HTC just unveiled its new One smartphone, focusing resources even more than it did last year. That device is crafted out of an aluminum unibody casing and features an incredibly sharp display (468 pixels per inch) and a revamped software interface layer on top of Android. The Galaxy S IV is being unveiled tomorrow, but I’ll wager that HTC will still have a better device from purely a product standpoint since Samsung remains committed to its cheap plastic ways.
The competition between Samsung and HTC shows that sheer marketing weight can at times overshadow actual product quality. The One may be HTC’s last shot at redemption, but it needs to market the device well.
Domestic dollars
Within the U.S., Samsung’s marketing spending absolutely soared in 2012. According to The Wall Street Journal, the South Korean company boosted marketing fivefold from 2011 levels.
| Company | 2011 Marketing Spending | 2012 Marketing Spending |
|---|---|---|
| Samsung | $78 million | $401 million |
| Apple Inc. (NASDAQ:AAPL) | $253 million | $333 million |
| HTC | $124 million | $46 million |
| BlackBerry | $39 million | $35 million |
| Nokia Corporation (ADR) (NYSE:NOK) | $21 million | $13 million |
Source: Kantar Media via The Wall Street Journal.
The figures show a big drop in HTC’s spending, further proof of its marketing missteps. Both BlackBerry and Nokia are mounting turnarounds this year and as such should be trying to build brands, but they also don’t have as deep of pockets as Apple and Samsung Electronics Co., Ltd. (KRX:005935).
BlackBerry recently changed its name from Research In Motion as a symbolic move to unify its brand under the BlackBerry umbrella. Nokia Corporation (ADR) (NYSE:NOK)’s Lumias are starting to take off, and Microsoft Corporation (NASDAQ:MSFT) inevitably helps the company out through advertising its Windows Phone platform. Advertising was also part of the major strategic partnership that Microkia formed in 2011.
Samsung’s willingness to spend on marketing has played a crucial role in its success. The company reportedly spends more on “below-the-line” marketing (things like the aforementioned commissions, promotions, and rebates) than any other smartphone vendor.
In the words of former Apple Inc. (NASDAQ:AAPL) ad man Ken Segall, who thinks Samsung has pulled ahead of Apple in marketing prowess, “In marketing, as in political advertising, the bigger the budget, the bigger the chance of success.”
The article Samsung Lesson of the Day: Marketing Works originally appeared on Fool.com and is written by Evan Niu
Fool contributor Evan Niu, CFA, owns shares of Apple. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft.
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