Figure 1: Samsung logo.
Samsung has an unfathomable item portfolio and its nearness is in a few diverse item classes. The brand picture driver for Samsung are the Samsung Smartphone’s, for example, the Samsung note series or the Samsung galaxy series.The main pricing factors that affect the pricing decisions are mainly the internal and the external factor, which as follows in figure 2.
Samsung reported 2015’s most recent leader models the Galaxy S6 and S6 Edge at Mobile World Congress in Barcelona on first March 2015. Samsung expects to capture its slipping offer in cell phone fragment and particularly premium cell phone section against Apple’s leader duo iPhone 6 and iPhone 6 Plus which pushed Apple in front of Samsung in Q4 2014 to wind up the biggest cell phone brand as far as piece of the pie and worth share all inclusive. Figure 3 shows the competition in the market.
The main aim of Samsung was to capture the price sensitive segment. Clients searching for top quality or service, for case, are generally less value delicate than prudent deal seekers. The level of sensitivity for a given item is referred to in financial aspects as elasticity of demand. Samsung said that it will be “adjusting” costs for the S6 and S6 Edge to keep up deals development, the organization said in the wake of reporting that net wage, barring minority interests, tumbled to 5.63 trillion won ($4.9 billion) in the three months finished June. That missed gauges and incited the greatest decrease in shares in four months.
Samsung has always been very particular in its pricing strategy. As the company always used a proper “skimming pricing” strategy to take over the market. As it is seen that when Samsung launches any superior phone models or any other products, it always prices then high to tap the upper segment of the society as it tries to project that particular product as an “article of snob appeal”. Thus with the passage of time it reduces its price to skim the whole market in the long run. In this way, the skimming system gets its name from skimming progressive layers of “cream,” or client fragments, as costs are brought down after some time.The main motive of Samsung has always been that if the fixed cost of the company goes high relative to variable cost, then they have always maximized the volume. The following figure 4 shows the general pricing methods that the company adopts:
Samsung has dispatched various cell phones focused at mid-range and low-end markets. It propelled the Galaxy A3 and A5 in China in November and the Galaxy E7 and E5 in India this month, in the $300-$400 value range. The organization has postponed the arrival of Tizen-run cell phones in India and Russia. Like Apple, Samsung models in open/prepaid markets, for example, India begins at a truly high retail ASP utilizing its image premium, plan, designing and bleeding edge specs. Galaxy S6 models have been estimated less expensive than iPhone 6 models at least by 10-15%, be that as it may, it gets fascinating what is going on at SKU level and the measure of premium being charged between various SKUs.
It’s crystal clear that Samsung is very prudent in the terms of pricing their product and hence it becomes one of the best options at times, available to the people.
So basically the memory premium charged over the base model of 16GB/32GB are as follows:
|Memory premium charged over base model (%)||64GB||128GB|
|Galaxy S6 Edge||10%||20%|
The price of the mobile phones are set according to the storage capacity and they are as follows:
|Galaxy S6 Edge||$942||$1038||$1134|