Assignment on Samsung Mobiles

Samsung Electronics Group is a South Korean multinational conglomerate company headquartered in Samsung Town, Seoul. It comprises numerous subsidiaries and affiliated businesses, most of them united under the Samsung brand, and is the largest South Korean chaebol.

Notable Samsung industrial subsidiaries include Samsun (the world’s largest information technology company measured by 2012 revenues), Samsung Heavy Industries (the world’s second-largest shipbuilder measured by 2010 revenues), Samsung Engineering and Samsung C&T (respectively the world’s 35th- and 72nd-largest construction companies), and Samsung Techwin (a weapons technology and optoelectronics manufacturer). Other notable subsidiaries include Samsung Life Insurance (the world’s 14th-largest life insurance company), Samsung Everland(operator of Everland Resort, the oldest theme park in South Korea) and Cheil Worldwide (the world’s 19th-largest advertising agency measured by 2010 revenues).

Samsung produces around a fifth of South Korea’s total exports and its revenues are larger than many countries’ GDP; in 2006, it would have been the world’s 35th-largest economy. The company has a powerful influence on South Korea’s economic development, politics, media and culture, and has been a major driving force behind the “Miracle on the Han River”.

Samsung mobile phones have created a big demand in the market. There have been a lot of Samsung cell phones which have sustained in the market. For instance, we will concentrate on the latest models like Samsung S, Samsung S II and Samsung S III.

The Law of Demand

The law of demand states that, “ Other factors remaining the same, the demand for a product increases if the price falls and decreases if the price rises.”

This law operates when the commodity’s price changes and all other prices and conditions do not change.

The main assumptions are:

• Habits, tastes and fashions remain constant.
• Money, income of the consumer does not change.
• Prices of other goods remain constant.
• The commodity in question has no substitute or is not in competition by other goods. • The commodity is a normal good and has no prestige or status value. • People do not expect changes in the price.

• Price is independent and demand is dependent.

The graph shows that as price increases from Re.1 to Rs.5, the quantity decreases from 50 to 10.

Innumerable factors and circumstances could affect a buyer’s willingness or ability to buy a good. Some of the more common factors are:

Good’s own price: The basic demand relationship is between potential prices of a good and the quantities that would be purchased at those prices. Generally the relationship is negative meaning that an increase in price will induce a decrease in the quantity demanded. This negative relationship is embodied in the downward slope of the consumer demand curve. The assumption of a negative relationship is reasonable and intuitive. If the price of a new novel is high, a person might decide to borrow the book from the public library rather than buy it. Personal Disposable Income: In most cases, the more disposable income (income after tax and receipt of benefits) you have the more likely you are to buy.

Tastes or preferences: The greater the desire to own a good the more likely you are to buy the good There is a basic distinction between desire and demand. Desire is a measure of the willingness to buy a good based on its intrinsic qualities. Demand is the willingness and ability to put one’s desires into effect. It is assumed that tastes and preferences are relatively constant. Consumer expectations about future prices and income: If a consumer believes that the price of the good will be higher in the future he is more likely to purchase the good now. If the consumer expects that his income will be higher in the future the consumer may buy the good now. Population: If the population grows this means that demand will also increase. Nature of the good: If the good is a basic commodity, it will lead to a higher demand.

The Law of Supply

The law of supply states that, “ other factors remaining the same, The supply of a product increases when price rises and decreases when price falls.

The law of supply is from the producers’ point of view. If the price increases then intend to increase the supply for more and more profits.

The supply is the availability of a product in the market depending on its demand.

The graph shows us that as the price increases from Re.1 to Rs.5 , the supply also increases from 10 to 50 units.

Market Mechanism

Market mechanism or market forces are nothing but the forces of demand and supply which affect the price of a product.

For example, If the demand increases and the supply is short, the price of a product increases because its value increases in the market.

Similarly, if the demand is constant and supply increases, there are not much consumers to buy the product, the price of that product decreases to promote the sales of that product.

In a monopolistic market, the prices are determined by the market forces and all the firms are price takers.

Market forces affecting Samsung Cell Phones

For instance, we are studying three latest models of Samsung namely Samsung Galaxy S, Samsung Galaxy S II and Samsung Galaxy S III.

Samsung Galaxy S was launched with a price of approximately Rs. 18000,and it created moderate demand in the Indian market because of homogenous product by the competitors like LG, Sony etc in the monopolistic market. Because of the competitors introducing their products with the same features at lower prices, the demand for this product started decreasing. For e.g., LG nexus 7

Then Samsung Galaxy S II was launched with a price of 25000, it had a lot of special and latest features which other competitors did not have, thus demand for this product increased, therefore, supply also increased. With increased supply and competitors entering the market with the same specifications of the product in the market, the demand decreased in the market. Therefore, prices fell and is now priced at Rs. 22000 in the market.

Then Samsung Galaxy S III was launched, which has been rated as the best android phone at the time of its launch. This product created huge demand in the market, because this phone had all the possible and latest features at an optimum price which other companies and had not introduced. It had beaten the demand for iphone 4 because having almost the same features like iphone 4, it was priced at Rs. 38000 whereas, iphone 4 was priced at Rs. 44000 at the time of its launch.

Some facts about Samsung Galaxy S III

Samsung’s Galaxy S3 overtook Apple’s iPhone 4S in the third quarter to give the South Korean firm the world’s best-selling smartphone model for the first time ever

“The Galaxy S3 captured an impressive 11 percent share of all smartphones shipped globally and it has become the world’s best-selling smartphone model for the first time ever,”

Positive feedback was given regarding battery life, ease of use, and of course the speed and interface that comes with Android Ice Cream Sandwich 4.0. Samsung in the year 2012, displaced Apple’s iPhone as the best-selling smartphone in the world. As per the data released by market research firm Strategy Analytics, Samsung’s latest smartphone Galaxy S III aced as the world’s top-selling smartphone model in the third quarter ended year 2012.Samsung, also announced that Galaxy S III sales reached the 30 million unit milestone and according to market research alone, 18M of those were shipped in Q3 2012. For the same period, Apple shipped around 16.2M iPhone 4S handsets. It’s was after this incident, Samsung made Apple slipping into the No.2 spot as the top smartphone vendor for the Q312 period. Samsung shipped 18.0 million units of Galaxy S3 smartphone model worldwide during Q312 and it captured 11 percent share of all smartphones shipped globally. Whereas, for the same period, Apple shipped around 16.2M iPhone 4S units worldwide, grabbing second place slot. Samsung’s Galaxy S3 is extremely popular among consumers across North America, Europe and Asia.

Samsung said today that they aim to sell more than million Galaxy S III smartphones by July. They said that they should achieve a 10 million sales record within two months of the product launch. Sadly, the company are struggling to create the smartphones fast enough, due to component shortages. Shin Jong-Kyuan, the president of mobile communications business said that it has been tough to keep up with demand. The problems with component shortages mean that second quarter smartphone sales may be lower than expected. Shin said that they should resolve the supply issues with mobile components in the next week.

He said “Despite the tough economic situation in Europe and problems with supplying components for the Galaxy S III, the second-quarter earnings will be better than the first quarter.” Exact sales figures have not been made public, as Samsung do not disclose this information to consumers. Samsung said that the S III will be released by almost 300 mobile carried across the globe by the end of July. Apple should have a new iPhone available in the third quarter which will raise the stakes. Samsung have overtaken Nokia as the world’s largest mobile phone maker in 2001 and are battling Apple for the position. Samsung aim to double their smartphone sales this year to almost 200 million units. Despite the fact that the Galaxy S III supply is rather low at the moment, Samsung’s mobile boss JK Shin predicts that Galaxy S III sales will exceed 10 million in July.

These facts tell us that due to huge demand, the supply was short which did not let thr price of the product go down, but now gradually as the competitors entered the market they brought in better cell phones at lower prices, for example, Micromax, LG, Sony etc., this has led to the decrease in price of Samsung Galazy S III but still people are preferring Samsung thnan iphone because of reduced price with almost the same features. This shows that reduced prices increase the demand for the product in the market and higher prices increase the supply.

Innovations

1. Samsung Galaxy S: The Samsung Galaxy S is an Android smartphone that was announced by Samsung in March 2010. It features a 1 GHz ARM “Hummingbird” processor, 8–16 GB internal flash memory, a 4 inches (10 centimetres) 480×800 pixel Super AMOLED capacitive touchscreen display, Wi-Fi connectivity, a 5-megapixel camera with a maximum resolution of 2560×1920 and, on select models, a front-facing 0.3 MP VGA camera (640×480). The base version of the phone, the GT-I9000, was specialized for each of the U.S. carriers, and released as the Epic 4G, Vibrant, Captivate, Fascinate, and Mesmerize. The name “Galaxy S” is used today for various models of Samsung phones that are quite different from the original Galaxy S, such as the Galaxy S Blaze, Galaxy S Aviator, or Samsung Galaxy S Relay 4G. These are akin to spin-offs, rather than phones in the main “Galaxy S” series.

The entry of this product in the market created great demand for it but there were other cell phones also of the competitors in the market like in a monopolistic market, where there is homogenous product, therefore the demand was at a moderate level.

It was initially priced at approximately Rs. 18000, but gradually, when the supply was more and demand was less than supply, the price reduced for more consumption and thus the market forces influenced the price of the product.

To fulfill the wants and needs of the customers , Samsung S II was introduced in the market an an innovative strategy by Samsung.

2. Samsung Galaxy s II : Samsung unveiled the S II on 13 February 2011 at the Mobile World Congress[7] It was one of the slimmest smartphones of the time, mostly 8.49 mm thick, except for two small bulges which take the maximum thickness of the phone to 9.91 mm. The Samsung Galaxy S II is a touchscreen-enabled, slate-format Android smartphone designed, developed, and marketed bySamsung Electronics. It sees additional software features, expanded hardware, and a redesigned physique than its predecessor, the Samsung Galaxy S, and was succeeded by the Samsung Galaxy S III in May 2012.[5] The device was launched with Android 2.3 “Gingerbread”, updates to Android 4.0.4 “Ice Cream Sandwich”,[6] and will update to Android 4.1 “Jelly Bean”. The user-replaceable battery gives up to ten hours of heavy usage, or two days of lighter usage.[13] According to Samsung, the Galaxy S II is capable of providing 9 hours of talk time on 3G and 18.3 hours on 2G.

This product created great demand in the market, was priced at Rs. 25000 but because of homogenous product in the monopolistic market and increased supply than demand, the price fell down to Rs. 22000. To increase the demand for its products, Samsung took another Innovation Strategy and introduced Samsung Galaxy S III in the market.

3. Samsung Galaxy S III : The Samsung Galaxy S III is a multi-touch, slate-format smartphone running the Android operating system. t sees additional software features, expanded hardware, and a redesigned physique from its predecessor, the Samsung Galaxy S II. The S III employs an intelligent personal assistant (S Voice), eye-tracking ability, increased storage, and a wireless chargingoption. Depending on country, the 4.8-inch (120 mm) smartphone comes with different processors and RAM capacity, and 4G LTE support.[10] The device was launched with Android 4.0.4 “Ice Cream Sandwich”, and can be updated to Android 4.1 “Jelly Bean”.

Following an eighteen-month development phase, Samsung unveiled the S III on 3 May 2012 in London.[11] The device was released in 28 European and Middle Eastern countries on 29 May 2012, before being progressively released in other major markets in June 2012. Prior to release, 9 million pre-orders were placed by more than 100 carriers globally.[12] The S III was released by approximately 300 carriers in nearly 150 countries at the end of July 2012.[4] More than 20 million units of the S III were sold within the first 100 days of release.[13] Samsung has since sold more than 30 million devices.[5]

Due to overwhelming demand and a manufacturing problem with the blue version of the phone,[14] there was an extensive shortage of the S III, especially in the United States. Nevertheless, the S III was well-received commercially and critically, with some technology commentators touting it as the “iPhone killer”.[15] In September 2012, TechRadar ranked it as the No. 1 handset in its constantly updated list of the 20 best mobile phones,[16] while Stuff magazine likewise ranked it at No. 1 in its list of 10 best smartphones in May 2012.

The handset also won the “European Mobile Phone of 2012–13” award from the European Imaging and Sound Association,[18] as well as T3 magazine’s “Phone of the Year” award for 2012.[19] It played a major role in boosting Samsung’s record operating profit during the second quarter of 2012.[20] As of November 2012, the Galaxy S III is part of a high-profile lawsuit between Samsung and Apple.[21] In November 2012, research firm Strategy Analytics announced that the Galaxy S III had overtaken the Apple iPhone 4S to become the world’s best-selling smartphone model in Q3 2012.[22]

Due to huge demand and short supply, the innovation was a success, the prices did not go down and the company made huge profits. This innovation involved better specifications, shape and design than the last model.

Thus innovation is a great tool to develop and expand the product.