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Using Marketing Channels and Price to Create Value for Customers

1.Marketing channels. To the best of your ability, outline the marketing channels of your product or service offering as they currently exist. Refer to Figure 6.2 for some ideas. Most product and service offerings will have more than one channel, so your system should include at least two, for example (1) a direct channel for internet sales: manufacturer –> customer; and (2) an indirect channel such as manufacturer –> distributor –> wholesaler –> retailer –> customer. If your product or service only has only a direct channel, explain why. Would this channel strategy change as a result of your new target market? Why or why not?
2.Marketing channel strategy. Why type of distribution intensity strategy does your product or service currently use? How do you know this? Would this distribution intensity strategy change for your new target market? Why or why not?
3.Value chain. Referring back to your marketing channel diagram, discuss what each member of the value chain does to bring value to the consumer.
4.Pricing strategy. Referring to the various pricing strategies outlined in the week’s readings, which one does your product or service currently use. Would you recommend any changes for your new target market? If so, how would you change it and why?

Answer

Introduction

Samsung Electronics is a South Korean multinational headquartered at Seoul South Korea. The company has various assembly plants and sales distribution in various countries around the globe. Therefore, Samsung has hired more employees than some of its peers. Over the past decade, Samsung Electronics especially the mobile phone division has seen tremendous growth (Levinsohn, 2003) and (Samsung, 2015). In 2009, the company surpassed Hewlett-Packard (HP) to become the largest electronic device maker in the world. Given its humble beginnings, Samsung is a company that I have chosen to research on changes and possible improvements it can make to its marketing channel, strategy, value chain and pricing strategy. Therefore, the paper will focus on Samsung mobile marketing channels, examine if the channel strategy changes as a result of a new target market. Secondly, the distribution strategy that Samsung uses and if the distribution strategy changes with a new target market. Thirdly, study the value chain and the value proposition to the consumer. Lastly, the pricing strategy that Samsung uses with mobiles phones and possible recommendations to a new target market.

Marketing Channels

Samsung Mobile has a similar marketing strategy to most of their competitors but is different to a certain extent. Majority, of their products, are sold online but offer other services such as free shipping (Samsung, 2015). It helps consumers check for featured products and analyze the information before making the purchase decisions. On the other hand, Samsung also sales their products through wholesalers that later resell to other retailers or directly to the consumer at a profit (Levinsohn, 2003). Therefore, the channel level is each layer performs certain work to bring the final product closer to the consumer. Particularly, they are two consumer marketing channels used by Samsung. Direct marketing channel where the company sells direct to consumer. The other channel used is indirect marketing channel that allows for one or more intermediaries.

Distribution Channel

The distribution channel refers to the path that goods from the manufacturer reach the consumer. So, it is simply the distribution network. In the given study, Samsung distribution channel is divided into three types. Producer –Consumer, Producer-Retailer-Consumer and Producer-Wholesaler-Retailer-Consumer. Samsung uses the producer-consumer that is the simplest, shortest and profitable channel. The channel has no middlemen and Samsung sells their goods to the consumer (Samsung, 2015). On the other hand, Samsung also uses producer-retailer customer. This type of channel distribution involves the middlemen “retailer”. Samsung sells their products to large retailers that in turn sell them to the ultimate consumer. Lastly, producer-wholesaler-retailer-consumer distribution this channels allows for middlemen, under such an arrangement Samsung sells products to big wholesalers that buy goods in large quantities which in turn resell them to retailers and the ultimately to consumer.   The distribution channels will not change in a new target market because the type and nature of the market the product requires few middlemen and greater promotional efforts. It ensures that Samsung maintains profitability in a very competitive market.

Value Chain

The value proposition to the consumer is that Samsung mobile is a product of value, features and benefit. Therefore, the value proposition involves offering the most upscale product for a better price to cover the higher cost. Also, the same value proposition involves introducing a brand offering of comparable quality but a lower price (Samsung, 2015) and (Sock, 2012). For instance. Samsun g smartphones can earn more profits with the same price as compared other brands such BlackBerry, Nokia or HTC

Pricing Strategy

Samsung follows a simple pricing strategy by pricing all its phones that are all affordable to people of all income levels. To ensure that it meets this goal Samsung releases many mobiles for the low or affordable price (Kumar, 2009) and (Samsung, 2015). However, given the nature of the industry that requires a high cost of development. Samsung has an inbuilt research and development facility that reduces the cost of producing products. I would recommend, that Samsung should reduce the prices of some products to become more affordable to low-income consumers.

Conclusion

The paper has shown Samsung mobile marketing channels, examined the channel strategy changes as a result of a new target market. Secondly, the distribution strategy that Samsung. Thirdly, study the value chain and the value proposition to the consumer. Lastly, the pricing strategy that Samsung uses with mobiles phones and possible recommendations to a new target market.  The paper has shown that Samsung targets several markets and is designed to separate offers. It has helped Samsung become profitable and able to generate higher sales, be sustainable and profitable in future.

 References

Levinsohn, J., (2003). The World Bank’s poverty reduction strategy paper approach: Good marketing or good policy?. Washington, D.C: World Bank.

Samsung, (2015), Samsung Annual Reports 2015. Retrieved from http://www.samsung.com/us/aboutsamsung/investor_relations/financial_information/annual_reports.html

Sock, K. C. (2012). Decision-Making Determinants in Working Women’s Clothes Purchasing: Introduction of Clothing, 4Ps Marketing Mix, Demographic of Consumer and Consumer Decision Making. Saarbrücken: LAP LAMBERT Academic Publishing.

Kumar, S. R. (January 01, 2009). The E-Mode of Brand Positioning. InfoSci-Books

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