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Samsung – future products and customers demand forming

Recently we wrote about market strategy of Samsung. Telling about future products, we would like to pay attention to some solutions concerning forming of customers demand. This understanding allows us to make conclusions about new products of the company and define the main direction of the product line. First let’s see the table, where products which would be available in the third quarter are launched.

By Samsung’s request the table was removed

You can see that most products in the table have only inner names. The company is so active on the market that sometimes it changes a phone index just before launching the product. For example, P410 was indexed as P500 not long time ago. According to marketing managers improved camera (VGS resolution) is a considerable difference (compared to P400) and it allows giving the model a different index. Now it is not obvious how the model which was known as P500 would be called. .

We can mention that for the first time the company is going to grab a part of the business segment. According to Samsung, the company is not very successful in this segment now, but after launching of the phone with bluetooth support, it plans to change the situation. We are not sure that it would be really so, because only presence of this technology in the phone couldn’t turn it in the business model. Presence of bluetooth in other fashion models (from other manufacturers) could be an evident (for example, Motorola V600).

The company selected several new directions basing on the modern market trends. Firstly, it introduced a model with a color screen in the middle class (Samsung C100). It’s interesting that Samsung quoted Gartner (December 2002), which said that mobile phones with color displays would stimulate growth of the secondary market, though increasing competition could reduce profits from the middle class products more than manufacturers expected. This statement partly explains why the company decided to charge so low price for this model (a retail price is about 145-150 Euro). This price level allows the company to be out of competition and increase market share. Now the company only partly satisfies the demand.

The company also quoted (from the same Gartner’s report) the brightest market trends: color screen, compactness, new brands, camera, integrated functions (polyphony, radio and others). Such technologies as remote synchronization, bluetooth, MMS are absent. So, Samsung was not in a hurry to implement them. The following chart of user preferences definitely demonstrates that the phone is mostly used for calls or for SMS messages. Others capabilities are not so frequently used.

Dividing the information by age groups shows that young people often use their phone to play games. The company offers its niche solution – X400. The main advantage of this phone is that it is based on the standard platform, differences from other models are not considerable and mostly concern design features. To justify the name “gaming phone” the company applied a special keys combination, united them in some kind of joystick. This model was appeared as an answer to developing gaming market segment. The company didn’t want to risk, putting up money in developments of a real gaming phone, and showed a passing solution. On the other hand, Samsung was always successful in launching well-done niche phones, which separately were not actively sold, but on the whole gave rather large market share.

Remember such models as A400 and T500. These are first phones aimed to women. They are differed in design, had several particular functions such as biocycle and weight counters. Introducing these models, the company has tried to form a new Premium Women Market. The ways of promotion of these models are also different from mass products promotion actions. The company used new distribution channels of the phones (not only specialized shops and operators). Samsung holds advertising campaigns together with other brands dealing with women commodities (clothes, jewelry). The phone turns from the usual thing to a fashion accessory and it’s obvious that it is necessary to change its sales strategy. Till the end of the year the company will introduce a new women phone – T700, which has almost the same features as T500 but the other design.

The methodology the company used to select users of these phones is very interesting. Percents on the scheme relate to shares of all price segments on the market. For example, Gold segment, forms only 5% of total sales.

Now let’s speak about future models. One of them is P500 with an integrated VGA camera, which allows to use different effects and frames while shooting (the same capabilities has Panasonic GD87). The phone supports MMS. On the whole the phone is attractive and the main its advantage will be the price. It is expected that it would be rather low for the phone of this class.

The similar model P100 will be produced in the entry-level segment. The camera of this phone has lesser number of settings. The handset is equipped with a monochrome external display, not OLED.

The third model of this line is E700. It has the same capabilities as P500, but differs in internal antenna. It is the first phone of the company with such construction. E700 is positioned as a fashion phone by the company.