Marketing assignment

MKT 421

June 29, 2015

John Brady

Week 1 Samsung Gear A/Orbis Smartwatch

In today’s world of fast paced living, it seems everything changes by the day. This could not be truer in the electronic world. We have all bought a computer one day and the following week it seems to be already outdated. The new product that seems to be an up and coming product that will change how we live our lives are smart watches. Smart watches just came out but they are already all the rave with electronic guru’s.

Product description

The Samsung Gear A Orbis Smartwatch is one of the smartest products under the brand name Samsung. It is a watch whose functions are far ahead of just a watch. The watch comes with a touch screen plus additional physical controls run by the rotating bezel (Samsung, 2015). A combination of the touchscreen and the rotating bezel enables the smartwatch to perform several actions such as zooming, scrolling, adjusting brightness and volume. In addition to these cool features and functions, the watch comes with a 1.18” screen with 3015 ppi count. Among the features of the Samsung Orbis are the wearable sensors. The sensors include a gyroscope, accelerometer and a heart-rate monitor.

For connectivity purposes, the product has Bluetooth; this helps in transferring files as well as execution of several commands on the phone that it is synched with. It is Wi-Fi enabled and runs on 2G; these features make it possible to connect the watch to the internet. According to Samsung, the Samsung Orbis will be equipped with the Exynos chip; this is ARM-based architecture owned by Samsung; it is found in smartphones and tablets. In terms of the operating system, the round gear smart device will run on Tizen software; a product of Samsung; and not the common Android Software. Another breathtaking feature of the product is the fact that it will be charging wirelessly.

Solving the needs of the target market

The Samsung Gear A Orbis is a smartwatch there is sold at a comparatively high price. This implies that the product is specifically targeting high end consumers. The target market for this product is the members of the society who like luxurious lifestyles. These are individuals who want to feel important in the society by using the latest and smartest devices in the market. While developing this product, Samsung kept in mind that it will target high end consumers in the market. Before coming up with a new product in the market, it is important for a business organization to consider the needs of the target market and establish whether or not the product will solve the market needs (Kotler & Kevin, 2009).

With regards to the current world of technology, the markets expect products that are highly intelligent and smart. The target market for the Samsung Gear is basically the youth and young adults. The basic need of this market as far as technological products are concerned is for them to get devices that are better than the rest in the market. Currently the market already has a Samsung Gear as well as the Apple Smartwatch. This basically implies the market is expecting a product that outperforms the ones already in the market.

Given the features that this new product is coming along with, it is true to say that it is able to solve the needs of the target market. One of the coolest ways through which this product has solved the needs of the target market is by it feature of the rotating bezel. Similar products already in the market do not have this feature and therefore this one stands out. This is basically the solution because it enables the smartwatch to physical controls in addition to the touchscreen. In comparison to the ones in the market, the Samsung Gear A Orbis Smartwatch solves the needs of the target market.

Change in marketing efforts with respect to the product life-cycle

At different stages of the product lifecycle, different marketing efforts will be utilized as there will be difference in demand for the product. Below is a graphical representation of the product lifecycle

Introduction

At this stage the product is so new to the market; little is known about it. There is are intense marketing efforts basically for creation of awareness of the product so that there is demand for it.

Growth

This is the stage where the product has found recognition in the market and is experiencing positive returns and huge profits. Marketing efforts in this case are aimed at attracting more consumers to purchase the product so as to maximize returns. At this stage there are increasing returns.

Maturity

At maturity, the product has reached its highest point in terms of returns (Stark, 2011). The market is well informed about it and has purchased. Marketing efforts get lower as it is very unlikely for any more demand to be created.

Decline

This is the last stage is the product lifecycle. There is a decline in the sales as well as revenues realized from the sales. Marketing is not necessary at this point; the best decision is to phase out the product and introduce a new one.

Packaging

One of the most important things in marketing is packaging. You can manufacture a perfect product that is by all means perfect, but if you do not package the product right, it will fail. A good example of this would be Apple. Apple packages their products probably better than any other manufacturer. They are packaged so nice; you don’t want to throw away the package after you get your phone or whatever the product is up and running. If you don’t want to throw away the package because it seems too nice to throw away, I would say that’s a good sign the manufacturer did it right.

Pricing Strategy

According to Perrault, Cannon and McCarthy, price has many dimensions. Managers usually have many choices…They should administer their prices carefully because ultimately, customers must be willing to pay these prices (2014). When determining price, firms have a multitude of options. A firm must consider all options before settling on a final price. The options can be placed in one of two primary categories, cost-oriented or demand-oriented. Options found under the cost-oriented category include price markups, which are most widely used by retailers and wholesalers and are a method of wherein an additional amount is added to the cost of a product to arrive at the selling price; average-cost pricing, which is a method wherein a reasonable markup is added to the average cost of a product. The average cost is determined based on past records; types of cost and break even analysis, which is a method firms use to determine if they will cover all product cost with a specific price, in other words, break even. Options found under the demand-oriented category include marginal analysis, which is a method firms use to compare total cost against total revenue; price sensitivity, which is a means for firms to determine how its target market will respond to pricing based on the availability of substitute products, large ticket items, need versus want and switching fees; value in use pricing, a method wherein customers are shown how a product adds value and or results in an overall savings; reference pricing, the price a consumer expects to pay for a product, psychological pricing wherein firms set prices just below a whole number, i.e. $14.99 versus $15.00 or prices that end in certain numbers, as studies show said prices are more appealing to consumers and demand-backward pricing, wherein producers first set a reasonable consumer price and then work backwards to arrive at the price a producer should charge.

In most instances, under cost-oriented pricing methods, prices are set blindly with firms basically hoping consumers will purchase the product. Under demand-oriented pricing methods, prices are set based on a consumer’s desire for a product. The price may be set lower to encourage purchasing if the demand is low. However, in contrast, the price may be set higher is the demand is high. Both cost-oriented and demand-oriented methods should be taken in consideration to not only determine the most suitable price but also the price that will be most profitable to a firm.

As the Gear-A Smart watch is not only similar to other Samsung products but also to products sold by competitors, it would be most appropriate for Samsung to use the value in use pricing. Samsung must show consumers how the Gear-A watch will add value by focusing on features, wireless charging, car and TV remote, etc. not offered by older products or the competitors. Although there are many bells and whistles, to remain appealing to a larger target market and to compete with Moto’s 360 which cost approximately $250.00 the launch price will be set at $279.00.

Channels of Distribution

“Ideally, all of the members of a channel system should have a shared product-market commitment—with all members focusing on the same target market at the end of the channel and sharing the various marketing functions in appropriate ways” (Perrault, Cannon and McCarthy, 2014). Unfortunately, this is not always the case, as firms can sometimes choose their interests over the producers.

Currently Samsung’s distribution channel consists of retailers, such as AT&T, T-Mobile and Sprint, wholesalers, such as Costco and online firms such as Amazon. Partners such as AT&T, T-Mobile and Sprint add value as each establishment offer on-site representatives who are knowledgeable, able to answer questions and discuss the product’s pros and cons. In addition, minimal advertising is needed as consumers usually turn to these firms to solve specific needs. Costco on the other hand, while also offering on site representatives, the market is less specific. Consumers rarely turn to Costco to fulfill their needs for cellular phones or smart devices. Amazon, who does not offer any personal assistance, does offer convenience, as consumers do not have to leave their home to purchase product, and possibly lower pricing. The various distribution channels have proved successful for Samsung; as a result Samsung will not adjust its current distribution channels.

There are many different manufacturers of electronic out there and most of them develop and distribute quality products. Many of the end users will argue what they think is the best product out there. No one manufacturer will satisfy all end users and have the market cornered. Samsung may not be industry innovators when it comes to smart phones, they do however put out one the highest quality products on the market with unbeatable customer service. In many consumers’ eyes, customer service makes all the difference in the world.

Reference

Kotler, P. & Kevin, L. (2009). A framework for marketing management. Upper Saddle River, New Jersey: Pearson Prentice Hall