Individual project report Assignment Sample
Introduction and background research of behavioral issues
The modern business environment, globalization and the rise in public awareness are drivers that influence an organization to adopt sustainable practices. The companies are in the phase of improving their business practices that would support their sustainable framework. Moreover, the companies frame their marketing strategies in a way that would be at par with sustainable business practises. However, every company needs to enhance its communication and marketing efforts in order to build a strong brand identity.
Corporate sustainability is now a matter of big concern for global stakeholders and media. Globalization has paved the path of proper communication and sustainable marketing framework for a sustainable brand reputation. Samsung, a global leader in digital media and convergence technologies is a brand that enjoys the highest brand value. Operating in more than
50 countries across the world, the South Korean giant has a sustainable framework that attracts a global base of clients. However, in the modern business practice, as more companies enter into the sustainable practice zone, companies begin to face innumerable challenges and Samsung is no exception.
Consumers purchase considerations for brands supporting sustainability greatly depends on how businesses contribute towards improving the lifestyle of its consumers. Consumer priorities, however, are dynamic. A company’s sustainability is greatly reliant on customer priorities, and it is only successful when consumers perceive a company’s value during their purchase decision. In recent years, consumer interest has increased dramatically and so have their business expectations. As a result, the traditional 4P’s of marketing – product, price, place and promotion, needs to be replaced with 4C’s– customer solutions, customer cost, convenience and communication.
With changing customer preferences, changes customer behavior’s. To effectively remain in the market competition, a company needs to know how the customers behave or perceive the brand. The study of consumer behavior entails examining what products the customers buy and how they end up in their purchasing decision. Organizations often examine their customer behavior to determine how and where they should market their products and offerings or what innovations they need to achieve. A customer’s behavior decides what products a company needs to manufacture more or where they need to innovate to retain the clientele as well as attract more. Knowing customer behaviour helps a company to have a better understanding of how to enhance customer service. However, today Samsung faces issues in regards to customer behavioural issues that affect its business framework.
Firstly, there is a wide competition in the smartphone market and Samsung, despite being the frontrunner, faces an impact of it. Secondly, consumers base their purchasing decision on a number of product attributes- price, phone functionalities, design, brand, service and purchase location. Consumer’s involvement level influences the product manufacture by a company, and altogether influences their marketing framework. Customers appreciate when the marketers communicate with them and show an interest in their preferences, and are more likely to enjoy such interactions. A company should understand that when something is positive for a customer, it is positive for the business as well. Customers who enjoy interactions with brands are more likely to show customer loyalty towards the brand. And therefore, a company must follow up with customers in order to retain clientele and boost customer attraction while being a sustainable brand.
Customer beliefs attitudes and current behavior
Customer behaviour is a broad range of study that entails the decision-making process a customer makes while making their purchasing decisions. In early stages, the consumer behaviour was considered more like a buyer behaviour that describes the interaction between consumers and the products a business manufactures (Al Karim & Islam, 2020). However, times have changed, and now companies recognise customer behaviour as a continuous process that takes place when consumers interact with businesses, more like a business transaction.
In recent times, the consumers interest in sustainable activities has increased dramatically and with that their expectations have risen too. However, there exists an attitude-behaviour gap, a phase of inconsistency between consumer attitudes and buying behaviour. This is because, new generation can no longer be misled by indoctrination. It is now devious to characterize consumers on the basis of their desires. The traditional view of consumers is limited and abstracts them from society they largely depend on. As a result, today dealing with consumer behaviour is more of a challenge for modern companies like Samsung, and they can only adopt business value by amalgamating their vision of sustainability with the 21st century customer preferences. Today’s customers not only desire direct utility from the business offerings but also want innovation at every step of the process, a business that focuses on their wellbeing and overall improvement of the community. Furthermore, with global recession, consumers have become more mindful, and no longer heeds excessive spending and bottomless consumption (Boon et al., 2019). The present buying pattern of the consumer reflects a “Mindful consumption”, where consumers focus more on buying limited products and also focusing on fewer brands with more concentrated on their preferences.
Usually, a buyer goes through 5 stages while making a purchasing decision. First, a buyer considers his buying states and recognises his desires and needs, which can be also influenced by an external factor. Then they start searching for product information through multiple channels of information. With the accumulation of sufficient resources, a consumer then goes for evaluation of alternatives among a wide range of choices. Finally, he makes a purchasing decision that he assumes is the best for his current situation. After a purchase is made, the consumer will further respond to the marketer based on his satisfaction with the products.
Figure 1. Buyer decision process (Source: Self)
The target market of the South Korean giant is a wide base of clientele segregated across foreign nations that extends from customers looking for ordinary day gadgets to professionals in search of industrial equipment. The target group includes individuals of the age group 20s to 50s, or more, as long as they have the capacity to buy and use the smart products that Samsung brings to the market. The first group of target customers includes the youngsters to early adults who pose as the target clientele of smart and innovative products- the tech savvy generation. Samsung hence invests in attracting clients from this age group and focuses on bringing products that caters to the needs of this target group (Çavusoglu et al., 2020). The second biggest group is the adults group, including the customers who have the most ability to invest in Samsung products, be it smart devices, smart home accessories or smart kitchen necessities. This target group of the brand will continue to develop in recent times as well. However, there are a number of factors that influence the buying behaviour of Samsung products.
Cultural factors
This includes the culture, customs and practices that a group of individuals follow. The set of fundamentals affects the values, needs and perception towards the brand that is inherited by individuals through society or in family. The culture is significant when it comes to understanding the preferences of target customers. Also, the social class is an imminent factor that drives consumer behaviour as well. Such inherited values and propositions play a key role in the recognition, conduct and desires of the consumers (Dawi et al., 2018). Acquainted with the reality, Samsung is continuously making efforts to touch the point of interest of the customers. And to keep in line with the disposable income of the customers, Samsung manufactures products in several price points for every social class.
Personal factors
The second in the list is the age and life cycle of the customers. Customers tend to choose diverse products at different points in their lives. The youths invest in smartphones, monitors, gaming PCs and gadgets rather than smart home necessities. On the other hand, an adult would be more interested in buying home essentials and smart kitchen utilities. Subsequently, older people like to invest in technologies that are useful for the overall family. Therefore, it is clear that with every age point, a consumer is inclined towards different products suits (De Bruin et al., 2021). Also, there is a correlation between Samsung products and the demography, as with geographical variations, the needs change. And hence Samsung pertains to all age groups and all demography by bringing out more innovative lineups continuously updating its portfolio.
Social factors
Social influence falls among the three most pertinent drivers of customer behaviour changes. Social influence entails not only mass media but also expert opinions and reviews from intimate relatives. It greatly affects the purchasing opinions of individuals (Hadi et al., 2019). As a result, Samsung comes up with offers for families and updates product lineups with great and unique features so that it stays a forerunner in the market and opens the floor for positive reviews and references.
Thus, customer attitude and behaviour are influenced by a number of factors that motivate customers and help them make a purchasing decision, and the brand identity and reputation play a key role in the overall customer behaviour.
ISM tool to identify behaviors and barriers to present sustainable change
Tools in business innovation and sustainability are extremely crucial and widely useful to promote the adoption of a sustainable mindset within companies. As a result, since the beginning of the product development process, these tools are in use so that a company can identify the opportunities and barriers to organisational behaviour changes and hence fundamentally change the product and be a brand to influence societal and environmental outcomes (Hapsari, Suhud, & Mukhtar, 2021).
The classic Business Model canvas (BMC) was a great success as it forces the businesses to take into consideration the relevant aspects of business and drafts a simple yet useful framework for business model innovation. With some modifications, the business model canvas can further be made into a potential tool to address the sustainability issue in businesses (Ilyas et al., 2021). A sustainable business canvas model encloses several new fields related to the impact of business model while preserving the usefulness of a regular business model.
A sustainable business model can help describe the rationale of how an organisation innovates, produces and draws value. Entrepreneurs or any multinational business need to develop and refine their business model to seek transparency and clarity, which would further help them identify the opportunities in their external as well as internal environment (Kose & Cizer, 2021). The business model canvas entails 4 key areas that any business should take into consideration – customers, offering, financial viability and infrastructure. It includes 9 blocks that assess a business framework – customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partnerships, and cost structure.
Samsung, started with just 40 employees, is today a global conglomerate. To continue to increase the success the brand has incurred over the years, the brand must maintain economic growth and stability. The company has several firms and subsidiaries with multiple divisions with unrelated companies (Leonardus et al., 2019). Today, their objectives range from ordinary equipment for daily use to mechanical equipment and a broad base of shoppers. The global revenue it makes over a decade is not small as well.
According to a Statista survey, Samsung held the leading position in global market share with consignments reaching 58 million units in Q2 2021, but it fell to 18 percent from 22 percent in Q1 2021 as shipments fell by 24 percent QoQ due to weak seasonal fluctuations in some of its key regions, such as India, Central and Latin America, and Southeast Asia, as well as manufacturing disruption in Vietnam due to COVID-19.
Samsung therefore can be concluded to have been following a productive business model that has helped it to incur significant global revenues. However, to continue to thrive amidst the rising competition, Samsung needs to adopt a stable and controlled business model. As a result, the giant has adopted vertical integration and product volume in its present business model. The vertical integration is directed towards firm control on its different phases of product development and offerings (Mahajan, Kumar & Malati, 2021). The company holds total control over supply chain management and distribution for a better control of its services. The present model is effective to reduce operational costs and enhance overall business efficiency benefiting the whole company. The availability of large volumes of products is also a driver of its market share which further allows the firm to deal with a wider clientele and thereby increase its profitability index. However, practicing better control over offerings and services and developing a supportive supply chain management would bring unbelievable conclusions for the company.
Recommendation to achieve sustainable change (STP and marketing mix model)
Embracing sustainability on business demands holistic business model transformation without compromising the customer expectations. The consumers are the pivot of any marketing activity and therefore the way to sustainability is rocky.
The present market strategy of Samsung helps the firm to have competitive advantages and meet its business objectives.
Product strategy: Samsung at present invests in extensive research and development to deliver innovative and unique products to the market. With mobile devices, kitchen utilities, home appliances, storage devices and IT needs, Samsung product portfolio is impressive and utilitarian (Özkan et al., 2020).
Pricing Strategy: Samsung’s pricing strategy can be classified into two categories. One, where the pricing strategy is based on market competition, and secondly, a skimming pricing strategy. Being a fast mover and innovator in the product game, Samsung defends itself from flanking by its contenders through its pricing strategies.
Distribution strategy: Samsung deals directly with retailers and hence there is no middle man responsible which minimises all sorts of confusions and treachery. Also, the brand uses a single distribution company in a particular geography that further services to other potential locations (Raouf & Sharma, 2017).
Promotion strategy: Promotion is a strong pillar in the brand’s marketing mix and the brand uses advertising to do so. They use digital media, newspapers and social media to promote their brand, and have a strong community support. The brand also leverages several promotional hacks to promote services and is known for quality and user experience.
Samsung had a conservative reputation in the past, focusing on low-cost items aimed at the lower end of the market. It was capable of competing in the lower market because of its low prices, however it had less traction in the upper market (Roma, 2019). To break into the upper market, Samsung had to abandon its lower-market position and emphasize innovation and brand perception. The STP Analysis of Samsung is as follows-
Segmentation – Samsung has diverse product lineups for its diverse group of target clients. The brand has partnered with IT industry leaders to bring solutions relevant to businesses and hence caters to individual as well as business needs.
Targeting- After segmentation, comes choosing target groups. As mentioned already, the brand has a diverse client base which extends from tech savvy people to large businesses to institutions and government.
Positioning– It entails about the perception of the customer towards the brand. As a result, Samsung focuses on real margins, brings quality products, delivers excellent customer experience and has developed a brand identity synonymous to a high-end value driven brand (Shumookh Abdul Aziz Al-Ghamdi, & Nada, 2019).
However, to further develop products and services and bring significant differences to customers the brand should develop a framework that would create opportunities and bring competitive advantages and business values.
The proposed framework entails four cores of sustainable business practice- innovation, collaboration, communication and commitment.
First, the brand would bring innovation at every segment of its business meeting the broader demands of consumers and changing lives of common people and communities without compromising the organisational performance.
Secondly, the brand would develop trust and loyalty with multiple collaborations with government and other self-help groups (Silva-Treviño et al., 2021). Thirdly, the brand would interact with customers more to pave proper communication channels so that every grievance and concerns of customers are addressed.
And lastly, the firm shall show commitment towards sustainability to gain the trust of employees as well as the customers, being an example for other generations to follow.
Conclusion
Researchers have always pointed the need for businesses to be sustainable and this is something all businesses can leverage to gain competitive advantages, brand loyalty, mitigation of potential risks and reduction of costs. Social performance of any firm is directly linked with financial stability of a firm. As a result, businesses must adopt sustainable practices to avoid negative reviews, criticisms and disallow losing customer base. Sustainable marketing strategies are definitely helpful to earn revenue when companies adopt a framework where it encloses customer empowerment, customer engagement and business values in the 4P’s. To achieve long-term customer engagement, businesses must demonstrate a clear purpose and establish trust. Sustainable marketing methods that generate corporate value are seen as more trustworthy by internal and external stakeholders.
Thus, the report successfully proposed marketing strategies on the basis of a sustainable marketing framework to help the organisation, Samsung, gain maximum business value. The proposed framework can be further operationalized and experimented as well as modified by the business to increase traction and validity.
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