Samsung To Cut Marketing Budget Relative to Revenue
Samsung Electronics has easily become one of the most identifiable names when it comes to the smartphone industry. After taking on Android and putting their own little spins on it, Samsung has become a massive player in the mobile phone market, with its powerful yet sleek Galaxy S series, and with its super-powered multitasking behemoth Galaxy Note lines. Samsung is also known as one of the more outspoken manufacturers when it comes to advertising, especially with their extremely funny and accurate ads against Apple products. However, it looks like this year will be a change in that pattern. Samsung announced that they will be lowering their mobile marketing budget relative to revenue this year, which basically means that they are slashing the percentage of their revenue that they spend on marketing campaigns. This is due to the fact that for the first time in two years, Samsung’s profits have actually dropped. Clearly, Samsung executives feel that the high marketing costs were not helping this at all.
Samsung is not looking to reduce their exposure, however. No sane company would. What they are looking to do is simply to spend each marketing dollar more efficiently, thus reducing their need for them, increasing profits. Samsung has already been milking the upcoming Winter Olympics as a marketing giant, so it will be interesting to see exactly how this ‘less is more’ strategy will pan out over the course of this year. At the Olympics, Samsung intends to give away a free Galaxy Note 3 to every athlete, which is a great, if expensive, marketing maneuver, especially for those who follow winter sports very closely. With all the predictions and rumors surrounding the upcoming Galaxy S5, it will be interesting to see if they can get a better response than they did with the S4 even while on a ‘more efficient’ budget. What do you feel about this move by the Korean smartphone giant? Have they done enough marketing and are able to back down without losing too much profit? Or should they keep going bigger as the market gets more competitive with companies like LG coming out with phones like the G2 that are a direct threat to Samsung’s lineup? Let us know what you think in the comments!