When was the last time we heard a cult and a mass concentrated product compete for the top spot in the same industry? The hard truth is there is only room for one brand in the number one spot. Welcome to the smartphone universe .This industry is dominated by two giant companies that is Apple and Samsung. Even though they compete in other consumer electronics divisions like the tablet, pc and wearable gears, their smartphone rivalry is one that has been grabbing the news for all kinds of reasons.
Segmenting is identifying meaningfully different group of customers and breaking them down according to their response towards the marketing mix of companies. The apple segmentation follows the depth strategy where its motto is to serve one segment well which it is successfully doing for years. The iPhone mainly caters to business professionals, young adults and students who are in the middle and upper income category. Apple stores selling iPhones are strategically located in highly populated cities around the world like New York and London where the life style of the target audience is a posh one. Purpose of business is to create customers (Forbes.com, 2016) , which is exactly what Samsung is doing with its smartphones. These are segmented into many categories that appeal to all income consumers from premium to lower along with all age groups and professions according to their needs. This phenomenon is known as tailored strategy.
Targeting:- Be sure you positively identify your target before you pull the trigger and that has been apple’s mantra since the 2000’s(A-Z Quotes, 2016). They have created their own niche market where they have a cult like following. Their customer retention rate is 90% according to a Morgan Stanley Research study carried out in 2015, significantly higher than its competitors (BetaNews, 2015). Samsung targets the mass, markets from a smartphone for school girls to a smart phone for a tech savvy enthusiast or a professional. Samsung follows “all are my customers” motto where they face stiff competition from different segments but are leaders in the low and medium cost smartphone. Thriving mainly in the developing nations, they focus on acquiring more customers through their strategy. This segment has huge potential as smartphone sales are projected to grow in the forthcoming future.
Positioning is what the company wants their customers to remember them for and apple has created such a brand loyalty which companies can only dream of. Such a brand loyalty can only work in combination with a great product, and that’s the balancing act that Apple seems to get right time and again. Their view of making either the best or nothing is working quite well for them as they were recognised as the most valuable brand (Forbes.com, 2016). They are also the most profitable smartphone company claiming 92% of the profit share of the industry (Richter, 2015).
Photo Credit: [Statista, 2016]
Samsung on the hand are positioning themselves as more customer centric by providing different quality products according to their needs. They are competing with apple by introducing the galaxy series and are also industry leaders in the other segments. Samsung also has the largest market share proving their segmentation targeting and positioning strategy is also a successful one. Both the strategies are effective in their own right which is why both these giants are vying for the top spot. According to the information stated, Samsung is better poised to grow over period of time since there is a growth in handsets purchased every year where the market share acquiring strategy will prove stronger than the customer retention. But as per the current scenario both are winners while certain other companies are also trying to make their way back up.
A-Z Quotes. (2016). Tom Flynn Quote. [online] Available at: http://www.azquotes.com/quote/932957 [Accessed 11 Apr. 2016].
BetaNews. (2015). Apple has brand loyalty that most companies can only dream of. [online] Available at: http://betanews.com/2015/04/09/apple-has-brand-loyalty-that-most-companies-can-only-dream-of/ [Accessed 11 Apr. 2016].
Forbes.com. (2016). Forbes Welcome. [online] Available at: http://www.forbes.com/2006/06/30/jack-trout-on-marketing-cx_jt_0703drucker.html [Accessed 11 Apr. 2016].
Forbes.com. (2016). Forbes Welcome. [online] Available at: http://www.forbes.com/powerful-brands/list/#tab:rank [Accessed 9 Apr. 2016].
Richter, F. (2015). Infographic: Apple Claims 92% of Global Smartphone Profits. [online] Statista Infographics. Available at: https://www.statista.com/chart/4029/smartphone-profit-share/ [Accessed 11 Apr. 2016].
Statista. (2016). Global smartphone market share by vendor 2009-2015 | Statistic. [online] Available at: http://www.statista.com/statistics/271496/global-market-share-held-by-smartphone-vendors-since-4th-quarter-2009/ [Accessed 11 Apr. 2016].