sgs3-pricing

Guest post by Sitakanta.

The launch of Samsung Galaxy S3 in India was one of the most anticipated events in the smartphone history of the country. With pre-orders all over the world shooting past the 9 million mark, S3 was already one of the most popular smartphones this quarter even before a single unit shipped out. The S3 has now moved from pre-booking to becoming available and is already creating quite a ruckus in the market. But why is a phone that was intended to outsell the iPhone and the HTC One X being launched at a whopping price of Rs 43,180 and what explains the exactly same price of Rs. 38,990 across e-commerce stores? It seems perhaps the company is on a much bigger plan than that meets the eye. Here’s a look at the series of events in pricing of the phone over the past month.


Pre-Booking

Samsung Galaxy S3 went on pre-booking in the wee hours of 21st May, full 10 days ahead of the phone’s scheduled launch in India. Samsung’s e-store allowed users to book the phone for Rs 2000, which would be taken as advance payment on the phone @ MRP and not be refunded to the booker once the MRP was declared. Over 1000 people took the plunge and booked for their phone without being aware of the MRP. The anticipation for the phone was clearly high and Samsung had created the right kind of buzz in the market as well. E-commerce stores soon followed suit with certain stores providing pre-booking facility at prices ranging from Rs 250 to Rs 1000; clearly Samsung’s own e-commerce store had the highest pre-booking amount for the advantage of receiving the product 1 week in advance (First products shipped out on 31st May vs. June 5th for other e-commerce sites).

s3-pricing

Image credit: @nirmaltv

Pre-order

The E-commerce sites had made the debate for pricing even more interesting with some sites actually showing the price of the phone in their pre-order at the price of Rs 38,900. The speculation over the phone being priced at this mark began to spread like wild fire. It is clear the phones were sold to the online e-commerce vendors at significantly lower price than Rs 38,900.

The Launch and the Shockwaves Online

The revelation of Samsung Galaxy s3 price at Rs 43,180 created more anger among customers than elation. Those who had pre-booked online might’ve been surely surprised at the sheer cost of the device and how it was priced higher than iPhone 4S in the market instead of going below the iPhone and creating the right buzz. Twitteratis, bloggers and tech critics have equally raised a furor against the extremely high pricing of the Samsung Galaxy S3. Ironically enough, S3’s launch happened during the Bharat Bandh which was to protest the high price of Petrol in the country. Twitter was flooded with Jokes on S3 Bandh and price hike of S3 being paralleled to Petrol Hike. Curiously though, the online retailers continued to list S3 at Rs 38,900 with some offering it at 1000 less using coupons.

Online stores and the Deals galore

The online stores and Samsung have been engaged in a sort of Cat and Mouse game since the launch of the phone. With several stores lowering rates by as much as Rs 5000 to attract traffic. While one e-commerce site used a contest to lower the effective price of S3, another used a simple coupon. These offers seem to pop up in the radar for a small amount of time, create massive hype and then disappear without any notice. It seems Samsung has reined in the ecommerce stores and have prevented them from lowering the price to its intended M.O.P at least for now.

The Facts

Brand Perception

It seems clear that by pricing the actual product at an MRP higher than iPhone 4S , Samsung is finally vying for bargaining rights as the top smartphone maker in the world. The device clearly has some significant advantages over the latest iPhone in terms of hardware functionality as well as in additional features such as Smart Stay and S-tag which have not existed so far in smartphone world. Being the top spec phone is definitely reflected in the pricing of the device. The only thing that seems missing is perhaps the small half eaten apple gracing the back of the phone. It is this aspect that Samsung wants to drive home to the consumers. This phone is better than iPhone 4S and we will show you how by pricing it higher.

Skimming Pricing

The rapid descent of Samsung’s price from 43,180 to Rs 38,900 is not so surprising in the world of smartphones and e-commerce. For example, the Galaxy Tab launched in India at a price of Rs 38,000 and then the price was reduced to coincide with the launch of the iPad to Rs 28,000. The tablet today retails online at a price of Rs 23,999, all in a span of few months. The practice of skimming pricing isn’t new in the world of consumer electronics. While the ethical nature of the practice is debatable, the fact is that the practice is absolutely common place. Samsung has definitely gained significant amount of revenue from its pre-order and pre-booking customers who will pay the full MRP for the device.

Online Discounts: The great Customer Magnet

E-commerce stores will continue to play the cat and mouse game for a while longer. The attempts to woo in high value customers by offering Samsung Galaxy S3 at dirt cheap rates will continue and attract higher amount of new customers who would share the deal among friends. The typical customer who buys Samsung Galaxy S3 even at discount is someone who should contribute significantly to the sales of these online stores. This is why the temptation is higher to attempt and woo more such customers from competitors to one’s own site.

Retailer Advocacy

While e-commerce stores will continue to try attracting traffic by lowering prices and competing against each other over significant discounts, Samsung will try to appease its offline channel partners, who could easily convert customers into buying HTC One X if they find themselves severely short changed after the price drops online. It is no surprise then that we see deals blip online for a short while and disappear with no notice.

Conclusion

The S3 Saga has only begun and it’s already provided enough drama. The phone has gained significant attention from all over the world and has already been the trending topic on Twitter for both its Launch as well as its arrival in India. It is no surprise that S3 has found many takers despite its significant premium. The phone however will go through some interesting pricing shuffles in the e-commerce world in the days to come. E-commerce stores will continue offering limited time deals to gain more traffic and Samsung will continue to police them constantly stopping these run away charades. In the meantime if you are looking to buy a Samsung Galaxy S3 in the coming days, stay tuned for more interesting pricing deals.

This was a guest post by Sitakanta who is running Mysmartprice.com, a mobile and price comparison engine for books and mobile phones.

 
Founder-Editor

Raju is the founder-editor of Technology Personalized. A proud geek and an Internet freak, who is also a social networking enthusiast. You can follow him on Facebook and on Twitter. Mail Raju PP. Follow rajupp

 
 
  • raghupro

    This kind of strategy to list the product at significantly higher price initially and reduce it later on might work for some products but on a longer run it will damage the repute of that brand. People will feel skeptical to buy a premium product from that brand eventually.

    • Esponja

      Gracias

  • Sanjay

    Why do Samsung need online or offline channel to sell its products? Why can’t it use samsung Estore to sell directly to consumers? Dell has been selling PC directly to consumers for many years. Why Cellphone manufacturers follow the same practice?