Remember the old adage that you have to spend money to make money? If you ever had any doubts that saying was based on fact, one has to look no farther than Samsung. According to a new report out of the Korea Times, Samsung is indeed putting out a ton of cash in both marketing as well research and development in an effort to gain more market share in the mobile space, while taking those numbers directly from Apple.
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In 2012 The South Korean manufacturer spent 11 billion dollars (12.9 trillion won), that’s billion with a “B”, on marketing of their devices alone. The amount spent is 6.5 percent of their 200 trillion won profits from the last year. Samsung has spent so much on marketing the past year that it was a 38 percent jump from their 2011 marketing budget, and 6.8 times the 1.9 trillion won that made up the 2005 expenditures.
The paper also found that Samsung spent 10.6 billion dollars (1.15 trillion won) on research and development. For comparison’s sake this is an increase of 15.5 percent of their 2011 allocated R&D budget and 3.1 times what was spent in 2005.
speaking on condition of anonymity, a source from the company told the Korea Times “Samsung’s focus on marketing was the main reason the company was so successful last year. With its strategic Galaxy S3 and Galaxy Note smartphones selling tens of millions, the company doesn’t care too much about allocating a gigantic marketing budget.”
This jump in spending not so coincidentally coincides with Samsung overtaking Nokia as the world’s top mobile phone maker. The company will also be increasing this spending again this year so as to keep the top spot.
Looking at this from an US perspective it’s easy to see how great this strategy is. By now we’ve all seen those ads mocking Apple customers. As Android fans we obviously love them but they have clearly had an effect on the general public. Additionally with all of that R&D spending not only have we gotten the very popular Note series and the high end Galaxy S series, but a bunch of mid to low-end devices that may not be our readers’ cup of tea, but they still carry the Samsung Galaxy name and brand recognition is the name of the game.