Part I: Preface.
Samsung mobile phone aims at the middle and high-end market in China, adopts market-oriented pricing, quality pricing, reputation pricing and other pricing strategies, and cooperates with corresponding marketing strategies to occupy a place in the middle and high-end market in China. Compared with Nokia and Motorola's two-pronged strategy of product and price, Samsung's mobile phone has crossed the swamp of price war and achieved remarkable results by constantly introducing new products to compete with competitors. This paper analyzes the pricing strategy of Samsung mobile phone in China market from the following five parts:
Environmental Analysis and Overall Strategy of Samsung Mobile Phone in China
The pricing strategy of Samsung mobile phone in China market (market-oriented method, quality pricing method)
Samsung's pricing strategy for new mobile phone products (skimming pricing)
Other marketing strategies related to pricing (channel strategy, brand strategy)
Advantages and disadvantages evaluation of pricing strategy
Part II: Environmental analysis and overall strategy of Samsung mobile phone in China.
Trend Analysis of China Mobile Phone Market
According to the latest statistics of Taiwan Province Zhonghua Zitong Technology Co., Ltd., the sales volume of mobile phones in China in the second quarter of 2004 dropped significantly compared with the first quarter, from17.4 million in the first quarter to16.45 million. Mobile phone sales revenue also dropped from 26.823 billion yuan in the first quarter to 25.354 billion yuan.
According to the statistics of the Ministry of Information Industry of China, the domestic mobile phone market is indeed declining rapidly. In March 2004, there were 7.978 million new mobile phone users in China. In April, the number of new users dropped to 5.445 million; Only 3.549 million in May. Compared with the previous data, even in May 2003, when SARS was raging, the number of new mobile phone users in China was as high as 4.339 million.
According to the statistics of CCID Consulting, a local research company in China, the mobile phone sales in China increased by 5 1.9% and 3 1.8% in 2006 and 2002 respectively. In 2003, it dropped to 18. 1%, and in 2004 it is expected to increase by only 15%.
The above data all mean that the myth of the rapid growth of the mobile phone market in China is about to burst, and the mobile phone market in China has entered a period of steady growth, or has entered a mature period from the growth period.
China Mobile Phone Sales Ranking
According to the data analysis of the Ministry of Information Industry, before 200 1, China's mobile phone market share was occupied by foreign brands such as Motorola, Nokia and Siemens for a long time. Since 2002, domestic brands Bird and TCL began to squeeze into the top five. The top five mobile phone sales in China in 2002 were:
Ranked brand sales
Unit: ten thousand
Motorola 1872.4
2 Nokia 1 134.74
3 waveguide 678.55
4TCL530.53
5 Siemens 29 1
In 2003, the mobile phone sales in China changed greatly. Domestic brand Bird mobile phone sales jumped to the first place, and Siemens, a veteran German mobile phone manufacturer, was replaced by Samsung mobile phone in South Korea, ranking tenth. Samsung mobile phone rose to the fifth place in China market by leaps and bounds.
Get a place in the competition
brand
Sales
market share
GSM sales
CDMA sales
1
wave guide
1,03 1.08
13.97%
1,002.2 1
28.87
2
Motorola Corp.
99 1.08
13.43%
799.05
192.03
three
Nokia (headquartered in Finland)
984.08
13.34%
969.62
14.46
four
TCL group co., ltd. (abbreviation of TCL Corporation)
652.53
8.84%
63 1.3 1
2 1.22
five
Orion belt
633.33
8.58%
437.98
195.35
In the statistics of the first half of 2004, Samsung mobile phone, Motorola and Nokia squeezed into the top three. In the first half of the year, the sales volume of mobile phones was 3.34 million, and the market share rose to 9.87%.
All kinds of data show that Samsung mobile phones have captured the market in China and successfully got a big cake. Although its market share is not as good as Nokia and Motorola, its strong rising stamina makes Nokia and Motorola become rivals, and Samsung's profit margin reaches 22%, which makes Samsung's profit greatly exceed other competitors. In contrast, the profit of Sony, a famous Japanese company, in one quarter is less than one third of that of Samsung. This shows that the victory of a commercial manufacturer, of course, is actually brought about by product pricing. In the next link, we will discuss the pricing of Samsung mobile phones.
Samsung's Background Analysis in China
Since the formal establishment of diplomatic relations between China and South Korea in 1992, Samsung Electronics invested and established Samsung Electronics Co., Ltd. (SEHZ) in Huizhou, China in August 1992. Since then, Samsung Electronics has continuously increased its investment and cooperation in China. By the end of 2002, its accumulated investment in China had reached US$ 2.6 billion, making it the largest Korean enterprise in China.
After the Asian financial crisis, Samsung gradually accumulated experience in the China market. The conclusion is that it is unprofitable for Samsung to produce and sell low-end products in China market, and it must turn to high-end household appliances with excellent quality. At the same time, we began to promote the digital management strategy-integrating digital technology into household appliances and vigorously expanding the market of new high-end digital products. This strategy is also in line with the transformation of headquarters to high-end market. Facts have proved that this strategy is very successful. 1999, Samsung Electronics turned losses into profits.
The sales of Samsung mobile phones in China are mainly GSM and CDMA. However, due to Samsung's late investment in the domestic mobile phone market, when the production and sales license of GSM mobile phones was divided by Nokia, Samsung GSM mobile phones could only enter the domestic market through import or smuggling. Of course, the smuggling is not done by Samsung, but by Samsung's regional agents. As the general agent of Samsung mobile phone in Greater China (including Taiwan, Hong Kong and mainland China), Shi, former chairman of the board of directors of International (0 143). HK), which was once detected in Guangdong as a major smuggling case involving tax evasion exceeding1040,000.
It was not until June 5438+1October 2, 2003 that Park Qingshi, the strategic planning department of Samsung Group, officially admitted that Samsung had obtained the domestic license of GSM mobile phone in a telephone interview with reporters. This means that Samsung has removed the main obstacles to directly manufacturing and selling mobile phones in the domestic market. After all the formalities are completed, Samsung will be able to produce mobile phones in Tianjin and distribute them directly to the mobile phone markets all over the country through its own sales channels.
The production of CDMA has obtained the sales license through the cooperation with Kejian, thus occupying 30% market share of CDMA in China.
Overall Strategy of Samsung Mobile Phone in China
The biggest change in Samsung's investment strategy in China came from Sang-hyun Lee, who proposed that China should become Samsung's market and brand center instead of manufacturing center. 2003 is the first year of implementing the new strategy. Samsung Electronics' domestic sales in China reached US$ 6.5 billion, accounting for two-thirds of China's total turnover, of which "digital strategy contributed a lot". Sang-hyun Lee agrees with two key words of 2 1 century put forward by Samsung President Lee Kun-hee: digital and China. Li Jianxi believes that in the 2nd/kloc-0th century, if you don't know China and figures, you will never become a first-class enterprise.
Strictly speaking, Samsung has encountered many restrictions in the mobile market in China, which makes it difficult for us to expand sales quickly. But Samsung's goal is to become the number one mobile phone supplier in the world, so it is more important for Samsung to strengthen the sales of high-end products and build brands than to sell more mobile phones.
In 2003, Samsung occupied a dominant position in CDMA telephone sales in China, and this situation will continue in 2004, but Samsung hopes to further expand its leading edge over competitors. Due to the rapid rise of local brands in China, which now accounts for 40% of the market, Samsung plans to release more mid-to high-end mobile phones for specific markets. At the same time, Samsung hopes to create the image of high-end products to attract consumers' attention. China market is expected to account for 15% of the company's global sales this year. Developing mid-to high-end mobile phones can be said to be the only way to increase Samsung's market share. When Samsung launched a low-end mobile phone, the market reaction did not meet our expectations. According to this experience, it is not easy for Samsung to swim down the market.
The third part: Samsung mobile phone pricing analysis.
Cost analysis of Samsung mobile phone
In the global IT industry downturn, Samsung Electronics' performance can be described as brilliant, which should be attributed to the diversified business strategy of Samsung Group. Although Samsung Group's enterprises have their own advantages, they can help each other. Take Samsung mobile phone as an example, it is equipped with LCD screen made by Samsung SDI, which greatly saves costs and expands profit space.
The hero who supports Samsung's electronic mobile phone business is Samsung SDI. Samsung SDI's mobile phone high-end STN LCD panel has the same effect as TFT-LCD, but the power consumption is less than half of the latter. More importantly, its price is 30% cheaper than that of TFT-LCD.
Driven by the product strategy of low cost and high price, Samsung's mobile phone business has achieved great success, which has made the market share of Samsung SDI mobile phone panel increase continuously. In the second quarter of 2002, it broke through 24% and became the leader in the mobile phone panel market.
Samsung Electronics has formed a complementary business structure among IT businesses in China, such as semiconductors, mobile phones, plasma and liquid crystal technologies, monitors, notebook computers, etc. All business departments can form a very organic cooperative relationship, and the distribution of the whole business is also very favorable. This plays an important role in the cost control of Samsung mobile phones.
Customer analysis of Samsung mobile phone
The success of Samsung mobile phone draws lessons from the failure of other products. As we all know, Samsung first entered the China market with ordinary household appliances such as televisions and refrigerators, and positioned itself in the low-end market. 1998, the sales volume of Samsung's washing machine factory in Suzhou more than doubled compared with 1997, reaching 32,000 sets, but it lost $265,438+million, five times that of 1997. 1999, the factory began to produce trendy high-end washing machines. In 2000, the sales volume reached 6,543,800+700,000 units, making a profit. From this incident, Samsung began to understand that the demand in China market is diversified, and the purchasing power of some people is rapidly increasing. In the big cities of China, millions of consumers can afford to spend money on quality and fashion.
After carefully analyzing the consumer market in China, Samsung has taken a high-end route in developing the mobile phone market. In Samsung's eyes, the target market is not all 65.438+03 billion Koreans, but 400 million Koreans with strong purchasing power, and 40 million to 60 million of these 400 million people have higher spending power than Koreans. Therefore, Samsung's mobile phone takes China consumers whose annual income is more than $3,500 as the most direct users, and finally targets young white-collar workers aged 22-35. Because these people have both spending power and courage to try new things, they are the main consumers of mobile phones. Moreover, these users can become the most loyal customers of Samsung mobile phones because of their stable income and certain economic strength. So Samsung has positioned the brand of mobile phones as high-end fashion.
Samsung chooses fashionable white-collar consumers as the consumption orientation of its products, not only because they have stable income and consumption psychology, but because these consumers represent the value orientation of China's future consumption to a great extent. Compared with other brands focusing on price wars, it is wise for Samsung to change its price strategy into a "value" strategy.
Analysis on the Competitive Advantage of Samsung Mobile Phone
The goal of Samsung Electronics in China is to achieve sales revenue of $654.38+0.4 billion in 2005 and $40 billion in 2065.438+00, which means that Samsung will achieve an average annual growth rate of 20% in the next seven years. Samsung has many advantages to achieve this goal:
As a company from South Korea, a close neighbor of China, Samsung can understand the culture of China more easily than European and American companies.
Samsung has a good management system;
Samsung Electronics' IT business in China has formed a complementary business structure, such as semiconductors, mobile phones, plasma and liquid crystal technologies, monitors and notebook computers. , and various business departments can form a very organic cooperative relationship, and the distribution of the whole business is also very favorable;
The top management of the Group paid great attention to China and got a lot of support.
Part IV: The pricing strategy of Samsung mobile phone in China.
Market-oriented pricing method
When making detailed pricing strategy, Samsung Electronics does not take product cost as the pricing basis, but is market-oriented. According to the information provided by the market, it estimates how much the target consumers are willing to spend to buy this product and determines its sales price.
Samsung Electronics has skillfully grasped the consumption characteristics of the mobile phone market in China. In China, what mobile phone consumers value is not how many advanced functions they have, but a series of seemingly important functions such as brand, status, fashion design, screen color and ringtone. In China, a mobile phone can even represent a person's status better than his clothes, which is why some people buy a 3000-yuan mobile phone with cheap worn-out shoes. Therefore, Samsung Electronics has made great efforts in the research and development of these aspects and adhered to the high-end route of products. When the price war of mobile phones in China is getting worse and worse, Nokia, Motorola and other mobile phone giants have to cut prices sharply, Samsung still keeps calm and insists on its market position in China. With a highly dangerous self-confidence attitude, it is 1/3 higher than similar mobile phones, emphasizing quality and high-end brand strategy, but it has been sought after by the market. Of course, Samsung also slightly reduced the price of some old models according to the competitive strategy of its peers, and also introduced several mid-range models around 1.500 yuan, which hindered the development of rival markets and achieved certain results, but it could not shake its position in the high-end market and continue to sell at high prices.
Quality-based pricing
Samsung mobile phone adheres to the strategy of high quality, explaining that the price is 30% higher than that of its peers because its products provide consumers with high added value. At the Boao Forum in 2004, Li, the top director of Samsung mobile phone in South Korea, said in response to a reporter's question about the quality of Samsung mobile phones: "We provide the best product quality in the world, and the most important thing is to pass our internal product reliability test, which is the most demanding test in the world. In a German media survey of mobile phones, in 2002, Samsung mobile phones were the lowest in repair rate. In fact, the media all over the world have reported the excellent quality of our products. Some media even reported that a 2-ton car was crushed or burned and soaked in the washing machine, and our mobile phone can still work. "
Samsung mobile phone was once accused as a "vase", which was repeatedly questioned by consumers because of quality problems, but this kind of remark can only exist in the history of the mid-1990s. Samsung Electronics is determined to burn these inferior products, and is bent on producing the best quality mobile phone, and named the product Any Call mobile phone, which means a mobile phone that can talk anytime and anywhere. Exquisite and fashionable design, advanced functions and emphasis on quality have become the connotation of any call.
Samsung Electronics has its own production equipment, not outsourcing. Before 1997, Samsung Electronics had to buy chips from Sony. However, since Sony was taken as a catch-up target, Samsung spared no expense to build its own strong R&D team, and learned from the Japanese modestly in technology, and finally broke through the technical threshold. Now Samsung has become the world's top technology innovation company in technology, including mobile phone technology. At present, in the global mobile phone market, the most beautiful and popular mobile phone recognized by consumers is not Sony but Samsung, which completely subverts the picture of Sony's dominance in the field of consumer electronics.
Now Samsung Electronics has advanced R&D capability and production technology that its peers have to admit. Samsung's CDMA technology ranks first in the world. While other manufacturers are developing 3G mobile phones, it has taken the lead in developing 4G, expecting to continue to lead in the future technical competition. In March 2004, Samsung Electronics announced that it would invest $3.3 billion in new product research and development worldwide this year. Samsung has long understood that it has become more important to hold technology patents in whose hands. What it is determined to seek is to take the fate of enterprises entering the market into its own hands. What impressed Wei Xin, the chairman of Founder Group, the most was: "Everything of Samsung is in pursuit of mastering its own intellectual property rights, and it is persistent. Without the technology they developed, Samsung will exchange capital for technology, which is not subject to anyone. " The huge investment in R&D has made many Samsung products number one in the world. Samsung Electronics spends more than $4 billion on R&D every year, and Samsung's patent applications rank among the top in the world for many years 10, which also dominates many industry standards. Samsung's goal is to be the strongest in the field of design business and play the role of technology leader, so Samsung Electronics has invested more than 65,438+00% in R&D in CDMA and GSM.
Its quality includes not only excellent technology, but also personalized service. None of the mobile phone manufacturers in the world can show sympathy to consumers like Samsung and provide personalized mobile phone designs that consumers deeply like. The first dual-screen mobile phone, eggshell design of T 108, chord bell, rotating shadow concept and female mobile phone concept are all really hot mobile phone products around us, which bring more factors and experiences of what is a fashionable mobile phone to consumers. Its pricing fully meets the needs of young, fashionable and tasteful consumer groups. Therefore, Samsung's world position in design is well deserved.
Samsung mobile phone takes its own technology as capital, and provides high-quality and personalized services when formulating high-priced strategies, which truly meets the needs of consumers, and will not passively lower its own price in order to increase sales, because price reduction will reduce the quality in most cases, and will also seriously affect the brand image and the pricing of products after listing.
Part V: The pricing strategy of new Samsung mobile phone products.
The new product of Samsung mobile phone has been priced off. The so-called skimming pricing refers to setting the price of the product at a higher level at the initial stage of the product life cycle in order to grab the maximum profit, just like skimming cream from fresh milk. This pricing method is well documented. Because Samsung is a market leader, it has the ability to formulate a premium strategy. Other followers or imitators can only adopt other strategies, such as medium price for quality products and general price for general quality products.
Samsung has a famous "sashimi" theory, which is to push the most advanced products to the market and put them on retail shelves before the market competition begins. In this way, you can earn the high price brought by the extra time difference. Samsung believes that as long as there is a market for two months at night, there is no competitive advantage, just like sashimi sold the next day. Therefore, it is inevitable for Samsung to get as much profit as possible from the newly listed products. When the products that follow the trend in the market come up, the price of Samsung will drop a lot, which is mainly affected by the product life cycle pricing. Generally, in order to maintain the high-end image, Samsung will lower its price and is rarely influenced by its competitors.
Part VI: Other strategies related to pricing.
channel management
Samsung, which entered the mobile phone market in China late, seems to be somewhat "backward" in channel strategy at present. Not only is it inferior to the supervisors and promoters of domestic manufacturers who have dozens or hundreds of their own provincial and municipal offices and tens of thousands of terminal stores in China, but it is even inferior to European and American manufacturers who have learned from domestic manufacturers and made many refinements in channel operation. Samsung's current channel strategy is still somewhat "primitive": it still focuses on product country underwriting, and the number of agents in the country, including GSM and CDMA mobile phones, does not exceed 10. The channel sales model of Samsung mobile phones is the agency system, and most of them are underwritten by model and region, that is, one or several models are only awarded to one or several agents for contract sales, and manufacturers set up offices to guide market work. Samsung mobile phones are authorized to be underwritten by Shenzhen whole network, Beijing Bailifeng, Shenzhen Ai Shide Telecom, Yingtai Digital and other companies.
In the early market competition, Samsung took a fancy to market share first and profit second. The key to ensure market share is the loyalty of agents to the brand; The core indicators of profit growth are the growth of shipments and the stability of prices. This has to increase the number of channels and improve the influence of channels at the same time, so adopting mode underwriting is a more effective way. Samsung adopts the "agency system" sales model, which will undoubtedly cultivate the brand loyalty of agents. It has played a great role in maintaining channel stability and market position. However, this mode of operation still has many disadvantages. Due to many factors, such as the difference in the delivery price of underwriters in different regions, "goods smuggling" has become the most troublesome problem for foreign manufacturers, which is extremely unfavorable to the stability of the market.
brand management
According to the list of global 100 brands published by Businessweek and Interbrand, a world-famous brand research company, Samsung Electronics is famous on the list, once again becoming the fastest growing company in the world, ranking 25th with 108 billion dollars. In the past three years, the brand value of Samsung has doubled at an alarming rate, from $5.2 billion of 20/kloc-0 to $0.8 billion of/kloc-0 in 2003. At the same time, the brand value ranking rose from 42 in 200 1 to 34 in 2002 and 25 in 2003.
The first element of Samsung's brand strategy is to have the best leading product, the so-called strategic flagship product, and to be "the best in the world". Samsung mobile phones have done a good job in this regard. Samsung developed the world's first commercial CDMA mobile phone, followed by the world's first CDMA2000 mobile phone, and in February this year, it developed the "World Mobile Phone", a product combining CDMA and GSM technologies. Of course, this "world first" can also make use of digital compatibility to leapfrog to related industries. For example, Samsung developed the world's first videophone in 1999, as well as the world's first MP3 mobile phone and camera phone, all of which are industry-leading products. The advantage of leading products and being "the first in the world" is that Samsung Electronics can easily attract widespread attention in the world market.
The second is the enthusiasm for sports sponsorship. Samsung is particularly keen on sports marketing and sponsorship activities, especially the marketing of Olympic partners, which has played an important role in enhancing the brand strength of Samsung Electronics, such as Athens Olympic Games and Beijing Olympic Games, and Samsung Electronics is a sponsor. Samsung's TOP plan for four consecutive periods enables it to perform on the same stage with world-class brands such as Coca-Cola and Kodak, and show it to the global audience, which is of great help for Samsung to rank among the world-class brands. In addition, Samsung also sponsored some national cups, world championships, golf tournaments and other sports events.
As an insider commented on Samsung, "The change of Samsung's fate is mainly due to its talent in brand management." According to the report of Boston Consulting Group, excluding South Korea, Samsung spent as much as 2.4 billion yuan on mobile advertising in 2002. Samsung became a global sponsor of 1988, 2000 and 200 1 Summer Olympic Games and 2002 Winter Olympic Games. Through the promotion of the Olympic Games, its sales in the American market increased by 3 1 1%.
A good international brand image has gathered a steady stream of popularity for Samsung to achieve its grand goal in the field of mobile phones, laying a solid brand foundation.
Part VII: Evaluation of advantages and disadvantages of pricing.
The position of Samsung mobile phone in China market is very delicate and embarrassing. There are many parallel imports of Samsung mobile phones in China. It is said that 70% of Samsung mobile phones in Beijing market are parallel imports. Due to the regional pricing strategy, the price of Samsung mobile phones varies greatly in different states, and the price in China market is much more expensive than that in foreign countries. This has created a strong demand for parallel imports. If a friend's parallel Samsung mobile phone costs more than 1000 yuan, it is obviously difficult for him to accept the licensed price of more than 2,000 yuan or even 3,000 yuan. Therefore, the existence of a large number of parallel imports has an invisible and huge impact on the sales of licensed goods. If Samsung does not face up to this problem, it will profoundly affect its position in the China market.
Market-oriented pricing is formulated after fully considering the price that consumers are willing to pay. However, with the development of domestic mobile phone manufacturers' strength, the improvement of quality and the improvement of functions, as well as the purchase of patented technology from Korean manufacturers and the imitation of the design style of Korean mobile phones, the ability of domestic mobile phones to compete with Samsung mobile phones is getting stronger and stronger. One advantage of mobile phone manufacturers in China is the price. The price of some of their excellent products is only half that of Samsung. This may attract some potential buyers of Samsung to buy. After enjoying the real discount, consumers' recognition and loyalty to Samsung's high-priced strategy will be reduced, which will affect other consumers through oral publicity and cause bad word-of-mouth effect. And now the speed of upgrading mobile phones is changing with each passing day. Consumers may be willing to pay less and less for a mobile phone unless it has excellent performance and good creativity. However, we can see that Samsung's mobile phones are mainly upgraded at present. Take S308 as an example, and upgrade it to S408, S508 and S608 as classic originals. They don't have any substantial performance changes, and they are also very lacking in creativity and functional upgrades. However, they rely on upgrades to continue the growth period or maturity period of their series of products and maintain their high prices, which is too dazzling for loyal consumers who follow the footsteps of Samsung. Secondly, the product update is too fast, and the speed of falling behind after buying licensed mobile phones is accelerated, which is easy to cause loyal customers to defect.
The mobile phone market in China is close to the pure buyer's market, and the buyer's market pattern is consumption-oriented and restricted by low-cost demand. Moreover, the core mechanism of market economy operation is the price mechanism. Judging from the current mobile phone market, the price strategy will play a key role in the future resource allocation, so it is not necessary for manufacturers to talk about price reduction. In the environment of price war, it seems that only the advantage of quality can not attract consumers' attention well. Reducing the price in the high-end market will undoubtedly degrade yourself, but if you don't reduce the price, you may lose a certain market share and get beaten. What decision will Samsung make? We will wait and see.