1.

Introduction

Through this exercise, we are looking into the Samsung mobile phone brand, exploring their
market segmentation, targeting and positioning (STP), as well as evaluating the paths taken
for their STP and see if it fits with the current market. A South Korean multinational
conglomerate company, Samsung was first established in 1969. The first item that they
produce, in a joint venture with Sanyo, are low-end black-and-white televisions. Samsung did
not produce phones or other telecommunications devices up until 1988, starting with the SH-
100 (Lee & Lee, 2004). It is a far cry from the sleek, Samsung Galaxy, also known as
Samsung i7500 that was first introduced in 2009, using the Android operating system (Hill,
2013). Fast forward 10 years later, we now have the Samsung Galaxy S10, which is
Samsung’s widely popular flagship smartphone, with over 1 million units sold in South
Korea alone (GSMArena, 2019). Smartphone accessories are also sold together. Such tech
wearables offered by Samsung are the Galaxy Watch, Galaxy Buds, and Galaxy Fit. Besides
smartphones and their respective accessories, Samsung is also producing smart TVs, Blu-ray
players, home entertainment systems, and home appliances such as refrigerators, washing
machines, air conditioners, and vacuum cleaners (Samsung Malaysia, 2019).

The Samsung Galaxy S10 is not the only phone sold by Samsung. There are other phones as
well such as the Galaxy A series and Galaxy M series (Samsung Malaysia, 2019). Therefore,
market segmentation, targeting and positioning (STP) are important for Samsung to manage
their resources efficiently and effectively for their commercial efforts. Before delving further
into their STP, we need to first understand the terms market segment, brand positioning, and
positioning strategies. According to Hayes (2019), market segment is a group of individuals
who share the same characteristics, grouped together by marketing professionals, especially
for marketing purposes. Each market segment is different, and marketing professionals
approach each of these segments differently, sorted according to the unique needs, lifestyles,
demographics and personality of the individuals, or also known as target consumers. Whereas
for brand positioning, it is defined as a “reason to buy” which you want to be formed in the
mind of the target consumer, that is, you want them to think of certain benefits of the brand.
A brand positioning has to fulfil several criteria. It must be distinctive enough from
competitors, validated with appropriate products, delivered across all points of contact with
the consumer, and most of all, support and boost the company being positioned, improving to
achieve its financial goals. (Juneja, 2019) When the brand positioning has already been
defined, marketers can use several positioning strategies to create a better image for the
company, including strengthening the current position, moving to a new position, and
attempting to reposition the competition. A positioning strategy is closely linked with the
brand positioning, as the strategy is a combination of marketing actions used to convey the
concept to target consumers. The result will be positioning effectiveness, which refers to the
results achieved according to a set positioning objective towards the target consumers (Jamil
& Che Aniza, 2014).

To further envision how their STP are used in the local Malaysian market, we’ll briefly go on
the trend of smartphones and its usage behaviour in the local market. In a study done by
Mohd Azam, Abdullah, Zainal Abidin, Tan, & Abdullah (2012), it is reported that 85% of
Malaysians own at least one smartphone. It is from this report as well that it is quoted,
“Selling price is not the most important factor that affects smartphone purchasing decisions.”
Design, connectivity, and performance are more important factors, and smartphones are
perceived to be as durable, hence the price sensitivity is lower. The smartphone is also seen
as an indicator of status, prestige and style, not necessarily just a commodity to facilitate
communication (Osman, Zawawi Talib, Sanusi, Tan, & Sani Alwi, 2012).

2. Segmentation, Targeting and Positioning Strategies (STP) Adopted by Samsung

2a. Segmentation
Market segmentation is the action of the company identifying and profiling distinct groups of
buyers who has different needs and preferences. There are three approaches in market
segmentation, namely mass marketing, differentiated marketing, and niche marketing. (Jamil
& Che Aniza, 2014)

First of all, Samsung is using differentiated marketing, with a multi-segment strategy. The
strategy seeks to attract more consumers in more than one segment. The first segment will be
the demographic segmentation, aiming at different age groups and different income classes.
The teenagers to early adults, age 14 to age 25, are technology savvy and has a growing
spending power in recent years (Essay UK, 2019). The Galaxy M series are priced at a
relatively affordable price at RM799 for Galaxy M20 and RM 449 for Galaxy M10, with very
good specifications such as Full HD displays, high battery capacity of 5000mAh, and fast-
charging for the M20 (Samsung Malaysia, 2019). Knowing that this age group is technology
savvy and will be using their phones for a long period of time, Samsung has made this series
accessible towards this target consumers, with good smartphone specifications for them.
The adults, age 26 to age 50 and above, have a higher ability to purchase better smartphones
or follow trends, as well as buying any other Samsung products other than smartphones, such
as their accessories (Essay UK, 2019). It is here that the psychographic segmentation comes
in. Lifestyle, in this segment for example, plays an important role in terms of consumer’s
interest; smart watches that measure step count, sport activities, and general well-being will
attract sports and wellness buffs, whereas quality headphones is a must for music fans. On the
homepage of Samsung, an ad is placed, with the lines “Galaxy S10. Seamlessly connect your
Galaxy.” A photo of the phone, Galaxy S10, is placed with their tech wearables which are the
Galaxy Watch Active and Galaxy Buds. Please refer to Image 1 below (Samsung Malaysia,
2019). Currently, the Galaxy S10 is priced at RM3299, with the Galaxy Watch Active at
RM799 and Galaxy Buds at RM499. (Samsung Malaysia, 2019) The price itself is prohibitive
for the previous target consumers. From here, it is clear that Samsung is targeting the adults
who have a higher spending power, as well as pandering to their lifestyle interests, by placing
the smartphone itself with the accessories that comes with it inside the ad on the homepage of
Samsung.

Fig 1: Ad took from Samsung Malaysia’s website homepage.

From these examples, we can clearly see that Samsung makes use of a few segmentation
methods, at least locally within the Malaysian market, in order to adapt to their different
target consumers. It gives them a feeling of being taken care of individually, contributing to
the fact that they are currently one of the largest players in the smartphone industry.
2b. Targeting

As quoted by Kenton (2019), a target market “refers to potential customers whom a company
wants to sell its products and services.” Market targeting is the action of marketers, selecting
their target markets after much deliberation. There are four market targeting approaches
which are Target Selected Niche(s), Target Multiple Segments, Product Specialisation, and
Product Variety. These approaches depend on four different factors which are segments
clearly defined, differentiated but segments not clearly defined, selective targeting, and
extensive targeting. For segments clearly defined and with extensive targeting, Target
Multiple Segments is used. For segments clearly defined and with selective targeting, Target
Selected Niche(s) is used. For differentiated but segments not clearly defined with extensive
targeting, Product Variety is used. For differentiated but segments not clearly defined with
selective targeting, Product Specialisation is used. Usually, these approaches include
reducing price, increasing price, updating the advertising message, add new product features,
and selling through retail stores instead of distribution. (Jamil & Che Aniza, 2014)

For Samsung, their segments are clearly defined, with only four smartphone series targeted to
different demographics and psychographics. The Galaxy S and Galaxy Note series are
targeted to adults who have higher purchasing power or may purchase it as status of prestige.
The Galaxy A and Galaxy M series are targeted to the younger crowd with less purchasing
power and wants the best technology with their limited budget (Samsung Malaysia, 2019).
With this approach, they are already targeting almost all buyers in the smartphone industry.
From here we can see it is called extensive targeting. Hence, the market targeting approach
here by Samsung is Target Multiple Segments.

According to a report by Abishek (2017), Samsung has the following target consumers,
consisting of six different groups. Large businesses, government and utility organisations,
working professionals, young early adopters of tech, college students, and the common
cellular phone users. It is also mentioned that Samsung is not only targeting numbers here,
but they want to acquire and retain their consumers to keep on using their products. One of
the examples that they are doing so is the Samsung Student & Educator Discount Program,
which is currently only available in the UK and US (Samsung USA, 2019). With a qualified
school email address, students and teachers alike can receive easy access to low prices and
special offers, saving on required smartphones, tablets, and appliances intended for school
use. This offer will not only help to acquire new customers, but retain existing consumers,
which in this case the school themselves which are acquainted with Samsung’s technology.
Another example of Samsung putting in efforts to retain their consumers is the “Trade Up &
Save Up” promotion which is done when a new flagship phone is launched. (Samsung
Malaysia, 2019) Existing Samsung customers can take their Samsung smartphone to
Samsung retail stores and trade it in for a new Galaxy S10, provided that they fulfil a few
terms and conditions. Nevertheless, it appeals to the young early adopters of tech, who wants
to own the latest gadgets, and who are existing consumers of Samsung.

Besides the six different groups as mentioned earlier, there are also efforts to rake in more
customers from their competitors, especially from consumers who are using the Apple iPhone
specifically. On Samsung Malaysia’s homepage, there is an ad with the headline #iChanged,
with the subheadline “Make a change with Galaxy S10 model for incredible rewards.”
(Samsung Malaysia, 2019) From the headline, it is obvious who that they are targeting. It us
also a promise towards the targeted group, that you can have better features at a lower cost
than an iPhone. Samsung is offering two types of rewards here for consumers who are using
the Apple iPhone; purchase the Galaxy S10 and get a Galaxy Fit or trade their phone in and
get a pair of Galaxy Buds. It is an added incentive for the targeted group to make the jump
from owning an iPhone to owning a Samsung smartphone.

Fig 2: Ad took from Samsung Malaysia’s website homepage.

2c. Positioning

As mentioned previously, positioning is defined as a “reason to buy” which the company

wants it to be formed in the mind of the target consumer. For Samsung, the positioning for
their smartphone category is to be a market leader in the overall mobile and smartphone
market (Sumaiya, 2015). In the local market where there are lots of choices for consumers,
these smartphone series and their accompanying accessories embody the style and technology
for the young professionals, with its latest, cutting edge designs in terms of hardware and
software, as well as the superior connectivity features. It is from here that we can see that
Samsung is doing their best to cover the overall mobile and smartphone market with all four
different series for their smartphones and numerous accessories to go with it, as previously
mentioned. (Gayathri, 2016)

There are also a few more strategies that Samsung has employed to position itself in the
smartphone industry. With the push on creating the latest technology designs, such as the first
curved screens on the Galaxy S6 and the hole-punch, almost borderless screens on the Galaxy
S10, Samsung has created a unique brand image for itself as a high-end value driven brand,
synonymous with quality and innovation (Abhishek, 2017). The focus towards middle to
high-end segments, evident in the creation of the latest technological advancements, such as
the Galaxy Fold (first folding screen smartphone) and Galaxy A80 (flip camera system for
selfies and taking photos) has brought on real margin for the company (Abhishek, 2017). A
wide service and care network, especially here in Malaysia, has also position the brand well
and created more value for the brand. Consumers have the option of live chat to service
centres, call for enquiries, search for service centres, track their repairs, call from overseas
about services, and even directly email to the CEO’s Office (Samsung Malaysia, 2019). The
Samsung Experience Stores is another strategy of Samsung in positioning themselves.
Consumers can explore the latest range, learn more about his or her device, get experts to
advise them on enquiries, and receive technical support, all at one place (Samsung Malaysia,
2019). These strategies fall under the Product Service Strategy under Positioning Strategy,
which covers Product Mangement, Product Positioning, Branding and Product Objectives.

There are no particular slogan or tagline that embodies the positioning, as Samsung prefers
unique taglines for each and every product. For example, the few generations before the
Galaxy S10, the Galaxy SIII uses the slogan “The next big thing is here” while the current
slogan for Galaxy S10 is “The next generation has arrived.” (Samsung Malaysia, 2019)
3. Analysis of Segmentation, Targeting and Positioning Strategies (STP) Adopted by
Samsung

Samsung’s Segmentation, Targeting and Positioning strategies are most effective because one
of the major evidences comes from Interbrand, a well-recognised global brand consultancy.
Samsung is ranked 6th in Interbrand’s Best Global Brands 2018 (Samsung Korea, 2018). A
major factor that played a critical role in Samsung’s success was the continued efforts in
launching human-driven innovations, which include the Galaxy Note9 smartphone.
Previously in 2012, Samsung’s placement in Interbrand was number 9 globally, with a brand
value of USD 32,893 million. In 2018, the brand value has climbed up to USD 59,980
million, a significant improvement in both brand value and brand ranking.

Samsung has also taken an umbrella approach in its branding, by using Samsung Electronics
to cover all their categories, from smartphones to home appliances. It is done in a way such
that subsequent products that carry the brand name Samsung is easily understood and
accepted by consumers. This acceptance has won them the esteemed Putra Brand Awards
2018, specifically in “Communication Devices” and “camera, IT and Office & Business
equipment”, where it won two Gold awards, and a Silver award for “Personal, Household &
Outdoor Appliances”. Besides these three awards, Samsung has also won the “2018 Marketer
of the Year”, acknowledging the efforts that Samsung has been putting into their brand.
(Samsung Malaysia, 2018) In recent years, Samsung’s smartphones have become the driver
of their brand image as well, and they have been leveraging on it. An example of that will be
Samsung winning 30 CES 2019 Innovation Awards for Outstanding Design and Engineering.
Some of the award-winning products are the Galaxy Note 9, Galaxy Tab S4, and the Galaxy
A6, with its accessories winning some awards as well, which are the Galaxy Watch, Wireless
Charger Duo, and the DeX system. This prestigious award honours technological devices
displaying outstanding design and engineering with cutting edge technology, a feat that
Samsung has achieved (Samsung Global, 2018).

The meaning of a brand’s name and qualities that are associated to it are built over time
through their communication to consumers, and that comes from positioning and the related
strategies that are being used to convey the message. The results of these strategies are
evident in the local awards and global recognition. It is also from these examples that we can
see their consumers do have a positive relationship with the brand’s reputation.
4. Summary

Samsung has come a long way since its early days of being just an electronics company, and
has employed their Segmentation, Targeting and Positioning Strategies (STP) vey well in
order to achieve their goals. Samsung uses differentiated marketing, with a multi-segment
strategy, to attract more consumers in more than one segment, under different demographics
and psychographics. Their segments are clearly defined; young teenagers to young adults
which has limited spending power but requires the latest technology and working adults with
more spending power looking for prestige and style in their technological devices. We can
see that they are already targeting all buyers in the smartphone industry, and hence their
market targeting approach is Target Multiple Segments. Under positioning, they position
themselves to be the market leader in the overall mobile and smartphone market, which they
achieve using Product Service Strategy under Positioning Strategy.

Although they are doing very well currently with their strategies, it is recommended that they
employ one-to-one marketing, under the approach to market segmentation. It is a rapidly
growing marketing movement, especially in the electronic commerce section. With
consumer’s behaviour and usage of apps gleaned from their smartphones, this can help better
customise their experience with the brand, making an even more personalised connection
with the consumer, and leverage the perception of the brand better.

(2852 words)
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