Samsung will next month launch (arguably) its most important phone to date, the Galaxy S8, as it looks to move consumer’s minds away from the widely-reported debacle of the Note 7, towards a plethora of new features it hopes will propel the brand to become the king of the smartphones.
When Samsung was forced to recall its Galaxy Note 7 last autumn after some of the devices caught fire due to a fault with the battery, the news was splashed across media outlets with the force of a hurricane. The electronics company was forced to stop production on the model, issue a product recall in October and send fire-resistant boxes to customers.
Following the chaos, Samsung took out full page ads to apologise for the incident in The Wall Street Journal, The New York Times, and The Washington Post, penned by Samsung Electronics North America president and chief executive, Gregory Lee.
Recalling the device was costly. Operating profit fell 30%, to $4.57bn, while Samsung's mobile division saw operating profit plummet by 96% compared to the year before. The Note 7 disaster cost Samsung 13.5% of its market share, which now stands at about 20% of all smartphones sold, according to IDC.
Such alarming figures should, on paper, have spelled disaster for the brand but paradoxically things on the sales front began to look up. The results of Samsung’s fourth quarter were some of the most pleasing to date. It reported a 50% year-on-year increase in operating profits, albeit it driven by strong growth of its memory chips and panel display businesses.
But the fact that its brand image wasn’t completely shattered following the incident is a positive starting point for the company.
“Following news of its product recall, Samsung’s Impression score (whether you have a positive impression of a brand) declined by 15 points,” said Russell Feldman, director of digital, media, and technology at YouGov. “Since that time, it has worked to regain trust and its overall Impression score has begun to recover, though it is yet to reach pre-recall levels.”
“While the public were very aware of the story, our data indicates that Samsung customers were not as fretful as one may expect. Indeed, Samsung’s Satisfaction score (whether you are a satisfied customer of a brand) is in more or less the same position as it was pre-scandal. Even its Impression score among this group – which did decrease by 10 points – has now fully recovered.”
Though the brand may have work to do to “win over some consumers that are still hesitant”, Feldman added that it can be confident its customer base remains strong as it launches the new model.
In anticipation of the Galaxy S8's arrival, Samsung’s January global TV advertising campaign focused on quality and the thorough nature of its testing process comprising a new 8-point battery check in an attempt to reassure consumers that it has taken extensive measures to ensure there isn’t a repeat performance.
Since then it has dialled back on safety messages and at an event unveiling the features of the handset on Wednesday (29 March), Samsung took an unprecedented marketing move of offering a three-month refund policy for those fans who buy the Galaxy S8. A strategy Ahmad Badr, strategy director at Siegel+Gale described as “a smart and bold promotional tactic to dissipate any fears on product malfunctions".
Feature wise, something Samsung will no doubt look to push hard in its marketing is the brand’s new smart voice assistant Bixby, launched to rival Apple’s Siri and Google Assistant. Setting Bixby apart from its competitors is that it is has “contextually aware” capabilities that enable it to offer personalised help based on what it continues to learn about the user’s interests, situation and location.
"Samsung is making all the right noises by emphasising the safety checks the phones have gone through," Joseph Evans, analyst at Enders. "The competitive environment it's launching into is also helpful. Most Android handsets this year have been pretty generic, but the S8 stands out, taking the small bezel trend to its logical conclusion months before Apple is likely to. This will outweigh the brand damage from the Note 7 fiasco."
To chime with the unveiling of the new handset, Samsung this week launched a new TV ad for the Gear VR featuring an ostrich that tries to fly, and succeeds, thanks to the brand's VR headset.
“Samsung has done all the right things to keep its reputation in check," added Badr. "The stellar end-of-year performance results of 2016 helped portray the brand in good health despite the Note 7 disaster. Sustaining that momentum means there is no room for mistakes anymore – and Samsung know this too well."
It's a sentiment that Evans echoed. "The one area of concern is that this phone has to be totally scandal-free, or Samsung's ability to paint it as a one-off will evaporate. People will be looking hard for any flaws, and any mass product is susceptible to unforeseen issues."
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Presently, Apple and Samsung are seen as the largest manufactures of Smartphones across the world.
Earlier, the mobile phone market was ruled by companies like Nokia and Motorola, Apple took over the market when it launched ‘iPhone’ in 2007. The product became actually popular among users, having large and multi-touch user interface.
Apple continued on dominating the Smartphone market within the years; however Samsung introducing Samsung galaxy series in 2013 brought increased competition for it. It was Samsung’s massive advertising coupled with unique Android features that the Samsung galaxy has overtaken the iPhone to become the most popular Smartphone brand in the world.
This aggressive competition between these two tech giants has resulted in endless court battles.
Samsung took to Social Media to troll Apple:
In 2010, Steve Job well stated that “No one is ever going to buy a big phone”– and Samsung can hardly hold its behavior.
By using this quote, in which the image also says “Guess who surprised themselves and changed their minds”. Then they promote the Galaxy Note 4 with the hashtag #MoreThanBig.
This case study here is looking at the competitive marketing strategies used by each of these names and what they need to step ahead from their rivalry position in future.
Stats & Facts
- Samsung accounted for 37% of smartphone sales and Apple 29% in May 2016.
- Samsung Galaxy S7/S7 Edge accounting for 16% of sales and the iPhone 6s/6s Plus at 14.6%.
- Apple rocked out Samsung by selling 74.8 million iPhones, leaving behind Samsung’s 73 million Smartphones sales in 2015.
- Apple doesn’t use Twitter accounts, Facebook profiles, or indeed have a blog.
- Samsung makes use of all major social media channels, celebrity endorsements, and all other good & effective marketing strategies.
Apple is the dominating brand in the US market and Samsung holds the lead globally. There is some kind of peculiarity between the Marketing Strategies of both the brands. These are:
Innovation & Technology
Apple is broadly considered as a great innovator in the smartphone industry. It is famous for beautiful designs and new applications.
In comparison, Samsung is viewed as a follower for a long time. Since the launch of Galaxy S4, Samsung has considered Apple’s innovative design of the iPhone as “not so stunning”, and continues to be a notable competitor.
Winner: It is without a doubt that Apple leads in innovation.
Social Media Presence
Apple has a strange strategy when it comes to brand promotion. It has a minimalist presence on social media. It promotes through TVCs.
Samsung, meanwhile, is present on an array of social media channels like YouTube, Twitter, and Facebook pages for Samsung Mobile, Samsung TV, and more.
Samsung has also connected with major apps and platforms to target audience with social campaigns.
Samsung India has launched a nationwide television and digital campaign showcasing its initiative to take customer service to the doorsteps of customers in the rural area. Conceptualized by Cheil India, the campaign film is called #SamsungCares.
The advertisement called as Samsung Cares has been a hit in social media, with the YouTube video reaping more than 64 million views currently.
Winner: Needless to say, Samsung wins.
Apple has launched online advertisement campaigns to reach the users. The iPhone website has clean, clear and witty interface.
The iPhone advertisement of Apple is similar, always with white background, exotically alluring to the users. And, Apple is never hesitating to highlight the advantages of the products to the target audience.
Similarly, Samsung is giving importance on advertisement of Galaxy S. It promotes mobile phones- bringing a dark blue interface in contrast to the white background brought by Apple. Galaxy S is promoted as somewhat vibrant, fast and thinnest mobile phone and the advantages embraced are explained clearly.
Winner: There is a tie between Apple and Samsung.
Apple launched ‘Your Verse’ to highlight how different people use ipad to do things incredibly and in their own way. This campaign launched in 2014 became more of a story of people using ipad instead of the product itself.
Samsung launched its own campaign, ‘Incredible Art Piece’. This campaign was expressly designed to promote Galaxy Note pen style. This campaign itself became a Guinness World Book entry with the record of maximum number of artists working on a single art work.
It highlights the basic difference in the approach of both the brands. While Apple’s epicenter lies around how people use its products to make a difference to their life, Samsung emphasizes and advertises its features.
Winner: Talking of advertising, both comes as a winner as the purpose of the strategies i.e. Customer Engagement is achieved.
Public Relations and Publicity
Apple is using publicity for free and yet powerful way to interact with customers. In case of Apple, when more and more people are seen having and iPhone, other individuals get compelled to have the one; this is known as halo effect.
In contrast, Samsung is using Social Media such as Facebook to promote its products and all possible channels or marketing.
Winner: The winner is Apple as its effect is powerful that influence customer.
Viral Video Marketing
It got started in 2012 when Samsung brought the campaign ‘The Next Big Thing is Already Here’ to promote their new smartphone series, Galaxy S II.
In the ad, the company poked fun at Apple customers. The ad not only teased iPhone users with lines like “Why don’t you guys just get 4G phones?” but also took the chance to feature their larger screens.
In the episode in this competition is another dig at Apple; Samsung’s Grad Pool Party ad was released in May 2013 to promote their latest smartphone, Galaxy S4.
That act helped Samsung to jump-start market share, and proved to become a viral video content powerhouse.
Samsung has increased its video efforts by over 360% in the past 5 years; on the contrary, Apple has only leveraged it by 5.8% campaigns a year, within the recent 5 years.
Winner: Samsung is winning on the pure scale of its marketing efforts.
Apple may win at innovation & publicity but when it comes to marketing, Samsung prioritize complete entertainment.
Samsung believes in its value and adores the power of a celebrity.
Samsung made sure its product was front and center at the Oscars. Millions of viewers see host Ellen DeGeneres taking selfies with guest stars using a Samsung phone.
The brand partnered with famous music icon JayZ for his ‘Magna Carta Holy Grail’ album, and teamed up with Usherfor product placements in his ‘Looking for Myself’ music video.
Apple also generated the buzz among the music industry for procuring ‘Beats’ by Dr. Drebut it felt to be a little late.
Winner: Samsung for keeping effective entertainment value.
Apple and Samsung keep on experimenting bringing various competitiveness strategies, such as new product launch, major innovations, mockups of the rival’s offer, product line extensions, aggressive advertising campaigns as well as lawsuits.
There are differences between these two brands as they adopt several techniques to reach the audience in their market effectively.
Apple is a leader in the innovation and Samsung is a strong competitor to it.
Samsung uses prompting strategies by lowering the prices, making it more affordable for customers.
Thus, to keep up with their existing positions and to become a declared leader, both of the brands need to have effective marketing strategies.
“I will spend my last dying breath if I need to, and I will spend every penny of Apple’s $40 billion in the bank, to right this wrong. I’m going to destroy Android, because it’s a stolen product. I’m willing to go thermonuclear war on this.”Steve Jobs, CEO of Apple, 2010
“Smartphones, TV’s and other key IT products are entering a slow growth phase and our rivals are changing value chains by introducing new technology and business models.”Kwon Oh-hyun, Samsung Vice Chairman
“Samsung is doing a lot of things to prove they are innovative and therefore, can experiment and learn from their experiences. Apple is known for innovation and don’t have to prove this by using by social media platforms. They have to make sure to keep their status as a quality leader and therefore, cannot experiment as much as Samsung. So they lay back.”Rémon Elsten, Vice-President of the Swiss Contact Center Association
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