essentials, trade dress, design and utility), over 30 infringing devices, more than 12 different patents and this is not all. The cases are argued by both sides and each of the sides defends itself. At the same time, both Apple and Samsung have slipped and submerged evidence to press, infuriating Lucy Koh, the federal judge. However, the fate of these major electronics makers will be decided by the 9 jurors who have nothing to do with technology. The jury comprises an electrical engineer, a video – game enthusiast who’s unemployed and a social worker, just to name a few. The 9 jurors will have to understand and take in plenty of information. In fact, some of the details might be confusing even for a technical specialist. The facts and the law are equally important in this case. Apple and Samsung are aware of this fact and they also know that the facts, as well as their stories, are crucial. Eventually, people could say that these organizations have taken their marketing strategies and brand identities right into the court room. Apple products are advertised by telling the simplicity story. Conversely, Samsung products are marketed by insisting on the high – end technology factor. These 2 factors alone are extremely complicated. Nobody thinks about iPad or iPhone when thinking about Apple. Individuals recall the image of Steve Jobs as a hero and CEO of Apple. They also think of commercials such as “Think different” and “1984” and they instantly feel more special. Additionally, people think of high – quality design and attractive retail 3
stores and innovative headquarters. Thus, the Apple brand can be characterized through a story of simplicity and individual entities. On the other hand, Samsung is based on technology and even though it’s quite successful, it keeps attacking and stealing Apple’s market. Most of their ads and commercials present the benefits of Samsung products to the detriment of Apple products. Still, the latest ads have been more emotional and moved away from Apple. Despite all these factors, Samsung is on the top of the mobile market, holding more than 50% of the market share internationally and in the United States. Samsung builds technology cheaply and quickly, and if the product looks like one of the competitor’s gadget, it’s just a coincidence. Well, it seems that the electronics giant had the same strategy during the trial, while Apple kept it simple. Apple brought high – level executives and famous names that were able to tell the iPhone story. Moreover, they got possession of internal Samsung documents and managed to play the victim in this trial. Alternatively, Samsung took advantage of Apple’s mistakes and tried to prove that the companies’ patents are not valid. Overall, it has been a long trial and everybody is looking forward to see who will win.
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HISTORICAL BACKGROUND APPLE’S HISTORY Established in Cupertino, California on April 1, 1976 and incorporated January 3, 1977, the company was called Apple Computer, Inc. for its first 30 years, but dropped the word “Computer” on January 9, 2007, to reflect the company’s ongoing expansion into the consumer electronics market in addition to its traditional focus on personal computers. SAMSUNG’S HISTORY From its inception as a small export business in Taegu, Korea, Samsung has grown to become one of the world’s leading electronics companies, specializing in digital appliances and media, semiconductors, memory, and system integration. Today Samsung’s innovative and top quality products and processes are world recognized. This timeline captures the major milestones in Samsung’s history, showing how the company expanded its product lines and reach, grew its revenue and market share, and has followed its mission of making life better for consumers around the world.
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COMPANY PROFILE Apple Apple Inc. is an American multinational corporation that designs and manufactures consumer electronics, computer software, and personal computers. The company’s bestknown hardware products include Macintosh computers, the iPod, the iPhone and the iPad. Apple software includes the Mac OS X operating system; the iTunes media browser; the iLife suite of multimedia and creativity software; the iWork suite of productivity software; Aperture, a professional photography package; Final Cut Studio, a suite of professional audio and film-industry software products; and Logic Studio, a suite of audio tools. As of January 2010 the company operates 284 retail stores in ten countries, and an online store where hardware and software products are sold. As of the third quarter of 2009, it is the tenth largest company in the world Samsung For over 70 years, Samsung has been dedicated to making a better world through diverse businesses that today span advanced technology, semiconductors, skyscraper and plant construction, petrochemicals, fashion, medicine, finance, hotels, and more. Our flagship company, Samsung Electronics, leads the global market in high-tech electronics manufacturing and digital media. Through innovative, reliable products and services; talented people; a responsible approach to business and global citizenship; and collaboration with our partners and customers, Samsung is taking the world in imaginative new directions.
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MARKETING MIX Marketing Mix of apple Product Portable Computers – including Mac products such as Mac Book Pro, iMac, MacBook Air, Mac Mini, XserveServers – including Xserve, Xsan, MacOS X Ser, MobleMe.Accessories – including MagicMouse, Keyboard, Led Cinema Display.Wi-fi Based Stations - including Airport Express, Airport Extreme, Time Capsule.Developer – including Developer Connection, Mac Program, iPhone Program.iPod – including iPod Shuffle, iPod Nano, ipod Classic.iPhone– including iPhone3GS, iPhone3G, iPad.iTunes – including movies, TV shows, audio books, games.Periphal products – including Printers, Storage devices, digital videos and cameras. Price Apple is a premium brand computer that does not attempt to compete on price. The company has reduced prices after some initial product launches. It uses skimming and premium pricing strategies. The Apple iPad is priced at a minimum of $499.The Apple iPhone costs begin at $99.The Apple iPod Classic is priced starting at $249.The Apple iPod Nano costs $149.The Apple Mac Book costs $999.The Apple MacBook Pro is priced at $1199. The Apple Quicktime Pro for Windows costs $29.99Apples iPad pricing strategy includes the flexibility to lower the prices if consumer response dictates such action. This would be consistent with a similar $200 price cut on the iPhone in 2007.In 2009 Apple announced a reduced cost pricing structure for iTunes - songs will cost 69 cents, 99 cents or $1.29. He said the “vast majority” of the songs will cost 69 cents. Changes are said to be a response to a slower pace of music downloads. Place Apple, Inc Headquarters are located at is located at 1 Infinite Loop, Cupertino, California. The Apple Consultants Network includes independent professional service providers and technology consulting firms that specialize in Apple and third-party 7
solutions. Certified on Apple technologies, these providers deliver on-site technology services and support to home users and businesses of all sizes. Apple service providers are certified technicians, who complete regular Apple training and assessments, and offer repair services, and exclusive access to genuine Apple parts. They are located in Asia/Pacific, Africa, the Middle East Europe and Latin America. Apple has over 200 retail stores worldwide including the US, UK and Canada. Apple recently opened a new retail store in Shanghai China. Promotion Apple, Inc offers special discounts on refurbished MacIntosh computers, iPod Nanos, and the 8GB iPod Touch. In each case a 1 year warranty is included on the all products. Apple, Inc authorized Training Centers are located throughout the U.S. each provides instruction in Mac systems, Mac OS X, and Apple’s professional applications. A wide range of certification exams and courses offer innovative learning opportunities for IT and creative professionals, educators, and service technicians—delivered exclusively by Apple Certified Trainers. The Apple Consultants Network website provides a search tool allowing visitors to locate nearby certified Mac product consultants in the U.S, Canada, and a number of international locations. The online Apple Store offers free shipping for orders over $50.The online Apple store offers iTunes gift cards. Apple provides a $100 rebate when you purchase a Mac or specific printers from the online store. Apple has packaged back-to-school offers, including some aimed at college students.
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Marketing Mix Of Samsung Product Samsung’s product range in India included CTVs, audio and video products, information technology products, mobile phones and home appliances. Its product range covered all the categories in the consumer electronics and home appliances. Analysts felt that the wide product range of Samsung was one of main reasons for its success in the Indian market. Samsung positioned itself on the technology platform. Price Pricing also seemed to have played a significant role in Samsung’s success. Place Along with the launch of new products, Samsung also consolidated its distribution system. Samsung had 18 state-level distribution offices and a direct dealer interface. The direct dealer interface helped the company get quick feedback from dealers, and enabled it to launch products according to consumer needs. Promotion In 1995, when Samsung entered India, it realized that Indian consumers were not familiar with the company. So, in order to establish itself in the Indian consumers’ mind, Samsung launched corporate advertisements highlighting its technologically superior goods.
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Comparative Analysis between Apple iPhone 5, Samsung Galaxy S3 and LG Optimus G Since iPhone 5 has not been able to cater into the market, as the experts had earlier believed, other smart phones are having their dream journey. Several features and lacking of vision on part of Apple can be attributed for such a disaster. Introduction of advanced gadgets with innumerable features from Samsung and LG on the other hand, has provided consumers throughout the world to access comparatively lower cost and technically upgraded wonder products. Moreover, experts are of the opinion that with lot more coming its way, Apple is surely to face its worst time in the coming period, especially in 2013. A comparative analysis between the gadgets of Apple’s iPhone 5, Samsung Galaxy S3 and LG Optimus G will help in studying the differences and advantages of the gadgets. This will even provide a fair idea about the trend that the market might be showing in the coming days. The study will even help in throwing light to the fact whether there is any chance of iPhone 5 to resurrect into the market.
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Comparison between the gadgets •
Operating System – Although there is no option to finger point towards the operating system of iOS6 that comes with iPhone 5, massive up gradation on the sphere of Galaxy S3 is noticed. Introduction of much advanced version of Jelly Bean, Android 4.1, overtook that of the earlier series of ICS version from the products of Samsung. iOS 6, on the other hand, has opened up a vast ratio of applications for the users. At this juncture, LG Optimus G has been a rather disappointment, offering an earlier version of Android 4.0 as its operating system.
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Inside the gadgets – Powered by dual-core Apple A6 processor of 1.3 GHz, iPhone 5 has 1GB of RAM. On the other hand, this seems to be better than Galaxy S3 of Samsung that features a processor of 1.4 GHz, but a Ram of 1 GB. Optimus G from LG shows a better side by providing 2 GB of RAM and a S4 processor of 1.5 GHz from Snapdragon. iPhone 5 gets a massive setback in the genre of storage capabilities from the products of Samsung and LG, who have 32 GB of internal storage capacity including slots for micro SD cards.
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Overall specifications of the gadgets – iPhone 5 might look similar to its earlier version of iPhone 4. However, a close look will actually show the minute differences that makes it even more attractive. A classy appearance has been provided to the gadget that even provides a glance of expensive nature of the device. On the other hand, Galaxy S3 has an exterior of slightly rounded in nature, which helps in giving it a distinctive nature from any other smartphone. LG’s Optimus G is able to leave a mark on the consumers, even if it does not feature a classy appearance. However, the rear panel with Crystal Reflection certainly attracts attention.
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Function and properties of camera – In terms of the nature of cameras featured in the devices, iPhone 5 fails to stand up to the expectations. The front facing cameras of all the three devices are mostly within the same range. iPhone 5 with 1.2 MP camera, while Optimus G featuring 1.3 MP one. However, Galaxy S3 comes up with a slightly better one, with 1.9 MP camera. 11
On the other hand, rear cameras are the main features that demark the gadgets with LG outshining with a 13 MP camera, while Galaxy S3 is providing 8 MP camera. Both are of high standards when compared to that of iPhone 5. •
Feature of Connectivity – When connectivity is taken into account iPhone 5 lags way behind its counterparts and fails to live up to the least expectation of the consumers, in spite of all the gadgets having 3G and LTE connectivity features in common. However, iPhone lacks in providing additional Wi-Fi, NFC and Bluetooth connecting features, which are present in the other two devices.
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Battery – iPhone yet fails in this simple category also. A comparatively less powerful battery of 1440 mAh provides 8 hours of talk time for the device. On the other hand, advanced 2100 mAh batteries providing power to Galaxy S3 and Optimus G, raises overall talk time of both the advanced devices to fifteen hours. Market share of apple and samsung
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Interpretation From the above chart we can see that Samsung is the global market leader in total phone shipments for the first quarter of 2012, wresting the title away from Nokia. Samsung is said to have ridden a wave of growth in the smartphone sector and shipped 93.8 million phones to take 23.5 percent of the worldwide mobile market. Comparatively, former leader Nokia only shipped 11.9 million units while Apple managed 35.1 million iPhones, which accounted for market shares of 20.8 percent and 8.8 percent, respectively. ”The halcyon days of rapid growth in the smartphone market have been good to Samsung,” said Kevin Restivo, senior research analyst with IDC’s Worldwide Mobile Phone Tracker program. “Samsung has used its established relationships with carriers in a mix of economically diverse markets to gain share organically and at the expense.
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Although Samsung doesn’t disclose official sales numbers, IDC estimates that the Galaxy S II maker shipped 42.2 million smartphones, a 267 percent increase from 2011’s 11.5 million, which accounted for almost half of the company’s total phone shipments. Apple performed well and posted an 88.7 year-over-year change with its 35.1 million iPhone shipments. The Cupertino, Calif., company benefitted from overall growth in the smartphone space as vendors shipped 144.9 million units, a 42.5 percent increase.
The race between Apple and Samsung remained tight during the quarter, even as both companies posted growth in key areas,” said IDC Mobile Phone Technology and Trends senior research analyst Ramon Llamas. “Apple launched its popular iPhone 4S in additional key markets, most notably in China, and Samsung experienced continued success from its Galaxy Note smartphone/tablet and other Galaxy smartphones. With other companies in the midst of major strategic transitions, the contest between Apple and Samsung will bear close observation as hotly-anticipated new models are launched.” Nokia’s share fell in both the smartphone and overall mobile markets, suffering declines of 50.8 percent and 23.8 percent, respectively. Total mobile phone shipments for the Finnish
telecom
reached
82.7
million
units
for
the
quarter.
Both RIM and Nokia are in transition as the companies try to keep up with major players Apple and Samsung. The Canadian phone maker has started the countdown on the release of its delayed BlackBerry 10 mobile OS, which is hoped to lure customers back to the platform that was once synonymous with enterprise. Nokia and Microsoft’s 2011 deal recently bore fruit as the company released its flagship Lumia 900 Windows Phone in its bid to find a foothold after ditching Symbian-based handsets. The overall mobile phone market slumped 1.5 percent with shipments dipping from 404.3 million in the first quarter of 2011 to 398.4 million units in the last quarter.
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The IDC report echoes research from Strategy Analytics which also estimated that Samsung would take a sizable chunk of the smartphone market in the first quarter. Apple and Samsung are seen as running away with the smartphone market, however, and both are poised to make significant gains in the coming year. The two companies are still locked in a worldwide legal battle that spans 10 countries. Most recently a U.S. judge schedule court-moderated settlement talks for May 21-22, though it remains to be seen whether such a meeting will have any effect on the morass of litigation.
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FINDINGS One measure of any brand’s success is how much people talk about it. By that reckoning, Apple’s star is fallen, while Samsung’s rises. Consider the amount of rumors the past month or so about Galaxy S IV, which launches this week, and contrast that against near silence about anything Apple. Turn back the clock a year and you’ll see modest buzz about the S3 but ongoing Apple rumors that stole the thunder from the Consumer Electronics Show, Mobile World Congress and just about every single new mobile product launch. (Yet this year, Apple efforts to overshadow CES failed. Apple and Samsung are seen as running away with the smartphone market, however, and both are poised to make significant gains in the coming year.
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CONCLUSION As per my understanding Apple’s star is fallen, while Samsung’s rises. Since iPhone 5 has not been able to cater into the market, as the experts had earlier believed, other smartphones are having their dream journey. Several features and lacking of vision on part of Apple can be attributed for such a disaster. Introduction of advanced gadgets with innumerable features from Samsung , has provided consumers throughout the world to access comparatively lower cost and technically upgraded wonder products. Moreover, experts are of the opinion that with lot more coming its way, Apple is surely to face its worst time in the coming period, especially in 2013. Apple and Samsung are seen as running away with the smartphone market, however, and both are poised to make significant gains in the coming year.
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REFRENCES
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Philip Kotler : Marketing Management, 12th Edition, 2007
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William J. Standon & Chasles Futrell : Fundamentals of Marketing
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S. Nama Kumari & V.S. Ramaswamy: Marketing Management
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S.K. Gupta : Principals of Marketing Management
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