Consumer behavior semester project:

Samsung is a South Korean multinational company, founded by Lee Byung Chull, in the year
1938. It entered the electronics industry in the late 1960s. Since 1990s, Samsung has globalized
its electronics, mainly mobile phones, which have become its major source of income.

Samsung Electronics has grown into a global information technology leader, managing more
than 200 subsidiaries around the world. The company’s offerings include home appliances such
as TVs, monitors, printers, refrigerators, and washing machines as well as key mobile
telecommunications products like smartphones and tablets. Samsung also continues to be a
trusted provider of key electronic components like DRAM and non-memory semiconductors.
Samsung pledges to create and deliver quality products and services that enhance convenience
and foster smarter lifestyles for its customers around the world. Samsung is dedicated to
improving the global community through its constant pursuit of groundbreaking innovations and
value creation. Samsung Electronics Co. Ltd is a global leader in semiconductors,
telecommunications, digital media and digital convergence technologies, with consolidated sales
of US $96 billion in 2008. Employing approximately 164,600 people in 179 locations across 61
countries, the company consists of two business units - Digital Media & Communications, and
Device Solutions. Recognized as one of the fastest growing global brands, Samsung Electronics
is a leading provider of digital televisions, memory chips, mobile phones and TFT LCDs.

The Samsung galaxy series is one of the brand builders for Samsung. Despite the competition
from similar companies, Samsung in Pakistan is growing manifold. Samsung is a brand very
common among the youth. Both, creative products and excellent service delivery provide a very
personalized customer service. It presently has a strong hold on the market owing to its trusted
performance in the last decade.
The reason for the Samsung brand to shoot up in brand equity is the Samsung galaxy series and
Android phones. Samsung Galaxy is a series of Android powered Smartphone designed,
manufactured and marketed by Samsung Company. The Galaxy series are high-end Smartphone
series that include the likes of Galaxy Note Series, Galaxy Tab Series and Phablets, which come
with added functionality of a stylus. Samsung has developed a very effective marketing strategy
for its Samsung Galaxy Series in order to compete effectively in the market.

1st step: Select a product:

Samsung galaxy S5:

2nd step Marketing mix:

Product: Samsung has a wide range of products from Televisions to washing machines and
laptops. However, in the present market scenario, a major part is dominated by the Smartphone
and in that, the Samsung Galaxy series. Samsung has launched a number of Samsung Galaxy
Series smartphones and tablets, which have been well received in the market. In fact, it can be
described as among the best quality manufacturers of tablets and high-end Smartphone. By the
end of 2014, Samsung had sold over 600 million cellular devices and also remains as the largest
manufacturer of Android driven devices covering 36% of the market.

To be on the top Samsung comes with a new model almost every month or even less. Samsung
GALAXY S5, the latest offering helps to optimize work efficiency and security and ensures
business continuity.
Price:

Since Samsung has a wide range of products, it has various pricing methods. Price of a
commodity says a lot about the product. Innovative products, which are exclusive to a place, are
generally marked up to meet the demand curve and use skimming price. For instance, the recent
launch of Galaxy S5 witnessed a huge demand in the market. In such cases, Samsung adopts the
skimming price technique, whereby they get a high value for a commodity before the
competition sets in the market. Once the product becomes old or faces a clash by other such
products, Samsung reduces its price.

In certain cases, Samsung also adopts competitive pricing schemes to out beat the competitors in
the market. Nevertheless, one thing that is worth noting is that Samsung doesn’t have the
reputation of entering late in the market. So it means that it doesn’t have to produce products at a
lower price in order to catch up. Instead, other companies have to price their products lower in
order to compete with Samsung.

Place: Place not only means location and distribution schemes but rather includes the entire
management process until reaching the products to the consumer. Samsung products are
available in the market via varied channels working on the concept of channel marketing with
the segments- Sales and service dealers, Modern retail and Distributors. Samsung retailers sell
products through chains of supermarkets clearly concentrating on the demand and opportunities
to expand their in-store share.

i) Sales and service dealers are involved in corporate sales and they can also open their
own exclusive Samsung showrooms.
ii) Official Distributors of Samsung Pakistan:
Samsung has a distribution scheme with two distributors who further cater to all the
retailers of the whole Pakistan.
 Greentech (Office Address: 501 Alhafeez Shopping Mall, Lahore, Pakistan)
 Muller & Philips Pakistan Pvt Ltd
 iii) Samsung Pakistan recently entered into e-commerce officially in partnership website
Daraz.pk to become its online retailer, said a statement issued by both the companies.
The Marketing Communications Manager at Samsung Pakistan – Saad ul Hasan
stated that

“Samsung is striving to harness the vast potential of E-commerce in Pakistan, which

is growing at a pace of around 20% per year. At present; the total size of E-commerce
market in Pakistan is estimated at 25 million US Dollars, with more than 800 online
merchants operating across the country.

Promotion:

For Samsung, the new product launches and schemes keep being updated in the local media.
Newspapers and the electronic media and also now in social media help in promoting new
launches as well as in informing the consumers about Samsung products and its goals. Samsung
being a global giant in consumer electronics is well aware of the fact that Promotion is the
strongest pillar behind the marketing mix strategies.

Hoardings and posters are put up in the major cities. Celebrities are invited for the launch of a
new product. In addition, to help promote the global appeal of the brand, often-famed celebrities
like Fawad khan & Farhad Humayun are made its brand ambassador. It is usually Samsung’s
strategy to use almost 5% of revenue generated from sales in promotion. Public relations, putting
out new releases, writing articles for trade publications etc. are usually the part of promotional
schemes.
PEST Analysis:

PEST analysis identifies the political, economic, social, technological, environmental, and legal
factors that of which directly affect a company.

Political Factors

Political/Legal environment are usually considered as one because they are enforced by the
nation’s government. It is vital for Samsung operation because different nations with their
respective government have different Political/Legal platforms respectively; Samsung operating
on global level must abide to ground rules and regulation in different markets of host countries
around the world. To its success, Samsung Mobile division surveys its scope of limits in order to
isolate prohibited actions, regulations and aid from the government so as to withstand the
international trade. Quotas (limit to goods imported), embargoes (restrictions), tariff and tax
charges, subsidies and patents over certain technology or equipment are decided by the
government so Samsung Mobiles works hand-to-hand with authorities to gain maximum
advantage to the Nation’s target market. Laws of copyright and abuse of phone usage keeps
Samsung ahead, it limits any space of intrusion or misuse of their products.

Economic Factors

Economy in tells the production and consumption of goods and services. As far as Samsung is
concerned, the economic system is critical as it can control what the organization is to produce,
how it should produce and the category of recipient who should use their end products.

On one hand, aspects of international trade is important for Samsung being the global Leader
supplier of mobile phones and on the other hand, the knowledge concerning the nation’s
economic status (Type of economic system practiced, Inflation rate, level of employment and
exchange rate) is equally as important to realize future plans for personal and financial safety
together with enhancing entrepreneurship.

With incomes rising, people have more disposable income, which enables consumers to be more
selective with their choice of mobile phone, looking to other factors rather than fulfilling the
most basic of user needs (text messaging and phone calls) and price being such a key factor.
Social Factors

Socio-culture focuses on how Samsung Galaxy S5 blends in with components in a society; that is
culture, social class, lifestyle and demographic and psychological factors making up the society.
Samsung operates in a diverse number of culture and all levels of social class simply because
different models are frequently released to satisfy all individuals despite their difference in race,
nationality, religion, income level or beliefs among each other. Mobile phones can easily adapt
to any culture and can be used to support different aspects and existing patterns of Individual’s
lifestyle or behavior.

The rise of the so-called information society has made telecommunications increasingly more
important to consumers, both in terms of work and leisure. Users are more aware of mobile
phone handset choice and advancements due to increased information availability.

Technological Factors

Technology change defines how fast technology advances. Being the predominate medium by
which we get things done; technology as a process, in terms of mobile phones defines the way
we make contact. Not only does it helps shape culture but also changes other aspects within
and/or outside the organization for example the need to upgrade Equipment’s to en-better the
manufacturing of the end products. The success of Samsung is based on constant innovation on
human technology. By enhancing communication and exploring new ways to exchange
information, Adding new features, Samsung Galaxy S5 allow users to get.

Consumer Psychology:

The study of individuals, groups, or organizations and the processes they use to select, secure,
use, and dispose of products, services, experiences, or ideas to satisfy needs and the impacts that
these processes have on the consumer and society. In This Case we will study how consumer
Psychology applies on Samsung Galaxy S5 Owner.

Motivation:

During the first usage I found myself in a flow state, since the process had my full attention and
time flew by. The arousal the first time I held the phone in my hand was so high that it created a
want, followed by an outstanding drive to satisfy my needs. My goal was to get the S3 as fast as
possible, to feel more connected with my loved ones and to be always up-to date.

I even felt a sort of misbalance which influenced my goal oriented behavior to recreate the
homeostasis.

This phone has the potential to satisfy utilitarian needs (having a phone) as well as hedonic needs
(playing games, augmented reality and entertainment). But I also wanted to satisfy my rational
needs (ulterior motives). When looking at Maslow's Pyramid of Needs, this phone helped me to
satisfy all last three steps of human needs: Belonging (Connectivity), esteem (I bought it from
my own money) and finally self-actualization (It helped me to express my individuality). For me
as a German the sense of belonging is one of the most important values. Nevertheless, the value
of self-fulfillment and the value of fun and enjoyment in life played the key role in my purchase
experience.

Smartphones play a very high role in semiotics. For me an Android smartphone is a symbol for
being part of a modern era, the digital natives, but at the same time to be individual, different
from the iPhone user. The brand symbols of Samsung, Facebook and Google (in form of apps
on the display) prime this schema immediately.

Here comes the downside. My high involvement with the product resulted in an approach-
avoidance conflict. I wanted this phone so badly but it was just too pricy for a student with no
fixed income, so I had to work hard for it.

Perception:

My perceptual selectivity is as much advertising clutter-free as possible. Due to my high

involvement towards the product, my mind has a perceptual filter for it. The absolute threshold
for this product became very low. So therefore stimuli from electronics I really adore and I got
exposed to have a lot of my attention. The first contact to a new product normally begins with
the perceptual process. When I saw the S3 on top of my favorite consumer electronics website of
“engagdet.com” I experienced visual exposure in many forms - mostly in form of crystal clear
product pictures or even a product review or an unboxing video.
Due to perceptual vigilance I saw the S3 almost everywhere from news, banners, and TV spots.
Those triggered my interpretation which is influenced by a schema, my belief, that Android
smartphones are incredibly functional and that everyone should have one. Every time a new,
better android product reaches the market this belief enforces itself. Samsung normally uses the
little Android brand logo as an icon as well as an index (since the Android logo is used by many
different producers offering Android). It automatically communicates the functionality and user
friendliness.

After the shopping, when I unboxed the S3, there was certain unique smell. For me it was an
almost holy event, like opening a Christmas gift with a subsequent “deflowering” of the product.
Smell is one of the most efficient stimuli to anchor a moment in your long term memory.

Subsequently, the sense of touching immediately transferred the perceived quality of the phone
from my hands directly to my brain. I prefer phones which are slightly heavier, made of metal
and have a smooth surface, like the S3. One of the most important features is the touchscreen. To
control a device by touching is an invention of the 21st century, which my brain fully learned
and adapted (I once caught myself trying to “wipe up” an article of a real life newspaper.)

Learning:

Samsung consciously took advantage of the concept of stimulus generalization. They used
Apple’s success of their keynote events and turned them into their advantage. Furthermore
Samsung imitated Apple’s operating system and even the chassis of the phone. The Ad triggered
the schema that the S3 is in some way comparable but at the same time it was even one step
ahead of the iPhone 5.

I would call myself a cognitive learner, since I consciously and intuitively learned about the
phone as an observational learner. I watched friends using the phone and during this process
learned about its functionality. So there was no behavioral learning through conditioning
involved since I got introduced to the phone consciously by a friend. After the retention and the
attention I got the phone in my hands so I was able to imitate the observed behavior which
motivated me to get the phone myself.
Memory:

After I left my friend’s place I was so fascinated by the phone that the whole learning process
moved from short term-memory to long-term memory. So when I was about to be confronted
with 20 different Android phones in the store the concept of familiarity and recall made me
remember the exact specifications of the phone like looks, brand and model number.

So for Samsung, there was no need for subconscious stimuli in order to condition me to buy their
phone. But of course there is some sort of conditioning when exposed to the phone. Every time I
see another individual flashing a smartphone, I feel the urge to take a look at mine as well, just in
case one might have missed something. This phenomenon is also very well described in the
research of mirror neurons

3rd step Consumer profiles: Based on demographics and psychographic

A description of a customer or set of customers that includes demographic, geographic, and

psychographic characteristics, as well as buying patterns, creditworthiness, and purchase history.

Psychographic:

Psychographic profiling attempts to segment the market based on traits such as personality and lifestyle.
Marketers may use these traits when developing a targeted advertising or promotional campaign. A
purveyor of expensive jewelry items can use psychographic profiling to market to individuals who have
purchased similar items in the past or other luxury products like expensive cars or clothing. For instance,
they can create an ad for placement in a magazine that appeals to an upscale market.

Demographic:

Demographics are personal characteristics used to categorize consumers. Demographics include

characteristics such as age, gender, income level and marital status. Through market research, the
company may identify its ideal customer as a married, college-educated female aged 30 to 35 with an
annual income level of $35,000 to $45,000. This information helps the business owner develop a
marketing strategy that appeals to individuals with this demographic profile. For example, an owner of a
women's clothing store might attempt to reach this market by developing an ad campaign to promote a
new line of business attire.
Profile no: 1 Interview:

Name: Sayed Sangar

Demographic

Age group: young adults

Gender: Male

Marital status: single

Family size: large family

Occupation: Student

Education: University

Ethnic background: Afghani Pathan

Religion: Muslim

Psychographic:

Lifestyle: education

Social class: middle class

Personality: serious

Activities: Playing games, Cricket, Like to use social media

Profile no: 2

Profile no: 3
Step 4 Buying decision process

Need recognition: is the first step which is very important because it leads consumers to buy
products or services. Smart phone has become a necessity of modern society. People
communicate and obtain information through apps by using smart phone. Unlike desk top or lap
top, smart phone has the advantage of transportability. Most places offer free Wi-Fi so that you
can access to internet with your smart phone. It means you can obtain information that you want
to know wherever and whenever you want with your smart phone. Samsung Galaxy S5 Not only
fulfilling those essentials needs of communication but it also create aura or envy for their owners
that separate them from rest of crowd. Samsung Galaxy S series is also known for its vast and
superior features that leaves its competition to shame, this also create desire for prospect to own
it.
Information search: the second step of consumer decision making is information gathering and
searching. When an individual recognizes his or her need for a particular products or services he
tries to gather as much information as he can. People can acquire information through several
sources which are personal, commercial, public and experiential source. You might discuss your
need with your peers, family or co-workers. You can also obtain information through
advertisements, sales people, newspaper, radio, magazine and television. For these reasons,
Samsung Electronics Inc. spends their one of the majority budget in advertisement on television,
radio, and newspaper, magazine and so on. You can find the advertisement of Samsung Galaxy
S5 everywhere and thus you can learn about the products easily. Good warranty is one of
Samsung Electronics’ key of success. Once you get a good warranty service, you will think the
company in positive way. And it reminds you the product of company when you decide to buy a
new product.

Evaluating alternatives:

After gathering the information, an individual may evaluate alternatives before purchasing
products. There are several major smart phone companies such as Apple, HTC, and Black Berry
for satisfying needs of consumers. Samsung Electronics Corporation invests a lot of money in
designing department and advertisement to attract young people in order to break through give
the company an advantage over those strong competitors.

Purchase Decision:

Purchase decision i.e. buying value.

There could be three possible sub stages here.

From whom to buy:

This depends on considerations such as past experience with a buyer, reasonable rates terms of
sale and return policy. The consumer will also survey if any retailer or store is giving any store
discount or added value on the galaxy s5 or any sort of bundling offer happening anywhere.
When to buy:

Store atmosphere shopping pressure, Products discounts or attractive offers could be more
around festivals and during special occasions.

No purchase:

A consumer looks at the product, evaluates it with the other products and decides not to buy it
instead he could go for cheaper mobile with other benefits. In this case for Samsung galaxy s5, it
is considered as a No Purchase.

The attitudes of others, unanticipated situational factors and perceived risk may all affect the
decision to buy.

Post purchase behavior

Post purchase evaluation which refers to a customer’s analysis whether the product was useful to
him or not, whether the product fulfilled his need or not. According to a website which evaluates
various products, products of Samsung Electronics are evaluated positively by consumers. In
addition, many existing buyers of Samsung Galaxy S series show high repurchase intention
because of good experience with previous products of the company.
Purchase Decision

Product Choice: Samsung galaxy S5 influenced by Peers.

Brand choice: Loyal Samsung Fan

Dealer choice: MZ Afghanistan

Purchase amount: 570$ or 57000

Purchase timing: 1.p.m

Payment method: Cash