Samsung has just announced much lower pricing on their coming Galaxy Tab 2 7.0 and 10.1 inch tablets as part of efforts to compete in the market place. Instead of competing against Apple in the iPad segment, they have decided to go compete in the market segment occupied by Amazon (Kindle Fire) and Barnes & Noble (Nook tablet). This has a much lower price point than where they are competing today and could make a big difference in the number of tablets which they are going to sell. While this sounds like an excellent marketing strategy, there are several hurdles which they are going to have to address when going after the market occupied by these two companies. The biggest one is their marketing and distribution system.
Both Amazon and Barnes & Noble have agreements to sell their 7 inch tablets through other stores along with their own web sites. Stores like Target provide for retail locations where their tablets can be purchase. While Amazon does not have a retail presence like Barnes & Noble, they have a huge web presence and have a big draw because of all the other products which they sell. While Samsung can put these coming tablets into stores like Target, they have a bigger issue with retail presence that they are going to have to address. If they want to be successful with this market segment, they need to address the needs where the consumers like to feel a product before they buy it.
Store Within A Store
One of the ways that Samsung is looking to address this is with the idea of a store within a store. They are doing this in the UK right now at Phones4U where a section of the store is specifically for Samsung devices. These kinds of situations of a store within a store could easily provide Samsung with the kind of visibility which they desperately need. With prices moving towards the lower end, they must provide a place where people can hold the tablet and play with it to make their purchasing decision.
Another area is through the opening of retail stores that are for Samsung products only, somewhat similar to what Apple has been doing with their retail stores. With the market strength they have and their market share, they are now at a point where this will work for them, though not the same way that Apple has done. Samsung has already announced they will open stores in Canada, exact locations are still to be determined. There is no information about them opening retail locations in the US, but that must be a key part of their strategy.
Samsung has created experience zone stores and one was in the news last November for the Galaxy Nexus in New York and it was very popular. These are there to showcase products and let people play with the products with people there to answer questions. This is an excellent way for people to see the Samsung products.
Samsung must get a market presence for their devices so that they are out there for people to touch and feel. It seems that the strategy would be better served if it was much further along than it current is, but all of this is new for Samsung. This is especially true of the idea of entering a tablet market to compete with Amazon and Barnes & Noble. Hopefully, the current efforts pay off for them.