Executive Summary
This report aims to conduct a marketing analysis of the Samsung smartwatch. Smartwatches have lately been presented in the market by companies such as Motorola, LG, and Apple, with Samsung sailing in the same boat. The somewhat late Samsung galaxy smartwatch into the market has turned out to be a great challenge to show in the wearable electronics market.
External environment analysis of the New Zealand market shows that economic, political, technology, and socio-cultural factors have contributed to a significant possibility of achieving profitability with this smartwatch. The consumer analysis with the present competitors in the market is the source of the idea of the challenges the smartwatch may encounter based on its acceptability within the target market segment. The segment mostly targeting high-income earners limits the Samsung product being the first choice between consumers since customers may lack the willingness to shell out a lot. The marketing mix established for the Samsung Galaxy smartwatch is well appreciated. It is keeping in mind that the market segment to target is high-income earners and consumers who are willing to try this product. However, this limits the choice of the product within the market who are not currently using Samsung associated phones, because compatibility of the smartwatch is minimal. The purpose here is to examine the potential factors limiting the smartwatch’s success and make alternative recommendations.
The smartwatch, although with depth personalization characteristics, range of decisions with accessories and the smartwatch itself and only willpower to bring upon a healthier lifestyle, the product fails to entice the masses in the New Zealand market segment. Recommendations on extending the smartwatch downwards by making it more compatible and reducing the price to attract the masses by allowing fewer features within the product are some answers made in the report. The recommendations for a downstream brand extension is more than a decision within the larger market that will carry about diversity in its product consumers.
1.0 Samsung Galaxy Smart Watch Market Analysis
1.1 Introduction
This report aims at doing a marketing analysis of electronic manufacturer Samsung of its latest product, Samsung Galaxy Watch. Samsung galaxy watch, which is a smartwatch, was presented in the market in 2016 and will be a part of the latter category of Samsung. The applications and features obtainable in the Samsung watch seem to support this statement as it will be examined going further
In order to examine the Samsung galaxy smartwatch, in this report, firstly, it will commence with analyzing the external environmental factors for the New Zealand market, the likely potential of the other market factors that may unswervingly or indirectly influence the Samsung galaxy smartwatch. Moreover, having analyzed the external environment, it will be great to place the product in the target market by examining the potential consumers in the market and coming up with a market segment connected to demographic, geographic, psychographic, and behavioral characteristics. These characteristics offer a baseline for choosing the perfect market segment, examining the competitors within the selected market segment, placing the smartwatch within it, and finding the competitive advantage that pursues value for the target customers. The right sort of marketing mix is identified, having done all the critical scrutiny. The marketing mix identified will stand for competitive advantage for the firm in the coming year.
Along the way, the report will highlight and establish various encounters that the Samsung product may aspect in the consumer market owing to its late release and little compatibility with additional software. Finally, recommendations will be made to extend the Samsung galaxy smartwatch to gain a better share of the market and to diversify the product.
2.0 Macro Analysis
This part analyzes the external forces affecting the Samsung Company limited. The market analysis considers the usage of political, economic, social, technological, environmental, and legal factors. This means that an organization should conduct a situational analysis to identify any macro-environmental changes before implementing any kind of tactical plan or strategy. Therefore, macro analysis precedes strategy implementation. Organizations that adopt successful monitoring and response to variabilities in the external environment have a more excellent capability of differentiating themselves from the increasing competition while creating a competitive advantage for themselves. Wood electronics use PESTLE analysis in the assessment of its market.
2.1 Political Factors
The political assessment determines the impacts of political factors on the profitability of the wearable electronics market in New Zealand. The following are the political factors affecting Samsung wearable electronics
- Tariff and trade regulations affiliated Sto technology
- Corruption as seen in the regulation levels of technology
- Governmental interference and bureaucracy in the technical equipment industry.
- Existence of scientific and technical instruments anti-trust laws
- Taxation rates and incentives
- Mandatory benefits to employees
- Wage regulation with stated minimum wage and overtime
2.2 Economic Factors
The aggregate investment and aggregate demand in an economy are determined by the economic cycle, foreign exchange rate, interest rate, saving rate, and inflation rate. The microenvironment factors, especially the competition aspect, influence the competitive advantage of a wearable electronic firm. For the case of Samsung, the economic factors within the country, such as the inflation and growth rate of the scientific and technical equipment industry, may directly influence its growth. Growth forecasting and trajectory is not only limited to the economic sector but also the wearable electronic organization itself. The factors of consideration while undertaking macro analysis are;
- The form of economic system in new Zealand- assess its stability
- Free market and associated technology intervention by the government
- Stability of new Zealand currency and exchange rates
- Financial market efficiency – assess whether wood electronics needs to increase capital in the New Zealand local market.
- Quality of infrastructure in the technical instruments industry
- Comparative advantage in New Zealand and technology sectors internationally
- Productivity and cost of labor in the economy
- Rate of interest
- Rate of inflation
- Rate of unemployment
- Rate of economic growth
2.3 Social Factors
The culture of an organizational environment is influenced by society’s culture and the ways of doing things. The understanding of the market by Samsung company marketers will be significantly influenced by the altitudes and beliefs of the target market’s population. An understanding of the customer beliefs helps in appropriate shaping and designing marketing messages for the customers. The social aspects that the wood electronics company ought to analyze for macro analysis are.’
- Leisure interests
- Altitudes- based on environmental consciousness and health.
- Spirit of entrepreneurship by society.
- Culture
- Education standards, as well as the education level in the technical equipment industry.
- Structure of power hierarchy, and class structure in the society
- The skill level and demographics of the population.
2.4 Technological Factors
The fast growth of technology disrupts various electronics firms in New Zealand. There has been a fast transformation in the wearable electronics market in New Zealand, giving the already established electronics firms a challenge to cope. The transport industry is increasingly moving towards automation orchestrated by google and by industries that have started an electronic care revolution, including Mandeno Electronic Equipment Limited. Samsung Electronics Limited should carry the technological analysis of the industry and the speed at which it is disrupted by technology. Industrial disruption at a low speed denotes more time, and fast speed means that the Samsung Company will require much time to cope and be profitable. An understanding of the following aspects will constitute technical analysis.
- Developments of recent technologies by the Samsung smartwatch competitors’ competitors.
- Impact of technology on offering product offerings.
- Impact of technology on the value chain arrangement in the technology sector
- Technological diffusion rate.
- Impact of technology on cost structure in the technical equipment industry.
2.5 Environmental Factors
Environmental standards and differences influence the profitability of Samsung Company in the wearable electronics market in norms in different markets. Liability laws are different from environmental laws, even within the same country. This is because every state has different liability clauses in case an environmental disaster occurs. Before entering into business next year, Samsung Company should carefully analyze the environmental standards required for its operation in the existing market. The following are the environmental factors of consideration by Samsung Company Limited.
- Climate change.
- Environmental pollution regulation laws.
- Management of waste in the technology sector.
- Air and water regulations in the technical equipment industry
- Legal Factors
Protection of intellectual property rights by institutions and legal frameworks may not be robust enough in New Zealand. Samsung Company should, therefore, do a careful evaluation of the protection of their intellectual property because this can lead to loss of its secret sauce, which can negatively affect its competitive edge. Samsung Company should consider the following legal factors before next year.
- Data protection
- Safety and health law
- Employment law
- E-commerce and consumer protection
- Intellectual property law
- Discrimination law
- Anti-trust law in the technical equipment industry in New Zealand.
3.0 Micro Analysis
The microanalysis involves scrutiny of customers, competitors, employees, suppliers, and media in the market environment. Micro factors affect businesses in an industry differently. This is because businesses are different in terms of capacity, size, human resources, financial resources, and overall strategies.
3.1 Customers
The central part of any business is customers. Businesses look for ways of getting new customers as well as retaining them to generate revenue. Therefore businesses should adopt a marketing strategy that appeals to potential customers for sustenance. Also, businesses must promulgate strategies that consider the needs and wants of the customers as this is the only way to sustain the existing customers. As of 2016, the adoption of wearable fitness devices stood at 11% in New Zealand, which is considered high compared to the worldwide average, whereas the smartwatch was half the average rate. The rate of wearable adoption in New Zealand suggests that there is room for significant growth, especially in the smartwatch market.
The adoption rate of fitting smartwatches varies with size, which is considered a style in New Zealand. Smartwatch acceptance stood flat every year, achieving only a 3% adoption rate in New Zealand. This shows the slagging adoption of smartwatches in the electronic wearable market. 13% of consumers in New Zealand anticipate buying a smartwatch in the future, which has a direct influence on the future aggregate demand. The price drop of smartwatches will significantly influence the buying power. The consumers in New Zealand are quite logical about technology compared to other countries.
3.2 Competitor Manufacturers.
Apple is the strongest competitor of sum sung galaxy smartwatch in New Zealand. Apple has adopted several aspects that make its smartwatch be preferred much by the customers. The product innovativeness is a strength to the manufacturer. The features of the watch, Apple smartwatch, is characterized by high levels of innovativeness that makes the consumers prefer it.
The existing software supports the watch. The OS remains and is incorporated in iWatch. This makes the consumers an opportunity to integrate multiple devices using the smartwatch.
New Zealand consumers much more prefer Apple status. Most people consider any apple product a sign of status symbol and, therefore, the reason why this is strength to the watch manufacturer.
Though the adoption of smartwatches is slagging in New Zealand, there is an increasing demand for smartwatches. 13% of consumers in New Zealand anticipate buying a smartwatch in the future, which has a direct influence on the future aggregate demand. The price drop of smartwatches will significantly influence the buying power. The consumers in New Zealand are quite logical about technology compared to other countries.
4.0 Strategy
Samsung can use market segmentation, targeting, and positioning structure as a strategy to tap the opportunity of the increasing demand for smartwatches in New Zealand.
4.1 Market Segmentation
The market needs to be divided into small units when selecting the type of customer. The subdivision is based on the characteristics of the consumers in New Zealand. The compatibility of the Samsung galaxy smartwatch needs to be compatible with the Samsung Galaxy S6 and S7. This smartwatch will itself result in the narrowing of the Samsung market share. Samsung should consider segmenting its market based on demographic, geographic, psychographic, and behavioral attributes.
It is seen that considering the variables of income and age as demographic variables can be treated as one segment. The galaxy smartwatch is characterized by features that emphasize general body fitness, health routines, and healthy lifestyles. It is also deduced that the watch acts as a monitoring device of the heartbeat. This means that the attractive features of the device tend to appeal to young people. The price of the galaxy smartwatch is 533 dollars meaning that this product is only accessible by the high-income groups. Owing to that, this product is accessible to the high-income earners would mean that the customers are dwellers of commercial cities. Therefore the supply of smartwatches should be consistent in the cities.
4.2 Targeting
An evaluation of the potential market segments is required to develop their profiles to develop a strategy. The potential market share of smartwatches in New Zealand was 11% as of 2016. Though the market share of Android users remains high in New Zealand, Samsung has established a strong market base for its products and hopes that the demand for galaxy smartwatches will boom next year. Thus, high demand by the existing Samsung customers is expected due to its established brand loyalty.
Based on this evidence, a market segment that falls between medium to high-income subset of consumers who are willing to make decisions on the choices provided is developed. This results in the selection of differentiated target strategies to have an idea of various consumers. They can have an impact on the diversification of the galaxy smartwatch in the market.
4.3 Positioning
Analyzing the competitors of Samsung galaxy smartwatch in a particular market constitutes to positioning. Incorporating the right marketing mix into a marketing strategy must be of the essence to attract customers.
4.3.1 Analysis of the competitors.
Considering the competitors in the market, together with their analysis, indicates a reasonably strong consumer preference of the competitors’ product. Other than the apple, the other competitors are LG and Motorola. This is because the features of their products much resemble that of a regular watch. Nevertheless, the Galaxy smartwatch is placed at a larger scale in the market segment due to its consideration of simplicity of use and design.
Other manufacturers like sonny have not yet valued the market segment in terms of design and lack of functionality value to customers. The greatest strength of the galaxy smartwatch is the consideration of a personalized setting that can bring the target customers close to the smartwatch. Pricing is what makes the difference between the galaxy smartwatch and the sonny smartwatch. The price range may not compel the customers to go for the sonny, Motorola, and LG products.
Concerning placing the galaxy smartwatch, the competitive strategy aims at providing a more personal experience to the target market segment. With the Samsung galaxy being considered as a status symbol, the principal aim is to market the smartwatch to the loyal brand customers.
4.4 Marketing Mix
The marketing team of Samsung Company should come up with a plan to provide service or products to the customers. The plan should bear the best set of features to entice the customers. Adopting a single marketing strategy cannot help the company to attain its organizational goals. Therefore, the attributes of price, product, place, and promotion would be a set that would greatly help the company to attain its objectives.
4.4.1 Product
The watch design by the Samsung Company should keep the consumers’ vast demands and preferences. The company should offer quite a variant of choices to its consumers. The variants endorsed are, sporty look, elegant look, and casual look. The company should also consider different size options that attract both sexes rather than one sex. The company can also adopt a much more fashionable approach. This fashionable approach may encompass various provision straps that can appeal to the consumers, meaning that interchanging traps are evident. A more personalized touch should be offered to consumers. This personalized touch includes features like scribbling drawings instant sending, tapping with a vibration signal, actual heartbeat sending. Therefore, the main characteristic that should be of high consideration is the aspect of monitoring the fitness of the consumer through progress tracking, of keeping them healthy.
4.4.2 Price
Though the price of the galaxy smartwatch is quite high, the company should not hike its prices when demand grows. Many companies believe that hiking prices when demand grows are relevant by considering that as a perceived cutting edge, high value, and quality product. It is easy for new consumers to purchase the smartwatch because it is compatible with the S versions of the Samsung Galaxy phones.
4.4.3 promotion
Letting the potential consumers aware of the existing product to motivate them to purchase the service or product constitutes promotion. It is a big task to carry out promotion of Samsung products. The Samsung Company can use social media to draw the attention of the consumers. The company should use detailed videos on the tube to show the specifications of the smartwatch. The principal aims of the promotion strategy are to show the value added by the smartwatch to the lives of the consumers by increasing the accessibility of the smartwatch, relevancy, and decision making by consumers. The promotion will also indicate individuality embrace, with the watch’s critical focus being to inculcate an increase in a healthy lifestyle with fitness tracker features.
4.4.4 Place
Products should be made available to customers at the right location, using the place as part of the marketing mix. This marketing mix concentrates on the supply chain of the item. The company has not been capable of abiding by its commitment due to delay in its supply chain resulting from unanticipated material issues. This delay in availing the smartwatch has created questions in the minds of potential consumers. As a result, success is hampered. Apart from general retailers and Samsung stores, quick availability and easy access to the Samsung galaxy smartwatch should be given great attention. Access to accessories in the online market of New Zealand should also b prioritized.
4.5 Extending the Brand
The Samsung Galaxy Smartwatch is a new existing group that Samsung has submitted into, with its discharge in the market in 2016. The previous launch before this was into the S7 smartphone category
Because the Samsung Galaxy smartwatch is a new existing product for Samsung as a company and its potential customers, the re-launch of it can bring many problems to its approval in the market. Although the market has been segmented within the consumers of medium to high-income earners, the smartwatch’s high price may not appeal to consumers’ choice. This occurs within the medium income market category with numerous other competitors like Motorola and LG, offering a similar group of products competitive pricing. The choice of the Samsung Galaxy smartwatch is additionally minimized within its customers to those already using Samsung phones or customers who plan to buy the latest generation Samsung phones.
Based on the above challenges, the smartwatch for next year must be made compatible with many of the other operating systems because, as seen earlier, a high number of the consumers use the Android type of operating system. This will constitute to increase in the market share with segmentation getting increased within the psychographic characteristics. Samsung has created some applications accessible within the watch, which may not be used with the medium generations. These applications can be very dull to be operated within a small screen bearing in mind that this can cause exhaustion to the person using the watch. Instead, a new supplement must be hurled, which can be considered an extension of the product that will be less costly with design application personnel. Though the customers would be capable of purchasing the applications that they would think is of great importance.
The downward extension of the smartwatch with compatibility with other software can take about diversity between the customers and give a taste of the product for new Samsung users that can be possible loyal customers of other Samsung category.
5.0 Conclusion and Recommendations
In conclusion, the marketing analysis of the Samsung galaxy smartwatch comprised external environment analysis, consumer analysis, competitors analysis, customer insight of the smartwatch, and identification of the smartwatch’s marketing mix. It is suggested that some measures that can be made within the Samsung Galaxy smartwatch can help the company in enhancing its market share and also help it diversify the product. The proposal would extend the product line downwards so that it becomes affordable to the increasing consumers. Some of the challenges stated in the report affecting the product are associated with a high price, late entry in the market, a high proportion of consumers that can be predicted using the new smartwatch, and the challenges associated with compatibility. However, the smartwatch might be capable of overcoming these challenges with its larger functional feature and applications. Efforts must be utilized to ensure that the smartwatch is used by the masses that can significantly make them gain confidence in Samsung products and turn to future loyal customers.